KMK Law Real Estate Blog

The terms “waters of the United States” and “navigable waters” play a critical role in defining the scope of federal programs that protect water resources nationwide.  These federal water protection programs have a direct and substantial impact on real estate development, construction activities, mining, farming and other commercial activities. 

On March 25, 2014, the United States Environmental Protection Agency (EPA) and the United States Army Corps of Engineers (Corps) jointly issued a proposed rule intended to clarify the scope of federal jurisdiction over various bodies of waters by revising the term “waters of the United States” under the federal Clean Water Act (CWA).  The proposed rules are 370 pages in length and will be published soon in the Federal Register.

This proposed rule is intended to provide clarification, certainty and prevent problems, among other things, in determining when federal and state permits are needed for site development activities involving wetlands, drainage ditches, streams, etc.  The stated purpose of the rule is to protect the nation’s aquatic resources, and to reduce the need for case by case determinations of the regulatory status of various categories of waters by codifying which waters of the U.S. are included or excluded as jurisdictional waters of the United States.

Background
Site development activities that impact streams and wetlands often necessitate obtaining in advance a CWA Section 404 dredge and fill permit from the Corps and a CWA Section 401 water quality certification from the state.  The trigger for determining the need for such permits is whether the affected waters constitute “navigable” waters of the United States.  What constitutes “navigable” waters has been subject to much litigation and uncertainty. 

The best example of this uncertainty is the 2006 Supreme Court decision in Rapanos v. United States.  In a split U.S. Supreme Court, Justice Scalia’s plurality decision held for a wetland to be navigable and thus regulated it had to be adjacent to a relatively permanent standing or continuously flowing body of water that was connected to a traditional navigable water, and the wetland had a continuous surface connection to such relatively permanent water. Justice Kennedy, writing a separate opinion for the majority Court, created a different test or standard and held there was a need for the water body to have a "significant nexus" to navigable waters to be regulated under the Clean Water Act.  The Court encouraged EPA and the Corps to adopt rules defining waters of the United States.

In 2011, the EPA and the Corps issued a draft guidance document to provide jurisdictional guidance incorporating both tests set forth in Rapanos, but it created additional confusion, and demands by various stakeholders for the agencies to adopt rules.  The proposed rule intends to move beyond a guidance document and provide a more enforceable framework for determining what constitutes regulated waters of the United States to ensure more certainty and predictability in jurisdictional determinations.  While likely to be disputed, the EPA and the Corps have emphasized the rule will not extend jurisdiction to waters that have not historically been protected under the Clean Water Act.

Overview of Proposed Rule
Under the proposed rule (33 CFR 328.3/40 CFR 230.3), “waters of the United States” are:

1. jurisdictional waters by rule and includes traditional navigable waters, interstate waters and wetlands, territorial seas and tributaries, and adjacent waters;
2. “other waters” with uncertain connections with streams and rivers that would be evaluated on a case by case basis and jurisdiction would be dependent upon whether a significant nexus to traditional navigable waters, interstate waters or territorial seas exist; and
3. waters excluded by rule.

Jurisdictional Waters by Rule.  With respect to jurisdictional waters by rule, natural or man-made tributaries, for the first time, will be defined by the rule even though they were waters of the U.S. under existing rules.  Tributaries to traditional waters would be per se jurisdictional waters of the United States unless they are excluded waters.  Under the proposed rule, if the water meets the definition of a “tributary” it is subject to CWA jurisdiction.  A “tributary” is characterized by the presence of a bed, bank, ordinary high water mark, and contribute (ephemeral, intermittent or perennial) flow directly or through another water to a jurisdictional water by rule.  Wetlands, lakes and ponds can constitute a tributary if they contribute flow to downstream traditional navigable waters.

In addition, waters “adjacent” to jurisdictional waters (i.e. traditional navigable waters) would also be jurisdictional by rule.  The term “adjacent waters” is replacing the term "adjacent wetlands" in the existing rule.  “Adjacent waters” are defined to be wetlands, ponds, lakes and similar water bodies that have a significant nexus to navigable waters, interstate waters and territorial seas.  The definition of “neighboring” has been added to further clarify its meaning in the definition of “adjacent waters,” which is defined to include waters within a riparian area or floodplain of a jurisdictional water, or waters with a shallow subsurface or confined surface connection to jurisdictional waters.

Other Waters.  “Other waters” (which are not jurisdictional by rule) may be jurisdictional only through a case-by-case determination that they have a “significant nexus” to a traditional navigable water, interstate water, or the territorial seas.  “Significant nexus” is defined under the rule to mean a water body that either alone or in combination with other similarly situated waters significantly affects the chemical, physical or biological integrity of the downstream water that is jurisdictional by rule.

Waters Excluded by Rule.  Under the proposed rule, certain waters are excluded from CWA jurisdiction. Existing exclusions for waste treatment systems (treatment ponds or lagoons) and prior converted cropland are retained, but for the first time, categorical exclusions of certain waters from CWA jurisdiction include: ditches excavated in uplands that drain uplands and lack perennial flow; ditches that do not contribute flow through another water to traditional navigable waters; groundwater; gullies; rills; and nonwetland swales. Various agricultural exclusions under the CWA pertaining to normal farming, ranching, silviculture, irrigation return flows, and water transfers are unaffected by the proposed rule.

Conclusion
The proposed rule is intended to revise and clarify the meaning of “waters of the United States,” retains the definition of “wetlands,” and “adjacent,” and includes the addition of the definitions of “tributary,” “significant nexus,” “neighboring,” “riparian area,” and “floodplain.”

EPA and the Corps are seeking public comments on the proposed rulemaking. The comment period is open for 90 days from the date of Federal Register publication.  While it is likely the issuance of the final rule will be delayed as the EPA and the Corps evaluate all of the public comments on the proposed rule pending the finalization of a exhaustive study of the connectivity of streams and wetlands by the EPA’s Science Advisory Board, the issuance of the final rule is likely to be closely watched and subject to legal challenges.

Persons or companies potentially affected by this proposed rulemaking should consider submitting comments within the 90-day timeframe.  Should you have any questions or need guidance or assistance in preparing comments on the proposed rule please contact Brian Babb at (513) 579-6963.