December 6, 2007, Introduced by Senators ALLEN and GILBERT and referred to the Committee on Commerce and Tourism.
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 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 the title and section 11 (MCL 247.661), the title as
amended by 2004 PA 384 and section 11 as amended by 2002 PA 639.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
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 make appropriations; 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.
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 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 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 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) to the transportation economic development fund, but the
transfer shall be reduced each fiscal year by the amount of debt
service to be paid in that year from the state trunk line fund for
bonds, notes, or other obligations issued to fund projects of the
transportation economic development fund, which amount shall be
certified by the department.
(c) For the transfer of funds appropriated pursuant to section
10(1)(a) to the railroad grade crossing account in the state trunk
line fund for expenditure for rail grade crossing improvement
purposes at rail grade crossings on public roads and streets under
the jurisdiction of the 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) Beginning for the state fiscal year that starts October 1,
2008, not less than $5,250,000.00 annually appropriated to the
Mackinac bridge authority created in section 2 of 1950 (Ex Sess) PA
21, MCL 254.302, to be used for capital improvement purposes.
(f) (e)
For the preservation of state trunk line highways and
bridges.
(g) (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.
(h) (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 to pay their 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.
(i) (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 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 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 section 10(1)(g) 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 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
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) (g). 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 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 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 made pursuant to subsection (4) if required by the
state transportation department may be payable by deduction by the
state treasurer, upon direction of the state transportation
department, from the periodic disbursements of any money returned
by the 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 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 subsection (5). The borrowing is not subject to
the revised municipal finance act, 2001 PA 34, MCL 141.2101 to
141.2821, or to section 5(g) of the home rule city act, 1909 PA
279, MCL 117.5. The state transportation department shall give at
least 10 days' notice to the state treasurer of its intention to
make a loan under subsection (4). If the state treasurer gives
notice to the director of the state transportation department
within 10 days of 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 not include net equipment expense,
net capital outlay, debt service principal and interest, and
payments to other state or local offices which 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) (1)(h) 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.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No. ___ or House Bill No.____ (request no.
05805'07) of the 94th Legislature is enacted into law.