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.