Subject of Possible Rule Making: The department is considering amending WAC 332-100-040 regarding how proceeds from leases, sales contracts, licenses, permits, easements and rights of way in harbor areas are distributed.

     Statutes Authorizing the Agency to Adopt Rules on this Subject: Chapter 79.64 RCW created the revenue management cost account (RMCA). RCW 79.64.040 provides the Board of Natural Resources (BNR) with authority to determine the percentage of revenue that is deposited into the RMCA. For state-owned aquatic lands, the BNR is authorized to deduct up to:

     50% of the total gross proceeds from second class tidelands, second class shorelands, and beds of navigable waters.

     25% of the total gross proceeds from all other public lands, including first class tidelands, and harbor areas.

     Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: To provide adequate funding to cover the cost of management in harbor areas, it is proposed that WAC 332-100-040 be amended to allow for the maximum allowable of 25% of proceeds to be distributed to the resource management cost account (RMCA). The current language establishes a 20% limit on deductions from harbor area leases. This limit was established in 1971, through Senate Resolution 140. Thirty-four years later, the department has seen increased costs associated with the oversight of harbor areas and other state-owned aquatic lands as Washington state's population grows. This continued growth in costs, the economy and the population of Washington state provides support for this request. Summary: The amendment would increase the amount of harbor area lease proceeds deposited into the RMCA by 5% and decrease the amount of harbor area lease proceeds deposited into the aquatic lands enhancement account (ALEA) by 5%. The total increase/decrease per year (estimated) would be $150,000 to cover administrative costs associated with the management of state-owned aquatic lands.

     Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: State: Washington State Department of Fish and Wildlife, Washington State Department of Agriculture, Interagency Committee on Recreation; and Washington State Parks and Recreation Commission. Coordination will involve outreach during the rule-making process. The department will provide the same opportunities for comment to these agencies as it will for the public's involvement. The process is outlined below. It would be the intent that where appropriate any proposed rule is consistent with statutes guiding or rules adopted by those agencies.

     Process for Developing New Rule: DNR will contact stakeholders and affected parties and entities to solicit their participation in the rule development process.

     Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication. The Department of Natural Resources encourages your active participation in the rule-making process. Anyone interested in more information on how they participate should contact Elizabeth Ellis, Aquatic Resources Division, Department of Natural Resources, 1111 Washington Street S.E., P.O. Box 47027, Olympia, WA 98504-7027, voice (360) 902-1074, e-mail Elizabeth.ellis@wadnr.gov, fax (360) 902-1786.

June 30, 2005

Doug Sutherland

Commissioner of Public Lands

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