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EPA Waters Rule Threatens Small Businesses

Date: July 08, 2014

The Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (ACE) recently proposed a rule that will greatly expand federal Clean Water Act (CWA) jurisdiction over small businesses and private land owners. NFIB is fighting to stop this regulatory land-grab.

What are EPA and ACE proposing?
The EPA and ACE are have proposed to change the Clean Water Act’s definition for “waters of the United States.” Though traditionally limited to navigable waters, and adjacent waters, this new proposal would classify lands as waters of the United States if—at any point during the year—they have any water overflow.

The new rule would bring seasonal streams, ponds, ditches, depressions in fields, and large puddles into the CWA’s jurisdiction.

How am I affected by federal jurisdiction?
If EPA and ACE assert jurisdiction over your land, it will be essentially impossible—or at least tremendously expensive—to do anything with your land. This means you will not be allowed to alter land formations, which prevents landowners from digging or excavating on their properties, or even laying gravel. While it is possible to obtain a special permit to begin using portions of land covered by the CWA, these permits are extremely expensive. CWA permits can cost tens of thousands of dollars; if not more—a major U.S. Supreme Court case from 2006 cited the average cost at $270,000. There are inevitably long waits for permit processing, and there is no guarantee your permit will be approved.

The penalties for violations of the Clean Water Act can be up to $37,500 per day.

Does EPA and ACE have the authority to propose these changes?

When Congress passed the Clean Water Act in 1972, it made clear that the CWA protects “waters of the United States.” The courts have understood this to mean traditionally navigable waters, but the precise reach of CWA jurisdiction is a point of controversy. The Supreme Court has taken the issue up three times, and it still remains a murky question. But what is clear is that EPA and ACE cannot expand their jurisdiction beyond what the limitations the Supreme Court has recognized in those cases. Accordingly, NFIB takes issue with the proposed jurisdictional expansion here because EPA and Army Corp are seeking to expand CWA jurisdiction beyond what the Supreme Court has allowed in the past—and in contravention of a 2006 Supreme Court decision.

For more information on these jurisdictional issues, check out the NFIB Blog.

Did the agencies adequately consider the impact of this change on my small business?
Regrettably, they did not meet this obligation legally required by the Regulatory Flexibility Act. EPA is alleging that since this is a simple definition change, there are no major costs directly imposed on small businesses. There will certainly be costs directly imposed on small businesses through the permit process and other compliance requirements. In addition, the proposed rule makes it clear that many waters will need to be determined on a case-by-case basis, therefore providing little, if any, additional certainty.

The agencies say that most farms are exempted by the rule. Does this rule affect my farm?
It absolutely does. There are some exemptions from the CWA’s dredge and fill requirements for prior converted cropland. However, many types of farming activities would still trigger compliance. For example, the use of pesticides on a field newly-defined as a water of the U.S. could be subject to regulation.

What can I do to get involved?
NFIB encourages members to comment directly to the agencies about how this rule will impact your business. Comments were due in July 2014, but in response to an NFIB request the agencies extended the comment period by 90 days. The comments are now due October 20, 2014. Read NFIB's letter requesting that the agencies extend the written comment period.

We also want to hear from you. If you have a story to share about how you will be affected, please contact us.

Important Links
Read NFIB's letter in support of S. 2496, the Protecting Water and Property Rights Act of 2014. This legislation will provide important regulatory relief from an unprecedented effort by the U.S. Environmental Protection Agency and the U.S. Army Corps of Engineers to expand federal authority over private property.

Read NFIB's letter thanking the House Committee on Appropriations and Subcommittee on Energy and Water for including language in the Fiscal Year 2015 Energy and Water Development, and Related Agencies Appropriations bill to prevent the U.S. Army Corps of Engineers from using federal funds to develop, adopt, implement, administer, or enforce any change to the definition of waters under the jurisdiction of the Federal Water Pollution Control Act (Clean Water Act).

Comment on the proposed rule at Regulations.gov 

Read the proposed rule

Read commentary on the proposed rule by the NFIB Legal Center’s Luke Wake. Part 1 | Part 2

Read NFIB’s Letters to the White House regarding the Waters of the U.S.:

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