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EPA to Reconsider Key Aspect of Construction Stormwater Rule

September 30, 2010

Nearly a year after finalizing its construction stormwater rule, in response to objections from industry groups, EPA has conceded that the controversial numeric turbidity limit in the rule is flawed. EPA issued the final construction stormwater effluent guidelines rule[1] (the “Rule”) in December 2009, for the first time establishing a numeric limit on the turbidity of stormwater discharges from large construction sites and requiring monitoring to ensure compliance with the numeric limit. The Rule also required nearly all construction sites that obtain stormwater permits after February 1, 2010 to implement a range of erosion and sediment controls and pollution prevention measures. EPA’s Rule elicited immediate criticism, including a lawsuit brought by industry groups in the Seventh Circuit,[2] and a petition for administrative review by the Small Business Administration (“SBA”) Office of Advocacy. A primary element of these challenges was the claim that EPA’s numeric turbidity limit is flawed.

In August, EPA filed an unopposed motion in the Seventh Circuit case, requesting that the court vacate the numeric turbidity limit, remand that part of the Rule to the agency, and hold the suit in abeyance until February 15, 2012 to give EPA time to reevaluate the Rule’s numeric limit. The court granted EPA’s request to remand the Rule and to hold the suit in abeyance, but refused to vacate the numeric limit. The effect of the court’s decision is that, despite EPA’s admission that the numeric limit is invalid, it remains an enforceable component of the Rule. This leaves the handful of states that have already begun work on general permits for construction stormwater, including Washington, in the awkward position of deciding how to accommodate a numeric turbidity limit that would be subject to suit while EPA goes through the potentially time-consuming administrative process of revising its Rule.

Background on EPA’s Final Rule

The CWA prohibits discharges of pollutants by any person from point sources into waters of the United States without a National Pollutant Discharge Elimination System (“NPDES”) permit.[3] NPDES permits limit the type and quantity of pollutants that may be discharged from a point source, and set forth effluent limits that restrict the quantities, rates, and concentrations of discharges of chemical, physical, biological or other constituents, such as sediment or turbidity.[4] Most states have sought and received authority from EPA to implement the NPDES permitting program,[5] but EPA retains authority to mandate technology-based performance criteria for point source categories (effluent limitations guidelines, or “ELGs”), as well as new source performance standards (“NSPSs”).[6] EPA’s national regulations set a floor for technology-based effluent limits in NPDES permits, although states may set more stringent limitations to protect water quality.

As we explained in a previous article in this newsletter,[7] EPA was under a court-imposed deadline to finalize the construction stormwater effluent guidelines. EPA first proposed effluent guidelines for stormwater discharges associated with the construction and development (“C&D”) category in 2002,[8] but chose not to finalize the standards in 2004.[9] In 2008, after environmental groups sued, the Ninth Circuit enjoined EPA to propose ELGs and NSPSs for C&D activities by December 1, 2008, and to promulgate a final rule by December 1, 2009.[10] In accordance with that deadline, EPA released a proposed rule in November 2008[11] that would have: (1) required construction sites disturbing one or more acres to utilize non-numeric effluent limitations (i.e., specific best management practices (“BMPs”) to control erosion and the runoff of sediment);[12] (2) required sites disturbing ten acres or more to install a sediment basin to control sediment in stormwater runoff; and (3) required certain large construction sites (more than thirty acres) to meet a numeric turbidity limit of 13 nephelometric units (“NTUs”).[13] EPA set the numeric limit based on the implementation of active or advanced treatment systems for stormwater discharges, which consist of poly-assisted clarification followed by filtration.[14] EPA estimated that complying with the proposed rule would cost the construction industry nearly $2 billion.[15]

EPA finalized the Rule in December 2009. Although the Rule included both numeric and non-numeric effluent guidelines, it differed significantly in some respects from the proposed rule. The Rule retained the non-numeric effluent limitations for construction sites of one acre or greater, including a range of erosion and sediment controls and pollution prevention measures that must be incorporated into NPDES permits issued after the Rule took effect on February 1, 2010.[16]

Significantly, however, the Rule raised the numeric limitation for turbidity from 13 to 280 NTU.[17] In response to comments on the proposed rule, EPA also changed the technology basis for the numeric limit from active or advanced treatment systems to passive treatment systems, which, as used in the Rule, include practices that rely on settling and filtration to remove sediment, turbidity, and other pollutants.[18] The Rule also lowered the threshold acreage that triggered the numeric limit from thirty acres to ten;[19] however, the Rule mitigated the impact of this change by providing for a two-phase implementation schedule. For NPDES permits issued after February 1, 2010 (the effective date of the Rule), the Rule would require construction sites that disturb twenty or more acres of land at one time to comply with the turbidity limitation by August 1, 2011.[20] Construction sites that disturb ten or more acres at one time were given four years to begin compliance (i.e., until February 2, 2014).[21]

Finally, EPA also considered and rejected making the turbidity limitation a “benchmark” instead of a requirement in the Rule. The difference between a benchmark and a numeric limitation is that exceedance of a benchmark is not, in itself, a violation of the NPDES permit, instead triggering corrective actions. EPA concluded that numeric turbidity limitations were feasible and appropriate for larger construction sites.[22]

Challenges to EPA’s Final Rule and EPA’s Request for Remand

The Rule faced immediate criticism from industry. In December 2009, industry petitioners, including the National Association of Homebuilders and the Utility Water Act Group, filed suits challenging the Rule in the Seventh Circuit. The petitioners raised a variety of challenges to the Rule, including that EPA: (1) failed to properly solicit comment on the final form of the Rule; (2) failed to collect and evaluate industry-specific information that would have informed its decisionmaking; and (3) that EPA exceeded its CWA authority by regulating an “optical measurement” (i.e., turbidity) as a “pollutant” and by designating the entire construction site as a “point source.”[23]

In April 2010, before opening briefs were filed in the consolidated case, the SBA’s Office of Advocacy petitioned EPA to reconsider the Rule.[24] The SBA, an independent agency of the federal government created in 1953 to protect the interests of small businesses, alleged in its petition that the numeric standard for turbidity in the Rule is “costly, difficult to implement, and based on numerous factual errors.”[25] Specifically, SBA argued that, in its “rush to meet the court-ordered December 1 deadline,” EPA had misinterpreted its own data, set the 280 NTU limit based on data from active rather than passive treatment systems, and underestimated the cost of the Rule by a factor of ten.[26] SBA argued that, based on its review of the data, treatment using passive technology would result in a treatment level of roughly 800 NTU.[27]

Rather than revising the numeric standard for turbidity, SBA argued that EPA should propose an entirely new ELG. SBA proposed changing the turbidity limit from a numeric limit to a benchmark level, so that exceeding the turbidity limit would not violate the facility’s permit; rather, the exceedance would trigger a review of the facility’s BMPs for controlling stormwater discharges.[28] SBA also proposed raising the acreage threshold triggering numeric limits from ten to thirty acres and reducing the regulatory burden on arid construction sites.[29]

Following receipt of SBA’s letter and the industry petitioners’ opening briefs, EPA filed an unopposed motion in the Seventh Circuit seeking to vacate and remand the 280 NTU limit contained in the Rule.[30] EPA explained that, after examining the “dataset underlying the 280-NTU limit,” it concluded that “it improperly interpreted the data and, as a result, the calculations in the existing administrative record are no longer adequate to support the 280-NTU effluent limit.”[31] EPA also sought to hold the case in abeyance for eighteen months (until February 15, 2012), arguing that remand and abeyance were appropriate because they would allow EPA to address the insufficiencies through the administrative reconsideration process.[32]

EPA also requested that the court remand the administrative record so that it could respond to several issues raised by the petitioners’ briefs. These issues include evaluating the Final Rule’s impacts specific to “linear gas and electric utility projects,” and the applicability of the numeric limit to cold weather construction sites and small sites that were part of larger projects.[33]

On August 24, 2010, the Seventh Circuit issued a two-sentence order granting EPA’s request, stating that the motion “is granted to the extent that the case is remanded to the EPA for further proceedings.”[34]

Industry petitioners in the Seventh Circuit submitted an unopposed motion for clarification regarding the effect of the court’s remand. The petitioners argued that EPA clearly intended to vacate the 280 NTU limit so that the C&D industry would not be subject to a numeric limit in NPDES construction stormwater permits, where that limit is based on an inadequate technical foundation. The petitioners also requested the court to rule on the motion to hold the suit in abeyance, and to remand the administrative record to EPA. On September 20, 2010, the court granted the bulk of the petitioners’ request, but declined to vacate the numeric limits.[35]

Implications, Impact on States

Since EPA finalized its Rule in December 2009, several states have dutifully begun work on re-tooling their construction stormwater general permits to comply with EPA’s requirements. For example, draft permits in Washington[36] and Oregon were open for public comment during the time that the court addressed EPA’s motion to vacate the turbidity limit, and both permits included the 280 NTU numeric turbidity limit. If those states were to issue their draft permits as written they may face challenges from the regulated community regarding the scientific basis of the limits. To address those concerns, Washington’s Department of Ecology is, at the time of this writing, considering whether to remove the 280 NTU limit from the permit based on EPA’s intervening action. The agency is considering comments received on the permit, including comments related to the 280 NTU limit, and will determine whether additional notice and comment is necessary before issuing a final permit in December 2010. Meanwhile, because the non-numeric effluent guidelines in EPA’s Rule appear to be unaffected by the court’s ruling, these aspects of the Rule will presumably continue to be incorporated into permits around the United States. Whether EPA will adopt the SBA’s recommendations and raise the NTU limit when it reissues the discharge limits remains to be seen.

For more information on stormwater permitting, please contact Meli MacCurdy or any other member of Marten Law’s Permitting and Environmental Review or Water Quality practice groups.

[1] See EPA, Effluent Limitations Guidelines and Standards for the Construction and Development Point Source Category; Final Rule 74 Fed. Reg. 62,996, 63,003-04, 63,031 (Dec. 1, 2009) (“Final Rule”).

[2] Wisconsin Builders Ass’n v. EPA, No. 09-4113 (filed Dec. 28, 2009).

[3] See 33 U.S.C. § 1311(a); id. § 1342.

[4] Id. § 1362(11).

[5] EPA administers the NPDES permit program in only four states (Idaho, Massachusetts, New Hampshire, and New Mexico) and the District of Columbia. Final Rule at 63,000.

[6] See 33 U.S.C. § 1314(b). A new source is any source, the construction of which commenced after publication of rules prescribing standards of performance under CWA section 306 applicable to the source, if the rule is subsequently adopted. See id. § 1316(a)(2).

[7] Meline MacCurdy, EPA Construction Stormwater Rule Takes Effect February 1, 2010, Marten Law Environmental News (Jan. 20, 2010).

[8] 67 Fed. Reg. 42,644 (June 24, 2002).

[9] Final Rule at 63,003.

[10] See Natural Resources Defense Council v. U.S. EPA, 542 F.3d 1235, 1241, 1253 (9th Cir. 2008).

[11] 73 Fed. Reg. 72562 (Nov. 28, 2008); see also EPA’s Proposed Stormwater Regulations for Construction Sites Could Cost up to $2 Billion, Marten Law Environmental News (Dec. 18, 2008).

[12] 73 Fed. Reg. at 72,569.

[13] Id.

[14] Id.

[15] Id. at 72,562.

[16] Final Rule at 62,997-99.

[17] Id. at 63,058 (codified at 40 C.F.R. § 450.22(a)(1)).

[18] Id. at 63,004-05; 63,012; 63,019.

[19] Id. at 63,047-48, 63,057-58 (codified at 40 C.F.R.§ 450.22(a)). “EPA emphasizes that the applicability of the turbidity limitation is tied to acres disturbed at one time, not to the ultimate amount of land disturbance on a site.” Id. at 63,047-48.

[20] Final Rule at 63,047-48, 63,057-58 (codified at 40 C.F.R.§ 450.22(a)). EPA’s website notes that Federal Register notice (at 63,050 and 63,058) contains incorrect compliance dates associated with the turbidity limitation for sites disturbing 20 or more acres at one time. The website explains that the correct date for implementation is August 1, 2011. See EPA, Construction and Development – Final Effluent Guidelines .

[21] Final Rule at 63,047-48, 63,057-58 (codified at 40 C.F.R. § 450.22(a)).

[22] Id. at 63,025.

[23] See Brief of Petitioners Nat’l Ass’n of HomeBuilders and Wis. Builders Ass’n, No. 09-4113 (July 9, 2010).

[24] Letter from S. Walthall, Acting Chief Counsel, SBA Office of Advocacy, to L. Jackson, Office of the Administrator, EPA (Apr. 20, 2010).

[25] Id.

[26] Id. at 4-7.

[27] Id. at 6.

[28] Id.

[29] Id. at 8.

[30] EPA’s Unopposed Motion for Partial Vacature of the Final Rule, Remand of the Record, to Vacate Briefing Schedule, and to Hold the Case in Abeyance, No. 09-4113 (Aug. 13, 2010).

[31] Id. at 4-5.

[32] Id. at 6.

[33] Id. at 8-9.

[34] Order on EPA’s Unopposed Motion for Partial Vacature of the Final Rule, Remand of the Record, to Vacate Briefing Schedule, and to Hold the Case in Abeyance, No. 09-4113 (Aug. 21, 2010).

[35] Order on Petitioners’ Unopposed Motion for Clarification or Reconsideration of the August 24, 2010 Order, No. 09-4113 (Sept. 20, 2010).

[36] For a description of Washington’s draft permit, see J. Kray, Proposed Washington State Stormwater Permit Imposes New Requirements for Construction Dischargers, Marten Law Environmental News (Aug. 20, 2010).

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