The legislation, Senate Bills 242-244 and coined the “Good Jobs for Michigan” package, would create a capped fund to attract larger, job-creating projects to Michigan and allow program eligible companies to capture a percentage of the income tax revenue from the jobs they create over a period of 5-10 years.

“Access to workforce . . . customers . . . suppliers . . . efficient transportation . . . All are important factors in siting decisions but, when everything else is roughly equal, incentives matter greatly,” said Sandy Ring, vice-chair of the MMA Board of Directors, during his testimony before the House Tax Policy Committee. “For better or worse, [economic incentives are], with increasing frequency, an expectation and the Good Jobs for Michigan package is an important step toward keeping Michigan competitive.”

The “Good Jobs” package abruptly stalled once it moved to the full House on 6/20/17. The bump in the road may stem from current efforts to reform teacher retirement options in the Michigan Public School Employees Retirement System (MPSERS).

The House Tax Policy Committee adopted numerous amendments to the “Good Jobs” legislation to gather sufficient support, including:

• Jobs Threshold Amendment
  • Creates a new 3,000 jobs threshold where eligible business would be able to keep up to 100% of the tax capture revenues for up to 10 years.
• Primary Supplier Amendments
  • Allows eligible businesses on projects creating 3,000 or more new jobs to receive additional incentives for jobs created by one of its primary suppliers, through written agreement.
  • Defines “primary supplier” as a business providing: 1) a minimum of $5 million in tangible personal property; 2) a minimum of 10% of the tangible personal property used by the authorized business annually; 3) 25 new, full time jobs.
• Dollar Cap on the Total Agreements
  • Lowers the $250 million cap to $200 million and clarifies the $200 million cap as a total cap rather than an annual cap.
• Mergers and Acquisition Amendment
  • Clarifies that eligible businesses must create new jobs in order to qualify for the incentive. Job additions due to merger or acquisition will not qualify.
• Sunset
  • Sets the legislation sunset as 12/31/19.
• Effective Date
  • Changes the effective date from 180 to 30 days.
• Local Approval
  • Requires local government approval for any eligible business entity.
• Additional Considerations when approving an agreement
  • Requires two new factors be considered when approving agreements: 1) that a good faith effort is made to employ Michigan residents and 2) that job-training programs are provided for new hires.

“Incentives are an important part of maintaining Michigan’s competitiveness with other states,” said Mike Johnston, MMA vice president of government affairs. “Michigan and Alaska remain the only states with a corporate income tax and no economic incentives to attract new businesses. MMA remains optimistic that the House will support this legislation as it clearly positions Michigan to be a national jobs and investment leader.”

Contact Mike Johnston

Vice President of Government Affairs
Call 517-487-8554
E-mail johnston@mimfg.org