The bill amends the Michigan Trust Fund Act to establish the community district education trust fund within the state treasury. It allows the state treasurer to receive and invest funds for this trust, ensuring that any interest and earnings from these investments are credited back to the fund. The bill specifies that funds in the community district education trust fund at the end of the fiscal year must remain in the fund and do not lapse to the general fund. Additionally, it outlines that the department of treasury will administer the fund for auditing purposes and will only expend money from the fund to offset the absence of local school operating revenue in community districts.

A significant change introduced in the bill is the stipulation that beginning in the fiscal year, $72 million of tobacco settlement revenue must be deposited into the community district education trust fund, with a total cap of $617 million. Furthermore, the bill includes a provision that after September 30, 2026, no money may be appropriated to or expended from the community district education trust fund, and any remaining funds will be transferred to the state school aid fund. This transition aims to ensure that the funds are utilized effectively for educational purposes while also establishing a clear timeline for the fund's eventual closure.

Statutes affected:
House Introduced Bill: 12.262
As Passed by the House: 12.262