SUMMARY OF HOUSE-PASSED BILL
House Bill 4379 (as reported without amendment)
House Bill 4378 (H-1) would amend the General Property Tax Act to specify that installing, replacing, or repairing a whole-home generator would be considered normal maintenance if it were not part of a structural addition or completion for the purpose of determining a property's taxable value.
House Bill 4379 would amend the Michigan Economic Growth Authority Act to amend a Michigan Compiled Laws reference within the definition of "new construction" to be consistent with the changes proposed in House Bill 4378 (H-1).
The bills are tie-barred. House Bill 4378 (H-1) is discussed in greater detail below.
The General Property Tax Act specifies that an assessor may not consider the increase in true cash value that is a result of expenditures for normal repairs, replacement, and maintenance in determining the true cash value of residential property for assessment purposes until the property is sold. The Act includes a list of repairs that are considered normal maintenance if they are not part of a structural addition or completion, such as outside painting, adding or replacing gutters and downspouts, or complete rewiring.
The bill would include in this list installing, replacing, or repairing a whole-home generator.
207.803 (H.B. 4379)
House Bill 4378 (H-1)
The bill would have a negative, though likely minimal, fiscal impact on the State and local governments. An additional property tax exemption would reduce local property tax revenue and State School Aid Fund revenue from the State Education Tax, and increase the State cost of the foundation allowance, if the per pupil foundation allowance were maintained. The cost would depend on the taxable value of the whole-house generators that received an exemption and the millage rate of the affected jurisdictions.
House Bill 4379
The bill would have little to no impact on State and local revenue. The bill would update the definition of new construction under the Michigan Economic Growth Authority Act to reflect
changes proposed by House Bill 5378 (H-1) and enacted under Public Act 116 of 2019. The definition of new construction is part of what is included under the Act's definition of new capital investment. The sections of the Act that would be affected by the bill indicate that, when the Authority enters into an agreement with a business, new capital investment is a factor in determining the amount and duration of any tax credits that would be authorized and in some cases certain certification requirements.
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.