Bill Text: MI HB5425 | 2017-2018 | 99th Legislature | Introduced

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Bill Title: Corporate income tax; credits; tax credit for development of qualified housing for veterans; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.713) by adding sec. 675.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2018-01-18 - Bill Electronically Reproduced 01/17/2018 [HB5425 Detail]

Download: Michigan-2017-HB5425-Introduced.html

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HOUSE BILL No. 5425

 

 

January 17, 2018, Introduced by Rep. Kosowski and referred to the Committee on Military and Veterans Affairs.

 

     A bill to amend 1967 PA 281, entitled

 

"Income tax act of 1967,"

 

(MCL 206.1 to 206.713) by adding section 675.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 675. (1) For tax years that begin on and after January 1,

 

2019, a taxpayer may claim a credit against the tax imposed by this

 

part in an amount equal to 10% of its approved costs incurred for

 

the development of qualified housing for veterans. To be eligible

 

for the credit under this section, the taxpayer shall submit an

 

application to the Michigan state housing development authority for

 

approval of the proposed project for the development of qualified

 

housing for veterans. The application shall include all of the

 

following:

 

     (a) The location and identification of the property and

 

buildings that are the subject of the proposed project.

 

     (b) The estimated cost of the proposed project.

 

     (c) The timeline for the completion of the proposed project.

 

     (d) Any other criteria that the authority considers

 

appropriate for the determination of approval under this section.

 

     (2) Upon completion of a proposed project approved under

 

subsection (1), the taxpayer shall submit documentation to the

 

authority that the project is completed, an accounting of the cost

 

of the project, the approved costs incurred by the taxpayer, and

 

that the taxpayer has received a certificate of occupancy from the

 

local municipality in which the housing of veterans is located. The

 

authority shall verify that the project is completed. When

 

completion is verified, the authority shall issue a certificate of

 

completion to the taxpayer. The certificate of completion shall

 

state all of the following:

 

     (a) The total cost of the project and the amount of the

 

approved costs incurred by the taxpayer.

 

     (b) The amount of the credit allowed to be claimed under this

 

section for the taxpayer for the designated tax year.

 

     (c) The taxpayer's federal employer identification number or

 

the Michigan department of treasury number assigned to the

 

taxpayer.

 

     (3) A taxpayer shall not claim a credit under this section

 

unless the authority has issued a certificate of completion to the

 

taxpayer. The taxpayer shall attach the certificate of completion

 

to the annual return filed under this act on which a credit under

 

this section is claimed.

     (4) The total amount of credits allowed under this section for

 

any tax year shall not exceed $5,000,000.00. If the credit allowed

 

under this section for the tax year and any unused carryforward of

 

the credit allowed under this section exceed the tax liability of

 

the taxpayer for the tax year, the excess shall not be refunded,

 

but may be carried forward as an offset to the tax liability in

 

subsequent tax years for 10 tax years or until the excess credit is

 

used up, whichever occurs first.

 

     (5) Not later than March 1, 2020 and each March 1 thereafter,

 

the department, in cooperation with the authority, shall submit to

 

the governor, the chairperson of the senate finance committee, the

 

chairperson of the house tax policy committee, the director of the

 

senate fiscal agency, and the director of the house fiscal agency

 

an annual report concerning the operation and effectiveness of the

 

credit under this section. The requirements of section 28(1)(f) of

 

1941 PA 122, MCL 205.28, do not apply to disclosure of tax

 

information required by this subsection. The report shall include

 

all of the following:

 

     (a) A brief assessment of the overall effectiveness of the

 

credit under this section at providing veterans with qualified

 

housing in this state during the immediately preceding calendar

 

year.

 

     (b) The number of taxpayers that applied for a tax credit

 

under this section during the immediately preceding year, the

 

number of projects for the development of qualified housing for

 

veterans in this state for which credits were begun or completed in

 

the immediately preceding year, and the locations of those

projects.

 

     (c) The amount of approved costs incurred by each taxpayer

 

identified in subdivision (b) to develop each project for the

 

development of qualified housing for veterans in this state.

 

     (d) The value of all tax credit certificates of completion

 

issued under this section in the immediately preceding calendar

 

year.

 

     (e) The amount known by the Michigan state housing development

 

authority of other federal, state, and local assistance provided to

 

the taxpayer in addition to the tax credit under this section.

 

     (6) As used in this section:

 

     (a) "Approved costs" means the expenditures by a taxpayer for

 

the production of qualified housing for veterans that include

 

amounts paid or incurred for the purchase of land and any

 

remediation costs; construction or rehabilitation; commissioning

 

costs; interest paid during the construction or rehabilitation

 

period; legal, architectural, engineering, and professional fees

 

allocable to construction or rehabilitation; closing costs for

 

construction or mortgage loans; recording taxes and filing fees

 

incurred with respect to construction or rehabilitation; site

 

costs, such as temporary electrical wiring, scaffolding, demolition

 

costs, and fencing and security facilities; and costs of carpeting,

 

partitions, walls and wall coverings, ceilings, lighting, plumbing,

 

electrical wiring, and ventilation. Approved costs do not include

 

the cost of telephone systems and computers other than electrical

 

wiring costs in a project.

 

     (b) "Development" means construction, reconstruction,

conversion, structural alteration, relocation, rehabilitation or

 

enlargement of any building or other structure, site remediation,

 

and any use or change in the use of any building or other

 

structure, or land or extension of use of land.

 

     (c) "Michigan state housing development authority" or

 

"authority" means the public body corporate and politic created by

 

section 21 of the state housing development authority act of 1966,

 

1966 PA 346, MCL 125.1421.

 

     (d) "Qualified housing for veterans" means any new project to

 

construct, reconstruct, or rehabilitate residential rental property

 

in which all of the units are occupied or reserved for occupancy by

 

a veteran. Any property shall not be treated as failing to be

 

residential rental property merely because part of the building is

 

used for purposes other than residential purposes.

 

     (e) "Veteran" means a person who served in the active

 

military, naval, marine, coast guard, or air service and who was

 

discharged or released from his or her service with an honorable or

 

general discharge.