In another “Waters of the United States” development, the EPA published its final 2023 Clean Water Act Section 401 Quarter Quality Certification Improvement Rule on September 27, 2023. (88 Fed. Reg. 66558.) The final 2023 Rule revises and replaces the 2020 Rule’s regulatory requirements for water quality certification that were adopted by the prior federal administration. The updates seek to realign the scope of Section 401 certification with established practices, while also restoring the roles of states, territories, and authorized Tribes as certifying agencies.
Background on Section 401 Permitting
Section 401 of the Clean Water Act (CWA) requires applicants for any federal license or permit that may result in discharge from a point source into “waters of the United States” to obtain a water quality certification or waiver from the certifying authority (i.e., states, territories, and Tribes with treatment in a similar manner as a state [TAS]). To initiate the process, the applicant must submit a “request for certification,” and the certifying authority must act upon that request within a “reasonable period of time” (which shall not exceed one year).
If the certifying authority determines the proposed activity will comply with statutory limitations and requirements (i.e., effluent limits; monitoring and reporting; etc.), it may grant or waive certification, after which the federal agency can issue the corresponding federal license/permit. If the certifying authority denies certification, no license may be issued. Alternatively, the certifying authority may waive certification simply by “failing or refusing to act on a request for certification within a reasonable period of time.”
The 2020 Rule
On April 15, 2019, then-President Trump issued Executive Order 13868, entitled “Promoting Energy Infrastructure and Economic Growth,” which directed the EPA to propose new regulations governing Section 401 permitting consistent with the order’s policy of “promot[ing] private investment in the Nation’s energy infrastructure.” Pursuant to this directive, EPA promulgated a final rule on July 13, 2020.
The 2020 Rule clarified that federal agencies unilaterally set the “reasonable period of time” for the certifying authority to act on a certification request, clarified that certification was required for any federally licensed activity that discharges into WOTUS, and reaffirmed that certifying authorities may explicitly waive 401 certification. The 2020 Rule also introduced several new features, including one that allowed federal agencies to review certifying agencies’ certification decisions for compliance and, if found non-compliant, deem the non-complying certifications as waived. The 2020 Rule also prohibited certifying agencies from requesting applicants to withdraw and resubmit a certification request. Finally, the 2020 Rule rejected the traditional scope of review as one that considered “the activity as a whole,” in favor of a narrower and more limited “discharge-only” approach.
The 2020 Rule was challenged in three federal district courts by various states, tribes, and NGOs, where, at varying times, it was remanded, reinstated, and ultimately vacated for further proceedings. (E.g., In re Clean Water Act Rulemaking (N.D. Cal. 2021) 568 F. Supp. 3d 1013 (reversed and remanded by (9th Cir. 2023) 60 F.4th 583.)
2023 Rulemaking Process
On January 20, 2021, President Biden signed Executive Order 13990, entitled “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.” (86 Fed. Reg. 7037.) The order directed the EPA to review and, as appropriate, revise or replace any or all portions of the 2020 Clean Water Action (CWA) Section 401 Certification Rule that had been adopted by the Trump administration.
On May 27, 2021, the EPA announced its intent to revise the 2020 Rule and update the regulatory requirements for water quality certification under Section 401. The EPA later circulated the proposed rule on June 2, 2022, which updated existing regulations to be more consistent with the statutory text of the CWA and to clarify elements of the Section 401 certification process, particularly as it applied to state, federal, and Tribal authority. Thereafter, the EPA conducted pre-proposal engagement and provided a 60-day public comment period.
After receiving public comments and incorporating stakeholder feedback, the EPA published the final Section 401 Rule on September 27, 2023. The rule will become effective on November 27, 2023, and apply to all Section 401 permit applications from then on.
The 2023 Rule Update
The updated 2023 Rule aims to enhance certification review and provide more regulatory certainty that better reflects the CWA’s cooperative federalism framework. The 2023 Rule makes key updates to five major areas of the certification process, including: pre-filing meeting requests; requests for certification; the length of “reasonable period of time”; scope of review; and certification decisions. The Rule also clarifies provisions related to: federal agency review; neighboring jurisdictions; certification modifications; and Tribal TAS status.
Pre-Filing Meeting Requests (Section 121.4)
The 2023 Rule reaffirms that project proponents must request a pre-filing meeting from the certifying agency at least 30 days before it requests certification. (Section 121.4).
As part of the update, the 2023 Rule now provides certifying authorities with the ability to waive or shorten the pre-filing meeting request requirement either on a case-by-case basis (i.e., individual) or on a categorical basis (i.e., for certain types of projects, permits, etc.). The Rule also provides a recommended list of pre-filing meeting request contents to ensure any issues are timely addressed and the certification process moves efficiently.
Requests for Certification (Section 121.5)
The 2023 Rule updates the submission requirements for requests for certification. (Section 121.5). Now, requests for certification must be in writing, signed, date, and include defined minimum contents. For example, if the certification request is for an individual license/permit, it must include a copy of the federal license/permit application and any readily available water-quality materials that informed the application. Alternatively, if the certification request is for a general license/permit, then it must include a copy of the draft federal license/permit and any available water quality-related materials that informed the draft permit.
Moreover, if the EPA is acting as the certifying authority, the Rule sets forth seven additional components that the project proponent must submit. To this end, the Rule now allows state and Tribal certifying authorities to define their own contents or forms for submitting requests for certification, in lieu of relying on EPA’s default list. But if they choose not to do so, the seven elements contained in the Rule’s default list must be included in the request.
Finally, the 2023 Rule now requires certifying authorities to send written confirmation of the date it received a request for certification to the project proponent and the corresponding federal agency.
Reasonable Period of Time (Section 121.6)
Section 121.6 requires certifying agencies to review certification requests and act on those requests within a “reasonable period of time.” (Section 121.6.) For the first time, the 2023 Rule now provides certifying authorities a role in determining, with the federal agency, the length of the “reasonable period of time” for the certifying authority to review a certification request. Certifying authorities may collaborate with federal licensing or permitting agencies to jointly establish reasonable periods of time before receiving a request. For example, time periods may be established on a case-by-case basis, or on a categorical basis (i.e., through a memorandum of agreement between the federal and certifying agencies).
If the certifying and federal agencies do not reach an agreement, the “reasonable period of time” will default to six months from the time the certifying authority receives a compliant certification request.
In the event the certifying authority needs more time to comply with its public notice procedures or if there is a force majeure event, the agency may, subject to proper notice, automatically extend the review period, provided that the extension does not exceed the statutory maximum of one year.
Scope of Review (Section 121.3)
The 2023 Rule realigns certification processes with previously-established practices that preceded the 2020 Rule. In particular, the Rule modifies the regulatory text to better clarify the extent of the activity subject to certification and the water quality limitations inherent to Section 401.
Under the 2020 Rule, certifying authorities could only consider potential water quality impacts from a proposed project’s point source “discharges.” The 2023 Rule replaces this “discharge-only” approach and returns the scope of review to the “whole activity” that will be subject to the federal permit. Specifically, the Rule provides that, when a certifying authority reviews a certification request, the authority shall evaluate whether the activity complies with all water quality requirements.
However, the Rule clarifies that this evaluation is limited only to those water-quality-related impacts from the activity subject to the federal permit, including the activity’s construction and operation (i.e., impacts that adversely affect the chemical, physical, and biological integrity of WOTUS). Therefore, indirect project impacts with no connection to water quality should not be considered.
To this end, the 2023 Rule also clarifies that the certifying authority’s review is limited to considering impacts to WOTUS, except where a state or authorized Tribe has jurisdiction over those waters. In other words, the certifying authority’s analysis of any given activity is limited to adverse water-quality impacts that may prevent compliance with applicable state or Tribal water quality requirements.
Finally, in granting the certification, the certifying authority must include any requisite conditions that will ensure the activity complies with all applicable water quality requirements (e.g., Sections 301, 302, 303, 306, and 307, and/or any applicable state or Tribal statutes and regulations governing water quality). As such, any conditions that are imposed to address impacts should not be treated as part of the “activity” under consideration.
Certification Decisions (Section 121.7)
The 2023 Rule also establishes that a certifying agency may “act on a request for certification” in one of four ways: (1) by granting certification; (2) by granting certification with conditions; (3) denying certification; or (4) expressly waiving certification. The Rule also requires all final certification decisions be in writing and defines recommended minimum contents for each type of decision.
For example, the Rule recommends that each decision identify the type of decision being made, the applicable federal license/permit, acknowledgement that the certifying agency complied with public noticing procedures. For certifications granted with conditions, the Rule recommends the authority provide a statement explaining why each condition is necessary to assure the activity will comply with water quality requirements. Alternatively, for denials, the Rule recommends the authority explain why it is unable to certify compliance with water quality requirements.
Federal Agency Review (Sections 121.8–121.9)
The 2023 Rule shifts away from the 2020 Rule by limiting the role of federal agency review. Now, federal agencies are limited to verifying: (1) whether the certifying authority issued a certification decision; (2) the authority confirmed it complied with public noticing procedures; and (3) the authority acted on the request within a reasonable period of time.
Neighboring Jurisdictions (Sections 121.12–121.15)
The 2023 Rule adds more detail to the discussion of neighboring jurisdictions and how they can participate in the permitting process when the EPA has determined that a proposed project in another jurisdiction may affect their water quality. The regulatory text now clarifies: the roles of actors involved; when the neighboring jurisdiction process begins; and identifying minimum contents of notifying the EPA.
Certification Modifications (Section 121.10)
The 2023 Rule authorizes certifying authorities and federal agencies to modify a grant of certification, but only if the modifications are to portions that are agreed upon by both entities. The Rule clarifies that the certifying authority cannot unilaterally modify a certification decision, nor can it change the nature of the final decision through the modification process (i.e., grant, deny, waive).
Tribes Applying for Treatment in a Similar Manner as a State (Section 121.11)
For the first time, the 2023 Rule includes provisions for Tribes to obtain TAS status for purposes of Section 401 certification or to obtain TAS status to act as a neighboring jurisdiction. This will not allow tribes to have more involvement in the certification process without also having to apply for TAS for water quality standards under Section 303(c).
The Final 2023 Rule will go into effect on November 27, 2023 and apply to all prospective certification decisions. All other certifications currently pending review or submitted before then will be governed by the 2020 Rule or corresponding certification scheme.
For more information, the EPA has provided an overview of the final rule, along with a summary of key updates and a comparison of the 2023 Rule vs. the 2020 Rule. The Agency is also finalizing conforming amendments to the water quality certification regulations for EPA-issued NPDES permits. (Docket ID No. EPA-HQ-OW-2022-0128; -0391).
Brian Plant, Of Counsel Attorney at RMM, advises private and public agency clients regarding a broad range of permitting actions under Federal and State water quality, endangered species, and other natural resources laws and regulations. He can be reached at: [email protected].
Bridget McDonald, Associate Attorney at RMM, advises private and public agency clients regarding a broad range of permitting actions under Federal and State water quality laws, as well as CEQA, the Coastal Act, and matters related to planning, zoning, and housing. She can be reached at: [email protected].