LOCAL GRADE SEPARATION GRANT PGM & FUND S.B. 425 & 427:
SUMMARY OF INTRODUCED BILL
IN COMMITTEE
Senate Bills 425 and 427 (as introduced 5-6-21)
Committee: Transportation and Infrastructure
CONTENT
Senate Bill 425 would amend the Michigan Transportation Fund law to do the following:
-- Require the Michigan Department of Transportation (MDOT) to establish a local grade separation grant program, and to provide grants to cities, villages, and county road commissions.
-- Require MDOT to establish a review process for considering funding applications and to notify applicants within 120 days after receiving the funding application whether it was approved or rejected.
-- Require MDOT, before releasing local grade separation funds, to enter into an agreement with the recipient, and specify the provisions that would have to be included in the agreement.
-- Require MDOT to issue a report to the Legislature pertaining to the use of funds from the grant program.
Senate Bill 427 would amend the Michigan Transportation Fund law to create the "Local Grade Separation Fund" within the State Treasury and provide for the disposition of money from the Fund.
The bills are tie-barred. Senate Bill 425 also is tie-barred to Senate Bill 426, which would amend the Michigan Transportation Fund law, to require MDOT to create an application point-based scoring system that would award points to applicants of the local grade separation grant program for certain criteria.
Senate Bill 425
Local Grade Separation Grant Program
Specifically, the bill would require MDOT to create and operate a local grade separation grant program for the separation of motor vehicle traffic and railroad traffic in the State. The Department would have to provide grants to cities, villages, and county road commissions in the State. ("Grade separation" would mean an intersection of a railroad or roadway at different levels with the railroad either above or below the highway.)
An application for funds from the local grade separation grant program would have to be made on a form approved by MDOT and would have to contain the information required by MDOT, including a narrative describing the economic development benefit to the county, township, or city in which the crossing was located. The bill specifies that an application for funds could be made at any time as determined by MDOT.
Application Review Process; Agreement
Before releasing local grade separation funds, MDOT would have to enter into a written agreement with the funding recipient. The written agreement between MDOT and the funding recipient would have to provide for complete details of the grade separation project and a local, private, or Federal match of at least 20% of the cost of the grade separation project.
Reporting Requirements
For each year in which MDOT received funding applications, MDOT would have to report by December 1 to the standing committees of the Senate and House of Representatives with primary jurisdiction over issues pertaining to transportation and the Senate and House of Representatives Appropriations Committees on the use of funds from the local separation grant program.
The report would have to include, at a minimum, the following:
-- The number of funding applications received.
-- The name of each city, village, or county road commission applying for funding, and whether each application was approved or denied.
-- The amount of local match for each award under the bill.
Senate Bill 427
Under the bill, the Local Grade Separation Fund would be created within the State Treasury. The State Treasurer could receive money or other assets from any source for deposit into the Fund and would have to direct the investment of the Fund. The Treasurer would have to credit to the Fund interest and earnings Fund investments. Money in the Fund at the close of the fiscal year would remain in the Fund and would not lapse into the General Fund.
The bill specifies that MDOT would be the administrator of the Local Grade Separation Fund for auditing purposes. The Department would have to spend money from the Fund, upon appropriation, only to fund the local grade separation grant program proposed under Senate Bill 425.
Proposed MCL 247.661i (S.B. 425) Legislative Analyst: Tyler VanHuyse
Proposed MCL 247.661k (S.B. 427)
FISCAL IMPACT
The bills would have a minimal fiscal impact on the State and a potentially significant, positive impact on local governments by way of matching grants for rail grade separation projects.
Costs to the Department of Transportation would include the creation of a funding application form and a review process to make grant determinations. These costs likely would be absorbed by MDOT.
While Senate Bill 427 would create the Local Grade Separation Fund, neither of the bills would appropriate any funds to the program. Of note, Senate Bill 529, a supplemental bill for the current year, would appropriate $126.0 million of Federal Coronavirus Recovery Funds for a local rail grade separation program. If Senate Bill 529 and Senate Bills 425 and 427 were enacted, grants made under proposed program likely would be made with Federal money. This could create significant rail grade separation infrastructure improvements for local governments throughout the State with little to no direct cost to MDOT. Under Senate Bill 425 a local, private, or separate Federal match of 20% of a project's cost would be required to receive a grant.
The Department of Treasury would incur minimal administrative costs to create and maintain
the Fund. The ongoing administrative cost of less than $100 would be absorbed within current
appropriations.
Fiscal Analyst: Cory Savino
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.