On September 4, 2026, the U.S. Environmental Protection Agency and U.S. Department of the Army announced a Supplemental Notice of Proposed Rulemaking seeking additional public input on the definition of “waters of the United States” (WOTUS).
The supplemental proposal introduces additional regulatory alternatives that the agencies will consider alongside the WOTUS rule proposed in 2025. According to EPA and the Army, the objective is to develop a durable final rule that fully reflects the U.S. Supreme Court’s 2023 decision in Sackett v. EPA while providing greater regulatory certainty for landowners, developers, agriculture, energy producers and other regulated interests.
For the environmental banking industry, the rulemaking remains especially important. The definition of WOTUS determines the geographic scope of federal Clean Water Act jurisdiction and, consequently, where Section 404 permits and compensatory mitigation requirements may apply. Changes in federal jurisdiction can directly affect demand for wetland and stream mitigation credits, mitigation bank service areas, project planning and permitting decisions.
EPA and the Army emphasized that waters falling outside federal jurisdiction may remain regulated under state, Tribal or local law, underscoring the increasingly important interaction between federal and state aquatic-resource protection programs.
The agencies previously received more than 220,000 comments on the 2025 proposed rule during a comment period that closed January 5, 2026. The new supplemental proposal is intended to gather stakeholder input on a limited number of additional regulatory approaches without withdrawing or prejudging alternatives contained in the original proposal.
Once the Supplemental Notice is published in the Federal Register, EPA and the Army will provide a 30-day public comment period.
Additional information and updates on the rulemaking are available through EPA’s Waters of the United States webpage: https://www.epa.gov/wotus.
The National Environmental Banking Association will continue monitoring the rulemaking and its potential implications for mitigation banking, Clean Water Act permitting, and aquatic-resource conservation.
Mitigation banking is often discussed in terms of credits—wetland credits, stream credits, or other units used to compensate for unavoidable environmental impacts. But the value of a mitigation bank extends far beyond the regulatory credit itself. Well-designed mitigation banks can provide a broad range of ecosystem services that benefit watersheds, wildlife, communities, and taxpayers.Cleaner Water •
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