TRANSPORTATION FUNDS DISTRIBUTION FORMULA
House Bill 4182
Sponsor: Rep. Gloria Schermesser
Committee: Transportation
Complete to 2-18-99
A SUMMARY OF HOUSE BILL 4182 AS INTRODUCED 2-9-99
House Bill 4182 would amend the Michigan Transportation Fund act to ease some of the restrictions on the ways local governments use their major street and local street grants, distributed by the state from the Michigan Transportation Fund. Specifically, the bill would revise two provisions in section 13 of the act: the percentage caps on transfers from major to local street funds, and the out-year transfer assurance. Generally, House Bill 4182 would allow a city or village to maintain and improve its local street system using major street money, if its local match on local street projects was fulfilled, and if the local government notified the state.
Specifically, House Bill 4182 would require that the money distributed to cities and villages under section 13 be used on the major and local street systems of those cities and villages, and that the first priority be the major street system. However, money designated for the major street system could be used for the local street system if matched equally by local revenues and construction expenditures. If a city or village transferred more than 25 percent of its major street funding to the local street system, the local government would be required to adopt a resolution and send a copy to the transportation department. That resolution would include (1) a list of the major streets, (2) a statement that the major streets are adequately maintained, (3) the amount of the transfer, and (4) the local streets to be funded with the transfer.
Further, the bill retains language that specifies that when a local government forgoes or exceeds a shift of major street money to its local street system in any given year, then major street money received during the next succeeding two years may be transferred for expenditure on the local system until the amount so authorized for transfer was fully expended.
The bill also would leave unchanged the requirements in this section that no more than 10 percent of the returned funds be used for administrative expenses; that a single administrator be designated locally to coordinate projects; and, that interest earned on funds returned be credited to the appropriate street fund. The bill would also continue to allow cooperative agreements between state and local government for consolidated street administration.
Under current law, cities and villages receive funds for the maintenance and construction of some roads within their jurisdictions (including partial reimbursement for snow removal in areas with more than 80 inches annually). The money is allotted by a weighted formula
comprising population and road miles: specifically, the amount is returned 60 percent in the same proportion that the population of each bears to the total population of all incorporated cities and villages in the state, and 40 percent in the same proportion that the total mileage of the local street system of each bears to the total mileage in the local street systems of all cities and villages of the state. The amount of each allotment is determined by adding the state-certified trunk line miles (multiplied by two) plus the major local street miles (multiplied by a factor that depends on population, and that ranges from a low of 1.0 to a high of 2.1 increased successively by 0.1 for each 160,000 population increment over 320,000).
Seventy-five percent of the amount returned is used by cities and villages for the major street system: to fund bond repayment; highway projects jointly undertaken with the state transportation department; loan repayment; and the maintenance, improvement, construction, reconstruction, acquisition, and extension of their major street systems. Up to five percent of the funds can be used for roadside parks and motor parkways. The remaining amount returned is allocated using the same formula, and can be used for the same purposes, but for the local street system, except state funds expended for local streets must be matched from local revenues. Current law further requires that no more than 25 percent of the major street revenue may be used annually for local streets, although an additional 15 percent may be used in an emergency or with the permission of the Department of Transportation. Further, when a city does not transfer major street funds to the local street system in any given year, the city may transfer the appropriate matched amount from the major street allotment during the two subsequent years.
MCL 247.663
Analyst: J. Hunault