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HB-5807, As Passed Senate, July 3, 2026
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SENATE SUBSTITUTE FOR
HOUSE BILL NO. 5807
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 476a and 476b (MCL 500.476a and 500.476b), as
amended by 2007 PA 187.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 476a. (1) Beginning August 3, 1987, whenever, by a law in 1
force outside of this state or country, a domestic insurer or agent 2
of a domestic insurer is required to make a deposit of securities 3
for the protection of policyholders or otherwise, or to make 4
payment for taxes, fines, penalties, certificates of authority, 5
valuation of policies, or otherwise, or a special burden or other 6
burden is imposed, greater in the aggregate, after the subtraction 7
described in subsection (8), than is required by the laws of this 8
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state for a similar alien or foreign insurer or agent of an alien 1
or foreign insurer, the alien or foreign insurer of that state or 2
country is required, as a condition precedent to its transacting 3
business in this state, to make a like deposit for like purposes 4
with the state treasurer of this state, and to pay to the revenue 5
commissioner for taxes, fines, penalties, certificates of 6
authority, valuation of policies, and otherwise an amount equal in 7
the aggregate to the charges and payments imposed by the laws of 8
the other state or country upon a similar domestic insurer and the 9
agents of a domestic insurer, reduced by the subtraction described 10
in subsection (8), regardless of whether a domestic insurer or 11
agent of a domestic insurer is actually transacting business in 12
that state or country. For fire department or salvage corps taxes 13
or other local taxes the amount shall be computed by the revenue 14
commissioner by dividing the total of the payments made by domestic 15
insurers in that state or country by the gross premium received by 16
domestic insurers in that state or country less return premiums. 17
The commissioner shall revoke the certificate of authority of an 18
alien or foreign insurer refusing for 30 days to make payment of 19
fees or taxes as required by this chapter. Except as provided in 20
subsections (3) and (4), for purposes of this section, an insurer 21
organized under the laws of a state or country other than these 22
United States shall be considered an insurer of the state in which 23
its general deposit for the benefit of its policyholders is made. 24
(2) The purpose of this section is to promote the interstate 25
business of domestic insurers by deterring other states from 26
enacting discriminatory or excessive taxes. 27
(3) Subsection (4) does not apply to a domestic insurer that 28
is owned or controlled, directly or indirectly, by an alien or 29
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foreign insurer who prior to 1998 and with the commissioner's 1
approval did not keep books, records, and files or true copies 2
thereof in this state. 3
(4) For purposes of this section, the state treasurer, after 4
consultation with the commissioner, shall determine that a domestic 5
insurer is an alien or foreign insurer domiciled in a state or 6
country determined by the state treasurer if the insurer does not 7
comply with all of the following: 8
(a) Maintain its principal place of business in this state. 9
(b) Maintain in this state officers and personnel responsible 10
for and knowledgeable of the company's operation, books, records, 11
administration, and annual statement. 12
(c) Conduct in this state a substantial portion of its 13
underwriting, sales, claims, legal, and, if applicable, medical 14
operations relating to Michigan policyholders and certificate 15
holders. 16
(d) Comply with section 5256(1)(a) and (2) through to (6). The 17
commissioner shall inform the state treasurer when a domestic 18
insurer is not in compliance with section 5256(1)(a) or (2) through 19
to (6). 20
(5) Taxes collected pursuant to under this section are subject 21
to section 22d of the former single business tax act, 1975 PA 228, 22
or section 243 of the Michigan business tax act, 2007 PA 36, MCL 23
208.1243, or section 643 of the income tax act of 1967, 1967 PA 24
281, MCL 206.643. 25
(6) The state treasurer shall administer the tax prescribed by 26
this section in the manner provided in 1941 PA 122, MCL 205.1 to 27
205.31. 28
(7) The requirements of section 28 of 1941 PA 122, MCL 205.28, 29
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that prohibit an employee or an authorized representative or former 1
employee or authorized representative or anyone connected with the 2
department of treasury from divulging any facts or information 3
obtained in connection with the administration of taxes, do not 4
apply to disclosure of the tax return prescribed in this act. 5
(8) For tax years that begin on and after January 1, 2027, in 6
calculating the total burdens imposed by a foreign state or country 7
on a domestic insurer or agent under subsection (1), including any 8
required deposits, payments, or other burdens described in that 9
subsection, an alien or foreign insurer that is a qualified 10
taxpayer may subtract a housing opportunity tax credit for a 11
qualified project in an amount equal to the amount of that credit 12
listed on the allocation report for that qualified taxpayer for 13
that qualified project, and the subtraction shall constitute the 14
housing opportunity tax credit. Except as otherwise provided in 15
subsection (9), an alien or foreign insurer that is a qualified 16
taxpayer and an owner shall claim a subtraction for a housing 17
opportunity tax credit listed on an allocation report for the 18
owner's tax year described in section 22e(5) of the state housing 19
development authority act of 1966, 1966 PA 346, MCL 125.1422e. 20
Except as otherwise provided in subsection (9), an alien or foreign 21
insurer that is a qualified taxpayer that has been allocated a 22
housing opportunity tax credit listed on an allocation report shall 23
claim a subtraction for that credit for the qualified taxpayer's 24
tax year described in section 22e(6) of the state housing 25
development authority act of 1966, 1966 PA 346, MCL 125.1422e. An 26
alien or foreign insurer shall not claim a subtraction for a 27
housing opportunity tax credit for a calendar year listed on an 28
allocation report unless the alien or foreign insurer and the 29
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amount of the alien or foreign insurer's credit are listed on that 1
allocation report. 2
(9) To claim the subtraction under subsection (8), an alien or 3
foreign insurer that is a qualified taxpayer shall attach a copy of 4
the eligibility statement to the annual tax return filed under this 5
act on which the subtraction is claimed. However, if the owner of 6
the qualified project that has received an approval notice has 7
submitted a final cost certification and a request for an 8
eligibility statement to the authority but the authority has not 9
yet approved the final cost certification and issued the 10
eligibility statement to the owner, the alien or foreign insurer 11
that is a qualified taxpayer may either claim the subtraction on 12
the qualified taxpayer's annual return for the tax year as 13
prescribed under subsection (8) by attaching a copy of the approval 14
notice for that qualified project or wait to claim the subtraction 15
on the qualified taxpayer's annual return for the tax year in which 16
the eligibility statement for the qualified project is issued. If 17
an updated allocation report is provided to the department under 18
section 22e(8)(b) of the state housing development authority act of 19
1966, 1966 PA 346, MCL 125.1422e, that reduces or increases the 20
amount of a housing opportunity tax credit that was previously 21
claimed as a subtraction under this section by an alien or foreign 22
insurer that is a qualified taxpayer, each alien or foreign insurer 23
that is a qualified taxpayer that had its credit amount adjusted 24
shall file an amended return for the affected tax year to adjust 25
the amount of the credit accordingly. 26
(10) If any portion of a federal low-income housing tax credit 27
claimed for a qualified project for which an alien or foreign 28
insurer also claimed a subtraction under subsection (8) or a credit 29
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under section 678 of the income tax act of 1967, 1967 PA 281, MCL 1
206.678, is required to be recaptured or is otherwise disallowed 2
during the credit period under section 42 of the internal revenue 3
code of 1986, 26 USC 42, the alien or foreign insurer that claimed 4
the subtraction under subsection (8) or the credit under section 5
678 of the income tax act of 1967, 1967 PA 281, MCL 206.678, for 6
that same qualified project is also required to recapture a portion 7
of the housing opportunity tax credit as provided under this 8
subsection. The percentage of the housing opportunity tax credit 9
subject to recapture must be equal to the percentage of the federal 10
low-income housing tax credit subject to recapture or otherwise 11
disallowed during the same tax year. For an alien or foreign 12
insurer that is a qualified taxpayer that, without regard to the 13
amount of any recapture that may be required under this subsection, 14
is subject to the tax under this section for the tax year in which 15
the recapture or disallowance event is identified on the federal 16
return, any housing opportunity tax credits recaptured or 17
disallowed must be added back to the tax liability of the qualified 18
taxpayer in a like amount and must be included on the annual return 19
of the qualified taxpayer submitted for the tax year in which the 20
recapture or disallowance event is identified on the federal 21
return. 22
(11) As used in this section: 23
(a) "Allocation report", "approval notice", "eligibility 24
statement", "federal low-income housing tax credit", "flow-through 25
entity", "housing opportunity tax credit", "owner", and "qualified 26
project" mean those terms as defined under section 22e of the state 27
housing development authority act of 1966, 1966 PA 346, MCL 28
125.1422e. 29
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(b) "Authority" means the Michigan state housing development 1
authority created under section 21 of the state housing development 2
authority act of 1966, 1966 PA 346, MCL 125.1421. 3
(c) "Qualified taxpayer" means any of the following: 4
(i) The owner of a qualified project that has received an 5
eligibility statement for that qualified project. 6
(ii) The owner of a qualified project that received an approval 7
notice and has submitted a final cost certification and a request 8
for an eligibility statement to the authority but the authority has 9
not yet approved the final cost certification and issued the 10
eligibility statement to the owner. 11
(iii) An alien or foreign insurer that owns a direct or 12
indirect, through 1 or more other flow-through entities, interest 13
in an owner described under subparagraph (i) or (ii) and that has 14
been allocated a housing opportunity tax credit at any time prior 15
to filing an annual or amended return under this act on which a 16
subtraction under subsection (8) is claimed. 17
Sec. 476b. Authorized insurers are subject to the tax as 18
provided in section 476a if applicable or the former single 19
business tax act, 1975 PA 228, or the Michigan business tax act, 20
2007 PA 36, MCL 208.1101 to 208.1601, 208.1519, or part 2 of the 21
income tax act of 1967, 1967 PA 281, MCL 206.601 to 206.699, 22
whichever is greater. 23
Enacting section 1. This amendatory act does not take effect 24
unless all of the following bills of the 103rd Legislature are 25
enacted into law: 26
(a) Senate Bill No. 966. 27
(b) House Bill No. 5806. 28