SB-0910, As Passed Senate, October 18, 2016

SUBSTITUTE FOR

SENATE BILL NO. 910

     A bill to amend 1994 PA 451, entitled

"Natural resources and environmental protection act,"

by amending sections 19601, 19607, 19608, and 19608a (MCL

324.19601, 324.19607, 324.19608, and 324.19608a), sections 19601

and 19607 as added by 1998 PA 288, section 19608 as amended by 2012

PA 446, and section 19608a as added by 2003 PA 253, and by adding

section 19608b.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 19601. As used in this part:

     (a) "Baseline environmental assessment" means that term as

defined in sections 20101 and 21302.

(b) (a) "Bonds" means the bonds authorized under the clean

Michigan initiative act, 1998 PA 284, MCL 324.95101 to 324.95108.

     (c) "Brownfield project" or "project" means the entire project

to be undertaken, including, but not limited to, the actual site

remediation and its resulting economic development.

     (d) "Chief executive officer" means the mayor of a city, the

village manager of a village, the township supervisor of a

township, or the county executive of a county or, if the county

does not have an elected county executive, the chairperson of the

county board of commissioners.

(e) (b) "Corrective action" means that term as it is defined

in part 213.section 21302.

(f) (c) "Department" means the department of environmental

quality.

     (g) "Due care activities" means those activities conducted

under sections 20107a and 21304c.

     (h) "Eligible activities" for projects with funding allocated

under section 19608(1)(a)(iv) means:

     (i) Baseline environmental assessment activities.

     (ii) Investigations.

     (iii) Due care activities.

     (iv) Response activities, including response activities that

are more protective of the public health, safety, and welfare and

the environment than required by section 20107a or 21304c.

     (v) Removal and closure of underground storage tanks pursuant

to parts 211 and 213.

     (vi) Dust control related to construction activities.

     (vii) Industrial cleaning.

     (viii) Sheeting and shoring necessary for the removal of

materials exceeding part 201 cleanup criteria at projects requiring

a permit under part 301, 303, or 325.

     (ix) The following activities, provided that the total cost of

these activities does not exceed the total cost of project-related

activities identified in subparagraphs (i) to (viii):

     (A) Disposal of solid waste, as defined in part 115, from the

eligible property, provided it was not generated or accumulated by

the authority or the developer.

     (B) Lead, asbestos, or mold abatement, and demolition of

structures that are not a response activity.

     (C) Removal and disposal of lake or river sediments exceeding

part 201 unrestricted criteria from, at, or related to an economic

development project if the upland property either is a facility or

would become a facility as a result of the deposition of dredged

spoils.

     (i) "Eligible property" for projects with funding allocated

under section 19608(1)(a)(iv) means property that is known or

suspected to be a facility under part 201 or a site or property

under part 213 and that was used or is currently being used for

commercial, industrial, public, or residential purposes.

(j) (d) "Facility" means that term as it is defined in part

201.

(k) (e) "Fund" means the clean Michigan initiative bond fund

created in section 19606.

(l) (f) "Gaming facility" means a gaming facility regulated

under the Michigan gaming control and revenue act, the Initiated

Law of 1996, 1996 IL 1, MCL 432.201 to 432.226.

(m) (g) "Local unit of government" means a county, city,

village, or township, or an agency of a county, city, village, or

township; or a brownfield redevelopment authority, economic

development corporation, or an authority or other public body

created by or pursuant to state law.

     (n) "Measurable economic benefit" means the permanent jobs

that are created or retained, the capital invested, or the

increased tax base to the applicable county, city, village, and

township where the project is located.

     (o) "Measurable environmental benefit" means the extent that

the requirements of part 201 or part 213, or both, are advanced at

a brownfield project where environmental conditions inhibit the

site's redevelopment or reuse.

     (p) "Part 213 property" means a property as defined in section

21303.

(q) (h) "Response activity" means that term as it is defined

in part 201 or corrective action as defined in part 213.

     Sec. 19607. (1) The total proceeds of all bonds shall be

deposited into the fund and allocated as follows:

     (a) Not more than $335,000,000.00 shall be used for response

eligible activities at facilities and part 213 properties.

     (b) Not more than $50,000,000.00 shall be used for waterfront

improvements.

     (c) Not more than $25,000,000.00 shall be used for remediation

of contaminated lake and river sediments.

     (d) Not more than $50,000,000.00 shall be used for nonpoint

source pollution prevention and control projects or wellhead

protection projects.

     (e) Not more than $90,000,000.00 shall be used for water

quality monitoring and water resources protection and pollution

control activities.

     (f) Not more than $20,000,000.00 shall be used for pollution

prevention programs.

     (g) Not Except as provided under subsection (1)(a), not more

than $5,000,000.00 shall be used to abate lead hazards.

     (h) Not more than $50,000,000.00 shall be used for state park

infrastructure improvements.

     (i) Not more than $50,000,000.00 shall be used for local

recreation projects.

     (2) The state treasurer shall direct the investment of the

fund. Except as may be required to maintain the exclusion from

gross income of the interest paid on the bonds or to comply

otherwise with state or federal law, interest and earnings from

investment of the proceeds of any bond issue shall be allocated in

the same proportion as earned on the investment of the proceeds of

the bond issue.

     (3) Except as may be required to maintain the exclusion from

gross income of the interest paid on the bonds or to comply

otherwise with state or federal law, all repayments of principal

and interest earned under a loan program authorized by this part

shall be credited to the appropriate restricted subaccount of the

fund and used for the purposes authorized for that subaccount or to

pay debt service on any obligation issued which pledges the loan

repayments and the proceeds of which are deposited in that

subaccount.

     (4) The bond proceeds shall be expended in an appropriate

manner that maintains the tax exempt status of the bonds.

     (5) The unencumbered balance in the fund at the close of the

fiscal year shall remain in the fund and shall not revert to the

general fund.

     (6) The department shall provide an annual accounting of bond

proceeds spending on a cash basis to the department of treasury in

order for the state to comply with requirements set forth for

issuing tax exempt bonds, including arbitrage rebate calculations.

This accounting shall be submitted to the governor, the standing

committees of the house of representatives and the senate that

primarily address issues pertaining to the protection of natural

resources and the environment, and the appropriations committees in

the house of representatives and the senate.

     Sec. 19608. (1) Money in the fund that is allocated under

section 19607 shall be used for the following purposes:

     (a) Money allocated under section 19607(1)(a) shall be used by

the department to fund all of the following:

     (i) Corrective actions undertaken by the department to address

releases from leaking underground storage tanks pursuant to part

213.

     (ii) Response activities undertaken by the department at

facilities pursuant to part 201 to address public health and

environmental problems or to promote redevelopment.

     (iii) Assessment activities undertaken by the department to

determine whether a property is a facility.

     (iv) $75,000,000.00 shall be used to provide grants and loans

to local units of government and brownfield redevelopment

authorities created under the brownfield redevelopment financing

act, 1996 PA 381, MCL 125.2651 to 125.2672, for response eligible

activities at known or suspected facilities eligible properties

with redevelopment potential. Of the money provided for in this

subparagraph, not more than $50,000,000.00 shall be used to provide

grants and not more than $25,000,000.00 shall be used to provide

loans pursuant to the clean Michigan initiative grant and revolving

loan program created in section 19608a. However, grants or loans

provided for in this subparagraph shall not be made to a local unit

of government or a brownfield redevelopment authority that is

responsible for causing a release or threat of release under part

201 or part 213 at the site proposed for grant or loan funding,

except as provided in section 19608b(f).

     (b) Money allocated under section 19607(1)(b) shall be used

for waterfront redevelopment grants pursuant to part 795.

     (c) Money allocated under section 19607(1)(c) shall be used

for response activities for the remediation of contaminated lake

and river sediments pursuant to part 201.

     (d) Money allocated under section 19607(1)(d) shall be used

for nonpoint source pollution prevention and control grants or

wellhead protection grants pursuant to under part 88.

     (e) Money allocated under section 19607(1)(e) shall be

deposited into the clean water fund created in section 8807.

     (f) Money allocated under section 19607(1)(f) shall be

expended as follows:

     (i) $10,000,000.00 shall be deposited into the retired

engineers technical assistance program fund created in section

14512.

     (ii) $5,000,000.00 shall be deposited into the small business

pollution prevention assistance revolving loan fund created in

section 14513.

     (iii) $5,000,000.00 shall be used by the department to

implement pollution prevention activities other than those funded

under subparagraphs (i) and (ii).

     (g) Money that is allocated under section 19607(1)(g) shall be

used by the department of community health and human services for

remediation and physical improvements to structures to abate or

minimize exposure of persons to lead hazards.

     (h) Money allocated under section 19607(1)(h) shall be used

for infrastructure improvements at Michigan state parks as

determined by the department of natural resources. The installation

or upgrade of drinking water systems or rest room facilities shall

be the first priority.

     (i) Money allocated under section 19607(1)(i) shall be used to

provide grants to local units of government for local recreation

projects pursuant to under part 716.

     (2) Of the money allocated under section 19607(1)(a),

$93,000,000.00 shall be used for facilities or part 213 properties

that pose an imminent or substantial endangerment to the public

health, safety, or welfare, or to the environment. For purposes of

this subsection, facilities or part 213 properties that pose an

imminent or substantial endangerment shall include, but are not

limited to, those where public access poses hazards because of

potential exposure to chemicals or safety risks and where drinking

water supplies are threatened by contamination.

     (3) Before expending any funds allocated under subsection

(1)(c) at a site that is an area of concern as designated by the

parties to the Great Lakes water quality agreement of 1978 as

amended by protocol signed September 7, 2012, the department shall

notify the public advisory council established to oversee that area

of concern regarding the development, implementation, and

evaluation of response activities to be conducted with money in the

fund at that area of concern.

     (4) Money in the fund shall not be used to develop a municipal

or commercial marina.

(4) (5) Money provided in the fund may be used by the

department of treasury to pay for the cost of issuing bonds and by

the department and the department of natural resources to pay

department costs as provided in this subsection. Not more than 3%

of the total amount specified in section 19607(1)(a) to (f) shall

be available for appropriation to the department to pay its costs

directly associated with the completion of a project authorized by

section 19607(1)(a) to (f). Not more than 3% of the total amount

specified in section 19607(1)(h) and (i) shall be available for

appropriation to the department of natural resources to pay its

costs directly associated with the completion of a project

authorized by section 19607(1)(h) and (i). It is the intent of the

legislature that general fund appropriations to the department and

to the department of natural resources shall not be reduced as a

result of costs funded pursuant to this subsection.

(5) (6) A grant shall not be provided under this part for a

project that is located at any of the following:

     (a) Land sited for use as a gaming facility or as a stadium or

arena for use by a professional sports team.

     (b) Land or other facilities owned or operated by a gaming

facility or by a stadium or arena for use by a professional sports

team.

     (c) Land within a project area described in a project plan

pursuant to the economic development corporations act, 1974 PA 338,

MCL 125.1601 to 125.1636, for a gaming facility.

(6) (7) The department, the department of natural resources,

and the department of community health and human services shall

each submit annually a list of all projects that will be undertaken

by that department that are recommended to be funded under this

part. The list shall be submitted to the governor, the standing

committees of the house of representatives and the senate that

primarily address issues pertaining to the protection of natural

resources and the environment, and the appropriations committees in

the house of representatives and the senate. The list shall be

submitted to the legislative committees not later than February 15

of each year. This list shall also be submitted before any request

for supplemental appropriation of bond funds. For each eligible

project, the list shall include the nature of the eligible project;

the county in which the eligible project is located; an estimate of

the total cost of the eligible project; and other information

considered pertinent by the administering state department. A

project that is funded by a grant or loan with money from the fund

does not need to be included on the list submitted under this

subsection. However, money in the fund that is appropriated for

grants and loans shall not be encumbered or expended until the

administering state department has reported those projects that

have been approved for a grant or a loan to the standing committees

of the house of representatives and the senate that primarily

address issues pertaining to the protection of natural resources

and the environment and to the appropriations subcommittees in the

house of representatives and the senate on natural resources and

environmental quality. Before submitting the first cycle of

recommended projects under subsection (1)(a), the The department

shall publish and disseminate post on its website the criteria it

will use in evaluating and recommending these projects for funding

under this part.

(7) (8) The legislature shall appropriate prospective or

actual bond proceeds for projects proposed to be funded.

Appropriations shall be carried over to succeeding fiscal years

until the project for which the funds are appropriated is

completed.

(8) (9) Not later than December 31 of each year, the

department, the department of natural resources, and the department

of community health and human services shall each submit a list of

the projects financed under this part by that department to the

governor, the standing committees of the house of representatives

and the senate that primarily address issues pertaining to the

protection of natural resources and the environment, and the

subcommittees of the house of representatives and the senate on

appropriations on natural resources and environmental quality. Each

list shall include the name, address, and telephone number of the

recipient or participant, if appropriate; the name and location of

the project; the nature of the project; the amount of money

allocated to the project; the county in which the project is

located; a brief summary of what has been accomplished by the

project; and other information considered pertinent by the

administering state department.

     Sec. 19608a. (1) The department shall create a clean Michigan

initiative grant and revolving loan program for the purpose of

making grants and loans to local units of government and brownfield

redevelopment authorities created under the brownfield

redevelopment financing act, 1996 PA 381, MCL 125.2651 to 125.2672,

for response activities at known or suspected facilities with

redevelopment potential.under section 19608(1)(a)(iv) for eligible

activities at eligible properties with redevelopment potential.

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

applications for loans throughout the year. The department shall

develop written instructions for prospective applicants, including

the criteria that will be used in application review and approval.

     (3) Final application decisions shall be made by the

department within 90 days of submittal of a complete loan

application.

     (4) A complete application shall include all of the following:

     (a) A description of the proposed eligible activities.

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

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

activities.

     (d) The location of the property.

     (e) The current ownership and ownership history of the

property.

     (f) The current use of the property.

     (g) A detailed history of the use of the property.

     (h) The existing and proposed future zoning of the property.

     (i) 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.

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

potential.

     (k) A resolution from the governing body of the applicant

committing to repayment of the loan according to the terms of this

section.

     (l) Other information as specified by the department in its

written instructions.

     (5) To receive loan funds, approved applicants must enter into

a loan agreement with the department. At a minimum, the loan

agreement shall contain all of the following:

     (a) The approved eligible activities to be undertaken with

loan funds.

     (b) An implementation schedule for the approved eligible

activities.

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

following:

     (i) The loan recipient shall submit a progress status report

to the department every 6 months during the implementation

schedule.

     (ii) The loan recipient shall provide a final report within 3

months of completion of the loan-funded activities that includes

documentation of project costs and expenditures, including invoices

and proof of payment.

     (d) If the property is not owned by the loan recipient, an

executed agreement that has been approved by the department that

meets the requirements of subsection (4)(i).

     (e) Other provisions as considered appropriate by the

department.

     (6) As used in this section:

     (a) "Baseline environmental assessment" and "response

activity" mean those terms as they are defined in section 20101.

     (b) "Due care activities" means those activities conducted

under section 20107a.

     (c) "Eligible activities" means baseline environmental

assessment activities, due care activities, and any additional

response activity. Eligible activities include only those

activities necessary to facilitate redevelopment. All eligible

activities must be consistent with a work plan or remedial action

plan pursuant to section 15 of the brownfield redevelopment

financing act, 1996 PA 381, MCL 125.2665. Unless otherwise approved

by the director, only activities carried out and costs incurred

after execution of a loan agreement are eligible.

     (2) Grants provided under the clean Michigan initiative grant

and revolving loan program that are used solely to determine

whether a property is a site or a facility and, if so, to

characterize the nature and extent of the contamination by means of

an assessment or investigation shall be issued only if all of the

following conditions are met:

     (a) The characterization of the nature and extent of

contamination includes an estimate of response activity costs in

relation to the value of the property in an uncontaminated state

and identifies future potential limitations on the use of the

property based upon current environmental conditions.

     (b) The property has demonstrable economic development

potential. This subdivision does not require a specific development

proposal to be identified.

     (3) The department shall not make a grant or a loan under the

clean Michigan initiative grant and revolving loan program unless

all of the following conditions are met:

     (a) The applicant demonstrates that the proposed project is

in, or will result in, compliance with all applicable state laws

and rules.

     (b) The applicant demonstrates to the department the

capability to carry out the proposed project.

     (c) The applicant demonstrates to the department that there is

an identifiable source of funds for the future maintenance and

operation of the activities funded with money from the fund, if

appropriate.

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

undergone an audit conducted in accordance with generally accepted

auditing standards or an emergency manager has been appointed for

the applicant under the local financial stability and choice act,

2012 PA 436, MCL 141.1541 to 141.1575.

     (e) Within the last 24 months, the department has not revoked

or terminated a grant to the applicant and the administering state

department has not determined that the applicant demonstrated an

inability to manage a grant.

     Sec. 19608b. With respect to the grants and loans under

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

     (a) An applicant must be a local unit of government.

     (b) A recipient is not eligible to receive more than the

following:

     (i) Except as provided in subparagraphs (iii) and (iv), 1

grant per year, not to exceed $1,000,000.00 per grant.

     (ii) Except as provided in subparagraphs (iii) and (iv), 1

loan per year, not to exceed $1,000,000.00 per loan.

     (iii) Brownfield projects that have significant economic and

environmental benefit may be considered for more than 1 grant or

loan over consecutive years, provided that the loan or grant

agreement includes project-specific benchmarks for eligible

activities and failure to satisfy a benchmark would terminate the

project's eligibility for additional grant or loan funding, as

applicable.

     (iv) A local unit of government may be considered for and

awarded more than 1 grant or loan in a single year relating to

multiple unrelated brownfield projects if the projects are

determined to have significant environmental or economic benefits

to the recipient's municipality or region.

     (c) Except for a grant described in section 19608a(2), the

department may award a grant only if it determines that both of the

following apply:

     (i) The property is an eligible property.

     (ii) The proposed development of the property is expected to

result in measurable economic benefit in excess of the grant amount

requested by the applicant.

     (d) The department may award a loan only if it determines that

both of the following apply:

     (i) The property is known or suspected to be an eligible

property.

     (ii) The property has economic development potential based on

the applicant's planned use of the property.

     (e) The department may approve funding for response activities

that are more protective of the public health, safety, and welfare

and the environment than required by section 20107a or 21304c if

those activities provide public health or environmental benefit. In

its review of a work plan that includes activities that are more

protective of the public health, safety, and welfare and the

environment, the department may consider, but is not limited to,

all of the following:

     (i) Proposed new land use and reliability of restrictions to

prevent exposure to contamination.

     (ii) Cost of implementation activities minimally necessary to

satisfy due care requirements, the incremental cost of response

activities relative to the cost of activities minimally necessary

to satisfy due care requirements, and the total cost of all

response activities.

     (iii) Long-term obligations associated with leaving

contamination in place and the value of reducing or eliminating

these obligations.

     (f) A grant or loan shall not be used to fund response

activities that benefit a party that is responsible for an activity

causing a release at the eligible property, except that a loan may

be used to fund appropriate response activities related to

redevelopment and due care activities necessary to facilitate

redevelopment of the property if the party that is responsible for

an activity causing a release at the eligible property meets all of

the following:

     (i) Is a local unit of government.

     (ii) Has a proposed redevelopment for the property with

measurable economic benefit.

     (iii) Provides a minimum of 50% local matching funds for the

project.

     (g) A grant or loan may be used to fund due care activities

necessary to facilitate redevelopment if the party responsible for

an activity causing a release is not the developer of proposed

redevelopment.

     (h) A loan may be used to fund response activities if both of

the following are met:

     (i) A party responsible for an activity causing a release is

neither the seller nor the developer of the property to receive

funding.

     (ii) The recipient can show that response activities are

appropriate in relation to the redevelopment.

     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. 908.

     (b) Senate Bill No. 909.

     (c) Senate Bill No. 911.

     (d) Senate Bill No. 912.

     (e) Senate Bill No. 913.