Revises Chapter NR 46, relating to annual adjustments in timber stumpage values and other related changes to the management of forest law.

Amendments to Ch. NR 46 are being requested to update the annual adjustments of timber stumpage values, create a stumpage table based on weight (tons), create a definition of woody biomass, clarify how lands in multiple municipalities will be administered, created a date when management plans must be received for the first review with the July 1 application deadline, change the date when management plans must be signed and returned to DNR, and require that land owners with large accounts have an approved annual allowable harvest.

Amendments to Ch. NR 46 occur on an annual basis to update timber stumpage values. Stumpage values are used to collect the proper yield and severance tax from landowners enrolled in the Managed Forest Law (MFL) and Forest Crop Law (FCL) programs as payment of deferred property taxes when timber is harvested. Stumpage tables based on weight are needed since up to 75% of the mills purchase stumpage based on weight instead of the traditional cord wood volume. Biomass is a coming market, making it necessary to create a definition on how yield and stumpage taxes will be calculated for this timber market.

Additional administrative changes are requested to make the Managed Forest Law program easier to explain, enter and enforce. Changes include:

1. Clarification of how a landowner's forest land located in multiple municipalities is administered under the MFL . 2005 Wisconsin Act 7 allowed for Managed Forest Law lands to cross municipal lines to allow for lands that would not normally be eligible for the program to meet eligibility requirements in conjunction with the adjacent lands in a neighboring municipalities. NR 46 was changed in 2007 to eliminate references to municipal lines. Inadvertently by eliminating the municipal line reference, all lands owned by a single landowner and applied for entry into MFL in one year are required to be placed under the same order number, regardless of where the land is located within the state. The proposed rule change would clarify when the lands requested to be entered in the MFL lie across a municipal boundary line they will be treated as one unit. If the lands requested to be entered in the MFL are in two or more municipalities but do not touch they will be treated as separate units or orders of entry. This change will make the Managed Forest Law program easier for landowners to enter and understand the MFL program.

2.   Create a new draft plan deadline date for certified plan writers (CPW's) to submit a final draft of the MFL forest management plan to the Department for review and modification if necessary prior to the final deadline for processing applications received for the July 1 application deadline. Currently certified plan writers must submit a “completed and approved (by the Department)" management plan to the Department by the 2nd July 1 after the landowner's initial application is received. A high percentage of the CPW prepared management plans need minor adjustments or slight corrections before they can be approved. Creating a draft plan deadline date would allow for any corrections to be made prior to the final deadline. This change to NR 46 would suggest a June 1 draft deadline date and allow “completed and approved" plans to be returned on or before August 15. It would actually increase the time available to CPW's to finalize the work.

3.   Landowners with management plans prepared by DNR foresters must return their signed plans by August 1. A change in this deadline to August 15 is proposed to make the certified plan writer and DNR deadline the same for landowners to turn in completed management plans.

4.   Large block (industrial) landowners must follow an approved management commitment when harvesting their timber on forest lands enrolled in either the MFL or FCL. The management commitment indicates the general management practices that will take place within each timber type without site specific or property wide details. DNR has seen roughly 90% of the large block owners change hands in the last 8 years. Most of the ownership changes have shifted from primary wood using facilities owning the lands they relied on for a portion of their raw materials to investment organizations such as Real Estate Investment Trusts or Timber Investment Management Organizations. Some large block owners accelerate harvest levels to generate higher returns for their share holders, pay down the principle on debt or to extract the maximum value from harvesting in advance of land sales. Other large block landowners take the opposite approach and do not harvest nearly any available timber hoping to build value for a future land sale. These large block landowners are not harvesting and regenerating the forests when timber reaches a biological rotation age and thus the trees fall over and die. Neither extreme is desirable or acceptable for lands enrolled under a tax law.

Sustainable forestry strives to provide an even and relatively constant flow of forest benefits, including timber to society. Forests that do not have a balanced age structure are managed so that some trees are harvested as soon as they reach maturity and some trees are held (i.e. not harvested) until a future date. The net result is that the entire forest or ownership is not harvested within a few years so that nothing is left for the future years. Thereby a forest would harvest equal amount of timber harvested every year, beginning with the oldest timber first. This forestry practice is called managing by an annual allowable harvest and is done to even out of the flow of timber harvested. It is how all public forests are managed to insure long term sustainable benefits to society.

Under the current management commitment requirements, a large block owner enrolled in MFL does not have to manage by an annual allowable harvest. This proposed rule change would require that large block owners prepare an annual allowable harvest similar to public forests to optimize the flow of forest benefits for their lands in the short and long term.

Sections 77.06 (2), 77.82 (1), 77.82 (3), 77.91 (1), and 227.11 (2 )(a), Wis. Stats.

There are no existing or proposed federal regulations to compare with Wisconsin's Managed Forest Law or Forest Crop Law programs.

All private landowners under the Managed Forest Law and Forest Crop Law programs are affected by changes in the stumpage values when they harvest their timber. Landowner may be pay more or less yield and severance tax depending on individual stumpage values. Local municipalities will also be affected by changes in stumpage values since they receive the money collected from landowners for yield and stumpage taxes. Certified plan writers, DNR foresters and landowners are affected by the changes to the deadlines to review management plans and to submit completed work. The changes allow additional time for this work to be completed and provide a date for initial work to be submitted for review. Large (industrial) block owners will be affected by the change to require an annual allowable harvest. This change may receive the most controversial.

5 months.

Kathryn J. Nelson, Forest Tax Section Chief

Department of Natural Resources

FOREST TAX SECTION - FR/4

P.O. Box 7921

Madison, WI 53707-7921

Ph: 608/266-3545

e-mail: Kathryn.Nelson@Wisconsin.gov

Revises Chapters NR 405, 406, 407, 408, 409 and 439, Wis. Adm. Code, incorporating updates from statutory changes, federal rules, providing consistency within the rules, updating outdated language and providing clarification where appropriate.

The main objective of the proposed rule is to update permit language in chapters NR 406 and NR 407 regarding federal Generally Available Control Technology (GACT) rules for hazardous air pollutants. The current rules do not exempt certain source categories from the federal standard as is done on the federal level.

Also, current regulations require that operation permit renewal applications be submitted 12-18 months prior to the expiration date for the operation permit. A statutory revision has changed the 12-18 timeframe to no later than six months prior to expiration of the operation permit.

Biodiesel fuel will be added as an alternate clean fuel, not requiring a permit modification in order for a facility to burn it.

The proposal would also amend current rule language to require two copies of permit application materials be submitted to the Bureau of Air Management. This would include requests for exemptions from permitting, and construction permit waivers. The requirement of two copies would not apply to Asbestos Abatement Notifications which also require a review for construction permit exemption purposes.

Other changes would be for consistency, updating outdated rule language and providing clarification where needed.

The USEPA periodically promulgates corrections, updates and new standards. The Department is required by statute to promulgate similar standards. While some changes may be necessary to accommodate our Administrative Code structure, the state rules will be essentially the equivalent to the Federal rules already in effect. Some substantive changes will proposed, as mentioned above.

Sections 227.11 (2) (a), 285.11 (1), (6) and (16), 285.60 (6), 285.67 and 285.69 (1) (a), Stats. The State Implementation Plan developed under s. 285.11 (6), Stats., will be revised.

A major purpose of this proposed rule package is to amend Wisconsin's regulations to update them from statutory language and to be consistent with federal standards which is required under s. 285.21 (1) (a), Stats.

All facilities that are required to get an Air Pollution Control Permit, and sources regulated by the federal standards will be affected by this proposed rule.

Approximately 150 hours of agency staff time is being budgeted to this proposed rule action.

Joe Brehm

DNR - Bureau of Air Management

PO Box 7921

Madison, WI 53704

608-267-7541

joseph.brehm@wisconsin.gov

Revises Chapter NR 433, relating to Best Available Control Technology (BART), for certain major stationary sources that adversely affect visibility.

The existing state BART rule allows the owner or operator of electric generating units that would otherwise be affected by BART to avoid completing assessments for SO2 and NOx, if the units comply with the Federal Clean Air Interstate Rule (CAIR). However, in light of the vacatur of the Federal CAIR in Federal Court, these electric generating units are now BART affected sources and the owner or operator must complete BART assessments. The objective of the proposed rule changes is to provide additional time and flexibility for compliance with BART for these units due to the size and complexity of SO2 and NOx control equipment for electric generating units. Additionally, the Department may make minor changes to the existing BART rule to improve clarity.

BART requires a source by source engineering analysis to determine what controls are necessary to improve visibility at certain National Parks and other scenic areas. EPA's BART rule allows for emissions averaging programs that would improve visibility more than the application of source-specific BART. The Department is proposing to add that flexibility to the State's existing BART rule. The Board has previously adopted rules that allow emissions averaging or emissions trading for electric power producers including the State's rule to implement CAIR, Reasonably Available Control Technology for NOx and the multi-pollutant control option in the mercury rule. Adding this flexibility to the existing BART rule is consistent with the Board's previous policy.

Installation of BART control equipment for the electric utilities is likely to take longer than for industrial boilers, because the equipment is very large compared to industrial applications, the need to maintain electric reliability, and the power producers also need approval from the Public Service Commission. The proposed rule changes would allow additional time for compliance.

Section 227.11 (2) (a), Stats., gives state agencies general rulemaking authority. Sections 285.11 (1), Stats., gives the Department the authority to develop rules consistent with chapter 285, Stats. Section 285.11 (6), Stats., authorizes the Department to develop and revise the State Implementation Plan for prevention, abatement and control of air pollution.

The proposed changes to the existing BART rule are allowed under EPA's visibility protection rules.

Major electric power producers and large paper mills are the only entities affected by the rule.

Rule development will take between 400 and 500 hours of staff time.

Larry Bruss

101 S. Webster Street

Madison, WI 53703

608-267-7543

larry.bruss@wisconsin.gov

Revises Chapters NR 502 and 518, relating to compost use and facility standards.

This proposed rulemaking would add numerical quality standards for compost derived from source separated yard materials, food scraps and nonrecyclable paper to ch. NR 518, Wis. Adm. Code. It would also modify existing compost facility standards in s. NR 502.12, Wis. Adm. Code to facilitate composting these organic materials to meet the numerical quality standards while maintaining necessary environmental and public health protections.

The Associated Recyclers of Wisconsin (AROW) petitioned the department's Division of Air & Waste for rulemaking to establish compost use standards for compost made from certain well-defined and uncontaminated feedstocks such as food scraps--which may include certain compostable plastic food service items such as plates and cups--yard materials and compostable paper. AROW believes that a lack of numerical compost quality standards has created a significant barrier to increased diversion of these materials from landfills into higher value uses such as compost. Increasing diversion of materials from landfills is an important goal for Wisconsin, in part because composting organic materials results in a net reduction of greenhouse gas emissions. Current rules set siting and operation requirements for compost facilities but do not provide standards for the composted material.

The use of compost derived from mixtures of these source-separated materials is governed by a solid waste low-hazard exemption process. AROW maintains this has held back the expansion of composting in Wisconsin due to the unwieldiness of the exemption process, the uncertainty regarding the quality standards that would be applied in each specific instance, and the stigma associated with the term “low-hazard waste." Minnesota's 10-year-old compost classification system is perceived to have facilitated an expansion in the compost industry's ability to divert organic materials from that state's landfills and create a high-value-added product, “Class I Compost," for which there is strong demand.

Chapters 287 and 289, Wis. Stats.