Sponsor Statement for CSSB 29(CRA)

This legislation changes the name of the Revenue Sharing program to "Priority Revenue Sharing for Municipal Services", changes the Municipal Assistance Fund to the Safe Communities Fund and requires that payments from the Safe Communities Fund be used for specific prioritized purposes. The intent of these changes is to more accurately reflect the purposes for which payments received are used. These programs appear to have fostered the perception that it is a type of "slush fund" for communities. The change in name and the requirements for use of the monies help to dispel that notion.

Communities are required to spend funds received from the Safe Communities Fund on specific purposes in the following order of priority: (1) Police protection and related public safety services; (2) Fire protection and emergency medical services; (3) Water and sewer services not offset by user fees; (4) Solid waste management; and (5) Other services the governing body determines to have the highest priority. Communities are not, however, required to fund all requests for services in a category before funding services in another category.

Communities that levy and collect property taxes are required to list the allocation received from the Safe Communities Fund and its millage equivalent on the "Notice to Taxpayers."

This bill also revises how appropriations to the Safe Communities Fund are allocated. In the event appropriations continue to be reduced, allocations to, and the resulting payments from, the base amount account will be proportionately reduced. In the past, this account was "held harmless" and appropriation reductions were taken entirely from the per capita account. This resulted in an inequitable reduction of payments to communities.

The minimum entitlement to communities is increased to $40,000. If, however, appropriations continue to decline, this minimum entitlement may be proportionately reduced along with payments from the base amount and the per capita accounts.

Finally, the date of payment has been changed so that communities receive entitlements from both Priority Revenue Sharing and the Safe Communities Fund on July 31. Previously, payments from revenue sharing were made on July 31 and municipal assistance payments were made on February 1.

(1/22/97: CSSB 29(CRA): mj)