diff --git a/scripts/functional_tests.py b/scripts/functional_tests.py
index d172c0c883e..2bb934fc2a8 100644
--- a/scripts/functional_tests.py
+++ b/scripts/functional_tests.py
@@ -170,8 +170,8 @@ def main():
         template_cache_path = os.path.join( galaxy_db_path, 'compiled_templates' )
         new_file_path = tempfile.mkdtemp( prefix='new_files_path_', dir=tempdir )
         job_working_directory = tempfile.mkdtemp( prefix='job_working_directory_', dir=tempdir )
-        install_database_connection = os.environ.get( 'GALAXY_TEST_INSTALL_DBURI', None )
         database_connection, database_auto_migrate = driver_util.galaxy_database_conf(galaxy_db_path)
+        install_database_conf = driver_util.install_database_conf(galaxy_db_path, default_merged=True)
         kwargs = {}
         for dir in file_path, new_file_path, template_cache_path:
             try:
@@ -224,8 +224,7 @@ def main():
                        enable_beta_tool_formats=True,
                        auto_configure_logging=logging_config_file is None,
                        data_manager_config_file=data_manager_config_file )
-        if install_database_connection is not None:
-            kwargs[ 'install_database_connection' ] = install_database_connection
+        kwargs.update(install_database_conf)
         if not database_connection.startswith( 'sqlite://' ):
             kwargs[ 'database_engine_option_max_overflow' ] = '20'
             kwargs[ 'database_engine_option_pool_size' ] = '10'
diff --git a/test/base/driver_util.py b/test/base/driver_util.py
index b26f96cab42..7861305250a 100644
--- a/test/base/driver_util.py
+++ b/test/base/driver_util.py
@@ -23,6 +23,8 @@ from paste import httpserver
 from .nose_util import run
 from .instrument import StructuredTestDataPlugin
 
+from galaxy.util import asbool
+
 galaxy_root = os.path.abspath(os.path.join(os.path.dirname(__file__), os.path.pardir, os.path.pardir))
 GALAXY_TEST_DIRECTORY = os.path.join(galaxy_root, "test")
 TOOL_SHED_TEST_DATA = os.path.join(GALAXY_TEST_DIRECTORY, "tool_shed", "test_data")
@@ -127,6 +129,20 @@ def galaxy_database_conf(db_path):
     return database_connection, database_auto_migrate
 
 
+def install_database_conf(db_path, default_merged=False):
+    if 'GALAXY_TEST_INSTALL_DBURI' in os.environ:
+        install_galaxy_database_connection = os.environ['GALAXY_TEST_INSTALL_DBURI']
+    elif asbool(os.environ.get('GALAXY_TEST_INSTALL_DB_MERGED', default_merged)):
+        install_galaxy_database_connection = None
+    else:
+        install_galaxy_db_path = os.path.join(db_path, 'install.sqlite')
+        install_galaxy_database_connection = 'sqlite:///%s' % install_galaxy_db_path
+    conf = {}
+    if install_galaxy_database_connection is not None:
+        conf["install_database_connection"] = install_galaxy_database_connection
+    return conf
+
+
 def _get_static_settings():
     """Configuration required for Galaxy static middleware.
 
diff --git a/test/tool_shed/functional_tests.py b/test/tool_shed/functional_tests.py
index 7eb95d487f9..0f9708a931a 100644
--- a/test/tool_shed/functional_tests.py
+++ b/test/tool_shed/functional_tests.py
@@ -20,7 +20,6 @@ from galaxy.webapps.tool_shed import buildapp as toolshedbuildapp
 from galaxy.webapps.tool_shed.app import UniverseApplication as ToolshedUniverseApplication
 # This is for the galaxy application.
 from galaxy.app import UniverseApplication as GalaxyUniverseApplication
-from galaxy.util import asbool
 from galaxy.web import buildapp as galaxybuildapp
 
 from functional import database_contexts
@@ -107,13 +106,7 @@ def main():
     else:
         toolshed_database_connection = 'sqlite:///' + os.path.join( shed_db_path, 'community_test.sqlite' )
     galaxy_database_connection, galaxy_database_auto_migrate = driver_util.galaxy_database_conf(galaxy_db_path)
-    if 'GALAXY_TEST_INSTALL_DBURI' in os.environ:
-        install_galaxy_database_connection = os.environ[ 'GALAXY_TEST_INSTALL_DBURI' ]
-    elif asbool( os.environ.get( 'GALAXY_TEST_INSTALL_DB_MERGED', default_install_db_merged ) ):
-        install_galaxy_database_connection = galaxy_database_connection
-    else:
-        install_galaxy_db_path = os.path.join( galaxy_db_path, 'install.sqlite' )
-        install_galaxy_database_connection = 'sqlite:///%s' % install_galaxy_db_path
+    install_database_conf = driver_util.install_database_conf(galaxy_db_path, default_merged=False)
     tool_shed_global_conf = driver_util.get_webapp_global_conf()
     tool_shed_global_conf[ '__file__' ] = 'tool_shed_wsgi.ini.sample'
     kwargs = dict( admin_users='test@bx.psu.edu',
@@ -205,7 +198,6 @@ def main():
                        allow_user_deletion=True,
                        admin_users='test@bx.psu.edu',
                        allow_library_path_paste=True,
-                       install_database_connection=install_galaxy_database_connection,
                        database_connection=galaxy_database_connection,
                        database_auto_migrate=galaxy_database_auto_migrate,
                        datatype_converters_config_file="datatype_converters_conf.xml.sample",
@@ -234,8 +226,9 @@ def main():
                        update_integrated_tool_panel=False,
                        use_heartbeat=False )
 
+        kwargs.update(install_database_conf)
         # ---- Build Galaxy Application --------------------------------------------------
-        if not galaxy_database_connection.startswith( 'sqlite://' ) and not install_galaxy_database_connection.startswith( 'sqlite://' ):
+        if not galaxy_database_connection.startswith( 'sqlite://' ):
             kwargs[ 'database_engine_option_pool_size' ] = '10'
             kwargs[ 'database_engine_option_max_overflow' ] = '20'
         galaxyapp = GalaxyUniverseApplication( **kwargs )