HB-5395, As Passed Senate, May 24, 2016

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5395

     A bill to amend 1994 PA 451, entitled

"Natural resources and environmental protection act,"

by amending section 5204e (MCL 324.5204e), as added by 2012 PA 511.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 5204e. (1) In addition to other requirements of this

part, the grant program shall provide grants to municipalities for

sewage collection and treatment systems or storm water or nonpoint

source pollution control as provided for in this section.

     (2) The grant program is subject to all of the following:

     (a) The grant program shall provide grants in accordance with

the following:

     (i) Subject to subparagraph (iii), for grants of up to

$1,000,000.00, not more than 90% of the costs incurred by the

municipality.

     (ii) Subject to subparagraph (iii), for grants of more than

$1,000,000.00 and less than $2,000,000.00, not more than 90% of the

costs incurred by the municipality up to $1,000,000.00 and not more

than 75% of the costs above $1,000,000.00 incurred by the

municipality.

     (iii) If any of the following conditions are met, a grant may

be issued to cover 100% of the costs incurred by the municipality:

     (A) The municipality is a disadvantaged community as defined

in part 53.

     (B) The municipality is in receivership.

     (C) The municipality is operating under an emergency manager

or an emergency financial manager appointed under state law.

     (D) The municipality is operating under a consent agreement as

provided under the local government fiscal responsibility act, 1990

PA 72, MCL 141.1201 to 141.1291.financial stability and choice act,

2012 PA 436, MCL 141.1541 to 141.1575.

     (b) A grant may be used for 1 or more of the following

purposes:

     (i) Development of an asset management program for a sewage

collection and treatment system or a storm water system. For sewage

collection and treatment systems, the program shall include the

development of a funding structure and implementation schedule that

provides sufficient resources to implement the program. The

municipality shall coordinate, as feasible, with other

infrastructure activities in the same geographic area. In addition,

a disadvantaged community may expend not more than $500,000.00 in

grant funds to implement projects identified in the asset

management program.

     (ii) Development of management plans for the treatment of

storm water.

     (iii) Planning and design of a sewage treatment works project

or stormwater treatment project as defined in section 5301(n) or

(o) or planning and design of construction activities designed to

reduce nonpoint source pollution.

     (iv) Project costs of a municipality related to the testing

and demonstration of innovative wastewater and storm water

technologies approved by the department.

     (v) For projects to address a substantial public health risk

from treatment system failure, up to 50% of the project costs

related to the planning, design, and construction of a sewage

collection and treatment system. To be eligible for a grant under

this subparagraph, a municipality shall apply on or after June 1,

2016, meet criteria developed by the department, and provide a

demonstration of financial need, including an economic feasibility

study with which the department of treasury concurs. Construction

funding under this subparagraph shall not exceed $10,000,000.00 and

shall be allocated from wetland mitigation bank funding authorized

in section 5204f(1).

     (c) The local match is not eligible for loan assistance from

the state water pollution control revolving fund or the fund.

     (d) Grant funds shall not be used for general local government

administrative activities or activities performed by municipal

employees that are unrelated to the project.

     (e) A municipality shall not receive more than $2,000,000.00

in total grant assistance under this section.

     (3) The department shall establish an application and review

process for considering grant applications under this section. The

application shall contain the information required by the

department and the authority. Within 60 days after receipt of an

application, the department shall publish notice of the application

on the department's calendar. Within 120 days after receipt of an

administratively complete grant application, the department shall,

in writing, notify the applicant whether the application is

approved or rejected. If the department approves a grant under this

section, the department and the authority shall enter into a grant

agreement with the recipient prior to transferring funds. The grant

agreement shall contain terms established by the department and the

authority, including both of the following:

     (a) A requirement that a grant recipient proceed with a

project for which grant funding is provided within 3 years after

the department approves the grant. For asset management programs

related to sewage collection and treatment systems, this includes

significant progress, as determined by the department, toward

achieving the funding structure necessary to implement the program.

     (b) A requirement that the grant recipient repay the grant,

within 90 days of being informed to do so, with interest at a rate

not to exceed 8% per year, to the authority for deposit into the

fund if the applicant is unable to, or decides not to, proceed with

a construction project or begin implementation of an asset

management program for which grant funding is provided.

     (4) For each year in which the department receives grant

applications under this section, the department shall report by

October 1 of that year to the standing committees of the senate and

the house of representatives with primary jurisdiction over issues

pertaining to natural resources and the environment and to the

senate and house of representatives appropriations committees on

the utilization of funds under this part that were received from

the Great Lakes water quality bond fund created in section 19706.

The report shall include, at a minimum, all of the following:

     (a) The number of grant applications received under this

section.

     (b) The name of each municipality applying for a grant.

     (c) The type of project being funded for each grant awarded.

     (d) The number of users potentially affected by each grant

awarded.

     (e) The amount of the local match for each grant awarded.

     (f) The individual and annual cumulative amount of grant funds

awarded, including an identification of whether each award was for

the purpose of applying for assistance from the state water

pollution control revolving fund or the fund.