The bill amends the Use Tax Act of 1937 by modifying Section 21, which outlines the distribution of funds collected under the act. It specifies that all money received must be deposited into the state treasury for the general fund, with collections from a specific 2% use tax rate directed to the state school aid fund. Notably, the bill removes previous provisions that required certain amounts of revenue lost due to exemptions under the state education tax act to be deposited into the state school aid fund.

Additionally, the bill introduces a new requirement for the state treasurer to transfer $16 million annually from the general fund to the state school aid fund starting in the fiscal year ending September 30, 2026, with adjustments based on the Consumer Price Index for subsequent years. It also clarifies that funds collected for local community stabilization are not state funds and must be managed separately. The bill emphasizes the importance of proper fund allocation to support education and local government needs while ensuring transparency in the distribution process.

Statutes affected:
Substitute (S-2): 205.111
Senate Introduced Bill: 205.111
As Passed by the Senate: 205.111