Wisconsin Administrative Code
Department of Natural Resources
NR 700-799 - Environmental Protection - Investigation and Remediation of Environmental Contamination
Chapter NR 747 - PETROLEUM ENVIRONMENTAL CLEANUP FUND
Subchapter III - Reimbursement Procedures
Section NR 747.305 - Costs associated with loans

Universal Citation: WI Admin Code § NR 747.305

Current through August 26, 2024

(1) INTEREST EXPENSE.

(a) Allowability of interest costs. The fund will reimburse interest expense if a loan is specifically secured for a remediation and the proceeds are applied only to the cleanup at the site. To be eligible, interest costs cannot be combined with retrofits or construction loans and shall be site specific. Reasonable money management shall be practiced to avoid unnecessary accrual of interest charges. Interest expenses shall be managed in the most cost-effective manner possible and invoices shall be paid in a timely manner to avoid interest costs or late charges. If a line of credit is used to provide funding for a remediation, clear documentation shall be provided on the disbursements and interest expenses.

(b) Ineligible interest expenses. The PECFA fund shall not reimburse for the following items:

1. The opportunity cost of money or interest income or dividend income lost because of a decision to use internal funding for a remediation;

2. Interest costs which are not clearly documented;

3. Interest costs or late charges on invoices or bills.

4. Additional interest costs accrued for the use of PECFA loan proceeds to earn money or for investment purposes.

5. Interest costs which are specified in s. 292.63(4) (c) 8, Stats.

Note: Section 292.63(4) (c) 8, Stats., reads as follows: "Interest costs incurred by an applicant that exceed interest at the following rate:

a. If the applicant has gross revenues of not more than $25,000,000 in the most recent tax year before the applicant submits a claim, 1% under the prime rate.

b. If the applicant has gross revenues of more than $25,000,000 in the most recent tax year before the applicant submits a claim, 4%."

6. Interest costs which are ineligible under s. 292.63(4) (cc), Stats.

Note: Section 292.63(4) (cc), Stats., reads as follows: "Ineligibility for interest reimbursement. 1. a. Except as provided in subd. 1m. or 2., if an applicant's final claim is submitted more than 120 days after receiving written notification that no further remedial action is necessary with respect to the discharge, interest costs incurred by the applicant after the 60th day after receiving that notification are not eligible costs.

c. Except as provided in subd. 2., if an applicant does not complete the investigation of the petroleum product discharge by the first day of the 61st month after the month in which the applicant notified the department under sub. (3) (a) 3. or October 1, 2003, whichever is later, interest costs incurred by the applicant after the later of those days are not eligible costs.

1m. If an applicant received written notification that no further remedial action is necessary with respect to a discharge before September 1, 2001, and the applicant's final claim is submitted more than 120 days after September 1, 2001, interest costs incurred by the applicant after the 120th day after September 1, 2001, are not eligible costs.

2. Subdivision 1. does not apply to any of the following:

a. An applicant that is a local unit of government, if federal or state financial assistance other than under this section, has been provided for that expansion or redevelopment.

b. An applicant that is engaged in the expansion or redevelopment of brownfields, as defined in s. 238.13(1) (a), if federal or state financial assistance other than under this section, has been provided for that expansion or redevelopment."

Note: Other sections of this code may also specify interest costs that are ineligible for reimbursement, such as ss. NR 747.12(3) (c) and 747.30(2) (i) and (j).

1. The following maximum rates are established for loans secured after January 31, 1993, and before October 15, 1997, for the purposes of a remediation:

a. Interest rate shall be reimbursable at no more than 2% above the prime rate.

b. Loan origination fees from the same lender shall be reimbursable only once, and at no more than 2 points of the loan principal. Where a later, larger loan is obtained to pay off a preceding loan, the origination fee for the portion of the later loan that equals the preceding principal will not be reimbursed. A duplicative loan origination fee from a subsequent lender will not be reimbursed, unless the preceding loan was terminated by a different lender.

2. The following maximum rates are established for loans secured on or after October 15, 1997, for the purposes of a remediation:

a. Interest rate shall be reimbursable at no more than 1% above the prime rate.

(d) Annual services fees. Annual loan service fees charged on or before April 20, 1998, shall be reimbursable at no more than 1% of the unreimbursed amount and remaining available loan balance. Annual loan service fees charged after April 20, 1998, shall be reimbursable at no more than 1% of the outstanding unreimbursed loan amount.

(e) Documentation. A copy of the loan agreement documenting the interest rate, loan origination fees, and other costs, shall be submitted when requested by the department.

(f) Lending agreements. In lieu of the maximum rates specified in par. (d), the department may negotiate agreements with lending institutions to obtain lower rates. The department may solicit proposals from lending institutions to supply loans for PECFA remediations.

(g) Other items. In addition to the maximum rates established in par. (c), the following shall apply:

1. Annual loan service fees shall be charged no more frequently than once annually, and at a rate of no more than 1% on the outstanding balance.

2. Original and re-estimated loan amounts, to the extent feasible, shall reflect a sound estimate of the cost to perform the remediation. Excessive estimates which result in excessive or unnecessary interest costs may not be reimbursed by the PECFA fund.

(2) MINIMUM LOAN AMOUNTS. A lending institution may unilaterally establish a minimum loan amount of $100,000 or less. Minimum loan amounts of more than $100,000 and loan origination fees on minimum loans of more than $100,000 shall require prior written approval of the department.

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