In August 2017, 1 the Board published and sought comment on the NCUA Regulatory Reform Task Force's (Task Force) first report on implementing the agency's regulatory reform agenda (Agenda). The Agenda identifies those regulations the Board intends to amend or repeal because they are outdated, ineffective, or excessively burdensome. 2 The Board published the Task Force's second and final report in December 2018. 3 The final report contains the Task Force's updated recommendations and a refined blueprint for implementing the Agenda.

One of the Agenda's recommendations specifically suggested that the Board modify its regulations to “provide flexibility with respect to senior executive compensation plans that incorporate lending as part of a broad and balanced set of organizational goals and performance measures.” The Board recognizes that the NCUA's regulations in this area, which were last updated over 20 years ago, are likely outdated, burdensome, and at odds with industry standards for senior executive compensation plans. 4 As such, the Board is seeking comment on how to update the regulations so that credit unions can offer competitive compensation plans without encouraging inappropriate risks, incentivizing bad loans, or negatively effecting safety and soundness. While the Board is particularly interested in how the agency can update its regulations to provide flexibility with respect to senior executive compensation plans, it would also like comments on how the regulations governing compensation associated with lending can be modernized generally.

Currently, § 701.21(c)(8)(i) of the NCUA's regulations establishes a blanket prohibition on the direct or indirect receipt of any commission, fee, or other compensation by any credit union official or employee, or an immediate family member of either, in connection with any loan made by their credit union. 5 However, § 701.21(c)(8)(iii) carves out four exceptions to this blanket prohibition. Specifically, § 701.21(c)(8)(iii) permits:

(A) Payment, by a federal credit union, of salary to employees;

(B) Payment, by a federal credit union, of an incentive or bonus to an employee based on the credit union's overall financial performance;

(C) Payment, by a federal credit union, of an incentive or bonus to an employee, other than a senior management employee, in connection with a loan or loans made by the credit union, provided that the board of directors of the credit union establishes written policies and internal controls in connection with such incentive or bonus and monitors compliance with such policies and controls at least annually; and

(D) Receipt of compensation from a person outside a federal credit union by a volunteer official or non-senior-management employee of the credit union, or an immediate family member of a volunteer official or employee of the credit union, for a service or activity performed outside the credit union, provided that no referral has been made by the credit union or the official, employee, or family member.

In the past, credit unions have been confused about how to interpret the term “overall financial performance” in § 701.21(c)(8)(iii)(B). As noted, § 701.21(c)(8) generally prohibits most credit union employees and officials from receiving compensation made “in connection with any loan” a credit union makes, but provides exceptions, including one that permits incentive compensation to employees based on the credit union's overall financial performance. Credit unions have expressed uncertainly about whether the NCUA permits loan metrics such as aggregate loan growth to be a factor in assessing overall financial performance. They also have asserted that the regulation is subject to varying interpretations and levels of enforcement across the NCUA's regions.

Given the degree of confusion and uncertainty this regulation has caused, the Board seeks comment as to how the NCUA should modernize its regulations generally governing the compensation of credit union officials and employees in connection with loans made by credit unions and specifically with respect to defining “overall financial performance.” In addition, the Board specifically requests feedback addressing the following:

• Is there a single industry standard or methodology for developing executive compensation plans? Are there multiple standards or methodologies for credit unions of different asset sizes?

• Are the terms and conditions of executive compensation plans developed by credit unions themselves or are the plans crafted by third-party vendors?

• What do these plans look like? Are there specific formulas employed to determine terms and conditions? If so, what are the formulas?

• Is the current structure of § 701.21(c)(8), namely a broad prohibition with specific exceptions, the best format for regulating this area?

• Do commenters prefer a bright line test for permissible compensation to regulations that make a more holistic evaluation of individual compensation plans and the incentives they provide? Is a bright line test even possible in this highly fact determinative area? If so, where is that line?

• Are current credit union compensation plans similar to, and competitive with, those provided at other financial institutions? If not, how do they differ and what, if anything, in the NCUA's regulations contributes to those differences?

• What limitations, if any, are necessary to prevent individuals from being incentivized to take inappropriate risks that endanger their credit unions? What authorities do credit unions need to enable them to compete for talented executives?

• To what extent should the NCUA permit loan metrics, such as loan volume, to be a part of compensation plans? How would those metrics be incorporated into the overall plan?

• Should the NCUA provide additional requirements for compensation related to a line of business that is new for the credit union or one in which the credit union lacks substantial experience or expertise?

The Board has issued this ANPR pursuant to its authority under the Federal Credit Union Act (FCU Act). Under the FCU Act, the NCUA is the chartering and supervisory authority for federal credit unions and the federal supervisory authority for federally insured credit unions (FICUs). 6 The FCU Act grants NCUA a broad mandate to issue regulations governing both federal credit unions and all FICUs. Section 120 of the FCU Act is a general grant of regulatory authority and authorizes the Board to prescribe rules and regulations for the administration of the FCU Act. 7 Section 207 of the FCU Act is a specific grant of authority over share insurance coverage, conservatorships, and liquidations. 8 Section 209 of the FCU Act is a plenary grant of regulatory authority to issue rules and regulations necessary or appropriate to carry out its role as share insurer for all FICUs. 9 Accordingly, the FCU Act grants the Board broad rulemaking authority to ensure that the credit union industry and the NCUSIF remain safe and sound.

On June 16, 2017, the Commission requested input from interested parties about ways to reduce the burdens and costs associated with existing regulations, while still protecting consumers from risks of death or injuries associated with consumer products. 82 FR 27636. The Commission followed up on this burden reduction goal in its Fiscal Year 2019 Operating Plan, directing CPSC staff to review possibilities for reducing burdens, including “expanding exemptions for flammability testing.” U.S. Consumer Product Safety Commission, Fiscal Year 2019 Operating Plan, p. 18 (Oct. 10, 2018), available at: https://www.cpsc.gov/content/fiscal-year-2019-operating-plan . Accordingly, this notice requests information about expanding the exemptions from flammability testing and other ways to reduce the burdens associated with the Commission's Standard for the Flammability of Clothing Textiles.

The Flammable Fabrics Act (15 U.S.C. 1191-1204) authorizes the Commission to issue flammability standards, under certain circumstances, when “needed to protect the public against unreasonable risk of the occurrence of fire leading to death or personal injury, or significant property damage.” 15 U.S.C. 1193(a). Under this authority, the Commission adopted a Standard for the Flammability of Clothing Textiles in 16 CFR part 1610. The standard applies to clothing and textiles intended to be used for clothing. The regulations provide testing requirements, establish three classes of flammability, set out the criteria for classifying textiles, and prohibit the use of textiles that exhibit rapid and intense burning. The purpose of these regulations is to reduce the risk of injury or death by prohibiting the use of dangerously flammable clothing textiles. 16 CFR 1610.1(a).

The regulations exempt certain fabrics from the testing requirements because “experience gained from years of testing in accordance with the Standard demonstrates that certain fabrics consistently yield acceptable results when tested in accordance with the Standard.” 16 CFR 1610.1(d). Currently, the following fabrics are exempt from the testing requirements:

(1) Plain surface fabrics, regardless of fiber content, weighing 2.6 ounces per square yard or more, and

(2) All fabrics, both plain surface and raised-fiber surface textiles, regardless of weight, made entirely from any of the following fibers or entirely from combination of the following fibers: Acrylic, modacrylic, nylon, olefin, polyester, wool.

Id.

CPSC is considering changes to the Standard for the Flammability of Clothing Textiles to reduce the costs and burdens associated with these requirements. One specific possibility that industry members have suggested is to add spandex to the list of fabrics in 16 CFR 1610.1(d)(2) that are exempt from the testing requirements in the standard. In addition, possible updates to the equipment and procedures specified in the standard may reduce the burdens associated with the testing requirements. CPSC requests comments on the following specific topics:

CPSC staff is aware of stakeholder interest in adding spandex fibers to the Specific Exemptions in 16 CFR 1610.1(d). Please provide relevant information and data about spandex fibers that would help CPSC determine whether spandex “consistently yield[s] acceptable results when tested in accordance with the Standard.” CPSC is particularly interested in test data from testing a range of fabric constructions, fabric weights, and fiber blends. For example, it would be helpful to receive information about:

(1) Plain surface fabrics with spandex blended with one or a combination of the exempted fibers listed in 16 CFR 1610.1(d)(2) weighing less than 2.6 ounces per square yard, and

(2) raised surface fabrics, regardless of weight, that contain spandex with one or a combination of the exempted fibers listed in 16 CFR 1610.1(d)(2).

Please provide information about the general test burden and costs associated with testing fabric containing spandex fibers. The following specific information would be helpful:

• How much testing is required for fabrics containing spandex subject to 16 CFR part 1610?

• What are the costs associated with the required testing?

• What types of fabrics and garments require testing?

Section 1610.5 specifies the test apparatus and materials that must be used for flammability testing. The flammability test apparatus must include, among other things, a particular stop thread that is stretched from the spool through stop guides. The stop thread must be “a spool of No. 50, white, mercerized, 100% cotton sewing thread.” 16 CFR 1610.5(a)(2)(ii). CPSC staff is aware that this stop thread may have limited availability or that the numbering specified in the standard may be outdated. Please provide comments about the specifications of the stop thread and thread availability. What procedures are used to confirm the thread meets the specifications?

Section 1610.6(b)(1)(i) specifies a dry cleaning procedure as part of the process of refurbishing plain and raised textile fabrics. As part of the dry cleaning procedure, the solvent perchloroethylene is required in 16 CFR 1610.6(b)(1)(i). Staff is aware of the limited availability of, and legal restrictions on the use of, perchloroethylene solvent. Please provide any comments on the testing burden or cost of performing the dry cleaning procedure with perchloroethylene solvent. Please provide details, and potential alternatives, when possible.

Section 1610.6(b)(1)(ii) requires samples to be washed and dried in accordance with American Association of Textile Chemists and Colorists (AATCC) Test Method 124-2006, Appearance of Fabrics After Repeated Home Laundering . AATCC 124-2006 requires the use of an automatic washer (Table III) and tumble dryer (Table IV) that meet certain conditions. Staff is aware of the limited availability of automatic washing machines, and possibly dryers, capable of meeting the conditions in AATCC 124-2006. Please provide any comments on the testing burden or cost of performing the laundering procedure with the automatic washing machine and tumble dryer specified in the standard. Please provide details, and potential alternatives, when possible.

The standard lists reporting codes in 16 CFR 1610.8(b)(2) to describe the burning behavior of raised surface fabrics. The reporting codes, which are based on test results, indicate the proper classification for the textile. CPSC staff has received input that these codes may be confusing. Please provide any comments on the use or needed clarification of these codes.

Please provide other input and recommendations about opportunities to reduce the cost of testing requirements or other costs and burdens associated with 16 CFR part 1610. Also please identify test procedures that may need clarifications, and provide recommendations or alternatives that may reduce the burdens associated with these regulations, as well as details about the costs of those alternatives.

The proposed regulations that are the subject of this correction are under sections 301, 356, 368, and 902 of the Internal Revenue Code.

As published, the notice of proposed regulations (REG-121694-16) contains errors which may prove to be misleading and need to be clarified.

Accordingly, the notice of proposed rulemaking (REG-121694-16) that was the subject of FR Doc. 2019-05649, published at 84 FR 11263 (March 26, 2019), is corrected to read as follows:

On June 2, 2010, EPA promulgated a revised primary SO 2 NAAQS with a level of 75 parts per billion (ppb), based on a 3-year average of the annual 99th percentile of 1-hour daily maximum concentrations. See 75 FR 35520 (June 22, 2010). Pursuant to section 110(a)(1) of the CAA, states are required to submit SIPs meeting the applicable requirements of section 110(a)(2) within three years after promulgation of a new or revised NAAQS or within such shorter period as EPA may prescribe. These SIPs, which EPA has historically referred to as “infrastructure SIPs,” are to provide for the “implementation, maintenance, and enforcement” of such NAAQS, and the requirements are designed to ensure that the structural components of each state's air quality management program are adequate to meet the state's responsibility under the CAA. Section 110(a) of the CAA requires states to make a SIP submission to EPA for a new or revised NAAQS, but the contents of individual state submissions may vary depending upon the facts and circumstances. The content of the changes proposed in such SIP submissions may also vary depending upon what provisions the state's approved SIP already contains. Section 110(a)(2) requires states to address basic SIP elements such as requirements for monitoring, basic program requirements, and legal authority that are designed to assure attainment and maintenance of the NAAQS. A detailed history, interpretation, and rationale of these SIPs and their requirements can be found in, among other documents, EPA's March 7, 2016 (81 FR 11718), notice of proposed rulemaking related to infrastructure SIP requirements for the 2010 1-hour SO 2 NAAQS for South Carolina in the section titled, What is EPA's approach to the review of infrastructure SIP submissions?

Section 110(a)(2)(D)(i)(I) of the CAA requires SIPs to include provisions prohibiting any source or other type of emissions activity in one state from emitting any air pollutant in amounts that will contribute significantly to nonattainment, or interfere with maintenance, of the NAAQS in another state. The two clauses of this section are referred to as prong 1 (significant contribution to nonattainment) and prong 2 (interference with maintenance of the NAAQS).

On June 25, 2018, the South Carolina Department of Health and Environmental Control (SC DHEC) submitted a revision to the South Carolina SIP addressing only prongs 1 and 2 of CAA section 110(a)(2)(D)(i)(I) for the 2010 1-hour SO 2 NAAQS. 1 EPA is proposing to approve SC DHEC's June 25, 2018, SIP submission which certifies that existing SIP provisions satisfy the State's obligation for prongs 1 and 2 for the 2010 1-hour SO 2 NAAQS. All other elements related to the infrastructure requirements of section 110(a)(2) for the 2010 1-hour SO 2 NAAQS for South Carolina are addressed in separate rulemakings. 2

In this action, EPA has considered information from the 2010 1-hour SO 2 NAAQS designations process, as discussed in more detail in section III.C of this document. For this reason, a brief summary of EPA's designations process for the 2010 1-hour SO 2 NAAQS is included here. 3

After the promulgation of a new or revised NAAQS, EPA is required to designate areas as “nonattainment,” “attainment,” or “unclassifiable,” pursuant to section 107(d)(1) of the CAA. The process for designating areas following promulgation of a new or revised NAAQS is contained in section 107(d) of the CAA. The CAA requires EPA to complete the initial designations process within two years of promulgating a new or revised standard. If the Administrator has insufficient information to make these designations by that deadline, EPA has the authority to extend the deadline for completing designations by up to one year.

EPA promulgated the 2010 1-hour SO 2 NAAQS on June 2, 2010. See 75 FR 35520 (June 22, 2010). EPA completed the first round of designations for the 2010 1-hour SO 2 NAAQS on July 25, 2013, designating 29 areas in 16 states as nonattainment for the 2010 1-hour SO 2 NAAQS. See 78 FR 47191 (August 5, 2013). EPA based this first round of final SO 2 designations on monitored SO 2 concentrations violating the 2010 1-hour SO 2 standard. Following the initial August 5, 2013, designations, three lawsuits were filed against EPA in different U.S. District Courts, alleging that the Agency had failed to perform a nondiscretionary duty under the CAA by not designating all portions of the country within the time lines set forth in section 107(d)(1)(B) of the CAA. In an effort intended to resolve the litigation in one of those cases, EPA and the plaintiffs, Sierra Club and the Natural Resources Defense Council, filed a proposed consent decree with the U.S. District Court for the Northern District of California. On March 2, 2015, the court entered the consent decree  4 which requires EPA to sign for publication in the Federal Register notices of the Agency's promulgation of area designations by three specific deadlines: July 2, 2016 (“round 2”); December 31, 2017 (“round 3”); and December 31, 2020 (“round 4”). 5

On August 21, 2015 (80 FR 51052), EPA separately promulgated air quality characterization requirements for the 2010 1-hour SO 2 NAAQS in the Data Requirements Rule (DRR). The DRR required state air agencies to characterize air quality, through air dispersion modeling or monitoring, in areas associated with sources that emitted greater than 2,000 tons per year (tpy) of SO 2 , or that have otherwise been listed under the DRR by EPA or state air agencies. In lieu of modeling or monitoring, state air agencies, by specified dates, could elect to impose federally-enforceable emissions limitations on those sources restricting their annual SO 2 emissions to 2,000 tpy or less, or provide documentation that the sources have been shut down. EPA expected that the information generated by implementation of the DRR would help inform SO 2 designations specified in the March 2, 2015, consent decree. EPA signed Federal Register notices of promulgation of round 2 designations  6 on June 30, 2016 (81 FR 45039 (July 12, 2016)), and on November 29, 2016 (81 FR 89870 (December 13, 2016)), and round 3 designations  7 on December 21, 2017 (83 FR 1098 (January 9, 2018)). For South Carolina, EPA designated all counties as attainment/unclassifiable in round 3. Because all counties in South Carolina are now designated for the 2010 1-hour SO 2 NAAQS, and no DRR sources in the State opted to monitor to inform Round 4 SO 2 designations, no areas in South Carolina will be designated in round 4. 8 There are no nonattainment areas in South Carolina for the 2010 1-hour SO 2 NAAQS. 9

Interstate transport of SO 2 is unlike the transport of fine particulate matter (PM 2.5 ) or ozone in that SO 2 is not a regional pollutant and does not commonly contribute to widespread nonattainment over a large (and often multi-state) area. The transport of SO 2 is more analogous to the transport of lead (Pb) because its properties result in localized pollutant impacts very near the emissions source. However, ambient concentrations of SO 2 do not decrease as quickly with distance from the source as Pb because of the properties and typical release heights of SO 2 . Emissions of SO 2 travel farther and have wider ranging impacts than emissions of Pb, but do not travel far enough to be treated in a manner similar to ozone or PM 2.5 . The approaches that EPA has adopted for ozone or PM 2.5 transport are too regionally focused and the approach for Pb transport is too tightly circumscribed to the source. SO 2 transport is therefore a unique case and requires a different approach.

Given the properties of SO 2 , EPA agrees with South Carolina's selection of a spatial scale with dimensions from four to 50 kilometers (km) from point sources—the “urban scale”—to assess trends in area-wide air quality that might impact downwind states. 10 SC DHEC selected the urban scale as appropriate for assessing trends in both area-wide air quality and the effectiveness of large-scale pollution control strategies at SO 2 point sources. SC DHEC supported this transport distance threshold with references to 40 CFR 58, Appendix D, Section 4.4.4(4) “Urban scale”, which states that measurements in this scale would be used to estimate SO 2 concentrations over large portions of an urban area with dimensions from four to 50 km. The State also notes that 50 km is the transport distance threshold that EPA recommends for use with the air quality dispersion model called the American Meteorological Society/Environmental Protection Agency Regulatory Model (AERMOD). AERMOD is EPA's preferred modeling platform for regulatory purposes (Appendix W of 40 CFR part 51). 11 EPA agrees with the State's selection and application of the 50-km threshold as a reasonable distance to evaluate emission source impacts into neighboring states and to assess air quality monitors within 50 km of the State's border, which is discussed further in section III.C.

As discussed in sections III.C and III.D, EPA first reviewed the State's analysis to assess how the State evaluated the transport of SO 2 to other states, the types of information used in the analysis, and the conclusions drawn by the State. EPA then conducted a weight of evidence analysis based on a review of the State's submission and other available information, including SO 2 air quality and available source modeling for states within 50 km of the South Carolina border. 12

On June 25, 2018, SC DHEC submitted a revision to the South Carolina SIP addressing prongs 1 and 2 of CAA section 110(a)(2)(D)(i)(I) for the 2010 1-hour SO 2 NAAQS. South Carolina conducted a weight of evidence analysis to examine whether SO 2 emissions from the State adversely affect attainment or maintenance of the 2010 1-hour SO 2 NAAQS in downwind states.

SC DHEC reviewed the following information to support its conclusion that South Carolina does not significantly contribute to nonattainment or interfere with maintenance of the 2010 1-hour SO 2 NAAQS in downwind states: Trends in SO 2 design values (DVs)  13 at the State's air quality monitors from 2008-2017; highest monitored SO 2 DVs for monitors with complete, quality-assured data and located within South Carolina and within Florida, Georgia, and North Carolina; SO 2 emissions trends both statewide (for the years 2008, 2011, and 2014) and for the State's title V sources (for the years 2008-2016); available SO 2 modeling data for the State's round 3 DRR-subject sources; and State and federal regulations and State statutes that establish requirements for sources of SO 2 emissions. South Carolina noted that federal regulations and competition from lower natural gas prices resulted in four coal-fired electric generating units (EGUs) within the State either shutting down or switching to cleaner fuels. The State identified these units and summarized the history of the shutdowns and switches to cleaner fuels. South Carolina also included SO 2 emissions trends for the Southeast from 2000-2016 and noted that there is a consistent downward trend.

Based on this weight of evidence analysis, the State concluded that emissions within South Carolina will not contribute significantly to nonattainment or interfere with maintenance of the 2010 1-hour SO 2 NAAQS in any other state. The State based its conclusions for Prong 1 on the actual and projected downward trends of SO 2 emissions in South Carolina, trends in SO 2 DVs for South Carolina's monitors and other states' monitors within 50 km of the South Carolina border, DRR modeling results, and established federal and State control measures affecting SO 2 . The State based its conclusions for Prong 2 on emissions trends of SO 2 in South Carolina and in the Southeast and established federal and State control measures which reduce SO 2 emissions. EPA's evaluation of South Carolina's submission is detailed in sections III.B, C, and D.

EPA believes that a reasonable starting point for determining which sources and emissions activities in South Carolina are likely to impact downwind air quality in other states with respect to the 2010 1-hour SO 2 NAAQS is by using information in EPA's National Emissions Inventory (NEI). 14 The NEI is a comprehensive and detailed estimate of air emissions for criteria pollutants, criteria pollutant precursors, and hazardous air pollutants from air emissions sources that is updated every three years using information provided by the states and other information available to the EPA. EPA used the 2014 NEI (version 2), the most recently available, complete, and quality assured dataset of the NEI. Table 1 shows that point sources in South Carolina contribute approximately 89 percent of the State's total SO 2 emissions, followed by nonpoint sources at six percent and fires at four percent.

SC DHEC provided NEI data for the years 2008, 2011, and 2014, which showed a decrease in SO 2 emissions in the State of approximately 73 percent from 2008 to 2014. SC DHEC notes in its submission that the largest sources of SO 2 emissions in South Carolina are power plants and other industrial facilities that burn fossil fuels. According to the NEI data in the State's submission and the 2014 NEI version 2 (shown in Table 2), the majority of SO 2 emissions in South Carolina originate from fuel combustion at point sources. 15 In 2014, the total SO 2 emissions from fuel combustion point sources in South Carolina comprised approximately 72 percent of the total SO 2 emissions in the State. Because emissions from the other listed source categories are more dispersed throughout the State, those categories are less likely to cause high ambient concentrations when compared to a point source on a ton-for-ton basis. Therefore, EPA believes that it is appropriate to focus the analysis on SO 2 emissions from fuel combustion at South Carolina's point sources which are located within the “urban scale,” i.e., within 50 km of one or more state borders.

EPA's current implementation strategy for the 2010 1-hour SO 2 NAAQS includes the flexibility to characterize air quality for stationary sources via either data collected at ambient air quality monitors sited to capture the points of maximum concentration, or air dispersion modeling. EPA's assessment of SO 2 emissions from fuel combustion at South Carolina's point sources located within approximately 50 km of another state and their potential impact on neighboring states is informed by all available data at the time of this rulemaking. 16

As discussed in section I.B., many air agencies used air dispersion modeling to characterize air quality in the vicinity of large SO 2 emitting sources to identify the maximum 1-hour SO 2 concentrations in ambient air which informed EPA's round 2 and 3 SO 2 designations. These designations were based on EPA's application of the nationwide analytical approach to, and technical assessment of, the weight of evidence for each area, including but not limited to available air quality monitoring data and air quality modeling results. The 2010 1-hour SO 2 standard is violated at an ambient air quality monitoring site (or in the case of dispersion modeling, at an ambient air quality receptor location) when the 3-year average of the annual 99th percentile of the daily maximum 1-hour average concentrations exceeds 75 ppb, as determined in accordance with Appendix T of 40 CFR part 50. EPA's preferred modeling platform for regulatory purposes is AERMOD (Appendix W of 40 CFR part 51). 17 In most modeling analyses, the impacts of the actual emissions for one or more of the recent 3-year periods ( e.g., 2012-2014, 2013-2015, 2014-2016) were considered, and in some cases the modeling was of currently effective limits on allowable emissions in lieu of or as a supplement to modeling of actual emissions.

The available air dispersion modeling of large SO 2 sources can support transport related conclusions about whether sources in one state are potentially causing or contributing to violations of the 2010 1-hour SO 2 standard in other states. While AERMOD was not designed specifically to address interstate transport, the 50-km distance that EPA recommends for use with AERMOD aligns with the urban monitoring scale, and thus, EPA believes that the use of AERMOD provides a reliable indication of air quality for transport purposes.

As described in this section, EPA proposes to conclude that an assessment of South Carolina's satisfaction of the prong 1 and 2 requirements under section 110(a)(2)(D)(i)(I) of the CAA for the 2010 1-hour SO 2 NAAQS may be reasonably based upon evaluating the downwind impacts of SO 2 emissions from fuel combustion at South Carolina's point sources located within approximately 50 km of another state and upon any regulations intended to address fuel combustion at South Carolina's point sources.

Prong 1 of the good neighbor provision requires states' plans to prohibit emissions that will significantly contribute to nonattainment of a NAAQS in another state. SC DHEC confirms in its submission that South Carolina's SIP contains adequate provisions to prevent sources and other types of emissions activities within the State from contributing significantly to nonattainment in any other state with respect to the 2010 1-hour SO 2 standard. To evaluate South Carolina's satisfaction of prong 1, EPA assessed the State's implementation plan with respect to the following factors: (1) SO 2 ambient air quality and emissions trends for South Carolina and neighboring states; (2) potential ambient impacts of SO 2 emissions from certain facilities in South Carolina on neighboring states based on available air dispersion modeling results; (3) State statutes and SIP-approved regulations that address SO 2 emissions; and (4) federally enforceable regulations that reduce SO 2 emissions. A detailed discussion of South Carolina's SIP submission with respect to each of these factors follows. 18 EPA proposes that these factors, taken together, support the Agency's proposed determination that South Carolina's SIP adequately prohibits emissions that will significantly contribute to nonattainment of the 2010 1-hour SO 2 NAAQS in another state. EPA's proposed conclusion is based, in part, on the fact that the Agency does not have information indicating that there are violations of the 2010 1-hour SO 2 NAAQS in the surrounding states. In addition, the downward trends in SO 2 emissions and DVs for air quality monitors in the State, combined with federal and State regulations and statutes affecting SO 2 emissions of South Carolina's sources, further support EPA's proposed conclusion.

In its June 25, 2018, SIP revision, SC DHEC summarized how each of the State's sources subject to the DRR elected to comply with this rule by either taking a federally-enforceable limit or using either modeling or monitoring to characterize SO 2 air quality around the source. Of the eight sources in the State subject to the DRR, three accepted federally-enforceable permit limits and five sources conducted dispersion modeling. 19 SC DHEC provided a summary of the air dispersion modeling results for the five modeled sources: Century Aluminum of South Carolina  20 (Century Aluminum); International Paper-Eastover Mill (IP Eastover); Resolute FP US INC (Resolute); Santee Cooper Cross Generating Station (Santee Cooper Cross); and SCE&G Wateree Station (SCE&G Wateree). IP Eastover and SCE&G Wateree were modeled together. Of these five sources, one source (Resolute) is within 50 km of another state (North Carolina) at approximately 7 km using the nearest property boundary to North Carolina and modeled a maximum 2010 1-hour SO 2 DV of 69 ppb. SC DHEC notes that Resolute used a modeling grid which extended approximately 4 km into North Carolina. A summary of the modeling results for Resolute, including supplemental data EPA has reviewed as part of the Agency's analysis, is shown in Table 3 of section III.C.1.b of this action.

For the SO 2 air dispersion modeling factor, EPA evaluated the DRR modeling data in South Carolina's June 25, 2018, submission for sources in the State and supplemented this data with available, existing DRR modeling results for sources in the adjacent states of Georgia and North Carolina that are within 50 km of the South Carolina border. 21 The purpose of evaluating modeling results in adjacent states within 50 km of the South Carolina border is to ascertain whether these areas are attaining the 2010 1-hour SO 2 standard and, if not, whether any nearby sources in South Carolina are contributing to a NAAQS violation. In addition, EPA identified South Carolina SO 2 emission sources emitting greater than 100 tons of SO 2 in 2017 that are not subject to the DRR and are located up to 50 km from South Carolina's border to evaluate whether the SO 2 emissions from these sources could interact with SO 2 emissions from the nearest source in a neighboring state in such a way as to contribute significantly to nonattainment in that state.

Table 3 provides a summary of the modeling results for Resolute, the one modeled DRR source in South Carolina which is located within 50 km of another state (North Carolina). The modeling analyses for Resolute resulted in no modeled violations of the 2010 1-hour SO 2 NAAQS within the 50-km area surrounding the facility and no violations of the standard within the modeling domain which extends into North Carolina. All other areas within 50 km of Resolute are contained within South Carolina's borders. As a result, no further analysis of any other neighboring states is necessary for assessing the impacts of the interstate transport of SO 2 pollution from Resolute.

Table 4 provides a summary of the modeling results for DRR sources in other neighboring states which are located within 50 km of South Carolina and which elected to provide air dispersion modeling under the DRR: Three sources in Georgia (Georgia Power Company—Plant McIntosh (Plant McIntosh), Georgia-Pacific Consumer Products—Savannah River Mill (Savannah River Mill), International Paper—Savannah (IP-Savannah))  22 and two sources in North Carolina (Allen Steam Station—Duke Energy Carolinas, LLC (Duke-Allen)  23 and Duke Energy's Marshall Steam Station (Duke-Marshall)). 24 The predicted maximum impacts from the model did not violate the 2010 1-hour SO 2 NAAQS for any of the five sources. 25

A. Does this action apply to me? Tribes, states, local governments, the regulated community, and citizens interested in federal jurisdiction over activities that may release pollutants to groundwater may be impacted by this Interpretive Statement. Potentially affected entities include:

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by EPA's interpretation of the scope of the CWA NPDES program. Other types of entities not listed in the table could also be affected. If you have questions regarding the effect of this action on a particular entity, please consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

B. How can I get copies of this document and other related information? You may access this document electronically at https://www.epa.gov/npdes/releases-point-source-groundwater or at https://www.federalregister.gov . EPA has established an official public docket for receiving comments under Docket ID No. EPA-HQ- OW-2019-0166 which is accessible electronically at http://www.regulations.gov that will also contain copies of this Federal Register notice and the Interpretive Statement. The public docket does not include Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. The official public docket is the collection of materials that is available for public viewing at the Water Docket in the EPA Docket Center, (EPA/DC) EPA West, Room B102, 1301 Constitution Ave. NW, Washington, DC. The EPA Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the Water Docket is (202) 566-2426.

On February 20, 2018, EPA requested public comment regarding whether EPA should review and potentially revise or clarify its previous statements concerning the applicability of the CWA NPDES permit program to pollutant releases from point sources that reach jurisdictional surface waters via groundwater that has a direct hydrologic connection to a jurisdictional surface water (the “direct hydrologic connection theory”). 83 FR 7126, 7128 (Feb. 20, 2018). EPA asked for specific comment on questions related to CWA authority, other programs that address these releases, what issues needed further clarification, and what format EPA should pursue if it chose to revise or clarify its position. Id. EPA received over 50,000 comments in response to its request. Comments addressed the specific questions raised by EPA as well as other pertinent topics. EPA received comments from a wide audience representing state governments, local governments, tribes, industry, environmental organizations, academia, and private citizens. See EPA Docket No. EPA-HQ-OW-2018-0063, available at https://www.regulations.gov/docket?D=EPA-HQ-OW-2018-0063 .

Some commenters opposed the direct hydrologic connection theory on programmatic and legal grounds. These comments raised concerns regarding the activities that might be impacted if a NPDES permit is required for a release to groundwater with a direct hydrologic connection to jurisdictional surface water, including aquifer recharge, leaks from sewage collection systems, septic system discharges, treatment systems such as constructed wetlands, spills and accidental releases, manure management and coal ash impoundment seepage. These commenters also raised implementation concerns, including how a direct hydrologic connection would be defined and where monitoring or the point of compliance would be determined. Commenters opposed to the direct hydrologic connection theory raised a range of legal arguments, including that the theory was not grounded in the statutory text, pointing in particular to the absence of the term “groundwater” from sections authorizing the NPDES program and providing excerpts from the Act's legislative history.

Other commenters supported the direct hydrologic connection theory, raising concerns based on the prior examples of environmental impacts from releases to groundwater with a direct hydrologic connection to jurisdictional surface water, and the importance of the authority to regulate or prevent those releases pursuant to the CWA. These commenters asserted that the CWA's goal of protecting surface waters encompassed releases to groundwater that could reach jurisdictional surface waters, and that groundwater itself does not need to be jurisdictional under the CWA in order to regulate discharges that pass through groundwater and ultimately may reach surface water.

EPA has considered these comments, as well as the text, structure and legislative history of the CWA, and concludes that the interpretation expounded in the Interpretative Statement below is the best, if not the only, reading of the CWA, is more consistent with Congress's intent than other interpretations of the Act, and best addresses the question of NPDES permit program applicability for pollutant releases to groundwater within the authority of the CWA.

Subject: Application of the Clean Water Act National Pollutant Discharge Elimination System Program to Releases of Pollutants From a Point Source to Groundwater.

From: Matthew Z. Leopold (signed and dated April 12, 2019), General Counsel.

David P. Ross (signed and dated April 12, 2019), Assistant Administrator for Water.

To: Regional Administrators, Regions I-X.

This Interpretive Statement sets forth the Environmental Protection Agency's (“EPA” or “the Agency”) interpretation of the Clean Water Act (“the CWA” or “the Act”) National Pollutant Discharge Elimination System (“NPDES”) permit program's applicability to releases of pollutants from a point source to groundwater that subsequently migrate or are conveyed by groundwater to jurisdictional surface waters. For the reasons explained below, EPA concludes that the Act is best read as excluding all releases of pollutants from a point source to groundwater from NPDES program coverage and liability under Section 301 of the CWA, regardless of a hydrologic connection between the groundwater and a jurisdictional surface water. See 33 U.S.C. 1311(a), 1342.

This Interpretive Statement is the first instance in which the Agency has issued guidance focused exclusively on whether NPDES permits are required for releases of pollutants to groundwater that reach surface water. As described further below, there is a mixed record of prior Agency statements addressing this issue and a split in the federal circuit courts regarding the application of the NPDES permit program to releases of pollutants to groundwater that reach jurisdictional surface waters. Recent judicial decisions addressing this issue contribute to an evolving and increasingly confusing legal landscape in which permitting and enforcing agencies, potentially regulated parties, and the public lack clarity on when the NPDES permitting requirement set forth in sections 301 and 402 of the CWA may be triggered by releases of pollutants to groundwater. The absence of a dedicated EPA statement on the best reading of the CWA has generated confusion in the courts and uncertainty for EPA regional offices and states implementing the NPDES program, regulated entities, and the public. This Interpretive Statement is intended to advise the public on how EPA interprets the relevant provisions of the CWA.

This Interpretive Statement conveys to EPA's regional offices, states, and the public the Agency's reading of the applicability of sections 301 and 402 of the CWA to releases of pollutants to groundwater. It contains the Agency's most comprehensive analysis of the CWA's text, structure, legislative history, and judicial decisions that has been lacking in prior Agency statements on this issue. EPA thus herein provides clear guidance that balances the statute, case law, and the need for clarity on the scope of the CWA NPDES coverage, which has been recently expanded by judicial decision to potentially reach a new set of releases to groundwater that EPA has not historically regulated in the NPDES program. This Interpretive Statement provides important clarity to inform future permitting decisions and other actions; it neither alters legal rights or obligations nor changes or creates law.

In February 2018, the Agency sought public comment on whether the NPDES permit program applies to releases of pollutants to groundwater and whether the Agency should revise or clarify its position on this issue. See 83 FR 7126, 7128 (Feb. 20, 2018). Informed by those comments and based on a holistic analysis of the statute, its text, structure, and legislative history, the Agency concludes that the best, if not the only, reading of the CWA is that Congress intentionally chose to exclude all releases of pollutants to groundwater from the NPDES program, even where pollutants are conveyed to jurisdictional surface waters via groundwater. Congress purposely structured the CWA to give states the responsibility to regulate such releases under state authorities. And, as discussed further below, other federal statutes contain explicit provisions that regulate the release of pollutants into groundwater to provide significant federal authority to address groundwater pollution not provided by the NPDES permitting program. In accordance with Congress's intent, state and federal authorities are collectively available to provide protection for ground and surface water quality in those instances where direct CWA permitting authority is not applicable.

During the pendency of EPA's review of the public comments received, two petitions for certiorari were filed with the Supreme Court which posed the question of whether the CWA applies to releases of pollutants from a point source to groundwater that migrates to surface water. See Petition for Writ of Certiorari, Cty. of Maui v. Hawai'i Wildlife Fund, et al. (“ County of Maui ”), No. 18-260 (Aug. 27, 2018); Petition for Writ of Certiorari, Kinder Morgan Energy Partners, L.P. v. Upstate Forever (“ Kinder Morgan ”), No. 18-268 (Aug. 28, 2018). Consistent with the United States' recommendation set forth in an amicus brief filed at the Court's request, the Supreme Court recently granted the petition for writ certiorari in County of Maui, an appeal of the Ninth Circuit's broad reading of the CWA. Cty. of Maui, No. 18-260 (S. Ct. cert granted on Feb. 19, 2019). Issuing this statement provides necessary clarity on the Agency's interpretation of the statute given the mixed record of prior Agency statements and a split in the federal circuit courts regarding this issue.

The interpretation contained herein differs from the direct hydrological connection theory, expressed in the United States amicus brief filed in the Ninth Circuit County of Maui proceeding, and the theories advanced by the parties in that case. The Agency does not agree with the respondents' and Ninth Circuit's view that the CWA's NPDES requirements can apply when a pollutant released from a point source migrates to navigable waters through groundwater. The differences between the direct hydrological connection theory and today's interpretation, and EPA's explanation for why the Agency is modifying and clarifying its interpretation, are detailed below. While the Agency disagrees with the reasoning of the Ninth Circuit's decision in County of Maui, as well as the reasoning of the Fourth Circuit in its Kinder Morgan decision, for reasons discussed further below, it will nonetheless apply the decisions of those courts in their respective circuits until further clarification from the Supreme Court. See Hawai'i Wildlife Fund v. Cty. of Maui, 886 F.3d. 737 (9th Cir. 2018); Upstate Forever v. Kinder Morgan Energy Partners, L.P., 887 F.3d 637, 652 (4th Cir. 2018). Thus, the Agency's interpretation set forth herein applies at this time only outside of the Fourth and Ninth Circuits. 1

It is a fundamental principle of hydrology that many groundwaters and surface waters are linked through the hydrologic cycle. As the Agency has previously explained, the “hydrologic cycle involves the continual movement of water between the earth and the atmosphere through evaporation and precipitation.” EPA 440/6-90-004, Citizen's Guide to Ground-Water Protection (1990). Rain and snow fall to the earth, and the resulting water runs into surface waters, evaporates, is absorbed by plant roots, or infiltrates the ground's surface and moves downward to the saturated zone, “the area in which all interconnected spaces in rocks and soil are filled with water,” also known as groundwater. Id. at 1. In areas where the saturated zone occurs at the ground's surface, groundwater discharges into surface waters, eventually evaporating into the atmosphere to form precipitation and begin the hydrologic cycle again. Id.

The nature of the connection between groundwater and surface water is highly dependent on local climate, topography, geology and the type of groundwater formation at issue. Because of the often-slow movement of groundwater, pollutants tend to remain concentrated in the form of a plume. The speed and concentration at which pollutants move through groundwater depend on the amount and type of pollutant, its solubility and density, and the speed of the surrounding groundwater. The amount of a pollutant that is released into groundwater that will eventually reach surface water also varies and is dependent on both the characteristics of the pollutant itself as well as site-specific factors. In addition, the travel time and distance between polluted groundwater and surface water can allow for the reduction of the impacts of contamination on the surface water due to natural processes. These processes include, for example, dilution, oxidation, biological degradation (which can render pollutants less toxic), and the binding of materials to soil particles such that pollutants are adsorbed by surrounding soil before reaching surface water.

Many commenters responding to EPA's February 2018 Federal Register notice identified activities that have not generally been required to obtain an NPDES permit and might be impacted if a permit were required for a release to groundwater with a hydrologic connection to jurisdictional surface waters. Activities listed by commenters included aquifer recharge, leaks from sewage collection systems, septic system discharges, treatment systems such as constructed wetlands, spills and accidental releases, manure management, and coal ash impoundment seepage.

Septic systems, for example, generally operate by discharging liquid effluent into perforated pipes buried in a leach field, chambers, or other special units designed to slowly release the effluent into soil. The soil accepts, treats, and disperses wastewater as it percolates through the soil, but can in certain circumstances ultimately enter groundwater. Over 26 million homes in the United States employ septic systems to treat and dispose of household waste. As the Agency has explained, “[r]ecycled water from a septic system can help replenish groundwater supplies; however, if the system is not working properly, it can contaminate nearby waterbodies.” See EPA, Septic Systems and Surface Water, https://www.epa.gov/septic/septic-systems-and-surface-water . But even well-functioning septic systems can contribute pollutants such as nutrients to groundwater. In addition to household waste disposal, releases to groundwater are also employed as part of green infrastructure projects, including the management of stormwater. These projects release stormwater and recycled wastewater to the ground to recharge depleted aquifers and prevent or reduce runoff to surface waters. In arid western states experiencing low rainfall, states and municipalities use such surface infiltration of recycled wastewaters not only to replenish groundwater supplies, but also to mitigate salt water intrusion or abate land subsidence that can occur where groundwater is overly depleted.

To date, neither EPA nor states have generally required NPDES permits for these types of activities, and in the select instances where NPDES permits have been required for discharges from a point source that reach jurisdictional surface waters via groundwater, they have been based on site-specific factors.

The objective of the CWA is “to restore and maintain the chemical, physical, and biological integrity of the Nation's waters.” 33 U.S.C. 1251(a). In order to meet that objective, Congress declared two national goals: (1) “that the discharge of pollutants into the navigable waters be eliminated by 1985;” and (2) “that wherever attainable, an interim goal of water quality which provides for the protection and propagation of fish, shellfish, and wildlife and provides for recreation in and on the water be achieved by July 1, 1983. . . .” Id. § 1251(a)(1)-(2). The CWA approaches restoration and protection of the Nation's waters as a partnership between states and the federal government, assigning certain functions to each in striking the balance of the statute's overall regulatory scheme. Congress expressly recognized the role that states would continue to exercise in preventing, reducing, and eliminating pollution: “It is the policy of Congress to recognize, preserve, and protect the primary responsibilities and rights of States to prevent, reduce, and eliminate pollution, to plan the development and use (including restoration, reservation, and enhancement) of land and water resources[.]” Id. § 1251(b). As the Supreme Court has explained, the statute “anticipates a partnership between the States and the Federal Government,” toward a shared objective of restoring and maintaining the integrity of the Nation's waters. Arkansas v. Oklahoma, 503 U.S. 91, 101 (1992).

To accomplish the Act's broad national objective, Congress established respective roles for the federal government and for states. As one means of accomplishing the Act's objective, Congress prohibited any “discharge of any pollutant” to “navigable waters” or to the “contiguous zone or the ocean” unless it is authorized by the statute, generally by a NPDES permit. 33 U.S.C. 1311(a) (“Except as in compliance with this section and sections 1312, 1316, 1317, 1328, 1342, and 1344 of this title, the discharge of any pollutant by any person shall be unlawful.”). The Act defines navigable waters as “the waters of the United States, including the territorial seas.” Id. § 1362(7). EPA's regulations have never defined “waters of the United States” to include groundwater.

The statute defines “discharge of a pollutant” as “any addition of any pollutant to navigable waters from any point source” or “any addition of any pollutant to the waters of the contiguous zone or the ocean from any point source other than a vessel or other floating craft.” 33 U.S.C. 1362(12). A point source is defined as “any discernible, confined, and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, or vessel or other floating craft, from which pollutants are or may be discharged.” Id. § 1362(14).

Where there is a discharge of a pollutant from a point source to a water of the United States, termed herein a jurisdictional surface water, NPDES permits generally require permittees to meet numeric or narrative effluent limitations. Id. §§ 1311(a), 1342(a). Effluent limitations are defined as “any restriction established by a State or the Administrator on quantities, rates, and concentrations of chemical, physical, biological, and other constituents which are discharged from point sources into navigable waters, the waters of the contiguous zone, or the ocean, including schedules of compliance.” Id. § 1362(11).

Courts have observed that nonpoint source pollution—the broad category of other forms of water pollution that do not fall within the point source definition and not defined under the Act—can be understood as “all water quality problems not subject to Section 402,” the portion of the statute requiring NPDES permits. Nat'l Wildlife Fed'n v. Gorsuch, 693 F.2d 156, 166 (D.C. Cir. 1982). In addition to the NPDES permitting program, as another means of accomplishing the Act's objective, Congress reserved to states their exclusive role in regulating nonpoint source pollution. Am. Farm Bureau Fed'n v. EPA, 792 F.3d 281, 289 (3rd Cir. 2015) (“States in turn regulate nonpoint sources. There is significant input and oversight from the EPA, but it does not regulate nonpoint sources directly.”); see also Or. Natural Desert Ass'n v. U.S. Forest Serv., 550 F.3d 778, 780 (9th Cir. 2008) (“The CWA's disparate treatment of discharges from point sources and nonpoint sources is an organizational paradigm of the Act.”).

While the point and nonpoint source distinction is the quintessential inquiry related to the discharge of pollutants to surface waters, as explained further below, this inquiry is not relevant as applied to groundwater. Rather, the text, structure, and legislative history of the CWA demonstrate Congress's intent to leave the regulation of groundwater wholly to the states under the Act. See, e.g., Village of Oconomowoc Lake v. Dayton Hudson Corporation, 24 F.3d 962, 965 (7th Cir. 1994) (“[T]he Clean Water Act does not attempt to assert national power to the fullest . . . . Congress elected to leave [regulation of groundwaters] to state law[.]”); Tenn. Clean Water Network v. TVA, 905 F.3d 436, 439 (6th Cir. 2018) (“[T]he CWA is restricted to regulation of pollutants discharged into navigable waters . . . leaving the states to regulate pollution of non-navigable waters” such as groundwater.).

The CWA's definition of the “discharge of [a] pollutant,” 33 U.S.C. 1311(a), includes “any addition of any pollutant to navigable waters from any point source,” 33 U.S.C. 1362(12)(A). Because groundwater is not a “navigable water[ ],” see 33 U.S.C. 1362(7), the CWA does not regulate discharges to groundwater as such. But the question of whether a “discharge” within the statute's meaning has occurred when a pollutant is released from a point source, travels through groundwater, and ultimately migrates to navigable waters has generated confusion and uncertainty. 2

Commenters to EPA's February 2018 Federal Register notice rely primarily on one of two interpretive possibilities for addressing this question. One approach is reflected in the court of appeals' decisions in County of Maui and Kinder Morgan . In those cases, the courts interpreted Section 1362(12)(A) as applying to discharges from a point source to navigable waters where the pollutant has travelled to the navigable water over or through another medium. On this view, to qualify as a discharge “to navigable waters,” a discharge via groundwater must, in the Ninth Circuit, be “fairly traceable” back to the point source and more than de minimis, Cty. of Maui, 886 F.3d at 746 n.2, and in the Fourth Circuit, “must be sufficiently connected to navigable waters,” Kinder Morgan, 887 F.3d at 651. Those courts and commentators who have endorsed these variations on a similar approach have differed in describing the type of connection that qualifies under the CWA, but they generally agree that a “discharge of a pollutant” may occur when a pollutant has been added to a navigable water via groundwater with some connection to the navigable water.

A second interpretive approach is reflected in the Sixth Circuit's decision in Kentucky Waterways Alliance v. Kentucky Utilities Co., 905 F.3d 925 (6th Cir. 2018). In that case, the court read the relevant statutory language as applying only where pollution has been added directly to navigable waters “by virtue of a point-source conveyance,” rather than through some other mechanism (such as groundwater). Id. at 934. Under this interpretation, sometimes described as the “terminal point source” theory, any intermediary between the point source and the navigable water means that a pollutant has not been discharged “to [the] navigable water[ ] from [the] point source.”

EPA's interpretation differs from these two theories. The Agency's view is that the best, if not the only, reading of the statute is that all releases to groundwater are excluded from the scope of the NPDES program, even where pollutants are conveyed to jurisdictional surface waters via groundwater. This interpretation is appropriately tailored to releases to groundwater. On this view, because the CWA clearly evinces a purpose not to regulate groundwater, and because groundwater is extensively regulated under other statutory regimes, discussed further below in section VI.B, any circumstance in which a pollutant is released from a point source to groundwater is categorically excluded from the CWA's coverage. The interposition of groundwater between a point source and the navigable water thus may be said to break the causal chain between the two, or alternatively may be described as an intervening cause. Today's interpretation pertains to releases to groundwater and thus leaves in place the Agency's case-by-case approach to determining whether pollutant releases to jurisdictional surface waters that do not travel through groundwater require an NPDES permit. Whether a permit is required for such a release is necessarily a fact-specific inquiry, informed by the point source definition and an analysis of intervening factors.

In the Agency's view, the text, structure, and legislative history of the CWA, as well as the better-reasoned judicial decisions, support the legal conclusion that Congress intended to exclude all releases of pollutants to groundwater from NPDES program coverage, regardless of a hydrologic connection or conveyance to jurisdictional surface water. When attempting to interpret a statute, a court or agency cannot look to one single word or phrase, but instead must look to the text as a whole. See Star Athletica, LLC v. Varsity Brands, Inc., 137 S. Ct. 1002, 1010 (2017); Dole v. United Steelworkers of Am., 494 U.S. 26, 35 (1990) (“[W]e are not guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy.”). While no single provision of the CWA expressly addresses whether pollutants discharged from a point source that reach jurisdictional surface waters through groundwater are subject to NPDES permitting requirements, when analyzing the statute in a holistic fashion, Congress's intent becomes evident: Congress did not intend for the NPDES program to address any pollutant discharges to groundwater, even where groundwater may be hydrologically connected to surface waters. Relevant legislative debate confirms that Congress fully understood the hydrologic connections that exist between groundwater and surface water, yet chose this jurisdictional line to strike the balance between state and federal responsibility for protection of the Nation's waters.

Congress was explicit where it intended the Act to apply to groundwater. It included references to groundwater in provisions aimed at providing information, guidance, and funding to states, to enable them to regulate pollutant discharges to groundwater. Explicit reference to groundwater, by contrast, is absent in the operative regulatory sections of the Act. Further, Congress refers to groundwaters exclusively as one unified category of waters; the Act is devoid of any indication that Congress viewed releases of pollutants to groundwater as susceptible to different treatment under the Act based on the presence or absence of a connection to surface water. The legislative history is unambiguous that Congress was aware of the potential for releases to groundwater to reach surface water, and nonetheless rejected proposed amendments seeking to require NPDES permits for discharges to groundwater. As with nonpoint source pollution, the statute's structure and references to groundwater therein are reflective of Congress's intent to leave regulation of releases of pollutants to groundwater with the states.

A. The operative, enforceable provisions of the Clean Water Act that make up the NPDES permitting program neither reference nor contemplate releases to groundwater.

The foundational definitional terms and provisions that establish the NPDES program extend only to discharges of pollutants to navigable waters, waters of the contiguous zone, and the ocean, i.e., discharges to jurisdictional surface waters. The Act provides that a NPDES permit may be issued “for the discharge of any pollutant.” 33 U.S.C. 1342(a). The definition of discharge of a pollutant refers to “any addition of any pollutant to navigable waters from any point source,” or “any addition of any pollutant to the waters of the contiguous zone or the ocean from any point source.” Id. § 1362(12) (emphasis added). The Act thus explicitly refers to the addition of any pollutant to three of the four categories of waters referred to throughout the statute; the addition of any pollutant to groundwater—the fourth category—is notably absent. Congress specified which sections of the Act applied to which categories of waters: groundwater, navigable waters, contiguous zone waters, and the ocean. See, e.g., id. § 1254(a)(5) (setting forth provisions aimed at monitoring the quality of “the navigable waters and ground waters and the contiguous zone and the oceans”); § 1314(a)(2) (requiring that the Administrator shall publish information on the “factors necessary to restore and maintain the chemical, physical, and biological integrity of all navigable waters, ground waters, waters of the contiguous zone, and the oceans”). In other words, “when Congress wanted certain provisions of the CWA to apply to groundwater, it stated so explicitly.” Umatilla Waterquality Protective Ass'n. v. Smith Frozen Foods, 962 F. Supp. 1312, 1318 (D. Or. 1997).

Congress also elected to leave groundwater out of the definition of “effluent limitations” and related provisions. Effluent limitations are defined as “any restriction established by a State or the Administrator on quantities, rates, and concentrations of chemical, physical, biological, and other constituents which are discharged from point sources into navigable waters, the waters of the contiguous zone, or the ocean, including schedules of compliance.” 33 U.S.C. 1362(11) (emphasis added). Similarly, section 304(g), establishing the requirement that EPA publish certain guidelines to assist states in implementing their NPDES program, provides that these guidelines will apply to control discharges to every form of water except groundwater. See id. § 1314(g) (providing that, for the purposes of assisting states in carrying out NPDES programs, EPA shall publish guidelines “to control and prevent the discharge into the navigable waters, the contiguous zone, or the ocean”).

The absence of groundwater in the sections of the statute foundational to the NPDES permitting program is meaningful: “[a] familiar principle of statutory construction . . . is that a negative inference may be drawn from the exclusion of language from one statutory provision that is included in other provisions of the same statute.” Hamdan v. Rumsfeld, 548 U.S. 557, 578 (2006). Here, Congress elected not to include groundwater in the definition of “discharge of a pollutant”—the critical definition in determining whether a NPDES permit is required—nor did Congress include groundwater in the definition of “effluent limitations,” a primary vehicle in implementing the NPDES permitting requirement. See Umatilla, 962 F. Supp. at 1318 (“[T]hroughout the CWA, Congress appeared to have four categories of waters in mind—`navigable waters,' the contiguous zone, the ocean, and `ground waters.' Only the first three of these . . . are included within the definition of `discharge of a pollutant,' indicating that Congress did not consider discharges to groundwater to be discharges that would trigger the NPDES requirement.”).

Congress's intent to deliberately leave groundwater out of the definition of “discharge of a pollutant” is confirmed by the legislative history of the Act. In a hearing before the House Public Works Committee, Representative Leslie Aspin recommended that the term “ground water” be added to the operative NPDES provisions so that discharges to groundwater also would be covered by the statute, explaining that “[s]ometimes a navigable water and ground-water source run into each other, or come close to each other, so that seepage from polluted ground-water source could pollute the navigable water[;] . . . [t]o say that the Federal Government can regulate the ecology of one, but not the other, is silly and counterproductive.” Water Pollution Control Legislation-1971 (Proposed Amendments to Existing Legislation): Hearings before the H. Comm. on Pub. Works, 92nd Cong. 793 (1971) (remarks of Rep. Aspin) (emphasis added).

Representative Aspin went on to propose an amendment to regulate groundwater under the NPDES program by amending Title IV of the statute to include explicit references to groundwater and adding the term “ground waters” to the definition of “discharge of pollutant” found in Section 502(12). He explained that these amendments were necessary given the likelihood that polluted groundwater would contaminate jurisdictional surface waters:

118 Cong. Rec. 10,666 (1972), 1 Leg. Hist. 589 (remarks of Rep. Aspin) (emphasis added). The amendments were rejected by a vote of 86 to 34. Id. at 597. The failure of a proposed amendment “strongly militates against a judgment that Congress intended a result that it expressly declined to enact.” Gulf Oil Corp. v. Copp Paying Co., 419 U.S. 186, 200 (1974).

The only section in the extensive NPDES permitting provisions where discharges to groundwater are contemplated is section 402(b)(1)(D), which sets forth the requirements for EPA approval of state programs to assume NPDES authority. This section requires that to approve a state-submitted NPDES program, the Administrator must determine that adequate authority exists within the state to “control the disposal of pollutants into wells.” 33 U.S.C. 1342(b)(1)(D). The Fifth Circuit found this provision significant in rejecting EPA's prior view that it had authority to regulate groundwater pollution resulting from deep-well disposal, observing that “[t]he simple requirement of § 402(b)(1)(D) that state permit programs have adequate authority to issue permits which control the disposal of pollutants into wells, which is not fleshed out elsewhere in the Act or mirrored in any of the sections setting forth the Administrator's powers, is entirely consistent” with Congress's intention to “stop short of establishing federal controls over groundwater pollution.” Exxon Corp. v. Train, 554 F.2d 1310, 1324 (5th Cir. 1977).

The legislative history of 402(b)(1)(D) illuminates Congress's intent in the CWA to require states, but not the federal government, to regulate deep well disposal, which is consistent with its intent to leave regulation of all pollutant discharges to groundwater to states. The Senate Committee on Public Works report explains that, like the House, the Senate Committee rejected amendments to impose federal regulation over groundwater but included the provision in section 402(b)(1)(D) requiring states to maintain programs to regulate deep well disposal to encourage states to carry out such regulation. Specifically, the report explained that:

S. Rep. No. 414, 92d Cong., 1st. Sess. at 73 (1971), 2 Legislative History of the Water Pollution Control Act Amendments of 1972, at 1491 (emphasis added); see also 118 Cong. Rec. 10667 (1972), 1 Leg. Hist. 591 (remarks of Rep. Clausen) (opposing amendment to require NPDES permits for discharges to groundwater and stating that the House committee had “recognized the need for control of disposal of pollutants into wells in order to protect our ground waters. Therefore, in section 402(b)(1)(D) we provided that the Administrator shall approve a State program unless he determines that authority does not exist to control the disposal of pollutants into wells.”).

The legislative history makes evident that Congress declined to extend coverage of the NPDES program to discharges to groundwater and did so with the understanding that releases of pollutants to groundwater often reached jurisdictional surface water and could affect its quality. For example, at a 1971 hearing before the Senate Public Works Committee, then EPA Administrator William Ruckelshaus requested that EPA be granted authority to regulate groundwater quality, explaining the basis for that request as follows:

Water Pollution Control Legislation-1971 (Proposed Amendments to Existing Legislation): Hearings before the H. Comm. on Pub. Works, 92nd Cong. 230 (1971) (statement of Hon. William Ruckelshaus, Administrator, EPA) (emphasis added). This statement, before the same Senate Committee that rejected amendments to extend the scope of the NPDES program at the time of the passage of the Act, supports the conclusion that Congress was aware that contaminated groundwater could reach jurisdictional surface waters and nonetheless chose to leave releases to groundwater to state regulation in the CWA paradigm. As the Fifth Circuit observed in analyzing this legislative history, throughout the ensuing debate “there is not the slightest hint that any Member thought the bill would grant the Administrator any power to regulate deep-well disposal or any other form of groundwater pollution . Instead, all the evidence points to precisely the opposite understanding.” Exxon, 554 F.2d at 1329; see also Kelley on behalf of Michigan v. United States, 618 F. Supp. 1103, 1107 (W.D. Mich. 1985) (acknowledging the “unmistakably clear legislative history . . . demonstrat[ing] that Congress did not intend the Clean Water Act to extend federal regulatory and enforcement authority over groundwater contamination”).

B. Explicit references to groundwater are found in sections of the Act that serve to provide information, guidance, assistance, or funding to states in regulating groundwater, and in sections of the Act addressing state programs to control nonpoint source pollution.

The Act's provisions explicitly addressing groundwater can be placed into two groups. Analysis of these two groups of statutory references reinforces Congress's intent to leave regulation of groundwater—no matter how hydrologically connected to surface water—to the states. First, the Act contains forward-looking sections aimed at gathering information that could inform subsequent legislation and current state efforts to regulate discharges to groundwater. Indeed, “a clear pattern of congressional intent with respect to groundwaters emerges upon close examination of those sections of the Act that deal with the subject. That pattern is one of information gathering and encouragement of state efforts to control groundwater pollution—but not of direct federal control over groundwater pollution.” See Exxon, 554 F.2d at 1322. Second, the Act contains sections addressing state programs to manage nonpoint source pollution, evidencing Congress's intent to retain states' lead role with respect to both nonpoint source and groundwater pollution. The provisions described below are reflective of Congress's intent that states retain responsibility for addressing groundwater pollution, and that the federal government's role would be to provide resources, both in the form of information, funding or other support, for states to take on this issue. These resources and incentives for state programs, like the NPDES program, are an important component of the CWA, but one in which states retain regulatory decision-making and authority and elect to what extent they chose to utilize federal support.

Groundwater is first mentioned in the statute in Title I, setting forth “Research and Related Programs.” This Title contains several provisions directing EPA to address groundwater pollution through information gathering and coordination with states, as opposed to through binding regulatory requirements found elsewhere in the Act. See, e.g., 33 U.S.C. 1252, 1254. During the debate on the amendment to regulate discharges to groundwater through the NPDES program, Representative Donald H. Clausen, a member of the House Committee on Public Works and sponsor of the House bill, noted in explaining his opposition to the amendment that “it was determined by the committee that there was not sufficient information on ground waters to justify the types of controls that are required for navigable waters.” 118 Cong. Rec. 10667 (1972), 1 Leg. Hist. 591 (remarks of Rep. Clausen). He explained that the Committee recognized the need for additional information and research “both in determining the effect of underground disposal of pollutants and the migration of such pollutions.” Id. Thus, the Committee drafted “broad research” powers for EPA under Title I of the statute, and, based on that research, in the future, “Congress might have a basis for determining the need and appropriately extending the controls of H.R. 11896 as they apply to navigable waters to ground waters if needed.” Id.

Congress also included non-regulatory provisions focused on the protection of groundwater in Title II of the Act, in which Congress authorized EPA to make grants to states for the construction of publicly owned treatment works (POTWs). Of relevance here, Congress included a provision in section 202 authorizing increased funding for construction of POTWs if states provide a certificate indicating that the quantity of available groundwater will be “insufficient, inadequate, or unsuitable for public use, including the ecological preservation and recreational use of surface water bodies,” unless effluents from POTWs, after adequate treatment, are returned to the groundwater. 33 U.S.C. 1282(b)(2). This is an example of “Congress employ[ing] the power of the federal purse to encourage protection by the states of underground waters.” Exxon, 554 F.2d at 1323. Notably, this provision also links the quantity of available groundwater to “ecological preservation and recreational use of surface water bodies,” 33 U.S.C. 1282(b)(2), indicating Congress's decision to explicitly acknowledge and account for the connection between groundwater and jurisdictional surface waters when it chose to do so.

Title III of the CWA, “Standards and Enforcement,” also contains several provisions related to groundwater, each of which set forth non-regulatory information gathering requirements and provisions for guidance or funding to states. Section 304(a)(1) of the statute requires that the Administrator develop and publish water quality criteria, on, in pertinent part, the kind and extent of identifiable effects on health and welfare “which may be expected from the presence of pollutants in any body of water, including ground water.” 33 U.S.C. 1314(a)(1). Section 304(a)(2) requires that the Administrator develop and publish information on the factors necessary to restore and maintain the chemical, physical, and biological integrity of all navigable waters and ground waters. Id. § 1314(a)(2). Neither Section 304(a)(1) nor section 304(a)(2), however, create compliance obligations for individual dischargers. E. I. Du Pont de Nemours & Co. v. Train, 430 U.S. 112, 119 n.6 (1977) (“There is no provision for compliance with § 304, the guideline section.”). Rather, EPA's role in executing Section 1314(a) is to provide guidance to states. City of Albuquerque v. Browner, 865 F. Supp. 733, 738 (D.N.M. 1993) (“Section 304(a) of the Act requires EPA to develop criteria for water quality that reflect the latest scientific knowledge, and to provide those criteria to the States as guidance.”). As the Fifth Circuit observed, “the absence of other provisions in the Act . . . for transforming this information into enforceable limitations, strongly suggests that Congress meant to stop short of establishing federal controls over groundwater pollution, at least for the time being.” Exxon, 554 F.2d at 1325.

These provisions providing for support to states to regulate groundwater arise in the context of general informational support to states (sections 102, 104, and 304) and funding tied to protection of groundwater related to discharges from a specific type of facility (section 202). 33 U.S.C. 1252, 1254, 1282, 1314. Significantly, Congress also explicitly included groundwater in provisions addressing states' programs for control of nonpoint source pollution. These provisions, including sections 208, 304(f), and 319, together make up the portions of the Act in which Congress addressed nonpoint source pollution—not through regulatory requirements, but through support for state programs. Id. §§ 1288, 1314(f), 1329.

Section 208 of the statute is an example of a provision where Congress was concerned about nonpoint source pollution impacting groundwater, which it was aware could also reach surface water. That section requires that states submit to EPA “areawide waste treatment management plans,” which must include a process to control the disposal of pollutants on land or in subsurface excavation to “protect both ground and surface water quality.” Id. § 1288(a), (b)(2)(K) (emphasis added). The statute provides that areawide waste treatment management plans shall include a process to identify mine-related sources of pollution, such as surface and underground mine runoff, and the plans must also set forth procedures and methods to control those sources of runoff. Id. § 1288(a), (b)(2)(G). Thus, Congress viewed underground mine runoff, i.e., seepage to groundwater that could reach jurisdictional surface waters, as best dealt with for CWA purposes through an areawide waste treatment management plan for controlling nonpoint source pollution, rather than through the regulatory program under NPDES. See also id. § 1314(f) (directing the Agency to issue guidelines for identifying and evaluating types of nonpoint sources of pollutants, including “the disposal of pollutants in wells or in subsurface excavations”).

Congress's intent to treat releases to groundwater as analogous to nonpoint sources, subject to control by states, is further evidenced by analyzing section 319 of the statute, entitled “Nonpoint source management programs.” Section 319 was added to the statute in 1987 and includes requirements and related funding provisions directed at states to control pollution from nonpoint sources to navigable waters. Id. § 1329 (codifying Water Quality Act of 1987, Pub. L. 100-4, 319, 100 Stat. 7, 52). Section 319 authorizes the Administrator to give priority in making grants where States have implemented or are proposing to implement programs to “carry out ground water quality protection activities which the Administrator determines are part of a comprehensive nonpoint source pollution control program.” Id. § 1329(h)(5)(D). In addition, section 319 contains a groundwater-specific grant provision in 319(i), “Grants for Protecting Groundwater Quality,” for the purpose of assisting states in “carrying out groundwater quality protection activities” that will “advance the State toward implementation of a comprehensive nonpoint source pollution control program.” Id. § 1329(i)(1). Activities that could be supported by the grants include activities “to protect the quality of groundwater and to prevent contamination of groundwater from nonpoint sources of pollution.” Id. (emphasis added). This and the other provisions discussed in this section, aimed at equipping states with information and funding needed to enact programs to protect groundwater quality, stand in contrast to the sections of the statute, discussed above, that set forth enforceable limitations as well as the NPDES permitting and related provisions and contain no explicit mention of groundwater.

The Agency has for the first time conducted a public process, initiated by EPA's February 2018 Federal Register notice, regarding prior Agency statements addressing this issue, and, in conjunction with that process, has conducted a more-substantial review of its prior statements than previously undertaken by the Agency. As the Agency stated in that notice, “most of these statements were collateral to the central focus of a rulemaking or adjudication.” 83 FR at 7127. In fact, most of these statements do not include any explanation for the Agency's previous interpretation of the Act. As described above, EPA is now clearly stating its position on this issue in a comprehensive manner that is consistent with the text and legislative history of the CWA.

As commenters pointed out, there have been a range of prior statements by the Agency that align with the legal position articulated in this Interpretive Statement. For example, in a number of documents discussed below, the Agency has stated simply that discharges to groundwater are not subject to the CWA, without any qualification. The Agency has reexamined these statements in light of what the Agency views as the more appropriate legal question at issue here—whether the CWA categorically excludes releases of pollutants to groundwater from coverage under the Act—without drawing a distinction between isolated groundwater and groundwater with a direct hydrologic connection to jurisdictional surface waters. Viewed through this legal lens, the statements discussed below in section (A) are highly relevant, and supportive of the interpretation of the statute explained in this Interpretive Statement.

A selection of these prior statements identified by commenters are summarized below. Many commenters observed that lack of consistent and comprehensive direction from EPA on this issue has led to inconsistent interpretation across the country and has created uncertainty for regulated entities and the public. Even where the Agency stated an interpretation, the Agency has not issued regulations or guidance focused clearly on this issue. Thus, courts have attempted to fill this void, but have issued conflicting decisions about whether these releases are covered by the CWA. EPA's adoption of a precise position on this issue and thorough explanation of the reasons why the Agency's position is the best, if not the only, reading of the CWA will provide certainty to EPA staff, state permitting authorities, and regulated entities as to how EPA interprets the statute.

In addressing EPA's request for comment on potential clarification of the Agency's prior statements, commenters pointed to certain instances in which the Agency stated that discharges to groundwater are not subject to the CWA, without any qualification. For example, in a 1973 EPA Office of General Counsel memorandum, EPA considered whether certain discharges to wells are subject to the NPDES program and stated that “[u]nder § 502(12) the term `discharge of a pollutant' is defined so as to include only discharges into navigable waters (or the contiguous zone or the ocean). Discharges into ground waters are not included.” Memorandum from the U.S. EPA Acting Deputy Gen. Counsel to the U.S. EPA Region IX Reg'l Counsel 2-3 (Dec. 13, 1973). The Agency did not include any language indicating that, at that time, it viewed groundwaters as distinguishable based on their connection to jurisdictional surface waters. Notably, this memorandum was issued close-in-time to the passage of the CWA amendments creating the NPDES program and reflects the Agency's initial view of the statute's text, which has not been amended in pertinent part since that time. See also Ground Water Pollution from Subsurface Excavations, EPA-430/9-73-012 at 131-35 (1973) (EPA report explaining that subsurface excavations, e.g., lagoons, pits, basins, etc., used to store or dispose of pollutants can contaminate groundwater and that contamination can reach surface waters, without mentioning regulation under NPDES as one of several identified methods to address this contamination).

Commenters also pointed out that, in its brief in Kelley on behalf of Michigan v. United States, the United States argued that discharges to groundwater, per se, are excluded from the CWA, and applied that view to discharges to groundwater with a direct hydrologic connection to jurisdictional surface waters. 618 F. Supp. 1103 (W.D. Mich. 1985). In that case, Michigan alleged that certain toxic chemicals were released into the ground at a U.S. Coast Guard facility, that the chemicals contaminated the groundwater underlying the facility, and that the plume of contamination migrated and was discharged to a jurisdictional surface water. In its brief, the United States argued that “Michigan cannot make these claims under the Clean Water Act since the Act does not regulate pollutant discharges onto soil or into underlying ground water.” U.S. Mem. In Supp. of Rule 12(b) Mot. & In The Alternative for Summ. J. at 5, Kelley on behalf of Michigan v. United States, No. G83-630, 618 F. Supp. 1103 (W.D. Mich. 1985).

Commenters also pointed to a policy document issued during the Clinton administration which explicitly stated that it was unclear whether the CWA regulated discharges to groundwater with a direct hydrologic connection to jurisdictional surface water. President Clinton's Clean Water Initiative sought to update the CWA and stated that it was “presently unclear whether a discharge to the ground or to ground water that rapidly moves into surface water through a `direct hydrologic connection' between the point of discharge and the surface water is subject to NPDES regulation.” President Clinton's Clean Water Initiative at 104, EPA 800-R-94-001 (Feb. 1994). To address this, EPA suggested that the “CWA should be amended to . . . [c]onfirm and clarify that a point source discharge to ground or to ground water that has a direct hydrological connection with surface waters is subject to regulation as a NPDES point source discharge . . . .” Id. at 105; see also EPA 100-R-93-001 at 1-27, Final Comprehensive State Ground Water Protection Guidance (Dec. 1992) (stating that “[w]hile a number of States have incorporated ground water discharges into their NPDES permits and pretreatment requirements, there is no national requirement to do so”).

Commenters also cited to instances in permitting proceedings where EPA indicated that NPDES permits are not required for discharges to groundwater, without also referring to the direct hydrologic connection theory. In a response to comments document on an NPDES pesticide general permit, EPA explained that one commenter requested that the permit ensure that discharges do not affect groundwater. EPA, Response to Public Comments, EPA NPDES Pesticide General Permit at xxii (Oct. 31, 2011). EPA responded and clarified that “the Clean Water Act's NPDES program, under which EPA issued the [pesticide general permit], is for the control of discharges to waters of the United States. Generally, discharges to groundwater are not regulated under the NPDES program; rather, discharges to groundwater are regulated under Safe Drinking Water Act along with any additional protections that may be incorporated in FIFRA regulations.” Id. EPA did not qualify this statement with any discussion of discharges to groundwater with a direct hydrologic connection to surface water. See also EPA, Fact Sheet, Draft General Permits for Stormwater Discharges Systems from Small Municipal Separate Sewer Systems in Massachusetts at 18 (Sept. 30, 2014) (“NPDES permits are applicable for point source discharges to waters of the U.S.; discharges to groundwater are not addressed in the NPDES program and as such are not addressed by this permit.”).

Finally, commenters also noted that EPA has not comprehensively explained its previous interpretation in a key document that permit writers and regulated entities frequently look to for guidance on the NPDES program. EPA's NPDES Permit Writers' Manual (NPDES Manual) describes the statutory and regulatory framework of the NPDES program and examines technical considerations for developing NPDES permits. U.S. EPA, NPDES Permit Writers' Manual vii (2010). While the NPDES Manual is designed as a comprehensive reference on the program for permit writers, it only briefly mentions EPA's prior interpretation:

Id. at 1-7. The NPDES Manual does not elaborate on this statement or provide guidance on how this interpretation should be implemented.

As described in the February 2018 Federal Register notice soliciting public comment on this issue, EPA has articulated its previous position that discharges to groundwater with a direct hydrologic connection to jurisdictional surface waters are subject to the CWA. 83 FR at 7127 (“EPA has previously stated that pollutants discharged from point sources that reach jurisdictional surface waters via groundwater or other subsurface flow that has a direct hydrologic connection to the jurisdictional water may be subject to CWA permitting requirements.”). Commenters noted that the Agency has, in several public documents, including rulemakings, permits, letters, and briefs filed on EPA's behalf by the Department of Justice, indicated that NPDES permits are required for discharges to groundwater that have a direct hydrologic connection to jurisdictional surface waters. See, e.g., id. (listing Agency statements in several rulemaking preambles); Federal Appellees' Response Brief at 48, Greater Yellowstone Coal. v. Lewis, No. 09-35729, 628 F.3d 1143 (9th Cir. 2010) (“Groundwater is not directly regulated by the Clean Water Act . . . . Nonetheless, EPA has consistently interpreted the Act to cover discharges into groundwater that have a direct hydrologic connection to surface water.”); Final General NPDES Permit for Concentrated Animal Feeding Operations (CAFO) in Idaho ID-G-01-0000, 62 FR 20,178 (1997) (“[T]he Clean Water Act does not give EPA the authority to regulate groundwater quality through NPDES permits. The only situation in which groundwater may be affected by the NPDES program is when a discharge of pollutants to surface waters can be proven to be via groundwater . . . the permit requirements . . . are intended to protect surface waters which are contaminated via a groundwater (subsurface) connection.”); EPA, Memorandum from Director, Office of Solid Waste to Waste Management Division Directors (1995) (“In addition, such groundwater discharges are subject to CWA jurisdiction, based on EPA's interpretation that discharges from point sources through groundwater where there is a direct hydrologic connection to nearby surface waters of the United States are subject to the prohibition against unpermitted discharges, and thus are subject to the NPDES permitting requirements.”); EPA, In the Matter of Bethlehem Steel Corp, UIC Appeal Nos. 85-8 & 86-13 (1989) (EPA “declines to exercise CWA jurisdiction over injection wells (except those that inject into ground water with a physically and temporally direct hydrologic connection to surface water).”). However, each of these statements is included in preambles to rules or in permits where the complex jurisdictional issue of releases of pollutants to groundwater were not the central focus. In other words, these statements were collateral to the central issues addressed in the documents in which they are included.

Commenters highlighted one preamble—to a proposed rule that applied to only one category of dischargers—in which EPA discussed its prior interpretation in some detail. In a proposed rule revising the NPDES permit requirements and effluent limitation guidelines for CAFOs, EPA proposed national requirements for certain CAFOs to address potential discharges to jurisdictional surface waters via groundwater that has a direct hydrologic connection to jurisdictional surface waters. 66 FR 2960 (Jan. 12, 2001). In the preamble to this proposed rule, EPA explained its interpretation of the Act as applying to these types of discharges. Id. at 3015-20. Notably, EPA did not engage in a detailed analysis of the Act's text, structure, and legislative history in the 2001 preamble that has now led the Agency to the position articulated in this Interpretive Statement. Moreover, EPA did not finalize these proposed requirements for certain CAFOs and explained in the preamble to the final rule that “the factors affecting whether such discharges are occurring . . . are so variable from site to site that a national technology-based standard is inappropriate.” 68 FR 7176, 7216 (Feb. 12, 2003). 3

Commenters to EPA's February 2018 Federal Register notice offered extensive legal arguments both supporting the Agency's previous direct hydrologic connection theory, and as a basis for rejecting that theory. Some commenters recommending the Agency retain the direct hydrologic connection theory cited to the purpose of the statute and the definition of “discharge of a pollutant” as requiring that the Agency construe the statute as covering releases of pollutants to groundwater that reach jurisdictional surface waters through a direct hydrologic connection. They argued that the definition of “discharge of a pollutant” is broad, and asks only whether the pollutant travels from a point source to a jurisdictional surface water; if so, a NPDES permit is required. Commenters in favor of the Agency's rejection of the direct hydrologic connection theory asserted that the theory is atextual and inconsistent with the overall statutory scheme and legislative history of the Act. Some of these commenters offered an alternative theory of jurisdiction that limits the scope of the CWA to discharges of a pollutant from a point source or series of point sources that carry the pollutant directly into the water of the United States. In other words, they asserted that pollution must pass through an unbroken chain of point sources for a “discharge of a pollutant” to have occurred, sometimes referred to as the “terminal point source” theory. The Agency's position articulated herein differs from both the direct hydrologic connection theory and the terminal point source theory, as explained below. EPA believes its reading of the statute—which is based on the statute as a whole and not a single definition viewed in isolation—is most consistent with Congress's intent. It is also carefully tailored to the specific issue of releases of pollutants to groundwater which has generated confusion among courts, states, regulated entities, and the public.

Many environmental organizations that commented on EPA's February 2018 Federal Register notice urged the Agency to retain the direct hydrologic connection theory articulated in prior Agency statements. The Agency notes that it is maintaining several elements of that position—that groundwater is not a water of the United States and that groundwater is not a point source. The Agency's brief before the Ninth Circuit in the County of Maui proceeding stated that it “[did] not contend that groundwater is a point source, nor [did it] contend that groundwater is a water of the United States regulated by the Clean Water Act.” Brief for the United States as Amicus Curiae at 2, Cty. Of Maui, No. 15-17447, 886 F.3d. 737.

EPA's interpretation here departs from the position the Agency took in the County of Maui amicus brief on the application of the definition of “discharge of a pollutant” to releases of pollutants into groundwater. The amicus brief, as well as the commenters urging the Agency to retain the direct hydrologic connection theory, failed to take into account Congress's unique treatment of groundwater in the CWA when interpreting the definition of discharge of a pollutant. The Agency's previous interpretation that a release of a pollutant from a point source to groundwater that is conveyed to jurisdictional surface waters could be the functional equivalent of a release to jurisdictional surface waters thus was premised on viewing releases of pollutants to groundwater through the NPDES point source paradigm rather than viewing such releases in light of Congress's specific approach to groundwater under the CWA.

In arguing that the direct hydrologic connection theory is consistent with the Act, the Agency's County of Maui amicus brief, like some commenters, recognized that Congress drew a line between regulation of discharges to groundwater and regulation of discharges to jurisdictional surface water. EPA's amicus brief asserted that Maui “emphatically is not a case about the regulation of groundwater” and “[i]nstead it is about the regulation of discharges of pollutants to waters of the United States.” Brief for the United States as Amicus Curiae at 21. However, this approach takes insufficient account of the explicit treatment of groundwater under the CWA, as reflected in the statute's text, structure, and legislative history. In the Agency's view, releases to groundwater should not be distinguished based on the connection (or lack thereof) between groundwater and jurisdictional surface waters. The text, a holistic analysis of the statute, and the legislative history indicate that Congress's intent was to categorically exclude groundwater from coverage of the permitting provisions of the Act and to leave regulation of groundwater to the states, irrespective of the type of groundwater formation and whether it allows for discharge to jurisdictional surface waters or the directness of such a conveyance. The direct hydrologic connection theory upsets the careful balance that Congress struck between the states and the federal government by pushing a category of pollutant discharges from the state-regulated paradigm to the point source, federally controlled, program.

The County of Maui amicus brief, and some commenters urging that EPA retain the direct hydrologic connection theory, also erred by improperly equating releases of pollutants to groundwater with releases of pollutants from a point source to surface water that occur above ground. The statute and its legislative history indicate that Congress intended for all discharges to groundwater to be left to state regulation and control, ending any potential for federal permitting obligations once the pollutant enters groundwater, regardless of any future contribution of any modicum of pollutants to jurisdictional surface waters. Thus, the statute does not support analogizing pollutants discharged from a point source to groundwater that migrate to jurisdictional surface water to “discharges of pollutant[s] [that] have moved from a point source to navigable waters over the surface of the ground or by some other means.” Brief for the United States as Amicus Curiae at 14, Cty. Of Maui, No. 15-17447, 886 F.3d. 737.

As the Act's legislative history in particular demonstrates, Congress recognized the complex and highly-localized nature of releases to groundwater, that additional research and understanding of the interactions between surface and groundwater are needed, and determined that states, rather than EPA, are best positioned to regulate such releases. Today's interpretation pertains to releases to groundwater and thus leaves in place the Agency's case-by-case approach to determining whether pollutant releases to jurisdictional surface waters that do not travel through groundwater require an NPDES permit. Whether a permit is required for such a release is necessarily a fact-specific inquiry, informed by the point source definition and an analysis of intervening factors. EPA and authorized states have exercised that judgment on a case-by-case basis. 4 It is unnecessary to posit a categorical rule with respect to fact patterns such as those described in footnote 4 in this Interpretive Statement because, as explained above, the statute categorically excludes releases to and from groundwater from the permitting requirements of the Act irrespective of the directness of the hydrological connection. 5

Finally, the County of Maui amicus brief and some commenters improperly rely on the broad goal of the Act to justify applying the definition of “discharge of a pollutant”—which exclusively addresses point source discharges to navigable, ocean, and contiguous zone waters—to releases of pollutants to groundwater. The brief argues that reading the statute as excluding discharges from a point source to groundwater “would allow dischargers to avoid responsibility simply by discharging pollutants from a point source into jurisdictional surface waters through any means that was not direct.” Brief for the United States as Amicus Curiae at 20. This position fails to give sufficient weight to the structure and legislative history of the statute indicating that Congress intended in the CWA to leave regulation of all releases of pollutants to groundwater to states, in pursuit of the overall objective of the statute. In addition, views about the general purpose of the Act should not override Congress's evident intent not to regulate discharges to groundwater of any kind. As the Supreme Court has explained, “the textual limitations upon a law's scope are no less a part of its `purpose' than its substantive authorizations.” Rapanos v. United States, 547 U.S. 715, 752 (2006) (plurality op.). Further, excluding these releases from the scope of the NPDES program does not equate to no protection for ground and surface waters; rather, as described further below, states will continue to exercise their authority over these waters as will other federal programs.

Some commenters placed significance on a statement in the government's County of Maui amicus brief that the direct hydrologic connection theory was the Agency's “longstanding position.” Brief for the United States as Amicus Curiae at 5. However, as the full suite of public comments reveal, there have in fact been a range of prior statements by the Agency, some of which align with this Interpretive Statement, that the Agency has now considered in its analysis for the first time. Lack of consistent and comprehensive direction from EPA on this issue has led to inconsistent interpretation across the country and has created uncertainty for regulated entities. Even where the Agency has stated an interpretation, the Agency has not issued regulations nor formal guidance focused on and explaining the basis for the position. As noted above, this Interpretive Statement contains the Agency's most comprehensive analysis of the CWA's text, structure, legislative history and judicial decisions that has been lacking in prior Agency statements on this issue. In so doing, today's statement establishes a firm legal foundation for regulatory decisions by EPA and states administering CWA programs and clear guidance for the courts.

Some commenters to EPA's February 2018 Federal Register notice highlighted certain factual scenarios, such as movement of groundwater through a sub-surface lava tube or karst network that may resemble formations which courts have found to be point sources. See Nat'l Groundwater Assoc. Comments at 2 (describing certain groundwater formations, such as “lava tube openings, cave or conduit openings (including karst conduit networks), or other geologic features” that “function as natural pipelines capable of transporting water, effluents, and contaminants from one point to another point and behave similarly to manmade pipes conveying fluids”). In accordance with EPA's interpretation of the statute, because releases of pollutants from a point source to groundwater are categorically excluded from the scope of the NPDES program, even if those pollutants reach jurisdictional surface waters, it is immaterial whether pollutants subsequently travel through groundwater in a manner resembling point source discharges. EPA's position is that, in accordance with the best, if not the only, interpretation of the statute, releases to groundwater are not subject to the point source analysis, i.e., the CWA Section 301(a) prohibition, because the statute does not cover such releases. Accordingly, groundwater cannot be deemed a point source.

Given the indications in both the text of the statute as well as the legislative history that Congress intended to categorically leave regulation of groundwater to the states, these factual distinctions are of no legal significance. Applying the commenters' theory that releases to groundwater are excluded because the physical characteristics of groundwater are dissimilar to what some courts have found to be point sources is unnecessary. The numerous provisions in the Act linking groundwater to nonpoint source pollution, and the absence of discussion of groundwater in any of the regulatory sections of the CWA, provide ample support that in establishing the NPDES program Congress intended to leave regulation of all releases of pollutants to groundwater, akin to nonpoint source pollution, to the states. 6

Over the 46-year history of the CWA, numerous courts have grappled with the question that EPA addresses with this interpretation. Many courts, including the Fifth, Sixth, and Seventh Circuit Courts of Appeals, have looked to both the language of the Act and the legislative history and determined that the Act excludes from its regulatory requirements all pollutant discharges to groundwater, regardless of whether that groundwater is hydrologically connected to jurisdictional surface waters. Other courts, including the Fourth and Ninth Circuit Courts of Appeals, have cited the broad, protective goals of the Act, and applied in isolation the definition of “discharge of a pollutant” to releases of pollutants from point sources to groundwater that migrate to jurisdictional surface waters. Upon this premise, these courts have then found that, upon meeting the courts' respective tests for assessing the connectedness between the groundwater and jurisdictional surface waters, such releases are subject to NPDES requirements. The Agency believes that these interpretations departed from the text and history of the CWA, and finds the decisions of the Fifth and Seventh Circuit more persuasive and true to Congress's intent in enacting the statute.

The decisions of other circuits which have taken a different approach than the Fourth and Ninth Circuit—taking a holistic view of the statute and accounting for the legislative history—are informative. In the 1977 Exxon v. Train decision, the Fifth Circuit conducted an extensive analysis of the text, structure, and legislative history of the statute, and held that the Act did not give EPA authority to regulate certain releases of pollutants into groundwater. There, EPA had asserted authority to require NPDES permits for subsurface disposal into deep wells where an entity already had a permit for surface discharge. 554 F.2d at 1319. The Agency did not argue that a permit was required because disposal was an addition of a pollutant to “navigable waters,” id. at 1318 n.17, but instead that its authority was premised on the presence of an existing jurisdictional surface water discharge, id. at 1320. In analyzing the question of EPA's authority over deep well disposal, the court noted that “EPA has not argued that the wastes disposed of into wells here do, or might, `migrate' from groundwaters back into surface waters that concededly are within its regulatory jurisdiction,” and thus, the court “express[ed] no opinion on what the result would be if that were the state of facts.” Id. at 1312 n.1.

However, in holding that EPA's assertion of authority was unsupported by the text and legislative history of the statute, the court made two observations that are relevant to the broader question of regulation of any discharges to groundwater. First, that the court's construction was true “to Congress' intention not to interfere with existing state controls over groundwater” generally, given the complex, state-specific nature of groundwater regulation. And second, that the legislative history of the Act gives not “the slightest hint that any Member thought the bill would grant the Administrator any power to regulate deep-well disposal or any other form of groundwater pollution.” Id. at 1329 (emphasis added).

In Rice v. Harken Exploration Co., the Fifth Circuit addressed a factual scenario where the plaintiff's Oil Pollution Act (OPA) claim was premised on pollutant discharges to groundwater migrating to and polluting jurisdictional surface waters. In analyzing the merits of that claim, the court relied on Exxon to determine whether the OPA's requirements governing discharges to “navigable waters of the United States” apply to discharges to groundwater that reach such surface waters. There, the plaintiffs alleged that groundwater under their land was contaminated by pollutants discharged by Harken Exploration's oil and gas operations, and that those pollutants seeped from the groundwater into several bodies of surface water, in violation of the OPA. Rice v. Harken Exploration Co., 250 F.3d 264, 265-66, 270 (5th Cir. 2001).

Due to the lack of case law construing the term “navigable waters of the United States” in the OPA context, the court's analysis focused on cases construing the scope of the CWA, given the court's view that the use of the term “navigable waters” in both statute was analogous. Id. at 267-68 (“The legislative history of the OPA and the textually identical definitions of `navigable waters' in the OPA and the CWA strongly indicate that Congress generally intended the term `navigable waters' to have the same meaning in both the OPA and the CWA.”). The court recognized that “[i]n Exxon, we held that the legislative history of the CWA belied any intent to impose direct federal control over any phase of pollution of subsurface waters.” Id. at 269. However, acknowledging that Exxon addressed the specific question of CWA regulation of deep-well disposal, the court explained that “[t]his Court has not yet decided whether discharges into groundwater that migrate into protected surface waters are covered” under the CWA or the OPA. Id. at 271. Relying on its CWA analysis in Exxon, and the analogous absence of any indication that Congress intended to regulate any type of groundwater under the OPA, the Fifth Circuit held that “a generalized assertion that covered surface waters will eventually be affected by remote, gradual, natural seepage from the contaminated groundwater” was outside the scope of the OPA in order “to respect Congress's decision to leave the regulation of groundwater to the States.” Id. at 272.

In Village of Oconomowoc Lake v. Dayton Hudson Corporation, the Seventh Circuit squarely addressed the issue of point source discharges that reach jurisdictional surface waters through groundwater, and concluded that “[n]either the Clean Water Act nor the EPA's definition [of waters of the United States] asserts authority over ground waters, just because these may be hydrologically connected with surface waters.” 24 F.3d at 965. In that case, a municipality in Wisconsin filed a CWA citizen suit claiming that a NPDES permit was required for a waste retention pond at a Target Stores distribution center, due to potential seepage of waste into groundwater, which could reach jurisdictional surface waters. Id. at 963, 965.

In analyzing the facts before it, the Seventh Circuit explicitly recognized the possibility that “water from the pond will enter the local ground waters, and thence underground aquifers that feed lakes and streams that are part of the `waters of the United States.' ” Id. at 965. The court also recognized, however, that “the Clean Water Act does not attempt to assert national power to the fullest,” and intentionally does not apply to all waters. Id. Based on the text of the statute and the same compelling legislative history analyzed by the Fifth Circuit and discussed above, the court concluded that “[t]he omission of ground waters from regulations is not an oversight,” as “Congress elected to leave the subject [of groundwater regulation] to state law[.]” Id. Thus, there was no cognizable CWA claim based on discharges to ground water that may reach jurisdictional surface waters. Id.

Most recently, the Sixth Circuit concluded, in two related cases addressing pollutants from coal ash ponds that seeped into groundwater that subsequently reached jurisdictional surface waters, that the NPDES permitting requirements do not apply to releases to groundwater. In Kentucky Waterways Alliance v. Kentucky Utilities Co., the Sixth Circuit held that the “text and statutory context of the CWA” make clear that the statute “does not extend to reach this form of pollution.” 905 F.3d at 933. In Tennessee Clean Water Network v. TVA, the court reversed a district court decision adopting the direct hydrologic theory, finding that “any alleged leakages into the groundwater are not a violation of the CWA.” 905 F.3d at 444. The Sixth Circuit recognized the statute's broad goal of protecting the Nation's waters, but held that this goal cannot be pursued at all costs “because the CWA precludes federal regulation over non-navigable-water pollution and over nonpoint-source-pollution.” Ky. Waterways Alliance, 905 F.3d at 937. The court explained:

Id.; see also, e.g., Prairie Rivers Network v. Dynegy Midwest Generation, LLC, No. 18-CV 2148, slip op. at 14 (C.D. Ill. Nov. 14, 2018) (Applying the Seventh Circuit's decision in Village of Oconomowoc to hold that “[i]f the discharge is made into groundwater, and the pollutants somehow later find their way to navigable surface waters via a discrete hydrological connection, the CWA is still not implicated, because the offending discharge was made into groundwater, which is not subject to the CWA”); Cape Fear River Watch v. Duke Energy Progress, 25 F. Supp. 3d 798, 810 (E.D.N.C. 2014) (“Congress did not intend for the CWA to extend federal regulatory authority over groundwater, regardless of whether that groundwater is eventually or somehow `hydrologically connected' to navigable surface waters.”); Umatilla, 962 F. Supp. at 1318 (observing that “the CWA's NPDES program should apply to groundwater to adequately protect surface water,” but concluding that “the law as written, as intended by Congress, and as applied in Oregon for over two decades does not regulate even hydrologically-connected groundwater”); 26 Crown Assocs., LLC v. Greater New Haven Reg'l Water Pollution Control Auth., No. 3:15-cv-1439, 2017 U.S. Dist. LEXIS 106989, *24 (D. Conn. 2017) (noting that “if the Clean Water Act were to apply as a routine matter to the discharge of pollution onto the ground that ends up seeping into the ground water, then Congress's purpose to limit the scope of the Clean Water Act [to point source discharges] would be easily thwarted.”).

In contrast, the circuit and district court decisions concluding that certain releases to groundwater are subject to NPDES requirement have often left unaddressed the text, structure, and legislative history of the Act pointing to Congress's intent to exclude all discharges to groundwater from the NPDES program. The Fourth Circuit recently held that point source releases to groundwater that reach jurisdictional surface waters require a NPDES program in certain instances, adopting EPA's historical direct hydrological connection approach. Kinder Morgan, 887 F.3d at 652. In that decision, the court did not address any of the legislative history discussed herein, nor did the court acknowledge or address the decisions of the Fifth or Seventh Circuit.

Rather, in analyzing whether gasoline from a ruptured underground pipeline that undisputedly leached from groundwater into navigable waters required a NPDES permit, the Fourth Circuit framed its inquiry as only whether, first, the discharge was from a point source, id. at 649-50, and second, whether there was a direct hydrological connection between the groundwater and jurisdictional surface water, a fact-specific determination. Id. at 651. The court cited to the broad purpose of the Act to restore and maintain the chemical, physical, and biological integrity of the Nation's waters, asserting that “the statute established a regime of zero tolerance for unpermitted discharges of pollutants.” Id. at 652. The court reasoned that “if the presence of a short distance of soil and ground water were enough to defeat a claim, polluters easily could avoid liability under the CWA by ensuring that all discharges pass through soil and ground water before reaching navigable waters.” Id. The court ultimately concluded that “an alleged discharge of pollutants, reaching navigable waters located 1000 feet or less from the point source by means of ground water with a direct hydrological connection to such navigable waters, falls within the scope of the CWA.” Id. at 652. In reaching this holding, 7 however, the court failed to consider Congress's intent, evident from the text, structure, and legislative history of the Act, to treat groundwater and nonpoint source discharges differently under the Act, by leaving their regulation to states. 8

You may be affected by this action if you reported a confidential chemical substance under the TSCA Inventory Notification (Active-Inactive) Requirements rule (hereinafter “Active-Inactive rule”) (Ref. 1) (40 CFR part 710, subpart B) through a Notice of Activity (NOA) Form A (Ref. 2) and sought to maintain an existing CBI claim for a specific chemical identity. The following North American Industrial Classification System (NAICS) codes are not intended to be exhaustive, but rather provides a guide to help readers determine whether this action may apply to them:

• Chemical manufacturing or processing (NAICS code 325).

• Petroleum and Coal Products Manufacturing (NAICS code 324).

The discussion in Unit III.A. and the proposed regulatory text describe in more detail the circumstances in which entities might be subject to this proposed action. If you have any questions regarding the applicability of this action to a particular entity, consult the technical person listed under FOR FURTHER INFORMATION CONTACT .

Note that TSCA's statutory definition of “manufacture” includes importing. Accordingly, the regulatory definition of “manufacture” for this rule includes importation. Since “manufacture” is itself defined at 40 CFR 710.3(d) and at TSCA section 3(9) (15 U.S.C. 2602(9)) to include “import,” it is clear that importers are a subset of manufacturers. All references to manufacturing in this document should be understood to also encompass importing. Where EPA's intent is to specifically refer to domestic manufacturing or importing (both activities constitute “manufacture”), this rule will do so expressly.

EPA is proposing this rule pursuant to the authority in TSCA section 8(b), 15 U.S.C. 2607(b). See also the discussion in Unit II.B.

In addition, the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., requires Federal agencies to manage information resources to reduce information collection burdens on the public (including through the use of automated collection techniques or other forms of information technology); increase program efficiency and effectiveness; and improve the integrity, quality, and utility of information to all users within and outside an agency, including capabilities for ensuring dissemination of public information, public access to Federal Government information, and protections for privacy and security (44 U.S.C. 3506).

TSCA section 2 expresses the intent of Congress that EPA carry out TSCA in a reasonable and prudent manner and in consideration of the impacts that any action taken under TSCA may have on the environment, the economy, and society. EPA is proposing to manage and leverage its information resources, including information technology, to require the use of electronic reporting to implement this proposed rulemaking in a reasonable and prudent manner.

Pursuant to TSCA sections 8(b)(4)(C) through (E), EPA is proposing to amend 40 CFR part 710 to establish a new subpart C that sets forth the Agency's plan to review certain CBI claims to protect the specific chemical identities of substances on the confidential portion of the TSCA Inventory. The CBI claims that would be reviewed under this plan are those that were asserted on NOA Form A's filed in accordance with the requirements in the Active-Inactive rule (40 CFR part 710, subpart B).

In accordance with TSCA section 8(b)(4)(D), EPA is proposing substantiation requirements for manufacturers (including importers) and processors who filed NOA Form A's with assertions that they seek to maintain CBI claims to protect the specific chemical identities of chemical substances on the confidential portion of the TSCA Inventory. Manufacturers and processors who provided substantiations pursuant to the voluntary substantiation process in the Active-Inactive rule NOA collection, or who identify a previous substantiation for the claim made to EPA during the 5-year period ending on the substantiation deadline specified by EPA, would be exempt from this requirement. EPA would review each specific chemical identity CBI claim and substantiation, and approve or deny each claim consistent with the procedures and substantive criteria in TSCA sections 8(b)(4) and 14 and 40 CFR part 2, subpart B. Also included in this proposed rule are provisions clarifying the duration of protection for approved CBI claims, and providing for the publication of annual review goals and results.

As described in Unit III.D., EPA is proposing to apply the electronic reporting requirement at 40 CFR 710.39 to the substantiation requirements of the CBI review plan. The Agency is proposing to require submitters to use EPA's Central Data Exchange (CDX), the Agency's electronic reporting portal, for reporting information.

TSCA section 8(b)(4)(C) requires EPA to promulgate a rule that establishes a plan to review all CBI claims to protect the specific chemical identities of chemical substances on the confidential portion of the TSCA Inventory that were asserted in an NOA Form A pursuant to the Active-Inactive rule. This proposed rule is a follow-on regulation to the Active-Inactive rule that would require substantiation of CBI claims for specific chemical identity from any reporters who asserted such a claim as part of the NOA Form A submission, but did not provide (voluntary) upfront substantiation at that time. TSCA section 8(b)(4)(C) further requires EPA to promulgate this rule not later than one year after the date that the Agency published the first TSCA Inventory containing all “active” substance designations. EPA announced the release of the updated TSCA Inventory on February 19, 2019. To download the public version of the TSCA Inventory, get more information about the TSCA Inventory Notification (Active-Inactive) Requirements rule, or requirements to notify EPA going forward, go to https://www.epa.gov/tsca-inventory .

EPA has evaluated the potential costs of establishing the proposed reporting requirements for manufacturers and processors. An economic analysis titled “Economic Analysis for the Proposed Rule: Procedures for Review of CBI Claims for the Identity of Chemicals on the TSCA Inventory” has been prepared for the proposed rule, is available in the docket, and is briefly summarized here (Ref. 3). The proposed rule requirements involve a one-time reporting effort with activities that are the same, or similar to those in the Active-Inactive rule. All respondents would already have submitted at least one NOA under the Active-Inactive rule, and therefore should know whether any actions are necessary under this proposed rule. Moreover, an exemption included in this proposed rule would allow certain submitters to reference a previously submitted chemical identity CBI substantiation (in the last five years), in lieu of providing a full CBI substantiation for the NOA Form A chemical identity information.

Companies potentially affected by this proposed rule fall into three groups of potential NOA Form A reporters who made a CBI claim for a specific chemical identity. The first group (Group (1)) consists of those reporters who already voluntarily submitted upfront CBI substantiation as part of the NOA submission process, who therefore do not need to take further action. The second group (Group (2)) consists of those reporters who will be able to use the exemption offered under this proposed rule by referencing a previous substantiation, such as one submitted through the 2016 Chemical Data Reporting (CDR) rule (40 CFR part 711). The third group (Group (3)) consists of the remaining reporters who did not submit prior chemical identity CBI substantiations and would be required to provide full substantiation as proposed in this rule. The average incremental burden and cost estimates include rule familiarization, recordkeeping and submission of applicable CBI substantiations ( i.e., one-time form completion). For Group (1), the burden and costs for this group are minimal and were not calculated because the reporters have already voluntarily submitted upfront CBI substantiation as part of the NOA submission process for the Active-Inactive rule and would not need to take further action. For Group (2), the average burden and costs per company are estimated at 5.1 hours and $390, respectively per submission (involving on average four chemicals per company), for rule familiarization and substantiation using a previous reference. For Group (3), the average burden and costs per company are estimated at 34.1 hours, and $2,641 respectively per submission (involving on average 27 chemicals per company), for rule familiarization and full substantiation. An estimated 126 companies would be expected to report, with an estimated 23 companies in Group (2), and 103 companies in Group (3), resulting in an estimated total incremental burden and costs expected over 60 days of 3,629 hours and $280,981 for this proposed rule (Ref. 3).

1. Submitting CBI. Do not submit this information to EPA through regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI in a CD-ROM or other electronic media that you mail to EPA, mark the outside of the media as CBI and then identify electronically within the media the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2, subpart B.

2. Tips for preparing your comments. When preparing and submitting your comments, see the commenting tips at https://www.epa.gov/dockets/commenting-epa-dockets.html .

EPA is required under TSCA section 8(b) to compile and keep current a list of chemical substances manufactured or processed in the United States. This list, the TSCA Chemical Substance Inventory (TSCA Inventory), is EPA's comprehensive list of confidential and non-confidential substances manufactured or processed in the United States for nonexempt commercial purposes (Ref. 4). EPA promulgated the Active-Inactive rule to obtain the information necessary for EPA to designate as “active” chemical substances that had been manufactured or processed for a nonexempt commercial purpose during the 10-year time period ending on June 21, 2016. Respondents (manufacturers and processors) reported these chemical substances through the process set forth in 40 CFR part 710, subpart B, by filing an NOA Form A with EPA. Consistent with TSCA section 8(b)(4)(B)(ii), respondents who manufactured or processed an active chemical substance listed on the confidential portion of the TSCA Inventory prior to June 22, 2016, could seek to maintain an existing claim for protection against disclosure of the specific chemical identity of the substance as confidential by voluntarily filing an NOA Form A that included such request. Through this process established in 40 CFR 710.37(a), manufacturers and processors secured an opportunity to maintain the confidential status of a specific chemical identity on the confidential portion of the TSCA Inventory.

TSCA section 8(b)(4)(C) requires EPA to promulgate a rule establishing a plan to review all CBI claims to protect the specific chemical identities of chemical substances on the confidential portion of the TSCA Inventory that were asserted in an NOA Form A. TSCA requires that EPA promulgate this rule not later than one year after the publication of the first TSCA Inventory containing all “active” substance designations (TSCA section 8(b)(4)(C)). TSCA also requires the Agency to implement the CBI review plan so as to complete all CBI claim reviews not later than five years after such TSCA Inventory publication, with the possibility of a two-year extension (TSCA section 8(b)(4)(E)). Since the updated TSCA Inventory was released on February 19, 2019, the deadline for issuing a final rule is February 19, 2020, and the deadline for completing all the CBI claim reviews is February 19, 2024. If EPA determines in the future to invoke the 2-year extension under TSCA, the deadline for completing all the CBI claim reviews would then become February 19, 2026.

Other types of CBI claims are outside the scope of the review plan under TSCA section 8(b)(4)(C) through (E), and hence are outside the scope of this proposed rule. Those claims are governed by other statutory and regulatory provisions. Substantiation and review of CBI claims for other data elements in an NOA Form A are governed by TSCA section 14(g) and 40 CFR 710.37(b) and (c)(1). Substantiation and review of CBI claims for specific chemical identity in an NOA Form B—a forward-looking reporting form required when reintroducing an “inactive” chemical substance into U.S. commerce for a nonexempt commercial purpose—are governed by TSCA section 8(b)(5) and 40 CFR 710.37(a)(2).

TSCA section 8(b)(4)(D) provides the parameters of the review plan for specific chemical identity CBI claims asserted in NOA Form A's.

1. Requirement to provide substantiations. TSCA section 8(b)(4)(D)(i) provides that in establishing the review plan, EPA must require all manufacturers and processors to substantiate their CBI claims for specific chemical identities in accordance with TSCA section 14 and at a time specified by EPA, unless the manufacturer or processor has previously substantiated the claim in a submission made to EPA during the 5-year period ending on the substantiation deadline specified by EPA.

2. EPA review of confidentiality claims and substantiations. TSCA section 8(b)(4)(D)(ii) requires that EPA review each CBI claim and substantiation for a specific chemical identity to determine if such claim qualifies for protection from disclosure. The Agency must then approve or deny each claim. TSCA section 8(b)(4)(D)(ii)(III) further provides that if the information is approved for CBI status, then, except as otherwise provided in TSCA sections 8 and 14, EPA must protect such information from disclosure for a period of 10 years, unless the claim is withdrawn, or EPA becomes aware that the information does not qualify for protection from disclosure, in which latter case EPA must take the actions described in TSCA section 14(g)(2) ( i.e., to notify the claimant of EPA's intent to disclose the information).

3. Completion of reviews. TSCA section 8(b)(4)(E) provides that the Agency must implement the review plan so as to complete all of the reviews not later than five years after the date on which the Agency has compiled the initial list of active substances. With adequate public justification, the Agency may extend the deadline for completion of reviews for not more than two years.

4. Posting of annual goals and numbers of reviews completed. TSCA section 8(b)(4)(E) further requires that at the beginning of each year, EPA publish an annual goal for reviews and the number of reviews completed in the prior year.

5. Record retention requirement. TSCA section 8(b)(9)(B) provides that records relevant to compliance with this rule must be retained for a period of 5 years beginning on the last day of the submission period.

The TSCA section 8(b)(4)(D) and (E) provisions regarding the Review Plan are prescriptive and the proposed rule closely follows the statutory text.

1. CBI claims subject to substantiation. Subject to the exemptions described in this unit, the substantiation requirement in this proposed rule would apply to all CBI claims for specific chemical identities that manufacturers or processors requested to maintain in NOA Form A's filed in accordance with the Active-Inactive rule.

2. Exemptions from substantiation requirement. Pursuant to TSCA section 8(b)(4)(D), EPA is proposing exemptions from the requirement to submit new substantiation in certain cases where the CBI claims have already been substantiated in a recent submission to EPA. The proposed exemptions would be available to manufacturers or processors who provided substantiations for specific chemical identity CBI claims either: (1) Pursuant to the voluntary substantiation process associated with the Active-Inactive rule, or (2) in another submission made to EPA less than five years before the substantiation deadline that will be set in the final rule.

For those manufacturers or processors who filed voluntary substantiations with their NOA Form A's pursuant to the process set forth in the Active-Inactive rule, codified at 40 CFR 710.37(a)(1), no further action would be required. Those persons would automatically be deemed exempt from the substantiation requirement under this proposed rule.

EPA is proposing to require manufacturers and processors who wish to establish eligibility for an exemption based upon any other recently-submitted substantiation to report and identify for EPA the following about that recently-submitted substantiation: Submission date; submission type; and case number, transaction ID, or equivalent identifier that uniquely identifies the previous submission that includes the substantiation upon which the manufacturer or processor is relying.

Previously submitted substantiations might include, for example, those submitted pursuant to a regulatory up-front substantiation requirement (such as 40 CFR 711.30(b)(1) or 40 CFR 720.85(b)(3)(iv)), the statutory substantiation requirement at TSCA section 14(c)(3) (see 82 FR 6522, January 19, 2017), or the comment process described in 40 CFR 2.204(e).

EPA is proposing to require that all substantiations be filed not later than 90 days after the effective date of the final rule. EPA is proposing the same filing deadline for submissions identifying a previously submitted substantiation for purposes of establishing eligibility for an exemption. If a substantiation or notice of prior CBI substantiation was not filed within the 90-day filing period in accordance with all requirements of this proposed rule or voluntarily filed in accordance with all requirements of 40 CFR 710.37(a)(1), EPA is proposing to consider the confidentiality claim to be deficient and would treat the specific chemical identity as not subject to a confidentiality claim, such that EPA may make the information public without further notice. This treatment of unsubstantiated confidentiality claims as deficient would be consistent with how EPA has handled unsubstantiated confidentiality claims in other regulations, e.g., 40 CFR 710.37(a)(2) and (b) (Active-Inactive rule) and 40 CFR 711.30(e) (Chemical Data Reporting rule). EPA nevertheless requests comment on the validity of making this information public without further notice, particularly where a claimant may have previously submitted a substantiation to EPA less than five years before the substantiation deadline that will be set in the final rule, but failed to report and identify that previously-submitted substantiation to EPA within the 90-day filing period.

EPA is proposing to require that non-exempt manufacturers and processors substantiate any CBI claim for a specific chemical identity that they requested to maintain in an NOA Form A by submitting answers to the questions identified in Unit III.C.1, by providing the certification statement identified in Unit III.C.2, and by requiring that the submission be signed and dated by an authorized official.

1. Substantiation questions. a. Do you believe that the information is exempt from substantiation pursuant to TSCA section 14(c)(2)? If you answered yes, you must individually identify the specific information claimed as confidential and specify the applicable exemption(s).

b. Will disclosure of the information likely result in substantial harm to your business's competitive position? If you answered yes, describe with specificity the substantial harmful effects that would likely result to your competitive position if the information is made available to the public.

c. To the extent your business has disclosed the information to others (both internally and externally), what precautions has your business taken? Identify the measures or internal controls your business has taken to protect the information claimed as confidential: Non-disclosure agreement required prior to access; access is limited to individuals with a need-to-know; information is physically secured; other internal control measure(s). If yes, explain.

d. Does the information appear in any public documents, including (but not limited to) safety data sheets, advertising or promotional material, professional or trade publication, or any other media or publications available to the general public? If you answered yes, explain why the information should be treated as confidential.

e. Is the claim of confidentiality intended to last less than 10 years? If so, indicate the number of years (between 1-10 years) or the specific date/occurrence after which the claim is withdrawn.

f. Has EPA, another federal agency, or court made any confidentiality determination regarding information associated with this chemical substance? If you answered yes, explain the outcome of that determination and provide a copy of the previous confidentiality determination or any other information that will assist in identifying the prior determination.

g. Is the confidential chemical substance publicly known to have ever been offered for commercial distribution in the United States? If you answered yes, explain why the information should be treated as confidential.

2. Certification Statement. An authorized official of a manufacturer or processor substantiating a request to maintain an existing claim of confidentiality for specific chemical identity would be required to certify that the submission complies with the requirements of the rule by signing and dating the following certification statement:

The proposed rule would require persons submitting substantiations or information on previously submitted substantiations to follow the electronic reporting procedures set forth in the Active-Inactive rule at 40 CFR 710.39. Any person submitting a substantiation under this proposed rule could claim any part or all of the substantiation as confidential business information. Submitters would be required to use EPA's electronic reporting portal, Central Data Exchange (CDX), and EPA's web-based reporting tool, Chemical Information Submission System (CISS). Because all submitters under this proposed rule would have previously filed NOA Form A's under the Active-Inactive rule using these electronic reporting procedures, EPA expects that all submitters are already registered with CDX and familiar with the electronic reporting procedures. EPA is proposing mandatory electronic reporting because it is expected to allow for more efficient data transmittal, support improved data quality, and minimize respondent burden and reduce EPA administrative costs associated with information submission and recordkeeping.

Consistent with how EPA handles the review of other TSCA confidentiality claims, EPA would carefully consider the facts provided in the substantiations, any pertinent previously issued confidentiality determinations, and other reasonably available information that EPA finds appropriate to determine the information's entitlement to confidential treatment. See 40 CFR 2.204(f), 2.205(d)(2) and 2.306. EPA would apply the substantive criteria for confidentiality determinations set forth in 40 CFR 2.208 and 2.306(g), which provide in relevant part that information is entitled to confidential treatment for the benefit of a particular business if: (a) The business has asserted a confidentiality claim which has not expired by its terms, nor been waived nor withdrawn; (b) the business has satisfactorily shown that it has taken reasonable measures to protect the confidentiality of the information, and that it intends to continue to take such measures; (c) the information is not, and has not been, reasonably obtainable without the business's consent by other persons (other than governmental bodies) by use of legitimate means (other than discovery based on a showing of need in a judicial or quasi-judicial proceeding); (d) no statute specifically requires disclosure of the information; and (e) the business has satisfactorily shown that disclosure of the information is likely to cause substantial harm to the business's competitive position.

In instances where there are multiple NOA Form A's asserting the confidentiality of the same chemical identity, the Agency may choose to review these NOA Form A's together as a matter of efficiency.

In instances where a CBI claim is denied, the Agency would notify the submitter, in writing, of EPA's intent to disclose the specific chemical identity and of EPA's reasons for denying the claim. The notice would be furnished by certified mail (return receipt requested), by personal delivery, or by other means that allows verification of the fact and date of receipt. EPA would not disclose the specific chemical identity until the date that is 30 days after the date on which the submitter receives the denial notice. Submitters can challenge EPA's denial of a CBI claim by commencing an action to prevent disclosure in an appropriate Federal district court. See generally TSCA section 14(g) and 40 CFR 2.306(e). In instances where a CBI claim is approved, EPA would so inform the submitter, and the chemical substance will be identified in subsequent publications of the TSCA Inventory by a unique identifier assigned under TSCA section 14(g)(4), in addition to the accession number, generic name, and, if applicable, premanufacture notice case number. Further information about the assignment and application of unique identifiers for confidential chemical substances may be found in the Federal Register of June 27, 2018 (83 FR 30168).

EPA is proposing to use the Agency's website to publish its annual goal for reviews completed under this review plan at the beginning of each calendar year, starting with its goals for 2020, which the Agency anticipates would be posted in February 2020 on the Agency web page. EPA is also proposing to track the number of CBI reviews completed under this review plan each year and is proposing to use the Agency's website to publish that number at the beginning of the following year, starting with the number of reviews completed in 2020, which the Agency anticipates would be posted on the Agency web page in February 2021. These activities will address the requirements of TSCA section 8(b)(4)(E)(ii)(II).

EPA intends to implement the CBI review plan described in this proposed rule to complete reviews of all CBI claims for specific chemical identities not later than five years after the publication of the first TSCA Inventory containing all “active” substance designations based on NOA Form A's, as required under TSCA section 8(b)(4)(E)(i). Since the initial list of active substances published on February 19, 2019, EPA intends to complete all reviews by February 19, 2024. EPA intends the annual review goals to take into consideration this target completion date, the number of claims needing review, and available resources. Before the effective date of this rule's finalization, EPA may begin reviewing and deciding claims that were voluntarily substantiated under the Active-Inactive rule (subject to the outcome of pending litigation involving that rule), or that appear to be clearly not entitled to protection from disclosure based upon other information available to the Agency. TSCA section 14(i)(2) expressly permits EPA to review, require (re)substantiation of, and decide TSCA CBI claims before the effective date of such rules applicable to those claims as EPA may promulgate after June 22, 2016. EPA believes that TSCA section 14(i)(2) clearly authorizes the Agency to begin its reviews under TSCA section 8(b)(4) prior to publication of this final rule, and that doing so is appropriate in light of the Congressionally-mandated timeline for the completion of reviews.

TSCA section 8(b)(4)(E)(ii)(I) provides that after an adequate public justification, the Agency may extend the five-year deadline for completion of reviews for not more than two additional years. While the Agency does not currently anticipate a need for an extension, possible justifications for an extension might include, among other things, competing TSCA obligations which prevent the Agency from completing the reviews within five years, intervening events that divert the Agency's resources from completing the required reviews, or litigation involving the claim substantiation and review process that may delay EPA's commencement of CBI claim reviews. Should an extension become necessary, EPA is proposing to announce the extension and its justification to the public via a notice in the Federal Register .

TSCA section 8(b)(4)(D)(ii)(III) provides that specific chemical identities for which EPA has approved a CBI claim under TSCA section 8(b)(4)(D) must be protected from disclosure for a period of 10 years, unless, prior to the expiration of that period, the claimant notifies EPA that they are withdrawing the confidentiality claim, in which case the Agency cannot protect the information from disclosure; or the Agency otherwise becomes aware that the information does not qualify for protection from disclosure, in which case the Agency must take the actions described in TSCA section 14(g)(2) ( i.e., to notify the claimant of EPA's intent to disclose the information). TSCA section 8(b)(4)(D)(ii)(III) does not explicitly state when the 10-year period of protection begins, but TSCA section 8(b)(4)(D)(ii) provides as a general matter that EPA's actions under the review plan must be “in accordance with section 14.” Under TSCA section 14(e)(1)(B)(i), as amended on June 22, 2016, the duration of protection from disclosure lasts “for a period of 10 years from the date on which the person asserts the claim with respect to the information submitted to the Administrator.”

Notably, all specific chemical identity CBI claims subject to review under TSCA section 8(b)(4) and this proposed rule had already been asserted by one or more persons prior to June 22, 2016, resulting in the placement of the chemical substance on the confidential portion of the TSCA Inventory. Pursuant to TSCA section 8(b)(4)(B)(ii) and the Active-Inactive rule, manufacturers and processors submitting NOA Form A's were only permitted to indicate that they seek to maintain an existing claim for protection against disclosure of the specific chemical identity of the chemical substance. TSCA section 8(b)(4)(C) describes these requests to maintain existing claims as “ claims . . . asserted pursuant to [TSCA section 8(b)(4)(B)],” and TSCA section 8(b)(4)(D)(i) refers to “manufacturers or processors asserting claims under [TSCA section 8(b)(4)(B)]” (emphasis added). Thus, EPA believes Congress intended that the filing date of the request seeking to maintain the CBI claim ( i.e., the filing date of the NOA Form A) may function as the date of claim assertion for purposes of determining the period of protection from disclosure. However, in cases where the same specific chemical identity was subject to a CBI claim in another submission filed on or after June 22, 2016, EPA believes it would be incongruous to effectively re-start the 10-year period of protection from disclosure based upon the subsequent submission of a request ( i.e., an NOA Form A) seeking to maintain that claim. Accordingly, EPA proposes to interpret the date of assertion for purposes of calculating the duration of protection under TSCA section 8(b)(4)(D)(ii)(III) as the date of submission of the first filing in which the specific chemical identity was claimed as CBI after June 22, 2016. This interpretation would impact the calculation of the period of protection from disclosure where there are multiple submitters of the NOA Form A that are asserting confidentiality claims on the same specific chemical identity, as well as where one or more submitters of information to EPA outside the context of the NOA Form A has asserted a specific chemical identity confidentiality claim after June 22, 2016. Companies will be notified of the date from which the 10-year period of protection will be calculated.

For example, if on July 1, 2016, a company addressing a CDR rule reporting requirement filed a report for a subject chemical substance and asserted a CBI claim for the specific chemical identity, and if EPA subsequently approved the company's confidentiality claim, then the 10-year time period of protection from disclosure would begin on July 1, 2016. If that company subsequently filed an NOA Form A on January 1, 2018 and sought to maintain the confidentiality claim for that specific chemical identity, and if EPA subsequently approved that claim, the 10-year period of protection from disclosure would continue to run from July 1, 2016, and would not restart on the date of NOA filing. If a second company then filed an NOA Form A on February 1, 2018 seeking to maintain a CBI claim for that same specific chemical identity, and the second company's claim were approved, the 10-year period of protection from disclosure would still run from July 1, 2016. In cases where an NOA Form A was the first submission to assert the CBI claim for a specific chemical identity after June 22, 2016, the 10-year period of protection for an approved claim would begin on the date of that NOA filing.

EPA is proposing to require that persons subject to the finalized rule retain records that document any information reported to EPA. The proposed rule would require such records to be retained for a period of 5 years beginning on the last day of the submission period, which is consistent with the statutory mandate in TSCA section 8(b)(9)(B).

EPA is seeking public comment on all aspects of this proposed rule, including filing requirements, the exemptions process, annual goal setting, duration of protection from disclosure, Agency reviews, economic burden, and the scope of the substantiation questions described in Unit III.C and referenced in the proposed regulatory text at section 710.45, as well as other issues discussed in this document.

The following is a listing of the documents that are specifically referenced in this document. The docket includes these references and other information considered by EPA, including documents that are referenced within the documents that are included in the docket, even if the referenced document is not physically located in the docket. For assistance in locating these other documents, please consult the technical contact listed under FOR FURTHER INFORMATION CONTACT .

Additional information about these statutes and Executive Orders can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders .

This action is a significant regulatory action that was submitted to the Office of Management and Budget (OMB) for review under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011). Any changes made in response to OMB recommendations have been documented in the docket for this action as required by section 6(a)(3)(E) of Executive Order 12866.

This action is expected to be subject to the requirements for regulatory actions specified in Executive Order 13771 (82 FR 9339, February 3, 2017). EPA prepared an analysis of the estimated costs and benefits associated with this action (Economic Analysis, Ref. 3), which is available in the docket and is summarized in Unit I.E.

The information collection activities in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB) under the PRA, 44 U.S.C. 3501 et seq. The Information Collection Request (ICR) document that the EPA prepared has been assigned EPA ICR number ICR No. 2594.01 and OMB Control No. 2070-NEW (Ref. 5). You can find a copy of the ICR in the docket for this rule, and it is briefly summarized here.

The reporting requirements identified in the proposed rule would provide EPA with information necessary to evaluate confidentiality claims and determine whether the claims qualify for protection from disclosure. Manufacturers and processors who provided substantiations pursuant to the voluntary substantiation process in the Active-Inactive rule NOA collection would be exempt from the proposed substantiation requirements. EPA would review each specific chemical identity CBI claim and substantiation, and approve or deny each claim consistent with the procedures and substantive criteria in TSCA sections 8(b)(4) and 14 and 40 CFR part 2, subpart B.

Respondent's obligation to respond: Mandatory.

Frequency of response: Once per chemical.

Estimated total number of potential respondents: 126.

Estimated total burden: 3,629 hours (one time). Burden is defined at 5 CFR 1320.3(b).

Estimated total costs: $ 280,981 (one time), includes no annualized capital investment or maintenance and operational costs.

Under PRA, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers are displayed either by publication in the Federal Register or by other appropriate means, such as on the related collection instrument or form, if applicable. The display of OMB control numbers for certain EPA regulations is consolidated in 40 CFR part 9.

Submit your comments on the Agency's need for this information, the accuracy of the provided burden estimates and any suggested methods for minimizing respondent burden to EPA using the docket identified at the beginning of this proposed rule. You may also send your ICR-related comments to OMB's Office of Information and Regulatory Affairs via email to OIRA_submission@omb.eop.gov, Attention: Desk Officer for EPA. Since OMB is required to make a decision concerning the ICR between 30 and 60 days after receipt, OMB must receive comments no later than May 23, 2019. EPA will respond to any ICR-related comments in the final rule.

Pursuant to section 605(b) of the RFA, 5 U.S.C. 601 et seq., I certify that this action will not have a significant economic impact on a substantial number of small entities. The small entities subject to the requirements of this action are manufacturers (including importers) and processors of chemical substances. EPA estimates that a total of 126 companies are expected to be impacted by this proposed rule, of which 121 are identified as small entities. Given the estimated per submission burden and costs range from 5.1 hours and $390 (for Group (2)) to 34.1 hours and $ 2,640 (for Group (3)), as presented in Unit 1.E. EPA has determined that all 121 of the identified small entities considered in this analysis will experience an impact of less than 1% of revenues.

In the affected universe of small entities, there are two groups of entities affected by this proposed rule (Groups (2) and (3)), based on the extent of substantiation information involved in the submission. Entities of Group (3) are expected to incur the highest burden under this proposed rule, as they are required to submit full confidentiality substantiations (each submission involving an average of 27 chemicals per entity) in response to the regulatory requirements. As a conservative approach, in this small entity analysis the higher unit cost from Group (3), as the most affected group, is applied to all small entities. Details of this analysis are included in the accompanying Economic Analysis for this proposed rule (Ref. 3).

This action does not contain an unfunded mandate as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action is not expected to impose enforceable duty on any state, local or tribal governments, and the requirements imposed on the private sector are not expected to result in annual expenditures of $100 million or more for the private sector. As such, EPA has determined that the requirements of UMRA sections 202, 203, 204, or 205 do not apply to this action.

This action does not have federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

This action does not have tribal implications as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). It will not have substantial direct effects on tribal governments, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes. Thus, E.O. 13175 does not apply to this action.

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997), as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of Executive Order 13045 has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safety risks.

This action is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not likely to have a significant adverse effect on energy supply, distribution, or use.

Since this action does not involve any technical standards, NTTAA section 12(d), 15 U.S.C. 272 note, does not apply to this action.

This action does not entail special considerations of environmental justice related issues as delineated by Executive Order 12898 (59 FR 7629, February 16, 1994), because it does not establish an environmental health or safety standard. This action establishes an information requirement and does not affect the level of protection provided to human health or the environment.

Therefore, it is proposed that 40 CFR chapter I be amended as follows:

In the “Medicare and Medicaid Programs; Patient Protection and Affordable Care Act; Interoperability and Patient Access for Medicare Advantage Organization and Medicaid Managed Care Plans, State Medicaid Agencies, CHIP Agencies and CHIP Managed Care Entities, Issuers of Qualified Health Plans in the Federally-facilitated Exchanges and Health Care Providers” proposed rule that appeared in the March 4, 2019 Federal Register (84 FR 7610), we solicited public comments on proposed policies that aim to move the health care ecosystem in the direction of interoperability, and to signal our commitment to the vision set out in the 21st Century Cures Act and Executive Order 13813 to improve access to, and the quality of, information that Americans need to make informed health care decisions, including data about health care prices and outcomes, while minimizing reporting burdens on affected plans, health care providers, or payers.

Since the issuance of the proposed rule, we have received inquiries from a variety of stakeholders, including healthcare provider organizations and industry representatives requesting an extension to the comment period. In order to maximize the opportunity for the public to provide meaningful input to CMS, we believe that it is important to allow additional time for the public to prepare comments on the proposed rule. In addition, we believe that granting an extension to the public comment period in this instance would further our overall objective to obtain public input on the proposed provisions to move the health care ecosystem in the direction of interoperability. Therefore, we are extending the comment period for the proposed rule for an additional 30 days.

While we believe it is in the best interest of the public and our proposed policies to extend the comment period for this proposed rule, we also acknowledge that stakeholders require appropriate implementation timelines that could be impacted by this extension. Therefore, we note that based on public comments received on this proposed rule, we will adjust the effective dates of our policies to allow for adequate implementation timelines as appropriate.

In the “21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program” proposed rule that appeared in the March 4, 2019 Federal Register (84 FR 7424), we solicited public comments on proposals to implement certain provisions of the 21st Century Cures Act, including conditions and maintenance of certification requirements for health information technology (health IT) developers under the ONC Health IT Certification Program (Program), the voluntary certification of health IT for use by pediatric health care providers, and reasonable and necessary activities that do not constitute information blocking. The comment period for the rule was scheduled to close on May 3, 2019. This document extends the comment period for the proposed rule by 30 days until June 3, 2019.

To date, we have received comments from organizations with broad stakeholder representation requesting that we extend the 60-day comment period for the proposed rule. For example, we have received comments requesting more time from clinicians, hospitals, health IT developers and developer associations, professional societies, researchers, quality improvement organizations, health plans, and patient advocacy organizations. The commenters have stated that due to the depth and complexity of the policies proposed, it is critical for the public to have extended time in providing sufficient and thoughtful comments to advance shared goals and shape the interoperability landscape. Based on these public comments and the stated goals of the proposed rule to improve interoperability and patient access to health information for the purposes of promoting competition and better care, we are extending the comment period for the proposed rule for an additional 30 days.