Date of Adoption: January 5, 1999.

Purpose: To establish criteria for determining when to exchange aquatic tidelands and shorelands, and to implement the requirement of RCW 79.90.457.

Citation of Existing Rules Affected by this Order: This is a new section in chapter 332-30 WAC.

Statutory Authority for Adoption: RCW 79.90.457.

Adopted under notice filed as WSR 98-19-108 on September 23, 1998 and WSR 98-21-093 on October 21, 1998.

Changes Other than Editing from Proposed to Adopted Version: RCW 34.05.325 (6)(i), Department of Natural Resources reason for adopting WAC 332-30-170.

•	In 1971 the legislature prohibited the sale of state-owned aquatic lands to private individuals. However, sales before 1971 left a patchwork of public and private ownerships. In 1995, the legislature recognized that exchanging certain aquatic lands could benefit the public.
•	The legislature authorized the department to exchange state-owned tidelands and shorelands with private and other public landowners, if the exchange is in the public interest and will actively contribute to the public benefits established in RCW 79.90.455:
	(1) Encouraging direct public use and access;
	(2) Fostering water-dependent uses;
	(3) Ensuring environmental protection;
	(4) Utilizing renewable resources.
	(5) Generating revenue in a manner consistent with these benefits.
•	The legislature, in RCW 79.90.457, specified that: "(t)he board of natural resources shall adopt rules which establish criteria for determining when a proposed exchange is th [in] the public interest and actively contributes to the public benefits established in RCW 79.90.455."

RCW 34.05.325(6)(ii), differences between proposed rule and adopted rule.

RCW 34.05.325(6)(iii), comments received and responses.

Comments and Revisions on the Shorelands and Tidelands Exchange Rule: The department received comments from John Woodring, Mason Morisset and the Suquamish and Tulalip tribes. The Board of Natural Resources and the Assistant Attorney Generals provided suggestions. The department incorporated many of these comments, removed some repetition, and clarified some language. The summary below does not address deletion of repetitive wording, or minor changes to clarify language. The comments are organized by rule section. Comments that did not result in changes to rule language are discussed at the end of this section.

WAC 332-30-170 Introduction

Added: The phrase "pursuant to RCW 79.90.457." This is to clarify that transactions to clear title under other laws (e.g. transactions under RCW 79.94.150) are not addressed by this rule.

Subsection (1)

Added: The language "if the proposed exchange meets the eligibility criteria set forth in this rule. To be eligible, the exchange must satisfy the condition in (a) and (b) of this subsection." This is to make clear what constitutes an eligible transaction.

Subsection (1)(a)

Deleted: The requirement that the Economic Cost Analysis and Environmental Cost Accounting be included in the economic analysis. We concluded that the phrase "accomplished through a methodology accepted by the department," could accomplish the same results without limiting our options.

Subsection (1)(b)

Changed: The word "parcel" to "tidelands or shorelands." This language will address the potential ambiguity on whether uplands would be considered in exchange.

Subsection (1)(c)

Moved: To subsection (2) Evaluation Criteria (a) and reordered the list of evaluation criteria to clarify what the department staff will consider in determining the greatest public benefits.

Subsection (2)(a)(i)

Deleted: The phrase "state approved watershed natural resource management planning groups(s)." Specific reference to these groups was deemed not to be appropriate because there are no standards for habitat/environmental designations by these groups.

Subsection (2) introduction

Added: The phrase "Subject to available funding." This language was added to make clear that the department need only consider exchanges when supported by available funding.

Added: The sentence "The department will give priority and preference to proposed exchanges which in the department's judgement are in the public interest by providing the greatest public benefits, the least negative impacts, and the most appropriate resolution of other considerations, as set forth in (a), (b) and (c) of this subsection." The Board of Natural Resources suggested this language to clarify that the department be able to consider multiple eligibility criteria. This language also addresses the board's question of when an exchange would be in "the public interest."

Created a new subsection (2)(b) and listed criteria that department staff must consider in evaluating the least negative impacts from a proposed exchange.

Subsection (2)(b)(iv)

Added: The sentence "The department will solicit comments on a proposed exchange from affected tribes." The Tulalip Tribes were concerned that a change of ownership would change tribal access. This language makes clear the department's intent to solicit comments from affected tribes. The requirement that a proposed exchange have no negative impact on treaty rights addresses their concerns on treaty rights, cumulative impacts on treaty rights and tribal consent to exchanges affecting treaty rights.

Subsection (3)

Changed heading to: Recommendation to the Board of Natural Resources.

Deleted: The sentence "In addition to considering the enhanced public benefits that may be associated with a proposed exchange, the department must also consider any associated negative impacts to public benefits and resources, including impacts affecting the management of state resources." This language was incorporated into the revised subsection (2)(b).

Added: The sentences "The department will provide its recommendations to the Board of Natural Resources in writing, addressing whether the exchange meets the criteria in this rule and the positive and negative impacts of the exchange on public benefits and resources. The department will provide copies of its recommendations to the proponent of the exchange." The Suquamish Tribe commented that there should be language in the rule requiring documentation of the recommendation.

Comments and Issues Not Addressed in the Rule:

Filled Shorelands and Tidelands: John Woodring suggested adding language specifically allowing the exchange of filled tidelands and shorelands. We did not add this language. The current rule draft does not prohibit exchange of filled tidelands and shorelands. No specific language is necessary.

Filled Bedlands: John Woodring asked that if DNR felt it had authority to exchange filled bedlands we also add that language as part of this rule making. We did not add this language. This rule should be limited to exchanges authorized under RCW 79.90.457 so we did not add language on filled bedlands. An exchange involving filled bedlands would not be eligible under the current version of the rule.

Cultural Resources: The Tulalip Tribes' Fisheries, Wildlife and Enforcement Department and tribal attorney, Mr. Mason Moriset felt that the rule did not adequately address nor protect cultural resources. We did not add this language in response to these requests. Cultural resources on private lands are protected by statute. In the process of evaluating exchanges and consulting with the tribes, we will take the impacts of proposed exchanges on cultural resources into consideration.

SEPA: The Tulalip Tribes also feel that the SEPA environmental checklist for this rule making did not adequately address possible impacts of tideland exchanges. The Tulalips argue that Part B of the checklist which deals with specific project impacts on environmental elements was not sufficiently completed. However, the exchange rule is a nonproject action. Part D is the supplemental sheet for nonproject actions. We filled out Part D. This section recognized the possibility of both positive and negative environmental impacts resulting from uses of the land following an exchange (generally land exchanges are categorically exempt from SEPA under WAC 197-11-800). This is a major policy issue which does not have to be addressed within the language of the proposed rule.

Procedural Issues: The Suquamish Tribe requested language in the rule on procedures for the structure of an exchange application, time lines for administrative review, a requirement that DNR must consider all submitted proposals and a detailed methodology for determining the economic value of the land. Program staff spoke with Scott Wheat, tribal attorney. In that discussion Mr. Wheat agreed that we could address these issues in the application process and materials rather than in rule.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 1, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 0, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 1, Amended 0, Repealed 0. Effective Date of Rule: Thirty-one days after filing.

March 10, 1999

Jennifer M. Belcher

Commissioner of Public Lands

OTS-2755.1

NEW SECTION
WAC 332-30-170
Tideland and shoreland exchange.

The department will use this rule when it considers exchanging tidelands or shorelands with private individuals or public entities pursuant to RCW 79.90.457. The department may exchange these aquatic lands if the exchange is in the public interest and will actively contribute to the public benefits established in RCW 79.90.455. Those benefits are: Encouraging direct public use and access; fostering water-dependent uses; ensuring environmental protection; utilizing renewable resources; and generating revenue in a manner consistent with these benefits. The department may not exchange state-owned harbor areas or waterways.

(1) Eligibility criteria. The department may consider exchanging ownership of tidelands or shorelands with private and other public landowners if the proposed exchange meets the eligibility criteria set forth in (a) and (b) of this subsection.

(a) The economic values of the parcels must be equal or the exchange must result in a net economic gain to the state. The economic value must be determined by a qualified independent appraiser and/or economist and accomplished through a methodology accepted by the department.

(b) The tidelands or shorelands to be conveyed into state ownership must abut navigable water.

(2) Evaluation criteria. Subject to available funding, the department will evaluate eligible proposed exchanges according to the following criteria. The department will give priority and preference to proposed exchanges which, in the department's judgment, are in the public interest by providing the greatest public benefits, the least negative impacts, and the most appropriate resolution of other considerations, as set forth in (a), (b) and (c) of this subsection.

(a) The tidelands or shorelands to be conveyed into state ownership must have one or more of the following characteristics:

(i) Be or abut a critical and/or an essential habitat identified by the National Marine Fisheries Service, state natural resource management agency(s), and/or the United States Department of Fish and Wildlife;

(ii) Be or abut a critical area identified by jurisdictions under chapter 36.70A RCW;

(iii) Be an area beneficial to sediment transport and/or nearshore habitat function identified by the National Marine Fisheries Service, state natural resource management agency(s), and/or the United States Department of Fish and Wildlife;

(iv) Be actively used or abut a parcel used in the commercial production of food or fibre or other renewable resource production (for example, commercial grade beds of shellfish and aquaculture facilities);

(v) Abut a state or national wildlife refuge;

(vi) Abut an upland parcel with public upland ownership, easements, or some other formalized agreement that would allow direct public use of and access to the water;

(vii) Be actively used or abut parcel(s) actively used for water-dependent uses or allow for water dependent use;

(viii) Contain a historic or archaeological property listed on or eligible to be listed on the National Register of Historic Places; or

(ix) Generate or have the potential to generate higher revenues than the parcel being transferred out-of-state ownership in a manner consistent with the benefits listed in RCW 79.90.455.

(b) The proposed exchange must have beneficial or no negative impacts on:

(i) Navigation;

(ii) The diversity and health of the local environment including the production and utilization of renewable resources;

(iii) The quantity and quality of public access to the waterfront;

(iv) Treaty rights of federally recognized tribes. The department will solicit comments on a proposed exchange from affected tribes; and

(v) Hazardous waste and contaminated sediments liability issues.

(c) The following issues must also be considered:

(i) Consistency with plans and development guidelines of public ports, counties, cities and other local, state, and federal agencies;

(ii) The relative manageability of the tidelands or shorelands to be exchanged including, but not limited to, the effect of the exchange on management costs, liability and upland access, and the relative proximity of the tidelands or shorelands to be exchanged to other state-owned shorelands or tidelands; and

(iii) The cumulative impacts of similar exchanges on water dependent uses, nonrenewable and renewable natural resources, and total aquatic lands acreage managed by the department.

(3) Recommendation to the board of natural resources. The department will provide its recommendations to the board of natural resources in writing, addressing whether the exchange meets the criteria in this rule and the positive and negative impacts of the exchange on public benefits and resources. The department will provide copies of its recommendations to the proponent of the exchange. In general, an exchange should only be recommended by the department and approved by the board of natural resources when, in the department's and the board's judgment, the public benefits associated with the exchange outweigh the negative impacts or other diminution in public benefits.

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