On August 8, 2019, the U.S. Environmental Protection Agency (EPA) issued a proposed rule to update regulations implementing Section 401 of the Clean Water Act (CWA). The rule was proposed in response to President Trump’s April 2019 Executive Order 13868, “Promoting Energy Infrastructure and Economic Growth,” which directs EPA to consult with states and tribes in reviewing and updating CWA Section 401 guidance and regulations in an effort to accelerate and promote the construction of pipelines and other energy infrastructure projects.

CWA Section 401 requires that applicants for a federal license or permit that may result in a discharge into waters of the United States must obtain a state water quality certification that the discharge complies with state water quality standards. However, existing water quality certification regulations at 40 CFR Part 121 have not been updated in nearly 50 years and have led to a level of “confusion and uncertainty . . . hindering the development of energy infrastructure” that Executive Order 13868 seeks to combat. The proposed rule represents EPA’s first comprehensive analysis of the statute, legislative history, and case law informing implementation of CWA section 401, and seeks to clarify the timeline and scope of CWA Section 401 certification review to be consistent with the plain language of the CWA.  It would replace entirely the existing water quality certification regulations. 

Key proposed changes include:

• A clear and concise statement of the scope of certification as follows:

  The scope of a Clean Water Act Section 401 certification is limited to assuring that a discharge from a federally licensed or permitted activity will comply with water quality requirements.

  This differs from – and is more stringent than – EPA’s existing regulations that require a certification to include a statement that there is a “reasonable assurance” that the activity will not violate water quality standards. The proposed scope instead requires certifying authorities to conclude that a discharge “will comply” with water quality requirements, rather than providing “reasonable assurance.”

• Definitions for scope terms “certification,” “condition,” “discharge,” and “water quality requirement.”

• A number of clarifications as to what triggers Section 401, including that Section 401 is triggered by any unqualified discharge, rather than by a discharge of pollutants, consistent with the U.S. Supreme Court holding in S.D. Warren Co. v. Maine Bd. of Envtl. Prot., 547 U.S. 370 (2006), in which Pierce Atwood represented S.D. Warren Co. before the Supreme Court. In the Warren case, the Supreme Court held that, because Section 401 uses the term “discharge” but does not specifically define that word, Congress intended that word to be broader than the term “discharge of pollutants” that is used in other provisions of the CWA (e.g., Section 402). EPA also proposes that, to trigger Section 401, a discharge must be from a point source. This is consistent with case law from the 9th Circuit, which concluded that the word “discharge” as used consistently throughout the CWA refers to the release of effluent from a point source.

• An absolute outer bound of one year as the statutory reasonable period of time for certifying authorities to act following receipt of a certification request. EPA also proposes to clarify that Section 401 does not prohibit a federal agency from modifying an established reasonable period of time, provided the modified time period does not exceed one year from receipt. Furthermore, because Section 401 does not contain tolling language, EPA proposes language clarifying that the certifying authority is not authorized to request that the project proponent withdraw and refile a certification request or to take any other action for the purpose of modifying or restarting the established reasonable period of time. It is unclear how this change would affect the long-established practice of some federal agencies that rely on withdrawals and refilings, such as the Federal Energy Regulatory Commission.

• The start of the statutory timeline for certification review upon receipt by the certifying authority of a “certification request,” rather than the receipt of a “complete application” or “complete request” as determined by the certifying authority, and definitions for “certification request” (including an enumerated list of documents and information that must be included in a certification request) and “receipt” to remove confusion as to when the clock starts.

• Specific contents of a certification, including that the certification must include specific supporting information for each condition (e.g., a statement explaining why the condition is necessary, a citation to federal, state, or tribal law that authorizes the condition; and a statement of whether and to what extent a less stringent condition could satisfy applicable requirements).

• Discretionary authority for EPA to determine if a water quality certification and related federal licenses or permits “may affect” the water quality in a neighboring jurisdiction. This modifies the EPA’s existing certification regulations to mirror the CWA in describing EPA’s procedural duties regarding neighboring jurisdictions.

• Enforcement authority defining the federal agency’s enforcement obligations.

EPA will take comment on the proposal for 60 days after publication in the Federal Register (which is expected later this week), and also will hold an informational webcast on August 20, 2019. Public hearing sessions on the proposed rule will be held in Salt Lake City, Utah, on September 5-6, 2019. Under the Executive Order, the EPA is scheduled to finalize this rule in May 2020.