As you may recall from this spring, I was asked to serve on MDEQ’s initiative to review and improve the “patchwork quilt” of statutes and rules regarding brownfield redevelopment incentives, grants and loans. A CSI II group (of which, in full disclosure, I chaired the Legislative Committee) met regularly over the Spring and Summer and MDEQ has announced two meetings (see the attached flyer) to roll out the proposed changes. These changes have not yet been introduced in the Legislature and thus, are currently only an MDEQ internal recommendation. The hope is that these changes will be introduced shortly.
if passed, these proposed changes should streamline, simplify and speed up the process for loan, grant and TIF approvals to enable projects to get started faster than ever before while supporting a greater range of eligible activities than previously available.
There was some tension between those championing redevelopment and those focusing on environmental remediation but ultimately, there was agreement on a set of changes and clarification of the rules and statutes to clarify the process for obtaining loans, grants and tax increment financing for brownfield redevelopment. The five most significant changes include:
- demolition, lead abatement, asbestos abatement dredging and excavation of uncontaminated but unusable soils may be eligible for grant and loan funding, although certain criteria and prerequisites apply (such as a threshold that at least 51% of the eligible activities are part 201 type expenses);
- one can be technically liable under Part 201, TSCA or RCRA and still be eligible for grant, loan or TIF funding – previously, even someone who submitted a technically deficient BEA was barred from eligibility – with a renewed emphasis on remediation and redevelopment, only those who actually caused contamination are barred from eligibility, again, subject to certain criteria and prerequisites;
- local governments will be able to capture the increase in school taxes to help fund their local brownfield revolving funds – previously, due to technical limits, it was rare to capture such school taxes and this will allow far more locally-directed brownfield redevelopments (which have far greater funding flexibility) than before;
- while the definition of eligible property was changed very little, activities eligible for funding through TIF at an eligible property are broadened to include such things as due care expenses, UST removals, solid waste disposal, sediment removal and disposal (where either the sediments or the upland are contaminated), plan preparation and implementation costs (subject to certain conditions and caps), including the costs to track plan compliance and a clearer set of sheeting and shoring costs;
- overall streamlining of the application and review processes in an effort to speed up the TIF process including giving greater authority to the Michigan Strategic Fund to approve plans of up to $1 Million without waiting for a Fund Board meeting.
Not every issue was agreed upon and some will likely be addressed in the future but, if passed, these proposed changes should streamline, simplify and speed up the process for loan, grant and TIF approvals to enable projects to get started faster than ever, while supporting a greater range of eligible activities than previously available.