Michigan Policy Network - Renewable energy renaissance zones to increase from 10 to 15

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Renewable energy renaissance zones to increase from 10 to 15

Saturday, 06 December 2008 04:33

HB 5746 was introduced by Rep. Frank Accavitti in February 2008. The bill was signed into law by Governor Granholm on December 18, 2008 and assigned as PA 229'08.

A recently passed bill will increase the maximum number of renewable energy renaissance zones from 10 to 15 and require that at least five of these zones be selected for the production of cellulosic biofuels.

Cellulosic biofuels refers to plant materials such as corn stover, switchgrass, and other plant material from which ethanol can be produced as an alternative to ethanol derived from corn.

Renaissance zones are specially designated geographic areas that are designed to spur economic investments and development by providing a substantial set of tax exemptions for the businesses and individuals that are located there. For property this means an exemption from local property taxes and the state education tax, for businesses and individuals it means exemptions from the single business tax and individual income taxes.

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In order to be designated a renewable energy renaissance zone the area must contain a renewable energy facility. The definition of what constitutes a renewable energy facility is constantly evolving, but currently it stands as a facility that creates energy or fuel from the wind, the sun, biomass, algae, landfill gasses, animal wastes, agricultural commodities, wood or forest processes, food production and processing, or the paper products industry. It can also mean a facility that focuses on research, development, or the manufacture of components used to create renewable energy.

The procedural process of becoming a renaissance zone requires that an area first receive a recommendation from the Michigan Strategic Fund Board (and the Michigan Agriculture Commission if agricultural crops will be involved) and then be approved by the Michigan State Administrative Board. A zone designation lasts for 15 years.

Such factors as the amount of jobs a zone would create and the overall economic impact it would have on its community are supposed to be taken into consideration during the designation process.

The bill passed the House by a margin of 107-1 (Rep. John Garfield cast the lone vote in opposition) and the Senate 36-0.

Read the bill in its entirety: HB 5746

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