EPA Briefs AGC on Plans to Revamp CWA Jurisdiction, Solicits Input

The U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) are working on a proposed rule to revise the definition of “waters of the United States” that are subject to federal control and permit requirements under the Clean Water Act (CWA). AGC recently participated in an interagency meeting to discuss the potential small-business impact of EPA’s efforts to clarify this critical term which dictates when Clean Water Act Section 404 permits are required to perform construction work (i.e., dredge and fill activities) in streams, rivers, wetlands, lakes, and other waterbodies. EPA and the Corps’ current rulemaking effort is intended to codify the federal government’s current approach for determining when marginal water and isolated wetlands are subject to federal regulations in the wake of two key Supreme Court rulings that have caused confusion over the CWA’s scope.  The agencies admit that there is much confusion over what key terms mean.  This is particularly frustrating for the regulated community – including the construction and development industries – because if the waters are not considered “waters of the U.S.,” no costly and time-consuming federal permits are required under the CWA. AGC met with EPA, the Corps, and staff from the Office of Management and Budget (OMB) and the Small Business Administration (SBA) to learn more about the rulemaking proposal and to provide individual input for the EPA to consider as the rulemaking is further developed. EPA’s briefing of its initial efforts seems to indicate that it plans simply “codify” much – if not all – of a draft guidance proposed May 2 by the Corps and EPA, which described how the agencies would identify waters under the jurisdiction of the Clean Water Act in light of U.S. Supreme Court decisions on the issue.  The proposed guidance would expand federal jurisdiction of waters under the act. The Supreme Court issued divided opinions in 2006 on Clean Water Act protections for wetlands in Rapanos v. United States, 547 U.S. 715, 62 ERC 1481 (2006). AGC and many other groups have asked EPA to propose a rule on the issue, but maintain that EPA should start over and not use the proposed guidance as a basis for a rule.  EPA has said it plans to propose a rule but has not indicated whether it plans to finalize or withdraw the guidance.  See http://yosemite.epa.gov/opei/RuleGate.nsf/byRIN/2040-AF30?opendocument.  The projected date for publication of a proposed rule in the Federal Register is January 2012 http://yosemite.epa.gov/opei/rulegate.nsf/byRIN/2040-AF30?opendocument. Small-Business Meeting AGC small-business member Trey Pebley (Vice President of McAllen Construction, McAllen, TX and Chairman of AGC’s Environmental Forum Steering Committee) was selected by EPA to represent commercial construction firms’ at the meeting.  Mr. Pebley stressed in both verbal and written remarks that clarification is needed to prevent permitting delays, inconsistent jurisdictional determinations, and unwarranted risk and liability for small businesses.  AGC of America staff also participated in the meeting – at EPA’s request – and submitted a separate set of comments pointing out specific instances wherein the Supreme Court has established important limitations on the Corps and EPA’s authority to regulate work in water and wetlands and identified certain principles that the Corps must consider in determining whether non-navigable waters have the requisite nexus with traditional navigable waters.   In addition, AGC and several other organization wrote to EPA asking for additional time to provide comments.  EPA responded with a two-week extension. Taking advantage of the additional time to weigh in on the CWA jurisdiction rulemaking, AGC joined with several other small-business trade groups to submit additional comments.  The letter stresses that we are very concerned about EPA relying on the guidance as a basis for the new rule.  It would expand [federal] jurisdiction and lead to federal decisions encroaching on state, local, and private property rights.  AGC has recommended that EPA slow down and launch an advance notice of proposed rulemaking, rather than the proposed rule EPA is planning, and hold a more formal consultation to minimize the rule’s impact to small businesses. Fundamental principles of due process and good government require the regulatory agencies to clearly and uniformly set forth the scope of federal jurisdiction.  The regulated public must be given fair notice as to what conduct is prohibited under the CWA.  As the “operators” of construction sites, both property owners and their construction contractors risk fines and penalties for any failure to obtain a necessary permit.  Without clear definitions to guide field staff, permitting decisions will continue to be arbitrary and inconsistent.  What is more, vague and ambiguous regulatory requirements lead to lengthy, costly, and often unnecessary permitting requirements for critical public infrastructure and private projects. EPA Draft CWA Jurisdiction Guidance This spring, EPA and the Corps proposed new guidance and indicated rulemaking would follow.  See http://water.epa.gov/lawsregs/guidance/wetlands/upload/wous_guidance_4-2011.pdf.  The agencies received 300,000 comments.  AGC has opposed the proposed guidance, saying it would hinder the economy.  The EPA guidance focuses most heavily on advancing a broad interpretation of Justice Kennedy’s “significant nexus” test as the basis for CWA jurisdiction. The proposed guidance would include most tributaries of traditionally navigable waters, and wetlands near those tributaries, as “waters of the U.S.,” because the guidance would aggregate the influence of “similarly situated” streams and wetlands within a watershed on downstream jurisdictional waters.  All observers and EPA agree that the new guidance will significantly expand CWA jurisdiction from the view followed by the Bush Administration. Background Clean Water Act permits are required to discharge pollutants and dredged or fill material, into waters of the United States; such as streams, rivers, wetlands, lakes, and other waterbodies. If the waters are not considered “waters of the U.S.,” no federal permits are required under the CWA.  Recent court rulings and interpretations of water laws have sparked confusion and increased uncertainty regarding which waters are protected under the Clean Water Act, especially for some headwaters with ephemeral and intermittent flows, and some other waters such as prairie potholes and vernal pools. The EPA and the Army Corps of Engineers (Corps) are seeking to provide clarification as to what waters are considered jurisdictional and thus under the purview of the CWA.  The EPA and the Corps recently released a proposed guidance on determining jurisdiction of waters.  For more information, log on to http://water.epa.gov/lawsregs/guidance/wetlands/CWAwaters.cfm. For more information, contact Leah Pilconis at pilconisl@agc.org.