House Bill 5798 would amend Michigan’s Income Tax Act to create two new, parallel business tax credit programs administered by the Michigan Strategic Fund, one in new section 279 and one in new section 678. Under each section, a qualified taxpayer that receives preapproval and later a certificate of completion could claim a credit equal to 25% of eligible investment in eligible property, with the potential for a larger preapproval credit of up to 50% for projects involving historic rehabilitation, rural projects, or projects in low- and moderate-income census tracts. The bill is designed to support redevelopment projects on property that is a facility, historic resource, blighted property, or functionally obsolete property.
The bill establishes a detailed application, preapproval, and completion process. Applicants must show local support, financial feasibility, project need, and that the investment would not occur without the credit. The Michigan Strategic Fund would review projects based on criteria such as whether the project redevelops vacant or blighted property, catalyzes revitalization, and is located in a walkable downtown, node, or corridor. Approved projects would receive preapproval letters stating the maximum investment and credit amount, and credits would be claimed only after completion is verified and a certificate of completion is issued.
HB 5798 also sets program limits and administrative rules. The total amount of credits approved under sections 279 and 678 combined could not exceed $200 million per calendar year, with at least 20% reserved for rural projects or small projects. A single project generally could not receive more than $10 million in credits, though an additional credit of up to $5 million could be approved for certain projects involving federal historic rehabilitation credits, low-income housing credits, or community development entity investments. The bill allows unused annual credit authority to carry forward, permits limited amendments to approved projects, allows assignment and monetization of credits, and provides special refund procedures for nonprofit corporations.
The bill would also add reporting requirements for the Michigan Strategic Fund to provide annual project and investment information to legislative committees. It defines key terms such as eligible investment, eligible property, blighted property, historic resource, rural project, and small project, and it ties the credit amounts to inflation beginning in 2028 using the Detroit Consumer Price Index. The bill would amend the state tax code by adding these new credit sections and would apply only if companion bills identified in the enacting section are also enacted.
Because no committee transcripts or recorded votes were provided, there is no documented debate or roll-call history to assess direct legislative sentiment. Based on the bill text alone, the measure appears oriented toward economic development, redevelopment, and housing/historic preservation incentives, with built-in targeting for rural and lower-income areas. The main likely points of contention are the size of the tax credit cap, the potential revenue cost to the state, the discretion given to the Michigan Strategic Fund, and whether the program sufficiently targets projects that would not happen without public subsidy.
HB 5798 would add two new sections to Michigan’s Income Tax Act creating a state business tax credit for eligible redevelopment and rehabilitation projects, administered by the Michigan Strategic Fund. It would affect taxpayers that own, lease, or are under contract to acquire eligible property, including nonprofit corporations and certain flow-through entity members, and would allow credits to be claimed, carried forward, refunded in limited form, assigned, or monetized. The bill would also impose annual reporting obligations on the fund and establish statewide annual and per-project credit caps, with special set-asides for rural and small projects.
No committee transcripts or votes were provided, so there is no recorded floor or committee sentiment to summarize. From the structure and findings embedded in the bill, the measure appears generally supportive of redevelopment, historic preservation, housing, and rural investment, suggesting a pro-incentive and pro-revitalization posture. The inclusion of caps, preapproval, reporting, and project-need tests indicates an effort to frame the credit as targeted and accountable rather than open-ended.
The most likely areas of contention are fiscal and policy design issues: the bill authorizes up to $200 million in annual credits, allows up to $10 million per project plus possible additional credits, and gives the Michigan Strategic Fund substantial discretion in selecting projects. Critics could question whether the credits will produce new investment rather than subsidize projects that would occur anyway, while supporters are likely to emphasize the preapproval standards, local support requirement, and focus on blighted, historic, rural, and low-income areas. Another possible point of debate is the ability to refund, assign, and monetize credits, which may be viewed as increasing program flexibility but also complicating oversight and reducing state revenue certainty.