Northwest Land Matters Update - May 2017

May 1, 2017

Conservation Easements: A Powerful Land Use, Estate, and Tax Planning Tool

Duncan Greene

Conservation easements are legal agreements that restrict property use for ecological, open space, farmland preservation, or other similar purposes, typically “in perpetuity” (which means “forever,” at least in theory). In Washington State, conservation easements may be sold or donated to nonprofit land trusts, counties, cities, tribes, or other eligible entities. As explained below, a landowner can derive a variety of estate planning and tax benefits from the sale or donation of a conservation easement, including a potential reduction in federal income taxes, estate taxes, and/or gift taxes.

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IN BRIEF

FEMA Announces Draft Nationwide Programmatic Environmental Impact Statement (NPEIS) for the National Flood Insurance Program (NFIP)

The Federal Emergency Management Agency (FEMA) recently announced the availability of the Draft National Flood Insurance Program’s (NFIP) Nationwide Programmatic Environmental Impact Statement (DPEIS). The NFIP draft NPEIS includes an evaluation of the potential impacts to the natural and human environment associated with the NFIP at a programmatic level, as well as an evaluation of impacts of alternative proposals to modify the NFIP. What is notable is that these proposed changes would require local jurisdictions and project applicants (at different phases in the process) to “obtain and maintain documentation of compliance with” the ESA as a condition of permit approval or a map amendment. The Biological Evaluation for the NFIP (prepared by FEMA as part of a nationwide ESA consultation) and DPEIS explain how a private applicant submitting for a Conditional Letter of Map Amendment can meet the requirement, but do not appear to spell out what is required by local jurisdictions. If you would like more information, please contact Molly Lawrence who has been closely monitoring the NFIP Reauthorization effort, which is currently underway, and FEMA’s efforts to change its implementation of the NFIP to address ESA concerns, particularly in Washington and Oregon.

HALA Open House Workshops Happening Now

The City of Seattle Office of Planning & Development (OPD) is holding a series of open house workshops, through July 30th to support the Housing and Livability Agenda ( HALA) rezone legislation, which will affect over 20 Urban Village communities throughout the City. The workshops are being held in affected neighborhoods and are being generally well attended as residents consider proposed city-wide updated zoning maps.

The rezones are intended to provide increased opportunity for low and moderate income housing through a package of Mandatory Housing Affordability (MHA) legislation. The MHA imposes new requirements for developers of each new commercial and multi-family residential development to either include affordable housing as part of their development, or make a payment to support affordable housing in Seattle. In exchange for creating affordable housing, developers will be able to access additional zoning capacity (the proposed HALA rezones). Other cities within the region such as Issaquah, Kirkland, and Federal Way have already begun to use this program to address affordable housing needs. MHA, when adopted, would increase the size of allowable development and include an affordable housing requirement. OPD staff point out, the great preponderance of proposed rezones would add approximately one story of development potential within Urban Villages. Although in some cases rezones from Single Family to Neighborhood Commercial allowing up to 7 stories has been proposed. The package of legislation is currently in draft form. A draft EIS analyzing the environmental impacts of the legislation is anticipated to be published in May with OPD staff aiming for a FEIS in late summer.

The Importance of Full Disclosure by Elected Officials During an Appeal Hearing

On April 4th, the Court of Appeals ruled against Thurston County awarding plaintiffs a $12 Million damage award related to the County Commissioners failure to disclose communications with parties opposed to the plaintiff’s position. In Maytown Sand and Gravel LLC v. Thurston County, Maytown’s mining permits were appealed to the Board of County Commissioners by opponents. Commissioners conducted private meetings and other communications with those opponents but failed to disclose those during the appeal hearing. After such communications, the Commissioners remanded the original permit decision back to the Hearing Examiner to determine whether certain critical areas, which the Hearing Examiner had found were not protected pursuant to prior approvals, should be protected.

The mine operator appealed the Commissioners’ decision to superior court under the Land Use Petition Act (LUPA) and filed a damages action. The trial court reinstated the Hearing Examiner decision, ruled that the LUPA Petition did not render the Plaintiff’s complaint for damages moot, and concluded that the County Commissioners’ actions were arbitrary and capricious. A jury then found that the County had tortiously interfered with the contract between the mine and its landlord, the Port of Tacoma, that the County had made negligent misrepresentations to the mine operator, and had violated the mine operator’s substantive due process rights.

The Court of Appeals confirmed that a LUPA appeal does not bar a separate tortious interference claim. The appeals court also affirmed the substantive due process claim, finding that the permit was a protected property right and that Maytown had proven that the actions of the Commissioners, in failing to disclose their communications with the opposition group members, was arbitrary and could be characterized as “shocking the conscience.” In reversing the trial court’s decision, the Court of Appeals also held that Maytown’s attorney’s fees were recoverable as damages in the tortious interference action, because legal action had to be taken to address damages resulting from the tort.

Ecology Issues Revised Stormwater, NPDES, & Waste Permit

On March 22, 2017, the Washington State Department of Ecology issued the revised Construction Stormwater NPDES and State Waste General Permit (CSWGP). The permit becomes effective May 5, 2017, and expires December 31, 2020. The revisions, intended to respond to and resolve issues raised in an appeal challenging Ecology’s prior version of the permit, modify provisions related to concrete washout areas and sampling requirements for concrete work, and allow use of both uncontaminated and potable water for dust control. In addition, Ecology modified the permit to require parties to include engineering calculations for treatment systems in their SWPPP. The revisions also provide guidance on use and protection of LID facilities, and clarify that parties must include off-site areas of disturbed acreage (including parking and storage areas) in their disturbed acreage calculations. In some cases, the disturbed acreage calculation guidance may require parties to resubmit their applications with a revised total disturbed acreage to include previously excluded off-site areas, and in other cases push projects over the one acre threshold for permit coverage.

Parties with pending applications, or those currently covered under the permit whose construction will extend beyond May 5, must apply to seek continuing coverage under the revised permit. If you have questions about applying for coverage, including resubmittal of an application for continuing coverage for an existing project, please contact Brent Carson, Duncan Greene, or Carly Summers. You can find a copy of the revised CSWGP, a redline of the permit revisions, and a summary of the revisions, at Ecology’s CSWGP page.

CEQ Withdraws Greenhouse Gas Guidance Per Trump Executive Order

The recent Presidential Executive Order on Promoting Energy Independence and Economic Growth directed CEQ to rescind its final guidance on consideration of greenhouse gas emissions and the climate change effects in NEPA reviews. CEQ has officially withdrawn that guidance. The Federal Register notice is included here. Even with the withdrawal of the guidance, however, agencies that ignore these issues in their NEPA reviews do so at their peril (and that of the project proponents whose projects are the subject of those reviews). The withdrawal of the guidance may not substantially change how federal agencies undertake their analysis of greenhouse gas emissions and climate impacts. While the guidance was instructive regarding the scope of the agencies’ review, its withdrawal does not alter the requirement that agencies must consider all reasonably foreseeable direct, indirect, and cumulative impacts of their proposed actions. Likewise, the withdrawal does not negate court decisions that have determined that the statute requires consideration of these impacts.

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