(See PDF for image) STATE OF WISCONSIN
DEPARTMENT OF JUSTICE
BRAD D. SCHIMEL
Paul W. Connell
Deputy Attorney General
Delanie M. Breuer
Chief of Staff
114 East, State Capitol
P.O. Box 7857
Madison, WI 53707-7857
December 8, 2017
Secretary Laura Gutiérrez
Department of Safety and Professional Services
1400 East Washington Avenue
Madison, WI 53708
Dear Secretary Gutiérrez:
¶ 1. You have asked for my opinion concerning the application of 2011 Wisconsin Act 21 (“Act 21”) to a rule regulating fire sprinkler systems in multifamily dwellings, Wis. Admin. Code § SPS 361.05(1) as amended by Wis. Admin. Code § SPS 362.0903 (collective, referred to as “Sprinkler Rule” in this opinion). The Department of Safety and Professional Services (the “Department”) enforces and administers the Sprinkler Rule. You raise the following two questions: (1) is the Sprinkler Rule a “standard, requirement, or threshold” that is more restrictive than the relevant provisions in the Wisconsin Statutes, and (2) even if the Sprinkler Rule is a “standard, requirement, or threshold” that is more restrictive than the relevant Wisconsin Statutes, may the rule still be enforced since it was lawfully promulgated before the enactment of Act 21?
¶ 2. I have determined that the Sprinkler Rule contains a requirement that is more restrictive than the Wisconsin Statutes. I have further concluded that Act 21 prohibits the Department from enforcing or administering the Sprinkler Rule even though the rule was lawfully promulgated before Act 21 was passed. There is little question that the answers to the questions will have a substantial impact on other rules and regulations involving the construction of new buildings and the state’s building code, in general. However, given the history leading to the passage of Act 21, the analysis below is unavoidable. It will be up to Wisconsin’s policymakers to resolve the issues raised by the intersection of administrative rules enacted prior to Act 21 and the law itself.
¶ 3. My analysis begins with the fact that every agency’s rulemaking authority is defined by statute. Section 227.10 imposes a duty upon each state agency to promulgate as a rule “each statement of general policy and each interpretation of a statute which it specifically adopts to govern its enforcement or administration of that statute.” Wis. Stat. § 227.10(1). ¶ 4. Although chapter 227 imposes this affirmative duty on an agency to promulgate rules, the chapter does not by itself “confer rule–making authority” or “augment” any authority unless the Legislature “expressly provide[s]” such authority, whether in chapter 227 or otherwise. Wis. Stat. § 227.11(1). In short, this statutory language is not a broad mandate for agencies to govern via rulemaking. ¶ 5. Only one section in chapter 227 “expressly provide[s]” rule-making authority: Section 227.11 “expressly confer[s]” four specific categories of rule-making authority upon agencies. First, an agency may, within certain parameters, promulgate rules that “interpret[ ] the provisions of any statute enforced or administered by the agency.” Wis. Stat. § 227.11(2)(a). Second, an agency may “prescribe forms and procedures in connection with any statute enforced or administered by it.” Wis. Stat. § 227.11(2)(b). Third, an agency authorized to “exercise discretion in deciding individual cases may formalize the general policies evolving from its decisions.” Wis. Stat. § 227.11(2)(c). Fourth, an agency may promulgate rules as a prospective measure in limited circumstances. See Wis. Stat. § 227.11(2)(d). Other than these four specific categories, agencies have no rule-making authority. ¶ 6. Until 2011, Wisconsin courts generally granted state agencies broad rulemaking authority, holding that an agency may promulgate rules “fairly implied from the statutes under which it operates.” Brown Cty. v. Dep’t of Health & Soc. Servs., 103 Wis. 2d 37, 48, 307 N.W.2d 247 (1981). For example, in 2000, the Wisconsin Court of Appeals upheld a rule by the Department of Natural Resource as “consistent with [DNR’s] implied authority . . . to grant or deny permanent boat shelter permits” even though “the legislature did not expressly authorize promulgation” of the rule in question. Grafft v. Dep’t of Nat. Res., 2000 WI App 187, ¶¶ 9, 14, 238 Wis. 2d 750, 618 N.W.2d 897.
¶ 7. Act 21 completely and fundamentally altered this balance, moving discretion away from agencies and to the Legislature. The act resulted from a special session of the Wisconsin Legislature called by Governor Scott Walker for the express purpose of reducing “burdensome regulation.” Exec. Order No. 1, Governor Scott Walker, Relating to a Special Session of the Legislature (Jan. 3, 2011). In an informational paper explaining the bill that would become Act 21, the Governor’s first example of the need for regulatory reform was the Sprinkler Rule. See Press Release, Governor Scott Walker, Regulatory Reform Info Paper (Dec. 21, 2010). The paper explained that the Sprinkler Rule requires “sprinkler systems in all multifamily dwellings except certain townhouse units even though state law explicitly stated that sprinkler systems were required” only in dwellings with more than 20 units. Id. Legislation was needed, according to Governor Walker, because “an agency may not create rules more restrictive than the regulatory standards or thresholds” established by the legislature. Id. To this end, the Governor specifically called for “[l]egislation that states an agency may not create rules more restrictive than the regulatory standards or thresholds provided by the legislature[ ].” Id. The Governor also emphasized the need for a statutory provision that specifically states that statutory provisions relating to “general duties or powers . . . do not empower the department to create rules not explicitly authorized in the state statutes.” Id.
¶ 8. Among other reforms, Act 21 specifically added Wis. Stat.
§ 227.11(2)(a)1.–3. to impose specific limitations upon agency authority. These limitations make clear that agencies do not possess any inherent or implied authority to promulgate rules or enforce standards, requirements, or thresholds and that agencies only possess authority “that is explicitly conferred on the agency by the legislature.” See Wis. Stat. § 227.11(2)(a)1., 2.
¶ 9. This means that statements of “legislative intent, purpose, findings, or policy” found in statutory or nonstatutory provisions do not confer or augment agency rulemaking authority. Wis. Stat. § 227.11(2)(a)1. Likewise, agency rulemaking authority does not arise from statutory provisions “describing the agency’s general power or duties.” Wis. Stat. § 227.11(2)(a)2. ¶ 10. Furthermore, and most importantly for this opinion, statutory provisions containing “a specific standard, requirement, or threshold” do not “confer on the agency the authority to promulgate, enforce, or administer a rule that contains a standard, requirement, or threshold that is more restrictive than the standard, requirement, or threshold contained in the [relevant] statutory provision.” Wis. Stat. § 227.11(2)(a)3. ¶ 11. Additionally, under Wis. Stat. § 227.10(2m), agencies are forbidden from implementing or enforcing “any standard, requirement, or threshold” unless it is “explicitly required or explicitly permitted by statute or a rule promulgated in accordance with this subchapter.” See generally OAG–01–16 (May 10, 2016). ¶ 12. Taken as a whole, the amendments enacted by Act 21 prevent agencies from relying on any supposed inherent or implicit authority such as “general powers or duties,” Wis. Stat. § 227.11(2)(a)2., or statements of “legislative intent, purpose, findings, or policy,” Wis. Stat. § 227.11(2)(a)1., when enforcing, administering, or promulgating rules. For rulemaking, agencies may only rely on statutes that “explicitly confer[ ]” authority to make rules. Wis. Stat. § 227.11(2)(a)1., 2. And outside of rulemaking, agencies may only implement or enforce standards, requirements, or thresholds that are “explicitly required or explicitly permitted by statute or by a rule.” Wis. Stat. § 227.10(2m).