Michigan House Bill HB5768

Michigan 2023-2024 Regular Session

• Introduced: 5/30/24
• Refer: 5/30/24
• Report Pass: 6/11/24

Caption

Corporate income tax: revenue distribution; revenue distributions; modify. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 695a & repeals sec. 695 of 1967 PA 281 (MCL 206.695). TIE BAR WITH: SB 0559'23, SB 0562'23, HB 5770'24, HB 5769'24

Impact

The passage of HB 5768 will significantly affect the state's income tax revenue management and distribution mechanisms. By defining a clear allocation strategy, the bill aims to support the Michigan housing and community development fund, which is critical for addressing housing shortages and urban redevelopment. Additionally, the establishment of a mobility trust fund marks an effort to improve infrastructure and enhance transportation throughout the state. The repealing of the old section 695 also signals a shift in legislative focus towards more comprehensive funding strategies, potentially leading to improved state services.

Summary

House Bill 5768 seeks to modify the revenue distribution procedures outlined in the Income Tax Act of 1967. By adding section 695a, the bill establishes a framework for how revenue collected from taxes will be allocated starting in the 2025-2026 fiscal year and continuing through the 2034-2035 fiscal year. The primary focus of this bill is to allocate substantial funds to various state priorities, with up to $1.2 billion directed to the general fund as a priority. Subsequent allocations are tentatively assigned to community development initiatives, revitalization efforts, and mobility trust funds, contingent on available funding.

Contention

Although the bill presents a structured approach to revenue distribution, it faces scrutiny regarding the specific allocations and their potential effectiveness. Critics express concern over whether the projected funding levels will be sufficient to meet the demands of community projects and transportation improvements. Furthermore, the bill's reliance on concurrent legislation for enactment raises questions about its feasibility and potential delays in implementation. Discussions emphasize the need for a balanced approach that adequately addresses local needs while ensuring state-wide benefits.