Bill Summary – FastDemocracy

Legislative Analysis
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“THE MID” BROWNFIELD CREDIT EXTENSION
                                                                                http://www.house.mi.gov/hfa
House Bill 4829 as enacted                                                      Analysis available at
Public Act 120 of 2023                                                          http://www.legislature.mi.gov
Sponsor: Rep. Abraham Aiyash
House Committee: Tax Policy
Senate Committee: Committee of the Whole
Complete to 10-14-23
SUMMARY:
           House Bill 4829 amends the of the Michigan Business Tax Act, which deals with brownfield
           tax credits, to extend the time within which a development project in Detroit can be completed
           and still be eligible, without penalty, for preapproved brownfield tax credits.
           Under section 437(10) of the act, if a multiphase project is not completed within 10 years after
           the date of the taxpayer’s preapproval letter, the taxpayer must pay back to the state an amount
           equal to all the credits claimed and assigned for all components of the project, and no credits
           based on that project can be claimed from then on.
           Public Act 27 of 20211 created an exception so that a qualified taxpayer that was approved for
           a credit based on a multiphase project by Resolution 2010-219 of the Michigan Economic
           Growth Authority (MEGA) Board and issued a preapproval letter on June 10, 2011, has until
           September 14, 2023, to complete that project and claim the credit without penalty.
           The bill extends the deadline for this to December 31, 2026, as long as the qualified taxpayer
           submits quarterly reports as described below and the temporary or final certificate of
           occupancy has been issued by the local municipality in which the project were located for all
           buildings or facilities that constitute the completed component by the new deadline.
           The bill requires qualified taxpayers that were approved taxpayers that fit the criteria for a
           project whose deadline was extended under the bill to file a quarterly report to the Michigan
           Strategic Fund that includes at least the following:
               • The expected completion date.
               • The names of any contractors or subcontractors engaged on the project.
               • The percentage of the project completed as of the immediately preceding quarter.
           The bill also repealed section 601 of the Michigan Business Tax Act, which pertained to the
           refund or deposit into the Countercyclical Budget and Economic Stabilization Fund of certain
           excess revenue collections under the act.
           MCL 208.1437 and MCL 208.1601 (repealed)
1
    http://legislature.mi.gov/doc.aspx?2021-SB-0437
House Fiscal Agency                                                                              Page 1 of 2
BACKGROUND:
        Resolution 2010-219 provided a credit to Woodward Offices, LLC, for an eligible property in
        the city of Detroit on December 14, 2010. Resolution 2020-046 2 amended the scope of that
        two-phase project located at 3750 Woodward Avenue. The project, called “The Mid,” is a
        proposed 3.8-acre mixed use development in Midtown Detroit. 3 The developers will need to
        complete seven stories of a proposed 15-story tower by the deadline.
        According to committee testimony, the project has been delayed by the COVID-19 pandemic
        and cascading effects that have complicated the developer’s ability to secure financing.
FISCAL IMPACT:
        Extending the date by which the qualified taxpayer for the project specified in the bill must
        complete the project and claim the credit presumably will shift the credit’s impact on general
        fund revenues to sometime after September 14, 2023 (the current deadline) but before
        December 31, 2026. In that event, the bill will have no direct impact on general fund revenue
        since the credits not claimed prior to the current deadline would be claimed in a future year.
        However, in absence of the bill, if the credit were not claimed at all, the state would pay
        approximately $10.0 million less in credits than currently anticipated.
                                                               Legislative Analyst:     Alex Stegbauer
                                                                    Fiscal Analyst:     Ben Gielczyk
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
2
  https://www.michiganbusiness.org/4a8363/globalassets/documents/msf-board/msf-board-packets/april-special-
meeting-packet_web.pdf
3
  https://detroitmi.gov/departments/planning-and-development-department/design-and-development-
innovation/community-benefits-ordinance/past-cbo-engagement/mid
House Fiscal Agency                                                           HB 4829 as enacted    Page 2 of 2
Statutes affected: 
Substitute (H-4): 208.1437, 208.1601
House Introduced Bill: 208.1437, 208.1601
As Passed by the House: 208.1437, 208.1601
As Passed by the Senate: 208.1437, 208.1601
House Concurred Bill: 208.1437, 208.1601
Public Act: 208.1437, 208.1601
House Enrolled Bill: 208.1437, 208.1601