Petition for Writ of Certiorari — Smith v. AES Sparrows Point LNG, LLC (No. 08-211)

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* 08-211 AUG 15 2008

OFtice OF THE CLERK

IN THE William K. Suter Clerk

Supreme Court of the Wnited States

JAMES T. SMITH, JR., COUNTY EXECUTIVE, BALTIMORE

COUNTY; WILLIAM J. WISEMAN, III, ZONING

COMMISSIONER, BALTIMORE COUNTY; BALTIMORE

COUNTY, MARYLAND, PETITIONERS

Vv.

AES SPARROWS POINT LNG, LLC;

MID-ATLANTIC EXPRESS, LLC

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

JOHN EK. BEVERUNGEN

County Attorney

Counsel of Record

JEFFREY GRANT COOK

Assistant County Attorney

Baltimore County Office

of Law

Courthouse, Second Floor

400 Washington Avenue

Towson, Maryland 21204

410-887-4420

Attorneys for Petitioners

CURRY & TAYLOR @ (202) 393 4141

QUESTION PRESENTED

Whether the Fourth Circuit erred in holding that the

Natural Gas Act preempts the authority of States

under the Coastal Zone Management Act to prohibit

natural gas terminals from being built in the

Chesapeake Bay Critical Area, one of the greatest yet

most vulnerable natural resources in the Nation.

TABLE OF CONTENTS

QUESTION PRESENTED

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RELEVANT PROVISIONS INVOLVED

STATEMENT

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16 U.S.C. 14556

Md. Nat. Res. Code Ann. § 8-1801

Md. Nat. Res. Code Ann. § 8-1802..

Md. Nat. Res. Code Ann. § 8-1803

Ud. Nat. Res. Code Ann. § 8-1804

Md. Nat. Res. Code Ann. § 8-1805

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TABLE OF AUTHORITIES

Page

CASES

ABBOTT LABS V. GARDNER, 387 U.S. 136, 148-49

STG fel An eRe aE RON S FE ONO Oe ae OP a ASO RO 13

AES SPARROWS POINT LNG V. SMITH, 470 F. SUPP.

2D 586 (D. MD. 2007)

EXXON SHIPPING Co. V. BAKER, 1288S. CT. 2605

(2008)

GEIER V. AMERICAN HONDA MOTOR Co., 529 U.S.

861 (2000)

HILLSBOROUGH COUNTY, FLORIDA V. AUTOMATED

MEDICAL LABORATORIES, INC., 471 U.S. 707

(1985) |

MARBURY V. MADISON, 5 U.S. (1 CRANCH) 137, 176

(1803)

MCCULLOCH V. MARYLAND, 17 U.S. (4 WHEAT.) 316,

405 (1819)

NATIONAL WILDLIFE FEDERATION V.

GOLDSCHMIDT, 677 F.2D 259, 263 (2D CIR. 1982)............006 13

NEW JERSEY V. DELAWARE, 1288S. CT. 1410, 1439

RIE eee PON ee SREB ore ED enEA Ne SUM NES 89,11

RIEGEL V. MEDTRONIC, INC., 128 S. CT. 999 (2008) 10, 11

TEXAS V. UNITED STATES, 523 U.S. 296, 300 (1998)

STATUTES

5 U.S.C. § 717b(d)(1)

: U.S.C. § 717b(e)(1)

16 U.S.C. § 1452

16 U.S.C. § L456(dX(2)........cccccevoeees ibsbaed i oedicdsteieanpehegiciiataanacadal 13

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28 U.S.C. § 1254(1)

OTHER AUTHORITIES

CONSTITUTIONAL GOVERNMENT IN THE UNITED

STATES 178 (Columbia U. Press 1961)

PETITION FOR A WRIT OF CERTIORARI

Petitioners Smith, Wiseman, and Baltimore

County respectfully petition for a writ of certiorari to

review the judgment of the United States Court of

Appeals for the Fourth Circuit.

OPINIONS BELOW

The opinion of the Court of Appeals is reported

at 527 F.3d 120 (4th Cir. 2008) and is reprinted at Pet.

App. la-14a. The District Court’s opinion is reported at

539 F. Supp. 2d 788 (D. Md. 2007), and is reprinted at

Pet. App. 15a-42a.

JURISDICTION

The Court of Appeals entered its judgment on

May 19, 2008. This Court has jurisdiction under 28

U.S.C. § 1254(1).

RELEVANT PROVISIONS INVOLVED

This case involves the intersection of two federal

statutes, two Maryland statutes, and one Baltimore

County ordinance. First, Section 717b(e)(1) of the

Natural Gas Act (“NGA”) provides:

The Commission [Federal Energy Regulatory

Commission] shall have the exclusive authority

to approve or deny an application for the siting,

construction, expansion, or operation of an LNG

[Liquefied Natural Gas] terminal.

Second, Section 717b(d)(1) of the } GA provides:

[NJothing in this chapter affects the rights of

States under the Coastal Zone Management Act.

Third, the Coastal Zone Management Act (“CZMA”)

provides, as a pre-condition to the adoption of a “State

management program” for a coastal zone, that the

management program contain:

A definition of what shall constitute permissible

land uses and water uses within the coastal zone

which have a direct and significant impact on the

coastal waters.

16 U.S.C. § 1455(d)(2)(B).

Fourth, Maryland’s Critical Area Protection Program

(““CAPP”), Md. Nat. Res. Code Ann. § 8-1808, provides

the following authority to Maryland’s 17 coastal

counties:

(a) Local jurisdictions to implement; grants. —

(1) It is the intent of this subtitle that each local

jurisdiction shall have primary responsibility for

developing and implementing a program, subject

to review and approval by the (Critical Area]

Commission.

(b) Goals of program. — A program shall consist

of those elements which are necessary or

appropriate:

(1) To minimize adverse impacts on water quality

that result from pollutants that are discharged

from structures or conveyances or that have run

off from surrounding lands;

(2) To conserve fish, wildlife, and plant habitat;

and

(3) To establish land use policies for development

in the Chesapeake Bay Critical Area or the

Atlantic Coastal Bays Criticai Area... .

Fifth, Maryland’s Coastal Facility Review Act

(“CAFRA”), Md. Envir. Code Ann. § 14-506, provides:

application. — The application [for

environmental permits in connection with

construction of the LNG facility] shall not be

processed further nor shall the analysis required

be undertaken until the county government

wherein the facility is proposed to be located or

wherein the pipeline will terminate, has certified

to the Department that all local land use

classifications, including zoning, special

exceptions, variances or conditional uses,

necessary for the location and operation of the

proposed facility have been or will be granted.

Sixth, Baltimore County’s “Chesapeake Bay Critical

Areas Protection” ordinance (Bill 9-07) lists prohibited

uses and includes:

A natural gas facility located onshore or in state

waters that is used to receive, unload, store,

transport, gasify, regasify, liquefy, or process

natural gas that is imported to the United States

from a foreign country, exported to a foreign

country from the United States, or transported

in interstate commerce by a waterborne vessel.

Section 105.C of the Baltimore County Zoning

Regulations.

STATEMENT

A. Factual Background

In November of 2005, Respondents obtained an

option to lease a parcel of land in an area of Baltimore

County called Sparrows Point. A generation ago,

industrial behemoth Bethlehem Steel Corporation

operated out of Sparrows Point. The area has a

population density five times greater than the average

in Baltimore County.

Respondents in 2006 sought approval from

FERC to construct a liquefied natural gas (“LNG”)

terminal in the Chesapeake Bay on the west shore of

Sparrows Point, south of Dundalk, Maryland. The

facility would include 1 million barrel net capacity LNG

storage tanks and consist of a 1.5 billion standard cubic

feet per day LNG import terminal. 71 FR 29, 941

(Notice of Intent dated May 24, 2006). Respondents

will attempt to thread the needle northward to Eagle,

Pennsylvania (87 miles) by way of a 28-inch-diameter

natural gas pipe. This odorless gas will pass the steel

mill, which houses the second-largest blast furnace in

the United States. Moge! & Batra, THE NEW BALANCE

OF POWER, 145 No. 6 Pub. Util. Fort. (June 6, 2007).

LNG is a natural gas that has been cooled to

approximately — 260 degrees Fahrenheit for shipment

and storage as a liquid. The gas is therefore

compressed to 1/600" of its volume in the gaseous state.

Massive ships bring it here from Europe and Africa and

they hold “approximately 130,000 cubic maters of LNG,

the equivalent of about 2.8 billion cubic feet of

regasified LNG.” Hollis, Should We Site It Here?

LNG, the Environment and Federalism, 2 Envt’l &

Energy L. & Pol’y J. 5, 7 (2007). “One shipment holds

the equivalent of five percent of the gas consumed in

the United States on an average day.” Stoppard &

Yergin, The New Prize, Foreign Affairs, Nov./Dec.

2003, at 107. In sum, Baltimore County would have

thrust upon it tanker ships, a marine terminal and

storage tanks, a trifecta in terms of risk, which include

“pool fires.” “These fires can burn on water and burn

faster and hotter than either oil or gasoline...because

pool fires cannot be extinguished, they must burn out.”

Hollis, 2 Envt’l & Energy L. & Pol’y J. at 23.

In response to community outrage and the

opposition of elected leaders at every level of

government, Baltimore County’s County Council

passed Bill 71-06, a precursor to Bill 9-07 at issue in this

case. It prohibited LNG terminals from being located

within five miles of residential areas and 500 feet of

business and manufacturing districts. On January 23,

2007, the federal district court ruled Bill 71-06 was

preempted by federal law. See AES Sparrows Point

LNG v. Smith, 470 F. Supp. 2d 586 (D. Md. 2007).

On February 5, 2007, the County Council

enacted Bill 9-07. See, Pet. App. 248a. The Bill

amended the County’s critical areas program

regulating coastal development, adding LNG facilities

to the list of prohibited uses within the Chesapeake Bay

Critical Area.

B. Procedural History

Respondents filed suit in the United States

District Court for the District of Maryland, asserting

Bill 9-07 was preempted by the NGA.' Both sides

moved pursuant to Rule 56. The District Court granted

Baltimore County’s motion for summary judgment and

denied Respondents’. The court held Bill 9-07 was a

legitimate exercise of local government authority under

the NGA’s savings clause for the “rights of States

under ... the [CZMA].” See, Pet. App. 46a. It observed

that Maryland’s Critical Area law gave Baltimore

County “primary responsibility” to implement its own

program. See, Pet. App. 28a. Because the Maryland

Critical Area Commission approved Baltimore County’s

zoning amendment, viz., Bill 9-07, so as “to become part

of Baltimore County’s local protection program under

the Critical Area Protection program,” (see, Pet. App.

30a) the County ordinance was “within the delegated

authority” of the State of Maryland and Baltimore

County under the Coastal Zone Management Act.” See,

Pet. App. 3la. The Fourth Circuit reversed by

published opinion, 527 F.3d 120, holding that the zoning

ordinance was preempted by the NGA. See, Pet. App.

Ila.

REASONS FOR GRANTING THE PETITION

The petition should be granted. The stakes are

enormous. There are six active LNG terminals in the

United States. Because current events have made

alternative energy regnant, 40 more have been

' Article VI, clause 2, contains the Supremacy Clause providing

federal preemption of state and local laws.

proposed to FERC. FERC, Existing and Proposed

North American LNG Terminals,

http://www. ferc.gov/industries/gas/indus-act/storage/

horizon-stor.pdf (last visited June 30, 2008). Conflicting

rulings from other Circuits are inevitable. Zoning is

the quintessential local government function, and the

court’s ruling allowed FERC to usurp that role.

Vesting FERC with authority over all land use

decisions concerning LNG _ terminals’ is-~ an

extraordinary overreach and a misreading of the

statutes.

The Chesapeake Bay, the largest estuary in the

United States, is home to countless marine life, vast

fisheries, and esteemed estuaries, drawing diverse

trades and boundless aesthetic enjoyment. It has a

marine ecosystem second to none but its health is

precarious, caused perhaps by development,

agricultural runoff, and pollution in general due to land

and water-based activities. Beyond its obvious

aesthetic value, the Bay provides billions in revenue to

the “Delmarva” region. Failing to protect this

invaluable resource is a flagrant violation of the public

trust.

This case presents the Court with = an

opportunity to save the Chesapeake Ray. While LNG

terminals might be necessary, the need is not so great

that one should be erected in one of the United States’

greatest natural resources. An enduring tenet of this

Court’s jurisprudence is that local governments are the

recognized authority in establishing permissible and

prohibited land uses--on the common sense rationale

that localities are in the best position to determine the

risks and benefits of a proposed use and that the people

most affected should have a voice. The appellate

court’s interpretation of the NGA improperly usurps

this critical feature of federalism.

FERC cannot lawfully decide from Washington,

D.C. what an acceptable land use is in Baltimore (or Los

Angeles). It cannot seriously be argued that Congress

gave to FERC a blank check in advance of even

knowing what sites are contemplated. This federal

administrative agency has no such power to desecrate

the Chesapeake Bay, the will of the people in Maryland,

and the safety of citizens in Baltimore County.

This Court has never ruled on 15 U.S.C. §

717b(e)(1). It has never interpreted 15 U.S.C. §

717b(d)(1).. Both laws were enacted as part of the 2005

Energy Policy Act. The federal goverr.ment, the state

governments, and local governments need guidance.

Thus, the first prong of this Court’s Rule 10(c) is

satisfied. The issue is not going to go away as this is

”

“an energy-starved Nation.” New Jersey v. Delaware,

128 S. Ct. 1410, 1439 (2008) (Scalia, J., dissenting).

While this case is one of first impression, it presents the

Court with the opportunity to protect local and state

government’s traditional land use authority--police

powers that cannot be usurped by unelected

bureaucrats in Washington, D.C. The Court has the

chance to reconcile congressional action on energy with

the power of local governments to regulate zoning.

THE DECISION BELOW CONFLICTS WITH

NEW JERSEY v. DELAWARE, 128 S. CT.

1410 (2008).

New Jersey v. Delaware, decided by this Court

just this past spring, addressed who had the power to

decide upon the propriety of placing an LNG facility in

the Delaware River. This Court held, “[CJonsistent

with the scope of its retained police power to regulate

certain riparian uses, it was within Delaware’s

authority to prohibit construction of the facility within

its domain.” 128 S. Ct. at 1427. It added, “we cannot

fathom why, if Delaware could block a casino, or even a

restaurant on a pier extending into its territory, it

could not reject a permit for the LNG terminal

described supra, at 1417-1418.” /d. at 1427 n.21.

It is true, as no doubt Respondents will urge,

that the case involved riparian rights. But it is

undisputed that the LNG terminal prcposed here is in

Maryland’s Chesapeake Bay Critical Area and, more

precisely, in Baltimore County’s portion of the critical

area. Baltimore County submits the Chesapeake Bay

in this case is akin to the Delaware River. Delaware’s

Coastal Zone Act mirrors Maryland’s. Cf. id. at 1418

n.l0 with Md. Nat. Res. Code Ann. § 8-1808(b). How

can Delaware have the power and Maryland not?

Il. THIS CASE CONFLICTS WITH

HILLSBOROUGH COUNTY, FLORIDA .

AUTOMATED MEDICAL LABORATORIES,

INC,, 471 U.S. 707 (1985).

“We start with the assumption that the historic

police powers of the states were not to be superseded

by the Federal Act unless that was the clear and

manifest purpose of Congress.” Hillsborough, 471 U.S.

at 715 (quoting Rice v. Santa Fe Elevator Corp., 331

U.S. 218, 230 (1947)). “The question of the relation of

the States to the federal government is the cardinal

question of our constitutional system.” Woodrow

Wilson, CONSTITUTIONAL GOVERNMENT IN THE

UNITED STATES 173 (Columbia U. Press 1961). The

federalist design of government in this Country is

inscribed in the United States Constitution--granting

federal government limited and enumerated powers,

reserving all other matters to the states. Chief Justice

Marshall’s view is iron-clad: “This government is

acknowledged by all to be one of enumerated powers.

The principle, that it can exercise only the powers

granted to it, would seem too apparent .... That

principle is now universally admitted.” McCulloch v.

Maryland, 17 U.S. (4 Wheat.) 316, 405 (1819). The

limitations on federal power “may not be mistaken, or

forgotten.” Marbury v. Madison, 5 U.S. (1 Cranch) 137,

176 (1803).

In Hillsborough, the Food and _ Drug

Administration had issued regulations in 1973 for the

collection of blood plasma. In 1980, Hillsborough

County adopted two ordinances affecting the collection

of plasma. The Court there stated the well-established

presumption against preemption; viz., “that state or

local regulation of matters related to health and safety

is not invalidated under the Supremacy Clause.” /d. at

715. The unanimous court held the county law could

stand. More recently, in Rregel v. Medtronic, Inc., 128

S. Ct. 999 (2008), a unanimous court held again that “the

presumption against preemption is heightened ‘where

federal law is said to bar state action in fields of

traditional state regulation.” Jd. at 1013.

In this case, the “presumption against

preemption” is stronger than in either Hillsborough or

Rezgel, given that protection of coastal resources and

land use regulation are quintessential state functions.

Congress passed the CZMA in 1972. The cause was

noble and necessary: States were to “preserve, protect,

develop, and where possible, to restore or enhance, the

resources of the Nation’s coastal zone.” 16 U.S.C. §

1452. The CZMA “require[s]/ States to submit their

coastal management programs to the Secretary of

Commerce for review and approval.” New Jersey v.

Delaware, 128 S. Ct. at 1425 (emphasis added).

The Fourth Circuit ruled the Energy Policy Act

of 2005, amending the NGA, took the power from

Maryland and gave it to FERC. 527 F.8d at 125. In

doing so, the court turned Hillsborough on its head.

The CZMA affirmed that the job of coastal

management belonged to the states. This magnifies the

key phrase this court emphasizes again and again about

“traditional state regulation.” Regulation of land uses

along coastlines is a state function, and the Energy

Policy Act of 2005 did not (indeed, could not) change

that. Section 717b(e)(1) provides FERC “shall have the

exclusive authority to approve or deny an application

for the siting ... of an LNG terminal.” The Fourth

Circuit held state and local governments had “no

residual power to site LNG terminals.” Jd. _ It

determined the Savings Clause in the 2005 amendment

--“That ‘nothing in the NGA affects the rights of States

under’ the CZMA”--did not encompass the Baltimore

County ordinance. /d. at 126.

The last time this court had to deal with a

Savings Clause was its 5 to 4 decision in Geier v.

American Honda Motor Co., 529 U.S. 861 (2000).

Justice Stevens’ dissent was conveyed with usual

concision: “This is a case about federalism.” /d. at 887.

It is particularly apt because once again it dealt with

the presumption against preemption, stating “The

signal virtues of this presumption are its placement of

the power of preemption squarely in the hands of

Congress, which is far more suited than the Judiciary to

strike the appropriate state/federal balance

(particularly in areas of traditional state regulation),

and its requirement that Congress speak clearly when

exercising that power.” Jd. at 906 (emphasis added).

Baltimore County harkens back to the italicized three

words in the last sentence. Congress certainly did not

speak “clearly” to the preemption issue in the 2005

amendment to the NGA. Indeed, the statute nowhere

mentions the word “preempt,” which Congress

routinely employs to make itself clear. See, e.g., P.L.

110-53 (Congress states, in implementing

recommendations of the 9/11 Commission Act of 2007,

“{njothing in this section preempts ....”); P.L. 110-114

(Water Resources Development Act of 2007 provides

"[nJothing in this section shall preempt ....”); P.L. 110-

161 (Consolidated Appropriations Act of 2008 provides

“this subtitle preempts the laws of any State ....”).

Congress knew how to concisely and explicitly provide

for preemption of state laws; it just did not do so in the

2005 Energy Policy Act.

And even if it had, Congress’ 2005 amendment

declared, “nothing affects the rights of States” under

the CZMA. The word “nothing” is unambiguous. The

only question that need be posed is: what are the

“rights of States” under the CZMA? The CZMA is

explicit: States define “permissible land uses and water

uses within the coastal zone.” 16 U.S.C. § 1455(d)(2). In

fact, a state’s program must establish such uses or it

cannot be approved. Baltimore County’s zoning law,

approved by the State of Maryland, did just that and is

not preempted by the NGA.

Review by this Court extends well beyond the

two sides here. An entire industry, and the great

majority of the Nation’s population (because it

disproportionately inhabits on or near the two coasts)

and the welfare of the Chesapeake Bay will be affected.

The case is important enough to warrant the Court’s

time to review it and reverse the judgment’. The facts

are straightforward and minimal, and the Court’s ruling

will have far-reaching effects.

* In doing so, the Court can remonstrate the Fourth Circuit’s

ripeness dodge. The Fourth Circuit managed to rule on the merits

but only by first dismissing Baltimore County’s exhaustion of

administrative remedies argument. 527 F.3d 120, 125 n.7. Simply

put, the elaborate approval process for LNG facilities as spelled

out in the NGA has yet to be undertaken by AES. FERC has yet

to approve AES’ proposal (and may never do so), and that agency

routinely addresses preemption issues. There was no need for the

Fourth Circuit to “jump the gun.” Respondents’ appeal was not

fit for judicial review because courts must not become entangled in

cases whose effects may never be “felt in a concrete way by the

challenging parties.” Abbott Labs v. Gardner, 387 U.S. 136, 148-49

(1967). “Courts have no business adjudicating the legality of non-

events.” Natiowal Wildlife Federation v. Goldschmidt, 677 F.2d

259, 263 (2d Cir. 1982). Respondents’ “claim is not ripe for

adjudication...!because]| it rests upon contingent future events that

may not occur as anticipated, or indeed may not occur at all.”

Texas v. United States, 523 U.S. 296, 300 (1998).

The 2005 amendment and its effect on the CAMA

is a Straightforward--but difficult--legal question. If the

rush is on for natural gas, then the Court can settle the

zoning uncertainties that now impact the LNG

industry, FERC, and the affected population. The

Valdez experience, see Haxon Shipping Co. v. Baker,

128 S. Ct. 2605 (2008), would appear minor should the

easy-to-spot, highly visible ships carrying the liquid

natural gas meet with terror, the risk of which is

exacerbated by the already strained resources of the

United States Coast Guard, which has lead

responsibility for the tanker to get saieiy to port.

James Lyons, “LNG Port Security,” The Washington

Times (July 21, 2008), at Commentary on A25.

CONCLUSION

Because this case presents an important issue of

federal law, the petition for a writ of certiorari should

be granted.

Respectfully submitted,

JOHN E. BEVERUNGEN

County Attorney

Counsel of Record

JEFFREY GRANT COOK

Assistant County Attorney

Baltimore County Office

of Law

Courthouse, Second Floor

400 Washington Avenue

Towson, Maryland 21204

(any footnotes trail end of each document)

No. 07-1615

UNITED STATES COURT OF APPEALS FOR THE

FOURTH CIRCUIT

AES SPARROWS POINT LNG, LLC; MID-

ATLANTIC EXPRESS, LLC,

Plaintiffs-Appellants,

JAMES T. SMITH, JR., COUNTY EXECUTIVE,

BALTIMORE COUNTY; WILLIAM J. WISEMAN,

III, ZONING COMMISSIONER, BALTIMORE

COUNTY; BALTIMORE COUNTY, MARYLAND,

Defendants-Appellees.

Appeal from the United States District Court for the

District of Maryland, at Baltimore. Richard D. Bennett,

District Judge. (1:07-cv-00325-R DB).

January 30, 2008, Argued

May 19, 2008, Decided

Reversed and remanded by published opinion. Judge

Shedd wrote the opinion, in which Judge O’Grady

joined. Chief Judge Williams wrote a separate opinion

concurring in the judgment.

COUNSEL: ARGUED: Jeffrey A. Lamken, BAKER

BOTTS, L.L.P., Washington, D.C., for Appellants.

John Edward Beverungen, County Attorney,

BALTIMORE COUNTY OFFICE OF LAW, Towson,

Maryland, for Appellees.

ON BRIEF: James W. Bartlett, III, Scott H. Phillips,

SEMMES, BOWEN & SEMMES, Baltimore,

Maryland; Randolph Q. McManus, Mark Cook, Michael

G. Pattillo, Jr., Adam J. White, Rachel M. McKenzie,

BAKER BOTTS, L.L.P., Washington, D.C., for

Appellants.

Jeffrey Grant Cook, Assistant County Attorney,

BALTIMORE COUNTY OFFICE OF LAW, Towson,

Maryland, for Appellees.

OPINION

SHEDD, Circuit Judge:

AES Sparrows Point LNG, LLC and Mid-Atlantic

Express, LLC (together, "AES") brought this suit

against Baltimore County, Maryland, its executive, and

its zoning commissioner (together, "the County")

seeking a declaration that County Bill 9-07, which

prohibits the siting of any liquefied natural gas ("LNG")

terminal in the County's Chesapeake Bay Critical Area,

is preempted by the Natural Gas Act ("NGA"). The

district court granted summary judgment to the

County, concluding that Bill 9-07 is saved from

preemption because it "is within the delegated

authority of the State of Maryland and the County

under the Coastal Zone Management Act" ("CZMA")

and “is enforceable as part of the State of Maryland's

Coastal Management Program." J.A. 271, 284. AES now

appeals. We hold that Bill 9-07 is not part of Maryland's

federally approved Coastal Zone Management Plan

("CMP"), and therefore is not saved from preemption as

an exercise of Maryland's rights under the CZMA.

Accordingly, we reverse the judgment of the district

court and remand for further proceedings.

Before turning to the facts of this case, we describe

briefly the relevant statutory framework. The Natural

Gas Act, 15 U.S.C. §§ 717 et seq., requires a party

seeking to construct an LNG terminal to first obtain

authorization from the Federal Energy Regulatory

Commission ("FERC"). 15 U.S.C. § 717b(a). In order to

do so, applicants must comply with the NGA's

requirements as well as complete FERC's extensive

pre-filing process. See 18 C.F.R. § 157.21. FERC must

then consult with the appropriate state agency on

numerous state and local issues. See 15 U.S.C. § 717b-

l(b). The NGA also contains two provisions, added in

2005, that are pertinent to this appeal. The first

provides that "[FERC] shall have the exclusive

authority to approve or deny an application for the

siting, construction, expansion, or operation of an LNG

terminal." 15 U.S.C. § 717b(e)(1).! The second (the

"Savings Clause") provides that "nothing in the [NGA]

affects the rights of States under” the CZMA and two

other federal statutes.* 15 U.S.C. § 717b(d).

The CZMA, 16 U.S.C. $§ 1451, et seq., was designed "to

encourage states to develop’ land-use planning

programs that will preserve, protect, and restore the

environment of their coastal zones." Shanty Town

Assocs. Ltd. P'ship v. EPA, 843 F.2d 782, 793 (4th Cir.

1988). To that end, the CZMA authorizes states to

create CMPs setting forth the state's "objectives,

policies, and standards to guide public and private uses

of lands and waters in the coastal zone." 16 U.S.C. §

1453(12). The CZMA sets forth detailed requirements

that a CMP must meet in order to obtain federal

approval. See 16 U.S.C. §§ 1454-55. Once a state's CMP

is approved by the National Oceanic and Atmospheric

Administration ("NOAA"),’ the state is eligible to

receive federal grants for the purpose of administering

its coastal zone management programs. 16 U.S.C. §

1455. In addition, the CZMA requires that any federal

agency activity affecting the state's coastal zone "be

carried out in a manner which is consistent to the

maximum extent practicable with the enforceable

policies of approved (CMPs]." 16 U.S.C. § 1456(c)(1).

The CZMA therefore gives states with approved CMPs

the right to engage in "consistency review," permitting

them to conditionally veto federally permitted projects

that are not consistent with "the enforceable policies of

the state's approved [CMP]," subject to a final override

by the Secretary of Commerce. 16 U.S.C. §

1456(c)(3)(A); see generally Cal. Coastal Comm'n v.

Granite Rock Co., 480 U.S. 572, 590-91, 107 S. Ct. 1419,

94 L. Ed. 2d 577 (1987) (explaining consistency review).

Finally, the CZMA specifies the procedures a state

must follow in order to amend its CMP, which include

presentation of any such amendment to NOAA for

approval. See 16 U.S.C. § 1455(e).

The facts of this case are not disputed. To meet the

demand for natural gas in the Mid-Atlantic region, AES

proposes to build an LNG import terminal with the

necessary transmission pipeline at Sparrows Point, a

heavily industrialized coastal area on the Chesapeake

Bay in the County. LNG, which is natural gas that has

been cooled to -260 degrees Fahrenheit to form a liquid,

occupies one six-hundredth of the volume of natural gas

in its gaseous state. AES' proposed terminal would

receive LNG, store it, and regasify it for transportation

and delivery to residential, commercial, and industrial

end users. Because LNG can be economically

transported by sea from gas-producing areas worldwide

to many domestic and foreign markets, LNG import

terminals are typically sited in coastal areas with

shipping access to foreign countries.

In 2006, responding to public opposition to the siting of

an LNG terminal at Sparrows Point, the County

Council approved Bill 71-06, which amended the

County's Zoning Regulations to provide that an LNG

terminal can only be constructed with a "special

exception” and must be located at least five miles from

residential zones and 500 feet from businesses. J.A. 79.

This zoning amendment would have prevented AES

from constructing an LNG facility at Sparrows Point.

Following passage of Bill 71-06, AES brought suit in

federal court, arguing that Bill 71-06 was preempted

under the Supremacy Clause of the United States

Constitution by the NGA's grant of exclusive authority

to FERC to site LNG terminals. The district court

agreed and enjoined the County from enforcing the

zoning ordinance. See AHS Sparrows Point LNG, LLC

v. Smith, 470 I. Supp. 2d 586, 601 (D. Md. 2007)(""AES

“ey

The County responded in 2007 by passing Bill 9-07,

which takes a different approach to banning LNG

facilities at Sparrows Point. Instead of restricting LNG

terminal siting based on proximity to residential and

commercial areas, Bill 9-07 makes the restriction on

LNG facilities a matter of coastal concern by amending

the County's Zoning Regulations to include LNG

terminals among the prohibited uses in the Chesapeake

Bay Critical Area.‘ Because the proposed Sparrows

Point site is located within the County's Chesapeake

Bay Critical Area,® Bill 9-07 prevents AES from

constructing an LNG facility there.

AES then filed the present suit, secking essentially the

same injunctive and declaratory relief as in AHS /. The

County responded by requesting that Maryland's

Critical Area Commission for the Chesapeake and

Atlantic Coastal Bays (the “Critical Area Commission")

amend the County's Chesapeake and Atlantic Coastal

Bays Critical Area Protection Program ("CAPP") to

include Bill 9-07's restriction on LNG terminal siting in

coastal areas. The CAPP was enacted pursuant to Md.

Code Ann., Nat. Res. §§ 8-1801 et seq., and is one of

over 50 state laws identified in Maryland's CMP as

effectuating Maryland's coastal management policies.®

Before the district court rendered its decision, the

Critical Area Commission approved the adoption of Bill

9-07 into the CAPP. Maryland, however, never

presented Bill 9-07 to NOAA for approval by that

agency, pursuant to the CZMA's procedures for

amending state CMPs.

The district court concluded that Bill 9-O7 was not

preempted by the NGA. Reasoning that by adopting

Bill 9-07 into the County's CAPP, Maryland also had

incorporated it into its CMP, the district court

concluded that Bill 9-07 represented an exercise of

Maryland's "delegated authority" under the CZMA and

was thus saved from preemption by the NGA's Savings

Clause. The district court also held that Bill 9-07 does

not facially discriminate against or unduly burden

interstate and foreign commerce in violation of the

Commerce Clause of the United States Constitution.

Accordingly, the district court denied AES' request for

declaratory and injunctive relief and granted summary

judgment in favor of the County. This appeal followed.

[I]

AES' primary contention on appeal, as below, is that

Bill 9-07 is preempted by the NGA. We review this

legal question de novo. Cox v. Shalala, 112 F.3d 151,

153 (4th Cir. 1997).’

Tie Supremacy Clause of the United States

Constitution provides that "[t]his Constitution, and the

Laws of the United States which shall be made in

Pursuance thereof... shall be the supreme Law of the

Land... any Thing in the Constitution or Laws of any

State to the Contrary notwithstanding.” U.S. Const.

art. VI, cl. 2. Under the Supremacy Clause, state law

that conflicts with federal law is “without effect."

Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 112

S. Ct. 2608, 120 L. Ed. 2d 407 (1992) (internal quotation

omitted). Nevertheless, in evaluating arguments based

on the Supremacy Clause, we begin with "the

assumption that the historic police powers of the States

[are] not to be superseded by .. . Federal Act unless

that [is] the clear and manifest purposes of Congress."

Id. (internal quotation and citation omitted). As always,

we look first to the language of a statute to determine

Congress' intent. Sprietsma v. Mercury Marine, 537

U.S. 51, 62-63, 128 S. Ct. 518, 154 L. Ed. 2d 466 (2002).

When that intent is "explicitly stated in the statute's

language,’ conflicting state law is expressly preempted.

Cipollone, 505 U.S. at 516 (internal quotation omitted).

RB.

The NGA provides that FERC "shall have the exclusive

authority to approve or deny an application for the

siting, construction, expansion, or operation of an LNG

terminal." 15 U.S.C. § 717b(e)(1) (emphasis added).

Viewed in isolation, this grant of exclusive authority to

FERC leaves state and local governments with no

residual power to site LNG terminals or to take actions

that would effectively approve or deny such siting. See

AES I, 470 F. Supp. 2d at 598. Accordingly, unless a

state law prohibiting the siting of LNG terminals is

exempted from § 717b(e)(1)'s preemptive effect by

some other provision of federal law, it is unenforceable

under the Supremacy Clause.

The County argues that the NGA's Savings Clause

operates to save Bill 9-07 from preemption by §

717b(e)Q1). Specifically, the County contends that

because Bill 9-07 is part of Maryland's Critical Area

Laws, which in turn are one component of the state's

CMP, the County's ban on the siting of LNG terminals

in the Chesapeake Bay Critical Area is the exercise of

its rights under the CZMA.

We reject the County's argument. The Savings Clause

exempts "rights of States under" the CZMA from the

preemptive force of FE RC's exclusive authority to site

LNG terminals. The mechanism the CZMA provides for

the exercise of those rights--whatever their content or

source--is a federally approved CMP. Thus, the County

has no authority under the CZMA to enact a ban on

LNG terminals unless, at a minimum, that ban is

enacted pursuant to the procedures established by the

CZMA. Accordingly, our inquiry must focus first on

whether Bill 9-07 has been incorporated into

Maryland's CMP.

The CZMA specifies the manner by which a state may

amend its approved CMP. Any state wishing to amend

its approved plan must "promptly notify the Secretary

[of Commerce] of any _ proposed amendment,

modification, or other program change and submit it for

the Secretary's approval." 16 U.S.C. § 1455(e)(1). An

amendment becomes effective only after the Secretary

approves it or fails to take action within the prescribed

time. "[A] coastal state may not implement any

amendment, modification, or other change as part of its

approved management program unless the amendment,

modification, or other change is approved by the

Secretary." 16 U.S.C. § 1455(e)(3)(A). Further, “[a]

proposed amendment, modification, or change which...

is not finally approved .. . shall not be considered an

enforceable policy" of the CMP. 16 USC. §

1455(e)(3)(B).

The district court concluded that Bill 9-07 did not

constitute an amendment to Maryland's CMP, but

rather only "the implementation of it at the local level."

J.A. 282-83. We disagree. "Amendment" for purposes of

the CZMA is defined in 15 C.F.R. § 923.80(d):

10a

For purposes of this subpart, amendments are

defined as substantial changes in one or more of

the following coastal management program

areas:

(1) Uses subject to management;

(2) Special management areas;

(3) Boundaries;

(4) Authorities and organization; and

(5) Coordination, public involvement and the

national interest.

We have no difficulty concluding that Bill 9-07 is an

"amendment" of Maryland's CMP because it imposes a

categorical ban on LNG terminals in the Chesapeake

Bay Critical Area that the CMP did not previously

contain. This, in our view, constitutes a "substantial

change" in the "uses subject to management" by the

CMP. It also implicates the "national interest" in the

"the siting of facilities such as energy facilities which

are of greater than local significance." 16 U.S.C. §

1455(d)(8).

The County does not dispute that it has never

presented Rill 9-07 to NOAA for approval as required

by the CZMA. The CZMA makes clear, however, that

the mere adoption of Bill 9-07 into the County's CAPP

by Maryland's Critical Area Commission is_ not

sufficient to make Bill 9-07 part of Maryland's CMP.

Were it otherwise, a state could unilaterally amend its

CMP in violation of the CZMA's requirement of federal

approval.

Until NOAA approves Bill 9-07 or fails to take action

after being presented with it, it is not part of

lla

Maryland's CMP and cannot be saved from preemption

by the NGA's Savings Clause.° Therefore, Bill 9-07 is

preempted by the NGA's grant of exclusive authority

to FERC "to approve or deny an application for the

siting, construction, expansion, or operation of an LNG

terminal," 15 U.S.C. § 717b(e)(1), and may not be

enforced by the County to prevent the construction of

an LNG terminal at Sparrows Point.’

For the foregoing reasons, we reverse the judgment of

the district court and remand for further proceedings

consistent with this opinion.

REVERSED AND REMANDED

CONCUR BY: WILLIAMS

CONCUR

WILLIAMS, Chief Judge, concurring in the judgment:

Because I conclude that Baltimore County Bill 9-07 is

expressly preempted by the Natural Gas Act under the

Supremacy Clause, I would reverse the judgment of the

district court. I therefore concur in the judgment. I do

not agree, however, with the suggestion by the

majority that Bill 9-07's express liquefied natural gas

terminal ban, although "preempted" today, might be

"saved" from preemption tomorrow if approved by the

National Oceanic and Atmospheric Administration as

an amendment to Maryland's Coastal Zone

Management Plan. Majority Op. at 9-10 and nJ9. |

cannot see how legislation like Bill 9-07, which

12a

expressly bans liquefied natural gas terminal siting in

the Chesapeake Bay Critical Area, can ever be a

"right[] of States under" the Coastal Zone Management

Act.

'The NGA defines "LNG terminal" to include:

(A]ll natural gas facilities located onshore or in

State waters that are used to receive, unload,

load, store, transport, gasify, liquefy, or process

natural gas that is imported to the United States

from a foreign country, exported to a foreign

country from the United States, or transported

in interstate commerce by waterborne vessel.

15 U.S.C. 3 717a(11).

“The Clean Air Act (42 U.S.C. $§ 7401, et seq.) and the

Federal Water Pollution Control Act (33 U.S.C. §§

1251, et seq.). Neither statute is relevant to this appeal.

*The CZMA vests this approval authority with the

Secretary of Commerce, who has in turn delegated it to

NOAA. See Dep't of Commerce Organizational Order

10-15, § 3.01(u) (May 28, 2004).

‘Rill 9-07's definition of "Liquefied Natural Gas Facility"

is substantially the same as that of the NGA. See J.A.

107.

*The Chesapeake Bay Critical Area includes, subject to

certain statutory exclusions, "[aJll waters of and lands

under the Chesapeake Bay and its tributaries to the

head of tide as indicated on the State wetlands maps,

and all State and private wetlands designated under

' 13a

Title 16 of the Environment Article" and "[aJll land and

water areas within 1,000 feet beyond the landward

boundaries of State or private wetlands and the heads

of tides designated under Title 16 of the Environment

Article." Md. Code Ann., Nat. Res. § 8-1807(a).

S‘NOAA approved Maryland's CMP in 1978, and in 1986

approved an amendment to the CMP to incorporate the

CAPP. Prior to its purported amendment by Bill 9-07,

Maryland's CMP contained no ban on the siting of LNG

terminals in coastal zones.

We find no merit in the County's contention that AES

has failed to exhaust its administrative remedies before

bringing suit. The doctrine of exhaustion requires

parties to exhaust "prescribed administrative

remed[ies]" prior to seeking relief in a federal court. See

Woodford v. Ngo, 548 U.S. 81, 126 S. Ct. 2378, 2385, 165

L. Ed. 2d 368 (2006) (emphasis added). The County

identifies no mandatory administrative remedy that

ES has failed to exhaust in this case.

“Indeed, even "routine program changes” that do not

rise to the level of formal amendments must be

presented to NOAA so that NOAA may ensure they

are not in fact amendments. Until a state has done so,

even such routine changes in a CMP cannot serve as

the basis for a state's conditional veto of a federally

permitted project in consistency review. See 15 C.F.R.

§ 923.84.

*We do not reach the question of whether Bill 9-07

would fall within the Savings Clause if it had been

approved by NOAA and were properly incorporated

into Maryland's CMP, and we express no opinion on

14a

this issue. There is some indication that NOAA would

not approve an LNG terminal ban as an amendment to

a state's CMP, see Coastal Zone Management Act

Federal Consistency Regulations, 71 Fed. Reg. 788,

823-24 (Jan. 5, 2006) (discussing the intersection of the

NGA and CZMA and stating that "NOAA will not

approve State policies that on their face contain

requirements that are preempted by Federal law.").

However, NOAA could change its position or simply

decline to decide at all which state policies are or are

not preempted. Indeed, NOAA has approved LNG

terminal bans in CMPs in the past, at least before the

NGA was amended in 2005 to give FERC exclusive

authority to site LNG terminals. See New Jersey v.

Delaware, 128 S. Ct. 1410, 1426, 170 L. Ed. 2d 315 (2008)

(noting that Delaware's CMP contains an LNG terminal

ban approved in 1979). If NOAA changes course, we

might at that time be called upon to define the meaning

of "rights . . . under" the CZMA or to decide the

question of whether the NGA's Savings Clause

operates to save an otherwise preempted ban on LNG

terminals. Those questions, however, are not before us

today, and we therefore decline to address them.

"In hght of our conclusion, we need not address AES'

contention that Bill 9-07 also violates the Dormant

Commerce Clause.

15a

Civil Action No.: RDB-07-325

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAND

AES SPARROWS POINT LNG, LLC, et al.,

Plaintiffs,

¥.

JAMES T. SMITH, JR., et al.,

Defendants.

June 22, 2007, Decided

COUNSEL: For AES Sparrows Point LNG, LLC,

Plaintiff: James W Bartlett, III, LEAD ATTORNEY,

Scott Hamilton Philips, Semmes Bowen and Semmes

PC, Baltimore, MD.; Jeffrey A Lamken, Randolph Q

McManus, Baker Botts ILLP, Washington DC.; Michael

G Pattillo Jr, William and Connolly LLP, Washington

DC.

For Mid-Atlantic Express, LLC, Plaintiff: James W

Bartlett, III, LEAD ATTORNEY, Scott Hamilton

Philips, Semmes Bowen and Semmes PC, Baltimore,

MD.; Michael G Pattillo Jr, William and Connolly LLP,

Washington DC.

For James T. Smith, Jr., County Executive, Baltimore

County, William J. Wiseman, III, Zoning

Commissioner, Baltimore County, Baltimore County,

Maryland, Defendants: Jeffrey Grant Cook, Baltimore

County Office of Law, Towson MD.; John Edward

16a

Beverungen, Baltimore County Law Department,

Towson MD.

JUDGES: Richard D. Bennett, United States District

Judge.

OPINION BY: Richard D. Bennett

OPINION

MEMORANDUM OPINION

Plaintiffs AES Sparrows Point LNG, LLC and Mid-

Atlantic Express, LLC ("Plaintiffs") have brought this

action for declaratory and injunctive relief against

James T. Smith, Jr., in his official capacity as the

County Executive of Baltimore County, William J.

Wiseman, III, in his official capacity as the Zoning

Commissioner for Baltimore County, and Baltimore

County, Maryland (collectively, "Defendants" or "the

County"). The Plaintiffs seek a declaration that an

amendment to section 105 of the Baltimore County

Zoning Regulations, as set forth in Bill 9-07 ("the

Zoning Amendment"), prohibiting the siting of liquified

natural gas ("LNG") facilities in the Chesapeake Bay

Critical Areas in Baltimore County, is preempted under

the Supremacy Clause of the United States

Constitution’ by the Natural Gas Act, 15 U.S.C. §§ 717,

et seq. (2007), as amended by the Energy Policy Act of

2005, Pub. L. No. 109-58, § 311, 119 Stat. 594, 685 (2005).

Pending before this Court are the parties' cross-

motions for summary judgment. The issues have been

fully briefed by the parties and a hearing was held by

this Court on June 6, 2007.

17a

The County initially attempted to regulate LNG

facilities by the passage of a zoning ordinance that

prohibited the siting of LNG facilities within a certain

distance of residential and commercial areas. This

Court held that this earlier ordinance was

unenforceable because it was preempted under the

Supremacy Clause of the United States Constitution by

the Natural Gas Act. See AES Sparrows Point LNG,

LLC v. Smith, 470 F. Supp. 2d 586 (D. Md. 2007) ("AES

I"). In that earlier opinion, this Court noted that the

2005 amendments to the Natural Gas Act expressly

reserve to the states their rights pursuant to three

environmental statutes: the Coastal Zone Management

Act of 1972, 16 U.S.C. §§ 1451, et seqg., the Clean Air

Act, 42 U.S.C. $§ 4201, et seqg., and the Federal Water

Pollution Control Act, 33 U.S.C. $§ 1251, et seg.” Id. at

597. The Zoning Amendment at issue in this case,

unlike the first zoning ordinance, only prohibits the

construction of LNG facilities in Baltimore County's

environmentally sensitive Chesapeake Bay Critical

Areas and has now been incorporated into the State of

Maryland's Coastal Zone Management Act program.

For the reasons that follow, Defendants' Motion for

Summary Judgment will be GRANTED, and the

Plaintiffs’ Motion for Summary Judgment will be

DENIED. This Court declares that the Zoning

Amendment, as set forth in Bill 9-07, is not preempted

by the Natural Gas Act and is within the delegated

authority of the State of Maryland and Baltimore

County under the Coastal Zone Management Act.

BACKGROUND

I. Factual and Procedural Background

18a

The facts of this case were previously noted in this

Court's opinion in AF'S J. Plaintiff AES Sparrows Point

LNG, LLC ("AES") entered into an option agreement

on November 3, 2005, to lease a site at 600 Shipyard

Road in Baltimore County, Maryland, in order to

construct an LNG terminal and to import, store, and

regasify LNG. (Am. Compl. Ex. 1.) Pursuant to this

option agreement, Mid-Atlantic Express, LLC

proposes to construct and operate an 87-mile 30-inch

outside diameter natura] gas pipeline extending from

the Sparrows Point site to interconnections with

existing natural gas pipeline systems and terminating

in Eagle, Pennsylvania. (/d. 4 13.) On March 24, 2006,

Plaintiffs initiated the pre-filing process necessary to

file a formal application with the Federal Energy

Regulatory Commission ("FERC") to build an LNG

terminal at the Sparrows Point site. (/d. at Ex. 3.)

Upon hearing of AES's plans, local groups and elected

officials expressed concern about the negative effects of

the proposed plant on the surrounding community and

the environment. In response to public opposition, on

June 19, 2006, the Baltimore County Council approved

Bill 71-06, amending section 256.4 of the Baltimore

County Zoning Regulations. (/d. at Ex. 6.) The

ordinance provided that an LNG terminal could only be

constructed with a "special exception" and had to be at

least 5 miles from residential zones and 500 feet from

business zones. (/d.) The ordinance would have

prevented the Plaintiffs from constructing an LNG

facility at Sparrows Point.

On September 22, 2006, Plaintiffs filed a lawsuit in this

Court against James T. Smith, Jr., in his official

capacity as the County Executive of Baltimore County,

19a

William J. Wiseman, III, in his official capacity as the

Zoning Commissioner for Baltimore County, and

Baltimore County seeking declaratory and injunctive

relief on the grounds that Bill 71-06 violated the

Supremacy Clause of the United States Constitution

and was preempted by the Natural Gas Act. The

Defendants filed a motion to dismiss for lack of ripeness

and subject matter jurisdiction, and the Plaintiffs filed a

motion for summary judgment. After a hearing held on

January 10, 2007, this Court issued an opinion granting

the Plaintiffs' motion for summary judgment and

denying the Defendants’ motion to dismiss. AHS /, 470

F’. Supp. 2d 586 (D. Md. 2007). This Court declared the

zoning ordinance to be unconstitutional under the

Supremacy Clause and enjoined the County from

enforcing it. /d. at 601.

On February 5, 2007, Baltimore County passed Bill 9-07

("the Zoning Amendment"), which amends section 105

of the Baltimore County Zoning Regulations by adding

LNG terminals to the list of prohibited uses in

Chesapeake Bay Critical Areas.* (Am. Compl. Ex. 9

{hereinafter "Bill 9-07"].) The bill defines an LNG

facility in section 101 as

[a] natural gas facility located onshore or in state

waters that is used to receive, unload, load,

store, transport, gasify, regasify, liquefy, or

process natural gas that is imported to the

United States from a foreign country, exported

to a foreign country from the United States, or

transported in interstate commerce by a

waterborne vessel.

20a

Id. There is no dispute that the Zoning Amendment

would prevent AES from constructing an LNG facility

at the proposed Sparrows Point site, as the site is

located within Baltimore County's Chesapeake Bay

Critical Area.‘

AES and Mid-Atlantic Express filed suit in this Court

on February 6, 2007 seeking essentially the same

injunctive and declaratory relief as in AHS J. The

Plaintiffs moved for a temporary restraining order

("TRO") two days later to prevent the County from

halting the project pursuant to its authority under the

Coastal Facilities Review Act.° A _ hearing was

conducted on February 9, 2007, and this Court granted

the Plaintiffs' motion for a TRO at that time, enjoining

the County from certifying to the Maryland

Department of the Environment that the proposed

LNG facility would not meet local zoning regulations

and enjoining enforcement of Bill 9-07. (Paper No. 6.)

By Consent Order dated February 21, 2007, the TRO

was to remain in effect until this Court ruled on the

pending motions for summary judgment. (Paper No. 8.)

Meanwhile, on February 9, 2007, Baltimore County

submitted a request to Maryland's Critical Area

Commission for the Chesapeake and Atlantic Coastal

Bays ("Critical Area Commission" or "the Commission")

seeking to amend the County's Critical Area protection

program to include Bill 9-07's restriction on ILNG siting

in coastal areas. (See Carroll Aff. Ex A.) On May 2,

2007, a four-person panel recommended to _ the

Commission that Baltimore County's request to amend

its local Critical Area protection program should be

denied. (See Defs.' Status Report Att. 1 at 5 (Paper No.

21).) The panel cited concerns that the Zoning

Zla

Amendment was unenforceable because this Court had

enjoined it and because it had to be approved by the

National Oceanic and Atmospheric Administration

("NOAA"). Ud.) In response to the panel's report,

Baltimore County asked the Commission to "table

further action." (Pls.' Request for Hearing Att. 1 (Paper

No. 22).) |

The Plaintiffs filed a Motion for Summary Judgment on

February 26, 2007 (Paper No. 12) and an Amended

Complaint the following day (Paper No. 13). The

Defendants filed a Motion for Summary Judgment on

March 19, 2007. (Paper No. 16.) While this Court was

conducting a hearing on the cross-motions for summary

judgment on June 6, 2007, the Critical Area

Commission, having reopened its review of Baltimore

County's request, unanimously approved the adoption

of the Zoning Amendment in the County's Critical Area

protection plan. (See Defs.' Post-Hearing Mem. Ex. 1

(Paper No. 27).)

II. Legal Framework

A. Natural Gas Act

Under the Natural Gas Act ("NGA"), a party seeking to

construct a liquefied natural gas ("LNG") terminal must

first obtain authorization from the Federal Energy

Regulatory Commission ("FERC"). 15 U.S.C. § 717b(a)

(2007). FERC created an extensive pre-filing process in

which an applicant must submit all pertinent

information about the proposed site and building plans,

any state and local agencies with permitting authority,

the applicant's plans to receive input from the public,

and additional matters. 18 C.F.R. § 157.21 (2007).

22a

Applicants must also comply with the requirements of

the National Environmental Policy Act of 1969, 42

U.S.C. $§ 4821, et seg. (2007), by examining the impact

the facility would have on the environment. 15 U.S.C. §

717b-1(a) (2007). After the applicant completes the pre-

filing process and submits a formal application, FERC

consults with a designated state agency on state and

local safety issues, including "(1) the kind and use of the

facility; (2) the existing and projected population and

demographic characteristics of the location; (3) the

existing and proposed land use near the location; (4} the

natural and physical aspects of the location; (5) the

emergency response capabilities near the facility

location; and (6) the need to encourage remote siting."

Id. § 717b-1(b). It is undisputed that this process can

take a considerable period of time at substantial

monetary cost.

The NGA was amended in 2005 by the Energy Policy

Act of 2005, Pub. L. No. 109-58, § 311, 119 Stat. 594, 685

(2005). Congress added two provisions that are

particularly relevant to this case. The first provision

gives FERC "exclusive authority to approve or deny an

application for the siting, construction, expansion, or

operation of an LNG terminal." 15 U.S.C. § 717b(e)(1)

(2007). This provision was the focus of this Court's

earlier opinion in AKHS I. However, the second

provision specifically states that "nothing in [the NGA]

affects the rights of States under-- (1) the Coastal Zone

Management Act of 1972 (16 U.S.C. §§ 1451, et seq.); (2)

the Clean Air Act (42 U.S.C. §§ 4201, et seq.); or (3) the

Federal Water Pollution Control Act (83 U.S.C. 8§

1251, et seq.)." 15 U.S.C. § 717b(d) (2007). In its earlier

opinion in AES IJ, this Court noted the legislative

history of the 2005 amendments to the NGA and the

23a

testimony of the general counsel of FERC. 470 F. Supp.

2d at 597. That testimony and legislative history

directly addressed and noted the continuing state

authority over the siting of LNG terminals pursuant to

the Coastal Zone Management Act and the two other

environmental statutes. /d.

B. Coastal Zone Management Act

The Coastal Zone Management Act ("CZMA") was

enacted in 1972 to "preserve, protect, develop, and

where possible, to restore or enhance, the resources of

the Nation's coastal zone for this and succeeding

generations... ." 16 U.S.C. § 1452 (2007). It established

a long-standing policy insuring the involvement of local

and state officials in the protection of coastal areas.

States play an integral role in carrying out this

Congressional policy by adopting a coastal management

program "setting forth objectives, policies, and

standards to guide public and private uses of lands and

waters in the coastal zone." Jd. § 1453(12). The

programs must be submitted to the Secretary of

Commerce for approval, and states can receive federal

funding to implement their plans subject to certain

restrictions. Jd. §§ 1455-56b. After receiving the

Secretary of Commerce's approval, the states have

discretion to modify and amend their CZMA plans, as

enacted at the statewide and local level. Only formal

changes to the original, statutory CZMA plan must be

approved by the Secretary of Commerce. /d. § 1453(12).

C. Maryland's Coastal Management Program

Pursuant to its authority under the CZMA, Maryland

enacted a Coastal Management Program ("MCMP")

24a

which received approval from the Secretary of

Commerce in 1978. (See Defs.' Reply Ex. 1; Carroll Aff.

q 9.) The MCMP “is referred to as a ‘networked’

program, whereby several regulatory agencies and

Statutory enforcement mechanisms are linked to

provide a framework for making and implementing land

use decisions in the State's coastal zones." (Carroll Aff.

4 9.) Two such enforcement mechanisms are

particularly relevant to this lawsuit: the Coastal

Facilities Review Act, Md. Code Ann., Envir. $§ 14-501,

et seg. (LexisNexis 1996 & Supp. 2005), and the

Chesapeake and Atlantic Coastal Bays Critical Area

Protection Program, Md. Code Ann., Nat. Res. §& 8-

1801, et seg. (LexisNexis 2000 & Supp. 2005).

1. Coastal Facilities Review Act

Under the Coastal Facilities Review Act ("CFRA"), a

company must obtain a permit from the Maryland

Department of the Environment before constructing a

"facility" within the State's coastal areas. Md. Code

Ann., Envir. § 14-503(a) (LexisNexis 1996 & Supp.

2005). A "facility" includes "“[aJny pipeline carrying

crude oil or natural gas ashore from offshore sources" as

well as "[a]ny facility for the processing, transmission,

or storage of natural gas... ." Id. § 14-502(e). The

permitting process includes a lengthy application, and

the Department of the Environment designates a party

to research and write a statement regarding the

project's “economic, fiscal, and environmental impact."

Id. § 14-506(a)-(b). Local governments also play a role in

the orocess:

The anplication shall not be processed further

nor shall the analysis required be undertaken

25a

until the county government wherein the facility

is proposed tc be located or wherein the pipeline

will terminate has certified to the Department

fof the Environment] that all local land use

classifications, including zoning, special

exceptions, variances or conditional uses,

necessary for the location and operation of the

proposed facility have been or will be granted.

Id. § 14-506(c). A county can certify that the proposed

project will be approved or denied, or it can postpone

rendering a decision. COMAR 26.22.01.06(A) (2007).

The county's role is significant because "tif the county

notifies the State of its denial, then the application

process shall terminate," effectively preventing the

facility from being duilt. COMAR 26.22.01.06(C) (2007).

2. Critical Area Protection Program

The Chesapeake and Atiantic Coastal Bays Critical

Area Protection Program ("CAPP") was enacted to

curb the "harmful" effects of human activity on the

Chesapeake Bay and its tributaries by "minimizling]

damage to water quality and natural habitats." Md.

Code Ann., Nat. Res. § 8-1801 (l.exisNexis 2000 &

Supp. 2005). CAPP created the Critical Area

Commission for the Chesapeake and Atlantic Coasta!

Bays ("Critical Area Commission" or "the Commission")

within the Maryland Department of Natural Resources

to implement the program. /d. § 8-1803. Local

jurisdictions “have primary — responsibility for

developing and implementing a program, subject to

review by the Commission." Jd. § 8-1808(a). A local

Critical Area protection program must include

26a

those elements which are necessary or

appropriate: (1) To minimize adverse impacts on

water quality that result from pollutants that are

discharged from structures or conveyances or

that have run off from surrounding lands; (2) To

conserve fish, wildlife, and plant habitat; and (3)

To establish land use policies for development in

the Chesapeake Bay Critical Area or the

Atlantic Coastal Bays Critical Area which

accommodate growth and also address the fact

that, even if pollution is controlled, the number,

movement, and activities of persons in that area

can create adveyse environmental impacts.

Id. § 8-1808(b). Of particular relevance to this lawsuit, a

local jurisdiction's program should include "new or

amended provisions of the jurisdiction's . . . [zjoning

ordinances or regulations" in order to achieve those

three goals. Jd. § 8-1808(c).

STANDARD OF LAW

Summary judgment is appropriate under Rule 56(c) of

the Federal Rules of Civil Procedure when there is no

genuine issue as to any material fact, and the moving

party is plainly entitled to judgment in its favor as a

matter of law. Nat! City Bank of Indiana v.

Turnbaugh, 463 F.3d 325, 329 (4th Cir. 2006). In

Anderson v. Liberty Lobby, Inc., the Supreme Court

explained that, in considering a motion for summary

judgment, “the judge's function is not himself to weigh

the evidence and determine the truth of the matter but

to determine whether there is a genuine issue for trial."

A477 U.S. 242, 249, 10¢ S. Ct. 2505, 91 L. Ed. 2d 202

(1986). This Court has previously recognized that a case

27a

that presents a pure question of law as to federal

preemption should be resolved at the summary

judgment stage. Nat'l City Bank of Indiana v.

Turnbaugh, 367 F. Supp. 2d 805, 811 (D. Md. 2005),

affd, 463 F.3d 325, 329 (4th Cir. 2006); see also Retail

Indus. Leuders Ass'n v. Fielder, 435 F. Supp. 2d 481 (D.

Md. 2006), aff'd, 475 F.3d 180 (4th Cir. 2007).

Where, as here, both parties file motions for summary

judgment, the court applies the same standards of

review. Monumental Paving & Excavating, Inc. v.

Penn. Mfrs.' Ass'n Ins. Co., 176 F.3d 794, 797 (4th Cir.

1999) (citing 17CO Corp. v. Michelin Tire Corp., 722

F.2d 42, 45 n.8 (4th Cir. 19838) ("The court is not

permitted to resolve genuine issues of material fact on a

motion for summary judgment -- even where . . . both

parties have filed cross motions for summary

judgment.") (emphasis omitted), cert. denied, 469 U.S.

1215, 105 S. Ct. 1191, 84 L. Ed. 2d 337 (1985)). The role

of the court is to “rule on each party's motion on an

individual and separate basis, determining, in each case,

whether a judgment may be entered in accordance with

the Rule 56 standard." Towne Mgmt. Corp. v. Hartford

Acc. & Indem. Co., 627 F. Supp. 170, 172 (D. Md. 1985).

ANALYSIS

Plaintiffs AES Sparrows Point LNG, LLC and Mid-

Atlantic Express, LLC have moved for summary

judgment on the grounds that the Baltimore County

Zoning Amendment (1) is preempted by the Natural

Gas Act and (2) is unconstitutional on its face because it

violates the dormant Commerce Clause.® Defendants

James T. Smith, Jr., William J. Wiseman, IIT, and

Baltimore County have also moved for summary

28a

judgment, arguing that the Zoning Amendment was

enacted pursuant to the State's Coastal Zone

Management Act ("CZMA") plan and, therefore, falls

within the NGA's exception for states' rights under the

CZMA and two other environmental statutes.

I. Preemption

In AES I, this Court concluded that the first zoning

ordinance was preempted by the NGA under all three

theories of preemption: express, field, and conflict. AF'S

I, 470 F.. Supp. 2d at 596-600. Plaintiffs contend that the

Zoning Amendment at issue in this case is preempted

by the NGA under the same reasoning. However,

Defendants note that the NGA's exception reserves to

the states their authority under three federal

environmental statutes. Specifically, they argue that

the Zoning Amendment was enacted pursuant to

Maryland's CZMA _ plan--the Maryland Coastal

Management Program ("MCMP").

As discussed supra, one component of the MCMP is the

Critical Area Protection Program ("CAPP"). Local

governments have "primary responsibility” to

implement their own programs to carry out CAPP's

goals, subject to approval by the statewide Critical

Area Commission. Md. Code Ann., Nat. Res. § 8-1808(a)

(LexisNexis 2000 & Supp. 2005). Pursuant to this

delegated authority, Baltimore County enacted a "local

protection program" which includes a list of prohibited

uses in the County's Chesapeake Bay Critical Areas.

Baltimore County Zoning Regs. §§ 101, 105. The Zoning

Amendment at issue in this case adds the siting of LNG

terminals in Critical Areas to the list of prohibited uses

and was, therefore, clearly intended to be part of the

29a

County's local protection program. See Bill 9-07. Bill 9-

07 specifically defines a liquefied natural gas facility as

one "located onshore or in state waters" that receives

natural gas that is "imported" or "exported" or

"transported in interstate commerce by a waterborne

vessel." Id. (emphasis added). As noted above, on June

6, 2007, the Maryland Critical Area Commission

approved Bill 9-07 as an amendment to Baltimore

County's local protection plan. (See Defs.' Post-Hearing

Mem. Ex. 1.)

Plaintiffs contend that even with the Critical Area

Commission's approval, the Zoning Amendment is not

enforceable unless it is specifically approved by the

Secretary of Commerce.’ (Pls.' Mem. Supp. Summ. J.

13.) They argue that the CZMA requires that formal

amendments to a state's statutory coastal management

plan be approved by the Secretary and further argue

that any changes to the Maryland Coastal Management

Program would require formal federal approval. See 16

U.S.C. § 1455(e) (2007). However, approval by the

Critical Area Commission of Bill 9-07, or any other

amendment to a local protection plan, does not

constitute a change in the Maryland Coastal

Management Program, but rather the implementation

of it at the local level. Quite simply, there is no merit to

the suggestion that there must be formal federal

approval of each and every amendment to a local

protection plan.”

When the Maryland Coastal Management Program was

first approved in 1978, it expressly delegated authority

to the local jurisdictions to create and implement

individual] protection plans. See Md. Code Ann., Nat.

Res. § 8-1808(a) (LexisNexis 2000 & Supp. 2005). Thus,

30a

the Secretary of Commerce was fully aware that the

MCMP did not set forth all the details necessary to

implement a statewide plan under the CZMA. Rather,

the Secretary approved the plan with knowledge that

local governments in Maryland would have the

authority to create and amend individual plans with

oversight by the Critical Area Commission to ensure

that the local plans are consistent with statewide goals.

Baltimore County's local protection program, in

particular, has been amended several times since its

inception with the approval of the Critical Area

Commission. (See Carroll Aff. Ex. C.) Once approved by

the Commission, these amendments are enforceable at

the state and local levels; they "are not (and since 1978

have not) been submitted to the Department of

Commerce for approval." (Ud. { 10.) For practical

reasons as well, it would take a great deal of time for

NOAA to approve every minor amendment made to

local coastal protection plans around the country.

Congress could not have intended to place such a

burden on the agency. Thus, the Zoning Amendment at

issue does not need to be approved by NOAA in order

to become enforceable.

In its earlier opinion in AES J, this Court held that the

first zoning amendment was clearly preempted by the

Natural Gas Act, but specifically noted an exception

with respect to the states' delegated authority under

the Coastal Zone Management Act, the Clean Air Act,

and the Clean Water Act. See 470 F. Supp. 2d at 597

(citing 15 U.S.C. § 717b(d) (2007)). The Zoning

Amendment, as set forth in Bill 9-07, has been approved

by the Maryland Critical Area Commission to become

part of Baltimore County's local protection program

under the Critical Area Protection Program. This Court

sla

holds that this second zoning amendment is within the

delegated authority under the Coastal Zone

Management Act and is enforceable as part of the State

of Maryland's Coastal Management Program.

Therefore, unlike the first statute in AES J, the Zoning

Amendment, as set forth in Bill 9-07, is not preempted

by the Natural Gas Act.

II. Constitutional Challenge

Alternatively, Plaintiffs have moved for summary

judgment on the ground that the Zoning Amendment is

unconstitutional on its face because it violates the

dormant Commerce Clause of the United States

Constitution. As this Court noted in AES I, "[a] facial

challenge to a legislative Act is, of course, the most

difficult challenge to mount successfully, since the

challenger must establish that no set of circumstances

exists under which the Act would be valid." United

States v. Salerno, 481 U.S. 739, 745, 107 S. Ct. 2095, 95

L. Ed. 2d 697 (1987). In AES I, this Court held that the

previous zoning amendment was preempted by the

Natural Gas Act and that, therefore, there were no

circumstances under which the zoning amendment

could be constitutionally valid. 470 F. Supp. 2d at 601.

In light of the fact that the second zoning amendment is

not preempted by the Natural Gas Act, any facial

challenge to Bill 9-07 must satisfy the standard set

forth in the Salerno case. For the following reasons,

this Court finds that Bill 9-07 is constitutional on its

face.

The Commerce Clause provides that "Congress shall

have Power To... regulate Commerce with foreign

Nations, and among the several States, and with the

32a

Indian Tribes." U.S. Const. art. I, § 8, cl. 3. Although

the Commerce Clause expressly confers power on

Congress to regulate interstate and foreign commerce,

the "dormant" Commerce Clause implicitly restricts

states from placing an undue burden on interstate and

foreign commerce. See Beskind v. Easley, 325 F.3d 506,

514 (4th Cir. 2005). The Supreme Court recently

explained the test to be applied when a law is

challenged under the dormant Commerce Clause:

To determine whether a law violates this so-

called "dormant" aspect of the Commerce Clause,

we first ask whether it discriminates on its face

against interstate commerce. In this context,

"discrimination" simply means_ differential

treatment of in-state and out-of-state economic

interests that benefits the former and burdens

the latter. Discriminatory laws motivated by

"simple economic protectionism" are subject to a

"virtually per se rule of invalidity," which can

only be overcome by a showing that the State

has no other means to advance a legitimate local

purpose.

United Haulers Ass'n v. Oneida-Herkimer Solid Waste

Mgmt. Auth., 127 S. Ct. 1786, 1793, 167 L. Ed. 2d 655

(2007) (internal quotations and citations omitted); see

also Granholm v. Heald, 544 U.S. 460, 476, 125 S. Ct.

1885, 161 L. Ed. 2d 796 (2005). A nondiscriminatory law

can violate the dormant Commerce Clause as applied if

it “unduly burdens interstate commerce." GMC v.

Tracy, 519 U.S. 278, 287, 117 S. Ct. 811, 186 L. Ed. 2d

761 (1997). These principles also apply with respect to

foreign commerce, where the emphasis remains on

"federal uniformity" in "international relations and with

33a

respect to foreign intercourse and trade." See Wardair

Canada, Inc. v. Fla. Dep't of Revenue, 477 U.S. 1, 8, 106

S. Ct. 2369, 91 L. Ed. 2d 1 (1986) (holding that "state

regulation that is contrary to the constitutional

principle of ensuring that the conduct of individual

States does not work to the detriment of the Nation as

a whole, and thus ultimately to all of the States, may be

invalid under the unexercised Commerce Clause").

A. Discrimination Against Interstate & Foreign

Commerce

Bill 9-07 provides generally that LNG facilities are

prohibited in Chesapeake Bay Critical Areas. A

liquefied natural gas facility is defined as

[a] natural gas facility located onshore or in state

waters that is used to receive, unload, load,

store, transport, gasify, regasify, liquefy, or

process natural gas that is imported to the

United States from a foreign country, exported

to a foreign country from the United States, or

transported in interstate commerce by a

waterborne vessel.

Id. (emphasis added). Plaintiffs contend that the

prohibition on LNG facilities, as defined by the bill, is

discriminatory for two reasons. First, they argue that it

"singles out, for special, disfavored treatment, LNG

terminals that receive LNG in foreign commerce; that

export LNG in foreign commerce; or that receive and

store LNG that is transported in interstate commerce . .

. [yJet it places no restrictions whatsoever on LNG

terminals that operate solely intrastate." (Pls.' Mem.

Supp. Summ. J. 14-15 (emphasis in original).) Second, at

34a

the hearing held June 6, 2007, Plaintiffs’ counsel argued

that Bill 9-07 discriminates on its face by prohibiting

facilities that receive LNG transported by waterborne

vessel while permitting facilities that receive LNG via

pipeline or truck. Plaintiffs’ two arguments are

misplaced, because the Zoning Amendment neither

benefits in-state economic interests nor unduly burdens

out-of-state interests.

The purpose behind liquefying natural gas, in the

Plaintiffs‘ own words, is to "“facilitate[} the efficient

transportation of natural gas from world gas-producing

areas to consumers in the United States." (See Am.

Compl. § 9.) Although the Plaintiffs submitted some

evidence’ that at least one energy company in Maryland

liquefies and stores natural gas in a facility for use

during hours of peak demand, a practice known as

‘peak-shaving," Bill 9-O7 does not confer a "benefit" on

such facilities because they do not serve the same

function as LNG facilities like the one Plaintiffs intend

to build. In addition, as Defendants note, the peak-

shaving facility to which Plaintiffs refer is located in

Baltimore City and would not be affected by Baltimore

County Bill 9-07. (Defs.' Sur-Reply 1; Carroll Suppl.

Aff. 4 4, June 11, 2007.) The Supreme Court has held

that "any notion of discrimination assumes a comparison

of substantially similar entities.” GMC, 519 U.S. at 298

(upholding differential taxation of natural gas produced

by private and public utilities). The Court has also

"never deemed a hypothetical possibility of favoritism

to constitute discrimination that transgresses

constitutional commands." Assucialed Indus. v,

Lohman, 511 U.S. 641, 654, 1148. Ct. 1815, 128 L. Ed.

2d 639 (1994). In the absence of any actual intrastate

LNG facilities located in Baltimore County, there is no

35a

"comparison" to make for dormant Commerce Clause

purposes. Thus, under the Salerno standard, Bill 9-07

does not currently discriminate against any out-of-state

interests.

Prohibiting facilities that receive or ship LNG by

waterborne vessel likewise does not benefit any in-

state interests, because pipelines and trucks are often

used to transport LNG across state lines. Rather, the

prohibition on LNG facilities that import LNG by

waterborne vessel is consistent with and narrowly

tailored to the goals of Maryland's Critical Areas

Protection Program. That program may address the

risk of spillage into the Chesapeake Bay of liquefied

natural gas as well as the dangers of coastal

degradation.

Just as Bill 9-07 does not confer a benefit on any in-

state interests, it does not unduly burden out-of-state

interests. It only affects environmentally sensitive

coastal areas, designated as Critical Areas, in Baltimore

County. This Court, in its earlier opinion in AES I, held

that the Federal Energy Regulatory Commission has

exclusive authority over the siting of LNG terminals so

long as the siting does not conflict with laws enacted

pursuant to one of the three environmental statutes

specifically recognized by Congress. 470 F. Supp. 2d at

597. It is within the clear, appropriate exercise of its

authority that the State of Maryland and Baltimore

County may enact provisions within the context of

those environmental statutes. Any company, be it

foreign or domestic, may construct LNG facilities in

Maryland that import and export LNG across state

lines and internationally as long as the construction of

those facilities ts not in contravention of the

36a

environmental statutes which are clearly noted in the

2005 amendments to the Natural Gas Act.

Accordingly, this Court finds that Bill 9-07 does not

discriminate on its face in violation of the dormant

Commerce Clause, and the Plaintiffs have failed to

satisfy the Salerno standard for a facial challenge to the

Zoning Amendment.

B. Undue Burden on Interstate & Foreign

Commerce

Finally, this Court examines whether Bill 9-07 unduly

burdens interstate or foreign commerce, as applied.

"Where the statute regulates even-handedly to

effectuate a legitimate local public interest, and its

effects on interstate commerce are only incidental, it

will be upheld unless the burden imposed on such

commerce is clearly excessive in relation to the putative

local benefits." Pike v. Bruce Church, Inc., 397 U.S. 137,

142, 90 S. Ct. 844, 25 L. Ed. 2d 174 (1970); see also

Omega World Travel, Inc. v. Mummagraphics, Inc.,

469 F.3d 348, 356 (4th Cir. 2006).

Bill 9-07 has only a small effect on interstate and

foreign commerce. By restricting the locations where

an LNG terminal can be built, Bill 9-O7 does have some

impact on interstate and foreign transportation of LNG.

However, as discussed supra, the bill only prohibits the

siting of LNG terminals in a small percentage of coastal

land. LNG facilities can be built anywhere else in

Baltimore County besides Critical Areas. This Court

previously held in AES / that any efforts by the County

to exercise a prohibition on the construction of LNG

facilities are unenforceable as preempted by the

ova

Natural Gas Act, unless they are enacted pursuant to

the State's authority under the three environmental

statutes enumerated by Congress. See AES I, 470 F.

Supp. 2d at 597 (citing 15 U.S.C. § 717b(d)(2007)). Thus,

any burden that Bill 9-07 imposes on interstate and

foreign commerce with respect to the LNG industry is

minimal at most.

This minimal burden is also clearly outweighed by a

matter of local public interest: protection of the coastal

areas surrounding the Chesapeake Bay. By

incorporating the Zoning Amendment in Baltimore

County's local protection program, the Maryland

Critical Area Commission made a determination that

the bill would also assist in carrying out statewide goals

articulated in the Critical Areas Protection Program,

such as “minimiz[ing] adverse impacts on water quality

that result from pollutants that are discharged from

structures" near the Chesapeake Bay. Md. Code Ann.,

Nat. Res. § 8-1808 (LexisNexis 2000 & Supp. 2005).

Finally, protection of coastal areas is also a matter of

national concern. Congress expressly stated in the

Natural Gas Act that "nothing in [the NGA| affects the

rights of States under .. . the Coastal Zone

Management Act... ." 15 U.S.C. § 717b(d) (2007). This

indicates a national interest in protecting the integrity

of coastal areas. This interest, held at the local, state,

and national level, clearly outweighs the minimal

burden on interstate and foreign commerce.

Accordingly, this Court holds that Bill 9-07 does not

discriminate on its face or unduly burden interstate and

foreign commerce in violation of the dormant

Commerce Clause.

CONCLUSION

For the reasons stated above, the Plaintiffs' Motion for

Summary Judgment seeking declaratory and

permanent injunctive relief will be DENIED, and the

Defendants' Motion for Summary Judgment will be

GRANTED. A separate Order and Judgment follows.

Richard D. Bennett

United States District Judge

Date: June 22, 2007

ORDER AND JUDGMENT

In accordance with the foreguing Memorandum

Opinion, IT IS this 22nd day of June 2007, by the

United States District Court for the District of

Maryland, hereby ORDERED and ADJUDGED that:

Plaintiffs’ Motion for Summary Judgment

(Paper No. 12) is DENIED;

Defendants’ Motion for Summary Judgment

(Paper No. 16) is GRANTED;

Judgment IS ENTERED in favor of

Defendants James TI. Smith, Jr., William J.

Wiseman, III, and _ Baltimore County,

Maryland, and against Plaintiffs AES

Sparrows Point LNG, LLC and Mid-Atlantic

Express, LLC.; and

The Clerk is directed to transmit copies of

this Older and Judgment and the foregoing

Memorandum Opinion to counsel of record

and CLOSE THIS CASE

Richard D. Berne!

United States District Judge

Footnotes

'U.S. CONST. art. VI.

* The Federal Water Pollution Control Act is commonly

referred to as the Clean Water Act.

° As discussed in more detail infra, the Chesapeake and

Atlantic Coastal Bays Critical Area Protection

Program is one component of Maryland's Coastal Zone

Management Act plan. Local jurisdictions within the

State have the delegated authority to create individual

protection programs covering their Critical Areas,

subject to approval by a statewide Critical Area

Commission. Md. Code Ann., Nat. Res. § 8-1808(a)

(LexisNexis 2000 & Supp. 2005).

‘The Chesapeake Bay Critical Area includes the

“waters of and lands under the Chesapeake Bay and its

tributaries" and "[a}ll land and water areas within 1,000

feet beyond the landward boundaries of State

private wetlands. .. ." Md. Code Ann., Nat. Res.

1807(a) (LexisNexis 2000 & Supp. 2005).

As discussed in more detail infra, the Coastal Facilities

Review Act ("CFRA") requires that the county in

which a proposed facility would be located must certify

to the Maryland Department of the Environment that

the project would comply with local land use

regulations or else the ‘application process shall

terminate.” Md. Code Ann., Envir. § 14-507 (LexisNexis

40a

1996 & Supp. 2005); COMAR 26.22.01.06 (2007). Thus,

Baltimore County could halt the CF RA permit process

for AES by certifying that the proposed LNG facility

would not comply with the local zoning regulations, as

amended by Bill 9-07. Plaintiffs moved for a TRO in

order to prevent the County from exercising its

authority under CFRA « hile this lawsuit was still

pending.

®° The Commerce Clause provides "Congress shall have

Power To... regulate Commerce with foreign Nations,

and among the several States, and with the Indian

Tribes." U.S. Const. art. I, $ 8, cl. 3. Although the

Commerce Clause expressly confers power on Congress

to regulate interstate and foreign ccmmerce, the

“dormant” Commerce Clause implicitly restricts states

from placing an undue burden on interstate and foreign

commerce. See Beskind v. Easley, 325 F.3d 506, 514

(4th Cir. 2005).

* At the hearing held June 6, 2007 on the cross-motions

for summary judgment, Plaintiffs argued that tte

National Oceanic and Atmospheric Administration

("NOAA") would not approve Bill 9-07 as an

amendment to Maryland's CZMA _ plan. They

introduced, as part of Exhibit 1, a letter dated April 5,

2007 from Assistant Attorney General Robert Zarnoch

to the Honorable Joan Carter Conway, Chairman of the

Maryland Senate Education, Health and

Environmental Affairs Committee. (See Pls.' Ex. 1,

Motions Hearing, Wednesday, June 6, 2007.) In his

letter, Mr. Zarnoch advised the senator that a state bill

aiming to restrict the construction of LNG facilities in

Critical Areas would not be approved by NOAA. (/d.)

He cited a document prepared by NOAA in which the

4la

agency stated that some state CZMA policies that had

been approved would no longer be enforceable as to

LNG facilities because of the preemptive effect of the

amended Natural Gas Act. (/d.) As Defendants aptly

note, however, the information from NOAA is

inadmissible hearsay. (Defs.' Post-Hearing Mem. 2.) It

is well-established that hearsay evidence is "as

inadmissible in support of a summary judgment motion

as it would be at trial." Stanley Martin Cos., Inc. v.

Universal Forest Prods. Shoffner LLC, 396 F. Supp. 2d

606, 6138 (D. Md. 2005) (citing Md. Highways

Contractors Ass'n, Inc. v. Md., 933 F.2d 1246, 1251-52

(4th Cir. 1991)). Thus, the letter from Assistant

Attorney General Zarnoch quoting from a NOAA

document cannot defeat the Defendants' Motion for

Summary Judgment.

SIn 2005, the Maryland Department of Natural

Resources received approval from the National Oceanic

and Atmospheric Administration for routine program

changes to the Coastal Facilities Review Act portion of

the Maryland Coastal Management Program. (See

Defs.' Mem. Supp. Summ. J. Ex. 2.)

* In their correspondence to the Court following the

hearing on June 6, 2007, Plaintiffs submitted an excerpt

from Baltimore Gas and Electric Company's ("BG&E")

Form 10-K, filed with the U.S. Securities and Exchange

Commission. BG&E explained that it maintains a

"liquefied natural gas facility" to liquefy and store

natural gas for use during times of heavy energy usage

or emergencies. (See Pls.’ Correspondence

Supplementing Record Ex. 1 (Paper No. 26).) Plaintiffs

note that this facility is located in Baltimore City's

Critical Area. (/d. at 1.)

42a

Title 15 Commerce and Trade

CHAPTER 15B—NATURAL GAS

§ 717. Regulation of natural gas companies

(a) Necessity of regulation in public interest

As disclosed in reports of the Federal Trade

Commission made pursuant to S. Res. 83 (Seventieth

Congress, first session) and other reports made

pursuant to the authority of Congress, it is declared

that the business of transporting and selling natural gas

for ultimate distribution to the public is affected with a

public interest, and that Federal regulation in matters

relating to the transportation of natural gas and the

sale thereof in interstate and foreign commerce is

necessary in the public interest.

(b) Transactions to which provisions of chapter

applicable

The provisions of this chapter shall apply to the

transportation of natural gas in interstate commerce, to

the sale in interstate commerce of natural gas for resale

for ultimate public consumption for domestic,

commercial, industrial, or any other use, and to natural-

yas companies engaged in such transportation or sale,

and to the importation or exportation of natural gas in

foreign commerce and to persons engaged in such

importation or exportation, but shall not apply to any

other transportation or sale of natural gas or to the

local distribution of natural gas or to the facilities used

for such distribution or to the production or gathering

of natural gas.

chapter; certification from State commission as

conclusive evidence

43a

The provisions of this chapter shall not apply to any

person engaged in or legally authorized to engage in the

transportation in interstate commerce or the sale in

interstate commerce for resale, of natural gas received

by such person from another person within or at the

boundary of a State if all the natural gas so received is

ultimately consumed within such State, or to any

facilities used by such person for such transportation or

sale, provided that the rates and service of such person

and facilities be subject to regulation by a State

commission. The matters exempted from the provisions

of this chapter by this subsection are declared to be

matters primarily of local concern and subject to

regulation by the several States. A certification from

such State commission to the Federal Power

Commission that such State commission has regulatory

jurisdiction over rates and service of such person and

facilities and is exercising such jurisdiction shall

constitute conclusive evidence of such regulatory power

or jurisdiction.

(d) Vehicular natural gas jurisdiction

The provisions of this chapter shall not apply to any

person solely by reason of, or with respect to, any sale

or transportation of vehicular natural gas if such person

is—

(1) not otherwise a natural-gas company; or

(2) subject primarily to regulation by a State

commission, whether or not such State commission has,

or is exercising, jurisdiction over the sale, sale for

resale, or transportation of vehicular natural gas.

§ 717a. Definitions

When used in this chapter, unless the context otherwise

requires—

44a

(1) “Person” includes an individual or a corporation.

(2) “Corporation” includes any corporation, joint-stock

company, partnership, association, business trust,

organized group of persons, whether incorporated or

not, receiver or receivers, trustee or trustees of any of

the foregoing, but shall not include municipalities as

hereinafter defined.

(3) “Municipality” means a city, county, or other

political subdivision or agency of a State.

(4) “State” means a State admitted to the Union, the

District of Columbia, and any organized Territory of

the United States. :

(5) “Natural gas” means either natural gas unmixed, or

any mixture of natural and artificial gas.

(6) “Natura!-gas company” means a person engaged in

the transportation of natural gas in _ interstate

commerce, or the sale in interstate commerce of such

gas for resale.

(7) “Interstate commerce” means commerce between

any point in a State and any point outside thereof, or

between points within the same State but through any

place outside thereof, but only insofar as such

commerce takes place within the United States.

(8) “State commission” means the regulatory body of

the State or municipality having jurisdiction to regulate

rates and charges for the sale of natural gas to

consumers within the State or municipality.

(9) “Commission” and “Commissioner” means the

Federal Power Commission, and a member thereof,

respectively.

(10) “Vehicular natural gas” means natural gas that is

uitimatei as a fuel in a self-propelled vehicle.

(11) “IL.NG terminal” includes all natural gas facilities

located onshore or in State waters that are used to

receive, unload, load, store, transport, gasify, liquefy, or

45a

process natural gas that is imported to the United

States from a foreign country, exported to a foreign

country from the United States, or transported in

interstate commerce by waterborne vessel, but does

not include—

(A) waterborne vessels used to deliver natural gas to or

from any such facility; or

(B) any pipeline or storage facility subject to the

jurisdiction of the Commission under section 717f of this

title.

§ 717b. Exportation or importation of natural gas;

LNG terminals

(a) Mandatory authorization order

After six months from June 21, 1938, no person shall

export any natural gas from the United States to a

foreign country or import any natural gas from a

foreign country without first having secured an order of

the Commission authorizing it to do so. The

Commission shall issue such order upon application,

unless, after opportunity for hearing, it finds that the

proposed exportation or importation will not be

consistent with the public interest. The Commission

may by its order grant such application, in whole or in

part, with such modification and upon such terms and

conditions as the Commission may find necessary or

appropriate, and may from time to time, after

opportunity for hearing, and for good cause shown,

make such supplemental order in the premises as it

may find necessary or appropriate.

(b) Free trade agreements

With respect to natural gas which is imported into the

United States from a nation with which there is in

effect a free trade agreement requiring national

46a

treatment for trade in natural gas, and with respect to

liquefied natural gas—

(1) the importation of such natural gas shall be treated

as a “first sale” within the meaning of section 3301 (21)

of this title; and

(2) the Commission shall not, on the basis of national

origin, treat any such imported natural gas on an

unjust, unreasonable, unduly discriminatory, or

preferential basis.

For purposes of subsection (a) of this section, the

importation of the natural gas referred to in subsection

(b) of this section, or the exportation of natural gas to a

nation with which there is in effect a free trade

agreement requiring national treatment for trade in

natural gas, shall be deemed to be consistent with the

public interest, and applications for such importation or

exportation shall be granted without modification or

delay.

(d) Construction with other laws

Except as specifically provided in this chapter, nothing

in this chapter affects the rights of States under—

(1) the Coastal Zone Management Act of 1972 (16

J.S.C. 1451 et seq.);

(2) the Clean Air Act (42 U.S.C. 7401 et seq.); or

(3) the Federal Water Pollution Control Act (33 U.S.C.

1251 et seq.).

(1) The Commission shall have the exclusive authority

to approve or deny an application for the siting,

eonstruction, expansion, or operation of an LNG

terminal. Except as specifically provided in this

chapter, nothing in this chapter is intended to affect

otherwise applicable law related to any Federal

47a

agency’s authorities or responsibilities related to LNG

terminals.

(2) Upon the filing of any application to site, construct,

expand, or operate an LNG terminal, the Commission

shall—

(A) set the matter for hearing;

(B) give reasonable notice of the hearing to all

interested persons, including the State commission of

the State in which the LNG terminal is located and, if

not the same, the Governor-appointed State agency

described in section 717b-1 of this title;

subsection; and

(D) issue or deny the appropriate order accordingly.

(3)

(A) Except as provided in subparagraph (B), the

Commission may approve an application described in

paragraph (2), in whole or part, with such modifications

and upon such terms and conditions as the Commission

find “ necessary or appropriate.

(B) Before January 1, 2015, the Commission shall not—

(i) deny an application solely on the basis that the

applicant proposes to use the LNG terminal exclusively

or partially for gas that the applicant or an affiliate of

the applicant will supply to the facility; or

(11) condition an order on—

(1) a requirement that the LNG terminal offer service

to customers other than the applicant, or any affiliate of

the applicant, securing the order;

(II) any regulation of the rates, charges, terms, or

conditions of service of the LNG terminal; or

({Il) a requirement to file with the Commission

schedules or contracts related to the rates, charges,

terms, or conditions of service of the LNG terminal.

48a

January 1, 2030.

(4) An order issued for an LNG terminal that also offers

service to customers on an open access basis shall not

result in subsidization of expansion capacity by existing

customers, degradation of service to existing

customers, or undue discrimination against existing

customers as to their terms or conditions of service at

the facility, as all of those terms are defined by the

Commission.

(f) Military installations

(1) In this subsection, the term “military installation”’—

(A) means a base, camp, post, range, station, yard,

center, or homeport facility for any ship or other

activity under the jurisdiction of the Department of

Defense, including any leased facility, that is located

within a State, the District of Columbia, or any

territory of the United States; and

(B) does not include any facility used primarily for civil

works, rivers and harbors projects, or flood control

projects, as determined by the Secretary of Defense.

(2) The Commission shall enter into a memorandum of

understanding with the Secretary of Defense for the

purpose of ensuring that the Commission coordinate

and consult“! with the Secretary of Defense on the

siting, construction, expansion, or operation of liquefied

natural gas facilities that may affect an active military

installation.

(3) The Commission shall obtain the concurrence of the

Secretary of Defense before authorizing the siting,

construction, expansion, or operation of liquefied

natural gas facilities affecting the training or activities

of an active military installation.

49a

[FN1]So in original. Probably should be “finds”.

[FN2]So in original. Probably should be “coordinates

and consults”.

[F.N3} So in original. Probably should be “coordinates

and consults”.

§ 717b-1. State and local safety considerations

(a) Promulgation of regulations [FN 1]

The Commission shall promulgate regulations on the

National Environmental Policy Act of 1969 (42 U.S.C.

4321 et seq.) pre-filing process within 60 days after

August 8, 2005. An applicant shall comply with pre-

filing process required under’ the National

Environmental Policy Act of 1969 prior to filing an

application with the Commission. The regulations shall

require that the pre-filing process commence at least 6

months prior to the filing of an application for

authorization to construct an LNG terminal and

encourage applicants to cooperate with State and local

officials.

(b) State consultation [FN 1)

The Governor of a State in which an LNG terminal is

proposed to be located shall designate the appropriate

State agency for the purposes of consulting with the

Commission regarding an application under section

717b of this title. The Commission shall consult with

such State agency regarding State and local safety

considerations prior to issuing an order pursuant to

section 7i7b of this title. For the purposes of this

section, State and local safety considerations include—

(1) the kind and use of the facility;

50a

(2) the existing and projected population and

demographic characteristics of the location;

(3) the existing and proposed land use near the location;

(4) the natural and physical aspects of the location;

(5) the emergency response capabilities near the facility

location; and

(6) the need to encourage remote siting.

The State agency may furnish an advisory report on

State and local safety considerations to the Commission

with respect to an application no later than 30 days

after the application was filed with the Commission.

Before issuing an order authorizing an applicant to site,

construct, expand, or operate an LNG terminal, the

Commission shall review and respond specifically to the

issues raised by the State agency described in

subsection (b) of this section in the advisory report.

This subsection shall apply to any application filed after

August 8, 2005. A State agency has 30 days after

August 8, 2005 to file an advisory report related to any

applications pending at the Commission as of August 8,

2005.

(d) Inspections [FN 1]

The State commission of the State in which an LNG

terminal is located may, after the terminal is

operational, conduct safety inspections in conformance

with Federal regulations and guidelines with respect to

the LNG terminal upon written notice to the

Commission. The State commission may notify the

Commission of any alleged safety vioiations. The

Commission shall transmit information regarding such

allegations to the appropriate Federal agency, which

shall take appropriate action and notify the State

commission.

(e) Emergency Response Plan [FN 1]

ola

(1) In any order authorizing an LNG terminal the

Commission shall require the LNG terminal operator to

develop an Emergency Response Plan. The Emergency

Response Plan shall be prepared in consultation with

the United States Coast Guard and State and local

agencies and be approved by the Commission prior to

any final approval to begin construction. The Plan shall

include a cost-sharing plan.

(2) A cost-sharing plan developed under paragraph (1)

shall include a description of any direct cost

reimbursements that the applicant agrees to provide to

any State and local agencies with responsibility for

security and safety—

(A) at the LNG terminal; and

(B) in proximity to vessels that serve the facility.

[FN 1] Editorially supplied

§ 717c. Rates and charges

(a) Just and reasonable rates and charges

All rates and charges made, demanded, or received by

any natural-gas company for or in connection with the

transportation or sale of natural gas subject to the

jurisdiction of the Commission, and all rules and

regulations affecting or pertaining to such rates or

charges, shall be just and reasonable, and any such rate

or charge that is not just and reasonable is declared to

be unlawful.

(b) Undue preferences and unreasonable rates and

charges prohibited

No natural-gas company shall, with respect to any

transportation or sale of natural gas subject to the

jurisdiction of the Commission,

52a

(1) make or grant any undue preference or advantage to

any person or subject any person to any undve

prejudice or disadvantage, or

(2) maintain any unreasonable difference in rates,

charges, service, facilities, or in any other respect,

either as between localities or as between classes of

service.

public inspection of schedules

Under such rules and regulations as the Commission

may prescribe, every natural-gas company shall file

with the Commission, within such time (not less than

sixty days from June 21, 1938) and in such form as the

Commission may designate, and shall keep open in

convenient form and place for public inspection,

schedules showing all rates and charges for any

transportation or sale subject to the jurisdiction of the

Commission, and the classifications, practices, and

regulations affecting such rates and charges, together

with all contracts which in any manner affect or relate

to such rates, charges, classifications, and services.

i itle 16 Conservation

CHAPTER 33—COASTAL ZONE MANAGEMENT

§ 1451. Congressional findings

The Congress finds that—

(a) There is a national interest in the effective

management, beneficial use, protection, and

development of the coastal zone.

(b) The coastal zone is rich in a variety of natural,

commercial, recreational, ecological, industrial, and

53a

esthetic resources of immediate and potential value to

the present and future well-being of the Nation.

lands and waters of our coastal zone occasioned by

population erowth and economic development,

including requirements for industry, commerce,

residential development, recreation, extraction of

mineral resources and fossil fuels, transportation and

navigation, waste disposal, and harvesting of fish,

shellfish, and other living marine resources, have

resulted in the loss of living marine resources, wildlife,

nutrient-rich areas, permanent and adverse changes to

ecological systems, decreasing open space for public

use, and shoreline erosion.

(d) The habitat areas of the coastal zone, and the fish,

Shellfish, other living marine resources, and wildlife

therein, are ecologically fragile and consequently

extremely vulnerable to destruction by man’s

alterations.

(e) Important ecological, cultural, historic, and esthetic

values in the coastal zone which are essential to the

well-being of all citizens are being irretrievably

damaged or lost.

(f) New and expanding demands for food, energy,

minerals, defense needs, recreation, waste disposal,

transportation, and industrial activities in the Great

Lakes, territorial sea, exclusive economic zone, and

Outer Continental Shelf are placing stress on these

areas and are creating the need for resolution of serious

conflicts among important and competing uses and

values in coastal and ocean waters; [FN 1]

(¢) Special natural and scenic characteristics are being

damaged by ill-planned development that threatens

these values.

(hb) In light of competing demands and the urgent need

tov protect and to give high priority to natural systems

in the coastal zone, present state and local institutional

arrangements for planning and regulating land and

water uses in such areas are inadequate.

(i) The key to more effective protection and use of the

land and water resources of the coastal zone is to

encourage the states to exercise their full authority

over the lands and waters in the coastal zone by

assisting the states, in cooperation with Federal and

local governments and other vitally affected interests,

in developing land and water use programs for the

coastal zone, including unified policies, criteria,

standards, methods, and processes for dealing with land

and water use decisions of more than local significance.

(j) The national objective of attaining a greater degree

of energy self-sufficiency would be advanced by

providing Federal financial assistance to meet state and

local needs resulting from new or expanded energy

activity in or affecting the coastal zone.

(k) Land uses in the coastal zone, and the uses of

adjacent lands which drain into the coastal zone, may

significantly affect the quality of coastal waters and

habitats, and efforts to control coastal water pollution

from land use activities must be improved.

(1) Because global warming may result in a substantial

sea level rise with serious adverse effects in the coastal

zone, coastal states must anticipate and plan for such an

occurrence.

(m) Because of their proximity to and reliance upon the

ocean and its resources, the coastal states have

substantial and significant interests in the protection,

management, and development of the resources of the

exclusive economic zone that can only be served by the

active participation of coastal states in all Federal

55a

programs affecting such resources and, wherever

appropriate, by the development of state ocean

resource plans as part of their federally approved

coastal zone management programs.

[FN 1] So in original. Probably should be a period.

§ 1452. Congressional declaration of policy

The Congress finds and declares that it is the national

policy—

(1) to preserve, protect, develop, and where possible, to

restore or enhance, the resources of the Nation’s

coastal zone for this and succeeding generations;

(2) to encourage and assist the states to exercise

effectively their responsibilities in the coastal zone

through the development and implementation of

management programs to achieve wise use of the land

and water resources of the coastal zone, giving full

consideration to ecological, cultural, historic, and

esthetic values as well as the needs for compatible

economic development, which programs should at least

provide for—

(A) the protection of natural resources, including

wetlands, flood plains, estuaries, beaches, dunes,

barrier islands, coral reefs, and fish and wildlife and

their habitat, within the coastal zone,

(B) the management of coastal development to

minimize the loss of life and property caused by

improper development in flood-prone, storm surge,

geological hazard, and erosion-prone areas and in areas

hkely to be affected by or vulnerable to sea level rise,

land subsidence, and saltwater intrusion, and by the

o6a

destruction of natural protective features such as

beaches, dunes, wetlands, and barrier islands,

safeguard, and restore the quality of coastal waters,

and to protect natural resources and existing uses of

those waters,

(D) priority consideration being given to coastal-

dependent uses and orderly processes for siting major

facilities related to national defense, energy, fisheries

development, recreation, ports and transportation, and

the location, to the maximum extent practicable, of new

commercial and industrial developments in or adjacent

to areas where such development already exists,

(E) public access to the coasts for recreation purposes,

(F) assistance in the redevelopment of deteriorating

urban waterfronts and_ ports, and _— sensitive

preservation and restoration of historic, cultural, and

esthetic coastal] features,

(G) the coordination and simplification of procedures in

order to ensure expedited governmental

decisionmaking for the management of coastal

resources,

(H) continued consultation and coordination with, and

the giving of adequate consideration to the views of,

affected Federal agencies,

(I) the giving of timely and effective notification of, and

opportunities for public and local government

participation in, coastal management decisionmaking,

(J) assistance to support comprehensive planning,

conservation, and management for living marine

resources, including planning for the siting of pollution

control and aquaculture facilities within the coastal

zone, and improved coordination between State and

Federal coastal zone management agencies and State

and wildlife agencies, and

57a

(K) the study and development, in any case in which the

Secretary considers it to be appropriate, of plans for

addressing the adverse effects upon the coastal zone of

land subsidence and of sea level rise; and

(3) to encourage the preparation of special area

management plans which provide for increased

specificity in protecting significant natural resources,

reasonable coastal-dependent economic growth,

improved protection of life and property in hazardous

areas, including those areas likely to be affected by land

subsidence, sea level rise, or fluctuating water levels of

the Great Lakes, and improved predictability in

governmental decisionmaking;

(4) to encourage the participation and cooperation of

the public, state and local governments, and interstate

and other regional agencies, as well as of the Federal

agencies having programs affecting the coastal zone, in

carrying out the purposes of this chapter;

(5) to encourage coordination and cooperation with and

among the appropriate Federal, State, and _ local

agencies, and international organizations where

appropriate, in collection, analysis, synthesis, and

dissemination of coastal management information,

research results, and technical assistance, to support

State and Federal regulation of land use practices

affecting the coastal and ocean resources of the United

States; and

(6) to respond to changing circumstances affecting the

coastal environment and coastal resource management

by encouraging States to consider such issues as ocean

uses potentially affecting the coastal zone.

§ 1453. Definitions

For purposes of this chapter—

58a

(1) The term “coastal zone” means the coastal waters

(including the lands therein and thereunder) and the

adjacent shorelands (including the waters therein and

thereunder), strongly influenced by each other and in

proximity to the shorelines of the several coastal states,

and includes islands, transitional and intertidal areas,

salt marshes, wetlands, and beaches. The zone extends,

in Great Lakes waters, to the international boundary

between the United States and Canada and, in other

areas, seaward to the outer limit of State title and

ownership under the Submerged Lands Act (48 U.S.C.

1301 et seq.), the Act of March 2, 1917 (48 U.S.C. 749)

[48 U.S.C. 731 et seq.j, the Covenant to Establish a

Commonwealth of the Northern Mariana Islands in

Political Union with the United States of America, as

approved by the Act of March 24, 1976 (48 U.S.C. 1801

et seq.], or section 1 of the Act of November 20, 1963

(48 U.S.C. 1705), as applicable. The zone extends inland

from the shorelines only to the extent necessary to

control shorelands, the uses of which have a direct and

significant impact on the coastal waters, and to control

those geographical areas which are likely to be affected

by or vulnerable to sea level rise. Excluded from the

coastal zone are lands the use of which is by law subject

solely to the discretion of or which is held in trust by

the Federal Government, its officers or agents.

(2) The term “coastal resource of national significance”

means any coastal wetland, beach, dune, barrier island,

reef, estuary, or fish and wildlife habitat, if any such

area is determined by a coastal state to be of

substantial biological or natural storm protective value.

(3) The term “coastal waters” means

(A) in the Great Lakes area, the waters within the

territorial jurisdiction of the United States consisting of

the Great Lakes, their connecting waters, harbors,

o9a

roadsteads, and estuary-type areas such as bays,

shallows, and marshes and

(B) in other areas, those waters, adjacent to the

shorelines, which contain a measurable quantity or

percentage of sea water, including, but not limited to,

sounds, bays, lagoons, bayous, ponds, and estuaries.

(4) The term “coastal state” means a state of the United

States in, or bordering on, the Atlantic, Pacific, or

Arctic Ocean, the Gulf of Mexico, Long Island Sound, or

one or more of the Great Lakes. For the purposes of

this chapter, the term also includes Puerto Rico, the

Virgin Islands, Guam, the Commonwealth of the

Northern Mariana Islands, and the Trust Territories of

the Pacific Islands, and American Samoa.

(5) The term “coastal energy activity” means any of the

following activities if, and to the extent that

(A) the conduct, support, or facilitation of such activity

requires and involves the siting, construction,

expansion, or operation of any equipment or facility;

and

(B) any technical requirement exists which, in the

determination of the Secretary, necessitates that the

siting, construction, expansion, or operation of such

equipment o; facility be carried out in, or in close

proximity to, the coastal zone of any coastal state;

(i) Any outer Continental Shelf energy activity.

(ii) Any transportation, conversion, treatment, transfer,

or storage of liquefied natural gas.

Gil) Any transportation, transfer, or storage of oil,

natural gas, or coal (including, but not limited to, by

means of any deepwater port, as defined in section 1502

(10) of title 33).

For purposes of this paragraph, the siting, construction,

expansion, or operation of any equipment or facility

shall be “in close proximity to” the coastal zone of any

60a

coastal state if such siting, construction, expansion, or

operation has, or is likely to have, a significant effect on

such coastal zone.

(6) The term “energy facilities” means any equipment

or facility which is or will be used primarily—

(A) in the exploration for, or the development,

production, conversion, storage, transfer, processing, or

transportation of, any energy resource; or

(B) for the manufacture, production, or assembly of

equipment, machinery, products, or devices which are

involved in any activity described in subparagraph (A).

The term includes, but is not limited to (i) electric

generating plants; (ii) petroleum refineries and

associated facilities; (iii) gasification plants; (iv) facilities

used for the transportation, conversion, treatment,

transfer, or storage of liquefied natural gas; (v) uranium

enrichment or nuclear fuel processing facilities; (vi) oil

and gas facilities, including platforms, assembly plants,

storage depots, tank farms, crew and supply bases, and

refining complexes; (vii) facilities including deepwater

ports, for the transfer of petroleum; (viii) pipelines and

transmission facilities; and (ix) terminals which are

associated with any of the foregoing.

(6a) The term “enforceable policy” means State policies

which are legally binding through constitutional

ordinances, or judicial or administrative decisions, by

which a State exerts control over private and public

land and water uses and natural resources in the coastal

zone.

(7) The term “estuary” means that part of a river or

stream or other body of water having unimpaired

connection with the open sea, where the sea water is

measurably diluted with fresh water derived from land

bla

drainage. The term includes estuary-type areas of the

Great Lakes.

(8) The term “estuarine sanctuary” means a research

area which may include any part or all of an estuary and

any island, transitional area, and upland in, adjoining,

or adjacent to such estuary, and which constitutes to

the extent feasible a natural unit, set aside to provide

scientists and students the opportunity to examine over

a period of time the ecological relationships within the

area.

(9) The term “Fund” means the Coastal Zone

Management Fund established under section 1456a (b)

of this title.

(10) The term “land use” means activities which are

conducted in, or on the shorelands within, the coastal

zone, subject to the requirements outlined in section

1456 (g) of this title.

(11) The term “locai government” means any political

subdivision of, or any special entity created by, any

coastal state which (in whole or part) is located in. or

has authority over, such state’s coastal zone and which

(A) has authority to levy taxes, or to establish and

collect user fees, or

(RB) provides any public facility or public service which

is financed in whole or part by taxes or user fees. The

term includes, but is not limited to, any school district,

fire district, transportation authority, and any other

special purpose district or authority.

(12) The term “management program” includes, but is

not limited to, a comprehensive statement in words,

maps, illustrations, or other media of communication,

prepared and adopted by the state in accordance with

the provisions of this chapter, setting forth objectives,

policies, and standards to guide public and private uses

of lands and waters in the coastal zone

62a

(13) The term “outer Continental Shelf energy activity”

means any exploration for, or any development or

production of, oil or natural gas from the outer

Continental Shelf (as defined in section 1331 (a) of title

43) or the siting, construction, expansion, or operation

of any new or expanded energy facilities directly

required by such exploration, development, or

production.

(14) The term “person” means any individual; any

corporation, partnership, association, or other entity

organized or existing under the laws of any state; the

Federal Government; any state, regional, or local

government; or any entity of any such Federal, state,

regional, or local government.

(15) The term “public facilities and public services”

means facilities or services which are financed, in whole

or in part, by any state or political subdivision thereof,

including, but not limited to, highways and secondary

roads, parking, mass transit, docks, navigation aids, fire

and police protection, water supply, waste collection

and treatment (including drainage), schools and

education, and hospitals and health care. Such term

may also include any other facility or service so

financed which the Secretary finds will support

increased population

(16) The term “Secretary

means the secretary Ol

Commerce

(17) The term “special area management plan” means a

comprehensive plan providing for natural resource

protection and reasonable coastal dependent economic

growth containing a detailed and comprehensive

statement of policies; standards and criteria to guide

public and private uses of lands and waters; and

mechanisms for timely implementation in_ specific

yeoyraphic areas within the coastal zone

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(18) The term “water use” means a use, activity, or

project conducted in or on waters within the coastal

zone.

§ 1454. Submittal of State program for approval

Any coastal state which has completed the development

of its management program shall submit such program

to the Secretary for review and approval pursuant to

section 1455 of this title.

§ 1455. Administrative grants

(a) Authorization; matching funds

The Secretary may make grants to any coastal state for

the purpose of administering that State’s management

program, if the State matches any such grant according

to the following ratios of F’ederal-to-State contributions

for the applicable fiscal year:

(1) For those States for which programs were approved

prior to November 5, 1990, 1 to 1 for any fiscal year.

(2) For programs approved after November 5, 1990, 4

to 1 for the first fiscal year, 2.3 to 1 for the second fiscal

year, 1.5 to 1 for the third fiscal year, and 1 to 1 for each

fiscal year thereafter.

(b) Grants to coastal states; requirements

The Secretary may make a grant to a coastal state

under subsection (a) of this section only if the Secretary

finds that the management program of the coastal state

meets all applicable requirements of this chapter and

has been approved in accordance with subsection (d) of

this section.

Grants under this section shall be allocated to coastal

States with approved programs based on rules and

64a

regulations promulgated by the Secretary which shall

take into account the extent and nature of the shoreline

and area covered by the program, population of the

area, and other relevant factors. The Secretary shall

establish, after consulting with the coastal states,

maximum and minimum grants for any fiscal year to

promote equity between coastal states and effective

coastal management.

(d) Mandatory adoption of State management

program for coastal zone

Before approving a management program submitted by

a coastal state, the Secretary shall find the following:

(1) The State has developed and adopted a management

program for its coastal zone in accordance with rules

and regulations promulgated by the Secretary, after

notice, and with the opportunity of full participation by

relevant Federal agencies, State agencies, local

governments, regional organizations, port authorities,

and other interested partie and individuals, public and

private, which is adequate to carry out the purposes of

this chapter and is consistent with the policy declared

in section 1452 of this title.

(2) The management program includes each of the

following required program elements:

(A) An identification of the boundaries of the coastal

zone subject to the management program.

(B) A definition of what shall constitute permissible

land uses and water uses within the coastal zone which

have a direct and significant impact on the coastal

waters.

concern within the coastal zone.

(D) An identification of the means by which the State

proposes to exert control over the land uses and water

uses referred to in subparagraph (B), including a list of

65a

relevant State constitutional provisions, laws,

regulations, and judicial decisions.

(E) Broad guidelines on priorities of uses in particular

areas, including specifically those uses of lowest

priority.

(F) A description of the organizational structure

proposed to implement such management program,

including the responsibilities and interrelationships of

local, areawide, State, regional, and interstate agencies

in the management process.

(G) A definition of the term “beach” and a planning

process for the protection of, and access to, public

beaches and other’ public coastal areas of

environmental, recreational, historical, esthetic,

ecological, or cultural value.

(H) A planning process for energy facilities likely to be

located in, or which may significantly affect, the coastal

zone, including a process for anticipating the

management of the impacts resulting from such

facilities.

(I) A planning process for assessing the effects of, and

studying and evaluating ways to control, or lessen the

impact of, shoreline erosion, and to restore areas

adversely affected by such erosion.

(3) The State has—

(A) coordinated its program with local, areawide, and

interstate plans applicable to areas within the coastal

zone—

(i) existing on January 1 of the year in which the State’s

management program is submitted to the Secretary;

and

(ii) which have been developed by a local government,

an areawide agency, a regional agency, or an interstate

agency; and

66a

(B) established an effective mechanism for continuing

consultation and coordination between the management

agency designated pursuant to paragraph (6) and with

local governments, interstate agencies, regional

agencies, and areawide agencies within the coastal zone

to assure the full participation of those local

governments and agencies in carrying out the purposes

of this chapter; except that the Secretary shall not find

any mechanism to be effective for purposes of this

subparagraph unless it requires that—

(i) the management agency, before implementing any

management program decision which would conflict

with any local zoning ordinance, decision, or other

action, shall send a notice of the management program

decision to any local government whose zoning

authority is affected;

(ii) within the 30-day period commencing on the date of

receipt of that notice, the local government may submit

to the management agency written comments on the

management program decision, and any

recommendation for alternatives; and

Gili) the management agency, if any comments are

submitted to it within the 30-day period by any local

government—

(I) shall consider the comments;

(II) may, in its discretion, hold a public hearing on the

comments; and

(111) may not take any action within the 30-day period

to implement the management program decision.

(4) The State has held public hearings in the

development of the management program.

(5) The management program and any changes thereto

have been reviewed and approved by the Governor of

the State.

67a

(6) The Governor of the State has designated a single

State agency to receive and administer grants for

implementing the management program.

(7) The State is organized to implement the

management program.

(8) The management program provides for adequate

consideration of the national interest involved in

planning for, and managing the coastal zone, including

the siting of facilities such as energy facilities which are

of greater than local significance. In the case of energy

facilities, the Secretary shall find that the State has

given consideration to any applicable national or

interstate energy plan or program.

(9) The management program includes procedures

whereby specific areas may be designated for the

purpose of preserving or restoring them for their

conservation, recreational, ecological, historical, or

esthetic values.

(_0) The State, acting through its chosen agency or

agencies (including local governments, areawide

agencies, regional agencies, or interstate agencies) has

authority for the management of the coastal zone in

accordance with the management program. Such

authority shall include power—

(A) to administer land use and water use regulations to

control development “ to ensure compliance with the

management program, and to resolve conflicts among

competing uses; and

(B) to acquire fee simple and less than fee simple

interests in land, waters, and other property through

condemnation or other means when necessary to

achieve conformance with the management program.

(11) The management program provides for any one or

a combination of the following general techniques for

68a

control of land uses and water uses within the coastal

zone:

(A) State establishment of criteria and standards for

local implementation, subject to administrative review

and enforcement.

(B) Direct State land and water use planning and

regulation.

the management program of all development plans,

projects, or land and water use regulations, including

exceptions and variances thereto, proposed by any

State or local authority or private developer, with

power to approve or disapprove after public notice and

an opportunity for hearings.

(12) The management program contains a method of

assuring that local land use and water use regulations

within the coastal zone do not unreasonably restrict or

exclude land uses and water uses of regional benefit.

(13) The management program provides for—

(A) the inventory and designation of areas that contain

one or more coastal resources of national significance;

and

(B) specific and enforceable standards to protect such

resources.

(14) The management program provides for public

participation in permitting processes, consistency

determinations, and other similar decisions.

(15) The management program provides a mechanism

to ensure that all State agencies will adhere to the

program.

(16) The management program contains enforceable

policies and mechanisms to implement the applicable

requirements of the Coastal Nonpoint Pollution Control

Program of the State required by section 1455b of this

title

69a

(e) Amendment or modification of State management

program for coastal zone

A coastal state may amend or modify a management

program which it has submitted and which has been

approved by the Secretary under this section, subject

to the following conditions:

(1) The State shall promptly notify the Secretary of any

proposed amendment, modification, or other program

change and submit it for the Secretary’s approval. The

Secretary may suspend all or part of any grant made

under this section pending State submission of the

proposed amendments, modification, or other program

change.

(2) Within 30 days after the date the Secretary receives

any proposed amendment, the Secretary shall notify

the State whether the Secretary approves. or

disapproves the amendment, or whether the Secretary

finds it is necessary to extend the review of the

proposed amendment for a period not to exceed 120

days after the date the Secretary received the proposed

amendment. The Secretary may extend this period only

as necessary to meet the requirements of the National

Environmental Policy Act of 1969 (42 U.S.C. 4321 et

seq.). If the Secretary does not notify the coastal state

that the Secretary approves or disapproves the

amendment within that period, then the amendment

shall be conclusively presumed as approved.

(3)

(A) Except as provided in subparagraph (B), a coastal

state may not implement any amendment, modification,

or other change as part of its approved management

program unless the amendment, modification, or other

change is approved by the Secretary under this

subsection.

70a

(B) The Secretary, after determining on a preliminary

basis, that an amendment, modification, or other change

which has been submitted for approval under this

subsection is likely to meet the program approval

standards in this section, may permit the State to

expend funds awarded under this section to begin

implementing the proposed amendment, modification,

or change. This preliminary approval shall not extend

for more than 6 months and may not be renewed. A

proposed amendment, modification, or change which

has been given preliminary approval and is not finally

approved under this paragraph shall not be considered

an enforceable policy for purposes of section 1456 of this

title.

{1]So in original. Probably should be followed by a

comma.

§ 1455a. Coastal resource improvement program

(a) Definitions

For purposes of this section—

(1) The term “ehgible coastal state’ means a coastal

state that for any fiscal year for which a grant is applied

for under this section—

(A) has a management program approved under section

1455 of this title; and

(BK) in the judgment of the Secretary, is making

satisfactory progress in activities designed to result in

significant improvement in achieving the coastal

management objectives specified in section 1452 (2)(A)

through (K) of this title.

7la

(2) The term “urban waterfront and port” means any

developed area that is densely populated and is being

used for, or has been used for, urban residential

recreational, commercial, shipping or _ industrial

purposes.

(b) Resource management improvement grants

The Secretary may make grants to any eligible coastal

state to assist that state in meeting one or more of the

following objectives:

(1) The preservation or restoration of specific areas of

the state that

(A) are designated under the management program

procedures required by section 1455 (d)(9) of this title

because of their conservation recreational, ecological, or

esthetic values, or

(B) contain one or more coastal resources of national

significance, or for the purpose of restoring and

enhancing shellfish production by the purchase and

distribution of clutch material on publicly owned reef

tracts.

(2) The redevelopment of deteriorating and

underutilized urban waterfronts and ports that are

designated in the _ state’s management program

pursuant to section 1455 (d)(2)(C) of this title as areas of

particular concern.

(3) The provision of access to public beaches and other

public coastal areas and to coastal waters in accordance

with the planning process required under section 1455

(d)(2)(G) of this title.

(4) ‘The development of a coordinated process among

State agencies to regulate and issue permits for

aquaculture facilities in the coastal zone.

(1) Each grant made by the Secretary under this

section shall be subject to such terms and conditions as

72a

may be appropriate to ensure that the grant is used for

purposes consistent with this section.

(2) Grants made under this section may be used for—

(A) the acquisition of fee simple and other interests in

land;

(B) low-cost construction projects determined by the

Secretary to be consistent with the purposes of this

section, including but not limited to, paths, walkways,

fences, parks, and the rehabilitation of historic

buildings and structures; except that not more than 50

per centum of any grant made under this section may

be used for such construction projects;

in subsection (b)(2) of this section—

(i) the rehabilitation or acquisition of piers to provide

increased public use, including compatible commercial

activity.

(ii) the establishment of shoreline — stabilization

measures including the installation or rehabilitation of

bulkheads for the purpose of public safety or increasing

public access and use, and

(iii) the removal or replacement of pilings where such

action will provide increased recreationa! use of urban

waterfront areas,

but activities provided for under this paragraph shall

not be treated as construction projects subject to the

limitations in paragraph (B);

(D) engineering designs, specifications, and other

appropriate reports; and

(i) educational, interpretive, and management costs

and such other related costs as the Secretary

determines to be consistent with the purposes of this

section.

(d) State matching contributions; ratio; maximum

amount of grants

reo

foa

(1) The Secretary may make grants to any coastal state

for the purpose of carrying out the project or purpose

for which such grants ar. awarded, if the state matches

any such grant according to the following ratios of

Federal to state contributions for the applicable fiscal

year: 4 to 1 for fiscal year 1986; 2.3 to 1 for fiscal year

1987; 1.5 to 1 for fiscal year 1988; and 1 to 1 for each

fiscal year after fiscal year 1988.

(2) Grants provided under this section may be used to

pay a coastal state’s share of costs required under any

other Federal program that is consistent with the

purposes of this section.

(3) The total amount of grants made under this section

to any eligible coastal state for any fiscal year may not

exceed an amount equal to 10 per centum of the total

amount appropriated to carry out this section for such

fiscal year.

(e) Allocation of grants to local governments and

other agencies

With the approval of the Secretary, an eligible coastal

state may allocate to a local government, an areawide

agency designated under section 3334 of title 42, a

regional agency, or an interstate agency, a portion of

any grant made under this section for the purpose of

carrying out this section; except that such an allocation

shall not relieve that state of the responsibility for

ensuring that any funds so allocated are applied in

furtherance of the state’s approved management

program.

(f) Other technical and financial assistance

In addition to providing grants under this section, the

Secretary shall assist cligible coastal states and their

local governments in identifying and obtaining other

sources of available Federal technical and financial

assistance regarding the objectives of this section.

74a

§ 1455b. Protecting coastal waters

(a) In general

(1) Program development

Not later than 30 months after the date of the

publication of final guidance under subsection (g) of this

section, each State for which a management program

has been approved pursuant to section 306 of the

Coastal Zone Management Act of 1972 [16 U.S.C. 1455)

shall prepare and submit to the Secretary and the

Administrator a Coastal Nonpoint Pollution Control

Program for approval pursuant to this section. The

purpose of the program shall be to develop and

implement management measures for nonpoint source

pollution to restore and protect coastal waters, working

in close conjunction with other State and _ local

authorities.

(2) Program coordination

A State program under this section shall be coordinated

closely with State and local water quality plans and

programs developed pursuant to sections 1288, 1313,

1329, and 1330 of title 33 and with State plans

developed pursuant to the Coastal Zone Management

Act of 1972, as amended by this Act [16 U.S.C. 1451 et

seq.]. The program shall serve as an update and

expansion of the State nonpoint source management

program developed under section 1329 of title 33, as the

program under that section relates to land and water

uses affecting coastal waters.

(b) Program contents

Each State program under this section shall provide for

the implementation, at a minimum, of management

measures in conformity with the guidance published

under subsection (g) of this section, to protect coastal

waters generally, and shall also contain the following:

75a

(1) Identifying land uses

The identification of, and a continuing process for

identifying, land uses’ which, individually or

cumulatively, may cause or contribute significantly to a

degradation of—

(A) those coastal waters where there is a failure to

attain or maintain applicable water quality standards or

protect designated uses, as determined by the State

pursuant to its water quality planning processes; or

(B) those coastal waters that are threatened by

reasonably foreseeable increases in pollution loadings

from new or expanding sources.

(2) Identifying critical coastal areas

The identification of, and a continuing process for

identifying, critical coastal areas adjacent to coastal

waters referred to in paragraph (1)(A) and (B), within

which any new land uses or substantial expansion of

existing land uses shall be subject to management

measures in addition to those provided for in subsection

(g) of this section.

(3) Management measures

The implementation and continuing revision from time

to time of additional management measures applicable

to the land uses and areas identified pursuant to

paragraphs (1) and (2) that are necessary to achieve and

maintain applicable water quality standards under

section 1313 of title 33 and protect designated uses

(4) Technical assistance

The provision of technical and other assistance to local

governments and the public for implementing the

measures referred to in paragraph (3), which may

include assistance in developing ordinances and

regulations, technical guidance, and modeling to predict

and assess the effectiveness of such measures, training,

financial incentives, demonstration projects, and other

76a

innovations to protect coastal water quality and

designated uses.

(5) Public participation

Opportunities for public participation in all aspects of

the program, including the use of public notices and

opportunities for comment, nomination procedures,

public hearings, technical and financial assistance,

public education, and other means.

(6) Administrative coordination

The establishment of mechanisms to improve

coordination among State agencies and between State

and local officials responsible for land use programs and

permitting, water quality permitting and enforcement,

habitat protection, and public health and safety,

through the use of joint project review, memoranda of

agreement, or other mechanisms.

(7) State coastal zone boundary modification

A proposal to modify the boundaries of the State

coastal zone as the coastal management agency of the

State determines is necessary to implement the

recommendations made pursuant to subsection (e) of

this section. If the coastal management agency does not

have the authority to modify such boundaries, the

program shall include recommendations for such

modifications to the appropriate State authority.

implementation

(1) Review and approval

Within 6 months after the date of submission by a State

of a program pursuant to this section, the Secretary and

the Administrator shall jointly review the program.

The program shall be approved if—

(A) the Secretary determines that the portions of the

program under the authority of the Secretary meet the

(7a

requirements of this section and the Administrator

concurs with that determination; and

(B) the Administrator determines that the portions of

the program under the authority of the Administrator

meet the requirements of this section and the Secretary

concurs with that determination.

(2) Implementation of approved program

If the program of a State is approved in accordance

with paragraph (1), the State shall implement the

program, including the management measures included

in the program pursuant to subsection (b) of this

section, through—

(A) changes to the State plan for control of nonpoint

source pollution approved under section 1329 of title 33;

and

(B) changes to the State coastal zone management

program developed under section 306 of the Coastal

Zone Management Act of 1972, as amended by this Act

(16 U.S.C. 1455).

(3) Withholding coastal management assistance

If the Secretary finds that a coastal State has failed to

submit an approvable program as required by this

section, the Secretary shall withhold for each fiscal year

until such a program is submitted a portion of grants

otherwise available to the State for the fiscal year

under section 306 of the Coastal Zone Management Act

of 1972 [16 U.S.C. 1455), as follows:

(A) 10 percent for fiscal year 1996.

(B) 15 percent for fiscal year 1997.

(1D) 80 percent for fiscal year 1999 and each fiscal year

thereafter.

The Secretary shall make amounts withheld under this

paragraph available to coastal States having programs

approved under this section.

78a

(4) Withholding water pollution control assistance

If the Administrator finds that a coastal State has failed

to submit an approvable program as required by this

section, the Administrator shall withhold from grants

available to the State under section 1329 of title 33, for

each fiscal year until such a program is submitted, an

amount equal to a percentage of the grants awarded to

the State for the preceding fiscal year under that

section, as follows:

(A) For fiscal year 1996, 10 percent of the amount

awarded for fiscal year 1995.

(B) For fiscal year 1997, 15 percent of the amount

awarded for fiscal year 1996.

awarded for fiscal year 1997.

(D) For fiscal year 1999 and each fiscal year thereafter,

30 percent of the amount awarded for fiscal year 1998

or other preceding fiscal year.

The Administrator shall make amounts withheld under

this paragraph available to States having programs

approved pursuant to this subsection.

(d) Technical assistance

The Secretary and the Administrator shall provide

technical assistance to coastal States and _ local

governments in developing and implementing programs

under this section. Such assistance shall include—

(1) methods for assessing water quality impacts

associated with coastal land uses;

(2) methods for assessing the cumulative water quality

effects of coastal development;

(3) maintaining and from time to time revising an

inventory of model ordinances, and providing other

assistance to coastal States and local governments in

identifying, developing, and implementing pollution

control measures; and

19a

(4) methods to predict and assess the effects of coastal

land use management measures on coastal water

quality and designated uses.

(e) Inland coastal zone boundaries

(1) Review

The Secretary, in consultation with the Administrator

of the Environmental Protection Agency, shall, within

18 months after November 5, 1990, review the inland

coastal zone boundary of each coastal State program

which has been approved or is proposed for approval

under section 306 of the Coastal Zone Management Act

of 1972 [16 U.S.C. 1455], and evaluate whether the

State’s coastal zone boundary extends inland to the

extent necessary to control the land and water uses

that have a significant impact on coastal waters of the

State.

(2) Recommendation

If the Secretary, in consultation with the

Administrator, finds that modifications to the inland

boundaries of a State’s coastal zone are necessary for

that State to more effectively manage land and water

uses to protect coastal waters, the Secretary, in

consultation with the Administrator, shall recommend

appropriate modifications in writing to the affected

State.

(f) Financial assistance

(1) In general

Upon request of a State having a program approved

under section 306 of the Coastal Zone Management Act

of 1972 [16 U.S.C. 1455], the Secretary, in consultation

with the Administrator, may provide grants to the

State for use for developing a State program under this

section.

(2) Amount

80a

The total amount of grants to a State under this

subsection shall not exceed 50 percent of the total cost

to the State of developing a program under this section.

(3) State share

The State share of the cost of an activity carried out

with a grant under this subsection shall be paid from

amounts from non-Federal sources.

(4) Allocation

Amounts available for grants under this subsection

shall be allocated among States in accordance with

regulations issued pursuant to section 306(c) of the

Coastal Zone Management Act of 1972 [16 U.S.C. 1455

(c)], except that the Secretary may use not more than

25 percent of amounts available for such grants to assist

States which the Secretary, in consultation with the

Administrator, determines are making exemplary

progress in preparing a State program under this

section or have extreme needs with respect to coastal

water quality.

(g) Guidance for coastal nonpoint source pollution

control

(1) In general

The Administrator, in consultation with the Secretary

and the Director of the United States Fish and Wildlife

Service and other Federal agencies, shall publish (and

periodically revise thereafter) guidance for specifying

management measures for sources of nonpoint pollution

in coastal waters.

(2) Content

(;uidance under this subsection shall include, at a

minimum—

(A) a description of a range of methods, measures, or

practices, including structural and nonstructural

controls and operation and maintenance procedures,

that constitute each measure;

8la

(B) a description of the categories and subcategories of

activities and locations for which each measure may be

suitable;

categories or classes of pollutants that may be

controlled by the measures and the water quality

effects of the measures;

(D) quantitative estimates of the pollution reduction

effects and costs of the measures;

(E) a description of the factors which should be taken

into account in adapting the measures to specific sites

or locations; and

(fF) any necessary monitoring techniques to accompany

the measures to assess over time the success of the

measures in reducing pollution loads and improving

water quality.

(3) Publication

The Administrator, in consultation with the Secretary,

shall publish—

(A) proposed guidance pursuant to this subsection not

later than 6 months after November 5, 1990; and

(B) final guidance pursuant to this subsection not later

than 18 months after November 5, 1990.

(4) Notice and comment

The Administrator shall provide to coastal States and

other interested persons an opportunity to provide

written comments on proposed guidance under this

subsection.

(5) Management measures

For purposes of this subsection, the term “management

measures” means economically achievable measures for

the control of the addition of pollutants from existing

and new categories and classes of nonpoint sources of

pollution, which reflect the greatest degree of pollutant

reduction achievable through the application of the best

82a

available nonpoint’ pollution control practices,

technologies, processes, siting criteria, operating

methods, or other alternatives.

(h) Authorization of appropriations

(1) Administrator

There is authorized to be appropriated to the

Administrator for use for carrying out this section not

more than $1,000,000 for each of fiscal years 1992, 1993,

and 1994. |

(2) Secretary

(A) Of amounts appropriated to the Secretary for a

fiscal year under section 318(a)(4) 4 of the Coastal Zone

Management Act of 1972, as amended by this Act, not

more than $1,000,000 shall be available for use by the

Secretary for carrying out this section for that fiscal

year, other than for providing in the form of grants

under subsection (f) of this section.

(B) There is authorized to be appropriated to the

Secretary for use for providing in the form of grants

under subsection (f) of this section not more than—

(i) $6,000,000 for fiscal year 1992;

(ii) $12,000,000 for fiscal year 1993;

(iii) $12,000,000 for fiscal year 1994; and

(iv) $12,000,000 for fiscal year 1995.

(i) Definitions

In this section—

(1) the term “Administrator” means the Administrator

of the Environmental Protection Agency;

(2) the term “coastal State” has the meaning given the

term “coastal state” under section 304 of the Coastal

Zone Management Act of 1972 (16 U.S.C. 1453);

(3) each of the terms “coastal waters” and “coastal

zone” has the meaning that term has in the Coastal

Zone Management Act of 1972 [16 U.S.C. 1451 et seq. ];

83a

(4) the term “coastal management agency” means a

State agency designated pursuant to section 306(d)(6)

of the Coastal Zone Management Act of 1972 [16 U.S.C.

1455 (d)(6));

(5) the term “land use” includes a use of wateis

adjacent to coastal waters; and

(6) the term “Secretary” means the Secretary of

Commerce.

TITLE 8. WATERS

§ 38-1801. Declaration of public policy.

(a) Findings.- The General Assembly finds and

declares that:

(1) The Chesapeake and the Atlantic Coastal Bays and

their tributaries are natural resources of great

significance to the State and the nation, and their

beauty, their ecological value, and their economic

impact all reach far beyond any one local jurisdiction;

(2) The shoreline and adjacent lands, particularly the

buffer areas, constitute a valuable, fragile, and sensitive

part of this estuarine system, where human activity can

have a particularly immediate and adverse impact on

water quality and natural habitats;

(3) The capacity of these shoreline and adjacent lands to

withstand continuing demands’ without further

degradation to water quality and natural habitats is

limited;

(4) Human activity is harmful in these shoreline areas,

where the new development of nonwater-dependent

84a

structures or an increase in lot coverage is presumed to

be contrary to the purpose of this subtitle, because

these activities may cause adverse impacts, of both an

immediate and a long-term nature, to the Chesapeake

and Atlantic Coastal Bays, and thus it is necessary

wherever possible to maintain a buffer of at least 100

feet landward from the mean high water line of tidal

waters, tributary streams, and tidal wetlands;

(5) National studies have documented that the quality

and productivity of the waters of the Chesapeake Bay

and its tributaries have declined due to the cumulative

effects of human activity that have caused increased

levels of pollutants, nutrients, and toxics in the Bay

System and declines in more protective land uses such

as forestland and agricultural land in the Bay region;

(6) Those portions of the Chesapeake and the Atlantic

Coastal Bays and their tributaries within Maryland are

particularly stressed by the continuing population

growth and development activity concentrated in the

Baltimore-Washington metropolitan corridor and along

the Atlantic Coast;

(7) The quality of life for the citizens of Maryland is

enhanced through the restoration of the quality and

productivity of the waters of the Chesapeake and the

Atlantic Coastal Bays, and their tributaries;

(8) The restoration of the Chesapeake and the Atlantic

Coastal Bays and their tributaries is dependent, in part,

on minimizing further adverse impacts to the water

quality and natural habitats of the shoreline and

adjacent lands, particularly in the buffer;

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(9) The cumulative impact of current development and

of each new development activity in the buffer is

inimical to these purposes, and it is_ therefore

imperative that State law protect irreplaceable State

buffer resources from unpermitted activity; and

(10) There is a critical and substantial State interest for

the benefit of current and future generations in

fostering more sensitive development and more

effective enforcement in a consistent and uniform

manner along shoreline areas of the Chesapeake and

the Atlantic Coastal Bays and their tributaries so as to

minimize damage to water quality and natural habitats.

(b) Purpose.- It is the purpose of the General Assembly

in enacting this subtitle:

(1) To establish a Resource Protection Program for the

Chesapeake and the Atlantic Coastal Bays and their

tributaries by fostering more sensitive development

activity for certain shoreline areas so as to minimize

damage to water quality and natural habitats; and

(2) To implement the Resource Protection Program on

a cooperative basis between the State and affected local

governments, with local governments establishing and

implementing their programs in a consistent and

uniform manner subject to State and local leadership,

criteria and oversight.

§ 8-1802. Definitions; parties subject to obligation

imposed by subtitle.

(a) In general.-

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(1) In this subtitle the following words have the

meanings indicated.

(2) "Atlantic Coastal Bays" means the Assawoman, Isle

of Wight, Sinepuxent, Newport, and Chincoteague

Bays.

(3) "Atlantic Coastal Bays Critical Area" means the

initial planning area identified under § 8-1807 of this

subtitle.

(4) "Buffer" means an existing, naturally vegetated

area, or an area established in vegetation and managed

to protect aquatic, wetlands, shoreline, and terrestrial

environments from man-made disturbances.

(5) "Chesapeake Bay Critical Area" means the initial

planning area identified under § 8-1807 of this subtitle.

(6) "Commission" means the Critical Area Commission

for the Chesapeake and Atlantic Coastal Bays

established in this subtitle.

(7) "Critical Area" means the Chesapeake Bay Critical

Area and the Atlantic Coastal Bays Critical Area.

(8) "Developer" means:

(i) A person who undertakes development as defined in

this section; or

(ii) A person who undertakes development activities as

defined in the criteria of the Commission.

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(9) "Development" means any activity that materially

affects the condition or use of dry land, land under

water, or any structure.

(10) Gi) "Dwelling unit" means a single unit providing

complete, independent living facilities for at least one

person, including permanent provisions for sanitation,

cooking, eating, sleeping, and oth

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