The Nickel Report

Before yesterday only two states had received approval to administer the Clean Water Act (CWA) section 404 program (Michigan and New Jersey), and no state had received approval since 1994.  Now, for the first time in over 25 years, the U.S. Environmental Protection Agency (EPA) has approved the formal transfer of section 404 permitting authority to a third state: Florida.  Once EPA’s approval is published in the Federal Register, the Florida Department of Environmental Protection (FDEP) will “assume” 404 permitting authority from the U.S. Army Corps of Engineers (Corps) in certain waters, significantly altering the 404 permitting process in Florida.  EPA’s decision has broader implications for the 404 program on a national scale, as other states, including Oregon and Minnesota, consider whether to pursue assumption.

The federal CWA generally prohibits the discharge of pollutants into waters of the United States (WOTUS) unless the discharge is otherwise permitted.  CWA section 404 authorizes the Corps to issue permits for the discharge of dredged or fill material into WOTUS.  These permits are generally issued for discharges of fill material associated with infrastructure projects (e.g., highways, airports, pipelines, etc.), wetland restoration and enhancement projects, residential and commercial building, mining, renewable energy projects, and a host of other important economic and environmental activities.  State programs with permitting standards and procedures that are at least as stringent as the federal program may receive approval from EPA to administer the 404 program pursuant to state law, within what is known as state-assumed waters.

Florida submitted an assumption package to EPA on August 20, 2020, seeking approval of a 404 permitting program.  Florida’s 404 program is intended to increase regulatory efficiency and reduce duplication between the state’s existing Environmental Resource Permitting Program (ERP) and the federal 404 program.  In the press release for its final approval, EPA notes that assumption will allow Florida to “more effectively and efficiently evaluate and issue permits under the CWA to support the health of Florida’s waters, residents, and economy.”

EPA’s approval of state assumption will have important implications as outlined below.

• Transition to State Program
  • Effective Date. Florida’s 404 program will become effective when it is published in the Federal Register, which is likely to occur in January 2021, prior to inauguration.
  • Pending Corps 404 Permits. Once effective, all pending 404 applications before the Corps will be transferred to FDEP for processing.
  • Corp-Issued 404 Permits. The Corps will continue to monitor compliance and enforce the terms and conditions of all 404 permits issued prior to the effective date of assumption.

• Scope of Assumed Waters
  • FDEP will administer 404 permits in assumed waters, and the Corps will continue to issue 404 permits in retained waters.
    • Retained waters generally include traditional navigable waters, such as larger navigable rivers, coastal waters, and wetlands adjacent to such waters up to a 300-foot administrative boundary.
      • The Corps will also retain permitting responsibility for discharges of dredged or fill material in WOTUS within “Indian country,” as that term is defined at 18 U.S.C. § 1151.
    • Assumed waters include all other waters of the United States, and in Florida, this generally consists of inland features, such as smaller rivers, streams, creeks, lakes, and their adjacent wetlands.
    • To determine whether a project will need a Corps or FDEP 404 permit, FDEP has developed a map that includes a GIS layer of the Corps’ retained waters. This online tool, can be accessed here.

• Federal Oversight
  • EPA may request to review any state 404 application, and will automatically review certain permit applications, including projects with reasonable potential for affecting ESA-listed or ESA-proposed species or critical habitat, or projects within critical areas established under state or federal law, such as national and state parks.
  • When FDEP receives an objection or required permit condition(s) from EPA, FDEP cannot issue the 404 permit until it has taken steps to satisfy EPA’s objection or incorporate the necessary permit condition(s).
  • If FDEP neither satisfies EPA’s objection nor denies the permit, then EPA must transfer the permit to the Corps for processing.

• State 404 Permits
  • 5-Year Limitation. State 404 permits are limited by statute to 5-year terms.
    • For projects that will take longer than 5 years to complete, FDEP has developed a long-term conceptual planning process.
  • General Permits. FDEP’s 404 program has adopted nearly all of the Corps’ nationwide permits.
    • FDEP’s general permits will be available for activities that cause only minimal adverse environmental effects.
  • Permit Issuer. FDEP, and not the Water Management Districts (WMDs), will issue the 404 permits.
    • FDEP may delegate authority to issue 404 permits to the WMDs in the future, but this would require approval from EPA.

• Jurisdictional Determinations
  • The state will presume that all waters subject to state ERP jurisdiction are jurisdictional for purposes of the 404 permit unless clearly demonstrated otherwise by an applicant.
  • Once a waterbody is deemed jurisdictional by FDEP, the lateral extent of that waterbody will be determined according to state procedures, which are somewhat broader than federal procedures.

• Mitigation Requirements
  • Avoidance and Minimization. FDEP will only consider mitigation after the applicant has taken steps to first avoid, then minimize potential impacts.
    • FDEP will not issue a 404 permit if there is a practicable alternative to the proposed activity which would have less adverse impact on the aquatic ecosystem.
  • No Net Loss. Consistent with goal of no net loss of wetland and other surface waters functions, FDEP will rely on Florida’s Uniform Mitigation Assessment Method (UMAM) to assess lost functions and calculate amount of mitigation required.
  • Hierarchy. Once the quantity of mitigation has been determined, FDEP would likely then consider the mitigation hierarchy: Mitigation banks > In-Lieu Fees > Permittee-Responsible Mitigation (PRM) (watershed) > PRM (on-site/in-kind) > PRM (off-site/out-of-kind)
  • Mitigation Banks. Mitigation banks and in-lieu fee programs would still be approved by the Corps in accordance with 33 C.F.R. Part 332.
    • 404 mitigation banks approved by the Corps may provide compensatory mitigation credit for FDEP 404 permits.
  • Permittee-Responsible Mitigation. If PRM is part of the overall mitigation plan, it must include (i) monitoring, (ii) adaptive management, and (iii) long-term protection provisions

• Environmental Reviews
  • Endangered Species Act. FDEP will engage in an extensive technical assistance process with the U.S. Fish and Wildlife Service, the Florida Fish and Wildlife Conservation Commission, and EPA to address potential impacts to federally-listed species and designated critical habitat.
  • 404(b)(1) Guidelines. FDEP must consider certain criteria before issuing the 404 permit, including practicable alternatives to the proposed activity, as well as, aesthetic, cumulative, and secondary impacts to the aquatic ecosystem.
  • National Environmental Policy Act. Because the issuance of a state 404 permit is not a federal action, FDEP would not be subject to NEPA requirements.

If Florida’s program is successful, it could provide a roadmap for other states to assume 404 permitting.  For example, Oregon has indicated that it seeks to gain approval from EPA for a partial section 404 permitting program.  Under Oregon’s proposed approach, the state would administer 404 permitting for mining activities, the creation and operation of mitigation banks, and development activities within an urban growth boundary (excluding farming, ranching, or forestry activities).  In addition, for those states that already administer a permitting program that overlaps with the federal 404 program (e.g., Minnesota), the incremental increase in costs of administering the program could be relatively small.