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HB 5296

Corporate income tax: revenue distribution; distribution of corporate income tax revenue; modify to reflect repeal of the strategic outreach and attraction reserve fund. Amends sec. 695 of 1967 PA 281 (MCL 206.695). TIE BAR WITH: HB 5294'25

2025-2026 Regular Session Introduced by Ann Bollin and 2 co-sponsors

The bill rewrites corporate tax revenue distribution to prioritize the Neighborhood Roads Fund (and related funds) over others, reallocating up to $1.04B annually after 2029.

bill electronically reproduced 11/13/2025
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Bill Summary · HB 5296

Summary — HB 5296 (House Introduced Bill)

Status: Introduced Nov. 13, 2025; referred to Committee on Economic Competitiveness; read first time.
Primary change: Amends section 695 of the Income Tax Act of 1967 (MCL 206.695) to modify how corporate income tax receipts are distributed among state funds across fiscal years, reflecting the repeal/repurposing of the former Strategic Outreach and Attraction Reserve Fund. The bill is tie-barred to HB 5294 and contains an enactment clause making its effect contingent on HB 5294 becoming law.

Purpose / intent

To revise statutory distribution priorities for corporate income tax revenue so that amounts formerly directed to the Strategic Outreach and Attraction Reserve Fund are redirected to other state funds (including the Healthy Michigan Fund and, thereafter, the Neighborhood Roads Fund). The change sets year-by-year caps and a fixed order of deposits.

Key provisions and year-by-year deposits (as written)

All distributions are from the corporate income tax receipts under Part (Income Tax Act), with “up to” caps and “if available” language.

  • Ongoing baseline (repeated each schedule):

    • (a) Up to $1,200,000,000 to the state General Fund (first priority).
    • (b) After (a), up to $50,000,000 to the Michigan Housing and Community Development Fund (MCL 125.1458a).
    • (c) After (a) & (b), up to $50,000,000 to the Revitalization and Placemaking Fund (section 696).
    • Remainder to the General Fund.

  • FY 2022–2023 through FY 2023–2024:

    • (d) After (a)-(c), up to $500,000,000 to the Strategic Outreach and Attraction Reserve Fund (referenced as created by former statute).

  • FY 2024–2025 (single year only):

    • (d) After (a)-(c), up to $250,000,000 to the Healthy Michigan Fund (MCL 333.5953).

  • FY 2025–2026 through FY 2028–2029 (each single-year schedule):

    • (c) After (a)-(b), directed to the Neighborhood Roads Fund (MCL 247.663c) with escalating caps:
    • 2025–26: up to $688,000,000
    • 2026–27: up to $776,000,000
    • 2027–28: up to $864,000,000
    • 2028–29: up to $952,000,000

  • Beginning FY 2029–2030 and thereafter:

    • (c) After (a)-(b), up to $1,040,000,000 to the Neighborhood Roads Fund.

Affected funds and entities

  • General Fund (primary beneficiary; receives first $1.2B and any remainder after directed deposits).
  • Michigan Housing and Community Development Fund (up to $50M annually, if available).
  • Revitalization and Placemaking Fund (up to $50M, if available).
  • Strategic Outreach and Attraction Reserve Fund (allocation present for FY22–24 in the bill text but the bill’s title and cross-reference indicate statutory repeal/repurposing activity).
  • Healthy Michigan Fund (one-time allocation in FY 2024–25 up to $250M).
  • Neighborhood Roads Fund (large, escalating allocations from FY 2025–26 onward).
  • Municipal/local road programs likely to be indirect beneficiaries through the Neighborhood Roads Fund.

Fiscal/operational notes

  • All amounts are expressed as caps (“up to”) and conditioned on availability of corporate income tax revenue in a given fiscal year.
  • The bill is tied to HB 5294; it does not take effect unless HB 5294 is enacted.
  • The change reallocates sizable portions of corporate tax receipts to infrastructure (neighborhood roads) over time and provides a one‑year health fund infusion in 2024–25 under the bill’s schedule.

Procedural timeline

  • Introduced: March 14, 2025 (filed); re-introduced/ electronically reproduced Nov. 13, 2025.
  • Read first time and referred to Committee on Economic Competitiveness on Nov. 13, 2025.
  • Effectiveness contingent on enactment of HB 5294.

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

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