HOUSE BILL No. 4545 March 28, 2001, Introduced by Reps. Switalski, Adamini, Raczkowski, Jacobs, Gieleghem, Rivet, Jamnick, Woodward, Garza, Kolb, Bovin, Schermesser, Scranton and Lockwood and referred to the Committee on Transportation. A bill to amend 1951 PA 51, entitled "An act to provide for the classification of all public roads, streets, and highways in this state, and for the revision of that classification and for additions to and deletions from each clas- sification; 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 trans- portation 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 pur- poses; to set up and establish the Michigan truck safety commis- sion; to establish certain standards for road contracts for cer- tain businesses; to provide for the continuing review of trans- portation needs within the state; to authorize the state trans- portation 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 appropria- tions and tax levies by counties and townships for county roads; to authorize contributions by townships for county roads; to pro- vide for the establishment and administration of the state trunk line fund, critical bridge fund, comprehensive transportation fund, and certain other funds; to provide for the deposits in the state trunk line fund, critical bridge fund, comprehensive 03483'01 MRM 2 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 submis- sion 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 offi- cials; to provide for the making of loans for transportation pur- poses 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 1c, 11, 12, and 13 (MCL 247.651c, 247.661, 247.662, and 247.663), section 1c as amended by 1982 PA 438, sec- tion 11 as amended by 2000 PA 188, section 12 as amended by 1997 PA 79, and section 13 as amended by 1999 PA 54. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 1c. The state transportation department shall bear the 2 cost of opening, widening, and improving, including construction 3 and reconstruction, in accordance with standards and specifica- 4 tions of the department, all state trunk line highways, subject 5 to all of the following provisions: 6 (a) Incorporated cities and villages shall participate with 7 the department in the cost of opening, widening, and improving, 8 including construction and reconstruction of state trunk line 9 highways within cities and villages to which may be added, 10 subject to the approval of the state transportation commission, 11 streets that are connecting links of trunk line highways or 12 streets as are made connecting links of trunk line highways, 13 according to the following schedule subject to the definition of 14 population as provided in section 13: 03483'01 3 1 (i) In cities and villages having a population of 50,000 or 2 more, 12.5% of the cost shall be borne by the city or village, 3 and 87.5% by the state transportation department. 4 (ii) In cities and villages having a population of 40,000 or 5 more and less than 50,000, 11.25% of the cost shall be borne by 6 the city or village, and 88.75% by the state transportation 7 department. 8 (iii) In cities and villages having a population of 25,000 9 or more and less than 40,000, 8.75% of the cost shall be borne by 10 the city or village, and 91.25% by the state transportation 11 department. 12 (iv) In cities and villages having a population of less than 13 25,000, the state transportation department shall bear the entire 14 cost. 15 (b) As used in this act, "opening, widening, and improving, 16 including construction and reconstruction, of state trunk line 17 highways" includes, but is not limited to, the cost of right of 18 way; the cost of removal and replacement of TREES IF TREES ARE 19 REMOVED AS PART OF A PROJECT, sidewalks, street lighting, curb- 20 ing, where removal and replacement is made necessary by construc- 21 tion or reconstruction of a trunk line highway; and the cost of 22 bridges and structures, including that part of the cost of grade 23 separation structures not paid by the railroad companies. 24 (c) In a city or village, the width of a state trunk line 25 highway shall be the width required to serve anticipated future 26 traffic needs for a 20-year period as determined by a department 27 transportation survey, which width, except as prescribed by this 03483'01 4 1 subdivision, shall not be less than the currently accepted 2 standards prescribed for a 4-lane highway; the width as may be 3 built on the same trunk line route immediately beyond and adja- 4 cent to either legal boundary of the city or village; or on trunk 5 lines eligible for federal highway funds, a width as may be pre- 6 scribed by the federal government, whichever width is greater. 7 However, the department and the governing body of a city or vil- 8 lage by mutual agreement may determine that the width of a state 9 trunk line highway shall be less than the width otherwise pre- 10 scribed by this subdivision. 11 (d) If a city or villageshall desireDESIRES to widen a 12 state trunk line highway for local purposes beyond the width pre- 13 scribed in subdivision (c), the entire cost of the extra width, 14 less the federal highway funds which may be allocated to the por- 15 tion of the project by the department, shall be borne by the city 16 or village. 17 (e) The state transportation commission and the boards of 18 county road commissioners may enter into agreements with town- 19 ships or private persons for the improvement or widening of state 20 trunk line highways or county roads. The state transportation 21 commission and the boards of county road commissioners may 22 require full or partial participation in the cost of the improve- 23 ment or widening by the requesting party as considered 24 appropriate. 25 Sec. 11. (1) A fund to be known as the state trunk line 26 fund is established and shall be set up and maintained in the 27 state treasury as a separate fund. The money deposited in the 03483'01 5 1 state trunk line fund is appropriated to the state transportation 2 department for the following purposes in the following order of 3 priority: 4 (a) For the payment, but only from money restricted as to 5 use by section 9 of article IX of the state constitution of 1963, 6 of bonds, notes, or other obligations in the following order of 7 priority: 8 (i) For the payment of contributions required to be made by 9 the state highway commission or the state transportation commis- 10 sion under contracts entered into before July 18, 1979, under 11 1941 PA 205, MCL 252.51 to 252.64, which contributions have been 12 pledged before July 18, 1979, for the payment of the principal 13 and interest on bonds issued under 1941 PA 205, MCL 252.51 to 14 252.64, for the payment of which a sufficient sum is irrevocably 15 appropriated. 16 (ii) For the payment of the principal and interest upon 17 bonds designated "State of Michigan, State Highway Commissioner, 18 Highway Construction Bonds, Series I", dated September 1, 1956, 19 in the aggregate principal amount of $25,000,000.00, issued 20pursuant toUNDER former 1955 PA 87 and the resolution of the 21 state administrative board adopted August 6, 1956, for the pay- 22 ment of which a sufficient sum is irrevocably appropriated. 23 (iii) For the payment of the principal and interest on bonds 24 issued under section 18b for transportation purposes other than 25 comprehensive transportation purposes as defined by law and the 26 payment of contributions of the state highway commission or state 27 transportation commission to be made pursuant to contracts 03483'01 6 1 entered into under section 18d, which contributions are pledged 2 to the payment of principal and interest on bonds issued under 3 the authorization of section 18d and contracts executedpursuant4toUNDER that section. A sufficient portion of the fund is 5 irrevocably appropriated to pay, when due, the principal and 6 interest on bonds or notes issued under section 18b for purposes 7 other than comprehensive transportation purposes as defined by 8 law, and to pay the annual contributions of the state highway 9 commission and the state transportation commission as are pledged 10 for the payment of bonds issuedpursuant toUNDER contracts 11 authorized by section 18d. 12 (b) For the transfer of funds appropriatedpursuant to13 UNDER section 10(1)(g) to the transportation economic development 14 fund, but the transfer shall be reduced each fiscal year by the 15 amount of debt service to be paid in that year from the state 16 trunk line fund for bonds, notes, or other obligations issued to 17 fund projects of the transportation economic development fund, 18 which amount shall be certified by the department. 19 (c) For the transfer of funds appropriatedpursuant to20 UNDER section 10(1)(a) to the railroad grade crossing account in 21 the state trunk line fund for expenditure to meet the cost, in 22 whole or in part, of providing for the improvement, installation, 23 and retirement of new or existing safety devices or other rail 24 grade crossing improvements at rail grade crossings on public 25 roads and streets under the jurisdiction of the state, counties, 26 or cities and villages. Projects shall be selected for funding 27 in accordance with the following: 03483'01 7 1 (i) Not more than 50% or less than 30% of these funds and 2 matched federal funds shall be expended for state trunk line 3 projects. 4 (ii) In prioritizing projects for these funds, in whole or 5 in part, the department shall consider train and vehicular traf- 6 fic volumes, accident history, traffic control device improvement 7 needs, and the availability of funding. 8 (iii) Consistent with the other requirements for these 9 funds, the first priority for funds depositedpursuant toUNDER 10 this subdivision for rail grade crossing improvements and retire- 11 ment shall be to match federal funds from the railroad-highway 12 grade crossing improvement program or other comparable federal 13 programs. 14 (iv) If federal funds from the railroad-highway grade cross- 15 ing improvement program or other comparable federal programs have 16 been exhausted, funds depositedpursuant toUNDER this subdivi- 17 sion shall be used to fund 100% of grade crossing projects that 18 receive the highest priority of unfunded projectspursuant to19 UNDER criteria established by the department. 20 (v) State railroad grade crossing funds shall not be used, 21 either as 100% of project cost or to match federal 22 railroad-highway grade crossing improvement funds, for a crossing 23 that is determined by the departmentpursuant toUNDER the cri- 24 teria established by the department to be a lower priority than 25 other projects that have not yet been funded. However, if suffi- 26 cient funds are available, these state railroad grade crossing 27 account funds may be used for not more than 50% of a project's 03483'01 8 1 cost for a crossing that is determined by the department 2pursuant toUNDER the criteria established by the department to 3 be a lower priority if the balance of not less than 50% of the 4 project's cost is provided by the road authority, railroad, or 5 other sources. 6 (vi) The type of railroad grade crossing improvement, 7 installation, relocation, or retirement of grade crossing sur- 8 faces, active and passive traffic control devices, pavement mark- 9 ing, or other related work shall be eligible for these railroad 10 grade crossing account funds in the same manner as the project 11 type eligibility provided by the federal funds from the 12 railroad-highway grade crossing improvement program, except for 13 the following: 14 (A) For new railroad crossings, these funds may be used for 15 the crossing surface, active and passive traffic control devices, 16 pavement marking, and other improvements necessitated by the new 17 crossing. 18 (B) These funds may be used for the modification, reloca- 19 tion, or modernization of railroad grade crossing facilities 20 necessitated by roadway improvement projects. 21 (C) If the department and the road authority with jurisdic- 22 tion over a public road or street crossing formally agree that 23 the grade crossing should be eliminated by permanent closing of 24 the public road or street, the road authority making the closing 25 shall receive $5,000.00 from the railroad grade crossing 26 account. In addition, any connecting road improvements 27 necessitated by the grade crossing closure are reimbursable on an 03483'01 9 1 actual cost basis not to exceed $10,000.00 per crossing closed. 2 The physical removal of the crossing, roadway within railroad 3 rights of way and street termination treatment will be negotiated 4 between the road authority and railroad company. The funds pro- 5 vided to the road authority as a result of the crossing closure 6 will be credited to its account representing the same road or 7 street system on which the crossing is located. 8 (d) For the total operating expenses of the state trunk line 9 fund for each fiscal year as appropriated by the legislature. 10 (e) For the maintenance of state trunk line highways and 11 bridges. 12 (f) For the opening, widening, improving, construction, and 13 reconstruction of state trunk line highways and bridges, includ- 14 ing the acquisition of necessary rights of way and the work inci- 15 dental to that opening, widening, improving, construction, or 16 reconstruction. Those sums in the state trunk line fund not oth- 17 erwise appropriated, distributed, determined, or set aside by law 18 shall be used for the construction or reconstruction of the 19 national system of interstate and defense highways, referred to 20 in this act as "the interstate highway system" to the extent nec- 21 essary to match federal aid funds as the federal aid funds become 22 available for that purpose; and, for the construction and recon- 23 struction of the state trunk line system. MONEY FROM THE STATE 24 TRUNK LINE FUND SHALL NOT BE EXPENDED UNDER THIS SUBDIVISION 25 UNLESS EACH TREE THAT IS REMOVED, DESTROYED, OR BOTH IN THE OPEN- 26 ING, WIDENING, IMPROVING, CONSTRUCTION, AND RECONSTRUCTION OF 27 STATE HIGHWAYS AND BRIDGES CONDUCTED UNDER THIS SECTION IS 03483'01 10 1 REPLACED WITH A SAPLING OF THE SAME OR A SIMILAR VARIETY OF TREE 2 AS WAS REMOVED, DESTROYED, OR BOTH. HOWEVER, THIS TREE REPLACE- 3 MENT REQUIREMENT APPLIES ONLY TO PROJECTS CONDUCTED UNDER CON- 4 TRACTS EXECUTED ON OR AFTER THE EFFECTIVE DATE OF THE AMENDATORY 5 ACT THAT ADDED SUBSECTION (4)(E). 6 (g) The state transportation department may enter into 7 agreements with county road commissions and with cities and vil- 8 lages to perform work on a highway, road, or street. The agree- 9 ments may provide for the performance by any of the contracting 10 parties of any of the work contemplated by the contract including 11 engineering services and the acquisition of rights of way in con- 12 nection with the work, by purchase or condemnation by any of the 13 contracting parties in its own name, and for joint participation 14 in the costs, but only to the extent that the contracting parties 15 are otherwise authorized by law to expend money on the highways, 16 roads, or streets. The state transportation department also may 17 contract with a county road commission, city, and village to 18 advance money to a county road commission, city, and village to 19 pay their costs of improving railroad grade crossings on the 20 terms and conditions agreed to in the contract. A contract may 21 be executed before or after the state transportation commission 22 borrows money for the purpose of advancing money to a county road 23 commission, city, or village, but the contract shall be executed 24 before the advancement of any money to a county road commission, 25 city, or village by the state transportation commission, and 26 shall provide for the full reimbursement of any advancement by a 27 county road commission, city, or village to the state 03483'01 11 1 transportation department, with interest, within 15 years after 2 advancement, from any available revenue sources of the county 3 road commission, city, or village or, if provided in the con- 4 tract, by deduction from the periodic disbursements of any money 5 returned by the state to the county road commission, city, or 6 village. BEGINNING ON THE EFFECTIVE DATE OF THE AMENDATORY ACT 7 THAT ADDED SUBSECTION (4)(E), EVERY AGREEMENT ENTERED INTO UNDER 8 THIS SUBDIVISION SHALL INCLUDE A REQUIREMENT THAT EACH TREE THAT 9 IS REMOVED, DESTROYED, OR BOTH UNDER THE AGREEMENT SHALL BE 10 REPLACED WITH A SAPLING OF THE SAME OR A SIMILAR VARIETY OF TREE 11 AS WAS REMOVED, DESTROYED, OR BOTH AND THAT THE COUNTY ROAD COM- 12 MISSION SHALL PROVIDE MATCHING FUNDS FOR THIS PURPOSE NOT TO 13 EXCEED 25% OF THE COST. HOWEVER, NOT MORE THAN 1/2 OF 1% OF THE 14 TOTAL CONSTRUCTION COSTS FOR THE PROJECT SHALL BE FOR TREE 15 REPLACEMENT. 16 (h) For providing inventories of supplies and materials 17 required for the activities of the state transportation 18 department. The state transportation department may purchase 19 supplies and materials for these purposes, with payment to be 20 made out of the state trunk line fund to be charged on the basis 21 of issues from inventory in accordance with the accounting and 22 purchasing laws of the state. 23 (2) Notwithstanding any other provision of this act, at 24 least 90% of state revenue appropriated annually to the state 25 trunk line fund less the amounts described in subdivisions (a) to 26 (i) shall be expended annually by the state transportation 27 department for the maintenance of highways, roads, streets, and 03483'01 12 1 bridges and for the payment of debt service on bonds, notes, or 2 other obligations described in subsection (1)(a) issued after 3 July 1, 1983, for the purpose of providing funds for the mainte- 4 nance of highways, roads, streets, and bridges. Of the amounts 5 appropriated for state trunk line projects, the department shall, 6 where possible, secure warranties of not less than 5-year full 7 replacement guarantee for contracted construction work. If an 8 appropriate certificate is filed under section 18e but only to 9 the extent necessary, this subsection shall not prohibit the use 10 of any amount of money restricted as to use by section 9 of arti- 11 cle IX of the state constitution of 1963 and deposited in the 12 state trunk line fund for the payment of debt service on bonds, 13 notes, or other obligations pledging for the payment thereof 14 money restricted as to use by section 9 of article IX of the 15 state constitution of 1963 and deposited in the state trunk line 16 fund, whenever issued, as specified under subsection (1)(a). The 17 amountswhichTHAT are deducted from the state trunk line fund 18 for the purpose of the calculation required by this subsection 19 are as follows: 20 (a) Amounts expended for the purposes described in subsec- 21 tion (1)(a) for the payment of debt service on bonds, notes, or 22 other obligations issued before July 2, 1983. 23 (b) Amounts expended to provide the state matching require- 24 ment for projects on the national highway system and for the pay- 25 ment of debt service on bonds, notes, or other obligations issued 26 after July 1, 1983, for the purpose of providing funds for the 03483'01 13 1 state matching requirements for projects on the national highway 2 system. 3 (c) Amounts expended for the construction of a highway, 4 street, road, or bridge to 1 or more of the following or for the 5 payment of debt service on bonds, notes, or other obligations 6 issued after July 1, 1983, for the purpose of providing funds for 7 the construction of a highway, street, road, or bridge to 1 or 8 more of the following: 9 (i) A location for which a building permit has been obtained 10 for the construction of a manufacturing or industrial facility. 11 (ii) A location for which a building permit has been 12 obtained for the renovation of, or addition to, a manufacturing 13 or industrial facility. 14 (d) Amounts expended for capital outlay other than for high- 15 ways, roads, streets, and bridges or to pay debt service on 16 bonds, notes, or other obligations issued after July 1, 1983, for 17 the purpose of providing funds for capital outlay other than for 18 highways, roads, streets, and bridges. 19 (e) Amounts expended for the operating expenses of the state 20 transportation department other than the units of the department 21 performing the functions assigned on January 1, 1983 to the 22 bureau of highways. 23 (f) Amounts expended pursuant to contracts entered into 24 before January 1, 1983. 25 (g) Amounts expended for the purposes described in subsec- 26 tion (5). 03483'01 14 1 (h) Amounts appropriated for deposit in the transportation 2 economic development fund and the rail grade crossing account 3pursuant toUNDER section10(1)(g) and10(1)(a) AND 4 10(1)(G). 5 (i) Upon the affirmative recommendation of the director of 6 the state transportation department and the approval by resolu- 7 tion of the state transportation commission, those amounts 8 expended for projects vital to the economy of the state, a 9 region, or local area or the safety of the public. The resolu- 10 tion shall state the cost of the project exempted from this 11 subsection. 12 (3) Notwithstanding any other provision of this act, the 13 state transportation department shall expend annually at least 14 90% of the federal revenue distributed to the credit of the state 15 trunk line fund in that year, except for federal revenue expended 16 for the purposes described in subsection (2)(b), (c), (f), and 17 (i) on the maintenance of highways, roads, streets, and bridges. 18 The requirement of this subsection shall be waived if compliance 19 would cause the state to be ineligible according to federal law 20 for federal revenue, but only to the extent necessary to make the 21 state eligible according to federal law for that revenue. 22 (4) As used in this section: 23 (a) "Maintenance" and "maintaining" mean snow removal; 24 street cleaning and drainage; seal coating; patching and ordinary 25 repairs; erection and maintenance of traffic signs and markings; 26 safety projects; and the preservation, reconstruction, 27 resurfacing, restoration, and rehabilitation of highways, roads, 03483'01 15 1 streets, and bridges. For the purposes of this section, 2 maintenance and maintaining shall not be limited to the repair 3 and replacement of a road but shall include maintaining the orig- 4 inal intent of a construction project. If traffic patterns indi- 5 cate that this intent is no longer being met, the department may 6 expend funds to take corrective action and continue to fulfill 7 its obligation of maintaining the department's original objective 8 for the construction project. However, maintenance and maintain- 9 ing do not include projectswhichTHAT increase the capacity of 10 a highway facility to accommodate that part of the traffic having 11 neither origin nor destination within the local area. 12 (b) "Maintenance" and "maintaining" include widening less 13 than lane width; adding auxiliary turning lanes of 1/2 mile or 14 less; adding auxiliary weaving, climbing, or speed change lanes; 15 and correcting substandard intersections. 16 (c) "Maintenance" and "maintaining" do not include the 17 upgrading of aggregate surface roads to hard surface roads. 18 (d) "Maintenance" and "maintaining" include the portion of 19 the costs of the units of the department performing the functions 20 assigned on January 1, 1983, to the bureau of highways expended 21 for the purposes described in subdivisions (a) and (b). 22 (E) "RESTORATION" INCLUDES, BUT IS NOT LIMITED TO, THE 23 REPLACEMENT OF EACH TREE THAT WAS REMOVED OR DESTROYED WITH A 24 SAPLING OF THE SAME OR A SIMILAR VARIETY OF TREE AS WAS REMOVED 25 OR DESTROYED. 26 (5) Notwithstanding any other provision of this section, the 27 state transportation department may loan money to county road 03483'01 16 1 commissions, cities, and villages for paying capital costs of 2 transportation purposes described in the second paragraph of sec- 3 tion 9 of article IX of the state constitution of 1963 from the 4 proceeds of bonds or notes issuedpursuant toUNDER section 18b 5 or from the state trunk line fund. Loans made directly from the 6 state trunk line fund shall be made only after provision of funds 7 for the purposes specified in subsection (1)(a) to (f). 8 (6) County road commissions, cities, and villages may borrow 9 money from the proceeds of bonds or notes issued under section 10 18b or the state trunk line fund for the purposes set forth in 11 subsection (5) that shall be repayable, with interest, from 1 or 12 more of the following: 13 (a) The money to be received by the county road commission, 14 city, or village from the Michigan transportation fund, except to 15 the extent the money has been or may in the future be pledged by 16 contract in accordance with 1941 PA 205, MCL 252.51 to 252.64, or 17 has been or may in the future be pledged for the payment of the 18 principal and interest upon notes issuedpursuant toUNDER 1943 19 PA 143, MCL 141.251 to 141.254, or has been or may in the future 20 be pledged for the payment of principal and interest upon bonds 21 issued under section 18c or 18d, or has been or may in the future 22 be pledged for the payment of the principal and interest upon 23 bonds issuedpursuant toUNDER 1952 PA 175, MCL 247.701 to 24 247.707. 25 (b) Any other legally available funds of the city, village, 26 or county road commission, other than the general funds of the 27 county. 03483'01 17 1 (7) Loans madepursuant toUNDER subsection (5) if 2 required by the state transportation department may be payable by 3 deduction by the state treasurer, upon direction of the state 4 transportation department, from the periodic disbursements of any 5 money returned by the state under this act to the county road 6 commission, city, or village, but only after sufficient money has 7 been returned to the county road commission, city, or village to 8 provide for the payment of contractual obligations incurred or to 9 be incurred and principal and interest on notes and bonds issued 10 or to be issued under 1941 PA 205, MCL 252.51 to 252.64, 1943 11 PA 143, MCL 141.251 to 141.254, 1952 PA 175, MCL 247.701 to 12 247.707, or section 18c or 18d. The interest rates and payment 13 schedules of any loans made from the proceeds of bonds or notes 14 issuedpursuant toUNDER section 18b shall be established by 15 the state transportation department to conform as closely as 16 practicable to the interest rate and repayment schedules on the 17 bonds or notes issued to make the loans. However, the state 18 transportation department may allow for the deferral of the first 19 payment of interest or principal on the loans for a period of not 20 to exceed 1 year after the respective first payment of interest 21 or principal on the bonds or notes issued to make the loans. 22 (8) The amount borrowed by a county road commission, city, 23 or villagepursuant toUNDER subsection (6) shall not be 24 included in, or charged against, any constitutional, statutory, 25 or charter debt limitation of the county, city, or village and 26 shall not be included in the determination of the maximum annual 27 principal and interest requirements of, or the limitations upon, 03483'01 18 1 the maximum annual principal and interest incurred under 1941 2 PA 205, MCL 252.51 to 252.64, 1943 PA 143, MCL 141.251 to 3 141.254, 1952 PA 175, MCL 247.701 to 247.707, or section 18c or 4 18d. 5 (9) The county road commission, city, or village is not 6 required to seek or obtain the approval of the electors, the 7 municipal finance commission or its successor agency, or, except 8 as provided in this subsection, the department of treasury to 9 borrow moneypursuant toUNDER subsection (6). The borrowing 10 is not subject to the municipal finance act, 1943 PA 202, 11 MCL 131.1 to 139.3, or to section 5(g) of the home rule city act, 12 1909 PA 279, MCL 117.5. The state transportation department 13 shall give at least 10 days' notice to the state treasurer of its 14 intention to make a loan under subsection (5). If the state 15 treasurer gives notice to the director of the state transporta- 16 tion department within 10 days of receiving the notice from the 17 state transportation department, that, based upon the then exist- 18 ing financial or credit situation of the county road commission, 19 city, or village, it would not be in the best interests of the 20 state to make a loan under subsection (5) to the county road com- 21 mission, city, or village, the loan shall not be made unless the 22 state treasurer, after a hearing, if requested by the affected 23 county road commission, city, or village, subsequently gives 24 notice to the director of the state transportation department 25 that the loan may be made on the conditions that the state trea- 26 surer specifies. 03483'01 19 1 (10) The state transportation commission may borrow money 2 and issue bonds and notes under, and pursuant to the requirements 3 of, section 18b to make loans to county road commissions, cities, 4 and villages for the purposes described in the second paragraph 5 of section 9 of article IX of the state constitution of 1963, as 6 provided in subsection (5). A single issue of bonds or notes may 7 be issued for the purposes specified in subsection (5) and for 8 the other purposes specified in section 18b. The house and 9 senate transportation appropriations subcommittees shall be noti- 10 fied by the department if there are extras and overruns suffi- 11 cient to require approval of either the state administrative 12 board or the commission, or both, on any contract between the 13 department and a local road agency or a private business. 14 (11) The director of the state transportation department, 15 after consultation with representatives of the interests of 16 county road commissions, cities, and villages, shall establish, 17 by intergovernmental communication, procedures for the implemen- 18 tation and administration of the loan program established under 19 subsections (5) to (10). 20 (12) Not more than 10% per year of all of the funds received 21 by and returned to the state transportation department from any 22 source for the purposes of this section may be expended for 23 administrative expenses. The department shall be subject to 24 section 14(5) if more than 10% per year is expended for adminis- 25 trative expenses. As used in this subsection, "administrative 26 expenses" means those expenses that are not assigned including, 27 but not limited to, specific road construction or maintenance 03483'01 20 1 projects and are often referred to as general or supportive 2 services. Administrative expensesshallDO not include net 3 equipment expense, net capital outlay, debt service principal and 4 interest, and payments to other state or local offices which are 5 assigned, but not limited to, specific road construction projects 6 or maintenance activities. 7 (13) Any performance audits of the department shall be con- 8 ducted according to government auditing standards issued by the 9 United States general accounting office. 10 Sec. 12. (1) The amount distributed to the county road com- 11 missions shall be returned to the county treasurers in the 12 manner, for the purposes, and under the terms and conditions 13 specified in this section. The department and the county road 14 association of Michigan shall jointly develop incentives for 15 counties to establish statewide purchasing pools for the more 16 efficient use of Michigan transportation funds. 17 (2) Each county road commission shall be reimbursed in an 18 amount up to $10,000.00 per year for the sum paid to a licensed 19 professional engineer employed or retained by the county road 20 commission in the previous year. The sum shall be returned to 21 each county road commission certified by the state transportation 22 department as complying with this subsection regarding the 23 employment of an engineer. 24 (3) An amount equal to 1% of the total amount returned to 25 the county road commissions from the Michigan transportation fund 26 during the prior calendar year shall be withheld annually from 27 the counties' November monthly distribution provided for in 03483'01 21 1 section 17, and the amount shall be returned to the county road 2 commissions for snow removal purposes as provided in 3 section 12a. 4 (4) An amount equal to 10% of the total amount returned to 5 the county road commissions from the Michigan transportation fund 6 shall be returned to each county road commission having county 7 primary, or county local road, or both, mileage in the urban 8 areas as determinedpursuant toUNDER section 12b. This sum 9 shall be distributed pursuant to section 12b. The return shall 10 be in addition to the amounts provided in subsections (6) and (7) 11 and for the purposes stated in those subsections. 12 (5) An amount equal to 4% of the total amount returned to 13 the county road commissions from the Michigan transportation fund 14 shall be returned to the county road commissions in the same per- 15 centages as provided in subsection (7). All money returned to 16 the county road commissions as provided in this subsection shall 17 be expended by the county road commissions for the maintenance, 18 improvement, construction, reconstruction, acquisition, and 19 extension of county local road systems and shall be in addition 20 to the amounts provided in subsection (7). 21 (6) Seventy-five percent of the remainder of the total 22 amount to be returned to the counties shall be expended by each 23 county road commission for the maintenance, improvement, con- 24 struction, reconstruction, acquisition, and extension of the 25 county primary road system, including the acquisition of a neces- 26 sary right of way for the system, work incidental to the system, 03483'01 22 1 and a roadside park or motor parkway appurtenant to the system, 2 and shall be returned to the counties as follows: 3 (a) Three-fourths of the amount in proportion to the amount 4 received within the respective county during the 12 months next 5 preceding the date of each monthly distribution, as specific 6 taxes upon registered motor vehicles under the Michigan vehicle 7 code, 1949 PA 300, MCL 257.1 to 257.923. 8 (b) One-tenth of the amount in the same proportion that the 9 total mileage in the county primary road system of each county 10 bears to the total mileage in all of the county primary road sys- 11 tems of the state. 12 (c) One eighty-third of the remaining 15% of the amount to 13 each county. 14 (7) The balance of the remainder of the total amount to be 15 returned to counties shall be expended by each county road com- 16 mission for the maintenance, improvement, construction, recon- 17 struction, acquisition, and extension of the county local road 18 system as defined by this act, including the acquisition of a 19 necessary right of way for the system, work incidental to the 20 system, and a roadside park or motor parkway appurtenant to the 21 system, and shall be returned to the counties as follows: 22 (a) Sixty-five percent of the amount in the same proportion 23 that the total mileage in the county local road system of each 24 county bears to the total mileage in all of the county local road 25 systems of the state. 26 (b) Thirty-five percent of the amount in the same proportion 27 that the total population outside of incorporated municipalities 03483'01 23 1 in each county bears to the total population outside of 2 incorporated municipalities in all of the counties of the state, 3 according to the most recent statewide federal census as certi- 4 fied at the beginning of the state fiscal year. 5 (8) Money deposited in, or becoming a part of the county 6 road funds of a board of county road commissioners shall be 7 expended first for the payment of principal and interest on the 8 bonds, for the payment of contractual contributions pledged for 9 the payment of bonds, for debt service requirements for the pay- 10 ment of contractual contributions pledged for the payment of 11 bonds, and for debt service requirements for the payment of notes 12 and loans in the following order of priority: 13 (a) For the payment of contributions required to be made by 14 a board of county road commissioners under a contract entered 15 into under 1941 PA 205, MCL 252.51 to 252.64, which contributions 16 have been pledged for the payment of the principal and interest 17 on bonds issued under that act, or for the payment of total debt 18 service requirements upon notes issued by a board of county road 19 commissioners under 1943 PA 143, MCL 141.251 to 141.254. 20 (b) For the payment of principal and interest upon bonds 21 issued under section 18c, and the payment of contributions of a 22 board of county road commissioners to be madepursuant toUNDER 23 contracts entered into under section 18d, which contributions are 24 pledged to the payment of principal and interest on bonds issued 25 after June 30, 1957, under the authorization of section 18c and 26 contracts executed pursuant to its provisions. 03483'01 24 1 (c) For the payment of principal and interest upon loans 2 receivedpursuant toUNDER section 11(7), to the extent other 3 funds have not been made available for that payment. 4 (9) Not to exceed 30% per year of the amount returned to a 5 county for use on the county primary road system may be expended, 6 with or without matching, on the county local road system of that 7 county. Not to exceed 15% per year of the amount returned to a 8 county for expenditure on the county local road system may be 9 used, with or without matching, on the county primary road system 10 of that county, and not to exceed an additional 15% per year of 11 the amount returned to a county for expenditure on the county 12 local road system, may, in case of an emergency or with the 13 approval of the state transportation department, be expended, 14 with or without matching, on the county primary road system of 15 that county. An amount returned to a county for and on account 16 of county local roads, under this section, in excess of the total 17 amount paid into the county treasury each year by all of the 18 townships of that county for and on account of the county local 19 roads pursuant to section 14(6) may be transferred to and 20 expended on the county primary road system of that county. 21 (10) Not less than 20% per year of the funds returned to a 22 county by this section shall be expended for snow and ice remov- 23 al, the construction or reconstruction of a new highway or exist- 24 ing highway, and the acquisition of a necessary right of way for 25 those highways, and work incidental to those highways, or for the 26 servicing of bonds issued by the county for these purposes. 03483'01 25 1 Surplus funds may be expended for the development, construction, 2 or repair of an off-street parking facility. 3 (11) Not more than 5% per year of the funds returned to a 4 county for the county primary road system and the county local 5 road system shall be expended for the maintenance, improvement, 6 or acquisition of appurtenant roadside parks and motor parkways. 7 (12) Funds returned to a county shall be expended by the 8 county road commission for the purposes provided in this section 9 and shall be deposited by the county treasurer in a designated 10 county depository, in a separate account to the credit of the 11 county road fund, and shall be paid out only upon the order of 12 the county road commission, and interest accruing on the money 13 shall become a part of, and be deposited with the county road 14 fund. 15 (13) In a county to which the funds are returned the func- 16 tion of the county road commission shall be limited to the forma- 17 tion of policy and the performance of the official duties imposed 18 by law and delegated by the county board of commissioners. A 19 member of the county road commission shall not be employed indi- 20 vidually in any other capacity for other duties with the county 21 road commission. 22 (14) A county road commission may enter into an agreement 23 with a county road commission of an adjacent county and with a 24 city or village to perform work on a highway, road, or street, 25 and with the state transportation department with respect to a 26 state trunk line and connecting links of the state trunk line 27 within the limits of the county or adjacent to the county. The 03483'01 26 1 agreement may provide for the performance by each contracting 2 party of the work contemplated by the contract including engi- 3 neering services and the acquisition of rights of way in connec- 4 tion with the work contemplated, by purchase or condemnation, by 5 any of the contracting parties in its own name and the agreement 6 may provide for joint participation in the costs. BEGINNING ON 7 THE EFFECTIVE DATE OF THE AMENDATORY ACT THAT ADDED SUBSECTION 8 (23), EVERY AGREEMENT ENTERED INTO UNDER THIS SUBDIVISION SHALL 9 INCLUDE A REQUIREMENT THAT EACH TREE THAT IS REMOVED, DESTROYED, 10 OR BOTH UNDER THE AGREEMENT SHALL BE REPLACED WITH A SAPLING OF 11 THE SAME OR A SIMILAR VARIETY OF TREE AS WAS REMOVED, DESTROYED, 12 OR BOTH AND THAT THE CONTRACTING PARTY OR PARTIES AGREE TO PRO- 13 VIDE MATCHING FUNDS FOR THIS PURPOSE NOT TO EXCEED 25% OF THE 14 COST. HOWEVER, NOT MORE THAN 1/2 OF 1% OF THE TOTAL CONSTRUCTION 15 COSTS FOR THE PROJECT SHALL BE FOR TREE REPLACEMENT. 16 (15) Money distributed from the Michigan transportation fund 17 may be expended for construction purposes on county local roads 18 only to the extent matched by money from other sources. However, 19 Michigan transportation funds may be expended for the construc- 20 tion of bridges on the county local roads in an amount not to 21 exceed 75% of the cost of the construction of local road 22 bridges. This subsection does not apply to section 11b. 23 (16) Notwithstanding any other provision of this act, at 24 least 90% of the state revenue returned annually to the county 25 road commission from the Michigan transportation fund less the 26 amounts described in subdivisions (a) to (e) shall be expended 27 annually by the county road commission for the maintenance of 03483'01 27 1 highways, roads, streets, and bridges, and for the payment of 2 contractual contributions pledged for the payment of bonds or 3 portions of bonds, debt service requirements for the payment of 4 bonds or portions of bonds, and debt service requirements for the 5 payment of notes and loans or portions of notes and loans issued 6 or received after July 1, 1983, for the purpose of providing 7 funds for the maintenance of highways, roads, streets, and 8 bridges. If an appropriate certificate is filed under 9 subsection (19) but only to the extent necessary, this subsection 10 shall not prohibit the use of any amount of state revenue 11 returned annually to the county road commissions for the payment 12 of contractual contributions pledged for the payment of bonds, 13 for debt service requirements for the payment of bonds, and for 14 debt service requirements for the payment of notes or loans, 15 whenever issued or received, as specified under subsection (8). 16 The amountswhichTHAT are deducted from the state revenue 17 returned to a county road commission from the Michigan transpor- 18 tation fund, for the purpose of the calculation required by this 19 subsection are as follows: 20 (a) Amounts expended for the purposes described in subsec- 21 tion (8) for bonds, notes, loans, or other obligations issued or 22 received before July 2, 1983. 23 (b) Amounts expended for the administrative costs of the 24 county road commission. 25 (c) Amounts expended for capital outlay projects for equip- 26 ment and buildings, and for the payment of contractual 27 contributions pledged for the payment of bonds, for debt service 03483'01 28 1 requirements for the payment of bonds, and for debt service 2 requirements for the payment of notes and loans issued or 3 received after July 1, 1983, for the purpose of providing funds 4 for capital outlay projects for equipment and buildings. 5 (d) Amounts expended for projects vital to the economy of 6 the local area or the safety of the public in the local area. 7 Before these amounts can be deducted, the governing body over the 8 county road commission or the county road commission, as applica- 9 ble, shall pass a resolution approving these projects. This res- 10 olution shall state which projects will be funded and the cost of 11 each project. A copy of each approved resolution shall be for- 12 warded immediately to the department. 13 (e) Amounts expended in urban areas as determined pursuant 14 to section 12b. 15 (17) As used in this subsection, "urban routes" means those 16 portions of 2 lane county primary roads within an urban area 17whichTHAT has average daily traffic in excess of 15,000. 18 Notwithstanding any other provision of this act, except as pro- 19 vided in this subsection, a county road commission shall expend 20 annually at least 90% of the federal revenue distributed to the 21 use of the county road commission for highways, roads, streets, 22 and bridges, less the amount expended on urban routes for other 23 than maintenance purposes and the amount expended for 24 hard-surfacing of gravel roads on the federal-aid system, on the 25 maintenance of highways, roads, streets, and bridges. A county 26 road commission may expend in a year less than 90% of the federal 27 revenue distributed to the use of the county road commission for 03483'01 29 1 highways, roads, streets, and bridges, less the amount expended 2 on urban routes for other than maintenance purposes and the 3 amount expended for hard-surfacing of gravel roads on the 4 federal-aid system, on the maintenance of highways, roads, 5 streets, and bridges, if that year is part of a 3-year period in 6 which at least 90% of the total federal revenue distributed in 7 the 3-year period to the use of the county road commission for 8 highways, roads, streets, and bridges, less the amount expended 9 on urban routes for other than maintenance purposes and the 10 amount expended for hard-surfacing of gravel roads on the 11 federal-aid system, is expended on the maintenance of highways, 12 roads, streets, and bridges. If a county road commission expends 13 in a year less than 90% of the federal revenue distributed to the 14 use of the county road commission for highways, roads, streets, 15 and bridges, less the amount expended on urban routes for other 16 than maintenance purposes and the amount expended for 17 hard-surfacing of gravel roads on the federal-aid system, on the 18 maintenance of highways, roads, streets, and bridges and that 19 year is not a part of a 3-year period in which at least 90% of 20 the total federal revenue distributed in the 3-year period to the 21 use of the county road commission for highways, roads, streets, 22 and bridges, less the amount expended on urban routes for other 23 than maintenance purposes and the amount expended for 24 hard-surfacing of gravel roads on the federal-aid system, is 25 expended on the maintenance of highways, roads, streets, and 26 bridges, the county road commission shall expend in each year 27 subsequent to the 3-year period 100%, or less in 1 year if 03483'01 30 1 sufficient for the purposes of this subsection, of the federal 2 revenue distributed to the use of the county road commission for 3 highways, roads, streets, and bridges, less the amount expended 4 on urban routes for other than maintenance purposes and the 5 amount expended for hard-surfacing of gravel roads on the 6 federal-aid system, on the maintenance of highways, roads, 7 streets, and bridges until the average percentage spent on the 8 maintenance of highways, roads, streets, and bridges in the 9 3-year period and the subsequent years, less the amount expended 10 on urban routes for other than maintenance purposes and the 11 amount expended for hard-surfacing of gravel roads on the 12 federal-aid system, is at least 90%. A year may be included in 13 only one 3-year period for the purposes of this subsection. The 14 requirements of this subsection shall be waived if compliance 15 would cause the county road commission to be ineligible according 16 to federal law for federal revenue, but only to the extent neces- 17 sary to make the county road commission eligible according to 18 federal law for that revenue. For the purpose of the calcula- 19 tions required by this subsection, the amount expended on urban 20 routes by a county road commission for other than maintenance 21 purposes and the amount expended for hard-surfacing of gravel 22 roads on the federal-aid system shall be deducted from the total 23 federal revenue distributed to the use of the county road 24 commission. 25 (18) As used in this section: 26 (a) "Maintenance" and "maintaining" mean snow removal; 27 erection of traffic control devices and traffic signals and 03483'01 31 1 payment of monthly electrical costs for those signals; street 2 cleaning and drainage; seal coating; patching and ordinary 3 repairs; erection and maintenance of traffic signs and markings; 4 safety projectswhichTHAT do not increase through traffic 5 capacity; and the preservation, reconstruction, resurfacing, res- 6 toration, and rehabilitation of highways, roads, streets, and 7 bridges. However, maintenance and maintaining do not include 8 projectswhichTHAT increase the capacity of a highway facility 9 to accommodate that part of the traffic having neither origin nor 10 destination within the local area. 11 (b) "Maintenance" and "maintaining" include widening less 12 than lane width; adding auxiliary turning lanes of 1/2 mile or 13 less; adding auxiliary weaving, climbing, or speed change lanes; 14 and correcting substandard intersections. 15 (C) "RESTORATION" INCLUDES, BUT IS NOT LIMITED TO, THE 16 REPLACEMENT OF EACH TREE THAT WAS REMOVED OR DESTROYED WITH A 17 SAPLING OF THE SAME OR A SIMILAR VARIETY OF TREE AS WAS REMOVED 18 OR DESTROYED. 19 (19) A county road commission shall certify, which certifi- 20 cation shall, for purposes of the validity of bonds and notes, be 21 conclusive as to the matters stated therein, to the state trans- 22 portation department on or before the issuance of any bonds or 23 notes issued after July 1, 1983,pursuant toUNDER 1943 PA 143, 24 MCL 141.251 to 141.254, 1941 PA 205, MCL 252.51 to 252.64, or 25 section 18c or 18d, for purposes other than the maintenance of 26 highways, roads, streets, and bridges and purposes other than the 27 purposes specified in subsection (16)(c) that its average annual 03483'01 32 1 debt service requirements for all bonds and notes or portions of 2 bonds and notes issued after July 1, 1983, for purposes other 3 than the maintenance of highways, roads, streets, and bridges and 4 other than for the purposes specified in subsection (16)(c), 5 including the bond or note to be issued does not exceed 10% of 6 the funds returned to the county road commissionpursuant to7 UNDER this act, less the amounts specified in subsection (16)(a), 8 (b), and (c) during the last completed fiscal year of the county 9 road commission. If the purpose for which the bonds or notes are 10 issued is changed after the issuance of the notes or bonds, the 11 change shall be made in such a manner to maintain compliance with 12 the certification required by this subsection, as of the date the 13 certificate was originally issued, but no such change shall 14 invalidate or otherwise affect the bonds or notes with respect to 15 which the certificate was issued or the obligation to pay debt 16 service on the bonds or notes. 17 (20) In each charter county to which funds are returned 18 under this section, the responsibility for road improvement, 19 maintenance, and traffic operation work, and the development, 20 construction, or repair of off-road parking facilities and con- 21 struction or repair of road lighting shall be coordinated by a 22 single administrator to be designated by the county executive who 23 shall be responsible for and shall represent the charter county 24 in transactions with the state transportation department pursuant 25 to this act. 26 (21) Not more than 10% per year of all of the funds received 27 by and returned to a county from any source for the purposes of 03483'01 33 1 this section may be expended for administrative expenses. A 2 county that expends more than 10% for administrative expenses in 3 a year shall be subject to section 14(5) unless a waiver is 4 granted by the department of treasury. As used in this subsec- 5 tion, "administrative expenses" means those expenses that are not 6 assigned including, but not limited to, specific road construc- 7 tion or maintenance projects and are often referred to as general 8 or supportive services. Administrative expensesshallDO not 9 include net equipment expense, net capital outlay, debt service 10 principal and interest, and payments to other state or local 11 offices which are assigned, but not limited to, specific road 12 construction projects or maintenance activities. 13 (22) In addition to the financial compliance audits required 14 by law, the department of treasury shall conduct performance 15 audits and make investigations of the disposition of all state 16 funds received by county road commissions, county boards of com- 17 missioners, or any other county governmental agency acting as the 18 county road authority, for transportation purposes to determine 19 compliance with the terms and conditions of this act. 20 Performance audits shall be conducted according to government 21 auditing standards issued by the United States general accounting 22 office. The department of treasury shall provide 6 months notice 23 to the county road commission or county board of commissioners, 24 as applicable, of the standards to be used for audits performed 25 under this subsection prior to the fiscal year in which the audit 26 is conducted. The department shall notify the county road 27 commission or county board of commissioners of any subsequent 03483'01 34 1 changes to the standards. County road commissions or county 2 boards of commissioners, as applicable, shall make available to 3 the department of treasury the pertinent records for the audit. 4 (23) FUNDS RETURNED TO THE COUNTY UNDER THIS SECTION SHALL 5 ONLY BE EXPENDED BY THE COUNTY FOR PROJECTS THAT INCLUDE THE 6 REPLACEMENT OF EACH TREE THAT IS REMOVED, DESTROYED, OR BOTH WITH 7 A SAPLING OF THE SAME OR A SIMILAR VARIETY OF TREE AS WAS 8 REMOVED, DESTROYED, OR BOTH. HOWEVER, THIS TREE REPLACEMENT 9 REQUIREMENT APPLIES ONLY TO PROJECTS CONDUCTED UNDER CONTRACTS 10 EXECUTED ON OR AFTER THE EFFECTIVE DATE OF THE AMENDATORY ACT 11 THAT ADDED THIS SUBSECTION. 12 Sec. 13. (1) The amount distributed to cities and villages 13 shall be returned to the treasurers of the cities and villages in 14 the manner, for the purposes, and under the terms and conditions 15 specified in this section. As used in this section, "population" 16 means the population according to the most recent statewide fed- 17 eral census as certified at the beginning of the state fiscal 18 year, except that, if a municipality has been newly incorporated 19 since completion of the census, the population of the municipal- 20 ity for purposes of the distribution of funds before completion 21 of the next census shall be the population as determined by spe- 22 cial federal census, if there is a census, and if not, by the 23 population as determined by the official census in connection 24 with the incorporation, if there is such a census and, if not, by 25 a special state census to be taken at the expense of the munici- 26 pality by the secretary of state pursuant to section 6 of the 27 home rule city act, 1909 PA 279, MCL 117.6. The amount received 03483'01 35 1 by the newly incorporated municipality shall be in place of any 2 other direct distribution of funds from the Michigan transporta- 3 tion fund. The population of the newly incorporated municipality 4 as determined under this section shall be added to the total pop- 5 ulation of all incorporated cities and villages in the state in 6 computing the amounts to be returned under this section to each 7 municipality in the state. Major street mileage, local street 8 mileage, and equivalent major mileage, if applicable, shall be 9 determined by the state transportation department before the next 10 month for which distribution is made following the effective date 11 of incorporation of a newly incorporated municipality. 12 (2) From the amount available for distribution to cities and 13 villages during each December, an amount equal to 0.7% of the 14 total amount returned to all cities and villages under subsec- 15 tions (3) and (4) during the previous calendar year shall be 16 withheld. The amount withheld shall be used to partially reim- 17 burse those cities and villages located in those counties that 18 are eligible for snow removal funds pursuant to section 12a and 19 that have costs for winter maintenance on major and local streets 20 that are greater than the statewide average. The distributions 21 shall be made annually during February and shall be calculated 22 separately for the major and local street systems but may be paid 23 in a combined warrant. The distribution to a city or village 24 shall be equal to 1/2 of its winter maintenance expenditures 25 after deducting the product of its total earnings under subsec- 26 tions (3) and (4) multiplied by 2 times the average municipal 27 winter maintenance factor. Winter maintenance expenditures shall 03483'01 36 1 be determined from the street financial reports for the most 2 current fiscal years ending before July 1. A city or village 3 that does not submit a street financial report for the fiscal 4 year ending before July 1 by the subsequent December 31 shall be 5 ineligible for the winter maintenance payment that is to be based 6 on that street financial report. The average municipal winter 7 maintenance factor shall be determined annually by the state 8 transportation department by dividing the total expenditures of 9 all cities and villages on winter maintenance of streets and 10 highways by the total amount earned by all cities and villages 11 under subsections (3) and (4) during the 12 months. If the sum 12 of the distributions to be made under this subsection exceeds the 13 amount withheld, the distributions to each eligible city and vil- 14 lage shall be reduced proportionately. If the sum is less than 15 the amount withheld, the balance shall be added to the amount 16 available for distribution under subsections (3) and (4) during 17 the next month. The distributions shall be for use on the major 18 and local street systems respectively and shall be subject to the 19 same provisions as funds returned under subsections (3) and (4). 20 (3) Seventy-five percent of the remaining amount to be 21 returned to the cities and villages, after deducting the amounts 22 withheld pursuant to subsection (2), shall be returned 60% in the 23 same proportion that the population of each bears to the total 24 population of all cities and villages, and 40% in the same pro- 25 portion that the equivalent major mileage in each bears to the 26 total equivalent major mileage in all cities and villages. As 27 used in this section, "equivalent major mileage" means the sum of 03483'01 37 1 2 times the state trunk line mileage certified by the state 2 transportation department as of March 31 of each year, as being 3 within the boundaries of each city and village having a popula- 4 tion of 25,000 or more, plus the major street mileage in each 5 city and village, multiplied by the following factor: 6 1.0 for cities and villages of 2,000 or less population; 7 1.1 for cities and villages from 2,001 to 10,000 population; 8 1.2 for cities and villages from 10,001 to 20,000 population; 9 1.3 for cities and villages from 20,001 to 30,000 population; 10 1.4 for cities and villages from 30,001 to 40,000 population; 11 1.5 for cities and villages from 40,001 to 50,000 population; 12 1.6 for cities and villages from 50,001 to 65,000 population; 13 1.7 for cities and villages from 65,001 to 80,000 population; 14 1.8 for cities and villages from 80,001 to 95,000 population; 15 1.9 for cities and villages from 95,001 to 160,000 population; 03483'01 38 1 2.0 for cities and villages from 160,001 to 320,000 population; 2 and for cities over 320,000 population, by a factor of 2.1 3 increased successively by 0.1 for each 160,000 population incre- 4 ment over 320,000. The amount returned under this subsection 5 shall be used by each city and village for the following purposes 6 in the following order of priority: 7 (a) For the payment of contributions required to be made by 8 a city or village under the provisions of contracts previously 9 entered into under 1941 PA 205, MCL 252.51 to 252.64, which con- 10 tributions have been previously pledged for the payment of the 11 principal and interest on bonds issued under that act; or for the 12 payment of the principal and interest upon bonds issued by a city 13 or village pursuant to 1952 PA 175, MCL 247.701 to 247.707. 14 (b) Payment of obligations of the city or village on highway 15 projects undertaken by the city or village jointly with the state 16 transportation department. 17 (c) For the payment of principal and interest upon loans 18 received pursuant to section 11(7), to the extent other funds 19 have not been made available for that payment. 20 (d) For the maintenance, improvement, construction, recon- 21 struction, acquisition, and extension of the major street system 22 as defined by this act including the acquisition of a necessary 23 right of way for the system, work incidental to the system, and 24 an appurtenant roadside park or motor parkway, of the city or 25 village and for the payment of the principal and interest on that 26 portion of the city's or village's general obligation bonds which 27 are attributable to the construction or reconstruction of the 03483'01 39 1 city's or village's major street system. Not more than 5% per 2 year of the funds returned to a city or village by this subsec- 3 tion shall be expended for the maintenance, improvement, or 4 acquisition of appurtenant roadside parks and motor parkways. 5 Surplus funds may be expended for the development, construction, 6 or repair of off-street parking facilities, and the construction 7 or repair of street lighting. 8 (4) The remaining amount to be returned to incorporated 9 cities and villages shall be expended in each city or village for 10 the maintenance, improvement, construction, reconstruction, 11 acquisition, and extension of the local street system of the city 12 or village, as defined by this act, including the acquisition of 13 a necessary right of way for the system, work incidental to the 14 system, and subject to subsection (5), for the payment of the 15 principal and interest on that portion of the city's or village's 16 general obligation bonds which are attributable to the construc- 17 tion or reconstruction of the city's or village's local street 18 system. The amount returned under this subsection shall be 19 returned to the cities and villages 60% in the same proportion 20 that the population of each bears to the total population of all 21 incorporated cities and villages in the state, and 40% in the 22 same proportion that the total mileage of the local street system 23 of each bears to the total mileage in the local street systems of 24 all cities and villages of the state. The payment of the princi- 25 pal and interest upon bonds issued by a city or village pursuant 26 to 1952 PA 175, MCL 247.701 to 247.707, and after that payment, 27 the payment of debt service on loans received under section 03483'01 40 1 11(7), shall have priority in the expenditure of money returned 2 under this subsection. 3 (5) Money distributed to each city and village for the main- 4 tenance and improvement of its local street system under this act 5 represents the total responsibility of the state for local street 6 system support. Funds distributed from the Michigan transporta- 7 tion fund shall not be expended for construction purposes on city 8 and village local streets except to the extent matched from local 9 revenues including other money returned to a city or village by 10 the state under the state constitution of 1963 and statutes of 11 the state, from funds that can be raised by taxation in cities 12 and villages for street purposes within the limitations of the 13 state constitution of 1963 and statutes of the state, from spe- 14 cial assessments, or from any other source. This subsection does 15 not apply to section 11b. 16 (6) Money returned under this section to a city or village 17 shall be expended on the major and local street systems of that 18 city or village. However, the first priority shall be the major 19 street system. Money returned for expenditure on the major 20 street system may be expended on the local street system in an 21 amount equal to the amount of local revenues, as provided in sub- 22 section (5), expended by the city or village on the major street 23 system or on state trunk line highways, and to the extent that 24 that amount of major street money is not transferred for expendi- 25 ture on the local street system in that year, major street money 26 received during the next succeeding 2 years may be transferred 27 for expenditure on the local system until the amount so 03483'01 41 1 authorized for transfer is fully expended. If a city or village 2 transfers more than 25% of its major street funding for the local 3 street system, the city or village shall adopt a resolution with 4 a copy to the department setting forth all of the following: 5 (a) A list of the major streets in that city or village. 6 (b) A statement that the city or village is adequately main- 7 taining its major streets. 8 (c) The dollar amount of the transfer. 9 (d) The local streets to be funded with the transfer. 10 (7) Not more than 10% per year of all of the funds returned 11 to a city or village from any source for the purposes of this 12 section may be expended for administrative expenses. As used in 13 this subsection, "administrative expenses" means those expenses 14 that are not assigned including, but not limited to, specific 15 road construction or maintenance projects and are often referred 16 to as general or supportive services. Administrative expenses 17shallDO not include net equipment expense, net capital outlay, 18 debt service principal and interest, and payments to other state 19 or local offices that are assigned, but not limited to, specific 20 road construction projects or maintenance activities. A city or 21 villagewhichTHAT in a year expends more than 10% for adminis- 22 trative expenses shall be subject to section 14(5). 23 (8) In each city and village to which funds are returned 24 under this section, the responsibility for street improvement, 25 maintenance, and traffic operation work, and the development, 26 construction, or repair of off-street parking facilities and 27 construction or repair of street lighting shall be coordinated by 03483'01 42 1 a single administrator to be designated by the governing body who 2 shall be responsible for and shall represent the municipality in 3 transactions with the state transportation department pursuant to 4 this act. 5 (9) Cities and villages may provide for consolidated street 6 administration. A city or a village may enter into an agreement 7 with other cities or villages, the county road commission, or 8 with the state transportation commission for the performance of 9 street or highway work on a road or street within the limits of 10 the city or village or adjacent to the city or village. The 11 agreement may provide for the performance by any of the contract- 12 ing parties of the work contemplated by the contracts including 13 services and acquisition of rights of way, by purchase or condem- 14 nation by any of the contracting parties in its own name. The 15 agreement may provide for joint participation in the costs if 16 appropriate. BEGINNING ON THE EFFECTIVE DATE OF THE AMENDATORY 17 ACT THAT ADDED SUBSECTION (12), EVERY AGREEMENT ENTERED INTO 18 UNDER THIS SUBSECTION SHALL INCLUDE A REQUIREMENT THAT EACH TREE 19 THAT IS REMOVED, DESTROYED, OR BOTH UNDER THIS AGREEMENT SHALL BE 20 REPLACED WITH A SAPLING OF THE SAME OR A SIMILAR VARIETY OF TREE 21 AS WAS REMOVED, DESTROYED, OR BOTH AND THAT THE CONTRACTING PARTY 22 OR PARTIES AGREE TO PROVIDE MATCHING FUNDS FOR THIS PURPOSE NOT 23 TO EXCEED 25% OF THE COST. HOWEVER, NOT MORE THAN 1/2 OF 1% OF 24 THE TOTAL CONSTRUCTION COSTS FOR THE PROJECT SHALL BE FOR TREE 25 REPLACEMENT. 03483'01 43 1 (10) Interest earned on funds returned to a city or a 2 village for purposes provided in this section shall be credited 3 to the appropriate street fund. 4 (11) In addition to the financial compliance audits required 5 by law, the department of treasury shall conduct performance 6 audits and make investigations of the disposition of all state 7 funds received by cities and villages for transportation purposes 8 to determine compliance with the terms and conditions of this 9 act. Performance audits shall be conducted according to govern- 10 ment auditing standards issued by the United States general 11 accounting office. The department of treasury shall provide 12 notice to cities and villages of the standards to be used for 13 audits under this subsection prior to the fiscal year in which 14 the audit is conducted. The department shall notify cities and 15 villages of any subsequent changes to the standards. Cities and 16 villages shall make available to the department of treasury the 17 pertinent records for the audit. 18 (12) MONEY RETURNED UNDER THIS SECTION SHALL ONLY BE 19 EXPENDED BY THE CITY OR VILLAGE FOR PROJECTS THAT INCLUDE THE 20 REPLACEMENT OF EACH TREE THAT IS REMOVED, DESTROYED, OR BOTH WITH 21 A SAPLING OF THE SAME OR A SIMILAR VARIETY OF TREE AS WAS 22 REMOVED, DESTROYED, OR BOTH. HOWEVER, THIS TREE REPLACEMENT 23 REQUIREMENT APPLIES ONLY TO PROJECTS CONDUCTED UNDER CONTRACTS 24 EXECUTED ON OR AFTER THE EFFECTIVE DATE OF THE AMENDATORY ACT 25 THAT ADDED THIS SUBSECTION. 03483'01 Final page. MRM