REDIRECTION OF CERTAIN DRIVERS' LICENSE

FEE REVENUE FROM TEDF TO STATE GENERAL FUND

House Bills 5072 and 5073 as passed by the Senate

Sponsor:  Rep. Lee Gonzales

Committee:  Appropriations

Complete to 10-22-09

A SUMMARY OF HOUSE BILLS 5072 & 5073 AS PASSED BY THE SENATE 10-20-09

House Bill 5072 (S-1) would amend Section 11 of 1987 PA 231 (MCL 247.911), an act which created and governs the Transportation Economic Development Fund (TEDF).  The TEDF is a state-restricted transportation fund created to help fund highway, road, and street improvements related to either a specific type of economic activity or a specific type of road system.  The S-1 version of the bill would reduce the amount allocated to the Targeted Industries program ("Category A") over two fiscal years, FY 2008-09 and FY 2009-10 by $24 million to reflect in statute the reductions effected through Executive Order 2009-22 ($12 million), and leadership target agreements for FY 2009-10 General Fund appropriations ($12 million).  [The introduced and House-passed versions of the bill would have reduced the allocation by $12 million.]

House Bill 5073 (S-1) would amend Section 819 (MCL 257.819) of the Michigan Vehicle Code (1949 PA 300) to redirect to the state General Fund a portion of drivers' license fee revenue currently dedicated to the TEDF.  The bill would redirect $18 million for FY 2008-09 and $12.0 million for FY 2009-10.  With regard to the FY 2008-09, only $12 million is a new redirection from the TEDF to reflect reductions made in Executive Order 2009-22 – $6 million driver's license fees had previously been redirected to the state General Fund through Public Act 346 of 2008.  The bill simply reflects the $18 million total to be redirected to the General Fund in FY 2008-09 ($6 million plus $12 million). 

The previous $6 million amount for FY 2008-09 represented the amount that the TEDF was reduced for FY 2006-07 through Executive Order 2007-3.  In effect, budgetary spending authority was reduced by $6 million in FY 2006-07, but the actual shift of those funds to the state General Fund was not completed until FY 2008-09 – through Public Act 346 of 2008.

The $12 million redirection for FY 2009-10 reflects leadership target agreements for FY 2009-10 General Fund appropriations.  This additional redirection had not been included in the introduced or House-passed versions of the bill.

 

 

FISCAL IMPACT:

The bills would redirect $12 million from the TEDF to the state General Fund for FY 2008-09 (not counting the $6 million that had already been redirected through Public Act 346 of 2008) and $12 million in FY 2009-10.  The reduction in TEDF funding would be taken entirely from the TEDF "Target Industry" program (Category A).  There would be no impact on total state revenue, simply a shift between a state-restricted fund and the state General Fund.

Transportation Economic Development Fund

Recent Legislative Actions Regarding Driver's License Fee Fund Source

Fiscal Year/ Action	Appropriation Bill	Amendment toMichigan Vehicle Code to Transfer to GF/GP	Amendment to TEDF Act (1987 PA 231)
FY 2006-07 Reduces Category "A" by $6 million	Executive Order 2007-3	Never enacted – transfer in FY 2008-09 instead.  (See below)	Public Act 168 of 2007 (Senate Bill 794)
FY 2007-08 Reduces Category "A" by $13 million total	FY 2007-08 appropriation adjusted to decrease spending authority for Category "A" by $6.5 million, and increase Categories "C" and "D" by $3.25 million each. Done by transfer	Public Act 346 of 2008 (House Bill 4847)	Bill to direct entire reduction from  Category "A" Public Act 364 of 2008 (Senate Bill 1485)
FY 2008-09 Redirects $6 million to GF/GP	Not adjusted in original enacted budget because Category "A" was already reduced in FY 2006-07.	Public Act 346 of 2008 (House Bill 4847)	No bill needed.
FY 2008-09 Reduces Category "A" by $12 million	Executive Order 2009-22		House Bill 5072(S-1)
FY 2008-09 Redirects $12 million to GF/GP		House Bill 5073(S-1) The bill indicates that $18 million from driver's license fee revenue will be deposited to the state General Fund for FY 2008-09.  This is the total of the $12 million related to EO 2009-22, and the $6 million already enacted in 2008 PA 346. This will not result in an additional $6 million beyond what had previously been enacted.
FY 2009-10 Reduces Category "A" by $12 million	Reflected in SB 254		House Bill 5072 (S-1)
FY 2009-10 Redirects $12 million to GF/GP		House Bill 5073(S-1) The bill redirects $18 million from driver's license fee revenue to the state General Fund for FY 2009-10.

                                                                                                                       

                                                                                                   Fiscal Analyst:   William E. Hamilton   

■ This analysis was prepared by nonpartisan House staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.