CR 22-045 Rule Text

The statement of scope for this rule, SS 043-20, was approved by the Governor on April 20, 2020, published in Register No. 773A3 on May 18, 2020, and approved by the Natural Resources Board on October 28, 2020. This rule was approved by the Governor on insert date.

ORDER OF THE STATE OF WISCONSIN NATURAL RESOURCES BOARD

REPEALING AND RECREATING RULES

The Wisconsin Natural Resources Board proposes an order to repeal and recreate NR 162 relating to the Clean Water Fund Program.

CF-12-19

Analysis Prepared by the Department of Natural Resources

1. Statute Interpreted: Sections 281.58 and 281.59, Wis. Stats.

2. Statutory Authority: Section 281.58(2), Wis. Stats., authorizes the department to promulgate rules necessary for the execution of its responsibilities under the Clean Water Fund program. This program provides financial assistance to municipalities for water infrastructure projects including wastewater treatment plants, collection systems, and storm water best management practices.

3. Explanation of Agency Authority: This order implements s. 281.58 (2), Wis. Stats., which requires the department to promulgate rules that are necessary for the proper execution of its responsibilities under s. 281.58, Wis. Stats. This order provides the rules for municipalities and the department in determining eligibility of an applicant and of a project for Clean Water Fund Program financial assistance, preparing and submitting a complete financial assistance application, processing a financial assistance application, documenting the costs of a project, preparing financial assistance agreements, developing and maintaining a user charge system, including specific provisions in financial assistance agreements, following procurement laws, amending a financial assistance agreement, cooperating with the Board of Commissioners of Public Lands (BCPL) to provide interest rate subsidy on a loan taken out by an applicant from BCPL for a wastewater or storm water construction project, scoring and ranking projects, allocating available funds, developing and publishing project priority and funding lists, amending a financial assistance agreement, determining the amount of subsidy to be provided to a municipality for their project, and requesting and processing disbursement of financial assistance.

4. Related Statutes or Rules: Concurrent with this effort, the department is also repealing and recreating ch. NR 166, Wis. Adm. Code, relating to the Safe Drinking Water Loan Program. The Clean Water Fund Program and the Safe Drinking Water Loan Program are part of the Environmental Improvement Fund.

5. Plain Language Analysis: Revisions to ch. NR 162, Wis. Adm. Code, relating to the Clean Water Fund Program, bring the code in line with statutory changes that occurred after the current version became effective, clarify eligibility criteria, streamline processes, revise the scoring system, and update implementation issues since the rule was last revised. No new significant changes to the program result from the rule revisions. The main topics for revision include:

—Definitions – adds, modifies, and removes various definitions to add clarity to several sections of the code.

—Types of financial assistance – adds language to state that the statutes allow funds from the federal capitalization grant to be used as allowed under federal law, including providing principal forgiveness.

—Funding list – adds language to state that a funding list will be created annually for projects of municipalities competing for principal forgiveness.

—Eligible projects/activities – updates language to incorporate current practices.

—Dates for ITA/PERF submittals – revises language to be flexible for implementing potential changes to the application process after 2021 Wisconsin Act 112 removed some of the barriers to streamlining the process from the statutes (ss. 281.58 and 281.59, Wis. Stats.).

—Application process – requires applicant use of the online intent to apply and application systems, revises language to be flexible for implementing potential changes to the application process after 2021 Wisconsin Act 112 removed some of the barriers to streamlining the process from the statutes (ss. 281.58 and 281.59, Wis. Stats.), and modifies requirements for application submittals, including removing submittals no longer needed, adding clarity for certain submittals, revising requirements for intermunicipal agreements, and adding a design life calculation worksheet requirement for municipalities requesting loan terms greater than 20 years since language was added to the statutes allowing terms of up to 30 years.

—Deadline for signing a financial assistance agreement – modifies the language regarding the timeframe within which a municipality must sign a financial assistance agreement to provide flexibility for potential modifications to the loan process timeline.

—Legal opinion on land ownership and easements – codifies the policies the department has developed over time regarding what needs to be addressed in the legal opinion regarding who owns the land on which a project is being constructed.

—Procurement and disbursement processes – adds language to clarify what documentation is expected when from municipalities for these processes.

—Loan interest rates – revises the statutory references and some language to bring the code in line with the statutes which were changed the same day the last revision to ch. NR 162, Wis. Adm. Code, took effect.

—Amendments – revises the financial assistance agreement amendment process as it was previously based on availability of present value subsidy, which was removed from the statutes, and clarifies the type of financial assistance that may be provided in an amendment.

—Hardship financial assistance – removes all language regarding hardship financial assistance since the statutes sunset the program.

—Storm water projects – removes storm water language from subchapter II and creates a new subchapter III for storm water projects to clarify procedures for urban runoff projects.

—Interest rate subsidy projects – adds language to clarify using this type of assistance for a storm water project and revises the explanation of the interest rate subsidy calculation to clarify the steps taken to determine that amount of subsidy that is provided for a project.

—Priority scoring system – revises system to incorporate language currently included in the Clean Water Fund Program’s intended use plan, adds clarifying language for projects in which regionalization of wastewater treatment is taking place, provides additional explanation of the reevaluation request process, and shifts the priority when two projects on the priority list have the same score from higher population municipalities to lower population municipalities.

6. Summary of, and Comparison with, Existing or Proposed Federal Statutes and Regulations: All state programs must comply with the federal requirements for the program, as outlined in 33 USC 1251 to 1376 and 33 USC 1381 to 1388. This rule complies with the requirements of the Federal Clean Water Act.

7. If Held, Summary of Comments Received During Preliminary Comment Period

and at Public Hearing on the Statement of Scope:

8. Comparison with Similar Rules in Adjacent States: Each state implements the Clean Water Act consistently with the associated state statutes and federal requirements. Every state revolving fund program throughout the country has unique features, but all of the programs are designed to meet federal Clean Water Act requirements. Each state has a unique priority scoring system based on state priorities but consistent with federal priorities. The U.S. Environmental Protection Agency reviews program implementation to ensure consistency with the federal requirements.

9. Summary of Factual Data and Analytical Methodologies Used and How Any Related Findings Support the Regulatory Approach Chosen: The implementation of the Clean Water Fund Program does not include regulatory activities. Refinements to the program were established with both internal and external advisory groups with the intent of streamlining processes and clarifying criteria for program implementation.

10. Analysis and Supporting Documents Used to Determine the Effect on Small Business or in Preparation of an Economic Impact Report: These rule revisions are expected to have minimal impact on small businesses. The revisions streamline and clarify existing processes and criteria. The revisions do not contain new requirements for small businesses. The department did a section-by-section analysis of potential impacts to local governments and businesses.

11. Effect on Small Business (initial regulatory flexibility analysis): Minimal.

12. Agency Contact Person: Jeanne Cargill, Bureau of Community Financial Assistance, 101 S. Webster Street, PO Box 7921, Madison WI 53707; [e-mail]; 608-436-6080.

13. Place where comments are to be submitted and deadline for submission:

Written comments may be submitted at the public hearings, by regular mail, or email to:

Jeanne Cargill

Department of Natural Resources

Environmental Loans – CF/2

P.O. Box 7921

Madison WI 53707-7921

Phone: [phone] Fax: [phone]