SB-0653, As Passed House, May 22, 2018

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 653

A bill to amend 1994 PA 451, entitled

"Natural resources and environmental protection act,"

by amending sections 1301, 1307, and 1311 (MCL 324.1301, 324.1307,

and 324.1311), section 1301 as amended by 2018 PA 36 and sections

1307 and 1311 as amended by 2013 PA 98, and by adding sections

1313, 1315, and 1317.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 1301. As used in this part:

(a) "Application period" means the period beginning when an

application for a permit is received by the state and ending when

the application is considered to be administratively complete under

section 1305 and any applicable fee has been paid.

(b) "Department" means the department, agency, or officer

authorized by this act to approve or deny an application for a

particular permit. As used in sections 1315 to 1317, "department"

means the department of environmental quality.

authorized under this act to approve or deny an application for a

particular permit or the director's designee. As used in sections

1313 to 1317, "director" means the director of the department of

environmental quality.

(d) "Environmental permit review commission" or "commission"

means the environmental permit review commission established under

section 1313(1).

(e) "Environmental permit panel" or "panel" means a panel of

the environmental permit review commission, appointed under section

1315(2).

(f) ~~(d)~~ "Permit", except as provided in subdivision (g), means

a permit or operating license required by any of the following

sections or by rules promulgated thereunder, or, in the case of

section 9112, by an ordinance ~~adopted thereunder:~~referred to in

that section:

(i) Section 3104, floodplain alteration permit.

(ii) Section 3503, permit for use of water in mining iron ore.

(iii) Section 4105, sewerage system construction permit.

(iv) Section 6516, vehicle testing license.

(v) Section 6521, motor vehicle fleet testing permit.

(vi) Section 8310, restricted use pesticide dealer license.

(vii) Section 8310a, agricultural pesticide dealer license.

(viii) Section 8504, license to manufacture or distribute

fertilizer.

(ix) Section 9112, local soil erosion and sedimentation

control permit.

(x) Section 11509, solid waste disposal area construction

permit.

(xi) Section 11512, solid waste disposal area operating

license.

(xii) Section 11542, municipal solid waste incinerator ash

landfill operating license amendment.

(xiii) Section 11702, septage waste servicing license or

septage waste vehicle license.

(xiv) Section 11709, septage waste site permit.

(xv) Section 30104, inland lakes and streams project permit.

(xvi) Section 30304, state permit for dredging, filling, or

other activity in wetland. Permit includes an authorization for a

specific project to proceed under a general permit issued under

section 30312.

(xvii) Section 31509, dam construction, repair, or removal

permit.

(xviii) Section 32312, flood risk, high risk, or environmental

area permit.

(xix) Section 32512, permit for dredging and filling

bottomland.

(xx) Section 32603, permit for submerged log removal from

Great Lakes bottomlands.

(xxi) Section 35304, department permit for critical dune area

use.

(xxii) Section 36505, endangered species permit.

(xxiii) Section 41702, game bird hunting preserve license.

(xxiv) Section 42101, dog training area permit.

(xxv) Section 42501, fur dealer's license.

(xxvi) Section 42702, game dealer's license.

(xxvii) Section 44513, charter boat operating permit under

reciprocal agreement.

(xxviii) Section 44516, boat livery operating permit.

(xxix) Section 45902, game fish propagation license.

(xxx) Section 45906, game fish import license.

(xxxi) Section 48705, permit to take amphibians and reptiles

for scientific or educational use.

(xxxii) Section 61525, oil or gas well drilling permit.

(xxxiii) Section 62509, brine, storage, or waste disposal well

drilling or conversion permit or test well drilling permit.

(xxxiv) Section 63103a, ferrous mineral mining permit.

(xxxv) Section 63514 or 63525, surface coal mining and

reclamation permit or revision of the permit, respectively.

(xxxvi) Section 63704, sand dune mining permit.

(xxxvii) Section 72108, use permits for a Pure Michigan Trail.

(xxxviii) Section 76109, sunken aircraft or watercraft

abandoned property recovery permit.

(xxxix) Section 76504, Mackinac Island motor vehicle and land

use permits.

(xxxx) Section 80159, buoy or beacon permit.

(g) "Permit", as used in sections 1313 to 1317, means any

permit or operating license that meets both of the following

conditions:

(i) The applicant for the permit or operating license is not

this state or a political subdivision of this state.

(ii) The permit or operating license is issued by the

department of environmental quality under this act or the rules

promulgated under this act.

(h) ~~(e)~~ "Processing deadline" means the last day of the

processing period.

(i) ~~(f)~~ "Processing period", subject to section 1307(2) and

(3), means the following time period after the close of the

application period, for the following permit, as applicable:

(i) Twenty days for a permit under section 61525 or 62509.

(ii) Thirty days for a permit under section 9112 or 44516.

(iii) Thirty days after the department consults with the

underwater salvage and preserve committee created under section

76103, for a permit under section 76109.

(iv) Sixty days, for a permit under section 30104 for a minor

project established under section 30105(7) or 32512a(1), or an

authorization for a specific project to proceed under a general

permit issued under section 30105(8) or 32512a(2), or for a permit

under section 32312.

(v) Sixty days or, if a hearing is held, 90 days for a permit

under section 35304.

(vi) Sixty days or, if a hearing is held, 120 days for a

permit under section 30104, other than a permit or authorization

described in subparagraph (ii) or (iv), or for a permit under

section 31509.

(vii) Ninety days for a permit under section 11512, a revision

of a surface coal mining and reclamation permit under section

63525, or a permit under section 72108.

(viii) Ninety days or, if a hearing is held, 150 days for a

permit under section 3104 or 30304, or a permit under section 32512

other than a permit described in subparagraph (iv).

(ix) Ninety days after the close of the review or comment

period under section 32604, or if a public hearing is held, 90 days

after the date of the public hearing for a permit under section

32603.

(x) One hundred twenty days for a permit under section 11509,

11542, 63103a, 63514, or 63704.

(xi) One hundred fifty days for a permit under section 36505.

However, if a site inspection or federal approval is required, the

150-day period is tolled pending completion of the inspection or

receipt of the federal approval.

(xii) For any other permit, 150 days or, if a hearing is held,

90 days after the hearing, whichever is later.

Sec. 1307. (1) By the processing deadline, the department

shall approve or deny an application for a permit.

(2) If requested by the permit applicant, the department shall

extend the processing period for a permit by not more than 120

days, as specified by the applicant. If requested by the permit

applicant, the department may extend the processing period beyond

the additional 120 days. However, a processing period shall not be

extended under this subsection to a date later than 1 year after

the application period ends.

(3) A processing period is tolled from the date that a permit

applicant submits a petition under section 1315(1) until the date

that a decision of the director is made under section 1315(6). If a

permit applicant submits a petition under section 1315(1), the

department shall not approve or deny the application for the permit

under subsection (1) until after the director issues a decision

under section 1315(6).

(4) ~~(2)~~ The approval or denial of an application for a permit

shall be in writing and shall be based upon evidence that would

meet the standards in section 75 of the administrative procedures

act of 1969, 1969 PA 306, MCL 24.275.

(5) ~~(3)~~ Approval of an application for a permit may be granted

with conditions or modifications necessary to achieve compliance

with the part or parts of this act under which the permit is

issued.

(6) ~~(4)~~ A denial of an application for a permit shall

document, and any review upholding the decision shall determine, to

the extent practical, all of the following:

(a) That the decision is based on specific provisions of this

act or rules promulgated under this act.

(b) That the decision is based upon sufficient facts or data,

which are recorded in the file.

(i) That the decision is the product of reliable scientific

principles and methods.

(ii) That the decision has applied the principles and methods

reliably to the facts.

(7) ~~(5)~~ Except for permits described in subsection ~~(6),~~ (8),

if the department fails to satisfy the requirements of subsection

(1) with respect to an application for a permit, the department

shall pay the applicant an amount equal to 15% of the greater of

the following, as applicable:

(a) The amount of the application fee for that permit.

(b) If an assessment or other fee is charged on an annual or

other periodic basis by the department to a person holding the

permit for which the application was submitted, the amount of the

first periodic charge of that assessment or other fee for that

permit.

(8) ~~(6)~~ If the department fails to satisfy the requirements of

subsection (1) with respect to a permit required by section 11509,

11512, 30304, or 32603, the application shall be considered to be

approved and the department shall be considered to have made any

determination required for approval.

(9) ~~(7)~~ The failure of the department to satisfy the

requirements of subsection (1) or the fact that the department is

required to make a payment under subsection ~~(5)~~ (7) or is

considered to have approved a permit under subsection ~~(6)~~ (8) shall

not be used by the department as the basis for discriminating

against the applicant. If the department is required to make a

payment under subsection ~~(5),~~ (7), the application shall be

processed in sequence with other applications for the same type of

permit, based on the date on which the processing period began,

unless the director determines on an application-by-application

basis that the public interest is best served by processing in a

different order.

(10) ~~(8)~~ If the department fails to satisfy the requirements

of subsection (1) with respect to 10% or more of the applications

for a particular type of permit received during a quarter of the

state fiscal year, the department shall immediately devote

resources from that program to eliminate any backlog and satisfy

the requirements of subsection (1) with respect to new applications

for that type of permit within the next fiscal quarter.

(11) ~~(9)~~ If the department fails to satisfy the requirements

of subsection (1), the director shall notify the appropriations

committees of the senate and house of representatives of the

failure. The notification shall be in writing and shall include

both of the following:

(a) An explanation of the reason for the failure.

(b) A statement of the amount the department was required to

pay the applicant under subsection ~~(5)~~ (7) or a statement that the

department was required to consider the application to be approved

under subsection ~~(6),~~ (8), as applicable.

Sec. 1311. By December 1 each year, the director shall submit

a report to the standing committees and appropriations

subcommittees of the senate and house of representatives with

primary responsibility for issues under the jurisdiction of that

department. The department shall post the current report on its

website. The report shall include all of the following information

for each type of permit for the preceding fiscal year:

(a) The number of applications for permits the department

received.

(b) The number of applications approved, the number of

applications approved by the processing deadline, the number of

applications approved after the processing deadline, and the

average ~~time~~ times for the department to determine administrative

completeness and to approve or disapprove applications.

applications denied by the processing deadline, and the number of

applications denied after the processing deadline.

(d) The number of applications approved or denied after the

processing deadline that, based on the director's determination of

the public interest, were not processed in sequence as otherwise

required by section ~~1307(7).~~1307(9).

(e) The number of applications that were not administratively

complete when received.

(f) The amount of money refunded and discounts granted under

section 1307.

(g) The number of applications processed as provided in

section 1309.

(h) If a department failed to satisfy the requirements of

section 1307(1) with respect to 10% or more of the applications for

a particular type of permit received during a quarter of the state

fiscal year, the type of permit and percentage of applications for

which the requirements were not met, how the department attempted

to eliminate any backlog and satisfy the requirements of section

1307(1) with respect to new applications for that type of permit

within the next fiscal quarter, and whether the department was

successful.

Sec. 1313. (1) The environmental permit review commission is

established in the department of environmental quality. The

commission shall advise the director on disputes related to permits

and permit applications.

(2) The commission shall consist of 15 individuals, appointed

by the governor. The governor shall appoint the first commission

within 60 days after the effective date of the amendatory act that

added this section. Each member of the commission shall meet 1 or

more of the following:

(a) Have the equivalent of 6 years of full-time relevant

experience as a practicing engineer, geologist, hydrologist, or

hydrogeologist.

(b) Have a master's degree from an accredited institution of

higher education in a discipline of engineering or science related

to air or water and the equivalent of 8 years of full-time relevant

experience.

(3) An individual is not eligible to be a member of the

commission if any of the following apply:

(a) The individual is a current employee of any office,

department, or agency of this state.

(b) The individual is a party to 1 or more contracts with the

department of environmental quality and the compensation paid under

those contracts in any of the preceding 3 years represented more

than 5% of the individual's annual gross income in that preceding

year.

1 or more contracts with the department of environmental quality

and the compensation paid to the individual's employer under those

contracts in any of the preceding 3 years represented more than 5%

of the employer's annual gross revenue in that preceding year.

(d) The individual was employed by the department of

environmental quality within the preceding 3 years.

(4) An individual appointed to the commission shall serve for

a term of 4 years, except as provided in this subsection, and may

be reappointed. However, after serving 2 consecutive terms on the

commission, the individual is not eligible to serve on the

commission for 2 years. The terms for members first appointed shall

be staggered so that 5 expire in 2 years, 5 expire in 3 years, and

5 expire in 4 years. A vacancy on the commission shall be filled in

the same manner as the original appointment.

(5) The governor may remove a member of the commission for

incompetence, dereliction of duty, malfeasance, misfeasance, or

nonfeasance in office, or any other good cause.

(6) Individuals appointed to the commission shall serve

without compensation. However, members of the commission may be

reimbursed for their actual and necessary expenses incurred in the

performance of their official duties as members of the commission.

(7) The business that the commission may perform shall be

conducted at a public meeting of the commission held in compliance

with the open meetings act, 1976 PA 267, MCL 15.261 to 15.275.

Sec. 1315. (1) A permit applicant may seek review by a panel

by submitting a petition to the director before the permit has been

approved or denied. The petition shall include the issues in

dispute, the relevant facts, and any data, analysis, opinion, and

supporting documentation for the petitioner's position. If the

director believes that the dispute may be resolved without

convening a panel, the director may contact the petitioner

regarding the issues in dispute and may negotiate, for a period not

to exceed 45 days, a resolution of the dispute.

(2) Unless the dispute is resolved pursuant to subsection (1),

the director shall convene a meeting of a panel. The meeting shall

be held within 45 days after the director received the petition.

The panel shall consist of 3 members of the commission selected by

the director on the basis of their relevant expertise. The director

may select a replacement for a member who is unable to participate

in the review process. To serve as a panel member, a commission

member must submit to the director on a form provided by the

department an agreement not to accept employment from the

petitioner before 1 year after a decision is rendered on the matter

if gross income from the employment would exceed 5% of the member's

gross income from all sources in any of the preceding 3 years.

(3) The members of the panel shall elect a chairperson. Two

members of the panel constitute a quorum. A majority of the votes

cast are required for official action of the panel. The business

that the panel may perform shall be conducted at a public meeting

of the panel held in compliance with the open meetings act, 1976 PA

267, MCL 15.261 to 15.275.

(4) The director shall provide the panel with a copy of the

petition and its supporting documentation and a copy of all

supporting documentation from the department. At the meeting of the

panel, representatives of the petitioner and the department shall

each be given an opportunity to present their positions.

(5) Within 45 days after hearing the petition, the panel shall

make a recommendation regarding the petition and provide written

notice of the recommendation to the director and the petitioner.

The written recommendation shall include the specific rationale for

the recommendation. The recommendation may be to adopt, modify, or

reverse, in whole or in part, the department's position or decision

on the dispute that is the subject of the petition.

(6) Within 60 days after receiving written notice of the

panel's recommendation, the director shall issue a decision, in

writing, regarding the petition. If the director agrees with the

recommendation, the department shall incorporate the recommendation

into the terms of the permit. If the director does not agree with

the recommendation, the director shall include in the written

decision the specific rationale for rejecting the recommendation.

If the director fails to make a decision within the time period

provided for in this subsection, the recommendation of the panel

shall be considered the decision of the director. The decision of

the director under this subsection regarding a dispute related to a

permit or permit application is not subject to review under this

act, the administrative procedures act of 1969, 1969 PA 306, MCL

24.201 to 24.328, or section 631 of the revised judicature act of

1961, 1961 PA 236, MCL 600.631. However, the decision of the

director under this subsection may be included in an appeal to a

final permit action. If a permit applicant declines to submit a

petition for review under this section, the decision of the

department regarding the approval or denial of a permit is final

permit action for purposes of any judicial review or other review

allowed under this act, the administrative procedures act of 1969,

1969 PA 306, MCL 24.201 to 24.328, and section 631 of the revised

judicature act of 1961, 1961 PA 236, MCL 600.631.

(7) A member of the commission shall not participate in a

petition review if the member has a conflict of interest. A member

has a conflict of interest if any of the following apply:

(a) The applicant has hired that member or the member's

employer on any environmental matter within the preceding 3 years.

(b) The member has been an employee of the applicant within

the preceding 3 years.

applicant.

(8) The director shall select a member of the commission to

participate in a petition review in place of a member disqualified

under subsection (7).

Sec. 1317. (1) In a contested case regarding a permit, an

administrative law judge shall preside, make the final decision,

and issue the final decision and order for the department. Any

party to the contested case, including the department, may, within

21 days after receiving the final decision and order, seek review

of the final decision and order by an environmental permit panel by

submitting a request to the director and a notice to the hearing

officer.

(2) On petition for review of a final decision under

subsection (1), the director shall convene an environmental permit

panel in the same manner as provided under section 1315(2), except

that the director shall not select as a member of the panel an

individual who was a member of a panel that previously reviewed any

dispute regarding the permit. The panel shall meet and conduct

business in the same manner as provided under section 1315(2) and

(3). The panel's review of the final decision must be limited to

the record established by the administrative law judge.

(3) After an environmental permit panel is convened under

subsection (2), a member of the panel shall not communicate,

directly or indirectly, in connection with any issue of fact, with

any party or other person, or, in connection with any issue of law,

with any party or the party's representative, except on notice and

opportunity for all parties to participate.

(4) An environmental permit panel may adopt, remand, modify,

or reverse, in whole or in part, a final decision and order

described in subsection (1). The panel shall issue an opinion that

becomes the final decision of the department and is subject to

judicial review as provided under the administrative procedures act

of 1969, 1969 PA 306, MCL 24.201 to 24.328, and other applicable

law.

(5) The Michigan administrative hearing system shall provide

an environmental permit panel with all staff necessary for the

panel to perform its duties under this section.

(6) An opinion issued by an environmental permit panel must be

in writing and clearly define the legal and technical principles

being applied.

(7) If no party timely appeals a final decision and order

described in subsection (1) to an environmental permit panel, the

final decision and order is the final agency action for purposes of

any applicable judicial review.

Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 99th Legislature are

enacted into law:

(a) Senate Bill No. 652.

(b) Senate Bill No. 654.