Summary — HB 4346 (H‑1 substitute) — Lawful Internet Gaming Act: allocation to Michigan Agriculture Equine Industry Development Fund (AEIDF)
Status: Introduced March 11, 2025; H‑1 substitute reported July 24, 2025; referred to Committee on Rules (10/21/2025). Tie bar: Bill does not take effect unless HB 4347 (or designated Senate companion) is also enacted.
Purpose
- Change how a portion of the internet gaming tax (under the Lawful Internet Gaming Act, MCL 432.315) is allocated to the Michigan Agriculture Equine Industry Development Fund (AEIDF), which supports horse‑racing and related equine programs.
Key provisions (H‑1 substitute)
- Maintains the overall allocation framework for the tax imposed under section 14:
- 30% to the host city for public safety, neighborhood development, capital and infrastructure, tax relief, etc.
- Remaining percentage to the state (fund detail in statute).
- Revises the ear‑marked share for the AEIDF:
- Reduces the automatic share from 5% to 4% of the proceeds from the graduated internet gaming revenue tax to be deposited to the AEIDF.
- Establishes fiscal‑year thresholds. If the 4% amount would exceed the applicable threshold, the excess is deposited to the Internet Gaming Fund instead:
- FY 2025–26 (ending Sept. 30, 2026): $9,000,000
- FY 2026–27: $12,000,000
- FY 2027–28 and each fiscal year thereafter: $15,000,000
- Enacting provision: HB 4346’s amendments do not take effect unless HB 4347 (or the designated Senate bill) is enacted.
Relationship to HB 4347 (tie‑bar)
- HB 4347 (companion) would simultaneously revise the Horse Racing Law (1995 PA 279) to change how AEIDF monies are used and allocated among horse‑racing programs (standardbred and thoroughbred purses, breeders’ awards, sire stakes, county fair support, purse supplements, and allowable operating expenses). Notable changes in HB 4347 include:
- Removing a prior $8.0 million redirect provision and expanding authorized uses of AEIDF money.
- Reallocating AEIDF dollars into specific percentage buckets (examples in committee reports: allocations for standardbred purses, county fairs, sire stakes, breeders’ awards, etc.) and increasing allowable state funding up to 100% of some purses (removing a prior 75% cap).
- Raising breeders’ award caps (e.g., up to 20–30% of gross purse in some programs) and increasing minimum or indexed funding amounts for several programs.
Who is affected
- AEIDF and recipients: horse owners, breeders, county fairs, licensed race meetings (pari‑mutuel tracks), and entities that host or organize harness and thoroughbred racing.
- Internet gaming licensees: revenue base determines amounts available.
- Cities hosting internet gaming operator casinos (via the overall tax allocation formula) and the Internet Gaming Fund (which receives any AEIDF excess above thresholds).
- Michigan Department of Agriculture & Rural Development (MDARD): responsible for distribution/administration of AEIDF allocations under HB 4347.
Potential fiscal/operational impact
- Compared to current law (5% with a $3.0M cap to AEIDF), H‑1 reduces the statutory percent to 4% but raises the cap amounts substantially ($9M→$12M→$15M in phased years). The net effect on AEIDF receipts depends on total internet gaming taxable revenue; under some revenue scenarios AEIDF receipts could increase relative to the current $3.0M cap, while under others they could decrease relative to an uncapped 5% allocation.
- HB 4347’s reallocation would more tightly specify AEIDF program funding and permit greater state participation in purses and program support; it also broadens allowable expense categories.
Procedural notes
- H‑1 substitute reported with recommendation (7/24/2025); committee activity includes public hearing, testimony, and formal meetings.
- Because of the tie‑bar, enactment of HB 4346 depends on concurrent passage of HB 4347 (or the specified Senate bill).
