Update on Federal Government’s Approach to Defining ‘Waters of the United States’

The U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) are moving ahead to finalize their guidance on “Identifying Waters Protected by the Clean Water Act”, despite industry’s objections, while they prepare to initiate rulemaking on the definition of “waters of the United States.” The final guidance document – which describes EPA and the Corps’ view of their authority to regulate all waters and wetlands — significantly changes and expands what water features are subject to federal jurisdiction and permit requirements under the Clean Water Act (CWA). Looking ahead, a recent U.S. Supreme Court decision in Sackett v. EPA will provide useful support for property owners and others seeking to challenge CWA jurisdictional determinations made by the agencies outside the context of a compliance order. EPA and the Corps issued draft guidance one year ago, in May 2011, on “Identifying Waters Protected by the Clean Water Act.” As this guidance document moved from proposed to final form, the concerns, including those raised in AGC’s comments, were not addressed. The guidance document, which was sent in final form to the Office of Management and Budget (OMB) on Feb. 21, 2012, significantly changes and expands what water features are considered protected under the Clean Water Act. The guidance also ignores the fundamental premise in the Act that there are waters subject to the exclusive regulatory jurisdiction of the states. The final guidance is overly broad and expands federal jurisdiction well beyond the intent of Congress and the limitations recognized in recent Supreme Court decisions. This increase in jurisdiction could increase construction costs and project delays with expensive permits that take years to obtain. There is already an extensive backlog of these Section 404 permits, and this will likely add to it. In Congress, Senators Barrasso (R-Wy.), Inhofe (R-Okla.), Heller (R-Nev.) and Sessions (R-Ala.), along with 26 of their colleagues, have introduced legislation in the U.S. Senate - S. 2245, “Preserve the Waters of the U.S. Act” - to stop EPA and USACE from implementing the guidance. AGC is working with our industry partners in the Waters Advocacy Coalition to gather support for this bill. The coalition sent its letter of support the day the bill was introduced. In addition, AGC members asked their members of Congress for support and additional cosponsors last week during the annual Federal Contractors Conference and Fly-in. Today, a companion bill was introduced in the U.S. House of Representatives, H.R. 4965, by Reps. Mica, Rahall, Peterson, Lucas and Gibbs. Like the House version, the bill would prevent EPA and the Corps from issuing their final guidance on “Identifying Waters Protected by the Clean Water Act” or using it as a substantial basis for any rule.  AGC is urging members of Congress to show their immediate support for H.R. 4965. Also this week, the House Appropriations Committee added a policy rider to their energy and water FY 2013 spending bill that would – in a similar fashion – bar the agencies from implementing their final guidance.  The amendment, introduced by Rep. Dennis Rehberg (R-Mont.) and passed by a vote of 29-20, prohibits using funds to “develop, adopt, implement, administer, or enforce” guidance that purports to clarify which waters of the United States fall under federal protection. These recent legislative actions parallel AGC’s legislative strategy on this issue. As OMB’s Office of Information and Regulatory Affairs (OIRA) considers the approval of the final CWA jurisdictional guidance, it will be considering the Supreme Court opinions on this issue, including the most recent decision in Sackett v. Environmental Protection Agency, 566 U.S. __ (2012), where the court scolded EPA for its overreach and said that setting clear and reasonable jurisdictional limits would halt the uncertainty among industry. Also being considered is industry’s opposition to the guidance (see the Waters Advocacy Coalition’s letter to OMB). AGC recently joined other members of the Waters Advocacy Coalition in a meeting with OMB to lay out the construction industry’s opposition to the guidance. High Court Decision Allows Regulated Groups to Challenge EPA’s CWA Authority The U.S. Supreme Court unanimously agreed in the Sackett case that an administrative compliance order issued by the EPA under the Clean Water Act was final agency action reviewable under the Administrative Procedure Act (APA) and that the CWA does not preclude pre-enforcement review of the compliance order. This decision is important for groups facing CWA jurisdictional questions with Corps or EPA because it allows groups to challenge the agency’s assertion of jurisdiction in a compliance order issued under the CWA in federal court prior to a federal agency initiating an enforcement action. The decision may also open the door for groups seeking judicial review of CWA jurisdictional determinations made outside the context of a compliance order. For more information, please contact Leah Pilconis at pilconisl@agc.org or Scott Berry at berrys@agc.org.