A Small Business Administration watchdog agency wants the Environmental Protection Agency to withdraw a new rule it is implementing under the Clean Water Act because it wrongly said the rule would not have an adverse economic impact.
The SBA’s Office of Advocacy, in an Oct. 1 letter to EPA Administrator Gina McCarthy, said the proposed rule would place costs “directly on small businesses” that would have a “significant economic impact,” despite EPA’s claims to the contrary.
The agency based its finding on the EPA’s own economic analysis of the proposed rule, which found that it would raise annual permit costs by $20 million to $52 million and mitigation costs by $60 million to $114 million.
“The agencies’ certification and economic analysis contradict each other,” the letter says, pointing out that the EPA is ignoring its own findings.
The EPA denied that was the case in a statement to the Washington Examiner. “This proposal … creates no new requirements for small businesses or any others,” it said, adding that the certification of the proposed rule “is fully consistent with the law and past practice.”
However, the statement did not explain the apparent contradiction between the EPA economic analysis and the rule certification — as of Monday night, an agency spokesman had not clarified the discrepancy.
The proposed rule would increase the number of streams and wetlands covered by the EPA’s authority under the Clean Water Act — from 98 and 98.5 percent, respectively — to 100 percent. The change is intended to remove any ambiguity about the act’s reach. Public comment was closed in July, and the rule is scheduled to be implemented in April.
The National Association of Manufacturers applauded the SBA for highlighting the contradiction and called on EPA to withdraw the rule. It warned that, if implemented, it would “significantly impact not only manufacturers but farmers, developers, construction companies and a significant portion of the supply chain.”
Under the 1996 Regulatory Flexibility Act, federal agencies must certify whether a new rule will have any significant adverse economic impact, especially on small businesses.
The EPA’s official announcement, published in April, states: “Because 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.”
But as the SBA’s Office of Advocacy noted, an economic analysis the EPA performed in March said “the proposed rule will be an approximate 3 percent increase in assertion of jurisdiction when compared to 2009-2010 field practices.”
The Office of Advocacy is an independent office within SBA. Its main function is to monitor other federal agencies and publish reports. Its views “do not necessarily reflect those of SBA or the administration.”
“We have not heard [back] from the EPA on this issue,” said Office of Advocacy spokeswoman Elizabeth Horowitz. “They do not have to respond before publishing the final rule.”
