Bill Text: MI SB0823 | 2009-2010 | 95th Legislature | Engrossed
Bill Title: State agencies (existing); natural resources; powers and duties of the department of environmental quality under act regulating investment of state funds; transfer to the department of natural resources. Amends secs. 2b & 2d of 1855 PA 105 (MCL 21.142b & 21.142d). TIE BAR WITH: SB 0807'09
Spectrum: Partisan Bill (Republican 2-0)
Status: (Engrossed - Dead) 2009-12-02 - Referred To Committee On Government Operations [SB0823 Detail]
Download: Michigan-2009-SB0823-Engrossed.html
SB-0823, As Passed Senate, December 2, 2009
SENATE BILL No. 823
September 15, 2009, Introduced by Senators KAHN and McMANUS and referred to the Committee on Appropriations.
A bill to amend 1855 PA 105, entitled
"An act to regulate the disposition of the surplus funds in the
state treasury; to provide for the deposit of surplus funds in
certain financial institutions; to lend surplus funds pursuant to
loan agreements secured by certain commercial, agricultural, or
industrial real and personal property; to authorize the loan of
surplus funds to certain municipalities; to authorize the
participation in certain loan programs; to authorize an
appropriation; and to prescribe the duties of certain state
agencies,"
by amending sections 2b and 2d (MCL 21.142b and 21.142d), section
2b as amended by 1996 PA 31 and section 2d as added by 2000 PA 280.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2b. (1) The state treasurer may invest surplus funds
under the state treasurer's control with a financial institution,
investment company, insurance company, or other legal entity
entitled to receive an investment, which investment may be in the
form of a deposit, repurchase agreement, guaranteed investment
contract, banker's acceptances, or other security evidencing the
obligation of the entity receiving the investments to repay the
investment under the terms and conditions contained in an
investment agreement, including the rate of return, if any, to be
received on the investment.
(2) An investment made under this section is found and
declared to be for a valid public purpose.
(3) In addition to the terms and conditions that may be
prescribed by the investment agreement, the investment agreement
shall also provide for the following:
(a) The character, extent, and nature of security necessary
for the investment.
(b) That the investment shall be loaned to the Michigan
municipal bond authority for the purpose of the Michigan municipal
bond authority investing the proceeds of that loan in a manner
consistent
with and pursuant to the shared credit rating act, Act
No.
227 of the Public Acts of 1985, being sections 141.1051 to
141.1078
of the Michigan Compiled Laws 1985 PA 227, MCL 141.1051 to
141.1076, to produce a return available to the Michigan municipal
bond authority solely for the purpose of structuring, assisting, or
benefiting an eligible project or to pay principal and interest on
any proceeds of an obligation of the Michigan municipal bond
authority which are used to benefit an eligible project.
(c) The term of the investment.
(4) The amount of any investment made pursuant to this
subsection shall not exceed 10% of the average balance of the state
common cash fund during the 30 days preceding the date on which the
list of eligible projects is submitted to the joint capital outlay
subcommittee, calculated after other investments made pursuant to
this section have been deducted.
(5) Earnings from an investment made pursuant to this section
in excess of the average rate of interest earned during the same
period on other surplus funds, other than surplus funds invested
pursuant
to section 1 , 2, or
2a, shall be credited to the general
fund of the state. If interest from an investment made pursuant to
this section is below the average rate of interest earned during
the same period on other surplus funds, other than surplus funds
invested
pursuant to section 1 , 2, or
2a, the general fund shall
be reduced by the amount of the deficiency on an amortized basis
over the remaining term of the investment. A loss of principal from
an investment made pursuant to this section shall reduce the
earnings on the general fund by the amount of that loss on an
amortized basis over the remaining term of the investment.
(6) Not less than 30 days before an investment is made
pursuant to this section the director and the state treasurer shall
prepare and submit to the members of the joint capital outlay
subcommittee of the appropriations subcommittees of the legislature
a list of projects that the director and the state treasurer
determine are eligible projects and the local units in which the
eligible projects are located. Upon the approval of the joint
capital outlay subcommittee, the state treasurer may execute the
investment authorized by this section.
(7) A project shall not be approved by the director and the
state treasurer as an eligible project unless all of the following
conditions are met:
(a) The director determines that the project is located in a
county that has an approved solid waste management plan.
(b) The director determines that the project is consistent
with the approved solid waste management plan.
(c) The director determines that the project has all the
permits that are required by state law that are specifically
applicable to the nature of the proposed project.
(d) If the project is a waste to energy facility, the director
determines that the facility utilizes the best available control
technology and that the resultant ash is tested for toxicity and
appropriate disposal is assured.
(e) If the project is a waste to energy facility, the project
either includes the recycling of the recyclable portion of the
project's projected waste stream, or the project application
includes a recycling feasibility analysis or other available
information that indicates that recycling is not necessary or
feasible, or is only necessary or feasible to a limited extent and
that adding such a component to the project would not be
economically feasible. If any local unit within a county which has
an approved solid waste management plan operates a recycling
project
or receives funding pursuant to part 191 (clean Michigan
fund)
of the natural resources and
environmental protection act,
Act
No. 451 of the Public Acts of 1994, being sections 324.19101 to
324.19121
of the Michigan Compiled Laws 1994 PA 451, MCL 324.19101
to 324.19121, for a recycling project that included an analysis of
the feasibility of recycling in the county in which the project is
located, the requirements of this subdivision shall be met for all
local units within the planning area.
(f) The state treasurer determines that the project meets the
requirements of this section, that the project is economically
feasible, and that no similar project that is economically feasible
without the expenditure of state funds is proceeding in a timely
manner and has made application with the director for any permit or
license necessary for construction or operation in the county in
which the project is located.
(8) The director and the state treasurer shall work together
to assure that eligible projects are economically viable and will
assist in developing and encouraging methods for the disposal of
solid waste that are environmentally sound and maximize the use and
reuse of valuable resources.
(9) As used in this section:
(a) "Authority" means the Michigan municipal bond authority
created
in Act No. 227 of the Public Acts of 1985 the shared credit
rating act, 1985 PA 227, MCL 141.1051 to 141.1076.
(b) "Best available control technology" means best available
control
technology as defined in section 169 of subpart I of part C
of
title I of the clean air act, chapter 360, 91 stat. 740, 42
U.S.C.
USC 7479.
(c) "Director" means the director of the department of
environmental
quality natural resources or his or her authorized
representative.
(d) "Eligible project" means 1 or more of the following
projects of a local unit that have been approved by the director
and the state treasurer, including costs associated with a project
necessary for issuance of evidences of indebtedness to finance the
project:
(i) The construction, improvement, acquisition, or enlargement
of a waste to energy facility.
(ii) The construction, improvement, acquisition, or enlargement
of a solid waste transfer facility.
(iii) The construction, improvement, or enlargement of a
recycling project or the acquisition of recycling equipment.
(iv) The construction, improvement, or enlargement of a
composting project or the acquisition of composting equipment.
(e) "Local units" means a city, village, township, county, or
an authority created by or pursuant to state law, or any
combination thereof if authorized by state law to act jointly.
(f) "Composting project", "recycling project", "solid waste",
"solid waste transfer facility", and "waste to energy" have the
meaning
ascribed to them in part 191 of Act No. 451 of the Public
Acts
of 1994 the natural resources
and environmental protection
act, 1994 PA 451, MCL 324.19101 to 324.19121.
(10) Notwithstanding any other provision of this act, the
state treasurer shall not invest additional surplus funds in the
manner and for the purposes provided in this section after the
electors approve the issuance of general obligation bonds in
accordance with section 15 of article IX of the state constitution
of 1963 and not less than $250,000,000.00 of the proceeds of those
bonds is to be used to promote solid waste management in the state
by funding eligible projects or similar solid waste management
projects, promoting solid waste reduction, upgrading or closing
existing landfills, or providing educational and technical
assistance regarding solid waste management.
Sec. 2d. (1) The state treasurer may invest surplus funds
under the state treasurer's control in certificates of deposit or
other instruments of a financial institution qualified under this
act to receive deposits or investments of surplus funds for the
purpose of facilitating marina dredging loans. The state treasurer
shall endeavor to make investments under this subsection in
financial institutions such that marina dredging loans will be
conveniently available in all geographic regions in this state. The
state treasurer may enter into an investment agreement with a
financial institution to provide for the investment under this
subsection. The investment agreement shall contain all of the
following:
(a) The term of the investment which shall be not more than 10
years.
(b) A requirement that the interest accruing on the investment
shall not be more than the interest earned by the financial
institution on marina dredging loans made after the date of the
investment.
(c) A requirement that the financial institution shall provide
good and ample security as the state treasurer requires and shall
identify the marina dredging loans and the terms and conditions of
those loans that are made after the date of the investment that are
attributable to that investment together with other information
required by this act.
(d) A requirement that a marina dredging loan made by the
financial institution that is attributable to the investment shall
be issued at a rate or rates of interest that are established in
the investment agreement.
(e) A requirement that a marina dredging loan made by the
financial institution that is attributable to the investment shall
be
made not later than 3 years after the effective date of this
section
July 10, 2003.
(f) A requirement that a marina dredging loan made by the
financial institution that is attributable to the investment shall
be issued for a loan repayment period of not more than 7 years.
(g) A requirement that a marina dredging loan made by the
financial institution that is attributable to the investment shall
not exceed $75,000.00.
(h) A requirement that a marina dredging loan made by the
financial institution that is attributable to the investment shall
not be released by the financial institution unless the loan
applicant has certified that it is an eligible marina.
(i) A requirement that to the extent the financial institution
has not made marina dredging loans in an amount at least equal to
the amount of the investment within 90 days after the investment,
the rate of interest payable on that portion of the outstanding
investment shall be increased to a rate of interest provided in the
investment agreement, with the increase in the rate of interest
applied retroactively to the date on which the state treasurer made
the investment.
(j) Incentives for the early repayment of the investment and
for the acceleration of payments in the event of a state cash
shortfall as prescribed by the investment agreement, if required by
the state treasurer.
(k) Other terms as prescribed by the state treasurer.
(2) An investment made under this section is found and
declared to be for a valid public purpose.
(3) The attorney general shall approve documentation for an
investment under this section as to legal form.
(4) The aggregate amount of investments made under this
section shall not exceed $20,000,000.00.
(5)
Upon the determination by the directors of the departments
director
of the department of natural resources and
environmental
quality
that the need to facilitate marina
dredging loans has
significantly diminished based on changes in Great Lakes water
levels, the state treasurer may take actions necessary to ensure
that no new marina dredging loans that are attributable to an
investment under this section are made. Such a determination shall
not affect existing marina dredging loans that are attributable to
an investment under this section.
(6) Earnings from an investment made under this section that
are in excess of the average rate of interest earned during the
same period on other surplus funds, other than surplus funds
invested under section 1, shall be credited to the general fund of
the state. If interest from an investment made under this section
is below the average rate of interest earned during the same period
on other surplus funds, other than surplus funds invested under
section 1, the general fund shall be reduced by the amount of the
deficiency on an amortized basis over the remaining term of the
investment. A loss of principal from an investment made under this
section shall reduce the earnings of the general fund by the amount
of that loss on an amortized basis over the remaining term of the
investment.
(7) The state treasurer may take any necessary action to
ensure the successful operation of this section, including making
investments with financial institutions to cover the administrative
and risk-related costs associated with a marina dredging loan.
(8) Annually, each financial institution in which the state
treasurer has made an investment under this section shall file an
affidavit, signed by a senior executive officer of the financial
institution, stating that the financial institution is in
compliance with the terms of the investment agreement.
(9) The state treasurer shall annually prepare and submit a
report to the legislature regarding the disposition of money
invested for purposes of facilitating marina dredging loans under
this section. The report shall include all of the following
information:
(a) The total number of eligible marina owners who have
received a marina dredging loan.
(b) By county, the total number and amounts of the marina
dredging loans that were issued.
(c) The name of each financial institution participating in
the marina dredging loan program and the amount invested in each
financial institution for purposes of the loan program.
(10) As used in this section:
(a) "Bottomland" means the land area of a water body that lies
below the ordinary high-water mark and that may or may not be
covered by water.
(b) "Dredging" means the removal of sediments from bottomland.
(c) "Dredging costs" means the costs associated with dredging
that were incurred after January 1, 2000, including costs of
removal, disposal, and testing of sediments, and the costs
associated with obtaining necessary permits required to conduct
dredging.
(d) "Eligible marina" means a privately owned, commercial
facility in this state that meets all of the following
requirements:
(i) Extends into or over the Great Lakes and their connecting
waters navigable by motorized watercraft from a Great Lake.
(ii) Provides docking, mooring or launching services available
to the general public for recreational boating. Marinas that limit
their services based on membership or residency requirements are
not eligible.
(iii) Provides mooring facilities for no more than 200
recreational watercraft through the use of docks, slips, or
broadside mooring.
(iv) Has received the permits required by law from the
department
of environmental quality natural
resources and the army
corps of engineers for the dredging to be conducted with loan
funds.
(e) "Marina dredging loan" means a loan or the refinancing of
all or a portion of a loan made to the owner of an eligible marina
for dredging costs necessitated by low water levels to accommodate
the use of the marina by recreational watercraft.
(f) "Ordinary high-water mark" means either of the following:
(i) For an inland lake or stream, that term as it is defined in
section 30101 of the natural resources and environmental protection
act, 1994 PA 451, MCL 324.30101.
(ii) For the Great Lakes, the ordinary high-water mark as
described in section 32502 of the natural resources and
environmental protection act, 1994 PA 451, MCL 324.32502.
(g) "Surplus funds" means, at any given date, the excess of
cash and other recognized assets that are expected to be resolved
into cash or its equivalent in the natural course of events and
with a reasonable certainty, over the liabilities and necessary
reserves at the same date.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No. 807
of the 95th Legislature is enacted into law.
