Alaska, Nebraska Wetlands Takeover Tied to Federal Waters Ruling

Alaska and Nebraska are the only states that say they’re actively pursuing taking over the EPA’s dredge-and-fill permitting program for waters and wetlands as the agency prepares to update its rule governing such takeovers.

The states’ fervor to assume control of wetlands permitting within their borders is partly linked to the Supreme Court’s upcoming ruling in Sackett v. EPA. The states are watching to see whether the justices narrow the number of wetlands that fall under federal protections as waters of the US, or WOTUS.

States seeking to take over wetlands dredge-and-fill permitting hope it will speed up development because builders could avoid having to obtain a costly and time-consuming federal permit from the Army Corps of Engineers. If the high court shrinks federal protections for wetlands, taking over the federal wetlands permitting program will be easier, states say.

“If it reduces WOTUS, it reduces the permitting actions the DEC would have to do,” said Julie Pack, general counsel for the Alaska Department of Environmental Conservation, referring to the Supreme Court. “We’re quite excited for what effects that will have on our program once we assume.”

The Environmental Protection Agency’s Clean Water Act Section 404 dredge-and-fill permitting program regulates construction that could pollute or destroy federally protected waters.

The EPA and Army Corps of Engineers, which issues federal dredge-and fill permits in most states, have granted just three states assumption of the program from the agencies: Florida, Michigan, and New Jersey.

The EPA is proposing to clarify how states can take control of 404 permitting. The agency would specify what kinds of waters would remain under Army Corps permitting authority and which ones the states would have authority over. The agency expects to finalize the rule in 2024.

A state takeover of 404 permitting will cut overlap and duplication between state agencies and the Army Corps, said Carla Felix, spokeswoman for the Nebraska Department of Environment and Energy.

Nebraska already issues other Clean Water Act permits, and taking over the 404 program will fast-track economic development and infrastructure projects, she said.

In Alaska, cutting the Army Corps out of permitting could expedite construction projects, letting builders deal with obtaining permits from just a single state agency instead of also having to work with federal regulators before construction begins, said Shannon Miller, environmental program manager for the Alaska DEC.

It also would allow the state to create “general permits” for certain kinds of projects, so if they meet state standards for wetlands protection, they would automatically get a permit, she said.

Nebraska has already staffed its 404 permitting program, Felix said. But neither Alaska nor Nebraska has yet submitted its 404 assumption applications to the EPA, the agency said.

Sackett to Motivate States

The outcome of the Sackett case could drive more states to pursue taking over 404 permitting if the court narrows the wetlands that count as WOTUS, said Rafe Petersen, a partner at Holland & Knight LLP in Washington.

“I would assume the red states might want to take it on,” he said.

Party control of state government hasn’t been a direct indicator of early interest in 404 program assumption so far.

Oregon, Virginia, Wisconsin, Minnesota, and Arizona, have explored taking over 404 permitting in the past, but each of them has either decided not to pursue assumption of the program or tabled it for now.

Most recently, Minnesota was making progress toward 404 assumption under a 2019 state law directing state agencies to begin completing an application to the EPA to take over the permitting program. But that legislation has lapsed, said David Weirens, assistant director of the Minnesota Board of Water and Soil Resources.

“We are not aware of proposed legislation that would direct this work to continue,” Weirens said. “Absent an additional legislative directive, no further work is being contemplated on the state’s application for 404 assumption.”

Oregon convened a work group to explore 404 assumption in 2019, but the legislature didn’t act, Ali Ryan Hansen, communications director for the Oregon Department of State Lands, said in March.

Likewise, the Arizona Department of Environmental Quality chose not to pursue 404 assumption in 2020 after public feedback favored maintaining the Army Corps’ permitting process.

In Wisconsin, a governor-appointed study council recommended against 404 assumption in a 2022 report, said Dan Helsel, director of the state Department of Natural Resources waterways and wetlands program.

The report says that if EPA moves ahead with its new rulemaking and modernizes 404 assumption, Wisconsin will have a strong incentive to take over wetlands permitting.

Virginia isn’t currently considering 404 assumption, said Aaron Proctor, spokesman for the Virginia Department of Environmental Quality.

A Costly Burden

States seeking 404 assumption are taking on an entirely new permitting program that requires a lot of money and staff, and letting the Army Corps issue the 404 permits avoids those costs, Petersen said.

That’s a pressure that states vigorously pursuing a takeover of wetlands permitting are feeling— especially in Alaska, where a push to take over the 404 program hangs on the legislature’s budgetary process.

The Alaska DEC is asking the state legislature for $4.9 million to begin the 404 program assumption process in fiscal 2024, including hiring an additional 28 staffers, said Randy Bates, the Alaska DEC’s director of water.

Bates said he’s worried the state legislature may leave 404 assumption out of the state’s fiscal 2024 budget, and if it does, the future of the takeover is “TBD.”

“We think it’s an appropriate investment in the state’s future,” he said.