SS 043-20 Scope Statement

Statement of Scope

Department of Natural Resources

Rule No.:

CF 12-19

Relating to:

Clean Water Fund Program, Ch. NR 162, Wis. Adm. Code

Rule Type:

Permanent

1. Finding/nature of emergency (Emergency Rule only):

The rule will be proposed as a permanent rule.

2. Detailed description of the objective of the proposed rule:

Objective 1: To update areas of ch. NR 162 that are either: (a) no longer in line with federal regulations, or (b) need efficiency, accuracy, or clarity changes.

Objective 2: To update the code to reflect statutory changes. Revisions to Wis. Stats. as part of the 2015-17 Biennial Budget (2015 Wis. Act 55) took effect on the same day that previous revisions to ch. NR 162 became effective, causing some parts of the code to be obsolete on the day it was published.

Objective 3: To codify new policies and procedures related to streamlining the Clean Water Fund Program (CWFP) loan processes.

Objective 4: To lay the groundwork for implementing more innovative funding mechanisms to assist municipalities in financing non-traditional projects and some of DNR’s high priorities, such as reducing phosphorus in watersheds.

Additional improvements to ch. NR 162 may be identified by the Advisory Committees that will be convened to assist in the rule revision process.

3. Description of the existing policies relevant to the rule, new policies proposed to be included in the rule, and an analysis of policy alternatives:

A.

Existing policies relevant to the rule

Revisions to ch. NR 162 must maintain compliance with the following existing federal requirements, but the revised rule may include minor changes related to these requirements:



Comply with all federal crosscutting authorities and require loan recipients to comply with crosscutters. Crosscutting authorities include laws and Executive Orders such as the Davis-Bacon Act, Archaeological and Historic Preservation Act, Safe Drinking Water Act, Endangered Species Act, and the National Historic Preservation Act.



Require borrowers to meet requirements regarding fiscal sustainability plans, the use of American iron and steel, federal wage rates, and the solication of disadvantaged business enterprises (DBEs) for participation in CWFP projects.



Provide a specified amount of financial assistance for projects meeting the federal Green Project Reserve requirement.

B.

New Policies Proposed to be Included in the Revised Rule

Through discussions with the CWFP’s partners, customers, and Advisory Committees, new policies will be identified for inclusion into ch NR 162, including some policies related to financing projects that are non-traditional. DNR may propose new funding mechanisms for adaptive management and water quality trading, and possibly other types of non-traditional wastewater and storm water projects.

Many of the existing policies in ch. NR 162 are based on federal requirements that continue to evolve. For example, the federal government expanded the maximum loan term for projects funded through the CWFP. As a result, s. 281.59(9)(ag), Wis. Stats., was created to allow the CWFP to establish a longer loan term and the current 20-year maximum term. The new rule may include details regarding the implementation of a 30-year term.

C.

Analysis of Policy Alternatives

One alternative to handling federal and state law changes through code revision is to use the CWFP’s annual Intended Use Plan for our federal capitalization grant to propose new policies. This alternative leaves customers wondering what changes are coming for the next financing year and is less vetted than a code revision.

4. Detailed explanation of statutory authority for the rule (including the statutory citation and language):

Section 281.58(2), Wis. Stats., contains the statutory authority for the Department of Natural Resources to promulgate rules for administration of the CWFP.

The Environmental Improvement Fund, which includes the CWFP is administered cooperatively by the Wisconsin DNR and Department of Administration (DOA). Revisions to ch. NR 162 must also be coordinated with both ss. 281.58 and 281.59, Wis. Stats., to avoid conflict with these statutes and DOA policies and procedures.

Clean Water State Revolving Funds, which is what Wisconsin’s CWFP is, are authorized by and administered under the Federal Water Pollution Control Act, 33 U.S. Code §§1250 et seq., as amended.

5. Estimate of amount of time that state employees will spend developing the rule and of other resources necessary to develop the rule:

The program estimates that approximately 750 hours of existing staff time will be needed to complete the rule revision process. This time includes drafting rule language, holding the public hearing, and providing information to the Natural Resources Board and the legislature.