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HB 4605

Sales tax: distribution; distribution of certain sales tax revenue into the public safety and violence prevention fund; provide for. Amends sec. 25 of 1933 PA 167 (MCL 205.75).

2023-2024 Regular Session Introduced by Joey Andrews and 37 co-sponsors

HB 4605 creates a dedicated Public Safety and Violence Prevention Fund funded by 1.5% of the 4% sales tax (or $75M per year, per version) for grants to DHHS, crime victims, and loc

laid over one day under the rules
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Bill Summary · HB 4605

Summary — HB 4605 (Public Safety and Violence Prevention Fund)

Status: Laid over one day under the rules. Introduced March 12, 2025 (bill history begins in 2023). Tie‑barred with HB 4606 — neither bill takes effect unless both are enacted.

Purpose

HB 4605 amends the General Sales Tax Act (MCL 205.75) to create a dedicated revenue stream for a newly established Public Safety and Violence Prevention Fund (the Fund). The Fund is intended to provide predictable, ongoing state support for local public safety, violence prevention, victim services, and community‑based intervention programs.

Key provisions

  • Revenue source
    • As passed by the House (H‑2): beginning FY 2024, deposit 1.5% of collections from the 4% sales tax into the Fund.
    • As passed by the Senate (S‑2): beginning with the fiscal year ending Sept. 30, 2025, deposit a fixed $75,000,000 annually from the 4% sales tax into the Fund. (Different versions appear in the legislative history.)
  • Establishment and administration
    • The Fund is created in the Michigan Trust Fund Act (HB 4606). The State Treasurer directs investments; Fund balances do not lapse to the General Fund.
    • Distributions are made subject to appropriation.
  • Distribution formula (as enacted in companion HB 4606 substitutes)
    • By Sept. 30 and March 31 each year (subject to appropriation), from money added to the Fund during the previous two fiscal quarters:
    • 6.5% to the Department of Health and Human Services (DHHS) to create/administer grants for public‑health and community violence intervention programs.
    • 2% to the Crime Victim’s Rights Fund.
    • The remainder (~91.5% under the 1.5% split) to local units (cities, villages, townships) and, in some circumstances, counties on behalf of townships, distributed at least “proportionally” to each unit’s average share of statewide violent crimes using data from the three most recent Michigan State Police Crime in Michigan reports.
    • Per‑unit cap: no single municipality’s distribution may exceed 25% of a disbursement round.
  • Performance adjustments
    • For distributions Oct. 1, 2026–Sept. 30, 2028: if a locality does not reduce its violent crime rate by at least 5% from its “base crime level,” its distribution is reduced by 5% and reallocated proportionally to other localities.
    • After Sept. 30, 2028: the reduction for failing to meet the 5% improvement threshold increases to 10%.
    • “Base crime level” = the average of the two highest annual violent crime rates from the three calendar years immediately preceding the year HB 4606 takes effect (as defined in HB 4606).
  • Use restrictions
    • Funds awarded to local police agencies/counties must be used solely for operational and capital expenditures serving public safety and violence prevention.
    • Prohibitions include purchases of tactical vehicles over 15,000 pounds, acquisition/use of facial recognition technology (in distributions to local units), or chemical weapons. Funds generally may not supplant existing public safety programs unless a local government experiences a proportional decline in estimated total general fund revenue and recurring resources.
    • DHHS grant awards may be subgranted and have somewhat different allowable uses; they also cannot buy >15,000 lb tactical vehicles.
  • Budget instructions
    • For fiscal years beginning after Sept. 30, 2024, the Governor and State Budget Director must include an appropriation to disburse Fund money as provided.

Who is affected

  • State level: Department of Treasury (receiving, investing, reconciling, and distributing Fund money) and DHHS (grant program administration).
  • Local governments: cities, villages, townships that provide or contract for police services; counties in defined circumstances (e.g., on behalf of townships or under population thresholds).
  • Crime victims & community programs: will receive new dedicated funding streams via the Crime Victim’s Rights Fund and DHHS grants.

Fiscal impact and implementation issues

  • Fiscal impact: The House Fiscal Agency estimated a 1.5% earmark would generate roughly $106–111 million annually (FY estimates vary by projection year). The Senate substitute changes that to a fixed $75 million annual deposit, reducing uncertainty but lowering the amount available in some years.
  • Reduces General Fund resources available for other purposes.
  • Administrative implications: Treasury would incur costs to track eligibility and perform allocations; language leaves some technical issues unresolved (e.g., precise definition of “average share,” use of crime counts vs. rates, treatment of reporting gaps, and how appropriations interact with required distribution language).
  • Distributions are subject to appropriation; actual payments depend on budget actions and revenue realizations.

Procedural history (selected)

  • Introduced in House: May 23, 2023 (Rep. Nate Shannon).
  • Passed House (with substitutes): Nov. 2023.
  • Senate substitute (S‑2) adopted and passed: Dec. 20, 2024 (returned to House).
  • Subsequent committee hearings and readings occurred in 2024–2025; public hearing held May 1, 2025; currently laid over under the rules and pending further legislative action. (Tie‑bar with HB 4606: both must be enacted.)

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

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