When that perfect piece of property has a river (or a stream) running through it, the landowner must obtain an environmental permit before development can begin. Even standard development activities, such as the installation of storm pipe, waterlines, and roadway construction, oftentimes require an environmental permit. While the need to protect our waterways, greenspaces, and natural resources is indisputable, the process to obtain an environmental permit can be lengthy and cost prohibitive. Potential buyers should consider these hurdles before closing any deal.
The Environmental Permitting Process
A land developer is required to have an official with the US Army Corp. of Engineers (“USACE”) inspect a site to ensure that no Waters of the United States (“WOTUS”) are being impacted by the proposed development. If the USACE determines that waterways will be reasonably impacted, then a permit must be obtained from the USACE prior to the commencement of development activities that affect WOTUS. As part of the permitting process, substantial costs in the form of mitigation credits must be purchased from a local mitigation bank to offset the environmental impact of the proposed development. Mitigation credits are used to preserve land in a conservation area. The USACE has sole discretion to determine whether a gully is jurisdictional, and whether mitigation must be purchased to compensate for the proposed impacts. Further complicating things is the time it takes to obtain a USACE permit. Unfortunately, there is no timeline for permitting, and no cap on how much credits can cost.
The Legislation
The Clean Water Act (CWA) governs pollution control and water quality of the nation’s waterways. The CWA provides federal jurisdiction over “navigable waterways” or WOTUS. The USACE regulates the discharge of dredged or fill material into all WOTUS. The CWA does not define navigable waterways; rather, that authority resides with the Environmental Protection Agency (EPA) and the USACE.
The definition of navigable waterways has been altered over the decades. On several occasions, the Supreme Court explored the term WOTUS without clarifying the definition. As a result, the phrase “significant nexus”, used in the Court’s 2006 ruling in Rapanos v. United States, has become the de facto standard by which determinations were made. For
the decade to follow, the USACE’s position was that a water or wetland must possess a “significant nexus” to waters that are or were navigable. Each USACE field office uses its own determination of “significant nexus” leading to inconsistency. For example, a stream classified as jurisdictional by one field office may not be classified as jurisdictional by another field office.
WOTUS Classifications and Recent Changes
As it pertains to streams, the USACE categorizes navigable waterways as perennial, intermittent, or ephemeral. A perennial stream is a stream that has flowing water year-round during a typical year. An intermittent stream is a stream that carries water most of the time, but that ceases to flow occasionally or seasonally. An ephemeral stream is a stream that flows only briefly during and following a period of rainfall in the immediate vicinity.
A point of contention has revolved around the USACE’s assertion that ephemeral streams are defined as WOTUS. Indeed, under the Trump administration, the “significant nexus” standard was abandoned in favor of a rule that narrowed navigable waterways to perennial and intermittent streams, and the core tributary systems that provide flow into them. The final rule clearly defined that ephemeral streams, swales, gullies, rills, and pools were not WOTUS.
The Biden Administration has reverted to the pre-Trump era of “significant nexus” to determine whether ephemeral streams and wetlands adjacent to more traditional navigable waterways are jurisdictional. The Supreme Court may, once again, have the final say with its expected ruling this year in Sackett v. EPA, a case which centers on the question of how regulators should define WOTUS. Depending on the outcome of that case, the Biden Administration’s latest actions may be altogether moot. Regardless, for any near-term projects potentially impacting jurisdictional streams or wetlands, it’s worth staying tuned to the anticipated showdown between the Supreme Court and the Biden Administration over jurisdictional determinations.