SB-0910, As Passed House, December 14, 2016

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.