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HB 6037

Transportation: funds; allocation of federal funding; modify. Amends sec. 10o of 1951 PA 51 (MCL 247.660o).

2025-2026 Regular Session Introduced by Tom Kunse

HB 6037 would require 23%–27% of certain federal highway funds be allocated to local jurisdictions, creating a formal exchange mechanism with the state trunk line fund to boost loc

bill electronically reproduced 06/03/2026
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Bill Summary · HB 6037

Summary of HB 6037 (Michigan, 2025-2026)

Purpose and intent

HB 6037 would amend Michigan’s transportation financing framework, specifically targeting how federal highway funds allocated to the state are distributed to local jurisdictions. The bill aims to ensure a defined portion of DOT-FHWA highway research, planning, and construction federal funds are allocated to local programs, and it establishes a structured exchange mechanism between the state trunk line fund and local agencies for federal aid obligation authority. The overarching goal is to promote local control and investment in transportation projects while maintaining state-level fiscal protections and minimum program requirements.

Key provisions and changes

  • Allocation to local programs (Sec. 10o(1)): 23% to 27% of certain federal funds appropriated to Michigan for road and bridge construction must be allocated to local jurisdictions after:

    • deductions for funds allocated at the federal level to the state/local levels and those allocated via competitive processes; and
    • excluding specified federal aid types (e.g., congestion mitigation/air quality funds, federal bridge funds, transportation enhancement funds, discretionary/congressionally designated funds).

  • Consistency with law (Sec. 10o(3)): Distributions to eligible local agencies must comply with state and federal law.

  • Intended average funding level (Sec. 10o(4)): The bill expresses an intent for local allocations to average 25% of applicable funds per fiscal year through 2000, with adjustments for subsequent years and any state buyout agreements.

  • State trunk line fund exchanges (Sec. 10o(5)-(7)): The department may exchange state trunk line fund money for federal aid obligation authority allocated to local road agencies, subject to federal law and rules. Subsection (6) outlines priorities if funds must be reduced (match federal aid first, then debt service and minimum state program, then other functions). If reductions occur, the department must notify key legislative leadership.

  • Minimum exchange amounts (Sec. 10o(8)): Establishes baseline exchanges from the state trunk line fund:

    • FY 2023: $25,000,000
    • FY 2024: $35,000,000
    • FY 2025 onward: $45,000,000 (rising to $50,000,000 in FY 2027 and later, with adjustments if federal aid increases)

  • Application and priority (Sec. 10o(9)-(12)): Local agencies may apply for state money in exchange for federal obligation authority for designated projects ( MPO/TIP or rural TIP). Applications are prioritized by receipt date if funds are oversubscribed. State money is exchanged at a rate of 90 cents per dollar of federal obligation authority.

  • Use and timing (Sec. 10o(12)-(13)): Priority is given to the original project; any excess funds can be used for other eligible projects or returned. Expenditures must be reported, and state money must be spent within 3 years of the exchange, with contingencies for project completion.

  • Compliance and contracts (Secs. 10o(14)-(15)): Local agencies receiving funds must follow federal wage/benefit requirements (FHWA Form 1273), and contracts must make workers third-party beneficiaries of these requirements.

  • Definitions (Sec. 10o(16)): Defines “federal aid obligation authority” and “minimum state-funded program,” clarifying how funds and obligations relate to the exchange mechanism.

Who is affected

  • Local road agencies (cities, villages, counties, metropolitan planning organizations) that manage eligible local projects and receive portions of federal funds via the local program allocations.
  • State transportation authorities (Michigan Department of Transportation) responsible for administering the trunk line fund exchanges and ensuring compliance with federal standards.
  • State and local policymakers (legislative and transportation committees) who would receive notices and oversee budgetary implications, reporting, and approvals.

Procedural and timeline aspects

  • The bill outlines a phased funding path beginning with specific monetary minimums for exchange (FY 2023–FY 2024, increasing in later years) and adjusting for any increases in federal aid.
  • Local applications for exchanged funds would follow published schedules and be prioritized by date if demand exceeds supply.
  • Expenditure and reporting requirements are explicit, including a 3-year expenditure window and mandatory reporting to asset management systems.

Note: This summary reflects the bill language as introduced and may be subject to amendments during the legislative process.

Compiled from official sources — confirm details with the bill’s official record.

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