SBA Warns EPA to Abandon Waters of the U.S. Rule

Swamp Stomp

Volume 15, Issue 2

On October 1, 2014, the Office of Advocacy, an independent office within the Small Business Administration (SBA), filed public comments with the Army Corps of Engineers and the Environmental Protection Agency (EPA) in response to the proposed “Definition of Waters of the United States under the Clean Water Act” rule. Advocacy thinks that the EPA ought to have conducted a Small Business Advocacy Review Panel before releasing the proposed rule for open comment. Had Advocacy been consulted prior to the public release, then it would have been able to raise its concerns in private rather than in a public forum. Subsequently, Advocacy was forced to publicly advise that the EPA withdraw the proposed rule and conduct a private panel before re-proposing the rule.

In the letter addressed to Gina McCarthy, EPA Administrator, and Maj. Gen. John Peabody, Deputy Commanding General of Civil and Emergency Operations of the U.S. Army Corps of Engineers, Winslow Sargeant, Chief Council for Advocacy, Kia Dennis, Assistant Chief Council for Advocacy, and Stephanie Fekete, Legal Fellow, state that the “EPA and the Corps have improperly certified the proposed rule under the Regulatory Flexibility Act (RFA) because it would have direct, significant effects on small businesses.”

Sargeant, Dennis, and Fekete say, “The RFA requires federal agencies to consider the impact of their proposed rules on small businesses. When a rule is expected to have a significant economic impact on a substantial number of small entities, agencies must evaluate the impact, consider less burdensome alternatives, and in the case of the EPA, convene a Small Business Advocacy Review Panel.” Therefore, by failing to consult with the SBA, the EPA broke the law.

In March, 2014, McCarthy claimed, “Our proposal does not add to or expand the scope of waters historically protected under the Clean Water Act.” Now, however, Advocacy, an office that Congress created to defend the interests of small businesses and small local governments, states that such claims are erroneous.

Furthermore, the SBA claims that the statements made by the EPA and Army Corps of Engineers affirming that the proposed rule actually narrows EPA jurisdiction are  misleading because they are based on the 1986 definition of the scope of the Waters of the U.S.

Both the SBA and the Office of Management and Budget claim the outdated definition could only be used with the aim of misleading the public. Sargeant and his team state, “The 1986 regulation does not represent the current method for determining jurisdiction and has not served that purpose for more than thirteen years. Using an obsolete baseline improperly diminishes the effects of this rule.”

The SBA estimates that CWA 404 permit costs would increase somewhere between $19.8 million and $52 million dollars annually, while section 404 mitigation costs would rise somewhere between $59.7 million and $113.5 million annually. Sargeant and the SBA state that “these amounts do not reflect additional possible cost increases associated with other Clean Water Act programs, such as Section 402 permitting or Section 311 oil spill prevention plans. They also “leave small businesses without a clear idea of the additional costs they are likely to incur for these Clean Water Act programs.”

Sargeant concludes by stating, “The rule will have direct and potentially costly impact on small businesses. The limited economic analysis which the agencies submitted with the rule provide ample evidence of a potentially significant economic impact.” The EPA has “obligations under OMB guidance and the RFA.” As the debate over the proposed rule moves forward, the EPA ought to be held responsible for meeting its obligations, and disciplined appropriately if they continue to ignore them.

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