MI HB5987

Amends Michigan's Income Tax Act of 1967 to modify personal income tax rates and add automatic rate reduction provisions based on state budget surplus levels.

Removes the temporary October 1, 2011 expiration date from the 4.35% tax rate established October 1, 2007, making that rate permanent unless triggered by surplus conditions.

Establishes automatic annual rate reductions beginning October 1, 2011: if the countercyclical budget and economic stabilization fund balance reaches $200,000,000 or more at the end of the preceding fiscal year, the maximum rate reduces by 0.1% each year until reaching 3.95%.

After the rate reaches 3.95%, it would further reduce to 3.9% on October 1 of the fiscal year immediately following the year the 3.95% rate was in effect.

Appropriates $100,000 to the Department of Treasury for fiscal year 2006-2007 to implement the provisions, with unexpended amounts carried forward in a work project account rather than lapsing.