EPA Wetlands Permitting Rule Makes State Plans ‘Unattractive’

Alaska’s plan to take over a federal wetlands dredge-and-fill permitting program is becoming “unattractive” because of a proposed EPA regulation that would impose judicial review requirements on states and on the uncertain scope of wetlands protected under the Clean Water Act, Alaska officials say.

The Environmental Protection Agency in July unveiled the proposed rule that the agency said would help “streamline” requirements for states to assume control of dredge-and-fill permitting. The proposed rule would support “co-regulator” status with states over the discharge of dredged or fill material into federally protected waters, EPA said in its announcement.

But the US Supreme Court’s May ruling in Sackett v. EPA, which lifts Clean Water Act protections on large swaths of wetlands nationwide, is a disincentive to take over the Clean Water Act Section 404 dredge-and-fill permitting program, Randy Bates, director of the Alaska Department of Environmental Conservation’s water division said in an interview.

The program aims to protect waters of the US, or WOTUS, from pollution caused by dredge-and-fill operations associated with mining, housing, and other development.

So far, only Florida, Michigan, and New Jersey have assumed control of federal dredge-and-fill permitting. Nebraska and Maryland have also considered taking over the program, which is administered by the Army Corps of Engineers in 47 states.

Nebraska officials also say the proposal’s judicial review requirements could hinder the state’s ability to take over dredge-and-fill permitting there.

EPA didn’t respond to a request for comment.

Judicial Review and Standing

Proposed requirements for judicial review and the public’s standing to challenge a state-issued dredge-and-fill permit may be a deal-breaker for Alaska, said Julie Pack, Alaska Assistant Attorney General.

The EPA wants states to provide judicial review of decisions to approve or deny dredge-and-fill permits. The agency also wants to require states to prevent the losing party in a permit challenge from having to pay all attorneys’ fees regardless of the merits of the challenge.

The agency said in the proposal that those provisions would maximize public participation in the permitting program and ensure states fully comply with the Clean Water Act.

But Alaska courts would have to rewrite their rules to comply, Pack said.

“The fact that they would require a state to have certain levels or types of conditions in their state court in order to have a litigant have their day in court—it’s a sign there’s something legally wrong,” Pack said.

The proposal would also prevent states taking on the 404 program from limiting permit challenges to state court, possibly forcing states to rewrite standing rules in their courts, Bates said in comments submitted to the EPA in mid-October.

“EPA all but guarantees that states whose courts do not already utilize EPA’s preferred standing rules will be unable to assume the program,” Bates wrote.

Nebraska Department of Environment and Energy Director Jim Macy echoed those concerns in comments it submitted to the EPA on Oct. 13. He told the agency the proposed judicial review and standing requirements violate the Clean Water Act and would impede the state’s ability to assume the permitting program. Nebraska officials declined to comment.

Alaska has reasonable concerns about the EPA’s proposal, said Rafe Petersen, partner at Holland & Knight LLP in Washington.

“EPA wants to mandate certain jurisdictional requirements for courts in state-assumed programs,” he said. “They will reject any state that has fee-shifting requirements or what they consider to be ‘narrow standing restrictions.’”

“I don’t see this as the province of EPA to make these decisions,” Petersen said.

Effects of Sackett

The fallout from Sackett v. EPA, which defines federally protected wetlands as only those with a continuous surface connection to large rivers, lakes, and seashores, is also discouraging states from taking over dredge-and-fill permitting.

The scope of the program shrank this year after the ruling, which reduced the wetlands that qualify as WOTUS under the Clean Water Act. The EPA and the Army Corps said that the agencies would determine on a case-by-case basis whether any given wetland qualifies as WOTUS.

“Sackett takes a lot of those wetlands out of federal control and put it in state control,” Pack said. “That’s something that would affect Alaska’s motivation for assuming the 404 program.”

That’s because assuming a small area of permitting control may not necessarily be worth the state’s investments in starting up a new wetlands permitting program, Bates said.

“We’re a little surprised how far they went on some of the provisions that make it unattractive to assume a program like this,” Bates said.

Maryland, which has begun investigating possible assumption of the 404 permitting program, outlined other concerns about the proposed regulation in comments submitted to the EPA in October. Maryland officials did not respond to multiple requests for comment.

The EPA should provide states with financial support to assume the 404 permitting program, D. Lee Currey, director of the Water and Science Administration of the Maryland Department of Environment, wrote in comments submitted to the agency.

Maryland also worries that a provision of the rule that retains federal control over waters and wetlands within 300 feet of a large water body’s high-water mark would needlessly fragment wetlands between state and federal jurisdictions, Currey wrote.