July 17, 2006

LANSING - Governor Jennifer M. Granholm today asked the Legislature to support a series of reform measures that will strengthen corporate responsibility standards and prohibit use of state funds to support outsourcing, tax havens, and pension theft.

"We are blessed in Michigan with countless businesses striving to be good corporate citizens," said Granholm. "But those who are bad actors - who incorporate off-shore to avoid paying taxes or violate U.S. pension laws and international labor standards - should not be allowed to use our tax dollars to do it. This legislative package will ensure that Michigan tax dollars are used to create and protect jobs here at home."

The corporate responsibility and outsourcing prevention package:

- creates a new Michigan Corporate Responsibility Act to prohibit state support of companies that fail to meet certain standards;

- prohibits companies from receiving economic development benefits, including tax credits, abatements, loans and grants if the company or any of its officers have been convicted in the past 15 years of a criminal offense related to performance of a previous state contract or involving business integrity, including embezzlement, theft, forgery, bribery and others;

- prohibits companies from receiving economic development benefits including tax credits, abatements, loans and grants that are used to outsource jobs;

- prohibits companies from receiving economic development benefits, including tax credits, abatements, loans and grants if the business has incorporated in a tax haven country since September 11, 2001;

- prohibits companies from receiving economic development benefits, including tax credits, abatements, loans and grants if they fail to comply with international workers' rights standards or U.S. pension laws;

- requires the Department of Management and Budget (DMB) to consider all of the above standards in addition to cost and economic impact to the state when contracting for products and services.

"These basic standards of corporate responsibility are already in place for any company applying for funding through the 21st Century Jobs Fund," said Senator Gretchen Whitmer (D-East Lansing). "Applying the same standards to all companies seeking economic incentives and state contracts is a common sense way to ensure that we are safeguarding our tax dollars while creating jobs and stimulating economic development."

"If we're going to give tax breaks to corporations, it should be to those who provide good jobs, health care and, as good corporate citizens, partner with the state to stimulate economic growth," said State Representative Pam Byrnes (D-Lyndon Township). "Corporate accountability makes sense - it's sound fiscal policy."

In addition to Whitmer, other Senate sponsors include Mark Schauer (D-Battle Creek), Ray Basham (D-Romulus), Gilda Jacobs (D-Huntington Woods), Dennis Olshove (D-Warren), Martha G. Scott (D-Detroit), Irma Clark-Coleman (D-Detroit) and Mike Prusi (D-Ishpeming). Expected to join Byrnes as House sponsors are Representatives Marie Donigan (D-Royal Oak), Fred Miller (D-Mount Clemens), Lee Gonzales (D-Flint), Gabe Leland (D-Detroit), Gary McDowell (D-Rudyard), Morris Hood (D-Detroit), Virgil Smith, Jr. (D-Detroit), Paul Condino (D-Southfield), Kathleen Law (D-Gibraltar) and Alma Wheeler Smith (D-Ann Arbor).

Granholm said she expects implementation bills will be introduced when the Legislature returns next week.

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