House Panel Explores Environmental Impact of Tax Code

The Michigan House of Representative's Environmental Tax Subcommittee (Subcommittee) recently issued an Interim Draft Report (Report) discussing the Subcommittee's efforts to make the Michigan Tax Code more environmentally sensitive. The Subcommittee, which is a subcommittee of the Committee on Tax Policy, was formed and chaired by Representative Kirk Profit, and its other members include Representatives John Freeman, Michael Hanley, Paul Wojno, Robert Brackenridge and Nancy Cassis. The purpose of the Subcommittee is to explore ways to influence and encourage environmental stewardship through the Michigan Tax Code. The Subcommittee plans to hold future hearings to explore ways to reduce negative tax consequences associated with certain pollution control efforts.
The Subcommittee, which has held four public hearings, identified in the Report the following proposals for making the Tax Code more environmentally sensitive:
Pollution Prevention: A proposed initiative to eliminate the negative tax consequences of businesses that reduce pollution with known health hazards.
Urban Sprawl: A proposal that would give local government units the ability to calculate the costs associated with new housing development projects, including the infrastructure, utilities and school enhancements that the projects will need. In addition, under this proposal, if the developer commits to paying these costs at the time of the development, the negative tax implications of these costs would be eliminated.
Recycling:A proposed initiative to eliminate the tax burdens on businesses for the use and purchase of equipment utilized in a recycling process. Alternative Fuel Vehicles: A proposal to eliminate the tax burdens on purchasers who choose alternative fuel vehicles over traditional gas powered automobiles.
In addition, the Report lists several legislative proposals, including, among other things, the following:
Provide a Single Business Tax deduction for becoming an "energy efficient business" as certified by the Michigan Department of Environmental Quality and/or the U.S. Environmental Protection Agency.
Provide a Single Business Tax deduction of 50 percent of the cleanup costs (with a $500,000 cap) incurred by a non-liable property owner who cleans up a brownfield site to residential standards under Part 201 of the Michigan Natural Resources and Environmental Protection Act.
Revise the Michigan Property Tax Act to require local property tax assessors to assess farmland and other open spaces at their current use value, not market value as prescribed under the current law.
Increase the fee charge on all hazardous waste landfills in the State of Michigan to $15 per ton and use the projected $1.25 million that would be generated from these fees to fund tax deductions for pollution reduction.
Provide a Single Business Tax deduction for businesses that purchase equipment to process recyclables.
Eliminate negative tax consequences associated with purchasing new alternative fuel vehicles (i.e., electric cars) and with the use of alternative energy sources (i.e., methane gas and solar energy).
Create incentives for tree planting and forest management initiatives.
Provide tax relief to businesses for energy conservation efforts.
Reduce property taxes on wetland areas.
A workgroup of the Subcommittee will be created and interested stakeholders will be invited to examine these proposals and other policy considerations brought to the Subcommittee's attention. Also, the Subcommittee plans to continue to meet and address specific policy goals aimed at making the Tax Code more environmentally sensitive.

This article was prepared by Daniella D. Landers, an associate in our Environmental Department, and previously appeared in the June, 1998 edition of the Michigan Environmental Compliance Update, a monthly newsletter prepared by the Environmental Department and published by M. Lee Smith Publishers.