Ohio EPA Limits Use of Expedited Wetland/Stream Permitting to Certain Areas of the State

Developments that have small impacts to wetlands (typically around 1/2 acre or less) or streams (typically around 300 feet or less) have been able to qualify for expedited permitting known as Nationwide Permits (NWP).  Projects with greater impacts must obtain individual wetland or stream permits known as a 404 Army Corps Permit and 401 Ohio EPA Water Quality Certification (click here for Basics of Wetland Permitting).

Most developers try to arrange their development projects to stay under NWP thresholds if at all possible due to the time and cost savings associated with expedited permitting, which include:

  • Time Savings- NWP time frame 3-6 months versus 12-18 months for individual 404/401
  • Costs Savings- Permitting preparation range can be from $8,000 to $15,000 or more in cost savings just in permit preparation costs

The process for developing NWPs starts with the Army Corps of Engineers proposing NWP for the entire country under its 404 Clean Water Act authority.  Each individual state has the option of placing restrictions on usage of the NWPs under its 401 Clean Water Act authority.  The NWPs once finalized are effective for five years.

On March 17, 2017, Ohio EPA finalized its 401 water quality certification for the 2017 NWP.  The 2017 new NWPs are effective from March 19, 2017 through March 18, 2022.  

Under the new 401 water quality certification, Ohio EPA has placed significant limits on the use of the expedited permits for impacts to high quality streams in Ohio.  The Agency has developed a color coded map that designates areas into three categories:

  • Ineligible Areas (Purple)- Any impacts to streams in these areas are ineligible for coverage under NWP.  Any project with stream impacts in these areas must pursue an individual 404/401 permit.
  • Possibly Eligible Area (Yellow)-  Any impacts to streams in these areas require additional work before an applicant will be eligible for a NWP.  The applicant must:
    • Take pH values
    • Perform a habitat assessment- Qualitative Assessment Habitat Evaluation Index (QHEI) or Headwater Habitat Evaluation Index (HHEI) assessment of the stream. 
  • Eligible Areas (No color code)- any proposed  impact to streams within the project area are eligible for NWP coverage.

 In Northeast Ohio, the much of the Rocky and Cuyahoga River watersheds are color coded purple (ineligible for NWPs).  These new restrictions will have significant consequences for developers and property owners throughout Ohio.

Federal EPA Budget Doesn't Reflect Stated Priorities

This week, President Trump released his Administration's first federal budget dubbed the "America First- A Blueprint to Make America Great Again."  Under the budget proposal, U.S. EPA current budget would be cut by 31% which amounts to a $2.6 billion dollar reduction.  

This leaves the Agency with $5.7 billion to run its programs which is the lowest amount funding provided U.S. EPA since 1990.  As reported by POLITICO, the proposed budget cuts would force U.S. EPA to layoff 3,200 workers. 

Since 1990, environmental regulation and science has advanced significantly.  As a result, numerous new programs have been added, including: climate change, protection of the Great Lakes, improving air and water quality standards.  

In the early years of environmental regulation the "easy" pollution reductions were achieved first. Additional reductions become much more challenging.  As a result, environmental permitting (NPDES, Title V, New Source Review) has become far more complex.

A drastically reduced workforce at the state and federal level will make implementation of these programs impossible and threaten to compromise the progress made over the last forty years.  The improvements to air and water quality since environmental regulations were implemented in the U.S. are well documented:

  • From 1970 to 2015, aggregate national emissions of the six common pollutants alone dropped an average of 70 percent while gross domestic product grew by 246 percent. This progress reflects efforts by state, local and tribal governments; EPA; private sector companies; environmental groups and others.
  • In the forty years since passage of the Clean Water Act there has been dramatic improvement to U.S. waterways:
    • Only about a third of U.S. water was safe for swimming or fishing. Now, an estimated 65% pass the fishable and swimmable test;
    • Before passage of the Clean Water Act, the country was losing up to 500,000 acres of wetlands per year. With wetland regulations, average wetland losses have fallen below 60,000 acres per year; and
    • Before the Clean Water Act and Safe Drinking Water Act, 30% of tap water samples exceeded federal limits for certain chemicals. According to a 2012 EPA report, 90.7% of U.S. community water systems met “all applicable health-based standards” in 2011.

The President's EPA budget blueprint has a stated goal of shifting authority back to the states for primary implementation of the federal environmental regulations.  The Administration cites to waste as a result of duplication between state EPA's and U.S. EPA.  Here are some of the statements included in the budget blueprint regarding prioritizing delegation of authority and responsibility to the states:

  • Avoids duplication by concentrating EPA’s enforcement of environmental protection violations on programs that are not delegated to States, while providing oversight to maintain consistency and assistance across State, local, and tribal programs. This reduces EPA’s Office of Enforcement
    and Compliance Assurance budget to $419 million, which is $129 million below the 2017 annualized CR level;
  • Supports Categorical Grants with $597 million, a $482 million reduction below 2017 annualized CR levels. These lower levels are in line with the broader strategy of streamlining environmental protection. This funding level eliminates or substantially reduces Federal investment in State environmental activities that go beyond EPA’s statutory requirements.

State Categorical Grants fund core programs, such as implementation of the Clean Air Act, Clean Water Act, hazardous waste regulation (RCRA) and the Safe Drinking Water Act.  The budget blue print calls for a 45% reduction in support to the states to run these programs.  

A recent article in the Columbus Dispatch discussed the potential impacts on Ohio EPA.  As noted in the article, federal funds make up a significant portion of Ohio EPA's operating budget.

After fees for permits, inspections and licenses, federal funding is the Ohio EPA's second-largest source of income, accounting for about $40 million of its $200 million budget.

In 2016, the U.S. EPA awarded its Ohio counterpart nearly $37 million for programs that maintain Superfund sites, restore wetlands, protect the Great Lakes and manage hazardous waste. 

The Administration is missing an opportunity to be more cost effective in implementation of environmental regulation.  The Administration is also losing a significant opportunity to be true to principles of federalism by entrusting the states with greater autonomy with regard to implementation of environmental program.  

If the Administration truly wants to shift power more toward the states, then drastic cuts to federal funds that allow states to implement those federal programs undermines that important policy goal. The danger exists that without adequate funding states cannot meet the increased demands.  In the years to follow, the states inability to be to handle the increased burden will be used by those who champion increased federal oversight to justify taking authority away from the states.  

Confustion Regarding Wetland Nationwide Permits and Regulatory Freeze

On January 20th, President Trump's Chief of Staff, Reince Priebus issued a Memorandum to the Heads of Executive Departments and Agencies imposing a regulatory freeze. There appears to be a lot of confusion among environmental attorneys and consultants as to whether the freeze applies to the Army Corps of Engineers (ACOE) Nationwide Permits (NWP).  

NWP are authorizations to fill wetlands and/or impact streams for certain projects that have limited impacts.  NWP are general permits that allow projects to bypass more complicated and costly individual permitting.  The NWPs are a key authorization necessary to allow projects to move forward. Without effective NWP a project only alternative was to seek an individual 404 permit which takes months.

The freeze applies to recently enacted regulations that had not taken effect by the date of the memorandum.  The new NWP were published in rule on January 6, 2017 but will not be effective until March 19, 2017.  Based upon the publication date, the NWP regulation would be subject to the freeze.

Federal agencies can petition the Office of Management and Budget (OMB) for a special exemption from the regulatory freeze.  The ACOE filed for and was granted an exemption so the 2017 NWP will go into effect on Marcy 19, 2017 which was the original effective date.  The ACOE issued a notification last week that it was granted an exemption from the freeze.

I have seen e-mails and memorandum circulating indicating NWP may not be available this spring due to the freeze.  That now appears not to be the case.  

[Photo courtesy Junior Libby]

Thirty EPA Rules Frozen by New Executive Action

On January 20th, Reince Preibus, President Trumps Chief of Staff, issued a broad regulatory freeze memorandum entitled “Regulatory Freeze Pending Review” halting federal rules that had not yet become effective. All rules covered by the memorandum are suspended for 60 days (March 21, 2017). On January 26, 2017, EPA published a list of 30 rules subject to the freeze.

The vast majority of EPA rules temporarily frozen are actually rules that would lessen regulatory burdens or approve plans for meeting existing standards.  These include: a grant of primacy to Kentucky's Underground Injection Control Program, numerous air plans for compliance with ozone or PM 2.5 air quality standards and attainment designations for areas that now meet air quality standards.

The most significant rule affected by the freeze include:

  • Amendments to EPA's Risk Management Program (RMP)
  • Renewable Fuel Standard's renewable volume obligations
  • Pesticides; Certification of Pesticide Applicators

EPA's recent amendments to the Risk Management Plan (RMP) Rule titled "Accidental Release Prevention Requirements:  Risk Management Programs Under the Clean Air Act."  The RMP amendments, which will be discussed in a later post, increase emergency preparedness requirements at some 12,500 facilities that handle chemicals or hazardous substances.

Another rule impacted is the Renewable Fuel Standard's renewable volume obligations.  As discussed in a recent Bloomberg article, the biofuel industry struck a major victory when the Obama Administration raised 2017 quotas- Renewable Volume Obligations (RVOS)- to new record levels. As discussed in the Bloomberg article, the freeze triggered a sell-off of biofuel credits.

Renewable Identification Numbers (RINs), tracking compliance with 2017 ethanol consumption targets, plummeted 23 percent to 46 cents a piece on Wednesday, the lowest since November 2015, broker data compiled by Bloomberg show.  The credits are attached to each gallon of biofuel.  Once a refiner blends ethanol or biodiesel into petroleum, they can keep the credit to show adherence to the program or trade it to another party.

Finally, the final rule Pesticides; Certification of Pesticide Applicators was also frozen.  EPA states the purpose of the rule was to ensure that persons using certain types of pesticides- Restricted Use Pesticides (RUPs)- were competent to use the product.  The rule creates new certification requirements for persons who want to use RUPs.  According to EPA, the most acutely toxic pesticides or those needing to be applied with special care are classified as RUPs.

Conclusion

While the freeze did have a major impact on the RMP rules, pesticide certification and biofuels, the vast majority or rules affected are likely beneficial.  These majority rules demonstrate compliance with federal air quality standards, allows states to take over implementation of regulatory programs or  approves air quality compliance plans developed by States.

After the temporary freeze most if not all of the rules will likely move forward.  The most likely rules that could be targeted by future Congressional action include the RMP amendments and raise in biofuel volume requirements. 

Ignoring the Need for a Permit Can Lead to Jail Time

U.S. EPA released its December Environmental Crimes Bulletin.  One notable case highlighted involved the failure to  obtain and industrial pre-treatment permit for discharges to the municipal wastewater system.  As set forth in the bulletin, U.S. EPA describes the case as follows:

Thomas H. Faria, Sheffield’s former president and chief executive officer, who pleaded guilty to a felony violation of the Clean Water Act on July 8, 2014. From at least April 2004 to May 2011, under Faria’s leadership, Sheffield discharged polluted industrial wastewater from its New London factory into the municipal sewage system without the required permit and industrial wastewater treatment system. As a condition of his guilty plea, Faria resigned from the company on March 7, 2014, and no longer has any role in its operations or management. On February 13, 2015, Judge Thompson sentenced Faria to three years of probation, a $30,000 fine, and 300 hours of community service. 

As described in the bulletin, U.S. EPA states that the former president of the company was informed by consultants and its own employees that a permit and some pre-treatment was needed to legally continue the indirect discharge of industrial wastewater into the municipal system.  

Evidence the president had knowledge is what likely made U.S. EPA pursue this as a criminal case. However, keep in mind that the Clean Water Act has a criminal negligence standard. Therefore, U.S. EPA has the ability to pursue criminal charges even if it doesn't have specific evidence that company personnel were aware of permitting requirements.  

Here is the criminal negligence provision in 33 U.S.C. § 1319

(c)Criminal penalties

(1)Negligent violationsAny person who—
(A)
negligently violates section 131113121316131713181321(b)(3)1328, or 1345 of this title, or any permit condition or limitation implementing any of such sections in a permit issued under section 1342 of this title by the Administrator or by a State, or any requirement imposed in a pretreatment program approved under section 1342(a)(3) or 1342(b)(8) of this title or in a permit issued under section 1344 of this title by the Secretary of the Army or by a State; or
(B)
negligently introduces into a sewer system or into a publicly owned treatment works any pollutant or hazardous substance which such person knew or reasonably should have known could cause personal injury or property damage or, other than in compliance with all applicable Federal, State, or local requirements or permits, which causes such treatment works to violate any effluent limitation or condition in any permit issued to the treatment works under section 1342 of this title by the Administrator or a State;
shall be punished by a fine of not less than $2,500 nor more than $25,000 per day of violation, or by imprisonment for not more than 1 year, or by both. If a conviction of a person is for a violation committed after a first conviction of such person under this paragraph, punishment shall be by a fine of not more than $50,000 per day of violation, or by imprisonment of not more than 2 years, or by both.

 

EPA Enacts Major Overhaul to Hazardous Waste Generator Requirements

Late last year U.S. EPA enacted the "Hazardous Waste Generator Improvements Rule" which constitutes a major overhaul of the federal hazardous waste regulations (RCRA) that apply to any generator of hazardous waste.  The new rule impacts thousands of businesses, including even small generators of hazardous waste.  EPA estimates that between 424,100 and 676,900 facilities fall under regulation by the rule.

It is possible that the Trump Administration may try to undo the controversial rule as detailed in the previous post.  However, since the final rule has been published in the Federal Register (81 Fed. Reg. 85732) with an effective date of May 30, 2017 it will be more difficult for the new Administration to revoke the rule.

As to timing of these changes, the RCRA program is primarily administered by the states. Therefore, these major changes will not go into effect in Ohio or other delegated states until they are adopted in state rules which will likely not occur until sometime in 2018.

Here is a summary of some of the more notable changes.

Background on Generator Classifications

Generators of hazardous waste may accumulate certain quantities of waste and store hazardous waste on-site without triggering the need to obtain a permit as a Transporter Storage Disposal Facility (TSDF).  The ability to avoid TSDF status and be exempt from needing a permit has been a huge carrot for generators as it avoids more costly cleanup requirements (i.e. RCRA Closure and RCRA Corrective Action) as well as other more stringent regulatory requirements.

The chart below shows the accumulation and storage requirements under federal law for Very Small Quantity Generators (VSQG), Small Quantity Generators (SQG) and Large Quantity Generators (LQG):

Hazardous Waste Generator Requirements

VSQG SQG LQG
Monthly Generation (Per calendar month) up to 2.2 lbs acute hazardous waste or less than 220 lbs of hazardous waste (about 1/2 of a 55 gallon drum) up to 2.2 lbs of acute hazardous waste or between 220 to 2,200 lbs of hazardous waste (about five 55 gallon drums) up to 2.2 lbs of acute hazardous waste or 2,200 or more lbs of hazardous waste
Total Accumulation On-site up to 2.2 lbs of acute or up to 2,200 lbs of hazardous waste up to 2.2 lbs acute hazardous waste or between 220 lbs to 13,200 lbs of hazardous waste (thirty 55 gallon drums) up to 2.2 lbs of acute hazardous waste or equal to or greater than 13,200 lbs of hazardous waste
Accumulation Time None 180 days or 270 days if TSDF is more than 200 miles away 90 days

Click here for a link to an a detailed reference chart from Ohio EPA on RCRA Generator Requirements.  While the quantities and time periods applicable to the three categories of generators remained largely unchanged, the new rule contains provisions regarding the quantity of residues from cleanup of hazardous waste that can be generated under each generator classification.

Adopted- Loss of Exemption for Certain RCRA Violations

In the newly adopted rule, EPA places the RCRA generator regulations into two categories:

  1. Independent Requirements- a violation of regulatory requirement that subjects the violator to enforcement; or
  2. Condition for Exemption- regulations that must be met or the generator may lose its exemption from permitting requirements as a TSDF.  An example of regulations that are "conditions for exemption" include the generation and accumulation limits in the above chart.  However, the new rule expands this category to include other regulations.

The possibility of losing the exemption from TSDF requirements for more minor violations has huge implications for businesses who generate even small quantities of hazardous waste as well as those service companies that transport hazardous waste.  

In the preamble to the rule, EPA asserts this is not a major change because the federal EPA and delegated states maintain enforcement discretion.  However, with so much at stake with regard to triggering TSDF status EPA's statements in the Preamble provide little comfort to businesses.

Adopted- New Generator Classification- Very Small Quantity Generator (VSQG)

All regulations previously applicable to Conditionally Exempt Small Quantity Generators (CESQGs) will now apply to VSQGs.  

Adopted- Definition of Generator Knowledge and Testing Requirements

The new rule contains definitions of each generator classification- VSQG, SQG and LQG.  The new rule adds more detail as to how to determine whether a waste is deemed hazardous or non-hazardous using the company's knowledge of their processes that generate the waste (i.e. "generator knowledge") or through testing of the waste.

For potential characteristic hazardous waste, under the new rule generators must make the determination anytime in the course of the waste's management if its properties change.  Business commented that this could require constant re-evaluation of characteristic hazardous waste.

Adopted- Episodic Generation

One of the potential benefits of the rule is the flexibility provided to remain in the VSQG or SQG classification even if you have a one time episode which would push you into the higher generator classification (i.e. episodic events).  

A VSQG or SQG can have one episodic event per year (with an opportunity for a second).  The waste generated during the episodic event will not be counted toward your generation classification.  

Before taking advantage of the episodic generation provision, the company must notify either U.S. EPA or the delegated state program at least thirty (30) days prior to initiating a "planned episodic event" (i.e. periodic maintenance like a tank clean out).   Or, notify within 72 hours of an unplanned event (i.e. production upset conditions, spills, acts of nature).   The event must conclude within sixty (60) days (i.e. the waste must be taken off-site).

There are special provisions for VSQGs- a) must maintain a RCRA ID number; b) manifest the waste; c) label episodic waste containers; d) identify a emergency coordinator; and e) maintain records associated with the episodic event.

Adopted-  New Emergency Response Requirements

All generators must document that they have attempted to make arrangements with local emergency responders and keep such documentation in the facility's operating record. New and existing LQG must submit "quick reference guides" with key information regarding waste managed at their site to local responders.  

Adopted- Re-Notification of SQG Status

Under current rules, SQG must only notify EPA or the delegated state one time of their SQG status. The new rule requires re-notification every four years unless the state has more frequent notification requirements.  However, U.S. EPA delayed this provision until 2021 to allow states to update their reporting forms.

Adopted- Flexibility for VSQG to Send Waste to LQG under Common Control

The new rule provide greater flexibility to VSQGs allowing them to send hazardous waste to a LQG which is under control by the same company to consolidate the waste before it is sent to a RCRA TSDF. 

Adopted- New Labeling Requirements

Under the rule, EPA will require all containers, tanks, drip pads and containment buildings to be labeled with information pertaining to the the hazardous of the hazardous waste being accumulated.  This labeling requirement includes to satellite accumulation areas and central accumulation areas.  The enhanced labeling requirements do not require the label to include the identity of the contents in the container.

Prior to sending hazardous waste off-site to a TSDF, containers must be marked with the applicable RCRA waste codes or use a bar-coding system that performs the same function.

Adopted- Webinars and Video Courses Deemed Acceptable Training

The new rule will allow generators to satisfy their personnel training requirements through computer-based and electronic training sessions instead of classroom or on-the job training.

Not Adopted- Record Keeping Requirements for all Non-Hazardous Waste Determinations

Under the current rules, every business that generates a solid waste must evaluate the waste to determine if should be classified and managed as a hazardous waste.  Under current rules,  Large Quantity Generators (LQG) and Small Quantity Generators (SQG) must only keep those records when the determination shows the waste is a hazardous waste.  As part of the Generator Improvements Rule, EPA proposed to expand the record keeping requirement to all records pertaining to evaluation of a waste, even when a waste was determined to be non-hazardous.  EPA argued that it has found that generators fail to make accurate hazardous waste determinations 10% to 30% of the time.

If implemented, this would have amounted to a huge expansion of record keeping requirements. The proposal was strongly opposed by businesses during the public comment period.  EPA decided to drop the requirement in the rule. However, while it elected not to finalize this requirement, EPA noted in the preamble to the rule that maintaining records of any determination a waste was non-hazardous was considered a "best management practice." 

How Quickly Can President Trump Unwind Environmental Regulations?

President Elect Trump has vowed to unwind regulations which he believes are dramatically constraining economic growth.  The Obama Administration's environmental regulations are specifically being targeted, including:  the Clean Power Plan, the Waters of the U.S. Rule and ozone regulations. His transition web-page even touts that for every one new regulation enacted his Administration will remove two old regulations.  

Billionaire investor Carl Ichan was given the position of Special Adviser on Regulatory Issues.  As reported on CNBC, Mr. Ichan said this about government regulation when his new position was announced:

"Under President Obama, America's business owners have been crippled by over $1 trillion in new regulations....It's time to break free of excessive regulation and let our entrepreneurs do what they do best: create jobs and support communities."

But just how quickly can the Trump Administration unwind environmental regulations?  What tools does the Administration have at its disposal to reduce or eliminate environmental regulation?

Federal Rulemaking Process

The rulemaking procedures for federal agencies, including U.S. EPA, are governed by the Administrative Procedures Act (APA).  While the APA imposes a formal process for adoption of new rules that naturally slows the pace of federal rulemaking, it also imposes restrictions on the ability to either remove existing regulations as well as stop regulations once they are in process.

The APA (5 U.S.C. Section 553) requires a four step rulemaking process:

  1. Issue a notice of proposed rulemaking;
  2. Receiving comments on the proposed rule;
  3. Issue a final rule; and
  4. Setting an effective date at least 30 days after publication of the final rule n the Federal Register.

Once a rule has completed this four step process, it becomes much more difficult to remove or prevent the rule from going into effect.  Below are some of the administrative, legislative and legal strategies the Trump Administration may employ to reduce and/or eliminate environmental regulation.

Executive Order to Stop Regulations in Process

On the first day of office, President Trump can have a memorandum issued directing all federal agencies, including the U.S. EPA, to freeze current rule making efforts.  Similar memorandums were issued on the first day by Bush and the Obama Administrations.  But the APA has limits on the authority to derail current rulemaking efforts.

A similar memorandum was issued on January 20, 2001, by Andrew Card, President Bush's Chief of Staff.  See, 66 Fed. Reg. 7702 (Jan. 24, 2001) The memo directed executive agencies to withdraw rules not yet published and to postpone the effective dates of public regulations. However, prior Court precedent forced agencies to go through proper APA procedures prior to withdrawing or delaying rules. 

In Natural Resources Defense Council, Inc. v. EPA, 683 F.3d 752 (3d Cir. 1982) the Court specifically addressed whether indefinite postponement of an EPA rule would violate the APA.  At issue was an EPA rule that had completed the four-step APA process with an effective date.  An Executive Order was issued to suspend the effective date of certain rules to reconsider the costs and benefits of the new rule.  The Court held that such a postponement was tantamount to rulemaking itself and the four step APA process would need to be completed to delay the effective date of the rule.

A GAO study showed that the Card memorandum resulted in the delay of the effective date of 90 rules and 15 rules still had not gone effective after one year from the date of issuance of the memorandum.  See, U.S. General Accounting Office, GAO-02-370R, Feb. 15, 2002.

While the Trump Administration can delay rules in process, past precedent shows that executive authority to stop a rule in process is does have constraints.

Slow the Pace of New EPA Regulations

The Trump Administration can also direct U.S. EPA to be cautious in adopting any new regulations. Certainly the new Administration can reduce the number of newly adopted regulations.  A similar action was taken by President Reagan through his Executive Order 12291.  The Order enacted on February 17, 1981, required all agencies perform a "Regulatory Impact Analysis" to determine if the "potential benefits to society for the regulation outweigh the potential costs to society" and the rule with the "least net cost to society" shall be enacted.

President Reagan order did reduce the number of new regulations adopted during his Presidency. However, such an Executive Order cannot prevent all new rulemaking, in particular with regard to U.S. EPA that is statutorily required to adopt certain regulations.

In fact, environmental groups often sue U.S. EPA to force adoption of new regulations.  Such suits were common during the Bush Administration.  Environmental statutes, such as the Clean Air Act and Clean Water Act, contain citizen suit provisions that authorize third parties to compel an agency to perform a mandatory act under those statutes.  See, Clean Air Act, 42 U.S.C. Section 7604(a)(2) and Clean Water Act, 33 U.S.C. Section 1365(a)(2).

However, litigation takes time.  Even if Courts agree and order the U.S. EPA to adopt statutorily mandated regulations, the Trump Administration will have the power to slow pace of newly adopted EPA regulations.

Legislative Options

The Congressional Review Act (CRA- 5 U.S.C. Section 801-808) requires federal agencies to submit rules to Congress for review.  Under the CRA, Congress has the ability to revoke rules through a special joint resolution during the 60 day period following the rules submission to Congress.

While the CRA could be used to revoke rules enacted at the end of the Obama Administration, the process to adopt a special joint resolution is required for each rule to be rescinded.  Therefore, the process is time consuming.  

As discussed in Forbes, another option is to pass legislation such as the RED Tap Act (S. 1944), which would require elimination of one rule for every new rule enacted.  

Current Litigation Involving Obama Administration EPA Rules

Challenges to two of the Obama Administration's signature environmental rules- the Clean Power Plan and the Waters of U.S..- are still pending in the Courts.  The Trump Administration could simply not put on a strong defense to rules currently being challenged.  If the Court invalidates a rule, then the Trump Administration could simply choose not to enact the rule.

Authority to Repeal Existing EPA Regulations

While the ability to delay or revoke rules in process is important, what authority does the Administration have to revoke rules that are currently in place.  Previous Administrations have learned, typically through the courts, that Presidential powers to revoke existing rules is limited.  An existing regulation can only be amended or repealed if the four step APA rulemaking process is followed.  Furthermore, the APA requires the Administration to not act "arbitrary" or "capricious" in revoking or amending a rule.  In other words, the Agency must justify its change in position.  See, FCC V. Fox Television Stations, Inc., 556 U.S. 502 (2009).

A good example of the limits on the ability to revoke prior enacted rules is the Tongass National forest exemption to the U.S. Department of Agriculture's "Roadless Rule" which limited road construction and timber harvesting in national forests.  The Roadless Rule was promulgated under President Clinton.  President Bush created an exemption to the rule that was challenged in Court as arbitrary and capricious under the APA.  After years' of litigation, the Ninth Circuit Court of Appeal overturned the exemption stating the Agency provided insufficient justification for its change in policy.  See, Organized Village of Kake v. USDA, 795 F.3d 956 (9th Cir. 2015)

Conclusion

Clearly, the Trump Administration can slow down the regulatory rulemaking process.  It can also choose not to defend rules currently being challenged in the Courts.  However, under the APA, the Administration cannot simply revoke existing rules without sufficient technical and legal justification.  

Cuyahoga County May End Brownfield Program

After more than ten years of building a brownfield redevelopment program, Cuyahoga County Officials are currently contemplating bringing the program to a close.  Over the last few years significant staff cuts have reduced the amount of resources dedicated to the program.  Now it appears that in 2017 the various incentives available to attract redevelopment to brownfields may no longer be available.  Or, there will be no staff dedicated to run the program.

Hopefully, County Officials will understand the critical need the brownfield programs provide to overcome the major impediments to reuse of old industrial and commercial buildings in the region.  Even with the recent economic development boom in Cleveland there remain hundreds of underutilized or vacant brownfield properties.

One of the most critical needs the County program fills is grant funds to pay for Phase I and limited Phase II environmental assessments through the County's Brownfield Community Assessment Initiative. Under the program, the County would provide up to $5,000 in grant funds for Phase I assessments and up to $35,000 for Phase II assessments.  These incentives help overcome the first major hurdle to brownfield redevelopment- having no information about the condition of the property.  Many developers and businesses aren't willing to front these assessment costs as part of early evaluation of a property.  

The County also provided forgivable loans to help offset environmental cleanup costs.  Under its Redevelopment Ready Program, the County can provide loan funds up to $1 million with 40% of the total loan forgivable if certain criteria are met.  This type of loan was a critical tool in the Miceli Dairy expansion project which was one of the significant brownfield redevelopment projects in Northeast Ohio.  Without County incentives, both assessment grants and a forgivable loan, the project never would have occurred.  The expansion kept and expanded jobs in a critical area in Cleveland.  

The County had offered a wide array of programs and incentives to help renovate vacant buildings and spur brownfield redevelopment.  It took nearly ten years to build up the expertise and incentives which made it a very successful program.  For a full list of the County Brownfield Programs click here.

We can only hope that the new Administration realizes what a critical function a brownfield program plays in an area with a long industrial past and limited space for redevelopment.

Two Trump Administration Environmental Priorities to Help the "Rust Belt"

There is a lot of hyperbole regarding President-Elect Trump's potential environmental agenda. During the campaign there was also a lot made about issues of employment and opportunity in the "Rust Belt" (a term I personally do no like).  Here are two suggestions of how the incoming Trump Administration could bring greater opportunity to the Rust Belt without controversial roll backs of environmental standards.   

  1. Bring Logic to Air Quality Standards and Regulations
  2. Moonshot on Brownfield Redevelopment

Bring Logic to Air Quality Standards and Regulations 

Midwestern states with large populations and a heavy manufacturing base are hit particularly hard by tightening air quality standards for ozone and small particulate matter (p.m. 2.5).  On October 1, 2015, EPA strengthened the National Ambient Air Quality Standards (NAAQS) for ground-level ozone to 70 parts per billion (ppb).  EPA will designate areas in late 2017 based on monitoring data as to whether they meet the ozone standard ("Attainment Areas") or do not meet the standard ("Non-Attainment Areas"). States will have until at least 2020 to achieve compliance with the revised standards. 

As the adjacent map demonstrates, Wisconsin, Michigan, Ohio and Pennsylvania (all key states to Trump's victory) will have significant portions of the state designated as non-attainment areas.  The designations will result in more regulation and restrictions on economic growth.

The good news is that U.S. EPA projects that most areas will be able to reach attainment of the new standards as a result of already promulgated federal regulations for gasoline, autos, power plants, and other sources of emissions. U.S. EPA projects that these already promulgated regulations will bring all but 14 of the 241 counties that currently don't meet the 70 ppb ozone standard into attainment.  However, the bad news is that these reductions will not be achieved until 2025, five years past the ozone deadline.  Furthermore, some Members of Congress are trying to block the federal regulations.

As discussed in a recent Congressional Research Service report on the new ozone standard, some while Members in Congress have objected to the federal standards for motor vehicles, fuels, power plants, and other sources.  However, the net effect of repealing them would be to shift the burden of attaining the ozone NAAQS more squarely in the direction of state and local governments. As detailed in prior posts (here and here), the states have very little ability to improve air quality through state specific regulations under required emission reduction plans (State Implementation Plans- SIPs) to meet the NAAQS.  The federal regulations are far more cost effective.

It's not just new regulations that will hamper economic growth in non-attainment areas, it is also mandated restrictions on economic growth.  Under the Clear Air Act, businesses looking to expand or relocate must pay for more costly emission controls in non-attainment areas.  Also, in non-attainment areas any increase in air emissions associated with a business expansion must be offset by reductions from existing businesses before a permit can be issued that allows the expansion to go forward (i.e. "Offsets").  These requirements push businesses to avoid non-attainment areas reducing opportunities for economic expansion.  

A Trump Administration could bring more logic to this regulatory mish mash by resisting calls to roll back the more cost effective federal regulations and by adjusting attainment deadlines to give states more time to take full advantage of federal regulations already on the books. Such actions would also avoid promulgation of costly new local air regulations that will largely do very little to improve air quality.  

Moonshot on Brownfield Redevelopment

A major focus during the campaign was how to improve our urban centers- finding ways to attract development and jobs to our neglected cities.  A highly effective means of giving a boost to our inner cities would be to energize U.S. EPA's brownfield program as well as other brownfield incentives. 

As detailed in a four part series on this blog, brownfields lead to significant decay, social injustice and loss of opportunity (i.e. jobs).  The cost for businesses to expand in our urban centers is often complicated by the cost to cleanup pre-existing contamination.  Those costs are avoided by moving out of the City and developing on greenfields instead.

While brownfield programs have been successful, they have been wholly inadequate to make a significant difference.  If part of the Trump Administration's massive infrastructure program was directed toward brownfield redevelopment, this could be a major shot in the arm promoting capital investment, cleaning up sites that pose public health issues and creating more jobs for those living in the inner city.  

State of Ohio Pursues Recovery of Incentives

Companies expanding onto brownfield sites need public incentives to make their projects viable.  However, the days when cleanup of contamination by itself could attract public incentives are long over.  Under the new local and State brownfield programs companies must make job commitments and/or improvements to the property to attract government assistance.

When companies work with State and local officials to obtain brownfield incentives they must engage in negotiations regarding what they are willing to commit to as part of the project.  These commitments will often extend 3 or more years out into the future when it becomes more challenging to predict economic and business conditions.

The Dayton Daily News discussed the State of Ohio's pursuit to recover incentives from companies that failed to meet business expansion or development commitments.  The DDN reported:

State officials reviewed 329 economic development deals that concluded in 2015 and found that all but 50 had substantially complied with the terms, such as hitting job creation and retention numbers, training workers and generating new payroll.

If companies fail to live up to their promises, the state may demand repayment or make other changes to the deal. In the 50 cases where targets weren’t hit, the state is moving to clawback a collective $776,000. Some of the biggest take backs are being launched against well-known, big companies — Proctor & Gamble Co., U.S. Steel Corp., and The Dannon Co. — for failing to create or retain promised jobs

This is very relevant to JobsOhio brownfield grants and loans provided to companies to assist with sampling or cleanup at contaminated properties.  The grant agreements for the JobsOhio Revitalization Program include contractual commitments to increase payroll, add jobs or make capital investments to expand the business.  For example, at minimum, JobsOhio typically requires 20 new jobs over a three year period to compete for brownfield cleanup grant funding under its Revitalization Program.

The grant agreement language is somewhat vague as to what happens if the grant commitments are not met by the company.  The language does allow for companies to assert that changing economic conditions resulted in unmet commitments.  However, the contract language does leave open the possibility JobsOhio could request return of the entire brownfield grant provided.

It is important that companies pursuing brownfield incentives be aware of the consequences of not meeting commitments.  It is also important to avoid putting forward unrealistic job or capital investment commitments just to attract upfront grant money.  Companies that over commit open themselves up to clawback by the State of the funds provided as well as publicly being outed for failing to live up to their commitments.