Michigan State Revolving Fund Program Changes

A package of bills moving through the state legislature would create changes to the current SRF/SWQIF programs. Here is the complete fiscal analysis.

Senate Bill 1158 would amend Part 197 (Great Lakes Water Quality Bond Implementation) of the Natural Resources and Environmental Protection Act to revise the allocation of money from the Great Lakes Water Quality Bond Fund. Part 197 requires the State Treasurer to transfer money in the Great Lakes Water Quality Bond Fund as follows:

  • — In aggregate, a maximum of $710.0 million must be deposited into the State Water Pollution Control Revolving Fund (SRF).
  • — In aggregate, a maximum of $290.0 million must be deposited into the Strategic Water Quality Initiatives Fund (SWQIF).

The bill would decrease the maximum amount transferred to the SRF to $90.0 million, and increase the maximum amount transferred to the SWQIF to $910.0 million.
Senate Bill 1155 (S-1) would amend Part 52 (Strategic Water Quality Initiatives) to do the
following:

  • — Include construction activities related to sewage treatment works, stormwater treatment, and nonpoint source projects among the activities eligible for a low-interest loan through the Strategic Water Quality Initiatives Loan Program, when identified through an asset management program or storm water project plan designed to protect water quality.
  • — Authorize the use of SWQIF money for grants to municipalities for sewage collection and treatment systems, and grants and loans for wetland mitigation banks.
  • — Require the Department of Environmental Quality (DEQ) to report annually to the Legislature on the use of funds under Part 52 that were  received from the Great Lakes Water Quality Bond Fund.

The grant program would have to provide grants of up to $1.0 million to cover a maximum of 90% of the costs incurred by a municipality. For grants of more than $1.0 million and less than $2.0 million, the program could not cover more than 75% of the municipality’s costs. A municipality could receive a 100% grant if it were a disadvantaged community as defined in Part 53 (which Senate Bill 1156 (S-1) would amend); a municipality in receivership or under a consent agreement under the Local Government and School District Fiscal Accountability Act; or a municipality with an appointed emergency financial manager or under a consent agreement under the Local Government Fiscal Responsibility Act. No municipality could receive more than $2.0 million in total grant assistance.

The bill would require the Michigan Municipal Bond Authority, in conjunction with the DEQ, to establish a wetland mitigation bank funding program that provided grants and loans totaling a maximum of $10.0 million to eligible municipalities. Up to $500,000 of the total could be used for grants. The funding could be used for this program as long as funds remained available.
These grants would have to provide assistance to municipalities to complete loan application requirements for funding from the wetland mitigation bank funding program or other sources of financing. Grants could not cover more than 90% of a municipality’s costs to complete an application for loan assistance.
Loans under this program would have to provide assistance to municipalities to establish a wetland mitigation bank.
Senate Bill 1156 (S-1) would amend Part 53 (Clean Water Assistance) to require the DEQ to award up to 50 points to a proposed sewage treatment works, stormwater treatment, or nonpoint source project in a disadvantaged community, when developing its priority list for SWQIF project funding.
“Disadvantaged community” would mean a municipality in which both of the following conditions are met:

  • — Users within the area served by a proposed sewage treatment works project or stormwater treatment project are directly assessed for the costs of construction.
  • — The median household income of the area served by the proposed project does not exceed 120% of the statewide median annual household income for Michigan.
  • Additionally, the municipality would have to demonstrate that more than 50% of the area served by a proposed project is identified as a poverty area by the U.S. Bureau of Census, or that the median annual household income of the area served by a proposed project does not exceed specified levels.

Senate Bill 1157 (S-1) would amend Part 54 (Safe Drinking Water Assistance) to do the following:

  • — Provide that formal enforcement action points awarded to a proposed project in the DEQ’s development of a priority list for public water supply project funding would be in addition to the maximum points otherwise allowed.
  • — Revise the criteria used to break a tie between projects with even scores.

The bill also would revise the definition of “disadvantaged community” in Part 54. The revised definition would be similar to the one Senate Bill 1156 (S-1) would add to Part 53, except the term would refer to a public water supply project rather than a sewage treatment works or stormwater treatment project. All of the bills are tie-barred to each other.

 

 

 

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Michigan State Revolving Fund Program Changes

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