On Tuesday, April 2, 2019, the California State Water Resources Control Board (“State Water Board”) adopted its proposed State Wetland Definition and Procedures for Discharges of Dredge or Fill Material to Waters of the State (“Procedures”). The Procedures were adopted after a lengthy stakeholder process and represent an attempt by the State to compromise among the non-governmental organization (“NGO”) community and the regulated community, which span a broad array of stakeholders, including developers, agriculture, municipalities, water and flood control districts, and industry. The Procedures consist of: (1) a state-wide definition of wetlands; (2) a framework for determining whether a feature meeting the wetland definition is a water of the state (“Jurisdictional Framework”), (3) wetland delineation procedures, and (4) procedures for application submittal and the review and approval of water quality certifications, waste discharge requirements (“WDRs”), and waivers of WDRs for dredge or fill activities (collectively referred to as “Orders”). Among other ramifications, the new Procedures largely duplicate (and in some respects are inconsistent with) federal procedures, but add a significant new layer to the already byzantine regulatory process for permitting projects that involve fill of federal and state waters and wetlands.
The State Water Board’s adoption of the Procedures concludes a years-long process that began in 2008 with the adoption of State Water Board Resolution 2008-0026. On January 3, 2019, the State Water Board released a Final Draft Notice of the Procedures, which spurred a concentrated effort by all stakeholders to obtain last minute changes, resulting in three workshops and the release of two additional versions of the Procedures (released on February 22, and March 22, 2019). The timing of the Draft Procedures’ release is largely viewed as a reaction to the release of the revised federal Waters of the United States (“WOTUS”) definition in December 2018 (published in the Federal Register on February 14, 2019), which the State Water Board believes could curtail regulatory protections for waters and wetlands handled under the federal Clean Water Act section 404 program. The Procedures will be incorporated as amendments to state water quality control plans and are intended to supersede any conflicting provisions in the Regional Water Quality Control Boards’ (“Regional Boards”) water quality control plans and will apply to the State and Regional Water Boards (collectively, “Water Boards”).
At the time of the Procedures’ adoption, California did not have a state-wide definition of what constitutes “wetlands.” However, some Regional Boards have adopted a wetland definition, resulting in a patchwork of definitions applied on a region-by-region basis.
The Procedures provide that an area qualifies as a wetland (and therefore, a “waters of the State”) if it meets three criteria under “normal circumstances”: (1) the area has continuous or recurrent saturation of the upper substrate caused by groundwater, or shallow surface water, or both; (2) the duration of such saturation is sufficient to cause anaerobic conditions in the upper substrate; and (3) the area’s vegetation is dominated by hydrophytes or the area lacks vegetation. Normal circumstances are defined as:
“the soil and hydrologic conditions that are normally present, without regard to whether the vegetation has been removed. The determination of whether normal circumstances exist in a disturbed area involves an evaluation of the extent and relative permanence of the physical alteration of wetland hydrology and hydrophytic vegetation, and consideration of the purpose and cause of the physical alternations to hydrology and vegetation.”
While the Procedures’ wetland definition is somewhat consistent with U.S. Army Corps of Engineers (“Corps”) wetland delineation criteria, the State’s definition differs in one important respect. To account for water features in arid portions of California, the definition provides that an area may be a wetland even if it does not support vegetation. However, where vegetation is present, the Procedures require that the vegetation be wetland vegetation.
Regardless of whether a particular water feature meets the wetland definition, that feature may be exempt from delineation as a “waters of the state” under Water Board jurisdiction. Exemptions are determined by applying the Procedures’ Jurisdictional Framework.
Where a water feature meets the Procedures’ definition of a wetland, the burden is on the applicant to demonstrate that the wetland is not a waters of the state. To assist applicants in making this determination, the Procedures set forth a list of aquatic features considered to be waters of the state, including: (1) all natural wetlands; (2) wetlands created by modification of a surface water of the state; and (3) wetlands that meet current or historic definitions of WOTUS. This last category of waters is particularly controversial given that it encompasses the 2015 WOTUS definition, which has been tied up in the federal courts since its adoption, and current or historic definitions could potentially conflict.
Additionally, the Procedures consider certain artificial wetlands to be waters of the state if they meet the following criteria: (1) the wetland was created as compensatory mitigation for impacts to other waters of the state; (2) the feature is identified in a water quality control plan as a waters of the state; (3) as a result of historic human activity, the feature has become a relatively permanent part of the natural landscape and is not subject to ongoing maintenance; or (4) the wetland is greater than or equal to one acre in size. Notably, the Procedures exempt manmade wetland features larger than one acre in size, if constructed for certain purposes, including, (1) treatment, storage and distribution of recycled water; (2) detention, infiltration or treatment of storm water runoff; (3) active surface mining, and (3) agricultural crop irrigation or stock water, among others. In all, there are ten (10) exceptions. Projects planned in several of these categories of waters are also not subject to the Procedures’ burdensome application process.
Wetland Delineation Procedures
The Procedures’ wetland delineation procedures incorporate delineation manuals and supplements published by the Corps. The Procedures direct the Water Boards to rely on delineations from a final aquatic resource report verified by the Corps where WOTUS are concerned. However, where federal jurisdiction does not extend to a water feature (e.g., isolated waters and some non-vegetated wetlands), the Procedures direct applicants to use the methods described in the Corps’1987 Wetlands Delineation Manual and its supplements. In other words, the Corps’ delineation materials will be used to determine whether a feature meets the wetland definition set forth in the Procedures for both WOTUS and waters of the state.
Procedures for Application, Review and Approval of Dredge or Fill Activities
The Procedures further establish application and review procedures for the discharge of dredged or fill material to waters of the state, which includes both federal and non-federal waters of the state, wetlands and other features. In doing so, the Procedures supplement existing application submittal and review requirements for the regulation of discharges of dredged or fill material into all waters of the state, and establish procedures for the Water Boards’ review and approval of individual Orders for these discharges.
The Procedures set forth two lists of materials that must be in included in an application for an individual Order. The first list includes materials required for any application to be considered complete, while the second list includes items that the Water Boards may require from an applicant on a case-by-case basis depending on project characteristics. Discharges of dredged and fill material regulated under General Orders are not subject to these requirements. Existing individual Orders will only be subject to the Procedures upon renewal or if the applicant proposes “material changes in the character, location, or volume of existing discharges.” Further, the Procedures provide Regional Boards with the flexibility to amend existing individual Orders “solely for the purpose of extending the expiration date without requiring a new application,” which would be subject to the Procedures. It will be important, however, for facilities to re-assess whether WDRs are needed for activities that may not possess WDRs for certain activities.
The most controversial feature of the Procedures is the expansion of the scope of projects subject to the alternatives analysis requirement, which subjects the applicant to a process requiring analysis of project alternatives to ensure that the selected option is the Least Environmentally Damaging Practicable Alternative (“LEDPA”). The alternatives analysis can increase project development costs by hundreds of thousands of dollars and dramatically extend timelines. The Water Board adopted several exceptions to the requirement, but some believe the exceptions do not go far enough, and could jeopardize rural areas’ receipt of SB 1 funding if they cannot meet the Governor’s new call for expedited affordable housing development.
Compensatory Mitigation-Specific Requirements
Importantly, the Procedures’ secondary list of application materials includes specific requirements that apply where compensatory mitigation is required by a permitting authority. Compensatory mitigation is defined as “the restoration (re-establishment or rehabilitation), establishment (creation), enhancement, and/or in certain circumstances preservation of aquatic resources for the purposes of offsetting unavoidable adverse impacts which remain after all appropriate and practicable avoidance and minimization has been achieved.”
All applications for discharge of dredge and fill materials related to compensatory mitigation projects, including those where the applicant intended to fulfill its compensatory mitigation obligation by securing credits from mitigation banks or in-lieu fee programs, must include: (1) a watershed profile for evaluation of both the proposed dredge and fill and compensatory mitigation project; (2) an assessment of the overall condition of the aquatic resources proposed to be impacted by the project; and (3) a description of how the project impacts and compensatory mitigation would not cause “a net loss of the overall abundance, diversity, and condition of aquatic resources, based on the watershed profile.”
The Procedures require that applicants submit a number of other materials where a permittee is not fulfilling its compensatory mitigation obligation by securing credits from mitigation banks or in-lieu fee programs. These application requirements do not apply to Ecological Restoration and Enhancement Projects.
The content of the Procedures is largely forecasted to provide the same or similar protections to wetlands as current federal dredge and fill permitting requirements under Clean Water Act Section 404 (also known as “404 permitting”) and the accompanying Clean Water Act Section 401 water quality certification. However, implementation of the Procedures is anticipated to create additional or duplicative work and expense as well as extend timelines for new projects due to the new expanded alternative analysis and mitigation requirements. The Procedures will become effective nine months after approval by the Office of Administrative Law (“OAL”). State Water Board staff forecasted the approvals would come in approximately three months, giving projects a one year window to submit applications to the Water Boards without being subject to the new and burdensome requirements. However, practitioners should note that the State Water Board anticipated industry would attempt to submit projects in advance of the effective date, and warned that any application which Water Board staff finds to be “so obviously deficient that it is clear that it was submitted prematurely to avoid having to comply with the Procedures,” would be denied without prejudice, allowing for resubmission of the application in accordance with the Procedures. Any applicant submitting an application over the next several months would be well served to ensure completeness and sufficiency of its application. Additional updates will be posted as the new program becomes effective and takes further shape.