INCOME TAX HOME HEATING CREDIT H.B. 4544 (H-2):
SUMMARY OF HOUSE-PASSED BILL
House Bill 4544 (Substitute H-2 as passed by the House)
Sponsor: Representative Dale W. Zorn
House Committee: Appropriations
CONTENT
The bill would amend the Income Tax Act to do the following:
-- Revise the calculation of the home heating credit when Federal block grant funds are less than the full credit amount, by prescribing a new formula to determine the amount used for weatherization.
-- Provide that a community action agency that weatherized rental property would have to require the owner to contribute at least 25% of the cost, subject to certain exceptions.
The Act allows an eligible individual to claim a credit for heating fuel costs for his or her homestead in Michigan. Eligibility for the credit and the amount of the credit are based on various factors, including household resources, exemptions claimed, and heating costs.
The credit may be allowed in a tax year only if there has been a Federal appropriation of Low Income Home Energy Assistance Program (LIHEAP) block grants for the Federal fiscal year beginning in the tax year. If the amount of LIHEAP funds available for the home heating credit is less than the full credit amount, each individual credit must be reduced proportionately. As used in this provision, "amount available for the home heating credit" means the sum of the LIHEAP block grant, plus the amount carried forward from the previous fiscal year, minus the amounts certified by the Director of the Department of Human Services for administration of the block grant, for crisis assistance programs, and for weatherization.
The amount used for weatherization each fiscal year may not exceed $9.0 million minus the amount used for weatherization from the emergency contingency funds received in the prior year. The bill would delete this provision. For fiscal year 2014-15 and each subsequent fiscal year, the amount used for weatherization would have to be determined as provided below.
If the total LIHEAP block grant received for the current fiscal year were equal to or greater than 90% of the amount of block grant funds received in the previous fiscal year, then the amount used for weatherization for that fiscal year would have to be at least $6.0 million but not more than 15% of the total LIHEAP block grant funds received for that fiscal year. If the total block grant received for the current fiscal year were less than 90% of the amount received in the prior fiscal year, then the amount used for weatherization for that fiscal year would have to be at least $5.0 million.
The bill also specifies that, for all rental property that was weatherized by a Michigan community action agency, each agency would have to require that at least 25% of the total cost of the weatherization services be contributed by the property owner, unless the owner was deemed low income or was a nonprofit organization, governmental agency, or municipal corporation.
FISCAL IMPACT
The bill likely would have no impact on State or local revenue or expenditure. Almost all of the home heating credit is paid with Federal funds, and the State contribution toward the credit would not likely be affected by the bill. However, the provisions of the bill could alter some taxpayers' receipt of the credit and/or the amounts they receive.
Date Completed: 12-15-14 Fiscal Analyst: David Zin
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.