The Public Policy & Infrastructure practice continues to monitor the rollout of the “Waters of the United States” (“WOTUS”) rule proposed by the Environmental Protection Agency (“EPA”) and Army Corps of Engineers (“Corps”). The comment period for this proposed rule closed November 14, 2014. The purpose for this rule – ostensibly – is to settle 40 years of debate as to what constitutes waters of the United States under the Federal Water Pollution Control Act, commonly known as the Clean Water Act (“CWA”) 33 U.S.C. § 1251 et seq. But, as we have noted, the new policy presents an aggressive direction for EPA and the Corps, placing broad areas of wetlands, streams – including intermittent streams, and so-called “other waters” under federal scrutiny. The Public Policy Team assisted in developing client rulemaking comments for the WOTUS rulemaking.

The CWA applies to (1) waters used in interstate or foreign commerce; (2) interstate waters; (3) the territorial seas; (4) and any “impoundments” of these waters (e.g., reservoirs or other water basins created when water is dammed). The proposed rule does not change this, but adds three new bodies of water:

  1. All tributaries of the waters identified above
  2. All waters, including wetlands, adjacent either to the newly defined tributaries or to any of the other waters identified above
  3. So-called “other waters,” including wetlands. Section 2 (a)(5-7).

The impact on small businesses. If implemented as written, any entity that owns or operates land on or near these bodies of water will be facing a host of new permitting requirements. But the burden of compliance would fall disproportionately on golf courses, farmers, homebuilders and other small businesses throughout the country. They will need federal permission – which is not guaranteed – for any activity that may affect these waters, or face civil penalties at the current rate of $37,500 per day for each violation. This could halt operations at these small businesses or even cause them to close altogether. It was because of these concerns that the Small Business Administration’s Office of Advocacy, in a letter dated October 1, 2014, recommended the EPA “withdraw the rule and…conduct a Small Business Advocacy Review panel before proceeding any further with this rulemaking.” Dr. Winslow Sargeant, Chief Counsel for Advocacy, noted that a Small Business Advocacy Review panel is required under the Regulatory Flexibility Act (Pub. L. 104-121, Title II, 110 Stat. 857 (1996)) “when a rule is expected to have a significant economic impact on a substantial number of small entities.” He stated that the Office of Advocacy believes that the proposed rule does have “direct, significant effects on small businesses.”

The Office of Advocacy echoes the concerns being raised by many in the small business community. These concerns were discussed in a “Small Entities Meeting” at EPA headquarters October 15, and will likely be raised again in the thousands of comments submitted on the rule. The new Congress is anticipated to respond to the proposed rulemaking, as EPA actions, generally, will be closely reviewed.