LRB-2110/2
RCT&KSH:cmh:ch
1999 - 2000 LEGISLATURE
March 16, 1999 - Introduced by Representatives Kelso, Ainsworth, Olsen,
Goetsch, Kaufert, Kreibich
and Gronemus, cosponsored by Senators George
and Rosenzweig. Referred to Joint committee on Audit.
AB218,2,7 1An Act to repeal 101.143 (3) (g) 2.; to renumber 18.52 (5) (c) and 18.56 (7) and
2(8); to renumber and amend 18.52 (5) (intro.), 18.52 (5) (a), 18.52 (5) (b), 18.53
3(3), 18.56 (1), 18.56 (2) to (6), 18.56 (9) (intro.), 18.56 (9) (a) to (j), 18.56 (10),
418.57 (4), 18.60 (5), 25.47 and 101.143 (4) (cm); to consolidate, renumber and
5amend
101.143 (3) (g) (intro.) and 1.; to amend 13.485 (2), 18.51, 18.57 (1),
618.58 (1), 18.60 (1), 18.60 (2), 18.61 (2), 18.61 (3) (a), 18.61 (3) (b) (intro.), 18.61
7(3) (b) 1., 18.61 (3) (b) 3., 18.61 (3) (b) 4., 18.61 (3) (c), 18.61 (4), 20.143 (3) (v),
845.79 (9) (a), 84.59 (2), 85.52 (5) (c), 101.143 (3) (c) 2., 101.143 (3) (cm), 101.143
9(3) (d), 101.143 (4) (b) (intro.), 101.143 (4) (d) 2. (intro.) and 281.59 (4) (b); to
10repeal and recreate
18.57 (title); and to create 18.52 (2m) (intro.), 18.52 (7),
1118.52 (8), 18.53 (3) (a) and (b), 18.561 (title), 18.561 (1), 18.561 (7) (title), 18.561
12(8) (title), 18.561 (9) (k), 18.562, 18.60 (5) (a) to (c), 20.143 (3) (s), 20.143 (3) (t),
1320.143 (3) (u), 20.143 (3) (vb), 25.47 (5), 101.143 (1) (bm), 101.143 (1) (cq),
14101.143 (2) (h), 101.143 (2) (i), 101.143 (2) (j), 101.143 (2e), 101.143 (3) (cg),

1101.143 (3) (cp), 101.143 (3) (cs), 101.143 (3) (cw), 101.143 (4) (c) 10., 101.143
2(4) (c) 11., 101.143 (4) (c) 12., 101.143 (4) (cm) 2., 101.143 (9m) and 101.143 (11)
3of the statutes; relating to: the petroleum storage remedial action program;
4authorizing revenue obligations to fund payment of claims under the petroleum
5storage remedial action program; authorizing a new type of revenue obligation;
6granting revenue bonding authority; granting rule-making authority; and
7making appropriations.
Analysis by the Legislative Reference Bureau
Under current law, the department of commerce administers a program to
reimburse owners of certain petroleum product storage tanks for a portion of the
costs of cleaning up discharges from those tanks. This program is commonly known
as PECFA. This bill makes numerous changes concerning PECFA and concerning
the issuance of revenue obligations by this state.
Revenue obligations
This bill authorizes the issuance of revenue obligations, to be paid from
revenues deposited in the petroleum inspection fund, to fund the payment of claims
under the PECFA program. Revenue obligations issued under this bill may not
exceed $450,000,000 in principal amount. In addition to this limit on principal
amount, the bill authorizes the issuance of revenue obligations to fund or refund
these outstanding revenue obligations, to pay issuance or administrative expenses,
to make deposits to reserve funds or to pay accrued or capitalized interest. The
building commission may pledge any portion of revenues received from the proceeds
of the obligations or the petroleum inspection fund to secure revenue obligations
issued under this bill. The building commission may issue the revenue obligations
when it reasonably appears to the building commission that the obligations can be
fully paid on a timely basis from the petroleum inspection fund. The bill provides a
so-called "moral obligation pledge" which applies if the legislature reduces the rate
of the petroleum inspection fee. If the rate is reduced and there are insufficient funds
in the petroleum inspection fund to pay the principal and interest on the revenue
obligations, the legislature expresses its expectation and aspiration that it would
make an appropriation from the general fund sufficient to pay the principal and
interest on the obligations.
Under current law, the state may issue "revenue obligations" for certain
specified purposes. In general, a revenue obligation is an obligation that is: 1)
incurred to purchase, acquire, lease, construct, improve, operate or manage a
revenue-producing enterprise; and 2) repayable solely from, and secured solely by,
the property or income from the revenue-producing enterprise.

This bill broadens the definition of revenue obligation to allow revenue bonding
in situations which would not meet the current law definition of revenue obligation.
Under the bill, revenue obligations consist of two different types: enterprise
obligations and special fund obligations. The first type of revenue obligation, called
an enterprise obligation, includes all obligations authorized under current law; i.e.,
obligations that are incurred to purchase, acquire, lease, construct, improve, operate
or manage a revenue-producing enterprise and are repayable solely from, and
secured solely by, the property or income from that revenue-producing enterprise.
The definition of enterprise obligation under the bill is broader than the current law
definition of revenue obligation in that it eliminates the requirement that the bond
be repayable solely from, and be solely secured by, property or income from the
revenue-producing enterprise.
The second type of revenue obligation, a special fund obligation, is created by
the bill. Special fund obligations are an undertaking by the state to repay a certain
amount of borrowed money that is payable from a special fund consisting of fees,
penalties or excise taxes. The bill uses this second type of revenue obligation to
authorize the revenue obligation bonding for the PECFA program.
PECFA administration and reimbursement
This bill requires the department of commerce, in consultation with the
department of natural resources (DNR), to promulgate rules specifying a method for
determining the risk to public health, safety and welfare and to the environment
posed by discharges of petroleum products. Under the bill, to be eligible for PECFA
reimbursement, the owner of a petroleum product storage tank may not begin a
cleanup without the approval of the department of commerce and DNR. The
department of commerce and DNR will jointly determine the appropriate date to
begin a cleanup based on the determination of the risk posed by a discharge and on
the availability of funds to make PECFA reimbursements. The requirement for
approval to begin a cleanup does not apply to emergency cleanups authorized by
DNR or to cleanups of discharges from home heating oil tanks, small farm tanks and
school district heating oil tanks.
Under current law, DNR generally may order a responsible person to conduct
a cleanup of a hazardous substance that has been discharged into the environment
and may oversee the cleanup. However, under current law, the department of
commerce may order and oversee cleanups of certain discharges from petroleum
product storage tanks. The department of commerce has authority over cleanups if
the site of the discharge is classified as low or medium priority based on the threat
that the discharge poses to public health, safety and welfare and to the environment
and if the site is not contaminated by nonpetroleum hazardous substances. Current
law requires DNR and the department of commerce to enter into a memorandum of
understanding that establishes procedures and standards for determining whether
a site is high, medium or low priority. Under this state's groundwater law, DNR and
the department of health and family services set enforcement standards which
represent a concentration of a pollutant in groundwater. If an activity or facility
causes the concentration of a pollutant in groundwater to reach or exceed the
enforcement standard, the state agency that regulates the activity or facility must,

generally, prohibit the activity or practice that uses or produces the pollutant and
implement remedial action.
This bill requires the department of commerce to determine the least costly
method of conducting a cleanup and achieving compliance with enforcement
standards for PECFA sites that are classified as low or medium priority. The bill
requires the department of commerce and DNR jointly to determine the least costly
method of conducting a cleanup and achieving compliance with enforcement
standards for PECFA sites that are classified as high priority. The bill limits the
amount of reimbursement under PECFA to the amount necessary to implement the
least costly method of conducting the cleanup and achieving compliance with
enforcement standards. The bill requires the departments to consider whether
natural attenuation can be used for each cleanup. Natural attenuation is the
naturally occurring reduction in the amount and concentration of a substance in the
environment.
This bill generally requires the department of commerce to use a competitive
public bidding process to help to determine the least costly method of conducting a
cleanup if the estimated cost to complete an investigation, clean-up plan and
cleanup exceeds $60,000. The bill provides an exemption from the bidding
requirement for certain sites with groundwater contamination near wells and allows
DNR to waive the bidding requirement.
This bill requires the department of commerce to conduct an annual review of
ongoing PECFA cleanups at low and medium priority sites and the department of
commerce and DNR to conduct an annual review of ongoing PECFA cleanups at high
priority sites. As part of an annual review, the departments must determine the least
costly method of completing the cleanup and achieving compliance with enforcement
standards. The bill limits the amount of reimbursement under PECFA for costs
incurred after the annual review to the amount necessary to complete the cleanup
and achieve compliance with enforcement standards using the least costly method.
Current law authorizes the department of commerce to establish a schedule of
usual and customary costs for items eligible for PECFA reimbursement. If the
department of commerce establishes a usual and customary cost for an item, PECFA
reimbursement for that item is limited to the usual and customary cost. This bill
requires the department of commerce to establish a schedule of usual and customary
costs for items that are commonly included in PECFA claims. The bill requires the
department of commerce to use the schedule to determine eligible costs for cleanups
for which a public bidding process is not used. This requirement applies until June
30, 2001.
Under PECFA, the owner of a petroleum product storage tank may receive an
award for the amount by which the cost of the cleanup exceeds a deductible amount,
up to a specified maximum. Currently, the PECFA deductible for underground tanks
is generally $2,500 plus 5% of eligible costs, but not more than $7,500, except that
the deductible for heating oil tanks owned by school districts and technical college
districts is 25% of eligible costs.
This bill reduces the PECFA deductible for certain underground petroleum
storage tanks. Under the bill, the deductible for underground tanks, other than

school district and technical college district heating oil tanks, is generally 2% of the
first $40,000 of eligible costs, plus 10% of the next $20,000 of eligible costs, plus 15%
of the amount by which eligible costs exceed $60,000, but the maximum deductible
remains $7,500.
This bill requires the department of commerce, in consultation with DNR, to
promulgate rules specifying the conditions under which the two departments must
issue approvals of cleanups under PECFA. The bill also requires the department of
commerce, in consultation with DNR, to promulgate rules specifying information
that must be submitted under PECFA, review procedures that must be followed by
employes of the department of commerce and DNR and training requirements for
those employes.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB218, s. 1 1Section 1. 13.485 (2) of the statutes is amended to read:
AB218,5,82 13.485 (2) The building commission may, under s. 18.56 18.561 (5) and (9) (j)
3or 18.562 (3) and (5) (e), deposit in a separate and distinct fund, outside the state
4treasury, in an account maintained by a trustee, fees and charges derived from the
5facilities or from agreements entered into under sub. (4). The fees and charges
6deposited are the trustee's moneys in accordance with the agreement between this
7state and the trustee or in accordance with the resolution pledging the fees and
8charges to the repayment of revenue obligations issued under this section.
AB218, s. 2 9Section 2. 18.51 of the statutes is amended to read:
AB218,5,14 1018.51 Provisions applicable. The following sections apply to this
11subchapter, except that all references to "public debt" or "debt" are deemed shall be
12read
to refer to a "revenue obligation" and all references to "evidences of
13indebtedness" shall be read to refer to "evidences of revenue obligations"
: ss. 18.02,
1418.03, 18.06 (8), 18.07, 18.10 (1), (2), (4) to (9) and (11) and 18.17.
AB218, s. 3 15Section 3. 18.52 (2m) (intro.) of the statutes is created to read:
AB218,6,2
118.52 (2m) (intro.) "Enterprise obligation" means every undertaking by the
2state to repay a certain amount of borrowed money that is all of the following:
AB218, s. 4 3Section 4. 18.52 (5) (intro.) of the statutes is renumbered 18.52 (5) and
4amended to read:
AB218,6,85 18.52 (5) "Revenue obligation" means every undertaking by the state to repay
6a certain amount of borrowed money which is:
an enterprise obligation or a special
7fund obligation. A revenue obligation may be both an enterprise obligation and a
8special fund obligation
.
AB218, s. 5 9Section 5. 18.52 (5) (a) of the statutes is renumbered 18.52 (2m) (a) and
10amended to read:
AB218,6,1311 18.52 (2m) (a) Created for the purpose of purchasing, acquiring, leasing,
12constructing, extending, expanding, adding to, improving, conducting, controlling,
13operating or managing a revenue-producing enterprise or program;.
AB218, s. 6 14Section 6. 18.52 (5) (b) of the statutes is renumbered 18.52 (2m) (b) and
15amended to read:
AB218,6,1716 18.52 (2m) (b) Payable solely from and secured solely by the property or income
17or both of the enterprise or program; and.
AB218, s. 7 18Section 7. 18.52 (5) (c) of the statutes is renumbered 18.52 (2m) (c).
AB218, s. 8 19Section 8. 18.52 (7) of the statutes is created to read:
AB218,6,2120 18.52 (7) "Special fund obligation" means every undertaking by the state to
21repay a certain amount of borrowed money that is all of the following:
AB218,6,2222 (a) Payable from a special fund consisting of fees, penalties or excise taxes.
AB218,6,2323 (b) Not public debt under s. 18.01 (4).
AB218, s. 9 24Section 9. 18.52 (8) of the statutes is created to read:
AB218,7,3
118.52 (8) "Special fund program" means a state program or purpose with
2respect to which the legislature has determined that financing with special fund
3obligations is appropriate and will serve a public purpose.
AB218, s. 10 4Section 10. 18.53 (3) of the statutes is renumbered 18.53 (3) (intro.) and
5amended to read:
AB218,7,136 18.53 (3) (intro.) The commission shall authorize money to be borrowed and
7evidences of revenue obligation to be issued therefor up to the amounts specified by
8the legislature to purchase, acquire, lease, construct, extend, expand, add to,
9improve, conduct, control, operate or manage such revenue-producing enterprises
10or programs as are specified by the legislature as the funds are required
. The
11requirements for funds shall be established by the state department or agency head
12carrying out program responsibilities for which the revenue obligations have been
13authorized by the legislature., but shall not exceed the following:
AB218, s. 11 14Section 11. 18.53 (3) (a) and (b) of the statutes are created to read:
AB218,7,1815 18.53 (3) (a) In the case of enterprise obligations, the amounts specified by the
16legislature to purchase, acquire, lease, construct, extend, expand, add to, improve,
17conduct, control, operate or manage such revenue-producing enterprises or
18programs as are specified by the legislature.
AB218,7,2019 (b) In the case of special fund obligations, the amount specified by the
20legislature for such expenditures to be paid from special fund obligations.
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