New ESA Rules Create Confusion
Jany K. Jacob
(Reprinted from Seattle Daily Journal of Commerce)

        There seems to be quite a bit of uncertainty among developers and contractors these days on the ramifications of the new “4(d) rule” on permitting in Washington. This rule was promulgated under the authority of the federal Endangered Species Act (“ESA”). The ESA, codified at 16 U.S.C.A. § 1531-1544, is administered by the Department of Commerce through the National Marine Fisheries Service (“NMFS”) and by the Department of Interior through the Federal Wildlife Service (“FWS”). NMFS has the authority to list both marine and anadromous fish (i.e. fish that are born in fresh water bodies, go out to sea, and then return to fresh water bodies to spawn and eventually die). The Secretary of the FWS has the authority to list any terrestrial or fresh water species or subspecies. When a population is “listed” it is either designated as “endangered” or “threatened,” the latter being less severe.

Four Critical Provisions
        The ESA contains four provisions of interest to the construction industry: First, Section 4 of the Act sets out the criteria for the listing of a species. Second, Section 9 prohibits a “taking” of any species listed as either endangered or threatened. A “take” means to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture or collect. 16 U.S.C.A. §1532(19). “Harm” is further defined to include any activity that may cause a disruption in the normal behavioral patterns of a listed population. 50 C.F.R. § 17.3; see also, Babbitt v. Sweet Home Chapter of Communities for a Greater Oregon, __ U.S. __, 115 S.Ct. 2407 (1995). Third, Section 10 of the ESA pertains to Incidental Take Permits which are similar to a variance and obtainable if the applicant provides the administering agency with an acceptable Habitat Conservation Plan that sets out how the effects of the proposed activity on a listed species will be mitigated. In order to obtain such a permit, the taking itself must be incidental to the proposed activity rather than the intended purpose of the proposed activity. 16 U.S.C.A. § 1539. Fourth, Section 11 imposes civil and criminal liability for violations of the ESA. Civil penalties may be as high as $10,000 per violation of Section 9 of the Act, and criminal liability for a knowing violation may involve a $20,000 fine and one year of imprisonment. In addition, the government may seek to enjoin any activity that violates Section 9, and the ESA contains a citizen suit provision under which environmental groups may sue developers and contractors directly.

        Pursuant to 16 U.S.C.A. § 1533(d) or “4(d),” NMFS has the authority to issue regulations for the conservation of any threatened species. A “4(d) rule” sets out the criteria for what constitutes a taking of the listed species such that Section 9 liability will be triggered. Last July, NMFS published such a rule pertaining to the Puget Sound Chinook salmon (and listing it as a threatened species). This listing went into effect on January 8, 2001. The rule exempts certain activities (called “limitations”), including some hatchery programs, private habitat conservation/ restoration activities, properly screened water diversion devices, certain development activities in urban areas (known as the “urban limitation”), and Washington’s forest management activities. The 4(d) rule also specifies some high risk activities that may trigger ESA liability. These include: constructing roads adjacent to listed species habitats; constructing bridges above listed species habitats; constructing dams or other water diversion structures in a listed species habitat (i.e. the concern here is with adequate water for in-stream flows); and any earth-moving that increases the sediment load of streams in a listed species habitat.

Confusion
        The new 4(d) rule has already left developers, contractors, and their lawyers wondering whether land use regulations in this state will be turned on their head. To add to the confusion, environmental groups have sued the government on the 4(d) rule because, in their opinion, the criteria contained in the rule does not adequately ensure that only appropriate conservation plans will be approved for the issuance of an incidental take permit, and/ or because they oppose the exemption of Washington’s forest management practices. For its part, the Tri-County Executive Committee (comprised of King, Pierce and Snohomish County Executives) has submitted a regional conservation plan to NMFS to obtain the urban area limitation status under the 4(d) rule. The Tri-County proposal includes provisions pertaining to stormwater controls and road maintenance practices. This proposal is currently being considered by NMFS.

        Washington’s Department of Ecology has proposed guidelines to comply with the federal 4(d) rule by making revisions to the Shoreline Management Act, RCW Ch. 90.58, and adopted a final rule on November 29, 2000. In addition, Washington’s Department of Fish & Wildlife had proposed to commence a process to make rules adopted under the state Hydraulic Code, RCW 75.20.100, consistent with the ESA, but has since withdrawn that proposal while it awaits a formal review of the existing HPA (Hydraulic Permit Approval) rules by NFMS and the FWS to determine if those rules meet ESA requirements. Washington’s Hydraulic Code involves project impacts on fisheries in this state and the Shoreline Management Act (“SMA”) addresses substantial development permits for projects valued over $2500 or projects that interfere with the public use of water. The new SMA regulations will impose habitat restoration requirements on new developments in Washington state. Under the new SMA rules, the costs for habitat improvements will be imposed on the development community, which is especially disconcerting considering that the Legislature approved the creation of a Salmon Recovery Funding Board in 1999 to fund salmon habitat restoration, but the SMA rule provides no mechanism to coordinate these two efforts. Developers and contractors also worry that over-regulation and additional red tape will affect the economy as a whole by driving out critical businesses from Washington, such as the manufacture side of Boeing. Indeed, it appears that permitting has already come to a standstill in the face of the ESA-related permit backlogs at the federal, state and local levels.

Legal Challenge

        A coalition of businesses and local governments is currently challenging the new SMA regulations on the grounds that the rules exceed statutory authority, and the Associated General Contractors of Washington is a party to this effort. Local governments oppose these new regulations because they are essentially unfunded mandates, and businesses on procedural grounds as well as because they exceed statutory authority afforded to the Department of Ecology under the SMA. The new regulations also expand the definition of what constitutes a “shoreline” and significantly increase regulatory hurdles for bulkhead construction and modifications thereto. It remains to be seen how the new SMA regulations will change the playing field for developers and contractors to conduct business in this state and, in the meantime, it appears that almost anything will be easier than obtaining a construction permit.