SENATE BILL NO. 608

A bill to amend 1994 PA 451, entitled

"Natural resources and environmental protection act,"

by amending sections 3101, 3103, and 3115 (MCL 324.3101, 324.3103, and 324.3115), section 3101 as amended by 2015 PA 247, section 3103 as amended by 2005 PA 33, and section 3115 as amended by 2004 PA 143, and by adding section 3106c.

the people of the state of michigan enact:

Sec. 3101. As used in this part:

(a) "Aquatic nuisance species" means a nonindigenous species that threatens the diversity or abundance of native species or the ecological stability of infested waters, or commercial, agricultural, aquacultural, or recreational activities dependent on such waters.

(b) "Ballast water" means water and associated solids taken on board a vessel to control or maintain trim, draft, stability, or stresses on the vessel, without regard to the manner in which it is carried.

(c) "Ballast water treatment method" means a method of treating ballast water and sediments to remove or destroy living biological organisms through 1 or more of the following:

(i) Filtration.

(ii) The application of biocides or ultraviolet light.

(iii) Thermal methods.

(iv) Other treatment techniques approved by the department.

(d) "Bond" means a financial instrument guaranteeing performance, including a surety bond from a surety company authorized to transact business in this state, a certificate of deposit, a cash bond, an irrevocable letter of credit, an insurance policy, or a combination of any of these instruments in favor of the department.

(e) "Certificate of deposit" means a negotiable certificate of deposit that meets all of the following requirements:

(i) Is negotiable.

(ii) Is held by a bank or other financial institution regulated and examined by a state or federal agency.

(iii) Is fully insured by an agency of the United States government.

(iv) Is in the sole name of the department.

(v) Has a maturity date of not less than 1 year.

(vi) Is renewed not later than 60 days before the maturity date.

(f) (d) "Department" means the department of environmental quality.environment, Great Lakes, and energy.

(g) (e) "Detroit consumer price index" Consumer Price Index" means the most comprehensive index of consumer prices available for the Detroit area from the United States Department of Labor, Bureau of Labor Statistics.

(h) (f) "Emergency management coordinator" means that term as defined in section 2 of the emergency management act, 1976 PA 390, MCL 30.402.

(i) "Escrow account" means an account that is managed by a bank or other financial institution whose account operations are regulated and examined by a federal or state agency and that complies with section 11523b.

(j) (g) "Great Lakes" means the Great Lakes and their connecting waters, including Lake St. Clair.

(k) (h) "Group 1 facility" means a facility whose discharge is described by R 323.2218 of the Michigan administrative code.Administrative Code.

(l) (i) "Group 2 facility" means a facility whose discharge is described by R 323.2210(y), R 323.2215, or R 323.2216 of the Michigan administrative code. Administrative Code. Group 2 facility does not include a Group 2a facility.

(m) (j) "Group 2a facility" means a facility whose discharge is described by R 323.2210(y) or R 323.2215 of the Michigan administrative code Administrative Code and that meets 1 or more of the following:

(i) The facility's discharge is from a coin-operated laundromat.

(ii) The facility's discharge is from a car wash or vehicle wash open to the public.

(iii) The facility's discharge is a subsurface sanitary discharge of fewer than 10,000 gallons per day that does not meet the terms for authorization under R 323.2211(a) of the Michigan administrative code.Administrative Code.

(iv) The facility's discharge is a seasonal sanitary discharge from a public park, public or private recreational vehicle park or campground, or recreational or vacation camp.

(n) (k) "Group 3 facility" means a facility whose discharge is described by R 323.2211 or R 323.2213 of the Michigan administrative code.Administrative Code.

(o) "Insurance policy" means an insurance policy that conforms to the requirements of 40 CFR 258.74(d) and is provided by an insurer that has a certificate of authority from the director of insurance and financial services to sell this line of coverage. An applicant for an operating license or general permit shall submit evidence of the required coverage by submitting both of the following to the department:

(i) A certificate of insurance that uses wording approved by the department.

(ii) A certified true and complete copy of the insurance policy.

(p) (l) "Local health department" means that term as defined in section 1105 of the public health code, 1978 PA 368, MCL 333.1105.

(q) (m) "Local unit" means a county, city, village, or township or an agency or instrumentality of any of these entities.

(r) (n) "Municipality" means this state, a county, city, village, or township, or an agency or instrumentality of any of these entities.

(s) (o) "National response center" means the National Communications Center established under the clean water act, 33 USC 1251 to 1387, located in Washington, DC, that receives and relays notice of oil discharge or releases of hazardous substances to appropriate federal officials.

(t) (p) "Nonoceangoing vessel" means a vessel that is not an oceangoing vessel.

(u) (q) "Oceangoing vessel" means a vessel that operates on the Great Lakes or the St. Lawrence waterway after operating in waters outside of the Great Lakes or the St. Lawrence waterway.

(v) (r) "Open water disposal of contaminated dredge materials" means the placement of dredge materials contaminated with toxic substances as defined in R 323.1205 of the Michigan administrative code into the open waters of the waters of the state but does not include the siting or use of a confined disposal facility designated by the United States Army Corps of Engineers or beach nourishment activities utilizing uncontaminated materials.

(w) (s) "Primary public safety answering point" means that term as defined in section 102 of the emergency telephone service enabling act, 1986 PA 32, MCL 484.1102.

(x) "Response activity costs" means that term as defined in section 20101.

(y) (t) "Sediments" means any matter settled out of ballast water within a vessel.

(z) (u) "Sewage sludge" means sewage sludge generated in the treatment of domestic sewage, other than only septage or industrial waste.

(aa) (v) "Sewage sludge derivative" means a product for land application derived from sewage sludge that does not include solid waste or other waste regulated under this act.

(w) "Sewage sludge generator" means a person who generates sewage sludge that is applied to land.

(bb) (x) "Sewage sludge distributor" means a person who applies, markets, or distributes, except at retail, a sewage sludge derivative.

(cc) "Sewage sludge generator" means a person who generates sewage sludge that is applied to land.

(dd) (y) "St. Lawrence waterway" means the St. Lawrence River, the St. Lawrence Seaway, and the Gulf of St. Lawrence.

(ee) (z) "Threshold reporting quantity" means that term as defined in R 324.2002 of the Michigan administrative code.Administrative Code.

(ff) (aa) "Waters of the state" means groundwaters, lakes, rivers, and streams and all other watercourses and waters, including the Great Lakes, within the jurisdiction of this state.

Sec. 3103. (1) The department shall protect and conserve the water resources of the state and shall have control of the pollution of surface or underground waters of the state and the Great Lakes , which that are or may be affected by waste disposal of any person. The department may make or cause to be made surveys, studies, and investigations of the uses of waters of the state, both surface and underground, and may cooperate with other governments and governmental units and agencies in making the surveys, studies, and investigations. The department shall assist in an advisory capacity a flood control district that may be authorized by the legislature. The department, in the public interest, shall appear and present evidence, reports, and other testimony during the hearings involving the creation and organization of flood control districts. The department shall advise and consult with the legislature on the obligation of the this state to participate in the costs of construction and maintenance as provided for in the official plans of a flood control district or intercounty drainage district.

(2) The department shall enforce this part and may promulgate rules as it considers necessary to carry out its duties under this part. However, notwithstanding any rule-promulgation authority that is provided in this part, except for rules authorized under section 3112(6) or rules to implement section 3106c, the department shall not promulgate any additional rules under this part after December 31, 2006.

(3) The department may promulgate rules and take other actions as may be necessary to comply with the federal water pollution control act, 33 USC 1251 to 1387, 1389, and to expend funds available under such law that act for extension or improvement of the state or interstate program for prevention and control of water pollution. This part shall not be construed as authorizing does not authorize the department to expend or to incur any obligation to expend any state funds for such that purpose in excess of any amount that is appropriated by the legislature.

(4) Notwithstanding the limitations on rule promulgation under subsection (2), rules promulgated under this part before January 1, 2007 shall remain in effect unless rescinded.

Sec. 3106c. (1) As used in this section:

(a) "Facility" means either of the following:

(i) A facility whose owner or operator is required to file a pollution incident prevention plan under R 324.2006 of the Michigan Administrative Code.

(ii) A dry cleaning facility not described in subparagraph (i).

(b) "Polluting material" means that term as defined in R 324.2002 of the Michigan Administrative Code.

(c) "Pollution incident prevention plan" or "PIPP" means a plan required under R 324.2006 of the Michigan Administrative Code.

(d) "Response activity" means that term as defined in section 20101.

(2) A facility owner or operator shall maintain financial assurance for the purposes of subsection (12) in the amount required by subsection (3). The facility owner or operator shall obtain the financial assurance by the following date:

(a) For a facility described in subsection (1)(a)(i), by January 1, 2027, or the first date after the effective date of the amendatory act that added this section by which the owner or operator is required to develop or evaluate the pollution incident prevention plan under R 324.2006 of the Michigan Administrative Code, whichever is later.

(b) For a facility described in subsection (1)(a)(ii), by January 1, 2026, or 30 days after the facility begins operation, whichever is later.

(3) The financial assurance required under subsection (2) shall be a bond in not less than the following amount:

(a) For a facility described in subsection (1)(a)(i), 70% of the estimated response activity costs if all polluting materials typically on-site were released into the environment.

(b) For a facility described in subsection (1)(a)(ii), 70% of the estimated response activity costs if all polluting materials typically on-site were released into the environment, or $25,000.00, whichever is greater.

(4) For the purposes of subsection (3), response activity costs shall be estimated by either of the following methods at the option of the owner or operator:

(a) Costs per-pound for each pound of each polluting material reported in the pollution incident prevention plan inventory. A PIPP inventory updated or initially filed after the effective date of the amendatory act that added this section shall include estimates of the number of pounds of each polluting material that will typically be on-site.

(b) A site-specific third-party estimate approved by the department.

(5) The department may by rule authorize a financial test for financial assurance as an alternative to a bond.

(6) A facility owner or operator shall submit to the department evidence of financial assurance as required by the department. The evidence shall be submitted by the date on which financial assurance is first required under subsection (2) and every 3 years thereafter and within 30 days after the financial assurance is drawn upon for the purposes of subsection (12). Evidence of an insurance policy shall include both of the following:

(a) A certificate of insurance that uses wording approved by the department.

(b) A certified true and complete copy of the insurance policy.

(7) Not more than 60 days after receiving evidence of financial assurance, the department shall approve or reject the financial assurance in writing and notify the owner or operator of the decision. If the department rejects the financial assurance, the facility owner or operator shall submit new evidence of financial assurance within 30 days or shall suspend operations until the department approves financial assurance for the facility. Not more than 45 days after receiving new evidence of financial assurance for a facility whose immediately preceding evidence of financial assurance was rejected, the department shall approve or reject the financial assurance in writing and notify the owner or operator of the decision. Notice of a decision rejecting the financial assurance shall include a statement specifically describing why the financial assurance was rejected. If a facility's evidence of financial assurance is rejected more than once consecutively, the facility shall suspend operations until the department approves a financial assurance for the facility. The department shall include in a notice rejecting financial assurance under this subsection a statement specifically describing why the financial assurance was rejected.

(8) A facility owner or operator that posts cash as a bond shall accrue interest on the bond quarterly at the annual rate of 6%, except that the interest rate payable to the owner or operator shall not exceed the rate of interest accrued on the state common cash fund for the quarter in which an accrual is determined. Interest shall be paid to the owner or operator upon release of the bond by the department. Any interest greater than 6% shall be deposited in the state treasury to the credit of the general fund. An owner or operator that uses a certificate of deposit as a bond shall receive any accrued interest on that certificate of deposit upon release of the bond by the department.

(9) The terms of a surety bond, an irrevocable letter of credit, or an insurance policy shall require the issuing institution to notify both the department and the facility owner or operator at least 120 days before the expiration date or any cancellation of the bond. If the owner or operator does not extend the effective date of the bond, or establish alternate financial assurance within 60 days after receipt of an expiration or cancellation notice from the issuing institution, the department may draw on the bond.

(10) If an owner or operator of a disposal area fulfills the financial assurance requirements of this part by obtaining a bond, and the surety company, insurer, or financial or other institution that issued or holds the bond becomes the subject of a bankruptcy action commenced under title 11 of the United States Code, 11 USC 101 to 1532, or any successor statute, or has its authority to issue or hold the bond suspended or revoked, the owner or operator shall, within 60 days after receiving notice of that event, establish alternate financial assurance under this part.

(11) If a facility is sold or transferred, the owner or operator shall maintain the financial assurance until the new owner's or operator's financial assurance is approved under subsection (7). If the facility is being closed, the owner or operator may request in writing that the department authorize the termination of the financial assurance. The request shall include a certification that all polluting materials have been removed and that any releases have been reported as required. Within 60 days, the department shall, in writing, do either of the following:

(a) Except as provided in subdivision (b), approve the request, notify the owner or operator that the owner or operator is no longer required to maintain financial assurance, and return or release the financial assurance.

(b) If the department has reason to believe that all polluting materials have not been removed, that a release has not been reported, or that the facility is not in compliance with part 201, part 213, or this part, deny the request.

(12) The department may utilize a financial assurance required under this section for bringing the facility into compliance with part 201, part 213, or this part, including, but not limited to, removing polluting material from the facility, cleanup at the facility, and fire suppression or other emergency response at the facility, including reimbursement to any local unit of government that incurred emergency response costs. Not less than 7 days before utilizing the financial assurance, the department shall issue a notice of violation or order that alleges violation of part 201, part 213, or this part and shall provide the owner or operator an opportunity for a hearing.

Sec. 3115. (1) The department may request the attorney general to commence a civil action for appropriate relief, including a permanent or temporary injunction, for a violation of this part or a provision of a permit or order issued or rule promulgated under this part. An action under this subsection may be brought in the circuit court for the county of Ingham or for the county in which the defendant is located, resides, or is doing business. If requested by the defendant within 21 days after service of process, the court shall grant a change of venue to the circuit court for the county of Ingham or for the county in which the alleged violation occurred, is occurring, or, in the event of a threat of violation, will occur. The court has jurisdiction to restrain the violation and to require compliance. In addition to any other relief granted under this subsection, the court , except as otherwise provided in this subsection, shall impose a civil fine of not less than $2,500.00 and not more, per day of violation, than $25,000.00, and the court may award reasonable attorney fees and costs to the prevailing party. However, all of the following apply:

(a) The maximum fine imposed by the court shall be not more than $25,000.00 per day of violation.

(a) (b) For a failure to report a release to the department or to the primary public safety answering point under section 3111b(1), the court shall impose a civil fine of not more than $2,500.00.

(b) (c) For a failure to report a release to the local health department under section 3111b(2), the court shall impose a civil fine of not more than $500.00.

(c) For a violation of section 3106c, the court shall impose a civil fine of not less than $1,000.00 per day of violation and not more than $10,000.00 per day of violation.

(2) A person who at the time of the violation knew or should have known that he or she discharged a substance contrary to in violation of this part , or contrary to or a permit or order issued or rule promulgated under this part, or who intentionally makes a false statement, representation, or certification in an application for or form pertaining to a permit or in a notice or report required by the terms and conditions of an issued permit, or who intentionally renders inaccurate a monitoring device or record required to be maintained by the department, is guilty of a felony and shall be fined not less than $2,500.00 or more than $25,000.00 for each violation. The court may impose an additional fine of not more than $25,000.00 for each day during which the unlawful discharge occurred. If the conviction is for a violation committed after a first conviction of the person under this subsection, the court shall impose a fine of not less than $25,000.00 per day and not more than $50,000.00 per day of violation. Upon conviction, in addition to a fine, the court in its discretion may sentence the defendant to imprisonment for not more than 2 years or impose probation upon a person for a violation of this part. on the defendant. With the exception of the issuance of criminal complaints, issuance of warrants, and the holding of an arraignment, the circuit court for the county in which the violation occurred has exclusive jurisdiction. However, the person shall not be is not subject to the penalties of this subsection if the discharge of the effluent is in conformance with and obedient to compliance with a rule, order, or permit of the department. In addition to a fine, the attorney general may file a civil suit in a court of competent jurisdiction to recover the full value of the injuries done to the natural resources of the this state and the costs of surveillance and enforcement by the this state resulting from the violation.

(3) Upon a finding by the court that the actions of a civil defendant pose or posed a substantial endangerment to the public health, safety, or welfare, the court shall impose, in addition to the sanctions set forth in subsection (1), a fine of not less than $500,000.00 and not more than $5,000,000.00.

(4) Upon a finding by the court that the actions of a criminal defendant pose or posed a substantial endangerment to the public health, safety, or welfare, the court shall impose, in addition to the penalties set forth in subsection (2), a fine of not less than $1,000,000.00 and, in addition to a fine, a sentence of 5 years' imprisonment.

(5) To find a defendant civilly or criminally liable for substantial endangerment under subsection (3) or (4), the court shall determine that the defendant knowingly or recklessly acted in such a manner as to cause a danger of death or serious bodily injury and that either of the following occurred:

(a) The defendant had an actual awareness, belief, or understanding that his or her conduct would cause a substantial danger of death or serious bodily injury.

(b) The defendant acted in gross disregard of the standard of care that any reasonable person should observe in similar circumstances.

(6) Knowledge possessed by a person other than the defendant under subsection (5) may be attributable to the defendant if the defendant took affirmative steps to shield himself or herself from the relevant information.

(7) A Both of the following apply to a civil fine or other award ordered paid pursuant to this section: shall do both of the following:

(a) Be It is payable to the state of Michigan and shall be credited to the general fund.

(b) Constitute It constitutes a lien on any property, of any nature or kind, owned by the defendant.

(8) A lien under subsection (7)(b) shall take effect and have priority over all other liens and encumbrances except those filed or recorded prior to before the date of judgment only if notice of the lien is filed or recorded as required by state or federal law.

(9) A lien filed or recorded pursuant to subsection (8) shall be terminated according to the procedures required by state or federal law within 14 days after the fine or other award ordered to be paid is paid.

(10) In addition to any other method of collection, any fine or other award ordered paid may be recovered by right of setoff to any debt owed to the defendant by the this state, of Michigan, including the right to a refund of income taxes paid.