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HB-5805, As Passed House, June 25, 2026
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SUBSTITUTE FOR
HOUSE BILL NO. 5805
A bill to amend 1966 PA 346, entitled
"State housing development authority act of 1966,"
by amending section 22 (MCL 125.1422), as amended by 2012 PA 327,
and by adding section 22e.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 22. The authority possesses all powers necessary or 1
convenient to carry out this act, including the following powers in 2
addition to other powers granted by other provisions of this act: 3
(a) To sue and to be sued; to have a seal and to alter the 4
seal at pleasure; to have perpetual succession; to make and execute 5
contracts and other instruments necessary or convenient to the 6
exercise of the powers of the authority; and to make, amend, and 7
repeal bylaws and rules. 8
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(b) To undertake and carry out studies and analyses of housing 1
needs within this state and ways of meeting those needs, including 2
data with respect to population and family groups, the distribution 3
of population and family groups according to income, and the amount 4
and quality of available housing and its distribution according to 5
rentals and sales prices, employment, wages, and other factors 6
affecting housing needs and the meeting of housing needs; to make 7
the results of those studies and analyses available to the public 8
and the housing and supply industries; and to engage in research 9
and disseminate information on housing. 10
(c) To agree and comply with conditions attached to federal 11
financial assistance. 12
(d) To survey and investigate housing conditions and needs, 13
both urban and rural, throughout this state and make 14
recommendations to the governor and the legislature regarding 15
legislation and other measures necessary or advisable to alleviate 16
any existing housing shortage in this state. 17
(e) To establish and collect fees and charges in connection 18
with the sale of the authority's publications and the authority's 19
loans, commitments, and servicing, services, including, but not 20
limited to, the reimbursement of costs of financing by the 21
authority, service charges, and insurance premiums as the authority 22
determines to be reasonable and as approved by the authority. Fees 23
and charges shall must be determined by the authority and shall are 24
not be considered to be interest. The authority may use any 25
accumulated fees and charges and interest income for achieving any 26
of the corporate purposes of the authority, to the extent that the 27
fees, charges, and interest income are not pledged to the repayment 28
of bonds and notes of the authority or the interest on those bonds 29
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and notes. 1
(f) To encourage community organizations to assist in 2
initiating housing projects as provided in this act. 3
(g) To encourage the salvage of all possible usable housing 4
scheduled for demolition because of highway, school, urban renewal, 5
or other programs by seeking authority for the sponsors of the 6
programs to use funds provided for the demolition of the buildings, 7
to be allocated to those sponsors approved by the authority to 8
defray moving and rehabilitation costs of the buildings. 9
(h) To engage and encourage research in, and to formulate 10
demonstration projects to develop, new and better techniques and 11
methods for increasing the supply of housing for persons eligible 12
for assistance as provided in this act; and to provide technical 13
assistance in the development of housing projects and in the 14
development of programs to improve the quality of life for all the 15
people of this state. 16
(i) To make or purchase loans, including loans for condominium 17
units as that term is defined in section 4 of the condominium act, 18
1978 PA 59, MCL 559.104, and including loans to mortgage lenders , 19
which that are unsecured or the repayments of which are secured by 20
mortgages, security interests, or other forms of security; to 21
purchase and enter into commitments for the purchase of securities, 22
certificates of deposits, time deposits, or mortgage loans from 23
mortgage lenders; to participate in the making or purchasing of 24
unsecured or secured loans and undertake commitments to make, 25
guarantee, or purchase unsecured or secured loans; to sell 26
mortgages, security interests, notes, and other instruments or 27
obligations evidencing or securing loans, including certificates 28
evidencing interests in 1 or more loans, at public or private sale; 29
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in connection with the sale of an instrument or obligation 1
evidencing or securing 1 or more loans, to service, guarantee 2
payment on, or repurchase the instrument or obligation, whether or 3
not it is in default; to modify or alter mortgages and security 4
interests; to foreclose on any mortgage, security interest, or 5
other form of security; to finance housing units; to commence an 6
action to protect or enforce a right conferred upon the authority 7
by law, mortgage, security agreement, contract, or other agreement; 8
to bid for and purchase property that was the subject of the 9
mortgage, security interest, or other form of security, at a 10
foreclosure or at any other sale, and to acquire or take possession 11
of the property. Upon acquiring or taking possession of the 12
property, the authority may complete, administer, and pay the 13
principal and interest of obligations incurred in connection with 14
the property, and may dispose of and otherwise deal with the 15
property in any manner necessary or desirable to protect the 16
interests of the authority in the property. If the authority or an 17
entity that provides mortgage insurance to the authority acquires 18
property upon on the default of a borrower, the authority may make 19
a mortgage loan to a subsequent purchaser of that property even if 20
the purchaser does not meet otherwise applicable income limitations 21
and purchase price limits. 22
(j) To set standards for housing projects that receive loans 23
under this act and to provide for inspections to determine 24
compliance with those standards. The standards for construction and 25
rehabilitation of mobile homes, mobile home parks, and mobile home 26
condominium projects shall be established jointly by the authority 27
and the mobile home commission, created in section 3 of the mobile 28
home commission act, 1987 PA 96, MCL 125.2303. However, financing 29
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standards shall be established solely by the authority. 1
(k) To accept gifts, grants, loans, appropriations, or other 2
aid from the federal, state, or local government, from a 3
subdivision, agency, or instrumentality of a federal, state, or 4
local government, or from a person, corporation, firm, or other 5
organization. 6
(l) To acquire or contract to acquire from a person, firm, 7
corporation, municipality, or federal or state agency, by grant, 8
purchase, or otherwise, leaseholds or real or personal property, or 9
any interest in a leasehold or real or personal property; to own, 10
hold, clear, improve, and rehabilitate and to sell, assign, 11
exchange, transfer, convey, lease, mortgage, or otherwise dispose 12
of or encumber any interest in a leasehold or real or personal 13
property. This act shall not impede the operation and effect of 14
local zoning, building, and housing ordinances, ordinances relating 15
to subdivision control, land development, or fire prevention, or 16
other ordinances having to do with housing or the development of 17
housing. 18
(m) To procure insurance against any loss in connection with 19
the property and other assets of the authority. 20
(n) To invest, at the discretion of the authority, funds held 21
in reserve or sinking funds, or money not required for immediate 22
use or disbursement, in obligations of this state or of the United 23
States, in obligations the principal and interest of which are 24
guaranteed by this state or the United States, or in other 25
obligations as may be approved by the state treasurer. 26
(o) To promulgate rules necessary to carry out the purposes of 27
this act and to exercise the powers expressly granted in this act 28
pursuant to under the administrative procedures act of 1969, 1969 29
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PA 306, MCL 24.201 to 24.328. 1
(p) To enter into agreements with nonprofit housing 2
corporations, consumer housing cooperatives, limited dividend 3
housing corporations, mobile home park corporations, and mobile 4
home park associations that provide for regulation by the authority 5
of the planning, development, and management of any housing project 6
undertaken by nonprofit housing corporations, consumer housing 7
cooperatives, limited dividend housing corporations, mobile home 8
park corporations, and mobile home park associations and that 9
provide for the disposition of the property and franchises of those 10
corporations, cooperatives, and associations. 11
(q) To appoint to the board of directors of a nonprofit 12
housing corporation, consumer housing cooperative, limited dividend 13
housing corporation, mobile home park corporation, or mobile home 14
park association, a number of new directors sufficient to 15
constitute a majority of the board notwithstanding other provisions 16
of the articles of incorporation or other provisions of law. 17
Directors appointed under this subsection need not be stockholders 18
or members or meet other qualifications that may be described by 19
the certificate of incorporation or bylaws. In the absence of fraud 20
or bad faith, directors appointed under this subsection shall not 21
be personally liable for debts, obligations, or liabilities of the 22
corporation or association. The authority may appoint directors 23
under this subsection only if 1 or more of the following occur: 24
(i) The nonprofit housing corporation, consumer housing 25
cooperative, limited dividend housing corporation, mobile home park 26
corporation, or mobile home park association has received a loan or 27
advance, as provided for in this act, and the authority determines 28
that the loan or advance is in jeopardy of not being repaid. 29
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(ii) The nonprofit housing corporation, consumer housing 1
cooperative, limited dividend housing corporation, mobile home park 2
corporation, or mobile home park association received a loan or 3
advance as provided for in this act and the authority determines 4
that the proposed housing project for which the loan or advance was 5
made is in jeopardy of not being constructed. 6
(iii) The authority determines that some any of the following 7
apply: 8
(A) Some part of the net income or net earnings of the 9
nonprofit housing corporation is inuring to the benefit of a 10
private individual, firm, corporation, partnership, or association. 11
; the authority determines that an 12
(B) An unreasonable part of the net income or net earnings of 13
the consumer housing cooperative is inuring to the benefit of a 14
private individual, firm, corporation, partnership, or association. 15
; or the authority determines that some 16
(C) Some part of the net income or net earnings of the limited 17
dividend housing corporation, in excess of that permitted by other 18
provisions of this act, is inuring to the benefit of a private 19
individual, firm, corporation, partnership, or association. 20
(iv) The authority determines that the nonprofit corporation or 21
consumer housing cooperative is in some manner controlled by, under 22
the direction of, or acting in the substantial interest of a 23
private individual, firm, corporation, partnership, or association 24
seeking to derive benefit or gain from, or seeking to eliminate or 25
minimize losses in any dealings or transactions with, the nonprofit 26
corporation or consumer housing cooperative. However, this This 27
subparagraph shall apply applies to individual cooperators in 28
consumer housing cooperatives only in circumstances defined by the 29
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authority in its rules. 1
(v) The authority determines that the nonprofit housing 2
corporation, consumer housing cooperative, limited dividend housing 3
corporation, mobile home park corporation, or mobile home park 4
association is in violation of the rules promulgated under this 5
section. 6
(vi) The authority determines that the nonprofit housing 7
corporation, consumer housing cooperative, limited dividend housing 8
corporation, mobile home park corporation, or mobile home park 9
association is in violation of 1 or more agreements entered into 10
with the authority that provide for regulation by the authority of 11
the planning, development, and management of a housing project 12
undertaken by the nonprofit housing corporation, consumer housing 13
cooperative, limited dividend housing corporation, mobile home park 14
corporation, or mobile home park association or that provide for 15
the disposition of the property and franchises of the corporation, 16
cooperative, or association. 17
(r) To give approval approve or consent to the any of the 18
following: 19
(i) The articles of incorporation submitted to the authority by 20
a corporation seeking approval as a nonprofit housing corporation, 21
consumer housing cooperative, limited dividend housing corporation, 22
or mobile home park corporation under chapter 4, 5, 6, or 8. ; to 23
give approval or consent to the 24
(ii) The partnership agreement, joint venture agreement, trust 25
agreement, or other document of basic organization of a limited 26
dividend housing association under chapter 7 or mobile home park 27
association under chapter 9. 28
(s) To engage the services of private consultants on a 29
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contract basis for rendering professional and technical assistance 1
and advice. 2
(t) To lease real or personal property, to operate as the sole 3
statewide public housing agency, and to accept federal funds for, 4
and participate in, federal programs of housing assistance. As used 5
in this subdivision, "public housing agency" means that term as 6
defined under 42 USC 1437a. 7
(u) To review and approve rental charges for authority-8
financed housing projects and require whatever changes the 9
authority determines to be necessary. The changes shall become are 10
effective after not less than 30 days' days after written notice is 11
given to the residents of the affected authority-financed housing 12
projects. 13
(v) To set forth in the various loan documents of the 14
authority those restrictions on the sale, conveyance by land 15
contract, or transfer of residential real property, housing 16
projects, or housing units for which a note is held by the 17
authority and restrictions on the assumption by subsequent 18
purchasers of loans originated by and held by, or originated for 19
purchase by and held by, the authority as the authority determines 20
to be necessary in order to comply with requirements of federal 21
statutes, federal rules or regulations promulgated under 5 USC 551 22
to 559, state statutes, or state rules promulgated under the 23
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to 24
24.328, or to obtain and maintain the tax exempt status of 25
authority bonds and notes. However, the The authority shall not use 26
a due on sale or acceleration clause solely for the purpose of 27
renegotiating the interest rate on a loan made with respect to an 28
owner-occupied single-family housing unit. Without limiting the 29
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authority's power to establish other restrictions, as provided in 1
this section, on the sale, conveyance by land contract, or transfer 2
of residential real property, housing projects, or housing units 3
for which a note is held by the authority and the assumption by 4
subsequent purchasers of loans made or purchased by the authority, 5
the authority shall provide in its loan documents relating to a 6
single family loan that the single family loan may be assumed by a 7
new purchaser only when the new purchaser qualifies under the 8
authority income limitations rules, unless such a restriction 9
diminishes or precludes the insurance or a guarantee by an agency 10
of the federal government with respect to the single family loan. A 11
loan made for a mobile home that the borrower does not intend to 12
permanently affix to real property shall become immediately due and 13
payable if the mobile home is moved out of the state. Any 14
restrictions on conveyance by sale, conveyance by land contract, or 15
transfer that are authorized in this section shall apply only to 16
loans originated by and held by, or originated for purchase by and 17
held by, the authority and may, at the option of the authority, be 18
enforced by accelerating and declaring immediately due and payable 19
all sums evidenced by the note held by the authority. An 20
acceleration and declaration of all sums to be due and payable on 21
conveyance by sale, land contract, or transfer is not an 22
unreasonable restraint on alienation. An acceleration and 23
declaration, unless otherwise prohibited in this subdivision, of 24
all sums to be due and payable under this subdivision is 25
enforceable in any court of competent jurisdiction. This 26
subdivision is applicable applies to secured and unsecured loans . 27
This subdivision is also applicable to and loan documents utilized 28
in conjunction with an authority-operated program of residential 29
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rehabilitation by an entity cooperating or participating with the 1
authority under section 22a(4), if the loans are originated with 2
the intent to sell those loans to the authority. 3
(w) To set forth in the various loan documents of the 4
authority remedies for the making of a false statement, 5
representation, or pretense or a material misstatement by a 6
borrower during the loan application process. Without limiting the 7
authority's power to pursue other remedies, the authority shall 8
provide in its loan documents that, if a borrower makes a false 9
statement, representation, or pretense or a material misstatement 10
during the loan application process, the authority, at its option, 11
may accelerate and declare immediately due and payable all sums 12
evidenced by the note held by the authority. An acceleration and 13
declaration of all sums to be due and payable as provided in this 14
subdivision is enforceable in any court of competent jurisdiction. 15
This subdivision is applicable applies to secured and unsecured 16
loans. 17
(x) To collect interest on a real estate loan, the primary 18
security for which is not a first lien on real estate, at the rate 19
of 15% or less per annum on the unpaid balance. This subdivision 20
does not impair the validity of a transaction or rate of interest 21
that is lawful without regard to notwithstanding this subdivision. 22
(y) To encourage and engage or participate in programs to 23
accomplish the preservation of housing in this state available for 24
occupancy by persons and families of low or moderate income. 25
(z) To verify for the state treasurer statements submitted by 26
a city, village, township, or county as to exempt properties under 27
section 7d of the general property tax act, 1893 PA 206, MCL 28
211.7d. 29
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(aa) For the purpose of more effectively managing its debt 1
service, to enter into an interest rate exchange or swap, hedge, or 2
similar agreement with respect to its bonds or notes on the terms 3
and payable from the sources and with the security, if any, as 4
determined by a resolution of the authority. 5
(bb) To make working capital loans to contractors or 6
subcontractors on housing projects financed by the authority. The 7
authority shall submit an annual report to the legislature 8
containing the amount, recipient, duration, circumstance, and other 9
related statistics for each capital loan made to a contractor or 10
subcontractor under this subdivision. The authority shall include 11
in the report statistics related to the cost of improvements made 12
to adapt property for use by disabled individuals as provided in 13
section 32b or 44. 14
(cc) Subject to rules of the civil service commission, to 15
adopt a code of ethics with respect to its employees that requires 16
disclosure of financial interests, defines and precludes conflicts 17
of interest, and establishes reasonable post-employment 18
restrictions for a period of up to 1 year after an employee 19
terminates employment with the authority. 20
(dd) To impose covenants running with the land in order to 21
satisfy requirements of applicable federal law with respect to 22
housing assisted or to be assisted through federal programs such as 23
the low income housing tax credit program or the home investment 24
partnerships program. These covenants shall be imposed by executing 25
and recording regulatory agreements between the authority, or a 26
municipality or other entity designated by the authority, and the 27
person or entity to be bound. The covenants shall run with the land 28
and be effective with respect to the parties making the covenants 29
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and other intended beneficiaries of the covenants, even though 1
there is no privity of estate or privity of contract between the 2
authority and the persons or entities to be bound. 3
(ee) To impose covenants running with the land in order to 4
satisfy requirements of applicable state or federal law with 5
respect to housing financed by the authority. These covenants shall 6
be imposed by executing and recording regulatory agreements between 7
the authority and the person or entity to be bound. The covenants 8
shall run with the land and be effective with respect to the 9
parties making the covenants and other intended beneficiaries of 10
the covenants, even though there is no privity of estate or privity 11
of contract between the authority and the persons or entities to be 12
bound. With respect to any applicable environmental laws, this 13
subdivision does not grant to the authority any additional rights, 14
privileges, or immunities not otherwise afforded to a private 15
lender that is not in the chain of title for the land. 16
(ff) To participate in programs designed to assist persons and 17
families whose incomes do not exceed 115% of the greater of 18
statewide median gross income or the area median gross income 19
become homeowners where loans are made by private lenders for 20
purchase by the government national mortgage association, federal 21
national mortgage association, federal home loan mortgage 22
corporation, or other federally chartered organizations. 23
Participation may include providing or funding homeownership 24
counseling and providing some or all of a reserve fund to be used 25
to pay for losses in excess of insurance coverage. 26
(gg) To invest, under the conditions prescribed in this 27
subdivision and without the consent of the escrow depositors, up to 28
20% of funds held, by or for the authority, in escrow accounts for 29
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the benefit of the authority or mortgagors of authority-financed 1
housing. The investments under this subdivision shall be made in 2
loans originated or purchased by the authority for construction or 3
rehabilitation of multifamily housing developments for occupancy by 4
persons or families without regard to income. In connection with 5
loans described in this subdivision, the authority may charge and 6
retain fees in amounts similar to those charged with respect to 7
similar loans for which the source of funding does not come from 8
escrow accounts. For purposes of this subdivision, "escrow account" 9
means any account or reserve held by the authority and established 10
in a mortgage or a regulatory agreement to which the authority is a 11
party or which has been assigned to the authority. However, for For 12
purposes of this subdivision, escrow account does not include any 13
account labeled in the associated regulatory agreement as 14
"development cost escrow principal" or "operating assurance 15
reserve". For purposes of this subdivision, "multifamily housing 16
development" means a development in which not less than 50% of the 17
floor space is used primarily for residential purposes. The 18
investment authorized by this subdivision shall must not be made 19
unless both of the following requirements are met: 20
(i) The return on the loan is approximately equivalent to that 21
which could be obtained from investments of substantially similar 22
credit quality and maturity, as determined by the authority. 23
(ii) The authority agrees to pay with its own funds the 24
principal balance of any loan, made with the escrow funds, that 25
becomes delinquent in excess of 30 days. This subdivision does not 26
obligate the authority to purchase a delinquent loan so long as 27
with respect to that loan the authority pays to the escrow funds 28
from its own funds the amount of the delinquent payments. The 29
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authority's election to pay the delinquent payments to the escrow 1
funds does not in any manner abate or cure the delinquency of the 2
loan and the authority may resort to any remedies that would exist 3
in the absence of that payment. 4
(hh) To acquire, develop, rehabilitate, own, operate, and 5
enter into contracts with respect to the management and operation 6
of real and personal property to use as office facilities by the 7
authority and to enter into leases with respect to facilities not 8
immediately necessary for the activities of the authority. 9
(ii) To make loans to certain qualified buyers and resident 10
organizations and to make grants to resident organizations as 11
provided in the following: 12
(i) The urban homestead act, 1999 PA 127, MCL 125.2701 to 13
125.2709. 14
(ii) The urban homesteading on vacant land act, 1999 PA 129, 15
MCL 125.2741 to 125.2748. 16
(iii) The urban homesteading in single-family public housing 17
act, 1999 PA 128, MCL 125.2761 to 125.2770. 18
(iv) The urban homesteading in multifamily public housing act, 19
1999 PA 84, MCL 125.2721 to 125.2734. 20
(jj) To implement and administer a housing and community 21
development program as described in this act. 22
(kk) To implement, administer, or execute administrative, 23
substantive, or supervisory powers pursuant to under the individual 24
or family development account program act, 2006 PA 513, MCL 206.901 25
to 206.911. 26
(ll) To establish, implement, and administer the housing 27
opportunity tax credit program under section 22e. 28
Sec. 22e. (1) The authority, in cooperation with the 29
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department of treasury, shall establish, implement, and administer 1
a housing opportunity tax credit program to encourage the 2
development of qualified projects in this state. 3
(2) For award cycles beginning on and after January 1, 2027, 4
the authority shall, in conjunction with applications received 5
under section 22b, accept applications for housing opportunity tax 6
credits under this section. Subject to the award cycle cap under 7
subsection (4) and the limitations under this section, the 8
authority shall not issue an award for an annual housing 9
opportunity tax credit under this program for a qualified project 10
that exceeds the lesser of the following: 11
(a) The amount necessary for the financial feasibility of the 12
qualified project. 13
(b) The adjusted annual federal credit amount for the 14
qualified project. 15
(3) A person seeking a housing opportunity tax credit under 16
this section shall submit an application in a form and manner as 17
prescribed by the authority. The authority shall review completed 18
applications for housing opportunity tax credits received for 4% 19
qualified projects on a first-come, first-served basis. The 20
authority shall treat all complete applications received on the 21
same day as having been received simultaneously. If the 22
applications received for 4% qualified projects exceed the portion 23
of the award cycle cap set aside under subsection (4)(b) and (c) on 24
any day, the authority shall establish an evaluation methodology to 25
determine which of the 4% qualified projects applications are 26
approved and issued an award of a housing opportunity tax credit. 27
The evaluation methodology required under this subsection must be 28
limited to factors that maximize efficient unit production, 29
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including, but not limited to, each of the following: 1
(a) The amount of the housing opportunity tax credit requested 2
for each unit under the proposed qualified project. 3
(b) The number of units to be preserved or created under the 4
proposed qualified project. 5
(c) The estimated development period of the proposed qualified 6
project from the initial award to placing the proposed qualified 7
project in service. 8
(4) For the 2027 award cycle, the authority shall not allocate 9
a total of more than the base annual amount of $42,000,000.00 for 10
housing opportunity tax credits under this section. For each award 11
cycle after the 2027 award cycle, to determine the award cycle cap 12
for that award cycle, the base annual amount for the immediately 13
preceding award cycle must be adjusted annually by the percentage 14
increase in the United States Consumer Price Index for the 15
immediately preceding calendar year. The total amount of all 16
housing opportunity tax credits for which an award is issued under 17
this section must not exceed the award cycle cap for any award 18
cycle. For each application window, the authority shall approve and 19
allocate not less than 45% of the award cycle cap for that award 20
cycle to qualified projects to the extent that the authority 21
receives a sufficient number of applications. If, at the end of an 22
application window, the authority has not received a sufficient 23
number of completed applications to allocate the amount set aside 24
under subdivision (a), (b), (c), or (d), the authority may 25
reapportion the unallocated credit amounts to other qualified 26
projects in accordance with the qualified allocation plan or an 27
alternative competitive process. Except as otherwise provided under 28
this subsection, the amount of the award cycle cap allocable for 29
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each award cycle must be set aside as follows: 1
(a) Up to 50% to any qualified project at the authority's 2
discretion. 3
(b) Not less than 25% must be available during the application 4
window to 4% qualified projects that are new construction. 5
(c) Not less than 25% must be available during the application 6
window to 4% qualified projects that are preservation. 7
(d) Not less than 30% of the amounts set aside under 8
subdivisions (a) through (c) to qualified projects that are located 9
in a rural area. 10
(5) If the authority approves an application for a housing 11
opportunity tax credit, the authority shall send a binding 12
reservation letter of eligibility to the applicant that states the 13
amount of the housing opportunity tax credit awarded for each year 14
of the qualified project's credit period. The reservation letter 15
must clearly stipulate that the housing opportunity tax credit 16
awarded is contingent on the authority's approval of a final cost 17
certification and the issuance of an eligibility statement. On 18
completion of a qualified project, the owner shall submit a final 19
cost certification and a request for the issuance of an eligibility 20
statement to the authority. On approval of the final cost 21
certification, the authority shall issue an eligibility statement 22
to the owner for the qualified project. The eligibility statement 23
must state the amount of the housing opportunity tax credit that 24
may be claimed against an applicable tax each year of the credit 25
period. 26
(6) If an owner that has been awarded a housing opportunity 27
tax credit for a qualified project under this section is a flow-28
through entity, the owner may, in a form and manner as prescribed 29
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by the authority, allocate all or a portion of the housing 1
opportunity tax credit attributable to that qualified project to 2
some or all of its members, including any not-for-profit entity 3
that is a member, in any manner agreed to by its members, 4
regardless of whether that member is allocated or allowed any 5
portion of any federal low-income housing tax credit with respect 6
to the same qualified project, whether the allocation of the 7
housing opportunity tax credit under the terms of the agreement has 8
substantial economic effect within the meaning of section 704(b) of 9
the internal revenue code, 26 USC 704, and whether the member is 10
deemed a partner for federal income tax purposes. An owner that 11
allocates all or a portion of its housing opportunity tax credit 12
under this subsection shall designate a person to serve as the 13
designated reporter for that housing opportunity tax credit. A 14
flow-through entity that receives an allocation of the housing 15
opportunity tax credit under this subsection, either from the owner 16
of the qualified project or from another flow-through entity, may 17
further allocate the housing opportunity tax credit among some or 18
all of its members in the same manner as the owner. A member of a 19
flow-through entity that is allocated or receives a pass-through of 20
a housing opportunity tax credit under this subsection may assign 21
all or any part of its interest, including its interest in the 22
housing opportunity tax credit. 23
(7) The owner of a qualified project that is awarded a housing 24
opportunity tax credit and issued an eligibility statement shall 25
report any recapture event to the designated reporter, if 26
applicable, the department of treasury, and the authority in the 27
same manner done for the recapture of federal low-income housing 28
tax credits. If the owner of the qualified project is not the only 29
20
KAS H05885'25 (H-3)_HB5805_APH_1 pyjmv6
qualified taxpayer that claimed the housing opportunity tax credit 1
attributable to that qualified project against an applicable tax, 2
the designated reporter shall also report the recapture event to 3
each qualified taxpayer that was allocated a housing opportunity 4
tax credit attributable to that same qualified project. 5
(8) For each calendar year of the award cycle, the designated 6
reporter shall do both of the following: 7
(a) Provide the department of treasury, in the form prescribed 8
by the department of treasury, an allocation report containing all 9
of the following information: 10
(i) The name, address, and taxpayer identification number of 11
the owner and each qualified taxpayer that has been allocated a 12
portion of the annual credit awarded on the eligibility statement 13
for that year. 14
(ii) The amount of the annual credit allocated to each 15
qualified taxpayer identified under subparagraph (i) for that year 16
and the applicable tax against which the credit will be claimed. 17
(iii) The total of the amounts listed for each qualified 18
taxpayer under subparagraph (ii), demonstrating that the total does 19
not exceed the amount listed on the eligibility statement for that 20
year. 21
(b) Notify the department of treasury of any changes to the 22
information reported under subdivision (a)(ii) in the time and 23
manner as prescribed by the department of treasury. 24
(9) As used in this section: 25
(a) "Adjusted annual federal credit amount" means 1/6 of the 26
aggregate amount of federal credit awarded to a qualified project 27
over its federal credit period. 28
(b) "Allocation report" means the annual report required to be 29
21
KAS H05885'25 (H-3)_HB5805_APH_1 pyjmv6
submitted to the department of treasury under subsection (8). 1
(c) "Applicable tax" means a tax imposed under the income tax 2
act of 1967, 1967 PA 281, MCL 206.1 to 206.847, or under section 3
476a of the insurance code of 1956, 1956 PA 218, MCL 500.476a. 4
(d) "Application window" means the first quarter, January 1 5
through March 31, or the third quarter, July 1 through September 6
30, of the award cycle. If either the first or last day of the 7
application window falls on a nonbusiness day, then the starting or 8
ending date is the next business day. 9
(e) "Award" means a binding reservation letter of eligibility 10
issued by the authority for a housing opportunity tax credit 11
attributable to a qualified project during an award cycle, setting 12
forth the amount of the housing opportunity tax credit to be 13
claimed in each year of the credit period. 14
(f) "Award cycle" means each calendar year over which the 15
authority approves and allocates housing opportunity tax credits 16
for qualified projects. 17
(g) "Award cycle cap" means the sum of the following: 18
(i) The base annual amount as determined under subsection (4) 19
for each calendar year of the credit period. 20
(ii) The amount, if any, by which the award cycle cap 21
prescribed under this section for the preceding award cycle exceeds 22
the total of all housing opportunity tax credits awarded by the 23
authority in that award cycle. 24
(iii) The amount of housing opportunity credits recaptured or 25
otherwise disallowed under subsection (7) in the preceding calendar 26
year or otherwise returned to the authority since the prior award 27
cycle. 28
(h) "Credit period" means the period of 6 calendar years 29
22
KAS H05885'25 (H-3)_HB5805_APH_1 pyjmv6
beginning with the calendar year in which a building that is part 1
of a qualified project is placed in service. If a qualified project 2
consists of more than 1 building, then the owner may elect to 3
either treat all buildings as 1 project and begin the credit period 4
when the last building is placed in service or treat each 5
building's credit period independently on a building-by-building 6
basis. 7
(i) "Designated reporter" means the owner of the qualified 8
project or the person designated by the owner under subsection (6). 9
(j) "Eligibility statement" means a statement issued by the 10
authority to the owner of a qualified project certifying that the 11
project is a qualified project and specifying the amount of the 12
housing opportunity tax credit that may be claimed each year of the 13
credit period, the years that comprise the credit period, the name, 14
address, and taxpayer identification number of the owner, the date 15
of issuance, and any additional information prescribed by the 16
authority. 17
(k) "Federal credit period" means the 10-year period described 18
under section 42(f)(1) of the internal revenue code, 26 USC 42. 19
(l) "Federal low-income housing tax credit" or "federal credit" 20
means the credit allowed under section 42 of the internal revenue 21
code, 26 USC 42. 22
(m) "4% qualified project" means a qualified project that is 23
eligible for both of the following: 24
(i) A federal low-income housing tax credit under section 25
42(h)(4) of the internal revenue code, 26 USC 42. 26
(ii) A bond issued under section 44c for which the authority is 27
not the bondholder with respect to the bond proceeds. 28
(n) "Flow-through entity" means an entity that for the 29
23
KAS H05885'25 (H-3)_HB5805_APH_1 pyjmv6
applicable tax year is treated as a subchapter S corporation under 1
section 1362(a) of the internal revenue code, 26 USC 1362, a 2
general partnership, a trust, a limited partnership, a limited 3
liability partnership, or a limited liability company, and that for 4
the tax year is not taxed as a corporation for federal income tax 5
purposes. Flow-through entity does not include any entity treated 6
as a corporation under section 699 of the income tax act of 1967, 7
1967 PA 281, MCL 206.699. 8
(o) "Housing opportunity tax credit" means a tax credit 9
authorized to be claimed against an applicable tax under section 10
279 or 679 of the income tax act of 1967, 1967 PA 281, MCL 206.279 11
and 206.679, or section 476a of the insurance code of 1956, 1956 PA 12
218, MCL 500.476a, whichever is applicable. 13
(p) "Internal revenue code" means the United States internal 14
revenue code of 1986. 15
(q) "Member", when used in reference to a flow-through entity, 16
means a shareholder of a subchapter S corporation, a partner in a 17
general partnership, a limited partnership, or a limited liability 18
partnership, a member of a limited liability company, or a 19
beneficiary of a trust that is a flow-through entity, as long as 20
the shareholder, partner, member, or beneficiary, as applicable, is 21
considered a shareholder, partner, member, or beneficiary under 22
applicable state law governing such flow-through entity. 23
(r) "New construction" means newly constructed housing units 24
and does not include the rehabilitation or acquisition of existing 25
buildings or adaptive reuse projects. New construction includes the 26
demolition necessary for the construction of new housing units. 27
(s) "Owner" means a person holding a fee simple interest in a 28
qualified project or a leasehold interest pursuant to a ground 29
24
KAS H05885'25 (H-3)_HB5805_APH_1 pyjmv6
lease in the land on which a qualified project is located. 1
(t) "Person" means an individual, bank, financial institution, 2
insurance company, association, corporation, flow-through entity, 3
receiver, estate, trust, or any other group or combination of 4
groups acting as a unit. 5
(u) "Preservation" means projects that involve rehabilitation 6
of existing housing units or the adaptive re-use of an existing 7
building. 8
(v) "Qualified project" means a qualified low-income building 9
as defined in section 42(c) of the internal revenue code, 26 USC 10
42, that is located in this state, is eligible for the federal low-11
income housing tax credit, and is placed in service on or after 12
January 1, 2027. 13
(w) "Qualified taxpayer" means a taxpayer that is the owner of 14
a qualified project that was issued an eligibility statement for a 15
housing opportunity tax credit or a taxpayer included on the 16
allocation report that owns a direct or indirect, through the owner 17
or 1 or more flow-through entities, interest in a qualified project 18
for which an eligibility statement was issued for a housing 19
opportunity tax credit and all or a portion of that credit has been 20
allocated to the taxpayer at any time prior to filing an annual or 21
amended return on which a housing opportunity tax credit is claimed 22
against an applicable tax. 23
(x) "Rural area" means a city, village, or township with a 24
population of 35,000 or less, or an area designated as rural as 25
defined by the United States Department of Agriculture or the 26
United States Census Bureau. 27
(y) "Taxpayer" means a person subject to an applicable tax. 28
(z) "United States Consumer Price Index" means the United 29
25
Final Page
KAS H05885'25 (H-3)_HB5805_APH_1 pyjmv6
States Consumer Price Index for all urban consumers as defined and 1
reported by the United States Department of Labor, Bureau of Labor 2
Statistics. 3
Enacting section 1. This amendatory act does not take effect 4
unless all of the following bills of the 103rd Legislature are 5
enacted into law: 6
(a) House Bill No. 5101. 7
(b) House Bill No. 5806. 8
(c) House Bill No. 5807. 9