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Waters of the U.S.

CONSTRUCTION INDUSTRY TO GET WET WITH NEW DEFINITION
BY DEBRA WOOD

The level of government control over construction work in or nearby smaller, more isolated waters and wetlands may soon change, if a rule proposed by the U.S. Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers in March, redefining the Clean Water Act’s term “waters of the United States,” takes effect. The EPA maintains that the rule will benefit businesses by increasing the efficiency in determining when federal permitting, planning, reporting and other Clean Water Act requirements apply, but contractors are concerned about delays and costs and the federal government taking over local land use and planning.

“It’s a very disturbing change to the definition,” says Lennie Boteilho, environmental affairs & senior project manager for Ames Construction in West Valley City, Utah, a member of the Utah Chapter of AGC of America. “It’s unjustifiable and will create serious concerns about how properties are looked at for development. The new regulations will take large tracts of land not under the authority of the Clean Water Act because of their connections to waters of the U.S. This will overreach the previous definition.”

Boteilho indicated it would be less likely lands will be developed and will take longer for an entity to secure approvals to expand facilities or develop new ones if the rule becomes law. The changes not only would affect private development but also public projects and repairs or upgrades to existing infrastructure.

“I have major concerns,” adds Michael Shaw, district environmental manager at PCL Civil Constructors in Issaquah, Wash., a member of AGC of Washington. “It has more to do with the largest land grab in federal history than it has to with expanding protection under the Clean Water Act.”

The EPA countered that the new definition is not a land grab, because the Clean Water Act does not regulate land use, only pollution and destruction of U.S. waters. It estimates a positive economic effect of $390 million to $510 million, compared with an estimated $160 million to $278 million in costs.

CURRENT AND PROPOSED DEFINITIONS
The EPA reported that for nearly a decade, after Supreme Court decisions in 2001 and 2006 determining Clean Water Act protections for streams and wetlands, Congress, state and local officials, industry and other groups asked for clarity about what waters must be monitored by the federal government.

“The U.S. Supreme Court has made clear there are limits to federal jurisdiction under the Clean Water Act,” says Leah Pilconis, senior environmental advisor for AGC of America. “Our interpretation of the proposed rule is that it would extend federal coverage to so many features that are remote and/or carry very minor volumes of water.”

The current regulatory definition of the waters of the U.S. says all waters currently or formerly used or susceptible to use in interstate or foreign commerce, including those subject to the ebb and flow of tide; all interstate waters, including wetlands; all intrastate lakes, rivers, streams, mudflats, sand flats, wetlands, sloughs, prairie potholes, wet meadows or natural ponds which if degraded could affect commerce associated with the waters. It also includes tributaries of such waters, territorial sea and wetlands adjacent to waters. The critical jurisdictional term “tributary” is not defined under current federal law.

The proposed rule aims to create a clearer definition of what waters are covered under the act by including upstream waters that affect downstream waters, already under federal jurisdiction. It would protect most seasonal and rain-dependent streams and wetlands near rivers and streams. The EPA explains that about “60 percent of stream miles in the U.S. only flow seasonally or after rain but have a considerable impact on the downstream waters. And approximately 117 million people – one in three Americans – get drinking water from public systems that rely in part on these streams.” The federal government will determine protection for other types of waters, which may have more uncertain connections with downstream water, and they will be evaluated through a case-specific analysis of whether the connection is or is not significant.

“In redefining that term, the way the rule is proposed, there are a lot of areas not jurisdictional right now that will come under federal control,” Pilconis says. “When you add up all parts of the definition, it seems like there is no meaningful limit to federal jurisdiction.”

Additionally, the new definition of waters of the U.S. would apply not only to dredge-and-fill discharge permits but also other Clean Water Act programs, including the National Discharge Elimination System permit program, pertaining to stormwater runoff to federal waters, and the Oil Spill Prevention Control and Countermeasures Program, which requires spill plans if there is a potential for a leak into federal waters. Consequently, the new definition will lead to additional challenges for contractors.

ISSUES FOR CONTRACTORS
The new definition of waters of the U.S. could expand the number of drainage ditches that would fall under federal control, which could affect highway improvement projects, Pilconis says. And it could affect the construction and maintenance of “green infrastructure” controls required by most state and city governments as a stormwater management tool to lessen flooding and protect water quality by using vegetation, soils and natural processes, according to AGC.

Shaw foresees negative consequences for landowners and contractors, such as increasing construction, compliance and mitigation costs. Federal permits, typically, take longer to obtain than local permits. In most cases, he said it takes 18 to 24 months.

Ames also has experienced delays with federal approvals, while local authorities are available and willing to sit down and discuss projects. Local authorities also have a much better understanding of the systems that exist in their state, adds Boteilho.

“The biggest problem would be the cost and the time it would take for contractors to perform work in any area that is wet, even if the area is only wet during certain times of the year,” says Pilconis.

Federal permits are typically more costly to obtain than state and local permits, she adds. Additionally, they typically take longer, because a backlog exists. No new funding is proposed to help the U.S. Corps of Engineers deal with additional permitting.

“If you massively increase the amount of potential projects that have to get permitted, that backlog extends exponentially,” says Scott Berry, director of the Utility Infrastructure Division, Environment, and Trade at AGC of America. “We’re talking about costs and delays on a system already not functioning to its potential.”

The proposed rule also would change pollution planning and reporting requirements. It could trigger interagency consultation programs, such as historic preservation or species protection. Mitigation also could present problems and be expensive.

Huge penalties exist under the Clean Water Act. Pilconis says penalties can reach $37,500 per day for a violation.

“There is a huge risk of noncompliance when you are talking about a federal program,” Pilconis adds. “That’s a problem, because the proposal is not clear. It leaves some terms undefined, and some new terms introduced are vaguely defined.”

The burden rests with the regulated entity to determine if the project affects a jurisdictional category. This becomes especially problematic because of the types of waters now being covered, Berry says.

“They are some of the waters a reasonable person looking at a landscape would not expect them to be federally protected waters,” Berry explains. “They may only have water in them two or three weeks out of the year, after a huge rainstorm.”

The philosophy behind the rule puts nearly all waters under federal jurisdiction, until they are excluded, Berry says.

The EPA maintains that the new definition “will help reduce regulatory confusion and delays in determining which waters are covered.”

Risks are not limited to penalties. Contractors in a design-build contract could be held responsible for design flaws that do not meet the Clean Water standards on waters previously not under federal jurisdiction, Shaw says.

“Under the Clean Water Act, a citizen can bring a lawsuit against a regulated company, and challenge its decision that something was or was not jurisdictional,” Pilconis says.

The burden of proving that a water-filled depression was created incidental to construction activity – and therefore excluded from federal jurisdiction – will fall to the contractor, who may need to rely on old maps and aerial photos to identify historic conditions to resolve any third-party allegations of violations. Yet these tools often lack the level of resolution required to make a proper determination, AGC reports.

ACTIONS TAKEN TO PREPARE
Ames has planned ahead in case the rule is put in place as proposed. Boteilho says the company is becoming quite careful about the projects it invests in, being very sensitive when considering purchasing new equipment for long-range planning.

“From a business point, it’s safer to rent equipment, if we believe a project will get delayed or canceled because of securing regulatory authorizations,” Boteilho says. “We are also careful about hiring long-term employees with the changes that could come down.”

During the rule’s comment period, AGC asked members to weigh in on behalf of their businesses, raising key concerns, and to share those worries with their members of Congress. On Nov. 13, the association filed an extensive letter (http://bit.ly/1A7Pb2y) with the EPA that identifies the problems with its proposal and urges the withdrawal of the new definition. AGC also submitted nearly 200 pages of additional comments as a result of working with other members of a broad coalition opposing the new definition. AGC provided an exhaustive analysis of the legal, scientific, economic and procedural deficiencies associated with the rulemaking. Since the agencies are not under a deadline to promulgate this rule, there is sufficient time to begin again and create a rule that is legally defensible.

On behalf of the industry and its members, AGC of America will continue to push the administration to reconsider this misguided new regulation.