2019 - 2020 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
TO SENATE BILL 169
August 5, 2019 - Offered by Senators Wanggaard, Cowles and Wirch.
SB169-SSA1,1,7 1An Act to renumber and amend 281.36 (3r) (a) 1.; to amend 281.36 (3r) (a) 2.,
2281.36 (3r) (b), 281.36 (3r) (e) and 295.60 (8) (dm) 4.; and to create 281.36 (1)
3(ad), 281.36 (1) (ae), 281.36 (1) (be), (bf) and (bg), 281.36 (3r) (a) 1. b. and c.,
4281.36 (3r) (ag), 281.36 (3t) (g) and 281.36 (3w) of the statutes; relating to:
5wetland mitigation banks, providing an exemption from emergency rule
6procedures, providing an exemption from rule-making procedures, and
7requiring the exercise of rule-making authority.
Analysis by the Legislative Reference Bureau
This bill makes changes to requirements for wetland mitigation banks.
Under current law, the Department of Natural Resources must issue wetland
general permits for discharges of dredged or fill material into certain wetlands and
may require a person to apply for and obtain a wetland individual permit if DNR
determines that conditions specific to the site require additional restrictions on the
discharge in order to provide reasonable assurance that no significant adverse
impacts to wetland functional values will occur. Under current law, before DNR may
issue a wetland individual permit, it must require the restoration, enhancement,

creation, or preservation of other wetlands to compensate for adverse impacts to a
wetland resulting from the discharge, also known as mitigation.
Under current law, there are three methods by which wetland mitigation may
be accomplished: 1) purchasing credits from a mitigation bank located in this state;
2) participating in the in lieu fee subprogram; or 3) completing mitigation within the
same watershed or within one-half mile of the site of the discharge. A mitigation
bank is a system of accounting for wetland loss and compensation in which sites
where wetlands are restored, enhanced, created, or preserved generate credits that
may be applied or purchased in order to compensate for adverse impacts to other
wetlands. Under current law, DNR must approve the establishment of a mitigation
bank.
This bill changes the first method of wetland mitigation by limiting credit
purchases to only a mitigation bank located in the same hydrologic unit code (HUC)
8 as the wetland impacted by the discharge, if available. Under the bill, an HUC 8
is a watershed delineated by the U.S. Geological Survey using a nationwide system
based on surface hydrologic features at the 8-digit subbasin scale. If no available
mitigation bank is located in the same HUC 8 as the wetland impacted by the
discharge, the bill allows credit purchases to be made from a mitigation bank located
within the same bank service area as the wetland impacted by the discharge. Under
the bill, a bank service area is the geographic area corresponding to the HUC 6 within
which impacts to a wetland from a discharge can be mitigated at a specific mitigation
bank as determined in an agreement between DNR and the U.S. Army Corps of
Engineers and referenced in a mitigation banking instrument. Under the bill, an
HUC 6 is a watershed delineated by the U.S. Geological Survey using a nationwide
system based on surface hydrologic features at the 6-digit basin scale. If no available
mitigation bank is located in the same bank service area as the impacted wetland,
the bill allows credit purchases to be made from a mitigation bank in the same basin
as the wetland impacted by the discharge, meaning the Lake Michigan, Lake
Superior, or Mississippi River basin that corresponds to the HUC 2. Under the bill,
an HUC 2 is a watershed delineated by the U.S. Geological Survey using a
nationwide system based on surface hydrologic features at the 2-digit region scale.
However, despite these limitations on the location of a mitigation bank, the bill
allows DNR, in consultation with the U.S. Army Corps of Engineers, to allow credits
to be purchased from a different mitigation bank than the one prescribed or allow
mitigation to be done through the in lieu fee subprogram rather than by purchasing
credits from a mitigation bank if DNR determines it would better serve natural
resource goals, such as retaining flood water, improving or restoring wildlife habitat,
or more closely matching the impacted wetland type.
This bill requires DNR to establish by rule financial assurance requirements
for the construction of mitigation projects by mitigation banks. The bill also
establishes the means by which a mitigation bank that has not yet completed
construction of a mitigation project and has not been approved by DNR (developing
mitigation bank) may sell the credits that the mitigation bank estimates it will have
once the mitigation project is complete. Under the bill, a developing mitigation bank
may sell these credits if it is in compliance with DNR's financial assurance

requirements and if it follows a specific schedule for release of the credits that is
established in the bill. The bill allows DNR to authorize a developing mitigation
bank to sell its estimated credits at a faster rate than the schedule allows if the bank
provides an additional level of financial assurance or if the mitigation is of a type that
is less prone to failure, such as wetland preservation or enhancement.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB169-SSA1,1 1Section 1 . 281.36 (1) (ad) of the statutes is created to read:
SB169-SSA1,3,62 281.36 (1) (ad) “Bank service area” means the geographic area corresponding
3to the HUC 6 within which impacts to a wetland from a discharge can be mitigated
4at a specific mitigation bank as determined in an agreement between the department
5and the U.S. army corps of engineers and referenced in a mitigation banking
6instrument under sub. (3w).
SB169-SSA1,2 7Section 2 . 281.36 (1) (ae) of the statutes is created to read:
SB169-SSA1,3,98 281.36 (1) (ae) “Basin” means the Lake Michigan, Lake Superior, or Mississippi
9River basin that corresponds to the HUC 2.
SB169-SSA1,3 10Section 3 . 281.36 (1) (be), (bf) and (bg) of the statutes are created to read:
SB169-SSA1,3,1311 281.36 (1) (be) “HUC 2” means a watershed delineated by the U.S. geological
12survey using a nationwide system based on surface hydrologic features at the 2-digit
13region scale (the hydrologic unit code 2).
SB169-SSA1,3,1614 (bf) “HUC 6” means a watershed delineated by the U.S. geological survey using
15a nationwide system based on surface hydrologic features at the 6-digit basin scale
16(the hydrologic unit code 6).
SB169-SSA1,3,1917 (bg) “HUC 8” means a watershed delineated by the U.S. geological survey using
18a nationwide system based on surface hydrologic features at the 8-digit subbasin
19scale (the hydrologic unit code 8).
SB169-SSA1,4
1Section 4. 281.36 (3r) (a) 1. of the statutes is renumbered 281.36 (3r) (a) 1. a.
2and amended to read:
SB169-SSA1,4,53 281.36 (3r) (a) 1. a. Purchasing Except as provided in subd. 1. b. and par. (ag),
4purchasing
credits from a mitigation bank located in this state the same HUC 8 as
5the wetland impacted by the discharge
.
SB169-SSA1,5 6Section 5 . 281.36 (3r) (a) 1. b. and c. of the statutes are created to read:
SB169-SSA1,4,107 281.36 (3r) (a) 1. b. Except as provided in subd. 1. c. and par. (ag), if credits are
8not available to be purchased as provided under subd. 1. a., credits may be purchased
9from a mitigation bank within the same bank service area as the wetland impacted
10by the discharge.
SB169-SSA1,4,1311 c. Except as provided in par. (ag), if credits are not available to be purchased
12as provided under subd. 1. b., credits may be purchased from a mitigation bank in
13the same basin as the wetland impacted by the discharge.
SB169-SSA1,6 14Section 6 . 281.36 (3r) (a) 2. of the statutes is amended to read:
SB169-SSA1,4,1615 281.36 (3r) (a) 2. Participating in the in lieu fee subprogram, if such a
16subprogram is established
under par. (e).
SB169-SSA1,7 17Section 7 . 281.36 (3r) (ag) of the statutes is created to read:
SB169-SSA1,4,2418 281.36 (3r) (ag) The department may, in consultation with the U.S. army corps
19of engineers, allow credits to be purchased from a different mitigation bank than the
20one prescribed under par. (a) 1. or allow mitigation to be done through the in lieu fee
21subprogram rather than by purchasing credits from a mitigation bank if the
22department determines it would better serve natural resource goals, such as
23retaining flood water, improving or restoring wildlife habitat, or more closely
24matching the impacted wetland type.
SB169-SSA1,8 25Section 8 . 281.36 (3r) (b) of the statutes is amended to read:
SB169-SSA1,5,3
1281.36 (3r) (b) Under the mitigation program, mitigation as specified in par.
2(a) 1. and participation in the in lieu fee subprogram, if established under par. (a) 2.
3shall be the preferred types of mitigation.
SB169-SSA1,9 4Section 9 . 281.36 (3r) (e) of the statutes is amended to read:
SB169-SSA1,5,165 281.36 (3r) (e) As part of the mitigation program established under par. (a), the
6department may shall establish an in lieu fee subprogram, under which payments
7are made to the department or another entity for the purposes of restoring,
8enhancing, creating, or preserving wetlands or other water resource features. The
9subprogram must be approved by the U.S. army corps of engineers. The department
10shall establish requirements for calculating the in lieu fee payments. Under the in
11lieu fee subprogram, the wetlands that benefit from the subprogram shall be open
12to the public for hunting, fishing, trapping, cross-country skiing, or hiking or any
13combination thereof, but the department may establish reasonable restrictions on
14the use of the land by the public in order to protect public safety or to protect a unique
15plant or animal community. The subprogram shall be consistent with federal
16regulations.
SB169-SSA1,10 17Section 10 . 281.36 (3t) (g) of the statutes is created to read:
SB169-SSA1,5,1918 281.36 (3t) (g) Financial assurance requirements for the construction of
19mitigation projects by mitigation banks.
SB169-SSA1,11 20Section 11 . 281.36 (3w) of the statutes is created to read:
SB169-SSA1,5,2121 281.36 (3w) Release of credits. (a) In this subsection:
SB169-SSA1,5,2422 1. “Applicant” means the applicant for a wetland individual permit for which
23wetland mitigation is required under sub. (3n) (d) or the proponent of a wetland
24mitigation project required under sub. (3n) (d).
SB169-SSA1,6,2
12. “Bank sponsor" means any public or private entity financially responsible
2for establishing or operating a mitigation bank.
SB169-SSA1,6,53 3. “Compensation site plan" means a comprehensive document prepared by an
4applicant or bank sponsor that provides a thorough description of a proposed wetland
5mitigation project.
SB169-SSA1,6,96 4. “Developing mitigation bank” means a mitigation bank that has not
7completed its mitigation project and that has not yet been established under an
8agreement between the bank sponsor and the department or otherwise approved by
9the department.
SB169-SSA1,6,1110 5. “Estimated credits” means the total number of credits that a developing
11mitigation bank estimates it will have once its mitigation project is constructed.
SB169-SSA1,6,1312 6. “Mitigation banking instrument” means the legal document that governs the
13establishment, operation, and use of a mitigation bank.
SB169-SSA1,6,1714 (b) A developing mitigation bank may sell its estimated credits under the
15mitigation program under sub. (3r) only if the mitigation bank has met the financial
16assurance requirements established by the department under sub. (3t) (g) and,
17except as provided under par. (c), only in accordance with the following schedule:
SB169-SSA1,6,1918 1. No more than 20 percent of the estimated credits after the department
19approves and executes the mitigation banking instrument.
SB169-SSA1,6,2220 2. No more than 65 percent of the estimated credits after the department issues
21a letter of compliance stating that construction and all corrective actions are
22complete.
SB169-SSA1,6,2523 3. No more than 85 percent of the estimated credits after the department
24approves a monitoring report for the mitigation bank or after 2 years have passed
25after construction of the mitigation project is completed, whichever is later.
SB169-SSA1,7,3
14. One hundred percent of the estimated credits after the department approves
2the final monitoring report for the mitigation bank and determines that all
3performance standards identified in the compensation site plan are met.
SB169-SSA1,7,74 (c) The department may authorize a developing mitigation bank to sell its
5estimated credits at a faster rate than the schedule under par. (b) allows if the bank
6provides an additional level of financial assurance or if the mitigation is of a type that
7is less prone to failure, such as wetland preservation or enhancement.
SB169-SSA1,7,148 (d) After the department approves and executes a mitigation banking
9instrument establishing the specifications for a developing mitigation bank, the
10sponsor of the bank may not change the mitigation banking instrument without the
11approval of the department. After the sponsor of a developing mitigation bank
12submits to the department a proposed change to the mitigation banking instrument
13for review, the mitigation bank may not sell any estimated credits under par. (b) until
14one of the following occurs:
SB169-SSA1,7,1915 1. The department approves the change to the mitigation banking instrument,
16and the mitigation bank sponsor and the department adjust the estimated credits
17and make any necessary adjustments to the credit release schedule under par. (b),
18if the department believes these adjustments are necessary based on the change to
19the mitigation banking instrument.
SB169-SSA1,7,2120 2. The department rejects the changes submitted by the mitigation bank
21sponsor, in which case the existing mitigation banking instrument remains effective.
SB169-SSA1,12 22Section 12. 295.60 (8) (dm) 4. of the statutes is amended to read:
SB169-SSA1,7,2423 295.60 (8) (dm) 4. Participation in the in lieu fee subprogram, if such a
24subprogram is established
under s. 281.36 (3r) (e).
SB169-SSA1,13 25Section 13 . Nonstatutory provisions.
SB169-SSA1,8,7
1(1) Using the procedure under s. 227.24, the department of natural resources
2may promulgate the rules necessary to implement s. 281.36 (3t) (g) as emergency
3rules. Notwithstanding s. 227.24 (1) (a), (2) (b), and (3), the department of natural
4resources is not required to provide evidence that promulgating a rule under this
5subsection as an emergency rule is necessary for the preservation of the public peace,
6health, safety, or welfare and is not required to provide a finding of emergency for a
7rule promulgated under this subsection.
SB169-SSA1,8,168 (2) Notwithstanding s. 227.135 (2), the department of natural resources is not
9required to present the statement of scope of the rules necessary to implement s.
10281.36 (3t) (g) to the department of administration for review by the department of
11administration and approval by the governor. Notwithstanding s. 227.135 (2), the
12department of natural resources is not required to present the statement of scope,
13as provided in s. 227.135 (2), to the natural resources board for approval.
14Notwithstanding s. 227.24 (1) (c) and (2), emergency rules promulgated under sub.
15(1) remain in effect until the date that is 2 years after the date of promulgation or
16until the date on which permanent rules take effect, whichever is sooner.
SB169-SSA1,14 17Section 14 . Effective dates. This act takes effect on the 90th day after the
18day of publication, except as follows:
SB169-SSA1,8,2019 (1) The treatment of s. 281.36 (3t) (g) and Section 13 of this act take effect on
20the day after publication.
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