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Ruling Muddies Clean Water Act Permitting Program
 If a recent appeals court decision is allowed to stand, builders in the West could find themselves having to contend with an onerous layer of Endangered Species Act requirements in order to receive Clean Water Act (CWA) permits.
An Aug. 22 decision by the U.S. Ninth Circuit Court of Appeals affects a section of the CWA that allows states to assume responsibility for issuing storm water discharge permits if they meet nine specific criteria. The ruling also pertains to a section of the Endangered Species Act that requires federal agencies to consult with the Fish and Wildlife Service to ensure that their actions don’t have a negative impact on endangered species or their habitat.
In a two-to-one decision, the court vacated the Environmental Protection Agency's approval of Arizona’s CWA permitting program. As a result, builders in Arizona who need clean water permits will apparently have to obtain them from the EPA, and in many cases they may be required to go through the Fish and Wildlife Service's endangered species consultation process.
“As a result of this ruling, builders in Western states may face very different regulatory conditions from builders in the south central United States,” said NAHB President David Wilson. “The Ninth Circuit had an opportunity to clarify the law. Instead, it disagreed with its sister circuit court and created confusion and muddled law.”
The ruling conflicts with a 1998 decision by the Fifth Circuit Court of Appeals that didn’t allow the EPA to transfer its CWA permitting program to the State of Louisiana because it included ESA consultation requirements that were not among the nine criteria set forth in the law.
“This decision means that home builders in Arizona may face additional regulatory hurdles that are very costly,” said Wilson. “It’s frustrating, because these burdensome regulations add significantly to the cost of each new home but provide no meaningful environmental benefit.”
In a dissent, Justice David R. Thompson wrote: “Here, the EPA did not have discretion to deny transfer of the pollution permitting program to the State of Arizona; therefore its decision was not ‘agency action’ within the meaning of Section 7 of the Endangered Species Act. The Clean Water Act, by its very terms, permits the EPA to consider only the nine specified factors. If a state’s proposed permitting program meets the nine enumerated requirements, the EPA administrator ‘shall approve’ the program.”
EPA officials have not indicated whether the agency will seek a re-hearing of this decision before a full panel of the Ninth Circuit Court of Appeals or request a review by the Supreme Court.
NAHB is working aggressively to shape the government’s response to this decision, Wilson said. “It is simply inappropriate that under a federal program different states would be operating under completely different regulatory frameworks.”
For more information, e-mail Tom Ward at NAHB, or call him at 800-368-5242 x8230.
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