HB-5168, As Passed House, June 5, 2014

SUBSTITUTE FOR

HOUSE BILL NO. 5168

A bill to amend 2012 PA 387, entitled

"Regional transit authority act,"

by amending section 6 (MCL 124.546).

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 6. (1) Within 30 days after the appointment of the

members of a board under section 5, the board shall hold its first

meeting at a date and time to be determined by the governor's

representative. The governor's representative shall serve without

vote and shall serve as chairperson of the board. The board members

shall elect officers as necessary. The board shall elect all

officers annually.

(2) The business of a board shall be conducted at a public

meeting held in compliance with the open meetings act, 1976 PA 267,

MCL 15.261 to 15.275. Public notice of the date, time, and place of

the meeting shall be given in the manner required by the open

meetings act, 1976 PA 267, MCL 15.261 to 15.275. A board shall

adopt bylaws consistent with the open meetings act, 1976 PA 267,

MCL 15.261 to 15.275. After organization, a board shall adopt a

schedule of regular meetings. A board shall meet at least once each

quarter. A special meeting of a board may be called by the

chairperson of the board or as provided in the bylaws of the board.

(3) A majority of the voting members of a board constitute a

quorum for the transaction of the business of an authority. Actions

of a board shall be by simple majority vote of all voting members

of the board, except as follows:

(a) A board shall provide in its bylaws that the following

actions require the approval of 7/9 of the voting members, and the

7/9 must include the affirmative vote of at least 1 member from

each participating county and a member appointed under section

5(1)(f):

(i) The placing of a question of the levy of an assessment

under section 10(2) on the ballot by an authority.

(ii) The determination of the rate of, or amount of, any

assessment to be requested by an authority at an election.

(iii) The placing of a question of approving a motor vehicle

registration tax on the ballot by an authority.

(iv) The determination of the rate of, or amount of, any motor

vehicle registration tax to be requested by an authority at an

election.

(v) Beginning on July 1, 2024, approval of an agreement for

the transfer to the authority of assets of a nonprofit street

railway corporation organized under the nonprofit street railway

act, 1867 PA 35, MCL 472.1 to 472.27.

(vi) A determination to acquire, construct, operate, or

maintain a commuter rail line operating between the city with the

largest population within a county described in section 5(1)(d) and

a city described in section 5(1)(f).

(b) A board shall provide in its bylaws that the following

actions require the unanimous approval of all voting members of the

board:

(i) A Except as otherwise provided in subdivision (a)(vi), a

determination to acquire, construct, operate, or maintain any form

of rail passenger service within a public transit region. Beginning

on July 1, 2024, this subparagraph does not apply to a street

railway system organized under the nonprofit street railway act,

1867 PA 35, MCL 472.1 to 472.27.

(ii) A determination to acquire a public transportation

provider. Unless an authority secures the affirmative vote of a

majority of the electors of each member county in the public

transit region as provided in section 7(2), the authority shall not

acquire a public transportation provider that does business in a

public transit region unless both of the following conditions are

satisfied:

(A) All accrued liabilities, funded and unfunded, of the

public transportation provider being acquired have been paid or are

required to be paid by a person other than the authority.

(B) The board unanimously agrees to comply with all

requirements for obtaining federal operating and capital assistance

grants under the moving ahead for progress in the 21st century act,

Public Law 112-141, and the regulations promulgated under the

moving ahead for progress in the 21st century act, Public Law 112-

141, with respect to the public transportation provider being

acquired.

(iii) A determination to place on a ballot the question of

acquiring, accepting responsibility for, or obligating itself to

assume liability for or to pay any legacy costs, including, but not

limited to, costs associated with litigation, claims, assessments,

worker's compensation awards or charges, swap losses, pensions,

health care, or other postemployment benefits, of a public

transportation provider that may be purchased, merged with,

assumed, or otherwise acquired by an authority.

(4) A board shall keep a written or printed record of each

meeting. A written or printed record of each meeting and any other

document or record prepared, owned, used, in the possession of, or

retained by an authority in the performance of an official function

shall be made available to the public under the freedom of

information act, 1976 PA 442, MCL 15.231 to 15.246.

(5) A board shall provide for a uniform system of accounts for

an authority to conform to and for the auditing of the authority's

accounts. The board shall obtain an annual audit of an authority by

an independent certified public accountant and report on the audit

and auditing procedures under sections 6 to 13 of the uniform

budgeting and accounting act, 1968 PA 2, MCL 141.426 to 141.433.

The audit shall be in accordance with generally accepted government

auditing standards and shall satisfy federal regulations regarding

federal grant compliance audit requirements. An audit obtained

under this subsection shall be filed with the state treasurer and

the department.

(6) Within 90 days after the first board meeting, a board

shall adopt and maintain a budget for the fiscal year in accordance

with the uniform budget and accounting act, 1968 PA 2, MCL 141.421

to 141.440a.

(7) Within 90 days after the first board meeting, a board

shall establish policies and procedures for the purchase of, the

contracting for, and the providing of supplies, materials,

services, insurance, utilities, third-party financing, equipment,

printing, and all other items as needed by an authority to

efficiently and effectively meet its needs using competitive

procurement methods to secure the best value for the authority. A

board shall make all discretionary decisions concerning the

solicitation, award, amendment, cancellation, and appeal of

authority contracts. In establishing policies and procedures under

this subsection, a board shall provide for the acquisition of

professional services, including, but not limited to, architectural

services, consulting services, engineering services, surveying

services, accounting services, services related to the issuance of

bonds, and legal services, in accordance with a competitive,

qualifications-based selection process and procedure for the type

of professional service required by an authority.

(8) Beginning 1 calendar year after the creation of an

authority under this act, the board shall submit a report to the

house of representatives and senate appropriations subcommittees on

transportation and the house of representatives and senate

committees on transportation on March 31 of each year that includes

all of the following information from the preceding calendar year:

(a) Financial status of the authority.

(b) Financial status of public transportation providers within

the public transit region.

(d) The status of any rolling rapid transit system.

(e) The average daily and annual ridership of a rolling rapid

transit system.

(f) The dashboard developed by the authority under subsection

(9)(d).

(g) The number and severity of any accidents that occur that

involve a rolling rapid transit system.

(9) Within 120 days after the first board meeting, a board

shall establish a website for the authority and the authority shall

post on the website its budget, policies and procedures, and

updates on authority activities and transactions and the progress

of any project, including, but not limited to, a proposed rolling

rapid transit system, as they become available. An authority shall

also post all of the following information on a website established

under this subsection:

(a) An asset management plan for all revenue vehicles and

facilities, major facility components, and major pieces of

equipment as defined by the department. An authority shall update

the asset management plan annually.

(b) The method used by the authority to determine the

percentage of operating costs that will be funded with local funds

and the percentage that will be funded with fares. An authority

shall update this information every 3 years.

satisfaction and a survey of general public satisfaction with the

services and performance of the authority once every 3 years. An

authority shall provide results for the most recent completed

surveys under this subdivision to the department.

(d) A dashboard of the authority's performance that includes,

at a minimum, the information required under subdivisions (a)

through (c). The dashboard shall also include annual performance

indicators for the authority that have been established by the

board. The dashboard shall be readily available to the public, and

the authority shall update the dashboard annually.

(10) A board may not enter into a cost plus construction

contract unless all of the following apply:

(a) The contract cost is less than $50,000.00.

(b) The contract is for emergency repair or construction

caused by unforeseen circumstances.

property.

(d) The contract complies with state and federal law.

(11) Within 90 days after the first board meeting, a board

shall adopt a procurement policy consistent with the requirements

of this act and federal and state laws relating to procurement.

Preference shall be given to firms based in a public transit region

and each county within a public transit region, consistent with

applicable law.

(12) Nothing in this section shall be construed as creating a

quota or set-aside for any city or any county in a public transit

region, and no quota or set-aside shall be created.

(13) An authority shall issue an annual report to the board

and each member jurisdiction within a public transit region

detailing all contracts entered into and listing the names and

headquarters of all authority vendors with whom the authority has

contracted for services during the previous fiscal year.

(14) Within 90 days after the first board meeting, a board

shall establish and adopt all of the following:

(a) A policy to govern the control, supervision, management,

and oversight of each contract to which an authority is a party.

(b) Procedures to monitor the performance of each contract to

assure execution of the contract within the budget and time periods

provided under the contract. The monitoring shall include oversight

as to whether the contract is being performed in compliance with

the terms of the contract, this act, and federal and state law. The

chief executive officer or other authorized employee of an

authority shall not sign or execute a contract until the contract

is approved by the board.

procurement or employment contract with a person who has been

convicted of a criminal offense related to the application for or

performance of a contract or subcontract with a governmental entity

in any state. As used in this subdivision and subdivision (d),

"person" includes affiliates, subsidiaries, officers, directors,

and managerial employees of a business entity, or an individual or

entity who, indirectly or directly, holds a pecuniary interest in a

business entity of 20% or more.

(d) Polices to ensure that the authority does not enter into a

procurement or employment contract with a person who has been

convicted of a criminal offense, or held liable in a civil

proceeding, in this state or any other state, that negatively

reflects on the person's business integrity, based on a finding of

embezzlement, theft, forgery, bribery, falsification or destruction

of records, receiving stolen property, violation of state or

federal antitrust statutes, or similar laws.

(15) An authority is not required to use competitive bidding

when acquiring proprietary services, equipment, or information

available from a single source, such as a software license

agreement. An authority may enter into a competitive purchasing

agreement with the federal government, this state, or other public

entities for the purchase of necessary goods or services. An

authority may enter into lease purchases or installment purchases

for periods not exceeding the useful life of the items purchased

unless otherwise prohibited by law. In all purchases made by an

authority, if consistent with applicable federal and state law,

preference shall be given first to products manufactured or

services offered by firms based in the authority's public transit

region, including, but not limited to, the cities and counties in a

public transit region, and second to firms based in this state. An

authority shall actively solicit lists of potential bidders for

authority contracts from each city and each county in a public

transit region. Except as otherwise provided in this section, an

authority shall utilize competitive solicitation for all purchases

authorized under this act unless 1 or more of the following apply:

(a) An emergency directly and immediately affecting service or

public health, safety, or welfare requires the immediate

procurement of supplies, materials, equipment, or services to

mitigate an imminent threat to public health, safety, or welfare,

as determined by an authority or its chief executive officer.

(b) Procurement of goods or services is for emergency repair

or construction caused by unforeseen circumstances when the repair

or construction is necessary to protect life or property.

declared state of emergency or state of disaster under the

emergency management act, 1976 PA 390, MCL 30.401 to 30.421.

(d) Procurement of goods or services is in response to a

declared state of emergency under 1945 PA 302, MCL 10.31 to 10.33.

(e) Procurement of goods or services is in response to a

declared state of energy emergency under 1982 PA 191, MCL 10.81 to

10.89.

(f) Procurement of goods or services is under a cooperative

purchasing agreement with the federal government, this state, or

another public entity for the purchase of necessary goods and

services at fair and reasonable prices using a competitive

procurement method for authority operations.

(g) The value of the procurement is less than $25,000.00, and

the board has established policies or procedures to ensure that

goods or services with a value of less than $25,000.00 are

purchased by the board at fair and reasonable prices, including a

requirement that for purchases and sales of $25,000.00 or less, but

over $5,000.00, written price quotations from at least 3 qualified

and responsible vendors shall be obtained or a memorandum shall be

kept on file showing that fewer than 3 qualified and responsible

vendors exist in the market area within which it is practicable to

obtain quotations. Procurement of goods or services with a value of

less than $5,000.00 may be negotiated with or without using

competitive bidding as authorized in a procurement policy adopted

by the board.

(16) Notwithstanding any other requirement of this act, if an

authority applies for and receives state or federal ~~funds~~ money

that ~~require~~ requires the authority to comply with procurement or

contracting requirements that are in conflict with this act, the

state or federal requirements shall take precedence over the

requirements of this act.

(17) A board may employ personnel as it considers necessary to

assist the board in performing the powers, duties, and

jurisdictions of the authority, including, but not limited to,

employment of a chief executive officer and other senior executive

and administrative staff. A board shall hire a chief executive

officer and any necessary support staff for the chief executive

officer. Individual board members shall not hire or be assigned

personal staff.

(18) A board shall establish policies to ensure that the board

and an authority do not do either of the following:

(a) Fail or refuse to hire, recruit, or promote; demote;

discharge; or otherwise discriminate against an individual with

respect to employment, compensation, or a term, condition, or

privilege of employment, or a contract with the authority in a

manner that is not in compliance with state or federal law.

(b) Limit, segregate, or classify an employee, a contractor,

or an applicant for employment or a contract in a way that deprives

or tends to deprive the employee, contractor, or applicant of an

employment opportunity or otherwise adversely affects the status of

an employee, contractor, or applicant in a manner that is not in

compliance with state or federal law.

(19) A board shall create a citizens' advisory committee that

consists of public transit region residents. The citizens' advisory

committee shall be composed as follows:

(a) Forty percent of the committee shall be made up of users

of public transportation, as follows:

(i) At least 25% of the users of public transportation on the

committee shall be senior citizens or persons with disabilities.

(ii) Two users of public transportation from each of the

following counties within the public transit region for the

authority:

(A) The qualified county.

(B) The county with the second largest population according to

the most recent decennial census.

(D) The county with the fourth largest population according to

the most recent decennial census.

(iii) Two users of public transportation from the city in the

qualified county with the largest population according to the most

recent decennial census.

(iv) Two users of public transportation from each additional

county participating in the authority under section 4 and not

listed in subparagraph (ii).

(b) Twenty percent of the committee shall be made up of

individuals from organizations representing senior citizens and

persons with disabilities.

individuals representing business, labor, community, and faith-

based organizations.

(20) A citizens' advisory committee created under subsection

(19) may meet at least once every quarter. The citizens' advisory

committee may make reports to a board, including recommendations,

at each board meeting. A citizens' advisory committee may do all of

the following:

(a) Review and comment on the comprehensive regional public

transit service plan for a public transit region and all annual

updates.

(b) Advise a board regarding the coordination of functions

between different owners and operators of public transportation

facilities within a public transit region.

plan required by section 10e of 1951 PA 51, MCL 247.660e.

(d) Upon request of a board, provide recommendations on other

matters that concern public transportation in a public transit

region.

(21) A board shall create a public transportation provider

advisory council that consists of 2 members appointed by each

public transportation provider in the public transit region. The

public transportation provider advisory council may make reports to

a board, including recommendations, at each board meeting. The

public transportation provider advisory council shall only make

recommendations to a board on the following issues:

(a) Coordination of service.

(b) Funding.

(d) Specialized services.

(e) Other matters as requested by a board.

(22) To secure federal money for an authority or activities of

an authority under this act, the board may enter into an agreement

with a street railway organized under the nonprofit street railway

act, 1867 PA 35, MCL 472.1 to 472.27, or take other action

necessary for the recognition by the United States department of

transportation of activities or functions of the authority or the

street railway as a connected project.

(23) The board shall ensure that 100% of federal matching

money or aid received by the authority for the construction or

operation of a street railway system under the nonprofit street

railway act, 1867 PA 35, MCL 472.1 to 472.27, within a public

transit region is expended on public transportation service routes

located in the county or counties in which the street railway

system was constructed. If the authority accepts a transfer of

House Bill No. 5168 (H-1) as amended June 5, 2014

assets of a street railway organized under the nonprofit street

railway act, 1867 PA 35, MCL 472.1 to 472.27, as provided in

subsection (3)(a)(v) and the street railway operates exclusively on

routes located within a qualified county, the authority shall

ensure that any operational deficit related to the operation of

that street railway is paid with money raised in the qualified

county or a member jurisdiction within the qualified county.

(24) The authority shall ensure that any operational deficit

related to the operation of a commuter rail line described in

subsection (3)(a)(vi) is paid with money raised in each county or a

member jurisdiction of each county within which the commuter rail

line operates.

[Enacting section 1. This amendatory act takes effect 90 days after the date it is enacted into law.]