[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
WILL EPA'S `WATERS OF THE UNITED STATES' RULE DROWN SMALL BUSINESSES?
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HEARING
before the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
MAY 29, 2014
__________
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13
Small Business Committee Document Number 113-071
Available via the GPO Website: www.fdsys.gov
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HOUSE COMMITTEE ON SMALL BUSINESS
SAM GRAVES, Missouri, Chairman
STEVE CHABOT, Ohio
STEVE KING, Iowa
MIKE COFFMAN, Colorado
BLAINE LUETKEMEYER, Missouri
MICK MULVANEY, South Carolina
SCOTT TIPTON, Colorado
JAIME HERRERA BEUTLER, Washington
RICHARD HANNA, New York
TIM HUELSKAMP, Kansas
DAVID SCHWEIKERT, Arizona
KERRY BENTIVOLIO, Michigan
CHRIS COLLINS, New York
TOM RICE, South Carolina
NYDIA VELAZQUEZ, New York, Ranking Member
KURT SCHRADER, Oregon
YVETTE CLARKE, New York
JUDY CHU, California
JANICE HAHN, California
DONALD PAYNE, JR., New Jersey
GRACE MENG, New York
BRAD SCHNEIDER, Illinois
RON BARBER, Arizona
ANN McLANE KUSTER, New Hampshire
PATRICK MURPHY, Florida
Lori Salley, Staff Director
Paul Sass, Deputy Staff Director
Barry Pineles, Chief Counsel
Michael Day, Minority Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Sam Graves.................................................. 1
Hon. Nydia Velazquez............................................. 2
WITNESSES
Mr. Jack Field, Owner, Lazy JF Cattle, Yakima, WA, testifying on
behalf of the National Cattlemen's Beef Association and
Washington Cattlemen's Association............................. 3
Mr. Alan Parks, Vice President, Memphis Stone and Gravel Co.,
Memphis, TN, testifying on behalf of the National Stone, Sand
and Gravel Association......................................... 5
Mr. Tom Woods, President, Woods Custom Homes, Blue Springs, MO,
testifying on behalf of the National Association of Home
Builders....................................................... 7
Mr. William Buzbee, Professor of Law, Director, Emory
Environmental and Natural Resources Law Program, Emory Law
School, Atlanta, GA............................................ 9
APPENDIX
Prepared Statements:
Hon. Blaine Luetkemeyer...................................... 32
Mr. Jack Field, Owner, Lazy JF Cattle, Yakima, WA, testifying
on behalf of the National Cattlemen's Beef Association and
Washington Cattlemen's Association......................... 34
Mr. Alan Parks, Vice President, Memphis Stone and Gravel Co.,
Memphis, TN, testifying on behalf of the National Stone,
Sand and Gravel Association................................ 39
Mr. Tom Woods, President, Woods Custom Homes, Blue Springs,
MO, testifying on behalf of the National Association of
Home Builders.............................................. 47
Mr. William Buzbee, Professor of Law, Director, Emory
Environmental and Natural Resources Law Program, Emory Law
School, Atlanta, GA........................................ 56
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
American Public Gas Association (APGA)....................... 64
American Road & Transportation Builders Association (ARTBA).. 68
National Agricultural Aviation Association (NAAA)............ 72
National Federation of Independent Business (NFIB)........... 75
National Wildlife Federation (NWF)........................... 83
Responsible Industry for a Sound Environment (RISE).......... 85
Trout Unlimited.............................................. 88
United Ag.................................................... 91
WILL EPA'S `WATERS OF THE UNITED STATES' RULE DROWN SMALL BUSINESSES?
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THURSDAY, MAY 29, 2014
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 1:00 p.m., in Room
2360, Rayburn House Office Building. Hon. Sam Graves [chairman
of the Committee] presiding.
Present: Representatives Graves, Chabot, King, Luetkemeyer,
Tipton, Herrera Beutler, Huelskamp, Schweikert, Bentivolio,
Collins, Rice, Velazquez, Schrader, Chu, and Payne.
Chairman GRAVES. Good afternoon, everyone. We will call the
hearing to order. I want to thank our witnesses for being here.
In my four years as chairman, the Committee on Small
Business has held more than 20 hearings examining the effects
of regulations on small businesses and the economy. However,
few regulations examined at these previous hearings are as
expansive and potentially damaging to small businesses as the
recently proposed ``Waters of the United States'' rule. This
rule as currently drafted could extend the regulatory reach of
the Clean Water Act to thousands of small streams, ditches,
ponds, and other isolated waters, some of which have very
little or no connection to traditionally navigable waterways.
The agency claims that the proposed rule will increase
clarity as to which waters are subjected to the Clean Water Act
jurisdiction. However, this proposed rule creates more
confusion, not less. Terms like neighboring, floodplain,
riparian an area, tributary, and significant nexus are vaguely
defined and fail to clarify where the Clean Water jurisdiction
will end.
Under this proposed rule, farmers, ranchers, home builders,
and a variety of other small businesses could find their lands
and livelihoods subject to the Clean Water Act jurisdiction for
the very first time. And the burdens of this regulatory regime
extend beyond the need to obtain federal permits and will also
require costly and time-consuming mitigation activities and
project modifications. While this proposed rule clearly has
significant consequences for small businesses, the EPA and Army
Corps of Engineers failed to assess those impacts. Had the
agencies conducted research 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. This rule
threatens to drown small businesses in unnecessary regulatory
requirements, and for that reason, I hope the EPA and the Corps
will withdraw the rule and conduct the required small business
impact analysis and outreach before proceeding.
And again, I want to thank all of our witnesses for being
here, each one of you. We look forward to your testimony, and I
now yield to Ranking Member Velazquez for her opening
statement.
Ms. VELAZQUEZ. Thank you, Mr. Chairman.
Since its establishment in 1970, the Environmental
Protection Agency has been vital to protecting public health
and safety. Over the last 40 years, a series of laws passed by
Congress have placed greater responsibility on the agency for
ensuring the water we drink and the air we breathe is safe and
not a threat to human health. Most of us, including many on
both sides of the aisle, likely agree that the goals of the
EPA, protecting our health and environment, should be a
priority. Reducing pollution and environmental risk is not only
important to public health, but carries important economic
benefits as well. However, as the EPA carries out its vital
mission, it must always be mindful of how new rules and
regulations impact our nation's small businesses.
One of the EPA's primary responsibilities is the
enforcement of the Clean Water Act, whose implementation is
shared in part with the Army Corps of Engineers. Through these
steps and the implementation of the act, Americans are
healthier, our waterways are being remediated, and as a result,
many industries are seeing greater opportunities. In light of
this, it is clear that no small business wants our water supply
to be compromised. In fact, we have heard time and again in
this committee, how entrepreneurs are pioneering many of the
clean technologies that are reducing pollution. Still, when we
talk about regulations, the truth of the matter is that such
rules almost always impact small firms.
Today, we will examine one such regulation--the EPA and
Army Corps' proposed rule redefining which waters are subject
to the Clean Water Act. Under this proposal, new bodies of
water will become subject to the act, while others will be
excluded. Additionally, steps are taken to preserve further
exemptions for normal farming and ranching activities, such as
irrigation and the runoff of stormwater, activities that are
often undertaken by small firms.
Regardless, these changes will result in winners and
losers, and unfortunately, some small businesses, particularly
those involved in construction and agriculture, will likely be
subject to greater regulatory costs. It is important to note,
however, that there are many sectors also dominated by small
businesses which will benefit. This includes companies engaged
in recreation, tourism, hunting, fishing, and boating. For
those companies, their livelihood is often tied to clean water.
This rule also brings with it water economic benefits, making
our drinking water safer and providing farms with clean water
to irrigate their crops. Unbalanced, it appears that there will
be small businesses on both sides of this issue.
Regardless, small businesses need a rule that works for
everyone, not just a few. With this in mind, it is concerning
that no regulatory flexibility analysis was performed. While
the agency certified this proposed rule would not have a
significant economic impact on a substantial number of small
entities, it provided no justification for this finding. Such
agency indifference is something that this committee is all too
familiar with. Similarly, the EPA's analysis found that there
was no need to conduct a small business advocacy review panel,
a special requirement for the EPA.
During today's hearing, I am interested in witnesses'
perspectives on the agency's rationale for not taking these
steps. These issues are not new to this committee. It is
critical that as new rules are developed, small business
interests must be balanced against our desire to preserve the
environment. Central to this is making sure small firms have
the ability to provide input and make substantive comments
throughout the regulatory process.
Today, I hope to hear very clearly how EPA concluded or did
not conduct outreach to small firms. I want to know what is
working and what is not, and most of all, how the process can
be improved. Such steps are critical, especially as we continue
to consider changes to the Regulatory Flexibility Act. As with
most regulatory matters, there are small businesses on both
sides of this issue, and given this, it is important that we
hear from them. The reality is that small firms and their job
creating potential are central to our economy as is a clean and
healthy environment. Balancing these two goals has never been
more important and more difficult, and I look forward to
today's hearing to gain insight into these very matters.
With that, I thank our witnesses for their participation,
and I yield back the balance of my time. Thank you, Mr.
Chairman.
Chairman GRAVES. If any other Committee members have an
opening statement prepared, I would ask that you submit it so
we can include it in the record.
I would also like to take just a minute to explain the
lights. There are five minutes for testimony, and when it comes
down to one minute, the yellow light will come up. And we ask
that you try to adhere to it, but if you go over, we are not
going to stop you.
And with that, we will start with introductions. And our
first witness is Jack Field. He is the owner of a small
commercial cattle operation, the Lazy JF Cattle Company in
Yakima, Washington. Mr. Field also serves as the executive vice
president of the Washington Cattlemen's Association, and in
that role he works with livestock producers and educates them
about state and federal water quality regulations. Mr. Field is
also a member of the National Cattlemen's Beef Association, and
he is testifying today on behalf of both organizations. Thanks
for being here and coming all this way. And we look forward to
your testimony.
STATEMENTS OF JACK FIELD, OWNER, LAZY JF CATTLE COMPANY; ALAN
PARKS, VICE PRESIDENT, MEMPHIS STONE AND GRAVEL COMPANY; TOM
WOODS, PRESIDENT WOODS CUSTOM HOMES; WILLIAM BUZBEE, PROFESSOR,
EMORY ENVIRONMENTAL AND NATURAL RESOURCES LAW PROGRAM, EMORY
LAW SCHOOL
STATEMENT OF JACK FIELD
Mr. FIELD. Thank you, Mr. Chair.
Good afternoon. My name is Jack Field. I am a cattle
rancher from Yakima, Washington, and the executive vice
president of the Washington Cattlemen's Association. WCA is an
affiliate of the National Cattlemen's Beef Association of which
I am also a member.
Thank you to the chairman and ranking member for allowing
me to testify today on the impacts of the EPA and Army Corps'
proposed expanded definitions of waters of the United States. I
will also provide my concerns with the interpretive role that
was promulgated alongside this proposal.
I own and manage 120 head of cattle, which is about the
average number of cattle for a rancher in the U.S., which means
the average producer falls under what the law considers a small
business. My cattle drink from tanks which I pump from a stream
so I can protect potential bull trout habitat. They also water
from irrigation ditches, ponds, creeks, seeps, and puddles that
they find. It is important to me and my operation to have clean
water.
The cattle industry prides itself on being good stewards of
our country's natural resources. We maintain open spaces, and
provide wildlife habitat. We also provide the country with
those juicy ribeyes we love to throw on the grill on summer
days like today.
To provide these important functions, cattlemen must be
able to operate without excessive federal burdens like the one
we are discussing today. As a producer and the head of a state
association, I can tell you after reading this proposal, it has
the potential to negatively impact every aspect of my operation
by dictating land use activities in Washington State from 2,600
miles away. After reading the proposal, I can say one thing is
clear--this proposal is not clear.
There are undefined terms and phrases throughout the rule.
The proposal would include ditches as waters of the U.S. if a
regulator can distinguish a bed, a bank, and an ordinary high
water mark. The proposal would also make everything within a
floodplain and a riparian area a water by considering them
adjacent waters. The result could be to eliminate the use of my
entire summer pasture which is located wholly in a floodplain.
As you can see looking on the screen, I have a ditch
running through my pasture. Cattle utilize this for drinking.
In my judgment, this could easily qualify as a water of the
U.S., opening me and my ranch up to significant liability. Not
only could I be required to obtain a 404 permit for grazing
cows in the pasture, but making it a federal water there are
now considerations under the National Environmental Policy Act
(NEPA) and the Endangered Species Act due to the federal
decision-making in granting and denying a permit.
There also is a citizens' supervision under section 505 of
the Clean Water Act that would keep me up at night. Instead of
improving water quality, it is my belief, and the belief of
both WCA and NCBA that this proposal will decrease water
quality by discouraging conservation. I recently--next
picture--completed a voluntary project which you can see here.
I installed a fence that creates a riparian pasture so I can
manage grazing that occurs within the riparian area, which also
protects water quality. If this proposal and the interpretive
rule I enforced when I started this project, I would not have
completed it due to the significant legal liability the
proposal created. If I implemented a conservation practice that
is not on this prescriptive list of 56 practices outlined as
part of the interpretive rule, I could fall outside of the
exemption and be subject to a 404 dredge and fill program.
While this may not have been the intent, this was the result of
the proposal.
The fence in the picture was cost-shared with local dollars
from my conservation district, which does not meet the
strenuous NRCS standards due to wider post spacing and reduced
numbers of wires and stays. I would not go through the hassle
of obtaining the 404 permit for such a small project like this.
The total fence was roughly a quarter mile with an approximate
cost of $1,400. My estimate in looking at this, with NRCS
standards, it would cost me additionally another $300 per
quarter mile. That may not sound like a lot, but when you
expand that over several hundreds of acres and the fencing that
goes with that, it adds up. And on a small operation like mine,
every dollar counts.
Future conservation projects will not be implemented if
this interpretive rule and the definitions are allowed to move
forward. I could not afford to be at risk of being in violation
of the Clean Water Act with violations and fines that could add
up to $37,000 day and the risk of potential criminal sanctions.
I want to do my part for the environment, but I cannot if it
would jeopardize my entire operation.
This did not have to be the result. All the agencies had to
do was to engage stakeholders early in the process, incorporate
our suggestions, and we would be much further along in crafting
a rule that actually clarifies the scope of the Clean Water Act
jurisdiction. Despite what EPA is saying, they did not have a
meaningful dialogue with the small business community. There
was zero outreach to the agricultural community before the rule
was proposed and before the interpretive rule went into effect.
What we are left with now is a proposal that does not work for
small businesses, does not work for cattle ranchers, and does
not work for the environment.
I would ask that the agencies ditch the rule. I believe we
can do a lot better than this. Thank you.
Chairman GRAVES. Thank you, Mr. Field.
I am trying to decide if we try to go through one more
witness. We will go through one more witness. Unfortunately, we
have had a series of votes called.
Our next witness is Alan Parks. He is the vice president of
Memphis Stone and Gravel Company, which is a locally owned and
operated aggregate supplier in Memphis, Tennessee and North
Mississippi. As vice president, Mr. Parks is involved in all
phases of the company's development of sand and gravel
resources, including permitting and environmental compliance,
and he has a degree in mining engineering. He previously worked
for the Tennessee Department of Environment and Conservation.
Mr. Parks is testifying on behalf of the National Stone, Sand,
and Gravel Association. Thanks for being here.
STATEMENT OF ALAN PARKS
Mr. PARKS. Chairman Graves and members of the Committee,
thank you for inviting me to testify on behalf of the National
Stone, Sand, and Gravel Association.
My name is Alan Parks, and I am vice president of Memphis
Stone and Gravel Company, which was started in 1910 and remains
a family-owned business. We have eight active mining facilities
in Tennessee and Mississippi.
There are more than 10,000 construction aggregate
operations nationwide. Of particular relevance to this hearing,
70 percent of our members are considered small business.
Aggregates are the chief ingredient in asphalt pavement and
concrete, and used in nearly all building construction. As the
industry that provides essential construction materials, we are
deeply concerned by EPA's expansion of the Clean Water Act.
This would cause further harm to an industry that has seen
production drop by 39 percent since 2006.
The companies in our industry remove resources from the
ground, then process them into usable construction products. We
do not use or discharge any hazardous chemicals. After we
recover these resources, we return the land to other productive
uses, such as farm land and recreational lakes.
While stone, sand, and gravel resources may seem to be
everywhere, these materials must meet strict technical
guidelines to make our roads and infrastructure safe and
durable. Unlike other businesses, we cannot simply choose where
we operate. We are limited to where natural forces have
deposited these materials. Because high quality aggregate
deposits were often created by water, they are often located
near water. Water management is a significant issue for any
company in our industry.
EPA claims this rule is needed because so many waters are
unprotected. We believe that is not the case. Before breaking
ground on any project, we evaluate whether we are affecting
jurisdictional water, which requires consultation with the
Corps and state officials. There is an extensive review of all
of our projects to ensure compliance with local, state, and
federal rules governing how we can or cannot affect land and
water resources.
While there are many inefficiencies in the current
regulatory system, adding vague terms and undefined concepts to
an already complicated program is not the way to improve the
process. For example, EPA states groundwater is excluded from
this rule, but the rule also says that shallow subsurface
connections are included. Does this mean that water that fills
our pits is jurisdictional?
From Memphis Stone and Gravel Company's point of view, it
would be a rare event not to encounter shallow groundwater in
sand and gravel deposits. Will a separate permit be required
for reclaiming the pit and returning it to another beneficial
use? These are just some of the many questions this rule poses
but does not answer.
Having a clear jurisdictional determination for each site
is critical to the aggregates industry. These decisions impact
the planning, financing, construction, and operating of our
facilities. Because the Clean Water Act dredge and fill permit
and the corresponding states' 401 certification process is so
long and costly for a small company like ours, we attempt to
avoid jurisdictional areas.
Now under the proposed revisions, many previously
nonjurisdictional areas could be considered jurisdictional. It
will make nearly any area we try to access require additional
permits.
The delay caused by multiple surveys, reports, and
additional authorizations will add significant new costs during
the permitting process, which could lead to abandoning projects
once considered viable. One NSSGA member calculated that to do
the additional mitigation of a stream required under this rule
would be more than $100,000. This is just one site and one
project in our industry.
We make business decisions to buy or lease properties for
15 to 30 years in advance of our operations. A change in what
is considered jurisdictional can have a significant impact on
our material reserves, which will affect the life of our
facilities and delay the startup of new sites. If it is
determined that development of a site will take too long or
cost too much to acquire permits or perform mitigation, we will
not move forward. That means a whole host of economic activity
in a community will not occur.
Given that infrastructure investment is essential to
economic recovery and growth, any change in the way land use is
regulated places additional burden on the aggregates industry.
This is a serious change in the rules that dictate how we can
or cannot conduct business.
NSSGA appreciates this opportunity to speak on this matter.
Thank you, Mr. Chairman. I will be happy to respond to any
questions.
Chairman GRAVES. Thank you, Mr. Parks.
And with that, we will break. We have got a 15-minute vote
and four five-minute votes at this point, so we should not be
too terribly long. But I would ask everybody to stay and come
back. But I apologize for this. The ranking member and I do not
get to make the schedule on voting, unfortunately. But we will
be back shortly.
So the Committee is in recess.
[Recess]
Chairman GRAVES. All right. We will go ahead and call the
hearing back to order.
Our next witness is going to be Tom Woods, who is a home
builder with more than 40 years experience in the home building
industry. He is the president of Woods Custom Homes, a building
company based in Blue Springs, Missouri, in my district. Tom
serves as the 2014 first vice chairman of the Board of the
National Association of Home Builders and is testifying on
behalf of that association.
Tom, thanks for being here today. I look forward to your
testimony.
STATEMENT OF TOM WOODS
Mr. WOODS. Chairman Graves and members of the Subcommittee,
I appreciate this opportunity to testify today. My name is Tom
Woods, and I am the president of Woods Custom Homes based in
Blue Springs, Missouri, and NAHB's 2014 first vice chairman of
the board.
Since its inception, the Clean Water Act has made
significant strides in improving the quality of our water
resources. Home builders have a vested interest in the
protection of our water resources. Home building is one of the
most regulated activities in this country, and as a small
business owner, I can tell you that the key to a successful
regulatory regime is consistency, predictability, timeliness,
while focusing on protecting true aquatic resources. When it
comes to the Clean Water Act, we get none of that.
For years, landowners and regulators alike have been
frustrated with the confusion over what are ``Waters of the
United States.'' When the EPA and Army Corps proposed this most
recent rule, we hoped it would finally provide clarity and
certainty. Unfortunately, the rule falls well short of that
goal.
The rule establishes broader definitions of existing
regulatory categories, such as tributaries, and seeks to
regulate new areas that are not currently federally regulated,
such as adjacent non-wetlands, riparian areas, floodplains, and
other waters.
The agencies intentionally created overly broad terms so
they have the authority to interpret them. Under this rule, the
federal government would regulate roadside ditches or water
features that may flow, only after a heavy rainfall.
I am a businessman. I need to know the rules. I can't play
a guessing game of ``is it federally jurisdictional?'' But
that's just what this proposal would force me to do.
Builders would face new, costly delays just waiting for the
agencies to determine if a road ditch is a ``Water of the
United States.'' The only winners are the lawyers, as this rule
will certainly lead to increased litigation.
My business has already been a victim of permitting delays.
For one of my building projects, I was entangled in the Army
Corps permitting process for over two years.
These delays will only increase as the agencies work to
extend federal protections to smaller waters.
While many aspects of the Clean Water Act are vague, it is
clear that Congress intended to create a partnership between
the federal agencies and the state governments to protect our
nation's water resources. There is a point where federal
authority ends and state authority begins. Unfortunately,
defining that point has proven incredibly difficult.
States have adequately regulated their own waters and
wetlands for years. As a former mayor, I have a firsthand
understanding of the lengths that the states and local
governments go in order to protect their waters. The agencies
have bypassed the safeguards of the Regulatory Flexibility Act
by failing to consider the true economic costs on small
business. Since the agencies failed to hold a small business
panel, it is clear that they are not interested in hearing from
small businesses like mine. Unfortunately, all too often the
EPA completely ignore the RFA requirements. The agency's
economic analysis of the proposed rule failed to consider the
economic impact on small businesses and is therefore fatally
flawed.
According to economist Dr. David Sunding, ``the errors and
omissions in EPA's study are so severe as to render it
virtually meaningless.'' That should give us all pause.
It is clear that the EPA should withdraw the economic
analysis and prepare a more thorough and accurate analysis. Any
final rule should provide understandable definitions and
preserve the partnership between all levels of government,
while also considering the impacts on small businesses. All are
sorely lacking here. I request that the agency start over and
develop a more meaningful and balanced rule that respects the
spirit of the RFA.
Thank you for the opportunity to testify today.
Ms. VELAZQUEZ. Mr. Chairman, it is my pleasure to introduce
Professor William Buzbee. Professor Buzbee is a professor of
law at Emory University School of Law, where he is also the
director of the Environmental and Natural Resources law
program. He will next be joining the faculty of Georgetown Law
Center. Before becoming a professor, he counseled industry,
municipalities, and governmental authorities about environment
law, pollution control, and land use issues. Professor Buzbee
has written extensively about related issues with a focus on
regulatory federalism. Welcome.
STATEMENT OF WILLIAM BUZBEE
Mr. BUZBEE. Thank you very much. And thank you to all the
members of the Committee.
I am pleased to accept the invitation to testify before the
Committee. I think I was invited to testify due to my
expertise, not as a partisan or representative of any
organization, so what I will try to do is provide a little bit
of context about what is going on with these proposed
regulations and offer a few comments about the legality and
logic of the regulations.
I should add that this is not my first involvement with the
question of what is waters of the United States. Earlier, I
represented a bipartisan group of former EPA administrators
before the Supreme Court in the Rapanos case. They are aligned
with the George W. Bush administration in trying to uphold the
longstanding protections of the regulations about waters of the
United States, and then subsequently, I testified at a few
hearings about the very confusing ruling that emerged.
I will make five main points in my testimony. First,
although people have focused on wetlands protections, it is
important to understand that what is a water of the United
States is a lynchpin of the whole Clean Water Act, including
pollution discharges from industry, oil, and other sorts of
spills and water concerns.
Second, there have been some comments about these
regulations questioning if they are legal in response to what
the Supreme Court has done in three major cases, and I will
show that they are. In addition, there have been persistent
claims, and we have heard some today, that the regulatory
claims here are too broad. And I will show how these proposed
regulations actually cut back on EPA and the Army Corps'
jurisdiction. Very importantly, the regulations here are linked
to a massive survey of peer reviewed science on wetlands. In an
era when people think agencies should respect sound science and
peer reviewed science, it is important to acknowledge that is
the underpinning of this regulation. And then lastly, I will
show how the regulations here reduce a commerce-linked
rationale that long has been an underpinning of federal power.
So first, again, it is important to understand the Clean
Water Act. Waters of the United States is the entire root of
federal power here. So if you are concerned about industrial
discharges into America's waters, industrial discharges into
what might be a dry riverbed in the southwest and what would
happen during a heavy rain flow, that is as much a concern as
is wetlands filling. It is important to keep that in mind. And
certainly given the importance of fishing industries, the use
of waters for drinking water, municipal uses and the like,
protecting waters is of critical importance across the entire
nation. Businesses are on all sides of this issue.
Second, this point about people's claim that this is an
illegal grab of power beyond what the Supreme Court has
allowed, this is clearly incorrect. Six Supreme Court justices
in the Rapanos case agreed that EPA and the Army Corps, by
regulation, could clarify what counts as a water of the United
States. And then earlier in a case called Riverside Bayview
Homes, a unanimous Supreme Court also talked about this being
an area appropriate for rulemaking authority. There is no doubt
this is something where authority exists. People may skirmish
over what the appropriate bounds are, but is there room for
rulemaking here? The answer is absolutely.
Point three. These people have failed to acknowledge that
in these regulations for the first time the Army Corps and EPA
have very explicitly carved out jurisdiction saying they will
no longer assert jurisdiction in several areas. I will not list
them off in depth because of the limited time, but it includes
waste treatment systems, prior converted crop land, ditches
that are upland and do not contribute flow to other waters, and
really, if you look through these, several of them seem to be a
direct answer to some previous testimony, which will have
talked about efforts to regulate puddles and meaningless things
like gutters and birdfeeders. They have clearly said that they
are not reaching out to the outermost limits.
Point four has to do with the peer reviewed science. I am
sure it is great reading for all of us, but there is a 300 some
odd page science report that goes through all of the peer
reviewed science on why you should protect waters, and the
proposed regulations here tie in very directly. And so again
that is an important change now in these regulations, really
hinging federal jurisdiction to that science.
Now, point five, in my last few seconds, is there was a
longstanding regulation 328.3(a) or (a)(3), I am sorry, that
allowed the federal government to assert jurisdiction over
disputed waters if they could show the harm or the use of
waters was linked to commerce and industry. And EPA and the
Army Corps have deleted that provision, and so they now are no
longer asserting that. At this point, under these regulations,
all jurisdictions are hinged to what the science shows about
the need to protect waters.
So I will stop there. Thank you very much, members.
Chairman GRAVES. Thank you very much. We are going to start
our questions with Mr. Tipton.
Is Jamie here?
Mr. Huelskamp?
Mr. HUELSKAMP. Thank you, Mr. Chairman. I appreciate moving
to the front of the line here. That kind of surprised me a
little bit.
Gentlemen, thanks for your testimony. I apologize for Mr.
Field coming and winning the award for traveling the furthest
distance, oftentimes coming from halfway across the country. I
wish I were further away from the regulators in Washington, but
I appreciate your description of what actually happens on a
ranch and what you fear these proposed regulations might do for
you. It certainly is a vast overreach and certainly being in
agriculture myself, I am worried about what happens, whether it
is dry stream beds, backyard ponds. You know, we wish we
actually had road ditches with water in them, but my
understanding of the rule would mean that they would have a
regulatory nexus from Washington to interfere with those as
well and creating that regulatory uncertainty in these vast
overreaches is creating some problems.
I wish, for Mr. Field and Mr. Parks, if you would describe
a little further what changes you believe you might have to
make. And again, that is the difficulty, is the regulatory
uncertainty, because this is not the first time there has been
a proposal to strike the word ``navigable'' and say, hey, that
does not count anymore, even though that is certainly the
intention of Congress. So if you will describe a little bit
more specifically what you think you might have to do and the
cost of doing those in the future.
Mr. FIELD. Absolutely. Thank you very much, Congressman.
The biggest question, as you have highlighted, is being
asked to explain hypothetically what will happen when I cannot
clearly tell you what the rule means is very difficult, but I
will do my very best.
The biggest challenge--and I reference this list--this is a
list of the 56 preapproved practices that EPA has deemed are
not going to create a discharge if an individual--and these are
related to farming and agricultural activities--if an
individual executes those as prescribed by NRCS.
So just for my example, and we talked a little bit earlier
about fencing or prescribed grazing. Clearly, it would create
additional expense and burden on my operation to have to go
through and create NRCS approved grazing plans to ensure that
in areas where I have a riparian pasture, if I have a fence
that touches that riparian area, meaning if it floods at any
time of the year and then that water drains back into a
tributary, which the EPA may deem has connectivity under their
broad definition of authority, I then, if I am not grazing, in
accordance to my NRCS approved plan, could be found out of
compliance. Thus, being required to obtain a 404 permit for
cattle grazing in a riparian area.
Hearing the good gentleman to my right speak about the
challenges they have in obtaining permits for constructing
homes, I have no expectation whatsoever to do that. I am a
small--extremely small business. I have got 55 momma cows. That
is one truckload. I cannot afford an attorney or an
environmental consultant. I would like to think I am a fairly
intelligent individual being able to read the law, but I cannot
honestly tell you what the expense would mean to my operation
in terms of compliance with the environmental regulation.
I want clean water. I drink the same water that my
neighbors down the stream do. I want good, clean groundwater. I
want good, clean surface water. But in my opinion, the best way
we get there is through local decisions, and that happens at
the local level and the state and county.
Mr. HUELSKAMP. Thank you, Mr. Field.
Mr. Parks?
Mr. PARKS. If I can sum this up in three words, I would say
cost, delay, and uncertainty. Those are going to be the big
three things that come out of this.
I believe that increased regulated area is going to be
significant. I think one concern that we have is we have
developed a level of competency over the years understanding
how to play this game, and now the rules are going to change
significantly. So there is going to be a pretty significant
learning curve for that, both for the regulated community, as
well as those that are in charge of regulating. That causes
delay, and there is a cost to that.
We make substantial investments on these natural resources.
We lease those many years down the road, and we are concerned
that because jurisdictional determinations are subject to
review every five years, what is going to happen to deposits
that we had banked on mining that are now going to be off
limits? So there is a lot of uncertainty that exists with this,
and it creates the potential for a much, much broader regulated
area.
Mr. HUELSKAMP. Mr. Parks, one last quick follow-up as far
as planning ahead. How many years out do you make purchases in
order to secure those deposits? I mean, certainly more than
five years?
Mr. PARKS. Absolutely. It is not uncommon typically in a 15
to 30 year range is what most of our leases' terms are.
Mr. HUELSKAMP. Thank you, Mr. Chairman. I yield back.
Chairman GRAVES. Ranking Member Velazquez.
Ms. VELAZQUEZ. Thank you, Mr. Chairman.
Professor Buzbee, you indicated in your testimony that
while some small businesses have come out against the proposed
rule, there are business interests on both sides. Can you
explain why the split?
Mr. BUZBEE. Yes. Based on past, if you kind of track who
has supported changes, who has testified, and who has
participated in some of the Supreme Court cases, there are very
substantial interests linked to hunting and fishing as one
area, and then there is also commercial fishing on a large
scale, which is very much dependent on rivers and their
tributaries. In addition, recreational interests are a huge
business in the United States, and they very much depend on
this.
While not first level small business, municipal uses of the
waters that we are trying to protect through the Clean Water
Act has a direct effect on many businesses who depend on safe
and good water for their businesses. So if you have looked
historically, the reason why there has been--there was for
about 30 years--really bipartisan support across party lines
was that people realized it was both environmentally and good
business to have improved clean waters.
Ms. VELAZQUEZ. It appears the main fear of many is that the
proposed rule would broaden the scope of the Clean Water Act
and that there would be limitless claims of federal power. Is
this an accurate criticism of the proposed rule?
Mr. BUZBEE. No, it is not. It is not an accurate
description. As I said, first, there is for the first time an
explicit carve-out of a number of areas plus very importantly
there is the explicit deletion of this longstanding commerce
link grounds for jurisdiction. And then there are also several
other grounds that have long been explicit in the Clean Water
Act, and they remain.
Very importantly here is what the EPA and the Corps have
done is they set three categories. They have some areas they
call jurisdictional. Then they have others and they talk about
them by category. And then they have others that still require
case by case analysis for a significant nexus. And so while I
do think there are concerns with delay, any time you have a
case specific judgment it also gives people the chance, whether
they are building houses or working on a cattle ranch, to argue
about whether an area deserves protection.
Ms. VELAZQUEZ. Thank you.
Mr. Field, you indicated that there was zero outreach to
the agriculture community before the rule was proposed and that
you were told to ``wait and see.'' Why do you think there was
this reluctance from EPA to have input from those stakeholders?
Mr. FIELD. Thank you.
I cannot answer why EPA failed to reach out. However, it is
clear to see the result. We are experiencing it right now.
Just if I may answer a follow-up to the professor's comment
regarding the section 505 of the Clean Water Act, I would argue
adamantly that the citizen supervision is by far anything but
clear. Having the opportunity as we drive down the road to
simply pick up the phone and contact EPA and say, ``I question
an activity that is occurring. I think there is a discharge.''
Click. That is an anonymous call. We, as land owners, the
target of the call, never have an opportunity to know who is
making the call, who is making the claim, and I have seen this
happen in Washington State where the citizens--the opportunity
to make anonymous calls leads to countless inspections, follow-
up, and does nothing in terms of protecting water quality, but
causing a continuous do-loop.
But back to your point, in terms of outreach, it is beyond
frustrating as to why EPA did not reach out. I know in
February, at the National Cattlemen's Annual Meeting, EPA was
asked that very question, and they were told to wait and see
what the proposal looked like.
Ms. VELAZQUEZ. So now that you have this forum, you have
the opportunity to tell me and the committee what the number
one concern or complaint is that you have regarding the
proposed rule?
Mr. FIELD. The absolute vagueness. It is a dramatic
overreach, in my opinion, of what the original intent was. And
the idea that simply having again to show a bed, a bank, and an
ordinary high water mark, then being able to make the deem that
it is adjacent, that is limitless.
Ms. VELAZQUEZ. Thank you.
Mr. Woods, in your testimony, you point to an economist who
found that EPA's cost-benefit analysis was flawed because it
used a time period in which there was low construction activity
as its baseline. During the time, construction spending was 24
percent below that of the previous two years. Can you give us a
sense of what the true cost would be if the analysis had used a
period that was more reflective of the construction industry?
Mr. WOODS. I can only give you a guesstimate, I guess, I
would say. If you look at 2009-2010, yes, they are 24 percent
behind 2007-2008. However, remember, 2008 was the absolute
cliff. Construction overall dropped by 80 percent. So if you
take that as a number, you can assume that there would be five
times the permits if we were able to get back to normal
construction. So if there were five times the permits, there
would be at least a minimum of five times the cost, and I see
very little benefit whatsoever. That is the other flaw in the
thing. There will be cost, and in my estimation, no benefit.
And if I might, the other problem you have here when you
say a cost benefit and the way I think their method is flawed,
because your real cost, not only the physical cost of hiring
the attorneys and the consultants to go through this process,
but your real cost in the construction industry is in the time
because houses have very short time periods. They have very
short commitments on loans and appraisals and those kinds of
things, and if you stretch it out, those commitments are
usually only six months.
Ms. VELAZQUEZ. Okay.
Mr. WOODS. If you stretch it out, you just lost those
sales.
Ms. VELAZQUEZ. Thank you. Thank you for your answer.
Professor Buzbee, one other concern that has been expressed
is how the proposed rule will affect their businesses, and
among those is the fear that the new rule will be subject to
lawsuits. My question to you is what safeguards are there in
the act that will prevent businesses being subject to a
lawsuit?
Mr. BUZBEE. Well, first, the most important thing is first
that you have an Army Corps of Engineers that making
jurisdictional determinations does react with alacrity and
reviews and gives people prompt feedback. That is essential.
Citizen suits are actually very hard to bring, and that is
actually only when people go into the courts. Whether phone
tips or something like that would be a different issue. And so
in the end they would have to basically show that there was a
violation and convince a court and show that they were harmed
by it, and that is difficult. And I think for that reason there
are not as many--you do not hear about a lot of section 404
water-related--waters of the United States-related citizen-
litigation suits.
Ms. VELAZQUEZ. Thank you.
Thank you, Mr. Chairman. I yield back.
Chairman GRAVES. Mr. Tipton?
Mr. TIPTON. Thank you, Mr. Chairman. I would like to thank
our panel for taking the time to be here.
I have to tell you, gentlemen, I think this is the greatest
water grab that we have seen by the federal government in the
history of the United States. The overreach of the EPA in terms
of being able to control.
Mr. Field, you are out of the west?
Mr. FIELD. Yes, sir.
Mr. TIPTON. This is a private property right in the west?
Mr. FIELD. Absolutely correct.
Mr. TIPTON. You have state law in the west. We have
priority-based systems, and we are now seeing the federal
government trying to be able to step in to be able to regulate
virtually all of the waters of the United States.
When you read through this, ``Traditional navigable waters,
interstate waters and wetlands, territorial seas, impoundments
of the first three categories in tributaries, tributaries of
the first four categories, waters and wetlands adjacent to the
first five categories and other waters.''
Does that sound like everything to you, Mr. Field?
Mr. FIELD. It sounds to me, once that drop falls out of the
sky, it is under EPA's jurisdiction.
Mr. TIPTON. It is going to be under the EPA's jurisdiction.
You were just talking about the ditch that you diverted off
the stream to be able to get water to your cattle, to be able
to irrigate, I assume, some of your fields so that you can
actually grow hay, some feed for the cattle. How is this going
to impact your business?
Mr. FIELD. I honestly cannot tell you that. That is why I
am here, sir. The picture that we had is an irrigation ditch.
There is about an acre foot of water that flows through that to
a few of my neighbors right now, and the question I have and
the sincere fear is the riparian pasture that is between that
irrigation ditch and the tributary that flows to a water of the
U.S. and the question of am I in violation of the Clean Water
Act? I subject myself to more liability today by putting the
pictures on the screen and talking than I can afford to pay.
Mr. TIPTON. Now, do you have ever sense if the EPA is
allowed to be able to move forward with these rules, it is no
longer your land, no longer your property, no longer your
water; that it is now owned by the federal government and it
will be controlled out of Washington?
Mr. FIELD. That is most certainly a concern I think that is
shared by every private landowner. And an additional fear that
I have, and in speaking with Mr. Parks that I think would be
equitable on other natural resource industries, is the concern
that this rule, if it goes forward unchanged and unamended,
that it may have a chilling impact on landowners who may not be
directly involved. I lease all of my property for grazing. This
may have a chilling impact and a landowner might say, ``Boy,
Jack, I would love to help you out and lease some pasture, but
I am afraid your activity brings too much liability under the
Clean Water Act. Go maybe try the neighbor.''
Mr. TIPTON. Yes, I think, you know, because I think we can
agree, everybody in this room is an environmentalist. We all
like clean air and we all like clean water. You were describing
for us an effort that you had made in terms of being able to
put in some conservation. Now, if these rules move forward, if
the overreach of the federal government is put into place, you
are not going to be able to afford, nor would you be willing to
move into those conservation areas. Is that correct?
Mr. FIELD. Well, you are absolutely correct. I would
certainly not partner with NRCS or my conservation district. I
would try to do what I can at a much slower pace just on my own
because--and do not get me wrong. The NRCS standards are
excellent. They work perfectly. But I do not need to implement
those practices exactly to the standard. I can get by with a
three strand high tensile fence that I can build in a much
faster time than a four or five strand barbed wire fence that
delivers the exact same benefits at a much lower cost. And
again, in my operation, I have got to try to spread the dollar
just as everybody else on this panel as far as we can.
Mr. TIPTON. And, you know, just for the point of clarity, I
happen to view our farm and ranch community as part of our
national defense. We certainly need to be able to feed this
country. Did you state, and did I write this down correctly,
there was zero outreach by the EPA to the ag community. Is that
correct?
Mr. FIELD. Yes, sir. Questions were made in February
requesting for meaningful dialogue and input, and again, being
told to wait and see. And that is, unfortunately, not a very
productive means of promulgating rule, and especially something
that will be this effective.
Mr. TIPTON. So an agency that says you will follow the
rules does not follow its own rules when it comes to being able
to reach out and find out what the business impacts are going
to be.
Mr. Parks, would you like to comment on that?
Mr. PARKS. Yes, sir. I would.
Fortunately, our company is a member of a great trade
association who made us aware of these developments and keeps
us informed and in the loop. The Home Builders Association,
National Cattlemen's Association, that is the type of--you
know, that is why we are members of these associations. By and
large, we do not have the management and the support staff to
stay engaged with these types of issues. I would say for the
most part the small business community has a cursory
understanding of what is being proposed at best, and most folks
have no idea the enormity that these changes could bring to the
regulated community.
Mr. TIPTON. I see I am out of time. Gentlemen, I thank you
for your comments, and I share your concerns over this
overreach by the government and the EPA.
Chairman GRAVES. Mr. Schrader?
Mr. SCHRADER. Thank you, Mr. Chairman.
Well, I guess I find Professor Buzbee's testimony on his
five points actually pretty incredulous. I respect his previous
experience and expertise, but the idea that this is a simple
definition of waters of the United States, we have heard from
people that live, work, and try and build our great country and
the economy that that is not the case. This is a vast
expansion. As a matter of fact, it is not legally responsive
even to the courts.
Let us go back to the Supreme Court decision, Professor
Buzbee. That was supposed to be about navigable rivers or have
some juxtaposition or nexus to navigable rivers. CWA does not
include every bloody water in the United States of America. It
is supposed to be dealing with those rivers that actually have
some nexus to navigability. Otherwise, to the good gentleman
from Colorado's point, it becomes a grab of private property
throughout the United States of America. That is not what the
CWA was all about.
I think the fact that this is actually not a broad
interpretation is ludicrous. We have 56 different exceptions,
and I bet Mr. Field, are you competent every single exception
that they are going to come up with is listed right there? Are
there going to be some others you are going to run up against?
Mr. FIELD. You are absolutely correct. This is, again, the
list, if you follow the 56 preapproved NRCS practices by the
letter you would be exempt. But if you, again, my fence. Not
having a NRCS plan, it does not meet the standard, I do not
fall under----
Mr. SCHRADER. Well, and I think that is unfortunately going
to be the case for everybody. The commerce caused a deletion
almost is a direct contravention from the plurality's decision
of the Supreme Court. You are supposed to still take the
navigability piece into consideration. Even Justice Kennedy
talks about significant nexus in his decision. There is none of
that. None of that with EPA. We are on primary, secondary,
tertiary, quaternary, septuagenarian relationships to
navigability here. This is ludicrous. I mean, I do not think
anybody in a straight face can say that this is anything but a
huge grab of jurisdictional power at the end of the day.
Let us talk about peer reviewed research here. I guess I am
a little concerned about how committed the EPA was as they
developed this rule to coming up with the accepted peer
reviewed research when their own EPA draft study,
``Connectivity of Streams to Wetlands to Downstream Waters: A
Review and Synthesis of the Scientific Evidence,'' was sent to
the EPA's Science Advisory Board to begin review on the same
day they sent their final rule to OMB. If you are talking about
peer reviewed science and actually watching science, they did
not follow their own gosh darn science. That is an indictment
that I think is beyond the pale here. All I know is that back
in Oregon we have a lot of federal land, just like every
western state legislator here. And we have a tough time dealing
with all the federal rules on a regular basis. And what we are
seeing here is unfortunately more rules, more regulations.
I think Mr. Parks summed it up nicely, ``More cost, more
delay, more uncertainty.'' Even if it does not go to a
lawsuit--you know, Professor Buzbee, not every dang small
businessman has a lawyer in their pocket that they have on
retainer that they can fight these things. The threat of
someone driving down the highway, seeing a practice and they
are worried about it, all of a sudden you have got EPA or in my
state DEQ coming in and investigating you, that costs a
business money. This is an abomination.
Thank you, Mr. Chairman. I yield back.
Chairman GRAVES. Mr. Schweikert?
Mr. SCHWEIKERT. Thank you, Mr. Chairman.
We did a little workgroup about a month ago with a number
of lawyers who basically work in this area, environmental law,
and we set sort of a game theory. We read through the rule and
basically turned to those who it was within their specialty and
said, ``Take it to an extreme. Take it to--maximize the
language.''
And so, Professor, I was going to ask for your help on a
couple things that still echo in my mind. A river that only
once every 100 years--let me back up. A wash that only on
occasion contributes to a navigable stream. Does that wash fall
under these rules?
Mr. BUZBEE. I think the way they have set them up, they are
proposing to look by different regions to figure out, but if an
area is a dry riverbed in an area that is, say, Arizona, an
area that tends to be dry that has major rain torrents that
come down and during those times water is carried on----
Mr. SCHWEIKERT. It would fall under?
Mr. BUZBEE. I believe that it would fall under for those
instances.
Mr. SCHWEIKERT. Okay, so, because I remember sitting
through a meeting on this, lordy, 15, 20 years ago, where the
salt riverbed, which we damned up before statehood, so it has
basically been dry for 100 years except for that 100-year flood
that we had a few years--actually, back in the 1980s. And at
that time, EPA wanted to designate that as a navigable river.
So the wash that goes behind my property, my home, so I have a
property, a big wash under it, when we get our 14 inches of
rain a year, which comes on a Tuesday--no, it really does--and
that would contribute to that dry salt riverbed, and that dry
salt riverbed once every 100 years or so contributes down to
the Colorado, would fall under the rule. Right?
Mr. BUZBEE. I do not know about if there is a time limit. I
am not aware. I mean, you are saying once every 100 years. I do
not know. My guess is that would be because they seem to be
talking more about with periodic rainfalls that would be heavy
that would flow.
Mr. SCHWEIKERT. So now we are into the definition of
periodic, ultimately.
And my concern is also in this rule there is also some
cleanup of the language of, we will call it, ``citizen
litigation.'' You know, the ability. And before speaking to one
of the minority members you said, ``Well, you do not think this
happens often.'' I, literally, in Arizona, have multiple law
firms that literally their sole practice is suing the Forest
Service. And that is how they make their money.
Now, a lot of the suing is actually all about we will sue
and get a settlement, and that is how we enforce policy. So
under this, could I get sued for the dry wash behind my house
that contributes to the dry salt riverbed that contributes
eventually to the Colorado River once every 100 years?
Mr. BUZBEE. Under the Clean Water Act, you would have to
show that you had discharged a pollutant into the river from a
point source, which would mean either industrial discharges, or
if you went in and, say, built a concrete pier blocking it,
then there would be a possibility of liability if it was
jurisdictional. But you can only sue if you have that and there
is an advance notice requirement. So they would have to give
you an advance notice, and the state, and the fed----
Mr. SCHWEIKERT. But in that same concept, so in my
property, I go out and dig and plant some desert trees, and I
use the appropriate fertilizers for my area. Haven't I just now
walked over that line?
Mr. BUZBEE. As far as I know, I am not aware of that from
what I read. I am not clear if there would be. I cannot see one
in that.
Mr. SCHWEIKERT. Okay. When we modeled it and actually read
it through line by line, and look, that may not be the intent,
but my great fear is as we have seen over and over and over and
over, when we end up--we create these--the government creates
these rules and then over the next 10 years, 15 years, 20
years, litigation after litigation after litigation, expansion,
expansion, expansion, all of a sudden I am not allowed to plant
a desert tree in the back of my property because there is a
wash. And I know that sounds absurd, but I can model you
through the language and show you how that reads in there.
And with that, I yield back, Mr. Chairman.
Chairman GRAVES. Ms. Chu?
Ms. CHU. Yes, Professor Buzbee, there has been a
representation that nearly every drop of water that falls would
be regulated by the federal government and that even if not
every drop of water is regulated, any place that water collects
will be including all manmade bodies of water, ponds, ditches,
floodplains, and even standing water in potholes. And yet, from
what I read, the actual increase of jurisdiction would be three
percent, which does not sound like every body of water that is
out there. So could you please clarify that?
Mr. BUZBEE. Yes. I agree. Your read is consistent with
mine, that there is a clarification of the grounds for
jurisdiction, but I do not see a substantial increase, and
because of these explicit carve-outs that are now part of the
proposed regulations, areas that previously had been raised as
a kind of parade of horribles of extensive regulation, I do not
think you would find them. And so, for example, there was a
mention earlier that just by having cattle grazing, that that
would create a need for a section 404 permit. I am not aware of
any basis for that.
Ms. CHU. Is three percent a correct number do you think?
Mr. BUZBEE. I have not looked at that. I have seen other
people have estimated three percent, but I have not, myself,
tried to figure out across the country the percentage.
Ms. CHU. From what I read, 117 million Americans who
consume water from public systems that rely on seasonal or
intermittent water sources would have greater protection of
their drinking water. Is that true?
Mr. BUZBEE. Yes, it is. The science does show more and more
that protecting rivers, riverbeds, and the buffers around them,
especially, is critically important to maintaining water
quality, both for human use, as well as fisheries and other
purposes. And so especially for municipalities that depend on
water from flowing rivers, maintaining the purity of that water
is extremely important.
Ms. CHU. Now, it is my understanding that the EPA is, in
proposing these regulations, is actually trying to limit the
pollution in our drinking water and therefore, they have define
which waters may be subject to these kinds of pollutants and
also carry pollutants downstream. Could you elaborate on that
point and help us understand how the definition of waters
facilitates the main goal of protecting constituents from
pollution?
Mr. BUZBEE. Sure. As you can read in the very extensive
proposed regulation, a lot of the focus is trying to track,
based on peer reviewed science, how pollutants move through
waters from areas where the waters collect and then essentially
move from tributaries into larger navigable-in -fact, waters,
or traditionally navigable waters. And so basically, they found
that both wetlands and tributaries do tremendous work,
essentially functioning for free and reducing pollutants so
what eventually goes into the larger water bodies is
substantially cleansed by the process itself. And so in that
respect it is critically important to maintain the purity of
water.
Ms. CHU. And then in your testimony you said that several
categories of waters are exempted from the rule. For example,
waste water treatment systems, prior converted cropland, and
several sorts of ditches. Could you tell us how and why these
exemptions were made and why they are necessary?
Mr. BUZBEE. There has been, I think, in some cases these
were kind of in actual enforcement practices were largely
followed, but there have been a lot of claims of excessive
claims of jurisdiction. So looking at their explanation, the
view was it was time not to leave them open to debate but just
to make crystal clear these would not be jurisdictional, and
that would remove them from any debate and argument. People
would not be able to later say, oh, there was a significant
nexus. No, these are removed from federal power.
Mr. FIELD. Congresswoman, if I may, just to one question.
You had done an excellent job of highlighting the problem with
this rule when you asked Professor Buzbee if in his opinion
this rule would only yield three percent of additional
regulation. The problem is I can bring my attorney and they
will argue the opposite saying, no, I do not think it is three
percent; I think it is 10 percent. It is not clear to us what
truly is going to be the regulated water under this rule.
And the other question, in terms of a carve-out on a waste
treatment plant, they are regulated under the National
Pollution Discharge Permit. That is NDPES. That is a point-
source polluter. That is apples and oranges. In this
discussion, we are talking about non-point.
Ms. CHU. Well, I still have another question, so if I could
continue with Professor Buzbee.
Mr. FIELD. Excuse me.
Ms. CHU. In your testimony, you explained that what appears
to be a vague language of the law will actually allow
regulators to provide case by case decisions following site-
specific inspections. Can you explain how the law's reliance on
case by case analysis will actually allow regulators to adhere
more closely to the intent of the Clean Water Act?
Mr. BUZBEE. Sure, I would be happy to.
This is partly the outgrowth of Justice Kennedy's opinion
in the Rapanos case when he called for a significant nexus
analysis so you would not be regulating marginal, insignificant
waters. And so the Army Corps and EPA, in proposing this
regulation, have basically tried to figure out what by category
does need to be regulated and then carve-out certain areas,
these are ones that need case-by-case analysis. And so those
ones, it is not clear until you look in particular context.
They have sought comment. I assume the colleagues here at the
table will provide comments that would analyze by different
regions why certain areas might be more likely to be
jurisdictional or not. That is something they sought.
Ms. CHU. Thank you. I yield back.
Chairman GRAVES. Mr. Collins?
Mr. COLLINS. Thank you, Mr. Chairman. And I want to start
by thanking Mr. Schrader for his excellent summary of the
issues that we are bringing. Mr. Schrader and I cosponsored a
letter to the administrator of the EPA, as well as the
secretary of the Department of Army that was signed by 231
members of Congress. It is not easy to get members to sign such
letters, let alone 231 letters on a bipartisan way, including
the chairman of every committee in Congress.
So when Professor Buzbee speaks about the impact or what he
would suggest is not, as I agree with Mr. Schrader, the
greatest expansion land grab, power grab that has ever occurred
in the history of the EPA. And certainly, I think our testimony
from Mr. Field, Mr. Parks, and Mr. Woods confirms that.
So for the record, I would like to point out to Professor
Buzbee, not to nitpick, but I think it is important, Professor,
when you were questioned by Ms. Chu about certain issues, let
me reiterate how you responded. ``I am not aware. As far as I
know. A possibility. I do not know. My guess is. I believe
that.''
Those were your words, Professor. So when we talk about
uncertainty, and I hear our farmers, and Mr. Schrader and I
were asked to lead this letter by the Farm Bureau, our farmers,
which grow the food that feed Americans and actually feed many
around the world, are scared to death of this overreach and
what it might mean. And again, it goes back to uncertainty. It
goes back to the fact that outreach was not made to small
business, to the farming community and the like. Frankly, the
rule needs to be returned. That is what Mr. Schrader and I and
229 other members of Congress have simply asked at this point.
They got too far out ahead as has been pointed out. 2008, 2009,
2010. It is fundamentally flawed as a beginning data point. And
the fact that we have not done a true economic analysis is, I
think, a reasonable request that we have made. Simply return
the rule. Let us take this off the fast track that it is on.
Let us get back to regular order. Let us do what we should be
doing with the Farm Bureau, the Home Builders, the construction
trades. We are not making a mountain out of a mole hill.
And my other concern, and maybe I will just ask for a brief
comment, are the economy and jobs. We have an economy that is
sputtering, that has lost steam. Our kids are graduating. They
do not have the jobs. We need to grow our way out of the
deficits and debt problem that we have and just, you know, Mr.
Field, the simple kind of question, does a rule like this--
because I certainly believe it is another hindrance in growing
our economy. Uncertainty brings lack of investment. Certainly,
I would like your opinion.
Mr. FIELD. You have just hit the nail on the head, sir. The
lack of clarity on this rule, regardless of the industry you
are involved in, not knowing, not being able to tell your
lender with certainty that the activity you are about to enter
into is not going to carry the potential legal liability of a
violation of the Clean Water Act or the ability to have the
citizens suit provision of section 505, it is unthinkable.
Mr. COLLINS. Uncertainty means lack of investment.
Mr. Parks?
Mr. PARKS. Yes. Just to add to what Mr. Field indicated.
Most of our holdings, I would say roughly 80 percent, are
leased. These issues affect private landowners. It is not just
Memphis Stone and Gravel Company. So the bottom line is if we
are able--if the rules require more area subject to regulation,
then that certainly can limit the amount of resources that we
can recover. And that translates into cost and value to the
property owner, as well as us.
Mr. COLLINS. Mr. Woods?
Mr. WOODS. Yes. It is going to have a devastating effect. I
will give you an example.
One of my subdivisions in Mr. Graves's district has over
800 units. If it were built out, it would be subject to this.
It is, in fact, the one that I mentioned took two and a half
years and several hundreds of thousands of dollars to get the
permit in the first place under the old rule. I would not go
forward with getting it under the new rule. But if you take
that and just extrapolate it, every house or every unit by our
standards means about 3.7 jobs. You know, if you look at the
tax bills and burdens and what they generate, it is in the
thousands of dollars to the municipality and the state and
federal government, and that is just one subdivision. I am not
the big developer in Kansas City. I am just one of the medium-
size guys, but you would have to take that number and add it
and then go across the country and say how many are there. You
are talking millions of jobs that will be lost simply because
we cannot get the permits.
Mr. COLLINS. Thank you all very much.
Real quick, Mr. Parks. Our time is expired.
Mr. PARKS. Congressman, if I could just add that our
biggest customers are DOTs. Mississippi Department of
Transportation, Tennessee Department of Transportation. They
have to deal with the same issues that we as industry have to
deal with in determining what is jurisdiction and getting
permits to do what they do.
Mr. COLLINS. All right. Thank you.
Thank you all very much. I yield back, Mr. Chairman.
Chairman GRAVES. Mr. Payne?
Mr. PAYNE. Thank you, Mr. Chairman, and to the ranking
member. I appreciate everyone's testimony today.
Mr. Field, in your testimony, you mentioned that for
business and moral reasons you protect the quality of water
around your ranch.
Mr. FIELD. Yes, sir.
Mr. PAYNE. That is very admirable. However, in my home
district, which takes in Newark, New Jersey and surrounding
communities, we have the Passaic River, which was a place where
a lot of industry was created in the 1800s and 1900s, and
really drove a lot of the industrial revolution around cities.
Newark is the third oldest city in the country. But it became a
dumping ground. Agent Orange was produced in Newark, New
Jersey, and a lot of issues that we still have with the river
come from the toxins and those type of different agents. So do
you really think that we can rely on moral integrity of
businesses to not pollute our nation's waters? I mean, everyone
is, you know, and I commend you, and it is around your ranch
and that is important to you because that is where you are, but
do you think we can rely on businesses not to pollute or follow
your example?
Mr. FIELD. Well, that is an excellent question,
Congressman, and I certainly understand your concerns where you
sit. And you also bring up an excellent point. Effectively,
what I would recommend, I think the best decision for your
problem is--the solution will be found locally in New Jersey,
not by me in Washington State saying, well, I think the best
way to clean up your reach of river, the local decisions.
Nobody on this panel is saying we do not think we need to be
able to regulate and protect water quality. When I go out to
the tap to get a drink of water, I want to make sure it is
safe. I want to make sure you and your family have safe water.
But I do not believe creating a rule that does not clearly
define, and as one that will be covered under the regulation, I
need to know clearly is this jurisdictional? Is this not? Just
what it means.
But to your point, in terms of being able to address your
water quality issues, I absolutely think that solutions can be
found locally, watershed by watershed. The most effective way
to address the issue on your river is to get the local--all the
stakeholders together, whether it be a total maximum daily
load, to be able to get everybody there that is on the water
body, identify what the issue is, and collaboratively come up
with a solution. If there is buy-in from everybody, you can
certainly address the issue.
Mr. PAYNE. Yes, and that is a very good point. The key
there is buy-in. But, you know, as I stated, you protect the
water around your ranch. A lot of these larger industries, the
people that are involved in that business, do not live in that
community, so it does not matter very much to them what their
water quality is in that area. So my concern, and what we are
trying to do, is make sure that we can make sure that everyone
has the same opportunity in their community to have safe
drinking water.
Mr. FIELD. Are these all nonpoint facilities or are these
point source facilities as well as nonpoint? Because I am a
nonpoint. I am a nonpermitted facility right now. If you are
talking about a chemical manufacturer, that is a point source.
If they are permitted to discharge whatever their discharge is
into a water body, they are regulated right now under EPA, and
I am not sure if you are delegated, but you may have a state
authority regulating that as well. But there is regulation, and
if they violate the numbers in terms of their permit, that is
most certainly something that can be penalized. But it is a
little difficult if we are talking about the applicability of
point source regulation to nonpoint operations as well.
Mr. PAYNE. Well, I mean, you know, and that is quite true,
but what we find is people tend to like to cut corners, and
even though they are regulated, there are situations where we
find that they have not followed the rules. So that is the
actual important piece of that.
According to the EPA, over 117 million people drink from
water systems in areas that currently lack full and clear
protection under the law. Do you think it would be fair to
exempt the polluter from the Clean Water Act, which would force
them--force the community to pay for the clean-up of its water
supply? I would like to ask Professor Buzbee--the whole panel,
please.
Mr. BUZBEE. I think that the need for clear prohibition, so
people know what to do so they are not disadvantaged. Then
business has been shown again and again. So having clear rules,
I think everyone at the table here would agree, clear rules are
important, but it is important not to rely on just self-
policing, but that does tend to be a recipe for disaster.
Mr. PAYNE. Okay. And my time is up, but quickly, if you
could each give a quick brief answer.
Mr. Woods?
Mr. WOODS. I am not sure that I have the expertise to
address your problem directly. As an old mayor, I believe that
the best people to deal with it in the community are those
people in the local community. They have the best knowledge of
it, and I think that they can come up with the best solution,
quite frankly.
Mr. PAYNE. Thank you, sir.
Mr. PARKS. Congressman, if I may, all of our projects
require extensive site review. We open it up at the local
level. There are tremendous opportunities for public
participation. Most of our projects are governed by site-
specific conditional use permits where conditions can be
imposed on that at the local level. Both of our states,
Mississippi and Tennessee, are authorized to implement the
federal NPDS programs.
And with regard to water pollution in general, our
company--the companies in our industry, and I would suggest
probably to most industries--you cannot just allow water to
discharge off your site uncontrolled. There is an extensive
framework that is there already. How you manage any waters that
leave your site, whether it be processed water or stormwater,
we have to develop a pretty extensive stormwater prevention
plan for every one of our projects that details exactly how we
will manage stormwater runoff before it can impact anything.
And those sites are open for inspection. They are inspected by
state and federal regulators.
Mr. PAYNE. All right. Thank you.
And Mr. Field, I have gone way over my time so I will yield
back to the chair. Thank you.
Chairman GRAVES. Mr. Luetkemeyer?
Mr. LUETKEMEYER. Thank you, Mr. Chair.
It is interesting that we are discussing this rule today
because I know the chairman and I fought this battle a couple,
three years ago. Whenever the various powers that be and tried
to do the same thing with--I am going to take the word
``navigable'' out of the Clean Water Act. And here we are again
today back in the same situation.
And so I know Mr. Buzbee, with his comments, indicated that
we have had the Clean Water Act basically in force, and with
the EPA, the authority to make rules for over 30 years, and I
think we have seen probably some good things come from out of
that from the standpoint we have much better clean water today,
but as we see over those few years, the last number of years,
bureaucracy tends to expand its limits or expand its authority,
and it seems that we are in this process now.
If you look at what is going on with the administration,
this is the biggest fear why we are looking at this rule in
this light is the tremendous fear of overreach. And I think
that the gentleman from Oregon and the gentleman from New York
behind me here, both were very articulate in explaining the
concerns that they have, the amount of overreach here from the
standpoint that there is this fear that it continues to be that
this administration will overreach bureaucratically. Every time
there is a rule or regulation, it goes one step beyond what
their intent is, and therefore, it impacts our business
community in a very negative way.
And I appreciate all of you being here today. I think if
this rule goes forward, I see no way that it does not wind up
in the Supreme Court, because this is something that is going
to impact all three of the business people before us today in a
way that is going to drive you either to have an extreme amount
of cost or drive you completely out of business.
And so I guess my question to each one of the three of you
to begin with is Mr. Field, if this thing goes forward, are you
going to be able to stay in business?
Mr. FIELD. I honestly do not know. It would depend on
whether or not EPA would determine the parcels that I graze to
be within their jurisdiction or not, and I cannot honestly
answer that. I am sorry.
Mr. LUETKEMEYER. Mr. Parks?
Mr. PARKS. Well, the question may be at what cost will we
stay in business? I mean, there are limits. I mean, assuming
that the cost increases can be supported, perhaps. But, you
know, who is to know? There is a limit on what we can absorb.
What it will definitely do is reduce the amount of resources
that we can recover and will make permitting a much more
complicated endeavor. And as a small company, we try to manage
as much of that in-house as possible. We try to avoid going to
consultants because that is a cost that we cannot afford to
bear because that is a tradeoff.
Mr. LUETKEMEYER. Mr. Woods, I think you kind of already
answered that before, but do you want to get on the record one
more time? Get one more hammer at this?
Mr. WOODS. I would, if you do not mind. Quite frankly----
Mr. LUETKEMEYER. Push your button, please.
Mr. WOODS. I am sorry.
Quite frankly, I doubt that we would stay in business, and
I doubt that most builders and small developers would stay in
business. You have to remember one thing. The costs that are
incurred are before you can do anything, so there is not a
return until you get the delineation of whether you are
involved or not involved, and that does not mean that your
plans are going to be accepted.
Mr. LUETKEMEYER. There is a huge capital outlay here before
you ever get one cent of return on your investment, and it all
has to be recovered at some point, hopefully from the sale of
your property.
Mr. WOODS. And I think we do not understand small business.
For the most part, small business is mom and pop, and it is mom
and pop making a living for their family so that the kids can
go to college. And if you have got a decision to make between
spending $200,000 to see if you might be able to develop a
small piece of ground and come up with a plan that might then,
two, three, four, five years later get a permit, I can tell you
the kids' college or the dental bill is going to win out.
Mr. LUETKEMEYER. One of the things that concerns me, it
seems like this is a solution in search of a problem from the
standpoint that what are we trying to solve here?
Professor Buzbee, can you tell me what we are trying to
solve by the expansion of this rule to go as far as these
gentlemen think it is going to go? Where is the problem that we
are solving when you impact jobs at this level that they are
talking about today?
Mr. BUZBEE. I guess, first, it is important to remember the
Clean Water Act is not limitless in its reach, and so you do
have to show that something is a tributary wetland, adjacent
wetland.
Mr. LUETKEMEYER. These gentlemen have all testified here
today that they believe if they interpret this to the lengths
at which you can go, at which attorneys will stretch the law,
which has been the case time and time again, especially with
this administration, this is where we are headed. So where is
the problem that this is trying to solve?
Mr. BUZBEE. My sense here is that this is inaccurate; that
people will be able to build, and people that can build will
continue to have thriving cattle businesses. Not everything
needs to be put in a tributary or a wash or a river or a
wetland. There is plenty of land where businesses can thrive.
The Clean Water Act is really about where you put these things
and where you discharge pollutants.
Mr. LUETKEMEYER. Well, Professor, I appreciate you living
in a utopian society. Unfortunately, these three gentlemen do
not live there. They live in the real world, and they have
explained how the impact of this is going to be in the real
world on real people on real jobs and real livelihoods, and
that is what this Committee is all about today.
Mr. Chairman, I yield back.
Chairman GRAVES. Mr. Bentivolio?
Mr. BENTIVOLIO. Thank you very much, Mr. Chairman.
I would like to thank the chairman for holding this
important hearing, and I would also like to thank the witnesses
for taking part today and helping to enlighten us about the new
waters of the United States rule.
When I read your testimonies, it made me wonder if the EPA
purposefully makes vague and controversial rules simply so that
bureaucrats over there can see their office in newspaper
headlines.
Just a few weeks ago, I held a hearing in my district about
the impact of federal regulations on small businesses in
Michigan. Mr. Woods, one of those who testified, was Richard
Kligman of Superb Custom Homes out of Plymouth, Michigan. He,
too, brought the waters of the United States rule and concluded
it this way--these federal consultations related to the Clean
Water Act are just another layer of red tape that the federal
government has placed on small businesses, and it is doubtful
the agencies will be equipped.
This nonsense has to stop, Mr. Chairman. Everyone here
wants to protect the environment, but we also want to help
people in our country succeed and prosper. I do not think that
those are mutually exclusive so long as the EPA is proposing
rules that are easily understood and make common sense.
Unfortunately, this time it does not seem to.
But I would like to go one step further. Mr. Chairman, you
know, I went to--my wife said we had to replace the water
closet in our bathroom, and so I went to her favorite hardware
store and tried to find a water closet, a toilet, that would
just take enough water, you know, and they said, ``No, I am
sorry. The only toilets we can see now are regulated to how
much water can be flushed down at a time.'' And I asked the
salesman why that is. He says, ``Well, we have to conserve
water.'' And I said, ``Well, you know, I live on a farm. We
have a well and a septic. I recycle all my water. You know,
that is how it works.''
The government has this ``one size fits all.'' I also have
a pond on my farm, and I have been recently notified after this
hearing that the EPA is really concerned about the toxins in
the pond. Well, you know, we live on a dirt road in the
country, and all the ditches on the dirt road somehow, you
know, there is about 60 acres, feeds my pond, which then drains
about two miles further downstream into some--I think it is the
Rouge River eventually. But why am I suddenly responsible for
the toxins that run off the road into my pond? Right? So do I
have to--is the EPA going to regulate ditches like that and how
they run into ponds?
I understand some of these concerns, but I have made those
arrangements on my own without the EPA. I built berms made of
gravel. And that naturally cleans up. Sand and gravel naturally
cleans up the toxins that were reaching my pond. So I am
wondering, do I have to get EPA requirements and permits to do
that? Or is that something I can do on my own because that is
probably the wisest thing for me to do? Why do I have to have a
government regulator telling me what I have to do for every
single facet of my life?
Mr. Parks, should I ask a question now? Sorry, I do not
like the EPA. As far as I am concerned, China needs the EPA. So
if we can send 15,000 employees to China for five years, I
think we would all be better off.
Mr. PARKS. Well, I would say ditto, but we do have to work
with these folks, so I am not going to go there. But you do hit
the nail on the head. As I read through the definitions, it is
hard for us to see what would not be jurisdictional, or
potentially could be interpreted that way. And that is really
the problem. It opens a lot of things up to interpretations.
Even exclusions are not clear. One part removes artificial
ponds created by dyking dry land, yet a tributary can be a
manmade pond or a ditch. So which is it? I mean, we create a
lot of ditches. We create a lot of basins, a lot of ponds, that
can sit there for 10, 20, 30 years before we are ready to close
them down. And so it is a big question for us. Are we creating
all this jurisdictional area through our business processes?
Mr. BENTIVOLIO. Thank you very much. I think I have done my
ranting. Thank you very much, Mr. Chairman. I appreciate it.
Thank you.
Chairman GRAVES. Mr. King?
Mr. KING. Thank you, Mr. Chairman. I thank the witnesses
for your testimony.
I have a little bit of reminiscing I went through as I
listened to some of this, too, but I wanted to turn to
Professor Buzbee first and ask this question. We have got the
issue out here of significant nexus, but there is another term
that is back in the dusty reaches of my mind called ``waters
hydrologically connected to.'' And I would ask Professor Buzbee
are you familiar with the term? And would you define that for
this Committee, please?
Mr. BUZBEE. The exact term I am not sure, but I think what
you are probably referring to is in the case Riverside Bayview
Homes. A unanimous Supreme Court upheld jurisdiction for waters
that essentially were wetlands near other waters and part of
the grounds for that was the importance of taking into account
hydrologic connections and the importance that they serve.
Mr. KING. But what is a hydrologic connection?
Mr. BUZBEE. A hydrologic connection in that case and
subsequent cases and the new regulations as I understand it has
to do with essentially whether water is moving from one place
into another which they look at through several different kind
of functional analyses.
Mr. KING. Stagnant water would not be hydrologically
connected?
Mr. BUZBEE. I am sorry; I missed it.
Mr. KING. Stagnant water would not be hydrologically
connected?
Mr. BUZBEE. If the water is truly isolated so it is not
flowing, no, it would not be.
Mr. KING. I see. So then it would not be necessarily the
flows; it would be the connection. So if you had two ponds and
a conduit between them, say a small--just a stagnant stream,
but as long as you could say, float a small boat, that would be
hydrologically connected?
Mr. BUZBEE. I do not believe so. I do not think that is
correct. The way they walk about it, they look at different
regions. I think what you would be describing would be what
appears to be an isolated water and then the question is
whether that, because of its----
Mr. KING. But if it is two ponds and there is a very small,
nonflowing stream between the two of those, would those ponds
be hydrologically connected?
Mr. BUZBEE. The way hydrologically connected worked is I
think they were ultimately talking about ultimately connecting
to navigable waters or navigable-in-fact waters.
Mr. KING. Yes. Yes. And I agree with that definition. And I
bring this up in part of this discussion about significant
nexus. I think I will do this. I will tell the narrative.
Back in about 1994--first, I would let the Committee know
that I have spent my life in soil conservation, water quality.
I built more terraces probably than anybody in Congress or
waterways or any kind of retention ponds you want to describe.
It has been my life. And I remember walking into my
construction office one night in about 1994 and there sat a
farmer. And he said, ``Did you see this DNR rule that they have
published for comment?'' And I read the rule and it said,
``These 115 streams are proposed to be protected streams. These
streams, to their geographical boundaries and ``waters
hydrologically connected to them.'' And I went straight up in
the air because I believe in property rights, and I oppose
property takings by government or anybody else. At that time it
was a Fifth Amendment property rights issue before Kelo and
went straight to Cherokee, Iowa, for the public comment
hearing. And I asked them the question, ``Define it for me,
hydrologically connected.'' They said, ``Well, we cannot.''
Then I said, ``Then take it out of the rule.'' ``Well, we
cannot.'' ``How can you tell me you cannot define it and you
cannot take it out? Then if you cannot define it, you cannot
tell me why it is there.''
Then the next night the hearing was in Algona, Iowa, and
that was two hours up there and they saw me coming and said
only one question per customer. Well, you can imagine that I
did not walk away from that microphone until I had asked a lot
of them. Subsequent to that I ran for the Iowa Senate because I
had been boxed out of a hearing as a witness. They would not
really let me testify to the answer to this.
So this goes pretty deep to me. And when I see the language
here that we are dealing with and the stretch of the rules--I
know how rules get stretched, and I have lived it, and so have
a lot of the members of this Committee. We are dealing with the
traditional navigable waters of the United States. That goes
back to 1948--or excuse me, 1848, when the Corps of Engineers
was granted the authority to remove the debris from the
navigable waters. Now we get added to that, the definition has
been expanded through litigation and some statute, but it also
now includes interstate waters and wetlands, the territorial
seas, impoundments of the first three categories and
tributaries, tributaries of the first four categories, and
number six, waters and wetlands adjacent to the first five. But
the language of ``other waters,'' which is all these categories
that I have described, including riparian areas, floodplain,
tributaries, significant nexus. When I see that language that
says ``significant nexus,'' that is the 2014 term that
substituted for ``waters hydrologically connected to.'' And how
will they define hydrologically connected to? It is real
simple. It is whenever two water molecules touch each other you
can make the argument that they are hydrologically connected.
You can argue the case law that is out there and how it is
being interpreted, but in the end, if two water molecules
touch, it is hydrologically connected. If you take a piece of
nice, good, well moistened, freshly rained upon Iowa black
soil, it is about 25 percent moisture today. Water molecules
touch. They go all the way up through streams that water your
cattle and all the way up to these homes that you are
developing, and all the way into everybody's property in the
United States only by the stretch of the definitions that are
put in these rules.
And I would just pose one final question quickly to
Professor Buzbee, and that is do you believe that if the
federal government regulates the complete usage of property
away from our property owners--whether it is the ranchers,
whether it is developers--if they regulate the utilization of
that property away and render it without value to the owner, is
that a takings under the constitution?
Mr. BUZBEE. I think if you are phrasing it like the Lucas
case by the Supreme Court that a 100 percent taking of all use
would be a taking under that precedent.
Mr. KING. Useless to the owner for the purposes of----
Mr. BUZBEE. I think it is rendering it without value
actually was the way it talked about it. So, again, it is more
complicated than the subsequent cases.
Mr. KING. We are close to a yes though, and I will settle
for that. And I appreciate all your testimony, and I yield back
to the Chairman. Thank you.
Chairman GRAVES. I have a question for Mr. Woods.
In your testimony, you stated that any waters or wetlands
within a floodplain can be subject to the Clean Water Act. I
was just curious--or Clean Water Act jurisdiction--how that is
going to affect your industry, your business. What impact is
that going to have?
Mr. WOODS. I will speak to it relative to the Midwest and
the Plains States, wherever you want to put us. As you well,
now, if you are in Independence, Missouri, Blue Springs,
Missouri, you are close to the Missouri River. You are close to
the Little Blue and the Big Blue and the Caw. And we have got
tons of what has been called for years ``bottom ground.'' Your
first problem is you cannot get yourself too far away from a
floodplain or a wetlands.
The second problem that you have in that definition, and
that is the one that probably bothers me more, in too many
cases the maps that are used and have been used to delineate
these nexus are erroneous. We have seen situations, one
specific situation in Riverside, Missouri, where the floodplain
was halfway up the hill. It is not where the creek is. Now, I
defy you to put a floodplain halfway up a hill and not in the
creek. And it took us almost two and a half years to get a
determination and a change in the flood map. We had to go in
and prove that the water did not usually run across the hill
halfway up; it usually ran at the creek.
So those are the kinds of problems you are going to run
into, is it is not that it is truly a floodplain or it is not
that it is truly a wetlands.
The case that I pointed out here, the very first thing we
did in the subdivision that I am talking about in Independence,
Missouri, just to put it into perspective, is we had
consultants come in and walk our site. It is almost 500 acres.
It is a bottom land field, but it is not a floodplain. And
actually it had been prior converted, which I just find out now
may have changed. But it had been farmed for 150 years. There
were none there. There were none found. And yet we still ended
up subject to because we were close enough; we were adjacent to
some things. We felt it best that we move forward, try to move
forward in a very positive way. I thought we were being wise.
We brought everybody out, let them tour the site and tried to
put in place the very best practices and show off, and as I was
told by the city engineer in Independence, we were justly
rewarded for our good deeds. Two and a half years and $250,000
later we got a permit. That is what concerns me the most.
Chairman GRAVES. Well, and you mention, too, and there are
some carve-outs as has been pointed out by Professor Buzbee.
However, it also states ``adjacent to jurisdictional waters.''
And that is what concerns me as much as anything else.
And in closing, I want to kind of build on what Mr.
Luetkemeyer said as well. We fought this before. Removing the
term ``navigable'' out of the Clean Water Act. And we fought it
under two different majorities. And it failed Congress. This
failed the people's house by folks that are voted on by
constituents. And now here we are fighting it coming at it from
the regulatory standpoint by individuals who are not elected,
who are not responsible to anyone, and that is the most
frustrating part. The will of the people was done, and this was
defeated. And now here we are going through this process under
agency proposed rulemaking, and it is frustrating.
But all of this testimony has showed us that the waters of
the United States or this proposed rule is going to have a
significant impact on small businesses. And the EPA and the
Corps failed to do the assessments that they were supposed to
do under the Regulatory Flexibility Act. And that is another
thing that bothers me as much as anything else because when
agencies fail to comply with the RFA, the result is always
poorly crafted regulations, and it is going to impose a lot of
unnecessary and costly burdens on small business, and this is
going to be the case. We are going to be closely monitoring
this and the development of this rule, and we are going to be
engaging all of the agencies until they come in full compliance
with the RFA.
And with that, I would ask unanimous consent that all
members have five legislative days to submit statements and
supporting materials for the record. Without objection that is
so ordered.
And with that, I appreciate all of you coming in and your
testimony. The hearing is adjourned.
[Whereupon, at 3:41 p.m., the Committee was adjourned.]
A P P E N D I X
Opening Statement: Congressman Blain Luetkemeyer (R-MO-3)
I appreciate the opportunity today to examine the impacts
of the proposed ``Waters of the US'' rule on our nation's small
businesses. This proposed rule will vastly expand federal
jurisdiction over our nation's waters and represents one of the
most expansive federal land grabs in history. It will extend
federal regulations to a whole host of waters that the CWA was
never intended to apply to including ditches, ponds, and
seasonally wet puddles.
If finalized, this rule will stall development, cost jobs,
and put a plethora of activities and decision-making under the
heavy hand of federal regulation. With the stroke of a pen
bureaucrats in Washington can do immense damage to our economy
and, unfortunately, this appears to be just another example of
this overreaching administration putting the federal regulatory
train into overdrive while disregarding the impact their
actions have on the lives of hard working Americans.
Similar proposals have been defeated numerous times in
Congress but their failure seems to only embolden this
administration to expand its power through rulemaking. As with
any policy of such vast impact, the American people deserve to
have their voices heard through their elected representatives.
Moreover, entities that will be affected have a right to be at
the table to have their concerns addressed.
Despite claims to the contrary, this proposed rule will
establish broader, convoluted definitions of regulatory
categories that will create even more uncertainty for our
nation's small businesses. Under the definition regulators will
be given far-reaching authority to subjectively apply
jurisdiction over all types of waters. This gives little
confidence to small businesses trying to stay within the law.
One thing is clear from the proposal; this rule will
drastically increase the number and types of activities that
are subject to CWA permitting. Obtaining such permits often
require expertise, time, and resource that many small
businesses simply don't have. Permitting will in turn trigger
additional review requirements under laws including the
National Environmental Policy Act (NEPA) and the Endangered
Species Act (ESA). Faced with these onerous and prohibitive
costs small businesses will be forced to decide whether to
spend massive amounts of money on permitting, drastically alter
their activities, or close-up shop.
As our economy struggles to regain its footing, small
businesses will provide the engine that drive job creation and
economic growth. It is frustrating that proposals like these
threaten the very growth that our nation needs. Industries such
as home building, farming, and energy exploration have been
bright spots in our economic recovery and the proposed rule
puts them directly in the cross hairs of the federal regulatory
regime.
I look forward to receiving testimony from our witnesses to
illustrate the potential impact this proposed rule will have on
their respective businesses and industries.
Testimony
Jack Field
Owner, Lazy JF Cattle Co.
with regards to
Will EPA's `Waters of the United States' Rule Drown Small Businesses?
submitted to the
United States House of Representatives
Committee on Small Business
Representative Sam Graves, Chairman
submitted by
Mr. Jack Field
Washington Cattlemen's Association
National Cattlemen's Beef Association
May 29, 2014
Washington, DC
Good afternoon, my name is Jack Field. I am a cattle
rancher from Yakima, Washington and the Executive Vice
President of the Washington Cattlemen's Association. WCA is an
affiliate of the National Cattlemen's Beef Association of which
I am also a member. Thank you to the Chairman and Ranking
Member for allowing me to testify today on the impacts of the
Environmental Protection Agency and the U.S. Army Corps of
Engineers' proposed expanded definition of ``waters of the
United States.'' I will also provide my concerns with the USDA-
Natural Resources Conservation Service (NRCS) interpretive rule
that was promulgated alongside this proposal.
First and foremost, the cattle industry prides itself on
being good stewards of our country's natural resources. We
maintain open spaces, healthy rangelands, provide wildlife
habitat and provide the country with those juicy ribeyes we all
love to throw on the grill on summer days like today. But to
provide all these important functions, cattlemen must be able
to operate without excessive federal burdens, like the one we
are discussing today. I don't think the negative impacts of
this definition can be overstated. As a producer and the head
of a state association, I can tell you that after reading the
proposal rule it has the potential to impact every aspect of my
operation and others like it by dictating land use activities
in Washington state from 2,687 miles away. I would also feel
confident in saying that I believe it will actually have a
detrimental impact on water quality.
After reading the proposal I can say that one thing is
clear, the proposed definition is not clear. If the agencies'
goal was actually to provide clarity than they have missed the
mark completely, making the status quo worse, not better. The
proposal would include ditches as Water of the U.S. if a
regulator can distinguish a bed, bank, and ordinary high water
mark. The proposal also would make everything within a
floodplain and a riparian area a federal water by considering
them ``adjacent waters.'' The result could be to eliminate the
use of my summer pasture, which is located wholly in a
floodplain. I will show you what I think it could mean for my
ranch and other small businesses like it.
In total I own and manage 55 cow/calf pairs and 10
replacements, or 120 total head of cattle, which is the average
number of head for a cattle rancher in the U.S. There are some
bigger and some smaller, but I'm about your average size, which
means the average cattle producer in the U.S. falls well under
what the law considers a ``small business.'' We clearly manage
the landscape and must utilize it to raise our animals. My
cattle drink from tanks which I pump from a stream so I can
protect potential bull trout habitat, they also water from
irrigation ditches, ponds, creeks, seeps and puddles that they
find. Therefore it is important to me and my operation to have
clean water. Protecting the quality of the water I need for my
cows does not require the federal government's oversight.
Myself, for profitability and moral reasons, and the state of
Washington do a pretty darn good job.
You can see in the first attached picture I have a small
stream running through my pasture that my cattle utilize for
drinking water. It is my judgment, based on the language of the
proposal that this could easily qualify as a water of the U.S.,
opening me and my ranch up to significant liability. Not only
could I be required to get a 404 permit for grazing my cows in
the pasture, but by making it a federal water there are now
considerations under the National Environmental Policy Act, or
NEPA, and the Endangered Species Act due to the federal
decision-making in granting or denying a permit. There is also
the citizen suit provision under Sec. 505 of the Clean Water
Act that would keep me up at night. For the price of a postage
stamp someone who disagrees with eating red meat could throw me
into court where I will have to spend time and money proving
that I am not violating the Clean Water Act. I don't think this
is what anyone had in mind when Congress passed the Clean Water
Act.
Instead of improving water quality, it is my belief, the
belief of the Washington Cattlemen's Association, and the
belief of the National Cattlemen's Beef Association that this
proposal will decrease the quality of our water because it
would discourage ranchers like myself from implementing
conservation practices that are designed to protect water
quality. As an example, I recently completed a project that you
can see in the second attached picture that creates a riparian
pasture so I can manage the grazing that occurs within the
riparian area. The fence has allowed me to better manage my
forage and to protect water quality. I voluntarily installed
the fence, not because I had to, but because I thought it would
be good for the environment. If this proposal and the NRCS-EPA-
Corps Interpretive Rule were in force when I started this
project I would not have completed it due to the significant
legal liability they have created.
The Washington Cattlemen's Association and the National
Cattlemen's Beef Association believe some presumptions have
been created by the NRCS interpretive rule. First, that cattle
grazing is a discharge activity subjecting me to legal
liability if it occurs in a water of the U.S. I have never
heard of the federal government declaring cattle to be either a
point source or to create a fill activity under the Clean Water
Act, but that' exactly what they've done. Second, if I
implement a conservation practice that is not on the
prescriptive list of 56 NRCS practices, or not done to the NRCS
standard, it could now fall outside the statutory exemption for
normal farming and ranching. The result is that if I do not
follow the exact specifications for NRCS' prescribed grazing
standard on my operation, I am no longer exempted from the 404
dredge and fill program. While this might not have been the
agencies' intent, it was the result. The fence that I put up in
the attached picture was done with cost-shared dollars from the
local conservation district. It was not required to meet the
more strenuous NRCS standard for fencing and I would not have
engaged in the project had it been a requirement. You can see
in this picture that the posts are spaced further apart than
NRCS specs require, and do not have the required number of
wires. Both those requirements add costs. The entire project
cost approximately $1,400. Had I been required to install a
fence meeting the NRCS standard and specifications it would
have cost me an additional $300, for a quarter mile fence.
While that may not seem like a lot, if you expand that over
hundreds of acres it can really add up to a lot of money. And
for small business like mine, $300 does matter. Future
conservation projects will not be implemented if this
interpretive rule and proposed definition are allowed to move
forward. I could not afford to risk being in violation of the
Clean Water Act with fines of $37,500 per day and possible
criminal sanctions to put in a project. I also would not go
through the hassle and high cost of getting a 404 permit to
complete this small project. I want to do my part for the
environment, but I can't if it would jeopardize my entire
operation. This is why the National Cattlemen's Beef
Association and the Washington Cattlemen's Association are
asking the agencies to withdraw the Interpretive Rule.
This didn't have to be the result; all the agencies had to
do was engage stakeholders early on in the process, incorporate
our suggestions and we would be much farther along in crafting
a rule that actually would clarify the scope of Clean Water Act
jurisdiction. We are particularly concerned with the lack of
outreach with the small business community, contrary to the
Regulatory Flexibility Act. Being the owner of a small business
myself in the cattle industry and knowing the detrimental
impact this regulation will have on my operation, it is
appalling the agencies could assert that this regulation will
not have a ``significant economic impact on a substantial
number of small entities.'' It is clear to me that the rule's
primary impact will be on small landowners across the country.
The agencies should have conducted a robust and thorough
analysis of the impact, but is clear from the certification
that they have not completed this important step in developing
the regulation.
There was also zero outreach to the agriculture community
before the rule was proposed and before the interpretive rule
went into effect. Despite what the EPA is saying, they did not
have a meaningful dialogue with the small business community as
a whole. Even when cattle producers asked the head of the
office of water at our February meeting in Nashville about the
proposal, all we were told was to ``wait and see what the
proposal says.'' Well we were forced to wait instead of having
input and this is what we got, a proposal that doesn't work for
small businesses, doesn't work for cattle ranchers, and doesn't
work for the environment.
[GRAPHIC] [TIFF OMITTED] T8042.001
[GRAPHIC] [TIFF OMITTED] T8042.002
Chairman Graves and members of the Committee, thank you for
inviting me to testify on behalf of the National Stone, Sand &
Gravel Association (NSSGA) at this hearing: ``Will EPA's
`Waters of the United States Rule' Drown Small Businesses?''
My name is Alan Parks and I am Vice President of Memphis
Stone and Gravel Company, of Memphis, Tennessee, where I have
worked for almost 15 years on permitting and environmental
compliance. Additionally, I direct the company's exploration
drilling activity, long range mining, and reclamation work. I
am a registered professional geologist in the State of
Tennessee and have degree in mining engineering. My prior
occupation was working as a geologist for the Tennessee
Department of Environment and Conservation.
NSSGA is the world's largest mining association by product
volume. NSSGA member companies represent more than 90% of the
crushed stone and 70% of the sand and gravel consumed annually
in the U.S., and there are more than 10,000 aggregates
operations in the U.S. Of particular relevance to this hearing,
70% of NSSGA members are considered small businesses, and many
are located in rural areas.
Memphis Stone and Gravel Company was started in 1910 and
remains a family-owned business. We have eight active mining
facilities in Tennessee and Mississippi. Memphis Stone and
Gravel Company has a long history of providing aggregates for
the betterment of the nation. To assist with the war effort in
1942, Memphis Stone and Gravel Company was the prime contractor
for Halls Air Force Base and Murfreesboro artillery ranges. We
have won national and local awards for conservation, community
service, and safety.
Like all aggregates operations, Memphis Stone and Gravel
Company is regulated by numerous entities including the city,
county, and state governments, and federal agencies including
the EPA, the Mine Safety and Health Administration, and the
U.S. Army Corps of Engineers. Before we begin operations we
must obtain permits to construct and operate our facilities.
After we start operations, our facilities are routinely
monitored to ensure we are operating in a safe and
environmentally responsible manner. A safe and healthy
environment in which to work is good business, and in the best
interest of the employees. We work hard to make sure this
happens.
Aggregates are the chief ingredient in asphalt pavement and
concrete, and are used in nearly all residential, commercial,
and industrial building construction and in most public works
projects, including roads, highways, bridges, dams, and
airports. Aggregates are used for many environmental purposes
including: treating drinking water and in sewage treatment
plants, for erosion control and in cleaning air emissions from
power plants. While Americans take for granted this essential
natural material, they are imperative for construction. Unlike
other businesses, we cannot simply choose where we operate. We
are limited to where natural forces have deposited the
materials we mine. There are also competing land uses that can
affect the feasibility of any project.
Through its economic, social and environmental
contributions, aggregates production helps to create
sustainable communities and is essential to the quality of life
Americans enjoy. Aggregates are a high-volume, low-cost
product. Due to high product transportation costs, proximity to
market is critical; thus 70% of our nation's counties are home
to an aggregates operation. Generally, once aggregates are
transported outside a 25-mile limit, the cost of the material
can increase 30% to 100%, in addition to creating environmental
and transportation concerns. Because so much of our material is
used in public projects, any cost increases are ultimately
borne by the taxpayer.
As the industry that provides that basic material for
everything from the roads on which we drive to purifying the
water we drink. NSSGA members are deeply concerned that EPA's
proposed rule will stifle our industry at a time when we are
just now recovering from the economic downturn. The aggregates
industry removes materials from the ground, then crushes and
processes them. Hazardous chemicals are not used or discharged
during removal or processing of aggregates. When aggregates
producers are finished using the stone, sand or gravel in an
area, they pay to return the land to other productive uses,
such as residential and business communities, farm land, parks,
or nature preserves.
Over the past eight years, the aggregates industry has
experienced the most severe recession in its history. This
expansion of jurisdiction will have a severe impact on industry
by increasing the costs and delays of the regulatory process,
causing further harm to an industry that has been production
drop by 39% since 2006. While stone, sand and gravel resources
may seem to be ubiquitous, construction materials must meet
strict technical guidelines to make durable roads and other
public works projects. Because many aggregate deposits were
created by water, they are often located near water. The
availability of future sources of high quality aggregates is a
significant problem in many areas of the country and permitting
issues has made the problem worse.
NSSGA members pride themselves on meeting or exceeding
compliance with all pertinent environmental laws and
regulations, and emphasize sustainable practices. Memphis Stone
and Gravel Company pays very close attention to our resources,
particularly water. Careful design of our plants ensures we
maximize the recycling of precipitation and reuse of all of our
water supplies. Additionally, we operate most of our facilities
as a no-discharge system, keeping all process water on-site and
requiring no hazardous chemicals in our production process.
EPA claims this rule change is needed because so many
waters are unprotected, but that is not true: states and local
governments have rules that effectively manage these resources.
For example, states and many municipalities regulate any
potential negative impacts to storm water run-off and require
detailed storm water pollution prevention plans. These plans
are required for every project, both during construction and
operations. States and local governments are best-suited to
make land use decisions and balance economic and environmental
benefits, which is what Congress intended. While EPA states
groundwater is excluded from this rule, the rule also says that
``shallow subsurface connections'' are included. Does this mean
the water that fills our pits is jurisdiction? It would be a
rare event to NOT encounter shallow, unconfined or perched
groundwater in sand and gravel deposits that we typically mine.
Will a separate permit be required for reclaiming the it and
returning it to another, beneficial use? These are just some of
the many questions this rule poses, but does not answer. And,
that in many ways underscores the problem with the proposed
rule, the uncertainty of the scope of jurisdiction.
EPA contends the purpose of the proposed rule is to
eliminate the time and resources allocated to make site-
specific review of determinations. Before breaking ground, we
always evaluate whether we are affecting jurisdictional water,
which requires consultation with the Corps and sometimes hiring
a consultant. Yet EPA doesn't provide any set criteria on what
a ``significant nexus'' is, so the inclusion ``other waters''
will require additional time for determinations to be made. The
delay caused by multiple consultations, surveys, reports, and
individual watershed permits processed will add significant new
costs during the permitting process, which could lead to
abandoning projects once considered viable.
The aggregates industry requires large land areas to
process and remove the extensive quantities of material needed
for public works projects. Memphis Stone and Gravel Company can
use up to 25 acres a year per site. This proposed rule could
effectively place many areas ``off limits'' due to cost of new
permits and/or the mitigation required to off-set losses to now
regulated streams.
Having a clear jurisdictional determination for each site
is critical to the aggregates industry. These decisions impact
the planning, financing, constructing and operating aggregates
facilities. Because the Clean Water Act 404 ``dredge and fill''
permitting process and the corresponding states' 401
Certification process is so long and costly for a small company
like Memphis Stone and Gravel Company, we attempt to avoid
jurisdictional areas. Now, under the proposed revisions, many
previously non-jurisdictional areas like floodplains, wet
weather conveyances, upland headwaters, ephemeral streams or
any riparian area could be considered jurisdictional. It will
make nearly any area we try to access regulated and in need of
additional permits.
Even obtaining a jurisdictional determination can be a
significant undertaking for a small company like ours. As a
small company we attempt to do many of the jurisdictional
determinations and other permitting in-house. However, Memphis
Stone and Gravel Company will from time to time seek a
consultant to help us obtain the required information for
submission, because of time constraints. While jurisdictional
determinations are good for five years, as an industry we make
business decisions to buy or lease properties to extract
aggregates for very long terms, 15 to 30 years is not uncommon
for Memphis Stone and Gravel Company. The companies in our
industry are very concerned that past understandings of what
would be jurisdictional will now be subject to view. A change
in what is considered jurisdictional can have significant
impacts on our material reserves, which will affect the life of
our facilities and delay the start-up of new sites. Ultimately
this change will disrupt the supply of aggregates to our
biggest customers, government agencies; thus affecting highway
programs, airports, and municipal projects.
There is much inefficiency in the current regulatory
system; however, adding vague terms and undefined concepts to
an already complicated program is not the way to fix the
problem. In some cases this rule could have a negative effect
on the environment and safety. Ditches without maintenance can
degrade and lead to increased erosion and sediment problems.
EPA should undertake a full evaluation of the effects this
rule will have on small businesses via a Small Business
Advocacy Review (SBRFA) Panel. The proposed rule will put small
businesses at risk of fines of up to $37,500 per day if a
permit is required and not obtained, which could wipe out a
small business that does not realize a permit is needed for
work far from ``navigable'' water. We agree wholeheartedly with
Chairman Graves that EPA is required to comply with the
Regulatory Flexibility Act and get input from affected small
businesses before proposing a rule. EPA claims this rule is
based on sound science, but the Science Advisory Board, the
group of independent scientists reviewing it, are still not
near completion; in fact they have raised serious questions EPA
has not answered.
EPA's economic analysis of this rule does not accurately
show what businesses like ours will end up paying if this rule
is finalized. It is not even close. One NSSGA member calculated
that to do the additional mitigation of a stream required under
this rule would be more than $100,000; this is just for one
site in our industry. This is more than EPA has estimated the
stream mitigation costs are for entire states in its economic
analysis. For our business, time is money. Any new requirements
lead to a long learning curve for both the regulators and the
regulated. Just getting a jurisdictional determination can take
momths--permits can take years; how much longer will it take to
break ground with so many vague and undefined terms in this
rule?
The proposed rule has no clear line on what is ``in'' and
what is ``out,'' making it very difficult for our industry and
other businesses to plan new projects and make hiring
decisions. If it is determined development of a site will take
too long or cost too much in permitting or mitigation, we won't
move forward. That means a whole host of economic activity in a
community will not occur--all of this in the name of protecting
a ditch or farm pond.
Taken further, a significant cut in aggregates production
could lead to a shortage of construction aggregate, raising the
costs of concrete and hot mix asphalt products for state and
federal road building and repair, and commercial and
residential construction. NSSGA estimates that material prices
could escalate from 80% up to 180%. As material costs increase,
supply becomes limited, which will further reduce growth and
employment opportunities in our industry. Increases in costs of
our materials for public works would be borne by taxpayers, and
delay road repairs and other crucial projects. Given that
infrastructure investment is essential to economic recovery and
growth, any change in the way land use is regulated places
additional burden on the aggregates industry that is
unwarranted and would adversely impact aggregates supply and
vitally important American jobs.
NSSGA appreciates this opportunity to speak on the
devastating effects of a broad expansion of Clean Water Act
jurisdiction on the aggregates industry. Thank you, Mr.
Chairman, and I will be happy to respond to any questions.
Attachments: NSSGA Clean Water Act Expansion
[GRAPHIC] [TIFF OMITTED] T8042.003
[GRAPHIC] [TIFF OMITTED] T8042.004
Testimony of Tom Woods
First Vice Chairman of the Board
National Association of Home Builders
Before the
United States House of Representatives
Small Business Committee
Hearing on ``Will EPA's `Waters of the United States' Rule Drown Small
Businesses''
May 29, 2014
Chairman Graves, Ranking Member Velazquez, members of the
subcommittee, on behalf of the more than 140,000 members of the
National Association of Home Builders (NAHB), I appreciate the
opportunity to testify today. My name is Tom Woods and I am the
president of Woods Custom Homes, a building company based in
Blue Springs, Missouri, and NAHB's 2014 First Vice Chairman of
the Board.
NAHB members are involved in the home building, remodeling,
multifamily construction, land development, property
management, and light commercial construction industries. Our
industry is largely dominated by small businesses, with our
average builder member employing 11 employees. Since the
Association's inception in 1942, NAHB's primary goal has been
to ensure that housing is a national priority and that all
Americans have access to safe, decent and affordable housing,
whether they choose to buy or rent a home.
Recognizing the need for a clean environment and the
benefits that it brings to communities, residents, and
potential home buyers, NAHB members have a vested interest in
preserving and protecting our nation's land and water
resources. Since its inception in 1972, the Clean Water Act
(CWA) has helped to make significant strides in improving the
quality of our water resources and our lives. As environmental
stewards, the nation's home builders construct neighborhoods
and help create thriving communities while maintaining,
protecting, and enhancing our natural resources. Under the CWA,
home builders must often obtain and comply with section 402 and
404 permits to complete their projects. For businesses
navigating federal bureaucracies, what is most important to our
compliance efforts is a regulatory scheme that is consistent,
predictable, timely, and focused on protecting true aquatic
resources. Unfortunately, this is becoming a more elusive goal.
As a leader of my industry, I have a unique understanding
of how the federal government's regulatory process impacts
businesses in the real-world. Additional regulations make it
more difficult for me to provide homes at a price point that is
affordable to working families--a reality that affects both
renters and prospective buyers.
The home building industry would benefit from smarter and
more sensible regulation. According to a study completed by
NAHB, government regulations accounts for up to 25% of the
price of a single-family home. Nearly two-thirds of this impact
is due to regulations that affect the developer of the lot,
with the rest due to regulations that are imposed on the
builder during construction.\1\ The regulatory requirements we
face as builders do not just come from the federal government.
As the former Mayor of Blue Springs, Missouri, I believe a key
component of effective regulation is ensuring that local, state
and federal agencies are cooperating, where possible, to
streamline permitting requirements and are respecting the
appropriate responsibilities of each level of government.
Importantly, more sensible regulation will translate into job
growth in the construction industry.
---------------------------------------------------------------------------
\1\ Survey conducted by Paul Emrath, National Association of Home
Builders, ``How Government Regulation Affects the Price of a New
Home,'' 2011
---------------------------------------------------------------------------
``Waters of the United States'' Proposed Rule:
On April 21, 2014, the Environmental Protection Agency and
U.S. Army Corps of Engineers (``the agencies'') proposed a rule
redefining the scope of waters protected under the CWA. For
years, landowners and regulators alike have been frustrated
with the continued uncertainty over the scope of federal
jurisdiction over ``Waters of the United States.'' By improving
the CWA's implementation, removing redundancy, and further
clarifying jurisdictional authority, the agencies are hoping
they can do an even better job at facilitating compliance while
protecting and improving the aquatic environment.
Unfortunately, the proposed rule falls well short of
providing the clarity and certainty the construction industry
seeks. This rule will increase federal regulatory power over
private property and will lead to increased litigation, permit
requirements, and delays for any business trying to comply.
Equally important, these changes will not significantly improve
water quality because much of the rule improperly encompasses
water features that are already regulated at the state level.
Addressing the Impacts on Small Entities
The agencies completely ignore the impact this proposed
rule will have on small entities. They claim ``...(t)hat fewer
waters will be subject to the CWA under the proposed rule than
are subject to regulation under the existing regulations; this
action will not affect small entities to a greater degree than
the existing regulations.''
This is not accurate. In reality, the proposed rule
establishes broader definitions of existing regulatory
categories, such as tributaries, and regulates new areas that
are not jurisdictional under current regulations, such as
adjacent non-wetlands, riparian areas, floodplains, and other
waters.
The agencies intentionally created overly broad terms so
they have the authority to interpret them as they see fit in
the field, including stepping in where they may think a state
has not gone far enough. These new definitions will include
substantial additions, such as a first time inclusion of
ditches, conveyances and other water features that may flow, if
at all, only after a heavy rainfall. Unless proper mapping is
provided by the agencies it may be impossible for a home
builder to independently identify what is jurisdictional.
In addition, the proposal suggests that ``neighboring''
could include any wet feature within a ``floodplain.'' As I am
sure you are aware, floodplains can extend for miles from
traditional navigable waters, yet the agencies can now claim
that those features, miles away, can be considered neighboring.
This is a far cry from what Congress intended to be covered by
the CWA. For any small business trying to comply with the law,
the last thing it needs is a set of new, vague and convoluted
definitions that only provide another layer of uncertainty.
These definitions will leave home builders in a constant
state of confusion. As a small business owner, this
unpredictability will make it difficult for my business to
comply and grow. The agencies suggest that the rule provides
clarity; however all it does is produce more questions.
Unfortunately, we have to rely on the agencies and costly
consultants for answers.
Regulatory Flexibility Act
These changes have far reaching implications and will alter
the way we conduct business. Recognizing that small businesses
are frequently disproportionately impacted by federal
regulations, Congress enacted, more than 30 years ago, the
Regulatory Flexibility Act (RFA). The agencies are legally
required to assess the true impacts this rule will have on
small businesses under the RFA.
The RFA requires federal agencies to consider the effect of
their actions on small entities, including small businesses,
small non-profit enterprises, and small local governments.\2\
When an agency issues a rulemaking proposal, the RFA requires
the agency to ``prepare and make available for public comment
an initial regulatory flexibility analysis. Such analysis shall
describe the impact of the proposed rule on small entities.''
\3\
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\2\ 5 U.S.C. 601-612.
\3\ 5 U.S.C. 603(a).
The RFA states that an initial regulatory flexibility
analysis (IRFA) shall address the reasons that an agency is
considering the action; the objectives and legal basis of the
rule; the type and number of small entities to which the rule
will apply; the projected reporting, recordkeeping, and other
compliance requirements of the proposed rule; and all federal
rules that may duplicate, overlap, or conflict with the
proposed rule. The agency must also provide a description of
any significant alternatives to the proposed rule which
accomplish the stated objectives of applicable statutes which
minimize any significant economic impact of the proposed rule
on small entities.\4\
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\4\ 5 U.S.C. 603(c).
Section 605 of the RFA allows an agency, in lieu of
preparing an IRFA, to certify that a rule is not expected to
have a significant economic impact on a substantial number of
small entities. If the head of the agency makes such a
certification, the agency must publish the certification in the
Federal Register along with a statement providing the factual
basis for the certification.\5\
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\5\ 5 U.S.C. 605.
While the original Congressional intent and subsequent
additions and enhancements to the RFA are to be lauded, the
reality is that far too often agencies either view compliance
with the Act as little more than a procedural ``check-the-box''
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exercise or they artfully avoid compliance by other means.
In this instance, the agencies have bypassed the safeguards
of the RFA by certifying the proposed rule. NAHB believes that
the agencies should have conducted an IRFA to truly assess the
impact this rule will have on small business entities. A more
thorough analysis of the proposed requirements would have
revealed the disproportionate burdens that this rule places on
small residential home builders. I take issue with the fact
that the agencies have not considered these consequences.
Small Businesses Regulatory Enforcement Fairness Act
Requirements
Under the 1996 amendments to the RFA, known as the Small
Businesses Regulatory Enforcement Fairness Act (SBREFA),\6\ if
the Occupational Safety and Health Administration (OSHA) or
Environmental Protection Agency (EPA) prepares an IRFA, they
must first notify the Chief Counsel for Advocacy of the Small
Business Administration (``Advocacy'') and provide Advocacy
with information on the potential impacts of the proposed
regulation on small entities. Advocacy must then identify
individual representatives of affected small entities for the
purpose of obtaining advice and recommendations about the
potential impacts of the proposed rule. The agency must convene
a review panel made up of representatives from the agency,
Advocacy, and the Office of Management and Budget to review the
materials the agency has prepared, collect advice and
recommendations from the small entity representatives (SERs),
and issue a report of the panel's findings. Following this
process, the agency shall modify the proposed rule, the IRFA,
or the decision on whether an IRFA is required if the panel
report warrants any changes.\7\
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\6\ 5 U.S.C. 609.
\7\ 5 U.S.C. 609(b) (1) through (6).
In the 18 years since the RFA was amended by SBREFA to
include the panel requirement, EPA has convened approximately
43 panels. According to a report issues by the Congressional
Research Service (CRS), EPA issued nearly the same number of
significant regulations during the first Obama
Administration.\8\ It defies belief that so few EPA regulations
have met the threshold under SBREFA and these numbers
illustrate how reluctant some agencies are to comply with the
law.
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\8\ The Congressional Research Service examined 45 regulations it
characterized as satisfying OMB's ``significance'' threshold of $100
million annual effect on the U.S. economy in a report addressing the
rate of issuing regulations during the first Obama Administration.
Regulations: Too Much, Too Little, or On Track?, http://www.fas.org/
sgp/crs/misc/R41561.pdf (last visited Mar. 5, 2013).
It was very surprising to me that the agencies decided to
certify the rule, thereby completely bypassing the RFA process.
The agencies are not interested in hearing from the regulated
community. Their only objective is to move this regulation
closer to the finish line. For a rule of this magnitude, the
small business voice must be heard and the agencies have failed
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to provide that platform.
Ensuring Compliance with Small Entity Feedback Requirements
While section 611 of the RFA provides for judicial review
of some of the act's provisions, it does not permit judicial
review of section 609(b), which contains the panel
requirement.\9\ NAHB believes that the RFA should be amended to
include judicial review of the panel requirement to ensure the
agencies adhere to the law. If the RFA allowed judicial review
of section 609(b), agencies would feel more pressure to comply
by convening a meaningful panel of SERs that can thoughtfully
and substantively advise the agency, as Congress intended.
Knowing that its decision whether to convene a panel could
result in a judicial remand of a regulation presents a strong
incentive to agencies to conduct a panel at the early stages in
rule development. Without a judicial backstop or other
enforcement mechanism, there is no way to compel the agency to
implement a clear congressional directive. When agencies evade
their responsibility to convene review panels, they remove
small business input entirely from the equation.
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\9\ Section 611(a)(1) states: ``For any rule subject to this
chapter, a small entity that is adversely affected or aggrieved by
final agency action is entitled to judicial review of agency compliance
with the requirements of sections 601, 604, 605(b), 608(b), and 610 in
accordance with chapter 7. Agency compliance with sections 607 and
609(a) shall be judicially reviewable in connection with judicial
review of section 604.''
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Acknowledging the True Costs to Small Entities
Not only did the agencies fail to perform the required RFA
analysis to determine the proposal's economic impacts on small
businesses, the agencies' economic analysis of the proposal is
fatally flawed.
The Agencies' Flawed Cost-Benefit Analysis
The Environmental Protection Agency's (EPA Economic
Analysis of Proposed Revised Definition of Waters of the United
States (analysis) fails to provide a reasonable assessment of
costs and benefits as required by Executive Order 12866.
Economist Dr. David Sunding, the Thomas J. Graff Professor at
the University of California-Berkeley's College of Natural
Resources, has identified several major flaws with the
analysis.
According to Dr. Sunding, the analysis relies on a flawed
methodology for estimating the extent of newly jurisdictional
waters and thereby underestimating the incremental wetland
acreage that will be impacted, excludes several important types
of costs, and uses a flawed benefits methodology. In fact, he
stated that ``the errors and omissions in EPA's study are so
severe as to render it virtually meaningless.'' For example,
one of the many problems that he acknowledged was the
unreliable data sample the EPA used in the analysis:
``The analysis uses FY 2009/2010 as the baseline year
to estimate impacts. FY 2009/2010 was a period of
significant contraction in the housing market due to
the financial crisis. Construction spending during
these two fiscal years was 24% below that of the
previous two-year period. In statistical terms, this is
an issue of sample selection, where due to exogenous
events the sample selected for the analysis is not
representative of the overall population. The report
bases its finding on a period of extremely low
construction activity, which will result in
artificially-low number of applications and affected
acreage. Even if the percent increase in added permits
is correct, using the number or permits issued in 2010
as a baseline is very likely a significant
underestimation of the affected acreage in years not
subject to a crisis in the building sector.'' \10\
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\10\ David Sunding, ``Review of 2014 EPA Economic Analysis of
Proposed Revised Definition of Waters of the United States,'' 2014
In addition, EPA's calculation of incremental costs is
deficient. EPA's analysis excludes several important types of
costs, such as costs associated with permitting delays, impact
avoidance and minimization. Also, EPA's analysis of Section 404
costs relies on permitting cost data that are nearly 20 years
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old and are not adjusted for inflation.
Finally, EPA uses a flawed methodology for its calculation
of benefits. EPA's analysis adopts an all or nothing approach
to assessing benefits by assuming that all wetlands affected by
the rule's definitional change would be filled. On the flip
side, they make the assumption that the rule would preserve or
mitigate land if federal jurisdiction is extended by the rule.
These unrealistic assumptions contribute to an inflated
benefits calculation.
It is clear that the EPA should withdraw the economic
analysis and prepare an adequate study of this major change to
the CWA. Yet again, the agencies are painting an inaccurate
picture of how this regulation will impact small businesses.
Costs to the Home Building Industry
Home building is a complex and highly regulated industry.
As costs, regulatory burdens, and delays increase, the small
businesses that make up a majority of the industry must adapt.
This can include paying higher prices for land or purchasing
smaller parcels, redrawing development or house plans, and/or
completing mitigation. All of these adaptations must be
financed by the builder and ultimately arrive in the market as
a combination of higher prices for the consumers and lower
output for the industry. As output declines and jobs are lost,
other sectors that buy from or sell to the construction
industry also contract and lose jobs. Builders and developers,
already crippled by the economic downturn, cannot depend upon
the future home buying public to absorb the multitude of costs
associated with overregulation.
Because compliance costs for regulations are often incurred
prior to home sales, builders and developers have to
essentially finance these additional carrying costs until the
property is sold. Because of the increased price, it may take
longer for the home to be sold. Carrying these additional costs
only adds more risk to an already risky business, yet is one of
the difficult realities that home builders face very day. This
proposed rule only adds to the headwinds that our industry
faces.
Even moderate cost increases can have significant negative
market impacts. This is of particular concern in the affordable
housing sector where relatively small price increases can have
an immediate impact on low to moderate income home buyers. Such
buyers are more susceptible to being priced out of the market.
As the price of the home increases, those who are on the verge
of qualifying for a new home will no longer be able to afford
this purchase. An analysis done by NAHB illustrates the number
of households priced out of the market for a median priced new
home due to a $1,000 price increase. Nationally, this price
difference means that when a median new home price increases
from $225,000 to $226,000, 232,447 households can no longer
afford that home.
The picture becomes more stark when you consider the time
and cost to obtain a CWA section 404 permit. A 2002 study found
that it takes an average of 788 days and $271,596 to obtain an
individual permit and 313 days and $28,915 for a
``streamlined'' nationwide permit. Over $1.7 billion is spent
each year by the private and public sectors obtaining wetlands
permits.\11\ Importantly, these ranges do not take into account
the cost of mitigation, which can be exorbitant. When
considering these excesses, it becomes clear that we need to
fine a necessary balance between protecting our nation's water
resources and allowing citizens to build and develop their
land.
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\11\ David Sunding and David Zilberman, ``The Economics of
Environmental Regulation by Licensing: An Assessment of Recent Changes
to the Wetland Permitting Process,'' 2002
Construction projects rely on efficient, timely, and
consistent permitting procedures and review processes under CWA
programs. Builders and developers are generally ill-equipped to
make their own jurisdictional determinations and must hire
outside consultants to secure necessary permits and approval.
This takes time and money. Delays often lead to greater risks
and higher costs, which many developers would rather avoid
given tight budgets and timeframes. Onerous permitting
liabilities could delay or eventually kill a real estate deal.
If the rule is finalized in its current form, the ability to
sell, build, expand, or retrofit structures or properties will
suffer notable setbacks, including added cost and delays for
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development and investment.
Oftentimes, home builders will be at the mercy of the
agencies. Builders will have to request a jurisdictional
determination from the agencies to ensure they are not
disturbing land near an aggregated water. Consequently, an
increase in the number of jurisdictional determination
requests, across all industries, will result in greater
permitting delays as the agencies are flooded with paperwork.
My business has already been the victim of permitting delay.
For one of my building projects, I was entangled in the Army
Corps permitting process for over two years. These delays will
only increase as the agencies work to extend federal
protections to smaller waters.
In addition, many federal statutes tie their approval/
consultation requirements to those of the CWA, i.e. if one has
to obtain a CWA permit, he/she must also obtain other permits.
If more areas are considered jurisdictional, more CWA permits
will be required. More federal permitting actions will trigger
additional statutory reviews--by agencies other than the
permitting agency--under laws including the Endangered Species
Act, National Historic Preservation Act, and National
Environmental Policy Act. Project proponents do not have a seat
at the table during these additional reviews, nor are
consulting agencies bound by a specific time limit. Lengthened
permitting times will include an increased number of meetings,
formal and informal hearings, and appeals. These federal
consultations are just another layer of red tape that the
federal government has placed on small businesses and it is
doubtful the agencies will be equipped to handle this inflow.
While my industry is complex and multifaceted, it is not
beyond the agencies' ability to adequately study and estimate
realistic costs and burdens resulting from this proposal.
Impacts on State and Local Governments
While many aspects of the CWA are vague, it is clear that
Congress intended to create a partnership between the federal
agencies and state governments to protect our nation's water
resources. Congress states in section 101 of the CWA that
``[f]ederal agencies shall cooperate with state and local
agencies to develop comprehensive solutions to prevent, reduce
and eliminate pollution in concert with programs for managing
water resource.'' Under this notion, there is a point where
federal authority ends and state authority begins. The rule
proposed by the agencies blatantly ignores this history of
partnership and fails to recognize that there are limits on
federal authority.
States have adequately regulated their own waters and
wetlands for years. States take their responsibilities to
protect its natural resources seriously and do not need the
federal government to assert jurisdiction. In fact, every state
has the authority to exceed federal law, so long as there is a
compelling reason. If you looked around the country you would
find that many states are protecting their natural resources
more aggressively than when the CWA was enacted. As a former
Mayor, I am aware of this impact. I have a firsthand
understanding of the lengths that state and local governments
go to in order to protect their waters.
In addition, if this rule is finalized it will slow down
housing production which will have an adverse affect on state
and local economies. Buyers of new homes and investors in
rental properties add to the local tax base through business,
income and real estate taxes, and new residents buy goods and
services in the community. NAHB estimates the first-year
economic impacts of building 100 typical single family homes to
include $28 million in wage and business profits, $11.1 million
in federal, state and local taxes, and 297 jobs. In the
multifamily sector, the impacts of building 100 typical rental
apartments include $10.8 million in wages and business profits,
$4.2 million in federal, state and local taxes and 113 jobs.
Conclusion:
Congress, in crafting the RFA, clearly intended for federal
agencies to carefully consider the proportional impacts of
federal regulations on small businesses.
It is the purpose of this Act to establish as a principle
of regulatory issuance that agencies shall endeavor, consistent
with the objectives of the rule and applicable statutes, to fit
regulatory and informational requirements to the scale of the
businesses, organizations, and governmental jurisdictions
subject to regulations. To achieve this principal, agencies are
required to solicit and consider flexible regulatory proposals
and to explain the rationale for their actions to assure that
such proposals are given serious consideration.
Unfortunately, all too often the EPA has completely skirted
these requirements. They clearly view RFA compliance as an
optional step in the rulemaking process. This proposed rule
will have a significant impact on small businesses nationwide,
an important notion that the agencies choose to ignore. I am at
a loss as to why the agencies refuse to give small businesses a
seat at the table to discuss these impacts. I request that the
agencies start over and develop a more meaningful and balanced
rule that respects the spirit of the RFA.
Thank you again for the opportunity to testify today.
Testimony of William W. Buzbee
Professor of Law
Emory Law School
Atlanta, Georgia 30322
Telephone: 404 727 6507
email: [email protected]
Georgetown University Law Center (starting July 2014)
600 New Jersey Avenue, N.W. Washington, D.C. 20001
email: [email protected]
Before the United States House of Representatives
Committee on Small Business
May 29, 2014
Hearing on United States Environmental Protection Agency and Army Corps
of Engineers ``Waters of the United States'' Proposed Regulations as
Published in the Federal Register on April 21, 2014
My name is William Buzbee. I am a Professor of Law at Emory
University School of Law, where I am director of Emory's
Environmental and Natural Resources Law Program. I am about to
move to Washington where this summer I will be joining the
faculty at the Georgetown University Law Center. I am also a
member-scholar of the not-for-profit regulatory policy think-
tank the Center for Progressive Reform.
I am pleased to accept this Committee's invitation to
testify regarding the new proposed ``waters of the United
States'' regulations published in the Federal Register by the
Army Corps of Engineers (the Army Corps) and the United States
Environmental Protection Agency (EPA) on April 21, 2014. As a
professor asked to testify due to my expertise, not as a
partisan, representative of any organization, I will seek to
provide context leading to these proposed regulations, comment
on the choices made by EPA and the Army Corps, and assess the
legality and logic of the proposed regulations.
My background and past involvement with the ``waters of the
United States'' question:
This is not my first involvement with the question of what
is protected as a ``water of the United States'' under the CWA.
As a result of my work on environmental law and federalism, I
served as co-counsel for an unusual bipartisan amicus brief
filed in United States v. Rapanos, 547 U.S. 715 (2006)
(Rapanos). This brief was filed on behalf of a bipartisan group
of four former Administrators of the United States
Environmental Protection Agency (EPA). Those former US EPA
Administrators included Russell Train, who served under
Presidents Nixon and Ford, Douglas Costle, who served under
President Carter, William Reilly, who served under the first
President Bush, and Carol Browner, who served under President
Clinton. Despite their different party backgrounds and years of
service, all four shared the same views about the importance of
retaining longstanding protections of America's waters. This
bipartisan EPA Administrators' brief was aligned in Rapanos
with George W. Bush Administration's arguments before the
Supreme Court, several dozen states, many local governments,
and an array of environmental groups as well as hunting and
fishing interests. All asked the Supreme Court to uphold
longstanding regulatory and statutory interpretations regarding
what is protected as a ``water of the United States,''
emphasizing the centrality of the ``waters'' determination to
all of the Clean Water Act. After all, although this question
of what are protected ``waters'' is often discussed with a
focus on wetlands and tributaries and especially dredging and
filling restrictions long set by Section 404 of the Clean Water
Act, the ``waters'' issue is the key jurisdictional hook for
virtually all of the Clean Water Act. This includes, among
other things, direct pollution industrial discharges under
Section 402 of the Clean Water Act and its National Pollutant
Discharge Elimination System (NPDES) program, as well as oil
spill and water quality components of the Act.
After the Court's splintered and confusing ruling in
Rapanos, I testified during the summer of 2006 before the
Fisheries, Wildlife, and Water subcommittee of the United
States Senate Committee on Environment and Public Works about
the implications of the Rapanos decision. Shortly thereafter, I
testified at a December 2007 hearing of the Senate Committee on
Environment and Public Works, also discussing the implications
of these cases and regulatory and judicial developments since
Rapanos. I also testified in 2008 at a House hearing held by
the Committee on Transportation and Infrastructure regarding a
proposed bill referred to as the Clean Water Restoration Act.
Earlier in my legal career, I counseled industry,
municipalities and governmental authorities, states and
environmental groups about environmental law, pollution
control, and land use issues under all of the major federal
environmental laws, as well as state and local laws. As a
scholar, I have written extensively about related issues, with
a special focus in recent years on regulatory federalism,
especially environmental laws and their frequent reliance on
overlapping federal, state and local environmental roles. I
have published books with Cornell and Cambridge University
Presses, and Wolters Kluwer/Aspen. My publications have
appeared in Stanford Law Review, Cornell Law Review, NYU Law
Review, Michigan Law Review, University of Pennsylvania Law
Review, and in an array of other journals and books. I have
taught at Emory since 1993, but also visited at Columbia,
Cornell, Georgetown and Illinois Law Schools. As mentioned
above, I will be leaving Emory for Georgetown University Law
Center in a few months.
The purpose and logic of the new ``waters'' proposed
regulations, in brief:
These proposed regulations and a massive accompanying
science report referenced and summarized in the Federal
Register notice are an attempt to reduce uncertainties created
by three Supreme Court decisions bearing on what sorts of
``waters'' can be federally protected under the Clean Water
Act. The two most important recent cases are the Supreme
Court's decisions in Solid Waste Agency of Northern Cook County
v. U.S. Army Corps of Engineers, 531 U.S. 159 (2001) (SWANCC)
and United States v. Rapanos, 547 U.S. 715 (2006) (Rapanos).
Judicial and regulatory treatments of these cases and the
earlier related decision in United States v. Riverside Bayview
Homes, 474 U.S. 121 (1985), have resulted in an increasingly
confused body of law, creating both regulatory uncertainty and
occasionally bold new assertions about reduced protections for
previously jurisdictional ``waters of the United States.''
These cases, and resulting confusion, have increased regulatory
transaction costs for everyone and reduced the protections
afforded to America's waters. The proposed 2014 ``waters''
regulations are a logical and legally well justified means to
bring clarity to the law and, to the extent permissible under
the Supreme Court's recent decisions, restore protections long
provided to America's waters during three decades of bipartisan
agreement about when and why various sorts of waters should be
protected. If finalized, they should greatly reduce legal
uncertainty, regulatory skirmishing, and attendant litigation
resulting from the uncertain intersection of these three
important cases.
I will make five main points in this testimony:
First, I will explain very briefly how the question of what
``waters'' are protected matters not just for wetlands and
tributary protections, but for industrial discharges of
pollution. Furthermore, the various types of waters protected
perform many functions of importance to businesses and
governments at all levels. Business, health, recreational, and
environmental interests are all at stake here. Surely this
Committee will hear from some business interests arguing
against the proposal of the Army Corps and EPA, but business
interests are undoubtedly on both sides of this issue, with
hunting, fishing, boating, recreation, and tourism linked
businesses especially dependent on protection of America's
waters. And because pollution and filling of America's waters
threaten low cost but high value wetlands functions and water
used for agricultural purposes and for drinking water, and also
water quality in drought prone areas, the despoiling or filling
of America's waters would be immensely costly.
Second, I will show how the regulatory choices reflected in
these regulations are responsive to Supreme Court law and also
the views of a majority of the Supreme Court, at least when it
last addressed related questions.
Third, these proposed regulations reveal that EPA and Army
Corps have responded to criticisms of supposed limitless claims
of federal power by retaining and solidifying exemptions.
Fourth, and perhaps most importantly, the regulations link
a massive survey of peer reviewed science of waters' functions
with a tiered and nuanced approach. This approach answers
criticism that the federal government is going too far and
protecting areas of no value relevant to the Clean Water act.
If critics can find flaws in the science or proposed regulatory
categories, they can and should produce their own contrary
support and call for correction in the now ongoing notice and
comment regulatory process.
Lastly, in the initial heated attacks on these proposed
regulations, critics failed to note and credit a major change
that removes the most expansive and least water-linked historic
grounds for federal claims of jurisdiction. For decades,
federal jurisdiction has existed for ``other waters'' of
various sorts merely upon several sorts of showing that the
harming activity or uses of the waters were linked to industry
or commerce. This was, in effect, a commerce-linked sweep up
provision. The new proposed regulations delete these
longstanding grounds for protection, and if finalized would now
link Clean Water Act jurisdiction to what the best peer
reviewed science indicates deserves protection.
Point I: The extent of federally protected waters matters
to far more than just wetlands regulation and explains the
longstanding federal bipartisan consensus
The question of what ``waters'' are federally protected is
not a matter that only concerns allegedly marginal waters that,
as often presented by critics of the longstanding protective
consensus, look more like land or involve the outermost reaches
of wetlands protection. The question of what are protected
``waters of the United States'' concerns the very linchpin of
federal Clean Water Act jurisdiction. It does indeed supply the
hook for Section 404 ``dredge and fill'' coverage, but also
provides the jurisdictional prerequisite for Section 402's
requirements of permits for industrial pollution discharges
under the National Pollution Discharge Elimination System (or
NPDES). It also underpins efforts to protect water quality,
protect drinking water, provide habitat, and buffer against
storm surges and flooding. Furthermore, since the 1970s and
still today on the Supreme Court, the longstanding consensus
has been to protect far more than just waters used in the
literal sense for shipping-linked navigation. The Clean Water
Act has been one of America's great success stories, helping to
restore many of America's rivers from highly polluted
conditions to water that often now is clean enough for fishing,
recreation, and even drinking water. The Act also greatly
reduced the pre-Clean Water Act tendency to see wetlands as
worthless and appropriate for filling. Nevertheless, many parts
of the country still suffer from degraded water quality, and
threats to wetlands and tributaries still arise. Everyone may
share a common interest in protecting water quality and
wetlands' hugely valuable functioning. Nevertheless, the
ability to pollute with impunity or convert for private gain a
tributary or wetland into land for development or other
commercial use can generate private wealth, even if others
downstream are economic losers. Hence, despite a broad
consensus that America's rivers, tributaries and wetlands
should be protected, clashes over particular applications of
the law are a near constant.
Until the 2001 Supreme Court SWANCC case, the law and
underlying regulations reflected a stable bipartisan consensus
of almost thirty years that protection of America's waters
through stable Part 328 regulations was good policy. However,
SWANCC and the 2006 Rapanos case unsettled that longstanding
bipartisan consensus, breeding legal uncertainty that the new
Army Corps and EPA regulations seek to address. As suggested by
a majority of Supreme Court justices in Rapanos, new
regulations responding to these two cases and linking what are
protected ``waters'' to sound science could reduce such
uncertainty, both protecting waters that matter and reducing
regulatory uncertainty that benefits no one.
Point II: The new proposed ``waters of the United States''
regulations are an appropriate response to the Supreme Court's
recent cases:
Although both SWANCC and Rapanos unsettled the longstanding
protective and bipartisan consensus about what ``waters'' were
federally protected, both cases created considerable legal
uncertainty that has led now to over a decade of disagreement
and skirmishing before Congress, agencies, and the courts.
However, a six justice majority in Rapanos embraced the role of
expert regulation to clarify the appropriate line between land
and water. This included Chief Justice Roberts, who bemoaned
the lack of responsive clarifying regulations post-SWANCC, and
Justice Kennedy, who penned a swing vote opinion that is widely
viewed as the most authoritative Rapanos opinion. Justice
Kennedy fleshed out how a ``significant nexus'' needs to be
shown to federally protect some waters whose linkages to
navigable waters and functioning makes them of possibly
marginal importance; ``alone or in combination,'' the
relationship with navigable waters much be more than
``speculative or insubstantial.'' Rapanos, 547 U.S. at 780.
Justice Kennedy explicitly recognized that many questions about
what sorts of waters deserve protection could be addressed via
categories set forth by regulation, although he also appeared
to call for case-by-case determinations in other settings. The
four dissenters, all of whom joined an opinion by Justice
Stevens, would have affirmed the regulators' judgments attacked
in Rapanos; they emphasized the importance of judicial
deference to expert regulatory judgments about what waters
should be protected. Thus, along with Chief Justice Roberts and
Justice Kennedy, six justices embraced an ongoing role for
regulation to bring clarity to the law. In addition, an earlier
unanimous Supreme Court in Riverside Bayview Homes embraced
deference to regulatory judgments about where to draw the line
between land and water. There undoubtedly remains legitimate
room for regulations to bring greater clarity to this body of
law.
The proposed regulations at issue in today's hearing
respond directly and reasonably to these Supreme Court calls.
They protect some waters by category, basing that judgment on a
comprehensive review of peer reviewed science about the
linkages, value and functions of such categories of waters.
Some other types of waters are identified as possibly falling
under federal jurisdiction, but the jurisdictional
determination has to follow a water site-specific review to see
if a ``significant nexus'' exists adequate to justify federal
protection. Furthermore, the proposed regulations offer
additional guidance about what ``significant nexus'' analysis
should consider, building on Justice Kennedy's Rapanos language
and providing additional guidance for what regulators and those
seeking a jurisdictional determination should consider.
Hence, by protecting some waters by category and others on
a case-by-case basis if satisfying ``significant nexus''
analysis, and in all instances hinging such regulatory
judgments to a comprehensive survey of peer reviewed science,
the Army Corps and EPA have respected Supreme Court edicts and
signals. Furthermore, these proposed regulations also show
fealty to the Clean Water Act's explicit goal of protecting the
``chemical, physical, and biological integrity'' of America's
waters by reducing pollution discharges and requiring permits
before discharging any pollutants into such waters, whether in
the form of industrial pollution or fill.
Point III: The proposed regulations make explicit several
categories of activities or waters not subject to federal
jurisdiction
A persistent refrain in recent years and regarding the
proposed regulations under discussion today is that the
jurisdiction being claimed borders on the limitless. This is
most evidently erroneous in the proposal's creation of both
categorically protected waters and others that must be assessed
on a case-by-case basis. However, the proposed regulations go
further, in new Section 328.3(b) making explicit that several
types of otherwise potentially debatable waters are not
``waters of the United States.'' These include (with additional
more precise language): waste treatment systems; prior
converted cropland; several sorts of ditches that are upland or
do not contribute flow to otherwise regulated waters; and
several types of ``features'' such as artificially irrigated
areas that would revert to upland without irrigation water,
artificial lakes, ponds, pools and ornamental waters,
construction-linked water-filled depressions, groundwater, and
gullies, rills and non-wetland swales. Several of these
exemptions appear to be in direct answer to criticisms in court
briefs and congressional testimony that federal jurisdiction
has bordered on the limitless.
Point IV: The proposed regulations' link to a massive
survey of peer-reviewed science about waters' connectivity,
values and function answers responds to the most prevalent
criticism of ``waters'' federal jurisdiction and puts all on
notice
Over the past decade, a common claim of critics of federal
jurisdiction has been that waters--or sometimes lands--can and
are claimed to be protected for no reason relevant to the Clean
Water Act's purposes. And on this issue and in other battles
over regulation, critics have called for ``sound science'' and
``peer reviewed'' science to underpin regulatory judgments. The
Army Corps and EPA have taken this to heart, for the first time
pulling together a massive survey of peer reviewed publications
about the connectivity, values, and functions of various types
of waters. This report is, I believe, under review by the
Science Advisory Board, and also has been made public for
review and comment. In addition, the Corps and EPA in their
proposed regulation's Federal Register notice explain how they
interpret this report and the science in deciding what types of
waters are categorically protected, subject case-by-case to
``significant nexus'' analysis, or not protected.
I am unclear what action, if any, this Committee might
choose to take about these proposed regulations, but this
pending notice and comment process and public vetting of the
accompanying science report are providing a value open,
transparent, and judicially challengeable process. If critics
can point to flaws and identify better peer reviewed published
science, they now have such an opportunity.
Point V: The Army Corps and EPA in the proposed regulations
have deleted the longstanding ``other waters'' commerce-linked
sweep-up provision, thereby linking protections to science and
limiting federal power
In the proposed regulations, a longstanding additional
grounds for federal jurisdiction has been deleted. This
provision, the former Section 328.3(3) ``other waters''
paragraphs, provided federal jurisdiction to protect over a
dozen sorts of waters upon a showing that their ``use,
degradation or destruction . . . could affect interstate or
foreign commerce'' or be used by ``interstate or foreign
travelers'' for ``recreational or other purposes,'' for
fishing-linked commerce, or for ``industrial purposes by
industries in interstate commerce.'' This provision basically
identified types of waters but made them protectable based on
their commerce-linked uses or values. This regulation was
consistent with longstanding understandings of the 1972 Clean
Water Act amendments and the congressionally intended reach of
federal power. However, both the SWANCC and Rapanos decisions
raised questions about whether Clean Water Act jurisdiction
could focus on a water's commercial or industrial uses or the
impacts of a water's degradation without regard to the water's
functions or links to navigable waters.
I will not here opine on whether this section's deletion
was legally necessary or prudent. I will, however, note that
the Corps and EPA have decided to answer critics and eliminate
uncertainty by deleting this section in favor of now linking
all jurisdictional ``waters of the United States''
determinations to what the science shows. Since most pollution
and filling activity is undoubtedly commercial and industrial
in nature, and little today is not linked to interstate
commerce, this regulatory deletion is a potentially significant
concession. Again, the proposed regulations choose to link
regulation to peer reviewed science and cut back on the
broadest possible grounds for jurisdiction.
Conclusion
The legal uncertainty of recent years has benefitted no
one. For those concerned about protection of America's waters,
regulatory uncertainty has led to regulatory forbearance and
some problematic or erroneous regulatory and judicial decisions
leaving important waters unprotected. For those needing to make
business decisions, regulatory uncertainty has also raised
costs. By linking the ``waters of the United States'' question
to peer reviewed science and clarifying which waters are
subject to categorical or case-by-case protection and revealing
the reasons for such judgments, the Corps and EPA have moved
the law in the direction of certainty and clarity. Undoubtedly
some will not like where they have chosen to draw their lines,
but this is an area calling for difficult, expert regulatory
judgments. There was a reason for the thirty years of
bipartisan consensus in favor of broadly protecting America's
waters. These proposed regulations, if finalized in a similar
form, could perhaps once again bring clarity and stability to
the law, while also respecting the protective mandates of the
Clean Water Act.
Submitted Testimony of the American Public Gas Association to the House
Small Business Committee Hearing, ``Environmental Protection Agency
(EPA) and the U.S. Army Corps of Engineers (Corps) proposed rule
defining the scope of waters protected under the Clean Water Act''
A Consumer Perspective
On behalf of the American Public Gas Association (APGA), we
appreciate this opportunity to submit testimony on the
Environmental Protection Agency (EPA) and the U.S. Army Corps
of Engineers (Corps) proposed rule defining the scope of waters
protected under the Clean Water Act (CWA) (Docket ID No. EPA-
HQ-OW-2011-0880)
APGA is the national association for publicly owned natural
gas distribution systems. There are approximately 1,000 public
gas systems in 37 states, and over 700 of these systems are
APGA members. Publicly-owned gas systems are not-for-profit,
retail distribution entities owned by, and accountable to, the
citizens they serve. They include municipal gas distribution
systems, public utility districts, county districts, and other
public agencies that own and operate natural gas distribution
facilities in their communities. Public gas systems' primary
focus is on providing safe, reliable, and affordable service to
their customers.
At the most basic level, APGA represents the views of
American natural gas consumers. Our members serve homeowners
and small businesses, which rely on affordable natural gas to
heat their homes, cook their meals, power their restaurants,
schools and hospitals, and service businesses of all types.
On March 25, 2014, the EPA and Corps (hereafter
collectively, the Agencies) published a Notice of Proposed
Rulemaking (NOPR) to clarify the scope of CWA regulation over
America's streams and wetlands. APGA acknowledges that the CWA
is fairly characterized as ``watershed'' legislation that is
responsible for addressing successfully pollution in the waters
of the United States,\1\ and applauds the Agencies for their
work in that area. Our concern is that this proposed rule,
while arguably well-intentioned, has been inadequately studied
and, by appearing to broaden the Agencies' reach under the CWA,
will increase, rather than diminish, regulatory uncertainty, to
the detriment of APGA's members' operations. Of course, at the
end of the day, if the NOPR is adopted as a final rule, its
validity will be determined by the judicial system, unless
Congress intervenes to make clear that it did not intend for
the scope of CWA to reach to the limits to which the Agencies
now want to take it.
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\1\ Solid Waste Agency of Northern Cook County v. U.S. Corps of
Engineers, 531 U.S. 169, 175 (2001) (dissent) (``SWANCC'').
APGA's stake in this debate is that the effort of the
Agencies to extend their CWA jurisdiction, if implemented,
would raise safety concerns as related to the ongoing operation
and maintenance of natural gas distribution systems and inflict
an unnecessary and unwarranted financial burden on APGA's
members and their customers.\2\ In other words, the extension
of federal jurisdiction to matters heretofore considered to be
within the parameters of the States frequently has unintended
consequences, and this is no exception. In addition, the
downsides of enhanced jurisdictional reach are greatly
heightened, if not accompanied by, sufficient increased funding
to ensure timely action by the Agencies as it relates to CWA
matters over which they exercise jurisdiction.
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\2\ The time and cost burden of the federal permitting process was
noted in Rapanos, 547 U.S. at 721.
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Prejudges the Science
There are certain aspects of the NOPR that APGA finds very
troubling from the standpoint of fundamental administrative law
principles. The need to broaden the scope under the proposed
rule is based on EPA's draft scientific study on the
connectivity of waters ``Connectivity of Streams and Wetlands
to Downstream Waters: A Review and Synthesis of the Scientific
Evidence.'' The EPA's Science Advisory Board panel is still in
the process of peer-reviewing the draft connectivity report. At
its December 2013 meeting, the panel identified significant
deficiencies with the report. In addition, the Agencies base
their analysis of ``significant nexus''--a key phrase in the
judicial history of the reach of CWA jurisdiction \3\--on a
yet-to-be finished literature review which fails to examine
what connections are ``significant.'' The final report will be
released during the comment period, which will not allow the
affected parties adequate time to review and comment. Moreover,
it does not appear that the Agencies intend to give the public
an opportunity to review the final connectivity report as part
of the WOTUS rulemaking. There are numerous places throughout
the preamble to the proposed rule wherein the Agencies have
asked the public to provide specific information regarding the
proposed rule's scientific justifications. The purpose of the
Science Advisory Board (SAB) review of the draft connectivity
study was to evaluate the ``evolving scientific literature on
connectivity of waters,'' and the public deserves the
opportunity to comment on the conclusions of that review
process.
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\3\ E.g., SWANCC, 531 U.S. at 167-68.
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Expanding the Scope
The EPA and the Corps both assert that the scope of CWA
jurisdiction is narrower under the proposed rule than under
existing regulations, and that the proposed rule does not
extend jurisdiction over any new types of waters. However,
under the manner in which the proposed rule is constructed,
there is essentially no limit to CWA federal jurisdiction. The
proposed rule establishes broader definitions of existing
regulatory categories, such as tributaries, and regulates new
areas that are not jurisdictional under current regulations,
such as adjacent non-wetlands. The Congressional Research
Service found that the proposed rule expands the agencies'
authority by proposing new definitions such as ``tributary''
and new categories of waters such as ``adjacent waters.''
Authority will be expanded over many new isolated waters
through its ``significant nexus'' definition, which relies on a
yet-to-be completed ``Connectivity of Streams and Wetlands to
Downstream Waters'' report that fails to address the
``significance'' of such connections.
Impacts on APGA Members
Due to the expansiveness of the proposed rule, the
potential impact on public gas systems would be significant.
The proposed rule increases the number of water features that
would be subjected to federal permitting standards. These water
features have been traditionally regulated at the local level.
This system of shared responsibility, consistent with basic
principles of federalism,\4\ has resulted in effective
environmental protection without imposing unnecessary federal
controls (or expanding federal dollars) where they are not
needed. APGA believes that the Agencies should focus on
maintaining a proper balance between Federal and State
oversight of non-navigable waters wholly within State
boundaries that do not affect interstate commerce.
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\4\ The CWA recognizes the ``primary responsibilities and rights of
States to prevent, reduce and eliminate pollution,...'' Rapanos at 722-
23.
In 2013 the Chambersburg municipal gas system in
Chambersburg, PA had to cross the Conococheague Creek with a
gas main. To minimize impact to the creek, it directionally
bored six feet under the stream bed. Notwithstanding taking
such steps to avoid any impact to the creek, Chambersburg was
required to complete a CWA Section 404 stream crossing permit,
which took seven months to obtain (and could have taken much
longer). What this illustrates is that permitting on CWA waters
is slow now, and if the Agencies are successful in extending
their jurisdictional reach, acquiring such permits will be even
slower and more widespread in the future. This will be
especially so, if as appears to be the case, the Agencies are
not seeking any, much less adequate, additional funding to
support their widened authority. Bottom line, this will make
operating safe and efficient natural gas distribution systems
more difficult and more expensive, without any offsetting
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benefit.
With the potential increase in the number of geographical
features that would have to undergo a review and likely
additional permitting. APGA's members are concerned with the
impact the increased workload would have on the Agencies with
respect to both the quickness of the review process and the
quality of the review. Due to the nature of our business,
timely review and issuance of permits are not only critical to
maintain safety, but are also critical for maintaining a
reliable and resilient system.
APGA's members spend a significant amount of time and
resources replacing and servicing their systems, such as
updating cast iron gas mains and older steel gas mains and
services. This work is for the safety of their residents, as
well as to satisfy Federal and State regulations whose goal is
public safety. They regularly cross ditches and dry creek beds
and properties in flood plains and/or properties that may drain
into storm water ditches. Delaying pipe replacements for months
or years would negatively impact the safety of natural gas
system consumers, with any offsetting benefits to the
environment being either negligible or non-existent.
Adversely Affects Jobs and Economic Growth:
The Agencies state that the proposed rule will benefit
businesses by increasing efficiency in determining coverage of
the CWA. The reality, APGA believes, is that the proposed rule
will subject far more activities to both federal and state CWA
permitting requirements, NEPA analyses, mitigation
requirements, and citizen lawsuits challenging the applications
of new terms and provisions. The impact will be felt by our
members and our member's customers, especially small businesses
that are likely to be least able to absorb the costs. The
potential adverse effect on economic activity and job creation
in many sectors of the economy has been largely dismissed by
the Agencies and certainly is not reflected in EPA's flawed
economic analysis for the proposed rule. [CITES] Neither do the
Agencies adequately address the effect on state and federal
resources for permitting, oversight, and enforcement.
The Economic Analysis suggests that the proposed rule will
increase overall jurisdiction under the CWA by only 2.7 percent
federalism.\5\ But the EPA arrives at this percentage using a
flawed methodology that only accounts for the Section 404
program, relies on figures extrapolated from statistics from
2009-2010, and fails to consider waters and features that were
not historically subjected to the CWA permitting process.
Relying on these outdated data, the Agencies systematically and
substantially underestimate the impact of the proposed rule's
new definition.
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\5\ EPA and the Corps of Engineers prepared economic analysis
``Economic Analysis of Proposed Revised Definition of Waters of the
United States.''
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Conclusion
APGA has the utmost respect for the CWA and the Agencies'
actions thereunder to clean our nation's waters. We are
expressing our reservations about the NOPR because of our
concerns regarding regulatory uncertainty and the adverse
impacts of such uncertainty as it relates to the hundreds of
communities in this country that will be adversely impacted by
expanding the scope of the CWA beyond what we believe Congress
intended or the courts have sanctioned. Neither agency has
outlined a clear path to implementing this rule so as to
prevent unnecessary permit backlog on an already overtaxed
review staff. The unintended consequences of such expanded
jurisdiction will make operating a safe and efficient local
natural gas distribution system less likely and more expensive,
to the detriment of the millions of consumers served by such
systems. For these reasons, we urge Congress to look very
carefully at the NOPR that is the subject of this hearing.
APGA appreciates the opportunity to submit testimony before
the House Committee on Small Business on this critical natural
gas and public interest issue. We stand ready to work with the
Committee on these and all other natural gas issues.
ARTBA - AMERICAN ROAD & TRANSPORTATION BUILDERS ASSOCIATION
Will EPA's `Waters of the United States' Rule Drown Small Businesses?
Statement of the
American Road and Transportation Builders
Association
Submitted to the
United States House of Representatives
Committee on Small Business
May 29, 2014
On behalf of the American Road and Transportation Builders
Association (ARTBA) and its more than 6,000 member firms and
public agencies nationwide, the association would like to thank
Chairman Graves and Ranking Member Velazquez for holding
today's hearing, ``Will EPA's `Waters of the United States'
Rule Drown Small Businesses?''
ARTBA's membership includes public agencies and private
firms and organizations that own, plan, design, supply and
construct transportation projects throughout the country.
ARTBA's largest membership division is our contractors
division--a significant number of which are small businesses.
Transportation construction is directly tied to the
economic health and development of this country. According to
Federal Highway Administration data, every $1 billion spent on
highway and bridge improvements supports almost 28,000 jobs,
many of which are in small businesses. Given these broad direct
and indirect economic contributions, the impact on
transportation development should be taken into account when
analyzing new federal regulations.
ARTBA members are directly involved with the federal
wetlands permitting program and undertake a variety of
construction-related activities under the Clean Water Act
(CWA). ARTBA actively works to combine the complementary
interests of improving our nation's transportation
infrastructure with protecting essential water resources.
One of the main reasons for the success of the CWA is the
Act's clear recognition of a partnership between the federal
and state levels of government in the area of protecting water
resources. The lines of federal and state responsibility are
set forth in Section 101(b) of the CWA:
``It is the policy of Congress to recognize,
preserve, and protect the primary responsibilities of
States to prevent, reduce, and eliminate pollution, to
plan the development and use (including restoration,
preservation and enhancement) of land and water
resources...'' \1\
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\1\ CWA Sec. 101(b).
This structure of shared responsibility between federal and
state governments allows states the essential flexibility they
need to protect truly ecologically important and
environmentally sensitive areas within their borders while, at
the same time, making necessary improvements to their
transportation infrastructure. The success of the federal-state
partnership is backed by dramatic results. Prior to the
inception of the CWA, from the 1950s to the 1970s, an average
of 458,000 acres of wetlands were lost each year. Subsequent to
the CWA's passage, from 1986-1997, the loss rate declined to
58,600 acres per year and between 1998-2004 overall wetland
areas increased at a rate of 32,000 acres per year.\2\
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\2\ Draft 2007 Report on the Environment: Science, USEPA, May 2007,
available at http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=140917
ARTBA supports the reasonable protection of environmentally
sensitive wetlands with policies balancing preservation,
economic realities, and public mobility requirements. Much of
the current debate over federal jurisdiction, however, involves
overly broad and ambiguous definitions of ``wetlands.'' Many
states define wetlands as well other types of water resources
and prescribe regulatory regimes that are appropriate to each
body of water. However, the federal government often uses a
one-size fits all approach essentially requiring water
resources viewed by states as not being wetlands to be
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regulated as if they were wetlands under federal law.
In its recently proposed rule regarding federal
jurisdiction under the CWA, the U.S. Environmental Protection
Agency (EPA) seeks to expand federal jurisdiction by stating,
essentially, that all waters in the U.S. are ``connected,'' and
therefore subject to federal regulation. Such a view of federal
jurisdiction will increase the amount of instances in which
permits would be required--regardless of ecological value or
demonstrated need--for transportation improvements. While the
benefit of additional wetlands permits in the transportation
arena are in doubt, it is clear the new requirements would
contribute to already lengthy delays in the project review and
approval process. Further, in instances where the federal
government declines to require a permit, the door would still
be left open to unnecessary, time-consuming litigation
initiated by project opponents.
Over-inclusive views as to what constitutes a wetland are
frequently used by anti-growth groups to stop desperately
needed transportation improvements. For this reason, ARTBA has,
and continues to, work towards a definition of ``wetlands''
that would be easily recognizable to both landowners and
transportation planners and is consistent with the original
scope of the CWA's jurisdiction. As an example of this,
official ARTBA policy recommends defining a ``wetland'' as
follows: ``If a land area is saturated with water at the
surface during the normal growing season, has hydric soil and
supports aquatic-type vegetation, it is a functioning
wetland.''
ARTBA is particularly concerned with the treatment of
ditches under EPA's proposed rule. Roadside ditches are an
essential part of the nation's transportation network and
contribute to the public health and safety of the nation by
dispersing water from roadways. While current regulations say
nothing about ditches, EPA's expansive view of connectivity
could be used to regulate all roadside ditches that have common
characteristics, such as a channel or an ordinary high water
mark. The purpose of roadside ditches is unique and distinct
from the waters EPA seeks to connect. As such, ditches should
not be regulated as traditional wetlands.
In addition, the EPA proposal utilizes the concept of
allowing for ``aggregation'' of the contributions of all
similar waters ``within an entire watershed,'' making it far
easier to establish a significant nexus between these small
intrastate waters and newly expanded roster of traditional
navigable waters. This novel concept results in a blanket
jurisdictional determination for an entire class of waters
within an entire watershed.
Such an interpretation of jurisdiction will literally leave
no transportation project untouched from federal wetlands
jurisdiction regardless of its location, as there is no area in
the United States not linked to at least one watershed.
Further, ``connecting'' all waters in order to establish
federal jurisdiction is exactly what the Supreme Court has, on
multiple occasions, told the EPA it cannot do. Rather, EPA may
assert jurisdiction over only those water bodies with a
``significant'' connection to a traditionally navigable water.
Instead of attempting to discern where there are truly
``significant'' connections between water bodies, EPA
``connects'' all of the waters of the United States and asserts
essentially limitless jurisdiction. This completely eviscerates
the federal/state partnership the CWA was founded on and leaves
no wet area untouched by the possibility of federal regulation.
It should also be noted that there has been recent
bipartisan progress in the area of streamlining the project
review and approval process for transportation projects.
Members of both parties agree that transportation improvements
can be built more quickly without sacrificing necessary
environmental protections. The current surface transportation
reauthorization law, the ``Moving Ahead for Progress in the
21st Century'' (MAP-21) Act contained significant reforms to
the project delivery process aimed at reducing delay. Recently,
the Obama Administration released the ``Generating Renewal,
Opportunity, and Work with Accelerated Mobility, Efficiency,
and Rebuilding of Infrastructure and Communities throughout
America'' (GROW AMERICA) reauthorization proposal which
continues MAP-21's efforts at improving project delivery.
If EPA's rule is finalized, the progress of MAP-21 and the
potential progress of the project delivery reforms in GROW
AMERICA would be jeopardized. Any reduction in delay gained
from improvements to the project delivery process would likely
be negated by the increased permitting requirements and
opportunities for litigation caused by the rule's expansion of
federal jurisdiction.
ARTBA instead, has urged EPA on multiple occasions to
establish clarity in CWA regulation by developing a
classification system for wetlands based on their ecological
value. This would allow increased protection for the most
valuable wetlands while also creating flexibility for projects
impacting wetlands that are considered to have little or no
value. Also, there should be a ``de minimis'' level of impacts
defined which would not require any permitting process to
encompass instances where impacts to wetlands are so minor that
they do not have any ecological effect. A ``de-minimis''
standard for impacts would be particularly helpful for
transportation projects, as it could reduce needless paperwork,
delay and regulatory requirements where a project's impacts do
not rise to the level of having a significant effect on the
environment.
This committee should also note that there have been
multiple legislative attempts in recent years to expand the
jurisdiction of the CWA to include all ``waters of the United
States.'' Each of these efforts have met with broad bipartisan
opposition and none have resulted in new law or even a
successful committee mark-up. It is clear that consensus among
policymakers and affected stakeholders has not yet been reached
regarding appropriate federal wetlands jurisdiction. This
committee should direct EPA to take note of these developments
and instead of seeking to ``connect'' all waters, work with the
regulated community to identify those specific types of water
bodies which are currently not being covered and craft more
appropriate, targeted measures to protect them.
Finally, ARTBA is disheartened that EPA's proposed rule was
published prior to the conclusion of efforts by the agency's
own Science Advisory Board (SAB) to determine what constitutes
a ``significant'' connection between water bodies. As ARTBA
understood the process, the SAB's work should have been
finalized before any regulatory efforts began. Given that EPA's
rule has already been released, ARTBA is highly skeptical that
any findings by the SAB will change a rule that has already
been drafted. EPA should suspend its rulemaking efforts and
start anew after the SAB findings have been finalized, allowing
all members of the regulated community to have proper input
into this conversation about where CWA jurisdiction begins and
ends.
ARTBA looks forward to continuing to work with the
committee in order to continue continuing to protect the small
businesses which improve and sustain our nation's
infrastructure while addressing the future challenges of the
CWA.
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The National Federation of Independent Business (NFIB)
appreciates the opportunity to submit this statement for the
record to the Committee on Small Business for the hearing
entitled ``Will EPA's `Waters of the United States' Rule Drown
Small Businesses?'' NFIB is the nation's leading small business
advocacy organization representing over 350,000 small business
owners across the country, and we appreciate the opportunity to
provide our perspective on this issue. NFIB represents small
businesses in every region and every industry in the country.
Accordingly, NFIB has a unique insight into the concerns of the
small business community, and can speak with authority on these
concerns.
NFIB applauds the Committee for having this hearing today.
We note at the outset that the proposed rule to define ``waters
of the United States'' under the Clean Water Act (CWA) was
jointly submitted, by the Environmental Protection Agency and
the U.S. Army Corps of Engineers (the Agencies), for
publication in the Federal Register on April 21, 2014. In that
publication, the Agencies certified that the proposed rule will
not have a significant adverse impact on the small business
community. But as explained in this statement, this
certification is patently false. Moreover, it is contravened by
the Agencies' administrative rulemaking record.
Contrary to the Agencies' assertions, the proposed rule
will have a tremendous, direct, and immediate effect on many
small businesses across all sectors of the economy. NFIB is
concerned that the proposed rule represents an unprecedented
jurisdictional land-grab, which will affect the rights of
private landowners--including many small businesses. As such,
NFIB believes that the Agencies have, thus far, ignored their
statutory obligations--under the Regulatory Flexibility Act
(RFA) and the Small Business Regulatory Enforcement Fairness
Act (SBREFA)--requiring the Agencies to seriously consider the
economic impact of the proposed rule on the small business
community.
The Agencies Have Failed to Comply with the Regulatory
Flexibility Act
NFIB believes the Agencies have failed to meet their
statutory obligations under the RFA and SBREFA. Accordingly,
NFIB believes the Agencies should (1) acknowledge that the
proposed rule will have a significant adverse impact on a
substantial number of small businesses; (2) withdraw the
proposed rule; and (3) wait to propose a new rule until the
Agencies have considered less burdensome alternative
interpretations of the pertinent CWA jurisdictional provisions.
As such, we applaud the Committee for its recent letter asking
the Agencies to withdraw the proposed rule on these grounds.
The RFA and SBREFA Require the Agencies to Seriously
Consider Economic Impacts
The RFA and SBREFA were enacted to address an unfortunate
reality: regulations usually impose disproportionate costs on
small businesses. Accordingly, the RFA and SBREFA require that
federal agencies must seriously consider whether a proposed
regulation will have a significant adverse impact on a
substantial number of small businesses before finalizing the
rule. If an agency should determine that there will likely be
significant adverse impacts, the agency is then required to
consider less burdensome alternatives consistent with the
language of the statute the agency has been charged with
enforcing. Alternatively the agency might certify that there
will be no significant adverse impact on the small business
community, and forgo any further analysis.
Unfortunately, we note that federal agencies are all too
quick to certify that regulatory proposals will not impact
small business, or that the impacts will not be significant.
This is a serious problem and unfortunately courts typically
rubberstamp these certifications so long as they are not
``arbitrary or capricious.'' This is an extraordinary low bar
for the certifying agency may explain why federal agencies all
too often include conclusive language--with little or no
analysis--certifying that proposed rules will not have
significant adverse impacts.
For this reason, NFIB submits that Congress should consider
measures to put more teeth in the RFA and SBREFA. We note that
the House of Representatives has already passed the Regulatory
Flexibility Improvements Act (H.R. 2542). We believe the
provisions in this legislation would have presented the
Agencies from ignoring their requirements under the RFA.
In any event, NFIB maintains that the current forms of the
RFA and SBREFA should be understood as imposing an affirmative
requirement to seriously consider the economic impact of the
proposed regulation. Unfortunately, the Agencies appear to have
given short-shrift to this requirement in the present case. In
this instance, the Agencies have proposed a rule that will have
clear significant economic impacts on many small businesses
throughout the country, but the Agencies have certified that
there will be no adverse impact. The Agencies base this
certification on the errant assertion that the proposed rule
will actually narrow the CWA's jurisdiction--an assertion that
is plainly contradicted by the record.
The proposed regulations will plainly expand the CWA's
jurisdictional reach as a matter of law. And as a matter of
fact, the Agencies acknowledge elsewhere in the record that the
proposed regulation will result in at least a three percent
increase in jurisdictional wetlands. NFIB believes the three
percent estimate is far too conservative; however, in any
event, it patently contradicts the Agencies' RFA certification
that the rule will not hurt small business.
The proposed rule will have direct adverse impacts on many
small businesses
The Agencies are pursuing a significant expansion of
federal CWA jurisdiction, which will necessarily exert more
government control over private properties--including many
owned by small businesses. As a result, the proposed rule will
have severe practical and financial implications for many. This
is because a business owner cannot make economically beneficial
uses of his or her land once it is considered a jurisdictional
wetland. And if an owner proceeds with a project on a portion
of land that might be considered a wetland, the owner faces the
prospect of devastating fines--up to $37,500 per day.
Consequently, most landowners--especially small
businesses--will be forced into keeping their properties
undeveloped. If the purported jurisdictional wetland covers the
entire property, the owner may well be dined the opportunity to
make any productive or economically beneficial use of the
property. In some cases, it may be possible for the owner to
obtain a permit to allow for development; however, there is no
guarantee a permit will be issued. Moreover, for small business
owners and individuals of modest means, such a permit is
usually cost prohibitive. Indeed, the Supreme Court noted, in
Rapanos v. United States, that the average CWA permit costs
more than $270,000.
While multinational corporations with tremendous capital
resources might be able to afford such costs, most small
businesses are without recourse. Usually, their only option is
to swallow their losses and forgo any development plans.
Unfortunately, these small businesses suffer greatly because
they have usually tied up much of their assets into their real
estate investments and can neither afford necessary permits,
nor legal representation to challenge improper jurisdictional
assertions--lawsuits challenge these assertions are fact
intensive and extremely costly to litigate.
The proposed rule will also have indirect adverse impacts
on many small businesses
Even in the absence of an affirmative assertion of CWA
jurisdiction, landowners will be more hesitant to engage in
development projects or to make other economically beneficial
uses of their properties if the proposed rule is approved.
Landowners are already aware that federal agencies have taken
an aggressive posture in making jurisdictional assertions in
recent years. And now that the Agencies have proposed this
rule, it is apparent that they are taking an even more
aggressive approach to jurisdictional issues--a signal that
landowners can expect greater enforcement actions in the
future.
NFIB already receives questions and concerns from small
business owners who are worried about whether the Agencies have
jurisdiction over their properties. And we expect to hear from
many more concerned individuals if the proposed rule is
finalized. Indeed, under the proposed rule a landowner may have
legitimate cause for concern if--at any point during the year--
any amount of water rests or flows over a property.
And contrary to the Agencies' assertions, the proposed rule
will do little or nothing to make CWA jurisdiction clearer for
most properties. The reality is that landowners will have to
seek out experts and legal counsel--which gets costly quickly--
before developing on any segment of land that occasionally has
water overflow. And, the only way to have definitive clarity is
to seek a formal jurisdictional determination from the
Agencies, which costs more money and further delays development
plans.
Of course, in the absence of a formal jurisdictional
assessment, property owners proceed at their own risk if they
wish to use portions of their property that might be viewed as
jurisdictional. Indeed, they face ruinous fines of up to
$37,500 per day if they errantly begin filling in--or
dredging--land that the Agencies believe is a jurisdictional
wetland. And for this reason any property that might be viewed
as containing a jurisdictional wetland will be greatly
devalued. In addition, even if the property owner is found to
be in the right, he or she may use all their assets fighting to
prove this fact.
The Proposed Regulation Radically Expands CWA Jurisdictions
NFIB views the proposed rule as a jurisdictional land-grab.
It should be remembered that the Agencies are not writing on a
blank slate here. The Supreme Court has made clear that there
are constitutional limits on the jurisdictional reach of the
Clean Water Act. The Agencies have been repudiated for
overreaching in the past, and will be again if the proposed
regulation is understood as reaching beyond the constitutional
limitations recognized in Rapanos.
There are undoubtedly grounds for disputing how far CWA
jurisdiction reaches on a case-by-case basis; however, there is
no question that Rapanos set the outer-limits. The Agencies
cannot exceed those limits any more than Congress could. And
for several reasons, NFIB believes the proposed regulation go
beyond what the Rapanos tests allow. NFIB views the proposed
rule as a jurisdictional land grab. For the reasons set forth
below, we maintain the proposed regulation are inconsistent
Rapanos and should therefore be amended or abandoned entirely.
This is not an exhaustive list of our legal concerns over
the jurisdiction the Agencies propose to assert. NFIB will
provide a more detailed explanation of these concerns in our
formal comments to the Agencies. We will be sure to provide the
Committee with those comments once they are filed.
(1) The Proposed Regulation Lowers the Threshold for
Proving Navigability
The proposed regulation defines ``traditional navigable
waters'' as any waters that are used for commerce or that could
be used for commerce in the future. But the proposed regulation
would effectively expand CWA jurisdiction by lowering the
threshold for demonstrating the potential for navigable use in
commerce. Specifically, the proposed regulation provides that
the potential for commercial navigation ``can be demonstrated
by current boating or canoe trips for recreation or other
purposes.'' While the proposed regulation suggests that the
Agencies' assessment must take into account physical
characteristics of the waterway, it ultimately provides that
the water will be viewed as ``traditional navigable waters'' if
there is any evidence that a watercraft can navigate the
waterway. This would seemingly justify the Agencies treating
any waterway as ``traditional navigable water'' if any party
can succeed in a single downstream trip--an approach that we
think is far too easy to satisfy.
(2) The Proposed Regulation Disregards Whether Interstate
Waters are Navigable
The proposed regulation inappropriately treats all
interstate waters as ``waters of the United States,''
regardless of whether they are in fact navigable, or even
``connect[ed] to such waters.'' But, the Supreme Court has made
clear that jurisdiction may not be assumed in this manner. To
assert jurisdiction, an agency must demonstrate that there is a
connection to traditional interstate navigable waters. And the
potential for commercial navigation must be proven in fact.
(3) The Proposed Regulation Distorts Justice Kennedy's
`Nexus Test'
The proposed regulation expands CWA jurisdiction by
distorting Justice Kennedy's ``significant nexus test,'' such
that it will liberally justify jurisdictional assertions beyond
what the test would allow for if properly applied. The result
is an expansion of CWA jurisdiction. It does so in three ways.
One way is that the proposed regulation misstates the
significant nexus test by replacing the conjunctive word
``and'' with the disjunctive word ``or,'' when listing the
different factors to be considered in determining whether the
subject wetland has a sufficient nexus to traditional navigable
waters. The proposed regulation also seeks to lower the
threshold for satisfying the significant nexus test by stating
that the test will be satisfied if it can be demonstrated that
the chemical, physical or biological effect on jurisdictional
waters is more than ``speculative or insubstantial.'' Finally,
the proposed regulation changes the significant nexus test by
expanding the definition of ``region.''
(4) The Proposed Regulation Asserts Jurisdiction Over
Anything with a High Water Mark
The proposed regulation provides that any ``natural, man-
altered, or man-made water body'' with an ordinary high water
mark will be considered a tributary. This requires the Agencies
to assert jurisdiction over practically any land over which
water occasionally flows. But, both Rapanos tests rejects such
an expansive interpretation of CWA jurisdiction.
(5) The Proposed Regulation Places the Burden on the
Landowner to Disprove Jurisdiction
The most fundamental problem is that the proposed
regulation operates so as to create a presumption of
jurisdiction--a presumption that may not bear out in practice.
This is highly problematic because the burden should not be on
the landowner to disprove CWA jurisdiction. The burden should
rest on the Agencies to prove the existence of a ``significant
nexus'' in any given case.
The small business community needs more time to comment on
the proposed rule
NFIB believes that because of the substantial increase in
jurisdiction under the proposed rule and its technical nature,
the small business community needs an additional 90 days to
adequately comment on the proposed rule.
Specifically, NFIB is attempting to reach out to its
membership to understand the full impact of this rule. In order
to do that, we have to first educate our membership on its
scope. This will take substantial time to do satisfactorily. In
addition, NFIB's Small Business Legal Center has filed a
Freedom of Information Act request with the Agencies seeking
information about how the Agencies determined they could
certify the rule as not having a significant impact. We believe
the NFIB Legal Center needs additional time to receive and
review these materials, in order to properly comment on the
certification.
Only Congress can fix the CWA's jurisdictional pitfalls
As Justice Alito noted in the Sackett v. EPA, the ``reach
of the Clean Water Act is notoriously unclear.'' This is
undoubtedly true. The Supreme Court has addressed CWA
jurisdictional questions on three different occasions. But, the
exact reach of the CWA remains a murky question--so much sot
hat some legal scholars contend that the CWA is
unconstitutionally vague because the regulated community cannot
readily determine whether a given property is, or is not, a
jurisdictional wetland.
While it is commendable that the Agencies apparently seek
to resolve some of the confusion over the jurisdictional reach
of the CWA in the proposed regulation, our view is that only
Congress can fix this problem. The proposed regulation would
resolve the vast majority of jurisdictional disputes by
applying categorical rules, which will result in expansive
assertions of jurisdiction. But Rapanos makes clear that
categorical assertions of jurisdiction must be rejected. It is
simply beyond the authority of the Agencies to expand CWA
jurisdiction through the rulemaking process in a manner that
conflicts with the jurisdictional tests set forth in Rapanos
and her progeny.
Therefore, NFIB believes action by Congress is necessary to
ultimately provide the type of clarification that would allow
small business owners to operate without fear of unknowingly
violating the CWA.
Conclusion
NFIB greatly appreciates the efforts of the Committee to
hold the Agencies to account on its requirements under the RFA.
The Committee has demonstrated great leadership in expressing
to the Agencies the tremendous impact this rule will have on
small businesses across America.
Thank you again for the opportunity to provide this
statement for the record. NFIB remains eager to work with
members of the Committee to ensure that the Agencies operate
within the bounds Congress clearly intended. We also look
forward to working with the Committee to help ensure that the
Agencies adhere to their responsibilities under the RFA in all
of its current and future rulemakings.
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May 29, 2014
The Honorable Sam Graves
Chairman
Small Business Committee
U.S. House of Representatives
Washington, DC 20515
The Honorable Nydia M. Velazquez
Ranking Member
Small Business Committee
U.S. House of Representatives
Washington, DC 20515
Dear Chairman Graves and Ranking Member Velazquez:
On behalf of Trout Unlimited's (TU) 153,000 members
nationwide, I am writing to provide testimony for your hearing
today titled: ``Will EPA's Waters of the United States Rule
Drown Small Business''? I ask that you please include our
letter in the hearing record.
The premise of the hearing appears to be that the recent
Army Corps of Engineers and EPA proposal on defining the waters
of the U.S. would, if finalized, be harmful to small
businesses. TU strongly supports the proposed rule because it
will clarify and strengthen the very foundation of the Clean
Water Act's protections for important fish and wildlife
habitat. Based on our long experience and the detailed economic
analysis completed by the agencies and Office of Management and
Budget for the proposal, we believe that many small businesses
will benefit from the rule. We urge Committee to take a closer
look at the proposal and discuss it with the many small
businesses around the nation which rely upon health of the
waters of the U.S. We urge the Committee to approach this topic
with an eye towards making suggestions that will improve the
rule. When you do, we believe you will find this proposal to be
worthy of your support.
The Clean Water Act is very valuable to TU. Our mission is
to conserve, protect and restore North America's trout and
salmon fisheries and their watersheds. Our volunteers and staff
work with industry, farmers, and local, state and federal
agencies around the nation to achieve this mission. On average,
each TU volunteer chapter annually donates more than 1,000
hours of volunteer time to stream and river restoration and
youth education. The Act, and its splendid goal to ``restore
and maintain the chemical, physical, and biological integrity
of the nation's waters'' serves as the foundation to all of
this work. Whether TU is working with farmers to restore small
headwater streams in the Mississippi River watershed in
Wisconsin, removing acidic pollution cause4d by abandoned mines
in Colorado, or protecting the world famous salmon-producing
watershed of Bristol Bay, Alaska--and its 14,000 jobs--the
Clean Water Act is the safety net on which we rely.
Unfortunately, the nation's clean water safety net is
broken, and if you appreciate clean water and the Clean Water
Act, then you will appreciate the agencies' efforts to resolve
the law's most fundamental question: which waters are--and are
not--covered by the Clean Water Act.
Over the last decade, a series of Supreme Court decisions
have weakened and confused these protections. The Army Corps
and EPA proposal takes important steps to clarify and restore
protections to intermittent and ephemeral streams that may only
flow part of the year, as well as isolated wetlands. These
intermittent and ephmeral streams provide habitat for spawning
and juvenile trout, salmon, and other species, and protecting
these streams means protecting the water quality of larger
rivers downstream. Thus, sportsmen strongly support the
reasonable efforts embodied in the proposed rule to clarify and
restore the protection of the Clean Water Act to these bodies
of water where we spend much of our time hunting and fishing.
I hope that the Committee recognizes the fact that, because
of the uncertainties caused by the Supreme Court cases, a
rulemaking was sought by many business interests, as well as by
Supreme Court Justice Roberts who presided over the Rapanos
decision which necessitated clarity over the Clean Water Act's
jurisdiction.
I also urge the Committee to recognize that the proposal
works to clarify what waters are not jurisdictional. The
proposed rule and preamble reiterates all existing exemptions
from Clean Water Act jurisdiction, including many farming,
ranching, and forestry activities. These exemptions include
activities associated with irrigation and drainage ditches, as
well as sediment basins on construction sites. Moreover, for
the first time, the proposed rule codifies specific exempted
waters, including many upland drainage ditches, artificial
lakes and stock watering ponds, and water filled areas created
by construction activity.
Small businesses lose when the water that communities rely
on is polluted, or is at risk of being polluted. The very
unfortunate chemical spill in the Elk River in West Virginia
earlier this year makes this point crystal clear. During that
event, thousands of West Virginians could not drink or utilize
their waters. They could not fish in or recreate in their home
waters.
Conversely, small businesses win with clean water and
healthy fish habitat. Hunting and fishing collectively
represent a $200 billion a year economy, supporting 1.5 million
jobs. These economic benefits are especially pronounced in
rural areas, where money brought in during the hunting and
fishing seasons can be enough to keep small businesses
operational for the whole year. Through licenses, fees and
excise taxes on sporting equipment, sportsmen also pay hundreds
of millions of dollars each year for fish and wildlife
management, habitat conservation, and public access. This
economic engine runs on clean water.
The prosperous connection between clean water and small
business occurs across the nation many times over, but the
guiding and outfitting business owned and operated by my friend
Tim Linehan and his wife Joanne in Libby, Montana is a great
example. Tim and his partners guide hundreds of anglers from
around the U.S. who come to fish the beautiful Kootenai and
Yaak rivers. Tim's business employs people in Libby directly,
and the purchases he makes to keep the businesses running are
made throughout Montana and across the nation in terms of
fishing equipment and boats that he uses to run the business.
Tim knows the value of clean water to his business and he is a
passionate conservationist because of it. He is part of sport
fishing business that yields an estimated $340 million dollars
in Montana each year. It is the same story in many parts of
U.S. Whether it is the sport fishing businesses associated with
the outstanding fisheries of Missouri, the exciting steelhead
fisheries of the rivers in northeastern Ohio, or the gold medal
trout streams of Colorado, clean water and great fishing mean
strong business opportunities.
In January of 1991, I testified before this committee on a
very similar issue, a proposal to revise and improve the Clean
Water Act wetlands delineation manual used by these same
agencies to define what were--and what were not--jurisdictional
wetlands. I defended the Bush Administration's efforts to
improve the manual so that it would be a better tool for
scientifically defining wetlands and providing more certainty
for regulated businesses. Many of the Small Business committee
members who participated in the 1991 hearing complained about
the agencies' proposal. They said that it was a federal land
grab, and that it would lead to regulation of mud puddles and
bird baths. Sound familiar? The agencies proposal that is
before us today is not about--as it was not in 1991--a federal
land grab, nor an effort to regulate bird baths. It is about a
worthy effort to make a great law, the Clean Water Act, work
better to protect the waters of the U.S.
Now 40 years old, the Clean Water Act has come to a major
crossroads. The agencies which Congress authorized to implement
the Act, spurred by the Supreme Court itself and a wide range
of stakeholders, have put forth a proposal that will help
strengthen the very foundation of the law for years to come. As
you scrutinize the proposal, we urge you and the Committee to
strongly consider the views of sportsmen and women, and the
many small businesses that they sustain with their purchases,
and support the reasonable and science-based efforts of the
Corps and EPA to clarify and restore the Act's jurisdictional
coverage.
Thank you for considering our views,
Steve Moyer
Vice President for Government Affairs
Trout Unlimited
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