Bill Summary – FastDemocracy

HOUSE BILL NO. 5934
     September 17, 2024, Introduced by Rep. Farhat and referred to the Committee on Natural
        Resources, Environment, Tourism and Outdoor Recreation.
          A bill to amend 1994 PA 451, entitled
    "Natural resources and environmental protection act,"
    (MCL 324.101 to 324.90106) by adding part 198.
                    THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
                                        PART 198
        CLEAN MICHIGAN INITIATIVE REAUTHORIZATION IMPLEMENTATION
       Sec. 19801. As used in this part:
       (a) "Bonds" means the bonds authorized under the clean
 Michigan initiative reauthorization act.
    RMH                                                                          H05289'24
                                        2
        (b) "Corrective action" means that term as it is defined in
 part 213.
        (c) "Department" means the department of environment, Great
 Lakes, and energy.
        (d) "Facility" means that term as it is defined in part 201.
        (e) "Fund" means the clean Michigan initiative reauthorization
 bond fund created in section 19806.
        (f) "Gaming facility" means a gaming facility regulated under
 the Michigan gaming control and revenue act, 1996 IL 1, MCL 432.201
 to 432.226.
        (g) "Local unit of government" means a county, city, village,
 or township, or an agency of a county, city, village, or township;
 or an authority or other public body created by or in accordance
 with state law.
        (h) "Response activity" means that term as defined in part
 201.
        Sec. 19802. The legislature finds and declares that the
 environmental and natural resources programs implemented under this
 part are a public purpose and of paramount public concern in the
 interest of the health, safety, and general welfare of the citizens
 of this state.
        Sec. 19803. (1) The bonds must be issued in 1 or more series,
 each series to be in a principal amount, dated, have the maturities
 that may be either serial, term, or both, bear interest at a rate
 or rates, be subject or not subject to prior redemption, and if
 subject to prior redemption with or without call premiums, be
 payable at a place or places, have or not have provisions for
 registration as to principal only or as to both principal and
 interest, and be in a form and be executed in a manner as
     RMH                                                         H05289'24
                                       3
 determined by a resolution to be adopted by the state
 administrative board and subject to covenants, directions,
 restrictions, or rights specified by resolution to be adopted by
 the state administrative board as necessary to ensure the
 marketability, insurability, or tax-exempt status of the bonds. The
 state administrative board shall rotate the services of legal
 counsel when issuing bonds.
       (2) The state administrative board may refund bonds issued
 under this part by the issuance of new bonds, whether or not the
 bonds to be refunded have matured or are subject to prior
 redemption. The state administrative board may issue bonds partly
 to refund bonds issued under this part and partly for any other
 purpose provided by this part. The principal amount of any
 refunding bonds issued under this section must not be counted
 against the limitation on principal amount provided in the clean
 Michigan initiative reauthorization act. Refunding bonds issued
 under this section are not subject to the restrictions of section
 19807.
       (3) The state administrative board may approve insurance
 contracts, agreements for lines of credit, letters of credit,
 commitments to purchase bonds, and any other transaction to provide
 security to assure timely payment or purchase of any bond issued
 under this part.
       (4) The state administrative board may authorize the state
 treasurer, but only within limitations contained in the authorizing
 resolution of the board, to do 1 or more of the following:
       (a) Sell and deliver and receive payment for the bonds.
       (b) Deliver bonds partly to refund bonds and partly for other
 authorized purposes.
     RMH                                                          H05289'24
                                       4
       (c) Select which outstanding bonds will be refunded, if any,
 by the new issue of bonds.
       (d) Buy issued bonds at not more than their face value.
       (e) Approve interest rates or methods for fixing interest
 rates, prices, discounts, maturities, principal amounts, purchase
 prices, purchase dates, remarketing dates, denominations, dates of
 issuance, interest payment dates, redemption rights at the option
 of the state or owner, the place and time of delivery and payment,
 and other matters and procedures necessary to complete the
 authorized transactions.
       (f) Execute, deliver, and pay the cost of remarketing
 agreements, insurance contracts, agreements for lines of credit,
 letters of credit, commitments to purchase bonds or notes, and any
 other transaction to provide security to assure timely payments or
 purchase of any bond issued under this part.
       (5) The bonds are not subject to the revised municipal finance
 act, 2001 PA 34, MCL 141.2101 to 141.2821.
       (6) The bonds or any series of the bonds must be sold at a
 price as determined by the state administrative board.
       (7) The bonds must be sold in accordance with a schedule
 established by the state administrative board.
       (8) The issuance of bonds under this section is subject to the
 agency financing reporting act, 2002 PA 470, MCL 129.171 to
 129.177.
       (9) For the purpose of more effectively managing its debt
 service, the state administrative board may enter into an interest
 rate exchange or swap, hedge, or similar agreement with respect to
 its bonds or notes on the terms and payable from the sources and
 with the security, if any, as determined by a resolution of the
     RMH                                                           H05289'24
                                        5
 state administrative board.
       Sec. 19804. The bonds are fully negotiable under the uniform
 commercial code, 1962 PA 174, MCL 440.1101 to 440.9994. The bonds
 and the interest on the bonds are exempt from all taxation by this
 state or a political subdivision of this state.
       Sec. 19805. The bonds are securities in which banks, savings
 and loan associations, investment companies, credit unions, and
 other persons carrying on a banking business; all insurance
 companies, insurance associations, and other persons carrying on an
 insurance business; and all administrators, executors, guardians,
 trustees, and other fiduciaries may properly and legally invest
 funds, including capital, belonging to them or within their
 control.
       Sec. 19806. (1) The clean Michigan initiative reauthorization
 bond fund is created in the state treasury.
       (2) The fund consists of all of the following:
       (a) The proceeds of sales of the bonds and any premium and
 accrued interest received on the delivery of the bonds.
       (b) Any interest or earnings generated by the proceeds
 described in subdivision (a).
       (c) Any repayment of principal and interest made under a loan
 program authorized in this part.
       (d) Any federal or other funds received.
       (3) The department of treasury may establish restricted
 subaccounts within the fund as necessary to administer the fund.
       Sec. 19807. (1) The total proceeds of all bonds shall be
 deposited into the fund and allocated as follows:
       (a) Not more than $2,000,000,000.00 may be used for response
 activities at facilities and part 213 properties.
     RMH                                                        H05289'24
                                       6
       (b) Not more than $1,000,000,000.00 may be used for waterfront
 improvements.
       (c) Not more than $750,000,000.00 may be used for remediation
 of contaminated lake and river sediments.
       (d) Not more than $750,000,000.00 may be used for nonpoint
 source pollution prevention and control projects or wellhead
 protection projects.
       (e) Not more than $500,000,000.00 may be used for water
 quality monitoring and water resources protection and pollution
 control activities.
       (f) Not more than $1,000,000,000.00 may be used for pollution
 prevention programs.
       (g) Not more than $1,000,000,000.00 may be used to abate lead
 hazards.
       (h) Not more than $500,000,000.00 may be used for state park
 infrastructure improvements.
       (i) Not more than $500,000,000.00 may be used for local
 recreation projects.
       (j) Not more than $2,000,000,000.00 may be used for air
 quality mitigation measures in county with a population greater
 than 1,500,000 according to the most recent federal decennial
 census.
       (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 otherwise
 comply with state or federal law, interest and earnings from
 investment proceeds of any bond issue must be allocated in the same
 proportion as earned on the investment of the proceeds of the bond
 issue.
     RMH                                                        H05289'24
                                         7
         (3) Except as may be required to maintain the exclusion from
 gross income of the interest paid on the bonds or to otherwise
 comply with state or federal law, all repayments of principal and
 interest earned under a loan program authorized by this part must
 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 an obligation issued which pledges the loan
 repayments and the proceeds of which are deposited in that
 subaccount.
         (4) The bond proceeds must 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 remains in the fund and does not lapse 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 this state to comply with requirements set forth for
 issuing tax-exempt bonds, including arbitrage rebate calculations.
 This accounting must 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. 19808. (1) Money in the fund that is allocated under
 section 19807 must be used for the following purposes:
         (a) Money allocated under section 19807(1)(a) must 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 in accordance with
     RMH                                                           H05289'24
                                       8
 part 213.
       (ii) Response activities undertaken by the department at
 facilities in accordance with 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) $1,000,000,000.00 must be used to provide grants and loans
 to local units of government for eligible activities at eligible
 properties with redevelopment potential. Of the money provided for
 in this subparagraph, not more than $500,000,000.00 may be used to
 provide grants and not more than $500,000,000.00 may be used to
 provide loans in accordance with the clean Michigan initiative
 reauthorization grant and revolving loan program created in section
 19808a. However, grants or loans provided for in this subparagraph
 must not be made to a local unit of government 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 19808b(f).
       (b) Money allocated under section 19807(1)(b) must be used for
 waterfront redevelopment grants in accordance with part 795.
       (c) Money allocated under section 19807(1)(c) must be used for
 response activities for the remediation of contaminated lake and
 river sediments in accordance with part 201.
       (d) Money allocated under section 19807(1)(d) must be used for
 nonpoint source pollution prevention and control grants or wellhead
 protection grants in accordance with part 88.
       (e) Money allocated under section 19807(1)(e) must be
 deposited into the clean water fund created in section 8807.
       (f) Money allocated under section 19807(1)(f) must be expended
     RMH                                                           H05289'24
                                       9
 as follows:
       (i) $500,000,000.00 must be deposited into the small business
 pollution prevention assistance revolving loan fund created in
 section 14513.
       (ii) $500,000,000.00 must be used by the department to
 implement pollution prevention activities other than those funded
 under subparagraph (i).
       (g) Money allocated under section 19807(1)(g) must be used by
 the department of 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 19807(1)(h) must be used for
 infrastructure improvements at state parks in this state, as
 determined by the department of natural resources. The installation
 or upgrade of drinking water systems or restroom facilities is the
 first priority.
       (i) Money allocated under section 19807(1)(i) must be used to
 provide grants to local units of government for local recreation
 projects under part 716.
       (2) Of the money allocated under section 19807(1)(a),
 $250,000,000.00 must 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 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
     RMH                                                            H05289'24
                                      10
 (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, 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 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 19807(1)(a) to (f) is
 available for appropriation to the department to pay its costs
 directly associated with the completion of a project authorized by
 section 19807(1)(a) to (f). Not more than 3% of the total amount
 specified in section 19807(1)(h) and (i) is available for
 appropriation to the department of natural resources to pay its
 costs directly associated with the completion of a project
 authorized by section 19807(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 must not be reduced as a
 result of costs funded in accordance with this subsection.
       (5) A grant must 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 stadium or
 arena for use by a professional sports team.
       (b) Land or other facilities owned or operated by a gaming
 facility or stadium or arena for use by a professional sports team.
       (c) Land within a project area described in a project plan in
 accordance with the economic development corporations act, 1974 PA
     RMH                                                          H05289'24
                                       11
 338, MCL 125.1601 to 125.1636, for a gaming facility.
       (6) The department, the department of natural resources, and
 the department of health and human services shall each submit
 annually a list o