Vermont Bar Association

Seminar Materials

Environmental Law Day 2018

June 12, 2018

Trader Duke's Hotel

S. Burlington, VT

Speakers, in order of appearance:

Ryan Kane

Joshua Leckey

Kyle Landis-Marinello

Katelyn Ellerman

Jess Phelps

Julie Curtin

Gerry Tarrant

Thomas Little

Warren Coleman

Jon Groveman

Trey Martin

Jennifer Teske

Hon. Thomas Durkin

Hon. Thomas Walsh

Nicholas Low

Vermont Bar Association Environmental Law Day

June 12, 2018

Year End Update – Environmental Division Supreme Court Decisions

In re Mathez Act 250 LU Permit, 2018 VT 55 – Clarified Environmental Division jurisdiction over interlocutory appeals: “The Environmental Division has no court procedural rules addressing interlocutory review, so the court correctly relied on Vermont Rule of Appellate Procedure 13, which instructs interlocutory review of agency decisions to be considered pursuant to 3 V.S.A. § 815(a). See V.R.E.C.P. 5(a)(2) (stating that Environmental Division follows V.R.A.P. unless V.R.E.C.P. apply); Reporter’s Notes, V.R.A.P. 13 (stating that “by virtue of 3 V.S.A. § 815(a), appeals of interlocutory rulings of administrative agencies should be treated as appeals from final decisions”).” Id. at ¶ 8. Decision also affirmed that appeal period runs regardless of notice, and “lack of notice is not in itself enough to allow a final permit to be reopened[]” even by the District Commission. Id. at ¶ 16 (citing In re Mahar Conditional Use Permit, 2018 VT 20, ¶ 12). In re Korrow Real Estate, LLC, 2018 VT 39 – Supreme Court reversed Environmental Division ruling defining “floodway” for purposes of Act 250 Criterion 1(D) based on deference to Agency of Natural Resources methodology. However, Supreme Court upheld determination that project complied with Criterion 1(D) nonetheless by concluding that there was sufficient evidence to support the Environmental Judge’s conclusion that the project Complied with Criterion 1(D). Supreme Court remanded for a determination of whether the development was on a “shoreline” due to insufficient definition of term “adjacent” and insufficient evidence to support conclusion that the project was not on a shoreline of the Dog and Stony Brook Rivers and if it was whether development complied with Criterion 1(F). ANR v. Supeno, et al., 2018 VT 30 – Supreme Court affirmed civil penalty imposed by the Environmental Division in administrative enforcement action for violation of wastewater and potable water supply permit against due process and preclusion challenge based in concluded Emergency Administrative Order. Supreme Court adopts exception to claim preclusion where court reserved plaintiff’s right to maintain a second action on a particular issue and concludes that the prior Emergency Administrative Order, although final, reserved issue of penalties for future action. Court finally upheld monetary penalty under deferential standard of review to Environmental Division penalty determination. In re Mahar Conditional Use Permit, 2018 VT 20 – Supreme Court reverses and remands decision dismissing as untimely a zoning permit appeal. The Supreme Court rejected Environmental Division approach of looking at constructive or actual notice for start of appeal period and relied on V.R.C.P. 77 and V.R.A.P. 4 to hold that appeal period runs regardless of notice and lack of notice is only a grounds for reopening appeal period pursuant to V.R.A.P. 4. Note also that in footnote 5 the Supreme Court holds that the seven-day window in V.R.A.P.

4(c) is from when the party receives notice of the entry of judgment “from the clerk or from a party; it is not triggered by inquiry notice.” In re Confluence Behavioral Health, LLC, 2017 VT 112 – Supreme Court affirms grant of conditional use approval for proposed community therapeutic residence in Thetford. Supreme Court overrules prior decisions stating that it will defer to Environmental Division construction or interpretation of zoning regulation unless clearly erroneous, arbitrary or capricious, and instead will now review interpretation of zoning ordinance or permit condition without deference and according to principals of statutory construction. Court, in lengthy non-deferential review of decision, comes to the same conclusion as the Environmental Division and concludes that proposed use is a “health care facility” and therefore an allowed conditional use under the Thetford Zoning Bylaws. In re Hinesburg Hannaford Act 250 Permit and Site Plan Approval, 2017 VT 106 – Supreme Court affirms and part and reverses and remands in part Environmental Division Act 250 and site plan approvals for proposed Hannaford grocery store. Supreme Court concludes that building setbacks depicted in 1986 final approved plat were sufficiently clear and therefore were binding and enforceable permit conditions. Court held that it could not consider extrinsic evidence of buildings built in the setback in the past (or Act 250 permit which also included the setback) where the requirements of the approved plat are clear and unambiguous. In Act 250 Appeal, Supreme Court reversed positive findings by the Environmental Division related to the stormwater treatment (specifically a proposed swale) because there was no presumption of compliance with an ANR approval and because there was insufficient evidence supporting the applicant’s expert’s conclusion that the system satisfied the relevant regulatory criteria. Court also reversed imposition of condition requiring traffic signal as condition of approval as unsupported by the evidence and in violation of 10 V.S.A. § 6087(b) (providing that an Act 250 permit cannot be denied on the basis of Criterion 5 but may be reasonably conditioned to mitigate impacts).

Vermont Bar Association Environmental Law Day

June 12, 2018

Year End Update – Environmental Division Decisions

In re Diverting Diamond Interchange SW Permit and Act 250 Appeals, Docket Nos. 50-60-16 Vtec & 169-12-16 Vtec (Walsh, J.) – After multiple pre-trial motions and a five-day merits hearing the Environmental Division granted Act 250 and stormwater permits to the Vermont Agency of Transportation for the new interchange at Exit 16 of I-89. The stormwater decision rests heavily on the Court’s weighing the credibility of the expert witnesses and the facts presented, referring, at FN 1, directly to the recent Hinesburg Hannaford decision where the Supreme Court reversed the Environmental Division for failure articulate evidence supporting an expert witness testimony. The Court held that revisions to an application that was complete when filed do not undermine vested rights. In re Old Lantern Non-Conforming Use, Docket No. 154-12-15 Vtec (Durkin, J.) – Unique situation where Appellants alleging a use violated the relevant zoning regulations, after losing several arguments in a motion for summary judgment, decided at trial not to participate or present any evidence to support Appellants’ remaining arguments. Environmental Division affirmed the Zoning Board’s decision after hearing the landowner’s evidence. Subsequently the Environmental Division granted the landowner’s motion for sanctions for abuse of the judicial process. Court set it for a hearing on the appropriate sanction. In re Brady Sullivan SV, LLC Act 250, Docket No. 38-4-17 Vtec (Durkin, J.) – Decision on Motion for Summary Judgment – Dispute over whether Act 250 can regulate the installation of a helicopter landing area at a development site. Court holds that Act 250 regulation of noise under Criterion 8 is not preempted by the Federal Aviation Act when considering whether to permit a new aircraft landing site but would be in regulating noise impacts from aircraft at an existing landing site. In re Laberge Shooting Range JO, Docket No. 96-8-16 Vtec (Walsh, J.) – Most recent decision in dispute over shooting range. Court holds that the shooting range was not a commercial use, despite receiving monetary donations or payments of $47,062.70 over two years. The Decision rest on a 1995 Jurisdictional Opinion that there was no Act 250 jurisdiction over the shooting range, the burden of proof on a party asserting jurisdiction to establish jurisdiction should attach, and that there was insufficient evidence that the nature of the range had changed since the 1995 JO. In re Ledoux Zoning Permit, Docket No. 81-6-17 Vtec (Walsh, J.) – Dismissal of broad question is illustrative of Environmental Division’s approach to broad questions in light of Atwood Planned Unit Dev. (2017 VT 16). Here the Environmental Judge ordered a broad question be clarified and when it was not, the question was dismissed.

In re Morrisville Hydroelectric Project Water Quality, Docket No. 103-9-16 Vtec (Walsh, J.) – Appeal of Clean Water Act § 401 Water Quality Certification issued by Vermont Agency of Natural Resources to Morrisville Water and Light as part of Federal Energy Regulatory Commission relicensing of hydroelectric facility. MWL appealed the ANR issued 401 Cert based on conditions imposed by ANR. The Vermont Natural Resources Council and the Vermont Chapter of Trout Unlimited cross-appealed arguing for even stricter conditions. The Vermont Paddler’s Club and American Whitewater cross-appealed arguing that the proposed conditions did not protect the existing recreational use of the Green River for whitewater boating. Multiple pre-trial motions raising issues over what considerations are relevant in considering compliance with the Clean Water Act and the Vermont Water Quality Standards including whether social and economic benefits of hydroelectric generation can be considered in reviewing a 401 certification. Environmental Judge rules that social and economic factors cannot be considered under the VWQS. In subsequent decisions, Judge concludes that this does not preclude questions related to practicality, even if that implicates some social or economic considerations. Judge also concluded that the Court had jurisdiction to determine protected existing uses in de novo 401 appeal and that whitewater boating was an existing use of the Green River. In re Costco Act 250 Permit Amendment JO, No. 157-12-16 Vtec (Durkin, J.) – Act 250 Jurisdictional Opinion appeal that change to stormwater permit was not a material change requiring an Act 250 permit amendment. The SW change had been approved by ANR and the Environmental Division on appeal (see In re Costco Stormwater Permit Amendement Appeal, No. 84-7-15 Vtec (Vt. Super. Ct. Envtl. Div. Jul. 29, 2016) (Durkin, J.)) because the modification would not change the nature of the proposed stormwater treatment and would not have any impacts. The Environmental Division granted the Natural Resources Board’s Motion for Summary Judgment and affirmed the JO that no amendment was required.

Vermont Bar Association – Environmental Law Day Year End Update on Public Utility Commission Presented By: Josh D. Leckey, Esq.

Vermont Bar Association – Environmental Law Day

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Prior Public Use Doctrine In re Vermont Gas Sys., Inc., 2017 VT 83

♦ As a matter of first impression, the Court held that the “prior public use” doctrine does not prohibit condemnation of land devoted to a public use when the new use does not materially impair the prior use.

♦ The Court determined that the evidence supported the PUC’s finding that an easement for a buried natural gas pipeline underneath Geprags Park in Hinesburg would not materially impair prior use of the park considering that the pipeline would not disturb the surface within the park and would be entirely underground, VGS was required to use horizontal directional drilling to repair and maintain the pipeline, the fleeting nature of emergency intrusions and remoteness of their likelihood limited their materiality, and placement of pipeline markers would be inconspicuous.

♦ The Court also clarified the necessity requirement for condemnation, explaining that the standard is not whether another route is feasible, but whether the proposed route is reasonably necessary in light of all relevant circumstances, including any alternatives.

Substantial-Change Test In re Conservation Law Found., 2018 VT 42

♦ The Court determined whether an increase in construction-cost estimates for VGS’s Addison Natural Gas Project and changes in energy markets create a substantial change such that VGS had to obtain an amended CPG under Rule 5.408. The Court deferred to the Commission’s interpretation of Rule 5.408 that such a change does not constitute a “substantial change” within the meaning of Rule 5.408.

♦ The Court noted that availability to consider reopening proceedings under VRCP 60 was critical to its review, which the PUC did twice concerning the VGS project.

♦ Note that the ruling was narrow, and was anchored in the Commission’s finding that project costs and the future status of energy markets were not a stated component of the approved CPG. The court accepted the distinction between changes to the actual project, which may require alterations to the CPG, versus changes to the assumptions underlying the Commission’s approval, which may support reopening the proceeding but not necessarily require changes to the CPG itself.

♦ The Court did not reach the PUC’s holding that Rule 5.408 covers only physical changes to a project, even though this is how the test is applied in Act 250 (i.e., the change must be “cognizable”), and the PUC’s substantial-change test was adopted from Act 250. Thus the Court only deferred to the PUC interpretation that Rule 5.408 pertains to approved projects, and because the CPG was not conditioned on the cost estimate accuracy and the ongoing state of energy markets, Rule 5.408 was not triggered.

Single-Plant Test Order Re: 2017 Standard-Offer Award Group, Docket 8817, Order of 10/20/17

♦ The definition of “plant” (30 V.S.A. § 8002(18)) has significant implications under the net-metering and standard-offer programs because it provides the test by which a group of facilities can be considered a single plant. In a matter of first impression, the PUC

Vermont Bar Association – Environmental Law Day

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construed the new definition of plant (as of 2017) to determine whether several facilities constituted a single plant and exceeded the size limitations under the standard-offer program. The PUC disagreed with the Department’s interpretation and sided with developers to adopt a two-part test based on the statutory language.

♦ Single-Plant Test: A group of facilities must (1) be part of the same “project,” considering common ownership, contiguity in time of construction, and proximity; and (2) share common equipment and infrastructure. In other words, so long as the facilities don’t share infrastructure, they are separate plants regardless of their proximity.

Development Affecting Public Investments Application of Peck Electric, Inc, CPG No. NM-6691, Order of 7/21/17

♦ The Hearing Officer held that a 150 kW project would result in undue adverse impacts under aesthetics because it would offend the sensibilities of the average person, but the PUC did not adopt the Hearing Officer’s findings and conclusions under aesthetics.

♦ Instead, the PUC denied a proposed 150 kW solar project on account of undue adverse impacts on Mount Philo under Criterion 9(K). Citing prior precedent, the PUC construed the term “adjacent” under 9(K) to include not only “the impact of the proposed Project on lands physically adjacent to the proposed Project,” but also “to lands where the proposed Project has an adverse aesthetic impact.” Under this construction, the 150 kW project was deemed “adjacent” to Mount Philo even thought it would be at least .8 miles away.

♦ Note that 9(K) analysis is distinct from traditional aesthetics analysis, taking into account “surrounding land uses, recreational activities, and the opinion of relevant state agencies,” which in this case was ANR.

Clearing Impacts Verizon Waterbury Tower, Docket 8601, Order of 9/21/17

♦ The PUC denied an application to construct an 88’ telecommunications tower in Waterbury, Vermont, agreeing with ANR’s conclusion that the project would “destroy or significantly imperil necessary wildlife habitat” in the North Hill forest block. Project construction proposed about an acre of tree clearing and blasting of rock ledge.

♦ The North Hill forest block is 2,067 acres of contiguous forest that extends from Route 100 on the west to Stowe Hollow Road and Barnes Hill Road on the east. The PUC found that the fragmentation caused by the Project would radiate beyond the Project’s relatively small footprint into the forest block. The impacts were greater because the Project would be located in the middle of the forest (as opposed to the periphery) in proximity to mast trees, forested wetland, and wildlife signs.

♦ The Order and related Press Release stressed that the PUC was not imposing a blanket prohibition of telecommunication facilities in Vermont forest blocks.

♦ Regarding deference, the Petitioner argued ANR was not entitled to any deference because its position on forest block impacts changed during the course of the proceeding. The PUC disagreed, and observed that the Hearing Officer did not provide any special deference to ANR’s statutory interpretation but rather relied on its evidence.

Vermont Bar Association – Environmental Law Day

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Otter Creek Solar, Dockets 8797 & 9798, Order of 2/27/18

♦ While approving two solar projects (about 7.2 MW in total), the PUC cautioned that “[f]uture applicants proposing to clear forested areas should carefully consider whether such clearing can be avoided or minimized. It is likely that there will be substantial numbers of new generation facilities proposed in the coming years to meet Vermont’s need for renewable energy. The Commission will be examining whether additional standards related to forest clearing are necessary to ensure that the cumulative effect of siting these facilities does not result in undue adverse effects on the natural environment.”

♦ The projects proposed clearing 28.3 acres of forestland, which drew adverse comments from Vermonters for a Clean Environment and ANR (though ANR did not oppose issuance of the CPGs). The PUC addressed clearing impacts under the natural environment (b)(5) and the General Good of the State (248(a)). The Order includes a helpful and concise framework for analyzing clearing impacts under the natural environment (as opposed to RINA or Necessary Wildlife Habitat).

♦ In the Otter Creek case, ANR concluded that the Projects’ impacts would be adverse but not unduly so. Had ANR reached the opposite conclusion, it seems reasonably likely that the PUC would have denied the projects.

Lifecycle Analysis Cases – Otter Creek Solar (Dockets 8797 & 8798)), Coolidge Solar (Docket 8685), Battle Creek 1 Solar (Case 17-3727); Panton Battery (Case 17-3727)

♦ ANR has continued its request for life-cycle greenhouse gas emissions analysis of renewable energy projects where significant clearing is involved, accounting for manufacturing, installation, maintenance, and removal of Project infrastructure; emissions from mechanized tree clearing and chipping; carbon emissions from the cut trees, the above- and below-ground biomass, and soil releases following clearing; and loss of sequestration of carbon by the cut trees.

♦ The PUC has yet to find that such analysis is required under Section 248, though it relied on lifecycle analysis in the cases cited above.

When the PUC Receives No Deference In re Stowe Cady Hill Solar, LLC, 2018 VT 3 ♦ The Supreme Court reversed the PUC’s sua sponte dismissal of a petition for a net-

metered solar facility. The petition was dismissed as incomplete on account of a notice delay that Cady Hill immediately corrected, and which no party contested. The consequences of dismissal were severe because the petition was filed immediately before a substantial revision to Vermont’s net-metering program that took effect in January 2017. Cady Hill’s project was ineligible under the revised program because the project parcel did not qualify as a “preferred site” under new net-metering rules. As a result, the project as originally proposed was effectively dismissed with prejudice.

♦ The Court explained that it “will find error when a regulation is interpreted or applied in a way that exceeds the statutory mandate under which the regulation was promulgated” or “when a regulation is inconsistently applied.” The Court also cited “[a] fundamental norm of administrative procedure requires an agency to treat like cases alike.”

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♦ In Cady Hill, the Court afforded “no deference” to the Commission’s construction of its completeness rule because it contravened Commission precedent as well as the plain language of a legislative mandate under Act 99 granting important rights and regulatory certainty to developers during the transition to the revised net-metering program.

Preserving Issues for Appeal In re Programmatic Changes to Standard-Offer Program & Investigation into Establishment of Standard-Offer Prices, 2017 VT 77

♦ The Court held that although parties may preserve issues in post-judgment motions if the asserted error did not arise prior to judgment, they may not do so when the issue should have been raised in earlier proceedings before the PUC.

♦ Relying on this fundamental rule, the Court declined to consider a developer’s argument that its projects were entitled to standard-offer contracts under the “sufficient benefits” test set forth in 30 V.S.A. § 8005a(d)(2).

♦ The court noted, for example, that post-judgment motions have preserved issues involving the alleged misuse of evidence that became apparent only after the PUC issued its final decision. In re Entergy Nuclear Vt. Yankee, LLC, 2007 VT 103, ¶ 14 (citing Twenty–Four Vt. Utilities, 159 Vt. 339 (1992); In re Quechee Lakes Corp., 154 Vt. 543 (1990)).

Standard of Review for Intervention Appeals In re Petition of GMPSolar-Richmond, LLC, 2017 VT 108

♦ The Court clarified that a proposed intervenor has no standing to challenge the merits of a CPG for a solar project, where the proposed intervenor was not a party below.

♦ In addition, the Court took the opportunity to explain that it reviews de novo PUC intervention decisions regarding intervention as of right, while permissive intervention—which is discretionary in nature—is subject to an abuse of discretion standard.

Grid Constraints – Sheffield Highgate Export Interface Dairy Air Wind (Case 8887) and Derby Solar (Case 17-1247-NMP)

♦ A handful of ongoing proceedings at the PUC are litigating issues on the potential impacts from adding additional solar or wind generation to the SHEI area. The SHEI is an export-constrained area of the electrical grid in northern Vermont that hosts a number of utility generation projects (including the 65 MW Lowell Wind Project) and receives substantial imports from Hydro-Quebec. These cases are worth monitoring, as the PUC’s decisions could have broad implications on future development and perhaps grid modernization efforts as Vermont works to meet its renewable energy commitments.

18357921.2

NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal

revision before publication in the Vermont Reports. Readers are requested to notify the Reporter

of Decisions by email at: JUD.Reporter@vermont.gov or by mail at: Vermont Supreme Court, 109

State Street, Montpelier, Vermont 05609-0801, of any errors in order that corrections may be made

before this opinion goes to press.

2018 VT 39

No. 2017-133

In re Korrow Real Estate, LLC

Act 250 Permit Amendment Application

Supreme Court

(State of Vermont, Appellant) On Appeal from

Superior Court,

Environmental Division

November Term, 2017

Thomas S. Durkin, J.

Thomas J. Donovan, Jr., Attorney General, and Kyle H. Landis-Marinello, Assistant

Attorney General, Montpelier, for Appellant.

L. Brooke Dingledine of Valsangiacomo, Detora & McQuesten, P.C., Barre, and

David L. Grayck of Law Office of David L. Grayck, Montpelier, for Appellee.

PRESENT: Reiber, C.J., Robinson, Eaton and Carroll, JJ., and Wesley, Supr. J. (Ret.),

Specially Assigned

¶ 1. EATON, J. The District 5 Commission denied Korrow Real Estate LLC’s as-built

application for an Act 250 permit to construct a barn on property alongside the Dog and Stony

Brook Rivers, finding the project failed to comply with Act 250 Criteria 1(D) and 1(F). In doing

so, the Commission construed key terms as defined by the Agency of Natural Resources (ANR).

On appeal, the Environmental Division reversed the decision and remanded the matter to the

Commission with instructions to grant an as-built permit for the project. The Vermont Natural

Resources Board now appeals the court’s decision, asserting that the court failed to accord proper

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deference to the ANR’s statutory authority and expertise, and that the project fails to comply with

the necessary Act 250 permitting criteria. We affirm in part, and reverse and remand in part.

I. Facts and Procedural History

¶ 2. By way of background, appellee, Korrow Real Estate LLC (Korrow), owns

properties off Vermont Route 12A in the Town of Northfield, on either side of Stony Brook Road.

On the northerly side of Stony Brook Road is an improved parcel of land that hosts offices for

Gillespie Fuels and Propane, a business related to Korrow. In 2011, Korrow began constructing a

large barn on a parcel of land on the southerly side of Stony Brook Road. Korrow intended to use

the barn to house Gillespie propane trucks. As built, the barn is roughly 8000 square feet, and sits

at the confluence of the Dog River and the Stony Brook River. After the project was complete in

the summer of 2012, Korrow brought dry pack onto the property to level the parking area inside

the barn. Korrow also brought a small amount of earthen fill to level areas outside the barn.

Portions of this fill were placed in proximity to the nearby rivers. Prior to building the barn and

bringing in the fill, Korrow sought and received a municipal zoning permit. However, Korrow

constructed these improvements without first obtaining an Act 250 permit, which is required for

development of this kind. It was not asserted this omission was intentional.

¶ 3. In 1970, the Vermont Legislature passed Act 250 to protect and conserve

Vermont’s lands and environment, and to ensure that land use would not be detrimental to the

public welfare and interests. 1969, No. 250, § 1 (Adj. Sess.); see generally 10 V.S.A. §§ 6001-

6111. Act 250 requires a land-use permit before certain development can occur. 10 V.S.A.

§ 6081(a) (“No person shall . . . commence development without a permit.”). “Development”

means, in relevant part, “[t]he construction of improvements for commercial or industrial purposes

on more than one acre of land within a municipality that has not adopted permanent zoning and

subdivision bylaws.” Id. § 6001(3)(A)(ii). Korrow’s project is a “development” subject to Act

250 because it is a commercial project constructed on a 6.5-acre parcel in a municipality that has

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not adopted permanent zoning and subdivision bylaws. As such, the Korrow project requires an

Act 250 permit to remain as built on the property site.

¶ 4. When Act 250 applies to development, a permit can only issue if the project

complies with all ten Act 250 criteria. Id. § 6086(a)(1) (outlining conditions and criteria necessary

for project development). These criteria specifically address development on or near waterways

and rivers. Id. On appeal, the parties dispute whether the Korrow project complies with Act 250

Criterion 1(D), pertaining to development within the “floodway” and “floodway fringe” of nearby

waters, and Criterion 1(F), pertaining to development on “shorelines.” Id. § 6086(a)(1)(D), (F).

These provisions of Act 250 aim to protect Vermonters from the hazards of flooding and erosion,

and to preserve the scenic and recreational features of rivers and their shorelines. Id. An applicant

for an Act 250 permit, such as Korrow, bears the burden of proving compliance with both Criterion

1(D) and Criterion 1(F). Id. § 6088(a).

¶ 5. To determine project compliance with Criterion 1(D), the threshold question is

whether the project is in the “floodway” or “floodway fringe” of a nearby waterway; if it is, then

the applicant must prove that the project will not “restrict or divert the flow of flood waters,” and

“significantly increase the peak discharge of the river,” and “endanger the health, safety and

welfare of the public or of riparian owners during flooding.” Id. § 6086(a)(1)(D)(i), (ii).

¶ 6. Similarly, Criterion 1(F) requires a threshold determination as to whether the

project is located on a “shoreline.” Id. § 6086(a)(1)(F). If so, shoreline development “must of

necessity be located on a shoreline” and must be conducted in a manner that “will, insofar as

possible and reasonable”: (1) retain shorelines and waters “in their natural condition”; (2) allow

continued and recreational access to the waters; (3) provide screening between the development

and the river; and (4) “stabilize the bank from erosion, as necessary, with vegetation cover.” Id.

§ 6086(a)(1)(F)(i)-(iv).

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¶ 7. Act 250 provides definitions for the terms “floodway, “floodway fringe,” and

“shoreline”:

(6) “Floodway” means the channel of a watercourse which is

expected to flood on an average of at least once every 100 years and

the adjacent land areas which are required to carry and discharge the

flood of the watercourse, as determined by the Secretary of Natural

Resources with full consideration given to upstream impoundments

and flood control projects.

(7) “Floodway fringe” means an area which is outside a floodway

and is flooded with an average frequency of once or more in each

100 years as determined by the Secretary of Natural Resources with

full consideration given to upstream impoundments and flood

control projects.

. . . .

(17) “Shoreline” means the land adjacent to the waters of lakes,

ponds, reservoirs, and rivers. Shorelines shall include the land

between the mean high water mark and the mean low water mark of

such surface waters.

10 V.S.A. § 6001(6), (7), (17) (emphases added). These provisions expressly grant the ANR

authority to define the scope of the “floodway” and “floodway fringe.” Id. § 6001(6), (7). If the

ANR determines that a project falls within the “floodway” or “floodway fringe,” then the project

must also comply with additional Criterion 1(D) specifications to receive permit approval. 10

V.S.A. § 6086(a)(1)(D)(i)-(ii) (requiring project will not “restrict or divert the flow of flood

waters,” and “significantly increase the peak discharge of the river,” and “endanger the health,

safety and welfare of the public or of riparian owners during flooding”).

¶ 8. The Natural Resources Board (NRB) has statutory authority to adopt rules

pertaining to Act 250 permit applications. 10 V.S.A. § 6025(b) (“The Board may adopt substantive

rules . . . that establish criteria under which applications for permits under this chapter may be

classified in terms of complexity and significance of impact under the standards of subsection

6086(a) of this chapter.”). The NRB has adopted such a rule defining “shoreline” for the purpose

of determining compliance with Criterion 1(F). Act 250 Rules, Rule 2(C)(20),

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http://nrb.vermont.gov/sites/nrb/files/documents/2015%20Adopted%20Rules.pdf [https://perma.

cc/4G79-LLZY] [hereinafter NRB Rule]. NRB Rule 2(C)(20) defines “shoreline” as follows:

For purposes of 10 V.S.A. § 6086(a)(1)(F), a project involves the

“development or subdivision of shorelines,” if:

(a) the project involves construction on or the use of “the land

between the mean high water mark and the mean low water mark of

such surface waters.” 10 V.S.A. § 6001(17), or

(b) the project, or an element of the project which is adjacent to the

shoreline, has the potential for significant impact on any of the sub

criteria specified in 10 V.S.A. § 6086(a)(1)(F)(i)-(iv).

¶ 9. With these definitions in mind, we return to Korrow’s application to the District

Commission for an as-built Act 250 permit. Applications for an Act 250 permit are filed with the

District Commission to determine compliance with Act 250 criteria, including Criterion 1(D) and

Criterion 1(F) discussed above. 10 V.S.A. § 6083(a) (“An application for a permit shall be filed

with the District Commission as prescribed by the rules of the [Natural Resources] Board . . . .”).

In the application at issue, Korrow indicated the project involved “development or subdivision on

or near a river, lake, pond or reservoir shoreline.” The Commission heard testimony from an ANR

expert regarding the project’s potential impacts on the Dog and Stony Brook Rivers, and evaluated

the project’s compliance with Act 250 Criteria 1(D) and 1(F).

¶ 10. Regarding Criterion 1(D), the ANR calculated the scope of the “floodway” and

“floodway fringe” and determined that the Korrow project fell within the Act 250 “floodway.” To

calculate the scope of the “floodway,” the ANR adhered to its “Technical Guidance for

Determining Floodway Limits Pursuant to Act 250 Criterion 1(D).” Agency of Nat. Res.,

Technical Guidance for Determining Floodway Limits Pursuant to Act 250 Criterion 1(D)

(October 9, 2009), http://www.docket7970.com/ANR/Attachment%20A.ANR.VGS.RTP.1-

3%20(Nelson)/VT%20Technical%20Guidance%20for%20Determining%20Floodway%20Limit

s%20Pursuant%20to%20Act%20250%20Criterion%201(D).pdf [https://perma.cc/3YXE-

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NQAL]. These guidelines, originally issued in 2003, were updated in 2009 to “enhance

understanding of the ANR Floodway Procedure” and ensure “clear, consistent, and broadly

accepted [ANR] floodway determinations.” Id. at 1. The document is public and provides general

background on how the ANR determines the “floodway” and “floodway fringe” when considering

Criterion 1(D). The guidelines recognize the role of erosion hazards in defining the Act 250

“floodway,” and require the ANR to “consider both inundation and fluvial erosion hazards . . . in

the Act 250 regulatory process.” Id. The ANR has stated that the guidelines’ procedure for

determining the Act 250 “floodway” surrounding an area “strikes an acceptable balance between

having a consistent set of guidelines to reduce inundation and erosion hazards while allowing

consideration of existing and future development . . . [and] remaining consistent with the science-

based stream equilibrium objective.” Id. at 2.

¶ 11. The guidelines state:

For the purpose of determining the inundation floodway under 10

V.S.A. § 6001(6), and the impacts of a project built in a floodway

under Criterion 1(D), Agency technical staff will consider the

regulatory floodway as defined by the Federal Emergency

Management Agency (FEMA) and [the National Flood Insurance

Program (NFIP)] regulatory standards.

Id. at 4. The guidelines clarify that the ANR may separately assess the geomorphology and erosion

hazards of a project site to determine the “fluvial erosion hazard” (FEH) area. The ANR may also

conclude that the FEH area applies “to lands that lie outside” the NFIP and FEMA designations.

Id. at 3-4. Since publishing the updated guidelines in 2009, the ANR has also issued a “River

Corridor Protection Guide,” which provides a more detailed description of the methodology and

data used to create the ANR FEH area. Both of these guidelines are instructive in understanding

how the ANR calculates the FEH area for a project. Notably, the FEH area can be within, or less

wide, than the inundation area mapped by the NFIP or FEMA, or it can be broader. “Upon

comparison” of these measurements—the ANR’s assessment of the FEH area and the NFIP/FEMA

7

designated area—“the Act 250 floodway limit shall be whichever laterally extends further from

the stream.” Id. at 4. Thus, the guidelines permit the ANR to expand the scope of the Act 250

“floodway” to align with the FEH area—even if the FEH area is broader than the NFIP or FEMA

measurements.

¶ 12. Pursuant to these guidelines, the ANR construes the Act 250 “floodway” as

encompassing the agency’s assessment of the FEH area, the NFIP-mapped areas, and FEMA-

designated portions of the Special Flood Hazard Area.

¶ 13. This construction by the ANR was critical to evaluating whether the Korrow project

was within the Act 250 “floodway.” Here, the ANR determined that “[m]uch of the existing barn,

fill, and proposed drainage . . . are located within the Act 250 Floodway” because these portions

of the project were constructed within the ANR’s FEH area. The ANR determined the project was

within the FEH area based on a geomorphic assessment of the project area, the project’s proximity

to the Dog and Stony Brook Rivers, and the potential for physical adjustments in the area. As

noted above, the guidelines allow the Act 250 “floodway” to expand to match the ANR’s definition

of the FEH area. Therefore, although the barn was located outside the NFIP-mapped area and the

FEMA-designated area, the Korrow project was within the ANR’s FEH area, and thereby within

the Act 250 “floodway.” Id. § 6001(6). After making the preliminary finding that the project was

within the “floodway,” the Commission assessed project compliance with § 6086(a)(1)(D)(i)-(ii),

and determined the project could not meet the Criterion 1(D) requirements as built. The

Commission ordered that the project be removed and relocated to comply with Criterion 1(D).

¶ 14. The Commission reached a similar conclusion regarding Criterion 1(F). Based on

recommendations from the ANR and the Department of Fish and Wildlife regarding the

preservation of riparian buffers—naturally vegetated areas bordering waterways—along the Dog

River and Stony Brook River, the Commission found the Project was located on a “shoreline,” id.

8

§ 6001(17), and required that the project be removed and relocated to comply with Criterion 1(F).

Id. § 6086(a)(1)(F). Korrow appealed the Commission’s order to the Environmental Division.

¶ 15. While recognizing the deferential standard generally applied to agency

interpretations of statutory provisions within their area of expertise, the Environmental Division

found the ANR’s construction of the “floodway” to be unreasonable in light of the project location

and testimony presented at the evidentiary hearing. The court determined the project was not

within a “floodway.” Despite this determination, the court made additional findings that the

project would not cause the adverse impacts for development within a floodway prohibited by

Criterion 1(D) even if the project was within the floodway. The court also found that the project

was not constructed on a “shoreline” and complied with the criteria listed in 10 V.S.A.

§ 6086(a)(1)(F)(i)-(iv). Ultimately, the court found that the project complied with Criteria 1(D)

and 1(F), reversed the Commission’s determinations, and remanded the proceedings to the

Commission to issue Korrow’s as-built Act 250 permit. This appeal followed.

¶ 16. On appeal, we address two issues: (1) whether the Korrow project complies with

Act 250 Criterion 1(D), pertaining to the project’s impact on the “floodway” and the “floodway

fringe”; and (2) whether the project complies with Criterion 1(F), pertaining to development on a

“shoreline.” 10 V.S.A. § 6086(a)(1)(D), (F). The parties dispute whether the ANR appropriately

calculated the scope of the “floodway” and “floodway fringe”; to what extent the court should

defer to the ANR’s definition of these terms; and whether the project was constructed on a

shoreline and, if so, whether the construction “of necessity” occurred on the shoreline. We

consider project compliance with Criteria 1(D) and 1(F) below.

II. Standard of Review

¶ 17. We review the court’s factual findings for clear error and its findings of law de

novo. In re Vill. Assocs. Act 250 Land Use Permit, 2010 VT 42A, ¶ 7, 188 Vt. 113, 998 A.2d 712

(“Under our standard of review, the Environmental Court determines the credibility of witnesses

9

and weighs the persuasive effect of evidence, and we will not overturn its factual findings unless,

taking them in the light most favorable to the prevailing party, they are clearly erroneous. We

review issues of law or statutory interpretation de novo.” (quotations and citations omitted)). We

will determine that a court’s factual findings are clearly erroneous in limited circumstances—“only

if they are supported by no credible evidence that a reasonable person would rely upon to support

the conclusions.” In re Zaremba Gr. Act 250 Permit, 2015 VT 88, ¶ 6, 199 Vt. 538, 127 A.3d 93.

In contrast, the court’s legal conclusions will be upheld “if they are reasonably supported by the

findings.” Id. (quotation omitted).

¶ 18. Thus, we review the court’s findings of fact—whether the project was within a

“floodway” and/or on a “shoreline”—for clear error, and its legal conclusions—whether the

project complied with Criteria 1(D) and 1(F) in light of its placement—de novo.

III. Project’s Compliance with Criterion 1(D)

¶ 19. Act 250 Criterion 1(D) requires applicants who are proposing project development

within the “floodway” or the “floodway fringe” of a body of water to demonstrate compliance with

certain requirements. See 10 V.S.A. § 6086(a)(1)(D)(i) (explaining that applicant must show

development within floodway “will not restrict or divert the flow of flood waters, and endanger

the health, safety and welfare of the public or of riparian owners during flooding”); id.

§ 6086(a)(1)(D)(ii) (explaining that applicant must demonstrate development within floodway

fringe “will not significantly increase the peak discharge of the river or stream within or

downstream from the area of development and endanger the health, safety, or welfare of the public

or riparian owners during flooding”). Determining whether a project triggers analysis under

Criterion 1(D) requires a preliminary finding that the project is located within a “floodway” or

“floodway fringe.” Id. § 6001(6), (7). Notably, the ANR has specific statutory authority to

determine the area comprising a “floodway” or “floodway fringe” pursuant to 10 V.S.A. § 6001(6)

and (7), and thus whether a project falls within those areas. See Zaremba Gr. Act 250 Permit, 2015

10

VT 88, ¶ 7 (“ANR has authority, pursuant to Act 250, to determine whether a particular project

will fall within a floodway. Moreover, at an Environmental Division trial, ANR may, as

intervenor, present evidence relevant to its expertise, which the Environmental Division may rely

upon in deciding the case.” (citation omitted)). Here, the parties dispute whether the Korrow

project was within the “floodway” or “floodway fringe,” and whether the Environmental Division

accorded the ANR proper deference in interpreting these terms.

¶ 20. Even when conducting an evidentiary hearing, the court owes deference to agency

interpretations of policy or terms when: (1) that agency is statutorily authorized to provide such

guidance; (2) complex methodologies are applied; or (3) such decisions are within the agency’s

“area of expertise.” See Plum Creek Me. Timberlands, LLC v. Vt. Dept. of Forests, Parks & Rec.,

2016 VT 103, ¶ 25, 203 Vt. 197, 155 A.3d 694 (explaining agency determinations regarding “the

proper interpretation of policy or methodology within the agency’s expertise are entitled to

deference, even where there is a de novo hearing within the superior court”); In re Woodford

Packers, Inc., 2003 VT 60, ¶ 12, 175 Vt. 579, 830 A.2d 100 (mem.) (deferring to agency

interpretation of “floodway” and “floodway fringe” in Act 250 permit proceeding because ANR

had authority to define terms based on plain language of statute).

¶ 21. While “[d]ecisions made within the expertise of such agencies are presumed

correct, valid, and reasonable,” the deference owed to agency determinations is not absolute. Plum

Creek Me. Timberlands, LLC, 2016 VT 103, ¶ 31. An agency’s authority to define terms within

its statutory purview will be given deference unless that authority is applied “arbitrarily and

capriciously” such that it “give[s] rise to a violation of due process.” Woodford Packers, Inc.,

2003 VT 60, ¶ 17. Agency determinations regarding complex methodologies are similarly entitled

to deference by the court, unless the opposing party can demonstrate the agency decision was

“wholly irrational and unreasonable in relation to its intended purpose.” Plum Creek Me.

Timberlands, LLC, 2016 VT 103, ¶ 28 (quotation omitted).

11

¶ 22. Here, the ANR had broad statutory authority and the relevant expertise to define

the “floodway” and “floodway fringe” surrounding the Dog and Stony Brooks Rivers, and the

ANR applied complex methodologies to define the scope of these areas. For these reasons, the

court owed deference to the ANR’s definitions of these terms. First, “[t]he plain language of the

statute states that the Secretary of ANR is authorized to make determinations as to what constitutes

a floodway or a floodway fringe.” Woodford Packers, Inc., 2003 VT 60, ¶ 12; 10 V.S.A.

§ 6001(6), (7). This statutory grant of authority alone signals that the court owed deference to the

ANR interpretations of these terms under our caslaw. Second, calculating the scope of these areas

requires the application of complex methodologies within the ANR’s area of expertise, as

demonstrated by the Technical Guidance document and River Corridor Protection Guide, to which

the court also owed deference. See Plum Creek Me. Timberlands, LLC, 2016 VT 103, ¶¶ 29-30

(explaining that, even in context of de novo hearing, “deference is due [when] the methodology

for determining compliance is an area over which [the agency] has broad statutory authority and

the relevant expertise”). Therefore, the Environmental Division owed deference to the ANR’s

interpretation of the terms “floodway” and “floodway fringe” in conducting its evidentiary hearing

unless the ANR’s construction of these terms was “arbitrarily and capriciously applied” such that

it “[gave] rise to a violation of due process.” Woodford Packers, Inc., 2003 VT 60, ¶ 17. A mere

disagreement with the ANR’s interpretation of those terms is insufficient to allow the

Environmental Division to substitute its own interpretation, especially in light of the broad

statutory authority given to the ANR in applying those terms. Plum Creek Me. Timberlands, LLC,

2016 VT 103, ¶ 30.

¶ 23. In this case, the ANR determined the Korrow project was within the Act 250

“floodway” based on the project’s location relative to the FEH area surrounding the Dog and Stony

12

Brook Rivers.1 This ANR determination was based on established practice derived from the

agency’s Technical Guidance document, which requires the ANR to conduct complex calculations

regarding the likelihood of flooding and erosion near the rivers at issue and the project site, and

the project’s potential impact on the area. The ANR presented detailed maps, exhibits, and expert

testimony to explain its methodology and outcomes. On appeal, the trial court found the ANR’s

interpretation of the “floodway” to be unreasonable because it disagreed with the ANR’s methods

for calculating the FEH area. Applying its own methodology, the court construed the term

“floodway” to encompass a smaller area, which did not include the Korrow project. Because the

court determined the project was not within a “floodway,” the court did not deem it necessary to

evaluate the project’s compliance with Act 250 Criterion 1(D).

¶ 24. The Environmental Division erred when it determined that the methodology

applied by Korrow’s expert, or the methodology of the court, was superior to that employed by the

ANR. Plum Creek Me. Timberlands, LLC, 2016 VT 103, ¶ 30. “We have cautioned that courts

are not a higher environmental agency entrusted with the power to make environmental law and

policy, but rather exercise a narrow role in ensuring that the decisions of ANR are made in

accordance with law.” Id. (quotations omitted). Where “questions about complicated

methodologies within the agency’s expertise” arise, “a reviewing court, even in the context of a de

novo hearing, must give deference to the agency’s decision.” Id. (quotation omitted).

¶ 25. Here, the Legislature granted the ANR express authority to construe “floodway”

under the relevant Act 250 provisions, this task is within the ANR’s area of expertise, and the ANR

measured the project’s compliance with Criterion 1(D) using complicated methodologies for

determining the “floodway” that are established practice within the agency. Absent a violation of

due process or evidence that the agency decision was arbitrary and capricious, the court should

1 See, supra, ¶¶ 12-14.

13

have deferred to the agency’s interpretation of the terms at issue and applied them when assessing

the project. There is no such violation or evidence here.2 The court’s failure to afford deference

to the ANR’s interpretation of terms that the Legislature expressly placed within the agency’s

statutory purview, were within the ANR’s area of expertise, and required complex methodologies

to discern, was error. Accordingly, we apply the ANR definitions of “floodway” and “floodway

fringe” on appeal.

¶ 26. In applying the ANR definition, we find that Korrow’s project was within the

“floodway” under 10 V.S.A. § 6001(6)—triggering analysis of project compliance with Act 250

Criterion 1(D).3 10 V.S.A. § 6086(a)(1)(D). Criterion 1(D)(i) specifies: “A permit will be granted

whenever it is demonstrated by the applicant that . . . development . . . within a floodway will not

restrict or divert the flow of flood waters, and endanger the health, safety and welfare of the public

2 The Environmental Division determined that the ANR definition of “floodway” was

unreasonable because the ANR’s calculation of the FEH area and stream sensitivity assessment

did not comport with the court’s view of the “natural lay” of the land adjacent to the Dog and

Stony Brook Rivers. The court used this rationale to delve into lengthy analysis under Chevron.

Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 37 (1984). The fact that the court

disagreed with the ANR’s assessment is insufficient to demonstrate the ANR’s methodology was

unreasonable. In Woodford Packers, we explained that the ANR has the authority to define the

“floodway” and “floodway fringe” for the purpose of Act 250 Criterion 1(D), even when the ANR

alters its methodology for doing so. Woodford Packers, Inc., 2003 VT 60, ¶¶ 12-14 (“An agency

is not required to adopt rules or regulations to carry out what its authorizing statute specifically

directs it to do. While ANR’s alteration of its methodology for determining floodways may have

been a surprise to WPI—apparently the first applicant to undergo ‘fluvial geomorphology’

analysis—we cannot conclude that it lacked authority to do so.” (citation omitted)). The court

noted that, while “[s]tandardless alteration of ANR’s practice of determining floodways may give

rise to a violation of due process if arbitrarily and capriciously applied,” reliance on ANR

methodology is appropriate when such methods are “soundly grounded and supported by the

evidence.” Id. ¶ 17. Here, the ANR’s methodology for calculating the FEH area was an

established practice—it was not arbitrarily or capriciously applied to the Korrow project.

Moreover, the ANR provided ample support, including testimony, maps, and exhibits, to support

its interpretation of the Act 250 “floodway.” The ANR was well within its statutory bounds when

calculating the “floodway” here, and its authority should not have been usurped by the court.

3 Because the project is within the “floodway” under § 6001(6), it is not necessary to

address whether it is also within the broader scope of the “floodway fringe” under § 6001(7) or

analyze its compliance with § 6086(a)(1)(D)(ii), regarding development within the floodway

fringe.

14

or of riparian owners during flooding.” Id. § 6086(a)(1)(D)(i). Here, the court made findings of

fact sufficient to support its conclusion that the project’s construction within the floodway would

not “restrict or divert the flow of flood water” or “endanger the health, safety and welfare of the

public or riparian owners during flooding.”

¶ 27. The court does not owe deference to the Commission regarding its findings of fact

when conducting its own evidentiary hearing, and we will defer to the trial court’s findings of fact

unless they are clearly erroneous. Zaremba Gr. Act 250 Permit, 2015 VT 88, ¶ 6.

¶ 28. Even though the court erroneously found that the project was located outside the

“floodway,” there was sufficient evidence to support the trial court’s conclusion that the project

complied with Criterion 1(D). The court based this conclusion on “undisputed evidence at trial,”

which was put into context for the court by a site visit conducted prior to trial, that the Korrow

project was on “a significant upward slope” and therefore would not restrict or divert floodwater

movement in a manner that would endanger others. The court found that “the land rises” from a

“relatively flat area beside the river” up to the Korrow property. Witnesses at trial further testified

that the Korrow parcel had not flooded in the past fifty years, despite significant storms that have

caused recent flooding in the area, such as Tropical Storm Irene in 2011. One witness, who lives

downstream from the project, expressly stated that the barn did not “endanger” his safety due to

the project’s location:

[Attorney:] Q. Do you have any concern that there could be a flood

event that would cause you concern, danger, would endanger your

safety because that barn is located where it is?

[Neighbor:] A. No. Absolutely not.

The court noted “the historical significance of the Korrow parcel has been that it is where residents

have parked their vehicles and congregated to witness flooding events, without fear of being

washed away.” Additionally, a licensed professional engineer and land surveyor who visited and

evaluated the project site testified that the project would not divert or restrict the flow of

15

floodwaters or “endanger the health, safety, and welfare of the public or of riparian owners, during

flooding.”

¶ 29. Taking the evidence in the light most favorable to the prevailing party, Korrow, the

court’s factual findings that project construction will not “restrict or divert the flow of flood

waters” or “endanger the health, safety and welfare of the public or riparian owners during

flooding” are supported by “credible evidence that a reasonable person would rely upon to

support” the court’s conclusions. 10 V.S.A. § 6086(a)(1)(D)(i); Zaremba Gr. Act 250 Permit, 2015

VT 88, ¶ 6; Vill. Assocs. Act 250 Land Use Permit, 2010 VT 42A, ¶ 7. Based on these factual

findings, we conclude that, although the Korrow project was constructed within a “floodway,” the

project conforms with the requirements under Act 250 Criterion 1(D). 10 V.S.A. § 6086(a)(1)(D).

IV. Project’s Compliance with Criterion 1(F)

¶ 30. For the Korrow project to remain as developed, compliance with Criterion 1(D) is

not enough; if this project is within a shoreline, the project must also comply with Criterion 1(F),

which regulates development within shorelines. Under 10 V.S.A. § 6086(a)(1)(F):

A permit will be granted whenever it is demonstrated by the

applicant that . . . the development . . . of shorelines must of

necessity be located on a shoreline in order to fulfill the purpose of

the development or subdivision, and the development . . . will,

insofar as possible and reasonable in light of its purpose:

(i) retain the shoreline and the waters in their natural condition;

(ii) allow continued access to the waters and the recreational

opportunities provided by the waters;

(iii) retain or provide vegetation which will screen the development

or subdivision from the waters; and

(iv) stabilize the bank from erosion, as necessary, with vegetation

cover.

(Emphases added.)

¶ 31. Our first task is to clarify the definition of “shoreline.” Act 250 provision

§ 6001(17) defines “shoreline” as “the land adjacent to the waters of lakes, ponds, reservoirs, and

16

rivers. Shorelines shall include the land between the mean high water mark and the mean low

water mark of such surface waters.” Id. § 6001(17) (emphasis added).4 The Legislature also

authorized the NRB to adopt additional rules interpreting Act 250 provisions. Id. § 6025(b).

Pursuant to this enabling language, the NRB adopted rules which provide further interpretation of

“shoreline.” NRB Rule 2(C)(20) specifies that “[f]or purposes of 10 V.S.A. § 6086(a)(1)(F), a

project involves the ‘development or subdivision of shorelines’ ” if: “(a) the project involves

construction on or the use of ‘the land between the mean high water mark and the mean low water

mark of such surface waters,’ ”5 or “(b) the project, or an element of the project which is adjacent

to the shoreline, has the potential for significant impact on any of the subcriteria specified in 10

V.S.A. § 6086(a)(1)(F)(i)-(iv).” NRB Rule 2(C)(20)(a), (b) (emphasis added).

¶ 32. Under the definitions of “shoreline” provided in § 6001(17) and NRB Rule

2(C)(20), a project constructed on land “adjacent” to a river is on a “shoreline,” and it will be

subject to the stringent requirements of § 6086(a)(1)(F). Thus, determining whether the Korrow

project is “adjacent” to the Dog and Stony Brook Rivers is essential to finding whether the project

is or is not on a shoreline and whether further analysis regarding project compliance with Criterion

1(F) is necessary. With this in mind, we turn to two remaining questions: (1) whether the Korrow

project is on a “shoreline” pursuant to the definitions provided in § 6001(17) and NRB Rule

2(C)(20); and (2) if so, whether the project complies with Criterion 1(F), § 6086(a)(1)(F).

4 Unlike “floodway” and “floodway fringe” under § 6001(6) and (7), the ANR is not

statutorily tasked with defining shorelines under § 6001(17). The parties do not dispute, and we

do not consider, the level of deference the court owes to the agency construction of “shoreline.”

5 The parties do not dispute that the Korrow project is outside the scope of “land between

the mean high water mark and the mean low water mark” of the Dog River and Stony Brook

River—that element of both provisions is inapplicable to our analysis. 10 V.S.A. § 6001(17); NRB

Rule 2(C)(2)(a).

17

¶ 33. Whether the Korrow project is on a “shoreline” is a finding of fact that this Court

reviews for clear error. The court’s determination will stand unless there is “no credible evidence

that a reasonable person would rely upon to support the conclusion[].” Zaremba Group Act 250

Permit, 2015 VT 88, ¶ 6.

¶ 34. There are two flaws in the court’s findings. First, although interpreting the scope

of land “adjacent” to the rivers is essential to determining whether a project is on a “shoreline,” no

definition of “adjacent” is provided by the trial court. Second, even applying the court’s

contextual, rather than distance-based, analysis of the project’s location in relation to the Dog and

Stony Brook Rivers, the court’s conclusion that the project was not on the “shoreline” is based on

insufficient evidence.

¶ 35. First, the court’s failure to construe the term “adjacent” leaves a hole in the analysis

of the issue before us—whether the Korrow project was on a “shoreline.” While this Court has

not defined “adjacent” in the context of an Act 250 proceeding, the Environmental Division has

evaluated this term in the context of town zoning bylaws, which restricted project development on

public waters. In re Irish Constr. Application, No. 44-3-08 Vtec. (Vt. Envtl. Ct. Nov. 2, 2009),

https://www.vermontjudiciary.org/sites/default/files/documents/Irish%20Construction%20Appli

cation%20%20Docket%2044-3-08%20Vtec.pdf [https://perma.cc/CR7Z-794R]. In that case, the

Environmental Division appears to have applied a distance-based approach to determine

adjacency. The court explained that the plain meaning of “adjacent” was “close to; next to; lying

near; [or] adjoining” a body of water. Id. at 5 (quotation omitted). The proposed project in Irish

Construction Application was eighteen feet from the waterway at issue and was deemed “adjacent”

to public water for the purposes of the zoning ordinance. Id.

¶ 36. In contrast here, the court seems to be applying a functional application of

“adjacent” by looking to the project’s location within the riparian buffers of the Dog and Stony

Brook Rivers and evaluating the project’s impact on the four Criterion 1(F) subcriteria to

18

determine whether the project is on a “shoreline.” Considering the parties do not dispute the

definition of “adjacent” and the court does not engage with the issue, we decline to sua sponte

construe the term here. Rather, we look to the record below to support the court’s finding that the

project was not on a “shoreline.”

¶ 37. Second, based on the record below, even applying the court’s functional, rather than

distance-based, application of “shoreline,” there was insufficient evidence for the court to

determine that the Korrow project was not on a shoreline. The court never clearly defined the

scope of the shoreline; instead, the court measured the project’s compliance with Criterion 1(F)

based on evidence and testimony regarding the project’s proximity to the riparian buffers along

the Dog and Stony Brook Rivers and its compliance with the four subcriteria outlined in

§ 6086(a)(1)(F)(i)-(iv).

¶ 38. Riparian buffers are undeveloped, vegetated areas bordering waterways, which “are

important for [protecting] adjacent waters as well as downstream reaches.” The ANR recommends

that permit conditions require undisturbed, naturally vegetated buffers be maintained along

streams, and “the Department of Fish and Wildlife recommends maintenance of a minimum 50-

foot undisturbed riparian buffer along Stony Brook . . . [and] a 100-foot minimum undisturbed

riparian buffer between the development and the top of the Dog River riverbank.” The Korrow

project placed a small amount of fill within the Stony Brook River’s 50-foot buffer during

construction. Although the project’s “as-built location” is “approximately 130 feet” from the Dog

River, a small amount of fill was also placed within the Dog River’s 100-foot buffer during

construction.

¶ 39. The evidence regarding the project’s location in relation to riparian buffers between

the Korrow project and the rivers does not justify the court’s finding that the project was not on a

shoreline. To the contrary, this evidence indicates that part of the fill associated with the project

was within the riparian buffers of the Dog and Stony Brook Rivers. The court appears to apply

19

the following logic: A project is on a shoreline if it is developed on land adjacent to a river; land

is adjacent to a river if it is within the riparian buffer; the project here is only partially within the

riparian buffer; therefore, the project is not adjacent to the river and is not on the shoreline. Even

if we accept this logic and construe the term “adjacent” as synonymous with “within the riparian

buffer,” as the trial court seems to have done, then the undisputed fact that portions of the project

were within the riparian buffers of both rivers and the impact that fact has on the “shoreline”

determination are not addressed in the court’s findings. Thus, the findings are insufficient to

determine that the project was not on a shoreline.

¶ 40. The court further states that, even if the project was on a shoreline, it complies with

the four subcriteria in § 6086(a)(1)(F)(i)-(iv) and thus meets the shoreline requirements of Act 250.

However, the court fails to consider the full requirements of § 6086(a)(1)(F)(i)-(iv) by not

assessing, if the project is within the shoreline, whether the project was “of necessity” located

within a “shoreline.”

¶ 41. Criterion 1(F) requires the Environmental Division to “make its own determination

that a development need be located on the shoreline.” In re McShinsky, 153 Vt. 586, 591, 572

A.2d 916, 919 (1990). NRB Rule 2(C)(21) defines “of necessity” for the purposes of 10 V.S.A.

§ 6086(a)(1)(F):

[T]he project or a portion of the project must serve a water-related

purpose and . . . the project’s location on the shoreline serves such

an integral part of the developmental scheme that the inability to

locate the project, or a portion of the project, on the shoreline would

make the project impossible[.]

If this project is within a “shoreline,” the court must determine compliance with the “of necessity”

requirement in addition to evaluating whether the project meets the four subcriteria outlined in 10

V.S.A. § 6086(a)(1)(F). The court did not do so here.

¶ 42. Considering the court’s failure to adequately define the scope of the “shoreline”

along the Dog and Stony Brook Rivers, the court’s analysis of the project’s compliance with

20

Criterion 1(F), even when viewed in the light most favorable to the prevailing party, is insufficient

to justify its conclusions. Further, should the project fall within the “shoreline,” the court must

then further consider whether it must, of necessity, be located there.

¶ 43. Based on the record below, we cannot determine whether the project is constructed

on a “shoreline” as defined in § 6001(17), an assessment that may or may not require ANR

expertise, and, if so, whether the project complies with the subcriteria required by § 6086(a)(1)(F).

As such, the Environmental Division’s conclusion that the project complied with Criterion 1(F) is

reversed and this issue is remanded to the court for further findings consistent with this opinion.

Because the question of what is meant by “adjacent” is critical to the shoreline determination and

has thus far not been briefed or argued, the parties are directed upon remand to brief this issue for

the court.

We reverse the Environmental Division’s ruling defining the term “floodway,” but affirm

its conclusion that the project complied with Criterion 1(D). We reverse and remand to the

Environmental Division for further proceedings to determine whether this project involves a

“shoreline” and, if so, the project’s compliance with Criterion 1(F).

FOR THE COURT:

Associate Justice

1

STATE OF VERMONT

SUPERIOR COURT ENVIRONMENTAL DIVISION

Docket No. 29-3-16 Vtec

Korrow Real Estate, LLC Act 250

Permit Amendment Application

(Appeal from Act 250 Permit No. 5W1559)

Merits Decision

This is an appeal by Korrow Real Estate, LLC (“Korrow”) from a District Commission

decision granting Korrow a state land use (“Act 250”) permit. The Court held a trial on March 9–

10, 2017, at the Washington County Civil Division, and at the close of trial ruled from the bench

in favor of Korrow. The Court originally intended to issue a written judgment order after the trial

pursuant to V.R.C.P. 58. Upon reflection, for clarity for the parties and practice before the

Environmental Division generally, we repeat and elaborate on our decision here in writing.

Korrow owns properties off Vermont Route 12A in the Town of Northfield (“Town”), on

either side of Stony Brook Road. On the northerly side of Stony Brook Road is an improved parcel

of land that hosts offices for Gillespie Fuels and Propane (“Gillespie”), a business that is related

to Korrow. On the southerly side of Stony Brook Road is a parcel that Korrow recently improved

with a large (100 feet by 80 feet) barn to be used to park Gillespie trucks. Korrow brought dry

pack onto the property after the barn was constructed to level the parking area inside the barn.

Korrow also brought a small amount of earthen fill, about sixty cubic yards, to level off areas on

either side of the areas outside the barn. Korrow received a municipal zoning permit prior to

building the barn and bringing in the fill.

These improvements would not have resulted in the legal actions presented to this Court,

except for the fact that Korrow constructed the improvements without first obtaining an Act 250

permit. As a consequence, the Vermont Natural Resources Board (“NRB”) prosecuted an

Administrative Order against Korrow. See NRB v. Korrow Real Estate, LLC, No. 11-1-14 Vtec. The

parties stipulated to a resolution of that case by signing an Administrative Order of

Determination, which was approved by this Court. See NRB v. Korrow Real Estate, LLC, No. 11-1-

14 Vtec, slip op. at 1 (Vt. Super. Ct. Env. Div. Jan. 27, 2014) (Walsh, J.). The parties’ stipulation

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and the Court’s Order called for Korrow to pay fines totaling $5,784.60 and to seek and receive

an Act 250 permit for the completed barn and fill.

Korrow thereafter filed an Act 250 permit application for the completed improvements.

On February 12, 2016, the District 5 Environmental Commission (“District Commission”) issued

an Act 250 permit, albeit with several conditions. In particular, the District Commission directed

that the existing barn structure and associated fill that Korrow had brought onto the site be

removed to an area beyond the Fluvial Erosion Hazard Area (“FEH”) zone depicted by officials

from the Vermont Agency of Natural Resources (“ANR”). The Act 250 permit authorized Korrow

to reconstruct or replace the barn outside of the FEH zone. In response to this District

Commission decision, Korrow filed the above captioned appeal with this Court.

The parties engaged in extensive settlement discussions, but those efforts did not result

in a resolution of this appeal. By the time a trial was scheduled, only three of Korrow’s six

questions remained from its original Statement of Questions: Questions 4, 5, and 6. During trial,

Korrow advised that Question 4 had become moot and did not need to be adjudicated by the

Court. The Court therefore focused its analysis on the legal issues raised by Questions 5 and 6,

which asked whether “the Act 250 Floodway or the Fluvial Erosion Hazard Area zone is incorrectly

designated at the project site [Question 5; and w]hether the as-built project complies with [Act

250] Criteria 1(D)-Floodways; 1(F)-Shorelines; and 10-Local and Regional Plans [Question 6].”1

Appellants Statement of Questions, filed April 13, 2016, at Pp. 1–2.

While the legal issues had been considerably reduced by the time of trial, the detailed

testimony necessary to address those two legal issues required two days of trial, conducted on

March 9–10, 2017. At the close of the evidence, the Court took a recess to review its trial notes,

conduct some legal research, and deliberate. Thereafter, the Court determined that it could

render its Findings of Fact and Conclusions of Law on the record of the last day of trial. This

Merits Decision is intended to provide a summary of the Court’s Findings and a further

explanation of its Legal Conclusions.

1 Conformance with Act 250 Criterion 10 was only denied by the District Commission because of its

determination that the as-built project did not conform to Criteria 1(D) and (F). Thus, conformance with Criteria

1(D) and (F) presented the only remaining legal issues by the close of evidence at trial.

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Upon reconvening the hearing, the Court first thanked the parties and their legal counsel

for their preparation and professionalism. Korrow was represented by L. Brooke Dingledine, Esq;

ANR and the NRB were represented by Assistant Attorney General Melanie McNeill Kehne, Esq.,

with assistance from Elizabeth F. Lord, Esq. of ANR and Peter J. Gill, Esq. of the NRB.

At the close of trial, the Court noted that the undisputed facts showed that the initial

failure to obtain an Act 250 permit was more the consequence of neglect than a malicious act:

the Korrows relied upon the opinion of the Town of Northfield Zoning Administrator that an Act

250 permit was not required for this project. The neglect was two-fold: first, that of the Zoning

Administrator, who gave faulty advice, and second that of the Korrow officials, who relied upon

that faulty advice, particularly in light of the fact that the zoning permit issued by the

Administrator specifically directed that state permits may be required and provided contact

information for state officials who could make a state permit jurisdictional determination. The

Korrow officials chose to not contact the state officials for a jurisdictional determination at that

time.

Whether Korrow’s reliance on the Zoning Administrator was understandable or not, the

Court determined that such reliance and resulting construction without a permit was not

germane to the legal questions presented. The Court expressed before and after the taking of

evidence that the fact that the barn was built before Korrow’s Act 250 application was filed would

not impact the Court’s determinations of whether the project conformed with Criteria 1(D) and

(F). At trial, the Korrows asserted that the barn and associated fill were in conformance with Act

250 Criteria 1(D), 1(F) (and Criterion 10 insofar as it incorporates compliance with 1(D) and 1(F)).

Those were the sole issues that the Court addressed at trial and will address here.

Act 250 Criterion 1(D), which deals with “floodways,” requires an applicant to

demonstrate that:

(i) the development . . . of lands within a floodway will not restrict or divert the

flow of flood waters, and endanger the health, safety and welfare of the public or

of riparian owners during flooding; and

(ii) the development . . . of lands within a floodway fringe will not significantly

increase the peak discharge of the river or stream within or downstream from the

area of development and endanger the health, safety, or welfare of the public or

riparian owners during flooding.

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10 V.S.A. §§ 6086(a)(1)(D).

Criterion 1(F), which deals with “shorelines,” requires an applicant to demonstrate that:

the development . . . of shorelines must of necessity be located on a shoreline in

order to fulfill the purpose of the development . . . , and the development . . . will,

insofar as possible and reasonable in light of its purpose:

(i) retain the shoreline and the waters in their natural condition;

(ii) allow continued access to the waters and the recreational opportunities

provided by the waters;

(iii) retain or provide vegetation which will screen the development or subdivision

from the waters; and

(iv) stabilize the bank from erosion, as necessary, with vegetation cover.

10 V.S.A. §§ 6086(a)(1)(F).

The common factual determination made relevant by these two Criteria concerns the

limits of the “floodway” and resulting “shoreline.” The parties presented similar determinations

of the location of both the “flood plain” and the “floodway.” See Korrow Exhibit 6, depicting the

area surrounding the Korrow site that has been designated by ANR officials as the “Floodway.”

This ANR site map depicts the area of the new Korrow building as being outside the

floodway.2

Sacha Pealer, a floodplain manager in ANR’s rivers program, and Rob Townsend, a

licensed engineer who testified on behalf of Korrow, also testified at trial to a broader area that

depicts the FEH zone. See Exhibit 4, Appendix F, page 4. The term “FEH zone” is not referenced

in either the applicable provisions of 10 V.S.A. § 6086(a)(1) or the Act 250 Rules. Rather, ANR has

established a practice of including within its definition of the statutory terms “floodway” and

“floodway fringe,” referenced above in 10 V.S.A. §§ 6086(a)(1)(D)(i) and (ii), both the designated

floodway and the FEH zone. The FEH zone determined by ANR near the Korrow property is

depicted on ANR Exhibit B. Portions of the Korrow barn and fill are located within the FEH zone

depicted on ANR Exhibit B.

2 Exhibit 6 shows the Korrow buildings, outlined with blue lines. These building depictions were added to

the ANR Floodway map by Korrow’s engineer, and the engineer then used the overlaid floodway map as a supporting

document for the Korrow’s Act 250 Application, a copy of which was admitted at trial as Exhibit 4. See Appendix F

to Exhibit 4 for several site maps, some of which depict floodway details for this area.

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The FEH zone may be interchangeable with the term “river corridor,” which, like the term

FEH zone, is not specifically referenced in either the applicable statutes or Rules, but is referenced

in certain guidance documents ANR publishes and makes available to applicants and the general

public.3 This Court understands that ANR, as the state agency that specializes in the protection

of our public waters, including rivers and streams, has the authority to interpret applicable

statutory provisions. We further understand that such determinations are entitled to deference.

See In re N. E. Materials Grp. LLC Act 250 JO # 5-21, 2015 VT 79, ¶ 21, 199 Vt. 577 (directing that

courts should give “deference to [a state environmental agency’s] interpretation of legislation

within its area of expertise” (citing In re F–35A Case, 2015 VT 41, ¶ 16 n. 3, 198 Vt. 510); see also

In re Green Crow Corp., 2007 VT 137, ¶ 12, 183 Vt. 33 (explaining that this Court gives deference

to the former Environmental Board's interpretation of Act 250) (quotation omitted)).

The Green Crow Corp. opinion is particularly illustrative for the legal issue presented here.

Green Crow directs that the level of discretion shown to agency decisions within their areas of

expertise may differ:

We recognize, of course, that the line between jurisdictional and

nonjurisdictional questions may not always be clear. See, e.g., C. Sunstein, Law

and Administration After Chevron, 90 Colum. L.Rev. 2071, 2099 (1990) (noting the

"sometimes elusive distinction between jurisdictional and nonjurisdictional

questions"). The Board’s ruling [in Green Crow] was jurisdictional in the sense that

it delineated the Board’s power to regulate a certain type of activity, but

nonjurisdictional in that it did not expand the class of cases the Board could rule

on in the first instance. The level of deference we afford to agency determinations

that are arguably jurisdictional depends on the character of the decision; fact-

intensive determinations that rely on agency expertise will generally be given

more deference than purely legal determinations.

2007 VT 137, ¶ 13.

With these standards in mind, we conclude that the ANR determinations of what

constitutes the floodway or floodway fringe in the case at bar constitute “fact-intensive

determinations that rely on [the] expertise” of the ANR official who testified at trial, and are

therefore entitled to a greater degree of deference. But the question remains: how unwavering

3 See ANR Exhibit D, entitled “Technical Guidance for Determining Floodway Limits” and ANR Exhibit E,

entitled “River Corridor Protection Guide; Fluvial Geomorphic-Based Methodology (Nov. 2008).”

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must our deference be and can the deference shown be unassailable? For the resolution of this

legal issue, we look to the United States Supreme Court opinion in Chevron, which is widely

regarded as the seminal opinion on how to assess the deference that should be shown to

administrative agencies and their determinations. Chevron, U.S.A., Inc. v. Nat. Res. Def. Council,

Inc., 467 U.S. 837 (1984).

Chevron first notes that a reviewing court is obligated to follow clear and direct legislative

language on “the precise question at issue. If the intent of Congress is clear, that is the end of

the matter. . . .” Chevron, 467 U.S. at 842.

If, however, the applicable statutory language is less than precisely clear, Chevron directs

a two-step analysis.4 First, the reviewing court is directed to determine whether the legislature

provided an interpretation or definition for the statutory language at issue in the statute itself; if

so, then the reviewing court need not look to the agency interpretation. Chevron, 467 U.S. at

843–844. If, however, the legislature did not provide guidance on how a statutory provision is to

be interpreted, then the reviewing court is directed to review the interpretation offered by the

agency and decide whether it is “reasonable.” Id.

In the appeal before us, the operative statutory terms do have statutory definitions,

although we believe that those definitions leave some areas that require further interpretation.5

The enabling provisions in title 10, chapter 151 provides the NRB with the authority to “adopt

substantive rules . . . that interpret and carry out the provisions of” chapter 151. 10 V.S.A.

4 Other U. S. Supreme Court precedent appears to direct a preliminary analysis prior to the two-step process

outlined in Chevron, that being an initial determination of whether the agency asserting how a statute should be

interpreted followed proper administrative procedures in issuing its interpretation of the law. If not, the

interpretation by the agency should only be afforded the “respect proportional to its power to persuade.” United

States v. Mead Corp., 533 U.S. 218, 235 (2001), citing Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)).

5 “Floodway” is defined as “the channel of a watercourse which is expected to flood on an average of at

least once every 100 years and the adjacent land areas which are required to carry and discharge the flood of the

watercourse, as determined by the Secretary of Natural Resources with full consideration given to upstream

impoundments and flood control projects.” 10 V.S.A. § 6001(6).

“Floodway fringe,” which is a term also used in Criterion 1(D), (codified in 10 V.S.A. § 6086(a)(1)(D)), is

defined as “an area which is outside a floodway and is flooded with an average frequency of once or more in each

100 years as determined by the Secretary of Natural Resources with full consideration given to upstream

impoundments and flood control projects.” 10 V.S.A. § 6001(7).

“Shoreline” is defined as “the land adjacent to the waters of lakes, ponds, reservoirs, and rivers. Shorelines

shall include the land between the mean high water mark and the mean low water mark of such surface waters. 10

V.S.A. § 6001(17).

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§ 6025(b). The NRB is also authorized to seek the cooperation of “other departments and

agencies of State government” in fulfilling these administrative responsibilities. 10 V.S.A. § 6024.

Thus, we conclude that the circumstances before us fulfill the first step of the analysis suggested

in Chevron: while the legislature provided some insight into the meaning of the statutory

language, further interpretative assistance is required by the implementing agency.

With that determination in mind, we move to the next Chevron step: whether the

interpretations suggested here by ANR of how to interpret the statutory terms “floodway,”

“floodway fringe,” and “shoreline” are reasonable. For the reasons stated on the record of the

March 10, 2017 trial, as well as the summary below, we conclude that the interpretations

propounded by the state, relating solely to the specific floodway areas adjacent to the Korrow

property, are not reasonable.

First, we find it initially difficult to define a term—floodway—more broadly than the

statute directs and that ANR uses in its own floodway maps. But because of the remaining

uncertainty of all that may be included within the statutory definition of floodway, we look to

ANR, with its expertise concerning rivers and their flood areas, for a full appreciation of the term.

Ms. Pealer provided credible testimony and other evidence at trial for the need to

consider the meandering nature of rivers. The FEH zones are estimates by ANR officials, not so

much to address flooding which regularly occurs in our State, but to estimate the areas in which

a river may move. See ANR Exhibit E at Pp. 3–20 (discussing “Meander Centerlines,” “River

Corridors,” and “Meander Belt Widths based upon Stream Sensitivity”).

The Court understood and accepted the concepts espoused by Ms. Pealer in regards to

meandering rivers and the need to consider a reasonable width of an FEH zone, including when

the width of the zone is calculated based upon an assessment of a stream’s sensitivity to

meandering. Ms. Pealer credibly assessed the sensitivity of the nearby streams, the Dog River

and Stony Brook, particularly where Stony Brook flows into a delta with the Dog River south of

the Korrow property. See Korrow Exhibit 6.

However, ANR’s proposed limits of the FEH zone, particularly as it abuts and flows onto

the Korrow property, does not appear reasonable to the Court, particularly for the following

calculations and facts.

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First, ANR’s stream sensitivity assessment indicates that the applicable portion of the Dog

River and Stony Brook require a delineation of three channel widths along either side of the

meander centerline (i.e.: six channel widths total, prior to taking into consideration the restrictive

nature of Vermont Route 12A). The undisputed evidence at trial was that the applicable channel

width was 52 feet; a zone covering three times that width would reach no more than 156 feet

from the meander center line. ANR, however, depicts an FEH zone extending 248 feet from the

left bank of the Dog River towards the barn, which is nearly 100 feet wider than their own formula

would call for. See ANR Exhibit B. While a part of the Korrow barn is within 248 feet of the Dog

River, no part of the barn or fill is within 156 feet of the river.

Second, the undisputed testimony at trial, put into context for the Court by the site visit

that was conducted prior to trial, was that a significant upward slope exists as the land rises

beyond a relatively flat area beside the River and then up on the Korrow property. This upward

slope was not created by the Korrow’s placement of fill on either side of the barn. ANR’s

delineation of the FEH zone appeared to disregard this natural lay of the adjacent lands.

Lastly, witnesses at trial, none of whom the State contradicted, spoke to the historical

significance of the Korrow barn parcel. No resident who testified, including two who have lived

in the area for fifty or more years, could recall the Korrow parcel as having flooded in the multiple

floods that have ravaged this area, particularly Route 12A, including the most recent destruction

of this and other areas by Tropical Storm Irene in 2011. In fact, the historical significance of the

Korrow parcel has been that it is where residents have parked their vehicles and congregated to

witness flooding events, without the fear of being washed away.

For all these reasons, and under these specific circumstances, we decline to adopt the

delineation of the “floodway,” “floodway fringe,” and the “shoreline” propounded by ANR, as

those terms are used in 10 V.S.A. §§ 6086(a)(1)(D) and (F). Rather, we conclude that the credible

evidence at trial convinced us that the applicable floodway, floodway fringe and shoreline limits

are not impacted by the barn or the fill that was brought onto the property. Further, due to the

manner in which the barn was constructed and the fill was deposited, this development will not

“restrict or divert the flow of flood waters and endanger the health, safety or welfare of the

public or riparian owners during flooding,” and will (i) allow the shoreline to be retained, “(ii)

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allow continued access to the waters . . . (iii) retain or provide vegetation which will screen the

development . . .; and (iv) stabilize the bank from erosion, as necessary, with vegetation cover.”

Id.

We therefore conclude that the barn and fill, as currently developed, conform with Act

250 Criteria 1(D) and 1(F). Since non-conformance with those criteria was the only basis offered

by the District Commission in its determination of non-compliance with Act 250 Criterion 10, we

REVERSE and VACATE those determinations, and also conclude that the project as developed

conforms to Act 250 Criterion 10.

We hereby REMAND these proceedings to the District 5 Environmental Commission,

solely to complete the ministerial act of reissuing Act 250 Permit No. 5W1559 in conformance

with our determinations, including the removal of all conditions and references to the proposal

to remove the as-built barn and associated fill.

A Judgment Order accompanies this Merits Decision. This completes the current

proceedings before this Court concerning this application.

Electronically signed on March 23, 2017 at Newfane, Vermont, pursuant to V.R.E.F. 7(d).

________________________________

Thomas S. Durkin, Judge

Environmental Division

NOTICE: This opinion is subject to motions for reargument under V.R.A.P. 40 as well as formal

revision before publication in the Vermont Reports. Readers are requested to notify the Reporter

of Decisions by email at: JUD.Reporter@state.vt.us or by mail at: Vermont Supreme Court, 109

State Street, Montpelier, Vermont 05609-0801, of any errors in order that corrections may be

made before this opinion goes to press.

2016 VT 103

No. 2014-063

Plum Creek Maine Timberlands, LLC Supreme Court

On Appeal from

v. Superior Court, Essex Unit,

Civil Division

Vermont Department of Forests, Parks and Recreation

and Vermont Department of Taxes

December Term, 2014

Mary Miles Teachout, J.

David L. Grayck of Cheney Saudek & Grayck P.C., Montpelier, for Plaintiff-Appellee.

William H. Sorrell, Attorney General, and Bridget C. Asay and Kyle H. Landis-Marinello,

Assistant Attorneys General, Montpelier, for Defendant-Appellant.

Robert E. Woolmington of Witten, Woolmington, Campbell & Bernal, P.C., Manchester Center,

for Amicus Curiae Vermont Land Trust, Inc.

C. Daniel Hershenson of Hershenson Carter Scott & McGee, P.C., Norwich, for Amici Curiae

Vermont Forest Products Association and the Vermont Forestry Foundation.

PRESENT: Reiber, C.J., Dooley, Skoglund, Robinson and Eaton, JJ.

¶ 1. REIBER, C.J. This appeal concerns a timber harvest by landowner Plum Creek

Maine Timberlands, LLC in forestland enrolled in the current-use, tax-incentive program. The

Vermont Department of Forests, Parks and Recreation (FPR) issued an adverse inspection report,

concluding that Plum Creek violated its forest-management plan and failed to comply with

minimum acceptable standards during the harvest. Consequently, the Department of Taxes

removed the land from the current-use program and levied a tax assessment. Following Plum

Creek’s appeal, the superior court reversed those administrative decisions. FPR now appeals,

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arguing that the superior court failed to give appropriate deference to FPR’s determination of the

proper methodology for measuring compliance with the forest-management plan. We reverse

the court’s decision, and remand.

¶ 2. The property in question consists of approximately 56,600 acres in northeastern

Vermont. Formerly part of the Champion International Corporation holdings, the land was sold

in 1998 to the Essex Timber Company. Essex Timber enrolled it in the Use Value Appraisal

(UVA), or current-use, program. This tax-incentive program was designed to “encourage and

assist the maintenance of Vermont’s productive agricultural and forestland” by taxing property

enrolled in the program at its “current use” value rather than its fair market value. 32 V.S.A.

§§ 3751, 3756(a). To be eligible for the program, forestland must be “under active long-term

forest management . . . in accordance with minimum acceptable standards for forest

management.” Id. § 3752(9)(A). “Minimum acceptable standards for forest management” are

defined as standards set by FPR. Id. § 3752(13). Eligibility also generally requires compliance

with “the regulations adopted by the [Current Use Advisory] Board.” Id. § 3755(a). The UVA

Program Manual adopted by the Board1 sets forth minimum standards for forest-management

plans, minimum standards for forest management and regeneration, standard forms for use by

landowners enrolled in the program, and appendices containing additional guidance for foresters

and landowners.

¶ 3. To enroll in the UVA program, a landowner must file a “forest management plan”

and obtain the approval of FPR, which is tasked with periodically reviewing the plan and

inspecting each enrolled parcel. Id. § 3755(c). If upon inspection FPR “finds that the

management of the tract is contrary to the . . . forest management plan, or contrary to the

1 Comprised of the Commissioner of Taxes, the FPR Commissioner, the Director of the

Department of Taxes, Division of Property Valuation and Review (PVR), members of the private

agricultural and forestry sectors, and local government representatives, 32 V.S.A. § 3753(b), the

Board’s legislatively defined duties are to periodically review the criteria for enrollment in the

UVA program, recommend changes and improvements, and adopt rules to carry out its statutory

goals. Id. § 3754(a), (c).

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minimum acceptable standards for . . . forest management,” it is required to file an “adverse

inspection report” with the landowner and the PVR Director. Id. When a report is filed, the

PVR Director, in turn, is required to “remove from use value appraisal an entire parcel of

managed forestland and notify the owner.” Id. § 3756(i). This appeal involves FPR’s issuance

of such an adverse-inspection report to Plum Creek.

I. Facts

¶ 4. Essex Timber prepared a forest-management plan, which FPR approved in 2007.

See 32 V.S.A. § 3755(b), (b)(1) (providing that “[m]anaged forestland” must be “subject to a

forest management plan” to be eligible for enrollment in UVA program). The following year,

Essex Timber sold its holdings to Plum Creek, which formally adopted the existing management

plan.

¶ 5. Under a strategy developed by FPR to accommodate large landowners, Plum

Creek’s forest-management plan provided more conceptual, and less stand-specific, information

than is generally required by FPR for participation in the UVA program. When an actual timber

harvest is planned, however, the landowner must submit a “harvest prescription amendment” to

the management plan containing more detailed information, and obtain the approval of the

county forester for this amendment.

¶ 6. In 2009, Plum Creek sought to harvest timber for six stands in its managed

forestland and worked with the county forester for Caledonia and Essex Counties to adopt a

prescription amendment to its management plan. The plan set both numerical and qualitative

goals for each stand to be harvested. Those goals were memorialized in a prescription

amendment. For the three stands at issue in this appeal, the prescription provided the following.

Stand 34 was to receive a two-staged shelterwood2 and the target residual basal area (RBA)—the

amount of tree stock left after cutting—was set at 30-40 ft2. Stand 43 also was to receive a two-

2 A shelterwood cut reduces the basal area to create the particular microclimate

conditions necessary to regenerate certain species within the stand.

4

staged shelterwood cut and some overstory removal and the target RBA was 60 ft2. Stand 44

was to receive intermediate thinning with a target RBA of 60 ft2.

¶ 7. In late January 2010, after cutting had begun, the county forester visited the site

with several other individuals including Plum Creek’s forester, an FPR forester, and a forester

from the Vermont Land Trust to review the harvest’s progress. The county forester expressed

concern about the level of cutting in Stand 34. Trees, which had been marked for retention, had

been cut, and this sight “raised alarm with everyone as it suggested excessive cutting in disregard

of the prescription.” Based on the observations of cutting, all, including Plum Creek’s forester,

were concerned about the level of cutting and whether the proper outcome could be met if

logging continued. The county forester also observed several violations of the Acceptable

Management Practices (AMPs), which are designed to protect water quality during logging

operations. The AMPs violations included the siting of equipment too close to water, improper

stream crossings, and mud and sediment where equipment had crossed a stream. In response,

Plum Creek’s forester went to the home of the contracted logger and stopped all cutting in Stand

34. Subsequently, Plum Creek worked to correct the AMPs violations by removing the crossings

and remediating the sites deemed to be contrary to the AMPs.

¶ 8. In early February 2010, Plum Creek suspended the entire harvest pending further

investigation. Later that month, the county forester visited the site again with two other state

officials: FPR’s forester in charge of AMPs compliance and the Agency of Natural Resources

(ANR) officer for AMPs enforcement. In a letter to Plum Creek written shortly thereafter, the

FPR forester identified several additional AMPs violations involving erosion controls, logging

debris, stream crossings, seeding and mulching, and protective strips along streams. The letter

detailed the necessary remediation measures and closed with the observation that FPR’s

intentions were to ensure remediation in a timely manner and to educate Plum Creek’s logging

operators so that they could “implement proper practices in the future.”

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¶ 9. In the course of additional site visits in March and April 2010, the county forester

measured the RBA in the harvested portions of the stands. The county forester issued an

adverse-inspection report identifying violations in Stands 34, 43, and 44 consisting of “cutting

contrary to the approved forest management plan,” as well as practices contrary to the AMPs.

His cut contrary finding was based on the following measurements. The county forester

calculated that the RBA for 91 harvested acres of the 137 acres in Stand 34 as 19.7 ft2, well

below the prescription level of 30 to 40 ft2. He determined that the RBA for 40 harvested acres

in Stand 43 was 23.3 ft2, below the prescription target RBA of 60 ft2, and that the regeneration

goal was not met with only 15% of the plots stocked. In Stand 43, the county forester also found

that the harvest had failed to meet the prescription’s tree-regeneration goal, which called for a

“Two Staged Shelterwood . . . and Overstory Removal (OSR)” with the goal of “releas[ing]

quality growing stock and provid[ing] gaps to promote regeneration.” The county forester

determined that the RBA for the 8 harvested acres in Stand 44 (out of a total of 37) was 16.3 ft2,

again below the prescription’s target level of 60 ft2.

¶ 10. Related to the AMPs violations, FPR’s forester for AMPs compliance sent a letter

to Plum Creek confirming that he had inspected the sites of the previously identified AMPs

violations and had “observed that all of the major remedial actions relating to the AMPs

violations have been accomplished” and that Plum Creek was now in compliance with the

AMPs.

¶ 11. In May 2010, FPR informed Plum Creek that it had forwarded the county

forester’s report to PVR, see 3 V.S.A. § 2289(a), with the recommendation “that the property be

removed from UVA for harvesting contrary to the management plan.” In July 2010, PVR

notified Plum Creek that, based on the adverse-inspection report, its “entire parcel” had been

removed from the UVA program. Plum Creek appealed that decision to the PVR Director

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pursuant to 32 V.S.A. § 3758(a),3 contesting removal of the entire 56,604-acre tract from the

program rather than the 470 acres that comprised the harvest area. Plum Creek also appealed the

adverse-inspection report to the Commissioner of FPR pursuant to 32 V.S.A. § 3758(d).

¶ 12. The FPR Commissioner provided an informal hearing at which no evidence was

taken and of which there is no transcript or audio recording.4 Plum Creek provided “remarks” by

its lawyer and two employees and also sent a written argument. Apparently, the county forester

also was present, although it is not clear that he provided any information in the presence of the

Plum Creek representatives.

¶ 13. The FPR Commissioner upheld the adverse-inspection report, concluding that the

cutting was contrary to the forest-management plan. The Commissioner examined the evidence

supplied by the county forester and concluded that both the evidence and the methodology were

sound. The Commissioner found that the data was collected appropriately and compliance was

measured according to the correct methodology. Plum Creek argued that there were no grounds

for the violation because harvesting was suspended before the entire stand was cut. Plum Creek

proffered that if cutting had continued, then the final RBA for the entire stand could have been in

compliance. In the alternative, Plum Creek asserted that if RBA was measured by averaging the

treated and untreated areas of the stands, it would meet the plan goals.

¶ 14. The Commissioner rejected these arguments. The Commissioner explained that it

was not necessary to wait for the entire stand to be cut before bringing a violation and that if only

3 As the statute existed in 2010 when the appeal was taken, the aggrieved party appealed

from the PVR Director, who formally removed the property from the UVA program, to the same

Director. See 2007, No. 190 (Adj. Sess.), § 4. The statute now states that the appeal goes from

the PVR Director to the Commissioner of Taxes.

4 The statute provides no specificity on how the appeal is to be conducted. While the

Vermont Administrative Procedure Act (APA) specifies procedures for many types of

administrative proceedings, its regulation is generally applicable only to contested cases, see 3

V.S.A. §§ 809-813, which are defined as proceedings in which “legal rights, duties, or privileges

of a party are required by law to be determined by an agency after an opportunity for a hearing,”

id. § 801(a)(2). There is no requirement that the appeal to the Commissioner provided in

§ 3758(d) be determined after an opportunity for a hearing. Thus, the APA does not apply to the

appeal to the Commissioner, and this was an informal adjudication.

7

a portion of the stand was cut, then compliance should be measured by focusing on the harvested

area. The Commissioner acknowledged that the stand is the typical unit for measuring RBA, but

explained that focusing on the cut area of the stand was in keeping with forestry practices. After

a portion of the stand was cut, this effectively created a new stand because the treated and

untreated portions had different distribution, composition, and structure, and therefore the

Commissioner concluded that it was appropriate to evaluate them separately. The Commissioner

clarified that compliance with the prescription amendment was assessed by looking at the

qualitative attributes of the parcel and not just by measuring stocking levels. Therefore, it would

make no sense to include the uncut portions of the stand in measuring compliance because the

goals of the prescription could not be met in the untreated portion of the stand. For example, in

Stand 34, a shelterwood cut was prescribed. This was obviously not achieved in the uncut area

where no harvesting occurred. Further, the Commissioner found that the goal was not achieved

in the cut area where the RBA of 19.7 was essentially a commercial clear cut. The

Commissioner rejected Plum Creek’s assertion that these two could be averaged to achieve a

numerical RBA that would be within the prescription goal. The Commissioner also upheld the

AMPs violations, noting that they were observed in the field by all parties.

¶ 15. The FPR decision was reported to the Department of Taxes. In March 2011, the

PVR Director issued a decision on Plum Creek’s appeal, upholding the decision to remove Plum

Creek’s entire parcel of 56,604 acres from the UVA program, and levying an assessment of a

land-use change tax in the amount of $7,860.80.

¶ 16. Pursuant to 32 V.S.A. § 3758(a) and (d), Plum Creek appealed both

administrative rulings to the superior court, which consolidated them for review.5 Following

pretrial briefing, the court held an evidentiary hearing over the course of several days in May and

June 2013.

5 Because the Plum Creek tract lies in both Essex and Orleans counties, there were

actually four administrative rulings, two from each county. All of these rulings were

consolidated on appeal.

8

¶ 17. Plum Creek presented testimony from a forestry expert, Mr. Holleran, who

testified that the cutting was in compliance with the prescription amendment. Mr. Holleran is a

forester, who had assisted landowners in managing land that is in the UVA program, but who

had no prior involvement in the management of Plum Creek’s land and acknowledged at trial

that he had never prepared a forest-management plan for a large landowner similar to the type of

plan used by Plum Creek. Mr. Holleran presented evidence to advance the same argument Plum

Creek made before the Commissioner—that RBA targets were achieved if the RBA was

measured across both the treated and untreated portions of each stand. He testified that this was

the appropriate calculation because the stand was the accepted unit of measure for RBA

compliance. He submitted four written analyses of the harvest based upon several site visits in

the fall of 2011 and 2012, and also testified at length in support of his conclusion that the harvest

was in compliance with the amended management plan and forest-management standards.

¶ 18. The county forester also testified and described his sampling method. He

explained that the cut areas were not in compliance with the forest-management plan either

quantitatively—because the measurements of RBA were well below the targets set, or

qualitatively—because the observation of the regrowth and condition of the stand did not meet

the expectations in the prescription.

¶ 19. The court issued a written decision in January 2014. As to the compliance with

the forest-management plan, the trial court framed the issue as an evidentiary question. The

court explained that measuring RBA was not within the exclusive expertise of FPR because it is

something that foresters do all the time; therefore, the court determined it was free to decide the

relative credibility of each expert’s method for how to measure RBA when only part of the stand

had been harvested. The court stated that the county forester’s methodology “was not incorrect”

and was consistent with “manual standards.” Nonetheless, the court found that Plum Creek’s

expert provided superior evidence, which was more credible than the state forester’s. The court

thus adopted Plum Creek’s expert’s view that RBA should be measured across the entire stand

9

and found, based on that the expert’s calculations of RBA in those areas, that the harvest was in

compliance with the forest-management plan. Consequently, the court concluded that the

adverse-inspection report was not justified on this basis.

¶ 20. The court further found that, although several AMPs violations were identified

immediately after the harvest, they were promptly remediated to the satisfaction of the FPR

forester responsible for AMPs compliance, and that there was no evidence of any residual

harmful effect on water quality. The court noted, “There is no evidence that there was anything

more than a few temporary violations of the sort not uncommon in logging operations.” The

court concluded that the adverse-inspection report was not warranted based on these AMPs

violations.

¶ 21. Because the decision by PVR to remove the tract from the UVA program was

predicated on the adverse-inspection report, the court concluded that the Tax Department’s

ruling must be reversed as well. This appeal by the State followed.

II. Standard of Review

¶ 22. The State first contends the superior court erred by failing to accord sufficient

deference to the methodology adopted by FPR to determine compliance with the forest-

management plan. As a threshold matter, therefore, we consider whether the court applied the

correct standard of review. The question of the appropriate standard of review is a legal one that

we consider de novo. In re Soon Kwon, 2011 VT 26, ¶ 5, 189 Vt. 598, 19 A.3d 139 (mem.).

¶ 23. The UVA statute provides that an appeal from FPR’s decision to the superior

court is to be in “the same manner and under the same procedures” as a property tax appeal. 32

V.S.A. § 3758(d). Those appeals are filed pursuant to Rule of Civil Procedure 74,6 and are de

novo. 32 V.S.A. §§ 4461(a), 4467.7

6 Rule 74 also specifically provides that the rules of civil procedure “shall govern

proceedings” in the superior court. V.R.C.P. 74(g). In a departure from Rule 74(e), however,

which authorizes trial by jury on “[a]ny question as to which there is a right to trial by jury,” the

10

¶ 24. This Court established the proper standard of review for appeals to the superior

court from an FPR current-use decision in Jones v. Department of Forest, Parks & Recreation,

2004 VT 49, 177 Vt. 81, 857 A.2d 271. In that case, we explained that factual findings are

reviewed for “clear error,” but “substantial deference” is given to FPR’s determinations within

its “area of expertise.” Id. ¶ 7. Thus, FPR’s decision as to a violation should be upheld unless

“the Department’s finding of a violation . . . was standardless, unsupported by the evidence, or

contrary to law.” Id. ¶ 14.

¶ 25. The basic framework for the standard of review is not altered simply because in

this case there was a de novo evidentiary hearing in the superior court. Because the superior

court has conducted a de novo hearing, as factfinder, the court’s factual findings are reviewed for

clear error. As to questions of policy, however, agency determinations regarding the proper

interpretation of policy or methodology within the agency’s expertise are entitled to deference,

even where there is a de novo hearing in the superior court. ANR Permits, 2014 VT 50, ¶ 15-16.

“[D]ecisions made within the expertise of such agencies are presumed correct, valid and

reasonable.” Id. ¶ 15 (quotation omitted).

statute provides that tax appeals to the superior court “shall be heard without a jury.” 32 V.S.A.

§ 4461(a).

7 The dissent claims that the standard of review is misidentified, but the dissent largely

agrees with the standard articulated here. Review is de novo in the trial court. We emphasize, as

we have done in the past in the context of property tax appeals, that although the appeal is de

novo this does not mean that the trial court “ultimately owes no deference to the decision of the

administrative agency.” Mollica v. Div. of Prop. Valuation & Review, 2008 VT 60, ¶ 8, 184 Vt.

83, 955 A.2d 1171; see In re ANR Permits in Lowell Mountain Wind Project, 2014 VT 50, ¶¶ 9-

17, 196 Vt. 467, 98 A.3d 16 (explaining that even though review was de novo to public service

board, board was still required to defer to agency’s interpretation of matters within its area of

expertise). Even in the context of de novo review, a court must still defer to an administrative

agency’s interpretation of a matter within its “legislatively delegated expertise.” Mollica, 2008

VT 60, ¶ 9.

The true point of divergence between this decision and the dissent is whether the critical

question on appeal is an area within the agency’s expertise to which the trial court must defer or

a factual determination for the trial court to decide. Because the key inquiry depends on the

“proper methodology for implementing a statute” within the purview of FPR, the agency’s

interpretation is accorded deference. See Town of Killington, 2003 VT 88, ¶ 5, 176 Vt. 70, 838

A.2d 91.

11

¶ 26. The critical inquiry is in determining whether an issue involves a question of fact,

subject to the superior court’s discretion as factfinder, or whether it is a matter of policy or

methodology within the agency’s area of expertise. Four major issues with respect to timber

harvesting were contested before the superior court: (1) whether compliance should be measured

across the stand as a whole or over only the cut-specific areas; (2) the numerical RBA

measurements in the sub-stand areas; (3) whether tree-regeneration measurements should be

taken three years after the harvest or immediately after the harvest; and (4) whether a box on a

map of Stand 43, labeled “OSR” for overstory removal, meant that OSR could occur only in the

box area.

¶ 27. We need not go beyond the first issue to resolve this appeal because although the

experts’ calculations of RBA in the harvested portions of the stands differed, both measured the

RBA in those areas below the target levels. The measurements of the two experts are

summarized in the following chart:

Stand

Number

Area

of

Stand

(acres)

Area Cut

Contrary

(acres)

Basal

Area

Prior to

Logging

(ft2)

Target

RBA

(ft2)

State Forester

Calculation of

RBA in Cut

Area

(ft2)

Plum

Creek

Calculation

of RBA in

Cut Area

(ft2)

Plum Creek

Calculation

of RBA

across entire

stand

(ft2)

34 137 90.91 82 30-40 19.7 28.5 47.4

43 115 40.15 88 60 23.3 53.1 73.5

44 37 8.47 97 60 16.3 36 107

Thus, the main difference in their opinions of whether a violation occurred was the proper

methodology for calculating RBA. Plum Creek’s expert testified that the stand was the unit of

measurement and therefore RBA should be measured across the entire stand, regardless of

whether the entire stand had been harvested. In keeping with the methodology adopted by the

FPR Commissioner, the county forester measured RBA by looking solely at the harvested area of

each stand.

12

¶ 28. The superior court viewed the question of how RBA should be measured for

purposes of determining compliance with the forest-management plan as a question of fact, not

an area of agency expertise entitled to deference, and compared the relative credibility of the

experts to determine how to measure compliance. As explained more fully below, this was error.

FPR’s decision on the methodology for determining compliance was entitled to deference, and

Plum Creek had the burden to show it was “ ‘wholly irrational and unreasonable in relation to its

intended purpose.’ ” ANR Permits, 2014 VT 50, ¶ 17 (quoting Town of Killington, 2003 VT 88,

¶ 6).

¶ 29. Like other cases where this Court has applied a deferential standard of review to

an agency decision, in this case, deference is due because the methodology for determining

compliance is an area over which FPR has broad statutory authority and the relevant expertise.

See id. ¶ 16 (explaining that agency is entitled to deference where decision is within agency’s

area of expertise and within statutory authorization); In re Williston Inn Grp., 2008 VT 47, ¶ 13,

183 Vt. 621, 949 A.2d 1073 (mem.) (explaining that where Legislature entrusts implementation

of statute to agency, this Court gives deference to agency’s interpretation of those laws). The

statutory scheme underpinning the current-use program contains the standards to be applied to all

UVA-enrolled land and highlights the importance of oversight by FPR. FPR is entrusted with

the authority both to set standards for acceptable forest management and to enforce compliance

with those standards. See 32 V.S.A. § 3752(9)(B)(iii) (defining “managed forestland” as

property that is managed in accordance with standards established by FPR); id. § 3755(c)

(entrusting FPR with power to determine if “management of the tract is contrary to the

conservation or forest management plan” and to issue inspection report if it so finds).

Consequently, FPR is entitled to deference in determining how to measure compliance. This is

exactly what this Court recognized in Jones, 2004 VT 49, ¶ 14 (giving deference to FPR on

decision regarding violation of forest-management plan).

13

¶ 30. The superior court in essence determined that Plum Creek’s methodology was

better than FPR’s. This is not the role of the court. “We have cautioned that courts are not ‘a

higher environmental agency entrusted with the power to make environmental law and policy,’

but rather exercise a ‘narrow role in ensuring that the decisions of ANR are made in accordance

with law.’ ” Id. ¶ 14. Where there are questions about “complicated methodologies within an

agency’s expertise” a reviewing court, even in the context of a de novo hearing, must give

deference to the agency’s decision. ANR Permits, 2014 VT 50, ¶ 16.

¶ 31. In assessing the validity of FPR’s violation, the trial court and this Court on

appeal must give deference to FPR’s methodology. This does not mean that FPR’s decisions

will be rubber-stamped, but deference is accorded. “Absent a clear and convincing showing to

the contrary, decisions made within the expertise of such agencies are presumed correct, valid

and reasonable.” In re Johnston, 145 Vt. 318, 322, 488 A.2d 750, 752 (1985). Review is limited

to whether there was a “reasonable basis” for the agency action. Id.; see In re DeCato Bros.,

Inc., 149 Vt. 493, 496, 546 A.2d 1354, 1356 (1988) (explaining that agency decision must meet

minimum standard of reasonableness).

III. Measurement of Compliance

¶ 32. In light of this standard of review, we turn to the question of whether the

Commissioner’s decision on methodology had a reasonable basis sufficient to satisfy review.

¶ 33. The Commissioner provided the following reasons for adopting a policy of

determining compliance by limiting the calculation of RBA to the area that had been harvested.8

8 The dissent repeatedly comes back to the fact that cutting was halted partway through

and laments that there would be no conflict about how to measure RBA “if the timber harvesting

was completed in the three stands.” Post, ¶ 125. Obviously, if cutting had been completed, then

the issue of whether to measure RBA in the entire stand or just in the cut portion would not exist.

The fact is that cutting did cease. The dissent sees this as an injustice to Plum Creek, and places

blame on the State for declaring a violation before the harvest was completed. The dissent

accuses the majority of appellate factfinding on the issue. There is no need to engage in

appellate factfinding. To the extent that it is relevant, the court made sufficient findings on the

issue. The trial court found, based on the evidence presented, that it was Plum Creek’s forester

that initially told the logger to cease cutting based on the forester’s own concern about the level

14

The Commissioner acknowledged that the typical unit for forest management is the stand, but

concluded that where areas of the stand receive different treatment a new stand may be created.

The Commissioner explained:

Although the unit of measure for forest management purposes and

UVA is the “stand,” management can alter the unit enough to

create different stands. As a “stand” is a contiguous group of trees

sufficiently uniform in age-class distribution, composition and

structure, and growing on a site of sufficiently uniform quality, to

be a distinguishable unit, the harvesting in stand 34 has created two

separate stands as that area harvested has a very different age-class

distribution, composition and structure now compared to that area

left untreated. They are no longer the same stand; therefore, they

should be sampled and evaluated separately.

In other words, because part of the stand had been cut while the remaining acres were left

untouched after cutting was halted, the Commissioner determined that the cut areas should no

longer be considered part of the existing larger stand and should be evaluated separately from the

uncut areas.

¶ 34. Moreover, the Commissioner explained that averaging the basal area of the

logged and unlogged portions did not portray an accurate picture of whether the goals and

objectives of the prescription were met. This assessment is well illustrated by Stand 34, for

which the prescription called for a shelterwood cut to target sugar maple and yellow birch with

large crowns for retention, and set a target RBA of thirty to forty. The Commissioner explained

that the purpose of the cut was to create the correct light levels and soil moisture on the ground

to promote seed germination and seedling establishment. The Commissioner explained just

looking at an average of the stocking level across the untreated and treated portions of the stand

produced an inaccurate picture of whether this goal was met. As the Commissioner stated, “The

notion that the goals and objectives of the shelterwood treatment were met by considering shade

of cutting he observed during the site visit in late January. Whether Plum Creek then continued

to suspend cutting voluntarily or felt compelled by concerns expressed by ANR and FPR is not

relevant. Plum Creek did not claim compliance based on future cutting; rather, it based

compliance with the prescription on the fact that the RBA, if averaged between the cut and uncut

portions of the stand, was within the goals set.

15

from trees over a kilometer away (in the uncut portion of the stand) as providing the necessary

microenvironmental condition is a misapplication and a complete misunderstanding of the

principle of the silvicultural practice.”9

¶ 35. We conclude that the Commissioner’s decision to determine violations by

measuring compliance, both quantitatively and qualitatively, solely in the cut area of the stand

was reasonable, and not “standardless, unsupported by the evidence, or contrary to law.” Jones,

2004 VT 49, ¶ 14.

¶ 36. First, it is a method that promotes the overall policy of the UVA program, which

is to maintain productive forestland and to prevent accelerated use. 32 V.S.A. § 3751. If RBA

for purposes of compliance could be measured by averaging harvested and unharvested portions

of a stand, then cutting, which offends the protection and proper use purposes, could not be

prevented because it could still technically comply with numerical prescribed RBA targets. For

example, if a prescription provides for a shelterwood cut and sets a moderate RBA target, then

the target RBA could be met by clear cutting half of the stand and leaving the other half fully

forested and untreated. While numerically this would meet the prescribed RBA under Plum

Creek’s methodology, it certainly would not protect forestland or prevent accelerated use. Id. It

also would not achieve the qualitative goals of the shelterwood prescription necessary for the

desired tree growth.

9 The dissent dismisses this concern and asserts that Plum Creek never intended to

harvest only part of the stand and its position “has always been that the harvest could not be

judged in midstream and should have continued to its end.” Post, ¶ 126. It has not “always”

been Plum Creek’s position that the harvest should continue; Plum Creek voluntarily chose to

stop the harvest based on an assessment by its own forester that the logger was not following its

directions. Further, Plum Creek did not base its alleged compliance with the prescription goals

on a continued cutting plan but alleged it complied with the prescription goals if the RBA was

calculated by averaging the cut and uncut portions of the stand. Plum Creek’s own expert in the

superior court testified that if the entire stand had been cut in the same manner as the already

harvested portion, it would have been out of compliance.

16

¶ 37. Second, restricting measurement to areas already harvested is logical. RBA is a

measure of the residual basal area in a stand, which by definition refers to the basal area left after

harvest. It is simply not logical to purport to measure RBA in an untreated, unharvested area.

¶ 38. Third, measuring compliance in the cut areas allows for more effective oversight

by FPR. If a violation cannot be based solely on observations and measurements taken in the

portion of the stand already harvested, then FPR will have to wait for an entire stand to be cut

contrary before bringing a violation. For large stands, this could have drastic consequences.

Plum Creek’s expert recognized in this case that if the harvest in Stand 34 had continued in the

rest of the stand in the same manner, the entire stand would have been out of compliance.

Surely, FPR was not required to wait for those additional forty acres to be clear cut before

bringing a violation.10

¶ 39. Fourth, it is a method consistently used. As the Commissioner noted, this is how

other violations have been calculated. Indeed, it is wholly in keeping with our decision in Jones,

in which this Court determined that FPR acted within its discretion in limiting its analysis of

whether a violation occurred to the portion of the stand that was cut. 2004 VT 49, ¶ 13.

¶ 40. There is no merit to the trial court’s concern that because basal area is generally

measured across a stand, a landowner would not be on notice that a violation could be brought

for overcutting in one area of the stand. The landowner is on notice that the harvest prescription

must be met—both qualitatively and quantitatively—across the entire stand. Further, as

demonstrated by Jones and the record in this case, FPR has previously determined compliance by

measuring RBA solely in cut portions of the stand.

¶ 41. Plum Creek failed to demonstrate that the Commissioner’s methodology was

“wholly irrational and unreasonable in relation to [the UVA statute’s] intended purpose.” ANR

Permits, 2014 VT 50, ¶ 17 (quotation omitted). Plum Creek’s expert’s explanation for why he

10 Especially in a situation like this where Plum Creek voluntarily ceased cutting, FPR

should not have to wait indefinitely to see if and when the landowner will continue cutting before

bringing a violation.

17

took the measurement across the entire stand was simply that “the stand is the unit of measure

for forest management.” He did not provide an explanation of why this was appropriate for a

stand that had been only partially treated. He did not provide a clear answer as to whether a

landowner could be in compliance with a forest-management plan by clearcutting half of a stand

and leaving half of the stand untouched to reach a particular numerical RBA average. In fact, he

failed to explain how he could be assured that once cutting was resumed in the areas not yet cut

that the stand would still be in compliance with the prescription.

¶ 42. For example, he testified that if the remaining uncut portion of Stand 34 was

harvested to a density of 60, then even taking the county forester’s measurement of 19.7 for the

cut portion, the entire stand would still be within the prescription of 30 to 40 RBA. There was

no assurance, however, that such density would be achieved in the remaining portion and there

was no evidence that cutting the remaining portion of Stand 34 to a density of 60 would achieve

the goals of the prescription by creating the necessary microclimate conditions on the ground. In

response to the question of whether two stands had been created by the cutting, Plum Creek’s

expert answered “that’s a complicated question.” He acknowledged that that could happen, but

felt that for evaluating the prescription, the measurement should be made for the entire stand.

While this may be true if the entire stand had received the same treatment, FPR provided

reasonable and logical reasons why RBA should be calculated based solely on the part of the

stand that had already been cut.

¶ 43. Further, that FPR’s methodology in limiting its assessment to the cut area was a

logical and reasonable measurement of whether the prescription plan had been followed was

acknowledged by Plum Creek’s expert to some degree. In response to the question of whether

the goal of treatment for Stand 44 was met qualitatively, he answered that the prescription was

met only in the harvested area. This is logical because obviously the conditions in the uncut

areas were unchanged and therefore could not have met the goals of the cut. It also creates,

however, an inconsistency in the evaluation method used by Plum Creek’s expert. If the

18

qualitative assessment of whether the forest-management plan was met must be limited to the

area cut, then how can the quantitative assessment include the entire stand? FPR’s decision to

limit both its qualitative and quantitative assessments to the cut areas was both consistent and

reasonable.

¶ 44. Given that both experts calculated the RBA in the cut areas of Stands 34, 43, and

44 below the targets set in the forest-management plan, we conclude that this failure to meet the

targets was an adequate basis for issuing the adverse-inspection report, and therefore that the trial

court erred in reversing it.

IV. AMPs Violations

¶ 45. In addition to a finding that the stands were cut contrary to the forest-management

plan, the adverse-inspection report was also based on findings that Plum Creek failed to

implement AMPs. The Commissioner upheld the adverse-inspection report in both respects.

The trial court concluded that there was no violation of the forest-management plan and that the

AMPs violations were insufficient on their own to justify an adverse-inspection report. The

court found that—although “there were [AMPs] violations”—there was “no evidence that [they

were] anything more than a few temporary violations of the sort not uncommon in logging

operations”; that there was “no evidence” of any residual “detrimental impact on water quality of

the type the AMPs are designed to prevent, despite the violations”; and that there was also no

evidence of residual “harm to . . . wildlife or soil erosion.” The court noted, in this regard, that

the FPR forester overseeing AMPs compliance determined that Plum Creek had remediated the

violations within a few months of their discovery, and that the ANR official in charge of AMPs

enforcement undertook no enforcement action.

¶ 46. On appeal, the State argues that the superior court’s finding that Plum Creek

violated several of the AMPs protecting water quality compelled affirmance of the

Commissioner’s decision upholding the adverse-inspection report. Having concluded that the

adverse-inspection report was warranted based on Plum Creek’s violations of the forest-

19

management plan, we need not and do not reach the question of whether the AMPs violations

would have provided a sufficient independent basis to issue an adverse-inspection report.

V. Conclusion

¶ 47. In sum, we reverse the superior court and reinstate the adverse-inspection report

as upheld by the FPR Commissioner. We remand to the superior court to consider the questions

raised in Plum Creek’s appeal of the PVR Director’s decision removing land from the UVA

program and leveling a tax assessment against Plum Creek.

Reversed and remanded.

Chief Justice

¶ 48. DOOLEY, J., dissenting. On January 15, 2010, the Vermont Department of

Forest, Parks and Recreation (FPR) approved logging on land owned by Plum Creek pursuant to

a plan drafted and submitted by Plum Creek. Logging apparently proceeded quickly because on

January 26, 2010, the staff forester of Plum Creek, the FPR county forester, along with others,

visited a harvest of trees on part of Plum Creek’s forestland. The date of the visit was apparently

arranged so that all could attend and the logging would be in progress; there was no significance

to how much of the harvest had been completed, how much was left to complete or where in the

forest the contract loggers were working. The site visit was to three “stands,” defined and

mapped out areas of the forest. A majority of the harvest had already occurred on two stands,

while only 20% of the area in the third stand had been logged, although this stand was much

smaller than the other two. During the site visit the FPR county forester indicated that he

believed that the areas he saw were being “cut contrary,” that is, contrary to the plan Plum Creek

submitted and FPR approved.

¶ 49. At that point, all logging work stopped. The forestland in the three stands became

the equivalent of a “crime scene.” Over time, the county forester went back and took

20

measurements of what had been cut in relation to the specifications in the plan. On April 26, he

issued an adverse-inspection report recommending that Plum Creek be terminated from the

current-use program. The FPR Commissioner accepted the recommendation, and this

controversy unfolded. Plum Creek hired a professional forester to independently evaluate the

state of the forest and the allegations of the county forester. Part of the evaluation was to

measure regeneration three years after the harvest was terminated. The case proceeded to trial in

the superior court, and the court took a view of the stands in the condition they were when

logging stopped. Plum Creek took many pictures of the forest at that time, many of which were

introduced into evidence. As far as the record before us discloses, the land and forest in

controversy is in exactly the same state today as when the site visit occurred over six years ago.

¶ 50. I start with this short story to make three points to which I will return. First, the

amount of the land that had been logged has no significance, other than that it was frozen at the

time of the site visit. The timeline shows, however, that the entire harvest would have been over

in a matter of days if it had been allowed to run its course. Second, no one has claimed that

Plum Creek did anything illegal, whoever one might believe in this controversy, so my

comparison to a “crime scene” is a purely hypothetical one.11 The sole issue is whether Plum

Creek complied with its plan and whether, as a result, it can receive the substantial monetary

benefit of the enrollment of 56,604 acres of forestland in the current-use program.12 Third, Plum

Creek’s decision to stop the harvest was required by the county forester’s declaration that Plum

11 The State alleged that Plum Creek had violated the Acceptable Management Practices

(AMPs) for Maintaining Water Quality on Logging Jobs by a number of actions. The alleged

violations were corrected shortly after they were identified. The AMPs violations were one of

the grounds for the termination of Plum Creek from the current-use program and could have

been grounds for the State to seek civil penalties in an enforcement action. It did not do so and,

in fact, certified that Plum Creek was in compliance with the AMPs. Neither the majority nor

this dissent has considered the AMPs compliance issue, except as stated in infra, ¶¶ 126-132, to

explain why Plum Creek was prevented by FPR from finishing the harvest.

12 Although the alleged improper conduct affected only a few hundred acres of land, all

contiguous land owned by Plum Creek was removed from the current-use program. Although

the exact financial impact of the decision is not of record, it is alleged to be well in excess of one

million dollars.

21

Creek had violated its plan and the AMPs requirements, the prospect of civil penalties and

criminal liability for violating the AMPs requirements, the prospect that all its land would be

removed from the current-use program, and most important a subsequent specific direction of

FPR. The majority disagrees with this point, as shown by its three footnotes on the issue—ante,

nn. 10, 11 and 12—and is acknowledging through these footnotes that the point is central to its

rationale. Accordingly, I have added a separate section at the end of the dissent summarizing the

facts that show why the majority’s conclusion is wrong. See infra, ¶¶ 128-134. If Plum Creek

had completed the harvest it would have had no evidence of the state of the harvest at the time of

the forester’s declaration, evidence that became critical in the defense of this case.13

¶ 51. My disagreements with the majority are deep and extensive and take many pages

to fully explain. There are, however, three other points to which I will return on numerous

occasions, and I summarize them here as a road map through this dissent. First, by statute, the

standard for judicial review in this case is de novo, a standard that by definition provides the

broadest and most extensive judicial review of administrative action. While the majority has

paid lip service to that standard, it has actually employed the narrowest and most agency-

deferential standard of review possible, turning the statutory standard into its opposite. If the

standard of review were applied the way it is written, the superior court decision would be

affirmed. In In re Town of Sherburne, we recognized in regard to the standard for review of

administrative action that courts have a tendency to recite “a batch of verbiage and then pay[] no

attention to what it has said in determining what to do.” 154 Vt. 596, 607, 581 A.2d 274, 280

13 The majority finds significant that Plum Creek “voluntarily ceased cutting” when

concerns were raised. Ante, ¶ 38 n.10. I find significant that the county forester never stated that

Plum Creek should complete its harvest and the forester would judge compliance based on the

completed harvest. Also important is that FPR withdrew its approval for the harvest and only

accepted that Plum Creek had resolved the AMPs issues after the termination decision was made.

Despite Plum Creek’s immediate letter indicating how it would proceed forward in compliance

with the plan and to resolve the AMPs issues, the forester went forward with the termination

action in this case and never answered the letter. If there was an attempt to settle this

controversy, the evidence lies in the administrative record that was never disclosed.

22

(1990) (quoting 5 K. Davis, Administrative Law Treatise § 29:27, at 456-57 (2d. ed. 1984)).

This is exactly what the majority has done here.

¶ 52. Second, the majority has reversed the decision of trial court, without a remand,

holding that as a matter of law the agency must prevail. At best, this would be an unusual and

exceptional action, particularly after four days of trial and extensive evidence and findings of

fact, none of which are found to be erroneous. If the trial court employed the wrong standard of

review, the remedy is to remand the matter to the trial court to apply the right standard in light of

the evidence and findings of fact. After reading the majority opinion, it is difficult to see what

the purpose of the trial was or whether Plum Creek’s extensive evidence could even be

considered. Indeed, it is hard to understand the purpose of judicial review at all.

¶ 53. Third, the sole question on which this case turns is whether Plum Creek violated a

timber-harvesting plan that it drafted and the agency approved. I have attached the plan to this

dissent. The superior court found that Plum Creek did not violate the plan. The State claims it

did but does not identify the language in the plan it says was violated. The majority adopts the

theory of the State because the State’s interpretation of the plan is entitled to deference, again

with no specific identification of the requirement in the plan that was violated. The result is that

the State is entitled to create plan requirements as it goes along, with no advance notice to a

landowner and no inclusion of the requirement in the plan document.

¶ 54. Having identified these recurring points, I agree with the majority that proper

identification of the standard of review that governs the superior court’s review of the decision of

FPR to terminate Plum Creek from the current-use program is important, and much of this

dissent is about the proper standard of review.

¶ 55. For an instant in its opinion, the majority acknowledges that the Legislature has

established the standard of review of the administrative decision for this case as de novo. The

leading treatise on administrative law states the “meaning of the de novo standard” as follows:

23

This standard tells a court to affirm the agency only if it agrees

with the administrative conclusion either as to the entire

administrative decision or some part of it. If the court does not

agree, the court is instructed to substitute its own judgment.

C. Koch & R. Murphy, Administrative Law and Practice § 9.22[1] (3d ed. 2016).

¶ 56. This is exactly the meaning of de novo review that our decisions reflect. For

example, in Town of Victory v. State, we rejected the application of de novo review in the

absence of a legislative direction to use it because “[d]e novo review, whereby the superior court

would simply substitute its judgment for that of the director, necessarily usurps power delegated

to the executive branch; therefore that standard is inappropriate unless the statute expressly so

provides.” 2004 VT 110, ¶ 16, 177 Vt. 383, 865 A.2d 373 (emphasis added). As I discuss

below, de novo review here means that judicial review is not based on the agency record; indeed,

it could not be here because there is virtually no record. I recognize that we have adopted a

presumption against de novo review when the review statute does not provide for it. Where, as

here, the Legislature expressly provides for it, we must follow the legislative direction.

¶ 57. Instead of implementing this standard of review, the majority has adopted its own

standard, unsupported by the governing statute, which is exactly the standard of review that we

would adopt if de novo review was not commanded by the Legislature. Indeed, it is exactly the

opposite standard of review, as narrow and limited as exists anywhere in our law. In doing so, it

has emasculated judicial review, overturning a trial decision based on four days of trial without

deciding that any of the findings of fact of the trial court are erroneous and without a remand for

factfinding under what it views is the correct standard of review.

¶ 58. This is a case where under neutral standards, de novo review would be

appropriate even if the Legislature was silent on the nature of review. There is no factual

development in the administrative agency: Plum Creek was not entitled to an evidentiary hearing

before the FPR Commissioner; the Commissioner did not offer an evidentiary hearing; and, most

importantly, this is not a decision where agency expertise is central. The administrative record is

24

virtually nonexistent, consisting of the county forester’s violation determination, the

Commissioner’s decision, and Plum Creek’s filings in opposition to the termination decision.

This is a pure adjudicatory case with little or no policy issues. The fundamental issue in this case

is what the plan drafted by Plum Creek means—the agency was not interpreting and applying a

statute, regulation, or even a policy. Plum Creek is essentially charged with breaching its permit

application; in comparable situations, the agency does not get particular deference in that

decision.

¶ 59. The majority has adopted a standard of extreme deference that makes the

administrative decision controlling with no meaningful opportunity to contest it. Even if such

deference were ever appropriate where the Legislature adopts de novo review, it is totally

inappropriate in the case before us. As the trial court concluded, this level of deference allows

the agency to create new rules as it goes along where the rules should be set in the controlling

documents.

¶ 60. Finally, it is clear from the way that the majority has written its decision that it

believes that the only right answer to the circumstances before the court is that provided by the

State and that Plum Creek is relying on a technicality to avoid its just consequences. In fact, the

evidence before the trial court showed many possible rationales, not built on technicalities, on

which to resolve the conflict, and Plum Creek’s explanation for what it did, as accepted by the

trial court, was reasonable. The short answer to the majority’s factual assertions is that the case

was tried by a very experienced trial judge who made detailed and thorough findings of fact and

conclusions based on them, which should be respected rather than rejected out of hand. I will

address each of these points below.

I. This Was a Pure Adjudicatory Proceeding Based on Whether or Not

Plum Creek Complied with Requirements Contained in Two Documents,

and the Evidence and Findings Show It Did Comply

¶ 61. To be eligible for the current-use or Use Value Appraisal (UVA) program,

forestland must be “under active long-term forest management . . . in accordance with minimum

25

acceptable standards for forest management.” 32 V.S.A. § 3752(9)(A). “Minimum acceptable

standards for forest management” are defined, in turn, as “refer[ring] to certain standards

established by the Commissioner of Forest, Parks and Recreation.” Id. § 3752(13). Eligibility

also generally requires compliance with “the regulations adopted by the [Current Use Advisory]

Board.” Id. § 3755(a); see id. § 3953 (establishing Current Use Advisory Board). Comprised of

the Commissioner of Taxes, the FPR Commissioner, the Director of the Division of Property

Valuations and Review (PVR), members of the private agricultural and forestry sectors, and

local government representatives, id. § 3753(b), the Board has several legislatively defined

duties: to periodically review the criteria for enrollment in the UVA program, recommend

changes and improvements, and adopt rules to carry out its statutory goals. Id. § 3754(a), (c).

The UVA Program Manual adopted by the Board sets forth minimum standards for forest-

management plans, minimum standards for forest management and regeneration, standard forms

for use by landowners enrolled in the program, and appendices containing additional guidance

for foresters and landowners.

¶ 62. If any of the above statutes, rules, or policies were involved in this case, the FPR

Commissioner would be entitled to substantial deference in interpreting them, a point discussed

below. The Commissioner did not conclude, however, that Plum Creek violated any of those

statutes, rules, or policies. Instead, the FPR Commissioner concluded that Plum Creek violated a

timber-harvesting plan that Plum Creek itself drafted. No policy is involved in determining

whether the plan was violated. I would accept that a decision to reject a plan would involve

policy, and that decision would be based on agency expertise. But once the plan is accepted, the

only relevant determination is whether the plan was violated.

¶ 63. Forestland is eligible for the UVA program if the landowner prepares and submits

a ten-year forest-management plan and it is approved by FPR. Id. § 3755(b)(1)(C). In this case,

Plum Creek had such a plan prepared by the company that owned the land before Plum Creek.

The plan specified that when Plum Creek was to engage in timber harvesting, it was required by

26

the plan to seek and have approved a plan amendment for each “stand” in which the harvesting

would occur. These amendments are known as prescriptions, and Plum Creek prepared one and

had it approved for each of the three stands involved in this case. The prescriptions are prepared

on forms supplied by FPR and are very short documents. I have attached the relevant content of

these documents to this dissent in an appendix; the content takes up less than two pages. Thus,

the decision to remove the land had to be based on a conclusion that Plum Creek’s timber

harvesting violated either the ten-year management plan or the relevant prescription; in this case

it was based entirely on the prescriptions. These documents were drafted by the landowner, not

the agency. See Vt. Dep’t of Forests, Parks and Recreation, Use Value of Forestland in Vermont

at 2 (Feb. 1, 2006) (“County foresters who are employed by the State do not write use value

plans. Their role is to advise landowners and consulting foresters, review and approve

management plans . . . and to conduct on-site monitoring.”). They are essentially applications

for a permit, and the controlling question is whether Plum Creek did what it said it would do in

its application.

¶ 64. To a great degree the dispute has centered on cutting in Stand 34 and a rationale

that pervades the decisions with respect to each of the stands—that the extent of cutting had to be

even across the stand so the remaining forest after cutting would be the same throughout the

stand. The Commissioner’s decision focused on this stand and this rationale, and the majority

decision has almost exclusively focused on it. The trial court found that the residual basal area

(RBA) in the cut portion of Stand 34 was 28.5, only a small amount below the lower

specification in the minimum prescription RBA of 30 to 40, and that the RBA for the whole

stand was 47.4.14 In his two-page adverse-inspection report, the county forester included three

short sentences describing the violation in Stand 34:

Stand has been cut contrary to prescribed silvaculture. Stand

inventoried on 2/10/2010 and 2/12/2010. Residual basal area

14 Basal Area (BA) “is a measure of forest density based on the square footage of trees

per acre.” Jones, 2004 VT 49, ¶ 10.

27

across 90.91 acres of the stand reduced to 19.7 square feet (36

inventory points with 2.63 standard error).

¶ 65. The Commissioner gave three reasons why Plum Creek had violated its Forest

Management Plan for this stand:

[1] There was no indication that the cutting plan would have been

modified had the sale reached completion. In fact, Plum Creek’s

forester stated that the logger was not following their directions.

The determination of “cut contrary” was based upon those acres

cut to date, similar to any other violation that the state has pursued

in the past.

[2] Although the unit of measure for forest management purposes

and UVA is the “stand,” management can alter the unit enough to

create different stands. As a “stand” is a contiguous group of trees

sufficiently uniform in age-class distribution, composition and

structure, and growing on a site of sufficiently uniform quality, to

be a distinguishable unit, the harvesting in stand 34 has created two

separate stands as that area harvested has a very different age-class

distribution, composition and structure now compared to that area

left untreated. They are no longer the same stand; therefore, they

should be sampled and evaluated separately.

. . . .

[3] The basis for the shelterwood method as a method of

regeneration is that it creates a moderated microenvironment that

promotes seed germination and seeding establishment as it elevates

light levels near the ground and reduces the withdrawal of soil

moisture. To create this microenvironment, the application of the

method involves leaving a residual overstory of large crowned,

seed bearing trees that are uniformly distributed over the area of

the new stand. The notion that the goals and objectives of the

shelterwood treatment were met by considering shade from trees

over a kilometer away (in the uncut portion of the stand) as

providing the necessary microenvironmental condition is a

misapplication and a complete misunderstanding of the principle of

the silviculture practice. The residual basal area of 19.7 square feet

is considered a commercial clear cut. Additionally, the residual

trees comprising this basal area are at best intermediate stems in

the 10 to 12 inch diameter class that lack the crown size necessary

to provide the shading conditions even if the desired residual basal

area target was met. Plum Creek’s prescription should not be

narrowly interpreted to just stocking levels. Recommendations

were presented relating to what would be removed (at-risk mature

stems) and what would remain (sugar maples and yellow birch

with large crowns, quality growing stock).

28

(Emphasis added.) Except for the one reference to the plan in the third reason, the decision

makes no reference to the content of Plum Creek’s plan. Thus, to determine whether Plum Creek

violated the plan, the superior court and this Court have to independently examine the plan

language in comparison to the rationale.

¶ 66. The Plum Creek plan is contained in the appendix to this opinion. The plan says

Stand 34 has 137 acres. There is no mention in the plan of an even distribution of trees. Indeed,

it says “[t]he understory varies greatly in stocking of acceptable regeneration.” It says that “the

majority of the overstory is unacceptable growing stock.” It says “the shelterwood will be

irregular in distribution.”

¶ 67. The first and second grounds for the decision to terminate Plum Creek from the

current-use program are inconsistent and unsupported by any record evidence that the

Commissioner had even at the time of rendering the decision.15 Under any standard of review,

termination based on these rationales could not be sustained.

¶ 68. The first rationale states that “[t]here was no indication that the cutting plan

would have been modified had the sale reached completion.” In fact, the Plum Creek manager

responsible for the tract sent a letter to the FPR county forester explaining that the timber

harvesting contractor had violated Plum Creek’s instruction in a number of respects and

outlining how the harvesting would be done in the rest of the stand to stay within the prescription

overall. The letter was admitted into evidence as exhibit 27. It is uncontroverted and directly

contradicts the Commissioner’s assertions.

¶ 69. Even if the contrary evidence did not exist, it is important to state that there is

nothing in Plum Creek’s plan to suggest that the RBA measurement was to be made in the part of

the stand that happened to have been “treated” when the county forester appeared for an

observation visit. Thus, there was no obligation for Plum Creek staff to give an “indication” they

15 As I discuss infra ¶¶ 91-93, we have no way of knowing what information the

Commissioner actually had because there is no record of the inputs to the Commissioner’s

decision except for the county forester’s determination.

29

would proceed differently in the remainder of the harvest as long as they met the RBA

requirement at the end. Finally, it was irrelevant how FPR had pursued alleged violations in the

past. If it wanted the timber harvesting to meet the minimum RBA requirements at all times

during the harvest, it should have directed Plum Creek to put that standard in the plan.

¶ 70. The second rationale is even weaker. It is based on the premise that Plum Creek–

“management” in the Commissioner’s phrasing—had no intention of finishing its harvesting in

the stand and was comparing the situation in the treated area with the situation in the untreated

area. Thus, both the State and the majority have emphasized the Commissioner’s language that

Plum Creek asserted that “the goals and objectives of the shelterwood treatment were met by

considering shade from trees over a kilometer away (in the uncut portion of the stand).” The

statement is entirely disingenuous because the evidence was undisputed that Plum Creek

intended that there would be no untreated area and there would be harvesting in all parts of the

stand. Plum Creek never argued that a shade tree one kilometer away would make up for the

lack of a shade tree in another area. The reality is that there never would be a comparison

between treated and untreated parts of the stand if the State had not declared a violation before

the harvest was completed and prevented harvesting in the remainder of the stands.

¶ 71. Although this rationale is poorly stated in the Commissioner’s decision, it is

argued by the State and accepted by the majority as a statement that the cutting that occurred on

Stand 34 went beyond a RBA of 30 ft2 and, therefore, could be grounds for termination of Plum

Creek from the current-use program. The State’s position is that whenever in the course of a

timber harvesting FPR staff measure the RBA of the area in which harvesting has occurred the

RBA cannot go below the minimum specified in the plan. Stated differently, the State’s position

is that all cutting must be even across the stand with no part more cut than another. FPR points

to no language in the Plum Creek plan that actually states this requirement, and there is no such

language. To the extent that the plan addresses the issue, it is directly contrary to the State’s

position. The plan says: “The shelterwood will be irregular in distribution.” Uneven distribution

30

of shade trees was part of the plan and could be accomplished only by uneven cutting. There is

no support for the State’s position that uneven cutting within a stand violates Plum Creek’s plan.

¶ 72. It is no answer to the absence of the requirement in the plan that FPR is simply

enforcing its consistent policy. Whatever may have been FPR’s policy, we are necessarily

dealing here with legal requirements. FPR’s policy is not stated in the plan or in legally adopted

regulations. The most important function of judicial review is to prevent an agency from acting

outside the legal system in which it operates.

¶ 73. The trial court concluded that this is exactly what occurred here. It found: “In this

case, the State’s evidence showed that it had relied heavily on RBA measurements . . . taken

from plots in just a portion of each stand and rejected RBA evidence pertaining to the stands as a

whole. In doing so, it imposed a standard that is not in the UVA manual, is not a norm in

forestry practice, and was not included in the prescription.” It added “Without any rule in the

UVA manual or specification in the prescription, an owner would not be on notice that RBA

would be measured other than by the stand as a whole, particularly where the particular

prescription calls for a result of 30-40 ‘overall stand residual basal area.’ ”

¶ 74. The majority has added a new and different rationale for the Commissioner’s

decision—that Plum Creek is responsible for the measurement of only part of the stand, and must

accept it, because it suspended the harvest and never restarted it. This rationale is not in the

Commissioner’s decision or in the superior court decision. It is legally and factually erroneous.

¶ 75. It is factually erroneous because Plum Creek could not proceed due to the fact that

FPR withdrew approval of the harvest based on the April 26 adverse-inspection report of the

county forester. In the period between the end of January, when the inspection occurred that led

to the termination, and the date of the adverse-inspection report, Plum Creek could not proceed

because it faced civil penalties and possible criminal liability as a result of the AMPs compliance

issues until it resolved those issues to the satisfaction of FPR and ANR. These facts are set out

in detail in ¶¶ 128-134 of this dissent.

31

¶ 76. It is legally erroneous because nothing in the plan or the statute or regulations

require that a harvest proceed continuously without interruption. Not even FPR has argued that

there is such a requirement. The majority’s position that Plum Creek violated such a

requirement, and thus brought on RBA measurements of only part of the stand, has no support in

the law.

¶ 77. Unlike the first two rationales, the third rationale purports to address language in

the plan. It says “Plum Creek’s prescription should not be narrowly interpreted to just stocking

levels.” In fact, there are no stocking levels in the plan so the Commissioner’s statement is

curious at best. Nor does the plan state that the RBA minimum must be met by trees that are

greater than 12 inches in diameter. Again, if FPR wants such a requirement it must insist that

Plum Creek put it in the plan. Like the first rationale of the Commissioner, this rationale was not

testified to by the county forester who testified for FPR in the trial.

¶ 78. The most important point about the Commissioner’s rationale is that it is based on

the Commissioner’s determination that the RBA in the cut area of the stand was 19.7 ft2. In fact,

as the superior court found, the RBA was 28.5 ft2, a finding of fact that even the majority

accepts, as I discuss later in this dissent. The actual RBA is 50% above the RBA adopted by the

Commissioner and close to the minimum RBA for the stand as a whole. It is impossible to know

what the Commissioner would have decided if she had to apply the right RBA in rendering her

decision and could not rely on a conclusion that Plum Creek had actually performed a

commercial clear cut.

¶ 79. The majority has largely ignored the glaring holes in the Commissioner’s decision

because of its holding that deference controls everything. Thus, for the majority, the

Commissioner’s decision is right because it is not “standardless, unsupported by the evidence, or

contrary to law,” the standard of review it finds applicable. Ante, ¶ 35. I will address later my

differences on standard of review, but the point here is different—that deference has no

application where the only question is whether Plum Creek complied with its plan and the

32

Commissioner has made fundamental errors in her analysis. While the majority addresses a part

of the Commissioner’s decision, it never explains how Plum Creek violated any provision of its

plan. The majority decision relies on the Commissioner’s decision because it “promotes the

overall policy of the UVA program,” “is logical,” “allows for more effective oversight by FPR,”

and “it is a method consistently used.” Ante, ¶¶ 36-39. As the above discussion states, I

disagree with many of these reasons, but that is entirely beside the point. Nowhere does the

majority say that the forester’s opinion is required by the plan, the central question that was

before the superior court and before us. All of the majority’s points are reasons why FPR might

have acted to insert the forester’s opinion into the plan that Plum Creek submitted, but they are

irrelevant to this case because FPR accepted the plan without this language, and the superior

court found that the opinion was not contained in or supported by the plan. That is all that

should count in this decision.

¶ 80. The majority’s decision in this case is entirely different from that in Jones, 2004

VT 49, ¶ 10, the decision on which the majority most relies. In Jones, this Court quotes exactly

the plan provisions it found were violated and why there was a violation. There were two such

provisions. One provided that there would be “selection cuts approximately 40 feet in diameter.”

Id. ¶ 5. The evidence showed “a series of clear cuts in Stand 3 well in excess of the

‘approximately 40 feet in diameter’ prescribed in the plan. Evidence of the extensive cuts—

ranging in size from one to two acres—was uncontroverted.” Id. ¶ 8. The second part of the

plan that was violated allowed “ ‘limited single tree and group selection cuts’ of overstocked

areas of hardwoods.” Id. ¶ 10. The evidence showed that the cutting in a part of the stand that

the landowner identified was “overstocked” and went well beyond the limited single-tree and

group-selection cuts specified in the plan. Id. ¶ 14. The difference between the analysis in Jones

and the analysis here is glaring.

¶ 81. There are three other points about Jones that are important for comparison in this

case. First, Jones involved a completed harvest that the forester inspected during a regular five-

33

year inspection. Id. ¶ 5. It did not involve the interruption of a partially completed harvest with

comparisons between harvested and unharvested areas. Second, to the extent that the forester

acted based on part of a stand, it was because the prescription authorized cutting only in

“overstocked areas” and the landowner had designated the 15.8-acre area involved as

overstocked. Id. ¶ 13. There is no such designation in this case. The latter point is important

because the majority asserts that Plum Creek should have known after Jones that its compliance

could be judged based on cutting in only part of a stand. Even assuming that Jones gave a

different landowner of different land with a different plan proper notice of an unwritten FPR

policy, Plum Creek would learn from Jones only that if the landowner specifically designated a

part of a stand for a specific different treatment, and violated the requirements of the designation,

it could be terminated from the current-use program. The third point is that the trial court was

reversed in Jones because its findings and conclusions were “clearly erroneous.” Id. ¶ 7. The

majority found no findings or conclusions clearly erroneous in this case.

¶ 82. Finally, it is important to reemphasize that the failure to find an inconsistency

with the plan is not fixed by the choice of standard of review.16 Under any standard of review,

16 I do not think the standard of review is determinative here for the reason stated in the

text. If it were relevant, I would apply the standard of review for determinations of whether a

permittee has complied with conditions of a permit. In Agency of Natural Resources v. Weston,

we held:

In construing permit conditions, we rely upon normal rules of

statutory construction. Our principal concern is to implement the

intent of the draftpersons. Ordinarily, we do so by accepting the

plain meaning of the words because we presume that they express

the underlying intent. We also keep in mind, however, that

because land-use regulations are in derogation of property rights,

any uncertainty in their meaning must be decided in favor of the

property owner. We must be particularly careful that the conduct

complained of falls within the clear prohibition of a permit

condition before requiring the landowner to pay a large monetary

penalty. Finally, we must accord deference to the environmental

court’s construction of a permit condition, particularly when the

court’s expertise will assure consistent interpretations of the law.

34

the superior court found that FPR’s decision is based on a requirement that is not in the Plum

Creek plan, and the majority has not, and cannot, respond to this conclusion that is determinative

of the proper outcome of this case.

II. Standard of Review is De Novo

¶ 83. Having covered the first reason why the majority decision is wrong, I turn to the

second—that the majority has used a standard of review inconsistent with the governing statute.

¶ 84. I started this dissent with the meaning of de novo review. While the majority

admits that de novo review applies, it is helpful to explain why de novo review is the governing

standard. The short answer is because that is what the governing statute says: “An appeal of this

decision of the Commissioner may be taken to the Superior Court in the same manner and under

the same procedures as an appeal from a decision of a Board of Civil Authority as set forth in

chapter 131, subchapter 2 of this title.” 32 V.S.A. § 3758(d). The cross-reference is to the

subchapter on property tax valuation appeals to the superior court or to the PVR Director. We

explained the effect of this cross-reference in Mollica v. Division of Property Valuation &

Review, 2008 VT 60, 184 Vt. 83, 955 A.2d 1171, in the context of an appeal from PVR.

Although Mollica was controlled by § 3758(a), rather than § 3758(d), the language governing the

appeal was identical in those subsections.17 Thus, we recognize Mollica as a binding precedent

of the interpretation of both subsections. As Mollica holds, the effect of the cross-reference is

2003 VT 58, ¶ 16, 175 Vt. 573, 830 A.2d 92 (mem.) (quotations omitted); accord In re Barry,

2011 VT 7, ¶ 19, 189 Vt. 183, 16 A.3d 613. The lessons of these cases are that permit conditions

are construed under normal rules of statutory construction and are construed to implement the

intent of the draftsperson, who in this case was Plum Creek. The deference we give is to the trial

court, not the administrative agency. Finally, a prohibition must be clear if, as is the case here, it

will be the grounds for a large monetary penalty.

17 Mollica was decided under 32 V.S.A. § 3758(a) because it involved an appeal from

the PVR Director, not an appeal from the FPR Commissioner. At the time of the decision, the

judicial review statute for such an appeal was identical to § 3758(d), the statute involved here. In

2013, § 3758(a) was amended to delete the cross-reference to the procedure in Chapter 131,

Subchapter 2 of Title 32 and substitute “from there to Superior Court in the county in which the

property is located.” 2013, No. 73, § 13. Section 3758(d) was not similarly amended. Because

the amendment in § 3758(a) came after Mollica was decided, that decision is still controlling

precedent on the meaning of § 3758(d).

35

that appeals to superior court from a decision of the FPR Commissioner is de novo. Mollica,

2008 VT 60, ¶ 8; see 32 V.S.A. § 4467 (stating that superior court on appeal “shall proceed de

novo and determine the correct valuation of the property as promptly as possible”).

¶ 85. I recognize that it is possible that review can be de novo and on the record

generated in the administrative agency at the same time. The appeal process under 32 V.S.A.

§ 4467 is not on-the-record review. As explained in Shaffer v. Town of Waitsfield, 2008 VT 44,

183 Vt. 428, 956 A.2d 520:

The proceeding before the appraiser was a de novo hearing,

32 V.S.A. § 4467, which we have consistently held requires the

appraiser to try the dispute anew, as though it had never been heard

before. This means that the Town was not limited to proffering—

and the appraiser was not limited to considering—only such

evidence as was presented below, and that the appeal presented

taxpayers with the risk of increase as well as the chance of

decrease.

Id. ¶ 10 (quotation omitted).

¶ 86. Mollica recognized this. 2008 VT 60, ¶ 8. The trial court here proceeded exactly

as specified in Shaffer. Although the majority has reversed the court, there is no suggestion that

it proceeded improperly.

¶ 87. Property valuation appeals regularly become battles of expert witnesses, with the

municipality’s expert witness having no special status greater than the expert witness supplied by

the taxpayer, and the court or hearing officer ultimately resolving the matter. A good example of

the process is contained in our recent decision on property valuation, Vermont Transco LLC v.

Town of Vernon, which involved a utility transmission property valued by the Town at $92

million. 2014 VT 93A, 197 Vt. 585, 109 A.3d 423. The decision turned on whether the Town

used the proper methodology for valuing this unique property. The evidence came largely from

two expert witnesses who presented different valuation methodologies.

¶ 88. I believe we should apply de novo review in this case even if the Legislature had

not directed it. Although we have applied a strong presumption against the availability of de

36

novo review of the decision of an administrative agency, we have generally relied on the analysis

of the federal courts under the Federal Administrative Procedures Act (APA). See State Dep’t of

Taxes v. Tri-State Laundries, 138 Vt. 292, 293, 415 A.2d 216, 218 (1980). The Federal APA

provides a number of options from which reviewing courts choose the proper standard of review

of administrative action. 5 U.S.C. § 706(2). Among the grounds for reversal is that the

administrative decision is “unwarranted by the facts to the extent that the facts are subject to trial

de novo by the reviewing court.” Id. § 706(2)(F).

¶ 89. De novo review under 5 U.S.C. § 706(2)(F) plays a very limited role in judicial

review of administrative proceedings. In Citizens to Preserve Overton Park v. Volpe, 401 U.S.

402, 415 (1971), abrogated by Califano v. Sanders, 430 U.S. 99 (1977), the U.S. Supreme Court

ruled that § 706(2)(F) is applicable in only two instances, one of which would govern this case:

“Such de novo review is authorized when the action is adjudicatory in nature and the agency

factfinding procedures are inadequate.” Id. This case is an adjudicatory proceeding specifically

authorized by statute. The agency “factfinding procedures” are inadequate; in fact, they are

nonexistent. If § 706(2)(F) were applicable here, it would require de novo review.

¶ 90. My conclusion that the factfinding procedures are inadequate requires

explanation. The vast majority of administrative decisions are reviewable within the agency

under the extensive procedures contained in the Vermont Administrative Procedure Act

(Vermont APA), 3 V.S.A. § 800 et seq. For proceedings subject to it, the Vermont APA requires

a hearing at which a party can present evidence, id. § 809(c), and cross-examine witnesses,

§ 810(3), and on which the decisionmaker renders findings of fact based on the evidence, id.

§ 812(a). These requirements, however, are applicable only in a “contested case,” defined as a

proceeding “in which the legal rights, duties, or privileges of a party are required by law to be

determined by an agency after an opportunity for hearing.” Id. § 801(2); see also id. §§ 809(a),

810, 812(a).

37

¶ 91. The administrative review statute applicable in this case provides that an “owner

who is aggrieved by . . . the filing of an adverse inspection report . . . may appeal to the

Commissioner” within sixty days of the filing of the report. 32 V.S.A. § 3758(d). There is no

requirement of a hearing before the Commissioner. Although there was a face-to-face meeting

between the Commissioner and representatives of Plum Creek, no evidence was taken, and there

is no transcript of what transpired. There are no findings of fact. The decision of the

Commissioner is apparently based primarily on the decision of the FPR county forester, even

though there is no indication the forester was present at the meeting. The record as transmitted

by the Commissioner to the superior court pursuant to Vermont Rule of Civil Procedure 74

consists of the decision, the letters and documents filed by Plum Creek, and the written decision

of the county forester.

¶ 92. The point is that there are no factfinding procedures applicable in this case. The

majority states that:

The Commissioner examined the evidence supplied by the county

forester and concluded that both the evidence and the methodology

were sound. The Commissioner found that the data was collected

appropriately and compliance was measured according to the

correct methodology.

Ante, ¶ 13. While it would have improved the Commissioner’s decision if she had done and said

what the majority attributes to her, her decision does not contain what the majority claims. The

Commissioner’s decision does say, “The violation is clear and undisputed by information

provided by Plum Creek.” Even the short description of the process before the Commissioner

included in the majority decision shows the latter part of this statement is erroneous.

¶ 93. There is an obvious reason why the majority’s statement is unsupported by the

record—there is almost no record. As I described above, the record consists of the violation

decision of the county forester, the filings of Plum Creek, and the decision of the Commissioner.

The Commissioner’s decision contains findings and conclusions that are not in the forester’s

letter or the filings of Plum Creek. The record does not include any information on which the

38

forester relied, any information on the action of middle-management of FPR between the forester

and the Commissioner,18 or the source of many findings and conclusions of the Commissioner.

The situation here is essentially identical to that in Conservation Law Foundation v. Burke, 162

Vt. 115, 645 A.2d 495 (1993):

In order for judicial review to proceed on the record, it is critical

that the court have before it the full agency record that was before

the Secretary at the time he made his decision. . . . Thus, if the

agency decisionmaker’s decision is based on the work and

recommendations of subordinates, the record should include all

documents considered by the agency employees whose input

reached the decisionmaker.

Id. at 127, 645 A.2d at 502 (quotations omitted).

¶ 94. Burke was not a de novo review proceeding. Id. at 126, 645 A.2d at 502. The

record in that case was as incomplete as that in this case. We held in that case that the superior

court must remand the case to the agency to obtain a proper record before proceeding. Id. 127-

28, 645 A.2d at 503. Here, the inadequacy of the supplied record supports the de novo

evidentiary hearing held by the trial court to establish a record.

¶ 95. I recognize that Burke held that de novo review was not available even in a case

where there is no administrative factfinding and no record on which effective judicial review

could have gone forward. As in Burke, the reviewing court in this case could have required the

production of a complete record of the administrative action, the proper remedy if de novo

review were not statutorily required. In my view, the difference lies in the nature of the

administrative decision. In Burke, the decision involved the evaluation of the public health and

safety effects of emission of toxic substances from a solid waste incinerator as part of a complex

regulatory process. In that circumstance, agency expertise was critical and the need for

18 The county forester’s adverse-inspection report was sent to the Chief of Forest

Management, and thereafter to Plum Creek. By letter of May 20, 2010, the Director of Forests

of FPR notified Plum Creek that the investigation was complete and “was forwarded to the

Waterbury Office for review” and sent to PVR, “recommending that the property be removed

from UVA for harvesting contrary to the management plan.” Even this letter was not part of the

record. The record did not include any information about the review in the Waterbury Office or

any other action between the county forester’s report and the Commissioner’s decision.

39

deference to the agency decision was high. This case, by comparison, essentially comes down to

counting trees where agency expertise is relatively unimportant. I will explain the need for

expertise in this case below. I emphasize that the above discussion is about how judicial review

should have proceeded had there been no legislative requirement of judicial review. In this case,

the Legislature has required de novo review, and we are required to follow that direction.

¶ 96. Finally, on this point, it is important to recognize that the Commissioner could

have chosen to hold an evidentiary hearing but did not. An evidentiary hearing would have

prevented, at least in part, the difference between the information on which the Commissioner

rendered her decision and the testimony and evidence on which the superior court rendered its

decision. In fact, under the non-process employed, there were no self-imposed restrictions on

how the Commissioner chose to find the relevant facts, and her decisionmaking process is

opaque apart from her reliance on the FPR forester.

III. The Majority’s Standard of Review is Wrong and

Inconsistent with the Legislature’s Direction

¶ 97. In Town of Victory v. State, 2004 VT 110, ¶¶ 14-24, we were required to

determine the standard of judicial review of a decision of a state agency in valuing state-owned

real property in a town under the state PILOT (payment in lieu of taxes) program. Unlike in this

case, the Legislature had provided the right of appeal of a PILOT determination but did not

specify the standard of review. We posited three possible choices: de novo review; review under

chapter 131 of subchapter 2 of title 32, specifically 32 V.S.A. § 4467; or traditional deferential

on-the-record judicial review. We essentially found that choices one and two were the same,

using the analysis discussed above. Id. ¶¶ 14-21. We defined the third possibility as follows:

“The third possibility is that the Legislature intended the superior court to treat § 3708 appeals

just as it treats appeals from other administrative actions—that is, it should review the record and

overturn the agency's determination only if it finds it arbitrary and capricious.” Id. ¶ 22. In the

absence of a legislative directive to the contrary, we chose the third possibility.

40

¶ 98. Although there are slight differences in the language, the majority has chosen the

third possibility in this case. The decisions which it states have the proper standard of review, In

re Johnson, 145 Vt. 318, 488 A.2d 750 (1985), and In re DeCato Bros., Inc., 149 Vt. 493, 546

A.2d 1354 (1988), are unremarkable examples of “arbitrary and capricious” review based on the

administrative record, exactly the standard of review we would have chosen under Town of

Victory in the absence of legislative direction to the contrary. In each of these cases there was an

evidentiary hearing at the administrative level and findings of fact and conclusions of law. In

Johnston, the appeal came directly to the Supreme Court so there could be no independent fact-

finding. In DeCato, the judicial appeal went first to the superior court but again it was on the

administrative record and the evidence in the administrative hearing. Thus, judicial review in

each case proceeded under the Vermont APA, and the standard of review was that routinely

applied in APA review.

¶ 99. The problem with deriving the standard of review from these cases is obvious. In

this case, the Legislature has specified a standard of review, and it is not the third possibility

specified in Town of Victory, highly deferential on-the-record review. Instead, it is a form of de

novo review used in property tax appeals. The majority has turned the statutory standard of

review into its polar opposite. How it has done so is a fascinating process that reminds me of the

child’s game of broken telephone where “a child whispers a phrase into the ear of a second child,

who whispers it into the ear of a third child, and so on. Distortions accumulate, and when the

last child announces the phrase, it is comically different from the original.” S. Pinker, Words

and Rules: The Ingredients of Language 47 (1999).

¶ 100. The starting point in the majority analysis is two sentences from Jones, 2004 VT

49. Jones was a case similar to this one, but the statutory standard of review statute is not

reflected anywhere in the decision; apparently neither party recognized its substance and

application. The two sentences are: “We discern no basis to conclude that the Department’s

finding of a violation in this case was standardless, unsupported by the evidence, or contrary to

41

law. Accordingly, we conclude that the court’s findings were clearly erroneous and must be

reversed.” Id. ¶ 14. The majority finds the first sentence to contain the applicable standard of

review.

¶ 101. Even if we assume that the Court was aware of the statutory standard of review, I

would not find that the language in Jones on which the majority relies was intended as a

statement of the standard of review for that and following cases. The first sentence is not

followed by a citation to any authority, and the words do not appear in any earlier case, or in any

statute, as a standard of review. Certainly, if we were announcing some wholly new standard of

review for current-use decisions by FPR, we would explain why we were doing that and how we

had the power to do so. In fact, the words have never been cited since as a standard of review,

and the development of the correct standard of review occurs in Mollica, a later decision, without

relying upon the Jones language. Moreover, as the second sentence explains, the actual standard

of review that decides the Jones case is different—that findings of fact cannot stand if so lacking

in support in the evidence that they are clearly erroneous—is familiar and totally consistent with

de novo review.

¶ 102. Even if we intended some new and different standard of review, the majority has

turned it into something more than it says. It does not say the agency will prevail if its decision

is based on a standard, is consistent with the evidence, and is consistent with law. At best, it says

instead that the agency decision will prevail if those things are true and the decision against it is

based on a clearly erroneous finding of fact. This is a very important point because in this case,

unlike Jones, the majority finds no instance where the trial court made a clearly erroneous

finding of fact.

¶ 103. I would distinguish the Jones language based on the discussion in the two

paragraphs above, but I believe that the likely explanation for its presence in the opinion is that

the Court, including I, was unaware of the statutory standard of review. The Jones language is

fundamentally at odds with de novo review as required by the statute because under de novo

42

review the court is expected to substitute its judgment for that of the agency when it thinks the

agency is wrong. The language has no place in a decision made under a de novo standard of

review. If the majority believes it does, it should explain how.

¶ 104. The next step in the majority’s analysis is to rely on In re ANR Permits in Lowell

Mountain Wind Project, 2014 VT 50, ¶¶ 15-16, 196 Vt. 467, 98 A.3d 16, for the proposition that

“decisions made within the expertise of such agencies are presumed correct, valid and

reasonable.” As the majority states, ANR Permits is a de novo review case, but the quote is

taken out of context and, as a result, the meaning is changed. The relevant paragraph of ANR

Permits states:

In commencing our own review, we must first determine the

standard of review that applies in appeals from the PSB sitting in

its appellate capacity. As all parties noted, we generally give

substantial deference to an agency’s interpretation of its own

regulations—in this case, ANR’s interpretation of the VSMM.

Absent a clear and convincing showing to the contrary, decisions

made within the expertise of such agencies are presumed correct,

valid and reasonable. Interpretation of the VSMM is squarely

within ANR’s expertise as its authoring agency. This deferential

standard remains on appeal, even after the PSB holds a de novo

hearing on the matter.

Id. ¶ 15 (footnote omitted) (quotation omitted).

¶ 105. The paragraph is solely about the deference accorded an agency in interpreting its

own regulations, deference that is entirely consistent with de novo review. See Letourneau v.

A.N. Deringer/Wausau Ins. Co., 2008 VT 106, ¶ 8, 184 Vt. 422, 966 A.2d 133. Thus, it was

appropriate to cite and rely upon Johnston, which is not a de novo review case. To show the

limit of the deference ruling, the Court added: “In keeping with the statutory standard of review,

[the PSB] gave no deference to ANR’s permit decision.” ANR Permits, 2014 VT 50, ¶ 11.

Thus, the decision does not give general deference to the factfinding, methodology, or

conclusions of an agency, the deference involved in this case. This case does not involve the

interpretation of regulations by the agency that adopted them.

43

¶ 106. The majority cites another part of the ANR Permits decision that it finds supports

its deferential standard of review. The decision in that case involved the validity of the

stormwater discharge permit for a mountain top wind electric generation project. The agency

allowed the project to employ an alternative stormwater treatment practice that opponents argued

was not authorized by governing regulations. As noted above, the decision turned entirely on

whether the design was consistent with the regulations as interpreted by ANR and the Public

Service Board (PSB). In reaching our decision that ANR and the PSB properly interpreted the

regulations we noted that the Legislature explicitly gave statutory discretion to ANR in

determining whether to issue a stormwater discharge permit and that the PSB had to respect that

discretion even within the context of de novo review. Id. ¶ 16.

¶ 107. The ANR Permits analysis cannot change the standard of review in this case. In

the context of renewable energy projects, a large number of types of ANR permits are reviewable

de novo by the PSB under 10 V.S.A. § 8506. Some of these give specific discretion to ANR in

deciding whether to issue a permit; others do not. See 10 V.S.A. § 8503(a). Despite the

presence of de novo review, the PSB is required to apply the “substantive standards” applicable

to ANR, including any discretion ANR has in determining whether to issue a permit. Id.

§ 8506(d); ANR Permits, 2014 VT 50, ¶ 16. This is the context of ANR Permits.

¶ 108. Here the standard of review is imposed by statute, 32 V.S.A. § 3758(d), for only

two administrative actions by FPR: filing an adverse-inspection report that results in termination

from the current-use program or refusal to approve a forest-management plan. Under the

majority’s standard-of-review theory, because either of these actions lie in the discretion of FPR,

the statutory standard of review is cancelled and replaced by deferential review. To state the

theory is to expose how illogical it is. ANR Permits does not create a way for a court to refuse to

44

apply the standard of review specified by the Legislature.19 FPR is entitled to no deference

under ANR Permits.

¶ 109. Finally, the majority pivots to a case involving an APA contested case appeal,

after an agency hearing, where the standard of review is explicitly deferential and not de novo, In

re Williston Inn Grp., 2008 VT 47, ¶ 13, 183 Vt. 621, 949 A.2d 1073 (mem.), demonstrating it

has reached the point where there is no difference between a de novo standard and a deferential,

on-the-record standard.

¶ 110. The ultimate test of the holding on standard of review has to be whether we have

complied with the governing judicial review statute. Whatever the logical twists and turns in

analyzing the standard of review, and even if each step of the way appears to be consistent with

and controlled by precedent, the result must be consistent with the statute. In the terms of

“broken telephone,” the result of the majority’s analysis is “comically different” from the

statutory standard. The majority has turned the statutory standard of review into its polar

opposite and found against Plum Creek as a matter of law on the polar opposite standard of

review.

IV. The Decision Does Not Involve Policy

¶ 111. The majority decision states and reiterates the need to protect and rely on agency

expertise in numerous places in support of its deferential standard of review. In citing and

discussing ANR Permits, it describes the agency decisions here as “complicated methodologies

within an agency’s expertise.” Ante, ¶ 30, citing ANR Permits, 2014 VT 50, ¶ 16. There are

three issues on which methodology was disputed: (1) whether even cutting was required so that

the area cut never fell below the minimum; (2) the actual RBA in the cut area; and (3) when tree

19 Even if there might be a case for discretion with respect to plan approval, there is none

for filing an adverse-inspection report. FPR is required to file an adverse-inspection report if it

“finds that the management of the tract is contrary to the . . . forest management plan.” 32

V.S.A. § 3755(c).

45

regeneration measurements should be taken to determine whether the goals of the harvest were

achieved.

¶ 112. Whether even cutting was a proper requirement was the subject of expert dispute,

and under the statutory standard of review, the superior court could substitute its judgment for

that of the Commissioner as I explain above. The superior court believed the expert witness for

Plum Creek and not the FPR expert witness, the county forester, and should be affirmed on that

basis.

¶ 113. My main view on even cutting, however, is different. If even cutting was a plan

requirement, it had to be explicitly stated in the plan. The wording of the plan is actually

contrary to a requirement of even cutting—it indicates that the shelterwood is irregularly

distributed and the “overall stand” RBA must be 30 to 40 ft2. FPR’s expertise may be

appropriate to determine whether even cutting should be required, but if it decides even cutting is

required it must put it in the plan or a separate regulation. In this case, it did not, and Plum

Creek cannot be terminated based on the nonexistent requirement.

¶ 114. The second point of dispute is actually relied upon in the Commissioner’s

decision. The decision states that the RBA for the cut area in Stand 34 was 19.7 ft2, just above

60% of the required minimum RBA. The superior court found the RBA of the cut area was

actually 28.5 ft2, only 5% below the required minimum RBA. Again, the superior court’s

conclusion was based on the testimony of Plum Creek’s expert witness who testified that he

measured more trees than the county forester so that the extent he had to extrapolate to reach the

estimated RBA was less. The court found:

Apart from whether RBA is measured across a stand as a whole,

the Court finds that Mr. Holleran’s methodology for measuring

RBA produced a more reliable result, as it was based on

measurements taken from a significantly greater number of sample

plots. His additional explanation of the difference between his

figures and Mr. Langlais’s is credible: that it was likely attributable

in part to Mr. Langlais not counting all the trees in the sample

plots, thereby producing a lower RBA measurement. While Mr.

Langlais testified generally that his measurements were taken in a

46

manner consistent with the UVA manual, the Court finds the

quality and reliability of Mr. Holleran’s measurements to be

superior.

The majority states that the trial court could make this factual determination, apparently because,

despite the disagreement with the county forester’s methodology, and the Commissioner’s

finding based on that methodology, the disagreement is over the relatively simple matter of

counting trees. Ante, ¶ 23 n.7.

¶ 115. The majority answers, however, that the RBA calculation difference is irrelevant

because it came out under a 30 ft2 RBA, no matter how slightly. Even under the majority’s

rationale I find that explanation insufficient. The Commissioner’s decision relied upon the fact

that the RBA was 19.7 ft2, which would indicate there had been a commercial clear cut. In fact,

the RBA was very close to the minimum. The Commissioner was concerned about whether a

part of the stand would have “a very different age-class distribution, composition and structure”

from the rest of the stand. In fact, if the harvest were completed within the RBA minimum, as

intended, it is not clear there would be a “very different” remaining growth anywhere in the

stand. The problem, of course, is that the FPR policy that it is implementing is written down

nowhere so it is impossible to know what it actually is, a large deficiency when FPR claims it

can come in at any time during the harvest of an irregular shelterwood to measure compliance.

At a minimum, the Commissioner should be required to explain why an RBA of 28.5 ft2 is

inadequate in these circumstances.

¶ 116. The third issue in dispute was joined particularly with respect to Stand 43, a

different stand from that considered by the majority, but I will consider it here because it is

mentioned in the Commissioner’s decision with respect to Stand 34. As I excerpted above, the

Commissioner’s decision states: “the residual trees comprising this basal area are at best

intermediate stems in the 10 to 12 inch diameter class that lack the crown size necessary to

provide the shading conditions even if the desired residual basal area target was met. Plum

Creek’s prescription should not be narrowly interpreted to just stocking levels.” Putting aside

47

whether a landowner can be terminated from the UVA program based on noncompliance with a

“broad” interpretation of the plan based a plan requirement that is not actually in it, the facts as

found by the superior court are contrary to the Commissioner’s apparent conclusion.

¶ 117. The county forester criticized the harvest because it did not produce the promised

regeneration of new trees—he found “there was regeneration in only 15% of the plots

examined.” This opinion was based on a standard of regeneration of 350 stems per acre

immediately after the harvest. Plum Creek’s expert witness, by comparison, did a regeneration

study three growing seasons after the harvest, also against a standard of 350 stems per acre. He

found a regeneration rate of 12,000 seedlings per acre, far exceeding the minimum requirement.

The superior court accepted the conclusion of Plum Creek’s expert witness because the UVA

manual standard is measured three years after the regeneration harvest and the witness’s

measurements were more reliable.

¶ 118. Although the majority has not responded to the superior court’s analysis and

conclusion, it essentially involved the same level of competency as the counting of trees to

measure the RBA. It was also the counting of trees, in this case small ones, to measure

regeneration. The main difference between the superior court’s conclusion and that of the

Commissioner involved when the measurements were taken; the superior court’s measurement

time was in compliance with the governing UVA manual; the Commissioner’s conclusion was

not.

¶ 119. Again, the superior court conclusion does not involve policy for the same reason

that the resolution of the RBA issue does not involve policy. While it does not address a

requirement that is stated in the plan, the conclusion of the superior court is nevertheless

important for an understanding of the Commissioner’s decision. Reduced to its main point, the

decision here is about regeneration of a healthy and productive forest. The Commissioner

concluded that the cutting level was too great to allow regeneration. Plum Creek proved that

48

regeneration, orders of magnitude above what was required, were occurring and thus the harvest

cutting rate was a success. The superior court agreed with Plum Creek.

¶ 120. Because of the regeneration result, this dispute is largely about a technicality.

That is my last point in the following section.

V. The Facts Support Plum Creek’s Position

¶ 121. There are some important facts not contained in the majority’s recitation that bear

on whether Plum Creek’s position was reasonable and the trial court acted within its discretion in

accepting it. One group is laid out in the opening two paragraphs of this dissent, and I will return

to these facts below. Another group relates to the present condition of the forest over which this

controversy arises and the goals of the logging activities that FPR approved.

¶ 122. The overall forest in this case was in poor condition to support commercial

forestry. The prescription for each of the stands in controversy states that the stand “has high

residual stand damage” and the beech trees are diseased. See Appendix. The trial court

described the situation and the goals of the timber harvest as follows:

[T]he general goals were to cut in a manner to change a poor

quality old forest into a new forest through the creation of new

growth. This would be accomplished by harvesting damaged trees

and large trees that would inhibit the growth of desirable young

trees, promoting the growth of desirable young trees, retaining

trees that could provide seeds and shade for new growth in a

desirable growth pattern, establishing even age management on the

stands with both existing young trees and new growth, and

optimizing conditions for growth for the future.

If this had been a forest in which 100% of the trees were valuable and desirable for sale and the

goal was to maximize return on these trees, the requirement that logging occur evenly over a

stand would be reasonable and understandable such that excessive harvesting in one part of the

stand would be a clear indication that excessive harvesting overall was intended.

¶ 123. The situation in this case was very different. Thus, the prescription for Stand 34,

the stand in which this conflict primarily developed, stated: “The shelterwood will be irregular

49

in distribution and will target Sugar Maple and Yellow Birch with large crowns to provide shade

and seed distribution.” It added, “the portions of the stand will also receive 1-2 acre patches

where quality and stocking are not sufficient for shelterwood.” See Appendix. Given the

“irregular distribution” of logging activity, the presence of an arbitrary area in the stand with a

lower RBA than contemplated overall was entirely expectable. Put another way, even cutting

was highly unlikely because the tress that needed to be cut were not evenly distributed over the

stand. The cutting could not occur pursuant to some artificial standard of equal harvesting per

acre.

¶ 124. Finally, it is important to understand that the measure of success for Plum Creek

was whether regeneration occurred as a result of the harvesting, the exact goal that the

Commissioner stated she was enforcing. The evaluation of the partial harvest three years later

shows that it was an overwhelming success—the regeneration levels are orders of magnitude in

excess of what was required. Thus, Plum Creek is being heavily penalized for a success.

¶ 125. This, and the facts in the opening paragraphs, brings me to the heart of my

disagreement with the majority’s characterization of the facts and Plum Creek’s perspective on

the facts. This conflict would likely never have arisen in the courts if the timber harvesting was

completed in the three stands, and that completion was only days away when the site visit

occurred. Plum Creek never intended to harvest only part of the stand and certainly not only the

part of the stand that had been logged to that point. The fact that only part of the stands were

harvested, and harvest measurements are available only on a part of the stands, was a direct

result of the FPR forester’s conclusion based on the site visit that the stands were being “cut

contrary.” While there is no indication that the FPR forester could or did order the logging

stopped, Plum Creek was put in a position of stopping logging operations to protect itself from a

FPR decision to terminate it from the UVA program.20

20 Its decision was also based in part on the AMPs violations, and Plum Creek’s decision

not to move forward until these were corrected. They were, however, corrected.

50

¶ 126. The majority has fixed on its view that it makes no sense to average between the

logged area of a stand and the unlogged area, relying particularly on the Commissioner’s

statement that considering a tree a kilometer away in the uncut portion to determine compliance

for a tree in the cut portion was a “misapplication and a complete misunderstanding of the

principal of the silviculture practice.” Everyone agrees with the Commissioner’s statement,

including Plum Creek’s expert, but it does not answer the basic problem with the State’s

position. Plum Creek never intended to harvest only part of a stand and did not claim so here.

This is an example of attributing a position to a party to tear it down—a strawman position. The

Plum Creek position has always been that the harvest could not be judged in midstream and

should have continued to its end, and then it could be judged on whether it violated the plan.

The cause of this controversy is the stopping of the timber harvest days away from its completion

and the required determination of whether the plan was violated by a timber harvest that was

never completed. Plum Creek’s expert testified that Plum Creek could complete the harvest fully

compliant with the provisions of the plans, particularly the minimum basal area requirements and

the use of appropriate treatments in each part of the stands. He noted particularly about Stand 34

that the area that had been logged had been extensively damaged by the 1998 ice storm.

¶ 127. By footnotes 8, 9 and 10 the majority has added to its position that it was fair to

consider only part of the stands by stating that if Plum Creek intended that the RBA be judged on

the stands as a whole, it should not have shut down the harvest at the time of the initial

inspection on January 26, 2010 and should have completed it at some time thereafter. The

majority asserts that stopping the harvesting was wholly a decision of Plum Creek and not a

decision of FPR. Even the limited facts in the record show that this position is wrong.

¶ 128. There were two adverse consequences of the January 26, 2010 site visit during the

harvesting. First, as discussed above, the FPR county forester decided that Plum Creek had “cut

contrary” to its plan. Second, the county forester decided that Plum Creek had violated the

AMPs in a number of respects. Later that day, the Plum Creek forester sent the FPR county

51

forester an email expressing an intent to comply with program requirements and thanking the

forester for cooperation in meeting those standards. The next day, the Plum Creek forester sent

the county forester a formal letter describing the situation observed on January 26 and specifying

steps Plum Creek would take in the future to comply with the requirements that bound it. It

specifically described the steps it would take to correct the AMPs violations alleged by the

forester and prevent AMPs violations in the future.

¶ 129. It is important to understand that the consequences for an AMPs violation and a

violation of the harvest plan are different. Both can result in termination from the UVA

program, but AMPs violations that result in unpermitted discharges of waste into the waters of

the state in violation of 10 V.S.A. § 1263(a) can result in civil penalties up to $10,000 per day for

each day of violation. See 10 V.S.A. § 1274(a)(6). Such a discharge is also a crime that can

result in imprisonment for up to six months. Id. § 1275(a). The FPR county forester found that

the AMPs violations were “discharge resulting” such that the civil penalties and possible

criminal liability were applicable. When charged with an AMPs violation, Plum Creek was

forced to suspend the harvest in order to correct any AMPs violations.

¶ 130. The county forester never responded to the communications from the Plum Creek

Forester, but another site visit on AMPs compliance was planned with ANR staff responsible for

AMPs enforcement. That occurred on February 9 but did not resolve the issues because snow

had fallen on the site making it impossible to observe the alleged violations. In a February 18

letter, FPR outlined the steps needed for Plum Creek to come into compliance with the AMPs.

Plum Creek hired a contractor to do the remedial work, and the ANR and FPR staff revisited the

site on April 19, 2010. On April 27, FPR sent a letter to Plum Creek saying that Plum Creek was

now in compliance with the AMPs. Plum Creek could not have moved forward with the harvest

until all the AMPs issues were corrected; that is, when it received the April 27 letter.

¶ 131. Meanwhile the parties had a meeting with respect to compliance with the plan on

February 18. The Plum Creek representatives hoped to learn at that meeting that there would be

52

no further actions that would prevent it from moving forward with the harvest. Instead, they

learned that the county forester was working on an adverse-inspection report which would lead

to termination of Plum Creek from the current-use program. During March and April, the county

forester continued to take measurements at the stands to complete the adverse-inspection report.

¶ 132. The adverse-inspection report was issued on April 26, 2010, a day before the

AMPs compliance letter that would allow Plum Creek to move forward. If there was any

question about the continuation of the harvest after the adverse-inspection report, on May 20,

2010, the Director of Forests for FPR sent a letter to Plum Creek saying that a draft of the

adverse-inspection report was being reviewed in the “Waterbury office” and had been sent to the

Tax Department recommending that all Plum Creek property be removed from the UVA

program. The letter stated, “Until all actions related to the potential UVA violation are

completed, FPR will not be in a position to approve any new activities in the area referred to as

Clough Brook North.” This was a statement that no further harvesting in the relevant area would

be allowed pending resolution of this case. Plum Creek interpreted it as such an order and did no

further harvesting in the stands involved. That order has been in effect since May 20 and up to

today. It was in effect in November 30, 2010 when the Commissioner claimed in her letter that

Plum Creek was using the unharvested part of the stands to claim compliance, the rationale

endorsed by the majority.

¶ 133. The majority states that this dissent wanted FPR “to wait indefinitely to see if and

when the landowner will continue cutting before bringing a violation.” Ante, ¶ 38 n.10. That is

a mischaracterization of the facts and Plum Creek’s position, as well as that of this dissent. The

FPR county forester began work on the adverse-inspection report immediately after the January

26 inspection. Plum Creek never could move forward after the January 26 inspection to

complete the harvest either because of the AMPs issues or because of the adverse-inspection

53

report and subsequent order denying approval for any further harvest activities. It is FPR, and

not Plum Creek, that stopped harvesting activities to this day.21

¶ 134. In summary, the facts—if we decide it on the facts—support Plum Creek’s

position, not that of FPR. In the end, however, facts are for the trial court and not this Court, and

the trial court considered every one of the factual assertions of the majority and either rejected

them or concluded that they did not support the Commissioner’s decision. We should affirm the

trial court’s decision.

VI. Conclusion

¶ 135. In conclusion, I believe that this decision is wrong on multiple levels. It is wrong

in determining whether FPR or Plum Creek should prevail, and is wrong in ruling as a matter of

law. The superior court correctly ruled that Plum Creek never violated its plan, the standard for

determining whether it should be terminated from the UVA program, and should be affirmed on

that basis. It is wrong by adopting a standard of judicial review that turns a governing statute

into its exact opposite. It is wrong in rewarding an administrative process that is opaque and

does not contain the minimum standards of fairness. Finally, it is wrong in misusing extreme

deference to emasculate judicial review. The majority’s holding on standard of review has

emasculated judicial review in this case.

¶ 136. I dissent. I am authorized to state that Justice Skoglund joins this dissent.

¶ 137.

Associate Justice

21 The back and forth on this issue is a clear example why appellate factfinding is

improper. There has never been factfinding on the question of whether Plum Creek could have

completed the harvest because it was never an issue in the trial court or raised by the parties on

appeal. For the reasons stated in the text, I believe that the majority’s characterization of the

record on this point is clearly wrong. The alternative, if there is one, is to remand to the trial

court to determine the facts.

54

Appendix to Dissent

Relevant Content of Plum Creek Prescriptions

Stand # LM-03-34 LM-03-43 LM-03-44

Acres 137 115 37

Total basal

area (ft2/acre)

82 88 97

Acceptable

growing stock

basal area

(ft2/acre)

35 38 42

Management

activities

Shelterwood cut Shelterwood cut

Overstory removal cut

Intermediate thinning

Forest health

conditions

The stand has high

residual stand damage.

Beech bark Nectria

complex.

The stand has high

residual stand damage.

Beech bark Nectria

complex.

The stand has high

residual stand damage.

Beech bark Nectria

complex.

Description of

stand

conditions

Stand 34 is a well stocked

Northern hardwood type

with a total basal area of

82 ft2, of that 35 ft2 is

acceptable growing stock.

The stand is dominated

by Sugar maple, Yellow

birch, Beech, Balsam fir,

Red Spruce. The mean

stand diameter is 8.4

inches. The stand is

weighted towards the

medium saw timber size

class. The current stand

has a high level of

residual stand damage

and a fair amount of

crown die-back. The

understory varies greatly

in stocking of acceptable

regeneration, with small

pockets of Sugar maple

seedling and saplings in a

patchy distribution about

the stand.

Stand 43 is a well

stocked Hardwood

dominated mixed wood

type with a total basal

area of 88 ft2, of that 38

ft2 is acceptable

growing stock. The

stand is dominated by

Yellow birch, Balsam

fir, White birch, Red

spruce, Red maple. The

mean stand diameter is

8.2 inches. The stand is

weighted towards the

medium saw timber size

class. The White birch

in the stand is in severe

decline and the majority

of Balsam fir is mature.

The majority of the

stand has good stocking

in Red spruce seedlings

and saplings in the

understory.

Stand 44 is a well

stocked Northern

hardwood type with a

basal area of 97 ft2, of

that 42 ft2 is acceptable

growing stock. The

stand is dominated by

Sugar maple, Yellow

birch, Beech, Balsam

fir, Red spruce. The

mean stand diameter is

7.6 inches. The stand is

weighted towards the

small saw timber size

class. The stand has a

fair amount of

acceptable stocking in

the small saw timber

size class.

Management

practices to be

accomplished

during next 10

year plan

Stand 34 will receive a

Two Staged Shelterwood

(2SS) (even age UVA

code 3). The stand lacks

an acceptable amount of

regeneration and the

majority of the overstory

Stand 43 will receive a

Two Staged

Shelterwood (2SS)

(even age UVA code 3)

and Overstory Removal

(OSR) (even age UVA

code 4). 30-40% of the

Stand 44 will receive

an Intermediate

Thinning (ITH) (even

age UVA code 2). The

stand is well stocked

with small saw timber,

however many of the

55

is unacceptable growing

stock. A low density

shelterwood with a

residual basal area of 30-

40 ft2 will be utilized to

discourage the

establishment of beech in

the understory. The

shelterwood will be

irregular in distribution

and will target Sugar

maple and Yellow birch

with large crowns to

provide shade and seed

distribution. The portions

of the stand will also

receive 1-2 acre patches

where quality and

stocking are not sufficient

for a Shelterwood. The

patches will not affect the

overall stand residual

basal area of 30-40 ft2.

stand will receive an

Overstory Removal

where the overstory is

in severe decline and

the understory is well

stocked with seedling

and sapling sized Red

Spruce. The remaining

portion of the stand will

receive a Shelterwood.

The harvest will target

the at-risk and mature

stems. The target

residual basal area is 60

ft2. The harvest will

release quality growing

stock and provide gaps

to promote

regeneration.

medium and large saw

timber stems are in

decline. The thinning

will target the at-risk

and mature stems and

leave a target residual

basal area of 60 ft2.

This will release the

small saw timber size

class and open up gaps

for regeneration.

V LT L A N D O W N E R I N F O R M AT I O N S E R I E S

BARGAIN SALE OF LAND

AND CONSERVATION

EASEMENTS

An approach to conserving land that has advantages for both the landowner and the Vermont Land

Trust is a bargain sale. In this situation, the landowner sells the land or a conservation easement to

the Vermont Land Trust (VLT) at less than the full market value and donates the remaining value.

For the landowner, this combines the income of a land sale with the tax benefits of a donation.

The difference between the fair market value, which is determined by an appraisal, and the purchase

price is treated as a charitable contribution and can significantly reduce capital gains taxes from the

sale (or other taxable income in the same tax year). For VLT, bargain sales make land and easement

purchases more affordable.

GENERAL PRINCIPLES

1. To claim a tax deduction for a bargain sale, the donor must obtain a “qualified appraisal ” which

is one that is prepared by a “qualified appraiser” following the Uniform Standards of

Professional Appraisal Practice (USPAP). This means that an appraisal must be prepared by an

independent, qualified appraiser and must contain certain factual information specified in the

IRS regulations. If prepared before your donation, it must have an effective date that is no more

than 60 days before the date of the donation. The donor will need to file a summary report (IRS

Form 8283), signed by the appraiser and the Vermont Land Trust, with the donor’s federal

income tax return. Before signing Form 8283, VLT will require a copy of the complete

appraisal. More information about these requirements is available in VLT’s bulletin “Appraisal

Requirements for Conserving Land.” Appraisals commissioned for grant funding often cannot

be used for the IRS requirement, but the donor can often commission the same appraiser to

complete the IRS appraisal at a lower cost than a brand new appraisal.

2. Bargain sales and gifts of land are tax deductible if they are made to a 501(c)(3) charitable

organization, such as the Vermont Land Trust. In the case of a conservation easement however,

a bargain sale or gift is deductible only if made to a “qualified organization.” In addition to

government agencies and a class of “supporting foundations,” qualified organizations include

“public charities” whose mission includes the protection of open space land and whose support

is derived from a broad group of members. The Vermont Land Trust meets all of these

requirements.

3. For a bargain sale to qualify for a charitable deduction, the landowner must intend to make a

charitable gift. If the IRS determines there is a lack of “charitable intent,” it may disallow the

deduction. Although there are no specific guidelines, there is a risk that if the purchase price is

more than 80-90 percent of the appraised value, the IRS could conclude that there was only

“arm’s length” bargaining between the buyer and seller, and no charitable gift was intended. Put

VLT LANDOWNER INFORMATION

SERIES

Bargain Sale of Land and Conservation Easements Page 2 of 3

another way, the greater the bargain amount is to the total appraised value, the lesser the risk is

that the IRS would disallow the deduction.

4. Please be sure to comply fully with all IRS requirements. VLT will not knowingly participate in

projects where it has significant concerns about the tax deduction.

ADVANTAGES OF A BARGAIN SALE TO THE LANDOWNER

Capital Gains Tax Savings

If the property has increased in value during the seller’s ownership, a bargain sale will reduce the

amount of capital gains taxes owed from the sale. Capital gains taxes are imposed on the seller’s

“profit,” or the difference between what the seller paid for acquisition (plus improvements) and the

selling price. Since an owner accepts a reduced sales price when doing a bargain sale, the amount of

taxable gain is reduced.

Income Tax Savings

In addition to reduced capital gain taxes, the seller may claim the difference between the sale price

and property’s appraised value as a charitable donation. This deduction may partially or wholly

offset the taxable gain or even reduce the amount of tax the donor must pay on other taxable

income.

Estate Tax Savings

Finally, for a small group of donors with very large estates, a bargain sale may reduce the amount of

property that is subject to federal estate taxes. (Because the status of estate taxes is in flux, please

contact your financial advisor for the latest information.)

ESTIMATING THE RESULTS OF A BARGAIN SALE

To compare a sale at fair market value to a bargain sale, many pieces of information about each sale

would be required: sale price, the realtor’s commission, other selling costs, seller’s “cost basis,”

federal and state tax rates, time to complete conventional versus a bargain sale, and so forth.

However, for illustration purposes, here is how a bargain sale works:

Suppose that years ago a landowner purchased a tract of land for $40,000, which now has a

fair market value of $400,000. If the land is sold for the full $400,000, the seller would

realize a taxable capital gain of approximately $360,000. Federal and state capital gains

taxes would total approximately ___percent, leaving the owner with net proceeds of

approximately $_______. If the seller used the services of a realtor, the net proceeds would

be somewhat less.

Now suppose the owner agrees to do a bargain sale with the Vermont Land Trust for

$300,000, or 75 percent of the appraised value. In this case, the seller would realize a

VLT LANDOWNER INFORMATION

SERIES

Bargain Sale of Land and Conservation Easements Page 3 of 3

capital gain of approximately $270,000 ($300,000 sale price minus 75 percent of the

seller’s original purchase price). However, because the $100,000 reduction in sale price

qualifies as a charitable deduction, the taxable gain may be further reduced to only

$175,000. In this example, the seller’s net proceeds would be $________, or only $_____

less than the net proceeds of the market sale.

The same rules are generally applicable to sales and bargain sales of conservation easements.

However, there are different rules relating to the allocation of cost basis, which would make the

examples here overly complex. There are also some limitations on how much charitable deduction a

donor may take in one year (30 percent of adjusted gross income for appreciated property), although

carryovers are allowed for up to five additional years. (Increases in this annual deduction limit and

carryover period are under discussion in Congress, please check with VLT for the latest news.)

The important point is that the “cost” of a bargain sale to the seller is often substantially less than it

first appears, once taxes and selling costs are figured in. And if the Vermont Land Trust is the

purchaser, the land will continue to be used for farming, forestry, or recreation.

ADVICE LANDOWNERS SHOULD SEEK BEFORE BARGAIN SELLING A CONSERVATION EASEMENT

The Vermont Land Trust can provide a wide range of information about conservation easements,

other conservation options and the tax considerations of sales and bargain sales. If it has sufficient

information, it can also make a preliminary comparison of the results of a conventional sale and a

bargain sale. However, a land trust cannot provide legal or financial advice nor can it guarantee that

an income tax deduction will be granted.

This area of tax and real estate law is technical and often quite complex. Landowners should always

consult with their attorney to ensure that they understand the nature of the transaction and the

details of the conservation easement. If income or estate tax benefits are an important consideration,

landowners should also consult with their financial and tax advisors. VLT does not recommend

specific advisors, but can provide a list of attorneys and accountants who have expertise in this

field.

Vermont Land Trust

8 Bailey Avenue

Montpelier, VT 05602

(802) 223-5234

Fax: (802) 223-4223

www.vlt.org

Revised 2012

Landowner Information Series: Conservation Easement Donations

1

Conservation Easement Donations

Thousands of acres of farm and forestland that contribute to the unique, rural character of

Vermont have been permanently conserved by landowners who have donated conservation

easements to the Vermont Land Trust. This popular method of conservation helps many

families achieve their personal dream of protecting their land, while also making a lasting

gift to their community and state. Landowners who choose to donate conservation

easements will likely see tax benefits for their contribution.

What is a conservation easement?

A conservation easement is a voluntary legal agreement between a landowner and a

qualified conservation organization such as the Vermont Land Trust (VLT). A government

entity, such as a town, can also hold a conservation easement.

A conservation easement protects land from development for future generations, ensuring

that it will always contribute to Vermont’s unique landscape. When land is conserved, it

remains in private ownership, but carries with it protective restrictions that limit some uses.

These protections are forever upheld by our stewardship staff.

Conservation easements offer several advantages to landowners:

The property remains in private ownership. If you conserve your land, you continue

to own and manage the property, or you may sell it, or leave it to your heirs.

Landowners can continue to make decisions about the use and management of

their land. For instance, you may farm your conserved land, manage it for timber or

wildlife, or decide whether to allow people to hunt or recreate on the land.

Landowner Information Series: Conservation Easement Donations

2

Conservation easement donations can reduce income and estate taxes. A

conservation easement gift is considered a charitable donation and may provide an

income tax deduction. Conservation easements also can reduce the value of your

land due to the limitations placed on some uses or future development. Reducing the

overall value of your land, and therefore your estate, can make the difference

between having the land sold to pay estate taxes and being able to leave the property

to children.

Conservation easements are flexible and easily tailored to a family’s needs.

Easements can be written to anticipate your future plans and reflect the unique

features of your land.

Easements are permanent. Conservation easements remain in force even after the

land changes hands. They are recorded in the local land records and are binding on

both the present and future owners of that property. Unlike deed restrictions, a

conservation easement is forever upheld by VLT as an interested party whose goal is

to protect the easement.

What rights are retained by the landowner?

Once a property is conserved, landowners can continue to use their land for a wide variety

of activities. Examples of these permitted uses include the right to:

Engage in agricultural pursuits

Manage woodlands and conduct maple sugaring operations

Build and maintain barns and other farm structures

Clear, construct, and maintain trails for non-commercial recreational activities

Construct a seasonal camp for personal use

The easement may allow a pre-determined number of future residential subdivisions,

provided the land’s conservation values can be protected

What restrictions are placed on the landowner?

Activities that do not support the conservation goals of the property are limited or

prohibited by a conservation easement. Conserved properties are generally subject to these

provisions:

Uses are commonly limited to those that involve agriculture, forestry, education,

non-commercial recreation, and open space;

Commercial, industrial, and mining activities are prohibited;

New buildings are prohibited, except those constructed for agricultural or forestry

purposes, or house sites specifically negotiated in advance;

Landowner Information Series: Conservation Easement Donations

3

Signs are generally prohibited, except for informational and directional signs related

to the property, e.g., “Posted” signs, if desired, by the owner.

Excavation or any change of topography is not allowed, except when necessary to

carry out a permitted use;

With limited exceptions, subdivisions are generally prohibited; and

Other unanticipated future uses that are inconsistent with the original owner’s

conservation goals are prohibited. This ensures that VLT has the ability to carry out

the original landowner’s intent in perpetuity.

What type of land does the Vermont Land Trust conserve?

The Vermont Land Trust accepts conservation easements on farmland, managed

forestland, recreational land, natural habitat, and open land with substantial scenic or

community value.

Generally we work with landowners interested in donating an easement on 50 acres or

more. On occasion, we will conserve smaller parcels with excellent resources, unique

natural features, or significance to a community. We may also accept easements on land

with primarily historic value.

Our decision to accept a conservation easement is guided by a set of project-selection

criteria.

Does the public have access to conserved land?

Owners of conserved land must allow VLT staff reasonable access to their property in

order to perform regular monitoring visits.

When donating a conservation easement, the landowner ultimately decides whether or not

to include public access provisions in the easement. However, in some situations we may

encourage landowners to allow public access as we consider the land in light of our project

selection criteria.

Examples of public access provisions in a conservation easement might include access to a

trail or the property for hikers, hunters or skiers, or fishing access along a river or

shoreline.

Landowner Information Series: Conservation Easement Donations

4

How does the Vermont Land Trust ensure that conservation restrictions are followed? Recognizing how important it is that all of our easements are observed and enforced over

the long term, our Conservation Stewardship Program performs both educational and

monitoring functions.

At the time of conservation a baseline documentation report is prepared for every

conserved property, describing the land’s physical attributes and unique resources. After

the easement is in effect, a stewardship staff member will schedule yearly appointments to

visit the property and discuss any changes or future plans with the landowner.

If a violation of the conservation easement is discovered, the stewardship staff member

will attempt to personally contact the landowner in an effort to correct the problem. If this

is unsuccessful, VLT will file a court enforcement action. So far, the few violations of our

easements that have occurred have all been corrected voluntarily.

What are the Tax Benefits of Donating Conservation Easements? A charitable income tax deduction may be available for a gift of a conservation easement

to a qualified organization like the Vermont Land Trust. Under Internal Revenue Code

Section 170(h), deductions may be taken for perpetual conservation easements if they are

given “exclusively for conservation purposes.”

This requirement can be met if the easement conserves land that:

Involves significant farmland, forestland, and open space that either provides scenic

enjoyment for the public, furthers public conservation policies, or includes

historically important land or buildings;

Includes relatively natural habitats for fish, wildlife, plants, or similar ecosystems; or

Is used by the public for outdoor recreation or education.

The donor may take a charitable income tax deduction for the easement’s value, which is

determined by a qualified appraisal. A qualified appraiser must prepare the appraisal, and

the document must fulfill certain regulatory standards. To secure a deduction, a summary

of this appraisal must be submitted on IRS Form 8283 with the donor’s income tax return

for the year of the gift. For donations valued in excess of $500,000, the complete qualified

appraisal report must be appended to the tax return.

The deduction may not exceed 50 percent of the donor’s adjusted gross income, but any

unused portion can be carried over for up to fifteen more years. Vermont’s income tax is a

percentage of the federal tax, so an easement donation may also reduce state income taxes.

Landowner Information Series: Conservation Easement Donations

5

Finally, a conservation easement can reduce potential estate tax liability. The value of

conserved property for estate tax purposes must take into consideration any reduction in

property value resulting from the donation of an easement.

What else should I know?

The Vermont Land Trust can provide a wide range of information about conservation

easements, other conservation options, and the effects of conservation easements on taxes.

However, a land trust cannot provide legal or financial advice, nor can it guarantee that a

deduction will be realized.

Conservation easements are perpetual and involve a technical area of the law. Each

landowner should consult with his or her own attorney to review the conservation

easement in detail. If income or estate tax benefits are important, the landowner may also

wish to consult with an accountant or tax planner. VLT does not recommend specific

advisors but can provide donors with a list of attorneys and accountants who have

expertise in the area.

Vermont Land Trust 8 Bailey Ave Montpelier VT 05602 (802) 223-5234 www.vlt.org/land-protection

This document was last updated in 2016

Important Advisory: Tax Shelter Abuse of Conservation DonationsAll Land Trust Alliance (the “Alliance”) member land trusts adopt and commit to implement Land Trust Standards and Practices

(“the Standards”), the ethical and technical guidelines for the responsible operation of a land trust. Those guidelines require that

all Alliance member land trusts refuse to knowingly participate in tax shelter transactions. To assist land trusts in avoiding these

transactions, the Alliance is providing this updated Advisory, which updates and supersedes in full all prior versions.

The purpose of this Advisory is to:

assist land trusts in understanding tax shelter transactions that use conservation tax incentives;

explain applicable practices, requirements and regulations

describe due diligence that land trusts can use to identify tax shelter transactions;

make clear a land trust’s options and obligations once it has identified a likely tax shelter transaction; and

make clear that Practice 10C4 in the Standards and this Advisory do not apply to donations of conservation easements or land

by an individual or sole proprietorship, or by a pass-through entity that consists of related parties.

Background

The Alliance is concerned about transactions that disguise a tax shelter designed to generate profits from a charitable donation

for conservation. In these tax shelter transactions, unrelated investors acquire interests in various pass-through entities, such as

partnerships or limited liability companies, which entities hold title to land. Then, after a short holding period, usually fewer than

three years, the entities donate conservation easements (or land) to land trusts and claim deductions based on appraised values

that are significantly in excess (often by three to 10 times) of the original acquisition price. As a result, investors each receive tax

benefits that are worth significantly more than each investor’s initial investment. Typically, promoters organize these

transactions in return for high fees. Sometimes promoters offer extraordinary stewardship donations to the participating land

trusts.

These transactions are antithetical to the concept of charity that Section 170(h) of the Internal Revenue Code was designed to

reward. As such, the Alliance is acutely concerned that congressional support for the federal charitable deduction for

conservation donations is imperiled by these transactions, which is a major threat to the conservation work of land trusts.

Because of these concerns, the Alliance has taken a number of actions to help its land trust members identify and avoid these

transactions.

In February 2017, the Alliance released the revised Standards, which include a new Practice 10C4. That practice prohibits

Alliance land trust members from engaging in these transactions. The Alliance is also aggressively advocating for legislation in

Congress to stop tax shelters that use conservation tax incentives, including preventing passive partnership investors from

profiting from these types of transactions by claiming excessive federal tax deductions.

The IRS was so concerned about these transactions that it took the extraordinary step of issuing Notice 2017-10 (the “Notice”) to

describe these transactions, to classify them as “listed transactions” and to require disclosures by participants in, and material

advisors to, these transactions. Notably, the IRS also indicated in the Notice that it considers the transactions to be “tax avoidance

transactions” that it intends to challenge. The description of tax shelter transactions in the Notice is similar to the text of Practice

10C4, and it also focuses on the fact that promoters typically market these transactions to investors using promotional materials

that highlight the potential for outsized federal tax deductions.

The purpose of the Notice is to require participants and material advisors in these transactions to disclose them to the IRS for

further scrutiny. Merely being a transaction described in the Notice does not automatically make the transaction illegal; however,

it underscores the likelihood that the transaction violates federal tax law.

Page 1 of 6Important Advisory: Tax Shelter Abuse of Conservation Donations | Land Trust Alliance

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Duties of Alliance Land Trust Members

The Standards state that land trust members of the Alliance shall not knowingly participate in potentially fraudulent or possibly

abusive transactions (see Practice 1A3). Practice 10C contains exact criteria for each land trust to evaluate transactions with

pass-through entities consisting of unrelated parties so that land trusts are able to make an informed independent determination

regarding Practice 1A3. Practice 8C3 requires land trusts to evaluate projects for potential risks, including credibility issues.

Practice 9A1 requires a land trust to obtain a legal review by an attorney of every transaction appropriate to its complexity.

In order to not violate Practice 10C4 and other provisions in the Standards, and to be able to maintain its membership in the

Alliance, a land trust member must not participate in a transaction that falls into one or more of these categories:

1.    As Prohibited under Practice 10C4

Practice 10C4 first requires that the land trust obtain a copy of the landowner’s appraisal prior to closing when engaging in

transactions with pass-through entities of unrelated parties. Practice 10C4 then requires that the land trust decline to participate

in any transaction with pass-through entities consisting of unrelated parties, particularly those offered or assembled by a third

party or described in the Notice, or otherwise described as a syndication by the IRS, in which:

a.    the appraisal indicates an increase in value more than 2.5 times the basis in the property and

b.    the easement or property is donated within 36 months of the pass-through entity’s acquisition of the property and

c.    the value of the donation (not the deduction) is $1 million or greater and

d.    the terms of the transaction do not satisfy this Advisory.

2.    As Defined in the IRS Notice

By the Notice and a subsequent notice (IRS Notice 2017-29), the IRS has ruled that land trusts are neither a participant in, nor a

material advisor to, the tax shelter transactions described in the Notice and, therefore, have no obligation to file a disclosure. Land

trust members of the Alliance, however, must decline to participate in any transaction involving a conservation donation by

unrelated parties that appears to have all of the following characteristics as set forth in the Notice:

a.    A pass-through entity will make the contribution.

b.    Members of the entity are investors who have been solicited to invest in the entity.

c.    The investment is offered to investors in oral or written promotional materials.

d.    The promotional materials offer the possibility of a federal tax deduction that is at least 2.5 times the investor’s investment.

e.    The transaction is intended to result in a contribution for which a federal income tax deduction will be claimed by investors.

Donations of land in fee simple that meet the criteria described in the Notice are also subject to its provisions. When the IRS

identifies a “listed transaction,” the listing applies not only to the exact transaction described but also to transactions that are

“substantially similar.” A transaction that involves the donation of land in fee simple that meets the above five criteria is

“substantially similar” to the conservation easement donation described in the Notice. As such, a land trust member of the

Alliance must not participate in such a transaction.

Due Diligence to Avoid Tax Shelter Transactions

To avoid the transactions described above, a land trust should follow these steps:

Step 1: Understand the People Behind the Donor Entity

The tax shelter transactions addressed by this Advisory all involve pass-through entities (i.e., an S corporation, general

partnership, limited partnership or limited liability company or any other pass-through entity). As such, this Advisory does not

apply to donations of conservation easements or land by individuals or sole proprietorships. Likewise, the Advisory also does not

apply to transactions involving pass-through entities that solely consist of related parties. 

At the commencement of any transaction that appears to involve a donor entity consisting of unrelated parties, the land trust

must document the request to and response of the donor entity if it is a partnership or other pass-through entity involving

unrelated parties and reach an independent informed conclusion whether it is. If no, then this Advisory does not apply to the

transaction.

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Related parties are those individuals related by blood, adoption or marriage to another individual owner of such a family

partnership interest. Such relationships by blood, adoption or marriage may include, but are not limited to, the following: spouses,

children, siblings, parents, ancestors of parents, nieces and nephews, aunts and uncles, members of the same household of any of

the foregoing and spouses of any of the foregoing.

If yes, then proceed to Step 2, and then as dictated by the results of the Step 2 due diligence, the Action Steps if a tax shelter

transaction, or Practice 10C3 if not a tax shelter transaction but still overvalued or of concern.

Step 2: Conduct Due Diligence to Determine If a Transaction Is a Potential Tax Shelter

a.    Obtain the following information from the donor entity

Ask the donor entity to certify all of the following information in writing so that the land trust is able to make an independent

informed determination as to whether the transaction meets the criteria in Practice 10C4 or appears to satisfy the criteria in the

Notice. The land trust must evaluate the information gathered in its due diligence with outside legal counsel against all the criteria

in Practice 10C4, the Notice, this Advisory and, if applicable, any federal legislation addressing tax shelter transactions and

determine:

Whether a promoter or third party played a role in facilitating the proposed contribution or otherwise promoted, organized or

secured the transaction.

Whether the promoter has produced or disseminated any promotional materials about the transaction, oral or written,

including an advertisement, solicitation, prospectus, offering memorandum or similar document, presentation or

communication. Ask the donor to provide a copy of the promotional materials. (This information may reveal that the

transaction is likely a listed transaction under the Notice because of the potential return on investment that is asserted [often

measured in federal tax deductions possibly available to investors] or because the promotional materials disclose that the

transaction may qualify as a listed transaction. Such a disclosure is dispositive that the transaction is a prohibited tax shelter

transaction for purposes of this Advisory.)

The date the donor entity acquired the property to be conserved.

The original purchase price or basis of the property to be conserved.

Whether the donor entity intends to claim a federal tax deduction based on the donation of a conservation easement or land.

(The donation of a conservation easement or land is often listed as one of a number of options for how the donor entity might

use aggregated investor funds [e.g., often described as the “Conservation Option” or “Green Option”], which would be

sufficient evidence of such intent).

Whether the donor entity’s expectations for value of the land or easement to be donated compared to the purchase price

approach or exceed an increase in value of more than 2.5 times the basis in the property.

Whether the appraisal reveals a value that meets or exceeds the thresholds stated in Practice 10C4 or the Notice, regardless

of any justifications in the appraisal or elsewhere in the transaction documentation.

b.    Notify the donor in writing

At the commencement of any transaction involving a donor entity, inform the donor entity in writing of the land trust’s

requirements for accepting a donation of land or a conservation easement, including, without limitation, that:

The donor entity and each of its partners or members have been informed and understand that the land trust will only close on

the transaction and subsequently sign a Form 8283 if the fully completed form is presented to the land trust with the full

appraisal sufficiently prior to the closing to enable the land trust to read and understand the full completed Form 8283 with all

attachments, and the land trust determines that the transaction does not violate Practice 10C4, does not appear to be a listed

transaction under the Notice and does not otherwise violate this Advisory.

The qualified appraisal shall identify the donee land trust, by name or by organization type as an intended user of the appraisal.

If the donee is an accredited land trust, the qualified appraisal shall identify the Land Trust Accreditation Commission by name,

as an intended user of the appraisal.

The qualified appraisal shall identify “verification of valuation compliance with the Advisory” as an intended use of the

appraisal.

1

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The donor entity and each of its partners or members have been informed by the land trust in writing and understand that the

land trust reserves the right not to accept the land or conservation easement, the right to withdraw from the transaction at any

point and the right to refuse to sign Form 8283, all at no risk or liability to the land trust.

The donor entity and each of its partners or members have been informed and understand that the donor entity and each of its

partners or members are solely responsible for relying on their own judgment and professional advice furnished by the

appraiser and all legal, financial and accounting professionals engaged by the donor entity and its partners or members in

connection with the conservation donation.

The land trust is providing no representation with respect to the availability, amount or effect of any deduction, credit or other

benefit to the donor entity, its partners or members under the Internal Revenue Code, the Treasury regulations or other

applicable law as to any of these values:

the fee interest if a gift of fee,

the conservation easement or any other partial interest,

the land subject to the conservation easement or any other partial interest.

The donor entity understands the IRS rules and the penalties associated with overvaluation and has been fully and

competently advised by the donor’s tax adviser as to all the tax rules associated with a qualified contribution of a conservation

easement or land.

c.    Secure opinion from outside counsel expert in tax matters

Obtain a written legal opinion from outside legal counsel who is an expert in tax law, to determine if the entire conservation

transaction complies with all applicable state and federal laws, the Standards, this Advisory and the Internal Revenue Code and

U.S. Treasury regulations, including, without limitation, a full assessment and opinion of the legal compliance of the appraisal with

all applicable Internal Revenue Code and U.S. Treasury regulations (“qualifying opinion letter”). Please note that counsel’s failure

to directly opine on appraisal compliance with the Internal Revenue Code and U.S. Treasury regulations fails to satisfy this step.

The land trust must withdraw from the transaction if it does not have such a qualifying opinion letter.

d.    Review the due diligence documents and appraisal before closing

The land trust must carefully review with appropriate experts before closing: the information provided by the donor entity, the

appraisal and other due diligence findings to determine whether the transaction appears to be a tax shelter transaction. If it is, the

land trust must decline to accept the land or conservation easement, as stated below.

Remember, that for the purposes of pass-through entity transactions of unrelated parties, Practice 10C4 requires that the land

trust must obtain the appraisal prior to closing.

Action Steps If a Tax Shelter Transaction

Withdraw from the Transaction as Early as Possible

Land trust members of the Alliance are required by the Standards to decline to participate in prohibited tax shelter transactions,

even when the donation would lead to extraordinary conservation (participation in tax shelter transactions for purposes of this

Advisory by land trust members of the Alliance means promoting, facilitating or enabling the transaction by serving as the

recipient of a conservation easement or fee interest in land). A land trust must withdraw from the transaction with the pass-

through entity of unrelated parties before accepting the proposed conservation easement or land gift if:

information gained during the due diligence phase indicates the appraisal shows or will show an increase in value of more than

2.5 times the basis in the property within 36 months, the value of the donation (not the resulting deduction) is $1 million or

greater and the transaction does not qualify under the “Potential Exception” described below; or

the transaction appears to be a listed transaction under the Notice; or

the transaction is prohibited or federal tax deductions for such transactions are prohibited by federal law; or

the transaction otherwise violates this Advisory.

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Refuse to Sign Form 8283

If the land trust has already accepted a gift of a conservation easement or land from a pass-through entity of unrelated parties and

is subsequently presented with a Form 8283 or an appraisal or both and the transaction falls into one or more of the four

categories described immediately above, the land trust must refuse to sign Form 8283. Also remember that, in other transactions

that are not tax shelters, but where a land trust is uncomfortable with the valuation or any other aspect of the transaction, the

land trust is under no obligation to participate or to sign Form 8283 until the donor adequately addresses the land trust’s

concerns.

Potential Exception Related to Practice10C4

In the unlikely event that the land trust completes all of the required due diligence and concludes that, even though a transaction

meets or exceeds the thresholds of Practice 10C4 and is presumptively a prohibited tax shelter, there are extenuating

circumstances that make it a legitimate transaction, it may proceed if all of the following conditions are met:

1. The transaction does not appear to be a listed transaction under the Notice.

2. The appraisal:

a. has fully documented assumptions;

b. does not use a subdivision, development, income or mineral extraction methodology to value the transaction unless the value

determined using such methodology is confirmed by comparable sales as described in subsection c below; and

c. uses the before and after method with current comparable sales from adjacent counties or the same county as the subject

property; unless the appraisal convincingly establishes that the property being appraised has a highest and best use that is

regional or national.

3. If the donor entity requires any permits or approvals to justify the appraised value, the donor entity has obtained all such permits

and approvals.

4. The land trust board, after receiving and carefully reviewing all of the above due diligence documents, finds that the transaction is

not a prohibited tax shelter, as defined in this Advisory, and votes to approve the transaction.

Discuss Substantial Concerns with Legal Counsel and the Donor

Even if the review of due diligence determines that the transaction is not a prohibited tax shelter, Practice 10C3 requires that the

land trust discuss any substantial concerns about the appraisal or the transaction with legal counsel and take appropriate action,

such as:

documenting that the land trust has shared those concerns with the donor;

seeking additional substantiation of value;

withdrawing from the transaction prior to closing; or

refusing to sign the Form 8283.

Land trust permanent records should also include copies of all of the information collected during the due diligence step and the

land trust’s written assessment of those materials, including outside experts’ opinion letters.

Evaluate Land Trust Policies

Evaluate your existing acquisition policies and procedures with the advice of outside legal and tax advisers (not a board member

or staff) in light of this Advisory. Include cautionary measures, such as those in this Advisory, to ensure that your land trust does

not unwittingly participate in tax shelter transactions.

The Land Trust Alliance Is Here to Help You

This is a complex topic. Land Trust Alliance regional and national staff are available to assist you in working through this Advisory.

If you become aware of a tax shelter transaction or have questions or concerns, call or write to Leslie Ratley-Beach, 802-262-

6051, or Sylvia Bates, 603-708-1073.

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© Copyright 2018 Land Trust Alliance

Last revised February 1, 2018.

Approved by the Conservation Defense Committee February 1, 2018.

Nonsubstantive corrections March 1, 2018, and May 23, 2018,  that do not impact the substance, intent or contents of the

document. Please contact Leslie Ratley-Beach, lrbeach@lta.org, with any questions.

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6/1/2018 The Billion-Dollar Loophole — ProPublica

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Robert Keller, in his o�ice, points to an overhead view of a conservation easementproject. (Melissa Golden for Fortune)

This article is a collaboration with Fortune.

The idea seems like the perfect marriage of environmentalism andcapitalism: Landowners give up their right to develop a piece of property,and in exchange they receive a special tax deduction. Nature is preservedand everybody benefits.

That’s traditionally how what are known as “conservation easements”worked. In California’s Napa Valley, for example, a former biology professorand museum director named Giles Mead agreed not to develop 1,318 hilltopacres in 1983 and got a deduction in return. The property, Mead Ranch,features vernal pools and rare and endangered plants. Two entirely newspecies were discovered there. Bears, bobcats and mountain lions roam thegrounds. Mead allowed groups of hikers, birders, and plant enthusiasts tovisit. He sometimes greeted them with glasses of wine from the family’svineyard. Since Mead’s death, his daughter has kept the property available tothe public.

The Billion-Dollar LoopholeThe most generous charitable deduction in the federal tax code is beingmanipulated to make big pro�its — and there’s no sign that Congress has anyintention of �ixing the problem.

by Peter Elkind, Dec. 20, 2017, 6:30 a.m. EST

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A growing number of recent easement donations, however, are driven by amore commercial reward — an outsized tax deduction for wealthy investors.Known as “syndications” (or “syndicated partnerships,” since they’retypically offered in that structure), they’re deals orchestrated by middlemenwith the goal of big payoffs for all of the participants, many of whom havenever visited the land in question.

One example: the former Millstone Golf Course outside of Greenville, SouthCarolina. Closed back in 2006, it sat vacant for a decade. Abandonedirrigation equipment sat on the driving range. Overgrowth shrouded rustingfood and beverage kiosks. The land’s proximity to a trailer park depressed itsvalue. In 2015, the owner put the property up for sale, asking $5.8 million.When there were no takers, he cut the price to $5.4 million in 2016.

Later in 2016, however, a pair of promoters appeared. They gatheredinvestors who purchased the same parcel at the market price and, with thehelp of a private appraiser, declared it to be worth $41 million, nearly eighttimes its purchase price. Why? Because with that new valuation and a bit ofpaperwork, the investors were suddenly able to claim a tax deduction of $4for each $1 they invested.

Such transactions are booming today, transforming an incentive forcharitable gifts into a windfall for the wealthy looking to save big on theirtaxes. The provision they’re exploiting is the single most generous charitablededuction in the tax code, according to experts.

The use of syndicated easement deductions has exploded in recent years,according to Brookings Institution economist Adam Looney, who beganresearching the subject while serving as a top tax official in the ObamaTreasury Department. They cost the Treasury between $1.2 billion and $2.1billion <https://www.brookings.edu/blog/up-front/2017/12/20/estimating-the-rising-

cost-of-a-surprising-tax-shelter-the-syndicated-conservation-easement/>, heestimates, in lost tax revenue last year.

That’s a negligible sum for the federal government — but it’s a proxy for abigger, more systemic problem. There are plenty of other flawed provisions inthe tax code that create opportunities for abuse, says Bill Hutton, anemeritus tax law professor at the University of California Hastings College ofthe Law. They often take years to surface — and many more to shut down.“The tax shelter advisors’ mentality just seems to live forever,” Hutton says.“Shelters keep coming back.”

That makes the treatment of syndicated easements a telling prism throughwhich to view the tax system at a moment in which Congress has beenfrantically redrafting the tax laws. It’s also a case study in how difficult it canbe to turn the rhetoric about draining Washington’s swamps into reality. Evenas Republicans scrambled to find revenue to underwrite their tax cut —legislation that they claimed would reform and simplify the system — theypermitted syndicated easements to survive intact.

And the 1,000-page bill is likely to open up costly new loopholes, accordingto experts. “It clearly is going to create artificial incentives to engage intransactions that have no economic purpose other than to reduce taxes,” says

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The Basics of ConservationEasements

To be eligible for a deduction,land needs to meet at least oneof four broadly de�ined“conservation purposes.” Theseinclude protecting “relativelynatural” habitats; historic sites orbuildings; land for publicrecreation or education; andopen space (including farms,ranches and forests). 

Based on the claimed value ofthe easement deduction,landowners can deduct up to 50percent of their income in oneyear and any remaining write-offover the succeeding 15 years;farmers and ranchers can deduct100 percent in any period fromone to 16 years. 

The landowner can continue toown and use the land as before,and even build on a portion ofit, subject to agreed restrictions; 

By law, a government agency or,more often, a nonpro�it landtrust, must accept andadminister the easement. Thetrust negotiates thedevelopment limits with thelandowner, and enforces them inperpetuity.

16 states sweeten the pot byoffering state income tax credits,too.

Looney. “The abuses in the new tax bill are going to make the costs ofconservation easements seem trivial in comparison.”

Conservation easements havegenerated controversy in the past,particularly when it came to lightthat private golf course ownerswere taking the deduction. Indeed,the nation’s current president hasavailed himself of such write-offs inlarge quantities. In 2005, DonaldTrump took a $39 million deductionon his private golf course inBedminster, New Jersey. In 2014,he donated an easement on an 11.5-acre driving range in Los Angeles.(In both cases, he pledged not tobuild houses on the property.) Alltold, Trump has made at least fiveeasement gifts, generating morethan $100 million in write-offs.

But Trump’s deductions arerelatively tame compared to theaggressive strategies employed byothers in recent years. A change intax laws encouraged enterprisingpromoters to reap deductions manytimes the size of the investment, onbehalf of investors who hadn’tpreviously owned the properties inquestion. A preliminary IRSanalysis of syndicated partnershipsthis summer showed investorsclaimed an average of $9 in taxdeductions for every dollar theyput in.

People have accomplished that byexploiting a giant loophole: Thesize of the tax deduction is based on a claim about how much the land’svalue is diminished by the promise not to develop it. By law, that estimate isdelivered by an appraiser hired by the taxpayer. The appraiser is free toassert that the donated land is actually worth many times what investorspaid for it, often just months earlier. That, in turn, inflates the deduction.The process is abetted by law firms, brokers and accountants who pocketmillions in fees.

“They’re bogus,” says tax expert Steve Small of syndicated easements. Smallhelped write the charitable-gift rules at the IRS and is now a tax attorney inCambridge, Massachusetts. “They’re tax shelters masquerading asconservation easement transactions, based on highly inflated appraisals.

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Someone’s using a charitable contribution provision of the tax code to make aprofit. That’s not what any charitable contribution is designed to do.” FormerMontana Sen. Max Baucus, a sponsor of the legislation that updated theeasement write-off, agrees. “Unfortunately, people have taken advantage ofthe code in ways that were not intended,” he says. “These things should notbe legal.”

One reason abuses have multiplied is that a surprising amount of theoversight consists of the honor system. The genteel guardians of the old-lineconservation community pledged to try to keep practitioners in line. Butthey’ve been unable to rein in the syndicators, whose rise they have watchedwith growing horror.

The traditionalists are embodied by the Land Trust Alliance, a Washington,D.C., association whose dues-paying membership includes the vast majorityof the nonprofit trusts that, by law, administer conservation easements. (Seesidebar, below.) The Alliance has long been the most important advocate forthe tax break.

The Alliance’s leadership now fears that public outrage over profiteering willjeopardize the deduction altogether. “These need to be shut down,” says theorganization’s president, Andrew Bowman. “These few bad actors are goingto give us a bad name.” Bowman’s predecessor, Rand Wentworth, callssyndications “large-scale, multi-million-dollar tax fraud.”

As views harden among the traditionalists, a schism has occurred. A splintergroup of land trusts has sided with the syndicators, providing a welcomehome for their deals. Most prominent among the renegade land-trust leaders:Robert Keller, a brash conservation biologist in Georgia who has built anempire through syndicated easements.

Unable to stop syndicators through moral suasion, the Alliance hasincreasingly prodded the IRS to take action. The IRS has policing power, andit wields that clout chiefly by auditing the returns of those who take thedeductions. But that’s a torturously slow process and one that so far hasyielded negligible results. The speed at which the syndications haveincreased has left the resource-starved agency looking like a befuddled mallcop lurching off his chair and trying to figure out which of the dozenteenagers simultaneously grabbing candy bars to chase down.

The IRS announced a broader crackdown in December 2016. It took the rarestep of branding syndicated easement deals as “listed transactions,” subjectto special reporting and scrutiny. Such IRS moves usually scare off audit-wary investors. But this time, the action appears to have had little, if any,effect.

The syndicators, arguing that the profit motive produces big environmentalbenefits, have fought back with a million-dollar public relations and lobbyingoffensive. That campaign produced a move to eliminate the funding for theIRS crackdown — one of multiple fronts on which a legislative battle is beingwaged.

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The view of Napa Valley from MeadRanch, a property that was saved fromdevelopment and made available tohikers, birders and plant enthusiasts.(Courtesy of Land Trust of Napa County)

It might sound like an arcane matter. Yet there’s a lot at stake for allAmericans: billions in tax revenue and a system that protects 56 millionacres of U.S. land from being turned into resort developments and Walmarts.How has a widely derided abuse — almost universally criticized by taxexperts — managed to survive repeated attempts to fix it?

Not so many years ago, conservationeasements seemed to be approachingextinction. Starting in 2003,investigative reports in TheWashington Post generated clouds ofscandal over the write-off. The storiesexposed self-dealing at the NatureConservancy; sham deductions takenfor protecting facades on urbanbuildings; and jaw-dropping write-offsfor golf resorts, whose chemical-doused fairways and privatemembership seemed at odds with thegoals of protecting natural habitat and

providing “significant public benefit.”

The deduction seemed destined to die, or at least be sharply limited. InJanuary 2005, Congress’ Joint Committee on Taxation proposed killing thetax break for some easements and slashing it for the rest.

But the Land Trust Alliance lobbied hard, promising it would do more toprevent misuse of the deduction. Prominent conservationists chimed in withsupport for easements. And another constituency with a mom-and-apple-pieappeal also weighed in: Farmers and ranchers, often rich in land but poor incash, argued that the provision helped keep them in business, producing thenation’s food.

As a result, rather than eliminating the easement deductions, in 2006Congress expanded them. The updated law raised the maximum annualwrite-off from 30 percent to 50 percent of taxable income; farmers andranchers were allowed to deduct 100 percent of what they make. All weregiven 16 years to use their full write-off.

As for enforcement, Congress adopted a stance that could mostly be called“trust but don’t verify.” It accepted the industry’s promises to reform, whichincluded a voluntary accreditation program that would set best practices forland trusts. Meanwhile, the law did mandate new training requirements forappraisers.

It was left to the IRS to police conservation easement misconduct throughcase-by-case audits, with stiffer penalties for those found to have violatedthe rules. That method would prove woefully inadequate to combat thecoming wave.

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It’s impossible to identify the precise birthplace of the syndicatedconservation easement. But it’s safe to say it became an industry in Georgia.Between 2010 and 2012, taxpayers in the Peach State claimed about 36percent of all federal tax deductions for conservation easements — despitehaving only 2.5 percent of the nation’s land under easement — according to areport <https://www.brookings.edu/wp-

content/uploads/2017/05/looney_conservationeasements.pdf> published in May byAdam Looney, the former Treasury official, who is now a senior fellow ineconomic studies at the Brookings Institution. Eight of the ten biggestsyndicators are located in Georgia, according to his research.

The syndication technique wouldn’t have spread the way it did without aconfluence of people and events. They include a small-town conservationbiologist and a couple of big-city ex-bankers who met after the easementslaw was changed — at a moment in the wake of the real estate crisis wheninvestors began looking for ways to salvage value from land whose price hadplummeted.

The small town was Jasper, Georgia, pop. 3,684 (about 60 miles north ofAtlanta) and the biologist was Robert Keller. In the world of land trusts, noone embraces and enables syndicated deals quite like he does. Keller, 60, isCEO of the Atlantic Coast Conservancy, where he has built a conservationempire. By his estimate, ACC oversees 80,000 acres of conserved land in 11states.

Despite the IRS’ recent crackdown, Keller expects to accept more than 80easements this year. He did 79 in 2016. Like most land trusts, Atlantic CoastConservancy doesn’t report the total value of its donors’ conservationdeductions. But a sampling of deal documents suggests it took easementsand land donations responsible for as much as $1 billion in write-offs in 2017.

Keller accepts more syndications than any one and he’s utterly unapologetic.“They call me a rogue land trust,” he says. “I’m sick of people pointing anaccusatory finger. I’m putting aside to the tune of about 12,000 acres a yearthat will never be developed. Ever. If I can do that, then I feel like I’m doingwhat I was tasked to do. I’m supposed to conserve land. What am I doingwrong? This is almost like me going to church every week, and somebodytelling me I’m going to burn in hell.”

During the day I spent with Keller in northwest Georgia, followed by manyemail exchanges and phone calls, he was charming, forthcoming and blunt.Stocky, with a red face and white beard, he was dressed in a black T-shirt,blue shorts and running shoes. His left leg bears a tattoo of a shark. On hisright calf there’s a tattoo of a leopard seal. “They eat penguins,” he says.

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Keller with his technical team. He defends syndicated easements, calling them a“wonderful conservation ploy.” (Melissa Golden for Fortune)

Keller’s story — and a close look at some of the deals he’s embraced —explains a lot about the battle over syndicated conservation easements. Forstarters, in a world of nonprofit land trusts, Keller is a proud capitalist. Hisdirect compensation from the nonprofit he heads totaled $156,750 in 2015, taxreturns show. But that’s dwarfed by the $602,432 he made fromEnvironmental Research and Mapping Facility, a side business he operatesthat works exclusively for his land trust.

Keller served in the Navy for a decade before earning a doctorate inconservation biology at Wake Forest University. He then worked as anassistant professor at the University of Tennessee, Chattanooga, for sevenyears. He left in 2006, to become the executive director of the MountainConservation Trust, a tiny outfit in Jasper, where, says Keller, “landconservation moved at a glacial pace.” Keller’s stock in trade, he says, wasthe expertise he’d picked up in the Navy about satellite-based globalinformation systems, which allows him to survey land sites virtuallyanywhere in the U.S. “I wanted to expand and do more things,” he says.“They wanted to putter along.”

Keller’s ambitions didn’t find the right vehicle until about 2009, when twoformer Wachovia bankers rolled into Jasper from Atlanta. They pitchedKeller on the idea of exploiting the devastated real estate market by urgingdevelopers and lenders to recoup some of their losses through partnershipsdonating “monetized easements” (Keller’s preferred term). Notes Keller:“Most of these people would never have talked to a conservation biologist ifthe economy hadn’t turned down because they were going to turn it all into asubdivision and make a bunch of money.”

The ex-bankers needed a nonprofit to accept easement gifts, and they hadstruggled to get a land trust on board. Keller smelled opportunity. Heconvinced his board to take a look.

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They didn’t like what they saw. In December 2009, the board of the MountainConservation Trust asked Keller to resign. Cody Laird, then one of itsdirectors, says Keller was proposing accepting easements with “excessiveappraisals” that went “against the IRS guidelines.” He adds, “It’s somethingwe didn’t want to do as a board.” (Keller denies the allegation and blames themove on “a personality conflict.”)

In 2010, Keller set up Atlantic Coast Conservancy, and began to accept“monetized” easements. By then, the Georgia syndication industry hadbegun to flourish. It touted itself with the get-rich-quick appeal of aninfomercial. “Thinking about tax deductions for this year?” began onemarketing email from a promoter called Forever Forests. “Contact us rightnow for more information on how you can facilitate a conservation easementand get incredible tax benefits for doing so.”

For the promoters, the deals were lucrative, often generating $1 million ormore in fees per transaction. New entrants rushed in from careers inbanking, real estate, law and accounting. In Georgia, they included a formerlieutenant governor and a former state senator, even a practicing dentist.

The new syndication businesses typically had earth-friendly names:ForEverGreen, EvrGreen, EcoVest, Webb Creek. They set up websitesfeaturing images of forests, waterfowl, and mountain streams. Their textproclaimed their principals’ deep concern about the fate of the earth. Forexample, Frank Schuler, president of Ornstein-Schuler, among the mostactive promoters, describes a personal epiphany that he says spurred hismove into the conservation easement business after a decade in Atlantacommercial real estate. In an interview, Schuler recalls driving with histoddler son past a large residential development where the site had beenbulldozed. “Every square foot was going to be paved. There were no trees.My son said, ‘Dad, that’s pollution!’” Says Schuler: “The importance ofconserving land for him and future generations really pushed me to thispoint. … That’s why today I’m so passionate about conservation.”

But returns were front and center in marketing pitches. Eco Terra’s website,for example, offered the motto “Be Green, Make Green.” The website for alaw firm that handles easements displayed a chart listing its clients’ high-enddemographics: It said 92.5 percent had a net worth over $10 million. A 2015summary for one fund reported that it was on track to deliver a return of 89percent for the year.

The Land Trust Alliance became alarmed about the growing syndication-easement movement, fearing that it would generate a fresh wave of scandaland Congressional outrage. But syndications also posed a ticklish internalsituation for the Alliance. Some of its members were an essential part of thechain that made the deals possible.

In 2010, Russ Shay, the Alliance’s public policy director, privately urged IRSofficials to crack down on the syndicators through more aggressive actionthan individual audits — perhaps by issuing a public advisory. But the IRSremained silent. (The agency declined to make officials available for on therecord interviews for this article.)

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A bridge crossing at the former MillstoneGolf Course in Greenville, SouthCarolina, whose value rose by a factor ofeight when it was donated as aconservation easement. (Courtesy ofEthos Projects)

To be sure, the agency was auditing dozens of conservation easements; theywere among the most litigated issues in federal tax court. But the case-by-case enforcement had limited impact. And given the years it took to pursue acase, says Shay, the result “is they were solving yesterday’s problem.” Headds, “They did not seem interested in solving the problem of the present —which we told them was much bigger.”

Deep budget cuts left the IRS with limited resources for the costly task ofdisputing an appraisal, which often required hiring outside experts. “The IRSis outgunned,” says Steve Small, the former IRS attorney. “They don’t havethe budget or personnel to audit a fraction of these transactions.”

The IRS also lost some key battles. In one challenge to a $30.6-million golfcourse deduction taken in 2002 — but not resolved until 2009 — thepresiding tax court judge allowed 94 percent of the write-off. Claud Clark III,a folksy Alabamian who had appraised the coastal property and defended thededuction in court, became the syndicators’ star expert. Marketing materialshailed him as the man who beat the IRS.

Promotional documents for syndicated deals always acknowledge the risk ofan IRS audit, which can result in an assessment for back taxes, interest andstiff penalties. Recent Ornstein-Schuler marketing materials, for example,say the firm assumes “all partnerships will be audited,” but that it trusts its“conservative, defensible valuations …” It noted: “As of 3/13/17, approximately11 percent of the partnerships have been audited and none of the valuationshave ever been reduced as a result of an IRS examination or review.”Syndication deals routinely include a six-figure “audit reserve” for battlingthe IRS. A few even offer “audit insurance” to help offset any disallowedwrite-offs.

To many investors, the promise of a fat deduction seems worth the remoteperil of a government audit. “If there’s a day of reckoning,” noted Small, “it’sway, way, way out in the future.”

By 2013, Atlantic CoastConservancy’s “monetized”business was booming. Kelleraccepted 49 easements that year,and established a branch operationin Mobile, Alabama. He beganstaging promotional seminarsaround the Southeast with suchagenda topics as: “Turning anEasement into a Source ofLiquidity” and “Defending the TaxAudit from Examination throughLitigation.”

Keller had also applied for formalaccreditation from the Land Trust Alliance, through a painstaking processthat required him to submit reams of documents and a $12,000 application

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fee. Keller was an Alliance devotee, donating to the organization andfaithfully attending its seminars. He was confident about measuring up to itsrigorous standards. Noted Keller in a website posting: “Obtaining theprestigious Land Trust Alliance seal of accreditation … makes a publicstatement that ‘we do things right!’”

But by this point, the Alliance had issued a memo counseling its members toreject gifts with “grossly inflated appraisals,” regardless of the land’sconservation virtues. As the memo put it, “The public has entrusted us to acton its behalf. Enabling abuse endangers that confidence.”

The Alliance was concerned by the practices described in Keller’sapplication. In an August 13, 2013, call, accreditation commission chairmanLarry Kueter, a Colorado attorney who had reviewed Keller’s submissions,questioned him and his directors about “troubling” appraisals on severaleasements. “In all of the applications when I’ve been on the commission, Ihaven’t asked a question like this before,” Kueter said, according to arecording of the conversation that Keller made and provided to ProPublica.

Almost every easement appraisal he had reviewed, Kueter said, “just showeda really significant, significant increase … within not real long periods oftime. One of these I wouldn’t have thought twice about it. …But here we sawit four or five times. … The pattern was concerning.”

In one transaction, Kueter noted, the valuation soared “from $300,000 to $1.7million in 15 months at the back end of the real estate crisis. And I’m thinkingI would have asked the appraiser … ‘How do you get to that kind of ajudgment?’”

Keller countered that a land trust has no legal obligation to challenge anappraiser’s professional judgment. “Roaming around in the appraisal is notsomething that we do,” explained Keller on the call. “We feel like we’re givingtax advice if we do.”

Keller’s argument was not well-received. “I’m not sure there’s more to talkabout that on this call,” Kueter finally said. The Alliance, he said, believesland trusts have a “duty of inquiry” as part of their obligation to participate in“credible transactions.”

By the end of the conversation, Keller says, it was clear “they were not goingto let us through.” He withdrew his application for accreditation.

This setback, however, didn’t seem to hurt the Atlantic Coast Conservancy’sbusiness, as syndicators rejected by other land trusts brought even moredeals to him. Their easements have protected “gorgeous land,” says Keller.“It turned out to be this wonderful conservation ploy. … For me, as aconservation biologist, this is the best.”

In a typical syndicated deal, the investor partnership has acquired theproperty within the past year or two, presumably from a seller determined toget what it’s worth. How, then, can an appraiser conclude its value hassuddenly multiplied eight or 10 times from what the partnership paid for it?

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Under federal regulations, an appraisal must offer an opinion on the land’sfair market value — the price a knowledgeable buyer would pay aknowledgeable seller when neither is desperate to make a deal. But when itcomes to conservation easements, syndication appraisers typically claimthere are no comparable area sales. So they use a more subjective approach(albeit one that often includes reams of complex projections and reports):They try to estimate what the land would be worth if put to its mostprofitable legal use — as, say, a development of resort homes. Under taxcourt rulings, this transformation is supposed to be “reasonably probable” tooccur in the “reasonably near future” and not rely on “mere speculation andconjecture.”

Based on a skeletal development plan, consulting studies commissioned bythe promoter, and an array of optimistic assumptions, the appraiser thenprojects the development costs and profits for the imagined business. Onsyndicated deals this invariably results in a sky-high valuation — acalculation of what the investors are giving up and can thus claim as adeduction — that makes everyone a hefty profit.

The syndicated easement on the old Millstone Golf Course in South Carolina,donated to the Atlantic Coast Conservancy, illustrates how this works. Theproject was the brainchild of two attorneys, Hank Didier and AndrewSpeaker. The men had formed their company, Ethos, in 2016. This was theirfirst easement deal together. Their partnership would split a few monthsafter the donation was made.

Didier was a Florida personal injury lawyer who had previously started twoother businesses: one represented companies pursuing claims from the BPoil spill; another counseled injury victims on how to cash out on long-termsettlement awards.

Speaker was best known for causing an international uproar in 2007. Then apersonal injury lawyer in Atlanta, he’d defied health officials by traveling toEurope and back after being informed that he’d contracted a highly drug-resistant strain of tuberculosis. The incident prompted congressionalhearings and multiple lawsuits.

The old golf course property, four miles outside of Greenville and renamedRiver West, had been for sale since January 2015. CBRE had marketed it as adevelopment site, approved for 2,136 residential units and 172,500 squarefeet of commercial space, at $5.8 million. When it didn’t sell, the firm cut theasking price to $5.4 million — about $22,000 an acre. That’s when Didier andSpeaker entered the picture. They raised $9.8 million from 52 investors.

The two men hired Claud Clark, who concluded that the property’s mostprofitable use was as a gated community with 1,404 single-family homes.Among the heady assumptions: The home lots would sell for $60,000 apiece,and be gone in six years.

Although the outcome was usually pre-ordained, Ethos, like most syndicatedpromoters, formally offered investors three options: to develop homes on thesite; to hold it for “long-term appreciation”; or to donate 185 acres for aconservation easement. According to Clark’s preliminary appraisal, the

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“conservation option” would justify a $40 million deduction. That’s a value ofmore than $215,000 an acre — almost ten times the price at which the landhad been offered for sale just months earlier. This choice would reward eachof the partnership’s $25,000 investors with a $100,000 federal tax write-off.

Local real estate experts express shock at this valuation. “It wasn’t anythingthat was going to sell,” says Frank Hammond, a Colliers Internationalcommercial broker with 30 years’ experience in the Greenville market. “It’s ina blue-collar service area, with very little in the way of upper-incomedemographics. It’s a rough piece of dirt in an area that isn’t sought after verymuch right now.” A list of comparable sales showed only four tracts of 100 to200 acres that had sold in the area over the past three years. The mostexpensive had brought about $8,400 an acre.

The premise of lofty syndication appraisals is that the promoters havesuddenly discovered something on the land that multiplies its value, or comeup with a sure-fire, highly profitable development idea that no one elsecontemplated. In the real world, experts say, that rarely happens. “Realestate is actually a very efficient market,” says Wentworth, the former chiefof the Land Trust Alliance. “There’s a vast amount of local knowledge aboutwhat a thousand acres of pine trees in central Georgia is worth. People didnot just fall off a turnip truck.”

In an interview, Didier called the old golf course site “a great property” thathad been “completely recaptured by nature” and defended its valuation.“The $40 million is what the value of the property is with the developmenton it,” he said. “I could absolutely build those homes and make a god-awfulamount of money for my investors. If they [had] elected that, we would beready to go.” (Speaker declined comment for this story; Clark didn’t respondto calls.)

Stratospheric valuations for syndicated easements don’t always depend on atheory that a wildly profitable housing development could be sold on thespot. Increasingly, promoters have been declaring high valuations for parcelsof land that sit on top of sand and rock, which they claim could be lucrativelymined.

In the fall of 2015, promoters from ForEverGreen Group, based in Atlanta,contacted Judy Steckler, who runs the Land Trust for the Mississippi CoastalPlain. They had a piece of land they wanted to conserve: 203 acres along thePearl River, near the Louisiana border.

Steckler took a team to inspect the tract. Much of it was covered in cypresspond swamp, prone to flooding, with wetlands habitat. There was also a goodbit of sand, reputed to be of high quality for oil and gas fracking. Theproperty sat inside the boundaries of an operating quarry. Steckler concludedthat the property met her trust’s conservation standards.

She advised ForEverGreen that she was prepared to accept the easement,pending some standard reviews. But days later, Steckler says, a friendforwarded her a private placement memo seeking investors for the deal. Thedocument said the property had an estimated appraised value of $160 million— $786,000 an acre.

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Steckler was gobsmacked. “I’m familiar with what that land sells for,” shesays. “There is no piece of property I know in the Mississippi Gulf Coast inthe six coastal counties that would ever sell for that much.” (A 240-acreparcel nearby had sold just months earlier for $2,125 an acre.) Steckler pulledout of the deal.

There was another land trust that had no problem with the donation: AtlanticCoast Conservancy. Keller says he didn’t care about the size of the write-off,and found the wetlands there interesting. In a detailed email, he said thearea is also the most likely habitat of the storied — but long-unseen — Ivory-billed Woodpecker.

Binders featuring paperwork for easements all over the Southeast in the Atlantic CoastConservancy o�ices in Jasper, Georgia (Melissa Golden for Fortune)

Although an environmental study of the site found “a high percentage of landarea in wetlands”—which would add extra costs for any commercialoperation — mining was the basis for the site’s stratospheric valuation.Investor documents show the appraisal, conducted by star appraiser ClaudClark, relied on two expert studies, which concluded that the land’s mostvaluable use was to mine for fracking sand. (It was not clear why the originallandowners, who were operating the surrounding quarry, wouldn’t want tomine the site themselves.) Nevertheless, in its 2015 tax return, Atlantic CoastConservancy listed the value of the Mississippi land, which was ultimatelydonated as an outright gift rather than as an easement, as $170 million —more than $835,000 an acre.

As time went on, syndicators became more audacious. Some began acquiringlarge tracts of land themselves, then selling it in pieces to investors theyrecruited, who then used it to extract easement deductions. The two-stepprocess had the effect of inflating the values even higher (and letting thesyndicators make money on the sale, too).

In central Florida’s Polk County, for example, entities controlled by Ornstein-Schuler bought the County Line Ranch, a 3,475-acre tract once owned by a

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citrus baron. They then carved it into 20 parcels and began selling them toinvestor partnerships run by Ornstein-Schuler and three other syndicators.Nine separate partnerships, all of them listing their address as a drop box at aLakeland, Florida, UPS store, then donated easements to Keller’s land trustin December 2015. Eleven new partnerships followed a similar pattern in2016.

In a matter of weeks, the land’s value jumped from $3,500 and $6,500 peracre (its listing prices before the syndicators bought the land in two pieces)to about $20,000 an acre (the price at which the syndicators resold it to theirinvestors) to more than $200,000 an acre (the claimed easement deduction).Once all that was accomplished, most of the partnerships gave away theland, earning one final, much smaller, deduction on its residual value.

The valuations defy common sense, say mining experts, who rejected thestated claims that the parcels could each be developed into highly profitablelimestone mines. Dean Saunders, a commercial broker who listed the CountyLine Ranch for years, says a previous owner tried to sell it in 2008 as apotential mining site for $10,000 an acre, but found no takers. He “realizedthe economics didn’t justify trying to mine,” says Saunders. He calls the$200,000 per acre appraisal “a farce and a travesty and an abuse of thesystem.” (Schuler defends the transaction, saying his company relied on“qualified, independent experts” who concluded that “profitable limestonemining operations were feasible.”)

For his part, Keller calls it a “heck of a project.” He says the area’s avian andamphibian diversity is “amazing” and that the land will also help protect theendangered Florida grasshopper sparrow. “If I can provide habitat for that. …I think I’m doing a heck of a good job.”

As Keller’s syndication business mushroomed, so did his conflict with theLand Trust Alliance. Keller blamed the group for growing aversion to thepromoters within the conservation community. In 2014, Keller heardscuttlebutt that Heather Benham of the Athens Land Trust had voicedqualms about syndication at a public forum. He shot her an email seeking“any and all” correspondence with the Land Trust Alliance on the issue.Keller also blamed the Alliance for Judy Steckler’s decision to pull out of theForEverGreen deal. (Steckler says it played no role.)

In 2015, Keller tried to convince Chuck Roe, a former Land Trust Allianceexecutive who he’d hired as a consultant, to launch a rival trade association.Roe declined. He says he recognized that it would be an advocate forsyndications, which he calls “horrifying.”

By the end of the year, Congress once again addressed easements. The 2006law that expanded the deduction had actually been temporary and had beenrenewed periodically since then. But in December 2015, even as concernmounted about syndications, Congress decided to make the enhanceddeduction permanent.

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In August 2016, the Land Trust Alliance officially barred all accredited landtrusts — and later, all of its members — from accepting syndicatedeasements. It urged avoidance of deals that are managed by a paid promoter,involve land acquired within the past 36 months, and claim deductions ofmore than 2.5 times the property’s acquisition cost.

The Alliance’s position forced land trusts to choose sides. In 2016, theGeorgia-Alabama Land Trust, an accredited and influential group which hadpreviously accepted syndicated deals, broke off discussions to acceptanother from a previous donor. Keller accepted the easement instead.

Keller dismisses concerns about “hyper-inflated” easement values, declaringit “something the Land Trust Alliance made up” as part of a “smearcampaign.” He says he knows the promoters bringing him easements are “inthis for the money,” but he says his mission is to conserve land. “At the end ofthe day,” he says, “I don’t care if they get their tax benefit or not.”

Last December, the IRS finally took a more systematic step. The agencyissued a formal notice branding virtually all profit-making syndicated dealsas abusive. Anyone who had served as a promoter or material advisor on anydeal dating back to January 2010 was required to file special forms, allowingthe IRS to red-flag and scrutinize the transactions. This was intended todeter such deals and to lay the groundwork for future punitive action. TheIRS has “listed” just two such tax-avoidance transactions since 2009.

Under most circumstances, such a move by the IRS would have sent a jolt offear through anybody contemplating a syndicated easement. But thesyndicators were not inclined to back down.

Instead, they marshaled their resources and girded for a fight. A few monthsbefore, Frank Schuler had formed the rival advocacy group Keller hadcontemplated, calling it the Partnership for Conservation (“permanentlyconserving important lands in the U.S.”). It has spent $650,000 on lobbyistssince its inception. EcoVest Capital — the single most prolific syndicator —has invested another $1.13 million on lobbyists. Those riches bought theservices of top-tier advocates, such as former deputy Treasury SecretaryStuart Eizenstat.

In the months that followed, the industry persuaded Georgia congressmanTom Graves, whose district includes the syndication hotbed of Rome, to slipa rider into the federal appropriations bill that would bar the IRS fromspending money to enforce the listing notice. (A spokesperson for Graves saidvia email that constituents had expressed concerns that the IRS notice wouldhave a “chilling effect” on conservation.) The provision passed in the Housebut has not been voted on yet in the Senate.

The next legislative volley, months later, came from the traditionalists: InNovember, two representatives introduced a separate bill to killsyndications.

In the final months of 2017, all attention turned to the tax bill, which becamethe ultimate field of battle for all tax matters. Again, the syndicators

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emerged unscathed — the easement rules were untouched — and it doesn’tappear to have been a close call.

The anti-syndications contingent may still ultimately prevail. Yet every timethe issue has reached Congress so far, the result has been to preserve orstrengthen the deduction. It might not quite qualify as the cockroach of thetax code — the provision that survives every calamity — but it will take a lotto kill it.

Filed under: Environment <https://www.propublica.org/topics/environment>

Peter ElkindPeter Elkind is a senior reporter covering the Trump administration.

Thousands of Investors Got Big Tax Breaks

for Land-Rights Donations, IRS Finds

Lawmakers scrutinize syndicated conservation easements that let people profit quickly

By Richard Rubin

March 14, 2018 2:56 p.m. ET

WASHINGTON — More than 15,000 investors have participated in certain tax deals involving charitable

contributions of land rights, according to new IRS data that was given to lawmakers who are scrutinizing

the practice, which is estimated to cost the government more than $1 billion in revenue annually.

The data provide the clearest big-picture look yet at the opaque world of syndicated conservation

easements, transactions giving some investors tax breaks worth more than the amount they originally

invested in the property. In late 2016, the Internal Revenue Service began requiring participants and

advisers to alert the agency to the transactions to aid in determining who should be audited.

The new data, provided to senators and reviewed by The Wall Street Journal, come from the first wave

of those disclosures. The reports show 552 separate transactions covering several years and exceeding

previous estimates. The Brookings Institution has estimated that the total revenue loss from syndicated

easement deals was between $1.3 billion and $2.4 billion in 2016.

The total value of claimed deductions over several years was $230 billion, far beyond previous

estimates. That figure itself may be significantly overstated, with the same deduction appearing on

disclosures from multiple entities that were required to file forms with the IRS, and the IRS document

notes that it hasn’t been verified as accurate.

“What started as a critical tool for land preservation has been systematically exploited by bad actors

peddling tax shelters to the highest bidder,” said Sen. Ron Wyden of Oregon, the top Democrat on the

Senate Finance Committee, who is asking the IRS for further analysis. “Congress must act swiftly to

protect the integrity of the conservation easement program. American taxpayers could be on the hook

for billions and billions of dollars.”

Under U.S. law, land owners can donate the development rights to their property to land trusts, other

charities or governments. For example, a farmer with a $5 million piece of land in a fast-growing area

can place an easement on the property that restricts development. By donating the easement to a

charity and getting an appraisal, the farmer could show that the land’s value has diminished by $3

million and thus can claim that amount as a deduction.

That is relatively noncontroversial in Congress, though the break skews to wealthier households.

President Donald Trump has used this type of deal in at least four states.

The syndicates that popped up in recent years, however, are more aggressive, and more controversial,

because they can let people profit quickly from tax breaks. They have also led to a rift in the

conservation world, with more established land trusts worrying that more aggressive deals undermine

support for conservation easements more broadly.

In a syndicated easement, the organizer recruits investors who buy a piece of a partnership. The

organizer identifies property, buys it, makes the donation and then parcels out the deduction. The

syndicated deals are particularly popular in the Southeast, and their backers say they efficiently promote

conservation by getting tax deductions to people who have the income to use them.

The key, critics say, is often an inflated and unrealistic appraisal and a relatively small network of

advisers and charities supporting the transactions. The disclosures identified just 38 appraisers involved

in the 552 deals.

The IRS’s 2016 requirement forced advisers and taxpayers to disclose transactions where the value of

the deduction was at least 2.5 times the investment, roughly the point where the tax deduction exceeds

the original investment for many taxpayers.

The average deduction was 4.07 times the investment, with some exceeding seven times the

investment, according to the IRS data.

The IRS, which frequently challenges ordinary and syndicated easements, can then use the information

in audits. Failure to disclose carries penalties of up to $200,000.

Sens. Steve Daines (R., Mont.) and Debbie Stabenow (D., Mich.) introduced a bill last month that would

deny the tax break when the deduction-to-investment ratio exceeds 2.5. Mr. Wyden backed that bill on

Wednesday and Reps. Mike Thompson (D., Calif.) and Mike Kelly (R., Pa.) have a companion House bill.

Andrew Bowman, president of the Land Trust Alliance, which represents more established conservation

groups, said there’s no reason to wait. “And every day that Congress does wait, what this shows is the

taxpayers are going to be bilked out of millions, if not billions, of dollars,” he said.

But the syndicators have also gotten more active in Washington, ramping up their lobbying and

campaign contributions.

The group arguing against the proposed changes, the Partnership for Conservation, said the IRS report

doesn’t consider the benefits from land conservation. It said the $230 billion figure is “demonstrably

false” when compared with previous IRS data on noncash donations.

“The swirl of disinformation is being used to promote bad policy that will protect the interests of

billionaires, limit the participation of everyday Americans in conservation and ultimately lead to less

land being conserved,” said Randy Bampfield, co-chair of the group’s legal committee.

COMMISSION ON ACT 250: THE NEXT 50 YEARS

Rep. Amy Sheldon, Chair

Sen. Christopher A. Pearson, Vice Chair

Sen. Brian Campion

Rep. David L. Deen

Rep. Paul Lefebvre

Sen. Dick McCormack

Faith Brown, Committee Assistant

(802) 828-2279

fbrown@leg.state.vt.us

Aaron Adler, Legislative Counsel

(802) 828-2236

aadler@leg.state.vt.us

Office of Legislative Counsel

115 State Street

Montpelier, Vermont 05602

(802) 828-2231

No. 47 Page 1 of 17

2017

VT LEG #325996 v.1

No. 47. An act relating to the Commission on Act 250: the Next 50 Years.

(H.424)

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. FINDINGS; PURPOSE

(a) Findings. The General Assembly finds as follows:

(1) In 1969, Governor Deane Davis by executive order created the

Governor’s Commission on Environmental Control, which consisted of

17 members and became known as the Gibb Commission because it was

chaired by Representative Arthur Gibb.

(2) The Gibb Commission’s recommendations, submitted in 1970,

included a new State system for reviewing and controlling plans for large-scale

and environmentally sensitive development. The system was not to be

centered in Montpelier. Instead, the power to review projects and grant

permits would be vested more locally, in commissions for districts within the

State.

(3) In 1970, the General Assembly enacted 1970 Acts and Resolves

No. 250, an act to create an environmental board and district environmental

commissions. This act is now codified at 10 V.S.A. chapter 151 and is

commonly known as Act 250. In Sec. 1 of Act 250 (the Findings), the General

Assembly found that:

(A) “the unplanned, uncoordinated and uncontrolled use of the lands

and the environment of the state of Vermont has resulted in usages of the lands

No. 47 Page 2 of 17

2017

VT LEG #325996 v.1

and the environment which may be destructive to the environment and which

are not suitable to the demands and needs of the people of the state of

Vermont”;

(B) “a comprehensive state capability and development plan and land

use plan are necessary to provide guidelines for utilization of the lands and

environment of the state of Vermont and to define the goals to be achieved

through land environmental use, planning and control”;

(C) “it is necessary to establish an environmental board and district

environmental commissions and vest them with the authority to regulate the

use of the lands and the environment of the state according to the guidelines

and goals set forth in the state comprehensive capability and development plan

and to give these commissions the authority to enforce the regulations and

controls”; and

(D) “it is necessary to regulate and control the utilization and usages

of lands and the environment to insure that, hereafter, the only usages which

will be permitted are not unduly detrimental to the environment, will promote

the general welfare through orderly growth and development and are suitable

to the demands and needs of the people of this state.”

(4) In 1973 Acts and Resolves No. 85, Secs. 6 and 7, the General

Assembly adopted the Capability and Development Plan (the Plan) called for

by Act 250. Among the Plan’s objectives are:

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(A) “Preservation of the agricultural and forest productivity of the

land, and the economic viability of agricultural units, conservation of the

recreational opportunity afforded by the state’s hills, forests, streams and lakes,

wise use of the state’s non-renewable earth and mineral reserves, and

protection of the beauty of the landscape are matters of public good. Uses

which threaten or significantly inhibit these resources should be permitted only

when the public interest is clearly benefited thereby.”

(B) “Increased demands for and costs of public services, such as

schools, road maintenance, and fire and police protection must be considered

in relation to available tax revenues and reasonable public and private capital

investment. . . . Accordingly, conditions may be imposed upon the rate and

location of development in order to control its impact upon the community.”

(C) “Strip development along highways and scattered residential

development not related to community centers cause increased cost of

government, congestion of highways, the loss of prime agricultural lands,

overtaxing of town roads and services and economic or social decline in the

traditional community center.”

(D) “Provision should be made for the renovation of village and town

centers for commercial and industrial development, where feasible, and

location of residential and other development off the main highways near the

village center on land which is other than primary agricultural soil.”

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(E) “In order to achieve a strong economy that provides satisfying

and rewarding job and investment opportunities and sufficient income to meet

the needs and aspirations of the citizens of Vermont, economic development

should be pursued selectively so as to provide maximum economic benefit

with minimal environmental impact.”

(b) Purpose. The General Assembly establishes a Commission on Act 250:

the Next 50 Years (the Commission) and intends that the Commission review

the vision for Act 250 adopted in the 1970s and its implementation with the

objective of ensuring that, over the next 50 years, Act 250 supports Vermont’s

economic, environmental, and land use planning goals.

(c) Executive Branch working group. Contemporaneously with the

consideration of this act by the General Assembly, the Chair of the Natural

Resources Board (NRB) has convened a working group on Act 250 to include

the NRB and the Agencies of Commerce and Community Development and of

Natural Resources, with assistance from the Agencies of Agriculture, Food and

Markets and of Transportation. The working group intends to make

recommendations during October 2017. The General Assembly intends that

the Commission established by this act receive and consider information and

recommendations offered by the working group convened by the Chair of the

NRB.

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Sec. 2. COMMISSION ON ACT 250: THE NEXT 50 YEARS; REPORT

(a) Establishment. There is established the Commission on Act 250: the

Next 50 Years (the Commission) to:

(1) Review the goals of Act 250, including the findings set forth in 1970

Acts and Resolves No. 250, Sec. 1 (the Findings) and the Capability and

Development Plan adopted in 1973 Acts and Resolves No. 85, Secs. 6 and 7

(the Plan), and assess, to the extent feasible, the positive and negative

outcomes of Act 250’s implementation from 1970 to 2017. This review shall

include consideration of the information, statistics, and recommendations

described in subdivision (d)(1)(B) of this section.

(2) Engage Vermonters on their priorities for the future of the Vermont

landscape, including how to maintain Vermont’s environment and sense of

place, and address relevant issues that have emerged since 1970.

(3) Perform the tasks and the review set forth in subsection (e) of this

section and submit a report with recommended changes to Act 250 to achieve

the goals stated in the Findings and the Plan, including any suggested revisions

to the Plan.

(b) Membership; officers.

(1) The Commission shall be composed of the following six members:

(A) three members of the House of Representatives, not all from the

same party, appointed by the Speaker of the House; and

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(B) three members of the Senate, not all from the same party,

appointed by the Committee on Committees.

(2) At its first meeting, the Commission shall elect a Chair and Vice

Chair. The Vice Chair shall function as Chair in the Chair’s absence.

(c) Advisors. Advisors to the Commission shall be appointed as set forth in

this subsection. The advisors are referred to collectively as the “Act 250

Advisors.” The Commission may seek assistance from additional persons or

organizations with expertise relevant to the Commission’s charge.

(1) The advisors may attend and participate in Commission meetings

and shall have the opportunity to present information and recommendations to

the Commission. The Commission shall notify the advisors of each

Commission meeting.

(2) The advisors to the Commission shall be:

(A) the Chair of the Natural Resources Board or designee;

(B) a representative of a Vermont-based, statewide environmental

organization that has a focus on land use and significant experience in the Act

250 process, appointed by the Committee on Committees;

(C) a person with expertise in environmental science affiliated with a

Vermont college or university, appointed by the Speaker of the House;

(D) a representative of the Vermont Association of Planning and

Development Agencies, appointed by the Speaker of the House;

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(E) a representative of the Vermont Planners Association, appointed

by the Committee on Committees;

(F) a representative of a Vermont-based business organization with

significant experience in real estate development and land use permitting,

including Act 250, appointed by the Committee on Committees;

(G) a person currently serving or who formerly served in the position

of an elected officer of a Vermont city or town, appointed by the Vermont

League of Cities and Towns;

(H) the Chair of the Environmental Law Section of the Vermont Bar

Association;

(I) each of the following or their designees:

(i) the Secretary of Agriculture, Food and Markets;

(ii) the Secretary of Commerce and Community Development;

(iii) the Secretary of Natural Resources; and

(iv) the Secretary of Transportation; and

(J) a current or former district coordinator or district commissioner,

appointed by the Chair of the Natural Resources Board.

(3) The Commission and the Chair of the Natural Resources Board each

may appoint one advisor in addition to the advisors set forth in subdivision

(c)(2) of this section.

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(4) Each appointing authority for an advisor to the Commission shall

promptly notify the Office of Legislative Council of the appointment when

made.

(d) Meetings; phases. The Commission shall meet as needed to perform its

tasks and shall conduct three phases of meetings: a preliminary meeting phase,

a public discussion phase, and a deliberation and report preparation phase. The

initial meeting shall be part of the preliminary meeting phase, convened by the

Office of Legislative Council during September 2017 after notice to the

Commission members and the Act 250 Advisors. Subsequent Commission

meetings shall be at the call of the Chair or of any three members of the

Commission.

(1) Preliminary meeting phase.

(A) The preliminary meeting phase shall include the initial meeting

of the Commission and such additional meetings as may be scheduled.

(B) During the preliminary meeting phase, the Commission shall

become informed on the history, provisions, and implementation of Act 250,

including its current permitting and appeals processes. This phase shall

include:

(i) Review of available information on the outcomes of Act 250

from 1970 to 2017, including case studies and analyses. When information

relevant to this review does not exist, the Commission may request its

preparation.

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(ii) Review of the history and implementation of land use planning

in Vermont, including municipal and regional planning under 24 V.S.A.

chapter 117.

(iii) Receipt of the information and recommendations of the

working group described in Sec. 1(c) of this act;

(iv) Information prepared by the Natural Resources Board on:

(I) the Act 250 application process;

(II) coordination of the Act 250 program with the Agencies of

Agriculture, Food and Markets, of Commerce and Community Development,

of Natural Resources, and of Transportation;

(III) over multiple years, application processing times by

district, number of appeals of application decisions and time to resolve, and

number of appeals of jurisdictional opinions and time to resolve; and

(IV) an overview of the history of the Natural Resources Board.

(v) Opportunity for the Act 250 Advisors to present relevant

information.

(2) Public discussion phase. Following the preliminary meeting phase,

the Commission, with assistance from the Act 250 Advisors, shall conduct a

series of informational and interactive meetings on 2070: A Vision for

Vermont’s Future.

(A) The purpose of this phase shall be to accomplish the public

engagement set forth in subdivision (a)(2) of this section.

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(B) The Commission shall conduct this phase during adjournment of

the General Assembly.

(3) Deliberation and report preparation phase. Following completion of

the public meeting phase, the Commission shall meet to perform the tasks set

forth in subsection (e) of this section and deliberate and prepare its written

report and recommendations, with assistance from the Act 250 Advisors.

(e) Tasks; report and recommendations. After considering the information

from its public discussion meetings and consultation with the Act 250

Advisors, the Commission shall perform the tasks set forth in this subsection

and submit its report, including:

(1) A statistical analysis based on available data on Vermont

environmental and land use permitting in general and on Act 250 permit

processing specifically, produced in collaboration with municipal, regional,

and State planners and regulatory agencies.

(2) Review and recommendations related to:

(A) An evaluation of the degree to which Act 250 has been

successful or unsuccessful in meeting the goals set forth in the Findings and

the Plan.

(B) An evaluation of whether revisions should be made to the Plan.

(C) An examination of the criteria and jurisdiction of Act 250,

including:

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(i) Whether the criteria reflect current science and adequately

address climate change and other environmental issues that have emerged

since 1970. On climate change, the Commission shall seek to understand,

within the context of the criteria of Act 250, the impacts of climate change on

infrastructure, development, and recreation within the State, and methods to

incorporate strategies that reduce greenhouse gas emissions.

(ii) Whether the criteria support development in areas designated

under 24 V.S.A. chapter 76A, and preserve rural areas, farms, and forests

outside those areas.

(iii) Whether the criteria support natural resources, working lands,

farms, agricultural soils, and forests in a healthy ecosystem protected from

fragmentation and loss of wildlife corridors.

(iv) Whether Act 250 promotes compact centers of mixed use and

residential development surrounded by rural lands.

(v) Whether Act 250 applies to the type and scale of development

that provides adequate protection for important natural resources as defined in

24 V.S.A. § 2791.

(vi) Whether the exemptions from Act 250 jurisdiction further or

detract from achieving the goals set forth in the Findings and the Plan,

including the exemptions for farming and for energy projects.

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(D) An examination of changes that have occurred since 1970 that

may affect Act 250, such as changes in demographics and patterns and

structures of business ownership.

(E) An examination of the interface between Act 250 and other

current permit processes at the local and State levels and opportunities to

consolidate and reduce duplication. This examination shall include

consideration of the relationship of the scope, criteria, and procedures of Act

250 with the scope, criteria, and procedures of Agency of Natural Resources

permitting, municipal and regional land use planning and regulation, and

designation under 24 V.S.A. chapter 76A.

(F) An evaluation of how well the Act 250 application, review, and

appeals processes are serving Vermonters and the State’s environment and

how they can be improved, including consideration of:

(i) Public participation before the District Environmental

Commissions and in the appeals process, including party status.

(ii) The structure of the Natural Resources Board.

(iii) De novo or on the record appeals.

(iv) Comparison of the history and structure of the former

Environmental Board appeals process with the current process before the

Environmental Division of the Superior Court.

(v) Other appellate structures.

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(G) The following specific considerations:

(i) Circumstances under which land might be released from Act

250 jurisdiction.

(ii) Potential revisions to Act 250’s definitions of development

and subdivision for ways to better achieve the goals of Act 250, including the

ability to protect forest blocks and habitat connectivity.

(iii) The scope of Act 250’s jurisdiction over projects on

ridgelines, including its ability to protect ridgelines that are lower than 2,500

feet, and projects on ridgelines that are expressly exempted from Act 250.

(iv) Potential jurisdictional solutions for projects that overlap

between towns with and without both permanent zoning and subdivision

bylaws.

(v) The potential of a person that obtains party status to offer to

withdraw the person’s opposition or appeal in return for payment or other

consideration that is unrelated to addressing the impacts of the relevant project

under the Act 250 criteria.

(H) Such other issues related to Act 250 as the Commission may

consider significant.

(f) Due date. On or before December 15, 2018, the Commission shall

submit its report and recommendations to the House Committee on Natural

Resources, Fish and Wildlife and the Senate Committee on Natural Resources

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and Energy (the Natural Resource Committees). The report shall attach the

Commission’s proposed legislation.

(g) Assistance.

(1) The Office of Legislative Council shall provide administrative and

legal assistance to the Commission, including the scheduling of meetings and

the preparation of recommended legislation. The Joint Fiscal Office shall

provide assistance to the Commission with respect to fiscal and statistical

analysis.

(2) The Commission shall be entitled to technical and professional

services from the Natural Resources Board and the Agencies of Commerce and

Community Development, of Natural Resources, and of Transportation.

(3) On request, the Commission shall be entitled to available statistics

and data from municipalities, regional planning commissions, and State

agencies on land use and environmental permit processing and decisions.

(4) On request, the Commission shall be entitled to data from the

Superior Court on appeals before the Environmental Division from decisions

under Act 250, including annual numbers of appeals, length of time, and

disposition.

(h) Subcommittees. The Commission may appoint members of the

Commission to subcommittees to which it assigns tasks related to specific

issues within the Commission’s charge and may request one or more of the Act

250 Advisors to assist those subcommittees.

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(i) Reimbursement.

(A) For attendance at no more than 10 Commission meetings during

adjournment of the General Assembly, legislative members of the Commission

shall be entitled to per diem compensation and reimbursement of expenses

pursuant to 2 V.S.A. § 406.

(B) There shall be no reimbursement for attendance at subcommittee

meetings or more than 10 Commission meetings.

(j) Cessation. The Commission shall cease to exist on February 15, 2019.

Sec. 3. ASSISTANCE; PUBLIC ENGAGEMENT

If requested by the Commission established under Sec. 2 of this act, the

Office of Legislative Council may retain professional assistance in the design

and conduct of the public discussion phase set forth in Sec. 2(d)(2) of this act,

provided the cost of this assistance does not exceed $20,000.00.

Sec. 3a. ADDITIONAL AUTHORIZED USE; PUBLIC TRUST LANDS

(a) The General Assembly finds that:

(1) the General Assembly has the authority to authorize public uses of

filled public trust lands in the City of Burlington; and

(2) the use of the filled public trust lands in the City of Burlington

authorized by this act is consistent with the public trust doctrine.

(b) In addition to the uses authorized by the General Assembly in 1990

Acts and Resolves No. 274, 1991 Acts and Resolves No. 53, 1996 Acts and

Resolves No. 87, and 1997 Acts and Resolves No. 22, the filled public trust

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lands within the City of Burlington that are located north of the centerline of

Maple Street extending north to the northern terminus of the Lake Street

extension completed in 2016 and that extend to the waters of Lake Champlain

may be utilized for public markets that benefit Vermont’s public and are

available to the public on an open and nondiscriminatory basis.

(c) Any use authorized under this act is subject to all applicable

requirements of law.

Sec. 3b. 10 V.S.A. § 6607a(g)(1) is amended to read:

(g)(1) Except as set forth in subdivisions (2), (3), and (4) of this subsection,

a commercial hauler that offers the collection of municipal solid waste shall:

(A) Beginning on July 1, 2015, offer to collect mandated recyclables

separated from other solid waste and deliver mandated recyclables to a facility

maintained and operated for the management and recycling of mandated

recyclables.

(B) Beginning on July 1, 2016, offer to collect leaf and yard residuals

separate from other solid waste and deliver leaf and yard residuals to a location

that manages leaf and yard residuals in a manner consistent with the priority

uses established under subdivisions 6605k(a)(3)-(5) of this title.

(C) Beginning on July 1, 2017 2018, offer collection of food

residuals separate from other solid waste and deliver to a location that manages

food residuals in a manner consistent with the priority uses established under

subdivisions 6605k(a)(2)-(5) of this title.

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Sec. 4. EFFECTIVE DATE

This act shall take effect on passage.

Date Governor signed bill: May 23, 2017

VT LEG #327387 v.1

115 STATE STREET

MONTPELIER, VT 05633

TEL: (802) 828-2228

FAX: (802) 828-2424

REP. DAVID L. DEEN

REP. PAUL LEFEBVRE REP. AMY SHELDON

SEN. BRIAN CAMPION

SEN. DICK MCCORMACK

SEN. CHRISTOPHER A. PEARSON

STATE OF VERMONT

General Assembly

Commission on Act 250: the Next 50

Years

LIST OF ADVISORS

The Chair of the Natural Resources Board (NRB) or designee: Diane Snelling

A representative of a Vermont-based, statewide environmental organization: Brian Shupe, Vermont

Natural Resources Council

A person with expertise in environmental science: William Keeton, University of Vermont

A representative of the Vermont Association of Planning and Development Agencies: Peter Gregory,

Two Rivers-Ottaquechee Regional Planning Commission

A representative of the Vermont Planners Association: Sharon Murray, Front Porch Community

Planning

A representative of a Vermont-based business organization: Ernest A. Pomerleau, Pomerleau Real

Estate

A person currently serving or who formerly served in the position of an elected officer of a Vermont city

or town: Karen Horn, former member, Moretown School Board

The Chair of the Environmental Law Section of the Vermont Bar Association: Gerald R. Tarrant, Esq.

The Secretary of Agriculture, Food and Markets or designee: Diane Bothfeld (designee)

The Secretary of Commerce and Community Development or designee: Michael Schirling

The Secretary of Natural Resources or designee: Julie Moore

The Secretary of Transportation or designee: Joe Flynn

A current or former district coordinator or district commissioner: Tom Little, Chair, District No. 4

Environmental Commission

Additional advisor appointed by the Commission on Act 250: To be determined

Additional advisor appointed by the Chair of the NRB: Elizabeth Courtney

Commision on Act 250: Sub-Committees Commissioners Advisors Organization

Fragmentation and Settlement

Patterns Forest and habitat fragmentation issues; settlement pattern issues such as

supporting designated centers; ridgelines; protection of natural resources

Rep. Lefebvre Peter Gregory Two Rivers-Ottaquechee Regional Planning

Commission

Daniel Dutcher Vt Agency of Transportation

Karen Horn Vt League of Cities and Towns

Stephanie Smith Vt Agency of Agriculture

Brian Shupe Vt Natural Resources Council

Sharon Murray Vt Planners Association

Donna Barlow Casey Vt Natural Resources Board

Billy Coster Vt Agency of Natural Resources

Elizabeth Courtney

Climate Change Potential changes to Act 250 to address climate change; ability to address

today

Sen. McCormack Daniel Dutcher

Vt Agency of Transportation

Johanna Miller Vt Natural Resources Council

Peg Elmer Hough Vt Planners Association

Billy Coster Vt Agency of Natural Resources

Water Quality

Water quality issues facing Vermont and ways Act 250 can help address;

evaluation of how well Act 250 currently addresses; science basis for existing

Act 250 criteria on water quality

Rep. Deen and Sen.

Campion

Peter Gregory Two Rivers-Ottaquechee Regional Planning

Commission

Karen Horn Vt League of Cities and Towns

Laura Dipietro Vt Agency of Agriculture

Brian Shupe Vt Natural Resources Council

Seth Jensen Vt Planners Association

Diane Snelling Vt Natural Resources Board

Billy Coster Vt Agency of Natural Resources

Appeals and Structure Public participation; structure of NRB; de novo v. on the record; administrative

or judicial appeal

Sen. Pearson Gerry Tarrant Environmental Law Section of the Vt Bar

Association

Tom Little

District 44 Environmental Commission

Brian Shupe Vt Natural Resources Council

Jeff Guevin Vt Planners Association

Greg Boulbol Vt Natural Resources Board

Billy Coster Vt Agency of Natural Resources

Dale Azaria Agency of Commerce and Community

Development

Jurisdiction and Exemptions

Exemptions for farming and Section 248 projects; resource-based jurisdiction;

releasing projects from jurisdiction

Sen Campion and Rep.

Lefebvre

Gerry Tarrant Environmental Law Section of the Vt Bar

Association

Karen Horn Vt League of Cities and Towns

Diane Bothfeld Vt Agency of Agriculture

Brian Shupe Vt Natural Resources Council

Regina Mahony Vt Planners Association

Peter Gill Vt Natural Resources Board

Billy Coster Vt Agency of Natural Resources

Chris Cochran Agency of Commerce and Community

Development

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

1

STATE OF VERMONT

AGENCY OF NATURAL RESOURCES

DEPARTMENT OF ENVIRONMENTAL CONSERVATION

UNIFORM ENVIRONMENTAL

ADMINISTRATIVE PROCEDURE AND

STANDARD PROCESSES FOR NOTICE AND

COMMENT ON ENVIRONMENTAL PERMITS

Final Proposed Rule

May 29, 2018

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

2

Table of Contents SUBCHAPTER 1. GENERAL PROVISIONS ............................................................................ 4

§ 37-101. AUTHORITY AND PURPOSE ........................................................................................... 4

§ 37-102. SEVERABILITY ................................................................................................................. 4

SUBCHAPTER 2. DEFINITIONS ................................................................................................. 5

§ 37-201. DEFINITIONS ................................................................................................................... 5

SUBCHAPTER 3. UNIFORM ENVIRONMENTAL ADMINISTRATIVE

PROCEDURE 9

§ 37-301. PETITIONS FOR RULEMAKING OR ADOPTION OF PROCEDURES.............................. 9

§ 37-302. PROCEDURES AND GUIDANCE DOCUMENTS ............................................................ 10

§ 37-303. ADMINISTRATIVE CONTINUATION OF PERMITS ...................................................... 10

§ 37-304. VESTING OF RIGHTS IN A STATUTE OR RULE ADMINISTERED BY THE AGENCY

OF NATURAL RESOURCES ................................................................................................................... 10

SUBCHAPTER 4. CONTESTED CASE PROCEEDINGS .................................................. 12

§ 37-401. APPLICABILITY ............................................................................................................. 12

§ 37-402. HEARING OFFICER. ...................................................................................................... 12

§ 37-403. EX PARTE COMMUNICATIONS. ................................................................................... 12

§ 37-404. INITIATION OF PROCEEDING AND ENTRY OF APPEARANCE .................................. 13

§ 37-405. INITIAL CONFERENCE AND SCHEDULING ORDER................................................... 15

§ 37-406. DOCUMENTS AND SERVICE ......................................................................................... 16

§ 37-407. EVIDENCE AND PREFILED TESTIMONY .................................................................... 17

§ 37-408. HEARING ........................................................................................................................ 17

§ 37-409. PROCEEDING RECORD ................................................................................................. 18

§ 37-410. DECISIONS AND ORDERS ............................................................................................. 18

§ 37-411. EMERGENCY PROCEEDINGS. ...................................................................................... 19

SUBCHAPTER 5. STANDARD PROCEDURES FOR PERMIT PROCESSING....... 20

§ 37-501. PURPOSE. ....................................................................................................................... 20

§ 37-502. COMPUTATION OF TIME .............................................................................................. 20

§ 37-503. ENVIRONMENTAL NOTICE BULLETIN. ...................................................................... 20

§ 37-504. TYPE 1 PROCEDURES ................................................................................................... 22

§ 37-505. TYPE 2 PROCEDURES ................................................................................................... 25

§ 37-506. TYPE 3 PROCEDURES ................................................................................................... 27

§ 37-507. TYPE 4 PROCEDURES ................................................................................................... 29

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

3

§ 37-508. TYPE 5 PROCEDURES ................................................................................................... 30

§ 37-509. AMENDMENTS; RENEWALS ......................................................................................... 31

§ 37-510. PRE-APPLICATION PUBLIC INFORMATIONAL MEETING ........................................ 31

§ 37-511. ADDITIONAL NOTICE. .................................................................................................. 32

§ 37-512. EXTENSION OF DEADLINES. ....................................................................................... 33

§ 37-513. ADMINISTRATIVE RECORD.......................................................................................... 33

APPENDIX A – ANR PERMITS AND PUBLIC NOTICE TYPE ......................................... 34

APPENDIX B – LARGE AND COMPLEX PROJECTS .......................................................... 43

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

4

SUBCHAPTER 1. GENERAL PROVISIONS

§ 37-101. AUTHORITY AND PURPOSE

(a) Authority. This rule is adopted by the Secretary of the Agency of Natural

Resources pursuant to the authority granted by 3 V.S.A. § 847(e) and 10

V.S.A. §§ 7703 (standard procedures for environmental permitting).

(b) Purpose. This rule is intended to:

(1) Provide uniform standards for the implementation of 3 V.S.A. Chapter

25 (the Vermont Administrative Procedures Act) within the

Department of Environmental Conservation.

(2) Implement the requirements of 10 V.S.A. Chapter 170 (Standard

Procedures for notice and comment on environmental permits) within

the Department of Environmental Conservation.

§ 37-102. SEVERABILITY

The provisions of any section of this rule are severable. If a court of

competent jurisdiction finds that any provision of this rule is invalid or any

application of this rule to any person or circumstance is invalid, the invalidity

shall not affect other provisions or applications that can be given effect

without the invalid provision or application.

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

5

SUBCHAPTER 2. DEFINITIONS

§ 37-201. DEFINITIONS

As used in this rule,

(1) “Adjoining property owner” means a person who owns land in fee

simple, if that land:

(A) shares a property boundary with a tract of land where

proposed or actual activity regulated by the Department is

located. With respect to activities proposed or taking place

on a lake shoreline, “ adjoining property owner” means

tracts of land on the terrestrial boundary of the shoreland;

or

(B) is adjacent to a tract of land where such activity is located

and the two properties are separated only by a river,

stream, or public highway.

(2) “Administrative amendment” means an amendment to an

individual permit, general permit, or notice of intent under a

general permit that corrects typographical errors, changes the

name or mailing address of a permittee, or makes other similar

changes to a permit that do not require technical review of the

permitted activity or the imposition of new conditions or

requirements.

(3) “Administrative record” means the application and any

supporting data and information furnished by the applicant; all

information submitted by the applicant during the course of

reviewing the application; the draft permit or notice of intent to

deny the application; the fact sheet and all documents cited in the

fact sheet, if applicable; all comments received during the public

comment period; the recording or transcript of any public meeting

or meetings held; any written material submitted at a public

meeting; the response to comments; the final permit; any

document used as a basis for the final decision; and any other

documents contained in the permit file.

(4) “Administratively complete application” means an application for

a permit or notice of intent under a general permit for which all

initially required documentation has been submitted, and any

required permit fee, and the information submitted initially

addresses all application requirements but has not yet been

subjected to a complete technical review. For purposes of a

general permit, it shall be considered administratively complete

when the draft general permit has been placed on public notice.

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

6

(5) “Agency” means the Agency of Natural Resources.

(6) “Clean Air Act” means the federal statutes on air pollution

prevention and control, 42 U.S.C. § 7401 et seq.

(7) “Clean Water Act” means the Federal Water Pollution Control

Act, 33 U.S.C. § 1251 et seq.

(8) “Commissioner” means the Commissioner of Environmental

Conservation or the Commissioner’s designee.

(9) “Contested case” means a proceeding, including but not restricted

to rate-making and licensing, in which the legal rights, duties, or

privileges of a party are required by law to be determined by the

Agency after an opportunity for hearing.

(10) “Department” means the Department of Environmental

Conservation.

(11) “Document” means any written or recorded information,

regardless of physical form or characteristics, which the

Department produces or acquires in the course of reviewing an

application for a permit.

(12) “Environmental notice bulletin” or “bulletin” means the website

and e-mail notification system required by 3 V.S.A. § 2826.

(13) “Fact sheet” means a document that briefly sets forth the

principal facts and the significant factual, legal, methodological,

and policy questions and information considered in preparing a

draft decision.

(14) “General permit” means a permit that applies to a class or

category of discharges, emissions, disposal, facilities, or activities

within a common geographic area, including the entire State or a

region of the State.

(15) “Guidance document” means a written record that has not been

adopted in accordance with 3 V.S.A. chapter 25 and that is issued

by an agency to assist the public by providing an agency’s current

approach to or interpretation of law or describing how and when

an agency will exercise discretionary functions. The term does not

include the documents described in subdivisions (25)(A) through

(F) of this section.

(16) “Individual permit” means a permit that authorizes a specific

discharge, emission, disposal, facility, or activity that contains

terms and conditions that are specific to the discharge, emission,

disposal, facility, or activity.

(17) “Major amendment” means an amendment to an individual

permit or notice of intent under a general permit that

necessitates technical review.

(18) “Minor amendment” means an amendment to an individual

permit or notice of intent under a general permit that requires a

change in a condition or requirement, does not necessitate

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technical review, and is not an administrative amendment.

(19) “Notice of intent under a general permit” means an authorization

issued by the Secretary to undertake an action authorized by a

general permit.

(20) “Party” means each person or agency named or admitted as a

party, or are an entitled as of right to be admitted as a party.

(21) “Permit” includes any permit, certification, license, registration,

determination, or similar form of permission required from the

Department by law. However, the term excludes a professional

license issued pursuant to 10 V.S.A. Chapter 48, subchapter 3

(licensing of well drillers) and 10 V.S.A. §§ 1674 (water supply

operators), 1936 (UST inspector licenses), 6607 (hazardous waste

transporters), and 6607a (waste transportation).

(22) “Person” means any individual; partnership; company;

corporation; association; joint venture; trust; municipality; the

State of Vermont or any agency, department, or subdivision of the

State, any federal agency, or any other legal or commercial entity.

(23) “Person to whom notice is federally required” means a person to

whom notice of an application or draft decision must be given

under federal regulations adopted pursuant to the Clean Air Act

or Clean Water Act.

(24) “Practice” means a substantive or procedural requirement of an

agency, affecting one or more persons who are not employees of

the agency, which is used by the agency in the discharge of its

powers and duties. The term includes all such requirements,

regardless of whether they are stated in writing. “Practices”

include guidance documents, policy documents, memoranda of

agreement or understanding, standard operating procedures, and

all other similar documents.

(25) “Procedure” means a practice that has been adopted in writing at

the election of the agency or as the result of a petition under 37-

301. The term includes any practice of any agency that has been

adopted in writing, whether or not labeled as a procedure, except

for each of the following:

(A) a rule adopted pursuant to 3 V.S.A. chapter 25;

(B) a written document issued in a contested case that imposes

substantive or procedural requirements on the parties to

the case;

(C) a statement that concerns only:

(i) the internal management of an agency and does not

affect private rights or procedures available to the

public;

(ii) the internal management of facilities that are

secured for the safety of the public and the

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individuals residing within them;

(iii) guidance regarding the safety or security of the staff

of an agency or its designated service providers or of

individuals being provided services by the agency or

such a provider;

(D) an intergovernmental or interagency memorandum,

directive, or communication that does not affect private

rights or procedures available to the public;

(E) an opinion of the Attorney General; or

(F) a statement that establishes criteria or guidelines to be

used by the staff of an agency in performing audits,

investigations, or inspections, in settling commercial

disputes or negotiating commercial arrangements, or in the

defense, prosecution, or settlement of cases, if disclosure of

the criteria or guidelines would compromise an

investigation or the health and safety of an employee or

member of the public, enable law violators to avoid

detection, facilitate disregard of requirements imposed by

law, or give a clearly improper advantage to persons that

are in an adverse position to the State.

(26) “Public meeting” means a meeting that is open to the public and

recorded or transcribed, at which the Department shall provide

basic information about the draft permit decision, an opportunity

for questions to the applicant and the Department, and an

opportunity for members of the public to submit oral and written

comments.

(27) “Secretary” means the Secretary of Natural Resources or

designee.

(28) “Technical review” means the application of scientific,

engineering, or other professional expertise to the facts to

determine whether activity for which a permit is requested meets

the standards for issuing the permit under statute and rule.

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SUBCHAPTER 3. UNIFORM ENVIRONMENTAL ADMINISTRATIVE

PROCEDURE

§ 37-301. PETITIONS FOR RULEMAKING OR ADOPTION OF PROCEDURES

(a) Generally. Any person may submit a petition requesting that the

Commissioner adopt, amend, or repeal a rule or procedure. If the petition is

to adopt a procedure as a rule and is accompanied by the signatures of 25

persons or made by the Legislative Committee on Administrative Rules, then

the Commissioner shall initiate the rulemaking process.

(b) Minimum requirements of a petition. At a minimum, any petition shall

include:

(1) A brief description of the reasons for adopting, amending, or repealing

the rule or procedure;

(2) Any technical information that supports the petitioner’s position with

respect to the adoption, amendment, or repeal of the rule or procedure;

(3) A citation to the specific section or sections of Vermont statute or rule

granting the Commissioner the authority to adopt, amend, or repeal

the rule or procedure;

(4) Any supplemental information required by the statute or rule that is

subject to the request;

(5) A description of the people, enterprises, and government entities that

may be affected by the rule or procedure and an estimate of the costs

and benefits to each of those entities;

(6) Contact information for the petitioner, including an e-mail address;

and

(7) A written draft of the proposed rule or procedure. If the rule or

procedure is existing, all language that the petitioner proposes to add

shall be underlined and all language that the petitioner proposes to

delete shall be struck through.

(c) Department response. Within 30 days of receipt of a petition, the

Commissioner shall:

(1) Initiate rulemaking proceedings or adopt a procedure. Initiating

rulemaking means prefiling the administrative rule with the

interagency committee on administrative rules; or

(2) Deny the petition and provide the basis of the denial in writing.

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(d) The Secretary shall post any petition for a rulemaking and its response on

the Agency website.

§ 37-302. PROCEDURES AND GUIDANCE DOCUMENTS

On or before July 1, 2019, the Department shall maintain an electronic

compilation of all procedures and guidance documents on the Department

webpage. The compilation shall be organized by subject and contain the date

the procedure or guidance document was adopted. Any procedure that does

not appear in the electronic compilation shall no longer be effective. The

Department shall not rely on a procedure or guidance document or cite it

against any party to a proceeding, unless the procedure or guidance

document is included in a compilation maintained and published in

accordance with this section.

§ 37-303. ADMINISTRATIVE CONTINUATION OF PERMITS

(a) Generally. When a permittee has submitted an administratively complete

application for the renewal of a permit of for an activity of a continuing

nature prior to the expiration of that permit, the existing permit shall not

expire until the Secretary has made a final determination with respect to the

application, and in case the application is denied or the terms of the new

permit limited, until the last day for seeking review of the permit or a later

date fixed by order of the reviewing court. For purposes of this section, a

“activity of a continuing nature” means a permit that authorizes the

continued operation of a permitted activity but does not include a permit to

construct a new, or the expansion of an existing, activity.

(b) As applied to general permits. When the Secretary has placed on public

notice a draft general permit, the current general permit shall be considered

administratively continued.

Note: Absent a compelling reason, long-term administrative

continuations should be rare and are generally disfavored by the

Agency.

§ 37-304. VESTING OF RIGHTS IN A STATUTE OR RULE ADMINISTERED BY THE

AGENCY OF NATURAL RESOURCES

Vesting of rights. Unless otherwise provided in a rule adopted by the

Department, the statutory and regulatory requirements applicable to a

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permit shall be those in effect on the date that the Department’s draft

decision is issued.

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SUBCHAPTER 4. CONTESTED CASE PROCEEDINGS

§ 37-401. APPLICABILITY

This subchapter shall apply to the revocation of a permit and for any other

proceeding where a contested case proceeding is required by law.

§ 37-402. HEARING OFFICER.

The Commissioner shall appoint a hearing officer to preside over the

contested case proceeding. At the time the Commissioner appoints a hearing

officer, the Commissioner shall either delegate authority to the hearing

officer to issue a ruling in the proceeding or retain decision making authority.

If the Commissioner retains decision making authority, the same restrictions

that apply to the hearing officer shall apply to the Commissioner. A person

who has been personally and substantially involved at any stage of the

matter subject to the proceeding shall be disqualified from serving as a

hearing officer.

§ 37-403. EX PARTE COMMUNICATIONS.

The hearing officer shall not communicate with any person who is a party to

the proceeding concerning an active proceeding without notice and

opportunity for all parties to participate in the communication. This

prohibition on ex parte communication shall not apply to:

(1) Communications between the hearing officer and the Commissioner;

(2) Communications between the hearing officer, including the

Commissioner, and counsel authorized to provide legal advice with

respect to the matter subject to the proceeding; or

(3) Communications between the hearing officer or the Commissioner and

an Department employee, provided:

(A) the Department employee has not been personally and

substantially involved at any stage with respect to the subject

matter of the proceeding;

(B) the Department employee has not communicated with any other

person with respect to the subject matter of the proceeding; and

(C) the communication with the Department employee does not

augment, diminish, or modify the hearing record and:

(i) is an explanation of technical or scientific basis of

evidence in the hearing record; or

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(ii) is an explanation of precedent, policies, or procedures of

the Department.

§ 37-404. INITIATION OF PROCEEDING AND ENTRY OF APPEARANCE

(a) Initiation of proceeding.

(1) Generally. Initiation of a contested case shall be governed by the law

that requires a contested case proceeding for that decision of the

Commissioner, except for decision by the Commissioner to revoke a

permit.

(2) Revocations. The Commissioner may initiate a contested case to

revoke a permit by notifying the permittee that a revocation

proceeding has been initiated, by notifying the permittee of the

opportunity to participate in the proceeding, and by providing a brief

summary of the factual basis of the grounds for initiating the

proceeding to the permittee. A revocation proceeding may be initiated

by the Commissioner on the following grounds:

(A) a violation of a permit condition;

(B) false or misleading information was provided in support of a

permit application;

(C) a violation of the rules or authorizing statutes governing the

activity that is subject to the proceeding;

(D) specific grounds for revocation identified in the rules governing

the activity has occurred;

(E) the holder of the permit has requested that it be revoked; or

(F) the creation of a condition that may present threat to human

health or the environment.

(3) A permittee may waive the right to a contested case proceeding. A

waiver shall be in writing and shall be signed by all co-permittees to

the permit requested to be revoked.

(b) Necessary parties. The person initiating a proceeding shall provide notice to

all persons whose participation is required for the Department to provide

relief in the proceeding or any person who has a legal interest related to the

subject of the proceeding and a failure to participate in the proceeding could

result in that person being unable to protect that legal interest. In all cases a

permittee and any person whose property is affected by the decision shall be

provided notice under this section.

(c) Interested persons. When applicable, the Secretary should provide notice to

any person who commented on the Department action that is subject to the

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revocation proceeding. A failure to provide an interested person with notice

shall not create a procedural defect to the proceeding.

(d) Initial notice of proceeding. For all contested case proceedings, the

Department shall provide notice to all parties of, at a minimum, the

following:

(1) The time, method, and location of an initial conference to be provided

pursuant to § 37-405;

(2) A statement of the legal authority and jurisdiction governing the

proceeding;

(3) A reference to the applicable sections of statute or rule that require a

contested case; and

(4) A short, plain statement of the matters at issue. The statement shall

be as detailed as possible in light of the information available at the

time of the notice.

(e) Entry of Appearance. Any person may enter an appearance to participate in

a contested case proceeding by filing a written notice within 14 days of

receiving the initial notice of the proceeding with the Commissioner that

identifies the following information. Upon receipt by the Commissioner of a

notice by a person, the person shall be treated as a party unless and until the

Commissioner rules the party does not have party status in response to an

objection made pursuant to § 37-405.

(1) The name of the person entering an appearance;

(2) The name of any person representing the person requesting to enter an

appearance;

(3) Contact information of the person entering an appearance, including

the e-mail address where notices, filings, and other information shall

be sent. If e-mail notice is refused, the person shall provide a mailing

address for all notices, filings, and other information to be sent.

(4) A statement on how the interests of the person entering an appearance

are or may be affected by the subject matter and may be affected by

the potential outcome of the proceeding.

Note: If the case is a revocation and the person holding the permit

fails to enter an appearance the Commissioner may enter a default

order revoking the permit.

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(f) Service. Copies of all documents filed in a proceeding shall be served upon all

other parties to the proceeding by the party making the filing. Service shall

be made by emailing copies of the documents, or, if email service has been

refused, by mailing physical copies, to each party’s attention using the

contact information as provided in each party’s entrance of appearance. The

party filing the document shall certify to the hearing officer that they have

served all other parties with the document filed in accordance with this

section.

§ 37-405. INITIAL CONFERENCE AND SCHEDULING ORDER

(a) Initial Conference. Within 21 days of the initial notice of the proceeding

required by § 37-404, the hearing officer shall hold an initial conference with

the parties. The primary purposes of this conference include:

(1) The simplification and clarification of the issues in the proceeding;

(2) Obtaining admissions of fact and of documents that will avoid the

production of unnecessary proof;

(3) The limitation of the number of expert witnesses; and

(4) The formulation of a scheduling order for the proceeding.

(b) Party status. Any objection to a person’s party status and ability to appear in

a proceeding shall be made in advance of the initial conference or five days

from the party in question’s entry of appearance, whichever is later. The

Commissioner shall rule on the objection and person’s party status within 10

days.

(c) Scheduling Order.

(1) The parties to a proceeding shall provide the hearing officer with a

mutually agreed upon scheduling order at the pretrial conference. At a

minimum, the scheduling order shall:

(A) Identify the date or dates by which all motions must be filed,

except motions related to subject matter jurisdiction;

(B) Identify the type, sequence, and amount of discovery in the

proceeding, limiting the discovery to that which is necessary for

a full and fair determination of the proceeding;

(C) Identify the date or dates for filing prefiled testimony or any

stipulated facts;

(D) Identify the date or dates for filing rebuttal prefiled testimony;

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(E) Identify whether an oral argument is required for the

proceeding and if so the date for that oral argument; and

(F) Identify the date or dates that any final briefs are due.

(2) If the parties are unable to reach agreement on a scheduling order

either in part or in whole, by the date of the pretrial conference, the

hearing officer may impose a deadline for reaching an agreement on

the scheduling order, or may enter a scheduling order for the

proceeding.

§ 37-406. DOCUMENTS AND SERVICE

(a) All materials filed in a proceeding are considered filed when received by the

hearing officer.

(b) All materials must be signed by the party offering the document to the

hearing officer or an attorney representing the party.

(c) Service of all documents shall be through e-mail unless the party rejects

electronic service, in which case service shall be made through U.S. Mail.

(d) All materials filed with the hearing officer shall comply with the following

page limits:

(1) Motions: No more than 10 pages.

(2) Memoranda, briefs, pleadings, and any other document not expressly

identified in this subsection: No more than 15 pages.

(3) Reply memoranda, reply briefs: No more than 15 pages.

(4) Proposed findings of fact and conclusions of law: No more than 10

pages.

(5) Prefiled testimony, rebuttal prefiled testimony: No limitation on

testimony or exhibits, unless established in scheduling order for the

proceeding.

(e) The hearing officer may modify or waive the limitations established in

subsection (d) of this section upon a showing of good cause.

(f) All proposed findings of fact and conclusions of law shall cite to the

supporting evidence in the proceeding record and discuss the applicable legal

provisions showing how each element of a claim is met or not met based on

the facts of the proceeding.

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§ 37-407. EVIDENCE AND PREFILED TESTIMONY

(a) Generally. Evidentiary matters are governed by 3 V.S.A. § 810.

(b) Prefiled testimony shall be in question and answer form. Its form and

content shall be such as would entitle the same oral testimony to be admitted

in proceedings before the hearing officer. Such testimony shall be typed and

double spaced. Line numbers shall be placed in the left hand margin of each

page.

(c) Prefiled testimony shall be accompanied by a signed and notarized

certification with the following certification from the witness:

“I [insert witness name] swear that I prepared the prefiled testimony, that

the responses to all these questions are my own, and that my testimony is

accurate and truthful. I also understand that if I intentionally provide

inaccurate or untruthful testimony I subject myself to prosecution pursuant

to 13 V.S.A. § 3016 (False Claim).”

(d) Any witness offering prefiled testimony must be available to appear at a

hearing.

§ 37-408. HEARING

(a) Any party to a proceeding may petition the hearing officer to hold a hearing

with respect to the matters at issue. The hearing officer shall hold a hearing

to allow the parties to make argument as to any prefiled testimony presented

to the hearing officer.

(b) A hearing officer shall only hold an evidentiary hearing when it is necessary

for a full and true disclosure of the facts or when a hearing will materially

advance the hearing officer’s understanding of the matters at issue or at the

hearing officer’s discretion. At a minimum, the hearing officer shall consider

the following when determining whether a hearing is necessary:

(1) the credibility or veracity of a witness that filed prefiled testimony.

(2) the bias or other relationship that the person who filed prefiled

testimony may have with respect to the matter.

(c) All testimony offered in a hearing shall be made under oath or affirmation.

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§ 37-409. PROCEEDING RECORD

(a) At a minimum, the proceeding record shall contain:

(1) all pleadings, motions, and intermediate rulings;

(2) all evidence received or considered;

(3) a statement of matters officially noticed;

(4) questions, offers of proof, objections, and rulings thereon;

(5) proposed findings of fact and conclusions of law; and

(6) any decision, opinion, or report.

(b) The hearing officer may take official notice of all facts of which judicial notice

may be taken and of scientific, technical, or other facts within the specialized

knowledge of the Department. The hearing officer shall notify parties at the

earliest practical time of the facts proposed to be noticed and their source,

including any staff memoranda or data. The party shall have the opportunity

to contest any fact officially noticed prior to the finalization of the decision.

(c) Any portion of an oral proceeding shall be transcribed. The party that

petitioned for the hearing shall pay for the costs of transcription. If more

than one party petitioned for a hearing, the costs shall be split equally

between the petitioning parties.

§ 37-410. DECISIONS AND ORDERS

(a) The experience, technical competence, and specialized knowledge of the

hearing officer that is hearing the case may be used in evaluating the

evidence in the hearing record.

(b) Any decision or order shall be in writing, and include findings of fact and

conclusions of law, separately stated and identified. Decisions and orders

shall be based exclusively on the proceeding record.

(c) If the hearing officer has been delegated authority to make a final decision,

the written decision or order of the hearing officer shall take effect upon

service to the parties.

(d) If the hearing officer has not been delegated authority to make the final

decision, the hearing officer shall provide a copy of the proposed order or

decision to each party and the Commissioner, and the Commissioner shall

render a final decision in accordance with subsection (e) of this section.

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(e) Decisions made by the Commissioner.

(1) When the Commissioner reviews a hearing officer’s proposed order or

decision, the Commissioner shall review the proposed decision or order

as if the Commissioner conducted the proceeding.

(2) When reviewing findings of fact, the Commissioner shall consider the

hearing officer’s opportunity to observe the witnesses and determine

their credibility.

(3) The parties shall be afforded an opportunity to present briefs and oral

argument to the Commissioner prior to the decision.

(4) The Commissioner may render a final decision or order on the

proceeding or remand the matter to the hearing officer with

instructions for further action.

(5) The final decision or order must identify the differences between the

proposed decision or order and the final. A written decision or order of

the Commissioner shall take effect upon service to the parties.

(f) Any decision or order, including any intermediate order or ruling issued by

the hearing officer, shall be served on the parties in in the same manner as §

37-406(c) and shall constitute actual knowledge to the parties.

§ 37-411. EMERGENCY PROCEEDINGS.

If the Commissioner determines that an activity of an ongoing nature

presents an immediate and substantial endangerment to human health,

safety, or welfare or the environment, the Commissioner may temporarily

suspend the activity authorized by the permit or license until a proceeding to

revoke the license or permit has been completed.

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SUBCHAPTER 5. STANDARD PROCEDURES FOR PERMIT PROCESSING

§ 37-501. PURPOSE.

(a) Permit proceedings under this subchapter are informal adjudications of

applications for a permit under the authorities listed pursuant to Appendix

A.

Note: All Permit decisions of the Department follow the procedures outlined

in this subchapter. Unless required by law, Department permits do not

follow a contested case procedure.

(b) The Secretary may adopt a procedure for any permit not included in

Appendix A defining on an interim basis what standard procedure applies to

decision-making for that permit.

§ 37-502. COMPUTATION OF TIME

In this subchapter:

(1) When time is to be reckoned from a day, date, or an act done, the day,

date, or day when the act is done shall not be included in the

computation.

(2) Computation of a time period shall use calendar days.

§ 37-503. ENVIRONMENTAL NOTICE BULLETIN.

(a) When notice is required by this subchapter, at a minimum the following

persons shall receive notice from the Environmental Notice Bulletin:

(1) the applicant;

(2) any person who has requested to receive notice through the ENB;

(3) each municipality in which the activity to be permitted is located,

except for notice of a draft or final general permit; and

(4) each other person to whom this subchapter directs that a particular

notice be provided through the bulletin.

(b) At a minimum, each notice generated by the bulletin shall contain:

(1) the name and contact information for the person at the Agency

processing the permit;

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(2) the name and address of the facility or activity to be permitted, if

applicable;

(3) a brief description of the activity for which the permit would be issued;

(4) the length of the period for submitting written comments and the

process for submitting those comments, if applicable, and notice of the

requirements regarding submission of comments during that period or

at a public meeting in order to appeal under chapter 220 of this title;

(5) the process for requesting a public meeting, if applicable;

(6) when a public meeting has been scheduled, the time, date, and location

of the meeting and a brief description of the nature and purpose of the

meeting;

(7) when issued, the draft permit or notice of intent to deny a permit, and

the period and process for submitting written comments on that draft

permit or notice;

(8) when issued, the final decision issuing or denying a permit, and the

process for appealing the decision; and any other information that this

chapter directs be included in a particular notice to be generated by

the bulletin.

(c) With respect to notice and a public meeting, the Secretary shall:

(1) provide at least 14 days' prior notice of the public meeting through the

environmental notice bulletin, unless this subchapter specifies a

different notice period for a public meeting on the particular type of

permit;

(2) include in the notice, in addition to the information required by

subsections (b)-(d) of this section, the date the Secretary gave notice of

an administratively complete application, if applicable; and

(3) hold the period for written comments open for at least seven days after

the meeting.

(d) Notice to adjoining property owners. When this subchapter requires notice of

an application to adjoining property owners, the applicant shall provide

notice of the application by U.S. mail to all adjoining property owners, on a

form developed by the Secretary, at the time the application is submitted to

the Secretary. The form shall state how the property owners can continue to

receive notices and information concerning the project as it is reviewed by the

Secretary. The applicant shall provide a signed certification with the

application materials submitted to the Secretary that all adjoining property

owners have been notified of the application. However, if the applicant has

provided written notice to adjoining property owners as part of the

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preapplication engagement process for complex projects under rules adopted

in accordance with §37-510, then instead of the written notice required of the

applicant by this subsection, the Department shall provide notice of the

application through the environmental notice bulletin to those adjoining

property owners who have requested electronic notice.

(e) If an individual does not have an e-mail address, the individual may request

to receive notifications through U.S. mail. On receipt of such a request, the

Secretary shall mail to the individual the same information that the

individual would have otherwise received through electronic notice through

the bulletin.

(f) Response to comments. When this subchapter requires the Secretary to

provide a response to comments, the Secretary shall provide a response to

each comment received during the comment period and the basis for the

response. The Secretary also shall specify each provision of the draft decision

that has been changed in the final decision and the reasons for each change.

The Secretary shall post the response to comments to all persons requesting

to receive notice through the bulletin.

(g) Final decisions; content; notice.

(1) The Secretary's final decision on an application for a permit or on the

issuance of a general permit shall include a concise statement of the

facts and analysis supporting the decision that is sufficient to apprise

the reader of the decision's factual and legal basis. The final decision

also shall provide notice that it may be appealed and state the period

for filing an appeal and how and where to file an appeal.

(2) When this chapter requires that the Secretary post a final decision to

the environmental notice bulletin, the Secretary also shall send a copy

of the final decision to all persons requesting to receive notice through

the bulletin.

§ 37-504. TYPE 1 PROCEDURES

(a) Purpose; scope.

(1) The purpose of this section is to establish the public notice and

comment requirements that the Department must follow when

adopting general permits and considering applications for individual

permits under the Clean Air Act and Clean Water Act.

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(2) This section governs each application for a permit to be issued by the

Secretary pursuant to the requirements of the Clean Air Act or Clean

Water Act and to each general permit to be issued under one of those

acts. However, the subsection does not apply to a notice of intent under

a general permit, except as required under 40 C.F.R. § 122.28(d)(2) for

notices of intent under a Municipal Separate Storm Sewer System

(MS4) “two-step general permit”. The procedures under this section

shall be known as Type 1 Procedures.

(b) Notice of Application.

(1) The applicant shall provide notice to adjoining property owners on a

form developed by the Secretary. The applicant shall provide this

notice by U.S. Mail. The notice shall be provided at the same time the

application is provided to the Secretary.

(2) The applicant shall provide a signed certification to the Secretary that

all adjoining property owners have been notified of the application

with the application materials submitted to the Secretary.

(3) If an application is a large and complex project, notice needs to have

been provided pursuant to § 37-510 (pre-application public meeting).

When the applicant files the application with the Secretary, the

applicant shall certify notice was provided as required by § 37-507(c).

(4) The Secretary shall provide notice of the application through the

environmental notice bulletin when the application is deemed

administratively complete.

(5) This subsection shall not apply to general permits issued pursuant to

this section.

(6) If the permit application may affect a Class I Area as defined in the

Clean Air Act, the Federal Land Manager shall be notified within 30

days of receipt of the application by the Secretary.

(c) Notice of Draft Decision, Public Comment Period, Public Informational

Meeting.

(1) The Secretary shall not issue a draft decision unless the application

has been noticed as administratively complete for at least 15 days.

This requirement shall not apply to general permits.

(2) Notice of Draft Decision.

(A) Notice applicable to all permits. When the Secretary has issued

a draft decision, the Secretary shall provide notice through the

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

24

environmental notice bulletin of the draft decision. At a

minimum, the notice shall include: the draft decision, and any

required fact sheet associated with the draft decision. The

notice shall also include how to request copies of the complete

record associated with the application.

(B) Additional notice requirements applicable to Clean Water Act

(CWA) draft decisions.

(i) Notice applicable to all CWA draft decisions. Notice shall

be provided to all persons identified in 40 C.F.R. §

124.10(c) as requiring notice of NPDES permits.

(ii) Notice applicable to CWA draft decisions on individual

permits. Notice shall include a general description of the

location of each existing or proposed discharge point and

the name of the immediate receiving water.

(iii) Notice applicable to CWA draft decisions on general

permits and major individual permits. For a general

permit, notice shall be provided in daily or weekly

newspapers in each region of the State to which the

general permit will apply, and for a major individual

permit, notice shall be provided in daily or weekly

newspapers in the area of the proposed project.

(iv) Notice applicable to CWA draft decisions on cooling water

intake structures under section 316(b) of the CWA.

Notice shall comply with 40 C.F.R. Part 125, Subparts I,

J, and N.

(C) Notice applicable to Clean Air Act Construction Permits. For a

notice issued on a permit that is required to comply with 40

C.F.R. Part 51, the Secretary shall provide the notice to the

applicant, the Environmental Protection Agency Regional

Administrator, and to officials and agencies having cognizance

over the location where the proposed construction would occur,

including: any other State or local air pollution control agencies,

the chief executives of the city or town and county where the

source would be located, any comprehensive regional land use

planning agency, and any State, Federal Land Manager, or

Indian Governing body whose lands may be affected by

emissions from the source or modification. The notice shall

include, if applicable, the degree of increment consumption that

is expected from the source or modification.

(D) Notice applicable to Clean Air Act Operating Permits. For a

notice issued on a permit that is required to comply with 40

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

25

C.F.R. Part 70, the Secretary shall provide the notice to any

states affected by the source. The notice shall also include any

emissions change proposed in any application for an operating

permit amendment.

(3) Fact sheets. When required under 40 C.F.R. 124.8, the Secretary shall

produce a fact sheet and place it on notice with the draft decision

(4) After notice is provided, the Secretary shall provide a public comment

period on the draft decision for no less than 30 days.

(5) Any person may request a public informational meeting within 30 days

of the notice of the draft decision. If a public informational meeting is

requested the Secretary shall provide 30 days’ notice of the location,

date, and time of the public informational meeting. The notice shall be

provided to all persons who received notice of the draft decision

through the environmental notice bulletin. When a public

informational meeting is held, the public comment period shall not end

until at least seven days following the public informational meeting.

(d) Final Decisions. When the Secretary issues a final decision on an application

or general permit, the Secretary shall post a copy on the environmental

notice bulletin of the final decision or final general permit, the final fact

sheet, a response to comments, and the Secretary shall show any changes

made in response to the comments to the permit between the draft and final

permit. The electronic notice bulletin shall send this information to any

person that all persons requested to receive notice through the bulletin.

§ 37-505. TYPE 2 PROCEDURES

(a) Purpose; scope.

(1) The purpose of this section is to establish the public notice and

comment requirements that the Department must follow when

considering applications for individual permits, except for individual

permits specifically listed in other sections of this subchapter, and

when considering other permits listed in this section.

(2) The procedures under this section shall be known as Type 2

Procedures. This section governs an application for each of the

following:

(A) an individual permit issued pursuant to the Secretary's

authority under Title 10 of the Vermont Statutes and 29 V.S.A.

chapter 11, except for permits governed by §§ 37- 504 and 506 -

508;

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

26

(B) a wetland determination under 10 V.S.A. § 914;

(C) an individual shoreland permit under 10 V.S.A chapter 49A;

(D) a public water system source permit under 10 V.S.A. § 1675;

(E) a provisional certification issued under section 10 V.S.A. §

6605d; and

(F) a corrective action plan under 10 V.S.A. § 6648.

(b) Notice of Application.

(1) The applicant shall provide notice to adjoining property owners on a

form developed by the Secretary. The applicant shall provide this

notice by U.S. Mail. The notice shall be provided at the same time the

application is provided to the Secretary.

(2) For public water system source protection areas, the applicant also

shall provide notice to all property owners located in:

(A) zones 1 and 2 of the source protection area for a public

community water system source; or

(B) the source protection area for a public nontransient

noncommunity water system source.

(3) For individual shoreland permits under chapter 49A, aquatic nuisance

control permits for activities taking place on a shoreline, and lake

encroachment activities:

(A) The notice to adjoining property owners shall be to the adjoining

property owners on the terrestrial boundary of the shoreland.

(B) This chapter does not require notice to owners of property across

the lake as defined in that chapter.

(4) The applicant shall provide a signed certification to the Secretary that

all adjoining property owners have been notified of the application

with application materials submitted to the Secretary.

(5) If an application is a large and complex project, notice needs to have

been provided pursuant to § 37-510 (pre-application public meeting).

When the applicant files the application with the Secretary, the

Applicant shall certify notice was provided as required by § 37-507(c).

(6) The Secretary shall provide notice of the application through the

environmental notice bulletin when the application is deemed

administratively complete.

(c) Notice of Draft Decision, Public Comment Period, Public Informational

Meeting.

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

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(1) When the Secretary has issued a draft decision, the Secretary shall

provide notice through the environmental notice bulletin of the draft

decision. At a minimum, the Secretary shall post the draft decision

and how to request copies of the complete record associated with the

application.

(2) After notice is provided, the Secretary shall provide a public comment

period on the draft decision for no less than 30 days.

(3) Any person may request a public informational meeting within 14 days

of the notice to the environmental notice bulletin. If a public

informational meeting is requested the Secretary shall provide 14 days’

notice of the location, date, and time of the public informational

meeting. The notice shall be provided to all persons who received

notice of the draft decision through the environmental notice bulletin.

When a public informational meeting is held, the public comment

period shall not end until at least seven days following the public

informational meeting.

(d) Final Decisions. When the Secretary issues a final decision on an

application, the Secretary shall post a copy on the environmental notice

bulletin of the of the final decision, a response to comments, and the

Secretary shall show any changes made in response to the comments to the

permit between the draft and final permit. The electronic notice bulletin

shall send notice of availability this information to any person that requested

to receive notice through the bulletin.

§ 37-506. TYPE 3 PROCEDURES

(a) Purpose; scope.

(1) The purpose of this section is to establish the public notice and

comment requirements that the Department must follow when

adopting general permits, except for general permits governed by § 37-

504 of this chapter, and when considering other permits listed in this

section.

(2) The procedures under this section shall be known as Type 3

Procedures. This section governs each of the following:

(A) Each general permit issued pursuant to the Secretary's

authority under this title other than a general permit subject to

§37-504. This section does not apply to a notice of intent under a

general permit.

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

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(B) Issuance of a dam safety order under 10 V.S.A. chapter 43,

except for an unsafe dam order under 10 V.S.A. § 1095.

(C) An application or request for approval of:

(i) an aquatic nuisance control permit under 10 V.S.A.

chapter 50;

(ii) a change in treatment for a public water supply 10 V.S.A.

chapter 56;

(iii) a collection plan for mercury-containing lamps under 10

V.S.A. § 7156;

(iv) an individual plan for the collection and recycling of

electronic waste under 10 V.S.A. § 7554; and

(v) a primary battery stewardship plan under 10 V.S.A. §

7586.

(b) Notice of Application. The Secretary shall provide notice of the application

through the environmental notice bulletin when the application is deemed

administratively complete.

(c) Notice of Draft Decision, Public Comment Period, Public Informational

Meeting.

(1) When the Secretary has issued a draft decision, the Secretary shall

provide notice through the environmental notice bulletin of the draft

decision. At a minimum, the notice shall include the draft decision,

and include how to request copies of the complete record associated

with the application.

(2) After notice is provided, the Secretary shall provide a public comment

period on the draft decision for no less than 30 days.

(3) Any person may request a public informational meeting within 14 days

of the notice to the environmental notice bulletin. If a public

informational meeting is requested the Secretary shall provide 14 days’

notice of the location, date, and time of the public informational

meeting. The notice shall be provided to all persons who received

notice of the draft decision through the environmental notice bulletin.

When a public informational meeting is held, the public comment

period shall not end until at least seven days following the public

informational meeting.

(d) Final Decisions. When the Secretary issues a final decision on an

application, the Secretary shall post a copy on the environmental notice

bulletin of the of the final decision, a response to comments, and the

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

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Secretary shall show any changes made in response to the comments to the

permit between the draft and final permit. The electronic notice bulletin

shall send this information to any person requested to receive notice through

the bulletin.

§ 37-507. TYPE 4 PROCEDURES

(a) Purpose; scope.

(1) The purpose of this section is to establish the public notice and

comment requirements that the Department must follow when

considering applications for notice of intent under a general permit and

other permits listed in this section.

(2) The procedures under this section shall be known as Type 4

Procedures. This section applies to each of the following:

(A) a notice of intent under a general permit issued pursuant to the

Secretary's authority under this title; and

(B) an application for each of following permits:

(i) construction or operation of an air contaminant source or

class of sources not identified in the State's

implementation plan approved under the Clean Air Act;

(ii) construction or expansion of a public water supply under

10 V.S.A. chapter 56, except that a change in treatment

for a public water supply shall proceed in accordance with

10 V.S.A. § 7714;

(iii) a category 1 underground storage tank under 10 V.S.A.

chapter 59;

(iv) a categorical solid waste certification under 10 V.S.A.

chapter 159; and

(v) a medium scale composting certification under 10 V.S.A.

chapter 159.

(b) Notice of Application. The Secretary shall provide notice of the application

through the environmental notice bulletin when the application is deemed

administratively complete.

(c) Notice of Draft Decision, Public Comment Period.

(1) When the Secretary has issued a draft decision, the Secretary shall

provide notice through the environmental notice bulletin of the draft

decision. At a minimum, the notice shall include: the draft decision,

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

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and how to request copies of the complete record associated with the

application.

(2) After notice is provided, the Secretary shall provide a public comment

period on the draft decision of no less than 14 days.

(d) Final Decisions. When the Secretary issues a final decision on an

application, the Secretary shall post a copy on the environmental notice

bulletin of the of the final decision, a response to comments, and the

Secretary shall show any changes made in response to the comments to the

permit between the draft and final permit. The electronic notice bulletin

shall send this information to any person that requested to receive notice

through the bulletin.

(e) Additional Notice. At any time during the review of an application, the

Secretary may require that a permit being reviewed under the procedures of

this section may be reviewed under § 37-504 (Type 2 Procedures). When

making this determination, the Secretary may base the decision on the size,

complexity, potential environmental impact, or degree of public interest

associated with the project.

§ 37-508. TYPE 5 PROCEDURES

(a) Purpose; scope.

(1) The purpose of this section is to establish the public notice and

comment requirements that the Department must follow when issuing

emergency permits and other permits listed in this section.

(2) The procedures under this section shall be known as Type 5

Procedures. This section shall govern each of the following:

(A) issuance of temporary emergency permits under 10 V.S.A. § 912;

(B) applications for public water system operational permits under

10 V.S.A. chapter 56 of this title;

(C) issuance of authorizations, under a stream alteration general

permit issued under 10 V.S.A. chapter 41, for reporting without

an application, for an emergency, and for activities to prevent

risks to life or of severe damage to improved property posed by

the next annual flood;

(D) issuance of emergency permits issued under 10 V.S.A. § 1268 of

this title;

(E) issuance of emergency sludge and septage disposal approvals

under 10 V.S.A. § 6605; and

(F) shoreland registrations authorized under 10 V.S.A. chapter 49A.

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

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(b) Final Decisions. When the Secretary issues a final decision on an

application, the Secretary shall post a copy on the environmental notice

bulletin of the of the final decision.

(c) Additional Notice. At any time during the review of an application, the

Secretary may require that a permit being reviewed under the procedures of

this section may be reviewed under § 37-504 (Type 2 Procedures). When

making this determination, the Secretary may base the decision on the size,

complexity, potential environmental impact, or degree of public interest

associated with the project.

§ 37-509. AMENDMENTS; RENEWALS

(a) A major amendment shall be subject to the same procedures applicable to the

original permit decision under this rule.

(b) A minor amendment shall be subject to the Type 4 Procedures, except that

the Secretary need not provide notice of the administratively complete

application.

(c) An administrative amendment shall not be subject to the procedural

requirements of this rule.

(d) A person may renew a permit under the same procedures applicable to the

original permit decision under this chapter.

(e) With respect to amending a permit issued under the Clean Air Act or Clean

Water Act, if a requirement under those acts directs the Secretary to provide

the public with greater notice, opportunity to participate, or access to

information than the corresponding requirement of this rule, the Secretary

shall comply with the federal requirement.

§ 37-510. PRE-APPLICATION PUBLIC INFORMATIONAL MEETING

(a) Applicability. This section shall apply to the permit applications identified in

Appendix B of this rule or any person may voluntarily conduct a pre-

application informational meeting as provided in this section.

(b) Informational Meeting Required. An applicant subject to this section shall

hold a pre-application public informational meeting at least 14 days before

filing a permit application with the Department. The applicant shall present

an overview of the project, an overview of the permits required for the project,

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

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and respond to questions raised by meeting attendees. The applicant and the

Secretary or designee shall attend the meeting. The applicant shall respond

to questions from other attendees.

(c) Notice. An applicant shall provide notice of the pre-application meeting at

least 14 days prior to the meeting. The notice shall also inform interested

persons how to obtain future updates on the project. At a minimum, the

following parties shall be notified of the pre-application public informational

meeting:

(1) The owner of the property if the owner is not the applicant;

(2) The municipality where the project is located and if the project is on

the boundary of a municipality, the adjoining municipality;

(3) The municipal planning commission and regional planning commission

for any municipality where the project is located;

(4) Any adjoining property owner; and

(5) The Secretary by way of the Office of Policy and Planning in the

Agency of Natural Resources.

(d) Contents of Notice. A notice required by subsection (c) of this section shall

contain the same information as required by § 37-503(b), as applicable.

(e) Notice to the Secretary. The applicant shall furnish a certification to the

Secretary the names of those furnished notice and shall certify compliance

with the notice requirements of this section.

(f) Project scoping process. In lieu of conducting a pre-application public

informational meeting, an applicant for a project subject to this section may

initiate a project scoping process pursuant to 3 V.S.A. § 2828.

§ 37-511. ADDITIONAL NOTICE.

The Secretary may, on a case-by-case basis:

(1) Require a project designated as Type 4 or Type 5 to follow the

procedures for Type 2 notice.

(2) Require any additional notice beyond that required by this rule using a

method reasonably calculated to provide notice to persons potentially

affected by the decision on an application. Such additional notice may

include extending deadlines for public comment and reopening a public

comment period.

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§ 37-512. EXTENSION OF DEADLINES.

A person may request that the Secretary extend any deadline for comment or

requesting a public meeting established by this chapter. The person shall

submit the request two business days before the relevant deadline and

include an explanation of why the extension is justified. If the request is

granted, the Secretary shall provide notice of the new deadline through the

environmental notice bulletin.

§ 37-513. ADMINISTRATIVE RECORD.

(a) The Secretary shall create an administrative record for each application for a

permit and shall provide instructions to the public on how to obtain the

administrative record.

(b) The Secretary shall use the administrative record as the basis for each draft

and final decision on each application received.

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

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APPENDIX A – ANR PERMITS AND PUBLIC NOTICE TYPE

Public

Notice

Type

Type of Permit PN Activity Name

Type 1 Air Quality Permits

Air Pollution Control Major Source

Construction / Subchapter X

Operating Permit

Type 1 Air Quality Permits

Air Pollution Control Major Source

Construction / Title V Operating

Permit

Type 1 Air Quality Permits

Air Pollution Control Major Source

Construction Permit

Type 1 Air Quality Permits

Air Pollution Control Minor Source

Construction / Title V Operating

Permit

Type 1 Air Quality Permits

Air Pollution Control Title V

Operating Permit

Type 1

Surface Water Permits --

Stormwater

Designated Discharges General

Permit 3-9030

Type 1

Surface Water Permits --

Stormwater

Discharges From Medium

Concentrated Animal Feeding

Operations (CAFO) Stormwater

General Permit 3-9100

Type 1

Surface Water Permits --

Stormwater

Multi-Sector General Permit (MSGP)

3-9003

Type 1

Surface Water Permits --

Stormwater

Municipal Separate Storm Sewer

System (MS4) General Permit 3-9014

Type 1

Surface Water Permits --

Stormwater

Municipal Separate Storm Sewer

System (MS4) General Permit 3-

9014: Notice of Intent

Type 1

Surface Water Permits --

Stormwater

Transportation Separate Storm

Sewer System (TS4) General Permit

3-9007

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Type 1

Surface Water Permits --

Stormwater

Transportation Separate Storm

Sewer System (TS4) General Permit

3-9007: Notice of Intent

Type 1

Surface Water Permits –

Stormwater

Municipal Roads General Permit

(MRGP) 3-9040

Type 1

Surface Water Permits --

Stormwater

Stormwater Runoff from

Construction Sites General Permit

(CGP) 3-9020

Type 1

Surface Water Permits --

Wastewater

Federal Pretreatment Individual

Permit

Type 1

Surface Water Permits --

Wastewater

Wastewater Discharge Individual

Permit

Type 1

Surface Water Permits --Lakes and

Ponds Pesticide General Permit

Type 2 Air Quality Permits

Air Pollution Control Minor Source

Construction / Subchapter X

Operating Permit

Type 2 Air Quality Permits

Air Pollution Control Minor Source

Construction Permit

Type 2

Groundwater Permits -- Drinking

Water Groundwater Withdrawal Permit

Type 2

Groundwater Permits -- Drinking

Water

Public Water System Source Permit -

Site Notification

Type 2

Groundwater Permits -- Drinking

Water

Public Water System Source Permit -

SPA/Final Report/Draft Permit

Type 2

Groundwater Permits -- Indirect

Discharge and UIC

Indirect Discharge Permit -

Individual

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

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Type 2

Groundwater Permits -- Indirect

Discharge and UIC

Underground Injection Control (UIC)

Permit

Type 2

Surface Water Permits -- Lakes and

Ponds

Aquatic Nuisance Control Individual

Permit

Type 2

Surface Water Permits -- Lakes and

Ponds

Lake Encroachment Individual

Permit

Type 2

Surface Water Permits -- Lakes and

Ponds

Shoreland Protection Individual

Permit

Type 2 Surface Water Permits -- Rivers

Flood Hazard Area and River

Corridor Individual Permit

Type 2 Surface Water Permits -- Rivers Stream Alteration Individual Permit

Type 2

Surface Water Permits –

Stormwater

Individual Construction Stormwater

Permit (INDC)

Type 2

Surface Water Permits –

Stormwater

Individual Stormwater Discharge

Offset Permit (INDO)

Type 2

Surface Water Permits –

Stormwater

Individual Stormwater Discharge

Permit

Type 2 Surface Water Permits -- Wetlands Wetlands Determination

Type 2 Surface Water Permits -- Wetlands Wetlands Individual Permit

Type 2

Waste Management Permits --

Salvage Yards Salvage Yard Permit

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

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Type 2

Waste Management Permits -- Sites

Management Corrective Action Plan

Type 2

Waste Management Permits -- Solid

Waste Management

Large Composting Facility

Certification

Type 2

Waste Management Permits -- Solid

Waste Management

Solid Waste Facility Interim

Certification

Type 2

Waste Management Permits -- Solid

Waste Management

Solid Waste Facility Provisional

Certification

Type 2

Waste Management Permits -- Solid

Waste Management

Solid Waste Management Facility

Certification

Type 3

Groundwater Permits -- Drinking

Water

Public Water System Construction

Permit - New Type of Chemical

Disinfectant

Type 3

Groundwater Permits -- Indirect

Discharge and UIC Indirect Discharge General Permit

Type 3 Surface Water Permits -- Dams Dam Order

Type 3 Surface Water Permits -- Rivers

Flood Hazard Area and River

Corridor General Permit

Type 3 Surface Water Permits -- Rivers Stream Alteration General Permit

Type 3

Surface Water Permits --

Stormwater

New Stormwater Discharges

Stormwater General Permit 3-9015

Type 3

Surface Water Permits --

Stormwater

Previously Permitted Stormwater

Discharges General Permit 3-9010

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Type 3

Surface Water Permits --

Wastewater

General Permit 3-9004: Discharges to

Surface Waters from Petroleum-

related Remediation Activities

Type 3

Surface Water Permits --

Wastewater

General Permit 3-9016: Discharges

from Petroleum-related Remediation

Activities into Municipal Wastewater

Treatment Facilities

Type 3 Surface Water Permits -- Wetlands Wetlands General Permit

Type 3

Surface Water Permits --Lakes and

Ponds

Aquatic Nuisance Control General

Permit

Type 3

Waste Management Permits -- Solid

Waste Management

Plan for Collection and Recycling of

Electronic Waste; Individual

Type 3

Waste Management Permits -- Solid

Waste Management

Plan for Collection of Mercury-

Containing Lamps

Type 3

Waste Management Permits -- Solid

Waste Management Plan for Paint Stewardship

Type 3

Waste Management Permits -- Solid

Waste Management

Plan for Primary Battery

Stewardship

Type 3

Waste Management Permits -- Solid

Waste Management

Plan for Solid Waste Implementation

(SWIP)

Type 4 Air Quality Permits

Air Pollution Control Subchapter X

Operating Permit

Type 4

Groundwater Permits -- Drinking

Water

Authorization of Notice of Intent -

Public Water System General Permit

to Operate - Transient Non-

Community

Type 4

Groundwater Permits -- Drinking

Water

Public Water System Construction

Permit

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Type 4

Groundwater Permits -- Indirect

Discharge and UIC

Indirect Discharge Notice of Intent

General Permit

Type 4

Surface Water Permits -- Lakes and

Ponds

Aquatic Nuisance Control General

Permit: Notice of Intent

Type 4

Surface Water Permits -- Lakes and

Ponds

Pesticide General Permit-

Authorization

Type 4 Surface Water Permits -- Rivers

Flood Hazard Area and River

Corridor General Permit-

Authorization

Type 4 Surface Water Permits -- Rivers

Stream Alteration General Permit-

Authorization

Type 4

Surface Water Permits --

Stormwater

Designated Discharges General

Permit 3-9030: Notice of Intent

Type 4

Surface Water Permits --

Stormwater

Discharges from Medium

Concentrated Animal Feeding

Operations (CAFO) General Permit 3-

9100: Notice of Intent

Type 4

Surface Water Permits --

Stormwater

Multi-Sector General Permit (MSGP)

3-9003: Notice of Intent

Type 4

Surface Water Permits --

Stormwater

New Stormwater Discharges General

Permit 3-9015: Notice of Intent

Type 4

Surface Water Permits --

Stormwater

Previously Permitted Stormwater

Discharges General Permit 3-9010:

Notice of Intent

Type 4

Surface Water Permits --

Stormwater

Municipal Roads General Permit

(MRGP) 3-9040: Notice of Intent

Type 4

Surface Water Permits --

Stormwater

Stormwater Runoff from

Construction Sites General Permit

(CGP) 3-9020: Notice of Intent

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Type 4

Surface Water Permits --

Wastewater

General Permit 3-9004 Notice of

Intent: Discharges to Surface Waters

from Petroleum-related Remediation

Activities

Type 4

Surface Water Permits --

Wastewater

General Permit 3-9016 Notice of

Intent: Discharges from Petroleum-

related Remediation Activities into

Municipal Wastewater Treatment

Facilities

Type 4 Surface Water Permits -- Wetlands

Wetlands General Permit

Authorization

Type 4

Waste Management Permits -- Solid

Waste Management

Categorical Mining Waste

Certification

Type 4

Waste Management Permits -- Solid

Waste Management Categorical Solid Waste Certification

Type 4

Waste Management Permits -- Solid

Waste Management

Insignificant Waste Management

Event Approval

Type 4

Waste Management Permits -- Solid

Waste Management

Medium Composting Facility

Certification

Type 4

Waste Management Permits --

Underground Storage Tanks

Category 1 Underground Storage

Tank - New Construction

Type 4

Waste Management Permits --

Underground Storage Tanks

Category 1 Underground Storage

Tank - Operating Renewal

Type 5

Groundwater Permits -- Drinking

Water

Public Water System General Permit

to Operate - Transient Non-

Community

Type 5

Groundwater Permits -- Drinking

Water

Public Water System Individual

Permit to Operate

Type 5

Groundwater Permits -- Drinking

Water

Authorization of Notice of Intent -

Public Water System General Permit

to Operate - Transient Non-

Community

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Type 5

Groundwater Permits -- Drinking

Water

Public Water System- Emergency

Construction Permit

Type 4

Groundwater Permits -- Drinking

Water

Approval to Sell Bottled Water in

Vermont

Type 5

Surface Water Permits – Lakes and

Ponds

Aquatic Nuisance Control Rapid

Response General Permit: Notice of

Intent

Type 5

Surface Water Permits -- Lakes and

Ponds Shoreland Project Registration

Type 5 Surface Water Permits -- Rivers

Flood Hazard Area River Corridor

Registration

Type 5 Surface Water Permits -- Rivers

Stream Alteration General Permit

Emergency Protective Measure

Type 5 Surface Water Permits -- Rivers

Stream Alteration General Permit

Next Flood Measure

Type 5 Surface Water Permits -- Rivers

Stream Alteration General Permit

Registration

Type 5 Surface Water Permits -- Rivers

Stream Alteration Mineral

Prospecting

Type 5

Surface Water Permits --

Wastewater Emergency Pollution Permit

Type 5

Waste Management Permits --

Hazardous Waste

Temporary Haz Waste Emergency

Certification

Type 5

Waste Management Permits -- Solid

Waste Management Compost Facility Registration

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

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Type 5

Waste Management Permits -- Solid

Waste Management

Emergency Sludge and Septage

Disposal Approval

Type 5

Waste Management Permits – Solid

Waste Management

Beverage Redemption Facility

Certification

Type 5

Waste Management Permits --

Underground Storage Tanks

Category 1 Underground Storage

Tank - Emergency Permit

Vermont Agency of Natural Resource Final Proposed Rule May 29, 2018

43

APPENDIX B – LARGE AND COMPLEX PROJECTS

When any trigger for a large and complex project occurs, the whole project shall be

subject to the requirements of § 37-510. An application for a permit containing any

of the following shall be a trigger for a project being large and complex:

(1) Air construction permits that meet or exceed federal major source

levels (50 tons per year for volatile organic compounds; 100 tons per

year for nitrogen oxide; and 250 tons per year for particulate matter,

sulfur dioxide; or carbon monoxide).

(2) A construction stormwater permit where the total earth disturbance is

greater than 50 acres. This shall not include the redevelopment or

expansion of linear transportation projects.

(3) An operational stormwater permit where the total new impervious

surface is greater than 15 acres. This shall not include the

redevelopment or expansion of linear transportation projects.

(4) A wetland permit that impacts ten or more significant wetlands or

their buffers.

(5) A wetlands permit that authorizes wetland impacts greater than one

acre.

(6) A new wastewater treatment facility.

(7) Any new significant industrial direct discharge.

(8) The expansion of any direct discharge with an increase in design flow

greater than 25 percent.

(9) An in-lake management project designed to alter the water chemistry

of a waterbody.

(10) An aquatic nuisance control permit for the application of a chemical

that is not a pesticide in a water of the State. This shall not include

private ponds.

(11) A new or the lateral expansion of an existing solid waste landfill.

(12) A new municipal solid waste incineration or gasification facility.

12-11-17 ICAR Minutes, Page 1 of 5

State of Vermont [phone] 802-828-3322 Office of the Secretary Agency of Administration [fax] 802-828-3320 109 State Street Montpelier, VT 05609-0201 www.aoa.vermont.gov

INTERAGENCY COMMITTEE ON ADMINISTRATIVE RULES (ICAR) MINUTES

Meeting Date/Location: December 11, 2017, Pavilion Building, 5th floor conference room, 109 State

Street, Montpelier, VT 05609

Members Present: Chair Brad Ferland, Dirk Anderson, Diane Bothfeld, John Kessler, and Steve Knudson; and Karen Songhurst, Ashley Berliner, and Jen Duggan via phone

Members Absent: Clare O’Shaughnessy

Minutes By: Melissa Mazza-Paquette • 2:02 p.m. meeting called to order, welcome and introductions. • Review and approval of minutes from the November 13, 2017 meeting.

o Motion made to accept the minutes by John Kessler, seconded by Dirk Anderson, and passed unanimously.

• No additions/deletions to agenda. o Motion made to accept agenda as is by Dirk Anderson, seconded by John Kessler, and passed

unanimously. • No public comments made. • Presentation of Proposed Rules on pages 2-5 to follow.

1. Vermont Criminal Justice Training Council Rules & Regulations, Vermont Criminal Justice Training Council, page 2

2. Services to Incapacitated Inebriates, Agency of Human Services, Department of Health, page 3 3. Graduated Sanctions for Violations of Probation, Agency of Human Services, Department of

Corrections, page 4 4. Uniform Environmental Administrative Procedure and Standard Processes for Notice and Comment on

Environmental Permits, Agency of Natural Resources, page 5 • Next scheduled meeting is January 8, 2018 at 2:00 p.m. • Motion made to adjourn by Steve Knudson, seconded by Dirk Anderson, and passed unanimously. • 2:55 p.m. meeting adjourned.

12-11-17 ICAR Minutes, Page 2 of 5

Proposed Rule: Vermont Criminal Justice Training Council Rules & Regulations, Vermont Criminal Justice Training Council Presented by: Drew Bloom, Jacob Humbert, and Cindy Taylor-Patch

Motion made to accept the rule by Steve Knudson, seconded by Diane Bothfeld, and passed unanimously, with the following recommendations:

1. Proposed Rule Coversheet, page 1, Printed Name and Title: Spell out VCJTC and include acronym in parentheses at the end.

2. Proposed Rule Coversheet, page 2, #1: Include the name of the rule. 3. Proposed Rule Coversheet, page 2-3, #6: Stated is “…the Vermont Criminal Justice Training

Council (hereinafter called the Council)…”, however throughout the filing the terminology is inconsistent, using both references as well as VCJTC. Consistency throughout would be helpful.

4. Proposed Rule Coversheet, page 4, #8: Update ‘Commissioner Robert Ide’ to Acting Commissioner Wanda Minoli. Remove the last comma after TJ Donovan, Esq.

5. Proposed Rule Coversheet, page 5, #10: Further explain ‘minimal’ when referring to the fiscal impact.

6. Proposed Rule Coversheet, page 5, #11: Suggest scheduling a public hearing. 7. Economic Impact Statement, page 3: Where N/A is stated, explain reasoning. 8. Public Input Statement, Page 1, #4: If ‘Vermont State’s Attorneys’ is meant to be ‘Vermont

Department of State’s Attorneys and Sheriffs’ please update.

12-11-17 ICAR Minutes, Page 3 of 5

Proposed Rule: Services to Incapacitated Inebriates, Agency of Human Services, Department of Health Presented by: Shayla Livingston

Motion made to accept the repealed rule as presented by John Kessler, seconded by Dirk Anderson, and passed unanimously.

12-11-17 ICAR Minutes, Page 4 of 5

Proposed Rule: Graduated Sanctions for Violations of Probation, Agency of Human Services, Department of Corrections Presented by: Sarah Truckle, Dale Crook, and Kurt Kuehl

Motion made to accept the rule by Diane Bothfeld, seconded by Dirk Anderson, and passed unanimously, with the following recommendations:

1. Administrative Rule Review: This page is for internal routing purposes only and doesn’t need to be

included in the filing. 2. Proposed Rule Coversheet, pages 2-3, #5: Expand on confidentiality. 3. Proposed Rule Coversheet, page 3, #7: Define previously what ‘DOC’ is. 4. Proposed Rule Coversheet, page 4, #10: Provide a point of context reference for the savings. 5. Economic Impact Statement: Where ‘None’ is stated, explain reasoning. 6. Public Input Statement, page 1, #3: Change 2017 to 2018. 7. Graduated Sanctions for Violations of Probation, page 2 of 3, #4(a)(i): Define ‘EPICS’.

12-11-17 ICAR Minutes, Page 5 of 5

Proposed Rule: Uniform Environmental Administrative Procedure and Standard Processes for Notice and Comment on Environmental Permits, Agency of Natural Resources Presented by: Matt Chapman and Kim Greenwood

Motion made to accept the rule by Diane Bothfeld, seconded by John Kessler, and passed unanimously except for Jen Duggan who abstained, with the following recommendations:

1. Proposed Rule Coversheet, page 3, #7 and later: Previously define ‘ANR’ 2. Proposed Rule Coversheet, page 4, #13: Change 2017 to 2018. 3. Proposed Rule Coversheet, page 4, #14: Spell out ‘ENB’ and include acronym after in parentheses. Add

‘CAFO’ and define. 4. Public Input Statement, page 1, #4: Define ‘VBA’ and ‘VLCT’. Add agricultural and other state

agencies. 5. Subchapter 5. Standard Procedures for Permit Processing, page 18, §37-503: Add ‘ENB’ in

parentheses. 6. Subchapter 5. Standard Procedures for Permit Processing, page 25, §37-505(c)(2) and (3) and page 26,

§37-506(c)(3): Change ‘14 days’ and ‘14 days’’ to ‘a 14-day’. 7. Subchapter 5. Standard Procedures for Permit Processing, page 25, §37-505(d): Remove ‘of the’ in the

3rd line as it’s duplicated.

Vermont Agency of Natural Resources

Final Proposed Rule

May 29, 2018

1

STATE OF VERMONT

AGENCY OF NATURAL RESOURCES

DEPARTMENT OF ENVIRONMENTAL CONSERVATION

UNIFORM ENVIRONMENTAL

ADMINISTRATIVE PROCEDURE AND

STANDARD PROCESSES FOR NOTICE AND

COMMENT ON ENVIRONMENTAL PERMITS

RESPONSE TO COMMENTS

May 29, 2018

Comment: Several of the numbered minimum requirements of a petition are

overly onerous. Specifically, section 37-301(b)(5), which requires the

petitioner to supply a list of the people, enterprises, and government

entities that may be affected by the rule or procedure and an estimate

of the costs and benefits to each of those entities, is overly burdensome

if the petitioner does not have the financial resources to employ a

consultant to measure the costs or benefits of a new or revised rule or

procedure. We suggest amending this language to require a narrative

description of the costs and benefits to those entities listed. This would

accomplish the goal of ensuring there is information regarding the

impact of the rule without being overly burdensome to petitioners. In

addition, section 37-301(b)(7), which requires submission of a written

draft of the proposed rule or procedure, is similarly overly

burdensome. We suggest the submission of draft language be

encouraged and recommended as a part of a petition, but not a

required component. We recommend that the rule be amended to allow

either the submission of a draft proposed rule or a narrative

description of the rule a petitioner is requesting that ANR propose

Response: The Vermont Administrative Procedure Act (VAPA) creates a right for

a person to petition an Agency to adopt a rule. In some instances,

whether an Agency adopts a rule is discretionary and in others the

Agency is required to initiate rulemaking proceedings. See 3 V.S.A. §§

808 and 831(c). In both instances, the Agency is required to make a

decision within 30 days of receiving a petition.

In order to meet this 30-day requirement, it is reasonable to require

the petitioner to fully develop his or her petition prior to filing it with

the Agency. This includes providing a draft of the proposed rule and to

touch on the information that the Agency is required to consider

during its assessment of a rule under the VAPA.

Vermont Agency of Natural Resources

Final Proposed Rule

May 29, 2018

2

The rule was not intended to require a petitioner to identify every

person affected by the rule and describe economic impacts, in a specific

way, to those persons. The following change has been made in

response to this comment:

(5) A description list of the people, enterprises, and government entities

that may be affected effected by the rule or procedure and an estimate of

the costs and benefits to each of those entities;

Comment: It is important that ANR is transparent about its response to

petitions. As such, the Department should post on its website all

responses to petitions-both those that were granted, and those that

were denied. We suggest inserting this as a requirement in section

37-301(c).

Response: Agreed. The following change will be made to the rule:

(d) The Secretary shall post any petition for a rulemaking and its response

on the Agency website.

Comment: The issue of administrative continuation of permits is potentially

problematic if continuation goes on for too many permit cycles.

There are examples of facilities operating under permits that are

more than 15 years old. It is unacceptable for these permits to

continue authorizing activities that have an environmental impact

for such a long period of time without a thorough review from

ANR. As such, we suggest this rule should include a reasonable

timeframe in section 37-303 restricting how many years in a row a

permit can be administratively continued. As the rule is drafted, it

appears that permits could be administratively continued

indefinitely.

Response: No changes will be made in response to this comment. The purpose

of the administrative continuation provisions of the VAPA (3 V.S.A.

§ 814(b)) is to hold permit holders harmless when an Agency fails to

complete its consideration of a permit prior to the expiration of a

permit. Making the proposed change would be inconsistent with

the purpose of the statute, however, the Agency agrees to make the

following change to § 37-303:

Note: Absent a compelling reason, long-term administrative continuations

should be rare and are generally disfavored by the Agency.

Vermont Agency of Natural Resources

Final Proposed Rule

May 29, 2018

3

Comment: We strongly support the Rule's adoption of the majority rule

interpretation of the vested rights doctrine in section 37-304,

wherein the statutory and regulatory requirements applicable to

a permit are those in effect on the date that the Department's

draft decision is issued. The ANR's current practice of reviewing

a permit application based on the requirements in effect on the

date of the permit application t (i.e., the minority rule

interpretation) is highly problematic and not adequately

protective of the environment. This is because the minority view

allows for scenarios where permit applications are reviewed

against woefully out-of-date environmental rules and standards.

For example, an entity could apply for a stormwater discharge

permit in 2010, but due to project delays or changes, ANR does

not issue its draft decision on the permit until 2017. Under the

minority interpretation, that permit would be judged against the

2011 Vermont Water Quality Standards, even though the State

has adopted revised Water Quality Standards in both 2014, and

2016. It is not adequately protective of the environment-nor does

it make logical sense-to review a permit submitted in 2016

against Water Quality Standards adopted five years prior when

the science and understanding of pollutant loads has changed in

the intervening years and the State has adopted newer rules and

standards as a result. In sum, we support this proposed change to

move to the majority rule vested rights doctrine. This is a much-

needed change that will apply to the variety of regulations and

permitting programs ANR administers and provide more clarity

(there have been many disputes over when an application was

deemed "complete" under the minority rule vested rights posture),

and it will be better protective of our natural resources.

Response: The concept of vested rights is a common law principle not articulated

in the VAPA. The Vermont Supreme Court has addressed the question

of when an applicant’s rights vest in a regulatory structure, following

the minority rule. The Courts decisions have primarily been in the

area of land use law (planning and zoning as well as Act 250). The

Agency agrees with the comment. When considering environmental

permits that have a primary purpose to protect human health and the

environment, the Agency should examine the standards in place at the

time of administrative disposition of the permit (at issuance of a draft

permit). This approach has the added benefit that it is consistent with

how federally delegated permit programs are required to view vested

rights pursuant to federal regulation and EPA decisions.

Vermont Agency of Natural Resources

Final Proposed Rule

May 29, 2018

4

Comment: It is important for the hearing officer to be seen as impartial and

insulated from internal influence by ANR. What mechanisms will

be employed to ensure that they serve in an objective fashion? In

addition, we have concerns about whether the hearing officer

should be able to communicate with the Commissioner or

Department employees, which could influence the objectivity of the

hearing officer. We request that the rule provide that there be no ex

parte communication between the hearing officer and the

Commissioner or Department employees. Input from these entities

should be part of the record.

Response: Ensuring that hearing officers are impartial is of significant

importance with respect to how contested cases are conducted. When

the Agency conducts a contested case, the appointing authority (either

the Commissioner or Secretary) acts as a decision-maker in a quasi-

judicial proceeding or delegates that authority to a hearing officer.

3 V.S.A. § 813 prohibits ex parte consultation but then says

communications with “department employees” and “personal

assistants” are not ex parte contacts. The proposed change in § 37-403

further clarifies and restricts which “department employees” may be

communicated with as a part of a proceeding. The purpose of these

limited exceptions is to ensure that the decision-maker has access to

technical professionals to evaluate the evidence and testimony

submitted by the parties. This provision was based on Section 408 of

the 2010 Model State Administrative Procedures Act.

Specifically, the proposed rule restricts contacts with employees to

those not personally and substantially involved with the matter on

appeal, department employees has not communicated with a party in

the case, and the communications are to help the hearing officer

understand matters in the record. No changes will be made in

response to these comments.

Comment: It is important that the Commissioner have authority to revoke a

permit under any situation in which the permit is or may be

harmful to human health or the environment. Accordingly, we

suggest inclusion of a catch-all provision to this effect under section

37-404(2), perhaps as subheading (F).

Response: Agreed. The following change will be made to the proposed rule:

(D) specific grounds for revocation identified in the rules governing the activity

has occurred; or

Vermont Agency of Natural Resources

Final Proposed Rule

May 29, 2018

5

(E) the holder of the permit has requested that it be revoked; or.

(F) the creation of a condition that may present a significant threat to human

health or the environment.

Comment: The proposed rule should allow a person to petition for a permit to

be revoked. Often citizens are the ones that identify and are

affected by permit violations or misrepresentations. These citizens

should be allowed to petition to revoke a permit if the person can

provide a basis for doing so.

Response: Currently, most administrative rules administered by the Agency

have unique requirements on how to revoke a permit issued under

those rules. This is an effort to create a single standard for those

revocation processes without materially changing our current

revocation process. Since, as a general matter, a person does not

currently have a right to petition for a permit to be revoked, the

Agency does intend to create such a right as a part of this rule.

This does not limit a person’s ability to request that the Agency

exercise its discretionary authority to revoke a permit. No changes

will be made in response to this comment.

Comment: In regards to providing notice to persons under section 37-404(b),

will this include people who commented on the underlying permit

that is being revoked? We believe people who commented of the

underlying permit should receive notice of a permit revocation.

Response: The proposed rule defines what constitutes a necessary party for

purposes of receiving notice in a contested case. Necessary parties

are identified as persons who have a legal interest related to the

subject of the proceeding and a failure to participate in the proceeding

could result in that person being unable to protect that legal interest.

That being stated, the following change will be made to the notice

section:

(c) Interested persons. When applicable, the Secretary should provide notice to

any person who commented on the Department action that is subject to the

revocation proceeding. A failure to provide an interested person with notice

shall not create a procedural defect to the proceeding.

Comment: In regards to party status and entry of appearance, we are

concerned that a party must provide a statement outlining how

they will be affected by the potential outcome of the proceeding

Vermont Agency of Natural Resources

Final Proposed Rule

May 29, 2018

6

versus how they may be affected by the outcome in order to

participate. We believe the "will" in this section should be changed

to "may." This is consistent with standard for party status in ANR

permit appeals filed with the Environmental Division of Superior

Court under 10 VSA Chapter 220.

Response: Agreed. The rule will be changed as follows:

(4) A statement on how the interests of the person entering an appearance are or

may be affected by the subject matter and may will be affected by the potential

outcome of the proceeding.

Comment: We have a concern that the number of expert witnesses may be

arbitrarily capped. We believe there should be some rationale for

limiting experts.

Comment: Limiting proposed findings of facts and conclusions of law to no

more than 10 pages may be onerous for a large proceeding. Perhaps

a fifteen-page limit is more appropriate or an opportunity be

provided for a party to request that the page limitation and number

of expert witnesses be waived.

Response: These requirements were modeled after the Natural Resources

Board Rule of Practice and the Agency believes that it is reasonable

in proceedings such as this, however, we agree that the parties or

hearing officer should be able to set a different limit or waive this

requirement on a showing of good cause. The following change will

be made in response to this comment:

(d) All materials filed with the hearing officer shall comply with the following

page limits:

(1) Motions: No more than 10 pages.

(2) Memoranda, briefs, pleadings, and any other document not expressly

identified in this subsection: No more than 15 pages.

(3) Reply memoranda, reply briefs: No more than 15 pages.

(4) Proposed findings of fact and conclusions of law: No more than 10

pages.

(5) Prefiled testimony, rebuttal prefiled testimony: No limitation on

testimony or exhibits, unless established in scheduling order for the

proceeding.

Vermont Agency of Natural Resources

Final Proposed Rule

May 29, 2018

7

(e) The hearing officer may modify or waive the limitations established in

subsection (d) of this section upon a showing of good cause.

(f) All proposed findings of fact and conclusions of law shall cite to the

supporting evidence in the proceeding record and discuss the applicable legal

provisions showing how each element of a claim is met or not met based on the

facts of the proceeding.

Comment: Under section 37-408(d), can a witness be "available to appear"

telephonically, or must the witness be available to appear in

person? This should be clarified. We believe appearance by

telephone or other means like skype be allowed under the proposed

rule.

Response: This level of specificity is not necessary for this rule and can be

established as a part of the proceeding by agreement of the parties

or by order of the hearing officer. No changes will be made in

response to this comment.

Comment: The proposed rule does not articulate whether a decision in a

contested case proceeding or a denial of a petition for a proposed

rule denial may be appealed to the Environmental Division of

Superior Court. The rule should clarify that these decisions are

appealable and indicate what the standard of review would be

under such an appeal.

Response: The proposed rule does not establish or clarify appeal routes.

Appeal routes are established by statute. No changes will be made

to the rule in response to this comment.

Comment: We suggest the computation of time in section 37-502 be consistent

with the Vermont Rules of Civil Procedure to avoid confusion.

Response: How time is computed is established by statute. See 10 V.S.A. §

7705. No change will be made in response to this comment.

Comment: In regards to the number of days that are provided to request a

hearing, we believe 14 days is too short and request that this be

expanded to 30 days.

Vermont Agency of Natural Resources

Final Proposed Rule

May 29, 2018

8

Response: The 14 day period in which a person may request a public meeting

is set in statute. See 10 V.S.A. § 7711(d). No change will be made

in response to this comment.

Comment: In regards to additional notice requirements applicable to Clean

Water Act draft decisions, the notice should include a general

description of the location of each existing or proposed discharge

point the name of all receiving waters. As the text currently reads,

ANR only requires the listing of the immediate receiving water.

This distinction between immediate versus downstream or ultimate

receiving waters has no basis in the law. Pursuant to the definition of

"receiving waters" in the Vermont Water Quality Standards, all waters

downstream of a discharge are receiving waters. This rule should

reflect the correct definition of receiving waters.

Response: The immediate receiving water is the water in which the discharge

takes place. While we agree that standards apply to all receiving

waters, including downstream receiving waters, we believe that adding

numerous downstream waterbodies will be confusing for persons who

are interested in the proposed project. In addition, the Environmental

Notice Bulletin allows people to search projects by watershed, so this

larger view may be addressed through this. No changes will be made

in response to this comment.

Comment: In regards to final decisions in section 37-504(d), we support the

inclusion of a final fact sheet with final permit issuance. In our

experience, ANR has included the draft fact sheets with the final

permit issuances, which creates confusion if the permit underwent

changes between the draft and final phase.

Response: The Agency prepares a fact sheet to document the basis in the record

for issuing a permit. When the Agency issues a final permit it is

required to produce a response to comments and show the changes

between the draft decision and the final decision. Any changes from

the original decision will be documented in the response to comments

and summary of changes document. No changes will be made in

response to this comment.

Comment: There appears to be missing text in regards to "Type 5 Proceedings."

Also, based on the former Types 1-4 Procedures, we wonder whether

this is meant to read "Type 5 Procedures" instead of "Proceedings"?

Response: The following changes will be made in response to this comment:

Vermont Agency of Natural Resources

Final Proposed Rule

May 29, 2018

9

§ 37-501. TYPE 5 PROCEDURES PROCEEDINGS

(a) Purpose; scope.

(1) The purpose of this section is to establish the public notice and comment

requirements that the Department must follow when issuing emergency

permits and other permits listed in this section.

(2) The procedures under this section shall be known as Type 5 Procedures.

This section shall govern each of the following:

(A) issuance of temporary emergency permits under 10 V.S.A. § 912;

(B) applications for public water system operational permits under

10 V.S.A. chapter 56 of this title;

(C) issuance of authorizations, under a stream alteration general

permit issued under 10 V.S.A. chapter 41, for reporting without

an application, for an emergency, and for activities to prevent

risks to life or of severe damage to improved property posed by

the next annual flood;

(D) issuance of emergency permits issued under 10 V.S.A. § 1268 of

this title;

(E) issuance of emergency sludge and septage disposal approvals

under 10 V.S.A. § 6605; and

(F) shoreland registrations authorized under 10 V.S.A. chapter 49A.

(b) Final Decisions. When the Secretary issues a final decision on an application,

the Secretary shall post a copy on the environmental notice bulletin of the of

the final decision.

(c) Additional Notice. At any time during the review of an application, the

Secretary may require that a permit being reviewed under the procedures of

this section may be reviewed under § 37-504 (Type 2 Procedures). When

making this determination, the Secretary may base the decision on the size,

complexity, potential environmental impact, or degree of public interest

associated with the project.

Comment: We strongly support the pre-application public informational

meeting and believe this was an important underlying policy in Act

150. We believe more clarity is needed regarding the duty of the

applicant to answer questions and provide relevant information. For

example, the rule should require the applicant to respond to

questions by a date certain if they don't or can't provide answers at

the meeting. In addition, the rule should provide more clarity about

how the parties should be obligated in the pre-application process to

Vermont Agency of Natural Resources

Final Proposed Rule

May 29, 2018

10

eliminate points of concern or improve the overall permit

application.

Response: The rule currently requires that an applicant respond to any

comments or questions raised at the pre-application public

informational meeting. The Agency does not believe that it is

reasonable to eliminate points of concern in light of the fact that

the pre-application process is fundamentally a procedural

requirement.

Comment: In regards to the triggers for large and complex projects, we believe

the triggers are too large, and will likely result in few actual pre-

application meetings. We strongly encourage you to lower these to

more reasonable triggers. We would like the opportunity to meet

with ANR to discuss what more reasonable triggers would be. We

also recommend that the rule allow an applicant to engage in the

formal scoping review on its own, or if requested by a party that may

be affected by a project.

Response: The Agency will amend § 37-509(a), as follows, to clarify that a

permit applicant may voluntarily initiate a project scoping process.

The Agency has reviewed the thresholds for when a pre-application

informational meeting is required and concluded that they are good

start for constitutes a large and complex project. The Agency will

periodically review Appendix B to determine whether adjustments

should be made. Further, the Agency does not believe that it is

appropriate to collect information after the close of the comment

period to modify these thresholds.

(a) Applicability. This section shall apply to the permit applications identified in

Appendix B of this rule or any person may voluntarily conduct a pre-

application informational meeting as provided in this section.

Comment: The proposed rule does not articulate whether an appeal of a permit

goes to the Environmental Division of Superior Court for de novo

review. The rule should clarify whether this is the case.

Response: The proposed rule does not establish or clarify appeal routes.

Appeal routes are established by statute. No changes will be made

to the rule in response to this comment.

Other changes

Vermont Agency of Natural Resources

Final Proposed Rule

May 29, 2018

11

1. The following amendments were made to § 37-201 make the proposed rule

consistent with the changes enacted in H. 908:

(15) “Guidance document” means a written record that has not been adopted

in accordance with 3 V.S.A. chapter 25 and that is issued by an agency to

assist the public by providing an agency’s current approach to or

interpretation of law or describing how and when an agency will exercise

discretionary functions. The term does not include the documents

described in subdivisions (25)(A) through (F) of this section.

* * *

(16) “Procedure” means a practice that has been signed by the Commissioner

and posted in the electronic compellation under § 37-303, either at the

election of the Agency or as the result of a request under § 37-302 adopted

in writing at the election of the agency or as the result of a petition under

37-301. The term includes any practice of any agency that has been

adopted in writing, whether or not labeled as a procedure, except for each

of the following:

(A) a rule adopted pursuant to 3 V.S.A. chapter 25;

(B) a written document issued in a contested case that imposes

substantive or procedural requirements on the parties to the

case;

(C) a statement that concerns only:

(i) the internal management of an agency and does not

affect private rights or procedures available to the

public;

(ii) the internal management of facilities that are secured

for the safety of the public and the individuals

residing within them;

(iii) guidance regarding the safety or security of the staff

of an agency or its designated service providers or of

individuals being provided services by the agency or

such a provider;

(D) an intergovernmental or interagency memorandum,

directive, or communication that does not affect private

rights or procedures available to the public;

(E) an opinion of the Attorney General; or

(F) a statement that establishes criteria or guidelines to be used

by the staff of an agency in performing audits,

investigations, or inspections, in settling commercial

disputes or negotiating commercial arrangements, or in the

defense, prosecution, or settlement of cases, if disclosure of

the criteria or guidelines would compromise an

Vermont Agency of Natural Resources

Final Proposed Rule

May 29, 2018

12

investigation or the health and safety of an employee or

member of the public, enable law violators to avoid

detection, facilitate disregard of requirements imposed by

law, or give a clearly improper advantage to persons that

are in an adverse position to the State.

2. The following change to § 37-301 in response to an oversight / confusion

surrounding the interplay between 3 V.S.A. §§ 806 and 831(c)

(a) Generally. Any person may submit a petition requesting that the

Commissioner adopt, amend, or repeal a rule or procedure. If the petition is to

adopt a procedure as a rule and is accompanied by the signatures of 25

persons or made by the Legislative Committee on Administrative Rules, then

the Commissioner shall initiate the rulemaking process.

Note: The Commissioner is not required to file a petition to initiate the rulemaking

process under 3 V.S.A. chapter 25.

3. The following change was made to § 37-302 to make the proposed rule

consistent with H. 908:

On or before July 1, 2019, the Department shall maintain an electronic compilation

of all procedures and guidance documents on the Department webpage. The

compilation shall be organized by subject and contain the date the procedure or

guidance document was adopted. Each addition, change, or deletion to the official

compilation shall also be signed, dated, indexed, and recorded. The most recently

dated procedure shall be the effective procedure. Any procedure or guidance

document that does not appear in the electronic compilation shall no longer be

effective. The Department shall not rely on a procedure or guidance document or cite

it against any party to a proceeding, unless the procedure or guidance document is

included in a compilation maintained and published in accordance with this section.

4. The following amendment was made to § 37-504(a) to ensure consistency with

a recently adopted amendment to federal rule that changes the treatment of

notices of intent under the municipal separate storm sewer program:

(2) This section governs each application for a permit to be issued by the Secretary

pursuant to the requirements of the Clean Air Act or Clean Water Act and to

each general permit to be issued under one of those acts. However, the

subsection does not apply to a notice of intent under a general permit, except

as required under 40 C.F.R. § 122.28(d)(2) for notices of intent under a

Municipal Separate Storm Sewer System (MS4) “two-step general permit”.

The procedures under this section shall be known as Type 1 Procedures.

Vermont Agency of Natural Resources

Final Proposed Rule

May 29, 2018

13

5. The following section was added to ensure consistency with 10 V.S.A. chapter

170:

§ 37-502. AMENDMENTS; RENEWALS

(a) A major amendment shall be subject to the same procedures applicable to the

original permit decision under this rule.

(b) A minor amendment shall be subject to the Type 4 Procedures, except that the

Secretary need not provide notice of the administratively complete application.

(c) An administrative amendment shall not be subject to the procedural

requirements of this rule.

(d) A person may renew a permit under the same procedures applicable to the

original permit decision under this chapter.

(e) With respect to amending a permit issued under the Clean Air Act or Clean

Water Act, if a requirement under those acts directs the Secretary to provide

the public with greater notice, opportunity to participate, or access to

information than the corresponding requirement of this rule, the Secretary

shall comply with the federal requirement.

6. Cross references to 37-309 were modified to 37-310 in 37-303(d), 37-504(b)(3),

37-505(b)(5) and Appendix B due to adding a new section to address

amendments.

7. The following changes were made to Appendix A:

- Added Municipal Separate Storm Sewer System (MS4) General Permit 3-

9014: Notice of Intent to Type 1 and deleted from Type 4.

- Added Transportation Separate Storm Sewer System (TS4) General Permit

3-9007 to Type 1 and deleted from Type 4.

- Added Transportation Separate Storm Sewer System (TS4) General Permit

3-9007: Notice of Intent to Type 1 and deleted from Type 4.

- Added Municipal Roads General Permit (MRGP) 3-9040 to Type 1.

- Added Municipal Roads General Permit (MRGP) 3-9040: Notice of Intent to

Type 4.

- Added Beverage Redemption Facility Certifications to Type 4.

Vermont Agency of Natural Resources

Final Proposed Rule

May 29, 2018

14

- Added Authorization of Notice of Intent - Public Water System General

Permit to Operate - Transient Non-Community to Type 5 and deleted from

Type 4.

- Added Aquatic Nuisance Control Rapid Response General Permit: Notice of

Intent to Type 5.

- Added Approval to Sell Bottled Water in Vermont to Type 5 and deleted it

from Type 4.

District #4 Commission

Week of May 23, 2018

Preliminary Agenda Items:

4C1312 Kwiniaska – Discuss Hearing (Parker, Monique, Kate)

8 new minors - Discussion

Majors

4C1206-4 Intervale (Tom, Parker, Monique) relocate silo onsite and make changes to allowed uses HRO

issued (Stephanie)

4C1173-2 Spear Meadows (Tom, Monique, Kate) 47-units HRO closes June 1st (Rachel)

4C1312 Kwiniaska (Parker, Monique, Kate) golf course consolidation HRO closes June 20th (Rachel)

Minors

Off-Notice:

Off-Notice & awaiting information:

4C0980-3A DeVita (Parker, Monique, Kate) 3-lot subdivision from previously-approved Lot #5

Applicant requested extension until 7/30/18 to address arch concerns, need Town permit Off Notice

since October 2, 2017 (Bill Burke)

4C0400-19C CSWD (Tom, Monique, Kate) continued extraction from Williston sand pit Needs cgp,

deed list, wetland site visit, T&E plant survey Off Notice since October 27, 2017 (Stephanie)

4C0550-3E Mansfield Heliflight (Tom, Parker) addition to existing building – Off Notice December 28,

2017 Needs town permit (Rachel)

4C0619-12 Town of Milton Dog Park (Tom, Jim, Kate) construction of a dog park in Bombardier Park -

Off Notice since March 21, 2018 Needs arch survey (Rachel)

4C1313 26 McMullen (Parker, Jim, Kate) 6-lot subdivision and construction of residences - Off Notice

since April 18, 2018 Needs epsc plans, cwr plans (Stephanie)

4C1275-1A Bayberry, LLC (Tom, Parker, Monique) increase from 232 to 235 units, add 4th story to

bldgs. S & T, eliminate bldg. E - Off Notice since April 27, 2018 Needs ww (Stephanie)

4C1035-7 The Commons at Windekind (Tom, Parker, Monique) 10 lot residential subdivision - Off

Notice since April 27, 2018 Needs ww (Stephanie)

4C720R-7A Cathedral Square (Parker, Monique, Jim) landscaping/fencing at former Respite House (new

memory care facility) in Williston - Off Notice since April 30, 2018 Needs town approval (Stephanie)

4C0942R-3 Pinnacle at Spear (Tom, Jim, Kate) retrofit 4 existing stormwater ponds- Off Notice since

May 4, 2018 needs cgp (Stephanie)

Deemed Complete and Notice sent to Parties:

4C0608-30C Essex Residences (Tom, Monique, Jim) boundary adjustment & construction of 27-unit

residential bldg. Off Notice May 29, 2018 (Stephanie)

4C0335-6 Bullrock Corp (Parker, Jim, Kate) demo a building and construct a temporary storage structure

Off Notice May 31, 2018 (Rachel)

4C0821-7 The Commons (Tom, Jim, Kate) retrofit existing stormwater pond Off Notice June 4, 2018

(Rachel)

District #4 Agenda May 23, 2018 Page 2 of 2

4C1081-2 Shelburne Self Storage (Tom, Monique, Kate) addition to existing self-storage facility Off

Notice June 6, 2018 (Rachel)

4C1292-1A River’s Edge (Tom, Parker, Monique) 49-unit development, partial findings issued

previously Off Notice June 8, 2018 (Rachel)

4C1138-5A Cupola Golf Course/Quarry Hill (Tom, Monique, Kate) 3 new buildings on Lot QH3 – 88

residential units/1 commercial bldg. Off Notice June 8, 2018 (Stephanie)

4C1301-1 Cambrian Rise (Tom, Parker, Monique) revisions to bldgs. B, C & G Off Notice June 8, 2018

(Stephanie)

4C0883-4 Hilton & Elaine Place (Parker, Jim, Kate) 2-lot subdivision and 2 residential dwellings Off

Notice June 11, 2018 (Stephanie)

4C0288-19E Costco (Tom, Parker, Jim) ~2,000sqft building extension to house a produce cooler Off

Notice June 11, 2018 (Rachel)

Currently Incomplete:

4C0534-6 Rowley Fuels (Tom, Jim, Monique) after-the-fact approval of a 28,200 s.f. gravel pad for the

storage of propane tanks Milton is not allowing this; applicant is rethinking options (Stephanie)

4C0662-3 Old Stage Estates needs wetlands application, letter sent 5/11/16

4C1310 Milton Farms, LLC (Monique, Jim, Kate) construction of 6,000 sf event barn Incomplete letter

sent 2/8/18 (Stephanie)

4C0288-19D Costco (Tom, Parker, Jim) stormwater modifications Incomplete letter sent 4/5/18

District Projects on Appeal:

JO 4-247 Laberge Shooting Range –LaBerge and the neighborhood group’s cross motions to reconsider

the court’s decision on cross motions for summary judgment were denied – case moving to trial

4C1271 DDI – appealed Commission decision

Decisions Issued in Last 30 Days:

4C0846-1C Mittlebusher (Parker, Kate) Permit issued April 24, 2018 (Stephanie)

4C0558-5C Bellis (Tom, Parker) Permit issued May 1, 2018 (Stephanie)

4C0720R-13 Taft Farms (D7) Permit issued May 1, 2018 (Kirsten Sultan)

4C0887-1R-L Finney Crossing (Parker, Monique, Kate) Findings/Permit issued May 3, 2018 (Rachel)

4C1173-2 Spear Meadows (Tom, Monique, Kate) HRO issued May 3, 2018 (Rachel)

4C1041-1A Gonzo’s Golf Academy (Parker, Kate, Jim) Permit issued May 10, 2018 (Rachel)

4C1292-2 Brigante Woods (Parker, Jim) Permit issued May 15, 2018 (Rachel)

4C1312 Kwiniaska (Parker, Monique, Kate) HRO issued May 15, 2018 (Rachel)

4C0310-3C Alan Palmer (Tom, Parker Monique) Permit issued May __, 2018 (Stephanie)

Additional information is available at: http://nrb.vermont.gov/act-47

Vermont Bar Association – Continuing Legal Education

Legislative Update for the Environmental Section, June 12, 2018

Jon Groveman, Warren Coleman and Trey Martin

Outline and Overview of Bills

1. Clean Water

a. H.576 – Storm Water Management. In H.576, the legislature enacted a new

requirement to require storm water management on new projects totaling one-half

acre or more of impervious surface beginning in 2022. The bill also gave the

Agency of Natural Resources additional time to finalize the rule relating to storm

water management on parcels containing three acres or more of impervious

surface.

ANR told the committees early in the session that it was seeking a more targeted,

effective method of managing storm water based upon work done in other

regions. The bill requires all areas of the state outside of Lakes Champlain and

Memphremagog to adopt the same stringent standards by 2033. (H.576)

b. S.260 – Clean Water Funding. Ideas ranging from a $2 per night tax on lodging

to recovery of lost bottle deposit revenue and an increase in the rooms and meals

tax ran through the House and Senate in S.260, but none of the proposals made it

into law. The version of the bill that did pass contained mostly consensus changes

to various environmental laws.

The Scott Administration had been charged with recommending a funding source

between sessions for significant investments in clean water funding but failed to

do so. Secretary of Administration Susanne Young told the House Natural

Resources, Fish and Wildlife Committee in late April that there was adequate

funding for the next two budget years and plenty of time to identify a new funding

source next year. Scott added that he is likely to support a new funding source

next year. (S.260)

c. H.554 – Registration of Dams. House Natural Resources and Energy Committee

Chairman David Deen, D-Westminster, has made a legislative career of working

on water quality issues and has long sought to inventory and assess the condition

of privately-owned dams across the state. That wish came true this session with

the passage of H.554, and Deen has now announced his retirement from the

legislature. Under the bill, the Agency of Natural Resources will compile a list of

all dams that are not regulated under federal law. The dams will be assessed for

safety and the owners may be required to make improvements. The bill gives the

department broad authority to make rules to implement the law. (H.554)

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2. Toxics

a. S.197 – Private Right of Action for Medical Monitoring. A bill arising from

concerns about PFOA and PFOS deposition in North Bennington was of

significant concern to the business community. As passed by the Senate, S.197

would have established strict, joint and several liability for the release of harmful

substances into the environment and a private right of action for medical

monitoring for exposure to a hazardous substance. The House divided the bill into

two. As passed by both houses, S.197 would have allowed a person who is

exposed to a hazardous substance above background levels due to the tortious

action of another to receive medical monitoring for life regardless of whether a

disease is likely to occur. Governor Scott vetoed S.197 on May 22, 2018. (S.197)

b. S.103 – Chemicals of High Concern to Children. Gov. Phil Scott issued his first

veto of the session on S.103, a bill that was pulled from the Senate floor in the

final days of the 2017 session and resurrected in 2018. Later, House Republicans

with help from a few independents upheld the veto by a vote of 94-53.

As introduced, S.103 would have established a task force to review how

chemicals are regulated in the state, including chemicals of emerging concern.

But amendments added in a House committee went beyond that intent and would

have made changes to the Chemicals of High Concern to Children program that

was enacted in a hard-fought battle in 2014. The amendments reduced the

importance of scientific analysis in selecting chemicals to add to the list and the

role of a working group named to advise the Department of Health. (S.103)

c. H.881 – Brownfields and Corrective Action Plans. Brownfield properties that are

subject to corrective action plans will not require an amendment to permits issued

under Act 250 based on language included in H.881. That language, which had

been added to the miscellaneous environmental bill, H.559, passed the legislature

as a part of S.287. The explicit language corrects an inconsistent ruling in one of

the five Act 250 land use management districts. (H.881, H.559, S.287)

3. Energy

a. H.924 – CoverageCo Funding. The final budget agreement includes a provision

authorizing the Department of Public Service to spend up to $100,000 from the

state’s Connectivity Fund to support E-911 services for CoverageCo, a wireless

service provider in a rural area of southern Vermont that is no longer in business.

Lawmakers were eager to find a way to support the company, although the DPS

expressed skepticism about providing state funding. The bill as passed requires

the company to present a viable business plan before receiving state assistance.

(H.924)

b. H.410 – State Energy Plan and Electric Grid Constraints. Lawmakers approved a

bill that imposes significant new reporting requirements for the Public Service

Department and its progress in meeting the goals of the state energy plan. The

3

PSD is required to report annually, and separately for the electricity, non-

electricity thermal fuels, and transportation sectors. The report also requires, for

each energy sector, reporting on major changes in relevant markets, technologies

and costs, as well as average Vermont prices compared to other New England

states.

In response to legislative concerns about electric grid constraints in northern

Vermont, the bill also includes new reporting requirements for the PSD as well as

the Public Utility Commission. The PUC is required to issue a summary of

findings in cases related to the Sheffield-Highgate Export Interface. The report

required by the PSD is intended to guide the legislature in determining how to

encourage the continued development of renewable energy without constraining

the electric grid and imposing unequal costs on ratepayers throughout the state.

(H.410)

c. H.739 – Self Managed Energy Efficiency Plans. Vermont companies will be able

to manage their own efficiency investments under the terms under this bill, which

also allows companies to count productivity improvements towards energy

efficiency, as well as investments in thermal energy efficiency. (H.739)

d. H.917 – Electric Vehicle Incentives. The annual transportation bill requires the

Public Utility Commission to conduct workshops and submit a report by July 1,

2019, regarding the charging of plug-in electric vehicles. The report is required to

address these issues:

• Removal of barriers to EV charging, including time-of-use rates

• Strategies to manage the impact of EVs on the electric system

• The appropriate role of utilities with respect to EV charging stations

• Recommendations on the regulation of EV charging stations

• How to require EV users to pay the cost of maintaining transportation

infrastructure

• Strategies to encourage greater EV usage

(H.917)

4. Land Use

a. S.276 – Rural Economic Development. As passed, S.276 establishes an outdoor

recreation community program in the Department of Forests, Parks and

Recreation, encourages forestry activity in rural areas, exempts certain forestry

activity from Act 250 and creates a nutrient management technical advisory

service in the Agency of Agriculture, Food and Markets. Other provisions seek

answers to high electric demand charges and high environmental permit fees in

rural areas. Provisions related to addressing forest fragmentation and allowing

citizen suits for violations of water quality laws were stripped from the bill in the

final days of the session. (https://legislature.vermont.gov/bill/status/2018/S.276)

4

5. Preview of Issues for 2019 Session

a. Toxics

b. Carbon Tax

c. SHEI

d. Standard Offer Updates

e. Electric Vehicles

f. Act 250 Commission

g. Forest Fragmentation

h. Water Funding and Clean Water Authority