CSG Law Alert: Revised Rule Expands Role of States, Tribes in Clean Water Act Certification

A recently issued final rule is poised to expand the role of states and tribes with respect to federal licensing and permitting under the Clean Water Act.

On September 13, 2023, the U.S. Environmental Protection Agency issued a final rule entitled the “Clean Water Act Section 401 Water Quality Certification Improvement Rule.” Under Section 401 of the Clean Water Act, a Federal agency may not issue a license or permit to conduct any activity that may result in discharges into waters of the United States unless the applicable state or tribal authority decides upon, or waives, a Section 401 water quality certification. In granting a Section 401 certification, the certifying authorities may include conditions, such as effluent limitations and monitoring requirements, necessary to assure that the applicant for a Federal license or permit will comply with the Clean Water Act and “any other appropriate requirement of State law.”

This rulemaking follows President Biden’s Executive Order 13990 (Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis), signed January 20, 2021, directing Federal agencies to review actions taken in the prior four years that may be inconsistent with the policies stated in the order, which includes bolstering resilience to climate change impacts and prioritizing environmental justice. As such, the EPA reviewed the prior rule issued under the Trump administration on July 13, 2020, which set forth a more limiting interpretation of the certifying authorities’ powers regarding Section 401 water quality certifications.

Notable aspects of the final rule include the scope of review for certification and the period of time for a certifying authority to act before it waives its rights. Pursuant to the final rule, a Section 401 certification is required for a Federal license or permit to conduct “any activity” which may result in any discharge from a point source into waters of the United States, including the activity’s construction and operation. Accordingly, the presence of, or potential for, a discharge is a key determinant for when a water quality certification is required. The consideration of such water quality-related impacts could include, for example, erosion and sediment control, stormwater management, endangered species protection, minimum in-stream flows, prevention of aquatic habitat loss, and prevention of groundwater contamination. This “activity-based” scope of review departs from the prior rule’s “discharge-only” approach, which was limited to water quality-related impacts of the specific discharges from the project (i.e., discharges from a discrete point source).

With respect to the period of time for a certifying authority to act, a federal license or permit applicant initiates the certification process by submitting a “request for certification” to the applicable certifying authority. Thereafter, the Clean Water Act requires that the certifying authority act upon the request within a “reasonable period of time” that cannot exceed one year before it waives its decision on the request. While a certifying authority and Federal agency may jointly agree to set the reasonable time period (which shall not exceed one year), the final rule sets a default six-month time period for the certifying authority’s decision if they are unable to reach an agreement. The EPA hopes this default approach will obviate the need for a dispute resolution process in the event the certifying authority and Federal agency are unable to agree to a reasonable time period.

The U.S. Environmental Protection Agency asserts that the final rule is intended to “to better align its regulations with the cooperative federalism and water quality protection principles enshrined in the [Clean Water Act’s] text and legislative history.” Moreover, the agency asserts the final rule provides greater clarity and acknowledgement of essential water quality protection concepts from Executive Order 13900, including updating the regulatory text “to foster a more efficient and predictable certification process.”

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