SHORELINES HEARINGS BOARD
STATE OF WASHINGTON
This matter comes before the board pursuant to RCW 90.58.180(4). Petitioners[1] seek review of the adoption of guidelines for local government shoreline master programs. Chapter 173-26 WAC.[2]
A prehearing conference was conducted to schedule deadlines and hearings in this appeal. Pursuant to the scheduling order issued from that conference, the Department of Ecology filed a certified copy of the administrative record pursuant to RCW 34.05.562. Thereafter, the board granted in part a motion to supplement the administrative record with material obtained from the Department of Ecology. The board additionally takes judicial or official notice of material appended to the petitioners’ hearing briefs.
The board, consisting of James A. Tupper, Jr., presiding, Kaleen Cottingham, Phyllis Shrauger, Martin Carty and Pierre Peltier, has considered the foregoing record together with the trial briefs filed by the parties. On June 27, 2001, the board heard oral argument on the appeal. Appearances for the parties were as follows:
Laura N. Whitaker, Galen G. Shuler and Perkins Coie for Petitioners Association of Washington Business et al. and Intervenor Petitioners City of Aberdeen et al.
Stephen J. Hallstrom, Chief Deputy Prosecutor for Grant County.
Dennis D. Reynolds, Charles Maudell and Williams Kastner & Gibbs for Intervening Petitioner Washington Aggregates and Concrete Association.
Thomas J. Young and Ken Lederman, Assistant Attorney Generals, and Christine O. Gregoire, Attorney General for the State of Washington Department of Ecology.
Thomas R. Bjorgen and Bjorgen Bauer, David Mann and Bricklin & Gendler attorneys for Intervenor Respondents Washington Environmental Council et al.
David Dana, City Attorney for Intervenor Respondent City of Bellingham.
Mark O. Erickson, City Attorney for Intervenor Respondent City of Olympia.
Based on this record and being otherwise fully apprised in the circumstances of this matter, the board enters the following order.
BACKGROUND
The Shoreline Management Act (SMA), Chapter 90.58 RCW was enacted by initiative of the people in 1971.[3] The SMA constitutes the codification of the public trust doctrine for shorelines claimed by the state at the time of statehood. Caminiti v. Boyle, 107 Wn.2d 662, 670 (1987).[4] This is reflected foremost in the policies of the SMA at RCW 90.58.020:
It is the policy of the state to provide for the management of the shorelines of the state by planning for and fostering all reasonable and appropriate uses. This policy is designed to insure the development of these shorelines in a manner which, while allowing for limited reduction of rights of the public in the navigable waters, will promote and enhance the public interest. This policy contemplates protecting against adverse effects to the public health, the land and its vegetation and wildlife, and waters of the state and their aquatic life, while protecting generally the public rights of navigation and corollary rights incidental thereto.
The SMA establishes a cooperative program between local government and the state for management of shorelines. Under the SMA local governments have “primary responsibility” for initiating planning and administering the regulatory program consistent with the policies of the SMA. The Department of Ecology acts “primarily in a supportive and review capacity with an emphasis on providing assistance to local government and on insuring compliance with the policy and provisions of this chapter.” RCW 90.58.050. Under this scheme the state promulgates guidelines for the development of shoreline master programs by local governments. RCW 90.58.060 and 100. Local governments then consider applications for shoreline development pursuant to their master programs. RCW 90.58.140. The Department of Ecology must approve all applications for shoreline variance and conditional use permits, RCW 90.58.140, and has the right to appeal shoreline substantial development permits to this board under RWC 90.58.180(2).
In 1995, the legislature required Ecology to update the SMA guidelines. RCW 90.58.060(3). The existing guidelines, adopted in 1972, had never been comprehensively updated. Ecology concluded, based on a considerable record, that the existing guidelines were inadequate to implement the SMA. Ecology first published a draft rule in 1999. That rule was withdrawn and a revised draft rule was published in the spring of 2000. The final rule was adopted in November 2000. The above captioned appeals were then filed with this board.
STANDARD OF REVIEW
This board considers an appeal of SMA guidelines under the provisions of RCW 90.58.180(4). The board shall find the guidelines valid unless it determines that the rule:
(a) Is clearly erroneous in light of the policy of this chapter; or
(b) Constitutes an implementation of this chapter in violation of constitutional or statutory provisions; or
(c) Is arbitrary and capricious; or
(d) Was developed without fully considering and evaluating all material submitted to the department during public review and comment; and
(e) Was not adopted in accordance with required procedures.
If the board finds that the guidelines are invalid in some respect, the board remands the rule to the Department of Ecology for further consideration. RCW 90.58.180(6).
A decision of the board must be agreed to by at least four members of the board to be final. RCW 90.58.170. Where less than four members are in agreement, the effect of the decision is to affirm the matter on appeal. Department of Ecology v. City of Kirkland, 89 Wn.2d 25 (1974). In this instance three or more members of the board are in agreement with those enumerated issues affirming the guidelines. Four or more members concur in those enumerated issues where the guidelines are deemed invalid. This decision accordingly constitutes the final decision of the board.
DISCUSSION
I. Does the Department of Ecology have authority to implement the Endangered Species Act under the SMA?
The guidelines are intended in part to achieve compliance with the federal Endangered Species Act (ESA), 16 U.S.C. § 1531 et seq. ESA compliance would include liability protection for state and local government actions implementing the SMA and permitted activities under the SMA.
Ecology had initially sought to develop a rule that would qualify as an exception to the ESA take prohibitions under a section 4(d) rule, 16 U.S.C. § 1533(d), being developed by the National Marine Fisheries Service (NMFS) and United States Fish and Wildlife Service (USFWS). To this end, beginning in early 2000, Ecology engaged in discussions with the federal agencies and Northwest Indian Fisheries Commission. The goal of these discussions was to develop a two-track procedure for master program approval. Path B would set forth requirements “sufficient to gain an exception from the definition of ‘take’ in the 4(d) rule for activities consistent with programs reviewed under Chapter B.”
A draft rule was published in 2000 setting forth Part III (Path A) and Part IV (Path B). Part III was essentially the rule as it was previously published in 1999. Part IV included additional provisions resulting from the ESA discussions. The additional provisions included a requirement for adaptive management programs to achieve “properly functioning conditions” or “PFC” for listed and threatened species, more detailed inventory requirements, expanded consideration of cumulative impacts, restrictions on developments within the “Channel Migration Zone”, and vegetation management requirements.
NMFS published its 4(d) rule for the Northwest in July 2000. Despite the earlier discussions between Ecology and the federal services, there was no coverage under the rule for Part IV and no option for the state to seek amendment of the rule to obtain such coverage. 50 C.F.R. § 223.203(b)(12).
The Department of Ecology nonetheless continued its discussions with NMFS regarding ESA compliance. The result was an agreement to engage in formal consultation with the federal agencies under section 7 of the ESA. 16 U.S.C. § 1536. This agreement or understanding was announced just after the final guideline rule was adopted. The agreement appears to include a commitment to formal consultation under section 7 for master programs developed under Part III. Thus, Part IV master programs will obtain a programmatic consultation, while Part III master programs will be considered individually by the federal agencies. The Implementation Plan filed with the formal adoption of the guidelines on November 29, 2000, provides that master programs affected by the ESA “will receive Incidental Take Statements.” The rule does not describe how this consultation will function procedurally.
Petitioners contend that the Department of Ecology does not have authority to implement the ESA through the guidelines. The parties agree that there is no express authority for the SMA guidelines to implement ESA compliance. And there is no disagreement on the basic underlying law. An agency regulation that is not authorized by statute is invalid. Electric Lighthouse v. WUTC, 123 Wn.2d 530, 536-37 (1984). See Human Rights Commission v. Cheney School District, 99 Wn.2d 118, 125 (1982). An administrative agency similarly lacks authority to adopt a rule that amends or changes a legislative enactment. Fahn v. Cowlitz County, 93 Wn.2d 368, 383 (1980). The question then is whether there is implied authority under the SMA to implement ESA compliance.
Petitioners assert that such authority cannot be implied. This analysis derives from the negative implication that the legislature has specifically conferred authority for the department to implement a variety of federal environmental laws. Thus Ecology may exercise delegated authority under the federal Clean Water Act, RCW 90.48.260, the Clean Air Act, RCW 70.94.510 and the Resource Conservation and Recovery Act regulating hazardous and solid waste, RCW 70.105.130. The difficulty with this analysis is the fact that each of these federal statutes has a provision for delegated state responsibility. The ESA has no similar provision.
More problematic for Ecology, however, is the 1999 Salmon Recovery Act, Chapter 77.85 RCW. In that statute the legislature vested very specific authority on the governor to negotiate with federal officials to obtain assurances under a section 4(d) rule pertaining to forest practices. RCW 77.85.190(3). This authority was based on findings that the forest industry, small landowners, tribal governments, state and federal agencies, and counties had worked diligently to reach agreement on scientifically based changes to forest practices rules. The legislative findings additionally concluded that the proposed changes to forest practices will meet riparian functions vital to long-term salmon recovery. RCW 77.85.180(1). The authority granted the governor to negotiate was constrained by an assumption that federal assurances, as developed in negotiations, would be forthcoming in a 4(d) rule. RCW 77.85.190(1). The legislation sets forth in detail what would constitute a failure of assurance. RCW 77.85.190(2). The same subsection provides a procedure for a claim that there has been a failure of assurances and a requirement that the governor render a finding and report to the legislature on whether there has been a failure of assurance. In that event, the legislature reserved the right to review the terms of the legislation. RCW 77.85.190(2).
No similar legislative enactment authorized the Department of Ecology to negotiate coverage under a 4(d) rule for Part IV or agree to formal consultations under section 7 of the ESA for Part III and Part IV master programs. Absent a legislative enactment, the Department of Ecology is not authorized to implement the ESA through the guidelines. The guidelines in this respect constitute an improper amendment of the SMA to require master programs to implement the ESA. The guidelines are therefore deemed invalid under RCW 90.58.180(5).
The agreement to engage in formal consultation under section 7 of the ESA is a significant regulatory step. It will entail the preparation of a biological assessment and incidental take statement under 50 C.F.R. § 402.14. The incidental take statement then functions much like a federal permit and establishes enforcement liability under 16 U.S.C. § 1540. That liability includes a cause of action for citizen suits to enforce the conditions imposed under the take statement with respect to development activities under the SMA. Bennett v. Spear, 520 U.S. 154, 169 (1997). The agreement to engage in formal consultations is devoid of an explanation of how the consultation will be conducted, what assurances the state will require and to what extent liability will be imposed or exempted for shoreline permit decisions and developments. The imposition of potential ESA liability on the state and local governments as well as shoreline permit applicants through shoreline master program promulgation, however meritorious, is properly a matter for express legislative authority.
Protecting and restoring salmon habitat is consistent with the policies of the SMA under RCW 90.58.020. That does not support a conclusion, however, that establishing liability under the ESA is supported by the SMA policies. Ecology has the authority to “fill gaps” in shoreline management through the guidelines, Hama Hama Co. v. Shorelines Hearings Board, 85 Wn.2d 441, 448 (1975), but adding federal statutory liability is more than furthering the ends of the SMA. The agreement for formal consultation cannot be supported in our view by the dictate that the SMA be liberally construed to protect shorelines. RCW 90.58.900; Buechel v. Ecology, 125 Wn.2d 196, 203 (1998).
Ecology and the intervening respondents contend that formal ESA consultation is already required for master program approval. Under ESA section 7(a), 16 U.S.C. § 1536(a), any federal agency action, including funding, prompts a consultation to insure that the action “is not likely to jeopardize the continued existence of an endangered species or threatened species.” The relevant federal action here is the approval of the guidelines and master programs under the federal Coastal Zone Management Act by the Office of Coastal Resource Management (OCRM). OCRM becomes involved through federal funding of the state coastal zone management plan that includes prominently the SMA. By virtue of federal funding, consultation under section 7 is required.
The level of consultation required does not necessarily involve the formal consultation and development of an incidental take statement contemplated by the agreement of Ecology and NMFS regarding consultation. Under ESA regulations the initial consultations under 16 U.S.C. § 1536 could result in a determination that formal consultation is not required. 50 C.F.R. § 402.14(a). Since 1991 numerous salmon runs in Washington have been listed as endangered or threatened species under the ESA. 56 Fed. Reg. 58519 (Nov. 20, 1991); 65 Fed. Reg. 7764 (Feb 16, 2000). Notwithstanding these listings, the federal government has approved components of the state coastal zone management plan without requiring the formal consultation now contemplated by the state and federal agencies. This was the case in federal approval of the state coastal nonpoint pollution control program, 65 Fed. Reg. 37094 (July 9, 1998), as well as a review of the state coastal zone management plan in 1999 and funding under the CZMA in 2000 by OCRM.
There is no binding authority for the proposition that Ecology must obtain incidental take statements for master programs. The federal resource agencies are not authorized under the ESA to force Ecology or local governments, outside the context of a federal action, to adopt regulations in conformance with the ESA. Straham v. Coxe, 127 F.3d 155 (1st Cir. 1997); Loggerhead Turtle v. Volusia County, 148 F.3d 1231 (11th Cir. 1998); Loggerhead Turtle v. Volusia County, 92 F.Supp.2d 1296, 1307-8 (M.D. Fla. 2000)(holding that activities on private lands regulated by county caused an unlawful take but refusing to find that county regulations were the cause of the take. Also holding that Tenth Amendment prevents federal courts from ordering changes to local use regulations.)
Ecology resolved the failed effort to obtain ESA coverage under a 4(d) rule for Part IV master programs by agreement to formal consultations under section 7. The federal funding by OCRM would not necessarily trigger formal consultations and has been deployed here as a means to obtain ESA coverage. 50 C.F.R. § 402.14(a). The agreement predetermines this decision and establishes formal consultation and the development of an incidental take statement as a precondition for approval of a master program. This may well be a wise and prudent approach to protect critical shoreline habitat for threatened and endangered species but this approach does not appear to be authorized under the SMA.[5]
2. Do the ESA Compliance Requirements in the Guidelines Violate the Administrative Procedures Act?
Rule-making
procedures under the Administrative Procedures Act (APA) require Ecology to
afford the public notice of the proposed rule and an opportunity to comment on
the proposal. RCW 34.05.320. The purpose of these procedures is to ensure
that members of the public can participate meaningfully in the development of
agency policies that affect them. Hillis v. Department of Ecology, 131
Wn.2d 373, 400 (1997). “Public input
does not dictate the ultimate decisions of the agency, but does allow all interested
parties to have a voice before decisions are made.” Id.
As discussed above, formal consultation under 16 U.S.C. § 1536 will impose substantive legal requirements on the state and local governments as well as shoreline permit applicants. An incidental take statement is required to set forth, among other provisions, “terms and conditions (including, but not limited to, reporting requirements) that must be complied with” to implement the statement. 16 U.S.C. § 1536(b)(4)(C)(iv). The statement operates as a permit and its conditions are mandatory. The terms of the statement are also subject to enforcement including citizen suits under 16 U.S.C. § 1540. In short, formal consultation will have profound impact on the development of revised shoreline master programs and the implementation of the SMA.
Even if we assume that Ecology is fully authorized under the policies and provisions of the SMA to condition master program approval on formal consultation under the ESA, there still remains a significant concern about compliance with the APA. Ecology announced early in 2000 that it was its intent use Part IV to obtained liability protection under the ESA. When the vehicle for that approach failed, the negotiations towards a 4(d) rule, Ecology and NMFS resolved to rely on formal consultation under ESA section 7. That determination was made after the public comment period on the guidelines had closed. The announcement was also devoid of any specificity as to how formal consultation would be conducted procedurally. For example, there is no information as to timing, as to responsibility for preparing biological assessments, participants in the consultation or the mechanisms for amending a proposed master program to be consistent with an incidental take statement. It is not even clear whether Ecology will approve a master program subject to consultation or require consultation prior to its approval of a proposed master program.
Under RCW 34.05.320 Ecology should have afforded the public notice and meaningful opportunity to comment on the decision to seek formal consultation as part of the master program approval process under the guidelines. For this reason, the guidelines should be remanded to Ecology for appropriate rule making.
3. Do the Guidelines Improperly Require Preservation and Restoration of Properly Functioning Conditions?
A critical component of the guidelines is the concept of ecological functions. This term is defined in the guidelines as the “physical, chemical, and biological processes that contribute to the proper maintenance of the aquatic and terrestrial environments that constitute the shoreline ecological systems.” WAC 173-26-020(14). The guideline definition additionally describes relevant functions for specific types of shoreline environment such as water quality and habitat. Id. The guidelines implement the resource protection and restoration elements of shoreline policies under RCW 90.58.020 by use of the ecological function concept in master program development. WAC 173-26-170(1)(d). The guidelines require that master programs contain provisions to protect and to contribute to the restoration of ecological functions. WAC 173-26-200(2)(c). Petitioners have not challenged the technical basis for the concept of ecological functions as used in Part III of the guidelines.
In Part IV
the guidelines employ the concept of “Properly Functioning Conditions” or “PFC”
as an adjunct to ecological functions to protect threatened or endangered
species. PFC is defined as “conditions
that create and sustain natural habitat-affecting processes…that support
productivity at a viable population level of [threatened and endangered]
species.” WAC 173-26-020(36). The definition further provides that PFC is
a subset of the more broadly defined ecological functions focusing on what is
necessary for the recovery of listed species.
Id. Part IV of the guidelines requires that process of developing
master programs include an inventory of PFC.
WAC 173-26-300(2)(c)(ii). The
guidelines set forth several tasks to accomplish this task as well as narrative
objectives for PFC. Id.
PFC was employed as a means to obtain ESA liability coverage under Part IV master programs. It provides a more specific means of maintaining and restoring ecological functions necessary for conservation of listed species. PFC is a concept that has been applied in the context of ESA protections relating to forest practices. Pacific Coast Federation of Fisherman’s Ass’n v. National Marine Fisheries Service, 71 F. Supp. 2d 1063, 1069 (W. D. Wash. 1999). As applied to forest practices, PFC has been expressed as quantifiable indicators. These numeric values have been developed in relatively pristine forest riverine conditions. Similar numeric standards have not been established for urban developed conditions or marine and marine estuary environments. There is some question how PFC will be applied in these environments and Ecology has indicated that it will issue guidance documents to assist local governments in planning under Part IV using PFC.
Petitioners object to this process on the basis that it leaves the development of specific PFC standards up to the federal resource agencies under an incidental take statement and that it improperly defers rule making on numeric criteria to guidance documents. Hillis, 131 Wn.2d at 400. Ecology represents that it has no intention of developing numeric standards or violating APA rule making requirements in any future guidance document. On this record the board is not able to conclude that there is any APA violation by the use of PFC in Part IV of the guidelines. The indication is that PFC, as an accepted concept, will be implemented with guidance that does not violate the APA. Therefore, the petitioners are not entitled to relief.
4. Do the Guidelines Improperly Shift the Balance of Policies Under the SMA?
Petitioners contend that the guidelines place too great of an emphasis on habitat conservation and restoration over the goal of the SMA for “planning and fostering all reasonable and appropriate uses.” RCW 90.58.020. Petitioners point in particular to mandatory restoration requirements and object to these provisions as violations of substantive due process.
In various provisions the guidelines place an emphasis on restoring ecological functions. In rural conservancy environments restoration should be required of new development or redevelopment where ecological functions have been degraded. WAC 173-26-200(4)(b)(ii)(E). In high intensity environments new development should protect and restore shoreline functions. WAC 173-26-210(4)(e)(ii)(A). Similar provisions are applied to urban conservancy environments, WAC 173-26-210(4)(f)(ii)(C), and residential environments, WAC 173-26-210(4)(f)(ii)(C). The guideline definitions provide that “should” means “that the particular action is required unless there is a demonstrated, compelling reason, based on policy of the Shoreline Management Act and this chapter, against taking the action.” WAC 173-26-020(46).
From its inception the SMA has focused on the public use and enjoyment of the shorelines. In many cases the particular concern has been on the visual impact of over water and nearshore development. Bellevue Farm Owners Ass’n v. Shorelines Hearings Board, 100 Wn. App. 341 (1998). The underlying public trust doctrines are themselves based on a public interest in navigation - access to and enjoyment of the shoreline. This concept necessarily includes a component of environmental and habitat, protection. Weden v. San Juan County, 135 Wn.2d 678, 698 (1998)(the doctrine protects environmental quality).
In terms of public access, the SMA has been interpreted to include a restorative function. RCW 90.58.100(2)(b) specifically requires that master programs include an element for public access. This board has in many cases affirmed or required conditions on development that include public access to the shoreline. See, e.g., Citizens for Sensible Growth v. City of Leavenworth, SHB No. 98-024 (1998); Stone v. City of Tacoma, SHB No. 95-045 (1996); Silver Lake Community Council v. Everett, SHB No. 80-004 (1980).
Ecology considered a substantial record in developing the guidelines that existing master programs have not adequately protected and restored ecological functions in our shorelines. The restoration requirements address this concern and implement an important concept within the shoreline policies: “the shorelines of the state are among the most valuable and fragile of its natural resources and that there is great concern throughout the state relating to their utilization, protection, restoration, and preservation.” RCW 90.58.020.[6] The department is authorized to require, as with a public access element in a master program, “any other element deemed appropriate or necessary to effectuate the policy of this chapter.” RCW 90.58.100(2)(i). Ecology has relied on substantial information to conclude that restoration is a necessary element in master programs. Restoration itself is a concept within the policies of the SMA as is protecting “the land and its vegetation and wildlife.” RCW 90.58.020. Petitioners have not shown any basis for ruling that the policy choices and the requirements regarding restoration are invalid.
5. Do the Guidelines Improperly Regulate Exempt Uses under the SMA?
The SMA defines “substantial development” as any shoreline development with a fair market value in excess of $2,500. RCW 90.58.030(3)(e). While substantial development must be permitted under the act, RCW 90.58.140(2), certain activities are exempt from shoreline permitting requirements. RCW 90.58.030(3)(e). These include normal maintenance and repair and protective bulkheads for a single-family residence. Exempt developments must nonetheless be conducted in a manner consistent with the SMA and applicable master program. RCW 90.58.140(1).[7]
Part III of the guidelines regulates exempt uses by requiring that local governments issue letters of exemption to cover activities that are not subject to permit requirements. Those letters must set forth a statement that “All uses and development occurring within the shoreline jurisdiction must conform to chapter 90.58 RCW, the Shoreline Management Act and this master program.” WAC 173-27-190(2)(e)(iii)(A). Part IV of the guidelines requires, in the case of exempt developments, that the letter of exemption include conditions “where necessary to ensure that the development does not cause significant ecological impacts or contribute to potential adverse cumulative impacts.” WAC 173-27-300(2)(g)(i). Under Part IV, the master program must include a mechanism for assuring that the development meets the mitigation requirements of the letter of exemption. This may include a performance bond. WAC 173-27-300(2)(g)(ii). Local governments must also provide a means for final inspection of exempted development and send the results of final inspections to Ecology. Id.
The provisions governing letters of exemption under Part IV exceed the statutory authority of the SMA. The provisions are therefore invalid. The Part IV letter of exemption operates as a permit. It sets forth conditions and requires enforcement mechanisms for those conditions including, possibly, a bond. These terms create a new permitting process for activities that are specifically exempt from shoreline permit requirements. The letter of exemption created in Part IV is also devoid of the procedural requirements of a shoreline permit, or for that matter, any other land use permit. Additionally, the conditioned letters of exemption do not give notice to the public as required under RCW 90.58.140 or an opportunity to appeal the terms of the letter of exemption under the SMA, RCW 90.58.180(1), for the permitee or an aggrieved third party. Putnam v, Carroll, 13 Wn. App. 201 (1975). Because the new guidelines in Part IV essentially create a permit for activities that are specifically exempt for shoreline permits, this particular aspect of Part IV is invalid.
6. Do the Guidelines Effectively Prohibit Gravel Mining in Shorelines?
The Washington Aggregates and Concrete Association contends that the guidelines should be invalidated because they impermissibly restrict and effectively prohibit mining as a shoreline use. Gravel and sand are critical resources to our economy and region. Available deposits of these resources are often found on shorelines. The previous guidelines included mining as a permitted shoreline use. WAC 173-16-060(6), repealed by adoption of chapter 173-26 WAC. This board has recently held that gravel mining is a reasonable and appropriate shoreline use under RCW 90.58.020. Yakama Nation v. Central Pre-Mix Concrete Company, SHB No. 98-042 (1999). The industry association argues that the new guidelines reverse this ruling and effectively prohibit mining without any technical or scientific support in the administrative record.
The industry points to no specific provision in the guidelines that prohibit mining. The guidelines do limit gravel mining to urban and rural conservancy environments.[8] The industry argues that as a practical matter these restrictions limit gravel mining to rural conservancy environments due to the difficulty of expanding and establishing gravel mining operations in developed urban areas. Ecology, in response to comments to the draft rule, added a provision to the criteria for assigning an environmental sub-designation to urban conservancy and rural conservancy for mining activities:
Lands designated “mineral resource lands” pursuant to RCW 36.70A.170 and WAC 365-190-070 may be assigned a subdesignation of “rural conservancy” environment that allows mineral extraction, provided the provisions for that designation conform to WAC 173-26-240(3)(h) and this chapter to protect ecological functions.
WAC 173-26-210(5)(b)(v)(rural conservancy) and (e)(v)(urban conservancy).
There is nothing inherently invalid in this scheme for shoreline environment designations. The industry contends that mineral extraction should be allowed in a natural environment. This is wholly inconsistent with the criteria for natural environment designation. The natural environment is intended to include shorelines that are “ecologically intact and therefore currently performing an important, irreplaceable function or ecosystem-wide process that would be damaged by human activity.” WAC 173-26-210(5)(a)(i). The critical analysis for regulating mining, in terms of shoreline environment designation, is what designation will be applied to mineral resource lands, not whether mining is allowed in a natural environment. This is a matter to be addressed in master programs as they are developed or amended under the guidelines.
A more compelling case for the industry is presented under the guidelines use regulation for mining. The use regulation provides that “where mining and associated activities are allowed, they must be conducted in a manner that is consistent with the policies of the environment designation in which they are located.” WAC 173-26-240(3)(h)(ii). On the face of the rural conservancy environment management policies, this is not possible to achieve. The management policies provide:
Uses is the “rural conservancy” environment should be limited to those which are nonconsumptive (i.e., do not deplete over time) of the shoreline area’s physical and biological resources and uses of a nonpermanent nature that do not substantially degrade ecological functions or the rural or natural character of the shoreline area…
Except as noted below, commercial and industrial uses should not be allowed. Agricultural practices, commercial forestry, and aquaculture when consistent with provisions of this chapter may be allowed. Nonconsumptive, water-oriented commercial and industrial uses may be permitted in the limited instances where those uses have been located in the past or the unique sites in rural communities that possess shoreline conditions and services support the development.
WAC 173-26-210(4)(b)(ii)(A). Gravel mining by its very nature involves a consumptive use of the physical resources of the shoreline and is, therefore, inconsistent with this management policy. The use regulations for mining provides, for example, that “mining alters the natural character” of the shoreline. WAC 173-240(3)(h).
It does not necessarily follow, however, that mining is prohibited under the above quoted use regulations. The use regulations require that mining be consistent with the policies of the environment designation where they will be located. In this case that will be a subdesignation for mineral resource lands. Since mining is inherently consumptive of physical resources, the general management policies for the rural conservancy environment would not apply. The guidelines are not a model of clarity on this point and should have included management policies specific to the subdesignation for mineral resource lands. The management policies for the subdesigination will unfortunately have to be developed in each master program. As written, the management policies in the guidelines for the rural conservancy environment as to industrial activities do not apply to the subdesignation for mineral resource lands or prohibit mining.
By the same reasoning, the use of the term “should” in the above quoted management policies cannot be construed as mandatory. The guidelines define “should” as mandatory “unless there is a demonstrated compelling reason, based on the Shoreline Management Act and this chapter, against taking the action.” WAC 173-26-020(46). Gravel mining is recognized as a reasonable and appropriate use under the SMA policies at RCW 90.58.020. Therefore, the management policies regarding uses that are nonconsumptive of physical resources would not apply. Moreover, the guidelines specifically permit both an environment designation for mineral resource lands and mining as a permitted use. The regulation must be read as a whole to give effect to all of its provisions. It follows then that use of term “should” in the management policies would not be mandatory on mining activities that by their nature result in the consumption of physical resources.
The industry association also challenges the provision in the use regulations that mining not be allowed where it would “result in short-term or long-term significant ecological impacts to shoreline ecological functions.” WAC 173-26-240(3)(h)(i). The petitioner contends that this provision is in effect a prohibition on mining because there is no way to avoid short-term impacts. The focus on the regulation is, however, on short-term “significant” impacts. This issue will be resolved in part through the inventory requirements in developing master programs where local governments must inventory shorelines where significant impacts may occur, WAC 173-26-200(2)(d), and the environment subdesignation for mineral resource lands. Ecology offers a reasonable analysis that the subsdesignation encompasses a determination that mining is a permitted use without significant adverse impact on ecological functions. The guidelines further allow for mitigation of possible adverse impact under WAC 173-26-020(30). The mitigation requirements are substantially the same as existing under the State Environmental Policy Act. WAC 197-11-768.
We do not reach the constitutional challenges of the petitioner on theories of taking[9] or substantive due process.[10] The guidelines on their face do not prohibit or unduly restrict mining as a shoreline use. Therefore, there is no basis for ruling the provisions affecting mining unconstitutional.
In sum, while it is clear that Ecology could have done a better job clarifying the management policies for mining, there is an insufficient basis for deeming the guidelines invalid in the treatment of mining as a shoreline use.[11]
7. Did the Department Violate Requirements to Prepare a Small Business Impact Statement, Implementation Plan and Cost-Benefit Analysis?
The guidelines constitute a significant legislative rule under RCW 34.05.328(c)(iii). Indeed, the guidelines meet all of the alternative definitions of significant legislative rules under the APA provision:
A "significant legislative rule" is a rule other than a procedural or interpretive rule that (A) adopts substantive provisions of law pursuant to delegated legislative authority, the violation of which subjects a violator of such rule to a penalty or sanction; (B) establishes, alters, or revokes any qualification or standard for the issuance, suspension, or revocation of a license or permit; or (C) adopts a new, or makes significant amendments to, a policy or regulatory program.
Id. Quite clearly the guidelines establish qualifications and standards for shoreline permits and make significant amendments to a policy and regulatory program.
An argument can be made that the guidelines constitute a rule “relating only to internal government operations that are not subject to violation by a nongovernment party.” If so, the guidelines would not be subject to the procedural requirements for a cost-benefit plan, an implementation plan or a small business economic impact statement. RCW 34.05.328(5)(b)(ii). The guidelines provide a basis for developing master programs by local governments. Permits issued under those programs must be consistent with the SMA and the master program. RCW 90.58.140(2).[12] Thus, under this argument, it is the master program, not the guidelines, that are enforceable against a nongovernmental party.
We respectfully conclude that this analysis is not consistent with the terms or the spirit of the APA provision. The guidelines are replete with mandatory requirements that must be included in master programs and, therefore, directly regulate nongovernmental parties. For example, new over-water residences “shall” be prohibited, WAC 173-26-240(j); industrial development “shall” not be located in critical areas, WAC 173-26-240(f); and new piers and docks “shall” be allowed only for water-dependent uses or public access, WAC 173-26-230(3)(b). “‘Shall’ means a mandate; the action must be done.” WAC 173-26-020(41). By these terms the guidelines directly regulate and are enforceable against a nongovernmental party.
The fact that the guidelines are significant legislative rules requires that Ecology prepare and include in the rule-making file a determination that the “probable benefits of the rule are greater than its probable costs,” RCW 34.05.328(1)(c), and an implementation plan under RCW 34.05.328(3). The department was additionally required to prepare a small business economic impact statement (SBEIS) in accordance with RCW 19.85.040. RCW 19.85.030.
The Department of Ecology did prepare and include in the administrative record both an implementation plan and cost-benefit analysis. These were submitted in November 2000 after the public comment period had closed. Specific requests had been made during the comment period for the department to release this information for comment. RCW 34.05.328 is silent as to timing for such statements. Under Hillis, however, these documents should have been prepared and submitted for public comment. The petitioners have sought on appeal to offer evidence on the adequacy of these documents. It is difficult and improper in our view to consider this material outside the administrative record. The notice of rule-making under RCW 34.05.320 should have included this information and afforded a reasonable opportunity for public comment and consideration of any comments by the department.
The SBEIS must be prepared and submitted with the initial notice of a proposed rule under RCW 34.05.320. RCW 19.85.030. In this case, Ecology failed to prepare or submit a SBEIS.
We deem the guidelines to be invalid for these procedural flaws and remand the matter to Ecology for proper notice and public comment, as well as completion of the SBEIS.
8. Did the Department of Ecology Improperly Impose an Unfunded Mandate on Local Governments?
The petitioners’ contend that the shoreline guidelines constitute an unfunded mandate under initiatives and referenda adopted in this state. Since Initiative 62 was passed in 1979, the State has been required to reimburse local governments for costs incurred due to increased levels of service or new programs required by state law. This has been reaffirmed in the passage of Initiative 601 and Referendum 47, adopted in 1994 and 1997, respectively. All of these are codified in RCW Ch. 43.135 and RCW Ch. 84.55. The intent of the various enactments is found in the “findings section” which is to:
Assure that the state does not impose responsibility on local governments for new programs or increased levels of service under existing programs unless the costs thereof are paid by the state.
RCW 43.135.010(4)(c).
The specific limitations are found in subsequent sections of the chapter and specifically direct that:
After July 1, 1995, the legislature shall not impose responsibility for new programs or increased levels of service under existing programs on any political subdivision of the state unless the subdivision is fully reimbursed by the state for the costs of the new programs or increases in service levels. Reimbursement by the state may be made by: (a) A specific appropriation; or (b) increases in state distributions of revenue to political subdivisions occurring after January 1, 1998.”
RCW 43.135.060(1)
The state’s obligation to reimburse local governments under RCW 43.135.060(1) arises only if the following two conditions are met: First, if the responsibility is imposed by the legislature; and, second, if the responsibility involves a new program or increased levels of service under an existing program. Seattle v. State, 100 Wn.2d 16, 21 (1983). The duty arises only if the responsibility is imposed by the legislature. The Court has declined to expand the definition of legislature to include all “ state action” or to include authority delegated by the legislature. Seattle v. State, 100 Wn.2d at 22. See also AGO 1980 No. 24 and AGO 1981 No. 5.
Pursuant to ESHB 1724, codified at RCW 90.58.060, the Legislature directed Ecology to update the regulatory guidelines for the SMA. Ecology has fulfilled its duty imposed by the Legislature. The Legislature, not Ecology, possesses the statutory duty to reimburse local governments for any new programs or increased levels of service. RCW 43.135.060(1). Seattle v. State, 100 Wn.2d 16, 21-22. Ecology does not have the ability to transfer monies to local government absent a legislative authorization to expend funds in that manner. Only the legislature possesses the funding authority. Therefore, an alleged violation of RCW 43.135.060(1) must be directed at the Legislature rather than at Ecology. The remedy for this failure, should one exist, is not a determination that the rules are void or invalid, but rather to require the Legislature to fund an activity that is found to be a “new program or increases in service levels”, or for the Legislature to change the mandate to Ecology. The legislature has the authority to do both. Failure on the legislature’s part cannot be imputed to be a violation by Ecology.
An unfunded mandate creates a legal obligation on behalf of the Legislature, not the agency, to reimburse affected local governments. The board does not have the jurisdiction to force the Legislature to act.
The board concludes that the requirements of these guidelines were not imposed by the legislature, but by Ecology. These rules also do not impose a new program, but rather update an existing program. The fact that the legislature did not impose these responsibilities is determinative of the issue. Thus, it is not necessary for the board to determine whether the guidelines impose “increased services to the public”.
9. Do the Guidelines Improperly Conflict with the Growth Management Act?
Petitioners contend that the guidelines improperly usurp the authority of local governments planning under the Growth Management Act (GMA), chapter 36.70A RCW. The guidelines specify the content and the standards for all critical areas ordinances that apply to shorelines. WAC 173-26-220(2). The guidelines direct local governments to consider cumulative impacts by projecting full build-out for the proposed master program. WAC 173-26-200(3)(d)(iii). Additionally, the guidelines require that each local government amend its master program and non-shoreline components of its comprehensive plan to insure consistency between the two. WAC 173-26-190(2)(a).
The GMA provides that a shoreline master program shall be adopted pursuant to the SMA and not the GMA. RCW 36.70A.480(2). The SMA also requires that local governments review their “administrative and management policies and regulations, plans and ordinances” relative to lands adjacent to shorelines to achieve a consistent use policy. RCW 90.58.340. Under this authority the guidelines may direct that comprehensive plan elements affecting shorelines and require that land use policies on adjacent lands are consistent with shoreline policies.
ORDER
Chapter 173-26 WAC is deemed invalid under RCW 90.58.180(5) for (1) exceeding the statutory authority of the Shoreline Management Act by (a) implementing the Endangered Species Act (ESA), and (b) requiring conditioned letters of exemption. The guidelines are additionally deemed invalid for failure to comply with the Administrative Procedure Act requirements for public notice and comments as to (1) formal consultations towards incidental take statements under the ESA, (b) an implementation plan, (c) a cost-benefit analysis and (d) a small business economic impact statement. The guidelines are otherwise deemed valid under RCW 90.58.180(5). The guidelines are hereby remanded to the Department of Ecology for further action in accordance with RCW 90.58.180(6) and the terms of this decision.
SO ORDERED this 27th day of August 2001.
SHORELINES HEARINGS BOARD
JAMES A. TUPPER, JR., Presiding
See Concurrence and Dissent
KALEEN COTTINGHAM
See Concurrence and Dissent
PIERRE PELTIER
See Concurrence and Dissent
MARTIN CARTY
PHYLLIS SHRAUGER
SHB 00-037 FINAL
[1] Petitioners collectively refer to the original petitioners and intervening parties in support of petitioners. Respondents include the Department of Ecology and intervening parties in support of the guideline rule.
[2] Adopted November 29, 2000, WSR 06-24-031.
[3] In Wilbour v. Gallagher, 77 Wn.2d 306, 314 (1969), the Court held that the public held a right to use all waters of a navigable lake or stream regardless of whether the underlying ground is privately owned. In that case the property owners were prohibited from filling a lake bed in a manner that would interfere with the public right of navigation. As a result of this decision Governor Evans imposed a moratorium on all tideland fill projects until the enactment of the SMA. Orion Corporation v. State, 109 Wn.2d 621, 627 (1987).
[4] “The principle that the public has an overriding interest in navigable waterways and lands under them is at least as old as the Code of Justinian, promulgated in Rome in the fifth century A.D. It is also found in the English common law, from whence our own common law is derived, as early as the 13th century…Thus it is that the sovereignty and dominion over this state’s tidelands and shorelands, as distinguished from title always remains in the State, and the State holds dominion in trust for the public.” Caminiti, at 669.
[5] There is some parallel here to the authority of Ecology to implement the public trust doctrine in the area of water resources. In Rettkowski v. Department of Ecology, 122 Wn.2d 219 (1993), the court held that the duty imposed by the doctrine devolves upon the state, not any particular agency thereof. “Nowhere is Ecology’s enabling statute is it given the statutory authority to assume the state’s public trust duties and regulate in order to protect the public trust. 122 Wn.2d at 232. By analogy, the prohibition on taking a listed species under the ESA devolves to the state as well and not to any particular agency absent a grant of legislative authority.
[6] The Department of Ecology is directed under RCW 90.58.060(1) to adopt guidelines that are consistent with RCW 90.58.020. The department has not therefore adopted a rule solely on the policy statements of the SMA. Rather, the terms of RCW 90.58.060 specifically require that guidelines be consistent with RCW 90.58.020. The department has not, therefore, violated its statutory rule making authority under RCW 43.21A.080.
[7] Because all development must be consistent with the SMA and applicable master program, including exempt substantial shoreline development, Ecology may properly require policies and use regulations for exempt uses within a master program.
[8] The guidelines recommend six shoreline environment designations: high-intensity, shoreline residential, urban conservancy, rural conservancy, natural and aquatic. WAC 173-26-210(4). Local governments may establish different designations as long as they consistent with the guidelines. Id.
[9] Manufactured Housing Communities of Washington v. State, 147 Wn.2d 347, 355 (2000).
[10] Guimont v. Clarke, 121 Wn.2d 586, 609 (1993).
[11] There is no inherent conflict between SEPA and the guidelines. The guidelines do not direct how SEPA is administered. There is also no conflict between the guidelines and the Surface Mining Act, chapter 78.44 RCW. The Surface Mining Act by its terms does not preempt the provisions of the SMA. RCW 78.44.050.
[12] Where a master program has not been adopted, a shoreline permit must be consistent with the applicable guidelines. RCW 0.58.140(1).