Summary
Congress established the Clean Water Act (CWA) to “restore and maintain the chemical, physical, and biological integrity of the Nation’s Waters.” Under CWA Section 401, any applicant for a federal license or permit to conduct any activity that may result in any discharge into navigable waters (i.e., waters of the United States) shall provide the federal licensing or permitting agency with a Section 401 certification. The certification, issued by the certifying authority—usually the state in which the discharge originates, but sometimes a tribe or the U.S. Environmental Protection Agency (EPA)—attests that the discharge will comply with applicable provisions of certain enumerated sections of the CWA. The certifying authority may grant, grant with conditions, deny, or waive certification of proposed federal licenses or permits. Activities that require such federal licenses or permits include hydropower projects licensed by the Federal Energy Regulatory Commission (FERC) and certain activities involving the discharge of dredged or fill material into waters of the United States permitted by the U.S. Army Corps of Engineers (USACE) (e.g., pipeline projects, water resource projects, mining projects, or other development).
Many observe that the certification authority under Section 401 has strong ramifications. If a certifying authority denies certification, the federal license or permit is denied. If a certifying authority grants a certification with conditions, those conditions must be included in the final license or permit. Some license and permit applicants have expressed frustration with how some states have exercised their Section 401 authority. Key concerns include timeframes for issuing certifications, the scope of states’ reviews, and the type of conditions that states can impose when granting a certification. Some stakeholders have accused states of misusing Section 401 authority to block certain projects and have advocated for changes to the CWA or implementing regulations and guidance to limit states’ Section 401 authority. Others assert that state implementation is too lenient and may fail to block certain projects that have the potential to degrade water quality. Many states assert that Section 401 certification allows them to manage and protect the quality of waters within their states, and any efforts to limit state Section 401 authority are contrary to the CWA’s principles of cooperative federalism.
The Trump Administration criticized the manner in which some states exercised their Section 401 authority. In response to an April 2019 executive order, EPA issued updated Section 401 guidance in June 2019 and published a final rule (the 2020 Final Rule) in July 2020 to update Section 401 regulations. The 2020 Final Rule went into effect in September 2020, rescinding EPA’s 2019 Guidance and replacing its existing implementing regulations for Section 401, which were promulgated in 1971. The 2020 Final Rule included numerous changes to existing regulation and practice that narrowed the authority of certifying authorities when acting on Section 401 certification requests. Several changes addressed two broad policy issues relevant to implementation of Section 401—certification timeframes and the scope of certifications. In addition, the 2020 Final Rule included changes regarding federal review of certifications and enforcement. The 2020 Final Rule garnered interest from stakeholders. Various groups, including those representing certain energy interests, generally supported the rule. Other groups, including some states and state associations, opposed the changes. Five separate groups of states, tribes, and environmental organizations filed lawsuits challenging the 2020 Final Rule.
In January 2021, President Biden issued an executive order that directed agencies to review certain Trump Administration agency actions, including the 2020 Final Rule. EPA’s review of the rule identified a number of concerns, prompting the agency to issue in June 2021 a notice of intention to reconsider and revise the rule. On October 21, 2021, a federal district court vacated the 2020 Final Rule, prompting EPA to announce a temporary return to the 1971 implementing regulations. Various states and stakeholders appealed the district court’s decision, and on April 6, 2022, the Supreme Court temporarily reinstated the 2020 Final Rule for the duration of the appeal. In June 2022, EPA proposed a new rule to update the regulatory requirements for Section 401 certification. EPA estimates that it will issue a final rule by March 2023, according to its Spring 2022 Regulatory Agenda.
The 117th Congress continues to show interest in Section 401. Some Members have introduced legislation proposing to codify the 2020 Final Rule (S. 3277). Others have proposed amending Section 401 regarding the scope of water quality impacts that certifying authorities may consider in their certification review, as well as the scope of conditions they may impose (H.R. 3422/S. 1761).
Background
Section 401 of the Clean Water Act (CWA) requires that any applicant for a federal license or permit provide a certification that any discharges that may result from the licensed or permitted activity will comply with the act, including water quality standard requirements. Disputes have arisen over the states’ exercise of authority under Section 401. While some stakeholders argue that states are appropriately using their Section 401 authority to manage and protect the quality of their waters, other stakeholders, including some license and permit applicants (hereinafter referred to as “project proponents”), have expressed frustration with how some states have implemented this authority. Key concerns regarding implementation include the timeframes for issuing certifications, the scope of review, and the type of conditions that certifying authorities can impose when granting a certification.
Until 2020, the Section 401 implementing regulations promulgated by the Environmental Protection Agency (EPA) in 1971 were in effect. In July 2020, EPA issued a final water quality certification rule that went into effect on September 11, 2020 (hereinafter the 2020 Final Rule), replacing the 1971 regulations. In January 2021, President Biden issued an executive order that directed agencies to review certain Trump Administration agency actions, including the 2020 Final Rule. EPA’s review of the rule identified a number of concerns, prompting the agency to publish in June 2021 a notice of intention to reconsider and revise the rule. Further, on October 21, 2021, the U.S. District Court for the Northern District of California issued an order remanding and vacating EPA’s 2020 Final Rule. In response, EPA stated that the vacatur applied nationwide and required a temporary return to EPA’s 1971 regulations until the agency finalized a new rule. Various states and industry groups appealed the district court’s vacatur order. On April 6, 2022, the Supreme Court stayed the district court’s order, temporarily reinstating the 2020 Final Rule while the appeal is pending. In June 2022, EPA proposed a new rule to update the regulatory requirements for Section 401 certification. EPA estimates that it will issue a final rule by March 2023, according to its Spring 2022 Regulatory Agenda.
This report provides an overview of CWA Section 401, selected policy issues and how they were addressed in the 2020 Final Rule, and actions taken by the Biden Administration to reconsider and revise the rule.
What Is Clean Water Act Section 401?
Congress established the Federal Water Pollution Control Act (FWPCA), as amended by the CWA, to “restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.” Under CWA Section 401 (hereinafter Section 401), any applicant for a federal license or permit to conduct any activity that may result in any discharge into navigable waters—defined in the statute as “waters of the United States, including the territorial seas”—shall provide the federal licensing or permitting agency with a Section 401 certification. (See Appendix for the full text of CWA Section 401.) The certification, issued by the state (or other certifying authority) in which the discharge originates, attests that the discharge will comply with applicable provisions of certain enumerated sections of the CWA. These include effluent (i.e., discharge) limitations and standards of performance for new and existing discharge sources (Sections 301, 302, and 306), water quality standards and implementation plans (Section 303), and toxic pretreatment effluent standards (Section 307).
Effluent limitations establish the levels of specific pollutants that are allowable in a discharger’s effluent based on either the performance of technologies for a specified level of control required by the CWA (technology-based effluent limitations) or levels necessary to attain water quality standards in the waterbody receiving the discharge (water quality-based effluent limitations). Water quality standards, which are developed by the state and submitted to EPA for approval, contain three core components that specify (1) the designated uses of a waterbody (e.g., recreation, public water supply), (2) criteria to protect those uses (i.e., numeric concentrations of pollutants or narrative descriptions), and (3) an antidegradation policy. Pretreatment standards apply to indirect dischargers, who discharge to a publicly owned treatment works prior to discharge into a water of the United States.
Section 401 provides states, certain tribes, and in certain circumstances, EPA12 (hereinafter referred to collectively as “certifying authorities”) the authority to grant, grant with conditions, deny, or waive certification of proposed federal licenses or permits that may result in a discharge into waters of the United States.
If a certifying authority grants the certification, the federal licensing or permitting agency can proceed and evaluate whether the license or permit should be issued.
If a certifying authority grants the certification with conditions, the federal licensing or permitting agency can proceed and evaluate whether the license or permit should be issued. Section 401 requires any conditions listed in the certification to become a term of the federal license or permit if one is issued.
If a certifying authority denies certification, the federal licensing or permitting agency cannot issue the license or permit.
If a certifying authority waives certification, the certification is not required for the federal licensing or permitting agency to issue the license or permit. A waiver may either be explicit or implicit. Specifically, the CWA provides that if the certifying authority “fails or refuses to act on a request for certification, within a reasonable time (which shall not exceed one year) after receipt of such request, the certification requirements of this subsection shall be waived.”
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Conclusion
With the reinstatement of the 2020 Final Rule following its vacatur, and the Biden Administration’s new proposed CWA Section 401 rule, stakeholders continue to debate how CWA Section 401 should be implemented. Much of the debate about Section 401 implementation centers on the appropriate balance of “cooperative federalism” between federal agencies’ and states’ authorities. CWA Section 101(b) provides that “it is the policy of the Congress to recognize, preserve, and protect the primary responsibilities and rights of States to prevent, reduce, and eliminate pollution, to plan the development and use (including restoration, preservation, and enhancement) of land and water resources, and to consult with the Administrator in the exercise of his authority under this Act.” States and others who opposed the changes to the Section 401 implementing regulations included in the 2020 Final Rule argued that the changes undermined the CWA’s structure of cooperative federalism. Some asserted that the rule inappropriately limited certifying authorities’ ability to protect their own water resources. During the Trump Administration, EPA argued that the 2020 Final Rule was consistent with its role, established by Congress, to administer the CWA, which includes ensuring “that there are sufficient authorities and limitations in place for States and Tribes to effectively implement CWA programs within the scope that Congress established.”
On its own, as discussed, the 2020 Final Rule included numerous changes to regulation and practice that narrowed the authority of states when acting on Section 401 certification requests. Other EPA regulatory actions during the Trump Administration might have amplified the impact of some of those changes. Notably, the Navigable Waters Protection Rule, which EPA and the Army Corps of Engineers (Corps) promulgated in April 2020, narrowed the definition of “waters of the United States,” thereby reducing the number of waters and wetlands that fall under the jurisdiction of the CWA. Under the 2020 Final Rule, EPA limited the application of Section 401 to point source discharges into waters of the United States. Therefore, taken together, these two regulatory actions could have had a more significant impact, some argue, than they might have when considered in isolation. Some have been concerned that these actions could leave a regulatory gap and prevent states from weighing in on activities that may affect waters within their states. For example, activities that result in a discharge to headwaters and other water resources that are no longer considered waters of the United States under the Navigable Waters Protection Rule would no longer require a CWA permit, nor would they require a Section 401 certification. In responding to such concerns in the 2020 Final Rule, EPA argued that the rule promoted the overarching goals of the CWA to protect water quality while preserving states’ major role in implementing the CWA. EPA (and the Corps) also argued, in promulgating the Navigable Waters Protection Rule, that narrowing the scope of the CWA’s jurisdiction would not reduce protection of the nation’s waters because state, local, and tribal regulations and programs also provide protective coverage for water resources. EPA and the Corps asserted that the Navigable Waters Protection Rule would give state, tribal, and local authorities more flexibility to determine how best to manage waters within their borders.
Like the 2020 Final Rule, the Navigable Waters Protection Rule was also vacated by federal district courts, and EPA and the Corps have similarly announced their intentions to rescind and revise the rule.204 Unlike with the 2020 Final Rule, however, there is no pending appeal of the vacatur of the Navigable Waters Protection Rule.205 Separately, a pending Supreme Court case could affect the regulatory effort currently under way to revise the definition of “waters of the United States.”
Congress has shown interest in the role of states in implementing the CWA, including recent interest in certifying authorities’ implementation of Section 401 and long-standing interest in the scope of the definition of “waters of the United States,” which would indirectly affect the scope of any potential future new Section 401 rule. In the future, Congress may be interested in overseeing the Administration’s efforts to promulgate new regulations for both Section 401 and for the definition of “waters of the United States,” as well as the Administration’s implementation of the new rules.