HOUSE BILL No. 4198

 

February 8, 2011, Introduced by Reps. Slavens, Melton, Lane, Darany, Haugh, Townsend, Kandrevas, Smiley, Ananich, Dillon, McCann, Liss, Rutledge, Constan, Segal, Barnett, Bauer, Stapleton, Hovey-Wright, Hobbs, Irwin, Bledsoe, Switalski, Geiss, Stallworth, Cavanagh, Lipton, Byrum, Durhal, Lindberg, Howze, Santana, Brunner, Oakes, Brown, Talabi and Womack and referred to the Committee on Commerce.

 

     A bill to amend 1996 PA 381, entitled

 

"Brownfield redevelopment financing act,"

 

by amending section 15 (MCL 125.2665), as amended by 2007 PA 201.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 15. (1) An authority shall not do any of the following:

 

     (a) For eligible activities not described in section 13(15),

 

use taxes levied for school operating purposes captured from

 

eligible property unless the eligible activities to be conducted on

 

the eligible property are eligible activities under part 201 of the

 

natural resources and environmental protection act, 1994 PA 451,

 

MCL 324.20101 to 324.20142, consistent with a work plan approved by

 

the department after July 24, 1996 and before January 1, 2013.

 

However, except as provided in subdivision (e), an authority may

 

use taxes levied for school operating purposes captured from

 


eligible property without the approval of a work plan by the

 

department for the reasonable costs of 1 or more of the following:

 

     (i) Site investigation activities required to conduct a

 

baseline environmental assessment and to evaluate compliance with

 

section 20107a of the natural resources and environmental

 

protection act, 1994 PA 451, MCL 324.20107a.

 

     (ii) Completing a baseline environmental assessment report.

 

     (iii) Preparing a plan for compliance with section 20107a of the

 

natural resources and environmental protection act, 1994 PA 451,

 

MCL 324.20107a.

 

     (b) For eligible activities not described in section 13(15),

 

other than activities that are exempt from the work plan approval

 

process under subsection (1)(a), use funds from a local site

 

remediation revolving fund that are derived from taxes levied for

 

school operating purposes unless the eligible activities to be

 

conducted are eligible activities under part 201 of the natural

 

resources and environmental protection act, 1994 PA 451, MCL

 

324.20101 to 324.20142, consistent with a work plan that has been

 

approved by the department after July 24, 1996.

 

     (c) Use funds from a local site remediation revolving fund

 

created pursuant to section 8 that are derived from taxes levied

 

for school operating purposes for the eligible activities described

 

in section 13(15) unless the eligible activities to be conducted

 

are consistent with a work plan approved by the Michigan economic

 

growth authority.

 

     (d) Use taxes captured from eligible property to pay for

 

eligible activities conducted before approval of the brownfield

 


plan except for costs described in section 13(16).

 

     (e) Use taxes levied for school operating purposes captured

 

from eligible property for response activities that benefit a party

 

liable under section 20126 of the natural resources and

 

environmental protection act, 1994 PA 451, MCL 324.20126, except

 

that a municipality that established the authority may use taxes

 

levied for school operating purposes captured from eligible

 

property for response activities associated with a landfill.

 

     (f) Use taxes captured from eligible property to pay for

 

administrative and operating activities of the authority or the

 

municipality on behalf of the authority except for costs described

 

in section 13(16) and for the reasonable costs for preparing a work

 

plan for the eligible property, including the actual cost of the

 

review of the work plan under this section.

 

     (2) To seek department approval of a work plan under

 

subsection (1)(a) or (b), the authority shall submit all of the

 

following for each eligible property:

 

     (a) A copy of the brownfield plan.

 

     (b) Current ownership information for each eligible property

 

and a summary of available information on proposed future

 

ownership, including the amount of any delinquent taxes, interest,

 

and penalties that may be due.

 

     (c) A summary of available information on the historical and

 

current use of each eligible property, including a brief summary of

 

site conditions and what is known about environmental contamination

 

as that term is defined in section 20101 of the natural resources

 

and environmental protection act, 1994 PA 451, MCL 324.20101.

 


     (d) Existing and proposed future zoning for each eligible

 

property.

 

     (e) A brief summary of the proposed redevelopment and future

 

use for each eligible property.

 

     (f) A separate work plan, or part of a work plan, for each

 

eligible activity to be undertaken.

 

     (3) Upon receipt of a request for approval of a work plan

 

under subsection (2) or a portion of a work plan that pertains to

 

only baseline environmental assessment activities or due care

 

activities, or both, the department shall review the work plan

 

according to subsection (4) and provide 1 of the following written

 

responses to the requesting authority within 60 days:

 

     (a) An unconditional approval.

 

     (b) A conditional approval that delineates specific necessary

 

modifications to the work plan to meet the criteria of subsection

 

(4), including, but not limited to, individual activities to be

 

added or deleted from the work plan and revision of costs.

 

     (c) If the work plan lacks sufficient information for the

 

department to respond under subdivision (a), (b), or (d) for any

 

specific activity, a letter stating with specificity the necessary

 

additions or changes to the work plan to be submitted before that

 

activity will be considered by the department. The department shall

 

respond under subdivision (a), (b), or (d) according to this

 

section for the other activities in the work plan.

 

     (d) A denial if the property is not an eligible property under

 

this act, if the work plan contemplates the use of taxes levied for

 

school operating purposes prohibited by subsection (1)(e), or for

 


any specific activity if the activity is prohibited by subsection

 

(1)(d). The department may also deny any activity in a work plan

 

that does not meet the conditions in subsection (4) only if the

 

department cannot respond under subdivision (b) or (c). The

 

department shall accompany the denial with a letter that states

 

with specificity the reason for the denial. The department shall

 

respond under subdivision (a), (b), or (c) according to this

 

section for any activities in the work plan that are not denied

 

under this subdivision. If the department denies all or a portion

 

of a work plan under this subdivision, the authority may

 

subsequently resubmit the work plan.

 

     (4) The department may approve a work plan if the following

 

conditions have been met:

 

     (a) Whether some or all of the activities constitute due care

 

activities or additional response activities other than activities

 

that are exempt from the work plan approval process under

 

subsection (1)(a).

 

     (b) The due care activities and response activities, other

 

than the activities that are exempt from the work plan approval

 

process under subsection (1)(a), are protective of the public

 

health, safety, and welfare and the environment. The department may

 

approve additional response activities that are more protective of

 

the public health, safety, and welfare and the environment than

 

required by section 20107a of the natural resources and

 

environmental protection act, 1994 PA 451, MCL 324.20107a, if those

 

activities provide public health or environmental benefit. In

 

review of a work plan that includes activities that are more

 


protective of the public health, safety, and welfare and the

 

environment, the department's considerations may include, but are

 

not limited to, all of the following:

 

     (i) Proposed new land use and reliability of restrictions to

 

prevent exposure to contamination.

 

     (ii) Cost of implementation activities minimally necessary to

 

achieve due care compliance, the incremental cost of all additional

 

response activities relative to the cost of all response

 

activities, and the total cost of all response activities.

 

     (iii) Long-term obligations associated with leaving

 

contamination in place and the value of reducing or eliminating

 

these obligations.

 

     (c) The estimated costs for the activities as a whole are

 

reasonable for the stated purpose. Except as provided in

 

subdivision (b), the department shall make the determination in

 

this subdivision only after the department determines that the

 

conditions in subdivisions (a) and (b) have been met.

 

     (5) If the department fails to provide a written response

 

under subsection (3) within 60 days after receipt of a request for

 

approval of a work plan, the authority may proceed with the

 

activities as outlined in the work plan as submitted for approval.

 

Except as provided in subsection (6), activities conducted pursuant

 

to a work plan that was submitted to the department for approval

 

but for which the department failed to provide a written response

 

under subsection (3) shall be considered approved for the purposes

 

of subsection (1). Within 45 days after receiving additional

 

information requested from the authority under subsection (3)(c),

 


the department shall review the additional information according to

 

subsection (4) and provide 1 of the responses described in

 

subsection (3) to the requesting authority for the specific

 

activity. If the department does not provide a response to the

 

requesting authority within 45 days after receiving the additional

 

information requested under subsection (3)(c), the activity is

 

approved under subsection (1).

 

     (6) The department may issue a written response to a work plan

 

more than 60 days but less than 6 months after receipt of a request

 

for approval. If the department issues a written response under

 

this subsection, the authority is not required to conduct

 

individual activities that are in addition to the individual

 

activities included in the work plan as it was submitted for

 

approval and failure to conduct these additional activities shall

 

not affect the authority's ability to capture taxes under

 

subsection (1) for the eligible activities described in the work

 

plan initially submitted under subsection (5). In addition, at the

 

option of the authority, these additional individual activities

 

shall be considered part of the work plan of the authority and

 

approved for purposes of subsection (1). However, any response by

 

the department under this subsection that identifies additional

 

individual activities that must be carried out to satisfy part 201

 

of the natural resources and environmental protection act, 1994 PA

 

451, MCL 324.20101 to 324.20142, must be satisfactorily completed

 

for the activities to be considered acceptable for the purposes of

 

compliance with part 201 of the natural resources and environmental

 

protection act, 1994 PA 451, MCL 324.20101 to 324.20142.

 


     (7) If the department issues a written response under

 

subsection (6) to a work plan and if the department's written

 

response modifies an individual activity proposed by the work plan

 

of the authority in a manner that reduces or eliminates a proposed

 

response activity, the authority must complete those individual

 

activities in accordance with the department's response in order

 

for that portion of the work plan to be considered approved for

 

purposes of subsection (1), unless 1 or more of the following

 

conditions apply:

 

     (a) Obligations for the individual activity have been issued

 

by the authority, or by a municipality on behalf of the authority,

 

to fund the individual activity prior to issuance of the

 

department's response.

 

     (b) The individual activity has commenced or payment for the

 

work has been irrevocably obligated prior to issuance of the

 

department's response.

 

     (8) It shall be in the sole discretion of an authority to

 

propose to undertake additional response activities at an eligible

 

property under a brownfield plan. The department shall not require

 

a work plan to include additional response activities.

 

     (9) The department shall review the portion of a work plan

 

that includes additional response activities in accordance with

 

subsection (4).

 

     (10) The department's approval or denial of a work plan

 

submitted under this section constitutes a final decision in regard

 

to the use of taxes levied for school operating purposes but does

 

not restrict an authority's use of tax increment revenues

 


attributable to local taxes to pay for eligible activities under a

 

brownfield plan. If a person is aggrieved by the final decision,

 

the person may appeal under section 631 of the revised judicature

 

act of 1961, 1961 PA 236, MCL 600.631.

 

     (11) The authority shall reimburse the department for the

 

actual cost incurred by the department or a contractor of the

 

department to review a work plan under subsection (1)(a) or (b)

 

under this section. Funds paid to the department under this

 

subsection shall be deposited in the cost recovery subaccount of

 

the cleanup and redevelopment fund created under section 20108 of

 

the natural resources and environmental protection act, 1994 PA

 

451, MCL 324.20108.

 

     (12) The department shall submit a report each year on or

 

before March 1 to each member of the legislature that contains all

 

of the following:

 

     (a) A compilation and summary of all the information submitted

 

under subsection (2).

 

     (b) The amount of tax increment revenues approved by the

 

department in the immediately preceding calendar year, including

 

taxes levied for school operating purposes, to conduct eligible

 

activities.

 

     (13) To seek Michigan economic growth authority approval of a

 

work plan under subsection (1)(c) or section 13(15), the authority

 

shall submit all of the following for each eligible property:

 

     (a) A copy of the brownfield plan.

 

     (b) Current ownership information for each eligible property

 

and a summary of available information on proposed future

 


ownership, including the amount of any delinquent taxes, interest,

 

and penalties that may be due.

 

     (c) A summary of available information on the historical and

 

current use of each eligible property.

 

     (d) Existing and proposed future zoning for each eligible

 

property.

 

     (e) A brief summary of the proposed redevelopment and future

 

use for each eligible property.

 

     (f) A separate work plan, or part of a work plan, for each

 

eligible activity described in section 13(15) to be undertaken.

 

     (g) A copy of the development agreement or reimbursement

 

agreement required under section 13(15), which shall include, but

 

is not limited to, a detailed summary of any and all ownership

 

interests, monetary considerations, fees, revenue and cost sharing,

 

charges, or other financial arrangements or other consideration

 

between the parties.

 

     (14) Upon receipt of a request for approval of a work plan,

 

the Michigan economic growth authority shall provide 1 of the

 

following written responses to the requesting authority within 65

 

days:

 

     (a) An unconditional approval that includes an enumeration of

 

eligible activities and a maximum allowable capture amount.

 

     (b) A conditional approval that delineates specific necessary

 

modifications to the work plan, including, but not limited to,

 

individual activities to be added or deleted from the work plan and

 

revision of costs.

 

     (c) A denial and a letter stating with specificity the reason

 


for the denial. If a work plan is denied under this subsection, the

 

work plan may be subsequently resubmitted.

 

     (15) In its review of a work plan under subsection (1)(c) or

 

section 13(15), the Michigan economic growth authority shall

 

consider the following criteria to the extent reasonably applicable

 

to the type of activities proposed as part of that work plan when

 

approving or denying a work plan:

 

     (a) Whether the individual activities included in the work

 

plan are sufficient to complete the eligible activity.

 

     (b) Whether each individual activity included in the work plan

 

is required to complete the eligible activity.

 

     (c) Whether the cost for each individual activity is

 

reasonable.

 

     (d) The overall benefit to the public.

 

     (e) The extent of reuse of vacant buildings and redevelopment

 

of blighted property.

 

     (f) Creation of jobs.

 

     (g) Whether the eligible property is in an area of high

 

unemployment.

 

     (h) The level and extent of contamination alleviated by or in

 

connection with the eligible activities.

 

     (i) The level of private sector contribution.

 

     (j) The cost gap that exists between the site and a similar

 

greenfield site as determined by the Michigan economic growth

 

authority.

 

     (k) If the developer or projected occupant of the new

 

development is moving from another location in this state, whether

 


the move will create a brownfield.

 

     (l) Whether the project of the developer, landowner, or

 

corporate entity that is included in the work plan is financially

 

and economically sound.

 

     (m) Other state and local incentives available to the

 

developer, landowner, or corporate entity for the project of the

 

developer, landowner, or corporate entity that is included in the

 

work plan.

 

     (n) Any other criteria that the Michigan economic growth

 

authority considers appropriate for the determination of

 

eligibility or for approval of the work plan.

 

     (16) If the Michigan economic growth authority fails to

 

provide a written response under subsection (14) within 65 days

 

after receipt of a request for approval of a work plan, the

 

eligible activities shall be considered approved and the authority

 

may proceed with the eligible activities described in section

 

13(15) as outlined in the work plan as submitted for approval.

 

     (17) The Michigan economic growth authority's approval of a

 

work plan under section 13(15) is final.

 

     (18) The authority shall reimburse the Michigan economic

 

growth authority for the actual cost incurred by the Michigan

 

economic growth authority or a contractor of the Michigan economic

 

growth authority to review a work plan under this section.

 

     (19) The Michigan economic growth authority shall submit a

 

report each year on or before March 1 to each member of the

 

legislature that contains all of the following:

 

     (a) A compilation and summary of all the information submitted

 


under subsection (13).

 

     (b) The amount of tax increment revenues approved by the

 

Michigan economic growth authority in the immediately preceding

 

calendar year, including taxes levied for school operating

 

purposes, to conduct eligible activities.

 

     (20) All taxes levied for school operating purposes that are

 

not used for eligible activities consistent with a work plan

 

approved by the department or the Michigan economic growth

 

authority or for the payment of interest under section 13 and that

 

are not deposited in a local site remediation revolving fund shall

 

be distributed proportionately between the local school district

 

and the school aid fund.

 

     (21) An authority shall not use taxes levied for school

 

operating purposes captured from eligible property for eligible

 

activities for a qualified facility or for eligible activities for

 

property located in an economic opportunity zone.

 

     (22) The department's approval of a work plan under subsection

 

(3)(a) or (b) does not imply an entitlement to reimbursement of the

 

costs of the eligible activities if the work plan is not

 

implemented as approved.

 

     (23) The applicant and the department can, by mutual

 

agreement, extend the time period for any review described in this

 

section. An agreement described in this subsection shall be

 

documented in writing.

 

     (24) Beginning July 1, 2011, the authority shall not use tax

 

increment revenues to pay or reimburse a business entity for

 

eligible activities on eligible properties unless the business

 


entity states, in writing, that the business entity will not

 

knowingly hire or contract with any business entity that knowingly

 

hires an individual who is not authorized under federal law to work

 

in the United States.

 

     (25) Beginning July 1, 2011, the authority shall not use tax

 

increment revenues to pay or reimburse a business entity for

 

eligible activities on eligible properties unless the business

 

entity states, in writing, that the business entity will do all of

 

the following:

 

     (a) Hire only residents of this state to perform eligible

 

activities on eligible properties under this act unless the

 

authority determines that the eligible activities cannot be

 

performed by using only residents of this state for 1 or more of

 

the following:

 

     (i) To the extent necessary to comply with federal law or

 

regulation concerning the use of federal funds.

 

     (ii) To the extent that key management personnel or individuals

 

with special skills, who are not residents of this state, are

 

needed.

 

     (b) Contract with businesses that agree to hire only residents

 

of this state to perform eligible activities on eligible properties

 

under this act unless the authority determines that the eligible

 

activities cannot be performed by using only residents of this

 

state for 1 or more of the following:

 

     (i) To the extent necessary to comply with federal law or

 

regulation concerning the use of federal funds.

 

     (ii) To the extent that key management personnel or individuals

 


with special skills, who are not residents of this state, are

 

needed.

 

     (26) Beginning July 1, 2011, the written agreement described

 

in subsections (24) and (25) shall also contain a remedy provision

 

that provides for all of, but not limited to, a requirement that

 

the business entity may be required to repay some or all of the

 

payments or reimbursements received under this act if the eligible

 

business is determined to be in violation of the provisions of

 

subsection (24) or (25), as determined by the authority.

 

     (27) Each authority shall report to the board of the Michigan

 

strategic fund and on October 1 on the activities of the authority.

 

The report shall include, but is not limited to, all of the

 

following:

 

     (a) The number of Michigan residents employed in new jobs in

 

the immediately preceding year in which subsections (24) and (25)

 

apply.

 

     (b) The total number of new jobs created in all jobs in the

 

immediately preceding year in which subsections (24) and (25)

 

apply.

 

     (c) The specific reasons for each determination of exemption

 

from the provisions of subsection (25)(a) or (b) made by the

 

authority and the number of jobs related to each determination.

 

     (28) The attorney general or appropriate agency of this state

 

shall be responsible for any enforcement necessary to ensure

 

compliance after the applicant has signed the agreement under the

 

provisions described in subsections (24), (25), and (26).