Notice & Comment: The War Over "Waters of the United States"

The 2015 Clean Water Rule issued by the U.S. Environmental Protection Agency and the Army Corps of Engineers sought to clarify the jurisdictional limits of the Clean Water Act. But, the complex rule has triggered much confusion, controversy and litigation. The Trump administration now seeks to repeal and replace the Obama-era Clean Water Rule. In January 2018, the U.S. Supreme Court further complicated the issue by overturning the national stay and sending the case back to the federal district courts. The Trump administration quickly followed up with a two-year delay on the rule’s implementation until 2020, presumably while it works its way through the courts and regulatory process. The issue continues to divide industry and environmental groups.

In Episode 6 of Notice & Comment, Max Kelln sits down with environmental specialist Ben Harvey of American StructurePoint to cover the new definition of Waters of the U.S. and its practical implications for development and agribusiness.

What Is WOTUS?

The term Waters of the United States (WOTUS) sets the jurisdictional limits of the Clean Water Act. It is therefore used in many different facets of Clean Water Act regulation, including permits for wastewater and stormwater discharges, construction, dredging and filling of waters, and certain applications specific to agribusiness. The term covers those waters “traditionally” considered navigable, including bodies of water used for interstate commerce, including lakes, rivers, streams and territorial seas. However, the definition of WOTUS also includes less obvious waters including so-called “intermittent” streams, tributaries and wetlands that are “adjacent” to jurisdictional waters.

Prior to 2001, many presumed that all waters were also WOTUS and subject to federal jurisdiction. However, that began to change in a series of U.S. Supreme Court opinions leading up to Rapanos v. United States in 2006. In Rapanos, the court in a controversial 4-1-4 decision held that only wetlands that had a “significant nexus” to other jurisdictional waters were subject to the Clean Water Act. However, Justices Scalia, Thomas, Alito and Roberts argued for a far more limited definition.

The U.S. EPA and Army Corps of Engineers then released joint guidance in April 2011 that sought to implement the Supreme Court’s “significant nexus” test and issued a final rule – known as the “Clean Water Rule” – in May 2015. The rule was immediately challenged.

What’s the Status of WOTUS?

The 2015 Clean Water Rule remains stayed within certain federal court jurisdictions and nationwide through a two-year delay in the applicability date issued by EPA on January 31, 2018. However, the prior rule that was in effect at the time of the Rapanos decision remains the law of the land. This includes defining WOTUS as wetlands that are “adjacent” to other federal waters and applicability of the Supreme Court’s “significant nexus” test. Moreover, the technical criteria for identifying wetlands – hydrophytic vegetation, hydric soils and hydrology – remain in effect. Likewise, the definition of streams (including intermittent streams) as those waters with a “bed, bank, and ordinary high water mark” is still in force. As a result, many issues involving wetlands remain status quo until EPA issues a new rulemaking to replace the Clean Water Rule, which may be imminent.

Working With Wetlands

According to the Indiana Department of Environmental Management, 75-80 percent of wetlands in Indiana have been eliminated. With relatively few wetlands remaining, the policy behind wetland permitting reflects that these resources have been deemed worthy of stringent protection. Many see wetlands as a valuable natural resource for flood reduction, groundwater recharging, pollutant elimination and wildlife habitat. As a result, there is a high price for those who wish to fill in wetlands for development.

The cost of wetland permitting, including the requirement to mitigate lost wetlands, can quickly result in a project no longer being economically feasible or a site not being conducive for development. Costs for permitting and mitigation can exceed six figures and take over a year to complete. This includes time to find, secure, design and construct wetland mitigation. As a result, sites that require filling more than a couple of acres of wetlands are rarely developed. But, certain activities, such as filling in less than 1/10 of an acre of wetlands, may be exempted from permitting.

Properties with a significant wetland presence may not be feasible for large projects or expansion. As a result, developers should be wary of sites within developed areas that have been left untouched. Interested developers can use resources such as the Wetlands Mapper on the U.S. Fish & Wildlife website, which notes areas of high wetlands likelihood. Online mapping tools that show aerial photography with standing water on a site at any time are also helpful.

Green Building

Ben Blair, a tax lawyer with Faegre Baker Daniels, also joined the podcast to note the importance of accurate appraisals of green buildings. As green buildings emerged that were built to be energy efficient, reduce operating costs and reduce impact on the environment, appraisers didn’t know how to appraise them, Blair noted. This has led to property tax appeals when buildings are over-appraised.

Faegre Baker Daniels’ new monthly podcast, “Notice and Comment: Faegre Baker Daniels Environmental Podcast” showcases attorneys from Faegre Baker Daniels’ offices nationwide and guests as they discuss cutting-edge issues in environmental law. Topics will cover the spectrum of federal and state environmental laws, including the Clean Water Act, Clean Air Act, Endangered Species Act, NEPA, SDWA, CERCLA, RCRA and TSCA – all from a practitioner’s perspective.

Note: The opinions expressed in this podcast do not necessarily reflect the views of Faegre Baker Daniels or our clients.