EPA Proposes Limitations To States' Clean Water Act Section 401 Permitting Power

On January 15, 2026, the U.S. Environmental Protection Agency (EPA) published a proposed rule titled "Updating the Water Quality Certification Regulations" (Proposed Rule). This rule implements changes to the Clean Water Act's (CWA) Section 401 permitting process. EPA intends to narrow the scope of the States' certification authority to the application of solely water quality-related conditions which may be applied only to the discharge, not the project as a whole.

This change, among others in the Proposed Rule, will significantly reduce the ability of States or authorized Tribes to regulate projects through the CWA's Section 401 permitting process. In this post, we 1) summarize three significant changes to the current Section 401 permitting process set forth in the Proposed Rule; 2) discuss the potential impact of the Proposed Rule on the regulated community; and 3) provide information about how to submit comments on the Proposed Rule.

Summary of the Proposed Rule

Before a Federal agency can issue a license or permit that may result in a discharge to a water of the United States (WOTUS), the State or authorized Tribe where the discharge would originate must certify that it will comply with federal and state water quality standards (Section 401 certification).

In 1994, the U.S. Supreme Court deferred to EPA's position at the time and held that CWA Section 401(d) authorized States and Tribes to impose "additional conditions and limitations on the proposed activity as a whole once the threshold condition, the existence of a discharge, is satisfied." (PUD No.1 of Jefferson County v. Washington Department of Ecology, 511 U.S. 700, 712 (1994)). EPA first revised CWA Section 401 to reject this "activity as a whole" approach in 2020. In 2023, EPA reintroduced the "activity as a whole" approach. The Proposed Rule once again removes this approach and introduces additional changes beyond the 2020 version.

The current requirements for the CWA Section 401 permitting process are found in 33 U.S.C. 1341 and 40 C.F.R. 121. Significant changes in the Proposed Rule include:

• Establishing strict timing requirements for States and Tribes to consider a request for certification within one year;
• Narrowing the scope of review by States and Tribes to "discharges," not the "activity;" and
• Limiting conditions imposed by States and Tribes on certification to water quality requirements, rather than general environmental protection conditions.

Strict Requirements for Timely Consideration of 401 Permitting Requests

CWA Section 401 requires States and Tribes to issue a Section 401 certification within a "reasonable period of time," not to exceed one year, otherwise the certifying authority waives the certification for the project. EPA asserts that States and Tribes often fail to certify projects within one year. States and Tribes can currently utilize automatic extensions in the CWA for public notice procedures or force majeure events such as government closures and natural disasters. Additionally, States, including California, have denied applications without prejudice or asked applicants to withdraw and resubmit their request for certification to have more time to review the discharge and condition the certification without exceeding the one-year time limit. The Proposed Rule repeals these provisions allowing for automatic extensions and explicitly prohibits States and Tribes from asking applicants to withdraw and resubmit their request for certification.

Similarly, EPA notes that the Section 401 certification process can be delayed because States or Tribes may require additional information before considering the request complete. The Proposed Rule would establish a single list of documents for a request to be considered complete, including a copy of the Federal license or permit submitted to the Federal agency and any readily available water quality-related materials on any potential discharges into a WOTUS. The certifying authority would not be permitted to require additional information before determining that a request is "complete."

States and Tribes Limited to Review of "Discharges," Not the "Activity"

As discussed above, the 1994 U.S. Supreme Court decision in PUD No.1 held that, giving Chevron deference to agency interpretation, CWA Section 401(d) allowed States and Tribes to regulate the entire activity leading to a discharge to a WOTUS. This interpretation let States and Tribes impose additional environmental protection conditions on projects that are not directly related to water quality and potential discharges to a WOTUS.

EPA argues that following the 2024 Loper Bright decision, the agency reviewed its interpretation of CWA section 401 to determine the "best reading" of the statute. EPA states the legislative intent and best reading of the CWA indicates that States and Tribes are limited to regulating "discharges," not the project as a whole. EPA also asserts that allowing the certifying authority to regulate the activity as a whole gives States and Tribes "sweeping authority to decide the fate of nationally important infrastructure projects." 91 F.R. 2026 (January 15, 2026).

States and Tribes Required to Identify Water Quality Requirements When Issuing Conditions

After receiving a Section 401 certification request, States and Tribes may grant, grant with conditions, deny, or explicitly waive Section 401 certification for a project. The Proposed Rule would require certifications with conditions to expressly identify the water quality standard necessitating the condition. Water quality standards can include both numeric and narrative criteria that apply to discharges into WOTUS. EPA states that providing a citation to the water quality standard will help Federal agencies issuing the permits subject to certification understand how to best implement the conditions of the Section 401 certification. The Proposed Rule would also require (rather than recommend) a statement explaining denial of certifications.

Impacts

The changes introduced in the Proposed Rule would significantly reduce the ability of States and Tribes to regulate projects through the CWA's Section 401 certification process. In the past, States and Tribes used the CWA 401 certification process to impose a variety of environmental requirements, such as increased avoidance, minimization, and mitigation measures not directly related to water quality. States have also required projects to implement other changes, such as design changes, that are not directly tied to water quality standards but further other environmental protection goals like reducing greenhouse gas emissions.

The Proposed Rule would make it more difficult for States and Tribes to condition or deny certification for project discharges based on climate change and other environmental concerns. It would also provide clarity to regulated entities regarding the requirements for a Section 401 certification request and the expected timeline for a decision from the certifying authority. The Proposed Rule could streamline the application process and provide more certainty to regulated entities regarding the status of their Section 401 certification request.

Next Steps

Now that the Proposed Rule has been posted in the Federal Register (91 F.R. 1732), EPA states the public has 33 days from publication to provide comments, ending Tuesday, February 17, 2026. Comments may be made via online submission, email, mail and hand delivery. All comments should include the docket number for this rulemaking: EPA-HQ-OW-2025-2929.

EPA will also host two identical public meetings on January 28, 2026. Interested parties may register online to attend these sessions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.