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

Current through June 24, 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).
(c)
Maximum interest and related
				  costs.
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.
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.
(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.