Vol. 78, No. 9, September
Achieving Environmental Excellence: Green Tier Legislation
New Green Tier legislation promotes and rewards
environmental performance while providing regulatory flexibility on
everything from land development to manufacturing. Help your business,
industry, or municipal clients determine if participating in this
voluntary program is right for them.
by Linda H. Bochert & Mary
hat do American Transmission
Company, MEGTEC Systems, Veridian Homes, Roundy's, the Wisconsin
Builders Association Development Council, Holsum Dairy, and Scrap Metal
and Automotive Recyclers have in common? All are pioneers in a new
approach to environmental performance called Green Tier.
Green Tier is the name of a Wisconsin law that is designed to promote
and reward "superior environmental performance" by businesses,
industries, and municipalities..1 One of
several recent enactments intended to streamline environmental
regulation and reform Wisconsin's regulatory climate, Green Tier merges
two ideas: 1) moving beyond traditional "command and control" to add an
incentive-based, market approach to managing environmental risk, and 2)
providing positive public recognition to entities that commit to
superior environmental performance and continual improvement.
Implemented by the Wisconsin Department of Natural Resources (DNR),
the law applies to the entire range of environmental programs - air,
wastewater, stormwater, solid and hazardous waste, wetland, and
waterways. Participation is entirely voluntary.
The impetus for Green Tier came in June 2000, when then-DNR Secretary
George Meyer charged a diverse group of interested parties to develop a
program that encourages businesses and municipalities to exceed
environmental requirements but is not based on mandating standards in
law. In April 2004 Gov. Jim Doyle signed the resulting legislation,
providing a new legal framework designed to create economic value and
improve environmental outcomes.
Green Tier builds on lessons learned in the Environmental Cooperation
Pilot Program (ECPP), which was enacted in 1997.2 ECPP environmental leaders include We Energies,
Cook Composites and Polymers, Packaging Corporation of America, Madison
Gas & Electric, Northern Engraving Corporation, and 3M. The
cooperative agreements these companies signed with the DNR reduced the
need to mine more than 1,325 railroad cars of coal by recovering and
reburning high-energy ash; reduced hazardous air pollutants 85 percent
by using ultraviolet screening and a single DNR permit to cover multiple
company facilities; and achieved environmental performance 7.5 times
better than the established emissions standard by using innovative,
rather than mandated, technologies. ECPP companies report positive
experiences, and all continue to participate under five-year
Linda H. Bochert, U.W.
1972, is a partner in Michael Best & Friedrich LLP, Madison, and a
member of the firm's Land and Resources Practice Group. She practices
primarily in environmental/regulatory, administrative, and land use law.
She was a member of the group that developed the Green Tier
|Mary Woolsey Schlaefer, Minnesota 1989, is the executive
assistant in the Department of Natural Resources. She leads the DNR's
implementation of Green Tier. The authors thank Mark McDermid for his
invaluable assistance with this article.
How Green Tier Works
A Green Tier applicant makes a three-part commitment to 1)
systematically exceed the minimum environmental requirements; 2)
continually improve environmental performance; and 3) work in a
transparent manner by providing the DNR and the public ongoing access to
information affirming the commitment to performance.
In return, the DNR provides positive incentives, such as reduced
frequency of inspections and reporting; a single point of contact in the
DNR; limited exposure to state civil enforcement if environmental
violations are identified and remedied; incentives the Tier II
participant (explained below) identifies and negotiates with the DNR, so
long as incentives are proportional to the environmental performance;
and public recognition of these environmental leaders for their
commitment to superior environmental performance and improvement.
There are two tiers of Green Tier participation, each with its own
eligibility criteria and commitment requirements.
Tier I. The Tier I applicant's environmental
compliance record must satisfy the following eligibility criteria:
1) no criminal conviction in the prior five years for an
environmental law violation that resulted in substantial harm or
presented an imminent threat to public health or to the environment;
2) no civil judgment in the prior three years for an environmental
law violation that resulted in substantial harm to public health or to
3) no lawsuit filed by the state or citation issued by the DNR in the
prior two years for an environmental law violation.
The eligible Tier I applicant must commit to 1) implement an
environmental management system (EMS), such as ISO 14001 or an
equivalent, 2) conduct an annual audit of the EMS, and 3) report the
results to the DNR. If the EMS audit identifies violations and the Tier
I participant timely corrects them, the DNR and the Department of
Justice (DOJ) are prohibited from bringing an enforcement action to
collect civil forfeitures for the violations.
Tier II. An applicant may start at Tier II;
participation in Tier I is not a prerequisite. Tier II eligibility
requirements are more demanding:4
1) no criminal conviction in the prior 10 years for an environmental
law violation that resulted in substantial harm or presented an imminent
threat to public health or to the environment;
2) no civil judgment in the prior five years for an environmental law
violation that resulted in substantial harm to public health or to the
3) no lawsuit filed by the state or citation issued by the DNR in the
prior two years for an environmental law violation.
The eligible Tier II applicant must have an EMS in place and commit
to 1) negotiate a contract with the DNR specifying the superior
environmental performance it will deliver and the incentives the DNR
will provide, 2) conduct an environmental compliance audit, and 3)
report the results to the DNR. The Tier II environmental compliance
audit is broader than the Tier I audit of the EMS - the Tier II audit
looks at the environmental compliance of the facility itself, not just
whether there is an EMS in place that is properly used. If the Tier II
audit identifies violations and they are timely corrected, the DNR and
the DOJ are prohibited from bringing an enforcement action to collect
Charters. Unique multi-party agreements called
"environmental results charters" can commit similarly situated
businesses, industries, or groups to a common set of superior
environmental performance actions.5
In keeping with the important public policy goal of transparency,
Tier I and Tier II applications and proposed charters are subject to
public comment prior to DNR approval, and participation includes public
access to information and opportunity for public involvement.
Green Tier's Possibilities
Green Tier provides the opportunity for meaningful environmental
results and business value. The key question is: will we be able to
capitalize on it?
Green Tier provides incentives not only to go beyond compliance in
regulated areas but also to address unregulated areas as well, such as
water and energy consumption. This creates the opportunity to manage
impacts on air, land, and water in an integrated, holistic way, rather
than using the traditional, piecemeal approach of separate regulatory
programs for each aspect of the environment. Charters allow groups of
companies and municipalities to collaborate on environmental objectives
like reduction in stormwater runoff or greenhouse gas emissions and to
manage environmental risk across sectors, supply chains, or communities.
Green Tier also offers the potential for improved environmental results
by encouraging regulated entities to invest where environmental benefits
are greatest and by encouraging regulators to focus enforcement on poor
Green Tier creates business value by encouraging more effective
investment. Green Tier's public recognition and unique incentives can
create business value that positively affects the bottom line. Tier II
participants can negotiate incentives that add value, reduce costs and
time, or help solve operational or technological problems. Examples
include: opening a landfill to recover ash as a fuel when the law would
otherwise require that the landfill remain closed; creating a corporate
emissions cap to allow movement of machines and processes without new
permits; eliminating reporting of information not routinely used by the
DNR; allowing a company to manage and store material more efficiently by
treating a manufacturing by-product as material rather than waste;
accepting more effective, less costly control technology in place of one
specified in a rule; and accepting self-verification of performance.
Depending on one's perspective, public involvement is either an
opportunity or a threat. Transparency does not mean a Green Tier
participant must give its neighbor a seat on the board of directors. It
does mean that program participation is subject to public notice, as
well as public meetings, and contract or charter discussions are open to
public input. The participant must provide basic performance information
to the public in an annual report to the DNR, documenting that the
participant did what it said it would. From these basics, each
participant can adapt its Green Tier involvement to meet business and
Madison Gas & Electric plots its performance and shares the
results with its community group. The company has distinguished itself
in the eyes of many people by listening thoughtfully and acting
responsibly. Cook Composites went from a situation in which neighbors
threatened to "call the cops" because the company wasn't responding to
one in which neighbors worked with the company to solve problems. Cook
regularly holds facilitated meetings with neighbors and community
leaders to discuss environmental issues and work on common problems such
as odor and noise. Cook attests that when managers listen and respond,
genuinely trying to solve problems, the relationship shifts from an
adversarial one to a collaborative one.
Current Applicants Range from Developers to Dairies
At this writing, the DNR has received seven Tier I applications and
one Tier II application and is working on three charters.
American Transmission Company (ATC) constructs, owns, and operates
electric transmission lines throughout Wisconsin. ATC's Tier I goal is
to maximize environmental performance through leading-edge
best-management practices and creation of an environmental stewardship
program. "We are optimistic about the success of Green Tier," says Rita
Hayen, ATC Environmental Manager. "The relationship-based changes to
regulation will benefit business as well as the environment." A decision
on ATC's application is imminent.
Holsum Dairies, a 3,600-head dairy farm in eastern Wisconsin, focused
its Tier I application on improving nutrient management and storage, and
surface and groundwater protection. Holsum plans to build environmental
sensitivity, protection, and restoration into its dairy design and
operation through its environmental management system. Holsum's
application was publicly noticed on April 6, 2005, and a decision on its
application is expected in August.
MEGTEC Systems manufactures air flotation dryers and air pollution
control equipment used in many industries, including printing, paper
making, automotive, and metals coating. MEGTEC's Tier II proposal is to
work with its supply chain on environmentally preferable products and
practices, encourage those businesses to implement their own
environmental management systems, and share environmental improvement
results with others. "Green Tier and Wisconsin's environmental
excellence programs recognize our efforts to treat the environment with
respect. We fundamentally believe these programs help make Wisconsin a
good home for our company," says Chris Campbell, MEGTEC's EHS Manager.
MEGTEC has completed its participation contract as the first participant
in Tier II of the Green Tier program. MEGTEC's application is in the
public comment phase.
The proposed Green Tier Charter with the Wisconsin Builders
Association Development Council Compliance Corp. Inc.6 will commit participating developers and builders
to a uniform, high standard of environmental performance on issues such
as erosion control and stormwater management. The Development Council's
hope is that this commitment to quality will be well-received by
municipalities, encouraging expedited and flexible state and local
approval processes for developers and builders meeting the charter
commitments. In a similar vein, Veridian Homes is working with Dane
County and the cities of Madison and Sun Prairie to develop a charter of
standards and measures of performance for its developments. That charter
is now being shared with the governing bodies of those municipalities
before it goes through formal public notice and comment.
Fundamental Questions May Define Green Tier's Success or
Green Tier's newness means a lot of unanswered questions - from broad
issues of how to maximize the environmental benefits Green Tier can
provide to details of just how the procedures should work. Answers to
three fundamental questions will likely determine the success or failure
of Green Tier.
First, will the spirit of Green Tier take hold? Collaborative
innovation between the DNR and regulated entities is not new, but for
Green Tier to work a broad culture of collaboration, trust, and
risk-taking shared by the DNR, the regulated community, and the public
Second, will transaction costs be manageable? One key to this is what
form public involvement will take and how effective it will be.
Third, will incentives be meaningful enough? Incentives the DNR can
provide will depend, in part, on how flexible the U.S. Environmental
Protection Agency (EPA) will be in federally regulated areas.
Environmental Cooperation Pilot Program experience is encouraging;
available incentives include expedited permitting, reduced reporting
frequency, ability to add new equipment without permitting delay, and
facility-wide emissions caps. Yet, the most valuable incentive may be
one provided by the marketplace - if Green Tier certification
becomes a meaningful way for an entity to positively distinguish itself
and enhance its competitive position.
The 'Limited Liability' Audit Program
The Green Tier legislation includes a related but separate program -
the Environmental Improvement Program - to encourage regulated entities
to conduct and act on the results of environmental compliance
audits.7 Modeled on the EPA's Audit
Policy,8 this legislation limits civil
forfeiture exposure for regulated entities that conduct an environmental
compliance audit, report the results to the DNR, and timely remedy
identified violations. An entity need not be a Green Tier participant to
be eligible for the Environmental Improvement Program; however, the
regulated entity must notify the DNR at least 30 days before conducting
the audit to qualify for the protections the law provides. Sometimes
incorrectly described as "audit immunity," this program provides a
limitation on, but not immunity from, civil forfeitures. Rather than
enforcement through prosecution by the state DOJ, violations are subject
to civil forfeitures through a DNR-issued citation enforceable by the
local district attorney. The civil forfeiture amount is limited to no
more than $500 per violation, regardless of the number of days of
violation.9 This is significant because the
maximum civil forfeitures under normal circumstances range from $5,000
to $25,000 per day for each violation.10
In a marketplace that increasingly values corporate responsibility
and environmental stewardship, Green Tier provides a framework to
improve environmental performance, increase public involvement and
trust, and reduce costs. This new approach emphasizes incentives and
rewards, rather than regulations and punitive actions. If it works, we
should all be winners.
1Wis. Stat. § 299.83.
2Wis. Stat. § 299.80.
3Wis. Stat. § 299.83(3).
4Wis. Stat. § 299.83(5).
5Wis. Stat. § 299.83(7e).
6Available at dnr.state.wi.us.
7Wis. Stat. § 299.85.
9Wis. Stat. § 299.85(7)
Wis. Stat. §§ 283.91, 285.87, 289.86, 299.97.