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HB 5601

Appropriations: general government; appropriations for fiscal year 2026-2027; provide for. Creates appropriation act.

2025-2026 Regular Session Introduced by Tom Kuhn

HB 5601 appropriates FY 2026-27 general government funds and, notably, adds extensive IT governance, reporting, and DEI restrictions on use of state funds.

bill electronically reproduced 02/26/2026
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Bill Summary · HB 5601

HB 5601 (2025-2026 Session) – Summary (Michigan)

Overview and Purpose
- Bill Type: Appropriations bill (appropriations act) for General Government and related state purposes.
- Constitution/Scope: Provides FY 2026-27 appropriations for the Legislature, Executive Office, Attorney General, Secretary of State, Treasury, DTMB, Civil Rights, and related state purposes.
- Effective period: Fiscal year ending September 30, 2027.
- Structure: Divided into parts with line-item appropriations (Part 1) and general provisions (Part 2). Includes boilerplate provisions and numerous policy changes/housekeeping items as reflected in the House version (H-1) of the bill.

Key Provisions and Changes
- Part 1 – Line-Item Appropriations
- Total General Government (from state sources) appropriation: $100.00 (GF/GP) for FY 2026-27 (as provided in the bill text excerpt). This appears to be a placeholder in the posted excerpt, but the accompanying supporting documents show broader General Government funding in the $5.2B gross range when fully broken out by department; the final enacted totals would reflect the House amendments.
- Agencies/Departments Included: Legislature, Executive, Attorney General, Civil Rights, State, DTMB, Treasury, and related state purposes.

  • Part 2 – Provisions Concerning Appropriations (General Sections)
    • Sec. 201-202: Establishes total state spending under Part 1 from state sources, and that state spending paid to local units is $0.00; all appropriations are subject to the Management and Budget Act (1984 PA 431).
    • Sec. 201-202 implications: Sets the baseline for state-to-local allocations and compliance with state budgeting rules; signals a formal, consolidated appropriation act for FY 2026-27.

Major Boilerplate and Policy Provisions (as reflected in the House version)
- Departmental/Agency Reporting and Oversight:
- Out-of-State Travel: Requires reporting on out-of-state travel funded by state appropriations, with destination details added by the House.
- In-Person Work and Building Occupancy: Requires biannual remote-work policy reporting; occupancy metrics; and definitions aligning with building addresses and occupancy data.
- Performance Dashboards: New Sec. 214 (NEW) – requires public-facing department scorecards with quarterly metrics.
- FTE and Staffing Reporting: Expanded reporting on full-time/part-time/permanent statuses, overtime, and classification details (Sec. 215, revised).
- Retention of Reports: Expanded retention requirements; MDOC electronic retention obligations included (Sec. 217, revised).
- Access to Confidential Information: Retained (Sec. 625 in House) for Auditor General access to confidential information.

  • New or Expanded Requirements and Restrictions (House-only additions):

    • Diversity, Equity, and Inclusion (DEI): Sec. 227 (NEW) – prohibits state funds from being used for DEI initiatives or programs.
    • E-Verify and Adversaries: Sec. 221 (REVISED) – requires E-Verify for contractors; adds foreign adversary restrictions for contracting.
    • Private/Third-Party Funds Disclosure: Sec. 227 (RETAINED) – requires disclosure of private/third-party funds received and spent.
    • IT and Data Governance: Numerous IT-related changes, including IT service centralization (Sec. 253), product ownership on IT projects (Sec. 252), and a State Digital Service Office (Sec. 841, NEW) within DTMB.
    • IT/Tech Financial Controls: Precontract risk assessment (Sec. 254, NEW); ITIF funding adjustments (Sec. 816, 832-838 revisions); IVV/contracting reporting thresholds (Sec. 836, revised).

  • Specific Department/Agency Highlights (Representative items from supporting analyses):

    • Attorney General: House-initiated reductions to FTEs and IT services; reallocation of certain funds; adjustments related to the Flint settlement and other justice-related lines.
    • Civil Rights: Modest funding changes; IT reductions; some programmatic restrictions (e.g., new DRACD structuring).
    • Executive Office: Some salary/benefit adjustments; creation of a Digital Oversight function in the Legislature (Sec. 616).
    • Legislative Branch: Increases for operations; new Digital Oversight Office (as above); security funding for the Legislature; removal/adjustment of some federal/state restricted funds.
    • Treasury: Potential tax administration pilot items (e.g., proposed new tobacco, digital advertising, and other tax administration initiatives) that House did not adopt; changes to IT funding and state-restricted revenues; debt service and SBA-related adjustments.

Effective Dates and Procedural Aspects
- Introduction/Referral: February 26, 2026; Referred to Appropriations.
- Process: As an appropriations bill, it accompanies budgetary transfers, includes mandatory reviews under the State Budget Act (PA 431), and may include legislative transfers/contingencies (Sec. 801, Contingency Authorization with altered limits in the House version).
- Contingency/Transfers: The House version adjusts contingency authorization levels and transfer rules, signaling tighter control over major one-time or contingent appropriations.

Impact and Scope
- Financial: Substantial dollar-level changes across many agencies, especially DTMB, Treasury, and the Legislature, with broad IT modernization provisions and new governance offices. The House amendments emphasize IT governance, anti-fraud controls, procurement oversight, and DEI restriction provisions.
- Operational: Greater focus on in-person occupancy, performance dashboards, and transparency in reporting. Expanded requirements for IT project oversight and data governance.
- Policy: Introduces DEI prohibition, prohibits certain advertising, enhances vetting of contractors, and expands state-level control over IT services and vendor risk assessment.

Note
- This summary reflects the HB 5601 (H-1) version as introduced/reported by the House Appropriations process and includes several House-specific amendments. Final enacted text may differ as conferencing between House, Senate, and Governor occurs.

Compiled from official sources — confirm details with the bill’s official record.

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