HB-5673, As Passed Senate, December 12, 2012

 

 

 

 

 

 

 

 

 

 

 

 

SENATE SUBSTITUTE FOR

 

HOUSE BILL NO. 5673

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1994 PA 451, entitled

 

"Natural resources and environmental protection act,"

 

by amending sections 5201, 5202, 5203, and 5204 (MCL 324.5201,

 

324.5202, 324.5203, and 324.5204), section 5201 as amended by 2005

 

PA 257, sections 5202 and 5203 as added by 2002 PA 397, and section

 

5204 as amended by 2010 PA 232, and by adding section 5204e.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 5201. As used in this part:

 

     (a) "Asset management program" means the program that

 

identifies the desired level of service at the lowest life cycle

 

cost for rehabilitating, repairing, or replacing the assets

 

associated with a municipality's wastewater or storm water system.

 

     (b) (a) "Authority" means the Michigan municipal bond

 

authority created in section 4 of the shared credit rating act,

 


1985 PA 227, MCL 141.1054.

 

     (c) (b) "Department" means the department of environmental

 

quality.

 

     (d) (c) "Fund" means the strategic water quality initiatives

 

fund created in section 5204.

 

     (e) (d) "Grant" means a grant from the grant program.

 

     (f) (e) "Grant program" means the strategic water quality

 

initiatives grant program established under section 5204a.this

 

part.

 

     (g) (f) "Loan" means a loan from the loan program.

 

     (h) (g) "Loan program" means the strategic water quality

 

initiatives loan program established under section 5202.

 

     (i) (h) "Municipality" means that term as it is defined in

 

section 5301.

 

     (j) (i) "On-site septic system" means a natural system or

 

mechanical device used to store, treat, and dispose of sewage from

 

1 or more dwelling units that utilize a subsurface trench or bed

 

that allows the effluent to be absorbed and treated by the

 

surrounding soil, including a septic tank and tile field system.

 

     (k) (j) "State water pollution control revolving fund" means

 

the state water pollution control revolving fund established under

 

section 16a of the shared credit rating act, 1985 PA 227, MCL

 

141.1066a.

 

     (l) "Wetland mitigation bank" means a site where wetlands are

 

restored, created, or preserved for the purpose of doing both of

 

the following:

 

     (i) To provide compensatory mitigation in accordance with the

 


provisions of part 303, in advance of authorized, unavoidable

 

impacts to wetlands.

 

     (ii) To provide storm water control, nonpoint source pollution

 

control, or pollution treatment that improves the quality of the

 

waters of the state.

 

     Sec. 5202. (1) The authority in consultation with the

 

department shall establish a strategic water quality initiatives

 

loan program. This loan program shall provide low interest loans to

 

municipalities to provide assistance for improvements to a sewage

 

system for 1 or more of the following:

 

     (a) Improvements to reduce or eliminate the amount of

 

groundwater or storm water entering a sanitary sewer lead or a

 

combined sewer lead.

 

     (b) Upgrades or replacements of failing on-site septic systems

 

that are adversely affecting public health or the environment, or

 

both.

 

     (c) Project costs of the municipality related to testing,

 

demonstration, and construction activities as defined in section

 

5301(d) for innovative wastewater and storm water technologies

 

approved by the department.

 

     (d) Assistance for construction activities as defined in

 

section 5301(d) designed to protect water quality, including

 

improvements that are water or energy efficient, where feasible,

 

when identified through an asset management program or a project

 

identified in an approved storm water management plan.

 

     (2) The department shall develop criteria specifying the

 

content of an asset management program.

 


     (3) (2) In implementing the loan program, the department shall

 

annually establish the interest rate that will be charged for

 

loans.

 

     Sec. 5203. (1) A municipality that wishes to apply for a loan

 

shall submit a loan application to the department in accordance

 

with the application requirements provided in part 53.as follows:

 

     (a) In compliance with the application requirements provided

 

in part 53, for activities described in section 5202(1)(a) or (b).

 

     (b) On a form approved by the department, for activities

 

described in section 5202(1)(c) or (d).

 

     (2) The department shall process the loan applications

 

submitted under this part. and otherwise administer the fund in

 

accordance with the procedures established pursuant to part 53.

 

     (3) Prior to releasing a loan, the authority in consultation

 

with the department shall enter into a loan agreement with the loan

 

recipient. in accordance with part 53.

 

     (4) All money that is received for the repayment of a loan

 

shall be forwarded to the state treasurer for deposit into the

 

fund.

 

     Sec. 5204. (1) The strategic water quality initiatives fund is

 

created within the state treasury.

 

     (2) The state treasurer may receive money or other assets from

 

any source for deposit into the fund. The state treasurer shall

 

direct the investment of the fund. The state treasurer shall credit

 

to the fund interest and earnings from fund investments. The

 

authority shall act as fiscal agent for the fund in accordance with

 

the shared credit rating act, 1985 PA 227, MCL 141.1051 to

 


141.1076.

 

     (3) Money in the fund at the close of the fiscal year shall

 

remain in the fund and shall not lapse to the general fund.

 

     (4) The authority in consultation with the department shall

 

expend money from the fund, upon appropriation, only for the

 

following:

 

     (a) Loans under section 5202.

 

     (b) Grants under section sections 5204a, and 5204d, and 5204e.

 

     (c) Response activities to address nonpoint source water

 

pollution under section 5204b.

 

     (d) Grants and loans for brownfield sites under section 5204c.

 

     (e) Grants and loans for wetland mitigation banks under

 

section 5204f.

 

     (f) (e) The costs of the authority and the department in

 

administering the fund.

 

     (5) The fund may be pledged as security for bonds to be issued

 

by the authority for the purpose of funding loans if authorized by

 

the state administrative board.

 

     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.

 

     (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.

 

     (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.

 

     Enacting section 1. This amendatory act does not take effect

 

unless all of the following bills of the 96th Legislature are

 

enacted into law:

 

     (a) Senate Bill No. 1155.

 

     (b) Senate Bill No. 1156.

 

     (c) Senate Bill No. 1157.

 

     (d) Senate Bill No. 1158.