Inside208

Legislature Proposes Road Reforms That Include Allowing Local Gas Taxes and Registration Fees

Posted on September 13, 2019 by Dene Westbrook

Yesterday the House and Senate introduced a package of bills that would provide additional flexibility at the local level and allow for local gas taxes and registration fees. A total of 21 bills were introduced yesterday that impact both MDOT and local agencies. We are currently reviewing each bill, but are excited about the potential to have more local control over the way we fund and fix our infrastructure. Below is a short description of each bill.

HB 4963 (O’Malley) – Local Option Fuel Tax: Allows counties to levy a local option fuel tax by a vote of the people. The tax collected will be distributed by population and actual road miles to other local road agencies within the county boundaries.

HB 4964 (Sneller) – Local Option Registration Tax: Allows counties to levy a local option registration fee by a vote of the people. The fees collected will be distributed by population and actual road miles to other local road agencies within the county boundaries.

HB 4965 (Schroeder) – Asset Management Spending – Counties: Provide more flexibility to county road agencies so they are no longer constrained to “75% on primary roads” and “25% on local roads.” Counties wouldn’t be constrained by these limits; instead, they would simply need to have and follow an approved asset management plan.

HB 4966 (Wakeman) – Asset Management Spending – Cities and Villages: Provide more flexibility to municipal road agencies so they are no longer constrained to “75% on primary roads” and “25% on local roads.” Cities and Villages wouldn’t be constrained by these limits; instead, they would simply need to have and follow an approved asset management plan.

HB 4967 (Mueller) – Prequalification Reform: Change MDOT prequalification limitations by eliminating prequalification for sub-contractors hired for landscaping, seeding, sodding, or stone work for projects under $10 million and for projects above $10 million all contractors need to be prequalified

HB 4968 (Markkanen) – Update Snow Maintenance Formula: Revise the distribution for snow removal based on the immediately preceding 14 calendar years, instead of “before 1987.”

HB 4969 (Yancey) – Construction Work time reform: Prohibits MDOT and the local road agencies from contractually restricting road-building times and requires that all road projects be put out for bid no later than the last fiscal quarter of the fiscal year prior to work beginning on a project. Further, the bill does provide an exemption from the bid requirement in emergency situations. Lastly, the bill allows local governments to consider “responsive and responsible best value bidder” as well as “low bid” when selecting contracts.

HB 4970 (Bellino) – Alternative Delivery Methods: Creation of a Michigan Alternative Project Delivery Act which provides a regulatory structure for new delivery methods.

HB 4971 (Alexander) – Asset Management Road Right-Sizing: Requires the Transportation Asset Management Council (TAMC) to evaluate roads throughout the state for “right-sizing” and work with the state and local road agencies to ensure our infrastructure is not overbuilt.

HB 4972 (Leutheuser) – Reform Registration: Move away from an ad-valorem system and impose a $40 base fee with an additional tiered MPG fee (MPG Fees – 0-10 -$30 ($70 total); 11-20 – $40 ($80 total); 21-30 – $75 ($105 total); 31-40 – $120 ($160 total); 40+ – $200 ($240 total); Full Electric – $250 ($290 total)). All MPG Fees indexed to inflation every 5 years.

HB 4973 (Glenn) – Local Bridge Collaboration: Allow for the transfer and/or collaborative sharing of local bridge design, construction, and/or operations with MDOT.

SB 515 (Barrett): Requires MDOT to develop a road construction inflation index to measure changes in cost within the highway construction industry annually.

SB 516 (Barrett): Would extend the requirement for local asset management reports to be for 6 years, not the current 3 years, and codify state reporting requirements, such as the 5-year plan and the long-range plan.

SB 517 (Bizon): Require MDOT to study tolling Michigan bridges on roadways.

SB 518 (MacDonald): Direct federal funds to MDOT so that non-federal funds can be directed to local agencies.

SB 519 (Runestad): Direct non-federal funds to local agencies, making them “whole”.

SB 520 (Outman): Amends the specifics of state and local warranty programs by raising the dollar amount of which projects need to be warrantied, also revokes a company’s prequalification if they have outstanding warranty work that needs to be done and they aren’t making progress toward addressing it in certain situations.

SB 521 (Victory): Require local units of government, when adding new roads to their system or planned developments are adding new infrastructure, that the plans include how the maintenance of the infrastructure is to be paid for.

SB 522 (Zorn): Establish a Local Road Agency Advocate which is appointed by the Transportation Asset Management Council. This individual (and any support staff)’s primary function would be to advocate for local road agencies in the permitting process with MDOT, DEGLE, DNR, and any other state agency. The Advocate can also assist local agencies with developing plans to comply with federal permit requirements.

SB 523 (McBroom): Require individuals applying for a farm or logging registration plate to supply an EIN in order to qualify for the plate.

SB 524 (LaSata): Would require MDOT to post signs on roadway rehabilitation and reconstruction projects with identifying information about the project.

We look forward to working with our members, and the House and Senate, on these bills with the goal of improving our ability at the local level to fund and fix our infrastructure.

John LaMacchia is the Assistant Director of State and Federal Affairs for the League handling transportation, infrastructure, energy and environment issues. He can be reached at jlamacchia@mml.org or 517-908-0303.

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