HOUSE BILL No. 5770


     March 5, 2002, Introduced by Reps. Wojno, Raczkowski, Callahan, Quarles, Rocca, Plakas, Mans and Lemmons and referred to the
Committee on Tax Policy.


        A bill to amend 1967 PA 281, entitled

   "Income tax act of 1967,"

   (MCL 206.1 to 206.532) by adding section 269.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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             SEC. 269.  (1) FOR TAX YEARS BEGINNING AFTER DECEMBER 31,

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        2001 AND SUBJECT TO THE ADJUSTMENTS IN SUBSECTION (2), A TAXPAYER

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        MAY CLAIM A CREDIT EQUAL TO THE INCREASE IN THE TAXPAYER'S RATE

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        FOR WATER SERVICE AT THE TAXPAYER'S HOMESTEAD IN THE TAX YEAR,

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        NOT TO EXCEED $600.00 PER YEAR.

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             (2) A TAXPAYER MAY CLAIM THE FULL CREDIT AMOUNT UNDER

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        SUBSECTION (1) IF THE TAXPAYER'S HOUSEHOLD INCOME IS $60,000.00

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        OR LESS.  A TAXPAYER WITH HOUSEHOLD INCOME GREATER THAN

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        $60,000.00 SHALL REDUCE THE FULL CREDIT AMOUNT UNDER

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        SUBSECTION (1) BY THE FOLLOWING PERCENTAGES:




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             (A) IF THE TAXPAYER'S HOUSEHOLD INCOME IS GREATER THAN

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        $60,000.00 BUT $70,000.00 OR LESS, THE CREDIT SHALL BE REDUCED BY

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        20%.

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             (B) IF THE TAXPAYER'S HOUSEHOLD INCOME IS GREATER THAN

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        $70,000.00 BUT $85,000.00 OR LESS, THE CREDIT SHALL BE REDUCED BY

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        40%.

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             (C) IF THE TAXPAYER'S HOUSEHOLD INCOME IS GREATER THAN

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        $85,000.00 BUT $100,000.00 OR LESS, THE CREDIT SHALL BE REDUCED

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        BY 60%.

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             (D) IF THE TAXPAYER'S HOUSEHOLD INCOME IS GREATER THAN

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        $100,000.00 BUT $115,000.00 OR LESS, THE CREDIT SHALL BE REDUCED

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        BY 80%.

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             (E) IF THE TAXPAYER'S HOUSEHOLD INCOME IS GREATER THAN

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        $115,000.00, A CREDIT IS NOT ALLOWED UNDER THIS SECTION.

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             (3) IF THE CREDIT ALLOWED UNDER THIS SECTION EXCEEDS THE TAX

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        LIABILITY OF THE TAXPAYER FOR THE TAX YEAR, THAT PORTION OF THE

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        CREDIT THAT EXCEEDS THE TAX LIABILITY SHALL BE REFUNDED.

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             (4) THE DEPARTMENT MAY REQUIRE REASONABLE PROOF TO SUPPORT A

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        CREDIT CLAIMED UNDER THIS SECTION.

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             (5) AS USED IN THIS SECTION:

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             (A) "HOMESTEAD" AND "HOUSEHOLD INCOME" MEAN THOSE TERMS AS

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        DEFINED IN SECTION 508.

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             (B) "INCREASE IN THE TAXPAYER'S RATE" MEANS ANY INCREASE IN

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        THE RATE CHARGED FOR WATER SERVICE DURING THE TAX YEAR FROM THE

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        RATE CHARGED FOR WATER SERVICE IN CALENDAR YEAR 1998 MULTIPLIED

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        BY THE UNITS OF WATER SERVICE DELIVERED TO AND PAID FOR BY THE

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        TAXPAYER DURING THE TAX YEAR.



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             (C) "RATE" MEANS THE AMOUNT CHARGED FOR WATER SERVICE PER

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        UNIT OF WATER SERVICE DELIVERED TO THE TAXPAYER'S HOMESTEAD.

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             (D) "WATER SERVICE" MEANS A WATER SUPPLY OR SEWAGE DISPOSAL

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        SYSTEM THAT PROVIDES WATER SUPPLY OR SEWAGE DISPOSAL SERVICE TO

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        RESIDENCES AND THAT IS OPERATED BY A MUNICIPALITY, CITY, TOWN-

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        SHIP, COUNTY, OR A PUBLIC UTILITY PROVIDING WATER SUPPLY OR

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        SEWAGE DISPOSAL SERVICE TO RESIDENTS OF A MUNICIPALITY, CITY,

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        TOWNSHIP, OR COUNTY.








































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