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For information on brownfields tools for local governments, contact:
Barry Ashenfelter
Remediation & Redevelopment Program
608-267-3120

Local governments and contaminated property

Brownfields are abandoned or underused properties where development is hindered by actual or assumed environmental contamination. Local government leadership is often needed to put these properties back into productive use.

Almost every Wisconsin community is home to at least one brownfield site. Repurposing these properties creates business opportunities, increases economic activity, manages environmental risk, improves public health and revitalizes neighborhoods.

State law offers liability relief for local governments that take control of contaminated land. It is possible to obtain environmental assessment and cleanup assistance, and DNR is available to help guide local officials through the brownfield renewal process. . Contact us today for a collaborative "green team" consultation.

Liability (state)

State liability tools

Local governmental liability protections under Wisconsin law

In 1993, the Wisconsin Legislature created an environmental liability exemption for local governmental units (LGUs), including some economic development corporations, in s. 292.11(9)(e), Wis. Stats [PDF exit DNR]. These laws are intended to help LGUs redevelop their brownfields, and it removes most environmental liability for LGUs that acquire property through the following methods:

  • tax delinquency;
  • bankruptcy proceedings;
  • condemnation;
  • eminent domain according to ch.32, Wis. Stats. [PDF exit DNR];
  • escheat;
  • slum clearance or blight elimination;
  • using Stewardship funds; or
  • acquisition from another eligible LGU.

Donation or direct purchase are not considered eliglible acquisition methods.

A local government is not responsible for investigating or cleaning up hazardous substances, including contaminated soil and groundwater, at property acquired through one of the above methods, as long as the LGU:

  • did not cause the contamination;
  • restricts access in order to minimize costs or damages that may result from unauthorized access to the property;
  • samples and analyzes any unidentified substances in containers that are stored above ground;
  • removes and properly disposes of, or properly stores, any hazardous substances in above ground containers that are leaking or likely to leak;
  • immediately reports any discharge of hazardous substances to DNR; and
  • takes any necessary actions to reduce to acceptable levels any substantial threats, if the local government plans to use the property.

If the local government plans to reuse the property, the LGU should work with the DNR and local and state health departments to ensure that the use of the property is protective of public health, safety and welfare.

For more information about this exemption, please see State and Federal Liability Protections for Local Governmental Units (RR-579) [PDF].

Obtaining the exemption

The local governmental environmental liability exemption is statutory – you do not need DNR's approval as long as you acquire it through one of the eligible methods. However, upon request, DNR can provide a fee-based ($700) liability clarification letter that explains how the LGU exemption applies to a specific property. Use our Technical Assistance and Environmental Liability Clarification Request (Form 4400-237) [PDF] to request a liability clarification letter.

Transferability of exemption

The LGU exemption is not transferrable to a private party, but is transferrable between eligible LGUs. If an eligibleLGU acquires property from another exempt LGU, they are not responsible for investigation and cleanup, subject to the same conditions as above.

Slum Clearance and Blight Elimination via state or federal statute

Slum Clearance and Blight Elimination is one of the "exempt" acquisition methods. This property acquisition method is complex and requires an LGU to understand the proposed method before proceeding. Generally, this method requires the LGU to make a slum clearance or blight elimination finding as part of a documented, legal process.

Here are suggestions an LGU should consider before acquiring property through condemnation, or for purposes of slum clearance or blight elimination.

  • The LGU should work with the DNR to determine, in advance, whether the proposed method of acquiring the property satisfies the LGU exemption conditions.
  • The LGU should work closely with the municipal attorney to address options, legal issues and questions.
  • For condemnation or any other proceeding under Ch. 32, Wis Stats., (Eminent Domain), document in writing the steps taken in accordance with the statutory requirements, and the "necessity of taking" for slum and blight elimination.
  • S. 66.1331, Wis. Stats., (Blighted Area Law), describes the planning and acquisition procedures that a city or village should follow for slum clearance or blight elimination purposes.
  • S. 66.1333, Wis. Stats., (Blight Elimination and Slum Clearance), describes the planning and acquisition procedures that a Redevelopment Authority must follow for slum clearance or blight elimination purposes.
  • For any Chapter 66 procedure used to acquire property for purposes of slum clearance or blight elimination, document in writing the steps taken in accordance with statutory requirements. Address procedures used for the slum and blight designation of the property, public input and hearings, the approval of a resolution for slum clearance and blight elimination and approval of a redevelopment plan for the property.
  • Any request for a liability clarification letter from the DNR should be accompanied by the written documentation of all steps followed by the LGU in acquiring the property through condemnation, or for purposes of slum clearance or blight elimination.

Specific examples of past slum clearance/blight elimination acquisitions approved by the DNR include:

  • Approval of a community purchasing a property in a Tax Incremental Financing District (TID), clearly created for the purpose of slum clearance or blight elimination.
  • Approval of a community purchasing a property using funds from a federal Housing and Urban Development Department grant, where the purpose of the acquisition grant, as stated in the application, was slum clearance and blight elimination.
  • Through documented and approved ch.32 or ch. 66, Wis. Stats., proceedings that deal with specific slum clearance or blight elimination determinations.
LGU lessee liability

On a case-by-case basis, DNR staff will review the terms of a lease and provide liability clarifications for such contaminated properties. As a general matter, if the lessee does not operate in a way that could cause a new discharge or exacerbate a prior discharge, the lessee will not be considered responsible for pre-existing contamination on the property.

If the terms of the lease allow the lessee to operate in a way that could cause a discharge, such as using an underground storage tank (UST), the lessee would be responsible for any liability associated with operating the UST. Please see the publication Lease Letters: Clarifying Environmental Liability When Leasing Property (RR-620) [PDF], for more detailed information.

Liability (federal)

Federal liability tools

In addition to state law protections, there are liability protections for LGUs under federal law.

Municipal exemption under CERCLA

According to the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) [exit DNR], commonly known as Superfund, a "unit of state or local government which acquired ownership or control involuntarily through bankruptcy, tax delinquency, abandonment or other circumstances in which the government involuntarily acquires title by virtue of its function as a sovereign" is not considered to be an "owner" or "operator."

For more information on the municipal exemption, please see EPA's web page) [exit DNR].

This exemption does not apply to a municipality that caused the spill. A municipality should ensure that it does not cause or contribute to an actual or potential release at a property that it has acquired involuntarily.

Bona Fide Prospective Purchase & All Appropriate Inquiries

All Appropriate Inquiries (AAI) [exit DNR] is a federal code (40 CFR, Part 312) promulgated by the Environmental Protection Agency (EPA) that establishes standards for conducting a Phase I environmental site assessment. AAI is commonly done prior to commercial or industrial property transactions to assess the likelihood of contamination, and to begin collecting information about the liability for clean-up if contamination is found. Conducting AAI prior to purchase of a property provides a legal defense from CERCLA liability, even if the assessment identifies contamination.

For more information, please visit our Environmental liability page, our Bona Fide Prospective Purchaser page and our AAI page.

Financial resources

Financial resources

The Wisconsin Legislature and the federal government have established numerous brownfield financial incentives for LGUs, including grants and no-interest loans.

Current sources of funding for cleanup and redevelopment projects include:

  • Wisconsin Assessment Monies (DNR);
  • Ready for Reuse grants and loans (DNR);
  • Brownfields grants and Site Assessment Grants (WEDC);
  • EPA brownfield grants – Assessment, Cleanup and Revolving Loan Funds (EPA); and
  • EPA Targeted Brownfields Assessment (EPA).

There are also numerous tax deductions and tax credits that LGUs can point out to interested developers. Detailed information about these funding sources is available at Financial resources for cleaning up & redeveloping contaminated properties.

Local government cost recovery

Under state law, local governments (LGUs) can recover costs of environmental cleanup on properties the LGU acquires under s. 292.11(9)(e)1m, Wis. Stats. If an LGU acquires property through tax delinquency, bankruptcy proceedings, condemnation, eminent domain (according to Ch. 32, Wis. Stats. [PDF exit DNR]), escheat, for slum clearance or blight elimination, by using Stewardship funds or from another eligible LGU, the LGU is authorized to take action to recover costs it incurs in investigating and cleaning up a property on which a hazardous substance has been discharged (s. 292.33, Wis. Stats. [PDF exit DNR]).

A cost recovery action by the local government has to be started within six years after the date the local government completes the remedial activities.

Local governments could use the cost recovery procedures described above instead of or in addition to the existing negotiation and cost recovery procedures laid out in s. 292.35, Wis. Stats. [PDF exit DNR] The negotiation and cost recovery procedures in s. 292.33, Wis. Stats. [PDF exit DNR] authorize LGUs to negotiate with parties responsible for hazardous substance spills to allow those parties to share the costs of, and cooperate in, cleanup action on contaminated land owned by the LGU.

This provision also applies to landfills owned by LGUs. This process is conducted with the help of an umpire but without direct involvement in the negotiations by the DNR or the Wisconsin Department of Justice.

Tax tools

Tools for managing delinquent taxes

Three provisions in Wisconsin statutes provide assistance to local governments for management of delinquent property taxes. These tools can help local governments accomplish environmental cleanup and redevelopment of contaminated properties that are tax delinquent.

Cancellation of delinquent real property taxes on property contaminated by hazardous substances

s. 75.105, Wis. Stats. [PDF exit DNR]

Assignment of foreclosure judgment on property contaminated by hazardous substances

s. 75.106, Wis. Stats. [PDF exit DNR]

Acquisition through the county

s. 75.17, Wis. Stats. [PDF exit DNR]

Environmental liens

The DNR and the EPA encourage LGUs to acquire tax delinquent, contaminated properties and return them to productive uses. Both agencies understand the costs and stigmas associated with environmental liens and intend to support communities that are interested in redeveloping contaminated properties.

On a case-by-case basis, LGUs should contact the DNR and the EPA to discuss liens or past costs that either agency may have spent at a site. The DNR is willing to assist an LGU that wants to work with EPA or other federal agencies to discuss such costs.

Other information

Additional information

The cost of doing nothing

Leaving brownfield properties abandoned, blighted and unused imposes costs on a community. These outlays may include reduced public health and safety, the reduction of area property values, an undermined tax base, visual eyesores that threaten economic viability and more.

Contamination that is ignored can worsen and spread, further diminishing property values and adding to cleanup costs. Sites that sit become significant legal, regulatory, and financial burdens on a community and its taxpayers. The DNR can help communities make progress at brownfield properties.

Salvaging of vacant buildings

Often times, facilities on brownfields have been abandoned or have sat vacant for a number of years, and may be prime projects for salvaging. In addition to valuable building materials and equipment, these buildings can contain hazardous substances, waste oils and other materials that may be harmful to the environment at the site or at a disposal site. In order to ensure that these operations are safe and not a detriment to the community or environment, local governments may elect to enact an ordinance for regulation of salvaging from vacant buildings.

A Model Ordinance for Removal of Salvageable Non-Structural Materials from Vacated Buildings (RR-988) [DOCX], was developed by DNR and stakeholders to address issues for non-structural, non-demolition related salvaging. Municipalities are encouraged to enact a separate demolition ordinance that addresses the unique issues specific to demolition activities.

Demolition of vacant buildings

As an alternative or in addition to salvaging, vacant facilities on brownfields may be demolished. If an LGU intends to demolish a building, there are several issues that need to be considered.

During demolition, contamination that was previously covered by the building or buried just below the ground surface may be exposed. The LGU would have the responsibility to notify the DNR immediately of any previously undetected hazardous substance discharge.

The LGU would also be responsible for taking appropriate action to restrict access to the property in order to minimize costs or damages that may result from unauthorized persons entering the property, such as exposure to the newly discovered hazardous substance discharge. In addition, any substance found in above ground containers must be disposed of according to solid and hazardous waste laws.

If the LGU's act of demolishing the building causes a discharge of a hazardous substance, then the LGU liability exemption would not apply to that discharge. Further, if contaminated soil is uncovered, it may have to be properly stored or disposed of in accordance with Wisconsin law. All requirements for hazardous waste, construction and demolition material disposal, lead abatement and asbestos abatement must also be followed.

Local governmens should ensure that demolition is properly executed, whether by the LGU or private party. Municipalities should familiarize themselves with demolition and LGU liability requirements prior to taking action. As mentioned above, municipalities are encouraged to enact a demolition ordinance that ensures private parties are also undertaking demolition activities in a responsible manner.

Other relevant fact sheets
Last revised: Friday June 17 2016