Bloomberg BNA: Uncertainties Trouble Lawmakers, Businesses Looking at Clean Water Act Jurisdiction Rule 
By Alan Kovski
May 29, 2014

 A proposed rule to delineate Clean Water Act jurisdiction was pilloried during a May 29 congressional hearing as a measure creating far too much uncertainty and potential cost for small businesses, despite statements of the Obama administration to the contrary.

The hearing of the House Small Business Committee provided a forum for witnesses and lawmakers to criticize vagueness above all else in the proposed rule. Republican and Democratic leaders of the committee also questioned why the administration didn't assess the potential impacts of the proposal on small businesses.

The Environmental Protection Agency and the U.S. Army Corps of Engineers avoided the obligation to assess those impacts by saying that the rule isn't expected to have a significant impact on a substantial number of small entities.

“Had the agencies conducted outreach to and gotten input from small businesses, as required by the Regulatory Flexibility Act, perhaps they would have identified and fixed some of the problems with the rule before it was proposed,” Rep. Sam Graves (R-Mo.) said.

Rep. Nydia Velazquez (D-N.Y.), ranking member of the committee, expressed her own concern about the finding of no significant impact and said of the proposal, “It provided no justification for this finding.”

Barriers to Basic Work Feared

Witnesses included three operators of small businesses who said the proposed rule posed the risk of costs and delays that will kill work of many kinds—home building, quarrying, ranching and any other work that might be somewhere in the undefined floodplain or riparian area of a river or stream.

Jack Field, a Washington rancher testifying on behalf of the National Cattlemen's Beef Association, said the proposed rule could interfere with simple activities, such as building a fence or a ditch in a field on his own property near a stream. For such activities, the law would create the potential for fines or citizen lawsuits, he said.

“Despite what EPA says, they did not have a meaningful dialog with the small business community,” Field said. “It's beyond frustrating as to why EPA did not reach out.”

Fields testified that one of the troublesome aspects of the uncertainties in the proposed rule on jurisdiction was the inability of a small business to tell a lender with certainty that the business's activities wouldn't violate the Clean Water Act.

Alan Parks, speaking on behalf of the National Stone, Sand and Gravel Association, said of the proposed rule, “If I could sum it up in three words it would be cost, delay and uncertainty.”

‘Significant Nexus' Sought

Rep. Kurt Schrader (D-Ore.) said the EPA and the Army Corps of Engineers hadn't honored their commitment to determining Clean Water Act jurisdiction by including only waters with a “significant nexus” to navigable waters.

Like Republicans on the committee, he appeared to consider the proposal an unwarranted expansion of jurisdiction.

The idea of limiting jurisdiction with a “significant nexus” test came from the Supreme Court ruling in Rapanos v. United States (547 U.S. 715 (2006)), in which a majority of the court concluded the agnecy and the corps were overreaching their authority in some of their efforts to regulate wetlands.

William Buzbee, an Emory University law professor and member of the advocacy group Center for Progressive Reform, disagreed with the remarks of other witnesses and suggested the federal agencies were moving in the right direction toward clarification, lower costs and less litigation.

Schrader responded that he found Buzbee's testimony “pretty incredulous.”

Tom Woods, testifying on behalf of the National Association of Home Builders, said, “This rule will certainly lead to increased litigation.”

Woods and Parks both testified that the proposed rule would create great obstacles for their businesses because of their uncertainty of whether something such as groundwater seepage or a roadside ditch could trigger Clean Water Act regulatory requirements.

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