• Mark Ryan

EPA Issues Final 401 Regs

EPA today is releasing the final regs on 401 certification. The draft regs were released in August 2019. Here's a link to the new rule, which has not yet published in the Federal Register:

The changes to the 401 cert. regs set out in today's final rule are significant changes to the current rule: (1) EPA will now limit 401 cert. to water quality impacts, (2) 401(d) will no longer be interpreted to allow states to place other restrictions on the applicant, (3) 401 cert. will be limited to point source discharges and (4) new restrictions will be placed on how long a state my review a project.

The change in the amount of time allowed for review may be the most important. It turns largely on the § 401(a)(1) use of the term “reasonable” when describing how long states and tribes may take to grant or deny cert. Congress limited the time to “not exceed one year,” but EPA now views that 1-year limit as giving the applicable federal agency the ability to limit the review time frame to less than a year. The clock begins to tick upon submittal of the application, whether the application is complete or not. The certifying authority may not ask for the application to be withdrawn to give more time to review. Each reviewing agency may establish its own test for reasonableness based on set criteria.

This proposed rule is a significant retreat from current practice, and will limit states’ and tribes’ ability to place restrictions on projects that are subject to 401 cert. Given the broad deference SCOTUS has given to states’ rights under 401 cert., it will be interesting to see how this new rule holds up to the inevitable challenges to it that will be filed. See e.g., S.D. Warren Company v. Board of Envt’l Protection, 547 U.S. 370 (2006); PUD No. 1 of Jefferson Co. v. Washington State Dept. of Ecology, 511 U.S. 700 (1994). EPA worked hard in this rule making to distinguish PUD No. 1, but, in my opinion, failed.

This rule will almost certainly be challenged by some of the states and tribes and likely the environmental groups. Expect industry groups to join on the side of EPA.

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