On July 13, 2020, the EPA released its final rule updating and clarifying the substantive and procedural requirements for water quality certification under Clean Water Act (“CWA”) § 401.  This new rule represents the first revision to the applicable regulations since the CWA was enacted in 1971.  The new rule replaces the entirety of the 1971 certification regulations and is “intended to make the Agency’s regulations consistent with the current text of CWA § 401, increase efficiencies, and clarify aspects of CWA § 401 that have been unclear or subject to differing legal interpretations in the past.”  85 Fed. Reg. 42236.  The new rule, 40 C.F.R. §121.1 et seq., goes into effect on September 11, 2020.  The CWA § 401 process is important to the issuance of federal permits for many types of infrastructure projects (pipelines, roads, and the like) as well as to most CWA § 404 permits for the discharge of dredged or fill material.

Under the new rule, a 401 certification is required whenever there is the potential for any federally licensed or permitted activity to result in a discharge from a point source into waters of the United States.  40 C.F.R.  §121.2.    The scope of certification is limited to assuring that a discharge from a federally licensed or permitted activity complies with state ambient water quality standards and any applicable effluent limitations.  40 C.F.R. §121.3   This is a departure from past precedent where a state could use the certification process to comment on, and perhaps condition, the entire project proposal rather than just the permitted discharge. Consequently, impacts such as greenhouse gas emission impacts of the project or other indirect impacts that it might pose with regard to water quality will not be allowed as a basis for denial of or conditions to the certification.  In the past several years, some state agencies denied certification for pipeline projects based on the assertion that greenhouse gas emissions from the project would result in climate change impacts that would indirectly adversely affect coastal waters.

The new rule is indeed more consistent with underlying Clean Water Act authority and generally streamlines the process for the permit applicant.  Given the consistency of the new federal rule with Louisiana’s existing certification program, the new rule is unlikely to significantly affect applicants’ dealings with the Louisiana Department of Environmental Quality (“LDEQ”) in seeking certifications.

Required request for pre-filing meeting

The new rule requires that the project proponent request a pre-filing meeting with the certifying authority no later than 30 days prior to submitting its application for certification. The certifying authority is not required to grant or respond to the request.  40 C.F.R. §121.4.  There is no restriction on how far in advance of the filing a pre-filing meeting may be requested.  Currently, LDEQ rules do not require a pre-filing meeting request, but applicants should ensure that they meet this requirement until LDEQ rules are updated.

Contents of certification request

While the contents of a certification request were not specifically provided in prior federal regulations, the new rule specifies the minimum required contents:

  1. Identify the project proponent(s) and a point of contact;
  2. Identify the proposed project;
  3. Identify the applicable federal license or permit;
  4. Identify the location and nature of any potential discharge that may result from the proposed project and the location of receiving waters;
  5. Include a description of any methods and means proposed to monitor the discharge and the equipment or measures planned to treat, control, or manage the discharge;
  6. Include a list of all other federal, interstate, tribal, state, territorial, or local agency authorizations required for the proposed project, including all approvals of denials already received; and
  7. Include documentation that a pre-filing meeting request was submitted to the certifying authority at least 30 days prior to submitting the certification request.

The certification request shall also contain a statement certifying the completeness and accuracy of the information provided and a statement requesting that the certifying authority take action within the applicable reasonable period of time.   40 C.F.R. §121.5.

In Louisiana, LDEQ is the certifying authority. Current LDEQ certification application requirements do not conflict with these requirements.   LAC 33.IX.1507.F.

Certifying authority must act within “reasonable period of time,” not to exceed one year

The new rule clarifies that the permitting federal agency establishes the “reasonable period of time” within which the certifying authority must respond to the certification request.  Indeed, the federal agency is required to notify the certifying authority of the applicable reasonable period of time within 15 days of receiving the certification request from the project proponent.  The permitting federal agency, not the certifying authority, may extend the reasonable period of time but “in no case shall the responsible period of time exceed one year from receipt.”  40 C.F.R. §121.6.   While the certifying agency can request additional time beyond the initial “reasonable period of time” deadline, in no case can the reasonable period of time extend beyond the initial one-year period.  This rule is consistent with the D.C. Circuit’s recent decision in Hoopa Valley Tribe v. FERC, 913 F.3d 1099 (D.C. Cir.  2019), which indicated that states cannot delay a project’s certification by either resetting the start date for review by considering  applications to be incomplete or by requiring applications to be withdrawn and resubmitted.

Existing LDEQ regulations require applications for certification to be granted or denied within 60 days after LDEQ deems the certification application complete, unless certain enumerated conditions exist.   LAC 33.IX.1507.F.  While it is unlikely that the federal agency would shorten this time period, such is possible.  Further, the new federal rule may supersede some of LDEQ’s grounds for extension of the 60 day deadline in § 1507.F.  Further, it is not clear whether LDEQ may require amendment to its rules to address modifications to the initial certification.  The Preamble to the new EPA rule indicates that modifications will be addressed on a case-by-case basis.

Waiver of certification requirement

Within the reasonable period of time, the certifying authority may take any of the following actions within the scope of the certification:  grant, grant with conditions, or deny.   In the event the certifying authority fails or refuses to act within the reasonable period of time, the permitting federal agency shall provide written notice that a waiver of the certification requirement has occurred.  Upon written notice of waiver, the federal agency may issue the license or permit.   40 C.F.R. §121.9.

Enforcement of certification requirements

The new rule also makes clear that all certification conditions shall be incorporated into the federal license or permit and that the permitting federal agency shall be responsible for enforcing certification conditions, not the state certifying agency.  40 CFR §§ 121.10 and121.11.  Prior to the initial operation of a certified project, however, the certifying authority shall be afforded the right to inspect the facility or activity in order to determine whether the discharge will violate the certification.  If the certifying authority determines that the discharge will violate the certification, the certifying authority shall notify the project proponent and the permitting federal agency in writing and recommend remedial measures.   40 C.F.R. §121.11.

Clear mechanism in event EPA determines discharge may impact water quality in neighboring state

A permitting federal agency shall notify EPA within 5 days of receipt of a license or permit application and the related certification.  If EPA determines that a discharge may affect water quality in a neighboring jurisdiction, EPA shall notify that jurisdiction within 30 days and the permitting federal agency may not issue a license or permit until the conclusion of the specific processes set forth in 40 C.F.R. §121.12.   For example, if EPA determines that the discharge from the certified project may affect water quality in the neighboring jurisdiction, written notice is required from EPA advising the neighboring jurisdiction that it has 60 days to notify EPA and the permitting federal agency whether it has determined that the discharge will violate any of its water quality requirements, to object to the license or permit and to request a public hearing from the permitting federal agency.  If a hearing is requested, a hearing shall be held after 30 days’ notice.

Future rulemaking and anticipated impact on LDEQ certification process     

Pursuant to executive order, each federal CWA § 401 implementing agency shall initiate a rulemaking to ensure that its regulations are consistent with EPA’s final § 401 regulations. 85 Fed. Reg. 42214.  States will likely want to evaluate their own existing certification requirements as well.   While LDEQ is expected to review the new federal rule and consider any necessary adjustments to its existing certification program, LDEQ’s rules are already generally consistent with this new federal rule.  See, LAC.33.IX.1501, et seq.  LDEQ will likely need to revise its regulations to require an applicant request a pre-filing meeting with LDEQ no later than 30 days prior to submitting a certification application.  Further, LDEQ will need to incorporate provisions to meet the federal “reasonable period of time” deadlines as such may preclude some of the deadline extensions currently available to LDEQ under LAC 33:IX.1507.F. We will continue to monitor any litigation challenging the federal rule and any future proposed changes to LDEQ’s existing certification rules.

To review the New Rule and its preamble, see 2020-12081.