HB-4737, As Passed House, October 21, 2015

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 4737

 

 

 

 

 

 

 

 

 

 

 

     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 10, 11, 12, 13, and 14 (MCL 247.660, 247.661,

 

247.662, 247.663, and 247.664), section 10 as amended by 2007 PA

 

210, section 11 as amended by 2002 PA 639, sections 12 and 13 as

 

amended by 2012 PA 298, and section 14 as amended by 1987 PA 234.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 10. (1) A fund to be known as the Michigan transportation

 

fund is established and shall be set up and maintained in the state

 

treasury as a separate fund. Money received and collected under the

 

motor fuel tax act, 2000 PA 403, MCL 207.1001 to 207.1170, except a

 

license fee provided in that act, and a tax, fee, license, and

 

other money received and collected under sections 801 to 810 of the

 

Michigan vehicle code, 1949 PA 300, MCL 257.801 to 257.810, except

 

a truck safety fund fee provided in section 801(1)(k) of the

 

Michigan vehicle code, 1949 PA 300, MCL 257.801, and money received

 

under the motor carrier act, 1933 PA 254, MCL 475.1 to 479.43,

 

shall be deposited in the state treasury to the credit of the

 

Michigan transportation fund. In addition, income or profit derived

 

from the investment of money in the Michigan transportation fund

shall be deposited in the Michigan transportation fund. The state

 

treasurer may receive money or other assets from any source for

 

deposit into the fund. The state treasurer shall direct the

 

investment of the fund. The state treasurer shall credit to the

 

fund interest and earnings from fund investments. Except as

 

provided in this act, no other money, whether appropriated from the

 

general fund of this state or any other source, shall be deposited

 

in the Michigan transportation fund. Except as otherwise provided

 

in this section, the legislature shall appropriate funds money for

 

the necessary expenses incurred in the administration and

 

enforcement of the motor fuel tax act, 2000 PA 403, MCL 207.1001 to

 

207.1170, the motor carrier act, 1933 PA 254, MCL 475.1 to 479.43,

 

479.42, and sections 801 to 810 of the Michigan vehicle code, 1949

 

PA 300, MCL 257.801 to 257.810. Funds Money appropriated for

 

necessary expenses shall be based upon established cost allocation

 

methodology that reflects actual costs. Appropriations for the

 

necessary expenses incurred by the department of state in

 

administration and enforcement of sections 801 to 810 of the

 

Michigan vehicle code, 1949 PA 300, MCL 257.801 to 257.810, shall

 

be made from the Michigan transportation fund and from funds money

 

in the transportation administration collection fund created in

 

section 810b of the Michigan vehicle code, 1949 PA 300, MCL

 

257.810b. Appropriations from the Michigan transportation fund for

 

the necessary expenses incurred by the department of state in

 

administration and enforcement of sections 801 to 810 of the

 

Michigan vehicle code, 1949 PA 300, MCL 257.801 to 257.810, shall

 

not exceed $20,000,000.00 per state fiscal year. except for the

 

fiscal year ending September 30, 2006. For the fiscal year ending

 

September 30, 2006, the legislature may appropriate funds in excess

 

of $20,000,000.00 from the Michigan transportation fund for all

 

incremental additional expenses incurred by the department of state

 

in enforcing sections 801 to 810 of the Michigan vehicle code, 1949

 

PA 300, MCL 257.801 to 257.810, that arise because of the

 

replacement of standard design registration license plates as

 

provided in section 224 of the Michigan vehicle code, 1949 PA 300,

 

MCL 257.224. All money in the Michigan transportation fund is

 

apportioned and appropriated in the following manner:

 

     (a) Not more than $3,000,000.00 as may be annually

 

appropriated each fiscal year to the state trunk line fund for

 

subsequent deposit in the rail grade crossing account.

 

     (b) Not more than $3,000,000.00 as may be annually

 

appropriated each fiscal year to the state trunk line fund for

 

subsequent deposit in the grade crossing surface account.

 

     (c) (b) Not less than $3,000,000.00 each year to the local

 

bridge fund established in subsection (5) (4) for the purpose of

 

payment of the principal, interest, and redemption premium on any

 

notes or bonds issued by the state transportation commission under

 

former section 11b or subsection (10).(9).

 

     (d) (c) Revenue from 3 cents of the tax levied under section

 

8(1)(a) of the motor fuel tax act, 2000 PA 403, MCL 207.1008, to

 

the state trunk line fund, county road commissions, and cities and

 

villages in the percentages provided in subdivision (i).(k).

 

     (e) (d) Until September 30, 2004, all of the revenue from 1

 

cent of the tax levied under section 8(1)(a) of the motor fuel tax

 

act, 2000 PA 403, MCL 207.1008, to the state trunk line fund for

 

repair of state bridges under section 11. Beginning October 1, 2004

 

and continuing through September 30, 2005, 3/4 of the revenue from

 

1 cent of the tax levied under section 8(1)(a) of the motor fuel

 

tax act, 2000 PA 403, MCL 207.1008, shall be appropriated to the

 

state trunk line fund for the repair of state bridges under section

 

11, and 1/4 of the revenue from 1 cent of the tax levied under

 

section 8(1)(a) of the motor fuel tax act, 2000 PA 403, MCL

 

207.1008, shall be appropriated to the local bridge fund created in

 

subsection (5) for distribution only to cities, villages, and

 

county road commissions. Beginning October 1, 2005, 1/2 One-half of

 

the revenue from 1 cent of the tax levied under section 8(1)(a) of

 

the motor fuel tax act, 2000 PA 403, MCL 207.1008, shall be

 

appropriated to the state trunk line fund for the repair of state

 

bridges under section 11, and 1/2 of the revenue from 1 cent of the

 

tax levied under section 8(1)(a) of the motor fuel tax act, 2000 PA

 

403, MCL 207.1008, shall be appropriated to the local bridge fund

 

created in subsection (5) (4) for distribution only to cities,

 

villages, and county road commissions.

 

     (f) (e) $43,000,000.00 to the state trunk line fund for debt

 

service costs on state of Michigan projects.

 

     (g) (f) Except as provided in subsection (4), 10% Ten percent

 

to the comprehensive transportation fund for the purposes described

 

in section 10e.

 

     (h) (g) $5,000,000.00 to the local bridge fund established in

 

subsection (5) (4) for distribution only to the local bridge

 

advisory board, the regional bridge councils, cities, villages, and

 

county road commissions.

 

     (i) (h) $36,775,000.00 to the state trunk line fund for

 

subsequent deposit in the transportation economic development fund,

 

and, as of September 30, 1997, with first priority for allocation

 

to debt service on bonds issued to fund transportation economic

 

development fund projects. In addition, beginning October 1, 1997,

 

$3,500,000.00 is appropriated from the Michigan transportation fund

 

to the state trunk line fund for subsequent deposit in the

 

transportation economic development fund to be used for economic

 

development road projects in any of the targeted industries

 

described in section 9(1)(a) of 1987 PA 231, MCL 247.909.

 

     (j) (i) Not less than $33,000,000.00 as may be annually

 

appropriated each fiscal year to the local program fund created in

 

section 11e.

 

     (k) (j) The balance of the Michigan transportation fund as

 

follows, after deduction of the amounts appropriated in

 

subdivisions (a) through (i) and section 11b:to (j):

 

     (i) 39.1% to the state trunk line fund for the purposes

 

described in section 11.

 

     (ii) 39.1% to the county road commissions of the this state.

 

     (iii) 21.8% to the cities and villages of the this state.

 

     (2) The money appropriated pursuant to this section shall be

 

used for the purposes as provided in this act and any other

 

applicable act. Subject to the requirements of section 9b, the

 

department shall develop programs in conjunction with the Michigan

 

state chamber of commerce and the Michigan minority business

 

development council to assist small businesses, including those

 

located in enterprise zones and those located in empowerment zones

 

as determined under federal law, as defined by law in becoming

 

qualified to bid.

 

     (3) Thirty-one and one-half percent of the funds money

 

appropriated to this state from the federal government pursuant to

 

under 23 USC 157, commonly known as minimum guarantee funds, shall

 

be allocated to the transportation economic development fund, if

 

such an the allocation is consistent with federal law. These funds

 

This money shall be distributed 16-1/2% for development projects

 

for rural counties as defined by law and 15% for capacity

 

improvement or advanced traffic management systems in urban

 

counties as defined by law. Federal funds money allocated for

 

distribution under this section shall be is eligible for obligation

 

and use by all recipients as defined by provided in the

 

transportation equity act moving ahead for progress in the 21st

 

century act, Public Law 105-178.112-141.

 

     (4) For the fiscal year beginning October 1, 2003 only, the

 

apportionment of 10% of Michigan transportation fund money to the

 

comprehensive transportation fund as provided in subsection (1)(f)

 

shall be reduced by $10,000,000.00 and the $10,000,000.00 shall be

 

transferred to the state trunk line fund for capacity improvements

 

to state trunk line highways.

 

     (4) (5) A fund to be known as the local bridge fund is

 

established and is set up and maintained in the state treasury as a

 

separate fund. The money appropriated to the local bridge fund and

 

the interest accruing to that fund shall be expended for the local

 

bridge program. The purpose of the fund is to provide financial

 

assistance to highway authorities for the preservation,

 

improvement, or reconstruction of existing bridges or for the

 

construction of bridges to replace existing bridges in whole or

 

part. The money in the local bridge fund is not subject to section

 

12(15) or 13(5). The local bridge advisory board is created and

 

shall consist of 6 voting members appointed by the state

 

transportation commission and 2 nonvoting members appointed by the

 

state transportation department. The board shall include 3 members

 

from the county road association of Michigan, 1 member who

 

represents counties with populations 65,000 or greater, 1 member

 

who represents counties with populations greater than 30,000 and

 

less than 65,000, and 1 member who represents counties with

 

populations of 30,000 or less. Three members shall be appointed

 

from the Michigan municipal league, 1 member who represents cities

 

with a population 75,000 or greater, 1 member who represents cities

 

with a population less than 75,000, and 1 member who represents

 

villages. Each organization with voting rights shall submit a list

 

of nominees in each population category to the state transportation

 

commission. The state transportation commission shall make the

 

appointments from the lists submitted under this subsection. Names

 

shall be submitted within 45 days after October 1, 2004. The state

 

transportation commission shall make the appointments by January

 

30, 2005. Voting members shall be appointed for 2 years. The

 

chairperson of the board shall be selected from among the voting

 

members of the board. In addition to the 2 nonvoting members, the

 

department shall provide qualified administrative staff and

 

qualified technical assistance to the board.

 

     (5) (6) Beginning October 1, 2005, no No less than 5% and no

 

more than 15% of the funds money received in the local bridge fund

 

may be used for critical repair of large bridges and emergencies as

 

determined by the local bridge advisory board. Beginning October 1,

 

2005, funds Money remaining after the funds money allocated for

 

critical large bridge repair and emergencies are is deducted shall

 

be distributed by the board to the regional bridge councils created

 

under this section. One regional council shall be formed for each

 

department of transportation region as those regions exist on

 

October 1, 2004. The regional councils shall consist of 2 members

 

of the county road association of Michigan from counties in the

 

region, 2 members of the Michigan municipal league from cities and

 

villages in the region, and 1 member of the state transportation

 

department in each region. The members of the state transportation

 

department shall be are nonvoting members who and shall provide

 

qualified administrative staff and qualified technical assistance

 

to the regional councils.

 

     (6) (7) Beginning October 1, 2005, funds Money in the local

 

bridge fund after deduction of the amounts set aside for critical

 

repair of large bridges and emergency repairs shall be distributed

 

among the regional bridge councils according to all of the

 

following ratios, which shall be assigned a weight expressed as a

 

percentage as determined by the board, with each ratio receiving no

 

greater than a 50% weight and no less than a 25% weight:

 

     (a) A ratio with a numerator that is the total number of local

 

bridges in the region and a denominator that is the total number of

 

local bridges in this state.

 

     (b) A ratio with a numerator that is the total local bridge

 

deck area in the region and a denominator that is the total local

 

bridge deck area in this state.

 

     (c) A ratio with a numerator that is the total amount of

 

structurally deficient local bridge deck area in the region and a

 

denominator that is the total amount of structurally deficient

 

local bridge deck area in this state.

 

     (7) (8) Beginning October 1, 2005, the The regional bridge

 

councils shall allocate the funds money received from the board for

 

the preservation, improvement, and reconstruction of existing

 

bridges or for the construction of bridges to replace existing

 

bridges in whole or in part in each region.

 

     (8) (9) Beginning January 1, 2007 and each Each January, after

 

2007, the department shall submit a report to the chair and the

 

minority vice-chair of the appropriations committees of the senate

 

and the house of representatives, and to the standing committees on

 

transportation of the senate and the house of representatives, on

 

all of the following activities for the previous state fiscal year:

 

     (a) A listing of how much money was dedicated for emergency

 

and large bridge repair.

 

     (b) A listing of what emergency and large bridge repair

 

projects were funded.

 

     (c) The actual weights used in the calculation required under

 

subsection (7).(6).

 

     (d) A listing of the total money distributed to each region.

 

     (e) A listing of what the specific projects that were funded

 

pursuant to under subsection (8).(7).

 

     (9) (10) The state transportation commission shall borrow

 

money and issue notes or bonds in an amount of not less than

 

$30,000,000.00 to supplement the funding provided for the local

 

bridge program under subsection (6). (5). The bonds or notes issued

 

pursuant to under this subsection may be issued by the commission

 

for any purpose for which other local bridge funds money may be

 

used under this section. The bonds or notes authorized by this

 

subsection shall be issued by resolution of the state

 

transportation commission consistent with the requirements of

 

section 18b.

 

     (10) (11) The state transportation department shall promulgate

 

rules pursuant to under the administrative procedures act of 1969,

 

1969 PA 306, MCL 24.201 to 24.328, governing the administration of

 

the local bridge program. The rules shall set forth the eligibility

 

criteria for financial assistance under the program and other

 

matters related to the program that the department considers

 

necessary and desirable. The department shall take into

 

consideration the availability of federal aid and other financial

 

resources of the highway authority responsible for the bridge, the

 

importance of the bridge to the highway, road, or street network,

 

and the condition of the existing bridge.

 

     (11) (12) Beginning October 1, 2004, the The revenue

 

appropriated to the local bridge fund pursuant to under subsection

 

(1)(d) (1)(e) shall be distributed only to the local bridge

 

advisory board, the regional bridge councils, cities, villages, and

 

county road commissions.

 

     (12) (13) Beginning October 1, 2008, the The regional bridge

 

councils shall determine what bridge projects are selected for

 

funding from the local bridge fund created in subsection (5) (4)

 

and shall make a list of selected projects available to interested

 

parties in the region. A determination that a bridge project is

 

selected for funding in a given fiscal year is not approval to

 

disburse the funds.money.

 

     (13) (14) Beginning October 1, 2008, a A county road

 

commission, city, or village may implement a bridge project if the

 

bridge project has been selected for funding and is included in the

 

appropriate regional bridge council's current multiyear bridge plan

 

for the local bridge program but the regional bridge council has

 

not allocated funds money to the bridge project for the fiscal year

 

that the bridge project is on the current multiyear bridge plan. A

 

county road commission, city, or village may borrow funds money to

 

implement a project that has been selected for funding and is

 

included in the appropriate regional bridge council's current

 

multiyear bridge plan but has not been allocated funds money by the

 

regional bridge council. Based on available local bridge funds

 

money, when a bridge project that was implemented with borrowed

 

funds money is allocated funding in a subsequent fiscal year, the

 

funding shall only be used to repay the amount approved by the

 

multiyear bridge plan when the funds were money was borrowed. To be

 

eligible for repayment of the amount borrowed, a bridge project

 

that has been implemented with borrowed funds money shall be

 

administered through the department's local bridge program.

 

     Sec. 11. (1) A fund to be known as the state trunk line fund

 

is established and shall be set up and maintained in the state

 

treasury as a separate fund. The money deposited in the state trunk

 

line fund is appropriated to the state transportation department

 

for the following purposes in the following order of priority:

 

     (a) For the payment, but only from money restricted as to use

 

by section 9 of article IX of the state constitution of 1963, of

 

bonds, notes, or other obligations in the following order of

 

priority:

 

     (i) For the payment of contributions pledged before July 18,

 

1979 and required to be made by the state highway commission or the

 

state transportation commission under contracts entered into before

 

July 18, 1979, under 1941 PA 205, MCL 252.51 to 252.64, which

 

contributions have been pledged before July 18, 1979, for the

 

payment of the principal and interest on bonds issued under 1941 PA

 

205, MCL 252.51 to 252.64, for the payment of which a sufficient

 

sum is irrevocably appropriated.

 

     (ii) For the payment of the principal and interest upon bonds

 

designated "State of Michigan, State Highway Commissioner, Highway

 

Construction Bonds, Series I", dated September 1, 1956, in the

 

aggregate principal amount of $25,000,000.00, issued pursuant to

 

former 1955 PA 87 and the resolution of the state administrative

 

board adopted August 6, 1956, for the payment of which a sufficient

 

sum is irrevocably appropriated.

 

     (iii) For the payment of the principal and interest on bonds

 

issued under section 18b for transportation purposes other than

 

comprehensive transportation purposes as defined by law and the

 

payment of contributions of pledged to the payment of principal and

 

interest on bonds issued under section 18d and contracts entered

 

into under section 18d by the state highway commission or state

 

transportation commission to be made pursuant to contracts entered

 

into under section 18d. , which contributions are pledged to the

 

payment of principal and interest on bonds issued under the

 

authorization of section 18d and contracts executed pursuant to

 

that section. A sufficient portion of the fund is irrevocably

 

appropriated to pay, when due, the principal and interest on bonds

 

or notes issued under section 18b for purposes other than

 

comprehensive transportation purposes as defined by law, and to pay

 

the annual contributions of the state highway commission and the

 

state transportation commission as are pledged for the payment of

 

bonds issued pursuant to under contracts authorized by section 18d.

 

     (b) For the transfer of funds money appropriated pursuant to

 

under section 10(1)(g) 10(1)(i) 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 money appropriated pursuant to

 

under section 10(1)(a) to the railroad rail grade crossing account

 

in the state trunk line fund for expenditure for rail grade

 

crossing improvement purposes at rail grade crossings on public

 

roads and streets under the jurisdiction of the this state,

 

counties, cities, or villages. Projects The department shall be

 

selected select projects for funding in accordance with the

 

following:

 

     (i) Not more than 50% or less than 30% of these funds this

 

money and matched federal funds money shall be expended for state

 

trunk line projects.

 

     (ii) In prioritizing projects for these funds, this money, 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,

 

this money, the first priority for funds money deposited pursuant

 

to under this subdivision for rail grade crossing improvements and

 

retirement shall be to match federal funds money 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 a 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

 

shall be negotiated between the road authority and railroad

 

company. The funds money provided to the road authority as a result

 

of the crossing closure will shall 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 transfer of money appropriated under section

 

10(1)(b) to the grade crossing surface account in the state trunk

 

line fund for expenditure for rail grade crossing surface

 

improvement purposes at rail grade crossings on public roads and

 

streets under the jurisdiction of counties, cities, or villages.

 

Projects shall be selected for funding in accordance with the

 

following:

 

     (i) In prioritizing projects, the department shall consider

 

vehicular traffic volumes, relative crossing surface condition, the

 

ability of the railroad and local road authority to make

 

coordinated improvements, and the availability of funding.

 

     (ii) The grade crossing surface account shall fund 60% of the

 

project cost, with the remaining 40% funded by the railroad

 

company.

 

     (iii) Funding under the grade crossing surface account shall

 

be limited to items of work that are normally the responsibility of

 

the railroad under section 309 of the railroad code of 1993, 1993

 

PA 354, MCL 462.309. Maintenance of the roadway approaches to the

 

crossing will continue to be the responsibility of the party with

 

jurisdiction over that roadway.

 

     (e) (d) For the total operating expenses of the state trunk

 

line fund for each fiscal year as appropriated by the legislature.

 

     (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 money as the federal aid funds become

 

money becomes 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 a local road agency or a private sector company 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 maintenance,

 

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 local road commission, city, and village agency to

 

advance money to a county local road commission, city, and village

 

agency to pay their the costs of improving railroad grade crossings

 

on the terms and conditions agreed to in the contract. A contract

 

may be executed before or after the state transportation commission

 

borrows money for the purpose of advancing money to a county local

 

road commission, city, or village, agency, but the contract shall

 

be executed before the advancement of any money to a county local

 

road commission, city, or village agency by the state

 

transportation commission, and shall provide for the full

 

reimbursement of any advancement by a county local road commission,

 

city, or village agency to the state transportation department,

 

with interest, within 15 years after advancement, from any

 

available revenue sources of the county local road commission,

 

city, or village agency or, if provided in the contract, by

 

deduction from the periodic disbursements of any money returned by

 

the state to the county local road commission, city, or

 

village.agency.

 

     (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, the

 

department shall annually expend 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 money for the preservation of highways, roads,

 

streets, and bridges. Of the amounts appropriated for state trunk

 

line projects, the department shall, where possible, secure

 

pavement warranties of not less than 5-year for full replacement

 

guarantee or appropriate repair for contracted construction work on

 

pavement projects whose cost exceeds $2,000,000.00 and projects for

 

new construction or reconstruction undertaken after the effective

 

date of the 2015 amendatory act that amended this subsection. The

 

department shall compile and make available to the public an annual

 

report of all warranties that were secured under this subsection

 

and all pavement projects whose costs exceed $2,000,000.00 where a

 

warranty was not secured as provided in subsection (14). If an

 

appropriate certificate is filed under section 18e but only to the

 

extent necessary, this subsection shall does not prohibit the use

 

of any amount of money restricted as to use by section 9 of article

 

IX of the state constitution of 1963 and deposited in the state

 

trunk line fund for the payment of debt service on bonds, notes, or

 

other obligations pledging for the payment thereof 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 money 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 money

 

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 money 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) and (h).

 

     (i) Upon the affirmative recommendation of the director of the

 

state transportation department and the approval by resolution of

 

the state transportation commission, those amounts expended for

 

projects vital to the economy of this state, a region, or local

 

area or the safety of the public. The resolution shall state the

 

cost of the project exempted from this subsection.

 

     (3) Notwithstanding any other provision of this act, the state

 

transportation department shall expend annually at least 90% of the

 

federal revenue distributed to the credit of the state trunk line

 

fund in that year, except for federal revenue expended for the

 

purposes described in subsection (2)(b), (c), (f), and (i) and for

 

the payment of notes issued under section 18b(9) on the

 

preservation of highways, roads, streets, and bridges. The

 

requirement of this subsection shall be is waived if compliance

 

would cause this state to be ineligible according to 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 a local

 

road commissions, cities, and villages agency 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 money

 

for the purposes specified in subsection (1)(a) to (f). Loans

 

described in this subsection are not subject to the revised

 

municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821.

 

     (5) County A local road commissions, cities, and villages

 

agency 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 local road

 

commission, city, or village agency 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 under 1943 PA 143, MCL 141.251 to 141.254, or

 

has been or may in the future be pledged for the payment of

 

principal and interest upon bonds issued under section 18c or 18d,

 

or has been or may in the future be pledged for the payment of the

 

principal and interest upon bonds issued pursuant to under 1952 PA

 

175, MCL 247.701 to 247.707.

 

     (b) Any other legally available funds money of the city,

 

village, or county local road commission, agency, other than the

 

general funds of the county.

 

     (6) Loans If required by the department, loans made pursuant

 

to under subsection (4) if required by the state transportation

 

department may be are payable by deduction by the state treasurer,

 

upon direction of the state transportation department, from the

 

periodic disbursements of any money returned by the this state

 

under this act to the county local road commission, city, or

 

village, agency, but only after sufficient money has been returned

 

to the county local road commission, city, or village agency 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 local road commission,

 

city, or village pursuant to agency under subsection (5) shall not

 

be included in, or charged against, any constitutional, statutory,

 

or charter debt limitation of the county, city, or village and

 

shall not be included in the determination of the maximum annual

 

principal and interest requirements of, or the limitations upon,

 

the maximum annual principal and interest incurred under 1941 PA

 

205, MCL 252.51 to 252.64, 1943 PA 143, MCL 141.251 to 141.254,

 

1952 PA 175, MCL 247.701 to 247.707, or section 18c or 18d.

 

     (8) The county local road commission, city, or village agency

 

is not required to seek or obtain the approval of the electors, the

 

municipal finance commission or its successor agency, or, except as

 

provided in this subsection, the department of treasury to borrow

 

money pursuant to under subsection (5). The borrowing is not

 

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

 

141.2101 to 141.2821, or to section 5(g) 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 local road commission,

 

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

 

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

 

local road commission, city, or village, agency, the loan shall not

 

be made unless the state treasurer, after a hearing, if requested

 

by the affected county local road commission, city, or village,

 

agency, 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 a local road commissions,

 

cities, and villages agency 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

 

local road commissions, cities, and villages, agencies, 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% 7% per year of all of the funds money

 

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% 7% per year is expended for

 

administrative expenses. As used in this subsection,

 

"administrative expenses" means those expenses that are not

 

assigned including, but not limited to, specific road construction

 

or preservation projects and are often referred to as general or

 

supportive services. Administrative expenses shall do not include

 

net equipment expense, net capital outlay, debt service principal

 

and interest, and payments to other state or local offices which

 

that are assigned, but not limited to, specific road construction

 

projects or preservation activities.

 

     (12) Any performance audits of the department shall be

 

conducted according to government auditing standards issued by the

 

United States general accounting office.

 

     (13) Contracts entered into to advance money to a county local

 

road commission, city, or village agency under subsection (1)(g)

 

are not subject to the revised municipal finance act, 2001 PA 34,

 

MCL 141.2101 to 141.2821.

 

     (14) The department shall prepare on an annual basis a report

 

listing all warranties that were secured under subsection (2) and

 

indicate whether any of those warranties were redeemed and all

 

pavement projects whose costs exceed $2,000,000.00 for which a

 

warranty was not secured as described in subsection (2). The

 

department shall make the report required by this subsection

 

available to the public upon request and shall also post the report

 

on its website, which shall include, but is not limited to, all of

 

the following information:

 

     (a) The type of project.

 

     (b) The cost or estimated cost of the project.

 

     (c) The expected lifespan of the project.

 

     (d) Whether or not the project met or is currently meeting its

 

expected lifespan.

 

     (e) If the project failed to meet or is not meeting its

 

expected lifespan, the cause of the failure and the cost to replace

 

or repair the project.

 

     (f) The entity responsible for paying the cost of replacing or

 

repairing the project.

 

     (15) (14) As used in this section: , "rail grade crossing

 

improvement purposes"

 

     (a) "Local road agency" means that term as defined in section

 

9a.

 

     (b) "Rail grade crossing improvement purposes" means 1 or more

 

of the following:

 

     (i) (a) The installation and modernization of active and

 

passive warning devices at railroad grade crossings.

 

     (ii) (b) The installation or improvement of grade crossing

 

surfaces.

 

     (iii) (c) Modification, relocation, or modernization of

 

railroad grade crossing active and passive warning devices

 

necessitated by roadway improvement projects.

 

     (iv) (d) Test installations of innovative warning devices or

 

other innovative applications.

 

     (v) (e) Construction of new grade separations.

 

     (vi) (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.

 

     (vii) (g) Any other work that would be eligible for funding

 

under the federal railroad-highway grade crossing improvement

 

program or other comparable programs.

 

     Sec. 12. (1) The amount distributed to the county road

 

commissions shall be returned to the county treasurers in the

 

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

 

specified in this section. The department and the county road

 

association of Michigan shall jointly develop incentives for

 

counties to establish statewide purchasing pools for the more

 

efficient use of Michigan transportation funds.

 

     (2) Each county road commission shall be reimbursed in an

 

amount up to $10,000.00 per year for the sum paid to a licensed

 

professional engineer employed or retained by the county road

 

commission in the previous year. The sum shall be returned to each

 

county road commission certified by the department as complying

 

with this subsection regarding the employment of an engineer.

 

     (3) An amount equal to 1% of the total amount returned to the

 

county road commissions from the Michigan transportation fund

 

during the prior calendar year shall be withheld annually from the

 

counties' November monthly distribution provided for in section 17,

 

and the amount shall be returned to the county road commissions for

 

snow removal purposes as provided in section 12a.

 

     (4) An amount equal to 10% of the total amount returned to the

 

county road commissions from the Michigan transportation fund shall

 

be returned to each county road commission having county primary,

 

or county local road, or both, mileage in the urban areas as

 

determined pursuant to section 12b. This sum shall be distributed

 

pursuant to section 12b. The return shall be in addition to the

 

amounts provided in subsections (6) and (7) and for the purposes

 

stated in those subsections.

 

     (5) An amount equal to 4% of the total amount returned to the

 

county road commissions from the Michigan transportation fund shall

 

be returned to the county road commissions in the same percentages

 

as provided in subsection (7). All money returned to the county

 

road commissions as provided in this subsection shall be expended

 

by the county road commissions for the preservation, construction,

 

acquisition, and extension of county local road systems and shall

 

be in addition to the amounts provided in subsection (7).

 

     (6) Seventy-five percent of the remainder of the total amount

 

to be returned to the counties shall be expended by each county

 

road commission for the preservation, construction, acquisition,

 

and extension of the county primary road system, including the

 

acquisition of a necessary right of way for the system, work

 

incidental to the system, and a roadside park or motor parkway

 

appurtenant to the system, and shall be returned to the counties as

 

follows:

 

     (a) Three-fourths of the amount in proportion to the amount

 

received within the respective county during the 12 months next

 

preceding the date of each monthly distribution, as specific taxes

 

upon registered motor vehicles under the Michigan vehicle code,

 

1949 PA 300, MCL 257.1 to 257.923.

 

     (b) One-tenth of the amount in the same proportion that the

 

total mileage in the county primary road system of each county

 

bears to the total mileage in all of the county primary road

 

systems of the this state.

 

     (c) One eighty-third of the remaining 15% of the amount to

 

each county.

 

     (7) The balance of the remainder of the total amount to be

 

returned to counties shall be expended by each county road

 

commission for the preservation, construction, acquisition, and

 

extension of the county local road system as defined by this act,

 

including the acquisition of a necessary right of way for the

 

system, work incidental to the system, and a roadside park or motor

 

parkway appurtenant to the system, and shall be returned to the

 

counties as follows:

 

     (a) Sixty-five percent of the amount in the same proportion

 

that the total mileage in the county local road system of each

 

county bears to the total mileage in all of the county local road

 

systems of the state.

 

     (b) Thirty-five percent of the amount in the same proportion

 

that the total population outside of incorporated municipalities in

 

each county bears to the total population outside of incorporated

 

municipalities in all of the counties of the state, according to

 

the most recent statewide federal census as certified at the

 

beginning of the state fiscal year.

 

     (8) Money deposited in, or becoming a part of the county road

 

funds of a board of county road commissioners shall be expended

 

first for the payment of principal and interest on the bonds, for

 

the payment of contractual contributions pledged for the payment of

 

bonds, for debt service requirements for the payment of contractual

 

contributions pledged for the payment of bonds, and for debt

 

service requirements for the payment of notes and loans in the

 

following order of priority:

 

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

 

board of county road commissioners under a contract entered into

 

under 1941 PA 205, MCL 252.51 to 252.64, that have been pledged for

 

the payment of the principal and interest on bonds issued under

 

that act, or for the payment of total debt service requirements

 

upon notes issued by a board of county road commissioners under

 

1943 PA 143, MCL 141.251 to 141.254.

 

     (b) For the payment of principal and interest upon bonds

 

issued under section 18c, and the payment of contributions of a

 

board of county road commissioners made pursuant to contracts

 

entered into under section 18d that are pledged to the payment of

 

principal and interest on bonds issued after June 30, 1957, under

 

the authorization of section 18c and contracts executed pursuant to

 

its provisions.section 18c.

 

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

 

received pursuant to section 11(5), to the extent other funds have

 

not been made available for that payment.

 

     (9) Beginning November 1, 2008, no more than 50% per year of

 

the amount returned to a county for use on the county primary road

 

system may be expended, with or without matching, on the county

 

local road system of that county. Except as otherwise provided in

 

this subsection, beginning September 30, 2010, no more than 30% per

 

year of the amount returned to a county for use on the county

 

primary road system may be expended, with or without matching, on

 

the county local road system of that county. An additional amount,

 

not to exceed 20% per year of the amount returned to a county for

 

use on the county primary road system, may be expended on the

 

county local road system of that county if there is an emergency or

 

if the county road commission determines that an additional 20% may

 

be expended on the county local road system. The county road

 

commission may attach any conditions to its determination if the

 

determination is for nonemergency purposes, including, but not

 

limited to, a requirement that the additional 20% expended on the

 

county local road system only be used to supplement funds money

 

from other sources. No more than 15% per year of the amount

 

returned to a county for expenditure on the county local road

 

system may be used, with or without matching, on the county primary

 

road system of that county, and not to exceed an additional 15% per

 

year of the amount returned to a county for expenditure on the

 

county local road system, may, in case of an emergency or with the

 

approval of the county road commission, be expended, with or

 

without matching, on the county primary road system of that county.

 

An amount returned to a county for and on account of county local

 

roads , under this section , that is in excess of the total amount

 

paid into the county treasury each year by all of the townships of

 

that county for and on account of the county local roads pursuant

 

to section 14(6) may be transferred to and expended on the county

 

primary road system of that county.

 

     (10) Not less than 20% per year of the funds money returned to

 

a county by this section shall be expended for snow and ice

 

removal, the construction or reconstruction of a new highway or

 

existing highway, and the acquisition of a necessary right of way

 

for those highways, and work incidental to those highways, or for

 

the servicing of bonds issued by the county for these purposes.

 

Surplus funds A county may be expended expend surplus money for the

 

development, construction, or repair of an off-street parking

 

facility.

 

     (11) Not more than 5% per year of the funds money returned to

 

a county for the county primary road system and the county local

 

road system shall be expended for the maintenance, improvement, or

 

acquisition of appurtenant roadside parks and motor parkways.

 

     (12) Funds Money returned to a county shall be expended by the

 

county road commission for the purposes provided in this section

 

and shall be deposited by the county treasurer in a designated

 

county depository, in a separate account to the credit of the

 

county road fund, and shall be paid out only upon the order of the

 

county road commission, and interest accruing on the money shall

 

become a part of, and be deposited with the county road fund.

 

     (13) In a county to which funds are money is returned under

 

this section, the function of the county road commission shall be

 

is limited to the formation of policy and the performance of the

 

official duties imposed by law and delegated by the county board of

 

commissioners. A member of the county road commission shall not be

 

employed individually in any other capacity for other duties with

 

the county road commission.

 

     (14) A county road commission may enter into an agreement with

 

a county road commission of an adjacent county and with a city or

 

village to perform work on a highway, road, or street, and with the

 

department with respect to a state trunk line highway and

 

connecting links of the state trunk line highway within the limits

 

of the county or adjacent to the county. The agreement may provide

 

for the performance by each contracting party of the work

 

contemplated by the contract including engineering services and the

 

acquisition of rights of way in connection with the work

 

contemplated, by purchase or condemnation, by any of the

 

contracting parties in its own name and the agreement may provide

 

for joint participation in the costs.

 

     (15) Money distributed from the Michigan transportation fund

 

may be expended for construction purposes on county local roads

 

only to the extent matched by money from other sources. However,

 

Michigan transportation funds may be expended for the construction

 

of bridges on the county local roads in an amount not to exceed 75%

 

of the cost of the construction of local road bridges.

 

     (16) Notwithstanding any other provision of this act, at least

 

90% of the state revenue returned annually to the county road

 

commission from the Michigan transportation fund less the amounts

 

described in subdivisions (a) to (e) shall be expended annually by

 

the county road commission for the preservation of highways, roads,

 

streets, and bridges, and for the payment of contractual

 

contributions pledged for the payment of bonds or portions of

 

bonds, debt service requirements for the payment of bonds or

 

portions of bonds, and debt service requirements for the payment of

 

notes and loans or portions of notes and loans issued or received

 

after July 1, 1983, for the purpose of providing funds money for

 

the preservation of highways, roads, streets, and bridges. If an

 

appropriate certificate is filed under subsection (18) but only to

 

the extent necessary, this subsection does not prohibit the use of

 

any amount of state revenue returned annually to the county road

 

commissions for the payment of contractual contributions pledged

 

for the payment of bonds, for debt service requirements for the

 

payment of bonds, and for debt service requirements for the payment

 

of notes or loans, whenever issued or received, as specified under

 

subsection (8). The amounts that are deducted from the state

 

revenue returned to a county road commission from the Michigan

 

transportation fund, for the purpose of the calculation required by

 

this subsection are as follows:

 

     (a) Amounts expended for the purposes described in subsection

 

(8) for bonds, notes, loans, or other obligations issued or

 

received before July 2, 1983.

 

     (b) Amounts expended for the administrative costs of the

 

county road commission.

 

     (c) Amounts expended for capital outlay projects for equipment

 

and buildings, and for the payment of contractual contributions

 

pledged for the payment of bonds, for debt service requirements for

 

the payment of bonds, and for debt service requirements for the

 

payment of notes and loans issued or received after July 1, 1983,

 

for the purpose of providing funds for capital outlay projects for

 

equipment and buildings.

 

     (d) Amounts expended for projects vital to the economy of the

 

local area or the safety of the public in the local area. Before

 

these amounts can be deducted, the governing body over the county

 

road commission or the county road commission, as applicable, shall

 

pass a resolution approving these projects. This resolution shall

 

state which projects will be funded and the cost of each project. A

 

copy of each approved resolution shall be forwarded immediately to

 

the department.

 

     (e) Amounts expended in urban areas as determined pursuant to

 

section 12b.

 

     (17) As used in this subsection, "urban routes" means those

 

portions of 2-lane county primary roads within an urban area that

 

have average daily traffic in excess of 15,000. Notwithstanding any

 

other provision of this act, except as provided in this subsection,

 

a county road commission shall annually expend at least 90% of the

 

federal revenue distributed to the county road commission for

 

highways, roads, streets, and bridges, less the amount expended on

 

urban routes for purposes other than preservation and the amount

 

expended for hard-surfacing of gravel roads on the federal-aid

 

system, on the preservation of highways, roads, streets, and

 

bridges. A county road commission may expend in 1 year less than

 

90% of the federal revenue distributed to the county road

 

commission for highways, roads, streets, and bridges, less the

 

amount expended on urban routes for purposes other than

 

preservation and the amount expended for hard-surfacing of gravel

 

roads on the federal-aid system, on the preservation of highways,

 

roads, streets, and bridges, if that year is part of a 3-year

 

period in which at least 90% of the total federal revenue

 

distributed in the 3-year period to the county road commission for

 

highways, roads, streets, and bridges, less the amount expended on

 

urban routes for purposes other than preservation purposes and the

 

amount expended for hard-surfacing of gravel roads on the federal-

 

aid system, is expended on the preservation of highways, roads,

 

streets, and bridges. If a county road commission expends in 1 year

 

less than 90% of the federal revenue distributed to the county road

 

commission for highways, roads, streets, and bridges, less the

 

amount expended on urban routes for purposes other than

 

preservation and the amount expended for hard-surfacing of gravel

 

roads on the federal-aid system, on the preservation of highways,

 

roads, streets, and bridges and that year is not a part of a 3-year

 

period in which at least 90% of the total federal revenue

 

distributed in the 3-year period to the county road commission for

 

highways, roads, streets, and bridges, less the amount expended on

 

urban routes for purposes other than preservation and the amount

 

expended for hard-surfacing of gravel roads on the federal-aid

 

system, is expended on the preservation of highways, roads,

 

streets, and bridges, the county road commission shall expend in

 

each year subsequent to the 3-year period 100%, or less in 1 year

 

if sufficient for the purposes of this subsection, of the federal

 

revenue distributed to the county road commission for highways,

 

roads, streets, and bridges, less the amount expended on urban

 

routes for purposes other than preservation and the amount expended

 

for hard-surfacing of gravel roads on the federal-aid system, on

 

the preservation of highways, roads, streets, and bridges until the

 

average percentage spent on the preservation of highways, roads,

 

streets, and bridges in the 3-year period and the subsequent years,

 

less the amount expended on urban routes for purposes other than

 

preservation and the amount expended for hard-surfacing of gravel

 

roads on the federal-aid system, is at least 90%. A year may be

 

included in only one 3-year period for the purposes of this

 

subsection. The requirements of this subsection shall be waived if

 

compliance would cause the county road commission to be ineligible

 

for federal revenue under federal law, but only to the extent

 

necessary to make the county road commission eligible for that

 

revenue under federal law. For the purpose of the calculations

 

required by this subsection, the amount expended on urban routes by

 

a county road commission for purposes other than preservation and

 

the amount expended for hard-surfacing of gravel roads on the

 

federal-aid system shall be deducted from the total federal revenue

 

distributed to the use of the county road commission.

 

     (18) A county road commission shall certify to the department

 

on or before the issuance of any bonds or notes issued after July

 

1, 1983, pursuant to 1943 PA 143, MCL 141.251 to 141.254, 1941 PA

 

205, MCL 252.51 to 252.64, or section 18c or 18d, for purposes

 

other than the preservation of highways, roads, streets, and

 

bridges and purposes other than the purposes specified in

 

subsection (16)(c) that its average annual debt service

 

requirements for all bonds and notes or portions of bonds and notes

 

issued after July 1, 1983, for purposes other than the preservation

 

of highways, roads, streets, and bridges and other than for the

 

purposes specified in subsection (16)(c), including the bond or

 

note to be issued does not exceed 10% of the funds money returned

 

to the county road commission pursuant to this act, less the

 

amounts specified in subsection (16)(a), (b), and (c) during the

 

last completed fiscal year of the county road commission. If the

 

purpose for which the bonds or notes are issued is changed after

 

the issuance of the notes or bonds, the change shall be made in a

 

manner that maintains compliance with the certification required by

 

this subsection, as of the date the certificate was originally

 

issued, but no such change shall invalidate or otherwise affect the

 

bonds or notes with respect to which the certificate was issued or

 

the obligation to pay debt service on the bonds or notes. A

 

certification under this subsection is conclusive as to the matters

 

stated in the certification for purposes of the validity of bonds

 

and notes.

 

     (19) In each charter county to which funds are returned under

 

this section, the responsibility for road improvement,

 

preservation, and traffic operation work, and the development,

 

construction, or repair of off-road parking facilities and

 

construction or repair of road lighting shall be coordinated by a

 

single administrator to be designated by the county executive who

 

shall be responsible for and shall represent the charter county in

 

transactions with the department pursuant to this act.

 

     (20) Not more than 10% per year of all of the funds money

 

received by and returned to a county from any source for the

 

purposes of this section may be expended for administrative

 

expenses. A county that expends more than 10% for administrative

 

expenses in a year is subject to section 14(5) unless a waiver is

 

granted by the department of treasury. 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 do not include net

 

equipment expense, net capital outlay, debt service principal and

 

interest, and payments to other state or local offices that are

 

assigned, but not limited to, specific road construction projects

 

or preservation activities.

 

     (21) In addition to the financial compliance audits required

 

by law, the department may conduct performance audits and make

 

investigations of the disposition of all state funds money received

 

by county road commissions, county boards of commissioners, or any

 

other county governmental agency acting as the county road

 

authority, for transportation purposes to determine compliance with

 

the terms and conditions of this act. Performance audits shall be

 

conducted according to government auditing standards issued by the

 

United States general accounting office. The department shall

 

develop performance audit procedures and reporting requirements

 

sufficient to determine whether funds money expended under this

 

section were was expended in compliance with this act by September

 

1, 2012 and shall report to the transportation committees of the

 

senate and house of representatives no later than October 1, 2012

 

on the additional audit procedures and reporting requirements. The

 

department shall provide notice to the county road commission,

 

county board of commissioners, or any other county governmental

 

agency acting as the county road authority, as applicable, of the

 

standards to be used for audits performed under this subsection.

 

The notice shall be provided 6 months prior to the fiscal year in

 

which the audit is conducted. The department shall notify the

 

county road commission, county board of commissioners, or any other

 

county governmental agency acting as the county road authority of

 

any subsequent changes to the standards. County road commissions,

 

county boards of commissioners, or any other county governmental

 

agencies acting as county road authorities, as applicable, shall

 

make available to the department the pertinent records for the

 

audit. Performance audits may be performed at the discretion of the

 

department or upon receiving a request from the speaker of the

 

house of representatives or the senate majority leader.

 

     (22) Of the amounts appropriated for a county primary or local

 

road system under this section, where possible, a county road

 

commission shall secure pavement warranties for full replacement or

 

appropriate repair for contracted construction work on pavement

 

projects whose cost exceeds $2,000,000.00 and projects for new

 

construction or reconstruction undertaken after the effective date

 

of the amendatory act that added this subsection, if allowed by the

 

federal highway administration and the department. A county road

 

commission shall submit a proposed warranty program to the

 

department for approval no later than February 1, 2016. If a

 

proposed warranty program submitted under this subsection is

 

approved by the department, the county road commission shall

 

implement the program no later than 1 year after the approval. A

 

county road commission shall include a list of all warranties that

 

were secured under this subsection and indicate whether any of

 

those warranties were redeemed with the report required under

 

section 14(3), and shall also list all pavement projects whose cost

 

exceeds $2,000,000.00 for which a warranty was not secured. The

 

list shall include, but is not limited to, all of the following

 

information:

 

     (a) The type of project.

 

     (b) The cost or estimated cost of the project.

 

     (c) The expected lifespan of the project.

 

     (d) Whether or not the project met or is currently meeting its

 

expected lifespan.

 

     (e) If the project failed to meet or is not meeting its

 

expected lifespan, the cause of the failure and the cost to replace

 

or repair the project.

 

     (f) The entity responsible for paying the cost of replacing or

 

repairing the project.

 

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

 

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

 

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

 

specified in this section. The amount received by a newly

 

incorporated municipality shall be in place of any other direct

 

distribution of funds money from the Michigan transportation fund.

 

The population of a newly incorporated municipality as determined

 

under this section shall be added to the total population of all

 

incorporated cities and villages in the state in computing the

 

amounts to be returned under this section to each municipality in

 

the state. Major street mileage, local street mileage, and

 

equivalent major mileage, if applicable, shall be determined by the

 

department before the next month for which distribution is made

 

following the effective date of incorporation of a newly

 

incorporated municipality.

 

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

 

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

 

amount returned to all cities and villages under subsections (3)

 

and (4) during the previous calendar year shall be withheld. The

 

amount withheld shall be used to partially reimburse cities and

 

villages located in counties that are eligible for snow removal

 

funds pursuant to section 12a and that have costs for winter

 

maintenance on major and local streets that are greater than the

 

statewide average. The distributions shall be made annually during

 

February and shall be calculated separately for the major and local

 

street systems but may be paid in a combined warrant. The

 

distribution to a city or village shall be equal to 1/2 of its

 

winter maintenance expenditures after deducting the product of its

 

total earnings under subsections (3) and (4) multiplied by 2 times

 

the average municipal winter maintenance factor. Winter maintenance

 

expenditures shall be determined from the street financial reports

 

for the most current fiscal years ending before July 1. A city or

 

village that does not submit a street financial report for the

 

fiscal year ending before July 1 by the subsequent December 31 is

 

ineligible for the winter maintenance payment that is to be based

 

on that street financial report. The department shall determine the

 

average municipal winter maintenance factor annually by dividing

 

the total expenditures of all cities and villages on winter

 

maintenance of streets and highways by the total amount earned by

 

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

 

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

 

subsection exceeds the amount withheld, the distributions to each

 

eligible city and village shall be reduced proportionately. If the

 

sum is less than the amount withheld, the balance shall be added to

 

the amount available for distribution under subsections (3) and (4)

 

during the next month. The distributions shall be for use on the

 

major and local street systems respectively and shall be subject to

 

the same provisions as funds money returned under subsections (3)

 

and (4).

 

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

 

returned to the cities and villages, after deducting the amounts

 

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

 

same proportion that the population of each bears to the total

 

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

 

proportion that the equivalent major mileage in each bears to the

 

total equivalent major mileage in all cities and villages. The

 

amount returned under this subsection shall be used by each city

 

and village for the following purposes in the following order of

 

priority:

 

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

 

city or village under the provisions of contracts previously

 

entered into under 1941 PA 205, MCL 252.51 to 252.64, that have

 

been previously pledged for the payment of the principal and

 

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

 

principal and interest upon bonds issued by a city or village

 

pursuant to 1952 PA 175, MCL 247.701 to 247.707.

 

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

 

projects undertaken by the city or village jointly with the

 

department.

 

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

 

received pursuant to section 11(5), to the extent other funds have

 

money has not been made available for that payment.

 

     (d) For the preservation, construction, acquisition, and

 

extension of the major street system as defined by this act

 

including the acquisition of a necessary right of way for the

 

system, work incidental to the system, and an appurtenant roadside

 

park or motor parkway, of the city or village and for the payment

 

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

 

village's general obligation bonds that are attributable to the

 

construction or reconstruction of the city's or village's major

 

street system. Not more than 5% per year of the funds money

 

returned to a city or village by this subsection shall be expended

 

for the preservation or acquisition of appurtenant roadside parks

 

and motor parkways. Surplus funds money may be expended for the

 

development, construction, or repair of off-street parking

 

facilities, the construction or repair of street lighting, and

 

transfer to the local street system under subsection (6).

 

     (e) For capital outlay projects for equipment and buildings,

 

contributions pledged for the payment of loans and for the payment

 

of contractual debt service requirements for the payment of bonds

 

for the purpose of providing funds money for capital outlay

 

projects for equipment and buildings necessary to the development

 

and maintenance of the road system so long as amounts allocated

 

under this subdivision are used for transportation purposes.

 

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

 

and villages shall be expended in each city or village for the

 

preservation, construction, acquisition, and extension of the local

 

street system of the city or village, including the acquisition of

 

a necessary right of way for the system, work incidental to the

 

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

 

principal and interest on the portion of the city's or village's

 

general obligation bonds that are attributable to the construction

 

or reconstruction of the city's or village's local street system.

 

The amount returned under this subsection shall be returned to the

 

cities and villages 60% 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% 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 payment of the principal and interest upon bonds

 

issued by a city or village pursuant to 1952 PA 175, MCL 247.701 to

 

247.707, and after that payment, the payment of debt service on

 

loans received under section 11(5), shall have priority in the

 

expenditure of money returned under this subsection.

 

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

 

maintenance and preservation of its local street system under this

 

act represents the total responsibility of the state for local

 

street system support. Funds Money distributed from the Michigan

 

transportation fund shall not be expended for construction purposes

 

on city and village local streets except to the extent matched from

 

local revenues including other money returned to a city or village

 

by the this state under the state constitution of 1963 and statutes

 

of the this state, from funds money that can be raised by taxation

 

in cities and villages for street purposes within the limitations

 

of the state constitution of 1963 and statutes of this state, from

 

special assessments, or from any other source.

 

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

 

shall be expended on the major and local street systems of that

 

city or village. However, the first priority shall be is the major

 

street system. Money returned for expenditure on the major street

 

system shall be expended in the priority order provided in

 

subsection (3) except that surplus funds money may be transferred

 

for preservation of the local street system. Major street funds

 

money transferred for use on the local street system shall not be

 

used for construction but may be used for preservation. A city or

 

village shall not transfer more than 50% of its annual major street

 

funding for the local street system unless it has adopted and is

 

following an asset management process for its major and local

 

street systems and adopts a resolution with a copy to the

 

department setting forth all of the following:

 

     (a) A list of the major streets in that city or village.

 

     (b) A statement that the city or village is adequately

 

maintaining its major streets.

 

     (c) The dollar amount of the transfer.

 

     (d) The local streets to be funded with the transfer.

 

     (e) A statement that the city or village is following an asset

 

management process for its major and local street systems.

 

     (7) A city or village that has not adopted an asset management

 

plan shall obtain the concurrence of the department to transfer

 

more than 50% of its major street funding to its local street

 

system. The department may provide for pilot projects that would

 

allow a city or village that has adopted an asset management plan

 

under subsection (6) to combine their local and major street funds

 

into 1 street fund and to submit a single report to the department

 

on the expenditure of funds money on the local and major street

 

systems.

 

     (8) Not more than 10% per year of all of the funds money

 

returned to a city or village from any source for the purposes of

 

this section may be expended for administrative expenses. A city or

 

village that expends more than 10% for administrative expenses in a

 

year is subject to section 14(5).

 

     (9) In each city and village to which funds are money is

 

returned under this section, the responsibility for street

 

preservation and the development, construction, or repair of off-

 

street parking facilities and construction or repair of street

 

lighting shall be coordinated by a single administrator to be

 

designated by the governing body who shall be responsible for and

 

shall represent the municipality in transactions with the

 

department pursuant to this act.

 

     (10) Cities and villages may provide for consolidated street

 

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

 

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

 

the state transportation commission for the performance of street

 

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

 

or village or adjacent to the city or village. The agreement may

 

provide for any of the contracting parties to perform the work

 

contemplated by the contracts including services and acquisition of

 

rights of way, by purchase or condemnation in its own name. The

 

agreement may provide for joint participation in the costs if

 

appropriate.

 

     (11) Interest earned on funds money returned to a city or a

 

village for purposes provided in this section shall be credited to

 

the appropriate street fund.

 

     (12) In addition to the financial compliance audits required

 

by law, the department may conduct performance audits and make

 

investigations of the disposition of all state funds money received

 

by cities and villages for transportation purposes to determine

 

compliance with the terms and conditions of this act. Performance

 

audits shall be conducted according to government auditing

 

standards issued by the United States general accounting office.

 

The department shall develop all performance audit procedures and

 

reporting requirements sufficient to determine whether funds money

 

expended under this section were was expended in compliance with

 

this act by September 1, 2012 and shall report to the

 

transportation committees of the senate and house of

 

representatives no later than October 1, 2012 on the additional

 

audit procedures and reporting requirements. The audit procedures

 

shall include a review of the road fund balance of the city or

 

village. The cities and villages shall report their road fund

 

balances by fund balance component. The department shall assist

 

cities and villages to ensure that road fund balances are

 

consistently classified and are in compliance with the audit and

 

reporting requirements of this section. The department shall

 

provide notice to cities and villages of the standards to be used

 

for audits under this subsection prior to the fiscal year in which

 

the audit is conducted. The department shall notify cities and

 

villages of any subsequent changes to the standards. Cities and

 

villages shall make available to the department the pertinent

 

records for the audit. Performance audits may be performed at the

 

discretion of the department or upon receiving a request from the

 

speaker of the house of representatives or the senate majority

 

leader.

 

     (13) Of the amounts appropriated for a city or village major

 

or local street system under this section, where possible, a city

 

or village shall secure pavement warranties for full replacement or

 

appropriate repair for contracted construction work on pavement

 

projects whose cost exceeds $2,000,000.00 and projects for new

 

construction or reconstruction undertaken after the effective date

 

of the amendatory act that added this subsection if allowed by the

 

federal highway administration and the department. A city or

 

village shall submit a proposed warranty program to the department

 

for approval no later than February 1, 2017. If a proposed warranty

 

program submitted under this subsection is approved by the

 

department, the city or village shall implement the program no

 

later than 1 year after the approval. A city or village shall

 

include a list of all warranties that were secured under this

 

subsection and indicate whether any of those warranties were

 

redeemed with the report required under section 14(3), and shall

 

also list all pavement projects whose cost exceeds $2,000,000.00

 

for which a warranty was not secured. The list shall include, but

 

is not limited to, all of the following information:

 

     (a) The type of project.

 

     (b) The cost or estimated cost of the project.

 

     (c) The expected lifespan of the project.

 

     (d) Whether or not the project met or is currently meeting its

 

expected lifespan.

 

     (e) If the project failed to meet or is not meeting its

 

expected lifespan, the cause of the failure and the cost to replace

 

or repair the project.

 

House Bill No. 4737 as amended October 21, 2015

     (f) The entity responsible for paying the cost of replacing or

 

repairing the project.

[(14) WITH THE APPROVAL OF THE DIRECTOR OF THE DEPARTMENT, A CITY MAY USE UP TO 20% OF THE AMOUNT RECEIVED BY THAT CITY UNDER THIS SECTION FOR PUBLIC TRANSIT PURPOSES IF MORE THAN 10,000,000 PASSENGERS USED PUBLIC TRANSIT WITHIN THAT CITY DURING THE PREVIOUS FISCAL YEAR.

     (15)] (13) As used in this section:

 

     (a) "Administrative expenses" means expenses that are not

 

assigned under this section, including, but not limited to,

 

specific road construction or maintenance projects, and are often

 

referred to as general or supportive services. Administrative

 

expenses do not include net equipment expense, net capital outlay,

 

debt service principal and interest, or payments to other state or

 

local offices that are assigned, but not limited to, specific road

 

construction projects or maintenance activities.

 

     (b) "Equivalent major mileage" means the sum of 2 times the

 

state trunk line mileage certified by the department as of March 31

 

of each year, as being within the boundaries of each city and

 

village having a population of 25,000 or more, plus the major

 

street mileage in each city and village, multiplied by the

 

following factor:

 

     (i) 1.0 for cities and villages of 2,000 or less population.

 

     (ii) 1.1 for cities and villages from 2,001 to 10,000

 

population.

 

     (iii) 1.2 for cities and villages from 10,001 to 20,000

 

population.

 

     (iv) 1.3 for cities and villages from 20,001 to 30,000

 

population.

 

     (v) 1.4 for cities and villages from 30,001 to 40,000

 

population.

 

     (vi) 1.5 for cities and villages from 40,001 to 50,000

 

population.

 

     (vii) 1.6 for cities and villages from 50,001 to 65,000

 

population.

 

     (viii) 1.7 for cities and villages from 65,001 to 80,000

 

population.

 

     (ix) 1.8 for cities and villages from 80,001 to 95,000

 

population.

 

     (x) 1.9 for cities and villages from 95,001 to 160,000

 

population.

 

     (xi) 2.0 for cities and villages from 160,001 to 320,000

 

population.

 

     (xii) For cities over 320,000 population, a factor of 2.1

 

increased successively by 0.1 for each 160,000 population increment

 

over 320,000.

 

     (c) "Population" means the population according to the most

 

recent statewide federal census as certified at the beginning of

 

the state fiscal year, except that, if a municipality has been

 

newly incorporated since completion of the census, the population

 

of the municipality for purposes of the distribution of funds money

 

before completion of the next census shall be the population as

 

determined by special federal census, if there is a special federal

 

census, and if not, by the population as determined by the official

 

census in connection with the incorporation, if there is such a

 

census and, if not, by a special state census to be taken at the

 

expense of the municipality by the secretary of state pursuant to

 

section 6 of the home rule city act, 1909 PA 279, MCL 117.6.

 

     Sec. 14. (1) Each county road commission and city and village

 

of the state shall prepare biennial primary road and major street

 

programs, based on long-range plans, and shall make the programs

 

available for review by the public.

 

     (2) Separate accounts shall be kept by cities, villages, and

 

county road commissions of all money returned from the Michigan

 

transportation fund. This subsection shall does not be construed to

 

prevent the combining of accounts on which separate bookkeeping

 

records are kept into a single deposit account.

 

     (3) All county road commissions and cities and villages shall

 

keep accurate and uniform records on all road and street work and

 

funds, and shall annually report to the state transportation

 

department at the time, in the manner, and on forms prescribed by

 

the state transportation department the mileage of each road system

 

under their jurisdiction and the receipts and disbursements of road

 

and street funds. In the annual report, each county road commission

 

shall report on its compliance in the preceding year with the

 

requirements of section 12(16) and (17). The report shall also

 

specify, with respect to section 12(17), the total dollar amount

 

expended for other than maintenance purposes which would not have

 

been permissible without the deduction of certain urban route

 

expenditures as permitted under section 12(17). The report shall

 

also specify the justification for a waiver of the requirement of

 

section 12(17), if that requirement was waived. A county road

 

commission, city, or village shall post the report required by this

 

subsection on its website, if the county road commission, city, or

 

village has a website.

 

     (4) The expenditure of adequate amounts, by county road

 

commissions and the cities and villages , are authorized to expend

 

adequate amounts from funds returned by this act , to cover the

 

cost of administration, engineering, and record keeping, is hereby

 

authorized, and expenditures for those purposes shall be reported

 

separately by each county road commission, city, and village to the

 

state transportation department.

 

     (5) All distributions and returns of funds provided for in

 

this act shall be withheld from the state transportation

 

department, eligible authorities, county road commissions, cities,

 

villages, or other eligible governmental agencies for failure to

 

comply with any of the requirements of this act, and the

 

withholding shall continue for the period of noncompliance.

 

     (6) Money distributed to county road commissions for the

 

maintenance and improvement of county local road systems pursuant

 

to section 12 represents the total responsibility of the this state

 

for local county road support. Additional funds required for the

 

support of county local road systems may be supplied from other

 

money returned to the township governments by the this state under

 

the state constitution of 1963 and statutes of the this state, or

 

from funds that can be raised by taxation in the townships or

 

counties for road purposes within the limitations of the state

 

constitution of 1963 and statutes of the this state.

 

     Enacting section 1. This amendatory act takes effect October

 

1, 2016.

 

     Enacting section 2. This amendatory act does not take effect

 

unless all of the following bills of the 98th Legislature are

 

enacted into law:

 

     (a) House Bill No. 4370.

 

     (b) House Bill No. 4614.

 

     (c) House Bill No. 4616.

 

     (d) House Bill No. 4736.

 

     (e) House Bill No. 4738.