Sales tax: distribution; disposition of money into the game and fish protection account; provide for. Amends sec. 25 of 1933 PA 167 (MCL 205.75). TIE BAR WITH: SB 0276'25
SB 277 amends Michigan’s General Sales Tax Act to change how certain sales tax revenues are distributed. The bill keeps the existing framework for general sales tax revenue sharing with cities, villages, and townships, the school aid fund, transportation-related funds, aviation fuel revenues, and the Michigan Health Initiative Fund, but adds a new earmark beginning in fiscal year 2025-2026 for revenue associated with the sale of certain items tied to wildlife and fisheries funding. Specifically, it directs the amount calculated under the Natural Resources and Environmental Protection Act to the game and fish protection account, with credit to the pheasant and cold-water subaccounts.
The bill also continues to require the state to backfill the school aid fund for revenue losses caused by several sales tax exemptions and exclusions, including exemptions for data center equipment and other specified items. It preserves existing reporting, reconciliation, and confidentiality rules for aviation fuel distributions and the reporting requirements tied to certain exemptions. The bill is tie-barred to SB 276, meaning it does not take effect unless that companion bill is enacted.
Overall, the bill’s impact is to redirect a portion of sales tax revenue into wildlife-related conservation accounts while maintaining current allocations to schools, local governments, transportation, airports, and health-related programs. It also reinforces the state’s practice of reimbursing the school aid fund for revenue lost through selected exemptions, which helps stabilize school funding despite tax preferences elsewhere in the code.
The general sentiment reflected in the voting history appears moderately favorable but not unanimous. The bill was reported favorably out of committee by a 14-3 vote and later passed the Senate on third reading by a 22-14 vote, indicating meaningful support but also notable opposition. No committee transcript was provided, so the available record does not show detailed debate or sponsor testimony.
The main point of contention appears to be the revenue allocation itself: supporters likely view the bill as a way to dedicate sales tax revenue to conservation and fish-and-game purposes, while opponents may object to diverting sales tax receipts away from the general fund or question the broader package of tax earmarks and school-fund reimbursements. The tie-bar to SB 276 also suggests the bill is part of a broader legislative package rather than a standalone change.
The bill amends section 25 of the General Sales Tax Act, changing the statutory distribution of sales tax collections and adding a new ongoing deposit to the game and fish protection account beginning in fiscal year 2025-2026. It affects the allocation of revenue among the general fund, local governments, the school aid fund, transportation funds, aviation funds, the Michigan Health Initiative Fund, and conservation-related accounts, while preserving existing reimbursement provisions for school aid fund losses from specified exemptions and exclusions. It also maintains reporting and reconciliation requirements for certain revenue streams and is contingent on enactment of SB 276.
The bill appears to have received mixed but generally workable support. It advanced from committee on a 14-3 vote and passed the Senate on third reading 22-14, suggesting that a majority supported the revenue reallocation but a substantial minority opposed it. With no transcript available, the record does not identify specific arguments, but the vote margins indicate the bill was not broadly consensus-driven.
The likely areas of disagreement are the redirection of sales tax revenue into the game and fish protection account and the broader use of earmarks within the sales tax statute. Supporters likely favor dedicated funding for wildlife conservation, pheasant, and cold-water habitat programs, while opponents may prefer that more revenue remain in the general fund or school aid fund. The bill’s continued school-fund backfill provisions and its tie-bar to SB 276 may also have been points of concern for legislators evaluating the package as a whole.