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WisDOT Land-Division Authority is Rightly Limited

The Daily Reporter
November 16, 2006

The expiration of an administrative rule suspension this past June and the adjournment of the state legislative session in July have quietly resurrected an attempt by the Wisconsin Department of Transportation to expand its authority regarding land-division review.

Trans 233 is an administrative rule, initially established in 1956, that gives WisDOT authority to regulate certain land divisions. WisDOT amended Trans 233 in 1999 and 2001, significantly expanding the types of land divisions subject to WisDOT review and identifying new conditions WisDOT may require in exchange for approval. Previously, Trans 233 applied only to a “subdivision” as such term is defined in Wisconsin Statutes Chapter 236. The amended rule expanded WisDOT’s scope of review to cover all land divisions (including by certified survey map and condominium plat). It also defined “improvements” broadly so as to prohibit not only buildings but also pavement, signs, etc., from highway setback areas. In order to obtain an exception to the setback restrictions, the amended rule required landowners and utilities to waive compensation rights if WisDOT later requires relocation of the improvements due to future highway expansion (“special exception condition”). These changes prompted the Wisconsin Builders Association and 10 other organizations to file a lawsuit challenging WisDOT’s authority to establish the amendments.

In January 2004, the Joint Committee for Reviewing Administrative Rules temporarily suspended enforcement of the Trans 233 amendments to give the state Legislature time to examine the concerns raised by the business community and pass corrective legislation. In June 2005, the Wisconsin Court of Appeals confirmed that WisDOT authority is limited to subdivisions only and not all land divisions; however, the court rejected the claim that the setback restrictions constitute a facial regulatory taking. In other words, the “mere enactment” of the setback restrictions is not a taking. It is important to note that the court referenced three other legal theories for challenging a government regulation as a taking; however, the court declined to address whether the setback restrictions or the special exception condition might result in a taking under any of these theories, stating that the other theories had not been specifically raised by the parties.

Clarifying WisDOT’s Authority
In January 2005, bills were introduced to the Assembly and Senate in order to clearly define “improvements” as buildings only and to clarify that WisDOT authority under Trans 233 does not extend to lands separated from a state highway by a service road or other unplatted lands. Significant support for the bills appeared to exist in the JCRAR committee, which reported that no surrounding Midwestern states regulate setbacks along state highways and that the permitting delays and increased cost of development arising from the Trans 233 amendments will be detrimental to job growth in the state. Unfortunately, the JCRAR suspension expired in June 2006 and the legislative session ended in July 2006 without action on these bills.

The debate over Trans 233 is just one example of a crucial policy issue facing not only Wisconsin but our country as a whole, namely the struggle to identify needed services, establish appropriate levels of government oversight tailored to provide such services, and implement such services in a manner that is both effective and efficient. Counties and municipalities have statutory authority to review all land divisions and are best suited to do so in accordance with their individual growth plans. WisDOT already governs direct access to state highways using the driveway permit process under Trans 231. In light of the current budget crunch, the duplicative review structure resulting from the Trans 233 amendments seems wasteful. The court’s recognition that WisDOT’s statutory authority to review land divisions is limited to “subdivisions” that abut state highways is welcomed.

The setback issue and the related special exception condition remain a significant concern. WisDOT argues that it must prohibit improvements within state highway setbacks in order to plan for future highway expansion in a cost-effective manner. Unfortunately, the cost of implementing the Trans 233 amendments, the time and money spent by developers in the permitting and design process, and the negative impact on job growth is likely to far outweigh the few dollars saved in reducing WisDOT relocation costs for highway expansion. In assuming significant future highway expansion, WisDOT may be counting its chickens before they hatch. If we don’t collectively work to create an environment that is conducive to economic development, then there may not be a need for future highway expansion.

Whether WisDOT has the legal authority to establish regulations and whether they should are two different questions. Only the courts can answer the first. It remains unclear whether the setback restrictions and special exception condition would survive a further legal challenge. The most efficient and appropriate resolution to the Trans 233 debate is for the Legislature to address the policy question by reintroducing corrective legislation such as 2005 Assembly Bill 10 and 2005 House Bill 10, and to follow through by passing such measures into law.

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