SB-1182, As Passed Senate, May 2, 2006
March 21, 2006, Introduced by Senators GILBERT, BASHAM, HARDIMAN, ALLEN, GOSCHKA and TOY 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:
Sec. 13. (1) The amount distributed to cities and villages
shall be returned to the treasurers of the cities and villages in
the manner, for the purposes, and under the terms and conditions
specified in this section. As used in this section, "population"
means the population according to the most recent statewide federal
census as certified at the beginning of the state fiscal year,
except that, if a municipality has been newly incorporated since
completion of the census, the population of the municipality for
purposes of the distribution of funds before completion of the next
census shall be the population as determined by special federal
census, if there is a special federal census, and if not, by the
population as determined by the official census in connection with
the incorporation, if there is such a census and, if not, by a
special state census to be taken at the expense of the municipality
by the secretary of state pursuant to section 6 of the home rule
city act, 1909 PA 279, MCL 117.6. The amount received by the newly
incorporated municipality shall be in place of any other direct
distribution of funds from the Michigan transportation fund. The
population of the newly incorporated municipality as determined
under this section shall be added to the total population of all
incorporated cities and villages in the state in computing the
amounts to be returned under this section to each municipality in
the state. Major street mileage, local street mileage, and
equivalent major mileage, if applicable, shall be determined by the
state transportation department before the next month for which
distribution is made following the effective date of incorporation
of a newly incorporated municipality.
(2) From the amount available for distribution to cities and
villages during each December, an amount equal to 0.7% of the total
amount returned to all cities and villages under subsections (3)
and (4) during the previous calendar year shall be withheld. The
amount withheld shall be used to partially reimburse those cities
and villages located in those counties that are eligible for snow
removal funds pursuant to section 12a and that have costs for
winter maintenance on major and local streets that are greater than
the statewide average. The distributions shall be made annually
during February and shall be calculated separately for the major
and local street systems but may be paid in a combined warrant. The
distribution to a city or village shall be equal to 1/2 of its
winter maintenance expenditures after deducting the product of its
total earnings under subsections (3) and (4) multiplied by 2 times
the average municipal winter maintenance factor. Winter maintenance
expenditures shall be determined from the street financial reports
for the most current fiscal years ending before July 1. A city or
village that does not submit a street financial report for the
fiscal year ending before July 1 by the subsequent December 31
shall be ineligible for the winter maintenance payment that is to
be based on that street financial report. The average municipal
winter maintenance factor shall be determined annually by the state
transportation department by dividing the total expenditures of all
cities and villages on winter maintenance of streets and highways
by the total amount earned by all cities and villages under
subsections (3) and (4) during the 12 months. If the sum of the
distributions to be made under this subsection exceeds the amount
withheld, the distributions to each eligible city and village shall
be reduced proportionately. If the sum is less than the amount
withheld, the balance shall be added to the amount available for
distribution under subsections (3) and (4) during the next month.
The distributions shall be for use on the major and local street
systems respectively and shall be subject to the same provisions as
funds returned under subsections (3) and (4).
(3) Seventy-five percent of the remaining amount to be
returned to the cities and villages, after deducting the amounts
withheld pursuant to subsection (2), shall be returned 60% in the
same proportion that the population of each bears to the total
population of all cities and villages, and 40% in the same
proportion that the equivalent major mileage in each bears to the
total equivalent major mileage in all cities and villages. As used
in this section, "equivalent major mileage" means the sum of 2
times the state trunk line mileage certified by the state
transportation department as of March 31 of each year, as being
within the boundaries of each city and village having a population
of 25,000 or more, plus the major street mileage in each city and
village, multiplied by the following factor:
1.0 for cities and villages of 2,000 or less population;
1.1 for cities and villages from 2,001 to 10,000 population;
1.2 for cities and villages from 10,001 to 20,000 population;
1.3 for cities and villages from 20,001 to 30,000 population;
1.4 for cities and villages from 30,001 to 40,000 population;
1.5 for cities and villages from 40,001 to 50,000 population;
1.6 for cities and villages from 50,001 to 65,000 population;
1.7 for cities and villages from 65,001 to 80,000 population;
1.8 for cities and villages from 80,001 to 95,000 population;
1.9 for cities and villages from 95,001 to 160,000 population;
2.0 for cities and villages from 160,001 to 320,000
population;
and for cities over 320,000 population, by a factor of 2.1
increased successively by 0.1 for each 160,000 population increment
over 320,000. The amount returned under this subsection shall be
used by each city and village for the following purposes in the
following order of priority:
(a) For the payment of contributions required to be made by a
city or village under the provisions of contracts previously
entered into under 1941 PA 205, MCL 252.51 to 252.64, which
contributions have been previously pledged for the payment of the
principal and interest on bonds issued under that act; or for the
payment of the principal and interest upon bonds issued by a city
or village pursuant to 1952 PA 175, MCL 247.701 to 247.707.
(b) Payment of obligations of the city or village on highway
projects undertaken by the city or village jointly with the state
transportation department.
(c) For the payment of principal and interest upon loans
received
pursuant to section 11(7) 11(5), to the extent other
funds have not been made available for that payment.
(d) For the preservation, construction, acquisition, and
extension of the major street system as defined by this act
including the acquisition of a necessary right of way for the
system, work incidental to the system, and an appurtenant roadside
park or motor parkway, of the city or village and for the payment
of the principal and interest on that portion of the city's or
village's general obligation bonds which are attributable to the
construction or reconstruction of the city's or village's major
street system. Not more than 5% per year of the funds returned to a
city or village by this subsection shall be expended for the
preservation or acquisition of appurtenant roadside parks and motor
parkways. Surplus funds may be expended for the development,
construction, or repair of off-street parking facilities, and the
construction or repair of street lighting, and transfer to the
local street system under subsection (6).
(4) The remaining amount to be returned to incorporated cities
and villages shall be expended in each city or village for the
preservation, construction, acquisition, and extension of the local
street system of the city or village, as defined by this act,
including the acquisition of a necessary right of way for the
system, work incidental to the system, and subject to subsection
(5), for the payment of the principal and interest on that portion
of the city's or village's general obligation bonds which are
attributable to the construction or reconstruction of the city's or
village's local street system. The amount returned under this
subsection shall be returned to the cities and villages 60% in the
same proportion that the population of each bears to the total
population of all incorporated cities and villages in the state,
and 40% in the same proportion that the total mileage of the local
street system of each bears to the total mileage in the local
street systems of all cities and villages of the state. The payment
of the principal and interest upon bonds issued by a city or
village pursuant to 1952 PA 175, MCL 247.701 to 247.707, and after
that payment, the payment of debt service on loans received under
section 11(7)
11(5), shall have priority in the expenditure of
money returned under this subsection.
(5) Money distributed to each city and village for the
maintenance and preservation of its local street system under this
act represents the total responsibility of the state for local
street system support. Funds distributed from the Michigan
transportation fund shall not be expended for construction purposes
on city and village local streets except to the extent matched from
local revenues including other money returned to a city or village
by the state under the state constitution of 1963 and statutes of
the state, from funds that can be raised by taxation in cities and
villages for street purposes within the limitations of the state
constitution of 1963 and statutes of the state, from special
Senate Bill No. 1182 as amended April 27, 2006
assessments,
or from any other source. This subsection does not
apply
to section 11b.
(6) Except
as provided in subsection (12), money Money
returned under this section to a city or village shall be expended
on the major and local street systems of that city or village.
However, the first priority shall be the major street system. Money
returned for expenditure on the major street system shall be
expended in the priority order provided in subsection (3) except
that surplus funds may be transferred for preservation of the local
street system. Major street funds transferred for use on the local
street system shall not be used for construction but may be used
for preservation as defined in section 10c. A city or village shall
not
transfer more than 25% <<50%>> of its annual major street funding
for the local street system unless it has adopted and is following
an asset management process for its major and local street systems
and adopts a resolution with a copy to the department setting forth
all of the following:
(a) A list of the major streets in that city or village.
(b) A statement that the city or village is adequately
maintaining its major streets.
(c) The dollar amount of the transfer.
(d) The local streets to be funded with the transfer.
(e) A statement that the city or village is following an asset
management process for its major and local street systems.
<<(7) A CITY OR VILLAGE THAT HAS NOT ADOPTED AN ASSET MANAGEMENT PLAN SHALL OBTAIN THE CONCURRENCE OF THE DEPARTMENT TO TRANSFER MORE THAN 50% OF ITS MAJOR STREET FUNDING TO ITS LOCAL STREET SYSTEM.>>
<<(8) (7)>> Not more than 10% per year of all of the funds
returned
to
a city or village from any source for the purposes of this section
may be expended for administrative expenses. As used in this
Senate Bill No. 1182 as amended April 27, 2006
subsection, "administrative expenses" means those expenses that are
not assigned including, but not limited to, specific road
construction or maintenance projects and are often referred to as
general or supportive services. Administrative expenses shall not
include net equipment expense, net capital outlay, debt service
principal and interest, and payments to other state or local
offices that are assigned, but not limited to, specific road
construction projects or maintenance activities. A city or village
which in a year expends more than 10% for administrative expenses
shall be subject to section 14(5).
<<(9) (8)>> In each city and village to which funds are
returned
under
this section, the responsibility for street preservation and the
development, construction, or repair of off-street parking
facilities and construction or repair of street lighting shall be
coordinated by a single administrator to be designated by the
governing body who shall be responsible for and shall represent the
municipality in transactions with the state transportation
department pursuant to this act.
<<(10) (9)>> Cities and villages may provide for consolidated
street
administration. A city or a village may enter into an agreement
with other cities or villages, the county road commission, or with
the state transportation commission for the performance of street
or highway work on a road or street within the limits of the city
or village or adjacent to the city or village. The agreement may
provide for the performance by any of the contracting parties of
the work contemplated by the contracts including services and
acquisition of rights of way, by purchase or condemnation by any of
Senate Bill No. 1182 as amended April 27, 2006
the contracting parties in its own name. The agreement may provide
for joint participation in the costs if appropriate.
<<(11) (10)>> Interest earned on funds
returned to a city or a
village
for purposes provided in this section shall be credited to the
appropriate street fund.
<<(12) (11)>> In addition to the
financial compliance audits
required
by law, the department of treasury shall conduct performance audits
and make investigations of the disposition of all state funds
received by cities and villages for transportation purposes to
determine compliance with the terms and conditions of this act.
Performance audits shall be conducted according to government
auditing standards issued by the United States general accounting
office. The department of treasury shall provide notice to cities
and villages of the standards to be used for audits under this
subsection prior to the fiscal year in which the audit is
conducted. The department shall notify cities and villages of any
subsequent changes to the standards. Cities and villages shall make
available to the department of treasury the pertinent records for
the audit.
(12)
Effective January 1, 2009, money returned to a city or
village
for expenditure on the major street system may not be
transferred
or expended for use on the local street system except
to
the extent matched by local revenues expended by the city or
village
on the major street system or state trunk line highways.
For
purposes of this subsection, local revenue means revenue other
than
Michigan transportation fund revenue and includes, but is
not
limited
to, general fund revenue and special assessments.
Senate Bill No. 1182 as amended April 27, 2006
<<(13)>> On or before October 1, 2008, the department shall
prepare a report listing by city and village, and in total, the
following information:
(a) Amounts transferred between major street fund and local
street fund.
(b)
Amounts of local revenue as defined in subsection (12)
expended on the major street system. The report shall include
fiscal years from January 1, 2002 through June 30, 2008. The report
shall analyze the extent to which the amendatory act that added
this subsection affected city and village transfers from major
street funds to local street funds, and the amount of local revenue
expended on city or village major streets and state trunk lines.
The report shall be submitted to the house and senate
appropriations committees and to the house and senate fiscal
agencies.