Wetland Regulations—Moving towards State Control

Recent news accounts on changes in the federal definition of “Waters of the United States” (WOTUS) have been matched with the California State Water Resources Control Board’s announcement that a new State Wetland Policy will be in effect starting on May 28, 2020.   These changes reflect the shifting dynamic in environmental regulation—at least temporarily—under the Trump administration.   Unlike California’s reaction to maintain the status quo under other regulatory rollbacks, the State Wetland Policy “ups the ante” for homebuilders, farmers, and public transit agencies.   While lawsuits work their way through the courts, there will be plenty of uncertainty on where this all lands so being proactive is a necessity.

First, the Environmental Protection Agency (EPA) announcement that it will formally withdraw the 2015 WOTUS rule effective in November 2019 and move back to the 1986 defintion has little substantial effect on California projects.  The 2015 WOTUS rule was only in effect in California for a few months in 2015 and most recently for the past 14 months.  While it did expand the jurisdictional definitions of tributary, adjacent, and significant nexus; it only applied to Approved Jurisdictional Determinations (AJD).   Most Districts moved towards providing Preliminary Jurisdictional Determinations based on Aquatic Resource Delineations that included all wetland and stream features regardless of their possible exclusion under Supreme Court cases (SWANCC and Rapanos).  Many applicants concurred with this approach as California’s Regional Water Quality Control Boards (RWQCB) claimed jurisdiction over these excluded features as “waters of the State” (WOTS) and it was just easier to process 401 Certifications when federal and state jurisdiction coincided.

The 1986 WOTUS definition will be applied by the Corps using guidance developed jointly with the EPA in 2007 (Rapanos guidance).  The guidance document was accompanied by an Approved Jurisdictional Determination Form that presumably allowed wetlands and streams without significant nexus to be excluded.  In practice, the Districts in California rarely found that such features lacked a significant nexus and most often only applied the “isolated” exclusion.  It seemed pointless to many applicants to go through the often long and laborious process of getting an AJD.

The next step by the EPA and Corps will be a new WOTUS definition likely to come in early 2020.  It will definitely be a retreat from the 1986 definition in that many wetlands that are currently considered adjacent and many tributaries with only ephemeral flows will no longer be WOTUS.  As with most Trump administration proposals, it will likely face lawsuits and an injunction put in place until it reaches the Supreme Court where a final decision will be made—most likely several years from now.

However, the State Water Resources Control Board (Board) felt that the changes being proposed at the federal level required a strong reaction.  Reviving its long delayed State Wetland Policy, the Board quickly moved ahead with its proposal to modify the definition of wetlands, require more substantial justification to filling wetlands, and increase mitigation requirements.  Despite strong objections from the affected permittees such as homebuilders, farmers, and water users; the Board adopted the new policy in April 2019 and recently announced the effective date of May 2020.

Given this environment, what should applicants do to prepare for this uncertainty?  Below is a list of practice tips:

1. When investigating properties for purchase, due diligence should include using the State’s wetland definition (hydrology and hydric soils with or without wetland vegetation) compared to the federal definition that requires wetland vegetation.  For projects in the Coastal Zone, use the Coastal Commission’s one parameter approach (any of the three).  Evaluate your proposed project based on the most restrictive of the definitions.

2. If you are seeking a jurisdictional determination, it is probably best to seek the PJD.  It can always be “upgraded” to an AJD depending upon the new WOTUS definition, but is probably not worth the effort and cost at this point in seeking an AJD.   The PJD can also be used for the State wetland determination in most cases and provides Water Board staff with the useful documentation showing the Corps has reviewed and approved the delineation.

3. The State Wetland Policy includes a number of exemptions under the artificial wetland category.  Evaluate whether or not any of the wetlands meet these exemptions through documentation and historical aerial imagery.  It will be necessary to have strong support with your submittal. Unlike the federal process, there is no appeal process under the WOTS determination.

4. If you currently have a property and project plan ready, consider applying for your Corps and Regional Water Quality Control Board permits prior to May 28, 2020.  It is important to have as much of a “complete application” as possible because the Board staff have discretion to decide whether or not it will be grandfathered under the current regulations even if it is approved after the effective date of the new policy.  It may not be necessary to have CEQA complete but the best possible outcome will be if CEQA is in circulation and will be certified in the near future.

5. Nationwide Permits are preferred at the federal level given their NEPA compliance and lower level of scrutiny in terms of alternatives.  However, the new State Policy lowers the threshold for alternatives analysis to 0.1 acre.  While there are various tiers, the additional documentation will take time to prepare and will involve a variety of consultants.  It will become more important to consider avoidance—even if it means losing lots or require bridges.  Cost analysis may show that avoidance is less expensive than the cost of permitting, mitigation, conservation easements, and other expenses associated with project delay.

6. Look at mitigation opportunities very early in the process if wetland fill is unavoidable.  Mitigation banks are spotty and the State Wetland Policy will seek to limit projects to within the approved Service Areas.  Seek advice on pending banks and determine whether purchasing refundable credits prior to your project approval makes sense.  Coordinate with other builders or applicants at meetings to see if there are joint projects that can be undertaken.  Early planning is essential if you want to have your project meet its timelines.

7. Stay alert to how the new State Wetland Policy is being implemented.  Given its complexity, it is likely to be a “learning experience” for the regulators and applicants.  The Board prepared extensive comments on what the Policy was supposed to do and how it would be implemented (over 500 pages) so it is worthwhile to be prepared to defend your approaches with that documentation in mind.

WRA, Inc. is a diverse and experienced environmental consultant and leader in wetland regulatory issues.   The firm employs a large variety of specialists in delineation, permitting, and mitigation that has over 40 years of experience working throughout California.   Please contact Justin Semion with questions on this and other regulatory issues.