Summary — HB 4184 (Aeronautics: aviation fuel excise tax; increase and distribution)
Status & context
- Introduced: March 6, 2025 (Rep. Jamie Thompson sponsor for the House version); House-passed substitute (H‑1) adopted March 18 and passed by the House March 19, 2025 (immediate effect). Referred to Senate Appropriations.
- Tie-bar: Enacting section conditions this bill on enactment of the broader road‑funding package (HBs 4180–4187 and HB 4230). The House and House Fiscal Agency materials describe the package implementation date as October 1, 2025.
Purpose
- Increase the per‑gallon excise (privilege) tax on aviation fuel and revise how the additional revenue is distributed between aviation‑related funds to support airport and aeronautics activities as part of a broader transportation funding package.
Key provisions
- Amendments: Amends sections 34 and 203 of the Aeronautics Code (MCL 259.34 and 259.203).
- Rate change: Raises the aviation fuel privilege tax from the current 3 cents per gallon to 10 cents per gallon (net increase = 7 cents/gallon) as provided in the House‑passed substitute.
- Refund for scheduled interstate carriers: Retains a 1.5‑cent per‑gallon refund for airline operators that document interstate scheduled operations within six months of purchase.
- Distribution of the increased portion: The 7‑cent increase is to be allocated as follows:
- 35% to the State Aeronautics Fund (statutorily created and credited under MCL 259.34)
- 65% to the Qualified Airport Fund
- Administrative / purchase rule: Persons not registered with the Department of Treasury as required under the Motor Fuel Tax Act may not buy fuel at the aviation rate and must pay the applicable motor fuel rate instead.
- Conditional enactment: The bill’s effectiveness is tied to enactment of the other bills in the road‑funding package.
Who is affected
- Aviation fuel purchasers and sellers (fixed‑wing and other aircraft operators, FBOs).
- Airports and aviation programs that receive deposits to the State Aeronautics Fund and Qualified Airport Fund.
- Scheduled interstate airlines (eligible for the 1.5¢/gal refund).
- State treasury and budgeting decisions within the larger road‑funding package.
Fiscal impact / broader package
- HB 4184 itself increases aviation fuel tax receipts (by the 7¢/gal increment), with receipts directed to aeronautics and airport funds per the 35/65 split.
- The House Fiscal Agency reports the overall road‑funding package (HBs 4180–4187, 4230) would change state revenue flows: roughly +$269.1M (FY2025‑26), +$541.9M (FY2026‑27), and about $300M/yr thereafter — note these figures reflect the entire package, not HB 4184 alone.
Procedural next steps
- Referred to the Senate Appropriations Committee after House passage. Because the bill is tie‑barred to multiple companion bills, final effect depends on enactment of the full package.
