1 understanding riparian and water rights walter g. wright, jr. mitchell, williams, selig, gates...
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UNDERSTANDING RIPARIAN AND WATER RIGHTS
Walter G. Wright, Jr.
Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C.
Little Rock, Arkansas
Environmental, Energy and Water
Law Bloghttp://www.mitchellwilliamslaw.com/category/environmental-blog
Slides will be posted on Friday
3 daily posts addressing
Litigation, regulatory, policy, legislative and transactional issues related to these areas.
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The availability of water is essential for a community’s sustainable growth. Two primary factors determine whether water is available to meet those
needs. First is a water supply issue: Is a source of water available? Second, is a water quality issue: Assuming a source is available, is it
clean enough to be treated and used? Historically, water supply and water quality issues have been dealt with
separately. There are vastly different regulatory schemes that provide permitting and
approval oversight related to water quality and water supply projects. That availability of a safe and reliable water supply is dependent upon water
that is not too impaired to efficiently treat and use. (water quality/water quantity overlap)
Addressing the supply issue through water development can trigger various federal statutory/regulatory programs that we will discuss
In addition, can Arkansas’ current legal structure (including laws and administrative structure) for governing water withdrawals produce predictable, consistent, equitable, secure or timely results?
Overview of Program/Key Questions
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The purchase, sale, leasing, financing, design, construction, operation, maintenance and management of many facilities (even residential) can generate complex environmental issues.
A key issue is often water. Purpose of this presentation is to highlight a few current water
issues that can materially affect improved and unimproved properties from the perspective of various professionals/participants.
Address various environmental issues from the perspective of various professionals such as: Architect ▫ Purchaser/Seller Construction ▫ Lender Subcontractor ▫ Lessor/Lessee Engineer ▫ Appraiser Attorney
Riparian rights states such as Arkansas, suffer from serious problems, including the vagueness and unpredictability of the criteria of decision, the instability of the resulting legal decisions, the lack of a process for managing water during shortages or of the resulting legal decisions, the lack of a process for managing water during shortages or for protecting public values, a systematic bias in favor of large users and the impracticality of markets under such a legal regime.
Given the vague and unpredictable criteria of decisions, even long-established uses could be cut off without compensation if a court decides that a recently begun use is more reasonable.
As water shortages become chronic, such problems could become a serious impediment to private investment in facilities that use material amounts of water.
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Appropriation Doctrine
“First in time, first in right” Western system Statutory State owns the water Rights can be abandoned Acquisition/adjudication/administration
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Riparian Land
Land contiguous to a body of water Within the same watershed Source of title and unity of title Constantly diminishing
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The Starting Point:Common Law Riparian Doctrine “Natural Flow” Purest form of rule:
Each property owner who has water flowing by his land is entitled to have the full flow of the stream going by without significant pollution from upstream
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Limitations
Pure riparianism did not accommodate consumptive use other than for domestic purposes
Uses such as agricultural irrigation would diminish the “natural flow” to downstream neighbors
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Transfer of Riparian Rights?
Riparian rights are “correlative,” they depend on the land ownership
One might reserve rights if a parcel is subdivided
Selling riparian rights to another may affect only the rights of the parties
As off-tract use increases, the law in Arkansas will develop on this issue
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Reasonable Use Industrial and agricultural progress required
changes to riparianism Consumptive and non-consumptive use
limited by their reasonableness and whether they cause unreasonable harm to other riparians
Adopted in Arkansas in 1955 in Harris v. Brooks
Still no practical dispute resolution, because litigation is required
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“Regulated Riparianism”
Impracticality of adjudicating each dispute Unpredictable Shift in water ownership in some states – at
some point water considered public property State agency allows water use through
permits State sorts out disputes Non-riparian use requires permit
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Arkansas and Regulated Riparianism The dry period in the early 1950s brought not
only court cases but legislation State rejected Western-style allocation, but
did start moving toward a framework for ensuring predictability
Minimum streamflow Regulations on dams and releases Non-riparian transfer Allocation during shortage
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Harris v. Brooks Rules
Domestic use superior to all other uses Other uses equal Lawful use destroying another lawful use
must yield or may be enjoined Lawful use interfering or detracting from
another lawful use requires determination of whether interfering use is reasonable or be adjusted
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Groundwater
Same reasonable use standard applies as with surface water
Right to use depends on property rights Groundwater Act
Critical Groundwater Areas Regulation?
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Water Use Registration
Annual registration with local conservation district or with ANRC
Surface and groundwater Exceptions Arkansas success
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Water Quantity/CompetitionL&S Water Power, Inc., et al, v. Piedmond Triad RegionalWater AuthorityCourt of Appeals of North Carolina
2011 N.C. App. LEXIS 734, April 19, 2011, filed• Defendant is a public water authority comprised of
Randolph County and the municipalities of Greensboro, High Point, Jamestown, Archdale, and Randleman organized to satisfy water demand
• Plaintiffs L&S Water Power, Inc., Brooks Energy, L.L.C., Deep River Hydro, Inc., Hydrodyne Industries LLC and Howard Bruce Cox (collectively “plaintiffs”) are downstream riparian owners who operate hydroelectric power plants on the Deep River.
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Defendant petitioned the North Carolina Environmental Management Commission to use the power of eminent domain to divert water from the Deep River basin to construct Randleman Lake.
EMC issued a certificate authorizing defendant to acquire land by eminent domain and divert by inter-basin transfer up to 30.5 million gallons of water per day from the Deep River Basin to the Haw and Yadkin River Basins.
In April of 2001, defendant received a 404 Permit from the Department of the Army authorizing it to construct the Randleman Dam. Defendant built the Randleman Dam and started filling the Randleman Lake in order to develop a public water supply.
On May 29, 2008, Plaintiffs filed a complaint against defendant for inverse condemnation and asserted that defendants decreased the rate of water flow in the Deep River and sought compensation from defendant for the taking of their riparian rights.
Court rules defendant had taken plaintiff's riparian rights and that plaintiffs were entitled to compensation from the defendant. Specifically, the trial court found that: (1) defendant used its power of eminent domain to build the Randleman project, in furtherance of developing a public water supply; and (2) the Randleman project has and will continue to reduce the rate of water flow in the Deep River; (3) plaintiff’s ability to produce electricity has been negatively impacted by reduction of the natural stream flow of the Deep River.
Court concluded that plaintiffs are entitled to be compensated for the loss of stream flow and that plaintiffs’ riparian rights can be valued by the loss of electricity capable of being produced as a result of reduction of stream flow.
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Arkansas Water Plan Mission
The Arkansas Water Plan is the State’s comprehensive planning process for the conservation, development, and protection of the State’s water resources, with a goal of long-term sustainable use for the health, well-being, environmental, and economic benefit of the State.
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Water Projects
Water Plan Compliance Financing Disputes Emerging issues
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2050
Rulemaking
2015
• Demand – How much needed, where, and when?
• Supply – How much available, where, and when?
• Gaps – Difference between demand and supply
• Issues and Recommendations –Challenges and responses
The Update Process
The Major Building Blocks for Updating the Water Plan will Guide Data Collection Management Practices/Projects to Address
Shortfall between Demand and Supply Identify Gaps between Available Resource
and Demands Supply Availability Demand Forecast by Sector Regional and Institutional Setting
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Approaches to Technical Work Water demand forecasting
By planning region By sector of use Source of Supply – Surface and Groundwater Planning horizon – “current” to 2050
Water supply (physical and legal) availability Minimum required flows Surface and Groundwater
Gap analysis Physical and legal supply in relation to demand (including
infrastructure considerations) Analysis tied to source of supply
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Statewide Demand Projections
2010: 122010: 12 million AFY 2050: million AFY 2050: 1414 million AFY million AFY
Demand Projections
Current demand is 12.4 million acre-feet per year
11 billion gallons per day
Projected demand in 2050 - 14 million acre-ft. per year
Would cover the state in 4.9 inches of water
Largest demands:
Crop irrigation 80%
Thermoelectric power 11%
Public drinking water 3.5%
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Supply Projections
We have very abundant surface water supplies
Water quality is generally good
Groundwater supplies are abundant, but: 2010 demand was 8.7 million acre-feet per year
It is projected to grow by 2050
Groundwater can supply only 1.9 million acre-feet per
year at a sustainable pumping rate—the rate that
roughly equals recharge
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Gap Analysis
2050 Groundwater Gap2050 Groundwater Gap(Difference Between Supply and (Difference Between Supply and
Demand)Demand)
8.2 Million AFY8.2 Million AFY
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By 2050, we will only have enough “sustainable” groundwater to irrigate
approximately 1.8 million acres of cropland if we do not implement any of the recommendations in the Plan.
Infrastructure Need Projections
We surveyed water and wastewater providers
Between now and the mid 2020s, building,
replacing, and maintaining infrastructure is
expected to cost:
$5.74 billion for water providers
$3.76 billion for wastewater utilities
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Priority Issues and RecommendationsPriority IssuePriority Issue RecommendationsRecommendations
Conjunctive Water Management and Groundwater Decline
• Develop and implement strategies based on storing surface water during months when excess water is available
• Encourage and increase irrigation water use efficiencies
Drought Contingency Response • Develop a drought contingency response network
• Ensure stream flow gaging is adequate and paid for
Excess Surface Water Available for Non-Riparian Use
• Remove the 25% limitation for estimating excess water available for non-riparian transfer
• Through adaptive management, use the Arkansas method for fish and wildlife flow needs until improved methods available
• Engage stakeholders through an open and transparent process
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Priority Issues and Recommendations (cont.)
Priority IssuePriority Issue RecommendationsRecommendations
Funding Water Resources Development Projects
• Continue bond issues under the Water, Waste Disposal, and Pollution Abatement Facilities General Obligation Bond Program at the appropriate times
Improving Water Quality through Nonpoint Source Management
• Propose funding specifically for nonpoint source pollution management programs and practices
• ANRC interact with ADEQ better on impaired stream issues
• Leverage funding from multiple sources
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Priority Issues and Recommendations (cont.)
Priority IssuePriority Issue RecommendationsRecommendations
Public Awareness, Outreach, and Education
• Keep working to educate the public on water issues—most people take water completely for granted
• Continue work with Conservation Districts
Public Water and Wastewater Infrastructure
• Develop sustainability plans for long-term maintenance, replacement, and financing of facilities and equipment
• Improve training programs for boards, managers, and operators
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Priority Issues and Recommendations (cont.)
Priority IssuePriority Issue RecommendationsRecommendations
Reallocation of Water Storage in Federal Reservoirs
• Pursue administrative reallocation of water stored in federal reservoirs
Tax Incentives And Credits For Integrated Irrigation Water Conservation
• Determine current efficiencies and develop goals
• Evaluate effectiveness of existing tax credits and incentives
Water Use Reporting • Review water use reporting process for agricultural irrigation
• Improve Quality Assurance/Quality Control
• Refine crop water need numbers• Develop awareness, outreach, and
education to stress the importance of accurate water use reporting and the benefits of conservation
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People Have Questioned
Forecasted increased demands, especially crop
acreages
Water Use Reporting Program data quality
“New” areas of projected groundwater decline
Groundwater model consistency and accuracy
Disproportionate input from some participants
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Arkansas Incentives/Credits
Surface Water Utilization Tax Credit Wetland Creation/Restoration Tax Credit Wetland Creation/Restoration Tax Credit Tax Credit for Waste Reduction, Reuse or
Recycling Equipment Recycling Fund Act/Waste Tires
Water Contract/Acquisition Considerations Selling and buying water? (a checklist)
Most Common Forms Buy the land and get the groundwater as a part of the bundle of sticks Also will need use of surface estate The right to use the surface estate for the exploration and development of
the groundwater estate on an exclusive or non-exclusive basis The right to place infrastructure on the surface estate (through a fee
interest, lease or easement) The right to ingress and egress to construct, operate and repair a water
collection system Purchase of groundwater in fee simple absolute Transfer of groundwater for a period of time
Fee simple determinable Lease
License
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Legal/Regulatory Considerations
Transfer authorizations (ANRC issue?)
Transfer Barriers
• Third party impacts
• Interbasin/Aquifer transfer
• Navigability – can’t buy public streambed
• Federal reserved rights
• Riparian Issues (Power Plant example)
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AUTHORITY TO SELL LARGE VOLUMES OF WATER : LOUISIANA ATTORNEY GENERAL OPINION
The ability to transfer water in eastern states is often dictated by riparian common law principles. May be particularly problematic to determine what authority is available to transfer water from various types of water bodies to off-site users. In 2011, Louisiana Attorney General was asked to provide an opinion as to whether a watershed district had the authority to sell large volumes of surface water from a lake, a tributary to a lake and any parish stream outside a national forest. The following questions were posed in regards to withdrawal of groundwater for new commercial uses which included:1. Are there specific state controls regarding new commercial uses of groundwater a. From an existing well; and b. From an existing public supply well?2. Is there a minimum volume of water that would be subject to such control ( in question 1 above)?3. Are there any controls that apply when a commercial user that is withdrawing from a public supply of groundwater increases its withdrawal amount?4. What is the extent, if any, of the authority of the Commission regarding new commercial groundwater withdrawal within the parish?
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Water Transfer/Use/Sale Issues
Economic Factors Increasing demand Limited supply options Low valued uses Buyer and seller base Market data base Transaction cost consideration
Technical Considerations Conveyance systems
Pipelines Natural watercourses
Statewide plumbing systems Urban growth
PURCHASE OF REAL PROPERTY AND WATER SUPPLY IS CRITICAL: ISSUES Reservations in title? (Nilsson case – water rights can be reserved) Future “riparian” issues?
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Price is Negotiable Pricing methodology dictated by lease or conveyance
Pricing methodologies include: Oil & Gas pricing concepts
“Guaranteed” money up front Bonus Delay Rentals Shut in payment Royalty payments
Sold at lease Sold off lease Royalty on take or pay
Traditional water sales concepts Price per 1000 gallons or acre foot (lease or conveyance) Take or pay Options or reservation fees Price escalators
Timing is Negotiable Lease and “so long as producing” Outright conveyance Production sometime in the future
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Development of New Water Facilities/Supplies/Infrastructures The development of new facilities to extract, store, impound, and/or
transport water can involve complex technical, political, legal and regulatory issues. A few strategies to consider to attempt to ease the development process might include: Start permitting early Pursue all required permits simultaneously (if possible)
Example: 404 Nationwide/NPDES/ESA Recognize Construction/Design Issues
Development of water supply facilities are often complex projects Limitation of Liability Issue Waterworks and wastewater treatment plant owners that wish to
retain the ability to seek compensation for the failure to meet performance standards must identify and remove these clauses in the applicable contracts and service agreement
Add additional environmental benefits to project wetland mitigation, parks, conservation easements, etc.
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Can water be purchased or otherwise acquired in the desired amounts in lieu of developing a new facility
• Contract issues are critical• Certainty of supply
- Physical- Legal (use ANRC rules)
We will also discuss this.
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Construction Project Risk Management The design, construction, operation, maintenance and
management of facilities that provide wastewater services and water continue to generate complex issues.
Recognize Risk Construction involves risk management Risk management involves identifying risk and dealing with the
risk Major Causes of Disputes
1. Lack of scope definition by owner- refer to contract documents- is proposal included?- National Environmental Policy Act issue (example)
2. Improper risk allocation in contracts (stormwater examples)
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National Environmental Policy Act (NEPA) Major federal actions such as the re-allocation or
apportionment of waters between states would need to go through specific procedural requirements.
While application of NEPA does not necessarily change the outcome of a federal decision on apportionment, it would require consideration of impacts from the project and alternatives to the proposed action.
Overview of Key Statutes Affecting Development
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Key NEPA Concepts
NEPA Purpose? Procedural / Not Substantive Statute Jurisdictional Test – Major federal action / significant impact on the
environment Relevant Issues
EA or EIS? Example – Greers Ferry decision Segmentation Project modifications/changes/supplement EIS? (speculative?) AWF Grand Prairie decision canal / pipeline / natural stream mix change, etc.
Scope of EIS Subsequent developments (woodpecker?) What range of alternatives must be considered?
AWF Grand Prairie – dry farming, congressional direction to provide surface water to farmers?
Cumulative impacts Example – Dardanelle decision
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Potential Role of Endangered Species Act in Water Supply Development The ESA can be a material issue or hurdle for large or
small water projects if an endangered or threatened species is potentially affected. Key Sections are 7 and 9. Relevant scenarios may involve development or operation of
dams, reservoirs, canals, pipelines (i.e., flow, quantity issues) Dam footprint, diversion of waters, etc. can potentially trigger
ESA Project might not be able to proceed, or conditions attached What is critical habitat? (Note: Grand Prairie/White River
decision) Future Species listing?
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Endangered Species Act of 1973 Species are listed as endangered or threatened
because of any of five factors: the present or threatened destruction, modification or
curtailment of its habitat or range; overutilization for commercial, recreational, scientific
or educational purposes; disease or predation; the inadequacy of existing regulatory mechanisms; other natural or manmade factors affecting the
species’ continued existence.
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Endangered Species Act
Section 7(a)(2), 16 U.S.C. 1536(a)(2): Each Federal agency shall … insure that any
action authorized, funded, or carried out … is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of [critical habitat].
: NO ADVERSE MODIFICATION OF CRITICAL HABITAT
Section 9 – Take, Harass, Modify Habitat, etc.
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The Section 9 “Take” Prohibition in the Endangered Species Act Section 9 – Take, Harass, Modify Habitat, etc.
Applies to public and private entitiesArkansas Exs. – Ivory Billed Woodpecker, Burying Beetle
Prohibits all kinds of taking, including direct death and injury, and “harm” and “harassment”
Harass: Harass is defined as an intentional or negligent act or omission that creates the likelihood of injury to wildlife by annoying it to such an extent as to significantly disrupt normal behavior patterns….
Harm: Harm is defined as any act that actually kills or injuries wildlife including significant habitat modification
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ACTION ALLEGING TEXAS COMMISSION ON ENVIRONMENTAL QUALITY OFFICIALS VIOLATED ENDANGERED SPECIES ACT IN THEIR MANAGEMENT OF FLOW OF FRESH WATER INTO THE SAN ANTONIO BAY
The Aransas Project , a nonprofit corporation brought an action pursuant to the Endangered Species Act (“ESA”) against several Texas Commission on Environmental Quality (“TCEQ”) officials. The Project alleged that TCEQ officials failed to adequately manage the flow of fresh water into the San Antonio Bay ecosystem during the 2008-2009 winter resulted in a “taking” of Whooping Cranes, and endangered species, in violation of Section 9 of the ESA. The Project argued that the reduced flow of fresh water into the ecosystem increased salinity, reducing the food and water supply for the whooping crane, thus weakening and ultimately resulting in the death of 23 whooping cranes. The plaintiff’s request for relief included an assurance that the whooping cranes would have sufficient water resources to prevent a future “taking”. The parties filed various motions for partial summary judgment. The TCEQ officials contended that, as a matter of law, the Project is not entitled to recovery under Section 9 of the ESA because imputing liability to regulatory agencies for merely carrying out their regulatory duties runs contrary to the ESA. TCEQ officials also attempted to distinguish case law cited by the plaintiff arguing that the agency had almost no authority to modify or revoke water permits because such permits reflect property rights that are constitutionally protected under Texas law.Project further argued that permit holders have rights in water, but ultimately water is the proproperty of the state. Court rejects the TCEQ officials argument that Section 9 of the ESA does not extend to suits brought against regulators whose actions indirectly result in the taking of an endangered species.
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Federal Water Pollution Control Act Amendments of 1972 Established NPDES, pretreatment and
construction grants programs Permits are a privilege – not a right Effluent limits must be both technology and water
quality based Provided for state programs Established significant penalties for permit
violations
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NPDES Statutory Framework All “point” sources “Discharging
pollutants” Into “waters of the
United States”
Must Obtain an NPDES permit from EPA or an authorized state
•Surprisingly, significant CWA jurisdictional issues have arisen in last few years
EPA’s Proposed Rule on Waters of the United States In 2006, the Court in Rapanos rejected the
agencies’ “any hydrological connection” theory of jurisdiction as overly broad Plurality opinion (Scalia):
Rejected assertion of jurisdiction over ephemeral streams, ditches, and drains
Relatively permanent waters Kennedy concurrence:
Joined plurality in rejecting the Government’s any connection theory
Significant nexus
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WOTUS Under the “Proposed” Rule1. All waters currently, in the past, or may be susceptible to use in
interstate or foreign commerce, including tidal waters;
2. All interstate waters, including interstate wetlands;
3. The territorial seas;
4. All impoundments of waters otherwise defined as waters of the U.S.’
5. All tributaries of waters identified in 1-3 above;
6. All waters, including wetlands, adjacent to water identified in 1-5 of this section; and
7. On a case-specific basis, other waters, including wetlands, that alone or in combination with other similarly situated waters in the region have a significant nexus to a water identified in paragraphs 1-3
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New Definitions in “Proposed” Rule Tributary:
Water body physically characterized by a bed and bank and ordinary high water mark which contributes flow directly or through other water bodies to waters in 1-3.
A water does not lose its tributary status if there are man-made breaks (such as bridges, culverts, pipes, dams) so long as bed and bank can be identified up and downstream of the break.
A wetland can be a tributary. A tributary can be natural, man-altered, or man-made and
includes rivers, streams, lakes, impoundments, canals, and ditches (unless excluded).
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Tributary Definition
The rule, for the first time ever, specifically defines ditches as jurisdictional tributaries under all CWA programs Roadside ditches Irrigation ditches Stormwater ditches
Other man-made conveyances that drain or connect would also likely qualify as tributaries
Huge practical consequences that have yet to be evaluated
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Other New Definitions in “Proposed” Rule Adjacent: Bordering, contiguous, or neighboring waters
separated from other WOTUS by dikes, or barriers are adjacent waters
Neighboring: Waters located within a riparian area or floodplain or waters with a surface or shallow subsurface connection Riparian area: Transitional areas between water and land
where surface or subsurface hydrology influences the ecological process and plant community of the area …
Floodplain: An area bordering inland or coastal areas that … is inundated during periods of moderate to high water flows
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Significant Nexus Definition in “Proposed” Rule Significant Nexus:
Means a more than speculative or insubstantial effect that a water or wetland has either or alone or in combination with other waters in the region on waters 1-3.
Other waters, including wetlands, are similarly situated when they perform similar functions and are located sufficiently close together so that they can be evaluated as a single landscape unit.
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Exclusions in “Proposed” Rule Waste treatment systems designed to meet
the requirements of the Clean Water Act; Prior converted cropland; Ditches excavated in uplands and that drain
only uplands and have no more than ephemeral flow; and
Ditches that do not contribute flow either directly or through other water bodies to a water in 1-3 above.
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Exclusions in “Proposed” Rule Artificially irrigated areas that would revert to uplands should
irrigation cease Artificial lakes or ponds created in dry land and used exclusively for
stock watering, irrigation, settling basins, or rice growing Artificial reflecting pools or swimming pools created by excavating
and/or diking dry land Small ornamental waters created by excavating and/or diking dry
land for primarily aesthetic reasons Water-filled depressions from construction Groundwater drained through subsurface drainage systems Gullies, rills, non-wetland swales, and puddles
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Why Does CWA Jurisdiction Matter? The amount of jurisdictional waters
influences: Enforcement/likelihood for potential illegal
discharges Permitting/reporting requirements
Type of permit: Nationwide or individual “Federal action” triggers: NEPA, ESA, NHPA, 401
water quality certification, etc. Mitigation Third-party challenge
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Some Relevant Facilities
Industrial ponds Refineries Process waters
Industrial storm water Closing or modifying facilities
Ditches and other conveyances
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Exemptions for Agriculture
U.S. EPA and the U.S. Army Corps of Engineers proposed a joint rule to clarify the types of waters that are and are not covered by the Clean Water Act to bring certainty and predictability, including to agriculture.
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Exemptions and Exclusions PreservedNormal farming, silviculture, and ranching practices.
Artificial lakes or ponds created by excavating and/or diking dry land and used for purposes such as rich growing, stock watering or irrigation.
Upland soil and water conservation practices. Artificial ornamental waters created for primarily aesthetic reasons.
Agricultural stormwater discharges. Water-filled depressions created as a result of construction activity.
Return flows from irrigated agriculture. Pits excavated in upland for fill, sand, or gravel.
Construction/maintenance of farm or stock ponds or irrigation ditches on dry land.
Prior converted cropland.
Maintenance of drainage ditches. Waste treatment systems (including treatment ponds or lagoons).
Construction or maintenance of farm, forest, and temporary mining roads.
Artificially irrigated areas that would revert to upland if irrigation stops.
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Exempt NRCS Conservation Practices 314 Brush Management 315 Herbaceous Weed control 320 Irrigation Canal or Lateral 326 Clearing and Snagging 327 Conservation Cover 338 Prescribed Burning 342 Critical Area Planting 353 Monitoring Well 380 Windbreak/Shelterbelt Establishment 382 Fence 383 Fuel Break 386 Field Border 388 Irrigation Field Ditch 390 Riparian Herbaceous Cover Some Examples
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Some Agriculture Interest Argue Jurisdiction will result in severe restriction on
farming and ranching – or even prohibit farming or ranching activities in any area the government determines to be a water
Everything about this proposal serves to expand the federal regulatory reach
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Agricultural Exemptions – Agriculture Argues Exemptions apply only so long as the conservation activities are
ongoing Do not apply if there is a change of use Once conservation activities are complete, landowner will likely
have features that will be higher quality and more likely to be considered waters of the U.S.
The agencies’ discussion of the agricultural exemptions is misleading and intended to minimize opposition to the rule
Newly created permit exemptions, created by interpretive rule, nothing more than agency guidance, do not have the force of law Disingenuous to suggest that expanding the list of activities that are exempt from
404 permitting requirements mitigates the effect of the rule
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Does Rule Create More Uncertainty
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Water Transfer Issues
Water transfers occur routinely and in many different contexts across the United States.
Typically, water transfers route water through tunnels, channels, and/or natural stream water features, and either pump or passively direct it for uses such as providing public water supply, irrigation, power generation, flood control, and environmental restoration.
Water transfers can be relatively simple, moving a small quantity of water a short distance on the same stream, or very complex, transporting substantial quantities of water over long distances, across both state and basin boundaries.
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Water Transfers: Do They Require an NPDES Permit? The question of whether or not an NPDES
permit is required for water transfers has arisen because activities that result in the movement of waters of the U.S. such as trans-basin transfers of water to serve municipal, agricultural and commercial needs, can also move pollutants from one waterbody (donor water) to another (receiving water.)
Water Transfer IssuesWater Management District v. Miccosukee Jurisdictional Elements South Florida
Addition of a Pollutant? The U. S. Supreme Court’s key findings:
1. Tribe argued that a pump station that drew in water from one body of water and discharged the water, unchanged, into another body of water required NPDES permit because the water discharged from the pump contained higher levels of phosphorous and other pollutants than naturally occur in the receiving water body, even though the water district was not responsible for the increased pollutant levels in the originating water body.
2. Court relied on the Act’s definition of the jurisdictional term “discharge of pollutant” as “any addition of any pollutant navigable waters from any point source” to mean that, so long as there is a point source, such point source “need not be the original source of the pollutant; it need only convey the pollutant to navigable waters.”
3. Even though the pump station at issue “does not itself add pollutants to the water,” an NPDES permit may be required because the pump station added pollutants to the receiving, more pristine waterbody.
4. Pumping or moving water within a single body of water does not require a permit, but pumping or moving water between separate water bodies may require a permit.
Post-Decision – EPA Guidance
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Concerns Regarding This Issue? Do they mean that operators of any kind of
infrastructure resulting in the movement of water from one water body (with its own characteristics) (water supply, etc.), to another water body (with different characteristics) must apply for and obtain a NPDES permit?
In addition, do these decisions signal a revisiting of how courts will treat releases from dams? Are they also relevant to canals, irrigation districts, flood control, etc.
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EPA Water Transfer “Clarification” Rule
EPA clarifies that permits are not required for transfers of water from one water to another.
Such transfers include routing water through tunnels, channels, stream courses for public water supplies, irrigation, power generation, flood control and environmental restoration.
Thousands of water transfers currently in place are vital to the water infrastructure.
The rule defines such transfers as the transfer of water between bodies of water without subjecting the water to intervening industrial, municipal or commercial use.
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What is Stormwater?
Runoff from natural precipitation, such as rain events, snow melt and other surface runoff and drainage
Why Regulate?
Urban runoff/storm sewer discharges affect 13% of impaired rivers, 21% of impaired lakes and 45% of impaired estuaries (TMDL implications)
Potential impacts of stormwater discharges include increased bacterial contamination, increased turbidity, increased toxic sediments, decreased dissolved oxygen concentrations and alterations in stream channel morphology and habitat
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Stormwater
Strategic reasons the stormwater program has become a material issue fro some construction projects?
Opponents of some construction activities have used stormwater violations to hinder/harass the projects.
If they can’t use zoning or other issues to stop a project, stormwater compliance may be scrutinized/targeted. Involve federal/Arkansas agencies (penalties/injunctive relief?) Adverse PR Aid private lawsuits
Use of federal Clean Water Act citizen suits encourage/validate common law actions (drainage/flooding).
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Federal Clean Water Act Citizen Suits Most significant enforcement threat to operators
may be citizens’ suits under Clean Water Act A citizen (e.g., environmental organization) has a
right under Section 505 of the CWA to file an action against any person, governmental agency or instrumentality alleged to be in violation of an effluent standard or limitation of the Act
Same penalties, injunctive relief, plus attorney fees can be recovered in a citizen’s suit
Central Arkansas example
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Another Key Concern for the Project Professional Developer/Owners sensitivity to these issues/liability allocation Developer/Owners have been the subject of very significant
government enforcement actions (and associated bad P.R.) around the country for stormwater regulatory/permit violations
Developer/Owners taking measures to proactively address stormwater compliance by various mandatory requirements for contractors.
The project professional that does not demonstrate the necessary expertise/commitment/knowledge to address these issues will be at a disadvantage in competing for some projects
Wal-Mart consent order
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“Wetland Issues” (404/Corps)
Includes: Wetlands
“Those areas that are inundated or saturated by surface groundwater at a frequency and duration sufficient to support, and that under normal circumstances do support, a prevalence of vegetation typically adapted for life in saturated soil conditions.”
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Clean Water Act (404) Wetland“Discharge of Dredge or Fill into a Wetland” Requires a Permit Key federal “land use restriction” Cost (mitigation, engineering, revise project
plan), timing, perception/P.R., value Opportunities? Rivers and Harbors Act of 1899 – Little Rock
Audubon case – Section 10 Permit
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Due Diligence
Why the concern over presence of wetlands? Negative impact on land value Increase cost of development Penalties for unpermitted impacts
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Wetland Issues
Surveying wetlands, preparing mitigation plans or altering developments to accommodate wetlands may not only delay construction, but may also limit the amount of increasingly expensive land that may be developed.
Some developers have recently faced enforcement. Examples: Loveland Co. development group agreed to pay a
$110,000.00 fine and provide approximately $330,000.00 to mitigate damage to Indian Creek and its adjacent wetlands. (2 acres)
KB Home Nevada, Inc. agreed to pay an $80,000.00 penalty and fund three environmental restoration projects to resolve wetlands violations at its 160 acre development in southwestern Las Vegas.
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Wetlands
The “Tulloch Rule” provides that the Corps will “regard the use of mechanized earth-moving equipment in streams and wetlands as resulting in “a discharge” of pollutants, thereby requiring a permit under the CWA unless “project-specific evidence” shows that the dredging results in “only incidental fallback.”
The regulation defines incidental fallback as the “redeposit of small volumes of dredged material incidental to excavation activity” if the material “falls back to substantially the same place as the initial removal.”
The associations argued that, while the extent of the Corps’ authority under the CWA is limited to activities that result in “additions” of pollutants to waters of the U.S., the decision to regard any earth-moving activity as resulting in discharge unless shown otherwise creates an impermissible rebuttable presumption that all dredging results in unlawful discharge and that its definition of incidental fall back which includes a volume determinant with no measurable criteria exceeds the scope of the Corps’ authority under CWA § 404.
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Wetland Permit Exemptions Update Logging of Cyprus trees in wetland areas requires a Clean Water
Act permit form the U.S. Army Corps of Engineers unless it is an ongoing sustainable activity, according to the EPA.
An EPA memo sent June 6 to the U.S. Army Corps of Engineers clarifies that felling of cypress forests, a type of wetlands, is not exempted in an “ongoing normal silvaculture” or forestry activity under Section 404(f)(1)(A) of the Clean Water Act if there is “no measure of reasonable assurance” that the cypress forest would be regenerated by natural means.
Section 404 of the Clean Water Act authorizes the Corps to require permits for any activities, other than ongoing agricultural and forestry activities, that discharge dredged or fill material into wetlands, resulting in impaired water quality.
Project Risk Management(Lessons Learned) Public projects requiring permits
Likelihood the required permits will be appealed/challenged. Do employees/consultants recognize that most of what they write
can be obtained through discovery/FOIA? Humorous comments, conservative observations, disagreements
about regulatory/legal issues, etc. will be obtained by opponents if in writing. (Example – NPDES appeal)
All written communications should be prepared with the thought that they may appear in open court (on administrative hearing) one day.
Sensitive information should be communicated orally. Critical that understanding/information/provided/etc. to
government be documented.
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Recognize significant water source development activities could face greater challenges on certain waters.
Recognize creative argument/obstacles: Presence of Endangered Species Act critical habitat
and/or threatened or endangered species Interstate or interbasin transfers (ANRCC Issue?) Waters whose substantial use will engender
opposition by state/federal authorities, tribes or significant environmental organizations
Federal reservation of rights Clean Water Act TMDL’s Clean Water Act Jurisdictional Issues FERC License
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Performance Guarantees and Acceptance Testing Problems for water and wastewater sector:
subjective standards for water quality broad range of influent parameters effluent standards that are more stringent than applicable law measuring the standards remedy if fail to meet guarantee impact of operations ability to meet guarantee
The Challenges of Meeting Taste and Odor, Color and Noise Guarantees Taste, odor and color are directly related to influent
what is the baseline for raw water? what happens if actual influent changes from the baseline? different ways to treat different influents
Attempt to make standards of classification objective Noise
what is objectionable?
Facility Development
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CONNECTICUT DECISION ADDRESSING WHETHER ENGINEERING AND ENVIRONMENTAL CONSULTING FIRMS COMMITTED ENGINEERING MALPRACTICE BY PROVIDING OPINIONS THAT CERTAIN LAND WAS EXEMPT FROM THE HIGHLAND WATER PROTECTION AND PLANNING ACT
A Superior Court in New Jersey in Bob McEwan Construction Corp. vs. Donohue Engineering Co. and Ecols-Ciences, Inc., et al, addressed a claim alleging engineering malpractice. The Plaintiff’s malpractice count alleged that Defendant Donohue Engineering Co. and Defendant Ecols-Ciences, Inc. (“negligently and carelessly provided advice and counsel”) to Plaintiff Bob McEwan Construction Corp. by reason of their providing opinions of certain lots under contract of purchase were exempt from the Highlands Water Protection and Planning Act. Donohue was engaged to do “whatever was required to get a subdivision before the Planning Board….and to conform with the ordinances”. Ecols-Ciences, an environmental consultant, was hired to prepare a preliminary investigation report – not to provide opinions about the Highlands Act. The opinion states Ecols-Ciences provided an opinion on the applicability of the Highlands Act. The opinion states that in the March 2, 2006 letter Ecols-Ciences explained:
Although the site is located within the Highlands Preservation Area, the standard 300 foot buffer from the Highlands Open Water/Wetlands do not apply to the proposed
lots. It is my understanding that you propose to develop the site with two single-family residences that will connect to the existing sewer service area. Therefore as long as t
he cumulative disturbance proposed on both lots does not exceed an acre and cumulative impervious surfaces do not exceed ¼ of an acre, development on the two lots is exempt from the standards of the Highlands Preservation Area.
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Transactional Issues: Environmental Due Diligence Associated With A Bond Issue/Dispute Regarding Responsibility
The development of facilities, properties, and/or districts is sometimes financed through the issuance of bonds. Like other commercial activities, the determination of whether or not past or current environmental issues might impact the operation and/or development of a bond project can be a key issue. Environmental due diligence and/or assessments may be undertaken of the project’s improved or unimproved properties.The responsibility for supervising the environmental due diligence and determining the appropriate assessment activities can become a source of contention. Example is found in a federal district court opinion from the Eastern District of Louisiana in Coves of the Highland Community Development District vs. McGlinchey Stafford, P.L.L.C. The opinion discusses a federal court complaint that had been filed against a law firm.The Plaintiff community development district had been established for the purpose of financing and managing a planned residential community in Louisiana. The opinion indicates that the law firm had been engaged to serve as counsel to the district in connection with its organization, bond issuance, and compliance activities for the real estate development. It is also states that Plaintiff alleged that Defendant verbally promised to “guide and oversee the entire process” and “to ensure that all necessary work was performed for the project …..”
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Bond (continued)Corps of Engineers issued a public notice in which it stated that the Plaintiff’s property had been used as a bombing, rocket, and gunnery range, and was the subject of an active investigation by that agency. Parish Engineer prohibited additional permits or approval until the unexploded ordinance and contamination had been fully investigated and remediated.Plaintiff alleged that it was unable to further develop the property or sell the lots, resulting in a default of the bonds.Plaintiff alleged that the law firm, had a duty to conduct a reasonable investigation into the environmental issues that might delay or prevent the development. It alleged that had the law firm performed a basic environmental assessment, it would have discovered that the development project site was within the bounds of a historic bombing range. Consider relevance to water/wastewater project?
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Environmental Consultant Limitation of Liability Clause
The CLIENT agrees to a limit Bodine’s liability to the CLIENT and all parties claiming through the CLIENT or otherwise claiming reliance on Bodine’s services, allegedly arising from Bodine’s professional acts or errors or omissions, to a sum not to exceed Bodine’s fees for the services performed on the project, provided that such claims are not attributable to Bodine’s gross negligence or intentional misconduct.In this latter event, the limit of liability will be increased to $25,000 less any applicable insurance amount covering alleged damages or claims. In no event shall Bodine or any other party to this agreement, including parties which may have claimed to have paid direct or indirect reliance on Bodine’s services be liable to other parties for incidental, indirect or consequential damages arising from any cause.
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Arkansas Game and Fish v. U.S. Government flooding of property need not be permanent to be a
Fifth Amendment Taking Physical taking claim alleging temporary deviations by Corps from
an operating plan for dams during 1993-2000 increased flooding in Black River Wildlife Management Area
Alleged timber mortality Court said no magic formula and situation factual inquires Time is a factor and degree invasion is reasonably foreseeable
along with reasonable investment-backer expectation/severity of interferences
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WATER SERVICE ISSUES/CONFLICT/COMPETITION1926(b)
Federal Debt Protection7 U.S.C. §1926(b)“The service provided or made available [by a
federally indebted rural water] association shall not be curtailed or limited by inclusion of the area… within the boundaries of any municipal corporation or other public body, or by the granting of any private franchise for similar service within such area during the term of such loan.”
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Typical 1926(b) Case
Municipal Expansion of Water Service Facilities into Rural Area
May be accompanied by Annexation of Territory into City
New Subdivision/Customers Served by City City Policy Arguments: Cost, Fireflow, Economic
Development, Sovereignty, etc. “Does § 1926(b) also preclude a state regulatory
agency from modifying the service area of a federally indebted utility. But we leave that issue for another day” North Alamo Water Supply Corporation v. City of San Juan, (5th Cir. 1995)
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U.S.C. 1926(b) (continued)
An overlap between a city and a federally indebted water district, the water district may prevail over a city that is either demanding that the city serve, or the city demanding that a franchise fee be paid for the right to serve. In Moore Bayou v. Jonestown, a letter indicating an intent to condemn water district assets was enough to trigger declaratory relief and an injunction in favor of the district.
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Environmental Liability Quantification and/or Clarification Amount of corrective action (including
regulatory issues)/third party claim Potential value of project/property
Wetlands Asbestos? Water Rights (Power plant example)
Likelihood costs to determine/quantify/clarify – legal, technical, etc.
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Foreclosure/Post Foreclosure Issues EPA/Arkansas Secured Creditor Exemptions
Apply (Remember Federal Requirements) Practical Issues
1. Statutory Secured Creditor Exemption (ASWMA Debris Example)
2. Water Rights – Value of Collateral
Environmental AssessmentPhase I ESA To access the innocent landowners defense under
Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)
To assess environmental liability and cost issues To quantify the extent of contamination and determine
costs before/after purchase for use in negotiations To identify existing or potential environmental hazards To identify whether or not a neighboring property has the
potential to impact the subject property To determine if further investigation is required Problem – Wetlands/Water Rights are not within scope
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Non-Scope Considerations(National Environmental Policy Act) Requires the consideration of environmental impacts for any
proposed construction project falling under federal jurisdiction. Projects crossing state lines (e.g., interstate pipelines), projects
receiving federal funds or projects that require a federal license.
Environmental issues include wetlands, wilderness areas, flood plains, threatened and endangered species, cultural resources, historical sites, noise and aesthetic issues and others.
A project halted due to a NEPA issue could result in a financial and public relations problem for the borrower and possibly the lender.
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Seller’s Due Diligence Checklist Objective is to sell property “as is” with full releases and
indemnification from the Purchaser with minimal impact upon price. Limited or no environmental reps and warranties and indemnities; Broad release from the purchaser; Control type and timing of cleanup; Make Purchaser responsible for any change in use of the
property; Prohibit certain uses on the site (e.g., day care centers,
residences, schools, parks); and Place a total economic cap on any claim arising from the
agreement. How are water rights/regulatory issues being addressed?
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Contractual Protections to Address Environmental Issue in the Assessment/Consultant Context Scope and Limitations:
- Key method for reducing the risk that work will be deemed to have breached the standard of care is often to carefully delineate the scope of work to be undertaken, including work which will not be performed (wetlands/water rights?).
□ Third Party Reliance:- The contract should explicitly limit reliance by third parties. This is accomplished by stating:
▫ That the services, data and opinions are for the sole use of the client, and are for a particular project and may be relied upon by anyone other than the client;▫ That the data, opinions and reports are not to be
distributed to the third parties without engineer’s written agreement;▫ That the services, data and options are perishable; i.e., that they should not be relied upon indefinitely; and▫ That the agreement is not assignable.
Scope of Consultant’s Expertise?
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WARRANTIES COVENANTS - KEY ISSUES THE FAILURE TO TAILOR LANGUAGE WHEN DOES A “COMPLIANCE” WARRANTY
FALL SHORT EX-RESIDUAL CONTAMINATION (N.E. ARKANSAS) EX-ASBESTOS EX-OFF-SITE WASTE EX-MOLD CHANGE IN USE – MODIFICATION EXPANSION OF PROCESS (NPDES, 404, ASBESTOS,
ETC.)