Clean water clearinghouse
Wis. Stat. § 16.9685
in effect(1) In this section, “credits” means water pollution credits that may be traded under s. 283.84 (1) (f) and (g).
(2) The department shall solicit services from a single clearinghouse to perform the functions under subs. (3), (5), and (6). The department may not enter into a contract with a clearinghouse under this section unless the department determines that all of the following requirements have been met:
(a) The clearinghouse has established or is capable of establishing the contract terms, conditions, and information required to document and enforce transactions under sub. (3) (a) and (c) in a commercially reasonable manner.
(b) The clearinghouse has established a policy that requires a commercially reasonable amount of financial reserves, insurance, reserve credit pool, or other risk management mechanism for use in the event that a party defaults on an agreement under sub. (3) (a).
(c) The clearinghouse has established a commercially reasonable process for soliciting and entering into transactions under sub. (3) (a) and (c).
(d) The clearinghouse has established a clearly defined fee structure describing the manner in which and the amount that the clearinghouse will be paid for facilitating and executing transactions under sub. (3) (a) and (c).
(e) The clearinghouse has the capability to facilitate and execute transactions under sub. (3) (a) and (c).
(f) The clearinghouse has satisfied all other applicable requirements to transact business in this state.
(g) The department of natural resources has approved the contract.
(3) The clearinghouse with which the department enters into a contract under sub. (2) shall be the primary entity responsible for facilitating a financially stable market for the activities described in this subsection and sub. (5) and shall do all of the following:
(a) Produce credits by entering into contracts with other parties to undertake water pollution reduction activities. Each credit generated by a contracting party under this paragraph shall require the party to undertake at least 1.2 times that amount in water pollution reduction activities.
(b) Maintain a bank of credits produced or to be produced under par. (a).
(c) Sell credits produced under par. (a) to any person.
(d) Use methods approved by the department of natural resources to determine the amount of credits that may be produced by various water pollution reduction activities. These methods may include tables and models based on the best available scientific protocols. The clearinghouse may recommend additional methods to the department of natural resources.
(e) When contracting with a party under par. (a), determine the amount of credits that may be produced by the water pollution reduction activities by using the methods approved under par. (d).
(f) When contracting with a party under par. (a), do all of the following:
1. Seek to minimize transaction costs.
2. Seek to maximize the performance of the water pollution reduction activities.
3. Seek to reduce the overall amount of pollutants introduced into the applicable hydrologic area, as defined under s. 283.84 (1m) (e) 2.
4. Require a maintenance schedule approved by the department of natural resources to ensure that the credits are maintained throughout the time for which they are certified under sub. (4).
(g) Before making a credit available for sale for use under s. 283.84 (1) (f), verify the credit by reporting to the department of natural resources any pertinent information regarding the credit and the related water pollution reduction activities, including the location of the activities; the type of practice or technology used; any maintenance schedule; the frequency of inspections; the duration for which the credit is valid; and the amount of credits generated by the water pollution reduction activities.
(h) Establish and maintain a centralized registry of all credits generated and sold in this state and of the verification of all such credits that have been incorporated into permits under ch. 283. The clearinghouse shall maintain an Internet-based platform to facilitate the location of potential credit buyers, available credits, and any other information that will facilitate credit transactions. The clearinghouse shall report this and other pertinent trading information annually to the department and to the department of natural resources. The clearinghouse shall enter into a data-sharing agreement with the department of natural resources to facilitate the clearinghouse’s ability to collect and make publicly available pertinent information relating to water quality improvement programs administered in this state.
(4) No later than 45 days after reviewing the information provided under sub. (3) (g) and (h), the department of natural resources shall certify the amount of credits and the duration of the credits available for sale.
(5) The clearinghouse with which the department enters into a contract under sub. (2) may do any of the following:
(a) Charge fees and use funds received for general program operations of the clearinghouse, including costs associated with facilitating transactions, purchasing credits, and repayment of funds granted or loaned to the clearinghouse.
(b) Hold excess funds in trust for the purpose of making grants, in collaboration with county land conservation offices, the department of natural resources, or the department of agriculture, trade and consumer protection, for targeted water pollution prevention, water pollution remediation, and other environmental enhancement projects that improve the water quality of this state.
(c) Establish a reserve pool of credits produced under sub. (3) (a) and maintain the reserve credit pool for the purpose of maintaining a risk management mechanism under sub. (2) (b).
(d) Conduct research on other innovative approaches to environmental improvement.
(6) Upon the recommendation of the department of natural resources, the department may contract with the clearinghouse under sub. (2) to further the implementation of any adaptive management, water quality trading, or future market-based water quality programs in effect in this state.
(7) The term of a contract entered into under sub. (2) shall be 5 years. The department may terminate a contract entered into under sub. (2) if the clearinghouse fails to meet any of the requirements under this section or rules promulgated under s. 283.84. The department shall give the clearinghouse at least 120 days’ notice of the default and a right to cure before terminating a contract under this subsection.
(8) If the contract with the clearinghouse is terminated or the clearinghouse ceases to function, the department of natural resources shall continue to administer all credit transactions then in effect until a new clearinghouse contract is established or until the terms of the individual parties’ contracts expire.
(9) Before the end of the 4th year of any contract entered into under sub. (2), the department of natural resources shall evaluate the clearinghouse and shall report its evaluation to the department.
Source: WI Statutes (Official Site)URL: https://docs.legis.wisconsin.gov/document/statutes/16.9685Fetched: 10/7/2026