SB-1111, As Passed House, September 22, 2004                                

SUBSTITUTE FOR

SENATE BILL NO. 1111

                                                                             A bill to amend 1971 PA 140, entitled                                             

"Glenn Steil state revenue sharing act of 1971,"                            

by amending section 11 (MCL 141.911), as amended by 2004 PA 77.             

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1       Sec. 11.  (1) For state fiscal years before the 1996-1997                   

2   state fiscal year, the department of management and budget shall            

3   cause to be paid during each August, November, February, and May,           

4   to counties on a per capita basis the collections from the state            

5   income tax as certified by the department of treasury for the               

6   quarter periods ending the prior June 30, September 30,                     

7   December 31, and March 31 that are available for distribution to            

8   and retention by counties.                                                  

9       (2) For state fiscal years beginning after September 30, 1992               

10  and ending before October 1, 1996, the collections from the state           

11  income tax otherwise available for distribution to counties in              

1   November for the quarter period ending the prior September 30               

2   shall be increased by $35,900,000.00 and the collections from the           

3   state income tax otherwise available for distribution to counties           

4   in August for the quarter period ending the prior June 30 shall             

5   be decreased by $35,900,000.00.                                             

6       (3) For the 1996-1997 and 1997-1998 state fiscal years, the                 

7   department of treasury shall cause to be paid to counties on a              

8   per capita basis an amount equal to 24.5% of the difference                 

9   between 21.3% of the sales tax collections at a rate of 4% in the           

10  12-month period ending June 30 of the state fiscal year in which            

11  the payments are made and the total distribution for the state              

12  fiscal year under section 12a.  Subject to section 13d, for the             

13  1998-1999 through 2005-2006 state fiscal years and for the period           

14  of October 1, 2006 through September 30, 2007, the department of            

15  treasury shall cause to be paid to counties all of the                      

16  following:                                                                  

17      (a) Except as provided in subdivision (c) and subsection (6),               

18  an amount equal to the amount the county was eligible to receive            

19  under section 12a in the 1997-1998 state fiscal year.                       

20      (b) Except as provided in subdivision (c) and subsection (6),               

21  an amount equal to 25.06% of 21.3% of the sales tax collections             

22  at a rate of 4% in the 12-month period ending June 30 of the                

23  state fiscal year in which the payments are made minus the amount           

24  determined under subdivision (a) which shall be distributed on a            

25  per capita basis.  If the amount appropriated under this section            

26  to counties is less than 25.06% of 21.3% of the sales tax rate of           

27  4%, any reduction made necessary by this appropriation in                   

1   distributions to counties shall first be applied to the                     

2   distribution under this subdivision.                                        

3       (c) For the 2002-2003 state fiscal year only, each county                   

4   shall receive the lesser of 96.5%, or the percentage determined             

5   under this subdivision, of the amount that the county would have            

6   received if the total available for distribution under                      

7   subdivisions (a) and (b) were $211,549,002.00.  The total amount            

8   available for distribution to all counties under this subdivision           

9   shall not exceed $204,144,787.00.  For the 2002-2003 state fiscal           

10  year, the percentage under this subdivision shall be determined             

11  by dividing the sum of all payments under section 10 of article             

12  IX of the state constitution of 1963 and $791,070,000.00 by                 

13  $1,515,644,218.00.  For the 2003-2004 state fiscal year only,               

14  each county shall receive the lesser of 92%, or the percentage              

15  determined under this subdivision, of the amount distributed to             

16  the county under this subsection for the 2002-2003 state fiscal             

17  year.  For the 2003-2004 state fiscal year, the percentage under            

18  this subdivision shall be determined by dividing the sum of all             

19  payments under section 10 of article IX of the state constitution           

20  of 1963 and $724,800,000.00 by $1,407,850,000.00 and then                   

21  subtracting 0.08.                                                           

22      (4) After September 30, 2007 and subject to the limitations                 

23  of subsections (3) and (6), 25.06% of 21.3% of the sales tax                

24  collections at a rate of 4% shall be distributed to counties as             

25  provided by law.                                                            

26      (5) The payments under subsection (3) shall be made from                    

27  revenues collected during the state fiscal year in which the                

Senate Bill No. 1111 as amended September 8, 2004                  1 of 2   

1   payments are made and shall be made during each October,                    

2   December, February, April, June, and August.  Payments shall be             

3   based on collections from the sales tax at a rate of 4% in the              

4   2-month period ending the prior August 31, October 31,                      

5   December 31, February 28, April 30, and June 30, and for the                

6   1996-1997 and 1997-1998 state fiscal years only the payments                

7   shall be reduced by 1/6 of the total distribution for the state             

8   fiscal year under section 12a.  For state fiscal years after the            

9   1995-1996 state fiscal year, the collections from the sales tax             

10  otherwise available for distribution to counties under subsection           

11  (3) in December shall be increased by $17,000,000.00 and the                

12  collections from the sales tax otherwise available for                      

13  distribution to counties under subsection (3) in April shall be             

14  decreased by $17,000,000.00.                                                

15  (6) For state fiscal years beginning after September 30,                    

16  2004, the total amount distributed to each county under this                

17  section shall equal the amount by which the balance in its                  

18  revenue sharing reserve fund under section 44a of the general               

19  property tax act, 1893 PA 206, MCL 211.44a, for the county's most           

20  recent fiscal year that ends prior to the January 1 of the                  

21  state's fiscal year is less than the amount calculated under                

22  section 44a(13) of the general property tax act, 1893 PA 206, MCL           

23  211.44a, for the county fiscal year that begins in the state's              

24  fiscal year.  Payments under this subsection shall be adjusted as           

25  necessary to reflect partial county fiscal years and prorated               

26  based on the total amount appropriated for distribution to all              

27   counties.  <<Upon the exhaustion of each county's revenue sharing reserve fund, state revenue sharing within that county will be fully and permanently restored in an amount equal to the total payments made to that county under this act in the state fiscal year ending September 30, 2004, adjusted annually through the date of restoration by the inflation rate, without regard to an executive order issued after May 17, 2004, and

prorated based on the amount of the reserve fund used by the county in the fiscal year during which payments are required to resume under this subsection.  As used in this subsection, "inflation rate" means that term as defined in section 34d of the general property tax act, 1893 PA 206, MCL 211.34d.>>

1   (7)  (6)  The department of treasury may withhold all or a                  

2   portion of payments under this section to a county that has not             

3   timely furnished the statement required under section 151(1) of             

4   the state school aid act of 1979, 1979 PA 94, MCL 388.1751, or              

5   distributed an industrial facilities tax as required under 1974             

6   PA 198, MCL 207.551 to 207.572, or the specific tax as required             

7   under section 21b of the enterprise zone act, 1985 PA 224, MCL              

8   125.2121b.  Before withholding all or a portion of the payments             

9   under this section to a county, the department shall inform the             

10  county in writing of the intent to withhold payments and offer an           

11  opportunity for an informal conference on the matter.