Supreme Court Restricts Use of Permit-Exempt Wells

Are you developing an area that requires a building permit or subdivision application? Will you be relying on a permit-exempt well? Take pause, and read this... it may impact you. 

A recent Washington State Supreme Court ruling impacts the responsibilities of counties within the State to review permit-exempt (household) wells in connection with building permits and subdivision applications.  On October 6, 2016, the Supreme Court issued its decision in Whatcom County, Hirst, et al. v. W. Wash. Growth Mgmt. Hr’gs Bd., which will effectively preclude counties from granting building permits and subdivision applications that intend to rely on permit-exempt wells if the well will impair a minimum, in-stream flow (a rule set to protect river and stream flows at sufficient levels for fish).  The decision directs the counties to go beyond the in-stream flow rules adopted by the Department of Ecology (“Ecology”), and conduct their own analysis when determining legal availability of water for rural development.  What this decision means for each county and for property owners has yet to be determined.  The result of this decision in many counties will be the issuance of building permit moratoriums, burdensome hydrogeology report requirements in connection with even a basic residential building permit application on a rural property, and/or blanket denials of all building permits and subdivision applications for properties within watersheds that are already fully appropriated.  In counties with legislatively approved watershed plans that include “reserve water” in anticipation of future growth (such as Chelan County’s legislatively-approved reserves within the Wenatchee Water Resource Inventory Area), the impacts of this Supreme Court decision will likely be much less extreme.  However, regardless of where you live in our State, the landscape is changing rapidly with respect to water availability.  And, while the topic may be dry (pun intended), the decision has important ramifications for future growth within the State. 

The Hirst decision arose from a lawsuit filed by a group of environmentalists against Whatcom County, alleging that Whatcom County was not satisfying its obligations under the Growth Management Act (“GMA”) by granting building permits that intended to rely upon permit-exempt wells without conducting an independent analysis of water availability.  The GMA requires counties to ensure an adequate water supply exists before granting a building permit or subdivision application.  

Building permit and subdivision applications in rural areas where water is not provided by a water purveyor often rely on permit-exempt wells, which as the name suggests, do not require a water permit from the Department of Ecology (“Ecology”).  Many counties contain watersheds that are subject to in-stream flow rules adopted by Ecology, under which the basin is closed to all new, permitted water rights in order to protect flows for fish.  Ecology expressly provides that many of these closures do not apply to single domestic wells for new homes.  In these same counties, the in-stream flow level for rivers and streams set by Ecology is typically not met during some point of the year (August/September).  Even though the in-stream flow level is not being met, these counties have continued to grant building permits for new homes relying on permit-exempt wells because Ecology’s regulations explicitly do not apply to single domestic wells for new homes.   

With respect to Whatcom County, Ecology had previously adopted an in-stream flow rule for the Nooksack River, which closed most streams in that watershed to new, permitted water uses in order to protect flows for fish.  However, Ecology’s own interpretation of its rule was that the rule allowed for permit-exempt wells in most of the watershed.  Whatcom County’s comprehensive plan delegated the determination of water availability to Ecology, and Whatcom County issued building permits that would rely on a permit-exempt well only when the well site proposed by the applicant did not fall within the boundaries of an area where Ecology has determined by rule that water for development does not exist.  Since Ecology interpreted its Nooksack Rule to allow for permit-exempt wells in most of the watershed, Whatcom County continued to grant building permits that relied on permit-exempt wells in those areas. 

The Supreme Court held that Whatcom County’s comprehensive plan did not satisfy the GMA requirement to protect water availability and that Whatcom County violated State law when it granted building permits that relied on permit-exempt wells in reliance on Ecology’s interpretations of the in-stream flow rules.  The Supreme Court found that Whatcom County’s actions resulted in the granting of building permits for houses and subdivisions to be supplied by a permit-exempt well even though the cumulative effect of exempt wells in a watershed reduces the flow in a water course below the minimum in-stream flow.  The Supreme Court stated that the GMA requires an applicant for a building permit for a residence to produce proof that water is both legally available and actually available, and that counties must require a showing that water is available for a building permit when the applicant is relying on a permit-exempt well. 

So what does this all mean? 

For environmentalists, the decision is a big win.  The decision squarely precludes the unchecked growth of single-family residences relying on permit-exempt wells in rural areas.  As stated by the court in the decision, “this is precisely the ‘uncoordinated and unplanned growth’ that the legislature found to ‘pose a threat to the environment, sustainable economic development, and the health, safety, and high quality of life enjoyed by residents of this state.’”  Permit-exempt wells may not infringe upon senior water rights, which include the minimum in-stream flows set by rule for the protection of fish (in-stream flow rules in our area include the Wenatchee watershed and the Entiat watershed).  What is considered “impairment” of an in-stream flow is very restrictive – nearly any new unmitigated groundwater withdrawal in a basin with an Ecology rule will be deemed to “impair” the in-stream flow level.  Counties cannot issue building permits unless there is water actually and legally available (e.g. no impairment of an in-stream flow). 

Notably, Ecology supported Whatcom County in the case and has strongly opposed the Supreme Court’s decision.  After the issuance of the decision, Ecology issued a public statement that it is disappointed in the Supreme Court’s decision not to defer to Ecology’s interpretation of Ecology’s own rule. 

Many experts (as well as the dissenting Supreme Court justices) say that the practical result of this court decision will be to stop some counties from granting building permits that rely on permit-exempt wells, halting further rural growth.  The decision also has the potential to place individual counties at odds with Ecology with respect to water availability findings, and could result in impossible burdens on landowners, such as requirements to produce expensive hydrogeology reports in connection with a basic residential building permit.

Rural growth may likely continue in counties with legislatively-approved watershed plans that include reserve water for future growth, as well as in counties that have implemented a water banking system (where building permit applicants pay a fee to acquire water as part of their building permit process).  Landowners and developers should consult Ecology and seek advice from an attorney to determine how this decision impacts their property and development plans.

Michelle A. Green is an attorney with JDSA Law

[Content provided in this article should be used for informational purposes only and is not intended to be a substitute for professional advice. Always seek the advice of a relevant professional with any questions about any legal decision you are seeking to make.]