Ohio Environmental Law Blog : Ohio Environmental Lawyer & Attorney : Joseph Koncelik : Frantz Ward Law Firm : Environmental Regulation, Land Use, Compliance : Cleveland, Ohio

Another aspect of Governor Kasich's controversial proposed legislation- Senate Bill 315- is to provide the legislative authority for Ohio EPA to take over Section 404 Clean Water Act permitting from the Army Corps of Engineers.  Section 404 permits are needed prior to impacts to streams or wetlands within federal jurisdiction. 

The bill itself doesn't really do that much.  It simply provides the authority to the Director of Ohio EPA to seek approval from U.S. EPA to assume responsibility for administering the Section 404 permitting program.  The real important issues will be covered in the approval request itself. 

As discussed below, the biggest issue Ohio EPA faces is to convince U.S. EPA in its request that it has sufficient resources to take over all the Section 404 permitting functions from the Army Corps.

What's good about the proposal

Right now any developer that needs to impact wetlands or streams as part of their development will typically need to obtain two permit approvals.  First, they must obtain a Section 401 Water Quality Certification from Ohio EPA.  Second, if the wetland or stream is considered within federal jurisdiction, the developer must obtain a Section 404 permit from the Army Corps of Engineers. 

The fact two permits will be needed won't change if Ohio takes over the Section 404 program.  However, developers will have the opportunity to go to one regulator to obtain both certifications.  This will hopefully streamline the process. 

Another major complication under the current structure is that Ohio is divided among four different Army Corp Districts- Pittsburgh, Buffalo, Louisville and Huntington.  Each of the Districts has very different ways they process Section 404 permits.  Therefore, another benefit of Ohio taking over the program would be greater consistency. 

Approval Process Will Be Lengthy and Difficult

While there are good reasons for Ohio to take over Section 404 permitting, it will be a very lengthy and difficult process.  First, Ohio EPA will have to show that it has sufficient resources to handle all the duties performed by the Army Corps.  I have heard projections that this could take up to forty (40) additional staff in Ohio EPA wetland section. 

This would be a very substantial increase in staff and the resources will be very difficult to come by.  Unless, Ohio EPA is going to direct fees that are currently being used to support other programs, the Agency would need to seek a fee increase or new fee.  While applicants may like the streamlined process, its unlikely they will want to pay substantially more for it. 

If the Director was going to tap into current fees, such as the solid waste disposal fee, he will have to likely cut other programs.  Also, the solid waste industry may object to use of the disposal fees to pay for significant new staff in program that doesn't directly deal with management of solid waste.

Even if Ohio EPA clears the hurdle of demonstrating sufficient resources, it will still need to prove to U.S. EPA its has the legal authority to carry out the same functions as the Army Corps.  The last time the State of Ohio tried to convince U.S. EPA of something similar it was transfer of the water permitting program (NDPES) for large farms to the Department of Agriculture.  This process has taken years and involves only a transfer between two state agencies. 

While the idea may sound good in theory, Ohio faces a significant uphill climb to make this proposal a reality.

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Ever since Rapanos,  EPA has struggled to consistently apply the "continuous surface connection" and "significant nexus test"  which both emerged from the Supreme Court decision. The two tests are to be used to determine whether wetlands fall within federal jurisdiction.  

To combat these inconsistencies, the Army Corps (ACOE)  has adopted guidance documents to help its staff apply the tests in the field.  The ACOE's first Post-Rapanos guidance document was issued in 2008. The U.S. EPA and ACOE worked together to draft the second Post-Rapanos guidance document in June 2011.  EPA's webpage still identifies the 2011 guidance as "draft."

Federal Courts Limit ACOE and EPA Use of Guidance

National Mining Association v. Lisa Jackson

While EPA and the ACOE continue to try and use guidance to clarify their regulations, the courts have severely limited application of guidance in wetland permit reviews.  In the latest decision, National Mining Association v. Lisa Jackson (Oct. 6, 2011), the U.S. District Court for the District of Columbia struck down policies and procedures adopted by U.S. EPA and the Army Corps of Engineers (Corps) regarding dredge and fill permits under the Clean Water Act.

The guidance involved "mountaintop removal mining," where rock and soil overburden is moved from atop coal seams and placed drainage channels.  In 2009 the EPA, Corps, and the U.S. Department of Interior entered into a memorandum which outlined when EPA would review Section 404 permits that involved surface coal mining and water quality impacts.

EPA argued that the memo clarified the procedural process for reviewing Section 404 permits.  EPA says it had broad discretion to establish procedures in how to implement statutes.

The Court disagreed.  It said that the memo had the legal impact of a rule because it imposed unequivocal requirements.  Also, the Court said the Clean Water Act limits EPA's role to select functions in the Section 404 permit review process, such as issuing a veto of a permit if EPA determines it will have an "unacceptable adverse effect."  The Court said the memo tried to expand EPA permit review role beyond that enumerated in the CWA.  Therefore, the Court said the memo was actually a rule in disguise.

Precon Development Corp., Inc. v. ACOE

The National Mining decision follows the Fourth Circuit decision in Precon Development Corp., Inc. v. Army Corps of Engineers, in which the Court also limited use wetland guidance in permitting decisions.  In Precon, the Court refused to provide the same legal deference to the Corps permitting decision because it had failed to adopt a rule for applying the "significant nexus test." 

In Precon, the Corps had utilized its 2008 Post-Rapanos guidance document in arriving at its decision a wetland was subject to federal jurisdiction.  The Court found that ACOE administrative record supporting its determination was inadequate.  The Court said the ACOE must find some evidence that the wetlands and other water bodies at issue perform functions that are considered "significant" for there to be determined a connection to a navigable water. 

The Court suggested the ACOE jurisdictional review may have been entitled to more deference if the Agency had adopted a rule rather than using guidance in making its decision.  The Court said it would not give as much deference to the ACOE application of the "significant nexus test" in this case because the Agency relied the 2008 Post-Rapanos guidance and not a rule. 

Conclusion

The EPA and ACOE's 2011 Post-Rapanos guidance has still not been finalized.  The public comment period was closed in July. 

Both the National Mining and Precon cases demonstrate that, even if the guidance is finalized, the Agency's jurisdictional determinations will not receive as much deference without a formal rule.  Furthermore, if any aspect of the 2011 guidance is found to impose unequivocal requirements on Section 404 applicants it could be struck down as illegal rulemaking.

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The U.S. Supreme Court issued two landmark decisions, Rapanos and SWANCC, which interpret the extent of federal jurisdiction under the Clean Water Act.  Since these decisions were issued the Army Corps of Engineers as well as Courts have had difficulty applying the tests for determining federal jurisdiction in a consistent and coherent manner.

The Army Corps of Engineers, in its 2008 Rapanos Guidance, set forth its methods for applying the Supreme Court tests for determining federal jurisdiction.   The prior written guidance left open key issues such as:

• Which of the two tests (Kennedy or Scalia) should be utilized- see discussion below
• Since the statutory language at issue, "waters of the United States,"  appears in other sections of the Clean Water Act how do the Supreme Court tests apply to regulatory requirements not directly addressed by the Supreme Court Decision.

The new 2010 Draft Rapanos Guidance (click link for a copy) attempts to address these issues as well as others. 

Perhaps most importantly, the draft guidance announces that its application will greatly expand the number of waters falling within federal jurisdiction- "the Agencies expect that the numbers of waters found to be subject to CWA jurisdiction will increase significantly compared to practices under the 2003 SWANCC guidance and the 2008 Rapanos guidance.”   The Agencies criticize the 2008 Rapanos guidance as interpreting Justice Kennedy's test too narrowly. 

Recap of Supreme Court Tests

The Rapanos decision contains two tests for determining federal jurisdiction.  The plurality test and the significant nexus test created by Justice Kennedy.  A key debate since the Supreme Court decision in the lower courts has been whether one or both tests should be used to determine jurisdiction.  Here is recap of the two tests that emerged from Rapanos:

1. Significant Nexus Test- (Justice Kennedy) Federal Clean Water Act Jurisdiction extends to all waterways that have a "significant nexus" to a navigable water. A "significant nexus" occurs "if the wetlands, either alone or in combination with similarly situated lands in the region, significantly affect the chemical, physical, and biological integrity of other covered waters more readily understood as `navigable
2. Plurality Test- (Just Scalia) The test developed by the plurality has a more narrow focus than the Kennedy test.  Under the test, federal jurisdiction extends to only "relatively permanent, standing or continuously flowing bodies of water"

New 2010 Draft Rapanos Guidance

EPA and the Army Corp's 2010 Rapanos guidance basically states the agencies will apply Justice Kennedy test exclusively, the more expansive of the two tests.  Also, as discussed above, the guidance contains a clear message that the Justice Kennedy test will be applied by the agencies in a more expansive manner than under the 2008 guidance. 

The new guidance also applies to more programs under the Clean Water Act (CWA)  The 2008 Rapanos guidance focused only on the CWA 404 regulations governing placement of fill in wetlands and streams.  The 2010 Draft Guidance is far more expansive, stating it is meant to apply to “whether a water body is subject to any of the programs authorized under the CWA."  Such CWA programs include sections 402 (NPDES), 311 (oil spill), 303 (water quality standards and TMDLs) and 401 (state water quality certification) programs.

Status of Written Guidance

The draft 2010 Guidance was sent to the Office of Management and Budget (OMB) for review. OMB has until March 20, 2011 to conclude its review (90 days from the date it was submitted).  EPA and the Army Corps have also said they will provide a limited opportunity for comment once the draft clears OMB review.

It goes without saying that there is concern with the new guidance.  Industry has already stated it believes it is overly expansive and also incorporates language into Justice Kennedy's test that the Justice never intended. 

Based on the federal agencies attempt to greatly expand federal jurisdiction through release of the guidance, it will almost certainly be challenged. 

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On September 12, 2008, Ohio EPA issued proposed rules that would require a new permit, called a "state water quality permit", for all dredge or fill impacts to non-federally regulated streams.  Ohio may be the first state in the country to try and expand state stream permit requirements in reaction to recent U.S. Supreme Court decisions limiting the coverage of the Clean Water Act.  As discussed below, Ohio's effort will be controversial.

 The Supreme Court in Rapanos and SWANCC limited federal jurisdiction of the nation's waterways based upon its interpretation of the Clean Water Act's trigger for jurisdiction- "Navigable Waters".  In a prior post (Narrowing Federal Jurisdiction Over Waterways), I discussed the pressure mounting on States to react to federal court decisions which leave many waterways unprotected.  

Currently, Ohio EPA only requires a permit (401 permit) to fill or dredge a stream if the stream is under federal jurisdiction.   No permit is required if a stream is considered a state waterway but not a federal waterway.

In the past this approach didn't matter much because the Army Corps had a very expansive interpretation of federal waterways.  However, with the federal authority shrinking based upon a flurry of recent federal court decisions, the State felt it could no longer allow more and more streams to go unprotected.  In reaction, they have proposed a new rule that would require a permit for dredge or fill activity on any Ohio waterway, defined as "waters of the state" under Ohio Revised Code 6111.01(H). 

While Ohio EPA's action is understandable, after reviewing the rule, the Agency may be overcompensating.  The definition of a "water of state" is quite expansive under O.R.C. 6111.01(H), it includes:

 "...all streams, lakes, ponds, marshes, watercourses, waterways, wells, springs, irrigation systems, drainage systems, and other bodies or accumulations of water, surface and underground, natural or artificial, regardless of depth of the strata in which underground water is located, that are situated wholly or partly within, or border upon, this state, or are within its jurisdiction, except those private waters that do not combine or effect a junction with natural surface or underground waters."

I can see the lobbyists now, holding up pictures of a small puddle and arguing that Ohio EPA would require a permit for putting a few shovels of dirt in the hole.  Only problem is there is not much in the rule to refute this claim from a purely legal perspective.  The rule does not contain an exemption from permit requirements for small water bodies or deminimis impacts. 

In my experience the Agency is typically not persuasive when it argue "just trust us" to apply the regulation fairly.  As a result, there is no doubt this rule package will be very controversial. 

Other issues with the package include the following:

1. Same Level Review for All Impacts-  While flawed, Ohio's isolated wetland permit requirements appropriately tries to match the level of review required with the amount/severity of impact.  The proposed rule makes no such effort.  All impacts are required to submit the same amount of technical information as part of their application. Also, all projects will be reviewed within 180 days, expedited review requirements for smaller projects is not included in the rule.
2. Drainage Ditches- Who can clean out a ditch and when has been a controversial issue in Ohio for some time.  The proposed rule would put significant limitations on when ditches can be cleaned out for purposes of flood control or drainage.
3. Clean Fill Materials- The rule limits fill to material "free from toxic contaminants in other than trace quantities."  While this limitation often appears in 401 permits, it has always been vague.  The rule adds no clarity to what is considered "trace quantities."  For instance, arsenic is naturally occurring in most Ohio soils.  Couldn't this limit be viewed to prohibit use of even typical Ohio farm soil as fill?
4. All Permit Applicants Will Have to Wait-  The rule requires every applicant provide a copy of a determination letter from the Army Corps of Engineers as to whether the waters to be impacted are within federal jurisdiction.  Shouldn't some waters be just obviously not within federal jurisdiction?  This requirement is problematic because the Army Corps has been very slow to issue jurisdictional determinations. 
5. Ohio EPA Guidance Elevated to Legal Requirements-  The rule requires all applicants evaluate the quality of streams in accordance with a series of technical guidance developed by Ohio EPA.  While these guidance documents have been used for years in permit reviews, it certainly will be controversial to make them mandatory. 

Comments on the rule package are currently due October 27, 2008.  However, business associations  are already requesting Ohio EPA allow for more extensive public involvement in the development of the rules.

 (Photo: flickr, heather0174)

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