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HB 4952

Use tax: distribution; distribution of money to the local government reimbursement fund; modify. Amends sec. 21 of 1937 PA 94 (MCL 205.111).

2025-2026 Regular Session Introduced by J.R. Roth

HB 4952 would allocate $75M to the Local Government Reimbursement Fund in 2025, then $25M annually thereafter from the state share of use tax receipts.

bill electronically reproduced 09/16/2025
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WeVote Research Nonpartisan
Bill Summary · HB 4952

Summary — HB 4952 (Use Tax: distribution; local government reimbursement fund)

Status: Introduced March 13, 2025; bill text electronically reproduced 09/16/2025. Referred to Committee on Appropriations. Companion: SB 765.

Purpose

HB 4952 amends section 21 of the Use Tax Act (1937 PA 94; MCL 205.111) to modify specified distributions of use tax receipts. The bill continues existing earmarks (state school aid fund, aeronautics/airport funds, local community stabilization share) and adds specific annual deposits to the Local Government Reimbursement Fund (created under the Michigan Trust Fund Act).

Key provisions

  • Maintains general rule that use tax collections are deposited to the general fund unless otherwise specified (subsec. 1).
  • Continues existing earmarks:
    • 2% additional rate collections (approved 3/15/1994) to the State School Aid Fund (subsec. 2).
    • Specified amounts to state school aid to offset revenue losses from personal property exemptions, certain statutory exemptions, and data center equipment exemptions; requires annual reporting by persons claiming the section 4cc (data center equipment) exemption of purchase price and other information necessary to determine revenue loss (subsec. 3(d)).
    • Local community stabilization share is declared a local (not state) tax and transmitted to the local community stabilization authority (subsec. 4).
    • Quarterly distributions from the 2% aviation fuel collections: 35% to State Aeronautics Fund and 65% to the Qualified Airport Fund, with annual reconciliation by Treasury (subsecs. 5–6).
  • New/modified deposit to Local Government Reimbursement Fund (subsec. 7):
    • The bill directs that, from the state share of use tax receipts, $75,000,000 must be deposited each year into the Local Government Reimbursement Fund beginning with the fiscal year ending September 30, 2025.
    • It also directs that beginning with the fiscal year ending September 30, 2026 and each fiscal year thereafter, $25,000,000 must be deposited each year into that same fund.
    • (The statutory text as introduced contains overlapping phrasing about “each fiscal year thereafter” for both amounts; the most natural reading is a one-year $75 million deposit for FY ending 9/30/2025, followed by $25 million annually beginning FY ending 9/30/2026.)

Who is affected

  • Local Government Reimbursement Fund — receives directed deposits.
  • State School Aid Fund, state aeronautics fund, qualified airport fund, and local community stabilization authority — distribution rules for these funds remain in place and continue to receive earmarked revenues.
  • Taxpayers claiming the data center equipment exemption under section 4cc — subject to annual reporting of purchase price and other information to allow Treasury to determine revenue impact.
  • State budgeting/appropriations — earmarked deposits reduce amounts of use-tax receipts available for other purposes or general appropriation.

Fiscal/timeline notes

  • Directs specific annual transfers from the state share of use tax receipts ($75M for the 2025 fiscal year per the text, then $25M annually thereafter under the likely interpretation). This creates recurring commitments that will affect state cash flow and amounts available for legislative appropriation.
  • Treasury is responsible for aviation-fuel reconciliations and for administering the new reporting requirement for section 4cc exemptions.
  • Procedural history: introduced Mar 13, 2025; advanced through committee in April 2025; placed on General State Calendar in May 2025; reintroduced/reproduced Sept 16, 2025 and referred to Appropriations.

Implementation/ambiguity

  • The bill’s language about the effective fiscal years and the phrase “each fiscal year thereafter” appears internally inconsistent. Legislative or fiscal office clarification could be needed to confirm whether the $75 million is intended as a one-time (or single fiscal year) deposit followed by $25 million annually, or some other schedule.

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

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