[Federal Register Volume 62, Number 220 (Friday, November 14, 1997)]
[Rules and Regulations]
[Pages 61173-61175]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29623]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 233

[FRL-5918-7]


Approval of Modifications to Michigan's Assumed Program To 
Administer the Section 404 Permitting Program Resulting From the 
Reorganization of the Michigan Environmental Agencies

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of approval.

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SUMMARY: Notice is hereby given that the United States Environmental 
Protection Agency (EPA) approves of the modifications of Michigan's 
assumed Clean Water Act Section 404 (Section 404) permitting program 
which resulted from Michigan Executive Order 1995-18 which reorganized 
Michigan's environmental agencies.

EFFECTIVE DATE: November 14, 1997.

FOR FURTHER INFORMATION CONTACT: Kevin Pierard, Chief, Watersheds and 
Non-Point Source Programs Branch, Water Division, U.S. Environmental 
Protection Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604, 
(312) 886-4448.

SUPPLEMENTARY INFORMATION:

    Note: This action is one of four Federal Register actions 
related to reorganization of state environmental agencies in 
Michigan. All these actions are published together in the Federal 
Register, with the exception of a Clean Air Act State Implementation 
Plan published on November 6, 1997 at 62 FR 59995.

I. Background

    The State of Michigan assumed Federal Clean Water Act Section 404 
permitting authority on October 16, 1984. Procedures for revision of 
State programs at 40 CFR 233.16 require that EPA review any revisions 
to state assumed Section 404 programs, determine whether such revisions 
are substantial, and approve or disapprove the revisions.
    On November 25, 1994, EPA approved of revisions to Michigan's 
Section 404 program resulting from Executive Order 1991-31, which 
transferred the responsibilities and authorities of the Michigan 
Department of Natural Resources (MDNR) to the Director of a new MDNR. 
On July 3, 1995, Michigan Governor John Engler signed Executive Order 
1995-18 (Executive Order), which elevated the former Environmental 
Protection Bureau of MDNR to full departmental status as the Michigan 
Department of Environmental Quality (MDEQ), effective October 1, 1995. 
MDEQ retained all of its environmental duties, functions and 
responsibilities and virtually all of the personnel formerly assigned 
to it as a bureau in the MDNR. In addition, certain other environmental 
duties, functions and responsibilities of the Law, Geographical Survey 
and Land and Water Management Divisions were transferred to MDEQ, as 
was the authority to make decisions regarding administrative appeals in 
those matters under its purview.
    The Attorney General, in a statement dated June 13, 1996, 
statement, certified to the following:

    It is my opinion that E.O. 1995-18 did not substantively change 
the state's statutes or rules relating to the administration of 
federally delegated programs nor was any authority, power, duty or 
function contained within Michigan's statutes or rules applicable to 
federally delegated programs diminished by the execution of E.O. 
1995-18. Specifically, E.O. 1995-18 did not affect program 
jurisdiction, the scope of activities regulated, criteria for the 
review of permits, public participation, enforcement capabilities or 
the adequacy of Michigan's legal authority to carry out its 
federally delegated programs.

    Based upon a review of this information, as well as a review of the 
Section 404 program documents submitted in support of Michigan's 
original (1983) request for EPA approval and the materials submitted by 
Michigan and considered by EPA in approving of revisions to Michigan's 
Section 404 program on November 25, 1994, EPA preliminarily concluded 
that the Executive Order did not substantially revise the State of 
Michigan's Section 404 program and that any revisions resulting from 
the Executive Order should be approved. This preliminary determination 
was based upon the fact that none of the statutes or rules which 
comprise Michigan's Section 404 program changed as a result of the 
Executive Order and MDEQ retained virtually all of the personnel 
formerly assigned to it as a bureau in MDNR.
    Although none of the statutes or regulations which comprise 
Michigan's program changed, there was one additional matter that EPA 
considered before making its preliminary determination. Specifically, 
the Executive Order provides that the Director of MDEQ now decides 
administrative appeals of wetland permitting decisions, rather than the 
Michigan Natural Resources Commission. However, this change does not 
affect the Michigan Section 404 program's ``area of jurisdiction, scope 
of activities regulated, criteria for review of permits, public 
participation, or enforcement capability.'' 40 CFR 233.16(d)(3). 
Consequently, EPA did not view this change to be a substantial 
revision. Moreover, EPA preliminarily concluded that this revision 
should be approved because it is not inconsistent with anything in the 
Clean Water Act or its implementing regulations.
    While not required to do so according to the State Section 404 
program regulations, EPA chose to invite public comment concerning the 
Agency's preliminary determinations. Consequently, on March 28, 1997, 
EPA published a notice in the Federal Register of its preliminary 
determinations that the Executive Order caused no substantial revisions 
to Michigan's Section 404 program and that any revisions to Michigan's 
Section 404 program that resulted from the Executive Order should be 
approved. EPA also indicated that it might conduct a public hearing, if 
there was significant public interest based on requests received. 
Finally, EPA stated that its preliminary decision only addressed, and 
EPA was only seeking comment on, the impact of the Executive Order on 
Michigan's Section 404 program.

II. Comments

    In response to the March 28, 1997, notice, EPA received comments 
from three commenters: the Tip of the Mitt Watershed Council, the East 
Michigan Environmental Action Council, and the Michigan Environmental 
Council. The commenters all raised the same two issues. First, the 
commenters noted that the Executive Order transferred authority to hold 
hearings and make findings of fact and render decisions on contested 
Section 404 permits from the Natural Resources Commission, a public 
body that was subject to Michigan's Open Meetings Act, to the Director 
of

[[Page 61174]]

the MDEQ, who in turn delegated that authority to the MDEQ Office of 
Administrative Hearings, an entity that is not a public body and 
therefore is not subject to Michigan's Open Meetings Act.
    The public participation requirements for state Section 404 
programs are set forth at 40 CFR 233.32-34. The only ``Open Meetings 
Act'' type requirements in those regulations is at 40 CFR 233.33, which 
requires that state Section 404 programs provide an opportunity for 
public hearings at which the public must be allowed an opportunity to 
submit oral and written statements or data concerning a permit 
application or draft general permit. Michigan clearly continues to 
comply with this requirement. See Section 281.708 of the Michigan 
Compiled Laws. Nothing in the state Section 404 wetland program 
regulations requires that adjudicatory hearings on contested permits be 
open to the public. Consequently, the fact that these types of hearings 
may not necessarily be open to the general public in Michigan is not a 
basis for disapproving of the revisions resulting from the Executive 
Order.
    We further note that Michigan did not represent in its original 
1983 program submission, and EPA in reviewing and approving of that 
original program submission did not find, that Michigan was relying on 
the Michigan Open Meetings Act to demonstrate that it had authority to 
comply with the federal public participation requirements. Rather, 
Michigan cited to Sections 8 and 10 of its Wetlands Protection Act, 
Section 5 of its Water Resources Act, Section 6 of its Inland Lakes and 
Streams Act, and Sections 41-42 of its Administrative Procedures Act, 
to demonstrate that it had such authority. None of these statutory 
provisions were affected by the Executive Order. Consequently, any 
changes resulting from the Executive Order pertaining to the 
applicability or inapplicability of the Michigan Open Meetings Act do 
not in any way constitute changes in Michigan's approved Section 404 
program.
    The second issue raised by the commenters is that, under the 
Executive Order, the Chief Administrative Law Judge for the Office of 
Administrative Hearings who decides certain contested Section 404 
permits is appointed by the Director of the MDEQ and so allegedly will 
not be capable of exercising decisionmaking authority independent of 
the Director of the MDEQ. However, there is nothing in the state 
Section 404 program regulations pertaining to administrative appeals of 
permit decisions. Consequently, the possibility that the Chief 
Administrative Law Judge may not be entirely independent of the 
Director of the MDEQ is not a basis for disapproving of the revisions 
resulting from the Executive Order.
    Of course, if as a result of the changes to the administrative 
appeals process resulting from the Executive Order, Michigan repeatedly 
issues Section 404 permits which do not conform with the requirements 
of the Clean Water Act, this might serve as a basis for withdrawal of 
Michigan's Section 404 program under 40 CFR 233.53. EPA notes that it 
currently has pending before it a February 4, 1997, petition to 
withdraw Michigan's Section 404 program that was filed by the Michigan 
Environmental Council (MEC) which alleges, among other things, that 
Michigan is in fact repeatedly issuing such permits in part because of 
the changes to the administrative appeals process. EPA is separately 
investigating the allegations in that petition to determine whether 
cause exists to commence withdrawal proceedings. EPA, in approving of 
the revisions to Michigan's Section 404 program resulting from the 
Executive Order, is in no way expressing any opinion on the question of 
whether withdrawal proceedings should commence in light of the 
allegations in the MEC petition. Moreover, EPA is not expressing any 
opinion on questions which MEC separately raised in a letter dated June 
14, 1996, regarding the impact of Michigan's Public Act 132 of 1996 on 
Michigan's Section 404 program. Instead, EPA is addressing those 
questions separately.
    In a related comment, one commenter argued that, under the 
Executive Order, the Director may ``appoint an individual within or 
outside the [MDEQ]'' to decide certain administrative appeals in which 
the Director has been involved. The commenter also noted that there is 
no statutory definition of the individuals eligible for service in this 
role and so ``it is conceivable that an individual with a personal or 
financial interest in the project at issue could be appointed to decide 
an appeal.'' However, in contrast to 40 CFR 123.25(c), there is nothing 
in either the Clean Water Act or in EPA's implementing regulations 
governing conflicts of interest in state Section 404 programs. 
Consequently, the possibility that such a conflict could arise is not a 
sufficient basis to disapprove of the revisions to Michigan's Section 
404 program resulting from the Executive Order. Moreover, although not 
necessary to our decision, we note that Michigan has represented to EPA 
that all decisionmakers appointed by the Director will be required to 
sign a ``Conflict of Interest Certification'' certifying that they ``do 
not now receive, nor have ever received, any income directly or 
indirectly from any person who holds a permit, has applied for a 
permit, or who is subject to an enforcement order issued pursuant to or 
under the authority of [the Clean Water Act].'' Consequently, the 
possibility that an appointed decisionmaker might have a financial 
conflict of interest is extremely remote.
    Finally, all three commenters stated that they believed that the 
revisions resulting from the Executive Order were substantial and so 
requested a public hearing. EPA is required to provide an opportunity 
for a public hearing under 40 CFR 233.16(d)(3) if 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.'' 
As described above, none of the statutes or rules upon which EPA 
authorized Michigan's Section 404 program changed as a result of the 
Executive Order. Instead, the Executive Order simply changed the people 
or entities responsible for carrying out the various functions set 
forth within these statutes and rules. Consequently, EPA does not 
believe that the revisions to Michigan's Section 404 program resulting 
from the Executive Order are substantial.
    Moreover, in light of the fact that EPA only received three sets of 
comments which addressed virtually identical issues, EPA does not 
believe that there is sufficient public interest in this matter to hold 
a public hearing. Finally, none of the comments explained why a public 
hearing was necessary or would be helpful in resolving the question of 
whether EPA should approve of any revisions to Michigan's Section 404 
program. Consequently, EPA is not providing for a public hearing.

III. Regulatory Assessment Requirements

A. Executive Order 12866

    Under Executive Order 12866 (58 FR 51735; October 4, 1993), the 
Agency must determine whether a regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more, 
or

[[Page 61175]]

adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    The Office of Management and Budget (OMB) has exempted EPA action 
on State Section 404 programs from OMB review.

B. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), P.L. 
104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
one year.
    EPA's approval of any revisions to Michigan's Section 404 program 
resulting from the Executive Order contains no Federal mandates (under 
the regulatory provisions of Title II of the UMRA) for State, local, or 
tribal governments or the private sector. Instead, EPA's determination 
merely recognizes an internal reorganization of an existing approved 
Section 404 State program; and this determination does not contain any 
Federal mandate that may result in expenditures of $100 million or more 
for State, local, and tribal governments, in the aggregate, or the 
private sector in any one year. Therefore, this determination is not 
subject to the requirements of section 202 of the UMRA.
    Before EPA establishes any regulatory requirements that may 
significantly or uniquely affect small governments, including tribal 
governments, it must have developed under section 203 of the UMRA a 
small government agency plan. The plan must provide for notifying 
potentially affected small governments, enabling officials of affected 
small governments to have meaningful and timely input in the 
development of EPA regulatory proposals with significant Federal 
intergovernmental mandates, and informing, educating, and advising 
small governments on compliance with the regulatory requirements. 
Because EPA's determination to approve of any revisions to Michigan's 
Section 404 program resulting from the Executive Order merely 
recognizes an internal reorganization of an existing assumed State 
Section 404 program, EPA's determination contains no regulatory 
requirements that might significantly or uniquely affect small 
governments.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) provides that, whenever an 
agency promulgates a final rule under 5 U.S.C. 553, after being 
required to publish a general notice of proposed rulemaking, an agency 
must prepare a final regulatory flexibility analysis unless the head of 
the agency certifies that the final rule will not have a significant 
economic impact on a substantial number of small entities. 5 U.S.C. 604 
& 605. The Regional Administrator today certifies, pursuant to section 
605(b) of the RFA, that approval of any revisions to Michigan's Section 
404 program resulting from the Executive Order will not have a 
significant impact on a substantial number of small entities.
    The basis for the certification is that EPA's approval simply 
results in an administrative change in the structure of the assumed 
Section 404 program, rather than a change in the substantive 
requirements imposed on any small entity in the State of Michigan. This 
approval will not affect the substantive regulatory requirements under 
existing State law to which small entities are already subject. 
Additionally, approval of the Section 404 program modification will not 
impose any new burdens on small entities.

D. Paperwork Reduction Act

    This approval contains no requests for information and consequently 
is not subject to the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

IV. 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 Section 404 program resulting from the 
Executive Order should be approved. Moreover, EPA has determined that 
the revisions are not substantial.

    Dated: October 1, 1997.
David A. Ullrich,
Acting Regional Administrator.
[FR Doc. 97-29623 Filed 11-13-97; 8:45 am]
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