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HB 5073

Economic development: brownfield redevelopment authority; definitions of housing property and tax capture revenues and cap on total tax capture revenues; clarify definitions and modify cap. Amends secs. 2, 14a & 16 of 1996 PA 381 (MCL 125.2652 et seq.).

2025-2026 Regular Session Introduced by Alabas Farhat

Adds construction-period state income tax on on-site wages to brownfield tax capture, broadens blight definitions, and adjusts the overall cap.

bill electronically reproduced 09/26/2025
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Bill Summary · HB 5073

Summary — HB 5073 (House Bill 5073, 2025)

Title: Economic development: brownfield redevelopment authority; definitions of housing property and tax capture revenues and cap on total tax capture revenues; clarify definitions and modify cap. (Amends 1996 PA 381, secs. 2, 14a & 16 — MCL 125.2652 et seq.)

Purpose / Intent

HB 5073 updates the Brownfield Redevelopment Financing Act to clarify and expand certain definitions (including “blighted” and tax-capture related terms), to add a new form of tax-capture revenue tied to construction wages for transformational brownfield plans, and to modify the statutory cap on total tax-capture revenues available under brownfield plans. The changes are intended to refine eligibility rules and strengthen incentives for redevelopment and remediation of contaminated, blighted, or previously developed properties.

Key provisions (from the introduced version)

  • Revises and clarifies multiple definitions in section 2:
    • Expands what qualifies as “blighted” property (includes municipal/tax-reverted property, land bank-owned property, buried demolition debris, and other specific conditions).
    • Defines “captured taxable value” (method to calculate the increase in taxable value over initial taxable value).
    • Adds/clarifies "combined brownfield plan" and confirms department (EGLE) as the relevant environmental department.
  • Adds a new category, “construction period tax capture revenues,” for transformational brownfield plans:
    • Allows capture of state income tax revenues attributable to wages paid to workers physically present on-site for construction/renovation activities (wages as defined in IRC §3401).
    • Establishes reporting and calculation procedures: owners/developers must report taxable wages to the State Treasurer; the Treasurer multiplies wages by an estimated effective income tax rate (accounting for deductions/credits) to determine capture amounts and may require audits or reconciliations.
  • Clarifies and expands “department specific activities” (eligible environmental activities) to include a range of remediation, removal, abatement, disposal, dust control, sheeting/shoring, and environmental insurance when applicable.
  • Amends sections 14a and 16 to modify how tax capture is handled and to change the cap on total tax capture revenues (the introduced text indicates the cap is being modified, but the specific numeric change is not included in the excerpt provided).

Who is affected

  • Developers and property owners undertaking brownfield redevelopment (including transformational projects).
  • Local governmental units that create and administer brownfield authorities and adopt brownfield plans.
  • State entities: Department of Environment, Great Lakes, and Energy (EGLE) and the State Treasurer (for calculation/administration of construction-period tax capture).
  • Taxing jurisdictions and local units of government (school districts, counties, municipalities) that may experience delayed property tax revenues due to expanded tax capture.
  • Land bank fast track authorities (explicit inclusion in blight definition).

Procedural status / timeline

  • Introduced: March 13, 2025 (Rep. Alabas Farhat).
  • Read and referred: Read first time; referred to committees — Trade, Workforce & Economic Development; later referred to Committee on Economic Competitiveness (electronic reproduction dated 09/26/2025).
  • Current status: House introduced version (as of 09/26/2025); pending committee review and potential amendment.

Potential impacts / considerations

  • Incentivizes large-scale (“transformational”) brownfield projects by allowing capture of construction-related income tax revenues in addition to traditional property tax capture — could increase financing available for remediation and redevelopment.
  • May reduce near-term revenues for local taxing units while captures are in effect; specific fiscal impact depends on the cap change (not specified in provided excerpt) and the size/scale of projects.
  • Adds administrative responsibilities for owners/developers (wage reporting, possible independent audits) and for the State Treasurer (calculation methodology, reconciliation).
  • Clarifies eligibility for municipal/tax-reverted and land bank-held properties, potentially broadening the pool of projects that qualify.

Notes / next steps

  • The excerpt does not include the full amended text of sections 14a and 16 or the exact new numeric cap on total tax capture revenues. Review the full bill text (HB 5073) or legislative analyses for precise cap changes, fiscal notes, and committee amendments before drawing definitive fiscal conclusions.

Compiled from official sources — confirm details with the bill’s official record.

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