Weyerhaeuser Co. v. State Dept. of Ecology, 43665

• Decision Date: 08 January 1976
• Docket Number: No. 43665,43665
• Citation: 86 Wn.2d 310,545 P.2d 5
• Parties: WEYERHAEUSER COMPANY, Respondent, v. STATE of Washington, DEPARTMENT OF ECOLOGY, Appellant.
• Court: Washington Supreme Court

Page 310

86 Wn.2d 310

545 P.2d 5

WEYERHAEUSER COMPANY, Respondent, v. STATE of Washington, DEPARTMENT OF ECOLOGY, Appellant.

No. 43665.

Supreme Court of Washington, En Banc.

Jan. 8, 1976.

Slade Gorton, Atty. Gen., Charles B. Roe, Jr., Joseph J. McGoran, Asst. Attys. Gen., Olympia, for appellant.

Lane, Powell, Moss & Miller, Robert R. Davis, Jr., G. Keith Grim, Seattle, for respondent.

HOROWITZ, Associate Justice.

This case presents a question of first impression concerning the validity of regulations adopted by the Department of Ecology (appellant) to govern its approval of applications for tax credit and exemption certificates under RCW ch. 82.34. We conclude the regulations are valid as a permissible interpretation and implementation of RCW ch. 82.34.

For 18 years Weyerhaeuser Company (respondent) operated in its Longview kraft paper mill three recovery boilers which performed two functions essential to the profitable production of pulp: (1) recovery of chemicals used in the pulping of wood chips, and (2) production of heat for steam used in the mill. Proper maintenance would have allowed these boilers to operate indefinitely at the same production levels.

In 1969 appellant issued regulations controlling gaseous emissions of sulphur into the atmosphere from kraft pulping mills. WAC ch. 18--36. Respondent concluded the most practical and economical way to meet these standards at its Longview mill was to replace the three existing boilers with one new and larger boiler (Boiler #10). Boiler #10 was not designed to increase pulp production. It was designed only to meet the 1975 sulphur emission limits, and perform the manufacturing function of the boilers replaced at the same production level. However, it should be pointed out Boiler #10 has a capacity somewhat in excess of the capacity required to handle current production levels; this excess capacity is to insure the boiler will comply with the emission limits regardless of daily fluctuations in pulp production. Boiler #10 also cuts operating costs at the mill approximately $500,000 per year. However, this sum is only about a 2 1/2 percent return on the total cost of the new boiler and new related equipment ($19.8 million). On the other hand, Boiler #10 will provide a larger depreciable basis than that of the replaced boilers.

RCW ch. 82.34 provides an applicant who installs a qualified pollution control facility is entitled to a tax credit and exemption certificate, which allows recovery of up to 55 percent of the capital cost of the facility over a 25-year period.

In 1970 respondent applied to appellant for such a certificate for the entire cost of Boiler #10. On December 7, 1972, appellant denied the application for such certificate. On January 10, 1973, respondent appealed to the Pollution Control Hearing Board (the board), pursuant to RCW ch. 43.21B. On March 4, 1974, the board entered a final order, overturning appellant's denial of the certificate. The board found that although Boiler #10 performs functions essential to the profitable production of pulp at Longview, nevertheless, the sole reason for its installation was to meet, in the most economical manner, appellant's 1975 sulphur emission limits. Therefore, the board concluded, respondent was entitled to the certificate for the entire cost of Boiler #10 because, in the words of RCW 82.34.030, it is 'designed and is operated or is intended to be operated primarily for the control, capture and removal of pollutants from the air . . .'

The superior court affirmed upon the same reasoning. Appellant appeals from the superior court judgment qualifying the entire cost of Boiler #10 for certification under RCW ch. 82.34.

The 'test' for determining the eligibility of Boiler #10 for a tax exemption certificate under RCW ch. 82.34 is set out in RCW 82.34.030 as follows:

A certificate shall be issued by the (department) (The Department of Revenue) within thirty days after approval of the application by the appropriate control agency (The Department of Ecology). Such approval shall be given when it is determined that the facility is designed and is operated or is intended to be operated primarily for the control, capture and removal of pollutants from the air . . . and that the facility is suitable, reasonably adequate, and meets the intent and purposes of chapter 70.94 RCW (Washington Clean Air Act) . . .

It is clear from RCW 82.34.030 that the eligibility 'test' is really three tests:

(1) The 'facility' must be Designed primarily for pollution control;

(2) The 'facility' must be Operated or intended to be operated primarily for pollution control;

(3) It must be suitable, reasonably adequate and meet the intent and purposes of RCW 70.94.

Both parties agree Boiler #10 meets tests (1) and (3). The dispute before the Board and superior court, and on this appeal, is whether Boiler #10 has met test (2)--the operational test.

Appellant has adopted regulations (WAC ch. 173--24) to administer the operational test. Appellant contends Boiler #10 does not meet the operational test of WAC 173--24--100 and therefore cannot be certified under RCW 82.34 for 100 percent of its cost. The validity of these regulations, therefore, is the first question to be answered.

Respondent contends, and both the board (Conclusion of Law VII) and the superior court (Conclusion of Law III) held that appellant's regulations, WAC 173--24, to the extent they deny certification of Boiler #10, are unlawful 'because they are outside the framework and policy of chapter 82.34 RCW.' For the reasons to follow, we disagree.

In determining the validity of WAC ch. 173--24, we first note that where the legislature specifically delegates to an administrative agency the power to make rules, there is a presumption such rules are valid. Trautman, Administrative Law Problems of Delegation and Implementation in Washington, 33 Wash.L.Rev. 33, 54 (1958) (burden lies with person attacking agency rule); See Malaga School Dist. v. Kinkade, 47 Wash.2d 516, 517, 288 P.2d 467 (1955) (burden is upon person asserting abuse of discretion by administrative agency). Thus, this court's review of such rules should normally go no further than to ascertain whether the rule is reasonably consistent with the statute it purports to implement:

In the case of a legislative rule (I.e., one adopted pursuant to a delegation of legislative power, the violation of which involves statutory sanctions), the queries would be: first, whether the rule related to the subject matter on which power to legislate had been delegated; second, whether the rule conformed to the standards prescribed in the delegatory statute; and third, whether the rule was invalid on constitutional grounds, such as due process.

1 F. Cooper, State Administrative Law 250 (1965). The court should not invalidate a legislative rule merely because it believes the rule is unwise:

(T)he court is not free to substitute its judgment as to the desirability or wisdom of the rule, for the legislative body, by its delegation to the agency, has committed those questions to administrative judgment and not to judicial judgment.

1 K. Davis, Administrative Law Treatise 315 (1958).

Furthermore, this court has consistently given weight to an interpretation of an ambiguous statute by the agency charged with its administration:

When a statute is ambiguous, the construction placed upon it by the officer or department charged with its administration, while not binding on the courts, is entitled to considerable weight in determining the intention of the legislature.

State ex rel. Pirak v. Schoettler, 45 Wash.2d 367, 371, 274 P.2d 852, 855 (1954); Accord, Pierce County v. State, 66 Wash.2d 728, 404 P.2d 1002 (1965); White v. State, 49 Wash.2d 716, 306 P.2d 230 (1957).

RCW 43.21A.080 grants appellant authority 'to adopt such rules and regulations as are necessary and appropriate' to carry out its statutory duties. RCW 82.34.030 describes one such duty. This section requires 'the appropriate control agency' to determine when each facility submitted for approval under RCW ch. 82.34 has met the requisite three tests set forth above. RCW 82.34.010(6). Appellant is 'the appropriate control agency.' RCW 43.21A.020; RCW 82.34.010(6).

Moreover, the legislature, in establishing the Department of Ecology, vested appellant with very broad authority and responsibility for managing this state's environment.

(I)t is the purpose of this chapter to establish a single state agency with the authority to manage and develop our air and water resources in an orderly, efficient, and effective manner and to carry out a coordinated program of pollution control involving these and related land resources. To this end a department of ecology is created by this chapter to undertake, in an integrated manner, the various water regulation, management, planning and development programs now authorized to be performed by the department of water resources and the water pollution control commission, the air regulation and management program now performed by the state air pollution control board, the solid waste regulation and management program authorized to be performed by state government as provided by chapter 70.95 RCW, and such other environmental, management protection and development programs as may be authorized by the legislature.

RCW 43.21A.020. RCW 43.21A.900 also states:

The rule of strict construction shall have no application to this chapter and it shall be liberally construed in order to carry out the broad purposes set forth in RCW 43.21A.020.

Pursuant to the above statutory authority, appellant on August 4, 1971, issued regulations, codified in WAC ch. 173--24. These regulations established procedures for performing its delegated duty to review the applications for tax benefits under RCW ch. 82.34 received from the Department of Revenue, including appellant's criteria for granting or denying approval of these applications.

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