Governerd’s Bill 411: How Michigan Taxpayers Really Pay For DRIC

So you want the  411—the  information as your  kids would say–about  how  shovels full of Michigan taxpayer money will be  provided to  DRIC and the P3  operator  when there  are shortfalls because toll revenues are insufficient.

Think it  cannot happen.  You have been assured  haven’t you that the DRIC project  is financially viable.  Hardly.  If it was, then a certain new Governerd Bill would not be necessary and would  not  have  had to  have been  introduced.  It was not there under Jenny that I can recall.

Why it smacks of what the State had to do to induce investors to take a look at financing the Mackinac  Bridge!  No wonder that  bridge was the  Governerd’s model.

In the end, it is the biggest scandal of them all. And we have heard whoppers for the last decade on the border file.

We have heard so many variations that it is not funny anymore:

 The DRIC project will not cost Michiganders one single penny.
 There is no risk to the State.
 Canada and its taxpayers will bear all of the risk.
 There really is no concern anyway because the DRIC project is financially viable
 The new Bill will outlaw availability payments and not allow the State to be responsible for any shortfalls
 As a result of the Canadian $550 million loan, DRIC is a “no-brainer”
 And so on, and so on, and so on.

There have been two Senate hearings already on the DRIC/P3 Bills introduced by the Senate Majority Leader on behalf of the Governerd. In reality, the focus is on Bill 410, the Bill where most of the P3/DRIC statutory language is contained.

Of course, the reality is that Bill 410 and the discussion around it is the diversion!  Bill 411 should be what everyone considers equally. But it has to be kept quiet, ignored almost, or else the Governerd’s goose is cooked!

Bill 410 is a most difficult piece of legislation to read and takes a good deal of time to try to decipher and understand it. What is also difficult is to find all of the loopholes and try to figure out how the DRIC-ites will get around the Act in order to provide the money from the State that will have to be paid if DRIC is to be successful. Or if anyone will ever invest in it in the first place. That is what happened with the Mackinac Bridge.

So who has time to figure out Bill 411 with its minor change.

Let us assume, even though it is not true, that the Governerd achieved his objective in Bill 410 by protecting the State, the taxpayers and the Authority from financial liabilities.

Hallelujah, everything is fine, let’s approve that DRIC/P3 legislation immediately, right now, forthwith.

BEFORE EVERYONE WAKES UP TO THE FACT THAT THE STATE HAS JUST BEEN SCREWED BY BILL 411.

I have to admit that I read that Bill 411 several times and could not figure out its purpose readily. It seems almost like a nothing:

“Sec. 10c. As used in this act:

(c) “Eligible governmental agency” means a county, city, or village or an authority created under 1963 PA 55, MCL 124.351 to 124.359; the urban cooperation act of 1967, 1967 (Ex Sess) PA 7, MCL 124.501 to 124.512; 1967 (Ex Sess) PA 8, MCL 124.531 to 124.536; 1951 PA 35, MCL 124.1 to 124.13; the public transportation authority act, 1986 PA 196, MCL 124.451 to 124.479; or the revenue bond act of 1933, 1933 PA 94, MCL 141.101 to 141.140, or the new international trade crossing act.”

Hmmm, I thought, making the DRIC authority an “eligible governmental agency” is very odd. Why? It was not part of what Jenny wanted to do. It was something new.

Moreover, under Bill 410, I saw this about the urban cooperation act of 1967:

Sec 3 (k) “Governance agreement” means an interlocal agreement under the urban cooperation act of 1967, 1967 (Ex Sess) PA 7, MCL 124.501 to 124.512, that includes the authority and a public agency of Canada as parties.”

Sec 3 (s) “Public agency” means that term as defined under section 2 of the urban cooperation act of 1967, 1967 (Ex Sess) PA 7, MCL 124.502, including, but not limited to, an entity established by the government of Canada under the laws of Canada and an authority established under this act.

Sec. 11. (1) The authority may enter into a governance agreement concerning a project under this act. The governance agreement may create a separate legal or administrative entity under the urban cooperation act of 1967, 1967 (Ex Sess) PA 7, MCL 124.501 to 124.512, including a joint venture between the authority and a public agency of Canada, that shall be a public body corporate or politic and shall not be a public body of the executive branch of this state. Pursuant to this subsection, activities of the authority under this act may be exercised jointly with a public agency of Canada pursuant to a governance agreement, including through a separate legal or administrative agency. The governance agreement may establish terms and conditions for the separate legal or administrative entity to exercise any power that the authority and a public agency of Canada share in common as provided in section 4 of the urban cooperation act of 1967, 1967 (Ex Sess) PA 7, MCL 124.504.”

I found this most bizarre. The provisions of the urban cooperation act of 1967 are extremely broad. Why, they are so broad that I thought we were seeing the setting  up  again  of the Instrumentality of Government of Michigan concept in this  Bill but  under a  new  name. Gee, I thought that concept had been kicked out of the P3/DRIC Bill provided by the Governerd. Obviously not.

So now we have a situation where the DRIC/P3 governance agreement can create a separate legal entity and we have Bill 411 that makes NITC an “eligible governmental agency.” Both the separate legal entity and NITC now fall under the provisions of the Michigan Transportation Fund.

That Statute is even harder to read than the Governerd’s proposed Bill. Fortunately, I read this from “Analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.”

“Senate Bill 411 would amend the Michigan Transportation Fund law to include an authority created under the proposed New International Trade Crossing Act in the definition of “eligible governmental agency”. (Under the Michigan Transportation Fund law, eligible governmental agencies are authorized to receive distributions from the Fund.)”

That  confirmed what I  thought but  could  not  believe was being done.

I remembered what Matthew Moroun predicted during the Senate hearings.  He said  that the DRIC Bridge project was so much bigger than any other State infrastructure projects, that it would be a symbol of Michigan and that it might even appear on Michigan licence plates like the Mackinac Bridge.

What he was really saying was that it was too big to be allowed to fail. It would be such a symbol of Michigan that it would hurt the State dramatically if it went bankrupt.

Another thing that I remember hearing was that it was unlikely that the DRIC Bridge would be completed for at least another five years or so. I am sure that by that time the Governerd would be the President of the United States, the Lt. Governerd would be Governor and many of the Legislators who would unthinkingly approve DRIC because they thought it was “riskless” for Michigan would have retired or been term-limited.  As for the media sycophants, their memories would have failed.

What is the significance of that? They would not be around when the project managers for DRIC, “an eligible governmental agency” came in front of the Legislators begging for money from the Michigan Transportation Fund because toll revenues were insufficient.

You see, dear reader, an “eligible governmental agency” can “receive distributions from the Fund.” So can an entity under the urban cooperation act which is defined to be such an agency as well.

How clever. It is not a payment under the DRIC/P3 Bill so the provisions that say that the State are not at risk or liable are not offended. It is not an “availability payment” so everyone can be proud of their achievement. It is merely a payment from the Michigan Transportation Fund because those darned traffic projections by the outside consultants were just not as good as was expected.

Oh well, that is the Traffic Projection Biz. I guess those auto plants didn’t produce as many cars as expected nor was tourism as robust as predicted nor was Michigan as important a transportation hub as some wanted us all to believe.

Accordingly, and just temporarily of course until traffic picks up as will again be predicted by the  new consultants  hired at a fat  fee, section 10 of the STATE TRUNK LINE HIGHWAY SYSTEM Act 51 of 1951 (Michigan Transportation Fund Act) can be amended quickly and easily to allow a distribution to be made for DRIC.

It is sooooooo simple to do. And so disgusting as well.

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