California is Filling the Gaps in the Clean Water Act

By Joshua Bloom (May 24, 2019, 2:33 PM EDT) Law 360

It has been almost half a century since the modern Clean Water Act was enacted. During that entire period, the scope of federal authority under the statute has been subject to competing court decisions, agency policies, state regulation and scholarly interpretation.

As a result, companies, property owners, municipalities and even state and federal regulators have been left to consider on their own the parameters of federal authority that have not been clearly delineated. Whether a Clean Water Act permit is required for certain waste water discharges, whether an area is a wetland subject to the act or whether a discharge to groundwater is regulated may vary depending on who you ask.

Near the end of the Obama administration, the U.S Environmental Protection Agency and Army Corps of Engineers finally developed a “waters of the United States” regulation that would clarify those questions. But that regulation, as would be anticipated with establishment of any law of that magnitude, has been subject to numerous lawsuits.

The Trump administration then inserted itself into the fray, taking steps by executive order and regulation to retract the scope of federal Clean Water Act jurisdiction. At the same time, various states have taken measures to counteract the administration's efforts, and more fully regulate under state law discharges to waters within those states.

Traditionally, California has led the way in establishing broad oversight of discharges to waters in the state. Recently, and in furtherance of the state’s “no net loss” policy, the State Water Resources Control Board, or SWRCB, issued its “State Wetland Definition and Procedures for Discharges of Dredged or Fill Material to Waters of the State.” The policy was officially adopted on April 4, 2019.

California has yet again made clear that it will not stand pat while the federal government pulls back. Manifested by its broad definition of “waters of the state,” and its new policy to expand the definition of what constitutes a “wetland” beyond the federal regulation, California is establishing a baseline that will likely provide a model for other states to follow suit.

Further, and in addition to filling the gaps left by the limitations in federal regulation, the new policy makes up for the fact that there was formerly no consistent procedure applied by the various regional water quality control boards throughout the state with regard to wetland regulation. The procedures set forth in the new state wetlands policy will automatically supersede any conflicting provisions in the regional boards’ water quality control plans, and will apply uniformly to the SWRCB and all regional boards.

Under the Trump administration, the EPA has proposed, and will soon seek to finalize, regulations that substantially limit the scope of “waters of the United States,” thereby limiting the scope of the federal Clean Water Act. And in an effort to counter recent federal circuit court decisions that interpreted the Clean Water Act to permit regulation of discharges to groundwaters that are hydrologically connected to navigable surface waters, the EPA on April 15 issued an “interpretive statement” that concludes that discharges to such groundwaters are not subject to the Clean Water Act. Challenges to those circuit court cases will be heard by the U.S. Supreme Court, so the EPA’s timing is less than coincidental.

Under California’s wetland regulation scheme, any wetland that would be subject to federal regulation is also subject to regulation under state law, and any water that is a “water of the United States” under the Clean Water Act is also, by definition, a “water of the state.” However, California’s regulation goes far beyond federal regulation.

Whereas “waters of the United States” includes only surface waters, California’s long-standing definition of “waters of the state,” a definition that is unchanged under the new wetlands policy, includes both surface waters and groundwaters. Therefore, the EPA’s “interpretive statement” — that discharges to groundwaters hydrologically connected to surface waters are not subject to federal regulation — will not affect the state’s regulation of discharges to not only hydrologically-connected groundwaters, but discharges to even nonhydrologically-connected groundwaters.

In addition to its more expansive definition of “waters,” California, under this policy, is further breaking with federal regulation by establishing a broader definition of "wetland." As a general matter, California will continue to use the U.S. Army Corps of Engineers’ 1987 Wetland Delineation Manual.

According to the manual, an area is a wetland if demonstrates the following wetland criteria:

  • It has continuous or recurrent saturation of the upper substrate caused by groundwater, shallow surface water or both;

  • The duration of the saturation causes anaerobic conditions in the upper substrate; and

  • The vegetation in the area is dominated by hydrophytes or lacks vegetation.

For an area to be a wetland and subject to federal Clean Water Act regulation, it also must demonstrate a prevalence of wetland vegetation under normal circumstances. The SWRCB determined that this limitation would not be appropriate, in view of there being substantial portions of the state that are arid and may not necessarily support vegetation. Therefore, the state wetlands policy provides that an area need not support vegetation to be considered a “wetland” subject to state regulation, assuming other qualifying criteria are present.

However, to the extent the area does support vegetation, that vegetation must be wetland vegetation. Otherwise, vegetated and nonvegetated wetlands will be regulated similarly. As a result, many features will, under state law, be considered wetlands, where those areas would not be considered wetlands under federal regulations.

There are three categories of wetlands that will be regulated under state policy: natural wetlands, wetlands created by modification of a surface water of the state, and artificial wetlands that meet one of four specified criteria. With regard to “wetlands created by modification of a surface water,” such a wetland will be regulated only if the surface water that was modified to become a wetland was a water of the state at the time of modification.

If the surface water had been eliminated prior to the creation of the wetland, that wetland would not be subject to regulation under that element. Nor can a wetland become a water of the state where it exists solely as a result of diversion of water from another water of the state.

The more complicated category is artificial wetlands. An artificial wetland will be considered a water of the state if it satisfies one of the following four criteria:

  • The wetland is being used as compensatory mitigation for impacts to other waters of the state;

  • The wetland is expressly identified in a water quality control plan as a wetland or water or the state;

  • The wetland has resulted from human activity and “has become a relatively permanent part of the natural landscape” (but this criterion will not apply where the feature is subject to ongoing operation and maintenance); or

  • The artificial wetland is greater than one acre.

The “greater than one acre” criterion for artificial wetlands was subject to many comments from industrial and agricultural stakeholders, centering on exceptions that would track historical (and federal) exceptions to regulation, such as prior converted croplands. Ultimately, the SWRCB settled on a number of exceptions to the one-acre criterion.

Those exceptions include artificial wetlands constructed and used or maintained primarily for specified purposes, including, among other exceptions, agricultural crop irrigation or stock watering, maximizing groundwater recharge (but not wetlands that have only incidental recharge benefits), industrial or municipal wastewater treatment, detention of stormwater runoff otherwise subject to regulation, active surface mining and flooding of fields for rice growing.

As has been the case prior to the current policy, application procedures for permits for discharge of dredge or fill material to waters of the state generally track the federal permitting procedures promulgated by the Army Corps of Engineers.

What does this mean for those in regulated community? As has always been the case, careful thought needs to be given to whether, and the extent to which, it is necessary to discharge dredged or fill material, or develop a wetland area. Not only will that trigger federal and state permitting requirements — including a detailed alternatives analysis, in the case of individual permit requirements — but to the extent that the action may affect a listed species under the federal or state Endangered Species Acts, agency consultation requirements to assess and mitigate for those impacts can significantly affect the project, both in substance and in timing. If the wetland can be avoided, that will typically be the better course. Moreover, it is important to know what is required before putting a shovel in the ground, or taking any other action that could subject one to enforcement actions under state law. And if a new administration occupies the White House on Jan. 20, 2021 — or if courts strike down the Trump administration’s efforts to rewrite Clean Water Act regulation — there could be significant risk of stricter federal enforcement as well. Working with a wetlands biologist and a legal team well versed in this area of law is imperative — an after-the-fact assessment will not do much good.

Joshua A. Bloom is a partner at Environmental General Counsel LLP.

This article is for general information purposes and is not intended to be and should not be taken as legal advice.