The Packers, Beer, Cheese Curds and …Regulatory Reform?

Posted on January 30, 2018 by Todd E. Palmer

If states are the crucible of policy experimentation, Wisconsin’s regulatory reform efforts deserve attention as the Trump Administration implements its federal deregulatory agenda.   Wisconsin has been pushing an aggressive deregulatory agenda for the last five years and its experiences might better inform the federal debate in this area.

The cornerstone of Wisconsin’s regulatory reform effort has been Act 21.  Enacted in 2011 during a Special Session of the Legislature, Act 21 prohibits a state agency from implementing or enforcing any requirement, standard or permit term unless it is explicitly required or authorized by statute or administrative rule. Although largely ignored for its first five years, Act 21 has become a significant force in the state.  A previous ACOEL blog post highlights a Wisconsin Attorney General opinion that interprets Act 21 as restricting the Wisconsin DNR’s authority to regulated high capacity wells.  That issue is working its way through state courts.  More recently, Act 21 has been the legal predicate for further limiting state agency regulation in other areas, including:

-          A decision issued by the Wisconsin DNR Secretary concluding that her department lacks explicit authority to impose a limit on the number of animals at large livestock operations or to require that monitoring wells be installed around such operations. The Secretary’s decision reversed an ALJ’s opinion to the contrary.

-          A State Attorney General opinion that animal unit limits in WPDES permits are unlawful because they are not explicitly authorized by a statute or rule.

-          A judicial settlement agreement executed by the State of Wisconsin agreeing to refrain from enforcing any standards applicable to feed storage leachate or runoff management unless promulgated as a rule.  The state further agreed to withdraw and not enforce draft program guidance that sought to impose such requirements. 

-          A State Attorney General opinion that state agencies cannot enforce rules that are not explicitly authorized by statute, even if those rules were promulgated before enactment of Act 21.

-          A State Attorney General opinion that state agencies do not possess “any” inherent or implied authority to promulgate rules or enforce standards, requirements or thresholds.  The general statements of legislative intent, purpose or policy that are often found in statutory provisions do not confer or augment agency rulemaking authority.  

In the wake of these developments, the State Attorney General recently observed that “Act 21 completely and fundamentally altered the balance [of government administrative power], moving discretion away from agencies and to the Legislature.” 

As Act 21 forces Wisconsin agencies to create rules to implement their regulatory programs, the State Legislature is turning its attention to the rulemaking process. The Legislature passed its own version of the Reins Act (Regulatory Executives in Need of Scrutiny) which, in the most general of terms, increases the procedural requirements and legislative oversight of the state’s rulemaking process.  It now takes roughly three years to pass an administrative rule in Wisconsin.   

Having added procedures that delay the rulemaking process, the Legislature is debating bills that would expedite the rule repeal process. These bills would establish an expedited process requiring agencies to inventory and petition the Legislature for repeal of certain rules. For example, one bill would require the repeal of state rules concerning air pollutants that are not regulated under the federal Clean Air Act.  Another bill would automatically repeal certain environmental regulations ten years after they take effect. Although the Wisconsin DNR could attempt to readopt an expiring rule, that effort could not commence any sooner than one year before a rule’s expiration. 

In the Judicial Branch, the Wisconsin Supreme Court will soon decide whether the state’s practice of deferring to agency interpretations of statutes comports with the Wisconsin Constitution.  Recent decisions suggest that the majority of Justices will answer in the negative.  A decision should be issued this summer and could impose additional restrictions on agency authority.  

Not surprisingly these reforms have been controversial.  ENGOs have filed lawsuits challenging permits that fail to include terms and conditions due to the restrictions of Act 21.   The regulated community has taken the opposite view, challenging permit terms and conditions that are not explicitly authorized by rule or statute.  At some point these roles are likely to reverse since the regulated community often relies upon implicit agency authority to establish permit conditions which it finds favorable. 

Much like the federal initiative, Wisconsin’s reforms have been wrapped in the trope of reducing the regulatory burdens placed on state businesses and thereby improve the state economy. So far the state’s economy is doing quite well.  These efforts warrant continued monitoring to gauge how the economy and environmental concerns have been balanced while implementing these reforms.   

“Move Not Away from Struggle, But from Stillness”

Posted on July 13, 2017 by Renee Cipriano

Out of struggle and challenges comes a brighter future.  For environmental practitioners, the time is now to engage in struggle. 

I witnessed firsthand the creation and evolution of the Environmental Council of the States (ECOS).  Back in 1994, ECOS was the brainchild of several state environmental commissioners, including Mary Gade, the then Director of the Illinois Environmental Protection Agency.  In ECOS’s early years, the federal-state relationship was evolving, and state regulatory sophistication could not be denied.  The path to create a strong state organization with meaning was not easy and the young organization was forced to deal many struggles coming into its own.  As Ms. Gade explained in a 1996 American Bar Association article published in Natural Resources & the Environment, Winter 1996, “[t]he states were coming of age.  The formation of ECOS is a quantum leap forward in the ongoing shift in the balance of responsibility for protecting the nation’s environment.” She continued, “ECOS may not seem at all exceptional, yet more than any other environmental organization, it embodies the rising environmental leadership of states and the long overdue transfer of power in the federal–state relationship.”

Challenges and struggles have characterized the federal-state partnership upon which the nation’s regulatory system was built. The formation of ECOS helped the states collaborate and deal with the struggles together head on.  Today, no question exists that states are primarily responsible for the administration of environmental laws in this country, assuming more than 96% of the delegable authorities under federal law.  The states are on the frontline of enforcement, permitting, innovation and streamlining efforts.  The public looks to them first for answers.  Industry relies on the states to be effective partners, balancing the needs of industry and the public while allowing industry to run operations efficiently and in compliance.

Over the life of ECOS, state environmental regulators have been delegated more responsibility for environmental protection, education and enforcement but the resources provided them have measurably decreased.  Federal monies dedicated to financially support state programs have declined and are jeopardized further by proposed budget cuts.  At the same time, state elected officials face their own budget crises.  In response, state environmental protection agencies are being challenged to operate with little to no state funding and instead rely on federal funding and increased fees imposed on regulated entities.

With funding issues looming larger today than ever, there is a need to revisit both our national approach to environmental protection and, whether we are effectively enlisting the federal-state partnership to avoid staff duplication, regulatory confusion and resource waste.  For example, states and stakeholders should be able to rely on the state’s implementation of federally approved state programs without facing contrary interpretations from U.S. EPA.  Some state decisions are scrutinized repeatedly, with no meaningful purpose or resulting benefit; sometimes years after decisions are made. Stakeholders should be able to expect that if U.S. EPA identifies a deficiency in the state administration of a delegated program, U.S EPA will act swiftly under the authority granted to it by Congress to demand a fix to deficiency and approve the state’s modification just as timely.  And states should be able to rely on U.S. EPA to ensure that state delegated programs it approves set a level playing field across the nation to avoid disadvantaging economic growth in one state simply because another state’s approved program does not quite meet U.S. EPA’s interpretation of federal standards.

This brings us to the current Administration’s work around regulatory reform.  See President Trump, E.O. 13771, “Reducing Regulation and Controlling Regulatory Costs (Jan. 30, 2017); President Trump, E.O. 13777, “Enforcing the Regulatory Reform Agenda” (Feb. 24, 2017); EPA, Evaluation of Existing Regulations (Apr. 13, 2017).  Although many see “regulatory reform” under a Pruitt U.S. EPA as the end of environmental protection, I prefer to see it as an opportunity to examine holistically our current environmental regulatory framework and identify innovative ways to build on our environmental successes.  Even more importantly, I also see it as an opportunity to reinvigorate the national conversation around the federal-state relationship and embrace more fully the unparalleled state leadership we have in our country.  There is a rightful place for both U.S. EPA and the states as we move towards addressing our future environmental challenges but we can no longer support or afford duplication and burden without purpose.

In June, 2017, ECOS issued a document entitled COOPERATIVE FEDERALISM 2.0: Achieving and maintaining a Clean Environmental and Protecting Public Health.  Under the leadership of Executive Director and General Counsel Alexandra Dunn, and through a consensus based process among members of ECOS, this blueprint for the future presents both the principles that should guide the federal-state relationship and lists the important “policy neutral issues” where application of cooperative federalism could be focused.  This document is not only insightful but timely and provides the opportunity for positive reforms that will allow the nation to continue its great work of environmental protection into the future.  It is a must read.

My yoga teacher always tells the class to “move away from struggle” when she is challenging us with new and different yoga moves. I find though, that unless I struggle, my moves will never improve.   Engaging in the process of change can be a struggle—from start to finish.  But we cannot do better if we don’t.  The national conversation is now, and we are only wasting our opportunity for an even better environmental regulatory system for the future if we decide to move away from struggle and move to stillness.