(a) Authority to Participate.—The Secretary of a military department, and the Secretary of Defense with respect to matters concerning a Defense Agency, when engaged in an authorized activity that may or will result in the discharge of pollutants, may make payments to a pollutant banking program or water quality trading program approved in accordance with the Water Quality Trading Policy dated January 13, 2003, set forth by the Office of Water of the Environmental Protection Agency, or any successor administrative guidance or regulation.

(b) Treatment of Payments.—Payments made under subsection (a) to a pollutant banking program or water quality trading program may be treated as eligible project costs for military construction.

(c) Discharge of Pollutants Defined.—In this section, the term "discharge of pollutants" has the meaning given that term in section 502(12) of the Federal Water Pollution Control Act (33 U.S.C. 1362(12)) (commonly referred to as the "Clean Water Act").