HOUSE BILL No. 4932


     June 17, 1997, Introduced by Reps. Schermesser, Palamara, Mans, Goschka, Hanley, Hale, Baade, Wojno, Varga, Profit, Callahan, Brown, Thomas, Schauer, Wetters, Prusi, Kelly, DeHart, Scott and Leland and referred to the Committee on Appropriations.


        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 clas-
   sification; 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 trans-
   portation fund and the use and administration of the fund for
   transportation purposes; 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 pur-
   poses; to set up and establish the Michigan truck safety commis-
   sion; 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 deficien-
   cies 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,
   critical bridge fund, comprehensive transportation fund, and cer-
   tain 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


   03553'97                                                 TJS
                                              2


   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 leg-
   islative requests and reports; to provide for the establishment
   and functions of certain advisory entities; to provide for condi-
   tions 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 certain acts and parts of acts,"

   by amending section 13 (MCL 247.663), as amended by 1993 PA 294.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         Sec. 13.  (1) The amount distributed to cities and villages

 2    shall be returned to the treasurers of the cities and villages in

 3    the manner, for the purposes, and under the terms and conditions

 4    specified in this section.  As used in this section, "population"

 5    means the population according to the most recent statewide fed-

 6    eral census as certified at the beginning of the state fiscal

 7    year, except that, if a municipality has been newly incorporated

 8    since completion of the census, the population of the municipal-

 9    ity for purposes of the distribution of funds before completion

10    of the next census shall be the population as determined by spe-

11    cial federal census, if there is a census, and if not, by the

12    population as determined by the official census in connection

13    with the incorporation, if there is such a census and, if not, by

14    a special state census to be taken at the expense of the munici-

15    pality by the secretary of state pursuant to section 6 of  Act

16     No. 279 of the Public Acts of 1909, as amended, being section

17     117.6 of the Michigan Compiled Laws  1909 PA 279, MCL 117.6.  The



   03553'97
                                   3

 1    amount received by the newly incorporated municipality shall be

 2    in place of any other direct distribution of funds from the

 3    Michigan transportation fund.  The population of the newly incor-

 4    porated municipality as determined under this section shall be

 5    added to the total population of all incorporated cities and vil-

 6    lages in the state in computing the amounts to be returned under

 7    this section to each municipality in the state.  Major street

 8    mileage, local street mileage, and equivalent major mileage, if

 9    applicable, shall be determined by the state transportation

10    department before the next month for which distribution is made

11    following the effective date of incorporation of a newly incorpo-

12    rated municipality.

13         (2) From the amount available for distribution to cities and

14    villages during each December, an amount equal to 0.7% of the

15    total amount returned to all cities and villages under subsec-

16    tions (3) and (4) during the previous calendar year shall be

17    withheld.  The amount withheld shall be used to partially reim-

18    burse those cities and villages located in those counties that

19    are eligible for snow removal funds pursuant to section 12a and

20    that have costs for winter maintenance on major and local streets

21    that are greater than the statewide average.  The distributions

22    shall be made annually during February and shall be calculated

23    separately for the major and local street systems but may be paid

24    in a combined warrant.  The distribution to a city or village

25    shall be equal to 1/2 of its winter maintenance expenditures

26    after deducting the product of its total earnings under

27    subsections (3) and (4) multiplied by 2 times the average



   03553'97
                                   4

 1    municipal winter maintenance factor.  Winter maintenance

 2    expenditures shall be determined from the street financial

 3    reports for the most current fiscal years ending before July 1.

 4    A city or village that does not submit a street financial report

 5    for the fiscal year ending before July 1 by the subsequent

 6    December 31 shall be ineligible for the winter maintenance pay-

 7    ment that is to be based on that street financial report.  The

 8    average municipal winter maintenance factor shall be determined

 9    annually by the state transportation department by dividing the

10    total expenditures of all cities and villages on winter mainte-

11    nance of streets and highways by the total amount earned by all

12    cities and villages under subsections (3) and (4) during the 12

13    months.  If the sum of the distributions to be made under this

14    subsection exceeds the amount withheld, the distributions to each

15    eligible city and village shall be reduced proportionately.  If

16    the sum is less than the amount withheld, the balance shall be

17    added to the amount available for distribution under subsections

18    (3) and (4) during the next month.  The distributions shall be

19    for use on the major and local street systems respectively and

20    shall be subject to the same provisions as funds returned under

21    subsections (3) and (4).

22         (3) Seventy-five percent of the remaining amount to be

23    returned to the cities and villages, after deducting the amounts

24    withheld pursuant to subsection (2), shall be returned 60% in the

25    same proportion that the population of each bears to the total

26    population of all cities and villages, and 40% in the same

27    proportion that the equivalent major mileage in each bears to the



   03553'97
                                   5

 1    total equivalent major mileage in all cities and villages.  As

 2    used in this section, "equivalent major mileage" means the sum of

 3    2 times the state trunk line mileage certified by the state

 4    transportation department as of March 31 of each year, as being

 5    within the boundaries of each city and village having a popula-

 6    tion of 25,000 or more, plus the major street mileage in each

 7    city and village, multiplied by the following factor:

 8         1.0 for cities and villages of 2,000 or less population;

 9         1.1 for cities and villages from 2,001 to 10,000 population;

10         1.2 for cities and villages from 10,001 to 20,000 popula-

11    tion;

12         1.3 for cities and villages from 20,001 to 30,000 popula-

13    tion;

14         1.4 for cities and villages from 30,001 to 40,000 popula-

15    tion;

16         1.5 for cities and villages from 40,001 to 50,000 popula-

17    tion;

18         1.6 for cities and villages from 50,001 to 65,000 popula-

19    tion;

20         1.7 for cities and villages from 65,001 to 80,000 popula-

21    tion;

22         1.8 for cities and villages from 80,001 to 95,000 popula-

23    tion;

24         1.9 for cities and villages from 95,001 to 160,000 popula-

25    tion;

26         2.0 for cities and villages from 160,001 to 320,000

27    population;



   03553'97
                                   6

 1    and for cities over 320,000 population, by a factor of 2.1

 2    increased successively by 0.1 for each 160,000 population incre-

 3    ment over 320,000.  The amount returned under this subsection

 4    shall be used by each city and village for the following purposes

 5    in the following order of priority:

 6         (a) For the payment of contributions required to be made by

 7    a city or village under the provisions of contracts previously

 8    entered into under  Act No. 205 of the Public Acts of 1941, as

 9     amended, being sections 252.51 to 252.64 of the Michigan Compiled

10     Laws  1941 PA 205, MCL 252.51 TO 252.64, which contributions have

11    been previously pledged for the payment of the principal and

12    interest on bonds issued under that act; or for the payment of

13    the principal and interest upon bonds issued by a city or village

14    pursuant to  Act No. 175 of the Public Acts of 1952, as amended,

15     being sections 247.701 to 247.707 of the Michigan Compiled Laws 

16    1952 PA 175, MCL 247.701 TO 247.707.

17         (b) Payment of obligations of the city or village on highway

18    projects undertaken by the city or village jointly with the state

19    transportation department.

20         (c) For the payment of principal and interest upon loans

21    received pursuant to section 11(7), to the extent other funds

22    have not been made available for that payment.

23         (d) For the maintenance, improvement, construction, recon-

24    struction, acquisition, and extension of the major street system

25    as defined by this act including the acquisition of a necessary

26    right of way for the system, work incidental to the system, and

27    an appurtenant roadside park or motor parkway, of the city or



   03553'97
                                   7

 1    village and for the payment of the principal and interest on that

 2    portion of the city's or village's general obligation bonds which

 3    are attributable to the construction or reconstruction of the

 4    city's or village's major street system.  Not more than 5% per

 5    year of the funds returned to a city or village by this subsec-

 6    tion shall be expended for the maintenance, improvement, or

 7    acquisition of appurtenant roadside parks and motor parkways.

 8    Surplus funds may be expended for the development, construction,

 9    or repair of off-street parking facilities, and the construction

10    or repair of street lighting.

11         (4) The remaining amount to be returned to incorporated

12    cities and villages shall be expended in each city or village for

13    the maintenance, improvement, construction, reconstruction,

14    acquisition, and extension of the local street system of the city

15    or village, as defined by this act, including the acquisition of

16    a necessary right of way for the system,  .  Work  WORK inciden-

17    tal to the system, and subject to subsection (5), for the payment

18    of the principal and interest on that portion of the city's or

19    village's general obligation bonds which are attributable to the

20    construction or reconstruction of the city's or village's local

21    street system.  The amount returned under this subsection shall

22    be returned to the cities and villages 60% in the same proportion

23    that the population of each bears to the total population of all

24    incorporated cities and villages in the state, and 40% in the

25    same proportion that the total mileage of the local street system

26    of each bears to the total mileage in the local street systems of

27    all cities and villages of the state.  The payment of the



   03553'97
                                   8

 1    principal and interest upon bonds issued by a city or village

 2    pursuant to  Act No. 175 of the Public Acts of 1952, as amended 

 3    1952 PA 175, MCL 247.701 TO 247.707, and after that payment, the

 4    payment of debt service on loans received under section 11(7),

 5    shall have priority in the expenditure of money returned under

 6    this subsection.

 7         (5) Money distributed to each city and village for the main-

 8    tenance and improvement of its local street system under this act

 9    represents the total responsibility of the state for local street

10    system support.  Funds distributed from the Michigan transporta-

11     tion fund shall not be expended for construction purposes on city

12     and village local streets except to the extent matched from local

13     revenues including other money returned to a city or village by

14     the state under the state constitution of 1963 and statutes of

15     the state, from funds that can be raised by taxation in cities

16     and villages for street purposes within the limitations of the

17     state constitution of 1963 and statutes of the state, from spe-

18     cial assessments, or from any other source.  This subsection does

19     not apply to section 11b. 

20         (6) Money returned under this section to a city or village

21    shall be expended as follows:

22          (a) Not to exceed 25% per year of the amount returned to a

23     city or village for use on the major street system, may be

24     expended on the local street system of that city or village and

25     not to exceed an additional 15% per year of the amount returned

26     to an incorporated city or village for expenditure on the major

27     street system, may, in case of an emergency or with the approval



   03553'97
                                   9

 1    of the state transportation department, be expended on the local

 2     street system of that city or village. 

 3         (A)  (b)  Money returned for expenditure on the major street

 4    system may be expended on the local street system.  in an amount

 5     equal to the amount of local revenues, as provided in subsection

 6     (5), expended by the city or village on the major street system

 7     or on state trunk line highways, and to the extent that that

 8     amount of major street money is not transferred for expenditure

 9     on the local street system in that year, major street money

10     received during the next succeeding 2 years may be transferred

11     for expenditure on the local system until the amount so autho-

12     rized for transfer is fully expended. 

13         (B)  (c)  The amount returned to a city or village for

14    expenditure on the local STREET system or a portion of that

15    amount may be expended on the major street system of that city or

16    village.

17         (C)  (d)  Not more than 10% per year of the funds returned

18    under subsections (3) and (4) to a city or village may be

19    expended for administrative expenses.  A city or village which in

20    a year expends more than 10% for administrative expenses shall be

21    subject to section 14(5).

22         (7) In each city and village to which funds are returned

23    under this section, the responsibility for street improvement,

24    maintenance, and traffic operation work, and the development,

25    construction, or repair of off-street parking facilities and con-

26    struction or repair of street lighting shall be coordinated by a

27    single administrator to be designated by the governing body who



   03553'97
                                  10

 1    shall be responsible for and shall represent the municipality in

 2    transactions with the state transportation department pursuant to

 3    this act.

 4         (8) Cities and villages may provide for consolidated street

 5    administration.  A city or a village may enter into an agreement

 6    with other cities or villages, the county road commission, or

 7    with the state transportation commission for the performance of

 8    street or highway work on a road or street within the limits of

 9    the city or village or adjacent to the city or village.  The

10    agreement may provide for the performance by any of the contract-

11    ing parties of the work contemplated by the contracts including

12    services and acquisition of rights of way, by purchase or condem-

13    nation by any of the contracting parties in its own name.  The

14    agreement may provide for joint participation in the costs if

15    appropriate.

16         (9) Interest earned on funds returned to a city or a village

17    for purposes provided in this section shall be credited to the

18    appropriate street fund.





















   03553'97          Final page.                            TJS