BROWNFIELD; DEFINE QUALIFIED FACILITY S.B. 562:
ANALYSIS AS ENACTED
Senate Bill 562 (as enacted) PUBLIC ACT 178 of 2022
Sponsor: Senator Roger Victory
Senate Committee: Economic and Small Business Development
House Committee: Local Government and Municipal Finance
RATIONALE
Brownfield properties are properties that are blighted or contaminated and that are eligible for redevelopment with the use of certain funding mechanisms, such as tax increment financing (see BACKGROUND). The Brownfield Redevelopment Financing Act specifies which of these properties are eligible for redevelopment. In 2016, Public Act 471 amended the Brownfield Redevelopment Financing Act to modify the scope of properties eligible for redevelopment, specifically removing from eligibility a landfill facility area of 140 or more contiguous acres that contained a landfill, a material recycling facility, and an asphalt plant that were no longer in operation. Some people believe that sites fitting the above description will benefit from brownfield redevelopment. Accordingly, it was suggested that the Act be amended to include as an eligible property a landfill facility similar to the one described above.
CONTENT
The bill amended the Brownfield Redevelopment Financing Act to modify the definition of "eligible activities" and to define "qualified facility".
Generally, "eligible activities" include activities for which a brownfield redevelopment authority can expend tax increment revenues to acquire or prepare eligible property. The Act specifies eligible activities for all eligible properties and for eligible properties that meet certain requirements. For example, for all eligible properties, eligible activities include Department of Environment, Great Lakes, and Energy specific activities, relocation of public buildings or operations for economic development purposes, and reasonable costs of environmental insurance, among other things.
Under the bill, "eligible activities" also includes the following for eligible property that is a qualified facility that is not located in a qualified local governmental unit and that is a facility, functionally obsolete, or blighted:
-- Activities considered eligible activities for all eligible properties.
-- Infrastructure improvements that directly benefit eligible property.
-- Site preparation that is not a response activity.
The bill defines "qualified facility" as a landfill facility area of 15 or more contiguous acres that is located in a city and that contains, contained, or is adjacent to a landfill, a material recycling facility, or an asphalt plant that is no longer in operation.
BACKGROUND
Tax Increment Financing
The Act allows a municipality to establish a brownfield redevelopment authority and provides the
authority the power to determine how the captured taxable value of each parcel of eligible property is spent. Captured taxable value is the incremental increase of an eligible property's initial taxable value determined when that eligible property became part of a brownfield redevelopment plan. An authority can "capture" property tax revenue from incremental increases in the eligible property's value and spend the captured revenue for the development of that eligible property. Authorities regularly spend these tax increment funds to retire debt issued for the finance of a project or to directly improve the eligible property.
Qualified Local Governmental Unit
The Obsolete Property Rehabilitation Act provides the qualifications that a local governmental unit must meet to be a qualified local governmental unit. For a city or township to qualify, they must have a median family i