March 20, 2003, Introduced by Senators SWITALSKI, OLSHOVE, PATTERSON, BERNERO, EMERSON, GOSCHKA and GARCIA 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
classification; 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 transportation 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 purposes; to set up and establish the Michigan truck
safety commission; to establish certain standards for road
contracts for certain businesses; 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 deficiencies 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 certain 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 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
legislative requests and reports; to provide for the
establishment and functions of certain advisory entities; to
provide for conditions 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 acts and parts of
acts,"
by amending section 13 (MCL 247.663), as amended by 1999 PA 54.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 13. (1) The amount distributed to cities and villages
2 shall be returned to the treasurers of the cities and villages in
3 the manner, for the purposes, and under the terms and conditions
4 specified in this section. As used in this section, "population"
5 means the population according to the most recent statewide
6 federal census as certified at the beginning of the state fiscal
7 year, except that, if a municipality has been newly incorporated
8 since completion of the census, the population of the
9 municipality for purposes of the distribution of funds before
10 completion of the next census shall be the population as
11 determined by special federal census, if there is a special
12 federal census, and if not, by the population as determined by
13 the official census in connection with the incorporation, if
14 there is such a census and, if not, by a special state census to
15 be taken at the expense of the municipality by the secretary of
16 state pursuant to section 6 of the home rule city act, 1909 PA
1 279, MCL 117.6. The amount received by the newly incorporated
2 municipality shall be in place of any other direct distribution
3 of funds from the Michigan transportation fund. The population
4 of the newly incorporated municipality as determined under this
5 section shall be added to the total population of all
6 incorporated cities and villages in the state in computing the
7 amounts to be returned under this section to each municipality in
8 the state. Major street mileage, local street mileage, and
9 equivalent major mileage, if applicable, shall be determined by
10 the state transportation department before the next month for
11 which distribution is made following the effective date of
12 incorporation of a newly incorporated municipality.
13 (2) From the amount available for distribution to cities and
14 villages during each December, an amount equal to 0.7% of the
15 total amount returned to all cities and villages under
16 subsections (3) and (4) during the previous calendar year shall
17 be withheld. The amount withheld shall be used to partially
18 reimburse those cities and villages located in those counties
19 that are eligible for snow removal funds pursuant to section 12a
20 and that have costs for winter maintenance on major and local
21 streets that are greater than the statewide average. The
22 distributions shall be made annually during February and shall be
23 calculated separately for the major and local street systems but
24 may be paid in a combined warrant. The distribution to a city or
25 village shall be equal to 1/2 of its winter maintenance
26 expenditures after deducting the product of its total earnings
27 under subsections (3) and (4) multiplied by 2 times the average
1 municipal winter maintenance factor. Winter maintenance
2 expenditures shall be determined from the street financial
3 reports for the most current fiscal years ending before July 1.
4 A city or village that does not submit a street financial report
5 for the fiscal year ending before July 1 by the subsequent
6 December 31 shall be ineligible for the winter maintenance
7 payment that is to be based on that street financial report. The
8 average municipal winter maintenance factor shall be determined
9 annually by the state transportation department by dividing the
10 total expenditures of all cities and villages on winter
11 maintenance of streets and highways by the total amount earned by
12 all cities and villages under subsections (3) and (4) during the
13 12 months. If the sum of the distributions to be made under this
14 subsection exceeds the amount withheld, the distributions to each
15 eligible city and village shall be reduced proportionately. If
16 the sum is less than the amount withheld, the balance shall be
17 added to the amount available for distribution under subsections
18 (3) and (4) during the next month. The distributions shall be
19 for use on the major and local street systems respectively and
20 shall be subject to the same provisions as funds returned under
21 subsections (3) and (4).
22 (3) Seventy-five percent of the remaining amount to be
23 returned to the cities and villages, after deducting the amounts
24 withheld pursuant to subsection (2), shall be returned 60% in the
25 same proportion that the population of each bears to the total
26 population of all cities and villages, and 40% in the same
27 proportion that the equivalent major mileage in each bears to the
1 total equivalent major mileage in all cities and villages. As
2 used in this section, "equivalent major mileage" means the sum of
3 2 times the state trunk line mileage certified by the state
4 transportation department as of March 31 of each year, as being
5 within the boundaries of each city and village having a
6 population of 25,000 or more, plus the major street mileage in
7 each city and village, multiplied by the following factor:
8 1.0 for cities and villages of 2,000 or less population;
9 1.1 for cities and villages from 2,001 to 10,000 population;
10 1.2 for cities and villages from 10,001 to 20,000 population;
11 1.3 for cities and villages from 20,001 to 30,000 population;
12 1.4 for cities and villages from 30,001 to 40,000 population;
13 1.5 for cities and villages from 40,001 to 50,000 population;
14 1.6 for cities and villages from 50,001 to 65,000 population;
15 1.7 for cities and villages from 65,001 to 80,000 population;
16 1.8 for cities and villages from 80,001 to 95,000 population;
17 1.9 for cities and villages from 95,001 to 160,000 population;
1 2.0 for cities and villages from 160,001 to 320,000 population;
2 and for cities over 320,000 population, by a factor of 2.1
3 increased successively by 0.1 for each 160,000 population
4 increment over 320,000. The amount returned under this
5 subsection shall be used by each city and village for the
6 following purposes in the following order of priority:
7 (a) For the payment of contributions required to be made by a
8 city or village under the provisions of contracts previously
9 entered into under 1941 PA 205, MCL 252.51 to 252.64, which
10 contributions have been previously pledged for the payment of the
11 principal and interest on bonds issued under that act; or for the
12 payment of the principal and interest upon bonds issued by a city
13 or village pursuant to 1952 PA 175, MCL 247.701 to 247.707.
14 (b) Payment of obligations of the city or village on highway
15 projects undertaken by the city or village jointly with the state
16 transportation department.
17 (c) For the payment of principal and interest upon loans
18 received pursuant to section 11(7), to the extent other funds
19 have not been made available for that payment.
20 (d) For the maintenance, improvement, construction,
21 reconstruction, acquisition, and extension of the major street
22 system as defined by this act including the acquisition of a
23 necessary right of way for the system, work incidental to the
24 system, and an appurtenant roadside park or motor parkway, of the
25 city or village and for the payment of the principal and interest
26 on that portion of the city's or village's general obligation
1 bonds which are attributable to the construction or
2 reconstruction of the city's or village's major street system.
3 Not more than 5% per year of the funds returned to a city or
4 village by this subsection shall be expended for the maintenance,
5 improvement, or acquisition of appurtenant roadside parks and
6 motor parkways. Surplus funds may be expended for the
7 development, construction, or repair of off-street parking
8 facilities, and the construction or repair of street lighting.
9 (4) The remaining amount to be returned to incorporated
10 cities and villages shall be expended in each city or village for
11 the maintenance, improvement, construction, reconstruction,
12 acquisition, and extension of the local street system of the city
13 or village, as defined by this act, including the acquisition of
14 a necessary right of way for the system, work incidental to the
15 system, and subject to subsection (5), for the payment of the
16 principal and interest on that portion of the city's or village's
17 general obligation bonds which are attributable to the
18 construction or reconstruction of the city's or village's local
19 street system. The amount returned under this subsection shall
20 be returned to the cities and villages 60% in the same proportion
21 that the population of each bears to the total population of all
22 incorporated cities and villages in the state, and 40% in the
23 same proportion that the total mileage of the local street system
24 of each bears to the total mileage in the local street systems of
25 all cities and villages of the state. The payment of the
26 principal and interest upon bonds issued by a city or village
27 pursuant to 1952 PA 175, MCL 247.701 to 247.707, and after that
1 payment, the payment of debt service on loans received under
2 section 11(7), shall have priority in the expenditure of money
3 returned under this subsection.
4 (5) Money distributed to each city and village for the
5 maintenance and improvement of its local street system under this
6 act represents the total responsibility of the state for local
7 street system support. Funds
distributed from the Michigan
8 transportation fund
shall not be expended for construction
9 purposes on city and
village local streets except to the extent
10 matched from local
revenues including other money returned to a
11 city or village by the
state under the state constitution of 1963
12 and statutes of the
state, from funds that can be raised by
13 taxation in cities and
villages for street purposes within the
14 limitations of the
state constitution of 1963 and statutes of the
15 state, from special
assessments, or from any other source. This
16 subsection does not apply to section 11b.
17 (6) Money returned under this section to a city or village
18 shall be expended on the major and local street systems of that
19 city or village. However, the first priority shall be the major
20 street system. Money returned for expenditure on the major
21 street system may be
expended on the local street system. in an
22 amount equal to the
amount of local revenues, as provided in
23 subsection (5),
expended by the city or village on the major
24 street system or on
state trunk line highways, and to To
the
25 extent that that amount of major street money is not transferred
26 for expenditure on the local street system in that year, major
27 street money received during the next succeeding 2 years may be
1 transferred for expenditure on the local system until the amount
2 so authorized for transfer is fully expended. If a city
or
3 village transfers more than 25% of its major street funding for
4 the local street system, the city or village shall adopt a
5 resolution with a copy to the department setting forth all of the
6 following:
7 (a) A list of the major streets in that city or village.
8 (b) A statement that the city or village is adequately
9 maintaining its major streets.
10 (c) The dollar amount of the transfer.
11 (d) The local streets to be funded with the transfer.
12 (7) Not more than 10% per year of all of the funds returned
13 to a city or village from any source for the purposes of this
14 section may be expended for administrative expenses. As used in
15 this subsection, "administrative expenses" means those expenses
16 that are not assigned including, but not limited to, specific
17 road construction or maintenance projects and are often referred
18 to as general or supportive services. Administrative expenses
19 shall not include net equipment expense, net capital outlay, debt
20 service principal and interest, and payments to other state or
21 local offices that are assigned, but not limited to, specific
22 road construction projects or maintenance activities. A city or
23 village which in a year expends more than 10% for administrative
24 expenses shall be subject to section 14(5).
25 (8) In each city and village to which funds are returned
26 under this section, the responsibility for street improvement,
27 maintenance, and traffic operation work, and the development,
1 construction, or repair of off-street parking facilities and
2 construction or repair of street lighting shall be coordinated by
3 a single administrator to be designated by the governing body who
4 shall be responsible for and shall represent the municipality in
5 transactions with the state transportation department pursuant to
6 this act.
7 (9) Cities and villages may provide for consolidated street
8 administration. A city or a village may enter into an agreement
9 with other cities or villages, the county road commission, or
10 with the state transportation commission for the performance of
11 street or highway work on a road or street within the limits of
12 the city or village or adjacent to the city or village. The
13 agreement may provide for the performance by any of the
14 contracting parties of the work contemplated by the contracts
15 including services and acquisition of rights of way, by purchase
16 or condemnation by any of the contracting parties in its own
17 name. The agreement may provide for joint participation in the
18 costs if appropriate.
19 (10) Interest earned on funds returned to a city or a village
20 for purposes provided in this section shall be credited to the
21 appropriate street fund.
22 (11) In addition to the financial compliance audits required
23 by law, the department of treasury shall conduct performance
24 audits and make investigations of the disposition of all state
25 funds received by cities and villages for transportation purposes
26 to determine compliance with the terms and conditions of this
27 act. Performance audits shall be conducted according to
1 government auditing standards issued by the United States general
2 accounting office. The department of treasury shall provide
3 notice to cities and villages of the standards to be used for
4 audits under this subsection prior to the fiscal year in which
5 the audit is conducted. The department shall notify cities and
6 villages of any subsequent changes to the standards. Cities and
7 villages shall make available to the department of treasury the
8 pertinent records for the audit.