HB-6074, As Passed House, July 14, 2004

SUBSTITUTE FOR

HOUSE BILL NO. 6074

                                                                             A bill to amend 1994 PA 451, entitled                                             

"Natural resources and environmental protection act,"                       

by amending sections 20113, 21506, 21508, 21546, 21548, and 21550           

(MCL 324.20113, 324.21506, 324.21508, 324.21546, 324.21548, and             

324.21550), section 20113 as amended by 1996 PA 383, sections               

21506 and 21508 as amended by 1995 PA 269, sections 21546 and               

21548 as amended by 1996 PA 181, and section 21550 as amended by            

1995 PA 252, and by adding section 21552; and to repeal acts and            

parts of acts.                                                              

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1       Sec. 20113.  (1) Money required to implement the programs                   

2   described under this part and to pay for response activities                

3   recommended under this part shall be appropriated from the fund             

4   and any other source the legislature considers necessary to                 

5   implement the requirements of this part.                                    

1       (2) Money from the fund that is appropriated for response                   

2   activities shall be appropriated only for response activities at            

3   sites that have been subjected to the risk assessment process               

4   described in section 20105.                                                 

5       (3) The department shall annually submit to the governor a                  

6   request for appropriation from the fund.  The request will                  

7   include a lump sum amount for the purposes of subsection (4)(a),

8   and  a lump sum amount for the purposes of subsection (4)(f),              

9   and a lump sum amount for the purposes of subsection (4)(g).  For           

10  the purposes set forth in subsection (4)(b), (c), (d), and (e),             

11  the request shall include a list of sites where the department is           

12  proposing to expend funds.  The list shall include the following            

13  information for each site:  the common name of the site, the                

14  response activities that are planned to be conducted, and the               

15  estimated amount of money that is needed to conduct the response            

16  activities.  The legislature shall approve by law the list of               

17  sites to be addressed and shall provide a lump sum appropriation            

18  for these sites based on the total estimated amount needed for              

19  the approved sites.                                                         

20      (4) Money from the fund may be used, upon appropriation, for                

21  the following:  as determined by the department:

22      (a) National priority list municipal landfill cost-share                    

23  grants to be approved by the board pursuant to section 20109a.              

24      (b) Superfund match, which includes funding for any response                

25  activity that is required to match federal dollars at a superfund           

26  site as required under the comprehensive environmental response,            

27  compensation, and liability act of 1980, Public Law 96-510, 94              

1   Stat. 2767.                                                                 

2       (c) Response activities to address actual or potential public               

3   health or environmental problems.                                           

4       (d) Completion of response activities initiated by the state                

5   using environmental protection bond funds or completion of                  

6   response activities at facilities initiated by a person who was             

7   liable under this part prior to  Public Act 71 of 1995 June 5,             

8   1995, but is not liable under section 20126 of this part, where             

9   such response activities have ceased.                                       

10      (e) Response activities at sites that will facilitate                       

11  redevelopment.                                                              

12      (f) Emergency response actions for sites to be determined by                

13  the department.                                                             

14  (g) Administrative costs of the department and the department               

15  of treasury under this act.

16      (5) Money in the fund shall be expended first for the                       

17  purposes described in subsection (4)(b),  and  (f), and (g) and             

18  health or environmental problems under subsection (4)(c) that are           

19  related to acute health or environmental problems.  Following               

20  these expenditures, not less than 50% of the remaining money                

21  expended under this section shall be expended for response                  

22  activities that facilitate redevelopment of urbanized areas.  All           

23  additional expenditures under this section shall be expended                

24  following the expenditures described in this subsection.  As used           

25  in this subsection, "urbanized area" means an urbanized area as             

26  determined by the economics and statistics administration, United           

27  States bureau of census, according to the 1990 census.                      

1       (6) The total amount of funds expended by the department for                

2   national priority list municipal landfill cost-share grants shall           

3   not exceed the lesser of 12% of the funds appropriated from the             

4   fund in a fiscal year or $6,000,000.00 in a fiscal year.                    

5       (7) Not later than December 31 of each year, the department                 

6   shall provide to the governor, the senate and house of                      

7   representatives standing committees with jurisdiction over issues           

8   pertaining to natural resources and the environment, and the                

9   senate and house of representatives appropriations committees a             

10  list of all projects financed under this part through the                   

11  preceding fiscal year.  The list shall include the project site             

12  and location, the nature of the project, the total amount of                

13  money authorized, the total amount of money expended, and project           

14  status.                                                                     

15      Sec. 21506.  (1) The Michigan underground storage tank                      

16  financial assurance fund is created.                                        

17      (2) The state treasurer shall direct the investment of the                  

18  fund.  Interest and earnings from fund investments shall be                 

19  credited to the fund.                                                       

20      (3) Money in the fund at the close of the fiscal year shall                 

21  remain in the fund and shall not lapse to the general fund.                 

22      (4) Except as provided in subsection (5), money in the fund                 

23  shall be expended only as follows and in the following order of             

24  priority:                                                                   

25      (a) To pay off in the most cost-effective way bonds or notes                

26  pursuant to this part plus any amount necessary to maintain a               

27  fully funded debt reserve or other reserve intended to secure the           

1   principal and interest on the bonds or notes as may be required             

2   by resolution indenture or other agreement of the authority.                

3       (b) For the reasonable administrative cost of implementing                  

4   this part by the department, the department of treasury, the                

5   department of attorney general, and the authority as annually               

6   appropriated by the legislature.  Administrative costs include              

7   the actual and necessary expenses incurred by the board and its             

8   members in carrying out the duties imposed by this part.  Total             

9   administrative costs expended under this subdivision shall not              

10  exceed 7% of the fund's projected revenues in any year.  Costs              

11  incurred by the authority for the issuance of bonds or notes                

12  which may also be payable from the proceeds of the bonds or notes           

13  shall not be considered administrative costs in making such a               

14  determination.                                                              

15      (c) For payment of rewards under section 21549.                             

16      (d) For the interest subsidy program established in section                 

17  21522.  The money expended under this subdivision shall not                 

18  exceed 10% of the fund's projected revenues in any year.                    

19  However, 10% of the revenue of the fund during the first year of            

20  the fund's operation shall be expended on the interest subsidy              

21  program.  If this money is not expended during the first year,              

22  this money shall be carried over for expenditure in the                     

23  succeeding years of the fund's operation.  Additional fund                  

24  revenue shall not be set aside for the interest subsidy program             

25  until all of the first year revenue is expended.                            

26      (e) For corrective action and indemnification including all                 

27  of the following:                                                           

House Bill No. 6074 (H-4) as amended July 14, 2004

1                                                                                (i) Payments for work invoices submitted prior to 5 p.m. on                         

2   June 29, 1995 and approved by the department pursuant to this               

3   part.                                                                       

4       (ii) Payments for requests for indemnification submitted                     

5   prior to 5 p.m. on June 29, 1995 and approved by the department             

6   pursuant to this part.                                                      

7       (iii) Payments for work invoices or requests for                             

8   indemnification that were submitted prior to 5 p.m. on June 29,             

9   1995 and denied by the department pursuant to this part but which           

10  denials were subsequently reversed on appeal.                               

11  (f) For the gasoline inspection and testing program and the                 

12  vapor-recovery program established under the motor fuels quality            

13  act, 1984 PA 44, MCL 290.641 to 290.650d.

14  [(5)  Upon payment in full of all obligations listed in                     

15  subsection (4), the Any state treasurer shall  file with the               

16  secretary of state a notice of final payment of all obligations             

17  lawfully payable from the fund unencumbered funds in the fund at the

18  end of the fiscal year ending September 30, 2004 shall lapse to the

19  cleanup and redevelopment fund.  Any revenue collected after October 1, 2004 shall be deposited into the Michigan underground storage tank financial assurance fund.  Funds can be appropriated after the advisory council established in section 21552 makes its report.]

20      (6) The board shall make recommendations to the                             

21  appropriations committees in the senate and house of                        

22  representatives on the distribution and amount of administrative            

23  costs under subsection (4)(b).  The board shall provide a copy of           

24  these recommendations to each affected department.                          

25      Sec. 21508.  (1) An environmental protection regulatory fee                 

26  is imposed on all refined petroleum products sold for resale in             

27  this state or consumption in this state.   The regulatory fee               

1   shall be used pursuant to section 21506(4) for the cleanup and              

2   prevention of environmental contamination resulting from releases           

3   of refined petroleum products from underground storage tank                 

4   systems and to pay off bonds or notes pursuant to this part.  The           

5   regulatory fee shall be charged for capacity utilization of                 

6   underground storage tanks measured on a per gallon basis.  The              

7   regulatory fee shall be charged against all refined petroleum               

8   products sold for resale in this state or consumption in this               

9   state so as to not exclude any products that may be stored in an            

10  underground tank at any point after the petroleum is refined.               

11  The regulatory fee shall be 7/8 cent per gallon for each gallon             

12  of refined petroleum sold for resale in this state or consumption           

13  in this state, with the per gallon charge being a direct measure            

14  of capacity utilization of an underground storage tank system.              

15      (2) The department of treasury shall precollect regulatory                  

16  fees from persons who refine petroleum in this state for resale             

17  in this state or consumption in this state and persons who import           

18  refined petroleum into this state for resale in this state or               

19  consumption in this state.  The department of treasury shall                

20  collect regulatory fees that can be collected at the same time as           

21  the sales tax under section 6a of the general sales tax act,  Act           

22  No. 167 of the Public Acts of 1933, being section 205.56a of the            

23  Michigan Compiled Laws 1933 PA 167, MCL 205.56a, at that time.             

24  The remainder of the regulatory fees shall be collected in the              

25  manner determined by the state treasurer.   Notwithstanding any             

26  other provision of this part, the department of treasury shall              

27  stop collecting regulatory fees under this part when it has                 

1   received sufficient revenues to pay in full all obligations                 

2   listed in section 21506(4).

3       (3) A public utility with more than 500,000 customers in this               

4   state is exempt from any fee or assessment imposed under this               

5   part if that fee or assessment is imposed on petroleum used by              

6   that public utility for the generation of steam or electricity.             

7       (4) All regulatory fees collected pursuant to this part shall               

8   be deposited into the  emergency response fund created in section           

9   21507 until the emergency response fund reaches $3,000,000.00.              

10  When the emergency response fund is at $3,000,000.00, all                   

11  regulatory fees shall be deposited into the  fund.                          

12      (5) Consistent with the March 31, 1995 determination by the                 

13  state treasurer that revenue will not be sufficient to pay                  

14  expected expenditures, and consistent with the April 3, 1995                

15  notice of the fund administrator pursuant to subsection (6),                

16  funding is no longer available under this part for new claims,              

17  work invoices, and requests for indemnification received after              

18  5 p.m. on June 29, 1995.  Claims, work invoices, and requests for           

19  indemnification received after 5 p.m. on June 29, 1995 are not              

20  eligible for funding under this part.  Work invoices and requests           

21  for indemnification received prior to 5 p.m. on June 29, 1995 may           

22  be paid to the extent money is available in the fund as provided            

23  in this part.                                                               

24      (6) If the state treasurer determines that fund revenues will               

25  not be sufficient to pay expected expenditures from the fund, the           

26  state treasurer shall notify the administrator, and 90 days after           

27  this notification has been given the administrator shall not                

1   accept any new work invoices or requests for indemnification.               

2   Upon receiving this notification from the state treasurer, the              

3   administrator shall notify by certified mail the owners and                 

4   operators of petroleum underground storage tank systems                     

5   registered under part 211 that funding under this part will no              

6   longer be available for new claims after the 90-day period has              

7   expired.  However, work invoices and requests for indemnification           

8   that were submitted to the administrator prior to or during this            

9   90-day period may be paid to the extent money is available in the           

10  fund as provided in this part.                                              

11      (7) The department of treasury may audit, enforce, collect,                 

12  and assess the fee imposed by this part in the same manner and              

13  subject to the same requirements as revenues collected pursuant             

14  to  Act No. 122 of the Public Acts of 1941, being sections 205.1            

15  to 205.31 of the Michigan Compiled Laws 1941 PA 122, MCL 205.1             

16  to 205.31.                                                                  

17      Sec. 21546.  (1) This part does not create any liability on                 

18  behalf of the state.  This part shall not be construed as making            

19  the state the guarantor of the fund.                                        

20      (2) This part does not relieve any person who may be eligible               

21  to receive money from the fund or the former emergency response             

22  fund from any liability that he or she may incur as the owner or            

23  operator of an underground storage tank system.  The state is not           

24  assuming the liability of an owner or operator eligible for                 

25  funding under this part; it is only providing assistance to such            

26  owners or operators in meeting the financial responsibility                 

27  requirements.                                                               

1       (3) If all bonds or notes of the authority payable from the                 

2   fund have been fully paid or provided for and if any provision of           

3   this part is found to be unconstitutional by a court of competent           

4   jurisdiction and the allowable time for filing an appeal has                

5   expired or the appellant has exhausted all of his or her avenues            

6   of appeal, this whole part shall be considered unconstitutional             

7   and invalid.                                                                

8       Sec. 21548.  (1)  Beginning August 8, 1993, a A person who                 

9   makes or submits or causes to be made or submitted either                   

10  directly or indirectly any statement, report, affidavit,                    

11  application, claim, bid, work invoice, or other request for                 

12  payment or indemnification under this part knowing that the                 

13  statement, report, application, claim, bid, work invoice, or                

14  other request for payment or indemnification is false or                    

15  misleading is guilty of a felony punishable by imprisonment for             

16  not more than 5 years or a fine of not more than $50,000.00, or             

17  both.  In addition to any penalty imposed under this subsection,            

18  a person convicted under this subsection shall pay restitution to           

19  the fund for the amount received in violation of this                       

20  subsection.                                                                 

21      (2) A person who makes or submits or causes to be made or                   

22  submitted either directly or indirectly any statement, report,              

23  application, claim, bid, work invoice, or other request for                 

24  payment or indemnification under this part knowing that the                 

25  statement, report, affidavit, application, claim, bid, work                 

26  invoice, or other request for payment or indemnification is                 

27  false, misleading, or fraudulent, or who commits a fraudulent               

1   practice, is subject to a civil fine of not more than $50,000.00            

2   or twice the amount submitted, whichever is greater.  In addition           

3   to any civil fine imposed under this subsection, a person found             

4   responsible under this subsection shall pay restitution to the              

5   fund for the amount received in violation of this subsection.               

6   The legislature intends that this subsection be given retroactive           

7   application.                                                                

8       (3) As used in subsection (2), "fraudulent" or "fraudulent                  

9   practice" includes, but is not limited to, the following:                   

10      (a) Submitting a work invoice for the excavation, hauling,                  

11  disposal, or provision of soil, sand, or backfill for an amount             

12  greater than the legal capacity of the carrying vehicle or                  

13  greater than was actually carried, excavated, disposed, or                  

14  provided.                                                                   

15      (b) Submitting paperwork for services done or work provided                 

16  that was not in fact provided or that was not directly provided             

17  by the individual indicated on the paperwork.                               

18      (c) Contaminating an otherwise clean resource or site with                  

19  contaminated soil or product from a contaminated resource or                

20  site.                                                                       

21      (d) Returning any load of contaminated soil to its original                 

22  site for reasons other than remediation of the soil.                        

23      (e) Causing damage intentionally or as the result of gross                  

24  negligence to an underground storage tank system, which damage              

25  results in a release at a site.                                             

26      (f) Placing an underground storage tank system at a                         

27  contaminated site where no underground storage tank system                  

1   previously existed for purposes of disguising the source of                 

2   contamination or to obtain funding under this part.                         

3       (g) Submitting a work invoice for the excavation of soil from               

4   a site that was removed for reasons other than removal of the               

5   underground storage tank system or remediation.                             

6       (h) Any intentional act or act of gross negligence that                     

7   causes or allows contamination to spread at a site.                         

8       (i) Registration of a nonexistent underground storage tank                  

9   system with the department.                                                 

10      (j) Loaning to an owner or operator the co-pay amount                       

11  required under section 21514 and then submitting or causing to be           

12  submitted inflated claims or invoices designed to recoup the                

13  co-pay amount.                                                              

14      (k) Confirming a release without simultaneously providing                   

15  notice to the owner or operator.                                            

16                                                                               (l) Inflating bills or work invoices, or both, by adding                            

17  charges for work that was not performed.                                    

18      (m) Submitting a false or misleading laboratory report.                     

19      (n) Submitting bills or work invoices, or both, for sampling,               

20  testing, monitoring, or excavation that are not justified by the            

21  site condition.                                                             

22      (o) Falsely characterizing the contents of an underground                   

23  storage tank system for purposes of obtaining funding under this            

24  part.                                                                       

25      (p) Submitting or causing to be submitted bills or work                     

26  invoices by or from a person who did not directly provide the               

27  service.                                                                    

1       (q) Characterizing legal services as consulting services for                

2   purposes of obtaining funding under this part.                              

3       (r) Misrepresenting or concealing the identity, credentials,                

4   affiliation, or qualifications of principals or persons seeking,            

5   either directly or indirectly, funding or approval for                      

6   participation under this part.                                              

7       (s) Falsifying a signature on a claim application or a work                 

8   invoice.                                                                    

9       (t) Failing to accurately disclose the actual amount and                    

10  carrier of unencumbered insurance coverage available for new                

11  environmental impairment or professional liability claims.                  

12      (u) Any other act or omission of a false, fraudulent, or                    

13  misleading nature undertaken in order to obtain funding under               

14  this part.                                                                  

15      (4) The attorney general or county prosecutor may conduct an                

16  investigation of an alleged violation of this section and bring             

17  an action for a violation of this section.                                  

18      (5) If the attorney general or county prosecutor has                        

19  reasonable cause to believe that a person has information or is             

20  in possession, custody, or control of any document or records,              

21  however stored or embodied, or tangible object which is relevant            

22  to an investigation of a violation or attempted violation of this           

23  part or a crime or attempted crime against the fund, the attorney           

24  general or county prosecutor may, before bringing any action,               

25  make an ex parte request to a magistrate for issuance of a                  

26  subpoena requiring that person to appear and be examined under              

27  oath or to produce the document, records, or object for                     

1   inspection and copying, or both.  Service may be accomplished by            

2   any means described in the Michigan court rules.  Requests made             

3   by the attorney general may be brought in Ingham county.                    

4       (6) If a person objects to or otherwise fails to comply with                

5   a subpoena served under subsection (5), an action may be brought            

6   in district court to enforce the demand.  Actions filed by the              

7   attorney general may be brought in Ingham county.                           

8       (7) The attorney general or county prosecutor may apply to                  

9   the district court for an order granting immunity to any person             

10  who refuses to provide or objects to providing information,                 

11  documents, records, or objects sought pursuant to this section.             

12  If the judge is satisfied that it is in the interest of justice             

13  that immunity be granted, he or she shall enter an order granting           

14  immunity to the person and requiring  them the person to appear            

15  and be examined under oath or to produce the document, records,             

16  or object for inspection and copying, or both.                              

17      (8) A person who fails to comply with a subpoena issued                     

18  pursuant to subsection (5) or a requirement to appear and be                

19  examined pursuant to subsection (7) is subject to a civil fine of           

20  not more than $25,000.00 for each day of continued                          

21  noncompliance.                                                              

22      (9) In addition to any civil fines or criminal penalties                    

23  imposed under this part or the criminal laws of this state, the             

24  person found responsible shall repay any money obtained directly            

25  or indirectly under this part.  Money owed pursuant to this                 

26  section constitutes a claim and lien by the fund upon any real or           

27  personal property owned either directly or indirectly by the                

1   person.  This lien shall attach regardless of whether the person            

2   is insolvent and may not be extinguished or avoided by                      

3   bankruptcy.  The lien imposed by this section has the force and             

4   effect of a first in time and right judgment lien.                          

5       (10) Subsection (1) does not preclude prosecutions under                    

6   other laws of the state including, but not limited to, section              

7   157a, 218, 248, 249, 280, or 422 of the Michigan penal code,  Act           

8   No. 328 of the Public Acts of 1931, being sections 750.157a,                

9   750.218, 750.248, 750.249, 750.280, and 750.422 of the Michigan             

10  Compiled Laws 1931 PA 328, MCL 750.157a, 750.218, 750.248,                 

11  750.249, 750.280, and 750.422.                                              

12      (11) All civil fines collected pursuant to this section shall               

13  be apportioned in the following manner:                                     

14      (a) Fifty percent shall be deposited in the general fund and                

15  shall be used by the department to fund fraud investigations                

16  under this part.                                                            

17      (b) Twenty-five percent shall be paid to the office of the                  

18  county prosecutor or attorney general, whichever office brought             

19  the action.                                                                 

20      (c) Twenty-five percent shall be paid to a local police                     

21  department or sheriff's office, or a city or county health                  

22  department, if investigation by that office or department led to            

23  the bringing of the action.  If more than 1 office or department            

24  is eligible for payment under this subsection, division of                  

25  payment shall be on an equal basis.  If there is not a local                

26  office or department that is entitled to payment under this                 

27  subdivision, the money shall be forwarded to the state treasurer            

House Bill No. 6074 (H-4) as amended July 14, 2004

1   for deposit into the  emergency response fund created in section            

2   21507 fund.                                                                

3       Sec. 21550.  (1) Section  21507 21508 is repealed effective                

4   December 22, 1998 [September 30, 2006].                                   

5   (2) Upon the repeal of section 21507, any unexpended money                  

6   in the emergency response fund reverts to the fund.                         

7       (3) This part is repealed on the date on which the state                    

8   treasurer files with the secretary of state a notice of final               

9   payment of all obligations lawfully payable from the fund                   

10  pursuant to section 21506(5).

11  (2)  (4)  Upon repeal of  this part section 21508, any money               

12  in the fund or in the possession of the authority reverts to the            

13  environmental response fund created in part 201.                            

14  (3)  (5)  The authority's obligation to pay off any bonds or                

15  notes issued pursuant to this part shall survive the repeal of              

16  this part section 21508.                                                  

17  Sec. 21552.  (1) The underground storage tank advisory                      

18  council is created.                                                         

19      (2) The council shall consist of all of the following                       

20  individuals:                                                                

21      (a) Three individuals appointed by the governor, 1 of whom                  

22  shall be a representative of the petroleum industry.                        

23      (b) Three individuals appointed by the senate majority                      

24  leader, 1 of whom shall be a representative of the petroleum                

25  industry.                                                                   

26      (c) Three individuals appointed by the speaker of the house                 

27  of representatives, 1 of whom shall be a representative of the              

1   petroleum industry.                                                         

2       (3) The members first appointed to the council shall be                     

3   appointed by November 1, 2004.                                              

4       (4) Members of the council shall serve until a successor is                 

5   appointed.                                                                  

6       (5) If a vacancy occurs on the council, the unexpired term                  

7   shall be filled in the same manner as the original appointment              

8   was made.                                                                   

9       (6) The first meeting of the council shall be called by the                 

10  director.  At the first meeting, the council shall elect from               

11  among its members a chairperson and other officers as it                    

12  considers necessary or appropriate.  After the first meeting, the           

13  council shall meet at least quarterly, or more frequently at the            

14  call of the chairperson or if requested by 2 or more members.               

15      (7) A majority of the members of the council constitute a                   

16  quorum for the transaction of business at a meeting of the                  

17  council.  A majority of the members present and serving are                 

18  required for official action of the council.                                

19      (8) Members of the council shall serve without compensation.                

20  However, members of the council may be reimbursed for their                 

21  actual and necessary expenses incurred in the performance of                

22  their official duties as members of the council.                            

23      (9) By December 31, 2005, the council shall submit to the                   

24  governor and the legislature a report that evaluates and makes              

25  recommendations for changes to and the implementation and                   

26  administration of this part and part 213, including, but not                

27  limited to, the underground storage tank financial assurance                

1   program.                                                                    

2       (10) Effective 180 days after the council submits its report                

3   under subsection (8), the council is dissolved.                             

4       (11) This section is repealed August 1, 2006.