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Update on Great Lakes Compact

Environmental Law Update Thomas P. McElligott, Lauren G. Harpke

If your facility submitted an application for interim approval under the Wisconsin statutes implementing the Great Lakes-St. Lawrence River Basin Water Resource Compact (the "Compact"), you are probably wondering what will happen next. In short, the answer is "not much just yet." As discussed below, the recently enacted budget bill extended the permitting and automatic approval deadlines to December 8, 2011. In the meantime, a facility that previously submitted the interim approval registration form will be "grandfathered in" and allowed to continue to withdraw water from the Great Lakes Basin. However, the Wisconsin Department of Natural Resources ("DNR") requests that such facilities create and maintain records regarding the water usage at the facility. Any additional requirements imposed by the Wisconsin statutes are currently on hold, awaiting promulgation of implementing regulations.

By way of background, 2007 Wisconsin Act 277 created Wis. Stats. § 281.346(4m), which prohibited any person from withdrawing water averaging more than 100,000 gallons per day from the Great Lakes Basin during any 30-day period unless the withdrawal was authorized by a general permit, individual permit or interim approval. Upon adopting this provision, DNR assumed it would have several years to draft and adopt legislative rules implementing the new statutory requirements. Due to the unexpectedly rapid progression of events, however, DNR was unable to draft and adopt the necessary administrative rules prior to the Compact's effective date of December 8, 2008.

DNR recognized soon thereafter that it would not have the regulatory framework in place to issue the required withdrawal permits prior to the December 8, 2008 deadline. To avoid placing companies in violation of the Wis. Stats. § 281.346(4m) permit requirement, DNR utilized the "interim approval" method authorized under Wis. Stats. § 281.344(5m). Interim approval may be granted for a Great Lakes Basin water withdrawal if that withdrawal is registered with DNR and DNR does not, or cannot, issue the appropriate permit in response. In the fall of 2008, DNR mailed registration forms for "interim approval" to all facilities DNR believed to have water intake systems capable of withdrawing more than 100,000 gallons per day from any water body comprising part of the Great Lakes Basin. Any facility that submitted the registration forms should have been granted interim approval and grandfathered in at the specified withdrawal amount.

As a result of the interim approval process, DNR managed to meet the December 8, 2008 deadline by which time all covered facilities were required to have a permit or interim approval for withdrawals. Upon extinguishing that fire, however, DNR found itself facing yet another impossible deadline: The statutes also required DNR to issue automatic notices of coverage for withdrawals operating under interim approvals within one year after the Compact's effective date. Again, DNR found itself without the requisite administrative rules to accomplish this task prior to the statutory deadline.

In response, Wisconsin's recent biennial budget bill, 2009 Wisconsin Act 28, made several revisions to the Wisconsin Statutes implementing the Compact. Notably, Act 28 extended the permitting and automatic approval deadlines from December 8, 2008 to December 8, 2011. This much-needed extension will give DNR time to promulgate administrative rules regarding the various requirements under the Compact, including registration and reporting requirements, permitting, water use, water conservation and efficiency, water loss, public participation and the new statutory fees added by Act 28.

Since there are a number of topics for which administrative rules are required to implement the Compact legislation, DNR will likely roll them out in phases, with the first rule package probably relating to the registration and reporting requirements. DNR anticipates that all necessary administrative rules will be promulgated by calendar year 2011 and plans to establish a Web site for interested parties to track progress of rule promulgation. Additionally, DNR will send notification to applicants regarding updated rule status.

In the meantime, DNR has requested, through the interim approval letter, that all applicants track their water use and maintain appropriate records. If an applicant operates a high-capacity well, this monitoring and recordkeeping requirement is nothing new and should already be a part of standard operating procedures. There are, however, other types of withdrawals that were not previously obligated to report such water usage, and those companies should be aware that water usage tracking is now required.

Aside from the water tracking requirement, further progress on implementing the Great Lakes Compact's various requirements has been stalled, awaiting adoption of administrative rules. We will continue to monitor DNR's rulemaking efforts.

For additional information, please contact Tom McElligott at 414277-5531 /, Lauren Grahovac Harpke at 414-277-5183 / or your Quarles & Brady attorney.