AGC v. Board of Oil, Gas and Mining, 20000389.

38 P.3d 291

2001 UT 112

ASSOCIATED GENERAL CONTRACTORS, Utah Chapter, Plaintiff and Appellant, v. BOARD OF OIL, GAS AND MINING, Department of Natural Resources, State of Utah, Defendant and Appellee.

No. 20000389.

Supreme Court of Utah.

December 21, 2001.

Joseph C. Rust, Salt Lake City, for plaintiff.

Mark L. Shurtleff, Att'y Gen., Thomas A. Mitchell, Asst. Att'y Gen., Salt Lake City, for defendant.

RUSSON, Associate Chief Justice.

¶ 1 Appellant Associated General Contractors ("AGC") filed suit challenging the Board of Oil, Gas and Mining's ("the Board") promulgation of a rule defining the terms "sand," "gravel," and "rock aggregate" as used in sections 40-8-4(3)(b) and 40-8-4(8)(b) of the Utah Code. The district court upheld the rule, granting summary judgment in favor of the Board. We affirm.

BACKGROUND

¶ 2 The Utah Mined Land Reclamation Act ("the Mining Act") requires affected mining operations within the state to ensure that their lands are restored "during or after mining" to a "safe, stable, ecological condition and use which will be consistent with local environmental conditions." Utah Code Ann. §§ 40-8-4(14), -12.5 (1998). To implement this objective of "reclamation," the Mining Act charges the Board with "enact[ing] rules ... necessary to carry out the purposes" of the statute. Id. § 40-8-6(1). The statute further authorizes the Board to "take such other actions within the purposes of this act as may be necessary to enforce its provisions." Id. § 40-8-6(4).

¶ 3 In 1987, the legislature amended the Mining Act to restrict its regulatory scope. Specifically, the new amendment excluded from regulation the extraction of sand, gravel, and rock aggregate. The statute now reads, "`Deposit' or `mineral deposit' excludes sand, gravel, [and] rock aggregate." Id. § 40-8-4(3)(b). Likewise, the statute states that the term "`[m]ining operation' does not include ... the extraction of sand, gravel, and rock aggregate...." Id. § 40-8-4(8)(b). The amendment, however, did not define sand, gravel, or rock aggregate.

¶ 4 Subsequently, on February 7, 1997, the Board proposed a draft rule defining the terms sand, gravel, and rock aggregate as used in the Act. Noting that such definitions were necessary to "clarify [the Act's] exemptions to the regulated community," the draft rule interpreted sand to mean sedimentary, "naturally occurring unconsolidated or moderately consolidated¹ accumulation of rock and mineral particles, the dominant size range being between 1/16mm to 2mm." Likewise, the draft rule proposed defining gravel to include sedimentary, "naturally occurring unconsolidated or moderately consolidated accumulation of rock and mineral particles" predominantly sized 2 mm to 10 mm. Finally, the draft rule sought to define rock aggregate as "those consolidated rock materials occurring within or above a sand deposit, a gravel deposit or a sand and gravel deposit that were emplaced by sedimentary processes acting contemporaneously with or subsequent to the formation of the sand or sand and gravel deposit."

¶ 5 Following proposal of this draft rule, the Board requested informal public comment on its recommended definitions of sand, gravel, and rock aggregate. Accordingly, the Board notified 173 Utah counties, cities, and other interested parties of the proposed rule in a letter dated July 25, 1997. In addition, the Board accepted public comment and testimony on the proposed definitions at five separate briefing sessions held in May, June, July, and October 1997 and January 1998.

¶ 6 The Board also conducted three public meetings concerning its proposed definitions on November 25, 1997, December 15, 1997, and January 28, 1998. Parties attending these meetings consisted of both concerned citizens and representatives of interested parties and governmental entities, including AGC. During its December 15 meeting, the Board requested that participants submit additional written comments on the proposed definitions. Subsequently, the Board received the requested comments, which included various suggested revisions to the draft rule's definitions of sand, gravel, and rock aggregate. Utah County, for instance, claimed that the Board's proposed definition of rock aggregate was too much "like a standard geology definition," and thus urged the Board to instead adopt a definition based on economics. Similarly, AGC contended throughout the process that the Board should promulgate a rule defining sand, gravel, and rock aggregate as materials that "inherently ha[ve] no greater value than the material around" them. The Utah Mining Association, however, wrote to the Board during the informal comment period in support of the proposed definitions. Its letter stated, "[W]e have reviewed the [proposed] definition[s] and have no objection .... We appreciate that you presently do not have any measurement to differentiate between [mining and sand, gravel, and rock aggregate operations,] and support the concept embodied in the proposed definition[s]."

¶ 7 At the conclusion of its January 28, 1998, meeting, the Board decided "to proceed forward with [formal] rulemaking regarding the definition of sand, gravel, and rock aggregate." However, the Board further determined that while it would continue to propose the definitions of sand and gravel contained in the draft rule, it would alter the proposed definition of rock aggregate to reflect a definition that had been previously challenged in Larson Limestone Co. v. State, Division of Oil, Gas & Mining, 903 P.2d 429 (Utah 1995).² That definition read: "`[R]ock aggregate' ... mean[s] rock materials associated with a sand deposit, gravel deposit, or sand and gravel deposit that were created by alluvial sedimentary processes. [T]he definition of rock aggregate specifically excludes any solid rock (bedrock) exposed at the surface of the earth or overlain by unconsolidated material."

¶ 8 Accordingly, on February 3, 1998, the Board initiated a formal rulemaking for defining sand, gravel, and rock aggregate. First, the Board published notice on February 8, 1998, in the state's two major newspapers seeking public comment on the proposed rule. Then, on February 25, 1998, the Board conducted a formal, on-the-record hearing to receive evidence on the proposed rule. At the hearing, Lowell Braxton, director of the Utah Division of Oil, Gas and Mining ("the Division"),³ explained why the Division supported definitions "based on geological distinctions instead of the end use" of materials. He stated:

We have a statutory obligation to regulate non-coal mining activity that does not contemplate an end use or a specific commodity. In other words, we regulate the activity, not the specific commodities, unless otherwise exempted.

Second[], ... [t]he legislative findings [of the Mining Act] state that mined land should be reclaimed to promote post-mining land uses and that reclamation requirements need to reflect the diversity of topographic, geologic, economic, and other criteria specific to a given deposit. Therefore,... reclamation of disturbances, not commodities-specific or end-use reclamation, is directed by statute.

[Finally, t]he [l]egislature exempted from regulation ... sand, gravel, and rock aggregate ..., again, with no mention of end use.

Mr. Braxton further testified that he believed the Board's proposed definitions to comport with the legislative intent of the Mining Act, reasoning that in referencing the terms sand, gravel, and rock aggregate together, "[the legislature was] clearly talking about rock aggregate in conjunction with sand and gravel operations." He also stated that the Division does not "regulate sand, gravel, and rock aggregate[,] and we don't propose to regulate that." Finally, Mr. Braxton noted that the Board had received extensive public comment on the proposed definitions, and that in drafting the definitions, the Board relied on "two widely recognized geologic source materials" produced by the American Geological Institute and the United States Bureau of Mines.

¶ 9 Following Mr. Braxton's testimony, three representatives of AGC testified in opposition to the Board's proposed definitions. Specifically, AGC contended that the definitions' inclusion of only unconsolidated and moderately consolidated materials was not "consistent with the legislative intent" of the Act. Consequently, AGC requested that the Board adopt definitions based, not on whether such materials were deposited by sedimentary processes, but instead on whether they have a "greater intrinsic value than the material in which [they are] contained."

¶ 10 Approximately two months later, on April 22, 1998, a quorum of the Board convened to deliberate on the proposed rule. After considering "all supporting and opposing comments, sworn testimony, and exhibits," along with the evidence gathered throughout the informal rulemaking process, the Board found the proposed definitions of sand, gravel, and rock aggregate to be "based on substantial geological evidence and, as such, [to be] entirely consistent with the letter and intent of the ... [Mining] Act." Accordingly, the Board unanimously adopted the proposed rule, defining sand, gravel, and rock aggregate in the following manner:

"Sand" means a naturally occurring unconsolidated to moderately consolidated accumulation of rock and mineral particles, the dominant size range being between 1/16mm to 2mm, which has been deposited by sedimentary processes.

....

"Gravel" means a naturally occurring unconsolidated to moderately consolidated accumulation of rock and mineral particles, the dominant size range being between 2mm and 10mm, which has been deposited by sedimentary processes.

....

"Rock Aggregate" means those consolidated rock materials associated with a sand deposit, a gravel deposit, or a sand and gravel deposit, that were created by alluvial sedimentary processes. The definition of rock aggregate specifically excludes any solid rock in the form of bedrock

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