By Federal Register notice with a short comment period ending February 17, EPA has proposed a major revision to a longstanding Clean Water Act program that for decades has given the states substantial regulatory oversight over the water quality impacts of activities conducted pursuant to a federal license or permit.
In 1970, amendments to the Federal Water Pollution Control Act introduced state “Water Quality Certifications” into federal environmental law. This provision, recodified as Section 401 of the 1972 Clean Water Act, grants states the opportunity to review applications for any “federal license or permit to conduct any activity” that may result in any discharge to the waters of the United States, and to certify that any such discharge will comply with, among other things, state water quality standards for those waters. Section 401 further provides that state certifications shall set forth any limitations needed to assure that applicants will comply with those standards and with “any other appropriate requirements of state law set forth in such certifications,” and that those limitations will become a condition on any federal license or permit subject to the Act.
Since 1970 these provisions have afforded states (and more recently, tribes with treatment as states) the opportunity to review and approve, deny, or condition activities affecting state water quality. In 2020 the first Trump Administration attempted to curtail these authorities by regulation. (Those rules were vacated in 2021 but then reinstated in 2022 by a shadow docket stay from the Supreme Court). In 2023 the Biden Administration restored the prior approach by regulation. Now EPA’ s newly proposed rule again seeks to narrow the scope of Section 401 certification to limit the powers of states and tribes.
Scope of State Review and Certification
Over thirty years ago, the Supreme Court construed Section 401 in PUD No. 1 of Jefferson Cty. v. Washington Dept. of Ecology, 511 U.S.C. 700 (1994). It held (7-2) that the statutory language authorizes states to impose water quality certification conditions on a federally licensed or permitted “activity” that may result in a discharge, not just on the discharge itself, including conditions based on other appropriate requirements of state law protecting water quality. Thus, it upheld Washington requiring a federally licensed dam operator to maintain instream flow to protect aquatic species, even though this condition was not itself a limitation on a point source discharge.
EPA’s newly proposed rule rejects this interpretation, however, instead adopting the views of Justice Thomas’s dissent. EPA would restrict state water quality review and conditions to the point source discharge itself. The preamble to the rule expressly states that the PUD No. 1 dissent was correct and the majority opinion incorrect; and it argues that it need not follow the Court’s construction because the Court relied on Chevron deference to uphold Washington’s condition.
But the PUD No. 1 majority opinion did not rely on Chevron (a two-step analytic doctrine deferring to federal agency interpretation in the face of an ambiguous statute, which the Court overruled in Loper Bright v. Raimondo, 603 U.S. 369 (2024)). Rather, the Court relied on ordinary statutory construction in applying Section 401: “The text refers to the compliance of the applicant, not the discharge…and section 401(d) is most reasonably read as authorizing additional conditions and limitations on the activity as a whole once the threshold condition, the existence of a discharge, is satisfied.” 511 U.S.C. 711-712 (emphasis supplied). The Court only then observed that its holding was “consistent” with EPA’s 1971 CWA regulations (which were “reasonable” and entitled to deference, citing Chevron and Arkansas v. Oklahoma).
EPA also offers additional rationales for attempting to overrule the Supreme Court by regulation. The Agency cites the “exceedingly clear statement” doctrine for the proposition that Congress could not possibly have intended the scope for Section 401 that the states have enjoyed for the last 55 years; and it also asserts under the “major questions” doctrine that Congress could not have intended to grant states this much authority because of the “economic and political significance,” without being a lot more specific. Evidently, to this EPA a construction that seven Supreme Court justices found the “most reasonable” reading of the statute in 1994 is now believed, in 2026, to be a hidden trap.
Section 401 Conditions
The states have historically used Section 401 certification review of activities to apply various conditions to protect the quality of their waters. As in PUD No. 1, appropriate water quality conditions have not been limited to effluent limitations on a point source discharge. States have also imposed construction-season restrictions meant to prevent soil erosion, landslides, and impairment of riparian habitat; protection of intermittent and seasonal streams; requirements for karst surveys and dye studies to assure that potential underground paths of pollutant discharge can be identified; maintenance of stream buffers and revegetation; compensatory mitigation under state law; and additional water quality measures. However, EPA now proposes to define “other appropriate requirement of State law” as including only state “regulatory requirements” for discharges from “point sources.”
General Permits and Nationwide Permits
One of the core functions of Section 401 review has been the ability of states to deny certification to (or condition certification of) federal Army Corps of Engineers permits that generically authorize discharges to the waters of the United States from defined sets of activities under standard conditions. As a result, selected nationwide permits (and more geographically limited general permits) are not applicable in many states. Numerous states have denied certification for specific types of general permits in order to ensure that they can exercise more detailed review of individual permits for such activities as stream crossings, aquaculture, restoration, etc.
However, the current rulemaking solicits comment on EPA’s proposal to eliminate states’ ability to conduct 401 certification review of proposed nationwide and general permits. Although EPA acknowledges that its regulations and longstanding practice included “as a categorical matter, general permits and other instances of non-applicants requesting certification,” it now suggests that because issuance of general and nationwide permits by the Corps do not involve an “applicant,” the “best reading” of Section 401 would not provide authority for state review. This would be a profound change, as more than 90 percent of Corps permitting is carried out under nationwide and general permits. EPA also seeks comment on “whether reliance interests exist for the Agency’s prior statements regarding the applicability of CWA section 401 in the absence of applicants,” and, if so, “how the Agency should weigh them against returning to the plain language of the statute.“
States and tribes are likely to be the only source of comment on this proposal that will receive substantial consideration from the Administration, particularly as they are among the few entities with clear standing to judicially challenge the removal of their review authority.