SB 723: Economic development: brownfield redevelopment authority; transformational brownfield plan; modify. Amends secs. 2, 13c, 14a & 16 of 1996 PA 381 (MCL 125.2652 et seq.) & adds secs.16a & 16b. - Michigan

As Passed by the Senate → As Passed by the House · 21 edits · Jul 3, 2026

MAJOR

The House made substantial changes to the Senate-passed version of SB 723, which amends Michigan's Brownfield Redevelopment Financing Act. The most significant changes include: removing the entire state brownfield redevelopment fund (section 8a) and its associated grant/loan program; adding a detailed 'withholding-disqualified employee' framework to prevent in-state job relocations from generating tax capture revenues; doubling the annual tax capture limit from $80 million to $160 million while reducing the total cap from $3.5 billion to $3.2 billion; shortening the construction period tax capture window from 10 years to 5 years; removing special provisions for qualified cultural institutions and high-demand industries; and eliminating the 25% state retention of tax capture revenues that funded housing, child care, and small business programs.

FISCAL

The entire state brownfield redevelopment fund (section 8a) was eliminated. This revolving fund had been used for administrative costs, deposits into the clean Michigan initiative bond fund, a grant and loan program operated by the Michigan strategic fund, distribution of tax capture revenues, and transfers to the housing development fund.

The annual tax capture limit was doubled from $80 million to $160 million, and the total cumulative tax capture limit was reduced from $3.5 billion to $3.2 billion. The $30 million overage cap above the base limit was removed.

The 25% state retention of tax capture revenues was eliminated. Previously, 40% of the retained amount went to the Michigan housing and community development fund, 40% to child care programs, and 20% to small business and placemaking programs.

The $100 million allocation for transformational brownfield plans on property owned by a bankruptcy environmental response trust was removed.

The carryforward period for unused annual approval authority was extended from December 31, 2027 to December 31, 2032.

The per-plan cap of $300 million was moved to its own subsection and now explicitly authorizes the state treasurer to require repayment of past disbursements (in addition to reducing future disbursements) if a plan exceeds the limit by more than a de minimis amount.

DEFINITION

New definitions added for 'withholding-disqualified employee' (an employee at an employer with 50+ in-state employees or receiving a strategic fund incentive who is not in a genuinely new job), 'withholding-disqualified entity' (a business relocating within the state without expanding size, headcount, or having a documented valid business reason), plus supporting definitions for hospitality employee, retail employee, and new job.

Section 266a (MCL 206.266a) was added to the list of income tax credit sections referenced in both the income tax capture revenue calculation and the initial income tax value definition, reflecting a new tax credit provision.

ELIGIBILITY

Withholding tax capture revenues now exclude income tax withholdings attributable to withholding-disqualified employees or employees of a withholding-disqualified entity, replacing the simpler prior language about relocated employers and cut-and-rehired positions. Employers must report information to determine disqualification status and may be required to annually certify compliance.

The provision allowing more than 50% income tax capture for businesses in high-demand industries or with high job multipliers (with requirements to demonstrate new jobs and maintain existing ones) was removed entirely.

The affordable housing requirement for residential projects was narrowed from 'affordable or workforce housing' to just 'affordable housing,' now defined as units rented or sold to income-qualified households. A formal definition of 'affordable housing' was added.

Clarifying language was added stating that housing property under a transformational brownfield plan can still qualify as eligible property under the general housing provision (subparagraph i) if those requirements are met, preventing an unintended gap in eligibility.

TIMELINE

The construction period tax capture window was shortened from 10 years after ground is broken to 5 years after the Michigan strategic fund initially approves the transformational brownfield plan.

The deadline for when the safe harbor method of accounting must be elected before project approval was extended from December 31, 2025 to December 31, 2026. For projects approved on or before that date, a safe harbor election still cannot be rescinded without strategic fund approval.

The public database deadline was extended from April 1, 2026 to April 1, 2027, and its scope was narrowed from all brownfield plans to work plans only. The department of treasury and Michigan state housing development authority were added as data providers.

SCOPE

Special provisions for qualified cultural institution projects were removed, including the ability to capture 100% of withholding tax capture revenues for up to 20 years, and the definitions requiring over $400 million in capital investment and over 750,000 annual visitors.

The mixed-use requirement waiver was narrowed. Previously it could be waived for plans meeting location/population/investment requirements, qualified cultural institution projects, or industrial projects. Now it can only be waived for plans meeting the location, population, and minimum investment requirement.

ENFORCEMENT

The provision that canceled all tax capture authority if an owner or developer reduced employees resulting in net job loss to the state was removed.

The bad faith provision that triggers cessation of reimbursement was clarified to apply specifically to bad faith 'with respect to the level of capital investment.'

The performance postaudit frequency was reduced from every 3 years to every 4 years, and the trigger for strategic fund review was narrowed from plans 'not meeting expectations' to transformational brownfield plans 'not resulting in the expected levels of capital investment.'

REQUIREMENT

Annual project milestones now must be met to capture or continue capturing taxes (previously they only had to be included in the agreement). A formal definition of 'milestone' was added covering construction progress, capital investment, or residential housing completion goals.

As Passed by the House → Substitute (H-1) · 4 edits

MODERATE

The House substitute for SB 723 (Brownfield Redevelopment Financing Act) makes several modifications to the transformational brownfield plan provisions, most notably adding a deadline requiring developers to elect the safe harbor accounting method before project approval for any new project approved after December 31, 2026, and adding annual project milestone requirements to development agreements. These changes tighten the procedural framework for how tax capture revenues are calculated and disbursed under transformational brownfield plans.

REQUIREMENT

For both income tax capture revenues and withholding tax capture revenues, a new rule requires that for any new project approved by the Michigan strategic fund board after December 31, 2026, the owner or developer must elect to use the safe harbor method of accounting before project approval, rather than at any time before first reimbursement as previously allowed.

Rescission rules for the safe harbor election were clarified: for income tax capture revenues, an election once made cannot be rescinded; for withholding tax capture revenues, projects approved on or before December 31, 2026 cannot rescind without Michigan strategic fund approval.

Section 13c(6) now requires that for transformational brownfield plans approved after the effective date of the amendatory act adding section 16a, the written development or reimbursement agreement must include annual project milestones that must be met to capture taxes or continue capturing taxes. Milestones may include goals regarding construction progress, capital investment, or residential housing completion.

DEFINITION

The standalone definition of 'withholding-disqualified employee' was removed from section 2, with subsequent definitions renumbered accordingly. The concept still appears to be referenced within the withholding tax capture revenues calculation provisions.

Senate Concurred Bill → As Passed by the House · 3 edits · Jul 3, 2026

MINOR

The bill underwent formatting cleanup to standardize legal citations and punctuation, while also refining the definition of 'eligible property' to clarify that infrastructure improvements must directly benefit the property. Additionally, the rules for adjusting 'safe harbor' tax calculations were updated to explicitly allow for accounting changes after plan approval, provided they do not increase total tax revenue.

Scope change

The scope of eligibility for infrastructure improvements was clarified to require a direct benefit to the property, and the administrative flexibility for adjusting tax calculations was slightly expanded.

DEFINITION

Standardized the formatting of legal citations for the Natural Resources and Environmental Protection Act to ensure consistency.

Clarified that infrastructure improvements on eligible property must directly benefit the property to qualify.

REQUIREMENT

Refined the language regarding the adjustment of safe harbor tax amounts to explicitly permit changes after plan approval if they do not increase total revenue.

Substitute (H-1) - 3 → Senate Concurred Bill · 8 edits

MODERATE

This bill amends the Brownfield Redevelopment Financing Act to create a new 'transformational brownfield plan' category for large-scale, mixed-use projects. It introduces significant new funding mechanisms, including capture of income, withholding, and sales/use taxes, alongside existing tax increment financing. The changes establish strict minimum investment thresholds based on population, mandate affordable housing components, and set a $3.2 billion aggregate funding cap to ensure substantial economic revitalization.

Scope change

The bill expands the scope of eligible projects to include large-scale mixed-use developments (minimum $15M-$500M investment depending on population) and adds new tax capture mechanisms (income, withholding, sales/use) that were previously unavailable for brownfield projects.

FISCAL

Added new revenue streams including income tax capture, withholding tax capture, and sales/use tax capture to fund eligible activities in transformational brownfield plans.

Set a total annual disbursement limit of $160 million and a lifetime cap of $3.2 billion for all transformational brownfield plan reimbursements.

REQUIREMENT

Established minimum capital investment thresholds ranging from $15 million to $500 million based on municipal population size to qualify as a transformational brownfield plan.

Mandated that transformational brownfield plans include affordable housing components, with up to 100% of income tax capture revenues allowed if 20% of units are affordable.

Added a requirement for a searchable public dataset of all approved work plans, including details on location, owner, and project status.

DEFINITION

Created new definitions for 'transformational brownfield plan,' 'economic opportunity zone,' 'withholding-disqualified employee,' and 'safe harbor method' for tax calculations.

TIMELINE

Restricted the Michigan Strategic Fund from approving new transformational brownfield plans after December 31, 2027, and limited approvals per municipality before 2022.

ENFORCEMENT

Required independent third-party underwriting analyses and established remedial actions, including reducing reimbursements or rescinding plans, if actual investment falls below approved amounts.

Substitute (H-1) - 2 → Substitute (H-1) - 3 · 1 edit

MINOR

The bill text was reformatted to update the version header and page numbering, likely reflecting a new iteration of the bill after it passed the House. No substantive policy changes, such as new funding amounts, eligibility criteria, or legal definitions, were identified in the provided text.

TECHNICAL

The document header was updated to reflect the bill as passed by the House on July 3, 2026, and page footers were changed to include a new amendment identifier and page numbers.

Substitute (S-6) - 3 → Substitute (H-1) - 2 · 1 edit

MINOR

The bill was amended to remove references to sections 8a and 16b, which likely pertains to specific provisions related to the Brownfield Redevelopment Financing Act. This change narrows the scope of the bill by excluding these sections from the list of amendments and additions, potentially simplifying the legislative text or aligning it with other recent changes made to the act.

Scope change

The bill's scope was narrowed by removing references to sections 8a and 16b from the list of sections being amended and added.

SCOPE

References to amending section 8a and adding section 16b were removed from the bill's description of changes to the Brownfield Redevelopment Financing Act.

Substitute (S-1) - 2 → Substitute (S-6) - 3 · 1 edit

MINOR

The bill was updated to include a new section 16c in addition to sections 16a and 16b, expanding the legislative framework. This change likely introduces new provisions related to the bill's subject matter, such as additional authorities, requirements, or definitions, though the specific content of section 16c is not visible in the provided text.

Scope change

The bill's scope was expanded by adding a new section (16c) to the list of amended or added sections, indicating new substantive content was introduced to the legislation.

SCOPE

Added section 16c to the list of new sections, expanding the bill's scope to include provisions not present in the previous version.

Substitute (S-6) - 2 → Substitute (S-1) - 2 · 1 edit

MINOR

The bill was revised to remove the addition of section 16c, meaning the legislation will no longer include the provisions or amendments associated with that specific new section. This change narrows the bill's scope by reducing the number of new sections added to the existing law.

Scope change

The bill's scope is reduced as it no longer includes the creation of section 16c, limiting the legislative amendments to only sections 16a and 16b.

SCOPE

The addition of section 16c was removed from the list of new sections to be added to the statute.

Substitute (S-1) → Substitute (S-6) · 1 edit

MINOR

The bill was revised to add a new section 16c, expanding the legislative framework beyond the previous sections 16a and 16b. This addition likely introduces new provisions, definitions, or requirements related to the bill's subject matter, ensuring the law remains current or addresses emerging issues.

Scope change

The bill's scope was expanded by the addition of section 16c, which may introduce new rules, definitions, or operational requirements not present in the earlier version.

SCOPE

Added section 16c to the list of new sections being enacted, expanding the bill's structural components.

Substitute (H-1) → Substitute (S-1) · 3 edits

MINOR

The bill's scope was expanded to include a new section (8a) alongside existing sections, indicating a broadened legislative focus. This change suggests the bill now addresses additional areas or requirements related to brownfield redevelopment financing that were not present in the previous version.

Scope change

The bill's scope was expanded by adding a reference to a new section (8a) in the list of amended sections, implying new provisions or requirements have been introduced.

SCOPE

Added section 8a to the list of sections being amended, indicating new substantive provisions related to the Brownfield redevelopment financing act.

Added MCL 125.2658a to the list of statutory citations, corresponding to the new section 8a.

TECHNICAL

Changed the document version identifier from 'H-1' (House substitute) to 'S-1' (Senate substitute), reflecting the bill's progression through the legislative process.

As Passed by the Senate → Substitute (H-1) · 4 edits

MODERATE

The bill text was replaced with the official legislative content for Senate Bill 723, removing previous error messages and placeholder text. This document defines key terms for a brownfield redevelopment program, specifically establishing criteria for what constitutes 'blighted' property and introducing new definitions for financial and administrative concepts like 'captured taxable value' and 'construction period tax capture revenues'.

Scope change

The bill now applies to the Brownfield Redevelopment Financing Act, defining eligibility for properties deemed 'blighted' and outlining the financial mechanisms for redevelopment projects.

DEFINITION

Added comprehensive definitions for terms such as 'Authority', 'Blighted', 'Brownfield plan', and 'Department' to clarify the legal framework.

Defined 'land bank fast track authority' properties as eligible for blighted status, expanding the scope of properties that can participate in the program.

ELIGIBILITY

Established seven specific criteria for property to be classified as 'blighted', including being a public nuisance, a fire hazard, having disconnected utilities, or containing buried demolition debris.

FISCAL

Introduced the concept of 'captured taxable value' and 'construction period tax capture revenues' to explain how tax revenues generated during construction or renovation of eligible properties are calculated and utilized.

Senate Introduced Bill → As Passed by the Senate · 8 edits · Dec 9, 2025

MODERATE

The bill was amended to significantly increase funding limits and extend program deadlines, while adding stricter financial oversight and new reporting requirements for 'transformational' brownfield projects. The changes aim to allow larger projects to proceed by raising the annual tax capture cap from $80 million to $175 million and the total program cap from $1.6 billion to $3.5 billion, alongside a deadline extension from 2027 to 2029. New provisions require independent third-party audits for large projects, mandate affordable housing agreements for high-income tax usage, and expand reporting on housing demographics and capital investment.

Scope change

The scope of eligible projects was expanded by raising the minimum capital investment thresholds for 'transformational brownfield plans' based on municipality population size, allowing more mid-sized and smaller cities to qualify for the program.

FISCAL

Increased the annual limit on tax capture reimbursements from $80 million to $175 million and raised the total program cap from $1.6 billion to $3.5 billion.

TIMELINE

Extended the deadline for approving new transformational brownfield plans from December 31, 2027, to December 31, 2029.

Extended the deadline for approving plans in small municipalities (under 25,000 population) from 2022 to 2029.

REQUIREMENT

Mandated independent third-party underwriting and fiscal benefit analyses for projects utilizing significant tax capture revenues or exceeding $100 million in development costs.

Required binding affordable housing agreements for projects seeking to use more than 50% of income tax capture revenues.

Added new reporting requirements for the number of housing units produced, income-qualified households served, and racial/socioeconomic data on residents.

ELIGIBILITY

Raised the minimum capital investment thresholds required for a project to be classified as 'transformational' across various population tiers.

DEFINITION

Added specific definitions for 'transformational brownfield plan' and 'economic opportunity zone' to clarify eligibility criteria.

Economic development: brownfield redevelopment authority; transformational brownfield plan; modify. Amends secs. 2, 13c, 14a & 16 of 1996 PA 381 (MCL 125.2652 et seq.) & adds secs.16a & 16b.

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