Bill Summary – FastDemocracy

Legislative Analysis
                                                                                      Phone: (517) 373-8080
DISASTER AND EMERGENCY CONTINGENCY FUND &
                                                                                      http://www.house.mi.gov/hfa
STATE HAZARD MITIGATION FUND
                                                                                      Analysis available at
House Bill 6027 (H-2)                                                                 http://www.legislature.mi.gov
Sponsor: Rep. Christine Morse
Committee: Appropriations
Complete to 12-10-24
SUMMARY:
        House Bill 6027 (H-2) is a budget implementation bill that would amend the Emergency
        Management Act to do all of the following:
           • Increase the statutory requirements for the amount of funds that may be held in the
              Disaster and Emergency Contingency Fund (DECF). Currently, the act requires the
              legislature to appropriate funds to maintain the DECF balance at a level between $2.5
              million and $10.0 million. The bill would increase the minimum required balance to
              $10.0 million and increase the maximum allowed balance to $25.0 million.
           • Modify the DECF grant structure as follows:1
                   o Set the grant cap for eligible counties or municipalities with a population under
                      75,000 at $1.0 million.
                   o Set the grant cap for eligible counties or municipalities with a population of
                      75,000 or more at $2.0 million.
           • Create the State Hazard Mitigation Fund (SHMF) and allow, but not require, the state
              treasurer to deposit money and other assets from the DECF or any other source into the
              fund. The MSP director would be required to promulgate administrative rules
              governing assistance applications, award determinations, eligible expenditures, and
              program administration related to the SHMF. Funds in the SHMF would be disbursed
              by MSP as grants to support hazard mitigation programs, which would include the
              rebuilding of any damaged infrastructure in a manner that would reduce the exposure
              of the public to future hazards and mitigate against further loss. Unexpended and
              unencumbered funds remaining in the SHMF at the end of the fiscal year would not
              lapse into the general fund and would be carried forward for expenditure in subsequent
              fiscal years.
        MCL 30.418 (amended); MCL 30.418a (proposed); MCL 30.419 (amended)
FISCAL IMPACT:
        The bill would increase the minimum required balance for the DECF, which could result in
        increased costs for the state if the total cost of providing grant assistance and matching funds
        for federal assistance brings the available balance below the proposed $10.0 million
        requirement. The total cost of DECF grants awarded by MSP and the amount of required
        federal matching funds vary from year to year. Depending on these costs, additional GF/GP
1
 The current DECF grant structure sets the following caps on assistance: $250,000 for local units with a population
under 25,000; $500,000 for local units with a population between 25,000 and 75,000; and $1.0 million for local units
with a population of 75,000 or more.
House Fiscal Agency                                                                                     Page 1 of 2
        may be required in future fiscal years to maintain the proposed balance requirements. The
        projected DECF balance for December 6, 2024, is $14.9 million (including the $10.0 million
        GF/GP appropriation in the FY 2024-25 budget).
        The provisions of the bill modifying the DECF grant structure would have a positive fiscal
        impact on eligible local units of government by increasing the amount of grant assistance
        available to these entities. The bill would not change the current requirement that DECF grants
        must not exceed either the proposed caps ($1.0 million for “small” local units and $2.0 million
        for “large” local units) or 10% of the applying county’s or municipality’s total annual operating
        budget for the previous fiscal year, whichever is less.
        The provisions of the bill that would create the SHMF would have an indeterminate fiscal
        impact on the state. Because the bill does not provide for an initial deposit into the fund or
        require a minimum balance, the state would only incur additional costs if deposits from the
        DECF into the SHMF bring the balance of the DECF below the proposed $10.0 million
        minimum balance requirement. These provisions would have a positive fiscal impact on
        eligible local units of government by offering access to state hazard mitigation assistance.
                                                                 Fiscal Analyst: Aaron A. Meek
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
House Fiscal Agency                                                           HB 6027 (H-2)   Page 2 of 2
Statutes affected: 
Substitute (H-2): 30.418, 30.419
Substitute (H-3): 30.419
House Introduced Bill: 30.418, 30.419
As Passed by the House: 30.419