Legal Developers

Bats in the Belfry and Water under the Bridge . . . New Federal Regulations Developers Need to Know

In recent months, the federal government has issued various regulations that developers need to consider before they proceed with new projects.

Driving You Batty – Northern Long-Eared Bat’s Reclassification as an Endangered Species Affects Timing of Development

First, the northern long-eared bat (“NLEB”) — a species found in the United States as far east as Maine, as far south as Louisiana, and as far north and west as Montana, including in Delaware, New Jersey, and Pennsylvania – is now classified as an “endangered” species under the Endangered Species Act (“ESA”), having previously only been listed as a “threatened” species since April 2015. The bat faces extinction due to the “rangewide impacts” of white-nose syndrome (“WNS”), a deadly disease affecting cave-dwelling, hibernating bats across North America. WNS has been confirmed in Bucks, Carbon, and Monroe Counties in Pennsylvania, Morris and Warren Counties in New Jersey, and New Castle County, Delaware. The United States Fish and Wildlife Services (“FWS”) first proposed the reclassification in the Federal Register on November 30, 2022, with the intent of the rule going into effect on January 30, 2023. However, FWS delayed the effective date, to finalize conservation tools and guidance documents. The rule was enacted without public comment. 

According to a FWS press release from when the rule was first proposed, saving the NLEB is crucial, because “[b]ats are critical to healthy, functioning natural areas and contribute at least $3 billion annually to the U.S. agriculture economy through pest control and pollination. . . . They emerge at dusk to fly primarily through the understory of forested areas, feeding on insects.”

However, the impact on developers is significant, and developers can expect delays in processing permits in areas within the so-called WNS zone (where WNS has been detected), particularly for projects involving forestry, wind energy, and infrastructure. When the reclassification went into effect, it nullified the existing black-and-white list of prohibitions and exceptions to the prohibitions that the FWS had expounded while the NLEB was merely “threatened,” without replacing them with new clear guidelines now that the species is “endangered.” 

For example, under the “threatened” classification, tree removal activities were prohibited within a quarter mile of a known hibernaculum, because “[d]uring the summer, northern long-eared bats roost alone or in small colonies underneath bark or in cavities or crevices of both live and dead trees.” Id.

That clear-cut guideline and other similar ones – which many developers in the East and Southeast had already incorporated into their site work plans — have been jettisoned, leading to confusion and a more arduous approval procedure.  Although prohibitions on tree-cutting in June and July will likely continue, developers will now have to work with the FWS for habitat assessments and consultation, a process that will occur on a site-by-site basis.  Additionally, previously permitted projects may also be halted if the FWS and/or United States Army Corps of Engineers (“Corps”) determines that new assessment for the project must be conducted, particularly related to permissible tree-cutting.  In fact, when the reclassification was first proposed in November 2022, the FWS noted that it was already “aware” of 3,095 projects that would need new “incidental take statements (ITS)” from the FWS regarding the impact of the project on the NLEB.

. . . and Under the Dam – Fewer Wetlands Classified as “Waters of the United States” – But Those that Remain Have More Regulations

 The federal government has also promulgated a rule simultaneously reducing the number of wetlands that qualify as “waters of the United States” (“WOTUS”) under the Clean Water Act (“CWA”) and granting states and tribes authority to block projects like pipelines, export terminals, and dams over CWA concerns. The tortuous history of the CWA has been previously chronicled in this blog: 

• Water, Water, Everywhere? EPA and USACE Issue New, Broader Clean Water Act Rule
• Over Troubled Water: Changes to Clean Water Act Regulations and Permitting Process that All Project Developers Should Know

This month, the Environmental Protection Agency (“EPA”) added another chapter to the narrative, by proclaiming a final rule that both narrows the standard that agencies may use to qualify wetlands as WOTUS while also expanding states’ and tribes’ power to grant or to deny water quality certificates under CWA Section 401 and rolling back restrictions imposed by the Trump Administration in 2020 that the EPA now alleges were improper.

Under Section 401, states and tribes must decide within a “reasonable period of time,” not to exceed a year, whether to certify a project.  This “reasonable period of time” begins when a project application that complies with all application requirements has been received by the state or tribal regulator.  Nevertheless, wetlands will only be considered subject to the CWA’s jurisdiction – and, accordingly, the states’ and tribes’ jurisdictions – if they have “a continuous surface connection” to another body of water that is unquestionably a part of WOTUS.

This announcement comes on the heels of the decision of the United States Supreme Court in May in the case Sackett v. Environmental Protection Agency, which significantly affected the long-debated definition of WOTUS and the jurisdictional scope of the CWA.  A draft of the new rule was first promulgated on August 29 by the EPA and the Corps, in an attempt to conform to the Sackett decision.

The EPA’s new final rule likely will result in litigation, as courts will have to interpret the scope of the rule.  Permitting processes that had been paused during while parties were waiting on the outcome of Sackett and the implementation of new EPA rule will also be revived.  Owners of new developments will also have to determine whether permits from states and/or tribes will be needed before building can commence – although fewer wetlands are protected under federal law than before, meaning that fewer residential, commercial, and industrial projects will require such review.  Nonetheless, when such review is required, the process will require the extra step of state or tribal approval, which could delay the project up to a year.

The attorneys at Obermayer can assist developers in navigating these (literal and metaphoric) difficult waters and will continue to keep our developer clients abreast of these issues and any other changes to the CWA and ESA.

The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.