Senate Bill 229 – Use of Trust Fund for Dredging

Summary:  The bill would allow the use of Michigan’s Natural Resources Trust Fund for dredging in local and recreational harbors.

Analysis:  SB 229 is one of many legislative responses to this problem, and would allow the Michigan Natural Resources Trust Fund (Trust Fund) to be used for dredging in local harbors. There is, however, serious debate about whether dredging is an appropriate and constitutional use of the Trust Fund.

The Michigan Constitution protects the Trust Fund from misuse of funds, and it allows expenditures only for land acquisition or “development of public recreation facilities.” The original idea behind the Trust Fund was to take royalty money from non-renewable mineral extractions and put that money towards recreational acquisitions and developments that would exist for future generations. Maintenance projects have never been an allowable use for Trust Fund dollars because they do not last for future generations. Many Trust Fund followers would argue the idea of development in the fund is to provide the money to allow for the initial infrastructure of a recreational facility.

Dredging, while extremely important for harbor usage by watercraft, is not the development of a “recreation facility,” but is used in the maintenance of that facility. It is a very similar concept to re-paving a parking lot, or re-chipping a trail. If a new harbor was being build, that would be the development of the initial infrastructure of a recreational facility and it would be very likely Trust Fund dollars could be spend on such a project.

Another issue is the sheer cost of dredging projects, which range from hundreds of thousands into the millions of dollars. Last year, the Trust Fund was only able to fund about half of the development applications that came in from local governments. As a policy, the Trust Fund Board puts a $300,000 cap on development grants for that very reason. Even just a few dredging projects every year could mean millions fewer dollars available for local governments.

There are also a number of funds available – such as the Michigan Waterways Fund and the federal Harbor Maintenance Trust Fund – which are designed to assist with dredging. Conversely, there are not many options available to local governments to assist with public recreational development and acquisitions.

Current Status: Passed from Senate Outdoor Recreation & Tourism committee on March 14, 2013. Awaiting full Senate action.

MUCC action: MUCC opposes

Sponsor: Senator John Moolenaar (R-Midland)

 

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