Applegate-Bader Farm, LLC v. DOR

2021 WI 26

SUPREME COURT OF WISCONSIN
CASE NO.: 2018AP1239

COMPLETE TITLE: Applegate-Bader Farm, LLC,
Plaintiff-Respondent-Cross-Appellant-
Petitioner,
v.
Wisconsin Department of Revenue and Richard
Chandler in his capacity as Secretary of the
Department of Revenue,
Defendants-Appellants-Cross-
Respondents.

REVIEW OF DECISION OF THE COURT OF APPEALS
Reported at 390 Wis. 2d 708,940 N.W.2d 725
PDC No:2020 WI App 7 - Published

OPINION FILED: March 16, 2021
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: November 9, 2020

SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Green
JUDGE: Thomas J. Vale

JUSTICES:
ROGGENSACK, C.J., delivered the majority opinion of the Court,
in which ANN WALSH BRADLEY, REBECCA GRASSL BRADLEY, DALLET, and
KAROFSKY, JJ., joined. HAGEDORN, J., filed a dissenting opinion.
NOT PARTICIPATING:
ZIEGLER, J., did not participate.

ATTORNEYS:
For the plaintiff-respondent-cross-appellant-petitioner,
there were briefs filed by Ryan L. Woody, Catherine Dowie, and
Matthiesen, Wickert & Lehrer, S.C., Hartford. There was an oral
argument by Ryan L. Woody.

For the defendants-appellants-cross-respondents, there was
a brief filed by Anthony D. Russomanno, assistant attorney
general; with whom on the brief was Joshua L. Kaul, attorney
general. There was an oral argument by Anthony D. Russomanno.
 An amicus curiae brief was filed on behalf of Midwest
Environmental Advocates, Madison, by Adam Voskuil, and Clean
Wisconsin, Madison, by Evan Feinauer.

2
 2021 WI 26

NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2018AP1239
(L.C. No. 2016CV48)

STATE OF WISCONSIN : IN SUPREME COURT

Applegate-Bader Farm, LLC,

Plaintiff-Respondent-Cross-Appellant-
Petitioner, FILED
v.
MAR 16, 2021
Wisconsin Department of Revenue and
Richard Chandler in his capacity as Sheila T. Reiff
Clerk of Supreme Court
Secretary of the Department of Revenue,

Defendants-Appellants-Cross-
Respondents.

ROGGENSACK, C.J., delivered the majority opinion of the Court,
in which ANN WALSH BRADLEY, REBECCA GRASSL BRADLEY, DALLET, and
KAROFSKY, JJ., joined. HAGEDORN, J., filed a dissenting
opinion.

ZIEGLER, J., did not participate.

REVIEW of a decision of the Court of Appeals. Reversed and

cause remanded.

¶1 PATIENCE DRAKE ROGGENSACK, C.J. We review a decision

of the court appeals1 that affirmed the circuit court's2 grant of

1Applegate-Bader Farm, LLC v. DOR, 2020 WI App 7, 390
Wis. 2d 708, 940 N.W.2d 725.
2 The Honorable Thomas J. Vale of Green County presided.
 No. 2018AP1239

summary judgment to the Department of Revenue (the Department)

against Applegate-Bader Farm, LLC (Applegate). As it relates to

this appeal, the circuit court and the court of appeals

determined that Applegate did not raise a claim that triggered

judicial review of the Department's decision not to prepare an

Environmental Impact Statement (EIS) under the Wisconsin

Environmental Policy Act (WEPA) when it promulgated the

administrative rule set out in Wis. Admin. Code § Tax

18.05(1)(d) (2015-16) ("the rule").3

¶2 The circuit court held that Applegate had not made a

threshold showing that there was an environmental injury. The

court of appeals affirmed and held that Applegate had not raised

a bona fide claim because it alleged only indirect environmental

effects.

¶3 We conclude that administrative agencies must consider

indirect, as well as direct, environmental effects of their

proposed rules when deciding whether to prepare an EIS.

Therefore, Applegate met its threshold burden even though it
alleged only indirect environmental effects of the rule. On

review of the Department's decision not to prepare an EIS, we

conclude that the Department failed to develop a reviewable

record that demonstrates that it made a preliminary

investigation and reached a reasonable conclusion about the

environmental consequences of its action. Therefore, the

All subsequent references to the Wisconsin Administrative
3

Code are to the 2015-16 version unless otherwise indicated.

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 No. 2018AP1239

Department failed to comply with WEPA. Accordingly, we reverse

the court of appeals' decision that concludes to the contrary.

We remand the WEPA claim to the circuit court with instructions

to remand the WEPA matter to the Department for further actions

consistent with this decision. Additionally, we stay the

enforcement of Wis. Admin. Code § Tax 18.05(1)(d).

I. BACKGROUND

¶4 Applegate operates a farm in southern Wisconsin on

approximately 11,000 acres of land. Roughly 2,000 of those

acres are enrolled in a federal Wetland Reserve Easement

("easement") through the Agricultural Conservation Easement

Program. Applegate's easement is permanent, and therefore it is

unable to use the land subject to the easement for agricultural

purposes. This action arises out of a 2015 revision of Wis.

Admin. Code § Tax 18.05(1)(d) and the effect that that revision

had on landowners with certain conservation easements.

A. Wisconsin Admin. Code § Tax 18.05(1)(d)

¶5 The Wisconsin Constitution provides that land must be
taxed uniformly. Wis. Const. art VIII, § 1. Generally, this

requires that real property is taxed according to its fair

market value. Wis. Stat. § 70.32(1) (2019-20).4 However,

"[t]axation of agricultural land and undeveloped land, both as

defined by law, need not be uniform with the taxation of each

other nor with the taxation of other real property." Wis.

4 All subsequent references to the Wisconsin Statutes are to
the 2019-20 version unless otherwise indicated.

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Const. art. VIII, § 1. Accordingly, agricultural land is

assessed "according to the income that could be generated from

its rental for agricultural use." Wis. Stat. § 70.32(2r). This

is generally referred to as the land's "use value." Non-

agricultural, undeveloped land is assessed at "50 percent of its

full value, as determined under [§ 70.32](1)." § 70.32(4).

¶6 Pursuant to Wis. Stat. § 70.32(2)(c)1i., "agricultural

use" is "defined by the department of revenue by rule and

includes the growing of short rotation woody crops, including

poplars and willows, using agronomic practices." The Department

defines agricultural use in Wis. Admin. Code § Tax 18.05(1). As

it relates to this appeal, paragraph (d) states as follows:

(d) Land without improvements subject to a
federal or state easement or enrolled in a federal or
state program if all of the following apply:

1. The land was in agricultural use under par.
(a), (b), or (c) when it was entered into the
qualifying easement or program, and

2. Qualifying easements and programs shall
adhere to standards and practices provided under the
January 31, 2014 No. 697 version of s. ATCP 50.04,
50.06, 50.71, 50.72, 50.83, 50.88, 50.91, 50.96, or
50.98. The Wisconsin Property Assessment Manual,
authorized under [Wis. Stat. §] 73.03(2a), shall list
the qualifying easements and programs according to the
ATCP provisions, and

3. a. The terms of the temporary easement or
program do not restrict the return of the land to
agricultural use under par. (a), (b), or (c) after the
easement or program is satisfactorily completed, or

b. The terms of the easement, contract,
compatible use agreement, or conservation plan for
that specific parcel authorized an agricultural use,

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 No. 2018AP1239

as defined in par. (a), (b), or (c), for that parcel
in the prior year.
Wis. Admin. Code § Tax 18.05(1)(d). The Department adopted this

version of the rule in 2015.

¶7 Prior to the above quoted definition, the Department

listed easements by name that qualified for agricultural use

taxation. See Wis. Admin. Code § Tax 18.05(e) (1997). Several

of the previously named state and federal easement programs are

no longer in existence. Accordingly, the Department first

revised the agricultural use rule in 2000. See Wis. Admin. Code

§ Tax 18.05(1)(d) and (e) (2000). And, in 2013, the Department

undertook revising the rule again. According to the

Department's 2013 statement of scope:

The proposed rule will address changes in the
listed programs that have occurred since the rule was
enacted and will also identify general criteria for
determining what land that is in federal and state
pollution control and soil erosion programs qualifies
for agricultural use under the subchapter. This will
provide consistency and clear standards for property
owners and assessors.
691B Wis. Admin. Reg. SS 084-13 (July 31, 2013).

¶8 A draft of the 2013 rule included temporary and

permanent easements at both the state and federal level. 696B

Wis. Admin. Reg. CR 13-102 (Paragraph (e) explained

agricultural use as follows: "Commencing with the January 1,

2015 assessment, land without improvements subject to a

permanent federal or state easement or enrolled in a permanent

federal or state program if that land was in agricultural use
under par. (a), (b), or (c) when it was entered into the

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 No. 2018AP1239

easement or program."). During the comment period, the

Department received feedback from several entities, Applegate

included. Some entities, including Applegate, supported the

broader definition that the proposed rule provided. However,

some entities opposed that broad definition; they argued that

those who permanently removed their lands from agricultural use

should not be permitted to take advantage of that agricultural

use definition.

¶9 The final rule appears to permit permanent state or

federal easement holders to claim agricultural use for taxation

only when the terms of an easement "authorized an agricultural

use, as defined in par. (a), (b), or (c), for that parcel in the

prior year." Wis. Admin. Code § Tax 18.05(1)(d)3.b.

B. This Litigation

¶10 In 2016, and after the Department issued the final

version of the rule, Applegate initiated this lawsuit.

Applegate's amended complaint raised nine claims for relief, two

of which were subject to appeal and one of which, the WEPA
claim, is now before us in this case.5

¶11 As it relates to Applegate's WEPA claim, Applegate

alleged the following:

206. The final rule order excluded wetlands
covered by the ACEP and WRE and completely removed
agricultural use value assessment from wetlands
enrolled in the Stream Bank Protection program under
[Wis. Stat. § 23.094]; the Conservation Reserve

5 The outstanding claims for relief remain pending in the
circuit court.

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 No. 2018AP1239

Enhancement program under [Wis. Stat. § 93.70], and
the Non-point Source Water Pollution Abatement program
under [Wis. Stat. § 281.65].

207. The Department ignored and/or failed to
consider evidence in its possession from the
Department of Natural Resources that the exclusion and
removal of wetlands in agricultural conservation
easements from Tax 18.05(1)'s definition of
"agricultural use" causes farmers to destroy sensitive
wetlands by placing cows within the wetlands to
achieve use value assessment.

208. The Department further ignored and/or
failed to consider evidence in its possession from the
[Department of] Natural Resources that the exclusion
of WRP/WRE easements from Tax 18.05(1) is causing
property owners to not enroll their wetlands into the
federal program.

209. The removal and exclusion of wetlands
conserved in agricultural easements from agricultural
use value will result in the further destruction,
degradation and loss of wetlands in this State.

210. The exclusion and removal of wetlands
conserved in agricultural easements from agricultural
use value has and will continue to have a significant
effect upon the environment, thus, necessitating
compliance with WEPA, Wis. Stat. [§] 1.11.

. . . .

212. WEPA is procedural in nature and does not
control agency decision making. Rather, it requires
that agencies consider and evaluate the environmental
consequences of alternatives available to them and
undertake that consideration in the framework provided
by [Wis. Stat. §] 1.11.

. . . .

215. The Defendants failed to fulfill their
independent duties under WEPA, Wis. Stat. § 1.11, to
evaluate the environmental impact of excluding
permanent conservation easements from Tax 18.05(1)(d)
and failed to consider [the] full range of reasonable
alternatives to minimize adverse social, economic and

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 No. 2018AP1239

environmental impacts to the Plaintiff, state
taxpayers, the effect on the State's wetlands and
associated wildlife.

216. The final decisions (and non-decisions) of
the Defendants relative to the passage of Tax
18.05(1)(d) were arbitrary, capricious, erroneous and
contrary to law under WEPA, Wis. Stat. § 1.11, and as
a result the Rule is void ab initio and must be set
aside or remanded with directions.
¶12 The parties filed cross motions for summary judgment.

The circuit court granted Applegate's motion for summary

judgment on the Wis. Stat. ch. 227 claim concluding that the
Department "failed to follow proper rulemaking procedures." The

court granted the Department's motion for summary judgment on

the WEPA claim, holding that Applegate failed to allege facts

that supported its claim of environmental effect of the rule.

Based on its decision that the Department violated rulemaking

procedures of ch. 227, the circuit court vacated the rule.

However, the court stayed its judgment pending appeal.

¶13 Both parties appealed the circuit court's summary

judgment decisions against them, and the court of appeals ruled

in favor of the Department on both claims. As it relates to
Applegate's cross-appeal, the court of appeals affirmed the

circuit court's decision against Applegate. The court of

appeals read our decision in Wisconsin's Environmental Decade,

Inc. v. DNR, 115 Wis. 2d 381, 340 N.W.2d 722 (1983) (WED IV) to

obviate the need for an EIS for indirect environmental effects.

Applegate-Bader Farm, LLC v. DOR, 2020 WI App 7, ¶86, 390

Wis. 2d 708. Because Applegate's claims of environmental harm
were all indirect, the court held that it had not raised a bona

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 No. 2018AP1239

fide WEPA claim. Id., ¶93. The court of appeals remanded the

case to the circuit court to consider the remaining claims for

relief. Id., ¶96.

¶14 Applegate filed a petition for review seeking review

of only the WEPA claim, and we granted review. As explained

below, we conclude that agencies are required to consider

indirect environmental effects when determining whether to

prepare an EIS. We also conclude that the Department did not

satisfy its WEPA requirements because it did not base its

decision not to prepare an EIS (the negative-EIS decision) on a

reviewable record as is required in Wisconsin's Environmental

Decade, Inc. v. Public Service Commission, 79 Wis. 2d 409, 256

N.W.2d 149 (1977) (WED III).

II. DISCUSSION

A. Standard of Review

¶15 This case is before us on appeal of a grant of summary

judgment to the Department. We independently review decisions

granting summary judgment. Sands v. Menard, 2017 WI 110, ¶28,
379 Wis. 2d 1, 904 N.W.2d 789. In so doing, we apply the same

methodology employed by the circuit court, while benefitting

from its discussion and that of the court of appeals. Id.

Summary judgment is appropriate where there is no genuine issue

of material fact and the decision turns on a question of law.

Wis. Stat. § 802.08(2).

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B. The Negative-EIS Decision

¶16 When we review a challenge to an agency's negative-EIS

decision,6 our review is a two-step inquiry that tests the

reasonableness of the agency's decision:

First, has the agency developed a reviewable record
reflecting a preliminary factual investigation
covering the relevant areas of environmental concern
in sufficient depth to permit a reasonably informed
preliminary judgment of the environmental consequences
of the action proposed; second, giving due regard to
the agency's expertise where it appears actually to
have been applied, does the agency's determination
that the action is not a major action significantly
affecting the quality of the human environment follow
from the results of the agency's investigation in a
manner consistent with the exercise of reasonable
judgment by an agency committed to compliance with
WEPA's obligations?
WED III, 79 Wis. 2d at 425.

¶17 If the Department developed a reviewable record and

its negative-EIS decision is reasonable based on that record, we

will uphold its decision. However, before reaching whether the

Department's decision was reviewable, we address the court of

appeals' conclusion that Applegate failed to allege a bona fide

WEPA claim because it alleged that the rule had only indirect

6 Compare Wisconsin's Env't Decade, Inc. v. Pub. Serv.
Comm'n, 79 Wis. 2d 409, 424, 256 N.W.2d 149 (1977) (WED III)
(testing an agency's negative-EIS decision for whether there is
a reviewable record and, whether based on that record the
decision not to prepare an EIS is a reasonable exercise of its
judgment) with Clean Wisconsin, Inc. v. Pub. Serv. Comm'n, 2005
WI 93, ¶190, 282 Wis. 2d 250, 700 N.W.2d 768 ("[I]t is not our
role to evaluate the adequacy of the EIS; we instead evaluate
whether the [agency's] determination that the EIS was adequate
was reasonable.").

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environmental effects. The court of appeals was incorrect. As

we have consistently held, agencies must consider both direct

and indirect environmental effects of their major actions to

determine whether those effects will have a significant effect

on the human environment. Accordingly, we conclude that

Applegate met its threshold burden under WED III, and we

therefore address the record underlying the Department's

negative-EIS decision.7

7 The Department makes the additional argument that
Applegate lacks standing to challenge the Department's negative-
EIS decision. A party has standing to challenge an
administrative decision when "the decision of an agency directly
causes injury to the interest of the petitioner" and if the
"interest asserted is recognized by law." Fox v. DHS, 112
Wis. 2d 514, 524, 334 N.W.2d 532 (1983) (internal quotation
marks omitted). An alleged injury may be sufficiently direct
for the petitioner even when it is "remote in time or which will
[occur only] as an end result of a sequence of events set in
motion by the agency action challenged." Wisconsin's Env't
Decade, Inc. v. Pub. Serv. Comm'n, 69 Wis. 2d 1, 14, 230 N.W.2d
243 (1975) (WED I). Such injuries "must show a direct causal
relationship to a proposed change in the physical environment."
Fox, 112 Wis. 2d at 528. "An allegation of injury in fact
to . . . conservational and recreational interests has been
readily accepted as sufficient to confer standing." WED I, 69
Wis. 2d at 10. However, a WEPA petitioner must "resid[e] in the
area most likely to be affected by an agency action [to] have a
legally protected interest in the quality of their environment."
Fox, 112 Wis. 2d at 531.

"[S]tanding in Wisconsin should not be construed narrowly
or restrictively." WED I, 69 Wis. 2d at 13. We conclude that
Applegate has standing to challenge the Department's negative-
EIS decision. Applegate has alleged an injury to its
conservational interests based on a sequence of events caused by
the Department including certain conservation easements and
excluding others in the definition of agricultural use. If we
accept these allegations as true, Applegate has an injury in
fact to its legally protected conservational interest. See WED
I, 69 Wis. 2d at 17 (taking the alleged facts as true to
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1. Indirect Environmental Effects

¶18 "The purpose of WEPA is to insure that agencies

consider environmental impacts during decision making." State

ex rel. Boehm v. DNR, 174 Wis. 2d 657, 665, 497 N.W.2d 445

(1993). In turn, "[t]he purpose of the EIS is to enable

agencies to take a 'hard look' at the environmental consequences

of a proposed action." Clean Wisconsin v. Pub. Serv. Comm'n,

2005 WI 93, ¶189, 282 Wis. 2d 250, 700 N.W.2d 768. Accordingly,

WEPA, which is set out in Wis. Stat. § 1.11, "constitutes a

clear legislative declaration that protection of the environment

is among the 'essential considerations of state policy,' and as

such, is an essential part of the mandate of every state

agency." WED III, 79 Wis. 2d at 416. WEPA directs that "to the

fullest extent possible," agencies shall include a "detailed

statement" for all "major actions significantly impacting the

human environment." §§ 1.11(1) and (2)(c).8 Significant effects

determine whether Wisconsin's Environmental Decade had
standing).
8 Wisconsin Stat. § 1.11(2)(c) provides in full:

[All agencies of the state shall:]

(c) Include in every recommendation or report on
proposals for legislation and other major actions
significantly affecting the quality of the human
environment, a detailed statement, substantially
following the guidelines issued by the Unites States
council on environmental quality under P.L. 91-190, 42
USC 4331, by the responsible official on:

1. The environmental impact of the proposed
action;
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may include both negative effects and beneficial effects of a

proposed action. See § 1.11(2)(c)6.; see also WED III, 79

Wis. 2d at 429 n.17 (quoting 40 C.F.R. § 1500.6).

¶19 To comply with WEPA's directive, agencies must

consider direct and indirect environmental effects when

determining whether to prepare an EIS. We explicitly so

concluded in WED III. There, we "reject[ed] any

intimation . . . that because the environmental

effects . . . are 'indirect' they need not be considered under

WEPA. There is nothing in the Act to suggest that only direct

environmental consequences need be considered." Id. at 428. In

so concluding, we reasoned that a construction that limited the

Act to direct environmental effects would be contrary to the

statute's plain meaning. Id. at 430.

¶20 As WEPA is based principally on the National

Environmental Policy Act (NEPA), we may look to federal law in

2. Any adverse environmental effects which
cannot be avoided should the proposal be implemented;

3. Alternatives to the proposed action;

4. The relationship between local short-term
uses of the human environment and the maintenance and
enhancement of long-term productivity;

5. Any irreversible and irretrievable
commitments of resources that would be involved in the
proposed action should it be implemented; and

6. Such statement shall also contain details of
the beneficial aspects of the proposed project, both
short term and long term, and the economic advantages
and disadvantages of the proposal.
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our quest to interpret WEPA's requirements. See id. at 419-24.

Under NEPA, "effects" include both direct and indirect effects,

and indirect effects are defined as those that "are caused by

the action and are later in time or farther removed in distance,

but are still reasonably foreseeable." 40 C.F.R. § 1508.8(b)

(2021). Especially pertinent to this case, "[i]ndirect effects

may include growth inducing effects and other effects related to

induced changes in the pattern of land use, population density

or growth rate, and related effects on air and water and other

natural systems, including ecosystems." § 1508.8(b).

Similarly, federal courts have long held that federal agencies

must consider both direct and indirect environmental effects of

major agency actions when determining whether to prepare an EIS.

See, e.g., Sierra Club v. Marsh, 769 F.2d 868, 878 (1st Cir.

1985) (stating that agencies must consider indirect "secondary

impacts").9

9 See also Colorado Env't Coal. v. Dombeck, 185 F.3d 1162,
1176 (10th Cir. 1999) (citing the former regulation, which
mandated an examination of indirect effects); Friends of
Boundary Waters Wilderness v. Dombeck, 164 F.3d 1115, 1128 (8th
Cir. 1999) (explaining that NEPA requires a detailed statement
"from which a court can determine whether the agency has made a
good faith effort to consider the values NEPA seeks to
protect"); Nat. Res. Defense Council, Inc. v. F.A.A., 564 F.3d
549, 558 (2d Cir. 2009) (stating that "[i]n determining the
scope of an EIS, the agency 'shall consider . . . 3 types of
impacts': direct, indirect, and cumulative."); Citizens for
Smart Growth v. Sec'y of Dep't of Transp., 669 F.3d 1203, 1214
(11th Cir. 2012) (discussing the indirect effects of state
action on wetlands).

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 No. 2018AP1239

¶21 Despite what we thought was clear direction, the court

of appeals read part of our decision in WED IV, 115 Wis. 2d 381,

as requiring a WEPA petitioner, such as Applegate, to allege

that an agency action must have direct environmental effects in

order to raise a bona fide WEPA claim. Applegate, 390 Wis. 2d

708, ¶86. Specifically, the court of appeals concluded that

"Applying WED [IV] here, it is clear that [Applegate's] theory

of indirect effects of [Wis. Admin. Code] § Tax 18.05(1)(d) on

how farmers use easement program lands cannot, on its own, give

rise to a bona fide claim under WEPA." Id. The court of

appeals misread WED IV.

¶22 In WED IV, the issue we were tasked with deciding was

"whether the DNR has an obligation to [prepare] an EIS for a

project when investigation, research and public hearing reveal

that the project will have minor impacts on the environment, but

will have possible socioeconomic impacts." WED IV, 115 Wis. 2d

at 395. With that context, our statement on "indirect secondary

effects" becomes more clear.
¶23 We were not referring to indirect environmental

effects, but rather, we were referring to indirect, non-

environmental effects. Namely, we were determining whether the

socioeconomic effects surrounding the DNR's issuance of certain

permits that facilitated the development of a mall necessitated

an EIS when there were only minor, insignificant environmental

effects. We held that, alone, the alleged non-environmental

effects of the project did not necessitate an EIS. However,
that holding does not undermine the principle that indirect
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environmental effects may on their own become "significant" and

necessitate an EIS. See id. at 415 (Bablitch, J., dissenting)

(agreeing with the majority "that in making its determination,

the DNR must review the direct and indirect environmental

effects of the project" and reiterating that "[i]t is clear that

all of the law surrounding WEPA requires that both direct and

indirect effects on the physical environment must be

considered . . . in an EIS decision").

¶24 We again consider federal regulations to aid in our

explanation. Similar to Wis. Stat. § 1.11(2)(c), 40 C.F.R.

§ 1502.16 (2021) describes the required contents of an EIS. The

first requirement is that the discussion shall include "[t]he

environmental impacts of the proposed action and reasonable

alternatives to the proposed action and the significance of

those impacts." 40 C.F.R. § 1502.16(a)(1). Notably, the

federal regulations do not prioritize between direct and

indirect environmental effects. Subsection (b) relates to

indirect (non-environmental) effects. It states:

Economic or social effects by themselves do not
require preparation of an environmental impact
statement. However, when the agency determines that
economic or social and natural or physical
environmental effects are interrelated, the
environmental impact statement shall discuss and give
appropriate consideration to these effects on the
human environment.
40 C.F.R. § 1502.16(b). Subsection (b) is consistent with what

we stated in WED IV. Again, at issue there was whether the DNR
erred as a matter of law in not preparing an EIS despite a

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 No. 2018AP1239

showing of indirect, non-environmental effects coupled with

minor, insignificant, environmental effects. Id. at 395. The

effects in WED IV were socioeconomic in nature. Id. The DNR

determined that the environmental effects were not significant,

and therefore, no EIS was necessary; the non-environmental

effects alone could not have changed that determination.

¶25 Read in context, our statement in WED IV does not

change the requirement of all state agencies to consider direct

and indirect environmental effects of their major actions.

Further, our statement in WED IV does not create a threshold

requirement that WEPA petitioners must allege direct

environmental effects to trigger judicial WEPA review.

Petitioners may, as Applegate did, argue that an agency

abdicated its WEPA obligations by failing to consider indirect

environmental effects in its negative-EIS decision.

¶26 Before reaching our conclusion on the foundation for

this departmental decision, we determine whether Applegate has

alleged facts "constituting a bona fide challenge." See WED
III, 79 Wis. 2d at 424. "[A]llegations of environmental effect

which are patently trivial or frivolous [should not] subject the

agency decision to searching judicial review." Id. It is true

that "there may be cases where it will be obvious to agency and

court alike on the basis of facts that no EIS need be prepared."

Id. However, we are not persuaded that this is a case where it

is "obvious" that an EIS was not necessary. Rather, we conclude

that Applegate has alleged "issues of arguably significant

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environmental import" and therefore, "the agency must show

justification for its negative-EIS decision." Id.

¶27 In its complaint, Applegate alleged several

environmental effects of the new rule. See ¶11, supra. For

example, Applegate alleged that "the exclusion and removal of

wetlands in agricultural conservation easements from [Wis.

Admin. Code §] Tax 18.05(1)'s definition of 'agricultural use'

causes farmers to destroy sensitive wetlands by placing cows

within the wetlands to achieve use value assessment." Applegate

further alleged that "the exclusion of the WRP/WRE easements

from Tax 18.05(1) is causing property owners not to enroll their

wetlands into the federal program," which in turn "will result

in the further destruction, degradation and loss of wetlands in

this State."

¶28 We conclude that Applegate's allegations describe

reasonably foreseeable consequences of the rule classifying

lands in a certain manner.10 Accordingly, Applegate has alleged

facts constituting a bona fide claim to trigger the Department's
actions under WEPA.

2. Reviewable Record

10 Once again, the federal guidelines cited above are
informative. Lest there be any doubt, we conclude that indirect
environmental effects such as "effects related to induced
changes in the pattern of land use, population density or growth
rate, and related effects on air and water and other natural
systems, including ecosystems" may be of a significant nature to
trigger a WEPA analysis. 40 C.F.R. § 1508.8(b). Therefore,
petitioners may allege such effects when challenging a negative-
EIS decision.

18
 No. 2018AP1239

¶29 Having confirmed that indirect environmental effects

are to be considered in deciding whether to prepare an EIS and

that Applegate has made sufficient allegations to constitute a

bona fide WEPA challenge, we now consider the two-step review

that we apply to negative-EIS decisions. Once again, the steps

are: (1) whether the agency has developed a reviewable record,

and (2) whether the record reveals that the agency's

determination not to prepare an EIS was reasonable. We conclude

that, for the reasons discussed below, the Department failed the

first step of this analysis. It did not develop a record from

which we may conclude that its negative-EIS decision was

reasonable.

¶30 For a negative-EIS decision, an agency must "develop[]

a reviewable record reflecting a preliminary factual

investigation covering the relevant areas of environmental

concern in sufficient depth to permit a reasonably informed

preliminary judgment of the environmental consequences of the

action proposed." WED III, 79 Wis. 2d at 425. Although an
agency's record "need not follow any particular form," the

record that is produced "must reveal in a form susceptible of

meaningful evaluation by a court the nature and results of the

agency's investigation and the reasoning and basis of its

conclusion." Id. at 425 n.15. We agree with the Department

that in some circumstances the rulemaking record may be

sufficient to complete the first step of the test. See City of

New Richmond v. DNR, 145 Wis. 2d 535, 547-48, 428 N.W.2d 279

19
 No. 2018AP1239

(Ct. App. 1988). However, in order for an administrative record

to be sufficient, it must satisfy WED III's requirements.

¶31 We have, on several occasions, concluded that an

agency's record was satisfactory despite the record not having

the specific information or investigation that the petitioner

would have preferred. See WED IV, 115 Wis. 2d at 398-402;

Larsen v. Munz Corp., 167 Wis. 2d 583, 605, 482 N.W.2d 332

(1992); Boehm, 174 Wis. 2d at 666-68. However, in each of those

cases, the record revealed that the respective agency's decision

was well reasoned and considered both the relevant environmental

effects and the consequences of those effects. WED IV, 115

Wis. 2d at 398-402 (examining the record); Larsen, 167 Wis. 2d

at 607 ("The procedure followed in this case resulted in a

reviewable record . . . ."); Boehm, 174 Wis. 2d at 667 ("There

was more than adequate documentation in the record reflecting a

good faith investigation into each of the environmental concerns

relevant to this project."). Such a record was not developed

here.
¶32 The Department's rulemaking record spans just over 800

pages. The Department argues that this record is sufficient to

permit judicial review of its negative-EIS decision. We

disagree. Upon a review of the record we notice documents and

information that would signal to an agency that its action may

have environmental effects and that it may need to take a "hard

look" at those potential effects.11 See Clean Wisconsin, 282

For
11 example, the Department received comment and
testimony regarding support for the Wetland Restoration Program
20
 No. 2018AP1239

Wis. 2d 250, ¶189. However, what is not present within this

administrative record is any agency discussion of the

environmental effects of the rule. Nor is there any discussion,

memoranda, e-mail, transcript or other documentation that

explains the Department's rationale behind its negative-EIS

decision. Without anything in the record that demonstrates the

Department's reasoning for its negative-EIS decision, we are

unable to conclude that the Department satisfied the first step

of our required review.

¶33 The Department argues that we may infer that, based on

its record, its negative-EIS decision was reasonable. The

Department cites Larsen for its argument that its rulemaking

record may reveal such implicit conclusions. See Larsen, 167

Wis. 2d at 600-01 ("The DOA's actions reveal an implicit

determination that this lease/purchase technique was not a Type

I action for which an EIS was required."). We are unpersuaded.

The portion of our Larsen opinion that the Department cites is

wholly inapposite to our decision today.
¶34 It is true that at issue in Larsen was the

reasonableness of the Department of Administration's (DOA)

negative-EIS decision. Larsen, 167 Wis. 2d at 598. However, we

divided that issue into several sub-issues. Id. The first sub-

(WRP) (now Wetland Reserve Easements) being included in the
agricultural use definition under the rule. Many of these
comments centered on the environmental benefits of the WRP.
These comments alone should have alerted the Department that it
may need to consider the environmental effects of its rule,
regardless of whether those effects be positive or negative.

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 No. 2018AP1239

issue was whether the DOA's determination that its action was

not a "Type I" action was reasonable. Id. Under DOA rules,

certain actions will always require an EIS (Type I), certain

actions will never require an EIS (Type III), and some may or

may not require an EIS (Type II). Wis. Admin. Code § Adm 60.03.

The DOA concluded that its action was not a Type I action, and

therefore, it was not automatically required to conduct an EIS.

Id. at 595. Rather, the DOA determined that its action was a

Type II action. Id. Accordingly, the DOA conducted an

Environmental Assessment (EA) and subsequently determined that

an EIS was not necessary. Id.

¶35 Insofar as we held that an agency's rulemaking record

may reveal implicit conclusions, we concluded that an explicit

statement from the DOA that the action that the DOA undertook

was not a "Type I" action would "exalt form over substance."

Id. at 600-01. We concluded that the DOA's record implicitly

demonstrated that the action was not a Type I and that an EIS

was not automatically required. Id. However, when we arrived
at the third sub-issue, whether the DOA's negative-EIS decision

was reasonable, we made no mention of implicit determinations.

Instead, we stated:

We conclude the process followed in the instant
case sufficiently satisfied [WEPA] requirements. The
record reveals the agency decision in this case not to
prepare an EIS for this project was informed and
reasonable. It was based on the [Preliminary
Environmental Impact Assessment] and the subsequent
EA. We assume without deciding that the EA was
adequate. Once an agency has made its fully informed
and well-considered decision, a reviewing court may

22
 No. 2018AP1239

not interfere with agency discretion choosing the
action to be taken, or as in this case, the decision
not to prepare an EIS.
Id. at 606-07. It is clear that the record in Larsen, which

included an EA, was satisfactory.

¶36 Larsen does not inform our decision here. We are not

deciding whether an unprecedented agency action falls within

certain environmental gatekeeping criteria that an agency has

set for itself. We are therefore unpersuaded that we may simply

infer that the Department's decision was "fully informed and
well-considered." Additionally, even if an agency's record

could reveal an implicit conclusion that a negative-EIS decision

was reasonable, here, unlike Larsen, we do not have the benefit

of an EA or any similar analysis in the record that reveals that

the Department considered the magnitude of the environmental

effects of the rule. Rather, other than the environmental

issues raised by others, there is nothing in the record that

demonstrates any agency consideration of those issues.

¶37 WEPA is a procedural statute. WED III, 79 Wis. 2d at

416. It is not intended to control agency decision making. Id.
We continue to stand by that general understanding, and it may

be the case that on remand that the Department may conclude that

an EIS is unnecessary. However, we conclude that the record

before us is insufficient to support the Department's negative-

EIS decision.

C. Remedy

¶38 Applegate brought this challenge as a declaratory
judgment action under Wis. Stat. § 227.40. Section 227.40 is

23
 No. 2018AP1239

ordinarily the "exclusive means of judicial review of the

validity of a rule." § 227.40(1). However, because Applegate

is challenging an agency's decision under WEPA, we are not

confined to the declaratory judgment action requirements of

§ 227.40. Rather, we may review the Department's action under

Wis. Stat. § 227.57. See Wisconsin's Env't Decade, Inc. v. PSC,

69 Wis. 2d 1, 230 N.W.2d 243 (1975) (WED I) (applying the

standing principles of the predecessor statutes to Wis. Stat.

§§ 227.52 and 227.53 to a WEPA challenge); see also Wisconsin's

Env't Decade, Inc. v. PSC, 98 Wis. 2d 682, 298 N.W.2d 205 (Ct.

App. 1980) (finding "little difference" between WED III's

reasonableness standard of review and the predecessor statute to

§ 227.57 and reviewing the adequacy of an EIS under that

statute).

¶39 Wisconsin Stat. § 227.57(2) commands that "[u]nless

the court finds a ground for setting aide, modifying, remanding

or ordering agency action or ancillary relief under a specified

provision of this section, it shall affirm the agency's action."
§ 227.57(2). However, "[t]he court shall reverse or remand the

case to the agency if it finds that the agency's exercise of

discretion is . . . in violation of a constitutional or

statutory provision." § 227.57(8). Thereafter, a court may

"make such interlocutory order as it finds necessary to preserve

the interests of any party and the public pending

further . . . agency action." § 227.57(9).

¶40 As discussed above, we have concluded that the
Department failed to comply with WEPA's requirements in regard
24
 No. 2018AP1239

to its negative-EIS decision. Therefore, the Department has

violated its obligation to follow the law. Wis. Stat.

§ 227.57(8). Accordingly, we remand to the circuit court with

instruction to remand to the Department to determine whether an

EIS is necessary and to develop a record from which a court

could determine whether its decision is reasonable. See

Milwaukee Brewers Baseball Club v. DHSS, 130 Wis. 2d 56, 76, 387

N.W.2d 245 (1986) (remanding the cause to the circuit court to

remand to the agency); see also WED III, 79 Wis. 2d at 442-43

(remanding the matter to the Public Service Commission).

Additionally, we stay the enforcement of Wis. Admin. Code § Tax

18.05(1)(d) to preserve the interests of Applegate and the

public pending further agency action. § 227.57(9); see

Milwaukee Brewers Baseball Club, 130 Wis. 2d at 76 (enjoining

further construction of a prison pending the agency's completion

of an adequate EIS).

III. CONCLUSION

¶41 We conclude that administrative agencies must consider
indirect, as well as direct, environmental effects of their

proposed rules when deciding whether to prepare an EIS.

Therefore, Applegate met its threshold burden even though it

alleged only indirect environmental effects of the rule. On

review of the Department's decision not to prepare an EIS, we

conclude that the Department failed to develop a reviewable

record that demonstrates that it made a preliminary

investigation and reached a reasonable conclusion about the
environmental consequences of its action. Therefore, the
25
 No. 2018AP1239

Department failed to comply with WEPA. Accordingly, we reverse

the court of appeals' decision that concludes to the contrary.

We remand the WEPA claim to the circuit court with instructions

to remand the WEPA matter to the Department for further actions

consistent with this decision. Additionally, we stay the

enforcement of Wis. Admin. § Tax 18.05(1)(d) pending the

Department's compliance with WEPA.

By the Court.—The decision of the court of appeals is

reversed and the cause remanded to the circuit court with

instructions.

¶42 ANNETTE KINGSLAND ZIEGLER, J., did not participate.

26
 No. 2018AP1239.bh

¶43 BRIAN HAGEDORN, J. (dissenting). The majority

concludes administrative agencies must consider both direct and

indirect environmental effects when deciding whether to prepare

an Environmental Impact Statement (EIS) under the Wisconsin

Environmental Protection Act (WEPA). Wis. Stat. § 1.11(2)(c)

(2019-20).1 I agree. I part ways with the majority, however,

because Applegate-Bader Farm, LLC (Applegate) did not assert a

bona fide challenge, and therefore the Department of Revenue

(DOR) was not required to prepare an EIS.

¶44 To raise a bona fide challenge, Applegate must

credibly allege that the rule change would significantly affect

the environment's status quo prior to the change. Applegate's

allegations do not come close to credibly alleging that the

policy under the new rule as compared to the old rule would

cause significant environmental impact. I respectfully dissent

because I conclude that the rule amendment was not promulgated

in violation of WEPA.

I. ANALYSIS UNDER WEPA

¶45 Applegate's WEPA claim is rooted in a statutory

procedural requirement imposed on agencies before they take

certain actions that significantly affect the environment.

Wisconsin Stat. § 1.11(2)(c) provides the statutory command

relevant to this case. It requires that "[a]ll agencies of the

state"

1All subsequent references to the Wisconsin Statutes are to
the 2019-20 version.

1
 No. 2018AP1239.bh

[i]nclude in every recommendation or report on
proposals for legislation and other major actions
significantly affecting the quality of the human
environment, a detailed statement, substantially
following the guidelines issued by the United States
council on environmental quality . . . .
§ 1.11(2)(c). In this case, everyone agrees that promulgating

the 2014 amendment to Wis. Admin. Code § Tax 18.05(1) (July

2018)2 was a major action under this statute. The disagreement

here is whether the rule amendment was one "significantly

affecting the quality of the human environment." If the rule

amendment met this standard, WEPA required the agency, as part

of its rulemaking process, to prepare "a detailed statement"

discussing the action's environmental impact, adverse effects,

alternatives, commitment of resources, and benefits, among other

factors. § 1.11(2)(c)1.-6.

¶46 But how is the judiciary to determine when an action

might have a significant effect on the environment such that an

EIS is required? State and federal courts analyzing this kind

of language have understood this statutory call to leave

significant room for agency discretion. To that end, this court

adopted the following approach for so-called negative-EIS

determinations:

We are of the opinion that the test of reasonableness
should be applied to review a negative threshold
decision under WEPA. Complete de novo review would be
akin to treating the entire question of significant
environmental effect as one of law. Where a question
of law is presented, the reviewing court of course
will determine the question independently regardless

All subsequent references to the Wisconsin Administrative
2

Code ch. Tax 18 are to the July 2018 register date unless
otherwise indicated.

2
 No. 2018AP1239.bh

of the standard by which the agency's overall decision
is to be tested. However, the question whether there
is present in a given case a major action
significantly affecting the environment will in
general be a matter of both law and fact. . . .

[Wis. Stat. § 1.11(2)(c)] contemplates the exercise of
judgment by the agency, but that judgment must be
reasonably exercised within the limits imposed by the
Act.
Wisconsin's Env't Decade, Inc. v. PSC, 79 Wis. 2d 409, 423-24,

256 N.W.2d 149 (1977) (WED III) (citation omitted). This

reasonableness standard has governed review of WEPA claims ever

since.3 E.g., Wisconsin's Env't Decade, Inc. v. DNR, 115

Wis. 2d 381, 391, 340 N.W.2d 722 (1983); Larsen v. Munz Corp.,

167 Wis. 2d 583, 600, 482 N.W.2d 332 (1992).

¶47 Moving beyond the statutory command, we went further

in WED III and mandated a process for the express purpose of

enabling judicial review. Namely, an agency must create "a

reviewable record reflecting a preliminary factual investigation

covering the relevant areas of environmental concern." WED III,

79 Wis. 2d at 425 (footnote omitted). We then review that

In the years since our adoption of the reasonableness
3

standard of review for WEPA challenges, federal litigation under
the National Environmental Policy Act (NEPA) shifted its focus
from whether the agency's decision was reasonable to whether it
was "arbitrary and capricious." In Marsh v. Oregon Natural
Resources Council, the Supreme Court explicitly rejected the
reasonableness standard and held that as long as an agency's
decision not to prepare a supplemental impact statement "was not
'arbitrary or capricious,' it should not be set aside." 490
U.S. 360, 377 & n.23 (1989). In most contexts, federal courts
now review an agency's negative threshold determination under
the arbitrary and capricious standard. See Daniel R. Mandelker
et al., NEPA Law & Litigation § 8:7 (2020 ed.). Neither
Applegate nor DOR asks us to revisit our standard of review in
light of this federal development.

3
 No. 2018AP1239.bh

record to determine whether the agency made a "reasonable

judgment" that no EIS is needed. Id. This court recognized,

however, that an agency need not undertake a preliminary

investigation for every single major agency action. We observed

that some alleged environmental challenges would be so "patently

trivial or frivolous" that an agency may reasonably conclude no

preliminary investigation is required to pass them over;

searching judicial review in that circumstance would be

inappropriate. Id. at 424. We explained that where it is clear

that an action will not significantly affect the quality of the

human environment, no bona fide challenge is made and an agency

may reasonably decide not to conduct any further investigation.

Id. at 425.

¶48 DOR has not challenged this framework here, and I

accept these basic principles. Nonetheless, it is worth

candidly observing that the preliminary investigation

requirement is a judicial creation, not a statutory mandate.

While the desire for courts to have something to work with is
understandable, and perhaps necessary, this judicially-imposed

preliminary procedure is a means to review compliance with

actual statutory commands, and should be understood in that

light.

¶49 This case raises the question of whether a bona fide

claim was made, thus requiring a preliminary investigation. In

my view, the majority's approach to this requirement is too

strict, and insufficiently attentive to the fact that we're a
judicially-created step removed from the statutory requirement

4
 No. 2018AP1239.bh

itself. Again, WEPA requires an EIS for major actions

significantly impacting the environment, not a preliminary

investigation into whether an EIS is required.

¶50 This can be seen more clearly when understanding our

two points of comparison. A bona fide challenge must credibly

allege some difference between the baseline environmental

condition before the agency acts and the changed environmental

condition after the agency acts. Analyzing identical text in

the National Environmental Policy Act (NEPA), the Ninth Circuit

aptly explained: "Discretionary agency action that does not

alter the status quo does not require an EIS. In other words,

an EIS is not required in order to leave nature alone." Pit

River Tribe v. U.S. Forest Serv., 469 F.3d 768, 784 (9th Cir.

2006) (cleaned up). One highly regarded treatise elaborated on

the point this way:

In order to determine whether an action is
significant, an agency or a court must have a point of
comparison or "baseline." A new highway, for example,
brings noise and other intrusions into the surrounding
environment. If the environmental baseline is
unspoiled, the impact of the new highway on the
existing environmental baseline can be dramatic. An
example of this is a highway in a native forest. If
the environmental baseline is degraded, the impact of
a new highway will be less severe. An example of this
is a highway in an area substantially developed for
commercial and industrial uses.
Daniel R. Mandelker et al., NEPA Law & Litigation § 8:38 (2020

ed.). Put simply, a bona fide challenge is one that alleges

that the agency action caused some significant change from the

environmental baseline, not merely maintained that condition.

5
 No. 2018AP1239.bh

If it were otherwise, even renumbering an administrative code

provision could be enough to trigger WEPA procedures.

¶51 Additionally, as a matter of consistency with the

statute, a bona fide challenge should also demonstrate that the

agency knew or should have known of the significant

environmental effect at the time it considered the major action.

Unless the agency is presented the information during the

rulemaking process, it may not learn of the alleged effect until

long after the rule has been promulgated. WEPA does not require

invalidation of already-promulgated rules based on information

about the environment that was not known, constructively or

otherwise, before the rule was adopted. Therefore, the bona

fide challenge requirement should demand credible allegations

that the agency knew or should have known of the particular and

potentially significant environmental effects alleged in the

challenger's complaint.

II. APPLIED HERE
¶52 In this case, Applegate's complaint references

documents found in the rulemaking record, but it nevertheless

falls short of stating a bona fide challenge. Even assuming DOR

knew of Applegate's allegations during the rulemaking process,

these allegations, as articulated in the majority's citation to

Applegate's complaint, do not rise to the level where DOR needed

to prepare an EIS or even investigate further.

¶53 In ¶206 of its complaint, Applegate points to the
difference between DOR's initially proposed rule and the rule

6
 No. 2018AP1239.bh

DOR ultimately adopted, noting that the final version excluded

certain lands included in the proposed rule (but not the

original rule). This makes no reference to the baseline

environmental condition, only a proposed rule that was never in

effect.

¶54 In ¶207, Applegate alleges that "the exclusion and

removal of wetlands in agricultural easements" from the rule

"causes farmers to destroy sensitive wetlands." This also

compares the amended rule to the proposed rule and not to the

baseline environmental condition.

¶55 In ¶208, Applegate alleges that the prior (and

possibly current) version of Wis. Admin. Code § Tax 18.05(1) "is

causing" environmental harm. This merely alleges a baseline

environmental condition, without saying anything about the 2014

rule amendment's effect on that baseline condition.

¶56 In ¶209, Applegate again discusses the baseline

environmental condition without identifying a change to it,

stating that both the old and amended versions of the rule
"result in the further destruction, degradation and loss of

wetlands."

¶57 Finally, in ¶210, Applegate alleges that the

"exclusion and removal of wetlands conserved in the agricultural

easements from agricultural use value has and will continue to

have a significant effect." This paragraph seems to undercut

any challenge that the rule amendment caused a significant

change to the baseline environmental condition because it
alleges a continuous effect under both the old and amended

7
 No. 2018AP1239.bh

versions of the rule. Again, no effort is made to show how the

2014 amendment caused a significant change in the preexisting

baseline condition.

¶58 These allegations at most support the proposition that

promulgating the old version of Wis. Admin Code § Tax 18.05(1)

might have had some significant effect on the environment. And

perhaps it did. But promulgation of the old version of § Tax

18.05 is not the challenged action; the 2014 amendment to that

rule is. The environmental condition under the old version of

§ Tax 18.05 is the baseline condition against which the 2014

amendment's effect must be compared. Nowhere does Applegate

explain how the 2014 amendment to § Tax 18.05 altered that

baseline environmental condition (or for that matter how DOR

should have evaluated such an effect). Therefore, I conclude

Applegate failed to state a bona fide WEPA challenge.4

4 A review of DOR's rulemaking record confirms that DOR
reasonably declined to conduct a preliminary investigation into
the environmental effect Applegate now alleges. Applegate
points us to two studies in the record detailing how the old
version of Wis. Admin. Code § Tax 18.05(1) caused property taxes
on agricultural wetlands to increase. The first, published on
April 11, 2000, explained that the taxation scheme of the former
§ Tax 18.05(1) incentivized farming rather than preservation of
wetlands. The second, prepared by Wisconsin Wetlands
Association, listed the percentage of wetlands assessed as
agricultural land in five counties, ranging from 38.27 percent
to 88.86 percent. From these, Applegate argues that § Tax
18.05(1)'s exclusion of certain lands from favorable tax
treatment available for other lands must significantly affect
the environment because it incentivizes farming of wetlands
rather than enrolling them in certain preservation programs.
But as with the allegations in Applegate's complaint, these
studies also fall short of stating a bona fide challenge because
they do not show that the agency action——the 2014 rule
amendment——caused any significant change from the environmental
baseline.
8
 No. 2018AP1239.bh

III. CONCLUSION

¶59 I agree with much of the majority opinion. Its

conclusion that indirect environmental effects may trigger

WEPA's EIS requirement is a correct statement of law. However,

Applegate failed to assert a bona fide challenge because it did

not compare the effect of the previous version of the rule to

the amended rule. Therefore the rule amendment was not

promulgated in violation of WEPA.5

5While I need not address the remedy Applegate is entitled
to, I nonetheless harbor some skepticism of the majority's
decision to remand to the circuit court with directions to
remand to DOR to develop a reviewable record. The 2014
amendment to Wis. Admin. Code § Tax 18.05(1) was promulgated——
and its rulemaking record closed——more than six years ago. Our
statutes explain that once a rule is promulgated, "the exclusive
means of judicial review of the validity of a rule . . . shall
be by an action for declaratory judgment as to the validity of
the rule." Wis. Stat. § 227.40(1) (emphasis added). The
Uniform Declaratory Judgments Act defines the scope of our
declaratory power "to declare rights, status, and other legal
relations." Wis. Stat. § 806.04(1). It's perplexing,
therefore, that the majority does not issue a declaration, but
instead orders a stay and a remand to DOR. If there is a
justification for the majority's approach, it is not presented
in the court's opinion or in its citations to authority. So far
as I can tell, no court has done what the majority does here.

9
 No. 2018AP1239.bh

It's also unclear what the majority thinks DOR will
accomplish on remand. Ordering development of a reviewable
record of a negative-EIS determination made more than six years
ago risks impermissible post hoc rationalization of agency
action. See Dept. of Homeland Sec. v. Regents of the Univ. of
Cal., 140 S. Ct. 1891, 1909 (2020) (noting that justifications
provided after the agency has acted "can be viewed only as
impermissible post hoc rationalizations and thus are not
properly before us"); see also Flung v. LIRC, 2017 WI 72, ¶105,
376 Wis. 2d 571, 898 N.W.2d 91 (A.W. Bradley, J., dissenting)
(referring to the rule against post hoc rationalization as
"well-established precedent on administrative agency review").
I suspect DOR will simply compile some relevant documents and
conclude no EIS was required using largely the reasoning
presented to us in briefing. If this is all WEPA requires, so
be it. But I find this an odd approach to ensuring an agency
made a reasonable determination that no EIS was required years
earlier.

10
 No. 2018AP1239.bh

1