Road Funding Bill
Passed by both House and Senate
It has certainly been a long battle, but last night (Nov. 3) at 10:30
p.m. the House finally passed a Senate amended road funding proposal package
that will generate $1.2 billion for the state’s roads and bridges by 2021.
At first count, there did not appear to be enough support to
ensure the passage of the suite of bills.
However, MAA was all hands on deck, along with other industry partners,
to ensure the eventual passage of the bills.
While these bills differ from the original house versions,
there are many similarities. An analysis
of the final passed versions are as follows:
House Bill 4738
amends the Motor Fuel Tax Act to increase motor fuel taxes by increasing the
tax on diesel motor fuel from 15 cents per gallon and the tax on gasoline motor
fuel from 19 cents per gallon to a single rate of 26.3 cent per gallon on all
motor fuel effective January 1, 2017.
The bill will also annually adjust the tax rates for motor fuels based
on consumer inflation (using the U.S. Consumer Price Index), with increases
capped at 5% per year, effective January 1, 2022.
House Bill 4736
amends the Michigan Vehicle Code to increase vehicle registration tax rates.
Rates for passenger cars, vans, light trucks, and large commercial trucks would
all be increased by approximately 20% across the board, effective January 1,
2017. The current average registration tax for a passenger vehicle is
approximately $100; this bill would increase that average by approximately $20.
The bill would also create a new registration tax surcharge for
electric-powered motor vehicles.
House Bill 4370
amends the Income Tax Act of 1967 to earmark a portion of income
tax revenue currently allocated as General Fund/General
Purpose (GF/GP) revenue to the
Michigan Transportation Fund for distribution to state and
local road agencies (bypassing
the Comprehensive Transportation Fund). The earmarks would
be as follows:
million for FY 2018-19
million for FY 2019-20
million for FY 2020-21 and subsequent fiscal years
Senate Bill 414
amends the Income Tax Act of 1967 to create a mechanism that will automatically
reduce the individual income tax rate if the increase from one year to the next
in total General Fund/General Purpose (GF/GP) revenues exceeded inflation (as
calculated using the U.S. Consumer Price Index). This determination would begin
with tax year 2023 (based on final FY 2021-22 GF/GP revenue growth) and
continue indefinitely on an annual basis.
House Bill 4614
amends the Streamlined Sales and Use Tax Revenue Equalization
House Bill 4616
amends the Motor Carrier Fuel Tax Act to make complementary amendments to those
in House Bill 4738.
House Bill 4737
amends Public Act 51 of 1951 to require the Department of
Transportation to form a Roads Innovation Task Force that
would issue a report to the
Legislature by March 1, 2016 that would include, among other
things, an evaluation of
road materials and construction methods that could allow the
department to build high-
quality roads that last longer than those typically
constructed by the department, with a
goal of roads lasting at least 50 years, higher quality
roads, and reduced maintenance costs. The bill would also add a number of
provisions related to road construction warranties and will effectively allow,
with the approval of the director of the Department of Transportation, the City
of Detroit to use up to 20% of its Michigan Transportation Fund distribution
for public transit purposes.
A summary of the preliminary estimate of the road funding package
fiscal impacts is available here.
It is anticipated that the Governor will sign the final
Stay tuned for future updates as more details
become available. If you have any
questions, please contact Doug Needham at 517-896-6816 or firstname.lastname@example.org or Mike Newman at
517-230-9822 or email@example.com