SENATE BILL NO. 465

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; to investigate and study the tolling of roads, streets, highways, or bridges; and to repeal acts and parts of acts,"

by amending section 10o (MCL 247.660o), as amended by 2000 PA 188.

the people of the state of michigan enact:

Sec. 10o. (1) Twenty-three to twenty-seven percent of the DOT-FHWA highway research, planning, and construction federal funds appropriated to this state from the federal government for road and bridge construction shall must be allocated to programs administered by local jurisdictions after deduction of the following:

(a) Funds that are specifically allocated at the federal level to the state or local jurisdictions.

(b) Funds allocated by the department to the state and to local jurisdictions through a competitive process.

(c) Funds used by this state to purchase local federal funds that were available to be purchased by the department as part of the local federal aid buyout program described in subsection (5).

(2) Federal aid excluded from the calculation of funding allocated to programs administered by local jurisdictions in subsection (1) includes, but is not limited to, congestion mitigation and air quality funds, federal bridge funds, transportation enhancement funds, funds distributed at the discretion of the United States secretary Secretary of transportation, Transportation, and congressionally designated funds.

(3) The funds shall must be distributed to eligible local road agencies for transportation purposes in a manner consistent with state and federal law.

(4) It is the intent of the legislature that federal aid to highways allocated to local jurisdictions in subsection (1) be distributed in a manner that produces a 25% average allocation of applicable funds to programs for local jurisdictions in each fiscal year through the fiscal year ending September 30, 2000. Beginning in the fiscal year ending September 30, 1999, the average allocation of applicable federal aid to highway funds to programs for local jurisdictions shall must be the average of the amount distributed to local jurisdictions under subsection (1) and similarly calculated distributions in each succeeding fiscal year. The average allocation percentage described in this subsection shall must be adjusted to reflect any voluntary agreements made by the department with local jurisdictions regarding the state buyout of local federal aid.

(5) As part of the local federal aid buyout program operated by the department, the department shall pay local road agencies the amounts identified in the local road agency's 3- or 5-year local transportation improvement plan for each year in which the local road agency plans to participate in the local federal aid buyout program with the department. The department's local federal aid buyout program must also meet all of the following requirements:

(a) As part of the local federal aid buyout program operated by the department, the department shall do all of the following:

(i) Make available to local road agencies up to 93% of the eligible local federal funds allocated to local road agencies for the Surface Transportation Block Grant program funding. The department shall pay local road agencies the amount of federal funds, identified in the approved state transportation improvement plan, as determined by the local road agency, not to exceed 100% of the total local road agency eligible funds.

(ii) Require road projects funded by the local federal aid buyout program to be rural task force-approved or metropolitan planning organization-approved projects.

(iii) Require that contracts between local road agencies and contractors, for road projects funded by the local federal aid buyout program, contain a federal wage and benefits schedule consistent with, and incorporating the requirements of, section IV of Form FHWA-1273, revised May 1, 2012, or any successor form, and provide that covered workers are third-party beneficiaries of these contract requirements.

(b) The local road agency shall notify the department, its rural task force, and its metropolitan planning organization before the fiscal year that projects the local road agency has determined will be included in the local federal aid buyout program for the next fiscal year. The local road agency shall complete the identified projects with the federal buyout funds. The local road agency shall spend any remaining federal buyout funds on federal aid eligible roads for activities and improvements, not including routine maintenance, or use the remaining federal buyout funds as additional funds for any federal aid project undertaken on roads under its jurisdiction. A local road agency shall complete an eligible activity or improvement with the federal buyout funds within 3 years after receiving the funds.

(c) The completed road projects accomplished with the federal buyout funds must be documented with the transportation asset management council investment reporting tool and reported in the fiscal year that the project is completed.

(d) If the identified projects cannot be completed within the required 3-year time frame, the local road agency shall notify the department and its rural task force of the limitation and identify an alternate federal aid eligible road project where a similar improvement will be accomplished within the original 3-year time frame.

(6) If the department is unable to fulfill its federal aid matching obligation to obtain all available federal funds for a fiscal year, the department may reduce the local federal aid buyout program described in this section for that fiscal year. However, the department may only reduce the amount of the local federal aid buyout funds if that reduction is necessary to ensure that the department can perform routine maintenance, operate safety programs, and carry out other administrative functions. The department shall make this determination before the beginning of the fiscal year and shall notify all local road agencies that have submitted applications for the local federal aid buyout program for that fiscal year before the beginning of the fiscal year. If the department reduces the local federal aid buyout program under this subsection, the department shall also submit a detailed letter of explanation to the chairs of the senate and house of representatives transportation committees, chairs of the senate and house transportation appropriations subcommittees, the senate majority leader, and the speaker of the house of representatives explaining why the department is unable to fully fund its federal aid matching obligation.

Enacting section 1. This amendatory act does not take effect unless Senate Bill No. 466 of the 101st Legislature is enacted into law.