State management: funds; energy efficiency revolving fund; establish. Amends 1984 PA 431 (MCL 18.1101 - 18.1594) by adding sec. 475.
Summary
Senate Bill 576 would create an Energy Efficiency Revolving Fund within the state treasury and place it under the oversight of the Department of Management and Budget. The fund could receive money or other assets from any source, would retain its balance from year to year without lapsing to the general fund, and would be invested by the state treasurer with earnings credited back to the fund. The department would be responsible for coordinating state energy-efficiency project solicitations, setting project terms with participating agencies, and prioritizing projects that reduce Michigan’s carbon footprint.
The bill also directs the department to seek federal elective payments for eligible state projects under federal tax provisions, with those payments generally deposited into the revolving fund to support additional qualifying projects. An exception is made for elective payments tied to projects financed in whole or part with state building authority proceeds, which would go to the general fund instead. The bill requires annual reporting to the legislature on funded projects, including amounts awarded, the agencies involved, expected annual savings, and projected revenue returned to the fund.
Impact
The bill would amend the Management and Budget Act by adding a new section establishing a dedicated revolving fund for state energy-efficiency projects. It would create a continuing funding mechanism outside the general fund, authorize the state treasurer to manage and invest the fund, and require the department to administer project selection, contracting terms, and reporting. It also would require the state to pursue available federal elective payments for qualifying projects and channel those receipts back into the fund, with a limited exception for certain building-authority-financed projects. State agencies participating in the program could benefit from future project preference if prior projects generated federal elective payments.
Sentiment
The available voting history suggests the bill was controversial but ultimately advanced in the Senate, passing third reading 19-17. That narrow margin indicates divided support rather than broad bipartisan consensus. No committee transcript is available, so the public record here does not show detailed debate, but the vote count suggests the bill was viewed favorably by supporters of state energy-efficiency investment and less favorably by those skeptical of creating a new dedicated fund or expanding administrative responsibilities.
Contention
The main points of contention likely center on whether the state should create a new revolving fund outside the general fund, how much discretion the department should have in prioritizing projects, and whether the bill’s energy and carbon-reduction goals justify the administrative structure it creates. Another possible issue is the requirement that the department apply for federal elective payments and the treatment of those payments, especially the exception for projects financed with state building authority proceeds. The 10% cap on state administrative costs and the preference for agencies that previously generated elective payments may also have been debated as safeguards or as constraints on program flexibility.