SENATE BILL NO. 771 September 29, 1999, Introduced by Senators STEIL, BENNETT, GAST and ROGERS and referred to the Committee on Appropriations. A bill to amend 1971 PA 140, entitled "Glenn Steil state revenue sharing act of 1971," by amending section 13 (MCL 141.913), as amended by 1998 PA 532. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 13. (1) This subsection and subsection (2) apply to 2 distributions to cities, villages, and townships during the state 3 fiscal years before the 1996-1997 state fiscal year of collec- 4 tions from the state income tax and single business tax. Except 5 as otherwise provided in subsection (2), the department of trea- 6 sury shall cause to be paid to each city, village, and township 7 its share, computed in accordance with the tax effort formula, of 8 the following revenues: 9 (a) During each August, November, February, and May, the 10 collections from the state income tax for the quarter periods 11 ending the prior June 30, September 30, December 31, and March 31 00164'99 * FDD 2 1 that are available for distribution to cities, villages, and 2 townships under the income tax act of 1967, 1967 PA 281, MCL 3 206.1 to 206.532. 4 (b) The amount of the collections from the single business 5 tax available for distribution to cities, villages, and townships 6 under former section 136 of the single business tax act, 1975 PA 7 228. 8 (2) The amount of collections of the state income tax other- 9 wise available for distribution to cities, villages, and town- 10 ships in November, February, and May, computed in accordance with 11 the tax effort formula, shall be increased by $22,600,000.00. 12 The amount of collections otherwise available for distribution to 13 cities, villages, and townships in August, computed in accordance 14 with the tax effort formula, shall be decreased by 15 $67,800,000.00. 16 (3) This subsection applies to distributions to cities, vil- 17 lages, and townships for the 1996-1997 state fiscal year. The 18 department shall cause to be paid in accordance with the tax 19 effort formula an amount equal to 75.5% of the difference between 20 21.3% of the sales tax collections at a rate of 4% in the 21 12-month period ending June 30 of the state fiscal year in which 22 the payments are made and the total distribution for the state 23 fiscal year under section 12a. 24 (4) The department of treasury shall cause to be paid during 25 the 1997-1998 state fiscal year an amount equal to 75.5% of the 26 difference between 21.3% of the sales tax collections at a rate 27 of 4% in the 12-month period ending June 30 of the state fiscal 00164'99 * 3 1 year in which the payments are made and the total distribution 2 for the state fiscal year under section 12a, both of the 3 following: 4 (a) To each city, village, and township, the amount of col- 5 lections distributed under subsection (3) to cities, villages, 6 and townships for the 1996-1997 state fiscal year or its pro rata 7 share of the collections if the collections are less than the 8 amount of collections distributed under subsection (3) for the 9 1996-1997 state fiscal year. A city's, village's, or township's 10 share of revenues under this subdivision shall be computed using 11 the tax effort formula. 12 (b) To each city, village, and township its share of the 13 collections to the extent the total collections available for 14 distribution under this subsection exceed the amount distributed 15 to cities, villages, and townships under subdivision (a) for the 16 fiscal year. A city's, village's, or township's share of reve- 17 nues under this subdivision shall be computed on a per capita 18 basis. 19 (5) Subject to section 13d, for the 1998-1999 through 20 2005-2006 state fiscal years and for the period of October 1, 21 2006 through June 30, 2007, the department of treasury shall 22 cause distributions determined under subsections (6) to (13) to 23 be paid to each city, village, and township from an amount equal 24 to 74.94% of 21.3% of the sales tax collections at a rate of 4% 25 in the 12-month period ending June 30 of the state fiscal year in 26 which the payments are made. After June 30, 2007, 74.94% of 27 21.3% of sales tax collections at a rate of 4% shall be 00164'99 * 4 1 distributed to cities, villages, and townships as provided by 2 law. 3 (6) Subject to section 13d, for the 1998-1999 through 4 2005-2006 state fiscal years and for the period of October 1, 5 2006 through June 30, 2007 and except as provided in subsection 6 (15), the department of treasury shall cause to be paid 7 $333,900,000.00 to a city with a population of 750,000 or more as 8 the total combined distribution under this act and section 10 of 9 article IX of the state constitution of 1963 as annualized for 10 any period of less than 12 months to that city. 11 (7) Distributions under subsections (8) to (13) to cities, 12 villages, and townships with populations of less than 750,000 13 shall be made from the amount available for distribution under 14 this section that remains after the distribution under subsection 15 (6) is made. 16 (8) Subject to section 13d, for the 1998-1999 through 17 2005-2006 state fiscal years and for the period of October 1, 18 2006 through June 30, 2007, for cities, villages, and townships 19 with populations of less than 750,000, subject to the limitations 20 under this section, a taxable value payment shall be made to each 21 city, village, and township determined as follows: 22 (a) Determine the per capita taxable value for each city, 23 village, and township by dividing the taxable value of that city, 24 village, or township by the population of that city, village, or 25 township. 26 (b) Determine the statewide per capita taxable value by 27 dividing the total taxable value of all cities, villages, and 00164'99 * 5 1 townships by the total population of all cities, villages, and 2 townships. 3 (c) Determine the per capita taxable value ratio for each 4 city, village, and township by dividing the statewide per capita 5 taxable value by the per capita taxable value for that city, vil- 6 lage, or township. 7 (d) Determine the adjusted taxable value population for each 8 city, village, and township by multiplying the per capita taxable 9 value ratio as determined under subdivision (c) for that city, 10 village, or township by the population of that city, village, or 11 township. 12 (e) Determine the total statewide adjusted taxable value 13 population which is the sum of all adjusted taxable value popula- 14 tion for all cities, villages, and townships. 15 (f) Determine the taxable value payment rate by dividing 16 74.94% of 21.3% of the sales tax collections at a rate of 4% in 17 the 12-month period ending June 30 of the state fiscal year in 18 which the payments under this subsection are made by 3, and 19 dividing that result by the total statewide adjusted taxable 20 value population as determined under subdivision (e). 21 (g) Determine the taxable value payment for each city, vil- 22 lage, and township by multiplying the result under 23 subdivision (f) by the adjusted taxable value population for that 24 city, village, or township. 25 (9) Subject to section 13d, for the 1998-1999 through 26 2005-2006 state fiscal years and for the period of October 1, 27 2006 through June 30, 2007, subject to the limitations under this 00164'99 * 6 1 section and except as provided in subsection (14), a unit type 2 population payment shall be made to each city, village, and town- 3 ship with a population of less than 750,000 determined as 4 follows: 5 (a) Determine the unit type population weight factor for 6 each city, village, and township as follows: 7 (i) For a township with a population of 5,000 or less, the 8 unit type population weight factor is 1.0. 9 (ii) For a township with a population of more than 5,000 but 10 less than 10,001, the unit type population weight factor is 1.2. 11 (iii) For a township with a population of more than 10,000 12 but less than 20,001, the unit type population weight factor is 13 1.44. 14 (iv) For a township with a population of more than 20,000 15 but less than 40,001, the unit type population weight factor is 16 1.73. 17 (v) For a township with a population of more than 40,000 but 18 less than 80,001, the unit type population weight factor is 19 2.07. 20 (vi) For a township with a population of more than 80,000, 21 the unit type population weight factor is 2.49. 22 (vii) For a village with a population of 5,000 or less, the 23 unit type population weight factor is 1.5. 24 (viii) For a village with a population of more than 5,000 25 but less than 10,001, the unit type population weight factor is 26 1.8. 00164'99 * 7 1 (ix) For a village with a population of more than 10,000, 2 the unit type population weight factor is 2.16. 3 (x) For a city with a population of 5,000 or less, the unit 4 type population weight factor is 2.5. 5 (xi) For a city with a population of more than 5,000 but 6 less than 10,001, the unit type population weight factor is 3.0. 7 (xii) For a city with a population of more than 10,000 but 8 less than 20,001, the unit type population weight factor is 3.6. 9 (xiii) For a city with a population of more than 20,000 but 10 less than 40,001, the unit type population weight factor is 11 4.32. 12 (xiv) For a city with a population of more than 40,000 but 13 less than 80,001, the unit type population weight factor is 14 5.18. 15 (xv) For a city with a population of more than 80,000 but 16 less than 160,001, the unit type population weight factor is 17 6.22. 18 (xvi) For a city with a population of more than 160,000 but 19 less than 320,001, the unit type population weight factor is 20 7.46. 21 (xvii) For a city with a population of more than 320,000 but 22 less than 640,001, the unit type population weight factor is 23 8.96. 24 (xviii) For a city with a population of more than 640,000, 25 the unit type population weight factor is 10.75. 26 (b) Determine the adjusted unit type population for each 27 city, village, and township by multiplying the unit type 00164'99 * 8 1 population weight factor for that city, village, or township as 2 determined under subdivision (a) by the population of the city, 3 village, or township. 4 (c) Determine the total statewide adjusted unit type popula- 5 tion, which is the sum of the adjusted unit type population for 6 all cities, villages, and townships. 7 (d) Determine the unit type population payment rate by 8 dividing 74.94% of 21.3% of the sales tax collections at a rate 9 of 4% in the 12-month period ending June 30 of the state fiscal 10 year in which the payments under this subsection are made by 3, 11 and then dividing that result by the total statewide adjusted 12 unit type population as determined under subdivision (c). 13 (e) Determine the unit type population payment for each 14 city, village, and township by multiplying the result under sub- 15 division (d) by the adjusted unit type population for that city, 16 village, or township. 17 (10) Subject to section 13d, for the 1998-1999 through 18 2005-2006 state fiscal years and for the period of October 1, 19 2006 through June 30, 2007, subject to the limitations under this 20 section, a yield equalization payment shall be made to each city, 21 village, and township with a population of less than 750,000 suf- 22 ficient to provide the guaranteed tax base for a local tax effort 23 not to exceed 0.02. The payment shall be determined as follows: 24 (a) The guaranteed tax base is the maximum combined state 25 and local per capita taxable value that can be guaranteed in a 26 state fiscal year to each city, village, and township for a local 27 tax effort not to exceed 0.02 if an amount equal to 74.94% of 00164'99 * 9 1 21.3% of the state sales tax at a rate of 4% is distributed to 2 cities, villages, and townships whose per capita taxable value is 3 below the guaranteed tax base. 4 (b) The full yield equalization payment to each city, vil- 5 lage, and township is the product of the amounts determined under 6 subparagraphs (i) and (ii): 7 (i) An amount greater than zero that is equal to the differ- 8 ence between the guaranteed tax base determined in 9 subdivision (a) and the per capita taxable value of the city, 10 village, or township. 11 (ii) The local tax effort of the city, village, or township, 12 not to exceed 0.02, multiplied by the population of that city, 13 village, or township. 14 (c) The yield equalization payment is the full yield equali- 15 zation payment divided by 3. 16 (11) For state fiscal years after the 1997-1998 state fiscal 17 year, distributions under this section for cities, villages, and 18 townships with populations of less than 750,000 shall be deter- 19 mined as follows: 20 (a) For the 1998-1999 state fiscal year, the payment under 21 this section for each city, village, and township shall be the 22 sum of the following: 23 (i) Ninety percent of the total amount available for distri- 24 bution under subsections (8), (9), and (10) for the 1998-1999 25 state fiscal year multiplied by the city's, village's, or 26 township's percentage share of the distributions under this 27 section and section 12a minus the amount of a distribution under 00164'99 * 10 1 this section and section 12a to a city that is eligible to 2 receive a distribution under subsection (6) in the 1997-1998 3 state fiscal year. 4 (ii) Ten percent of the total amount available for distribu- 5 tion under subsections (8), (9), and (10) for the 1998-1999 state 6 fiscal year multiplied by the percentage share of the distribu- 7 tion amounts calculated under subsections (8), (9), and (10). 8 (b) For the 1999-2000 state fiscal year, the payment under 9 this section for each city, village, and township shall be the 10 sum of the following: 11 (i) Eighty percent of the total amount available for distri- 12 bution under subsections (8), (9), and (10) for the 1999-2000 13 state fiscal year multiplied by the city's, village's, or 14 township's percentage share of the distributions under this sec- 15 tion and section 12a minus the amount of a distribution under 16 this section and section 12a to a city that is eligible to 17 receive a distribution under subsection (6) in the 1997-1998 18 state fiscal year. 19 (ii) Twenty percent of the total amount available for dis- 20 tribution under subsections (8), (9), and (10) for the 1999-2000 21 state fiscal year multiplied by the city's, village's, or 22 township's percentage share of the distribution amounts calcu- 23 lated under subsections (8), (9), and (10). 24 (c) For the 2000-2001 state fiscal year, the payment under 25 this section for each city, village, and township shall be the 26 sum of the following: 00164'99 * 11 1 (i) Seventy percent of the total amount available for 2 distribution under subsections (8), (9), and (10) for the 3 2000-2001 state fiscal year multiplied by the city's, village's, 4 or township's percentage share of the distributions under this 5 section and section 12a minus the amount of a distribution under 6 this section and section 12a to a city that is eligible to 7 receive a distribution under subsection (6) in the 1997-1998 8 state fiscal year. 9 (ii) Thirty percent of the total amount available for dis- 10 tribution under subsections (8), (9), and (10) for the 2000-2001 11 state fiscal year multiplied by the percentage share of the dis- 12 tribution amounts calculated under subsections (8), (9), and 13 (10). 14 (d) For the 2001-2002 state fiscal year, the payment under 15 this section for each city, village, and township shall be the 16 sum of the following: 17 (i) Sixty percent of the total amount available for distri- 18 bution under subsections (8), (9), and (10) for the 2001-2002 19 state fiscal year multiplied by the city's, village's, or 20 township's percentage share of the distributions under this sec- 21 tion and section 12a minus the amount of a distribution under 22 this section and section 12a to a city that is eligible to 23 receive a distribution under subsection (6) in the 1997-1998 24 state fiscal year. 25 (ii) Forty percent of the total amount available for distri- 26 bution under subsections (8), (9), and (10) for the 2001-2002 27 state fiscal year multiplied by the percentage share of the 00164'99 * 12 1 distribution amounts calculated under subsections (8), (9), and 2 (10). 3 (e) For the 2002-2003 state fiscal year, the payment under 4 this section for each city, village, and township shall be the 5 sum of the following: 6 (i) Fifty percent of the total amount available for distri- 7 bution under subsections (8), (9), and (10) for the 2002-2003 8 state fiscal year multiplied by the city's, village's, or 9 township's percentage share of the distributions under this sec- 10 tion and section 12a minus the amount of a distribution under 11 this section and section 12a to a city that is eligible to 12 receive a distribution under subsection (6) in the 1997-1998 13 state fiscal year. 14 (ii) Fifty percent of the total amount available for distri- 15 bution under subsections (8), (9), and (10) for the 2002-2003 16 state fiscal year multiplied by the percentage share of the dis- 17 tribution amounts calculated under subsections (8), (9), and 18 (10). 19 (f) For the 2003-2004 state fiscal year, the payment under 20 this section for each city, village, and township shall be the 21 sum of the following: 22 (i) Forty percent of the total amount available for distri- 23 bution under subsections (8), (9), and (10) for the 2003-2004 24 state fiscal year multiplied by the city's, village's, or 25 township's percentage share of the distributions under this sec- 26 tion and section 12a minus the amount of a distribution under 27 this section and section 12a to a city that is eligible to 00164'99 * 13 1 receive a distribution under subsection (6) in the 1997-1998 2 state fiscal year. 3 (ii) Sixty percent of the total amount available for distri- 4 bution under subsections (8), (9), and (10) for the 2003-2004 5 state fiscal year multiplied by the percentage share of the dis- 6 tribution amounts calculated under subsections (8), (9), and 7 (10). 8 (g) For the 2004-2005 state fiscal year, the payment under 9 this section for each city, village, and township shall be the 10 sum of the following: 11 (i) Thirty percent of the total amount available for distri- 12 bution under subsections (8), (9), and (10) for the 2004-2005 13 state fiscal year multiplied by the city's, village's, or 14 township's percentage share of the distributions under this sec- 15 tion and section 12a minus the amount of a distribution under 16 this section and section 12a to a city that is eligible to 17 receive a distribution under subsection (6) in the 1997-1998 18 state fiscal year. 19 (ii) Seventy percent of the total amount available for dis- 20 tribution under subsections (8), (9), and (10) for the 2004-2005 21 state fiscal year multiplied by the percentage share of the dis- 22 tribution amounts calculated under subsections (8), (9), and 23 (10). 24 (h) For the 2005-2006 state fiscal year, the payment under 25 this section for each city, village, and township shall be the 26 sum of the following: 00164'99 * 14 1 (i) Twenty percent of the total amount available for 2 distribution under subsections (8), (9), and (10) for the 3 2005-2006 state fiscal year multiplied by the city's, village's, 4 or township's percentage share of the distributions under this 5 section and section 12a minus the amount of a distribution under 6 this section and section 12a to a city that is eligible to 7 receive a distribution under subsection (6) in the 1997-1998 8 state fiscal year. 9 (ii) Eighty percent of the total amount available for dis- 10 tribution under subsections (8), (9), and (10) for the 2005-2006 11 state fiscal year multiplied by the percentage share of the dis- 12 tribution amounts calculated under subsections (8), (9), and 13 (10). 14 (i) For the period of October 1, 2006 through June 30, 2007, 15 the payment under this section for each city, village, and town- 16 ship shall be the sum of the following: 17 (i) Ten percent of the total amount available for distribu- 18 tion under subsections (8), (9), and (10) for the 2006-2007 state 19 fiscal year multiplied by the city's, village's, or township's 20 percentage share of the distributions under this section and sec- 21 tion 12a minus the amount of a distribution under this section 22 and section 12a to a city that is eligible to receive a distribu- 23 tion under subsection (6) in the 1997-1998 state fiscal year. 24 (ii) Ninety percent of the total amount available for dis- 25 tribution under subsections (8), (9), and (10) for the 2006-2007 26 state fiscal year multiplied by the percentage share of the 00164'99 * 15 1 distribution amounts calculated under subsections (8), (9), and 2 (10). 3 (12) Except as otherwise provided in this subsection, the 4 total payment to any city, village, or township under this act 5 and section 10 of article IX of the state constitution of 1963 6 shall not increase by more than 8% over the amount of the payment 7 under this act and section 10 of article IX of the state consti- 8 tution of 1963 in the immediately preceding state fiscal year. 9 From the amount not distributed because of the limitation imposed 10 by this subsection, the department shall distribute an amount to 11 certain cities, villages, and townships such that the percentage 12 increase in the total payment under this act and section 10 of 13 article IX of the state constitution of 1963 from the immediately 14 preceding state fiscal year to each of those cities, villages, 15 and townships is equal to, but does not exceed, the percentage 16 increase from the immediately preceding state fiscal year of any 17 city, village, or township that does not receive a distribution 18 under this subsection. This subsection does not apply for state 19 fiscal years after the 2000 federal decennial census becomes 20 official to a city, village, or township with a 10% or more 21 increase in population from the official 1990 federal decennial 22 census to the official 2000 federal decennial census. 23 (13) The percentage allocations to distributions under sub- 24 sections (8) to (10) pursuant to subsection (11) shall be calcu- 25 lated as if, in any state fiscal year, the amount appropriated 26 under this section for distribution to cities, villages, and 27 townships is 74.94% of 21.3% of the sales tax at a rate of 4%. 00164'99 * 16 1 If the amount appropriated under this section to cities, 2 villages, and townships is less than 74.94% of 21.3% of the sales 3 tax at a rate of 4%, any reduction made necessary by this appro- 4 priation in distributions to cities, villages, and townships 5 shall first be applied to the distribution under subsections (8) 6 to (10) and any remaining amount shall be applied to the other 7 distributions under this section. 8 (14) A township that provides for or makes available fire, 9 police on a 24-hour basis either through contracting for or 10 directly employing personnel, AND waterto 50% or more of its11residents, andOR sewer services to 50% or more of its residents 12 and has a population of 10,000 or more or a township that has a 13 population of 20,000 or more shall use the unit type population 14 weight factor under subsection (9)(a) for a city with the same 15 population as the township. 16 (15) For a state fiscal year in which the sales tax collec- 17 tions decrease from the sales tax collections for the immediately 18 preceding state fiscal year, the department shall reduce the 19 amount to be distributed to a city with a population of 750,000 20 or more under subsection (6) by an amount determined by subtract- 21 ing the amount the city is eligible for under section 10 of arti- 22 cle IX of the state constitution of 1963 for the state fiscal 23 year from $333,900,000.00 and multiplying that result by the same 24 percentage as the percentage decrease in sales tax collections 25 for that state fiscal year as compared to sales tax collections 26 for the immediately preceding state fiscal year. 00164'99 * 17 1 (16) Notwithstanding any other provision of this section for 2 the 1998-1999 state fiscal year, the total combined amount 3 received by each city, village, and township under this section 4 and section 10 of article IX of the state constitution of 1963 5 shall not be less than the combined amount received under this 6 section, section 12a, and section 10 of article IX of the state 7 constitution of 1963 in the 1997-1998 state fiscal year. The 8 increase, if any, for each city, village, and township from the 9 1997-1998 state fiscal year, other than a city that receives a 10 distribution under subsection (6), shall be reduced by a uniform 11 percentage to the extent necessary to fund distributions under 12 this subsection. 13 (17) The payments under subsections (3), (4), and (5) shall 14 be made during each October, December, February, April, June, and 15 August. Payments under subsections (3), (4), and (5) shall be 16 based on collections from the sales tax at the rate of 4% in the 17 2-month period ending the prior August 31, October 31, December 18 31, February 28, April 30, and June 30, and for the 1996-1997 and 19 1997-1998 state fiscal years only, the payments shall be reduced 20 by 1/6 of the total distribution for the state fiscal year under 21 section 12a. 22 (18) Payments under this section shall be made from revenues 23 collected during the state fiscal year in which the payments are 24 made. 25 (19) Distributions provided for by this act are subject to 26 an annual appropriation by the legislature. 00164'99 * Final page. FDD