REPEALING AND RECREATING RULES
The Wisconsin Natural Resources Board proposes an order to repeal and recreate ch. NR 166, Wis. Adm. Code, relating to the Safe Drinking Water Loan Program and affecting small business. CF-12-13
Analysis Prepared by the Department of Natural Resources
1. Statute Interpreted, Statutory Authority and Explanation: Section 281.61(12), Wis. Stats., authorizes the department to promulgate rules establishing eligibility criteria for applicants and projects necessary for the execution of its responsibilities under the Safe Drinking Water Loan Program. The Safe Drinking Water Loan Program provides financial assistance to municipalities for their drinking water systems. 2. Related Statutes or Rules: Concurrent with this effort, the department is also repealing and recreating ch. NR 162 relating to the Clean Water Fund Program. Both the Safe Drinking Water Loan Program and the Clean Water Fund Program are part of the Environmental Improvement Fund. 3. Plain Language Analysis: Revisions to ch. NR 166, Wis. Adm. Code, relating to the Safe Drinking Water Loan Program, clarify eligibility criteria, streamline processes, and update implementation issues since the rule was last revised. Substantive changes in this rule revision include:
Adds several definitions to provide clarity in areas in which the program has experienced some difficulties.
Clarifies that a municipality cannot already have “long-term affordable debt” outstanding for its completed or substantially completed project”; any project that has been substantially complete for more than 3 years is not eligible for financing.
Provides flexibility for determining whether publishing a funding policy for a given fiscal year is appropriate or necessary, and changes the public comment format from holding a public hearing to having a 30-day online public comment period.
Updates eligible projects/activities to incorporate current practices and add a few new eligibility items
Changes the deadline dates for ITA/PERF submittals to Oct 31st and allows for/requires on-line submittals of ITAs
Makes minor revisions to the PERF scoring system, and requires annual rather than biennial submittal of project information
Increases allowable interim financing issuance costs from $7,500 to up to $15,000
Updates Disadvantaged Business Enterprise (DBE) requirements to comply with federal requirements
Clarifies that Median Household Income (MHI) data source is the American Community Survey conducted by the U.S. Census Bureau and provides data options for sanitary districts for which there is not a published MHI. 4. 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 42 USC 300g-1. This rule complies with the requirements of the Federal Safe Drinking Water Act, 42 USC 300f to 300j-26. 5. Comparison with Similar Rules in Adjacent States: Each state implements the federal Safe Drinking Water Act consistent with the associated state statutes and federal requirements. Each state loan program has unique features, but all of the programs are designed to meet federal Safe Drinking Water Act requirements. Each state has a unique priority scoring system based on state priorities but consistent with federal priorities. The EPA reviews program implementation to ensure consistency with the federal requirements.
6. Summary of Factual Data and Analytical Methodologies Used and How Any Related Findings Support the Regulatory Approach Chosen: The implementation of the Safe Drinking Water Loan 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.
7. Analysis and Supporting Documents Used to Determine the Effect on Small Business or in Preparation of an Economic Impact Report: Rule revisions are expected to have minimal impact on small businesses, in that it streamlines existing processes and clarifies implementation criteria. Rule revisions do not contain any new requirements for small businesses.
8. Effect on Small Business (initial regulatory flexibility analysis): Minimal.
9. Agency Contact Person: Robin Schmidt, Bureau of Community Financial Assistance, 101 S. Webster Street., PO Box 7921, Madison WI 53707-7921; robin.schmidt@wisconsin.gov; 608-266-3915. Section 1 NR 166 is repealed and recreated to read:
SUBCHAPTER 1 - GENERAL
NR 166.01 Purpose. The purposes of this chapter are all of the following:
(1) Establish rules under ss. 281.59 and 281.61, Stats., for the implementation and administration of a financial assistance program to plan, design, construct or modify public water systems. (2) Establish a priority system for the distribution of safe drinking water loan program financial assistance as provided in s. 281.61, Stats., and the mechanisms and methodology to be used to modify the priority system. Note: All forms necessary for financial assistance under this chapter may be acquired at no charge from the Department of Natural Resources, Bureau of Community Financial Assistance, 101 S. Webster St., P.O. Box 7921, Madison, Wisconsin 53707–7921. The forms are also available on the Department of Natural Resources website.
NR 166.02 Applicability. This chapter applies to all applicants for and recipients of financial assistance to plan, design, construct or modify public water systems made pursuant to ss. 281.59 and 281.61, Stats. Compliance with the applicable requirements of this chapter is a prerequisite to receiving financial assistance under ss. 281.59 and 281.61, Stats. NR 166.03 Definitions. In this chapter:
(1) “Action level” or “AL” has the meaning given in s. NR 809.04 (1).” Note: In s. NR 809.04 (1), “action level” is the concentration of lead or copper in water which determines, in some cases, the treatment requirements that a public water system is required to complete. (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 applies for financial assistance under ss. 281.59 and 281.61, Stats. (4) “Approval” means the written approval of the department.
(6) “Block group” means a subdivision of a census tract made up of a cluster of blocks having the same first digit of their four-digit identifying numbers within the tract.
(7) “Breach of contract” means the failure of the financial assistance recipient to comply with any of the following:
(a) The terms and conditions of the financial assistance agreement.
(b) The terms and conditions of the municipal obligation resolution authorizing the issuance and sale of bonds or notes to the safe drinking water loan program.
(8) “Capital improvement” means construction resulting in improvements to real property or depreciable property, or both, or adding to the value or useful life of these assets, including structural improvements such as constructing new wells or elevated storage tanks or modifying existing facilities, or improvements that enhance usefulness or productivity, including replacing an existing pump with a more efficient new pump.
Note: The following are examples of capital improvements: drilling a new well and constructing a well house; upgrading existing equipment or installing new, more efficient process equipment, such as pumps, and chemical feed or other treatment equipment; constructing new buildings or facilities; adding to or constructing major renovations of existing facilities; replacing aged or undersized water mains; constructing a water system crossing of a highway, railroad, or waterbody; constructing a watermain loop to eliminate one or more dead ends in the water system; upgrading or improving an existing storage tank, including recoating the entire exterior or entire interior, or both, of a storage tank; installing security, a supervisory control and data acquisition system, or monitoring equipment as part of a scored project.
(9) “Census block” means the smallest unit for which the U.S. census bureau collects and tabulates population information in the decennial census and income information in the ACS.
(10) “Census designated place” means a statistical area delineated for each decennial census according to U.S. census bureau guidelines for the purpose of presenting census data and ACS data for a concentration of population, housing, and commercial structures that is locally identifiable by name, but is not within an incorporated place.
(11) “Census tract” means a small, relatively permanent statistical subdivision of a county used in the decennial census and the American community survey, delineated for the purpose of presenting data, typically following visible features or governmental boundaries or both, including approximately 4,000 inhabitants, and designed to be a relatively homogeneous unit with respect to population characteristics, economic status, and living conditions.
(12) “Change order” means an action that specifies and justifies a change to a construction contract that alters the time of completion, the contract scope of work, the total price, or a combination of any of these.
(13) “Community water system” means a public water system which serves at least 15 service connections used by year–round residents or regularly serves at least 25 year–round residents. Any water system serving 7 or more homes, 10 or more mobile homes, 10 or more apartment units or 10 or more condominium units shall be considered a community water system unless information is provided by the owners indicating that 25 year–round residents will not be served.
(14) “Construction” means a set of actions taken to make a capital improvement, including any of the following actions:
(a) Building, erecting, extending, or assembling a water system or a new major asset for an existing water system.
(b) Preparing a construction site or sites for work activities. Site preparation includes grading, staking, and digging, and demolition or abandonment of existing structures.
(c) Altering, modifying, improving, upgrading, rehabilitating, or adding to existing water system facilities.
(d) Installing new piping or mechanical, electrical, or electronic equipment or facilities.
(15) “Contaminant” means any physical, chemical, biological, or radiological substance or matter in water.
(15m) “Core scope of work” means the set of activities, items, and work that is specific to and necessary for constructing and putting into operation a scored project.
(16) “Custom tabulation” means a special tabulation of income data from the ACS microdata files that is performed by the U.S. bureau of the census, is not part of the standard ACS data tabulations, and results in generation of a median household income for an area designated by the applicant as the boundaries of a town sanitary district, public inland lake protection and rehabilitation district, or municipal water district, or of the area served by the water system if the water system serves only a portion of the place or minor civil division in which it is located.
(17) “Debt” means a financial liability that is subject to repayment and incurred to fund a project, including liabilities in the form of lines of credit, bond anticipation notes, general obligation bonds, revenue bonds, general obligation promissory notes, certificates of indebtedness, and special assessment bonds.
(18) “Dedicated replacement fund” means a separate fund established by the municipality in which an appropriate balance is maintained, or sufficient deposits are made, or both, for the purpose of making expenditures for major repair or planned replacement of equipment or facilities necessary for the operation of the water system, or for unexpected unbudgeted major costs incurred for operation and maintenance of the water system.
(19) “Department” means the department of natural resources.
(20) “Disadvantaged business enterprise” or “DBE” means a business entity certified as disadvantaged under the U.S. department of transportation unified certification program or other program approved by the U.S. environmental protection agency to certify disadvantaged businesses.
(21) “Distribution system” means all pipes or conduits by which water is delivered to consumers except piping inside buildings served and a service line to a building from a distribution main or pipe.
(22) “DOA” means the department of administration.
(23) “Engineering” includes the following:
(a) Performing preliminary planning to determine the need for or the feasibility of building or modifying a water system.
(b) Performing engineering, architectural, geotechnical, hydrogeological, environmental, archaeological, fiscal, or economic investigations or studies.
(c) Preparing surveys, designs, plans, bidding documentation, working drawings, specifications, or as-built drawings.
(d) Observing, inspecting or supervising any of the activities under pars. (a) to (c) or under sub. (14).
(24) “Financial assistance” includes one or more of the following actions taken by the department and DOA under ss. 281.59 and 281.61, Stats.: (a) Providing a loan, principal forgiveness, a guarantee, or credit enhancement to a municipality.
(b) Refinancing a municipality’s interim debt obtained for the project.
(c) Purchasing insurance for a municipality.
