There is a two-step process for applying for a brownfield credit under MCL section 208.38g. First, a qualified taxpayer must apply for preapproval of a project. Approval of this application is discretionary. A preapproval letter must be issued by the state for a project before eligible investment begins. However, a preapproval letter will not be issued unless the brownfield plan designating the eligible property on which the project will occur has been adopted under the Brownfield Redevelopment Financing Act. If you have not yet had a brownfield plan approved by your local municipality, you may want to begin that process by contacting your local Brownfield Redevelopment Authority or municipality. When the project is completed, the designated representative identified in Part 5 of the preapproval application will submit the cost of the eligible investment of each qualified taxpayer entitled to a credit for the project. Upon verification of the completion of the project, the state will then issue a Certificate of Completion, and at that point the taxpayers may claim the SBT credit.

If the total cost of the eligible investment for the project is $10 million or less, a taxpayer must obtain a preapproval letter from the State Treasurer or his designee. The Brownfield Redevelopment Credit Project Preapproval Application, Form 3660, is available on the Treasury Web site at: www.michigan.gov/treasury or by calling 1-800-FORM-2-ME (1-800-367-6263).

If approved, the Department will issue a preapproval letter to the qualified taxpayer that states (1) the maximum total cost of eligible investment for the project on which the credit(s) may be claimed, and (2) the maximum total credits for the project when completed. Each project will also be issued a project number.

A taxpayer may also apply to the State Treasurer or his designee if the total cost of the eligible investment for the project is greater than $10 million but the taxpayer chooses to seek approval of credits totaling $1 million or less. The total credits for all projects approved by the State Treasurer or his designee may not exceed $30 million in one calendar year.

If the total cost of the eligible investment for the project is greater than $10 million, a taxpayer must apply to the Michigan Economic Growth Authority (MEGA) for preapproval (except as noted above). A Preapproval Application for a MEGA credit must be obtained from the Michigan Economic Development Corporation. Preapproval by MEGA must have the concurrence of the State Treasurer, who is a member of the MEGA board.

If a project is approved by MEGA, a preapproval letter will be issued to the qualified taxpayer that states (1) the maximum total cost of eligible investment for the project on which the credit(s) may be claimed, (2) the maximum total credits for the project when completed, and (3) the percentage of the cost of eligible investment for which the credit will be available. Each project will also be issued a project number.

MEGA may approve a maximum of 15 projects per calendar year, subject to the following limitations:

1. The total credits for 3 of those 15 projects may range from $10 - $30 million per project. Credits on these larger projects must be taken at 10% of the total credit per year over a 10-year period.
2. The credits for the remaining projects are capped at $10 million per project and must be taken in the year the Certificate of Completion for the project is issued. In general, the credits are available only in qualified local governmental units for property that is a facility or is blighted or functionally obsolete.
3. Three of the 15 projects with total credits over $1 million may also be awarded outside of a qualified local governmental unit if the property is a facility.

Of the 3 projects that qualify under (A), one may also qualify under (C).