[Nos. 62707-4-I; 62780-5-I; 62781-3-I. Division One. May 24, 2010.]
November 4, 2009, Oral Argument Robert M. McKenna, Attorney General, Christa L. Thompson, Senior Counsel, and Martha F. Wehling, Assistant, for petitioners Department of Natural Resources and William Wallace, Northwest Regional Manager. Richard A. Weyrich, Prosecuting Attorney, and A.O. Denny, Deputy, for petitioner Skagit County. Elaine L. Spencer (of Graham & Dunn, PC), for petitioners American Forest Resource Council and Carpenters Industrial Council. David A. Bricklin (of Bricklin & Newman, LLP); Jennifer A. Dodd (of Puget Sound Clean Air Agency); and Toby Thaler, for respondents Chuckanut Conservancy and North Cascades Conservation Council. David S. Mann (of Gendler & Mann, LLP), for respondent Conservation Northwest. ¶1 ELLINGTON, J. -- This case concerns the future of Blanchard Forest, a 4,827-acre area held in trust by the State since the 1930s. For decades the land has produced a timber harvest. At issue here is a set of proposed management "strategies" that would set aside part of the forest for recreational and environmental purposes. The plan cannot be finally implemented unless the legislature appropriates funds to compensate the trust beneficiaries for the lost timber income. ¶2 The Department of Natural Resources issued a determination of nonsignificance for the proposal, which is challenged by several environmental groups. The superior court rejected the determination and ordered an environmental impact statement. ¶3 If funded by the legislature, the plan will change the management of the land by reducing the areas subject to commercial timber harvest by one-third. The fact the plan does not eliminate logging entirely does not make it a major action with significant adverse effects upon the quality of the environment. We therefore reverse. BACKGROUND ¶4 Blanchard Forest is one of the treasures of the Pacific Northwest. It sits atop the southeastern peak of the Chuckanut Range, a 4,827-acre area of land that lies west of Interstate 5 and south of Bellingham and Larabee State Park. ¶5 Only in Blanchard Forest do the Cascade foothills come down to the sea. The forest rises 2,000 feet above Puget Sound. Within it are two lakes, metamorphic cliffs and talus caves, five creeks, and a variety of freshwater ponds and wetlands. The forest has a high diversity of fish, wildlife, and invertebrates, and is home to several endangered species, including the Townsend's big-eared bat and the marbled murrelet, a marine bird that roosts in old, upland forests whose habitat has been severely restricted due to the logging of old growth stands. ¶6 Close to a major urban area, Blanchard Forest receives 30,000 to 50,000 visitors every year, and their number is expected to increase with the growing populations in Skagit and Whatcom Counties. Visitors come to enjoy hiking and camping at Lily and Lizard Lakes, hang gliding at Samish Overlook, rock climbing at the Oyster Dome, and panoramic vistas of Puget Sound, the San Juan Islands, and the Olympic mountains, all accessible by a system of about 20 miles of intricate, high quality trails. ¶7 These recreational uses coexist with foresting activities. During the first three decades of the 20th century, Blanchard Forest was logged almost entirely and only a small amount of old growth was spared. ¶8 Attempts have been made to take Blanchard Forest land out of timber production and devote it to recreational and ecological uses, including a 1992 proposal by Habitat Watch to set aside 2,200 acres as a natural resources conservation area. ¶9 The present case involves another such effort. In 2006, with sizeable acreage ready for harvest, DNR sought to balance its legal obligations with community interests. DNR convened a stakeholder group called the Blanchard Forest Strategies Group, with 10 members representing various interests including recreation, conservation, and the timber industry. Over eight months, the group held 12 public meetings, considered the existing data and previous assessments, and reached a consensus recommendation for management of the forest. This recommendation is known as the Blanchard Forest Strategies (Strategies). ¶10 The Strategies propose to divide Blanchard Forest into four management zones: a core zone for conservation and recreation, a zone consisting of scattered areas to be managed for habitat conservation, a zone to be logged but subject to mitigation of visual impact, and a general management zone to be managed for revenue production. Because the plan calls for eliminating the timber harvest in the core zone (approximately one-third of the forest), the plan requires legislative appropriation of funds to compensate the trust beneficiaries for the lost revenue stream. The necessary compensation amounts to some $ 12 million, of which the legislature has thus far appropriated $ 4 million. ¶11 The core zone is an area of approximately 1,600 acres in the upper elevations. It includes the old growth stands that are habitat for the marbled murrelet. It also includes a significant majority of the recreational opportunities offered by the forest. The zone is to be "managed in a manner similar to a permanently protected [n]atural [r]esource [c]onservation [a]rea with emphasis on wildlife habitat, older forest conditions, vistas, and maintenance of forest ecosystem health; while allowing non-motorized, low impact recreation such as horseback riding, hiking, mountain biking, and hang gliding." ¶12 The habitat conservation plan zone will be managed "consistent with the goals, objectives, and conditions of [DNR's 1997 Habitat Conservation Plan] regarding ecologically sensitive areas and protected species and habitat requirements." ¶13 In the high visual sensitivity zone, logging activities will be subject to visual impact mitigation pursuant to DNR's Policy for Sustainable Forests (Dec. 2006). ¶14 The general management zone will be managed as it is presently, for revenue production. To support the harvest, DNR will develop a road system exclusively outside the core zone. ¶15 The Strategies call for a recreational overlay applicable to all management zones, for trails and other recreational uses. A working forest overlay also will be developed, emphasizing natural resource stewardship. ¶16 The Strategies provide for a five-year implementation phase, during which the legislature will be asked to appropriate funds to compensate for lost timber revenue. During this period, DNR will confine the timber harvest to areas outside the core zone. Until compensation is secured, the general management and the high visual sensitivity zones will be subject to intensified logging. ¶17 Finally, the Strategies will change no existing regulations, policies, or plans. New projects will be subject to environmental review as before. ¶18 As required by the State Environmental Policy Act (SEPA), chapter 43.21C RCW, DNR reviewed the Strategies for potential environmental impacts. Reasoning that the Strategies are a nonproject action ¶19 Chuckanut Conservancy and North Cascades Conservation Council (collectively Chuckanut) filed this action challenging the Strategies on two grounds: SEPA compliance and violation of the public lands act, Title 79 RCW. Conservation Northwest, the American Forest Resource Council, the Carpenters Industrial Council, and Skagit County intervened as defendants. ¶20 In considering the SEPA challenge, the trial court focused upon two issues: the "baseline" against which to evaluate the Strategies' environmental impacts and the level of analysis required to assess those impacts. The court accepted that some logging may be required in the interest of the trust beneficiaries but focused upon the requirement that the land be managed for multiple uses and concluded, "I cannot say that the baseline against which environmental impacts are to be measured is inevitably logging." ¶21 DNR, American Forest Resource Council, Carpenters Industrial Council, and Skagit County petitioned for discretionary review. The trial court certified that its order is dispositive on a controlling issue of law. We granted discretionary review. ANALYSIS [1, 2] ¶22 SEPA is a legislative pronouncement of our state's environmental policy. [3, 4] ¶23 Under SEPA, evaluation of a proposal's environmental impact requires examination of at least two relevant factors: " '(1) the extent to which the action will cause adverse environmental effects in excess of those created by existing uses in the area, and (2) the absolute quantitative adverse environmental effects of the action itself, including the cumulative harm that results from its contribution to existing adverse conditions or uses in the affected area.' " ¶24 The agency conducts a threshold process to decide whether an action qualifies as a major action significantly affecting the quality of the environment. ¶25 At the end of the threshold phase, the agency issues one of three determinations: a determination of nonsignificance (DNS), a mitigated determination of nonsignificance (if the proposal will not have probable significant environmental impacts or if those impacts will be mitigated), [5, 6] ¶26 Standard of Review. We review the agency action, not the decision of the superior court. [7] ¶27 The agency's threshold determination is entitled to judicial deference, ¶28 The Strategies--Environmental Impacts. It is undisputed that the core zone, the habitat conservation plan zones, and the recreational and working forest overlays will create environmental benefits. The contentious component of the Strategies is the plan to continue logging in the general management and high visual sensitivity zones. [8] ¶29 We must begin with a brief discussion of the governing laws. The State owns and manages 2.1 million acres of forest land, of which approximately 1.5 million were granted by the federal government when Washington joined the Union in 1889. The federal grant lands are held and managed by the State in trust for the benefit of the public institutions identified in the federal enabling act of 1889 (e.g., common schools, the University of Washington). ¶30 The second largest category of state forest lands, approximately 600,000 acres, consists of land deeded by counties to the State after tax foreclosures, mostly at the beginning of the 20th century. This is known as forest board transfer land, of which Blanchard Forest is one example. Forest board transfer lands also are "held in trust," administered and protected in the same manner as other state forest lands. [9, 10] ¶31 In 1957, the legislature created DNR and assigned to it the management of state forest lands. As trustee, DNR must produce revenue for trust beneficiaries, preserve productivity, and protect the land. [11] ¶32 Where compatible with the best interests of the State, the welfare of the citizens, and the applicable legal framework, public lands must be administered and managed for "multiple use." [12] ¶33 DNR is also authorized to withdraw limited acreage of public lands from certain uses "[f]or the purpose of providing increased continuity in the management of public lands and of facilitating long range planning by interested agencies." [13] ¶34 DNR's duties as to trust lands are unambiguous and unavoidable. In County of Skamania v. State, [14] ¶35 Under the statutory regime described above, state forest lands, including Blanchard Forest, must be logged on a sustainable basis unless there is compensation to the trust beneficiaries for lost revenue. ¶36 Chuckanut recognizes the trust status of the Blanchard Forest. It emphasizes, however, that DNR has a duty to manage state lands for multiple uses, has authority to withdraw state lands from their existing uses, and has authority to protect trust lands from logging "as long as the trust is compensated." [15] ¶37 Leaving Blanchard Forest in a pristine state is a laudable goal with widespread support. But Chuckanut forgets that as trustee, DNR can cease harvesting timber only if the trust is compensated. DNR has no power to preserve the entire forest. Only the legislature can do that. [16, 17] ¶38 Chuckanut offers no solution to DNR's dilemma. There is no guarantee the legislature will appropriate the remainder of the $ 12 million required to implement the Strategies and protect the two zones they would exempt from logging. It would require $ 36 million to protect the entire forest. Whether to commit state funds to this purpose is a political judgment, not a SEPA review issue. ¶39 It is therefore the proposal at hand that must be assessed in the threshold SEPA phase. ¶40 In its DNS, DNR considered the entire regulatory and policy system governing forestry on state lands. This framework both guides policy decisions and prescribes operational details. Some aspects are briefly described here. ¶41 Foremost is the Forest Practices Act of 1974, chapter 76.09 RCW, which is designed to manage and protect the state's natural resources and ensure a viable commercial timber industry. ¶42 The forest and fish rules, adopted in 2001, focus on water quality, salmon habitat, and other aquatic and riparian resources. ¶43 In 2006, DNR negotiated a forest practices habitat conservation plan with federal agencies under the Endangered Species Act. ¶44 The 1997 Habitat Conservation Plan addresses DNR's compliance with the Endangered Species Act. Among the species covered is the marbled murrelet. A key component is riparian management zones on all salmonid-bearing streams and along many small nonfish-bearing streams. ¶45 DNR's Policy for Sustainable Forests guides the management and stewardship of state forest trust lands and addresses economic performance, forest ecosystem health and productivity, and social and cultural benefits. To ensure sustainability of the forests, the policy limits the range of permissible changes in annual harvest levels. The policy also defers harvest of old growth timber (stands five acres and larger that originated naturally before the year 1850). ¶46 DNR points out that under this framework, individual logging projects are subject to SEPA review. Chuckanut objects that SEPA review for individual proposals will not protect the forest because historically, DNR has conducted only class I through III forest practices, which are exempt from an EIS. Chuckanut believes DNR wishes to evade environmental review, particularly any analysis of cumulative impacts. Even if this were so, it is not a matter affected by the Strategies, which have no bearing on DNR's choice of future forest practices. ¶47 These statutes, rules, and policies have been subjected to intense environmental review. The corresponding EISs comprise most of the 10,000-page record in this appeal. Chuckanut asserts that the EISs are too large in scale and too general in scope to provide useful analysis of a particular landscape. DNR responds that, based on a series of key indicators of potential sensitivity, the two watersheds included in Blanchard Forest are unremarkable when compared to other DNR-managed trust lands, and there is no reason to expect that logging on Blanchard Forest would have impacts outside the norm relative to all the lands analyzed in the EISs. Chuckanut contends that compliance with the existing regulatory framework does not guarantee an absence of significant impacts resulting from the Strategies. ¶48 But Chuckanut does not clarify what adverse impacts may result from the Strategies. Chuckanut's true argument is that the Strategies do not eliminate all environmentally adverse impacts on the forest because logging will continue in the zones not exempt. Given that the Strategies make no changes to existing uses except to preserve some tracts from harvest, DNR did not improperly rely on the existing regulatory and policy framework and the corresponding EISs in its threshold review. ¶49 Threshold determinations do not examine alternatives, and Chuckanut contends DNR should conduct an EIS in order to consider alternatives to the Strategies. Even if this were a viable argument, the only alternative identified by Chuckanut is cessation of logging. As discussed above, that alternative is not available to DNR. ¶50 Blanchard Forest is trust land and has been logged on a sustainable basis for decades. It is against this existing use that the Strategies' environmental impacts must be evaluated. For two-thirds of the forest, the Strategies will have no impact at all; current uses will continue and new projects will continue to receive environmental review as before. For the other one-third, logging will cease altogether. ¶51 Reversed. COX and SCHINDLER, JJ., concur.