The Washington Department of Ecology issued the 2013-2018 Phase I Municipal Stormwater Permit, which required certain counties and cities to adopt local regulations for controlling stormwater sewer systems for new development, redevelopment, and construction activities by June 30, 2015. A key provision of the permit stated that the new regulations must apply to all development applications submitted before July 1, 2015, if the developer does not start construction by June 30, 2020. This requirement created a conflict with the state's vested rights doctrine. As to subdivisions, the vested rights doctrine codified in state law freezes the development regulations that will apply to a subdivision on the date on which the developer files a complete application with a county or city. This means that later-enacted, and often more burdensome, regulations cannot apply to the subdivision for a specified time. Ecology's rule that the new stormwater regulations must apply to vested subdivisions if construction has not occurred by June 30, 2020, is directly contrary to the vesting rule because, under Ecology's rule, new regulations could apply to developers that vested under earlier regulations consistent with state law.
In Snohomish County, v. Pollution Control Hearings Board, Division II of the Washington Court of Appeals considered a challenge to Ecology's rule lodged by counties and the state building industry, which argued that Ecology's rule cannot violate developers' statutory rights and that the new regulations would not necessarily apply to all projects commenced after June 30, 2020. The court agreed, finding that stormwater regulations were land use ordinances for the purpose of the vesting statute. Ecology claimed that stormwater regulations were in fact environmental regulations, which arguably do not enjoy the same vested rights protection. But the court did not read the vesting doctrine that narrowly. If a regulation controls and regulates land use, a developer vests to that regulation, regardless of whether it is a land use or an environmental regulation.
Second, Ecology argued that the federal Clean Water Act preempts state vested rights statutes because the source of the state's stormwater regulations is the federal law, and a state's vesting rules cannot conflict with regulations adopted under the federal mandate. The court, however, found that Congress evinced no intent to preempt state regulations or control over the specifics of Ecology's permits. The state vesting statutes can coexist with federal law.
This is another case, in a long line of Washington cases, reaffirming the vested rights doctrine in Washington, which is designed to provide certainty to developers and some protection against fluctuating land use policy to protect valuable property interests, and to ensure that new land use regulations do not interfere with those rights.