Arizona Supreme Court holds that a new construction integrated into an existing mine site is not subject to the Clean Water Act’s heightened regulations.

A mining company built a new vertical excavation shaft at an existing copper mine site. The Arizona Department of Environmental Quality (ADEQ) permit allowed the company to discharge mine site water from the new shaft into an impaired waterway, with specified restrictions.

The San Carlos Apache Tribe challenged the permit before the Arizona Water Quality Appeals Board, arguing the new mine shaft was a “new source” of pollutant discharge under the federal Clean Water Act (CWA), subject to more stringent performance standards and permitting requirements than “existing sources.” After an administrative hearing and reconsideration by ADEQ, the permit was affirmed. The Tribe appealed to the superior court, which also affirmed ADEQ’s decision.

In a split opinion, the court of appeals reversed the superior court’s decision. The majority found that the new mine shaft was a “mine,” rather than a component of a mine, and therefore a “new source” under the CWA.

The Arizona Supreme Court reversed the appellate court and described the three-step test to determine whether a newly constructed source of pollutants is a “new source” under the CWA. The Court explained that the test follows the order in which the federal regulations appear, starting with the broadest criteria and then narrowing in scope. 

The first step evaluates whether the source fits within the definition of “new source” under 40 C.F.R. § 122.2, considering the source’s physical characteristics and timing of construction. A “new source” must be a “building, structure, facility, or installation” that discharges (or may discharge) pollutants, the construction of which began after “applicable” standards of performance for the mine site as a whole were promulgated (or proposed) under section 306 of the CWA.  See 40 C.F.R. §§ 122.2, 122.29(b)(1).

If the source meets both definitional requirements in step one, step two then evaluates whether the source fits within one of the criteria listed in 40 C.F.R. § 122.29(b)(1), considering the source’s location and integration with existing sources. A “new source” must be either (i) the only source on site or (ii) a total replacement of an existing source at the same site—neither of which was at issue in this appeal—or (iii) substantially independent of existing sources at the same site. See 40 C.F.R. § 122.29(b)(1).

If the source meets both definitional requirements in step one and at least one of the criteria in step two, step three then evaluates whether there are “independently applicable” standards of performance for the new source specifically (rather than the mine site as whole) under section 306 of the CWA. See 40 C.F.R. § 122.29(b)(2). If so, the source is a “new source” under the CWA; if not, it is a “new discharger.”

Here, the Court found that the new mine shaft met the definitional requirements of a “new source” in step one because it was undisputedly a “building, structure, facility, or installation” discharging pollutants and the record clearly indicated the shaft was built after the promulgation of the CWA’s applicable standards of performance for copper mines. However, it did not meet the criterion in step two because the shaft was engaged in the same general type of activity, and integrated with, existing sources at the same mine site and was thus not an independent source.

Although the analysis would ordinarily stop after the source failed to meet any of the criterion in step two, the Court evaluated step three to clarify the test. The Court found that the new shaft was a component of the mine rather than a mine itself. Because the CWA did not include standards of performance “independently applicable” to mine shafts, the shaft here was not a “new source” under step three.

As such, the Court held that the new mine shaft was not a “new source” under the CWA and consequently vacated paragraphs 1–20 and 30–72 of the court of appeals’ opinion and affirmed the superior court’s decision that ADEQ acted within its discretion when it issued the mining company’s permit.

Justice King authored the opinion of the Court, in which Chief Justice Brutinel, Vice Chief Justice Timmer, and Justices Bolick, Lopez, Beene, and Montgomery joined.

Posted by: Payslie M. Bowman