Bill Text: MI SB0134 | 2009-2010 | 95th Legislature | Engrossed

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Bill Title: Agriculture; other; technology preference; clarify, and eliminate loan function. Amends title & secs. 2, 2a & 3 of 2000 PA 322 (MCL 285.302 et seq.).

Spectrum: Moderate Partisan Bill (Republican 10-3)

Status: (Engrossed - Dead) 2010-01-27 - Re-referred To Committee On Agriculture [SB0134 Detail]

Download: Michigan-2009-SB0134-Engrossed.html

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SB-0134, As Passed Senate, February 19, 2009

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

SENATE BILL NO. 134

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 2000 PA 322, entitled

 

"Julian-Stille value-added act,"

 

by amending the title and sections 2, 2a, and 3 (MCL 285.302,

 

285.302a, and 285.303), the title and section 2 as amended by 2006

 

PA 423 and section 2a as added by 2006 PA 424.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

TITLE

 

     An act to create certain committees; to create certain funds

 

from certain sources and to provide for the disposition of money

 

from the funds; to provide for the creation of certain funds by

 

certain private entities; to create incentives and to locate and

 

maintain value-added agricultural processing, commercialization of

 

agriculture, and production ventures within this state; to provide

 

for grants , loans, and loan guarantees to certain private and

 

governmental entities for certain purposes; to provide for certain

 

powers and duties for certain private entities, state agencies,

 

commissions, and departments; to authorize loans, loan guarantees,

 

expenditures , and grants from the funds; and to finance the

 

development of certain programs.

 

     Sec. 2. (1) As used in this section and sections section 2a:

 

and 2b:

 

     (a) "Agricultural processing" means 1 or more of the

 

operations that transform, package, sort, or grade livestock or

 

livestock products, agricultural commodities, or plant or plant

 

products into goods that are used for the intermediate or final

 

consumption including goods for nonfood use.

 

     (b) "Commercialization" means the transition from research to

 

the actions necessary to achieve market entry and general market

 

competitiveness of new innovative technologies, processes, and

 

products and the services that support, assist, equip, finance, or

 

promote a person or an entity with that transition.

 

     (c) "Department" means the Michigan department of agriculture.

 

     (d) "Eligible grantee" means a person able to receive a grant

 

under this section and includes, but is not limited to,

 

individuals, farmer owned cooperatives, partnerships, limited

 

liability companies, private or public corporations, and local

 

units of government.

 

     (e) "Fund" means the agricultural development grant fund

 

created in section 2a.

 

     (f) "Joint evaluation committee" means a committee selected by

 

the commission of agriculture with appropriate expertise to conduct

 

an independent, unbiased, objective, and competitive evaluation of

 

grant proposals. The committee shall include at least 3 producers,

 

including 1 plant agricultural producer, 1 animal agricultural

 

producer, and another producer at large, an individual with a

 

scientific agriculture education, and an agricultural financial

 

lender.

 

     (g) "Qualified agricultural loan" means a loan for projects

 

designed to establish, retain, attract, or develop value-added

 

agricultural processing and related agricultural production

 

operations in this state.

 

     (h) "Specialty crops" means any agricultural commodity except

 

wheat, feed grains, oil seeds, cotton, rice, peanuts, and tobacco,

 

as well as products derived from these agricultural commodities.

 

     (g) (i) "Value-added" means the enhancement or improvement of

 

the overall value of an agricultural commodity or of an animal or

 

plant product into a product of higher value. The enhancement or

 

improvement includes, but is not limited to, marketing,

 

agricultural processing, transforming, or packaging.

 

     (2) The department shall establish and administer an

 

agricultural value-added grant program. The director of the

 

department, with the consent of the commission of agriculture,

 

shall award grants from the fund created in section 2a only for

 

projects designed to establish, retain, expand, attract, or develop

 

value-added agricultural processing and related agricultural

 

production operations in this state. In approving a grant under

 

this subsection, the director of the department shall provide

 

supporting documentation on the selection of approved applicants to

 

the commission of agriculture. shall state the specific objective

 

reasons supporting the selection of the applicant over competing

 

applicants. The joint evaluation committee shall assist and provide

 

recommendations to the commission of agriculture director of the

 

department in identifying high-quality projects for funding based

 

upon the selection criteria and scoring system approved by the

 

commission of agriculture. The recommendations shall include all

 

materials and decision documents used by the joint evaluation

 

committee in making the recommendations.

 

     (3) All scoring sheets, meetings, and other decisions made by

 

the joint evaluation committee shall be open to the public and

 

considered public documents. A record or portion of a record,

 

material, or other data received, prepared, used, or retained by

 

the department in connection with an application to or with a

 

project or product assisted by the department or with an award,

 

grant, loan, or investment relating to financial or proprietary

 

information submitted by the applicant that is considered by the

 

applicant and acknowledged by the department as confidential shall

 

not be subject to the disclosure requirements of the freedom of

 

information act, 1976 PA 442, MCL 15.231 to 15.246.

 

     (4) Subject to subsection (2), the department shall do all of

 

the following:

 

     (a) Establish a competitive process to award grants. The

 

competitive process shall include, but is not limited to, the

 

following:

 

     (i) A provision that the applications must be reviewed by the

 

joint evaluation committee. Scientific and technical merit,

 

commercial merit, and the ability to leverage additional funding

 

shall be given equal weight in the review and scoring process.

 

     (ii) A preference for proposals that demonstrate a high level

 

of innovation for value-added agricultural processing and related

 

agricultural production ventures to benefit producers in this

 

state.

 

     (iii) A preference may be made for proposals that are attempting

 

to secure have secured a license for agricultural-related

 

intellectual property to be produced in Michigan.

 

     (iv) A provision that the program will utilize contracts with

 

measurable milestones, clear objectives, and provisions to revoke

 

awards for breach of contract.

 

     (v) Provide for a cash match of at least 10% of the grant by

 

the applicant.

 

     (vi) Limit overhead rates for recipients of grants to reflect

 

actual overhead but not greater than 15% of the grant.

 

     (vii) A preference for proposals whose business plan forecasts

 

revenues within 2 years or that have outside investments from

 

investors with experience and management teams with experience in

 

the area targeted by the proposal, or both.

 

     (b) Prepare a request for proposals on at least an annual

 

basis for grants for eligible grantees from the fund. Grants are

 

contingent upon the availability of funds.

 

     (5) Subject to subsection (4)(a)(i), an application for a grant

 

submitted under this section shall be evaluated and ranked

 

according to selection criteria and a scoring or point system

 

approved by the director of the department. The selection criteria

 

and the scoring or point system shall be reviewed and approved by

 

the commission of agriculture. In developing such a system, the

 

department shall seek the assistance of the Michigan economic

 

development corporation, any institution of higher education, the

 

United States department of agriculture—rural development agency,

 

the rural development council of Michigan, agricultural producers,

 

and other industry and professional organizations as determined by

 

the director of the department.

 

     (6) The commission of agriculture director of the department

 

shall ensure that a recipient of a grant under this section agrees

 

that, as a condition of receiving the grant, that recipient shall

 

not use the money for the development of a casino regulated under

 

the Michigan gaming control and revenue act, the Initiated Law of

 

1996 IL 1, MCL 432.201 to 432.226, a casino regulated under the

 

Indian gaming regulatory act, Public Law 100-497, 102 Stat. 2467,

 

or any other gaming enterprise.

 

     (7) The department, in cooperation with the department of

 

treasury and Michigan financial institutions, shall establish a

 

low-interest loan program in a manner similar to the qualified

 

agricultural loan program established in section 2a of 1855 PA 105,

 

MCL 21.142a, or a loan guarantee program to provide qualified

 

agricultural loans. The department of treasury shall give the

 

department any necessary assistance required to establish a low-

 

interest loan or loan guarantee program. The department shall work

 

with Michigan financial institutions to establish a certification

 

system to verify that loan applicants are requesting qualified

 

agricultural loans. As part of the low-interest loan program, the

 

department shall do the following:

 

     (a) Work with the department of treasury to establish

 

agreements with participating financial institutions.

 

     (b) Ensure that an investment or new investment utilizing the

 

21st century jobs fund in which a qualified agricultural loan is

 

attributed is not made pursuant to this section after June 1, 2008.

 

     (c) Ensure that the terms of a qualified agricultural loan

 

under this section are for a term of not more than 5 years and that

 

the first payment made by the recipient occurs not later than 24

 

months after the date of the loan.

 

     (d) Ensure that the interest rate charged by participating

 

financial institutions does not exceed 50% of prime in Michigan

 

plus 1%.

 

     (e) Ensure that participating financial institutions do not

 

refinance prior debt.

 

     (f) Require a participating financial institution to certify

 

compliance with the Sarbanes-Oxley act of 2002, Public Law 107-204,

 

or prohibit an officer, director, or principal shareholder of a

 

participating financial institution, or his or her immediate family

 

members, from receiving an agricultural value-added low-interest

 

loan from the financial institution.

 

     (g) Require the recipient of a qualified agricultural loan

 

under this section to agree that, as a condition of receiving the

 

loan, that the recipient shall not use the money for the

 

development of a casino regulated under the Michigan gaming control

 

and revenue act, the Initiated Law of 1996, MCL 432.201 to 432.226,

 

a casino regulated under the Indian gaming regulatory act, Public

 

Law 100-497, 102 Stat. 2467, or any other gaming enterprise.

 

     (8) As part of a loan guarantee program, the department shall

 

do the following:

 

     (a) Work with the department of treasury to establish

 

agreements with participating financial institutions.

 

     (b) Ensure that participating financial institutions require

 

adequate collateral and fully liquidate all collateral before

 

calling on the loan guarantees.

 

     (c) Establish a loan guarantee of not more than 90% of the

 

financial institution's loss after all alternatives to collect have

 

been exhausted.

 

     (d) Ensure that participating financial institutions do not

 

refinance prior debt.

 

     (e) Require a participating financial institution to certify

 

compliance with the Sarbanes-Oxley act of 2002, Public Law 107-204,

 

or prohibit an officer, director, or principal shareholder of a

 

participating financial institution, or his or her immediate family

 

members, from receiving an agricultural value-added loan guarantee

 

from the financial institution.

 

     (f) Require the recipient of a qualified agricultural loan

 

under this section to agree that, as a condition of receiving the

 

loan guarantee, that the recipient shall not use the money for the

 

development of a casino regulated under the Michigan gaming control

 

and revenue act, the Initiated Law of 1996, MCL 432.201 to 432.226,

 

a casino regulated under the Indian gaming regulatory act, Public

 

Law 100-497, 102 Stat. 2467, or any other gaming enterprise.

 

     (g) Maintain a list of financial institutions that will

 

participate in the loan guarantee program.

 

     (7) (9) The director of the department may impose fiduciary

 

obligations upon a recipient of a grant, including performance

 

bonding, and may impose conditions upon the receipt and expenditure

 

of the grant money.

 

     (8) (10) Notwithstanding section 3(1) of 1968 PA 317, MCL

 

15.323, members of the commission of agriculture and the joint

 

evaluation committee are subject to 1968 PA 317, MCL 15.321 to

 

15.330. As used in this subsection, "substantial conflict of

 

interest" means that the pecuniary interest is of such importance

 

as to either materially influence the judgment of the member in the

 

actual performance of his or her duty under the act or to

 

foreseeably and materially influence the judgment of a reasonable

 

person with similar knowledge and experience acting under similar

 

circumstances and in a like position as the member. For purposes of

 

this section, members of the commission of agriculture and the

 

joint evaluation committee shall do the following:

 

     (a) Discharge the duties of the position in a nonpartisan

 

manner, in good faith, in the best interests of this state, and

 

with the degree of diligence, care, and skill that a fiduciary

 

would exercise under similar circumstances in a like position. In

 

discharging duties of the office, the commission of agriculture

 

when acting in good faith may rely upon the report of the joint

 

evaluation committee or upon financial statements of the department

 

represented to the commission of agriculture by the officer having

 

charge of its books or accounts or stated in a written report by

 

the auditor general.

 

     (b) Not make or participate in making, or in any way attempt

 

to use his or her position to influence a matter before the

 

department regarding , a loan, loan guarantee, a grant , or other

 

expenditure under this act.

 

     (c) Not have any financial interest in a recipient of proceeds

 

under this act and shall not engage in any conduct that constitutes

 

a substantial conflict of interest.

 

     (d) Immediately advise the commission of agriculture in

 

writing of the details of any incident or circumstances that may

 

present the existence of a substantial conflict of interest with

 

respect to the performance of his or her duty under this act.

 

     (e) Disclose a substantial conflict of interest related to any

 

matter before the department or the commission of agriculture takes

 

any action with respect to the matter, which disclosure shall

 

become a part of the record of the official proceedings.

 

     (f) Refrain from doing all of the following with respect to

 

the matter that is a basis of a substantial conflict of interest:

 

     (i) Voting in the proceedings related to the matter.

 

     (ii) Participating in the discussion or deliberation of the

 

matter.

 

     (iii) Being present at the meeting when the discussion,

 

deliberation, and voting on the matter takes place.

 

     (iv) Discussing the matter with any other member of the

 

commission of agriculture or the joint evaluation committee.

 

     (9) (11) An application for a grant from the fund shall be

 

made on a form or format prescribed by the department. The

 

department may require the applicant to provide information

 

reasonably necessary to allow the department to make a

 

determination required under this section.

 

     (10) (12) The department shall promulgate rules under the

 

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

 

24.328, to implement this section.

 

     (13) The amendatory act that added subsection (5) shall not

 

affect any grants awarded under this act prior to the effective

 

date of the amendatory act that added subsection (5).

 

     Sec. 2a. (1) The agricultural development fund is created as a

 

revolving fund within the department of state treasury to be

 

administered by the department. The state treasurer shall direct

 

the investment of the fund. Money in the fund at the close of the

 

fiscal year shall remain in the fund and shall not lapse to the

 

general fund. The department is the administrator of the fund for

 

audit purposes. The department may utilize up to 4% of the fund for

 

administrative purposes. The state treasurer shall credit to the

 

fund money from the following sources:

 

     (a) Appropriations.

 

     (b) Money or other assets from any source for deposit into the

 

fund, including federal money, other state revenues, gifts,

 

bequests, or donations, as well as money from any other source

 

provided by law.

 

     (c) Any money representing loan repayments and interest on the

 

loans.

 

     (2) Of the money appropriated under 2006 PA 153 from the 21st

 

century jobs trust fund, not more than 10% shall be used for grants

 

and the remaining shall be used for loans and loan guarantees. The

 

the maximum grant from the fund shall not exceed $250,000.00. The

 

maximum low-interest loan supported by the fund shall not exceed

 

$500,000.00.

 

     (3) Upon request from the commission of agriculture, the state

 

treasurer shall invest the money in the agricultural development

 

fund in a manner similar to the qualified agricultural loan program

 

established in section 2a of 1855 PA 105, MCL 21.142a, as provided

 

in section 2.

 

     Sec. 3. (1) As used in this section:

 

     (a) "Department" means the department of environmental

 

quality.

 

     (b) "Fund" means the Michigan clean air fund created in this

 

section.

 

     (2) The Michigan clean air fund is created within the

 

department of state treasury to be administered by the department.

 

Money in the fund at the close of the fiscal year shall remain in

 

the fund and shall not lapse to the general fund. The state

 

treasurer shall credit to the fund the money from the

 

uncollectibles allowance recovery funds established in section 4 as

 

well as money from any other source provided by law. The department

 

is the administrator of the fund for audit purposes.

 

     (3) Money in the fund shall be used by the department to

 

provide grants and loans to individuals, private or public

 

corporations, and local units of government for programs or

 

projects established to reduce oxides of nitrogen and volatile

 

organic compounds and for the administration of the grant and loan

 

program.

 

     (4) The director of the department shall have final approval

 

of grants and loans made under this section. Grants and loans made

 

under this section are contingent upon the availability of money in

 

the fund.

 

     (5) The director of the department may impose fiduciary

 

obligations upon a recipient of a grant, including performance

 

bonding, and may impose conditions upon the receipt and expenditure

 

of the grant money.

 

     (6) An application for a grant or loan from the fund shall be

 

made on a form or in a format 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 under this section.

 

     (7) The department shall promulgate rules under the

 

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

 

24.328, to implement this section.