HB 5807: Insurance: other; housing opportunity tax credits against the retaliatory tax; provide for. Amends secs. 476a & 476b of 1956 PA 218 (MCL 500.476a & 500.476b). TIE BAR WITH: HB 5805'26, HB 5806'26 - Michigan

As Passed by the Senate → Substitute (H-1) · 5 edits

MODERATE

The House substitute (H-1) significantly simplifies the housing opportunity tax credit subtraction mechanism in section 476a(8), removes the recapture provision entirely, eliminates the detailed definitions subsection, and changes the companion bill requirement from Senate Bill 966 to House Bill 5805. The net effect is a much shorter and less complex framework for how alien or foreign insurers claim housing opportunity tax credit subtractions against the reciprocal tax imposed under this section.

REQUIREMENT

Subsection (8) was completely rewritten. The old version used a 'qualified taxpayer' concept with multiple categories (owners with eligibility statements, owners pending approval, and insurers with direct or indirect interests through flow-through entities) and detailed timing rules tied to specific subsections of the state housing development authority act. The new version simply allows any alien or foreign insurer to subtract the amount of any housing opportunity tax credit awarded under section 22e that it is allowed to claim against this tax, requiring only that it attach a copy of the eligibility statement or allocation report and that its name, address, TIN, and credit amount appear on the allocation report.

Old subsection (9), which provided detailed procedures for claiming the subtraction (attaching approval notices when eligibility statements were pending, filing amended returns when allocation reports were updated to adjust credit amounts), was removed entirely. Some of this functionality is folded into the simplified new subsection (8).

ENFORCEMENT

Old subsection (10), which required recapture of housing opportunity tax credits when a corresponding federal low-income housing tax credit for the same project was recaptured or disallowed under IRC section 42, was removed entirely. This eliminates the mechanism that would have added back previously claimed subtractions if the federal credit was later clawed back.

DEFINITION

Old subsection (11), which defined terms including 'allocation report,' 'approval notice,' 'eligibility statement,' 'federal low-income housing tax credit,' 'flow-through entity,' 'housing opportunity tax credit,' 'owner,' 'qualified project,' 'authority,' and 'qualified taxpayer,' was removed. The new subsection (8) simply incorporates definitions by reference to section 22e of the state housing development authority act for four terms: allocation report, award, eligibility statement, and housing opportunity tax credit.

SCOPE

The enacting section now requires House Bill No. 5805 (instead of Senate Bill No. 966) and House Bill No. 5806 to be enacted for this bill to take effect, changing the legislative package composition.

As Passed by the House → As Passed by the Senate · 6 edits · Jul 3, 2026

MODERATE

The Senate substantially rewrote the housing opportunity tax credit subtraction provisions (subsection 8) and added three new subsections (9, 10, and 11) that introduce defined terms like 'qualified taxpayer' and 'qualified project,' add procedural rules for claiming the subtraction, create a recapture mechanism tied to federal low-income housing tax credit disallowances, and provide formal definitions. The effective date conditions were also changed from requiring three House bills to requiring one Senate bill and one House bill.

REQUIREMENT

Subsection (8) was rewritten to use defined terms ('qualified taxpayer,' 'qualified project') and to specify that the subtraction amount equals the credit listed on the allocation report for that specific taxpayer and project, rather than a general reference to any housing opportunity tax credit awarded. It also distinguishes timing rules based on whether the owner received an eligibility statement versus an approval notice.

New subsection (9) adds procedural rules: insurers must attach an eligibility statement to claim the subtraction; if the authority has not yet issued one, the insurer may attach an approval notice instead or wait; and if an updated allocation report changes credit amounts, affected insurers must file amended returns.

ENFORCEMENT

New subsection (10) creates a recapture mechanism: if federal low-income housing tax credits for the same project are recaptured or disallowed under IRC section 42, the state housing opportunity tax credit subtraction must be recaptured in the same proportion and added back to the insurer's tax liability in the year the event is identified on the federal return.

DEFINITION

New subsection (11) adds formal definitions for 'allocation report,' 'approval notice,' 'eligibility statement,' 'federal low-income housing tax credit,' 'flow-through entity,' 'housing opportunity tax credit,' 'owner,' 'qualified project,' 'authority,' and 'qualified taxpayer.' The 'qualified taxpayer' definition includes three categories: owners with eligibility statements, owners with pending final cost certifications, and alien or foreign insurers holding direct or indirect interests through flow-through entities.

SCOPE

The effective date conditions changed from requiring enactment of three House bills (HB 5101, HB 5805, HB 5806) to requiring enactment of two bills: Senate Bill 966 and House Bill 5806. This removes the dependency on HB 5101 and HB 5805 and substitutes a Senate bill.

TECHNICAL

Minor technical changes throughout subsection (1) replacing 'the subtraction under subsection (8)' with 'the subtraction described in subsection (8),' and changing 'through' to 'through to' in cross-references in subsection (4)(d).

House Concurred Bill → As Passed by the Senate · 1 edit · Jul 3, 2026

MINOR

The amendment restructures a sentence defining which foreign insurers are subject to the housing opportunity tax credit rules. The change breaks the long sentence into multiple lines for better readability and clarity, ensuring the definition of 'flow-through entities' and the conditions for claiming the credit are easier to parse.

TECHNICAL

The text was reformatted by splitting a single long sentence into three lines to improve readability and visual structure without altering the legal meaning or scope of the provision.

Substitute (S-1) - 3 → House Concurred Bill · 2 edits

MINOR

The bill was converted from a Senate substitute version to the final House concurred version, which corrected formatting errors and a typo in the title. The substantive policy content, including tax provisions and definitions, remained unchanged. The final version added a new requirement for the bill to take effect only if two other specific bills are also enacted.

Scope change

The bill's scope and applicability remain unchanged; the text now reflects the final agreed-upon version of the legislation.

TECHNICAL

Corrected the header from 'SENATE SUBSTITUTE FOR HOUSE BILL' to 'House BILL' and fixed a typo changing 'THE PEOPLE' to 'the peoplE'.

REQUIREMENT

Added an 'Enacting section' stating that this bill does not take effect unless two other specific bills (Senate Bill No. 966 and House Bill No. 5806) are also enacted into law.

Substitute (H-3) → Substitute (S-1) - 6 · 4 edits

MODERATE

The bill was amended to shift from a House-drafted version to a Senate substitute, which significantly simplified the rules for calculating tax burdens on foreign insurers. The most substantive change is the replacement of a complex, multi-step calculation involving the subtraction of housing opportunity tax credits with a streamlined process that directly allows qualified foreign insurers to subtract specific housing credits from their tax liability. Additionally, the definition of when an insurer is considered 'alien or foreign' was tightened to require compliance with specific operational standards in the state.

Scope change

The scope of the tax burden calculation was narrowed and clarified to apply specifically to 'qualified taxpayers' and 'qualified projects' rather than all foreign insurers claiming any credit.

REQUIREMENT

Replaced a complex calculation requiring the subtraction of taxes under subsection (8) with a simpler reference to 'taxes described in subsection (8)' to improve clarity.

Completely rewrote the housing opportunity tax credit section to replace a complex eligibility and subtraction process with a direct mechanism for qualified insurers to claim specific credits against their tax liability.

ELIGIBILITY

Changed the criteria for determining if an insurer is 'alien or foreign' by adding a requirement that the insurer must comply with specific state operational standards.

TECHNICAL

Updated the bill header and tracking numbers to reflect the Senate substitute version (S-1) instead of the House version (H-3).

Substitute (H-1) - 2 → Substitute (H-3) · 2 edits

MINOR

The bill version was updated from H-1 to H-3, reflecting a revision in the legislative process. The most significant substantive change is the addition of a new requirement for House Bill No. 5101 to be enacted alongside the other related bills before this act takes effect. This expands the conditions for the law's implementation, ensuring that a specific companion measure is passed to allow the current legislation to become active.

Scope change

The scope of applicability for this act has been conditionally expanded; it will not take effect unless three specific bills, including the newly added HB 5101, are all enacted into law.

REQUIREMENT

Added a mandatory requirement that House Bill No. 5101 must be enacted for this bill to take effect, creating a new dependency for the law's implementation.

TECHNICAL

Updated the bill version identifier from H-1 to H-3 and changed the associated tracking codes.

As Passed by the House → Substitute (H-1) · 3 edits

MINOR

The bill was reformatted from a standard House version to a Substitute version, which involved removing the original title page and reorganizing the text into a continuous, numbered format. No substantive policy changes, legal requirements, or financial figures were altered.

TECHNICAL

The document structure was changed from a multi-page layout with headers and footers to a single, continuous text block with line numbers added for tracking.

Original title page elements, including the standalone 'House BILL NO. 5807' header and decorative spacing, were removed.

New line numbers (1-29) were inserted throughout the text to facilitate legislative tracking and comparison.

House Introduced Bill → As Passed by the House · 4 edits · Jun 25, 2026

MODERATE

The bill was amended to correct a typo in the title and significantly restructure the tax credit mechanism. The primary change replaces a credit system with a new 'subtraction' method, allowing foreign insurers to reduce their tax burden by the amount of a state housing opportunity tax credit they receive. This change also updates the list of related bills required for the act to take effect.

Scope change

The bill now applies to foreign insurers claiming a specific housing-related tax credit, replacing the previous reference to a different income tax credit.

TECHNICAL

Corrected a typo in the title changing 'HOUSE' to 'House' and added a 'substitute for' header.

REQUIREMENT

Replaced the requirement to claim a credit against the tax with a new requirement to subtract the housing opportunity tax credit from the total burdens imposed by foreign states.

Added specific documentation requirements, mandating that insurers attach eligibility statements or allocation reports to their annual tax returns to claim the subtraction.

TIMELINE

Updated the effective date conditions to reference new bill numbers (HB 5101, HB 5805, and HB 5806) instead of the original HB 5805 and HB 5806.

Insurance: other; housing opportunity tax credits against the retaliatory tax; provide for. Amends secs. 476a & 476b of 1956 PA 218 (MCL 500.476a & 500.476b). TIE BAR WITH: HB 5805'26, HB 5806'26

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