Undeterred by California’s budgetary and economic woes, the State Water Resources Control Board continues its efforts to develop a new wetland regulatory program, and toward that end it recently released a Preliminary Draft Policy for Wetland Area Protection and Dredge and Fill Permitting. The policy, if adopted, would establish a new regulatory program that would on one hand largely duplicate existing federal, state, and local regulations, yet on the other hand add different rules expanding the reach of state regulation, further restricting activities in wetlands and other wet areas, and complicating the process for obtaining needed permits. The State Board announced that it has released the preliminary draft policy for “informational purposes only” and it expects to formally issue a draft policy, along with an environmental review document, for public comment later this year.

In California, activities in wetlands currently are regulated under federal, state, and local laws, and those proposing activities in wetlands typically must obtain approvals from federal, state, and local agencies. The federal Clean Water Act authorizes the U.S. Army Corps of Engineers and Environmental Protection Agency to regulate “discharges” of “pollutants” (including “dredge and fill material”) into “waters of the United States,” which the agencies define to include “wetlands.” Under section 401 of the Act, the State Board and nine Regional Water Quality Control Boards generally may review, revise, and even veto any projects the Corps permits. Federal agencies proposing to undertake or permit projects must review the environmental effects of those projects, including effects on wetlands, under the National Environmental Policy Act (“NEPA”). Apart from the federal Clean Water Act, the state Porter-Cologne Water Quality Control Act authorizes the State and Regional Boards to regulate “discharges” of “waste” (which includes nearly any type of material, according to the Boards) into “waters of the State” (which includes “wetlands,” according to the Boards). Other state agencies, particularly the Department of Fish and Game, California Coastal Commission, San Francisco Bay Conservation and Development Commission, and Tahoe Regional Planning Agency, regulate wetlands of certain types or within certain regions. Cities and counties enforce local laws (general plans, zoning ordinances, subdivision, grading, building regulations, etc.) governing activities in wetlands. State and local agencies proposing to undertake or approve projects generally must first review the projects’ environmental effects, including effects on wetlands, and avoid or mitigate those effects in keeping with the California Environmental Quality Act (“CEQA”).

The U.S. Supreme Court clarified in Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001) and Rapanos v. United States and Carabell v. U.S. Army Corps of Engineers, 547 U.S. 715 (2006) that while the Clean Water Act reaches nearly all waters and wetlands in the nation, it stops short of regulating all of them. After those decisions, waters and wetlands lacking a “significant nexus” to interstate or traditional navigable waters continued to be regulated by pertinent state and local agencies, but not by the Corps.

Deeming that result a “gap” in regulatory protection, the State Board directed its staff in 2008 to develop a draft wetland policy ostensibly to fill it. That initial direction and much study since led to the Board’s release of its preliminary draft policy, which presents a new regulatory program consisting of four primary components: (1) a new wetland definition, (2) a new wetland delineation method, (3) a new method of monitoring and assessing wetlands, and (4) new rules governing permits to fill waters and wetlands. The stated purposes of the policy are to (1) “[b]ring a uniform regulatory approach between the California Water Boards, other agencies involved in aquatic resource protection and the federal [Clean Water Act] section 404 program . . .”, (2) “[a]chieve no overall net loss and a long-term net gain in the quantity, quality and diversity of waters of the state including wetlands,” and (3) “[p]rovide a common framework for wetland and riparian area monitoring and assessment to inform regulatory decisions, and ensure consistency with statewide environmental reporting programs.” The Board’s staff has assured that the Board does not want to expand its jurisdiction or increase the regulatory burden.

The Board had earlier called for developing a wetland definition based on the Corps and EPA definition. Its preliminary draft policy, though, appears to veer from that path. The federal agencies have long used three factors—hydrology, soils, and vegetation—to define “wetlands” as “areas that are inundated or saturated by surface or ground water at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions.” (33 C.F.R. § 328.3(b).) They generally regard “normal circumstances” to be current conditions, including the effects of lawful activities, e.g., drainage, farming, and the like. The State Board suggests defining “wetland” as any area “if, under normal circumstances, it (1) is continuously or recurrently inundated with shallow water or saturated within the upper substrate; (2) has anaerobic conditions within the upper substrate caused by such hydrology; and (3) either lacks vegetation or the vegetation is dominated by hydrophytes.” The Board regards “normal circumstances” as the conditions present in the absence of “altered circumstances,” which means whenever the hydrology, substrate, or vegetation has been “sufficiently altered by recent human activities or natural processes to preclude wetland conditions.” The Corps and EPA also exclude “prior converted croplands” (i.e., former wetlands that were drained or otherwise dried and cropped before 1985 so they no longer exhibit wetland values) from their definition of “wetlands.” The Board, though, treats such areas as wetlands and thus within its regulatory reach, and says instead that some activities in those areas are excluded from regulation. By substituting “substrate” for “soil,” eliminating the need for vegetation, changing the meaning of “normal circumstances,” and including prior converted cropland in its definition, the Board would label more of the landscape as “wetland” than do the Corps and EPA.

The Board’s draft policy says that wetlands will be delineated on the ground using the Corps’ methods with “adjustments” corresponding to the differences introduced by the new state definition. These differences, of course, may require those undertaking to identify and map wetlands to do so twice, once using the Corps’ definition and once using the Board’s. The draft policy also anticipates development of a new three-level method of monitoring and assessing wetlands entailing use of map-based inventories, rapid assessment of a site’s general conditions, and intensive assessment of a site’s specific conditions.

The Board lists certain activities (including normal farming activities, maintenance, construction or maintenance of farm ponds and irrigation ditches and maintenance (but not construction) of drainage ditches) akin to those the Corps excludes from regulation under its program and says that these activities “are not subject to” its new rules, but nonetheless maintains that this “exclusion . . . does not prohibit the [State or Regional Boards] from issuing or waiving WDRs [i.e., permits] for the activity.”

The Board presents a new set of detailed rules establishing standards and procedures for regulating activities in wetlands. Among the standards is a restriction against permitting any project “unless it is the least-environmentally damaging practicable alternative (LEDPA).” While that terminology has long been used in the Corps’ regulatory program, the State Board gives it new and different meaning. Under Guidelines issued by the EPA, the Corps generally is prohibited from issuing a permit to fill wetlands if there is a practicable alternative to a proposed project that would have less adverse impact on the aquatic ecosystem, as long as the alternative does not have other significant adverse environmental consequences. As implemented by the Corps, the practicable-alternatives test is a tough nut to crack. An applicant must show why the “overall project purpose,” e.g., build a viable upscale residential community with an associated regulation golf course in the northern Sacramento County area, cannot be accomplished by moving the project to an entirely different site, whether owned by the applicant or not, or by reconfiguring the project on site to avoid wetlands.

The Board would analyze alternatives differently in two fundamental respects. First, the Board defines “overall project purpose” quite differently than do the Corps and EPA. According to the Board, it means “the fundamental, essential, irreducible purpose of the project with consideration to feasible cost, existing technology, and logistics.” By so reducing the project purpose to, for instance, housing or commercial buildings or the like, the Board naturally expands the universe of possible alternatives—perhaps more than realistically can be analyzed in a permit proceeding—and, in the process, effectively dispenses with much of the general plan and zoning decisions of the pertinent city or county and the land planning decisions of the project proponent. The Corps and EPA use much the same definition, which they dub “basic project purpose,” only to determine whether a project is water dependent and, thus, whether certain presumptions set forth in their Guidelines are triggered. (The Board’s policy includes similar presumptions, but applies them to all projects, regardless of whether they are water dependent, so the Board does not speak of a “basic” project purpose.) In the 1980s, the federal agencies considered using the basic project purpose also to analyze alternatives, and rejected the idea as unwise and unworkable. Second, while the Corps recognizes that the existence of alternatives that would avoid impacts to wetlands, but cause significant impacts to other resources (e.g., oak forests or endangered species) is no reason to disapprove a project, the Board says nothing to that effect in its draft policy.

The Board sets forth detailed requirements for mitigation of impacts to wetlands, warns that it “may require a greater amount of compensatory mitigation than other public agencies,” and states that in determining the “sufficiency” of mitigation, it will consider the “goals” of (1) “[a]chievement of no net loss and a long-term net gain in the quality and quantity of aquatic resources,” (2) “[r]estoration and achievement of past, present, and probable future beneficial uses in the project area and/or project watershed area, based on an analysis of current and historic conditions,” and (3) “[o]ther requirements and goals established in local watershed plans or planning or Policy instruments adopted by public agencies.” Unmentioned by the Board is the constitutional standard established by the U.S. Supreme Court in Nollan v. Cal. Coastal Comm’n, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S. 374 (1994) that, notwithstanding any goals or policies an agency may wish to further, it can require a project proponent to provide mitigation only in order to mitigate an impact caused by the proposed project and only to an extent “roughly proportional” to that impact.

Complicating an assessment of a project’s impacts is a provision in the draft policy that “[a]ny impact located within 150 feet of a water of the state is presumed to affect the water” and “[i]mpacts further than 150 feet may also be considered by the permitting authority if there is potential for water quality degradation.” The law generally calls on agencies actually to find, on the basis of substantial evidence, that projects cause adverse impacts before they require project proponents to mitigate those impacts. How the Board squares presuming impacts with that principle, it does not say.

Further complicating a project proponent’s task of mitigating a project’s impacts is the Board’s expressed preference for “on-site and in-kind” mitigation. Only “where on-site compensatory mitigation is unavailable, not appropriate ecologically, or insufficient” may a project proponent mitigate a project’s impacts by purchasing credits from a mitigation bank that has already created or enhanced wetlands to serve as compensatory mitigation. The Board’s preference conflicts with that of the Corps and EPA. In their compensatory mitigation rule, they prefer use of mitigation banks and withhold resort to on-site mitigation unless it is the only option.

While most in the regulated community see no need to add another regulatory program to the array of programs already protecting wetlands, many may appreciate that at least the Board’s stated aim is to foster consistency among federal and state agencies and not to expand the scope of regulation. They may well be concerned, though, that the Board’s preliminary draft policy, in many respects, misses that mark.

 
David Ivester
Briscoe Ivester & Bazel LLP
155 Sansome Street, 7th Floor
San Francisco, CA 94104
Telephone: (415) 402-2700
Fax: (415) 398-5630

Disclaimer: In our Newsletters and Bulletins, Briscoe Ivester & Bazel LLP intends to present general information to the public and does not intend to provide legal advice pertaining to a particular situation.

 

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