May 22, 2008, Introduced by Reps. Bieda, Angerer, Sheltrown, Byrnes, Opsommer, Valentine, Condino, Marleau, Moolenaar, McDowell, Mayes, Lahti, Young, Stahl, Calley, Corriveau, Kathleen Law, Simpson, LeBlanc, Knollenberg, Byrum and Meisner and referred to the Committee on Tax Policy.
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
(MCL 206.1 to 206.532) by adding sections 281, 282, and 283.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 281. (1) For the 2008 tax year and each tax year after
2008, a taxpayer that purchases and installs certain qualified
energy efficient home improvements for his or her principal
residence during the tax year may claim a credit against the tax
imposed by this act as follows for each qualified energy efficient
home improvement:
(a) For a gas furnace that achieves an annual fuel utilization
efficiency rate of not less than 90, $350.00.
(b) For an oil furnace that achieves an annual fuel
utilization efficiency rate of not less than 83, $350.00.
(c) For a direct vent gas unit heater that has an annual fuel
utilization efficiency rate of not less than 80, $100.00.
(d) For a storage type water heater that has an energy factor
of not less than 0.62, $25.00.
(e) For a tankless water heater that has an energy factor of
not less than 0.62, $200.00.
(f) For an air-source heat pump with electric supplemental
heat that has a heating seasonal performance factor of at least
8.2, a seasonal energy efficiency ratio of at least 14, and an
energy efficiency ratio of at least 11.5, $50.00.
(g) For an air-source heat pump with electric supplemental
heat that has a heating seasonal performance factor of at least 8.5
and an energy efficiency ratio of at least 12, $100.00.
(h) For an air-source heat pump with fossil fuel supplemental
heat that has a heating seasonal performance factor of at least
8.2, a seasonal energy efficiency ratio of at least 14, and an
energy efficiency ratio of at least 11.5, $250.00.
(i) For an air-source heat pump with fossil fuel supplemental
heat that has a heating seasonal performance factor of at least 8.5
and an energy efficiency ratio of at least 12, $300.00.
(j) For replacing electric heat with a heat pump that has a
heating seasonal performance factor of at least 8.2, a seasonal
energy efficiency ratio of at least 14, and an energy efficiency
ratio of at least 11.5, $100.00.
(k) For replacing electric heat with a high-efficiency heat
pump that has a heating seasonal performance factor of at least 8.5
and an energy efficiency ratio of at least 12, $200.00.
(l) For a water-source geothermal heat pump that has a
coefficient of performance of not less than 4.0, $300.00.
(m) For air sealing, $1.00 per cubic feet per minute reduced
or $600.00, whichever is less.
(n) For a blower door test, $75.00.
(o) For duct insulation that is at least R-8, 50% of the
installation costs or $300.00, whichever is less.
(p) For duct sealing, $1.00 per cubic feet per minute reduced
or $300.00, whichever is less.
(q) For a duct blaster test, $50.00.
(r) For replacing ceiling insulation that was R-18 or less
with insulation that is R-30 or better, $0.25 per square foot.
(s) For replacing wall insulation that was R-4 or less with
insulation that is R-13 or better or fill wall-cavity, $0.30 per
square foot.
(t) For replacing floor insulation that was R-11 or less with
insulation that is R-21 or better or fill floor-cavity, $0.45 per
square foot.
(u) For a window with a U-value of at least 0.40, $1.25 per
square foot.
(v) For a window with a U-value of at least 0.35, $2.00 per
square foot.
(w) For a window with a U-value of 0.30 or less, $2.25 per
square foot.
(x) For a gas boiler that has an annual fuel utilization
efficiency of at least 90, $350.00 plus $0.50 per linear foot of
insulation that is at least R-8.
(2) To claim the credit allowed under this section, the
taxpayer shall, on a form or in a format as prescribed by the
department, provide verification of the purchase and installation
of the qualified energy efficient home improvement along with
documentation of its energy efficiency standards and shall attach
that verification to his or her annual return under this act for
the tax year in which the credit under this section is claimed.
(3) 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,
that portion that exceeds the tax liability shall not be refunded
but may be carried forward to offset tax liability in subsequent
tax years for 4 years or until used up, whichever occurs first.
(4) A taxpayer that claims a credit under this section is not
prohibited from claiming a credit under section 282 or 283.
However, the taxpayer shall not claim a credit under this section
and section 282 or 283 based on the same costs and expenses.
(5) As used in this section:
(a) "Principal residence" means that term as defined under
section 7dd of the general property tax act, 1893 PA 206, MCL
211.7dd.
(b) "Qualified energy efficient home improvement" means an
energy efficient object, material, or system which is specifically
and primarily designed to reduce the heat loss or gain of a
dwelling when installed in or on such dwelling, which meets the
criteria under subsection (1), and which component can reasonably
be expected to remain in use for at least 5 years.
Sec. 282. (1) A taxpayer that purchases an eligible energy
efficient residential structure and claims an exemption for that
structure as a principal residence under section 7cc of the general
property tax act, 1893 PA 206, MCL 211.7cc, may claim a credit
against the tax imposed by this act equal to the eligible
expenditures incurred by the taxpayer during the tax year. A
taxpayer shall not claim a credit under this section unless the
energy efficient residential structure has been certified by a
certified residential structure energy rating system rater. The
taxpayer shall attach the certificate to the annual return filed
under this act on which the credit under this section is claimed.
(2) The certificate required under subsection (1) shall state,
at a minimum, that the energy efficient residential structure
satisfies all of the following:
(a) Has an annual level of heating and cooling energy
consumption that is at least 50% below the annual level of heating
and cooling energy consumption of a comparable residential
structure that was constructed in accordance with the standards of
chapter 11 of the 2003 international residential code.
(b) Has heating and cooling equipment that meets the energy
efficiency standards prescribed by the federal regulations
promulgated pursuant to the energy policy and conservation act, 42
USC 6201 to 6422, that were in effect at the time of the
construction of the residential structure.
(c) Has building improvements that account for at least 20% of
the reduced annual heating and cooling energy consumption levels.
(3) The credit allowed under this section shall not exceed
$3,000.00 per eligible energy efficient residential structure
purchased during the tax year by the taxpayer. If the credit
allowed under this section for the tax year and any unused
carryforward of the credit allowed by this section exceed the
taxpayer's tax liability for the tax year, that portion that
exceeds the tax liability for the tax year shall not be refunded
but may be carried forward to offset tax liability in subsequent
tax years for 4 years or until used up, whichever occurs first.
(4) A taxpayer that claims a credit under this section is not
prohibited from claiming a credit under section 281 or 283.
However, the taxpayer shall not claim a credit under this section
and section 281 or 283 based on the same costs and expenses.
(5) As used in this section:
(a) "Certified residential structure energy rating system
rater" means any of the following:
(i) An individual who is not related to the contractor of the
residential structure that is to be certified and who has been
accredited or otherwise authorized by RESNET or an equivalent
accrediting institution to use energy performance measurement
methods approved by RESNET or the equivalent accrediting
institution.
(ii) An individual who is certified, licensed, or otherwise
permitted by state law, the international code council, or other
code programs to conduct energy assessments or residential
structure energy inspections.
(iii) An individual who is an employee or other representative
of a utility or local building regulatory authority if that
individual satisfies the criteria under subparagraph (i) or (ii).
(b) "Eligible energy efficient residential structure" means a
newly constructed residential structure that is located in this
state, that is constructed by a person licensed under article 24 of
the occupational code, 1980 PA 299, MCL 339.2401 to 339.2412, that
was issued the building permit as required under the Stille-
DeRossett-Hale single state construction code act, 1972 PA 230, MCL
125.1501 to 125.1531, that is certified in accordance with
subsection (2), and that is completed during the tax year for which
a credit is sought under this section.
(c) "Eligible expenditures" means costs incurred by the
taxpayer for any of the following:
(i) Energy efficient heating or cooling system.
(ii) Insulation material or system that is specifically and
primarily designed to reduce the heat gain or loss of a residential
structure when installed in or on that residential structure.
(iii) Exterior windows including skylights.
(iv) Exterior doors.
(v) Any roof installed on a residential structure that has
appropriate pigmented coatings which are specifically and primarily
designed to reduce the heat gain or loss of a residential structure
when installed in or on that residential structure and which meet
energy star program requirements.
(d) "Equivalent accrediting institution" means the state
energy office or any other rating network approved by the
department of labor and economic growth.
(e) "Residential structure" means any detached 1- and 2-family
dwelling, townhouse, or accessory structure regulated by the
Michigan residential code promulgated pursuant to the Stille-
DeRossett-Hale single construction code act, 1972 PA 230, MCL
125.1501 to 125.1531.
(f) "RESNET" means the nonprofit corporation known as the
residential energy services network.
Sec. 283. (1) A taxpayer that purchases an eligible green
residential structure may claim a credit against the tax imposed by
this act equal to $5,000.00 per eligible green residential
structure. A taxpayer that invests in an eligible renovation or
addition to his or her principal residence may claim a credit
against the tax imposed by this act equal to 30% of the costs
incurred for the eligible renovation or addition or $2,000.00,
whichever is less. A taxpayer shall not claim a credit under this
section unless a certificate has been issued to the taxpayer for
the green residential structure or the renovation or addition as
prescribed under subsection (2). The taxpayer shall attach the
certificate to the annual return filed under this act on which the
credit under this section is claimed.
(2) The certificate required under subsection (1) shall be
issued by 1 of the following and shall state, at a minimum, that
the green residential structure or the renovation or addition meets
or exceeds the following standards of that certifying body:
(a) For a certificate issued by green built Michigan, the
green residential structure or renovation or addition, whichever is
applicable, meets or exceeds the silver certification standards
established under the green built Michigan program and in effect at
the time of the construction or renovation.
(b) For a certificate issued under the national green building
program, the green residential structure or renovation or addition,
whichever is applicable, meets or exceeds the silver certification
standards established under the national green building program and
in effect at the time of the construction or renovation.
(c) For a certificate issued by any other recognized domestic
or international organization that is approved by the department of
labor and economic growth, the green residential structure or
renovation or addition, whichever is applicable, meets or exceeds
certification standards established by that domestic or
international organization that are, at a minimum, comparable to
the silver certification standards established under the green
built Michigan program or the national green building program.
(3) If the credit allowed under this section for the tax year
and any unused carryforward of the credit allowed by this section
exceed the taxpayer's tax liability for the tax year, that portion
that exceeds the tax liability for the tax year shall not be
refunded but may be carried forward to offset tax liability in
subsequent tax years for 4 years or until used up, whichever occurs
first.
(4) A taxpayer that claims a credit under this section is not
prohibited from claiming a credit under section 281 or 282.
However, the taxpayer shall not claim a credit under this section
and section 281 or 282 based on the same costs and expenses.
(5) As used in this section:
(a) "Eligible green residential structure" means a newly
constructed residential structure that is located in this state,
that is constructed by a person licensed under article 24 of the
occupational code, 1980 PA 299, MCL 339.2401 to 339.2412, that was
issued a building permit as required under the Stille-DeRossett-
Hale single state construction code act, 1972 PA 230, MCL 125.1501
to 125.1531, that is certified in accordance with subsection (2),
and that is completed during the tax year for which a credit is
sought under this section.
(b) "Eligible renovation or addition" means a renovation or
addition made to an existing residential structure that is located
in this state, that is renovated or conducted by a person licensed
under article 24 of the occupational code, 1980 PA 299, MCL
339.2401 to 339.2412, that was issued a building permit for the
renovation or addition as required under the Stille-DeRossett-Hale
single state construction code act, 1972 PA 230, MCL 125.1501 to
125.1531, that is certified in accordance with subsection (2), and
that is completed during the tax year for which a credit is sought
under this section.
(c) "Green built Michigan" means the organization that
measures and evaluates the environmental performance of residential
buildings according to its standards, that provides education to
building professionals and homeowners regarding green building and
remodeling, and that qualifies for exemption from federal income
taxation under section 501(c)(3) of the internal revenue code.
(d) "National green building program" means the education,
verification, and certification program sponsored by the national
association of home builders and the national association of home
builders research center.
(e) "Principal residence" means that term as defined under
section 7dd of the general property tax act, 1893 PA 206, MCL
211.7dd.
(f) "Residential structure" means any 1- and 2-family
dwelling, townhouse, or accessory structure that is regulated by
the Michigan residential code promulgated pursuant to the Stille-
DeRossett-Hale single construction code act, 1972 PA 230, MCL
125.1501 to 125.1531.