Bill Text: MI HB5831 | 2011-2012 | 96th Legislature | Engrossed
Bill Title: State agencies (existing); technology, management, and budget; funding and approval of capital outlay project; clarify. Amends secs. 115, 221, 237a, 241, 242, 246, 248, 249 & 393 of 1984 PA 431 (MCL 18.1115 et seq.) & adds secs. 221a, 238 & 242a.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2012-12-27 - Assigned Pa 430'12 With Immediate Effect [HB5831 Detail]
Download: Michigan-2011-HB5831-Engrossed.html
HB-5831, As Passed Senate, December 13, 2012
SENATE SUBSTITUTE FOR
HOUSE BILL NO. 5831
A bill to amend 1984 PA 431, entitled
"The management and budget act,"
by amending sections 115, 221, 237a, 241, 242, 246, 248, 249, and
393 (MCL 18.1115, 18.1221, 18.1237a, 18.1241, 18.1242, 18.1246,
18.1248, 18.1249, and 18.1393), sections 115, 221, 242, 246, 248,
and 393 as amended and section 237a as added by 1999 PA 8 and
section 241 as amended by 2010 PA 22, and by adding sections 221a,
238, and 242a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 115. (1) "Institution of higher education" or
"university" means a state supported 4-year college or university.
(2) "JCOS" means the joint capital outlay subcommittee of the
appropriations committees.
(3) Except as used in sections 284 to 292, "record" means a
public record as defined in section 2 of the freedom of information
act, 1976 PA 442, MCL 15.232.
(4) "State agency" means a department, board, commission,
office, agency, authority, or other unit of state government. State
agency does not include an institution of higher education or a
community college or, for purposes of article 2 or 3, the
legislative branch of government. For purposes of article 2 or 3,
except for those sections pertaining to the authorization,
planning, construction, and funding of a capital outlay project,
including construction of a facility to house offices or functions
necessary for operation of the judicial branch of government, state
agency does not include the judicial branch of government.
(5) "Unit of local government" means a political subdivision
of this state, including school districts, community college
districts, intermediate school districts, cities, villages,
townships, counties, and authorities, if the political subdivision
has as its primary purpose the providing of local governmental
service for citizens in a geographically limited area of the state
and has the power to act primarily on behalf of that area.
Sec. 221. (1) The director may provide for the rental and
lease of land and facilities for the use of state agencies in the
manner provided by law. The rentals and leases shall not be
effective unless approved by the board.
(2)
If a project costs more than $1,000,000.00 and consists of
less
than 25,000 gross square feet, the department shall notify the
joint
capital outlay subcommittee in writing of its intent to
proceed
with such a facility. The notice shall be given 30 days
before
the lease contract providing for the proposed constructions
is
entered into.
(2) (3)
If the director proposes to lease
space or a facility
which
meets either of the following criteria for which the annual
base cost of the proposed lease is more than $500,000.00, approval
of the joint capital outlay subcommittee is required prior to board
approval. :
(a)
The space or facility exceeds 25,000 gross square feet.
(b)
The annual base cost of the proposed lease is more than
$500,000.00.
(3) The department shall provide notification to the JCOS and
to the fiscal agencies within 5 business days of rental agreements
entered into in which the base cost is more than $500,000.00.
(4) For the purposes of this section, the renewal of an
existing lease will require the approval of the joint capital
outlay subcommittee if the renewal results in changes to the lease
that would cause it to meet the requirements outlined in subsection
(3).(2).
(5) The department may grant easements, upon terms and
conditions the board determines are just and reasonable, for
highway and road purposes, and for constructing, operating, and
maintaining pipelines or electric, telephone, telegraph,
television, gas, sanitary sewer, storm sewer, or other utility
lines including all supporting fixtures and other appurtenances
over, through, under, upon, and across any land belonging to this
state, except lands under the jurisdiction of the department of
natural resources, the department of military and veterans affairs,
or the state transportation department.
(6) The department shall determine annually the prevailing
market rental values of all state owned office facilities and
private facilities which provide housing for state employees. The
rental values determined pursuant to this subsection shall not be
effective unless approved by the board. The renting, leasing, or
licensing
of state owned state-owned
land and facilities to private
and public entities shall be at prevailing market rental values or
at actual costs as determined by the director.
(7) The department shall charge state agencies for building
occupancy
in state owned state-owned
facilities under the
jurisdiction of the department. The rates to be charged for
building occupancy shall be coordinated with the budget cycle. The
rates shall reflect the actual cost for occupancy of the
facilities.
Sec. 221a. (1) The department shall provide the JCOS and the
fiscal agencies with the following reports:
(a) By November 1 of each year, for state-owned space as of
September 30 of that year, all of the following:
(i) The department occupying or using the space.
(ii) The building location, including street address, city or
township, and county.
(iii) The type of building, such as office, warehouse, garage,
storage, or other use.
(iv) The square footage.
(v) The occupancy and usage of space compared to total space
available.
(vi) The condition of facility and estimated future special
maintenance costs.
(b) By November 1 of each year, for privately owned state-
leased space as of September 30 of that year, all of the following:
(i) The department occupying or using the space.
(ii) The lease number.
(iii) The building location, including street address, city or
township, and county.
(iv) The type of building, such as office, warehouse, garage,
storage, or other use.
(v) The name and address of lessor.
(vi) The square footage and net square footage rate.
(vii) The occupancy and usage of space compared to total space
available.
(viii) The monthly and annual cost.
(ix) The date the lease starts and expires.
(x) The options and services.
(xi) The total monthly and annual cost for all leases described
in this subdivision.
(c) At least 2 weeks prior to a state lease proposal being
included on a JCOS meeting agenda for review and approval, all of
the following:
(i) The lease number.
(ii) The department.
(iii) The location.
(iv) The lessor.
(v) The total square footage and use of space.
(vi) Lease costs, to include annual costs of lease, monthly
costs of lease, cost per square foot, and increases, if any, from
prior lease to new lease.
(vii) The costs to renovate.
(viii) The costs for utilities.
(ix) The management fees.
(x) The amount paid for ad valorem property taxes.
(xi) The operating costs.
(xii) The lease terms.
(xiii) If an option to purchase is included, the terms of the
offer to purchase and rationale for not funding construction
through the state building authority.
(xiv) The existing space, including years in existing location,
cost, terms of the lease, and disadvantages related to continuing
in current location.
(xv) The bid process, including an overview including dates,
number of proposals submitted, cost range of proposals, comparable
market rates, and an explanation if lowest bid was not accepted.
(xvi) A cost comparison listing the total square footage, base
cost per square foot, annual lease cost, cost for utilities, taxes,
operating costs, and total annual cost for the proposed lease and
the current lease, and show the difference in costs.
(d) Not later than 45 days after the close of the fiscal year,
the status of all active planning and construction projects
approved by JCOS and financed through the state building authority
or state general fund/general purpose revenues, including all of
the following:
(i) The name of each project.
(ii) The applicable appropriation acts.
(iii) The appropriation year and account numbers.
(iv) The total authorized cost for the project and state
authorized share.
(v) The unencumbered balance remaining in each account.
(vi) The expiration date of authorization.
(vii) The current project status: planning, preconstruction,
construction, or postconstruction.
(viii) The estimated completion date.
(ix) As applicable, the qualifying carryforward exemption under
section 248(4) or (6).
(2) This section is in effect until March 31, 2015.
(3) As used in this section, "project" includes appropriation
line items made for purchase of real estate.
Sec. 237a. (1) This section pertains to capital outlay
projects for community colleges and universities.
(2) The department shall review documents associated with
community college and university capital outlay projects for which
an appropriation or other authorization has been made.
(3) The department shall provide architectural and
professional engineering review of documents including designs,
plans, and change orders at each stage of the project to ensure
that the project or facility is in compliance with approved
program, appropriation, and capital outlay requirements.
(4) The department shall review the award and selection of
architects, professional engineers, construction managers, and
other design or construction professional service contractors.
(5) The department shall do all of the following:
(a) Review the construction bid.
(b) Review monthly reports to ensure appropriate construction
progress, evaluate change orders, and watch for potential problems.
(c) Respond to college and university requests for assistance
on the capital outlay process, contractor issues, and other capital
outlay related issues.
(d) Provide for field checks and audits throughout the project
in order to meet the trustee requirements of the state building
authority.
(6) The department may require that community colleges and
universities self-managing construction of a capital outlay project
enter into an agreement with the department in which the community
college or university agrees to construct the project within the
total authorized cost, design, and program scope established by the
legislature. This agreement shall include, but is not limited to,
certification from the community college or university that the
operating costs resulting from the capital outlay project are the
responsibility of the community college or university. The
agreement may include other requirements as identified by the
department that are necessary to complete the project and fulfill
the project oversight requirements of this act.
(7) The department retains the authority and fiduciary
responsibility normally associated with the prudent maintenance of
the public's financial and policy interests relative to the state-
financed construction projects managed by a community college or
university. The director may take appropriate action to bring the
capital outlay project to conclusion if the public's financial and
policy interests are in jeopardy and there is a failure on the part
of a community college or university to adhere to the requirements
of this act. The director shall provide notice to the joint capital
outlay subcommittee within 10 days of exercising authority under
this subsection.
(8) (6)
The department may charge a fee for
the services
described in this section at a rate not to exceed actual costs.
(9) (7)
In the event that a college or university
chooses to
have the department provide for the complete administration of a
capital outlay project, then the provisions of section 237 apply to
the project.
(10) (8)
Prior to state building authority
financing, the
department shall provide final review of the capital outlay project
to ensure compliance with the authorized program, plans, and
specifications.
Sec. 238. (1) Universities and community colleges shall report
on all contracts entered into for new construction of self-funded
projects costing in excess of $1,000,000.00. New construction
includes land or property acquisition, remodeling and additions,
maintenance projects, roads, landscaping, equipment,
telecommunications, utilities, and parking lots and structures.
Reports shall be submitted to the JCOS, the fiscal agencies, and
the state budget office on or before June 30 and December 31 of
each year. Each report shall include, but not be limited to, the
following information on all self-funded capital projects commenced
for the immediately preceding 6-month period:
(a) Description of the project, to include purpose, need,
justification, and start and completion dates.
(b) Statement of gross estimated capital improvement or
project costs including a breakdown of land costs, site development
and demolition costs, construction costs, costs of furnishings and
equipment, fees, and any other special costs.
(c) Listing of all sources of funding for project costs to
include borrowed funds, university or college funds, gifts, grants,
federal funds, private funds, state funds, student fees or tuition,
any other funds, and any combination of funds.
(d) Statement of the impact of project financing on student
tuition.
(2) If changes occur in any information provided in a
previously submitted report, those changes shall be included in the
next report issued. Failure to comply with this section will result
in penalties as provided for in the higher education and community
colleges appropriations bills. The university of Michigan hospital
and health center is excluded from this reporting requirement.
Sec. 241. (1) Except for the contracts permitted in section
240, a contract shall not be awarded for the construction, repair,
remodeling, or demolition of a facility unless the contract is let
pursuant to a bidding procedure that is approved by the board. The
department shall issue directives prescribing procedures to be used
to implement this section. The procedures shall require a
competitive solicitation in the award of any contract for
construction, repair, remodeling, or demolition of a facility.
(2) The department may award or approve the award, if the
board approves, of construction contracts to construct a project
for which the director is the agent and may expend, for the
purposes and in the manner set forth, the amounts appropriated. The
director is not the agent for a community college or institution of
higher education, but may act in that capacity upon the specific
request of a community college or institution of higher education.
(3) In awarding a contract under this section, the department
shall give a preference of up to 10% of the amount of the contract
to a qualified disabled veteran, as defined in section 261. If the
qualified disabled veteran otherwise meets the requirements of the
contract solicitation and with the preference is the lowest bidder,
the department shall enter into a construction contract with the
qualified disabled veteran under this act. If 2 or more qualified
disabled veterans are the lowest bidders on a contract, all other
things being equal, the qualified disabled veteran with the lowest
bid shall be awarded the contract under this act.
(4) Subject to subsection (3), for projects funded in whole or
part with state funds, the construction contract award shall be
made to the responsive and responsible best value bidder. As used
in this subsection, "responsive and responsible best value bidder"
means a bidder who meets all the following:
(a) A bidder who complies with all bid specifications and
requirements.
(b) A bidder who has been determined by the department to be
responsible by the following criteria:
(i) The bidder's financial resources.
(ii) The bidder's technical capabilities.
(iii) The bidder's professional experience.
(iv) The bidder's past performance.
(v) The bidder's insurance and bonding capacity.
(vi) The bidder's business integrity.
(c) A bidder who has been selected by the department through a
selection process that evaluates the bid on both price and
qualitative components to determine what is the best value for this
state. Qualitative components may include, but are not limited to,
all of the following:
(i) Technical design.
(ii) Technical approach.
(iii) Quality of proposed personnel.
(iv) Management plans.
Sec.
242. (1) This section applies to a project authorized
pursuant
to an appropriation act.
(1) (2)
State agencies, community colleges,
and universities
shall
develop 5-year capital outlay requests, plans, which shall
include
the need for remodeling and renovations. identify capital
outlay needs, including new construction, or the addition,
renovation, adaptive reuse, and improvement of existing facilities.
For state agencies, community colleges, and universities, the 5-
year
capital outlay requests plans
shall also include the need for
special
maintenance. These requests plans
shall be submitted
annually
in electronic format to the department, and to members of
the JCOS, and to the fiscal agencies not later than November 1 of
each year.
(2) (3)
The department and the JCOS shall
review state agency,
community
college, and university capital outlay requests
plans.
The
department and the JCOS shall prioritize requests. and
The
department shall include the department-recommended requests in the
annual
executive budget recommendation. If a state agency,
community college, or university subsequently modifies a request,
the revision shall be submitted to the department, members of the
JCOS, and the fiscal agencies.
(3) The department and the chairperson and vice-chairperson of
the JCOS shall review and evaluate by March 1 of each year capital
outlay project requests received from community colleges,
universities, and state agencies. All of the following shall be
considered when reviewing and evaluating project requests:
(a) Investment in existing facilities and infrastructure.
(b) Life and safety deficiencies.
(c) Occupancy and utilization of existing facilities.
(d) Integration of sustainable design to enhance the
efficiency and operations of the facility.
(e) Estimated cost.
(f) Institutional support.
(g) Estimated operating costs.
(h) Impact on tuition, if any.
(i) Impact on job creation in this state.
(j) History of prior appropriations received by the
institution through the capital outlay process.
(4)
Each recommended request included in the executive budget
shall
include sufficient state funds for state agency projects and
institution
funds for college and university projects to provide
for
professionally developed program statements and schematic
plans.
The request for program development
and schematic planning
must be approved by the JCOS and the legislature through the
appropriation process.
(5) Program statements and schematic planning documents shall
be reviewed by the department and, when the review is completed,
shall be submitted to the JCOS as either approved or not approved.
(6) Upon review and approval by the JCOS, the JCOS and the
legislature may authorize the project for final design and
construction with a line-item appropriation in an appropriation
bill. The appropriations bill shall include appropriations for
projected state building authority rental payments associated with
the projects that are authorized for construction. The
authorization shall include the legislative lease approval required
for state building authority financing.
(7) Preliminary plans shall be submitted to the department for
review and approval. The department shall review and approve final
plans
to be prepared for bidding. Bid A
summary of bid results
shall be submitted to the JCOS.
(8) The department shall provide for review and oversight of
capital outlay projects financed either in total or in part by the
state building authority pursuant to the provisions of sections 237
and 237a.
(9) Appropriations made for studies and initial plans shall
not be considered a commitment on the part of the legislature to
appropriate funds for the completion of plans or construction of
any project based on the studies or planning documents.
Sec. 242a. The JCOS and department shall annually review the
outstanding obligations of the state building authority, as well as
the state's lease obligations for previously constructed and state
building authority financed projects that provide revenue to the
state building authority to retire outstanding bonds.
Sec.
246. (1) The release of allocations may be approved when
the legislature has specified either a total authorized cost or has
appropriated an amount sufficient to complete the designated
project. The authorized cost and program scope of state agency,
community college, and university projects shall only be
established
or revised by specific reference in a budget act. , by
concurrent
resolution adopted by both houses of the legislature, or
inferred
by the total amount of any appropriations made to complete
plans
and construction.
(2)
Expenditures under a capital outlay budget act shall be
authorized
when the release of the appropriation is approved by the
board.
The board shall approve the release of construction
appropriations
when the director certifies that a project can be
accomplished
within the appropriation or authorization and that the
project
is in compliance with this act. For each project certified,
the
board, upon the further recommendation of the director, shall
approve
the release of only those amounts required to complete the
project
according to the recommended purpose and scope as provided
in
an appropriation act. Contracts or other commitments shall not
be
incurred or obligated which will result in the completion of a
project
which exceeds this purpose and scope. A state agency,
community
college, or institution of higher education shall not
make
any commitments for a project until after the release of the
appropriation
pursuant to this act. The board may approve the
release
of a part of any appropriation for the purpose of preparing
the
planning or bidding documents or for investigations which may
be
necessary to determine whether or not the project can be
completed
within the appropriation.
Sec. 248. (1) This section applies to all state agency,
community college, and university capital outlay projects
appropriated
in any budget act. This section does not apply to lump
sums
other than planning projects. Projects
authorized prior to the
amendatory act that added this sentence shall be carried forward
consistent with the provisions of this section in effect prior to
the date of the amendatory act that added this sentence.
(2) Appropriations made in any budget act for a planning
project shall not lapse to the fund from which appropriated at the
end of the fiscal year, but shall continue until the purposes for
which the sums were appropriated are completed. However, planning
authorization
for each project which has been
authorized for
planning
for 3 years or more and which has
not been authorized for
final design and construction in an appropriation act shall be
terminated 24 months after the last day of the fiscal year in which
the authorization was originally made, unless the project is
specifically reauthorized in a budget act. The termination of
authorization in the immediately preceding sentence does not apply
if program and schematic planning documents are submitted by
community colleges and universities within the time frame specified
in the immediately preceding sentence.
(3) Appropriations made in any budget act for final design and
construction shall not lapse to the fund from which they are
appropriated at the end of the fiscal year, but shall continue
until the purposes for which the sums were appropriated are
completed. However, final design and construction authorization for
each
project that has been authorized for final design and
construction
for 3 years or more and where
construction has not
commenced shall be terminated 36 months after the last day of the
fiscal year in which the authorization was originally made, unless
the project is specifically reauthorized in a budget act.
(4)
Except as otherwise provided in this section, the balance
of
any capital outlay project other than a planning project shall
not
lapse at the end of the fiscal year for which the appropriation
was
made, but shall continue for not more than 2 fiscal years
occurring
after the fiscal year for which the appropriation for the
project
is made.
(4) (5)
A capital outlay project may be
continued beyond 3
fiscal
years the limitations
contained in this section if the bid
for
the start of construction of the project is awarded before the
end
of the second fiscal year occurring after the fiscal year for
which
the appropriation for the project is made.1 or more of the
following conditions apply:
(a) A bid for the start of construction of the project is
awarded or construction of the project has commenced.
(b) A capital outlay project for the purchase of property in
which a contract is entered into, but the acquisition is not
completed. Only the amount necessary to complete the purchase of
property pursuant to the contract shall be carried forward.
(c) A federal grant award is pending release.
(d) The project is subject to legal action, the balance shall
lapse 30 days after the legal action is settled, or 30 days after a
final order is entered, whichever is later.
(e) The unobligated balance of the appropriations for the
project may continue for 12 months after a project is substantially
completed.
(f) Not later than 45 days after the conclusion of the fiscal
year, the director shall notify the JCOS and the fiscal agencies of
planning and construction authorizations that will continue beyond
limitations specified under this section.
(6)
A capital outlay project which is for purchase of property
may
be continued beyond 3 fiscal years if a contract to purchase
property
is entered into before the end of the second fiscal year
occurring
after the fiscal year for which the appropriation for the
purchase
is made but only the amount necessary to complete the
purchase
of the property pursuant to the contract shall be carried
forward.
(7)
A capital outlay project may be continued beyond 3 fiscal
years
if a federal grant award is pending and the federal rules
preclude
the award of the bid before the end of the second fiscal
year
occurring after the fiscal year for which the appropriation
for
the project was made, but shall not be continued beyond an
additional
year unless the bid for the start of construction of the
project
is awarded.
(8)
If the bid for the start of construction of the project is
awarded
before the appropriations for the project are scheduled to
lapse
pursuant to subsection (4) or (6), the unobligated balance of
the
appropriations for the project shall not lapse but shall
continue
for 23 months after a project is substantially completed.
(9)
If a capital outlay project is subject to a legal action,
the
balance shall lapse pursuant to subsections (2) to (8), or 30
days
after the legal action is settled, or 30 days after a final
order
is entered, whichever is later.
(5) (10)
An unexpended balance which is to
lapse pursuant to
this section shall lapse to the fund from which the appropriation
is made.
(6) (11)
A grant or grant-in-aid
appropriated for the
demolition, acquisition, construction, repair, or maintenance of
capital assets shall not be reduced, adjusted, delayed, impounded,
lapsed, or otherwise altered by the director for any purpose
without
legislative approval and shall be carried forward until
awarded,
in full, to the recipient of the appropriation consistent
with
legislative intent.until the
work is completed or for 36
months after the last day of the fiscal year in which the
construction appropriation was originally made, whichever comes
first.
Sec. 249. (1) If matching revenues for a capital outlay
project are received in an amount less than the appropriations
contained in a budget act, the state portion of the appropriation
shall be reduced in proportion to the amount of matching revenue
received.
(2) A state agency, community college, or university shall
take the steps necessary to make available federal or other money
that may be available and to use all or part of the appropriations
to meet matching requirements that are considered to be in the best
interest of this state. However, the purpose, scope, and total
estimated cost of a project shall not be altered to meet the
matching requirements. Any federal matching revenues received to
support the construction of a project shall be applied to the total
authorized project cost, with state, community college, or
university financing shares proportionately adjusted.
Sec. 393. (1) Administrative transfers of appropriations
within any department to adjust for current cost and price
variations from the enacted budget items, or to adjust amounts
between federal sources of financing for a specific appropriation
line item, or to adjust amounts between restricted sources of
financing for a specific appropriation line item, or to pay court
judgments, including court approved consent judgments, or to pay
all settlements and claims may be made by the state budget director
not less than 30 days after notifying each member of the senate and
house appropriations committees. Administrative transfers shall not
include adjustments that have policy implications or that have the
effect of creating, expanding, or reducing programs within that
department. Those transfers may be disapproved by either
appropriations committee within the 30 days and, if disapproved
within that time, shall not be effective.
(2) A transfer of appropriations within any department other
than an administrative transfer pursuant to subsection (1) shall
not be made by the state budget director unless approved by both
the senate and house appropriations committees. If the state budget
director does not approve transfers adopted by both the senate and
house appropriations committees under this subsection, the state
budget director shall notify each member of both the senate and
house appropriations committees of his or her action within 15 days
after the senate and house appropriations committees' final
approval.
(3) A transfer approved by the appropriations committees shall
not be effective unless it is identical in terms of funding sources
and dollar amounts.
(4) A transfer approved pursuant to this section shall
constitute authorization to transfer the amount recommended and
approved. However, the amount shall be reduced by the state budget
director to be within the current unobligated amount of the
appropriation.
(5) Capital outlay appropriations may be transferred from a
state agency, community college, or institution of higher education
to provide necessary funds for the completion of an authorized
capital
outlay project. , if the transfer is approved by JCOS and
the
appropriations committees. Operating
appropriations shall not
be transferred into an existing capital outlay account.
(6) Transfers shall not be authorized under any of the
following circumstances:
(a) To create a new line-item appropriation or to create a new
state program.
(b) To or from an operating appropriation line-item that did
not appear in the fiscal year appropriation bills for which the
transfer is being made.
(c) To or from a work project as designated under section
451a.
(d) Between state governmental funds.
(7) Transfers of appropriations for financing sources shall be
made concurrently with related transfers of appropriations for line
expenditure items.
