EPA and Army Corps Promulgate New Expansive Definition of Waters of the United States

On December 30, 2022, the Agencies issued a prepublication version of a final rule redefining the "waters of the United States." Waters that are characterized as "waters of the United States" are within the scope of the federal Clean Water Act and permits may be required before performing activities that may impact the waters.  

The Agencies' path to the new definition has been affected by changes in regulatory priorities and court intervention. The regulatory definition of "waters of the United States" was largely unchanged from 1986 until 2015. However, the United States Supreme Court decisions in Solid Waste Agency ofNorthern Cook County v. Army Corps, Rapanos v. U.S.,and Carabell v. Army Corpsimpacted interpretation of the existing definition. Of special importance is Rapanos, in which the plurality held that only those wetlands that have a continuous surface water connection to regulated waters may themselves be regulated as "waters of the United States." Subsequent to these decisions, the Agencies promulgated the "Clean Water Rule" in 2015 to codify the existing guidance and interpretation. The impact was an expansion of the waters considered "waters of the United States." 

In 2020, the Agencies significantly reduced the scope of the "waters of the United States" with promulgation of the "Navigable Waters Protection Rule." In June 2021, the Agencies announced that they intended to revise the definition of the "waters of the United States" due to concerns over environmental degradation. Before they did so, in August 2021, a federal district court in Arizona vacated the Navigable Waters Protection Rule. 

According to the Agencies, the new rule is founded on the pre-2015 definition and interpretation of the "waters of the United States." The final rule interprets "waters of the United States" to include: 

1. Traditional navigable waters, the territorial seas, and interstate waters;
2. Impoundments of "waters of the United States";
3. Tributaries to traditional navigable waters, the territorial seas, interstate waters, or impoundments of the "waters of the United States" when the tributaries meet either the "relatively permanent standard" or the "significant nexus standard";
4. Wetlands adjacent to traditional navigable waters, the territorial seas, and interstate waters;
5. Wetlands adjacent to and with a continuous surface connection to relatively permanent impoundments of the "waters of the United States";
6. Wetlands adjacent to tributaries that meet the "relatively permanent standard";
7. Wetlands adjacent to impoundments of the "waters of the United States" or jurisdictional tributaries when the wetlands meet the "significant nexus standard"; and
8. Intrastate lakes and ponds, streams, or wetlands not identified in the above categories and that meet either the "relatively permanent standard" or the "significant nexus standard." 

 The Agencies "relatively permanent standard" and "significant nexus standard" are concepts rooted in historic court decisions and past iterations of "waters of the United States." However, the standards used by the Agencies in the final rule are distinguishable from prior standards and guidance and are likely to result in ambiguity with respect to whether certain waters qualify as "waters of the United States."  

Under the new rule, to meet the "relatively permanent standard," the water bodies must be relatively permanent, standing, or continuously flowing waters connected to traditional navigable waters, the territorial seas, and interstate waters; or waters with a continuous surface connection to such relatively permanent waters or to traditional navigable waters, the territorial seas, and interstate waters. The Agencies do not define what constitutes "relatively permanent," which is certain to develop into a point of contention between the Agencies and regulated businesses, especially for businesses that have facilities or activities that touch ephemeral tributaries to traditional navigable waters, territorial seas and interstate waters. 

To meet the "significant nexus standard" the water body (alone or in combination) must significantly affect the chemical, physical, or biological integrity of traditional navigable waters, the territorial seas, or interstate waters. The Agencies, in part, define "significantly affect" as "a material influence of the chemical, physical, or biological integrity of" traditional navigable waters, the territorial seas, and interstate waters. The Agencies do not define and only provide limited guidance on what constitutes a "material influence." In the preamble, the Agencies state only that "material" is more than speculative or insubstantial. Instead, the Agencies built into the definition of "significantly affect" a number of functions and factors (such as contribution of flow, retention of floodwaters and runoff, distance, etc.) to be assessed to determine whether waters, alone or in combination with similarly situated waters in the region, have a material influence on the physical, or biological integrity of traditional navigable waters, the territorial seas, and interstate waters. The phrase "material influence reflects the Agencies' position that "significant nexus determinations should be supported by the factual record, relevant scientific data and information, and available tools." Much like with the "relatively permanent standard," the vagueness of terms used within the standard and the application of the factors and functions are likely to lead to disagreements between the Agencies and regulated businesses. 

The final rule includes a number of exclusions, including: (i) certain waste treatment systems; (ii) certain prior converted cropland designated by the Secretary of Agriculture (such exclusion ceases upon a change of use); (iii) ditches excavated wholly in and draining only dry land and that do not carry a relatively permanent flow of water; (iv) artificially irrigated areas that would revert to dry land if the irrigation ceased; (v) artificial lakes or ponds created by excavating or diking dry land to collect and retain water used for certain purposes; (vi) artificial reflecting or swimming pools or other small ornamental bodies of water created by excavating or diking dry land to retain water for primarily aesthetic reasons; (vii) waterfilled depressions and pits created in dry land in certain circumstances; and (viii) swales and erosional features characterized by low volume, infrequent, or short duration flow. 

The final rule goes into effect 60 days after publication in the federal register and is likely to promptly be subject to legal challenges. In the nearer term, a case recently heard by the Supreme Court, Sackett v. EPA, may materially impact the final rule. The question presented by Sackett is whether wetlands without a continuous surface water connection to regulated waters may themselves be regulated as "waters of the United States." Recognizing the importance of Sackett to the final rule, the parties to Sackett have exchanged letters contesting the impact of guidance on "adjacent" waters within the final rule. To the extent that the Supreme Court adopts the plurality opinion from Rapanos v. U.S. and holds that wetlands must have a continuous surface water connection to regulated waters to be regulated as "waters of the United States," the Agencies would almost certainly no longer be able to use the "significant nexus standard" for wetlands. Moreover, it may call into question the Agencies use of the "significant nexus standard" for other categories of waters as well. 

After the final rule goes into effect, businesses with operations that touch potential "waters of the United States" should consider the potential impact of the expanded definition. Discharges that were previously subject to a regulatory scheme less burdensome than that of the Clean Water Act may now be subject to new and/or stricter effluent limitations and a more difficult permitting process. Businesses planning to conduct operations, such as land development, facility expansion, mining or other activities that could impact nearby waters may now face new Army Corps and EPA permitting requirements. Businesses should plan for additional lead time and costs when considering such activities. Perhaps most importantly, businesses should carefully monitor the status of Sackett v. EPA, as the outcome (expected to be announced by June 2023) may alter the regulatory scheme set to take effect.