NY 401 Comments.pdf -

Please enable JavaScript to view the full PDF

OFFICE OF THE COMMISSIONER New York State Department of Environmental Conservation 625 Broadway, 14th Floor, Albany, New York 12233-1010 IP: (518) 402-8545 I F: (518) 402-8541 www.dec,ny.gov OCT 2.1 2019 Via requlations.gov Andrew Wheeler, Administrator U.S. Environmental Protection Agency William Jefferson Clinton Building 1200 Pennsylvania Avenue, N.W. Washington, D.C. 20460 Re: Docket ID No. EPA—HQ—OW-2019-0405 — New York State Comments on Proposed Regulation - "Updating Regulations on Water Quality Certification," 84 Fed. Reg. 44,080 Dear Administrator Wheeler: On behalf of New York State, I submit the enclosed comments on the proposed U.S. Environmental Protection Agency (EPA) regulation entitled "Updating Regulations on Water Quality Certification," 84 Fed. Reg. 44,080 (Proposal). New York strongly opposes this unlawful attempt to limit the authority of New York and other states to protect their own water quality resources under Section 401 of the Clean Water Act (Section 401).1 While EPA presents the Proposal under the guise of "clarifying" and "updating" the regulations implernenting Section 401, the Administration has explicitly acknowledged that the Proposal is largely in response to a few recent, and completely appropriate, actions by the New York State Department of Environmental Conservation (NYSDEC). Compounding this sad attempt to block the implementation of Section 401 by all states simply because the Administration doesn't like NYSDEC's decisions, in this proposal the Administration attempts to fabricate a problem that does not exist as a means of justifying this unlawful effort. Let me be clear — provided that a project will comply with applicable water quality standards, NYSDEC will issue the required Water Quality Certification (WQC) under Section 401. In fact, NYSDEC timely and efficiently issues thousands of WQCs each year. Coupled with the actions of other certifying authorities, NYSDEC's actions demonstrate that, despite what the Administration and EPA suggest, there is no national epidemic of delay and denial in the implementation of Section 401. There is simply no I 33 U.s.c. § 1341. i-74 EW YORK Department of STATC Or r OPPCIR I UN.] Environmental Conservation need for the wholesale change in the Section 401 certification process that the Proposal would engender. I assert that the Proposal is the result of warped political considerations and the desire to force through fossil fuel projects that would not comply with applicable water quality standards. It is apparently not the result of serious administrative agency deliberations. This politically driven attack is an abuse of EPA's regulatory process, a severe infringement on states rights, and in direct conflict with the Administration's purported support for the system of cooperative federalism epitomized by Section 401. Regardless of the reasons behind the Proposal, EPA seeks to overturn its own longstanding legal interpretations, as well as those of the U.S. Supreme Court. The preamble for the Proposal is filled with creative attempts to reinterpret decades of successful implementation of Section 401 by EPA itself, other agencies, and the courts. While EPA deserves credit for its creativity, these efforts will ultimately fail. States, and not the federal government, have the knowledge and expertise to assess their own water quality resources. This was the bedrock principle recognized by Congress when it first enacted the Clean Water Act and Section 401 almost 50 years ago. The Proposal would severely restrict the important role for the states in innumerable ways, transferring critical authority from states and other certifying authorities to the federal government, in clear violation of the law. The Proposal would so fundamentally change the existing cooperative federalism structure of Section 401 as to render the Section 401 process virtually meaningless. In fact, the Proposal has multiple flaws. First, EPA's outreach process was woefully insufficient, leading to an extremely problematic Proposal. Second, EPA has ignored or twisted the facts in an attempt to fit its Proposal into the Administration's false narrative about Section 401. Third, EPA would unlawfully limit a certifying authority's scope of review under Section 401, severely limiting both the extent of activities covered by Section 401 and the type of conditions a state can impose. Fourth, the Proposal would fundamentally alter the timing and process for review by certifying authorities under Section 401. Fifth, the Proposal would substitute the judgment of federal agencies for that of the states. EPA would accomplish this by providing federal agencies with the ability to line-item veto specific conditions in a state-issued WQC, to find waiver even when a state acts within the relevant time period, and to have the sole ability to enforce state-issued conditions. Finally, the Proposal would effectively require states like New York to violate their own statutes and regulations, or to change their own administrative processes, going far beyond EPA's authority to implement Section 401. As New York previously noted in testimony provided at the only public hearing EPA held on the Proposal, EPA's plan to roll back and undermine protections afforded by the Clean Water Act puts polluters and the fossil fuel industry ahead of the health and future of our planet. The Proposal is a clear attempt by the Administration to obstruct states' vested authority under the Clean Water Act to protect their respective water resources. It ignores the vital role and sovereign right of states to protect and maintain water quality. While the Administration and EPA may welcome the opportunity to take away states ability to protect their citizens by dismantling environmental protections and laws, New York State will continue to take action to preserve its authority under the law and protect its environment and citizens. Specific New York State comments are enclosed. l intend, however, to use all available means to prevent the Proposal — which would strip states' ability to protect their citizens by undoing fundamental environmental protections — from ever going into effect. Sincerely, Basil Seggos Commissioner Enclosure cc: Senator Chuck Schumer Senator Kirsten Gillibrand New York State House Delegation New York State Comments on Proposed Regulation - "Updating Regulations on Water Quality Certification," 84 Fed. Reg. 44,080 l. EPA's Public Outreach and Regulatory Process was Woefully Insufficient EPA initiated this rulemaking process, which would fundamentally alter the implementation of Section 401, in response to the directive provided in Executive Order 13868, Promoting Energy Infrastructure and Economic Growth, April 15, 2019 (Executive Order). In other words, from the outset, EPA's actions were driven solely by political considerations and its desire to undertake the rulemaking process as expeditiously as possible to meet the President's unlawful directions as stated in the Executive Order. Thus, the Proposal was clearly not the result of ordinary administrative deliberation on the part of EPA. Perhaps as a result, EPA's process has been riddled with insufficient consultation with states and other certifying authorities, leading to many of the problems in the Proposal itself. For example, EPA did not provide states and other certifying authorities with meaningful consultation opportunities prior to moving forward with the proposal. The limited input that EPA did solicit from certifying authorities was seemingly ignored. In fact, the Proposal includes numerous elements that are contrary to the specific suggestions and notes of caution provided by New York and other states during the limited pre-proposal consultation process. Furthermore, despite the fact that the Proposal represents a complete change in the Section 401 process after 50 years of relatively consistent implementation, in its rush to comply with the President's unreasonable Executive Order, EPA is short-circuiting the rulemaking process. Perhaps recognizing that the reaction to the Proposal will be one of near universal condemnation from certifying authorities of all political persuasions, EPA seems to be intentionally limiting the ability of states to provide meaningful input. Moreover, while the Proposal impacts each and every state and other certifying authority, EPA only held a single public hearing on the Proposal. EPA should have held multiple hearings at several locations around the country. Compounding the problem, while the Administration explicitly focuses on the actions of states like New York, the single hearing was held in Salt Lake City, Utah. This was an apparent attempt to minimize input from the states most directly implicated in the Proposal. And it was a blatant attempt to circumvent meaningful public participation by states and citizens alike. EPA's flawed public engagement process calls into question the legitimacy of this entire rulemaking and underscores EPA's complete disregard for states interests in protecting their citizens and the environment. Despite the flawed public outreach and consultation process, EPA does capture some universal "themes" that emerged. For example, on at least one occasion, the preamble of the Proposal recognizes the support for ongoing state and tribal engagement, the support for the retention of state authority, and various suggestions for improvements in the Section 401 WQC process. Yet the text of the proposed rule itself, as well as other components of the regulatory preamble, prove that EPA dismisses these universal themes in the same breath that it recognizes them. Indeed, rather than just failing to take these issues into account, the Proposal is directly at odds with key principles that virtually all states and certifying authorities share. Overall, the Proposal deviates drastically from longstanding statutory and judicial interpretations of Section 401. It acknowledges that it would overturn or ignore multiple established judicial precedents, including those of the U.S. Supreme Court. It turns decades of practice on its head. The Proposal asks for comments on approximately 100 specific items, many of which would require complex legal analyses and consideration of state-specific statutory and regulatory provisions to properly assess and respond to. And despite all this, EPA only provides for a 60-day public comment period, which is woefully inadequate under the circumstances. EPA's flawed public outreach process, particularly as it relates to the consultation process with states and other certifying authorities, further compounds the innumerable substantive problems with the Proposal. Should EPA decide to extend the comment period, please be advised that New York reserves the right to submit additional comments, as appropriate. 11. The Proposal ignores the Facts About NYSDEC's Implementation of Section 401 and Lacks any Rational Basis a. EPA and the Administration have Attempted to Create a False Narrative of State Obstruction and Delay under Section 401 Administrator Wheeler is wrong to suggest revisions to the Section 401 regulations are necessary because states are not implementing Section 401 consistently or faithfully. In fact, Administrator Wheeler has explicitly said that the Proposal is designed to undermine New York's alleged attempts to "blockade" natural gas infrastructure projects.2 Similarly, in the so-called "Economic Analysis" that accompanies the Proposal, EPA cites to only four specific projects as the primary reason for the Proposal, three of which are examples of projects for which NYSDEC has denied a WQC.3 First, EPA mischaracterizes the three New York State projects it cites. In each of the three cases, NYSDEC denied a WQC for the project at issue because it was unable to determine that the project would comply with applicable water quality standards. The Constitution Pipeline, for which NYSDEC did not have sufficient site-specific information to make a decision, seems to be the most-frequently cited example in support of the Administration's argument that state agencies are running amok in their implementation of Section 401. But NYSDEC's denial of a WQC in that case was upheld on the merits by the Second Circuit Court of Appeals,4 notwithstanding the recent attempts of the Federal Energy Regulatory Commission (FERC) to resurrect the project. In fact, with all 2 Andrew Wheeler, Here's how Team Trump will bust Cuomo's gas blockade, N.Y. Post, Aug. 15, 2019. 3 EPA, Economic Analysis for the Proposed Clean Water Act Section 401 Rulemaking, at 11-12 (Aug. 2019); 84 Fed. Reg. at 44,110. 4 Constitution Pipeline Co., LLC v. NYSDEC, 868 F.3d 87 (2d Cir. 2017). three examples that EPA highlights, the Agency ignores that NYSDEC's actions were subject to judicial review. To the extent EPA or the Administration believes that NYSDEC took any actions outside the scope of its review under Section 401, this can and has already been addressed by the courts. In other words, there is no danger of states abusing their power or arbitrarily denying applications for Section 401 certifications, because those decisions are subject to judicial review. If anything, as is explained more fully below, it is EPA's Proposal that would result in delays, confusion, and uncertainty, including through increased litigation. Regardless, by cherry-picking three examples, EPA attempts to paint a picture that fits in with the Administration's false narrative about Section 401 In fact, over the last five years, NYSDEC has received an annual average of over 4,000 WQCs under Section 401. By comparison, over the same period, NYSDEC has denied an annual average of only eight requests for certification under Section 401. Moreover, NYSDEC averaged only 43 days between a complete application and a final decision. These actions are associated with all types of projects, and not just the natural gas pipelines that seem to be EPA's only concern. In other words, EPA's Proposal is simply a solution in search of a problem. This is unsurprising given that it is merely a political attack against New York and other states, under the guise of administrative rulemaking. b. EPA Lacks a Rational Basis for its Proposal Given the false premise from which it begins, it is no surprise that EPA has failed to provide any rational basis to necessitate or even support the Proposal. First, EPA provides no meaningful explanation of the need for any changes to its regulations implementing Section 401, never mind the wholesale change in approach that the Proposal entails. Instead, the Proposal is merely the result of the Executive Order, which itself was explicitly intended to promote the development of energy infrastructure. The Executive Order suggests that there is "confusion and uncertainty" in the existing Section 401 process, which is "hindering the development of energy infrastructure." But the Executive Order says nothing about protecting water quality and preventing water pollution, the very Congressional purposes at the heart of the Clean Water Act in general and Section 401 in particular. While the Administration clearly favors energy infrastructure development at the expense of water quality and environmental protection, such an ill-conceived policy does not justify EPA's actions. Even if this were a legitimate policy objective, it would not support the Proposal's clear contradiction and undermining of the plain language and Congressional intent of Section 401, which is to preserve state authority over water quality issues. To make matters worse, the Proposal itself does not include any discussion or analysis of the water quality impacts that will result if it is finalized. Nor does it consider whether the Proposal would ensure that the Clean Water Act's fundamental purpose of protecting water quality will continue to be met. Similarly, even if increasing predictability and timeliness in the Section 401 review process was the actual objective of EPA's action — as opposed to the clear political attack against New York and other states — the Proposal does not include any meaningful analysis of the existing process. The only attempt to demonstrate the need for increased predictability and timeliness is the accompanying Economic Analysis, which as described above is merely a case study of four projects (three of which were actions taken by NYSDEC) chosen precisely because they are considered out-of-the- ordinary. EPA makes no attempt to demonstrate that the existing Section 401 regulations are inadequate for purposes of ensuring predictability and timeliness. Similarly, EPA makes no attempt to explain how the Proposal will actually provide increased predictability and timeliness in comparison to the current process. While EPA merely references a few examples of recent denials that have resulted in litigation, as described more fully below, it is the Proposal itself that will cause increased confusion, unpredictability, and delay, including through increased litigation. EPA does, at least, acknowledge that the Proposal would likely lead to protracted litigation impacting both certifying authorities and federal agencies. The fact that the Proposal would replace EPA's longstanding Section 401 regulations further demonstrates the lack of a rational basis for EPA's actions. Such a major change in longstanding practice and interpretation of Section 401 by EPA, other federal agencies, and certifying authorities should require additional explanation and analysis. Instead, EPA provides no meaningful reason that such a drastic change is required now, especially given that there has been no recent change to the underlying statutory language being implemented through the regulations. The Proposal constitutes a total reversal of EPA's position on a number of issues regarding the implementation of Section 401; each such change lacks a rational basis. Furthermore, while EPA provides lip service to the idea of cooperative federalism throughout the Proposal, the Agency does not analyze the effect the Proposal will have on state interests. The existing Section 401 regulations have provided the framework for decades, yet EPA does not consider how such a drastic change might impact states and other certifying authorities. The fact that EPA has ignored this issue altogether not only encapsulates the Administration's lack of respect for the cooperative federalism structure it purports to support; it also demonstrates how EPA fails to provide a reasonable explanation for all aspects of the Proposal. Overall, EPA's Proposal is just one component of the Administration's efforts to significantly constrain states authority under Section 401. It is consistent with other recent actions by the Administration that appear to have the same objective. While it may comply with the President's ill-conceived Executive Order, it does not comply with relevant provisions of law. Because the only reasons for the Proposal are to fit within the false narrative described above, to attack states like New York that are properly implementing Section 401 to protect their own water quality, and to comply with the Executive Order, it also lacks any rational basis. III. The Proposal Severely Limits the Scope of Section 401 Review a. EPA Seeks to Unlawfully Limit the Scope of a State's Review to the Discharge Rather than the Activity as a Whole From the outset, EPA seeks to drastically limit the scope of Section 401. This begins with EPA's attempt to change when a Section 401 WQC is required in the first place. This is through the Proposal's definition of "discharge," which is limited to "a discharge from a point source into navigable waters."5 By artificially limiting the definition of "discharge" in this way, the Proposal may take certain projects outside the scope of state Section 401 review altogether. This would fundamentally undermine Section 401's Congressional preservation of states pre-existing authority to protect water quality resources within their own borders. The Proposal would further limit the extent of a state's review under Section 401 by limiting the scope of certification to "assuring that a discharge from a Federally licensed or permitted activity will comply with water quality requirements."5 This express limitation in the Proposal is directly at odds with both the statutory language in the Clean Water Act itself as well as the U.S. Supreme Court's decision in PUD No. 1 of Jefferson County v. Washington Dept. of Ecology, 511 U.S. 700 (1994) (PUD No. 1). It is also directly at odds with the cooperative federalism structure of Section 401 and its purpose of ensuring that states and other certifying authorities maintain the ability to protect their own water quality resources. First, the Clean Water Act itself declares that "[i]t is the policy of the Congress to recognize, preserve, and protect the primary responsibilities and rights of States to prevent, reduce, and eliminate pollution . . ."7 Congress' intent to preserve existing state authority is also found in Section 401. While Section 401(a)(1) refers to the requirement that a state certify that "the discharge will comply" with applicable requirements, Section 401(d) expands on this requirement by requiring that "any applicanr must comply with "any other appropriate requirement of State law:5 In other words, the language of the statute itself is not limited to the "discharge," as EPA seeks to accomplish through the Proposal. Second, that Congress intended this broader language to have broader effect was confirmed by the Supreme Court in PUD No. 1. The Court in PUD No. 1 held that the long-established and unchanged language in Section 401 authorizes states to consider the activity as a whole, once it is clear that the activity will result in a discharge to waters within the state. The Supreme Court held that "activities — not merely discharges — must comply with state water quality standards."9 As the Court further concluded, the broader language of Section 401(d) "is most reasonably read as authorizing additional 5 Proposal . 40 C.F.R. § 121.1(g) (ernphasis added). 6 Proposal, 40 C.F.R. § 121.3 (emphasis added). 7 33 U.S.C. § 1251(b). 8 33 U.S.C. § 1341. 9 PUD No. 1 at 701. conditions and limitations on the activity as a whole once the threshold conditions, the existence of a discharge, is satisfied."1° Despite the clarity of both the statutory language and the decision in PUD No. 1, EPA apparently believes it knows better than both Congress and the U.S. Supreme Court. To its credit, EPA at least acknowledges this drastic departure from existing law in the Proposal's preamble. Compounding its conceit, EPA suggests in the Proposal that the Supreme Court's 1994 interpretation of the statutory language was based on EPA's previous interpretation, rather than the plain language of the statute itself. There is no basis for the Proposal's attempt to overturn both Congress and the Supreme Court through EPA's own changed interpretation. The effect of EPA's attempt to significantly narrow the scope of a certifying authority's review under Section 401 would be profound. It would prohibit states from considering the overall activity that creates the discharge and that is subject to federal permitting review. This would, in turn, prohibit states from ensuring that activities will not impair water quality, as Section 401 requires. As an illustration of the effect of EPA's new interpretation of Section 401, one can look to the hydroelectric operator that unsuccessfully argued its dams did not "discharge" into waters in S.D. Warren Co. v. Maine Board of Environmental Protection, 547 U.S. 370 (2006) (S.D. Warren). In S.D. Warren, the Supreme Court once again rejected the narrow interpretation of Section 401 that EPA now attempts to adopt. Unfortunately, if adopted, the Proposal may offer new hope for project proponents that seek to altogether avoid state oversight under Section 401. The Section 401 process is currently used, by both certifying authorities and federal agencies, for regulating activities that exceed the Proposal's artificially narrow scope of review. For example, federal entities such as the U.S. Army Corps of Engineers and the U.S. Coast Guard undertaking any construction, fill, or maintenance activities in navigable waters are also required to obtain a Section 401 certification. Examples of these activities include construction of water dependent structures such as docks, piers, and wharves, shoreline stabilization such as jetties, groins, and revetments, and erosion control activities such as beach nourishment. Some of these activities may not have a "point source discharge," as the Proposal would require to trigger Section 401 review. Yet these projects are currently regulated, as a whole, through the WQC process under Section 401 By requiring certifying authorities to consider only the point source discharge, and not the overall activity, EPA significantly undermines states ability to protect their own water resources. If adopted, this aspect of the Proposal will prohibit states from considering the overall water quality impacts from a proposed project, with particular harms on wetlands and smaller waterbodies. EPA must change the scope of certification under the Proposal to be consistent with both the clear language of the Clean Water Act and the Supreme Court's decision in PUD No. 1. I° Id. At 711. b. EPA Seeks to Preclude States from Imposing Appropriate Conditions as Part of a State-Issued WQC EPA exacerbates the Proposal's new and unlawful limitations on the scope of a state's review under Section 401 by further limiting a state's ability to impose conditions as part of a state-issued WQC. The ability of a certifying authority to include appropriate conditions in a WQC is fundamental, as it provides states with the ability to include requirements to ensure that the proposed project will indeed comply with applicable water quality standards. But the Proposal would only allow conditions in a WQC that are necessary to assure compliance with "water quality requirements."11 Moreover, "water quality requirements" only include federal standards or EPA-approved state standards, meaning that other appropriate requirements of state law would be excluded.12 This is another attempt by EPA to rewrite the statutory text of the Clean Water Act and to ignore or overturn U.S. Supreme Court precedent. This aspect of the Proposal would effectively delete the phrase "other appropriate requirement of State law" out of the law. But the statutory language is clear that the scope of state authority to ensure compliance with "any other appropriate requirement of State law" is expansive. For example, Section 510 of the Clean Water Act explicitly states that "nothing in [the Clean Water Act] shall preclude or deny the right of any State . . . to adopt or enforce (A) any standard or limitation respecting discharges of pollutants or (B)any requirement respecting control or abatement of pollution."13 Similarly, this aspect of the Proposal is also directly at odds with the Supreme Court's decision in PUD No. 1, which held that Section 401 "allows the State to impose 'other limitations on the project in general to assure compliance with various provisions of the Clean Water Act and with 'any other appropriate requirement of State law. 14 The Proposal's attempt to nullify such a critical component of Section 401 would have disastrous consequences on both state authority and water quality. EPA-issued or - approved water quality requirements are only some of the applicable statutes and regulations that protect water quality. Many other requirements are part of "other appropriate requirements of State law," which are water quality-related and which must be considered by a state when issuing a WQC pursuant to Section 401. This includes requirements such as those regarding freshwater and tidal wetlands, sediment and stormwater control, and threatened and endangered species. Water quality protection means a lot more than simply controlling what comes out of a pipe, despite what EPA suggests through the Proposal. By effectively writing out "other appropriate requirements of State law," EPA will preclude the use of the WQC process to protect water quality-related impacts such as endangered species construction windows, the ability to regulate hard structures and living shorelines, and setback requirements for construction equipment or refueling vehicles. 11 Proposal 40 C.F.R. §§ 121.1(f) and 121.3. 12 Proposal 40 C.F.R. § 121.1(p). 13 33 U.S.C. § 1370. 14 PUD No. 1, 511 U.S. at 711. The definition of "water quality requirements" must be modified to include any appropriate requirement of State law related to water quality. Without this modification, the Proposal would unlawfully preclude the ability of New York and other states to include necessary conditions in an issued WQC. Without this ability, states will be forced to deny additional requests for a WQC, or may be subject to additional litigation by opponents of a project, as explained more fully below. Finally, to implement these new limitations on state authority, the Proposal would impose new requirements on states. In particular, the Proposal would require that each condition in an issued WQC contain an explanation as to why it is necessary, along with the specific provision of law that authorizes it.15 And the Proposal would give federal agencies the ability to reject any condition in a WQC, if the federal agency deems the condition is either beyond the scope or is not supported by the necessary information. In addition to imposing new and unlawful administrative burdens and implementation challenges, this would give federal agencies newfound ability to unilaterally veto specific conditions contained in a state-issued WQC. W. The Proposal would Fundamentally Alter the Timing and Process for State Review under Section 401 a. EPA Improperly Provides for a Shorter Waiver Period and a mere "Postcard" Request for Certification In addition to unlawfully and significantly limiting the scope of a state's WQC review, including the type of conditions that a state can impose, the Proposal would impose new procedural requirements on the Section 401 process. Taken together, these new procedures would increase the likelihood that a state or other certifying authority will inadvertently waive its authority over a project. This is likely the precise intent of EPA in crafting such arduous procedures beyond those set forth in the law. First, the Proposal would limit the amount of time a state has to review a WQC application. The Proposal would provide each federal agency with the ability to establish and modify the "reasonable period of time" within which a state must act on a WQC request to avoid waiver. This would impose additional requirements beyond Section 401 itself, which only includes the requirement that a state's review period cannot exceed one year. Second, the Proposal would define what constitutes a "certification request," thereby triggering the start of the review period. Under the Proposal, any written request with even limited information is sufficient to start the one-year (or less) review period. According to the Proposal, this is in direct response to attempts by states such as New York to require a complete application prior to commencing review. 15 Proposal. 40 C.F.R. § 121.5(d). But the Proposal itemizes only seven basic components which are necessary to constitute a "certification request,"18 even though different federal agencies have different standards to determine completeness. A project applicant could satisfy these requirements on a small postcard. But such a postcard would likely not provide states with sufficient information to properly review water quality impacts, or to ensure compliance with all applicable water quality standards and other requirements, as is required by Section 401. This is especially true in the context of certain permit or license types, as more complex projects typically require additional information from the applicant. As a result, any final rule must also incorporate the potential for states to include additional applicable application requirements. This must ensure that the state receives, for example, erosion and sediment control plans or additional information that may be required to commence review. Otherwise, the Proposal would require states to act on certification requests in as little as 60 days, even in cases when the request is in the form of a mere postcard. This will simply cause states to quickly deny certification requests, based on the inability to determine compliance with water quality standards, in order to avoid inadvertently waiving its authority over a project. After all, if the certifying authority does not receive the information necessary for proper review of the request, it can simply deny the request for lack of sufficient information. This would seem to be the exact opposite result that EPA claims to be seeking through the Proposal. b. EPA Wrongly Seeks to Prohibit the "Withdrawal and Resubmittal" Process In addition to limiting the amount of time a state has to review a WQC request and minimizing the amount of information necessary to commence review, the Proposal would also prohibit longstanding administrative practices that have enabled projects to ultimately receive a WQC from the certifying authorities. In particular, in line with a recent decision by the D.C. Circuit Court of Appeals,17 the Proposal would explicitly prohibit a state agency from requesting an applicant to withdraw a WQC application. EPA seeks to apply the decision of one Court of Appeals, based on the unique factual circumstances in that case, to every project subject to review under Section 401 nationwide. This is despite the fact that the Court itself expressly recognized the limitations of its own decision, including that it "decline[d] to resolve the legitimacy" of a case where an applicant "withdrew its request and submitted a wholly new one in its place,"18 that it did not "determine how different a request must be to constitute a 'new request such that it restarts" the one-year review period,19 and that its decision addressed "the specific factual scenario presented" in the case.29 Moreover, regardless of the Hoopa Valley court's limited decision, as EPA recognizes in the preamble to the 16 Proposal, 40 C.F.R. § 121.1(c). 17 Hoopa Valley Tribe v. Federal Energy Regulatory Cotnmission, 913 F.3d 1099 (D.C. Cir. 2019) (Hoopa Valley); Petition for Certiorari Pending, U.S. Suprerne Court Docket No. 19-257 (Aug. 26. 2019). 18 Hoopa Valley, 913 F.3d at 1104. 19 1d 20 Id At 1105. Proposal, other courts have recognized the validity of using "withdrawal and resubmittal" to restart the reasonable period of time under Section 401.21 In any case, expanding Hoopa Valley's limited holding nationwide to every WQC situation will result in far-reaching consequences in a variety of fields. It may be that these consequences are unintended as EPA has not fully considered the implications of this new rule. Or it may be that EPA is intentionally seeking to make it more difficult for states to make informed WQC decisions under Section 401. Regardless of the intent, the impacts on all certifying authorities are the same and will be significant. First, the proposed regulatory language is unclear. According to the Proposal, a "certifying authority is not authorized to request the project proponent to withdraw a certification request or to take any other action for the purpose of modifying or restarting the established reasonable period of time."22 This provision is ambiguous, perhaps intentionally so. For example, it makes no attempt to definite what "other action" could be caught up in this blanket prohibition. It also suggests that whether or not the prohibition applies depends on the certifying authority's purpose for taking the action at issue. But this would suggest that EPA or another relevant federal agency will have to be in the position of determining a state's intent. EPA and other federal agencies are generally not well-suited to making such determinations. Second, there are numerous reasons, beyond merely extending the review period for the certifying authority, that an applicant might voluntarily and unilaterally choose to withdraw its Section 401 request. Such a withdrawal could be due to the applicant's own business or other considerations. And a withdrawal could occur even absent any discussion or interaction — formal or otherwise — with the certifying authority. In other words, a withdrawal and resubmittal may occur without any foreknowledge on the part of NYSDEC or other certifying authority. Yet under the Proposal, in such a situation, NYSDEC would have to hope that the federal agency does not wrongfully determine that the withdrawal was due to a request by the State. If the federal agency does make such a determination, the consequences under the Proposal would be a finding of waiver. This would create numerous opportunities for uncooperative applicants to game the system in an attempt to elicit a finding of waiver. It would also give federal agencies newfound authority to find waiver based on the purposes behind a certifying authority's supposed actions to extend the period of time for review. Third, particularly when taken together with other elements of the Proposal, this new rule will lead to an onslaught of denials. When more time is necessary for a certifying authority to make a decision on a Section 401 certification request, it will have no other viable procedural options aside from outright denial of the request. This will only serve to further decrease the definiteness and certainty that EPA claims is one of the 21E.g., NYSDEC v. FERC, 884 F.3d 450 (2d Cir. 2018). The Second Circuit has also referenced the parties use of the withdrawal-and-resubmittal process in Constitution Pipeline (868 F.3d at 94) and Islander E. Pipeline Co. v. Conn Dep't of Envt l Conservation (482 F.3d 79, 87 (2d Cir. 2006)). 22 Proposal, 40 C.F.R. § 121.4(0. objectives of its Proposal, including by increasing the frequency of litigation. Furthermore, many of these denials will be premature, to the extent they are likely to be based on insufficient information or the status of the federal agency's administrative or environmental review. Depending on when in the federal agency review process an applicant chooses to make its Section 401 request to the state, environmental review may be ongoing, which could in turn lead to changes in the project at issue. Such project changes could cause resulting changes in the nature and extent of the project's water quality and other environmental impacts. Thus, this new rule is likely to create additional and premature denials, as well as the potential need for subsequent Section 401 requests to address project changes that result in altered water quality impacts. Finally, in many cases, a certifying authority will have no choice but to deny a certification request, even when a request is not actually pending before it. An applicant may decide to withdraw a request with no intention of ever submitting another application for the project, such as when it decides to abandon the project entirely. Or an applicant may plan to submit a subsequent application related to the project several months or years hence, as it makes changes to the project, acquires additional financing, or awaits appropriate market conditions. Yet, the Proposal makes no attempt to answer the question of how different a subsequent request must be to constitute a new request that restarts the one-year review period under Section 401. EPA sets forth no limitation on the intervening amount of time between a withdrawal and a subsequent submittal of a new request. Thus, to avoid inadvertently waiving its authority over a project that may be resurrected at some point in the future, an agency like NYSDEC would have no choice but to deny even withdrawn applications. Otherwise, a state would have to fear a federal agency determination that the applicant withdrew the application at the state's request. This absurd result, which defies both common sense and standard administrative agency practice and jurisdictional reach, further demonstrates the wide-ranging implications of the Proposal's significant expansion of the D.C. Circuit's decision in Hoopa Valley. Overall, the practice of withdrawing and resubmitting an application, to provide a state with more time to review complex projects, had been a longstanding and common practice prior to the recent court decision in Hoopa Valley. The Proposal would also prohibit a state from taking any other action for the purpose of modifying or restarting the review period. This will have the effect of forcing NYSDEC and other state agencies to deny additional WQC applications, in cases where additional time or information may be necessary to assess compliance with applicable water quality standards. In other words, once again, the Proposal will have the effect of increasing the amount of application denials and resulting uncertainty through litigation, precisely the opposite of what EPA claims it is trying to accomplish. V. EPA would Unlawfully Substitute the Judgment of the Federal Government for that of the States As described above, the Proposal would unlawfully limit the scope of a certifying authority's review and create a veritable procedural gauntlet for states to navigate to avoid waiver. To make matters worse, even within the limited space that EPA would leave for states under the Proposal, EPA would unlawfully substitute the judgment of federal agencies for that of the states. The Proposal would accomplish this in a variety of ways. This includes the newly created ability for the federal permitting agency to line- item veto specific conditions in a state-issued WQC, provisions that allow a federal agency to find that a state agency waived its authority even when it did act within the specified time period, and the federal agency's exclusive authority to enforce the conditions in a state-issued WQC. a. Federal Agency Line-Item Veto Specific Conditions in a State-Issued WQC The Proposal would give federal permitting agencies new and unlawful authority to choose not to incorporate specific WQC conditions into the federal license. In other words, if the federal agency deterrnines — in its sole discretion — that a state-issued condition is not within the narrow scope of review defined by EPA, it can simply cross that condition out of the WQC. Likewise, if the federal agency determines that the state- issued condition does not comply with the Proposal's new procedural requirements, it can similarly decide to leave that condition out of the federal license altogether. This line-item veto authority is contrary to the cooperative federalism structure of the Clean Water Act, the statutory language, and multiple judicial decisions. It will also create additional implementation challenges in practice. In particular, the Proposal sets forth that "[i]f the Federal agency determines that a condition does not satisfy the definition of §121.1(f) [regarding the narrow scope of certification] and meet the requirements of §121.5(d) [regarding the procedural requirements a state agency must adhere to for each condition], such condition shall not be incorporated into the license or permit."23 This is an extreme remedy that usurps clear state authority. It also violates the law. The Clean Water Act does not provide federal agencies with the authority to undertake a case-by-case and condition-by- condition assessment for each state-issued certification. A federal permitting agency cannot simply ignore state-issued conditions that it deems beyond the scope or otherwise not in compliance with EPA's procedural requirements. The statutory language is plain. Section 401(d) provides that any condition included in a state-issued WQC "shall become a condition on any Federal license or permit."24 There is no exemption to this clear legislative command to federal agencies. But under the Proposal, if the federal agency — such as EPA, or FERC, or the U.S. Army Corps of Engineers — determines that a particular condition is inappropriate, it can simply ignore it. PUD No. 1 and multiple other judicial precedents have confirmed that Section 401 prohibits federal agencies from second-guessing state-imposed conditions in a WQC. There is simply no authority for a federal agency to modify or veto state-issued conditions. In addition to violating the statutory language and judicial precedent, EPA's attempt to create federal line-item veto authority over specific state-imposed conditions in a state- 23 Proposal, 40 C.F.R. § 121.8(a)(1) (ernphasis added). 24 33 U.S.C. § 1341(d). issued WQC would create a multitude of implementation challenges. For example, while the Proposal states that the federal agency may provide an opportunity for the state to remedy any identified deficiency, the Proposal does not require any such process. In other words, a state that disagrees with the federal agency's determination may have no recourse, other than to seek judicial review of the federal agency's decision to veto specific conditions. Similarly, the Proposal says nothing about how the federal agency's actions to modify the state-issued WQC will be addressed in any administrative or judicial challenge to the state's actions. In many cases, a state-issued WQC will be subject to such challenge for a variety of reasons. Yet, it is not clear whether the challenger would have to bring such an action against the state, the federal agency, or both. Nor is it clear what the actual action subject to review would be, given that the federal agency would purportedly be modifying a final agency action by the state. These and other legal and procedural challenges are completely unaddressed by EPA in the Proposal. b. Ability to Find Waiver Even when a State Acts within the Applicable Time Period In addition to unlawfully giving federal agencies the ability to cross out particular conditions in a state-issued WQC that it does not like, the Proposal would also substitute the certifying authority's judgment for that of the federal government by making it easier for the federal government to find waiver. For example, the Proposal would define "failure or refusal to act" in broad terms,25 making it significantly easier for a federal agency to determine that a state waived its Section 401 authority over a project. In particular, in addition to simply taking no action within the applicable review period, waiver could also occur where the state — according to the federal agency — denies a WQC based on factors outside the narrow scope of review described above. Similarly, if a state includes ostensibly outside-the-scope conditions, a federal agency may find waiver. Just like other aspects of the Proposal, this goes beyond the statutory language of Section 401. Nothing in the Clean Water Act provides the federal agency with the authority — simply because it believes that a state's denial of a WQC is based on factors unrelated to water quality requirements — to find that the state agency waived its authority altogether, particularly when the state did act within the applicable time period. If a state acts to issue, issue with conditions, or deny a request for certification within the applicable time period under Section 401, it has not waived. If a federal agency or any other party believes that the state's actions are beyond the scope of Section 401, then the proper remedy is administrative or judicial review of the state's actions. This new provision would significantly increase the likelihood of the relevant federal agency, such as FERC, concluding that NYSDEC or other relevant certifying authority waived its WQC authority over a project. Even if the state acts within the applicable time period, the federal agency would be able to invalidate any WQC denial based on its own assessment of scope. This is yet another way that the Proposal would unlawfully shift 25 Proposal, 40 C.F.R. § 121.1(h). authority away from states and to federal agencies, in violation of the entire purpose of Section 401. The newfound ability of federal agencies to find that a state waived its authority would also create additional administrative and procedural complications. First, it is not clear precisely what type of situations would justify a finding of waiver by the federal agency. The regulatory language in the Proposal seems to be intentionally ambiguous, perhaps to provide federal agencies with unfettered discretion to overturn state decisions. For example, it is not clear whether a denial that is based on factors such as a lack of sufficient information, the inability of a state to determine that the project will comply with applicable standards, or the incomplete nature of the federal agency's own administrative or environmental review, would be considered valid under the Proposal. It may be that each of these situations would, under the Proposal, allow the federal agency to find that the state waived its Section 401 authority over the Project. If the federal agency considers any of these bases to be illegitimate, it could unilaterally overturn a state's denial, with no recourse available to the state. Thus, just like with the Proposal's provisions to allow for a federal line-item veto of specific state conditions, the ability for a federal agency to find waiver — despite the fact that the state actually acted within the applicable time period — would complicate procedures for administrative or judicial review of agency actions. If the federal agency finds that a state's denial is invalid, and therefore that it has waived its authority, the Proposal does not require the federal agency to provide the state with any procedure for remedying the supposed defect. In other words, it would become unclear whether the state agency's actions are final, effective, and subject to judicial review. It would also force New York and other states to take affirmative and immediate legal action against the federal agency, at least if the state wants to preserve its authority over the project, protect water quality, and prevent construction of the project without the required WQC. These and other complications are completely unaddressed by EPA in the Proposal. EPA must remedy these flaws in any final regulation. c. The Proposal would Unlawfullv Provide Federal Agencies with Exclusive Authority to Enforce State-Issued WQCs As described above, the Proposal would grant federal agencies new control over the states WQC review process, in some cases purporting to overturn both plain statutory language and various established judicial precedents. In addition to the possibility of the federal agency rejecting specific conditions in a state-issued WQC, or finding waiver based on the federal agency's determination the state acted beyond its Section 401 authority, the Proposal also asserts that federal agencies have sole authority to enforce the conditions of a WQC. This is wrong. EPA wrongly claims that, once a state issues a WQC, the state does not have any authority to enforce its conditions. This is again contrary to established legal decisions, and further limits the ability of a state to protect its own water quality resources. It is also contrary to the established cooperative federalism structure of the Clean Water Act, which has long made states and other certifying authorities co-regulators along with the federal government. The Proposal's exclusive grant of enforcement authority to the federal agency undermines this critical component of Section 401, If a state cannot enforce the water quality protection measures it imposes on a project, then the entire WQC process can be rendered meaningless. Ironically, EPA attempts to justify this aspect of the Proposal by suggesting that federal agencies have struggled to enforce state-issued conditions. If that is the case, New York and other states are more than willing to continue enforcing the conditions of their own certifications. To be sure, it may be that federal agencies lack the resources to properly enforce the conditions of WQCs. If that is the case, then the Proposal would further undermine the effectiveness of the Section 401 process, as credible enforcement is necessary for WQCs to have full effect. Or it may be that federal agencies do not want to have any responsibility for enforcing such conditions, in which case they should seek legislative clarification from Congress. lf the federal agencies lack the technical knowledge and expertise to enforce the state-issued conditions, that is merely further justification for the existing cooperative structure of Section 401. The existing structure properly places responsibility at the state level due to the state's local knowledge and expertise regarding both its own water quality resources and the requirements of state law that are addressed by state-specific conditions. Thus, in multiple ways, the Proposal would attempt to substitute the judgment of a federal agency for the more informed and expert opinion of the local state, in terms of protecting water quality and determining compliance. VI. The Proposal would Require States to Violate or Change their own Regulations Finally, on top of the Proposal's multitude of unlawful provisions that would almost completely transfer authority to protect water quality resources from the states to the federal government, EPA also goes beyond its reach under Section 401 by effectively requiring states to either violate or change their own procedural regulations. Many states, including New York, have their own statutes and regulations that establish procedures for reviewing permit applications, including requests for certification under Section 401. In New York, these regulations establish requirements such as the contents of an application, whether NYSDEC can request additional information, when NYSDEC can commence review of an application, when public notice and an opportunity for comment is required, and whether the state can make a decision before environmental review is complete. Under the Proposal, NYSDEC will be faced with the choice of violating its own regulations — thereby creating vulnerability for its decisions should they be legally challenged — or seeking statutory and regulatory changes to comply with the Proposal. Section 401 provides that states and other certifying authorities must adopt regulations governing public notice regarding WQC applications and may establish rules regarding public hearings on such requests. Yet EPA fails to consider the Proposal's impact on existing state statutes and regulations applicable to Section 401 implementation. Rather than consider these impacts, EPA merely suggests that the states themselves update their own regulations as necessary. At a minimum, EPA should provide additional time for states to complete the assessment that EPA refuses to undertake, in order to identify necessary statutory and regulatory changes at the state level to comply with the unreasonable administrative demands of the Proposal. For example, the Proposal explicitly states that various requirements do not excuse a state's failure to act. This includes seeking additional information from the applicant, completing public notice or other necessary regulatory processes under state law, or allowing for the completion of overall environmental review pursuant to the National Environmental Policy Act. In New York, ignoring these requirements is likely to have the effect of requiring NYSDEC to violate its own existing procedural regulations to avoid waiver while complying with EPA's new requirements. This will only create legal ammunition for opponents of a given project to challenge NYSDEC's actions, once again undermining the very objectives EPA claims are driving the Proposal. NYSDEC has established permitting review procedures, applicable to both Section 401 requests and applications under a variety of other programs, pursuant to its Uniform Procedure Act (UPA) and implementing regulations.26 Among other things, to commence review, the UPA requires NYSDEC to first assess whether a Section 401 request is complete.27 Notably, complete for purposes of New York's UPA generally requires more information than the simple postcard of information that could constitute a Section 401 request under the Proposal. New York's requirements for a Section 401 application is generally more robust than what EPA would allow under the Proposal.28 If an application is incomplete, and even after it is deemed complete, NYSDEC may require an applicant to provide additional information so that the State is able to make the required decision under the law. Moreover, only once NYSDEC determines that a request for a Section 401 certification is complete, as defined pursuant to its own regulatory language, can NYSDEC provide for public notice and comment of the application?29 Indeed, rather than being a problem with New York's procedural regulations, this is a fundamental feature of the State's UPA process, in order to ensure a fair and open process for the public. Another feature is the requirement to await the completion of the environmental review process, including under the State Environmental Quality Review Act, before making a final decision on an application.3° This is another design feature of the State's regulations, which ensures the environmental impacts of an application are adequately considered, and also avoids the potential for significant changes to the nature of a project subsequent to a decision. While EPA explicitly tells states in the Proposal that these types of state procedural requirements are no excuse for "failure or refusal to act," New York's own reviewing 26 New York State Environrnental Conservation Law Article 70; 6 NYCRR Part 621. 27 6 NYCRR § 621.6 "See, e.g., Id. §§ 621.3, 621.4 29 Id. § 621.7; Environmental Conservation Law § 70-0109(2)(a). 30 6 NYCRR § 621.3(a)(7). courts will likely not be so dismissive of state statutes and regulations. By requiring New York and other states to take action even before a complete application is received or • environmental review is complete, for example, NYSDEC would have no choice but to violate its own requirements such as those regarding public notice. Applicants may further frustrate the process by refusing to provide NYSDEC with necessary information. The result of all of this is likely to be additional denials of Section 401 requests based on incomplete information and an incomplete administrative review, or the issuance of a WQC under circumstances that did not comply with procedural requirements. In either case, the ultimate outcome will be additional litigation challenging NYSDEC's actions, from project proponents and opponents alike. In other words, the Proposal will merely increase the confusion and uncertainty that EPA claims it is trying to address. While EPA seems to suggest that it would be easy for states to update their regulations to align with the Proposal, this is not necessarily the case. First, the Clean Water Act does not provide EPA with the authority to dictate a state's administrative procedures in this manner, particularly not in a way that would frustrate fundamental principles of public notice and comment. Second, in the case of New York, the State would likely be required to amend its statutory language as well as its regulations. But administrative agencies like NYSDEC cannot command legislative changes. Overall, EPA's failure to meaningfully consider the impact of its Proposal on states existing administrative procedural requirements provides yet another example of the Proposal's complete lack of respect for states and other certifying authorities. Vll. Conclusions The Proposal flies in the face of the Administration's purported support for states' rights and cooperative federalism. It is a solution in search of a problem that is merely the result of the President's political attack against New York and other states. While it is designed to comply with an unlawful Executive Order and fit into the Administration's false narrative regarding state obstruction and delay under Section 401, it lacks any rational basis. The Proposal would significantly limit states' authority under Section 401. If promulgated, the proposed regulations would empower federal agencies to override specific state conditions reflected in WQCs, and to find that a state waived its authority, despite having acted within the applicable time period under Section 401. Furthermore, federal agencies would have the sole authority to enforce the conditions of a state- issued WQC. If finalized, the Proposal would make it difficult or impossible for any state to protect the quality of its water resources and would in turn constitute a severe infringement on states' rights. While EPA and the Administration may welcome the opportunity to strip states' ability to protect their citizens by dismantling environmental protections and laws, New York State will continue to oppose this and other actions that place industry above the environment. New York urges you to not move forward with this unlawful Proposal. As' Li