House Small Business Committee Chairman Sam Graves (R-MO) today urged the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) to withdraw the “Waters of the United States” proposed rule to expand the reach of the Clean Water Act (CWA), due to the agencies’ failure to examine the impacts of the proposal on small entities as required by the Regulatory Flexibility Act (RFA).  The agencies certified the proposed rule as one that will not have a significant economic impact on a substantial number of small entities.

In a comment letter, Graves wrote, “Based on the testimony from the hearings and the Committee staff’s analysis, the Committee disagrees with the agencies’ certification of the Proposed Rule. Contrary to the agencies’ assertions, the Proposed Rule will increase the geographic scope of CWA jurisdiction and small entities will be directly affected. The EPA should have conducted a Small Business Advocacy Review (SBAR) panel to get input from small entities and performed an initial regulatory flexibility analysis (IRFA) assessing the impacts of the Proposed Rule on small entities as required by the RFA.  Unfortunately, the agencies did not do so and instead engaged in arbitrary and capricious rulemaking.”

A particular concern is the rule’s failure to clarify what specifically are “Waters of the United States,” which is one reason the regulation was deemed necessary.

“For a large business with access to lawyers and civil engineers deciphering these terms would be very problematic. For small entities such as a rural town government, a farmer or a home builder, the determination of whether a water body is an adjacent water under the Proposed Rule will be well nigh impossible due to the inherent vagueness. This inherent vagueness portends significant civil liability if the small entity is incapable of ascertaining whether it needs a permit under §§ 402 or 404 of the CWA,” Graves continues.

“The agencies failed to comply with the requirements of the RFA and their rationales appear to be nothing more than pretexts to avoid consideration of impacts on small businesses, small governmental jurisdictions and small not-for-profits as directed by Congress.”

Graves concludes, “As it now stands, the Proposed Rule will clarify little, lead to significant litigation (including challenges that might prohibit enforcement against small entities), and ultimately undermine the agencies’ mission of protecting the waters of the United States from degradation.  The only logical course for the agencies is to rescind the proposal and reissue it after fully complying with the RFA so the end result will be a logical, non-arbitrary rule that actually clarifies definitions and protects the waters of the United States.”

The Committee held a hearing on this proposed rule on May 29, 2014. Small business leaders have overwhelmingly maintained that the rule creates more confusion, would be economically detrimental on many levels, and wouldn’t improve water quality. Also in May, Graves and Members of the Committee wrote to EPA Administrator Gina McCarthy and Assistant Secretary of the Army Jo-Ellen Darcy, who oversees the U.S. Army Corps of Engineers, to urge withdrawal of the pending rule. 

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