New WOTUS Rule Creates More Uncertainty for Small Business: EPA Should have Delayed Rule Until Supreme Court Rules on Sackett Case

Date: January 05, 2023

On December 30, 2022, the US Environmental Protection Agency (EPA) and the US Army Corps of Engineers finalized a rule that significantly expands the definition of “waters of the United States,” under the Clean Water Act. EPA failed to listen to NFIB and concerned small businesses, including farmers, ranchers, home builders, and contractors in writing its new rule, expanding EPA’s regulatory authority beyond the limits set by Congress in the CWA, and affirmed by the US Supreme Court. NFIB’s statement on the new rule is here.

In 2020 EPA issued the Navigable Waters Protection Rule, or NWPR, which NFIB supported. It provided greater clarity for small business owners and landowners. For instance, NWPR removed federal jurisdiction over intermittent streams and stated that ditches that only contained water in response to rainfall would not be subject to federal control. Under EPA’s new 2022 rule, ditches are no longer excluded.

When Congress gave EPA and the Army Corps authority over US waters it clearly didn’t mean any water, anywhere. It meant those waters important for commerce.

The result of the overreach in this new rule will disproportionately impact small businesses as Clean Water Act permits can cost tens of thousands of dollars and lead to lengthy project delays. EPA failed to consider the direct impact on small businesses as mandated by federal law.

The rule will make it more difficult for landowners to ascertain whether their land is subject to EPA jurisdiction by introducing subjective concepts such as “material influence.” EPA jurisdiction will largely be determined on case-by-case basis, which offers no certainty for most landowners who will need to hire consultants to navigate the lengthy and expensive permitting process.

Furthermore, NFIB has maintained that EPA should have waited for the Supreme Court to rule in Sackett v. EPA, in which the Small Business Legal Center filed a brief. The WOTUS definition is likely to shift again once the Court rules further adding to the uncertainty of small businesses.

The administration’s issuance of the WOTUS rule comes as small businesses continue to struggle under record high inflation, ongoing supply chain issues, labor shortages, and other anticipated regulatory changes.


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