On Friday, August 9, the Environmental Protection Agency (“EPA”) unveiled a pre-publication version of a notice of proposed rulemaking (“NOPR”) to clarify state water quality certification (“certification”) procedures under Section 401 of the Clean Water Act (“CWA”) to allow for increased regulatory certainty in federal licensing and permitting activities, and particularly authorization of infrastructure projects.  EPA Administrator Andrew Wheeler announced on Friday that the “proposal is intended to help ensure that states adhere to the statutory language and intent of Clean Water Act.”  The NOPR proposes substantive changes to the scope of state water quality certification authority under the CWA and the procedures governing these certifications, focusing on the plain language of the statute and at times departing from prior case law precedent.

Significant components of the NOPR are summarized below.  EPA has established a 60-day period for public comment on the proposed rule, from the date of publication in the Federal Register.  In light of the substantial modifications to the scope, substance and procedures related to state water quality certification, the NOPR presents a unique opportunity for utilities, manufacturers, developers, and other regulated business entities to help shape a significant regulatory program. 


Section 401 of the CWA requires that any applicant for a federal license or permit that may result in a discharge to navigable waters obtain a water quality certification from the state or states in which the discharge will originate.  Some of the most common examples of licenses or permits that may be subject to Section 401 certification are CWA Section 404 permits for the discharge of dredged or fill material, Rivers and Harbor Act Section 9 and 10 permits issued by the Army Corps of Engineers, hydropower licenses and natural gas pipeline certificates issued by the Federal Energy Regulatory Commission, and CWA section 402 National Pollutant Discharge Elimination System (“NPDES”) permits where EPA administers the permitting program.  Although the CWA is a federal statute, section 401 delegates to the states and certain Native American Tribes authority to issue a water quality certification, so that discharges from a federally licensed project satisfy state water quality standards.

Recently, the state water quality certification process has been a cause of delay, uncertainty, and impediment  for a number of proposed infrastructure projects.  EPA’s NOPR is a response to these barriers and, if adopted, would considerably limit state Section 401 programs nationwide and in some instances curtail state efforts to delay or block projects.

To address these delays, on April 10, 2019, the Trump Administration issued an Executive Order to promote energy infrastructure and economic growth.  On June 7, 2019, EPA issued an updated Section 401 guidance document that provides an overview of the concepts introduced in the proposed rule.

Scope of State Section 401 Review

EPA proposes to “interpret the scope of Section 401 as protecting the quality of waters of the United States from point source discharges associated with federally licensed or permitted activities by requiring compliance with the CWA and EPA-approved state and tribal CWA regulatory program provisions.”  Here, EPA would focus a state’s review on the water quality of the actual discharge rather than the overall activity that is the subject of the federal permitting effort.

Relatedly, EPA in the NOPR offers an interpretation of Section 401’s scope that is considerably narrower than the U.S. Supreme Court’s landmark 1994 ruling in Public Utility District No. 1 of Jefferson County v. Washington Department of Ecology. Explaining that the federal regulations that guided the Court’s PUD No. 1 ruling were enacted prior to the 1972 CWA, and that the Court in PUD No. 1 lacked the benefit of EPA’s interpretation, EPA interprets Section 401 water quality certification as pertaining only to point-source discharges associated with a federally licensed or permitted activity—and not the entire project proposal.

Thus, EPA’s interpretation of CWA Section would disallow a state’s broad review and conditioning of a proposed project.  EPA maintains that states’ conditions are limited to water quality standards in EPA-approved plans, and that broader, non-water quality impacts are more appropriately reviewed by the federal licensing or permitting agency under the National Environmental Policy Act and other applicable environmental programs.

Time-Period for Section 401 State Review

One-Year Maximum Period to Act on a Water Quality Certification Request

Building on the D.C. Circuit’s early 2019 ruling in Hoopa Valley Tribe v. FERC, EPA in the NOPR clarifies that one year is the “absolute outer bound” for states to act on requests for water quality certification under Section 401.  EPA states that this one-year period begins to run from the state’s receipt (meaning the date the request was received) of a certification request (meaning a signed and dated written communication requesting certification with a description of the project, its discharges, and receiving waters).  The NOPR also seeks to amend EPA’s regulations to prohibit a state and water quality certification applicant from engaging in a coordinated effort of withdrawal and resubmittal of water quality requests to toll the Section 401 one-year maximum time period.  Thus, the NOPR states:

The certifying authority is not authorized to request the project proponent to withdraw a certification request or to take any other action for the purpose of modifying or restarting the established reasonable period of time.

EPA reasons that this statement reflects the plain language of Section 401, as well as the statute’s legislative history.  EPA also recognizes that the statute expressly requires state action within a “reasonable” time period (up to a maximum of one year), and, therefore that all projects should not require a full year for the state to act.

In setting the reasonable period of time for a certification—either on a project-by-project basis or categorically through a rulemaking—EPA proposes to require federal agencies to consider:  (1) the complexity of the proposed project; (2) the potential for any discharge; and (3) the potential need for additional study or evaluation of water quality effects from the discharge.  Although EPA is seeking comment on whether a “reasonable” time period should be categorially determined by regulation, EPA also states that federal agencies should be able to modify the established reasonable period of time as long as the modification does not exceed the one-year period.

Failure or Refusal to Act on a Water Quality Request

Section 401 provides that the state has waived its certifying authority if it fails or refuses to act on a request for water quality certification.  In its NOPR, EPA defines the meaning of a state’s “failure or refused to act” on a Section 401 application, finding that a state has waived when it:

actually or constructively fails or refuses to grant or deny certification, or waive the certification requirement, within the scope of certification and within the reasonable period of time.

With this definition, EPA maintains that a certifying agency waives when it “states its intention unambiguously in writing or takes no action within the reasonable period of time.”  Further, a certifying agency “constructively fails or refuses to grant or deny certification” when it acts “outside the scope of certification,” such as including conditions beyond the scope of Section 401, as described above.

Water Quality Certification Modifications

In light of the statute’s one-year time limit for acting on a Section 401 certification request, EPA’s NOPR solicits comment on whether and to what extent states or tribes should be able to modify a previously issued certification, either before or after the time limit expires, before or after the license or permit is issued, or to correct an aspect of a certification or its conditions remanded or found unlawful by a federal or state court or administrative body.

Role of Federal Agencies

State Waiver Determinations

The NOPR reaffirms precedent established by the D.C. Circuit in City of Tacoma v. FERC and other cases that the federal permitting agency determines whether a state waiver has occurred.  EPA places the burden on the state to comply with Section 401, and specifically describes that states run the “risk [of] having [a] certification denial be set aside by the permitting federal agency” if the state exceeds the scope of its CWA authority.

Moreover, in a reversal of longstanding judicial precedent, including the Second Circuit’s decision in American Rivers v. FERC, EPA in the NOPR would allow the federal licensing or permitting agency to review and reject conditions in a state water quality certification that are beyond the scope of addressing discharges to meet state water quality standards.  In doing so, the NOPR proposes that the federal licensing or permitting agency would allow additional time (up to the end of the reasonable time period for certification) for the state to remedy its certification.

Water Quality Enforcement

The NOPR asserts that the federal permitting agency is solely responsible for enforcing the state water quality conditions that ultimately become part of the federal approval.  EPA notes that Section 401 does not provide an independent regulatory enforcement role for state certifying authorities for conditions included in federal licenses or permits.

EPA Oversight of Certifications and Modifications

Currently, EPA does not play an active role in the issuance of water quality certifications.  EPA notes that Section 401 does not provide an express oversight role for EPA with respect to the issuance or modification of individual water quality certifications by state authorities.  The NOPR solicits comments on the appropriate scope of EPA’s general oversight role over state and tribal certifications and modifications.

Opportunity for Public Comment

EPA’s NOPR seeks sweeping changes to the scope of state water quality certification authority under CWA Section 401, as well as the procedures governing these certifications.  EPA’s proposed new regulations are intended to facilitate expediency and efficiency in federal licensing and permitting activities by reducing overlapping authorities and reducing the time in which states can act on water quality certification requests.

EPA’s proposal, therefore, offers a highly unique and important opportunity for the regulated community to help shape final regulations that have not been amended for nearly 50 years, and which could be highly beneficial in meeting business objectives of new project development and reauthorization of existing infrastructure.  All comments will be due 60 days after the NOPR is published in the Federal Register in Docket ID No. EPA-HQ-OW-2019-0405.

For more information on EPA’s NOPR and CWA Section 401 requirements, please contact Catherine Little, Brooks Smith, Fitzgerald Viera, Hallie Meushaw, and Chuck Sensiba.