HB-5898, As Passed House, April 17, 2008

SUBSTITUTE FOR

HOUSE BILL NO. 5898

A bill to amend 2007 PA 36, entitled

"Michigan business tax act,"

(MCL 208.1101 to 208.1601) by adding section 430.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 430. (1) Except as otherwise provided under subsections

(4) and (5), for tax years that begin on or after January 1, 2009,

a taxpayer that is engaged in the research, development, or

manufacturing of photovoltaic energy, photovoltaic systems, and

other photovoltaic technology may claim a credit against the tax

imposed by this act equal to the greater of either of the

following:

(a) 50% of the capital investments made by the taxpayer in the

research, development, or manufacturing of photovoltaic energy,

photovoltaic systems, and other photovoltaic technology in this

state during the tax year.

(b) 50% of the taxpayer's expenses incurred in this state

during the tax year for research and development.

(2) If the credit allowed under this section exceeds the tax

liability of the taxpayer for the tax year, that portion that

exceeds the tax liability is refundable.

(3) A taxpayer that claims a credit under this section is not

prohibited from claiming a credit under section 405. However, the

taxpayer shall not claim a credit under this section and section

405 based on the same research and development expenses or capital

investments.

(4) A taxpayer that has entered into an agreement with the

Michigan economic growth authority for a credit under sections 432

through 432d is not eligible for the credit under this section.

(5) The total of all credits allowed under this section for a

tax year shall not exceed $100.00.

(6) As used in this section:

(a) "Capital investment" means the cost, including fabrication

and installation, paid or accrued in the taxable year of property

of a type that is, or under the internal revenue code will become,

eligible for depreciation, amortization, or accelerated capital

cost recovery for federal income tax purposes, provided that the

property is physically located in this state for use in a business

activity in this state.

(b) "Photovoltaic cells" mean an integrated device consisting

of layers of semiconductor materials and electric contracts capable

of converting incident light directly into electricity.

(d) "Photovoltaic modules" mean an assembly of interconnected

photovoltaic cells.

(e) "Photovoltaic systems" mean solar energy devices composed

of 1 or more photovoltaic cells or photovoltaic modules, and

inverter or other power conditioning unit or photovoltaic

technology designed to deliver power of a selected current and

voltage, wires, and other electrical connectors in order to

generate electricity, heat or cool a residential structure, provide

hot water for use in a residential structure, or provide solar

process heat. Batteries for power storage may also be included in

photovoltaic systems.

(f) "Photovoltaic technology" means solar power technology

that uses photovoltaic cells and modules to convert light from the

sun directly into electricity. Photovoltaic technology includes

equipment, component parts, materials, electronic devices, testing

equipment, and other related systems that are specifically designed

or fabricated and used primarily for 1 or more of the following:

(i) The storage, generation, reformation, or distribution of

clean fuels integrated within a photovoltaic system.

(ii) The process of utilizing photovoltaic energy to generate

electricity for use by consumers.

(g) "Property" means section 1245 property and section 1250

property as those terms are defined in sections 1245 and 1250 of

the internal revenue code.

(h) "Research and development" means qualified research as