Does this action conflict with the constitutional prohibition: 'The state shall not be a party to, nor be financially interested in, any work of internal improvement, nor engage in carrying on such work, except for public (SIC) improvements provided by law'? (Const 1963, art 3, Sec. 6)

'The balance, if any, of the specific taxes, except general sales and use taxes and regulatory fees, imposed directly or indirectly on fuels sold or used to propel motor vehicles upon highways and on registered motor vehicles, after the payment of necessary collection expenses; 100 percent of the specific taxes, except general sales and use taxes and regulatory fees, imposed directly or indirectly on fuels sold or used to propel aircraft and on registered aircraft, after the payment of necessary collection expenses; and not more than 25 percent of the general sales taxes, imposed directly or indirectly on fuels sold to propel motor vehicles upon highways, on the sale of motor vehicles, and on the sale of the parts and accessories of motor vehicles, after the payment of necessary collection expenses; shall be used exclusively for the transportation purposes of comprehensive transportation purposes as defined by law.' (Emphasis added.)

'AN ACT to improve and maintain transportation services in this state; to provide for the acquisition of funds in relation thereto and the use of those funds; to provide for the acquisition of rail services, facilities, and property on behalf of the state; to establish public trails; to provide for contractual grants and improvements to certain private transportation services; to prescribe the powers and duties of the state highway commission and the department of state highways and transportation; and to provide for appropriations.'

'(1) This act shall be known and may be cited as the 'state transportation preservation act of 1976'.

'(2) There exists a need to provide authorization for financial assistance for the capital improvement, maintenance, and operation of rail, intercity bus, and ferry services in this state. To undertake the planning, development, acquisition, and operation of these services is in the best interest of the state and is a valid public purpose.'

'An act . . . to set up and establish the Michigan transportation fund and . . . to authorize the state transportation commission, counties, cities and villages to borrow money, issue bonds, and make pledges of funds for transportation purposes; . . . to provide for the establishment and administration of the state transportation department fund, the state trunk line fund, and the comprehensive transportation fund; to provide for the deposits in the state transportation department fund, state trunk line fund, and comprehensive transportation fund of money raised by specific taxes and fees; to provide for definitions of public transportation functions and criteria; to define the purposes for which Michigan transportation funds may be allocated; to provide for Michigan transportation fund grants and establish priority for use of the Michigan transportation fund; to provide for review and approval of transportation programs, to provide for the of annual legislative requests and reports; to provide for the establishment and functions of certain advisory councils; to provide for conditions for grants and to provide for the issuance of bonds and notes for transportation purposes. . . .'

'The state shall not be a party to, nor be financially interested in, any work of internal improvement, nor engage in carrying on any such work, except for public internal improvements provided by law.'

'In view of this manifestly broader constitutional language and the broad interpretation of the term 'public purpose' which this Court has upheld, it appears that the Legislature was acting within its power when it determined that these grants may be necessary to provide a comprehensive and integrated system of transportation services in the state and that they constitute a valid public purpose.'

"Public transportation,' 'comprehensive transportation,' 'public transportation service,' 'comprehensive transportation service,' 'public transportation purpose,' or 'comprehensive transportation purpose' means the movement of people and goods by publicly or privately owned water vehicle, bus, railroad car, rapid transit vehicles, taxicab, aircraft, or other conveyance which provides general or special service to the public, but not including school buses or charter or sightseeing service. Public transportation, public transportation services, or public transportation purposes; and comprehensive transportation, comprehensive transportation services, or comprehensive transportation purposes as defined in this subdivision are declared by law to be transportation purposes within the meaning of section 9 of article 9 of the state constitution of 1963.'

Does the phrase 'except for public improvements provided by law' require specific legislative provision for such works of internal improvement? For example, a total of $46.5 million of the aforesaid bond issue is earmarked for rail projects including upgrading 800 miles of track. Is it necessary that the legislation provide, by law, for such state involvement?

'The commission may spend sums appropriated and other available funds for the modernization, rehabilitation, rebuilding, and relocation of rail property owned by the state or by a private carrier. The commission may perform or contract for maintenance or improvements on rail property owned by the state or by a private carrier as is necessary in the public interest.'

'The commission may contract with a person, firm, or public or private corporation to private rail, intercity bus, or ferry service deemed by the commission to be in the best interest of the state.' (Emphasis added.)

May the state issue bonds for construction of a subway or grade-separated fixed rail system as proposed by SEMTA without a specific legislative provision? Does such a legislative provision now exist which authorizes state involvement in such a work of internal improvement in conformity with the above constitutional prohibition?

'(1) The state transportation commission may borrow money and issue notes or bonds for the following purposes:

'(a) To pay all or any portion of or to make loans, grants or contract payments to pay all or any portion of any capital costs for the purposes described in section 9 of article 9 of the state constitution of 1963.

'(c) To pay all costs relating to the issuance of the bonds or notes described in this subsection.

'(3) The notes or bonds authorized by this section shall be issued only after authorization by resolution of the state transportation commission, which resolution shall contain the following:

'(a) An irrevocable pledge providing for the payment of the principal and interest on the notes or bonds from money which is restricted as to use by section 9 of article 9 of the state constitution of 1963 and which is deposited or to be deposited in the comprehensive transportation fund, in the case of bonds or notes issued for comprehensive transportation purposes as defined by law, or in the state trunk line fund, in the case of bonds or notes issued for transportation purposes other than comprehensive transportation purposes, as defined by law, or in the case of notes, if the resolution authorizing the notes provides, from money received or to be received by the state transportation department from the proceeds of bonds or renewal notes to be issued after the date of the resolution.

'(9) Bonds may be issued under this section as separate issues or series with different dates of issuance, but the aggregate of the bonds shall be subject to the limitations set forth in this section.' (Emphasis added.)