SB-0551, As Passed House, February 21, 2018

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 551

     A bill to amend 1994 PA 451, entitled

"Natural resources and environmental protection act,"

by amending sections 1902, 1903, and 1907 (MCL 324.1902, 324.1903,

and 324.1907), sections 1902 and 1907 as amended by 2012 PA 619 and

section 1903 as amended by 2011 PA 117.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 1902. (1) In accordance with section 35 of article IX of

the state constitution of 1963, the Michigan natural resources

trust fund is established in the state treasury. The trust fund

shall consist of all bonuses, rentals, delayed rentals, and

royalties collected or reserved by the state under provisions of

leases for the extraction of nonrenewable resources from state

owned lands. However, the trust fund shall not include bonuses,

rentals, delayed rentals, and royalties collected or reserved by

the state from the following sources:

     (a) State owned lands acquired with money appropriated from

the former game and fish protection fund or the game and fish

protection account of the Michigan conservation and recreation

legacy fund provided for in section 2010.

     (b) State owned lands acquired with money appropriated from

the subfund account created by former section 4 of former 1976 PA

204.

     (c) State owned lands acquired with money appropriated from

related federal funds made available to the state under the

Pittman-Robertson wildlife restoration act, 16 USC 669 to 669k,

669i, or the Dingell-Johnson sport fish restoration act, 16 USC 777

to 777n.777m.

     (d) Money received by the state from net proceeds allocable to

the nonconventional source production credit contained in section

45k of the internal revenue code of 1986, 26 USC 45k, as provided

for in section 503.

     (2) Notwithstanding subsection (1), until the trust fund

reaches an accumulated principal of $500,000,000.00, $10,000,000.00

of the revenues from bonuses, rentals, delayed rentals, and

royalties described in this section, but not including money

received by the state from net proceeds allocable to the

nonconventional source production credit contained in section 45k

of the internal revenue code of 1986, 26 USC 45k, as provided for

in section 503, otherwise dedicated to the trust fund that are

received by the trust fund each state fiscal year shall be

transferred to the state treasurer for deposit into the Michigan

state parks endowment fund. However, until the trust fund reaches

an accumulated principal of $500,000,000.00, in any state fiscal

year, not more than 50% of the total revenues from bonuses,

rentals, delayed rentals, and royalties described in this section,

but not including net proceeds allocable to the nonconventional

source production credit contained in section 45k of the internal

revenue code of 1986, 26 USC 45k, as provided in section 503,

otherwise dedicated to the trust fund that are received by the

trust fund each state fiscal year shall be transferred to the

Michigan state parks endowment fund. To implement this subsection,

until the trust fund reaches an accumulated principal of

$500,000,000.00, the department shall transfer 50% of the money

received by the trust fund each month pursuant to subsection (1) to

the state treasurer for deposit into the Michigan state parks

endowment fund. The department shall make this transfer on the last

day of each month or as soon as practicable thereafter. However,

not more than a total of $10,000,000.00 shall be transferred in any

state fiscal year pursuant to this subsection.

(2) (3) The trust fund may receive appropriations, money, or

other things of value.

(3) (4) The state treasurer shall direct the investment of the

trust fund. The state treasurer shall have the same authority to

invest the assets of the trust fund as is granted to an investment

fiduciary under the public employee retirement system investment

act, 1965 PA 314, MCL 38.1132 to 38.1140m.38.1141.

(4) (5) The department shall annually prepare a report

containing an accounting of revenues and expenditures from the

trust fund. This report shall identify the interest and earnings of

the trust fund from the previous year, the cumulative total amount

of unexpended interest and earnings held by the trust fund, the

investment performance of the trust fund during the previous year,

and the total amount of appropriations from the trust fund during

the previous year. This report shall be provided to the senate and

house of representatives appropriations committees and the standing

committees of the senate and house of representatives with

jurisdiction over issues pertaining to natural resources and the

environment.

     (6) As used in this section, "Michigan state parks endowment

fund" means the Michigan state parks endowment fund established in

section 35a of article IX of the state constitution of 1963 and

provided for in section 74119.

     Sec. 1903. (1) Subject to the limitations of this part and of

section 35 of article IX of the state constitution of 1963, the

interest and earnings of the trust fund in any 1 state fiscal year

may be expended in subsequent state fiscal years only for the

following purposes:

     (a) The acquisition of land or rights in land for recreational

uses or protection of the land because of its environmental

importance or its scenic beauty.

     (b) The development of public recreation facilities.

     (c) The administration of the fund, including payments in lieu

of taxes on state-owned land purchased through the trust fund. The

legislature shall make appropriations from the trust fund each

state fiscal year to make full payments in lieu of taxes on state-

owned land purchased through the trust fund, as provided in section

2154.

     (2) In addition to the money described in subsection (1), 33-

1/3% of the money, exclusive of interest and earnings, received by

the trust fund in any state fiscal year may be expended in

subsequent state fiscal years for the purposes described in

subsection (1). However, the authorization for the expenditure of

money provided in this subsection does not apply after the state

fiscal year in which the total amount of money in the trust fund,

exclusive of interest and earnings and amounts authorized for

expenditure under this section, exceeds $500,000,000.00.

(2) (3) An expenditure from the trust fund may be made in the

form of a grant to a local unit of government or public authority,

subject to all of the following conditions:

     (a) The grant is used for the purposes described in subsection

(1).

     (b) The grant is matched by the local unit of government or

public authority with at least 25% of the total cost of the

project.

(3) (4) Not less than 25% of the total amounts made available

for expenditure from the trust fund from any state fiscal year

shall be expended for acquisition of land and rights in land, and

not more than 25% of the total amounts made available for

expenditure from the trust fund from any state fiscal year shall be

expended for development of public recreation facilities.

(4) (5) If property that was acquired with money from the

trust fund is subsequently sold or transferred by the this state to

a nongovernmental entity, the this state shall forward to the state

treasurer for deposit into the trust fund an amount of money equal

to the following:

     (a) If the property was acquired solely with trust fund money,

the greatest of the following:

     (i) The net proceeds of the sale.

     (ii) The fair market value of the property at the time of the

sale or transfer.

     (iii) The amount of money that was expended from the trust

fund to acquire the property.

     (b) If the property was acquired with a combination of trust

fund money and other restricted funding sources governed by federal

or state law, an amount equal to the percentage of the funds

contributed by the trust fund for the acquisition of the property

multiplied by the greatest of the amounts under subdivision (a)(i),

(ii), and (iii).

     Sec. 1907. (1) The board shall determine which lands and

rights in land within the this state should be acquired and which

public recreation facilities should be developed with money from

the trust fund and shall submit to the legislature in January of

each year a list of those lands and rights in land and those public

recreation facilities that the board has determined should be

acquired or developed with trust fund money, compiled in order of

priority. The list prepared under this subsection shall be based

upon the accounting of revenues available for expenditure as

described in the report prepared under section 1902(4) and upon the

recommendation under subsection (2).

     (2) By December 1 of each year, the governor or his or her

designee, the state treasurer or his or her designee, the senate

majority leader or his or her designee, and the speaker of the

house of representatives or his or her designee, and 1 member of

the board selected by the board, shall recommend to the board the

amount of money that should be made available to fund each of the

following:

     (a) Acquisitions under section 1903(1)(a).

     (b) Development projects under section 1903(1)(b).

     (c) Administration of the trust fund under section 1903(1)(c).

     (d) If there is additional money available after funding

recommendations are made for subdivisions (a), (b), and (c), an

amount that should be retained by the trust fund to mitigate

potential future investment return fluctuations.

     (3) In preparing the list under this subsection (1), the board

shall do all of the following:

     (a) Give a preference to the following:

     (i) A project or acquisition that is located within a local

unit of government that has adopted a resolution in support of the

project or acquisition.

     (ii) The acquisition of land and rights in land for

recreational trails that intersect the downtown areas of cities and

villages.

     (b) Identify each parcel of land that is recommended for

acquisition by legal description and include the estimated cost of

acquisition and assessed value.

     (c) Provide a scoring of each parcel of land recommended for

acquisition individually.

     (d) Give consideration to an acquisition that meets either or

both of the following:

     (i) Is located within a county that contains 50% or more

privately owned land.

     (ii) Allows motorized recreational use.

(4) (2) In preparing the list of lands to be acquired or

developed under subsection (1), the following apply:

     (a) The board shall not include an acquisition of land on the

list if the board determines that the seller was harassed,

intimidated, or coerced into selling his or her land by the

department, a local unit of government, or a qualified conservation

organization.

     (b) A project or acquisition may be named in honor or memory

of an individual or organization.

(5) (3) The list prepared under subsection (1) shall be

accompanied by estimates of total costs for the proposed

acquisitions and developments.

(6) (4) The board shall supply with the list prepared under

subsection (1) a statement of the guidelines used in listing and

assigning the priority of these proposed acquisitions and

developments.

(7) (5) The legislature shall approve by law the lands and

rights in land and the public recreation facilities to be acquired

or developed each year with money from the trust fund.

(8) (6) As used in this section, "qualified conservation

organization" means that term as it is defined in section 7o of the

general property tax act, 1893 PA 206, MCL 211.7o.