HOUSE BILL No. 4340 February 27, 2001, Introduced by Rep. Frank and referred to the Committee on Tax Policy. A bill to amend 1967 PA 281, entitled "Income tax act of 1967," by amending section 274 (MCL 206.274), as amended by 1997 PA 82. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 274. (1) For the 1995 tax year and each tax year after 2 the 1995 tax year and subject to the limitations in this section, 3 a claimant who has adjusted gross income of $200,000.00 or less 4 and who is a resident of this state may claim a credit against 5 the tax due under this act for fees and tuition paid by the 6 claimant on behalf of the claimant or any other student to a 7 qualified institution of higher learning. 8 (2) A claimant may claim a credit under this section equal 9 to the following amounts for the following periods: 00835'01 RJA 2 1 (a) For the 1995, 1996, and 1997 tax years, 4% of the sum of 2 all fees and tuition paid, not to exceed $250.00 for each student 3 for each tax year. 4 (b) For the 1998 tax year and each tax year after the 1998 5 tax year, 8.0% of the sum of all fees and tuition paid, not to 6 exceed $375.00 for each student for each tax year. 7 (3) A credit shall not be claimed under this section for 8 more than 4 tax years for any 1 student. 9 (4) The credit under this section may be claimed on a sepa- 10 rate form exclusive of any other form required by this act. 11 (5) The department may require reasonable proof from the 12 claimant in support of the fees and tuition payments claimed 13 under this section. 14 (6) The department may promulgate rules pursuant to the 15 administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 16 24.328, to implement this section. 17 (7) The total amount of credits claimed in a tax year for 18 tuition and fees paid by or on behalf of any 1 student shall not 19 exceed the maximum amount allowable under subsection (2). 20 (8) As used in this section: 21 (a) "Fees" means fees required of and uniformly paid by all 22 students and that have been promulgated and published in the cat- 23 alog of the qualified institution of higher learning. 24 (b) "Qualified institution of higher learning" means an 25 institution that meets all of the following criteria: 26 (i) The institution meets the criteria for an institution of 27 higher learning under section 260. 00835'01 3 1 (ii) The institution is located in this state. 2 (iii) The instructional programs of the institution are not 3 comprised solely of sectarian instruction or religious worship. 4 (iv) For the 1995,tax year and each tax year after the51996 tax year1997, AND 1998 THROUGH 2000 TAX YEARS, the insti- 6 tution has provided a letter of notification to the state trea- 7 surer before July 1 of the tax year that states that the institu- 8 tion will not increase fees and tuition rates during the ensuing 9 academic year by more than the annual average percentage increase 10 in the United States consumer price index in the immediately pre- 11 ceding tax year. 12 (v) For the 1996 tax year only, the institution has provided 13 a letter of notification to the state treasurer on or before 14 December 31, 1996 that states that the institution will not 15 increase fees and tuition rates during the 1996-1997 academic 16 year by more than 3% above the fees and tuition rates for the 17 1995-1996 academic year. 18 (c) "Tuition" means in-state tuition less any refunds of 19 tuition received by the claimant or student paid for any of the 20 following: 21 (i) Credits for an undergraduate degree program. 22 (ii) Credits granted by a community college or a 2-year pri- 23 vate college toward a degree program or granted for the purpose 24 of transferring those credits toward an undergraduate degree 25 program. 26 (d) "United States consumer price index" means the United 27 States consumer price index for all urban consumers as defined 00835'01 4 1 and reported by the United States department of labor, bureau of 2 labor statistics, and as certified by the state treasurer. 00835'01 Final page. RJA