January 22, 2008, Introduced by Senators JANSEN, BIRKHOLZ, PAPPAGEORGE, RICHARDVILLE, KAHN, BISHOP, SANBORN, ANDERSON, BASHAM, HARDIMAN, ALLEN, SWITALSKI, KUIPERS and VAN WOERKOM and referred to the Committee on Energy Policy and Public Utilities.
A bill to permit the establishment and maintenance of low-
income energy efficiency accounts; to provide for certain tax
deductions and tax credits; to prescribe the requirements of and
restrictions on low-income energy efficiency accounts; to provide
for the promulgation of rules; and to provide penalties and
remedies.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the "low-
income energy efficiency account program act".
Sec. 2. As used in this act:
(a) "Account holder" means a person who is the owner of an
account or the family if the account is a family account.
(b) "Commission" means the Michigan public service commission
in the department of labor and economic growth.
(c) "Contributor" means a person that makes a contribution to
an account reserve fund and is not an account holder.
(d) "Federal poverty level" means the poverty guidelines
published annually in the federal register by the United States
department of health and human services under its authority to
revise the poverty line under section 673(2) of subtitle B of title
VI of the omnibus budget reconciliation act of 1981, Public Law 97-
35, 42 USC 9902.
(e) "Fiduciary organization" or "organization" means a
charitable organization exempt from taxation under section
501(c)(3) of the internal revenue code, 26 USC 501, that is
approved by the commission to manage a reserve fund. A fiduciary
organization may also be a program site.
(f) "Financial institution" means a state chartered bank,
state chartered savings bank, savings and loan association, credit
union, or trust company; or a national banking association or
federal savings and loan association or credit union.
(g) "Low-income energy efficiency account" or "account" means
an account established pursuant to section 4.
(h) "Low-income energy efficiency account reserve fund" or
"reserve fund" means an account established and managed by a
fiduciary organization housed at a financial institution. The
reserve fund holds money that will be used to match participant
savings based on a participant savings plan agreement.
(i) "Program" means the account program established in section
3.
(j) "Program site" means a charitable organization exempt from
taxation under section 501(c)(3) or 501(c)(14) of the internal
revenue code, 26 USC 501, that is approved by the commission to
implement the account program.
Sec. 3. (1) The account program is established within the
commission. The program shall provide eligible individuals and
families with an opportunity to establish accounts to be used for
energy efficiency purchases as provided in section 4.
(2) The commission shall establish policies and procedures for
the program.
(3) In reviewing the qualifications of fiduciary organizations
and program sites, the commission shall consider all of the
following factors:
(a) The not-for-profit status of the organization.
(b) The fiscal accountability of the organization.
(c) The ability of the organization to provide or raise money
for matching contributions.
(d) The significance and quality of proposed auxiliary
services to support the goals of the program.
(e) The ability to maintain and manage necessary program data
for tracking account holders and participants in the program and
for development of reports as required under section 9.
(4) The commission shall select fiduciary organizations to
provide technical assistance and support to program sites and
establish and manage reserve accounts on a not-for-profit basis. In
reviewing the qualifications of fiduciary organizations, the
commission shall consider the ability of the fiduciary
organizations to do all of the following:
(a) Administer 1 or more reserve funds to provide matching
funds for account holders pursuant to participant savings plan
agreements.
(b) Administer any money appropriated by this state for the
purposes of this act.
(c) Collaborate with program sites on a regional basis.
(d) Provide technical assistance and support to program sites
to assist them to effectively administer programs.
(e) Work in conjunction with approved program sites to hold,
manage, and disburse match funds for accounts as provided in
section 5.
(f) Maintain and manage necessary program data for tracking
account holders and participants in the program and for development
reports as required under section 9.
(5) The commission shall select program sites to administer
the accounts on a not-for-profit basis. In reviewing the
qualifications of program sites, the commission shall consider the
ability of the program site to do all of the following:
(a) Develop and implement participant savings plan agreements
to be used with account holders that include at least all of the
following:
(i) The purpose for which the account holder's account is
established.
(ii) The schedule of deposits that the account holder will make
to the account.
(iii) The agreed-upon amount of matching funds and the projected
date when those matching funds will be provided.
(b) Develop a partnership with all account holders with whom
the program site has a participant savings plan agreement to assist
the account holder to effectively make financial decisions relating
to the use of the funds available through the account and to offer
support services to maximize the opportunities provided by the
account program.
(6) The commission shall work cooperatively with financial
institutions, fiduciary organizations, program sites, and
contributors to implement the programs under this act.
Sec. 4. (1) An individual or family whose household income is
less than or equal to 200% of the federal poverty level for an
individual or for that family's family size may apply to a program
site to establish an account.
(2) A program site may approve applications to the extent that
the program site has match funds available to meet match
commitments in participant savings plan agreements.
(3) A program site may reject an application made under
subsection (1) if approving the application would result in the
establishment of an account by 1 or more of the members of a family
that has established an account for the same person for the same
purpose.
(4) If the program site approves the individual's or the
family's application to establish an account, the individual shall
do all of the following:
(a) Establish the account with a financial institution.
(b) Enter into a participant savings plan agreement with a
program site.
(c) Declare, with the approval of the program site, the
purpose for which the account is established.
(d) Any other criteria required by the program site.
(5) An account may be established only to pay qualified
expenses as provided in subsection (6).
(6) An account shall be established for the purchase of energy
efficient windows, insulation, and other energy efficient products
for the primary residence of an individual account holder.
(7) An account established under this section shall be an
account that requires 2 signatures for withdrawals. The 2 required
signatures shall be those of the account holder and an
administrator of the program site with which the account holder has
a participant savings plan agreement.
Sec. 5. (1) A program site shall enter into a participant
savings plan agreement with each account holder who is approved to
establish an account.
(2) The program site shall provide matching funds for
contributions to an account by an account holder pursuant to a
participant savings plan agreement.
(3) Matching fund distributions shall be made on behalf of an
account holder pursuant to participant savings plan agreements at
the same time that an account holder withdraws money to pay
qualified expenses. Matching distributions shall be at least a
match of $1.00 for every $1.00 withdrawn from an account by an
account holder to pay expenses for a purpose described in section
4(6) or for a purpose approved by the commission.
(4) Matching distributions under this section shall be made by
check to the order of the account holder and the entity the account
holder is paying.
Sec. 6. (1) Money withdrawn during a calendar year from an
account by an account holder for a purpose under section 4 shall be
matched by the program site as provided in the participant savings
plan agreement between the account holder and the program site.
(2) An account holder shall name at least 1 contingent
beneficiary at the time the account is established and may change
beneficiaries at any time. If an account holder dies, the account
shall be transferred to a contingent beneficiary. If the named
beneficiary is deceased or otherwise cannot accept the transfer,
the money shall be transferred to the estate of the beneficiary.
(3) A financial institution is not responsible for verifying
whether or not withdrawals from accounts held at that financial
institution are made in accordance with and for a purpose allowed
under section 4.
Sec. 7. (1) An individual who is not an account holder and who
is subject to the tax imposed by the income tax act of 1967, 1967
PA 281, MCL 206.1 to 206.532, may claim a credit under section 277
of the income tax act of 1967, 1967 PA 281, MCL 206.277, equal to
75% of the contributions made to the reserve fund of a fiduciary
organization against the tax imposed by the income tax act of 1967,
1967 PA 281, MCL 206.1 to 206.532.
(2) The administrator of a fiduciary organization that
administers 1 or more reserve funds, with the cooperation of the
participating financial institutions, shall submit the names of
contributors and the total amount that each contributor contributes
to an account reserve fund for each calendar year to the
commission. The commission shall determine the date by which the
information shall be submitted to the commission.
Sec. 8. (1) The total of all credits under section 277 of the
income tax act of 1967, 1967 PA 281, MCL 206.277, shall not exceed
$1,000,000.00 per calendar year.
(2) A taxpayer that makes a contribution to a reserve fund as
provided under section 7 shall apply to the commission for
certification that the contribution qualifies for a credit under
section 277 of the income tax act of 1967, 1967 PA 281, MCL
206.277. An application shall be approved or denied not more than
45 days after receipt of the application. If the application is not
approved or denied 45 days after the application is received by the
agency, the application is considered approved and the commission
shall issue a certificate under this subsection. If the commission
approves an application under this section, the commission shall
issue a certificate that states that the taxpayer is eligible to
claim a credit based on the contribution and the amount of the
credit. If an application is denied under this section, a taxpayer
is not prohibited from subsequently applying under this section for
another contribution.
(3) In reviewing applications for credits, the commission
shall consider all of the following criteria:
(a) The funds available to match contributions are deposited
into a reserve fund in the same year that the credit will be
claimed.
(b) The approval of the credit will not exceed the annual
maximum amount under subsection (1).
(c) The overall benefit to the program of the contribution for
which a credit is requested.
(4) A taxpayer shall not claim a credit in excess of the
amount approved under subsection (2).
(5) A taxpayer shall attach the certificate received pursuant
to subsection (2) to the return filed under the income tax act of
1967, 1967 PA 281, MCL 206.1 to 206.532, on which a credit allowed
under section 277 of the income tax act of 1967, 1967 PA 281, MCL
206.277, is claimed.
Sec. 9. (1) A fiduciary organization selected to administer an
account program under this act shall file an annual report with the
commission of the fiduciary organization’s account program
activity. The report shall be filed no later than September 30 each
year. The report shall include, but is not limited to, all of the
following:
(a) The number of accounts administered by the fiduciary
organization.
(b) The amount of deposits and matching deposits for each
account.
(c) The number of withdrawals made.
(d) The number of terminated accounts and the reasons for
termination.
(e) Any other information the commission may require for the
purpose of making a return on investment analysis.
(2) The commission shall file a report not later than December
31 each year with the clerk of the house of representatives and the
secretary of the senate that includes all of the information under
subsection (1) and copies of any changes in policies or procedures
used to administer this act that occurred during the year.
Sec. 10. The Michigan public service commission may promulgate
rules as needed to implement this act under the administrative
procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.
Sec. 11. This act takes effect January 1, 2009.
Enacting section 1. This act does not take effect unless
Senate Bill No. 1047 of
the 94th Legislature is enacted into law.