In 2017 Wisconsin Act 67 (effective Nov. 28, 2017), the legislature has enacted new statutory provisions affecting local governments’ consideration of conditional use permit (CUP) applications.

Background

These provisions appear to have been adopted as a response to the Wisconsin Court of Appeals’ 2016 decision in AllEnergy Corp. v. Trempealeau County Environmental & Land Use Committee, which upheld the county’s denial of a CUP for the mining and transport of silica sand used for hydraulic “fracking.”

The Wisconsin Supreme Court upheld the appeals court decision in 2017, but a split decision signaled that legislation was needed to clarify this area of the law.¹

During a hearing on the CUP application, members of the public expressed concerns regarding adverse impacts to air quality, water quality, and natural habitat from the operation of the mine. The applicant took issue with the committee’s reliance on public comments, and argued that it was entitled to the CUP as a matter of law because it “met the conditions of the ordinance and agreed to be bound by the additional 37 conditions of approval adopted by the committee.”

The court upheld the county’s denial of the application, deferring to the county’s findings and rejecting the applicant’s arguments that it had offered substantial evidence in support of the ordinance criteria and that it was entitled to the CUP.²

Conditional Use Provisions

While unsuccessful on appeal, AllEnergy’s appellate arguments apparently gained traction with the Legislature.

The new conditional use provisions in Act 67 mandate that a CUP must be issued where the applicant meets, or agrees to meet, standards specified in a local ordinance. Such standards must be “reasonable” and “measurable.”

In addition, the new law requires that there be “substantial evidence” in the record to support the denial of a CUP. The definition of “substantial evidence” excludes evidence deemed to be merely the “personal preference” or “speculation” on the part of a person opposing the CUP.

It remains to be seen whether the new statute preserves the flexibility of CUPs as a versatile tool of local land use regulation, or whether the statute essentially establishes a mandate for local governments to approve most CUP applications.

But it is clear that the new standards confine the exercise of local discretion over conditional uses, and provide new grounds for appeal by the applicant or opponent of a proposed land use.

New Statutory Standards and ‘Conditional Use’

Local Wisconsin governments are authorized to adopt a zoning ordinance under Wis. Stat. sections 60.61 (towns), 62.23(7) (cities and villages) and 59.694 (counties). Statutory authority to approve “special exceptions” to the zoning ordinance is widely recognized by case law as the basis for local zoning authorities to grant CUPs.

Prior to the 2017 legislation, however, the statutes made scant reference to “conditional uses” as such. 2017 Wis. Act 67 amends the zoning enabling statutes for towns, cities, villages, and counties, respectively, to establish the definition of a “conditional use” and to specify standards for the grant or denial of a CUP.

In the case of town zoning, Wis. Stat. section 60.61 has been amended to create new sub. (4e), which provides in pertinent part:

Conditional use permits. (a) In this subsection:

1. “Conditional use” means a use allowed under a conditional use permit, special exception, or other special zoning permission issued by a town, but does not include a variance.

2. “Substantial evidence” means facts and information, other than merely personal preferences or speculation, directly pertaining to the requirements and conditions an applicant must meet to obtain a conditional use permit and that reasonable persons would accept in support of a conclusion.

(b) 1. If an applicant for a conditional use permit meets or agrees to meet all of the requirements and conditions specified in the town ordinance or those imposed by the town zoning board, the town shall grant the conditional use permit. Any condition imposed must be related to the purpose of the ordinance and be based on substantial evidence.

2. The requirements and conditions described under subd. 1. must be reasonable and, to the extent practicable, measurable and may include conditions such as the permit's duration, transfer, or renewal. The applicant must demonstrate that the application and all requirements and conditions established by the town relating to the conditional use are or shall be satisfied, both of which must be supported by substantial evidence. The town's decision to approve or deny the permit must be supported by substantial evidence.

Identical language is codified in newly created Wis. Stat. section 59.69(5e) for counties, and Wis. Stat. section 62.23(7)(de) for cities and villages. The legislature’s specifications for CUP conditions and the evidentiary standard for grant or denial of a CUP, are explored below.

Conditions Specified in a Local Ordinance

The Act creates two requirements for CUP conditions. A condition (whether appearing in an ordinance or sought to be imposed as a condition of a particular application) must be “reasonable” and “to the extent practicable, measurable.”

The new subsections provide examples of “reasonable and measurable” conditions, including “the permit's duration, transfer, or renewal.” The use of the phrase “such as” preceding the list of example conditions signals that these categories are not exhaustive. The Act does not expressly invalidate broad and general public welfare-type standards for the grant of a CUP, such as a requirement that the proposed conditional use “preserves the uses, values and enjoyment of other property in the zoning district.”

By introducing the “reasonable” and “measurable” requirements for CUP conditions, along with the requirement that conditions imposed on an applicant must be based on “substantial evidence,” the Act expands the potential bases for challenging the denial of a CUP. For example, denial of a CUP based on a generic finding that the proposed conditional use is “contrary to the public welfare” could be challenged on the basis that the requirement is too vague to be reasonable or that it has no objective yardstick for compliance.

The ‘Substantial Evidence’ Standard

Under the Act, a CUP must be granted if an applicant “agrees to meet” the conditions of the local ordinance or imposed by the local zoning board. This language provides substantial, additional grounds to challenge the denial of a CUP, and indeed could be interpreted as establishing a statutory presumption in favor of CUP issuance based on the applicant’s stated agreement to meet application-specific requirements. However, a local zoning board remains free to determine that the applicant – while “agreeing to meet” conditions – has not provided “substantial evidence” that the conditions are or will be satisfied.

The Act provides that “[t]he applicant must demonstrate that the application and all requirements and conditions … relating to the conditional use are or shall be satisfied which must be supported by substantial evidence.” The Act defines “substantial evidence” to mean “facts and information, other than merely personal preferences or speculation, directly pertaining to the requirements and conditions an applicant must meet to obtain a conditional use permit and that reasonable persons would accept in support of a conclusion.” Thus, it is the applicant’s burden to objectively demonstrate its ability to comply with the requirements and conditions of a CUP.

The Act also provides that the local zoning board’s decision to approve or deny the permit must be supported by substantial evidence. Under the common law definition, “substantial evidence” is “evidence of such convincing power that reasonable persons could reach the same decision as the board.”³ Under that standard of review, courts will not substitute their judgment for that of the zoning board. “If any reasonable view of the evidence would sustain the [zoning board’s] findings, they are conclusive.”⁴

Under the new statutory language the definition of “substantial evidence” is modified such that the local zoning authority may not rely on “personal preferences” or “speculation.” These terms have the potential to result in less deferential review by courts, particularly if a CUP is denied on the ground that the applicant cannot meet broad public welfare type standards. For example, a finding that a proposed use does not “preserve the values, uses and enjoyment of existing properties in the district,” if based solely on opinion testimony of neighbors, may be deemed to fall short of the substantial evidence test. A court might conclude that this finding, if not supported by a “measurable” criterion such as an appraiser’s opinion of property values, is merely the neighbors’ expression of a “personal preference.”

Zoning Authority’s New Burden

Act 67 preserves the discretion of zoning boards to deny a permit application upon a finding that the applicant cannot meet or agree to meet the standards imposed by the ordinance.

However, by requiring that a local zoning authority’s decision to deny the permit must be supported by “substantial evidence,” the new statute arguably establishes a presumption that a CUP should be issued if the applicant “agrees to meet” applicable conditions.

The statutory changes place a burden on the zoning authority to show that any condition imposed is supported by substantial evidence, reasonable and “measurable,” to the extent practicable.

While the burden of proof remains on the applicant to prove that all CUP requirements and conditions will be satisfied, the new statutory standard creates new opportunities for an applicant to successfully appeal the denial of a CUP or to appeal particular conditions of a grant of a CUP, based on the quality of the evidence cited by the zoning authority.

This article was originally published on the State Bar of Wisconsin’s Real Property, Probate and Trust Law Blog. Visit the State Bar sections or the Real Property, Probate and Trust Law Section web pages to learn more about the benefits of section membership.

Endnotes

¹ See AllEnergy Corp v. Trempealeau Cty. Env. & Land Use Comm., 2017 WI 52, 375 Wis. 2d 329, 895 N.W.2d 368; See also Joe Forward, Splintered Supreme Court Upholds Denial of Sand Fracking Permit, WisBar News (May 31, 2017).

² AllEnergy Corp. v. Tempealeau Cty. Env. & Land Use Comm., ___ WI App ___, ¶ 8, 370 Wis. 2d 261 (Ct. App.2016).

³ AllEnergy Corp., at ¶ 9 (quoting Oneida Seven Generations Corp. v. City of Green Bay, 2015 WI 50, ¶ 43, 362 Wis. 2d 290, 865 N.W.2d 162).

⁴ AllEnergy Corp., at ¶ 8 (quoting Clark v. Waupaca Cty. Bd. of Adj., 186 Wis. 2d 300, 304, 517 N.W.2d 782 (Ct. App. 1994)).