Michigan PA 198 & Special Acts Guide

A PA 198 certificate can be granted for any term up to 12 years, as determined by the local unit's resolution. Many local units approve the full 12 years for significant new construction and a shorter term for rehabilitation projects. When the certificate expires, the property is automatically placed back on the general ad valorem roll at its current assessed value — which is why it's critical to coordinate any Michigan assessment strategy around the expiration year.

Yes. A certificate does not waive your right to appeal the underlying taxable value or State Equalized Value. The IFT millage is applied to an assessor-determined base, so if that base is inflated, the abatement is being calculated off the wrong number. Land is almost always excluded from PA 198 and continues to be fully taxable on the general roll, which is why coordinating the certificate with an appeal — and with Michigan's uncapping rules after any ownership change — matters so much.

The Obsolete Properties Rehabilitation Act (PA 146 of 2000) targets blighted, functionally obsolete, or contaminated commercial and mixed-use buildings. Instead of cutting the millage in half like PA 198, OPRA freezes the taxable value at its pre-rehab level for up to 12 years, so the owner doesn't pay tax on the value added by the rehabilitation. PA 198 is industrial-only; OPRA is designed for commercial, multifamily, and mixed-use downtown redevelopment. Both require a local district and State Tax Commission approval.

Brownfield Tax Increment Financing captures the incremental property tax revenue generated after a contaminated, functionally obsolete, or blighted site is redeveloped. Those incremental dollars are redirected to reimburse eligible environmental cleanup, due care, and site preparation costs through an approved work plan. It's not a rate cut — it's a redirection of future tax dollars back to the project. A correctly set assessment still matters, because it determines how much increment is captured each year. You can request a free review to audit that calculation.

All Michigan special acts use a two-step approval process. The local unit (city, village, or township) first establishes the required district and then adopts a resolution approving the certificate after a public hearing. The application is then forwarded to the Michigan State Tax Commission, which has final approval authority. Because every local unit sets its own policies on term length and eligibility, the process can vary significantly across counties — see our Michigan overview for county-level context.