In a Dec. 27 letter to the Environmental Council of the States and all state environmental agencies, Peter Silva, outgoing director of the Environmental Protection Agency’s Office of Water, reiterated that Endangered Species Act Section 7 consultation requirements do not apply when a state assumes permitting and enforcement authority under the Section 404 wetlands permitting program of the Clean Water Act (CWA).

According to the EPA, several states have expressed reluctance to assume CWA 404 authority due to concerns about the potential effects of the ESA’s Section 7 consultation requirements.

The Section 7 Consultation process is triggered whenever a so called “discretionary” federal action — such as a development approval or permit, or federal funding — occurs in an area where the action could result in a “taking” of a listed species or the destruction of its critical habitat. This requires the agency to consult with the U.S. Fish and Wildlife Service and/or the National Oceanic Atmospheric Administration Fisheries Service to ensure that mitigation measures — “reasonable and prudent alternatives” that become binding terms of the pending permit — will be taken to eliminate any potential impact on the species or its habitat.

NAHB members are routinely subject to ESA consultation requirements when they need to obtain another federal “discretionary” permit for their development project — such as CWA wetlands permits or EPA-issued storm water permits. On average, the Services conduct about 68,000 consultations per year.

In an important legal victory in 2007 in NAHB v. Defenders of Wildlife, the Supreme Court ruled that when the EPA delegates a CWA regulatory program to a state, the action is “non-discretionary.”

Defenders of Wildlife had sued the EPA to stop the agency from delegating the CWA’s storm-water permitting act — Section 402 National Pollutant Discharge Elimination System — to the state of Arizona out of concern that it would have an adverse impact on the endangered pygmy owl.

This was the first time in the ESA’s 40-year history that the U.S. Supreme Court had weighed in to limit the expansive scope of the law’s Section 7 consultation requirement.

Currently, Michigan and New Jersey are the only two states that have taken CWA 404 authority from the EPA to issue their own wetlands permits. The U.S. Army Corps of Engineers issues federal wetlands permits in the remaining 48 states.

Even without having to deal with Section 7 consultation requirements, few if any states are likely to request wetlands permitting delegation and extra responsibilities from the EPA at a time when they are facing crushing fiscal deficits.

Former Michigan governor Jennifer Granholm had proposed in 2009 that the state give up its jurisdiction over EPA-approved wetlands as a cost-saving measure.

For more information, e-mail Larissa Mark at NAHB, or call her at 800-368-5242 x8157; or contact Glynn Rountree, x8662.