April 17, 2014, Introduced by Reps. Lauwers, McCready, O'Brien, Schmidt and Lane and referred to the Committee on Transportation and Infrastructure.
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 promote safe and efficient travel for
motor vehicle drivers, bicyclists, pedestrians, and other legal
users of roads, streets, and highways; 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 11, 12, and 13 (MCL 247.661, 247.662, and
247.663), section 11 as amended by 2002 PA 639 and sections 12 and
13 as amended by 2012 PA 298.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
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
under 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 under contracts authorized by section 18d.
(b)
For the transfer of funds money
appropriated pursuant to
section 10(1)(g) 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 money
appropriated pursuant to
under 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 this
state, counties, cities,
or
villages. Projects The
department shall be selected select
projects for funding in accordance with the following:
(i) Not more than 50% or less than 30% of these
funds this
money
and matched federal funds money shall
be expended for state
trunk line projects.
(ii) In prioritizing projects for these funds, this money, 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,
this
money, the first priority for funds money deposited
pursuant
to
under this subdivision for rail grade crossing
improvements and
retirement
shall be to match federal funds money
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 a 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
shall be negotiated between the road authority and railroad
company.
The funds money provided to the road authority as a result
of
the crossing closure will shall
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 total operating expenses of the state trunk line
fund for each fiscal year as appropriated by the legislature.
(e) For the preservation of state trunk line highways and
bridges.
(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 money
as the federal aid funds become
money becomes available for that purpose; and, for the construction
and reconstruction of the state trunk line system.
(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
or village to advance money to a the county
road commission,
city,
and or village to pay their its 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.
(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, the
department shall annually expend 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 money 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 for
full replacement guarantee
for
contracted construction work. construction
and preservation
projects. If an appropriate certificate is filed under section 18e
but
only to the extent necessary, this subsection shall does 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 that 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 money 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 money
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 money
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)
and (g).
(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 is
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 money for
the
purposes specified in subsection (1)(a) to (f). 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 money 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 this 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 money
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 do 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) 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.
Sec. 12. (1) The amount distributed to the county road
commissions shall be returned to the county treasurers in the
manner, for the purposes, and under the terms and conditions
specified in this section. The department and the county road
association of Michigan shall jointly develop incentives for
counties to establish statewide purchasing pools for the more
efficient use of Michigan transportation funds.
(2) Each county road commission shall be reimbursed in an
amount up to $10,000.00 per year for the sum paid to a licensed
professional engineer employed or retained by the county road
commission in the previous year. The sum shall be returned to each
county road commission certified by the department as complying
with this subsection regarding the employment of an engineer.
(3) An amount equal to 1% of the total amount returned to the
county road commissions from the Michigan transportation fund
during the prior calendar year shall be withheld annually from the
counties' November monthly distribution provided for in section 17,
and the amount shall be returned to the county road commissions for
snow removal purposes as provided in section 12a.
(4) An amount equal to 10% of the total amount returned to the
county road commissions from the Michigan transportation fund shall
be returned to each county road commission having county primary,
or county local road, or both, mileage in the urban areas as
determined pursuant to section 12b. This sum shall be distributed
pursuant to section 12b. The return shall be in addition to the
amounts provided in subsections (6) and (7) and for the purposes
stated in those subsections.
(5) An amount equal to 4% of the total amount returned to the
county road commissions from the Michigan transportation fund shall
be returned to the county road commissions in the same percentages
as provided in subsection (7). All money returned to the county
road commissions as provided in this subsection shall be expended
by the county road commissions for the preservation, construction,
acquisition, and extension of county local road systems and shall
be in addition to the amounts provided in subsection (7).
(6) Seventy-five percent of the remainder of the total amount
to be returned to the counties shall be expended by each county
road commission for the preservation, construction, acquisition,
and extension of the county primary road system, including the
acquisition of a necessary right of way for the system, work
incidental to the system, and a roadside park or motor parkway
appurtenant to the system, and shall be returned to the counties as
follows:
(a) Three-fourths of the amount in proportion to the amount
received within the respective county during the 12 months next
preceding the date of each monthly distribution, as specific taxes
upon registered motor vehicles under the Michigan vehicle code,
1949 PA 300, MCL 257.1 to 257.923.
(b) One-tenth of the amount in the same proportion that the
total mileage in the county primary road system of each county
bears to the total mileage in all of the county primary road
systems
of the this state.
(c) One eighty-third of the remaining 15% of the amount to
each county.
(7) The balance of the remainder of the total amount to be
returned to counties shall be expended by each county road
commission for the preservation, construction, acquisition, and
extension of the county local road system as defined by this act,
including the acquisition of a necessary right of way for the
system, work incidental to the system, and a roadside park or motor
parkway appurtenant to the system, and shall be returned to the
counties as follows:
(a) Sixty-five percent of the amount in the same proportion
that the total mileage in the county local road system of each
county bears to the total mileage in all of the county local road
systems of the state.
(b) Thirty-five percent of the amount in the same proportion
that the total population outside of incorporated municipalities in
each county bears to the total population outside of incorporated
municipalities in all of the counties of the state, according to
the most recent statewide federal census as certified at the
beginning of the state fiscal year.
(8) Money deposited in, or becoming a part of the county road
funds of a board of county road commissioners shall be expended
first for the payment of principal and interest on the bonds, for
the payment of contractual contributions pledged for the payment of
bonds, for debt service requirements for the payment of contractual
contributions pledged for the payment of bonds, and for debt
service requirements for the payment of notes and loans in the
following order of priority:
(a) For the payment of contributions required to be made by a
board of county road commissioners under a contract entered into
under 1941 PA 205, MCL 252.51 to 252.64, that have been pledged for
the payment of the principal and interest on bonds issued under
that act, or for the payment of total debt service requirements
upon notes issued by a board of county road commissioners under
1943 PA 143, MCL 141.251 to 141.254.
(b) For the payment of principal and interest upon bonds
issued under section 18c, and the payment of contributions of a
board of county road commissioners made pursuant to contracts
entered into under section 18d that are pledged to the payment of
principal and interest on bonds issued after June 30, 1957, under
the authorization of section 18c and contracts executed pursuant to
its
provisions.section 18c.
(c) For the payment of principal and interest upon loans
received pursuant to section 11(5), to the extent other funds have
not been made available for that payment.
(9) Beginning November 1, 2008, no more than 50% per year of
the amount returned to a county for use on the county primary road
system may be expended, with or without matching, on the county
local road system of that county. Except as otherwise provided in
this subsection, beginning September 30, 2010, no more than 30% per
year of the amount returned to a county for use on the county
primary road system may be expended, with or without matching, on
the county local road system of that county. An additional amount,
not to exceed 20% per year of the amount returned to a county for
use on the county primary road system, may be expended on the
county local road system of that county if there is an emergency or
if the county road commission determines that an additional 20% may
be expended on the county local road system. The county road
commission may attach any conditions to its determination if the
determination is for nonemergency purposes, including, but not
limited to, a requirement that the additional 20% expended on the
county
local road system only be used to supplement funds money
from other sources. No more than 15% per year of the amount
returned to a county for expenditure on the county local road
system may be used, with or without matching, on the county primary
road system of that county, and not to exceed an additional 15% per
year of the amount returned to a county for expenditure on the
county local road system, may, in case of an emergency or with the
approval of the county road commission, be expended, with or
without matching, on the county primary road system of that county.
An amount returned to a county for and on account of county local
roads , under this section , that is in
excess of the total amount
paid into the county treasury each year by all of the townships of
that county for and on account of the county local roads pursuant
to section 14(6) may be transferred to and expended on the county
primary road system of that county.
(10)
Not less than 20% per year of the funds money returned to
a county by this section shall be expended for snow and ice
removal, the construction or reconstruction of a new highway or
existing highway, and the acquisition of a necessary right of way
for those highways, and work incidental to those highways, or for
the servicing of bonds issued by the county for these purposes.
Surplus
funds A county may be expended expend surplus money for the
development, construction, or repair of an off-street parking
facility.
(11)
Not more than 5% per year of the funds money returned to
a county for the county primary road system and the county local
road system shall be expended for the maintenance, improvement, or
acquisition of appurtenant roadside parks and motor parkways.
(12)
Funds Money returned to a county shall be expended by the
county road commission for the purposes provided in this section
and shall be deposited by the county treasurer in a designated
county depository, in a separate account to the credit of the
county road fund, and shall be paid out only upon the order of the
county road commission, and interest accruing on the money shall
become a part of, and be deposited with the county road fund.
(13)
In a county to which funds are money
is returned under
this
section, the function of the county road commission shall be
is limited to the formation of policy and the performance of the
official duties imposed by law and delegated by the county board of
commissioners. A member of the county road commission shall not be
employed individually in any other capacity for other duties with
the county road commission.
(14) A county road commission may enter into an agreement with
a county road commission of an adjacent county and with a city or
village to perform work on a highway, road, or street, and with the
department with respect to a state trunk line highway and
connecting links of the state trunk line highway within the limits
of the county or adjacent to the county. The agreement may provide
for the performance by each contracting party of the work
contemplated by the contract including engineering services and the
acquisition of rights of way in connection with the work
contemplated, by purchase or condemnation, by any of the
contracting parties in its own name and the agreement may provide
for joint participation in the costs.
(15) Money distributed from the Michigan transportation fund
may be expended for construction purposes on county local roads
only to the extent matched by money from other sources. However,
Michigan transportation funds may be expended for the construction
of bridges on the county local roads in an amount not to exceed 75%
of the cost of the construction of local road bridges.
(16) Notwithstanding any other provision of this act, at least
90% of the state revenue returned annually to the county road
commission from the Michigan transportation fund less the amounts
described in subdivisions (a) to (e) shall be expended annually by
the county road commission for the preservation of highways, roads,
streets, and bridges, and for the payment of contractual
contributions pledged for the payment of bonds or portions of
bonds, debt service requirements for the payment of bonds or
portions of bonds, and debt service requirements for the payment of
notes and loans or portions of notes and loans issued or received
after
July 1, 1983, for the purpose of providing funds money for
the preservation of highways, roads, streets, and bridges. If an
appropriate certificate is filed under subsection (18) but only to
the extent necessary, this subsection does not prohibit the use of
any amount of state revenue returned annually to the county road
commissions for the payment of contractual contributions pledged
for the payment of bonds, for debt service requirements for the
payment of bonds, and for debt service requirements for the payment
of notes or loans, whenever issued or received, as specified under
subsection (8). The amounts that are deducted from the state
revenue returned to a county road commission from the Michigan
transportation fund, for the purpose of the calculation required by
this subsection are as follows:
(a) Amounts expended for the purposes described in subsection
(8) for bonds, notes, loans, or other obligations issued or
received before July 2, 1983.
(b) Amounts expended for the administrative costs of the
county road commission.
(c) Amounts expended for capital outlay projects for equipment
and buildings, and for the payment of contractual contributions
pledged for the payment of bonds, for debt service requirements for
the payment of bonds, and for debt service requirements for the
payment of notes and loans issued or received after July 1, 1983,
for the purpose of providing funds for capital outlay projects for
equipment and buildings.
(d) Amounts expended for projects vital to the economy of the
local area or the safety of the public in the local area. Before
these amounts can be deducted, the governing body over the county
road commission or the county road commission, as applicable, shall
pass a resolution approving these projects. This resolution shall
state which projects will be funded and the cost of each project. A
copy of each approved resolution shall be forwarded immediately to
the department.
(e) Amounts expended in urban areas as determined pursuant to
section 12b.
(17) As used in this subsection, "urban routes" means those
portions of 2-lane county primary roads within an urban area that
have average daily traffic in excess of 15,000. Notwithstanding any
other provision of this act, except as provided in this subsection,
a county road commission shall annually expend at least 90% of the
federal revenue distributed to the county road commission for
highways, roads, streets, and bridges, less the amount expended on
urban routes for purposes other than preservation and the amount
expended for hard-surfacing of gravel roads on the federal-aid
system, on the preservation of highways, roads, streets, and
bridges. A county road commission may expend in 1 year less than
90% of the federal revenue distributed to the county road
commission for highways, roads, streets, and bridges, less the
amount expended on urban routes for purposes other than
preservation and the amount expended for hard-surfacing of gravel
roads on the federal-aid system, on the preservation of highways,
roads, streets, and bridges, if that year is part of a 3-year
period in which at least 90% of the total federal revenue
distributed in the 3-year period to the county road commission for
highways, roads, streets, and bridges, less the amount expended on
urban routes for purposes other than preservation purposes and the
amount expended for hard-surfacing of gravel roads on the federal-
aid system, is expended on the preservation of highways, roads,
streets, and bridges. If a county road commission expends in 1 year
less than 90% of the federal revenue distributed to the county road
commission for highways, roads, streets, and bridges, less the
amount expended on urban routes for purposes other than
preservation and the amount expended for hard-surfacing of gravel
roads on the federal-aid system, on the preservation of highways,
roads, streets, and bridges and that year is not a part of a 3-year
period in which at least 90% of the total federal revenue
distributed in the 3-year period to the county road commission for
highways, roads, streets, and bridges, less the amount expended on
urban routes for purposes other than preservation and the amount
expended for hard-surfacing of gravel roads on the federal-aid
system, is expended on the preservation of highways, roads,
streets, and bridges, the county road commission shall expend in
each year subsequent to the 3-year period 100%, or less in 1 year
if sufficient for the purposes of this subsection, of the federal
revenue distributed to the county road commission for highways,
roads, streets, and bridges, less the amount expended on urban
routes for purposes other than preservation and the amount expended
for hard-surfacing of gravel roads on the federal-aid system, on
the preservation of highways, roads, streets, and bridges until the
average percentage spent on the preservation of highways, roads,
streets, and bridges in the 3-year period and the subsequent years,
less the amount expended on urban routes for purposes other than
preservation and the amount expended for hard-surfacing of gravel
roads on the federal-aid system, is at least 90%. A year may be
included in only one 3-year period for the purposes of this
subsection. The requirements of this subsection shall be waived if
compliance would cause the county road commission to be ineligible
for federal revenue under federal law, but only to the extent
necessary to make the county road commission eligible for that
revenue under federal law. For the purpose of the calculations
required by this subsection, the amount expended on urban routes by
a county road commission for purposes other than preservation and
the amount expended for hard-surfacing of gravel roads on the
federal-aid system shall be deducted from the total federal revenue
distributed to the use of the county road commission.
(18) A county road commission shall certify to the department
on or before the issuance of any bonds or notes issued after July
1, 1983, pursuant to 1943 PA 143, MCL 141.251 to 141.254, 1941 PA
205, MCL 252.51 to 252.64, or section 18c or 18d, for purposes
other than the preservation of highways, roads, streets, and
bridges and purposes other than the purposes specified in
subsection (16)(c) that its average annual debt service
requirements for all bonds and notes or portions of bonds and notes
issued after July 1, 1983, for purposes other than the preservation
of highways, roads, streets, and bridges and other than for the
purposes specified in subsection (16)(c), including the bond or
note
to be issued does not exceed 10% of the funds money returned
to the county road commission pursuant to this act, less the
amounts specified in subsection (16)(a), (b), and (c) during the
last completed fiscal year of the county road commission. If the
purpose for which the bonds or notes are issued is changed after
the issuance of the notes or bonds, the change shall be made in a
manner that maintains compliance with the certification required by
this subsection, as of the date the certificate was originally
issued, but no such change shall invalidate or otherwise affect the
bonds or notes with respect to which the certificate was issued or
the obligation to pay debt service on the bonds or notes. A
certification under this subsection is conclusive as to the matters
stated in the certification for purposes of the validity of bonds
and notes.
(19) In each charter county to which funds are returned under
this section, the responsibility for road improvement,
preservation, and traffic operation work, and the development,
construction, or repair of off-road parking facilities and
construction or repair of road lighting shall be coordinated by a
single
administrator to be designated by the county executive who
shall be responsible for and shall represent the charter county in
transactions with the department pursuant to this act.
(20)
Not more than 10% per year of all of the funds money
received by and returned to a county from any source for the
purposes of this section may be expended for administrative
expenses. A county that expends more than 10% for administrative
expenses in a year is subject to section 14(5) unless a waiver is
granted by the department of treasury. 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 do not include net
equipment expense, net capital outlay, debt service principal and
interest, and payments to other state or local offices that are
assigned, but not limited to, specific road construction projects
or preservation activities.
(21) In addition to the financial compliance audits required
by law, the department may conduct performance audits and make
investigations
of the disposition of all state funds money received
by county road commissions, county boards of commissioners, or any
other county governmental agency acting as the county road
authority, for transportation purposes to determine compliance with
the terms and conditions of this act. Performance audits shall be
conducted according to government auditing standards issued by the
United States general accounting office. The department shall
develop performance audit procedures and reporting requirements
sufficient
to determine whether funds money
expended under this
section
were was expended in compliance with this act by September
1, 2012 and shall report to the transportation committees of the
senate and house of representatives no later than October 1, 2012
on the additional audit procedures and reporting requirements. The
department shall provide notice to the county road commission,
county board of commissioners, or any other county governmental
agency acting as the county road authority, as applicable, of the
standards to be used for audits performed under this subsection.
The notice shall be provided 6 months prior to the fiscal year in
which the audit is conducted. The department shall notify the
county road commission, county board of commissioners, or any other
county governmental agency acting as the county road authority of
any subsequent changes to the standards. County road commissions,
county boards of commissioners, or any other county governmental
agencies acting as county road authorities, as applicable, shall
make available to the department the pertinent records for the
audit. Performance audits may be performed at the discretion of the
department or upon receiving a request from the speaker of the
house of representatives or the senate majority leader.
(22) Of the amounts appropriated for a county primary or local
road system under this section, a county road commission shall
secure warranties for full replacement guarantee for construction
and preservation projects. A county road commission shall include a
list of all warranties that were secured under this subsection and
indicate whether any of those warranties were redeemed with the
report required under section 14(3).
Sec. 13. (1) The amount distributed to cities and villages
shall be returned to the treasurers of the cities and villages in
the manner, for the purposes, and under the terms and conditions
specified in this section. The amount received by a newly
incorporated municipality shall be in place of any other direct
distribution
of funds money from the Michigan transportation fund.
The population of a newly incorporated municipality as determined
under this section shall be added to the total population of all
incorporated cities and villages in the state in computing the
amounts to be returned under this section to each municipality in
the state. Major street mileage, local street mileage, and
equivalent major mileage, if applicable, shall be determined by the
department before the next month for which distribution is made
following the effective date of incorporation of a newly
incorporated municipality.
(2) From the amount available for distribution to cities and
villages during each December, an amount equal to 0.7% of the total
amount returned to all cities and villages under subsections (3)
and (4) during the previous calendar year shall be withheld. The
amount withheld shall be used to partially reimburse cities and
villages located in counties that are eligible for snow removal
funds pursuant to section 12a and that have costs for winter
maintenance on major and local streets that are greater than the
statewide average. The distributions shall be made annually during
February and shall be calculated separately for the major and local
street systems but may be paid in a combined warrant. The
distribution to a city or village shall be equal to 1/2 of its
winter maintenance expenditures after deducting the product of its
total earnings under subsections (3) and (4) multiplied by 2 times
the average municipal winter maintenance factor. Winter maintenance
expenditures shall be determined from the street financial reports
for the most current fiscal years ending before July 1. A city or
village that does not submit a street financial report for the
fiscal year ending before July 1 by the subsequent December 31 is
ineligible for the winter maintenance payment that is to be based
on that street financial report. The department shall determine the
average municipal winter maintenance factor annually by dividing
the total expenditures of all cities and villages on winter
maintenance of streets and highways by the total amount earned by
all cities and villages under subsections (3) and (4) during the 12
months. If the sum of the distributions to be made under this
subsection exceeds the amount withheld, the distributions to each
eligible city and village shall be reduced proportionately. If the
sum is less than the amount withheld, the balance shall be added to
the amount available for distribution under subsections (3) and (4)
during the next month. The distributions shall be for use on the
major and local street systems respectively and shall be subject to
the
same provisions as funds money
returned under subsections (3)
and (4).
(3) Seventy-five percent of the remaining amount to be
returned to the cities and villages, after deducting the amounts
withheld pursuant to subsection (2), shall be returned 60% in the
same proportion that the population of each bears to the total
population of all cities and villages, and 40% in the same
proportion that the equivalent major mileage in each bears to the
total equivalent major mileage in all cities and villages. The
amount returned under this subsection shall be used by each city
and village for the following purposes in the following order of
priority:
(a) For the payment of contributions required to be made by a
city or village under the provisions of contracts previously
entered into under 1941 PA 205, MCL 252.51 to 252.64, that have
been previously pledged for the payment of the principal and
interest on bonds issued under that act; or for the payment of the
principal and interest upon bonds issued by a city or village
pursuant to 1952 PA 175, MCL 247.701 to 247.707.
(b) Payment of obligations of the city or village on highway
projects undertaken by the city or village jointly with the
department.
(c) For the payment of principal and interest upon loans
received
pursuant to section 11(5), to the extent other funds have
money has not been made available for that payment.
(d) For the preservation, construction, acquisition, and
extension of the major street system as defined by this act
including the acquisition of a necessary right of way for the
system, work incidental to the system, and an appurtenant roadside
park or motor parkway, of the city or village and for the payment
of the principal and interest on that portion of the city's or
village's general obligation bonds that are attributable to the
construction or reconstruction of the city's or village's major
street
system. Not more than 5% per year of the funds money
returned to a city or village by this subsection shall be expended
for the preservation or acquisition of appurtenant roadside parks
and
motor parkways. Surplus funds money
may be expended for the
development, construction, or repair of off-street parking
facilities, the construction or repair of street lighting, and
transfer to the local street system under subsection (6).
(e) For capital outlay projects for equipment and buildings,
contributions pledged for the payment of loans and for the payment
of contractual debt service requirements for the payment of bonds
for
the purpose of providing funds money
for capital outlay
projects for equipment and buildings necessary to the development
and maintenance of the road system so long as amounts allocated
under this subdivision are used for transportation purposes.
(4) The remaining amount to be returned to incorporated cities
and villages shall be expended in each city or village for the
preservation, construction, acquisition, and extension of the local
street system of the city or village, including the acquisition of
a necessary right of way for the system, work incidental to the
system, and subject to subsection (5), for the payment of the
principal and interest on the portion of the city's or village's
general obligation bonds that are attributable to the construction
or reconstruction of the city's or village's local street system.
The amount returned under this subsection shall be returned to the
cities and villages 60% in the same proportion that the population
of each bears to the total population of all incorporated cities
and villages in the state, and 40% in the same proportion that the
total mileage of the local street system of each bears to the total
mileage in the local street systems of all cities and villages of
the state. The payment of the principal and interest upon bonds
issued by a city or village pursuant to 1952 PA 175, MCL 247.701 to
247.707, and after that payment, the payment of debt service on
loans received under section 11(5), shall have priority in the
expenditure of money returned under this subsection.
(5) Money distributed to each city and village for the
maintenance and preservation of its local street system under this
act represents the total responsibility of the state for local
street
system support. Funds Money
distributed from the Michigan
transportation fund shall not be expended for construction purposes
on city and village local streets except to the extent matched from
local revenues including other money returned to a city or village
by
the this state under the state constitution of 1963 and
statutes
of
the this state, from funds money that
can be raised by taxation
in cities and villages for street purposes within the limitations
of the state constitution of 1963 and statutes of this state, from
special assessments, or from any other source.
(6) Money returned under this section to a city or village
shall be expended on the major and local street systems of that
city
or village. However, the first priority shall be is the
major
street system. Money returned for expenditure on the major street
system shall be expended in the priority order provided in
subsection
(3) except that surplus funds money
may be transferred
for
preservation of the local street system. Major street funds
money transferred for use on the local street system shall not be
used for construction but may be used for preservation. A city or
village shall not transfer more than 50% of its annual major street
funding for the local street system unless it has adopted and is
following an asset management process for its major and local
street systems and adopts a resolution with a copy to the
department setting forth all of the following:
(a) A list of the major streets in that city or village.
(b) A statement that the city or village is adequately
maintaining its major streets.
(c) The dollar amount of the transfer.
(d) The local streets to be funded with the transfer.
(e) A statement that the city or village is following an asset
management process for its major and local street systems.
(7) A city or village that has not adopted an asset management
plan shall obtain the concurrence of the department to transfer
more than 50% of its major street funding to its local street
system. The department may provide for pilot projects that would
allow a city or village that has adopted an asset management plan
under subsection (6) to combine their local and major street funds
into 1 street fund and to submit a single report to the department
on
the expenditure of funds money
on the local and major street
systems.
(8)
Not more than 10% per year of all of the funds money
returned to a city or village from any source for the purposes of
this section may be expended for administrative expenses. A city or
village that expends more than 10% for administrative expenses in a
year is subject to section 14(5).
(9)
In each city and village to which funds are money is
returned under this section, the responsibility for street
preservation and the development, construction, or repair of off-
street parking facilities and construction or repair of street
lighting
shall be coordinated by a single administrator to be
designated by the governing body who shall be responsible for and
shall represent the municipality in transactions with the
department pursuant to this act.
(10) Cities and villages may provide for consolidated street
administration. A city or a village may enter into an agreement
with other cities or villages, the county road commission, or with
the state transportation commission for the performance of street
or highway work on a road or street within the limits of the city
or village or adjacent to the city or village. The agreement may
provide for any of the contracting parties to perform the work
contemplated by the contracts including services and acquisition of
rights of way, by purchase or condemnation in its own name. The
agreement may provide for joint participation in the costs if
appropriate.
(11)
Interest earned on funds money
returned to a city or a
village for purposes provided in this section shall be credited to
the appropriate street fund.
(12) In addition to the financial compliance audits required
by law, the department may conduct performance audits and make
investigations
of the disposition of all state funds money received
by cities and villages for transportation purposes to determine
compliance with the terms and conditions of this act. Performance
audits shall be conducted according to government auditing
standards issued by the United States general accounting office.
The department shall develop all performance audit procedures and
reporting
requirements sufficient to determine whether funds money
expended
under this section were was
expended in compliance with
this act by September 1, 2012 and shall report to the
transportation committees of the senate and house of
representatives no later than October 1, 2012 on the additional
audit procedures and reporting requirements. The audit procedures
shall include a review of the road fund balance of the city or
village. The cities and villages shall report their road fund
balances by fund balance component. The department shall assist
cities and villages to ensure that road fund balances are
consistently classified and are in compliance with the audit and
reporting requirements of this section. The department shall
provide notice to cities and villages of the standards to be used
for audits under this subsection prior to the fiscal year in which
the audit is conducted. The department shall notify cities and
villages of any subsequent changes to the standards. Cities and
villages shall make available to the department the pertinent
records for the audit. Performance audits may be performed at the
discretion of the department or upon receiving a request from the
speaker of the house of representatives or the senate majority
leader.
(13) Of the amounts appropriated for a city or village major
or local street system under this section, a city or village shall
secure warranties for full replacement guarantee for construction
and preservation projects. A city or village shall include a list
of all warranties that were secured under this subsection and
indicate whether any of those warranties were redeemed with the
report required under section 14(3).
(14) (13)
As used in this section:
(a) "Administrative expenses" means expenses that are not
assigned under this section, including, but not limited to,
specific road construction or maintenance projects, and are often
referred to as general or supportive services. Administrative
expenses do not include net equipment expense, net capital outlay,
debt service principal and interest, or payments to other state or
local offices that are assigned, but not limited to, specific road
construction projects or maintenance activities.
(b) "Equivalent major mileage" means the sum of 2 times the
state trunk line mileage certified by the department as of March 31
of each year, as being within the boundaries of each city and
village having a population of 25,000 or more, plus the major
street mileage in each city and village, multiplied by the
following factor:
(i) 1.0 for cities and villages of 2,000 or less population.
(ii) 1.1 for cities and villages from 2,001 to 10,000
population.
(iii) 1.2 for cities and villages from 10,001 to 20,000
population.
(iv) 1.3 for cities and villages from 20,001 to 30,000
population.
(v) 1.4 for cities and villages from 30,001 to 40,000
population.
(vi) 1.5 for cities and villages from 40,001 to 50,000
population.
(vii) 1.6 for cities and villages from 50,001 to 65,000
population.
(viii) 1.7 for cities and villages from 65,001 to 80,000
population.
(ix) 1.8 for cities and villages from 80,001 to 95,000
population.
(x) 1.9 for cities and villages from 95,001 to 160,000
population.
(xi) 2.0 for cities and villages from 160,001 to 320,000
population.
(xii) For cities over 320,000 population, a factor of 2.1
increased successively by 0.1 for each 160,000 population increment
over 320,000.
(c) "Population" means the population according to the most
recent statewide federal census as certified at the beginning of
the state fiscal year, except that, if a municipality has been
newly incorporated since completion of the census, the population
of
the municipality for purposes of the distribution of funds money
before completion of the next census shall be the population as
determined by special federal census, if there is a special federal
census, and if not, by the population as determined by the official
census in connection with the incorporation, if there is such a
census and, if not, by a special state census to be taken at the
expense of the municipality by the secretary of state pursuant to
section 6 of the home rule city act, 1909 PA 279, MCL 117.6.