June 12, 2008, Introduced by Senators BARCIA, ALLEN, KAHN and GLEASON 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,
local 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 sections 10 and 11 (MCL 247.660 and 247.661), section
10 as amended by 2007 PA 210 and section 11 as amended by 2002 PA
639.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 10. (1) A fund to be known as the Michigan transportation
fund is established and shall be set up and maintained in the state
treasury as a separate fund. Money received and collected under the
motor fuel tax act, 2000 PA 403, MCL 207.1001 to 207.1170, except a
license fee provided in that act, and a tax, fee, license, and
other money received and collected under sections 801 to 810 of the
Michigan vehicle code, 1949 PA 300, MCL 257.801 to 257.810, except
a truck safety fund fee provided in section 801(1)(k) of the
Michigan vehicle code, 1949 PA 300, MCL 257.801, and money received
under the motor carrier act, 1933 PA 254, MCL 475.1 to 479.43,
shall be deposited in the state treasury to the credit of the
Michigan transportation fund. In addition, income or profit derived
from the investment of money in the Michigan transportation fund
shall be deposited in the Michigan transportation fund. Except as
provided in this act, no other money, whether appropriated from the
general fund of this state or any other source, shall be deposited
in the Michigan transportation fund. Except as otherwise provided
in this section, the legislature shall appropriate funds for the
necessary expenses incurred in the administration and enforcement
of the motor fuel tax act, 2000 PA 403, MCL 207.1001 to 207.1170,
the motor carrier act, 1933 PA 254, MCL 475.1 to 479.43, and
sections 801 to 810 of the Michigan vehicle code, 1949 PA 300, MCL
257.801 to 257.810. Funds appropriated for necessary expenses shall
be based upon established cost allocation methodology that reflects
actual costs. Appropriations for the necessary expenses incurred by
the department of state in administration and enforcement of
sections 801 to 810 of the Michigan vehicle code, 1949 PA 300, MCL
257.801 to 257.810, shall be made from the Michigan transportation
fund and from funds in the transportation administration collection
fund created in section 810b of the Michigan vehicle code, 1949 PA
300, MCL 257.810b. Appropriations from the Michigan transportation
fund for the necessary expenses incurred by department of state in
administration and enforcement of sections 801 to 810 of the
Michigan vehicle code, 1949 PA 300, MCL 257.801 to 257.810, shall
not exceed $20,000,000.00 per state fiscal year except for the
fiscal year ending September 30, 2006. For the fiscal year ending
September 30, 2006, the legislature may appropriate funds in excess
of $20,000,000.00 from the Michigan transportation fund for all
incremental additional expenses incurred by the department of state
in enforcing sections 801 to 810 of the Michigan vehicle code, 1949
PA 300, MCL 257.801 to 257.810, that arise because of the
replacement of standard design registration license plates as
provided in section 224 of the Michigan vehicle code, 1949 PA 300,
MCL 257.224. All money in the Michigan transportation fund is
apportioned and appropriated in the following manner:
(a) Not more than $3,000,000.00 as may be annually
appropriated each fiscal year to the state trunk line fund for
subsequent deposit in the rail grade crossing account.
(b) Not more than $12,000,000.00 as may be annually
appropriated each fiscal year to the state trunk line fund for
subsequent deposit in the grade crossing surface account.
(c) (b)
Not less than $3,000,000.00 each
year to the local
bridge fund established in subsection (5) for the purpose of
payment of the principal, interest, and redemption premium on any
notes or bonds issued by the state transportation commission under
former section 11b or subsection (10).
(d) (c)
Revenue from 3 cents of the tax
levied under section
8(1)(a) of the motor fuel tax act, 2000 PA 403, MCL 207.1008, to
the state trunk line fund, county road commissions, and cities and
villages
in the percentages provided in subdivision (i) (k).
(e) (d)
Until September 30, 2004, all of
the revenue from 1
cent of the tax levied under section 8(1)(a) of the motor fuel tax
act, 2000 PA 403, MCL 207.1008, to the state trunk line fund for
repair of state bridges under section 11. Beginning October 1, 2004
and continuing through September 30, 2005, 3/4 of the revenue from
1 cent of the tax levied under section 8(1)(a) of the motor fuel
tax act, 2000 PA 403, MCL 207.1008, shall be appropriated to the
state trunk line fund for the repair of state bridges under section
11, and 1/4 of the revenue from 1 cent of the tax levied under
section 8(1)(a) of the motor fuel tax act, 2000 PA 403, MCL
207.1008, shall be appropriated to the local bridge fund created in
subsection (5) for distribution only to cities, villages, and
county road commissions. Beginning October 1, 2005, 1/2 of the
revenue from 1 cent of the tax levied under section 8(1)(a) of the
motor fuel tax act, 2000 PA 403, MCL 207.1008, shall be
appropriated to the state trunk line fund for the repair of state
bridges under section 11, and 1/2 of the revenue from 1 cent of the
tax levied under section 8(1)(a) of the motor fuel tax act, 2000 PA
403, MCL 207.1008, shall be appropriated to the local bridge fund
created in subsection (5) for distribution only to cities,
villages, and county road commissions.
(f) (e)
$43,000,000.00 to the state trunk
line fund for debt
service costs on state of Michigan projects.
(g) (f)
Except as provided in subsection
(4), 10% to the
comprehensive transportation fund for the purposes described in
section 10e.
(h) (g)
$5,000,000.00 to the local bridge
fund established in
subsection (5) for distribution only to the local bridge advisory
board, the regional bridge councils, cities, villages, and county
road commissions.
(i) (h)
$36,775,000.00 to the state trunk
line fund for
subsequent deposit in the transportation economic development fund,
and, as of September 30, 1997, with first priority for allocation
to debt service on bonds issued to fund transportation economic
development fund projects. In addition, beginning October 1, 1997,
$3,500,000.00 is appropriated from the Michigan transportation fund
to the state trunk line fund for subsequent deposit in the
transportation economic development fund to be used for economic
development road projects in any of the targeted industries
described in section 9(1)(a) of 1987 PA 231, MCL 247.909.
(j) (i)
Not less than $33,000,000.00 as may
be annually
appropriated each fiscal year to the local program fund created in
section 11e.
(k) (j)
The balance of the Michigan transportation
fund as
follows, after deduction of the amounts appropriated in
subdivisions
(a) through (i) (j) and section 11b:
(i) 39.1% to the state trunk line fund for the purposes
described in section 11.
(ii) 39.1% to the county road commissions of the state.
(iii) 21.8% to the cities and villages of the state.
(2) The money appropriated pursuant to this section shall be
used for the purposes as provided in this act and any other
applicable act. Subject to the requirements of section 9b, the
department shall develop programs in conjunction with the Michigan
state chamber of commerce and the Michigan minority business
development council to assist small businesses, including those
located in enterprise zones and those located in empowerment zones
as determined under federal law, as defined by law in becoming
qualified to bid.
(3) Thirty-one and one-half percent of the funds appropriated
to this state from the federal government pursuant to 23 USC 157,
commonly known as minimum guarantee funds, shall be allocated to
the transportation economic development fund, if such an allocation
is consistent with federal law. These funds shall be distributed
16-1/2% for development projects for rural counties as defined by
law and 15% for capacity improvement or advanced traffic management
systems in urban counties as defined by law. Federal funds
allocated for distribution under this section shall be eligible for
obligation and use by all recipients as defined by the
transportation equity act for the 21st century, Public Law 105-178.
(4) For the fiscal year beginning October 1, 2003 only, the
apportionment of 10% of Michigan transportation fund money to the
comprehensive
transportation fund as provided in subsection (1)(f)
(1)(g) shall be reduced by $10,000,000.00 and the $10,000,000.00
shall be transferred to the state trunk line fund for capacity
improvements to state trunk line highways.
(5) A fund to be known as the local bridge fund is established
and is set up and maintained in the state treasury as a separate
fund. The money appropriated to the local bridge fund and the
interest accruing to that fund shall be expended for the local
bridge program. The purpose of the fund is to provide financial
assistance to highway authorities for the preservation,
improvement, or reconstruction of existing bridges or for the
construction of bridges to replace existing bridges in whole or
part. The money in the local bridge fund is not subject to section
12(15) or 13(5). The local bridge advisory board is created and
shall consist of 6 voting members appointed by the state
transportation commission and 2 nonvoting members appointed by the
state transportation department. The board shall include 3 members
from the county road association of Michigan, 1 member who
represents counties with populations 65,000 or greater, 1 member
who represents counties with populations greater than 30,000 and
less than 65,000, and 1 member who represents counties with
populations of 30,000 or less. Three members shall be appointed
from the Michigan municipal league, 1 member who represents cities
with a population 75,000 or greater, 1 member who represents cities
with a population less than 75,000, and 1 member who represents
villages. Each organization with voting rights shall submit a list
of nominees in each population category to the state transportation
commission. The state transportation commission shall make the
appointments from the lists submitted under this subsection. Names
shall be submitted within 45 days after October 1, 2004. The state
transportation commission shall make the appointments by January
30, 2005. Voting members shall be appointed for 2 years. The
chairperson of the board shall be selected from among the voting
members of the board. In addition to the 2 nonvoting members, the
department shall provide qualified administrative staff and
qualified technical assistance to the board.
(6) Beginning October 1, 2005, no less than 5% and no more
than 15% of the funds received in the local bridge fund may be used
for critical repair of large bridges and emergencies as determined
by the local bridge advisory board. Beginning October 1, 2005,
funds remaining after the funds allocated for critical large bridge
repair and emergencies are deducted shall be distributed by the
board to the regional bridge councils created under this section.
One regional council shall be formed for each department of
transportation region as those regions exist on October 1, 2004.
The regional councils shall consist of 2 members of the county road
association of Michigan from counties in the region, 2 members of
the Michigan municipal league from cities and villages in the
region, and 1 member of the state transportation department in each
region. The members of the state transportation department shall be
nonvoting members who shall provide qualified administrative staff
and qualified technical assistance to the regional councils.
(7) Beginning October 1, 2005, funds in the local bridge fund
after deduction of the amounts set aside for critical repair of
large bridges and emergency repairs shall be distributed among the
regional bridge councils according to all of the following ratios,
which shall be assigned a weight expressed as a percentage as
determined by the board, with each ratio receiving no greater than
a 50% weight and no less than a 25% weight:
(a) A ratio with a numerator that is the total number of local
bridges in the region and a denominator that is the total number of
local bridges in this state.
(b) A ratio with a numerator that is the total local bridge
deck area in the region and a denominator that is the total local
bridge deck area in this state.
(c) A ratio with a numerator that is the total amount of
structurally deficient local bridge deck area in the region and a
denominator that is the total amount of structurally deficient
local bridge deck area in this state.
(8) Beginning October 1, 2005, the regional bridge councils
shall allocate the funds received from the board for the
preservation, improvement, and reconstruction of existing bridges
or for the construction of bridges to replace existing bridges in
whole or in part in each region.
(9) Beginning January 1, 2007 and each January after 2007, the
department shall submit a report to the chair and the minority
vice-chair of the appropriations committees of the senate and the
house of representatives, and to the standing committees on
transportation of the senate and the house of representatives, on
all of the following activities for the previous state fiscal year:
(a) A listing of how much money was dedicated for emergency
and large bridge repair.
(b) A listing of what emergency and large bridge repair
projects were funded.
(c) The actual weights used in the calculation required under
subsection (7).
(d) A listing of the total money distributed to each region.
(e) A listing of what specific projects were funded pursuant
to subsection (8).
(10) The state transportation commission shall borrow money
and issue notes or bonds in an amount of not less than
$30,000,000.00 to supplement the funding provided for the local
bridge program under subsection (6). The bonds or notes issued
pursuant to this subsection may be issued by the commission for any
purpose for which other local bridge funds may be used under this
section. The bonds or notes authorized by this subsection shall be
issued by resolution of the state transportation commission
consistent with the requirements of section 18b.
(11) The state transportation department shall promulgate
rules pursuant to the administrative procedures act of 1969, 1969
PA 306, MCL 24.201 to 24.328, governing the administration of the
local bridge program. The rules shall set forth the eligibility
criteria for financial assistance under the program and other
matters related to the program that the department considers
necessary and desirable. The department shall take into
consideration the availability of federal aid and other financial
resources of the highway authority responsible for the bridge, the
importance of the bridge to the highway, road, or street network,
and the condition of the existing bridge.
(12) Beginning October 1, 2004, the revenue appropriated to
the
local bridge fund pursuant to subsection (1)(d) (1)(e) shall
be
distributed only to the local bridge advisory board, the regional
bridge councils, cities, villages, and county road commissions.
(13) Beginning October 1, 2008, the regional bridge councils
shall determine what bridge projects are selected for funding from
the local bridge fund created in subsection (5) and shall make a
list of selected projects available to interested parties in the
region. A determination that a bridge project is selected for
funding in a given fiscal year is not approval to disburse the
funds.
(14) Beginning October 1, 2008, a county road commission,
city, or village may implement a bridge project if the bridge
project has been selected for funding and is included in the
appropriate regional bridge council's current multiyear bridge plan
for the local bridge program but the regional bridge council has
not allocated funds to the bridge project for the fiscal year that
the bridge project is on the current multiyear bridge plan. A
county road commission, city, or village may borrow funds to
implement a project that has been selected for funding and is
included in the appropriate regional bridge council's current
multiyear bridge plan but has not been allocated funds by the
regional bridge council. Based on available local bridge funds,
when a bridge project that was implemented with borrowed funds is
allocated funding in a subsequent fiscal year, the funding shall
only be used to repay the amount approved by the multiyear bridge
plan when the funds were borrowed. To be eligible for repayment of
the amount borrowed, a bridge project that has been implemented
with borrowed funds shall be administered through the department's
local bridge program.
Sec. 11. (1) A fund to be known as the state trunk line fund
is established and shall be set up and maintained in the state
treasury as a separate fund. The money deposited in the state trunk
line fund is appropriated to the state transportation department
for the following purposes in the following order of priority:
(a) For the payment, but only from money restricted as to use
by section 9 of article IX of the state constitution of 1963, of
bonds, notes, or other obligations in the following order of
priority:
(i) For the payment of contributions required to be made by the
state highway commission or the state transportation commission
under contracts entered into before July 18, 1979, under 1941 PA
205, MCL 252.51 to 252.64, which contributions have been pledged
before July 18, 1979, for the payment of the principal and interest
on bonds issued under 1941 PA 205, MCL 252.51 to 252.64, for the
payment of which a sufficient sum is irrevocably appropriated.
(ii) For the payment of the principal and interest upon bonds
designated "State of Michigan, State Highway Commissioner, Highway
Construction Bonds, Series I", dated September 1, 1956, in the
aggregate principal amount of $25,000,000.00, issued pursuant to
former 1955 PA 87 and the resolution of the state administrative
board adopted August 6, 1956, for the payment of which a sufficient
sum is irrevocably appropriated.
(iii) For the payment of the principal and interest on bonds
issued under section 18b for transportation purposes other than
comprehensive transportation purposes as defined by law and the
payment of contributions of the state highway commission or state
transportation commission to be made pursuant to contracts entered
into under section 18d, which contributions are pledged to the
payment of principal and interest on bonds issued under the
authorization of section 18d and contracts executed pursuant to
that section. A sufficient portion of the fund is irrevocably
appropriated to pay, when due, the principal and interest on bonds
or notes issued under section 18b for purposes other than
comprehensive transportation purposes as defined by law, and to pay
the annual contributions of the state highway commission and the
state transportation commission as are pledged for the payment of
bonds issued pursuant to contracts authorized by section 18d.
(b) For the transfer of funds appropriated pursuant to section
10(1)(g)
10(1)(i) to the transportation economic development fund,
but the transfer shall be reduced each fiscal year by the amount of
debt service to be paid in that year from the state trunk line fund
for bonds, notes, or other obligations issued to fund projects of
the transportation economic development fund, which amount shall be
certified by the department.
(c) For the transfer of funds appropriated pursuant to section
10(1)(a) to the railroad grade crossing account in the state trunk
line fund for expenditure for rail grade crossing improvement
purposes at rail grade crossings on public roads and streets under
the jurisdiction of the state, counties, cities, or villages.
Projects shall be selected for funding in accordance with the
following:
(i) Not more than 50% or less than 30% of these funds and
matched federal funds shall be expended for state trunk line
projects.
(ii) In prioritizing projects for these funds, in whole or in
part, the department shall consider train and vehicular traffic
volumes, accident history, traffic control device improvement
needs, and the availability of funding.
(iii) Consistent with the other requirements for these funds,
the first priority for funds deposited pursuant to this subdivision
for rail grade crossing improvements and retirement shall be to
match federal funds from the railroad-highway grade crossing
improvement program or other comparable federal programs if a match
is required under federal law.
(iv) If the department and the road authority with jurisdiction
over the crossing formally agree that the grade crossing should be
eliminated by permanent closing of the public road or street, the
physical removal of the crossing, roadway within railroad rights of
way and street termination treatment will be negotiated between the
road authority and railroad company. The funds provided to the road
authority as a result of the crossing closure will be credited to
its account representing the same road or street system on which
the crossing is located and shall be used for any transportation
purpose within that road authority's jurisdiction.
(d) For the transfer of funds appropriated pursuant to section
10(1)(b) to the grade crossing surface account in the state trunk
line fund for expenditure for rail grade crossing surface
improvement purposes at rail grade crossings on public roads and
streets under the jurisdiction of the state, counties, cities, or
villages. Projects shall be selected for funding in accordance with
the following:
(i) Not more than 40% of these funds shall be expended for
projects on state trunk lines.
(ii) In prioritizing projects on state trunk lines, the
department shall consider vehicular traffic volumes, relative
crossing surface condition, and the availability of funding.
(iii) In prioritizing projects on roadways under the
jurisdiction of counties, cities, or villages, the department shall
consider vehicular traffic volumes, relative crossing surface
condition, the ability of the railroad and local road authority to
make coordinated improvements, and the availability of funding.
(iv) For projects on roadways under the jurisdiction of
counties, cities, or villages, the grade crossing surface account
shall fund 60% of the project cost, with the remaining 40% funded
by the railroad company.
(v) For projects on state trunk lines, the grade crossing
surface account shall fund up to 100% of the project cost.
(vi) For projects on roadways under the jurisdiction of
counties, cities, or villages, funding under the grade crossing
surface account will be limited to those items of work normally the
responsibility of the railroad under section 309 of the railroad
code of 1993, 1993 PA 354, MCL 462.309. Maintenance of the roadway
approaches to the crossing will continue to be the responsibility
of the party with jurisdiction over that roadway.
(e) (d)
For the total operating expenses of
the state trunk
line fund for each fiscal year as appropriated by the legislature.
(f) (e)
For the preservation of state trunk
line highways and
bridges.
(g) (f)
For the opening, widening,
improving, construction,
and reconstruction of state trunk line highways and bridges,
including the acquisition of necessary rights of way and the work
incidental to that opening, widening, improving, construction, or
reconstruction. Those sums in the state trunk line fund not
otherwise appropriated, distributed, determined, or set aside by
law shall be used for the construction or reconstruction of the
national system of interstate and defense highways, referred to in
this act as "the interstate highway system" to the extent necessary
to match federal aid funds as the federal aid funds become
available for that purpose; and, for the construction and
reconstruction of the state trunk line system.
(h) (g)
The state transportation department
may enter into
agreements with county road commissions and with cities and
villages to perform work on a highway, road, or street. The
agreements may provide for the performance by any of the
contracting parties of any of the work contemplated by the contract
including engineering services and the acquisition of rights of way
in connection with the work, by purchase or condemnation by any of
the contracting parties in its own name, and for joint
participation in the costs, but only to the extent that the
contracting parties are otherwise authorized by law to expend money
on the highways, roads, or streets. The state transportation
department also may contract with a county road commission, city,
and village to advance money to a county road commission, city, and
village to pay their costs of improving railroad grade crossings on
the terms and conditions agreed to in the contract. A contract may
be executed before or after the state transportation commission
borrows money for the purpose of advancing money to a county road
commission, city, or village, but the contract shall be executed
before the advancement of any money to a county road commission,
city, or village by the state transportation commission, and shall
provide for the full reimbursement of any advancement by a county
road commission, city, or village to the state transportation
department, with interest, within 15 years after advancement, from
any available revenue sources of the county road commission, city,
or village or, if provided in the contract, by deduction from the
periodic disbursements of any money returned by the state to the
county road commission, city, or village.
(i) (h)
For providing inventories of
supplies and materials
required for the activities of the state transportation department.
The state transportation department may purchase supplies and
materials for these purposes, with payment to be made out of the
state trunk line fund to be charged on the basis of issues from
inventory in accordance with the accounting and purchasing laws of
this state.
(2) Notwithstanding any other provision of this act, at least
90% of state revenue appropriated annually to the state trunk line
fund less the amounts described in subdivisions (a) to (i) shall be
expended annually by the state transportation department for the
preservation of highways, roads, streets, and bridges and for the
payment of debt service on bonds, notes, or other obligations
described in subsection (1)(a) issued after July 1, 1983, for the
purpose of providing funds for the preservation of highways, roads,
streets, and bridges. Of the amounts appropriated for state trunk
line projects, the department shall, where possible, secure
warranties of not less than 5-year full replacement guarantee for
contracted construction work. If an appropriate certificate is
filed under section 18e but only to the extent necessary, this
subsection shall not prohibit the use of any amount of money
restricted as to use by section 9 of article IX of the state
constitution of 1963 and deposited in the state trunk line fund for
the payment of debt service on bonds, notes, or other obligations
pledging for the payment thereof money restricted as to use by
section 9 of article IX of the state constitution of 1963 and
deposited in the state trunk line fund, whenever issued, as
specified under subsection (1)(a). The amounts which are deducted
from the state trunk line fund for the purpose of the calculation
required by this subsection are as follows:
(a) Amounts expended for the purposes described in subsection
(1)(a) for the payment of debt service on bonds, notes, or other
obligations issued before July 2, 1983.
(b) Amounts expended to provide the state matching requirement
for projects on the national highway system and for the payment of
debt service on bonds, notes, or other obligations issued after
July 1, 1983, for the purpose of providing funds for the state
matching requirements for projects on the national highway system.
(c) Amounts expended for the construction of a highway,
street, road, or bridge to 1 or more of the following or for the
payment of debt service on bonds, notes, or other obligations
issued after July 1, 1983, for the purpose of providing funds for
the construction of a highway, street, road, or bridge to 1 or more
of the following:
(i) A location for which a building permit has been obtained
for the construction of a manufacturing or industrial facility.
(ii) A location for which a building permit has been obtained
for the renovation of, or addition to, a manufacturing or
industrial facility.
(d) Amounts expended for capital outlay other than for
highways, roads, streets, and bridges or to pay debt service on
bonds, notes, or other obligations issued after July 1, 1983, for
the purpose of providing funds for capital outlay other than for
highways, roads, streets, and bridges.
(e) Amounts expended for the operating expenses of the state
transportation department other than the units of the department
performing the functions assigned on January 1, 1983 to the bureau
of highways.
(f) Amounts expended pursuant to contracts entered into before
January 1, 1983.
(g) Amounts expended for the purposes described in subsection
(5).
(h) Amounts appropriated for deposit in the transportation
economic development fund and the rail grade crossing account
pursuant to section 10(1)(g) and 10(1)(a).
(i) Upon the affirmative recommendation of the director of the
state transportation department and the approval by resolution of
the state transportation commission, those amounts expended for
projects vital to the economy of this state, a region, or local
area or the safety of the public. The resolution shall state the
cost of the project exempted from this subsection.
(3) Notwithstanding any other provision of this act, the state
transportation department shall expend annually at least 90% of the
federal revenue distributed to the credit of the state trunk line
fund in that year, except for federal revenue expended for the
purposes described in subsection (2)(b), (c), (f), and (i) and for
the payment of notes issued under section 18b(9) on the
preservation of highways, roads, streets, and bridges. The
requirement of this subsection shall be waived if compliance would
cause this state to be ineligible according to federal law for
federal revenue, but only to the extent necessary to make this
state eligible according to federal law for that revenue.
(4) Notwithstanding any other provision of this section, the
state transportation department may loan money to county road
commissions, cities, and villages for paying capital costs of
transportation purposes described in the second paragraph of
section 9 of article IX of the state constitution of 1963 from the
proceeds of bonds or notes issued pursuant to section 18b or from
the state trunk line fund. Loans made directly from the state trunk
line fund shall be made only after provision of funds for the
purposes
specified in subsection (1)(a) to (f) (g). Loans described
in this subsection are not subject to the revised municipal finance
act, 2001 PA 34, MCL 141.2101 to 141.2821.
(5) County road commissions, cities, and villages may borrow
money from the proceeds of bonds or notes issued under section 18b
or the state trunk line fund for the purposes set forth in
subsection (4) that shall be repayable, with interest, from 1 or
more of the following:
(a) The money to be received by the county road commission,
city, or village from the Michigan transportation fund, except to
the extent the money has been or may in the future be pledged by
contract in accordance with 1941 PA 205, MCL 252.51 to 252.64, or
has been or may in the future be pledged for the payment of the
principal and interest upon notes issued pursuant to 1943 PA 143,
MCL 141.251 to 141.254, or has been or may in the future be pledged
for the payment of principal and interest upon bonds issued under
section 18c or 18d, or has been or may in the future be pledged for
the payment of the principal and interest upon bonds issued
pursuant to 1952 PA 175, MCL 247.701 to 247.707.
(b) Any other legally available funds of the city, village, or
county road commission, other than the general funds of the county.
(6) Loans made pursuant to subsection (4) if required by the
state transportation department may be payable by deduction by the
state treasurer, upon direction of the state transportation
department, from the periodic disbursements of any money returned
by the state under this act to the county road commission, city, or
village, but only after sufficient money has been returned to the
county road commission, city, or village to provide for the payment
of contractual obligations incurred or to be incurred and principal
and interest on notes and bonds issued or to be issued under 1941
PA 205, MCL 252.51 to 252.64, 1943 PA 143, MCL 141.251 to 141.254,
1952 PA 175, MCL 247.701 to 247.707, or section 18c or 18d. The
interest rates and payment schedules of any loans made from the
proceeds of bonds or notes issued pursuant to section 18b shall be
established by the state transportation department to conform as
closely as practicable to the interest rate and repayment schedules
on the bonds or notes issued to make the loans. However, the state
transportation department may allow for the deferral of the first
payment of interest or principal on the loans for a period of not
to exceed 1 year after the respective first payment of interest or
principal on the bonds or notes issued to make the loans.
(7) The amount borrowed by a county road commission, city, or
village pursuant to subsection (5) shall not be included in, or
charged against, any constitutional, statutory, or charter debt
limitation of the county, city, or village and shall not be
included in the determination of the maximum annual principal and
interest requirements of, or the limitations upon, the maximum
annual principal and interest incurred under 1941 PA 205, MCL
252.51 to 252.64, 1943 PA 143, MCL 141.251 to 141.254, 1952 PA 175,
MCL 247.701 to 247.707, or section 18c or 18d.
(8) The county road commission, city, or village is not
required to seek or obtain the approval of the electors, the
municipal finance commission or its successor agency, or, except as
provided in this subsection, the department of treasury to borrow
money pursuant to subsection (5). The borrowing is not subject to
the revised municipal finance act, 2001 PA 34, MCL 141.2101 to
141.2821, or to section 5(g) of the home rule city act, 1909 PA
279, MCL 117.5. The state transportation department shall give at
least 10 days' notice to the state treasurer of its intention to
make a loan under subsection (4). If the state treasurer gives
notice to the director of the state transportation department
within 10 days of receiving the notice from the state
transportation department, that, based upon the then existing
financial or credit situation of the county road commission, city,
or village, it would not be in the best interests of the state to
make a loan under subsection (4) to the county road commission,
city, or village, the loan shall not be made unless the state
treasurer, after a hearing, if requested by the affected county
road commission, city, or village, subsequently gives notice to the
director of the state transportation department that the loan may
be made on the conditions that the state treasurer specifies.
(9) The state transportation commission may borrow money and
issue bonds and notes under, and pursuant to the requirements of,
section 18b to make loans to county road commissions, cities, and
villages for the purposes described in the second paragraph of
section 9 of article IX of the state constitution of 1963, as
provided in subsection (4). A single issue of bonds or notes may be
issued for the purposes specified in subsection (4) and for the
other purposes specified in section 18b. The house and senate
transportation appropriations subcommittees shall be notified by
the department if there are extras and overruns sufficient to
require approval of either the state administrative board or the
commission, or both, on any contract between the department and a
local road agency or a private business.
(10) The director of the state transportation department,
after consultation with representatives of the interests of county
road commissions, cities, and villages, shall establish, by
intergovernmental communication, procedures for the implementation
and administration of the loan program established under
subsections (4) to (9).
(11) Not more than 10% per year of all of the funds received
by and returned to the state transportation department from any
source for the purposes of this section may be expended for
administrative expenses. The department shall be subject to section
14(5) if more than 10% per year is expended for administrative
expenses. As used in this subsection, "administrative expenses"
means those expenses that are not assigned including, but not
limited to, specific road construction or preservation projects and
are often referred to as general or supportive services.
Administrative expenses shall not include net equipment expense,
net capital outlay, debt service principal and interest, and
payments to other state or local offices which are assigned, but
not limited to, specific road construction projects or preservation
activities.
(12) Any performance audits of the department shall be
conducted according to government auditing standards issued by the
United States general accounting office.
(13) Contracts entered into to advance money to a county road
commission,
city, or village under subsection (1)(g) (1)(h) are not
subject to the revised municipal finance act, 2001 PA 34, MCL
141.2101 to 141.2821.
(14) As used in this section, "rail grade crossing improvement
purposes" means 1 or more of the following:
(a) The installation and modernization of active and passive
warning devices at railroad grade crossings.
(b) The installation or improvement of grade crossing
surfaces.
(c) Modification, relocation, or modernization of railroad
grade crossing active and passive warning devices necessitated by
roadway improvement projects.
(d) Test installations of innovative warning devices or other
innovative applications.
(e) Construction of new grade separations.
(f) A cash incentive payment made pursuant to subsection
(1)(c)(iv) for any public road or street crossing, in an amount no
greater than the cost of installing flashing light signals and half
roadway gates at the crossing.
(g) Any other work that would be eligible for funding under
the federal railroad-highway grade crossing improvement program or
other comparable programs.