HB-4853, As Passed House, December 14, 2005
June 1, 2005, Introduced by Reps. Byrnes, Kooiman, David Law, Acciavatti, Stewart, Accavitti, Farrah, Clemente, Polidori, Mayes, Gillard, Gleason, Anderson, Plakas, Kathleen Law, Gonzales, Leland, Condino, Brown, Gaffney, Wenke, Stakoe, Dillon and Green and referred to the Committee on Transportation.
A bill to amend 1951 PA 51, entitled
"An act to provide for the classification of all public roads,
streets, and highways in this state, and for the revision of that
classification and for additions to and deletions from each
classification; to set up and establish the Michigan
transportation fund; to provide for the deposits in the Michigan
transportation fund of specific taxes on motor vehicles and motor
vehicle fuels; to provide for the allocation of funds from the
Michigan transportation fund and the use and administration of
the fund for transportation purposes; to set up and establish the
truck safety fund; to provide for the allocation of funds from
the truck safety fund and administration of the fund for truck
safety purposes; to set up and establish the Michigan truck
safety commission; to establish certain standards for road
contracts for certain businesses; to provide for the continuing
review of transportation needs within the state; to authorize the
state transportation commission, counties, cities, and villages
to borrow money, issue bonds, and make pledges of funds for
transportation purposes; to authorize counties to advance funds
for the payment of deficiencies necessary for the payment of
bonds issued under this act; to provide for the limitations,
payment, retirement, and security of the bonds and pledges; to
provide for appropriations and tax levies by counties and
townships for county roads; to authorize contributions by
townships for county roads; to provide for the establishment and
administration of the state trunk line fund, local bridge fund,
comprehensive transportation fund, and certain other funds; to
provide for the deposits in the state trunk line fund, critical
bridge fund, comprehensive transportation fund, and certain other
funds of money raised by specific taxes and fees; to provide for
definitions of public transportation functions and criteria; to
define the purposes for which Michigan transportation funds may
be allocated; to provide for Michigan transportation fund grants;
to provide for review and approval of transportation programs; to
provide for submission of annual legislative requests and
reports; to provide for the establishment and functions of
certain advisory entities; to provide for conditions for grants;
to provide for the issuance of bonds and notes for transportation
purposes; to provide for the powers and duties of certain state
and local agencies and officials; to provide for the making of
loans for transportation purposes by the state transportation
department and for the receipt and repayment by local units and
agencies of those loans from certain specified sources; and to
repeal acts and parts of acts,"
by amending section 13 (MCL 247.663), as amended by 2004 PA 9.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 13. (1) The amount distributed to cities and villages
2 shall be returned to the treasurers of the cities and villages in
3 the manner, for the purposes, and under the terms and conditions
4 specified in this section. As used in this section, "population"
5 means the population according to the most recent statewide
6 federal census as certified at the beginning of the state fiscal
7 year, except that, if a municipality has been newly incorporated
8 since completion of the census, the population of the
9 municipality for purposes of the distribution of funds before
10 completion of the next census shall be the population as
11 determined by special federal census, if there is a special
12 federal census, and if not, by the population as determined by
13 the official census in connection with the incorporation, if
14 there is such a census and, if not, by a special state census to
1 be taken at the expense of the municipality by the secretary of
2 state pursuant to section 6 of the home rule city act, 1909 PA
3 279, MCL 117.6. The amount received by the newly incorporated
4 municipality shall be in place of any other direct distribution
5 of funds from the Michigan transportation fund. The population of
6 the newly incorporated municipality as determined under this
7 section shall be added to the total population of all
8 incorporated cities and villages in the state in computing the
9 amounts to be returned under this section to each municipality in
10 the state. Major street mileage, local street mileage, and
11 equivalent major mileage, if applicable, shall be determined by
12 the state transportation department before the next month for
13 which distribution is made following the effective date of
14 incorporation of a newly incorporated municipality.
15 (2) From the amount available for distribution to cities and
16 villages during each December, an amount equal to 0.7% of the
17 total amount returned to all cities and villages under
18 subsections (3) and (4) during the previous calendar year shall
19 be withheld. The amount withheld shall be used to partially
20 reimburse those cities and villages located in those counties
21 that are eligible for snow removal funds pursuant to section 12a
22 and that have costs for winter maintenance on major and local
23 streets that are greater than the statewide average. The
24 distributions shall be made annually during February and shall be
25 calculated separately for the major and local street systems but
26 may be paid in a combined warrant. The distribution to a city or
27 village shall be equal to 1/2 of its winter maintenance
1 expenditures after deducting the product of its total earnings
2 under subsections (3) and (4) multiplied by 2 times the average
3 municipal winter maintenance factor. Winter maintenance
4 expenditures shall be determined from the street financial
5 reports for the most current fiscal years ending before July 1. A
6 city or village that does not submit a street financial report
7 for the fiscal year ending before July 1 by the subsequent
8 December 31 shall be ineligible for the winter maintenance
9 payment that is to be based on that street financial report. The
10 average municipal winter maintenance factor shall be determined
11 annually by the state transportation department by dividing the
12 total expenditures of all cities and villages on winter
13 maintenance of streets and highways by the total amount earned by
14 all cities and villages under subsections (3) and (4) during the
15 12 months. If the sum of the distributions to be made under this
16 subsection exceeds the amount withheld, the distributions to each
17 eligible city and village shall be reduced proportionately. If
18 the sum is less than the amount withheld, the balance shall be
19 added to the amount available for distribution under subsections
20 (3) and (4) during the next month. The distributions shall be for
21 use on the major and local street systems respectively and shall
22 be subject to the same provisions as funds returned under
23 subsections (3) and (4).
24 (3) Seventy-five percent of the remaining amount to be
25 returned to the cities and villages, after deducting the amounts
26 withheld pursuant to subsection (2), shall be returned 60% in the
27 same proportion that the population of each bears to the total
1 population of all cities and villages, and 40% in the same
2 proportion that the equivalent major mileage in each bears to the
3 total equivalent major mileage in all cities and villages. As
4 used in this section, "equivalent major mileage" means the sum of
5 2 times the state trunk line mileage certified by the state
6 transportation department as of March 31 of each year, as being
7 within the boundaries of each city and village having a
8 population of 25,000 or more, plus the major street mileage in
9 each city and village, multiplied by the following factor:
10 1.0 for cities and villages of 2,000 or less population;
11 1.1 for cities and villages from 2,001 to 10,000 population;
12 1.2 for cities and villages from 10,001 to 20,000 population;
13 1.3 for cities and villages from 20,001 to 30,000 population;
14 1.4 for cities and villages from 30,001 to 40,000 population;
15 1.5 for cities and villages from 40,001 to 50,000 population;
16 1.6 for cities and villages from 50,001 to 65,000 population;
17 1.7 for cities and villages from 65,001 to 80,000 population;
18 1.8 for cities and villages from 80,001 to 95,000 population;
19 1.9 for cities and villages from 95,001 to 160,000
20 population;
21 2.0 for cities and villages from 160,001 to 320,000
22 population;
23 and for cities over 320,000 population, by a factor of 2.1
24 increased successively by 0.1 for each 160,000 population
25 increment over 320,000. The amount returned under this subsection
26 shall be used by each city and village for the following purposes
27 in the following order of priority:
1 (a) For the payment of contributions required to be made by
2 a city or village under the provisions of contracts previously
3 entered into under 1941 PA 205, MCL 252.51 to 252.64, which
4 contributions have been previously pledged for the payment of the
5 principal and interest on bonds issued under that act; or for the
6 payment of the principal and interest upon bonds issued by a city
7 or village pursuant to 1952 PA 175, MCL 247.701 to 247.707.
8 (b) Payment of obligations of the city or village on highway
9 projects undertaken by the city or village jointly with the state
10 transportation department.
11 (c) For the payment of principal and interest upon loans
12 received pursuant to section 11(7), to the extent other funds
13 have not been made available for that payment.
14 (d) For the preservation, construction, acquisition, and
15 extension of the major street system as defined by this act
16 including the acquisition of a necessary right of way for the
17 system, work incidental to the system, and an appurtenant
18 roadside park or motor parkway, of the city or village and for
19 the payment of the principal and interest on that portion of the
20 city's or village's general obligation bonds which are
21 attributable to the construction or reconstruction of the city's
22 or village's major street system. Not more than 5% per year of
23 the funds returned to a city or village by this subsection shall
24 be expended for the preservation or acquisition of appurtenant
25 roadside parks and motor parkways. Surplus funds may be expended
26 for the development, construction, or repair of off-street
27 parking facilities, and the construction or repair of street
1 lighting, and transfer to the local street system under
2 subsection (6).
3 (4) The remaining amount to be returned to incorporated
4 cities and villages shall be expended in each city or village for
5 the preservation, construction, acquisition, and extension of the
6 local street system of the city or village, as defined by this
7 act, including the acquisition of a necessary right of way for
8 the system, work incidental to the system, and subject to
9 subsection (5), for the payment of the principal and interest on
10 that portion of the city's or village's general obligation bonds
11 which are attributable to the construction or reconstruction of
12 the city's or village's local street system. The amount returned
13 under this subsection shall be returned to the cities and
14 villages 60% in the same proportion that the population of each
15 bears to the total population of all incorporated cities and
16 villages in the state, and 40% in the same proportion that the
17 total mileage of the local street system of each bears to the
18 total mileage in the local street systems of all cities and
19 villages of the state. The payment of the principal and interest
20 upon bonds issued by a city or village pursuant to 1952 PA 175,
21 MCL 247.701 to 247.707, and after that payment, the payment of
22 debt service on loans received under section 11(7), shall have
23 priority in the expenditure of money returned under this
24 subsection.
25 (5) Money distributed to each city and village for the
26 maintenance and preservation of its local street system under
27 this act represents the total responsibility of the state for
1 local street system support. Funds distributed from the Michigan
2 transportation fund shall not be expended for construction
3 purposes on city and village local streets except to the extent
4 matched from local revenues including other money returned to a
5 city or village by the state under the state constitution of 1963
6 and statutes of the state, from funds that can be raised by
7 taxation in cities and villages for street purposes within the
8 limitations of the state constitution of 1963 and statutes of the
9 state, from special assessments, or from any other source. This
10 subsection does not apply to section 11b.
11 (6) Except as provided in
subsection (12) subsections (7)
12 and (13), money returned under this section to a city or village
13 shall be expended on the major and local street systems of that
14 city or village. However, the first priority shall be the major
15 street system. Money returned for expenditure on the major street
16 system shall be expended in the priority order provided in
17 subsection (3) except that surplus funds may be transferred for
18 preservation of the local street system. Major street funds
19 transferred for use on the local street system shall not be used
20 for construction but may be used for preservation as defined in
21 section 10c. A city or village shall not transfer more than 25%
22 of its annual major street funding for the local street system
23 unless it has adopted and is following an asset management
24 process for its major and local street systems and adopts a
25 resolution with a copy to the department setting forth all of the
26 following:
27 (a) A list of the major streets in that city or village.
1 (b) A statement that the city or village is adequately
2 maintaining its major streets.
3 (c) The dollar amount of the transfer.
4 (d) The local streets to be funded with the transfer.
5 (e) A statement that the city or village is following an
6 asset management process for its major and local street systems.
7 (7) Except as required under subsection (13), if a city or
8 village has adopted and is following an asset management plan
9 under section 9a that includes the additional information
10 required in subdivisions (a) through (d), the city or village may
11 create a single road fund for major and local streets and expend
12 money according to the asset management plan. The asset
13 management plan shall set forth all of the following:
14 (a) A list of the major streets in the city or village.
15 (b) A statement that the city or village is adequately
16 maintaining its major streets.
17 (c) The dollar amount proposed to be expended on local
18 streets.
19 (d) A statement that the asset management process is being
20 followed for major and local streets of the city or village.
21 (8) (7) Not more than 10% per year of all of the funds
22 returned to a city or village from any source for the purposes of
23 this section may be expended for administrative expenses. As used
24 in this subsection, "administrative expenses" means those
25 expenses that are not assigned including, but not limited to,
26 specific road construction or maintenance projects and are often
27 referred to as general or supportive services. Administrative
1 expenses shall not include net equipment expense, net capital
2 outlay, debt service principal and interest, and payments to
3 other state or local offices that are assigned, but not limited
4 to, specific road construction projects or maintenance
5 activities. A city or village which in a year expends more than
6 10% for administrative expenses shall be subject to section
7 14(5).
8 (9) (8) In each city and village to which funds are
9 returned under this section, the responsibility for street
10 preservation and the development, construction, or repair of off-
11 street parking facilities and construction or repair of street
12 lighting shall be coordinated by a single administrator to be
13 designated by the governing body who shall be responsible for and
14 shall represent the municipality in transactions with the state
15 transportation department pursuant to this act.
16 (10) (9) Cities Notwithstanding subsections (6) and (7),
17 cities and villages may provide for consolidated street
18 administration. A city or a village may enter into an agreement
19 with other cities or villages, the county road commission, or
20 with the state transportation commission for the performance of
21 street or highway work on a road or street within the limits of
22 the city or village or adjacent to the city or village. The
23 agreement may provide for the performance by any of the
24 contracting parties of the work contemplated by the contracts
25 including services and acquisition of rights of way, by purchase
26 or condemnation by any of the contracting parties in its own
27 name. The agreement may provide for joint participation in the
1 costs if appropriate.
2 (11) (10) Interest earned on funds returned to a city or a
3 village for purposes provided in this section shall be credited
4 to the appropriate street fund.
5 (12) (11) In addition to the financial compliance audits
6 required by law, the department of treasury shall conduct
7 performance audits and make investigations of the disposition of
8 all state funds received by cities and villages for
9 transportation purposes to determine compliance with the terms
10 and conditions of this act. Performance audits shall be conducted
11 according to government auditing standards issued by the United
12 States general accounting office. The department of treasury
13 shall provide notice to cities and villages of the standards to
14 be used for audits under this subsection prior to the fiscal year
15 in which the audit is conducted. The department shall notify
16 cities and villages of any subsequent changes to the standards.
17 Cities and villages shall make available to the department of
18 treasury the pertinent records for the audit.
19 (13) (12) Effective Unless a city or village has adopted
20 an asset management plan under subsection (7), effective January
21 1, 2009, money returned to a city or village for expenditure on
22 the major street system may not be transferred or expended for
23 use on the local street system except to the extent matched by
24 local revenues expended by the city or village on the major
25 street system or state trunk line highways. For purposes of this
26 subsection, local revenue means revenue other than Michigan
27 transportation fund revenue and includes, but is not limited to,
1 general fund revenue and special assessments.
2 (14) (13) On or before October 1, 2008, the department
3 shall prepare a report listing by city and village, and in total,
4 the following information:
5 (a) Amounts transferred between major street fund and local
6 street fund.
7 (b) Amounts of local revenue as defined in subsection (12)
8 (13) expended on the major street system. The report shall
9 include fiscal years from January 1, 2002 through June 30, 2008.
10 The report shall analyze the extent to which the amendatory act
11 that added this subsection affected city and village transfers
12 from major street funds to local street funds, and the amount of
13 local revenue expended on city or village major streets and state
14 trunk lines. The report shall be submitted to the house and
15 senate appropriations committees and to the house and senate
16 fiscal agencies.