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SB 957

Transportation: funds; population threshold for certain grants; increase. Amends secs. 10e & 13c of 1951 PA 51 (MCL 247.660e & 247.663c).

2025-2026 Regular Session Introduced by Rosemary Bayer and 2 co-sponsors

Michigan SB 957 reorganizes and expands funding for transportation, creating the Neighborhood Roads Fund and Infrastructure Projects Authority Fund to direct more money to local br

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Bill Summary · SB 957

Overview

Senate Bill 957 (2025-2026, Michigan) seeks to amend sections 10e and 13c of 1951 PA 51 (the Michigan transportation funding framework). Introduced May 13, 2026, the bill is sponsored by Senators Victory, Bayer, and Bellino and referred to the Senate Committee on Transportation and Infrastructure. The measure appears to restructure funding priorities and allocations within the comprehensive transportation program and the neighborhood roads fund (local bridge/grade separation funding) while expanding the use of the infrastructure projects authority fund for targeted mobility investments.

Main purpose and intent

  • Reorder and clarify distribution priorities within the comprehensive transportation fund (CTF) and create a framework for ongoing administration of transportation programs.
  • Establish explicit, prescriptive funding flows from the neighborhood roads fund (a separate fund) to support local bridge repairs, grade separations, and other local transportation needs.
  • Create and govern the use of an infrastructure projects authority fund to support supplemental operating grants and qualified infrastructure investments, aligned with high-capacity mobility and regional transportation priorities.
  • Maintain or enhance support for transit operating and capital programs, intercity transportation, and local public transportation providers, with explicit thresholds and reporting requirements.

Key provisions and changes

  • Sec. 10e (comprehensive transportation fund priorities and public transportation funding)

    • Reaffirms the annual priority ordering for the CTF, including bond debt service, administration, and then discretionary public transportation operating and capital allocations.
    • Details operating grant formulas for urbanized areas and nonurbanized areas (based on population thresholds, with minimum federal/local match expectations and a requirement for preferential fares for seniors and people with disabilities).
    • Specifies reporting requirements (quarterly progress reports) and periodic adjustments/redistributions of CTF funds.
    • Sets aside for intercity passenger/freight transportation and public transportation development, with explicit minimums and line-item allocations (e.g., dedicated funding for specialized services, local bus capital, local bus new services, etc.).
    • Sets forth capital and operating expense guidelines, including phased funding for new local bus services (startup funding up to 100% initially, tapering funding over years), and caps on certain transportation plans.
    • Adds rules for demand actuated service planning, including accessibility, hours of service parity, advisory council representation, and department approval timelines (60-day review window).
    • Addresses reporting on street railways and potential budget appropriation mechanisms related to street railways (for years after 2009).
    • Maintains a framework for multiyear commitments and eligible project oversight, with audit rights and funding priority for projects with federal backing.

  • Sec. 13c (Neighborhood Roads Fund)

    • Creates the Neighborhood Roads Fund in the state treasury and outlines its administration, including non-lapsing status of funds and department oversight.
    • Establishes staged distributions (for fiscal years 2026-2030, then starting 2031) to support:
    • Local bridge repair (via a separate account and the local bridge advisory board).
    • Local grade separation projects (local grade separation fund).
    • Infrastructure projects authority fund (IPAF) allocations (35% to CTF-eligible authorities and urban/rural disbursement rules; 65% to the IPAF for infrastructure investments).
    • A split of funds to county road commissions (65%) and city/village road agencies (35%), with allocations guided by existing Michigan transportation fund distribution principles.
    • A portion to the state trunk line fund.
    • Sets long-term distribution formulas (from 2031 onward) including substantial allocations to the CTF, infrastructure projects authority, and local roads/trunk line funds, with a mix of county, city, and village shares.
    • Allows for non-matching funds (no requirement for local entities to provide matching funds for distributions under subsections 5 or 6) but permits requests for matching funds from other sources.
    • Creates the IPAF and outlines its governance, reporting requirements (status of funded projects, location, funding amounts, benefits, criteria, fund balance), and eligible uses (including matching federal funds and other support).
    • Establishes criteria for qualified infrastructure investments (high-capacity mobility projects, regional/multi-jurisdictional mobility, first/last-mile solutions, and regional anchors), with emphasis on regional benefits and readiness/financial viability.
    • Includes reporting, audits, and project oversight provisions consistent with GAO standards and state procurement practices.
    • Defines “fund” as the Neighborhood Roads Fund unless otherwise specified and clarifies multimodal and qualified investment concepts.

Who/what is affected

  • Public transportation authorities and agencies serving urbanized and nonurbanized areas, intercity carriers, and area agencies on aging.
  • Local units of government, including county road commissions, city and village road agencies.
  • Project sponsors for local bridges, grade separations, and other local infrastructure projects.
  • The Department of Transportation (state level) as administrator and overseer of fund distributions, reporting, and grant/audit processes.
  • Regional infrastructure authorities via the Infrastructure Projects Authority Fund for high-capacity mobility and regional projects.
  • Transit riders, especially seniors and persons with disabilities, due to fare preferential policies and service availability requirements.

Procedural and timeline aspects

  • Funding year sequencing emphasized: annual CT Fund priorities, with defined order of payments (debt service, administration, operating grants, intercity/public transportation, and capital).
  • Specific distribution schedules are set for 2026–2030 with fixed allocations to sub-funds, followed by a restructured framework beginning in 2031.
  • Local transportation programs must be submitted by Intercity Carriers/Authorities/Agencies by March 1 for the next fiscal year; the department prepares annual transportation programs and a state transportation program by certain dates, with the state transportation commission approving by May 1.
  • Contracts/Grant MOUs for CT Fund disbursement must be executed by October 1, with multiyear grant instruments potentially committing state funding over multiple years.
  • IPAF has reporting requirements by December 30 of each year and allows up to 20% of IPAF money for supplemental operating grants under defined conditions.
  • Reporting and audit provisions align with federal standards (GAO) and state procurement/audit processes.

Note: The bill text shows long-standing structural reforms to how Michigan allocates transportation funds and integrates new funding streams with explicit local and regional investment criteria. If enacted, expect substantial changes to yearly grant formulas, grant ceilings, reporting burdens, and the balance between local and regional mobility investments.

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

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