This annual report on the role of the federal Library Services and Construction Act (LSCA) funds in improving Michigan library services presents district-by-district summaries of the state's 1996 LSCA grant program and demonstrates how federal funds have supported a wide range of projects. Grant awards are listed by library in each district, under LSCA Title I Projects: Improving Public Library Services and LSCA Title II Projects: Sharing Library Resources. Quotes from library staff and users on the benefits of various services and resources are included for each district as well. A summary of LSCA awards in 1996 is included for regional and subregional library programs, major urban resource library programs, institutional programs, discretionary grants for public library services (LSCA Title I), and for interlibrary cooperation and resource sharing (LSCA Title III). The Library of Michigan's LSCA Program Goals are outlined, and a map of Congressional Districts (1995) is also provided. (AEF)