Corporate income tax: revenue distribution; distribution of corporate income tax revenue; modify to reflect repeal of the strategic outreach and attraction reserve fund. Amends sec. 695 of 1967 PA 281 (MCL 206.695). TIE BAR WITH: HB 5294'25

HB 5296 modifies Michigan's corporate income tax revenue distribution by removing the allocation to the "strategic outreach and attraction reserve fund" (which was repealed) and redirecting those funds to the "neighborhood roads fund" starting in the 2025-2026 fiscal year. The bill updates Section 695 of the Income Tax Act to reflect this change, specifying that after deposits to the general fund ($1.2 billion) and housing fund ($50 million), funds previously designated for the strategic reserve will instead go to the neighborhood roads fund (starting at $688 million in 2025-2026 and increasing annually through 2028-2029). This affects how corporate tax revenue is allocated to state programs, directly impacting the neighborhood roads fund's funding. The change applies to fiscal years beginning 2025-2026 and beyond, while other allocations (e.g., to housing and revitalization funds) remain unchanged.