TRAVERSE CITY, Mich. —  Gov. Jennifer Granholm has recommended scrapping Michigan's wetland protection law and transferring wetland regulation in the state to the federal government.

The Democratic governor announced the plan in her State of the State address Tuesday, drawing mixed reviews from business and environmental interests. Michigan has operated a separate wetland program since 1984, the only state to do so except New Jersey.

If Granholm's proposal wins legislative approval, businesses and property owners wanting to fill or otherwise degrade wetlands for development will seek permits from the U.S. Army Corps of Engineers instead of from the Michigan Department of Environmental Quality.

The U.S. Environmental Protection Agency will retain oversight authority.

Michigan enacted its law in 1979, recognizing the importance of wetlands in filtering pollutants that could contaminate other waters, including the Great Lakes. They also provide habitat for fish and wildlife, and help control flooding and erosion.

Granholm's proposal to abandon the program is among many money-saving measures she is seeking to close a $1.6 billion budget deficit, spokeswoman Liz Boyd said.

The program costs about $4 million a year, including a $2.1 million state appropriation. Federal funding and permit fees provide the rest.

Opponents of Granholm's plan say the savings would be minimal and not worth the loss of state control. One likely result would be fewer on-site inspections of proposed wetland projects, they said. The state has about 30 personnel who handle wetland issues in field offices around the state.

"Very shortsighted," said Jennifer McKay, a policy specialist with Tip of the Mitt Watershed Council in Petoskey. "The ecological and economic future of Michigan is dependent on maintaining the wetlands protection program in the state."

But Doug Roberts, environmental policy director for the Michigan Chamber of Commerce, said many of its members were dissatisfied with the state program and would favor federal control.

"We applaud the governor for looking for ways to save the state money," he said.

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