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The law applies not only to companies engaged in the manufacturing or research and development of alternative energy technologies, but also to end-users.

Michigan

• Alternative Energy Personal Property Tax Exemption
• Michigan Biomass Energy Program
• Renewable Energy Renaissance Zone

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Alternative Energy Personal Property Tax Exemption

The Michigan Next Energy Authority was created in 2002 as a part of a comprehensive economic development plan to position Michigan as a leader in the research, development, commercialization, and manufacture of alternative energy technologies. The Authority seeks to address the risks of continued dependence on foreign energy resources, mitigate increasing environmental concerns, and prepare for the possible replacement of the internal combustion engine through a combination of tax credits and exemptions.

“Alternative energy personal property” certified by the Next Energy Authority and located within a specified “Next Energy Zone” is exempt from the collection of personal property taxes. For purposes of the law, alternative energy technologies include solar, wind, renewable fuels (including landfill gas), fuel cells, Stirling engines, and microturbines. The exemption applies to:

• Alternative energy systems
• Alternative energy vehicles
• The personal property of an alternative energy technology business
• The personal property of a business not engaged in alternative-energy technology that is used solely for the purpose of researching, developing, or manufacturing alternative-energy technologies

The law applies not only to companies engaged in the manufacturing or research and development of alternative energy technologies, but also to end-users. Property must be new to Michigan (i.e., not previously taxed or exempted from taxation), and does not include real property, such as land and buildings. Local school districts and other tax collecting entities may adopt resolutions disallowing the exemption of the property from certain taxes within 60 days of the time a company or end-user receives notification of certification of alternative energy personal property.

Michigan Biomass Energy Program

The Michigan Biomass Energy Program (MBEP) encourages increased production and use of biomass energy through information dissemination and financial assistance. MBEP receives the majority of its funding from the Great Lakes Regional Biomass Energy Program (GLRBEP), which is one of five regions in the U.S. Department of Energy’s Regional Biomass Energy Program.

MBEP offers project funding, when available, to increase public awareness, assist in the development of production capacity, and expand markets for energy/fuel, including landfill gas, derived from Michigan biomass resources. This program defines biomass as any organic matter that is available on a renewable basis through natural processes or as a by-product of human activity, such as agricultural crops and crop residues, wood and wood waste, and municipal solid waste. Funding is typically available for projects in the following categories: biofuels/bioenergy education, biofuel infrastructure, and biomass technology development/demonstrations. All projects must be based in Michigan.

Biofuels/bioenergy education activities highlight the availability and benefits of bio-based fuels and lubricants or biomass energy. Biofuels infrastructure projects increase the number of public refueling facilities. Biomass technology development/demonstrations projects increase biofuels/bioenergy production, production efficiency, and/or markets. An example of a biomass technology development/demonstrations project would be a project that addresses the management and conversion of municipal solid waste to energy at a host site or in cooperation with potential users of the technology.

Public and nonprofit organizations are eligible for funding. Maximum funding for projects is usually $30,000. Matching funds cannot be from a federal funding source and must be applied to costs directly related to the project.

Renewable Energy Renaissance Zone

In July 2006, Michigan amended its Renaissance Zone Act under Public Act No. 273, which authorizes the designation of up to 10 tax-exempt zones for renewable energy facilities. The purpose is to encourage commercial and industrial development in economically distressed areas of the state. The law establishes geographic zones that are virtually tax-free for renewable energy facilities during the start-up stage, with tax abatement phased out at 25 percent increments during the Zone's final years of existence. The first Renewable Energy Renaissance Zone has been established as a 25-acre site in the city of Adrian.

The Michigan Economic Development Corporation administers the state’s renaissance zone program. The Michigan Economic Development Corporation is a partnership between state and local communities, and promotes smart economic growth by developing strategies and providing services to create and retain good jobs and a high quality of life.

Michigan reports that it has been successful with renaissance zones for other industries, such as agriculture and the tool and die industry. The Michigan Economic Development Corporation estimated these zones have stimulated almost $2 billion in private investment between 1996 and 2002.