(1) DEFINITIONS. In this section: (ag) “Clean water fund program” means the program administered under s. 281.58, with financial management provided under this section. (am) “Effluent limitation” has the meaning given in s. 283.01 (6). (b) “Market interest rate” means the effective interest rate on a fixed-rate revenue obligation issued by the state to fund a loan made under this section or, if the department of administration determines that there has been a significant change in interest rates after the fixed-rate revenue obligation has been issued or if a fixed-rate revenue obligation has not been issued by the state to fund a loan made under this section, the effective interest rate that the department of administration determines would have been paid if a fixed-rate revenue obligation had been issued on the date financial assistance is allotted. (c) “Municipality” means any city, town, village, county, county utility district, town sanitary district, public inland lake protection and rehabilitation district, metropolitan sewerage district, joint local water authority created under s. 66.0823, or federally recognized American Indian tribe or band in this state. (cm) “Safe drinking water loan program” means the program administered under s. 281.61, with financial management provided under this section. (e) “Treatment work” has the meaning given in s. 283.01 (18). (f) “Violator of an effluent limitation” means a person or municipality that after May 17, 1988, is not in substantial compliance with the enforceable requirements of its permit issued under ch. 283 for a reason that the department determines is or has been within the control of the person or municipality. (1m) ESTABLISHMENT OF PROGRAMS. (a) There is established a clean water fund program, administered under s. 281.58, with financial management provided under this section. (b) There is established a safe drinking water loan program, administered under s. 281.61, with financial management provided under this section. (2) GENERAL DUTIES. The department of administration shall: (a) Administer its responsibilities under this section and ss. 281.58 and 281.61 and s. 281.60, 2021 stats. (b) Cooperate with the department in administering the clean water fund program and the safe drinking water loan program and in servicing any outstanding loans made under s. 281.60, 2021 stats. (c) Accept and hold any letter of credit from the federal government through which the state receives federal capitalization grant payments and disbursements to the environmental improvement fund. (2m) INVESTMENT MANAGEMENT; ENVIRONMENTAL IMPROVEMENT FUND. (a) The department of administration may: 1. Subject to par. (b), direct the investment board under s. 25.17 (2) (d) to make any investment of the environmental improvement fund, or in the collection of the principal and interest of all moneys loaned or invested from that fund. 2. Subject to par. (b), purchase or acquire, commit on a standby basis to purchase or acquire, sell, discount, assign, negotiate, or otherwise dispose of, or pledge, hypothecate or otherwise create a security interest in, loans as the department of administration may determine, or portions or portfolios of participations in loans, made or purchased under this section. The disposition may be at the price and under the terms that the department of administration determines to be reasonable and may be at public or private sale. (b) The department of administration shall take an action under par. (a) only if all of the following conditions occur: 1. The action provides a financial benefit to the environmental improvement fund. 2. The action does not contradict or weaken the purposes of the environmental improvement fund. 3. The building commission approves the action before the department of administration acts. (3) FINANCIAL MANAGEMENT; BIENNIAL FINANCE PLAN. (a) By October 1 of each even-numbered year, the department of administration and the department jointly shall prepare a biennial finance plan that includes all of the following information: 1. An estimate of the wastewater treatment and safe drinking water project needs of the state for the 4 fiscal years of the next 2 biennia. 2. The total amount that the department of administration projects will be available to provide financial assistance for projects under subd. 1. during the next biennium. 4. The extent to which the funding for the clean water fund program and the safe drinking water loan program, in the environmental improvement fund, will be maintained in perpetuity. 4m. A chart showing detailed projected sources and uses of funds for projects under subd. 1. during the next biennium. 5. The most recent available audited financial statements of the past operations and activities of the clean water fund program and the safe drinking water loan program, the estimated environmental improvement fund capital available in each of the next 4 fiscal years for the clean water fund program and the safe drinking water loan program, and the projected environmental improvement fund balance for the clean water fund program and the safe drinking water loan program for each of the next 20 years given existing obligations and financial conditions. 5m. The percentage of market interest rate for the projects under subd. 1. 8. The amount and description of any fee expected to be charged during the next biennium under this section. 9. The impact of the biennial finance plan on the guideline under par. (b). (b) The department of administration and the department shall consider as a guideline in preparing the portion of the biennial finance plan for the clean water fund program that all state water pollution abatement general obligation debt service costs should not exceed 50 percent of all general obligation debt service costs to the state. (bm) The department and the department of administration jointly shall prepare and submit copies of all of the following to the building commission under s. 13.48 (26), to the joint committee on finance and to the chief clerk of each house of the legislature, for distribution under s. 13.172 (3) to the appropriate legislative standing committees generally responsible for legislation related to environmental issues: 1. By October 1 of each even-numbered year, the version of the biennial finance plan initially prepared as part of the budget process. 2. No later than 30 days after the day on which the biennial budget is submitted to the legislature under s. 16.45, amendments to the biennial finance plan that update the plan to reflect material approved by the governor for inclusion in the budget. 3. No later than 30 days after the day on which the governor signs the biennial budget, a version of the biennial finance plan, updated to reflect the adopted biennial budget act. (br) The joint committee on finance and each standing committee may submit to the building commission its recommendations and comments regarding each version of the biennial finance plan and amendments to the biennial finance plan, and whether the version of the biennial finance plan updated to reflect the adopted biennial budget act should be approved or disapproved as specified under s. 13.48 (26). If the building commission disapproves the version of the biennial finance plan that is updated to reflect the adopted biennial budget act, the department and the department of administration shall submit a revised biennial finance plan to the building commission. (j) No later than November 1 of each odd-numbered year, the department of administration and the department jointly shall submit a report, to the building commission and committees as required under par. (bm), on the operations and activities of the clean water fund program and the safe drinking water loan program for the previous biennium. (3e) CLEAN WATER FUND PROGRAM EXPENDITURES. (d) The department may expend, for financial assistance in a biennium other than financial hardship assistance under s. 281.58 (13) (e), an amount up to 95 percent of the amount available to provide financial assistance for projects under this section for that biennium. The department may expend such amount only from the percentage of the amount that is not available under par. (e) for financial hardship assistance. (e) The department may expend, for financial hardship assistance in a biennium under s. 281.58 (13) (e), an amount up to 5 percent of the amount available to provide financial assistance for projects under this section for that biennium. The department may expend such amount only from the percentage of the amount that is not available under par. (d) for financial assistance. (4) REVENUE OBLIGATIONS. (a) The clean water fund program and the safe drinking water loan program are revenue-producing enterprises or programs, as defined in s. 18.52 (6). (am) Deposits, appropriations or transfers to the environmental improvement fund for the purposes of the clean water fund program or the safe drinking water loan program may be funded with the proceeds of revenue obligations issued subject to and in accordance with subch. II of ch. 18 or in accordance with subch. IV of ch. 18 if designated a higher education bond. (b) The department of administration may, under s. 18.561 or 18.562, deposit in a separate and distinct fund in the state treasury or in an account maintained by a trustee outside the state treasury, any portion of the revenues derived under s. 25.43 (1). The revenues deposited with a trustee outside the state treasury are the trustee’s revenues in accordance with the agreement between this state and the trustee or in accordance with the resolution pledging the revenues to the repayment of revenue obligations issued under this subsection and to make payments under an agreement or ancillary arrangement entered into under s. 18.55 (6) with respect to revenue obligations issued under this subsection. (c) The building commission may pledge any portion of revenues received or to be received in the fund established in par. (b) or the environmental improvement fund to secure revenue obligations issued under this subsection. The pledge shall provide for the transfer to the environmental improvement fund of all pledged revenues, including any interest earned on the revenues, which are in excess of the amounts required to be paid under s. 20.320 (1) (c) and (u) and (2) (c) and (u) for the purposes of the clean water fund program and the safe drinking water loan program. The pledge shall provide that the transfers be made at least twice yearly, that the transferred amounts be deposited in the environmental improvement fund and that the transferred amounts are free of any prior pledge. (d) The department of administration shall have all other powers necessary and convenient to distribute the pledged revenues and to distribute the proceeds of the revenue obligations in accordance with subch. II of ch. 18 or in accordance with subch. IV of ch. 18 if designated a higher education bond. (e) The department of administration may enter into agreements with the federal government or its agencies, political subdivisions of this state, individuals or private entities to insure or in any other manner provide additional security for the revenue obligations issued under this subsection. (f) Revenue obligations may be contracted by the building commission when it reasonably appears to the building commission that all obligations incurred under this subsection, and all payments under an agreement or ancillary arrangement entered into under s. 18.55 (6) with respect to revenue obligations issued under this subsection, can be fully paid on a timely basis from moneys received or anticipated to be received. Revenue obligations issued under this subsection for the clean water fund program and safe drinking water loan program shall not exceed $2,526,700,000 in principal amount, excluding obligations issued to refund outstanding revenue obligation notes. The building commission may contract additional revenue obligations in an amount up to $24,700,000. The building commission may contract additional revenue obligations in an amount up to $46,000,000. The building commission may contract additional revenue obligations in an amount up to $732,250,100. (g) Unless otherwise expressly provided in resolutions authorizing the issuance of revenue obligations or in other agreements with the holders of revenue obligations, each issue of revenue obligations under this subsection shall be on a parity with every other revenue obligation issued under this subsection and in accordance with subch. II of ch. 18 or with subch. IV of ch. 18 if designated a higher education bond. (9) CONDITIONS OF FINANCIAL ASSISTANCE. (ad) A loan approved under the safe drinking water loan program shall be fully amortized not later than 30 years after the expected date of completion of the project that it funds, as determined by the department of administration, and require the repayment of principal and interest, if any, to begin not later than 18 months after the expected date of completion of the project that it funds, as determined by the department of administration. (ag) A loan approved under the clean water fund program shall be for no longer than 30 years or the useful life of the project, whichever is less, as determined by the department of administration. The loan shall be fully amortized not later than 30 years after the original date of the financial assistance agreement or the end of the useful life of the project, whichever is less, as determined by the department of administration. Repayment of principal and interest, if any, shall begin not later than 12 months after the expected date of completion of the project that the loan funds, as determined by the department of administration. (am) The department of administration, in consultation with the department, may establish those terms and conditions of a financial assistance agreement that relate to its financial management, including what type of municipal obligation, as set forth under sub. (13f), if applicable, is required for the repayment of the financial assistance. Any terms and conditions established under this paragraph by the department of administration shall comply with the requirements of this section and s. 281.58 or 281.61. In setting the terms and conditions, the department of administration may consider factors that the department of administration finds are relevant, including the type of obligation evidencing the loan, the pledge of security for the obligation and the applicant’s creditworthiness. (b) As a condition of receiving financial assistance under the clean water fund program or the safe drinking water loan program, an applicant shall do all of the following: 1. Pledge the security, if any, required by the rules promulgated by the department of administration under this section and s. 281.58 or 281.61. 2. Demonstrate to the satisfaction of the department of administration the financial capacity to assure sufficient revenues to operate and maintain the project for its useful life and to pay the debt service on the obligations that it issues for the project. (11) FINANCIAL ASSISTANCE PAYMENTS. (a) The department of natural resources and the department of administration may enter into a financial assistance agreement with an applicant for which the department of administration has allocated financial assistance under s. 281.58 (9m) or 281.61 (8) if the applicant meets the conditions under sub. (9) and the other requirements under this section and s. 281.58 or 281.61. (am) The department of administration shall make the financial assistance payments to an applicant that has entered into a financial assistance agreement under par. (a) or to the applicant’s designated agent. (b) If a municipality fails to make a principal repayment or interest payment after its due date, the department of administration shall place on file a certified statement of all amounts due under this section and s. 281.58 or 281.61 or s. 281.60, 2021 stats. After consulting the department, the department of administration may collect all amounts due by deducting those amounts from any state payments due the municipality or may add a special charge to the amount of taxes apportioned to and levied upon the county under s. 70.60. If the department of administration collects amounts due, it shall remit those amounts to the fund to which they are due and notify the department of that action. (c) The department of administration may retain the last payment under a financial assistance agreement until the department of natural resources and the department of administration determine that the project is completed and meets the applicable requirements of this section and s. 281.58 or 281.61 or s. 281.60, 2021 stats., and that the conditions of the financial assistance agreement are met. (12) MUNICIPAL OBLIGATIONS. The department of administration may purchase or refinance obligations specified in s. 281.58 (6) (b) 1. and guarantee or purchase insurance for municipal obligations specified in s. 281.58 (6) (b) 3. if the department of administration and the department of natural resources approve the financial assistance under this section and s. 281.58. (13) LOANS FOR TRANSITION PROJECTS. (a) 1. Notwithstanding any other provision of this section and s. 281.58, a municipality that submits to the department by January 2, 1989, a facility plan meeting the requirements of s. 281.57 which is approvable under this chapter and that does not receive a grant award before July 1, 1990, only because the municipality is following a schedule contained in the facility plan and approved by the department and the municipality is in compliance with all applicable schedules contained in a permit issued under ch. 283 or because there are insufficient grant funds under s. 281.57, is eligible to receive financial assistance under this paragraph. The form of the financial assistance is a loan with an interest rate of 2.5 percent per year except that s. 281.58 (8) (b), (f) and (k) applies to projects receiving financial assistance under this paragraph. 2. Notwithstanding any other provision of this section or s. 281.58, the department shall make all loans under subd. 1. to municipalities ready to construct treatment works before the department provides or approves any other financial assistance under this section except for loans under par. (b). (b) 1. Notwithstanding any other provision of this section or s. 281.58, an unsewered municipality is eligible to receive financial assistance under this paragraph, in the form of a loan with an interest rate of 2.5 percent per year, which may be for original financing or refinancing for a collection system that is ineligible for financial assistance under s. 281.57 because of s. 281.57 (4) (b) 1. and that is being connected to an existing wastewater treatment plant if all of the following apply: a. The municipality applies to the department for financial assistance under s. 281.57 (5) for a construction project during 1988. b. Before January 1, 1989, the department issues a notice under s. 281.57 (6) that the department is ready to allocate funds to the municipality for the project. c. The municipality invites bids for the project in 1989. d. The municipality receives a grant under s. 281.57 for the construction of the project from the list developed by the department under s. 281.57 (6) (a) for applications received in 1988. 1m. Notwithstanding any other provision of this section or s. 281.58, a town sanitary district is eligible to receive financial assistance under this paragraph, in the form of a loan with an interest rate of 2.5 percent per year, for the extension of a collection system into an unsewered area that is added to the sanitary district if all of the following apply: a. The department has awarded a grant to the town sanitary district under s. 281.57 (4) (b) 1. c. for a collection system. b. The department determines that extension of the collection system into the unsewered area is necessary and costeffective. c. The sanitary district invites bids for and begins construction of the extension of the collection system before January 1, 1990. 2. Section 281.58 (8) (b), (f) and (k) applies to projects receiving financial assistance under this paragraph. 3. Notwithstanding any provision of this section or s. 281.58, the department shall annually allocate funds for loans under subds. 1. and 1m. before the department provides or approves any other financial assistance under this section or s. 281.58. (e) The department of administration and the department may not make loans under s. 144.241 (20), 1987 stats., as affected by 1989 Wisconsin Acts 31, 336 and 366, or under this subsection to a metropolitan sewerage district that serves a 1st class city that total more than $230,900,000. (13f) MUNICIPAL FUNDING OF FINANCIAL ASSISTANCE. Subject to the terms and conditions of its financial assistance agreement, a municipality may repay financial assistance costs received from the clean water fund program under s. 281.58 and under this section by any lawful method, including any one of the following methods or any combination of the methods: (a) Payment out of its general funds. (b) Payment out of the proceeds of the sale of obligations issued by it under ch. 67. (c) Payment out of the proceeds of the sale of public improvement bonds issued by it under s. 66.0619. (d) Payment out of the proceeds of revenue obligations issued by it under s. 66.0621. (e) Payment as provided under s. 66.0709. (f) Payment as provided under s. 66.0821 (2) (a) 1. (13m) LEGISLATIVE MORAL OBLIGATION. The building commission may, at the time the loan is made, by resolution designate a loan made under the clean water fund program as one to which this subsection applies. If at any time the payments received or expected to be received from a municipality on any loan so designated are pledged to secure revenue obligations of the state issued pursuant to subch. II of ch. 18 and are insufficient to pay when due principal of and interest on such loan, the department of administration shall certify the amount of such insufficiency to the secretary of administration, the governor and the joint committee on finance. If the certification is received by the secretary of administration in an even-numbered year before the completion of the budget under s. 16.43, the secretary of administration shall include the certified amount in the budget compilation. In any event, the joint committee on finance shall introduce in either house, in bill form, an appropriation of the amount so requested for the purpose of payment of the revenue obligation secured thereby. Recognizing its moral obligation to do so, the legislature hereby expresses its expectation and aspiration that, if ever called upon to do so, it shall make the appropriation. (13s) POWERS. The department of administration may audit, or contract for audits of, projects receiving financial assistance under the clean water fund program or the safe drinking water loan program or projects that received loans under s. 281.60, 2021 stats. (14) RULES. The department of administration shall promulgate rules that are necessary for the proper execution of this section and of its responsibilities under ss. 281.58 and 281.61 and s. 281.60, 2021 stats. (15) CONSTRUCTION. This section shall be liberally construed in aid of the purposes of this section.
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