June 9, 2015

　　On May 27, the U.S. Environmental Protection Agency (EPA) finalized its highly controversial Waters of the U.S. rule. The proposed rule’s definition of “Waters of the U.S.” gained significant attention and created concern amongst many industries including manufacturing and agriculture because of its potential to significantly expand federal jurisdiction over waters. Because the Clean Water Act (CWA) affects many aspects of federal and state regulation, some are calling this proposed rule the most significant CWA development in years. In fact, EPA received over one million comments during the public comment period in response to the WOTUS proposed rule. The rule’s coverage of waters and wetlands would trigger oil spill prevention programs, as well as state water quality certification of federal projects. Because of the significant blowback from states, industry, and organizations alike, over the past year, EPA worked with states to clarify the confusion created by the proposed rule.

　　Background

　　The CWA prohibits facilities from discharging pollutants into “navigable waters” without a federal permit, and “navigable waters” are protected under the CWA, which defines these waters as “Waters of the U.S.”

　　In response to a number of Supreme Court cases that have complicated what constitutes “Waters of the United States,” EPA and the U.S. Army Corps of Engineers released the “Definition of Waters of the United States under the Clean Water Act” (WOTUS) proposed rule on April 21, 2014. According to EPA, the purpose of the proposed rule was to provide clarity and increase certainty for entities with regulatory obligations under the CWA, including permit obligations for discharges to waters. Sections of the CWA that are affected by the definition of WOTUS are National Pollutant Discharge Elimination System (NPDES) permits, section 404 permits that regulate discharges of dredged or fill material, section 401 state water quality certifications, section 311 oil spill programs (including Spill Prevention, Control, and Countermeasures [SPCC] plans), and section 303 water quality standards.

　　The proposed rule sought to amend two definitions in the CWA — tributaries and adjacent wetlands — and added an additional category of regulated waters called “other waters.” For tributaries, the proposed rule for the first time offered a definition. It described a tributary as having stream-like physical characteristics that contribute flow directly or indirectly to navigable waters. The water can be manmade or natural, discontinuous, perennial, intermittent, or ephemeral. For adjacent wetlands, the proposed rule added “adjacent waters” to navigable waters under the scope of WOTUS. “Adjacent” is defined as bordering, contiguous, or neighboring, and EPA provided new definitions for those terms. And finally, the proposed rule established that “other waters” may be regulated under the CWA on a case-by-case basis if the waters alone or in combination with similarly situated waters in the same region have a “significant nexus” to navigable waters. The proposal also listed exemptions, including certain ditches, groundwater and artificial reflecting pools.

　　Many industries, as well as members of Congress, criticized the proposed rule because it did not simply clarify CWA jurisdiction, but rather, that it effectively was an expansion of CWA jurisdiction and would expand federal authority over streams, ditches, ponds, and other local water bodies. In particular, the fact that the proposal would allow EPA to define, on a case-by-case basis, any waters as being within their jurisdiction created serious concerns among industry. Industries have also indicated that the proposal would deviate from the spirit of current law that applies specifically to truly “navigable waters.”

　　Also, because of the fact that tributaries included ephemeral streams and waters that contribute flow indirectly to navigable waters, and the potential reach of the significant nexus test for the “other waters” category, many stakeholders argued that this left many types of water open to regulation by EPA that previously did not need federal permits. Industries expressed concern that the proposed rule could result in their facilities’ storm drain systems, industrial ponds, bordering undeveloped property, ditches, and isolated wetlands falling under the definition of WOTUS and, therefore, resulting in increased monitoring and restrictions.

　　ACA Comments

　　On Nov. 14, 2014, ACA joined with more than 300 trade associations and chambers of commerce from 50 states representing a wide range of industries to voice strong concerns about the WOTUS proposed rule to dramatically expand the scope of federal authority over water and land uses across the United States, and calling for the proposal to be withdrawn. The effort was led by the U.S. Chamber of Commerce.

　　ACA’s comments submitted to EPA/Army Corps of Engineers argued that the proposed rule further complicates CWA jurisdiction with new, vague terms, expands far outside the scope established by Congress, compromises state authority, and could have profound and costly impacts on facilities regulated under federal permits. ACA also stated that the expansive WOTUS definition would trigger greater regulatory obligations in regard to federal permitting programs, and the new broad and vague definitions would allow for significantly more waters to be connected and eventually lead to a traditional navigable water, so that businesses will face tremendous difficulty determining which waters meet the WOTUS definition.

　　The written comments detailed several examples of the impacts of the proposed rule, including:

　　Maps prepared by EPA show the rule could expand federal jurisdiction over waters from 3.5 million river and stream miles to well over 8 million river and stream miles;

　　The rule would make most ditches into “tributaries.” Routine maintenance activities in ditches and on-site ponds and impoundments could trigger permits that can cost $100,000 or more;

　　These permitting requirements would likely trigger additional environmental reviews that would add years to the completion time for ordinary projects;

　　Even if a project can get a permit, firms will often have to agree to mitigate environmental “damage” with costly restoration/mitigation projects; and

　　The proposal would likely also result in more stringent storm water management requirements, which would affect retailers, companies with large parking lots, “big box” stores, etc.

　　Additionally, on March 18, 2015, ACA submitted a Statement for the Record to the House Committee on Small Business for its hearing on “Tangled in Red Tape: New Challenges for Small Manufacturers.” In its statement, ACA identified a number of regulations where compliance has or will be especially challenging or onerous for its small business members, including the WOTUS proposed rule.

　　Congressional Activity

　　Since the release of the WOTUS proposed rule last year, members of Congress have heavily engaged in the issue, holding multiple Congressional hearings with bodies including the House Agriculture Subcommittee on Conservation and Forestry, House Oversight and Government Reform Committee, House Transportation and Infrastructure Committee, Senate Environment and Public Works Committee, House Small Business Committee, and House Appropriations Committee. A number of Congressional members have also introduced legislation to either stop the rulemaking or place requirements on EPA before the release of a final rule — none of which were able to pass before EPA’s recent release of the final rule.

　　For example, H.R. 594, introduced by Rep. Paul Gosar (R-AZ), seeks to prohibit EPA and the Army Corps from finalizing, adopting, or implementing WOTUS and require agencies to consult with state and local officials to develop recommendations for a new regulatory proposal. Similarly, S. 791 and H.R. 1487, introduced by Sen. Ted Cruz (R-TX) and Rep. Jim Bridenstine (R-OK), were introduced to prohibit EPA from finalizing WOTUS rule. However, two pieces of legislation have made the most traction: one in the House, and one in the Senate.

　　H.R. 1732, introduced by Rep. Bill Shuster (Chairman of the House Transportation and Infrastructure Committee) and Rep. Bob Gibbs (Chairman of the Subcommittee on Water), would require EPA and Army Corps to withdraw rule within 30 days and rewrite the rule in consultation with the states. This bill passed the House on May 12. Republicans also attached a policy rider to the House Energy-Water Spending Bill (2016 fiscal appropriations) HR 2028 that would prohibit EPA from using funds to promulgate the WOTUS rule. That bill also passed the House.

　　S. 1140, introduced by Sens. Joe Donnelly (D-IN) and John Barrasso (R-WY), introduced the Federal Water Quality Protection Act, which would require the agencies to rewrite the rule following explicit instructions such as requiring an analysis of economic impact on small businesses and the entire economy. Also, the bill would require EPA to ensure that municipal separate storm sewer systems and wastewater treatment systems aren’t inadvertently considered federally protected waters. This bill has also proceeded through the Senate EPW Committee and at press time, was scheduled to for markup on June 10.

　　Although President Obama has stated he would veto measures that stop the WOTUS rulemaking, these pieces of legislation are clear signs that many constituencies continue to have concerns with the broad scope of the rule and question EPA’s authority and ability to implement the rule.

　　Final Rule

　　While the final rule does clarify many aspects of the proposed rule, the concerns with the breadth of the rule and impacts on industry remain the same. The final rule, which goes into effect in 60 days, keeps the definition of “tributary” the same as the proposed rule, but expands the type of ditches that are excluded from the rule, such as ditches that are not excavated in or relocate a tributary, roadside ditches, and ditches that do not drain a wetland. As expected, the final rule also provides much-anticipated exemptions for certain agricultural and ranching activities, as well as artificial lakes and ponds. Traditional exemptions like groundwater and swimming pools also remain. Additionally, the rule also adds an exclusion from stormwater control features constructed to convey, treat or store stormwater and cooling ponds that are treated in dry land. This would apply to private and municipally owned stormwater sewer systems. Also, wastewater recycling structures and ponds built for wastewater recycling are exempt.

　　The final rule also clarifies that within the definition of “adjacent waters” (bordering, contiguous or neighboring), the term “neighboring” has three circumstances where water would be considered neighboring, and the term “adjacent” means water that is within 100 feet of the ordinary high water mark. A “floodplain” also now means a FEMA 100-year floodplain. However, because the rule still includes ephemeral, intermittent and perennial streams, concerns about significant expansion of federal jurisdiction over waters remains. Also, the case-by-case determinations of WOTUS are now limited to waters that are in one of 5 categories (prairie potholes, Carolina bays and Delmarva bays, pocosins, Western vernal pools, and Texas coastal prairie wetlands), waters within the 100-year floodplain of a traditionally navigable water, or water within 4000 feet of the high tide line or ordinary high water mark of a traditionally navigable water.

　　More information on the final rule is available athttp://www2.epa.gov/cleanwaterrule and http://www2.epa.gov/cleanwaterrule/documents-related-clean-water-rule.

　　Contact ACA’s Javaneh Nekoomaram for more information.