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July 2016

AG's Opinion Changes the Landscape for High-Capacity Well Permitting
By Jordan Lamb, DeWitt Ross & Stevens

On May 10, 2016, Wisconsin's Attorney General Brad Schimel released his opinion on several legal questions posed earlier this year by the Assembly Speaker, Robin Vos, and Assembly leadership in regard to the scope of the Wisconsin Department of Natural Resources' (DNR) authority to condition and review high-capacity wells.

The full Attorney General opinion is available online at  this link .
The questions posed to the Attorney General concerned the extent of the DNR's authority under Wisconsin's high-capacity well permitting statute when specifically considering the effect of 2011 Wisconsin Act 21.  Act 21, which became effective on June 8, 2011, contains several revisions to Wisconsin's administrative rule promulgation process and creates limitations on state agency authority. 
Act 21 was not directly considered by the Wisconsin Supreme Court when it issued its decision regarding the DNR's duty and authority to review high-capacity well applications in their decision, Lake Beulah Management District v. Department of Natural Resources, 2011 WI 54.  After Lake Beulah, the DNR reviewed all high-capacity-well applications for their cumulative impacts on groundwater and surface water resources and imposed additional permit conditions where applicable based on that review.
For purposes of the Attorney General's opinion, the critical provision contained in Act 21, Wis. Stat. § 227.10(2m) prohibits any state agency from implementing or enforcing a standard, threshold or requirement - including as a condition in a permit "unless it is explicitly required or explicitly permitted by statute or by rule..." 
Accordingly, the AG's opinion specifically evaluates the effect that Act 21 has on the DNR's authority to review cumulative impacts and impose additional conditions in high-capacity well permits. The opinion concludes, in relevant part: 

"I have determined that the Supreme Court did not address the newly passed Act 21 in
Lake Beulah Management District v. Department of Natural Resources. Lake Beulah , 335 Wis. 2d 47. 

I further conclude that neither Wis. Stat. § 281 nor the public trust doctrine give DNR the authority to impose any condition not explicitly allowed in state statute or rule.

In addition, no other authority exists which permits DNR to impose the conditions enumerated by the Assembly."

Accordingly, the opinion concludes that DNR's authority to condition high-capacity wells is limited by Act 21 to the explicit language in the high-capacity-well permitting statute.  As such, according to the Attorney General, the DNR is not authorized to impose monitoring well conditions as a part of a high-capacity-well permit that is not specifically authorized under the statute and is not authorized to consider cumulative impacts when evaluating a high-capacity-well permit application.

On June 10, the DNR issued guidance stating that it intends to implement the Attorney General's opinion in regard to high-capacity-well permit reviews and issuance.  The DNR will follow the opinion and will only review high-capacity-well permits in accordance with the explicit authority granted to the DNR under the high-capacity-well statute, Wis. Stat. § 281.34.  According to the DNR's guidance, as a result of the opinion, in addition to determining whether the proposed well meets well-construction requirements, the DNR will review each high-capacity-well application to determine whether the proposed high-capacity well:
  • is within a groundwater protection area (within 1,200 feet of a class 1, 2 or 3 trout stream or a designated outstanding or exceptional resource water);
  • may impact springs with flow greater or equal to one cubic foot per second;
  • will result in water loss greater than 95 percent;
  • will result in 10 or more feet of water level drawdown in the public utility well based on 30 days of continuous pumping from the proposed high-capacity well or well system; and
  • will degrade safe drinking water and the groundwater resource or impact public safety.
The applications that meet the criteria listed above will be subject to an environmental review process and any approval will include conditions to ensure the well does not result in significant adverse environmental impacts and may require preparation of an environmental impact statement. In addition, if any of these conditions are met, the DNR may include specific conditions in the high-capacity-well approval, which may include conditions as to location, depth, pumping capacity, rate of flow and ultimate use.

Under this new guidance, the DNR expects most high-capacity-well applications to be reviewed within 65 business days.  If a current permit holder received a high-capacity-well approval after June 8, 2011 (i.e., after the effective date of Act 21), the permittee may request the DNR to re-review the permit in accordance with this new guidance.  For more information, go to the DNR's website at this  link .

It remains to be seen whether the DNR's new high-capacity-well review process will be challenged in court.  The Attorney General's opinion is not a court decision.  It does not create a binding legal precedent.  But it can be persuasive to courts and is often presumed to be correct as long as the Legislature doesn't pass a law contradicting it.

Proposal to Develop Targeted Nonpoint Pollution Standards Underway
In response to a request from the Natural Resources Board (NR Board) at its June 2016 meeting, the Department of Natural Resources (DNR) is presenting a Scope Statement to the NR Board at its August meeting that outlines a proposed course of action to revise Wis. Admin. Code s. NR 151, Wisconsin's nonpoint source pollution administrative code, and to incorporate by reference those changes into Wis. Admin. Code s. NR 243, the concentrated animal feeding operation (CAFO) runoff rule.  
The Scope Statement, which is the first step in Wisconsin's administrative rule process, is slated to be reviewed and potentially approved by the NR Board at their meeting in Ashland on August 3 .
According to the Scope Statement, the purpose of the proposed revisions is to "...establish agricultural nonpoint source performance standards targeted to abate nonpoint source pollution in areas of the state with shallow soils overlaying fractured bedrock (sensitive areas.)"  The department states in the scope that it has determined that statewide nonpoint source performance standards "...have not proven sufficient to achieve groundwater or surface water standards in these [karst] areas."  Consequently, the department plans to review recommendations regarding policies and practices for targeted areas that have been developed by work groups, stakeholders and federal, state and local agencies.  

Specifically, "...the department has been conducting a research study of the wells in Kewaunee county to obtain additional scientific information and data that will assist in the development of recommendations."  Any targeted performance standards that are developed and incorporated into NR 151 will then be incorporated by reference into NR 243.
If the Scope Statement is approved by the NR Board, then the DNR will begin the process of developing a draft rule for the Board's review and consideration.  The department proposes to hold two public hearings in the spring of 2017 to gather input on this proposal.  
DNR ordered to Include Groundwater Monitoring in Dairy Farm's WPDES Permit

On July 14, Dane County Circuit Court Judge John Markson ordered the Wisconsin Department of Natural Resources (DNR) to revise the WPDES permit issued to Kinnard Farms, a Kewaunee County dairy farm that had applied for a Wisconsin Pollutant Discharge Elimination System (WPDES) permit for a farm expansion.  The circuit court ordered the DNR to require groundwater monitoring and to impose caps on the number of animals at the farm as a way to address groundwater contamination.
This case arose from a decision made by an Administrative Law Judge in August of 2015, which required the DNR to include offsite groundwater monitoring and a cap on animal units in the Kinnard Farms permit. The DNR asked the Wisconsin Department of Justice to review the ALJ's decision within the context of 2011 Wisconsin Act 21, a statute that requires state agencies to have explicit authority to impose permit conditions.  The DOJ determined that DNR did not have the authority to comply with the ALJ's decision.  This determination led to groups including Clean Wisconsin and several individuals to sue the DNR in October 2015 and, most recently, to Judge Markson's decision in this case.
Link to Milwaukee Journal Sentinel article on this decision  by clicking here.

The PDPW Capitol Link is a periodic publication produced by PDPW and DeWitt Ross & Stevens. The information provided in this newsletter is provided for educational and informational purposes only. PDPW does not attempt to influence legislation or administrative rules at any level. The contents of this newsletter are intended for general information purposes only and should not be construed as legal advice or legal opinion on any specific situation. You are urged to consult an attorney concerning your own situation and any legal questions you may have.

Jordan Lamb is a partner at DeWitt Ross & Stevens' Capitol Square office in Madison. Jordan's law practice focuses on government relations and administrative law. She concentrates on legislative drafting, legislative research, and facilitating communication between clients and state government including administrative agencies and the State Legislature. Ms. Lamb also offers litigation support for administrative law issues. Jordan can be contacted at 608-252-9358 or at jkl@dewittross.com. 

The PDPW Capitol Link is sponsored by DeWitt Ross & Stevens law firm. DeWitt Ross & Stevens is a Wisconsin law firm whose members are leaders in their areas of practice and in their communities. Founded in 1903, today there are more than 80 attorneys in their Madison and Milwaukee offices. Nominated by peers as top lawyers nationally and locally, DeWitt's attorneys offer numerous services including strategic counseling, advocacy, collaboration, alternative dispute resolution, negotiation, mediation, lobbying, and litigation. For more information about DeWitt Ross & Stevens, go to www.dewittross.com.
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