Bill Text: MI HB5864 | 2013-2014 | 97th Legislature | Introduced


Bill Title: Highways; construction and repair; distribution of money from Michigan transportation fund to counties, cities, and villages; modify. Amends secs. 10a, 12, 12b, 13 & 14 of 1951 PA 51 (MCL 247.660a et seq.).

Spectrum: Partisan Bill (Republican 4-0)

Status: (Introduced - Dead) 2014-10-01 - Printed Bill Filed 10/01/2014 [HB5864 Detail]

Download: Michigan-2013-HB5864-Introduced.html

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 5864

 

September 30, 2014, Introduced by Reps. McMillin, Goike, Forlini and Kowall and referred to the Committee on Transportation and Infrastructure.

 

     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 promote safe and efficient travel for

motor vehicle drivers, bicyclists, pedestrians, and other legal

users of roads, streets, and highways; 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 sections 10a, 12, 12b, 13, and 14 (MCL 247.660a,

 

247.662, 247.662b, 247.663, and 247.664), section 10a as amended by

 

1992 PA 137, sections 12 and 13 as amended by 2012 PA 298, and

 

section 14 as amended by 1987 PA 234.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 10a. (1) Annually Until the effective date of the 2014

 

amendatory act that amended this subsection, the state

 

transportation department shall determine the miles of state trunk

 

line highways, county primary and local roads, and city and village

 

major and local streets transferred to and from state, county,

 

city, or village jurisdiction during the preceding period of July 1

 

to June 30. In each year after that determination, the transferred

 

mileage shall be accumulated and added to the mileage transferred

 

in each subsequent July 1 to June 30 period.

 

     (2) The Until the effective date of the 2014 amendatory act

 

that amended this subsection, the current average revenue worth per

 


mile of a county primary road and a county local road shall be

 

determined annually by dividing the total county primary and local

 

road mileages respectively as of the first day of the preceding

 

July 1 to June 30 period into the total amount of Michigan

 

transportation funds returned to counties pursuant to under this

 

act for use on county primary and local roads respectively during

 

that period, except money returned to counties pursuant to under

 

section 12(2) and (3).

 

     (3) The Until the effective date of the 2014 amendatory act

 

that amended this subsection, the total amount of money to be

 

transferred from and to the state trunk line fund, the counties,

 

cities, and villages shall be determined annually by multiplying

 

the current revenue worth per mile of a county primary road and a

 

county local road respectively by the number of accumulated miles

 

in each category transferred from and to state, county, city, or

 

village jurisdiction. If the transferred facility becomes

 

classified as part of the local road or street system of the

 

receiving jurisdiction, the transfer of money shall be calculated

 

on the basis of the revenue worth per mile of a county local road.

 

In any other category of jurisdictional transfer, the transfer of

 

money shall be calculated on the basis of the revenue worth per

 

mile of a county primary road.

 

     (4) For jurisdictional transfers made from the this state to a

 

county, city, or village after July 1, 1992, the amount in the

 

state trunk line fund to be transferred shall be transferred to the

 

county, city, or village receiving jurisdiction. If Until the

 

effective date of the 2014 amendatory act that amended this

 


subsection, if the transferred highway is then classified as part

 

of the local road or street system of the receiving jurisdiction,

 

the transfer of money to the receiving jurisdiction shall be

 

calculated on the basis of the revenue worth per mile of a county

 

local road as determined in subsection (2). If the transferred

 

highway is then classified as part of the primary road or major

 

street system of the receiving jurisdiction, the transfer of money

 

to the receiving jurisdiction shall be calculated on the basis of

 

the revenue worth per mile of a county primary road as determined

 

in subsection (2). This subsection and subsection (5) shall not be

 

construed to effect affect contracts entered into before or after

 

the effective date of this subsection pursuant to Act No. 166 of

 

the Public Acts of 1965, being sections 408.551 to 408.558 of the

 

Michigan Compiled Laws, under 1965 PA 166, MCL 408.551 to 408.558,

 

for the maintenance of a transferred highway.

 

     (5) In cities and villages with a population of 25,000 or

 

more, trunk line mileage that is transferred to local jurisdiction

 

after July 1, 1992 and is then classified as a major street shall

 

be certified at twice its measured length.

 

     (5) Beginning on the effective date of the amendatory act that

 

added this subsection, the department shall determine the amounts

 

to be transferred under subsections (3) and (4) based on the

 

proportion that the population of the receiving county, city, or

 

village bears to the population of all other counties, cities, or

 

villages in this state.

 

     (6) The transfer of funds money under this section shall be

 

included each year in the October appropriation of the Michigan

 


transportation fund.

 

     Sec. 12. (1) The amount distributed to the county road

 

commissions shall be returned to the county treasurers in the

 

manner, for the purposes, and under the terms and conditions

 

specified in this section. The department and the county road

 

association of Michigan shall jointly develop incentives for

 

counties to establish statewide purchasing pools for the more

 

efficient use of Michigan transportation funds.

 

     (2) Each county road commission shall be reimbursed in an

 

amount up to $10,000.00 per year for the sum paid to a licensed

 

professional engineer employed or retained by the county road

 

commission in the previous year. The sum shall be returned to each

 

county road commission certified by the department as complying

 

with this subsection regarding the employment of an engineer.

 

     (3) An amount equal to 1% of the total amount returned to the

 

county road commissions from the Michigan transportation fund

 

during the prior calendar year shall be withheld annually from the

 

counties' November monthly distribution provided for in under

 

section 17, and the amount shall be returned to the county road

 

commissions for snow removal purposes as provided in under section

 

12a.

 

     (4) An amount equal to 10% of the total amount returned to the

 

county road commissions from the Michigan transportation fund shall

 

be returned to each county road commission having county primary,

 

or county local road, or both, mileage in the urban areas as

 

determined pursuant to under section 12b. This sum shall be

 

distributed pursuant to under section 12b. The return shall be in

 


addition to the amounts provided in subsections (6) and (7) and for

 

the purposes stated in those subsections.

 

     (5) An amount equal to 4% of the total amount returned to the

 

county road commissions from the Michigan transportation fund shall

 

be returned to the county road commissions in the same percentages

 

as provided in subsection (7). All money returned to the county

 

road commissions as provided in under this subsection shall be

 

expended by the county road commissions for the preservation,

 

construction, acquisition, and extension of county local road

 

systems and shall be in addition to the amounts provided in

 

subsection (7).

 

     (6) Seventy-five percent of the remainder of the total amount

 

to be returned to the counties shall be expended by each county

 

road commission for the preservation, construction, acquisition,

 

and extension of the county primary road system, including the

 

acquisition of a necessary right of way for the system, work

 

incidental to the system, and a roadside park or motor parkway

 

appurtenant to the system, and shall be returned to the counties as

 

follows:

 

     (a) Three-fourths of the amount in proportion to the amount

 

received within the respective county during the 12 months next

 

preceding the date of each monthly distribution, as specific taxes

 

upon registered motor vehicles under the Michigan vehicle code,

 

1949 PA 300, MCL 257.1 to 257.923.

 

     (b) One-tenth of the amount in the same proportion that the

 

total mileage in the county primary road system population of each

 

county bears to the total mileage in all of the county primary road

 


systems of the population of this state.

 

     (c) One eighty-third of the remaining 15% of the amount to

 

each county.

 

     (7) The balance of the remainder of the total amount to be

 

returned to counties shall be expended by each county road

 

commission for the preservation, construction, acquisition, and

 

extension of the county local road system as defined by this act,

 

including the acquisition of a necessary right of way for the

 

system, work incidental to the system, and a roadside park or motor

 

parkway appurtenant to the system, and shall be returned to the

 

counties as follows:

 

     (a) Sixty-five percent of the amount in the same proportion

 

that the total mileage in population of the county local road

 

system of each county bears to the total mileage in all of the

 

county local road systems population of the this state.

 

     (b) Thirty-five percent of the amount in the same proportion

 

that the total population outside of incorporated municipalities in

 

each county bears to the total population outside of incorporated

 

municipalities in all of the counties of the this state, according

 

to the most recent statewide federal census as certified at the

 

beginning of the state fiscal year.

 

     (8) Money deposited in , or becoming a part of the county road

 

funds of a board of county road commissioners shall be expended

 

first for the payment of principal and interest on the bonds, for

 

the payment of contractual contributions pledged for the payment of

 

bonds, for debt service requirements for the payment of contractual

 

contributions pledged for the payment of bonds, and for debt

 


service requirements for the payment of notes and loans in the

 

following order of priority:

 

     (a) For the payment of contributions required to be made by a

 

board of county road commissioners under a contract entered into

 

under 1941 PA 205, MCL 252.51 to 252.64, that have been pledged for

 

the payment of the principal and interest on bonds issued under

 

that act, or for the payment of total debt service requirements

 

upon notes issued by a board of county road commissioners under

 

1943 PA 143, MCL 141.251 to 141.254.

 

     (b) For the payment of principal and interest upon bonds

 

issued under section 18c, and the payment of contributions of a

 

board of county road commissioners made pursuant to contracts

 

entered into under section 18d that are pledged to the payment of

 

principal and interest on bonds issued after June 30, 1957, under

 

the authorization of section 18c and contracts executed pursuant to

 

its provisions.under section 18c.

 

     (c) For the payment of principal and interest upon loans

 

received pursuant to under section 11(5), to the extent other funds

 

have money has not been made available for that payment.

 

     (9) Beginning November 1, 2008, no No more than 50% per year

 

of the amount returned to a county for use on the county primary

 

road system may be expended, with or without matching, on the

 

county local road system of that county. Except as otherwise

 

provided in this subsection, beginning September 30, 2010, no more

 

than 30% per year of the amount returned to a county for use on the

 

county primary road system may be expended, with or without

 

matching, on the county local road system of that county. An

 


additional amount, not to exceed 20% per year of the amount

 

returned to a county for use on the county primary road system, may

 

be expended on the county local road system of that county if there

 

is an emergency or if the county road commission determines that an

 

additional 20% may be expended on the county local road system. The

 

county road commission may attach any conditions to its

 

determination if the determination is for nonemergency purposes,

 

including, but not limited to, a requirement that the additional

 

20% expended on the county local road system only be used to

 

supplement funds money from other sources. No more than 15% per

 

year of the amount returned to a county for expenditure on the

 

county local road system may be used, with or without matching, on

 

the county primary road system of that county, and not to exceed an

 

additional 15% per year of the amount returned to a county for

 

expenditure on the county local road system, may, in case of an

 

emergency or with the approval of the county road commission, be

 

expended, with or without matching, on the county primary road

 

system of that county. An amount returned to a county for and on

 

account of county local roads , under this section , that is in

 

excess of the total amount paid into the county treasury each year

 

by all of the townships of that county for and on account of the

 

county local roads pursuant to under section 14(6) may be

 

transferred to and expended on the county primary road system of

 

that county.

 

     (10) Not less than 20% per year of the funds money returned to

 

a county by this section shall be expended for snow and ice

 

removal, the construction or reconstruction of a new highway or

 


existing highway, and the acquisition of a necessary right of way

 

for those highways, and work incidental to those highways, or for

 

the servicing of bonds issued by the county for these purposes.

 

Surplus funds money may be expended for the development,

 

construction, or repair of an off-street parking facility.

 

     (11) Not more than 5% per year of the funds money returned to

 

a county for the county primary road system and the county local

 

road system shall be expended for the maintenance, improvement, or

 

acquisition of appurtenant roadside parks and motor parkways.

 

     (12) Funds Money returned to a county shall be expended by the

 

county road commission for the purposes provided in this section

 

and shall be deposited by the county treasurer in a designated

 

county depository, in a separate account to the credit of the

 

county road fund, and shall be paid out only upon the order of the

 

county road commission, and interest accruing on the money shall

 

become a part of, and be deposited with the county road fund.

 

     (13) In a county to which funds are money is returned under

 

this section, the function of the county road commission shall be

 

is limited to the formation of policy and the performance of the

 

official duties imposed by law and delegated by the county board of

 

commissioners. A member of the county road commission shall not be

 

employed individually in any other capacity for other duties with

 

the county road commission.

 

     (14) A county road commission may enter into an agreement with

 

a county road commission of an adjacent county and with a city or

 

village to perform work on a highway, road, or street, and with the

 

department with respect to a state trunk line highway and

 


connecting links of the state trunk line highway within the limits

 

of the county or adjacent to the county. The agreement may provide

 

for the performance by each contracting party of the work

 

contemplated by the contract including engineering services and the

 

acquisition of rights of way in connection with the work

 

contemplated, by purchase or condemnation, by any of the

 

contracting parties in its own name and the agreement may provide

 

for joint participation in the costs.

 

     (15) Money distributed from the Michigan transportation fund

 

may be expended for construction purposes on county local roads

 

only to the extent matched by money from other sources. However,

 

Michigan transportation funds may be expended for the construction

 

of bridges on the county local roads in an amount not to exceed 75%

 

of the cost of the construction of local road bridges.

 

     (16) Notwithstanding any other provision of this act, at least

 

90% of the state revenue returned annually to the county road

 

commission from the Michigan transportation fund less the amounts

 

described in subdivisions (a) to (e) shall be expended annually by

 

the county road commission for the preservation of highways, roads,

 

streets, and bridges, and for the payment of contractual

 

contributions pledged for the payment of bonds or portions of

 

bonds, debt service requirements for the payment of bonds or

 

portions of bonds, and debt service requirements for the payment of

 

notes and loans or portions of notes and loans issued or received

 

after July 1, 1983, for the purpose of providing funds money for

 

the preservation of highways, roads, streets, and bridges. If an

 

appropriate certificate is filed under subsection (18) but only to

 


the extent necessary, this subsection does not prohibit the use of

 

any amount of state revenue returned annually to the county road

 

commissions for the payment of contractual contributions pledged

 

for the payment of bonds, for debt service requirements for the

 

payment of bonds, and for debt service requirements for the payment

 

of notes or loans, whenever issued or received, as specified under

 

subsection (8). The amounts that are deducted from the state

 

revenue returned to a county road commission from the Michigan

 

transportation fund, for the purpose of the calculation required by

 

this subsection are as follows:

 

     (a) Amounts expended for the purposes described in subsection

 

(8) for bonds, notes, loans, or other obligations issued or

 

received before July 2, 1983.

 

     (b) Amounts expended for the administrative costs of the

 

county road commission.

 

     (c) Amounts expended for capital outlay projects for equipment

 

and buildings, and for the payment of contractual contributions

 

pledged for the payment of bonds, for debt service requirements for

 

the payment of bonds, and for debt service requirements for the

 

payment of notes and loans issued or received after July 1, 1983,

 

for the purpose of providing funds money for capital outlay

 

projects for equipment and buildings.

 

     (d) Amounts expended for projects vital to the economy of the

 

local area or the safety of the public in the local area. Before

 

these amounts can be deducted, the governing body over the county

 

road commission or the county road commission, as applicable, shall

 

pass a resolution approving these projects. This resolution shall

 


state which projects will be funded and the cost of each project. A

 

copy of each approved resolution shall be forwarded immediately to

 

the department.

 

     (e) Amounts expended in urban areas as determined pursuant to

 

section 12b.

 

     (17) As used in this subsection, "urban routes" means those

 

portions of 2-lane county primary roads within an urban area that

 

have average daily traffic in excess of 15,000. Notwithstanding any

 

other provision of this act, except as provided in this subsection,

 

a county road commission shall annually expend at least 90% of the

 

federal revenue distributed to the county road commission for

 

highways, roads, streets, and bridges, less the amount expended on

 

urban routes for purposes other than preservation and the amount

 

expended for hard-surfacing of gravel roads on the federal-aid

 

system, on the preservation of highways, roads, streets, and

 

bridges. A county road commission may expend in 1 year less than

 

90% of the federal revenue distributed to the county road

 

commission for highways, roads, streets, and bridges, less the

 

amount expended on urban routes for purposes other than

 

preservation and the amount expended for hard-surfacing of gravel

 

roads on the federal-aid system, on the preservation of highways,

 

roads, streets, and bridges, if that year is part of a 3-year

 

period in which at least 90% of the total federal revenue

 

distributed in the 3-year period to the county road commission for

 

highways, roads, streets, and bridges, less the amount expended on

 

urban routes for purposes other than preservation purposes and the

 

amount expended for hard-surfacing of gravel roads on the federal-

 


aid system, is expended on the preservation of highways, roads,

 

streets, and bridges. If a county road commission expends in 1 year

 

less than 90% of the federal revenue distributed to the county road

 

commission for highways, roads, streets, and bridges, less the

 

amount expended on urban routes for purposes other than

 

preservation and the amount expended for hard-surfacing of gravel

 

roads on the federal-aid system, on the preservation of highways,

 

roads, streets, and bridges and that year is not a part of a 3-year

 

period in which at least 90% of the total federal revenue

 

distributed in the 3-year period to the county road commission for

 

highways, roads, streets, and bridges, less the amount expended on

 

urban routes for purposes other than preservation and the amount

 

expended for hard-surfacing of gravel roads on the federal-aid

 

system, is expended on the preservation of highways, roads,

 

streets, and bridges, the county road commission shall expend in

 

each year subsequent to the 3-year period 100%, or less in 1 year

 

if sufficient for the purposes of this subsection, of the federal

 

revenue distributed to the county road commission for highways,

 

roads, streets, and bridges, less the amount expended on urban

 

routes for purposes other than preservation and the amount expended

 

for hard-surfacing of gravel roads on the federal-aid system, on

 

the preservation of highways, roads, streets, and bridges until the

 

average percentage spent on the preservation of highways, roads,

 

streets, and bridges in the 3-year period and the subsequent years,

 

less the amount expended on urban routes for purposes other than

 

preservation and the amount expended for hard-surfacing of gravel

 

roads on the federal-aid system, is at least 90%. A year may be

 


included in only one 3-year period for the purposes of this

 

subsection. The requirements of this subsection shall be waived if

 

compliance would cause the county road commission to be ineligible

 

for federal revenue under federal law, but only to the extent

 

necessary to make the county road commission eligible for that

 

revenue under federal law. For the purpose of the calculations

 

required by this subsection, the amount expended on urban routes by

 

a county road commission for purposes other than preservation and

 

the amount expended for hard-surfacing of gravel roads on the

 

federal-aid system shall be deducted from the total federal revenue

 

distributed to the use of the county road commission.

 

     (18) A county road commission shall certify to the department

 

on or before the issuance of any bonds or notes issued after July

 

1, 1983, pursuant to under 1943 PA 143, MCL 141.251 to 141.254,

 

1941 PA 205, MCL 252.51 to 252.64, or section 18c or 18d, for

 

purposes other than the preservation of highways, roads, streets,

 

and bridges and purposes other than the purposes specified in

 

subsection (16)(c) that its average annual debt service

 

requirements for all bonds and notes or portions of bonds and notes

 

issued after July 1, 1983, for purposes other than the preservation

 

of highways, roads, streets, and bridges and other than for the

 

purposes specified in subsection (16)(c), including the bond or

 

note to be issued does not exceed 10% of the funds money returned

 

to the county road commission pursuant to under this act, less the

 

amounts specified in subsection (16)(a), (b), and (c) during the

 

last completed fiscal year of the county road commission. If the

 

purpose for which the bonds or notes are issued is changed after

 


the issuance of the notes or bonds, the change shall be made in a

 

manner that maintains compliance with the certification required by

 

this subsection, as of the date the certificate was originally

 

issued, but no such change shall invalidate or otherwise affect the

 

bonds or notes with respect to which the certificate was issued or

 

the obligation to pay debt service on the bonds or notes. A

 

certification under this subsection is conclusive as to the matters

 

stated in the certification for purposes of the validity of bonds

 

and notes.

 

     (19) In each charter county to which funds are money is

 

returned under this section, the responsibility for road

 

improvement, preservation, and traffic operation work, and the

 

development, construction, or repair of off-road parking facilities

 

and construction or repair of road lighting shall be coordinated by

 

a single administrator to be designated by the county executive who

 

shall be responsible for and shall represent the charter county in

 

transactions with the department pursuant to under this act.

 

     (20) Not more than 10% per year of all of the funds money

 

received by and returned to a county from any source for the

 

purposes of this section may be expended for administrative

 

expenses. A county that expends more than 10% for administrative

 

expenses in a year is subject to section 14(5) unless a waiver is

 

granted by the department of treasury. As used in this subsection,

 

"administrative expenses" means those expenses that are not

 

assigned including, but not limited to, specific road construction

 

or preservation projects and are often referred to as general or

 

supportive services. Administrative expenses do 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 preservation activities.

 

     (21) In addition to the financial compliance audits required

 

by law, the department may conduct performance audits and make

 

investigations of the disposition of all state funds money received

 

by county road commissions, county boards of commissioners, or any

 

other county governmental agency acting as the county road

 

authority, 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 shall

 

develop performance audit procedures and reporting requirements

 

sufficient to determine whether funds money expended under this

 

section were was expended in compliance with this act by September

 

1, 2012 and shall report to the transportation committees of the

 

senate and house of representatives no later than October 1, 2012

 

on the additional audit procedures and reporting requirements. The

 

department shall provide notice to the county road commission,

 

county board of commissioners, or any other county governmental

 

agency acting as the county road authority, as applicable, of the

 

standards to be used for audits performed under this subsection.

 

The notice shall be provided 6 months prior to the fiscal year in

 

which the audit is conducted. The department shall notify the

 

county road commission, county board of commissioners, or any other

 

county governmental agency acting as the county road authority of

 


any subsequent changes to the standards. County road commissions,

 

county boards of commissioners, or any other county governmental

 

agencies acting as county road authorities, as applicable, shall

 

make available to the department the pertinent records for the

 

audit. Performance audits may be performed at the discretion of the

 

department or upon receiving a request from the speaker of the

 

house of representatives or the senate majority leader.

 

     Sec. 12b. (1) The amounts returned to the counties for the

 

county urban system as provided in section 12(4) shall be

 

distributed on the basis of the county road mileage contained

 

population within the urban area boundaries as established pursuant

 

to under this section.

 

     (2) On January 3, 1973, the department of transportation shall

 

establish urban area boundaries which that shall be reviewed and

 

corrected periodically and which that shall be in conformance with

 

conform to the federal-aid urban area definition as published by

 

the federal highway administration of the United States department

 

of transportation and in effect July 1, 1971.

 

     (3) The amounts returned to the county road commissions

 

qualifying under this section shall be in the same proportion that

 

the total population of the urban local road mileage, plus 6 times

 

the urban primary road mileage of each county area bears to the

 

total mileage in all the urban local road systems of the population

 

of this state. , plus 6 times the total mileage in all the urban

 

primary road systems of the state.

 

     (4) All amounts returned to the county road commissions on the

 

basis of the population of urban primary road mileage of areas in

 


each county are for use on the county primary road system and are

 

subject to the same provisions of this act as other amounts for

 

expenditure on the county primary road system.

 

     (5) All amounts returned to the county road commissions on the

 

basis of the population of urban local road mileage of areas in

 

each county are for expenditure on the county local road system and

 

are subject to the same provisions of this act as other amounts for

 

expenditure on the county local road systems.

 

     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. The amount received by a newly

 

incorporated municipality shall be in place of any other direct

 

distribution of funds money from the Michigan transportation fund.

 

The population of a newly incorporated municipality as determined

 

under this section shall be added to the total population of all

 

incorporated cities and villages in the this state in computing the

 

amounts to be returned under this section to each municipality in

 

the state. Major street mileage , and local street mileage , and

 

equivalent major mileage, if applicable, shall be determined by the

 

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, the department shall withhold 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 department shall use the amount

 

withheld shall be used to partially reimburse cities and villages

 

located in counties that are eligible for snow removal funds

 

pursuant to money under section 12a and that have costs for winter

 

maintenance on major and local streets that are greater than the

 

statewide average. The department shall make distributions shall be

 

made annually during February, and the distributions 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 is

 

ineligible for the winter maintenance payment that is to be based

 

on that street financial report. The department shall determine the

 

average municipal winter maintenance factor annually 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 money 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 under 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. 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, that 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 under 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

 

department.

 

     (c) For the payment of principal and interest upon loans

 

received pursuant to under section 11(5), to the extent other funds

 


have money has 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 that 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 money

 

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 money may be expended for the

 

development, construction, or repair of off-street parking

 

facilities, the construction or repair of street lighting, and

 

transfer to the local street system under subsection (6).

 

     (e) For capital outlay projects for equipment and buildings,

 

contributions pledged for the payment of loans and for the payment

 

of contractual debt service requirements for the payment of bonds

 

for the purpose of providing funds money for capital outlay

 

projects for equipment and buildings necessary to the development

 

and maintenance of the road system so long as amounts allocated

 

under this subdivision are used for transportation purposes.

 

     (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, 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 the portion of the city's or village's

 

general obligation bonds that 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 this 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 under 1952 PA

 

175, MCL 247.701 to 247.707, and after that payment, the payment of

 

debt service on loans received under section 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 this state for local

 

street system support. Funds Money 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 this state under the state constitution of 1963 and statutes

 

of the this state, from funds money 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 this state, from

 

special assessments, or from any other source.

 

     (6) 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 money may be transferred

 

for preservation of the local street system. Major street funds

 

money transferred for use on the local street system shall not be

 

used for construction but may be used for preservation. A city or

 

village shall not transfer more than 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. The department may provide for pilot projects that would

 


allow a city or village that has adopted an asset management plan

 

under subsection (6) to combine their local and major street funds

 

money into 1 street fund and to submit a single report to the

 

department on the expenditure of funds money on the local and major

 

street systems.

 

     (8) Not more than 10% per year of all of the funds money

 

returned to a city or village from any source for the purposes of

 

this section may be expended for administrative expenses. A city or

 

village that expends more than 10% for administrative expenses in a

 

year is subject to section 14(5).

 

     (9) In each city and village to which funds are money is

 

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

 

department pursuant to this act.

 

     (10) 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 any of the contracting parties to perform the work

 

contemplated by the contracts including services and acquisition of

 

rights of way, by purchase or condemnation in its own name. The

 


agreement may provide for joint participation in the costs if

 

appropriate.

 

     (11) Interest earned on funds money returned to a city or a

 

village for purposes provided in this section shall be credited to

 

the appropriate street fund.

 

     (12) In addition to the financial compliance audits required

 

by law, the department may conduct performance audits and make

 

investigations of the disposition of all state funds money 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 shall develop all performance audit procedures and

 

reporting requirements sufficient to determine whether funds money

 

expended under this section were was expended in compliance with

 

this act by September 1, 2012 and shall report to the

 

transportation committees of the senate and house of

 

representatives no later than October 1, 2012 on the additional

 

audit procedures and reporting requirements. The audit procedures

 

shall include a review of the road fund balance of the city or

 

village. The cities and villages shall report their road fund

 

balances by fund balance component. The department shall assist

 

cities and villages to ensure that road fund balances are

 

consistently classified and are in compliance with the audit and

 

reporting requirements of this section. The department 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 the pertinent

 

records for the audit. Performance audits may be performed at the

 

discretion of the department or upon receiving a request from the

 

speaker of the house of representatives or the senate majority

 

leader.

 

     (13) As used in this section:

 

     (a) "Administrative expenses" means expenses that are not

 

assigned under this section, including, but not limited to,

 

specific road construction or maintenance projects, and are often

 

referred to as general or supportive services. Administrative

 

expenses do not include net equipment expense, net capital outlay,

 

debt service principal and interest, or payments to other state or

 

local offices that are assigned, but not limited to, specific road

 

construction projects or maintenance activities.

 

     (b) "Equivalent major mileage" means the sum of 2 times the

 

state trunk line mileage certified by the 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:

 

     (i) 1.0 for cities and villages of 2,000 or less population.

 

     (ii) 1.1 for cities and villages from 2,001 to 10,000

 

population.

 

     (iii) 1.2 for cities and villages from 10,001 to 20,000

 

population.

 


     (iv) 1.3 for cities and villages from 20,001 to 30,000

 

population.

 

     (v) 1.4 for cities and villages from 30,001 to 40,000

 

population.

 

     (vi) 1.5 for cities and villages from 40,001 to 50,000

 

population.

 

     (vii) 1.6 for cities and villages from 50,001 to 65,000

 

population.

 

     (viii) 1.7 for cities and villages from 65,001 to 80,000

 

population.

 

     (ix) 1.8 for cities and villages from 80,001 to 95,000

 

population.

 

     (x) 1.9 for cities and villages from 95,001 to 160,000

 

population.

 

     (xi) 2.0 for cities and villages from 160,001 to 320,000

 

population.

 

     (xii) For cities over 320,000 population, a factor of 2.1

 

increased successively by 0.1 for each 160,000 population increment

 

over 320,000.

 

     (b) (c) "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 money

 

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

 

under section 6 of the home rule city act, 1909 PA 279, MCL 117.6.

 

     Sec. 14. (1) Each county road commission and city and village

 

of the state shall prepare biennial primary road and major street

 

programs, based on long-range plans, and shall make the programs

 

available for review by the public.

 

     (2) Separate Cities, villages, and county road commissions

 

shall keep separate accounts shall be kept by cities, villages, and

 

county road commissions of all money returned from the Michigan

 

transportation fund. This subsection shall not be construed to

 

prevent the combining of accounts on which separate bookkeeping

 

records are kept into a single deposit account.

 

     (3) All county road commissions and cities and villages shall

 

keep accurate and uniform records on all road and street work and

 

funds, money, and shall annually report to the state transportation

 

department at the time, in the manner, and on forms prescribed by

 

the state transportation department the mileage of estimated

 

traffic volume on each road system under their jurisdiction and the

 

receipts and disbursements of road and street funds. money. In the

 

annual report, each county road commission shall report on its

 

compliance in the preceding year with the requirements of section

 

12(16) and (17). The report shall also specify, with respect to

 

section 12(17), the total dollar amount expended for other than

 

maintenance purposes which would not have been permissible without

 

the deduction of certain urban route expenditures as permitted

 


under section 12(17). The report shall also specify the

 

justification for a waiver of the requirement of section 12(17), if

 

that requirement was waived.

 

     (4) The expenditure of All county road commissions, cities,

 

and villages may expend adequate amounts , by county road

 

commissions and the cities and villages, from funds money returned

 

by under this act , to cover the cost of administration,

 

engineering, and record keeping, is hereby authorized, and

 

expenditures for those purposes shall be reported separately by

 

each county road commission, city, and village to the state

 

transportation department.

 

     (5) All distributions and returns of funds provided for in

 

money under this act shall be withheld from the state

 

transportation department, eligible authorities, county road

 

commissions, cities, villages, or other eligible governmental

 

agencies for failure to comply with any of the requirements of this

 

act, and the withholding shall continue for the period of

 

noncompliance.

 

     (6) Money distributed to county road commissions for the

 

maintenance and improvement of county local road systems pursuant

 

to under section 12 represents the total responsibility of the this

 

state for local county road support. Additional funds money

 

required for the support of county local road systems may be

 

supplied from other money returned to the township governments by

 

the this state under the state constitution of 1963 and statutes of

 

the this state, or from funds money that can be raised by taxation

 

in the townships or counties for road purposes within the

 


limitations of the state constitution of 1963 and statutes of the

 

this state.

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