michigan capitol dome.jpg

The House of Representatives passed a "transformational" brownfield plan on Thursday.

(MLive file photo)

LANSING, MI -- The House of Representatives on Thursday passed bills to let big developers capture taxes over objections from mostly Republican lawmakers.

Senate Bills 111-115 would grant special tax-capturing ability to large-scale "transformational" brownfield projects that win approval from local authorities, the Michigan Strategic Fund and the state treasurer. The Senate approved the package in February.

The bills were originally introduced last session with backing from Detroit Businessman Dan Gilbert. The House approved them on wide margins Thursday.

Rep. Jim Tedder, R-Clarkston, shepherded the bills through his House Tax Policy Committee. He said he'd been looking at brownfields a while to help blighted sites in his community, particularly in Waterford Township.

"This is the first piece of legislation that actually gives us a glimpse of hope," he said.

During the construction phase, an approved project could capture sales and use taxes. Afterward, the project would capture income and withholding taxes. The total tax capture the state authorizes cannot exceed $1 billion over the life of the bill.

To win approval, the project would have to demonstrate that it was a net fiscal gain for the state. In other words, that it would produce more tax revenue than it captured. The legislation anticipates five such projects per year in different cities across Michigan, and specifies a certain level of investment from each project based on the size of the community it's located in.

The House made the legislation good for five years so they could revisit it then, and set a guideline for 35 percent of projects to take place in communities with populations under 100,000.

A number of Republicans spoke against the legislation, including Rep. Martin Howrylak, R-Troy. He questioned what the bills did for regular Michiganders who may help their communities in other ways but aren't big developers.

"Why should they be rewarded by taking their taxpayer dollars and handing it to a private entity for an uneconomic project?" Howrylak said.

Rep. John Reilly, R-Oakland, said it was the same thing the legislature had done time and time again with incentives.

"It's a government redistribution of wealth, plain and simple," he said.

House Speaker Tom Leonard, R-DeWitt, said the bills leveraged private dollars to use old brownfield sites. He supported the legislation.

"We have hundreds of brownfield sites around the state, I have visited some of them myself. We've got to get them cleaned up, and I believe that this package of bills is the most conservative way to do that," Leonard said.

Democrats including Rep. Leslie Love, D-Detroit, and Rep. Andy Schor, D-Lansing, spoke in support of the bill.

"This is about taking those abandoned buildings and sites that have been empty for decades and replacing them with developments," Love said.

Most Democrats voted for the legislation, but it didn't earn a vote from Rep. Yousef Rabhi, D-Ann Arbor. He said he'd served on a brownfield board and supported them, but that's not what the bills did.

"This is not a brownfield. This is completely different. This is corporate welfare," Rabhi said.

A core group of 22 voted against all the bills in the package: Reps. Sue Allor, R-Wolverine; Tom Barrett, R-Potterville; Stephanie Chang, D-Detroit; Triston Cole, R-Mancelona; Gary Glenn, R-Midland; Shane Hernandez, R-Port Huron; Michele Hoitenga, R-Manton; Pamela Hornberger, R-Chesterfield Twp.; Gary Howell, R-North Branch; Howrylak; Steve Johnson, R-Wayland; Tim Kelly, R-Saginaw; James Lower, R-Cedar Lake; Mike McCready, R-Bloomfield Hills; Aaron Miller, R-Sturgis; Jeff Noble, R-Plymouth; Rabhi; Reilly; Rose Mary Robinson, D-Detroit; Jim Runestad, R-White Lake; Rep. Lana Theis, R-Brighton; and Rep. Jason Wentworth, R-Clare.

In voting against two of the bills, senate bills 113 and 114, they were joined by Rep. Kristy Pagan, D-Canton and Rep. Jon Hoadley, D-Kalamazoo.

The bills head back to the Senate, which would have to approve the House's changes before sending them to the governor. If that happens, and the governor signs the bills, they would become law.