(1) Areas and uses in those areas that are under exclusive federal jurisdiction as established through federal or state statutes are not subject to the jurisdiction of this title or Chapter 90.58 RCW. Federal agencies shall not be required to obtain permits for developments undertaken by the federal government on lands owned in fee by the federal government, or on easements obtained by the federal government for a specified purpose where the proposed development is consistent with the specified purpose, unless under either circumstance the federal government grants or reserves to the state or city of Selah substantial jurisdiction over activities on those lands;

(2) The permit system shall apply to all nonfederal developments and uses undertaken on federal lands and on lands subject to nonfederal ownership, lease or easement, even though such lands may fall within the external boundaries of a federal ownership;

(3) The permit system shall apply to developments undertaken on lands not federally owned but under lease, easement, license, or other similar federal property rights short of fee ownership, to the federal government;

(4) The above subsections shall be controlling for the purposes of shoreline permits for federal land or federal projects; however, the following attempts to clarify these limits for practical use: