SENATE BILL NO. 259 February 3, 1999, Introduced by Senators GAST, STEIL, NORTH, MC MANUS, GOUGEON, STILLE, HOFFMAN, GOSCHKA, BENNETT, SCHWARZ, A. SMITH, VAUGHN, KOIVISTO, EMERSON, PETERS and YOUNG and referred to the Committee on Appropriations. A bill to amend 1984 PA 431, entitled "The management and budget act," by amending sections 113, 115, 131, 203, 204, 205, 217, 219, 221, 237, 241, 242, 246, 248, 251, 267, 303, 305, 342, 344, 350, 350a, 350e, 352, 353, 353e, 354, 355, 356, 363, 367, 367b, 367f, 371, 372, 384, 386, 393, 396, 404, 434, 443, 451, 454, 461, 462, 484, 485, 486, 492, and 493 (MCL 18.1113, 18.1115, 18.1131, 18.1203, 18.1204, 18.1205, 18.1217, 18.1219, 18.1221, 18.1237, 18.1241, 18.1242, 18.1246, 18.1248, 18.1251, 18.1267, 18.1303, 18.1305, 18.1342, 18.1344, 18.1350, 18.1350a, 18.1350e, 18.1352, 18.1353, 18.1353e, 18.1354, 18.1355, 18.1356, 18.1363, 18.1367, 18.1367b, 18.1367f, 18.1371, 18.1372, 18.1384, 18.1386, 18.1393, 18.1396, 18.1404, 18.1434, 18.1443, 18.1451, 18.1454, 18.1461, 18.1462, 18.1484, 18.1485, 18.1486, 18.1492, and 18.1493), section 113 as amended by 1987 PA 122, sections 115, 203, 205, 217, 221, 246, 01245'99 JLB 2 342, 350, 367, 371, 372, 384, 386, 393, and 451 as amended and sections 204, 350a, 350e, 396, and 454 as added by 1988 PA 504, sections 219, 352, and 355 as amended and sections 367b and 367f as added by 1991 PA 72, section 353 as amended by 1994 PA 107, section 353e as added by 1997 PA 144, section 354 as amended by 1995 PA 286, section 363 as amended by 1993 PA 2, section 461 as amended by 1986 PA 251, and sections 484, 485, and 486 as added by 1986 PA 272, and by adding sections 237a, 281a, 430, and 451a; and to repeal acts and parts of acts. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 113. (1) "CAPITAL OUTLAY" MEANS A PROJECT OR FACILITY 2 FINANCED EITHER IN WHOLE OR IN PART WITH STATE FUNDS, INCLUDING 3 LEASE PURCHASE AGREEMENTS, TO DEMOLISH, CONSTRUCT, RENOVATE, OR 4 EQUIP A BUILDING OR FACILITY FOR WHICH TOTAL PROJECT COSTS EXCEED 5 $1,000,000.00. THESE PROJECTS MAY BE ON STATE OWNED PROPERTY, 6 PROPERTY OWNED BY AN INSTITUTION OF HIGHER EDUCATION, PROPERTY 7 OWNED BY COMMUNITY COLLEGES, OR PROPERTY UNDER THE CONTROL OF THE 8 STATE BUILDING AUTHORITY. 9 (2)(1)"Community college" means a community college or a 10 junior college. 11 (3)(2)"Department" means the department of management 12 and budget. 13 (4)(3)"Directives" means intergovernmental, interagency, 14 or interdepartment administrative or procedural guidelines or 15 instructions which do not affect the rights of, or procedures and 16 practices available to, the public. 01245'99 3 1 (5)(4)"Director" means the director of the department of 2 management and budget. 3 (6)(5)"Energy conservation measure" means improvement of 4 a building structurally or the installation of equipment or mate- 5 rials in a building for the purpose of reducing energy consump- 6 tion or cost, increasing energy efficiency, or allowing the use 7 of a renewable resource for fuel. 8 Sec. 115. (1) "Institution of higher education" means a 9 state supported 4-year college or university. 10 (2) "JCOS" means the joint capital outlay subcommittee of 11 the appropriations committees. 12 (3) "Project" means a facility which is being planned or 13 constructed. 14 (4) Except as used in sections 284 to 292, "record" means a 15 public record as defined in section 2 of the freedom of informa- 16 tion act,Act No. 442 of the Public Acts of 1976, being section1715.232 of the Michigan Compiled Laws1976 PA 442, MCL 15.232. 18 (5) "State agency" means a department, board, commission, 19 office, agency, authority, or other unit of state government. 20 State agency does not include an institution of higher education 21 or a community college or, for purposes of article 2 or 3, the 22 legislativeor judicial branchesBRANCH of government. FOR 23 PURPOSES OF ARTICLE 2 OR 3, EXCEPT FOR THOSE SECTIONS PERTAINING 24 TO THE AUTHORIZATION, PLANNING, CONSTRUCTION, AND FUNDING OF A 25 CAPITAL OUTLAY PROJECT, INCLUDING CONSTRUCTION OF A FACILITY TO 26 HOUSE OFFICES OR FUNCTIONS NECESSARY FOR OPERATION OF THE 01245'99 4 1 JUDICIAL BRANCH OF GOVERNMENT, STATE AGENCY DOES NOT INCLUDE THE 2 JUDICIAL BRANCH OF GOVERNMENT. 3 (6) "Unit of local government" means a political subdivision 4 of this state, including school districts, community college dis- 5 tricts, intermediate school districts, cities, villages, town- 6 ships, counties, and authorities, if the political subdivision 7 has as its primary purpose the providing of local governmental 8 service for citizens in a geographically limited area of the 9 state and has the power to act primarily on behalf of that area. 10 Sec. 131. (1) The director may issue, alter, or rescind 11 administrative and procedural directives as determined to be nec- 12 essary for the effective administration of this act. The direc- 13 tives are exempt from the definition ofadministrativeA rule 14 pursuant to section7(9)7 of the administrative procedures act 15 of 1969,Act No. 306 of the Public Acts of 1969, being sections1624.201 to 24.328 of the Michigan Compiled Laws1969 PA 306, 17 MCL 24.207. The directives shall be placed in the appropriate 18 manual and distributed to each principal department,andauton- 19 omous entity within state government, THE SENATE AND HOUSE APPRO- 20 PRIATIONS COMMITTEES, AND THE FISCAL AGENCIES. The directives 21 shall take effect upon written approval of the director unless a 22 later date is specified. Before a directive may become effec- 23 tive, the department shall give the affected principal depart- 24 ments reasonable time, as determined by the department of manage- 25 ment and budget, to respond. 26 (2) The department may promulgate rules as necessary to 27 implement this act. The rules shall be promulgated pursuant to 01245'99 5 1Act No. 306 of the Public Acts of 1969THE ADMINISTRATIVE 2 PROCEDURES ACT OF 1969, 1969 PA 306, MCL 24.201 TO 24.328. 3 Sec. 203. (1) The department shall issue directives, after 4 consultation with any affected state agency, relative to state 5 automated information processing installations AND TELECOMMUNICA- 6 TIONS PROJECTS AND SERVICES including the planning,and7 establishment, CONSOLIDATION, OR OUTSOURCING of state information 8 processing installations AND TELECOMMUNICATIONS PROJECTS AND 9 SERVICES to assure the design, implementation, and maintenance of 10 effective and efficient support systems for state agencies. 11(2) The department shall report any modifications to the12definition of information processing to the appropriations com-13mittees and the fiscal agencies not less than 10 days before the14change is to be effective. The modifications shall be effective15unless disapproved by either appropriation committee.16 (2)(3)Within60120 days after the end of each fiscal 17 year, the department shall reportthe followingto the appro- 18 priations committees and the fiscal agencies for the immediately 19 past completed fiscal year. THE REPORT SHALL INCLUDE ALL OF THE 20 FOLLOWING: 21 (A) A DEPARTMENTAL SUMMARY OF EXPENDITURES AND SOURCE OF 22 FUNDING FOR ALL INFORMATION TECHNOLOGY PROJECTS UNDERTAKEN BY A 23 PRINCIPAL DEPARTMENT. 24 (B) EXPENDITURES ON INFORMATION TECHNOLOGY HARDWARE, INFOR- 25 MATION TECHNOLOGY SOFTWARE, INFORMATION TECHNOLOGY CONSULTING 26 SERVICES ENTERED INTO WITH THE PRIVATE SECTOR, AND EXPENDITURES 01245'99 6 1 RELATED TO STATE EMPLOYEES WHOSE PRIMARY WORK ASSIGNMENT INVOLVES 2 INFORMATION TECHNOLOGY SUPPORT. 3 (C) A DISTINCTION BETWEEN INFORMATION TECHNOLOGY EXPENDI- 4 TURES MADE DIRECTLY BY STATE DEPARTMENTS AND THOSE EXPENDITURES 5 MADE THROUGH CONTRACTS WITH THE PRIVATE SECTOR.:6(a) The expenditures and funding for each state data7center.8(b) The amount and source of funding for automated informa-9tion processing expenditures other than the amounts appropriated10for in each principal department.11(c) The amount and source of funding of expenditures by a12principal department for the acquisition of end-user computing13equipment as approved by the department.14 (3)(4) Except as provided in subsection (2), anAN expen- 15 diture shall not be made for automated information processing 16 unless the expenditure is pursuant to an automated information 17 processing planwhichTHAT is approved by the department. 18 (4) THE DEPARTMENT SHALL DEVELOP AND MAINTAIN A STATEWIDE 19 PLAN FOR THE EFFECTIVE AND EFFICIENT UTILIZATION OF INFORMATION 20 PROCESSING AND TELECOMMUNICATION PROJECTS AND SERVICES. 21 (5) THE DEPARTMENT MAY ARRANGE FOR AND EFFECT A UNIFIED AND 22 INTEGRATED STATEWIDE INFORMATION PROCESSING AND TELECOMMUNICATION 23 SYSTEM AND PROVIDE FOR THE ADMINISTRATION OF THE SYSTEM. 24 (6) A STATE AGENCY SHALL NOT PURCHASE OR OPERATE A TELECOM- 25 MUNICATIONS FACILITY OR SYSTEM OR AN AUTOMATED DATA PROCESSING 26 SYSTEM OR INSTALLATION UNLESS THE FACILITY, SYSTEM, OR 27 INSTALLATION IS APPROVED BY THE DEPARTMENT. 01245'99 7 1 (7) EACH STATE AGENCY SHALL REPORT TO THE DEPARTMENT AND TO 2 THE APPROPRIATE APPROPRIATIONS COMMITTEES AND FISCAL AGENCIES ON 3 EACH INFORMATIONAL SYSTEM SOLD OR MARKETED BY THE STATE AGENCY OR 4 A CONTRACTOR HIRED BY THE STATE AGENCY. THE REPORT SHALL INCLUDE 5 ALL COSTS OF DEVELOPMENT OF THE SYSTEM, THE INCOME DERIVED FROM 6 THE MARKETING OR SALE, AND THE DISPOSITION OF THE INCOME. 7 Sec. 204. (1) The department shall develop and implement 8 standardized risk management policies, practices, and procedures 9 for all state agencies. 10 (2) The department shall review AND APPROVE all risk manage- 11 ment related programs of state agencies, including, but not 12 limited to, worker's compensation, disability management, insur- 13 ance, safety, loss control, claims handling, exposure analysis, 14 accident investigation, and risk management information systems. 15 (3) Afterreview byCONSULTATION WITH affected state agen- 16 cies, the department may administer selected risk management 17 related programs as described in subsection (2). 18 (4) The department shall review and approve all proposals 19 for the acquisition of insurance or RISK MANAGEMENT related 20 PROGRAM services for state agencies and utilize self-insurance 21 optionswhereIF cost effective. 22 Sec. 205. (1) As used in this section:and sections 20623and 207:24 (a) "Form" means an application, questionnaire, permit, 25 order, schedule, record, report, or document in regular and con- 26 tinuing usewhichTHAT is used to obtain information, response, 01245'99 8 1 compliance, or application that is required from the public or 2 private sector by this state. 3(b) "Forms efficiency analysis" means an evaluation of a4particular form to judge its efficiency as a paperwork system5which addresses the productivity, product cost, public image, and6management control aspects of the form.7 (B)(c)"Forms management program" means a total system 8 intended to improve the efficiency of state government through 9 forms including, but not limited to, survey, analysis, design, 10 specification, printing, buying, inventory storage, use, and dis- 11 tribution of forms. 12(d) "Forms survey" means forms efficiency analysis of all13forms in current use by an agency.14(e) "Public form" means a form distributed by a state agency15to a person or entity outside of state government.16 (2) THE DEPARTMENT SHALL ISSUE DIRECTIVES FOR THE IMPLEMEN- 17 TATION AND MAINTENANCE OF A FORMS MANAGEMENT PROGRAM WITHIN EACH 18 STATE AGENCY. THE DEPARTMENT SHALL COORDINATE THE DEVELOPMENT OF 19 FORMS AT STATE AGENCIES IN ORDER TO FACILITATE THE STANDARDIZA- 20 TION OF FORMS, RECOMMEND THE ELIMINATION OF REDUNDANT FORMS, AND 21 PROVIDE A CENTRAL SOURCE OF INFORMATION REGARDING FORMS USAGE IN 22 STATE GOVERNMENT. 23 Sec. 217. (1) The department shall issue and administer 24 directives relative to the travel of officers and unclassified 25 employees of state agencies when engaged in the performance of 26 state business and for the reimbursement of expenses necessarily 27 incurred when engaged in the performance of state business from 01245'99 9 1 whatever source the reimbursement may be financed. The 2 directives issued pursuant to this section shall not take effect 3 unless the directives are approved by the board. 4 (2) A meeting of a state agency shall be held in a facility 5 owned, leased, being purchased, or operated by this state, the 6 federal government, a unit of local government, or a state sup- 7 ported institution, college, or university, unless the chief 8 executive officer of the state agency, in writing, authorizes a 9 different location. 10 (3) On January 1 of each year, the director shall prepare a 11 travel report in a format established jointly by the chairpersons 12 of the appropriations committees and shall submit the report to 13 the appropriations committees and the fiscal agencies. The 14 report shall list each person who received compensation, fees, or 15 remuneration under a budget act for travel outside the state 16 during the preceding12 monthsFISCAL YEAR. The listing shall 17 include the name of the person who received the compensation, 18 fees, or remuneration and the destination, reason for, and dates 19 of the travel; and the transportation and related costs. The 20 report shall also include a SUMMARY statement of the total 21 in-state travel for thesame periodPRECEDING FISCAL YEAR. 22 Sec. 219. (1) The departmentmaySHALL PROVIDE FOR AND 23 issue directives for the management, operation, maintenance, 24 SECURITY, and repair of facilities. The directormaySHALL 25 determine space utilization standards and may assign space within 26 the facilities. The department shall manage and operate state 27 owned facilities under the jurisdiction of the department. 01245'99 10 1 (2) The department shall not assign space in buildings and 2 premises designated as part of the Michigan capitol park and 3 under the exclusive jurisdiction of the Michigan capitol park 4 commission, pursuant to section 298b, and shall not assign space 5 in buildings under the jurisdiction of the legislature or the 6 Michigan capitol committee created under chapter 7 of the legis- 7 lative council act,Act No. 268 of the Public Acts of 1986,8being sections 4.1701 to 4.1702 of the Michigan Compiled Laws9 1986 PA 268, MCL 4.1701 TO 4.1702, unless the Michigan capitol 10 park commission, the legislature, or the Michigan capitol commit- 11 tee request the department to assign such space. 12 (3) The legislative council shall manage and operate the 13 Michigan library and historical center. 14 (4) The Michigan capitol committee shall manage and operate 15 the capitol building and grounds. The senate shall manage and 16 operate the Farnum building and grounds. The house of represen- 17 tatives shall manage and operate the Roosevelt building and 18 grounds. This subsection shall take effect October 1, 1991. 19(5) Effective October 1, 1991, the current labor and trades20and safety and regulatory classifications performing duties in21the capitol building and on the capitol grounds shall no longer22be maintained.23 Sec. 221. (1) The director may provide for the rental and 24 lease of land and facilities for the use of state agencies in the 25 manner provided by law. The rentals and leases shall not be 26 effective unless approved by the board.Before a facility or27space is leased by the state, consisting of a total of 25,00001245'99 11 1gross square feet or more for a term of more than 5 years, the2lease shall be approved by the joint capital outlay subcommittee3of the legislature. For the purposes of this subsection, a lease4agreement for more than the total gross square feet previously5approved by the joint capital outlay subcommittee shall be con-6sidered a new agreement subject to approval of the joint capital7outlay subcommittee.8 (2) If a project costs more than $1,000,000.00 and consists 9 of less than 25,000 gross square feet, the department shall 10 notify the joint capital outlay subcommittee in writing of its 11 intent to proceed with such a facility. The notice shall be 12 given 30 days before the lease contract providing for the pro- 13 posed constructions is entered into. 14 (3) IF THE DIRECTOR PROPOSES TO LEASE SPACE OR A FACILITY 15 WHICH MEETS EITHER OF THE FOLLOWING CRITERIA, APPROVAL OF THE 16 JOINT CAPITAL OUTLAY SUBCOMMITTEE IS REQUIRED PRIOR TO BOARD 17 APPROVAL: 18 (A) THE SPACE OR FACILITY EXCEEDS 25,000 GROSS SQUARE FEET. 19 (B) THE ANNUAL BASE COST OF THE PROPOSED LEASE IS MORE THAN 20 $500,000.00. 21 (4) FOR THE PURPOSES OF THIS SECTION, THE RENEWAL OF AN 22 EXISTING LEASE WILL REQUIRE THE APPROVAL OF THE JOINT CAPITAL 23 OUTLAY SUBCOMMITTEE IF THE RENEWAL RESULTS IN CHANGES TO THE 24 LEASE THAT WOULD CAUSE IT TO MEET THE REQUIREMENTS OUTLINED IN 25 SUBSECTION (3). 26 (5)(3)The department may grant easements, upon terms and 27 conditions the board determines are just and reasonable, for 01245'99 12 1 highway and road purposes, and for constructing, operating, and 2 maintaining pipelines or electric, telephone, telegraph, televi- 3 sion, gas, sanitary sewer, storm sewer, or other utility lines 4 including all supporting fixtures and other appurtenances over, 5 through, under, upon, and across any land belonging to this 6 state, except lands under the jurisdiction of the department of 7 natural resources, the department of military affairs, or the 8 state transportation department. 9 (6)(4)The department shall determine annually the pre- 10 vailing market rental values of all state owned office facilities 11 and private facilities which provide housing for state 12 employees. The rental values determined pursuant to this subsec- 13 tion shall not be effective unless approved by the board. The 14 renting,andleasing, OR LICENSING ofexcessstate owned land 15 andbuildingsFACILITIES to private and public entities shall 16 be at prevailing market rental values OR AT ACTUAL COSTS AS 17 DETERMINED BY THE DIRECTOR. 18(5) The department shall determine the rentals for occu-19pancy of the department of labor building in the city of Detroit20pursuant to section 223.21 (7) THE DEPARTMENT SHALL CHARGE STATE AGENCIES FOR BUILDING 22 OCCUPANCY IN STATE OWNED FACILITIES UNDER THE JURISDICTION OF THE 23 DEPARTMENT. THE RATES TO BE CHARGED FOR BUILDING OCCUPANCY SHALL 24 BE COORDINATED WITH THE BUDGET CYCLE. THE RATES SHALL REFLECT 25 THE ACTUAL COST FOR OCCUPANCY OF THE FACILITIES. 26 Sec. 237. (1)The department shall provide for the27development of studies, designs, plans, specifications, and01245'99 13 1contract documents relative to the acquisition, construction,2improvement, or demolition of facilities.FOR STATE AGENCY CAPI- 3 TAL OUTLAY PROJECTS OR FACILITIES, THE DEPARTMENT IS RESPONSIBLE 4 FOR DEVELOPMENT, OVERSIGHT, REVIEW, AND APPROVAL OF PROGRAM 5 STATEMENTS, STUDIES, DESIGNS, PLANS, MANAGEMENT, SPECIFICATIONS, 6 CONTRACT DOCUMENTS, CONSTRUCTION MANAGEMENT, AND CONSTRUCTION, 7 RELATIVE TO THE ACQUISITION, CONSTRUCTION, LEASE PURCHASE, 8 IMPROVEMENT, DEMOLITION, OR OTHER CAPITAL OUTLAY PROJECTS FOR 9 STATE AGENCIES FOR WHICH AN APPROPRIATION OR OTHER AUTHORIZATION 10 HAS BEEN MADE. 11 (2) The department shallprovide forAPPROVE the AWARD, 12 selection, and employment of architects,andprofessional engi- 13 neers, CONSTRUCTION MANAGERS, AND OTHER DESIGN OR CONSTRUCTION 14 PROFESSIONAL SERVICES CONTRACTORS, subject to rules of the 15 department of civil service, to do all of the following: 16 (a)To study, design, prepare, and reviewPREPARE PROGRAM 17 STATEMENTS, STUDIES, DESIGNS, plans, and specifications for the 18 construction of, repairing of, making additions to, remodeling OR 19 DEMOLITION of, LEASE PURCHASE OF, or acquisition of,STATE 20 facilities. 21 (b)To administerADMINISTER construction work, INCLUDING 22 RESIDENT INSPECTORS, ON-SITE MANAGEMENT, AND SUPERVISION OF CON- 23 STRUCTION PROJECTS. 24(3) The department shall provide resident inspectors if the25department considers it necessary for on site observation of the26construction of facilities.01245'99 14 1 (3)(4)The department may obtain independent testing 2 services to provide quality control of work performed on 3 facilities. 4 (4) PRIOR TO STATE BUILDING AUTHORITY FINANCING, THE DEPART- 5 MENT SHALL PROVIDE FINAL APPROVAL OF THE CAPITAL OUTLAY PROJECT 6 TO ENSURE COMPLIANCE WITH THE AUTHORIZED PROGRAM, PLANS, AND 7 SPECIFICATIONS. 8 (5) THE ATTORNEY GENERAL SHALL REVIEW ALL STANDARD LEASE AND 9 LEASE PURCHASE AGREEMENT FORMATS AND APPROVE ANY EXCEPTIONS TO 10 THE STANDARD FORMATS AND MAY ASSESS A FEE FOR LEGAL SERVICES PUR- 11 SUANT TO AN AGREEMENT WITH THE DEPARTMENT. 12 SEC. 237A. (1) THIS SECTION PERTAINS TO CAPITAL OUTLAY 13 PROJECTS FOR COMMUNITY COLLEGES AND UNIVERSITIES. 14 (2) THE DEPARTMENT SHALL REVIEW DOCUMENTS ASSOCIATED WITH 15 COMMUNITY COLLEGE AND UNIVERSITY CAPITAL OUTLAY PROJECTS FOR 16 WHICH AN APPROPRIATION OR OTHER AUTHORIZATION HAS BEEN MADE. 17 (3) THE DEPARTMENT SHALL PROVIDE ARCHITECTURAL AND PROFES- 18 SIONAL ENGINEERING REVIEW OF DOCUMENTS INCLUDING DESIGNS, PLANS, 19 AND CHANGE ORDERS AT EACH STAGE OF THE PROJECT TO ENSURE THAT THE 20 PROJECT OR FACILITY IS IN COMPLIANCE WITH APPROVED PROGRAM, 21 APPROPRIATION, AND CAPITAL OUTLAY REQUIREMENTS. 22 (4) THE DEPARTMENT SHALL REVIEW THE AWARD AND SELECTION OF 23 ARCHITECTS, PROFESSIONAL ENGINEERS, CONSTRUCTION MANAGERS, AND 24 OTHER DESIGN OR CONSTRUCTION PROFESSIONAL SERVICE CONTRACTORS. 25 (5) THE DEPARTMENT SHALL DO ALL OF THE FOLLOWING: 26 (A) REVIEW THE CONSTRUCTION BID. 01245'99 15 1 (B) REVIEW MONTHLY REPORTS TO ENSURE APPROPRIATE 2 CONSTRUCTION PROGRESS, EVALUATE CHANGE ORDERS, AND WATCH FOR 3 POTENTIAL PROBLEMS. 4 (C) RESPOND TO COLLEGE AND UNIVERSITY REQUESTS FOR ASSIST- 5 ANCE ON THE CAPITAL OUTLAY PROCESS, CONTRACTOR ISSUES, AND OTHER 6 CAPITAL OUTLAY RELATED ISSUES. 7 (D) PROVIDE FOR FIELD CHECKS AND AUDITS THROUGHOUT THE 8 PROJECT IN ORDER TO MEET THE TRUSTEE REQUIREMENTS OF THE STATE 9 BUILDING AUTHORITY. 10 (6) THE DEPARTMENT MAY CHARGE A FEE FOR THE SERVICES 11 DESCRIBED IN THIS SECTION AT A RATE NOT TO EXCEED ACTUAL COSTS. 12 (7) IN THE EVENT THAT A COLLEGE OR UNIVERSITY CHOOSES TO 13 HAVE THE DEPARTMENT PROVIDE FOR THE COMPLETE ADMINISTRATION OF A 14 CAPITAL OUTLAY PROJECT, THEN THE PROVISIONS OF SECTION 237 APPLY 15 TO THE PROJECT. 16 (8) PRIOR TO STATE BUILDING AUTHORITY FINANCING, THE DEPART- 17 MENT SHALL PROVIDE FINAL REVIEW OF THE CAPITAL OUTLAY PROJECT TO 18 ENSURE COMPLIANCE WITH THE AUTHORIZED PROGRAM, PLANS, AND 19 SPECIFICATIONS. 20 Sec. 241. (1) Except for the contracts permitted in section 21 240, a contract shall not be awarded for the construction, 22 repair, remodeling, or demolition of a facility unless the con- 23 tract is let pursuant to a bidding procedure which is approved by 24 the board. The department shall issue directives prescribing 25 procedures to be used to implement this section. The procedures 26 shall require apublic advertisement of intention to award01245'99 16 1 COMPETITIVE SOLICITATION IN THE AWARD OF any contract for 2 construction, repair, remodeling, or demolition of a facility. 3 (2) The department may award or approve the award, if the 4 board approves, of construction contracts to construct a project 5 for which the director is the agent and may expend, for the pur- 6 poses and in the manner set forth, the amounts appropriated. The 7 director is not the agent for a community college or institution 8 of higher education, but may act in that capacity upon the spe- 9 cific request of a community college or institution of higher 10 education. 11 Sec. 242. (1) This section applies to a projectwhich is12any of the following: (a) A projectauthorizedfor planning13 pursuant to an appropriation act. 14(b) A project which will be financed by general fund appro-15priations other than lump sums.16(c) A project which will be financed by the state building17authority.18 (2)The JCOS and the director shall jointly determine the19priority of the projects to be studied and planned. The depart-20ment shall then review program statements and prepare plans for21projects in accordance with the priority list.STATE AGENCIES, 22 COMMUNITY COLLEGES, AND UNIVERSITIES SHALL DEVELOP 5-YEAR CAPITAL 23 OUTLAY REQUESTS, WHICH SHALL INCLUDE THE NEED FOR REMODELING AND 24 RENOVATIONS. FOR COMMUNITY COLLEGES AND UNIVERSITIES, THE 5-YEAR 25 CAPITAL OUTLAY REQUESTS SHALL ALSO INCLUDE THE NEED FOR SPECIAL 26 MAINTENANCE. THESE REQUESTS SHALL BE SUBMITTED ANNUALLY TO THE 27 DEPARTMENT AND TO THE JCOS. 01245'99 17 1 (3)A professional services contract shall not be awarded2until a program statement is approved by the department and3notice of the approval is given to JCOS.THE DEPARTMENT AND THE 4 JCOS SHALL REVIEW CAPITAL OUTLAY REQUESTS. THE DEPARTMENT SHALL 5 PRIORITIZE REQUESTS AND SHALL INCLUDE THE RECOMMENDED REQUESTS IN 6 THE ANNUAL EXECUTIVE BUDGET RECOMMENDATION. 7 (4)A planning or preliminary study of a project shall be8pursuant to the purpose and scope as determined in the program9statement.EACH RECOMMENDED REQUEST INCLUDED IN THE EXECUTIVE 10 BUDGET SHALL INCLUDE SUFFICIENT STATE FUNDS FOR STATE AGENCY 11 PROJECTS AND INSTITUTION FUNDS FOR COLLEGE AND UNIVERSITY 12 PROJECTS TO PROVIDE FOR PROFESSIONALLY DEVELOPED PROGRAM STATE- 13 MENTS AND SCHEMATIC PLANS. THE REQUEST FOR PROGRAM DEVELOPMENT 14 AND SCHEMATIC PLANNING MUST BE APPROVED BY THE JCOS AND THE LEG- 15 ISLATURE THROUGH THE APPROPRIATION PROCESS. 16(5) An amount shall not be expended for schematics unless17the release is authorized by the department and the JCOS.18 (5)(6) An appropriation shall not be released for prepara-19tion of a preliminary planning document until the schematics for20the project are approved by the department and the JCOS and the21release is authorized by the department and the JCOS.PROGRAM 22 STATEMENTS AND SCHEMATIC PLANNING DOCUMENTS SHALL BE REVIEWED BY 23 THE DEPARTMENT AND, WHEN THE REVIEW IS COMPLETED, SHALL BE SUB- 24 MITTED TO THE JCOS AS EITHER APPROVED OR NOT APPROVED. 25 (6)(7) An appropriation shall not be released for a con-26struction project unless the preliminary plans for the project27are approved by the department and the JCOS.UPON REVIEW AND 01245'99 18 1 APPROVAL BY THE JCOS, THE JCOS AND THE LEGISLATURE MAY AUTHORIZE 2 THE PROJECT FOR FINAL DESIGN AND CONSTRUCTION WITH A LINE-ITEM 3 APPROPRIATION IN AN APPROPRIATION BILL. 4 (7)(8) Appropriations made for studies and preliminary5plans shall not be considered a commitment on the part of the6legislature to appropriate funds for the completion of plans or7construction of any project based on the studies or preliminary8plans. The total authorized cost as set forth for a specific9project for which only a partial appropriation is made shall not10be considered a commitment on the part of the legislature to11appropriate the difference between the amount appropriated and12the amount authorized pursuant to a capital outlay appropriation13act during the next or subsequent fiscal years. The total appro-14priation will be equal to the actual cost of providing a project15designed and constructed to meet the purpose and scope of the16project as currently recognized by the legislature and equal to17or less than the authorized total cost, or the total authorized18project cost less any funds received from private or federal19sources, whichever is the smaller amount.PRELIMINARY PLANS 20 SHALL BE SUBMITTED TO THE DEPARTMENT FOR REVIEW AND APPROVAL. 21 THE DEPARTMENT SHALL REVIEW AND APPROVE FINAL PLANS TO BE PRE- 22 PARED FOR BIDDING. BID RESULTS SHALL BE SUBMITTED TO THE JCOS. 23 (8)(9) A project may be exempted from this section pursu-24ant to a capital outlay budget act.THE DEPARTMENT SHALL PROVIDE 25 FOR REVIEW AND OVERSIGHT OF CAPITAL OUTLAY PROJECTS FINANCED 26 EITHER IN TOTAL OR IN PART BY THE STATE BUILDING AUTHORITY 27 PURSUANT TO THE PROVISIONS OF SECTIONS 237 AND 237A. 01245'99 19 1 (9)(10) A project which is financed with restricted fund2money may be required to comply with this section pursuant to a3budget act.APPROPRIATIONS MADE FOR STUDIES AND INITIAL PLANS 4 SHALL NOT BE CONSIDERED A COMMITMENT ON THE PART OF THE LEGISLA- 5 TURE TO APPROPRIATE FUNDS FOR THE COMPLETION OF PLANS OR CON- 6 STRUCTION OF ANY PROJECT BASED ON THE STUDIES OR PLANNING 7 DOCUMENTS. 8 Sec. 246. (1) The release of allocations may be approved 9 when the legislature has specified either a total authorized cost 10 or has appropriated an amount sufficient to complete the desig- 11 nated project. The authorized cost of projects shall only be 12 established or revised by specific reference in a budget act, by 13 concurrent resolution adopted by both houses of the legislature, 14 or inferred by the total amount of any appropriations made to 15 complete plans and construction. 16 (2) Expenditures under a capital outlay budget act shall be 17 authorized when the release of the appropriation is approved by 18 the board. The board shall approve the release of construction 19 appropriations when the director certifies that a project can be 20 accomplished within the appropriation or authorization and that 21 the project is in compliance with this act. For each project 22 certified, the board, upon the further recommendation of the 23 director, shall approve the release of only those amounts 24 required to complete the project according to the recommended 25 purpose and scopein the executive budget, its supporting docu-26ments, or as subsequently revised by the legislatureAS PROVIDED 27 IN AN APPROPRIATION ACT. Contracts or other commitments shall 01245'99 20 1 not be incurred or obligated which will result in the completion 2 of a project which exceeds this purpose and scope. A state 3 agency, community college, or institution of higher education 4 shall not make any commitments for a project until after the 5 release of the appropriation pursuant to this act. The board may 6 approve the release of a part of any appropriation for the pur- 7 pose of preparing the planning or bidding documents or for inves- 8 tigations which may be necessary to determine whether or not the 9 project can be completed within the appropriation. 10(3) Funds for a project costing more than $1,000,000.0011shall not be released by the board unless either of the following12conditions is met:13(a) The director has certified to the board in writing that14the total project cost is in compliance with section 244.15(b) The director has certified to the board in writing that16the joint capital outlay subcommittee has approved the deferral17or deletion of specific project costs as categorized in18section 244. All requests for deferrals shall include the spe-19cific costs and future funding sources associated with each pro-20posed deferral.21 Sec. 248. (1) This section applies to all capital outlay 22 projects appropriated in any budget act. This section does not 23 apply to lump sums other than planning projects. 24 (2) Appropriations made in any budget act for a planning 25 project shall not lapse to the fund from which appropriated at 26 the end of the fiscal year, but shall continue until the purposes 27 for which the sums were appropriated are completed. However, 01245'99 21 1 each project which has been authorized for planning for53 2 years or more and which has not been authorized for FINAL DESIGN 3 AND construction shall be terminated, unless the project is spe- 4 cifically reauthorized in a budget act. 5 (3) APPROPRIATIONS MADE IN ANY BUDGET ACT FOR FINAL DESIGN 6 AND CONSTRUCTION SHALL NOT LAPSE TO THE FUND FROM WHICH THEY ARE 7 APPROPRIATED AT THE END OF THE FISCAL YEAR, BUT SHALL CONTINUE 8 UNTIL THE PURPOSES FOR WHICH THE SUMS WERE APPROPRIATED ARE 9 COMPLETED. HOWEVER, EACH PROJECT THAT HAS BEEN AUTHORIZED FOR 10 FINAL DESIGN AND CONSTRUCTION FOR 3 YEARS OR MORE AND WHERE CON- 11 STRUCTION HAS NOT COMMENCED SHALL BE TERMINATED, UNLESS THE 12 PROJECT IS SPECIFICALLY REAUTHORIZED IN A BUDGET ACT. 13 (4)(3)Except as otherwise provided in this section, the 14 balance of any capital outlay project other than a planning 15 project shall not lapse at the end of the fiscal year for which 16 the appropriation was made, but shall continue for not more than 17 2 fiscal years occurring after the fiscal year for which the 18 appropriation for the project is made. 19 (5)(4)A capital outlay project may be continued beyond 3 20 fiscal years if the bid for the start of construction of the 21 project is awarded before the end of the second fiscal year 22 occurring after the fiscal year for which the appropriation for 23 the project is made. 24 (6)(5)A capital outlay project which is for purchase of 25 property may be continued beyond 3 fiscal years if a contract to 26 purchase property is entered into before the end of the second 27 fiscal year occurring after the fiscal year for which the 01245'99 22 1 appropriation for the purchase is made but only the amount 2 necessary to complete the purchase of the property pursuant to 3 the contract shall be carried forward. 4 (7)(6)A capital outlay project may be continued beyond 3 5 fiscal years if a federal grant award is pending and the federal 6 rules preclude the award of the bid before the end of the second 7 fiscal year occurring after the fiscal year for which the appro- 8 priation for the project was made, but shall not be continued 9 beyond an additional year unless the bid for the start of con- 10 struction of the project is awarded. 11 (8)(7)If the bid for the start of construction of the 12 project is awarded before the appropriations for the project are 13 scheduled to lapse pursuant to subsection(3)(4) or(5)(6), 14 the unobligated balance of the appropriations for the project 15 shall not lapse but shall continue for 23 months after a project 16 is substantially completed. 17 (9)(8)If a capital outlay project is subject to a legal 18 action, the balance shall lapse pursuant to subsections (2) to 19(7)(8), or 30 days after the legal action is settled, or 30 20 days after a final order is entered, whichever is later. 21 (10)(9)An unexpended balance which is to lapse pursuant 22 to this section shall lapse to the fund from which the appropria- 23 tion is made. 24 (11) A GRANT OR GRANT-IN-AID APPROPRIATED FOR THE DEMOLI- 25 TION, ACQUISITION, CONSTRUCTION, REPAIR, OR MAINTENANCE OF CAPI- 26 TAL ASSETS SHALL NOT BE REDUCED, ADJUSTED, DELAYED, IMPOUNDED, 27 LAPSED, OR OTHERWISE ALTERED BY THE DIRECTOR FOR ANY PURPOSE 01245'99 23 1 WITHOUT LEGISLATIVE APPROVAL AND SHALL BE CARRIED FORWARD UNTIL 2 AWARDED, IN FULL, TO THE RECIPIENT OF THE APPROPRIATION CONSIS- 3 TENT WITH LEGISLATIVE INTENT. 4 Sec. 251. (1) This section applies to all real property of 5 the state except all of the following: 6 (a) Property under the jurisdiction of the state transporta- 7 tion department. 8 (b) Property under the jurisdiction of a state institution 9 of higher education. 10 (c) Property under the jurisdiction of the department of 11 natural resources. 12 (d) Property under the jurisdiction of the department of 13 military affairs. 14 (2) The department shall provide for the development and 15 maintenance of real property records and facility inventories. 16 The department may award appropriate service contracts or employ 17 land surveyors to survey, monument, map, describe, and record 18 real property and facilities. 19 (3) The department shall issue directives to provide for the 20 disposition process for facilities and landswhichTHAT are 21 considered surplus. THE DEPARTMENT SHALL REQUIRE A PUBLIC NOTICE 22 COMPONENT IN ITS DIRECTIVES REGARDING THE DISPOSITION PROCESS 23 UNDER THIS SUBSECTION. 24 Sec. 267. (1) The department shall issue directives to pro- 25 vide for the disclosure, transfer, and disposal of surplus, sal- 26 vage, and scrap material of state agencies. The department may 27 dispose of surplus and of salvage or scrap by donating or selling 01245'99 24 1 the property or equipment to a unit of local government.or by2sellingHOWEVER, IF A UNIT OF LOCAL GOVERNMENT IS NOT INTERESTED 3 IN THE PROPERTY OR EQUIPMENT, THE DEPARTMENT MAY SELL the sur- 4 plus, salvage, or scrap at auction. 5 (2) The department may pay necessary costs incurred in the 6 conduct of the transfers or auctions of the property or equipment 7 including the necessary warehousing and reconditioning costs from 8 the proceeds of the auction or by assessing a handling fee for 9 property or equipment being donated. 10 SEC. 281A. (1) THE DEPARTMENT OF MANAGEMENT AND BUDGET AND 11 EACH PRINCIPAL EXECUTIVE DEPARTMENT AND AGENCY SHALL PROVIDE TO 12 THE SENATE AND HOUSE OF REPRESENTATIVES STANDING COMMITTEES ON 13 APPROPRIATIONS AND THE SENATE AND HOUSE FISCAL AGENCIES A MONTHLY 14 REPORT ON ALL PERSONAL SERVICE CONTRACTS IN AN AMOUNT GREATER 15 THAN $10,000.00 AWARDED WITHOUT COMPETITIVE BIDDING, PRICING, OR 16 RATE SETTING. THE REPORT SHALL INCLUDE ALL OF THE FOLLOWING: 17 (A) THE TOTAL DOLLAR AMOUNT OF THE CONTRACT. 18 (B) THE EFFECTIVE BEGINNING AND ENDING DATES OF THE 19 CONTRACT. 20 (C) THE NAME OF THE VENDOR. 21 (D) THE TYPE OF SERVICE TO BE PROVIDED. 22 (2) FOR NEW PERSONAL SERVICE CONTRACTS OF $100,000.00 OR 23 MORE, THE DEPARTMENT OF MANAGEMENT AND BUDGET SHALL PROVIDE A 24 MONTHLY REPORT TO THE SENATE AND HOUSE OF REPRESENTATIVES STAND- 25 ING COMMITTEES ON APPROPRIATIONS AND THE SENATE AND HOUSE FISCAL 26 AGENCIES INCLUDING ALL OF THE FOLLOWING: 01245'99 25 1 (A) THE TOTAL DOLLAR AMOUNT OF THE CONTRACT. 2 (B) THE EFFECTIVE BEGINNING AND ENDING DATES OF THE 3 CONTRACT. 4 (C) THE NAME OF THE VENDOR. 5 (D) THE TYPE OF SERVICE TO BE PROVIDED. 6 (3) EACH PRINCIPAL EXECUTIVE DEPARTMENT AND AGENCY SHALL 7 PROVIDE A MONTHLY SUMMARY LISTING TO THE SENATE AND HOUSE OF REP- 8 RESENTATIVES STANDING COMMITTEES ON APPROPRIATIONS AND THE SENATE 9 AND HOUSE FISCAL AGENCIES OF INFORMATION THAT IDENTIFIES ANY 10 AUTHORIZATIONS FOR PERSONAL SERVICE CONTRACTS THAT ARE PROVIDED 11 TO THE DEPARTMENT OF CIVIL SERVICE PURSUANT TO DELEGATED AUTHOR- 12 ITY GRANTED TO EACH PRINCIPAL EXECUTIVE DEPARTMENT AND AGENCY 13 RELATED TO PERSONAL SERVICES CONTRACTS. 14 (4) THE CIVIL SERVICE DEPARTMENT SHALL ALSO INCLUDE A REPORT 15 OF ALL MIXED CONTRACTS THAT THE CIVIL SERVICE COMMISSION DID NOT 16 REVIEW FOR APPROVAL UNDER THE AUTHORITY OF CIVIL SERVICE RULE 17 4-6.3, STANDARD (E). 18 Sec. 303. (1) "Detroit consumer price index" means the most 19 comprehensive index of consumer prices available for the Detroit 20 area from the bureau of labor statistics of the United States 21 department of labor OR ITS SUCCESSOR. 22 (2) "Open-end appropriation" means an annual appropriation 23 without a specific sum, for a state budget purpose. 24 (3) "Personal income" means as defined by the bureau of eco- 25 nomic analysis of the United States department of commerce OR ITS 26 SUCCESSOR. 01245'99 26 1 (4) "Program" means the activities and financial resources 2 applied to a public policy intention as approved by the 3 legislature. 4 (5) "Proportion" means the proportion of total state spend- 5 ing from state sources paid to all units of local government in a 6 fiscal year, and shall be calculated by dividing a fiscal year's 7 state spending from state sources paid to units of local govern- 8 ment by total state spending from state sources for the same 9 fiscal period. 10 Sec. 305. (1) "Total state spending" means the sum of state 11 operating fund expenditures, not including transfersfor12financingbetween funds. 13 (2) "Total state spending from state sources" means the sum 14 of state operating fund expenditures not including transfersfor15financingbetween funds, federal aid, and restricted local and 16 private sources of financing. 17 (3) "Transfer payments" means as defined by the bureau of 18 economic analysis of the United States department of commerce OR 19 ITS SUCCESSOR. 20 (4) "Unit of local government" means unit of local govern- 21 ment as defined in section 115(6). 22 Sec. 342. The state budget director OR STATE TREASURER 23 shall establish and maintain an economic analysis, revenue esti- 24 mating, and monitoring activity. The activity shall include the 25 preparation of current estimates of all revenue by source for 26 state operating funds for the initial executive budget proposal 01245'99 27 1 to the legislature and thereafter through final closing of the 2 state's accounts. 3 Sec. 344. (1) The state budget director shall develop 4 annual proposals for departmental program activities and the 5 associated estimated costs and sources of financing. The propos- 6 als shall reflect current departmental program activities rela- 7 tive to impact on state policy goals, and new and augmented pro- 8 gram activities in response to changing priorities. The propos- 9 als shall reflect the evaluations and analyses of state programs 10 and activities prescribed in this act. 11 (2) The state budget director shall review the auditor 12 general's audits of state agencies as a basis for making recom- 13 mendations in departmental program expenditure proposals. 14 (3) The state budget director shall annually determine the 15 amounts required for interest and principal of state debt and the 16 estimated costs of capital outlay projects to provide facilities 17 for state program services. 18(4) The state budget director shall review the long-range19capital outlay needs for the succeeding 5 years and the project20priorities as determined pursuant to section 242.21 Sec. 350. (1) If state government assumes the financing and 22 administration of a function, after December 22, 1978, which was 23 previously performed by a unit of local government, the state 24 payments for the function shall be counted as state spending paid 25 to units of local government. 26(2) Amounts excepted from the financial liability of a27county under section 302(2)(c) of the mental health code, Act01245'99 28 1No. 258 of the Public Acts of 1974, being section 330.1302 of the2Michigan Compiled Laws, shall be counted as state spending paid3to local units of government.4(3) State spending paid to units of local government shall5include the same proportion of the state's short-term interest6and interfund borrowing expense as the proportion of state spend-7ing from state resources paid to all units of local government,8as is established pursuant to section 349.9 (2)(4)Refunds or other repayments of prior year revenues 10 shall not be considered in the determination of total state 11 spending. 12 Sec. 350a. As used in sections 26 to 28 of article IX of 13 the state constitution of 1963: 14 (a) "Personal income of Michigan" for a calendar year means 15 total annual personal income as officially reported by the United 16 States department of commerce, bureau of economic analysis, OR 17 ITS SUCCESSOR, in August of the year following the calendar year 18 for which the report is made. Revision of the total annual per- 19 sonal income figure as reported by the bureau of economic analy- 20 sis after August of the year following the calendar year for 21 which the report is made shall not cause personal income of 22 Michigan as defined to be revised. 23 (b) "Total state revenues" means the combined increases in 24 net current assets of the general fund and special revenue funds, 25 except for component units included within the special revenue 26 group for reporting purposes only. For fiscal years beginning 27 after September 30, 1986, total state revenues shall be computed 01245'99 29 1 on the basis of generally accepted accounting principles as 2 defined in this act. However, total state revenues shall not 3 include the following: 4 (i) Financing sources which have previously been counted as 5 revenue, for the purposes of section 26 of article IX OF THE 6 STATE CONSTITUTION OF 1963 such as, beginning fund balance, 7 expenditure refunds, and residual-equity and operating transfers 8 from within the group of funds. 9 (ii) Current assets generated from transactions involving 10 fixed assets and long-term obligations in which total net assets 11 do not increase. 12 (iii) Revenues which are not available for normal public 13 functions of the general fund and special revenue funds. 14 (iv) Federal aid. 15 (v) Taxes imposed for the payment of principal and interest 16 on voter-approved bonds and loans to school districts authorized 17 under section 16 of article IX of the state constitution of 18 1963. 19 (vi) Tax credits based on actual tax liabilities or the 20 imputed tax components of rental payments, but not including the 21 amount of any credits not related to actual tax liabilities. 22 (vii) Refunds or payments of revenues recognized in a prior 23 period. 24 (viii) The effects of restatements of beginning balances 25 required by changes in generally accepted accounting principles. 26 (c) The calculation of total state revenues required by 27 section 350b(3) shall not be adjusted after the filing of the 01245'99 30 1 report required by June 30, 1989, unless future changes in 2 generally accepted accounting principles would substantially dis- 3 tort the comparability of the base year and the current and 4 future years. In no event shall intervening years be 5 recalculated. 6 Sec. 350e. The department shall annually prepare a report 7 which summarizes in detail the state's compliance with the reve- 8 nue limit established in section 350b. The report shall be sub- 9 mitted to the auditor general for review and comment not later 10 than May 31 of each year, and shall be published by submission to 11 the legislature not later than June 30 of each year.For the12fiscal year 1988 report only, the report shall be submitted to13the auditor general not later than August 31, 1989, and published14not later than September 30, 1989.15 Sec. 352. (1) When the annual growth rate is more than 2%, 16 the percentage excess over 2% shall be multiplied by the total 17 state general fund-general purpose revenue for the fiscal year 18 ending in the current calendar year to determine the amount to be 19 transferred to the fund from the state general fund in the fiscal 20 year beginning in the current calendar year. 21 (2) When the annual growth rate is less than 0%, the percen- 22 tage deficiency under 0% shall be multiplied by the total state 23 general fund-general purpose revenue for the fiscal year ending 24 in the current calendar year to determine the eligible amount to 25 be transferred to the state general fund from the fund in the 26currentfiscal year ENDING IN THE CURRENT CALENDAR YEAR. When 27 the formula calls for a larger transfer from the fund than is 01245'99 31 1 necessary to balance the current fiscal year state general 2 fund-general purpose budget, the excess shall remain in the 3 fund. 4 Sec. 353. (1) In a calendar quarter following a calendar 5 quarter in which the seasonally adjusted state unemployment rate 6 as certified by the director of the Michiganemployment7securityJOBS commission is 8% or more, an amount may be appro- 8 priated from the fund by the legislature for the purposes listed 9 in this section in accordance with the following table: 10 11 Percent of seasonally Percent of fund avail- 12 adjusted unemployment able for economic 13 in the calendar quarter stabilization during 14 preceding the calendar the calendar quarter 15 quarter in which following a calendar 16 an amount may be quarter of high 17 appropriated unemployment 18 _________________________ _________________________ 19 8.0-11.9% 2.5% of fund balance 20 as of first day of 21 calendar quarter 22 12.0% and over 5.0% of fund balance 23 as of first day of 24 calendar quarter 25 (2) The legislature may appropriate by law money from the 26 fund in the amounts as provided in this section to assist in the 27 following countercyclical economic stabilization purposes: 01245'99 32 1 (a) Capital outlay. 2 (b) Public works and public service jobs. 3 (c) Refundable investment or employment tax credits against 4 state business taxes for new outlays and hiring in this state. 5 (d) Any other purpose the legislature may provide by law 6 which provides employment opportunities counter to the state's 7 economic cycle. 8 (3) Notwithstanding subsections (1) and (2), there is hereby 9 appropriated $40,000,000.00 from the fund for the Michigan state 10 parks endowment fund. The appropriation provided for in this 11 subsection shall only be effective after the proceeds from the 12 sale of the accident fund have been transferred to the fund as 13 provided for in section 701a of the worker's disability compensa- 14 tion act of 1969,Act No. 317 of the Public Acts of 1969, being15section 418.701a of the Michigan Compiled Laws1969 PA 317, 16 MCL 418.701A. 17 Sec. 353e. (1) Notwithstanding section 353, for the fiscal 18 year ending September 30, 1998, there is appropriated and trans- 19 ferred from the fund to the state school aid fund the sum of 20 $212,000,000.00 for the purpose of paying money damages to school 21 districts and intermediate school districts who were plaintiffs 22 in the consolidated cases known as Durant v State of Michigan, 23Michigan supreme court docket no. 104458-104492, according to24the supreme court's July 31, 1997 opinion in that case456 MICH 25 175, (1997). 26 (2) Notwithstanding section 353, for the fiscal year ending 27 September 30, 1999, there is appropriated and transferred from 01245'99 33 1 the fund to the state school aid fund the sum of $73,700,000.00 2 for the purpose of making appropriations to school districts and 3 intermediate school districts other than those described in 4 subsection (1). 5 (3) Notwithstanding section 353, for the fiscal year ending 6 September 30, 2000, for the fiscal year ending September 30, 7 2001, for the fiscal year ending September 30, 2002, for the 8 fiscal year ending September 30, 2003, for the fiscal year ending 9 September 30, 2004, for the fiscal year ending September 30, 10 2005, for the fiscal year ending September 30, 2006, for the 11 fiscal year ending September 30, 2007, and for the fiscal year 12 ending September 30, 2008, there is appropriated and transferred 13 from the fund to the state school aid fund the sum of 14 $32,000,000.00 for the purpose of making appropriations to school 15 districts and intermediate school districts other than those 16 described in subsection (1). 17(4) Notwithstanding sections 352 and 354, for each fiscal18year ending after October 1, 1997, all general fund-general pur-19pose balances at the final close of the fiscal year shall be20transferred to the fund. If an amount is required to be trans-21ferred to the fund for a fiscal year under section 352, any22amount transferred to the fund under this subsection shall be23considered to be a part of the amount transferred to the fund for24purposes of section 352.25 Sec. 354. (1) The executive budget for each fiscal year 26 shall contain an estimate of the transfer into or out of the fund 27 required by section 352. 01245'99 34 1 (2) The legislature shall include a final estimate of the 2 transfer into or out of the fund required by section 352 in the 3 appropriations bill which contains the revenue estimate required 4 by section 31 of article IV of the state constitution of 1963. 5 (3) Except as provided in subsection(7)(4), a transfer 6 into the fund shall be made in equal monthly installments 7 throughout the fiscal year. Except as provided in subsection 8(7)(4), a transfer out of the fund may be made as needed 9 during the fiscal year. 10 (4) NOTWITHSTANDING SECTION 352, FOR EACH FISCAL YEAR ENDING 11 AFTER OCTOBER 1, 1997, ALL UNRESERVED GENERAL FUND-GENERAL PUR- 12 POSE BALANCES AT THE FINAL CLOSE OF THE FISCAL YEAR SHALL BE 13 TRANSFERRED TO THE FUND. IF AN AMOUNT IS REQUIRED TO BE TRANS- 14 FERRED TO THE FUND FOR A FISCAL YEAR UNDER SECTION 352, ANY 15 AMOUNT TRANSFERRED TO THE FUND UNDER THIS SUBSECTION SHALL BE 16 CONSIDERED TO BE A PART OF THE AMOUNT TRANSFERRED TO THE FUND FOR 17 PURPOSES OF SECTION 352. 18(4) For the fiscal year ending September 30, 1995 only, all19general fund-general purpose balances at the final close of the20fiscal year are appropriated in the following order:21(a) Up to $22,653,100.00 are appropriated for distribution22to the state's 15 universities and 28 community colleges. Of the23$22,653,100.00 available for distribution to the state's 15 uni-24versities and 28 community colleges, $18,805,186.00 shall be dis-25tributed to universities and $3,847,914.00 shall be distributed26to community colleges in the manner provided in subsections (5)27and (6). If the general fund-general purpose balances at the01245'99 35 1final close of the fiscal year are less than $22,653,100.00, the2distribution to the state's 15 universities and 28 community col-3leges shall be reduced proportionally.4(b) If the general fund-general purpose balances at the5final close of the fiscal year exceed $22,653,100.00, the addi-6tional general fund-general purpose balances up to $5,000,000.007are hereby appropriated for state special maintenance projects.8(c) If the general fund-general purpose balances at the9close of the fiscal year exceed $27,653,100, all remaining bal-10ances are hereby appropriated into the counter cyclical budget11and economic stabilization fund. This appropriation shall be12used to satisfy requirements under section 26 of article IX of13the state constitution of 1963.14(5) The appropriation for the state's 15 universities appro-15priated in subsection (4) shall be allocated to the universities16as follows:17Central Michigan university.....................$ 1,350,00018Eastern Michigan university..................... 1,000,00019Ferris state university......................... 625,00020Grand valley state university................... 250,00021Lake Superior state university.................. 250,00022Michigan state university....................... 900,00023Michigan technological university............... 750,00024Northern Michigan university.................... 500,00025Oakland university.............................. 700,00001245'99 36 1Saginaw valley state university................. 505,1862University of Michigan - Ann Arbor.............. 8,000,0003University of Michigan - Dearborn............... 250,0004University of Michigan - Flint.................. 250,0005Wayne state university.......................... 3,000,0006Western Michigan university..................... 475,0007(6) The appropriation for the state's 28 community colleges8appropriated in subsection (4) shall be distributed to the col-9leges in direct proportion to the 1995 fiscal year unrestricted10operating appropriations as follows:11Alpena community college........................$ 63,00912Bay de Noc community college.................... 53,81813Delta college................................... 182,27714Glen Oaks community college..................... 26,99115Gogebic community college....................... 56,84116Grand Rapids community college.................. 251,45017Henry Ford community college.................... 276,75918Jackson community college....................... 168,68919Kalamazoo valley community college.............. 124,89520Kellogg community college....................... 110,99621Kirtland community college...................... 41,61222Lake Michigan college........................... 61,47123Lansing community college....................... 400,09224Macomb community college........................ 433,32425Mid Michigan community college.................. 49,14401245'99 37 1Monroe county community college................. 46,5342Montcalm community college...................... 41,9083Mott community college.......................... 197,9364Muskegon community college...................... 115,1225North central Michigan college.................. 37,6506Northwestern Michigan college................... 107,7577Oakland community college....................... 289,6778St. Clair county community college.............. 90,9229Schoolcraft college............................. 147,84410Southwestern Michigan college................... 68,96611Washtenaw community college..................... 138,36012Wayne county community college.................. 235,23313West Shore community college.................... 28,63714(7) For the fiscal year ending September 30, 1996 only, all15general fund-general purpose balances at the final close of the16fiscal year are hereby appropriated and shall be transferred to17the fund. Notwithstanding section 352, the total amount trans-18ferred to the fund under this subsection shall be considered to19be the amount transferred to the fund for purposes of section 35220for the fiscal year ending September 30, 1996 only.21(8) For the fiscal year ending September 30, 1996 only,22there is appropriated $391,300.00 to the city of Detroit to fund23the Detroit crime lab and the Detroit police special events24unit.25 Sec. 355.(1)The transfer into or out of the fund as 26 provided in section 352 for each fiscal year beginning after 27 September 30, 1978, may be adjusted in light of revision in the 01245'99 38 1 annual growth rate for the calendar year upon which that transfer 2 was made. IF AN ADJUSTMENT IS MADE, IT SHALL BE IMPLEMENTED BY 3 AN APPROPRIATION BILL ENACTED INTO LAW. The adjustment, if made, 4 shall be directly proportional to an increase or decrease in the 5 annual growth rate, but the adjustment shall not be in excess of 6 1% multiplied by the total general fund-general purpose revenue 7 of the fiscal year upon which the transfer was based. The basis 8 for an adjustment shall be a change in the personal income level 9 for that calendar year as determined by the bureau of economic 10 analysis of the United States department of commerce OR ITS 11 SUCCESSOR in the last report it makes before April 30 of the 12 fiscal year in which that calendar year ended. The adjustment, 13 if made, shall be effective on June 1 of the fiscal year in which 14 the transfer is made. 15(2) An appropriation from the fund as provided in section16353 may be adjusted for a change in the unemployment rate statis-17tics for the 4 quarters immediately preceding the quarter in18which the appropriation is to be made, as long as an adjustment19has not already been made in an appropriation from the fund20because of a prior change in the unemployment rate statistics for211 or more of those 4 quarters. A change in the unemployment rate22statistics shall not be made until that change is certified by23the director of the Michigan employment security commission.24(3) An adjustment made pursuant to subsection (2) shall not25be made unless the change in the unemployment rate statistics26would have provided for a different percent of the fund to be27appropriated under section 353. If the adjustment creates a01245'99 39 1state general fund liability, that liability shall be offset2against future appropriations which would have been made under3section 353.4(4) For the fiscal year ending September 30, 1991 only, the5mid-year adjustment to be used to calculate the amount to be6transferred from the fund to the general fund pursuant to7section 352(2) shall be based on the following estimates:8Dollars in9Millions101990 199111Michigan personal income.................. $ 170,534 $ 175,48412Less: Transfer payments.................. (26,866) (28,932)13Subtotal............................ $ 143,668 $ 146,55214Divided by: Detroit C.P.I. for 12 months15ending June 30 (1982=1.00).............. 1.253 1.31716Equals: Real adjusted Michigan personal17income.................................. $ 114,659 $ 111,27718Percentage decrease....................... (2.95)%19Multiplied by: Estimated GF/GP revenue in20FY 1990-91.............................. 7,12021Equals: Transfer from countercyclical22budget and economic stabilization fund23for the fiscal year ending September 30,241991.................................... $ 21025(5) In accordance with the economic stabilization transfer26allowed under section 353(1) there is appropriated from the fund27for the fiscal year ending September 30, 1991 the sum of28$20,000,000.00 determined as follows:29Fund Balance30Calendar as of First Maximum Dollar31Quarter Day of Calendar Maximum Allowable Amount of32Beginning Quarter Withdrawal Withdrawal01245'99 40 14/1/91 $400,000,000 2.5% of the fund $10,000,0002balance as of first3day of quarter47/1/91 $398,000,000 2.5% of the fund $10,000,0005balance as of first6day of quarter7(6) The total transfer from the fund to the general fund for8the fiscal year ending September 30, 1991 pursuant to subsections9(4) and (5) shall be $230,000,000.00.10 Sec. 356. THE BALANCE IN THE FUND SHALL NOT EXCEED 10% OF 11 THE COMBINED LEVEL OF GENERAL FUND-GENERAL PURPOSE AND SCHOOL AID 12 FUND REVENUES. If the balance in the fund at the end of a fiscal 13 year exceeds25%10% of the actual state general fund-general 14 purposerevenueAND SCHOOL AID FUND REVENUES for that fiscal 15 year, the excess shall be rebated TO TAXPAYERS on the individual 16 income tax returns filed following the close of that fiscal year 17 according to a schedule to be established by law. 18 Sec. 363. Within 30 days after the legislature convenes in 19 regular session, except in a year in which a newly elected gover- 20 nor is inaugurated into office when 60 days shall be allowed,or21except in the 1993 calendar year when the transmission date shall22be not later than March 19, 1993,the governor shall transmit to 23 each member of the legislature and thesenate and housefiscal 24 agencies the budget in detail as provided in this act, accom- 25 panied by such explanations and recommendations relative thereto 26 as the governor considers necessary. At the time the budget is 27 transmitted to the legislature, the director shall transmit 28 line-item appropriation detail to the fiscal agencies using a 29 computer software application that is compatible with the budget 01245'99 41 1 tracking computer systems used by the respective fiscal 2 agencies. 3 Sec. 367. (1) Concurrent with transmitting the state budget 4 to the legislature, the governor shall submit to the legislature 5 and thesenate and housefiscal agencies executive budget bills 6 containing ITEMIZED STATEMENTS OF ESTIMATED STATE SPENDING TO BE 7 PAID TO LOCAL UNITS OF GOVERNMENT, individual line item amounts, 8 including the number of FTE positions to be funded by each indi- 9 vidual line item amount, for the proposed expenditures and any 10 necessary bills for additional revenue to provide financing for 11 the proposed expenditures. 12 (2) One executive budget bill and 1 enacted budget bill 13 shall contain all of the following: 14 (a) The estimated revenue for each state operating fund in 15 sufficient detail to provide for comparison with actual revenue. 16 (b) Summary totals for each state operating fund to reflect 17 that recommended expenditures for each fund are within proposed 18 and estimated resources. 19 (c)An itemizedA statement of ESTIMATED state spending to 20 be paid to units of local government, total state spending from 21 state sources of financing, and the state-local proportion 22 derived from that data. 23 Sec. 367b. (1) A revenue estimating conference shall be 24 held in the second week of January and in the last week in May of 25 each year, and as otherwise provided in this act. 26 (2) The principals of the conference shall be thedirector27of the department of management and budgetSTATE BUDGET DIRECTOR 01245'99 42 1 OR THE STATE TREASURER, the director of the senate fiscal agency, 2 and the director of the house fiscal agency, or their respective 3 designees. 4 (3) The conference shall establish an official economic 5 forecast of major variables of the national and state economies. 6 The conference shall also establish a forecast of anticipated 7 state revenues as the conference determines including the 8 following: 9 (a) State income tax collections. 10 (b) State sales tax collections. 11 (c) Single business tax collections. 12 (d) Total general fund/general purpose revenues. 13 (e) Lottery transfers to the school aid fund. 14 (f) Total school aid fund revenues. 15 (G) ANNUAL PERCENTAGE GROWTH IN THE BASIC FOUNDATION ALLOW- 16 ANCE PROVIDED FOR IN THE STATE SCHOOL AID ACT OF 1979, 1979 17 PA 94, MCL 388.1601 TO 388.1772. 18 (H) COMPLIANCE WITH THE STATE REVENUE LIMIT ESTABLISHED BY 19 SECTION 26 OF ARTICLE IX OF THE STATE CONSTITUTION OF 1963. 20 (I) PAY-INS OR PAY-OUTS REQUIRED UNDER THE COUNTERCYCLICAL 21 BUDGET AND ECONOMIC STABILIZATION FUND. 22 (4) The conference's official forecast of economic and reve- 23 nue variables shall be determined by consensus among the 24 principals. 25 (5) The forecasts required by this section shall be for the 26 fiscal year in which the conference is being held and the ensuing 27 fiscal year. 01245'99 43 1 (6) The official conference forecast shall be based upon the 2 assumption that the current law and current administrative proce- 3 dures will remain in effect for the forecast period. 4 Sec. 367f. Upon the written request of a principal, a con- 5 ference shall be convened by thedirectorCHAIRPERSON. 6 Sec. 371. (1) An employee of a state agency shall not make 7 or authorize an expenditure or incur an obligation that results 8 in the agency exceeding the gross appropriation level of an 9 appropriation line item made to that agency by the legislature. 10 The chief executive officer and the chief financial officer of a 11 state agency are responsible for any action taken by a state 12 agency which results in exceeding an appropriation. The chief 13 executive officer of a state agency shall report a violation of 14 this subsection immediately to the director and the chairpersons 15 of the senate and house appropriations committees, together with 16 a statement of any action taken to remedy the occurrence. 17 (2) Within 15 days after a bill appropriating an amount is 18 enacted into law, the amount appropriated shall be divided into 19 allotments by department and by state agency based on periodic 20 requirements to represent a spending plan. The state budget 21 director shall review the allotments.By June 1 of each year,22theTHE director shall submit a report EACH QUARTER to the 23 appropriations committees AND THE FISCAL AGENCIES that compares 24 actual expenditures to the allotments PER APPROPRIATION LINE ITEM 25 made for each department and each state agency forthe first 626months of the fiscal yearTHAT QUARTER. When it appears that a 27 spending plan, or sources of financing related TO A SPENDING 01245'99 44 1 PLAN, do not provide the level of program service assumed in the 2 appropriation for the fiscal year, the state budget director 3 shallpursue 1 of the following remedies:IMMEDIATELY NOTIFY 4 THE CHAIRPERSONS AND MINORITY CHAIRPERSONS OF THE APPROPRIATIONS 5 COMMITTEES, THE CHAIRPERSONS AND MINORITY CHAIRPERSONS OF THE 6 APPROPRIATE APPROPRIATIONS SUBCOMMITTEES, AND THE FISCAL 7 AGENCIES. 8(a) Require from the principal department a lower level of9service spending plan for the fiscal year. The state budget10director shall thereafter withhold any payment which would exceed11the allotment balance in the approved reduced plan. If a reduced12spending or service plan is to be implemented pursuant to this13subdivision, the state budget director shall notify the appropri-14ations committees and the fiscal agencies at least 15 days before15the reduction plan is to be effective.16(b) Reflect the deficiency in projecting and reporting the17status of the state budget. The state budget director shall then18approve the spending plan as submitted by the department and19within 45 days after the enacted appropriation, recommend to the20legislature a supplemental appropriation to provide the necessary21level of program service.22 Sec. 372. (1) Allotments may be adjusted by the state 23 budget director as requested by a department, subject to the con- 24 siderations in section 371(2). 25 (2) A payment which would exceed an allotment balance may be 26 withheld by order of the state budget director. Payments shall 27 not exceed the total periodic allotments for the fiscal year. 01245'99 45 1 (3) For open-end appropriations, a continuing allotment may 2 be approved by the state budget director or the state budget 3 director may require the state agency to submit requests for 4 periodic allotments. 5 (4) Allotments may be reduced or adjusted by the state 6 budget director as a result of implementing measures of adminis- 7 trative efficiency, including the abolishment of positions by 8 appointing authorities. An action taken under this section shall 9 be reported to the appropriations committees AND THE FISCAL 10 AGENCIES within 15 days after the action is taken. 11 (5) The state budget director may issue directives for the 12 allotment of appropriations. 13 Sec. 384. (1) A state agency which applies for federal 14 financial assistance shall notify the department within 10 days 15 after the application is sent. The notification to apply for 16 federal financial assistance shall be on a form prescribed by, 17 and contain information requested by, the department. Within 10 18 days after the state agency receives notice that its application 19 for federal financial assistance is awarded, rejected, revised, 20 or deferred, the state agency shall provide notice of the award, 21 rejection, revision, or deferment of the application to the 22 department. 23 (2) Within 30 days after a state agency receives notice that 24 a federal grant has been awarded to the state for which organiza- 25 tions or units of local government are eligible to apply, the 26 state agency administering the federal grant program shall report 27 to the legislature AND THE FISCAL AGENCIES the availability of 01245'99 46 1 the grant funds and the proposed plan for allocating the grant 2 funds to the organizations or units of local government. A state 3 agency shall not commit any federal grant funds before this noti- 4 fication to the legislature has occurred and a subsequent appro- 5 priation of the funds is made by the legislature. 6 (3) Before December 1 and June 1 of each year, each princi- 7 pal department shall report to the appropriations committees, the 8 fiscal agencies, and the department estimates on the extent to 9 which federal revenues appropriated have been realized and are 10 expected for the remainder of the fiscal year. The report shall 11 detail the estimate by program or grant, and catalog of federal 12 domestic assistance account. 13 Sec. 386. (1) The state budget director shall prepare 14 monthly financial reports. 15 (2) Within3045 days after the end of each month, the 16 state budget director shall transmit copies of the monthly finan- 17 cial report to all the appropriations committee members and the 18 fiscal agencies. The monthly financial report due byNovember1930DECEMBER 15 shall be the first monthly financial report to 20 include statements concerning the fiscal year which began on 21 October 1. 22 (3) Each monthly financial report shall contain the follow- 23 ing information: 24 (a) A statement of actual monthly and year-to-date revenue 25 collections foreach operating fund;the general fund/general 26 purpose revenues, school aid fund revenues, and the tax 27 collections dedicated to the transportation funds; including a 01245'99 47 1 comparison with prior year amounts, statutory estimates, and the 2 most recent estimates from the executive branch. 3 (b) A statement of estimated year-end appropriations lapses 4 and overexpenditures for the state general fund by principal 5 department. 6 (c) A statement projecting the ending state general fund 7balanceAND STATE SCHOOL AID FUND BALANCES for the fiscal year 8 in progress. 9 (d) A summary of current economic events relevant to the 10 Michigan economy, and a discussion of any economic forecast or 11 current knowledge of revenue collections or expenditure patterns 12 that is the basis for a change in any revenue estimate or expen- 13 diture projection. 14 (e) A statement of estimated and actual total state revenues 15 compared to the revenue limit provided for in section 26 of arti- 16 cle IX of the state constitution of 1963. 17 (f) A statement of the estimated fiscal year-end balance of 18 state payments to units of local government pursuant to 19 section 30 of article IX of the state constitution of 1963. 20 (g) Any other information considered necessary by the state 21 budget director or jointly requested by the chairpersons of the 22 appropriations committees. 23 (H) A STATEMENT OF YEAR-TO-DATE BALANCES FOR THE FOLLOWING 24 FUNDS: 25 (i) THE COUNTERCYCLICAL BUDGET AND ECONOMIC STABILIZATION 26 FUND OR ITS SUCCESSOR. 01245'99 48 1 (ii) THE RENAISSANCE FUND OR ITS SUCCESSOR. 2 (iii) THE NATURAL RESOURCES TRUST FUND OR ITS SUCCESSOR. 3 Sec. 393. (1) Administrative transfers of appropriations 4 within any department to adjust for current cost and price varia- 5 tions from the enacted budget items, or to adjust amounts between 6 federal sources of financing FOR A SPECIFIC APPROPRIATION LINE 7 ITEM, OR TO ADJUST AMOUNTS BETWEEN RESTRICTED SOURCES OF FINANC- 8 ING FOR A SPECIFIC APPROPRIATION LINE ITEM, OR TO PAY COURT JUDG- 9 MENTS, INCLUDING COURT APPROVED CONSENT JUDGMENTS, OR TO PAY ALL 10 SETTLEMENTS AND CLAIMS may be made by the state budget director 11 not less than 30 days after notifying the senate and house appro- 12 priations committees. Administrative transfers shall not include 13 adjustments that have policy implications or that have the effect 14 of creating, expanding, or reducing programs within that 15 department. Those transfers may be disapproved by either appro- 16 priations committee within the 30 days and, if disapproved within 17 that time, shall not be effective. 18 (2) A transfer of appropriations within any departmentfor19reasons other than cost and price variances from those appropria-20tions as enacted into law shall not be made by the state budget21director unless approved by both appropriations committees. If22the budget director does not approve transfers adopted by both23appropriations committees under this subsection, the budget24director shall notify the appropriations committees of his or her25action within 15 days.OTHER THAN AN ADMINISTRATIVE TRANSFER 26 PURSUANT TO SUBSECTION (1) SHALL NOT BE MADE BY THE STATE BUDGET 27 DIRECTOR UNLESS APPROVED BY BOTH THE SENATE AND HOUSE 01245'99 49 1 APPROPRIATIONS COMMITTEES. IF THE STATE BUDGET DIRECTOR DOES NOT 2 APPROVE TRANSFERS ADOPTED BY BOTH THE SENATE AND HOUSE APPROPRIA- 3 TIONS COMMITTEES UNDER THIS SUBSECTION, THE STATE BUDGET DIRECTOR 4 SHALL NOTIFY BOTH THE SENATE AND HOUSE APPROPRIATIONS COMMITTEES 5 OF HIS OR HER ACTION WITHIN 15 DAYS AFTER THE SENATE AND HOUSE 6 APPROPRIATIONS COMMITTEES' FINAL APPROVAL. 7 (3) A transfer approved by the appropriations committees 8 shall not be effective unless it is identical in terms of funding 9 sources and dollar amounts. 10 (4) A transfer approved pursuant to this section shall con- 11 stitute authorization to transfer the amount recommended and 12 approved. However, the amount shall be reduced by the state 13 budget director to be within the current unobligated amount of 14 the appropriation. 15 (5)A transfer approved by law shall not subsequently be16withdrawn or reversed in whole or in part.CAPITAL OUTLAY APPRO- 17 PRIATIONS MAY BE TRANSFERRED FROM A STATE AGENCY, COMMUNITY COL- 18 LEGE, OR INSTITUTION OF HIGHER EDUCATION TO PROVIDE NECESSARY 19 FUNDS FOR THE COMPLETION OF AN AUTHORIZED CAPITAL OUTLAY PROJECT, 20 IF THE TRANSFER IS APPROVED BY JCOS AND THE APPROPRIATIONS 21 COMMITTEES. OPERATING APPROPRIATIONS SHALL NOT BE TRANSFERRED 22 INTO AN EXISTING CAPITAL OUTLAY ACCOUNT. 23 (6)Transfers between capital outlay appropriations24accounts shall not be made except as provided in section 247.25 TRANSFERS SHALL NOT BE AUTHORIZED UNDER ANY OF THE FOLLOWING 26 CIRCUMSTANCES: 01245'99 50 1 (A) TO CREATE A NEW LINE-ITEM APPROPRIATION OR TO CREATE A 2 NEW STATE PROGRAM. 3 (B) TO OR FROM AN OPERATING APPROPRIATION LINE-ITEM THAT DID 4 NOT APPEAR IN THE FISCAL YEAR APPROPRIATION BILLS FOR WHICH THE 5 TRANSFER IS BEING MADE. 6 (C) TO OR FROM A WORK PROJECT AS DESIGNATED UNDER SECTION 7 451. 8 (D) BETWEEN STATE GOVERNMENTAL FUNDS. 9(7) The state budget director may make transfers between10departments for federal and other restricted flow-through funds11when funds are appropriated in the budget of both departments.12(8) Transfers of appropriations shall not be made between13state operating funds except as provided in subsections (6) and14(7). Transfers shall not be allowed into or from an open-end15appropriation, nor shall a transfer create a new line expenditure16item appropriation.17 (7) Transfers of appropriations for financing sources shall 18 be made concurrently with related transfers of appropriations for 19 line expenditure items. 20(9) The state budget director shall not make transfers21between items appropriated except as provided in this section or22section 396(2).23 Sec. 396. (1) From the appropriations contained in a budget 24 act, a state agency shall pay or record expenditures for the 25 following: 26 (a) Court judgments, including court approved consent 27 judgments; all settlements, awards, and claims. 01245'99 51 1 (b) Writeoffs of accounts receivable recorded in a prior 2 year. 3 (2) The attorney general shall notify the senate and house 4 appropriations committees, the speaker of the house,andthe 5 senate majority leader, AND THE FISCAL AGENCIES within 14 days 6 after entering into a settlement or consent judgment which would 7 result in a state obligation that exceeds $200,000.00. The 8 notice shall include a summary of the facts of the case and the 9 reason or reasons that the settlement or consent judgment would 10 be in the best interests of the state. 11(3) Each principal department shall establish separate12accounts for recording payments made pursuant to this section.13The director may make transfers from appropriations contained in14a budget act into the accounts established pursuant to this sub-15section in such amounts as are necessary to cover the payments16made and expenditures recorded. The transfers shall be made in17the same manner as, and subject to the same requirements as those18transfers which are made pursuant to section 393(1).19 (3)(4)Before December 1 of each year, each principal 20 department shall transmit to the appropriations committees and 21 fiscal agencies a written report which includes all of the 22 following: 23 (a) The total dollar amount of final judgments and settle- 24 ments against the principal department for the most recent com- 25 pleted fiscal year. 01245'99 52 1 (b) Each source of funding and item appropriating money in a 2 budget act, which source and item is used to pay the judgments 3 and settlements pursuant to subdivision (a). 4 (c) The total dollar amount of final judgments and settle- 5 ments received in the most recent completed fiscal year pursuant 6 to legal actions by the principal department. 7 (d) Each revenue account in which money was credited pursu- 8 ant to subdivision (c). 9 (e) An estimate of the total dollar amount and a description 10 of the facts involved in each court action currently pending 11 against the department for the most recently completed fiscal 12 year. 13 Sec. 404. (1) "Revenues" means the increases in the net 14 current assets of a fund other than from expenditure refunds and 15 residual equity transfers. 16 (2) "Revolving fund" means a self-supporting fund which pro- 17 vides services or sells goods to state agencies, other governmen- 18 tal jurisdictions, or the public. 19 (3) "Unencumbered balance" means that portion of an appro- 20 priation not yet expended and encumbered. 21 (4) "Unexpended balance" means that portion of an appropria- 22 tion not yet expended. 23 (5) "Unit of local government" means unit of local govern- 24 ment as defined by section 115(6). 25(6) "Work order" means a capital outlay undertaking26incurred, including salaries and wages, contractual services,27supplies, and materials services.01245'99 53 1 (6)(7)"Work project" means a 1-time nonrecurring 2 undertaking for the purpose of accomplishing an objective con- 3 tained in specificitemLINE-ITEM appropriation for that pur- 4 pose OR ANY OTHER SPECIFIC LINE-ITEM APPROPRIATION DESIGNATED AS 5 A WORK PROJECT BY LAW UNDER CRITERIA ESTABLISHED UNDER SECTION 6 451A(1). 7 SEC. 430. WITHIN 10 WORKING DAYS AFTER FORMAL PRESENTATION 8 OF THE EXECUTIVE BUDGET, THE STATE BUDGET DIRECTOR SHALL REPORT 9 TO THE MEMBERS OF THE SENATE AND HOUSE APPROPRIATIONS COMMITTEES 10 AND THE SENATE AND HOUSE FISCAL AGENCIES ON THE AMOUNTS AND 11 SOURCES OF ALL CAPPED FEDERAL FUNDS, SPECIAL REVENUE FUNDS AS 12 DEFINED IN THE STATE OF MICHIGAN'S COMPREHENSIVE ANNUAL FINANCIAL 13 REPORT, AND THE HEALTHY MICHIGAN FUND CREATED UNDER SECTION 5953 14 OF THE PUBLIC HEALTH CODE, 1978 PA 368, MCL 333.5953, AND AN 15 ACCOUNTING OF THE STATE DEPARTMENTS OR AGENCIES IN WHICH THE 16 EXECUTIVE BUDGET PROPOSES TO SPEND THE FUNDS. 17 Sec. 434. Revenues received from rates charged or goods 18 sold and revenue which is received from any other source and des- 19 ignated to be credited to a revolving fund shall be credited to 20 that fund. Within 60 days after the fiscal year begins, the 21 director shall submit to the appropriations committees and fiscal 22 agencies a financial plan for the ensuing fiscal year. The 23 financial plan shall include the rate structure, a projected 24 statement of revenues and expenses in sufficient detail to pro- 25 vide for comparison with actual revenues and expenses, a 26 projected statement of receipts and disbursements, and any other 27 information considered necessary by the director. WITHIN 60 DAYS 01245'99 54 1 AFTER THE END OF THE FISCAL YEAR, THE DIRECTOR SHALL SUBMIT TO 2 THE LEGISLATURE, THE APPROPRIATIONS COMMITTEES, AND THE FISCAL 3 AGENCIES A REPORT ON THE STATUS OF ALL SUCH REVOLVING FUNDS, 4 INCLUDING ALL INFORMATION REPORTED IN THE FINANCIAL PLAN. 5 Sec. 443. Except as otherwise provided by law, all money 6 received by the various state agencies for whom appropriations 7 are made by a budget act shall be forwarded to the state trea- 8 surer and credited to the state general fund. THE STATE BUDGET 9 DIRECTOR MAY MAKE FEDERAL REVENUE TRANSFERS BETWEEN THE RECIPIENT 10 STATE DEPARTMENT AND THE SPENDING STATE DEPARTMENT ONLY WHEN 11 FUNDS ARE APPROPRIATED IN THE SPENDING DEPARTMENT. 12 Sec. 451. (1) At the close of the fiscal year, the unencum- 13 bered balance of each appropriation shall lapse to the state fund 14 from which it was appropriated. A document which is not ascer- 15 tainable before the cutoff date set by the director may be 16 charged against a current year's appropriation if the chief 17 accounting officer determines that the state agency was not will- 18 ful in its failure to ascertain or record the document and if the 19 amount of the payment would not have exceeded the unencumbered 20 balance of the applicable appropriation in the prior fiscal 21 year. 22 (2) An encumbrance entered into within 15 days before the 23 end of the fiscal year and outstanding at the close of the fiscal 24 year is not a charge against that fiscal year but is charged to 25 the next succeeding fiscal year. 26(3) This section does not apply to an appropriation for a27work order or a work project funded by general purpose revenues.01245'99 55 1Except as provided in section 248, a work order or work project2appropriation continues to be available until completion of the3work or 12 months after the last expenditure, whichever comes4first, then the remaining balance lapses to the state fund from5which it was appropriated. The appropriation for a work order or6work project shall specifically designate the item as a work7order or work project and shall include all of the following8information:9(a) The purpose of the order or project.10(b) The methods that will be used to accomplish the11project.12(c) The total estimated cost of the project.13(d) A tentative completion date of the project.14(4) Except as provided in section 248, unencumbered appro-15priations made for work projects and financed from restricted16revenues shall continue to be available for expenditure until the17projects are completed or until lapsed by directives issued by18the director.19(5) Not later than 45 days after the conclusion of the20fiscal year, the director shall notify the senate and house21appropriations committee of appropriations proposed to be desig-22nated as work projects in accordance with the definition con-23tained in this act, but not specifically so designated in an24appropriations act. These designations may be disapproved by25either appropriations committee within 30 days after the date of26notification and, if disapproved within that time, shall not be27effective.01245'99 56 1 SEC. 451A. (1) EXCEPT AS PROVIDED IN SECTION 248, A WORK 2 PROJECT APPROPRIATION CONTINUES TO BE AVAILABLE UNTIL COMPLETION 3 OF THE WORK OR 48 MONTHS AFTER THE CLOSE OF THE FISCAL YEAR IN 4 WHICH THE APPROPRIATION WAS ORIGINALLY MADE, WHICHEVER COMES 5 FIRST, THEN THE REMAINING BALANCE LAPSES TO THE STATE FUND FROM 6 WHICH IT WAS APPROPRIATED. FOR WORK PROJECTS ESTABLISHED BEFORE 7 THE EFFECTIVE DATE OF THE AMENDATORY ACT THAT ADDED THIS SEN- 8 TENCE, THE 48-MONTH TIME PERIOD DESCRIBED IN THIS SUBSECTION 9 BEGINS ON THE EFFECTIVE DATE OF THE AMENDATORY ACT THAT ADDED 10 THIS SENTENCE. TO BE DESIGNATED AS A WORK PROJECT, A WORK 11 PROJECT SHALL MEET ALL OF THE FOLLOWING CRITERIA: 12 (A) THE WORK PROJECT SHALL BE FOR A SPECIFIC PURPOSE. 13 (B) THE WORK PROJECT SHALL CONTAIN A SPECIFIC PLAN TO ACCOM- 14 PLISH ITS OBJECTIVE. 15 (C) THE WORK PROJECT SHALL HAVE AN ESTIMATED COMPLETION 16 COST. 17 (D) THE WORK PROJECT SHALL HAVE AN ESTIMATED COMPLETION 18 DATE. 19 (2) THE DIRECTOR HAS THE AUTHORITY TO ISSUE DIRECTIVES TO 20 LAPSE EXISTING WORK PROJECT ACCOUNTS AT ANY TIME. THE DIRECTOR 21 SHALL NOTIFY THE SENATE AND HOUSE APPROPRIATIONS COMMITTEES AND 22 THE FISCAL AGENCIES OF WORK PROJECTS THAT THE DIRECTOR HAS 23 ORDERED TO LAPSE. THESE DIRECTIVES MAY BE DISAPPROVED BY EITHER 24 THE SENATE OR HOUSE APPROPRIATIONS COMMITTEE WITHIN 30 DAYS AFTER 25 THE DATE OF NOTIFICATION AND, IF DISAPPROVED WITHIN THAT TIME, 26 SHALL NOT BE EFFECTIVE. 01245'99 57 1 (3) NOT LATER THAN 45 DAYS AFTER THE CONCLUSION OF THE 2 FISCAL YEAR, THE DIRECTOR SHALL NOTIFY THE SENATE AND HOUSE 3 APPROPRIATIONS COMMITTEES AND THE FISCAL AGENCIES OF APPROPRIA- 4 TIONS PROPOSED TO BE DESIGNATED AS WORK PROJECTS IN ACCORDANCE 5 WITH THE DEFINITION CONTAINED IN THIS ACT. THESE DESIGNATIONS 6 MAY BE DISAPPROVED BY EITHER APPROPRIATIONS COMMITTEE WITHIN 30 7 DAYS AFTER THE DATE OF NOTIFICATION AND, IF DISAPPROVED WITHIN 8 THAT TIME, SHALL NOT BE EFFECTIVE. THE NOTIFICATION SHALL 9 INCLUDE AN ESTIMATE OF THE DOLLAR AMOUNT OF THE FUNDS TO BE DES- 10 IGNATED AS WORK PROJECTS AND A DESCRIPTION OF ALL WORK PROJECTS 11 DESIGNATED IN AN APPROPRIATIONS ACT. 12 (4) NOT LATER THAN 120 DAYS AFTER THE CONCLUSION OF THE 13 FISCAL YEAR, THE DIRECTOR SHALL PREPARE AND DELIVER TO THE SENATE 14 AND HOUSE APPROPRIATIONS COMMITTEES AND THE FISCAL AGENCIES A 15 REPORT THAT SUMMARIZES CURRENT WORK PROJECT ACCOUNTS. THIS 16 REPORT SHALL CONTAIN A LISTING OF ALL WORK PROJECT ACCOUNTS, THE 17 BALANCE IN EACH ACCOUNT, THE AMOUNT OF FUNDS THAT LAPSED FROM ANY 18 PREVIOUSLY DESIGNATED WORK PROJECTS, AND THE FUNDS THAT RECEIVED 19 THESE LAPSES. 20 Sec. 454. (1) Each budget act shall appropriate full-time 21 equated positions based on 2,088 hours for 1.0 FTE position. 22 (2) Before thethirtieth of each monthEND OF EACH 23 QUARTER, the department of civil service shall provide a report 24 to the department, the appropriations committees, and the fiscal 25 agencies regarding the status of FTE positions for the preceding 26monthQUARTER. ThemonthlyQUARTERLY report shall include, 27 but shall not be limited to, the following information: 01245'99 58 1 (a) The number of FTE positions, by department, on the last 2 payroll for the precedingmonthQUARTER. 3 (b) The increase or decrease in FTE positions, by depart- 4 ment, compared to the lastmonthlyQUARTERLY report. 5 (c) The difference between the appropriated FTE positions, 6 and the actual number of FTE positions, by department, for that 7monthQUARTER. 8 (d) Summary totals for the information listed in subdivi- 9 sions (a), (b), and (c). 10 (3) The department of civil service shall provide a report 11 to the appropriations committees and the fiscal agencies by 12 December 1 of each year, which shall include a fiscal year sum- 13 mary of the information required in subsection (2) for the most 14 recently completed fiscal year. 15 Sec. 461. (1) As required by federal law, all federal 16 grants awarded to the state shall be audited by the auditor gen- 17 eral, an independent accounting firm selected by the auditor gen- 18 eral, or an auditor approved by the appropriate federal agency. 19 The funding for each audit shall be from the respective federal 20 grants audited. 21 (2) Each audit performed pursuant to Public Law98-50222 104-156 shall be conducted by an independent auditor in accord- 23 ance with generally accepted government auditing standards. 24 Single audits for this state shall be conducted in accordance 25 with Public Law98-502104-156 by the auditor general, an inde- 26 pendent accounting firm selected by the auditor general, or an 27 independent auditor approved by the appropriate federal agency. 01245'99 59 1 For fiscal years beginning October 1, 1985 and thereafter, 2 biennial audits of state departments and agencies shall be per- 3 formed for purposes of complying with the requirements of Public 4 Law98-502104-156 pertaining to audit evaluation of the inter- 5 nal controls of this state and the state's compliance with mate- 6 rial features of laws and regulations related to major federal 7 assistance programs. 8 (3) The funding for single audits shall be from the respec- 9 tive federal grants audited, in accordance with Public Law 1098-502104-156. The chief executive officer of each principal 11 department shall ensure that sufficient amounts are encumbered 12 from the appropriate federal grants to finance the cost of the 13 audits. Any unexpended amounts of encumbered funds may be car- 14 ried over into succeeding years to cover the cost of the single 15 audits. 16 (4) BeforeMarch 1NOVEMBER 30 of each year, the director 17 of each principal department shall submit to the director, fiscal 18 agencies and the auditor general a schedule of federal financial 19 assistance for the last completed fiscal year in a form approved 20 by the auditor general. 21 (5) As used in this section, "Public Law98-502104-156" 22 meansthe single audit act of 1984CHAPTER 75 OF TITLE 31 OF 23 THE UNITED STATES CODE, 31 U.S.C. 7501 to 7507. 24 Sec. 462. Within 60 days after the final audit is released, 25 the principal executive officer of a state agency which is 26 audited shall submit a plan to comply with the audit 27 recommendations to the department. The plan shall be prepared in 01245'99 60 1 accordance with procedures prescribed by the principal 2 department. Copies of the plan shall be distributed in accord- 3 ance with the administrativemanualGUIDE TO STATE GOVERNMENT. 4 COPIES SHALL ALSO BE DISTRIBUTED TO RELEVANT HOUSE AND SENATE 5 APPROPRIATIONS SUBCOMMITTEES, RELEVANT HOUSE AND SENATE STANDING 6 COMMITTEES, FISCAL AGENCIES, AND THE EXECUTIVE OFFICE. 7 Sec. 484. (1)Not later than April 1, 1987, theTHE 8 director, in consultation with the auditor general, shall develop 9 a system of reporting and a general framework which shall be used 10 by the principal departments in performing evaluations on their 11 respective internal accounting and administrative control 12 systems. 13 (2) The director, in consultation with the auditor general, 14 may modify the format for the report or the framework for con- 15 ducting the evaluations after giving 30 days' notice to each 16 principal department head and the senate and house appropriations 17 committees. 18 Sec. 485. (1)Not later than October 1, 1987, theTHE 19 department head of each principal department shall establish and 20 maintain an internal accounting and administrative control system 21 within that principal department using the generally accepted 22 accounting principles as developed by the accounting profession 23 and in conformance with directives issued pursuant to section 24 141(d). 25 (2) Each internal accounting and administrative control 26 system shall include, but not be limited to, all of the following 27 elements: 01245'99 61 1 (a) A plan of organization that provides separation of 2 duties and responsibilities among employees. 3 (b) A plan that limits access to that principal department's 4 resources to authorized personnel whose use is required within 5 the scope of their assigned duties. 6 (c) A system of authorization and record-keeping procedures 7 to control assets, liabilities, revenues, and expenditures. 8 (d) A system of practices to be followed in the performance 9 of duties and functions in each principal department. 10 (e) Qualified personnel that maintain a level of 11 competence. 12 (f) Internal control techniques that are effective and 13 efficient. 14 (3) Each head of a principal department shall document the 15 system, communicate system requirements to employees of that 16 principal department, assure that the system is functioning as 17 prescribed, and modify as appropriate for changes in condition of 18 the system. 19(4) Not later than October 1, 1987, the head of each prin-20cipal department shall issue a report to the governor, the audi-21tor general, the senate and house appropriations committees, and22the director describing the current internal accounting and23administrative control systems of the principal department, the24organization and size of the internal audit staffs, and the25manner in which the internal auditor will be utilized by the26department head. Not later than March 1, 1988, the auditor27general shall evaluate and report to the legislature on each01245'99 62 1principal department's report prepared pursuant to this2subsection.3 (4)(5) Beginning March 1, 1989, and biennially thereafter,4theTHE head of each principal department shall provide a 5 BIENNIAL report ON OR BEFORE MAY 1 OF EACH ODD NUMBERED YEAR pre- 6 pared by the principal department's internal auditor on the eval- 7 uation of the principal department's internal accounting and 8 administrative control system to the governor, the auditor gener- 9 al, the senate and house appropriations committees, THE FISCAL 10 AGENCIES, and the director. For the period reviewed, the report 11 shall include, but not be limited to, both of the following: 12 (a) A description of any material inadequacy or weakness 13 discovered in connection with the evaluation of the department's 14 internal accounting and administrative control system as of 15 October 1 of the preceding year and the plans and a time schedule 16 for correcting the internal accounting and administrative control 17 system, described in detail. 18 (b) A listing of each audit or investigation performed by 19 the internal auditor pursuant to sections 486(4) and 487. 20 Sec. 486. (1)Not later than October 1, 1987, eachEACH 21 principal department shall appoint an internal auditor. Each 22 internal auditor shall be a member of the state classified execu- 23 tive service. 24 (2) Except as otherwise provided by law, each internal audi- 25 tor shall report to and be under the general supervision of the 26 department head. 01245'99 63 1 (3) A person may not prevent or prohibit the internal 2 auditor from initiating, carrying out, or completing any audit or 3 investigation. The internal auditor shall be protected pursuant 4 to the whistleblowers' protection act,Act No. 469 of the Public5Acts of 1980, being sections 15.361 to 15.369 of the Michigan6Compiled Laws1980 PA 469, MCL 15.361 TO 15.369. 7 (4) The internal auditor of each principal department 8 shall: 9 (a) Receive and investigate any allegations that false or 10 misleading information was received in evaluating the principal 11 department's internal accounting and administrative control 12 system or in connection with the preparation of the biennial 13 report on the system. 14 (b) Conduct and supervise audits relating to financial 15 activities of the principal department's operations. 16 (c) Review existing activities and recommend policies 17 designed to promote efficiency in the administration of that 18 principal department's programs and operations as assigned by the 19 department head. 20 (d) Recommend policies for activities to protect the state's 21 assets under the control of that principal department, and to 22 prevent and detect fraud and abuse in the principal department's 23 programs and operations. 24 (e) Review and recommend activities designed to ensure that 25 principal department's internal financial control and accounting 26 policies are in conformance with the department of management and 01245'99 64 1 budget accounting division directives issued pursuant to sections 2 421 and 444. 3 (f) Provide a means to keep the department head fully and 4 currently informed about problems and deficiencies relating to 5 the administration of that principal department's programs and 6 operations and the necessity for and progress of corrective 7 action. 8 (g) Conduct other audit and investigative activities as 9 assigned by the department head. 10 (5) Each internal auditor shall adhere to appropriate pro- 11 fessional and auditing standards in carrying out any financial or 12 program audits or investigations. 13 Sec. 492.Effective with the fiscal year ending14September 30, 1983, theTHE financial statements of all state 15 agencies, as defined by generally accepted accounting principles 16 as falling within the reporting responsibility of the state, 17 shall be included in the comprehensive annual financial report of 18 the state. The director shall designate and notify each state 19 agency of this responsibility as well as describe the statement 20 format that shall be followed by each agency so notified. The 21 statements provided shall be followed by each state agency so 22 notified. The statements provided shall be audited as provided 23 by law or by the auditor general or independent auditors selected 24 by the auditor general before submission to the department of 25 management and budget and shall be submitted not later than 90 26 days following the close of the state's fiscal year. 01245'99 65 1 Sec. 493. The director shall submit preliminary, unaudited 2 financial statements including notes of the general fund and the 3 state school aid fund to the legislature AND THE FISCAL AGENCIES 4 within 120 days after the end of the fiscal year. 5 Enacting section 1. Sections 206, 207, 223, 225, 238, 239, 6 243, 247, 271, 282, 353a, 353b, 353d, 354a, 362, 362a, 382, 456, 7 and 488 of the management and budget act, 1984 PA 431, 8 MCL 18.1206, 18.1207, 18.1223, 18.1225, 18.1238, 18.1239, 9 18.1243, 18.1247, 18.1271, 18.1282, 18.1353a, 18.1353b, 18.1353d, 10 18.1354a, 18.1362, 18.1362a, 18.1382, 18.1456, and 18.1488, are 11 repealed. 01245'99 Final page. JLB