HB 4184 increases Michigan’s aviation fuel excise tax and revises how the revenue is distributed. The bill raises the tax on fuel used to propel aircraft from 3 cents per gallon to 10 cents per gallon, while keeping the existing refund for interstate scheduled airline operators who can document qualifying purchases within six months. It also preserves the exemption for aviation fuel purchased solely to formulate leaded racing fuel, with labeling requirements for shipping papers and invoices.
The bill changes the allocation of aviation fuel tax revenue by directing 7 cents per gallon into the state treasury and splitting that amount between the state aeronautics fund and the qualified airport fund, with 35% going to the state aeronautics fund and 65% to the qualified airport fund. It also continues to route certain sales and use tax receipts, licensing revenue, and other aeronautics-related receipts into those funds. The bill is part of a larger tied-bar package and does not take effect unless several related bills are also enacted.
Impact
HB 4184 would amend the Michigan Aeronautics Code to increase the aviation fuel tax and adjust the statutory funding streams that support aeronautics administration and airport-related purposes. It would affect aircraft fuel purchasers, airport-related fund balances, airline operators eligible for refunds, and entities involved in the sale, storage, or documentation of aviation fuel. The bill also reinforces compliance rules tied to motor fuel tax registration and preserves a specific exemption for aviation fuel used to make leaded racing fuel.
Sentiment
The bill appears to have received mixed but ultimately favorable legislative treatment. It was reported from committee with a 10-1 vote, suggesting broad support with limited opposition at the committee stage. On the House floor, it passed third reading and immediate effect with a narrower 62-46 vote, indicating more divided sentiment among members, likely reflecting disagreement over the tax increase and revenue redistribution.
Contention
The main point of contention is the increase in the aviation fuel tax from 3 cents to 10 cents per gallon, which would raise costs for aircraft fuel users and potentially for aviation businesses. Another likely area of debate is the revised distribution formula, which shifts revenue into the state aeronautics fund and qualified airport fund, affecting how aviation-related tax dollars are spent. The tied-bar structure also adds complexity, because the bill cannot take effect unless a package of related aeronautics and tax bills is enacted, meaning support for this bill may have depended on support for the broader legislative package.