INDIVIDUAL INCOME TAX; CREDIT S.B. 966 (S-1) - 968:
SUMMARY OF BILL
ON THIRD READING
Senate Bill 966 (Substitute S-1 as reported by the Committee of the Whole)
Senate Bills 967 and 968 (as reported by the Committee of the Whole)
Committee: Housing and Human Services
CONTENT
Senate Bill 966 (S-1) would amend the State Housing Development Authority Act to do the following:
-- Authorize the Michigan State Housing Development Authority (MSHDA) to establish the State Low-income Housing Tax Credit Program (Program) and reserve a State low-income housing tax credit for qualified entities.
-- Cap the aggregate amount of State tax credits reserved by MSHDA in a calendar year at $250.0 million, beginning with the 2027 calendar year, and require the cap to be adjusted by the Consumer Price Index annually after.
-- Prescribe the process for reserving and awarding a credit under the bill.
-- Specify that the credit amount awarded under the bill would have to be the lesser of the Federal low-income housing tax credit issued to the recipient in that year or one sixth of the reserved credit amount stated in the notice that MSHDA issued upon reserving a credit.
-- Prescribe the allocation of a credit for specific types of recipients.
-- Prescribe reporting requirements for recipients of the tax credit.
Senate Bill 967 would amend the Income Tax Act to allow a qualified taxpayer to claim the State low-income housing tax credit proposed by Senate Bill 966 (S-1) against the taxpayer's income tax in an amount equal to the amount allocated to the taxpayer for the tax year as provided on the eligibility certificate and reported on the allocation form, beginning on and after January 1, 2027.
Senate Bill 968 would amend the Insurance Code to allow an insurer to claim a credit against the deposit required by the Code in an amount equal to the State low-income housing tax credit for which the insurer was eligible to claim as a qualified taxpayer during the respective tax year, beginning January 1, 2027.
MCL 125.1422 et al. (S.B. 966)
Proposed MCL 206.279 et al. (S.B. 967)
MCL 500.476a & 500.476b (S.B. 968)
BRIEF RATIONALE
According to testimony, individuals in the State spend a significant amount of their income on housing, and there is an insufficient housing supply in the State. People involved in housing development and MSHDA have been using the Federal low-income housing tax credit (LIHTC) for rehabilitation and development of housing to make housing in the State more affordable. These credits are used against Federal taxes as a means of funding housing development projects and enabling lower prices for housing. Accordingly, creating a State low-income housing tax credit like the Federal LIHTC has been suggested to further incentivize development of and investment in affordable housing.