IRIS in Focus: A Legal, Regulatory, and Policy Primer on Levee Setbacks

Across the United States, levees have fundamentally altered the landscape of river basins and the communities within them. Repeated and catastrophic levee failures, evolving public values, and increasing frequency of extreme weather events have driven the search for better ways to manage flood risk, to repair flood-damaged levees, and to meet environmental and ecosystem needs.

A levee setback addresses these goals by realigning an existing levee or constructing a new levee that is located away from the active river channel. Increasing the distance between the levee and the river channel allows the river to reconnect to its historic floodplain, which provides myriad ecosystem services: flood mitigation and flood hazard reduction, water filtration, groundwater recharge, habitat, and recreational opportunities. The floodplain adds a dynamic, green component of flood management to the static, gray infrastructure that is the levee. Together this hybrid green-gray infrastructure reduces flood risk and preserves environmental benefits and values.

This primer lays the foundation for interested communities to strategize how to implement a levee setback. Advanced planning is critical, particularly because the timing of a setback can be crucial to its success. The goal of this primer is to help planning branches in federal agencies and local levee districts and others understand the authorities, funding programs, permitting and legal requirements, and incentive and obstacles to implementing a levee setback. A levee setback is one of many nature-based solutions that will help communities meet their dual goals of managing risk from extreme weather events and protecting the environment. Find the full primer here.

Regulatory and Policy Support for Nature-Based Solutions, EWN Principles, and Levee Setbacks

Much of the federal support for nature-based solutions in the flood hazard management context comes from Executive Orders 11988, 13690, and 14072. EO 11988 is the cornerstone of Executive Branch flood risk management and requires federal agencies to “restore and preserve the natural and beneficial values served by floodplains.” Encouraging the use of nature-based solutions is further emphasized in EO 14072, which directs federal agencies to identify key opportunities to deploy nature-based solutions across the federal government. Similarly, existing and forthcoming high-level policy and guidance directs USACE to pursue these same goals while planning for and implementing water resources development projects.

Legal Authorities to Implement a Levee Setback

The U.S. Army Corps of Engineers has the authority, funding, and expertise to plan and construct a levee setback. A large-scale levee setback could originate in four ways:

  • The Water Resources Development Act (WRDA) is a direct way to authorize the USACE to initiate a study or other effort to consider a levee setback.
  • Sections 204, 205, 206, and 1135 of the Continuing Authorities Program, a collection of nine standing authorities to undertake smaller water resources projects, allows USACE to implement smaller-scale levee setback projects on a timely basis.
  • Section 408 of the Rivers and Harbors Act of 1899 is a tool for a private or public entity to alter a USACE-constructed water resources project and implement a levee setback if it does not harm the public interest and retains the usefulness of the original project.
  • Public Law 84-99 (PL 84-99) allows USACE, at the request of a non-federal sponsor, to undertake a levee setback as a non-structural alternative or to implement a functional setback as part of a levee realignment in the aftermath of a disaster.

Federal Funding for Floodplain Acquisition and Incentives to Implement a Levee Setback

One key component of implementing a levee setback is to ensure the historical floodplain no longer contains homes or other structures that have been built landward of the original levee. The non-federal, local sponsor is largely responsible for acquiring the land, easements, rights-of-way, relocation, and disposal areas (LERRDs), a particularly challenging aspect of implementing a levee setback. However, a local sponsor may apply funding from federal agencies, as well as from state, local, and private sources to meet its LERRD requirements.

Federal Emergency Management Agency

The Federal Emergency Management Agency (FEMA), housed within the U.S. Department of Homeland Security, oversees recovery from flooding-related disasters.

FEMA administers three grants that could help a local sponsor acquire the LERRDs needed to implement a levee setback: Building Resilient Infrastructure and Communities (BRIC) program; the Hazard Mitigation Grant Program (HMGP), and the Flood Mitigation Assistance (FMA) program.

FEMA also operates The National Flood Insurance Program (NFIP) ensures that federal flood insurance is available to homeowners, renters, and business owners in communities prone to flooding. NFIP premiums are based, in part, on the Community Rating System (CRS). The CRS is a voluntary incentive program that encourages communities to take measures that exceed minimum NFIP requirements, for which they receive a discount on insurance rates. Two activities relevant to implementing a levee setback are establishing open space (Activity 422.c) and acquiring and relocating properties out of the floodplain (Activity 520). NFIP does not offer funding to support these activities, but the possibility of reduced premiums for local policyholders can be an incentive for local governments to make the investments.

Safeguarding Tomorrow through Ongoing Risk Mitigation (STORM) Act

Another potential source of funding for voluntary property buyouts is the Safeguarding Tomorrow through Ongoing Risk Mitigation (STORM) Act, passed by Congress in 2021. In the context of a levee setback, funds may be used for studying and creating agricultural risk compensation districts “where there is a desire to remove or set-back levees protecting highly developed agricultural land to mitigate for flooding,” among other activities.

USDA’s Natural Resources Conservation Service: Conservation Easements

The USDA Natural Resources Conservation Service (NRCS) also operates a number of funding programs that could support levee setbacks, especially with voluntary property buyouts and conservation easements: the Emergency Watershed Protection Program (EWP), which helps landowners protect lives and property from flooding and other natural disasters that impair a watershed; the Wetland Reserve Easements, which seeks to provide habitat for migratory waterfowl and other wildlife that depends on wetlands, to restore the ecosystem services of wetlands, and to facilitate education, scientific, and limited recreational activities; and the Watershed and Flood Prevention Operations (WFPO) Program, where the NRCS provides technical and financial assistance to help plan and implement authorized watershed projects that prevent flooding and protect the watershed.

USDOT’s Federal Highway Administration and Transportation Corridors

The U.S. Department of Transportation (USDOT) is exploring ways to improve transportation resilience and to reduce risk to climate change-driven hazards by using nature-based solutions. In the Bipartisan Infrastructure Law, also known as Infrastructure Investment and Jobs Act of 2021 (IIJA), Congress directed USDOT to examine transportation resiliency in programs such as the National Highway Performance Program, the Surface Transportation Reauthorization Act, the Surface Transportation Block Grant Program, and in Emergency Relief Projects, all of which could be used to move transportation infrastructure out of the floodplain.

U.S. Department of Housing and Urban Development

The U.S. Department of Housing and Urban Development (HUD) operates the Community Development Block Grant-Disaster Recovery Buyout program (CDBG-DRB) to help reconceive areas impacted by natural disasters and extreme weather events and the CDBG-Mitigation Funds for qualifying disasters. The purpose of these funds is to “carry out strategic and high-impact activities to mitigate disaster risks and reduce future losses,” including voluntary property buyouts.  

Federal Legal and Regulatory Considerations

With legal authority and funding in place to begin work on a levee setback, planners must consider the permitting and regulatory process. Implementing a levee setback triggers the standard suite of federal environmental assessments and reviews.

Clean Water Act Section 404 Permits

Section 404 of the Clean Water Act regulates and requires a permit for the discharge of dredged or fill material into waters of the United States. USACE is the lead agency for the Section 404 permit program, and itself is subject to permit reviews for its projects. A levee setback may involve dredging or filling wetlands, and discharges into those wetlands that meet the new standard established in the U.S. Supreme Court’s 2023 Sackett vs. U.S. EPA decision still require a 404 permit. What those wetlands are, however, is unclear, and many may no longer be protected by the CWA.

National Environmental Policy Act

The National Environmental Policy Act (NEPA) applies to any major federal action. It requires a federal agency to consider the environmental impact of a proposed action, such as a levee setback. Depending on the size and scale of a setback and the potential impacts on habitat, water quality, land use, and various other natural or cultural resources, an Environmental Assessment or an Environmental Impact Statement is likely needed for a levee setback project.

Endangered Species Act

The Endangered Species Act provides both a check on levee setbacks and support for the habitat restoration goals of levee setbacks. For a setback levee, a section 7(a)(2) analysis is still required even if the ultimate outcome is improved habitat and resources for protected species. At the same time, restoring the historical floodplain and riparian habitat aligns with the Section 7(a)(1) mandate for federal agencies to promote conservation of listed species.

National Historic Preservation Act

The National Historic Preservation Act (NHPA) protects places, structures, and other artifacts that are important to or significant markers of development in the United States. A federal agency must assess whether its actions will affect any listed places or places that meet the listing criteria. In the context of a setback levee, the NHPA may be triggered when registered places are in the historical floodplain, when the levee itself is registered, or when materials used to build the setback levee come from cultural sites or contain artifacts.

Project Team

Yee Huang, Law and Policy Analyst, UGA Institute for Resilient Infrastructure Systems

Matthew Shudtz, Law and Policy Fellow, UGA Institute for Resilient Infrastructure Systems

Project Support

This primer is supported by the Network for Engineering With Nature (www.n-ewn.org) and the University of Georgia’s Defense Community Resilience Program in the Carl Vinson Institute of Government. It was supported by the Army Corps of Engineers Awards W912HZ-21-2-0041 and W912HZ-23-2-0018.