Developers, take note! Without rulemaking and with no change in the law, the Oregon Department of Environmental Quality (“DEQ”) has launched what amounts to an entirely new regulatory program in which it is requiring “water quality reviews” of any removal-fill activity in non-federal wetlands or other waters of the state.

The crux of DEQ’s approach is that any person or company filling a non-federal wetland or state water—which, by the way, is a more expansive definition than the federal waters of the United States definition—even if done in compliance with a Department of State Lands (“DSL”) removal/fill permit, is violating state law. And, DEQ is not simply trying to inform developers of its new views—it threatens enforcement action should you fail to submit materials and obtain a “water quality review” and is conducting sites inspections to ensure compliance. Here is a snippet of the language you or your consultant may have received after submitting your most recent removal/fill permit application to the DSL:

“If an applicant proposes a project that will place materials into waters of the state, the project must undergo a water quality review and the applicant must obtain a permit or department order prior to conducting work; otherwise, the applicant may be subject to enforcement actions for violations of state water quality standards.”

DEQ has indicated that this new program is responding to changes in federal law that have reduced federal jurisdiction of wetlands and other waters in Oregon, not state waters. But prior to this recent “program” launch, neither DSL nor DEQ asserted that what were solely state waters or wetlands must be subject to a water quality review. Indeed, DSL’s statutes specifically provide that permits DSL issues “shall be in lieu of any permit or authorization that might be required for the same operation under … ORS 468B.048 to 468B.085 …”—which are the very statutes from which DEQ’s water quality reviews arise. Similarly, DEQ’s statutes provide that no permit is required where an activity is already lawfully authorized. ORS 468B.050(1)(d). Clearly, developers do not want to be in violation of state law, but neither do they want to add yet another permitting requirement to their already long list of authorizations needed to build much-needed housing or new city or county facilities, for example.

Whether legally permitted or not, what is making this new program the most challenging is the fact that DEQ has no permitting authority to “authorize” the impacts to water quality that it is seeking to review.  DEQ has indicated it is developing rules to implement a permitting program in the near future.  But, in the meantime, DEQ is seeking to cover these actions with an ad hoc memorandum of agreement in lieu of a permit form that authorizes water quality impacts from the fill or removal activity. These memorandums have not been vetted by the regulated community in the same way a new rule or permit would be.  And they have a number of hooks—including requiring compliance with a post-construction stormwater management plan along the lines of what would be required for a project impacting federal waters. They also give DEQ continuing jurisdiction to enforce their terms. Therefore, careful review should be the name of the game before signing on the dotted line.

So, what is it you should do when faced with an email or site inspection requiring a water quality review and execution of a memorandum of agreement in lieu of a permit? Review any such request from DEQ carefully.  Engage your legal adviser and permitting consultant to develop a strategy for a response and to scrutinize any agreements in lieu of a permit. And separate from impacts to any one particular development, prepare for the rulemaking that DEQ may now undertake (for example, talk with your industry associations about commenting), engage with legislators about this expanded new program and how it came about, and seek transparency around its purpose, scope and necessity.

Column first appeared in the Oregon Daily Journal of Commerce on February 12, 2021.

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