HOROWITZ, J.
This case presents a question of first impression concerning the validity of regulations adopted by the Department of Ecology (appellant) to govern its approval of applications for tax credit and exemption certificates under RCW 82.34. We conclude the regulations are valid as a permissible interpretation and implementation of RCW 82.34.
For 18 years Weyerhaeuser Company (respondent) operated in its Longview kraft paper mill three recovery boilers which performed two functions essential to the profitable production of pulp: (1) recovery of chemicals used in the pulping of wood chips, and (2) production of heat for steam used in the mill. Proper maintenance would have
In 1969 appellant issued regulations controlling gaseous emissions of sulphur into the atmosphere from kraft pulping mills. WAC 18-36. Respondent concluded the most practical and economical way to meet these standards at its Longview mill was to replace the three existing boilers with one new and larger boiler (Boiler #10). Boiler #10 was not designed to increase pulp production. It was designed only to meet the 1975 sulphur emission limits, and perform the manufacturing function of the boilers replaced at the same production level. However, it should be pointed out Boiler #10 has a capacity somewhat in excess of the capacity required to handle current production levels; this excess capacity is to insure the boiler will comply with the emission limits regardless of daily fluctuations in pulp production. Boiler #10 also cuts operating costs at the mill approximately $500,000 per year. However, this sum is only about a 2 1/2 percent return on the total cost of the new boiler and new related equipment ($19.8 million). On the other hand, Boiler #10 will provide a larger depreciable basis than that of the replaced boilers.
RCW 82.34 provides an applicant who installs a qualified pollution control facility is entitled to a tax credit and exemption certificate, which allows recovery of up to 55 percent of the capital cost of the facility over a 25-year period.
In 1970 respondent applied to appellant for such a certificate for the entire cost of Boiler #10. On December 7, 1972, appellant denied the application for such certificate. On January 10, 1973, respondent appealed to the Pollution Control Hearings Board (the board), pursuant to RCW 43.21B. On March 4, 1974, the board entered a final order, overturning appellant's denial of the certificate. The board found that although Boiler #10 performs functions essential to the profitable production of pulp at Longview, nevertheless, the sole reason for its installation was to meet, in the most economical manner, appellant's 1975 sulphur emission
The Superior Court affirmed upon the same reasoning. Appellant appeals from the superior court judgment qualifying the entire cost of Boiler #10 for certification under RCW 82.34.
The "test" for determining the eligibility of Boiler #10 for a tax exemption certificate under RCW 82.34 is set out in RCW 82.34.030 as follows:
It is clear from RCW 82.34.030 that the eligibility "test" is really three tests:
(1) The "facility" must be designed primarily for pollution control;
(2) The "facility" must be operated or intended to be operated primarily for pollution control;
(3) It must be suitable, reasonably adequate and meet the intent and purposes of RCW 70.94.
Both parties agree Boiler #10 meets tests (1) and (3). The dispute before the board and Superior Court, and on this appeal, is whether Boiler #10 has met test (2) — the operational test.
Appellant has adopted regulations (WAC 173-24) to administer the operational test. Appellant contends Boiler #10 does not meet the operational test of WAC 173-24-100 and
Respondent contends, and both the board (conclusion of law No. 7) and the Superior Court (conclusion of law No. 3) held that appellant's regulations, WAC 173-24, to the extent they deny certification of Boiler #10, are unlawful "because they are outside the framework and policy of chapter 82.34 RCW." For the reasons to follow, we disagree.
1 F. Cooper, State Administrative Law 250 (1965). The court should not invalidate a legislative rule merely because it believes the rule is unwise:
State ex rel. Pirak v. Schoettler, 45 Wn.2d 367, 371, 274 P.2d 852 (1954); accord, Pierce County v. State, 66 Wn.2d 728, 404 P.2d 1002 (1965); White v. State, 49 Wn.2d 716, 306 P.2d 230 (1957).
RCW 43.21A.080 grants appellant authority "to adopt such rules and regulations as are necessary and appropriate" to carry out its statutory duties. RCW 82.34.030 describes one such duty. This section requires "the appropriate control agency" to determine when each facility submitted for approval under RCW 82.34 has met the requisite three tests set forth above. RCW 82.34.010 (6). Appellant is the "appropriate control agency." RCW 43.21A.020; RCW 82.34.010 (6).
Moreover, the legislature, in establishing the Department of Ecology, vested appellant with very broad authority and responsibility for managing this state's environment.
RCW 43.21A.020. RCW 43.21A.900 also states:
Pursuant to the above statutory authority, appellant on August 4, 1971, issued regulations, codified in WAC 173-24. These regulations established procedures for performing its delegated duty to review the applications for tax benefits under RCW 82.34 received from the Department of Revenue, including appellant's criteria for granting or denying approval of these applications.
The portion of WAC 173-24 in question here constitutes appellant's interpretation and implementation of the "operational" test:
WAC 173-24-100. WAC 173-24-030 (6) provides:
WAC 173-24-030 (3) provides:
Thus, the operational test provided for in RCW 82.34.030, supra, is explained and implemented by WAC 173-24-100, supra, and definitional sections WAC 173-23-030 (3) and (6), supra. The test is an objective, functional test designed to best fulfill legislative intent and purpose. In practical effect, in the case of a facility deemed "necessary to the manufacture of products," certification is permitted only to the extent of its cost attributed to pollution control.
The regulations so adopted are "entitled to considerable weight in determining legislative intent," (Earley v. State, 48 Wn.2d 667, 673, 296 P.2d 530 (1956)), unless compelling reasons are presented sufficient to show the scheme is in conflict with the intent and purpose of the legislation.
We therefore turn to an evaluation of three arguments respondent urges in support of its claim the operational test of WAC 173-24 is contrary to RCW 82.34.
1. Respondent's first argument is that RCW 82.34.030 requires only that the facility be operated "primarily" for pollution control; that such requirement clearly permits certification of some multifunctional facilities, namely facilities which perform other than exclusively pollution control functions; and that certification must be determined on the basis of a "but for" test, which focuses upon Weyerhaeuser's reason for installing the multipurpose facility rather than the function of the facility.
Therefore, respondent argues the "necessary to manufacture" exclusion of WAC 173-24-100(2) in its operational test, which requires only partial certification for such multifunctional facilities, is contrary to this legislative intent.
The respondent's argument flies in the face of practical considerations which WAC 173-24 takes into account by the way in which the regulations implement the operational test of RCW 82.34. WAC 173-24 avoids what might otherwise be an inherently arbitrary, all-or-nothing operational test which would ultimately defeat the legislature's purpose in enacting RCW 82.34.
Most pollution control equipment is not in the form of "black box" or "tack on" equipment; it is in the form of newer, more modern manufacturing equipment which pollutes less. Without the objective and workable regulatory scheme embodied in WAC 173-24 for determining the "primary purpose" for which such more modern equipment is operated, there would be no tax credit at all for such equipment, and thus the legislature's purpose to encourage manufacturers to meet the pollution control standards would be impaired.
1 A. Reitze, Jr., Environmental Law ch. 1, at 77-78 (1972). This same observation is made in Reed, Economic Incentives
Therefore, we cannot agree appellant's sensible approach to implementing the clear legislative purpose of RCW 82.34 operates to "contravene the purposes and the effective implementation of the governing legislation." Clean Air Constituency v. California State Air Resources Bd., 11 Cal.3d 801, 814, 523 P.2d 617, 114 Cal.Rptr. 577 (1974).
We also believe that "ease of administration is not an `impermissible factor'" in designing procedures to carry out appellant's delegated duty in this situation. United States v. Boyd, 491 F.2d 1163, 1168 (9th Cir.1973). Appellant properly points out that because equipment changes in manufacturing plants may be made for several reasons (for example, to simultaneously modernize production and to meet pollution control standards) it is usually very difficult to identify the "primary" purpose for the change. We agree with appellant that there is a serious danger of arbitrary certification if the "primary" purpose test is construed to be a subjective test, rather than the objective test adopted by WAC 173-24.
(Italics ours.) RCW 82.34.010(1). Appellant, in WAC 173-24, relies upon the "any part" language as a basis for its partial approval scheme for manufacturing equipment. WAC 173-24-030 (3) has interpreted this statutory language to mean "any physically or conceptually identifiable part or accessories [of a facility]." WAC 173-24-030(3). We cannot say the word "part" reasonably means only a physically segregable part of a facility and not a conceptual portion. It was long ago pointed out:
Carroll's Lessee v. Granite Mfg. Co., 11 Md. 399, 409 (1857); see Vrooman v. Weed, 2 Barb. 330, 333 (N.Y. 1848) ("The word part may as appropriately be applied to an undivided as to a divided part").
2. Respondent's second argument is that to permit a facility "necessary to the manufacture of products" to receive only partial certification (WAC 173-24-100(2)) is an improper interpretation of RCW 82.34, because the statute explicitly uses this "necessary to the manufacture of products" exclusion only in the definition of facilities classified as "disposal systems" and not to facilities classified as "treatment works" or "control devices." RCW 82.34.010(3)-(4). Respondent apparently contends the rule of "expresio unius est exclusio alterius" applies here to prevent a widening of this exclusion to the other classes of facilities.
State ex rel. Spokane United Rys. v. Department of Pub. Serv., 191 Wn. 595, 598, 71 P.2d 661 (1937); accord, Swanson v. White, 83 Wn.2d 175, 183, 517 P.2d 959 (1973).
Nationwide Papers, Inc. v. Northwest Egg Sales, Inc., 69 Wn.2d 72, 76, 416 P.2d 687 (1966).
Respondent's third objection to WAC 173-24 stems from a provision in RCW 82.34.060 (2) (b) which provides for a reduction in any tax credit to the extent commercially valuable materials are recovered by the certified facility. This, respondent contends, can mean only that the legislature intended 100 percent certification for multifunctional facilities.
This contention is subject to substantially the same objections as those applicable to respondent's second argument. We cannot say the only reasonable interpretation of the legislative purpose in including subsection .060 (2) (b) is approval of 100 percent certification of facilities necessary
We conclude, therefore, that WAC 173-24 does not conflict with RCW 82.34. Indeed, even the Pollution Control Hearings Board noted in its memorandum opinion that WAC 173-24-030 (4) and -100 are "in step with the legislative intent expressed in RCW 82.34.030."
We disagree. Boiler #10, all parties agree, performs recovery functions essential for the profitable production of kraft pulp. Accordingly, that boiler is "necessary to the manufacture of products." To be eligible for the tax exemption certificate under RCW 82.34 Boiler #10 must meet the operational test of RCW 82.34.030. Respondent cannot do this because that boiler is clearly not being operated for the "primary purpose" of pollution control. We simply are unable to find that Boiler #10, which itself is the source of the hydrogen sulfide emissions regulated by WAC 18-36, can be, in the words of RCW 82.34.030, "operated ... primarily for the control, capture and removal of pollutants from the air ..." Cf. Rev. Rul. 75-334, Int. Rev. Bull. No. 1975-32. The legislature did not intend to provide a tax exemption and tax credit for facilities to the extent they create rather than abate pollution. In addition, WAC 173-24-030 (4)
We conclude that inasmuch as Boiler #10 is "necessary to the manufacture of products" (WAC 173-24-100 (2)), it is not entitled to 100 percent certification under RCW 82.34. We therefore remand this case to the Department of Ecology for a determination under WAC 173-24 of what part, if any, of the cost of Boiler #10 is attributable to pollution control purposes, and the issuance of a tax exemption and credit certificate for that amount.
Reversed.
STAFFORD, C.J., and FINLEY, ROSELLINI, HUNTER, HAMILTON, WRIGHT, UTTER, and BRACHTENBACH, JJ., concur.
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