[Federal Register Volume 60, Number 67 (Friday, April 7, 1995)]
[Rules and Regulations]
[Pages 17950-17957]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-8209]



      
      

[[Page 17949]]

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Part IV





Environmental Protection Agency





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40 CFR Parts 122 and 124



National Pollutant Discharge Elimination System (NPDES) Permits for 
Storm Water Discharges; Amendment to Requirements; Final Rule and 
Proposed Rule

  Federal Register / Vol. 60, No. 67 / Friday, April 7, 1995 / Rules 
and Regulations  
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[[Page 17950]] 


ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 122 and 124

[FRL-5182-8]
RIN 2040-AC60


Amendment to Requirements for National Pollutant Discharge 
Elimination System (NPDES) Permits for Storm Water Discharges Under 
Section 402(p)(6) of the Clean Water Act

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: Today, EPA is promulgating changes to its National Pollutant 
Discharge Elimination System (NPDES) storm water permit application 
regulations under the Clean Water Act (CWA) to establish a sequential 
application process for all phase II storm water discharges. (Phase II 
storm water discharges include all discharges composed entirely of 
storm water, except those specifically classified as phase I 
discharges. Phase I discharges include discharges issued a permit 
before February 4, 1987; discharges associated with industrial 
activity; discharges from a municipal separate storm sewer system 
serving a population of 100,000 or more; and discharges that EPA or an 
NPDES State/Indian Tribe determine to be contributing to a violation of 
a water quality standard or a significant contributor of pollutants to 
the waters of the United States.) Application deadlines are in two 
tiers. This action will provide the NPDES permitting authority (either 
a State/Indian Tribe or EPA) flexibility to target those phase II 
dischargers that are contributing to a water quality impairment or are 
a significant contributor of pollutants for permitting within the next 
six years. All other phase II dischargers are required to apply for a 
permit only after six years, and only if the phase II regulatory 
program in place at that time requires such applications.
    EPA has also initiated a process by inviting its partners who are 
stakeholders in this matter to assist in the development of additional 
phase II rules, which will be finalized by March 1, 1999. These rules 
will determine the nature and extent of requirements, if any, that will 
apply to the various types of phase II facilities. Both the changes to 
the rules issued today as well as the development of the comprehensive 
phase II program through an inclusionary process is a response by EPA 
to the direction of the President on February 21, 1995, regarding 
regulatory reform.

DATES: This final rule will be effective on August 2, 1995 unless 
significant adverse or critical comments that would cause the Agency to 
change its position are received by June 6, 1995. In accordance with 40 
CFR 23.2, this rule shall be considered final for purposes of judicial 
review at 1 p.m. (Eastern time) on August 2, 1995.

ADDRESSES: Written comments on this rule may be submitted using one of 
two different methods. See SUPPLEMENTARY INFORMATION for information on 
submitting comments.

FOR FURTHER INFORMATION CONTACT: Nancy Cunningham, Office of Wastewater 
Management, Permits Division (4203), Environmental Protection Agency, 
401 M Street, SW, Washington, DC 20460, (202) 260-9535.

SUPPLEMENTARY INFORMATION:

Submission of Comments

    First, comments may be sent to the Comment Clerk, Water Docket 
(Storm Water Phase II Direct Final Rule), MC-4101, Environmental 
Protection Agency, 401 M Street, SW, Washington DC 20460. It is 
requested that an original and one copy of the comments be provided to 
this address. Comments will be considered to be timely if they are 
postmarked by June 6, 1995. Commenters who would like acknowledgment of 
receipt of their comments should include a self-addressed, stamped 
envelope. No facsimiles (faxes) will be accepted.
    In the alternative, EPA will accept comments electronically; EPA is 
experimenting with electronic commenting. Comments should be addressed 
to the following Internet address: [email protected]. 
Electronic comments must be submitted as an ASCII file avoiding the use 
of special characters and any form of encryption. Electronic comments 
will be transferred into a paper version for the official record. EPA 
will attempt to clarify electronic comments if there is an apparent 
error in transmission. Comments provided electronically will be 
considered timely if they are submitted electronically by 11:59 p.m. 
(Eastern time) June 6, 1995. Since this is still experimental, 
commenters may want to submit both electronic comments and duplicate 
paper comments. This document has also been placed on the Internet for 
public review and downloading at the following location: 
gopher.epa.gov.
    A copy of the supporting information for this rule is available for 
review at EPA's Water Docket, Room L-102, 401 M Street, SW, Washington, 
DC 20460. For access to the docket materials, call (202) 260-3027 
between 9 a.m. and 3:30 p.m. (Eastern time) for an appointment.

I. Overview of Today's Action

    Today, EPA is promulgating changes to its NPDES storm water permit 
application regulations under the CWA to establish a commonsense 
approach which will provide for a sequential application process for 
all phase II storm water discharges. Application deadlines are in two 
tiers. To obtain real environmental results earlier, the highest 
priority is being assigned to those phase II dischargers that the NPDES 
permitting authority (either a State/Indian Tribe or EPA) determines 
are contributing to a water quality impairment or are a significant 
contributor of pollutants. These dischargers will be required to apply 
for a permit to the permitting authority within 180 days of receipt of 
notice, unless permission for a later date is granted. This process 
will allow the permitting authority to focus their current efforts on 
those facilities that will produce the greatest environmental benefit 
earlier. All phase II facilities that are not designated shall apply to 
the permitting authority no later than six years from the effective 
date of this regulation, and only if the phase II regulatory program in 
place at that time requires such applications. EPA is also establishing 
application requirements for these discharges, as well as making other 
conforming changes to other portions of its NPDES regulations.
    Today's action is the first step in EPA's approach to develop a 
comprehensive phase II program under Clean Water Act (CWA) section 
402(p)(6) and is consistent with President Clinton's February 21, 1995, 
direction on regulatory reform as well as the Office of Water's 
``National Program Agenda for the Future.'' EPA cannot deal with all 
storm water issues in today's action. Some issues raised by 
stakeholders, such as funding for storm water best management practices 
and certain issues with regard to compliance with water quality 
standards, can only be resolved by legislative action. In fact, EPA 
supported certain statutory changes or clarifications to the storm 
water program last year in President Clinton's Clean Water Initiative. 
Some issues, such as the nature and extent of requirements, if any, 
that will apply to the various types of phase II sources, can be 
resolved through rulemaking. EPA has initiated a process of inviting 
its partners who are stakeholders to participate in development of 
[[Page 17951]] expectations and requirements for more comprehensive 
phase II rules, as well as revisions and refinements to phase I. EPA 
expects stakeholders will consider the lessons learned from the phase I 
storm water program in relooking at the phase I application process and 
requirements. EPA intends to propose those rules by September 1, 1997, 
and finalize those rules by March 1, 1999. If the CWA is amended in a 
manner to deal with these storm water issues, EPA will move to 
expeditiously implement the statutory changes. Today's rulemaking will 
promote the public interest by relieving dischargers of the requirement 
to apply for permits until (1) a phase II program is in place that can 
be defined by regulation or changes to the statute or (2) the 
permitting authority makes an affirmative finding of the need for a 
permit to protect water quality.
II. Background

A. Phase I of the Storm Water Program

The Clean Water Act
    The 1972 amendments to the Federal Water Pollution Control Act 
(referred to as the Clean Water Act) prohibit the discharge of any 
pollutant to navigable waters from a point source unless the discharge 
is authorized by a NPDES permit. While water pollution control measures 
in the United States for industrial process wastewater and municipal 
sewage have had major success, urban and agricultural runoff continue 
to contribute to our Nation's remaining water quality problems. EPA's 
Report to Congress under section 305(b) entitled The National Water 
Quality Inventory, 1992 Report to Congress, provides a national 
assessment of surface water impacts associated with runoff from various 
land uses. The latest report concludes that storm water runoff from a 
number of diffuse sources, including municipal separate storm sewers 
and urban runoff is a leading cause of water quality impairment cited 
by States.
    Section 402(p) was added to the CWA in 1987 to require 
implementation of a comprehensive two-phased approach for addressing 
storm water discharges under the NPDES program. Section 402(p)(1) 
currently prohibits EPA or NPDES States (including Indian Tribes 
authorized to operate the NPDES program) from requiring permits for 
discharges composed entirely of storm water (storm water discharges) 
until October 1, 1994, except for the following five classes of phase I 
storm water discharges specifically listed under section 402(p)(2):
    (a) discharges issued a permit before February 4, 1987,
    (b) discharges associated with industrial activity,
    (c) discharges from a municipal separate storm sewer system serving 
a population of 250,000 or more,
    (d) discharges from a municipal separate storm sewer system serving 
a population of 100,000 or more but less than 250,000,
    (e) discharges that EPA or an NPDES State [or Tribe authorized to 
be treated as a State for this purpose] determine to be contributing to 
a violation of a water quality standard or a significant contributor of 
pollutants to the waters of the United States. (EPA issued guidance on 
August 8, 1990 that included a discussion of designation authority.)
    Under CWA section 402(l)(2), permits are not required for certain 
dischargers, specifically, storm water runoff from mining operations or 
oil and gas facilities * * * if the storm water discharge is not 
contaminated by contact with * * * any overburden, raw material, 
intermediate product, finished product, byproduct, or waste product 
located on the site of such operations. CWA section 502(14) excludes 
agricultural storm water discharges from the definition of point 
source, thereby excluding these discharges from the NPDES permit 
requirement.
    Section 402(p)(3) established requirements for permits issued under 
phase I of the storm water program while section 402(p)(4) established 
statutory deadlines for the initial steps in implementing the phase I 
program.
Phase I Regulatory Program
    EPA promulgated regulations defining application requirements in 40 
CFR 122.26 for phase I storm water discharges on November 16, 1990 (55 
FR 47990). Permits are required for large (over 250,000 population 
served) and medium (100,000-250,000 population served) municipal 
separate storm sewer systems (MS4); storm water discharges issued a 
permit before February 4, 1987; storm water discharges ``associated 
with industrial activity,'' which are identified in the regulations by 
11 specific categories; and those dischargers designated by the NPDES 
State or EPA.
    EPA amended the November 1990 application regulations in various 
respects in 1992 in response to a court ruling in NRDC v. EPA, 966 F.2d 
1292 (9th Cir., 1992) in which EPA established generally applicable 
permit issuance deadlines. In addition, EPA noted that the Agency was 
not requiring permit applications from the two categories of storm 
water discharges associated with industrial activity (construction 
activities disturbing less than 5 acres and light industry without 
exposure to storm water) until application requirements were 
established by regulation. (57 FR 60444, December 18, 1992.)
Phase I Implementation Activities
    The efforts of EPA and the authorized NPDES States to implement the 
phase I storm water program have focused on (1) issuing general permits 
for industrial storm water discharges, (2) reviewing group applications 
for industrial storm water dischargers, (3) publishing a proposed 
multi-sector general permits for storm water discharges from 29 
industrial sectors, (4) reviewing applications and issuing permits for 
municipal separate storm sewer systems, and (5) conducting outreach 
activities.

B. Phase II of the Storm Water Program.

Water Quality Act of 1987 and Later Amendments
    The 1987 amendments established a process for EPA to evaluate 
potential phase II sources and designate sources for regulation to 
protect water quality.
    Section 402(p)(5) requires EPA, in consultation with the States, to 
conduct two studies of storm water discharges other than phase I 
sources (i.e., potential phase II sources). The first study, under 
section 402(p)(5) (A) and (B) (to be completed by October 1, 1988), was 
to identify storm water discharges not covered under phase I and 
determine, to the maximum extent practicable, the nature and extent of 
pollutants in such discharges. The second study, under section 
402(p)(5)(C) (to be completed by October 1, 1989), was to establish 
procedures and methods to control storm water discharges to the extent 
necessary to mitigate impacts on water quality.
    Section 402(p)(6) of the CWA requires EPA, in consultation with 
State and local officials and based on the findings of the reports 
required under section 402(p)(5), to issue regulations that designate 
additional storm water discharges to be controlled to protect water 
quality under phase II of the program and to establish a comprehensive 
program to regulate such designated sources. The program shall, at a 
minimum, establish priorities, requirements for State storm water 
management programs, and expeditious deadlines. The program may include 
performance standards, guidelines, guidance, and management practices 
and treatment requirements, as appropriate. These regulations were to 
be issued by October 1, 1993. EPA did [[Page 17952]] not issue these 
regulations by the statutory deadline. Today's action is a common sense 
approach which defines and establishes application submittal 
requirements for phase II of the NPDES program for storm water. As 
noted below, EPA will be revising these requirements over the next 
several years in partnership with its numerous stakeholders.
September 9, 1992 Notice Phase II Issues
    On September 9, 1992, EPA published a notice requesting information 
and public comment on the phase II program (57 FR 41344). The notice 
identified three sets of issues associated with developing phase II 
regulations, including (1) how sources should be identified, (2) types 
of control strategies for these sources, and (3) deadlines for 
implementing the requirements. The notice presented a range of 
alternatives under each issue in an attempt to illustrate, and obtain 
input on, the full range of potential approaches for a phase II 
strategy. EPA received more than 130 comments on the notice from 
municipalities, trade groups or industries, State or Federal agencies, 
and other miscellaneous sources. No comments were received from 
environmental groups.
Rensselaerville Phase II Effort
    In early 1993, the Rensselaerville Institute and EPA held public 
and expert meetings to assist in developing and analyzing options for 
identifying phase II sources and controls. One of the options most 
favored by the various groups participating included use of a tiered 
approach that would provide for EPA selection of high priority sources 
for control by NPDES permits and State selection of other sources for 
control under a State program other than the NPDES program.
Storm Water Reports to Congress
    EPA is transmitting to Congress concurrently with this action, its 
first report required under sections 402(p)(5) (A) and (B). This report 
is contained in the record for this rule. This report was broadly 
circulated in November 1993 by the Agency to the States, trade groups, 
environmental groups, Congressional staff, other interested parties, 
and all people who requested a copy. EPA received comments from various 
States and other groups and made changes, as appropriate, to respond to 
those comments.
    Section 402(p)(5)(C) requires a second study of storm water 
discharges for the purpose of establishing procedures and methods to 
control storm water discharges that were not addressed as part of the 
first phase of the NPDES storm water program to the extent necessary to 
mitigate impacts on water quality. President Clinton's Clean Water 
Initiative, which was released on February 1, 1994, contains the 
Agency's recommendations for phase II and is considered by EPA to be 
the second Report to Congress. EPA has included these materials in its 
report that is being submitted to Congress.
President Clinton's Clean Water Initiative
    President Clinton's Clean Water Initiative addresses a number of 
issues associated with NPDES requirements for storm water discharges, 
including (1) establishing a phased approach for compliance of 
discharges from municipal separate storm sewer systems with water 
quality standards with a focus on controlling discharges from growth 
and development areas, (2) clarifying that the Maximum Extent Practical 
standard should be applied in a site specific, flexible manner taking 
into account cost considerations as well as water quality effects, (3) 
providing for an exemption from the storm water program for industrial 
facilities with no activities or no significant materials exposed to 
storm water, (4) providing for deadline extensions for phase II of the 
storm water program, (5) providing for a targeted approach for phase II 
storm water program requirements, including regulation of storm water 
from industrial facilities by municipalities, and (6) providing for 
control of discharges from inactive and abandoned mines located on 
Federal lands in a more targeted, flexible manner.
    Several bills to reauthorize the CWA which include amendments to 
NPDES requirements for storm water were introduced in the House and 
Senate in the 103rd Congress; however, substantive changes to the CWA 
were not made. Provisions contained in the President's Initiative, as 
well as the other bills, will be considered by the Agency in its 
comprehensive rulemaking involving stakeholders, to the extent the 
Agency is authorized to make changes discussed there under existing 
law.
    The Agency recognizes that there may be action in the 104th 
Congress to change storm water requirements. Stakeholders have raised 
some issues that go well beyond the scope of EPA's regulatory authority 
and can only be addressed by legislation. Certain parties have 
requested that the Agency delay issuance of this regulation until 
Congress acts. EPA is obligated to implement the current law and is 
taking this action to provide certainty to phase II dischargers as to 
when their permit applications are due if relief is not provided 
through regulatory or legislative action. EPA is willing to work with 
affected parties on statutory issues and, if the law is changed, will 
move to expeditiously implement the changes.
October 1, 1994, Deadline for Permits under Phase II
    On October 18, 1994, EPA issued guidance interpreting the October 
1, 1994, statutory deadline pertaining to phase II storm water 
dischargers. The memorandum recognized that EPA had not issued 
regulations implementing the requirements of section 402(p)(6) before 
October 1, 1994; and the Agency and approved NPDES States are unable to 
waive the statutory requirement that point source discharges of 
pollutants to waters of the United States need an NPDES permit. The 
memorandum also recognized that at the time of the guidance, EPA had 
completed a draft study identifying potential point source discharges 
of storm water for regulatory consideration under the requirements of 
section 402(p)(6) (as noted, EPA is transmitting the Reports to 
Congress); and the Agency had initiated a process to develop 
implementing regulations (of which today's action is a part). The 
guidance also referred to the general application requirements for the 
NPDES program and the Agency's January 12, 1994, storm water 
enforcement strategy.
EPA Instituting Federal Advisory Committee Effort
    The Agency has established a Federal Advisory Committee Act 
advisory committee to provide advice on various wet weather issues. EPA 
will work with a subcommittee of this advisory committee to form a 
partnership to specifically address phase II storm water issues. This 
action will complement the specific regulatory action EPA is taking 
today. Both actions are part of the Agency's response to the 
President's direction on regulatory reform. EPA wants to develop a 
common sense approach to allow EPA and the States/Indian Tribes to 
manage for results in developing a phase II storm water program that 
will provide ecosystem protection. EPA believes there is considerable 
latitude and flexibility within the existing language contained in 
section 402(p)(6) in establishing the scope and extent of the phase II 
program and the nature of the controls used. Some questions EPA will 
advance build upon the input the Agency has received earlier on phase 
II, including questions [[Page 17953]] addressing (1) the scope, 
mechanisms and timing of phase II, (2) how EPA can work more 
effectively with the varying interests to provide outreach and 
technical assistance for phase II, and (3) consideration of lessons 
learned from phase I. EPA would be receptive to including in the 
inclusionary process other issues that have developed broad-based 
support; these issues may include research, cost-effective solutions 
and expedited implementation. EPA is in the early stages of development 
of the specifics of the phase II program, which can and will include 
revisions and refinements to phase I, including relooking at the phase 
I application process and requirements. EPA recognizes that many of the 
municipalities and industrial facilities that are subject to the phase 
I requirements believe there is a need to make major changes to phase 
I.
    EPA is committed to conducting this phase II process, including 
improvements to limited portions of phase I, in an inclusionary manner, 
inviting representatives of affected stakeholders ``to the table'' to 
discuss their respective interests.
    Today's regulatory action is being taken as a common sense approach 
to provide a framework under existing law for these actions to be 
undertaken in an orderly fashion, as well as certainty regarding the 
status of phase II discharges. This approach will allow the permitting 
authority to manage for results by providing the flexibility to call 
certain phase II dischargers into the program based upon a finding of 
water quality impact.

III. Today's Action

Regulation Changes

    Today, EPA is promulgating changes to its NPDES storm water permit 
application regulations to establish a sequential application process 
for all phase II storm water discharges. Application deadlines are in 
two tiers. To obtain real environmental results earlier, the highest 
priority is being assigned to those phase II dischargers that the NPDES 
permitting authority (either a State/Indian Tribe or EPA) determines 
are contributing to a water quality impairment or are a significant 
contributor of pollutants. These dischargers will be required to apply 
for a permit within 180 days of receipt of notice from the permitting 
authority, unless permission for a later date is granted. All other 
phase II facilities will be required to apply to the permitting 
authority no later than six years from the effective date of this 
regulation if the phase II regulatory program in place at that time 
requires such applications. EPA is also establishing application 
requirements for these discharges, as well as making other conforming 
changes to other portions of its NPDES regulations. The specifics of 
the changes follow.
    First, to codify the already existing statutory requirement upon 
the expiration of the moratorium for phase II storm water discharges, 
EPA is adding 40 CFR 122.26(a)(9) to bring into the NPDES program, as 
of October 1, 1994, discharges composed entirely of storm water that 
are not otherwise already required by the phase I regulations to obtain 
a permit. EPA considers the portions of the two phase I categories that 
were remanded by the court in NRDC v. EPA to be covered by these phase 
II requirements, as are the facilities owned by municipalities that 
were otherwise excluded from phase I by the Intermodal Surface 
Transportation Efficiency Act of 1991 (Transportation Act). These phase 
II storm water dischargers will be required to apply for a permit 
according to the application requirements in new Sec. 122.26(g). This 
provision continues to recognize the applicability of statutory NPDES 
exemptions provided by CWA sections 402(l) and 502(14).
    Second, EPA is adding 40 CFR 122.26(g), which will contain the 
regulatory requirements for discharges composed entirely of storm water 
under section 402(p)(6). Any operator of a point source required to 
obtain a permit under Sec. 122.26(a)(9) shall submit an application in 
accordance with the following requirements.
    Section 122.26(g)(1) contains the application deadlines. If a phase 
II discharger complies with these application deadlines, the facility 
will not be subject to enforcement action for discharge without a 
permit or for failure to submit a permit application. First, if the 
permitting authority (the regulations use the term ``Director'' which 
means either the NPDES State/Indian Tribe Director or EPA Regional 
Administrator, or authorized representative) determines and notifies 
the discharger that a discharge contributes to a violation of a water 
quality standard or is a significant contributor of pollutants to 
waters of the United States, the operator shall apply for a permit to 
the permitting authority within 180 days of receipt of notice, unless 
permission for a later date is granted (see 40 CFR 124.52(c)). This 
provision will allow the NPDES permitting authority to manage for 
environmental results by providing the flexibility to bring certain 
phase II sources within the NPDES program at this time, as determined 
necessary by the State/Indian Tribe or EPA. This determination can be 
done on a watershed or class basis where the permitting authority 
determines there is a significant impact or contribution. In addition, 
the NPDES permitting authority may find the information contained in 
the Storm Water Reports to Congress useful in determining the location 
and nature of such impacts. The August 9, 1990, guidance EPA issued on 
designation authority may be useful in making this determination. The 
180 day time period provided for submission of an application is 
consistent with the time period provided for other situations in the 
NPDES program where a facility is asked to submit an application (40 
CFR 122.21(c)(1) and (2)) and the time period generally provided for 
applications for permit renewal (40 CFR 122.21(d)). EPA recognizes that 
this time period is longer than that provided by existing regulations 
for those phase I storm water dischargers designated into the program 
(40 CFR 122.26(e)(5)). EPA is establishing this longer time period to 
provide an opportunity for the phase II discharger to communicate with 
the permitting authority about necessary information, as well as to 
collect and submit the application information.
    All other phase II facilities shall apply to the State/ Indian 
Tribe or EPA Region no later than six years from the effective date of 
this regulation. EPA may change this application deadline for at least 
certain categories of dischargers in the future as part of the 
rulemaking process involving its various partners dealing with the 
scope, nature and extent to the phase II program. However, if changes 
are not made, all phase II storm water dischargers will have to submit 
applications by August 2, 2001.
    Section 122.26(g)(2) contains provisions for application 
requirements for phase II discharges. At this time, the existing phase 
I individual industrial application requirements in Sec. 122.26(c)(1) 
or application requirements for municipal separate storm sewer 
discharges contained in Sec. 122.26(d) will be the requirements for 
phase II discharges, unless otherwise modified by the permitting 
authority. As noted earlier, EPA will be relooking at the application 
requirements as part of the advisory committee on wet weather issues.
    EPA is also specifically providing for and encouraging the use of 
general permits for phase II discharges and would require submission of 
a notice of intent to be covered by the general permit, consistent with 
the current requirements of 40 CFR 122.28(b)(2) for phase I storm water 
discharges. EPA and [[Page 17954]] the authorized States have 
effectively and efficiently used general permits for phase I storm 
water discharges and EPA believes general permits also will be an 
effective mechanism to use in phase II, when NPDES permits are 
required. Group applications for phase II discharges are not provided 
for because the general permit process will be available to almost all 
phase II discharges.
    In developing phase II permits, the permitting authority may apply 
the requirements contained in section 402(p)(3), which are the 
requirements for phase I permits, on a case-by-case basis at this time 
using best professional judgment.
    EPA is also making several conforming changes to other portions of 
40 CFR 122.26. First, EPA is changing the date for the permit 
moratorium contained in Sec. 122.26(a)(1) to October 1, 1994, to 
reflect the change in this date provided by the Water Resources 
Development Act of 1992. Second, EPA is amending the title to 
Sec. 122.26(e) to read ``Application deadlines under paragraph (a)(1)'' 
to make clear that these are phase I requirements and application 
deadlines, as interpreted by EPA. Third, EPA is amending 
Sec. 122.26(e)(1)(ii) which are the permit application requirements for 
those municipally owned facilities for whom application deadlines were 
postponed by the Transportation Act to reflect the fact that these are 
now phase II facilities. (Section 1068(c) of the Transportation Act 
amended the CWA to provide that EPA shall not require any municipality 
with a population of less than 100,000 to apply for or obtain a permit 
for any storm water discharge associated with industrial activity other 
than an airport, power plant, or uncontrolled sanitary landfill owned 
or operated by such municipalities before October 1, 1992.) Because EPA 
is not making available the group application process in phase II, 
similar changes are not being made to Sec. 122.26(e)(2).
    EPA is also making changes to other applicable NPDES regulatory 
provisions. EPA is modifying the requirements of 40 CFR 122.21(c)(1) to 
clarify that new phase II storm water discharges do not have to submit 
a permit application until six years after the effective date of this 
regulation, or earlier if designated by the permitting authority. EPA 
is making conforming changes to 40 CFR 124.52(c) to clarify the 
application of these provisions to both phase I and phase II storm 
water discharges.
Basis of Regulations

    Today's action is the first step of EPA's approach to develop a 
comprehensive phase II program under section 402(p)(6), and is 
consistent with President Clinton's February 21, 1995, direction on 
regulatory reform and the Office of Water's December 30, 1994, 
``National Water Program Agenda for the Future.'' EPA has initiated an 
inclusionary process involving its partners to develop more 
comprehensive phase II rules; EPA intends to propose those rules by 
September 1, 1997, and finalize those rules by March 1, 1999. In the 
comprehensive phase II rulemaking, EPA will consider input from all 
stakeholders, as well as the input that has already been provided to 
the Agency on the phase II September 1992 notice and the 1993 
Rensselaerville Institute phase II effort discussed earlier in this 
notice. EPA will also consider the information in the Storm Water 
Reports to Congress, and the recommendations in President Clinton's 
Clean Water Initiative. Finally, EPA will implement any statutory 
changes that are enacted during program development. Today's action is 
based on recommendations in those documents to the extent they envision 
an orderly, tiered process for regulation of storm water, allowing the 
NPDES permitting authority to manage for results at this time. EPA is 
considering making other changes to improve its operation of the phase 
I storm water program in the comprehensive phase II rulemaking action, 
including revising phase I municipal application requirements.
    The regulation issued today fulfills, in part, the requirements 
contained in section 402(p)(6) of the CWA. It is being issued by EPA 
today after consultation with State, local officials, Indian Tribes, 
and parts of the regulated and environmental community. The regulation, 
which is the first of a sequential process, is consistent with the 
information contained in the Storm Water Reports to Congress and the 
President's Initiative as it is providing the framework of a tiered 
implementation of phase II requirements, allowing the NPDES permitting 
authority current flexibility to manage for results. The application 
requirements allow the NPDES permitting authority to bring within the 
phase II program at this time those phase II discharges impacting water 
quality or who are a significant contributor of pollutants and, if EPA 
does not take action to change its regulations, will require a permit 
application from all phase II storm water discharges in 6 years.
    The regulations also establish a comprehensive program containing 
current permit application requirements. The permitting authority will 
be able to establish appropriate permit requirements on a case-by-case 
basis at this time. This first portion of the phase II program 
establishes priorities and deadlines for permit applications, which, as 
currently structured, will be a part of the NPDES program. These 
requirements and changes to 40 CFR 122.26 and conforming changes to 
other NPDES requirements in part 122 are required parts of State/Tribal 
NPDES programs (see 40 CFR 123.25). The initial portion of the phase II 
program which is being established today does not contain a 
comprehensive set of performance standards, guidelines, guidance, 
management practices, and treatment requirements. These conditions can 
be established by the permitting authority on a case-by-case basis upon 
permit issuance to designated phase II discharges. Finally, these 
conditions may be further defined by EPA when it revises the phase II 
program regulations as described above.
    Today's action adopts a tiered approach for selection of high 
priority sources to be controlled by NPDES permits, which was the lead 
option presented for public comment in the September 1992 notice, and 
one of the options most favored by the various groups participating in 
the effort conducted in early 1993 by the Rensselaerville Institute and 
EPA, as well as the Storm Water Reports to Congress and the President's 
Clean Water Initiative. In its rulemaking effort, EPA believes there 
will be discussion with its partners of other approaches that will 
provide flexibility to the States to deal with sources that are not of 
as high a priority using other frameworks and approaches.
    In the September 1992 phase II notice, EPA invited comment on 
various issues regarding phase II of the storm water program, including 
the appropriate deadlines for implementing phase II requirements. The 
comments EPA received on this issue generally recommended 
implementation of phase II in stages and reiterated the need for time 
to prepare regulations and to conduct outreach to implement the 
program, as well as the need to wait and study the results of 
implementation of phase I of the program. The actions EPA is taking 
today are consistent with these comments. [[Page 17955]] 

Supporting Documentation

A. 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 affecting 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;
    (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 has determined that this rulemaking significantly reduces the 
current regulatory burden imposed on phase II facilities. This rule was 
submitted to OMB for review.

B. Executive Order 12875

    Under Executive Order 12875, entitled ``Enhancing the 
Intergovernmental Partnership'', issued by the President on October 26, 
1993, the Agency is required to develop an effective process to allow 
elected officials and other representatives of State and Tribal 
governments to provide meaningful and timely input in the development 
of regulatory proposals.
    EPA fully supports this objective and has initiated a consultation 
process with both States and Tribes which will be continued through 
public comment period on these actions.
    Specifically, EPA has discussed this action with the 
representatives of the States, locals governments, the Agency's 
American Indian Environmental Office (AIEO), and parts of the regulated 
community.
    The reaction of the States is positive. The States and the 
Association of State and Interstate Water Pollution Control 
Administrators (ASIWPCA) support the approach that is being taken under 
existing law; the States and ASIWPCA also support concurrent changes to 
the law. ASIWPCA has submitted a letter to the Agency dated March 3, 
1995, which is included in the record for this matter. EPA has 
responded to many of ASIWPCA's comments in this preamble.
    The reaction of the municipalities is that they prefer a statutory 
change now to clarify the issue once and for all. Municipalities' 
representatives (National Association of Counties, National League of 
Cities, U.S. Conference of Mayors, and the National Association of 
Flood and Stormwater Management Agencies) have raised many issues to 
the Agency and have submitted a letter dated February 16, 1995, to the 
Agency which is contained in the record for this matter. The 
municipalities believe that it is inappropriate for EPA to act now when 
Congress may act on this matter, that the action taken by EPA is not in 
conformance with the law, and that EPA did not consult with local 
officials on this matter. EPA has responded to many of the 
municipalities' concerns including the legal basis of its action and 
potential changes to the statute in this preamble. EPA did consult with 
various representatives of local governments early in the development 
of this regulation as well as more comprehensively in February.
    The reaction of EPA's AIEO is positive; the Office of Water will 
work through the AIEO to provide for a Tribal representative to 
participate in the inclusionary process.
    EPA believes that it has developed an effective process to obtain 
input from State, Tribal and local governments before issuance of this 
rule, as well as receiving comments on the direct final rule and 
accompanying proposed rulemaking, and has met the consultation 
requirements for States, federally recognized Tribes and localities 
under the terms of Executive Order 12875.

C. Paperwork Reduction Act

    The Paperwork Reduction Act, 44 U.S.C. 3501 et seq., is intended to 
minimize the reporting and record-keeping burden on the regulated 
community, as well as to minimize the cost of Federal information 
collection and dissemination. In general, the Act requires that 
information requests and record-keeping requirements affecting ten or 
more non-Federal respondents be approved by the Office of Management 
and Budget.
    EPA's existing information collection request (ICR) entitled 
``Application for NPDES Discharge Permit and Sewage Sludge Management 
Permit'' (OMB Number 2040-0086) contains information that responds to 
this issue for all storm water discharges, including those facilities 
designated into the program. EPA will review and revise the estimates 
contained in this ICR, as appropriate, in its renewal process.

D. 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. 
The RFA recognizes three kinds of small entities, and defines them as 
follows:
    (1) Small governmental jurisdictions--any government of a district 
with a population of less than 50,000.
    (2) Small business--any business which is independently owned and 
operated and not dominant in its field, as defined by the Small 
Business Administration regulations under the Small Business Act.
    (3) Small organization--any not-for-profit enterprise that is 
independently owned and operated and not dominant in its field.
    EPA has determined that today's rule would not have a significant 
impact on a substantial number of small entities, and that a Regulatory 
Flexibility Analysis therefore is unnecessary. The basis for this 
determination is through today's action EPA is benefiting small 
entities as this action (1) adopts a common sense approach to deal with 
the issue of storm water phase II requirements, (2) provides the 
ability for the State/Tribe or EPA to manage for results by providing 
flexibility to the permitting authority to deal with storm water phase 
II permitting at this time based on water quality violations or 
significant contribution of pollutants, and (3) clarifies and reduces 
currently applicable burdens for those facilities current subject to 
phase II statutory requirements. Finally, the Agency is committed to 
issue its comprehensive storm water phase II program regulations by 
March 1, 1999; in that rulemaking EPA will reconsider its Regulatory 
Flexibility Act analysis.

E. Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a written statement to accompany proposed rules where the 
estimated costs to State, local, or tribal governments, or to the 
private sector, will be $100 million or more in any one year. Under 
section 205, EPA must select the most cost-effective and least 
burdensome alternative that achieves the objective of such a rule and 
that is consistent with statutory requirements. Section 203 requires 
EPA to establish a [[Page 17956]] plan for informing and advising any 
small governments that may be significantly and uniquely affect by any 
rule.
    EPA estimates that the costs to State, local, or tribal 
governments, or the private sector, from this rule will be less than 
$100 million. This rulemaking significantly reduces the immediate 
regulatory burden imposed on phase II facilities. EPA has determined 
that an unfunded mandates statement therefore is unnecessary.
    Although not required to make a finding under section 206, EPA 
concludes that this rule is cost-effective and a significant reduction 
in burden for State and local governments. In a September 9, 1992, 
Federal Register notice, EPA invited comment process for public 
consideration of reasonable alternative approaches for the phase II 
storm water program. Today's rule provides for the first step for any 
of those alternatives by providing for an orderly process for 
development of regulations. By establishing regulatory relief until 
development of those alternative approaches, today's rulemaking itself 
provides the most cost-effective and least burdensome alternative to 
achieve the objectives of the rule at this stage, consistent with 
statutory requirements.
    As discussed previously, EPA initiated consultation with 
representative organizations of small governments under Executive Order 
12875. In doing so, EPA provided notice to potentially affected small 
governments to enable them to provide meaningful and timely input. EPA 
plans to inform, educate, and advise small governments on compliance 
with any requirements that may be develop in further development of 
storm water phase II rules in the course of the wet weather advisory 
committee convened for this purpose. That committee will also provide 
advice related to reconsideration of existing application requirements 
that already affect small governments.
F. Administrative Procedure Requirements

    The Agency is publishing this action as a ``direct final'' rule. A 
direct final rule is not an ``interim final'' rule (i.e. a rule which 
provides for public comment after it has gone into effect); rather it 
is a rule which is published with a delayed effective date allowing for 
the receipt of and response to public comment before the rule goes into 
effect. A response to all comments received will be placed in the 
docket for this rulemaking prior to the effective date. This rulemaking 
thus fully complies with notice-and-comment requirements under the 
Administrative Procedure Act (APA). EPA has chosen to use the direct 
final approach for this rule because the Agency does not expect to 
receive significant adverse or critical comment and to allow for the 
most expeditious implementation possible, consistent with the APA. 
Because in the absence of this rule, thousands of municipalities and 
other storm water discharges are currently operating in violation of 
the CWA, EPA believes that prompt implementation of this rule is very 
important.
    However, consistent with APA requirements, if EPA does receive 
significant adverse or critical comment, EPA will withdraw this rule 
prior to its effective date and proceed with a normal rulemaking 
process. As a result, elsewhere in today's Federal Register, EPA is 
also proposing this rule. If EPA decides to withdraw the direct final 
rule based on public comment, EPA will proceed with rulemaking based on 
this proposal. There will not be an additional comment period, so 
parties interested in commenting on the proposed rule should do so at 
this time.

List of Subjects

40 CFR Part 122

    Administrative practice and procedure, Confidential business 
information, Hazardous substances, Reporting and recordkeeping 
requirements, Water pollution control.

40 CFR Part 124

    Administrative practice and procedure, Air pollution control, 
Hazardous waste, Indian lands, Reporting and recordkeeping 
requirements, Water pollution control, Water supply.

    Dated: March 29, 1995.
Carol M. Browner,
Administrator.

    For the reasons set forth in this preamble, parts 122 and 124 of 
title 40 of the Code of Federal Regulations are amended as follows:

PART 122--[AMENDED]

    1. The authority citation for part 122 continues to read as 
follows:

    Authority: Clean Water Act, 33 U.S.C. 1251 et seq.

    2. Section 122.21 is amended by adding a sentence to the end of 
paragraph (c)(1) to read as follows:


Sec. 122.21  Application for a permit (applicable to State programs, 
see Sec. 123.25).

* * * * *
    (c) Time to apply.
    (1) * * * New discharges composed entirely of storm water, other 
than those dischargers identified by Sec. 122.26(a)(1), shall apply for 
and obtain a permit according to the application requirements in 
Sec. 122.26(g).
* * * * *
    3. Section 122.26 is amended as follows:
    a. In paragraph (a)(1) introductory text by revising ``October 1, 
1992'' to read ``October 1, 1994''.
    b. By adding paragraph (a)(9) as set forth below.
    c. By revising the title of paragraph (e) introductory text as set 
forth below;
    d. In paragraph (e)(1)(ii) by revising the phrase ``permit 
applications requirements are reserved'' to read ``permit application 
requirements are contained in paragraph (g) of this section''.
    e. By adding paragraph (g) as set forth below.


Sec. 122.26  Storm water discharges (applicable to State NPDES 
programs, see Sec. 123.25).

    (a) * * *
    (9) On and after October 1, 1994, discharges composed entirely of 
storm water, that are not otherwise already required by paragraph 
(a)(1) of this section to obtain a permit, shall be required to apply 
for and obtain a permit according to the application requirements in 
paragraph (g) of this section. The Director may not require a permit 
for discharges of storm water as provided in paragraph (a)(2) of this 
section or agricultural storm water runoff which is exempted from the 
definition of point source at Secs. 122.2 and 122.3.
* * * * *
    (e) Application deadlines under paragraph (a)(1). * * *
* * * * *
    (g) Application requirements for discharges composed entirely of 
storm water under Clean Water Act section 402(p)(6). Any operator of a 
point source required to obtain a permit under paragraph (a)(9) of this 
section shall submit an application in accordance with the following 
requirements.
    (1) Application deadlines. The operator shall submit an application 
in accordance with the following deadlines:
    (i) A discharge which the Director determines to contribute to a 
violation of a water quality standard or is a significant contributor 
of pollutants to waters of the United States shall apply for a permit 
to the Director within 180 days of receipt of notice, unless permission 
for a later date is granted by the Director (see 40 CFR 124.52(c)); or 
[[Page 17957]] 
    (ii) All other discharges shall apply to the Director no later than 
August 2, 2001.
    (2) Application requirements. The operator shall submit an 
application in accordance with the following requirements, unless 
otherwise modified by the Director:
    (i) Individual application for non-municipal discharges. The 
requirements contained in paragraph (c)(1) of this section.
    (ii) Application requirements for municipal separate storm sewer 
discharges. The requirements contained in paragraph (d) of this 
section.
    (iii) Notice of intent to be covered by a general permit issued by 
the Director. The requirements contained in 40 CFR 122.28(b)(2).

PART 124--[AMENDED]

    4. The authority citation for part 124 continues to read as 
follows:

    Authority: Resource Conservation and Recovery Act, 42 U.S.C. 
3901 et seq.; Safe Drinking Water Act, 42 U.S.C. 300(f) et seq.; 
Clean Water Act, 33 U.S.C. 1251 et seq.; Clean Air Act, 42 U.S.C. 
7401 et seq.

    5. Section 124.52 is amended by revising the parenthetical 
statement in paragraph (c) to read as follows:


Sec. 124.52  Permits required on a case-by-case basis.

* * * * *
    (c) * * * (see 40 CFR 122.26 (a)(1)(v), (c)(1)(v), and (g)(1)(i)) * 
* *
    6. Section 124.52 is amended by revising the next to the last 
sentence in paragraph (c) to read as follows:


Sec. 124.52  Permits required on a case-by-case basis.

* * * * *
    (c) * * * The discharger must apply for a permit under 40 CFR 
122.26 (a)(1)(v) and (c)(1)(v) within 60 days of notice or under 40 CFR 
122.26(g)(1)(i) within 180 days of notice, unless permission for a 
later date is granted by the Regional Administrator. * * *
[FR Doc. 95-8209 Filed 4-6-95; 8:45 am]
BILLING CODE 6560-50-P