[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]]


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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.

------------------------------------------------------------------------
                                                Examples of regulated   
                 Category                             entities          
------------------------------------------------------------------------
State Government..........................  State NPDES Permit Issuing  
                                             Authorities.               
------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

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