NAAA has experienced significant concern over the proposed policy changes and the efforts of the Environmental Protection Agency (EPA) and the Army Corps of Engineers (collectively, the agencies) to downplay the likely policy, legal and economic impacts of their proposed rule to redefine for the entire Clean Water Act (CWA) definition of “Waters of the U.S.” (WOTUS). With the rule, the agencies would replace existing policy and years of informal guidance and informal statements with black-letter-law federal regulation of the land use decisions and water quality of individual ditches and many thousands of minor “waters.” The rule would change the definition of federally protected “waters” under all programs of the CWA—redefining the scope of 15 different federal regulatory programs. NAAA has been actively involved in these discussions, has provided testimony for a House Small Business Committee hearing on the anticipated economic impacts of the proposed rule on aerial applicators, and will file public comments in the official agency docket. This article is intended to bring members up to date on this issue.

Rather than clarify current law and resolve policy following several muddled Supreme Court decisions, the proposed rule would instead create confusion and brook endless litigation that could harm aerial applicators and other private and public stakeholders. The new “waters of the US” definition would include a number of vague and broadly-defined terms such as “adjacent,” “riparian area,” “floodplain” and “significant nexus” that do not clearly delineate which waters are covered. “Uplands” are a major focus throughout the proposal but are not defined in either the rule or the preamble. For the first time in any rule or guidance document, “tributary” would be defined to include all ditches and other bodies of water that contribute “flow” (directly or indirectly, even if only remotely connected) to jurisdictional waters. “Adjacentwetlands” would be expanded in the rule to include all “adjacent waters,” likely adding thousands of newly-regulated conveyances to the scope of federal enforcement and potential citizen suits. “Other waters” also may be subject to the jurisdiction of the CWA on a case-by-case basis if there is a “significant nexus” to traditionally navigable waters. This is enough to make our heads spin, as we contemplate the impacts of the agencies’ creative policy interpretation, expansive jurisdictional reach, and imprecision of the terms used by the agencies. Our interpretation is that the proposed rule could well result in significant added legal and regulatory costs for NAAA members.

Looking specifically at potential economic impacts for NAAA members, we characterized our industry’s demographics and provided written testimony for a recent hearing of the House Small Business Committee about our concerns with the proposed rule. We said we believe the economic analysis conducted by the agencies for their proposed rulemaking did not adequately consider the economic impacts on small businesses like aerial applicators that are required under the Regulatory Flexibility Act. Had they conducted such an analysis, the agencies would have determined the proposed rule would impose significant costs, legal jeopardy and compliance burdens on the aerial application industry, and that it will interfere with the health and welfare services NAAA members provide society. Both direct and indirect economic risks would result. We explained to Congress that aerial applicators are subject to state and federal regulations for pesticide use, including enforceable FIFRA label requirements for terrestrial pesticides, many of which clearly state “do not apply to water.” Despite the most sophisticated equipment, pilots applying pesticides at 120 to 150 mph will find it difficult to correctly determine if a shadow on the ground happens to be a federally-regulated ephemeral ditch, seasonal “tributary,” or neighboring “adjacent water.” Especially troubling would be features that are dry at the time, overgrown with vegetation, and unbeknownst to aerial applicators may only occasionally and indirectly provide snowmelt or stormwater flow for a few days a year to some remote “waters of the US.” The hearing in the House Small Business Committee was held on May 29.

For any applications of pesticides intended to be sprayed “into, over or near” water (e.g., for mosquito control, forest canopy insect control, aquatic weed control, etc.), NAAA testimony explained that NAAA members are subject also to the requirements of NPDES general permits issued by EPA and 45 delegated states. The NPDES permit requirements vary widely from state to state, and aerial applicators serving clients in multiple states must maintain compliance with several different sets of permit requirements. Alleged noncompliance could result in CWA penalties or citizen suits, which could put individual NAAA members out of business. The proposed rule would create more confusion, costs and legal burdens as aerial applicators and their clients (farmers, ranchers, forest owners, public and private pest managers, and natural resource managers) struggle to locate any newly-defined “waters of the US” on their lands and adjust their work accordingly. Legal jeopardy and economic risks likely could discourage many aerial application contracts and could adversely affect access to financing for expensive aircraft.

Noted University of California–Berkeley economist Dr. David Sunding reviewed the cost-benefit analysis conducted by the agencies for the proposed rule. His report, Review of 2014 EPA Economic Analysis of Proposed Revised Definition of Waters of the Unites States, examined EPA estimates of probable costs and benefits associated with the proposed rule on “Waters of the United States,” and found that EPA significantly underestimated the economic impacts the rule will have on small businesses and local communities. His report chronicles how EPA systematically excluded costs, underrepresented jurisdictional areas and used outdated economics and flawed methodologies to arrive at indefensibly-low economic impacts. He also examined how the lack of transparency in the report makes it difficult to understand or replicate the calculations, evaluate the underlying assumptions, or understand discrepancies in the results. Dr. Sunding explains how EPA’s analysis downplays non-wetlands impacts, resulting in an artificially small increase in jurisdictional waters. Dr. Sunding’s report concluded that the agency errors are so extensive as to render its economic conclusions unusable for determining the true cost of the proposed rule. His report underscores the need for EPA to withdraw the rule and complete a comprehensive and transparent economic review.  To view Dr. Sunding’s full report, click here.