SB0777: CONFERENCE REPORT (Date Completed: 6-5-14) - FY 2014-15 TRANSPORTATION BUDGET

FY 2014-15 TRANSPORTATION BUDGET S.B. 777 (CR-1): CONFERENCE REPORT

FY 2013-14 Year-to-Date Gross Appropriation.....................................................................

$3,826,145,600

Changes from FY 2013-14 Year-to-Date:
Items Included by the Senate and House
1. Intercity Passenger and Freight. Net of adjustments due to 1) a lower number of vehicles eligible for replacement; 2) increased estimates in Federal rail and rail freight fund revenues; and 3) a decrease in terminal development.	10,439,000
2. Transportation Economic Development Fund. The Governor, Senate, and House redirected the entire TEDF through the TEDF statutory distribution formula.	9,457,600
3. Oversight of Local Agency Federal Aid Program. MDOT has reallocated staff or used consultant services to conform to requirements regarding local agency Federal aid.	3,469,000
4. Bus Transit Division. Adjustments to CTF funding to align appropriations with projected expenses of transit agencies, and eliminate discretionary State operating assistance.	(4,624,000)
5. Public Transportation Development. Adjustments to reflect current service baseline costs. This is the net result of a decrease of $89,900 in specialized services, a decrease of $612,000 in van pooling, and an increase of $417,100 for service initiatives.	(284,800)
6. One-time Appropriations for Rail Infrastructure and Airport Safety. $10.0 million in GF/GP was appropriated to transit capital and rail infrastructure to match Federal transit and rail aid, and $2,047,900 in GF/GP was appropriated to match Federal aeronautics aid.	12,047,900
7. Elimination of FY 2013-14 One-time Appropriations. Appropriations for the priority roads investment program, trunkline and bridge construction, Beaver Island transportation authority, special winter road maintenance, and rail operations. ($348,328,900 in GF/GP).	(463,328,900)
8. Economic Adjustments. Includes a negative $1,688,300 Gross and $0 GF/GP for OPEB and $7,630,300 Gross and $0 GF/GP for other economic adjustments.	5,942,000
9. Other Changes. A new IT system, changes in debt service, various revenue adjustments, and an increase in IDGs based on other agency program decisions.	27,735,200
Conference Agreement on Items of Difference
10. One-time Appropriation of GF/GP for Federal Match. The Governor and Senate included $127.0 million in GF/GP to match Federal highway aid. The Governor included an additional $115.0 million GF/GP for state trunkline and bridge construction, which the Senate redirected to priority transportation projects. The House included this appropriation within a separate line item. The Conference concurred with the Senate.	127,000,000
11. One-time Appropriation of GF/GP for State Trunkline and Locals. The Senate included $117.0 million in GF/GP for priority transportation projects, including the RTA and State and local roads and bridges. The House included $379.0 million in GF/GP for State and local roads and bridges. The Conference included $144.5 million in GF/GP for State and local roads and bridges.	144,500,000
12. One-time Appropriations for High-Speed Rail Crossing Pilot Program and Rail Tunnel Crossing Project. The Senate included $11.5 million in GF/GP for a pilot program for high-speed rail crossings (at $1.5 million) and a rail tunnel between Detroit and Windsor that can accommodate double-stacked freight cars (at $10.0 million). The Conference included the rail crossing as a line item, but not the freight tunnel.	1,500,000
13. One-time Appropriations for the Regional Transit Authority. The Senate included $2.0 million to fund the RTA. The Conference included $1.1 million in funding.	1,100,000

Total Changes.....................................................................................................................	($125,047,000)
FY 2014-15 Conference Report Ongoing/One-Time Gross Appropriation............................	$3,701,098,600
Amount Over/(Under) GF/GP Target: $0

FY 2014-15 TRANSPORTATION BUDGET BOILERPLATE HIGHLIGHTS

Changes from FY 2013-14 Year-to-Date:

Items Included by the Senate and House

1. Disciplinary Action. The Governor deleted and the Senate and House retained a prohibition against MDOT from taking disciplinary action against an employee for communicating with the Legislature. (Sec. 215)

2. Remanufactured Parts and Alternative Road Materials. The Governor deleted and the Senate and House retained a requirement to prioritize the use of remanufactured parts in vehicle maintenance (Sec. 270), and a requirement that MDOT evaluate the use of materials which incorporate crumb rubber from scrap tires (Sec. 660).

3. Small Businesses. The Governor deleted and the Senate and House retained a prohibition against funds being used in a way that would have a disproportionate economic impact on small businesses. (Sec. 263)

4. Contractor-Related Requirements. The Governor deleted and the Senate and House retained the following requirements and prohibitions: 1) MDOT must post signs regarding rest area maintenance (Sec. 319); 2) MDOT must review its contractor payment process and ensure compliance (Sec. 353); 3) MDOT must complete inspections for local Federal aid projects within 120 days of submission (Sec. 357); 4) MDOT may not reimburse contractors for certain costs (e.g., groundbreaking ceremonies) (Sec. 375); 5) MDOT must require use of the E-Verify system (Sec. 381); and 6) within two years of payment to a contractor, MDOT must submit a final cost-sharing bill (Sec. 382).

5. High-speed Rail Pilot Project. The Governor deleted and the Senate and House included provisions for a $1.5 million pilot project to test devices at high-speed rail crossings, and a requirement that any bidding must be done under a competitive bidding process. (This project was vetoed in FY 2013-14.) (Sec. 736)

6. Report Requirements. The Senate and House retained the sections described below. The Governor deleted a requirement that MDOT must retain all reports in compliance with Federal and State guidelines. (Sec. 212). The Governor also deleted requirements that MDOT must provide a report regarding: expenditures associated with local governments (Sec. 233); money received by each local government within a legislator's district (Sec. 303); a rolling five-year plan of all construction projects (Sec. 307), and associated criteria for the plan (Sec. 603); MDOT's activities related to the prequalification of construction contractors (Sec. 308); the status of the State infrastructure bank (Sec. 313(3)); the amount of Federal aid for certain State and local programs (Sec. 401); contract incentives for State trunkline projects (Sec. 612); railroad line abandonment (Sec. 703); the balances of the CTF (Sec. 740); the status of airport improvement projects (Sec. 902); and production of copies of agendas and minutes for commission meetings (Sec. 310). The Governor deleted requirements to provide the State Budget Office with: GF/GP appropriation lapses (Sec. 228); and estimates regarding fund balances, revenues, and expenditures (Sec. 229).

Conference Agreement on Items of Difference

7. Public Property Lease Restrictions. The Governor and the Senate included a requirement that MDOT consider a party's permitted use of public transportation property to be consistent with the public transportation, and deleted a requirement regarding equal leasing rates for public transit agencies and intercity bus carriers. The Conference did not concur and omitted the change. (Sec. 305)

8. Department-owned Aircraft Restrictions. The Gov. deleted and the Senate and House amended a requirement regarding transporting legislators or staff only when an aircraft is scheduled on related official State business. The Conference concurred with the House. (Sec. 383)

9. Detroit River International Crossing. The Gov. deleted and the Senate amended a prohibition against certain activities relating to the DRIC until the Legislature enacts enabling legislation (Sec. 384), and a requirement that MDOT must report on planning activities related to the DRIC. The Conference retained the provisions from the prior year's budget. (Sec. 385)

10. Petoskey Crossing and Bus Rollover Studies. The Senate included requirements that MDOT provide a report regarding rollover test standards for transit buses (Section 741), and study the feasibility of a pedestrian crossing in Petoskey (Section 311). The Conference concurred with the Senate as to both items.

11. Best Practices. The House included a requirement to promote best practices for public transportation services, and to report on efforts by March 1, 2015. The Conference concurred with the House. (Sec. 393)

12. Consolidation Workgroup. The Senate included a requirement for a workgroup aimed at consolidating certain transportation services under one department. (Sec. 312) The Conference concurred with the Senate.

13. New One-time Appropriations. The Conference included provisions regarding Federal Match appropriations (Sec. 1001), state and local bridge funding (Sec. 1002), the high-speed rail crossing pilot program (Sec. 1004), the RTA (Sec. 1005), and a freight rail tunnel between Detroit and Windsor (Sec. 1006). The Department would have to report on the use of 1-time GF/GP funds for transit capital and rail infrastructure by December 1, 2015. (Sec. 1003).

14. Elimination of One-time Appropriations. The Governor, Senate, and House deleted provisions regarding the one-time FY 2013-14 appropriation of $121,300,000 in GF/GP to match Federal highway funds. (Sec. 1001)

15. Legacy Costs. Total legacy costs are $75,324,500; pension-related costs are estimated at $42,130,400; and retiree health care legacy costs are estimated at $33,194,100. (Sec. 271).

Date Completed: 6-5-14 Fiscal Analyst: Glenn Steffens

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.