HB-6009, As Passed House, November 29, 2012

SUBSTITUTE FOR

HOUSE BILL NO. 6009

A bill to establish certain programs that promote the

sustainability of land-based industries and support infrastructure

that benefits rural communities; to establish a fund and provide

for its use; and to prescribe the powers and duties of certain

state agencies and officials.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 1. This act shall be known and may be cited as the "rural

development fund act".

Sec. 2. As used in this act:

(a) "Board" means the rural development fund board established

in section 3.

(b) "Commission" means the commission of agriculture and rural

development.

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

(e) "Fund" means the rural development fund created in section

(f) "Land-based industries" means food and agriculture,

forestry, mining, oil and gas production, and tourism.

(g) "Local unit of government" means a county, city, township,

village, school district, or any authority composed of counties,

cities, townships, villages, or school districts, or any

combination of these entities.

(h) "Telecommunication facilities" means either or both of the

following:

(i) Telecommunication facilities as defined in section 2 of the

metropolitan extension telecommunications rights-of-way oversight

act, 2002 PA 48, MCL 484.3102.

(ii) Facilities used by a video service provider as defined in

section 1 of the uniform video services local franchise act, 2006

PA 480, MCL 484.3301.

Sec. 3. (1) The rural development fund board is created within

the department.

(2) The board shall be composed of 5 members as follows:

(a) The director, or his or her designee from within the

department, who shall provide the board with input and expertise

relating to this state's food and agriculture sector and economic

development.

(b) Four individuals appointed by the governor with the advice

and consent of the senate who have knowledge, skill, or experience

in land-based industries or fields of economic development or

infrastructure. In making the appointments under this subdivision,

the governor shall comply with all of the following:

(i) Two of the members shall be residents of the Upper

Peninsula and 2 of the members shall be residents of the Lower

Peninsula.

(ii) Not more than 2 of the members shall be members of the

same political party.

(iii) At least 1 of the members shall be a resident of the area

where funds are generated under section 5(2)(c).

(3) The members appointed under subsection (2)(b) shall serve

for terms of 4 years. Of members first appointed, 1 shall be

appointed for an initial term of 1 year, 1 shall be appointed for

an initial term of 2 years, and 2 shall be appointed for an initial

term of 3 years. Members shall serve until a successor is

appointed. A vacancy shall be filled for the balance of the

unexpired term in the same manner as the original appointment.

(4) A member of the board shall not receive compensation for

his or her services. However, a board member is entitled to

reimbursement for all expenses necessarily incurred in the

performance of his or her duties.

(5) The members of the board shall qualify by taking and

filing the oath of office.

(6) The board shall annually elect 1 of the members of the

board as chairperson of the board and other officers as considered

necessary by the board.

(7) The department shall provide the board with personnel

sufficient to perform the board's powers, duties, and functions

under law.

(8) A majority of the board members shall be required to

constitute a quorum. The business which the board may perform shall

be conducted at a meeting of the board held in compliance with the

open meetings act, 1976 PA 267, MCL 15.261 to 15.275. Public notice

of the time, date, and place of the meeting shall be given in the

manner required by that act.

(9) A member of the board appointed under subsection (2)(b)

may be removed by the governor for inefficiency, neglect of duty,

or malfeasance in office.

(10) The board shall carry out responsibilities as provided in

this act and as otherwise provided by law.

Sec. 4. (1) Notwithstanding section 3(1) of 1968 PA 317, MCL

15.323, members of the board are considered public servants subject

to 1968 PA 317, MCL 15.321 to 15.330, and public officers subject

to 1973 PA 196, MCL 15.341 to 15.348. A member of the board shall

discharge the duties of the position in a nonpartisan manner, in

good faith, in the best interests of this state, and with the

degree of diligence, care, and skill that a fiduciary would

exercise under similar circumstances in a like position.

(2) A member of the board shall not make or participate in

making or in any way attempt to use his or her position as a member

of the board to influence a matter before the board regarding a

grant, loan, loan guarantee, or other expenditure under this act to

his or her employer.

(3) A member, employee, or agent of the board shall not engage

in any conduct that constitutes a conflict of interest and shall

immediately advise the board in writing of the details of any

incident or circumstances that may present the existence of a

conflict of interest with respect to the performance of the board-

related work or duty of the member or agent of the board.

(4) A member of the board who has a conflict of interest

related to any matter before the board shall disclose the conflict

of interest before the board takes any action with respect to the

matter, which disclosure shall become a part of the record of the

board's official proceedings. The member with the conflict of

interest shall refrain from doing all of the following with respect

to the matter that is the basis of the conflict of interest:

(a) Voting in the board's proceedings related to the matter.

(b) Participating in the board's discussion of and

deliberation on the matter.

deliberation, and voting on the matter take place.

(d) Discussing the matter with any other board member.

(5) Failure of a member to comply with subsection (4)

constitutes malfeasance in office subject to removal under section

3(9).

Sec. 5. (1) The rural development fund is created within the

state treasury.

(2) The state treasurer may receive money or other assets from

any source for deposit into the fund, including, but not limited

to, all of the following:

(a) State or federal appropriations, transfers, or grants.

(b) Gifts, bequests, or donations.

extraction severance tax act.

(3) The state treasurer shall direct the investment of the

fund. The state treasurer shall have the same authority to invest

the assets of the fund as is granted to an investment fiduciary

under the public employee retirement system investment act, 1965 PA

314, MCL 38.1132 to 38.1140m. The state treasurer shall comply with

the divestment from terror act, 2008 PA 234, MCL 129.291 to

129.301, in making investments under this act. The state treasurer

shall credit to the fund interest and earnings from fund

investments.

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

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

(5) The department shall be the administrator of the fund for

auditing purposes.

(6) The department shall annually compile a report containing

an accounting of revenues and expenditures from the fund prepared

by the state treasurer. The report shall identify the interest and

earnings of the fund from the previous year, the investment

performance of the fund during the previous year, and the total

amount of appropriations from the fund during the previous year.

The report shall also include a status report for projects funded

under this act and the criteria used by the department for the

allocation of funds. The report shall be provided to the senate and

house of representatives appropriations committees and the standing

committees of the senate and house of representatives with

jurisdiction over issues pertaining to agriculture and rural

development.

Sec. 6. (1) The board shall develop criteria for evaluating

project proposals for funding with money from the fund. The

criteria shall include both of the following:

(a) A preference for projects in the region in which revenues

are generated as described in section 5(2)(c).

(b) Support for projects that address the expansion and

sustainability of land-based industries, worker training related to

land-based industries, and energy, transportation, communications,

water, and wastewater infrastructures to benefit rural communities.

(2) The board shall annually review the criteria developed

under subsection (1) and update the criteria as the board considers

necessary.

(3) The criteria developed under this section, as updated

under subsection (2), shall be posted on the department's website

and on printed materials in advance of any request for funding

proposals.

Sec. 7. (1) Money in the fund shall be expended, upon

appropriation, for all of the following:

(a) Grants, loans, and loan guarantees to fund projects

identified under subsection (3).

(b) Administrative expenses of the department in implementing

this act.

each state fiscal year may be transferred to the nonferrous

House Bill No. 6009 (H-1) as amended November 28, 2012

metallic mineral surveillance fund created in section 63217 of the

natural resources and environmental protection act, 1994 PA 451,

MCL 324.63217.

(2) The department shall solicit requests for project

proposals to be funded with money from the fund from individuals,

organizations, businesses, local units of government, federally

recognized tribes, and educational institutions.

(3) The department, with the advice of the board, shall

determine which projects should be funded with money from the fund,

based on the criteria established by the board under section 6.

However, money from the fund shall not be expended for [any of the

following:

(a) Projects that include telecommunication facilities owned or

operated by an educational institution or an affiliate, a local unit of

government, or any other governmental entity.

(b) The construction of telecommunication facilities or wireless telecommunication facilities in areas where broadband service of at least 3 mbps downstream and 768 kbps upstream is available.]

(4) Grants from the fund may be used to provide matching funds

for other available grants, as allowed by law.

Enacting section 1. This act does not take effect unless House

Bill No. 6008 of the 96th Legislature is enacted into law.