PUBLIC TRANSPORTATION AUTHORITY:
ALLOW TAXES TO BE LEVIED UP TO 25 YEARS
House Bill 6021
Sponsor: Rep. Jerry O. Kooiman
Committee: Transportation
Complete to 5-08-06
A SUMMARY OF HOUSE BILL 6021 AS INTRODUCED 4-27-06
House Bill 6021 would amend Section 18 of the Public Transportation Authority Act (Public Act 196 of 1986) to allow authorities organized under the act to levy property taxes for a period of up to 25 years if the authority were seeking the levy "for public transit services that include a fixed guideway project authorized under 49 USC 5309." Under current law, authorities organized under the act may only levy taxes for a period up to five years.
The bill would also amend Section 8 to provide a new notification requirement. The bill would require an authority formed under the act on or after May 1, 2006 to notify all political subdivisions or portions of any city, village, or township included within the authority [boundaries]. The notice would have to include notice of the right to withdraw from the authority. The political subdivision, or portion of the political subdivision so notified would have 30 days after receiving the notice to withdraw from the authority pursuant to subsection (5).
FISCAL IMPACT:
The bill would have no direct impact on state or local costs or revenues.
BACKGROUND INFORMATION:
It is our understanding that the bill would allow the Interurban Transit Partnership (ITP), a Grand Rapids area transportation authority organized under Public Act 196, to access a $14.4 million federal grant for preliminary engineering related to a "New Starts" fixed guideway corridor project. This federal grant is made under Section 5309 of 49 USC, as amended by the recently reauthorized federal-aid transportation program (SAFETEA-LU). The Interurban Transit Partnership is the only Michigan authority organized under Public Act 196 to have secured a New Starts project earmark in SAFETEA-LU.
Section 5309 of 49 USC is a federal transit capital grant program administered by the Federal Transit Administration. Examples of fixed guideway projects include commuter light rail, monorail systems, and bus rapid transit. Section 5309 of the Federal Transit Act (49 USC), as amended by SAFETEA-LU, requires that grant applicants have "the legal, financial, and technical capacity to carry out the proposed project," and that applicants demonstrate a local financial commitment to provide necessary matching funds and to operate the facility. Under Section 5309 grants, federal funds generally provide 80 percent of project cost with the 20 percent balance coming from non-federal (typically state and local) sources. The ability to levy a property tax for a 25-year period to support the public transportation facility would help demonstrate local financial commitment for the project.
The text of the SAFTEA-LU amendments to 49 USC, including the Congressional earmark for the Grand Rapids project, can be found on the Federal Transit Administration website at:
http://www.fta.dot.gov/documents/SAFETEA-LU_Title_III_-_Final_Bill.pdf
A description of Section 5309 "New Starts" program is found at
http://www.fta.dot.gov/16228_ENG_HTML.htm#D
Public Act 196 allows one or more political subdivisions (counties, cities, villages, townships) to form a public authority under the act to provide public transportation services. There are 78 public transit agencies in the state of Michigan. Of these 78 agencies, 22 are organized under provisions of Public Act 196 of 1986. (The other transit agencies in the state are organized under authority of other statutes; many are organized as a department of a city or county government. A list of public transit agencies and the legal basis for organization is provided below.). In addition, both Wayne County and Oakland County have Public Act 196 transportation authorities that levy taxes in participating political subdivisions on behalf of the Suburban Mobility Authority for Regional Transportation (SMART).
Section 18 of Public Act 196 of 1986 currently allows a public authority to levy a tax of up to five mills on the state equalized valuation of taxable property within the limits of the authority. The act currently limits the period of the tax to not more than five years.
House Bill 6021 would allow a PA 196 authority to levy a tax on property for up to 25 years, if the authority were seeking the levy for a fixed guideway project authorized under 49 USC 5309.
Before a PA 196 authority could levy any tax on property, the tax would have to be approved by the voters within the limits of the public authority. House Bill 6021 would not change the provisions of current law which require the approval of a majority of the electors residing in the public authority before the authority can levy a property tax.
Although the ITP is currently the only PA 196 agency to have a fixed guideway project authorized under 49 USC 5309, House Bill 6021 differs from similar bills introduced in the current session of the legislature (House Bill 4993 and House Bill 5560) in that it does not limit the bill's application to authorities in areas meeting certain population criteria.
Enrolled House Bill 4993 was vetoed by the Governor on December 27, 2005, primarily because of the population criteria. A copy of the Governor's veto message is found in House Journal No. 110, page 2600
http://www.legislature.mi.gov/(3uftu355ndrmln55hk4e2455)/documents/2005-2006/journal/house/pdf/2005-HJ-12-29-110.pdf
Fiscal Analyst: William Hamilton
■ This analysis was prepared by nonpartisan House staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.
LIST OF PUBLIC TRANSIT AGENCIES IN MICHIGAN AND LEGAL BASIS OF ORGANIZATION
Agency Public Act (see description below)
Adrian 279
Allegan County 94
Alma 279
Altran Transit Authority 196
Alpena 279
Ann Arbor Transportation Authority 55
Antrim County 94
Barry County 94
Battle Creek 279
Bay Area Transportation Authority (Grand Traverse & Leelanau counties) 196
Bay Metropolitan Transportation Authority (BayCounty) 196
BeaverIsland Transportation Authority 196
Belding 279
Berrien County 94
Blue Water Area Transportation Commission (Port Huron) 7
Branch Area Transit Authority 196
Buchanan 279
Cadillac/Wexford Transit Authority 7
Capital Area Transportation Authority (Lansing) 55
Caro Transit Authority 196
CassCounty Transportation Authority 196
Charlevoix County 94
Cheboygan County 94
Clare County 94
Clinton Area Transit System 196
CrawfordCounty Transportation Authority 196
Delta Area Transit Authority 196
Detroit 279
Detroit Transportation Corporation (People Mover) 7
Dowagiac 279
EatonCounty Transportation Authority 7
Eastern Upper Peninsula Transportation Authority (Chippewa County) 7
Gladwin County 94
GogebicCounty Transit 196
Grand Haven 279
Greater Lapeer Transportation Authority 196
Greenville 279
Hancock 279
Hillsdale 279
Holland 279
Houghton 279
Huron County 94
Ionia 279
Iosco County 94
Interurban Transit Authority (Saugatuck) 196
Interurban Transit Partnership (Grand Rapids) 196
IsabellaCounty Transportation Commission 7
Jackson Transportation Authority, City of 196
Kalamazoo 279
Kalkaska Public Transit Authority 196
Lenawee County 94
Livingston County 94
Ludington Mass Transportation Authority 196
Manistee County 94
MarquetteCountyTransit Authority 7
Marshall 279
Mass Transportation Authority (Flint) 55
Mecosta Osceola Transit Authority 196
Midland County 94
Midland 279
Milan 279
Muskegon County 94
Niles 279
Ogemaw County 94
Ontonagon County 94
Otsego County 94
RoscommonCounty Transportation Authority 196
St. Joseph County Transit Authority 196
Saginaw Transit Authority Regional Services 196
Sanilac County 94
Sault Ste. Marie 279
Schoolcraft County 94
Shiawassee Area Transportation Agency 7
Suburban Mobility Authority for Regional Transportation (SMART) 204
(Wayne, Oakland, Macomb, Monroe counties)
Thunder Bay Transportation Authority 196
(Alcona, Alpena, Montmorency counties)
Twin Cities Area Transportation Authority (BentonHarbor) 55
Van Buren County 94
YatesTownship 359
[List provided by the Michigan Department of Transportation, Bureau of Multi-modal Transportation Services, Passenger Transportation Services Division]
Public Acts Governing Michigan Public Transit Agencies
Public Act 7 of 1967, Urban Cooperation Act
Authorizes authorities organized under interlocal agreements.
Public Act 55 of 1963, Mass Transportation Authorities Act
Authorizes authorities in cities of less than 300,000.
Public Act 94 of 1933, Revenue Bond Act
Authorizes public corporations to make public improvements, including transportation systems. Many county transportation systems are organized under this act.
Public Act 196 of 1986, Public Transportation Authority Act
Authorizes two or more political subdivisions (counties, cities, villages, townships) to form a public authority.
Public Act 204 of 1967, Metropolitan Transportation Authorities Act
Authorizes regional transportation authorities formed by two or more counties in metropolitan area. Governing statue for SMART and the Regional Transit Coordinating Council (RTCC) southeast Michigan.
Public Act 279 of 1909, Home Rule City Act
Authorizes city transit systems.
Public Act 359 of 1947, Charter Township Act
Provides authority for charter townships.