HB-4711, As Passed House, September 6, 2007

SUBSTITUTE FOR

HOUSE BILL NO. 4711

     A bill to amend 1996 PA 381, entitled

"Brownfield redevelopment financing act,"

by amending sections 15 and 16 (MCL 125.2665 and 125.2666), section

15 as amended by 2006 PA 32 and section 16 as amended by 2000 PA

145.

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 or remedial

action plan approved by the department after July 24, 1996 and

before January 1, 2008 2017. 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) Evaluation of due care activities.

     (iii) Completing a baseline environmental assessment report.

     (iv) 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),

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 or remedial action 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, for taxes

levied after 2004, 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 or remedial action plan for the eligible property, including

the actual cost of the review of the work plan or remedial action

plan under this section.

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

subsection (1)(a) or (b) or remedial action plan, 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 remedial action plan, or part of a

work plan or remedial action plan, for each eligible activity to be

undertaken.

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

remedial action plan under subsection (2) that pertains to baseline

environmental assessment activities or due care activities, or

both, or a portion of a work plan or remedial action plan that

pertains to only baseline environmental assessment activities or

due care activities, or both, the department shall review the work

plan or remedial action 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 or remedial action plan to meet the

criteria of subsection (4), including, but not limited to,

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

remedial action plan and revision of costs.

     (c) If the work plan or remedial action plan lacks sufficient

information for the department to respond under subdivision (a) or

(b), a letter stating with specificity the necessary additions or

changes to the work plan or remedial action plan to be submitted

before a plan will be considered by the department.

     (4) In its review of a work plan or remedial action plan, the

department shall consider all of the following:

     (a) Whether the individual activities included in the work

plan or remedial action plan are sufficient to complete the

eligible activity.

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

or remedial action plan is required to complete the eligible

activity.

     (c) Whether the cost for each individual activity is

reasonable.

     (4) Within 30 days after receiving additional information from

the requesting authority under subsection (3)(c), the department

shall review the additional information according to this

subsection and provide 1 of the responses described in subsection

(3)(a), (b), or (c) to the requesting authority. If the department

does not provide a response to the requesting authority within 30

days after receiving the additional information under subsection

(3)(c), the work plan or remedial action plan shall be considered

approved for the purposes of subsection (1). The department shall

review a work plan or remedial action plan as follows:

     (a) The department shall determine 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 department shall determine whether the due care

activities or additional response activities, other than 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 shall not reject an

activity on the basis that the activity is 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.

     (c) After the department makes the determinations in

subdivisions (a) and (b), the department shall then determine

whether the estimated costs for those activities as a whole are

reasonable for the stated purpose.

     (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 or remedial action plan, that pertains to

baseline environmental assessment activities or due care

activities, or both, the authority may proceed with the baseline

environmental assessment activities or due care activities, or

both, activities as outlined in the work plan or remedial action

plan as submitted for approval. Except as provided in subsection

(6), baseline environmental assessment activities or due care

activities, or both, activities conducted pursuant to a work plan

or remedial action 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).

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

or remedial action plan that pertains to baseline environmental

assessment activities or due care activities, or both, 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 or remedial action 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 or remedial action 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 or remedial action 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 the baseline

environmental assessment or due care requirements, or both, of 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 baseline environmental assessment or due care

activities, or both, 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 or remedial action plan that pertains

to baseline environmental assessment activities or due care

activities, or both, and if the department's written response

modifies an individual activity proposed by the work plan or

remedial action plan of the authority in a manner that reduces or

eliminates a proposed response activity, the authority must

complete those individual activities included in the baseline

environmental assessment or due care activities, or both, in

accordance with the department's response in order for that portion

of the work plan or remedial action 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 or remedial action plan for either baseline

environmental assessment activities or due care activities, or

both, to include additional response activities.

     (9) The department may reject the portion of a work plan or

remedial action plan that includes additional response activities

and may consider the level of risk reduction that will be

accomplished by the additional response activities in determining

whether to approve or reject the work plan or remedial action plan

or a portion of a plan. The department shall review the portion of

a work plan or remedial action plan that includes additional

response activities in accordance with subsection (4).

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

plan under subsection (1)(a) or (b) or remedial action plan for

additional response activities is final. or remedial action plan

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.

     (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) or

remedial action plan 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 revenue this state would have received if

taxes levied for school operating purposes had not been captured

under this section for the previous calendar year. The amount of

tax increment revenues approved by the department, including taxes

levied for school operating purposes, to conduct eligible

activities.

     (c) The amount of revenue each local governmental unit would

have received if taxes levied for school operating purposes had not

been captured under this section for the previous calendar year.

     (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 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 financial statements of the developer,

landowner, or corporate entity indicate that the developer,

landowner, or corporate entity is financially sound and that the

project of the developer, landowner, or corporate entity that is

included in the work plan is 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 revenue this state would have received if

taxes levied for school operating purposes had not been captured

under this section for the previous calendar year. The amount of

tax increment revenues approved by the department, including taxes

levied for school operating purposes, to conduct eligible

activities.

     (c) The amount of revenue each local governmental unit would

have received if taxes levied for school operating purposes had not

been captured under this section for the previous calendar year.

     (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 or remedial

action plan under subsection (4)(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.

     Sec. 16. (1) The municipal and county treasurers shall

transmit tax increment revenues to the authority not more than 30

days after tax increment revenues are collected.

     (2) The authority shall expend the tax increment revenues

received only in accordance with the brownfield plan. All surplus

funds not deposited in the local site remediation revolving fund of

the authority under section 13(5) shall revert proportionately to

the respective taxing bodies, except as provided in section 15(20).

The governing body may abolish the plan when it finds that the

purposes for which the plan was established are accomplished.

However, the plan shall not be abolished until the principal and

interest on bonds issued under section 17 and all other obligations

to which the tax increment revenues are pledged have been paid or

funds sufficient to make the payment have been segregated.

     (3) The authority shall submit annually to the governing body

and the state tax commission a financial report on the status of

the activities of the authority. The report shall include all of

the following:

     (a) The amount and source of tax increment revenues received.

     (b) The amount and purpose of expenditures of tax increment

revenues.

     (c) The amount of principal and interest on all outstanding

indebtedness.

     (d) The initial taxable value of all eligible property subject

to the brownfield plan.

     (e) The captured taxable value realized by the authority.

     (f) Information concerning any transfer of ownership of or

interest in each eligible property.

     (g) The amount of tax increment revenues attributable to taxes

levied for school operating purposes used for activities described

in section 15(4)(c) and section 2(m)(vii).

(h) (g) All additional information that the governing body or

the state tax commission considers necessary.

     (4) The state tax commission shall collect the financial

reports submitted under subsection (3), compile and analyze the

information contained in those reports, and submit annually a

report based on that information to all of the following standing

committees of the legislature:

     (a) In the house of representatives, the committees

responsible for natural resource management, conservation,

environmental protection, commerce, economic development, and

taxation.

     (b) In the senate, the committees responsible for natural

resource management, conservation, environmental protection,

commerce, and taxation.