[Federal Register Volume 61, Number 90 (Wednesday, May 8, 1996)]
[Rules and Regulations]
[Pages 20972-20980]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11328]
[[Page 20971]]
_______________________________________________________________________
Part IV
Environmental Protection Agency
_______________________________________________________________________
40 CFR Part 123
Amendment to Requirements for Authorized State Permit Programs Under
Section 402 of the Clean Water Act; Final Rule
Federal Register / Vol. 61, No. 90 / Wednesday, May 8, 1996 / Rules
and Regulations
[[Page 20972]]
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 123
[FRL-5500-9]
RIN 2040-AC43
Amendment to Requirements for Authorized State Permit Programs
Under Section 402 of the Clean Water Act
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
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SUMMARY: EPA is amending the regulations concerning the minimum
requirements for federally authorized State permitting programs under
Section 402 of the Clean Water Act. This amendment will explicitly
require that all States that administer or seek to administer a program
under this part must provide an opportunity for judicial review in
State Court of final permit decisions (including permit approvals and
denials) that is sufficient to provide for, encourage, and assist
public participation in the permitting process. A State will meet this
standard where State law allows an opportunity for judicial review that
is equivalent to that available to obtain judicial review in federal
court of federally-issued NPDES permits. A State will not meet this
standard if it narrowly restricts the class of persons who may
challenge the approval or denial of State-issued permits.
This rule is being issued because EPA has become aware of instances
in which citizens are barred from challenging State-issued permits
because of restrictive standing requirements in State law. The current
regulations setting minimum requirements for State 402 permit programs
do not explicitly address this problem. EPA believes this is a gap in
the regulations setting minimum requirements for State 402 programs
that needs to be addressed.
Today's rule is intended to ensure effective and meaningful public
participation in the permit issuance process by establishing a minimum
level of public participation among State water pollution control
programs. When citizens have 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, is
enhanced. This rule will promote effective and meaningful public
participation and will minimize the possibility of unfair and
inconsistent treatment of similarly situated people potentially
affected by State permit decisions.
This requirement does not apply to Indian Tribes. EPA will decide
at a later time whether it should be extended to Tribes.
EFFECTIVE DATE: This rule is effective on June 7, 1996. Under EPA's
State 402 program rules, States will have up to two years to adopt
legislative changes, if necessary, to meet this requirement and
maintain federal program authorization.
FOR FURTHER INFORMATION CONTACT: Robert Klepp, Office of Wastewater
Management (OWM), Permits Division (4203), Environmental Protection
Agency, 401 M Street, S.W., Washington, D.C. 20460, (202) 260-5805.
SUPPLEMENTARY INFORMATION:
Regulated Entities
Entities potentially regulated by this action are authorized State
programs.
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Examples of regulated
Category entities
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State Government.......................... State NPDES Permit Issuing
Authorities.
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This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be regulated by this
action. This table lists the types of entities that EPA is now aware
could potentially be regulated by this action. Other types of entities
not listed in the table could also be regulated. To determine whether
your organization is likely to be regulated by this action, you should
carefully read the applicability language of today's rule. If you have
any questions regarding the applicability of this action to a
particular entity, consult the person listed in the preceding FOR
FURTHER INFORMATION CONTACT section.
Information in this preamble is organized as follows:
I. Summary and Explanation of Today's Action
1. Background
2. Rationale and Authority
a. Restrictive Standing Requirements In States
b. Policy Concerns With Restrictive Standing Provisions
c. Legal Authority
3. Regulatory Language
4. Exhaustion of Administrative Remedies
5. Consideration of Alternatives
6. Time Period for Compliance
II. Summary of Response to Comments
1. EPA Authority to Require Standing
2. Judicial Review is Distinct from Public Participation
3. Rule would Impermissibly Affect State Sovereignty
4. Potential Conflicts with the Tenth Amendment
5. The Potential for Waste and Abuse of Judicial Resources
6. Suggested Revisions
7. Time Frame for Compliance
8. Indian Tribes
9. Virginia-specific Issues
10. Impact of the Rule
11. Support for the Rule
III. Administrative Requirements
1. Compliance with Executive Order 12866
2. Unfunded Mandates Reform Act and Compliance with Executive
Order 12875
3. Paperwork Reduction Act
4. Regulatory Flexibility Act
I. Summary and Explanation of Today's Action
1. Background
Congress enacted the Clean Water Act, 33 U.S.C. 1251 et seq.
(``CWA'' or ``the Act''), ``to restore and maintain the chemical,
physical, and biological integrity of the Nation's waters.'' Section
101(a), 33 U.S.C. 1251(a). To achieve this objective, the Act
authorizes EPA, or a State approved by EPA, to issue permits
controlling the discharge of pollutants to navigable waters. Section
402(a)(1), 33 U.S.C. 1342(a)(1). A State that wishes to administer its
own permit program for discharges of pollutants, other than dredged or
fill material, to navigable waters may submit a description of the
program it proposes to administer to EPA for approval according to
criteria set forth in the statute. Section 402(b), 33 U.S.C. 1342(b).
EPA's regulations at 40 CFR Part 123 establish minimum requirements
for federally authorized State permit programs under Sec. 402 of the
CWA. Today, EPA is adding language to Part 123 that makes it clear that
States that administer or seek to administer authorized 402 permitting
programs must 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 of federally-issued permits in
federal court (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, or if persons must
demonstrate injury to a pecuniary interest in order to obtain judicial
review, or if persons must have
[[Page 20973]]
a property interest in close proximity to a discharge or surface waters
in order to obtain judicial review). States are free under today's rule
to impose reasonable requirements that administrative remedies be
exhausted in order to preserve the opportunity to challenge final
permitting actions in State court. This rule does not apply to Tribal
programs. EPA will decide at a later time whether it should be extended
to Tribes.
2. Rationale and Authority
a. Restrictive Standing Requirements In States. EPA has become
aware of instances in which citizens are barred from challenging State-
issued permits because of restrictive standing requirements in State
law. EPA believes this is a gap in the regulations setting minimum
requirements for State 402 permit programs that needs to be addressed.
In 1993, a coalition of environmental groups filed two petitions
requesting that EPA withdraw the Virginia State 402 permit program,
citing a limitation on citizen standing, among other alleged
deficiencies. In particular, they alleged that recent changes in the
law in the State of Virginia had significantly narrowed the public's
opportunity to challenge State-issued 402 permits. Virginia's State
Water Control Law, the State law under which Virginia's authorized
program is administered, authorizes only an ``owner aggrieved'' to
challenge permits in court. VA Code 62.1-44.29.1 The petitioners
alleged that in 1990, the Virginia legislature amended and narrowed the
statutory definition of ``owner.'' They also alleged that under three
opinions of the Virginia Court of Appeals, only a permittee has
standing to challenge the issuance or denial of a 402 permit in State
court. Environmental Defense Fund v. State Water Control Board, 12 Va.
App. 456, 404 S.E.2d 728 (1991), reh'g en banc denied, 1991 Va. App.
LEXIS 129; Town of Fries v. State Water Control Board, 13 Va. App. 213,
409 S.E.2d 634 (1991). See Citizens for Clean Air v. Commonwealth, 13
Va. App. 430, 412 S.E.2d 715 (1991)(interpreting similar language in
Virginia Air Pollution Control Law). They alleged that under these
three decisions, riparian landowners, local governments that wish to
draw drinking water from the waters in question, downstream permittees,
local business and property owners' associations, local civic
associations, and environmental organizations whose members use the
waters in question may not challenge a State-issued permit in State
court.
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\1\ EPA notes that in April 1996, the Virginia legislature
passed a bill that would amend certain Virginia statutes, including
the Water Control Law, with respect to the availability of judicial
review. EPA is assessing the impact of the bill, which is not yet
effective as law.
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When EPA issued the regulations that delineate the elements of an
approvable program, EPA did not contemplate that State law might limit
the opportunity for interested citizens to challenge final permit
decisions in State court to such a degree that it is substantially
narrower than the opportunity afforded under Sec. 509 of the Clean
Water Act to challenge federally-issued permits, or to the point that
adequate and effective public participation in the permit issuance
process would be compromised. EPA now believes that this is the case in
at least a limited number of States and, thus, believes it needs to
specify standing requirements in Part 123.
b. Policy Concerns With Restrictive Standing Provisions. EPA
believes that the ability to judicially challenge permits is an
essential element of public participation under the Clean Water Act.
Permits issued under Sec. 402 (also known as National Pollutant
Discharge Elimination System or NPDES permits) fall within the broad
range of processes that are subject to the Congressional directive of
Sec. 101(e) that public participation be ``provided for, encouraged,
and assisted by the Administrator and the States.'' Permits are a
critical means of implementing the requirements and objectives of the
Clean Water Act because they establish specific effluent limitations
applicable to individual dischargers covered by the permits.
As EPA noted when it proposed today's rule on March 17, 1995 (60 FR
14588), when citizens are denied 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
seriously compromised. If citizens perceive that a State administrative
agency is not addressing their concerns about 402 permits because the
citizens have no recourse to an impartial judiciary, that perception
has 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 a paper exercise. State officials
will inevitably spend less time considering and responding to the
comments of parties who have no standing to sue, but will be more
attentive to the comments of parties who can challenge the
administrative decision in court.
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.'' Virginia v. Browner, No.
95-1052, slip op. at 17 (4th Cir. March 26, 1996) (upholding EPA's
denial of Virginia's proposed permitting program under Title V of the
Clean Air Act). The Fourth Circuit quoted from EPA's March 17, 1995
proposal to support that conclusion. Other courts also have recognized
broadly that meaningful and adequate public participation is an
essential part of a State program under Section 402. See e.g., Natural
Resources Defense Council v. EPA, 859 F.2d 156, 175-78 (D.C. Cir. 1988)
(approving Part 123 regulations regarding citizen intervention in State
enforcement actions); Citizens for a Better Environment v. EPA, 596
F.2d 720, reh'g denied, 596 F.2d 725 (7th Cir. 1979) (invalidating EPA
approval of a State program in the absence of prior promulgation of
guidelines regarding citizen participation in State enforcement
actions).
These points are reinforced by comments received regarding the
proposed rule. As described in more detail in the response to comments
document that is included in the rulemaking record, many comments
received by EPA expressed concerns that a State's failure to provide
standing for non-dischargers to seek judicial review of permits creates
an uneven playing field that may result in:
A failure by a State permitting agency to adequately
consider comments by citizens because it is not judicially accountable
to them, while at the same time giving undue deference to those of a
discharger who may bring an action in court;
A reduction in public participation in the permit process
because such participation is perceived as fruitless; and
A government that is perceived by its citizens to be
distant and unaccountable.
Moreover, the lack of adequate public participation increases the
likelihood that States may issue permits with limits and conditions
that are inadequate to protect the environment because permit writers
will not have the benefit of the valuable insights and
[[Page 20974]]
information provided by public participants. Finally, today's rule also
effectuates EPA's strong policy interest in deferring to State
administration of authorized NPDES programs. EPA firmly believes that
States should implement the NPDES program in lieu of the federal
government. However, EPA just as firmly believes that the opportunity
for citizen participation is a vital component of a State NPDES
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 both substantively adequate and procedurally fair.
Because this rule will provide additional assurance of State program
adequacy and fairness, it will allow EPA to exercise less oversight of
State programs and allow more State autonomy in implementing NPDES
programs.
c. Legal Authority. EPA believes it has authority under the Clean
Water Act to promulgate today's rule. Section 101(e) of the CWA
provides, in part:
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.
This language explicitly directs that both the Administrator and
the States must provide for, encourage, and assist public participation
in the development of any ``regulation, standard, effluent limitation,
plan, or program'' established under the Act. Section 101(e) also
requires that EPA, ``in cooperation with the States, shall develop and
publish regulations specifying minimum guidelines for public
participation in such processes.''
As EPA noted in the preamble to the March 17, 1995 proposed rule,
Congress included the provisions relating to public participation in
Section 101(e) because 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 (emphasis added).
The Senate Report observed further 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 Senate Report at 72, 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 Section 101(e) as applying ``across the board.''
1972 Legis. Hist. at 108. See also id. at 249.
The Act reinforces the importance of the directive in Sec. 101(e)
by reiterating it repeatedly. See e.g., Sec. 402(b)(3) (State permit
programs must provide for public notice and an opportunity for hearing
before a State issues an NPDES permit); Sec. 505(a) (``any citizen'' is
authorized to bring enforcement suits); Sec. 303(c)(1) (States are to
hold public hearings in reviewing and revising State water quality
standards); Sec. 319 (a)(1) and (b)(1) (States are to notice and take
public comment on nonpoint source management programs); Sec. 320(f)
(public review and comment required on plans for protection of
estuaries).
Other provisions of the Act reinforce and confirm EPA's authority
to promulgate today's rule. First, Sec. 304(i) provides that EPA shall
``promulgate guidelines establishing the minimum procedural and other
elements of any State program'' under Sec. 402. Today's rule specifies
such a requirement. Second, Sec. 501(a) confers general authority on
the Administrator to prescribe such regulations as are necessary to
carry out her functions under the CWA. EPA believes it must heed the
command of Sec. 101(e) in carrying out the general authority provided
by Secs. 304(i) and 501(a). Finally, Sec. 402(b)--the provision that
establishes the statutory standards applicable to the approval of State
permitting programs by the Administrator--itself contains an explicit
requirement for public participation in the development of State
permits. Section 402(b)(3) provides that EPA may disapprove a State
NPDES program if adequate authority does not exist ``to insure that the
public * * * receive notice of each application for a permit and to
provide an opportunity for public hearing before a ruling on each such
application'' (emphasis added). Section 402(b)(3) must be interpreted
in light of the command of Sec. 101(e) that public participation be
``provided for, encouraged, and assisted by the Administrator and the
States.'' Especially in light of Sec. 101(e), it is inconceivable that
Congress intended the public hearing required by Sec. 402(b)(3)--and
other forms of public participation in the State administrative
process--to be a meaningless exercise.
Thus, EPA believes it has authority to specify reasonable State
court judicial review requirements for purposes of NPDES State program
approval in order to ensure that the administrative process serves its
intended purpose. Today's rule will help ensure a minimum level of
public participation among State water pollution control programs and
minimize the possibility for unfair and inconsistent treatment of
similarly situated people potentially affected by State permit
decisions. It will reduce pressures on States to compete against each
other in a downward spiral towards less effective and overly
restrictive judicial review provisions in State permit programs. At the
same time, it will help to ensure that similar pollution sources in
different States will be treated fairly and consistently.
3. Regulatory Language
The language of today's final rule differs from the language
proposed on March 17, 1995. The proposed language would have required
that ``[a]ll States that administer or seek to administer a program
under this part must provide any interested person an opportunity for
judicial review in State Court of the final approval or denial of
permits by the State.'' The language of the proposal was based on
Sec. 509(b)(1) of the Clean Water Act, which provides that ``any
interested person'' may obtain judicial review in the United States
Court of Appeals of the Administrator's action in issuing or denying
any permit under Sec. 402 of the Clean Water Act. The intent of the
proposal was to provide for meaningful public participation before the
State permitting agency by ensuring that ``any interested person'' has
the opportunity to judicially challenge final
[[Page 20975]]
action on State-issued permits to the same extent as if the permit were
federally issued.
As is noted elsewhere in this preamble, a number of commenters
(including several States) argued that the Clean Water Act does not
authorize EPA to specify any standing requirement applicable to State
402 programs, or to impose the federal standing provisions contained in
Sec. 509 upon the States. Other commenters argued that EPA could
provide for meaningful public participation before the State permitting
agency without going so far as to prescribe that ``any interested
person'' must be afforded standing by the States. Some of these
commenters (including several States) stated that the proposed language
was too rigid because a State might provide for meaningful public
participation in the administrative process before the State permitting
agency even though it does not precisely meet the ``any interested
person'' test laid out in the proposal.
After considering these and related comments on the proposal, EPA
decided to adopt a more flexible, functional test that is tied directly
to the mandate of Sec. 101(e). Today's rule provides that States
seeking to administer an authorized program under Sec. 402 of the Clean
Water Act must 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 certainly 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 federally-issued NPDES
permit. As noted above and in the preamble to the proposed rule,
Sec. 509(b)(1) 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.
The majority of decisions on standing under the Clean Water Act and
other environmental statutes have held that plaintiffs must at least
satisfy the requirements of Article III. See, e.g., NRDC v. Texaco Ref.
& Mktg., Inc., 2 F.3d 493, 505 (3d Cir. 1993); NRDC v. Watkins, 954
F.2d 974, 978 (4th Cir. 1992). As interpreted by the United States
Supreme Court, the standing requirement of Article III contains three
key elements:
[A]t an irreducible minimum, Art. III requires the party who
invokes the court's authority to ``show that he personally has
suffered some actual or threatened injury as a result of the
putatively illegal conduct of the defendant,''* * * and that the
injury ``fairly can be traced to the challenged action'' and ``is
likely to be redressed by a favorable decision * * *''
Valley Forge Christian College v. Americans United for Separation
of Church and State, Inc., 454 U.S. 464, 472 (1982) (citations
omitted). See also Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61
(1992).
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, 405 U.S. at 734-35, that harm to an economic interest
is not necessary to confer standing. Harm to an aesthetic,
environmental, or recreational interest is sufficient, provided that
the party seeking judicial review is among the injured. This holding
was most recently reaffirmed by the Supreme Court in Lujan v. Defenders
of Wildlife, 504 U.S. at 562-63 (``[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.'').
On the other hand, today's rule also provides 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 the regulation itself makes clear, these are only examples of such
deficiencies in State programs. EPA believes that if State law does not
allow broad standing to judicially challenge State-issued NPDES
permits--including standing based on injury to aesthetic,
environmental, or recreational interests--the opportunity for judicial
review will be insufficient to ensure that public participation before
the State permitting agency will serve its intended purpose. See
Virginia v. Browner, No. 95-1052, slip op. at 16-18 (4th Cir. March 26,
1996). At a minimum, ordinary citizens should be in a position of
substantial parity with permittees with respect to standing to bring
judicial challenges to State permitting decisions.
EPA will examine the opportunities for judicial review of State-
issued 402 permits that are provided by State law, on a case-by-case
basis, to determine whether or not the State adequately ``provides for,
encourages, and assists'' public participation in the NPDES permitting
process. EPA will look to the State Attorney General to provide a
statement that the laws of the State meet the requirements of today's
rule. 40 CFR 123.23.
Today's rule applies to final actions with respect to modification,
revocation and reissuance, and termination of permits, as well as the
initial approval or denial of permits.
4. Exhaustion of Administrative Remedies
Standing to judicially challenge permits should be distinguished
from a requirement that potential litigants must exhaust administrative
remedies in order to preserve their opportunity to bring judicial
challenges. For example, federal regulations require that all persons
must raise reasonably ascertainable issues during the public comment
period on a draft 402 permit (40 CFR 124.13). Interested persons must
request an evidentiary hearing on a permit decision they wish to
challenge (40 CFR 124.74). Today's proposal does not affect the
authority of States to adopt similar, reasonable requirements.
5. Consideration of Alternatives
In addition to the proposed approach (which would have required
that State law provide any ``interested person'' an opportunity to
challenge the approval or denial of 402 permits issued by States in
State court), EPA also considered as an alternate approach, amending
Part 123 to require that State law must provide an opportunity for
judicial review of a final State permit action to permit applicants and
any person who participated in the public comment process. EPA
solicited comments on that approach. One commenter endorsed this
alternate approach as a way to ensure that access to courts is limited
to those who participated in the administrative process.
After considering that and related comments, EPA decided to adopt a
more flexible, functional test that is tied directly to the mandate of
Sec. 101(e). This functional test and reasons for EPA's adoption of
today's rule are described in more detail above at I.3. However, this
rule does not affect States' ability to
[[Page 20976]]
adopt reasonable requirements that interested persons exhaust available
administrative remedies, including participating in the submittal of
public comments, to preserve their opportunity to challenge final
permitting actions in State court.
6. Time Period for Compliance
Any approved State section 402 permit program which requires
revision to conform to this part shall be so revised within one year of
the date of promulgation of this regulation, unless a State must amend
or enact a statute in order to make the required revision, in which
case such revision shall take place within 2 years. New States seeking
EPA authorization to operate the NPDES program must comply with this
regulation at the time authorization is requested. This is consistent
with current requirements for State programs found at Sec. 123.62(e).
In the March 17, 1995 proposal, EPA requested comment on whether a
shorter time frame should be imposed than what is provided at
Sec. 123.62(e) to comply with this regulation.
Commenters were divided on the issue of the time frame for
implementation. One commenter expressed concern that the two-year time
frame is too short and does not allow enough time for a legislature to
amend its rules in a reasoned and thoughtful manner. Another noted that
a State would require a full two years to enact legislative changes and
additional time to engage in administrative rulemaking, including
providing public notice and conducting a hearing, to determine the
level of participation that constitutes an ``interested person'' as
proposed. Yet another commenter indicated that States would require a
minimum of three years following promulgation to comply with the rule
to have sufficient time to develop, adopt, implement, and receive EPA
approval.
Other commenters stated that the two-year time frame is too long
and that compliance with the rule should be undertaken immediately or,
if a State needs to amend its statute, within the first legislative
session. Another commenter added that a 1-2 year compliance period is
unnecessary since legislation needed to comply with the rule is simple,
straightforward and easily accomplished.
While EPA believes it has adequate authority under the CWA to
impose a shorter time frame than that imposed under 40 CFR
Sec. 123.62(e), the Agency believes that the 1-2 year compliance period
as required under its existing regulations is the most appropriate time
frame for this rule because it provides States with adequate time to
make necessary changes while taking into account the need for
legislative action.
II. Summary of Response to Comments
A number of comments were received in response to the March 17,
1995 proposal. EPA's full response to those comments is provided in the
response to comments document included in the record for this
rulemaking. However, EPA has summarized its response to some of the
major comments below.
1. EPA Authority to Require Standing
A number of commenters asserted that the Clean Water Act does not
provide EPA with authority to prescribe State court judicial review
requirements for NPDES permits. For the reasons set forth above, and as
further detailed in the response to comments document, EPA believes
that it has authority under the Clean Water Act to promulgate today's
rule.
2. Judicial Review is Distinct from Public Participation
Commenters also contended that judicial review and public
participation are not the same and treated differently in the CWA and
applicable regulations. Thus, EPA may not impose judicial standing
requirements to resolve public participation concerns.
For reasons set forth above and as further detailed in the response
to comments document, EPA believes broad standing to challenge permits
in court to be essential to meaningful public participation in NPDES
programs. See Virginia v. Browner, No. 95-1052, slip op. at 17 (4th
Cir. March 26, 1996).
3. Rule would Impermissibly Affect State Sovereignty
Commenters stated that the proposed rule would require that a State
waive its sovereign immunity in a manner dictated by EPA in order to
obtain approval of its NPDES program. Commenters argued that this is
impermissible unless Congress has made its intent to do so unmistakably
clear in the language of the Clean Water Act (the ``plain statement
rule''). Gregory v. Ashcroft, 501 U.S. 452, 460 (1991); Will v.
Michigan Dep't of State Police, 491 U.S. 58 (1989); Atascadero State
Hospital v. Scanlon, 473 U.S. 234, 242 (1985). They stated that the
Clean Water Act does not contain such a ``plain statement.''
Today's rule does not impermissibly impinge on a State's sovereign
immunity, nor does the ``plain statement rule'' have any application
here. This is because States voluntarily assume the NPDES program.
Section 402 of the CWA provides that States that wish to obtain
authorization from EPA to implement the NPDES program requirements may
apply to EPA and, where they meet the requirements of Sec. 402, be
approved to operate a permit program in lieu of the federal program.
States seek this authorization voluntarily, based on State interests;
there is no mandate that they do so. However, in choosing to regulate
in lieu of the federal government, a State must meet federal
requirements set forth in the CWA and implementing regulations. These
requirements will now include an explicit standing requirement. If a
State finds any of these conditions for federal approval unacceptable,
the State may decline the opportunity to implement the NPDES program
and leave such implementation to the federal government. The Supreme
Court has held that Congress may offer the States the choice of
regulating an activity according to federal standards or having State
law preempted by federal regulation (New York v. U.S., 505 U.S. 144,
167 (1992) (specifically referring to the Clean Water Act); Hodel v.
Virginia Surface Mining & Reclamation Assn., Inc., 452 U.S. 264, 288
(1981)).
Similarly, the ``plain statement rule'' applied in such cases as
Gregory v. Ashcroft, 501 U.S. 452 (1991), does not apply where Congress
has provided a choice for the States. As the Court stated in Gregory,
the requirement that Congress clearly state its intent to preempt
traditional State sovereign powers ``is nothing more than an
acknowledgment that the States retain substantial sovereign powers
under our constitutional scheme, powers with which Congress does not
readily interfere.'' Id. at 461. It is a rule of interpretation
designed to avoid a potential constitutional problem. Here, however, as
discussed above, there is no constitutional dilemma.
Because today's rule will be imposed only on States that
voluntarily seek authorization (or choose to retain authorization) for
a permit program under Sec. 402, it does not interfere with State
powers. Thus, no ``plain statement'' of Congressional intent is
necessary. In any case, this rule has a minimal effect upon State
standing, because it applies only to administration of the federally
authorized State NPDES program, but does not affect State standing
requirements in any other respect.
[[Page 20977]]
4. Potential Conflicts with the Tenth Amendment
Some commenters also argued that the proposal is suspect under the
Tenth Amendment because it would expand the standing rights already
afforded by State law, contrary to FERC v. Mississippi, 456 U.S. 742
(1982) (standing and appeal provisions of Public Utilities Regulatory
Policies Act of 1978 upheld only because they did not expand standing
rights afforded by State law).
For reasons similar to those explained in paragraph 3 above, the
Agency does not believe this rule is suspect under the Tenth Amendment.
The CWA is a federal program that draws on Commerce Clause authority to
require nationwide adherence to federal standards protecting water
quality. Section 402 of the CWA provides that States that wish to
obtain authorization from EPA to implement the NPDES program
requirements may apply to EPA and, where they meet the requirements of
Sec. 402, be approved to operate a permit program in lieu of the
federal program. Similarly, to retain authorization, States must
continue to meet federal requirements, including the new one
promulgated today. States seek this authorization voluntarily. As noted
above, the Supreme Court has held that Congress may offer the States
the choice of regulating an activity according to federal standards or
having State law preempted by federal regulation. New York, Hodel.
Because States voluntarily choose to assume responsibility for the
Sec. 402 program, this rule does not require that States expand their
standing rights.
The commenter's reliance on FERC v. Mississippi is misplaced. In
fact, FERC supports the legality of today's rule. As in New York and
Hodel, the FERC Court upheld federal conditions on State implementation
of a federal program, including procedural requirements, on the grounds
that the federal law in question, like the Clean Water Act, allowed
States the choice to regulate according to federal requirements or
leave implementation to the federal government. Recently, the U.S.
Court of Appeals for the Fourth Circuit upheld a standing rule under
the Clean Air Act (CAA) against similar Tenth Amendment challenges by
the Commonwealth of Virginia. The Court found that the CAA did not
compel States to modify their standing rules but merely induced them to
do so through financial sanctions and imposition of federal
requirements; this was found to not violate the Tenth Amendment.
Virginia v. Browner, No. 95-1052, slip op. (4th Cir. March 26, 1996).
5. The Potential for Waste and Abuse of Judicial Resources
One commenter stated that Congress has expressed concern about the
potential for waste and abuse involving State judicial resources (e.g.,
being subject to harassing lawsuits) that could result from the
proposed rule. (1972 Legis. Hist. at 467.)
Today's rule does not encourage harassing lawsuits. Instead, it
effectively balances the CWA's strong policy favoring public
participation in the development of water pollution controls (see CWA
Sec. 101(e)) with the policy to recognize, preserve, and protect the
primary rights and responsibilities of the States to prevent, reduce,
and eliminate pollution (see CWA Sec. 101(b)). The rule ensures that
citizens will be able to influence State permitting decisions through
public participation as Congress intended. In addition, States may
impose reasonable requirements that prospective plaintiffs exhaust
administrative remedies in order to preserve their opportunity to
challenge State-issued permits in State court.
In addressing comments on the proposed rule, EPA surveyed a number
of States that provide citizen standing to challenge permits in State
court (Connecticut, New Jersey, Maryland, Georgia, Michigan, Iowa,
Colorado, California, and Washington) concerning the frequency of
judicial permit appeals as compared to the total number of permits
issued by the States in the last five calender years. EPA found the
frequency of such judicial appeals to be very low particularly when
compared to the total number of permits issued by those States. Four
States (Iowa, Maryland, Michigan, and Connecticut) reported that they
each had one permit judicially appealed within the last five years. The
number of permits issued by each of those States during that time
ranged from 116 (for Connecticut) to 1175 (for Iowa). Other States
reported similar rates of State permit judicial appeals. EPA has also
found very low rates of judicial permit appeals for NPDES permits that
it issues in States that have not been authorized to issue NPDES
permits. Finally, a number of commenters supported EPA's statement in
the proposed rule that the Agency did not expect that any significant
portion of permits would be challenged in State courts. See 60 FR at
14591. This information confirms EPA's belief that this rule will not
impose a discernable burden on State judicial resources.
6. Suggested Revisions
Several commenters noted that the rule must clearly reflect the
proper limits of standing to sue. In response to this and other related
comments, EPA has decided not to specify, as proposed, that ``any
interested person'' must be provided an opportunity for judicial review
of State-issued permits in State court. Instead, the Agency has adopted
a more flexible, functional final rule that is tied directly to the
statutory language of Sec. 101(e).
The final rule provides that States that administer or seek to
administer an authorized NPDES program must provide an opportunity for
judicial review in State court of State permitting decisions 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 federally-
issued permits. States may demonstrate to EPA that even if their
standing rules are not the same as these federal standing provisions,
they are nevertheless broad enough to provide for, encourage, and
assist public participation in the administrative process before the
State permitting agency. 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 is able to
obtain judicial review, or if a person must have a property interest in
close proximity to a discharge or surface waters in order to obtain
judicial review, or if the State requires that persons demonstrate
injury to a pecuniary interest in order to obtain judicial review).
(``A plaintiff need not show `pecuniary harm' to have Article III
standing; injury to health or to aesthetic, environmental, or
recreational interests will suffice.'' Virginia v. Browner, No. 95-
1052, slip op. at 17 (4th Cir. March 26, 1996), citing United States v.
Students Challenging Regulatory Agency Procedures (SCRAP), 412 U.S.
669, 686-87 (1973); Sierra Club v. Morton, 405 U.S. 727, 734 (1972).)
EPA believes this approach will ensure the meaningfulness of public
participation in the State permitting process, without prescribing a
specific level of standing that all States must afford. Therefore, it
should affect even fewer States than the proposal.
7. Time Frame for Compliance
This issue is addressed above.
[[Page 20978]]
8. Indian Tribes
EPA did not propose to subject Indian permitting programs under
Sec. 402 to the requirements of today's rule. However, EPA did solicit
comment on this issue. Commenters raised several concerns with regard
to the treatment of Indian Tribes under the proposal. A few commenters
requested that the exemption for Tribes be removed from the rule and
stated that to exclude Tribes would be ``outside the realm'' of the
CWA. These commenters stated that Tribes should be treated as States
under CWA Sec. 518(e) and should not be exempted from the rule. Others
suggested that one alternative for addressing Tribal NPDES permits is
to use EPA's objection authority contained in CWA Sec. 402(d). One
commenter added that the rule is unnecessary with respect to Tribes
because Tribes have already provided for public participation,
including authorizing judicial review of Tribal administrative actions.
The Agency is not subjecting Tribal permitting programs under Sec. 402
to the requirements of this rule for the time being, as discussed in
the proposal and in more detail in the response to comments document.
The Agency will make a final determination at a later time whether to
extend the requirements of today's rule to Indian Tribes.
With regard to the suggestion that EPA use its objection authority
to oversee Tribal permit decisions, EPA does not agree that it should
use its authority to review permits prior to issuance as a substitute
for public participation in the permitting process. With respect to the
necessity of this rule for Tribes, EPA appreciates that some Indian
Tribes already provide for the participation of interested or aggrieved
parties in permitting matters. While EPA does not as a general matter
feel that Tribal procedures should be less rigorous with respect to
public participation than State procedures, this rule does raise
special issues regarding Federal Indian policy and law which EPA is
still assessing. EPA may propose regulatory action in the future with
respect to judicial review of Tribally-issued NPDES permits. This rule,
however, would not preclude a Tribe from voluntarily including a
judicial review process as part of its program application.
9. Virginia-Specific Issues
Some commentators raised the issue that this rule singles out the
Commonwealth of Virginia, and that EPA is proposing this rule to avoid
the process of deciding on a petition to withdraw Virginia's NPDES
authorization. Based on general information, EPA believes that there
may be a small number of States in addition to Virginia that have
restrictive standing laws pertaining to State judicial review of State-
issued NPDES permits. In addition, several other States have indicated
in comments to the rule that they may have to revise their current
program regulations in response to the proposal. Although today's rule
provides more flexibility for State programs with respect to standing
requirements than the proposal, EPA believes that a small number of
States in addition to Virginia might need to revise their programs to
comply with the final rule.
EPA has chosen to proceed with this rulemaking because the Agency
believes that adequate public participation in authorized State NPDES
permitting programs is fundamental to the effective implementation of
the CWA, and that limitations or potential limitations upon such
participation are best addressed through a regulation that will help
ensure an appropriate opportunity for public participation in all
authorized States. With respect to the Virginia withdrawal petition, it
is EPA's view that the appropriate mechanism for addressing the citizen
standing issues raised in that petition is to clarify the fundamental
elements of effective public participation programs in a rulemaking.
Other issues raised in the petition concerning the Virginia NPDES
program will be resolved in a separate proceeding.
One commenter stated that Virginia citizens are given full and
serious consideration when administrative decisions are made on permit
conditions. This commenter added that judicial standing is granted to
those who can demonstrate injury. Another stated that Virginia law does
not imply a restriction on third-party private property rights; rather,
third parties have a right to bring a claim before State court if their
property is damaged or they are otherwise harmed by a permitted
activity.
As discussed in more detail above, EPA has reason to believe that
Virginia does not provide for an effective public participation program
because it restricts standing to judicially contest final State-issued
permits to the discharger.2 Numerous commenters supported this
concern, which they asserted results in a situation where citizen
comments do not need to be taken seriously or can be ignored since
citizens have no ability to challenge permits in court. In any case,
today's rule is not about a single State or State program; rather, the
rule is intended to ensure that all authorized NPDES programs provide
the judicial standing necessary to ensure effective public
participation in the permitting program. Moreover, today's rule does
not require that a State meet a single standing formula; rather, a
State must demonstrate that its access to courts is sufficiently broad
to ensure adequate public participation in the permitting process.
---------------------------------------------------------------------------
\2\ See footnote 1.
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10. Impact of the Rule
Some commenters also questioned the impact of today's rule. One
commenter stated that EPA must conduct a regulatory impact analysis
(RIA) and request Office of Management and Budget review in accordance
with E.O. 12866 or withdraw the rule. This commenter noted that the
rule meets the definition of ``significant regulation'' and therefore
must be assessed in an RIA. Another commenter stated that the rule
affects small entities and EPA must prepare a Regulatory Flexibility
Analysis. One commenter stated that further analysis is necessary to
assess the potential impact of the rule.
EPA does not believe that the rule meets the definition of a
significant regulatory action, as defined in E.O. 12866. The rule
potentially impacts only very few States and is consistent with and
effectuates the public participation provisions of the CWA. OMB has
determined that this rule is not a ``significant regulatory action''
under the terms of E.O. 12866 and is therefore not subject to its
review. With regard to the need for a Regulatory Flexibility Analysis,
EPA notes that the rule applies to States with authorization to
administer the NPDES permit program, and States are not considered
small entities under the Regulatory Flexibility Act. Nor does the
Agency believe that the rule will have a significant impact on small
businesses due to the potential for such businesses to incur increased
litigation costs. As described in more detail in responses to
individual comments in the record for this rulemaking, EPA's experience
with States that already provide broad standing to challenge permits
indicates that ensuring appropriate criteria for standing in the few
States that now unduly limit it will not result in a significant
portion of permits being challenged in State court. Thus, a Regulatory
Flexibility Analysis is not necessary.
Nothing in this rule or preamble should be construed as addressing
the
[[Page 20979]]
standing of citizen plaintiffs under Secs. 309 or 505 of the Clean
Water Act.
11. Support for the Rule
Numerous commenters supported some or all of the rule. Many of them
agreed with the Agency's proposal to include language stating that
``any interested person'' should be able to appeal pollutant discharge
permits in State court. These commenters viewed the rule as necessary
to ensure meaningful public participation, in the permitting process.
As described above, EPA has chosen to not require that States
explicitly adopt an ``interested person'' standard, but instead has
decided to provide flexibility in this area consistent with the need
for effective public participation.
Commenters stated that the rule is necessary to ensure meaningful
public participation and expressed concern that if standing is not
broadened in those States that unduly restrict it, citizen comments
will not be taken seriously or may be ignored since citizens have no
ability to challenge permits in court. Other commenters stated that the
rule is necessary for citizens to challenge permit terms that directly
impact their property rights and valuable State resources. Other
commenters stated that the lack of meaningful public participation has
a direct adverse impact on business. Other commenters stated that the
rule would bring consistency, accountability, and credibility to the
permitting process and significantly improve the quality of the final
permits. EPA has addressed these comments in more detail in the
response to comments document but notes that promulgation of this rule
should address many of the concerns raised by these commenters.
III. Administrative Requirements
1. Compliance with Executive Order 12866
Under Executive Order 12866 (58 FR 51735, October 4, 1993), the
Agency must determine whether the regulatory action is ``significant,''
and therefore subject to review by the Office of Management and Budget
(OMB) and the requirements of the Executive Order. The Order defines
``significant regulatory action'' as one that is likely to lead to a
rule that may:
(1) have an annual effect on the economy of $100 million or more,
or adversely and materially affect a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or State, local, or Tribal governments or communities;
(2) create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
(4) raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
EPA believes that only a very few authorized States may be impacted
by this rule. This rule is consistent with and effectuates the public
participation provisions of the CWA. It has been determined that this
rule is not a ``significant regulatory action'' under the terms of
Executive Order 12866 and is therefore not subject to OMB review. As a
result, the Agency is not conducting a Regulatory Impact Analysis.
2. Unfunded Mandates Reform Act and Compliance With Executive Order
12875
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L.
104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and Tribal
governments and the private sector. Under section 202 of UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for the proposed and final rules with ``federal mandates''
that may result in expenditures to State, local, and Tribal
governments, in the aggregate, or to the private sector, of $100
million or more in any one year. Before promulgating an EPA rule for
which a written statement is needed, Sec. 205 of UMRA generally
requires EPA to identify and consider a reasonable number of regulatory
alternatives and adopt the least costly, most cost-effective or least
burdensome alternative that achieves the objectives of the rule.
In addition, under Sec. 203 of UMRA, before EPA establishes any
regulatory requirements that may significantly or uniquely affect small
governments, including Tribal governments, it must develop a small
government agency plan. The plan must provide for notifying potentially
affected small governments, enabling timely input in the development of
EPA regulatory proposals with significant Federal intergovernmental
mandates, and informing, educating, and advising small governments on
compliance with the regulatory requirements.
The specific provisions of Secs. 202 and 205 of UMRA do not apply
because this rule does not contain any Federal mandates. As discussed
above, the rule does not impose any enforceable duty on any State,
local, or Tribal government or the private sector. Moreover, any duties
arising from this rule are the result of participation in a voluntary
Federal program. States are free to leave NPDES regulation to the
federal government if they find the requirements in today's rule
unacceptable. In any event, no mandates in this rule would result in
the expenditure of $100 million or more in any one year by governmental
or private entities. With respect to Sec. 203 of UMRA, this rule will
impact State governments only; there will be no significant impact or
unique effect on small governments.
EPA did consult with States and Tribes during the proposal and the
public comment period. The Agency contacted each State individually,
seeking its views on the proposal. With regard to Indian Tribes, EPA
also worked with representatives of Tribes as well as through the
Agency's American Indian Environmental Office to assure a full
opportunity for review and comment on the proposal and to ensure an
understanding of Tribal concerns or issues raised by this rulemaking.
3. Paperwork Reduction Act
This rule does not contain information requirements subject to OMB
review under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
4. Regulatory Flexibility Act
Under the Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq.,
EPA must prepare a Regulatory Flexibility Analysis for regulations
having a significant impact on a substantial number of small entities.
This rule applies only to States with authorization to administer
the NPDES permit program. States are not considered small entities
under the RFA. Therefore, pursuant to Section 605(b) of the Regulatory
Flexibility Act, 5 U.S.C. 605(b), I certify that this final rule will
not have a significant economic impact on a substantial number of small
entities.
List of Subjects in 40 CFR Part 123
Environmental protection, Administrative practice and procedure,
Water pollution control.
Dated: May 1, 1996.
Carol M. Browner,
Administrator.
For the reasons set forth in this preamble, part 123, Chapter I of
Title 40 of the Code of Federal Regulations is to be amended as
follows:
[[Page 20980]]
PART 123--[AMENDED]
1. The authority citation for part 123 continues to read as
follows:
Authority: Clean Water Act, 33 U.S.C. 1251 et seq.
2. Section 123.30 is added to read as follows:
Sec. 123.30 Judicial review of approval or denial of 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.
[FR Doc. 96-11328 Filed 5-7-96; 8:45 am]
BILLING CODE 6560-50-P
