The bill amends the Income Tax Act of 1967, specifically section 695, to revise the distribution of revenue collected from state taxes. It stipulates that, starting from the 2022-2023 fiscal year through the 2024-2025 fiscal year, the revenue must be allocated in a specific order: first, up to $1.2 billion to the general fund; second, up to $50 million to the Michigan housing and community development fund; third, up to $50 million to the revitalization and placemaking fund; and fourth, up to $500 million to the strategic outreach and attraction reserve fund. Any remaining revenue after these allocations will go to the general fund.

For the 2025-2026 fiscal year, the bill changes the allocation structure significantly. It mandates that up to $500 million be directed to the Department of Transportation for county road commissions, followed by another $500 million for cities and villages. The remaining funds will be deposited into the Michigan transportation fund. Starting from the 2026-2027 fiscal year, all revenue collected under this part will be deposited into the Michigan transportation fund and disbursed according to existing regulations. The bill also includes various insertions and deletions to clarify these changes in the law.

Statutes affected:
House Introduced Bill: 206.695