EmR2032 Rule Text

The statement of scope for this rule, SS# 107-18, was approved by the Governor on September 28, 2018, published in Register No. 754A4 on October 22, 2018, and approved by the Natural Resources Board on January 23, 2019. This rule was approved by the Governor on August 21, 2020.

ORDER OF THE STATE OF WISCONSIN NATURAL RESOURCES BOARD

AMENDING AND CREATING RULES

The Wisconsin Natural Resources Board adopts an order to create chs. NR 756 and 758, relating to financial responsibility for engineering controls for contaminated sediment remediation, and insurance and financial responsibility for Voluntary Party Liability Exemption projects with contaminated sediments.

RR-11-17 (E)

Analysis Prepared by the Department of Natural Resources

1. Statute Interpreted:

Wis. Stat. s. 292.12 (2) (d) 2. creates requirements for proof of financial responsibility, as determined by the department, sufficient to pay the costs of a plan and compliance schedule for an engineering control that is used to contain or minimize the spread of contamination in sediment. Wis. Stat. s. 292.15 (2) (af) 3m. creates financial assurance and insurance requirements for a voluntary party liability exemption for a contaminated sediment site.

2. Statutory Authority:

Section 36 of 2015 Wis. Act 204 directs the department to use the procedure under Wis. Stat. s. 227.24 for emergency rules to promulgate rules required under sections 292.12 (2) (d) 2. and 292.15 (2) (ad) 3m. of the statutes for the period before the effective date of the permanent rules promulgated under these sections. Other statutory authority includes Wis. Stat. ss. 292.12 (2) (c), 292.31 (2), and 227.11 (2).

3. Explanation of Agency Authority:

Wis. Stat. ss. 292.12 (2) (d) 2. and 292.15 (2) (af) 3m. were adopted as part of 2015 Wis. Act 204. Section 292.12 (2) (d) 2. creates new financial responsibility requirements when engineering controls are used at contaminated sediment sites. Section 292.15 (2) (af) 3m. creates new financial assurance and insurance requirements for a voluntary party liability exemption for a contaminated sediment site. Nonstatutory language within Section 36 of 2015 Wis. Act 204 requires the department to promulgate rules to implement Wis. Stat. ss. 292.12 (2) (d) 2. and 292.15 (2) (af) 3m. using the emergency rulemaking process. Section 36 states that the department “is not required to provide evidence that promulgating a rule…as an emergency rule is necessary for the preservation of the public peace, health, safety or welfare and is not required to provide a finding of emergency for a rule promulgated under this subsection.” Wis. Stat. s. 292.12 (2) (c) requires the department to promulgate rules to identify limitations or other conditions related to property, to ensure that conditions at the site remain protective of public health, safety, and welfare and the environment, and, as applicable, to promote economic development. Wis. Stat. s. 292.31 (2) requires the department to promulgate rules relating to investigation and remedial action for sites or facilities and other properties at which the air, land, or waters of the state have been affected by the discharge of a hazardous substance or other environmental pollution. Wis. Stat. s. 227.11 (2) (a) provides the department with authority to promulgate rules that are necessary to effectuate the purpose of a statute.

4. Related Statutes or Rules:

Wis. Stat. ch. 292 and Wis. Adm. Code chs. NR 700-754.

5. Plain Language Analysis:

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.

Proposed ch. NR 756 to implement Wis. Stat. s. 292.12 (2) (d) 2.

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:

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The purpose, applicability, and definitions for the chapter in ss. NR 756.01 to 756.03.

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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.

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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.

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Length of time requirements, submittal requirements, authorized department responses, fees, and inspections under s. NR 756.04 (3) to (6).

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Continuing obligation responsibilities and department access authority at affected sediment sites under s. NR 756.05.  

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Allowable methods of providing proof of financial responsibility under s. NR 756.06. 

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Procedures for estimating financial assurance costs and calculating the financial assurance amount under ss. NR 756.07 and 756.08.

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Policies and procedures for changing financial assurance methods and submitting annual adjustments under ss. NR 756.09 and 756.10.

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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.

Proposed ch. NR 758 to implement Wis. Stat. s. 292.15 (2) (af)3m.

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:

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Purpose and applicability provisions and definitions for the chapter in ss. NR 758.01 to 758.05.

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Insurance requirements for either the use of a state insurance contract or an individual policy under s. NR 758.07.

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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.

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Options for using financial assurance methods other than insurance under s. NR 758.13.

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Procedures and criteria for waiver of the insurance requirement under s. NR 758.15.