Approval of Revisions to the State of Michigan's Federally Approved Wetland Program Resulting From the Reorganization of the Michigan Department of Natural Resources

ENVIRONMENTAL PROTECTION AGENCY

[FRL-5111-7]

Approval of Revisions to the State of Michigan's Federally

Approved Wetland Program Resulting From the Reorganization of the

Michigan Department of Natural Resources

AGENCY: United States Environmental Protection Agency (USEPA).

ACTION: Notice of approval.

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SUMMARY: Notice is hereby given that the United States Environmental

Protection Agency (U.S. EPA) approves the revisions to the State of

Michigan's federally approved wetland program resulting from the

reorganization of the Michigan Department of Natural Resources (MDNR)

by Executive Order 1991-31.

EFFECTIVE DATE: November 25, 1994.

FOR FURTHER INFORMATION: Douglas Ehorn, Chief, Wetlands and Watersheds

Section, U.S. EPA, Region 5, 77 W. Jackson (WQW-16J), Chicago,

Illinois, 60604. (312) 353-2308

SUPPLEMENTARY INFORMATION:

I. Background

On October 2, 1984, EPA published notice of its approval of the

State of Michigan's Section 404 wetlands program pursuant to Section

404(g)(1) of the Clean Water Act, 33 U.S.C. 1344(g)(1). 49 FR 38948.

Michigan's program became effective October 16, 1984. 49 FR 38948

(October 2, 1984). 40 CFR 233.60.

40 CFR 233.16 requires that EPA review and either approve or

disapprove of any revisions to a state's Section 404 wetlands program

based upon whether the revisions comply with the requirements of the

Clean Water Act and its implementing regulations. 40 CFR 233.16(d)(3)

provides that, if EPA determines that a program revision is

substantial, EPA must provide public notice and an opportunity for

public hearing on the revision.

Michigan's original program description submitted to EPA on October

26, 1983 specified that the Michigan Department of Natural Resources

(MDNR) was the agency responsible for implementing the permitting and

enforcement components of Michigan's Section 404 wetlands program. The

Michigan Water Resources Commission (MWRC) was specified as the agency

responsible for insuring that wetland permitting was coordinated with

state, interstate and federal-state water related planning and review

processes.

On November 8, 1991, the Governor of Michigan issued Executive

Order 1991-31. Executive Order 1991-31, which became effective on

September 2, 1993, provides that:

All the statutory authority, power, duties, functions and

responsibilities of the Commission of Natural Resources and the

Department of Natural Resources * * * and of the director of the

Department of Natural Resources and of the agencies, boards and

commissions contained therein * * * are hereby transferred to the

director of a new Michigan Department of Natural Resources, by a

Type II transfer, as defined by Section 3 of Act No. 380 of the

Public Acts of 1965, being Section 16.103 of the Michigan Compiled

Laws.

Executive Order 1991-31 also provided that the responsibilties and

authorities of the MWRC were transferred, via a Type III transfer, from

the Water Resources Commission to the director of a new MDNR.

Pursuant to EPA's request, Michigan submitted numerous documents to

EPA that were necessary for EPA to determine whether the revisions to

Michigan's Section 404 wetlands program resulting from Executive Order

1991-93 would comply with the requirements of the Clean Water Act and

its implementing regulations and whether such revisions were

substantial. According to Michigan, there had been no substantive

changes in Michigan's Section 404 wetlands program as a result of

Executive Order 1991-31. Instead, according to Michigan, Executive

Order 1991-31 merely resulted in some reorganization within MDNR.

Michigan certified in an Attorney General's Statement that all of the

state authorities included in Michigan's original October 26, 1983

program description remained in full force and effect after issuance of

Executive Order 1991-31.

Based upon its review of the documents submitted by Michigan, EPA

made a preliminary determination that there had been no substantial

revisions in Michigan's Section 404 wetlands program as a result of

Executive Order 1991-31. However, because there appeared to be a

significant amount of public interest in this matter, EPA chose to seek

public comment on its determination. Consequently, on April 21, 1994,

EPA published a notice in the Federal Register of EPA's preliminary

determination and stated that ``EPA is seeking public comment

concerning whether any substantial revisions to the State wetlands

program were effected by the MDNR reorganization, and comment on Agency

approval or disapproval of any revisions to Michigan's wetlands program

as outlined in Executive Order 1991-93 and MDNR's December 15, 1993

submittal.'' The notice further emphasized that ``EPA is not seeking at

this time, public comment on unrelated issues regarding Michigan's

wetland program.'' Finally, the notice stated that copies of Michigan's

description of the wetlands program, related correspondence and EPA's

findings of no substantial revisions would be available for public

inspection at two locations in Michigan.

II. Comments

In response to the April 21, 1994 notice, EPA received comments

from nine commenters who disagreed with EPA's preliminary determination

that Executive Order 1991-31 did not substantially revise Michigan's

wetlands program. In addition, the United States Department of

Interior, Fish and Wildlife Service, stated that it agreed with EPA's

preliminary determination that Executive Order 1991-31 did not

substantially revise Michigan's wetland program and offered two

additional comments. EPA's detailed responses to all comments received

are set forth in a document entitled ``Response to Comments Raised

Regarding Revisions to Michigan Wetland Program.'' This document can be

obtained from Mr. Douglas Ehorn at the address and phone number listed

above. A summary of the comments and EPA's responses to the comments is

provided below.

There were several comments that Executive Order 1991-31 has

revised the public participation requirements in Michigan's Section 404

wetlands program. Under 40 CFR 233.16(d)(3), changes in public

participation requirements must be considered to be substantial

changes. These commenters, therefore, believe that Executive Order

1991-31 has effected a substantial revision in Michigan's wetland

program.

The public participation requirements for state Section 404 wetland

programs are set forth at 40 CFR 233.32-34. These provisions contain

specific requirements regarding the need for, timing of, information

contained in, method of providing, and persons to be provided public

notice of permit applications, draft general permits and consideration

of major permit modifications (40 CFR 233.32); the need for and method

of conducting public hearings (40 CFR 233.33); and the manner in which

public comments must be considered and included in the official record

in making permit determinations (40 CFR 233.34). Michigan, in its

October 26, 1983 program description, demonstrated that the MDNR had

authority to comply with all of the above requirements.

As described above, MDNR is still the authority responsible for

processing and making determinations regarding wetland permit

applications in Michigan. None of the public participation requirements

that were applicable to MDNR in processing and making determinations

regarding wetland permit applications have changed as a result of

Executive Order 1991-31. Therefore, EPA did not receive any comments

that suggested that the public participation requirements applicable to

MDNR in the processing and issuance of wetland permits had been changed

or were in any way not in compliance with the requirements of the Clean

Water Act and the public participation requirements of 40 CFR 233.32-

34. Instead, the comments on public participation focussed on three

other issues.

First, one commenter stated that public participation in the

development of administrative rules implementing Michigan's wetlands

program has changed in that the Director of the MDNR now establishes

the administrative rules by which the program is administered rather

than the Michigan Natural Resources Commission (``MNRC''). This

commenter stated that the Director of MDNR, unlike MNRC, is not subject

to Michigan's Open Meetings Act and therefore the Director can make

final decisions on administrative rules pertaining to the wetlands

program in closed meetings and the substance of those meetings need not

be recorded. The commenter suggested that this represents a significant

change from the way in which MNRC developed administrative rules for

Michigan's wetlands program.

EPA does not agree that this apparent change in the manner in which

administrative rules are developed represents a change in Michigan's

Section 404 wetlands program. A state's federally authorized Section

404 wetlands program consists of the statutes and rules which govern

the state's program. EPA has no role to play in overseeing or dictating

how those statutes and rules are developed. Instead, EPA's role is to

determine whether the statutes and rules which comprise the program

comply with minimum federal requirements for authorized programs,

regardless of how the state has developed those statutes and rules. If

the state desires to change those statutes or rules, EPA has no role in

determining the manner in which those statutes or rules are changed, so

long as the state submits the proposed changes to EPA for review.

Consequently, the applicability or inapplicability of the State's Open

Meetings Act to changes in administrative rules does not represent a

change in Michigan's Section 404 wetlands program.

The second reason suggested by commenters that Executive Order

1991-31 effected a change in public participation requirements pertains

to changes involving the manner in which Michigan ``assure[s] that any

state * * * whose waters may be affected by the issuance of a permit

may submit written recommendation to the permitting state'' and

``assures continued coordination with Federal and Federal-State water

related planning and review processes'' as required by Sections

404(h)(1)(E) & (H) of the Clean Water Act, 33 U.S.C.Sec. 1344(h)(1)(E)

& (H). In Michigan's original program description submitted to EPA on

October 26, 1983, Michigan stated that it could assure such

coordination because ``[t]he broad powers that were statutorily

allotted to Michigan's Water Resource Commission [``MWRC''] are more

than sufficient'' to provide such assurances.

Commenters noted that Executive Order 1991-31 abolished MWRC and

transferred its responsibilities and authorities to the Director of

MDNR. These commenters claimed that MWRC was subject to the Open

Meetings Act while the Director of MDNR is not. Consequently, these

commenters suggest, there has been a change in the opportunities for

public participation in the ``Federal and Federal-State water related

planning and review processes.'' These commenters go on to suggest

that, because Michigan's Section 404 wetlands program must assure

coordination with these planning processes, a change in the public's

opportunity to participate in those planning and review processes

constitutes a change in the wetlands program's public participation

provisions. EPA does not agree that changes in Federal and Federal-

State planning and review processes in the State of Michigan are

changes in Michigan's Section 404 wetlands program.

Section 404(h)(1)(E), 33 U.S.C. 1344(h)(1)(E), requires that state

wetland programs ``assure that any State * * * whose waters may be

affected by the issuance of a permit may submit written recommendations

to the permitting State.'' Similarly, Section 404(h)(1)(H), 33 U.S.C.

1344(h)(1)(H), requires that state wetland programs ``assure continued

coordination with Federal and Federal-State water-related planning and

review processes.'' Nothing in either section or anywhere else in

Section 404 or the regulations implementing Section 404 requires that a

state, as part of its Section 404 wetlands program, assure that the

public is allowed to participate in any Federal, Federal-State or

interstate coordinating processes. EPA's review of Michigan's Section

404 wetlands program, therefore, is limited to a review of whether

Michigan's Section 404 wetlands program contains provisions which

assure the interstate, intrastate and Federal-State coordination

required by Sections 404(h)(1)(E) and (H). As described below, EPA has

determined that Michigan's Section 404 wetland program does contain

such assurances.

Section 323.1 et seq. of Michigan's Compiled Laws (Mich. Comp.

Laws) established MWRC. Mich. Comp. Laws Sec. 323.2a(1) provides that

``[t]he water resources commission is designated the state agency to

cooperate and negotiate with other governments, governmental units and

agencies thereof, in matters concerning the water resources of the

state, including but not limited to flood control, beach erosion

control and water quality control planning, development and

management.'' Michigan, in its October 26, 1983 program description,

relied upon Mich. Comp. Laws Sec. 323.2a(1) as the basis for assuring

EPA that the interstate, intrastate and Federal-State coordination

required by Sections 404(h)(1)(E) and (H) would occur. Section III.B.1

of Executive Order 1991-31 transferred all of these duties and

authorities from the MWRC to the Director of MDNR and the Michigan

Attorney General has certified that these authorities remain in full

force and effect. Consequently, Michigan's Section 404 wetlands program

assures that the interstate, intrastate and Federal-State coordination

required by Sections 404(h)(1)(E) and (H) shall take place through the

MDNR.

A number of commenters noted that the Michigan Attorney General's

Statement failed to specifically mention that MDNR, rather than MWRC,

would be responsible for the interstate, intrastate and Federal-State

coordination described above. According to these commenters, this

claimed failure rendered Michigan's modified program description

``deficient on its face and, as a matter of law, [provides] an

inadequate basis for public comment and provides EPA with an inadequate

basis on which to determine whether or not the Michigan wetlands

permitting program currently complies with applicable federal

requirements.'' EPA disagrees.

The basis for these commenters concern is their apparent belief

that EPA must limit its review in this matter to the documents included

with Michigan's December 15, 1993 letter to EPA, which included the

Attorney General's Statement and Michigan's original October 26, 1983

program description. However, 40 CFR 233.16(d)(1) provides that a State

may submit ``a modified program description or other documents which

[EPA] determines to be necessary to evaluate whether the program

complies with the requirements of the Act and this part'' (emphasis

added). As described above, Michigan submitted a number of other

documents to EPA in addition the December 15, 1993 letter, including a

September 20, 1993 letter from Michigan which contained Executive Order

1991-31. As noted above, EPA's determination that Michigan's Section

404 wetlands program assures interstate, intrastate and Federal-State

coordination is based upon the Attorney General's Statement, Michigan's

October 26, 1983 program description, and Executive Order 1991-31. All

of these documents were included in the administrative record which was

made available for public review after EPA made its preliminary

determination on April 21, 1994.

The third set of comments regarding how Executive Order 1991-31

effected a change in public participation requirements pertained to the

roles formerly played by the MWRC and the Michigan Natural Resources

Commission (``MNRC'') as public ``sounding boards'' and sources of

information pertaining to wetlands issues. According to these

commentators, Executive Order 1991-31, in abolishing the MWRC and

changing the role of the MNRC effected a change in public participation

because the public now has less of an opportunity to understand issues

or being decided or express concerns regarding the state's wetland

program. EPA does not agree that this represents a change in the public

particpation provisions of Michigan's Section 404 wetlands program.

As described above, Michigan's original October 26, 1983 program

description indicated that federal public participation requirements

would be met based upon state statutory and regulatory requirements

applicable to MDNR. There is nothing in Michigan's original program

description which indicated that either MWRC or MNRC would play any

role as part of Michigan's Section 404 wetlands program in assuring

compliance with federal public particpation requirements. Consequently,

although these commissions may in fact have provided the public

additional opportunities to receive information about and to comment on

wetland issues, those opportunities were above and beyond the

opportunities which were reviewed and approved by EPA as part of

Michigan's Section 404 wetlands program. Consequently, the abolishment

of MWRC and change in role for MNRC did not revise the public

participation provisions of Michigan's Section 404 wetlands program.

There were a number of comments regarding perceived changes in

Michigan's Section 404 wetlands program that have occurred since it was

first approved by EPA in 1984, but which were not related in any way to

Executive Order 1991-31. For example, commenters suggested that

Michigan agencies and courts have interpreted the ``feasible and

prudent alternatives'' test under Michigan law in a manner inconsistent

with the Clean Water Act Section 404(b)(1) guidelines.

As was stated in the April 21, 1994, Federal Register notice, EPA's

review in this matter is limited to a review of the revisions in

Michigan's Section 404 wetlands program that have resulted from

Executive Order 1991-31. A number of commenters stated that EPA cannot

so limit its review. These commenters pointed to 40 CFR 233.1(b) which

provides that ``[p]artial State programs are not approvable under

section 404.'' EPA does not agree that 40 CFR 233.1(b) is applicable

here.

The prohibition on approval of ``[p]artial State programs'' at 40

CFR 233.1(b) comes into play at the time when a state is initially

seeking federal approval of its Section 404 wetlands program. At that

time, there is no Section 404 wetlands program in the state. If the

state fails to address all of the Section 404 requirements, 40 CFR

233.1(b) would prohibit EPA from approving the program. The present

matter involves review of possible revisions to Michigan's already

approved Section 404 wetlands program.

40 CFR 233.16 contains the requirements pertaining to program

revisions. 40 CFR 233.16(a) requires that a State keep EPA informed of

changes in the State's statutory or regulatory authority or other

modifications which are significant to administration of the State's

authorized program. Under 40 CFR 233.16(e), EPA may request and a State

must provide documents or information whenever EPA believes that

circumstances have changed with respect to the State's program.

Finally, whenever EPA or a State finds that the State program is in

need of revision, EPA must review and approve or disapprove of such

revision. 40 CFR 233.16(d).

In the present matter, EPA requested that Michigan submit

information to EPA pursuant to 40 CFR 233.16 on whether any revisions

occurred in Michigan's federally approved Section 404 wetlands program

as a result of Executive Order 1991-31. EPA has not requested

information pertaining to any other issues regarding Michigan's Section

404 wetlands program. EPA is therefore limiting its review to the

effects of Executive Order 1991-31.

EPA appreciates the comments received on these matters, has

forwarded them to Michigan and will consider them in the context of

EPA's ongoing oversight of Michigan's wetlands program. If, in the

course of its ongoing oversight, EPA determines that a program revision

has occurred in any of the ways described in the comments, EPA will

take the appropriate steps as set forth at 40 CFR 233.16 to review and

approve or disapprove of the revisions.

There was one other comment, in addition to the comment pertaining

to the feasible and prudent alternatives test, which suggested that

Michigan's wetland program failed to comply with the Clean Water Act

and its implementing regulations. This comment was that Executive Order

1991-31 has ``substantially changed the criteria and burden of proof by

which the permitting agency routinely reviews or decides upon permits,

thereby allowing agency action to take place without assurance of

minimum-floor compliance with the Section 404(b) guidelines as required

by 40 CFR 233, part 50.'' According to the commenter, ``[t]he Michigan

Department of Natural Resources's (``MDNR'') flow-chart for decision

making * * * allows an agency to apply overly vague and broad

evidentiary tests to routine agency decisions when considering issuance

of wetland permits.''

EPA does not agree that Executive Order 1991-31 has caused the

changes suggested by the commenter. There is no indication in any of

the materials submitted by Michigan regarding any changes in criteria

or burden of proof for decisionmaking. EPA is not aware of any MDNR

``flow-chart'' that addresses wetland issues. The sole flow-charts in

the documents submitted by Michigan to EPA are flow charts contained in

a December 13, 1991 Draft Plan for the Implementation of Executive

Order 1991-31. Those flow-charts specifically pertain to National

Pollutant Discharge Elimination System (NPDES) permits and permits to

construct air emission sources. The December 13, 1991 Draft Plan also

specifically states that the wetland permitting process remains

unchanged by Executive Order 1991-31.

The United States Department of Interior, Fish and Wildlife Service

provided comments noting that it agreed with EPA that Executive Order

1991-31 did not effect any substantial revisions in Michigan's Section

404 wetland program. The Fish and Wildlife Service also noted that

there are a number of federally listed threatened and endangered

species present in Michigan and that, if EPA determines that EPA's

approval or disapproval of the revisions in Michigan's Section 404

wetlands program may affect these species, EPA would be required under

Section 7(a) of the Endangered Species Act to consult with the Fish and

Wildlife Service.

As described above, Executive Order 1991-31 has not caused any

substantive changes in Michigan's Section 404 wetlands program.

Instead, the only effects that Executive Order 1991-31 have had on

Michigan's Section 404 wetlands program have been to reorganize the

MDNR and transfer certain authorities and duties of the MWRC to MDNR.

EPA therefore has determined that its approval of these revisions in

Michigan's Section 404 wetlands program will not affect endangered

species.

A number of commenters noted that, pursuant to 40 CFR

Sec. 233.16(c), a state may not transfer all or part of its Section 404

program ``from the approved State agency to any other State agency''

until the new agency is approved by EPA. These commenters claimed that

Executive Order 1991-31 effectively abolished the ``old'' MDNR and

created a ``new'' MDNR. These commenters suggested that this transfer

of authority from the ``old'' MDNR to the ``new'' MDNR constituted a

transfer of authority from an ``approved Agency to any other State

agency.''

EPA has determined that the revisions to Michigan's Section 404

wetlands program resulting from Executive Order 1991-31 are consistent

with the requirements of the Clean Water Act and its implementing

regulations. Consequently, MDNR is authorized to administer Michigan's

Section 404 wetland program. The question of whether MDNR remained the

same agency or whether it became ``any other State agency'' as a result

of Executive Order 1991-31, and therefore whether it was authorized to

administer Michigan's Section 404 wetlands program, is not at issue

here. Nevertheless, due to the significant number of comments on this

issue, EPA believes it is appropriate to address this question here.

EPA recognizes that the Michigan Supreme Court has made clear that

Executive Order 1991-31 created a ``new'' MDNR. Dodak v. Engler, 443

Mich. 560 (1993). However, the Michigan Attorney General, in a letter

dated November 8, 1993, has stated that the Executive Order did not

create a new agency. In either event, the question of whether MDNR is a

``new'' agency under state law is not controlling with respect to

whether there has been a transfer of authority from an ``approved

Agency to any other State agency.'' Instead, it is EPA's regulations

which are controlling on this issue.

EPA's regulations at 40 CFR 233.16(c) do not provide clear guidance

on whether the reorganization and consolidation of environmental

programs accomplished by Executive Order 1991-31 constitutes a

``transfer'' of authority requiring prior EPA approval. The preamble to

the 1988 state wetland program regulations similarly fails to provide

any such guidance. See 53 FR 20764 (June 6, 1988). However, the 1980

preamble to the final National Pollutant Discharge Elimination System

(``NPDES'') state program rule, in addressing language at 40 CFR

123.62(c) which is similar to that at 40 CFR 233.16(c), stated:

It was not the intent of the proposal nor is it of these final

regulations to require EPA review in such cases [``nominal changes''

in state agencies]. Only when controlling Federal or State statutory

or regulatory authority is modified or supplemented, or when the

State proposes to transfer all or part of a program from an approved

State agency to another State agency may EPA approval be necessary.

Changes solely to the internal structure of an approved State

agency, with no changes in the overall authority of the agency, do

not require EPA approval.

45 FR 33290, 33384 (May 19, 1980).

Consistent with the above preamble language, EPA interprets the

language of 40 CFR 233.16(c) as not applying to a mere restructuring or

internal consolidation of environmental programs within a state's

executive branch. Instead, the prior EPA approval requirement in 40 CFR

233.16(c) applies in situations where such restructuring or

consolidation impacts the controlling authorities by which a state

implements the Section 404 wetland program.

As described above, MDNR has been the approved State agency for

implementation of Michigan's Section 404 wetland program both before

and after the Executive Order. MDNR's authority and responsibilities

under State law pertaining to wetland matters were not affected by

Executive Order 1991-31. Consequently, there have been no changes of

any significance to the function or structure of the portions of MDNR

that has been approved to implement Michigan's Section 404 wetland

program. Therefore, EPA does not agree with the commenters that

Executive Order 1991-31 constituted a transfer of authority from an

``approved Agency to any other State agency.''

Finally, a number of commenters requested that EPA provide a public

hearing on this matter. Pursuant to 40 CFR 233.16(d)(3), EPA is

required to provide an opportunity for a public hearing whenever a

proposed revision is substantial. 40 CFR 233.16(d)(3) provides that

``substantial revisions include, but are not limited to, revisions that

affect the area of jurisdiction, scope of activities regulated,

criteria for review of permits, public participation, or enforcement

capability.''

EPA has determined that Executive Order 1991-31, in reorganizing

MDNR and transferring responsibilities for assuring interstate,

intrastate and federal-state coordination on wetland matters from MWRC

to MDNR, has not affected a substantial change in Michigan's Section

404 wetlands program. EPA notes that these changes have not affected

any of the items listed in 40 CFR 233.16(d)(3). Moreover, EPA has found

that the comments sufficiently addressed any issues relevant to the

effects of Executive Order 1991-31 and therefore has determined that a

public hearing would not be useful to aid in this review. EPA,

therefore, is not providing an opportunity for a public hearing.

III. EPA's Final Determination

EPA, after review and consideration of all the information

submitted by Michigan and the comments received, has determined that

the revisions to Michigan's wetland program effected by Executive Order

1991-31 comply with the Clean Water Act and its implementing

regulations. Moreover, EPA has determined that the revisions were not

substantial.

Dated: November 3, 1994.

Valdas V. Adamkus,

Regional Administrator.

[FR Doc. 94-28972 Filed 11-23-94; 8:45 am]

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