SENATE BILL NO. 559

A bill to amend 2000 PA 489, entitled

"Michigan trust fund act,"

(MCL 12.251 to 12.262) by adding sections 11a and 11b.

the people of the state of michigan enact:

Sec. 11a. (1) Beginning October 1, 2025, the revenue sharing trust fund is established in the department of treasury. The revenue sharing trust fund consists of 1 or more of the following:

(a) Money deposited in the revenue sharing trust fund as required by section 25 of the general sales tax act, 1933 PA 167, MCL 205.75.

(b) Donations of money made to the revenue sharing trust fund from any source.

(c) Interest and earnings from revenue sharing trust fund investments.

(2) The state treasurer shall direct the investment of the revenue sharing trust fund.

(3) Money in the revenue sharing trust fund at the close of a fiscal year remains in the revenue sharing trust fund and does not lapse to the general fund.

Sec. 11b. (1) Beginning on October 1, 2025, subject to subsections (6) and (7), and upon appropriation, the state treasurer shall transfer and disburse the money received by the revenue sharing trust fund as follows:

(a) To cities, villages, and townships, $299,126,400.00 to be distributed to each city, village, or township, regardless of whether any limitation or eligibility criteria under section 952 of article 5 of 2023 PA 119 were met, in the same proportion of the revenue sharing payment that each was eligible to receive under section 952 of article 5 of 2023 PA 119, rounded to the nearest dollar.

(b) To cities, villages, and townships, any remaining amount appropriated to be distributed as follows:

(i) One-third as taxable value payments as provided under subsection (2).

(ii) One-third as unit type population payments as provided under subsection (3).

(iii) One-third as yield equalization payments as provided under subsection (4).

(c) To counties, $261,069,700.00 to be distributed to each county, regardless of whether any limitation or eligibility criteria under section 952 or 955 of article 5 of 2023 PA 119 were met, in the same proportion of the revenue sharing payment that each was eligible to receive under section 955 of article 5 of 2023 PA 119, rounded to the nearest dollar.

(d) To counties, any remaining amount appropriated as a taxable value payment determined as follows for each county:

(i) Determine the per capita taxable value for each county by dividing the taxable value of that county by the population of that county.

(ii) Determine the statewide per capita taxable value by dividing the total taxable value of all counties by the total population of all counties.

(iii) Determine the per capita taxable value ratio for each county by dividing the statewide per capita taxable value by the per capita taxable value for that county.

(iv) Determine the adjusted taxable value population for each county by multiplying the per capita taxable value ratio as determined under subparagraph (iii) for that county by the population of that county.

(v) Determine the total statewide adjusted taxable value population, which is the sum of all adjusted taxable value population for all counties.

(vi) Determine the taxable value payment rate by dividing the amount to be distributed under this subdivision by the total statewide adjusted taxable value population as determined under subparagraph (v).

(vii) Determine the taxable value payment for each county by multiplying the result under subparagraph (vi) by the adjusted taxable value population for that county.

(2) A taxable value payment described in subsection (1)(b)(i) to each city, village, and township is determined as follows:

(a) Determine the per capita taxable value for each city, village, and township by dividing the taxable value of that city, village, or township by the population of that city, village, or township.

(b) Determine the statewide per capita taxable value by dividing the total taxable value of all cities, villages, and townships by the total population of all cities, villages, and townships.

(c) Determine the per capita taxable value ratio for each city, village, and township by dividing the statewide per capita taxable value by the per capita taxable value for that city, village, or township.

(d) Determine the adjusted taxable value population for each city, village, and township by multiplying the per capita taxable value ratio as determined under subdivision (c) for that city, village, or township by the population of that city, village, or township.

(e) Determine the total statewide adjusted taxable value population, which is the sum of all adjusted taxable value population for all cities, villages, and townships.

(f) Determine the taxable value payment rate by dividing the amount to be distributed under this subsection by the total statewide adjusted taxable value population as determined under subdivision (e).

(g) Determine the taxable value payment for each city, village, and township by multiplying the result under subdivision (f) by the adjusted taxable value population for that city, village, or township.

(3) A unit type population payment as described in subsection (1)(b)(ii) to each city, village, and township is determined as follows:

(a) Determine the unit type population weight factor for each city, village, and township as follows:

(i) For a township with a population of 5,000 or less, 1.0.

(ii) For a township with a population of more than 5,000 but less than 10,001, 1.2.

(iii) Except as otherwise provided in subparagraph (xix), for a township with a population of more than 10,000 but less than 20,001, 1.44.

(iv) For a township with a population of more than 20,000 but less than 40,001, 4.32.

(v) For a township with a population of more than 40,000 but less than 80,001, 5.18.

(vi) For a township with a population of more than 80,000, 6.22.

(vii) For a village with a population of 5,000 or less, 1.5.

(viii) For a village with a population of more than 5,000 but less than 10,001, 1.8.

(ix) For a village with a population of more than 10,000, 2.16.

(x) For a city with a population of 5,000 or less, 2.5.

(xi) For a city with a population of more than 5,000 but less than 10,001, 3.0.

(xii) For a city with a population of more than 10,000 but less than 20,001, 3.6.

(xiii) For a city with a population of more than 20,000 but less than 40,001, 4.32.

(xiv) For a city with a population of more than 40,000 but less than 80,001, 5.18.

(xv) For a city with a population of more than 80,000 but less than 160,001, 6.22.

(xvi) For a city with a population of more than 160,000 but less than 320,001, 7.46.

(xvii) For a city with a population of more than 320,000 but less than 640,001, 8.96.

(xviii) For a city with a population of more than 640,000, 10.75.

(xix) For a township that has a population of more than 10,000 and provides documentation to the department of treasury that the township provides for or makes available all of the following, the unit type population weight factor for a city with the same population:

(A) Fire services.

(B) Police services on a 24-hour basis either through contracting for or directly employing personnel.

(C) Water services to 50% or more of its residents.

(D) Sewer services to 50% or more of its residents.

(b) Determine the adjusted unit type population for each city, village, and township by multiplying the unit type population weight factor for that city, village, or township as determined under subdivision (a) by the population of the city, village, or township.

(c) Determine the total statewide adjusted unit type population, which is the sum of the adjusted unit type population for all cities, villages, and townships.

(d) Determine the unit type population payment rate by dividing the amount to be distributed under this subsection by the total statewide adjusted unit type population as determined under subdivision (c).

(e) Determine the unit type population payment for each city, village, and township by multiplying the result under subdivision (d) by the adjusted unit type population for that city, village, or township.

(4) A yield equalization payment described in subsection (1)(b)(iii) to each city, village, or township must be in an amount sufficient to provide the guaranteed tax base for a local tax effort, but not to exceed 0.02, and is determined as follows:

(a) The guaranteed tax base is the maximum combined state and local per capita taxable value that can be guaranteed in a state fiscal year to each city, village, and township for a local tax effort, not to exceed 0.02, if an amount equal to the amount described in subsection (1)(b)(iii) is distributed to cities, villages, and townships whose per capita taxable value is below the guaranteed tax base.

(b) The full yield equalization payment to each city, village, and township is the product of the amounts determined under subparagraphs (i) and (ii):

(i) An amount greater than zero that is equal to the difference between the guaranteed tax base determined in subdivision (a) and the per capita taxable value of the city, village, or township.

(ii) The local tax effort of the city, village, or township, not to exceed 0.02, multiplied by the population of that city, village, or township.

(5) For purposes of determining distributions described in subsection (1)(a), any city, village, or township that completely merges with another city, village, or township is a single entity, so that when determining the distribution the combined single entity is to receive under subsection (1)(a), the city, village, and township revenue sharing amount that each of the merging local units of government was eligible to receive under section 952 of article 5 of 2023 PA 119 is summed.

(6) If the balance in the revenue sharing trust fund is less than the amount appropriated, payments made under subsection (1)(b) and (d) must be prorated to reflect the remaining money in the revenue sharing trust fund after distributions made under subsection (1)(a) and (c).

(7) If a city, village, township, or county is eligible to receive a distribution under subsection (1), the distribution must be made on the last business day of October, December, February, April, June, or August, as applicable.

(8) Money in the revenue sharing trust fund must not be transferred, expended, withdrawn, or otherwise disbursed from the revenue sharing trust fund except as authorized in this section.

(9) Payments distributed under this section may be withheld in accordance with sections 17a and 21 of the Glenn Steil state revenue sharing act of 1971, 1971 PA 140, MCL 141.917a and 141.921.

(10) For each state fiscal period that begins after September 30, 2025, the governor and the state budget director shall include in the annual budget for that fiscal period submitted to the legislature under section 18 of article V of the state constitution of 1963 an appropriation directing the state treasurer to transfer and disburse money from the revenue sharing trust fund as provided in this section.

Enacting section 1. This amendatory act does not take effect unless all of the following bills of the 103rd Legislature are enacted into law:

(a) Senate Bill No. 560.

(b) Senate Bill No. 561.