Bill Text: MI HB5752 | 2021-2022 | 101st Legislature | Introduced
Bill Title: Individual income tax: credit; credit for qualified investments under the local revitalization pilot program; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding secs. 280 & 674. TIE BAR WITH: HB 5753'22
Spectrum: Slight Partisan Bill (Democrat 3-1)
Status: (Introduced - Dead) 2022-02-16 - Bill Electronically Reproduced 02/16/2022 [HB5752 Detail]
Download: Michigan-2021-HB5752-Introduced.html
HOUSE BILL NO. 5752
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
(MCL 206.1 to 206.847) by adding sections 280 and 674.
the people of the state of michigan enact:
Sec. 280. (1) Subject to the limitations provided under this section, a taxpayer that makes a qualified investment in a qualified organization after December 31, 2021 and before January 1, 2027 may claim a credit against the tax imposed by this part equal to 50% of the qualified investment made during the tax year. A taxpayer who is a member of a flow-through entity that makes a qualified investment in a qualified organization as provided under this section may claim a credit against the member's tax liability under this part based on the member's proportionate share of ownership or an alternative method approved by the department. To qualify for the credit under this section, the taxpayer shall request certification of the qualified investment from the Michigan strategic fund as provided under the Michigan community investment pilot program at least 60 days prior to making the investment. A taxpayer shall not claim a credit under this section unless the Michigan strategic fund has issued a certificate to the taxpayer.
(2) The board shall not approve a credit under this section for a taxpayer who has been convicted of a felony involving a fiduciary obligation or the conversion or misappropriation of funds or insurance accounts, theft, deceit, fraud, misrepresentation, or corruption. The Michigan strategic fund shall forward a copy of each certificate received pursuant to this subsection to the governor, the president of the Michigan strategic fund, 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. The requirements of section 28(1)(f) of 1941 PA 122, MCL 205.28, that prohibit an employee or authorized representative of, a former employee or authorized representative of, or anyone connected with the department from divulging any facts or information obtained in connection with the administration of a tax, do not apply to the disclosure required by this subsection. The taxpayer shall attach the certificate to the annual return filed under this part on which a credit under this section is claimed. The certificate required under this subsection shall specify all of the following:
(a) The total amount of investment made during the tax year by the taxpayer in each qualified organization.
(b) The total amount of qualified investments made in each qualified organization if different from the previous amount.
(c) The total amount of the credit under this section that the taxpayer is allowed to claim for the designated tax year.
(3) The total amount of all credits that the Michigan strategic fund may certify under this section and section 674 shall not exceed $25,000,000.00 each calendar year.
(4) If the amount of the credit allowed under this section exceeds the tax liability of the taxpayer for the tax year, that portion of the credit that exceeds the tax liability of the taxpayer for the tax year shall not be refunded but may be carried forward to offset tax liability under this part in subsequent tax years for a period not to exceed 5 tax years or until used up, whichever occurs first.
(5) As used in this section and section 674:
(a) "Board" means the board of directors of the Michigan strategic fund.
(b) "Community development programs, projects, and activities" means strategies to encourage small business development, provide affordable housing, promote financial empowerment, stimulate workforce attraction and retention, and any other strategies that assist a distressed area within a neighborhood, community, or commercial corridor or the low-income population who reside within a neighborhood or community.
(c) "Community investment pilot program" means the program established by the Michigan strategic fund pursuant to section 88u of the Michigan strategic fund act, 1984 PA 270, MCL 125.2088u.
(d) "Community investment plan" means community development programs, projects, and activities proposed by a qualified organization to assist a distressed area within a neighborhood, community, or commercial corridor or the low-income population who reside within a neighborhood or community through qualified investments.
(e) "Distressed area" means any of the following:
(i) An area located in a city with a population of at least 10,000, which area is either designated as a "blighted area" by a local legislative body pursuant to 1945 PA 344, MCL 125.71 to 125.84, or which area is determined by the authority to be blighted or largely vacant by reason of clearance of blight, if, with respect to the area, the authority determines that approval of elimination of income limits applicable in connection with authority loans has been received from the city in the form of either a resolution adopted by the highest legislative body of the city or, if the city charter provides for the mayor to be elected at large with that office specifically designated on the ballot, provides that the office of mayor is a full-time position, and provides that the mayor has the power to veto legislative actions of the legislative body of that city, a written communication from the mayor of that city.
(ii) A municipality that meets all of the following requirements:
(A) The municipality shows a negative population change from 1970 to the date of the most recent federal decennial census.
(B) The municipality shows an overall increase in the state equalized value of real and personal property of less than the statewide average increase since 1972.
(C) The municipality has a poverty rate, as defined by the most recent federal decennial census, greater than the statewide average.
(D) The municipality has had an unemployment rate higher than the statewide average unemployment rate for 3 of the preceding 5 years.
(iii) An area located in a local unit of government certified by the Michigan enterprise zone authority as meeting the criteria prescribed in section 2(f) of the neighborhood enterprise zone act, 1992 PA 147, MCL 207.772.
(f) "Low-income population" means families whose incomes do not exceed 80% of the median family income for the area.
(g) "Michigan strategic fund" means the Michigan strategic fund as described in the Michigan strategic fund act, 1984 PA 270, MCL 125.2001 to 125.2094.
(h) "Qualified investment" means cash or cash equivalent investment certified by the Michigan strategic fund that is contributed to a qualified organization to promote and support implementation of the qualified organization's community investment plan approved by the Michigan strategic fund under the community investment pilot program.
(i) "Qualified organization" means a nonprofit organization that is organized under the nonprofit corporation act, 1982 PA 162, MCL 450.2101 to 450.3192, and exempt under section 501(c)(3) of the internal revenue code and that satisfies all of the following:
(i) Has a community investment plan approved by the Michigan strategic fund under the community investment pilot program.
(ii) A majority of the organization's efforts are focused on serving 1 or more specific neighborhoods or communities with a constituency that is economically disadvantaged.
(iii) The purpose of the organization is to engage local residents and businesses to work together to undertake community development programs, projects, and activities.
(iv) Demonstrates to the Michigan strategic fund that the organization's constituency, including economically disadvantaged people, has a meaningful role in governance and direction of the organization, which may include committees, membership meetings, and representation on the board of directors.
Sec. 674. (1) Subject to the limitations provided under this section, a taxpayer that makes a qualified investment in a qualified organization after December 31, 2021 and before January 1, 2027 may claim a credit against the tax imposed by this part equal to 50% of the qualified investment made during the tax year. To qualify for the credit under this section, the taxpayer shall request certification of the qualified investment from the Michigan strategic fund as provided under the Michigan community investment pilot program at least 60 days prior to making the investment. A taxpayer shall not claim a credit under this section unless the Michigan strategic fund has issued a certificate to the taxpayer.
(2) The board shall not approve a credit under this section for a taxpayer who has been convicted of a felony involving a fiduciary obligation or the conversion or misappropriation of funds or insurance accounts, theft, deceit, fraud, misrepresentation, or corruption. The Michigan strategic fund shall forward a copy of each certificate received pursuant to this subsection to the governor, the president of the Michigan strategic fund, 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. The requirements of section 28(1)(f) of 1941 PA 122, MCL 205.28, that prohibit an employee or authorized representative of, a former employee or authorized representative of, or anyone connected with the department from divulging any facts or information obtained in connection with the administration of a tax, do not apply to the disclosure required by this subsection. The taxpayer shall attach the certificate to the annual return filed under this part on which a credit under this section is claimed. The certificate required under this subsection shall specify all of the following:
(a) The total amount of investment made during the tax year by the taxpayer in each qualified organization.
(b) The total amount of qualified investments made in each qualified organization if different from the previous amount.
(c) The total amount of the credit under this section that the taxpayer is allowed to claim for the designated tax year.
(3) The total amount of all credits that the Michigan strategic fund may certify under this section and section 280 shall not exceed $25,000,000.00 each calendar year.
(4) If the amount of the credit allowed under this section exceeds the tax liability of the taxpayer for the tax year, that portion of the credit that exceeds the tax liability of the taxpayer for the tax year shall not be refunded but may be carried forward to offset tax liability under this part in subsequent tax years for a period not to exceed 5 tax years or until used up, whichever occurs first.
Enacting section 1. This amendatory act does not take effect unless Senate Bill No.____ or House Bill No. 5753 (request no. 04737'21 **) of the 101st Legislature is enacted into law.
