Good afternoon and welcome to the Senate Committee on Small Business and Entrepreneurship’s hearing assessing the economic and regulatory impacts of the EPA and Army Corps’ proposed rule to redefine the term “waters of the United States,” which will be finalized in the very near future.

The purpose of this hearing is to examine the impact that the proposal will have on small businesses, as well as the Agencies’ egregious circumvention of the very regulatory process set in place to protect them.

Specifically, EPA and the Corps concluded that the proposed rule will not have a significant economic impact on a substantial number of small entities. They also concluded that the proposal will have no direct impacts on small entities.

It is outrageous that this Administration would have us believe that the proposal would not have a substantial, direct impact on small businesses. It is so outrageous, in fact, that I will soon introduce a Sense of the Senate resolution condemning the Administration’s circumvention of this important process. I look forward to a strong, bipartisan Committee vote on that resolution.

Regarding the content of the rule, the sweeping language in the proposal represents a direct threat to private property rights. By expanding the types and numbers of waterbodies subject to federal control, the agencies will further expand their authority to tell homeowners and small businesses what they can do on their own land.

It provides an opening for the federal government to increase its role in local land use planning and decisions. State and local zoning commissions will see their roles displaced by bureaucrats in Washington, D.C. who do not truly understand the implications of the policy changes that they will be enforcing.

It will lead to costly litigation and expand the ability of radical environmental groups to sue landowners over how they manage and use their property.

Additionally, the rule as proposed will have a significant negative impact on agriculture, and particularly small family farms.

On October 1, 2014, the Office of Advocacy, an independent office of the Small Business Administration, sent a letter to the EPA and Army Corps that was highly critical of their finding that the proposal will not have a significant economic impact on a substantial number of small entities.

The Office of Advocacy’s role is to represent small entities in the federal rulemaking process. In Fiscal Year 2014 it achieved regulatory cost savings to small businesses of more than $4.8 billion. A substantial part of these savings – $4.6 billion – arose from changes to proposed EPA regulations.

Under the Regulatory Flexibility Act, when an agency finds that a proposed rule will have a significant economic impact on a substantial number of small entities, it must evaluate the impact, consider alternatives, and in the case of the EPA, convene a Small Business Advocacy Review panel to consider the input of the Office of Advocacy and the small business community.

But by certifying that the rule will not have a significant economic impact on a substantial number of small entities, the EPA and the Corps effectively shut them out of the rulemaking process.

In its October 1, 2014 letter, Advocacy unequivocally stated, and I quote, “Advocacy believes that EPA and the Corps have improperly certified the proposed rule under the Regulatory Flexibility Act because it would have direct, significant effects on small businesses. Advocacy recommends that the agencies withdraw the rule and that the EPA conduct a Small Business Advocacy Review panel before proceeding any further with this rulemaking.”

As we know, EPA chose to ignore that input. As Chairman of the Small Business Committee, I am committed to ensuring that we do not allow such conduct to proceed unchecked.

Thank you all for being here today, and I look forward to hearing from our witnesses.

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