Limiting Local Regulations – Disabling Paid Sick Leave

The “Local Government Labor Regulatory Limitation Act” landed on Governor Snyder’s desk at 1:50pm Monday June 22. It’s been passed by the House, revised during Senate review and passed by the Senate with House approval. Coincidentally, CBS’ Sunday Morning held a segment on Paid Sick Leave and how far behind the US in worldwide policy.

paidleavepoll
Source: CBS News / NY Times

Knowing full well that HB4052 is intended to kill the movement for Michigan to enable Paid Sick Days, what action will Governor Snyder take? Let’s look more closely and the answer is obvious, and Michigan’s roads are impacted too. You can call the Governor’s Office at (517) 335-7858, or use this online form.

Continue reading Limiting Local Regulations – Disabling Paid Sick Leave

Citizen Driven Watchdogs to Campaign Finance

Annotating the internet is a form of citizen engagement that shouldn’t be taken lightly. Posts and news stories on the internet are very influential. They can be and often are written from a particular slant or point of view. The number of tools is rising rapidly and becoming more sophisticated.

Read further to learn about

  • Genius.com – annotating the internet as it was originally intended.
  • Greenhouse – revealing financial backing behind members of congress
  • Reform.to – showing the support in Congress for fundamental reform of the corrupting influence of money in politics.

These tools are enabling the common public to take an active role in dialogue regarding the news.

Continue reading Citizen Driven Watchdogs to Campaign Finance

May 5th Vote – Calling Our Poor to the Polls

Bottom Line: The proposal assists our poorest and most in need the most.

I’ve been coming to the point of realizing a few things about Proposal 15-1 for May 5th. There are 10 bills passed at the end of 2014 by the legislature that Governor Snyder tie-barred to this proposal. Therefore it is impacting much more than sales tax and the health of Michigan roads.  The Green Party of Michigan has been in opposition to the amendment to the State Constitution that would raise sales tax and the manner tie-barring of so much legislation.  

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Bright and early – ballot 00001 in my precinct

I came out early opposed to the proposal, but I’m looking more closely for the good things, so I hope this helps you – even if it is on voting day and you may have already cast your vote. Please encourage people to get to the polls and mark what might be a solitary circle on the ballot. There are some municipalities with local issues on the ballot today.

Support for Proposal 15-1

20150504-PressConferenceFlyerFINALGovernor Rick Snyder, Mayor Mike Duggan of Detroit and Wayne County Executive Warren Evans are in support of the proposal.A press conference was held Monday, May 4th at 2pm in Eastern Market.
This is sponsored by a coalition created for the cause called SafeRoadsYes.com. It looks like funds the group could have used at the polls went into skinning a promotional bus.

This is a vote by the people for the people. 

Bringing the proposal forward as a Special Election, without elected offices, means the poor who come to vote will not have the opportunity to change the persons in the seats that create laws. Our mainstream media would believe that the majority (their market) do not consider themselves poor or in need – therefore the common stance taken is against the proposal and offering articles that focus on interests of their perceived market, which isn’t really about caring for the poor but protecting a position of wealth from sacrifice. In this sense most writing will tend to be conservative in nature.

The Detroit Free Press offered the article “Group urges detailed wording for May 5 sales tax vote” on February 4, 2015:

The proposal would increase the state sales tax to 7% from 6% and remove the sales tax from fuel sales while increasing fuel taxes. It’s expected to raise an extra $1.2 billion a year for roads, $300 million for K-12 schools, $100 million for transit and $95 million for local governments. Bills tied to the vote would also make other changes, such as fully restoring the Earned Income Tax Credit for low-income families that was scaled back in 2011.

“It is the position of Concerned Taxpayers of Michigan that state law requires voters be informed of each and every subject addressed by each of the laws that take effect if and only if the proposal passes, as well as the direct effect of the constitutional amendment itself,” former State Representative Tom McMillin (R-Rochester Hills) said in a letter sent today to state Elections Director Chris Thomas.

There are 10 laws packed into this proposal because of the manner in which Governor Snyder approved bills during the lame-duck session that have them tied to the passage of this Constitutional amendment. 

Annual state highway spending per capita and 2012 national rank. (Detroit Free Press)
Annual state highway spending per capita and 2012 national rank. (Detroit Free Press)

Michigan is last in the country on spending for the maintenance of its roads. Our roads are so bad that they have been linked to the deaths of motorists. 1)More than twice as many Michigan roads are in poor condition as good, Detroit Free Press2)Michigan’s neighbors spend more per capita on road funding, Michigan Public Radio

Consider Voting YES

The impacts of the 10 tie-barred bills if passed will influence in these ways: 

  • Low-income families will regain an Earned Income Credit that was taken away in 2011.
  • $100 million additional funds for “other transportation services”, which will mostly go toward mass transit.
  • School Aid Fund (SAF), which targets low income education will see an increase.
  • Vocational training centers will see SAF opened for use along with Community Colleges, however 4 year universities will be removed. The emphasis here is to ensure people get into jobs more easily. Not every job needs a bachelors degree or better and we need to encourage those that don’t.
  • Registration of new vehicles and heavy-load most specifically will have increased vehicle registration fees that will not have the same discounting over time that is currently used. This will encourage people to hold onto their vehicles longer and discourage large commercial and personal vehicles.
  • Taxes on fuel will have both a top and bottom cap, which currently only holds a bottom cap. The change in wholesale taxes will take place October 1, 2015.
  • Statutory Sales Taxes allocated toward local government will see a decrease. There are two methods for sales taxes to be distributed at present.

Videos Discussing Provisions of Proposal 15-1

This video from Citizens Research Council of Michigan offers discussion of these various provisions with a slide presentation, and plenty of graphs. 

Reforming Statutory State Revenue Sharing of Sales Taxes

The State of Michigan has long operated a program of sharing state-collected tax revenues with its local governments. For 40+ years, the distribution of that revenue adhered to need based formulas that attempted to equalize the revenue raising abilities of local governments. That program has been all but abandoned and now the state is considering if and how it could be redesigned. — CRC Michigan

Business Tax Credits Sacrificing Fiscal Responsibility

The State of Michigan opened up business tax credits through MEGA (Michigan Economic Growth Authority) and MEDC (Michigan Economic Development Corporation) from 2005-2011. Credits offered to business during this time had no specificity requiring a year or more notice of when to be cashed in … and random, unannounced cashing in on credits will continue to 2023 before the backlog of $9.3 billion in credits received are fully claimed. This failed oversight of the law passed is creating big problems now. 

The effect of these credits being cashed in for2014 impacted the budget for the State of Michigan and saw the use of School Aid Funds (SAF) appropriated to cover the short-fall. Connecting the issues – that means the education of those in need was sacrificed to the random claiming of business tax credits. Since this has been done it creates precedent for future robbing of SAF due to businesses exercising their claim to credits.

NOTE: Proposal 1 aims to increase SAF by $300 million. Is this so it can be robbed each year to balance the short-sighted granting of business tax credits?

PROPOSAL 15-1

A proposal to amend the State Constitution to increase the sales/use tax from 6% to 7% to replace and supplement reduced revenue to the School Aid Fund and local units of government caused by the elimination of the sales/use tax on gasoline and diesel fuel for vehicles operating on public roads, and to give effect to laws that provide additional money for roads and other transportation purposes by increasing the gas tax and vehicle registration fees.

The proposed constitutional amendment would:

  • Eliminate sales / use taxes on gasoline / diesel fuel for vehicles on public roads.

    Increase portion of use tax dedicated to School Aid Fund (SAF).

  • Expand use of SAF to community colleges and career / technical education, and prohibit use for 4-year colleges / universities.

  • Give effect to laws, including those that:

    • Increase sales / use tax to 7%, as authorized by constitutional amendment.
    • Increase gasoline / diesel fuel tax and adjust annually for inflation, increase vehicle registration fees, and dedicate revenue for roads and other transportation purposes.
    • Expand competitive bidding and warranties for road projects.
    • Increase earned income tax credit. Should this proposal be adopted?

Summary of the ballot proposal by the House Fiscal Agency can be downloaded and reviewed. 


The full text of the Constitutional amendment and laws passed can be found below.

Table of Contents

House Joint Resolution UU (the constitutional amendment)
Public Act 467 of 2014
Public Act 468 of 2014
Public Act 469 of 2014
Public Act 470 of 2014
Public Act 471 of 2014
Public Act 472 of 2014
Public Act 473 of 2014
Public Act 474 of 2014
Public Act 475 of 2014
Public Act 476 of 2014


ENROLLED HOUSE JOINT RESOLUTION UU

A JOINT RESOLUTION proposing an amendment to the state constitution of 1963, by amending sections 8, 10, and 11 of article IX, to increase the maximum sales tax rate and use tax rate permitted under law, to exempt gasoline and diesel fuel from the sales tax and use tax, to dedicate a portion of sales tax revenue and use tax revenue, and to revise the permissible uses for payments from the school aid fund.

Resolved by the Senate and House of Representatives of the state of Michigan, That the following amendment to the state constitution of 1963, to increase the maximum sales tax rate and use tax rate permitted under law, to exempt gasoline and diesel fuel from the sales tax and use tax, to dedicate a portion of sales tax revenue and use tax revenue, and to revise the permissible uses for payments from the school aid fund, is proposed, agreed to, and submitted to the people of the state:

ARTICLE IX

Sec. 8. Except as provided in this section, the Legislature shall not impose a sales tax on retailers at a rate of more than 5% of their gross taxable sales of tangible personal property.

Beginning May 1, 1994, the sales tax shall be imposed on retailers at an additional rate of 2% of their gross taxable sales of tangible personal property not exempt by law and the use tax at an additional rate of 2%. The proceeds of the sales and use taxes imposed at the additional rate of 2% shall be deposited in the state school aid fund established in section 11 of this article. The allocation of sales tax revenue required or authorized by sections 9 and 10 of this article does not apply to the revenue from the sales tax imposed at the additional rate of 2%.

No sales tax or use tax shall be charged or collected from and after January 1, 1975 on the sale or use of prescription drugs for human use, or on the sale or use of food for human consumption except in the case of prepared food intended for immediate consumption as defined by law. This provision shall not apply to alcoholic beverages.

No sales tax or use tax shall be charged or collected from and after October 1, 2015 on the sale or use of gasoline or diesel fuel used to operate a motor vehicle on the public roads or highways of this state.

Sec. 10. Fifteen percent of all taxes imposed on retailers on taxable sales at retail of tangible personal property at a rate of not more than 5% shall be used exclusively for assistance to townships, cities and villages, on a population basis as provided by law. In determining population the legislature may exclude any portion of the total number of persons who are wards, patients or convicts in any tax supported institution.

Sec. 11. There shall be established a state school aid fund which shall be used exclusively for aid to school districts, public community colleges, public career and technical education programs, scholarships for students attending either public community colleges or public career and technical education programs, and school employees’ retirement systems, as provided by law. Sixty percent of all taxes imposed at a rate of not more than 5% on retailers on taxable sales at retail of tangible personal property, 100% of the proceeds of the sales and use taxes imposed at the additional rate of 2% provided for in section 8 of this article, and other tax revenues provided by law, shall be dedicated to this fund. In addition, an amount equal to 12.3% of the use tax imposed at a rate of not more than 5% shall be dedicated to this fund as provided by law. Payments from this fund shall be made in full on a scheduled basis, as provided by law. Beginning in the 1995-96 state fiscal year and each state fiscal year after 1995-96, the state shall guarantee that the total state and local per pupil revenue for school operating purposes for each local school district shall not be less than the 1994-95 total state and local per pupil revenue for school operating purposes for that local school district, as adjusted for consolidations, annexations, or other boundary changes. However, this guarantee does not apply in a year in which the local school district levies a millage rate for school district operating purposes less than it levied in 1994.


Public Act 467 of 2014

ENROLLED HOUSE BILL No. 4539

AN ACT to amend 1933 PA 167, entitled “An act to provide for the raising of additional public revenue by prescribing certain specific taxes, fees, and charges to be paid to the state for the privilege of engaging in certain business activities; to provide, incident to the enforcement thereof, for the issuance of licenses to engage in such occupations; to provide for the ascertainment, assessment and collection thereof; to appropriate the proceeds thereof; and to prescribe penalties for violations of the provisions of this act,” by amending sections 2, 4, 6a, and 25 (MCL 205.52, 205.54, 205.56a, and 205.75), sections 2 and 4 as amended by 2004 PA 173, section 6a as amended by 2013 PA 1, and section 25 as amended by 2012 PA 226, and by adding section 4dd.

The People of the State of Michigan enact:

Sec. 2. (1) Except as provided in section 2a, there is levied upon and there shall be collected from all persons engaged in the business of making sales at retail, by which ownership of tangible personal property is transferred for consideration, an annual tax for the privilege of engaging in that business equal to 7% of the gross proceeds of the business, plus the penalty and interest if applicable as provided by law, less deductions allowed by this act.

(2) The tax under subsection (1) also applies to the following:

(a) The transmission and distribution of electricity, whether the electricity is purchased from the delivering utility or from another provider, if the sale is made to the consumer or user of the electricity for consumption or use rather than for resale.

(b) The sale of a prepaid telephone calling card or a prepaid authorization number for telephone use, rather than for resale, including the reauthorization of a prepaid telephone calling card or a prepaid authorization number.

(c) A conditional sale, installment lease sale, or other transfer of property, if title is retained as security for the purchase but is intended to be transferred later.

(3) Any person engaged in the business of making sales at retail who is at the same time engaged in some other kind of business, occupation, or profession not taxable under this act shall keep books to show separately the transactions used in determining the tax levied by this act. If the person fails to keep separate books, there shall be levied upon him or her the tax provided for in subsection (1) equal to 7% of the entire gross proceeds of both or all of his or her businesses. The taxes levied by this section are a personal obligation of the taxpayer.

(4) A meal provided free of charge or at a reduced rate to an employee during work hours by a food service establishment licensed by the Michigan department of agriculture for the convenience of the employer is not considered transferred for consideration.

Sec. 4. (1) In computing the amount of tax levied under this act for any month, a taxpayer not subject to section 6(2) may deduct the amount provided by subdivision (a) or (b), whichever is greater:

(a) If the tax that accrued to this state from the sales at retail during the preceding month is remitted to the department on or before the twelfth day of the month in which remittance is due, 0.75% of the tax due at a rate of not more than 5% for the preceding monthly period, but not to exceed $20,000.00 of the tax due for that month. If the tax that accrued to this state from the sales at retail during the preceding month is remitted to the department after the twelfth day and on or before the twentieth day of the month in which remittance is due, 0.50% of the tax due at a rate of not more than 5% for the preceding monthly period, but not to exceed $15,000.00 of the tax due for that month.

(b) The tax at a rate of not more than 5% due on $150.00 of taxable gross proceeds for the preceding monthly period, or a prorated portion of $150.00 of the taxable gross proceeds for the preceding month if the taxpayer engaged in business for less than a month.

(2) Beginning January 1, 1999, in computing the amount of tax levied under this act for any month, a taxpayer who is subject to section 6(2) may deduct from the amount of the tax paid 0.50% of the tax due at a rate of not more than 5%.

(3) A deduction is not allowed under this section for payments of taxes made to the department after the day the taxpayer is required to pay, pursuant to section 6, the tax imposed by this act.

(4) If, pursuant to section 6(4), the department prescribes the filing of returns and the payment of the tax for periods in excess of 1 month, a taxpayer is entitled to a deduction from the tax collections remitted to the department for the extended payment period that is equivalent to the deduction allowed under subsection (1) or (2) for monthly periods.

(5) The department may prescribe the filing of estimated returns and annual periodic reconciliations as necessary to carry out the purposes of this section.

(6) A seller registered under the streamlined sales and use tax agreement may claim a deduction under this section if provided for in the streamlined sales and use tax administration act.

Sec. 4dd. Beginning October 1, 2015, the tax levied under this act does not apply to the sale of gasoline or diesel fuel used to operate a motor vehicle on the public roads or highways of this state.

Sec. 6a. (1) Through March 31, 2013, at the time of purchase or shipment from a refiner, pipeline terminal operator, or marine terminal operator, a purchaser or receiver of gasoline shall prepay a portion of the tax imposed by this act at the rate provided in this section to the refiner, pipeline terminal operator, or marine terminal operator for the purchase or receipt of gasoline. If the purchase or receipt of gasoline is made outside this state for shipment into and subsequent sale within this state, the purchaser or receiver, other than a refiner, pipeline terminal operator, or marine terminal operator, shall make the prepayment required by this section directly to the department. Prepayments for gasoline shall be made at a cents-per-gallon rate determined by the department and shall be based on 6% of the statewide average retail price of a gallon of self-serve unleaded regular gasoline as determined and certified by the department rounded up to the nearest 1/10 of 1 cent. A person that makes prepayments directly to the department shall make those prepayments according to the schedule in subsection (6).

(2) Beginning April 1, 2013 through October 1, 2015, at the time of purchase or shipment from a refiner, pipeline terminal operator, or marine terminal operator, a purchaser or receiver of fuel shall prepay a portion of the tax imposed by this act at the rates provided in this section to the refiner, pipeline terminal operator, or marine terminal operator for the purchase or receipt of fuel. If the purchase or receipt of fuel is made outside this state for shipment into and subsequent sale within this state, the purchaser or receiver, other than a refiner, pipeline terminal operator, or marine terminal operator, shall make the prepayment required by this section directly to the department. Prepayments for gasoline shall be made at a cents-per-gallon rate determined by the department and shall be based on 6% of the statewide average retail price of a gallon of self-serve unleaded regular gasoline as determined and certified by the department rounded up to the nearest 1/10 of 1 cent. Prepayments for diesel fuel shall be made at a cents-per-gallon rate determined by the department and shall be based on 6% of the statewide average retail price of a gallon of undyed No. 2 ultra-low sulfur diesel fuel as determined and certified by the department rounded up to the nearest 1/10 of 1 cent. A person that makes prepayments directly to the department shall make those prepayments according to the schedule in subsection (6).

(3) Through March 31, 2013, the rate of prepayment applied pursuant to subsection (1) shall be determined every 3 months by the department unless the department certifies that the change in the statewide average retail price of a gallon of self-serve unleaded regular gasoline has been less than 10% since the establishment of the rate of prepayment then in effect.

(4) Beginning April 1, 2013, the rates of prepayment applied pursuant to subsection (2) shall be determined every month by the department. Notwithstanding subsection (3), the department shall publish notice of the rates of prepayment applicable to gasoline and diesel fuel pursuant to subsection (2) not later than the tenth day of the month immediately preceding the month in which the rate is effective.

(5) A person subject to tax under this act that makes prepayment to another person as required by this section for gasoline may claim an estimated prepayment credit on its regular monthly return filed pursuant to section 6. The credit shall be for prepayments made during the month for which the return is required and shall be based upon the difference between prepayments made in the immediately preceding month and collections of prepaid tax received from sales or transfers during the month for which the return required under section 6 is made. A sale or transfer for which collection of prepaid tax is due the taxpayer is subject to a bad debt deduction under section 4i, whether or not the sale or transfer is a sale at retail. The credit shall not be reduced because of actual shrinkage. A taxpayer that does not, in the ordinary course of business, sell gasoline in each month of the year may, with the approval of the department, base the initial prepayment deduction in each tax year on prepayments made in a month other than the immediately preceding month. The difference in actual prepayments shall be reconciled on the annual return in accordance with procedures prescribed by the department.

(6) Notwithstanding the other provisions for the payment and remitting of tax due under this act, a refiner, pipeline terminal operator, or marine terminal operator shall account for and remit to the department the prepayments received pursuant to this section in accordance with the following schedule:

(a) On or before the twenty-fifth of each month, prepayments received after the end of the preceding month and before the sixteenth of the month in which the prepayments are made.

(b) On or before the tenth of each month, payments received after the fifteenth and before the end of the preceding month.

(7) A refiner, pipeline terminal operator, or marine terminal operator that fails to remit prepayments made by a purchaser or receiver of fuel is subject to the penalties provided by 1941 PA 122, MCL 205.1 to 205.31.

(8) The refiner, pipeline terminal operator, or marine terminal operator shall not receive a deduction under section 4 for receiving and remitting prepayments from a purchaser or receiver pursuant to this section.

(9) The purchaser or receiver of fuel that makes prepayments is not subject to further liability for the amount of the prepayment if the refiner, pipeline terminal operator, or marine terminal operator fails to remit the prepayment.

(10) A person subject to tax under this act that makes prepayment to another person as required by this section for diesel fuel may claim an estimated prepayment credit on its regular monthly return filed pursuant to section 6. The credit shall be for prepayments made during the month for which the return is required and shall be based upon the difference between the prepayments made in the immediately preceding month and collections of prepaid tax received from sales or transfers during the month for which the return required under section 6 is made. A sale or transfer for which collection of prepaid tax is due the taxpayer is subject to a bad debt deduction under section 4i, whether or not the sale or transfer is a sale at retail. The credit shall not be reduced because of actual shrinkage. A taxpayer that does not, in the ordinary course of business, sell diesel fuel in each month of the year may, with the approval of the department, base the initial prepayment deduction in each tax year on prepayments made in a month other than the immediately preceding month. Estimated prepayment credits claimed with the return due in April 2013 shall be based on the taxpayer’s retail sales of diesel fuel in March 2013. The difference in actual prepayments shall be reconciled on the annual return in accordance with procedures prescribed by the department. Repayment of the credit claimed on the return due in April 2013 shall be made by the earlier of the date that the taxpayer stops selling diesel fuel or October 15, 2013.

(11) As used in this section:

(a) “Blendstock” includes all of the following:

(i) Any petroleum product component of fuel, such as naphtha, reformate, or toluene.

(ii) Any oxygenate that can be blended for use in a motor fuel.

(b) “Boat terminal transfer” means a dock, a tank, or equipment contiguous to a dock or a tank, including equipment used in the unloading of fuel from a ship and in transferring the fuel to a tank pending wholesale bulk reshipment.

(c) “Diesel fuel” means any liquid other than gasoline that is capable of use as a fuel or a component of a fuel in a motor vehicle that is propelled by a diesel-powered engine or in a diesel-powered train. Diesel fuel includes number 1 and number 2 fuel oils and mineral spirits. Diesel fuel also includes any blendstock or additive that is sold for blending with diesel fuel and any liquid prepared, advertised, offered for sale, sold for use as, or used in the generation of power for the propulsion of a diesel-powered engine, airplane, or marine vessel. An additive or blendstock is presumed to be sold for blending unless a certification is obtained for federal purposes that the substance is for a use other than blending for diesel fuel. Diesel fuel does not include dyed diesel fuel, kerosene, or an excluded liquid.

(d) “Dyed diesel fuel” means diesel fuel that is dyed in accordance with internal revenue service rules or pursuant to any other internal revenue service requirements, including any invisible marker requirements.

(e) “Excluded liquid” means that term as defined in 26 CFR 48.4081-1.

(f) “Fuel” means gasoline and diesel fuel that is subject to tax under this act, collectively, except when gasoline or diesel fuel is referred to separately.

(g) “Gasoline” means and includes gasoline, alcohol, gasohol, casing head or natural gasoline, benzol, benzine, naphtha, methanol, any blendstock additive, or other product that is sold for blending with gasoline or for use on the road, other than products typically sold in containers of less than 5 gallons. Gasoline also includes a liquid prepared, advertised, offered for sale, sold for use as, or used in the generation of power for the propulsion of a motor vehicle, airplane, or marine vessel, including a product obtained by blending together any 1 or more products of petroleum, with or without another product, and regardless of the original character of the petroleum products blended, if the product obtained by the blending is capable of use in the generation of power for the propulsion of a motor vehicle, airplane, or marine vessel. The blending of all of the above-named products, regardless of their name or characteristics, shall conclusively be presumed to have been done to produce fuel, unless the product obtained by the blending is entirely incapable of use as fuel. An additive or blendstock is presumed to be sold for blending unless a certification is obtained for federal purposes that the substance is for a use other than blending for gasoline. Gasoline does not include diesel fuel, dyed diesel fuel, kerosene, or an excluded liquid.

(h) “Kerosene” means all grades of kerosene, including, but not limited to, the 2 grades of kerosene, No. 1-K and No. 2-K, commonly known as K-1 kerosene and K-2 kerosene, respectively, described in American society for testing and materials specification D-3699, in effect on January 1, 1999, and kerosene-type jet fuel described in American society for testing and materials specification D-1655 and military specifications MIL-T-5624r and MIL-T-83133d (grades jp-5 and jp-8), and any successor internal revenue service rules or regulations, as the specification for kerosene and kerosene-type jet fuel. Kerosene does not include an excluded liquid.

(i) “Marine terminal operator” means a person that stores fuel at a boat terminal transfer.

(j) “Pipeline terminal operator” means a person that stores fuel in tanks and equipment used in receiving and storing fuel from interstate and intrastate pipelines pending wholesale bulk reshipment.

(k) “Purchase” or “shipment” does not include an exchange of fuel or an exchange transaction between refiners, pipeline terminal operators, or marine terminal operators.

(l) “Refiner” means a person that manufactures or produces fuel by any process involving substantially more than the blending of fuel.

Sec. 25. (1) All money received and collected under this act shall be deposited by the department in the state treasury to the credit of the general fund, except as otherwise provided in this section.

(2) Fifteen percent of the collections of the tax imposed at a rate of not more than 5% shall be distributed to cities, villages, and townships pursuant to the Glenn Steil state revenue sharing act of 1971, 1971 PA 140, MCL 141.901 to 141.921.

(3) Sixty percent of the collections of the tax imposed at a rate of not more than 5% shall be deposited in the state school aid fund established in section 11 of article IX of the state constitution of 1963 and distributed as provided by law. In addition, all of the collections of the tax imposed at the additional rate of 2% approved by the electors March 15, 1994 shall be deposited in the state school aid fund.

(4) Not less than 27.9% of 25% of the collections of the general sales tax imposed at a rate of not more than 5% directly or indirectly on fuels sold to propel motor vehicles upon highways, on the sale of motor vehicles, and on the sale of the parts and accessories of motor vehicles by new and used car businesses, used car businesses, accessory dealer businesses, and gasoline station businesses as classified by the department of treasury shall be deposited each year into the comprehensive transportation fund created in section 10b of 1951 PA 51, MCL 247.660b.

(5) For the fiscal year ending September 30, 2013 only, an amount equal to 18% of the collections of the tax imposed at a rate of not more than 5% under this act from the sale of motor fuel, as that term is defined in section 4 of the motor fuel tax act, 2000 PA 403, MCL 207.1004, shall be distributed as follows:

(a) An amount sufficient to match available federal highway funds shall be deposited into the state trunk line fund created in section 11 of 1951 PA 51, MCL 247.661, for the purpose of matching federal aid highway funds as those federal funds are made available to this state, but not less than 39.1% subject to subdivision (c).

(b) After the distribution under subdivision (a), any remaining balance, subject to subdivision (c), shall be distributed as follows:

(i) 66% to the county road commissions of this state, which distribution shall be administered under section 12 of 1951 PA 51, MCL 247.662.

(ii) 34% to the cities and villages of this state, which distribution shall be administered under section 13 of 1951 PA 51, MCL 247.663.

(c) Funds distributed under this subsection shall not exceed $100,000,000.00.

(6) An amount equal to the collections of the tax imposed at a rate of not more than 5% under this act from the sale at retail of computer software as defined in section 1a shall be deposited in the Michigan health initiative fund created in section 5911 of the public health code, 1978 PA 368, MCL 333.5911, and shall be considered in addition to, and is not intended as a replacement for any other money appropriated to the department of community health. The funds deposited in the Michigan health initiative fund on an annual basis shall not be less than $9,000,000.00 or more than $12,000,000.00.

(7) The balance in the state general fund shall be disbursed only on an appropriation or appropriations by the legislature.

Enacting section 1. This amendatory act does not take effect unless House Joint Resolution UU of the 97th Legislature becomes a part of the state constitution of 1963 as provided in section 1 of article XII of the state constitution of 1963.

Enacting section 2. This amendatory act does not take effect unless all of the following bills of the 97th Legislature are enacted into law [they were]:

(a) Senate Bill No. 80.

(b) Senate Bill No. 423.

(c) Senate Bill No. 847.

(d) House Bill No. 5477.

(e) House Bill No. 5492.

Enacting section 3. This amendatory act takes effect October 1, 2015.


Public Act 468 of 2014

ENROLLED HOUSE BILL No. 5477

AN ACT to amend 2000 PA 403, entitled “An act to prescribe a tax on the sale and use of certain types of fuel in motor vehicles on the public roads or highways of this state and on certain other types of gas; to prescribe the manner and the time of collection and payment of this tax and the duties of officials and others pertaining to the payment and collection of this tax; to provide for the licensing of persons involved in the sale, use, or transportation of motor fuel and the collection and payment of the tax imposed by this act; to prescribe fees; to prescribe certain other powers and duties of certain state agencies and other persons; to provide for exemptions and refunds and for the disposition of the proceeds of this tax; to provide for appropriations from the proceeds of this tax; to prescribe remedies and penalties for the violation of this act; and to repeal acts and parts of acts,” by amending sections 2, 3, 5, 6, 8, 22, 40, 45, 53, 63, 122, 143, 151, 152, 153, 154, and 155 (MCL 207.1002, 207.1003, 207.1005, 207.1006, 207.1008, 207.1022, 207.1040, 207.1045, 207.1053, 207.1063, 207.1122, 207.1143, 207.1151, 207.1152, 207.1153, 207.1154, and 207.1155), sections 2, 5, and 122 as amended by 2002 PA 668, section 3 as amended by 2006 PA 277, and section 8 as amended by 2006 PA 268.

The People of the State of Michigan enact:

Sec. 2. As used in this act:

(a) “Alcohol” means fuel grade ethanol or a mixture of fuel grade ethanol and another product.

(b) “Average wholesale diesel fuel price” means the statewide average wholesale price of diesel fuel as determined by the department based upon a 12-month rolling average of the wholesale diesel fuel price. For the rate effective October 1, 2015 under section 8(1)(b), the 12-month rolling average period begins on July 1, 2013 and ends on June 30, 2014. For the rate effective October 1, 2016 and the rate in effect each year thereafter, the 12-month rolling average period ends on the last day of the month that is 3 months prior to the date on which the rate determined under section 8(1)(b) becomes effective.

(c) “Average wholesale gasoline price” means the statewide average wholesale price of gasoline as determined by the department based upon a 12-month rolling average of the wholesale gasoline price. For the rate effective October 1, 2015 under section 8(1)(a), the 12-month rolling average period begins on July 1, 2013 and ends on June 30, 2014. For the rate effective October 1, 2016 and the rate in effect each year thereafter, the 12-month rolling average period ends on the last day of the month that is 3 months prior to the date on which the rate determined under section 8(1)(a) becomes effective.

(d) “Blendstock” means and includes any petroleum product component of motor fuel, such as naphtha, reformate, or toluene; or any oxygenate that can be blended for use in a motor fuel.

(e) “Blended motor fuel” means a mixture of motor fuel and another liquid, other than a de minimis amount of a product including, but not limited to, carburetor detergent or oxidation inhibitor, that can be used as motor fuel in a motor vehicle.

(f) “Blender” means and includes any person who produces blended motor fuel outside of the bulk transfer/terminal system.

(g) “Blends” or “blending” means the mixing of 1 or more petroleum products, with or without another product, regardless of the original character of the product blended, if the product obtained by the blending is capable of use in the generation of power for the propulsion of a motor vehicle, an airplane, or a marine vessel. Blending does not include mixing that occurs in the process of refining by the original refiner of crude petroleum or the blending of products known as lubricating oil in the production of lubricating oils and greases.

(h) “Bulk end user” means a person who receives into the person’s own storage facilities by transport truck or tank wagon motor fuel for the person’s own consumption.

(i) “Bulk plant” means a motor fuel storage and distribution facility that is not a terminal and from which motor fuel may be withdrawn by a tank wagon, a transport truck, or a marine vessel.

(j) “Bulk transfer” means a transfer of motor fuel from 1 location to another by pipeline tender or marine delivery within the bulk transfer/terminal system, including, but not limited to, all of the following transfers:

(i) A marine vessel movement of motor fuel from a refinery or terminal to a terminal.

(ii) Pipeline movements of motor fuel from a refinery or terminal to a terminal.

(iii) Book transfers of motor fuel within a terminal between licensed suppliers before completion of removal across the terminal rack.

(iv) Two-party exchanges between licensed suppliers.

(k) “Bulk transfer/terminal system” means the motor fuel distribution system consisting of refineries, pipelines, marine vessels, and terminals. Motor fuel in a refinery, pipeline, terminal, or a marine vessel transporting motor fuel to a refinery or terminal is in the bulk transfer/terminal system. Motor fuel in a fuel storage facility including, but not limited to, a bulk plant that is not part of a refinery or terminal, in the fuel supply tank of any engine or motor vehicle, in a marine vessel transporting motor fuel to a fuel storage facility that is not in the bulk transfer/terminal system, or in any tank car, rail car, trailer, truck, or other equipment suitable for ground transportation is not in the bulk transfer/terminal system.

(l) “Carrier” means an operator of a pipeline or marine vessel engaged in the business of transporting motor fuel above the terminal rack.

(m) “Commercial motor vehicle” means a motor vehicle licensed as a qualified commercial motor vehicle under the motor carrier fuel tax act, 1980 PA 119, MCL 207.211 to 207.234, or a motor vehicle licensed under an international fuel tax agreement under section 2a of the motor carrier fuel tax act, 1980 PA 119, MCL 207.212a.

(n) “Dead storage” is the amount of motor fuel that cannot be pumped out of a motor fuel storage tank because the motor fuel is below the mouth of the tank’s draw pipe. The amount of motor fuel in dead storage is 200 gallons for a tank with a capacity of less than 10,000 gallons and 400 gallons for a tank with a capacity of 10,000 gallons or more.

(o) “Denaturants” means gasoline, natural gasoline, gasoline components, or toxic or noxious materials added to fuel grade ethanol to make it unsuitable for beverage use but not unsuitable for automotive use.

(p) “Department” means the department of treasury or its designee.

(q) “Destination state” means a state, Canadian province or territory, or foreign country to which motor fuel is directed for export.

(r) “Diesel fuel” means any liquid other than gasoline that is capable of use as a fuel or a component of a fuel in a motor vehicle that is propelled by a diesel-powered engine or in a diesel-powered train. Diesel fuel includes number 1 and number 2 fuel oils, kerosene, dyed diesel fuel, and mineral spirits. Diesel fuel also includes any blendstock or additive that is sold for blending with diesel fuel, any liquid prepared, advertised, offered for sale, sold for use as, or used in the generation of power for the propulsion of a diesel-powered engine, airplane, or marine vessel. An additive or blendstock is presumed to be sold for blending unless a certification is obtained for federal purposes that the substance is for a use other than blending for diesel fuel. Diesel fuel does not include an excluded liquid.

(s) “Dyed diesel fuel” means diesel fuel that is dyed in accordance with internal revenue service rules or pursuant to any other internal revenue service requirements, including any invisible marker requirements.

(t) “Eligible purchaser” means a person who has been authorized by the department under section 75 to make an election under section 74.

(u) “Excluded liquid” means that term as defined in 26 CFR 48.4081-1.

(v) “Export” means to obtain motor fuel in this state for sale or other distribution outside of this state. Motor fuel delivered outside of this state by or for the seller constitutes an export by the seller and motor fuel delivered outside of this state by or for the purchaser constitutes an export by the purchaser.

(w) “Exporter” means a person who exports motor fuel.

Sec. 3. As used in this act:

(a) “Fuel feedstock user” means a person who receives motor fuel for the person’s own use in the manufacture or production of any substance other than motor fuel.

(b) “Fuel grade ethanol” means the American society for testing and materials standard in effect on April 1, 2001 as the D-4806 specification for denatured fuel grade ethanol for blending with gasoline.

(c) “Fuel transportation vehicle” means a vehicle designed or used to transport motor fuel on the public roads or highways. Fuel transportation vehicle includes, but is not limited to, a transport truck and a tank wagon. Fuel transportation vehicle does not include a vehicle transporting a nurse tank or limited volume auxiliary-mounted supply tank used for fueling an implement of husbandry.

(d) “Gallon” means a unit of liquid measure as customarily used in the United States containing 231 cubic inches, or 4 quarts, or its metric equivalent expressed in liters. Where the term gallon appears in this act, the term liters is interchangeable so long as the equivalence of a gallon and 3.785 liters is preserved. A quantity required to be furnished under this act may be specified in liters when authorized by the department.

(e) “Gasohol” means a blended motor fuel composed of gasoline and fuel grade ethanol.

(f) “Gasoline” means gasoline, alcohol, gasohol, casing head or natural gasoline, benzol, benzine, naphtha, and any blendstock additive, or other product including methanol that is sold for blending with gasoline or for use on the road other than products typically sold in containers of less than 5 gallons. Gasoline also includes a liquid prepared, advertised, offered for sale, sold for use as, or used in the generation of power for the propulsion of a motor vehicle, airplane, or marine vessel, including a product obtained by blending together any 1 or more products of petroleum, with or without another product, and regardless of the original character of the petroleum products blended, if the product obtained by the blending is capable of use in the generation of power for the propulsion of a motor vehicle, airplane, or marine vessel. The blending of all of the above named products, regardless of their name or characteristics, shall conclusively be presumed to have been done to produce motor fuel, unless the product obtained by the blending is entirely incapable of use as motor fuel. Gasoline also includes transmix. Gasoline does not include diesel fuel or leaded racing fuel. An additive or blendstock is presumed to be sold for blending unless a certification is obtained for federal purposes that the substance is for a use other than blending for gasoline.

(g) “Gross gallons” means the total measured product, exclusive of any temperature or pressure adjustments, considerations, or deductions, in gallons.

(h) “Implement of husbandry” means a farm tractor, a vehicle designed to be drawn or pulled by a farm tractor or animal, a vehicle that directly harvests farm products, or a vehicle that directly applies fertilizer, spray, or seeds to a farm field. Implement of husbandry does not include a motor vehicle licensed for use on the public roads or highways of this state.

(i) “Import” means to bring motor fuel into this state by motor vehicle, marine vessel, pipeline, or any other means. Import does not include bringing motor fuel into this state in the fuel supply tank of a motor vehicle if the motor fuel is used to power that motor vehicle. Motor fuel delivered into this state from outside of this state by or for the seller constitutes an import by the seller, and motor fuel delivered into this state from outside of this state by or for the purchaser constitutes an import by the purchaser.

(j) “Importer” means a person who imports motor fuel into this state.

(k) “Import verification number” means the number assigned by the department to an individual delivery of motor fuel by a transport truck, tank wagon, marine vessel, or rail car in response to a request for a number from an importer or transporter carrying motor fuel into this state for the account of an importer.

(l) “In this state” means the area within the borders of this state, including all territories within the borders owned by, held in trust by, or added to the United States of America.

(m) “Index” means the Detroit consumer price index for all urban consumers published by the United States bureau of labor statistics or, if that index ceases to be published by the United States bureau of labor statistics, the published index that most closely reflects the measure of inflation previously reported by the Detroit consumer price index for all urban consumers, as determined by the department.

(n) “Inflation rate” means the percentage change between the index for the period beginning on July 1, 2013 and ending on June 30, 2014 and the most recent index for the period beginning on July 1 and ending on June 30, converted to decimals and reduced by the total percentage change between 41.7 cents and the rate floor in effect on October 1 of the year immediately preceding the year in which the current rate is in effect, converted to decimals. If that number is negative, the inflation rate is 0.

(o) “Invoiced gallons” means the number of gallons actually billed on an invoice.

Sec. 5. (1) As used in this act:

(a) “Rack” means a mechanism for delivering motor fuel from a refinery, a terminal, or a marine vessel into a railroad tank car, a transport truck, a tank wagon, the fuel supply tank of a marine vessel, or other means of transfer outside of the bulk transfer/terminal system.

(b) “Rate ceiling” means a cents per gallon upper limit on the tax rate determined by the department and imposed on gasoline or diesel fuel under section 8(1)(a) and (b). Beginning with the rate in effect on October 1, 2015, rate ceiling means, for each rate determined under section 8(1), the sum of the rate floor for the applicable period plus 5 cents per gallon.

(c) “Rate floor” means a cents per gallon lower limit on the tax rate determined by the department and imposed on gasoline or diesel fuel under section 8(1)(a) and (b). Beginning with the rate in effect on October 1, 2015, rate floor means 41.7 cents. Beginning on October 1, 2016, the rate floor shall be the rate floor in effect for the immediately preceding year multiplied by 1 plus the lesser of the following:

(i) 0.05.

(ii) The inflation rate.

(d) “Refiner” means a person who owns, operates, or otherwise controls a refinery within the United States.

(e) “Refinery” means a facility used to produce motor fuel from crude oil, unfinished oils, natural gas liquids, or other hydrocarbons and from which motor fuel may be removed by pipeline, by marine vessel, or at a rack.

(f) “Removal” or “removed” means a physical transfer other than by evaporation, loss, or destruction of motor fuel from a terminal, manufacturing plant, customs custody, pipeline, marine vessel, or refinery that stores motor fuel.

(g) “Retail diesel dealer” means a person who sells or distributes diesel fuel to an end user in this state.

(h) “Retail marine diesel dealer” means a person who sells or distributes diesel fuel to an end user in this state for use in boats or other marine vessels.

(i) “Source state” means the state, Canadian province or territory, or foreign country from which motor fuel is imported.

(j) “Stationary engine” means a temporary or permanently affixed engine designed and used to supply power primarily for agricultural or construction work. Stationary engine includes, but is not limited to, an engine powering irrigation equipment, generators, or earth-moving equipment.

(k) “Supplier”, in addition to subsection (2), means a person who meets all of the following requirements:

(i) Is subject to the general taxing jurisdiction of this state.

(ii) Is registered under section 4101 of the internal revenue code for transactions in motor fuel in the bulk transfer/terminal distribution system.

(iii) Is any 1 of the following:

(A) The position holder in a terminal or refinery in this state.

(B) A person who imports fuel grade ethanol into this state.

(C) A person who acquires motor fuel from a terminal or refinery in this state from a position holder pursuant to a 2-party exchange.

(D) The position holder in a terminal or refinery outside this state with respect to motor fuel which that person imports into this state on its account.

(2) Supplier also means a person who either produces alcohol or alcohol derivative substances in this state or produces alcohol or alcohol derivative substances for import into a terminal in this state, or who acquires immediately upon import by transport truck, tank wagon, rail car, or marine vessel into a terminal or refinery or other storage facility that is not part of a terminal or refinery, alcohol or alcohol derivative substances. A terminal operator is not considered a supplier merely because the terminal operator handles motor fuel consigned to it within a terminal. Supplier includes a permissive supplier unless otherwise specifically provided in this act.

Sec. 6. As used in this act:

(a) “Tank wagon” means a straight truck having 1 or more compartments other than the fuel supply tank designed or used to carry motor fuel.

(b) “Tank wagon operator-importer” means a person who operates a tank wagon and imports motor fuel into this state from another state.

(c) “Tax” means a tax, interest, or penalty levied under this act.

(d) “Terminal” means a motor fuel storage and distribution facility that meets all of the following requirements:

(i) Is registered as a qualified terminal by the internal revenue service.

(ii) Is supplied by pipeline or marine vessel.

(iii) Has a rack from which motor fuel may be removed.

(e) “Terminal operator” means a person who owns, operates, or otherwise controls a terminal.

(f) “Transmix” means the mixed product that results from the buffer or interface of 2 different products in a pipeline shipment, or a mixture of 2 different products within a refinery or terminal that results in an off-grade mixture.

(g) “Transport truck” means a semitrailer combination rig designed or used for the purpose of transporting motor fuel over the public roads or highways.

(h) “Transporter” means an operator of a railroad or rail car, tank wagon, transport truck, or other fuel transportation vehicle engaged in the business of transporting motor fuel below the terminal rack.

(i) “Two-party exchange” means a transaction in which motor fuel is transferred from 1 licensed supplier or licensed permissive supplier to another licensed supplier or licensed permissive supplier where all of the following occur:

(i) The transaction includes a transfer from the person who holds the original inventory position for motor fuel in the terminal as reflected in the records of the terminal operator.

(ii) The exchange transaction is completed before removal across the rack from the terminal by the receiving licensed supplier or licensed permissive supplier.

(iii) The terminal operator in its books and records treats the receiving exchange party as the supplier that removes the product across a terminal rack for purposes of reporting the transaction to the department.

(j) “Ultimate vendor” means the person who sells motor fuel to the end user of the fuel.

(k) “Wholesale diesel fuel price” means the price per gallon of self-serve undyed No. 2 ultra-low sulfur diesel fuel charged by a licensed supplier to a purchaser at the time of removal from a terminal across the rack, as determined by the department, based on available pricing data that best reflect or approximate Michigan rack prices as reported by the United States energy information administration, the oil price information service, or a similar nationally recognized source for such pricing data, whether publicly available or available only by subscription. Wholesale diesel fuel price does not include the tax imposed by this act, prepaid sales tax under section 6a of the general sales tax act, 1933 PA 167, MCL 205.56a, federal excise tax under section 4081 of the internal revenue code, 26 USC 4081, any other federal tax upon motor fuel, or an environmental protection regulatory fee imposed under section 21508 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.21508.

(l) “Wholesale gasoline price” means the price per gallon of self-serve unleaded regular gasoline charged by a licensed supplier to a purchaser at the time of removal from a terminal across the rack, as determined by the department, based on available pricing data that best reflect or approximate Michigan rack prices as reported by the United States energy information administration, the oil price information service, or a similar nationally recognized source for such pricing data, whether publicly available or available only by subscription. Wholesale gasoline price does not include the tax imposed by this act, prepaid sales tax under section 6a of the general sales tax act, 1933 PA 167, MCL 205.56a, federal excise tax under section 4081 of the internal revenue code, 26 USC 4081, any other federal tax upon motor fuel, or an environmental protection regulatory fee imposed under section 21508 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.21508.

(m) “Wholesaler” means a person who acquires motor fuel from a supplier or from another wholesaler for subsequent sale and distribution at wholesale by a fuel transportation vehicle, rail car, or other motor vehicle.

Sec. 8. (1) Except as otherwise provided in this act and subject to the exemptions provided in this act, tax is imposed on motor fuel imported into or sold, delivered, or used in this state at the following rates:

(a) Through September 30, 2015, 19 cents per gallon on gasoline. Subject to subsection (2), beginning with the rate effective October 1, 2015 and October 1 of each year thereafter, the department shall determine a cents per gallon rate on gasoline that shall be derived by multiplying the average wholesale gasoline price by 14.9%, rounded up to the nearest 1/10 of 1 cent.

(b) Through September 30, 2015, 15 cents per gallon on diesel fuel. Subject to subsection (2), beginning with the rate effective October 1, 2015 and October 1 of each year thereafter, the department shall determine a cents per gallon rate on diesel fuel that shall be derived by multiplying the average wholesale diesel fuel price by 14.9%, rounded up to the nearest 1/10 of 1 cent.

(2) Beginning October 1, 2015, the rate determined under subsection (1)(a) or (b) shall not exceed the rate ceiling or be below the rate floor for any year for which the rate is in effect. If the rate determined under subsection (1)(a) or (b) exceeds the rate ceiling for any year for which the rate is in effect, the rate shall be equal to the rate ceiling. If the rate determined under subsection (1)(a) or (b) is below the rate floor for any year for which the rate is in effect, the rate shall be equal to the rate floor.

(3) Tax shall not be imposed under this section on motor fuel that is in the bulk transfer/terminal system.

(4) The collection, payment, and remittance of the tax imposed by this section shall be accomplished in the manner and at the time provided for in this act.

(5) Tax is also imposed at the rate described in subsection (1) on net gallons of motor fuel, including transmix, lost or unaccounted for, at each terminal in this state. The tax shall be measured annually and shall apply to the net gallons of motor fuel lost or unaccounted for that are in excess of 1/2 of 1% of all net gallons of fuel removed from the terminal across the rack or in bulk.

(6) It is the intent of this act:

(a) To require persons who operate a motor vehicle on the public roads or highways of this state to pay for the privilege of using those roads or highways.

(b) To impose on suppliers a requirement to collect and remit the tax imposed by this act at the time of removal of motor fuel unless otherwise specifically provided in this act.

(c) To allow persons who pay the tax imposed by this act and who use the fuel for a nontaxable purpose to seek a refund or claim a deduction as provided in this act.

(d) That the tax imposed by this act be collected and paid at those times, in the manner, and by those persons specified in this act.

(7) Bills of lading and invoices shall identify the blended product and the correct fuel product code. The motor fuel tax rate for each product shall be listed separately on each invoice. Licensees shall report the correct fuel product code for the blended product as required by the department. When fuel is blended below the terminal rack, new bills of lading and invoices shall be generated and submitted to the department upon request. All bills of lading and invoices shall meet the requirements under this act.

(8) Notwithstanding any other provision of this act, a facility in this state that produces motor fuel and distributes the fuel from a rack for purposes of this act is a terminal, shall obtain a terminal operator license, and shall comply with all terminal operator reporting requirements under this act. A position holder in a facility shall be licensed as a supplier and shall comply with all supplier requirements under this act.

(9) Beginning with the rates in effect on October 1, 2015 and October 1 of each year thereafter, the department shall publish notice of the tax rates under this section not later than 30 days before the effective date of the rates.

(10) A determination by the department of the average wholesale diesel fuel price, the average wholesale gasoline price, inflation rate, rate ceiling, rate floor, the wholesale diesel fuel price, the wholesale gasoline price, or the tax rates under this section is presumed to be correct and shall not be set aside unless an administrative tribunal or a court of competent jurisdiction finds the department’s determination to be clearly erroneous.

Sec. 22. (1) The tax imposed on gasoline shall be in lieu of all other taxes imposed or to be imposed upon the sale or use of gasoline by this state or any political subdivision of this state except for the taxes imposed by the general sales tax act, 1933 PA 167, MCL 205.51 to 205.78, and the use tax act, 1937 PA 94, MCL 205.91 to 205.111.

(2) The tax imposed on diesel fuel and alternative fuel shall be imposed in lieu of all other taxes imposed or to be imposed upon the sale or use of diesel fuel or alternative fuel by this state or a political subdivision of this state, except the taxes imposed by the general sales tax act, 1933 PA 167, MCL 205.51 to 205.78, the use tax act, 1937 PA 94, MCL 205.91 to 205.111, and the motor carrier fuel tax act, 1980 PA 119, MCL 207.211 to 207.234. The exception for taxes imposed by the general sales tax act, 1933 PA 167, MCL 205.51 to 205.78, and the use tax act, 1937 PA 94, MCL 205.91 to 205.111, does not apply to diesel fuel used in passenger vehicles of a capacity of 10 or more operated for hire under a certificate issued by the state transportation department. As used in this subsection, “alternative fuel” means that term as defined in section 151.

Sec. 40. (1) A person may seek a refund for tax paid under this act on motor fuel or alternative fuel that is 1 or more of the following:

(a) Accidentally contaminated by dye or another contaminant, including but not limited to gasoline that is mixed with diesel fuel, if the resulting product cannot be used to operate a motor vehicle on the public roads or highways without violating this act or other state or federal law.

(b) Accidentally lost or destroyed as a direct result of a sudden and unexpected casualty loss.

(2) The refund described in subsection (1) does not apply if the person seeking the refund has been reimbursed for the cost of the tax by any person, including, but not limited to, an insurance company, for the loss or contamination. If a person seeking a refund under this section is reimbursed for any amount, that person shall demonstrate to the department that the amount reimbursed does not include tax paid under this act on the motor fuel or alternative fuel in order to be eligible for the refund.

Sec. 45. (1) An end user operating a motor vehicle with a common fuel supply tank from which motor fuel or alternative fuel is used both to propel the vehicle and to operate attached equipment may seek a refund for tax paid under this act on motor fuel or alternative fuel consumed from that fuel supply tank in the amount of 15% of the tax paid.

(2) Notwithstanding subsection (1), an end user operating a motor vehicle with a common fuel supply tank from which motor fuel or alternative fuel is used both to propel the vehicle and to operate attached equipment may seek a refund for tax paid under this act on motor fuel or alternative fuel consumed from that fuel supply tank in an amount that is more than 15% of the tax paid if the operator provides evidence to the department that a refund or deduction of more than 15% is justified. The department shall determine the evidence that is necessary under this section to justify a refund of more than 15% of the tax paid.

(3) A refund provided under this section only applies to a motor vehicle that is used by the end user exclusively for business or other commercial purposes and does not apply to an automobile whether or not it is used by the end user for business or other commercial purposes.

(4) If the department determined before April 1, 2001 that a class of motor vehicles with attached equipment was eligible for a motor fuel refund in an amount different than 15% of the tax paid, that percentage applies to those motor vehicles on and after April 1, 2001 unless, following notice and hearing, a later determination under subsection (2) is made.

(5) As used in this section:

(a) “Alternative fuel” means that term as defined in section 151.

(b) “Attached equipment” means equipment used by the end user in the regular course of his or her business that is powered by motor fuel or alternative fuel from the common fuel supply tank. Attached equipment includes, but is not limited to, certain pumping, spraying, seeding, spreading, shredding, lifting, winching, dumping, cleaning, mixing, processing, and refrigeration equipment. Attached equipment does not include a heater, air conditioner, radio, or any other equipment that is used in the cab of the motor vehicle and does not include any other equipment that the department reasonably determines does not meet this definition.

Sec. 53. (1) A person shall not engage in a business activity in this state where a license is required by this act unless the person is licensed under this act.

(2) A person required to be licensed under this act shall apply for a license on a form or in a format prescribed by the department.

(3) An application for a license under this act may contain any information the department may reasonably require to administer this act including the applicant’s federal identification number.

(4) The following persons currently licensed on April 1, 2001 are not required to obtain a new license under this act and shall be considered licensed under this act:

(a) A person licensed in this state as a supplier on April 1, 2001 shall be considered licensed as a supplier under this act but only if the person is a terminal operator or a position holder in a terminal on April 1, 2001.

(b) A wholesale distributor who on April 1, 2001 possesses a valid exemption certificate issued under former section 12 of 1927 PA 150 shall be considered licensed as a fuel vendor under this act.

(c) A person licensed in this state as an exporter on April 1, 2001 shall be considered licensed as an exporter under this act.

(d) A person licensed in this state as a liquid fuel hauler on April 1, 2001 shall be considered licensed as a transporter under this act.

(e) A person licensed in this state as a retail dealer of diesel motor fuel on April 1, 2001 shall be considered licensed as a retail diesel dealer under this act.

(5) A person considered licensed under subsection (4) is subject to all of the provisions of this act except those requiring an application for a new license.

(6) Except as otherwise provided in this act, a person who is engaged in more than 1 business activity for which a license is required under this act shall be licensed for each business activity.

(7) A person who is licensed as a supplier is not required to obtain a separate license for any other business activity for which a license is required under this act except as a retail diesel dealer or as an alternative fuel dealer or alternative fuel commercial user under sections 151 to 155.

(8) A person who negligently violates this section is subject to a civil penalty of $1,000.00.

(9) A person who knowingly violates or knowingly aids and abets another to violate this section is guilty of a felony.

Sec. 63. (1) If an application and the accompanying bond or cash deposit, if any, are approved, the department shall issue a license to the applicant.

(2) A licensee shall retain a copy of its license at each of its business locations unless the department waives this requirement.

(3) A licensee is not required to renew a license and a license is valid unless and until it is suspended, canceled, or revoked for cause by the department, or discontinued by the licensee. However, the department may require a licensee to update the information required under section 53 or 153.

(4) The department shall maintain a list containing the name and address of each person licensed under this act. The department may post the list on the department’s website. The department shall regularly update the list in order to reflect the current status of a licensee.

Sec. 122. (1) A person shall not operate or maintain a motor vehicle on the public roads or highways of this state with dyed diesel fuel in the vehicle’s fuel supply tank.

(2) This section does not apply to dyed diesel fuel used in any of the following:

(a) A motor vehicle owned and operated or leased and operated by the federal or state government or a political subdivision of this state.

(b) A motor vehicle used exclusively by the American red cross.

(c) An implement of husbandry.

(d) A passenger vehicle that has a capacity of 10 or more and that operates over regularly traveled routes expressly provided for in 1 or more of the following that applies to the passenger vehicle:

(i) A certificate of authority issued by the state transportation department.

(ii) A municipal franchise.

(iii) A municipal license.

(iv) A municipal permit.

(v) A municipal agreement.

(vi) A municipal grant.

(3) An owner, operator, or driver of a vehicle who uses dyed diesel fuel on the public roads or highways of this state is subject to a civil penalty of $1,000.00 for the first violation, and a civil penalty of $5,000.00 for each subsequent violation. An owner, operator, or driver of a motor vehicle who knowingly violates the prohibition against the sale or use of dyed diesel fuel upon the public roads or highways of this state is subject to a civil penalty equal to that imposed by section 6714 of the internal revenue code.

Sec. 143. (1) Except as otherwise provided in subsections (2) and (3) and section 142, all sums of money received and collected under this act, except for license fees, and after the payment of the necessary expenses incurred in the enforcement of this act, are appropriated to and shall be deposited in the state treasury to the credit of the Michigan transportation fund.

(2) For the period beginning on October 1, 2015 and ending on September 30, 2016, the first $400,000,000.00 received and collected under this act is appropriated to and shall be deposited in the state treasury to the credit of the Michigan transportation fund and allocated as provided in section 10(1) of 1951 PA 51, MCL 247.660, and the remainder shall be allocated to indebtedness incurred for projects described in section 11 of 1951 PA 51, MCL 247.661.

(3) For the period beginning on October 1, 2016 and ending on September 30, 2017, the first $800,000,000.00 received and collected under this act is appropriated to and shall be deposited in the state treasury to the credit of the Michigan transportation fund and allocated as provided in section 10(1) of 1951 PA 51, MCL 247.660, and the remainder shall be allocated to indebtedness incurred for projects described in section 11 of 1951 PA 51, MCL 247.661.

(4) The money required to be allocated to indebtedness incurred for projects described in section 11 of 1951 PA 51, MCL 247.661, under subsections (2) and (3) shall be expended on that indebtedness no later than September 30, 2017.

Sec. 151. As used in this section and sections 152 to 155:

(a) “Alternative fuel” means a gas, liquid, or other fuel that, with or without adjustment or manipulation such as adjustment or manipulation of pressure or temperature, is capable of being used for the generation of power to propel a motor vehicle, including, but not limited to, natural gas, compressed natural gas, liquefied natural gas, liquefied petroleum gas, hydrogen, hydrogen compressed natural gas, or hythane. Alternative fuel does not include motor fuel, electricity, leaded racing fuel, or an excluded liquid.

(b) “Alternative fuel commercial user” means a commercial or other business enterprise or entity that is a consumer or end user of alternative fuel to propel a motor vehicle on the public roads and highways of this state. Alternative fuel commercial user does not include a person licensed as an alternative fuel dealer under section 153.

(c) “Alternative fuel dealer” means a person that is licensed or required to be licensed under section 153, that is in the business of selling at retail alternative fuel, and that uses alternative fuel as described in subdivision (k).

(d) “Alternative fuel filling station” means a machine or other device located within this state that is supplied with alternative fuel and that is designed or used for placing or delivering alternative fuel into the fuel supply tank of a motor vehicle. As used in this subdivision, “located within this state” includes, but is not limited to, all of the following locations:

(i) An alternative fuel dealer’s place of business.

(ii) A commercial or industrial establishment or facility.

(iii) A residence or residential property.

(iv) A landfill licensed or required to be licensed under part 115 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.11501 to 324.11554.

(e) “British thermal unit” or “BTU” means the amount of heat required to raise the temperature of 1 pound of water 1 degree Fahrenheit.

(f) “Compressed natural gas” means a mixture of hydrocarbon gases and vapors that consists primarily of methane in gaseous form that has been compressed for use as a fuel to propel a motor vehicle.

(g) “Diesel base rate” means the rate per gallon on diesel fuel in effect for the applicable period under section 8(1).

(h) “Diesel gallon equivalent” means 1 of the following or its metric equivalent:

(i) For compressed natural gas, 6.380 pounds.

(ii) For hydrogen, the volume or weight that is equal to 128,450 BTUs. For purposes of this subdivision, there are 27,000 BTUs per 100 standard cubic feet, and 480.11 standard cubic feet per diesel gallon equivalent.

(iii) For hydrogen compressed natural gas, the volume or weight that is equal to 128,450 BTUs. For purposes of this subdivision, there are 79,800 BTUs per 100 standard cubic feet, and 162.44 standard cubic feet per diesel gallon equivalent.

(iv) For liquefied natural gas, 6.060 pounds.

(i) “Liquefied natural gas” means methane or natural gas in the form of a cryogenic or refrigerated liquid that is suitable for use or used as fuel to propel a motor vehicle.

(j) “Liquefied petroleum gas” means gases derived from petroleum or natural gases that are in the gaseous state at normal atmospheric temperature and pressure, but that may be maintained in the liquid state at normal atmospheric temperature by suitable pressure. Liquefied petroleum gas includes products predominately composed of propane, propylene, butylene, butane, and similar products. Liquefied petroleum gas does not include compressed natural gas, liquefied natural gas, hydrogen, or hythane.

(k) “Use”, “used”, or “uses” means any of the following:

(i) Selling or delivering alternative fuel not otherwise subject to tax under this act, either by placing it into a permanently attached fuel supply tank of a motor vehicle, or exchanging or replacing of the fuel supply tank of a motor vehicle.

(ii) Delivery of alternative fuel into storage, devoted exclusively to the storage of alternative fuel to be consumed in motor vehicles on the public roads or highways of this state.

(iii) Withdrawing alternative fuel from the cargo tank of a truck, trailer or semi-trailer for the operation of a motor vehicle upon the public roads and highways of this state, whether used in vapor or liquid form.

(iv) Placing or delivering alternative fuel into the fuel supply tank of a motor vehicle by or through the operation of an alternative fuel filling station or by any other means not involving the delivery, receipt, or purchase of alternative fuel from an alternative fuel dealer or any other means not otherwise described in subparagraphs (i) to (iii).

Sec. 152. (1) Except as otherwise provided in this section and sections 154 and 155, a tax at the rate per gallon equal to the diesel base rate is imposed upon all alternative fuel used in this state. Except as provided in section 154 or 155, the tax shall be paid at the times and in the manner specified in this section. The tax on alternative fuel sold or delivered either by placing it into a permanently attached fuel supply tank on a motor vehicle, or by exchanging or replacing the fuel supply tank of a motor vehicle, shall be collected by the alternative fuel dealer from the purchaser, consumer, or end user and paid over monthly to the department as provided in this act. Alternative fuel delivered in this state into the storage facility of any person when the exclusive purpose of the storage facility is for resale or use in a motor vehicle on the public roads or highways of this state, shall, upon delivery to storage facility, be subject to tax. An alternative fuel dealer shall, upon delivery of the alternative fuel, collect and remit the tax to the department as provided in this act. A person shall not operate a motor vehicle on the public roads or highways of this state from the cargo containers of a truck, trailer, or semitrailer with alternative fuel in vapor or liquid form, as applicable, except when the alternative fuel in the liquid or vapor phase is withdrawn from the cargo container for use in motor vehicles through a permanently installed and approved metering device. The tax on alternative fuel withdrawn from a cargo container through a permanently installed and approved metering device shall apply in accordance with measured gallons or gallon equivalents, if applicable, as reflected by meter reading, and shall be paid monthly by the alternative fuel dealer to the department as provided in this act.

(2) The rate of tax on the following alternative fuels shall be the diesel base rate per diesel gallon equivalent or fractional part thereof rounded to the nearest 1/10 of 1 gallon:

(a) Compressed natural gas.

(b) Hydrogen.

(c) Hydrogen compressed natural gas.

(d) Liquefied natural gas.

(3) The tax imposed under this section does not apply to an alternative fuel commercial user described in section 154(2) until January 1, 2016.

(4) The tax imposed under this section does not apply to a person described in section 154(3) until July 1, 2016.

Sec. 153. (1) A person shall not act as an alternative fuel dealer or an alternative fuel commercial user unless the person is licensed under this act.

(2) To obtain a license as an alternative fuel dealer or an alternative fuel commercial user, an applicant shall file with the department an application upon a form or in a format prescribed by the department. The application shall include the name and address of the applicant and of each place of business to be operated by the applicant at which alternative fuel will be used and other information the department may reasonably require.

(3) At the time of applying for the license, an applicant for an alternative fuel dealer license shall pay to the department a license fee of $500.00.

(4) At the time of applying for the license, an applicant for an alternative fuel commercial user license shall pay to the department a license fee of $50.00.

(5) An applicant for a license or a licensee under this section is subject to the general licensing and bonding requirements of this act.

Sec. 154. (1) For the purpose of determining the amount of tax payable to the department, an alternative fuel dealer shall, on or before the twentieth day of each month, file with the department on a form or in a format prescribed by the department a report that includes the number of gallons or gallon equivalents, if applicable, of alternative fuel used by the alternative fuel dealer during the preceding calendar month, together with any other information the department may require. An alternative fuel dealer shall pay to the department at the time of filing the report the full amount of the tax owed.

(2) Beginning on January 1, 2016, for the purpose of determining the amount of tax owed to the department, an alternative fuel commercial user that uses alternative fuel as described in section 151(k) upon which the tax imposed under section 152 has not been collected by or paid to an alternative fuel dealer shall, on or before the twentieth day of each month, file with the department a report that includes the number of gallons or gallon equivalents, if applicable, of the alternative fuel described in this subsection that was used or consumed by the alternative fuel commercial user during the preceding calendar month, together with any other information the department requires. An alternative fuel commercial user shall pay the full amount of the tax due to the department at the time of filing the required report.

(3) Beginning on July 1, 2016, for the purpose of determining the amount of tax owed to the department, a person that is not an alternative fuel dealer or an alternative fuel commercial user shall pay the tax imposed under section 152 on alternative fuel for which the tax has not been collected by or paid to an alternative fuel dealer, and shall file with the department on or before the twentieth day following the end of each quarter a form that indicates the number of gallons or gallon equivalents, if applicable, used or consumed by that person during the preceding calendar quarter. A person described in this subsection shall pay to the department the full amount of the tax due at the time of filing the required form.

(4) Except as otherwise provided in this section, a person that uses alternative fuel for a taxable purpose and does not pay the tax imposed under this section shall pay to the department the tax imposed under section 152, along with any applicable penalties or interest, at the time and in the manner prescribed by the department.

Sec. 155. (1) A person consuming alternative fuel for any purpose other than to operate a motor vehicle on the public roads or highways of this state may seek a refund of the tax on alternative fuel imposed by this act, including a refund as provided in section 45, if that person has already paid the tax imposed under section 152 on that alternative fuel.

(2) To obtain a refund under this section, a person shall file a claim with the department within 18 months after the date of purchase, as shown on the invoice and shall comply with the requirements set forth in section 48.

(3) A claim for refund under this section shall be on a form or in a format prescribed by the department and shall have attached the original invoice that was provided to the purchaser.

(4) An alternative fuel is exempt from the tax imposed by this act and the tax imposed by this act shall not be collected by an alternative fuel dealer if any of the following apply:

(a) The alternative fuel is sold directly by an alternative fuel dealer to the federal government, the state government, or a political subdivision of this state for use in a motor vehicle owned and operated or leased and operated by the federal government, state government, or political subdivision of this state.

(b) The alternative fuel is sold directly by an alternative fuel dealer to a nonprofit, private, parochial, or denominational school, college, or university and is used in a school bus owned and operated or leased and operated by the educational institution that is used in the transportation of students to and from the institution or to and from school functions authorized by the administration of the institution.

(c) The alternative fuel is imported into this state in the fuel supply tank of a motor vehicle used solely for noncommercial purposes, if the aggregate capacity of the motor vehicle’s fuel supply tank does not exceed 30 gallons or the equivalent of 30 gallons.

(5) Both of the following are exempt from the tax on alternative fuel imposed by this act:

(a) The federal government, state government, or a political subdivision of this state consuming alternative fuel in a motor vehicle owned and operated or leased and operated by the federal government, state government, or a political subdivision of this state.

(b) A nonprofit, private, parochial, or denominational school, college, or university consuming alternative fuel in a school bus owned and operated or leased and operated by the nonprofit, private, parochial, or denominational school, college, or university.

(6) A person that sells alternative fuel shall provide the purchaser with an invoice or receipt showing the amount expressed in gallons or gallon equivalents, as applicable, of alternative fuel purchased, the date of purchase, and the amount of tax paid.

(7) An alternative fuel dealer that sells alternative fuel at retail shall clearly list in plain view of the customer the price of the alternative fuel in diesel gallon equivalents, as applicable, on the alternative fuel filling station and any other markings or information required by law.

(8) Except as otherwise provided in this section, a person that uses or consumes alternative fuel for a taxable purpose and does not pay the tax imposed under section 154 is liable for the payment of that tax and shall pay to the department the tax imposed under section 152 and any applicable penalties or interest, at the time and in the manner prescribed by the department.

Enacting section 1. This amendatory act takes effect October 1, 2015.

Enacting section 2. This amendatory act does not take effect unless House Joint Resolution UU of the 97th Legislature becomes a part of the state constitution of 1963 as provided in section 1 of article XII of the state constitution of 1963.

Enacting section 3. This amendatory act does not take effect unless House Bill No. 4539 of the 97th Legislature is enacted into law.

This act is ordered to take immediate effect.


Public Act 469 of 2014

ENROLLED SENATE BILL No. 847

AN ACT to amend 1967 PA 281, entitled “An act to meet deficiencies in state funds by providing for the imposition, levy, computation, collection, assessment, reporting, payment, and enforcement by lien and otherwise of taxes on or measured by net income and on certain commercial, business, and financial activities; to prescribe the manner and time of making reports and paying the taxes, and the functions of public officers and others as to the taxes; to permit the inspection of the records of taxpayers; to provide for interest and penalties on unpaid taxes; to provide exemptions, credits and refunds of the taxes; to prescribe penalties for the violation of this act; to provide an appropriation; and to repeal acts and parts of acts,” by amending sections 272 and 522 (MCL 206.272 and 206.522), section 272 as amended by 2011 PA 38 and section 522 as amended by 2013 PA 206.

The People of the State of Michigan enact:

Sec. 272. (1) For the following tax years that begin after December 31, 2007, a taxpayer may credit against the tax imposed by this act an amount equal to the specified percentages of the credit the taxpayer is allowed to claim as a credit under section 32 of the internal revenue code for a tax year on a return filed under this act for the same tax year:

(a) For tax years that begin after December 31, 2007 and before January 1, 2009, 10%.

(b) For tax years that begin after December 31, 2008 and before January 1, 2012, 20%.

(c) For tax years that begin after December 31, 2011 and before January 1, 2016, 6%.

(d) For tax years that begin after December 31, 2015, 20%.

(2) If the credit allowed by this section exceeds the tax liability of the taxpayer for the tax year, the state treasurer shall refund the excess to the taxpayer without interest, except as provided in section 30 of 1941 PA 122, MCL 205.30.

Sec. 522. (1) The amount of a claim made pursuant to this chapter shall be determined as follows:

(a) A claimant who is not a senior citizen is entitled to a credit against the state income tax liability under this part equal to 60% of the amount by which the property taxes on the homestead, or the credit for rental of the homestead for the tax year, exceeds 3.5% of the claimant’s total household resources for that tax year.

(b) A claimant who is a senior citizen is entitled to a credit against the state income tax liability under this part equal to the following:

(i) For a claimant with total household resources of $21,000.00 or less, an amount as determined in accordance with subdivision (c).

(ii) For a claimant with total household resources of more than $21,000.00 and less than or equal to $22,000.00, an amount equal to 96% of the difference between the property taxes on the homestead or the credit for rental of the homestead for the tax year and 3.5% of total household resources.

(iii) For a claimant with total household resources of more than $22,000.00 and less than or equal to $23,000.00, an amount equal to 92% of the difference between the property taxes on the homestead or the credit for rental of the homestead for the tax year and 3.5% of total household resources.

(iv) For a claimant with total household resources of more than $23,000.00 and less than or equal to $24,000.00, an amount equal to 88% of the difference between the property taxes on the homestead or the credit for rental of the homestead for the tax year and 3.5% of total household resources.

(v) For a claimant with total household resources of more than $24,000.00 and less than or equal to $25,000.00, an amount equal to 84% of the difference between the property taxes on the homestead or the credit for rental of the homestead for the tax year and 3.5% of total household resources.

(vi) For a claimant with total household resources of more than $25,000.00 and less than or equal to $26,000.00, an amount equal to 80% of the difference between the property taxes on the homestead or the credit for rental of the homestead for the tax year and 3.5% of total household resources.

(vii) For a claimant with total household resources of more than $26,000.00 and less than or equal to $27,000.00, an amount equal to 76% of the difference between the property taxes on the homestead or the credit for rental of the homestead for the tax year and 3.5% of total household resources.

(viii) For a claimant with total household resources of more than $27,000.00 and less than or equal to $28,000.00, an amount equal to 72% of the difference between the property taxes on the homestead or the credit for rental of the homestead for the tax year and 3.5% of total household resources.

(ix) For a claimant with total household resources of more than $28,000.00 and less than or equal to $29,000.00, an amount equal to 68% of the difference between the property taxes on the homestead or the credit for rental of the homestead for the tax year and 3.5% of total household resources.

(x) For a claimant with total household resources of more than $29,000.00 and less than or equal to $30,000.00, an amount equal to 64% of the difference between the property taxes on the homestead or the credit for rental of the homestead for the tax year and 3.5% of total household resources.

(xi) For a claimant with total household resources of more than $30,000.00, an amount equal to 60% of the difference between the property taxes on the homestead or the credit for rental of the homestead for the tax year and 3.5% of total household resources.

(c) A claimant who is a senior citizen with total household resources of $21,000.00 or less or a paraplegic, hemiplegic, or quadriplegic and for tax years that begin after December 31, 1999, a claimant who is totally and permanently disabled, deaf, or, for tax years that begin after December 31, 2012, blind is entitled to a credit against the state income tax liability for the amount by which the property taxes on the homestead, the credit for rental of the homestead, or a service charge in lieu of ad valorem taxes as provided by section 15a of the state housing development authority act of 1966, 1966 PA 346, MCL 125.1415a, for the tax year exceeds the percentage of the claimant’s total household resources for that tax year computed as follows:

For tax years ending before January 1, 2016

Total household resources Percentage

Not over $3,000.00 .0%

Over $3,000.00 but not over $4,000.00 1.0%

Over $4,000.00 but not over $5,000.00 2.0%

Over $5,000.00 but not over $6,000.00 3.0%

Over $6,000.00 3.5%

For tax years beginning after December 31, 2015

Total household resources Percentage

Not over $6,000.00 .0%

Over $6,000.00 3.5%

(d) A claimant who is an eligible serviceperson, eligible veteran, or eligible widow or widower is entitled to a credit against the state income tax liability for a percentage of the property taxes on the homestead for the tax year not in excess of 100% determined as follows:

(i) Divide the taxable value allowance specified in section 506 by the taxable value of the homestead or, if the eligible serviceperson, eligible veteran, or eligible widow or widower leases or rents a homestead, divide 17% of the total annual rent paid for tax years before the 1994 tax year, or 20% of the total annual rent paid for tax years after the 1993 tax year on the property by the property tax rate on the property.

(ii) Multiply the property taxes on the homestead by the percentage computed in subparagraph (i).

(e) A claimant who is blind is entitled to a credit against the state income tax liability for a percentage of the property taxes on the homestead for the tax year determined as follows:

(i) If the taxable value of the homestead is $3,500.00 or less, 100% of the property taxes.

(ii) If the taxable value of the homestead is more than $3,500.00, the percentage that $3,500.00 bears to the taxable value of the homestead.

(2) A person who is qualified to make a claim under more than 1 classification shall elect the classification under which the claim is made.

(3) Only 1 claimant per household for a tax year is entitled to the credit, unless both the husband and wife filing a joint return are blind, then each shall be considered a claimant.

(4) As used in this section, “totally and permanently disabled” means disability as defined in section 216 of title II of the social security act, 42 USC 416.

(5) A senior citizen who has total household resources for the tax year of $6,000.00 or less and who for 1973 received a senior citizen homestead exemption under former section 7c of the general property tax act, 1893 PA 206, may compute the credit against the state income tax liability for a percentage of the property taxes on the homestead for the tax year determined as follows:

(a) If the taxable value of the homestead is $2,500.00 or less, 100% of the property taxes.

(b) If the taxable value of the homestead is more than $2,500.00, the percentage that $2,500.00 bears to the taxable value of the homestead.

(6) For a return of less than 12 months, the claim shall be reduced proportionately.

(7) The department may prescribe tables that may be used to determine the amount of the claim.

(8) The total credit allowed in this section for each year after December 31, 1975 shall not exceed $1,200.00 per year.

(9) The total credit allowable under this part and part 361 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.36101 to 324.36117, shall not exceed the total property tax due and payable by the claimant in that year. The amount by which the credit exceeds the property tax due and payable shall be deducted from the credit claimed under part 361 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.36101 to 324.36117.

Enacting section 1. This amendatory act does not take effect unless House Joint Resolution UU of the 97th Legislature becomes a part of the state constitution of 1963 as provided in section 1 of article XII of the state constitution of 1963.

This act is ordered to take immediate effect.


Public Act 470 of 2014

ENROLLED HOUSE BILL No. 4630

AN ACT to amend 1949 PA 300, entitled “An act to provide for the registration, titling, sale, transfer, and regulation of certain vehicles operated upon the public highways of this state or any other place open to the general public or generally accessible to motor vehicles and distressed vehicles; to provide for the licensing of dealers; to provide for the examination, licensing, and control of operators and chauffeurs; to provide for the giving of proof of financial responsibility and security by owners and operators of vehicles; to provide for the imposition, levy, and collection of specific taxes on vehicles, and the levy and collection of sales and use taxes, license fees, and permit fees; to provide for the regulation and use of streets and highways; to create certain funds; to provide penalties and sanctions for a violation of this act; to provide for civil liability of manufacturers, the manufacturers of automated technology, upfitters, owners, and operators of vehicles and service of process on residents and nonresidents; to regulate the introduction and use of certain evidence; to provide for the levy of certain assessments; to provide for the enforcement of this act; to provide for the creation of and to prescribe the powers and duties of certain state and local agencies; to impose liability upon the state or local agencies; to provide appropriations for certain purposes; to repeal all other acts or parts of acts inconsistent with this act or contrary to this act; and to repeal certain parts of this act on a specific date,” by amending section 801 (MCL 257.801), as amended by 2012 PA 498.

The People of the State of Michigan enact:

Sec. 801. (1) The secretary of state shall collect the following taxes at the time of registering a vehicle, which shall exempt the vehicle from all other state and local taxation, except the fees and taxes provided by law to be paid by certain carriers operating motor vehicles and trailers under the motor carrier act, 1933 PA 254, MCL 475.1 to 479.43; the taxes imposed by the motor carrier fuel tax act, 1980 PA 119, MCL 207.211 to 207.234; and except as otherwise provided by this act:

(a) For a motor vehicle, including a motor home, except as otherwise provided, and a pickup truck or van that weighs not more than 8,000 pounds, except as otherwise provided, according to the following schedule of empty weights:

Empty weights   Tax

0 to 3,000 pounds…………………………………………………………………………………………………………………………………….. $ 29.00

3,001 to 3,500 pounds………………………………………………………………………………………………………………………………. 32.00

3,501 to 4,000 pounds………………………………………………………………………………………………………………………………. 37.00

4,001 to 4,500 pounds………………………………………………………………………………………………………………………………. 43.00

4,501 to 5,000 pounds………………………………………………………………………………………………………………………………. 47.00

5,001 to 5,500 pounds………………………………………………………………………………………………………………………………. 52.00

5,501 to 6,000 pounds………………………………………………………………………………………………………………………………. 57.00

6,001 to 6,500 pounds………………………………………………………………………………………………………………………………. 62.00

6,501 to 7,000 pounds………………………………………………………………………………………………………………………………. 67.00

7,001 to 7,500 pounds………………………………………………………………………………………………………………………………. 71.00

7,501 to 8,000 pounds………………………………………………………………………………………………………………………………. 77.00

8,001 to 8,500 pounds………………………………………………………………………………………………………………………………. 81.00

8,501 to 9,000 pounds………………………………………………………………………………………………………………………………. 86.00

9,001 to 9,500 pounds………………………………………………………………………………………………………………………………. 91.00

9,501 to 10,000 pounds…………………………………………………………………………………………………………………………….. 95.00

over 10,000 pounds…………………………………………………………………………………………………………………$  0.90 per 100 pounds

of empty weight

On October 1, 1983, and October 1, 1984, the tax assessed under this subdivision shall be annually revised for the registrations expiring on the appropriate October 1 or after that date by multiplying the tax assessed in the preceding fiscal year times the personal income of Michigan for the preceding calendar year divided by the personal income of Michigan for the calendar year that preceded that calendar year. In performing the calculations under this subdivision, the secretary of state shall use the spring preliminary report of the United States department of commerce or its successor agency. A van that is owned by an individual who uses a wheelchair or by an individual who transports a member of his or her household who uses a wheelchair and for which registration plates are issued under section 803d shall be assessed at the rate of 50% of the tax provided for in this subdivision.

(b) For a trailer coach attached to a motor vehicle, the tax shall be assessed as provided in subdivision (l). A trailer coach not under 1959 PA 243, MCL 125.1035 to 125.1043, and while located on land otherwise assessable as real property under the general property tax act, 1893 PA 206, MCL 211.1 to 211.155, if the trailer coach is used as a place of habitation, and whether or not permanently affixed to the soil, is not exempt from real property taxes.

(c) For a road tractor, modified agricultural vehicle, truck, or truck tractor owned by a farmer and used exclusively in connection with a farming operation, including a farmer hauling livestock or farm equipment for other farmers for remuneration in kind or in labor, but not for money, or used for the transportation of the farmer and the farmer’s family, and not used for hire, 74 cents per 100 pounds of empty weight of the road tractor, truck, or truck tractor. If the road tractor, modified agricultural vehicle, truck, or truck tractor owned by a farmer is also used for a nonfarming operation, the farmer is subject to the highest registration tax applicable to the nonfarm use of the vehicle but is not subject to more than 1 tax rate under this act.

(d) For a road tractor, truck, or truck tractor owned by a wood harvester and used exclusively in connection with the wood harvesting operations or a truck used exclusively to haul milk from the farm to the first point of delivery, 74 cents per 100 pounds of empty weight of the road tractor, truck, or truck tractor. A registration secured by payment of the tax prescribed in this subdivision continues in full force and effect until the regular expiration date of the registration. As used in this subdivision:

(i) “Wood harvester” includes the person or persons hauling and transporting raw materials in the form produced at the harvest site or hauling and transporting wood harvesting equipment. Wood harvester does not include a person or persons whose primary activity is tree-trimming or landscaping.

(ii) “Wood harvesting equipment” includes all of the following:

(A) A vehicle that directly harvests logs or timber, including, but not limited to, a processor or a feller buncher.

(B) A vehicle that directly processes harvested logs or timber, including, but not limited to, a slasher, delimber, processor, chipper, or saw table.

(C) A vehicle that directly processes harvested logs or timber, including, but not limited to, a forwarder, grapple skidder, or cable skidder.

(D) A vehicle that directly loads harvested logs or timber, including, but not limited to, a knuckle-boom loader, front‑end loader, or forklift.

(E) A bulldozer or road grader being transported to a wood harvesting site specifically for the purpose of building or maintaining harvest site roads.

(iii) “Wood harvesting operations” does not include the transportation of processed lumber, Christmas trees, or processed firewood for a profit making venture.

(e) For a hearse or ambulance used exclusively by a licensed funeral director in the general conduct of the licensee’s funeral business, including a hearse or ambulance whose owner is engaged in the business of leasing or renting the hearse or ambulance to others, $1.17 per 100 pounds of the empty weight of the hearse or ambulance.

(f) For a vehicle owned and operated by this state, a state institution, a municipality, a privately incorporated, nonprofit volunteer fire department, or a nonpublic, nonprofit college or university, $5.00 per plate. A registration plate issued under this subdivision expires on June 30 of the year in which new registration plates are reissued for all vehicles by the secretary of state.

(g) For a bus including a station wagon, carryall, or similarly constructed vehicle owned and operated by a nonprofit parents’ transportation corporation used for school purposes, parochial school or society, church Sunday school, or any other grammar school, or by a nonprofit youth organization or nonprofit rehabilitation facility; or a motor vehicle owned and operated by a senior citizen center, $10.00, if the bus, station wagon, carryall, or similarly constructed vehicle or motor vehicle is designated by proper signs showing the organization operating the vehicle.

(h) For a vehicle owned by a nonprofit organization and used to transport equipment for providing dialysis treatment to children at camp; for a vehicle owned by the civil air patrol, as organized under 36 USC 40301 to 40307, $10.00 per plate, if the vehicle is designated by a proper sign showing the civil air patrol’s name; for a vehicle owned and operated by a nonprofit veterans center; for a vehicle owned and operated by a nonprofit recycling center or a federally recognized nonprofit conservation organization; for a motor vehicle having a truck chassis and a locomotive or ship’s body that is owned by a nonprofit veterans organization and used exclusively in parades and civic events; or for an emergency support vehicle used exclusively for emergencies and owned and operated by a federally recognized nonprofit charitable organization, $10.00 per plate.

(i) For each truck owned and operated free of charge by a bona fide ecclesiastical or charitable corporation, or red cross, girl scout, or boy scout organization, 65 cents per 100 pounds of the empty weight of the truck.

(j) For each truck, weighing 8,000 pounds or less, and not used to tow a vehicle, for each privately owned truck used to tow a trailer for recreational purposes only and not involved in a profit making venture, and for each vehicle designed and used to tow a mobile home or a trailer coach, except as provided in subdivision (b), $38.00 or an amount computed according to the following schedule of empty weights, whichever is greater:

Empty weights Per 100 pounds

0 to 2,500 pounds…………………………………………………………………………………………………………………………………….. $ 1.40

2,501 to 4,000 pounds………………………………………………………………………………………………………………………………. 1.76

4,001 to 6,000 pounds………………………………………………………………………………………………………………………………. 2.20

6,001 to 8,000 pounds………………………………………………………………………………………………………………………………. 2.72

8,001 to 10,000 pounds…………………………………………………………………………………………………………………………….. 3.25

10,001 to 15,000 pounds…………………………………………………………………………………………………………………………… 3.77

15,001 pounds and over…………………………………………………………………………………………………………………………… 4.39

If the tax required under subdivision (p) for a vehicle of the same model year with the same list price as the vehicle for which registration is sought under this subdivision is more than the tax provided under the preceding provisions of this subdivision for an identical vehicle, the tax required under this subdivision is not less than the tax required under subdivision (p) for a vehicle of the same model year with the same list price.

(k) For each truck weighing 8,000 pounds or less towing a trailer or any other combination of vehicles and for each truck weighing 8,001 pounds or more, road tractor or truck tractor, except as provided in subdivision (j), as follows:

(i) Beginning on March 1, 2016 and ending on February 28, 2017, according to the following schedule of elected gross weights:

Elected gross weight   Tax

0 to 24,000 pounds…………………………………………………………………………………………………………………………………… $ 491.00

24,001 to 26,000 pounds…………………………………………………………………………………………………………………………… 558.00

26,001 to 28,000 pounds…………………………………………………………………………………………………………………………… 608.00

28,001 to 32,000 pounds…………………………………………………………………………………………………………………………… 715.67

32,001 to 36,000 pounds…………………………………………………………………………………………………………………………… 827.33

36,001 to 42,000 pounds…………………………………………………………………………………………………………………………… 974.00

42,001 to 48,000 pounds…………………………………………………………………………………………………………………………… 1,121.67

48,001 to 54,000 pounds…………………………………………………………………………………………………………………………… 1,268.33

54,001 to 60,000 pounds…………………………………………………………………………………………………………………………… 1,418.00

60,001 to 66,000 pounds…………………………………………………………………………………………………………………………… 1,564.67

66,001 to 72,000 pounds…………………………………………………………………………………………………………………………… 1,712.33

72,001 to 80,000 pounds…………………………………………………………………………………………………………………………… 1,860.00

80,001 to 90,000 pounds…………………………………………………………………………………………………………………………… 2,009.67

90,001 to 100,000 pounds…………………………………………………………………………………………………………………………. 2,235.33

100,001 to 115,000 pounds……………………………………………………………………………………………………………………….. 2,473.00

115,001 to 130,000 pounds……………………………………………………………………………………………………………………….. 2,714.67

130,001 to 145,000 pounds……………………………………………………………………………………………………………………….. 2,970.00

145,001 to 160,000 pounds……………………………………………………………………………………………………………………….. 3,227.33

over 160,000 pounds……………………………………………………………………………………………………………………………….. 3,450.33

(ii) Beginning on March 1, 2017 and ending on February 28, 2018, according to the following schedule of elected gross weights:

Elected gross weight   Tax

0 to 24,000 pounds…………………………………………………………………………………………………………………………………… $ 491.00

24,001 to 26,000 pounds…………………………………………………………………………………………………………………………… 558.00

26,001 to 28,000 pounds…………………………………………………………………………………………………………………………… 658.00

28,001 to 32,000 pounds…………………………………………………………………………………………………………………………… 782.33

32,001 to 36,000 pounds…………………………………………………………………………………………………………………………… 910.67

36,001 to 42,000 pounds…………………………………………………………………………………………………………………………… 1,074.00

42,001 to 48,000 pounds…………………………………………………………………………………………………………………………… 1,238.33

48,001 to 54,000 pounds…………………………………………………………………………………………………………………………… 1,401.67

54,001 to 60,000 pounds…………………………………………………………………………………………………………………………… 1,568.00

60,001 to 66,000 pounds…………………………………………………………………………………………………………………………… 1,731.33

66,001 to 72,000 pounds…………………………………………………………………………………………………………………………… 1,895.67

72,001 to 80,000 pounds…………………………………………………………………………………………………………………………… 2,060.00

80,001 to 90,000 pounds…………………………………………………………………………………………………………………………… 2,226.33

90,001 to 100,000 pounds…………………………………………………………………………………………………………………………. 2,468.67

100,001 to 115,000 pounds……………………………………………………………………………………………………………………….. 2,723.00

115,001 to 130,000 pounds……………………………………………………………………………………………………………………….. 2,981.33

130,001 to 145,000 pounds……………………………………………………………………………………………………………………….. 3,270.00

145,001 to 160,000 pounds……………………………………………………………………………………………………………………….. 3,560.67

over 160,000 pounds……………………………………………………………………………………………………………………………….. 3,783.67

(iii) Beginning on March 1, 2018, according to the following schedule of elected gross weights:

Elected gross weight   Tax

0 to 24,000 pounds…………………………………………………………………………………………………………………………………… $ 491.00

24,001 to 26,000 pounds…………………………………………………………………………………………………………………………… 558.00

26,001 to 28,000 pounds…………………………………………………………………………………………………………………………… 708.00

28,001 to 32,000 pounds…………………………………………………………………………………………………………………………… 849.00

32,001 to 36,000 pounds…………………………………………………………………………………………………………………………… 994.00

36,001 to 42,000 pounds…………………………………………………………………………………………………………………………… 1,174.00

42,001 to 48,000 pounds…………………………………………………………………………………………………………………………… 1,355.00

48,001 to 54,000 pounds…………………………………………………………………………………………………………………………… 1,535.00

54,001 to 60,000 pounds…………………………………………………………………………………………………………………………… 1,718.00

60,001 to 66,000 pounds…………………………………………………………………………………………………………………………… 1,898.00

66,001 to 72,000 pounds…………………………………………………………………………………………………………………………… 2,079.00

72,001 to 80,000 pounds…………………………………………………………………………………………………………………………… 2,260.00

80,001 to 90,000 pounds…………………………………………………………………………………………………………………………… 2,443.00

90,001 to 100,000 pounds…………………………………………………………………………………………………………………………. 2,702.00

100,001 to 115,000 pounds……………………………………………………………………………………………………………………….. 2,973.00

115,001 to 130,000 pounds……………………………………………………………………………………………………………………….. 3,248.00

130,001 to 145,000 pounds……………………………………………………………………………………………………………………….. 3,570.00

145,001 to 160,000 pounds……………………………………………………………………………………………………………………….. 3,894.00

over 160,000 pounds……………………………………………………………………………………………………………………………….. 4,117.00

For each commercial vehicle registered under this subdivision, $15.00 shall be deposited in a truck safety fund to be expended as provided in section 25 of 1951 PA 51, MCL 247.675.

If a truck tractor or road tractor without trailer is leased from an individual owner-operator, the lessee, whether an individual, firm, or corporation, shall pay to the owner-operator 60% of the tax prescribed in this subdivision for the truck tractor or road tractor at the rate of 1/12 for each month of the lease or arrangement in addition to the compensation the owner-operator is entitled to for the rental of his or her equipment.

(l) For each pole trailer, semitrailer, trailer coach, or trailer, the tax shall be assessed according to the following schedule of empty weights:

Empty weights   Tax

0 to 2,499 pounds…………………………………………………………………………………………………………………………………….. $ 75.00

2,500 to 9,999 pounds………………………………………………………………………………………………………………………………. 200.00

10,000 pounds and over…………………………………………………………………………………………………………………………… 300.00

The registration plate issued under this subdivision expires only when the secretary of state reissues a new registration plate for all trailers. Beginning October 1, 2005, if the secretary of state reissues a new registration plate for all trailers, a person who has once paid the tax as increased by 2003 PA 152 for a vehicle under this subdivision is not required to pay the tax for that vehicle a second time, but is required to pay only the cost of the reissued plate at the rate provided in section 804(2) for a standard plate. A registration plate issued under this subdivision is nontransferable.

(m) For each commercial vehicle used for the transportation of passengers for hire except for a vehicle for which a payment is made under 1960 PA 2, MCL 257.971 to 257.972, according to the following schedule of empty weights:

Empty weights Per 100 pounds

0 to 4,000 pounds…………………………………………………………………………………………………………………………………….. $ 1.76

4,001 to 6,000 pounds………………………………………………………………………………………………………………………………. 2.20

6,001 to 10,000 pounds…………………………………………………………………………………………………………………………….. 2.72

10,001 pounds and over…………………………………………………………………………………………………………………………… 3.25

(n) For each motorcycle, $23.00.

On October 1, 1983, and October 1, 1984, the tax assessed under this subdivision shall be annually revised for the registrations expiring on the appropriate October 1 or after that date by multiplying the tax assessed in the preceding fiscal year times the personal income of Michigan for the preceding calendar year divided by the personal income of Michigan for the calendar year that preceded that calendar year. In performing the calculations under this subdivision, the secretary of state shall use the spring preliminary report of the United States department of commerce or its successor agency.

Beginning January 1, 1984, the registration tax for each motorcycle is increased by $3.00. The $3.00 increase is not part of the tax assessed under this subdivision for the purpose of the annual October 1 revisions but is in addition to the tax assessed as a result of the annual October 1 revisions. Beginning January 1, 1984, $3.00 of each motorcycle fee shall be placed in a motorcycle safety fund in the state treasury and shall be used only for funding the motorcycle safety education program as provided for under sections 312b and 811a.

(o) For each truck weighing 8,001 pounds or more, road tractor, or truck tractor used exclusively as a moving van or part of a moving van in transporting household furniture and household effects or the equipment or those engaged in conducting carnivals, at the rate of 80% of the schedule of elected gross weights in subdivision (k) as modified by the operation of that subdivision.

(p) After September 30, 1983, each motor vehicle of the 1984 or a subsequent model year as shown on the application required under section 217 that has not been previously subject to the tax rates of this section and that is of the motor vehicle category otherwise subject to the tax schedule described in subdivision (a), and each low-speed vehicle according to the following schedule based upon registration periods of 12 months:

(i) Except as otherwise provided in this subdivision, for the first registration that is not a transfer registration under section 809 and for the first registration after a transfer registration under section 809, according to the following schedule based on the vehicle’s list price:

List Price   Tax

$ 0 – $ 6,000.00………………………………………………………………………………………………………………………………………… $ 30.00

More than $ 6,000.00 – $ 7,000.00……………………………………………………………………………………………………………. $ 33.00

More than $ 7,000.00 – $ 8,000.00……………………………………………………………………………………………………………. $ 38.00

More than $ 8,000.00 – $ 9,000.00……………………………………………………………………………………………………………. $ 43.00

More than $ 9,000.00 – $ 10,000.00………………………………………………………………………………………………………….. $ 48.00

More than $ 10,000.00 – $ 11,000.00………………………………………………………………………………………………………… $ 53.00

More than $ 11,000.00 – $ 12,000.00………………………………………………………………………………………………………… $ 58.00

More than $ 12,000.00 – $ 13,000.00………………………………………………………………………………………………………… $ 63.00

More than $ 13,000.00 – $ 14,000.00………………………………………………………………………………………………………… $ 68.00

More than $ 14,000.00 – $ 15,000.00………………………………………………………………………………………………………… $ 73.00

More than $ 15,000.00 – $ 16,000.00………………………………………………………………………………………………………… $ 78.00

More than $ 16,000.00 – $ 17,000.00………………………………………………………………………………………………………… $ 83.00

More than $ 17,000.00 – $ 18,000.00………………………………………………………………………………………………………… $ 88.00

More than $ 18,000.00 – $ 19,000.00………………………………………………………………………………………………………… $ 93.00

More than $ 19,000.00 – $ 20,000.00………………………………………………………………………………………………………… $ 98.00

More than $ 20,000.00 – $ 21,000.00………………………………………………………………………………………………………… $ 103.00

More than $ 21,000.00 – $ 22,000.00………………………………………………………………………………………………………… $ 108.00

More than $ 22,000.00 – $ 23,000.00………………………………………………………………………………………………………… $ 113.00

More than $ 23,000.00 – $ 24,000.00………………………………………………………………………………………………………… $ 118.00

More than $ 24,000.00 – $ 25,000.00………………………………………………………………………………………………………… $ 123.00

More than $ 25,000.00 – $ 26,000.00………………………………………………………………………………………………………… $ 128.00

More than $ 26,000.00 – $ 27,000.00………………………………………………………………………………………………………… $ 133.00

More than $ 27,000.00 – $ 28,000.00………………………………………………………………………………………………………… $ 138.00

More than $ 28,000.00 – $ 29,000.00………………………………………………………………………………………………………… $ 143.00

More than $ 29,000.00 – $ 30,000.00………………………………………………………………………………………………………… $ 148.00

More than $30,000.00, the tax of $148.00 is increased by $5.00 for each $1,000.00 increment or fraction of a $1,000.00 increment over $30,000.00. If a current tax increases or decreases as a result of 1998 PA 384, only a vehicle purchased or transferred after January 1, 1999 shall be assessed the increased or decreased tax.

(ii) Until January 1, 2016, for model year 2015 vehicles, 90% of the tax assessed under subparagraph (i).

(iii) Until January 1, 2016, for model year 2014 vehicles, 90% of the tax assessed under subparagraph (ii).

(iv) Until January 1, 2016, for model year 2013 vehicles, 90% of the tax assessed under subparagraph (iii).

The registration tax for a model year 2013 through model year 1984 vehicle that had a valid registration on January 1, 2016 shall be the same as the most recently paid registration tax for that vehicle.

For a vehicle of the 1984 or a subsequent model year that has been previously registered by a person other than the person applying for registration or for a vehicle of the 1984 or a subsequent model year that has been previously registered in another state or country and is registered for the first time in this state, the tax under this subdivision shall be determined by subtracting the model year of the vehicle from the calendar year for which the registration is sought. If the result is zero or a negative figure, the first registration tax shall be paid. If the result is 1, 2, or 3 or more, then, respectively, the second, third, or subsequent registration tax shall be paid. A van that is owned by an individual who uses a wheelchair or by an individual who transports a member of his or her household who uses a wheelchair and for which registration plates are issued under section 803d shall be assessed at the rate of 50% of the tax provided for in this subdivision.

(q) For a wrecker, $200.00.

(r) When the secretary of state computes a tax under this act, a computation that does not result in a whole dollar figure shall be rounded to the next lower whole dollar when the computation results in a figure ending in 50 cents or less and shall be rounded to the next higher whole dollar when the computation results in a figure ending in 51 cents or more, unless specific taxes are specified, and the secretary of state may accept the manufacturer’s shipping weight of the vehicle fully equipped for the use for which the registration application is made. If the weight is not correctly stated or is not satisfactory, the secretary of state shall determine the actual weight. Each application for registration of a vehicle under subdivisions (j) and (m) shall have attached to the application a scale weight receipt of the vehicle fully equipped as of the time the application is made. The scale weight receipt is not necessary if there is presented with the application a registration receipt of the previous year that shows on its face the weight of the motor vehicle as registered with the secretary of state and that is accompanied by a statement of the applicant that there has not been a structural change in the motor vehicle that has increased the weight and that the previous registered weight is the true weight.

(2) A manufacturer is not exempted under this act from paying ad valorem taxes on vehicles in stock or bond, except on the specified number of motor vehicles registered. A dealer is exempt from paying ad valorem taxes on vehicles in stock or bond.

(3) Until October 1, 2015, the tax for a vehicle with an empty weight over 10,000 pounds imposed under subsection (1)(a) and the taxes imposed under subsection (1)(c), (d), (e), (f), (i), (j), (m), (o), and (p) are each increased as follows:

(a) A regulatory fee of $2.25 that shall be credited to the traffic law enforcement and safety fund created in section 819a and used to regulate highway safety.

(b) A fee of $5.75 that shall be credited to the transportation administration collection fund created in section 810b.

(4) If a tax required to be paid under this section is not received by the secretary of state on or before the expiration date of the registration plate, the secretary of state shall collect a late fee of $10.00 for each registration renewed after the expiration date. An application for a renewal of a registration using the regular mail and postmarked before the expiration date of that registration shall not be assessed a late fee. The late fee collected under this subsection shall be deposited into the general fund.

(5) In addition to the registration taxes under this section, the secretary of state shall collect taxes charged under section 801j and credit revenues to a regional transit authority created under the regional transit authority act, minus necessary collection expenses as provided in section 9 of article IX of the state constitution of 1963. Necessary collection expenses incurred by the secretary of state under this subsection shall be based upon an established cost allocation methodology.

(6) This section does not apply to a historic vehicle.

(7) The registration fee imposed under this section for an electric vehicle is increased as follows:

(a) As classified by the secretary of state, if the vehicle is of a brand or has been modified to be powered solely or predominately by electricity under normal average class operating conditions, the registration fee for that vehicle under this section is increased by $75.00 for a vehicle with an empty weight of 8,000 pounds or less, and $200.00 for a vehicle with an empty weight of more than 8,000 pounds.

(b) As classified by the secretary of state, if the vehicle is of a brand or has been modified to be partially powered, but not predominately powered, by electricity under normal average class operating conditions, the registration fee for that vehicle under this section is increased by $25.00 for a vehicle with an empty weight of 8,000 pounds or less, and $100.00 for a vehicle with an empty weight of more than 8,000 pounds.

(8) As used in this section:

(a) “Gross proceeds” means that term as defined in section 1 of the general sales tax act, 1933 PA 167, MCL 205.51, and includes the value of the motor vehicle used as part payment of the purchase price as that value is agreed to by the parties to the sale, as evidenced by the signed agreement executed under section 251.

(b) “List price” means the manufacturer’s suggested base list price as published by the secretary of state, or the manufacturer’s suggested retail price as shown on the label required to be affixed to the vehicle under 15 USC 1232, if the secretary of state has not at the time of the sale of the vehicle published a manufacturer’s suggested retail price for that vehicle, or the purchase price of the vehicle if the manufacturer’s suggested base list price is unavailable from the sources described in this subdivision.

(c) “Purchase price” means the gross proceeds received by the seller in consideration of the sale of the motor vehicle being registered.

Enacting section 1. The department shall implement the changes made by the amendatory act that added this enacting section no later than January 1, 2016.

Enacting section 2. This amendatory act does not take effect unless House Joint Resolution UU of the 97th Legislature becomes a part of the state constitution of 1963 as provided in section 1 of article XII of the state constitution of 1963.

This act is ordered to take immediate effect.


Public Act 471 of 2014

ENROLLED HOUSE BILL No. 5167

AN ACT 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 section 11c (MCL 247.661c), as amended by 2002 PA 498.

The People of the State of Michigan enact:

Sec. 11c. (1) All construction projects of the department concerning highways, streets, roads, and bridges, whose cost exceeds $100,000.00 for construction or preservation as defined in section 10c, shall be performed by contract awarded by competitive bidding unless the department affirmatively finds that under the circumstances relating to those projects, some other method is in the public interest. The director of the department shall report his or her findings to the state transportation commission 90 days before work is commenced and promptly in writing to the appropriations committees of the senate and house of representatives. However, in a case in which the department determines emergency action is required, the reports need not be filed before a contract is awarded but shall be promptly filed.

(2) All construction projects of a local road agency whose costs exceed $100,000.00 for construction or preservation, excluding maintenance, shall be performed by contract awarded by competitive bidding unless the local road agency affirmatively finds that under the circumstances relating to those projects, some other method is in the public interest. Installation or upgrading of advanced traffic management and signals is exempt from this subsection. A county road commission shall report its findings before work is commenced in writing to the county board of commissioners of that county. A city or village shall report its findings before work is commenced in writing to the governing elected body of that city or village.

(3) The department shall develop and implement a performance-based maintenance system to improve efficiencies and outcomes in the performance of maintenance services on state trunk line highways.

(4) No later than February 1, 2016, the department shall develop and implement a performance rating system for the maintenance services performed on all highways, streets, and roads under its jurisdiction. The performance rating system shall provide for the collection of data on all maintenance activities, including the quantities and locations of activities performed and the costs associated with those activities.

(5) Beginning October 1, 2016, a minimum of 20% of all funds expended by the department for maintenance services shall be based on performance outputs or outcomes associated with the performance rating system required under subsection (4).

(6) The director of the department shall report results and findings on the outcomes of state trunk line highway maintenance services, the contracting process, and contract performance for all contracts entered into under this section no later than June 1, 2017, and on December 1 of each subsequent year to the appropriations committees of the senate and house of representatives.

(7) A local road agency that received at least $20,000,000.00 in funding from the Michigan transportation fund in fiscal year 2013 shall develop, in conjunction with the transportation asset management council and the department, and implement a performance-based preventative maintenance system to improve efficiencies and outcomes in the performance of preventative maintenance services on all highways, streets, and roads under its jurisdiction.

(8) No later than February 1, 2017, a local road agency described in subsection (7) shall develop and implement a performance rating system for the preventative maintenance services performed on all highways, streets, and roads under its jurisdiction. The performance rating system shall provide for the collection of data on all preventative maintenance activities, including the quantities and locations of activities performed and the costs associated with those activities.

(9) Beginning October 1, 2017, a minimum of 20% of all funds expended by a local road agency described in subsection (7) for preventative maintenance services shall be based on performance outputs or outcomes associated with the performance rating system required under subsection (8).

(10) The chief executive of each local road agency required to competitively bid under this section shall report results and findings on the outcomes of preventative maintenance services performed on all highways, streets, and roads under the jurisdiction of that local road agency, the contracting process, and contract performance for all contracts entered into under this section no later than June 1, 2018, and on June 1 of each subsequent year to the director of the department and to the appropriations committees of the senate and house of representatives.

(11) As used in this section:

(a) “Local road agency” means that term as defined in section 9a.

(b) “Maintenance services” means routine and reactive maintenance activities undertaken to ensure the normal and safe operation of a highway, street, or road, including activities performed on an appurtenance or roadside feature associated with a highway, street, or road that is necessary for the safe operation of the appurtenance or roadside feature. Maintenance services do not include a construction activity that is intended to significantly repair, resurface, rehabilitate, or reconstruct a highway, street, or road, or an appurtenance or roadside feature associated with a highway, street, or road.

Enacting section 1. This amendatory act does not take effect unless House Joint Resolution UU of the 97th Legislature becomes a part of the state constitution of 1963 as provided in section 1 of article XII of the state constitution of 1963.

This act is ordered to take immediate effect.


Public Act 472 of 2014

ENROLLED HOUSE BILL No. 4251

AN ACT to amend 1909 PA 283, entitled “An act to revise, consolidate, and add to the laws relating to the establishment, opening, discontinuing, vacating, closing, altering, improvement, maintenance, and use of the public highways and private roads; the condemnation of property and gravel therefor; the building, repairing and preservation of bridges; maintaining public access to waterways under certain conditions; setting and protecting shade trees, drainage, and cutting weeds and brush within this state; providing for the election or appointment and defining the powers, duties, and compensation of state, county, township, and district highway officials; and to prescribe penalties and provide remedies,” (MCL 220.1 to 239.6) by adding section 19c to chapter IV.

The People of the State of Michigan enact:

CHAPTER IV

Sec. 19c. (1) Notwithstanding any provision of law to the contrary and subject to subsections (4) and (6), if a single township contributes 50% or more to the cost of a road project, the road project is located entirely within the jurisdiction of the township, and the road project does not disrupt any multiple township contract, the township board, by resolution, may require that the county road commission contract for the work on that road project through competitive bidding. A county road commission is not prohibited from submitting a competitive bid under this section.

(2) If a township board requires a county road commission to contract for work on a road project through competitive bidding as permitted under subsection (1), the county road commission shall use the responsive and reasonable best value bidder process to competitively bid and award the road project contract to a responsive and reasonable best value bidder. As used in this subsection, “responsive and reasonable best value bidder” means a bidder who meets 1 of the following:

(a) Complies with all bid specifications and requirements and is listed by the Michigan department of transportation as a qualified bidder for the particular type of road project involved.

(b) Complies with all bid specifications and requirements and is determined by the Michigan department of transportation or the county road commission to be responsible using all of the following criteria:

(i) The bidder’s financial resources.

(ii) The bidder’s technical capabilities.

(iii) The bidder’s professional experience.

(iv) The bidder’s past performance.

(v) The bidder’s insurance and bonding capacity.

(3) If a township board requires a county road commission to contract for work on a road project through competitive bidding as permitted under subsection (1), the county road commission shall, within 15 days after the deadline for accepting bids, do all of the following:

(a) Based on the responsive and reasonable best value bidder process, determine which bids submitted are qualified and which bids submitted are not qualified.

(b) Clearly mark the bids, indicating which bids are qualified and which bids are not qualified.

(c) Transmit all of the bids received to the township board described in subsection (1) at least 30 days before awarding the contract to a qualified bidder.

(4) Subsections (1), (2), and (3) only apply to the following road projects:

(a) A road project involving unpaved roads with an estimated cost of more than $25,000.00.

(b) A road project involving paved roads with an estimated cost of more than $50,000.00.

(5) Notwithstanding any provision of law to the contrary and subject to subsection (10), if a single township contributes 50% or more to the cost of a very low-volume local road project, the road project is located entirely within the jurisdiction of the township, and the road project does not disrupt any multiple township contract, the work on that very low-volume local road project shall, at a minimum, comply with the standards adopted by the American association of state highway and transportation officials for very low-volume local road projects. A county road commission shall not impose construction and design standards on a very low-volume local road project that exceed the American association of state highway and transportation officials construction and design standards for very low-volume local road projects unless those standards are approved by the township board described in this subsection. As used in this subsection, “very low-volume local road” means that term as defined by the American association of state highway and transportation officials in guidelines for geometric design of very low-volume local roads (ADT ≤ 400).

(6) Notwithstanding any provision of law to the contrary and subject to subsection (9), if 2 or more townships in combination with one another contribute 50% or more to the cost of a road project, the road project is located entirely within the jurisdiction of those townships, and the road project does not disrupt any multiple township contract, the township board of each of those townships, by resolution, may require that the county road commission contract for the work on that road project through competitive bidding. Competitive bidding by the county road commission is required on a road project described in this subsection only if each township board described in this subsection passes a resolution requiring that the work be awarded through competitive bidding. A county road commission is not prohibited from submitting a competitive bid under this section.

(7) If each township board requires a county road commission to contract for work on a road project through competitive bidding as permitted under subsection (6), the county road commission shall use the responsive and reasonable best value bidder process to competitively bid and award the road project contract to a responsive and reasonable best value bidder. As used in this subsection, “responsive and reasonable best value bidder” means a bidder who meets 1 of the following:

(a) Complies with all bid specifications and requirements and is listed by the Michigan department of transportation as a qualified bidder for the particular type of road project involved.

(b) Complies with all bid specifications and requirements and is determined by the Michigan department of transportation or the county road commission to be responsible using all of the following criteria:

(i) The bidder’s financial resources.

(ii) The bidder’s technical capabilities.

(iii) The bidder’s professional experience.

(iv) The bidder’s past performance.

(v) The bidder’s insurance and bonding capacity.

(8) If each township board requires a county road commission to contract for work on a road project through competitive bidding as permitted under subsection (6), the county road commission shall, within 15 days after the deadline for accepting bids, do all of the following:

(a) Based on the responsive and reasonable best value bidder process, determine which bids submitted are qualified and which bids submitted are not qualified.

(b) Clearly mark the bids, indicating which bids are qualified and which bids are not qualified.

(c) Transmit all of the bids received to each township board described in subsection (6) at least 30 days before awarding the contract to a qualified bidder.

(9) Subsections (6), (7), and (8) only apply to the following road projects:

(a) A road project involving unpaved roads with an estimated cost of more than $25,000.00.

(b) A road project involving paved roads with an estimated cost of more than $50,000.00.

(10) Notwithstanding any provision of law to the contrary, if 2 or more townships in combination with one another contribute 50% or more to the cost of a very low-volume local road project, the road project is located entirely within the jurisdiction of those townships, and the road project does not disrupt any multiple township contract, the work on that very low-volume local road project shall, at a minimum, comply with the standards adopted by the American association of state highway and transportation officials for very low-volume local road projects. A county road commission shall not impose construction and design standards on a very low-volume local road project that exceed the American association of state highway and transportation officials construction and design standards for very low-volume local road projects unless those standards are approved by each of the township boards described in this subsection. As used in this subsection, “very low-volume local road” means that term as defined by the American association of state highway and transportation officials in guidelines for geometric design of very low-volume local roads (ADT ≤ 400).

Enacting section 1. This amendatory act takes effect February 1, 2016.

Enacting section 2. This amendatory act does not take effect unless House Joint Resolution UU of the 97th Legislature becomes a part of the state constitution of 1963 as provided in section 1 of article XII of the state constitution of 1963.

This act is ordered to take immediate effect.


Public Act 473 of 2014

ENROLLED HOUSE BILL No. 5460

AN ACT 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 9b, 10, 11, 12, 13, and 14 (MCL 247.659b, 247.660, 247.661, 247.662, 247.663, and 247.664), section 9b as added by 1997 PA 79, section 10 as amended by 2007 PA 210, section 11 as amended by 2002 PA 639, 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. 9b. (1) After July 1, 1997, the department shall do all of the following regarding contracts to construct, repair, or maintain roads or bridges:

(a) Establish technical assistance programs to prepare small business enterprises to compete for contracts on projects that use only state funds, and to prepare disadvantaged business enterprises to compete on projects that include federal aid funds. The technical assistance programs described in this subdivision may include the use of small business enterprise or disadvantaged business enterprise technical assistants, best value contracting procurement, and training for competing for work under a contract described in this subdivision.

(b) Assist in creating and developing sources of nontraditional capital to assist small business enterprises and disadvantaged business enterprises to compete for contracts. The department, in conjunction with the Michigan economic development corporation, shall investigate the creation of a state revolving loan fund created within the Michigan economic development corporation to provide necessary capital. The department and the Michigan economic development corporation shall report the results of the investigation to the senate and house appropriations committees no later than 1 year after the effective date of the amendatory act that amended this subdivision.

(c) Assist in creating and developing incentives for firms to mentor small business enterprises and disadvantaged business enterprises to assist those business enterprises in gaining the experience and resources necessary to compete for contracts. The incentives described in this subdivision may include programs for the training and placement of skilled workers for infrastructure trades and related occupations, either independently or cooperatively with other state agencies. The department shall investigate the potential of incorporating a 5-year skilled worker projection into its current 5-year plans, and shall report the results of that investigation to the senate and house appropriations committees no later than 1 year after the effective date of the amendatory act that amended this subdivision.

(d) Increase information programs to inform small business enterprises and disadvantaged business enterprises of opportunities to compete for contracts.

(e) Except as otherwise provided in this subdivision, when practical, develop small business enterprise or disadvantaged business enterprise utilization plans for larger and more complex projects. The department shall use small business enterprise or disadvantaged business enterprise utilization plans for projects in which the final cost is anticipated to exceed $8,000,000.00 unless the project specifications or current best practices do not justify the use of such a plan. The department shall include a list of projects in which the final cost is anticipated to exceed $8,000,000.00 for which project specifications or current best practices do not justify the use of a small business enterprise or disadvantaged business enterprise utilization plan in the report required by subsection (2). This subdivision does not preclude the use of a small business enterprise or disadvantaged business enterprise utilization plan for a project with a final anticipated cost of below $8,000,000.00 when the use of such a plan is appropriate for the project, or when a disadvantaged business utilization goal has been established consistent with federal requirements. The project threshold of $8,000,000.00 may be adjusted annually to reflect research-based or national best practices.

(2) The department shall notify the majority and minority chairpersons of the house and senate appropriations committees and the majority and minority chairpersons of the house and senate committees that consider transportation matters of each contract awarded to small business enterprises and disadvantaged business enterprises under this section. The department shall also provide a list of contracts that used small business enterprise or disadvantaged business enterprise utilization plans implemented under subsection (1)(e), and shall provide a recommendation as to whether the benchmark figure described in subsection (1)(e) should be increased or decreased based on the experience of the department and national best practices.

(3) The department shall conduct a disparity study on the use of small business enterprises and disadvantaged business enterprises in state contracts. The study required under this subsection shall use standards developed by the transportation research board’s national cooperative highway research program as those standards exist on the effective date of the amendatory act that added this subsection. The department shall report the results of the study required by this subsection and its recommendations for process improvements that will address disparities to the senate and house appropriations committees no later than 1 year after the effective date of the amendatory act that added this subsection.

(4) As used in this section:

(a) “Small business enterprise” means that term as defined in 13 CFR part 121.

(b) “Disadvantaged business enterprise” means that term as defined in 49 CFR part 26.

(c) “Empowerment zone” means an area designated as an empowerment zone by the United States department of housing and urban development.

(d) “Enterprise zone” means a neighborhood enterprise zone designated under the neighborhood enterprise zone act, 1992 PA 147, MCL 207.771 to 207.787.

(5) After July 28, 1997, the department shall do all of the following regarding contracts to construct or repair roads and bridges:

(a) Annually consult with the Michigan state chamber of commerce, the Michigan infrastructure and transportation association, the black caucus foundation of Michigan excluding any currently serving legislators, the Michigan Hispanic chamber of commerce, and the Michigan minority business development council on requests for proposals and requests for quotations to ensure competitive and inclusive strategies which ensure an inclusive and competitive bid environment.

(b) Review current contract processes to determine whether small business enterprises or disadvantaged business enterprises are adequately informed of the process for appealing contract decisions or learning how to improve bids for future contracts.

Sec. 10. (1) A fund to be known as the Michigan transportation fund is established in the state treasury as a separate fund. The state treasurer may receive money or other assets from any source for deposit into the fund. The state treasurer shall direct the investment of the fund. The state treasurer shall credit to the fund interest and earnings from fund investments. Except as provided in this act, no other money, whether appropriated from the general fund of this state or any other source, shall be deposited in the Michigan transportation fund. Except as otherwise provided in this section, the legislature shall appropriate money for the necessary expenses incurred in the administration and enforcement of the motor fuel tax act, 2000 PA 403, MCL 207.1001 to 207.1170, the motor carrier act, 1933 PA 254, MCL 475.1 to 479.43, and sections 801 to 810 of the Michigan vehicle code, 1949 PA 300, MCL 257.801 to 257.810. Money appropriated for necessary expenses shall be based upon established cost allocation methodology that reflects actual costs. Appropriations for the necessary expenses incurred by the department of state in administration and enforcement of sections 801 to 810 of the Michigan vehicle code, 1949 PA 300, MCL 257.801 to 257.810, shall be made from the Michigan transportation fund and from money in the transportation administration collection fund created in section 810b of the Michigan vehicle code, 1949 PA 300, MCL 257.810b. Appropriations from the Michigan transportation fund for the necessary expenses incurred by the department of state in administration and enforcement of sections 801 to 810 of the Michigan vehicle code, 1949 PA 300, MCL 257.801 to 257.810, shall not exceed $20,000,000.00 per state fiscal year. Except as provided in section 143 of the motor fuel tax act, 2000 PA 403, MCL 207.1143, all money in the Michigan transportation fund is apportioned and appropriated in the following manner:

(a) Not more than $3,000,000.00 as may be annually appropriated each fiscal year to the state trunk line fund for subsequent deposit in the rail grade crossing account.

(b) Not more than $3,000,000.00 as may be annually appropriated each fiscal year to the state trunk line fund for subsequent deposit in the grade crossing surface account.

(c) Not less than $3,000,000.00 each year to the local bridge fund established in subsection (4) for the purpose of payment of the principal, interest, and redemption premium on any notes or bonds issued by the state transportation commission under former section 11b or subsection (9).

(d) Revenue from 3 cents of the tax levied under section 8(1)(a) of the motor fuel tax act, 2000 PA 403, MCL 207.1008, to the state trunk line fund, county road commissions, and cities and villages in the percentages provided in subdivision (k).

(e) One-half of the revenue from 1 cent of the tax levied under section 8(1)(a) of the motor fuel tax act, 2000 PA 403, MCL 207.1008, to the state trunk line fund for the repair of state bridges under section 11, and 1/2 of the revenue from 1 cent of the tax levied under section 8(1)(a) of the motor fuel tax act, 2000 PA 403, MCL 207.1008, to the local bridge fund created in subsection (4) for distribution only to cities, villages, and county road commissions.

(f) $43,000,000.00 to the state trunk line fund for debt service costs on state of Michigan projects.

(g) Ten percent to the comprehensive transportation fund for the purposes described in section 10e.

(h) $5,000,000.00 to the local bridge fund established in subsection (4) for distribution only to the local bridge advisory board, the regional bridge councils, cities, villages, and county road commissions.

(i) $36,775,000.00 to the state trunk line fund for subsequent deposit in the transportation economic development fund, with first priority for allocation to debt service on bonds issued to fund transportation economic development fund projects. In addition, $3,500,000.00 is appropriated from the Michigan transportation fund to the state trunk line fund for subsequent deposit in the transportation economic development fund to be used for economic development road projects in any of the targeted industries described in section 9(1)(a) of 1987 PA 231, MCL 247.909.

(j) Not less than $33,000,000.00 as may be annually appropriated each fiscal year to the local program fund created in section 11e.

(k) The balance of the Michigan transportation fund as follows, after deduction of the amounts appropriated in subdivisions (a) to (j):

(i) 39.1% to the state trunk line fund for the purposes described in section 11.

(ii) 39.1% to the county road commissions of this state.

(iii) 21.8% to the cities and villages of this state.

(2) The money appropriated pursuant to this section shall be used for the purposes as provided in this act and any other applicable act. Subject to the requirements of section 9b, the department shall develop programs in conjunction with the Michigan state chamber of commerce and the Michigan minority business development council to assist small businesses, including those located in enterprise zones and those located in empowerment zones as determined under federal law, as defined by law in becoming qualified to bid.

(3) Thirty-one and one-half percent of the money appropriated to this state from the federal government under 23 USC 157, commonly known as minimum guarantee funds, shall be allocated to the transportation economic development fund, if the allocation is consistent with federal law. This money shall be distributed 16-1/2% for development projects for rural counties as defined by law and 15% for capacity improvement or advanced traffic management systems in urban counties as defined by law. Federal money allocated for distribution under this section is eligible for obligation and use by all recipients as provided in the moving ahead for progress in the 21st century act, Public Law 112-141.

(4) A fund to be known as the local bridge fund is established in the state treasury as a separate fund. The money appropriated to the local bridge fund and the interest accruing to that fund shall be expended for the local bridge program. The purpose of the fund is to provide financial assistance to highway authorities for the preservation, improvement, or reconstruction of existing bridges or for the construction of bridges to replace existing bridges in whole or part. The money in the local bridge fund is not subject to section 12(15) or 13(5). The local bridge advisory board is created and shall consist of 6 voting members appointed by the state transportation commission and 2 nonvoting members appointed by the department. The board shall include 3 members from the county road association of Michigan, 1 member who represents counties with populations 65,000 or greater, 1 member who represents counties with populations greater than 30,000 and less than 65,000, and 1 member who represents counties with populations of 30,000 or less. Three members shall be appointed from the Michigan municipal league, 1 member who represents cities with a population 75,000 or greater, 1 member who represents cities with a population less than 75,000, and 1 member who represents villages. Each organization with voting rights shall submit a list of nominees in each population category to the state transportation commission. The state transportation commission shall make the appointments from the lists submitted under this subsection. Voting members shall be appointed for 2 years. The chairperson of the board shall be selected from among the voting members of the board. In addition to the 2 nonvoting members, the department shall provide qualified administrative staff and qualified technical assistance to the board.

(5) No less than 5% and no more than 15% of the money received in the local bridge fund may be used for critical repair of large bridges and emergencies as determined by the local bridge advisory board. Money remaining after the money allocated for critical large bridge repair and emergencies is deducted shall be distributed by the board to the regional bridge councils created under this section. One regional council shall be formed for each department of transportation region as those regions exist on October 1, 2004. The regional councils shall consist of 2 members of the county road association of Michigan from counties in the region, 2 members of the Michigan municipal league from cities and villages in the region, and 1 member of the department in each region. The members of the department are nonvoting members and shall provide qualified administrative staff and qualified technical assistance to the regional councils.

(6) Money in the local bridge fund after deduction of the amounts set aside for critical repair of large bridges and emergency repairs shall be distributed among the regional bridge councils according to all of the following ratios, which shall be assigned a weight expressed as a percentage as determined by the board, with each ratio receiving no greater than a 50% weight and no less than a 25% weight:

(a) A ratio with a numerator that is the total number of local bridges in the region and a denominator that is the total number of local bridges in this state.

(b) A ratio with a numerator that is the total local bridge deck area in the region and a denominator that is the total local bridge deck area in this state.

(c) A ratio with a numerator that is the total amount of structurally deficient local bridge deck area in the region and a denominator that is the total amount of structurally deficient local bridge deck area in this state.

(7) The regional bridge councils shall allocate the money received from the board for the preservation, improvement, and reconstruction of existing bridges or for the construction of bridges to replace existing bridges in whole or in part in each region.

(8) Each January, the department shall submit a report to the chair and the minority vice-chair of the appropriations committees of the senate and the house of representatives, and to the standing committees on transportation of the senate and the house of representatives, on all of the following activities for the previous state fiscal year:

(a) A listing of how much money was dedicated for emergency and large bridge repair.

(b) A listing of what emergency and large bridge repair projects were funded.

(c) The actual weights used in the calculation required under subsection (6).

(d) A listing of the total money distributed to each region.

(e) A listing of the specific projects that were funded under subsection (7).

(9) The state transportation commission shall borrow money and issue notes or bonds in an amount of not less than $30,000,000.00 to supplement the funding provided for the local bridge program under subsection (5). The bonds or notes issued under this subsection may be issued by the commission for any purpose for which other local bridge money may be used under this section. The bonds or notes authorized by this subsection shall be issued by resolution of the state transportation commission consistent with the requirements of section 18b.

(10) The department shall promulgate rules under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, governing the administration of the local bridge program. The rules shall set forth the eligibility criteria for financial assistance under the program and other matters related to the program that the department considers necessary and desirable. The department shall take into consideration the availability of federal aid and other financial resources of the highway authority responsible for the bridge, the importance of the bridge to the highway, road, or street network, and the condition of the existing bridge.

(11) The revenue appropriated to the local bridge fund under subsection (1)(e) shall be distributed only to the local bridge advisory board, the regional bridge councils, cities, villages, and county road commissions.

(12) The regional bridge councils shall determine what bridge projects are selected for funding from the local bridge fund created in subsection (4) and shall make a list of selected projects available to interested parties in the region. A determination that a bridge project is selected for funding in a given fiscal year is not approval to disburse the money.

(13) A county road commission, city, or village may implement a bridge project if the bridge project has been selected for funding and is included in the appropriate regional bridge council’s current multiyear bridge plan for the local bridge program but the regional bridge council has not allocated money to the bridge project for the fiscal year that the bridge project is on the current multiyear bridge plan. A county road commission, city, or village may borrow money to implement a project that has been selected for funding and is included in the appropriate regional bridge council’s current multiyear bridge plan but has not been allocated money by the regional bridge council. Based on available local bridge money, when a bridge project that was implemented with borrowed money is allocated funding in a subsequent fiscal year, the funding shall only be used to repay the amount approved by the multiyear bridge plan when the money was borrowed. To be eligible for repayment of the amount borrowed, a bridge project that has been implemented with borrowed money shall be administered through the department’s local bridge program.

Sec. 11. (1) A fund to be known as the state trunk line fund is established in the state treasury as a separate fund. The money deposited in the state trunk line fund is appropriated to the department for the following purposes in the following order of priority:

(a) For the payment, but only from money restricted as to use by section 9 of article IX of the state constitution of 1963, of bonds, notes, or other obligations in the following order of priority:

(i) For the payment of contributions pledged before July 18, 1979 and required to be made by the state highway commission or the state transportation commission under contracts entered into before July 18, 1979, under 1941 PA 205, MCL 252.51 to 252.64, for the payment of the principal and interest on bonds issued under 1941 PA 205, MCL 252.51 to 252.64, for the payment of which a sufficient sum is irrevocably appropriated.

(ii) For the payment of the principal and interest upon bonds designated “State of Michigan, State Highway Commissioner, Highway Construction Bonds, Series I”, dated September 1, 1956, in the aggregate principal amount of $25,000,000.00, issued pursuant to former 1955 PA 87 and the resolution of the state administrative board adopted August 6, 1956, for the payment of which a sufficient sum is irrevocably appropriated.

(iii) For the payment of the principal and interest on bonds issued under section 18b for transportation purposes other than comprehensive transportation purposes as defined by law and the payment of contributions pledged to the payment of principal and interest on bonds issued under section 18d and contracts entered into under section 18d by the state highway commission or state transportation commission to be made pursuant to contracts entered into under section 18d. A sufficient portion of the fund is irrevocably appropriated to pay, when due, the principal and interest on bonds or notes issued under section 18b for purposes other than comprehensive transportation purposes as defined by law, and to pay the annual contributions of the state highway commission and the state transportation commission as are pledged for the payment of bonds issued under contracts authorized by section 18d.

(b) For the transfer of money appropriated under section 10(1)(i) to the transportation economic development fund, but the transfer shall be reduced each fiscal year by the amount of debt service to be paid in that year from the state trunk line fund for bonds, notes, or other obligations issued to fund projects of the transportation economic development fund, which amount shall be certified by the department.

(c) For the transfer of money appropriated under section 10(1)(a) to the rail grade crossing account in the state trunk line fund for expenditure for rail grade crossing improvement purposes at rail grade crossings on public roads and streets under the jurisdiction of this state, counties, cities, or villages. The department shall select projects for funding in accordance with the following:

(i) Not more than 50% or less than 30% of this money and matched federal money shall be expended for state trunk line projects.

(ii) In prioritizing projects for this money, in whole or in part, the department shall consider train and vehicular traffic volumes, accident history, traffic control device improvement needs, and the availability of funding.

(iii) Consistent with the other requirements for this money, the first priority for money deposited under this subdivision for rail grade crossing improvements and retirement shall be to match federal money from the railroad-highway grade crossing improvement program or other comparable federal programs if a match is required under federal law.

(iv) If the department and a road authority with jurisdiction over the crossing formally agree that the grade crossing should be eliminated by permanent closing of the public road or street, the physical removal of the crossing, roadway within railroad rights of way and street termination treatment shall be negotiated between the road authority and railroad company. The money provided to the road authority as a result of the crossing closure shall be credited to its account representing the same road or street system on which the crossing is located and shall be used for any transportation purpose within that road authority’s jurisdiction.

(d) For the transfer of money appropriated under section 10(1)(b) to the grade crossing surface account in the state trunk line fund for expenditure for rail grade crossing surface improvement purposes at rail grade crossings on public roads and streets under the jurisdiction of counties, cities, or villages. Projects shall be selected for funding in accordance with the following:

(i) In prioritizing projects, the department shall consider vehicular traffic volumes, relative crossing surface condition, the ability of the railroad and local road authority to make coordinated improvements, and the availability of funding.

(ii) The grade crossing surface account shall fund 60% of the project cost, with the remaining 40% funded by the railroad company.

(iii) Funding under the grade crossing surface account shall be limited to items of work that are normally the responsibility of the railroad under section 309 of the railroad code of 1993, 1993 PA 354, MCL 462.309. Maintenance of the roadway approaches to the crossing will continue to be the responsibility of the party with jurisdiction over that roadway.

(e) For the total operating expenses of the state trunk line fund for each fiscal year as appropriated by the legislature.

(f) For the preservation of state trunk line highways and bridges.

(g) For the opening, widening, improving, construction, and reconstruction of state trunk line highways and bridges, including the acquisition of necessary rights of way and the work incidental to that opening, widening, improving, construction, or reconstruction. Those sums in the state trunk line fund not otherwise appropriated, distributed, determined, or set aside by law shall be used for the construction or reconstruction of the national system of interstate and defense highways, referred to in this act as “the interstate highway system” to the extent necessary to match federal aid money as the federal aid money becomes available for that purpose; and, for the construction and reconstruction of the state trunk line system.

(h) The department may enter into agreements with a local road agency or a private sector company to perform work on a highway, road, or street. The agreements may provide for the performance by any of the contracting parties of any of the work contemplated by the contract including maintenance, engineering services, and the acquisition of rights of way in connection with the work, by purchase or condemnation by any of the contracting parties in its own name, and for joint participation in the costs, but only to the extent that the contracting parties are otherwise authorized by law to expend money on the highways, roads, or streets. The department also may contract with a local road agency to advance money to a local road agency to pay the costs of improving railroad grade crossings on the terms and conditions agreed to in the contract. A contract may be executed before or after the state transportation commission borrows money for the purpose of advancing money to a local road agency, but the contract shall be executed before the advancement of any money to a local road agency by the state transportation commission, and shall provide for the full reimbursement of any advancement by a local road agency to the department, with interest, within 15 years after advancement, from any available revenue sources of the local road agency or, if provided in the contract, by deduction from the periodic disbursements of any money returned by the state to the local road agency.

(i) For providing inventories of supplies and materials required for the activities of the department. The department may purchase supplies and materials for these purposes, with payment to be made out of the state trunk line fund to be charged on the basis of issues from inventory in accordance with the accounting and purchasing laws of this state.

(2) Notwithstanding any other provision of this act, the department shall annually expend at least 90% of state revenue appropriated annually to the state trunk line fund less the amounts described in subdivisions (a) to (i) for the preservation of highways, roads, streets, and bridges and for the payment of debt service on bonds, notes, or other obligations described in subsection (1)(a) issued after July 1, 1983, for the purpose of providing money for the preservation of highways, roads, streets, and bridges. Of the amounts appropriated for state trunk line projects, the department shall, where possible, secure pavement warranties for full replacement or appropriate repair for contracted construction work on pavement projects whose cost exceeds $1,000,000.00 and projects for new construction or reconstruction undertaken after the effective date of the 2014 amendatory act that amended this subsection. The department shall compile and make available to the public an annual report of all warranties that were secured under this subsection and all pavement projects whose costs exceed $1,000,000.00 where a warranty was not secured as provided in subsection (14). If an appropriate certificate is filed under section 18e but only to the extent necessary, this subsection does not prohibit the use of any amount of money restricted as to use by section 9 of article IX of the state constitution of 1963 and deposited in the state trunk line fund for the payment of debt service on bonds, notes, or other obligations pledging for the payment thereof money restricted as to use by section 9 of article IX of the state constitution of 1963 and deposited in the state trunk line fund, whenever issued, as specified under subsection (1)(a). The amounts that are deducted from the state trunk line fund for the purpose of the calculation required by this subsection are as follows:

(a) Amounts expended for the purposes described in subsection (1)(a) for the payment of debt service on bonds, notes, or other obligations issued before July 2, 1983.

(b) Amounts expended to provide the state matching requirement for projects on the national highway system and for the payment of debt service on bonds, notes, or other obligations issued after July 1, 1983, for the purpose of providing money for the state matching requirements for projects on the national highway system.

(c) Amounts expended for the construction of a highway, street, road, or bridge to 1 or more of the following or for the payment of debt service on bonds, notes, or other obligations issued after July 1, 1983, for the purpose of providing money for the construction of a highway, street, road, or bridge to 1 or more of the following:

(i) A location for which a building permit has been obtained for the construction of a manufacturing or industrial facility.

(ii) A location for which a building permit has been obtained for the renovation of, or addition to, a manufacturing or industrial facility.

(d) Amounts expended for capital outlay other than for highways, roads, streets, and bridges or to pay debt service on bonds, notes, or other obligations issued after July 1, 1983, for the purpose of providing money for capital outlay other than for highways, roads, streets, and bridges.

(e) Amounts expended for the operating expenses of the department other than the units of the department performing the functions assigned on January 1, 1983 to the bureau of highways.

(f) Amounts expended pursuant to contracts entered into before January 1, 1983.

(g) Amounts expended for the purposes described in subsection (5).

(h) Amounts appropriated for deposit in the transportation economic development fund and the rail grade crossing account pursuant to section 10(1)(a) and (h).

(i) Upon the affirmative recommendation of the director of the department and the approval by resolution of the state transportation commission, those amounts expended for projects vital to the economy of this state, a region, or local area or the safety of the public. The resolution shall state the cost of the project exempted from this subsection.

(3) Notwithstanding any other provision of this act, the department shall expend annually at least 90% of the federal revenue distributed to the credit of the state trunk line fund in that year, except for federal revenue expended for the purposes described in subsection (2)(b), (c), (f), and (i) and for the payment of notes issued under section 18b(9) on the preservation of highways, roads, streets, and bridges. The requirement of this subsection is waived if compliance would cause this state to be ineligible according to federal law for federal revenue, but only to the extent necessary to make this state eligible according to federal law for that revenue.

(4) Notwithstanding any other provision of this section, the department may loan money to a local road agency for paying capital costs of transportation purposes described in the second paragraph of section 9 of article IX of the state constitution of 1963 from the proceeds of bonds or notes issued pursuant to section 18b or from the state trunk line fund. Loans made directly from the state trunk line fund shall be made only after provision of money for the purposes specified in subsection (1)(a) to (f). Loans described in this subsection are not subject to the revised municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821.

(5) A local road agency may borrow money from the proceeds of bonds or notes issued under section 18b or the state trunk line fund for the purposes set forth in subsection (4) that shall be repayable, with interest, from 1 or more of the following:

(a) The money to be received by the local road agency from the Michigan transportation fund, except to the extent the money has been or may in the future be pledged by contract in accordance with 1941 PA 205, MCL 252.51 to 252.64, or has been or may in the future be pledged for the payment of the principal and interest upon notes issued under 1943 PA 143, MCL 141.251 to 141.254, or has been or may in the future be pledged for the payment of principal and interest upon bonds issued under section 18c or 18d, or has been or may in the future be pledged for the payment of the principal and interest upon bonds issued under 1952 PA 175, MCL 247.701 to 247.707.

(b) Any other legally available money of the local road agency, other than the general funds of the county.

(6) If required by the department, loans made under subsection (4) are payable by deduction by the state treasurer, upon direction of the department, from the periodic disbursements of any money returned by this state under this act to the local road agency, but only after sufficient money has been returned to the local road agency to provide for the payment of contractual obligations incurred or to be incurred and principal and interest on notes and bonds issued or to be issued under 1941 PA 205, MCL 252.51 to 252.64, 1943 PA 143, MCL 141.251 to 141.254, 1952 PA 175, MCL 247.701 to 247.707, or section 18c or 18d. The interest rates and payment schedules of any loans made from the proceeds of bonds or notes issued pursuant to section 18b shall be established by the department to conform as closely as practicable to the interest rate and repayment schedules on the bonds or notes issued to make the loans. However, the department may allow for the deferral of the first payment of interest or principal on the loans for a period of not to exceed 1 year after the respective first payment of interest or principal on the bonds or notes issued to make the loans.

(7) The amount borrowed by a local road agency under subsection (5) shall not be included in, or charged against, any constitutional, statutory, or charter debt limitation of the county, city, or village and shall not be included in the determination of the maximum annual principal and interest requirements of, or the limitations upon, the maximum annual principal and interest incurred under 1941 PA 205, MCL 252.51 to 252.64, 1943 PA 143, MCL 141.251 to 141.254, 1952 PA 175, MCL 247.701 to 247.707, or section 18c or 18d.

(8) The local road agency is not required to seek or obtain the approval of the electors, the municipal finance commission or its successor agency, or, except as provided in this subsection, the department of treasury to borrow money under subsection (5). The borrowing is not subject to the revised municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821, or to section 5(g) of the home rule city act, 1909 PA 279, MCL 117.5. The department shall give at least 10 days’ notice to the state treasurer of its intention to make a loan under subsection (4). If the state treasurer gives notice to the director of the department within 10 days of receiving the notice from the department, that, based upon the then existing financial or credit situation of the local road agency, it would not be in the best interests of this state to make a loan under subsection (4) to the local road agency, the loan shall not be made unless the state treasurer, after a hearing, if requested by the affected local road agency, subsequently gives notice to the director of the department that the loan may be made on the conditions that the state treasurer specifies.

(9) The state transportation commission may borrow money and issue bonds and notes under section 18b to make loans to a local road agency for the purposes described in the second paragraph of section 9 of article IX of the state constitution of 1963, as provided in subsection (4). A single issue of bonds or notes may be issued for the purposes specified in subsection (4) and for the other purposes specified in section 18b. The house and senate transportation appropriations subcommittees shall be notified by the department if there are extras and overruns sufficient to require approval of either the state administrative board or the commission, or both, on any contract between the department and a local road agency or a private business.

(10) The director of the department, after consultation with representatives of the interests of local road agencies, shall establish, by intergovernmental communication, procedures for the implementation and administration of the loan program established under subsections (4) to (9).

(11) Not more than 10% per year of all of the money received by and returned to the department from any source for the purposes of this section may be expended for administrative expenses. The department shall be subject to section 14(5) if more than 10% per year is expended for administrative expenses. As used in this subsection, “administrative expenses” means 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.

(12) Any performance audits of the department shall be conducted according to government auditing standards issued by the United States general accounting office.

(13) Contracts entered into to advance money to a local road agency under subsection (1)(g) are not subject to the revised municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821.

(14) The department shall prepare on an annual basis a report listing all warranties that were secured under subsection (2) and indicate whether any of those warranties were redeemed and all pavement projects whose costs exceed $1,000,000.00 for which a warranty was not secured as described in subsection (2). The department shall make the report required by this subsection available to the public upon request and shall also post the report on its website, which shall include, but is not limited to, all of the following information:

(a) The type of project.

(b) The cost or estimated cost of the project.

(c) The expected lifespan of the project.

(15) As used in this section:

(a) “Local road agency” means that term as defined in section 9a.

(b) “Rail grade crossing improvement purposes” means 1 or more of the following:

(i) The installation and modernization of active and passive warning devices at railroad grade crossings.

(ii) The installation or improvement of grade crossing surfaces.

(iii) Modification, relocation, or modernization of railroad grade crossing active and passive warning devices necessitated by roadway improvement projects.

(iv) Test installations of innovative warning devices or other innovative applications.

(v) Construction of new grade separations.

(vi) A cash incentive payment made pursuant to subsection (1)(c)(iv) for any public road or street crossing, in an amount no greater than the cost of installing flashing light signals and half roadway gates at the crossing.

(vii) Any other work that would be eligible for funding under the federal railroad-highway grade crossing improvement program or other comparable programs.

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 section 17, and the amount shall be returned to the county road commissions for snow removal purposes as provided in 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 section 12b. This sum shall be distributed pursuant to 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 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 of each county bears to the total mileage in all of the county primary road systems 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 the county local road system of each county bears to the total mileage in all of the county local road systems of the 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 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 section 18c.

(c) For the payment of principal and interest upon loans received pursuant to section 11(5), to the extent other funds have not been made available for that payment.

(9) Beginning November 1, 2008, 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 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 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 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. A county may expend surplus money for the development, construction, or repair of an off-street parking facility.

(11) Not more than 5% per year of the 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) 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 money is returned under this section, the function of the county road commission 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 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 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 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 money returned to the county road commission pursuant to 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 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 designated by the county executive who shall be responsible for and shall represent the charter county in transactions with the department pursuant to this act.

(20) Not more than 10% per year of all of the 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 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 money expended under this section 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.

(22) Of the amounts appropriated for a county primary or local road system under this section, where possible, a county road commission shall secure pavement warranties for full replacement or appropriate repair for contracted construction work on pavement projects whose cost exceeds $1,000,000.00 and projects for new construction or reconstruction undertaken after the effective date of the amendatory act that added this subsection, if allowed by the federal highway administration and the department. A county road commission shall submit a proposed warranty program to the department for approval no later than February 1, 2016. If a proposed warranty program submitted under this subsection is approved by the department, the county road commission shall implement the program no later than 1 year after the approval. A county road commission shall include a list of all warranties that were secured under this subsection and indicate whether any of those warranties were redeemed with the report required under section 14(3), and shall also list all pavement projects whose cost exceeds $1,000,000.00 for which a warranty was not secured. The list shall include, but is not limited to, all of the following information:

(a) The type of project.

(b) The cost or estimated cost of the project.

(c) The expected lifespan of the project.

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 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 state in computing the amounts to be returned under this section to each municipality in the state. Major street mileage, 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, 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 amount withheld shall be used to partially reimburse cities and villages located in counties that are eligible for snow removal funds pursuant to section 12a and that have costs for winter maintenance on major and local streets that are greater than the statewide average. The distributions shall be made annually during February and 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 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 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 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 section 11(5), to the extent other 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 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 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 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 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 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 state for local street system support. 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 this state under the state constitution of 1963 and statutes of this state, from 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 is 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 money may be transferred for preservation of the local street system. Major street 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 into 1 street fund and to submit a single report to the department on the expenditure of money on the local and major street systems.

(8) Not more than 10% per year of all of the 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 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 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 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 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 money expended under this section 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) Of the amounts appropriated for a city or village major or local street system under this section, where possible, a city or village shall secure pavement warranties for full replacement or appropriate repair for contracted construction work on pavement projects whose cost exceeds $1,000,000.00 and projects for new construction or reconstruction undertaken after the effective date of the amendatory act that added this subsection if allowed by the federal highway administration and the department. A city or village shall submit a proposed warranty program to the department for approval no later than February 1, 2016. If a proposed warranty program submitted under this subsection is approved by the department, the city or village shall implement the program no later than 1 year after the approval. A city or village shall include a list of all warranties that were secured under this subsection and indicate whether any of those warranties were redeemed with the report required under section 14(3), and shall also list all pavement projects whose cost exceeds $1,000,000.00 for which a warranty was not secured. The list shall include, but is not limited to, all of the following information:

(a) The type of project.

(b) The cost or estimated cost of the project.

(c) The expected lifespan of the project.

(14) With the approval of the director of the department, a city may use up to 20% of the amount received by that city under this section for public transit purposes if more than 10,000,000 passengers used public transit within that city during the previous fiscal year.

(15) 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.

(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 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 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 accounts shall be kept by cities, villages, and county road commissions of all money returned from the Michigan transportation fund. This subsection does not 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, and shall annually report to the department at the time, in the manner, and on forms prescribed by the department the mileage of each road system under their jurisdiction and the receipts and disbursements of road and street funds. 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. A county road commission, city, or village shall post the report required by this subsection on its website, if the county road commission, city, or village has a website.

(4) The county road commissions and the cities and villages are authorized to expend adequate amounts from funds returned by this act to cover the cost of administration, engineering, and record keeping, and expenditures for those purposes shall be reported separately by each county road commission, city, and village to the department.

(5) All distributions and returns of funds provided for in this act shall be withheld from the 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 section 12 represents the total responsibility of this state for local county road support. Additional funds required for the support of county local road systems may be supplied from other money returned to the township governments by this state under the state constitution of 1963 and statutes of this state, or from funds 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 this state.

Enacting section 1. This amendatory act does not take effect unless House Joint Resolution UU of the 97th Legislature becomes a part of the state constitution of 1963 as provided in section 1 of article XII of the state constitution of 1963.

This act is ordered to take immediate effect.


Public Act 474 of 2014

ENROLLED HOUSE BILL No. 5492

AN ACT to amend 1937 PA 94, entitled “An act to provide for the levy, assessment, and collection of a specific excise tax on the storage, use, or consumption in this state of tangible personal property and certain services; to appropriate the proceeds of that tax; to prescribe penalties; and to make appropriations,” by amending sections 3 and 21 (MCL 205.93 and 205.111), as amended by 2014 PA 80.

The People of the State of Michigan enact:

Sec. 3. (1) There is levied upon and there shall be collected from every person in this state a specific tax, including both the local community stabilization share and the state share, for the privilege of using, storing, or consuming tangible personal property in this state at a total combined rate equal to 7% of the price of the property or services specified in section 3a or 3b. The tax levied under this act applies to a person who acquires tangible personal property or services that are subject to the tax levied under this act for any tax-exempt use who subsequently converts the tangible personal property or service to a taxable use, including an interim taxable use. If tangible personal property or services are converted to a taxable use, the tax levied under this act shall be imposed without regard to any subsequent tax-exempt use. Penalties and interest shall be added to the tax if applicable as provided in this act. For the purpose of the proper administration of this act and to prevent the evasion of the tax, all of the following shall be presumed:

(a) That tangible personal property purchased is subject to the tax if brought into this state within 90 days of the purchase date and is considered as acquired for storage, use, or other consumption in this state.

(b) That tangible personal property used solely for personal, nonbusiness purposes that is purchased outside of this state and that is not an aircraft is exempt from the tax levied under this act if 1 or more of the following conditions are satisfied:

(i) The property is purchased by a person who is not a resident of this state at the time of purchase and is brought into this state more than 90 days after the date of purchase.

(ii) The property is purchased by a person who is a resident of this state at the time of purchase and is brought into this state more than 360 days after the date of purchase.

(2) The tax imposed by this section for the privilege of using, storing, or consuming a vehicle, ORV, manufactured housing, aircraft, snowmobile, or watercraft shall be collected before the transfer of the vehicle, ORV, manufactured housing, aircraft, snowmobile, or watercraft, except a transfer to a licensed dealer or retailer for purposes of resale that arises by reason of a transaction made by a person who does not transfer vehicles, ORVs, manufactured housing, aircraft, snowmobiles, or watercraft in the ordinary course of his or her business done in this state. The tax on a vehicle, ORV, snowmobile, and watercraft shall be collected by the secretary of state before the transfer of the vehicle, ORV, snowmobile, or watercraft registration. The tax on manufactured housing shall be collected by the department of licensing and regulatory affairs, mobile home commission, or its agent before the transfer of the certificate of title. The tax on an aircraft shall be collected by the department of treasury. The price tax base of a new or previously owned car or truck held for resale by a dealer and that is not exempt under section 4(1)(c) is the purchase price of the car or truck multiplied by 2.5% plus $30.00 per month beginning with the month that the dealer uses the car or truck in a nonexempt manner.

(3) The following transfers or purchases are not subject to use tax:

(a) A transaction or a portion of a transaction if the transferee or purchaser is the spouse, mother, father, brother, sister, child, stepparent, stepchild, stepbrother, stepsister, grandparent, grandchild, legal ward, or a legally appointed guardian with a certified letter of guardianship, of the transferor.

(b) A transaction or a portion of a transaction if the transfer is a gift to a beneficiary in the administration of an estate.

(c) If a vehicle, ORV, manufactured housing, aircraft, snowmobile, or watercraft that has once been subjected to the Michigan sales or use tax is transferred in connection with the organization, reorganization, dissolution, or partial liquidation of an incorporated or unincorporated business and the beneficial ownership is not changed.

(d) If an insurance company licensed to conduct business in this state acquires ownership of a late model distressed vehicle as defined in section 12a of the Michigan vehicle code, 1949 PA 300, MCL 257.12a, through payment of damages in response to a claim or when the person who owned the vehicle before the insurance company reacquires ownership from the company as part of the settlement of a claim.

(e) Beginning October 1, 2015, the transfer or purchase of gasoline or diesel fuel used to operate a motor vehicle on the public roads or highways of this state.

(4) The department may utilize the services, information, or records of any other department or agency of state government or of the authority in the performance of its duties under this act, and other departments or agencies of state government and the authority are required to furnish those services, information, or records upon the request of the department.

(5) Beginning on October 1, 2015, the specific tax levied under subsection (1) includes both a state share tax levied by this state and a local community stabilization share tax authorized by the amendatory act that added section 2c and levied by the authority, which replaces the reduced state share at the following rates in each of the following state fiscal years:

(a) For fiscal year 2015-2016, the local community stabilization share tax rate to be levied by the authority is that rate calculated by the department of treasury on behalf of the authority sufficient to generate $96,100,000.00 in revenue and the state share tax rate is that rate determined by subtracting the local community stabilization share tax rate from 7%.

(b) For fiscal year 2016-2017, the local community stabilization share tax rate to be levied by the authority is that rate calculated by the department of treasury on behalf of the authority sufficient to generate $380,600,000.00 in revenue and the state share tax rate is that rate determined by subtracting the local community stabilization share tax rate from 7%.

(c) For fiscal year 2017-2018, the local community stabilization share tax rate to be levied by the authority is that rate calculated by the department of treasury on behalf of the authority sufficient to generate $410,500,000.00 in revenue and the state share tax rate is that rate determined by subtracting the local community stabilization share tax rate from 7%.

(d) For fiscal year 2018-2019, the local community stabilization share tax rate to be levied by the authority is that rate calculated by the department of treasury on behalf of the authority sufficient to generate $437,700,000.00 in revenue and the state share tax rate is that rate determined by subtracting the local community stabilization share tax rate from 7%.

(e) For fiscal year 2019-2020, the local community stabilization share tax rate to be levied by the authority is that rate calculated by the department of treasury on behalf of the authority sufficient to generate $465,900,000.00 in revenue and the state share tax rate is that rate determined by subtracting the local community stabilization share tax rate from 7%.

(f) For fiscal year 2020-2021, the local community stabilization share tax rate to be levied by the authority is that rate calculated by the department of treasury on behalf of the authority sufficient to generate $491,500,000.00 in revenue and the state share tax rate is that rate determined by subtracting the local community stabilization share tax rate from 7%.

(g) For fiscal year 2021-2022, the local community stabilization share tax rate to be levied by the authority is that rate calculated by the department of treasury on behalf of the authority sufficient to generate $521,300,000.00 in revenue and the state share tax rate is that rate determined by subtracting the local community stabilization share tax rate from 7%.

(h) For fiscal year 2022-2023, the local community stabilization share tax rate to be levied by the authority is that rate calculated by the department of treasury on behalf of the authority sufficient to generate $548,000,000.00 in revenue and the state share tax rate is that rate determined by subtracting the local community stabilization share tax rate from 7%.

(i) For fiscal year 2023-2024, the local community stabilization share tax rate to be levied by the authority is that rate calculated by the department of treasury on behalf of the authority sufficient to generate $561,700,000.00 in revenue and the state share tax rate is that rate determined by subtracting the local community stabilization share tax rate from 7%.

(j) For fiscal year 2024-2025, the local community stabilization share tax rate to be levied by the authority is that rate calculated by the department of treasury on behalf of the authority sufficient to generate $569,800,000.00 in revenue and the state share tax rate is that rate determined by subtracting the local community stabilization share tax rate from 7%.

(k) For fiscal year 2025-2026, the local community stabilization share tax rate to be levied by the authority is that rate calculated by the department of treasury on behalf of the authority sufficient to generate $571,400,000.00 in revenue and the state share tax rate is that rate determined by subtracting the local community stabilization share tax rate from 7%.

(l) For fiscal year 2026-2027, the local community stabilization share tax rate to be levied by the authority is that rate calculated by the department of treasury on behalf of the authority sufficient to generate $572,200,000.00 in revenue and the state share tax rate is that rate determined by subtracting the local community stabilization share tax rate from 7%.

(m) For fiscal year 2027-2028, the local community stabilization share tax rate to be levied by the authority is that rate calculated by the department of treasury on behalf of the authority sufficient to generate $572,600,000.00 in revenue and the state share tax rate is that rate determined by subtracting the local community stabilization share tax rate from 7%.

(n) For fiscal year 2028-2029 and each fiscal year thereafter, the local community stabilization share tax rate to be levied by the authority is that rate calculated by the department of treasury on behalf of the authority sufficient to generate the amount distributed under this section in the immediately preceding year adjusted by the personal property growth factor and the state share tax rate is that rate determined by subtracting the local community stabilization share tax rate from 7%.

(6) The state share includes the portion of the use tax imposed at the additional rate of 2% approved by the electors of this state on March 15, 1994 and dedicated for aid to schools under section 21(2). The local community stabilization share does not include the portion of the use tax imposed at the additional rate of 2% approved by the electors of this state on March 15, 1994.

(7) The total combined rate of the tax levied by this state and the authority under this act, including both the state share, as reduced by the amendatory act that added this subsection, and the local community stabilization share, shall not exceed the constitutional limit of 7% under section 8 of article IX of the state constitution of 1963. The authority shall not increase any tax or tax rate, but is authorized to and shall levy the local community stabilization share at the rate provided in subsection (5).

Sec. 21. (1) Except as provided in subsections (2), (3), (4), and (5), all money received and collected under this act shall be deposited by the department of treasury in the state treasury to the credit of the general fund, to be disbursed only by appropriations by the legislature.

(2) The collections from the use tax imposed at the additional rate of 2% approved by the electors March 15, 1994 shall be deposited in the state school aid fund established in section 11 of article IX of the state constitution of 1963.

(3) From the money received and collected under this act for the state share, an amount equal to all revenue lost under the state education tax act, 1993 PA 331, MCL 211.901 to 211.906, and all revenue lost from basic school operating mills as a result of the exemption of personal property under sections 9m, 9n, and 9o of the general property tax act, 1893 PA 206, MCL 211.9m, 211.9n, and 211.9o, as determined by the department, shall be deposited into the state school aid fund established by section 11 of article IX of the state constitution of 1963. Funds deposited into the state school aid fund under this subsection shall not include the portion of the state share of the use tax imposed at the additional rate of 2% approved by the electors of this state on March 15, 1994 and dedicated for aid to schools under subsection (2).

(4) Beginning October 1, 2015, from the amount collected under this act, not including the amount collected from the additional rate of 2% approved by the electors March 15, 1994, an amount equal to 12.3% shall be deposited in the state school aid fund established in section 11 of article IX of the state constitution of 1963, as provided in section 11 of article IX of the state constitution of 1963, from the state share, after the distributions under subsections (2) and (3).

(5) Money received and collected under this act for the local community stabilization share is not state funds, shall not be credited to the state treasury, and shall be transmitted to the authority for deposit in the treasury of the authority, to be disbursed by the authority only as authorized under the local community stabilization authority act. The local community stabilization share is a local tax, not a state tax, and money received and collected for the local community stabilization share is money of the authority and not money of this state.

Enacting section 1. This amendatory act does not take effect unless House Joint Resolution UU of the 97th Legislature becomes a part of the state constitution of 1963 as provided in section 1 of article XII of the state constitution of 1963.

Enacting section 2. This amendatory act does not take effect unless all of the following bills of the 97th Legislature are enacted into law [they were]:

(a) House Bill No. 4539.

(b) House Bill No. 5477.

Enacting section 3. This amendatory act takes effect October 1, 2015.

This act is ordered to take immediate effect.


Public Act 475 of 2014

ENROLLED HOUSE BILL No. 5493

AN ACT to amend 1980 PA 119, entitled “An act to prescribe a privilege tax for the use of public roads and highways of this state by motor carriers by imposing a specific tax upon the use of motor fuel within this state; to provide for certain credits against this tax and certain mechanisms for paying, collecting, and enforcing this tax; to provide for the licensing of motor carriers and for exemptions from licensure; to require the keeping and providing for the examination of certain reports; to provide review procedures for the assessment of the tax and revocation of a license; to impose certain duties upon and confer certain powers to certain state departments and agencies; to prescribe certain penalties for the violation of this act; and to make appropriations,” by amending sections 1, 2, 2a, 4, 5, 6a, 8, 9, and 10 (MCL 207.211, 207.212, 207.212a, 207.214, 207.215, 207.216a, 207.218, 207.219, and 207.220), section 1 as amended by 2002 PA 667, sections 2 and 4 as amended by 2006 PA 346, section 2a as added by 1994 PA 353, section 5 as amended and section 6a as added by 1996 PA 584, and section 8 as amended by 2006 PA 449.

The People of the State of Michigan enact:

Sec. 1. As used in this act:

(a) “Alternative fuel” means that term as defined in section 151 of the motor fuel tax act, 2000 PA 403, MCL 207.1151.

(b) “Alternative fuel dealer” means that term as defined in section 151 of the motor fuel tax act, 2000 PA 403, MCL 207.1151.

(c) “Axle” means any 2 or more load-carrying wheels mounted in a single transverse vertical plane.

(d) “Commissioner” means the state commissioner of revenue.

(e) “Diesel gallon equivalent” means that term as defined in section 151 of the motor fuel tax act, 2000 PA 403, MCL 207.1151.

(f) “Department” means the revenue division of the department of treasury.

(g) “Motor carrier” means:

(i) A person who operates or causes to be operated a qualified commercial motor vehicle on a public road or highway in this state and at least 1 other state or Canadian province.

(ii) A person who operates or causes to be operated a qualified commercial motor vehicle on a public road or highway in this state and who is licensed under the international fuel tax agreement.

(h) “Motor fuel” means diesel fuel as defined in section 2 of the motor fuel tax act, 2000 PA 403, MCL 207.1002. Beginning on October 1, 2015, motor fuel includes gasoline as that term is defined in section 3 of the motor fuel tax act, 2000 PA 403, MCL 207.1003.

(i) “Nonprofit private, parochial, denominational, or public school, college, or university” means an elementary, secondary, or postsecondary educational facility.

(j) “Person” means a natural person, partnership, firm, association, joint stock company, limited liability company, limited liability partnership, syndicate, or corporation, and any receiver, trustee, conservator, or officer, other than a unit of government, having jurisdiction and control of property by virtue of law or by appointment of a court.

(k) “Public roads or highways” means a road, street, or place maintained by this state or a political subdivision of this state and generally open to use by the public as a matter of right for the purpose of vehicular travel, notwithstanding that they may be temporarily closed or travel restricted for the purpose of construction, maintenance, repair, or reconstruction.

(l) “Qualified commercial motor vehicle”, subject to subdivision (m), means a motor vehicle used, designed, or maintained for transportation of persons or property and 1 of the following:

(i) Having 3 or more axles regardless of weight.

(ii) Having 2 axles and a gross vehicle weight or registered gross vehicle weight exceeding 26,000 pounds or 12,000 kilograms.

(iii) Is used in a combination of vehicles, if the weight of that combination exceeds 26,000 pounds or 12,000 kilograms gross vehicle or registered gross vehicle weight.

(m) “Qualified commercial motor vehicle” does not include a recreational vehicle, a road tractor, truck, or truck tractor used exclusively in this state, a road tractor, truck, or truck tractor owned by a farmer and used in connection with the farmer’s farming operation and not used for hire, a school bus, a bus defined and certificated under the motor bus transportation act, 1982 PA 432, MCL 474.101 to 474.141, or a bus operated by a public transit agency operating under any of the following:

(i) A county, city, township, or village as provided by law, or other authority incorporated under 1963 PA 55, MCL 124.351 to 124.359. Each authority and governmental agency incorporated under 1963 PA 55, MCL 124.351 to 124.359, has the exclusive jurisdiction to determine its own contemplated routes, hours of service, estimated transit vehicle miles, costs of public transportation services, and projected capital improvements or projects within its service area.

(ii) An authority incorporated under the metropolitan transportation authorities act of 1967, 1967 PA 204, MCL 124.401 to 124.426, or that operates a transportation service pursuant to an interlocal agreement under the urban cooperation act of 1967, 1967 (Ex Sess) PA 7, MCL 124.501 to 124.512.

(iii) A contract entered into under 1967 (Ex Sess) PA 8, MCL 124.531 to 124.536, or 1951 PA 35, MCL 124.1 to 124.13.

(iv) An authority incorporated under the public transportation authority act, 1986 PA 196, MCL 124.451 to 124.479, or a nonprofit corporation organized under the nonprofit corporation act, 1982 PA 162, MCL 450.2101 to 450.3192, that provides transportation services.

(v) An authority financing public improvements to transportation systems under the revenue bond act of 1933, 1933 PA 94, MCL 141.101 to 141.140.

(n) Qualified commercial motor vehicle includes a vehicle operated on a public road or highway owned by a farmer and used in connection with the farmer’s farming operation if the vehicle bears out of state registration plates of a state that does not give similar treatment to vehicles from this state.

Sec. 2. (1) A motor carrier licensed under this act shall pay a road tax calculated on the amount of motor fuel and alternative fuel consumed in qualified commercial motor vehicles on the public roads or highways within this state. Except as otherwise provided under subsection (6), the tax shall be at the rate prescribed under section 8(1)(b) of the motor fuel tax act, 2000 PA 403, MCL 207.1008, for motor fuel consumed on the public roads or highways within this state. In addition, qualified commercial motor vehicles licensed under this act that travel in interstate commerce are subject to the definition of taxable motor fuels and alternative fuels and rates as defined by the respective international fuel tax agreement member jurisdictions. A motor carrier licensed under this act shall file a return and pay the tax due quarterly to the department on or before the last day of January, April, July, and October of each year on a form prescribed and furnished by the department. Each quarterly return and tax payment shall cover the liability for the annual quarter ending on the last day of the preceding month.

(2) The amount of motor fuel or alternative fuel consumed in the operation of a motor carrier on public roads or highways within this state shall be determined by dividing the miles traveled within this state by the average miles per gallon of motor fuel or applicable gallon equivalent of alternative fuel. The average miles per gallon of motor fuel or per gallon equivalent of alternative fuel, as applicable, shall be determined by dividing the miles traveled within and outside of this state by the total amount of motor fuel or alternative fuel consumed within and outside of this state.

(3) In the absence of records showing the average number of miles operated per gallon of motor fuel or per gallon equivalent of alternative fuel, as applicable, it is presumed that 1 gallon of motor fuel or applicable gallon equivalent of alternative fuel is consumed for every 4 miles traveled.

(4) The quarterly tax return shall be accompanied by a remittance covering any tax due.

(5) The commissioner, when he or she considers it necessary to ensure payment of the tax or to provide a more efficient administration of the tax, may require the filing of returns and payment of the tax for other than quarterly periods.

(6) Beginning October 1, 2015 and annually thereafter, the per gallon or per diesel gallon equivalent rate of tax under this act for motor fuel or alternative fuel consumed on the public roads or highways of this state is 1 of the following:

(a) For motor fuel, the applicable rate prescribed under section 8(1) of the motor fuel tax act, 2000 PA 403, MCL 207.1008, for the same period.

(b) For alternative fuel, the rate prescribed under section 152 of the motor fuel tax act, 2000 PA 403, MCL 207.1152, for the same period.

Sec. 2a. (1) The department, on behalf of this state, may enter into a reciprocal agreement providing for the imposition of a motor fuel or alternative fuel tax on an apportionment or allocation basis with the proper authority of a state, a commonwealth, the District of Columbia, a state or province of a foreign country, or a territory or possession either of the United States or of a foreign country. Under this subsection, the department shall enter into the international fuel tax agreement.

(2) The department may promulgate rules to implement and enforce the provisions of the international fuel tax agreement. Rules promulgated under this subsection shall be promulgated under the administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

(3) As required by the intermodal surface transportation efficiency act of 1991, Public Law 102-240, 105 Stat. 1914, if the department entered into the international fuel tax agreement, and if the provisions set forth in that agreement are different from this act, then the provisions of the agreement shall control.

(4) This section constitutes complete authority for the imposition of motor fuel or alternative fuel taxes upon an apportionment or allocation basis.

Sec. 4. (1) A person filing a return under section 2 who purchased motor fuel or alternative fuel in this state upon which a tax was imposed and not refunded under the motor fuel tax act, 2000 PA 403, MCL 207.1001 to 207.1170, is entitled to a credit against the tax imposed by this act equal to the tax paid when purchasing the motor fuel or alternative fuel under the motor fuel tax act, 2000 PA 403, MCL 207.1001 to 207.1170. The excess of a credit allowed by this subsection over tax liabilities imposed by this act shall be refunded to the taxpayer.

(2) In order to secure credit under subsection (1) for motor fuel or alternative fuel purchased in this state, the motor carrier shall secure a receipt showing the seller’s name, the number of gallons of motor fuel or applicable gallon equivalents of alternative fuel, the type of motor fuel or alternative fuel, the tax rate charged, the address of the seller, the license number or unit number of the commercial motor vehicle, and the date of sale.

(3) A refund, when approved by the department, shall be payable from the revenue received under this act.

(4) A person, or an agent, employee, or representative of the person, who makes a false statement in any return under this act or who submits or provides an invoice or invoices in support of the false statement upon which alterations or changes exist in the date, name of seller or purchaser, number of gallons or gallon equivalents, identity of the qualified commercial motor vehicle into which fuel was delivered or the amount of tax that was paid, or who knowingly presents any return or invoice containing a false statement, or who collects or causes to be paid a refund without being entitled to the refund, forfeits the full amount of the claim and is guilty of a misdemeanor, punishable by a fine of not more than $5,000.00 or imprisonment for not more than 1 year, or both.

Sec. 5. (1) A person required to be licensed by this act shall not act as a motor carrier in this state unless the person is the holder of an unrevoked license issued by the department or is the holder of an unrevoked license issued under the international fuel tax agreement by this state or another member jurisdiction of the international fuel tax agreement. To procure a license, a motor carrier shall file with the department a verified application upon a form prescribed and to be furnished by the department. The application shall contain the name and address of the motor carrier and, if a partnership, limited liability company, or corporation, the names and addresses of the persons constituting the firm, partnership, association, joint stock company, limited liability company, syndicate, or corporation, the name of its resident agent, the location of its predominant place of business, both within and outside of this state, and other pertinent information the department may require.

(2) The department shall issue to each motor carrier 1 license per person and 2 decals for each qualified commercial motor vehicle. A decal shall be affixed respectively to the right-hand side and left-hand side of the cab of every qualified commercial motor vehicle while it is being operated in this state by each person licensed under this act. A copy of the license shall be carried in each cab while it is being operated.

(3) For cause, a motor carrier may be required to file with the department a surety bond payable to this state, upon which the applicant is the obligor, in the sum of 3 times the highest estimated quarterly tax, or $1,000.00, whichever is greater. This surety bond shall be conditioned upon the applicant complying with this act and with the rules promulgated under this act, promptly filing true reports, and paying the taxes, interest, and penalties required by this act. Each surety bond shall be approved as to amount and sureties by the department. The department may accept cash or securities instead of a surety bond.

(4) The commissioner may waive the bond requirement for a motor carrier exempt from the reporting requirements of section 2 when the collection of taxes would not be impaired by lack of security of a bond required by this section.

(5) The license and decals are not assignable or transferable to another person and are valid only for the person in whose name they are issued. However, upon application to the department, a motor carrier, upon the sale, conveyance, disposal, or replacement of a qualified commercial motor vehicle, may transfer the license and decals for that qualified commercial motor vehicle to another qualified commercial motor vehicle of the motor carrier that is required to be licensed under this act. The department shall issue replacement decals for the newly licensed qualified commercial motor vehicle that authorizes the holder of the qualified commercial motor vehicle license to use and consume motor fuel or alternative fuel in the qualified commercial motor vehicle upon the public roads or highways of this state until the original license would have expired. The department may require the payment of a fee to cover the administrative costs of issuing a replacement license or decals.

(6) Upon filing of the application and upon posting of any bond as required, the department shall issue to the applicant a license and decals that authorize the holder to operate qualified commercial motor vehicles using and consuming motor fuels or alternative fuels upon the public roads or highways of this state until January 1 of the year following the date of issuance.

(7) If a licensee ceases to engage in business within this state, the licensee shall notify the department in writing within 15 days after discontinuance.

Sec. 6a. (1) Except as provided in subsection (3), the tax imposed by this act shall be administered under 1941 PA 122, MCL 205.1 to 205.31. In case of conflict between 1941 PA 122, MCL 205.1 to 205.31, and this act, this act shall prevail.

(2) Tax due to other member jurisdictions of the international fuel tax agreement that is incurred by a person while operating on a current, suspended, or revoked license issued by the department under the international fuel tax agreement is considered tax imposed by this act and a tax debt due to this state.

(3) A refund claim involving the payment of a tax that was paid under this act or in connection with a return filed under this act may not be filed more than 18 months after the date the motor fuel or alternative fuel was purchased.

Sec. 8. (1) Every qualified commercial motor vehicle leased to a motor carrier is subject to this act to the same extent and in the same manner as a qualified commercial motor vehicle owned by a motor carrier.

(2) A lessor of qualified commercial motor vehicles may be considered a motor carrier with respect to qualified commercial motor vehicles leased to others, if the lessor supplies or pays for the motor fuel or alternative fuel consumed by the vehicles or bills rental or other charges calculated to include the cost of motor fuel or alternative fuel. A lessee motor carrier may exclude a qualified commercial motor vehicle leased from others from the reports and liabilities required by this act if that qualified commercial motor vehicle has been leased from a lessor who is a motor carrier under this act and the lease agreement provides for the lessor to pay the cost of motor fuel or alternative fuel and motor fuel or alternative fuel taxes.

(3) Upon application by a licensed motor carrier, the department may authorize a licensed motor carrier leasing qualified commercial motor vehicles from 2 or more lessors to file consolidated reports for these lessors.

(4) This section governs the primary liability under this act of lessors and lessees of qualified commercial motor vehicles. For tax liabilities incurred before April 1, 2005, if a lessor or lessee primarily liable fails, in whole or in part, to discharge his or her liability, the failing party and the other lessor or lessee party to the transaction are jointly and severally responsible and liable for compliance with this act and for the payment of tax due. However, the aggregate of taxes collected from a lessor and lessee by this state under this act shall not exceed the total amount of taxes due and costs and penalties imposed.

(5) For tax liabilities arising after April 1, 2005, if a lease agreement identifies a party responsible for the payment of taxes, the nonresponsible party under the lease shall obtain a copy of the responsible party’s valid international fuel tax agreement registration and keep the copy on file. If the nonresponsible party does not obtain a copy of the responsible party’s valid international fuel tax agreement registration and the responsible party fails in whole or in part to discharge his or her liability, then the responsible and nonresponsible parties are jointly and severally responsible and liable for compliance with this act and payment of tax due. If the lease agreement does not identify the party responsible for payment of fuel taxes under this act, then both parties are jointly and severally responsible and liable for compliance with this act and payment of tax due. However, the aggregate of taxes collected from a lessor and lessee by this state under this act shall not exceed the total amount of taxes due and costs and penalties imposed. If the nonresponsible party under the lease maintains a copy of the responsible party’s valid international fuel tax agreement registration on file, the nonresponsible party has no responsibility or liability for compliance with this act or payment of any taxes, costs, or penalties due under this act relating to the motor fuel or alternative fuel consumed under the lease.

Sec. 9. The department may examine the books, invoices, receipts, records, and papers of a motor carrier, fuel supplier, or alternative fuel dealer that pertain to the motor fuel or alternative fuel received, used, purchased, shipped, or delivered to verify the truth and accuracy of any statement, report, or return.

Sec. 10. Each motor carrier shall maintain and keep, for a period of at least 4 years, suitable books, records, and accounts of all motor fuel and alternative fuel purchased, sold, dispensed, or used, together with all invoices, delivery tickets, bills of lading, and other pertinent records and papers as required by the department for the administration of this act.

Enacting section 1. This amendatory act takes effect October 1, 2015.

Enacting section 2. This amendatory act does not take effect unless House Joint Resolution UU of the 97th Legislature becomes a part of the state constitution of 1963 as provided in section 1 of article XII of the state constitution of 1963.

This act is ordered to take immediate effect.


Public Act 476 of 2014

ENROLLED SENATE BILL No. 80

AN ACT to amend 1979 PA 94, entitled “An act to make appropriations to aid in the support of the public schools, the intermediate school districts, community colleges, and public universities of the state; to make appropriations for certain other purposes relating to education; to provide for the disbursement of the appropriations; to authorize the issuance of certain bonds and provide for the security of those bonds; to prescribe the powers and duties of certain state departments, the state board of education, and certain other boards and officials; to create certain funds and provide for their expenditure; to prescribe penalties; and to repeal acts and parts of acts,” by amending section 18 and 31a (MCL 388.1618 and MCL 388.1631a), as amended by 2014 PA 196.

The People of the State of Michigan enact:

Sec. 18. (1) Except as provided in another section of this article, each district or other entity shall apply the money received by the district or entity under this article to salaries and other compensation of teachers and other employees, tuition, transportation, lighting, heating, ventilation, water service, the purchase of textbooks, other supplies, and any other school operating expenditures defined in section 7. However, not more than 20% of the total amount received by a district under sections 22a and 22b or received by an intermediate district under section 81 may be transferred by the board to either the capital projects fund or to the debt retirement fund for debt service. The money shall not be applied or taken for a purpose other than as provided in this section. The department shall determine the reasonableness of expenditures and may withhold from a recipient of funds under this article the apportionment otherwise due upon a violation by the recipient.

(2) Within 15 days after a board adopts its annual operating budget for the following school fiscal year, or after a board adopts a subsequent revision to that budget, the district shall make all of the following available through a link on its website home page, or may make the information available through a link on its intermediate district’s website home page, in a form and manner prescribed by the department:

(a) The annual operating budget and subsequent budget revisions.

(b) Using data that have already been collected and submitted to the department, a summary of district expenditures for the most recent fiscal year for which they are available, expressed in the following 2 pie charts:

(i) A chart of personnel expenditures, broken into the following subcategories:

(A) Salaries and wages.

(B) Employee benefit costs, including, but not limited to, medical, dental, vision, life, disability, and long-term care benefits.

(C) Retirement benefit costs.

(D) All other personnel costs.

(ii) A chart of all district expenditures, broken into the following subcategories:

(A) Instruction.

(B) Support services.

(C) Business and administration.

(D) Operations and maintenance.

(c) Links to all of the following:

(i) The current collective bargaining agreement for each bargaining unit.

(ii) Each health care benefits plan, including, but not limited to, medical, dental, vision, disability, long-term care, or any other type of benefits that would constitute health care services, offered to any bargaining unit or employee in the district.

(iii) The audit report of the audit conducted under subsection (4) for the most recent fiscal year for which it is available.

(iv) The bids required under section 5 of the public employee health benefits act, 2007 PA 106, MCL 124.75.

(v) The district’s written policy governing procurement of supplies, materials, and equipment.

(vi) The district’s written policy establishing specific categories of reimbursable expenses, as described in section 1254(2) of the revised school code, MCL 380.1254.

(vii) Either the district’s accounts payable check register for the most recent school fiscal year or a statement of the total amount of expenses incurred by board members or employees of the district that were reimbursed by the district for the most recent school fiscal year.

(d) The total salary and a description and cost of each fringe benefit included in the compensation package for the superintendent of the district and for each employee of the district whose salary exceeds $100,000.00.

(e) The annual amount spent on dues paid to associations.

(f) The annual amount spent on lobbying or lobbying services. As used in this subdivision, “lobbying” means that term as defined in section 5 of 1978 PA 472, MCL 4.415.

(g) Any deficit elimination plan or enhanced deficit elimination plan the district was required to submit under this article.

(h) Identification of all credit cards maintained by the district as district credit cards, the identity of all individuals authorized to use each of those credit cards, the credit limit on each credit card, and the dollar limit, if any, for each individual’s authorized use of the credit card.

(i) Costs incurred for each instance of out-of-state travel by the school administrator of the district that is fully or partially paid for by the district and the details of each of those instances of out-of-state travel, including at least identification of each individual on the trip, destination, and purpose.

(3) For the information required under subsection (2)(a), (2)(b)(i), and (2)(c), an intermediate district shall provide the same information in the same manner as required for a district under subsection (2).

(4) For the purposes of determining the reasonableness of expenditures, whether a district or intermediate district has received the proper amount of funds under this article, and whether a violation of this article has occurred, all of the following apply:

(a) The department shall require that each district and intermediate district have an audit of the district’s or intermediate district’s financial and pupil accounting records conducted at least annually, and at such other times as determined by the department, at the expense of the district or intermediate district, as applicable. The audits must be performed by a certified public accountant or by the intermediate district superintendent, as may be required by the department, or in the case of a district of the first class by a certified public accountant, the intermediate superintendent, or the auditor general of the city. A district or intermediate district shall retain these records for the current fiscal year and from at least the 3 immediately preceding fiscal years.

(b) If a district operates in a single building with fewer than 700 full-time equated pupils, if the district has stable membership, and if the error rate of the immediately preceding 2 pupil accounting field audits of the district is less than 2%, the district may have a pupil accounting field audit conducted biennially but must continue to have desk audits for each pupil count. The auditor must document compliance with the audit cycle in the pupil auditing manual. As used in this subdivision, “stable membership” means that the district’s membership for the current fiscal year varies from the district’s membership for the immediately preceding fiscal year by less than 5%.

(c) A district’s or intermediate district’s annual financial audit shall include an analysis of the financial and pupil accounting data used as the basis for distribution of state school aid.

(d) The pupil and financial accounting records and reports, audits, and management letters are subject to requirements established in the auditing and accounting manuals approved and published by the department.

(e) All of the following shall be done not later than November 15, 2014 for reporting 2013-2014 data during 2014-2015, and not later than October 15 for reporting the prior fiscal year data for all subsequent fiscal years:

(i) A district shall file the annual financial audit reports with the intermediate district and the department.

(ii) The intermediate district shall file the annual financial audit reports for the intermediate district with the department.

(iii) The intermediate district shall enter the pupil membership audit reports for its constituent districts and for the intermediate district, for the pupil membership count day and supplemental count day, in the Michigan student data system.

(f) The annual financial audit reports and pupil accounting procedures reports shall be available to the public in compliance with the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.

(g) Not later than January 31 of each year, the department shall notify the state budget director and the legislative appropriations subcommittees responsible for review of the school aid budget of districts and intermediate districts that have not filed an annual financial audit and pupil accounting procedures report required under this section for the school year ending in the immediately preceding fiscal year.

(5) By November 15, 2014 for 2014-2015 and by October 15 for all subsequent fiscal years, each district and intermediate district shall submit to the center, in a manner prescribed by the center, annual comprehensive financial data consistent with accounting manuals and charts of accounts approved and published by the department. For an intermediate district, the report shall also contain the website address where the department can access the report required under section 620 of the revised school code, MCL 380.620. The department shall ensure that the prescribed Michigan public school accounting manual chart of accounts includes standard conventions to distinguish expenditures by allowable fund function and object. The functions shall include at minimum categories for instruction, pupil support, instructional staff support, general administration, school administration, business administration, transportation, facilities operation and maintenance, facilities acquisition, and debt service; and shall include object classifications of salary, benefits, including categories for active employee health expenditures, purchased services, supplies, capital outlay, and other. Districts shall report the required level of detail consistent with the manual as part of the comprehensive annual financial report.

(6) By September 30 of each year, each district and intermediate district shall file with the department the special education actual cost report, known as “SE-4096”, on a form and in the manner prescribed by the department.

(7) By October 7 of each year, each district and intermediate district shall file with the center the transportation expenditure report, known as “SE-4094”, on a form and in the manner prescribed by the center.

(8) The department shall review its pupil accounting and pupil auditing manuals at least annually and shall periodically update those manuals to reflect changes in this article.

(9) If a district that is a public school academy purchases property using money received under this article, the public school academy shall retain ownership of the property unless the public school academy sells the property at fair market value.

(10) If a district or intermediate district does not comply with subsections (4), (5), (6), and (7), the department shall withhold all state school aid due to the district or intermediate district under this article, beginning with the next payment due to the district or intermediate district, until the district or intermediate district complies with subsections (4), (5), (6), and (7). However, the department shall not withhold the payment due on October 20 due to the operation of this subsection. If the district or intermediate district does not comply with subsections (4), (5), (6), and (7) by the end of the fiscal year, the district or intermediate district forfeits the amount withheld.

(11) Not later than November 1, 2014, if a district or intermediate district offers online learning under section 21f, the district or intermediate district shall submit to the department a report that details the per-pupil costs of operating the online learning by vendor type. The report shall include at least all of the following information concerning the operation of online learning for the school fiscal year ending June 30, 2014:

(a) The name of the district operating the online learning and of each district that enrolled students in the online learning.

(b) The total number of students enrolled in the online learning and the total number of membership pupils enrolled in the online learning.

(c) For each pupil who is enrolled in a district other than the district offering online learning, the name of that district.

(d) The district in which the pupil was enrolled before enrolling in the district offering online learning.

(e) The number of participating students who had previously dropped out of school.

(f) The number of participating students who had previously been expelled from school.

(g) The total cost to enroll a student in the program. This cost shall be reported on a per-pupil, per-course, per‑semester or trimester basis by vendor type. The total shall include costs broken down by cost for content development, content licensing, training, online instruction and instructional support, personnel, hardware and software, payment to each online learning provider, and other costs associated with operating online learning.

(h) The name of each online education provider contracted by the district and the state in which each online education provider is headquartered.

(12) Not later than March 31, 2015, the department shall submit to the house and senate appropriations subcommittees on state school aid, the state budget director, and the house and senate fiscal agencies a report summarizing the per pupil costs by vendor type of online courses available under section 21f.

(13) As used in subsections (11) and (12), “vendor type” means the following:

(a) Online courses provided by the Michigan virtual university.

(b) Online courses provided by a school of excellence that is a cyber school, as defined in section 551 of the revised school code, MCL 380.551.

(c) Online courses provided by third party vendors not affiliated with a Michigan public school.

(d) Online courses created and offered by a district or intermediate district.

Sec. 31a. (1) From the state school aid fund money appropriated in section 11, there is allocated for 2014-2015 an amount not to exceed $317,695,500.00 for payments to eligible districts, eligible public school academies, and the education achievement system for the purposes of ensuring that pupils are proficient in reading by the end of grade 3 and that high school graduates are career and college ready and for the purposes under subsections (6) and (7). In addition to the appropriations under section 11, an additional amount not to exceed $40,000,000.00 is appropriated from the state school aid fund for 2014-2015 for the purposes of this section.

(2) For a district or public school academy, or the education achievement system, to be eligible to receive funding under this section, other than funding under subsection (6) or (7), the sum of the district’s or public school academy’s or the education achievement system’s combined state and local revenue per membership pupil in the current state fiscal year, as calculated under section 20, must be less than or equal to the basic foundation allowance under section 20 for the current state fiscal year.

(3) Except as otherwise provided in this subsection, an eligible district or eligible public school academy or the education achievement system shall receive under this section for each membership pupil in the district or public school academy or the education achievement system who met the income eligibility criteria for free breakfast, lunch, or milk, as determined under the Richard B. Russell national school lunch act, 42 USC 1751 to 1769, and as reported to the department in the form and manner prescribed by the department not later than the fifth Wednesday after the pupil membership count day of the immediately preceding fiscal year and adjusted not later than December 31 of the immediately preceding fiscal year, an amount per pupil equal to 11.5% of the sum of the district’s foundation allowance or the public school academy’s or the education achievement system’s per pupil amount calculated under section 20, not to exceed the basic foundation allowance under section 20 for the current state fiscal year, or of the public school academy’s or the education achievement system’s per membership pupil amount calculated under section 20 for the current state fiscal year. However, a public school academy that began operations as a public school academy, or an achievement school that began operations as an achievement school, after the pupil membership count day of the immediately preceding school year shall receive under this section for each membership pupil in the public school academy or in the education achievement system who met the income eligibility criteria for free breakfast, lunch, or milk, as determined under the Richard B. Russell national school lunch act and as reported to the department not later than the fifth Wednesday after the pupil membership count day of the current fiscal year and adjusted not later than December 31 of the current fiscal year, an amount per pupil equal to 11.5% of the public school academy’s or the education achievement system’s per membership pupil amount calculated under section 20 for the current state fiscal year.

(4) Except as otherwise provided in this section, a district or public school academy, or the education achievement system, receiving funding under this section shall use that money only to provide instructional programs and direct noninstructional services, including, but not limited to, medical, mental health, or counseling services, for at-risk pupils; for school health clinics; and for the purposes of subsection (5), (6), (7), or (10). In addition, a district that is a school district of the first class or a district or public school academy in which at least 50% of the pupils in membership met the income eligibility criteria for free breakfast, lunch, or milk in the immediately preceding state fiscal year, as determined and reported as described in subsection (3), or the education achievement system if it meets this requirement, may use not more than 20% of the funds it receives under this section for school security. A district, the public school academy, or the education achievement system shall not use any of that money for administrative costs. The instruction or direct noninstructional services provided under this section may be conducted before or after regular school hours or by adding extra school days to the school year.

(5) A district or public school academy that receives funds under this section and that operates a school breakfast program under section 1272a of the revised school code, MCL 380.1272a, or the education achievement system if it operates a school breakfast program, shall use from the funds received under this section an amount, not to exceed $10.00 per pupil for whom the district or public school academy or the education achievement system receives funds under this section, necessary to pay for costs associated with the operation of the school breakfast program.

(6) From the funds allocated under subsection (1), there is allocated for 2014-2015 an amount not to exceed $3,557,300.00 to support child and adolescent health centers. These grants shall be awarded for 5 consecutive years beginning with 2003-2004 in a form and manner approved jointly by the department and the department of community health. Each grant recipient shall remain in compliance with the terms of the grant award or shall forfeit the grant award for the duration of the 5-year period after the noncompliance. To continue to receive funding for a child and adolescent health center under this section a grant recipient shall ensure that the child and adolescent health center has an advisory committee and that at least one-third of the members of the advisory committee are parents or legal guardians of school-aged children. A child and adolescent health center program shall recognize the role of a child’s parents or legal guardian in the physical and emotional well-being of the child. Funding under this subsection shall be used to support child and adolescent health center services provided to children up to age 21. If any funds allocated under this subsection are not used for the purposes of this subsection for the fiscal year in which they are allocated, those unused funds shall be used that fiscal year to avoid or minimize any proration that would otherwise be required under subsection (14) for that fiscal year.

(7) From the funds allocated under subsection (1), there is allocated for 2014-2015 an amount not to exceed $5,150,000.00 for the state portion of the hearing and vision screenings as described in section 9301 of the public health code, 1978 PA 368, MCL 333.9301. A local public health department shall pay at least 50% of the total cost of the screenings. The frequency of the screenings shall be as required under R 325.13091 to R 325.13096 and R 325.3271 to R 325.3276 of the Michigan administrative code. Funds shall be awarded in a form and manner approved jointly by the department and the department of community health. Notwithstanding section 17b, payments to eligible entities under this subsection shall be paid on a schedule determined by the department.

(8) Each district or public school academy receiving funds under this section and the education achievement system shall submit to the department by July 15 of each fiscal year a report, not to exceed 10 pages, on the usage by the district or public school academy or the education achievement system of funds under this section, which report shall include a brief description of each program conducted or services performed by the district or public school academy or the education achievement system using funds under this section, the amount of funds under this section allocated to each of those programs or services, the total number of at-risk pupils served by each of those programs or services, and the data necessary for the department and the department of human services to verify matching funds for the temporary assistance for needy families program. If a district or public school academy or the education achievement system does not comply with this subsection, the department shall withhold an amount equal to the August payment due under this section until the district or public school academy or the education achievement system complies with this subsection. If the district or public school academy or the education achievement system does not comply with this subsection by the end of the state fiscal year, the withheld funds shall be forfeited to the school aid fund.

(9) In order to receive funds under this section, a district or public school academy or the education achievement system shall allow access for the department or the department’s designee to audit all records related to the program for which it receives those funds. The district or public school academy or the education achievement system shall reimburse the state for all disallowances found in the audit.

(10) Subject to subsections (5), (6), and (7), a district may use up to 100% of the funds it receives under this section to implement schoolwide reform in schools with 40% or more of their pupils identified as at-risk pupils by providing supplemental instructional or noninstructional services consistent with the school improvement plan.

(11) If necessary, and before any proration required under section 296, the department shall prorate payments under this section by reducing the amount of the per pupil payment under this section by a dollar amount calculated by determining the amount by which the amount necessary to fully fund the requirements of this section exceeds the maximum amount allocated under this section and then dividing that amount by the total statewide number of pupils who met the income eligibility criteria for free breakfast, lunch, or milk in the immediately preceding fiscal year, as described in subsection (3).

(12) If a district is formed by consolidation after June 1, 1995, and if 1 or more of the original districts was not eligible before the consolidation for an additional allowance under this section, the amount of the additional allowance under this section for the consolidated district shall be based on the number of pupils described in subsection (1) enrolled in the consolidated district who reside in the territory of an original district that was eligible before the consolidation for an additional allowance under this section. In addition, if a district is dissolved pursuant to section 12 of the revised school code, MCL 380.12, the intermediate district to which the dissolved school district was constituent shall determine the estimated number of pupils that meet the income eligibility criteria for free breakfast, lunch, or milk, as described under subsection (3), enrolled in each of the other districts within the intermediate district and provide that estimate to the department for the purposes of distributing funds under this section within 60 days after the school district is declared dissolved.

(13) As used in this section, “at-risk pupil” means a pupil for whom the district has documentation that the pupil meets any of the following criteria:

(a) Is a victim of child abuse or neglect.

(b) Is a pregnant teenager or teenage parent.

(c) Has a family history of school failure, incarceration, or substance abuse.

(d) For pupils for whom the results of the Michigan merit examination have been received, is a pupil who does not meet the other criteria under this subsection but who did not achieve proficiency on the reading, writing, mathematics, science, or social studies components of the most recent Michigan merit examination for which results for the pupil have been received.

(e) For pupils in grades K-3, is a pupil who is at risk of not meeting the district’s core academic curricular objectives in English language arts or mathematics.

(f) The pupil is enrolled in a priority or priority-successor school, as defined in the elementary and secondary education act of 2001 flexibility waiver approved by the United States department of education.

(g) The pupil did not achieve a score of at least proficient on 2 or more state-administered assessments for English language arts, mathematics, science, or social studies.

(h) For high school pupils in grades not assessed by the state, the pupil did not receive a satisfactory score on 2 or more end-of-course examinations that are aligned with state standards in English language arts, mathematics, science, or social studies. For middle school pupils in grades not assessed by the state, the pupil did not receive a satisfactory score on 2 or more end-of-semester or end-of-trimester examinations that are aligned with state standards in science or social studies. For pupils in the elementary grades in grades and subjects not assessed by the state, the pupil did not receive a satisfactory score or did not have a satisfactory outcome on 2 or more interim assessments in English language arts, mathematics, science, or social studies.

(i) In the absence of state or local assessment data, the pupil meets at least 2 of the following criteria, as documented in a form and manner approved by the department:

(i) The pupil is eligible for free breakfast, lunch, or milk.

(ii) The pupil is absent more than 10% of enrolled days or 10 school days during the school year.

(iii) The pupil is homeless.

(iv) The pupil is a migrant.

(v) The pupil is an English language learner.

(vi) The pupil is an immigrant who has immigrated within the immediately preceding 3 years.

(vii) The pupil did not complete high school in 4 years and is still continuing in school as identified in the Michigan cohort graduation and dropout report.

(14) Beginning in 2014-2015, if a district, public school academy, or the education achievement system does not demonstrate to the satisfaction of the department that at least 50% of at-risk pupils are reading at grade level by the end of grade 3 as measured by the state assessment and demonstrate to the satisfaction of the department improvement over 3 consecutive years in the percentage of at-risk pupils that are career- and college-ready as measured by the pupil’s score on each of the individual subject areas on the college entrance examination portion of the Michigan merit examination under section 1279g(2)(a) of the revised school code, MCL 380.1279g, the district, public school academy, or education achievement system shall ensure all of the following:

(a) The district, public school academy, or the education achievement system shall determine the proportion of total at-risk pupils that represents the number of pupils in grade 3 that are not reading at grade level by the end of grade 3, and the district, public school academy, or the education achievement system shall expend that same proportion multiplied by 1/2 of its total at-risk funds under this section on tutoring and other methods of improving grade 3 reading levels.

(b) The district, public school academy, or the education achievement system shall determine the proportion of total at-risk pupils that represent the number of pupils in grade 11 that are not career- and college-ready as measured by the student’s score on each of the individual subject areas on the college entrance examination portion of the Michigan merit examination under section 1279g(2)(a) of the revised school code, MCL 380.1279g, and the district, public school academy, or the education achievement system shall expend that same proportion multiplied by 1/2 of its total at-risk funds under this section on tutoring and other activities to improve scores on the college entrance examination portion of the Michigan merit examination.

(15) As used in subsection (14), “total at risk pupils” means the sum of the number of pupils in grade 3 that are not reading at grade level by the end of third grade and the number of pupils in grade 11 that are not career- and college-ready as measured by the student’s score on each of the individual subject areas on the college entrance examination portion of the Michigan merit examination under section 1279g(2)(a) of the revised school code, MCL 380.1279g.

(16) A district or public school academy that receives funds under this section or the education achievement system may use funds received under this section to provide an anti-bullying or crisis intervention program.

Enacting section 1. Section 31a of the state school aid act of 1979, 1979 PA 94, MCL 388.1631a, as amended by this amendatory act, does not take effect unless House Joint Resolution UU of the 97th Legislature becomes a part of the state constitution of 1963 as provided in section 1 of article XII of the state constitution of 1963.

This act is ordered to take immediate effect.

References   [ + ]

Carbon Fee and Dividend

As long as fossil fuels remain artificially cheap and profitable, their use will rise. Correcting this market failure requires their price to account for their true social costs. 1)Citizens’ Climate Lobby

feedividendjustice-640x392

‘Carbon Fee and Dividend’ places a fee on carbon emissions, the fee is collected and then those revenues are divided up giving 100% back to all citizens equally. That’s right… the money doesn’t go into the federal budget for Congress to pick winners and losers, it goes right back to you and me.2)Green Action News

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Getting the Early Vote in Detroit

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There is a Thunderclap setup that needs immediate attention – we’ve got one day to get 97 more people registering their Facebook, Twitter, and/or Tumblr account to set the Thunderclap in motion for October 31 @ 11:30am. If we hit that number of pledges then each of them would automatically post the Thunderclap graphic and link for information.

How You Can Assist

The most simple is to visit this link [http://thndr.it/1DWs1eV] then push the button beneath to authorize it to use your Facebook Twitter, and/or Tumblr accounts.

Thunderclap-Support

I’ve done some connecting for my own account and so far there is a reach of over 3,200.

There is information at the link worth sharing – that is why committing to spreading the thunderclap is so important. We can mobilize more voters when they know how.

Know The Polling Places (Detroit)

I made a visit to the Detroit City Clerk to get a list of polling places around the city. This would seem like a somewhat standard request, however the information wasn’t readily available. I did get receive what I need, the next thing was to put it into a useful format. The document was skewed and somewhat distorted. For about 6 hours I worked with scanning, moving text and correcting it. The results is a working spreadsheet of Detroit’s polling places as linked below off Google Drive and made available to the public.

Election Day Thunderclap

http://thndr.it/1va18NZ
(Thunderclap link provided soon.)

An additional Thunderclap is in the works to support voting for Stephen Boyle on Election Day, to be delivered at 6:30am on Tuesday, November 4th. I’ll be updating the post with the live link for this and likely reposting this portion of this notice,

Stephen Boyle – Green Party Candidate for US Congress 14th District of Michigan

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