HOUSE BILL No. 4209
January 30, 1997, Introduced by Reps. DeVuyst, Jellema, McBryde, Middaugh, Rocca, Jansen, LeTarte and Voorhees and referred to the Committee on Transportation.
A bill to amend 1951 PA 51, entitled
"An act to provide for the classification of all public roads,
streets, and highways in this state, and for the revision of that
classification and for additions to and deletions from each clas-
sification; to set up and establish the Michigan transportation
fund; to provide for the deposits in the Michigan transportation
fund of specific taxes on motor vehicles and motor vehicle fuels;
to provide for the allocation of funds from the Michigan trans-
portation fund and the use and administration of the fund for
transportation purposes; to set up and establish the truck safety
fund; to provide for the allocation of funds from the truck
safety fund and administration of the fund for truck safety pur-
poses; to set up and establish the Michigan truck safety commis-
sion; to provide for the continuing review of transportation
needs within the state; to authorize the state transportation
commission, counties, cities, and villages to borrow money, issue
bonds, and make pledges of funds for transportation purposes; to
authorize counties to advance funds for the payment of deficien-
cies necessary for the payment of bonds issued under this act; to
provide for the limitations, payment, retirement, and security of
the bonds and pledges; to provide for appropriations and tax
levies by counties and townships for county roads; to authorize
contributions by townships for county roads; to provide for the
establishment and administration of the state trunk line fund,
critical bridge fund, comprehensive transportation fund, and cer-
tain other funds; to provide for the deposits in the state trunk
line fund, critical bridge fund, comprehensive transportation
fund, and certain other funds of money raised by specific taxes
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and fees; to provide for definitions of public transportation
functions and criteria; to define the purposes for which Michigan
transportation funds may be allocated; to provide for Michigan
transportation fund grants; to provide for review and approval of
transportation programs; to provide for submission of annual leg-
islative requests and reports; to provide for the establishment
and functions of certain advisory entities; to provide for condi-
tions for grants; to provide for the issuance of bonds and notes
for transportation purposes; to provide for the powers and duties
of certain state and local agencies and officials; to provide for
the making of loans for transportation purposes by the state
transportation department and for the receipt and repayment by
local units and agencies of those loans from certain specified
sources; and to repeal certain acts and parts of acts,"
by amending section 11 (MCL 247.661), as amended by 1993 PA 294.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 11. (1) A fund to be known as the state trunk line
2 fund is established and shall be set up and maintained in the
3 state treasury as a separate fund. The money deposited in the
4 state trunk line fund is appropriated to the state transportation
5 department for the following purposes in the following order of
6 priority:
7 (a) For the payment, but only from money restricted as to
8 use by section 9 of article IX of the state constitution of 1963,
9 of bonds, notes, or other obligations in the following order of
10 priority:
11 (i) For the payment of contributions required to be made by
12 the state highway commission or the state transportation commis-
13 sion under contracts entered into before July 18, 1979, under
14 Act No. 205 of the Public Acts of 1941, as amended, being sec-
15 tions 252.51 to 252.64 of the Michigan Compiled Laws 1941 PA
16 205, MCL 252.51 TO 252.64, which contributions have been pledged
17 before July 18, 1979, for the payment of the principal and
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1 interest on bonds issued under Act No. 205 of the Public Acts of
2 1941, as amended 1941 PA 205, MCL 252.51 TO 252.64, for the pay-
3 ment of which a sufficient sum is irrevocably appropriated.
4 (ii) For the payment of the principal and interest upon
5 bonds designated "State of Michigan, State Highway Commissioner,
6 Highway Construction Bonds, Series I", dated September 1, 1956,
7 in the aggregate principal amount of $25,000,000.00, issued pur-
8 suant to former Act No. 87 of the Public Acts of 1955 PA 87 and
9 the resolution of the state administrative board adopted August
10 6, 1956, for the payment of which a sufficient sum is irrevocably
11 appropriated.
12 (iii) For the payment of the principal and interest on bonds
13 issued under section 18b for transportation purposes other than
14 comprehensive transportation purposes as defined by law and the
15 payment of contributions of the state highway commission or state
16 transportation commission to be made pursuant to contracts
17 entered into under section 18d, which contributions are pledged
18 to the payment of principal and interest on bonds issued under
19 the authorization of section 18d and contracts executed pursuant
20 to that section. A sufficient portion of the fund is irrevocably
21 appropriated to pay, when due, the principal and interest on
22 bonds or notes issued under section 18b for purposes other than
23 comprehensive transportation purposes as defined by law, and to
24 pay the annual contributions of the state highway commission and
25 the state transportation commission as are pledged for the pay-
26 ment of bonds issued pursuant to contracts authorized by section
27 18d.
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1 (b) For the transfer of funds appropriated pursuant to
2 section 10(1)(b)(v) to the transportation economic development
3 fund, but the transfer shall be reduced each fiscal year by the
4 amount of debt service to be paid in that year from the state
5 trunk line fund for bonds, notes, or other obligations issued to
6 fund projects of the transportation economic development fund,
7 which amount shall be certified by the department.
8 (c) For the transfer of funds appropriated pursuant to sec-
9 tion 10(1)(b)(i) to the railroad grade crossing account in the
10 state trunk line fund for expenditure to meet the cost, in whole
11 or in part, of providing for the improvement, installation, and
12 retirement of new or existing safety devices or other rail grade
13 crossing improvements at rail grade crossings on public roads and
14 streets under the jurisdiction of the state, counties, or cities
15 and villages. Projects shall be selected for funding in accord-
16 ance with the following:
17 (i) Not more than 50% or less than 30% of these funds and
18 matched federal funds shall be expended for state trunk line
19 projects.
20 (ii) In prioritizing projects for these funds, in whole or
21 in part, the department shall consider train and vehicular traf-
22 fic volumes, accident history, traffic control device improvement
23 needs, and the availability of funding.
24 (iii) Consistent with the other requirements for these
25 funds, the first priority for funds deposited pursuant to this
26 subdivision for rail grade crossing improvements and retirement
27 shall be to match federal funds from the railroad-highway grade
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1 crossing improvement program or other comparable federal
2 programs.
3 (iv) If federal funds from the railroad-highway grade cross-
4 ing improvement program or other comparable federal programs have
5 been exhausted, funds deposited pursuant to this subdivision
6 shall be used to fund 100% of grade crossing projects that
7 receive the highest priority of unfunded projects pursuant to
8 criteria established by the department.
9 (v) State railroad grade crossing funds shall not be used,
10 either as 100% of project cost or to match federal
11 railroad-highway grade crossing improvement funds, for a crossing
12 that is determined by the department pursuant to the criteria
13 established by the department to be a lower priority than other
14 projects that have not yet been funded. However, if sufficient
15 funds are available, these state railroad grade crossing account
16 funds may be used for not more than 50% of a project's cost for a
17 crossing that is determined by the department pursuant to the
18 criteria established by the department to be a lower priority if
19 the balance of not less than 50% of the project's cost is pro-
20 vided by the road authority, railroad, or other sources.
21 (vi) The type of railroad grade crossing improvement,
22 installation, relocation, or retirement of grade crossing sur-
23 faces, active and passive traffic control devices, pavement mark-
24 ing, or other related work shall be eligible for these railroad
25 grade crossing account funds in the same manner as the project
26 type eligibility provided by the federal funds from the
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1 railroad-highway grade crossing improvement program, except for
2 the following:
3 (A) For new railroad crossings, these funds may be used for
4 the crossing surface, active and passive traffic control devices,
5 pavement marking, and other improvements necessitated by the new
6 crossing.
7 (B) These funds may be used for the modification, reloca-
8 tion, or modernization of railroad grade crossing facilities
9 necessitated by roadway improvement projects.
10 (C) If the department and the road authority with jurisdic-
11 tion over a public road or street crossing formally agree that
12 the grade crossing should be eliminated by permanent closing of
13 the public road or street, the road authority making the closing
14 shall receive $5,000.00 from the railroad grade crossing
15 account. In addition, any connecting road improvements necessi-
16 tated by the grade crossing closure are reimbursable on an actual
17 cost basis not to exceed $10,000.00 per crossing closed. The
18 physical removal of the crossing, roadway within railroad rights
19 of way and street termination treatment will be negotiated
20 between the road authority and railroad company. The funds pro-
21 vided to the road authority as a result of the crossing closure
22 will be credited to its account representing the same road or
23 street system on which the crossing is located.
24 (vii) This subdivision shall apply through September 30,
25 1998.
26 (d) For the total operating expenses of the state trunk line
27 fund for each fiscal year as appropriated by the legislature.
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1 (e) For the maintenance of state trunk line highways and
2 bridges.
3 (f) For the opening, widening, improving, construction, and
4 reconstruction of state trunk line highways and bridges, includ-
5 ing the acquisition of necessary rights of way and the work inci-
6 dental to that opening, widening, improving, construction, or
7 reconstruction. FUNDS USED FOR THE PURPOSES DESIGNATED BY THIS
8 SUBDIVISION SHALL BE USED FOR CONSTRUCTING TURNOFF LANES AS
9 DEFINED IN SUBSECTION (4)(B). Those sums in the state trunk line
10 fund not otherwise appropriated, distributed, determined, or set
11 aside by law shall be used for the construction or reconstruction
12 of the national system of interstate and defense highways,
13 referred to in this act as "the interstate highway system" to the
14 extent necessary to match federal aid funds as the federal aid
15 funds become available for that purpose; and, for the construc-
16 tion and reconstruction of the state trunk line system.
17 (g) The state transportation department may enter into
18 agreements with county road commissions and with cities and vil-
19 lages to perform work on a highway, road, or street. The agree-
20 ments may provide for the performance by any of the contracting
21 parties of any of the work contemplated by the contract including
22 engineering services and the acquisition of rights of way in con-
23 nection with the work, by purchase or condemnation by any of the
24 contracting parties in its own name, and for joint participation
25 in the costs, but only to the extent that the contracting parties
26 are otherwise authorized by law to expend money on the highways,
27 roads, or streets. The state transportation department also may
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1 contract with a county road commission, city, and village to
2 advance money to a county road commission, city, and village to
3 pay their costs of improving railroad grade crossings on the
4 terms and conditions agreed to in the contract. A contract may
5 be executed before or after the state transportation commission
6 borrows money for the purpose of advancing money to a county road
7 commission, city, or village, but the contract shall be executed
8 before the advancement of any money to a county road commission,
9 city, or village by the state transportation commission, and
10 shall provide for the full reimbursement of any advancement by a
11 county road commission, city, or village to the state transporta-
12 tion department, with interest, within 15 years after advance-
13 ment, from any available revenue sources of the county road com-
14 mission, city, or village or, if provided in the contract, by
15 deduction from the periodic disbursements of any money returned
16 by the state to the county road commission, city, or village.
17 (h) For providing inventories of supplies and materials
18 required for the activities of the state transportation
19 department. The state transportation department may purchase
20 supplies and materials for these purposes, with payment to be
21 made out of the state trunk line fund to be charged on the basis
22 of issues from inventory in accordance with the accounting and
23 purchasing laws of the state.
24 (2) Notwithstanding any other provision of this act, at
25 least 90% of state revenue appropriated annually to the state
26 trunk line fund less the amounts described in subdivisions (a) to
27 (i) shall be expended annually by the state transportation
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1 department for the maintenance of highways, roads, streets, and
2 bridges and for the payment of debt service on bonds, notes, or
3 other obligations described in subsection (1)(a) issued after
4 July 1, 1983, for the purpose of providing funds for the mainte-
5 nance of highways, roads, streets, and bridges. If an appropri-
6 ate certificate is filed under section 18e but only to the extent
7 necessary, this subsection shall not prohibit the use of any
8 amount of money restricted as to use by section 9 of article IX
9 of the state constitution of 1963 and deposited in the state
10 trunk line fund for the payment of debt service on bonds, notes,
11 or other obligations pledging for the payment thereof money
12 restricted as to use by section 9 of article IX of the state con-
13 stitution of 1963 and deposited in the state trunk line fund,
14 whenever issued, as specified under subsection (1)(a). The
15 amounts which are deducted from the state trunk line fund for the
16 purpose of the calculation required by this subsection are as
17 follows:
18 (a) Amounts expended for the purposes described in subsec-
19 tion (1)(a) for the payment of debt service on bonds, notes, or
20 other obligations issued before July 2, 1983.
21 (b) Amounts expended to provide the state matching require-
22 ment for projects on the national highway system and for the pay-
23 ment of debt service on bonds, notes, or other obligations issued
24 after July 1, 1983, for the purpose of providing funds for the
25 state matching requirements for projects on the national highway
26 system.
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1 (c) Amounts expended for the construction of a highway,
2 street, road, or bridge to 1 or more of the following or for the
3 payment of debt service on bonds, notes, or other obligations
4 issued after July 1, 1983, for the purpose of providing funds for
5 the construction of a highway, street, road, or bridge to 1 or
6 more of the following:
7 (i) A location for which a building permit has been obtained
8 for the construction of a manufacturing or industrial facility.
9 (ii) A location for which a building permit has been
10 obtained for the renovation of, or addition to, a manufacturing
11 or industrial facility.
12 (d) Amounts expended for capital outlay other than for high-
13 ways, roads, streets, and bridges or to pay debt service on
14 bonds, notes, or other obligations issued after July 1, 1983, for
15 the purpose of providing funds for capital outlay other than for
16 highways, roads, streets, and bridges.
17 (e) Amounts expended for the operating expenses of the state
18 transportation department other than the units of the department
19 performing the functions assigned on January 1, 1983 to the
20 bureau of highways.
21 (f) Amounts expended pursuant to contracts entered into
22 before January 1, 1983.
23 (g) Amounts expended for the purposes described in subsec-
24 tion (5).
25 (h) Amounts appropriated for deposit in the transportation
26 economic development fund and the rail grade crossing account
27 pursuant to section 10(1)(b)(i) and (1)(b)(v).
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1 (i) Upon the affirmative recommendation of the director of
2 the state transportation department and the approval by resolu-
3 tion of the state transportation commission, those amounts
4 expended for projects vital to the economy of the state, a
5 region, or local area or the safety of the public. The resolu-
6 tion shall state the cost of the project exempted from this
7 subsection.
8 (3) Notwithstanding any other provision of this act, the
9 state transportation department shall expend annually at least
10 90% of the federal revenue distributed to the credit of the state
11 trunk line fund in that year, except for federal revenue expended
12 for the purposes described in subsection (2)(b), (c), (f), and
13 (i) on the maintenance of highways, roads, streets, and bridges.
14 The requirement of this subsection shall be waived if compliance
15 would cause the state to be ineligible according to federal law
16 for federal revenue, but only to the extent necessary to make the
17 state eligible according to federal law for that revenue.
18 (4) As used in this section:
19 (a) "Maintenance" and "maintaining" means snow removal;
20 street cleaning and drainage; seal coating; patching and ordinary
21 repairs; erection and maintenance of traffic signs and markings;
22 safety projects; and the preservation, reconstruction, resurfac-
23 ing, restoration, and rehabilitation of highways, roads, streets,
24 and bridges. For the purposes of this section, maintenance and
25 maintaining shall not be limited to the repair and replacement of
26 a road but shall include maintaining the original intent of a
27 construction project. If traffic patterns indicate that this
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1 intent is no longer being met, the department may expend funds to
2 take corrective action and continue to fulfill its obligation of
3 maintaining the department's original objective for the construc-
4 tion project. However, maintenance and maintaining do not
5 include projects which increase the capacity of a highway facil-
6 ity to accommodate that part of the traffic having neither origin
7 nor destination within the local area.
8 (b) "Maintenance" and "maintaining" include widening less
9 than lane width; adding auxiliary turning AND TURNOFF lanes of
10 1/2 mile or less; adding auxiliary weaving, climbing, or speed
11 change lanes; and correcting substandard intersections. AS USED
12 IN THIS SUBDIVISION, "TURNOFF LANE" MEANS A LANE CONSTRUCTED ON A
13 STATE TRUNK LINE HIGHWAY THAT MAY BE USED BY A BUS OR OTHER VEHI-
14 CLE THAT IS REQUIRED BY LAW TO STOP AT A RAILROAD TRACK TO PULL
15 OFF OF THE RIGHT HAND LANE OF TRAFFIC FOR THE PURPOSE OF MAKING
16 THE REQUIRED STOP AND TO ALLOW OTHER VEHICLES NOT REQUIRED TO
17 STOP TO PROCEED PAST THE BUS OR OTHER VEHICLE AT A NORMAL RATE OF
18 SPEED FOR THAT HIGHWAY.
19 (c) "Maintenance" and "maintaining" do not include the
20 upgrading of aggregate surface roads to hard surface roads.
21 (d) "Maintenance" and "maintaining" include the portion of
22 the costs of the units of the department performing the functions
23 assigned on January 1, 1983, to the bureau of highways expended
24 for the purposes described in subdivisions (a) and (b).
25 (5) Notwithstanding any other provision of this section, the
26 state transportation department may loan money to county road
27 commissions, cities, and villages for paying capital costs of
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1 transportation purposes described in the second paragraph of
2 section 9 of article IX of the state constitution of 1963 from
3 the proceeds of bonds or notes issued pursuant to section 18b or
4 from the state trunk line fund. Loans made directly from the
5 state trunk line fund shall be made only after provision of funds
6 for the purposes specified in subsection (1)(a) to (f).
7 (6) County road commissions, cities, and villages may borrow
8 money from the proceeds of bonds or notes issued under section
9 18b or the state trunk line fund for the purposes set forth in
10 subsection (5) which shall be repayable, with interest, from 1 or
11 more of the following:
12 (a) The money to be received by the county road commission,
13 city, or village from the Michigan transportation fund, except to
14 the extent the money has been or may in the future be pledged by
15 contract in accordance with Act No. 205 of the Public Acts of
16 1941, being sections 252.51 to 252.64 of the Michigan Compiled
17 Laws 1941 PA 205, MCL 252.51 TO 252.64, or has been or may in
18 the future be pledged for the payment of the principal and inter-
19 est upon notes issued pursuant to Act No. 143 of the Public Acts
20 of 1943, being sections 141.251 to 141.254 of the Michigan
21 Compiled Laws 1943 PA 143, MCL 141.251 TO 141.254, or has been
22 or may in the future be pledged for the payment of principal and
23 interest upon bonds issued under section 18c or 18d, or has been
24 or may in the future be pledged for the payment of the principal
25 and interest upon bonds issued pursuant to Act No. 175 of the
26 Public Acts of 1952, being sections 247.701 to 247.707 of the
27 Michigan Compiled Laws 1952 PA 175, MCL 247.701 TO 247.707.
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1 (b) Any other legally available funds of the city, village,
2 or county road commission, other than the general funds of the
3 county.
4 (7) Loans made pursuant to subsection (5) if required by the
5 state transportation department may be payable by deduction by
6 the state treasurer, upon direction of the state transportation
7 department, from the periodic disbursements of any money returned
8 by the state under this act to the county road commission, city,
9 or village, but only after sufficient money has been returned to
10 the county road commission, city, or village to provide for the
11 payment of contractual obligations incurred or to be incurred and
12 principal and interest on notes and bonds issued or to be issued
13 under Act No. 205 of the Public Acts of 1941, Act No. 143 of the
14 Public Acts of 1943, Act No. 175 of the Public Acts of 1952 1941
15 PA 205, MCL 252.51 TO 252.64, 1943 PA 143, MCL 141.251 TO
16 141.254, 1952 PA 175, MCL 247.701 TO 247.707, or section 18c or
17 18d. The interest rates and payment schedules of any loans made
18 from the proceeds of bonds or notes issued pursuant to section
19 18b shall be established by the state transportation department
20 to conform as closely as practicable to the interest rate and
21 repayment schedules on the bonds or notes issued to make the
22 loans. However, the state transportation department may allow
23 for the deferral of the first payment of interest or principal on
24 the loans for a period of not to exceed 1 year after the respec-
25 tive first payment of interest or principal on the bonds or notes
26 issued to make the loans.
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1 (8) The amount borrowed by a county road commission, city,
2 or village pursuant to subsection (6) shall not be included in,
3 or charged against, any constitutional, statutory, or charter
4 debt limitation of the county, city, or village and shall not be
5 included in the determination of the maximum annual principal and
6 interest requirements of, or the limitations upon, the maximum
7 annual principal and interest incurred under Act No. 205 of the
8 Public Acts of 1941, Act No. 143 of the Public Acts of 1943, Act
9 No. 175 of the Public Acts of 1952 1941 PA 205, MCL 252.51 TO
10 252.64, 1943 PA 143, MCL 141.251 TO 141.254, 1952 PA 175, MCL
11 247.701 TO 247.707, or section 18c or 18d.
12 (9) The county road commission, city, or village shall not
13 be required to seek or obtain the approval of the electors, the
14 municipal finance commission or its successor agency, or, except
15 as provided in this subsection, the department of treasury to
16 borrow money pursuant to subsection (6). The borrowing shall not
17 be subject to the municipal finance act, Act No. 202 of the
18 Public Acts of 1943, being sections 131.1 to 139.3 of the
19 Michigan Compiled Laws, nor 1943 PA 202, MCL 131.1 TO 139.3, OR
20 to section 5(g) of Act No. 279 of the Public Acts of 1909, being
21 section 117.5 of the Michigan Compiled Laws 1909 PA 279, MCL
22 117.5. The state transportation department shall give at least
23 10 days' notice to the state treasurer of its intention to make a
24 loan under subsection (5). If the state treasurer gives notice
25 to the director of the state transportation department within 10
26 days of receiving the notice from the state transportation
27 department, that, based upon the then existing financial or
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1 credit situation of the county road commission, city, or village,
2 it would not be in the best interests of the state to make a loan
3 under subsection (5) to the county road commission, city, or vil-
4 lage, the loan shall not be made unless the state treasurer,
5 after a hearing, if requested by the affected county road commis-
6 sion, city, or village, subsequently gives notice to the director
7 of the state transportation department that the loan may be made
8 on the conditions that the state treasurer specifies.
9 (10) The state transportation commission may borrow money
10 and issue bonds and notes under, and pursuant to the requirements
11 of, section 18b to make loans to county road commissions, cities,
12 and villages for the purposes described in the second paragraph
13 of section 9 of article IX of the state constitution of 1963, as
14 provided in subsection (5). A single issue of bonds or notes may
15 be issued for the purposes specified in subsection (5) and for
16 the other purposes specified in section 18b.
17 (11) The director of the state transportation department,
18 after consultation with representatives of the interests of
19 county road commissions, cities, and villages, shall establish,
20 by intergovernmental communication, procedures for the implemen-
21 tation and administration of the loan program established under
22 subsections (5) to (10).
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