(1) LEGISLATIVE INTENT. The legislature finds that state financial assistance for facility planning, engineering design and construction of point source pollution abatement facilities is a public purpose and a proper state government function in that the state is the trustee of the waters of the state and that this financial assistance is necessary to protect the purity of state waters. In order that facility planning, engineering design and construction of point source pollution abatement facilities necessary to the protection of state waters be encouraged, a state program of assistance to municipalities for the financing of these activities is established. The legislature further finds that in order for the construction of point source pollution abatement facilities to proceed in an expeditious manner it is appropriate to meet the costs through the issuance of public debt, extending the financial obligation incurred over a generation of beneficiaries of these facilities. (2) ADMINISTRATION; RULES. The state’s point source pollution abatement program shall be administered by the department. The department shall make such rules as are necessary for the proper execution of the program. (3) DEFINITIONS. In this section: (a) “Federal act” means the federal water pollution control act P.L. 92-500, as amended. (b) “Point source pollution abatement facilities” means those facilities eligible for financial assistance under title II of the federal act. (c) “State program” means the program of financial assistance for point source pollution abatement established under this section. (4) ELIGIBILITY. (a) The department shall, by rule, specify criteria for determining eligible municipalities and projects for funding by grants under this section. Where a municipality is serviced by more than one sewerage district for wastewater pollution abatement, each service area of the municipality shall be considered as a separate municipality for purposes of obtaining financial assistance under the state program. Except as provided in this subsection, the department shall promulgate rules which specify criteria for determining eligible participants and projects which comply with the federal act and rules promulgated under the federal act. (b) 1. Eligible projects relating to collection systems include only the following: a. A collection system in an unsewered municipality which is constructing a new wastewater treatment plant and collection system rehabilitation which is necessary to maintain the total integrity of a sewerage system. b. A collection system which the department orders under s. 281.43 (1) notwithstanding the outcome of the annexation referendum under s. 281.43 (1m). Notwithstanding sub. (7) (a) and any rules promulgated under this section, the department shall award funding under this subd. 1. b. in an amount that totals 60 percent of all costs of the project, rather than of eligible costs of the project. c. A collection system in an unsewered community which is being connected to an existing wastewater treatment plant if the municipality applied to the department under sub. (5) for financial assistance on or after January 1, 1986, and the municipality received, before January 1, 1987, a notice under sub. (6) that the department was ready to allocate funds to the municipality. 2. Funding may not be provided for that portion of any project related to industrial capacity that is defined under 33 USC 1284 (b) (1), as amended on May 16, 1978, as subject to industrial cost recovery. Notwithstanding the federal act and regulations promulgated under that act, the state program does not require an industrial cost recovery system. 3. The amount of reserve capacity for treatment works eligible for grant assistance is limited to that future capacity required to serve the users of the treatment works expected to exist within the service area of the project 10 years from the time the treatment works are estimated to become operational or, in the case of interceptor sewers and associated appurtenances, the estimated date of operation. The department, in consultation with the demographic services center in the department of administration under s. 16.96, shall promulgate rules defining procedures for projecting population used in determining the amount of reserve capacity. (c) 1. Every applicant seeking grants for construction purposes under this section shall complete a staged facility planning, engineering design and environmental analysis sequence developed by the department. The department shall model the required sequence after the staged planning, design and environmental analysis sequence under title II of the federal act. 2. If sources of funding for the facility planning prescribed under this paragraph are not available for these activities, grants provided under this section may pay 50 percent of the cost of facility planning. 2m. Amendments or applications for facility planning grants received after March 1, 1987, shall be funded at 50 percent of the cost of the facility planning. 3. If sources of funding for the engineering design prescribed under this paragraph are not available for these activities, grants provided under this section may pay 75 percent of the cost of engineering design activities. 4. Engineering design cost grants made from the appropriation under s. 20.866 (2) (tn) shall be awarded at the time a construction grant is awarded and may be awarded only if an advance commitment for reimbursement is made under sub. (9m). (d) If a project funded under this section fails, the department may not require the recipient of the grant to reimburse the department for costs determined to be eligible under this section if all of the following apply: 1. The applicant initiates legal action and pursues the action to completion, unless the department agrees otherwise, to recover costs from parties potentially liable for the project’s failure and the legal action is not resolved before May 11, 1990. 2. The applicant agrees in writing to pay to the department, for the state-funded portion of the project, funds recovered under the legal action in excess of the cost of the legal action. (5) APPLICATION. Municipalities which desire to participate in the financial assistance program under this section shall submit an application for participation to the department. The application shall be in such form and include such information as the department prescribes. The department shall review applications for participation in the state program. It shall determine those applications which meet the criteria it established under sub. (4). (6) PRIORITIES. (a) Each municipality shall notify the department of its intent to apply for a grant under this section by January 1 of each year. For those municipalities that notify the department by January 1, the department shall annually compile a funding list which ranks these municipalities in the same order as they appear on the federal priority list, prepared under the federal act, as of January 1 of each year. Except as provided in sub. (7) (c) 4. , if there is not sufficient funding available under this section to fund all grant applications in one year, the department shall allocate available funding to projects in the order in which they appear on the funding list. The department shall not allocate funds to a municipality that is on the funding list in a particular year if the municipality is not ready to begin construction within 3 months of the time when the department is ready to allocate the funds, and the municipality can reasonably expect to receive funds under the federal program within 12 months of the time when the department is ready to allocate the funds. (b) For those municipalities that notify the department after January 1 but before April 1 of each year of their intent to apply for a grant under this section, the department shall compile a funding list as of April 1 of each year. If funding remains from the allocation under par. (a), the department shall allocate available funding to projects in the order in which they appear on the funding list compiled under this paragraph. The department shall not allocate funds to a municipality under this paragraph that is on the funding list in a particular year if the municipality is not ready to begin construction within 3 months after the department is ready to allocate the funds and the municipality can reasonably expect to receive funds under the federal program within 12 months after the department is ready to allocate the funds. (c) If a municipality receives a notice that the department is ready to allocate funds under par. (a) or (b) and, prior to the initiation of construction, the department determines that revisions to the proposed project based upon significant newly discovered information or recent technological innovation will reduce anticipated project costs without impeding the achievement of discharge and effluent standards, the department may reserve the funds previously committed under par. (a) or (b) for that municipality for a period not to exceed one priority year after the funding list is compiled under par. (a) or (b). (7) PAYMENT. (a) 1. Upon the completion by an applicant of all application requirements, the department may enter into an agreement with a municipality for a grant of up to 60 percent of the eligible costs of a project, except as provided under sub. (4) (c), if the municipality is awarded a grant before July 1, 1989. 2. Upon the completion by an applicant of all application requirements, the department may enter into an agreement with a municipality for a grant of up to 55 percent of the eligible costs of the project, except as provided under sub. (4) (c), if the municipality is awarded a grant after June 30, 1989, but before July 1, 1990. (b) No project funded under this section may receive state assistance that, combined with other nonlocal government assistance, exceeds 75 percent of the eligible cost of the project. (c) 1. Metropolitan sewerage districts that serve 1st class cities are limited in each fiscal year to receiving total grant awards not to exceed 33 percent of the amount authorized under sub. (10) for that fiscal year plus the unencumbered balance at the end of the preceding fiscal year for the amount authorized under sub. (10). This subdivision is not applicable to grant awards provided during fiscal years 1985-86, 1986-87, 1988-89 and 1989-90. 2. Metropolitan sewerage districts that serve 1st class cities are limited to new project grant awards of not more than $29,900,000 in fiscal year 1985-86, of not more than $35,300,000 in fiscal year 1986-87, of not more than $70,000,000 in fiscal year 1988-89 and of not more than $45,600,000 in fiscal year 1989-90 from the amounts authorized under sub. (10), plus any unallocated balances from the previous fiscal year as listed in this subdivision which the department determines, in accordance with its rules establishing a priority funding list under sub. (6), will be available for obligation during the succeeding fiscal year. 3. Sewerage districts that do not serve 1st class cities are limited to new project grant awards that, in the aggregate for all those sewerage districts, are not more than $70,500,000 in fiscal year 1988-89 and not more than $48,338,400 in fiscal year 1989-90 from the amounts authorized under sub. (10), plus any unallocated balances from the previous fiscal year as listed in this subdivision which the department determines, in accordance with its rules establishing a priority funding list under sub. (6), will be available for obligation during the succeeding fiscal year. 4. Of the additional $11,938,400 authorized in subd. 3. by 1989 Wisconsin Act 366, for fiscal year 1989-90, the department shall allocate $5,969,200 to each of the first 2 municipalities, except a metropolitan sewerage district that serves a 1st class city, whose projects have the highest rankings on the funding list under sub. (6) (a). The department may not release the additional moneys authorized in subd. 3. to such municipalities until the secretary certifies in writing that each municipality has signed an agreement with the department under which the municipality agrees to waive any further challenge to the order of placement of any of its projects on a priority funding list established by the department under sub. (6). (8) CONDITIONS OF PAYMENT. (a) Water conservation. Each municipality receiving state assistance under this section for the construction of a point source pollution abatement facility shall develop and adopt a program of water conservation no less stringent than the federal requirements. (b) Operation and maintenance. Each municipality receiving state assistance under this section for the construction of a point source pollution abatement facility shall develop and adopt a program of systemwide operation and maintenance of the wastewater treatment plant, including the training of personnel, no less stringent than the federal requirements. (c) User charges; exception. 1. Except as provided under subd. 2., each municipality receiving state assistance under this section for the construction of a point source pollution abatement facility shall develop and adopt a system of equitable user charges to ensure that each recipient of waste treatment services pays its proportionate share of the costs of the operation and maintenance of the point source pollution abatement facility. The user fee system shall be in compliance with title II of the federal act and the rules promulgated under the federal act. 2. The department may issue an exemption from the requirement imposed under subd. 1. if a city or village imposes a system of equitable dedicated charges based upon assessed property values, if the city or village does not operate a wastewater treatment plant but is served by a regional wastewater treatment plant operated by a metropolitan sewerage district created under ss. 200.21 to 200.65 and if the user charges imposed by that district are approved by the department and comply with the requirements of title II of the federal act. (d) Prior approval. Payment in excess of two-thirds of the state assistance provided for the eligible costs of construction may not be made until the department approves the programs required under pars. (a) and (b) and any system required under par. (c). (e) Rules. The department shall promulgate rules consistent with this subsection. (8m) REPAYMENT. The department may not require a municipality that received a construction grant under this section for a wastewater treatment system that subsequently failed to repay any portion of the grant related to the costs of that failed system if all of the following apply: (a) The municipality received the construction grant during fiscal year 1980-81. (b) Prior to the construction of the wastewater treatment system funded by the grant under par. (a) the municipality was an unsewered municipality. (c) The department directed the municipality to correct the failed wastewater treatment system and the municipality received construction grant funding during fiscal year 1987-88 to make the corrections. (9) ADVANCE COMMITMENTS FOR REIMBURSEMENT FROM FUTURE APPROPRIATIONS. (a) The department shall, by rule, implement and administer reimbursement funding to municipalities as part of the financial assistance program under this section to encourage the participation of all municipalities. (b) The department shall promulgate rules specifying reimbursement eligibility and procedures for commitments of financial assistance. The rules shall specify that reimbursement shall be made or committed: 1. To communities willing to apply for state assistance conditioned upon legislative appropriation of the amounts needed to reimburse municipalities. 2. To communities successfully completing all facility planning and engineering design requirements. 3. For all eligible costs consistent with sub. (4). 4. Prior to the start of construction of any reimbursable project if all required procedures have been complied with. 5. Subject to a priority determination system consistent with sub. (6) for reimbursable projects. 6. Subject to the same provisions of payment under sub. (7). 7. Subject to the same conditions of payment under sub. (8). (c) The maximum state assistance the department may commit in each fiscal year before fiscal year 1989-90 for future reimbursement under this subsection is an amount equal to the amount authorized under sub. (7) (c) for the subsequent fiscal year. (9m) ADVANCE COMMITMENTS FOR REIMBURSEMENT OF ENGINEERING DESIGN COSTS. The department may make an advance commitment to a municipality for the reimbursement of engineering design costs from funds appropriated under s. 20.866 (2) (tn) subject to all of the following requirements: (a) For fiscal year 1989-90, the advance commitment shall include a provision making the reimbursement of engineering design costs conditional on the award or making of a construction grant under this section or a loan under ss. 281.58 and 281.59. If the financial assistance that the municipality receives for construction of a treatment work is a loan, the engineering design cost reimbursement shall be a loan. After June 30, 1990, and before September 1, 1990, the department may enter into an agreement with a municipality to provide engineering design costs under this subsection if the department makes an advance commitment for the reimbursement of those costs before July 1, 1990, and the municipality receives financial assistance under this section and s. 281.59 for construction. (b) The advance commitment may be made only for engineering design activities commenced after the department makes the advance commitment. (c) The advance commitment may be made only if the municipality has completed all facility planning requirements. (d) The advance commitment may be made only for engineering design projects and costs which are eligible under sub. (4) (a), (b) and (c) 3. (e) The advance commitment shall be subject to a priority determination system consistent with sub. (6). (10) EXPENDITURE AUTHORIZATION. The department may expend, from the appropriation under s. 20.866 (2) (tn), the total amount which is authorized under that paragraph to be contracted for public debt and has not been expended, for new grants under this section for engineering design costs, construction costs and other costs which can be funded from bond revenue. (10e) LOAN FOR WATER TOWER IN THE VILLAGE OF ATHENS. Notwithstanding subs. (2), (4) to (10), and (12), during the 200103 fiscal biennium, the department shall provide a loan of $320,000 to the village of Athens for construction of a water tower and related costs, if the village applies for a loan. The department may not charge any interest on the loan. (10f) LOAN FOR WATER TOWER IN THE VILLAGE OF WESTON. Notwithstanding subs. (2), (4) to (10), and (12), during the 200103 fiscal biennium, the department shall provide a loan of $400,000 to the village of Weston for construction of a water tower and related costs, if the village applies for a loan. The department may not charge any interest on the loan. (10m) LOAN FOR MODIFICATION OR REPLACEMENT OF AN INNOVATIVE OR ALTERNATIVE PROJECT. Notwithstanding subs. (2), (4) to (10) and (12), during the 1997-99 fiscal biennium, the department shall provide a loan of $1,300,000 to a municipality for all of the planning, design and construction costs incurred after June 30, 1995, for the modification or replacement of a failed innovative or alternative point source pollution abatement facility for which the department issued written approval of eligibility under 40 CFR 35.2032 before December 10, 1996, and which requires additional construction to eliminate discharge of effluent to groundwater and to establish a new surface water outfall. The department may not charge any interest on the loan and may not require the municipality to repay the loan until the municipality receives a grant from the federal environmental protection agency for the modification or replacement of the point source pollution abatement facility. If the federal environmental protection agency denies the grant, the department shall forgive the loan. (10r) LOAN FOR REPLACEMENT OF A FAILED SEQUENTIAL BATCH REACTOR. Notwithstanding subs. (2), (4) to (10) and (12), during the 1999-2001 biennium , the department shall provide a loan of $770,000 to a municipality for all of the administrative, planning, design and construction costs incurred after January 1, 1997, for the replacement of a failed sequential batch reactor point source pollution abatement facility for which the department has issued written concurrence on or before March 26, 1999, that the construction of a new wastewater treatment plant is the most cost-effective option, and for which the municipality has on or before March 26, 1999, committed to work with the department towards securing reimbursement of the loan from the federal environmental protection agency under 40 CFR 35.2032. The department may not charge any interest on the loan. (10t) LOAN FOR A DRINKING WATER TREATMENT PLANT. Notwithstanding subs. (2), (4) to (10) and (12), during the 19992001 biennium, the department shall provide a loan of $1,100,000 to the village of Marathon for the upgrading or replacement of a drinking water treatment plant. The department may not charge any interest on the loan. The department may not require the municipality to repay the loan until the municipality receives a grant from the federal environmental protection agency for the upgrading or replacement of the drinking water treatment plant. If the federal environmental protection agency denies the grant or a portion of the grant, the village of Marathon shall repay the amount of the loan that exceeds the amount of the grant. (11) CONSTRUCTION. This section shall be liberally construed in aid of the purposes declared in sub. (1). (12) SUNSET. (a) Notwithstanding sub. (6), the department may not issue a grant award under the state program for a municipality that has not submitted to the department by January 2, 1989, a facility plan which meets the requirements of this section and is approvable by the department under this chapter. (b) Notwithstanding sub. (6), the department may not issue a grant award under the state program for planning or construction work after June 30, 1990.
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