Legislation Expanding Commercial Property Assessed Clean Energy, Brownfield Redevelopment Act Sent to Gov. Whitmer With Bipartisan Support
LANSING, Mich. (June 28, 2023) — This week, the Michigan Senate voted to pass two bills sponsored by Sen. Kristen McDonald Rivet (D-Bay City): Senate Bill 303, which (along with Senate Bill 302) would expand the scope of projects and properties eligible for Commercial Property Assessed Clean Energy (C-PACE) financing; and Senate Bill 130 which (along with Senate Bills 129, 131–132) would amend the Brownfield Redevelopment Financing Act to allow the use of tax increment financing for the development and support of residential housing.
“When we’re thoughtful, we can tackle climate change and boost our economy at the same time,” said McDonald Rivet. “These bills give Michigan businesses, agribusinesses, and local governments an optional tool to develop property in ways that benefit the environment and their bottom lines. These commonsense policies are examples of how wins for our environment and economy can overlap.”
C-PACE legislation will increase access to a tool that achieved over $332 million in energy savings for Michigan businesses over the past decade. The expanded eligibility to the C-PACE financing tool means more Michigan businesses and agribusinesses can make investments to lower their costs and carbon footprints.
“It is encouraging to see Michigan continue to embrace the immensely successful commercial PACE program, which has so far generated hundreds of millions of investments in renewable energy and energy efficiency projects,” said Dr. Laura Sherman, President of the Michigan Energy Innovation Business Council. “We look forward to these bills becoming law, furthering job creation and investment in this booming industry sector.”
Senate Bill 130 is part of a legislative package updating the Brownfield Redevelopment Financing Act to give local governments a tool to work with builders, owners and others to redevelop previously contaminated or blighted sites for housing purposes. The package would also create the second residential TIF program in the U.S. and the first one allowing large development projects. Tax increment financing, or TIF, reimburses developers with captured taxes from projects.
“Affordable housing is a major concern in every senator’s district throughout our state. This legislation will provide a tool and a first step to address that issue head on,” said the sponsor of the main bill, Sen. Sam Singh (D- East Lansing).
Just as C-PACE is an optional tool, the Brownfield TIF legislation is an opt-in for local governments, not a requirement.
BACKGROUND
The Brownfield Redevelopment Financing Act 381 of 1996 provides tax incentives (i.e., tax increment financing) to develop brownfield properties in an area at or on which there has been a release (or threat of release) or disposal of a hazardous substance. Tax Increment Financing (TIF) subsidizes an entity by diverting a portion of their taxes to help finance a development.
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