Background
Boyer Towing leases state-owned aquatic land in Port Madison Bay near Bainbridge Island for a commercial mooring buoy. The lease permits intermittent moorage of barges and vessels within a 400-foot-radius circle around the buoy. DNR calculates annual rent using, among other inputs, the lease area and the assessed value of an upland tax parcel used with the lease.
In its 2022 rent revaluation, DNR used the full 11.54-acre swing circle as the lease area and selected Boyer’s waterfront residential parcel, which contains a dock used to transport employees and materials, as the upland parcel. Boyer challenged those decisions, contending that rent should reflect only the vessel’s physical footprint at a particular time and that its nearby commercial parcel should have been selected instead. The trial court affirmed the parcel selection but invalidated WAC 332-30-122(1)(b)(ii) as inconsistent with the governing statute.
The Court’s Holding
The Court of Appeals affirmed the Board of Natural Resources’ interpretation of WAC 332-30-122(1)(b)(ii). The rule requires rent for an individual mooring buoy to be calculated using the entire circle defined by the vessel’s expected swing radius, not merely the portion physically occupied by a vessel at one moment. Reading the rule with neighboring provisions, the court held that its reference to the area encumbered “at any given point in time” means the authorized swing-circle area without adding extra operational space.
The court also upheld DNR’s selection of the residential parcel. Boyer had not properly preserved its argument that the commercial parcel should replace an inconsistently valued waterfront parcel as a landward alternative. DNR did not act arbitrarily or capriciously in declining to choose the commercial parcel under the local-facility provision because the residential parcel’s dock was also associated with the lease and the residential parcel was closer to the leased area. The court further deferred to DNR’s determination that the commercial parcel was not waterfront. Because the regulation did not conflict with RCW 79.105.240, the court reversed the trial court’s invalidation of WAC 332-30-122(1)(b)(ii).
Key Takeaways
- A mooring-buoy lease area includes the full expected swing circle, rather than a vessel’s instantaneous footprint.
- Challenges to agency parcel-selection decisions face arbitrary-and-capricious review and must be preserved before the agency.
- DNR may prioritize a closer qualifying upland parcel and receives deference on shoreline-related factual determinations.
Why It Matters
The decision confirms DNR’s approach to valuing mooring-buoy leases on state aquatic lands and preserves the governing regulation. It also underscores that parties contesting state-land lease valuations should clearly present every regulatory theory during the administrative process, rather than first raising it in court.