6-3300-7122-1
STATE OF MINNESOTA
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE MINNESOTA BOARD OF WATER & SOIL RESOURCES
In the Matter of the Proposed REPORT OF THE
Rules to Implement the Wetland ADMINISTRATIVE LAW JUDGE
Conservation Act of 1991
Public hearings on these proposed rules were held at 1:00 p.m. and
7:00 p.m. in the following locations:
December 7, 1992 Alexandria
December 9, 1992 Thief River Falls
December 10, 1992 Grand Rapids
December 14, 1992 Marshall
December 15, 1992 Mankato
December 17, 1992 St. Paul
Attendance at each of the hearing sessions was substantial, with more
than 200 persons at each location. The written transcript of the hearings
occupies more than a thousand pages. More than 200 written comments were
submitted during the post-hearing comment period.
The Board of Water & Soil Resources had one or more of its members in
attendance at each of the hearings. The Board was represented by Special
Assistant Attorney General A. W. Clapp III. The Board panel included Greg
Larson and John Jaschke, as well as personnel from the Board's regional
offices.
The Board of Water & Soil Resources must wait at least five working days
before taking any final action on the rules; during that period, this Report
must be made available to all interested persons upon request.
Pursuant to the provisions of Minn. Stat. 14.15, subd. 3 and 4, this
Report has been submitted to the Chief Administrative Law Judge for his
approval, If the Chief Administrative Law Judge approves the adverse findings
of this Report, he will advise the Board of actions which will correct the
defects and the Board may not adopt the rule until the Chief Administrative
Law Judge determines that the defects have been corrected. However, in those
instances where the Chief Administrative Law Judge identifies defects which
relate to the issues of need or reasonableness, the Board may either adopt the
Chief Administrative Law Judge's suggested actions to cure the defects or, in
the alternative, if the Board does not elect to adopt the suggested actions,
it must submit the proposed rule to the Legislative Commission to Review
Administrative Rules for the Commission's advice and comment.
If the Board elects to adopt the suggested actions of the Chief
Administrative Law Judge and makes no other changes and the Chief
Administrative Law Judge determines that the defects have been corrected, then
the Board may proceed to adopt the rule and submit it to the Revisor of
Statutes for a review of the form. If the Board makes changes in the rule
other than those suggested by the Administrative Law Judge and the Chief
Administrative Law Judge, then it shall submit the rule, with the complete
record, to the Chief Administrative Law Judge for a review of the changes
before adopting it and submitting it to the Revisor of Statutes.
When the Board files the rule with the Secretary of State, it shall give
notice on the day of filing to all persons who requested that they be informed
of the filing.
Based upon all the testimony, exhibits and written comments, the
Administrative Law Judge makes the following:
FINDINGS OF FACT
Procedural Requirements
1. On October 27, 1992, the Board filed the following documents with the
Chief Administrative Law Judge:
(a) A copy of the proposed rules certified by the Revisor of Statutes.
(b) The Order for Hearing.
(c) The Notice of Hearing proposed to be issued.
(d) A Statement of the number of persons expected to attend the hearing
and estimated length of the Agency's presentation.
(e) A Statement of Additional Notice.
(f) The Certificate of the Board's authorizing resolution.
(g) A schedule of ten information meetings to be held around the State
immediately prior to the hearings.
(h) Minutes of the Board's September 30 - October 1 meeting ordering the
rules for publication.
2. On October 29, 1992, the Board filed its Statement of Need and
Reasonableness, along with a group of exhibits to support it, and a list of
the names of Board personnel who would represent the Agency at the hearing.
3. On November 2, 1992, a Notice of Hearing and a copy of the proposed
rules were published at 17 State Register 976.
4. On November 7, 1992, the Board mailed the Notice of Hearing to all
persons and associations who had registered their names with the Board for the
purpose of receiving such notice. In addition, a copy of the notice and
proposed rule was mailed to all 91 soil and water conservation districts, 41
watershed districts, 42 watershed management organizations, 141 other local
government units, approximately 300 interested citizens who had requested a
copy of the proposed rules, and a variety of other government and quasi-
government entities.
5. Appendix A to the SONAR is a six-page set of examples using the
wetland type index system proposed in the rules. Two of the six examples
contained an error as originally filed. On November 20, 1992, the Board filed
a corrected version of Appendix A to the SONAR. The November 20 filing
corrected the error in those two examples. (Ex. 3 and Ex. 4.) No person
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complained about this during the hearing process, and it is found that the
erroneous filing did not deprive any person or entity of an opportunity to
participate meaningfully in the rulemaking process. The error is, therefore,
a harmless error.
6. On December 7, 1992, at the start of the first public hearing, the
Board formally entered the procedural documents into the record. In addition
to those already noted above as having been previously filed with the
Administrative Law Judge, the Board entered the following documents:
(a) A copy of the State Register containing the Notice of Hearing and
proposed rules.
(b) The Board's certification that its mailing list was accurate and
complete.
(c) The Affidavit of Mailing the Notice to all persons on the Board's
list (and others, as noted above).
(d) A copy of the Notice of Intent to Solicit Outside Opinion which was
published at 16 State Register 2038 on March 9, 1992. Later in the
hearing process, on December 17, 1992, the Board introduced the
three letters which had been received in response to its
solicitation (Exhibit 15a), as well as a variety of news releases,
advertising material, newsletters, and newspaper articles about the
rules and the hearings. Ex. 33.
7. Minn. Rule pt. 1400.0600 requires that certain of the jurisdictional
documents noted in the immediately preceding Finding be filed with the
Administrative Law Judge at least 25 days prior to the hearing. This was not
done. However, only one person asked the Administrative Law Judge for an
opportunity to view any of the documents within the 25 days prior to the
hearing, and that person did not raise the issue of the Board's failure to
timely file them during the public hearing process. No person raised the
issue in any manner. It is found that all of the necessary documents are in
the record, and that no person was prejudiced by the Board's failure to file
some of them prior to the start of the hearing. No person was deprived of an
opportunity to participate meaningfully in the rulemaking process. The
Board's failure was, therefore, a harmless error within the meaning of Minn.
Stat. 14.15, subd. 5 (1992).
8. The period for submission of written comments and statements
remained open through December 31, 1992, the period having been extended by
Order of the Administrative Law Judge to 14 calendar days following the last
hearing session. The record closed for all purposes on January 8, 1993, the
fifth working day following the close of the comment period.
Statutory Authority
9. Minn. Stat. 103B.101, subd. 7 (1992) authorizes the Board to
"adopt rules necessary to execute its duties".
10. Minn. Stat. 103B.3355 (1992) directs the Board, in consultation
with the Commissioner of Natural Resources, to "adopt rules establishing
criteria to determine the public value of wetlands".
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11. Minn. Stat. 103G.2242, subd. 1 (1992) directs the Board, in
consultation with the Commissioner, to "adopt rules governing the approval of
wetland value replacement plans". The subdivision goes on to identify a
number of issues and procedures which the rules may address,
12. No one seriously questioned the Board's overall authority to adopt
these rules. There were specific questions raised about whether or not
particular rules were authorized or conflicted with various statutory
provisions. Those questions will be dealt with in the context of the
particular rule at issue. The Administrative Law Judge concludes, as a
general matter, that the Board does have statutory authority to adopt the
proposed rules.
Introduction and scope of this report
13. The Legislature has authorized and directed the Board to adopt
rules . Before those rules can take effect, however, the Legislature has
required that they be subjected to a public hearing process and review by an
independent third party, the Administrative Law Judge. The scope of the
Administrative Law Judge's review, however, is not unlimited. The
Administrative Law Judge's duties have also been specified by the
Legislature. They include the preparation of a Report which is to include a
review of the degree to which the Board has:
(i) documented its statutory authority to take the
proposed action,
(ii) fulfilled all relevant, substantive and procedural
requirements of law or rule, and
(iii) demonstrated the need for and reasonableness of its
proposed action with an affirmative presentation of
facts.
14. Many of the rules proposed by the Board are controlled by the detail
of the statute. Most of the persons who spoke at the hearings and most of the
persons who submitted written comments made suggestions that require changes
in the statute, as well as the rule. Many of the rules are based on specific
language or specific procedures required by the statute. It is impossible for
the Board to adopt those suggestions until the statute has been amended. The
Board can only adopt rules which are consistent with the current statute. The
numerous criticisms of the Board's proposed rules that are really criticisms
of the statute cannot be recommended by the Administrative Caw Judge nor
adopted by the Board, until the statute is changed. The Legislature has
required that the proposed rules, and the public comments on the proposed
rules, be submitted to the Agriculture and Environment Committees by March 1,
1993. The Legislature has prohibited the Board from finally adopting the
rules until at least sixty (60) days after these materials have been
submitted. Therefore, the Legislature will have an opportunity to review the
public comments and determine whether it is appropriate to change the
statute. This Report will not deal with those suggestions which require
statutory changes. The majority of them are based upon substantial
philosophical differences with the current statute, and only the Legislature
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can resolve those. Instead, this Report will focus upon those areas where
public comment suggested that the rule was:
(1) beyond the Board's statutory authority, or in
conflict with the current statute;
(2) not supported by the Statement of Need and
Reasonableness; or
(3) was unnecessary or unreasonable.
15. Some of the proposed rule provisions received no negative public
comment and were adequately supported by the Statement of Need and
Reasonableness. This Report will not specifically address those provisions in
the discussion below. It is found that the need for and reasonableness of
those proposed rules which are not discussed below has been demonstrated, and
that the Board does have statutory authority to adopt them. The discussion
which follows will only address remaining substantive issues of need,
reasonableness or statutory authority.
16. In order for the Board to meet its burden of demonstrating
reasonableness, the Board must demonstrate that the rule is rationally related
to the end sought to be achieved. Blocher Outdoor Advertising Co. v.
Minnesota Deptment of Transportation, 347 N.W.2d 88, 91 (Minn. App. 1984).
This demonstration may be either by adjudicative facts or legislative facts.
Manufactured Housing institute v. Pettersen, 237 N.W.2d 238, 244 (Minn.
1984). The Board must show that a reasoned determination has been made, as
opposed to an arbitrary one. Id. at 246. It is not the job of the
Administrative Law Judge to declare a rule to be unreasonable simply because a
more reasonable alternative was proposed, or a better job of drafting might
have been done. An agency is entitled to choose among possible alternative
standards so long as its choice is one that a rational person could have made,
and the choice does not conflict with the statute. federal Sec. Adm'r v,
QuaKer Oats Co,, 318 U.S. 218, 233 (1943). This Report will not attempt to
select the "best rule" from among the various options proposed by the Board
and the commentators. Instead, it will only determine whether the Board's
rule is a reasonable one. See, Memorandum at the end of this Report.
17. After the hearings had concluded, and the initial comment period had
ended, the Board's staff reviewed the record and proposed numerous changes
(modifications) to the rules in response to the public comments. This Report
will focus on the "modified version" of the rule, and will not dwell on the
rule as initially proposed. In each case where the Board has proposed a
change from the rule as originally proposed, the Administrative Law Judge must
determine whether or not the new rule constitutes a "substantial change" such
that interested persons were denied an opportunity to comment. The
Administrative Law Judge finds that the changes proposed by the Board do not
constitute "substantial changes".
18. Substantial change problems were lessened by the form of the Hearing
Notice which was issued by the Board. In addition to the normal description
of the rules, the Board laid out five specific issues where public comment was
particularly invited. In four of the five cases, the descriptions of the
issues offered alternatives for public comment. An example of this technique
is the following:
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Whether, when a wetland is drained or filled without
replacement under an agricultural exemption, the notice
of agricultural use should be required to be recorded
with the deed only when the land is in a city, or in all
cases .
After listing the five issues, the Board inserted the following statement
in the Notice:
Since the purpose of the hearing is to improve the rule
as proposed, interested persons must understand that the
final rule may differ from the rule as it is now proposed.
In addition to highlighting those five issues in the Notice, the Board staff
also highlighted them in their introductory remarks at the start of each
hearing session. The Board also laid out the five issues in press releases
which it issued prior to the start of the hearings.
Definition of Agricultural Land
19. Agricultural land is given favored treatment in the statute and the
rules. There are two principal places where this occurs. First of all, there
are exemptions which apply only to wetlands on agricultural land. Secondly,
the replacement ratio for wetlands on agricultural land is only half as large
as the replacement ratio that applies to non-agricultural lands. Because of
the favored treatment given to agricultural land, the question of how that
term is defined became a hotly contested one.
20. The statute itself gives no definition of the term.
21. The definition proposed by the Board is a split definition. For
purposes of determining whether or not the exemptions are available, the Board
has proposed a relatively narrow definition. However, for purposes of
determining the applicable replacement ratio, the Board has proposed a broader
definition. The Board supported this use of two definitions by pointing to
the overall goal of the law, which is to achieve "no net loss" in the
quantity, quality, and biological diversity of existing wetlands. By
providing only narrow exemptions from the replacement requirements, the
quantity of wetlands lost will be minimized. Nonetheless, the adverse impact
on farmers who must replace drained wetlands (because they do not fit into one
of the exemptions) will be minimized if they must only replace at a 1:1 ratio,
rather than a 2:1 ratio. Therefore, the Board reasoned, applying a broad
definition, and maximizing the opportunity for 1:1 replacement, will still
result in "no net loss".
22. Public comments on the Board's proposed rule were numerous and
diverse. There were those who thought the Board's proposed split definition
allowed too many wetlands to be drained without replacement, and should be
tightened up as much as possible. On the other hand, some commentators
believed the Board's proposed definitions were far too restrictive, and did
not allow farmers enough latitude to earn a living. Some even urged that the
term "agricultural land" be defined to include not only crop land, pasture and
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gravel pits, but also hunting, trapping, and recreational land. Tr . 26.
There were a number of allegations about what the Legislature intended.
2 3. Minn. Stat. 645.16 provides that when the words of a law are not
explicit, the intention of the Legislature may be ascertained by considering,
among other matters:
(1) the occasion and necessity for the loss;
(2) the circumstances under which it was enacted;
(3) the mischief to be remedied;
(4) the object to be attained;
(5) the former law, if any, including other laws upon
the same or similar subjects;
(6) the consequences of a particular interpretation;
(7) the contemporaneous legislative history; and
(8) legislative and administrative interpretation of the
statute.
The rulemaking record does not contain the kind of legislative history that
would enable a finding of legislative intent to be made with any certainty.
Two of the authors of the House bill, Representatives Willard Munger and
Marcus Marsh, both testified to a narrow definition of "agricultural land".
Munger at Tr. 809, and Marsh in a letter dated December 28. However,
Representative Bertram, who was also heavily involved in the bill, testified
to the variety of farming practices that exist in different parts of the state
and the difficulty in trying to come up with a definition that treated them
all fairly. He pointed out that he did not know what the intent of the entire
Legislature was, and thought it "humorous" to hear firm and unequivocal
statements of legislative intent from persons with opposite ideas of what the
intent was. Representative Bertram stated that he could tell what his intent
was, but that other legislators might well have had different intents of what
the language in the bill meant. Tr. 70-75. Indeed, the Board, in its
post-hearing submission on the issue, pointed out that they had received
exactly opposite opinions from legislators.
24. The record demonstrates that the Board (and its two drafting
committees, the Wetland Heritage Advisory Committee and the Rule Working
Group) deliberated long and hard over this issue. They were presented with a
number of options to choose from, and the ultimate decision in favor of a
"compromise" split definition was a reasoned one. For example, the record
contains a memo dated May 11, 1992 from Special Assistant Attorney General
Clapp setting forth a variety of options from other statutes, and a June 3
memo from Greg Larson showing how the various options would work. The Board
chose to use a split definition with these materials available. The
Administrative Law Judge concludes that the Board's split definition has been
justified as a reasonable response to the problem.
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25. During the hearings, one person noted that the Board's definition of
agricultural land did not include farm yards or lands which would be used for
building farm barns or sheds. Paul Brutlag, at Tr. 312-13. He said that land
used for farm buildings ought to be treated the same as land used for crop
production. The Board agreed with this comment to the extent that it was
willing to add the language "and associated buildings" to that part of the
definition of "agricultural land" which applied to the reduced replacement
ratios, so that a wetland drained or filled for a silo would still have to be
replaced, but only at a 1:1 ratio, rather than a 2:1 ratio. The change is
reasonable, and is not a substantial one.
Related Defiitions
26. Both parts of the split definition of "agricultural land" include
two terms that drew criticism and comment. Those terms are "introduced
pasture" and "introduced hayland". Both are defined in the proposed rules as
being in "agricultural crop production" if they meet any one of a number of
tests. One of the tests is that they have been interseeded with introduced
species at least once during the 20-year period before January 1, 1991. The
definition of introduced hayland goes even further -- it will be considered
agricultural land if it has been interseeded with introduced or native species
at least once during the 20-year period before January 1, 1991.
27. A concern about the definitions of "introduced pasture" and
"introduced hayland" is that they are impossible to enforce, because it is
impossible to determine whether or not a piece of ground was interseeded
within the last 20 years. One commentator asserted that USDA offices do not
keep records of interseeding, and interseeding may or may not show up on
aerial photographs. Tr. 698. Another stated that the ASCS only keeps records
for ten years. Clearwater SWCD, letter of December 18. The Department of
Natural Resources, whose conservation officers are the primary persons who
will be enforcing the Act, stated that the proposed definitions would be "very
difficult to verify, creating significant enforcement problems." Letter of 17
December, 1992; Tr. 839. Clearwater SWCD stated that it would be almost
impossible for people to prove that they had interseeded (Id.) A similar
concern over enforceability came from the Isaac Walton League, which asserted
that enforcement would be extremely difficult. Letter of December 17. The
Department recommended that the once in 20-year limitation in planting and
twice in 10-year limitation on harvesting be changed to twice in ten years for
planting and twice in five years for harvesting. These are the time periods
used in the RIM definitions (Minn. Rule pt. 8400.3030). The Department urged
that in the interests of consistency and simplicity, as well as
enforceability, that the RIM definitions be substituted for the Board's
proposed definitions.
28. The Board justified its proposals by pointing out that the rule
drafters began with the RIM definitions, but then the Heritage Advisory
Committee modified them to make them less restrictive as a compromise between
those trying to minimize loss of wetlands and those seeking broad application
of the exemptions to all farmers. SONAR, p. 4-5. While the Administrative
Law Judge is hesitant to upset policy compromises that took many hours to
achieve, it is a matter of great concern when those who will be doing most of
the enforcement state that the proposed definition will create significant
enforcement problems because it would be very difficult to verify. The
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Department, presumably, has had experience in enforcing the RIM program and
working with its definitions. It is, therefore, in a good position to
evaluate the practicality of verification.
29. Difficulties in verification are a two-edged sword: not only is an
enforcement officer unable to determine if a violation has occurred, but also
a landowner may be unable to prove entitlement to an exemption. Absent some
scheme of filing with the ASCS, SWCD or other type of body, it will be very
difficult for a landowner to convince a skeptical LGU or enforcement officer
that land was, in fact, cropped or interseeded 18 or 19 years ago.
30. The Board has failed to demonstrate the reasonableness of its
proposed definitions of introduced hayland and introduced pasture insofar as
they are based on unenforceable measures. In order to cure this defect, the
Board must adopt definitions that have some reasonable likelihood of objective
verification and consistent enforcement. The Department's experience with the
RIM program would support the timelines in the RIM definitions as being
verifiable and enforceable. There may be other timelines which have also been
demonstrated in the record to be verifiable and enforceable, but the
Administrative Law Judge is not aware of any. Therefore, he recommends that
the Board adopt the timelines in the RIM definitions. Another alternative
would be for the Board to fashion some sort of verification provision whereby
longer timelines, such as 20 years, could be used if the landowner could
prove, by aerial photographs, ASCS records, or some other reliable means, that
the activities had, in fact, occurred.
Other Definitions
31. The statute and these rules both provide that an impacted wetland
must be replaced by a wetland within the same watershed or county, with a few
major exceptions. One of the exceptions is described in the statutes as
follows:
Wetlands impacted by public transportation projects may
be replaced statewide, provided they are approved by the
commissioner under an established wetland banking system,
or under the rules for wetland banking as provided for
under section 103G.2242.
One of the issues that arose during the public hearing process was the
proposed definition of "public transportation projects". The rules define a
"public transportation project" as a project "conducted by a public agency
involving transportation facilities open to the public". Representative
Munger testified that it was the intent of the Legislature to limit this
benefit to projects administered by the Minnesota Department of
Transportation. He explained that MNDOT had created a wetland mitigation bank
at the time of the 1991 enactment with the anticipation of being able to use
it for statewide projects. Representative Munger pointed out that the Board's
proposed rule covers any kind of public transportation, including airports,
trains, public transit and similar projects, and is not limited to the state
Department of Transportation. Tr. 809. A similar comment was made by the
Wetlands Conservation Coalition (Letter of December 31), which urged that the
definition be rewritten to apply solely to projects conducted by the state
Department of Transportation.
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32. In response, MNDOT (Letter of December 24) and the Association of
Minnesota Counties (Letter of January 8) both point out that had the
Legislature intended to limit transportation projects to MnDOT projects, they
clearly could have. The AMC comment notes that a number of counties were in
the process of implementing a banking program similar to that of MNDOT, and
there is no reason why their transportation projects should not be treated
similarly to MnDOT's.
33. The Board, in its Statement of Need and Reasonableness and in its
post-hearing submission, justified its definition as consistent with the
statute. They point out that the statute contains no special preference for
MNDOT, and that it would be improper for the Board to impose one. The
Administrative Law Judge accepts the Board's position. If the Legislature
intended a narrower interpretation, it will have an opportunity to insert it
following the March submission.
34. The statute contains a list of 24 specific exemptions, which are
applicable so long as three conditions are followed. The conditions relate to
appropriate erosion control, not blocking fish passages in a watercourse, and
compliance with other applicable governmental requirements, including best
management practices. While most of the exemptions drew no substantial
comment (other than comments directed at the statute, which will not be dealt
with here), there were some general provisions relating to exemptions and some
specific exemptions that did draw comments worthy of discussion below.
35. Exemptions 1, 2, 4, 7, 8, and 23 (known as the "agricultural
exemptions") all contain similar language, which reads as follows:
Present and future owners can make no use of the wetland
area after it is altered, other than as agricultural land
for ten years, unless it is first replaced . . . . If
the local government unit approves an exemption, the
landowner must execute and the local government must
record a notice of this restriction If the Wetlant II In
a City. [Emphasis added].
Discussion focused on whether recording should be required statewide, or just
in cities. The theory behind requiring the recording of an exemption is that
a buyer purchasing land which had been drained using an agricultural exemption
might not know that the land could not be converted to non-agricultural use
for ten years, unless the restriction was recorded. During the rule drafting
process, persons argued that recording was a burdensome requirement to place
upon all landowners, and that it was most likely that conversion to non-ag
uses would occur in cities, rather than in unincorporated areas, and so the
recording requirement ought to be limited to cities. This was the position
adopted by the Board, but the Board did recognize it was controversial and
identified it as one of the five issues for particular attention during the
public hearing process.
36. Public opinion was strongly in favor of imposing the reporting
requirement in all locations, not just in cities. The general rationale was
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that conversion to non-ag uses was likely to occur before incorporation or
annexation to a city, and not afterwards, and that the minimal cost and burden
of recording (estimated at an average of $17.00 around the State by the
Builders Association of Minnesota in a December 31 letter) was relatively
minor in comparison to the damages that could occur to an innocent buyer who
was unaware of the restriction.
37. In response to the public comments, the Board's post-hearing
submission recommended that the five agricultural exemptions all be modified
to require recording in all locations, not just in cities. The Board
volunteered to make notice forms available locally, so that all a landowner
would have to do would be to fill in a property description and then take it
to the county recorder. The Administrative Law Judge concludes that the Board
has justified the need for and reasonableness of its modified proposal.
38. The Board may wish to consider the comments of the Minnesota State
Bar Association's real property section, which proposed that the rule contain
minimum criteria for a proper notice. The minimum criteria would be the
following:
1. the name or names of the land owners;
2. the name and address of the LGU granting the
exemption;
3. a complete legal description (a tax description,
street address or tax identification number is not
adequate) of the real property affected by the
restriction; and
4. the date on which the 10-year restriction expires.
The real property section recommended that all landowners named should sign
the notice, and that the notice be acknowledged so as to meet the requirements
of the recording act. Letter dated December 31. The Board's proposed rule
cannot be said to be inadequate or unreasonable without the real property
section's recommendations, but the Board should consider them to avoid any
problems with the forms it has offered to provide to landowners.
39. In addition to the change to require recording, the Board also
proposed that each of the five agricultural exemptions receive a new sentence
which would provide that for ten years, the wetland could not be restored for
replacement credit. This is really more of an editorial change than a
substantive one, as the same prohibition is contained in another part of the
rule, part 8420.0540, subpart 2. That provision states:
Wetlands drained or filled under an exemption may not be
restored for replacement credit for ten years after
draining or filling.
The wisdom of that restriction was another of the five Issues identified for
particular comment.
40. During the rule drafting process, some persons argued that if a
wetland is drained under an exemption (so that it is not rep I aced elsewhere) ,
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it should never be allowed to be restored for "credit" so that some other
wetland can be drained in its place. Other persons felt that an absolute
prohibition was too severe, and that some length of time (ten years was
ultimately selected) would be long enough to discourage abuses of the
exemption provisions. One of the most widely debated topics was whether or
not created wetlands were as good as restored wetlands in terms of providing
biological diversity and wetland values. Those people who favored a ten-year
limitation, as opposed to an absolute prohibition, pointed out that restoring
an old wetland is often better than creating a new one, and that one of the
act's goals was to restore previously drained wetlands.
41. The Board, in its Statement of Need and Reasonableness and in its
post-hearing comments, took the position that a ten-year limitation was
adequate to prevent abuse, yet still allow the use of previously drained
wetlands for replacement. The Administrative Law Judge concludes that the
Board has demonstrated the need for and reasonableness of its two proposals
regarding these agricultural exemptions -- that it is desirable to repeat the
ten-year limitation in each exemption so that it is clearly understood, and
that it is appropriate to record the fact that an exemption has been taken in
all locations, not just in cities.
42. Exemption 3 relates to drainage systems. The statutory exemption
allows the following: "Activities necessary to repair and maintain existing
public or private drainage systems as long as wetlands that have been in
existence for more than 20 years are not drained." The Board's rule goes on
to specify how spoil material from the repair and maintenance activity must be
dealt with and what documentation is required.
43. The bulk of the opposition to the Board's rule was really directed
at the statute, for it is the statute that contains the 20-year wetland
provision. The gist of the comments was that if a landowner had paid for the
right to drain land, the landowner ought to be able to exercise that right at
any time, and if that requires repairing or maintaining an unused ditch, then
the landowner ought to be able to do so without any time limitation. See, for
example, Tr. 55-56, 237, 248-49, 324. The pros and cons of this question will
not be discussed here, as the 20-year rule merely tracks the statute, and any
changes must come from the Legislature.
44. A Marshall County commissioner pointed out that the exemption does
allow the filling of a wetland resulting from the side casting of spoil
materials when the wetland is located within the right-of-way acreage of the
ditch. Some of the ditches in Marshall County do not have any right-of-way
beyond the width of the ditch itself, and thus would not be able to use the
exemption for the efficient placement of spoil materials. Tr. 293. The Board
acknowledged that its intent had been to allow for side casting, and proposed
the addition of language which would allow side casting either within the
right of way or within a one-rod width on either side of the top of the ditch,
whichever is greater, so long as the spoil deposition area is permanently
seeded into grass to avoid erosion problems. The Administrative Law Judge
finds that this is a reasonable accommodation for those ditches without
rights-of-way, and that it is not a substantial change.
45. Exemption 6 deals with activities authorized under general permits
issued by the United States Army Corps of Engineers. It tracks, verbatim, a
statutory exemption. The record suggests that since the time that the act was
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passed in the spring of 1991, there have been changes to the Corps' program
and negotiations between the Corps and the Minnesota Pollution Control Agency
over appropriate regional conditions have caused the language in the act and
the rule to be out of date. There did not appear to be any substantive
disagreement with the concept of the exemption; rather, the problem occurs as
a result of changes in the Corps program. The Board may want to consider
seeking legislative amendment of the statute so that it can adopt the current
version of the Corps exemption.
46. Exemptions 7 and 8 are expected to be two of the most frequently
used exemptions, and the ones that triggered much of the debate over the
definition of "agricultural land". Exemption 7 exempts activities in a Type I
wetland on agricultural land (except for bottomland hardwood type I wetlands),
while Exemption 8 exempts activities in a Type 2 wetland on agricultural land
that is two acres in size or less. In the case of both exemptions,
Representative Marsh (Letter of December 28) recommended that the rule be
changed so that the local government unit would be required to seek the advice
of the technical panel as to whether the wetland were a type I or 2 wetland or
not, rather than the Board's permissive language which merely allowed the LGU
to seek the advice of the technical panel. Marsh felt that it was a clear
violation of legislative intent not to require the use of the technical panel
for these two exemptions. A similar issue arises in later language regarding
the role of the technical panel in connection with replacement plans.
47. There is a statutory provision which discusses the role of the panel
in connection with replacement plans, but the Administrative Law Judge does
not read that provision as extending to exemptions. There is no corresponding
statutory directive regarding the technical panel's use for exemptions.
Therefore, the Administrative Law Judge does not believe the Board's proposed
language for these exemptions conflicts with the statute.
48. Substantial criticism was directed at the exemption for road and
bridge maintenance. The statute, at section 103G.2241, subd. l(a)(16) exempts:
Activities associated with routine maintenance of
existing public highways, roads, streets, and bridges,
provided the activities do not result in additional
intrusion into the wetland and do not result in the
draining or filling, wholly or partially, of a wetland.
The rule explains that this exemption does not prevent repairing washouts or
adding material to the driving surface so long as the road's occupancy of the
wetland does not increase.
49. Many comments were received to the effect that this exemption is too
limited, and that it ought to allow for upgrades to Improve the safety of
roads without having to go through the entire process of the rules. A number
of persons pointed out that forest roads were treated better than public
roads, even though forest roads often went through more "pristine" areas and
were for private profit, rather than the public good. The Board's basic
reaction to the testimony was to point out that there was another exemption
available for the maintenance of existing roads -- the use of Corps Nationwide
Permit 14, which the Legislature did allow to be used for maintenance of
existing roads, but not for new roads. Pursuant to Exemption 6 of these
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rules, work which is done in conformity with Corps Permit 14 (except for new
roads) would be exempt. Tr. 120.
50. The Administrative Law Judge finds that the complaints regarding
road maintenance must be directed to the Legislature, not to the Board. The
Board has in no way restricted the availability of the exempti on as it is
written in the statute, and if it is going to be changed, it must be changed
by statute.
51. An interesting alternative is proposed by Wright County. The county
pointed out that its highway department has worked with the local soil and
water conservation district to restore wetlands along highways and create
additional wetlands. The County proposes that if a wetland is the result of
highway construction, then some reasonable intrusion ought to be allowed for
highway maintenance. The County points out that if maintenance is going to
require mitigation in the future, then the County may not make such an effort
to create new wetlands in the future. Tr. 857.
52. A question has arisen as to whether or not a person draining or
filling a wetland under an exemption must obtain an exemption certificate from
the LGU, or whether the exemption certificate process is merely voluntary.
The statute is silent on the question. The Board's proposed rule makes it
voluntary on the part of the landowner, but specifies that if a landowner does
request a certificate of exemption, and is entitled to one, then the local
government unit must issue one. The rule specifies, however, that an
exemption applies whether or not the LGU chooses to issue certificates of
exemption or not.
53. Representative Munger urged that certification be mandatory. He
pointed out that a formal certificate would make it easier for owners,
contractors and enforcement officers to deal with the legitimacy of an
action. Tr. 813. Others, however, urged that there was no reason to have a
certificate in each case, and it was appropriate to leave it up to the
landowner as to whether or not one was obtained. The utility industry, for
example, felt comfortable without obtaining one in each case, feeling it would
be a waste of time for both them and the LGUs. Letter of January 8. The
Association of Minnesota Counties thought the current language was just right,
because it did allow the landowner the option. Letter of January 8. The
Builders Association of Minnesota urged that the rule be clear in setting
forth whether or not a certificate was required. Letter of December 31.
54. The Administrative Law Judge concludes that the Board has justified
its rule as reasonable. As will be discussed below, there were numerous
complaints from LGUs regarding the cost of this program, and requiring a
certificate in each case would only add to the cost for both LGUs and
landowners. Giving the landowner an option to obtain one or not is a
reasonable approach.
Minimis Prgvision
55. The Act does not contain any de minimts provision. The Board felt,
however, that it must specify some amount of impact that is so small as to not
warrant attention. The Board picked 100 square feet as that amount, reasoning
that it was small enough not to conflict with the Legislature's decision to
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put no minimum size in the Act, and yet not so small as to be totally
meaningless. The Board coupled that with restrictions to avoid cumulative
impacts that would exceed that amount. The proposed rule reads as follows:
A landowner unsure if proposed work will result in a loss
of wetland may apply to the local government unit for a
determination. The local government unit shall issue a
no-loss certificate if . . . the draining or filling will
be minimal and not warrant replacement. This item is
applicable if the total wetland loss will be less than
100 square feet per year per landowner, and the
cumulative impact on a wetland over time without
replacement after January 1, 1992, of draining and
filling by all persons does not exceed five percent of
the wetland's area.
56. This provision drew a host of negative comments, and only a few
supportive ones. Most commentators said 100 square feet was too small.
Recommendations were made for one-tenth of an acre, one-half an acre, one
acre, two acres, three acres, all the way up to five acres. The basic concept
expressed was that the administrative time and money, both for the landowner
and the LGU, to deal with very small wetlands was simply out of proportion to
their value, and there should be some realistic de mintmis provision. One
commentator pointed out (advocating four or five hundred square feet "as a
bare minimum") that the law should generally follow ordinary peoples'
perception of what is minor and what is not minor, and 100 square feet was
simply too small. Tr. 22. Cass County, which has been operating under the
interim rules, has 71 open files, and 80% of them deal with areas less than
2,000 square feet. The County noted that jurisdictional Size is a statutory
issue, but if there is no change in the statute, then there must be some
streamlining of the process for very small parcels. Tr. 413. Representative
Munger pointed out that the Legislature did not include any minimum impact
provision, and urged that any attempt to enlarge the size from the 100 square
feet should be discouraged. Tr. 810.
57. In its post-hearing submission, the Board pointed out that the
difficulty with setting any particular limit is the fact that the Legislature
elected not to: The Legislature rejected the Corps' Nationwide Permit No. 26,
which exempts isolated wetlands less than one acre in size, and the
Legislature did not extend its one-half acre exemption for utility lines even
so far as to include public roads. In light of this history, both the Wetland
Heritage Advisory Committee and the Rule Working Group accepted 100 square
feet as the maximum that could be allowed without encroaching on the
legislative judgment. The Board pointed out that the Act was passed in order
to protect wetlands that were not protected by other agencies, and thus
proposals to increase the Ye minimis amount to the same amount as the Corps of
Engineers or other existing permit programs would be pointless. As will be
discussed more fully below, the Board did propose a change in an attempt to
streamline some of the procedural requirements applicable to small wetlands,
but left the 100-square de minimis amount intact.
58. The Administrative Law Judge agrees with those who claim that it is
for the Legislature, not the Board, to determine the scope of the law. The
general rule is that the Legislature may confer discretion on an agency
regarding the execution or administration of the law, but it may not give an
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agency the authority to determine what the law shall be or supply a
substantive provision of the law which the agency believes the Legislature
should have included in the first place. Wallace v. Commissioner, 184 N.W.2d
588, 594 (Minn. 1971). An agency cannot limit its jurisdiction through
rulemaking. The Legislature, not the agency, determines the scope of the
agency's jurisdiction. leisure HillS of Grand Rapids, Inc. v. Levine, 366
N.W.2d 302, 304 (Minn. App. 1985). On the other hand, it is absurd to believe
that the Legislature intended that every square centimeter of wetland be
protected. State , Kulvar, 266 Minn. 408, 123 N.W.2d 699 (1963). It is
permissible for an agency to draw a "line of absurdity", but any more
substantial limitation on its jurisdiction must be drawn by the Legislature,
not the agency. The Administrative Law Judge believes that 100 square feet is
a reasonable choice for a de minimis provision based on a "line or absurdity"
rationale. It is up to the Legislature to decide if some more substantial
number ought to be used.
59. Minnesota Power, on behalf of the utility industry, pointed out that
the language regarding issuance of a no-loss certificate was not as clear as
the language regarding an exemption certificate, and that it ought to be clear
that a certificate was not required in each case, as that would be a waste of
LGU time. The Administrative Law Judge agrees that the language is not as
clear, but that the outcome of the two is the same. To avoid confusion,
however, he suggests that the Board consider taking language from the first
paragraph of part 8420.0210, the exemption provision, and use it in the
no-loss provision, so that there is no question but that a certificate is not
required. The existing no-loss determination is not unreasonable or illegal
without the change, but clarification would assist readers.
Replacement Plan Procedurel
60. A person desiring to drain or fill who does not qualify for one of
the exemptions or no-loss provisions is required to replace the lost wetland
values. The statute requires that the process for this replacement is to be
the preparation of a replacement plan, followed by approvals from the LGUs
involved. The details of that process drew substantial criticism as being too
complicated, too onerous, and too time consuming, particularly for small
impacts. After noting its belief that it could not increase the de minimis
impact without a legislative change, the Board did propose to modify the
procedures so as to minimize the work required for small impacts. Some of
those changes are discussed below.
The initial draft of the rule imposed the same notice requirements for
applications on all replacement plans, regardless of size. A number of
commentators recommended that this be changed, to more appropriately tailor
the notice requirements to the size of the impact. The Dakota Soil and Water
Conservation District and the Builders Association of Minnesota, along with a
number of others, all recommended that there be some streamlining of the
notice for smaller projects. The Board has now proposed that the procedures
be different depending on the size of the project. The Board divided projects
into three classes: 0.1 acres or less; 0.1 acres to 0.5 acres; and 0.5 acres
or more. With regard to notice, for example, the largest impacts (one-half
acre or more) would have to give notice to all of the entities listed in the
statute, including publishing in the EQB Monitor and a local newspaper.
However, for impacts between .1 and .5 acres, the requirement for publication
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in the EQB Monitor would be dropped. For the smallest class of impacts, only
those agencies who requested notice would have to receive it, and there would
be no notice to the Board itself or publication in a local newspaper or the
EQB Monitor. Instead, the governing Board of the LGU and the technical
evaluation panel and the watershed district or watershed management
organization would be the only required notifications.
61. The statute, in section 103G.2242, subd. 6, requires that certain
notif I cation and pub I I cation occur whenever a replacement plan is filed with
an LGU. The statute makes no exceptions for small impacts or medium sized
ones. It treats all of them the same. In the face of clear statutory
language requiring that something occur, the Board cannot adopt a rule which
Imposes the requirements on some applicants but not all. Presumably the Board
would advocate the same "line of absurdity" rationale that was adopted
earlier, but it does not apply in this kind of a situation. If the
Legislature wants the Board to receive a copy of every replacement plan, no
rule can vary that requirement. If the Legislature wants notice published in
the EQB Monitor or wants neighbors notified by publication in a newspaper of
general circulation, it can require that. None of those requirements are so
absurd as to place them beyond the "line of absurdity". The Board's proposed
modifications to the notice provisions of part 8420.0230 (page 25, line 6
through 19, along with lines 23 and 27) conflict with the statute, and cannot
be adopted. In order to cure this defect, the Board must either return to its
original proposal, as published in the State Register, or propose language
which does not conflict with the statute.
Technical Evalvation Panel Makeup
62. The statute, in section 103G.2242, subd. 2, specifies the following:
Questions concerning the public value, location, size, or
type of a wetland shall be submitted to and determined by
a technical evaluation panel after an on-site
inspection. The technical evaluation panel shall be
composed of a technical professional employee of the
board, a technical professional employee of the local
soil and water conservation district or districts, and an
engineer for the local government unit. The panel shall
use the "Federal Manual For Identifying and Delineating
Jurisdictional Wetlands" (January 1989). The panel shall
provide the wetland determination to the local government
unit that must approve a replacement plan under this
section, and may recommend approval or denial of the
plan. The authority must consider and include the
decision of the technical evaluation panel in their
approval or denial of a plan.
While a great deal of controversy focused upon the role of the technical
panel, an initial matter which must be discussed is the makeup of the panel.
The Board has proposed the following rule:
For each local government unit, there is a technical
panel of three persons: A technical professional
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employee of the board, a technical professional employee
of the soil and water conservation district of the county
in which the activity is occurring, and an engineer or
their designee for the local government unit. One member
selected by the LGU shall act as the contact person and
coordinator for the panel. Two members of the panel must
be knowledgeable and trained in applying methodologies of
the [federal manual], and evaluation of public values.
The technical panel may invite additional wetland experts
to help the panel in its work.
63. Several counties complained that the rule constituted "micro
management", and that they ought to be allowed to have a variety of people on
their panels. Lake County, for example, has placed other persons on interim
panels, and intends to continue to do so for "grass roots" input. Tr. 438.
St. Louis County has a wetland coordinator, a DNR hydrologist, a county land
department specialist, etc., that they would like to be able to place on their
panels. Tr. 470. Both want the flexibility to name their own panels.
64. The Board responded to these suggestions by pointing out that the
statute mandates the membership of the committee, and that adding other voting
members of the panel raises the possibility of the panel being "stacked" one
way or the other. The Board noted that adding additional members as technical
advisors or ex-officio members is a good way to involve local citizens,
resource managers, scientific experts, etc., but that limiting voting rights
to the three members prescribed in the statute is appropriate.
65. The Administrative Law Judge finds that the Board has justified its
proposal as reasonable. The statute binds the Board, and the Board's rule is
reasonable. The Board did make other minor changes in response to public
input, but none of them are substantial.
Technical Evaluation Panel Role
66. One of the five issues identified by the Board for particular
attention was the question of the Technical Evaluation Panel's role.
The basic question is whether or not the panel must be used whenever a
replacement plan is submitted to a local unit of government, or whether the
technical panel need only be used when a local unit of government has
questions. The Board's Rule Working Group was unable to reach consensus on
this issue, but the Wetland Heritage Advisory Committee elected to have the
panel review all plans and make recommendations on those plans to the LGU.
That was the position set forth in the second paragraph of part 8420.0240.
When it made that decision, however, the Advisory Committee did not notice
that it also needed to adjust language in another section in order to keep the
two consistent. That other section is part 8420.0510, subp. 3, which proposes
using the panel only when questions arise. Therefore, the rules as published
in the State Register contained an inconsistency, but the Board's notice of a
hearing alerted people to this issue so that a great deal of comment was
received.
67. The weight of the comments supported the optional use of the panel,
primarily because of perceived difficulties of cost and time if the panel were
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to be used in each case. Todd County, for example, indicated that between
April I and December 7 of 1992, it received 70 applications for replacement
plan approvals. It pointed out that in the summertime, spring and fall,
county engineers are really busy, and that the Board conservationist who must
also be on the panel, has to cover more than one county. Tr. 46. The City of
Breezy Point, in Crow Wing County, suggested it might take three or four
months to convene the panel, given the workload of the various people
involved. Tr. 374. Even the American Society of Civil Engineers, whose
members might be hired to staff technical panels in particularly busy areas,
believes that it would be impractical to have a panel in every case.
Tr. 433. The Gun Club Lake Watershed Management Organization (in Dakota
County) indicated that its experience is that the majority of wetland
replacement issues can be addressed in a technically sound manner without
going through the time and expense of convening the panel. The
Ramsey-Washington Watershed Board said a large majority of impacts are clear,
and no questions arise. Both urged that LGUs be given the discretion of when
the panel should be used.
On the other hand, there were persons who urged that the panel should be
used in every case, and never be bypassed. The Minnesota Wildlife Society
indicated that the purpose of the panel was to ensure that technical decisions
are based on scientific analysis, and the technical panel was clearly designed
to provide just that. Tr. 40. The Wetland Conservation Coalition, a
coalition of environmental and sports groups, urged that using the panel in
each case would result in fair and uniform decisions across the State. It
argued that this was a compromise between those who wanted a centralized
program and those who wanted a decentralized one, and that using the panel in
all cases would at least provide some objective input into a decision that
might otherwise be driven by the temptation for development and tax revenue.
Tr. 88 and letter dated December 31. Representative Munger indicated that the
panel should be used in every case so that the LGU decisions are based on the
most information possible. Tr. 809.
68. After considering all of the comments, the Board chose to modify the
rule to clarify that the panel need only participate on an as-needed basis,
but that it had to be used upon request of the LGU, the landowner, or any
member of the panel itself. The Board felt this arrangement provided checks
and balances, but placed responsibility with the LGU for making decisions on
routine projects without requiring another level of review.
69. The Administrative Law Judge finds that the statute is not clear
with regard to whether the LGU was to be used in all situations, or only when
there were questions. He further finds that the Board's modification is a
reasonable one, and may be adopted. It is not a substantial change In light
of the notice which was given.
Appeals
70. The statute contains a definite procedure for appealing an LGU's
approval or denial of a replacement plan. But the statute does not deal with
appeals from other LGU decisions, such as exemptions and no-loss
determinations. Initially, the Board had proposed that all appeals of
decisions based on the rules go to the Board, but that appeals of exemption or
no-loss determinations must first be appealed to a local government's board of
adjustment or appeals or to the governing body of the LGU.
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7 1 . During the comment process, criticisms came from those who pointed
out that any citizen would have the right to appeal and block a project,
probably for a whole construction season, and there was no provision for
separating frivolous appeals from serious ones. Letter of Urban Wetland
Management Coalition dated December 31. Others pointed out that some LGUs did
not have boards of adjustment and appeals and that a variety of structures
must be accommodated. Association of Minnesota Counties, December 30.
72. In its post-hearing submission, the Board made proposals for changes
to respond to these comments. First of all, the Board noted that the
statutory appeal provisions apply only to replacement plans, not all appeals,
and so the Board tried to adopt the statutory requirements only for
replacement plans. For exemptions and no-loss determinations, the Board
established a procedure whereby only the landowner had an absolute right to
appeal an exemption or no-loss determination, and before doing so, the
landowner must exhaust all local administrative appeal options. Others who
might want to appeal an exemption or no-loss determination were limited to
those required to receive notice of replacement plan decisions, and those
persons did not have an absolute right to appeal. They were granted the right
to petition the Board to hear an appeal, but the Board was empowered to grant
or deny the petition.
73. There are two problems with the Board's modified plan. First of
all, the statute specifies that appeals from replacement plan decisions may be
made by any of the following people: "the wetland owner, by any of-those to
whom notice in required to be mailed under [103G.2242] subdivision 7, or by
100 residents of the county in which the majority of the wetland is located."
The Board has attempted to restrict appeals to the following: "the landowner,
any of those required to receive notice of the decision as provided for in
part 8420.0230, or by 100 residents of the county in which a majority of the
wetland Is located." The rule reference, however, refers to the list of
people which the Board sought to reduce as described in Finding 61 above. In
other words, by attempting to change that list of people, the Board has also
changed the list of people who would be entitled to appeal a replacement plan
decision. That is contrary to the statute. The statute sets forth the
required list, and the Board cannot alter that. Therefore, in order to cure
this defect, the Board must modify its proposed language for page 28, lines 14
through 16, to comport with Minn. Stat. 103G.2242, subd. 9. The Board may
use whatever stylistic device it chooses to deal with the cross-references
between subdivision 7 and subdivision 9, but it cannot alter the substance of
the statute.
74. The other problem raised by the Board's proposal is that the rule
allows the Board to grant or deny an appeal petition from an exemption or
no-loss determination, but there are no standards in the rule to guide its
decision. It is well settled in the law that a rule which grants
discretionary authority to an administrative officer must have a "reasonably
clear policy or standard of action" so that it is clear that the action is
occurring by virtue of its own terms, and not according to the whim or caprice
of the administrative officer. lee v. Delmont, 228 Minn. 101, 113, 36 N.W.2d
530, 538 (1949); Andersn v, Commissioner of Highways, 126 N.W.2d 778, 780
(Minn. 1964); Beck, Bakken & Muck, Minnesota Administrative Procedure, 24.4
(Butterworths, 1987). In order to cure this defect, the Board must either
return to a position whereby all appeals are accepted by the Board, or provide
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reasonable standards to guide the Board's discretion. An example of such
limiting language might be the following:
The Board shall grant the petition unless it finds that
the appeal is meritless, trivial, or brought solely for
the purposes of delay. In determining whether to grant
the appeal, the Board shall also give consideration to
the size of the wetland, other factors in controversy,
any pattern of similar acts by the LGU, the landowner or
the petitioner, and the consequences of the delay.
The Administrative Law Judge does not mean to suggest that those are the only
factors which the Board might want to enumerate, or that all of them are
appropriate. Rather, he is attempting to give some guidance to the Board in
understanding the kind of restrictions that must be Imposed on the Board's
discretion.
Enforcement Procedures
75. Part 8420.0920, subp. 2, includes a provision for delayed effective
dates on cease and desist orders. It provides that a cease and desist order
with a delayed effective date (three weeks from the date of issuance) can be
issued when it is not readily apparent whether an activity Is exempt or within
the no-loss provisions, and continued drain or fill activity would not cause
irreparable harm to the wetland. The rule requires the enforcement authority
to advise the landowner that an application should be made Immediately to the
LGU and that if the LGU determines that the activity is not appropriate,
restoration may be required. The rule goes on to provide that in those cases
where an application for exemption certificate or no-loss determination is
triggered by a cease and desist order, the LGU must make a decision "within
three weeks from the date of the application or sooner if the landowner
requests."
76. This provision received a number of comments. A Goodhue County
official pointed out that giving the landowner the option to request a
decision "sooner" places an unnecessary burden on the LGU. She asked whether
there was any limitation on "sooner", so that an unreasonable request would
not have to be honored. Tr. 949-50. A Todd County administrator asked what
happens if the decision is not issued within three weeks -- is the violator
"off the hook"? Tr. 45. The Administrative Law Judge believes that since the
rule fails to state the penalty for not meeting the three-week period, it is
discretionary, not mandatory, and the party seeking action would be forced to
go to court for a writ. The Board may want to consider specifying an outcome,
but given the variety of circumstances which can occur, it may be best to
leave it for a case-by-case determination. The rule is not defective without
specifying an outcome. The first comment, however, does point out a problem
which must be dealt with.
77. The provision that requires the LGU or technical panel to make a
decision within three weeks from the date of the application "or sooner if the
landowner requests" has not been demonstrated to be reasonable. There is no
defense of it in the SONAR or hearing record, and common sense suggests it is
unreasonable. This defect can be cured by either deleting the last phrase, so
that the decision would have to be made within three weeks. Another way to
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cure the defect would be to add limiting language to make sure that the
request for "sooner" is reasonable under the circumstances. The
Administrative Law Judge recommends that the phrase "or sooner if the
landowner requests" be deleted, as it would be difficult to draft language
that would cover all the possible eventualities.
Replacement Plans: part 8420.050O_to 8420.0630
Sequencing.
78. The Act makes it clear that impacting one wetland and replacing it
with another is to be the last resort solution to a problem, The problem must
be first addressed by avoiding the impact, minimizing the impact, rectifying
the impact, and reducing or eliminating the impact over time. The Act directs
that these principles are to be used "in descending order of priority", and
that replacing or providing a substitute wetland is to be the last option.
The rules on sequencing reflect that legislative priority. They require an
applicant who wants to impact one wetland and replace it with another to first
demonstrate attempts to avoid, minimize, rectify, etc. The detailed showing
required, however, was characterized as "silly", "excessive", "unreasonable",
and "impractical". Commentators were particularly concerned when the full
sequencing procedures were applied to small impacts, believing that the time
and expense required to document the required steps was out of proportion to
the impact.
79. The Board responded to these criticisms by proposing to delete the
requirement for written documentation in the case of projects impacting
wetland areas less than 0.1 acres. The Board proposed that in those cases,
the local government unit could provide an on-site sequencing determination
without the written documentation. The Board proposed exceptions to that,
however, for projects within certain distances of outstanding resource value
waters, trout streams, and trout lakes. The Board's proposal for small
wetlands would not remove the requirement that the LGU must assure itself that
avoidance, minimization, etc. has occurred. That requirement would still
apply. All the Board's modification would do is remove the documentation
requirements for those small wetlands less than 0.1 acres.
80. The Administrative Law Judge finds that the Board has justified its
proposed change. Although the change was drafted in connection with changes
to the notification requirements which were found to conflict with the statute
(see Finding 61 above), the change to reduce the documentation does not
conflict with any statutory requirement. What the statute requires is that
the LGU be guided by the principles of avoidance, minimization, etc. The
statute does not specify what documentation is required. The Board's
modification on documentation may be adopted.
81. The Board had proposed to insert its language relating to wetland
areas less than 0.1 acres on page 44, at line 3. This would seem to "bury"
the language in the middle of a paragraph relating to alternatives. It would
make more sense if the proposed insertion were a stand-alone paragraph, so
that it was clearly seen by persons not familiar with the rules. This is
solely an editorial suggestion, however, not a requirement.
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Replacement Plan Components
82. The amount and detail of information required In a replacement plan
application was attacked as "onerous and expensive" by groups such as the
Urban Coalition (Letter of December 31), the Douglas Soil and Water
Conservation District (which questioned cost effectiveness at Tr. 28) and the
Todd County Administrator, who labeled them "unreasonable". Tr. 46.
83. In response, the Board has reduced the amount of information
required for plans utilizing the wetland bank. The Board has also proposed a
number of more detailed changes in an attempt to make the application more
"user friendly". The Board has committed to the development of standardized
forms and procedures to be contained in an administrative manual (post-hearing
submission, at p. 19). The Administrative Law Judge finds that the Board has
justified the amount of detail required in the replacement plan provision.
Since many of the smaller impacts are likely to be mitigated by the wetland
bank, simplifying the application paperwork for projects utilizing the bank
will alleviate some of the concern expressed.
Replacement Plan Evaluation CriteriA
84. Another of the five major issues identified by the Board is a
provision which prohibits the use of a previously drained wetland, which was
drained pursuant to an exemption from the replacement requirements, as the
replacement for a new impact, for a period of ten years from the time that the
original wetland was impacted. An example may help explain this somewhat
complicated idea. A landowner has two wetlands on his property, one of which
is exempt from the Act, the other one is not. This rule would prohibit the
landowner from draining the first wetland under the exemption, and then
turning around and using it as replacement for draining the second wetland.
The Board has proposed that the restriction against using an exempted wetland
for replacement extend for ten years from the time that it was originally
drained or filled. However, the Board recognized that there were some who
believed that such wetlands should never be allowed for use as replacement
wetlands because it would be contrary to the no net loss goal of the Act. The
argument in favor of the ten-year limitation is that one of the Act's goals is
to restore natural wetlands, and ten years is long enough to deter those
"schemers" who would attempt to abuse the law by taking advantage of the
exemption. See, for example, Tr. 320. Indeed, some argued that ten years was
too long, and that it ought to be reduced to five years. Tr. 418. Both the
MPCA (letter of December 30) and the Urban Wetlands Management Coalition
(letter of December 31) supported the ten-year compromise, arguing that it
will prevent "deals", but will also allow the use of natural wetlands for
restoration.
85. The Administrative Law Judge believes that the Agency has
demonstrated the need for and reasonableness of its proposed rule which would
allow wetlands drained under an exemption to be used as replacement wetlands
after ten years had passed. While it does allow for a loss, the 2:1 ratio on
many replacements should make up for that loss, so there will not be a net
loss. Moreover, the arguments favoring restoration of natural wetlands, as
opposed to created ones, support this provision. It is unlikely that many
people will bother to drain an exempt wetland now so it will be available for
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restoration ten years from now. The benefits outweigh the risks, and the
Board has justified its position.
86. Both the statute and the rule require that replacement of wetland
values must be completed prior to or concurrent with the actual draining or
filling of a wetland, unless an irrevocable bank letter of credit or other
security acceptable to the local government unit is submitted to guarantee
successful completion of replacement. However, one of the goals of
replacement is the replacement of impacted plant life, and a later rule,
part 8420.0550, subp. 2 E. states that when feasible, organic soil used for
backfill of a restored wetland should be taken from the impacted wetland. One
commentator thought these two provisions were irreconcilable, particularly
when it may take weeks or even months for a drained wetland to dry out enough
to allow earthmoving equipment to be used. Letter of Dennis Miller,
December 29. The Administrative Law Judge does not believe the two are
fatally irreconcilable, because of the flexibility inherent in terms like
"concurrent with" and "when feasible". However, the Board may want to
consider asking the Legislature to allow a reasonable period of time, say one
or two months, to allow for the transfer of organic soil from the old wetland
to the new. While a bank letter of credit could be used to facilitate this,
it seems an unnecessary penalty to place on the landowner who is attempting to
comply with the soil transfer rule.
87. An error occurred in the preparation of the final draft of
part 8420.0540 so that two sentences were omitted from the version as
published in the State Register and mailed out to interested persons. This
error was announced at the start of each hearing session except for the first
two sessions in Alexandria. The first announcement of the error occurred at
the start of the afternoon session in Thief River Falls (Tr. 206) and was made
at all subsequent sessions. In addition, an errata sheet describing the
omission was distributed at each of the hearing sessions except for
Alexandria. Ex. 19. The question arises as to whether the Board's proposed
insertion of the omitted language into the rule without its being published
and distributed in advance is mere harmless error, or whether it constitutes a
substantial change.
88. The language at issue is to be added to part 8420.0540, subp. 6,
which is on page 55, at line 12. That section deals with the required size of
replacement wetlands, and contains a statement that for wetlands on
non-agricultural land, the minimum replacement ratio is 2:1, but for wetlands
on agricultural land, the minimum replacement ratio is 1:1. The omitted
language reads as follows:
Present and future owners may make no use of the wetland
after it is altered, other than as agricultural land for
a period of ten years unless future replacement to
achieve a 2:1 ratio occurs. The landowner must execute
and the LGU must record a notice of this restriction.
As explained during the hearing sessions, and in the Board's post-hearing
submission, this provision is parallel with other 10-year provisions which are
designed to avoid abuses of the Act. For example, as discussed above, a
wetland which has been drained or filled under an exemption cannot be used as
a restoration credit for ten years after it has been drained or filled.
Secondly, a wetland that has been drained or filled under an agricultural
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exemption (so that no replacement is required) must stay in agricultural use
for ten years. If it is converted to another use, then it must be replaced at
that point, as if the land had been converted before the draining had
occurred. The omitted language quoted above provides that if a wetland on
agricultural land is drained but not under an exemption, but is replaced at a
1:1 ratio rather than at a 2:1 ratio, and then the land is converted to
nonagricultural use during ten years, the rule requires that the replacement
must be increased to a 2:1 ratio, as if the conversion had occurred prior to
the draining. The Department argues that because the omitted language is
logically consistent with the other two rules, persons should not be surprised
to see it, even though it was omitted from the rule as published.
89. The provision was adopted by the Wetland Heritage Advisory Committee
and accepted by the Board prior to the hearing. It was apparently suggested
by DNR to the Wetland Rule Working Committee, but the affected section of the
rule did not receive final review by the committee, and thus the suggestion
was left to the Heritage Advisory Committee and the Board for their
consideration.
90. The Board points out that all persons who attended the hearings,
except for those on the first day, had the opportunity to comment on the
proposed language, and none expressed any concern with the fact that it had
not been published.
91. No persons submitting written comments criticized the proposed
language as a substantial change, although it was criticized on other grounds.
92. Minn. Stat. 14.05, subd. 2 provides as follows:
An agency may modify a proposed rule in accordance with
the procedures of the Administrative Procedure Act.
However, an agency may not modify a proposed rule so that
it is substantially different from the proposed rule in
the Notice of Intent to Adopt Rules.
93. Minn. Rule pt. 1400.1100, subp. 2 provides as follows:
In determining whether a proposed final rule or a rule as
adopted is substantially different, the Administrative
Law Judge or the Chief Administrative Law Judge shall
consider the extent to which it affects classes of
persons who could not have reasonably been expected to
comment on the proposed rules at the rulemaking hearing
or goes to a new subject matter of significant
substantive effect, or makes a major substantive change
that was not raised by the original Notice of Hearing in
such a way as to invite reaction at the hearing, or
results in a rule fundamentally different in effect from
that contained in the Notice of Hearing.
94. The test quoted above has four elements. The omitted language does
not affect classes of persons who could not have been expected to comment on
the rules at the hearing. The classes of persons affected, landowners who
would take advantage of the 1:1 ratio for impacts on agricultural land, were
well represented at the hearings. The added language does not go to a new
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subject matter of significant substantive effect. The concepts of special
treatment for agricultural land, and assuring that special status is not
abused, were discussed at length. What was not discussed, however, was the
concept of having to go out to acquire additional mitigation within a ten-year
period if the land were converted. That is so close to the idea of having to
mitigate if an agricultural exemption is used, that it certainly cannot be
labeled "new subject matter". Nor does the additional language make a major
substantive change that was not raised by the original Notice of Hearing. The
impact of the new language is simply not "major" in the sense of these rules,
and the two other parallel provisions would be likely to evoke the same
response as this one.
95. The most troublesome of the four tests is the last one -- whether
the new one results in a rule fundamentally different in effect from that
contained in the Notice of Hearing. The Administrative Law Judge does not
believe that adding the proposed language creates fundamentally different
effects. A great deal of testimony was directed to the idea of recording
exemptions, for example, so that buyers would know limitations on what they
were purchasing. Much comment was devoted to the question of whether or not a
wetland drained under an exemption could be used as a replacement after ten
years. The concept of requiring additional mitigation if a conversion occurs
within ten years after draining a nonexempt wetland is similar in effect to
the others that the omission does not result in a rule that is "fundamentally
different in effect".
96. The conclusion is buttressed by the fact that no commentator raised
the substantial change issue, even though the omission was announced and
explained at the start of each hearing session except for the first two, and
the fact that it was highlighted by a separate handout available at each
hearing session except the same two. In addition, the language must have been
the subject of a specific discussion at the Heritage Commission review of the
Rule Working Committee's report in order for it to have been included in the
rule as adopted by the Heritage Commission. The Heritage Commission is made
up of persons with a broad range of views. Some members of the Commission did
testify during the hearings, but none of them raised this as a concern. All
this buttresses the judgment that this is not a substantial change.
97. MNDOT (which was aware of the potential for a substantial change
issue, but did not raise it) is opposed to the rule because, they allege, it
conflicts with the statute. MNDOT points out that Minn. Stat. 103G.222 (f)
and (g) provide as follows:
(f) for a wetland located on nonagricultural land,
replacement must be in the ratio of two acres of replaced
wetland for each acre of drained or filled wetland.
(g) for a wetland located on agricultural land,
replacement must be in the ratio of one acre of replaced
wetland for each acre of drained or filled wetland.
MNDOT argues that the statute does not reference activity as the prerequisite
for a 1:1 replacement ratio, rather, it references the location of the
wetland. MNDOT argues that the omitted language exceeds statutory authority
by limiting the 1:1 replacement ratio to only agricultural activities
impacting wetlands on agricultural land. They argue that the only rationale
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for limiting the 1:1 ratio to agricultural activi ties is that of retri bution
on the nonagricultural community, by arbitrarily increasing the amount, and
therefore cost, of their required wetland replacement. The nature of the loss
itself, not the type of activity causing the loss , they believe, should be the
deciding factor.
98. The Administrative Law Judge cannot accept MnDOT's argument. It is
true that the determinative factor in all of the exemptions and other special
benefits is whether or not the wetland is located on agricultural and . It is
true that it is not the purpose for which the activity is undertaken that
determines whether or not the exemption occurs. But it is the change in the
status of the land which triggers the increased ratio. It is converting the
land from agricultural land to some other kind of land that is at issue here,
and thus the proposed language is not in conflict with the statute.
99. The final issue which must be raised in connection with these two
sentences is whether or not the failure of the agency to mention them in its
Statement of Need and Reasonableness violates Minn. Rule pt. 1400.0500, which
is designed to allow persons to be able to fully prepare any testimony or
evidence in favor of or opposition to a rule. The rule provides that if an
agency presents evidence or testimony not summarized in the SONAR, and any
interested person so requests, the Administrative Law Judge may recess the
hearing to allow the public time to prepare their own testimony or evidence in
opposition to the agency. No person made such a request, despite the fact
that at all the sessions (except Alexandria) the matter was specifically
called to their attention by Attorney Clapp, the rationale explained, and
comment was solicited. The absence of any such comment (except from MNDOT)
suggests that the provision simply was not of interest to the hundreds of
organizations and individuals who did comment on the rules. Under the
circumstances, no remedial action is required.
Circular 39, the Cowardin System, and the Replacement Ratios
100. Subpart 10 of Rule 8420.0540 was one of the most complicated
portions of the rules because it tackles the difficult task of dealing with
wetland functions and values. It is a response to the statutory requirement
that the rules must:
address the criteria, procedure, timing, and location of
acceptable replacement of wetland values; [and] may
address . . . the methodology to be used in identifying
and evaluating wetland functions . . . .
Section 103G.2242, subd. l(a).
101. These are very difficult assignments, as there is no universally
accepted methodology for dealing with values and functions. There are
numerous alternatives available from various international and national
organizations, as well as from other states.
102. The United States Fish & Wildlife Service has published two separate
systems for describing wetlands. The first, published in 1956, is known as
Circular No. 39. It described wetland basins by type (type 1 , type 2 type 3,
etc. ) based primarily upon their use by waterfowl and wildlife. Water depth,
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salinity, and/or generalized vegetative descriptions (wooded swamps, shrub
swamps, etc.) were the primary criteria for typing the wetlands. However, the
Fish & Wildlife Service believes that the Circular 39 system is currently
outdated and, in fact, is now out of print. Letter of Decemberr 30.
103. The Circular 39 system was replaced by the Fish & Wildlife Service's
Coward in system, first published in 1979, which is not based solely on
waterfowl or wildlife values. It is more detailed than the Circular 39
system, and is asserted to be based upon ecological concepts and
state-of-the-art knowledge of wetlands. It is the basis for the national
wetlands inventory maps, and the computerized wetland data base that is being
developed from those maps. It provides the basis for the 1989 federal manual
which is referenced in section 103G.2242, subd. 2, as the manual which must be
used by technical evaluation panels in reviewing replacement plans.
104 Many people who commented on the rule objected to the use of the
Cowardin system at all. Many of them, particularly professionals who have
worked with the Circular 39 system for some years, objected to the departure
from Circular 39. The Board, in response, has proposed to include a
conversion chart for the two classification systems. This chart is designed
to allow users to determine Circular 39 wetland types based upon the Cowardin
inventory maps and on-site field inspections.
105. The Administrative Law Judge concludes that the use of the Cowardin
system is an appropriate response to the Legislature's requirement that the
Board identify and develop a system based on functions and values. While
there are legitimate complaints that the Cowardin system doesn't go as far as
it ought to, and that there may be better systems available to meet the
legislative goal, the Administrative Law Judge believes that the Board's
choice of Cowardin is a reasonable one. The Board has submitted into the
record a variety of documents illustrating various systems which are in the
literature and in use in various locations. The Board is not unaware of
them. However, the Board was concerned about the practicalities of using a
system in the field, and chose a relatively simple one over more complex
ones. One of the criticisms labeled at the Board was that it attempted to
simplify the Cowardin system too far in order to make it workable in the
field. Practicality of application is a legitimate factor for the Board to
consider, and so long as a system meets the minimum criteria of the statute,
the Administrative Law Judge will not disturb it. See, Manufactured Housing
Institute v. Pettersen, 347 N.W.2d 238 (Minn. 1984).
106. The basic outline of the Board's approach to evaluating replacement
wetlands is as follows: A replacement wetland should be as similar to the
impacted wetland as possible, not only in terms of size, but also in terms of
function and value. There must be flexibility, however, in designing
replacement wetlands if they are to be used at all. There are three
characteristics which, taken together, represent a reasonable assurance of
similar functions and values. These are (1) the type of wetland per the
Cowardin system, (2) the location in terms of watershed units, and the
(3) inlet/outlet characteristics. If these three factors are the same for
both the impacted wetland and the replacement wetland, then it can be said
that the two are similar and one is a reasonable replacement for the other.
But if any of the three characteristics are different, then the two wetlands
are not similar, and it is necessary to consider whether or not some
adjustment to the replacement wetland is necessary in order to at least bring
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it closer to the impacted one, in terms of replacing the functions and values
which have been lost.
107. Much of the complexity of the rule results from these adjustments.
They are like the Income Tax Code in that the Code attempts to tax people in
similar situations the same amount, but the Code gets very complex in
attempting to make the situations similar. For example, one person may have a
very high salary, but an uninsured catastrophic medical expense may take much
of it away in a particular year. His neighbor may have a low salary, but no
catastrophic medical expenses. If we assume that the two have relatively
similar abilities to pay, then a fair tax system would be one which provided a
deduction for the medical expenses so that the two paid roughly equal taxes.
When adjustments are made not only for catastrophic medical expenses but also
for home mortgage payments, charitable contributions, investments in capital
equipment, child care expenses, legitimate business expenses, etc., the Code
does get complex. The same kind of complexity occurs in connection with the
various adjustments required by these rules. The more accurate a system is in
replicating the functions and values between the impacted wetland and the
replacement one, the more complex it is going to be, and the harder it is
going to be to administer in the field. The Urban Wetland Management
Coalition, for example, recommended an approach (referred to as the "Peterson
approach") which would replace the Board's matrix and ratios with a
descriptive narrative system. In this system, the impacted wetland would be
examined for its functions and its values (separately) that needed to be
replaced, then the community would be reviewed to see whether any of those
could be adequately addressed by other permitting or approval processes, then
each of the remaining unreplaced functions would be evaluated against
narrative criteria, which may or may not be quantitative depending on what is
known about them. The Administrative Law Judge believes that such a system
(if well written and well applied) might yield a more accurate replacement
than the Board's system. But he also agrees with those who complained that
the Peterson approach requires highly training personnel and time (and money)
for analysis. Letters from DNR of December 31 and January 8. The
Administrative Law Judge notes that for projects of unusual complexity or
replacement plans that have been denied and are on appeal, the LGU may
evaluate the replacement plan using Minnesota wetland evaluation methodology
or any other scientific methodology approved by the Board. Therefore, the
Peterson approach could be used (if approved) for unusual projects.
108. Another criticism leveled at the Board's index system is that it has
the potential to require more than a 1:1 or 2:1 replacement for each impacted
acre. The Urban Coalition submitted an example that ended up with more than
four acres of replacement for each acre lost. The Board's response is that if
it is necessary to go above 1:1 or 2:1 in order to replace the wetland values,
then the rules may require it. SONAR, pp. 30-31. The Administrative Law
Judge finds that the increased ratios reflect an attempt to compensate for
lost values in a rough, but practical manner. As discussed above, the costs
of recreating values on a strict acreage basis would require a level of
technical expertise and sophistication which neither the State nor the LGUs
can afford. The tradeoff for a reduced level of values protection is an
increased quantity of acreage. The Board recognizes this tradeoff and the
Administrative Law Judge accepts their rationale as a reasoned one, which is
not in conflict with the acreage ratios in statute.
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Wetland Banking
109. Many persons objected to the "one size fits all" aspects of some of
the rules proposed by the Board. They stated that the geography, soil and
historic drainage differences between northwestern Minnesota, northeastern
Minnesota, southwest, southeast, and metro areas required more flexibility
than the rules allowed. The Board's attempt to accommodate these differences
included a number of items, but one of the primary ones was the ability to use
a wetland bank to mitigate impacts from draining or filling. The Board is
authorized by Minn. Stat. 130G.2242 to adopt rules to establish a wetland
banking program, and the Board has done so. The basic idea behind the bank is
that it provides an alternative procedure for replacing lost wetland values
when project-specific replacement is impossible or impractical.
110. The major issue in connection with wetland banking is whether or not
created wetlands ought to be allowed for deposit into the bank, or whether the
bank should be limited to accepting only restored wetlands. This issue was
one of the five issues highlighted by the Board for particular attention, and
a high percentage of all of the comments included statements about this Issue.
111. The statute does not provide any limitation on the use of created
wetlands for the bank.
112. Initially, the Board proposed that only restored wetlands would be
eligible for deposit into the bank, and created wetlands would not be
eligible, The underlying reason for this limitation was the belief that it is
extremely difficult to create a truly functioning wetland where no wetland
previously occurred, and that it is ecologically better to restore an old
wetland than to try to create a new one. The Board reasoned that since the
whole idea of a bank was optional, it was not illogical to limit it to the
more promising type of wetlands. SONAR, p. 39. Representative Munger
indicated that wetland banking was discussed by the Legislature as a system
for banking restored wetlands only. He did not support the use of created
wetlands for banking because they do not function well as wetlands. Tr. 809.
Other reasons for avoiding created wetlands are that it makes it very easy to
convert numerous small losses into one large replacement ("clumping"),
particularly when a dam or dike is built to impound a watercourse. DNR letter
of January 8. In oral testimony, the DNR argued that there are more than nine
million acres of drained wetlands available for restoration, and restoration
should be favored. Tr. 841. The Department went on to state that if created
wetlands were allowed to be banked, they should be limited to excavations,
rather than impoundments, because impoundments often inundate existing
wetlands and also have the undesirable "clumping effect".
113. Testimony at the hearings, and in written comments, favored the use
of created wetlands as a major relief valve for mitigation in certain parts of
the State. Urban real estate, for example, may be difficult to acquire and
extremely expensive; taking lands away from woodlands or open spaces is a
public detriment which should be weighed in the balance. Letter of Raymond D.
Haik on behalf of Minnesota Association of Watershed Districts dated
December 23. Counties with very high percentages of their wetlands never
having been drained (counties like Lake and Cook have had less than five
percent of their presettlement wetlands drained), have very few opportunities
to restore wetlands locally, and thus would be forced to purchase restoration
credits from the south and western parts of the State where there are many
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opportunities for restoration. Many argued that allowing created wetlands to
be banked would be fairer to all counties. Advocates also argued that the
statute specifically allows created wetlands to be used in replacement plans,
and since banking is simply an alternative process for achieving replacement,
creation should not be excluded from the bank. MNDOT, along with virtually
every county highway department, argued that there have been numerous examples
of successful wetland creations and that many of the Board's own wetland
replacement standards are taken from MNDOT design guidelines. Letter of
December 24. Proponents of created wetlands also argued that there will be
thorough, site-specific review by the LGU, the technical evaluation panel, and
other interested parties, and this should heighten the chances for success.
They point to the limitations in the proposed rules which require that only
functioning wetlands can be deposited in the bank to begin with, and suggest
that nonfunctioning created wetlands can be avoided by that mechanism.
114. In its post-hearing submission, the Board proposed a compromise,
essentially based on the DNR position. The Board pointed out that the record
did contain actual examples of good created wetlands, as well as a number of
suggestions for limiting the use of created wetlands so as to maximize the
chances for their success. The Board recommended allowing created wetlands to
be banked, but proposed limitations on the use of created wetlands. The
primary one is that they would either have to be constructed by excavation or,
if they were constructed by impoundment, they would have to be limited to less
than ten acres in size, The Board also proposed to impose a longer "waiting
period" for created wetlands before they could be approved (by the technical
panel) for deposit in the bank.
115. The Administrative Law Judge concludes that the Board has
demonstrated the reasonableness of its position to allow banking of created
wetlands. There is no question but that there have been some created wetlands
in other states which have been environmental failures, but with the
limitations and safeguards present in these rules, the risk of that occurring
here have been reduced. The equities to some parts of the State, and the
efficiencies for mitigating very small impacts, outweigh the small risk
remaining that created banking will be a detriment to the biological diversity
required by the Act.
116. Another typographical error occurred in the rules at page 77,
line 10. It is part of a provision designed to avoid "clumping" which
provides that as an incentive to encourage the restoration of small wetlands,
the LGU shall "devalue" restored acreages greater than ten acres by ten
percent, while restorations of zero to ten acres would receive 100% credit for
their acreage. The rule as published went on to provide:
The local government unit may modify the credit given, up
to a maximum of 100%, if unanimously agreed to by the
technical panel.
The word "unanimously' should have been removed from the version of the rule
as published, but it was not. Both the Board and the utility industry
(Tr. 766 and Minnesota Power letter of December 30) noted that the Wetland
Heritage Advisory Committee had stricken the word, but that it inadvertently
had reappeared in the Revisor's draft of the rule. The Administrative Law
Judge has reviewed the minutes of the Advisory Committee meeting, and agrees
that those minutes reflect that the word was removed. It is appropriate that
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it be removed from the final version of the rule in light of this history. It
is a harmless error, and its removal is not a substantial change.
117. There were complaints registered about the "devaluation", primarily
because it is not in the statute. MNDOT letter of December 24. The
Administrative Law Judge reads the statutory provisions for banking to be
extremely general, granting the Board a greater degree of latitude than some
of the detailed statutory provisions in other sections. Therefore, the fact
that the "devaluation" is not mentioned in the statute does not prohibit its
use in the rule. Moreover, in light of the concerns over clumping which can
result from the use of created wetlands and banking, this ten percent
devaluation is not unreasonable. The Board did consider some of the
alternatives proposed during the hearing, but could not agree with any of
them. Under the circumstances, the Board's position is reasonable.
118. Some counties and municipalities have implemented their own banks
under the interim rules, and some have positive balances. The Cass Soil &
Water Conservation District introduced into the record a memo dated November
23, 1992, from a Board employee which stated that any positive balances in
local banks would have to be "zeroed out" by July 1, 1993. Ex. 27. Cass
County had established a local bank pursuant to a county board resolution, and
urged that any wetland acres banked using the criteria in the permanent rules
be allowed to carry over into the new state bank without penalty. Tr. 415.
See also, Tr. 858.
119. The Board responded with a proposal that would allow certain
replacement credits into the bank under limited conditions. The proposal
would allow the following:
Also, wetland replacement that has been completed and
deposited in a local government unit bank prior to the
effective date of these rules and after January 1, 1992
is eligible for deposit into the statewide banking system
if the project meets all of the criteria in subpart
8420.0700 to 8420.0760 based on a site inspection and
review by the board and the commissioner.
The Administrative Law Judge finds that given the limitations in the proposed
rule, the rule is reasonable and not a substantial change.
120. Criticisms were made that the Statement of Need and Reasonableness
failed to properly analyze the impact on agricultural land, as required by
Minn. Stat. 17.83. That statute provides that if an agency proposes to
adopt a rule "which it determines may have a direct and substantial adverse
effect on agricultural land", then it must include notice of the adverse
effects in the Notice of Hearing and include certain material in the Statement
of Need and Reasonableness. The term "action which adversely affects" is
further defined, however, to be limited to acquisition, permitting, leasing or
funding for nonagricultural uses. The thrust of the statute is one of notice,
both to the public and to the commissioner of agriculture.
121. The Administrative Law Judge concludes that this statute has been
satisfied, both as to its letter and as to its spirit. From a technical
standpoint, the statute does not apply at all. These rules do not involve
acquisition, permitting, leasing or funding within the meaning of the
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statute. But more importantly, as a practical matter, the agricultural
community and the commissioner of agriculture have been deeply involved in the
drafting and commenting process. The record, for example, contains
recommendations from the Commissioner (letter of October 1) which indicates
that the Department of Agriculture participated in both the Heritage Advisory
Committee and the Rule Drafting Committee. The spirit of the statute has been
satisfied, as well as the letter.
122. Criticisms were also leveled at the Board's estimate of the fiscal
impact of the rules. See, for example, letter from the Association of
Minnesota Counties dated December 30. The law requires that if the adoption
of a rule will require the expenditure of public money by local public bodies
and the estimated total cost exceeds $100,000 in either of two years
immediately following adoption of the rule, then a fiscal note must be
prepared. There is no question but that these rules will require the
expenditure of substantial sums of money by LGUs. The Board did prepare a
fiscal note. The Board estimates that the total statewide cost for LGU
implementation will be four million dollars per year for each of the next two
years, or a total of eight million dollars for the biennium. Some entities
have criticized this as being a gross underestimate, and provided examples of
their own estimates. The Administrative Law Judge concludes, however, that
the law has been satisfied because the Board has provided a fiscal note which
is in within the realm of reasonableness. The Board asked LGUs to document
the cost of implementing the interim phase of the Act, and then selected a
geographically representative sample to get a representative estimate of the
actual costs. The average for 13 LGUs who responded to the Board's request
was $14,000. The LGUs noted, however, that the interim program was simpler
than the final program, and that more money would be required to administer
the final one. The Board added $6,000 to adjust for this change, coming up
with a total of $20,000 as an annual average cost per LGU. Based on the
assumption that approximately 200 LGUs would be involved in the program, the
Board computed its four million dollar total. This is based on an average,
which ranges from LGUs that may only have three or four or five applications
per year to LGUs which will have to deal with more than a hundred applications
per year. Since it is based on such a wide variation of activity, it must be
viewed as only a rough estimate. But it is adequate for the Legislature and
others to get an idea of the fiscal impact of the rule.
General Comments
123. Compensation to landowners for the restrictions imposed upon them by
the statute and these rules was a topic brought up by many persons throughout
the hearing process. The concept expressed is essentially as follows:
If preserving wetlands is such a great societal benefit,
then society ought to compensate those who are burdened
by restrictions on the use of their land.
Many people claimed that the statute and rules were unconstitutional in that
they failed to provide such compensation. The Attorney General's Office,
however, has studied the matter and is of the opinion that neither the statute
nor the rules are unconstitutional on their face. Tr. 345. There may be
particular situations where particular pieces of land and particular
administrative actions may cause an unconstitutional taking requiring
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compensation, but those must await resolution on a case-by-case basis. The
Administrative Law Judge is not empowered to rule on the facial
constitutionality of a rule. Neeland v. Clearlater Memorial Hospital, 257
N.W.2d 366, 368 (Minn. 1977). Such a claim must be directed to the judicial
branch.
Based upon the foregoing Findings of Fact, the Administrative Law Judge
makes the following:
CONCLUSIONS
1. That the Board gave proper notice of the hearing in this matter.
2. That the Board has fulfilled the procedural requirements of Minn.
Stat. 14.14, subds. 1, la and 14.14, subd. 2, and all other procedural
requirements of law or rule, except as noted at Finding 7.
3. That the Board has demonstrated its statutory authority to adopt the
proposed rules and has fulfilled all other substantive requirements of law or
rule within the meaning of Minn. Stat. 14.05, subd. 1, 14.15, subd. 3 and
14.50 (i)(ii), except as noted at Findings 61, 73 and 74.
4. That the Board has documented the need for and reasonableness of its
proposed rules with an affirmative presentation of facts in the record within
the meaning of Minn. Stat. 14.14, subd. 2 and 14.50 (iii), except as noted
at Findings 30 and 77.
5. That the amendments and additions to the proposed rules which were
suggested by the Board after publication of the proposed rules in the State
Register do not result in rules which are substantially different from the
proposed rules as published in the State Register within the meaning of Minn.
Stat. 14.15, subd. 3, and Minn. Rule 1400.1000, subp. I and 1400.1100.
6. That the Administrative Law Judge has suggested action to correct the
defects cited in Conclusions 3 and 4, as noted at Findings 30, 73, 74 and 77.
7. That due to Conclusions 2, 3, 4 and 6, this Report has been submitted
to the Chief Administrative Law Judge for his approval pursuant to Minn. Stat.
14.15, subd. 3.
B. That any Findings which might properly be termed Conclusions and any
Conclusions which might properly be termed Findings are hereby adopted as
such .
9. That a finding or conclusion of need and reasonableness in regard to
any particular rule subsection does not preclude and should not discourage the
Board from further modification of the proposed rules based upon an
examination of the public comments, provided that no substantial change is
made from the proposed rules as originally published, and provided that the
rule finally adopted is based upon facts appearing in this rule hearing
record.
Based upon the foregoing Conclusions, the Administrative Law Judge makes
the following:
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RECOMMENDATION
It is hereby recommended that the proposed rules be adopted except where
specifically otherwise noted above.
Dated this 11th day of February, 1993.
ALLAN W. KLEIN
Administrative Law Judge
Reported: Tape Recorded; Transcript Prepared.
MEMORANDUM
It should be stressed that this Report deals with legal questions, not
policy ones. The only way a policy question is discussed is in the context of
whether or not the Board has demonstrated the need for and reasonableness of
its proposed rules. Therefore, a person should not look to this Report for
policy guidance. The fact that a rule is found to be reasonable does not mean
that it is the "best rule" from a policy standpoint. It may or may not be the
best rule. Policy decisions are left for the Legislature and the Board. Many
of the written submissions and some of the oral statements at the hearings
suggested that people thought the Administrative Law Judge would force the
Board to adopt whatever rule the Judge thought was the best one. That is not
the case, and it should be clear that the only question which has been
answered with regard to policy is whether or not the Board has justified its
policy choices as reasonable. There is a "range of reasonableness" that is
broad enough to include many different ideas of how a rule ought to read. So
long as the Board's proposal is within that range, the Judge will declare it
to be reasonable.
There were numerous suggestions for improvements in the rule which are
not mentioned in this Report. This is because discussing them was not
necessary to determine the reasonableness of the Board's rule. Many of them
are, however, desirable changes and, to the extent the Board staff has time,
it would be worthwhile to review the record (particularly the written
submissions) to determine which of them it thinks improve the clarity or
working of the rule. As noted in the final conclusion, there are limitations
on this process , but there is still a great deal of room for the Board to take
advantage of the comments.
A.W.K.
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