On June 11, the State Land Board adopted the Oregon Department of State Land's (DSL) rules that will require DSL authorization and a compensation fee to perform removal or remedial actions and mitigation or natural resource damage restoration projects in state waters, including of course the Portland Harbor Superfund Site. Any person proposing remediation or habitat restoration activities in state-owned waterways must submit an application for DSL authorization up to 120 days in advance and pay a fee based on DSL's measure of the impact of the proposed activity on public trust uses. DSL has not yet set an effective date for the rules, but we anticipate it will be before the end of 2013.
The rules explain DSL's procedures and requirements for granting authorizations to conduct remediation or habitat restoration activities in state-owned waterways. DSL may grant authorizations in one of four forms: access authorizations, leases, easements and conservation easements. Each form corresponds to a different time period, type of use and variation on the compensation structure.
DSL made few changes to the proposed rules in response to comments from Stoel Rives and others. Several commenters noted that a 30-year limit on easements was insufficient given the permanent nature of soil and sediment caps that would require authorization under the rules. But rather than allow for permanent easements or even easement renewals, DSL revised the rules to specify that easement holders may apply for a new easement, which will incur a new fee based on the value of the land at the time of the new easement, before the end of the term for the prior easement.
In response to comments pointing out DSL's own liability for contamination in its waterways, DSL noted only that the state's liability would be determined by the agency overseeing the cleanup independently of these rules. So DSL expects cooperating parties to pay DSL for access even when DSL should be contributing to the cost of the cleanup. DSL made no changes in response to comments on the proposed fee structure, other than a small increase in the alternative flat fee to correspond to the current flat fee under DSL's rules for authorizing other types of uses in state waters.
The compensation fee structure is essentially some percentage of the value of the authorized land area. The value of the land is based on the fair market value of the upland property. The percentage of that value is determined by DSL's measure of the impact of the proposed activity on public trust uses of the waterway. Notably, despite several comments regarding the impact of existing contamination on the fair market value of the upland property, DSL refused to allow applicants to incorporate the impact of that contamination into the calculation of the fee. Rather, the "fair market value" of the property for the purposes of the authorization fee is actually the value of that property as if it were not contaminated. That hardly seems fair when the party requesting access from DSL is also the party paying for the cleanup that is supposedly enhancing the value of the DSL land.
In addition to the compensation fee, DSL may require the authorization holder to maintain insurance coverage or a bond if DSL determines that the proposed use poses a potential risk to public trust uses, public health or the environment or to ensure performance of the proposed activities. If the proposed use includes a soil or sediment cap, the rules require financial assurance for the costs of maintenance, monitoring and any corrective action required in connection with the cap.
If you have any questions about the content of this alert, please contact a key contributor.