The ESA "Harm" Rule Rescission: Could It Change the Conversation About Florida's Lost 404 Assumption?

On July 14, 2026, the U.S. Fish and Wildlife Service (FWS) and National Marine Fisheries Service (NMFS) finalized a rule rescinding the longstanding regulatory definition of "harm" under the Endangered Species Act (ESA). Going forward, the agencies intend to rely on a narrower interpretation of ESA "take," one that generally excludes habitat modification as a prohibited take unless there is a direct effect on individual animals. [federalregister.gov], [fws.gov]

At first glance, this may appear to be an endangered species issue unrelated to wetland permitting. In reality, it may have significant implications for one of Florida's most consequential environmental regulatory events of the past decade: the loss of the state's assumed Clean Water Act Section 404 permitting program.

A Reminder of What Happened

When EPA approved Florida's Section 404 assumption in December 2020, Florida became only the third state in the nation authorized to administer portions of the federal dredge-and-fill permitting program. DEP began issuing federal Section 404 permits within assumed waters, replacing what had traditionally been a U.S. Army Corps of Engineers function.

The subsequent litigation was often portrayed as a dispute over wetlands permitting. In reality, the legal battle centered heavily on Endangered Species Act compliance, consultation procedures, biological opinions, and the handling of impacts to federally listed species.

The result was the vacatur of Florida's assumption approval and a return to federal permitting authority.

For Florida landowners, developers, local governments, and infrastructure providers, the practical result was immediate:

More agencies. More review. More time. More cost.

The Cost of Dual Regulation

One consequence of the retraction that receives far less attention than it deserves is the return of overlapping regulatory reviews.

Today, many projects must navigate both:

• Florida's Environmental Resource Permit (ERP) process; and

• Federal Section 404 authorization processes.

In many cases, both agencies evaluate the same wetlands, the same impacts, the same mitigation proposals, and often the same environmental resource concerns.

The missions are not identical, but they are frequently parallel.

The result can be duplicate submissions, duplicate reviews, duplicate requests for information, and extended permitting timelines.

For applicants, this translates directly into increased holding costs, delayed construction schedules, prolonged financing commitments, and greater uncertainty.

As many property owners have discovered, regulatory time itself has become a project cost.

Why the New ESA Rule Matters

The recent ESA rule rescinding the definition of "harm" is significant because one of the major legal and regulatory concerns surrounding Florida's assumption involved ESA compliance and incidental take protections.

For decades, federal agencies interpreted "harm" broadly enough to include certain habitat modifications that indirectly injured or killed listed species through the impairment of breeding, feeding, sheltering, or other essential behaviors. This interpretation was frequently tied to wetland alterations, habitat changes, and land development activities. [federalregister.gov], [bdlaw.com]

The new rule moves in a different direction. FWS and NMFS have stated that habitat modification alone generally should not be considered prohibited take and have adopted a much narrower reading of ESA authority. [federalregister.gov], [fws.gov], [environmen...sidley.com]

While the rule does not eliminate ESA consultation requirements, it potentially reduces the circumstances under which habitat impacts trigger incidental take concerns. [federalregister.gov], [bdlaw.com]

That raises an interesting question:

If a narrower interpretation of ESA take had existed in 2020, would some of the legal concerns that contributed to the challenge of Florida's assumption have looked different?

A Different Regulatory Environment

The broader context is impossible to ignore.

Since Florida's assumption was approved:

• Sackett v. EPA narrowed federal Clean Water Act jurisdiction.

• Loper Bright eliminated Chevron deference and shifted courts toward determining the "single best interpretation" of federal statutes.

• FWS and NMFS have now rescinded the longstanding ESA definition of "harm" based largely upon this same textual approach to statutory interpretation. [federalregister.gov], [hollandhart.com], [environmen...policy.com]

Whether one agrees with these developments or not, they collectively signal a movement away from broad agency interpretations and toward narrower readings tied more closely to statutory language.

The legal landscape facing regulators today is materially different than the landscape that existed when Florida's Section 404 assumption was challenged.

Could Florida Revisit Assumption?

This new rule does not restore Florida's Section 404 authority.

Nor does it eliminate ESA consultation requirements, critical habitat considerations, or protections for listed species. Those federal obligations remain. [federalregister.gov], [bdlaw.com]

However, it does suggest that one of the major regulatory concerns underlying the assumption litigation may be evolving.

If federal agencies themselves are narrowing the scope of habitat-based incidental take, proponents of future assumption efforts may argue that some of the ESA-related obstacles identified during the prior litigation are no longer as expansive as they once were.

Whether courts ultimately agree remains uncertain. Litigation challenging the new rule is virtually guaranteed. [environmen...policy.com], [environmen...sidley.com]

Bottom Line

The significance of this new ESA rule is not that it changes wetland permitting overnight.

Rather, it highlights how much the regulatory world has changed since Florida lost its assumed Section 404 program.

The retraction of Florida's assumption did more than shift permits from one agency to another. It increased permitting timelines, increased regulatory complexity, and increased costs for property owners, public agencies, and private industry by returning many projects to a system of dual review by agencies with largely overlapping environmental objectives.

As federal agencies continue narrowing the scope of ESA regulation and courts continue reevaluating longstanding administrative doctrines, it is reasonable to ask whether the assumptions underlying Florida's 404 retraction would be viewed the same way today.

The answer may ultimately determine whether Florida once again pursues a larger role in the administration of federal wetland permitting.