This is our starting text

SB-0445, As Passed Senate, November 27, 2012

SUBSTITUTE FOR

SENATE BILL NO. 445

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 10b, 10c, 10d, 10e, 10h, 10l, and 10n (MCL

247.660b, 247.660c, 247.660d, 247.660e, 247.660h, 247.660l, and

247.660n), section 10b as amended by 1982 PA 438, section 10c as

amended by 2010 PA 257, section 10e as amended by 2008 PA 487,

section 10h as amended by 2002 PA 498, section 10l as amended by

1987 PA 234, and section 10n as amended by 2002 PA 329.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 10b. (1) A fund to be known as the comprehensive

transportation fund is established and shall be set up and

maintained in the state treasury as a separate fund. In addition to

the money distributed to the comprehensive transportation fund

pursuant to this act, the money authorized to be credited to the

comprehensive transportation fund pursuant to section 25 of the

general sales tax act ~~, Act No. 167 of the Public Acts of 1933, as~~

~~amended, being section 205.75 of the Michigan Compiled Laws,~~ 1933

PA 167, MCL 205.75, shall be deposited in the comprehensive

transportation fund and is appropriated to the ~~state transportation~~

department for the purposes described in section 10e.

(2) The comprehensive transportation fund shall be

administered by the ~~state transportation~~ department in accordance

with this act.

(3) The general functions of the ~~state transportation~~

department in the administration of funds for comprehensive

transportation services shall include the following:

(a) Establishing public transportation procedures and

administrative practices for which there is a clear requirement for

uniformity statewide.

(b) Planning and providing for the current and long-range

development of a system of public transportation in areas for which

an eligible authority or eligible governmental agency does not

exist.

recommendations for improvement to the state transportation

commission for forwarding to the legislature.

(d) Encouraging, coordinating, and administering grants for

research and demonstration projects to develop the application of

new ideas and concepts in public transportation facilities and

services as applied to state as opposed to nationwide problems.

(e) Performing each function necessary to comply fully with

present or future federal transportation acts.

(f) ~~Administering~~ Except as provided in section 8 of the

regional transit authority act, administering and distributing

money from the comprehensive transportation fund and the proceeds

of notes and bonds sold for public transportation purposes. If

money is raised by an eligible authority or an eligible

governmental agency for a public transportation capital outlay

project funded pursuant to sections 3, 5, and 6 of the urban mass

transportation act of 1964, 49 ~~U.S.C.~~ USC 1602, 1604, and 1605, or

federal law codified in 23 ~~U.S.C.~~ USC 101 to 407, ~~the~~ this state

shall pay not less than 66-2/3% of the local match. ~~The~~ This state

shall not expend money as a local match or otherwise, and an

eligible authority or eligible governmental agency shall not expend

money distributed pursuant to this act, as a local match or

otherwise, for the preliminary or final construction engineering

plans or the construction of a subway system within the area of the

southeastern Michigan transportation authority until that

expenditure is approved by concurrent resolution of the

legislature. The concurrent resolution shall be approved on a

record roll call vote of each house. ~~The~~ This state shall not

expend money for the construction, operation, or maintenance of a

commuter boat service system within a county which is a member of

the southeastern Michigan transportation authority until approved

by concurrent resolution of the legislature. The concurrent

resolution shall be approved on a record roll call vote of each

house.

(g) Applying for, receiving, and accepting any grant, gift,

contribution, loan, or other assistance in the form of money,

property, labor, and any other form from a public or private

source, including assistance from an agency or instrumentality of

the United States and doing each thing as is necessary to apply

for, receive, and administer that assistance in accordance with the

laws of this state.

(h) Promulgating rules for the implementation and

administration of the comprehensive transportation fund, pursuant

to the administrative procedures act of 1969 ~~, Act No. 306 of the~~

~~Public Acts of 1969, as amended, being sections 24.201 to 24.315 of~~

~~the Michigan Compiled Laws.~~1969 PA 306, MCL 24.201 to 24.328.

(i) Issuing bonds or notes for public transportation purposes

in accordance with this act.

(j) Making direct expenditures, loans, grants, or guaranteeing

lease costs to public and private corporations for public

transportation purposes using the comprehensive transportation fund

or using as appropriate, the proceeds of notes and bonds authorized

by section 18b.

Sec. 10c. As used in this act:

(a) "Urban or rural area" means a contiguous developed area,

including the immediate surrounding area, where transportation

services should reasonably be provided presently or in the future;

the area within the jurisdiction of an eligible authority; or for

the purpose of receiving funds for public transportation, a

contiguous developed area having a population of less than 50,000

that has an urban public transportation program approved by the

state transportation department and for which the state

transportation commission determines that public transportation

services should reasonably be provided presently or in the future.

(b) "Eligible authority" means an authority organized under

the metropolitan transportation authorities act of 1967, 1967 PA

204, MCL 124.401 to 124.426.

village or an authority created under 1963 PA 55, MCL 124.351 to

124.359; the urban cooperation act of 1967, 1967 (Ex Sess) PA 7,

MCL 124.501 to 124.512; 1967 (Ex Sess) PA 8, MCL 124.531 to

124.536; 1951 PA 35, MCL 124.1 to 124.13; the public transportation

authority act, 1986 PA 196, MCL 124.451 to 124.479; or the revenue

bond act of 1933, 1933 PA 94, MCL 141.101 to 141.140.

(d) "Transit vehicle" means a bus, rapid transit vehicle,

railroad car, street railway car, water vehicle, taxicab, or other

type of public transportation vehicle or individual unit, whether

operated singly or in a group ~~which~~ that provides public

transportation.

(e) "Transit vehicle mile" means a transit vehicle operated

for 1 mile in public transportation service including demand

actuated and line-haul vehicle miles.

(f) "Demand actuated vehicle" means a bus or smaller transit

vehicle operated for providing group rides to members of the

general public paying fares individually, and on demand rather than

in regularly scheduled route service.

(g) "Demand actuated vehicle mile" means a demand actuated

vehicle operated for 1 mile in service to the general public.

(h) "Public transportation", "comprehensive transportation",

"public transportation service", "comprehensive transportation

service", "public transportation purpose", or "comprehensive

transportation purpose" means the movement of people and goods by

publicly or privately owned water vehicle, bus, railroad car,

street railway, aircraft, rapid transit vehicle, taxicab, or other

conveyance ~~which~~ that provides general or special service to the

public, but not including charter or sightseeing service or

transportation which is exclusively for school purposes. Public

transportation, public transportation services, or public

transportation purposes; and comprehensive transportation,

comprehensive transportation services, or comprehensive

transportation purposes as defined in this subdivision are declared

by law to be transportation purposes within the meaning of section

9 of article IX of the state constitution of 1963.

(i) "State transportation commission" or "commission" means

the state transportation commission established in section 28 of

article V of the state constitution of 1963.

(j) "Governmental unit" means the state transportation

department, the state transportation commission, a county road

commission, a city, or a village.

(k) "Department" or "department of transportation" means the

state transportation department, the principal department of state

government created under section 350 of the executive organization

act of 1965, 1965 PA 380, MCL 16.450.

(l) "Preservation" means an activity undertaken to preserve the

integrity of the existing roadway system. Preservation does not

include new construction of highways, roads, streets, or bridges, a

project that increases the capacity of a highway facility to

accommodate that part of traffic having neither an origin nor

destination within the local area, widening of a lane width or

more, or adding turn lanes of more than 1/2 mile in length.

Preservation includes, but is not limited to, 1 or more of the

following:

(i) Maintenance.

(ii) Capital preventive treatments.

(iii) Safety projects.

(iv) Reconstruction.

(v) Resurfacing.

(vi) Restoration.

(vii) Rehabilitation.

(viii) Widening of less than the width of 1 lane.

(ix) Adding auxiliary weaving, climbing, or speed change lanes.

(x) Modernizing intersections.

(xi) Adding auxiliary turning lanes of 1/2 mile or less.

(xii) Installing traffic signs in new locations, installing

signal devices in new locations, and replacing existing signal

devices.

(m) "Maintenance" means routine maintenance or preventive

maintenance, or both. Maintenance does not include capital

preventive treatments, resurfacing, reconstruction, restoration,

rehabilitation, safety projects, widening of less than 1 lane

width, adding auxiliary turn lanes of 1/2 mile or less, adding

auxiliary weaving, climbing, or speed-change lanes, modernizing

intersections, or the upgrading of aggregate surface roads to hard

surface roads. Maintenance of state trunk line highways does not

include streetlighting except for freeway lighting for traffic

safety purposes.

(n) "Routine maintenance" means actions performed on a regular

or controllable basis or in response to uncontrollable events upon

a highway, road, street, or bridge. Routine maintenance includes,

but is not limited to, 1 or more of the following:

(i) Snow and ice removal.

(ii) Pothole patching.

(iii) Unplugging drain facilities.

(iv) Replacing damaged sign and pavement markings.

(v) Replacing damaged guardrails.

(vi) Repairing storm damage.

(vii) Repair or operation of traffic signs and signal systems.

(viii) Emergency environmental cleanup.

(ix) Emergency repairs.

(x) Emergency management of road closures that result from

uncontrollable events.

(xi) Cleaning streets and associated drainage.

(xii) Mowing roadside.

(xiii) Control of roadside brush and vegetation.

(xiv) Cleaning roadside.

(xv) Repairing lighting.

(xvi) Grading.

(o) "Preventive maintenance" means a planned strategy of cost-

effective treatments to an existing roadway system and its

appurtenances that preserve assets by retarding deterioration and

maintaining functional condition without significantly increasing

structural capacity. Preventive maintenance includes, but is not

limited to, 1 or more of the following:

(i) Pavement crack sealing.

(ii) Micro surfacing.

(iii) Chip sealing.

(iv) Concrete joint resealing.

(v) Concrete joint repair.

(vi) Filling shallow pavement cracks.

(vii) Patching concrete.

(viii) Shoulder resurfacing.

(ix) Concrete diamond grinding.

(x) Dowel bar retrofit.

(xi) Bituminous overlays of 1-1/2 inches or less in thickness.

(xii) Restoration of drainage.

(xiii) Bridge crack sealing.

(xiv) Bridge joint repair.

(xv) Bridge seismic retrofit.

(xvi) Bridge scour countermeasures.

(xvii) Bridge painting.

(xviii) Pollution prevention.

(xix) New treatments as they may be developed.

(p) "County road commission" means the board of county road

commissioners elected or appointed pursuant to section 6 of chapter

IV of 1909 PA 283, MCL 224.6, or, in the case of a charter county

with a population of 750,000 or more with an elected county

executive that does not have a board of county road commissioners,

the county executive for ministerial functions and the county

commission provided for in section 14(1)(d) of 1966 PA 293, MCL

45.514, for legislative functions. In addition, if a board of

county road commissioners is dissolved as provided in section 6 of

chapter IV of 1909 PA 283, MCL 224.6, county road commission

includes the county board of commissioners of the county.

(q) "Capital preventive treatments" means any preventive

maintenance category project on state trunk line highways that

qualifies under the department's capital preventive maintenance

program.

(r) "Public transit region" means that term as defined in the

regional transit authority act.

(s) "Regional transit authority" means an authority created

under the regional transit authority act.

Sec. 10d. The comprehensive transportation fund shall be

distributed to eligible authorities for public transportation

purposes, distributed to eligible governmental agencies which are

not within the jurisdiction of an eligible authority for public

transportation purposes, distributed to a regional transit

authority, for public transportation purposes, and expended by the

department ~~of transportation~~ for public transportation purposes. A

distribution to an eligible governmental agency located within the

jurisdiction of an eligible authority for public transportation

purposes may be made directly if the eligible governmental agency

was providing public transportation service on January 3, 1973.

Except for an eligible governmental agency which was providing

public transportation service on January 3, 1973, distribution for

public transportation purposes may be made directly to an eligible

governmental agency located within the jurisdiction of an eligible

governmental agency or eligible authority which is providing public

transportation service on the date of the creation of the

comprehensive transportation fund, only if approved by the eligible

governmental agency or eligible authority in which the eligible

governmental agency is located. Further, except for an eligible

governmental agency or eligible authority in whose jurisdiction is

located an eligible governmental agency ~~which~~ that was providing

public transportation service on January 3, 1973, a distribution

may be made directly to an eligible governmental agency or eligible

authority in whose jurisdiction is located an eligible governmental

agency ~~which~~ that is providing public transportation service on the

date of the creation of the comprehensive transportation fund, only

if approved by the eligible governmental agency located within the

eligible governmental agency or eligible authority. A county ~~which~~

that withdraws from an eligible authority shall not be considered

to be within the jurisdiction of the eligible authority.

Sec. 10e. (1) The comprehensive transportation fund is

appropriated for each fiscal year in the following order of

priority.

(2) The first priority is to pay, but only from money

restricted as to use by section 9 of article IX of the state

constitution of 1963, the principal and interest on bonds or notes

issued under section 18b for comprehensive transportation purposes

as defined by law. A sufficient portion of the comprehensive

transportation fund is irrevocably appropriated to pay, when due,

the principal and interest on those bonds and notes.

(3) After making or setting aside payments required by

subsection (2), the second priority of the comprehensive

transportation fund is the payment of the department's cost in

administering the comprehensive transportation fund. The amount to

be expended pursuant to this subsection shall not exceed the costs

appropriated for the administration of the fund in the fiscal year

ending September 30, 1987, as adjusted annually on October 1, by

the change for the preceding 12 months in the Detroit consumer

price index for urban wage earners and shall be appropriated

annually by the legislature.

(4) After making or setting aside payments required by

subsections (2) and (3), the balance of the comprehensive

transportation fund shall be expended each fiscal year as

appropriated annually by the legislature pursuant to the state

transportation program approved by the commission as follows:

(a) The third priority shall be the payment of operating

grants to eligible authorities and eligible governmental agencies

according to the following formulations and subject to the

following requirements:

(i) For the fiscal year ending September 30, 1998, and for each

fiscal year thereafter, each eligible authority and eligible

governmental agency ~~which~~ that provides public transportation

services in urbanized areas under 49 USC 5307, with a Michigan

population greater than 100,000 shall receive a grant of up to 50%

of their eligible operating expenses as defined by the ~~state~~

~~transportation~~ department.

(ii) For the fiscal year ending September 30, 1998, and each

fiscal year thereafter, each eligible authority and eligible

governmental agency ~~which~~ that provides public transportation

services in urbanized areas with a Michigan population less than or

equal to 100,000 and nonurbanized areas under 49 USC 5311, shall

receive a grant of up to 60% of their eligible operating expenses

as defined by the ~~state transportation~~ department. For purposes of

receiving a grant under this subparagraph in nonurbanized areas,

eligible costs of services provided by water vehicle shall be

reimbursed at not less than 50% of the portion of the costs not

eligible for reimbursement by the federal government.

(iii) Funds shall not be distributed to an eligible authority or

eligible governmental agency under this act unless the eligible

authority or eligible governmental agency provides or agrees to

provide preferential fares for public transportation services to

persons 65 years of age or over or persons with disabilities riding

in off peak periods of service. As used in this section, "person

with disabilities" means an individual with a disability as that

term is defined in 61 ~~FRP~~ FR 56424 (November 1, 1996) and 49 CFR

part 27. The preferential fares shall not be higher than 50% of the

regular 1-way single fare.

(iv) Eligible authorities and eligible governmental agencies

shall not engage in charter service using vehicles, facilities, or

equipment funded under this act except on an incidental basis as

defined by 49 CFR part 604.

(v) Notwithstanding any other provision of this subsection,

for the fiscal year ending September 30, 1998, each eligible

authority and eligible governmental agency shall receive a

distribution from the comprehensive transportation fund not less

than the distribution received for eligible operating expenses for

the fiscal year ending September 30, 1997. Beginning with the

fiscal year ending September 30, 1998 and each fiscal year

thereafter, each eligible authority and eligible governmental

agency shall receive a distribution from the comprehensive

transportation fund for eligible operating expenses not less than

the distribution received for the fiscal year ending September 30,

1997. As it relates to this subsection the ratio between

comprehensive transportation funds and local funds in the fiscal

year ending September 30, 1989 shall be maintained for all fiscal

years by the eligible authority and eligible governmental agency.

Reductions in this ratio shall require a proportionate reduction in

the comprehensive transportation funds provided for any fiscal

year.

(vi) Each eligible authority and eligible governmental agency

receiving comprehensive transportation funds shall prepare and

submit to the department a quarterly report of the progress made in

carrying out its local transportation program within 40 days after

the end of each fiscal year quarter. The progress report shall be

made on forms authorized by the United States department of

transportation under the provisions of the surface transportation

and uniform relocation assistance act of 1987, Public Law 100-17,

101 Stat. 132.

(vii) The department shall periodically adjust or redistribute

comprehensive transportation funds previously distributed under

this subdivision.

(b) For the fiscal year ending September 30, 1997, and each

fiscal year thereafter, not less than 10% shall be distributed by

the department for intercity passenger and intercity freight

transportation purposes.

fiscal year thereafter, funds remaining in the fund after payment

of the amounts required by subdivisions (a) and (b) shall be

distributed by the department for public transportation purposes.

For the fiscal year ending September 30, 1998, and each fiscal year

thereafter, funds shall be made available to match all projects for

eligible authorities and eligible governmental agencies that are

approved for federal funding as provided by federal law and for

which an approved transportation improvement program (TIP) and

state transportation improvement plan (STIP) exist. Funds

distributed under this subdivision shall be expended pursuant to

specific line item appropriation for, but are not limited to, the

following public transportation purposes:

(i) The specialized services assistance program. The

specialized services assistance program shall be funded with not

less than $3,600,100.00 from funds distributed under this

subdivision. Funds shall be distributed according to guidelines

developed by the department based upon the following

considerations:

(A) Proposals for coordinated specialized services assistance

funding shall be developed jointly between existing eligible

authorities or eligible governmental agencies that provide public

transportation services and the area agencies on aging or any other

organization representing specialized services interests, as

defined in this subdivision. Plans shall be reviewed and approved

by the bureau of urban and public transportation of the department.

Upon approval, the department shall release the funds to the

eligible authority or eligible governmental agency which shall then

allocate the funds to the area agency on aging or any other

organization representing specialized services interests, as

defined in this subdivision for the purchase of services as

approved in the plan by the department.

(B) If an eligible authority or eligible governmental agency

does not exist to provide public transportation service in a

county, coordinated proposals for specialized services assistance

funding may be submitted by the area agency on aging or any other

organization representing specialized services interests, as

defined in this subdivision. The proposals shall be reviewed and

approved by the bureau of urban and public transportation of the

department. Upon approval, the department shall release the funds

to the area agency on aging or any other organization representing

specialized services interests, as defined in this subdivision for

the purchase of services as approved in the plan by the department.

means public transportation primarily designed for persons with

disabilities or persons who are 65 years of age or older.

(ii) Local bus capital. For the fiscal year ending September

30, 1998 and each fiscal year thereafter, not less than

$8,000,000.00 will be distributed for either matching federal funds

for local bus capital or 100% capital projects for eligible

authorities and eligible governmental agencies that are not

eligible to receive federal capital formula funds under section

5307 of the federal intermodal surface transportation efficiency

act, Public Law 102-240, or any successor act.

(iii) Local bus new services.

(iv) Not less than $2,000,000.00 in each fiscal year for the

credit program established under section 10l.

(v) Public transportation development.

(vi) Other public transportation programs approved by the

commission.

(d) The unappropriated and unencumbered balance of the

comprehensive transportation fund lapses at the end of each fiscal

year and reverts to the comprehensive transportation fund for

appropriation in the following fiscal year.

(5) Eligible authorities and eligible governmental agencies

shall receive capital grants each fiscal year by the annual process

described in this section. Amounts received by an eligible

authority or eligible governmental agency pursuant to this

subsection shall be expended by that authority or agency solely for

capital projects ~~which~~ that have been approved by the state

transportation commission. Any funds approved by distribution to an

eligible authority or eligible governmental agency pursuant to this

section ~~which~~ that have not been encumbered by that agency or

authority for an approved capital project by the end of the

following fiscal year in which the funds were approved shall not be

expended by the authority or agency and be available for

distribution from the comprehensive transportation fund for the

purposes described in this section.

(6) The department, in carrying out the policy of the state

transportation commission, shall annually prepare and distribute by

December 1, instructions to eligible governmental agencies,

eligible authorities, and intercity carriers to enable the

preparation of a local transportation program. Eligible

governmental agencies, eligible authorities, and intercity carriers

shall give public notice of their intent to apply for money in the

comprehensive transportation fund to the residents of the counties,

townships, villages, and cities affected by the local

transportation program and shall make their application available

for a period of 30 days. All comments received by the eligible

governmental agency, eligible authority, or intercity carrier shall

be transmitted to the department.

(7) On or before March 1 of each year, each intercity carrier,

eligible authority, and eligible governmental agency shall submit

to the department its local transportation program for the next

succeeding fiscal year. The format for each local transportation

program shall be as prescribed by the federal transportation

improvement program insofar as practical and shall include project

descriptions, funding sources, and justification for each line

item, and summary budgets based on distributions anticipated under

subsection (4). The program shall contain at a minimum the

contemplated routes, hours of service, estimated transit vehicle

miles, costs of public transportation services, and projected

capital improvements or projects as exclusively determined by the

eligible authority or eligible governmental agency. The costs of

service and capital improvements or projects shall be in sufficient

detail to permit the ~~state transportation~~ department to evaluate

and approve the annual public transportation program. Determination

of individual projects to be included in the local transportation

programs other than those provided in this subsection shall be made

by the governing body of the eligible authority or eligible

governmental agency.

(8) On or before March 1 of each year, the department shall

prepare and file for public inspection and review the department

transportation program. The department transportation program shall

be prepared on similar format to the local transportation programs,

and shall include a summary description of projects, with funding

sources and project justifications for each line item for the

fiscal year immediately succeeding the fiscal year in which the

program is submitted. In addition, the department transportation

program shall include summary, nondetailed budget and project

descriptions and justifications excluding projects contained in a

local transportation program.

(9) On or before April 1 of each year, the department shall

prepare and file with the commission the proposed state

transportation program for the next succeeding fiscal year. The

proposed state transportation program shall contain the local

transportation programs of each intercity carrier, eligible

authority and eligible governmental agency, the department

transportation program, and the programs for the expenditure of the

state trunk line fund as they may have been supplemented, amended,

or modified since their original filing. The state transportation

program shall include the estimated amount of money in the funds

described in this subsection by revenue source, project

justifications, project descriptions funding sources, and budget

summaries.

(10) On or before May 1 of each year, the state transportation

commission shall act on the state transportation program for the

fiscal year commencing on the following October 1. In considering

approval of the proposed projects of each intercity carrier,

eligible authority, or eligible governmental agency, other than

projects ~~which~~ that are to be funded pursuant to subsection (5),

the state transportation commission shall consider whether the

projects comply with state law, are within funds allocated in this

section, whether they may be funded within the approved budgets,

whether there are intercity carriers, eligible authorities, and

eligible governmental agencies responsible to implement the

projects, and the recommendations of the department on individual

projects. Upon making those determinations, the state

transportation commission shall approve the projects which best

meet the criteria of this subsection.

(11) By October 1, the department and each intercity carrier,

eligible authority, or eligible governmental agency shall enter

into a contractual agreement or standardized grant memorandum of

agreement, which may cover 1 or more projects to be made from this

section in the applicable fiscal year to the intercity carrier,

eligible authority, or eligible governmental agency from the

comprehensive transportation fund.

(12) After a multiyear public transportation program is

approved by the state transportation commission, the ~~state~~

~~transportation~~ department may enter into a grant-in-aid instrument

with an eligible authority, intercity carrier, or eligible

governmental agency obligating the state to a minimum level of

funding for approved projects to be available over the multiyear

period of the program. This obligation shall be binding upon the

~~state transportation~~ department as long as the provisions and

conditions of the state transportation commission approved program

are carried out as agreed.

(13) Contracts and grant memorandum agreements may be audited

by the state transportation commission's office of commission

audits using rules promulgated by the United States general

accounting office and the terms and conditions of the respective

contracts and agreements. Third party agreements are subject to the

review and approval of the department.

(14) Funds distributed by the department may pay 100% of the

portion of the cost not eligible for reimbursement by the federal

government for eligible capital projects authorized by the state

transportation commission using comprehensive transportation funds

or the proceeds of notes and bonds issued under section 18b.

Priority for funding obligation shall be given to capital projects

for which federal funds have been authorized.

(15) All approved local bus new services initiated by eligible

authorities and eligible governmental agencies not in their fourth

year or beyond of funding on October 1, 1988, shall be funded from

subsection (4)(c)(iii). Local bus new services shall be funded under

subsection (4)(c)(iii) in the following percentages of eligible

operating expenses as determined by the department:

(a) Startup 100%.

(b) First year 90%.

(d) Third year 70%.

(e) Fourth year and each year thereafter, as determined by and

from funds provided under subsection (4)(a). The balance of

eligible operating expenses shall be met from local revenue sources

including farebox. The department shall pay up to 100% of eligible

capital expenses during the startup and first 3 years of service,

after the third year, the department shall participate in eligible

capital expenses in the same percentage as for other eligible

authorities and eligible governmental agencies. For the purposes of

this subsection, eligible operating and capital expenses means

those expenses determined by the department as applicable to

existing eligible authorities and eligible governmental agencies.

The department shall prioritize annually all requests for

comprehensive transportation funds to institute new services under

this subsection. First priority shall be given to eligible

authorities and eligible governmental agencies who have not

completed their first 3 years of service by October 1, 1998. New

services initiated by eligible authorities and eligible

governmental agencies under this subsection shall meet all of the

requirements of section 10.

(16) The department shall pay up to 80% of the portion of the

cost not eligible for reimbursement by the federal government for

intercity passenger operating assistance projects authorized by the

commission for the first 2 years of new services. For the third

year, eligible costs shall be reimbursed at up to 60% of the

portion of the cost not eligible for reimbursement by the federal

government. After the third year, eligible costs shall be

reimbursed at up to 50% of the portion of the cost not eligible for

reimbursement by the federal government. Eligible costs of services

provided as of September 30, 1981, shall be reimbursed at up to 50%

of the portion of the cost not eligible for reimbursement by the

federal government. However, the amount of funds from the

comprehensive transportation fund when added to federal funds and

local funds shall not exceed the total operating assistance project

cost.

(17) A vehicle purchased, leased, or rented after November 15,

1976, by an eligible authority or eligible governmental agency with

funds made available under this act ~~, which funds were~~ and not

already committed under a contract in existence on November 15,

1976, shall not be used to provide service on a fixed schedule and

fixed route for which a passenger fee is charged unless the vehicle

is accessible to a person using a wheelchair from a roadway level

or curb level, and has accommodations in which 1 or more

wheelchairs can be secured.

(18) A vehicle used to provide demand actuated service shall

not be purchased, leased, or rented by an eligible authority or

eligible governmental agency after October 1, 1978, with funds made

available under this act ~~which vehicle is used to provide demand~~

~~actuated service~~ unless the eligible authority or eligible

governmental agency has submitted a plan to the ~~state~~

~~transportation~~ department describing the service to be provided by

the demand actuated service to persons 65 years of age or older and

persons with disabilities within the applicable service area and

that plan has been approved by the department. The department shall

approve the plan as submitted or modified or shall reject the plan

within 60 days after the plan is submitted. A plan ~~which~~ that

describes the service to be provided by the demand actuated service

shall not be approved by the department unless that plan provides

the following:

(a) That demand actuated service will be provided to persons

65 years of age or older and persons with disabilities residing in

the entire service area subject to the plan.

(b) That as a minimum, demand actuated service will be

provided to persons 65 years of age or older and persons with

disabilities during the same hours as service is provided to all

other persons in the service area subject to the plan.

service to persons 65 years of age or older and persons with

disabilities from the initiation of a service request to arrival at

the destination is equal to the average time period required for

demand actuated service provided to all other persons in the

service area subject to the plan.

(d) That the eligible authority or eligible governmental

agency submitting the plan has established a local advisory council

with not less than 50% of its membership representing persons 65

years of age or older and persons with disabilities within the

service area subject to the plan and that the local advisory

council has had an opportunity to review and comment upon the plan

before its submission to the department. Each eligible authority or

eligible governmental agency jointly with the area agency on aging

shall approve at least 1 or the equivalent of 12% of the membership

of the local advisory council. Each advisory council comment shall

be included in the plan when submitted to the department.

(19) Notwithstanding subsection (18), a plan required by

subsection (18) ~~which~~ that is not approved or rejected by the ~~state~~

~~transportation~~ department within 60 days after submission shall be

considered approved as submitted.

(20) Subsections (17), (18), and (19) shall not apply to

vehicles or facilities used to transport persons by rail, air, or

water or to vehicles of common carriers licensed by the ~~state~~

~~transportation~~ department.

(21) After January 1, 1979, the department shall submit an

annual report to the legislature detailing the service provided in

the prior year for persons 65 years of age or older and persons

with disabilities by fixed route service and demand actuated

service. This report shall include a record of passenger usage and

shall be submitted by April 1 of each year.

(22) Notwithstanding any other provision of this section, for

each fiscal year that begins after September 30, 2009, the governor

and the state budget director shall include in the annual budget

submitted to the legislature for the ensuing fiscal period under

section 18 of article V of the state constitution of 1963 an

appropriation from a fund or funds other than the comprehensive

transportation fund to a street railway organized under the

nonprofit street railway act, 1867 PA 35, MCL 472.1 to 472.27, of a

sum equal to the difference between the annual operating expenses

of the street railway and revenue received by the street railway

during the same annual period, including, but not limited to, tax

increment revenues received by the street railway under section 23

of the nonprofit street railway act, 1867 PA 35, MCL 472.23. The

appropriation submitted in the budget under this section shall not

exceed 8% of the total private investment in the street railway as

determined by the department. A street railway is not an eligible

authority or eligible governmental agency for purposes of

subdivision (4)(a).

(23) For each eligible authority and each eligible

governmental agency within a public transit region, a regional

transit authority shall apply for, receive, and disburse funds

under section 8 of the regional transit authority act.

Sec. 10h. (1) By May 1 of each year, the state transportation

commission shall report to each member of the legislature, the

governor, and the auditor general its recommendations for a

transportation program ~~which~~ that the state transportation

commission acts on under section 10e(10). The report shall specify

the following:

(a) The estimated amount of money in the comprehensive

transportation fund to be distributed in the following fiscal year

and the amount of money in the comprehensive transportation fund to

be distributed to each eligible authority, each intercity carrier,

each eligible governmental agency, and the ~~state transportation~~

department; the estimated amount of money in the state trunk line

fund to be distributed to the ~~state transportation~~ department for

the preservation, as defined in section 10c, of state trunk line

highways; and the estimated amount of money in the state trunk line

fund to be distributed to the ~~state transportation~~ department for

all other purposes in the following fiscal year. The report shall

further subdivide the money to be distributed to each eligible

authority, each intercity carrier, each eligible governmental

agency, the ~~state transportation~~ department from the comprehensive

transportation fund, the ~~state transportation~~ department from the

state trunk line fund for the preservation of state trunk line

highways, and the ~~state transportation~~ department from the state

trunk line fund for all other purposes specifying how much of that

money is proposed to be expended for either capital acquisitions,

including demonstration projects, or for operating expenses,

including demonstration projects.

(b) An account of all expenditures of funds distributed from

the state trunk line fund and the comprehensive transportation fund

to the ~~state transportation~~ department, eligible authorities,

intercity carriers, and eligible governmental agencies, and the

progress made by the ~~state transportation~~ department, eligible

authorities, intercity carriers, and eligible governmental agencies

in carrying out the approved transportation programs in the

preceding fiscal year through the use of those funds. The progress

report shall be made based on information supplied to the ~~state~~

~~transportation~~ department on forms authorized by the federal

department of transportation. For those eligible authorities,

intercity carriers, and eligible governmental agencies not

receiving federal funds pursuant to the urban mass transportation

act of 1964, Public Law 88-365, the progress report shall be made

upon forms supplied by the ~~state transportation~~ department. The

progress report shall also contain the whole amount of the expenses

of the ~~state transportation~~ department for the fiscal year.

funding commitment.

(d) The status of all multiyear funding commitments.

(e) An account of the ~~state transportation~~ department's

compliance in the preceding year with the requirements of section

11(2) and (3). The report shall also specify the justification for

a waiver of the requirement of section 11(3), if that requirement

was waived.

(2) The financial transactions and accounts related to

distributions made from the comprehensive transportation fund to an

eligible authority ~~created under the metropolitan transportation~~

~~authorities act of 1967, 1967 PA 204, MCL 124.401 to 124.426,~~ shall

be audited pursuant to ~~that act~~ the metropolitan transportation

authorities act of 1967, 1967 PA 204, MCL 124.401 to 124.426, or

the regional transit authority act, whichever applies. The cost of

the audit shall be paid by the eligible authority. The financial

transactions and accounts related to distributions made from the

fund to an eligible governmental agency, other than a county, shall

be audited in accordance with the uniform budgeting and accounting

act, 1968 PA 2, MCL 141.421 to 141.440a. The financial transactions

and accounts related to distributions made from the fund to a

county ~~which~~ that is an eligible governmental agency shall be

audited in accordance with 1919 PA 71, MCL 21.41 to 21.55. The

financial transactions and accounts relative to distributions made

to an intercity carrier shall be audited by an independent

certified public accountant in accordance with instructions

promulgated by the department of treasury. A copy of the complete

audit report and management letter shall be submitted by the

eligible authority, intercity carrier, or eligible governmental

agency to the ~~state transportation~~ department. The department of

treasury shall develop minimum audit standards and requirements.

(3) There is hereby established a task force composed of the

Michigan public transit association, the Michigan motorbus

association, the Michigan rail users and supporters association,

the Michigan railroad association, a representative of a state-

owned or leased short line railroad, and the office of auditor

general or a certified public accountant appointed by the auditor

general, to assist the department in the development of the

progress report requirements outlined in subsection (1)(b).

Sec. 10l. (1) ~~For~~ Subject to subsection (2) and (3), for each

12-month period beginning October 1, 1987, and each 12-month period

thereafter, $2,000,000.00 shall be returned from the distribution

under section 10e(4)(a) by each ~~multicounty~~ eligible authority

~~created under the metropolitan transportation authorities act of~~

~~1967, Act No. 204 of the Public Acts of 1967, being sections~~

~~124.401 to 124.425 of the Michigan Compiled Laws, in terms of~~

organized or continued under the regional transit authority act as

a credit to those cities, villages, and townships within ~~each~~

~~transportation district of~~ the authority ~~created under section 16a~~

~~of Act No. 204 of the Public Acts of 1967, being section 124.416a~~

~~of the Michigan Compiled Laws, which apply~~ that receive credits

under this section or that are eligible to receive credits as of

October 1, 2001 if the city, village, or township applies to the

authority for the credit in accordance with procedures and

standards established by the authority. ~~, except as provided by~~

~~subsections (2) and (3).~~ The return of money in terms of a credit

shall be based upon the population of each city, village, or

township within the authority.

(2) For each 12-month period described in subsection (1), a

city, village, or township described in subsection (1) may apply to

the authority to use its credit for public transportation purposes

within the authority's jurisdiction. However, the money returned in

~~terms of~~ as a credit to any city, village, or township ~~which~~ that

provides public transportation service for that city, village, or

township shall be used exclusively toward reducing the operating

deficit of that service. ~~Moreover, any~~ Any service provided by the

city, township, or village utilizing the credit received ~~pursuant~~

to under this section shall be operated by the authority returning

the money in terms of a credit on a contractual basis with each

city, village, or township or with a combination of cities,

villages, and townships. If a city, township, or village has not

applied to the authority to utilize its credit pursuant to this

subsection by the last day of the 12-month period, that

municipality's share of the money credited pursuant to subsection

(1) shall be used by the authority for an expenditure within the

county within which the city, village, or township lies.

(3) A city, village, or township ~~which~~ that has applied for

and received approval from the authority for use of its credit

pursuant to subsection (2) shall have 1 year after the end of the

period in which the application was made to actually expend that

credit. A credit not actually expended by the city, village, or

township by the last day of the year after the end of the period in

which the application was made shall be used by the authority for

an expenditure within the county within which the city, village, or

township lies.

(4) Notwithstanding any other section of this or any other

act, each authority authorized by this section to return money in

terms of a credit shall have the final decision as to what

constitutes a proper expenditure, a public transportation service,

or a public transportation purpose under subsections (2) and (3).

(5) The expenditure of the amounts required to be expended

under subsections (2) and (3) shall not be conditioned on an

expenditure by a county in which the expenditure is required to be

expended.

(6) ~~The~~ An authority shall retain the ability to coordinate

services between contracting cities, villages, and townships or

groups of cities, villages, or townships.

(7) As used in this section, "operating deficit" means the

operating cost of a public transportation service less the revenues

generated by the service.

Sec. 10n. (1) Funds from the comprehensive transportation fund

may be distributed to a trustee, or to the Michigan municipal bond

authority as created under the shared credit rating act, 1985 PA

227, MCL 141.1051 to 141.1076, that is authorized to receive the

funds under a borrowing resolution adopted by an eligible

authority. The issuance of the notes of an eligible authority in

anticipation of payment of proceeds from the comprehensive

transportation fund shall be authorized by a borrowing resolution

of the eligible authority under the metropolitan transportation

authorities act of 1967, 1967 PA 204, MCL 124.401 to 124.426, or a

regional transit authority under the regional transit authority

act. The issuance of the notes under this section is not subject to

the revised municipal finance act, 2001 PA 34, MCL 141.2101 to

141.2821, and shall be subject to the prior approval of the state

transportation commission. Failure of the commission to take action

within 35 days after receipt of notification from the eligible

authority of intent to issue the notes, constitutes approval by the

state transportation commission. The eligible authority may only

issue the notes in anticipation of funds to be received during its

current fiscal year at any time before the eligible authority's

receipt of the funds from the comprehensive transportation fund.

The principal amount of notes for which the funds to be received

from the comprehensive transportation fund are pledged shall not

exceed 85% of the amount remaining to be received by the eligible

authority from the comprehensive transportation fund in the current

fiscal year. The pledge of 100% of the funds the eligible authority

expects to receive from the comprehensive transportation fund shall

be secured by a direct transfer of the pledge funds from the

comprehensive transportation fund to the trustee or the Michigan

municipal bond authority that is authorized to receive the funds by

the borrowing resolution adopted by the eligible authority. The

notes of the eligible authority shall not be in any way a debt or a

liability of ~~the~~ this state and shall not create or constitute any

indebtedness, liability, or obligations of ~~the~~ this state or be or

constitute a pledge of the full faith and credit of ~~the~~ this state.

Each note shall contain on its face a statement to the effect that

the eligible authority is obligated to pay the principal of and the

interest on the note only from funds of or due to the eligible

authority and that this state is not obligated to pay that

principal or interest and that neither the faith in credit nor the

taxing power of this state is pledged to the payment of the

principal of or the interest on the note. The notes shall mature

not more than 13 months from the date of issuance, shall bear

interest at a fixed or variable rate or rates of interest per

annum, and, in addition to other security required by this section,

may be secured by letter or line of credit issued by a financial

institution or as provided in the borrowing resolution.

(2) The issuance of notes under this section is subject to the

agency financing reporting act, 2002 PA 470, MCL 129.171 to

129.177.

Enacting section 1. This amendatory act does not take effect

unless Senate Bill No. 909 of the 96th Legislature is enacted into

law.