Mass Timber Financing to Spur Jobs

Summary#

Senate Bill 1191 would amend the Michigan Strategic Fund Act and add a new chapter. It would create state loan and technical-assistance programs for mass timber, a revolving loan fund, and an advisory board; the stated goal is to support mass timber use and related economic activity in Michigan. The bill is introduced and is not law.

  • The Michigan Strategic Fund, with the Michigan Economic Development Corporation (MEDC) and its staff, would run the programs. The Fund must create a loan application, approval, and compliance process.
  • Eligible applicants include developers or project owners, nonprofit housing organizations, tribal governments, colleges and universities, municipalities, construction firms, and companies that make or seek to make mass timber.
  • Loans would support early project work, construction gap financing, and manufacturing or supply-chain activity. For construction projects, loans could not exceed the lesser of 15% of hard construction costs or $15 million; the bill sets no dollar cap for manufacturing and supply-chain loans.
  • The bill would create a state-treasury revolving loan fund. Money could be spent from it only if appropriated, for program administration, loans, or technical assistance.
  • The Fund must consider and document stated project criteria, including Michigan sourcing and industry development. It may give preference to projects involving affordable housing, downtown or brownfield sites, or rural development.
  • A new advisory board within the Fund would advise on the programs. It would not be a separate independent agency.

What it means for you#

  • Potential applicants: You could apply for a loan if you fit an eligible category. Construction-project loans would carry interest within the bill’s stated range and run for 3 to 15 years; at your request, the Fund must provide a repayment grace period of up to 24 months. The Fund must publish loan recipients, purposes, and amounts at least every three months.
  • Potential applicants seeking technical help: The Fund would create a program for eligible applicants unfamiliar with mass timber. Assistance may include feasibility assessments, design guidance, supply-chain connections, carbon-accounting tools, and construction training.
  • Applicants with state assistance repayment obligations: The Fund board could not disburse a loan to an applicant that has not repaid money subject to a clawback or repayment provision, or that is in default on state grants, loans, or other economic assistance.
  • Taxpayers and the public: The bill does not directly change taxes or create a grant benefit. It requires annual reporting on program activity, including loans, capital deployed, private investment leveraged, assistance requests, and jobs created.
  • Advisory-board members: They would not receive compensation, but could be reimbursed for actual and necessary expenses.

Money#

No cost estimate is available in the supplied material.

  • The programs may use money transferred from the revolving loan fund or money appropriated for the programs. Spending from the revolving fund requires an appropriation.
  • Loan repayments, interest, and penalties would return to the revolving fund, whose unspent year-end balance would remain there.
  • The Fund would have to administer the programs and provide staff through its officers, employees, and agents, including the MEDC. The bill gives no staffing or administration cost estimate.
  • Advisory-board members could be reimbursed for actual and necessary expenses.

What is unclear#

  • The bill does not specify how much money, if any, would initially be appropriated or transferred to the revolving fund.
  • It requires the Fund to create application and compliance rules but does not set application deadlines, decision timelines, appeal rights, or detailed scoring rules.
  • The bill sets no loan cap for manufacturing and supply-chain loans, and does not state how much technical assistance an applicant may receive.
  • The bill does not set a start date. It requires the governor to appoint the first advisory-board members within 90 days after the act takes effect.
  • The supplied material does not include the full current Act, so I could not verify how these programs would interact with existing state programs or rules.

Case for#

  • The bill identifies higher upfront costs, lender unfamiliarity, and limited regional production as barriers to mass timber projects.
  • Loans for early planning, construction, and manufacturing could address different financing needs rather than focusing only on completed projects.
  • The revolving-fund design would return loan payments and interest to the fund for possible future use, subject to appropriation.
  • The Fund must consider whether projects support Michigan sourcing and industry capacity, while it may favor affordable housing, downtown or brownfield sites, and rural development.

Case against#

  • The bill does not set an overall funding amount or a cap for manufacturing and supply-chain loans, making the potential public commitment unclear.
  • Many key decisions would be left to the Fund’s later rules and loan agreements; the bill does not establish detailed award standards or appeal rights.
  • Although the bill requires the Fund to consider and document several criteria, it does not require a project to meet a stated minimum level of carbon reduction or Michigan sourcing.
  • It is unclear how much staff time, technical assistance, and board expense the programs would require, or how they would fit with existing programs.