Michigan House Bill HB4787

Michigan 2025-2026 Regular Session

• Introduced: 8/21/25
• Refer: 8/21/25

Caption

Property tax: exemptions; property tax exemption for certain utility personal property; provide for. Amends 1893 PA 206 (MCL 211.1 - 211.155) by adding sec. 7yy. TIE BAR WITH: HB 4788'25

Impact

The bill establishes a process wherein owners of qualified replacement infrastructure must apply for exemptions via their local assessing units. This application process requires submissions by March 1 of each year, and local units, in coordination with the Department of Treasury, have 60 days to assess and determine eligibility. The requirement for a detailed report identifying the replaced infrastructure, its condition, and the safety enhancements from the replacements aims to maintain transparency and accountability within the utility sector while facilitating compliance with the new tax exemption regulations.

Summary

House Bill 4787 aims to amend the General Property Tax Act by adding a provision for tax exemptions related to qualified replacement electric distribution infrastructure. This bill stipulates that beginning with taxes levied after December 31, 2025, such infrastructure will be exempt from general property taxes, which is a significant change in how utilities are taxed in Michigan. The intent behind this amendment is to encourage the replacement of aging and depreciated electric distribution systems with more modern, reliable alternatives by alleviating some of the tax burdens on utility companies engaged in these infrastructure improvements.

Contention

There are notable points of contention surrounding the implications of passing HB4787. Proponents argue that this bill could lead to improved reliability and safety in electric distribution, as utilities are encouraged to replace outdated infrastructure. Conversely, critics may express concern that such tax exemptions could lead to decreased local revenue for municipalities that depend on property taxes for funding essential services. Additionally, some may worry about the criteria used for determining qualified infrastructure and whether it fairly benefits all utility providers or disproportionately advantages larger corporations at the expense of smaller, local companies.