Biden-Harris EPA Announces Clean Water Act Rule to Re-Empower States and Tribes

The Clean Water Act (CWA) pendulum swings back. On June 1, the US Environmental Protection Agency (EPA) signed a proposed rule that gives more authority to states and tribes to weigh in on and potentially block federally licensed or permitted projects, such as energy infrastructure projects.

Consistent with the CWA’s cooperative federalism framework, CWA section 401 establishes a process for states and tribes to determine whether the project being authorized by a federal agency will violate the state’s (or tribe’s) water quality standards. States and authorized tribes must issue, or waive, a section 401 water quality certification before a federal agency can issue a permit or license for activities that may result in any discharge into waters of the United States (WOTUS).

In 2020, the Trump Administration EPA finalized a new section 401 rule that limited the certification authorities of states and tribes for the purpose of accelerating federally-licensed infrastructure projects (2020 Rule). The rule was a major overhaul to the section 401 regulations, which had not been amended since they were first promulgated in 1971. Among the notable limits that the 2020 Rule places on certifying states and tribes are: 1) imposing strict timelines for completing certifications, 2) prohibiting the certifying authority from imposing conditions related to nonpoint source discharges and discharges into nonfederal waters (e.g., state and tribal waters), and 3) limiting the basis of decisions to specific discharges rather than water quality effects of the “activity as a whole.” Critics have argued that this final limitation is contrary to the Supreme Court’s decision in Public Utility District No. 1 of Jefferson County v. Washington Department of Ecology, which they contend allows states to impose conditions on activities “as a whole” as long as those activities included discharges that triggered CWA section 401.

Early in the Biden-Harris Administration, EPA announced that it would revise the 2020 Rule over concerns that the regulations reduced the ability for states and tribes to protect their water resources and violated cooperative federalism principles. The proposed rule restores many of the authorities that states and tribes had under the pre-2020 regulations, including allowing certification authorities to evaluate the effects of a project as a whole rather than specific discharges. It retains some of the process improvements established in the 2020 Rule, including, for example, requiring that project proponents participate in a pre-filing meeting with certifying authorities. It also proposes some new measures intended to make the section 401 certification process more transparent and efficient, including:

• Requiring that requests for certification include a copy of a draft license or permit and all existing data on water quality impacts.
• Providing certifying authorities the ability to collaborate with federal agencies to determine a “reasonable period of time” to review a request for certification. (The review period defaults to 60 days and is limited to one year.)
• Clarifying how neighboring jurisdictions may participate in the federal licensing and permitting process when EPA determines that a proposed project in another jurisdiction may affect their water quality.

Not only will the new regulations, if finalized, align the section 401 regulations with the Biden-Harris Administration’s policy preferences, but they will likely make the ongoing legal battles over the Trump Administration’s regulations moot. The 2020 Rule, for example, was immediately challenged in court, and the US District Court for the Northern District of California found the regulation violated Supreme Court precedent. Even though the EPA had filed a motion for remand without vacatur, the court vacated the 2020 Rule, which had the effect of reinstating the prior regulations.

Hoping to keep the 2020 Rule in place, an assortment of states and industry groups moved for a stay of the district court’s order vacating it. That motion was subsequently denied by US District Court for the Northern District of California in December 2021, and the denial was affirmed by the US Court of Appeals for the Ninth Circuit in February 2022. The Ninth Circuit rejected the motion because the appellants failed to “demonstrate a sufficient likelihood of irreparable harm” to warrant keeping the 2020 Rule in place pending appeal. In April 2022, however, the Supreme Court granted the stay, which had the effect of reinstating the 2020 Rule until the Biden-Harris Administration finalizes a new rule.

The EPA will likely issue its final rule in 2023. In the meantime, we will continue to monitor developments. 

© Arnold & Porter Kaye Scholer LLP 2022 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.