Since the inception of the Clean Water Act (CWA) in 1972, the federal government’s authority to define which bodies of water are regulated has waxed and waned, with increasingly more changes during the past 20 years. Due to a recent Supreme Court case, the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (USACE) issued new guidance via amendment on Aug. 29, 2023.
The CWA introduced federal jurisdiction over “navigable waters” and other “waters of the United States (WOTUS).” WOTUS was not defined in the CWA, creating challenges to implementing wetland regulations during the past 50 years. The lack of clarity regarding which types of wetlands and streams are “waters of the United States” and, therefore, subject to the jurisdiction of the CWA has been a source of consternation for projects with potential discharge into WOTUS. Only those waters of the United States that are “jurisdictional” under the CWA require federal permits from the USACE.
On Jan. 18, 2023, EPA and USACE released a “Revised Definition of ‘Waters of the United States’” (2023 Rule). This latest attempt to provide a durable definition was built on the relatively permanent standard and the significant nexus standard to assess connectivity between navigable waters and other potential WOTUS. However, the durability was short-lived and on May 25 the Supreme Court published a decision in the Sackett v. EPA case, altering the criteria that determine which wetlands and waters are considered “waters of the United States.”
In the Sackett v. EPA case, the ruling stated that the CWA only extends to wetlands that are “indistinguishable from waters of the United States.” This nuanced concept stipulates that the wetland must be next to or connect to traditional navigable waters and exhibit a continuous surface connection with those waters, making it challenging to delineate where the water ends and the wetland begins. The Supreme Court specifically said that the “significant nexus” test cannot be used to determine if a body of water is jurisdictional. A direct consequence of the Sackett v. EPA case is potential exclusion of various wetlands and ephemeral streams that would have previously been classified as jurisdictional.
On Aug. 29, EPA and the USACE announced pending Federal Register publication of an amendment to the 2023 Rule. This amendment conforms the 2023 Rule to the Sackett decision by removing language regarding the significant nexus standard, interstate wetlands, and portions of the definition of adjacent when used to determine WOTUS. The amended 2023 Rule will take effect immediately upon publication in the Federal Register. Due to the ongoing litigation regarding the 2023 Rule, this amended Rule will only take effect in the 23 states NOT included in the current lawsuits filed against that rule. The 27 other states will continue to use a definition of WOTUS consistent with pre-2015 regulatory guidance while awaiting settlement of various legal challenges.
Since May, applicants needing a Section 404 permit needed to assume that all aquatic resources were jurisdictional in order to receive authorization from the USACE. Businesses, municipalities and developers that secured approved jurisdictional determinations (AJDs) before the May 2023 Supreme Court ruling may want to pursue reevaluation of their AJD, if it could reduce the number of waters considered jurisdictional.
Conversely, businesses, municipalities and developers may choose to avoid impacting wetlands as a demonstration of environmental stewardship, even if specific wetland impacts do not require a Section 404 permit from the USACE.
The amended 2023 Rule has far-reaching implications. Businesses, developers, municipalities and state governments continue to navigate complex territory to balance economic growth and municipal services with environmental stewardship. The amended 2023 Rule issued by EPA and USACE may provide more clarity for developers and asset owners, but the pending lawsuits and lack of federal consistency for interpreting WOTUS sets a stage for many more potential conflicts. Additionally, because the new amendment has simply updated the 2023 Rule that is already the subject of legal challenges, the nation will have to operate under two separate definitions of WOTUS until the legal challenges are resolved or until the next attempt at a “durable” definition is made. To help the public better understand this complex issue, EPA created a fact sheet outlining changes to WOTUS categories and definitions.
Changing regulations can delay construction projects. In this evolving landscape, developers and asset owners require up-to-date knowledge to navigate permitting processes and regulatory agencies.