FIRST CONFERENCE REPORT

The Committee of Conference on the matters of difference between the two Houses concerning

Senate Bill No. 201, entitled

A bill to make appropriations for the department of agriculture and rural development for the fiscal year ending September 30, 2014; and to provide for the expenditure of the appropriations.

Recommends:

First: That the House recede from the Substitute of the House as passed by the House.

Second: That the Senate and House agree to the Substitute of the Senate as passed by the Senate, amended to read as follows:

(attached)

Third: That the Senate and House agree to the title of the bill to read as follows:

A bill to make appropriations for the department of agriculture and rural development for the fiscal year ending September 30, 2014; and to provide for the expenditure of the appropriations.

_______________________ ________________________

Mike Green Phil Potvin

_______________________ ________________________

Roger Kahn Nancy E. Jenkins

_______________________ ________________________

Hoon-Yung Hopgood Terry L. Brown

Conferees for the Senate Conferees for the House

SUBSTITUTE FOR

SENATE BILL NO. 201

A bill to make appropriations for the department of

agriculture and rural development for the fiscal year ending

September 30, 2014; and to provide for the expenditure of the

appropriations.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

PART 1

LINE-ITEM APPROPRIATIONS

Sec. 101. There is appropriated for the department of

agriculture and rural development for the fiscal year ending

September 30, 2014, from the following funds:

DEPARTMENT OF AGRICULTURE AND RURAL DEVELOPMENT

APPROPRIATION SUMMARY

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

Full-time equated classified positions.......... 434.0

GROSS APPROPRIATION.................................... $ 80,183,300

Interdepartmental grant revenues:

IDG from LARA (LCC), liquor quality testing fees....... 214,100

IDG from MDNR, forest development fund................. 200,000

IDG from MDEQ, biosolids............................... 110,200

Total interdepartmental grants and intradepartmental

transfers............................................ 524,300

ADJUSTED GROSS APPROPRIATION........................... $ 79,659,000

Federal revenues:

USDA, multiple grants.................................. 5,814,900

Department of interior................................. 240,000

EPA, multiple grants................................... 1,601,800

HHS-FDA................................................ 2,304,200

Total federal revenues................................. 9,960,900

Special revenue funds:

Total local revenues................................... 0

Private - slow-the-spread foundation................... 20,400

Private - commodity group revenue...................... 76,500

Total private revenues................................. 96,900

Agricultural preservation fund......................... 1,624,500

Agriculture equine industry development fund........... 3,855,500

Agriculture licensing and inspection fees.............. 4,075,000

Animal welfare fund.................................... 214,900

Commodity inspection fees.............................. 432,000

Consumer and industry food safety education fund....... 314,800

Dairy and food safety fund............................. 3,329,600

Freshwater protection fund............................. 5,173,000

Gasoline inspection and testing fund................... 2,723,700

Grain dealer fee fund.................................. 696,900

Horticulture fund...................................... 37,900

Industry support funds................................. 443,600

Migratory labor housing fund........................... 162,600

Nonretail liquor fees.................................. 797,700

Refined petroleum fund................................. 4,012,000

Renewable fuels fund................................... 51,200

Testing fees........................................... 285,000

Weights and measures regulation fees................... 791,000

Total other state restricted revenues.................. 29,020,900

State general fund/general purpose..................... $ 40,580,300

State general fund/general purpose schedule:

Ongoing state general fund/general purpose 37,180,300

One-time state general fund/general purpose 3,400,000

Sec. 102. DEPARTMENTWIDE

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

Full-time equated classified positions........... 27.0

Commissions and boards................................. $ 23,800

Unclassified positions................................. 707,000

Executive direction--9.0 FTE positions................. 1,360,200

Operational services--15.0 FTE positions............... 1,041,700

Statistical reporting service--1.0 FTE position........ 148,700

Emergency management--2.0 FTE positions................ 800,700

Accounting service center.............................. 948,400

Rent and building occupancy............................ 1,061,600

GROSS APPROPRIATION.................................... $ 6,092,100

Appropriated from:

Federal revenues:

USDA, multiple grants.................................. 240,400

EPA, multiple grants................................... 186,300

HHS-FDA................................................ 574,500

Special revenue funds:

Private - commodity group revenue...................... 76,500

Agricultural preservation fund......................... 24,300

Agriculture licensing and inspection fees.............. 181,600

Freshwater protection fund............................. 35,900

Industry support funds................................. 52,200

Nonretail liquor fees.................................. 39,600

Refined petroleum fund................................. 320,300

State general fund/general purpose..................... $ 4,360,500

Sec. 103. INFORMATION AND TECHNOLOGY

Information technology services and projects........... $ 1,444,700

GROSS APPROPRIATION.................................... $ 1,444,700

Appropriated from:

Interdepartmental grant revenues:

IDG from LARA (LCC), liquor quality testing fees....... 3,100

Special revenue funds:

Agricultural preservation fund......................... 200

Agriculture equine industry development fund........... 83,700

Agriculture licensing and inspection fees.............. 31,900

Freshwater protection fund............................. 100

Gasoline inspection testing fund....................... 30,900

Nonretail liquor fees.................................. 500

State general fund/general purpose..................... $ 1,294,300

Sec. 104. FOOD AND DAIRY

Full-time equated classified positions.......... 101.0

Food safety and quality assurance--75.0 FTE positions.. $ 10,881,200

Milk safety and quality assurance--26.0 FTE positions.. 3,821,300

GROSS APPROPRIATION.................................... $ 14,702,500

Appropriated from:

Federal revenues:

USDA, multiple grants.................................. 318,800

HHS-FDA................................................ 961,400

Special revenue funds:

Consumer and industry food safety education fund....... 314,800

Dairy and food safety fund............................. 3,329,600

State general fund/general purpose..................... $ 9,777,900

Sec. 105. ANIMAL INDUSTRY

Full-time equated classified positions........... 60.0

Animal disease prevention and response--60.0 FTE

positions............................................ $ 8,706,100

Indemnification - livestock depredation................ 50,000

GROSS APPROPRIATION.................................... $ 8,756,100

Appropriated from:

Federal revenues:

USDA, multiple grants.................................. 513,400

HHS-FDA................................................ 45,400

Special revenue funds:

Agriculture licensing and inspection fees.............. 11,700

Animal welfare fund.................................... 214,900

State general fund/general purpose..................... $ 7,970,700

Sec. 106. PESTICIDE AND PLANT PEST MANAGEMENT

Full-time equated classified positions........... 86.0

Pesticide and plant pest management--81.0 FTE

positions............................................ $ 10,996,300

Producer security/grain dealers--5.0 FTE positions..... 736,700

GROSS APPROPRIATION.................................... $ 11,733,000

Appropriated from:

Federal revenues:

USDA, multiple grants.................................. 822,200

Department of interior................................. 120,000

EPA, multiple grants................................... 719,400

HHS-FDA................................................ 116,900

Special revenue funds:

Private - slow-the-spread foundation................... 20,400

Agriculture licensing and inspection fees.............. 3,773,300

Commodity inspection fees.............................. 432,000

Grain dealers fee fund................................. 696,900

Horticulture fund...................................... 37,900

Industry support funds................................. 240,300

State general fund/general purpose..................... $ 4,753,700

Sec. 107. ENVIRONMENTAL STEWARDSHIP

Full-time equated classified positions........... 55.0

Environmental stewardship--18.0 FTE positions.......... $ 6,140,400

Michigan agriculture environmental assurance program--

7.0 FTE positions.................................... 1,668,800

Farmland and open space preservation--9.0 FTE

positions............................................ 1,300,000

Private forest development program--5.0 FTE positions.. 200,000

Local conservation districts........................... 100

Migrant labor housing--9.0 FTE positions............... 1,198,500

Right-to-farm--3.0 FTE positions....................... 571,400

Intercounty drain--4.0 FTE positions................... 468,300

GROSS APPROPRIATION.................................... $ 11,547,500

Appropriated from:

Interdepartmental grant revenues:

IDG from MDNR, forest development fund................. 200,000

IDG from MDEQ, biosolids............................... 110,200

Federal revenues:

USDA, multiple grants.................................. 912,500

Department of interior................................. 120,000

EPA, multiple grants................................... 304,100

Special revenue funds:

Agricultural preservation fund......................... 1,300,000

Freshwater protection fund............................. 5,137,000

Migratory labor housing fund........................... 162,600

State general fund/general purpose..................... $ 3,301,100

Sec. 108. LABORATORY PROGRAM

Full-time equated classified positions........... 90.0

Laboratory services--36.0 FTE positions................ $ 5,571,300

USDA monitoring--13.0 FTE positions.................... 1,586,000

Consumer protection program--41.0 FTE positions........ 6,016,100

GROSS APPROPRIATION.................................... $ 13,173,400

Appropriated from:

Interdepartmental grant revenues:

IDG from LARA (LCC), liquor quality testing fees....... 211,000

Federal revenues:

USDA, multiple grants.................................. 1,586,900

EPA, multiple grants................................... 392,000

HHS-FDA................................................ 606,000

Special revenue funds:

Agriculture equine industry development fund........... 604,600

Agriculture licensing and inspection fees.............. 76,500

Gasoline inspection and testing fund................... 2,692,800

Refined petroleum fund................................. 3,691,700

Renewable fuels fund................................... 51,200

Testing fees........................................... 285,000

Weights and measures regulation fees................... 791,000

State general fund/general purpose..................... $ 2,184,700

Sec. 109. AGRICULTURE DEVELOPMENT

Full-time equated classified positions........... 14.0

Agriculture development--11.0 FTE positions............ $ 2,712,600

Food and agriculture industry growth initiative........ 1,000,000

Grape and wine program--3.0 FTE positions.............. 802,600

Rural development value-added grants................... 1,050,000

GROSS APPROPRIATION.................................... $ 5,565,200

Appropriated from:

Federal revenues:

USDA, multiple grants.................................. 1,420,700

Special revenue funds:

Industry support funds................................. 151,100

Nonretail liquor fees.................................. 757,600

State general fund/general purpose..................... $ 3,235,800

Sec. 110. FAIRS AND EXPOSITIONS

Full-time equated classified positions............ 1.0

Fairs and racing--1.0 FTE position..................... $ 356,600

County fairs capital improvement grants................ 301,600

Purses and supplements - fairs/licensed tracks......... 708,300

Licensed tracks - light horse racing................... 40,300

Light horse racing - breeders' awards.................. 20,000

Standardbred breeders' awards.......................... 285,900

Standardbred purses and supplements - licensed tracks.. 527,800

Standardbred sire stakes............................... 239,000

Thoroughbred supplements - licensed tracks............. 385,900

Thoroughbred breeders' awards.......................... 358,600

Thoroughbred sire stakes............................... 244,800

GROSS APPROPRIATION.................................... $ 3,468,800

Appropriated from:

Special revenue funds:

Agriculture equine industry development fund........... 3,167,200

State general fund/general purpose..................... $ 301,600

Sec. 111. CAPITAL OUTLAY

Farmland and open space development acquisition........ $ 300,000

GROSS APPROPRIATION.................................... $ 300,000

Appropriated from:

Special revenue funds:

Agriculture preservation fund.......................... 300,000

State general fund/general purpose..................... $ 0

Sec. 112. ONE-TIME BASIS ONLY

Ottawa County water resources study.................... $ 300,000

Qualified forest affidavit program..................... 2,300,000

Pesticide and plant pest management.................... 800,000

GROSS APPROPRIATION.................................... $ 3,400,000

Appropriated from:

State general fund/general purpose..................... $ 3,400,000

PART 2

PROVISIONS CONCERNING APPROPRIATIONS

FOR FISCAL YEAR 2013-2014

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 2013-2014 is $69,601,200.00 and state

spending from state resources to be paid to local units of

government for fiscal year 2013-2014 is $3,500,000.00. The itemized

statement below identifies appropriations from which spending to

local units of government will occur:

DEPARTMENT OF AGRICULTURE AND RURAL DEVELOPMENT

Environmental stewardship.............................. $ 3,500,000

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 act:

(a) "Department" means the department of agriculture and rural

development.

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

agency.

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

(e) "HHS-FDA" means the United States department of health and

human services - food and drug administration.

(f) "IDG" means interdepartmental grant.

(g) "LARA" means the Michigan department of licensing and

regulatory affairs.

(h) "LCC" means the Michigan liquor control commission.

(i) "MDEQ" means the Michigan department of environmental

quality.

(j) "MDNR" means the Michigan department of natural resources.

(k) "MOU" means memorandum of understanding.

(l) "TB" means tuberculosis.

(m) "USDA" means the United States department of agriculture.

Sec. 206. (1) In addition to the funds appropriated in part 1,

there is appropriated an amount not to exceed $5,000,000.00 for

federal contingency funds. These funds are not available for

expenditure until they have been transferred to another line item

in part 1 under section 393(2) of the management and budget act,

1984 PA 431, MCL 18.1393.

(2) In addition to the funds appropriated in part 1, there is

appropriated an amount not to exceed $6,000,000.00 for state

restricted contingency funds. These funds are not available for

expenditure until they have been transferred to another line item

in part 1 under section 393(2) of the management and budget act,

1984 PA 431, MCL 18.1393.

(3) In addition to the funds appropriated in part 1, there is

appropriated an amount not to exceed $100,000.00 for local

contingency funds. These funds are not available for expenditure

until they have been transferred to another line item in part 1

under section 393(2) of the management and budget act, 1984 PA 431,

MCL 18.1393.

(4) In addition to the funds appropriated in part 1, there is

appropriated an amount not to exceed $100,000.00 for private

contingency funds. These funds are not available for expenditure

until they have been transferred to another line item in part 1

under section 393(2) of the management and budget act, 1984 PA 431,

MCL 18.1393.

Sec. 207. The department shall cooperate with the department

of technology, management, and budget to maintain a searchable

website accessible by the public at no cost that includes, but is

not limited to, all of the following:

(a) Fiscal year-to-date expenditures by category.

(b) Fiscal year-to-date expenditures by appropriation unit.

including the vendor name, payment date, payment amount, and

payment description.

(d) The number of active department employees by job

classification.

(e) Job specifications and wage rates.

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

the Internet to fulfill the reporting requirements of this part.

This requirement may include transmission of reports via electronic

mail to the recipients identified for each reporting requirement,

or it may include placement of reports on an 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 shall be given to

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

businesses, if they are competitively priced and of comparable

quality. In addition, preference shall be given to goods or

services, or both, that are manufactured or provided by Michigan

businesses owned and operated by veterans, if they are

competitively priced and of comparable quality.

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.

Each 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. 212. The department and agencies receiving appropriations

in part 1 shall receive and retain copies of all reports funded

from appropriations in part 1. Federal and state guidelines for

short-term and long-term retention of records shall be followed.

The department may electronically retain copies of reports unless

otherwise required by federal and state guidelines.

Sec. 215. The department shall not take disciplinary action

against an employee for communicating with a member of the

legislature or his or her staff.

Sec. 218. The departments and agencies receiving

appropriations in part 1 shall prepare a report on out-of-state

travel expenses not later than January 1 of each year. The travel

report shall be a listing of 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 house and senate appropriations committees, the

house and senate fiscal agencies, and the state budget director.

The report shall include the following information:

(a) The dates of each travel occurrence.

(b) 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.

Sec. 228. Not later than November 30, the state budget office

shall prepare and transmit a report that provides for estimates of

the total general fund/general purpose appropriation lapses at the

close of the fiscal year. This report shall summarize the projected

year-end general fund/general purpose appropriation lapses by major

departmental program or program areas. The report shall be

transmitted to the office of the state budget, the chairpersons of

the senate and house of representatives standing committees on

appropriations, and the senate and house fiscal agencies.

Sec. 229. Within 14 days after the release of the executive

budget recommendation, the department shall cooperate with the

state budget office to provide the senate and house appropriations

chairs, the senate and house appropriations subcommittees on

agriculture and rural development, respectively, and the senate and

house fiscal agencies with an annual report on estimated state

restricted fund balances, state restricted fund projected revenues,

and state restricted fund expenditures for the fiscal years ending

September 30, 2013 and September 30, 2014.

Sec. 230. Funds appropriated in part 1 shall not be used by a

principal executive department, state agency, or authority to hire

a person to provide legal services that are the responsibility of

the attorney general. This prohibition does not apply to legal

services for bonding activities and for those outside services that

the attorney general authorizes.

Sec. 231. The department shall maintain, on a publicly

accessible website, a department scorecard that identifies, tracks,

and regularly updates key metrics that are used to monitor and

improve the agency's performance.

DEPARTMENTWIDE

Sec. 301. (1) Pursuant to the appropriations in part 1, the

department may receive and expend revenue and use that revenue to

cover necessary expenses related to publications, audit and

licensing functions, livestock sales, certification of nursery

stock, and laboratory analyses as specified in the following:

(a) Management services publications.

(b) Management services audit and licensing functions.

certification of virus-free foundation stock.

(d) Pesticide and plant pest management grading services.

(e) Laboratory support testing for testing horses in draft

horse pulling contests at county fairs when local jurisdictions

request state assistance.

(f) Laboratory support analyses to determine foreign

substances in horses engaged in racing or pulling contests at

tracks.

(g) Laboratory support analyses of food, livestock, and

agricultural products for disease, foreign products for disease,

toxic materials, foreign substances, and quality standards.

(h) Laboratory support test samples for other agencies and

organizations.

(i) Fruit and vegetable inspection at shipping and termination

points and processing plants.

(2) The department shall notify the senate and house

appropriations subcommittees on agriculture and rural development

and the senate and house fiscal agencies 30 days prior to proposing

changes in fees authorized under this section or under section 5 of

1915 PA 91, MCL 285.35.

(3) Annually, before February 1, the department shall provide

a report to the senate and house appropriations subcommittees on

agriculture and rural development and the senate and house fiscal

agencies detailing all the fees charged by the department under the

authorization provided in this section, including, but not limited

to, rates, number of individuals paying each fee, and the revenue

generated by each fee in the previous fiscal year.

Sec. 302. Of the funds appropriated in part 1 that are other

than line-item grants, the department shall not provide grants to

local government agencies, institutions of higher education, or

nonprofit organizations unless the department provides notice of

the grant to the senate and house appropriations subcommittees on

agriculture and rural development at least 10 days before the grant

is issued. The grants shall be used to support research or other

related activities for the purpose of enhancing the agricultural

industries in this state.

FOOD AND DAIRY

Sec. 402. Not later than April 1, the department shall provide

a report to the senate and house appropriations subcommittees on

agriculture and rural development and the senate and house fiscal

agencies describing significant food-borne outbreaks and

emergencies, including any enforcement actions taken related to

food safety during the 2012-2013 fiscal year.

ANIMAL INDUSTRY

Sec. 451. From the funds appropriated in part 1 for bovine

tuberculosis, the department shall pay for all whole herd testing

costs and individual animal testing costs in the modified

accredited zone to maintain split-state status requirements. These

costs include indemnity and compensation for injury causing death

or downer to animals.

Sec. 453. (1) Of the funds appropriated in part 1, the

department may provide for indemnity as provided for pursuant to

the animal industry act, 1988 PA 466, MCL 287.701 to 287.746, not

to exceed $100,000.00 per order from any line item for the fiscal

year ending September 30, 2013. Before the department provides for

an indemnification under this section, the department shall report

the reason for the indemnification, the amount of the

indemnification, and to whom the indemnification is to be paid. The

report shall be given to each member of the senate and house

appropriations subcommittees on agriculture and rural development

and to the senate and house fiscal agencies and to the state budget

director.

(2) The department of agriculture and rural development shall

make an indemnification payment for the fair market value of

livestock killed by a wolf, coyote, or cougar, if the kill is

verified by the department of natural resources. The fair market

value of the livestock shall be determined pursuant to the

indemnification procedures prescribed in the animal industry act,

1988 PA 466, MCL 287.701 to 287.745.

(3) The funds appropriated in part 1 for indemnification -

livestock depredation are appropriated for indemnification payments

and related department costs under subsection (2). On or before

March 1 of the current fiscal year, the department shall report to

the house and senate appropriations subcommittees on agriculture

and rural development, and the house and senate fiscal agencies, on

costs incurred in the 2011-2012 and 2012-2013 fiscal years for

indemnification payments to producers made under subsection (2) and

related department costs.

Sec. 454. The department shall use its resources to

collaborate with the USDA to obtain TB-free status for the area of

the Lower Peninsula that is zoned as modified accredited advanced.

The department shall also aggressively work toward eradicating

bovine TB in the modified accredited zone. The department shall

also convene a workgroup to work toward eradicating bovine TB in

the modified accredited zone.

Sec. 456. Of the funds appropriated in part 1, no funds shall

be used to enforce the mandatory electronic animal identification

program for any domestic animals other than cattle until specific

procedures and guidelines for electronic animal identification are

outlined in statute.

Sec. 457. On or before October 15 of the current fiscal year

and on a quarterly basis thereafter, the department shall report to

the senate and house agriculture committees, the senate and house

appropriations subcommittees on agriculture and rural development,

and the senate and house fiscal agencies on the department's

progress toward meeting the USDA requirements as outlined in the

March 2007 bovine TB program review. The report shall include, but

is not limited to, information and data on: wildlife risk

mitigation plan implementation in the modified accredited zone;

implementation of a movement certificate process; progress toward

annual surveillance test requirements set out in the June 2007 MOU;

efforts to work with slaughter facilities in Michigan, as well as

those that slaughter a significant number of animals from Michigan;

educational programs and information for Michigan's livestock

community; any other item the legislature should be aware of that

will promote or hinder efforts to achieve bovine TB-free status for

Michigan.

Sec. 458. From the funds appropriated in part 1 for animal

industry, the department shall provide inspection and testing of

aquaculture facilities and aquaculture researchers as provided

under section 7 of the Michigan aquaculture development act, 1996

PA 199, MCL 286.877. It is the intent of the legislature that the

department shall work with aquaculture facilities and aquaculture

researchers to identify, contain, and eradicate viral hemorrhagic

septicemia in this state.

ENVIRONMENTAL STEWARDSHIP

Sec. 601. The part 1 appropriation line item environmental

stewardship shall be used to support department agriculture

pollution prevention programs, including groundwater and freshwater

protection programs under part 87 of the Michigan natural resources

and environmental protection act, 1994 PA 451, MCL 324.8701 to

324.8717, and technical assistance in implementing conservation

grants available under the federal farm bill of 2008.

Sec. 607. (1) It is the intent of the legislature that the

department continue its activities in support of intercounty

drainage districts as provided in chapter 5 of the drain code of

1956, 1956 PA 40, MCL 280.101 to 280.106.

(2) The department shall work with representatives of

intercounty drainage districts to develop a mutually agreeable

method of funding department costs associated with the intercounty

drainage program.

AGRICULTURE DEVELOPMENT

Sec. 701. (1) The department shall establish and administer a

rural development value-added grant program. The program shall

promote the expansion of value-added agricultural production,

processing, and access within the state.

(2) The department shall award grants on a competitive basis

from the funds appropriated in part 1 for rural development value-

added grants. Grantees will be required to provide a cash match and

identify measurable project outcomes. Eligible grantees may

include, but are not limited to, individuals, partnerships,

cooperatives, private or public corporations, and local units of

government.

(3) A joint evaluation committee shall be selected by the

director with representatives with agriculture, business, and

economic development expertise. The joint evaluation committee

shall identify criteria, evaluate applications, and provide

recommendations to the director for final approval of grant awards.

(4) The department may expend money from the funds

appropriated in part 1 for the rural development value-added grants

for administering the program.

(5) The unexpended portion of the rural development value-

added grant program is considered a work project appropriation in

accordance with the management and budget act, 1984 PA 431, MCL

18.1101 to 18.1594.

(6) The department shall provide an interim report no later

than March 15 of the current fiscal year and year-end report no

later than September 30 of the current fiscal year to the senate

and house appropriations subcommittees on agriculture and rural

development and the senate and house fiscal agencies, including the

grantees, award amount, match funding, and project outcomes.

Sec. 706. Not later than April 1 of the current fiscal year,

the department shall provide a report to the senate and house

appropriations subcommittees on agriculture and rural development

and the senate and house fiscal agencies describing the

department's agriculture development and export market development

activities. The report shall identify grants awarded during the

prior fiscal year, including a description of federal or private

funds made available as a result of department activities.

Sec. 709. (1) Not later than April 1 of the current fiscal

year, the department shall provide a report to the senate and house

appropriations subcommittees on agriculture and rural development

and the senate and house fiscal agencies describing the activities

of the grape and wine industry council established under section

303 of the Michigan liquor control act of 1998, 1998 PA 58, MCL

436.1303.

(2) The report shall include all of the following:

(a) Council activities and accomplishments for the previous

fiscal year.

(b) Council expenditures for the previous fiscal year by

category of administration, industry support, research and

education grants, and promotion and consumer education.

results of research grant projects completed during the prior

fiscal year.

Sec. 711. (1) The department shall establish and administer

the food and agriculture industry growth initiative. The program

shall use a grant process to support research, education, and

technical assistance efforts focused on removing barriers and

leveraging opportunities identified by those in the food and

agriculture industry as critical to business development and growth

within the state.

(2) In addition to the funds appropriated in part 1, the

department of agriculture and rural development may receive and

expend funds received from Michigan strategic fund or the Michigan

economic development corporation for the food and agriculture

industry growth initiative.

(3) The director shall establish a consortium of interested

parties including those involved in the food and agriculture

industry sector to develop the program priorities described in

subsection (1).

(4) The department shall award grants from the funds

appropriated in part 1 or received from the Michigan strategic fund

or the Michigan economic development corporation under subsection

(2) for food and agriculture industry growth initiative grants.

Grantees will be required to identify measurable project outcomes.

(5) A joint evaluation committee selected by the director

shall evaluate applications and provide recommendations to the

director for final approval of grant awards.

(6) The department may expend money from the funds

appropriated in part 1 for the food and agriculture industry growth

initiative for administering the program.

FAIRS AND EXPOSITIONS

Sec. 801. All appropriations from the agriculture equine

industry development fund shall be spent on equine-related

purposes. No funds from the agriculture equine industry development

fund shall be expended for nonequine-related purposes without prior

approval of the legislature.

Sec. 802. All appropriations from the agriculture equine

industry development fund, except for the racing commission and

laboratory analysis program appropriations, shall be reduced

proportionately if revenues to the agriculture equine industry

development fund decline during the fiscal year ending September

30, 2013 to a level lower than the amounts appropriated in section

110.

Sec. 803. In the event there is no live thoroughbred race meet

in 2013 or 2014, all purse money and program money appropriated for

the thoroughbred industry in fiscal year 2012-2013 and fiscal year

2013-2014 shall be held in escrow for a period not to exceed 18

months, or until a thoroughbred race meet license is applied for

and granted by the Michigan gaming control board. In the event

there is no thoroughbred meet in 2013 or 2014, the purse pool

distribution order to be issued by the Michigan gaming control

board in 2014 that delineates distribution between the thoroughbred

meet that has been held at pinnacle race course and the joint

thoroughbred/quarterhorse meet held in Mt. Pleasant shall be the

same distribution formula as issued in 2013, with the thoroughbred

portion being held in escrow.

Sec. 804. The Michigan gaming control board shall use actual

expenditure data in determining the actual regulatory costs of

conducting racing dates and shall provide that data to the senate

and house of representatives appropriations subcommittees on

agriculture and rural development and general government and the

senate and house fiscal agencies by November 1 of the current

fiscal year. The Michigan gaming control board shall not be

reimbursed for more than the actual regulatory cost of conducting

race dates. If a certified horsemen's organization funds more than

the actual regulatory cost, the balance shall remain in the

agriculture equine industry development fund to be used to fund

subsequent race dates conducted by race meeting licensees with

which the certified horsemen's organization has contracts. If a

certified horsemen's organization funds less than the actual

regulatory costs of the additional horse racing dates, the Michigan

gaming control board shall reduce the number of future race dates

conducted by race meeting licensees with which the certified

horsemen's organization has contracts. Prior to the reduction in

the number of authorized race dates due to budget deficits, the

executive director of the Michigan gaming control board shall

provide notice to the certified horsemen's organizations with an

opportunity to respond with alternatives. In determining actual

costs, the Michigan gaming control board shall take into account

that each specific breed may require different regulatory

mechanisms.

Sec. 805. (1) The department shall establish and administer a

county fairs capital improvement grant program. The program shall

assist in the promotion of building improvements or other capital

improvements at county fairgrounds of the state.

(2) The department shall award grants on a competitive basis

to county fair organizations from the funds appropriated in part 1

for county fairs capital improvements grants. Grantees will be

required to provide a dollar-for-dollar cash match with grant

awards and identify measurable project outcomes.

(3) The department shall identify criteria, evaluate

applications, and provide recommendations to the director for final

approval of grant awards.

(4) The department may expend money from the funds

appropriated in part 1 for the county fairs capital improvement

grants for administering the program.

(5) The unexpended portion of the county fairs capital

improvement grant program is considered a work project

appropriation in accordance with the management and budget act,

1984 PA 431, MCL 18.1101 to 18.1594.

(6) The department shall provide a year-end report no later

than September 30 of the current fiscal year to the senate and

house appropriations subcommittees on agriculture and rural

development and the senate and house fiscal agencies, including the

grantees, award amount, match funding, and project outcomes.

CAPITAL OUTLAY

Sec. 1002. (1) The director shall allocate lump-sum

appropriations made in this act consistent with statutory

provisions and the purposes for which funds were appropriated.

Lump-sum allocations shall address priority program or facility

needs and may include, but are not limited to, design,

construction, remodeling and addition, special maintenance, major

special maintenance, energy conservation, and demolition.

(2) The state budget director may authorize that funds

appropriated for lump-sum appropriations shall be available for no

more than 3 fiscal years following the fiscal year in which the

original appropriation was made. Any remaining balance from

allocations made in this section shall lapse to the fund from which

it was appropriated pursuant to the lapsing of funds as provided in

the management and budget act, 1984 PA 431, MCL 18.1101 to 18.1594.

Sec. 1003. The appropriations in part 1 for capital outlay

shall be carried forward at the end of the fiscal year consistent

with the provisions of section 248 of the management and budget

act, 1984 PA 431, MCL 18.1248.

ONE-TIME BASIS ONLY APPROPRIATIONS

Sec. 1103. (1) The appropriations in part 1 for qualified

forest affidavit program are for the purpose of increasing the

knowledge of nonindustrial private forestland owners of sound

forest management practices and increasing the amount of commercial

timber production from those lands.

(2) The department shall work in partnership with stakeholder

groups and other state and federal agencies to increase the active

management of nonindustrial private forestland to foster the growth

of Michigan's timber product industry.

Sec. 1104. The appropriations in part 1 for an Ottawa County

water resources study shall utilize local participation and

partnership with private and public stakeholder resources

representing groundwater and public water supply resources within

Ottawa County where possible. The scope of the work of the study

will include test well monitoring of glacial and bedrock aquifers

for quantity and quality, and precise, calibrated flow models of

glacial and bedrock aquifers, modeling of different impact

scenarios based on usage, climate, and policies and solutions to

address declining groundwater levels with the findings to be made

available to both the department and the MDEQ.

PART 2A

PROVISIONS CONCERNING ANTICIPATED APPROPRIATIONS

FOR FISCAL YEAR 2014-2015

GENERAL SECTIONS

Sec. 1201. It is the intent of the legislature to provide

appropriations for the fiscal year ending on September 30, 2015 for

the line items listed in part 1. The fiscal year 2014-2015

appropriations are anticipated to be the same as those for fiscal

year 2013-2014, except that the line items will be adjusted for

changes in caseload and related costs, federal fund match rates,

economic factors, and available revenue. These adjustments will be