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Proposed Rule2023-15284

Clean Water Act Section 404 Tribal and State Program Regulation

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Published

August 14, 2023

Issuing agencies

Environmental Protection Agency

Abstract

The Environmental Protection Agency (EPA) is proposing the Agency's first comprehensive revision to the regulations governing Clean Water Act (CWA) section 404 Tribal and State programs since 1988. The primary purpose of the proposed revision is to respond to longstanding requests from Tribes and States to clarify the requirements and processes for assumption and administration of a CWA section 404 permitting program for discharges of dredged and fill material. The proposed revisions would facilitate Tribal and State assumption of the section 404 program, consistent with the policy of the CWA as described in section 101(b), by making the procedures and substantive requirements for assumption transparent and straightforward. It clarifies the minimum requirements for Tribal and State programs while allowing for flexibility in how these requirements are met. In addition, the proposed rule clarifies the criminal negligence standard for both the CWA section 402 and section 404 programs. Finally, the proposed rule makes technical revisions to remove outdated references associated with the section 404 Tribal and State program regulations.

Full Text

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<title>Federal Register, Volume 88 Issue 155 (Monday, August 14, 2023)</title>
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[Federal Register Volume 88, Number 155 (Monday, August 14, 2023)]
[Proposed Rules]
[Pages 55276-55330]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-15284]

[[Page 55275]]

Vol. 88

Monday,

No. 155

August 14, 2023

Part IV

Environmental Protection Agency

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40 CFR Parts 123, 124, et al.

Clean Water Act Section 404 Tribal and State Program Regulation;
Proposed Rule

Federal Register / Vol. 88 , No. 155 / Monday, August 14, 2023 /
Proposed Rules

[[Page 55276]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 123, 124, 232, and 233

[EPA-HQ-OW-2020-0276; FRL-6682-02-OW]
RIN 2040-AF83

Clean Water Act Section 404 Tribal and State Program Regulation

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing the
Agency's first comprehensive revision to the regulations governing
Clean Water Act (CWA) section 404 Tribal and State programs since 1988.
The primary purpose of the proposed revision is to respond to
longstanding requests from Tribes and States to clarify the
requirements and processes for assumption and administration of a CWA
section 404 permitting program for discharges of dredged and fill
material. The proposed revisions would facilitate Tribal and State
assumption of the section 404 program, consistent with the policy of
the CWA as described in section 101(b), by making the procedures and
substantive requirements for assumption transparent and
straightforward. It clarifies the minimum requirements for Tribal and
State programs while allowing for flexibility in how these requirements
are met. In addition, the proposed rule clarifies the criminal
negligence standard for both the CWA section 402 and section 404
programs. Finally, the proposed rule makes technical revisions to
remove outdated references associated with the section 404 Tribal and
State program regulations.

DATES: Comments must be received on or before October 13, 2023October
13, 2023. Comments on the information collection provisions submitted
to the Office of Management and Budget (OMB) under the Paperwork
Reduction Act (PRA) are best assured of consideration by OMB if OMB
receives a copy of your comments on or before October 13, 2023. The EPA
will hold a virtual public hearing on September 6, 2023. Please refer
to the SUPPLEMENTARY INFORMATION section for additional information on
the public hearing.

ADDRESSES: You may send comments, identified by Docket ID No. EPA-HQ-
OW-2020-0276, by any of the following methods:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov/">https://www.regulations.gov/</a>
(our preferred method). Follow the online instructions for submitting
comments.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#48071f650c272b232d3c082d3829662f273e">[email&#160;protected]</a>. Include Docket ID No. EPA-HQ-OW-
2020-0276 in the subject line of the message.
<bullet> Mail: U.S. Environmental Protection Agency, EPA Docket
Center, Water Docket, Mail Code 28221T, 1200 Pennsylvania Avenue NW,
Washington, DC 20460.
<bullet> Hand Delivery or Courier: EPA Docket Center, WJC West
Building, Room 3334, 1301 Constitution Avenue NW, Washington, DC 20004.
The Docket Center's hours of operations are 8:30 a.m.-4:30 p.m.,
Monday-Friday (except Federal Holidays).
Instructions: All submissions received must include the Docket ID
No. for this rulemaking. Comments received may be posted without change
to <a href="https://www.regulations.gov/">https://www.regulations.gov/</a>, including any personal information
provided. For detailed instructions on sending comments and additional
information on the rulemaking process, see the ``Public Participation''
heading of the SUPPLEMENTARY INFORMATION section of this document.
The virtual public hearing will convene at 3:30 p.m. Eastern
Daylight Time (EDT) and will conclude at 7:30 p.m. EDT on September 6,
2023. Refer to the SUPPLEMENTARY INFORMATION section below for
additional information.

FOR FURTHER INFORMATION CONTACT: Kathy Hurld, Oceans, Wetlands, and
Communities Division, Office of Water (4504-T), Environmental
Protection Agency, Pennsylvania Avenue NW, Washington, DC 20460;
telephone number: 202-564-5700; email address: <a href="/cdn-cgi/l/email-protection#d6e2e6e2b1fba4a3bab3bbb7bdbfb8b196b3a6b7f8b1b9a0">[email&#160;protected]</a>;
website: <a href="https://www.epa.gov/cwa404g">https://www.epa.gov/cwa404g</a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
II. Public Participation
A. Written Comments
B. Participation in Virtual Public Hearing
III. General Information
A. Does this action apply to me?
B. What action is the Agency taking?
C. What is the Agency's authority for taking this action?
D. What are the incremental costs and benefits of this action?
IV. Background
A. Statutory and Regulatory History
B. Need for Rulemaking
C. Summary of Pre-Proposal Tribal and State Outreach
V. Proposed Rule
A. Program Approval
B. Permit Requirements
C. Program Operation
D. Compliance Evaluation and Enforcement
E. Federal Oversight
F. General
G. Potential Impacts of the Proposed Regulatory Changes on
Existing State Section 404 Programs
H. Other
I. Severability
VI. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review;
Executive Order 13563: Improving Regulation and Regulatory Review;
and Executive Order 14094: Modernizing Regulatory Review
B. Paperwork Reduction Act (PRA)
C. Regulatory Flexibility Act (RFA)
D. Unfunded Mandates Reform Act (UMRA)
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
G. Executive Order 13045: Protection of Children From
Environmental Health and Safety Risks
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations

I. Executive Summary

The proposed rule would modernize EPA's 1988 Clean Water Act (CWA)
section 404 Tribal and State program regulations. 53 FR 20764 (June 6,
1988). Section 404 of the CWA establishes a program to regulate the
discharge of dredged or fill material into navigable waters, which are
defined as ``waters of the United States.'' The section 404 program is
generally administered by the U.S. Army Corps of Engineers (``Corps'');
however, CWA section 404(g) authorizes Tribes and States to assume
administration of the program over certain waters within their
jurisdiction, except those waters retained by the Corps. If a program
request is approved by EPA, the Tribe or State is responsible for
permitting discharges of dredged and fill material into certain waters
of the United States within the Tribe's or State's jurisdiction,
authorizing discharges under general permits, enforcement of
unauthorized discharges, as well as enforcing the terms and conditions
of permits under the Tribe's or State's authority.
In this proposal, the Agency responds to longstanding requests from
Tribes and States to clarify the requirements and processes for
assumption and administration of a CWA section 404 program as well as
EPA oversight. The proposed revisions would facilitate Tribal and State
assumption of the section 404 program, consistent with the

[[Page 55277]]

policy of the CWA as described in section 101(b), by making the program
assumption process and requirements transparent and straightforward.
The proposed rule would also clarify how Tribes and States can ensure
their program meets the minimum requirements of the CWA while allowing
for flexibility in meeting these requirements.
Specifically, the proposal would facilitate the process of
obtaining program approval by harmonizing program description
requirements with program operation, compliance evaluation, and
enforcement requirements; establishing a clear procedure for
determining the extent of waters the Corps would retain following
Tribal or State assumption; and delaying the effective date of EPA's
program approval for a reasonable period of time to allow the assuming
Tribe or State and the Corps time to complete preparations for
implementation. It would clarify requirements for program
implementation by addressing Tribal and State compensatory mitigation
program requirements, explaining how Tribes and States could ensure
compliance with the CWA section 404(b)(1) Guidelines at 40 CFR part
230, and stating that Tribal and State programs must allow for judicial
review of issued permits. The proposal would streamline the procedure
for permitting long-term projects, as well as make permitting more
equitable by providing additional opportunities for Tribes to
participate in the permitting process when another Tribe or State
administers the section 404 program. It would clarify that States with
approved section 402 and section 404 programs must authorize criminal
prosecutions of violations based on a negligence standard and provide
additional detail about the applicability of conflict of interest
restrictions to the section 404 program. The proposal would provide
Tribes and States with options for demonstrating that their programs
are no less stringent than the Federal section 404 program. The
proposal would also harmonize procedures for program withdrawal with
the program approval process. Finally, the proposal would make certain
additional minor updates to the section 404 Tribal and State program
regulations, a minor update to 40 CFR part 232, and technical
corrections to 40 CFR part 124 to reflect the 1988 section 404 Tribal
and State program regulations.

II. Public Participation

A. Written Comments

Submit your comments, identified by Docket ID No. EPA-HQ-OW-2020-
0276, at <a href="https://www.regulations.gov">https://www.regulations.gov</a> (our preferred method), or the
other methods identified in the ADDRESSES section. Once submitted,
comments cannot be edited or removed from the docket. EPA may publish
any comment received to its public docket. Do not submit to EPA's
docket at <a href="https://www.regulations.gov">https://www.regulations.gov</a> any information you consider to
be Confidential Business Information (CBI), Proprietary Business
Information (PBI), or other information whose disclosure is restricted
by statute. Multimedia submissions (audio, video, etc.) must be
accompanied by a written comment. The written comment is considered the
official comment and should include discussion of all points you wish
to make. EPA will generally not consider comments or comment contents
located outside of the primary submission (i.e., on the web, cloud, or
other file sharing system). Please visit <a href="https://www.epa.gov/dockets/commenting-epa-dockets">https://www.epa.gov/dockets/commenting-epa-dockets</a> for additional submission methods; the full EPA
public comment policy; information about CBI, PBI, or multimedia
submissions; and general guidance on making effective comments.

B. Participation in Virtual Public Hearing

EPA will begin pre-registering speakers for the virtual public
hearing upon publication of this document in the Federal Register. To
register to speak at the virtual hearing, please use the online
registration form available at <a href="https://www.epa.gov/cwa404g/current-efforts-regarding-assumption-under-cwa-section-404">https://www.epa.gov/cwa404g/current-efforts-regarding-assumption-under-cwa-section-404</a>. The last day to
pre-register to speak at the hearing will be September 5, 2023. On
September 6, 2023, EPA will post a general agenda for the hearing that
will list pre-registered speakers in approximate order at: <a href="https://www.epa.gov/cwa404g/current-efforts-regarding-assumption-under-cwa-section-404">https://www.epa.gov/cwa404g/current-efforts-regarding-assumption-under-cwa-section-404</a>.
EPA will make every effort to follow the schedule as closely as
possible on the day of the hearing; however, please plan for the
hearing to run either ahead of schedule or behind schedule.
Each commenter will have three minutes to provide oral testimony.
EPA encourages commenters to provide EPA with a copy of their oral
testimony electronically by emailing it to <a href="/cdn-cgi/l/email-protection#97a3a7a3f0bae5e2fbf2faf6fcfef9f0d7f2e7f6b9f0f8e1">[email&#160;protected]</a>. EPA
also recommends submitting the text of your oral comments as written
comments to the rulemaking docket.
EPA may ask clarifying questions during the oral presentations but
will not respond to the presentations at that time. Written statements
and supporting information submitted during the public comment period
will be considered with the same weight as oral comments and supporting
information presented at the public hearing.
Please note that any updates made to any aspect of the hearing are
posted online at <a href="https://www.epa.gov/cwa404g/current-efforts-regarding-assumption-under-cwa-section-404">https://www.epa.gov/cwa404g/current-efforts-regarding-assumption-under-cwa-section-404</a>. While EPA expects the hearing to go
forward as set forth above, please monitor our website or contact Sarah
Randall at <a href="/cdn-cgi/l/email-protection#77434743105a05021b121a161c1e19103712071659101801">[email&#160;protected]</a> to determine if there are any
updates. EPA does not intend to publish a document in the Federal
Register announcing updates.
If you require the services of an interpreter or special
accommodations such as audio description, please pre-register for the
hearing with Sarah Randall at <a href="/cdn-cgi/l/email-protection#2a1e1a1e4d07585f464f474b4143444d6a4f5a4b044d455c">[email&#160;protected]</a> and describe your
needs by August 23, 2023. EPA may not be able to arrange accommodations
without advance notice.

III. General Information

A. Does this action apply to me?

This proposed rule will potentially affect Tribes and States that
have assumed or will in the future request to assume administration of
the CWA section 404 program. In the section 404 Tribal and State
program regulations, the term ``State'' includes any of the 50 States,
the District of Columbia, Guam, the Commonwealth of Puerto Rico, the
Virgin Islands, American Samoa, the Commonwealth of the Northern
Mariana Islands, and the Trust Territory of the Pacific Islands. For
purposes of the section 404 Tribal and State Program regulations, the
term ``State'' also includes eligible Federally recognized Indian
Tribes and any interstate agency requesting program approval or
administering an approved program. If you have questions regarding the
applicability of this action to a particular entity, consult the person
listed in the FOR FURTHER INFORMATION CONTACT section.

B. What action is the Agency taking?

EPA is proposing to revise and modernize its regulations for Tribal
and State assumption and administration of the CWA section 404 program
to provide greater clarity about the requirements, reduce barriers to
assumption, and make technical

[[Page 55278]]

corrections to facilitate Tribal and State assumption of the section
404 program. Assumption provides Tribes and States the opportunity to
administer the program, placing them in the decision-making position
for permits of discharges of dredged or fill material into certain
waters of the United States. This proposed rule would clarify the
Tribal and State requirements for assumption and program administration
as well as address the procedures EPA would follow, and the criteria
EPA would apply, in approving, exercising oversight, and withdrawing
Tribal and State programs under CWA section 404(g)-(k) and EPA's
implementing regulations at 40 CFR part 233. The proposed rule, if
finalized, would also serve to help achieve the policy of CWA section
101(b) that States implement CWA permit programs. 33 U.S.C. 1251(b).

C. What is the Agency's authority for taking this action?

The authority for this action is the Federal Water Pollution
Control Act, 33 U.S.C. 1251 et seq., including sections 309, 402, 404,
501, and 518.

D. What are the incremental costs and benefits of this action?

The costs and benefits are qualitatively discussed in the Economic
Analysis for the Proposed Rule. Most of the changes associated with the
action lead to either no economic impact or de minimis economic
impacts. There are potential incremental economic impacts associated
with the manner in which the proposed rule addresses the waters of the
United States over which the Corps retains administrative authority,
the effective date for approved Tribal and State programs, impacts to
downstream States, and program withdrawal procedures. The economic
analysis does not quantify these potential incremental economic
impacts, as there is no data associated with these changes on which to
base estimates.

IV. Background

A. Statutory and Regulatory History

1. CWA
Congress amended the Federal Water Pollution Control Act (FWPCA),
or the CWA as it is commonly called,\1\ in 1972 to address longstanding
concerns regarding the quality of the nation's waters and the Federal
Government's ability to address those concerns under existing law. The
objective of the new statutory scheme was ``to restore and maintain the
chemical, physical, and biological integrity of the Nation's waters.''
33 U.S.C. 1251(a). In order to meet that objective, Congress declared
two national goals: (1) ``that the discharge of pollutants into the
navigable waters be eliminated by 1985''; and (2) ``that wherever
attainable, an interim goal of water quality which provides for the
protection and propagation of fish, shellfish, and wildlife and
provides for recreation in and on the water be achieved by July 1, 1983
. . . .'' Id. at 1251(a)(1)-(2).
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\1\ The FWPCA is commonly referred to as the CWA following the
1977 amendments to the FWPCA. Public Law 95-217, 91 Stat. 1566
(1977). For ease of reference, EPA will generally refer to the FWPCA
in this document as the CWA or the Act.
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Congress passed the CWA to address the discharge of pollutants into
``navigable waters,'' defined as ``the waters of the United States.''
33 U.S.C. 1362(7). Section 301 contains the key regulatory mechanism:
``Except as in compliance with this section and sections 1312, 1316,
1317, 1328, 1342, and 1344 of this title, the discharge of any
pollutant by any person shall be unlawful.'' Id. at 1311(a). A
``discharge of a pollutant'' is defined to include ``any addition of
any pollutant to navigable waters from any point source,'' and a
``point source,'' in turn, is ``any discernible, confined and discrete
conveyance,'' such as a pipe or ditch. Id. at 1362(12), (14). The term
``pollutant'' means ``dredged spoil, solid waste, incinerator residue,
sewage, garbage, sewage sludge, munitions, chemical wastes, biological
materials, radioactive materials, heat, wrecked or discarded equipment,
rock, sand, cellar dirt and industrial, municipal, and agricultural
waste discharged into water.'' Id. at 1362(6). Thus, it is unlawful to
discharge pollutants into waters of the United States from a point
source unless the discharge complies with certain enumerated sections
of the CWA, including obtaining a permit. See id. at 1342, 1344.
2. CWA Section 404
Section 404 of the CWA establishes a program to regulate the
discharge of dredged or fill material into navigable waters, defined as
``waters of the United States.'' Regulated discharges of dredged or
fill material are defined in 40 CFR 232.2 and include any addition of
dredged material, including the redeposit other than incidental
fallback of dredged material, into waters of the United States and
generally the addition of any fill material (e.g., rock, sand, dirt)
placed in waters of the United States which has the effect of replacing
any portion of waters of the United States with dry land or changing
the bottom elevation of any portion of waters of the United States. See
40 CFR 232.2. Such discharges may be associated with activities such as
site development, erosion protection, bridges and piers, linear
projects (such as pipelines), natural resource extraction, shoreline
stabilization, and restoration projects.
Section 404 of the CWA requires a permit for discharges of dredged
and/or fill material from a point source into waters of the United
States unless the discharge is associated with an activity exempt from
section 404 permitting requirements under CWA section 404(f). Section
404(a) of the CWA authorizes the Secretary of the Army to issue permits
after notice and opportunity for public hearings, for the discharge of
dredged or fill material into navigable waters at specified disposal
sites. The Act specifies that the Secretary of the Army acts through
the Chief of Engineers, and thus the Corps generally administers the
day-to-day permitting program under section 404, except where Tribes or
States have assumed this authority and administer a program approved by
EPA as consistent with CWA section 404. Currently, Michigan, New
Jersey, and Florida have assumed this program, and the Corps manages
the day-to-day administration of the section 404 program in 47 States,
all Tribal lands, U.S. Territories, and the District of Columbia, and
in certain waters in Michigan, New Jersey, and Florida.
Under the section 404 program, discharges of dredged or fill
material into waters of the United States are authorized by individual
or general permits. Individual permits are processed by the permitting
agency (i.e., the Corps, or a Tribe or State with an approved program),
which evaluates them for consistency with the environmental criteria
outlined in the CWA 404(b)(1) Guidelines \2\ or the Tribal or State
environmental review criteria respectively. General permits developed
by the permitting agency may authorize discharges that will have only
minimal adverse effects, individually and cumulatively, to the aquatic
environment. General permits must be consistent with the environmental
review criteria set forth in the CWA 404(b)(1) Guidelines and may be
issued on a nationwide, regional, or programmatic basis for discharges
from specific categories of activities. The

[[Page 55279]]

general permit process allows these activities to proceed with little
or no delay, provided that the conditions for the general permit are
met. For example, a general permit can authorize discharges associated
with minor road activities or utility line backfill, if the regulated
activities under the general permit will cause only minimal adverse
environmental effects when performed separately, will have only minimal
cumulative adverse effects on the environment, and the discharge
complies with the general permit conditions and is in compliance with
the CWA 404(b)(1) guidelines.
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\2\ The CWA 404(b)(1) Guidelines are regulations that were
established by EPA in conjunction wih the Corps and codified at 40
CFR part 230. The CWA 404(b)(1) Guidelines are the substantive
environmental review criteria used to evaluate permits for
discharges of dredged and/or fill material under CWA section 404.
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The Act also expressly recognizes States' role in administering
permitting programs, including under section 404 of the CWA:

It is the policy of Congress that the States manage the
construction grant program under this chapter and implement the
permit programs under sections 1342 [402] and 1344 [404] of this
title. It is further the policy of the Congress to support and aid
research relating to the prevention, reduction, and elimination of
pollution, and to provide Federal technical services and financial
aid to State and interstate agencies and municipalities in
connection with the prevention, reduction, and elimination of
pollution.

33 U.S.C. 1251(b). Section 101(b) sets forth a policy focused on
preserving the responsibilities and rights of States. Those
responsibilities and rights are to prevent, reduce, and eliminate
pollution, including, but not limited to implementing the Act's
regulatory permitting programs, in partnership and with support from
the Federal Government. Indeed, the Supreme Court has described, on
numerous occasions, section 101(b) as creating a partnership between
the Federal and State Governments in which the States administer
provisions of the Act and are allowed to set standards more stringent
than the Federal standards. See, e.g., Int'l Paper Co. v. Ouellette,
479 U.S. 481, 489-90 (1987) (describing section 101(b) as allowing the
Federal Government to authorize administration of point source
pollution permits by Tribes and States and allowing States to establish
more stringent discharge limitations than Federal requirements); Train
v. Colo. Pub. Interest Grp., 426 U.S. 1, 16 & n.13 (1976) (describing
section 101(b) as providing States authority to develop permit programs
and establish standards more stringent than those under the CWA).
3. CWA Sections 404(g) and 404 (h-i)
In the 1977 Amendments to the CWA, Congress gave States the option
of assuming the section 404 program in certain waters of the United
States within the State's jurisdiction, subject to EPA approval. When
Congress enacted the CWA in 1972, the Corps had long been regulating
``navigable waters of the United States'' under the Rivers and Harbors
Act of 1899 (RHA). However, in the CWA, Congress defined ``navigable
waters'' to mean ``the waters of the United States,'' which went beyond
RHA authority. The Corps' initial post-CWA regulations treated the two
jurisdictional terms interchangeably. 39 FR 12115, 12119 (April 3,
1974). In 1975, the U.S. District Court for the District of Columbia
ordered the Corps to adopt new regulations in accordance with the
broader water quality purposes of the CWA. Nat. Res. Def. Council, Inc.
v. Callaway, 392 F. Supp. 685 (D.D.C. 1975).
In July 1975, the Corps issued new regulations outlining how they
would expand the section 404 program in phases to cover all waters of
the United States in compliance with the court's order. 40 FR 31320
(July 25, 1975). Phase I, which was effective immediately, regulated
discharges of dredged material or of fill material into coastal waters
or inland navigable waters of the United States and wetlands contiguous
or adjacent to those waters. Phase II, effective on July 1, 1976,
addressed discharges of dredged material or of fill material into
primary tributaries and contiguous or adjacent wetlands, as well as
lakes. Phase III, effective after July 1, 1977, addressed discharges of
dredged material or of fill material into ``any navigable water.'' Id.
at 31326. The Corps' intent with the regulatory phased-in approach was
to provide time for them to increase staffing and resources to
implement the expanded jurisdiction and workload. Id. at 31321 (``[i]n
view of man-power and budgetary constraints it is necessary that this
program be phased in over a two year period.'') Thus, the phases did
not mean all of the waters in the final regulation were not waters of
the United States, but rather established when the Corps would begin
regulating activities within each type of jurisdictional water.
Some in Congress were concerned about this phased implementation of
the definition of ``waters of the United States'' for the Corps' CWA
dredged and fill regulatory program, and in 1976, the House of
Representatives passed H.R. 9560, which redefined the CWA term
``navigable waters'' specifically for the section 404 program (but not
the rest of the CWA) as follows:

The term ``navigable waters'' as used in this section shall mean
all waters which are presently used, or are susceptible to use in
their natural condition or by reasonable improvement as a means to
transport interstate or foreign commerce shoreward to their ordinary
high water mark, including all waters which are subject to the ebb
and flow of the tide shoreward to their mean high water mark (mean
higher high water mark on the west coast).

H.R. Rep. No. 94-1107, at 63 (1976). The House Committee explained
that the new definition would mirror the longstanding RHA section 10
definition of ``navigable waters of the United States,'' except that it
would omit the ``historical test'' of navigability. Id. at 19. The
House thought that discharges of dredged or fill material occurring in
``waters other than navigable waters of the United States . . . are
more appropriately and more effectively subject to regulation by the
States.'' Id. at 22.
The Senate disagreed. It declined to redefine ``navigable waters''
for purposes of the section 404 program and the House bill was not
enacted into law. Instead, the Senate passed a bill that allowed the
States to assume section 404 permitting authority, subject to EPA
approval, in Phase II and III waters (as defined in the Corps' 1975
regulations quoted above). S. Rep. No. 95-370, at 75 (1977).\3\ After
assumption, the Corps would retain section 404 permitting authority in
Phase I waters. The final bill, H.R. 3199, referred to as the 1977 CWA
Amendments, was a compromise: it did not change the definition of
``navigable waters'' for the section 404 program, but it allowed States
to assume permitting authority in ``phase 2 and 3 waters after the
approval of a program by [EPA].'' H.R. Rep. No. 95-830, at 101
(1977).\4\ The final amendments included a parenthetical phrase in
section 404(g)(1) that defined Corps-retained waters using the same
language that the House Committee had used in its effort to limit the
Corps' jurisdiction, with the exception of waters that were
historically used to transport interstate or foreign commerce but no
longer do so, and with the addition of ``wetlands adjacent thereto.''
H.R. Rep. No. 95-830, at 39. The preamble to the Corps' 1977
regulations described them as ``waters already being regulated by the
USACE,'' i.e., those waters the Corps regulated under section 10 of the
RHA, plus adjacent wetlands. 42 FR 37122, 37124 (July 19, 1977). The
legislative history of section 404(g) in both the House and the

[[Page 55280]]

Senate suggests that Congress expected widespread assumption of the
section 404 program, leaving only RHA section 10 waters, other than
those only historically used to transport interstate or foreign
commerce, and adjacent wetlands. S. Rep. No. 95-370, at 77-78,
reprinted in 4 Legis. History 1977, at 710-11.
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\3\ The Senate Report is reprinted in Comm. On Env't & Publ.
Works, 95th Cong., 4 A Legislative History of the Clean Water Act of
1977 (Legis. History) at 635, 708 (October 1978).
\4\ The House Report is reprinted in 3 Legis. History 1977, at
185, 285.
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The 1987 amendments to the CWA added section 518 which authorizes
EPA to treat eligible Indian Tribes in a manner similar to States for a
variety of purposes, including administering each of the principal CWA
regulatory programs such as CWA section 404. 33 U.S.C. 1377(e). To
assume the section 404 program, Tribes and States are required to
develop a dredged and fill material discharge permit program under
Tribal or State authority consistent with the requirements of the CWA
and implementing regulations at 40 CFR part 233 and submit a request to
EPA to assume the program. Section 404(h)(2) of the CWA states that if
the EPA Administrator determines that a Tribe or State that has
submitted a program request under section 404(g)(1) has the authority
set forth in section 404(h)(1) of the CWA, then the Administrator
``shall approve'' the Tribe's or States' request to assume the section
404 program. Under CWA section 404(h)(3), if the Administrator fails to
make a determination with respect to any program request submitted by a
Tribe or State within 120 days after the date of receipt of the
request, the program shall be deemed approved.
A Tribe or State assuming the section 404 program must have
authority under Tribal or State law to assume, administer, and enforce
the program; EPA's approval does not delegate authority to issue a
permit on behalf of the Federal Government. By assuming administration
of the section 404 program under section 404(g), an eligible Tribe or
State takes on the primary responsibility of permitting discharges of
dredged and/or fill material into certain waters of the United States
within its borders.\5\ For section 404 permitting purposes, the Tribe
or State must exercise jurisdiction over all assumed waters subject to
the CWA except those waters retained by the Corps. 33 U.S.C. 1344(g).
The Corps retains section 404 permitting authority for all non-assumed
waters as well as RHA section 10 permitting authority in all waters
subject to RHA section 10. For example, States generally do not assume
authority over Tribal waters under CWA section 404. The term ``waters
of the United States'' refers to the geographic extent of waters
covered by the CWA's regulatory programs.\6\ The scope of waters that
may be assumed by Tribes or States under section 404(g) is a subset of
waters of the United States. Tribes or States with assumed programs can
also regulate waters that are retained by the Corps, or waters that are
not waters of the United States, under Tribal or State law. This
rulemaking addresses the division of authority under section 404
between the Federal Government and a Tribe or State with an approved
program and does not alter the scope of CWA jurisdiction over waters of
the United States.
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\5\ Legislative history makes clear that Congress did not intend
Tribal or State assumption under section 404(g) to be a delegation
of the permitting program. H.R. Rep. No. 95-830 at 104 (1977) (``The
Conference substitute provides for the administration by a State of
its own permit program for the regulation of the discharge of
dredged or fill material. . . . The conferees wish to emphasize that
such a State program is one which is established under State law and
which functions in lieu of the Federal program. It is not a
delegation of Federal authority.'') (emphasis added). The conference
report is available at <a href="https://www.epa.gov/sites/production/files/2015-11/documents/1977_conf_rept.pdf">https://www.epa.gov/sites/production/files/2015-11/documents/1977_conf_rept.pdf</a>.
\6\ The agencies currently interpret ``waters of the United
States'' consistent with the Supreme Court's decision in Sackett v.
EPA, No. 21-454 (U.S. May 25, 2023).
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Approved Tribal or State section 404 programs can be broader in
scope or more stringent than the CWA requirements, or both. Where they
have a broader scope of program coverage than what is required by the
CWA section 404 program, the additional coverage is not considered part
of the EPA-approved program.\7\ A Tribe or State may not issue a permit
if EPA has objected to or placed conditions on a permit until EPA's
concerns are addressed. Tribes and States can charge permit fees to
fund the permitting program. Tribes and States may authorize discharges
of dredged or fill material by issuing individual permits or general
permits, which are limited to five years.
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\7\ See 40 CFR 233.1(c) and 40 CFR 233.1(d).
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To date, three States--Michigan, New Jersey, and Florida--
administer an EPA approved section 404 program. Michigan's program was
approved in 1984 (49 FR 38947, October 2, 1984); New Jersey's was
approved in 1994 (59 FR 9933, March 2, 1994); and Florida's was
approved in 2020 (85 FR 83553, December 22, 2020). At present, no
Tribes administer the section 404 program. Several States are exploring
the possibility of assuming the section 404 program, and about one-
third of States have expressed some level of interest to EPA over time
regarding assumption of the Federal section 404 dredged and fill permit
program. At this time, EPA is unaware of any Tribes exploring seeking
to assume the section 404 program.
4. EPA's Role in CWA Section 404
While the Corps is the Federal permitting agency and administers
the Federal section 404 program on a day-to-day basis, EPA also plays
an important role in the Federal section 404 program. Both agencies
develop and interpret policy and guidance and have promulgated section
404 regulations. The substantive and procedural requirements applicable
to section 404 are detailed in EPA's regulations at 40 CFR parts 230
through 233 and the Corps' regulations at 33 CFR parts 320, 323, 325-
328, 330 through 333, and 335 through 338. Both EPA and the Corps have
enforcement authorities pursuant to section 404, as specified in
sections 301(a), 309, 404(n), and 404(s) of the CWA. A 1989 enforcement
memorandum between the Department of the Army and EPA discusses the
allocation of Federal enforcement for the section 404 program between
EPA and the Corps.\8\ In the context of section 404, the Corps does the
day-to-day work of conducting jurisdictional determinations,\9\ though
EPA has final administrative authority over the scope of CWA
jurisdiction.\10\ EPA has approval and oversight authority for Tribal
and State programs, including final authority and approval of the scope
of assumed waters. See 33 U.S.C. 1344(g)-(l).
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\8\ Memorandum Between the Department of the Army and the
Environmental Protection Agency Concerning Federal Enforcement for
the Section 404 Program of the Clean Water Act (January 19, 1989),
available at: <a href="https://www.epa.gov/cwa-404/federal-enforcement-section-404-program-clean-water-act">https://www.epa.gov/cwa-404/federal-enforcement-section-404-program-clean-water-act</a>. A February 1994 memorandum
modified the January 1989 memorandum to be effective indefinitely,
unless modified or revoked by the agencies, see <a href="https://www.epa.gov/sites/default/files/2015-07/documents/1994_enforcement_modification.pdf">https://www.epa.gov/sites/default/files/2015-07/documents/1994_enforcement_modification.pdf</a>.
\9\ EPA decisions on jurisdiction are not approved
jurisdictional determinations as defined and governed by the Corps
regulations at 33 CFR 331.2.
\10\ Administrative Authority to Construe Sec. 404 of the
Federal Water Pollution Control Act (``Civiletti Memorandum''), 43
Op. Att'y Gen. 197 (1979).
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Under section 404, EPA also establishes environmental criteria used
in evaluating permit applications (i.e., the CWA 404(b)(1) Guidelines)
in conjunction with the Corps; determines the applicability of section
404(f) exemptions; approves and oversees Tribal and State assumption of
the section 404 program (sections 404(g)-(k)); reviews and comments on
general permits and individual permit applications issued by a Tribe,
State, or the Corps; has authority to prohibit,

[[Page 55281]]

deny, or restrict the use of any defined area as a disposal site
(section 404(c)); and can elevate Corps permits for resolution (section
404(q)).
EPA's role with respect to section 404 Tribal and State programs
includes working with Tribes and States prior to assumption; reviewing
and approving or disapproving assumption requests; overseeing assumed
programs; and coordinating Federal review of Tribal or State permit
actions. EPA funding programs can also be used by Tribes and States to
build capacity to assume the section 404 program (e.g., Wetland Program
Development Grants) or to implement assumed programs (e.g., CWA section
106 funds). EPA retains final administrative authority over the scope
of CWA jurisdiction for assumed programs under section 404(g). With
respect to enforcement, EPA can commence a separate enforcement action
under appropriate circumstances. 33 U.S.C. 1344(n); 40 CFR 233.41,
Note.
5. EPA's Existing CWA Section 404 Tribal and State Program Regulations
In 1980, in response to the 1977 CWA Amendments, EPA promulgated
regulations to establish procedures and criteria for approval or
disapproval of State programs under section 404(g) and for monitoring
State programs after program approval (45 FR 33290 (May 19, 1980)).\11\
On June 6, 1988, EPA published in the Federal Register a final rule
revising the procedures and criteria used in approving, reviewing, and
withdrawing approval of section 404 State programs at 40 CFR part 233.
53 FR 20764 (June 6, 1988). The final rule also incorporated section
404 program definitions and section 404(f)(1) exemptions at 40 CFR part
232.\12\ The 1988 regulations provide States with flexibility in
program design and administration while still meeting the requirements
and objectives of the CWA.
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\11\ In 1983, EPA reorganized the presentation of the permit
programs in the CFR, including moving the regulations for 404 State
programs to their current location at 40 CFR part 233, but this rule
made no substantive changes to any of the affected sections (48 FR
14146, 14208, April 1, 1983). The rule did make minor technical
changes.
\12\ The final 1988 rule essentially recodified at 40 CFR part
232 the existing section 404 program definitions and section
404(f)(1) permit exemptions in a new, separate part to eliminate any
confusion about their applicability. The section 404 program
definitions at 40 CFR part 232 apply to both the Federal and State
administered programs. This preamble and the proposed rule focus on
EPA's regulations at 40 CFR part 233 regarding State programs under
section 404(g), with one proposed minor change to a definition in 40
CFR part 232.
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Several revisions and additions to the State program regulations in
40 CFR part 233 have been made since 1988. On February 13, 1992, EPA
finalized a rule amending the regulations to reflect the newly created
Environmental Appeals Board in Agency adjudications, including revising
section 233.53 related to withdrawal of section 404 State program
approval (57 FR 5320 (February 13, 1992)). On February 11, 1993, EPA
published a final rule amending its section 404 State program
regulations at 40 CFR part 233 by adding subpart G (``Treatment of
Indian Tribes as States''), which contains procedures by which an
Indian Tribe may qualify for treatment in a similar manner as a State
(TAS) in order to be eligible to submit a request to assume the section
404 program (58 FR 8172, February 11, 1993).\13\ The 1993 rule also
revised 40 CFR part 232 by adding new definitions for ``Federal Indian
reservation,'' ``Indian Tribe,'' and ``States.'' The 1993 rule was
finalized to satisfy the statutory provisions in CWA section 518 with
respect to the section 404 program. In a final rule published on
December 14, 1994 (59 FR 64339, 64345 (December 14, 1994)), the subpart
G regulations regarding Tribal eligibility at sections 233.60, 233.61,
and 233.62 were revised to improve and simplify the process for Tribes
to obtain EPA approval to assume the section 404 program. Under that
rule, known as the Simplification Rule, a Tribe did not need to
prequalify for TAS before requesting to assume the section 404 program,
but instead could establish its TAS eligibility at the program approval
stage, subject to the EPA notice and comment procedures for State
program approval. A 2005 rule on cross-media electronic reporting (70
FR 59848, October 13, 2005) added section 233.39 on electronic
reporting. EPA also codified in regulation the approval of the Michigan
program on October 2, 1984 (49 FR 38947) and the New Jersey program on
March 2, 1994 (59 FR 9933).
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\13\ The 1993 final rule revised the definition of ``State'' at
section 233.2 to: ``State means any of the 50 States, the District
of Columbia, Guam, the Commonwealth of Puerto Rico, the Virgin
Islands, American Samoa, the Commonwealth of the Northern Mariana
Islands, the Trust Territory of the Pacific Islands, or an Indian
Tribe, as defined in this part, which meet the requirements of Sec.
233.60. For purposes of this part, the word State also includes any
interstate agency requesting program approval or administering an
approved program.'' (58 FR 8183, February 11, 1993). Thus when the
term ``State Program'' is used in the regulations, it refers to an
approved program run by any of the entities described in the
definition of ``State,'' including Tribes.
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The existing regulations at 40 CFR part 233 describe the Tribe's or
State's program requirements, EPA responsibilities, approval and
oversight of assumed programs, and requirements for review,
modification, and withdrawal of State programs (as necessary). The
regulations also specify that a Tribal or State program must be
consistent with and no less stringent than the Act and implementing
regulations, allow for public participation, be consistent with the CWA
404(b)(1) Guidelines, and have adequate enforcement authority. The
regulations outline requirements for Tribes to determine eligibility to
assume the program. Lastly, part 233, subpart H contains the approved
Tribal and State programs that EPA has codified.

B. Need for Rulemaking

Congress enacted the 1977 CWA Amendments to make the regulation of
the discharge of dredged or fill material a shared responsibility of
the States and the Federal Government.\14\ The intent of this design is
to use the strengths of State and Federal Governments in a partnership
to protect the nation's water resources and to meet the policy of the
CWA at section 101(b) that States ``implement the permit programs under
sections 1342 and 1344 of this title'' and of ``preserv[ing] and
protect[ing] the primary responsibilities and rights of States to
prevent, reduce, and eliminate pollution. . . .'' \15\ Congress also
viewed State assumption of the section 404 program as complementing
States' existing authority to administer the CWA section 402
program.\16\
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\14\ See, e.g., H.R. Report No. 95-830 at 52 (1977) (``Federal
agencies are to cooperate with State and local agencies to develop
solutions to prevent, reduce and eliminate pollution in concert with
programs for managing water resources''). See also S. Report No. 95-
370 at 78 (1977) (``Several States have already established separate
State agencies to control discharges of dredge or fill materials''
and ``The amendment encourages the use of a variety of existing or
developing State and local management agencies.''). See also id. at
11 (``The provision solves most real problems with section 404: (a)
by providing general delegation authority to the States . . .'').
\15\ See S. Report No. 95-370 at 77 (1977) (``The committee
amendment is in accord with the stated policy of Public Law 92-500
of `preserving and protecting the primary responsibilities and
rights of States or [stet] prevent, reduce, and eliminate
pollution.' '').
\16\ See id. at 77 (``[The amendment] provides for assumption of
the permit authority by States with approved programs for control of
discharges for dredged and fill material in accord with the criteria
and with guidelines comparable to those contained in 402(b) and
404(b)(1).''). See also id. at 77-78 (``By using the established
mechanism in section 402 of Public Law 92-500, the committee
anticipates the authorization of State management of the permit
program will be substantially expedited. At least 28 State entities
which have already obtained approval of the national pollutant
discharge elimination system under the section should be able to
assume the program quickly.'').
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Yet while CWA section 404 and EPA's implementing regulations
provide for Tribes and States to assume the program, only three
States--Michigan,

[[Page 55282]]

New Jersey, and Florida--have received approval to administer the
program. In 2010 and 2011 letters to EPA, the Environmental Council of
States recommended further steps to encourage Tribal and State
assumption of the program, remove barriers to assumption, and improve
the efficiency of the program.\17\
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\17\ Letter from R. Steven Brown, Executive Director, The
Environmental Council of States, to Nancy K. Stoner, Acting
Assistant Administrator, Office of Water, U.S. Environmental
Protection Agency. July 22, 2011. Subject: Progress Report and
Recommended Actions to Further Clarify Section 404 Assumption
Application Requirements and Implementation by Tribes and States.
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Tribes and States have identified uncertainty regarding the extent
of assumable waters and wetlands as a key barrier to assumption. As
noted above, the Tribes and States cannot assume all waters of the
United States within their boundaries as the statute specifies that the
Corps retains administrative authority in certain waters. While some
Tribes and States have considered assumption, they have expressed to
EPA the need for further clarification regarding which waters a Tribe
or State may assume and which waters the Corps retains. In a 2014
letter to then-EPA Acting Assistant Administrator Nancy Stoner,\18\
State associations asked EPA to clarify the scope of assumable waters,
citing uncertainty on this issue as a barrier to assuming the program.
In 2015, EPA formed the Assumable Waters Subcommittee under the
auspices of the National Advisory Council for Environmental Policy and
Technology (NACEPT) to provide advice and develop recommendations as to
how the EPA could best clarify the scope of waters over which a Tribe
or State may assume CWA section 404 permitting responsibilities, and
the scope of waters over which the Corps retains CWA section 404
permitting responsibilities. The Subcommittee included 22 members
representing States, Tribes, Federal agencies, industry, environmental
groups, State associations, and academia. The Subcommittee presented
its recommendations to NACEPT on May 10, 2017. NACEPT endorsed the
Subcommittee report in its entirety and submitted it to former EPA
Administrator Scott Pruitt on June 2, 2017, with additional notations
and recommendations concerning a preference for clarity through
regulation. The ``Final Report of the Assumable Waters Subcommittee,
May 2017,'' recommended that EPA develop regulations to clarify assumed
and retained waters.\19\ This proposed rule responds to the
Subcommittee's recommendations as discussed further in section V.A.2 of
this preamble addressing retained waters. The proposal also responds to
many of the additional issues raised by Tribes and States as challenges
to assuming section 404 and draws from EPA's experience working with
Tribes and States pursuing assumption and in program oversight. Aside
from the 1993 Tribal additions, this proposed rule would be the first
comprehensive update of the section 404 Tribal and State program
regulations since 1988.
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\18\ ECOS, ACWA, and ASWM Letter to Nancy Stoner, Acting
Assistant Administrator for Water. April 30, 2014.
\19\ Available at <a href="https://www.epa.gov/cwa-404/submission-assumable-waters-subcommittees-final-report">https://www.epa.gov/cwa-404/submission-assumable-waters-subcommittees-final-report</a> and in the docket for
this proposed rule, Docket ID No. EPA-HQ-OW-2020-0276.
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Several of the challenges that Tribes and States have identified
regarding section 404 assumption cannot be resolved by this proposed
rulemaking. For example, lack of funding and the financial cost of
Tribal or State implementation of the section 404 program has been
identified as a major impediment to program assumption \20\ but is
outside the scope of this rulemaking. Some States have also identified
a lack of political will and lack of public support as challenges to
assuming the section 404 program.
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\20\ See Association of State Wetland Managers and Environmental
Council of the States, 2011, Clean Water Act Section 404 Program
Assumption: A Handbook for Tribes and States, available at <a href="https://www.aswm.org/pdf_lib/cwa_section_404_program_assumption.pdf">https://www.aswm.org/pdf_lib/cwa_section_404_program_assumption.pdf</a>.
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C. Summary of Pre-Proposal Tribal and State Outreach

On June 11, 2018, the Agency published its 2018 Spring Unified
Agenda of Regulatory and Deregulatory Actions \21\ announcing that the
Agency was considering a rulemaking to provide the first comprehensive
revision to the existing section 404 Tribal and State program
regulations since 1988 and provide clarity on specific issues requested
by the Tribes and States. The Agency's outreach and engagement efforts
since that announcement are summarized below.
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\21\ Available at <a href="https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201804&RIN=2040-AF83">https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=201804&RIN=2040-AF83</a>.
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In September 2018, the Agency sent letters to Tribal leaders and
State governors announcing opportunities for Tribes and States to
provide input on areas of the existing regulation that could benefit
from additional clarity and revision. EPA initiated formal consultation
efforts under Executive Order 13175 on Consultation and Coordination
with Indian Tribal Governments regarding provisions that require
clarification within the existing section 404 Tribal and State program
regulations. The Agency sent notification of the consultation period to
Tribes on October 18, 2018, and consultation ran from October 22, 2018,
through December 21, 2018. On November 20, 2018, and November 29, 2018,
EPA held Tribal informational webinars. See section VI.F of this
preamble for further details on the Agency's Tribal consultation.
During the consultation period, EPA participated in in-person meetings
with Tribal associations, including a presentation for the National
Tribal Water Council on October 24, 2018, and an informational session
at the National Congress of American Indians 75th Annual Convention on
October 24, 2018. The Agency also attended the EPA Region 9 Regional
Tribal Operations Committee (RTOC) meeting on October 31, 2018, the EPA
Region 6 RTOC meeting on November 28, 2018, and the EPA Region 7
Enhancing State and Tribal Programs Wetland Symposium on November 5,
2018. At the meetings and webinars, EPA provided a presentation and
sought input on aspects of the existing section 404 Tribal and State
program regulations and assumption process. The Agency sought input on
the scope of assumable waters, partial assumption, calculating economic
costs and benefits, and other issues.
Although the Agency does not view this rulemaking as having
Federalism implications as defined in Executive Order 13132, the Agency
sought pre-proposal input from States on plans to modernize the
Agency's existing section 404 Tribal and State program regulations. The
Agency invited written input from State agencies from November 12,
2018, through January 11, 2019,\22\ and hosted an in-person meeting
with State officials on December 6, 2018. At the in-person meeting, the
Agency provided an overview of the rulemaking effort and the section
404(g) program and led themed discussions for input for the proposed
rule, including clarifying assumed and retained waters and adjacent
wetlands, enforcement and compliance, partial assumption, and
calculating economic costs and benefits of the rule.
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\22\ Due to the lapse in Federal Government funding, EPA
accepted comments from States until February 2019.
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EPA considered all input received during the development of the
proposed rule, including written input submitted during outreach
efforts to Tribes and States. Written input and a summary of the in-
person State meeting and the

[[Page 55283]]

Tribal webinars are available in the docket for this proposed rule.
In 2023, EPA held informational webinars for States on January
24th, and for Tribes on January 25th and January 31st. At these
webinars, EPA provided Tribes and States with an update on the
rulemaking effort and reminded Tribes and States of the input they had
previously provided to EPA. EPA did not seek additional input from
Tribes or States at these 2023 webinars.

V. Proposed Rule

This section of the preamble describes EPA's proposed regulatory
revisions and provides the Agency's rationale for those proposed
revisions. EPA is proposing to revise the CWA section 404 Tribal and
State program regulations at 40 CFR part 233 to provide additional
clarity on program approval process and requirements, permit
requirements including compensatory mitigation, program operations,
compliance evaluation and enforcement, Federal oversight, dispute
resolution, and conflict of interest provisions, as well as to provide
other technical and minor updates. EPA is also proposing to revise its
criminal enforcement requirements in 40 CFR 123.27 and 40 CFR 233.41,
which apply to Tribes and States that are authorized to or that seek
authorization to administer a CWA section 402 National Pollutant
Discharge Elimination System (NPDES) permitting program or a section
404 program respectively. EPA proposes to provide technical edits to 40
CFR part 124 consistent with the Agency's intent to clarify that the
part 124 regulations do not apply to Tribal or State section 404
programs. Finally, EPA proposes to clarify a definition in 40 CFR part
232 that is related to Tribal and State section 404 program assumption.

A. Program Approval

This section of the preamble includes topics that are generally
related to EPA's approval of a Tribal or State section 404 program,
including program assumption requirements, waters that are retained by
the Corps, effective dates for approved or revised Tribal or State
programs, and compensatory mitigation requirements.
1. Program Assumption Requirements
a. What is the Agency proposing?
EPA is proposing to revise the current requirements for the program
descriptions that Tribes and States submit to EPA when they request
approval to assume the section 404 program. First, the proposed
revisions would clarify that the description of the funding and staff
devoted to program administration and compliance evaluation and
enforcement must demonstrate that the Tribe or State is able to carry
out the existing regulatory requirements for permit review, program
operation, and compliance evaluation and enforcement programs, provided
in 40 CFR 233 subparts C through E. The proposal further specifies that
in order to do so, the Tribe or State must provide in the program
description staff position descriptions and qualifications, program
budget and funding mechanisms, and any other information a Tribe,
State, or EPA considers relevant. The proposed revision would ensure
that when a Tribe or State submits a request to assume the section 404
program, its program submission would demonstrate the Tribe or State
has the resources necessary to ensure that the permit decisions comply
with permit requirements in 40 CFR 233 subpart C, as applicable; that
its permitting operations would comply with the program operation
requirements of 40 CFR 233 subpart D, as applicable; and that its
compliance evaluation and enforcement operations would comply with the
compliance evaluation and enforcement requirements of 40 CFR 233
subpart E, as applicable.
Similarly, the Agency proposes to revise the existing requirement
that the Tribe or State program description include ``A description of
the scope and structure of the State's program . . . [which] should
include [the] extent of [the] State's jurisdiction, scope of activities
regulated, anticipated coordination, scope of permit exemptions if any,
and permit review criteria.'' 40 CFR 233.11(a). EPA proposes to clarify
that this description ``must'' address all of the listed elements in
233.11(a). The proposal would also clarify that the description must
provide sufficient information to demonstrate that the criteria are
sufficient to meet the permit requirements in 40 CFR 233 subpart C.
These proposed revisions would not substantively change the
requirements for permit review, program operation, and compliance
evaluation and enforcement programs. Rather, they would ensure that
Tribes or States provide EPA with sufficient information to ensure that
Tribal or State programs would be able to meet these requirements.
Finally, EPA proposes to revise the existing program description
requirement that if more than one Tribal or State agency would be
administering the program, the program description shall address inter-
agency coordination. The revision would clarify that the description of
inter-agency coordination must include coordination on enforcement and
compliance.
b. Why is the Agency proposing this approach?
The Agency is proposing these changes to better harmonize its
program approval requirements with program requirements in other
sections of the CFR. Specifically, EPA seeks to update 40 CFR 233
subpart B to reflect the requirements of 40 CFR 233 subparts C through
E and to better effectuate these regulations and CWA section 404(h).
To assume the section 404 program, a Tribe or State must be able to
demonstrate that it can meet the requirements for permitting, program
operation, and compliance evaluation and enforcement set forth in 40
CFR 233 subparts C through E and administer a program that is
consistent with section 404. A program that lacks the resources to do
so would not be able to carry out existing statutory and regulatory
requirements. This proposed approach would not change these existing
requirements, but would ensure that EPA receives information necessary
to determine that Tribes and States can meet them. In the 1988 preamble
to the existing section 404 Tribal and State program regulations, EPA
stated that the program description Tribes and States must submit to
EPA ``should provide the information needed to determine if the State
has sufficient manpower to adequately administer a good program.'' 53
FR 20764, 20766 (June 6, 1988). However, 40 CFR 233 subpart B, which
contains the requirements for program approval, does not explicitly
state that Tribes and States must demonstrate that they have sufficient
resources to meet the requirements for permit issuance, program
operation, and compliance and enforcement outlined in subparts C
through E. The existing regulations require that the program
description contain ``a description'' of available funding and manpower
(i.e., staffing),\23\ 40 CFR 233.11(d), but do not clearly indicate
that the available funding and staffing must be sufficient to meet the
requirements of subparts C through E. In addition, the current
regulations provide that the program description include ``a
description'' of the Tribe's or State's compliance evaluation and
enforcement programs, including a description of how the Tribe or State
will coordinate its enforcement strategy with the Corps and EPA, 40 CFR

[[Page 55284]]

233.11(g), but do not clearly indicate that the Tribe's or State's
compliance evaluation and enforcement programs must be sufficient to
meet the requirements for section 404 program compliance evaluation and
enforcement in subpart E. In the absence of these clarifications, the
regulations remain unclear about what kind of demonstration is needed
by Tribes and States as they develop their programs. This proposal
would ensure that a description of funding, staffing, or compliance
evaluation and enforcement programs must satisfy the text of 40 CFR
233.11(d) and (g). The purpose of subpart B is to require Tribes and
States to demonstrate that they in fact have the capacity to carry out
subparts C through E, pursuant to the original intent of the current
regulations, and these changes would more clearly effectuate that
intent.
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\23\ In this proposal, EPA is replacing the term ``manpower''
with ``staffing'' and will use the term ``staffing'' throughout this
proposal.
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EPA specifically proposes to require the Tribe or State to identify
position descriptions and qualifications as well as budget and funding
mechanisms in the program description because this information is
critical to understanding whether a Tribe or State will be able to
administer subparts C through E. EPA must be able to determine that the
Tribe or State will have sufficient qualified staff and a reliable and
sufficient funding mechanism that will be commensurate with the
responsibilities it seeks to assume. Given the importance of these
elements, Tribes and States should have staffing and budget information
readily available, and providing it in the program description should
not impose a significant new burden.
Tribes and States should provide other information as well to the
extent it is necessary to demonstrate that they will be able to carry
out subparts C through E. In addition to providing the information EPA
proposes to require in the regulations, Tribes and States may choose to
demonstrate their capacity to implement subparts C through E by
comparing the number of Corps staff that currently administer the
section 404 program in Tribal areas or in a State to the number of
Tribal or State staff that will implement the assumed program. Given
differences in administrative structures, a direct comparison may not
be feasible, however; for example, a Corps district may not be able to
identify the number of staff focused solely on section 404 permitting
or one State if its staff administers the section 10 and section 404
regulatory program for a number of States. Similarly, a Tribal or State
program may incorporate other permitting into its 404 program such as
permits to address potential flooding. These challenges could be
compounded in States that include multiple Corps districts. An
alternative approach could compare the average number of different
types of section 404 permits (i.e., individual versus general permits)
Corps staff handle in a district to the average number of permits the
Tribe or State has or anticipates its staff will handle in an assumed
program.
CWA section 404(h) provides that before approving a Tribe's or
State's section 404 program, EPA shall determine whether the Tribe or
State has the authority to administer the program, including to issue
permits that comply with the CWA 404(b)(1) Guidelines, to provide for
public notice and opportunity for comment on permit applications, and
to abate violations of the permit or permit program. See 33 U.S.C.
404(h)(1)(A), (C), (G). Section 404(h) refers to a Tribe's or State's
``authority,'' but legal authority would be meaningless without the
capacity to implement it. Clarifying that EPA must ensure that Tribes
and States have the resources and programs in place to implement their
authority best carries out section 404(h).
This proposal does not prescribe a particular metric that Tribes or
States must use to ensure sufficient funding, staffing, or compliance
evaluation and enforcement programs. It also does not prescribe the
specific position descriptions and qualifications a Tribe or State must
have, a minimum budget, or a particular type of funding mechanism. The
proposed rule would retain a certain amount of flexibility for Tribes
and States, recognizing that the section 404 program needs of different
Tribes and States can differ. Tribal or State agencies likely have
varying procedures for determining sufficient staff and funding levels
and may choose to organize their programs in different ways.
Furthermore, the necessary section 404 program budget may differ as
well depending on the anticipated workload for the Tribe or State. EPA
is committed to working with Tribes and States to help their programs
meet the proposed standard and may develop guidance in the future that
Tribes and States could use to ensure sufficient program capacity. In
adding a new clarification to better carry out the existing
requirements of 40 CFR 233.11, this proposed revision would not reopen
those existing requirements.
EPA's proposed clarification that as part of the program
description, the Tribe or State must contain all of the listed program
description elements and must demonstrate that its permit review
criteria are sufficient to carry out the permitting requirements of 40
CFR 233 subpart C has the same goal as the program revisions described
above of harmonizing the requirements for the program description with
the requirements for program operation, and facilitate EPA's ability to
ensure that Tribal and State permits will comply with the CWA 404(b)(1)
Guidelines.
Finally, EPA's proposal that the description of Tribal and State
agency coordination on program administration must address agency
coordination on enforcement and compliance would enable EPA to ensure
the Tribe or State is complying with the requirements of 40 CFR 233
subpart E, addressing enforcement and compliance requirements for
assumed programs.
c. Request for Comment
The Agency requests comment on all aspects of the proposed
revisions. The Agency specifically requests comment as to whether to
make clarifying revisions to other provisions in 40 CFR 233.11 to
ensure the Agency will be able to ensure a Tribe or State is equipped
to carry out the requirements of 40 CFR 233 subparts C through E. EPA
requests comment as to what additional types of information in section
233.11 Tribes or States must provide. EPA also requests examples of
particular metrics that Tribes and States could use to determine
funding and staff sufficiency, such as ratios of funding and staff to
expected permit applications, and whether to specify any such metrics
in regulation.
2. Retained Waters
a. What is the Agency proposing?
The Agency is proposing a procedure to facilitate determining the
extent of waters over which the Corps would retain administrative
authority following Tribal or State assumption of the section 404
program. Under the proposed procedure, before the Tribe or State
submits its assumption request to EPA, the Tribe or State must submit a
request to EPA that the Corps identify the subset of waters of the
United States that would remain subject to Corps section 404
administrative authority following assumption. EPA is proposing to
require that the Tribe or State submit specific additional information
that should accompany the request to show that the Tribe or State has
taken concrete and substantial steps toward program assumption. EPA is
proposing to require that one of the following be included with the
Tribe's or State's request that the Corps identify which waters would
be retained: a citation or copy of legislation authorizing funding

[[Page 55285]]

to prepare for assumption, a citation or copy of legislation
authorizing assumption, a Governor or Tribal leader directive, a letter
from a head of a Tribal or State agency, or a copy of a letter awarding
a grant or other funding allocated to investigate and pursue
assumption. Under this proposal, within seven days of receiving the
request for the retained waters description, EPA will review and
respond to the request. If the request includes the required
information, then EPA will transmit the request to the Corps.
If the Corps notifies the Tribe or State and EPA within 30 days of
receiving the request transmitted by EPA that it will provide the Tribe
or State with a retained waters description, the Corps would have 180
days from the receipt of the request transmitted by EPA to provide a
retained waters description to the Tribe or State. The purpose of the
180-day period would be to allow the Corps time and opportunity to
identify which waters the Corps will retain section 404 permitting
authority over. If the Corps does not notify the Tribe or State and EPA
within 30 days of receipt of the request that it intends to provide a
retained waters description, the Tribe or State would prepare a
retained waters description.
The Corps, Tribe, or State would start with the most recently
published list of RHA section 10 waters (see 33 CFR 329.16) as the
basis for the retained waters description. The Corps, Tribe, or State
would place waters of the United States, or reaches of these waters,
from the RHA section 10 list into the retained waters description if
they are known to be presently used or susceptible to use in their
natural condition or by reasonable improvement as a means to transport
interstate or foreign commerce. To the extent feasible and to the
extent that information is available, the Corps, Tribe, or State would
add other waters or reaches of waters to the retained waters
description that are presently used or are susceptible to use in their
natural condition or by reasonable improvement as a means to transport
interstate or foreign commerce. See 33 U.S.C. 1344(g)(1). The Corps,
Tribe, or State would not place RHA section 10 list waters in the
retained waters description if, for example, they were historically
used as a means to transport interstate or foreign commerce, and are no
longer susceptible to use as a means to transport interstate or foreign
commerce. The description would also acknowledge that wetlands are to
be retained if they are adjacent to Corps-retained waters. However, a
specific list of adjacent wetlands is not required to be included in
the retained waters description, because developing such a list would
generally be impracticable at the time of program assumption. Finally,
as recognized in EPA's existing regulations, in many cases, States lack
authority to regulate activities in Indian country. See 40 CFR
233.1(b). Thus, the Corps will continue to administer the program in
Indian country unless EPA determines that a State has authority to
regulate discharges into waters in Indian country. See id.
To clarify the extent of adjacent wetlands over which the Corps
retains administrative authority following Tribal or State assumption,
EPA proposes that the Corps retain administrative authority over all
jurisdictional wetlands ``adjacent'' to retained waters,\24\ except
that the geographic extent of the Corps' administrative authority would
be limited by an agreed-upon administrative boundary (e.g., a boundary
established based on a specific distance from the ordinary high water
mark for inland navigable waters or the mean high tide for coastal
areas, or a boundary that relies on physical features such as a bluff
line). The Corps would retain administrative authority over the
jurisdictional adjacent wetlands waterward of the administrative
boundary. The Tribe or State would assume administrative authority over
any other adjacent wetlands landward of the administrative boundary.
The administrative boundary between retained and assumed wetlands would
be set jointly by the Tribe or State and the Corps, but a 300-foot
administrative boundary would be established as a default if no other
boundary between retained and assumed adjacent wetlands is established.
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\24\ The agencies currently interpret the term ``adjacent''
consistent with the Supreme Court's decision in Sackett v. EPA, No.
21-454 (U.S. May 25, 2023).
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Some project proposals involving jurisdictional adjacent wetlands
that straddle the administrative boundary may involve a discharge into
the wetland on both sides of the administrative boundary. The
Memorandum of Agreement between the Tribe or State and the Corps must
articulate an approach for permitting projects involving such
discharges that may occur in the adjacent wetland on both sides of the
administrative boundary. Under any agreement, the Corps may not retain
waters other than those described in the CWA section 404(g)(1)
parenthetical.\25\ If the Corps and Tribe or State do not agree on an
alternative approach for permitting the projects which may cross the
administrative boundary in the Memorandum of Agreement, under the
default approach the Corps would issue a section 404 permit for the
discharges to jurisdictional adjacent wetlands or portions of
jurisdictional adjacent wetlands that are waterward of the
administrative boundary, and the Tribe or State would issue a section
404 permit for discharges to jurisdictional adjacent wetlands or
portions of jurisdictional adjacent wetlands that are landward of the
administrative boundary.
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\25\ Adjacent wetlands are included in the waters described in
the CWA 404(g)(1) parenthetical, and therefore the MOA can provide
that the Corps would retain the entirety of the adjacent wetlands
notwithstanding an administrative boundary when a project includes
discharges on both sides of the administrative boundary. In
contrast, when a permittee's activities include discharges into
those waters described in the CWA section 404(g)(1) parenthetical as
well as waters that must be assumed because they are not described
by the CWA section 404(g)(1) parenthetical, the retained waters
cannot be expanded to encompass those waters not described by the
CWA section 404(g)(1) parenthetical. This distinction in what waters
can be retained does not affect the authority of the Corps to permit
activities under 40 CFR 233.50(j).
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In addition, EPA proposes to revise the provision in the existing
regulations providing that modifications to the extent of the retained
waters description always constitute substantial revisions to a Tribal
or State program. Note, however, that under this proposal changes in
geographic scope of an approved Tribal CWA section 404 program are
substantial where the Tribe seeks to include additional reservation
areas within the scope of its approved program. EPA is also proposing
that the program description must specify that the Tribal or State
program will encompass all waters of the United States not retained by
the Corps at all times. Finally, EPA proposes to remove the term
``traditionally'' from the term `traditionally navigable waters' in the
following provision: ``[w]here a State permit program includes coverage
of those traditionally navigable waters in which only the Secretary may
issue 404 permits, the State is encouraged to establish in this MOA
procedures for joint processing of Federal and State permits, including
joint public notice and public hearings.'' 40 CFR 233.14(b)(2).
b. Why is the Agency proposing this approach?
Section 404(g) of the CWA authorizes Tribes and States to assume
authority to administer the section 404 program in some, but not all,
navigable waters within their jurisdiction. ``Navigable waters'' is
defined at CWA section

[[Page 55286]]

502(7) as ``waters of the United States, including the territorial
seas.'' \26\ The Corps retains administrative authority over a subset
of these waters even after program assumption by a Tribe or State.\27\
Specifically, section 404(g)(1) states that the Corps retains
administrative authority over the subset of waters of the United States
consisting of ``. . .waters which are presently used, or are
susceptible to use in their natural condition or by reasonable
improvement as a means to transport interstate or foreign commerce
shoreward to their ordinary high water mark . . . including wetlands
adjacent thereto.'' 33 U.S.C. 1344(g)(1). A Tribe or State assumes
section 404 administrative authority over all waters of the United
States within their jurisdiction that are not retained by the Corps.
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\26\ The permitting provisions of the CWA (as well as other
provisions), including CWA section 404, apply to ``navigable
waters.'' See 33 U.S.C. 1311(a). CWA section 502(7) in turn defines
``navigable waters'' as ``waters of the United States, including the
territorial seas.'' Id. section 1362(7).
\27\ When a Tribe or State assumes administrative authority for
the CWA section 404 program, it assumes authority to permit
discharges of dredged and fill material to all waters of the United
States within the meaning of CWA section 502(7) except for the
subset of waters of the United States over which the Corps retains
administrative authority. The scope of CWA jurisdiction is defined
by CWA section 502(7) as ``waters of the United States,'' therefore,
is distinct from and broader than the scope of waters over which the
Corps retains administrative authority following Tribal or State
assumption of the section 404 program. This proposal develops a
process for identifying the subset of waters of the United States
over which the Corps retains administrative authority following
approval of a Tribal or State section 404 program. It in no way
defines the broader set of waters of the United States within the
scope of the CWA as defined by CWA section 502(7) and has no bearing
on the scope of waters of the United States.
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EPA's existing regulations require that the program description
that is part of a Tribal or State assumption request include ``[a]
description of the waters of the United States within a State over
which the State assumes jurisdiction under the approved program; a
description of the waters of the United States within a State over
which the Secretary retains jurisdiction subsequent to program
approval; and a comparison of the State and Federal definitions of
wetlands.'' 40 CFR 233.11(h). In addition, the existing regulations
state that the Memorandum of Agreement between a Tribe or State and the
Corps required as part of the assumption request shall include a
description of the waters of the United States within the Tribe or
State for which the Corps will retain administrative authority. 40 CFR
233.14(b)(1).
Prior to this proposed rule, EPA had not provided specific guidance
on a process for identifying the subset of waters of the United States
over which the Corps would retain administrative authority following
Tribal or State assumption. Without a clear and practical process,
individual States and Corps districts have had to interpret the extent
of retained waters and the meaning of ``adjacent wetlands'' in the
context of case-by-case development of State program descriptions and
the Memoranda of Agreement that are negotiated between the Corps and
the State as part of a complete program submission. Tribes and States
have indicated that confusion about how best to identify the extent of
retained waters and adjacent wetlands has been a barrier to assumption
and have asked EPA to provide clarity.
As discussed in section IV.B of this preamble addressing
Background, EPA convened the Assumable Waters Subcommittee under the
auspices of the National Advisory Council for Environmental Policy and
Technology (NACEPT) to provide advice and recommendations as to how EPA
could best clarify the subset of waters of the United States over which
the Corps retains administrative CWA section 404 authority when a Tribe
or State assumes the section 404 program. NACEPT adopted the majority
recommendation in the Subcommittee report and incorporated it into its
recommendations provided to EPA in June 2017. Although at the time of
the Subcommittee report, the Corps presented a separate view from the
majority of the extent of retained waters and adjacent wetlands for
which it would retain administrative authority, the Department of the
Army subsequently sent a letter to the Corps supporting the majority
recommendation clarifying the extent of retained waters and adjacent
wetlands (though the letter did not define a specific administrative
boundary for adjacent wetlands).\28\ The Corps relied on this letter
when identifying waters to be retained when Florida assumed the section
404 program in December 2020. NACEPT's recommendations, based on the
Subcommittee majority recommendation that was subsequently endorsed by
the Corps, are discussed below.
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\28\ R.D. James, Memorandum for Commanding General, U.S. Army
Corps of Engineers: Clean Water Act Section 404(g)--Non-Assumable
Waters (July 30, 2018). The memorandum states that it ``. . . is not
intended to address future decisions to be made by EPA under
Sections 404(g) or 404(h).'' Id. at 3.
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i. Retained Waters
(1) Subcommittee's Recommendation
The Subcommittee majority recommended that for purposes of
identifying the subset of waters of the United States over which the
Corps would retain administrative authority following Tribal or State
assumption of the CWA section 404 program, existing RHA section 10
lists \29\ be used ``with two minor modifications: any waters that are
on the Section 10 lists based solely on historic use (e.g., based
solely on historic fur trading) are not to be retained (based on the
Congressional record and statute), and waters that are assumable by a
tribe (as defined in the report) may also be retained by the USACE when
a state assumes the program.'' Final Report of the Assumable Waters
Subcommittee at v.\30\ The Subcommittee also recognized that ``waters
may be added to Section 10 lists after a state or tribe assumes the
program, and recommends in that case, such waters may also be added to
lists of USACE-retained waters at that time.'' Id. The majority
recommendation was based on its analysis of the legislative history of
section 404(g), which is discussed in section IV.A.3 of this preamble,
addressing Background, in which the majority concluded that Congress
intended that the Corps retain permitting authority over some RHA
section 10 waters. See id. at 55-61 (Appendix F.) It was also based on
an assessment of an approach that would be clear and easy to implement.
See id. at 17-20.
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\29\ The RHA section 10 lists are compiled and maintained by the
Corps district offices for every State except Hawaii. 33 CFR 329.14
describes the process the Corps follows to make navigability
determinations.
\30\ Available at <a href="https://www.epa.gov/sites/default/files/2017-06/documents/awsubcommitteefinalreprort_05-2017_tag508_05312017_508.pdf">https://www.epa.gov/sites/default/files/2017-06/documents/awsubcommitteefinalreprort_05-2017_tag508_05312017_508.pdf</a>.
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With regard to Tribal considerations during assumption of the
section 404 program, the Subcommittee found that ``Section 518 of the
CWA, enacted as part of the 1987 amendments to the statute, authorizes
the EPA to treat eligible Indian tribes in a manner similar to states
(``treatment as a State'' or TAS) for a variety of purposes, including
administering each of the principal CWA regulatory programs [including
CWA section 404] and receiving grants under several CWA authorities (81
FR 30183, May 16, 2016).'' Id. at 3. The Subcommittee majority
recommended that ``Tribal governments pursuing assumption of the 404
program will follow the same process as states, though it is expected

[[Page 55287]]

that there will be some nuanced differences; for example, in addressing
Tribal Indian Reservation boundaries'' and that ``[i]n a state-assumed
program, states will generally not assume authority for administering
the 404 program within Indian country; instead, such authority will
generally be retained by the USACE unless the tribe itself is approved
by the EPA to assume the 404 program.'' Id. The Subcommittee majority
found that ``[b]ecause Tribal Indian Reservation boundaries are not
static and precise definitions and considerations vary from state to
state, it is essential that waters to be retained by the USACE on
tribal lands be specifically addressed in any MOA developed between the
USACE and a state assuming the program.'' Id.
The Subcommittee majority noted that its recommended approach is
consistent with ``the plain language of Section 404(g) and the
legislative history. Congress clearly intended that states and tribes
should play a significant role in the administration of Section 404--as
they do in other CWA programs--anticipating that many states would
assume the Section 404 program.'' See id. at 19.
(2) EPA's Proposal
Taking into consideration the majority recommendation of the
Subcommittee, EPA proposes that, taking current RHA section 10 list(s)
as a starting point, the following steps would be taken to identify the
subset of waters of the United States over which the Corps would retain
administrative authority and develop the retained waters description:

--Place waters of the United States, or reaches of those waters, from
the RHA section 10 list(s) into the retained waters description if they
are known to be presently used or susceptible to use in their natural
condition or by reasonable improvement as a means to transport
interstate or foreign commerce;
--Add any other waters known by the Corps or the Tribe or State to be
presently used or susceptible to use in their natural condition or by
reasonable improvement as a means to transport interstate or foreign
commerce, including all waters which are subject to the ebb and flow of
the tide;
--Add a description of wetlands that are adjacent to the foregoing
waters consistent with the administrative boundary articulated in the
Tribal-Corps or State-Corps Memorandum of Agreement (see section
V.A.2.b.ii of this preamble on adjacent wetlands).

EPA recognizes that the available RHA section 10 lists may not
cover all RHA section 10 waters in the Tribe's or State's jurisdiction
and that they may not be updated to reflect current use and
characteristics of listed waters. In addition, the Corps or assuming
Tribes or States may not know all waters that are presently used or
susceptible to use in their natural condition or by reasonable
improvement as a means to transport interstate or foreign commerce at
the time of assumption. However, requiring a comprehensive assessment
of every water within the Tribe's or State's jurisdiction at the time
of assumption to determine if it should be retained pursuant to the
parenthetical in section 404(g)(1) could pose significant practical and
budgetary challenges depending on the number of waters within the
Tribe's or State's jurisdiction, potentially taking many years to
complete the retained waters description. Therefore, EPA is proposing
that the retained waters description encompass waters ``known'' by the
Corps, Tribe, or State to meet these criteria. EPA's proposed
regulation allows for this description and the Memorandum of Agreement
between the Corps and Tribe or State to be modified if additional
waters are identified after assumption, or if waters included in the
description no longer meet the criteria. EPA is confident that
geographic information systems technology and navigation charts, as
well as other approaches, should enable the Corps, Tribe, or State to
take significant steps in identifying waters in the Tribe's or State's
jurisdiction that should be included in the retained waters
description.
For the purposes of CWA section 404(g)(1), determining which waters
are presently used or susceptible to use in their natural condition or
by reasonable improvement as a means to transport interstate or foreign
commerce is, to some extent, inherently a case-specific process. While
determining whether a water is retained does not require compliance
with the requirements for determining whether a water is subject to RHA
section 10, and does not necessarily require a navigability study, the
factors used to determine RHA section 10 jurisdiction may still be
relevant to determining whether a water should be retained. As noted
earlier, however, there are key distinctions between RHA section 10
waters and the scope of retained waters, including that Corps-retained
waters do not include waters that are only used historically for the
transport of interstate or foreign commerce but do include adjacent
wetlands and, when a State is assuming the program, waters subject to
Tribal authority.
As recognized in EPA's existing regulations, in many cases, States
lack authority under the CWA to regulate activities covered by the
section 404 program in Indian country. See 40 CFR 233.1(b). Thus, the
Corps will continue to administer the program in Indian country unless
EPA determines that a State has authority to regulate discharges into
waters in Indian country and approves the State to assume the section
404 program over such discharges. See id. EPA proposes that the
Memorandum of Agreement between the Corps and State address any waters
in Indian Country which are to be retained by the Corps upon program
assumption by a State. EPA also notes that the Corps would retain
jurisdiction over waters located in lands of exclusive Federal
jurisdiction (e.g., some national parks, such as certain areas of the
Denali National Park).
EPA's proposed process, similar to the one described by the
Subcommittee majority, is clear and practical, is based on available
and relatively stable and predictable information, and is able to be
implemented efficiently at the time a Tribe or State seeks assumption.
The process provides for clarity that will facilitate consistent and
effective operation of an assumed section 404 program. It is also
consistent with the text and history of section 404(g), which reflects
Congress' intent that the Corps generally retain permitting authority
over certain RHA section 10 waters. See section IV.A.3 of this
preamble, addressing Background. Since the proposed approach does not
conflict with the approved extent of the Michigan, New Jersey, and
Florida programs, no changes to their existing program scope would be
required.
The Subcommittee majority recommended that identification of the
subset of waters of the United States over which the Corps would retain
administrative authority be a collaborative process. EPA anticipates
that, when a Tribe or State seeks assumption, the Tribe or State, the
Corps, and EPA will engage collaboratively throughout the development
of this description, regardless of whether the Corps chooses to provide
a retained waters list to the Tribe or State during the initial
proposed 180-day period. EPA's participation in these discussions could
help ensure consideration of CWA requirements and related issues (e.g.,
Tribal waters). The Subcommittee majority recommended that EPA and the
Corps establish a clear dispute

[[Page 55288]]

resolution procedure to be followed if the Tribe or State and the Corps
were not able to complete the retained waters description. Because EPA
believes that the proposed approach lays out a clear process for
establishing the description, EPA is not proposing to specify such a
dispute resolution procedure by regulation. See section V.F.1 of this
preamble, addressing Dispute Resolution. EPA encourages Tribes and
States seeking to assume the section 404 program to work
collaboratively with the Corps and EPA to resolve any issues.
While EPA anticipates that development of the retained waters
description would involve collaboration between the Corps and the Tribe
or State, the Corps remains the agency with sole responsibility for
maintaining and modifying any RHA section 10 list. The Subcommittee
majority recognized that there will be circumstances under which the
Corps may add waters to section 10 lists after a Tribe or State assumes
the program. The Subcommittee majority recommended that in that case,
such waters may, if consistent with CWA section 404(g)(1), be added to
lists of Corps-retained waters at that time. As is clear from the
process described above and proposed in this rulemaking, a RHA section
10 list will not necessarily be co-extensive with the subset of waters
of the United States over which the Corps would retain administrative
authority (i.e., retained waters description) following Tribal or State
assumption of the CWA section 404 program.
In light of the requests by Tribes and States for clarity and early
input from the Tribes and States on this rulemaking, EPA is proposing
changes to the existing regulation, similar to the Subcommittee
majority opinion's recommendation, that would establish a clear
regulatory process with defined timelines for a Tribe or State to
identify retained waters, either by obtaining a list from the Corps or
developing the list consistent with the proposed process. Specifically,
EPA is proposing to specify that before a Tribe or State provides an
assumption request submission to EPA, the Tribal leader, State
Governor, or Tribal or State Director must submit a request to EPA that
the Corps identify the subset of waters of the United States over which
the Corps would retain administrative authority.\31\ In an effort to
balance the Tribe's or State's need to know the extent of waters it
could assume with the Corps' permitting workload, EPA is proposing to
require that the Tribe or State submit the request with specific
additional information that should accompany the request to show that
the Tribe or State has taken concrete and substantial steps toward
program assumption. EPA is proposing to require that one of the
following be included with the Tribe's or State's request that the
Corps identify which waters would be retained: a citation or copy of
legislation authorizing funding to prepare for assumption, a citation
or copy of legislation authorizing assumption, a Governor or Tribal
leader directive, a letter from a head of a Tribal or State agency, or
a copy of a letter awarding a grant or other funding allocated to
investigate and pursue assumption. Under this proposal, within seven
days of receiving the request for the retained waters description, EPA
will review and respond to the request. If the request includes the
required information, then EPA will transmit the request to the Corps.
This proposed requirement is intended to provide assurance to the Corps
that developing a retained waters description for purposes of program
assumption is a worthwhile expenditure of its time and resources.
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\31\ EPA recognizes that in some cases, a Tribe's or State's
boundaries may overlap with multiple Corps districts. Based on the
Agency's experience with States pursuing assumption of a section 404
program, the Corps may designate a ``lead district'' to coordinate
with the State. If the Corps designates a lead district, the Tribe
or State would not need to request a retained waters description
from all relevant Corps districts, but rather could coordinate
directly with the lead district.
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If the Corps notifies the Tribe or State and EPA within 30 days of
receipt of the request transmitted by EPA that it intends to provide a
retained waters description, the Corps would have 180 days from the
receipt of the request transmitted by EPA to develop the description.
During the 180-day period the Corps would be able to review the current
RHA section 10 list(s); place waters of the United States or reaches of
those waters from the RHA section 10 list into the retained waters
description if they are known by the Corps or the Tribe or State to be
presently used or susceptible to use in their natural condition or by
reasonable improvement as a means to transport interstate or foreign
commerce; and to the extent feasible and to the extent that information
is available, add other waters or reaches of waters to the retained
waters description that are presently used or are susceptible to use in
their natural condition or by reasonable improvement as a means to
transport interstate or foreign commerce. As discussed below, the
description would also acknowledge that wetlands are to be retained if
they are adjacent to Corps-retained waters pursuant to the proposed
regulations at 40 CFR 233.11(i)(3) and (i)(5). However, a specific list
of adjacent wetlands is not required to be included in the retained
waters description, because developing such a list would generally be
impracticable at the time of program assumption. The Tribe or State may
provide information to the Corps during the 180-day period to aid in
the Corps' development of the retained waters description.
If the Corps does not notify the Tribe or State and EPA within 30
days of receipt of the request transmitted by EPA that it intends to
provide a retained waters description, the Tribe or State would prepare
a retained waters description using the same approach outlined above
for the Corps. Similarly, if the Corps had originally indicated that it
would provide a retained waters description but does not provide one
within 180 days, the Tribe or State may develop the retained waters
description using the same approach described above. In general, the
retained waters description should provide as much clarity as possible
to maximize transparency for members of the public and the regulated
community. Because the Agency's proposed approach, consistent with the
Subcommittee majority's recommendation, effectuates the language and
history of section 404(g) and achieves Congress' goal of providing an
implementable approach for assumption, the Regional Administrator may
presume that a retained waters description that uses this approach
satisfies the statutory criteria for retained waters.
Even if the Corps does not provide a retained waters description to
the Tribe or State, it may provide relevant information to the Tribe or
State at any time during the Tribe's or State's development of the
retained waters description. In addition, the Corps would have two
formal opportunities to review the list of retained waters that is
produced by the Tribe or State. First, the Memorandum of Agreement
between the Corps and the Tribe or State includes a description of
retained waters, and thus the Corps would have the opportunity to
review the description of retained waters during the drafting process
for that memorandum, and before signing that memorandum. Second, the
Corps would have the opportunity to review and provide comments on the
Tribe's or State's program submission materials, which includes the
description of retained waters, after the Tribe or State submits a
program request to EPA. Similarly, if the Corps provides a retained
waters description to the Tribe

[[Page 55289]]

or State, the Tribe or State may still review to ensure that the
retained waters description reflects waters presently used or
susceptible to use in their natural condition or by reasonable
improvement as a means to transport interstate or foreign commerce,
including all waters which are subject to the ebb and flow of the tide,
as well as wetlands that are adjacent to the foregoing waters, to the
extent feasible and to the extent that scope of waters is known. The
public also has the opportunity to provide comment on the retained
waters description when reviewing the Tribe's or State's program
submission. To the extent the Tribe or State provide opportunities for
public engagement as they develop their program submission, members of
the public may be able to provide input during the development of the
retained waters description.
ii. Adjacent Wetlands
(1) Subcommittee Recommendation
The Subcommittee majority recommended that the Corps retain
administrative authority over all wetlands adjacent to retained waters
landward to an administrative boundary agreed upon by the Tribe or
State and the Corps. This boundary would pertain only to retained
adjacent wetlands and not other waters of the United States to be
assumed by the Tribe or State. This boundary, the recommendation added,
``could be negotiated at the state or tribal level to take into account
existing state regulations or natural features that would increase
practicability or public understanding; if no change were negotiated, a
300-foot national administrative default line would be used.'' Final
Report of the Assumable Waters Subcommittee at vi. The Subcommittee
majority opinion noted that ``large wetland complexes can extend tens
or even hundreds of miles'' from the retained water in ``intricate and
snakelike networks, which could result in a confusing pattern of USACE
and state or tribal permitting authority across the landscape. For
example, the St. Louis River (a tributary to Lake Superior) forms some
of the boundaries of the Fond du Lac Indian Reservation in Minnesota
where wetlands comprise 44% of the Reservation.'' Id. at 31. The report
further explained that ``[w]etlands adjacent to the St. Louis River . .
. are interconnected with other wetlands that extend tens of miles away
from the river, well beyond other wetlands that are not connected or
adjacent to the river.'' Id. The majority opinion also stated that some
Tribes and States have already established various boundaries, lines,
or demarcations in their Tribal or State programs for reasons such as
protection of water quality or flood setbacks. These established lines,
the majority opinion suggested, could be used to establish the
administrative boundary between retained and assumable waters. Id.
(2) EPA's Proposal
In light of the request by Tribes and States for clarity, EPA is
proposing changes to the existing regulation that are similar to the
Subcommittee majority opinion's recommendation. EPA's proposal would
allow Tribes or States to work with the Corps to establish a clear and
reliable administrative boundary that demarks the permitting authority
for adjacent wetlands. The boundary would be easily understood and
implementable in the field, would facilitate coordination between the
Tribe or State and the Corps, and would enable informed public comment
during the assumption process and permit review. EPA is proposing that
the Corps retain administrative authority over all jurisdictional
wetlands adjacent to retained waters, except that, for purposes of
administrative convenience, the geographic scope of the Corps'
administrative authority would be limited by an agreed-upon
administrative boundary. The Corps would retain administrative
authority for purposes of section 404 permitting only over the adjacent
wetlands waterward of the administrative boundary. The Tribe or State
would assume section 404 permitting authority over any adjacent
wetlands landward of the administrative boundary. This boundary would
be negotiated between the Corps and the Tribe or State and take into
account existing Tribal or State regulations or natural features that
would facilitate implementation and clarity. This proposed provision is
consistent with the Subcommittee majority opinion recommendation
subsequently endorsed by the Army. This proposed administrative
boundary does not modify or in any way affect the interpretation of the
scope of those wetlands that are ``adjacent'' for purposes of the
definition of waters of the United States, but rather simply draws a
line through them for the sole purpose of maximizing clarity as to the
relevant permitting authority for these waters of the United States and
thus facilitating the administration and implementability of approved
Tribal and State programs.
EPA is proposing that the administrative boundary between retained
and assumed wetlands be set jointly by the Tribe or State and the Corps
and that a 300-foot administrative boundary from the ordinary high
water mark, mean high water mark, or mean higher high water mark on the
west coast, of the retained water be set as a default when no other
boundary between retained and assumed wetlands is established.
As the majority opinion in the Subcommittee report stated, ``[t]he
establishment of a national administrative boundary to assign
regulatory responsibility over adjacent wetlands should build on USACE
authorities under the RHA. The RHA was enacted primarily to protect
navigation and the navigable capacity of the nation's waters.'' Final
Report of the Assumable Waters Subcommittee at 25-26. Section 10 of the
RHA requires authorization from the Secretary of the Army, acting
through the Corps, for the construction of any structure in or over any
``navigable water of the United States.'' Section 14 of the RHA
provides that the Secretary of the Army, on the recommendation of the
Chief of Engineers, may grant permission for the temporary occupation
or use of any sea wall, bulkhead, jetty, dike, levee, wharf, pier or
other work built by the United States. 33 U.S.C. 408. The Corps will
always retain RHA section 10 and 14 permitting authorities in all
waters subject to the RHA; it is the administrative authority to issue
CWA section 404 permits in these waters which the Corps would not
retain when a Tribe or State assumes the program.
Establishing that the Corps retains jurisdictional adjacent
wetlands up to an agreed upon administrative boundary, with a default
boundary of a 300-foot distance from retained waters, would preserve
the Corps' authority over waters and wetlands to the extent necessary
to allow the Corps to address activities that may adversely impact
navigability, while ensuring certainty for the extent of waters assumed
by the Tribal or State program and clarity for the regulated community.
The sole purpose of the 300-foot default boundary is to facilitate
efficient program administration, when an administrative boundary is
not otherwise established. Requiring a clear boundary between
permitting authorities is well within EPA's authority to help ensure
that the Tribe or State permitting program can function smoothly and
effectively, and to maximize transparency for the regulated community
and others as to the relevant permitting authority. See generally 33
U.S.C. 1361(a); 1344(g)-(h). The Tribe or State and the Corps may
decide that existing State-established

[[Page 55290]]

setbacks, buffers, a defined elevation (as in the case of New Jersey),
other characteristics, or even the full extent of the adjacent wetlands
should form the basis for the boundary, or they may use 300 feet as the
default administrative boundary.
The Subcommittee majority found that ``[r]iparian buffers and
setbacks are established by many states to, among other purposes, help
store floodwaters and prevent sediment transport, directly supporting
and preserving navigation. Thus, such state-established boundaries can
provide both a practical and a logical basis for the establishment of a
national administrative boundary between wetlands retained by the USACE
and wetlands assumed by a state or tribe.'' Final Report of the
Assumable Waters Subcommittee at 26. To the extent discharges into
assumed waters may affect navigability, Federal review and oversight of
permits issued by a Tribe or State under an approved section 404
program can address any such impacts. The statute and existing
regulations provide that the Tribe or State shall not issue a permit if
the Secretary determines that anchorage and navigation of the navigable
waters would be substantially impaired. 33 U.S.C. 1344(h)(1)(F), 40 CFR
233.20(d); see also 40 CFR 233.50 (addressing Federal oversight of
Tribe- or State-issued permits).
The proposed default administrative boundary would allow Tribes and
States to adapt the section 404 program to the Tribe's or State's
natural conditions and provide additional flexibility and efficiency by
simplifying the process of identifying retained waters prior to
assumption. EPA agrees with the Subcommittee majority's conclusion that
a 300-foot administrative boundary, or comparable demarcation between
the Tribe's or State's and the Corps' permitting authority, would
provide clarity and avoid ``confusion or unnecessary duplication, while
preserving the USACE's responsibility to protect and maintain
navigation under the RHA as required by Congress.'' Final Report of the
Assumable Waters Subcommittee at 26. The Subcommittee majority
concluded that ``[s]ince the boundary defines the landward extent of
the adjacent wetlands retained by the USACE, it eliminates the need to
determine the extent and connectivity of large wetland systems to
allocate administrative authority between the USACE and a state or
tribe.'' Id. EPA agrees with the Subcommittee majority's conclusion
that a 300-foot default boundary is reasonable, especially since the
Corps still has the opportunity to provide comment on Tribe- or State-
issued permits and retains permitting authority pursuant to RHA
sections 10 and 14 for all Tribal or State assumed waters subject to
those provisions.
EPA recognizes that some project proposals that straddle the
administrative boundary may involve a discharge into the waters on both
sides of the administrative boundary. The extent of impacts associated
with projects that straddle the boundary could be minimal or extensive,
as in the case of linear projects or housing developments. In order to
respond to the interests of Tribes and States in facilitating the
assumption process, reducing costs, and increasing the consistency and
efficiency of assumed programs, EPA is recommending that a process for
determining the allocation of permitting authority in this situation be
addressed in the program description and the Memorandum of Agreement
between the Tribe or State and the Corps, to allow for regional
differences and to best meet the conditions of individual Tribes and
States. In developing the Memorandum of Agreement, the Tribe or State
and the Corps should consider and memorialize permitting approaches for
various project types where the project proposal may involve discharges
on both sides of the administrative boundary.
EPA also recognizes that the Corps, Tribes, and States would
benefit from additional clarity as to how project proposals that cross
the administrative boundary should be permitted, absent an alternative
approach being developed by the Corps and the Tribe or State. Under the
default approach in this proposed rule, the Corps shall issue a section
404 permit for the discharges to jurisdictional adjacent wetlands or
portions of such wetlands that are waterward of the administrative
boundary. The Tribe or State shall issue a section 404 permit for
discharges to jurisdictional adjacent wetlands or portions of such
wetlands that are landward of the administrative boundary. Note that
EPA is not suggesting that, when a proposed project crosses the
administrative boundary, each individual discharge should be permitted
separately. Such an approach would be inconsistent with the existing
regulatory requirement that ``[a]ll activities which the applicant
plans to undertake which are reasonably related to the same project
should be included in the same permit application.'' 40 CFR
233.30(b)(5). Rather, the default in the proposed rule is that the
Corps and Tribe or State shall each permit all discharges to adjacent
wetlands related to a proposed project on their respective sides of the
administrative boundary. In such cases, EPA recommends that the Corps
and the Tribe or State coordinate on permitting activities such as
public notices and joint public hearings to the extent feasible to
facilitate assessment of cumulative impacts.
The approved Michigan, New Jersey, and Florida CWA section 404
programs are also consistent with the proposed approach. EPA briefly
summarizes the approaches taken by these States to provide examples of
possible approaches that are consistent with the proposed rule. In the
Memorandum of Agreement between New Jersey and the Corps, the Corps
retained regulatory authority over those wetlands that are: ``. . .
partially or entirely located within 1000 feet of the ordinary high
water mark or mean high tide of the Delaware River, Greenwood Lake, and
all water bodies which are subject to the ebb and flow of the tide.''
Memorandum of Agreement between the State of New Jersey and the
Department of the Army at 2 (March 4, 1993). State-administered waters
in turn are generally determined by superimposing head of tide data on
the State's freshwater wetlands quarter quadrangles that are at a scale
of one-inch equals 1000 feet. A line was established parallel to and
1000 feet from the ordinary high-water mark or mean high tide of the
waters described above. The Corps retains permitting authority over all
wetlands that are waterward of, or intersected by, the administrative
boundary described above. Because New Jersey regulates all wetlands and
other waters under the same statute, it rarely must determine whether a
wetland is assumable or non-assumable for purposes of a State
permit.\32\
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\32\ For further information, see the Memorandum of Agreement
between the Corps and the New Jersey Department of Environmental
Protection and Energy, signed by the Division Engineer on March 4,
1993.
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In Michigan, the extent of adjacent wetlands over which the Corps
retains authority generally includes wetlands within the influence of
the ordinary high water mark of retained waters. The State and the
Corps coordinate permitting of projects that involve discharges into
both assumed and retained waters to ensure the permit requirements do
not conflict.\33\
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\33\ For further information, see the Memorandum of Agreement
between the Corps and the Michigan Department of Natural Resources,
signed by the Commander, North Central Division, on March 27, 1984.
---------------------------------------------------------------------------

In Florida, the Corps retains responsibility for waters that are
identified in the retained waters

[[Page 55291]]

description, as well as all waters subject to the ebb and flow of the
tide shoreward to their mean high water mark that are not specifically
listed in the retained waters description, including wetlands adjacent
thereto landward to an administrative boundary. The Memorandum of
Agreement defines the administrative boundary as 300 feet from the
ordinary high water mark or mean high tide line of the retained water.
The Memorandum of Agreement also contains protocols for addressing
projects that involve discharges of dredged or fill material both
waterward and landward of the 300-foot boundary. The Corps provided
geographic information system (GIS) layers that reflect the extent of
retained waters and updates them as necessary. The Memorandum of
Agreement states that the GIS layers are a tool, but not the final
determining factor regarding who is the permitting authority for any
particular waterbody. The Memorandum of Agreement also states that the
Corps shall retain responsibility for waters of the United States
within ``Indian country,'' as that term is defined at 18 U.S.C.
1151.\34\
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\34\ For further information, see the Memorandum of Agreement
between the Corps and the Michigan Department of Natural Resources,
signed by the Assistant Secretary of the Army (Civil Works), on
August 5, 2020.
---------------------------------------------------------------------------

iii. Modifying the Extent of Retained Waters
EPA proposes to revise the provision in the existing regulations
that currently states that modifications that affect the area of
jurisdiction always constitute substantial revisions to a Tribal or
State program. The existing regulations provide that EPA may approve
non-substantial revisions by letter, but require additional procedures,
including public notice, inter-agency consultation, and Federal
Register publication, of substantial revisions. 40 CFR 233.16(d)(2)-
(4). Changes to the area of jurisdiction could include changes to the
retained waters description. Such changes may sometimes have limited
scope and impact and therefore may be non-substantial. As described
above, this proposal would clarify that the retained waters description
looks initially to those waters on existing RHA section 10 lists. As
such, the process set forth in proposed 40 CFR 233.11(i)(3) should be
followed to identify whether changes to the RHA section 10 list warrant
changes to the retained waters description for a given Tribal or State
section 404 program.
EPA recognizes that changes to RHA section 10 lists do not always
warrant changes to the retained waters description, or only warrant
minimal changes. For example, if the Corps adds to its RHA section 10
list a water which was historically used in interstate or foreign
commerce but is no longer used or susceptible to use for that purpose,
that water would not be added to the retained waters description. As
another example, if the Corps made a relatively minor adjustment to the
head of navigation for a RHA section 10 listed water, the new extent to
which this water is retained would be shown on a revised retained
waters list but may be considered as a non-substantial change in the
retained waters description.
However, if a large water or a significant number of waters are
proposed to be added to or removed from the retained waters
description, that change could be a substantial revision to the Tribal
or State program. Under the proposal, EPA would have discretion to
determine whether changes to the area of jurisdiction, which includes
the extent of retained waters, are substantial or non-substantial and
approve the modification to the retained waters description and extent
of the Tribal or State program consistent with the procedures in 40 CFR
233.16.
Note, however, that EPA is proposing to clarify that changes in
geographic scope of an approved Tribal CWA section 404 program that
would add reservation areas to the scope of its approved program are
substantial program revisions. Where a Tribe seeks to include
additional reservation areas within the scope of its approved program,
the Regional Administrator must determine that the Tribe meets the TAS
eligibility criteria for the additional areas and waters. The
substantial modification process involves circulating notice to ``those
persons known to be interested in such matters.'' 40 CFR 233.16(d)(3).
In the case of a change in geographic scope of a Tribal program, known
interested persons would typically include representatives of Tribes,
States, and other Federal entities located contiguous to the
reservation of the Tribe which is applying for TAS. See, e.g.,
Amendments to the Water Quality Standards Regulation That Pertain to
Standards on Indian Reservations, 56 FR 64876, 64884 (December 12,
1991). This clarification is necessary because as discussed above, the
Agency proposes to clarify that revisions that affect the area of
jurisdiction are not always substantial. However, revising a Tribal
program to add new reservation land and waters of the United States on
that land is substantial because it requires a determination that the
Tribe meets the TAS eligibility criteria for such areas, pursuant to 40
CFR part 233, subpart G.
EPA is further proposing to amend the procedures associated with
approval of program revisions to require EPA to notify the Corps of all
approvals of program modifications whether they are substantial or non-
substantial. EPA is also requiring that other Federal agencies be
notified of these program modification approvals as appropriate.
iv. Additional Clarifications
EPA also proposes to clarify that in the program description of an
assumption request, the description of waters of the United States
assumed by the Tribe or State must encompass all waters of the United
States not retained by the Corps. All discharges of dredged or fill
material into waters of the United States must be regulated either by
the Tribe or State or the Corps; at no time can there be a gap in
permitting authority for any water of the United States. See discussion
of this principle in section V.E.1 of this preamble.
Finally, EPA proposes to remove the term ``traditionally'' from the
term ``traditionally navigable waters'' in the following provision:
``Where a State permit program includes coverage of those traditionally
navigable waters in which only the Secretary may issue 404 permits, the
State is encouraged to establish in this MOA procedures for joint
processing of Federal and State permits, including joint public notices
and public hearings.'' 40 CFR 233.14(b)(2). EPA proposes to remove the
term ``traditionally'' to align the reference to retained waters with
the rest of the preamble and regulations, which refer to retained
waters using the statutory language in the section 404(g)
parenthetical, and do not refer to retained waters as ``traditionally''
or ``traditional navigable waters.'' ``Traditional navigable waters''
are defined in the definition of waters of the United States, and are
not addressed by this proposed rule. See 40 CFR 120.2(a)(1)(i).
c. Request for Comment
EPA solicits comments on all aspects of the proposal laid out
above. EPA solicits comment on whether the term ``retained waters
description'' should be used when referring to how retained waters are
identified in a Tribal or State program description or if the term
``retained waters list'' or some other term should be used instead and
why such term is preferable over ``retained waters description.''
With respect to determinations of the extent of retained waters,
EPA solicits comment on the appropriate

[[Page 55292]]

information that the letter from the Tribal leader, Governor, or Tribal
or State Director should provide to demonstrate the Tribe's or State's
commitment to pursuing assumption, including whether the Tribe or State
should submit additional documentation or evidence of that commitment.
EPA also solicits comment on whether the regulation should specify a
time period for EPA review of the request for the retained waters
description, and the length of that time period. The proposal currently
provides EPA with 7 days to review and respond to the request for the
retained waters description, but EPA solicits comment on alternative
time periods such as 14 days. EPA solicits comment on alternative time
periods that the Tribe or State must provide the Corps to prepare the
description of retained waters, such as 90 days, 120 days, 150 days, or
270 days. The Agency also solicits comment on alternative periods of
time within which the Corps may inform the Tribe or State whether it
intends to prepare the description of retained waters. EPA solicits
comment regarding ways to further shorten or simplify the process for
determining the extent of retained waters. Additionally, the Agency
solicits comment on whether the regulatory text should include a
provision that allows for an extension to the default time period for
the Corps to prepare the description of retained waters, contingent on
mutual agreement from the Corps and the Tribe or State.
The Agency solicits comment on how to increase transparency for the
public regarding the development of the retained waters description.
For example, EPA solicits comment on an approach whereby when the Tribe
or State submits its request to the Corps to develop a retained waters
description, the Tribe or State must publish public notice of that
request, in an effort to increase transparency and maximize
opportunities for public input. The Agency also solicits comment on
alternative ways to increase opportunities for public participation in
the development of the description, in addition to the existing
opportunity for public comment after the Tribe or State submits a
program request to EPA for approval.
The Agency solicits comment on all aspects of the proposed approach
to determining the extent of retained adjacent wetlands as well as
alternative approaches, including whether the 300-foot administrative
default should be codified in regulatory text, whether another default,
such as 500 feet or 1,000 feet, should be recommended or codified,
whether an administrative boundary should be an optional recommendation
rather than a requirement, and any alternative approaches to
establishing a boundary and to determining which ``adjacent wetlands''
are retained by the Corps.
The Agency also solicits comment on all aspects of the proposed
approach to modifying the extent of retained waters, including whether
these modifications should be substantial or non-substantial and
whether to modify or specify any other procedures, including public
notifications, for such modifications. EPA specifically solicits
comment on its proposal to remove the specification that changes to the
area of jurisdiction, which includes the retained waters description,
are always substantial changes to approved Tribal or State programs.
EPA requests comment on alternative approaches, including whether to
instead provide that reductions in the scope of Federal jurisdiction,
such as the removal of waters from the retained waters description, are
always substantial program revisions.
EPA solicits comment as to whether to require the program
description and the Memorandum of Agreement between the Tribe or State
and the Corps to specifically address the process for permitting
projects that may involve discharges both waterward and landward of the
administrative boundary. EPA also solicits comment on the proposed
default permitting approach for projects that would lead to discharges
to jurisdictional adjacent wetlands crossing the administrative
boundary.
EPA requests comment on specific ways EPA could be involved in
resolving any disagreements regarding the extent of retained waters,
and whether the regulations should provide a specific procedure through
which EPA could provide input on the retained waters description while
it is being developed. Note that EPA already has the opportunity to
provide input upon review of the Tribal or State program submission, as
well as when changes are proposed to an approved retained waters
description. Finally, the Agency solicits comment as to whether to
require that the retained waters description should be revisited at
certain intervals, such as annually, biennially, or triennially, to
allow for any necessary modifications, or if any such review should be
handled in the Memoranda of Agreement between EPA and the Tribe or
State or between the Corps and the Tribe or State.
3. Mitigation
a. What is the Agency proposing?
EPA is proposing to require that the program description that
Tribes or States submit to EPA when seeking to assume the section 404
program include a description of the Tribe's or State's proposed
approach to ensuring that all permits issued by the Tribe or State will
apply and ensure compliance with the substantive criteria for
compensatory mitigation consistent with the requirements of subpart J
of the CWA 404(b)(1) Guidelines at 40 CFR part 230. The provision would
clarify that the Tribe's or State's approach may deviate from the
specific requirements of subpart J to the extent necessary to reflect
Tribal or State administration of the program as opposed to Corps
administration, but may not be less stringent than the substantive
criteria of subpart J. For example, a Tribal or State program may
choose to provide for mitigation in the form of banks and permittee
responsible compensatory mitigation but not establish an in-lieu fee
program. EPA is proposing that if the Tribe or State establishes third
party compensation mechanisms as part of their section 404 program
(e.g., banks or in-lieu-fee programs), instruments associated with
these compensatory mitigation approaches must be sent to EPA, the
Corps, the U.S. Fish and Wildlife Service, and the National Marine
Fisheries Service for review prior to approving the instrument, as well
as to any Tribal or State resource agencies to which the Tribe or State
committed to send draft instruments in the program description. Note
that this requirement does not include permittee-responsible mitigation
instruments as those would be reviewed as part of the permit
conditions. Tribes and States may also send draft instruments to other
relevant Tribal or State resource agencies for review. The proposed
rule provides a time frame for receiving comments from the reviewing
agencies. In the event that the Regional Administrator has commented
that the instrument is not consistent with the description of the
Tribe's or State's proposed approach to ensuring compliance with the
substantive criteria for compensatory mitigation, the Tribe or State
shall not approve the final compensatory mitigation instrument until
the Regional Administrator notifies the Director that the final
instrument is consistent with this approach.

[[Page 55293]]

b. Why is the Agency proposing this approach?
The CWA and EPA's implementing regulations provide that every
permit issued by a Tribe or State must apply and ensure compliance with
the guidelines established under CWA section 404(b)(1).\35\ 33 U.S.C.
1344(h)(1)(A)(i); 40 CFR 233.20(a). The CWA 404(b)(1) Guidelines at 40
CFR part 230 are the substantive criteria used to evaluate discharges
of dredged and/or fill material under CWA section 404. Subpart J of the
CWA 404(b)(1) Guidelines addresses Compensatory Mitigation for Losses
of Aquatic Resources. See 40 CFR 230.91 through 98. Tribes and States
must also ensure that their programs are no less stringent than the
requirements of the CWA and implementing regulations. 40 CFR 233.1(d).
Therefore, Tribes and States must ensure that the permits they issue
comply with the substantive criteria for compensatory mitigation set
forth in subpart J.
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\35\ See section V.B.1 of this preamble for a discussion on how
a Tribe or State can demonstrate that it has the authority to issue
permits that apply and assure compliance with aspects of the CWA
404(b)(1) Guidelines other than compensatory mitigation.
---------------------------------------------------------------------------

Under the CWA 404(b)(1) Guidelines, impacts should be avoided and
minimized to the maximum extent practicable before considering
compensatory mitigation for unavoidable impacts. In this context, the
term ``compensatory mitigation'' means the restoration (re-
establishment or rehabilitation), establishment (creation),
enhancement, and/or in certain circumstances preservation of aquatic
resources for the purposes of offsetting unavoidable adverse impacts
which remain after all appropriate and practicable avoidance and
minimization has been achieved. In 2008, the Corps and EPA issued joint
regulations, ``Compensatory Mitigation for Losses of Aquatic
Resources'' (``2008 Mitigation Rule'') (33 CFR 325.1(d)(7), 332; 40 CFR
part 230, subpart J) \36\ describing the compensatory mitigation
requirements for activities authorized by section 404 permits issued by
the Corps. The language in the 2008 Mitigation Rule focuses on Federal
concerns regarding permits issued by the Corps; for example, it
references the ``DA [Department of the Army] permits'' and the
``district engineer'' and does not refer to or account for Tribe- or
State-issued permits. See 73 FR 19594, 19650 (April 10, 2008).
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\36\ 33 CFR part 332 and 40 CFR part 230, subpart J contain
identical text. For ease of reference, this preamble refers to
compensatory mitigation requirements in 40 CFR part 230, subpart J
or ``subpart J.''
---------------------------------------------------------------------------

States have requested clarification as to how a Tribe or State can
demonstrate that it has authority to issue permits that apply and
ensure compliance with the substantive criteria for compensatory
mitigation set forth in subpart J of the CWA 404(b)(1) Guidelines.
States have also requested clarification about the respective roles and
responsibilities of the Tribe or State and the Federal agencies in
connection with compensatory mitigation for impacts to assumed waters.
The 2008 Mitigation Rule established performance standards and
criteria for three mechanisms: permittee-responsible compensatory
mitigation, mitigation banks, and in-lieu fee programs. These standards
and criteria were established to improve the quality and success of
compensatory mitigation projects for activities authorized by section
404 permits issued by the Corps. EPA proposes to add a new provision to
the section 404 Tribal and State program regulations to codify its
interpretation that Tribal and State section 404 programs must issue
permits that are no less stringent than and consistent with the
substantive criteria for compensatory mitigation described in 40 CFR
part 230, subpart J.
EPA recognizes that unlike other subparts of 40 CFR part 230, some
terminology and discussion in subpart J refers to the Corps as the
permitting authority. When a Tribe or State assumes the section 404
program, references to the Corps as the permitting authority (such as
references to the ``District Engineer'' or ``DA Permits'') in subpart J
are to be considered as applying to the Tribal or State permitting
agency or decision maker. In addition, the Tribe or State may exercise
necessary discretion in reconciling the provisions in subpart J with
the fact that the Tribe or State will be administering the program,
using its administrative structures, and in determining whether and how
to incorporate mitigation banking and/or an in-lieu fee program as
mechanisms for compensatory mitigation. EPA proposes to clarify in this
provision that the Tribe's or State's approach may deviate from the
specific requirements of subpart J to the extent necessary to reflect
Tribal or State administration of the program as opposed to Corps
administration of the program. For example, a Tribal or State program
may choose to provide for mitigation in the form of banks and permittee
responsible compensatory mitigation but not establish an in-lieu fee
program. As another example, in the context where the Corps is the
permitting agency, the Tribe or State often provides the required
financial assurance for mitigation banks approved by the Corps. In the
context where the Tribe or State will be administering the mitigation
program, they may also be providing the financial assurance (e.g., a
Department of Transportation banking instrument). Flexibility is needed
to allow the Tribe or State to develop a program where they may be both
issuing the instrument approval and providing the financial assurance
for the bank or in-lieu-fee program. The Tribe or State should
prioritize transparency when developing the program especially with
respect, but not limited to financial assurances. On no account may the
Tribal or State approach result in mitigation that is less stringent
than the requirements of subpart J.
EPA proposes to require that the Tribal or State program
description explain the approach to ensuring that all permits issued by
the Tribe or State will apply and ensure compliance with the
substantive criteria for compensatory mitigation set out in subpart J.
This explanation is necessary so that EPA can fully evaluate the
Tribe's or State's proposed approach to compensatory mitigation to
ensure its consistency with the substantive criteria of subpart J. It
would also ensure that EPA can assist the Tribe or State in ensuring
that its approach is practicable and implementable.
Finally, EPA is proposing that if the Tribe or State establishes
third party compensation mechanisms as part of their section 404
program (e.g., banks or in-lieu-fee programs), instruments associated
with these compensatory mitigation approaches must be sent to EPA, the
Corps, the U.S. Fish and Wildlife Service, and the National Marine
Fisheries Service for review prior to approving the instrument, as well
as to any Tribal or State resource agencies to which the Tribe or State
committed to send draft instruments in the program description. This
requirement does not include permittee-responsible compensatory
mitigation because those instruments would be included in individual
permit applications. The Tribe or State may also send draft instruments
to other relevant Tribal or State resource agencies for review on a
case-by-case basis. Federal, Tribal, or State resource agencies have
special expertise that may be important in facilitating the development
of the compensatory mitigation instruments. For example, EPA
anticipates that Tribes or States will circulate draft compensatory
mitigation instruments to State wildlife agencies where species
concerns may be

[[Page 55294]]

present within or adjacent to the mitigation site or if the site will
be established for the purpose of providing habitat for a particular
threatened or endangered species that is addressed by these agencies.
Their review would include an opportunity for these agencies to provide
comment on the draft instrument.
If EPA, the Corps, the U.S. Fish and Wildlife Service, or the
National Marine Fisheries Service intend to comment on the draft
instrument, they must notify the Tribe or State of their intent within
30 days of receipt. If the Tribe or State has been so notified, the
instrument must not be effective until after the receipt of such
comments or 90 days after the agencies' receipt of the proposed
instrument. The Tribe or State must consider and respond to any
comments provided by EPA, the Corps, the U.S. Fish and Wildlife
Service, the National Marine Fisheries Service, or any Tribal or State
resource agencies to which they committed to send draft instruments in
the program description before the instrument can become effective for
purposes of the State or Tribal assumed section 404 program. The
purpose of providing the opportunity for this review and feedback is to
ensure that the structure of the instrument, design of the proposed
projects, impacts for which the instrument would provide compensation,
and criteria for credit release of the approved instrument will result
in a successful bank or in-lieu-fee program capable of mitigating for
loss resulting from permitted activities. If EPA has commented that the
instrument fails to apply or ensure compliance with the approach
outlined in the program description for compliance with subpart J, the
Tribe or State may not approve the final compensatory mitigation
instrument until EPA notifies it that the final instrument ensures
compliance with this approach. The procedure for EPA review implements
EPA's oversight authority over Tribal and State section 404 programs.
The Agency also expects that this process will be familiar to Tribes
and States because it is modeled on, and similar to, procedures for EPA
review of permits. The proposed process is also intended to facilitate
input from other relevant agencies, which is analogous to how the
Interagency Review Team that oversees mitigation for Corps-issued
permits facilitates input from other relevant agencies. See, e.g., 33
U.S.C. 1344(g), (h); 40 CFR 233.20(b) (``No permit shall be issued . .
. [w]hen the Regional Administrator has objected to issuance of the
permit . . .''); 40 CFR part 233 generally; 40 CFR 230.98(b)
(describing Interagency Review Team procedures).
c. Request for Comment
EPA requests comment on all aspects of the proposed new provision,
including whether EPA should provide additional specificity as to
whether or how particular provisions of subpart J should or should not
apply to Tribal or State programs. EPA requests comment on its proposal
that if a Tribe or State establishes third party compensation
mechanisms as part of their section 404 program (e.g., banks or in-
lieu-fee programs), instruments associated with these compensatory
mitigation approaches must be sent to EPA, the Corps, the U.S. Fish and
Wildlife Service, and the National Marine Fisheries Service for review
prior to approving the instrument, as well as to any Tribal or State
resource agencies to which the Tribe or State committed to send draft
instruments in the program description. EPA requests comment as to
whether Tribal or State agencies should be required to provide draft
instruments only to EPA, the Corps, and the U.S. Fish and Wildlife
Service, or whether they should be required to provide such instruments
to particular Tribal or State agencies as well. EPA also requests
comment regarding which instruments may be appropriate for such review
and the specific process and time frames for review of the instruments.
EPA requests comment as to whether the time frames listed are
appropriate, whether they should be shorter or longer (e.g., provide 60
or 120 days for review) or if the regulations should be silent
regarding the time frames and simply provide that specific review
procedures for draft instruments should be addressed in the Memorandum
of Agreement between the Tribe or State and EPA.
EPA also requests comment regarding whether the proposed provisions
would provide sufficient oversight for Tribal or State compensatory
mitigation instruments, and whether to condition the Tribe's or State's
issuance of the instrument on their addressing all comments received
from EPA, the Corps, the U.S. Fish and Wildlife Service, and the
National Marine Fisheries Service. EPA requests comment as to whether
to establish a time frame for EPA's notification to the Director that
objections have been resolved, such as 60 or 90 days. EPA also requests
comment regarding the agencies to whom Tribes and States should
circulate draft instruments for review, and the extent to which they
must address comments from reviewing agencies.
4. Effective Date for Approved Programs
a. What is the Agency proposing?
EPA is proposing to modify and more clearly define the effective
date of the transfer of section 404 program administration from the
Corps to a Tribe or State following EPA program approval. Specifically,
EPA proposes to revise 40 CFR 233.11 and sections 233.13 through 233.15
of the existing regulations to provide that the transfer of an approved
section 404 program to a Tribe or State takes effect 30 days after
publication of the notice of EPA's program approval appears in the
Federal Register, except where EPA and the Tribe or State have
established a later effective date, not to exceed 120 days from the
date of notice in the Federal Register. Additionally, EPA is proposing
to increase transparency and provide early notice to interested parties
by requiring that decisions to approve Tribal and State programs and
revisions be posted on the EPA website as well as in the Federal
Register.
b. Why is the Agency proposing this approach?
Section 404(h) of the CWA addresses the transfer of permitting
authority and pending permit applications from the Corps to the Tribe
or State following EPA notice of program approval but does not specify
an effective date. The existing regulations provide that the transfer
of permitting authority to a Tribe or State shall not be considered
effective until notice of EPA's program approval appears in the Federal
Register. 40 CFR 233.15(h).
EPA proposes to establish a presumptive effective date for program
assumption of 30 days from the date of publication of the notice of
EPA's program approval in the Federal Register. Establishing a short,
clearly defined period of time between program approval and Tribal or
State assumption of program administration benefits the public and
regulated community by providing advance notice of the date of program
transfer and supporting the smooth transition of program functions,
while limiting any uncertainty that could arise with a more extended
transition period.
Taking into consideration the input EPA has received from some
States in the past, EPA also proposes that a Tribe or State may request
a later effective date for the transfer of an approved section 404
program, up to 120 days from the date that the notice of EPA's program
approval is published in the Federal Register. EPA proposes to allow
more than 30 days only when a Tribe's or State's specific circumstances
justify

[[Page 55295]]

the need for additional time before assuming administration of the
program. In all cases, that effective date would be set forth in the
Memorandum of Agreement between a Tribe or State and EPA required by 40
CFR 233.14(b)(2) and published in the Federal Register.
Several States that have contemplated assumption of the section 404
program indicated that a transition period between EPA's approval
decision and the date of transfer of responsibility from the Corps to
the State would enable them to more effectively prepare for the
transition, including securing and allocating the necessary resources
to successfully implement the assumed permitting program if their
program is approved. These States include some with existing surface
water or wetlands protection programs authorized under State law that
would be expanded or adapted to incorporate the section 404 program for
State-regulated waters, and others without any existing similar State
programs. In both cases, but especially the latter, Tribes and States
may need to reorganize, assign, and train staff, and purchase and
employ new equipment for data processing before they are fully able to
administer a section 404 program. Tribes and States without a similar
program will presumably need to initiate these steps well before EPA
completes its program review and determination, but some may not be
fully prepared to administer the program 30 days after notice of
program approval (e.g., if funding is made available by the State
legislature contingent upon program approval by EPA).
EPA would expect a Tribe or State to be prepared to implement any
final steps quickly and therefore proposes that the amount of time
between publication of notice of program approval and transfer of the
program to the Tribe or State not exceed 120 days. For example, a Tribe
or State should not wait until EPA approves the program before
initiating hiring and training processes for staff that were committed
in the program description. The effective date would be specified in
the Memorandum of Agreement between EPA and the Tribe or State, and the
program description should specify the steps the Tribe or State will
take, if any, after EPA approval to fully administer its program, such
as specifying the timeline for any assignment and training of staff and
ensuring program funding is accessible by the effective date.
This proposal would revise and clarify the language in 40 CFR
233.11 and sections 233.13 through 233.15 of the existing section 404
Tribal and State program regulations, which address the contents of a
Tribe's or State's program description, the EPA and Corps Memoranda of
Agreement with Tribes and States, and the procedures for approving
Tribal and State programs. The existing regulations require a Tribe or
State and the Corps to include procedures for transferring pending
section 404 permit applications and other relevant information to the
Tribe or State in their Memorandum of Agreement. 40 CFR 233.14(b)(2).
The regulations provide that the transfer of permitting authority to a
Tribe or State shall not be considered effective until notice of EPA's
program approval appears in the Federal Register. The Corps shall
suspend the issuance of section 404 permits in State-regulated waters
``on such effective date.'' 40 CFR 233.15(h). Section 404(h)(2)(A) of
the CWA, however, specifies that after EPA has notified the Tribe or
State and Corps of its program approval, the Corps shall suspend
issuance of permits in Tribal or State-regulated waters ``upon
subsequent notification from such State that it is administering such
program.'' 33 U.S.C. 1344(h)(2)(A). Read together, the language in the
statute and EPA's regulations may create confusion regarding when the
Corps shall suspend the issuance of permits.
Section 404(h)(4) of the CWA provides that ``[a]fter the Secretary
receives notification from the Administrator under paragraph (2) or (3)
of this subsection that a State permit program has been approved, the
Secretary shall transfer any applications for permits pending before
the Secretary for activities with respect to which a permit may be
issued pursuant to such State program to such State for appropriate
action.'' 33 U.S.C. 1344(h)(4). Once the State has received those
permit applications, and signals to the Corps that it is ready to
assume permitting activity, see 33 U.S.C. 1344(h)(2), permitting
responsibility should transfer. Thus, the administrative process
envisioned by Congress is that EPA receives a program request, reviews,
and approves or rejects the application, then notifies the parties of
an approval decision, after which the Corps begins to transfer existing
permitting materials. Under this framework, it is clear that some
reasonable transition period is permissible, although Congress
anticipated that transfer would happen relatively quickly.
EPA is proposing to modify the regulatory text to clarify when and
how the section 404 program transfers to the Tribe or State following
EPA's approval, and that the presumptive date of transfer should be 30
days from the date of notice of program approval in the Federal
Register, but that Tribes and States that satisfactorily demonstrate a
need for more than 30 days to assume and be prepared to fully
administer the program can request an effective date of up to 120 days
from the date of notice. EPA also proposes that if a Tribe or State
requests to assume administration of the program more than 30 days
after EPA's approval, the program description will include a
description and schedule of the actions that will be taken following
EPA approval for the Tribe or State to begin administering the program.
This description would help to support the Tribe's or State's request
and demonstrate why the Tribe or State considers the additional time
necessary.
EPA proposes that the Memorandum of Agreement between a Tribe or
State and EPA include the effective date for transfer of the program
from the Corps to the Tribe or State, identified as the number of days
following the date of publication of program approval in the Federal
Register. This will provide for the efficient development and
administration of the Tribal or State program, while also making the
process more predictable for the regulated community and the public.
The Corps would continue to process permit applications and begin the
transfer of permits under review prior to the effective date of that
program approval, but the Tribe or State would not be authorized to
process these permits until the effective date.
EPA recognizes that setting an effective date more than 30 days
after program approval could create uncertainty. It is possible that
with a longer time period and certain steps yet to be taken by the
Tribe or State, events could occur after program approval which could
delay a Tribe's or State's ability to fully implement its program and
potentially lead to a situation in which it is no longer certain when
or whether the Tribe or State will begin to fully administer its
program. However, such a situation could be addressed under the
existing and proposed amended regulations, if it becomes necessary, by
approving a revision of a Tribe's or State's program pursuant to 40 CFR
233.16(d), by the Tribe or State voluntarily relinquishing its legal
authority and leaving the program with the Corps, or by EPA initiating
the process to withdraw a program approval for failure to comply with
the requirements of 40 CFR part 233. 40 CFR 233.53(b).
c. Request for Comment
EPA seeks comment on whether the section 404 Tribal and State
program

[[Page 55296]]

regulations should include a default effective date for transfer of the
section 404 program from the Corps to an approved Tribe or State;
whether the regulations should allow for Tribes or States and EPA, on a
case-by-case basis, to set the effective date later than 30 days but no
more than 120 days from date of publication of program approval in the
Federal Register; or whether the Agency should not set a new effective
date as proposed, but rather retain the existing regulations that
simply specify that ``transfer of the program shall not be considered
effective until such notice appears in the Federal Register.'' 40 CFR
233.15(h).
With respect to EPA's proposed approach, EPA seeks comment on
whether a presumptive effective date should be longer than 30 days,
such as 60 or 90 days. EPA also seeks comment on whether the regulatory
text should explicitly limit the allowable effective date to 120 days
from the date of EPA's program approval, or whether a shorter or longer
limit would be appropriate. EPA requests comment on whether it should
specify particular information that the Tribe or State must provide in
the program description if the Tribe or State requests to assume
administration of the program more than 30 days after EPA's approval,
such as a schedule for assigning or training staff or procuring
resources. EPA also requests comment as to the circumstances under
which EPA might disapprove a Tribe's or State's submission because its
plan for implementation is inadequate. EPA requests comment on
potential problems with deferring the effective date beyond 30 days and
how EPA or a Tribe or State might address them. Finally, EPA requests
comment on whether a proposed effective date may be modified after
program approval is published in the Federal Register, and if so, the
circumstances and procedural mechanisms for doing so.

B. Permit Requirements

This section of the preamble includes topics that are generally
related to Tribal and State section 404 program requirements, including
compliance with the CWA 404(b)(1) Guidelines and requirements for
judicial review and rights of appeal.
1. Compliance With the CWA 404(b)(1) Guidelines
a. What is the Agency proposing?
Stakeholders have requested clarity regarding the way in which a
Tribe or State wishing to assume the CWA section 404 program can
satisfy CWA section 404(h)(1)(A)(i) by demonstrating that it has
authority to issue permits that ``apply and assure compliance with''
the CWA 404(b)(1) Guidelines (found at 40 CFR part 230). See 33 U.S.C.
1344(h)(1)(A)(i). Because the existing regulations already require that
CWA section 404 permits issued by an assuming Tribe or State must
comply with the CWA 404(b)(1) Guidelines, and EPA does not want to
unintentionally constrain how Tribes and States can demonstrate their
authority, EPA is not proposing to add to the regulatory text. In
response to stakeholder requests, EPA discusses below various
approaches that Tribes and States can undertake to demonstrate that
they have sufficient authority to issue permits that apply and assure
compliance with the CWA 404(b)(1) Guidelines.\37\
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\37\ See section V.A.3 of this preamble for a discussion on how
a Tribe or State can demonstrate that it has the authority to issue
permits that apply and assure compliance with the portion of the CWA
404(b)(1) Guidelines addressing compensatory mitigation (40 CFR part
230, subpart J).
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b. Why is the Agency proposing this approach?
The CWA 404(b)(1) Guidelines are the substantive criteria used to
evaluate discharges of dredged and/or fill material under CWA section
404. Pursuant to CWA section 404(h)(1)(A)(i), EPA may approve a Tribal
or State request for assumption only if EPA determines, among other
things, that the Tribe or State has authority ``[t]o issue permits
which--(i) apply, and assure compliance with, any applicable
requirements of this section, including, but not limited to, the
guidelines established under subsection [404](b)(1). . . .'' Among
other things, the CWA 404(b)(1) Guidelines direct that ``no discharge
of dredged or fill material shall be permitted'' if there is a less
environmentally damaging practicable alternative, so long as the
alternative does not have other significant adverse environmental
consequences (40 CFR 230.10(a)); if it causes or contributes to
violations of applicable water quality standards taking into account
disposal site dilution and dispersion (40 CFR 230.10(b)(1)); if it will
cause or contribute to significant degradation of waters of the United
States (40 CFR 230.10(c)); or if it would jeopardize the continued
existence of listed endangered or threatened species under the
Endangered Species Act of 1973 or result in the likelihood of the
destruction or adverse modification of designated critical habitat (40
CFR 230.10(b)(3)).
Consistent with CWA section 404(h)(1)(A)(i), the existing section
404 Tribal and State program regulations require that assuming Tribes
and States may not impose conditions less stringent than those required
under Federal law (40 CFR 233.1(d)); that Tribes and States may not
issue permits that do not comply with the requirements of the Act or
this part of the regulations, including the CWA 404(b)(1) Guidelines
(40 CFR 233.20(a)); that ``[f]or each permit the Director shall
establish conditions which assure compliance with all applicable
statutory and regulatory requirements, including the 404(b)(1)
Guidelines . . .'' (40 CFR 233.23(a)); and that ``The Director will
review all applications for compliance with the 404(b)(1) Guidelines
and/or equivalent State environmental criteria as well as any other
applicable State laws or regulations'' (40 CFR 233.34(a)).
Recognizing that a CWA section 404 permit may be required for a
variety of discharges into a wide range of aquatic ecosystems, the CWA
404(b)(1) Guidelines provide ``a certain amount of flexibility,''
consisting of tools for evaluating proposed discharges, rather than
numeric standards. As EPA explained in the preamble to the CWA
404(b)(1) Guidelines: ``Characteristics of waters of the United States
vary greatly, both from region to region and within a region . . . As a
result, the Guidelines concentrate on specifying the tools to be used
in evaluating and testing the impact of dredged or fill material
discharges on waters of the United States rather than on simply listing
numerical pass-fail points.'' 45 FR 85336, 85336 (December 24, 1980).
See also 40 CFR 230.6.
With respect to Tribes or States seeking to assume administration
of the CWA section 404 program, EPA finds that the existing section 404
Tribal and State program regulations, including 40 CFR 233.1(d); 40 CFR
233.20(a); 40 CFR 233.23(a); and 40 CFR 233.34, appropriately require
that Tribal and State environmental review criteria be consistent with
the CWA 404(b)(1) Guidelines. At the same time, the existing
regulations appropriately avoid a ``one size fits all'' approach and
afford assuming Tribes and States necessary flexibility as to how best
to craft a Tribal or State program that would issue permits that apply
and assure compliance with the Guidelines. Accordingly, EPA does not
propose to revise the regulations implementing CWA section 404(h)'s
requirement that Tribes and States have authority sufficient to issue
permits that apply and assure compliance with the CWA 404(b)(1)
Guidelines.
EPA notes that there are a variety of means by which a Tribe or
State

[[Page 55297]]

wishing to assume implementation of the CWA section 404 program may
demonstrate that it has sufficient authority to issue permits that
apply and assure compliance with the CWA 404(b)(1) Guidelines. Nothing
in CWA section 404(h) requires that Tribes and States adopt verbatim or
incorporate into their programs by reference the CWA 404(b)(1)
Guidelines. See 49 FR 39012, 39015 (October 2, 1984). Clearly, a Tribe
or State can demonstrate sufficient authority to issue permits that
apply and assure compliance by choosing to adopt verbatim or
incorporate into its program by reference those portions of the CWA
404(b)(1) Guidelines that provide the substantive environmental
criteria and analyses used for evaluating discharges of dredged and/or
fill material under CWA section 404. That said, EPA continues to
recognize that adoption and incorporation by reference are not the sole
means by which an assuming Tribe or State can demonstrate sufficient
authority to issue permits that apply and assure compliance with the
CWA 404(b)(1) Guidelines.
A Tribe or State wishing to assume administration of the CWA
section 404 program, for example, could demonstrate that it has
sufficient authority to apply and assure compliance with the CWA
404(b)(1) Guidelines using a cross-walk between the Tribal or State
program and the CWA 404(b)(1) Guidelines or a similar written analysis
of the Tribal or State program authority, which it could include in its
request to assume the program. A Tribe or State also could develop and
include with its program submission a permit checklist or other
documentation to be used in connection with each permit decision to
document on a case-by-case basis how each permit decision is consistent
with the CWA 404(b)(1) Guidelines. Where a Tribe's or State's request
for assumption relies upon an already established and ongoing dredged
and fill permit program under Tribal or State law, that Tribe or State
could supplement its program description with a demonstration-type
approach, showing, for example, that the terms and conditions of
permits for discharges into waters of the United States that were
issued pursuant to the Tribal or State program were consistent with
permits issued by the Corps for the same discharge.
EPA is aware that demonstrating authority to issue permits that
apply and assure compliance with certain aspects of the CWA 404(b)(1)
Guidelines may be challenging. For example, the CWA 404(b)(1)
Guidelines direct that no discharge of dredged or fill material shall
be permitted if it will jeopardize the continued existence of listed
endangered or threatened species under the Endangered Species Act of
1973 or result in the likelihood of the destruction or adverse
modification of designated critical habitat (40 CFR 230.10(b)(3)). To
demonstrate compliance with this aspect of the CWA 404(b)(1)
Guidelines, Tribes and States could identify the listed species and
areas of designated critical habitat within their geographic
boundaries, the types of discharges that are likely to be permitted,
and other unique Tribal or State factors, and include in the program
submission provisions and procedures to protect listed species and
habitat. Tribes and States also could develop processes for ensuring
that their identification of listed species and designated critical
habitat remains up-to-date as well as processes to avoid impacts to
these resources.
EPA also encourages Tribes and States to consider proactively
coordinating with the relevant National Marine Fisheries Service or
U.S. Fish and Wildlife Service (``the Services'') regional or field
offices when developing their program submissions. To the extent that
Tribes and States work with the Services to develop their programs,
such work would facilitate EPA's compliance with its obligations under
CWA sections 404(g)(2) and 404(h)(1) to provide the Services with an
opportunity to comment on a Tribal or State program submission and to
consider those comments when determining whether the Tribe or State has
the requisite authority to implement the CWA section 404 program. See
33 U.S.C. 1344(g)(2) and 1344(h)(1); see also 40 CFR 233.15(d) and (g).
Similarly, demonstrating that the Tribe or State has sufficient
authority to implement subpart F of the CWA 404(b)(1) Guidelines may be
challenging. Pursuant to subpart F (40 CFR 230.50 through 230.54), the
permit issuing authority should consider potential effects on human use
characteristics, including ``areas designated under Federal and State
laws or local ordinances to be managed for their aesthetic,
educational, historical, recreational, or scientific value,'' when
making the factual determinations and the findings of compliance or
non-compliance under the Guidelines. 40 CFR 230.54(a).
To demonstrate sufficient authority to apply and assure compliance
with subpart F of the CWA 404(b)(1) Guidelines, a Tribe or State should
consider including in its program description its process for
evaluating and addressing potential permit impacts on historic
properties. Such a process could include formal or informal
coordination and communication with the State Historic Preservation
Officer or Tribal Historic Preservation Office (SHPO or THPO). The
Tribe or State also could consider developing an agreement with the
relevant SHPO or THPO to establish a process to identify historic
properties that may be impacted by the Tribe's or State's issuance of
section 404 permits and a process for resolving adverse effects. Such
an agreement could include the identification of relevant parties with
an interest in potential impacts on historic properties (these could
correspond to entities that would have a consultative role under the
National Historic Preservation Act regulations), duties and
responsibilities of the identified parties, and a description of the
process to consider any impacts, including the determination and
resolution of adverse effects on historic properties. Such an agreement
could facilitate EPA's review of a Tribal or State permit's impacts on
historic properties, consistent with EPA's oversight of the authorized
program.\38\
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\38\ See 40 CFR 233.51(b)(6) (providing that EPA review of State
permit applications may not be waived for ``[d]ischarges within
critical areas established under State or Federal law, including but
not limited to . . . sites identified or proposed under the National
Historic Preservation Act. . . .'')
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EPA also recommends that an assuming Tribe or State consider
incorporating into its program description ways to identify and
consider impacts to other human use characteristics, such as impacts to
waters that support subsistence fishing by the local population or that
may have significance for religious or treaty purposes. These could
include, for example, formalizing a process for coordinating with local
communities to identify and understand how waters that may be affected
by discharges of dredged or fill material are used for subsistence
fishing, religious purposes, or other uses important to the local
community.
In pre-proposal outreach for this rulemaking, some Tribes asked how
a State that has assumed the section 404 program would consider
potential impacts on Tribes or Tribal interests when making permit
decisions. In addition to the proposed provision for coordinating with
downstream Tribes in section 233.31 described in section V.C.2 of this
preamble, and the addition of EPA review of a permit, upon request from
a Tribe in section 233.51, EPA notes that complying with the CWA

[[Page 55298]]

404(b)(1) Guidelines currently provides an opportunity for States to
consider potential impacts of proposed section 404 permits on aquatic
resources and uses important to Tribes.
These human use considerations encompass, among other things, uses
and values of aquatic resources that are important to Tribes. For
example, section 230.51 in subpart F describes considerations regarding
potential impacts of dredged or fill material on recreational and
commercial fisheries, consisting of ``harvestable fish, crustaceans,
shellfish, and other aquatic organisms.'' 40 CFR 230.51(a). Section
230.52 includes considerations regarding the impact of dredged or fill
material on water-related recreation, including harvesting of resources
and non-consumptive activities such as canoeing on the water. Section
230.53 addresses potential impacts on aesthetic values of aquatic
ecosystems and notes that: ``The discharge of dredged or fill material
can mar the beauty of natural aquatic ecosystems by degrading water
quality, creating distracting disposal sites, including inappropriate
development, encouraging unplanned and incompatible human access, and
by destroying vital elements that contribute to the compositional
harmony or unity, visual distinctiveness, or diversity of an area.'' 40
CFR 230.53(b). Section 230.54 discusses considerations regarding
``national and historical monuments, national seashores . . . and
similar preserves'' and where the discharge may ``modify the aesthetic,
educational, historical, recreational and/or scientific qualities
thereby reducing or eliminating the uses for which such sites are set
aside and managed.'' 40 CFR 230.54(b).
The CWA 404(b)(1) Guidelines at section 233.31-33 require that the
Tribal or State permitting authority coordinate with affected States
prior to permit issuance, and provide for public notice and hearings
related to permit applications, preparation of draft general permits,
and similar actions. As mentioned above, EPA considers the human use
effects under subpart F of the CWA 404(b)(1) Guidelines to encompass
impacts of proposed discharges on Tribal interests, including impacts
on fisheries and other aquatic resources, aesthetics, and historic and
cultural uses. As noted in section V.C.2 of this preamble, the proposed
rule would require States to consider comments from eligible Tribes and
suggested conditions on permit applications in the same way that
potentially affected States' comments are currently considered under
section 233.31. In addition, Tribes would have an opportunity to
request EPA review of permit applications that may affect rights and
resources of importance to the Tribe.
The foregoing, of course, are only examples, and there are likely
other means by which a Tribe or State could demonstrate that it has
sufficient authority to issue permits that comply and assure compliance
with the CWA 404(b)(1) Guidelines. EPA seeks to avoid unnecessarily
limiting Tribes and States by imposing a single vehicle or approach for
implementing the CWA 404(b)(1) Guidelines.
c. Request for Comment
EPA requests comment on whether the existing regulations provide
appropriate clarity and leeway for Tribes and States to ensure that the
permits they issue under an assumed program assure consistency with the
CWA 404(b)(1) Guidelines. EPA also seeks comment on ways that Tribes
and States wishing to assume the CWA section 404 program can
demonstrate they have sufficient authority to assure consistency with
the CWA 404(b)(1) Guidelines, including but not limited to, identifying
the least environmentally damaging alternative, avoiding significant
degradation, and considering impacts to threatened and endangered
species, critical habitat, and human use characteristics, including but
not limited to historic properties and Tribal interests.
2. Judicial Review and Rights of Appeal
a. What is the Agency proposing?
EPA proposes to clarify that States seeking to assume the section
404 program must provide for judicial review of decisions to approve or
deny permits. The proposed language is similar to the language added to
the CWA section 402 NPDES State program regulations in 1996, with one
modification to specify that State requirements that provide for the
losing party in a challenge to pay all attorneys' fees, regardless of
the merit of their position, are an unacceptable impingement on the
accessibility of judicial review. This proposed provision does not
apply to Tribal programs.
b. Why is the Agency proposing this approach?
The Agency is proposing this approach because it would give effect
to the CWA's requirements for public participation in the permitting
process and that State programs comply with all requirements of section
404, as well as the regulatory requirement that Tribal and State
programs be no less stringent than the Federal section 404 program. The
current regulations require the program description to include a
description of the Tribe's or State's judicial review procedure but do
not explicitly require a particular standard for that procedure. In
addition, EPA expects that States will have the authority and
experience to implement this requirement because it is similar to the
section 402 requirement that States authorize judicial review.
In 1996, EPA promulgated the following regulation providing that
States administering the CWA section 402 program must allow for State
court review of decisions to approve or deny permits:

All States that administer or seek to administer a program under
this part shall provide an opportunity for judicial review in State
Court of the final approval or denial of permits by the State that
is sufficient to provide for, encourage, and assist public
participation in the permitting process. A State will meet this
standard if State law allows an opportunity for judicial review that
is the same as that available to obtain judicial review in federal
court of a federally-issued NPDES permit (see Sec. 509 of the Clean
Water Act). A State will not meet this standard if it narrowly
restricts the class of persons who may challenge the approval or
denial of permits (for example, if only the permittee can obtain
judicial review, if persons must demonstrate injury to a pecuniary
interest in order to obtain judicial review, or if persons must have
a property interest in close proximity to a discharge or surface
waters in order to obtain judicial review.) This requirement does
not apply to Indian Tribes.

Amendment to Requirements for Authorized State Permit Programs
Under Section 402 of the Clean Water Act, 61 FR 20972 (May 8, 1996),
codified at 40 CFR 123.30.
Like permits issued under section 402, permits issued under section
404 fall within the processes that are subject to the congressional
directive of CWA section 101(e), which states:

Public participation in the development, revision, and
enforcement of any regulation, standard, effluent limitation, plan,
or program established by the Administrator or any State under this
chapter shall be provided for, encouraged, and assisted by the
Administrator and the States. The Administrator, in cooperation with
the States, shall develop and publish regulations specifying minimum
guidelines for public participation in such processes.

33 U.S.C. 1251(e). Permits are a key mechanism through which the
regulations, standards, and effluent limitations of the CWA are
implemented because they establish specific limitations applicable to
individual dischargers. See 61 FR 20973 (May 8, 1996). This proposal
would effectuate

[[Page 55299]]

CWA section 101(e) by requiring that States allow meaningful public
participation in the permit development process by authorizing judicial
review.
As EPA explained in promulgating the section 402 judicial review
provision, the United States Court of Appeals for the Fourth Circuit
has agreed that ``broad availability of judicial review is necessary to
ensure that the required public comment period serves its proper
purpose. The comment of an ordinary citizen carries more weight if
officials know that the citizen has the power to seek judicial review
of any administrative decision harming him.'' Com. of Virginia v.
Browner, 80 F.3d 869, 879 (4th Cir. 1996) (upholding EPA's denial of
Virginia's proposed permitting program under Title V of the Clean Air
Act).
When citizens lack the opportunity to challenge executive agency
decisions in court, their ability to influence permitting decisions
through other required elements of public participation, such as public
comments and public hearings on proposed permits, may be compromised.
Citizens may perceive that a State administrative agency is not
addressing their concerns about section 404 permits because the
citizens have no recourse to an impartial judiciary, which would have a
chilling effect on all the remaining forms of public participation in
the permitting process. Without the possibility of judicial review by
citizens, public participation before a State administrative agency
could become less meaningful. For example, State officials may spend
less time considering and responding to the comments of parties who
have no standing to sue as opposed to the comments of parties who can
challenge the final administrative decision to issue or deny the permit
in court. See id.
The legislative history underlying section 101(e) further
emphasizes the importance of a vigorous public participation process in
implementing and enforcing clean water protections. 33 U.S.C. 1251(e).
Congress included the provisions relating to public participation in
section 101(e) because, as the Senate Report noted, it recognized that
``[a] high degree of informed public participation in the control
process is essential to the accomplishment of the objectives we seek--a
restored and protected natural environment.'' S. Rep. 414, 92d Cong.,
2d Sess. 12 (1972), reprinted in A Legislative History of the Water
Pollution Control Act Amendments of 1972, Cong. Research Service, Comm.
Print No. 1, 93d Cong., 1st Sess. (1973) (hereinafter cited as 1972
Legis. Hist.) at 1430.
The Senate Report also observed that the implementation of water
pollution control measures would depend, ``to a great extent, upon the
pressures and persistence which an interested public can exert upon the
governmental process. The Environmental Protection Agency and the State
should actively seek, encourage and assist the involvement and
participation of the public in the process of setting water quality
requirements and in their subsequent implementation and enforcement.''
Id; see also 1972 Legis. Hist. at 1490 (``The scrutiny of the public .
. . is extremely important in insuring . . . a high level of
performance by all levels of government and discharge sources.'').
Similarly, the House directed EPA and the States ``to encourage and
assist the public so that it may fully participate in the
administrative process.'' H. Rep. 911, 92d Cong., 2d Sess. 79, 1972
Legis. Hist. at 766. The House also noted, ``steps are necessary to
restore the public's confidence and to open wide the opportunities for
the public to participate in a meaningful way in the decisions of
government;'' therefore, public participation is ``specifically
required,'' and the Administrator is ``directed to encourage this
participation.'' Id. at 819. Congressman Dingell, a leading sponsor of
the CWA, characterized CWA section 101(e) as applying ``across the
board.'' 1972 Legis. Hist. at 108.
Section 404(h)(1)(C) of the CWA provides support for this provision
as well. Section 404(h)(1)(C) provides that EPA may disapprove a State
section 404 program if adequate authority does not exist to ensure that
the public ``receive[s] notice of each application for a permit and to
provide an opportunity for public hearing before a ruling on each such
application.'' Id. at 1344(h)(1)(C). Given the language and history of
CWA section 101(e), Congress intended the public hearing required by
CWA section 404(h)(1)(C) to be a meaningful exercise.
Finally, this proposed approach is consistent with the CWA's
requirement that States issue permits that ``apply, and assure
compliance with, any applicable requirements'' of section 404, 33
U.S.C. 1344(h)(1)(A)(i); and the regulatory provision providing that
``[a]ny approved State Program shall, at all times, be conducted in
accordance with the requirements of the Act and of this part'' and that
States ``may not impose any less stringent requirements for any
purpose.'' 40 CFR 233.1(d). As citizens are authorized to challenge the
issuance of section 404 permits when the Federal Government administers
the program, challenges must also be authorized when a State has
assumed the program in order to assure compliance with the applicable
requirements of section 404 and to ensure that the State program is not
less stringent than the Federal program. Allowing citizens the
opportunity to challenge permits is not the type of technical discharge
limitation that first comes to mind as a more or less ``stringent''
requirement of section 404, but this opportunity is a vital backstop
that can ensure permits incorporate sufficiently stringent
requirements. Permitting authorities are likely to be particularly
careful to address citizen input and ensure that issued permits comply
with CWA requirements if they know such permits may be challenged by a
broad range of citizen stakeholders. Therefore, ensuring that States
provide an opportunity for judicial review that is the same as that
available to obtain judicial review in Federal court helps to ensure
compliance with section 404 and all requirements of the CWA.
This proposal for the section 404 State program regulations would
effectuate EPA's policy interest in deferring to State administration
of authorized section 404 programs in the same way that EPA defers to
State administration of section 402 programs. See 61 FR 20974 (May 8,
1996). EPA supports State assumption of the section 404 program and is
just as committed to ensuring robust opportunity for citizen
participation in that program. In authorizing State programs to act in
lieu of the Federal Government, EPA must ensure that the implementation
of the State program will be procedurally fair and consistent with the
intent of the CWA. This proposed rule would provide additional
assurance of State program adequacy and fairness by ensuring
opportunities for judicial review.
While EPA's existing regulations require the program description to
provide a description of the Tribe's or State's judicial review
procedures, see 40 CFR 233.11(b), EPA's proposed application of the CWA
standard for judicial review of permits to section 404 programs is new
and not the only potential reading of the CWA. Yet EPA views this
proposed requirement as the best interpretation of the sections 101 and
404 for the reasons outlined above.
Like the parallel provision in the section 402 regulations, a State
will meet this standard if it allows an opportunity for judicial review
that is the same as that available to obtain judicial review in Federal
court of a

[[Page 55300]]

Federally-issued NPDES permit. See 61 FR 20975 (May 8, 1996). Section
509(b)(1) of the CWA governs the availability of judicial review of
Federally-issued NPDES permits. The term ``interested person'' in
section 509(b) is intended to embody the injury-in-fact rule of the
Administrative Procedure Act, as set forth by the Supreme Court in
Sierra Club v. Morton, 405 U.S. 727 (1972). Montgomery Environmental
Coalition v. Costle, 646 F.2d 568, 576-78 (D.C. Cir. 1980); accord
Trustees for Alaska v. EPA, 749 F.2d 549, 554-55 (9th Cir. 1984); see
also Roosevelt Campobello Int'l Park Comm'n v. EPA, 711 F.2d 431, 435
(1st Cir. 1983); S. Conference Rep. No. 1236, 92d Cong, 2d Sess. 146
(1972), 1972 Legis. Hist. at 281, 329.
With respect to the nature of the injury that an ``interested
person'' must show to obtain standing, the Supreme Court held in Sierra
Club v. Morton that harm to an economic interest is not necessary to
confer standing. 405 U.S. at 734-35. A party may also seek judicial
review based on harm to that party's aesthetic, environmental, or
recreational interest. Id. The Supreme Court affirmed this holding in
Friends of the Earth, Inc. v. Laidlaw Environmental Services, Inc., 528
U.S. 167, 183 (2000) (``environmental plaintiffs adequately allege
injury in fact when they aver that they use the affected area and are
persons for whom the aesthetic and recreational values of the area will
be lessened by the challenged activity'') (internal citations omitted);
and in Lujan v. Defenders of Wildlife, 504 U.S. 555, 562-63 (1992)
(``[o]f course, the desire to use or observe an animal species, even
for purely aesthetic purposes, is undeniably a cognizable interest for
purposes of standing.'').
EPA recognizes that CWA section 509(b)(1) does not authorize
judicial review of Federally-issued section 404 permits, which are
administered by the Corps. Rather, section 404 permits may be
challenged under the Administrative Procedure Act. See National Ass'n
of Mfrs. v. Dep't of Def., 138 S. Ct. 617, 626-27 (2018) (``EPA actions
falling outside the scope of Sec. 1369(b)(1) . . . are typically
governed by the APA.'') Nonetheless, establishing the same standards
and expectations for standing to challenge the section 404 program that
EPA has already established for the section 402 program would
presumably enhance the efficiency and predictability of State efforts
to assume and operate the section 404 program. Many States that
administer the section 402 program already have systems in place to
provide for judicial review pursuant to 40 CFR 123.30, consistent with
the Agency's interpretation of the scope of that provision. Moreover,
as noted above, the CWA ``interested person'' standard applicable to
review of section 402 permits was initially derived from the
Administrative Procedure Act, the statute under which citizens may
challenge section 404 permits. The standard is therefore appropriate to
apply to section 404 permitting. For these reasons, distinguishing
between the standards for judicial review of State-issued section 402
and 404 permits is not necessary.
Furthermore, nothing about State-issued section 404 permits
necessitates a distinct set of expectations for judicial review of
those permits. The Corps' regulations address the extent to which final
permit decisions are subject to judicial review. See 33 CFR 331.10,
331.12. However, EPA is not the agency charged with implementing or
interpreting these provisions governing judicial review of Corps-issued
section 404 permits. Therefore, for the sake of consistency and ease of
implementation, EPA proposes to use the CWA section 509(b) standard as
a benchmark for State section 404 programs as well as State section 402
programs.
The proposed rule would provide that a State does not ``provide
for, encourage, and assist'' public participation in the permitting
process if it narrowly restricts the class of persons who may challenge
the approval or denial of permits (for example, if only the permittee
can obtain judicial review, or if persons must demonstrate injury to a
pecuniary interest in order to obtain judicial review, or if persons
must have a property interest in close proximity to a discharge or
surface waters in order to obtain judicial review). As EPA made clear
in the preamble to 40 CFR 123.30, broad standing to judicially
challenge State-issued NPDES permits is necessary to ensure that public
participation before the State permitting agency will serve its
intended purpose. This provision is also intended to ensure that
ordinary citizens will be in a position of substantial parity with
permittees with respect to standing to bring judicial challenges to
State permitting decisions. 61 FR 20975 (May 8, 1996).
The proposed rule would also provide that a State does not
``provide for, encourage, and assist'' public participation in the
permitting process if State law or regulation requires that attorneys'
fees must be imposed in favor of any prevailing party and against the
losing party, notwithstanding the good faith or merit of the litigant's
position. This form of ``fee shifting'' would form a barrier to court
access for litigants unable to risk an adverse fee award, no matter the
strength of their case. Prohibitions against narrow standing
restrictions and mandatory fee-shifting are only examples of such
deficiencies in State programs. The proposed provision does not only
prohibit these provisions, but any others that would limit access to
judicial review beyond the scope of judicial review available in
Federal court for review of Federally-issued NPDES permits.
EPA interprets the proposed provision to preclude State laws that
would limit associational standing to a greater extent than Federal
law. Under Federal law, an association may bring a challenge on behalf
of a single member's harms resulting from a challenged action. See
Sierra Club v. Johnson, 436 F.3d 1269, 1279 (11th Cir. 2006)
(associational standing of Sierra Club satisfied by affidavit of one
member who suffered injury in fact). State requirements that establish
a higher bar for associational standing than Federal law, such as
requirements providing that an association only has standing if a
substantial number of an association's members would be injured by the
challenged action, would be inconsistent with this proposal.
As with the section 402 regulations, the proposed rule would apply
to final actions with respect to modification, revocation and
reissuance, and termination of permits, as well as the initial approval
or denial of permits. EPA would consider the opportunities for judicial
review of State-issued section 404 permits provided by State law on a
case-by-case basis when determining whether to approve a State program
to ensure that the State adequately ``provides for, encourages, and
assists'' public participation in the section 404 permitting process.
EPA would also look to the State Attorney General to provide a
statement that the laws of the State meet the requirements of the
regulation. See 40 CFR 233.12.
Standing to judicially challenge permits should be distinguished
from requirements that potential litigants must exhaust administrative
remedies to preserve their opportunity to bring judicial challenges.
This proposed amendment would not affect the ability of States to
require that potential litigants must exhaust administrative remedies
to preserve their opportunity to bring judicial challenges, including
by participating in the submittal of public comments, or similar
reasonable requirements.
EPA is not proposing that this requirement apply to Tribes,
consistent with EPA's approach in the parallel

[[Page 55301]]

section 402 provision that ``[t]his requirement does not apply to
Indian Tribes'' as well as EPA's decision not

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