• Wisconsin municipalities (cities, towns, villages, sanitary districts, lake rehabilitation & protection districts, counties, tribes, Metropolitan Sewerage Districts) — CWFP applicants.
•
Bond counsels — Hired by applicants to prepare municipal bond documents for CWFP loan closings.
• Consulting engineers — Hired by applicants to plan, design, conduct bidding process, oversee construction and coordinate various players — including financial assistance agencies — in the projects.
• Financial advisors — Hired by applicants to advise them on best financial options for interim financing and permanent project financing.
• Municipal attorneys — Hired by applicants to prepare statements required by the CWFP for proof of land ownership and to provide legal advice related to other loan related documents and issues.
• Construction contractors & subcontractors — Awarded bids by applicants to construct necessary infrastructure projects; must follow certain program requirements such as paying Davis-Bacon wage rates, and soliciting and reporting utilization of disadvantaged business enterprises.
• DNR Bureau of Watershed Management — Provides technical expertise on wastewater issues, and storm water and other nonpoint issues, cooperates with CWFP staff in setting overall program priorities, conducts environmental/historical/archaeological reviews, and reviews project plans and specifications and parallel cost estimates.
• DNR Bureau of Legal Services — Provides legal counsel on proposed rule revisions and for CWFP interpretations or actions related to unclear issues.
• DOA Capital Finance Office — Administers the CWFP in cooperation with DNR.
• DOA Community Development Block Grant (CDBG) Program — Works cooperatively with the CWFP to provide special funding packages for municipalities that need assistance from more than one funding agency on a project.
• Wisconsin DOT Regional Offices and Division of Transportation System Development — Provide bidding and contract documentation to the CWFP for projects let by DOT.
• U.S. Bureau of the Census — Provides income and other data needed for decision-making related to hardship financial assistance eligibility and amount of subsidy municipalities receive.
• USDA Rural Development Wisconsin — Works cooperatively with the CWFP to provide special funding packages for municipalities that need assistance from more than one funding agency on a project.
• Wisconsin Rural Water Association — Provides training and assistance for wastewater operators and municipal officials; carries out contract work related to the Clean Water Act goals; works cooperatively with the CWFP and other funding agencies to help its members finance their wastewater infrastructure projects.
7. Summary and Preliminary Comparison with any Existing or Proposed Federal Regulation that is Intended to Address the Activities to be Regulated by the Proposed Rule
Clean water state revolving fund (CWSRF) programs in each state must comply with the Clean Water Act, federal regulations under
40 CFR Part 35, EPA Guidelines and grant conditions specific to each annual capitalization grant the state receives. In addition, in recent years, additional requirements have been added through appropriations bills. The existing rule was developed to comply with the federal regulations that were in place at that time. However, since the rule has not been revised for 10 years, there are inconsistencies that need to be corrected. The following federal requirements will be addressed as ch.
NR 162 is revised:
•
Loan recipient consistency with all federal cross-cutting authorities, including laws and executive orders such as the Davis-Bacon Act, Archaeological and Historic Preservation Act, Endangered Species Act, National Historic Preservation Act, Wild and Scenic Rivers Act, the Debarment and Suspension Executive Order 12549, Uniform Relocation and Real Property Acquisition Policies Act, and the Equal Employment Opportunity Executive Order 11246.
•
Need for annual Intended Use Plan and public time for review and comment before submitting it to EPA for approval.
•
Requirement to expend all funds in the SRF in an expeditious and timely manner.
• Financing for land acquisition only if the land is integral to the treatment process.
•
Need for environmental reviews of sites where projects will occur.
• Requirement for 20% Wisconsin match to the Federal capitalization grant each year.
Revisions to ch.
NR 162 will better refine how the CWFP complies with federal regulations, EPA guidelines, and conditions of the CWFP's annual federal capitalization grant. Over the years of operating the program, CWFP staff have found that a number of areas in ch.
NR 162 could be improved and streamlined by fairly (minimal) changes, by updating sections that may currently include cumbersome procedures that impact the design engineering and construction industry, and by aligning various sections with federal regulations and guidelines that have been modified over time. For example, Congress included in recent annual appropriations bills that Davis-Bacon wages must be paid to workers. Ch.
NR 162 will need to accommodate these types of changes now and in the future.
8. Anticipated Economic Impact of Implementing the Rule (Note if the Rule is Likely to have a Significant Economic Impact on Small Businesses)
Revisions to ch.
NR 162 will likely have a positive impact on small businesses. It would keep municipal infrastructure projects moving, which would mean more engineering and construction jobs available. It would also remove some uncertainty regarding requirements that must be followed for the engineering and construction companies involved in CWFP projects; DNR would be able to relay Congressional changes to these businesses more quickly each year.
Contact Person
Jeanne Cargill, 608-267-7587.
Natural Resources
Environmental Protection—General, Chs.
100—
(DNR # CF-12-13)
This statement of scope was approved by the governor on April 3, 2013.
Rule No.
Revises chapter NR 166.
Relating to
Safe Drinking Water Loan Program.
Rule Type
Permanent.
1. Finding/Nature of Emergency (Emergency Rule Only)
Not applicable.
2. Detailed Description of the Objective of the Proposed Rule
Chapter
NR 166 is the administrative rule for the Safe Drinking Water Loan Program (SDWLP), which provides loans to local units of government to finance drinking water infrastructure projects.
The main objectives of ch.
NR 166 revisions are:
• To update areas of the code that are no longer in line with federal regulations or state statutes, including but not limited to the following:
• Procurement including solicitation of disadvantaged businesses.
• Types of assistance available.
• Project and cost eligibility.
• To provide needed efficiency, accuracy or clarity changes, including but not limited to the following:
• Engineering report.
• Loan application.
• Financial assistance requirements.
• Loan interest rates including median household income information.
• Amendments to a financial assistance agreement, and
• Flexibility with respect to the types of financial assistance available, annual funding policy, and project and cost eligibility.
Additional improvements to ch.
NR 166 may be identified by the Advisory Committee 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:
The current ch.
NR 166 includes many policies that will not be changed. Many of these policies are based in federal requirements that have evolved over the years. Some existing policies are specified in the related state statutes. The current ch.
NR 166 is relatively prescriptive in nature. We expect that discussions with the Advisory Committee will yield recommendations for retaining many existing policies, eliminating some archaic policies, and including new policies so that the SDWLP is in compliance with Federal requirements. Revisions to ch.
NR 166 must maintain compliance with the following federal requirements:
1)
Use at least 15% of the funds available each year to provide loan assistance to small systems that serve fewer than 10,000 persons.
2) Finance only infrastructure projects of community or nonprofit non-community water systems needed to achieve or maintain compliance with Safe Drinking Water Act requirements or to significantly further the health protection objectives of the Act.
3) Comply with all federal cross-cutting 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, Clean Water Act, Endangered Species Act, National Historic Preservation Act, Wild and Scenic Rivers Act, the Debarment and Suspension Executive Order 12549, Uniform Relocation and Real Property Acquisition Policies Act, and the Equal Employment Opportunity Executive Order 11246.
4) Prioritize projects each year giving top priority to projects that: (a) address the most serious risks to human health; (b) are necessary to ensure compliance with the requirements of the Safe Drinking Water Act; and (c) assist systems most in need, on a per household basis.
5) Provide financing for land acquisition only if the land is integral to the project and is purchased from a willing seller.
6) Provide financing for a system only if the owner has (or will have with appropriate changes in operation) the technical, managerial, and financial capability to keep the system in compliance with the Safe Drinking Water Act.
7) Deny assistance for any system that is in significant noncompliance with any national drinking water regulation unless the state determines the project will enable the system to return to and be able to maintain compliance.
8) Determine the primary purpose of each project, and deny assistance for any project for which the primary purpose is fire protection or expansion for future growth.
9) Conduct environmental reviews of the sites on which projects will take place.
B. New Policies Proposed to be Included in the Revised Rule:
Through discussions with our partners, customers, and the Advisory Committee, new policies will be identified for inclusion into ch.
NR 166, including some federal requirements that are specified as part of annual federal appropriation bills.
For example, it may be recommended that SDWLP policy changes are more efficiently modified if they are included in the annual
Intended Use Plan (IUP). The IUP
undergoes
public review and comment prior to being submitted to the DNR Secretary and EPA for approval. Examples of policies that could be included in the IUP instead of ch.
NR 166 include project scoring system priorities, “green project" reserve determinations, and additional subsidization requirements.
C. Analysis of Policy Alternatives:
1) Do Nothing — leave ch.
NR 166 as it is.
a. Pros: This alternative would mean no rule revisions are necessary and staff resources will not be diverted from program implementation.
b. Cons: The absence of rule revisions will mean that ch.
NR 166 is still out of compliance with Federal fund requirements. Our inability to revise the rule means we must continue issuing variances for portions of the program that are inconsistent with new federal requirements.
2) Incorporate policy changes into ch.
NR 166.
a.
Pros: Many areas of ch.
NR 166 can be improved or streamlined with fairly minor changes. Some of these changes are the result of federal requirements. In addition, incorporating changes that are discussed with DNR partner bureaus and external partners will help streamline the program, build better efficiencies for all, ensure consistency with federal requirements, and provide assurances to EPA that our program is meeting those requirements.
b. Cons: Rule changes in general require a significant amount of staff resources, which could be used for other program implementation activities.
4. Detailed Explanation of Statutory Authority for the Rule (Including the Statutory Citation and Language)
Sections
281.61 (12) (a) and
(b), Wis. Stats., contain the statutory authority for the Department of Natural Resources to promulgate rules for administration of the SDWLP and read as follows:
(12) Duties Of The Department. The department shall do all of the following:
(a) Promulgate rules establishing eligibility criteria for applicants and projects under this section.
(b) Promulgate rules that are necessary for the execution of its responsibilities under the safe drinking water loan program.
The Environmental Improvement Fund, which includes the SDWLP, is administered cooperatively by the Wisconsin DNR and Department of Administration (DOA). Revisions to ch.
NR 166 must also be coordinated with s.
281.59, Wis. Stats., in order to avoid conflict with the statutes.
5. Estimate of Amount of Time that State Employees Will Spend Developing the Rule and of Other Resources Necessary to Develop the Rule
The following estimates of staff time needed to complete the rule revision process include:
Bureau of Community Financial Assistance 240 hours
Bureau of Drinking Water & Groundwater 120 hours
Legal Services 40 hours
Management & Budget and Science Services 4 hours
