HOUSE BILL No. 5673

 

May 24, 2012, Introduced by Reps. Pscholka, Opsommer, MacGregor and Kowall and referred to the Committee on Natural Resources, Tourism, and Outdoor Recreation.

 

     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 sections 5204e and

 

5204f.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 5201. As used in this part:

 

     (a) "Asset management program" means the system 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 stormwater 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, in exceptional circumstances, preserved

 

expressly for the purpose of providing compensatory mitigation in

 


accordance with the provisions of part 303, in advance of

 

authorized, unavoidable impacts to wetlands.

 

     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) Assistance for construction activities as defined in

 

section 5301(d) when identified through an asset management program

 

or storm water project plan designed to protect water quality,

 

including improvements that are water and energy efficient, where

 

feasible.

 

     (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.in compliance

 

with the following:

 

     (a) To the department in accordance with the application

 

requirements provided in part 53 for section 5202(1)(a) or (b)

 


activities.

 

     (b) On a form approved by the department for section

 

5202(1)(c) activities.

 

     (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 assistance to municipalities

 

to increase the level of investment in sewage collection and

 

treatment systems and to improve water quality and result in

 

pollution prevention.

 

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

 

     (a) The grant program shall provide grants of up to

 

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

 

municipality. For grants of more than $1,000,000.00 and less than

 

$2,000,000.00, the grant program shall not cover more than 75% of

 

the costs incurred by a municipality. A municipality that is a

 

disadvantaged community as defined in part 53 or a municipality

 

under emergency financial management under the local government and

 

school district fiscal accountability act, 2011 PA 4, MCL 141.1501

 

to 141.1531, a consent agreement entered into under that act, or a

 

successor statute that the department determines is substantially

 


similar to that act, may receive a 100% grant. Funding can be used

 

for 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.

 

     (ii) Development of management plans for the treatment of storm

 

water.

 

     (iii) Development of storm water utilities if the municipality

 

has an asset management program.

 

     (iv) Planning and design of a sewage treatment works project or

 

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

 

or construction activities designed to reduce nonpoint source

 

pollution.

 

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

 

the state water pollution control revolving fund or the fund.

 

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

 

administrative activities or activities performed by municipal

 

employees that are unrelated to the project.

 

     (d) 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 and 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 initiated from a grant under this

 

section.

 

     (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.

 

     Sec. 5204f. (1) The authority, in conjunction with the

 

department, shall establish a wetland mitigation bank funding

 

program that provides grants and loans totaling not more than

 

$10,000,000.00 to eligible municipalities. Of the money expended

 

under this subsection, up to $500,000.00 may be used for grants.

 

Funding may be used for the purpose of this subsection as long as

 

funds remain available.

 

     (2) Grants awarded under the wetland mitigation bank funding

 

program shall provide assistance to municipalities to complete loan

 

application requirements for funding from the wetland mitigation

 

bank funding program or to complete loan application requirements

 

for other sources of financing. Grants for wetland mitigation banks

 

are subject to the following:

 

     (a) Grants shall not cover more than 90% of the costs incurred

 

by a municipality to complete an application for loan assistance.

 

     (b) Grant funding may be used for the following purposes:

 

     (i) Developing an approvable wetland mitigation banking

 

proposal.

 

     (ii) Notifying affected local units of government and adjacent

 


property owners of the proposed wetland mitigation bank, and

 

working to resolve objections to the project.

 

     (iii) Planning and designing the wetland mitigation bank.

 

     (iv) Completing the wetland mitigation bank funding program

 

loan application or loan application requirements for other sources

 

of financing.

 

     (c) The 10% local match is not eligible for loan assistance

 

from the wetland mitigation funding bank program.

 

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

 

administrative activities or activities performed by municipal

 

employees that are unrelated to development of the wetland

 

mitigation bank loan application.

 

     (e) Applications for grants from the wetland mitigation

 

funding bank program shall be made on a form provided by the

 

department and shall contain the information required by the

 

department and the authority. Grant applications may be made at any

 

time.

 

     (f) The department shall establish a review process for

 

considering grant applications under this subsection. The

 

department shall notify the applicant in writing 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.

 

     (g) The grant agreement shall contain terms established by the

 

department and the authority and 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 any of the following occur:

 

     (i) The applicant fails to submit an administratively complete

 

loan application for assistance from the wetland mitigation bank

 

funding program or other source of financing for the project within

 

1 year of the date on which the grant expires.

 

     (ii) The applicant declines the loan assistance for 2

 

consecutive years unless the applicant proceeds with funding from

 

another source.

 

     (iii) The applicant is unable to enter into a signed wetland

 

mitigation banking agreement with the department within 2 years of

 

the date on which the grant expires.

 

     (iv) The applicant is unable to or decides not to proceed with

 

constructing the project.

 

     (3) Loans under the wetland mitigation bank funding program

 

shall provide assistance to municipalities to establish a wetland

 

mitigation bank. Loans shall be subject to the following:

 

     (a) Loans under the wetland mitigation bank funding program

 

shall be for 1 or more of the following:

 

     (i) Complete and execute the wetland mitigation banking

 

agreement with the department.

 

     (ii) Complete engineering and design for the wetland mitigation

 

bank.

 

     (iii) Purchase land for the wetland mitigation bank.

 

     (iv) Construct the wetland mitigation bank.

 

     (v) Conduct monitoring and maintenance necessary to ensure

 

that the performance standards are or will be met.

 


     (vi) In addition, the department may approve the use of loan

 

funds for other activities needed to establish a wetland mitigation

 

bank upon a demonstrated need by the municipality.

 

     (b) Applications for loans from the wetland mitigation bank

 

funding program shall be made on a form provided by the department

 

and shall contain the information required by the department and

 

the authority. Loan applications may be made at any time.

 

     (4) The department shall establish a review process for

 

considering loan applications under this subsection. The department

 

shall notify the applicant in writing whether the loan is approved

 

or rejected. Prior to releasing a loan, the authority in

 

consultation with the department shall enter into a loan agreement

 

with the loan recipient.

 

     (5) For each year in which the department receives grant or

 

loan applications under this section, the department shall report

 

by October 1 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 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 and loan applications received under

 

this section.

 

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

 

loan, or both.

 

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

 


     (d) The individual and annual cumulative amount of grant and

 

loan funds awarded, including an identification of the purpose of

 

each grant and loan awarded.

 

     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.____ or House Bill No. 5674(request no.

 

05374'12 *).

 

     (b) Senate Bill No.____ or House Bill No. 5675(request no.

 

05375'12 *).

 

     (c) Senate Bill No.____ or House Bill No. 5676(request no.

 

05376'12 *).