In re BHL Corp.

IN_RE_BHL_CORP.93-173; 161 Vt. 472; 641 A.2d 771

[Filed 01-Apr-1994]

 NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
 as well as formal revision before publication in the Vermont Reports.
 Readers are requested to notify the Reporter of Decisions, Vermont Supreme
 Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in
 order that corrections may be made before this opinion goes to press.


                                 No. 93-173


 In re BHL Corporation, Declaratory           Supreme Court
 Ruling #267
                                              On Appeal from
                                              Environmental Board

                                              March Term, 1994



 Elizabeth Courtney, Chair

 Robert P. McClallen of McClallen Ruggiero P.C., Rutland, for plaintiff-
   appellant

 Jeffrey L. Amestoy, Attorney General, and John H. Hasen, Assistant Attorney
   General, Montpelier, for amicus curiae State of Vermont


 PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.


      ALLEN, C.J.   BHL Corporation appeals a declaratory ruling of the State
 Environmental Board, holding that Act 250 jurisdiction extends to
 excavations associated with the development of land for private use.  We
 affirm.
      The area at issue comprises nearly seventy acres in Castleton, a
 municipality with zoning and subdivision regulations.  BHL purchased the
 land intending to construct a private home and sheep farm for Joanne and Roy
 Lewis.  Joanne Lewis is an officer, shareholder and director of BHL; her
 husband Roy operates a commercial shale pit elsewhere in Castleton and is
 not affiliated with the corporation.  Beginning in June 1988 and continuing
 into 1991, the Lewises excavated shale from the site, which involved

 

 blasting and the use of large-scale excavation equipment.  Most of the shale
 was used in landscaping the premises.  Roy Lewis sold twenty-one truckloads
 of shale for use off-site, but stopped selling it in the spring of 1990 when
 he discovered he might need an Act 250 permit.  Approximately 490 cubic
 yards of shale were given to an excavation contractor in exchange for use of
 excavation equipment.  Another 157 yards of shale was removed by a general
 contractor, with whom Lewis regularly had business dealings, for use in a
 commercial project.
      On September 17, 1991, the Coordinator for Environmental District
 Commission #1 issued an advisory opinion that under Act 250, 10 V.S.A.
 {{ 6001-6108, BHL should have secured a permit for the extraction
 operations.  BHL, which had not requested the advisory opinion, appealed to
 the Executive Officer of the State Environmental Board.  The Executive
 Officer issued an advisory opinion stating that the District Commission
 Coordinator had the authority to issue the opinion, but found there was
 insufficient information to determine whether the development should be
 subject to Act 250 jurisdiction.  In response, BHL requested a hearing
 before the Board, which was deemed a petition for a declaratory ruling
 pursuant to Board Rules 3(C) and 3(D).
      After an evidentiary hearing and site visit, an administrative hearing
 panel of the Board issued a ruling on February 11, 1993, declaring that the
 shale extraction constituted development within the meaning of 10 V.S.A.
 { 6001(3) and relevant Environmental Board Rules.  As a result, the Board
 determined that the excavation aspect of the development was subject to Act

 

 250 jurisdiction, and a permit should have been obtained.(FN1) BHL appeals the
 declaratory ruling pursuant to 10 V.S.A. { 6089(b); the State appeared as
 amicus curiae.
                                             I.
      The resolution of this case turns on the proper construction of
 "development," which the Act, in relevant part, defines as
         the construction of improvements on a tract or tracts of
         land, owned or controlled by a person, involving more
         than 10 acres of land within a radius of five miles of
         any point on any involved land, for commercial or
         industrial purposes. . . . "Development" shall also mean
         the construction of improvements for commercial or
         industrial purposes on a tract or tracts of land . . .
         involving more than one acre of land within a
         municipality that has adopted permanent zoning and
         subdivision bylaws . . . .  The word "development" shall
         not include construction for farming . . . purposes
         below the elevation of 2500 feet.

 10 V.S.A. { 6001(3).  It was undisputed that BHL engaged in the
 "construction of improvements," so the Board focused its inquiry on whether
 BHL's activities on the tract qualified as a "commercial purpose."  Since
 the statute does not define the term, the Board consulted Rule 2(L), which
 defines "commercial purpose" as "the provision of facilities, goods or
 services by a person other than for a municipal or state purpose to others
 in exchange for payment of a purchase price, fee, contribution, donation or
 other object having value."  Envtl. Bd. R. 2(L).  The Board concluded that
 Lewis' sale of the twenty-one truckloads and the quid pro quo exchange of
 shale for excavation services satisfied the definition of "commercial

 

 purpose," thereby subjecting the extraction activities to Act 250
 jurisdiction.
      BHL contends that the plain meaning of { 6001(3) explicitly exempts the
 entirety of its project from Act 250 jurisdiction, because it constituted
 construction for sheep farming below 2500 feet.  According to this
 approach, once the Board found that the primary purpose of the project was
 farm construction, the Board could not legitimately subject discrete aspects
 of the project to analysis under the statute and the Board Rules to
 determine if they qualified as commercial activities.  BHL believes that the
 Board construed the Act and its rules contrary to the spirit and purpose of
 Act 250 as legislation intended to regulate only large-scale commercial and
 industrial development, not residential construction and farm construction
 below 2500 feet.
      Before considering the merits of BHL's claim, we set forth the
 applicable standard of review of the Board's decision.  Absent compelling
 indication of error, we will defer to the Board's interpretation of Act 250
 and its own duly promulgated rules.  In re Killington, Ltd., 159 Vt. 206,
 210, 616 A.2d 241, 244 (1992).  We also will affirm the Board's conclusions
 of law, provided they are rationally derived from a correct interpretation
 of the law and findings of fact based on substantial evidence.  Id.
      In this case, the Board proceeded from the premise that the proper
 starting point for determining Act 250 jurisdiction is the actual use of the
 land, not necessarily the overall purpose of a development scheme.  See In
 re Baptist Fellowship of Randolph, Inc., 144 Vt. 636, 639, 481 A.2d 1274,
 1276 (1984) (in concluding that construction of a church building qualified
 as "development," court holds that "Act 250 speaks to land use and not to

 

 the particular institutional activity associated with that land use").  The
 plain language of the statute and the administrative regulation does not
 forbid this approach.  The definition of "development" in { 6001(3) does not
 expressly preclude the Board from parsing a given project into distinct
 activities that may be subject to Act 250 jurisdiction.  The same holds
 true for the definition of "commercial purpose" in Board Rule 2(L).  Without
 an explicit legislative mandate, the Board can rely on its own reasonable
 interpretation of the Act and its Rules in formulating a ruling.  See In re
 Vitale, 151 Vt. 580, 582-83, 563 A.2d 613, 615 (1989).
      BHL argues that the Board has abused its discretion in drawing a line
 that intrudes upon what it characterizes as small-scale development,
 contrary to the legislative intent in adopting Act 250.  They point to In re
 Agency of Administration, State Buildings Division, in which we noted that
 Act 250 jurisdiction "extends only over the impact of large scale
 development."  141 Vt. 68, 93, 444 A.2d 1349, 1362 (1982).  But this begs
 the question of what qualifies as "large scale development."  Resolution of
 this question, as a matter of statutory interpretation, is committed to the
 Board as the agency charged with the responsibility to execute the Act and
 deemed to have expertise in that regard.  In re Killington, Ltd., 159 Vt. at
 210, 616 A.2d  at 244.
      In light of the Board's findings regarding the magnitude of BHL's
 shale excavations and the associated exchanges for money and services, we
 see no compelling indication that the Board erred in construing
 "development" and "commercial purpose" to cover the excavations.  Cf. In re
 Tucker, 149 Vt. 551, 547 A.2d 1314 (1988) (gravel pits subject to Act 250
 regulation as commercial developments); In re Orzel, 145 Vt. 355, 491 A.2d 1013 (1985) (same).  The shale excavation and removal in this case was a far
 cry from merely digging a residential foundation.  The Board's ruling is
 fairly supported by the evidence, its findings, and a reasonable
 interpretation of Act 250 and its duly promulgated rules.  We are mindful of
 our duty to ensure that the Board not overreach in enforcing Act 250, but we
 conclude that in this case the Board has acted within the scope of its
 authority.
      Affirmed.

                                    FOR THE COURT:



                                    _____________________________
                                    Chief Justice



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                               Footnotes


FN1.    Section 6081(a) mandates:  "No person shall . . . commence
 construction on a . . . development, or commence development without a
 permit."  10 V.S.A. { 6081(a).