The U.S. Army Corps of Engineers and Environmental Protection Agency recently announced a process for replacing the Obama administration's 2015 promulgation of a revised regulatory definition of "waters of the United States." The definition is important because it sets limits on the scope of the federal government's authority to regulate bodies of water; waters outside this definition are within the domain of state regulation. 

The agencies propose to rescind the 2015 definition, recodify the previous definition that has remained in place since the United States Court of Appeals for the Sixth Circuit stayed implementation of the 2015 rule, and conduct a substantive rulemaking that reconsiders the definition of "waters of the United States." 82 Fed. Reg. 34899 (July 27, 2017). The notice solicits public comments, due by August 28, 2017, on whether recodification of the status quo, in regulation, as an interim first step, pending issuance of a final rule is appropriate.  

Executive Order "Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the Waters of the United States Rule," directed the agencies to issue a proposed rule rescinding or revising the 2015 rule and to consider an interpretation consistent with Justice Scalia's narrow interpretation expressed in his plurality opinion in Rapanos v. U.S.  The proposed rule would accomplish the first step of this two-step process, rescinding the 2015 rule that has been stayed nationwide by the court, and restore the regulatory definition that was in place prior to 2015 while the administration develops a new rule. The agencies explained that the need for recodification is to avoid regulatory uncertainty should the legal proceedings resulting in the existing stay of the 2015 rule be overturned by the Supreme Court.   In this case, the 2015 rule would be in effect in all but 13 States, where the rule has been enjoined by the District Court for North Dakota. The proposed interim rule would make clear the regulatory framework that would govern Clean Water Act decisions until such time as the revision process is complete, regardless of the outcome of the associated legal proceedings. 

Under Executive Order 13771, "Reducing Regulation and Controlling Regulatory Costs," January 30, 2017, agencies must revoke two rules for every new one promulgated and offset the costs of new rules with savings from those that are rescinded.  The agencies have determined the proposed rule is deregulatory for purposes of EO 13771, and therefore exempt from the "two for one" and offset requirements. The economic analysis for the proposed recodification, "Economic Analysis for the Proposed Definition of Waters of the United States - Recodification of Pre-existing Rule," will nonetheless be subject to close scrutiny by anyone objecting to the proposed approach. 

The administration's effort to revise the regulatory definition of "waters of the United States" is important to businesses and industry sectors such as construction, natural resource and energy development, and manufacturing.