Posted: September 5, 2014

States appear split on how to resolve concerns over EPA’s Clean Water Act (CWA) “interpretive” rule exempting many farming practices from permit requirements, with some states seeking agency guidance on how to implement the policy while others want EPA to scrap the rule due to concerns it unlawfully expands CWA exemptions.

The divisions — outlined in comments ahead of EPA’s July 7 deadline for public input on the rule — highlight ongoing disagreements about the rule, which took effect March 25. It exempts 56 agricultural conservation activities, such as brush management, herbaceous weed control, and fencing in crops, from CWA section 404 permit requirements by specifying they are “normal farming” measures exempt from dredge-and-fill permits.

The rule, which EPA issued alongside its proposed rule on the scope of the water law, has already drawn charges that it would impose new regulatory requirements on farmers. The rule prompted criticism because EPA issued and finalized it before taking public comment. EPA Administrator Gina McCarthy has suggested dropping the measure if it can agree with critics on an alternative approach.

In the early comments on the interpretive rule, some states, including South Dakota and Alabama, charge the list of exemptions is too narrow and would hinder farmers’ ability to use conservation measures that may yield environmental benefits.

Alabama’s Department of Agriculture and Industries says in July 7 comments that it “fears a great number of former NRCS’ practices will no longer be considered ‘normal farming practices’ by reducing the number of practices to 56.”

But other states, such as Washington and Michigan, say the list of 56 practices is too broad and would exempt some operations from 404 permits even if they may harm federally protected species and impair water quality.

“Some practices do not result in water quality protection and have the potential to significantly affect wetlands and other waters,” Michigan Department of Environmental Quality (DEQ) says in July 3 comments on the rule.

And Washington Department of Ecology (Ecology) says in July 3 comments that the rule could potentially create “more questions and less certainty” that state waters and their beneficial uses, such as use by fish and aquatic life listed under the Endangered Species Act (ESA), will be adequately protected.

“Without more specific agency guidance on when and where the exemptions are appropriate, we believe there is a real risk of undoing decades of salmon recovery efforts in the Pacific Northwest,” the comments say.

‘Flawed’ Rule

While Michigan DEQ urges withdrawal of the rule, Ecology says that while the rule is “flawed,” it is ready to aid in crafting a revised rule in cooperation with state and federal agencies that would “result in compliance with federal water quality protection” while giving landowners and farmers streamlined options.

The rule says that to qualify for the exemptions, such practices must be in compliance with Natural Resources Conservation Service (NRCS) standards. That requirement has prompted criticism from a broad range of stakeholders and other observers — including Senate Democrats and environmental groups — that it would shift NRCS into an improper enforcement role and create citizen suit liability for farmers and ranchers.

The New York State Department of Agriculture and Markets and New York State Department of Environmental Conservation say in July 7 comments that the NRCS practices are not regulatory thresholds and therefore should not be used as the basis of regulatory exemptions, that the rule will deter voluntary adoption of conservation practices, but also that it would exempt some practices that are not “normal” farming.

Under section 404(f)(1)(A) of the water law, “normal farming, silviculture, and ranching activities such as plowing, seeding, cultivating, minor drainage, harvesting for the production of food, fiber, and forest products, or upland soil and water conservation practices,” are not required to obtain 404 permits.

The New York agencies say in their comments, however, that 10 of the 56 practices listed in the rule, including wetland restoration, wetland enhancement, aquatic organism passage, land reclamation: currently mined land and others, are outside the scope of what the state considers “normal farming, ranching and silviculture.”

Moreover, the state agencies say, those activities do not fall within EPA and Army Corps of Engineers guidance that the exemption is limited to “the activities named in the statute and other activities of essentially the same character as named . . .” and precludes those that are not of the same character.

But at least one state, New Jersey, is suggesting in undated comments submitted by the state’s Department of Environmental Protection on the rule that EPA and NRCS should “issue clear guidance to farmers, specific to each State, on how the interpretive rule will affect them” to ensure that the industry is clear that exemptions from 404 permitting do not necessarily void obligations under other state and federal laws, such as the ESA.

New Jersey says EPA should issue “Detailed guidance on the roles of the federal agencies in carrying out the interpretive rule as well as the definitions,” according to the state’s comments.

Rulemaking Process

While states are split over the scope and fate of the interpretive rule, many commenters want EPA to withdraw it and argue that the agency should instead pursue the policy through a new notice-and-comment rule.

South Dakota’s Department of Agriculture says in July 7 comments that the exemptions list is “too narrow” to cover a number of voluntary conservation practices, and asks EPA to withdraw the rule.

And a number of state attorneys general (AGs), led by Nebraska Attorney General Jon Bruning (R), in a July 7 letter to McCarthy urge the agency to withdraw the rule.

The argue that it is unlawful because it seeks to “establish new policies intended to bind decision-making by the Agencies and influence actions of the regulated community” and therefore must go through a formal notice-and-comment rulemaking under the Administrative Procedure Act (APA).

The letter comes as the Supreme Court is preparing to review an appellate ruling that would require EPA and other agencies to follow notice-and-comment procedures when they amend interpretations of their rules — which could create difficulties for the agriculture rule. The justices in June accepted certiorari in the linked cases Thomas Perez, et al. v. Mortgage Banking Association (MBA), et al. and Nickols, et al. v. MBA, et al, which test whether agencies must follow notice-and-comment rulemaking to revise their existing interpretations of rules.

The AGs’ letter says that the U.S. Court of Appeals for the District of Columbia Circuit in 2010 held in a ruling in Catholic Health Initiatives v. Sebelius that an interpretive rule must “‘derive its proposition from an existing document whose meaning compels or logically justifies’ its requirements.”

The AGs say, “In the present case, it cannot be argued that limiting the ‘normal farming activity’ exemption for conservation practices to those specifically identified by the Agencies and conducted in accordance with NRCS standards requirements derives from or is logically justified by any prior statutory text or regulatory provision.”