This blog post was republished by Law360 on September 14, 2021.

On August 19, EPA and the Army Corps of Engineers (Corps) issued a joint guidance document concerning implementation of EPA’s 2020 Water Quality Certification Rule. The agencies explain that the guidance applies specifically to 41 Clean Water Act Section 404 Nationwide Permits (NWPs) proposed in September 2020 that have already received certification (or for which certification was denied or waived) but have not yet been finalized, and a more detailed enclosure is intended to be applied generally to the Corps’ permit programs. The guidance also cryptically suggests that the agencies may revisit the 16 NWPs that were previously certified and finalized by the Corps in January 2021. In a press release the following day, EPA and the Corps frame the guidance as addressing “implementation challenges” raised by state and tribal certifying authorities.

One of the most significant outcomes of the 2020 Certification Rule is that it provides certainty and transparency as to when the “reasonable period of time” begins and when it ends. EPA’s 2020 Certification Rule mirrors Section 401 of the Clean Water Act and requires states and tribes to act on a certification request within a “reasonable period of time,” which “shall not exceed” one year. The Corps’ own regulations, promulgated in the 1970s, also provide a “default” reasonable period of time of 60 days for certifications required for its own permits, and allow the Corps to shorten or extend under certain circumstances. 33 C.F.R. 325.2(b)(1). The joint guidance undermines the certainty provided in these regulations in the name of providing states and authorized tribes with “maximum flexibility.”

The joint guidance asserts that the Corps can “extend” its default reasonable period of time of 60 days, even after the 60 days have passed, as long as the one-year statutory period of time has not expired. The agencies claim that, “neither the Corps’ nor EPA’s regulations limit the Corps to granting extensions only before the end of the regulatory default reasonable period of time.” Prior to this new legal interpretation and guidance, if the 60 days had passed with no extension previously granted, it meant one of two things: Either certification had been issued or denied, or certification had been waived. An “extension” following the 60-day regulatory time period is actually a do-over and provides the ability to cure a waiver that would have occurred by operation of law under the Corps’ longstanding regulations.

The joint guidance also provides that “[a]fter a certifying authority acts on a certification request, if the reasonable period of time has not yet expired, and if authorized by the federal permitting agency, the certifying authority may submit a new or revised certification decision,” and that “[a]ny new or revised certification decision submitted during the reasonable period of time would supersede the earlier certification decision.” These statements in the joint guidance are inconsistent with determinations EPA made in the 2020 Certification Rule, promulgated after notice and comment. The final preamble to the 2020 Certification Rule, 85 Fed. Reg. 42210, 42262 (July 13, 2020), states:

As described above, the reasonable period of time begins when a certifying authority receives a certification request as defined in the final rule, and it ends when the certifying authority takes action to grant, grant with conditions, deny, or waive. The Agency is clarifying that the reasonable period of time does not continue to run after a certification decision is issued regardless of whether there is time remaining in the “reasonable period of time.” As explained in section III.L of this notice, a certifying authority cannot modify the certification after issuing a decision to the federal agency.

Modifying regulatory timeframes, adjusting procedures, and reinterpreting legal positions developed during formal notice and comment rulemaking require compliance with the Administrative Procedure Act so that members of the regulated community have an opportunity to review and comment on the modifications and develop an administrative record that will aid a reviewing court in testing the legality of the government action. The new interpretations set forth in the joint guidance were not subjected to these important procedural safeguards.

The joint guidance also encourages Corps field staff to work with certifying authorities to remedy certifications that do not meet the procedural requirements of the 2020 Certification Rule. The guidance acknowledges that the 2020 Certification Rule does not provide an opportunity to cure deficient certifications, but nonetheless encourages Corps field staff to “communicate with the certifying authority in writing” about procedural deficiencies and “provide a timeframe for the certifying authority to clarify the deficiency as appropriate (and within the one-year statutory maximum reasonable period of time).” The agencies correctly note that the 2020 Certification Rule provides flexibility for federal agencies to develop procedures to cure deficiencies, but the rule preamble specifically states that such procedures should be incorporated into federal regulations, which would allow for transparency through notice and comment and consistent application of the process. The joint guidance encourages Corps field staff to make arrangements on a one-off basis for states and tribes to cure deficient certifications and conditions with no transparency or certainty of process.

Lastly, the joint guidance recommends that the Corps use its permit modification procedures “to address concerns raised by certifying authorities regarding the need to update certification conditions incorporated into a Corps permit.” The guidance seems to suggest that certifying authorities (states, authorized tribes, and EPA) could request or initiate a modification of a Corps permit, based on concerns that its certification conditions are outdated or in need of modification. This would be procedurally unusual, as in most cases the permittee or the permitting agency request or initiate a permit modification. However, it may signal an approach the agencies could use to re-open the 16 NWPs that were previously certified and finalized by the Corps nearly a year ago. Individuals and companies seeking coverage or currently covered under one of those NWPs should consider following these developments closely.

If the joint guidance is a preview of where EPA is headed in its rewrite of the 2020 Certification Rule, the regulated community should expect a return to the ill-defined reasonable period of time that has been the subject of so much litigation, as well as an enormous amount of “flexibility” provided to certifying authorities at the expense of transparency and regulatory certainty. At a time when so much emphasis is focused on transforming our energy economy and investing billions of dollars in major and minor infrastructure projects across the country, it will be interesting to watch how these, and future Clean Water Act Section 401 and other permitting reforms, align with infrastructure construction timelines.