SB-0912, As Passed House, December 14, 2016

SB-0912, As Passed Senate, October 18, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

SENATE BILL No. 912

 

 

April 21, 2016, Introduced by Senator KNEZEK and referred to the Committee on Commerce.

 

 

 

     A bill to amend 1994 PA 451, entitled

 

"Natural resources and environmental protection act,"

 

by amending sections 19609, 19610, 19611, and 19612 (MCL 324.19609,

 

324.19610, 324.19611, and 324.19612), sections 19609, 19610, and

 

19611 as added by 1998 PA 288 and section 19612 as amended by 2014

 

PA 115, and by adding section 19610a.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 19609. (1) An application for a grant or a loan from the

 

fund shall be made on a form or in a format prescribed by the

 

administering state department. The administering state department

 

may require the applicant to provide any information reasonably

 

necessary to allow the administering state department to make a

 

determination required by this part.

 


     (2) Of the funds to be used to provide grants and loans under

 

section 19608(1)(a)(iv), the following apply:

 

     (a) The department shall accept, and consider for approval,

 

applications for grants and loans throughout the year.

 

     (b) The department shall make final application decisions

 

within 90 days after receipt of a complete grant or loan

 

application.

 

     (c) A complete application includes all of the following:

 

     (i) A description of the proposed eligible activities and the

 

reasons they should be funded.

 

     (ii) An itemized budget for the proposed eligible activities.

 

     (iii) A schedule for the completion of the proposed eligible

 

activities.

 

     (iv) The location of the property.

 

     (v) The current ownership and ownership history of the

 

property.

 

     (vi) The relevant history of the use of the property.

 

     (vii) The current use of the property.

 

     (viii) The existing and proposed future zoning of the

 

property.

 

     (ix) If the property is not owned by the applicant, a draft of

 

an enforceable agreement between the property owner and the

 

applicant that commits the property owner to cooperate with the

 

applicant, including a commitment to allow access to the property

 

to complete, at a minimum, the proposed eligible activities.

 

     (x) A description of the property's economic redevelopment

 

potential.


     (xi) For loans, a resolution from the governing body of the

 

applicant committing to repayment of the loan.

 

     (xii) A letter from the chief executive officer or highest

 

ranking appointed official indicating that the local unit of

 

government supports the brownfield project and that the brownfield

 

project complies with all local zoning and planning ordinances.

 

     (xiii) Any other relevant information the department requires.

 

     Sec. 19610. The administering state department shall not make

 

a grant or a loan with money from the fund unless all of the

 

following conditions are met:

 

     (a) The applicant demonstrates that the proposed project is in

 

compliance with all applicable state laws and rules or will result

 

in compliance with state laws and rules.

 

     (b) The applicant demonstrates to the administering state

 

department the capability to carry out the proposed project.

 

     (c) The applicant demonstrates to the administering state

 

department that there is an identifiable source of funds for the

 

future maintenance and operation of the proposed project, if

 

appropriate.

 

     (d) Within the last 24 months, the applicant has successfully

 

undergone an audit conducted in accordance with generally accepted

 

auditing standards.

 

     (e) Within the last 24 months, the applicant has not had a

 

grant from the administering state department revoked or terminated

 

or had the administering state department determine that the

 

applicant demonstrated an inability to manage a grant.

 

     (1) Upon receipt of a grant or loan application, for funding


provided under section 19608(1)(a)(iv), the department shall review

 

the application based on the following considerations:

 

     (a) Whether the brownfield project proposed to be funded is

 

authorized by this part.

 

     (b) Whether the brownfield project is consistent with the

 

local planning and zoning for the area in which the project is

 

located.

 

     (c) Whether the brownfield project provides measurable

 

environmental benefit.

 

     (d) Whether the brownfield project provides measurable

 

economic benefit or will significantly contribute to the local unit

 

of government's economic and community redevelopment or the

 

revitalization of adjacent neighborhoods.

 

     (e) The viability of the redevelopment plan.

 

     (f) The level of public and private commitment and other

 

resources available for the project.

 

     (g) How the brownfield project relates to a broader economic

 

and community development plan for the local unit of government as

 

a whole.

 

     (h) Other criteria that the department considers relevant.

 

     (2) The department shall issue grants under section

 

19608(1)(a)(iv) for brownfield projects that the department

 

determines meet the requirements of this part and will contribute

 

to the revitalization of underutilized properties.

 

     Sec. 19610a. For the funds to be used to provide grants and

 

loans under section 19608(1)(a)(iv), all of the following apply:

 

     (a) To receive grant or loan funds, approved applicants must


enter into a grant or loan agreement with the department. At a

 

minimum, the grant or loan agreement shall contain all of the

 

following:

 

     (i) The approved eligible activities to be undertaken with

 

grant or loan funds.

 

     (ii) An implementation schedule for the approved eligible

 

activities.

 

     (iii) Reporting requirements, including, at a minimum, the

 

following:

 

     (A) The grant or loan recipient shall submit progress status

 

reports to the department during the implementation of the

 

brownfield project that include documentation of project costs and

 

expenditures, at a frequency determined by the department.

 

     (B) The grant or loan recipient shall provide a final report

 

upon completion of the grant- or loan-funded activities within a

 

time frame determined by the department.

 

     (iv) If the property is not owned by the grant or loan

 

recipient, an executed agreement that meets the requirements of

 

section 19609(2)(c)(ix).

 

     (v) When entering into a loan agreement, the loan recipient

 

shall provide financial assurance of repayment of the loan

 

including pledges of revenue sharing, escrow account, letter of

 

credit, or other acceptable mechanism negotiated with the

 

department. Use of real property as a means to secure a loan is not

 

considered an acceptable mechanism. The department is authorized to

 

include in the loan agreement a provision that permits the release

 

of the financial assurance in favor of a pledge of the right of


first refusal of the tax increment revenue to the department under

 

the brownfield redevelopment financing act, 1996 PA 381, MCL

 

125.2651 to 125.2672, if the brownfield project has been

 

substantially completed and the annual tax increment being captured

 

relative to the brownfield project is equal to or greater than 125%

 

of the annual loan reimbursement payment.

 

     (vi) Other provisions as considered appropriate by the

 

department.

 

     (b) All eligible activities must be consistent with an

 

approved grant or loan work plan.

 

     (c) Unless otherwise approved by the director of the

 

department, only activities carried out and costs incurred after

 

execution of a grant or loan agreement are eligible.

 

     (d) Grant funds shall be disbursed on a reimbursement basis

 

upon receipt of appropriate documentation.

 

     (e) Loan funds shall be disbursed in draws based on an

 

approved work plan, and supporting documentation must be submitted

 

after expenses are incurred.

 

     (f) The department shall specify documentation requirements

 

for grants and loans on a form prescribed for requesting

 

reimbursement or draws.

 

     Sec. 19611. (1) Prior to making a grant or loan with money

 

from the fund, the administering state department shall consider

 

the extent to which the making of the grant or loan contributes to

 

the achievement of a balanced distribution of grants and loans

 

throughout the state.

 

     (2) In determining whether a grant or a loan is appropriate


under section 19608(1)(a)(iv), the department shall consider

 

whether the project is likely to be undertaken without state

 

assistance, the availability of state funds from other sources, the

 

degree of private sector participation in the type of project under

 

consideration, and other factors considered important by the

 

department.

 

     Sec. 19612. (1) A recipient of a grant or a loan made with

 

money from the fund shall do both of the following:

 

     (a) Keep an accounting of the money spent on the project or

 

facility in a generally accepted manner. The accounting shall be is

 

subject to a postaudit.

 

     (b) Obtain authorization from the administering state

 

department before implementing a change that significantly alters

 

the proposed project.

 

     (2) The administering state department may revoke a grant or a

 

loan made with money from the fund or withhold payment if the

 

recipient fails to comply with the terms and conditions of the

 

grant or loan agreement or with the requirements of this part or

 

the rules promulgated under this part, or with other applicable law

 

or rules. If a grant or loan is revoked, the administering state

 

department may recover all funds awarded.

 

     (3) The administering state department may withhold a grant or

 

a loan until the administering state department determines that the

 

recipient is able to proceed with the proposed project.

 

     (4) To assure timely completion of a project, the

 

administering state department may withhold 10% of the grant or

 

loan amount until the project is complete.


     (5) If an approved applicant fails to sign a grant or loan

 

agreement within 90 days after receipt of a written grant or loan

 

offer by the administering state department, the administering

 

state department may cancel the grant or loan offer. The applicant

 

may not appeal or contest a cancellation pursuant to this

 

subsection.

 

     (6) The administering state department may terminate a grant

 

or loan agreement and require immediate repayment of the grant or

 

loan if the recipient uses grant or loan funds for any purpose

 

other than for the approved activities specified in the grant or

 

loan agreement. The administering state department shall provide

 

the recipient written notice of the termination 30 days prior to

 

the termination.

 

     (7) A loan made with money in the fund shall have must be made

 

on the following terms:

 

     (a) A loan interest rate of not more than 50% of the prime

 

rate as determined by the administering state department as of the

 

date of approval of the loan.

 

     (b) Loan recipients shall repay loans in equal annual

 

installments of principal and interest beginning not later than 5

 

years after execution of a loan agreement the first draw of the

 

loan and concluding not later than 15 years after execution of a

 

loan agreement.the first draw of the loan.

 

     (c) A loan recipient shall enter into a loan agreement with

 

the administering state department.

 

     (d) Upon default of a loan, as determined by the administering

 

state department, or upon the request of the loan recipient as a


method to repay the loan, the department of treasury shall withhold

 

from state payments from payable to the loan recipient in amounts

 

consistent with the repayment schedule in the loan agreement until

 

the loan is repaid. The department of treasury shall deposit these

 

the withheld funds or collected money into the fund until the loan

 

is repaid.

 

     (8) Upon request of a loan recipient and a showing of

 

financial hardship related to the project that was financed in

 

whole or in part by the loan, the administering state department

 

may renegotiate the terms of any outstanding loan, including the

 

length of the loan, the interest rate, and the repayment terms.

 

However, the administering state department shall not reduce or

 

eliminate the amount of the outstanding loan principal. The

 

department shall report to the legislature the number of loans

 

refinanced under this subsection, the local unit of government or

 

authority responsible for each loan refinanced, and the change in

 

the terms of the loan, as appropriate. This information may be

 

included in the report prepared by the department under section 16

 

of the brownfield redevelopment financing act, 1996 PA 381, MCL

 

125.2666.

 

     (9) Loan payments and interest shall be deposited in the fund.

 

     (10) Upon default of a loan, as determined by the

 

administering state department, or upon the request of the loan

 

recipient as a method to repay the loan, the department of treasury

 

shall withhold from the loan recipient state payments in amounts

 

consistent with the repayment schedule in the loan agreement until

 

the loan is repaid. The department of treasury shall deposit these


withheld funds into the fund until the loan is repaid.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.

 

     Enacting section 2. This amendatory act does not take effect

 

unless all of the following bills of the 98th Legislature are

 

enacted into law:

 

     (a) Senate Bill No. 911.                                   

 

         

 

     (b) Senate Bill No. 908.                                   

 

         

 

     (c) Senate Bill No. 910.                                   

 

         

 

     (d) Senate Bill No. 913.                                   

 

         

 

     (e) Senate Bill No. 909.