ENVIRONMENTAL PROTECTION BOND IMPLEMENTATION

MCL ch. 324, subtit. Act 451 of 1994, art. II, ch. 6, pt. 195

in effect

MCL 324.19501 Definitions.

324.19501. Definitions. Sec. 19501. As used in this part: (a) "Bonds" means the bonds issued under part 193 or former Act No. 326 of the Public Acts of 1988. (b) "Fund" means the environmental protection bond fund created in section 19506. (c) "Local unit of government" means a county, city, village, or township, or an agency of a county, city, village, or township; an authority or any other public body created by or pursuant to state law; or this state or an agency or department of this state. (d) "Private entity" means an individual, trust, firm, partnership, corporation, or association, whether profit or nonprofit, that is not a local unit of government. Add. 1995, Act 60, Imd. Eff. May 24, 1995 [PopularName] Act 451 [PopularName] NREPA

MCL 324.19502 Legislative finding and declaration.

324.19502. Legislative finding and declaration. Sec. 19502. The legislature finds and declares that the environmental protection programs implemented under former Act No. 328 of the Public Acts of 1988 or 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. Add. 1995, Act 60, Imd. Eff. May 24, 1995 [PopularName] Act 451 [PopularName] NREPA

MCL 324.19503 Bonds; requirements generally.

324.19503. Bonds; requirements generally. Sec. 19503. (1) The bonds issued under former Act No. 326 of the Public Acts of 1988 or part 193 shall be issued in 1 or more series, each series to be in a principal amount, to be dated, to have the maturities which may be either serial, term, or term and serial, to bear interest at a rate or rates, to be subject or not subject to prior redemption, and if subject to prior redemption with or without call premiums, to be payable at a place or places, to have or not have provisions for registration as to principal only or as to both principal and interest, to be in a form and to be executed in a manner as shall be determined by resolution to be adopted by the state administrative board and subject to or granting those covenants, directions, restrictions, or rights specified by resolution to be adopted by the state administrative board as necessary to insure the marketability, insurability, or tax exempt status. 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 pursuant to this section shall not be counted against the limitation on principal amount imposed by the vote of the people on November 8, 1988. Further, refunding bonds issued pursuant to this section shall not be subject to the restrictions of section 19507. (3) The state administrative board may authorize and 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 that are 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. (c) Select which outstanding bonds will be refunded, if any, by the new issue of bonds. (d) Buy bonds so issued 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 the 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 shall be approved by the department of treasury before their issuance but are not otherwise subject to the municipal finance act, Act No. 202 of the Public Acts of 1943, being sections 131.1 to 139.3 of the Michigan Compiled Laws. (6) The bonds or any series of the bonds shall be sold at such price and at a publicly advertised sale or a competitively negotiated sale as determined by the state administrative board. If bonds are issued at a competitively negotiated sale, the state administrative board shall use its best efforts to include firms based in this state in the sale of the bonds. (7) Except as provided in subsection (8), the bonds shall be sold in accordance with the following schedule, beginning during the first year after December 1, 1988: (a) Not more than 34% shall be sold during the first year. (b) Not more than 33% shall be sold during the second year. (c) Not more than 33% shall be sold during the third year. (d) After the third year, any remaining bonds may be sold at the discretion of the state administrative board. (8) The state administrative board may alter the schedule for issuance of the bonds provided in subsection (7) if either or both of the following occur: (a) Amendments to the internal revenue code of 1986 would impair the tax-exempt status of the bonds. (b) The legislature concurs in the declaration of a toxic substance emergency made by the governor pursuant to law. Add. 1995, Act 60, Imd. Eff. May 24, 1995; Am. 1995, Act 73, Imd. Eff. June 6, 1995 [PopularName] Act 451 [PopularName] NREPA

MCL 324.19504 Bonds negotiable; tax exemption.

324.19504. Bonds negotiable; tax exemption. Sec. 19504. Bonds issued under former Act No. 326 of the Public Acts of 1988 or part 193 shall be fully negotiable under the uniform commercial code, Act No. 174 of the Public Acts of 1962, being sections 440.1101 to 440.11102 of the Michigan Compiled Laws. The bonds and the interest on the bonds shall be exempt from all taxation by the state or any political subdivisions of the state. Add. 1995, Act 60, Imd. Eff. May 24, 1995 [PopularName] Act 451 [PopularName] NREPA

MCL 324.19505 Bonds as securities.

324.19505. Bonds as securities. Sec. 19505. Bonds issued under former Act No. 326 of the Public Acts of 1988 or part 193 are made 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. Add. 1995, Act 60, Imd. Eff. May 24, 1995 [PopularName] Act 451 [PopularName] NREPA

MCL 324.19506 Environmental protection bond fund; creation; composition; restricted subaccounts.

324.19506. Environmental protection bond fund; creation; composition; restricted subaccounts. Sec. 19506. (1) The environmental protection bond fund is created in the state treasury. (2) The fund shall consist of all of the following: (a) The proceeds of sales of general obligation bonds issued pursuant to former Act No. 326 of the Public Acts of 1988 or part 193 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 funds received. (3) The department of treasury may establish restricted subaccounts within the fund as necessary to administer the fund. Add. 1995, Act 60, Imd. Eff. May 24, 1995 [PopularName] Act 451 [PopularName] NREPA

MCL 324.19507 Disposition and allocation of bond proceeds; investment of fund; allocation and disposition of interest and earnings; transfer of repayments of principal and interest; disposition of unencumbered balance.

324.19507. Disposition and allocation of bond proceeds; investment of fund; allocation and disposition of interest and earnings; transfer of repayments of principal and interest; disposition of unencumbered balance. Sec. 19507. (1) The total proceeds of all bonds issued under former Act No. 326 of the Public Acts of 1988 or part 193 shall be deposited into the fund and allocated as follows: (a) Except as provided in section 19508(1)(a)(ii) and as otherwise provided in this act, not more than $425,000,000.00 shall be used to clean up sites of toxic and other environmental contamination. (b) Not more than $150,000,000.00 shall be used for solid waste projects including, but not limited to, reducing, recycling, and properly disposing of solid waste. Money that is available under this subdivision but not appropriated and money that is appropriated under this subdivision that reverts to the fund shall be transferred to the cleanup and redevelopment fund created in section 20108. (c) Not more than $60,000,000.00 shall be used to capitalize the state water pollution control revolving fund established pursuant to section 16a of the shared credit rating act, Act No. 227 of the Public Acts of 1985, being section 141.1066a of the Michigan Compiled Laws. (d) Not more than $25,000,000.00 shall be used to fund this state's participation in a regional Great Lakes protection fund. (2) The state treasurer shall direct the investment of the fund. Except as otherwise may be required by the resolution authorizing the issuance of the bonds in order to maintain the exclusion from gross income of the interest paid on the bonds or to comply with state or federal law, interest and earnings from investment of the proceeds of any bond issue shall be transferred to the cleanup and redevelopment fund created in section 20108, except for the fiscal years 1992-93 and 1993-94, when any such interest and earnings accrued in those, or prior fiscal years, shall be deposited in the state water pollution control revolving fund established pursuant to section 16a of Act No. 227 of the Public Acts of 1985. (3) Except as otherwise may be required by the resolution authorizing the issuance of the bonds in order to maintain the exclusion from gross income of the interest paid on the bonds or to comply with state or federal law, all repayments of principal and interest earned under a loan program created with money under subsection (1)(b) shall be transferred to the cleanup and redevelopment fund created in section 20108. (4) The unencumbered balance in the fund at the close of the fiscal year shall remain in the fund and shall not revert to the general fund. Add. 1995, Act 60, Imd. Eff. May 24, 1995; Am. 1996, Act 380, Imd. Eff. July 24, 1996 [PopularName] Act 451 [PopularName] NREPA

MCL 324.19508 Use of money in fund allocated under MCL 324.19507; expenditures; recovery and retention of funds by eligible community; contents and submission of list of projects; appropriations; prioritizing and approving projects; "eligible community" defined.

324.19508. Use of money in fund allocated under MCL 324.19507; expenditures; recovery and retention of funds by eligible community; contents and submission of list of projects; appropriations; prioritizing and approving projects; "eligible community" defined. Sec. 19508. (1) Except as provided in subsection (3), money in the fund that is allocated under section 19507 shall be used for the following purposes: (a) Money in the fund that is allocated under section 19507(1)(a) shall be used for sites identified through parts 201 and 213, to be expended and recovered by the state in the same manner as provided in that part. Of the funds allocated under section 19507(1)(a), the following apply: (i) Not more than $35,000,000.00 shall be used to clean up sites of environmental contamination that have been identified under former 1982 PA 307, part 201, or part 213; that meet either of the following: (A) Until the effective date of the 2016 amendatory act that amended this section, will not be funded in the next fiscal year and have been approved by the department as having measurable economic benefit. (B) Beginning on the effective date of the 2016 amendatory act that amended this section, for projects meeting the criteria of sections 19608 to 19615. (ii) Not more than $10,000,000.00 may be used to provide grants to eligible communities to investigate and determine whether property within an eligible community is a site of environmental contamination and, if so, to characterize the nature and extent of the contamination. A grant shall be issued under this subparagraph only if all of the following conditions are met: (A) The characterization of the nature and extent of contamination includes an estimate of response activity costs in relation to the value of the property in an uncontaminated state and identifies future potential limitations on the use of the property based upon current environmental conditions. (B) The property has demonstrable economic development potential. This provision does not require a specific development proposal to be identified. (C) The property is located within an eligible community that has received less than $1,000,000.00 in total grants under this subparagraph. However, a grant that has resulted in measurable economic benefits shall not be included in the calculation of the $1,000,000.00. (b) Money in the fund that is allocated for solid waste projects including, but not limited to, reducing, recycling, and properly disposing of solid waste shall be used to fund state projects, to provide grants and loans to local units of government, and to provide grants and loans to private entities for any of the programs identified in part 191, in the amounts appropriated pursuant to subsection (5). Not less than $17,500,000.00 of the money for solid waste projects shall be used to fund the following: (i) To promote and expand markets for recycled materials. (ii) To assist in the recycling of solid wastes, including, but not limited to, plastics, metals, tires, wood, and paper. (iii) To promote research on resource recovery. (iv) To study marketing options for products that use recycled materials. (c) Money in the fund that is allocated to capitalize the state water pollution control revolving fund created in section 16a of the shared credit rating act, 1985 PA 227, MCL 141.1066a, shall be used as provided in part 53. (d) Money in the fund that is allocated to fund this state's participation in a regional Great Lakes protection fund pursuant to part 331. (2) If, by June 28, 1995, the department determines that money allocated under subsection (1)(a)(ii) is unlikely to be expended pursuant to that subparagraph, $5,000,000.00 of the money allocated pursuant to that subparagraph shall be expended pursuant to subsection (1)(a)(i). (3) If money that is expended pursuant to subsection (1)(a)(ii) is recovered by an eligible community from a person who may be liable under part 201, through proceeds from the sale of the property, or through any other mechanism, and additional funds for environmental response activities on the property are not necessary, the eligible community may retain those funds for expenditure on projects that the department determines are eligible to receive funding under subsection (1)(a)(ii). An accounting of the recovered funds must be provided to the department within 30 days of receipt, and approval and expenditure of the recovered funds shall be in the same manner as funds awarded pursuant to subsection (1)(a)(ii). If funds are recovered and not spent on other projects pursuant to this subparagraph within 2 years after they are recovered by the eligible community, the eligible community shall forward the money collected to the state treasurer for deposit into the fund to be used pursuant to subsection (1)(a)(ii). When accounting for the use of recovered funds, eligible communities may itemize deductions for site preparation and other costs directly related to the reuse of a site funded under this section. (4) Money provided in the fund may be used by the department of treasury to pay for the cost of issuing bonds under former 1988 PA 326 or part 193 and by the department to pay department costs as provided in this subsection. Not more than 6% of the total amount specified in section 19507(1)(a), (b), and (d) shall be available for appropriation to the department to pay department costs directly associated with the completion of a project described in section 19507(1)(a), (b), or (d), for which bonds are issued as provided under this part. Any department costs associated with a project described in section 19507(1)(c) for which bonds are issued under this part shall be paid as provided in the state statute implementing the state water pollution control revolving fund. Bond proceeds shall not be available to pay indirect, administrative overhead costs incurred by any organizational unit of the department not directly responsible for the completion of a project. It is the intent of the legislature that general fund appropriations to the department shall not be reduced as a result of department costs funded pursuant to this subsection. (5) Except as provided in subsection (3), the department shall annually submit a list of all projects that are recommended to be funded under this part 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. This list shall be submitted to the legislature not later than February 15 of each year. This list shall also be submitted before any request for supplemental appropriation of bond funds. The list shall include the name, address, and telephone number of the eligible recipient or participant; the nature of the eligible project; the county in which the eligible project is located; an estimate of the total cost of the eligible project; and other information considered pertinent by the department. (6) The legislature shall appropriate prospective or actual bond proceeds for projects proposed to be funded. Appropriations shall be carried over to succeeding fiscal years until the project for which the funds are appropriated is completed. Environmental cleanup projects that are eligible for funding under subsection (1)(a), but not including subsection (1)(a)(i) and (ii), shall be prioritized and approved pursuant to the procedures outlined in part 201. Projects to which loans are provided from the state water pollution control revolving fund shall be approved pursuant to state law implementing that fund. The capitalization of the regional Great Lakes protection fund shall be a 1-time appropriation. (7) Not later than December 31 of each year, the department shall submit a list of the projects financed under this part 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 committees of the house of representatives and the senate on appropriations for the department. The list shall include the name, address, and telephone number of the recipient or participant; the nature of the project; the amount of money received; the county in which the project is located; and other information considered pertinent by the department. (8) As used in this section, "eligible community" means any of the following: (a) A city, village, or township, or a county on behalf of a city, village, or township, that on May 1, 1993 meets the applicable criteria of a local government unit under section 2(f) of the neighborhood enterprise zone act, 1992 PA 147, MCL 207.772. (b) A city that meets any of the following descriptions: (i) Has a population of greater than 10,000 and is located within a county that has a population density of less than 39 residents per square mile. (ii) Has a population of greater than 2,500 and is located within a county that has a population density of less than 39 residents per square mile. (iii) Had an average unemployment rate of 11.5% or more during the most recent calendar year for which data is available from the Michigan employment security commission. Add. 1995, Act 60, Imd. Eff. May 24, 1995; Am. 2016, Act 474, Eff. Apr. 5, 2017 [PopularName] Act 451 [PopularName] NREPA

MCL 324.19509 Grant and loan programs; rules; maximum participation; considerations in making grant or loan; interest; grant projects under MCL 324.19508(1)(a); applicability.

324.19509. Grant and loan programs; rules; maximum participation; considerations in making grant or loan; interest; grant projects under MCL 324.19508(1)(a); applicability. Sec. 19509. (1) The department shall promulgate rules necessary to implement grant and loan programs provided in this part. (2) The department shall assure maximum participation by local units of government and by private entities by promulgating rules that provide for a grant or loan program, where appropriate. In determining whether a grant or a loan program is appropriate, the department shall consider whether the project is likely to be undertaken without state assistance; the availability of state funds from other sources; the degree of private sector participation in the type of project under consideration; the extent of the need for the project as a demonstration project; and such other factors considered important by the department. (3) Prior to making a grant or loan authorized by this part, the department shall consider the extent to which the making of the grant or loan contributes to the achievement of a balanced distribution of grants and loans throughout the state. (4) The department shall provide in rules promulgated under this part that loans that are issued by the department to private entities shall include an interest charge of not less than 5% per year. (5) Notwithstanding any other provision of this section, for grant projects considered for funding under section 19508(1)(a) on or after the effective date of the 2016 amendatory act that amended this section, subsections (1) to (4) do not apply and the department shall apply the criteria used for projects funded under section 19611. (6) Neither this section nor section 19510 apply to loans from the state water pollution control revolving fund. Add. 1995, Act 60, Imd. Eff. May 24, 1995; Am. 2016, Act 474, Eff. Apr. 5, 2017 [PopularName] Act 451 [PopularName] NREPA

MCL 324.19510 Application for grant or loan; form; requirements.

324.19510. Application for grant or loan; form; requirements. Sec. 19510. (1) An application for a grant or a loan authorized under this part shall be made on a form prescribed by the department. The department may require the applicant to provide any information reasonably necessary to allow the department to make a determination required by this part. (2) Beginning on the effective date of the 2016 amendatory act that amended this section, an application for a grant under section 19508(1)(a) is subject to the same requirements listed in section 19610 for a loan under section 19608(1)(a)(iv). Add. 1995, Act 60, Imd. Eff. May 24, 1995; Am. 2016, Act 474, Eff. Apr. 5, 2017 [PopularName] Act 451 [PopularName] NREPA

MCL 324.19511 Conditions to making grant or loan.

324.19511. Conditions to making grant or loan. Sec. 19511. The department shall not make a grant or a loan under section 19508(1)(a) or (b) unless all of the following conditions are met: (a) The applicant demonstrates that the proposed project is in compliance with or will result in compliance with all applicable state laws and rules. (b) The applicant demonstrates to the department the capability to carry out the proposed project. (c) The applicant provides the department with evidence that a licensed professional engineer has approved the plans and specifications for the project, if appropriate. (d) The applicant demonstrates to the department that there is an identifiable source of funds for the future maintenance and operation of the proposed project. (e) Notwithstanding any other provision of this section, for grant projects approved for funding under section 19508(1)(a) on or after the effective date of the 2016 amendatory act that amended this section, subdivisions (a) to (d) do not apply and the department shall apply the same application requirements provided for a grant or loan in section 19609. Add. 1995, Act 60, Imd. Eff. May 24, 1995; Am. 2016, Act 472, Eff. Apr. 5, 2017 [PopularName] Act 451 [PopularName] NREPA

MCL 324.19512 Recipient of grant or loan; conditions; noncompliance; revocation of grant or withholding payment; recovery of grant by department; withholding grant or loan; grant projects approved under MCL 324.19508(1)(a).

324.19512. Recipient of grant or loan; conditions; noncompliance; revocation of grant or withholding payment; recovery of grant by department; withholding grant or loan; grant projects approved under MCL 324.19508(1)(a). Sec. 19512. (1) A recipient of a grant or a loan made under section 19508(1)(a) or (b) must comply with all of the following: (a) A recipient shall keep an accounting of the money spent on the project or facility in a generally accepted manner. The accounting is subject to a postaudit. (b) A recipient shall obtain authorization from the department before implementing a change that significantly alters the proposed project or facility. (2) The department may revoke a grant or a loan made by it under this part or withhold payment if the recipient fails to comply with the terms and conditions of the grant or loan or with the requirements of this part or the rules promulgated under this part. (3) The department may recover a grant if the project for which the grant was made never operates. (4) The department may withhold a grant or a loan until the department determines that the recipient is able to proceed with the proposed project or facility. (5) To assure timely completion of a project, the department may withhold 10% of the grant or loan amount until the project is complete. (6) Notwithstanding any other provision of this section, for grant projects approved for funding under section 19508(1)(a) on or after the effective date of the 2016 amendatory act that amended this section, subsections (1) to (5) do not apply and the recipient of any grant or loan must comply with the requirements of section 19612. Add. 1995, Act 60, Imd. Eff. May 24, 1995; Am. 2016, Act 472, Eff. Apr. 5, 2017 [PopularName] Act 451 [PopularName] NREPA

MCL 324.19513 Rules.

324.19513. Rules. Sec. 19513. (1) The department may promulgate rules as are necessary or required to implement this part. (2) For grant projects funded under section 19508(1)(a), the department shall not implement or enforce R 299.5051 to R 299.5061 related to any grant or loan authorized or approved on or after the effective date of the 2016 amendatory act that amended this section. Add. 1995, Act 60, Imd. Eff. May 24, 1995; Am. 2016, Act 472, Eff. Apr. 5, 2017 [PopularName] Act 451 [PopularName] NREPA [AdminRule] R 299.5101 et seq. and R 299.51001 et seq. of the Michigan Administrative Code.

Source: Michigan Legislature (legislature.mi.gov)URL: https://legislature.mi.gov/documents/mcl/Chapter%20324.xmlFetched: 10/20/2026