[1]I was asked to serve on the Michigan Department of Environmental Quality (MDEQ) initiative to review and improve the “patchwork quilt” of statutes and rules regarding brownfield redevelopment incentives, grants and loans. A Collaborative Stakeholders Initiative group (of which, in full disclosure, I chaired the Legislative Committee) met regularly over the Spring and Summer and MDEQ has announced two meetings 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 Tax Increment Financing (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.
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Arthur H. Siegal is a partner at Jaffe Law and chairs the Firm’s Environmental Practice Group, specializing in environmental law, governmental affairs, energy law, and administrative law.
For over 20 years, he has successfully represented businesses and individuals on dealing with environmental regulations and liabilities and brownfield redevelopment and incentives. Arthur was one of the drafters of the 2010 Michigan Part 201 “superfund” amendments and chaired the legislative subcommittee of the 2014 Collaborative Stakeholder Initiative which worked on improving laws relating to brownfield financial incentives. He also focuses on innovative “green” redevelopment, green energy issues and defense of “greenwashing” claims.
Arthur, a national scholar, earned his Bachelor’s degree with distinction from Wayne State University and is a cum laude graduate of the University of Michigan Law School.
Arthur’s Michigan Green Law Blog: www.michigangreenlaw.com [2]