Bill Text: MI SB0731 | 2015-2016 | 98th Legislature | Introduced

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Bill Title: Water; quality; use of safe drinking water revolving fund; clarify operation and maintenance of private service lines. Amends sec. 5409 of 1994 PA 451 (MCL 324.5409).

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Introduced - Dead) 2016-02-02 - Referred To Committee On Government Operations [SB0731 Detail]

Download: Michigan-2015-SB0731-Introduced.html

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SENATE BILL No. 731

 

 

February 2, 2016, Introduced by Senators ANANICH, YOUNG, BIEDA, GREGORY and KNEZEK and referred to the Committee on Government Operations.

 

 

 

     A bill to amend 1994 PA 451, entitled

 

"Natural resources and environmental protection act,"

 

by amending section 5409 (MCL 324.5409), as added by 1997 PA 26.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 5409. (1) A water supplier whose project plan is approved

 

or under review by the department under section 5407 may apply for

 

assistance from the fund by submitting an application to the

 

department. A complete application shall include all of the

 

following, if applicable, as determined by the department:

 

     (a) If assistance is in the form of a loan, financial

 

documentation that a dedicated source of revenue is established,

 

consistent with obligations of debt instruments existing at the

 

time assistance is requested, and pledged to both of the following

 

purposes:

 

     (i) The timely repayment of principal and interest.

 

     (ii) Adequate revenues to fund the operation and maintenance

 

of the project.

 

     (b) Evidence of an approved project plan.

 

     (c) A certified resolution from a water supplier that is a

 

municipality, or a letter of appointment from a water supplier that

 

is not a municipality, designating an authorized representative for

 

the project.

 

     (d) A certification by an authorized representative of the

 

water supplier affirming that the supplier has the legal,

 

institutional, technical, financial, and managerial capability to

 

build, operate, and maintain the project. However, the water

 

supplier does not need to certify that it will operate and maintain

 

any portion of the project that funds the replacement of private

 

service lines.

 

     (e) A letter of credit, insurance, or other credit enhancement

 

to support the credit position of the water supplier, as required

 

by the department.

 

     (f) A set of plans and specifications, developed in accordance

 

with Act 399, which is suitable for bidding.

 

     (g) A certification from an authorized representative of the

 

water supplier that it has, or will have before the start of

 

construction, all applicable state and federal permits required for

 

construction of the project.

 

     (h) A certification from an authorized representative of the

 

water supplier that an undisclosed fact or event, or pending

 

litigation, will not materially or adversely affect the project,

 

the prospects for its completion, or the water supplier's ability

 

to make timely loan repayments, if applicable.

 

     (i) If applicable, all executed service contracts or

 

agreements.

 

     (j) An agreement that the water supplier will operate the

 

waterworks system in compliance with applicable state and federal

 

laws.

 

     (k) An agreement that the water supplier will not sell, lease,

 

abandon, or otherwise dispose of the waterworks system without an

 

effective assignment of obligations and the prior written approval

 

of the department and the authority.

 

     (l) An agreement that includes either of the following:

 

     (i) For water suppliers that are municipalities, all accounts

 

will be maintained in accordance with generally accepted accounting

 

practices, generally accepted government auditing standards, and

 

chapter 75 of title 31 of the United States Code, 31 U.S.C. USC

 

7501 to 7507, as required by the federal safe drinking water act.

 

     (ii) For water suppliers that are not municipalities, all

 

accounts will be maintained in accordance with generally accepted

 

accounting practices and generally accepted auditing standards.

 

     (m) An agreement that all water supplier contracts with

 

contractors will require them to maintain project accounts in

 

accordance with the requirements of this subsection and provide

 

notice that any subcontractor may be subject to a financial audit

 

as part of an overall project audit.

 

     (n) An agreement that the water supplier will provide written

 

authorizations to the department for the purpose of examining the

 

physical plant and for examining, reviewing, or auditing the

 

operational or financial records of the project, and that the water

 

supplier will require similar authorizations from all contractors,

 

consultants, or agents with which it negotiates an agreement.

 

     (o) An agreement that all pertinent records shall be retained

 

and available to the department for a minimum of 3 years after

 

initiation of the operation and that if litigation, a claim, an

 

appeal, or an audit is begun before the end of the 3-year period,

 

records shall be retained and available until the 3 years have

 

passed or until the action is completed and resolved, whichever is

 

longer. As used in this subdivision, "initiation of the operation"

 

means the date certain set by the water supplier and accepted by

 

the department, on which use of the project begins for the purposes

 

for which it was constructed.

 

     (p) If the project is segmented, as provided in section

 

5406(3), a schedule for completion of the project and adequate

 

assurance that the project will be completed with or without

 

assistance from the fund or that the segmented project will be

 

operational without completion of the entire project.

 

     (q) An agreement that the project will proceed in a timely

 

fashion if the application for assistance is approved.

 

     (r) An application fee, if required by the department.

 

     (s) (2) A demonstration that a dedicated source of revenue

 

will be available for operating and maintaining to support the

 

waterworks system and repaying the incurred debt.

 

     (2) (3) The department shall accept applications for

 

assistance from water suppliers in the fundable range of the

 

priority list and shall determine whether an application for

 

assistance is complete.

 

     (3) (4) The state is not liable to a water supplier, or any

 

other person performing services for the water supplier, for costs

 

incurred in developing or submitting an application for assistance

 

under this part.

 

     Enacting section 1. This amendatory act does not take effect

 

unless Senate Bill No. 730                                        

 

          of the 98th Legislature is enacted into law.