Consistent with the President’s focus on streamlining the permitting process and jumpstarting energy infrastructure projects as outlined in his Executive Order 13868, the U.S. Environmental Protection Agency (USEPA) published new rules related to the state’s role in certifying that a project requiring a federal permit under the Clean Water Act (CWA) will comply with state water quality standards. The new rule is largely in response to the use of the Section 401 water quality certification requirement by some states to, in the opinion of the Administration, unduly delay and in some cases, bring to a halt energy infrastructure projects for reasons often not related to water quality. 

EPA Administrator Andrew Wheeler stated, “Our proposal is intended to help ensure that states adhere to the statutory language and intent of the Clean Water Act. When implemented, this proposal will streamline the process for constructing new energy infrastructure projects that are good for American families, American workers, and the American economy."

The proposal largely mirrors the Section 401 guidance which was issued by the EPA on June 7, 2019.  The proposed rule and guidance make several important clarifications and changes to what had been the traditional Section 401 water quality certification process:

1. Time Frames.  The CWA limits a state’s period for a request for water quality certification to a “reasonable” period of time, not to exceed one year.  EPA makes clear that the time frame for review begins upon the receipt by the state of a request for certification, not upon receipt of a “complete” application.  Further, EPA states that not all projects require a full year for review and that the measure of a “reasonable” time frame for review will be dependent upon the type of project and the complexity of the project. Following the lead of EPA, the Army Corps of Engineers announced that the “reasonable” time for states to review a request for water quality certification for dredge and fill permits (Section 404 of the CWA) would be sixty (60) days, not a year.  Failure to act upon a request within that time frame would result in a waiver of the certification requirement.

2. Federal Oversight.  Under prior process and procedure, a denial of a state water quality certification by the state would have to be appealed by the project proponent to the applicable Court of Appeals.  The proposed rule would allow the federal licensing/permitting agency to review whether the state denial or approval of a water quality certification with conditions was reasonable and would allow for federal review of those state decisions potentially placing the onus upon the states to file a legal challenge should the federal agency determine that the denial of the certification was not reasonable and constituted a waiver or that conditions were not in adherence with the Act.

3. Scope of Review.  EPA attempts to limit the scope of review of a water quality certification by the state strictly to the issue of water quality and whether the project will comply with water quality standards.  Attempts by states to expand the scope of review to include issues such as climate change, endangered species, or other issues will not be acceptable.  Reviews of these issues may be relevant with regard to other permits/authorizations, but not the Section 401 water quality certification.

If finalized, the proposed rule will likely face legal challenge.  Of particular note is case law which seemingly has authorized the expansion of the scope of review for states under Section 401 to issues outside water quality.  The proposed rule is now open for a sixty (60) day public comment period. 

Click here to access a copy of the proposal.