First, only the United States Army Corps of Engineers can make an enforceable “jurisdictional” determination. Second, the scope of jurisdictional “waters of the United States” keeps changing. The question of whether a 404 permit is required can be an extremely important one for any mining operation. Fines, penalties, and even the ability to operate are at stake if mining activities proceed into jurisdictional water without the required approval.

Since adoption of the CWA in 1972, the scope of 404 jurisdiction continuously expanded through United States Environmental Protection Agency (EPA) enforcement action and Corps delineation, until the Supreme Court found that the Corps had gone too far in Solid Waste Agency of Northern Cook County v. U.S. Army Corps Engineers, 531 U.S. 159 (2001) (SWANCC). The Supreme Court held that isolated intrastate wetlands are not jurisdictional and are not subject to 404 permit requirements, if the only connection to a waterway is the presence of migratory birds. Questions remained, resulting in a second Supreme Court decision on 404 jurisdiction, Rapanos v. United States, 547 U.S. 715 (2006), which requires a “significant nexus” with a navigable water for a water body to be jurisdictional. The EPA and the Corps assert the need to “clarify” and have proposed “Guidance Regarding Identification of Waters Protected by the Clean Water Act,” 76 Fed. Reg. 24,479 (May 2, 2011) (“Guidance”).

The Guidance will apply to all CWA programs referring to “waters of the United States.” It will include as “jurisdictional” traditional navigable waters, interstate waters, wetlands adjacent to traditional navigable or interstate waters, non-navigable tributaries to traditional navigable waters, and wetlands that directly abut relatively permanent waters. It could also include tributaries to traditional navigable waters or interstate waters, wetlands adjacent to jurisdictional tributaries to traditional navigable waters or interstate waters, and “other waters.” The EPA defines “other waters” as intrastate, non-navigable waters that lack a permanent surface connection to other waterways and that may or may not be physically proximate to jurisdictional waters. The EPA could include any such “other waters” as “jurisdictional” though they have been non-jurisdictional since SWANCC. In sum, the Guidance greatly expands the definition of “waters of the United States,” and the regulatory authority of both the Corps and the EPA.

The Guidance reduces categorically excluded waters and increases inclusion of ephemeral streams. All wetlands in a watershed can be “aggregated” to determine whether any are jurisdictional. Some waters are “generally” not covered—artificial reflecting pools, swimming pools created by excavation or diking, water-filled depressions created by excavation, erosion features, and certain ditches. However, “generally” is not defined; thus none of the preceding list is definitely excluded. “Seasonal flow” is redefined from the current three-month limit to an “ecoregion” determination. In short, the Guidance creates “jurisdiction by default,” effectively shifting the burden to the regulated community to prove that particular waters are not jurisdictional. Of concern to many states, the proposed regulatory expansion also has significant implications for their CWA responsibilities and costs.

Not surprisingly, under its cost-benefit analysis the EPA has determined there are greater benefits than costs, but acknowledges that the majority of costs are borne by the regulated community. The EPA estimates the total annual cost of obtaining 404 permits could increase by a range of $3.1 million to $11.3 million. Further, the EPA projects the increase in mitigation costs will be about 4% and range from $2.1 to $3.9 billion.

. A total of 41 Senators urged the EPA and the Corps to abandon the Guidance in a June 30, 2011 letter (see Their concerns include: 1) elevation of interstate “other waters” to the same level as “navigable waters;” 2) expansion of the “significant nexus” test from wetlands and certain tributaries to all tributaries, wetlands, and proximate other waters in the same watershed; 3) aggregation of waters; 4) determining “significant nexus” based upon a water’s functions; and 5) new definitions of ditches that will sweep previously non-jurisdictional ditches into the program.

With similar concerns, the House Appropriations Committee approved the Corps FY 2012 funding bill, but prohibited funds to implement the Guidance. The senators noted “clarification” of this type should be done by regulation. Guidance should only clarify how an agency will interpret a law or convey administrative procedures to its offices. Whereas, a regulation is legally binding and subject to public notice and comment. The tactic of using guidance to change law is not new (the EPA recently issued another CWA guidance for a water pollution conductivity standard, with directions to reject dredge and fill permits for mining operations that do not meet the standard ), but is subject to legal challenge. (See Natural Resources Defense Council v. EPA, D.C. Cir., No. 10-1056 (7/1/11), where the D.C. Circuit held the EPA violated the APA by using guidance to modify Clean Air Act terms.)

In conclusion, what are “waters of the United States,” subject to CWA 404 permitting is a complex question. The Guidance proposed by the EPA and the Corps on May 2, 2011, does nothing to simplify that determination. To the contrary, it will complicate the 404 program and greatly expand permit requirements. The EPA’s own estimates show the Guidance could cost the regulated community $2,103,100,000 to $3,911,300,000. The Guidance has not been issued in final, comments are still under consideration. If your company has not been closely following the Guidance, it should start now.

McIntosh is a partner with Patton Boggs LLP. She can be reached at 303-894-6127 or by e-mail at