November 29, 2016, Introduced by Rep. Faris and referred to the Committee on Appropriations.
A bill to amend 1994 PA 451, entitled
"Natural resources and environmental protection act,"
(MCL 324.101 to 324.90106) by adding part 198.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
PART 198
CLEAN MICHIGAN INITIATIVE
REAUTHORIZATION IMPLEMENTATION
Sec. 19801. As used in this part:
(a) "Bonds" means the bonds authorized under the clean
Michigan initiative reauthorization act.
(b) "Department" means the department of environmental
quality.
(c) "Fund" means the clean Michigan initiative reauthorization
bond fund created in section 19806.
(d) "Local unit of government" means a county, city, village,
or township, or an agency of a county, city, village, or township;
or an authority or other public body created by or pursuant to
state law.
Sec. 19802. The legislature finds and declares that the
environmental, natural resources, and public health protection
programs implemented under this part are a public purpose and of
paramount public concern in the interest of the health, safety, and
general welfare of the citizens of this state.
Sec. 19803. (1) The bonds shall be issued in 1 or more series,
each series to be in a principal amount, to be dated, to have the
maturities that may be either serial, term, or both, to bear
interest at a rate or rates, to be subject or not subject to prior
redemption, and if subject to prior redemption with or without call
premiums, to be payable at a place or places, to have or not have
provisions for registration as to principal only or as to both
principal and interest, to be in a form and to be executed in a
manner as shall be determined by resolution to be adopted by the
state administrative board. The bonds shall be subject to
covenants, directions, restrictions, or rights specified by
resolution to be adopted by the state administrative board as
necessary to ensure the marketability, insurability, or tax exempt
status of the bonds. The state administrative board shall rotate
the services of legal counsel when issuing bonds.
(2) The state administrative board may refund bonds issued
under this part by the issuance of new bonds, whether or not the
bonds to be refunded have matured or are subject to prior
redemption. The state administrative board may issue bonds partly
to refund bonds issued under this part and partly for any other
purpose provided by this part. The principal amount of any
refunding bonds issued under this section shall not be counted
against the limitation on principal amount provided in the clean
Michigan initiative reauthorization act.
(3) The state administrative board may approve insurance
contracts, agreements for lines of credit, letters of credit,
commitments to purchase bonds, and any other transaction to provide
security to assure timely payment or purchase of any bond issued
under this part.
(4) The state administrative board may authorize the state
treasurer, but only within limitations contained in the authorizing
resolution of the board, to do 1 or more of the following:
(a) Sell and deliver and receive payment for the bonds.
(b) Deliver bonds partly to refund bonds and partly for other
authorized purposes.
(c) Select which outstanding bonds will be refunded, if any,
by the new issue of bonds.
(d) Buy issued bonds at not more than their face value.
(e) Approve interest rates or methods for fixing interest
rates, prices, discounts, maturities, principal amounts, purchase
prices, purchase dates, remarketing dates, denominations, dates of
issuance, interest payment dates, redemption rights at the option
of the state or the owner, the place and time of delivery and
payment, and other matters and procedures necessary to complete the
authorized transactions.
(f) Execute, deliver, and pay the cost of remarketing
agreements, insurance contracts, agreements for lines of credit,
letters of credit, commitments to purchase bonds or notes, and any
other transaction to provide security to assure timely payments or
purchase of any bond issued under this part.
(5) The bonds are not subject to the revised municipal finance
act, 2001 PA 34, MCL 141.2101 to 141.2821.
(6) The bonds or any series of the bonds shall be sold at a
price as determined by the state administrative board.
(7) The bonds shall be sold in accordance with a schedule
established by the state administrative board.
(8) The issuance of bonds under this section is subject to the
agency financing reporting act, 2002 PA 470, MCL 129.171 to
129.177.
(9) For the purpose of more effectively managing its debt
service, the state administrative board may enter into an interest
rate exchange or swap, hedge, or similar agreement with respect to
its bonds or notes on the terms and payable from the sources and
with the security, if any, as determined by a resolution of the
state administrative board.
Sec. 19804. The bonds shall be fully negotiable under the
uniform commercial code, 1962 PA 174, MCL 440.1101 to 440.9994. The
bonds and the interest on the bonds shall be exempt from all
taxation by this state or any local unit of government.
Sec. 19805. The bonds are securities in which banks, savings
and loan associations, investment companies, credit unions, and
other persons carrying on a banking business; all insurance
companies, insurance associations, and other persons carrying on an
insurance business; and all administrators, executors, guardians,
trustees, and other fiduciaries may properly and legally invest
funds, including capital, belonging to them or within their
control.
Sec. 19806. (1) The clean Michigan initiative reauthorization
bond fund is created in the state treasury.
(2) The fund shall consist of all of the following:
(a) The proceeds of sales of the bonds and any premium and
accrued interest received on the delivery of the bonds.
(b) Any interest or earnings generated by the proceeds
described in subdivision (a).
(c) Any federal or other funds received.
(3) The department of treasury may establish restricted
subaccounts within the fund as necessary to administer the fund.
Sec. 19807. (1) The total proceeds of all bonds shall be
deposited into the fund and allocated as follows:
(a) Not more than $300,000,000.00 shall be used to abate lead
contamination in water used for drinking water or other household
purposes.
(b) Not more than $200,000,000.00 shall be used to abate lead
hazards in homes and buildings.
(c) Not more than $200,000,000.00 shall be used for
replacement sources of contaminated water supplies to protect water
resources and ensure water quality through both of the following:
(i) On-site wastewater system inspection and repair programs.
(ii) Restoration of natural watercourses through dam removal.
(d) Not more than $100,000,000.00 shall be used for pollution
prevention through nonpoint source pollution prevention and control
projects and wellhead protection projects.
(e) Not more than $100,000,000.00 shall be used for
remediation of contaminated lake and river sediments.
(f) Not more than $100,000,000.00 shall be used to clean up
sites of environmental contamination.
(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) The bond proceeds shall be expended in an appropriate
manner that maintains the tax exempt status of the bonds.
(4) 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.
(5) 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.
The department shall submit this accounting 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 public health, and the
appropriations committees in the house of representatives and the
senate.
Sec. 19808. (1) Money in the fund that is allocated under
section 19807 shall be used for the following purposes:
(a) Money that is allocated under section 19807(1)(a) shall be
used by the department for lead abatement grants from the lead
abatement fund under section 11e of the safe drinking water act,
1976 PA 399, MCL 325.1011f.
(b) Money that is allocated under section 19807(1)(b) shall be
deposited into the lead safe homes fund created in section 5474d of
the public health code, 1978 PA 368, MCL 333.5474d, to be used by
the department of health and human services for remediation and
physical improvements to structures to abate or minimize exposure
of persons to lead hazards pursuant to part 54A of the public
health code, 1978 PA 368, MCL 333.5451 to 333.5477.
(c) Money that is allocated under section 19807(1)(c) shall be
used as follows:
(i) By the department to provide water supply replacement for
persons served by a public water supply as defined in section 2 of
the safe drinking water act, 1976 PA 399, MCL 325.1002, that does
not meet state drinking water standards.
(ii) By the department, to implement an on-site wastewater
system inspection and repair program.
(iii) By the department of natural resources to restore
natural watercourses through the removal of dams.
(d) Money that is allocated under section 19807(1)(d) shall be
used for pollution prevention programs, including for nonpoint
source pollution prevention and control grants or wellhead
protection grants pursuant to part 88.
(e) Money that is allocated under section 19807(1)(e) shall be
used for response activities for the remediation of contaminated
lake and river sediments pursuant to part 201.
(f) Money that is allocated under section 19807(1)(f) shall be
deposited into the cleanup and redevelopment fund established in
section 20108.
(2) The money allocated under section 19807(1)(f) shall be
prioritized for use at sites of contamination that pose an imminent
or substantial endangerment to the public health, safety, or
welfare, or to the environment. For purposes of this subsection,
sites of contamination that pose an imminent or substantial
endangerment include, but are not limited to, those where public
access poses hazards because of potential exposure to hazardous
substances or safety risks or where drinking water supplies are
threatened by contamination.
(3) Before expending any funds allocated under subsection
(1)(e) at a site that is an area of concern as designated by the
parties to the Great Lakes water quality agreement, 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 provided in the fund may be used by the department
of treasury to pay for the cost of issuing bonds and by the
department, the department of natural resources, and the department
of health and human services to pay costs as provided in this
subsection. Not more than 3% of the amount specified in each
subdivision of section 19807(1) shall be available for
appropriation to the administering state department to pay its
costs directly associated with the completion of a project
authorized by that subdivision. It is the intent of the legislature
that general fund appropriations to the department, the department
of natural resources, and the department of health and human
services shall not be reduced as a result of costs funded pursuant
to this subsection.
(5) The department, the department of natural resources, and
the department of 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
lists 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 public health, and the appropriations
committees in the house of representatives and the senate. The
lists shall be submitted to the legislative committees not later
than February 15 of each year. The applicable list shall also be
submitted before any request for supplemental appropriation of bond
funds. For each eligible project, a 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 already funded, in whole or in
part, by a grant with money from the fund does not need to be
included on a list submitted under this subsection. However, money
in the fund that is appropriated for grants shall not be encumbered
or expended until the administering state department has reported
those projects that have been approved for a grant 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 public health and to the
appropriations subcommittees in the house of representatives and
the senate on natural resources, environmental quality, and public
health. Before submitting the first cycle of recommended projects
under subsection (1)(f), the department shall publish and
disseminate the criteria it will use in evaluating and recommending
these projects for funding.
(6) 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.
(7) Not later than December 31 of each year, the department,
the department of natural resources, and the department of 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 public health, and the
appropriation subcommittees of the house of representatives and the
senate on appropriations on natural resources, environmental
quality, and public health. 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. 19809. An application for a grant 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.
Sec. 19810. The administering state department shall not make
a grant 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.
Sec. 19811. Prior to making a grant with money from the fund,
the administering state department shall consider the extent to
which the making of the grant contributes to the achievement of a
balanced distribution of grants and loans throughout the state.
Sec. 19812. (1) A recipient of a grant 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 is subject
to a post audit.
(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 made
with money from the fund or withhold payment if the recipient fails
to comply with the terms and conditions of the grant 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 is
revoked, the administering state department may recover all funds
awarded.
(3) The administering state department may withhold a grant
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 amount
until the project is complete.
(5) If an approved applicant fails to sign a grant agreement
within 90 days after receipt of a written grant offer by the
administering state department, the administering state department
may cancel the grant offer. The applicant may not appeal or contest
a cancellation pursuant to this subsection.
(6) The administering state department may terminate a grant
agreement and require immediate repayment of the grant if the
recipient uses grant funds for any purpose other than for the
approved activities specified in the grant agreement. The
administering state department shall provide the recipient written
notice of the termination 30 days prior to the termination.
Sec. 19813. Every 2 years that state programs funded with
money from the fund continue to be administered, the auditor
general shall conduct a performance audit of these programs. Upon
completion of a performance audit under this section, the auditor
general shall submit a copy of the performance audit to the audited
department and to the legislature.
Sec. 19814. The department may promulgate rules necessary to
implement this part.
Enacting section 1. This amendatory act does not take effect
unless the question provided for in the clean Michigan initiative
reauthorization act is approved by a majority of the registered
electors voting on the question at the next general election.