Following a temporary delay in Colorado federal court, the Trump administration’s Navigable Waters Protection Rule (NWPR) will now take effect in Colorado on April 23, 2021.  Under the NWPR, the U.S. Environmental Protection Agency (EPA) and Army Corps of Engineers will no longer require permits for operations affecting certain categories of streams and wetland areas previously subject to the Clean Water Act.  As a result, efforts are now underway in Colorado to establish the state’s own permitting program specifically for “dredge-and-fill” operations which, according to state executive officials, is necessary to create a lawful path forward for such activities that will no longer require federal permits.  Housing developments, flood prevention, stormwater protection, and other commercial development are examples of the types of projects that are impacted.

It is a matter of debate though whether existing state law does, in fact, require this new permitting program in order for dredge-and-fill projects to lawfully operate without federal permits.  Accordingly, dredge-and-fill projects of all types now face uncertainty over whether and how they may lawfully proceed in the interim.  Housing developments, flood prevention, stormwater protection, and other commercial development are examples of the types of projects that are impacted.

Overview: Dredge-and-Fill Operations in Colorado

In contrast to “point-source pollutant” discharges—for example, treated effluent discharged from a wastewater treatment plant—discharges associated with “dredge and fill” typically involve  construction projects (think new residential development) where wetlands or streambeds are disturbed as part of the project.  While the state administers its own point-source discharge permit program under the Clean Water Act, Colorado does not have a state-level dredge-and-fill permitting program.  Instead, like most states, Colorado has historically relied on federal “Section 404 permits”—permits issued by the Army Corps of Engineers under Section 404 of the Clean Water Act—to authorize dredge-and-fill operations in the state.

The NWPR excludes certain types of projects that previously would have required a federal Section 404 permit.  Because Colorado does not have an analogous state-level dredge-and-fill permitting program, the State has identified so-called “gap waters,” meaning waters once-but-no-longer subject to federal Clean Water Act jurisdiction by virtue of the NWPR.  Colorado’s environmental regulatory agency takes the position that once the NWPR is in effect, dredge-and-fill operations affecting these gap waters cannot lawfully proceed without a new state-level program to close this “permitting gap” created by the NWPR.  With efforts to create such a program now underway, the Colorado Department of Public Health and Environment (CDPHE) offers a host of opportunities for public stakeholder inclusion in the process over the next several months.

Current Efforts to Create a State Dredge-and-Fill Permitting Program

The State of Colorado and several others have sued for wholesale invalidation of the NWPR.  Last year, the federal district court in Colorado granted a preliminary injunction halting implementation of the new rule in Colorado during the pendency of the litigation.  However, on March 2, 2021, the 10^th Circuit Court of Appeals reversed that ruling, and the NWPR will now take effect in Colorado on April 23, 2021.

Following removal of the injunction, the CDPHE has renewed efforts, first initiated in 2020, seeking authority to implement and administer a new state-level dredge-and-fill program.  By the CDPHE’s estimate, the “permitting gap” created by the NWPR implicates 25 to 50 percent of Colorado waterways and construction projects.

The CDPHE’s current focus is a draft bill, not yet introduced in the General Assembly and subject to ongoing revision, which would authorize the CDPHE to implement and administer this new permitting program.  The department is holding weekly meetings, virtual and open to the public, every Monday to continue discussing the proposed dredge-and-fill legislation.  These weekly meetings are currently scheduled until June 7.  The agency posts past meeting materials online, and public stakeholders may also submit comments to the agency via email at cdphe.commentswqcd@state.co.us.

The Legal Necessity of the Proposed Permitting Program

Does state law actually prohibit dredge-and-fill operations that no longer require a federal permit?  This is the premise underlying the stance that this new program is necessary in the first place.  The State has taken the position that Colorado’s Water Quality Control Act (WQCA) flatly prohibits discharges of dredged or fill material into gap waters in the absence of federal Section 404 permits, so it must implement its own permitting program in order for dredge-and-fill activities on gap waters to lawfully proceed.  Other parties in the litigation have instead asserted that the while the WQCA does not affirmatively authorize dredge and fill, the statute does not, in fact, prohibit it either—the General Assembly has simply chosen not to regulate dredge-and-fill projects one way or the other, so state law allows them to proceed, deferring to the federal program as it always has.

The WQCA prohibits unpermitted discharges of pollutants into state waters, and the statute includes “dredged spoil, dirt, rock, and sand” in the definition of a pollutant.  It is plausible that the statute prohibits unpermitted dredge-and-fill activities based on that definition.  On the other hand, pollutant-discharge and dredge-and-fill permitting are two entirely separate programs under the Clean Water Act.  The WQCA specifically implements the Clean Water Act’s pollutant-discharge section only, suggesting the WQCA was simply never designed to prohibit or authorize dredge-and-fill activities one way or the other.

This is the Colorado Water Congress’s position, a nonpartisan advocacy organization whose amicus brief to the 10th Circuit stated “[t]he State of Colorado does not now, and never has, regulated dredge and fill activities in Colorado waters.  No provision of the NWPR forces a change in that regime.”  Moreover, there have always been state waters subject to the WQCA but outside the reach of the Clean Water Act, and the State has never before raised an issue—“Only following the agencies’ promulgation of the NWPR has the State reinterpreted the WQCA to prohibit and/or mandate regulation or enforcement actions against discharges of dredge and fill material into state waters that the Corps concludes are outside of its jurisdiction.”  According to the Water Congress’s brief, the State’s position on the necessity of the permitting program expresses a policy stance, not something required as a purely legal matter—nothing in existing state law actually prohibits dredge and fill.

One possible rejoinder is that while the WQCA does not grant the CDPHE authority to authorize dredge-and-fill operations, the statute was designed to provide a backstop by defining “pollutants” broadly enough to prohibit unpermitted dredge-and-fill activities, which would be authorized under Section 404—the statutory scheme simply never envisioned the state would face such drastic curtailment of the federal permitting program upon which it relies.  Another is that while there have indeed always been state waters beyond the reach of the Clean Water Act, those are not the “gap waters” the State is concerned with—that is, waters historically under federal jurisdiction but no longer under the NWPR specifically.

… it is unclear whether the WQCA actually prohibits dredge and fill on gap waters as a legal matter.

In sum, it is unclear whether the WQCA actually prohibits dredge and fill on gap waters as a legal matter.  Even if it doesn’t, project sponsors are still in a bind.  Until the new permitting program is implemented, or absent some other change in circumstance, gap-water dredge-and-fill projects no longer eligible for federal permits cannot proceed with legal certainty.

Key Takeaways

• Note that the State’s proposed permitting program—and the legal dilemma faced by project sponsors in the interim—applies to projects no longer able to secure federal permits. Some projects are still subject to federal Clean Water Act jurisdiction under the NWPR, and those will still require federal Section 404 permits.  This NWPR Fact Sheet previously published by the EPA during the Trump administration generally outlines waters that are and aren’t subject to the Clean Water Act under the new rule.  This can be a useful informational tool, but project sponsors should not rely on it to make decisions without consulting legal counsel.
• Projects that would have required a Section 404 permit under previous federal guidance, but which no longer do under the NWPR, are in legal limbo under Colorado state law. This will remain so until the state implements its new permit program, or somehow softens its position that state law flatly prohibits all unpermitted dredge and fill on gap waters.
• For projects where a federal permit is no longer required, it may still be possible for a project to secure one at the Army Corps’ discretion, which avoids the state-law risk of proceeding without one. Conversely, a project may involve waters that would not have required a federal permit even before the NWPR, in which case no permit is required under state law now.  Sponsors of projects no longer requiring federal permits should consult with legal counsel for advice on whether and how it may be possible to safely proceed.
• The timeline for the CDPHE’s proposed state-level dredge-and-fill permitting program is uncertain but still months away at least. As of this publication, the legislation required to authorize it has yet to even be introduced in the General Assembly.  Interested parties should carefully monitor the CDPHE’s information hub for developments, and should review the CDPHE’s draft bill and consider engaging with the CDPHE through the agency’s public meeting and comment process.

For additional information please contact Daniel Condren at dcondren@somachlaw.com.

Somach Simmons & Dunn provides the information in its Environmental Law & Policy Alerts and on its website for informational purposes only.  This general information is not a substitute for legal advice, and users should consult with legal counsel for specific advice.  In addition, using this information or sending electronic mail to Somach Simmons & Dunn or its attorneys does not create an attorney-client relationship with Somach Simmons & Dunn.

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