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SB 596

State finance: budgets; legislatively directed spending items; create a request and monitoring process for. Amends 1984 PA 431 (MCL 18.1101 - 18.1594) by adding sec. 364.

2025-2026 Regular Session Introduced by Sarah Anthony

Senate Bill 596 enhances transparency in state spending by regulating earmarks, ensuring only eligible nonprofits receive funds and establishing strict monitoring and compliance.

ASSIGNED PA 0033'25 WITH IMMEDIATE EFFECT
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Bill Summary · SB 596

Summary of Senate Bill 596 (SB 596)

Overview

Senate Bill 596, introduced by Senator Sarah Anthony on October 2, 2025, aims to amend the Management and Budget Act (1984 PA 431) by adding Section 364. The bill establishes a structured process for Legislatively Directed Spending Items (LDSIs), commonly referred to as earmarks, ensuring transparency and accountability in state spending.

Purpose and Intent

The primary purpose of SB 596 is to regulate how legislatively directed spending items are requested, approved, and monitored. This legislation seeks to enhance transparency in the appropriations process and ensure that funds are used for their intended purposes.

Key Provisions

  1. Definition of LDSI:

    • An LDSI is defined as an appropriation that allocates a specific amount of money for a contract or expenditure to a specific entity, local government unit, or project. It excludes appropriations made in response to emergencies or those administered by state agencies.

  2. Eligibility Criteria:

    • For-profit entities are ineligible to receive LDSIs. Nonprofit organizations can qualify if they have operated continuously in Michigan for three years, have a physical office in the state for the past year, and maintain a board of directors.

  3. Request Process:

    • Legislators must submit requests for LDSIs at least 10 days before the bill containing the item is passed. Requests must be presented at a hearing of the Appropriations Committee or subcommittee.

  4. Transparency Requirements:

    • The Senate and House must create public web pages to post information about LDSIs within five business days of a request. This includes details such as the name of the requesting legislator, recipient, purpose, and status of the LDSI.

  5. Monitoring and Compliance:

    • The Department of Technology, Management, and Budget (DTMB) is responsible for maintaining a website that lists all LDSIs and their statuses. Departments administering LDSIs must ensure compliance with the terms of the funding agreement for up to seven years.

  6. Funding Agreements:

    • Recipients of LDSIs must enter into agreements that stipulate conditions for repayment if funds are misused, and that prohibit using funds for tax obligations. The DTMB can take action to recover funds if compliance issues arise.

  7. Audit Provisions:

    • The Auditor General is authorized to audit the management of LDSIs, ensuring accountability in how funds are spent.

Impact

  • Affected Entities: The bill primarily impacts state agencies, legislators, and nonprofit organizations seeking funding through LDSIs.
  • Fiscal Impact: The bill is expected to have minimal fiscal impact on the Senate, House of Representatives, or departments administering LDSIs.

Procedural Aspects

  • The bill has been ordered enrolled out of session and is set to take effect on January 1, 2026. It is tie-barred to House Bill 4420, meaning it cannot take effect unless that bill also becomes law.

Conclusion

Senate Bill 596 represents a significant step towards improving the transparency and accountability of state spending through legislatively directed spending items. By establishing clear guidelines for requests, monitoring, and compliance, the bill aims to ensure that public funds are used effectively and for their intended purposes.

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

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