Troutman Pepper

On May 27, the Environmental Protection Agency (EPA) announced its intent to reconsider the Clean Water Act (CWA) Section 401 final rule issued by the Trump administration in June 2020 (Final Rule).

Section 401 of the CWA provides a cooperative federalism framework where states and authorized Tribes can issue a water quality certification that places conditions on a proposed project or action requiring a federal permit. Under President Trump, EPA revised the regulations implementing Section 401, to among other reasons, create greater regulatory certainty in the process, reaffirm one year means one year or less as authorized by statute, address the scope of review by clarifying conditioning authority is focused on water quality effects of the discharge as opposed to the entire activity, and modernize the application process. While some states have intervened in support of EPA to defend the Final Rule (including Texas and West Virginia), other states (including New York and California) and environmental groups have challenged the Final Rule. Courts are currently holding these proceedings in abeyance in light of the change in administration. It is not clear how the reconsideration notice will affect these abeyances, but the courts may simply continue to hold the cases in abeyance pending a replacement rule being issued.

EPA seeks to conduct public outreach to gather input on whether the Final Rule serves CWA Section 401’s goal of ensuring that states and authorized Tribes are empowered to protect their water quality, which will then inform a subsequent proposal. Particularly, EPA is soliciting comments about whether the Final Rule appropriately considers cooperative federalism principles central to CWA Section 401, including but not limited to, the following:

  1. Pre-filing meeting requests: The utility of applicants submitting a pre-filing meeting request to state agencies 30 days before submitting the water quality certification application.
  1. Certification request: Whether the Final Rule requirements for a “certification request” (that begins the one-year period for review) is too limited and does not provide the state or authorized Tribe enough information to process the request.
  1. Reasonable period of time: Whether states and authorized Tribes should have greater input on the federal process for determining and modifying the “reasonable period of time” that the certifying authority has to review the application for water quality certification.
  1. Scope of certification: Whether the scope permitted by the Final Rule is too narrow and whether water quality conditions can be related to the potential impacts from the “activity as a whole.” The Final Rule limited the scope of the conditions of a water quality certification to the discharge that affects water quality. EPA also seeks comment on its interpretation of the term “other appropriate requirements of State law,” which is one of the bases for conditions listed in Section 401.
  1. Certification actions and federal agency review: The utility of the Final Rule’s requirement that the state or Tribal authority provide specific information supporting certification or denials. Additionally, EPA is seeking comments on whether it is appropriate for federal agencies to review certifying authority actions for consistency with procedural requirements, including the appropriateness of a federal agency’s determination that the state or Tribe has waived its authority. Additionally, EPA is interested in the ability of the state or Tribal authority to respond to and cure any deficiencies.
  1. Enforcement: Whether the state or Tribe should have a role in the enforcement of water quality certification conditions. The Final Rule provides that the federal agency enforces state or Tribal issued water quality certifications as a component of the overall federal permit.
  1. Modifications: Whether re-openers are appropriate and if water quality certifications should be able to be modified by the federal agency, the state or Tribal authority, and EPA. The Final Rule had prohibited “re-openers.”
  1. Neighboring Jurisdictions: The sufficiency of the neighboring jurisdiction process (e., the participation and objection process for states where the discharge does not originate but where water quality impacts may still occur).

In an associated Q&A document released concurrently with the reconsideration announcement, EPA makes clear that the Final Rule remains effective during this reconsideration proceeding. However, it also indicates a willingness to “evaluate potential administrative approaches to help address … near-term challenges” prior the reconsideration being finalized.

EPA also indicates that it does not intend to readopt the previous set of regulations that were in place prior to the Final Rule, which suggests the agency acknowledges that the historical 401 certification process was in tension with the modern CWA framework. It will be important for project proponents to highlight the significant burdens and delays that the previous interpretation of 401 certification authority caused, including for many projects that are important to achieve the Biden administration’s climate change and infrastructure goals.

Comments on the announcement are due within 60 days of its publication in the Federal Register and should be submitted in docket EPA-HQ-OW-2021-0302 via the rulemaking portal https://www.regulations.gov/ or by email at OW-Docket@epa.gov.

×