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Legal Update

Construction and Development Industry Receives New and Costly Pollutant Control, Monitoring and Reporting Requirements

22 December 2009
Mayer Brown Legal Update

The United States Environmental Protection Agency (EPA) has issued a rule that potentially will have a significant impact on construction and development sites nationwide. The rule will impose new pollutant control, monitoring and reporting requirements on a multitude of sites. The requirements will be applied via the stormwater permitting process and are expected to cost the industry nearly $1 billion annually once fully implemented. Noncompliance with the rule can be costly, as large penalties for permit violations may be imposed. The regulations will take effect on February 1, 2010. The rule’s details are summarized below.

Issuance and Effective Date

The rule was issued on November 24, 2009 and establishes Clean Water Act technology-based Effluent Limitations Guidelines1 and New Source Performance Standards2 (NSPS) for the construction and development (C&D) point source category under the National Pollutant Discharge Elimination System (NPDES). Essentially, the rule requires construction site owners and operators to implement erosion and sediment control measures and pollution prevention practices in discharges from their sites. In addition, beginning in August 2011, a numeric standard for turbidity (which measures the sediment and other pollutants in a discharge) will be imposed on certain NPDES-permitted discharges. The rule was published in the Federal Register on December 1, 2009 and will take effect on February 1, 2010. All general and individual NPDES permits issued by the EPA, state or local regulators thereafter will need to incorporate the rule’s requirements. The rule is available at

Covered Entities

The C&D point source category covers firms classified under North American Industry Classification System (NAICS) codes for the Construction of Buildings (NAICS 236) and Heavy and Civil Engineering Construction (NAICS 237). Activities addressed under NAICS 236 include residential, nonresidential, industrial, commercial and institutional building construction. Heavy and civil engineering construction, NAICS 237, includes utility systems construction (water and sewer lines, oil and gas pipelines, power and communication lines), land subdivision, highway, street, and bridge construction and other heavy and civil engineering construction. The rule specifically provides that other types of entities not included under NAICS 236 or 237 could also be impacted.

Key Requirements

The rule imposes three key requirements on covered entities:

  • Non-Numeric Effluent Limitations: The rule requires construction site owners and operators to implement a range of erosion and sediment control measures and pollution prevention practices designed to control pollutants in discharges from construction sites. Specifically, permittees are required to design, install and maintain effective erosion and sediment controls, implement soil stabilization activities and minimize the discharge of pollutants from dewatering trenches and excavations. The rule also prohibits discharges of certain types of wastewater and certain materials used in equipment operation, maintenance and washing.

  • Numeric Limitation on Turbidity: The rule imposes a numeric limit of 280 nephelometric turbidity units (NTUs) on daily turbidity at all construction sites that disturb 10 or more acres at one time regardless of site-specific conditions. Compliance with the turbidity limit will require daily monitoring, sampling and reporting. For construction sites that disturb 20 acres or more at one time, the limit will become effective in August 2011. For all other subject sites, the limit becomes effective in February 2014. Interstate natural gas pipelines are excepted from the turbidity limit. See 74 FR 63019, 63057-58.

  • New Source Performance Standards: The rule also imposes NSPS that track the effluent limitations described above. These standards are designed to reflect the greatest effluent reductions achievable based on the best available demonstrated control technology (BADT). EPA identified passive treatment systems as BADT because they are thought to be more cost-effective and require less maintenance than active treatment systems. See 74 FR 63021, 63058.

Criticisms of the Rule

EPA estimates that the rule will reduce the yearly sediment discharges by about four billion pounds, producing monetized benefits of $369 million per year. However, by EPA’s own estimates, these benefits will come at a cost of $953 million per year once the rule is fully implemented. Thus, EPA estimates reflect annual costs of the rule exceeding anticipated monetized benefits by $584 million. EPA suggests that these numbers do not paint the full picture since there will be additional benefits that it was not able to monetize such as increases in property value near water bodies, reduced flood damage and reduced cost of ditch maintenance.

Noncompliance with the rule also may be costly as penalties could extend to $37,500 per violation per day. The rule notes that exceptions for noncompliance may be permitted in limited circumstances where technical implementation of the rule’s requirements is not feasible.

For more information about this rule, please contact your usual Mayer Brown contact, a member of the Mayer Brown Environmental practice, or Sue Charles +1 312 701 8928 directly.

1. Effluent Limitation Guidelines are developed by EPA on an industry-by-industry basis using its assessment of the best available technology that is economically achievable for that industry. EPA then sets regulatory requirements for a particular industry based on the performance of that technology. Although effluent limitations are based on the performance of specific technologies, applicable regulations do not require use of a specific control technology.

2. NSPS are intended to reflect effluent reductions that are achievable at new sources based on the best available demonstrated control technology. In developing NSPS, EPA is required to consider the cost of achieving the effluent reduction and any non-water quality environmental impacts and energy requirements.

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