March 8, 2018, Introduced by Reps. Yaroch, Marino, Lucido, Farrington, Webber, LaGrand, Hertel, Green, Yanez, Howrylak, Chirkun and Sowerby 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 10a, 12, 12b, 13, and 14 (MCL 247.660a,
247.662, 247.662b, 247.663, and 247.664), section 10a as amended by
1992 PA 137 and sections 12, 13, and 14 as amended by 2015 PA 175.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
10a. (1) Annually the state transportation The department
shall
annually determine the miles mileage of
state trunk line
highways, county primary and local roads, and city and village
major and local streets transferred to and from state, county,
city, or village jurisdiction during the preceding period of July 1
to June 30. In each year after that determination, the transferred
mileage shall be accumulated and added to the mileage transferred
in each subsequent July 1 to June 30 period.
(2) The current average revenue worth per mile of a county
primary road and a county local road shall be determined annually
by dividing the total county primary and local road mileages
respectively as of the first day of the preceding July 1 to June 30
period into the total amount of Michigan transportation funds
returned
to counties pursuant to under
this act for use on county
primary and local roads respectively during that period, except
money
returned to counties pursuant to under section 12(2) and (3).
(3) The total amount of money to be transferred from and to
the state trunk line fund, the counties, cities, and villages shall
be determined annually by multiplying the current revenue worth per
mile of a county primary road and a county local road respectively
by the number of accumulated miles in each category transferred
from and to state, county, city, or village jurisdiction. If the
transferred facility becomes classified as part of the local road
or street system of the receiving jurisdiction, the transfer of
money shall be calculated on the basis of the revenue worth per
mile of a county local road. In any other category of
jurisdictional transfer, the transfer of money shall be calculated
on the basis of the revenue worth per mile of a county primary
road.
(4)
For jurisdictional transfers made from the this state
to a
county, city, or village after July 1, 1992, the amount in the
state trunk line fund to be transferred shall be transferred to the
county, city, or village receiving jurisdiction. If the transferred
highway is then classified as part of the local road or street
system of the receiving jurisdiction, the transfer of money to the
receiving jurisdiction shall be calculated on the basis of the
revenue worth per mile of a county local road as determined in
subsection (2). If the transferred highway is then classified as
part of the primary road or major street system of the receiving
jurisdiction, the transfer of money to the receiving jurisdiction
shall be calculated on the basis of the revenue worth per mile of a
county primary road as determined in subsection (2). This
subsection
and subsection (5) shall do
not be construed to effect
affect
contracts entered into before or after the
effective date of
this
subsection pursuant to Act No. 166 of the Public Acts of 1965,
being
sections 408.551 to 408.558 of the Michigan Compiled Laws,
July 15, 1992 under 1965 PA 166, MCL 408.551 to 408.558, for the
maintenance of a transferred highway.
(5) In cities and villages with a population of 25,000 or
more, trunk line mileage that is transferred to local jurisdiction
after July 1, 1992 and is then classified as a major street shall
be certified at twice its measured length.
(6) The transfer of funds under this section shall be included
each year in the October appropriation of the Michigan
transportation fund.
(7) As used in this section, "mileage" means the total number
of lane miles on a highway, road, or street. As used in this
subsection, "lane miles" means the number of miles of pavement
going in 1 direction on a highway, road, or street, multiplied by
the number of lanes.
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
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 under section 12b. This sum shall be
distributed
pursuant to as provided in
section 12b. The return
shall
be is 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 under
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 is 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 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 this 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 this
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
section 18c.
(c) For the payment of principal and interest upon loans
received
pursuant to under 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 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 under
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 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. A
county may expend surplus money for the development, construction,
or repair of an off-street parking facility.
(11) Not more than 5% per year of the 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) 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 money is returned under this
section, the function of the county road commission 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 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
under 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 are 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. As used in
this subsection, "urban routes" means the portions of 2-lane county
primary roads within an urban area that have average daily traffic
in excess of 15,000.
(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 money returned to the
county
road commission pursuant to under
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 the change shall does not 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 designated by the county executive who shall
be responsible for and shall represent the charter county in
transactions
with the department pursuant to under
this act.
(20) Not more than 10% per year of all of the 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 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 money expended under this section
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, where possible, a county road
commission shall secure pavement warranties for full replacement or
appropriate repair for contracted construction work on pavement
projects whose cost exceeds $2,000,000.00 and projects for new
construction
or reconstruction undertaken after the effective date
of
the amendatory act that added this subsection, April 1, 2016, if
allowed
by the federal highway administration Federal Highway
Administration and the department. A county road commission shall
submit a proposed warranty program to the department for approval
no later than April 1, 2016. If a proposed warranty program
submitted under this subsection is approved by the department, the
county road commission shall implement the program no later than 1
year after the approval. 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), and shall also list all
pavement projects whose cost exceeds $2,000,000.00 for which a
warranty was not secured. The list shall include, but is not
limited to, all of the following information:
(a) The type of project.
(b) The cost or estimated cost of the project.
(c) The expected lifespan of the project.
(d) Whether or not the project met or is currently meeting its
expected lifespan.
(e) If the project failed to meet or is not meeting its
expected lifespan, the cause of the failure and the cost to replace
or repair the project.
(f) The entity responsible for paying the cost of replacing or
repairing the project.
(23) As used in this section, "mileage" means the total number
of lane miles of a highway, road, or street. As used in this
subsection, "lane miles" means the number of miles of pavement
going in 1 direction on a highway, road, or street, multiplied by
the number of lanes.
Sec. 12b. (1) The amounts returned to the counties for the
county urban system as provided in section 12(4) shall be
distributed on the basis of the county road mileage contained
within
the urban area boundaries as established pursuant to under
this section.
(2)
On January 3, 1973, the department of transportation shall
establish
urban area boundaries which that
shall be reviewed and
corrected
periodically and which that
shall be in conformance with
the
federal-aid urban area definition as published by the federal
highway
administration of the United States department of
transportation
Federal Highway
Administration and in effect July 1,
1971.
(3) The amounts returned to the county road commissions
qualifying under this section shall be in the same proportion that
the
total urban local road mileage , plus 6
times the urban primary
road mileage of each county bears to the total mileage in all the
urban
local road systems of the this
state, plus 6 times the total
mileage
in all the urban primary road systems of the this state.
(4) All amounts returned to the county road commissions on the
basis of the urban primary road mileage of each county are for use
on the county primary road system and are subject to the same
provisions of this act as other amounts for expenditure on the
county primary road system.
(5) All amounts returned to the county road commissions on the
basis of the urban local road mileage of each county are for
expenditure on the county local road system and are subject to the
same provisions of this act as other amounts for expenditure on the
county local road systems.
(6) As used in this section, "mileage" means the total number
of lane miles of a highway, road, or street. As used in this
subsection, "lane miles" means the number of miles of pavement
going in 1 direction on a highway, road, or street, multiplied by
the number of lanes.
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 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 this
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 under 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 are for
use on
the
major and local street systems respectively and shall be are
subject to the same provisions as 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 under 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 under 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 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 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 money may be expended for the development,
construction, or repair of off-street parking facilities, the
construction
or repair of street lighting, and or 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 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 this 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 this state. The payment of the principal and
interest
upon bonds issued by a city or village pursuant to under
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 this state
for local
street system support. 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 this state under the state constitution of 1963 and statutes of
this state, from 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 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 money may be transferred for preservation of
the local street system. Major street 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 money on the local and major street systems.
(8) Not more than 10% per year of all of the 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 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 designated by the governing
body who shall be responsible for and shall represent the
municipality
in transactions with the department pursuant to under
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 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 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 money
expended under this section 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, where possible, a city
or village shall secure pavement warranties for full replacement or
appropriate repair for contracted construction work on pavement
projects whose cost exceeds $2,000,000.00 and projects for new
construction
or reconstruction undertaken after the effective date
of
the amendatory act that added this subsection April 1, 2016 if
allowed
by the federal highway administration Federal Highway
Administration and the department. A city or village shall submit a
proposed warranty program to the department for approval no later
than February 1, 2017. If a proposed warranty program submitted
under this subsection is approved by the department, the city or
village shall implement the program no later than 1 year after the
approval. 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), and shall also list all pavement projects whose cost
exceeds $2,000,000.00 for which a warranty was not secured. The
list shall include, but is not limited to, all of the following
information:
(a) The type of project.
(b) The cost or estimated cost of the project.
(c) The expected lifespan of the project.
(d) Whether or not the project met or is currently meeting its
expected lifespan.
(e) If the project failed to meet or is not meeting its
expected lifespan, the cause of the failure and the cost to replace
or repair the project.
(f) The entity responsible for paying the cost of replacing or
repairing the project.
(14) With the approval of the director of the department, a
city may use up to 20% of the amount received by that city under
this section for public transit purposes if more than 10,000,000
passengers used public transit within that city during the previous
fiscal year.
(15) 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) "Mileage" means the total number of lane miles of a
highway, road, or street. As used in this subdivision, "lane miles"
means the number of miles of pavement going in 1 direction on a
highway, road, or street, multiplied by the number of lanes.
(d) (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 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
under section 6 of the home rule city act, 1909 PA 279, MCL 117.6.
Sec. 14. (1) Each county road commission and city and village
of the state shall prepare biennial primary road and major street
programs, based on long-range plans, and shall make the programs
available for review by the public.
(2) Separate accounts shall be kept by cities, villages, and
county road commissions of all money returned from the Michigan
transportation fund. This subsection does not prevent the combining
of accounts on which separate bookkeeping records are kept into a
single deposit account.
(3)
All county road commissions, and cities, and villages
shall keep accurate and uniform records on all road and street work
and funds, and shall annually report to the department at the time,
in the manner, and on forms prescribed by the department the
mileage of each road system under their jurisdiction and the
receipts and disbursements of road and street funds. In the annual
report, each county road commission shall report on its compliance
in
the preceding year with the requirements of section 12(16) and
(17). The report shall also specify, with respect to section
12(17), the total dollar amount expended for other than maintenance
purposes which would not have been permissible without the
deduction of certain urban route expenditures as permitted under
section 12(17). The report shall also specify the justification for
a waiver of the requirement of section 12(17), if that requirement
was waived. A county road commission, city, or village shall post
the report required by this subsection on its website, if the
county road commission, city, or village has a website.
(4) The county road commissions and the cities and villages
are authorized to expend adequate amounts from funds returned by
this act to cover the cost of administration, engineering, and
record keeping, and expenditures for those purposes shall be
reported separately by each county road commission, city, and
village to the department.
(5) All distributions and returns of funds provided for in
this act shall be withheld from the department, eligible
authorities, county road commissions, cities, villages, or other
eligible governmental agencies for failure to comply with any of
the requirements of this act, and the withholding shall continue
for the period of noncompliance.
(6) Money distributed to county road commissions for the
maintenance
and improvement of county local road systems pursuant
to
under section 12 represents the total responsibility of
this
state for local county road support. Additional funds required for
the support of county local road systems may be supplied from other
money returned to the township governments by this state under the
state constitution of 1963 and statutes of this state, or from
funds that can be raised by taxation in the townships or counties
for road purposes within the limitations of the state constitution
of 1963 and statutes of this state.
(7) As used in this section, "mileage" means the total number
of lane miles of a highway, road, or street. As used in this
subsection, "lane miles" means the number of miles of pavement
going in 1 direction on a highway, road, or street, multiplied by
the number of lanes.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.