- Report Published -
|Report Document No. 16|
PUBLICATION YEAR 2004
|A Study of the Collection of Rents and Royalties for the Use of State-Owned Bottomlands|
|Virginia Delegation of the Chesapeake Bay Commission|
|HJR 633 (Regular Session, 2003)|
|House Joint Resolution (HJR) 633 directed the Virginia Delegation to the Chesapeake Bay Commission to study three issues over the course of 2003. The first issue involved the Virginia Marine Resource Commission’s (VMRC) assessment of rents and royalties for projects that encroach upon state owned subaqueous lands. This has been a very contentious issue in Virginia since 1986 and the rents have been assessed, but not collected, since that time. A central element to this debate is the extent of the riparian right under Virginia common law and how it applies to landowners’ authority to build piers, drydocks and other structures that encroach upon the state bottomland. The second component of the study involved the review of proposed legislation that will create a water column lease for intensive aquaculture operations in Virginia waters. The third element of the study was to consider proposals made by the Virginia Institute of Marine Science (VIMS) regarding shallow water management, in particular the designation of certain preferred uses of shallow water areas based on local ecological characteristics. |
The members of the Virginia Delegation to the Chesapeake Bay Commission are Delegates Bloxom, Drake and Pollard, Senators Bolling and Hanger, Secretary of Natural Resources, W. Tayloe Murphy and Irv Hill, citizen representative. In order to accomplish this study, the Commission conducted four public meetings between June and November 2003. These meetings were held at a variety of locations in Newport News and Hampton. At these meetings, the delegation heard presentations from agency staff, academic experts from the William and Mary School of Law and VIMS, and a representative from the Office of the Attorney General. The Commission also invited the public to offer comments and participate in the discussions. Interested parties that attended these meetings included representatives of the South Tidewater Association of Ship Repairers, the Virginia Manufacturers Association, the Hampton Roads Maritime Association, Dominion Power, Northrop Grumman Newport News, the Chesapeake Bay Foundation, the Virginia Association of Maritime Industries, Verizon Communications, the Virginia Clean Marina Program, Virginia Natural Gas, the York River Yacht Basin and owners or operators of many other marinas.
The most controversial and long standing issue was whether VMRC can or should assess a fee related to encroachment upon bottom land owned by the Commonwealth. On this question, the Commission specifically asked for comments on five issues: should fees assessed under the moratorium be collected or should only future fees be paid; what is the impact of permitted activities on the public use of the resource; should payments be annual or one time only; is there any need to clarify VMRC’s authority to assess fees for the use of the Commonwealth’s subaqueous bottoms; and what are the Commonwealth’s responsibilities under the public trust doctrine of the Virginia Constitution.
In addition, Senator Bolling asked the Attorney General for an official opinion regarding the authority of the VMRC to collect royalties for the use of state-owned subaqeous lands. Senator Bolling noted that on August 15, 1986, Attorney General Terry issued an opinion to William Pruitt, Commissioner of the VMRC that concluded section 62.1-3 of the Code of Virginia authorizes the Commission to assess royalties for encroachment on state-owned submerged land. He also noted that since the issuance of this opinion, several legislative changes have occurred and he asked that General Kilgore re-visit this earlier opinion in light of the changes.
On November 14, 2003, the Attorney General issued his opinion on this matter. The full opinion can be found at http://www.oag.state.va.us/mediacenter/Opinions/2003opns/03-088w1.htm. In summary, General Kilgore concluded that the VMRC may collect, annually or otherwise, royalties for the commercial use of state-owned bottomlands. He also opined that VMRC may not impose a royalty for the use of state-owned bottomlands where the private structure of a riparian landowner is used for noncommercial purposes, is within the line of navigability, and is erected within the size limitations prescribed by statute.
In light of the long history surrounding this issue, the continuing lack of agreement among interested parties and the 2003 opinion of the Attorney General, the Commission did not propose any legislation on VMRC rents and royalties. The Commission did reach consensus on the following principles: fees that were assessed during the moratorium will not be collected; fees will be collected for new projects that are initiated after July 1, 2004; and the Commonwealth does not intend to collect a fee for a structure that is within the exercise of a riparian right.
On the issue of water column leasing for aquaculture, the Commission agreed to move forward with legislation proposed by VMRC. The draft bill was developed by a work group convened under the agency’s Aquaculture Management Initiative and funded by a Coastal Zone Management grant. The proposed legislation, SB 605, (http://lis.virginia.gov/cgi-bin/legp604.exe?ses=041&typ=bil&val=sb605) authorizes VMRC to lease areas of water column for aquaculture operations. Current permits only allow for the encroachment over bottoms. The proposed bill will provide for flexibility to change structures or operations as the technology changes and will also provide added protection to the aquaculture industry as it gives exclusive use of the water column to the permit holder. The draft also calls for wide public notification, higher permit fees, annual production reports and permit termination if there are unacceptable environmental or public impacts, or if the permit holder fails to meet fifty percent of production goals.
Over the past two years, the Virginia Institute of Marine Science has evaluated many of the dominant uses of shallow waters in Virginia including commercial and recreational fishing, boating, swimming, and aesthetic uses. Through the use of models to evaluate the location and extent of suitable areas for each activity, potential conflicts among these multiple uses have been identified and assessed. The results of these analyses have suggested that the most pressing management issue is preservation of optimal areas for aquaculture. This requires protection of existing environmental conditions and management of potentially competing activities. The third study element was to evaluate the work of VIMS on shallow water management and determine whether the issues were ripe for legislative consideration.
Historically, Virginia has managed interests in use of its shallow tidal waters with a short term and very localized assessment of use benefits and detriments. In the past, this has been an economical and practical approach. Now, however, increasing demands and improved understanding make the approach unworkable. For example, there is an ongoing conflict between restoration of submerged aquatic vegetation and certain aquaculture practices. It is growing increasingly clear that sustaining high levels of benefit from the public resource will require advance consideration of long term impacts, and careful management of uses.
At the conclusion of this study, the Commission directed VIMS staff to develop a management strategy proposal that would: identify the best potential sites for aquaculture development; provide an opportunity for local and state agencies to cooperate in selecting areas that would be designated for aquaculture use; and provide guidance in coordination of state and local management programs to preserve the potential of designated areas to support successful aquaculture industries. This strategy is to be prepared in time for consideration and public input prior to the 2005 legislative session.