April 28, 2008
April 28, 2008
Changes provide flexibility in going after new companies
LANSING - Governor Jennifer M. Granholm has signed into law a package of bills reforming the state's major business incentive to allow more flexibility in meeting interstate and international competition for business investment. The bills that strengthen the Michigan Economic Growth Authority (MEGA) Act were passed with overwhelming bipartisan support and are part of an overall job creation and economic stimulus package proposed by the governor in her State of the State address earlier this year.
"We are recharging our most powerful business incentive program as part of the most aggressive strategy of any state to build a diversified and global 21st century economy," Granholm said. "These changes are powerful new tools that will provide us with more flexibility to help companies grow and create new jobs in Michigan."
Under the reforms, a company that is retaining or creating a minimum of 50 jobs can qualify for a MEGA Michigan Business Tax credit. For the first time, tourism attraction projects including cultural, historical, or scenic sites can qualify for MEGA business tax credits. The reforms also pave the way for small, high-tech businesses in "creative class" industries like architectural design to qualify for the incentives as well. The new law removes a requirement that a company prove it had received competing, lower-cost offers from other states or countries to be eligible for the incentives.
The MEGA, as created in 1995 by the state Legislature, had strong statutory requirements for new business locations or major expansion of existing locations to qualify for credits. Companies were required to prove a cost disadvantage or a business case that locating in Michigan would be detrimental to the core activities of the company.
Individuals or groups that win procurement contracts with the U.S. Departments of Defense, Energy, or Homeland Security can receive MEGA tax credits based on creation of at least 25 qualified new jobs.
"This is a great new tool allowing us to reinvigorate the state's economy by bringing not just new companies but whole new industries to Michigan," Michigan Economic Development Corporation President and CEO James C. Epolito said. "It will strengthen Michigan in the competition for job creation and investment."
The four-bill package comprises Senate Bill 1187 (PA 108) sponsored by Senator Tony Stamas (R-Midland), SB 1188 (PA 109) sponsored by Senator Jud Gilbert (R-Algonac), SB 1189 (PA 110) sponsored by Senator Hansen Clarke (D-Detroit), and SB1190 (PA 111) sponsored by Senator Tupac Hunter (D-Detroit).
The bills were given immediate effect.
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