State management: funds; report regarding federal funding and its impact on state revenue; provide for. TIE BAR WITH: HB 6123'26

2025-2026 Regular Session Introduced by Joey Andrews and 25 co-sponsors

Requires the state treasurer to monitor, report monthly on federal funding interactions with Michigan, and may withhold payments to the federal government.

bill electronically reproduced 06/23/2026

#stateagencies(existing):treasury #statemanagement:funds

Purpose and intent

HB 6122, introduced in the Michigan House for the 2025-2026 session, adds a new section (Sec. 142) to the 1984 Administrative Procedures act (The Management and Budget Act) to require the state treasurer to monitor and report on federal funding and its interaction with state revenues. The bill contemplates potential withholding of state payments to the federal government based on calculated figures tied to federal funding obligations and repayments.

Key provisions

Reporting requirement by the state treasurer (Sec. 142(1))

Within 30 days after the amendatory act’s effective date, the state treasurer must prepare a report addressing:
(a) Whether the federal government is delinquent in funds owed to Michigan where a court decision upheld federal spending appropriations.
(b) Whether Michigan will have any funds due to be paid to the federal government during the 12 months following the act’s effective date. This includes items such as:
- Federal taxes owed by Michigan as an employer
- Offsets for federal debts
- Backup withholding of federal taxes
- Federal grant repayments

Ongoing updates (Sec. 142(2))

The treasurer must update the report every month and consult with the state budget director in preparing the updates.

Withholding authority (Sec. 142(3))

After calculating amounts under a related section (Sec. 143, not included in the text provided), the treasurer may withhold payments to the federal government.
The amount withheld may not exceed the amounts calculated under Sec. 143.

Effective date condition (Enacting section 1)

This amendatory act’s effectiveness is contingent upon the passage and enactment of either Senate Bill No. S03896'25 or House Bill No. 6123 (the related tie-bar legislation).

Who/what is affected

State level: Michigan state government, specifically the State Treasurer and the Department of Treasury, in coordination with the State Budget Director.

Federal-state financial interactions: Federal funding streams, reimbursements, grant payments, tax withholdings related to state employment, and any federal debt offsets or repayments.

Broader fiscal operations: Any routine or quarterly/monthly reconciliations between federal obligations and state revenue, with potential withholding of federal payments.

Procedural and timeline notes

The bill sets an initial reporting deadline within 30 days of enactment and mandates monthly updates thereafter.

It creates a tie-bar with HB 6123, meaning the act’s effectiveness depends on the companion bill’s passage.

The interplay with Sec. 143 (not shown) indicates a separate calculation framework that determines the exact withholdings.

Potential impact

Provides a formal mechanism for Michigan to track and potentially contest or leverage federal funding where disputes exist, including court-upheld federal spending and potential offsets.

Establishes monthly oversight and the possibility of withholding state payments to the federal government, which could affect federal-state financial interactions and grant administration.

Given the tie-bar, the bill’s practical effect is contingent on companion legislation passing.