SB-1590, As Passed House, December 11, 2008

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 1590

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 10e (MCL 247.660e), as amended by 1998 PA 87.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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

appropriated for each fiscal year in the following order of

priority.

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

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

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

issued under section 18b for comprehensive transportation purposes

as defined by law. A sufficient portion of the comprehensive

transportation fund is irrevocably appropriated to pay, when due,

the principal and interest on those bonds and notes.

(3) After making or setting aside payments required by

subsection (2), the second priority of the comprehensive

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

administering the comprehensive transportation fund. The amount to

be expended pursuant to this subsection shall not exceed the costs

appropriated for the administration of the fund in the fiscal year

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

the change for the preceding 12 months in the Detroit consumer

price index for urban wage earners and shall be appropriated

annually by the legislature.

(4) After making or setting aside payments required by

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

transportation fund shall be expended each fiscal year as

appropriated annually by the legislature pursuant to the state

transportation program approved by the commission as follows:

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

grants to eligible authorities and eligible governmental agencies

according to the following formulations and subject to the

following requirements:

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

fiscal year thereafter, each eligible authority and eligible

governmental agency which provides public transportation services

in urbanized areas under ~~Public Law 103-272,~~ 49 ~~U.S.C.~~ USC 5307,

with a Michigan population greater than 100,000 shall receive a

grant of up to 50% of their eligible operating expenses as defined

by the state transportation department.

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

fiscal year thereafter, each eligible authority and eligible

governmental agency which provides public transportation services

in urbanized areas with a Michigan population less than or equal to

100,000 and nonurbanized areas under ~~Public Law 103-272,~~ 49 ~~U.S.C.~~

USC 5311, shall receive a grant of up to 60% of their eligible

operating expenses as defined by the state transportation

department. For purposes of receiving a grant under this

subparagraph in nonurbanized areas, eligible costs of services

provided by water vehicle shall be reimbursed at not less than 50%

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

federal government.

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

eligible governmental agency under this act unless the eligible

authority or eligible governmental agency provides or agrees to

provide preferential fares for public transportation services to

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

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

with disabilities" means an individual with a disability as that

term is defined in 61 ~~F.R.P.~~ FRP 56424 (November 1, 1996) and 49

~~C.F.R.~~ CFR part 27. The preferential fares shall not be higher than

50% of the regular 1-way single fare.

(iv) Eligible authorities and eligible governmental agencies

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

equipment funded under this act except on an incidental basis as

defined by 49 ~~C.F.R.~~ CFR part 604.

(v) Notwithstanding any other provision of this subsection,

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

authority and eligible governmental agency shall receive a

distribution from the comprehensive transportation fund not less

than the distribution received for eligible operating expenses for

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

fiscal year ending September 30, 1998 and each fiscal year

thereafter, each eligible authority and eligible governmental

agency shall receive a distribution from the comprehensive

transportation fund for eligible operating expenses not less than

the distribution received for the fiscal year ending September 30,

1997. As it relates to this subsection the ratio between

comprehensive transportation funds and local funds in the fiscal

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

years by the eligible authority and eligible governmental agency.

Reductions in this ratio shall require a proportionate reduction in

the comprehensive transportation funds provided for any fiscal

year.

(vi) Each eligible authority and eligible governmental agency

receiving comprehensive transportation funds shall prepare and

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

carrying out its local transportation program within 40 days after

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

made on forms authorized by the United States department of

transportation under the provisions of the surface transportation

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

101 Stat. 132.

(vii) The department shall periodically adjust or redistribute

comprehensive transportation funds previously distributed under

this subdivision.

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

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

the department for intercity passenger and intercity freight

transportation purposes.

fiscal year thereafter, funds remaining in the fund after payment

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

distributed by the department for public transportation purposes.

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

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

eligible authorities and eligible governmental agencies that are

approved for federal funding as provided by federal law and for

which an approved transportation improvement program (TIP) and

state transportation improvement plan (STIP) exist. Funds

distributed under this subdivision shall be expended pursuant to

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

following public transportation purposes:

(i) The specialized services assistance program. The

specialized services assistance program shall be funded with not

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

subdivision. Funds shall be distributed according to guidelines

developed by the department based upon the following

considerations:

(A) Proposals for coordinated specialized services assistance

funding shall be developed jointly between existing eligible

authorities or eligible governmental agencies that provide public

transportation services and the area agencies on aging or any other

organization representing specialized services interests, as

defined in this subdivision. Plans shall be reviewed and approved

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

Upon approval, the department shall release the funds to the

eligible authority or eligible governmental agency which shall then

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

organization representing specialized services interests, as

defined in this subdivision for the purchase of services as

approved in the plan by the department.

(B) If an eligible authority or eligible governmental agency

does not exist to provide public transportation service in a

county, coordinated proposals for specialized services assistance

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

organization representing specialized services interests, as

defined in this subdivision. The proposals shall be reviewed and

approved by the bureau of urban and public transportation of the

department. Upon approval, the department shall release the funds

to the area agency on aging or any other organization representing

specialized services interests, as defined in this subdivision for

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

means public transportation primarily designed for persons with

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

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

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

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

for local bus capital or 100% capital projects for eligible

authorities and eligible governmental agencies that are not

eligible to receive federal capital formula funds under section

5307 of the federal intermodal surface transportation efficiency

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

(iii) Local bus new services.

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

credit program established under section 10l.

(v) Public transportation development.

(vi) Other public transportation programs approved by the

commission.

(d) The unappropriated and unencumbered balance of the

comprehensive transportation fund lapses at the end of each fiscal

year and reverts to the comprehensive transportation fund for

appropriation in the following fiscal year.

(5) Eligible authorities and eligible governmental agencies

shall receive capital grants each fiscal year by the annual process

described in this section. Amounts received by an eligible

authority or eligible governmental agency pursuant to this

subsection shall be expended by that authority or agency solely for

capital projects which have been approved by the state

transportation commission. Any funds approved by distribution to an

eligible authority or eligible governmental agency pursuant to this

section which have not been encumbered by that agency or authority

for an approved capital project by the end of the following fiscal

year in which the funds were approved shall not be expended by the

authority or agency and be available for distribution from the

comprehensive transportation fund for the purposes described in

this section.

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

transportation commission, shall annually prepare and distribute by

December 1, instructions to eligible governmental agencies,

eligible authorities, and intercity carriers to enable the

preparation of a local transportation program. Eligible

governmental agencies, eligible authorities, and intercity carriers

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

comprehensive transportation fund to the residents of the counties,

townships, villages, and cities affected by the local

transportation program and shall make their application available

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

governmental agency, eligible authority, or intercity carrier shall

be transmitted to the department.

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

eligible authority, and eligible governmental agency shall submit

to the department its local transportation program for the next

succeeding fiscal year. The format for each local transportation

program shall be as prescribed by the federal transportation

improvement program insofar as practical and shall include project

descriptions, funding sources, and justification for each line

item, and summary budgets based on distributions anticipated under

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

contemplated routes, hours of service, estimated transit vehicle

miles, costs of public transportation services, and projected

capital improvements or projects as exclusively determined by the

eligible authority or eligible governmental agency. The costs of

service and capital improvements or projects shall be in sufficient

detail to permit the state transportation department to evaluate

and approve the annual public transportation program. Determination

of individual projects to be included in the local transportation

programs other than those provided in this subsection shall be made

by the governing body of the eligible authority or eligible

governmental agency.

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

prepare and file for public inspection and review the department

transportation program. The department transportation program shall

be prepared on similar format to the local transportation programs,

and shall include a summary description of projects, with funding

sources and project justifications for each line item for the

fiscal year immediately succeeding the fiscal year in which the

program is submitted. In addition, the department transportation

program shall include summary, nondetailed budget and project

descriptions and justifications excluding projects contained in a

local transportation program.

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

prepare and file with the commission the proposed state

transportation program for the next succeeding fiscal year. The

proposed state transportation program shall contain the local

transportation programs of each intercity carrier, eligible

authority and eligible governmental agency, the department

transportation program, and the programs for the expenditure of the

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

or modified since their original filing. The state transportation

program shall include the estimated amount of money in the funds

described in this subsection by revenue source, project

justifications, project descriptions funding sources, and budget

summaries.

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

commission shall act on the state transportation program for the

fiscal year commencing on the following October 1. In considering

approval of the proposed projects of each intercity carrier,

eligible authority, or eligible governmental agency, other than

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

state transportation commission shall consider whether the projects

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

whether they may be funded within the approved budgets, whether

there are intercity carriers, eligible authorities, and eligible

governmental agencies responsible to implement the projects, and

the recommendations of the department on individual projects. Upon

making those determinations, the state transportation commission

shall approve the projects which best meet the criteria of this

subsection.

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

eligible authority, or eligible governmental agency shall enter

into a contractual agreement or standardized grant memorandum of

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

section in the applicable fiscal year to the intercity carrier,

eligible authority, or eligible governmental agency from the

comprehensive transportation fund.

(12) After a multiyear public transportation program is

approved by the state transportation commission, the state

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

with an eligible authority, intercity carrier, or eligible

governmental agency obligating the state to a minimum level of

funding for approved projects to be available over the multiyear

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

state transportation department as long as the provisions and

conditions of the state transportation commission approved program

are carried out as agreed.

(13) Contracts and grant memorandum agreements may be audited

by the state transportation commission's office of commission

audits using rules promulgated by the United States general

accounting office and the terms and conditions of the respective

contracts and agreements. Third party agreements are subject to the

review and approval of the department.

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

portion of the cost not eligible for reimbursement by the federal

government for eligible capital projects authorized by the state

transportation commission using comprehensive transportation funds

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

Priority for funding obligation shall be given to capital projects

for which federal funds have been authorized.

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

authorities and eligible governmental agencies not in their fourth

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

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

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

operating expenses as determined by the department:

(a) Startup 100%.

(b) First year 90%.

(d) Third year 70%.

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

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

eligible operating expenses shall be met from local revenue sources

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

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

after the third year, the department shall participate in eligible

capital expenses in the same percentage as for other eligible

authorities and eligible governmental agencies. For the purposes of

this subsection, eligible operating and capital expenses means

those expenses determined by the department as applicable to

existing eligible authorities and eligible governmental agencies.

The department shall prioritize annually all requests for

comprehensive transportation funds to institute new services under

this subsection. First priority shall be given to eligible

authorities and eligible governmental agencies who have not

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

services initiated by eligible authorities and eligible

governmental agencies under this subsection shall meet all of the

requirements of section 10.

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

cost not eligible for reimbursement by the federal government for

intercity passenger operating assistance projects authorized by the

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

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

portion of the cost not eligible for reimbursement by the federal

government. After the third year, eligible costs shall be

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

reimbursement by the federal government. Eligible costs of services

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

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

federal government. However, the amount of funds from the

comprehensive transportation fund when added to federal funds and

local funds shall not exceed the total operating assistance project

cost.

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

1976, by an eligible authority or eligible governmental agency with

funds made available under this act, which funds were not already

committed under a contract in existence on November 15, 1976, shall

not be used to provide service on a fixed schedule and fixed route

for which a passenger fee is charged unless the vehicle is

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

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

can be secured.

(18) A vehicle shall not be purchased, leased, or rented by an

eligible authority or eligible governmental agency after October 1,

1978, with funds made available under this act which vehicle is

used to provide demand actuated service unless the eligible

authority or eligible governmental agency has submitted a plan to

the state transportation department describing the service to be

provided by the demand actuated service to persons 65 years of age

or older and persons with disabilities within the applicable

service area and that plan has been approved by the department. The

department shall approve the plan as submitted or modified or shall

reject the plan within 60 days after the plan is submitted. A plan

which describes the service to be provided by the demand actuated

service shall not be approved by the department unless that plan

provides the following:

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

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

the entire service area subject to the plan.

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

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

disabilities during the same hours as service is provided to all

other persons in the service area subject to the plan.

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

disabilities from the initiation of a service request to arrival at

the destination is equal to the average time period required for

demand actuated service provided to all other persons in the

service area subject to the plan.

(d) That the eligible authority or eligible governmental

agency submitting the plan has established a local advisory council

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

years of age or older and persons with disabilities within the

service area subject to the plan and that the local advisory

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

before its submission to the department. Each eligible authority or

eligible governmental agency jointly with the area agency on aging

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

of the local advisory council. Each advisory council comment shall

be included in the plan when submitted to the department.

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

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

transportation department within 60 days after submission shall be

considered approved as submitted.

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

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

water or to vehicles of common carriers licensed by the state

transportation department.

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

annual report to the legislature detailing the service provided in

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

with disabilities by fixed route service and demand actuated

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

shall be submitted by April 1 of each year.

(22) ~~Notwithstanding any other provision of this section, if~~

~~the unreserved balance of the comprehensive transportation fund as~~

~~of September 30, 1997 is greater than $50,000,000.00, then the~~

~~entire unreserved balance minus $50,000,000.00 shall be~~

~~appropriated for the fiscal year ending September 30, 1998 only to~~

~~local bus transit authorities for discretionary capital~~

~~expenditures. These funds shall be distributed to individual~~

~~authorities in the same proportion provided for in the provisions~~

~~of section 10e(4)(a)(~~i~~) except that the costs of services provided~~

~~by water vehicle shall not be eligible for reimbursement.~~

Notwithstanding any other provision of this section, for each

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

the state budget director shall include in the annual budget

submitted to the legislature for the ensuing fiscal period under

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

appropriation from a fund or funds other than the comprehensive

transportation fund to a street railway organized under the

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

sum equal to the difference between the annual operating expenses

of the street railway and revenue received by the street railway

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

increment revenues received by the street railway under section 23

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

appropriation submitted in the budget under this section shall not

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

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

authority or eligible governmental agency for purposes of

subdivision (4)(a).

Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 94th Legislature are

enacted into law:

(a) House Bill No. 6542.

(b) House Bill No. 6543.

(d) House Bill No. 6625.