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.), including the intent to apply requirement and submittal deadline; the department put a policy paper out for public comment stating that the intent to apply is not being eliminated immediately but that the department will be looking at potential changes; the department may look at whether information requested from applicants in the intent to apply should become part of the financial assistance application and whether the intent to apply should be eliminated, modified, or requested less frequently; eliminating the intent to apply requirement and deadline from the statute was needed to be able to examine the entire application process from beginning to end to determine what streamlining should be done to better align the process with customer needs, administrative responsibilities, Wisconsin’s construction season, and multiple other factors that impact water infrastructure project timelines; the department will engage program customers to seek input regarding these streamlining efforts. — Application process – requires applicant use of the online 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; the department intends to begin another administrative rule revision after doing some strategic planning to determine the best timeline for the loan program and looking in detail at current submittal requirements and document reviews. — 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 – adds a requirement for submittal of a certification regarding land ownership and easements; codifies new policies the department developed regarding when a legal opinion regarding land ownership and easement rights is needed in addition to or in lieu of a certification, and 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; jeanne.cargill@wisconsin.gov; 608-436-6080. 13. Place where comments are to be submitted and deadline for submission:
A public comment period on the draft rule occurred from May 23, 2022 to June 21, 2022, with a public hearing on June 21, 2022. No comments were received during the comment period or at the public hearing.
RULE TEXT
Section 1 NR 162 is repealed and recreated to read:
SUBCHAPTER I — GENERAL
NR 162.001 Purpose. The purposes of this chapter are all of the following:
(1) Establish rules under ss. 281.58 and 281.59, Stats., to implement and administer a financial assistance program for the engineering and construction of treatment works and best management practices. (2) Establish a priority system for distributing clean water fund program financial assistance as provided in s. 281.58, Stats., and the mechanisms and methodology to be used to modify the priority scoring system. (3) Establish rules under s. 281.58 (6) (b) 8., Stats., to implement and administer interest rate subsidies for loans issued by the board of commissioners of public lands for projects to engineer and construct treatment works and best management practices with total estimated project costs of $2,000,000 or less. Note: All forms necessary for financial assistance under this chapter are available on the department’s website. Paper forms may be acquired from the Department of Natural Resources, Bureau of Community Financial Assistance, 101 S. Webster St., P.O. Box 7921, Madison, Wisconsin 53707–7921. Most information is required to be submitted through the department’s online application system.
NR 162.002 Applicability. This chapter applies to all applicants for and recipients of financial assistance for the engineering and construction of treatment works and best management practices made under ss. 281.58 and 281.59, Stats. This rule first applies to financial assistance applications submitted to the department on the effective date of this rule [LRB inserts date]. Compliance with the applicable requirements of this chapter is a prerequisite to receiving financial assistance under ss. 281.58 and 281.59, Stats. NR 162.003 Definitions. In this chapter:
(1) “Amendment” means a formal, written change to an existing legal agreement or contract executed by all parties to the original agreement or contract.
(2) “American Community Survey” or “ACS” means the nationwide survey conducted by the U.S. bureau of the census to collect demographic, social, housing, and economic data and produce 1-year, 3-year, and 5-year estimates based on population thresholds.
(3) “Applicant” means any municipality that submits to the department any of the following for financial assistance under this chapter:
(a) Intent to apply form and priority evaluation and ranking information as required by the department.
(b) A financial assistance application.
(4) “Approval” means the written approval of the department.
(5) “Best management practices” or “BMPs” has the meaning given in s. NR 151.002 (4). Note: Under s. NR 151.002 (4), “Best management practices" or “BMPs" means structural or non-structural measures, practices, techniques, or devices employed to avoid or minimize soil, sediment, or pollutants carried in runoff to waters of the state.
(6) “Block group” means a subdivision of a census tract made up of a cluster of blocks having the same first digit of their 4-digit identifying numbers within the tract.
(7) “Board of commissioners of public lands” or “BCPL” means the organization comprised of the secretary of state, the state treasurer, and the attorney general that operates under the authority of ch. 24, Stats.
Note: The BCPL is also known as state trust funds.
(7m) “BOD” means the pollutant parameter biochemical oxygen demand.
(8) “Breach of contract” means the failure of the municipality to comply with any of the following:
(a) The terms and conditions of the financial assistance agreement or interest rate subsidy agreement.
(b) The terms and conditions of the municipal resolution authorizing the issuance and sale of bonds or notes to the clean water fund program.
(9) “Capital improvement” means construction resulting in improvements to real property or depreciable property, or both, and adding to the value or useful life of these assets, including structural improvements, or improvements that enhance usefulness or productivity. “Capital improvement” includes capital assets that are not structural but are necessary for water quality protection or improvement, such as trucks, street sweepers, land for buffer areas, and other tangible assets with a single item cost of greater than $5,000.
Note: The following are examples of capital improvements: constructing permeable pavement or an infiltration pond to control runoff; constructing an entirely new treatment works, or new clarifiers, aeration tanks, or other major components of an existing treatment works or BMP; upgrading existing equipment or installing new, more efficient process equipment, such as equipment for pumping, dewatering, aeration, scraping, skimming, or disinfection; constructing new process, administration, and storage buildings; adding to or constructing major renovations of existing facilities; replacing or rehabilitating aged or undersized sanitary sewer pipes; replacing a roof on a treatment plant building; constructing a new lift station or upgrading an existing lift station; installing security, a supervisory control and data acquisition system, or monitoring equipment as part of a scored project; or purchasing an existing treatment facility, land on which a treatment facility will be constructed, land for buffer areas, agricultural or industrial land taken out of production in order to improve water quality in the area, or necessary mobile assets, such as a street sweeper. Replacing an old pump with a new pump that is the same size and efficiency as the old pump is not considered a capital improvement; rather, it is maintenance.
(9m) “CBOD” means the pollutant parameter carbonaceous biochemical oxygen demand.
