Expansion of Clean Water Act May Affect Homebuilders

At the end of March, the Environmental Protection Agency (EPA) and the Army Corps of Engineers released a long-awaited proposal to clarify the wording of the Clean Water Act, which is designed to protect rivers, wetlands and other waterways from erosion and other damage caused by human activity. However, not everyone is happy about the new proposed rule, including the National Association of Home Builders (NAHB). Two decisions made by the U.S. Supreme Court in the last 15 years limited the Clean Water Act and muddied the waters, so to speak, over exactly which waterways fall under federal jurisdiction. Since those decisions, organizations regulated under the act and the EPA have been going mad trying to sort out exactly who is to regulated and by which layer of government: federal, state or local.

For years, a multitude of large corporations, professional organizations, government agencies and environmentalist have been calling for the rule to be revised so that it provides more clarity and guidance. According to the EPA, this is exactly what the proposed rule is doing. However, several detractors say that the proposed rule unfairly expands the jurisdiction of the EPA, will drastically increase costs and cause delays in permitting without a proportional benefit.

One of the strongest voices in opposition to the proposed rule is the NAHB, which has been asking for the new rule for several years now. Kevin Kelly, president of the NAHB, said the drafted rule does not do what it was meant to accomplish.

“Instead, EPA has added just about everything into its jurisdiction by expanding the definition of a ‘tributary’ – even ditches and manmade canals, or any other feature that a regulator determines to have a bed, bank and high-water mark. It’s a waste of taxpayer resources to treat a rainwater ditch with the same scrutiny as we would the Delaware Bay,” stated Kelly in a press release.

 Kelly also stated that the expansion of authority under the new rule would require larger numbers of developers and construction projects to obtain permits, which will delay or halt construction projects. This, in turn, will directly affect countertop fabricators who provided products for new construction or even remodeling projects, including small, single-family home projects. In addition, the new rule will increase the costs of construction for developers.

The EPA, however, does not agree on some of these points. According to the EPA’s website, the Waters of the United States Proposed Rule reduces confusion about the Clean Water Act and clarifies which types of waters are covered under it. The website also states that the rule does not protect new types of waters, does not expand jurisdiction over ditches and does not broaden coverage of the Act.

What the EPA does admit is that the Act is associated with higher costs, most of which will be paid by land developers and the agriculture industry. Even though all of the current exemptions remain in place, the new rule is expected to cost between $134 million to $231 million. The EPA is justifying these costs through an analysis showing that the expected benefits of the rule are in the range of $301 million to $398 million, which will go toward protecting the ecosystem by providing stable habitats supportive of biodiversity, preventing erosion, allowing for the free flow of groundwater and reducing flooding.

This new rule is certainly more divisive than most organizations and government agencies had predicted. Alliances have been formed on both sides. The agriculture and land development industries are pushing back fiercely while several bodies are aligning with the EPA, including the American Sustainable Business Council (ASBC), National Farmers Union and the Center for Rural Affairs.

In accordance with standard practice, the EPA has established a 90-day period for public comments, which is open until July 21, 2014. To read more about the rule and how it may affect your business and to enter a public comment, visit the EPA web page concerning the changes to the Clean Water Act.