Bill Text: MI HB5305 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Transportation; funds; contracts between state transportation commission, county road commissions, and cities or villages; change bidding requirements. Amends secs. 11 & 11c of 1951 PA 51 (MCL 247.661 & 247.661c).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2012-01-31 - Printed Bill Filed 01/27/2012 [HB5305 Detail]

Download: Michigan-2011-HB5305-Introduced.html

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HOUSE BILL No. 5305

 

January 26, 2012, Introduced by Rep. Lori and referred to the Committee on Transportation.

 

     A bill to amend 1951 PA 51, entitled

 

"An act to provide for the classification of all public roads,

streets, and highways in this state, and for the revision of that

classification and for additions to and deletions from each

classification; to set up and establish the Michigan transportation

fund; to provide for the deposits in the Michigan transportation

fund of specific taxes on motor vehicles and motor vehicle fuels;

to provide for the allocation of funds from the Michigan

transportation fund and the use and administration of the fund for

transportation purposes; to promote safe and efficient travel for

motor vehicle drivers, bicyclists, pedestrians, and other legal

users of roads, streets, and highways; to set up and establish the

truck safety fund; to provide for the allocation of funds from the

truck safety fund and administration of the fund for truck safety

purposes; to set up and establish the Michigan truck safety

commission; to establish certain standards for road contracts for

certain businesses; to provide for the continuing review of

transportation needs within the state; to authorize the state

transportation commission, counties, cities, and villages to borrow

money, issue bonds, and make pledges of funds for transportation

purposes; to authorize counties to advance funds for the payment of

deficiencies necessary for the payment of bonds issued under this

act; to provide for the limitations, payment, retirement, and

security of the bonds and pledges; to provide for appropriations

and tax levies by counties and townships for county roads; to

authorize contributions by townships for county roads; to provide

for the establishment and administration of the state trunk line

fund, local bridge fund, comprehensive transportation fund, and

certain other funds; to provide for the deposits in the state trunk

line fund, critical bridge fund, comprehensive transportation fund,

and certain other funds of money raised by specific taxes and fees;

to provide for definitions of public transportation functions and

criteria; to define the purposes for which Michigan transportation

funds may be allocated; to provide for Michigan transportation fund

grants; to provide for review and approval of transportation

programs; to provide for submission of annual legislative requests

and reports; to provide for the establishment and functions of

certain advisory entities; to provide for conditions for grants; to

provide for the issuance of bonds and notes for transportation

purposes; to provide for the powers and duties of certain state and

local agencies and officials; to provide for the making of loans

for transportation purposes by the state transportation department

and for the receipt and repayment by local units and agencies of

those loans from certain specified sources; and to repeal acts and

parts of acts,"

 

by amending sections 11 and 11c (MCL 247.661 and 247.661c), section

 

11 as amended by 2002 PA 639 and section 11c as amended by 2002 PA

 

498.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 11. (1) A fund to be known as the state trunk line fund

 

is established and shall be set up and maintained in the state

 

treasury as a separate fund. The money deposited in the state trunk

 

line fund is appropriated to the state transportation department

 

for the following purposes in the following order of priority:

 

     (a) For the payment, but only from money restricted as to use

 

by section 9 of article IX of the state constitution of 1963, of

 

bonds, notes, or other obligations in the following order of

 

priority:

 

     (i) For the payment of contributions 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, which

 

contributions have been pledged before July 18, 1979, for the

 

payment of the principal and interest on bonds issued under 1941 PA

 

205, MCL 252.51 to 252.64, for the payment of which a sufficient

 

sum is irrevocably appropriated.

 

     (ii) For the payment of the principal and interest upon bonds

 

designated "State of Michigan, State Highway Commissioner, Highway

 

Construction Bonds, Series I", dated September 1, 1956, in the

 

aggregate principal amount of $25,000,000.00, issued pursuant to

 

former 1955 PA 87 and the resolution of the state administrative

 

board adopted August 6, 1956, for the payment of which a sufficient

 

sum is irrevocably appropriated.

 

     (iii) For the payment of the principal and interest on bonds

 

issued under section 18b for transportation purposes other than

 

comprehensive transportation purposes as defined by law and the

 

payment of contributions of 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 contracts entered

 

into under section 18d. , which contributions are pledged to the

 

payment of principal and interest on bonds issued under the

 

authorization of section 18d and contracts executed pursuant to

 

that section. A sufficient portion of the fund is irrevocably

 

appropriated to pay, when due, the principal and interest on bonds

 

or notes issued under section 18b for purposes other than

 

comprehensive transportation purposes as defined by law, and to pay

 

the annual contributions of the state highway commission and the

 

state transportation commission as that are pledged for the payment

 

of bonds issued pursuant to contracts authorized by section 18d.

 

     (b) For the transfer of funds appropriated pursuant to section

 

10(1)(g) 10(1)(h) to the transportation economic development fund,

 

but the transfer shall be reduced each fiscal year by the amount of

 

debt service to be paid in that year from the state trunk line fund

 

for bonds, notes, or other obligations issued to fund projects of

 

the transportation economic development fund, which amount shall be

 

certified by the department.

 

     (c) For the transfer of funds appropriated pursuant to section

 

10(1)(a) to the railroad grade crossing account in the state trunk

 

line fund for expenditure for rail grade crossing improvement

 

purposes at rail grade crossings on public roads and streets under

 

the jurisdiction of the this state, counties, cities, or villages.

 

Projects shall be selected for funding in accordance with the

 

following:

 

     (i) Not more than 50% or less than 30% of these funds and

 

matched federal funds shall be expended for state trunk line

 

projects.

 

     (ii) In prioritizing projects for these funds, in whole or in

 

part, the department shall consider train and vehicular traffic

 

volumes, accident history, traffic control device improvement

 

needs, and the availability of funding.

 

     (iii) Consistent with the other requirements for these funds,

 

the first priority for funds deposited pursuant to this subdivision

 

for rail grade crossing improvements and retirement shall be to

 

match federal funds from the railroad-highway grade crossing

 

improvement program or other comparable federal programs if a match

 

is required under federal law.

 

     (iv) If the department and the road authority with jurisdiction

 

over the crossing formally agree that the grade crossing should be

 

eliminated by permanent closing of the public road or street, the

 

physical removal of the crossing, roadway within railroad rights of

 

way, and street termination treatment will be negotiated between

 

the road authority and railroad company. The funds provided to the

 

road authority as a result of the crossing closure will be credited

 

to its account representing the same road or street system on which

 

the crossing is located and shall be used for any transportation

 

purpose within that road authority's jurisdiction.

 

     (d) For the total operating expenses of the state trunk line

 

fund for each fiscal year as appropriated by the legislature.

 

     (e) For the preservation of state trunk line highways and

 

bridges.

 

     (f) For the opening, widening, improving, construction, and

 

reconstruction of state trunk line highways and bridges, including

 

the acquisition of necessary rights of way and the work incidental

 

to that opening, widening, improving, construction, or

 

reconstruction. Those sums in the state trunk line fund not

 

otherwise appropriated, distributed, determined, or set aside by

 

law shall be used for the construction or reconstruction of the

 

national system of interstate and defense highways, referred to in

 

this act as "the interstate highway system", to the extent

 

necessary to match federal aid funds as the federal aid funds

 

become available for that purpose; and, for the construction and

 

reconstruction of the state trunk line system.

 

     (g) The state transportation department may enter into

 

agreements with county road commissions and with cities and

 

villages 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 state transportation department also may contract

 

with a county local road commission, city, and village agency to

 

advance money to a county local road commission, city, and village

 

agency to pay their 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 county local

 

road commission, city, or village agency, but the contract shall be

 

executed before the advancement of any money to a county local road

 

commission, city, or village agency by the state transportation

 

commission, and shall provide for the full reimbursement of any

 

advancement by a county local road commission, city, or village

 

agency to the state transportation department, with interest,

 

within 15 years after advancement, from any available revenue

 

sources of the county local road commission, city, or village

 

agency or, if provided in the contract, by deduction from the

 

periodic disbursements of any money returned by the state to the

 

county local road commission, city, or village.agency.

 

     (h) For providing inventories of supplies and materials

 

required for the activities of the state transportation department.

 

The state transportation department may purchase supplies and

 

materials for these purposes, with payment to be made out of the

 

state trunk line fund to be charged on the basis of issues from

 

inventory in accordance with the accounting and purchasing laws of

 

this state.

 

     (2) Notwithstanding any other provision of this act, at least

 

90% of state revenue appropriated annually to the state trunk line

 

fund less the amounts described in subdivisions (a) to (i) shall be

 

expended annually by the state transportation department for the

 

preservation of highways, roads, streets, and bridges and for the

 

payment of debt service on bonds, notes, or other obligations

 

described in subsection (1)(a) issued after July 1, 1983 , for the

 

purpose of providing funds for the preservation of highways, roads,

 

streets, and bridges. Of the amounts appropriated for state trunk

 

line projects, the department shall, where possible, secure

 

warranties of not less than 5-year full replacement guarantee for

 

contracted construction work. If an appropriate certificate is

 

filed under section 18e, but only to the extent necessary, this

 

subsection shall 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 of that debt service money

 

restricted as to use by section 9 of article IX of the state

 

constitution of 1963 and deposited in the state trunk line fund,

 

whenever issued, as specified under subsection (1)(a). The amounts

 

which that are deducted from the state trunk line fund for the

 

purpose of the calculation required by this subsection are as

 

follows:

 

     (a) Amounts expended for the purposes described in subsection

 

(1)(a) for the payment of debt service on bonds, notes, or other

 

obligations issued before July 2, 1983.

 

     (b) Amounts expended to provide the state matching requirement

 

for projects on the national highway system and for the payment of

 

debt service on bonds, notes, or other obligations issued after

 

July 1, 1983, for the purpose of providing funds for the state

 

matching requirements for projects on the national highway system.

 

     (c) Amounts expended for the construction of a highway,

 

street, road, or bridge to 1 or more of the following or for the

 

payment of debt service on bonds, notes, or other obligations

 

issued after July 1, 1983, for the purpose of providing funds for

 

the construction of a highway, street, road, or bridge to 1 or more

 

of the following:

 

     (i) A location for which a building permit has been obtained

 

for the construction of a manufacturing or industrial facility.

 

     (ii) A location for which a building permit has been obtained

 

for the renovation of, or addition to, a manufacturing or

 

industrial facility.

 

     (d) Amounts expended for capital outlay other than for

 

highways, roads, streets, and bridges or to pay debt service on

 

bonds, notes, or other obligations issued after July 1, 1983, for

 

the purpose of providing funds for capital outlay other than for

 

highways, roads, streets, and bridges.

 

     (e) Amounts expended for the operating expenses of the state

 

transportation department other than the units of the department

 

performing the functions assigned on January 1, 1983 to the bureau

 

of highways.

 

     (f) Amounts expended pursuant to contracts entered into before

 

January 1, 1983.

 

     (g) Amounts expended for the purposes described in subsection

 

(5).

 

     (h) Amounts appropriated for deposit in the transportation

 

economic development fund and the rail grade crossing account

 

pursuant to under section 10(1)(g) 10(1)(h) and 10(1)(a).

 

     (i) Upon the affirmative recommendation of the director of the

 

state transportation department and the approval by resolution of

 

the state transportation commission, those amounts expended for

 

projects vital to the economy of this state, a region, or local

 

area or the safety of the public. The resolution shall state the

 

cost of the project exempted from this subsection.

 

     (3) Notwithstanding any other provision of this act, the state

 

transportation department shall expend annually at least 90% of the

 

federal revenue distributed to the credit of the state trunk line

 

fund in that year, except for federal revenue expended for the

 

purposes described in subsection (2)(b), (c), (f), and (i) and for

 

the payment of notes issued under section 18b(9) on the

 

preservation of highways, roads, streets, and bridges. The

 

requirement of this subsection shall be is waived if compliance

 

would cause this state to be ineligible according to under federal

 

law for federal revenue, but only to the extent necessary to make

 

this state eligible according to under federal law for that

 

revenue.

 

     (4) Notwithstanding any other provision of this section, the

 

state transportation department may loan money to county a local

 

road commissions, cities, and villages 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 funds for the

 

purposes specified in subsection (1)(a) to (f). Loans described in

 

this subsection are not subject to the revised municipal finance

 

act, 2001 PA 34, MCL 141.2101 to 141.2821.

 

     (5) County A local road commissions, cities, and villages

 

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 county local road

 

commission, city, or village 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 under 1941

 

PA 205, MCL 252.51 to 252.64, or has been or may in the future be

 

pledged for the payment of the principal and interest upon notes

 

issued pursuant to 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 pursuant to 1952 PA 175,

 

MCL 247.701 to 247.707.

 

     (b) Any other legally available funds of the city, village, or

 

county local road commission agency, other than the general funds

 

of the county.

 

     (6) Loans If required by the department, loans made pursuant

 

to under subsection (4) if required by the state transportation

 

department may be are payable by deduction by the state treasurer,

 

upon direction of the state transportation department, from the

 

periodic disbursements of any money returned by the this state

 

under this act to the county local road commission, city, or

 

village agency, but only after sufficient money has been returned

 

to the county local road commission, city, or village 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

 

section 18b shall be established by the state transportation

 

department to conform as closely as practicable to the interest

 

rate and repayment schedules on the bonds or notes issued to make

 

the loans. However, the state transportation department may allow

 

for the deferral of the first payment of interest or principal on

 

the loans for a period of not to exceed 1 year after the respective

 

first payment of interest or principal on the bonds or notes issued

 

to make the loans.

 

     (7) The amount borrowed by a county local road commission,

 

city, or village pursuant to 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 county local road commission, city, or village 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 pursuant to 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 state transportation department shall

 

give at least 10 days' notice to the state treasurer of its

 

intention to make a loan under subsection (4). If the state

 

treasurer gives notice to the director of the state transportation

 

department within 10 days of after receiving the notice from the

 

state transportation department, that, based upon the then existing

 

financial or credit situation of the county local road commission,

 

city, or village agency, it would not be in the best interests of

 

the state to make a loan under subsection (4) to the county local

 

road commission, city, or village agency, the loan shall not be

 

made unless the state treasurer, after a hearing, if requested by

 

the affected county local road commission, city, or village agency,

 

subsequently gives notice to the director of the state

 

transportation department that the loan may be made on the

 

conditions that the state treasurer specifies.

 

     (9) The state transportation commission may borrow money and

 

issue bonds and notes under , and pursuant to the requirements of,

 

section 18b to make loans to county a local road commissions,

 

cities, and villages 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 department may borrow money from a local road agency,

 

if the local road agency has accumulated unexpended money from the

 

money distributed to the local road agency under this act, for the

 

purposes described in section 9 of article IX of the state

 

constitution of 1963 or for the purpose of matching federal funds

 

provided for transportation purposes. Money loaned to the

 

department from a local road agency under this subsection shall be

 

repaid according to the agreement between the local road agency and

 

the department.

 

     (11) (10) The director of the state transportation department,

 

after consultation with representatives of the interests of county

 

local road commissions, cities, and villages agencies, shall

 

establish, by intergovernmental communication, procedures for the

 

implementation and administration of the loan program established

 

under subsections (4) to (9).(10).

 

     (12) (11) Not more than 10% per year of all of the funds

 

received by and returned to the state transportation department

 

from any source for the purposes of this section may be expended

 

for administrative expenses. The department shall be subject to

 

section 14(5) if more than 10% per year is expended for

 

administrative expenses. As used in this subsection,

 

"administrative expenses" means those expenses that are not

 

assigned including, but not limited to, specific road construction

 

or preservation projects, and are often referred to as general or

 

supportive services. Administrative expenses shall do not include

 

net equipment expense, net capital outlay, debt service principal

 

and interest, and payments to other state or local offices which

 

that are assigned, but not limited to, specific road construction

 

projects or preservation activities.

 

     (13) (12) Any performance audits of the department shall be

 

conducted according to government auditing standards issued by the

 

United States general accounting office.

 

     (14) (13) Contracts entered into to advance money to a county

 

local road commission, city, or village agency under subsection

 

(1)(g) are not subject to the revised municipal finance act, 2001

 

PA 34, MCL 141.2101 to 141.2821.

 

     (15) (14) As used in this section, "rail grade crossing

 

improvement purposes" means 1 or more of the following:

 

     (a) The installation and modernization of active and passive

 

warning devices at railroad grade crossings.

 

     (b) The installation or improvement of grade crossing

 

surfaces.

 

     (c) Modification, relocation, or modernization of railroad

 

grade crossing active and passive warning devices necessitated by

 

roadway improvement projects.

 

     (d) Test installations of innovative warning devices or other

 

innovative applications.

 

     (e) Construction of new grade separations.

 

     (f) A cash incentive payment made pursuant to subsection

 

(1)(c)(iv) for any public road or street crossing, in an amount no

 

greater than the cost of installing flashing light signals and half

 

roadway gates at the crossing.

 

     (g) Any other work that would be eligible for funding under

 

the federal railroad-highway grade crossing improvement program or

 

other comparable programs.

 

     Sec. 11c. (1) All federal aid construction projects , all

 

other projects of the department or a local road agency concerning

 

highways, streets, roads, and bridges , whose cost exceeds

 

$100,000.00 for construction or preservation as defined in section

 

10c , shall be performed by contract awarded by competitive bidding

 

unless the department shall affirmatively find or the local road

 

agency affirmatively finds that under the circumstances relating to

 

those projects, some other method is in the public interest. All of

 

those The director of the department or the local road agency shall

 

report any findings shall be reported that a method other than

 

competitive bidding is in the public interest to the state

 

transportation commission 90 days before work is commenced and

 

promptly the award of a contract using a method other than

 

competitive bidding. The director of the department or the local

 

road agency shall also report a finding that a method other than

 

competitive bidding is in the public interest in writing to the

 

appropriations committees of the senate and house of

 

representatives not less than 60 days before the award of a

 

contract using a method other than competitive bidding. However, in

 

a case in which the department or a local road agency determines

 

emergency action is required, the reports need not be filed before

 

work is commenced a contract is awarded but shall be promptly

 

filed. Local road agencies that make a decision not to perform

 

construction or preservation projects exceeding $100,000.00 shall

 

contract for this work through competitive bidding.

 

     (2) Not later than September 30, 2013, the department shall

 

competitively bid and award a minimum of 1 contract for the full

 

performance of maintenance services of highways, streets, roads,

 

and bridges under its jurisdiction for an area not smaller than the

 

jurisdiction of 1 department service center. The director of the

 

department shall report results and findings made during the

 

contracting process and contract performance for all contracts

 

entered into under this subsection annually on December 1 of each

 

year to the appropriations committees of the senate and house of

 

representatives.

 

     (3) Not later than September 30, 2014, a local road agency

 

that received at least $20,000,000.00 in funding from the Michigan

 

transportation fund in calendar year 2010 shall competitively bid

 

and award a minimum of 1 contract for the full performance of

 

maintenance services for a minimum of 20% of the highways, streets,

 

roads, and bridges under the jurisdiction of that local road

 

agency. The chief executive of each local road agency required to

 

competitively bid under this subsection shall report results and

 

findings made during the contracting process and contract

 

performance for all contracts entered into under this subsection

 

annually by December 1 of each year to the director of the

 

department and to the appropriations committees of the senate and

 

house of representatives.

 

     (4) Not later than September 30, 2013, the department shall

 

competitively bid out the administrative and management activities

 

of the department in its entirety for a minimum of the

 

jurisdictional area of 1 department service center. The director of

 

the department shall report results and findings made during the

 

contracting process and contract performance for all contracts

 

entered into under this subsection annually on December 1 of each

 

year to the appropriations committees of the senate and house of

 

representatives.