Housing Policy & Development

Housing legislation during Q3 addressed development regulations, financing, affordability and redevelopment incentives.

Key developments include:

• The Housing Readiness Package (HB 5529–5532 and HB 5581–5585) proposes changes to local zoning and development review requirements.

• The proposed MI HOME Program (HB 5660–5661) outlines $800 million in housing investments over five years.

• Proposed housing tax credits include $42 million annually for affordable housing development and preservation, with a designated allocation for rural communities.

• SB 278 would expand Housing and Community Development Fund eligibility to households earning up to 120% of area median income. The bill passed the Senate in June.

Energy Policy

Energy legislation continued to address electricity costs, generation requirements and infrastructure development, including several proposals affecting the Upper Peninsula.

Key developments include:

• HB 4007 and HB 4283 would allow qualifying RICE natural gas generators to count toward Michigan’s clean energy standards.

• HB 5710–5711 proposes repealing portions of Michigan’s recent clean energy legislation.

• HB 4027–4028 would return siting authority for certain large-scale renewable energy projects to local governments.

• The proposed Data Center Energy Standards Act (HB 6264–6265) would establish clean energy requirements and annual electricity and water consumption reporting for data centers.

Additional information on Upper Peninsula energy legislation is available at UPEnergy906.com.

Property Tax Policy

Property tax legislation during Q3 included proposals affecting residential property transfers, state taxes and local government revenue.

• HB 5872–5879 proposes eliminating certain property tax increases following property transfers, the State Education Tax and the state real estate transfer tax. The package passed the House in June.

• HB 5880 proposes a 6% excise tax on specified services to replace some of the revenue affected by the property tax reform package.

The proposals remain under consideration and would change existing state and local revenue arrangements if enacted.

Commercial Rehabilitation Act Renewal

The Commercial Rehabilitation Act provides property tax abatements for qualifying redevelopment projects in designated commercial districts.
SB 721–722 extended the program through 2035. Downtown Negaunee has a designated Commercial Rehabilitation District.

Healthcare Policy

Healthcare legislation during Q3 addressed professional licensing, insurance coverage, hospital oversight and workforce availability.

Key developments include:

• Michigan enacted legislation concerning interstate licensing compacts for physical therapists, occupational therapists and physician assistants.

• Legislation to maintain Michigan’s participation in the Interstate Medical Licensure Compact and remove its sunset provision remained under consideration.

• HB 6116–6119 proposes establishing a hospital cost review board, regulating certain hospital mergers and restricting specified physician noncompete agreements.

• SB 1011 would allow qualifying associations to establish state-regulated health insurance arrangements for small businesses and self-employed individuals. The bill passed the Senate in June.

State Budget (FY 2026)

The July CEO update reported a $75.2 billion FY2027 state budget agreement, including several proposed allocations relevant to economic development:

• $50 million for the Michigan Housing and Community Development Fund.

• $30 million for small business support.

• $28.55 million for community revitalization and business growth, compared with $59.4 million in FY2026.

• $4 million for the Rural Development Fund Grant Program, compared with $1.4 million in FY2026.

• $14.5 million in one-time funding for the Going Pro Talent Fund.

• $3.4 million for the Tri-Share Child Care Program.

Budget discussions are ongoing. Revenue projections indicating a potential shortfall are also influencing these conversations.

Additional Issues We’re Monitoring

In addition to the priorities above, LSCP is tracking a range of other policy discussions that may impact our region:

• Economic development: Proposed job creation tax credits, statewide economic development planning and changes to state economic development agencies.

• Short-term rentals: Legislation proposing a 3% local tax on qualifying short-term accommodations.

• Childcare: Proposed regulatory changes to establish childcare microcenters in qualifying existing facilities.

• Data centers: Proposed infrastructure development and energy requirements.

• Workforce development: Legislation addressing apprenticeships, independent contractor classifications and public-sector employment.