Legislative Analysis
Phone: (517) 373-8080
LOCAL AGENCY DISASTER RELIEF PROGRAM
http://www.house.mi.gov/hfa
House Bills 5944 and 5945 as introduced Analysis available at
Sponsor: Rep. Nate Shannon http://www.legislature.mi.gov
Committee: Transportation, Mobility and Infrastructure
Complete to 11-11-24
SUMMARY:
House Bill 5945 would amend 1951 PA 51 (“Act 51”), which governs state transportation
appropriations, to establish a local agency disaster relief program and the Local Agency
Disaster Relief Board in the Michigan Department of Transportation (MDOT) to assist in
repairing or replacing a local road agency’s infrastructure following a local or state-level
declared emergency. 1 The bill also would create the Local Agency Disaster Relief Board Fund
in the state treasury and redirect up to $5.0 million each year from a current Michigan
Transportation Fund (MTF) earmark for credit to the fund. House Bill 5944 would update a
citation reference in the Income Tax Act to account for a change made by HB 5945. Neither
bill could take effect unless both were enacted. The bills are described together below.
Local agency disaster relief program
House Bill 5945 would create the local agency disaster relief program in MDOT. The program
would have to provide financial assistance to assist in repairing or replacing a local road
agency's infrastructure following a local or state-level declared emergency as provided in the
bill and in accordance with the policies, criteria, agreements, or contracts of the Local Agency
Disaster Relief Board. The program would have to provide funding to local road agencies for
one or more of the following:
• Restoring or replacing a public local road, bridge, or other physical transportation
infrastructure to the condition existing before the state-level declared emergency event
or to the current state and federal standards as recognized in board policy, if the local
road agency has exhausted all other federal and state funding sources.
• Completing engineering and design to meet current standards.
• Purchasing land or construction easements required to construct the public road,
bridge, or physical transportation infrastructure.
• Conducting inspection and oversight necessary to ensure that performance standards
are met.
• Performing project administration necessary to ensure that financial accountability
standards are met.
To obtain funding, a local road agency would have to file a funding application with the Local
Agency Disaster Relief Board at any time as determined by the board, on a form approved by
the board that contains the information required by the board.
1
As used in the bill, the term local road agency would mean a county road commission or designated county road
agency or city or village that is responsible for the construction or maintenance of public roads in Michigan under Act
51. There are 83 county road agencies and 531 city or village road agencies in Michigan.
House Fiscal Agency Page 1 of 4
 Local Agency Disaster Relief Board
House Bill 5945 would create the Local Agency Disaster Relief Board in MDOT. The board
would consist of all of the following members:
• Three voting members appointed by the County Road Association of Michigan.
• Two voting members appointed by the Michigan Municipal League.
• One voting member who is an engineer, appointed jointly by the County Road
Association of Michigan and the Michigan Municipal League.
• One nonvoting member appointed by MDOT.
• One nonvoting member appointed by the Department of Environment, Great Lakes,
and Energy (EGLE).
• One nonvoting member appointed by the Department of State Police.
The first members of the board would have to be appointed by not later than October 1, 2025.
Successor members (after a term ends or if there is a vacancy) would have to be appointed
jointly by the County Road Association of Michigan and the Michigan Municipal League (for
a voting member) or by the original appointing department (for a nonvoting member).
Members of the board would serve for terms of two years or until a successor is appointed,
whichever is later, except that some of the initial appointments would be for three years in
order to stagger the terms.
The member appointed by MDOT would call the board’s first meeting, at which the board
would have to elect a chairperson and other officers it considers necessary or appropriate from
among its voting members. The board would have to meet at least quarterly. The chairperson
could call a special meeting in response to a local or state-level declared emergency that is of
a fiscal magnitude the board has established as actionable.
A majority of the voting members of the board would constitute a quorum, and a majority of
the voting members present and serving would be required for official action of the board.
The board would have to conduct its business in compliance with the Open Meetings Act, and
a writing prepared, owned, used, possessed, or retained by the board in the performance of an
official function would subject to the Freedom of Information Act.
Board members would serve without compensation but, subject to available funding, could
receive reimbursement for necessary travel and expenses consistent with applicable law and
the rules and procedures of the Civil Service Commission and the Department of Technology,
Management, and Budget or local road agency policies.
The governor could remove a member of the board for incompetence, dereliction of duty,
malfeasance, misfeasance, nonfeasance in office, or any other good cause.
The board could employ part-time or full-time managers or engineers and could contract with
a person, in accordance with its policies, to provide expertise or to perform professional or
technical services, administrative assistance, or legal counsel. The board would determine the
duties of a manager, engineer, or other person employed under these provisions and would
have to require the person to maintain all necessary insurances.
House Fiscal Agency HBs 5944 and 5945 as introduced Page 2 of 4
 The board would have to establish policies, criteria, definitions, and timelines for funding a
repair or replace work project and a review process for considering funding applications. No
later than 180 days after receiving a funding application, the board would have to notify the
applicant in writing whether the funding application is approved in part or in entirety, or if the
funding application is rejected or remains pending for a specific reason. Before releasing
money from the program, the board would have to enter into an agreement with the funding
recipient.
Local Agency Disaster Relief Board Fund
House Bill 5945 would create the Local Agency Disaster Relief Board Fund in the state
treasury. The state treasurer would have to deposit in the fund money and other assets received
from any source, direct the investment of money in the fund, and credit to the fund interest and
earnings from those investments. MDOT would be the administrator of the fund for audit
purposes.
Up to $5.0 million annually could be deposited in the fund. The balance of the fund could not
exceed $50.0 million at the beginning of a fiscal year, excluding funds already obligated but
not spent. The bill would establish a new earmark of MTF revenue for credit to the fund.
Specifically, the bill would redirect $5.0 million each year from a current MTF earmark (three
cents of the motor fuel tax on gasoline) for credit to the fund. (Presumably the $5.0 million
transfer would not be made if the balance of the fund exceeds $50.0 million at the beginning
of a fiscal year, excluding funds already obligated but not spent.) The money in the fund would
not be subject to the restrictions of section 12(15) of Act 51.
The money in the fund would have to be expended by the Local Agency Disaster Relief Board
as provided in the bill. The board could approve the use of money in the fund for activities not
included in the program description, such as items not otherwise eligible for funding from a
federal or state disaster program or from federal or state matching funds, needed to restore a
public road, a bridge, drainage, or other facilities as allowed by law on a demonstrated need by
a local road agency.
Report
For each year in which the board receives funding applications under the bill, it would have to
report by October 1 on the use of money from the fund report by October 1 to the House and
Senate standing committees with primary jurisdiction over transportation issues and to the
House and Senate appropriation subcommittees on transportation. The report would have to
include at least all of the following:
• The number of funding applications received.
• The name of each local road agency that submitted a funding application.
• Whether each funding application was approved or denied.
• The amount of local match for each funding application that was granted.
• The individual and annual cumulative amount of money awarded under the bill,
including an identification of the purpose of the money awarded.
MCL 206.51d (HB 5944)
MCL 247.660 and 246.661 (HB 5945)
House Fiscal Agency HBs 5944 and 5945 as introduced Page 3 of 4
FISCAL IMPACT:
Section 10 of Act 51 establishes the MTF and directs the appropriation of MTF revenue. MTF
revenue is first allocated for administrative, statewide planning, collection costs, and for
various statutory categorical programs, including to the Comprehensive Transportation Fund
(CTF) for public transportation programs. The MTF balance, after these various allocations
and distributions, plus revenue from an earmark of Income Tax revenue and from an earmark
of the excise tax on recreational marijuana, is distributed for state and local road agency
highway programs as follows: 2
• 39.1% to the State Trunkline Fund (STF), for construction and preservation of the state
trunkline system and administration of MDOT.
• 39.1% to 83 county road commissions for county road systems
• 21.8% to 531 cities and villages for preservation of city/village streets
As described above, House Bill 5945 would redirect $5.0 million each year from a current
MTF earmark (three cents of the motor fuel tax on gasoline) for credit to the Local Road
Agency Disaster Relief Board Fund. The $5.0 million annual redirection of MTF revenue in
the Act 51 formula would result in the following reductions in ongoing MTF distributions:
• MTF distribution to the STF ($1,955,000).
• MTF revenue for distribution to county road agencies ($1,955,000).
• MTF distribution to cities and villages ($1,090,000).
The bill would authorize additional funding for those local specific road agencies that received
disaster relief funding under the program.
The bill would have no impact on MTF distributions to the CTF.
Administration of the program would require financial resources. The cost of program
administration cannot be readily estimated at this time.
The bill also authorizes the board to employ part-time or full-time managers or engineers, or
contract for professional or technical services, administrative assistance, or legal counsel. It is
not clear if these persons would be employed through the state classified civil service system
as classified employees or authorized as personal service contractors.
Legislative Analyst: Rick Yuille
Fiscal Analyst: William E. Hamilton
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
2
See https://www.house.mi.gov/hfa/PDF/Alpha/Fiscal_Brief_MTF_Distribution_Formula_to_LRA_Mar2024_Update.pdf
House Fiscal Agency HBs 5944 and 5945 as introduced Page 4 of 4


Statutes affected:
House Introduced Bill: 206.51