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SB-1089, As Passed Senate, May 24, 2006

SUBSTITUTE FOR

SENATE BILL NO. 1089

A bill to make appropriations for the department of history,

arts, and libraries for the fiscal year ending September 30, 2007;

to provide for the expenditure of those appropriations; to provide

for the disposition of fees and other income received by the state

agencies; to create funds; to provide for the disbursement of

certain grants; to provide for reports; to prescribe powers and

duties of certain state departments and certain state and local

agencies and officers; and to repeal acts and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

PART 1

LINE-ITEM APPROPRIATIONS

Sec. 101. Subject to the conditions set forth in this act, the

amounts listed in this part are appropriated for the department of

history, arts, and libraries for the fiscal year ending September

30, 2007, from the funds indicated in this part. The following is a

summary of the appropriations in this part:

DEPARTMENT OF HISTORY, ARTS, AND LIBRARIES

APPROPRIATION SUMMARY:

Full-time equated unclassified positions.......... 6.0

Full-time equated classified positions.......... 232.0

GROSS APPROPRIATION.................................... $ 53,931,400

Interdepartmental grant revenues:

Total interdepartmental grants and intradepartmental

transfers............................................ 79,000

ADJUSTED GROSS APPROPRIATION........................... $ 53,852,400

Federal revenues:

Total federal revenues................................. 8,450,900

Special revenue funds:

Total private revenues................................. 577,400

Total other state restricted revenues.................. 2,581,200

State general fund/general purpose..................... $ 42,242,900

Sec. 102. DEPARTMENT OPERATIONS

Full-time equated unclassified positions.......... 6.0

Full-time equated classified positions........... 30.0

Unclassified salaries.................................. $ 222,300

Management services--29.0 FTE positions................ 2,090,600

Building occupancy charges and rent.................... 3,180,100

Worker's compensation.................................. 14,000

Film office--1.0 FTE position.......................... 175,000

Human resources optimization user charges.............. 16,100

GROSS APPROPRIATION.................................... $ 5,698,100

Appropriated from:

Special revenue funds:

State general fund/general purpose..................... $ 5,698,100

Sec. 103. INFORMATION TECHNOLOGY

Information technology services and projects........... $ 953,100

GROSS APPROPRIATION.................................... $ 953,100

Appropriated from:

Special revenue funds:

Mackinac Island state park fund........................ 46,900

State general fund/general purpose..................... $ 906,200

Sec. 104. COUNCIL FOR ARTS AND CULTURAL AFFAIRS

Full-time equated classified positions............ 9.0

Administration--9.0 FTE positions...................... $ 726,600

Arts and cultural grants............................... 9,635,700

GROSS APPROPRIATION.................................... $ 10,362,300

Appropriated from:

Federal revenues:

NFAH-NEA, promotion of the arts, partnership

agreements........................................... 700,000

Special revenue funds:

State general fund/general purpose..................... $ 9,662,300

Sec. 105. MACKINAC ISLAND STATE PARK COMMISSION

Full-time equated classified positions........... 39.0

Mackinac Island park operation--24.3 FTE positions..... $ 1,489,000

Historical facilities system--14.7 FTE positions....... 1,928,600

GROSS APPROPRIATION.................................... $ 3,417,600

Appropriated from:

Federal revenues:

Federal funds.......................................... 200,000

Special revenue funds:

Mackinac Island state park operation fees.............. 154,500

Mackinac Island state park fund........................ 1,521,200

State general fund/general purpose..................... $ 1,541,900

Sec. 106. MICHIGAN HISTORICAL PROGRAM

Full-time equated classified positions........... 83.0

Historical administration and services--71.0 FTE

positions............................................ $ 5,374,500

Federal programs--12.0 FTE positions................... 1,993,500

Heritage publications.................................. 700,000

Private grants and gifts............................... 502,400

Thunder Bay national marine sanctuary and underwater

preserve............................................. 197,500

GROSS APPROPRIATION.................................... $ 8,767,900

Appropriated from:

Interdepartmental grant revenues:

IDG-MDOT, comprehensive transportation fund............ 3,400

IDG-MDOT, state aeronautics fund....................... 2,100

IDG-MDOT, state trunkline fund......................... 73,500

Federal revenues:

DOI-NPS, historic preservation grants-in-aid........... 1,419,000

Federal funds.......................................... 574,500

Special revenue funds:

Private - grants and gifts............................. 400,000

Private - Mann house trust fund........................ 102,400

Game and fish protection fund.......................... 2,400

Heritage publication fund.............................. 700,000

Marine safety fund..................................... 500

Special revenue, internal service and pension trust.... 49,400

State lottery fund..................................... 18,800

Waterways fund......................................... 600

State general fund/general purpose..................... $ 5,421,300

Sec. 107. LIBRARY OF MICHIGAN

Full-time equated classified positions........... 71.0

Book distribution centers.............................. $ 330,000

Collected gifts and fees............................... 161,900

Library of Michigan operations--71.0 FTE positions..... 6,543,800

Library services and technology act.................... 5,557,400

State aid to libraries................................. 11,634,300

Subregional state aid.................................. 505,000

GROSS APPROPRIATION.................................... $ 24,732,400

Appropriated from:

Federal revenues:

Library services and technology act.................... 5,557,400

Special revenue funds:

Private - gifts and bequests revenues.................. 75,000

User fees.............................................. 86,900

State general fund/general purpose..................... $ 19,013,100

PART 2

PROVISIONS CONCERNING APPROPRIATIONS

GENERAL SECTIONS

Sec. 201. Pursuant to section 30 of article IX of the state

constitution of 1963, total state spending from state resources

under part 1 for fiscal year 2006-2007 is $44,824,100.00 and state

spending from state resources to be paid to local units of

government for fiscal year 2006-2007 is $13,516,600.00. The

itemized statement below identifies appropriations from which

spending to units of local government will occur:

DEPARTMENT OF HISTORY, ARTS, AND LIBRARIES

Arts and cultural grants............................... $ 1,377,300

State aid to libraries................................. 11,634,300

Subregional state aid.................................. 505,000

Total department of history, arts, and libraries....... $ 13,516,600

Sec. 202. The appropriations authorized under this act are

subject to the management and budget act, 1984 PA 431, MCL 18.1101

to 18.1594.

Sec. 203. As used in this appropriation act:

(a) "Department" means the department of history, arts, and

libraries.

(b) "Director" means the director of the department of

history, arts, and libraries.

national park service.

(d) "Fiscal agencies" means the house fiscal agency and the

senate fiscal agency.

(e) "FTE" means full-time equated.

(f) "IDG" means interdepartmental grant.

(g) "MCACA" means the Michigan council for arts and cultural

affairs.

(h) "MDOT" means the Michigan department of transportation.

(i) "NEA" means the national endowment for the arts.

(j) "NFAH" means the national foundation of the arts and the

humanities.

(k) "Subcommittees" means all members of the appropriate

subcommittees of the senate and house appropriations committees.

Sec. 204. The department of civil service shall bill the

departments at the end of the first fiscal quarter for the 1%

charge authorized by section 5 of article XI of the state

constitution of 1963. Payments shall be made for the total amount

of the billing by the end of the second fiscal quarter.

Sec. 205. (1) A hiring freeze is imposed on the state

classified civil service. State departments and agencies are

prohibited from hiring any new full-time state classified civil

service employees and prohibited from filling any vacant state

classified civil service positions. This hiring freeze does not

apply to internal transfers of classified employees from 1 position

to another within a department.

(2) The state budget director shall grant exceptions to this

hiring freeze when the state budget director believes that the

hiring freeze will result in rendering a state department or agency

unable to deliver basic services, cause a loss of revenue to the

state, result in the inability of the state to receive federal

funds, or would necessitate additional expenditures that exceed any

savings from maintaining a vacancy. The state budget director shall

report quarterly to the chairpersons of the senate and house

standing committees on appropriations the number of exceptions to

the hiring freeze approved during the previous quarter and the

reasons to justify the exception.

Sec. 207. At least 60 days before beginning any effort to

privatize, the department shall submit a complete project plan to

the subcommittees and the fiscal agencies. The plan shall include

the criteria under which the privatization initiative will be

evaluated. The evaluation shall be completed and submitted to the

fiscal agencies and to the subcommittees within 30 months.

Sec. 208. Unless otherwise specified, the department shall use

the Internet to fulfill the reporting requirements of this act.

Required reports may be transmitted via electronic mail to the

recipients identified for each reporting requirement or they may be

placed on the Internet or Intranet site.

Sec. 209. Funds appropriated in part 1 shall not be used for

the purchase of foreign goods or services, or both, if

competitively priced and of comparable quality American goods or

services, or both, are available. Preference should be given to

goods or services, or both, manufactured or provided by Michigan

businesses if they are competitively priced and of comparable

value.

Sec. 210. The director shall take all reasonable steps to

ensure businesses in deprived and depressed communities compete for

and perform contracts to provide services or supplies, or both. The

director shall strongly encourage firms with which the department

contracts to subcontract with certified businesses in depressed and

deprived communities for services, supplies, or both.

Sec. 211. The department shall establish and maintain

affirmative action programs based on guidelines developed by the

state equal opportunity workforce planning council which was

created by Executive Order No. 1996-13 in order to receive general

fund/general purpose dollars.

Sec. 213. From the funds appropriated in part 1 for

information technology, departments and agencies shall pay user

fees to the department of information technology for technology

related services and projects. The user fees shall be subject to

provisions of an interagency agreement between the departments and

agencies and the department of information technology.

Sec. 214. Amounts appropriated in part 1 for information

technology may be designated as work projects and carried forward

to support technology projects under the direction of the

department of information technology. Funds designated in this

manner are not available for expenditure until approved as work

projects under section 451a of the management and budget act, 1984

PA 431, MCL 18.1451a.

Sec. 215. (1) The department may provide and enter into

agreements to provide general services, training, meetings,

information, special equipment, software, and facility use, and

technical consulting services to other principal executive

departments, state agencies, local units of government, the

judicial branch of government, other organizations, and patrons of

department facilities. Fees for services shall be reasonably

related to the cost of providing the services and shall be used to

offset the costs of the services. The department may receive and

expend funds in addition to those authorized in part 1 for the

following:

(a) Supplying census-related information and technical

services, publications, statistical studies, population projections

and estimates, and other demographic products.

(b) Microfilming and other document and data imaging services,

media, storage, and copies.

copies.

(d) Conferences, training classes, exhibits, programs, and

workshops conducted as part of the department's mission.

(e) Use of specialized equipment, facilities, and software

that permit distance learning and meetings, and group decision

making.

(f) Special services including the rental of department

exhibits and collections.

(g) Application fees.

(h) Grants, gifts, and bequests, including those for capital

projects.

(2) The funds received under this section may be deposited and

expended from the history, arts, and libraries fund established in

section 216 of this act.

Sec. 216. (1) A fund known as the history, arts, and libraries

fund is created in the department. The fund may be used to receive

and expend funds in addition to those authorized in part 1. The

fund balance may be carried forward for expenditure in subsequent

fiscal years.

(2) The department shall provide a report to the senate and

house of representatives appropriations subcommittees on history,

arts, and libraries of all revenues to and expenditures from the

history, arts, and libraries fund. The report shall include an

estimated fund balance for the fiscal year ending September 30,

2007. The report is due November 1, 2007.

Sec. 217. (1) Due to the current budgetary problems in this

state, out-of-state travel for the fiscal year ending September 30,

2007 shall be limited to situations in which 1 or more of the

following conditions apply:

(a) The travel is required by legal mandate or court order or

for law enforcement purposes.

(b) The travel is necessary to protect the health or safety of

Michigan citizens or visitors or to assist other states in similar

circumstances.

increase state revenues, including protecting existing federal

funds or securing additional federal funds.

(d) The travel is necessary to comply with federal

requirements.

(e) The travel is necessary to secure specialized training for

staff that is not available within this state.

(f) The travel is financed entirely by federal or nonstate

funds.

(2) If out-of-state travel is necessary but does not meet 1 or

more of the conditions in subsection (1), the state budget director

may grant an exception to allow the travel. Any exceptions granted

by the state budget director shall be reported on a monthly basis

to the senate and house appropriations committees.

(3) Not later than January 1 of each year, each department

shall prepare a travel report listing all travel by classified and

unclassified employees outside this state in the immediately

preceding fiscal year that was funded in whole or in part with

funds appropriated in the department's budget. The report shall be

submitted to the chairs and members of the senate and house

appropriations committees, the fiscal agencies, and the state

budget director. The report shall include the following

information:

(a) The name of each person receiving reimbursement for travel

outside this state or whose travel costs were paid by this state.

(b) The destination of each travel occurrence.

(d) A brief statement of the reason for each travel

occurrence.

(e) The transportation and related costs of each travel

occurrence, including the proportion funded with state general

fund/general purpose revenues, the proportion funded with state

restricted revenues, the proportion funded with federal revenues,

and the proportion funded with other revenues.

(f) A total of all out-of-state travel funded for the

immediately preceding fiscal year.

Sec. 218. It is the intent of the legislature to explore

supplemental fund sourcing options for the department of history,

arts, and libraries.

Sec. 219. The department shall not take disciplinary action

against an employee for communicating with a member of the

legislature or his or her staff.

Sec. 220. The department shall publish the proposed minutes of

the Michigan film advisory commission on the Internet within 8

business days after the meeting to which the minutes refer.

Approved minutes of the Michigan film advisory commission shall be

posted on the Internet within 8 business days after their approval.

Sec 222. By October 15, 2006, the department shall provide to

the senate and house appropriations subcommittees on history, arts,

and libraries and the senate and house fiscal agencies a list of

general fund/general purpose budget cuts sufficient to reduce

department general fund/general purpose spending by 7.93% in fiscal

year 2006-2007 if the K-16 ballot initiative is adopted by the

voters of this state.

MICHIGAN COUNCIL FOR ARTS AND CULTURAL AFFAIRS

Sec. 401. (1) The MCACA in the department shall administer the

arts and cultural grants appropriated in part 1.

(2) The MCACA shall render fair and independent decisions

concerning arts and cultural grant requests and shall do all of the

following:

(a) Use published criteria to evaluate program quality.

(b) Seek to award grants on an equitable geographic basis to

the extent possible given the quality of grant applications

received.

leverage significant additional public and private investment, or

demonstrate a significant potential to increase tourism or attract

or retain business residents.

(3) The MCACA shall not award a grant unless the proposed

grant recipient agrees to both of the following:

(a) The grant will not be used to fund a project or activity

that includes a display of human waste on religious symbols, a

display of a sex act, or a depiction of flag desecration.

(b) Grant funding will not be used to create or promote a

specific work that includes a display or depiction for which

funding is prohibited under subdivision (a).

(4) The MCACA shall provide for fair, equitable, and efficient

distribution of funds granted through the regional regranting

program. The MCACA shall provide for an annual assessment of grant

management and distribution of mini-grant awards by designated

regional regranting agencies and review the methodology employed.

(5) The MCACA shall continue and expand its efforts to

encourage and support nonprofit arts and cultural organizations to

transition from solely volunteer-based organizations to

professionally directed operations. Criteria for support include

the requirement of collaboration between these organizations and

other community organizations.

(6) The department shall withhold undistributed grant payments

from a grant recipient who violates the terms of the agreement

required under subsection (3) and may disqualify the grant

recipient from award of future grants for a period of not more than

3 years.

Sec. 402. The MCACA may award grants to counties, cities,

villages, townships, community foundations and organizations in the

following categories:

(a) Anchor organization program for organizations that serve

regional and statewide audiences. Anchor organizations shall

demonstrate a commitment to education, to mentoring smaller

organizations, and to reaching underserved audiences.

(b) Arts projects program.

(d) Artists in residence for education program.

(e) Arts organization development program.

(f) Capital improvement program.

(g) Local arts agencies services program.

(h) Regional regranting program.

(i) Partnership program.

(j) Rural arts and cultural program.

(k) Cultural projects program.

(l) Historical projects program.

(m) Discretionary grants program.

Sec. 403. (1) From the state funds appropriated in part 1 for

arts and cultural grants, no one organization may receive more than

16% of this funding. It is the intent of the legislature that this

percentage be reduced to 15% in fiscal year 2008.

(2) The MCACA shall make every effort to provide total grant

awards in the anchor organization program at a level not to exceed

70% of the total amount appropriated for arts and cultural grants.

(3) As documented in the audit report that is submitted as

part of the grant application process, the total of all grants

awarded to any organization receiving grants within the anchor

organization program may not exceed 15% of their "total

unrestricted revenues, gains, and other support," as defined by the

financial accounting standards board in the accounting standards

for not-for-profit organizations or equivalent accounting standards

for other types of eligible organizations.

(4) Before any amount appropriated for arts and cultural

grants in part 1 may be expended for a grant to an eligible

recipient, the department shall execute a grant agreement with the

recipient. The grant agreement shall identify the projects funded,

specify the category in section 402 under which the grant is

awarded, and include the prohibitions and sanctions identified in

section 401(3) and (6).

Sec. 404. Grant applicants must meet and adhere to the

following requirements:

(a) Each applicant shall pay a nonrefundable application fee

of $300.00 or 3% of the desired grant amount, whichever is less.

The department may use the application fee to offset its direct and

indirect costs.

(b) An applicant for a grant under the anchor organization

program shall submit with the application the applicant's most

recent annual audit report which states their "total unrestricted

revenues, gains, and other support," as defined by the financial

accounting standards board in the accounting standards for not-for-

profit organizations or equivalent accounting standards for other

types of eligible organizations. The audit report must cover an

audit period that ends within 18 months of the date of the

application.

local and/or private sources on a dollar-for-dollar basis. The

dollar-for-dollar match may include the reasonable value of

services, materials, and equipment as allowed under the federal

internal revenue code for charitable contributions.

Sec. 405. Each grant recipient shall provide the MCACA with

the following:

(a) The MCACA shall receive proof of the entire amount of the

matching funds, services, materials, or equipment by the end of the

award period.

(b) Within 30 days following the end of the grant period, a

final report that includes the following:

(i) Project revenues and expenditures including grant matching

fund amounts.

(ii) Number of patrons attracted or benefiting during the grant

period.

(iii) A narrative summary of each project and its outcome.

greater than $100,000.00 shall submit an interim report that

includes the items identified in subdivision (b).

Sec. 406. (1) The department shall make the following reports:

(a) A report identifying the website location that contains a

list of all grant recipients, sorted by county. This report shall

be provided to each legislator within 1 business day of the

announcement of annual awards by the MCACA.

(b) A report to the appropriations subcommittees, the state

budget office, and the fiscal agencies, within 30 days after the

MCACA announces the annual grant awards, that includes all of the

following:

(i) A listing of each applicant.

(ii) The county of residence of the applicant.

(iii) The amount requested.

(iv) The amount awarded.

(v) The grant category under which an applicant applied.

(vi) A summary of projects funded for each recipient.

(vii) The expected number of patrons for an applicant during

the grant period.

(viii) The amount of matching funds proposed by each applicant.

(ix) A listing containing the information in subdivision (a)

and subparagraphs (i) to (viii) for any regranted funds in the

preceding fiscal year.

state budget office, and the fiscal agencies is due when materials

are first distributed by the MCACA seeking grant applications for

the subsequent fiscal year. The report shall contain the following:

(i) The MCACA guidelines for awarding grants.

(ii) A summary of any changes in the program guidelines from

the previous fiscal year.

(2) The council shall report to the chairpersons of the senate

and house appropriations subcommittees on history, arts, and

libraries by August 1 all unexpended or unencumbered discretionary

grant funding that is available. The council shall not redistribute

any unexpended or unencumbered grant funds during the fiscal year

without a 10-day notice to the chairpersons of the senate and house

appropriations subcommittees on history, arts, and libraries.

Sec. 407. It is the intent of the legislature to amend the

income tax act of 1967, MCL 206.1 to 206.532, to create a

designation on the Michigan income tax form for contributions to

the Michigan council for arts and cultural affairs grant program.

MICHIGAN HISTORICAL PROGRAM

Sec. 501. The federal funds appropriated in part 1 for the

historic site preservation grants are for work projects and shall

not lapse at the end of the fiscal year but shall continue to be

available for expenditure until the projects for which the funds

were reserved have been completed or are terminated. The purpose of

these work projects is the identification, designation, and

preservation of historic resources. The method used will be to

solicit applications, score applications based upon established

criteria, and award subgrants. The department shall execute a grant

agreement with each recipient. The total cost is $200,000.00 and

the tentative completion date is September 30, 2007.

Sec. 502. Funds collected by the department under sections 3,

6, 7, and 7a of 1913 PA 271, MCL 399.3, 399.6, 399.7, and 399.7a,

are appropriated to the department for the purpose for which they

were received and may be carried forward for expenditure in

subsequent fiscal years.

Sec. 503. For the purposes of administering the museum store

as provided in section 7a of 1913 PA 271, MCL 399.7a, the

department is exempt from section 261 of the management and budget

act, 1984 PA 431, MCL 18.1261.

Sec. 505. From the funds appropriated in part 1 for historical

administration and services, $25,000.00 shall be allocated to

support the operations of the Michigan freedom trail commission as

specified in section 4 of the Michigan freedom trail commission

act, 1998 PA 409, MCL 399.84. These funds shall be used to

reimburse commission members, to pay for necessary contractual

services of the commission, and to hire not more than 1.0 FTE

position in the department's Michigan historical center to support

commission operations.

Sec. 506. Proceeds in excess of costs incurred in the conduct

of auctions, sales, or transfers of artifacts no longer considered

suitable for the collections of the state historical museum are

appropriated to the department and may be expended upon receipt for

additional material for the collection. The department shall notify

the chairpersons, vice chairpersons, and minority vice chairpersons

of the senate and house appropriations subcommittees on history,

arts, and libraries 1 week prior to any auctions or sales.

Sec. 507. Unless prohibited by law, the department shall make

available to the historical society of Michigan the use of the

Michigan history magazine subscriber list, or a portion of the

Michigan history magazine subscriber list, at a cost not to exceed

the actual expense incurred for providing a single mailing.

Sec. 508. From the funds appropriated in part 1 in the

Senate Bill No. 1089 as amended May 24, 2006

historical administration and services line item, $100,000.00 shall

be used to fund a competitive historical grant program. Eligible

applicants include all state and local historical societies and the

state historical preservation network. Awards shall be made for

projects that can leverage additional public and private investment

and may involve, but are not limited to, capital improvements

projects, restorations, research, educational programs, and

publications.

Sec. 509. Of the funds appropriated in part 1 in the

historical administration and services line item, $5,000.00 shall

be allocated to support Michigan history day.

<<Sec. 510. The department shall reimburse the Michigan strategic fund in full for the cost of all services or activities provided by the Michigan strategic fund at the request of the department.>>

LIBRARY OF MICHIGAN

Sec. 601. In order to receive subregional state aid as

appropriated in part 1 to the library of Michigan, a subregional

library's fiscal agency must agree to maintain local funding

support at the same level in the current fiscal year as in the

fiscal agency's preceding fiscal year. If a reduction in

expenditures equally affects all agencies in a local unit of

government that is the subregional library's fiscal agency, that

reduction shall not be interpreted as a reduction in local support

and shall not disqualify a subregional library from receiving state

aid under part 1. If a reduction in income affects a library

cooperative or district library that is a subregional library's

fiscal agency or a reduction in expenditures for the subregional

library's fiscal agency, a reduction in expenditures for the

subregional library shall not be interpreted as a reduction in

local support and shall not disqualify a subregional library from

receiving state aid under part 1.

Sec. 602. The funds appropriated in part 1 for a subregional

library shall not be released until a budget for that subregional

library has been approved by the department for expenditures for

library services directly serving the blind and persons with

disabilities.

Sec. 607. The funds appropriated in part 1 for book

distribution centers shall be equally distributed to the public

enrichment foundation and the Michigan friends of education.

Sec. 608. It is the intent of the legislature that from the

general fund balance at the close of fiscal year 2005-2006,

$20,000.00 shall be allocated to support book distribution centers.