On June 1, 2020, the United States Environmental Protection Agency (EPA) announced a final rule revising license and permit issuance rules under Section 401 of the Clean Water Act (CWA).  This new rule comes in response to President Trump’s Executive Order 13868, which required the EPA to review and modify Section 401 to be consistent with the Administration’s goal of promoting energy infrastructure development.

Section 401 requires applicants for federal licenses or permits that conduct an activity that may result in a discharge into a navigable water to first obtain a water quality certification from the state or tribe in which the discharge occurs.  A water quality certification verifies that a project complies with established water quality standards.  Without the state or tribal certification, the federal agency cannot authorize the project.  The required certification gave states significant authority over federally licensed and permitted projects within their boundaries, especially in states with high water quality standards.

The final rule revises the certification process under Section 401 in a number of ways.  First, it limits the timeline for certifying agencies, be it a state agency, EPA, or a tribe, to review and act on a Section 401 certification, requiring final action no later than one year after receipt of a request.  A request is a written, signed, and dated communication that includes the required project documents and information.  Additionally, the revision does not allow for period tolling and prohibits states from initiating studies that cannot be conducted within this time or requesting information that cannot be obtained within these time limits.  These changes are intended to fast track the permitting process.  The final rule also limits the scope of certification review to assuring that the discharge to a water of the United States from the licensed or permitted activity will comply with “water quality requirements” as defined in the rule.  Previously, certification review allowed for consideration of impacts of the entire activity of the project, not simply the discharge.  The EPA guidance states that such considerations would be outside the scope of the CWA.  Finally, the new rule also limits enforcement of Section 401 to the federal agency responsible for issuing the license or permit that triggers the certification requirement.  This changes the prior enforcement scheme which included a continuing state role in enforcement based on conditions requiring compliance with state water quality standards.

The final rule will become effective 60 days after the date of publication in the Federal Register.  The rule will almost certainly face legal challenge.  The rule has been criticized as circumventing state water quality standards by both imposing strict timelines and preventing states from assessing comprehensive impacts of projects within their own borders and subject to state law.  The EPA Director, Andrew Wheeler, stated the revisions are necessary to put in place clear guidelines for permitting and prevent overbroad application of the CWA to hold “energy infrastructure projects hostage.”

For additional information on this topic, please contact Palmer Hilton at philton@somachlaw.com or (916) 446-7979.

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