The proposed bill amends the Income Tax Act of 1967 by introducing new sections that establish a tax credit for qualified taxpayers making eligible investments in specific projects. Under the new Section 279, taxpayers can claim a credit against their tax liability based on the amount certified by the Michigan Strategic Fund, with credit percentages varying by project type—up to 50% for projects involving the rehabilitation of historic resources, rural projects, or those in low-to-moderate income (LMI) census tracts, and 25% for other projects. To qualify, taxpayers must apply for preapproval, demonstrating local support and project feasibility. The bill also sets maximum credit limits of $10 million for individual projects and $15 million for certain conditions, with an aggregate cap of $200 million for all credits approved each year.

Additionally, the bill clarifies and expands definitions related to eligible investments and properties under the Michigan Strategic Fund, including machinery, equipment, and professional fees as eligible costs, while excluding certain soft costs. It defines "eligible property" to encompass facilities, historic resources, blighted properties, and functionally obsolete properties, and introduces criteria for "qualified taxpayers," which includes nonprofit corporations. The bill also establishes definitions for "rural projects" and "small projects," with the latter defined as those with eligible investments of $10 million or less. The enactment of this bill is contingent upon the passage of two other specified bills from the 103rd Legislature, aiming to enhance investment and rehabilitation efforts in economically challenged areas of Michigan.

Statutes affected:
Senate Introduced Bill: 206.1, 206.847