SB-1197, As Passed Senate, December 11, 2018

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 1197

     A bill to amend 1952 PA 214, entitled

"An act authorizing the Mackinac bridge authority to acquire a

bridge connecting the upper and lower peninsulas of Michigan,

including causeways, tunnels, roads and all useful related

equipment and facilities, including park, parking, recreation,

lighting and terminal facilities; extending the corporate existence

of the authority; authorizing such authority to enjoy and carry out

all powers incident to its corporate objects; authorizing the

appropriation and use of state funds for the preliminary purposes

of the authority; providing for the payment of the cost of such

bridge and in that connection authorizing the authority to issue

revenue bonds payable solely from the revenues of the bridge;

granting the right of condemnation to the authority; granting the

use of state land and property to the authority; making provisions

for the payment and security of such bonds and granting certain

rights and remedies to the holders thereof; authorizing banks and

trust companies to perform certain acts in connection therewith;

authorizing the imposition of tolls and charges; authorizing the

authority to secure the consent of the United States government to

the construction of the bridge and to secure approval of plans,

specifications and location of same; authorizing employment of

engineers irrespective of whether such engineers have been

previously employed to make preliminary inspections or reports with

respect to the bridge; authorizing the state highway department to

operate and maintain such bridge or to contribute thereto and enter

into leases and agreements in connection therewith; exempting such

bonds and the property of the authority from taxation; prohibiting

competing traffic facilities; authorizing the operation of ferries

by the authority; providing for the construction and use of certain

buildings; and making an appropriation,"

by amending the title and sections 1 and 5 (MCL 254.311 and

254.315), the title as amended by 1992 PA 120 and section 5 as

amended by 1983 PA 123, and by adding sections 14, 14a, 14b, 14c,

14d, and 14e.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

TITLE

     An act authorizing the Mackinac bridge authority to acquire a

bridge and a utility tunnel connecting the upper and lower

peninsulas Upper and Lower Peninsulas of Michigan, including

causeways, tunnels, roads and all useful related equipment and

facilities, including park, parking, recreation, lighting, and

terminal facilities; extending the corporate existence of the

authority; authorizing such the authority to enjoy and carry out

all powers incident to its corporate objects; authorizing the

appropriation and use of state funds for the preliminary purposes

of the authority; providing for the payment of the cost of such the

bridge and in that connection authorizing the authority to issue

revenue bonds payable solely from the revenues of the bridge;

granting the right of condemnation to the authority; granting the

use of state land and property to the authority; making provisions

for the payment and security of such bonds and granting certain

rights and remedies to the holders thereof; of bonds; authorizing

banks and trust companies to perform certain acts in connection

therewith; with the payment and security of bonds; authorizing the

imposition of tolls and charges; authorizing the authority to

secure the consent of the United States government to the

construction of the bridge and to secure approval of plans,

specifications, and location of same; the bridge; authorizing

employment of engineers irrespective regardless of whether such

those engineers have been previously employed to make preliminary

inspections or reports with respect to the bridge; authorizing the

state highway transportation department to operate and maintain

such the bridge or to contribute thereto to the bridge and enter

into leases and agreements in connection therewith; with the

bridge; exempting such bonds and the property of the authority from

taxation; prohibiting competing traffic facilities; authorizing the

operation of ferries by the authority; authorizing the creation of

the Mackinac Straits corridor authority; authorizing the operation

of a utility tunnel by the authority or the Mackinac Straits

corridor authority; providing for the construction and use of

certain buildings; and making an appropriation.

Sec. 1. As used in this act: the following words and terms

shall have the following meanings:

     (a) The word "authority" shall mean "Authority" means the

Mackinac bridge authority created by Act No. 21 of the Public Acts

of the Extra Session of 1950, being sections 254.301 to 254.304,

inclusive, of the Compiled Laws of 1948.in 1950 (Ex Sess) PA 21,

MCL 254.301 to 254.302. This subdivision does not apply to sections

14a, 14b, 14d, and 14e.

     (b) The word "board" shall refer to "Board" means the members

of the authority. This subdivision does not apply to section 14b.

     (c) The word "bridge" shall mean "Bridge" means the project

for the acquisition of which this act is adopted and shall mean

means a bridge or structure extending from the upper peninsula

Upper Peninsula to the lower peninsula Lower Peninsula of Michigan,

and shall be understood to include includes all of the following

forming any part thereof of the bridge or connected with or used or

useful in the operation thereof, of the bridge, causeways, bridges,

tunnels, roads, fills and approaches, or any combination thereof,

parking space and facilities, park and recreation facilities,

lighting facilities, terminal facilities consisting of areas,

structures, and buildings in whch [sic] which rest rooms, waiting

rooms, restaurant and similar facilities, and other accommodations

for the traveling public may be installed, including all fixtures,

utility lines, accessories, and equipment relating to any or all of

the above, and including the improvement and beautification of such

terminal areas at each end of the structure as may be designed to

increase the use thereof, of the structure, and including in all of

the foregoing all real and personal property, tangible or

intangible, licenses, franchises, easements, and rights-of-way

necessary thereto.

     (d) The term "cost of the bridge" shall include "Cost of the

bridge" includes all expenditures made in connection with the

acquisition and construction thereof, of the bridge, financing

charges, interest to accrue on the bonds during the period occupied

by the construction of the bridge and for such a period thereafter

after construction of the bridge as may be determined by the board,

the aggregate of such periods, however, not to exceed 7 years, cost

of engineering and legal expenses, plans, specifications and

surveys, other expenses necessary or incidental to determining the

feasibility of the project, the cost of all land, property, rights,

easements and franchises, reimbursement of all money which that may

have been heretofore or may hereafter will be paid or advanced by

the state of Michigan or any of its agencies, departments, or

subdivisions, for any of the foregoing, and all other expenses

properly incident to the acquisition of the bridge and the issuance

of the bonds.

     (e) The words "the state" shall mean "The state" means the

state of Michigan.

     (f) The words "the bonds" shall mean "The bonds" means all

bonds authorized to be issued by this act.

     (g) The words "to construct" shall mean "To construct" means

to acquire through construction, purchase, gift, condemnation, or

any combination thereof.

     Sec. 5. (1) The authority is hereby authorized may by

resolution or resolutions of the board to provide for the issuance

of revenue bonds for the purpose of paying the cost of the bridge

or for the purpose of refunding the bonds, including refunding

bonds, or for any combination of such these purposes. Such

refunding Refunding bonds may be either sold at not less than par

and accrued interest or may be delivered in exchange for the bonds

to be refunded or may be sold in part and exchanged in part and if

sold, the proceeds thereof of the sale or exchange when received,

together with other properly available funds sufficient to pay the

balance of the principal, interest, and redemption premiums which

that will be due on the bonds to be refunded, shall be deposited

with the paying agent for the bonds to be so refunded and used only

for the purpose of making said those payments. Any such A sale or

exchange shall be described in this subsection is subject to the

approval of the state administrative board. The board may enter

into such contracts for fiscal agents' services in connection with

the financing of the bridge as may be approved by the state

administrative board, or the state treasurer may be used as fiscal

agent.

     (2) Principal of and interest and redemption premiums on the

bonds issued hereunder shall be under this section are payable

solely from the revenues of the authority, except that said

payments may also be made from the proceeds of refunding bonds

issued hereunder under this section and capitalized interest may be

paid from the proceeds of the bonds. Such The bonds may be either

serial bonds, or term bonds, or any a combination thereof. of

serial and term bonds. Any serial bonds shall have annual or

semiannual maturities, the first maturity of which shall be payable

not more than 10 years from their date. Any A term bonds shall be

bond is redeemable on any interest payment date at such a price or

prices and upon such terms and conditions as prescribed by the

authorizing resolution of the board, and recited upon the face of

the bonds. The bonds bond. A bond shall mature not more than 50

years from their its date, shall be a coupon bonds bond bearing

interest at not more than 6% per annum, payable semiannually except

as to the first coupon which may be for any number of months not

exceeding 10, shall be payable in such a medium, shall be in such a

form and executed in such a manner, shall have such a privilege of

registration as to principal or principal and interest, shall be

payable at such a place or places within inside or without the

outside this state, and shall otherwise have such other details as

may be fixed by resolution of the board. Serial bonds may be made

redeemable prior to maturity at such a price or prices and under

such terms and conditions as may be prescribed in the resolution of

the board, and recited upon the face of the bonds.

     (3) All such bonds A bond issued under this section shall

contain a statement on their its face that neither the bonds bond

nor the coupons coupon representing interest thereon constitute on

the bond constitutes an indebtedness of the this state of Michigan

within the meaning of any constitutional limitations or

prohibitions and that neither the authority nor the this state is

authorized to pay such bonds the bond or interest except from the

revenues pledged thereto to the bond or interest under the

provisions of this act. In case any official whose signature

appears on such bonds a bond or coupons shall cease coupon ceases

to be such an officer before the delivery of such bonds, such the

bond, his or her signature shall nevertheless be valid and

sufficient for all purposes with like effect as though such person

he or she had remained in office until delivery. All such bonds are

hereby declared to be A bond issued under this section is fully

negotiable and to have has all of the qualities incident to

negotiable instruments under the uniform commercial code, subject

only to the provisions for registration of the bonds which may

appear therein. Such bonds shall be bond that appears in the bond.

A bond issued under this section is exempt from all taxation by the

this state or any of its a political subdivisions subdivision of

this state and shall be sold at public sale after notice at least 5

days before the sale in a publication approved by the department of

treasury for the carrying of such the notice, but no such sale

shall be made at a price that will result in an interest cost of

more than 6% per annum. However, all or any part of such bonds a

bond issued under this section may be sold to the United States

government or any an agency thereof, of the United States

government, at private sale , without public offering and the

authority is authorized to enter into any agreements or contracts

with the United States government or any of its agencies necessary

to provide for the financing of the bridge in the manner

contemplated by this act. Such bonds A bond issued under this

section may be authorized and may be issued from time to time as

needed and subsequent series or issues thereof shall enjoy of a

bond issued under this section have equal or subordinate status

with respect to the pledge of revenues from which they are the bond

is payable as may be provided in the proceedings authorizing their

its issuance. Any public sale, or negotiated sale of the bonds a

bond issued under this section with the United States government or

any of its agencies, shall be is subject to the approval of the

state administrative board. Prior to the preparation of a

definitive bonds, bond, the board may provide for the issuance of a

temporary bonds bond with or without coupons, a coupon,

exchangeable for a definitive bonds bond upon the issuance of the

latter. temporary bond. The proceedings authorizing the bonds a

bond issued under this section may provide that such bonds the bond

shall contain a recital that they are it is issued pursuant to

under this act and such the recital shall be is conclusive evidence

of their its validity and the regularity of their its issuance.

     (4) This section does not apply to the acquisition,

construction, operation, maintenance, improvement, repair, or

management of a utility tunnel. As used in this subsection,

"utility tunnel" means that term as defined in section 14.

     Sec. 14. As used in this section and sections 14a to 14e:

     (a) "Corridor authority board" means the board of directors of

the Mackinac Straits corridor authority appointed under section

14b.

     (b) "Mackinac Straits corridor authority" means the Mackinac

Straits corridor authority created in section 14b.

     (c) "Straits protection fund" means the fund created in

section 14c.

     (d) "Tunnel agreement" means an agreement or series of

agreements described in section 14d.

     (e) "Utility tunnel" means a tunnel joining and connecting the

Upper and Lower Peninsulas of this state at the Straits of Mackinac

for the purpose of accommodating utility infrastructure, including,

but not limited to, pipelines, electric transmission lines,

facilities for the transmission of data and telecommunications, all

useful and related facilities, equipment, and structures, and all

necessary tangible or intangible real and personal property,

licenses, franchises, easements, and rights-of-way.

     Sec. 14a. (1) The Mackinac bridge authority may acquire,

construct, operate, maintain, improve, repair, and manage a utility

tunnel. The Mackinac bridge authority shall determine the rates

charged for the services offered by the utility tunnel. The

Mackinac bridge authority may enter into contracts or agreements

necessary to perform its duties and powers under this act,

including, but not limited to, leasing the right to use a utility

tunnel on terms and for consideration determined by the Mackinac

bridge authority. This subsection does not authorize the Mackinac

bridge authority to incur obligations that would constitute an

indebtedness of this state contrary to the state constitution of

1963.

     (2) The Mackinac bridge authority may purchase or otherwise

acquire at a fair and reasonable price property and property rights

in connection with the construction of a utility tunnel, including,

but not limited to, roads, structures, rights-of-way, franchises,

easements, and other interests in land, including land under water;

the riparian rights of any person; and the right to cut off light,

air, and access to real property.

     (3) The Mackinac bridge authority may enter on any public

land, water, or premises to make a survey, sounding, or examination

in connection with the construction of a utility tunnel. The

Mackinac bridge authority has the right to use and full easements

and rights-of-way through, across, under, and over any lands or

property owned by this state or in which this state has any right,

title, or interest, without consideration, that may be necessary or

convenient to the construction and efficient operation of the

utility tunnel.

     (4) The Mackinac bridge authority may perform all acts

necessary to secure the consent of any department, agency,

instrumentality, or officer of the United States government or this

state to the construction and operation of a utility tunnel and the

charging of fees for its use, and to secure the approval of any

department, agency, instrumentality, or officer of the United

States government or this state required by law to approve the

plans, specifications, and location of the utility tunnel or the

fees to be charged for the use of the utility tunnel.

     (5) The carrying out of the Mackinac bridge authority's

purposes, including a utility tunnel, are for the benefit of the

people of this state and constitute a public purpose, and the

Mackinac bridge authority is performing an essential government

function in the exercise of the powers conferred upon it by this

act. All property owned by the Mackinac bridge authority related to

a utility tunnel is exempt from all taxes levied by this state and

all of its political subdivisions and taxing districts, and the

Mackinac bridge authority is not required to pay taxes or

assessments upon its activities or upon any of its revenues. If a

tax of any nature is legally imposed on any property or obligation

of the Mackinac bridge authority in connection with a utility

tunnel, and that tax is determined to be valid and effective, the

tax shall be paid from the revenues of the Mackinac bridge

authority as an expense of maintaining and operating the utility

tunnel. Real property or personal property owned or used by an

entity leasing or otherwise using the utility tunnel is not exempt

from taxation.

     Sec. 14b. (1) The Mackinac Straits corridor authority is

created within the state transportation department. The Mackinac

Straits corridor authority is a state institution within the

meaning of section 9 of article II of the state constitution of

1963, and an instrumentality of this state exercising public and

essential governmental functions. The creation of the Mackinac

Straits corridor authority and the carrying out of the Mackinac

Straits corridor authority's authorized purposes are public and

essential governmental purposes for the benefit of the people of

this state and for the improvement of the health, safety, welfare,

comfort, and security of the people of this state, and these

purposes are public purposes. The Mackinac Straits corridor

authority will be performing an essential governmental function in

the exercise of the powers conferred upon it by this act.

     (2) The Mackinac Straits corridor authority shall exercise its

duties through the corridor authority board. The corridor authority

board shall consist of 3 members appointed by the governor with the

advice and consent of the senate. No more than 2 of the corridor

authority board members shall be members of the same political

party. Members of the corridor authority board shall serve for

terms of 6 years or until a successor is appointed and qualified,

whichever is later.

     (3) If a vacancy occurs on the corridor authority board, the

governor, with the advice and consent of the senate, shall make an

appointment for the unexpired term in the same manner as the

original appointment.

     (4) At the first meeting of the corridor authority board, the

corridor authority board shall elect from among its members a

chairperson. After the first meeting, the corridor authority board

shall meet at the call of the chairperson or if requested by a

majority of the members.

     (5) A majority of the members of the corridor authority board

constitute a quorum for the transaction of business at a meeting of

the board. A majority of the members present and serving are

required for official action of the corridor authority board.

     (6) Members of the corridor authority board shall serve

without compensation. However, members of the corridor authority

board shall be reimbursed for their actual and necessary expenses

incurred in the performance of their official duties as members of

the corridor authority board, unless they decline to accept

reimbursement.

     (7) The members of the corridor authority board and any agent

of the Mackinac Straits corridor authority are subject to 1968 PA

317, MCL 15.321 to 15.330, and 1968 PA 318, MCL 15.301 to 15.310.

     (8) An individual who is a member of the Mackinac bridge

authority board shall not serve as a member of the corridor

authority board during his or her term as a member of the Mackinac

bridge authority board.

     (9) The business that the corridor authority board may perform

shall be conducted at a public meeting of the corridor authority

board held in compliance with the open meetings act, 1976 PA 267,

MCL 15.261 to 15.275.

     (10) A writing prepared, owned, used, in the possession of, or

retained by the corridor authority board in the performance of an

official function is subject to the freedom of information act,

1976 PA 442, MCL 15.231 to 15.246.

     (11) The Mackinac Straits corridor authority does not possess

any powers not explicitly granted to it under this act, including,

but not limited to, the power of eminent domain.

     Sec. 14c. (1) The straits protection fund is created within

the state treasury.

     (2) The state treasurer may receive money or other assets from

any source for deposit into the straits protection fund. The state

treasurer shall direct the investment of the straits protection

fund. The state treasurer shall credit to the straits protection

fund interest and earnings from fund investments.

     (3) Money in the straits protection fund at the close of the

fiscal year shall remain in the straits protection fund and shall

not lapse to the general fund.

     (4) The state transportation department shall be the

administrator of the fund for auditing purposes.

     Sec. 14d. (1) All liabilities, duties, responsibilities,

authorities, and powers related to a utility tunnel as provided in

section 14a and any money in the straits protection fund shall

transfer to the corridor authority board upon the appointment of

the members of the corridor authority board under section 14b(2).

The transfer of duties, responsibilities, authorities, powers, and

money described in this subsection does not require any action by

the Mackinac bridge authority or any other entity. The corridor

authority board shall exercise its duties independently of the

state transportation department and the Mackinac bridge authority.

     (2) The corridor authority board shall provide a report to the

Mackinac bridge authority and the director of the state

transportation department at least 1 time per year regarding

aspects of the utility tunnel that could affect the Mackinac bridge

authority, including, but not limited to, the progress of

construction and utility leasing.

     (3) The operation of a utility tunnel, including, but not

limited to, the leasing of space in the utility tunnel to a

utility, is not competition with the bridge.

     (4) Except as provided in subdivision (a), no later than

December 31, 2018, the Mackinac Straits corridor authority shall

enter into an agreement or a series of agreements for the

construction, maintenance, operation, and decommissioning of a

utility tunnel, if the Mackinac Straits corridor authority finds

all of the following:

     (a) That the governor has supplied a proposed tunnel agreement

to the Mackinac Straits corridor authority on or before December

21, 2018. If the governor has not supplied a proposed tunnel

agreement to the Mackinac Straits corridor authority on or before

December 21, 2018, the Mackinac Straits corridor authority shall

act on the proposed tunnel agreement no later than 45 days after

the date the proposed agreement is presented.

     (b) That the proposed tunnel agreement allows for the use of

the utility tunnel by multiple utilities, provides an option to

better connect the Upper and Lower Peninsulas of this state, and

provides a route to allow utilities to be laid without future

disturbance to the bottomlands of the Straits of Mackinac.

     (c) That the proposed tunnel agreement requires gathering of

geotechnical information before construction to ensure that

construction of a utility tunnel is feasible.

     (d) That the proposed tunnel agreement provides the Mackinac

Straits corridor authority with a mechanism to ensure that a

utility tunnel is built to sufficient technical specifications and

maintained properly to ensure a long asset life and secondary

containment for any leak or pollution from utilities using the

tunnel.

     (e) That the proposed tunnel agreement does not require any

obligation of funds that is inconsistent with this act, and that

the proposed tunnel agreement provides a mechanism under which all

costs of construction, maintenance, operation, and decommissioning

of the utility tunnel are borne by a private party and not by the

Mackinac Straits corridor authority, its predecessor, or a

successor. This subdivision does not prevent the expenditure of

money from the straits protection fund for the cost of independent

oversight of the utility tunnel or the leasing of space in the

utility tunnel to publicly-owned entities.

     (f) That the proposed tunnel agreement does not require the

use of the power of eminent domain.

     (g) That the proposed tunnel agreement does not exempt any

entity that constructs or uses the utility tunnel from the

obligation to obtain any required governmental permits or approvals

for the construction or use of the utility tunnel.

     (h) That the proposed tunnel agreement does not exempt an

entity using the utility tunnel from the payment of a tax or

similar obligation.

Senate Bill No. 1197 as amended December 11, 2018

     (i) That the proposed tunnel agreement does not require the

Mackinac Straits corridor authority to bring or defend a legal

claim for which the attorney general is not required to provide

counsel.

     (j) That the proposed tunnel agreement requires that for any

leasing of space for facilities for the transmission of data and

telecommunications that the Mackinac bridge authority shall be

reimbursed for any and all loss of net profit from the leasing of

space for facilities for the transmission of data and

telecommunications.

[(k) That the proposed tunnel agreement requires the development of a plan on how to engage this state's labor pool in the project, including the means and methods for recruitment, training, and utilization.]

     (5) If the attorney general declines to represent the Mackinac

bridge authority or the Mackinac Straits corridor authority in a

matter related to the utility tunnel, the attorney general shall

provide for the costs of representation by an attorney licensed to

practice in this state chosen by the Mackinac bridge authority or

the Mackinac Straits corridor authority, as applicable. As used in

this subsection, "matter related to the utility tunnel" includes,

but is not limited to, 1 or more of the following:

     (a) A claim seeking a judicial determination that the tunnel

agreement is legally invalid.

     (b) A claim seeking to enjoin performance under the tunnel

agreement.

     (c) A claim challenging the validity of any governmental

approval or permit granted based upon an application submitted

singly or jointly by the Mackinac Straits corridor authority.

     (d) A claim challenging a governmental entity's denial of a

governmental approval or permit submitted singly or jointly by the

Mackinac Straits utility tunnel authority.

     (e) A claim challenging the right to use any land of this

state for which the Mackinac bridge authority or the Mackinac

Straits corridor authority was granted the right to use.

     (f) A claim alleging a failure to perform under the tunnel

agreement that limits 1 of the following:

     (i) The use of the utility tunnel.

     (ii) The ability to operate the utility infrastructure within

the utility tunnel, if the utility is in full compliance with the

terms of a lease granted by the Mackinac Straits corridor

authority.

     (g) A claim challenging the validity of or seeking to enjoin

the issuance of any approval regarding the utility tunnel.

     (6) Any administrative functions of the Mackinac Straits

corridor authority shall be performed under the direction and

supervision of the state transportation department.

     Sec. 14e. (1) Neither the Mackinac bridge authority nor the

Mackinac Straits corridor authority may pay or obligate any money

or assets related to the utility tunnel except money that is

deposited into the straits protection fund or any escrow or reserve

fund created under the tunnel agreement. This state, a state

official, a state-related entity, the Mackinac bridge authority or

an agent of the Mackinac bridge authority, the Mackinac Straits

corridor authority or an agent of the Mackinac Straits corridor

authority, or any other legal, financial, or other expert providing

advice to the Mackinac bridge authority or the Mackinac Straits

corridor authority shall not enter into an agreement for the

payment of money from any source other than the straits protection

fund or any escrow or reserve fund created under the tunnel

agreement. This subsection does not restrict the right of the

Mackinac bridge authority or the Mackinac Straits corridor

authority to utilize any property rights granted to the Mackinac

bridge authority or the Mackinac Straits corridor authority by this

state or a private property owner.

     (2) This state, a state official, a state-related entity, the

Mackinac bridge authority or an agent of the Mackinac bridge

authority, the Mackinac Straits corridor authority or an agent of

the Mackinac Straits corridor authority, or any other legal,

financial, or other expert providing advice to the Mackinac bridge

authority or the Mackinac Straits corridor authority shall not

enter into an agreement to accept any liability for or resulting

from the installation, maintenance, operation, or decommissioning

of any utility equipment owned by the user of a utility tunnel,

including, but not limited to, a pipeline, electrical transmission

line, or broadband cable within the utility tunnel.