Bill Text: MI HB6014 | 2017-2018 | 99th Legislature | Engrossed

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Bill Title: Transportation; funds; funding for innovative materials and construction allocated to state trunk line fund; provide for. Amends secs. 10 & 11 of 1951 PA 51 (MCL 247.660 & 247.661) & adds sec. 10r. TIE BAR WITH: HB 6013'18, HB 6015'18

Spectrum: Partisan Bill (Republican 1-0)

Status: (Engrossed - Dead) 2018-09-05 - Referred To Committee On Transportation [HB6014 Detail]

Download: Michigan-2017-HB6014-Engrossed.html

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HB-6014, As Passed House, June 12, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 6014

 

 

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).