The purpose of these revisions is to provide procedures for new requirements and statutory changes under 2015 Wisconsin Act 204 (“Act 204”). Act 204 mandates that DNR promulgate emergency rules for two provisions of Act 204 relating to new financial assurance for certain types of contaminated sediment sites. Board order revisions. DNR revised this board order in response to comments received for the item in advance of its consideration at the May 2020 meeting of the Natural Resources Board. Revisions to the previous version of this order include: (1) deletion of supporting revisions to chs. NR 700 to 754, Wis. Adm. Code; and (2) deletion of two proposed rule sections within ch. NR 758, ss. NR 758.23 and 758.24, relating to the partial cleanup voluntary party liability exemption (VPLE) option for contaminated sediment sites. These provisions will be considered as part of the permanent rule process, which is ongoing. Board order content: The Remediation and Redevelopment program is proposing the creation of chs. NR 756 and 758 as emergency rules. These two chapters are proposed as emergency rules and will also be considered as part of the permanent rulemaking process. The department is proposing the emergency rules to comply with section 36 of 2015 Act 204, which directed the department to adopt emergency rules for two provisions of Act 204. Act 204 amended Wis. Stat. ch. 292 by establishing new requirements regarding the way contaminated sediments are assessed, managed, and remediated. Act 204 created requirements relating to sites where a person is using an engineering control to address contaminated sediment. At these sites, the department may require submission of a plan and compliance schedule and proof of financial responsibility for the maintenance of an engineering control or for the investigation and remediation of residual contamination following the removal of a structural impediment. Act 204 also created the opportunity for persons to obtain VPLE at sites with contaminated sediments, and imposed insurance and financial assurance requirements on contaminated sediment sites enrolled in the VPLE program. The proposed ch. NR 756 contains provisions relating to financial responsibility for engineering controls at contaminated sediment sites and for addressing contamination when a structural impediment is removed. Section 292.12 of the remedial action statute contains provisions concerning sites with residual contamination. Often the residual contamination lies in sediments at the sites. If all of the contamination cannot be removed, engineering controls such as constructed caps, sheet piles, and other physical barriers designed to permanently limit exposure to and movement of contaminated sediment in a waterbody, are used to contain and minimize the spread of the contamination. Act 204 added provisions to section 292.12 concerning proof of financial responsibility to pay for a plan and compliance schedule relating to the use of engineering controls. The proposed rule creates ch. NR 756, which implements Wis. Stat. s. 292.12 (2) (d) 2. and includes:
The purpose, applicability, and definitions for the chapter in ss. NR 756.01 to 756.03.
The primary requirements for the plan and compliance schedule in s. NR 756.04 (2) (a), including a plan and compliance schedule that contains scheduled actions, an engineering analysis, and 5-year inspection criteria.
Financial assurance requirements under s. NR 756.04 (2) (b) for actions listed within the plan and compliance schedule and for events that may occur and affect the completion of the goals of the plan and compliance schedule or the protectiveness of the engineering control remedy.
Length of time requirements, submittal requirements, authorized department responses, fees, and inspections under s. NR 756.04 (3) to (6).
Continuing obligation responsibilities and department access authority at affected sediment sites under s. NR 756.05.
Allowable methods of providing proof of financial responsibility under s. NR 756.06.
Procedures for estimating financial assurance costs and calculating the financial assurance amount under ss. NR 756.07 and 756.08.
Policies and procedures for changing financial assurance methods and submitting annual adjustments under ss. NR 756.09 and 756.10.
Policies and procedures for default on commitments under the plan and compliance schedule, for bankruptcy, compliance, and the release of funds under ss. NR 756.11 to 756.14.
The proposed ch. NR 756 includes requirements and procedures for a plan and compliance schedule. Wis. Stat. s. 292.12 (2) (d) 2. establishes DNR’s authority to require financial responsibility “sufficient to pay the costs of complying with a plan approved under subd. 1.” The referenced subdivision establishes the plan and compliance schedule. The proposed rule includes provisions concerning the plan and compliance schedule and penalties for failure to comply with the plan and compliance schedule (ss. NR 756.04, NR 756.11, and NR 756.14) because the plan and compliance schedule is the basis for establishing the amount of financial assurance required under Wis. Stat. s. 292.12 (2) (d) 2. The proposed ch. NR 756 includes provisions that financial responsibility costs are suited to the conditions of each contaminated sediment site. Cost estimates are based on the total cost of the individual cost items listed in the rule; however, two of financial responsibility requirements have a provision that allows DNR to reduce the cost estimate presented by the responsible party, based on site-specific criteria and reports presented by the responsible party. Section NR 756.07 (1) (c) allows DNR to reduce the financial responsibility cost estimate provided by the responsible party. DNR may reduce costs by a percentage based on site-specific criteria, including the results of the engineering analysis submitted by the responsible party. This approach allows DNR to reduce costs according to the physical circumstances of each different, highly variable contaminated sediment site. This provision and another provision prohibiting DNR from the inclusion of redundant costs are included to safeguard against any disproportionate costs to responsible parties. The proposed ch. NR 758 contains provisions that implement section 292.15 (2) (af) 3m. relating to environmental insurance and financial assurance requirements for contaminated sediment sites in the VPLE program. The VPLE program provides a liability exemption to developers or businesses so they can have comfort and assurance that they will not have to pay for or conduct additional remediation in the future, regardless of what may be found in the future. Wis. Stat. s. 292.15 (2) (b) lists several situations when the liability exemption would protect the voluntary party. 2015 Wis. Act 204 added requirements to section 292.15 concerning financial responsibility and insurance for contaminated sediment sites. The proposed chapter NR 758 includes:
Purpose and applicability provisions and definitions for the chapter in ss. NR 758.01 to 758.05.
Insurance requirements for either the use of a state insurance contract or an individual policy under s. NR 758.07.
Procedures and policies for calculating the amount of the insurance coverage, the length of insurance, the amount of the deductible, and proof of insurance under ss. NR 758.09 to 758.12.
Options for using financial assurance methods other than insurance under s. NR 758.13.
Procedures and criteria for waiver of the insurance requirement under s. NR 758.15.
Conditions for the issuance of a VPLE certificate of completion under s. NR 758.19 and the policy for failure to satisfy the conditions under s. NR 758.21. This insurance program is similar to the existing insurance requirement in Wis. Stat. s. 292.15 (2) (ae) 3m., which allows a voluntary party to obtain a liability exemption if the party pays for insurance for remaining groundwater contamination that will be addressed with natural attenuation. This similar requirement has been in place since 2001. The insurance is a required condition of obtaining a certificate of completion and as long as the insurance is obtained, the developer or business and future owners have the liability protection and would not be required to conduct any additional remediation in the future. Wis. Stat. s. 292.15 (2) (af) 3m. states that the voluntary party must obtain insurance to cover the cost in case additional remediation is necessary. This insurance covers the risk to the State of Wisconsin that a VPLE site would later be discovered to have additional contamination that warrants remediation. The most likely situations when additional remediation would be needed are if DNR discovers that the contamination is more extensive than initially identified when the investigation was conducted or somehow it is later discovered that the cleanup was not successful. In that scenario, DNR would file a claim on the insurance to conduct the additional remediation, and the party covered by the liability exemption would not have to conduct or fund any remedial actions.
The statutory section that authorizes the VPLE program requires that parties provide insurance as a condition of the liability exemption. Under statute, if a party obtains this liability exemption, and then fails to maintain the insurance coverage, the party would lose its liability exemption. The rule reiterates this policy to ensure that parties are aware that they must maintain coverage to retain the liability exemption. Providing this incentive to maintain insurance or other financial assurance helps protect the state taxpayers from bearing the costs of additional cleanup, if needed.
6. Summary of, and Comparison with, Existing or Proposed Federal Statutes and Regulations:
There are no federal regulations that address the specific activities to be regulated by the proposed rules; however, there are related federal regulations that require financial assurance in some cases for sites that are being processed under federal laws:
Sites being cleaned up under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) Superfund process or sites using the Superfund alternatives process may be required to provide financial assurance in a settlement agreement or order. There are no federal regulations that apply to this specific subject; however, EPA has issued guidelines.
The Resource Conservation and Recovery Act (RCRA) requires all hazardous waste treatment, storage and disposal facilities to demonstrate that they will have the financial resources to properly close the facility or unit when its operational life is over or provide the appropriate emergency response in the case of an accidental release. These financial assurance requirements are found at 40 C.F.R., Part 264, Subpart H, and Part 265, Subpart H.
RCRA has rules that require financial assurance for Corrective Action sites that are found in 40 C.F.R., s. 264.101 (b) and (c).7. Comparison with Similar Rules in Adjacent States:
There are no regulations at this time within Michigan, Minnesota, Illinois, or Iowa that address the specific activities to be regulated by the proposed rules; however, there are related requirements in certain states:
The state of Michigan, under Part 201 of Natural Resources and Environmental Protection Act (Act 451) of 1994, requires financial assurance as part of proposed post-closure agreements that are submitted as part of a “no further action report” following a remedial action. The financial assurance covers the costs of monitoring, operation and maintenance, oversight, and other costs determined by the Michigan Department of Environment, Great Lakes, and Energy to be necessary to assure the effectiveness and integrity of the remedial action (Mich. Stat. s. 324.20114d).
The state of Iowa, under Iowa Code Chapter 455H, the Iowa Land Recycling and Environmental Remediation Standards Act, may require financial assurance from those participating in its voluntary Iowa Land Recycling Program. The director of the Iowa Department of Natural Resources may require reasonable proof of financial assurance for a technological control to ensure that it remains effective. The requirement is in statute (Iowa Stats. s. 455H.206 and Iowa Administrative Code s. 137.7(1)).Minnesota, Illinois, Iowa, and Michigan all have adopted statutes or rules governing financial responsibility requirements for solid waste facility, hazardous waste facility, or corrective action sites or facilities as part of their respective delegations of authority to implement RCRA at the state level.
8. Summary of Factual Data and Analytical Methodologies Used and How Any Related Findings Support the Regulatory Approach Chosen:
The policies, procedures, and methods for meeting financial assurance requirements under ch. NR 756, relating to financial assurance for sites with engineering controls, are based, in part, on the policies and procedures for financial assurance requirements for solid waste facilities under Wis. Stat. s. 289.41 and ch. NR 520, Wis. Adm. Code. These solid waste regulations are derived from federal requirements and have received positive evaluations from both internal staff and external customers that have experience in administering and meeting these requirements. The statutory emergency rulemaking process requires a public hearing following the effective date of the emergency rule. To encourage public input, DNR staff presented these rules throughout various stages of their development at five public meetings during the 14-month rule development phase of the rulemaking process. Following the receipt of comments on the emergency rule at the May 2020 meeting of the Natural Resources Board, DNR staff withdrew the emergency rule and held two additional public meetings in June and July of 2020. DNR subsequently revised the proposed emergency rule to remove provisions not explicitly authorized by the emergency rulemaking mandate in s. 36, 2015 Wis. Act 204. The department will continue to solicit input on these provisions during the permanent rule process. The permanent rule process includes solicitation of comments on the economic impact of the proposed permanent rules as well as comments on the approach chosen by the department in the proposed emergency rule. The solicitation of comments on the economic impact of the proposed permanent rule occurred between April 21, 2020, and May 21, 2020. The department is currently reviewing comments received and revising the draft economic impact analysis statement. Public hearing dates and the comment submission deadline are to be determined but are tentatively planned for fall of 2020.
9. Analysis and Supporting Documents Used to Determine the Effect on Small Business or in Preparation of an Economic Impact Report:
The program requested estimates from various consulting firms regarding rule revisions impacting the costs of consulting services needed to meet the new requirements. This data was supplemented with Bureau of Remediation and Redevelopment Tracking System (BRRTS) data and department staff expertise.
10. Effect on Small Business (initial regulatory flexibility analysis):
Rule revisions are not anticipated to affect small business.
11. Agency Contact Persons:
Michael Prager – RR/5
Land Recycling Team Leader
Department of Natural Resources
101 S. Webster Street
Madison, WI 53703
(608) 261-4927
Molly Schmidt – RR/5
Department of Natural Resources
101 S. Webster Street
Madison, WI 53703
(608) 267-7500
12. Place where comments are to be submitted and deadline for submission:
The statutory emergency rulemaking process requires a public hearing following the effective date of the emergency rule. To encourage public input, DNR staff presented these rules throughout various stages of their development at five public meetings during the 14-month rule development phase of the rulemaking process. Following the receipt of comments on the emergency rule at the May 2020 meeting of the Natural Resources Board, DNR staff withdrew the emergency rule and held two additional public meetings in June and July of 2020. DNR subsequently revised the proposed emergency rule to remove provisions not explicitly authorized by the emergency rulemaking mandate in s. 36, 2015 Wis. Act 204. Written comments may be submitted at the public hearings, by regular mail, or by email to:
