The Brownfield Tax
Credit Program, which was created under the Michigan Single Business Tax Act,
will be seeing revisions according to a ruling from the Michigan Strategic Fund
Board. The board approved new criteria for previously approved projects asking
for scope changes during a meeting on Tuesday. The Brownfield Tax Credit
Program is allowed to undergo these changes, according to state law, as long as
the Strategic Fund approves them first.
While the current
maximum liability for any Single Business Tax or Michigan Business Tax Brownfield
credits is $270,980,380. The Michigan Economic Development Corporation (MEDC) suggested
that this policy be updated due to a lack of funding for other MEDC programs.
Following the
approval of the Strategic Fund four new criteria have been added: first,
consideration for the impact on the community and state through job creation
and private investment; second, the amended project’s meeting of current
development guidance goals set by the community; third, firm lending
commitments are planned and are ready to start construction with the goal of
finishing the project in a more timely manner; fourth, shrinking liability through
lessening eligible investment, lengthening the time allotted for finishing the
project, or multi-phase projects will be considered in a good light.
While the proposed
policy changes were accepted by the Strategic Fund Board, concern was raised
over the fact that the liability cap was not lowered, which could lead to an
increase in the amount of smaller projects receiving financing. The fund board
was able to see real life examples while considering the changes to the
Brownfield credits, as companies in East Lansing, Detroit, and Grand Rapids are
currently completing projects that are directly affected by the tax credit.