May 16, 2018, Introduced by Reps. Sheppard, Hernandez, Wentworth, Noble, Webber, Bizon, Runestad and Reilly 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 10 and 11 (MCL 247.660 and 247.661), section
10 as amended by 2016 PA 246 and section 11 as amended by 2015 PA
175, and by adding section 10r.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 10. (1) A fund to be known as the Michigan transportation
fund is established in the state treasury as a separate fund. The
state treasurer may receive money or other assets from any source
for deposit into the fund. The state treasurer shall direct the
investment of the fund. The state treasurer shall credit to the
fund interest and earnings from fund investments. Except as
provided in this act, no other money, whether appropriated from the
general fund of this state or any other source, shall be deposited
in the Michigan transportation fund. Except as otherwise provided
in this section, the legislature shall appropriate money for the
necessary expenses incurred in the administration and enforcement
of the motor fuel tax act, 2000 PA 403, MCL 207.1001 to 207.1170,
the motor carrier act, 1933 PA 254, MCL 475.1 to 479.42, and
sections 801 to 810 of the Michigan vehicle code, 1949 PA 300, MCL
257.801 to 257.810. Money appropriated for necessary expenses shall
be based upon established cost allocation methodology that reflects
actual costs. Appropriations for the necessary expenses incurred by
the department of state in administration and enforcement of
sections 801 to 810 of the Michigan vehicle code, 1949 PA 300, MCL
257.801 to 257.810, shall be made from the Michigan transportation
fund and from money in the transportation administration collection
fund created in section 810b of the Michigan vehicle code, 1949 PA
300, MCL 257.810b. Appropriations from the Michigan transportation
fund for the necessary expenses incurred by the department of state
in administration and enforcement of sections 801 to 810 of the
Michigan vehicle code, 1949 PA 300, MCL 257.801 to 257.810, shall
not exceed $20,000,000.00 per state fiscal year. Except as provided
in section 51d of the income tax act of 1967, 1967 PA 281, MCL
206.51d, all money in the Michigan transportation fund is
apportioned and appropriated in the following manner:
(a) $5,000,000.00 to the innovative transportation grant fund
created in section 10s.
(b) (a)
Not more than $3,000,000.00 as may
be annually
appropriated each fiscal year to the state trunk line fund for
subsequent deposit in the rail grade crossing account.
(c) (b)
Not more than $3,000,000.00 as may
be annually
appropriated each fiscal year to the state trunk line fund for
subsequent deposit in the grade crossing surface account.
(d) (c)
Not more than $3,000,000.00 each
year to the local
bridge fund established in subsection (4) for the purpose of
payment of the principal, interest, and redemption premium on any
notes or bonds issued by the state transportation commission under
former section 11b or subsection (9).
(e) (d)
Except as otherwise provided in
this subdivision and
subject to section 11h, $2,000,000.00 each year of the revenue from
3 cents of the tax levied under section 8(1)(a) of the motor fuel
tax act, 2000 PA 403, MCL 207.1008, to the local agency wetland
mitigation bank fund created in section 11h.
(f) (e)
Except as otherwise provided in
this subdivision,
$5,000,000.00 each year of the revenue from 3 cents of the tax
levied under section 8(1)(a) of the motor fuel tax act, 2000 PA
403, MCL 207.1008, to the movable bridge fund created in section
11g, with the remainder to the state trunk line fund, county road
commissions, and cities and villages in the percentages provided in
subdivision
(l). (m). The
department shall annually adjust the
amount allocated under this subdivision by an amount equal to the
annual
increase in the Detroit consumer price index Consumer Price
Index for the preceding year.
(g) (f)
One-half of the revenue from 1 cent
of the tax levied
under section 8(1)(a) of the motor fuel tax act, 2000 PA 403, MCL
207.1008, to the state trunk line fund for the repair of state
bridges under section 11, and 1/2 of the revenue from 1 cent of the
tax levied under section 8(1)(a) of the motor fuel tax act, 2000 PA
403, MCL 207.1008, to the local bridge fund created in subsection
(4) for distribution only to cities, villages, and county road
commissions.
(h) (g)
$50,000,000.00 to the state trunk
line fund for debt
service costs on state of Michigan projects.
(i) (h)
Ten percent to the comprehensive
transportation fund
for the purposes described in section 10e.
(j) (i)
$5,000,000.00 to the local bridge
fund established in
subsection (4) for distribution only to the local bridge advisory
board, the regional bridge councils, cities, villages, and county
road commissions.
(k) (j)
$36,775,000.00 to the state trunk
line fund for
subsequent deposit in the transportation economic development fund,
with first priority for allocation to debt service on bonds issued
to fund transportation economic development fund projects. In
addition, $3,500,000.00 is appropriated from the Michigan
transportation fund to the state trunk line fund for subsequent
deposit in the transportation economic development fund to be used
for economic development road projects in any of the targeted
industries described in section 9(1)(a) of 1987 PA 231, MCL
247.909.
(l) (k)
Not less than $33,000,000.00 as may
be annually
appropriated each fiscal year to the local program fund created in
section 11e.
(m) (l) The
balance of the Michigan transportation fund as
follows, after deduction of the amounts appropriated in
subdivisions
(a) to (k):(l):
(i) 39.1% to the state trunk line fund for the purposes
described in section 11.
(ii) 39.1% to the county road commissions of this state.
(iii) 21.8% to the cities and villages of this state.
(2)
The money appropriated pursuant to under this section
shall be used for the purposes as provided in this act and any
other applicable act. Subject to the requirements of section 9b,
the department shall develop programs in conjunction with the
Michigan Chamber of Commerce and the Michigan Minority Supplier
Development Council to assist small businesses, including those
located in enterprise zones and those located in empowerment zones
as determined under federal law, as defined by law in becoming
qualified to bid.
(3) Thirty-one and one-half percent of the money appropriated
to this state from the federal government under 23 USC 157,
commonly known as minimum guarantee funds, shall be allocated to
the transportation economic development fund, if the allocation is
consistent with federal law. This money shall be distributed 16-
1/2% for development projects for rural counties as defined by law
and 15% for capacity improvement or advanced traffic management
systems in urban counties as defined by law. Federal money
allocated for distribution under this section is eligible for
obligation and use by all recipients as provided in the moving
ahead for progress in the 21st century act, Public Law 112-141.
(4) A fund to be known as the local bridge fund is established
in the state treasury as a separate fund. The money appropriated to
the local bridge fund and the interest accruing to that fund shall
be expended for the local bridge program. The purpose of the fund
is to provide financial assistance to highway authorities for the
preservation, improvement, or reconstruction of existing bridges or
for the construction of bridges to replace existing bridges in
whole or part. The money in the local bridge fund is not subject to
section 12(15) or 13(5). The local bridge advisory board is created
and shall consist of 6 voting members appointed by the state
transportation commission and 2 nonvoting members appointed by the
department. The board shall include 3 members from the County Road
Association of Michigan, 1 member who represents counties with
populations 65,000 or greater, 1 member who represents counties
with populations greater than 30,000 and less than 65,000, and 1
member who represents counties with populations of 30,000 or less.
Three members shall be appointed from the Michigan Municipal
League, 1 member who represents cities with a population 75,000 or
greater, 1 member who represents cities with a population less than
75,000, and 1 member who represents villages. Each organization
with voting rights shall submit a list of nominees in each
population category to the state transportation commission. The
state transportation commission shall make the appointments from
the lists submitted under this subsection. Voting members shall be
appointed for 2 years. The chairperson of the board shall be
selected from among the voting members of the board. In addition to
the 2 nonvoting members, the department shall provide qualified
administrative staff and qualified technical assistance to the
board.
(5) No less than 5% and no more than 15% of the money received
in the local bridge fund may be used for critical repair of large
bridges and emergencies as determined by the local bridge advisory
board. Money remaining after the money allocated for critical large
bridge repair and emergencies is deducted shall be distributed by
the board to the regional bridge councils created under this
section. One regional council shall be formed for each department
of transportation region as those regions exist on October 1, 2004.
The regional councils shall consist of 2 members of the County Road
Association of Michigan from counties in the region, 2 members of
the Michigan Municipal League from cities and villages in the
region, and 1 member of the department in each region. The members
of the department are nonvoting members and shall provide qualified
administrative staff and qualified technical assistance to the
regional councils.
(6) Money in the local bridge fund after deduction of the
amounts set aside for critical repair of large bridges and
emergency repairs shall be distributed among the regional bridge
councils according to all of the following ratios, which shall be
assigned a weight expressed as a percentage as determined by the
board, with each ratio receiving no greater than a 50% weight and
no less than a 25% weight:
(a) A ratio with a numerator that is the total number of local
bridges in the region and a denominator that is the total number of
local bridges in this state.
(b) A ratio with a numerator that is the total local bridge
deck area in the region and a denominator that is the total local
bridge deck area in this state.
(c) A ratio with a numerator that is the total amount of
structurally deficient local bridge deck area in the region and a
denominator that is the total amount of structurally deficient
local bridge deck area in this state.
(7) The regional bridge councils shall allocate the money
received from the board for the preservation, improvement, and
reconstruction of existing bridges or for the construction of
bridges to replace existing bridges in whole or in part in each
region.
(8) Each January, the department shall submit a report to the
chair and the minority vice-chair of the appropriations committees
of the senate and the house of representatives, and to the standing
committees on transportation of the senate and the house of
representatives, on all of the following activities for the
previous state fiscal year:
(a) A listing of how much money was dedicated for emergency
and large bridge repair.
(b) A listing of what emergency and large bridge repair
projects were funded.
(c) The actual weights used in the calculation required under
subsection (6).
(d) A listing of the total money distributed to each region.
(e) A listing of the specific projects that were funded under
subsection (7).
(9) The state transportation commission shall borrow money and
issue notes or bonds in an amount of not less than $30,000,000.00
to supplement the funding provided for the local bridge program
under subsection (5). The bonds or notes issued under this
subsection may be issued by the commission for any purpose for
which other local bridge money may be used under this section. The
bonds or notes authorized by this subsection shall be issued by
resolution of the state transportation commission consistent with
the requirements of section 18b.
(10) The department shall promulgate rules under the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328, governing the administration of the local bridge program.
The rules shall set forth the eligibility criteria for financial
assistance under the program and other matters related to the
program that the department considers necessary and desirable. The
department shall take into consideration the availability of
federal aid and other financial resources of the highway authority
responsible for the bridge, the importance of the bridge to the
highway, road, or street network, and the condition of the existing
bridge.
(11) The revenue appropriated to the local bridge fund under
subsection
(1)(e) (1)(d) shall be distributed only to the local
bridge advisory board, the regional bridge councils, cities,
villages, and county road commissions.
(12) The regional bridge councils shall determine what bridge
projects are selected for funding from the local bridge fund
created in subsection (4) and shall make a list of selected
projects available to interested parties in the region. A
determination that a bridge project is selected for funding in a
given fiscal year is not approval to disburse the money.
(13) A county road commission, city, or village may implement
a bridge project if the bridge project has been selected for
funding and is included in the appropriate regional bridge
council's current multiyear bridge plan for the local bridge
program but the regional bridge council has not allocated money to
the bridge project for the fiscal year that the bridge project is
on the current multiyear bridge plan. A county road commission,
city, or village may borrow money to implement a project that has
been selected for funding and is included in the appropriate
regional bridge council's current multiyear bridge plan but has not
been allocated money by the regional bridge council. Based on
available local bridge money, when a bridge project that was
implemented with borrowed money is allocated funding in a
subsequent fiscal year, the funding shall only be used to repay the
amount approved by the multiyear bridge plan when the money was
borrowed. To be eligible for repayment of the amount borrowed, a
bridge project that has been implemented with borrowed money shall
be administered through the department's local bridge program.
Sec. 10r. (1) The innovative transportation fund is created
within the state trunk line fund for the purpose of increasing the
quality of roads in this state using innovative materials and
construction methods. The state treasurer may receive money or
other assets from any source for deposit into the fund. The state
treasurer shall direct the investment of the fund. The state
treasurer shall credit to the fund interest and earnings from fund
investments. Money in the fund at the close of the fiscal year
shall be deposited in the state trunk line fund.
(2) The department shall be the administrator of the
innovative transportation fund created in subsection (1) for
auditing purposes.
(3) The department shall allow members of the public to submit
ideas for implementing existing materials or construction methods
that they believe would be beneficial to the roads of this state
using the department's website. The department shall encourage a
person submitting an idea to do all of the following:
(a) Provide technical data and specifications.
(b) Give examples of completed projects where the materials or
methods were successfully used.
(c) Give cost projections per lane mile for the use of the
materials or methods and how the use of those materials or methods
would be beneficial to this state.
(4) The board shall review ideas submitted under subsection
(3) at least 4 times per year based on a schedule determined by the
chairperson of the board and shall determine whether each idea
submitted is a valid submission.
(5) The department shall post on its website a list of valid
submissions. The department shall include the name of the person
that submitted the idea, a brief description of the product or
method suggested, and any cost projections provided by the person
that submitted the idea. The department shall not post technical
specifications that are proprietary.
(6) The board shall annually select no more than 3 valid
submissions for testing in a location determined by the board. The
department shall assist the board in implementing the testing
required by this subsection if necessary. The board shall expend no
less than $3,000,000.00 on the testing required by this subsection,
and shall not expend more than $10,000,000.00 on the testing
required by this subsection unless approved by the director of the
department.
(7) The department shall review for effectiveness each testing
project described in subsection (6) upon completion and shall, no
later than once every 3 years, provide a report to the board. The
department shall post a report prepared under this subsection on
its website.
(8) As used in this section, "board" means the Michigan
innovative transportation board created in section 10q.
Sec. 11. (1) A fund to be known as the state trunk line fund
is established in the state treasury as a separate fund. The money
deposited in the state trunk line fund is appropriated to the
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 pledged before July 18,
1979 and 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, 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
under 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 pledged to the payment of principal and
interest on bonds issued under section 18d and contracts entered
into under section 18d by the state highway commission or state
transportation
commission to be made pursuant to under contracts
entered into under section 18d. 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 under contracts authorized by section 18d.
(b) For the transfer of money appropriated under section
10(1)(i)
10(1)(k) 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 money appropriated under section
10(1)(a)
10(1)(b) to the rail 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 this state, counties, cities, or villages. The
department shall select projects for funding in accordance with the
following:
(i) Not more than 50% or less than 30% of this money and
matched federal money shall be expended for state trunk line
projects.
(ii) In prioritizing projects for 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 this money,
the first priority for money deposited under this subdivision for
rail grade crossing improvements and retirement shall be to match
federal 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 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 shall be negotiated between
the road authority and railroad company. The money provided to the
road authority as a result of the crossing closure 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 transfer of money appropriated under section
10(1)(b)
10(1)(c) to the grade crossing surface account in the
state trunk line fund for expenditure for rail grade crossing
surface improvement purposes at rail grade crossings on public
roads and streets under the jurisdiction of counties, cities, or
villages. Projects shall be selected for funding in accordance with
the following:
(i) In prioritizing projects, the department shall consider
vehicular traffic volumes, relative crossing surface condition, the
ability of the railroad and local road authority to make
coordinated improvements, and the availability of funding.
(ii) The grade crossing surface account shall fund 60% of the
project cost, with the remaining 40% funded by the railroad
company.
(iii) Funding under the grade crossing surface account shall
be limited to items of work that are normally the responsibility of
the railroad under section 309 of the railroad code of 1993, 1993
PA 354, MCL 462.309. Maintenance of the roadway approaches to the
crossing will continue to be the responsibility of the party with
jurisdiction over that roadway.
(e) For the total operating expenses of the state trunk line
fund for each fiscal year as appropriated by the legislature.
(f) For the preservation of state trunk line highways and
bridges.
(g) 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 money as the federal aid money becomes
available for that purpose; and, for the construction and
reconstruction of the state trunk line system.
(h) The department may enter into agreements with a local road
agency or a private sector company 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 maintenance, 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 department
also may contract with a local road agency to advance money to a
local road agency to pay the 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
local road agency, but the contract shall be executed before the
advancement of any money to a local road agency by the state
transportation commission, and shall provide for the full
reimbursement of any advancement by a local road agency to the
department, with interest, within 15 years after advancement, from
any available revenue sources of the local road agency or, if
provided in the contract, by deduction from the periodic
disbursements of any money returned by the state to the local road
agency.
(i) For providing inventories of supplies and materials
required for the activities of the department. The 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.
(j) $10,000,000.00 to the innovative transportation fund
created in section 10r.
(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) (j)
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 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 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 2015
amendatory
act that amended this subsection. April
1, 2016. The
department shall compile and make available to the public an annual
report of all warranties that were secured under this subsection
and all pavement projects whose costs exceed $2,000,000.00 where a
warranty was not secured as provided in subsection (14). If an
appropriate certificate is filed under section 18e but only to the
extent necessary, this subsection 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 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 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 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 money for capital outlay other than for
highways, roads, streets, and bridges.
(e) Amounts expended for the operating expenses of the
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 under
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 under section 10(1)(a) 10(1)(b) and
(h).(k).
(i) Upon the affirmative recommendation of the director of the
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
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 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
department may loan money to a local road agency 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 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) A local road agency 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 local road agency 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 under 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 under 1952 PA 175, MCL 247.701 to
247.707.
(b) Any other legally available money of the local road
agency, other than the general funds of the county.
(6) If required by the department, loans made under subsection
(4) are payable by deduction by the state treasurer, upon direction
of the department, from the periodic disbursements of any money
returned by this state under this act to the local road agency, but
only after sufficient money has been returned to the local road
agency 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 under section 18b shall be established by
the 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 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 local road agency under
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 local road agency 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 under 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 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 department within 10
days of receiving the notice from the department, that, based upon
the then existing financial or credit situation of the local road
agency, it would not be in the best interests of this state to make
a loan under subsection (4) to the local road agency, the loan
shall not be made unless the state treasurer, after a hearing, if
requested by the affected local road agency, subsequently gives
notice to the director of the 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 section 18b to make loans to a local
road agency 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 department, after consultation with
representatives of the interests of local road agencies, 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 8% per year of all of the money received by
and returned to the 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 8% per
year is expended for administrative expenses. As used in this
subsection, "administrative expenses" means 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.
(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 local road
agency under subsection (1)(g) are not subject to the revised
municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821.
(14) The department shall prepare on an annual basis a report
listing all warranties that were secured under subsection (2) and
indicate whether any of those warranties were redeemed and all
pavement projects whose costs exceed $2,000,000.00 for which a
warranty was not secured as described in subsection (2). The
department shall make the report required by this subsection
available to the public upon request and shall also post the report
on its website, which 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.
(15) As used in this section:
(a) "Local road agency" means that term as defined in section
9a.
(b) "Rail grade crossing improvement purposes" means 1 or more
of the following:
(i) The installation and modernization of active and passive
warning devices at railroad grade crossings.
(ii) The installation or improvement of grade crossing
surfaces.
(iii) Modification, relocation, or modernization of railroad
grade crossing active and passive warning devices necessitated by
roadway improvement projects.
(iv) Test installations of innovative warning devices or other
innovative applications.
(v) Construction of new grade separations.
(vi) A cash incentive payment made pursuant to under
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.
(vii) Any other work that would be eligible for funding under
the federal railroad-highway grade crossing improvement program or
other comparable programs.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
Enacting section 2. This amendatory act does not take effect
unless all of the following bills of the 99th Legislature are
enacted into law:
(a) Senate Bill No.____ or House Bill No. 6013 (request no.
05969'18).
(b) Senate Bill No.____ or House Bill No. 6015 (request no.
05971'18).