Bill Text: MI SB1181 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Highways; construction and repair; maintenance work on state trunk line highways; require state to give preference to and solicit bids from county road commissions. Amends secs. 11 & 11c of 1951 PA 51 (MCL 247.661 & 247.661c).

Spectrum: Partisan Bill (Republican 3-0)

Status: (Introduced - Dead) 2012-06-13 - Referred To Committee On Transportation [SB1181 Detail]

Download: Michigan-2011-SB1181-Introduced.html

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SENATE BILL No. 1181

 

 

June 13, 2012, Introduced by Senators BOOHER, HANSEN and CASPERSON 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 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 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 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 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 road commission, city,

 

and village to advance money to a county 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 road commission, city, or village, but the contract shall be

 

executed before the advancement of any money to a county road

 

commission, city, or village by the state transportation

 

commission, and shall provide for the full reimbursement of any

 

advancement by a county road commission, city, or village to the

 

state transportation department, with interest, within 15 years

 

after advancement, from any available revenue sources of the county

 

road commission, city, or village or, if provided in the contract,

 

by deduction from the periodic disbursements of any money returned

 

by the state to the county road commission, city, or village.

 

Beginning on October 1, 2012, in entering into a contract under

 

this subdivision or under section 11c, the department shall solicit

 

bids from and give preference to a county road commission for work

 

to be performed on a state trunk line highway within that county.

 

     (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 road

 

commissions, cities, and villages 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 road commissions, cities, and villages 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 road commission,

 

city, or village 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 road commission, 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 road commission, city, or village, but

 

only after sufficient money has been returned to the county road

 

commission, city, or village 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 road commission, city, or

 

village pursuant to 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 road commission, city, or village 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) 5(1)(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 road

 

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

 

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

 

commission, city, or village, the loan shall not be made unless the

 

state treasurer, after a hearing, if requested by the affected

 

county road commission, city, or village, 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 road commissions, cities, and

 

villages 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 state transportation department,

 

after consultation with representatives of the interests of county

 

road commissions, cities, and villages, 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 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.

 

     (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 county road

 

commission, city, or village under subsection (1)(g) are not

 

subject to the revised municipal finance act, 2001 PA 34, MCL

 

141.2101 to 141.2821.

 

     (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. All Subject to section 11(1)(g), all federal aid

 

construction projects, all other projects of the department

 

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 finds that

 

under the circumstances relating to those projects, some other

 

method is in the public interest. All of those The department shall

 

report its findings shall be reported to the state transportation

 

commission 90 days before work is commenced and promptly in writing

 

to the appropriations committees of the senate and house of

 

representatives. However, in a case in which the department

 

determines emergency action is required, the reports need not be

 

filed before work is commenced 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.