Introduced
by
To cap the number of new Michigan Economic Growth Authority tax break deals at 250 per year, and limit to 150 the number of new tax credits claimed by recipients of past MEGA deals who had not previously met the job creation/retention targets of those deals, and so had not “earned” business tax credits. The bill would also increase from 400 to 480 the number of MEGA deals for 2009 only, impose a penalty on firms that misrepresent information in a MEGA application, and prohibit MEGA tax breaks that reward a firm for moving from one Michigan location to another.
Referred to the Committee on Finance
Reported without amendment
With the substitute labeled "S-4." Among other changes this would prohibit tax breaks from being offered to a firm that would be competing against other Michigan businesses, and prohibit the MEGA board or staff from advocating that a potential tax credit recipient choose one Michigan location over another. In addition, it would expand MEGA transparency provisions, requiring that it include the following about each tax break deal in an annual report to the legislature: The identity of each company granted a tax break deal and the number of tax credits it has actually been issued; the actual number of jobs created or retained, and capital investments promised and made, by tax break deal recipients in the past year and all previous years under their agreements; the total value of the tax credits earned (for meeting the promises in a deal) in each year; a copy of each tax credit certificates issued; and more. Before submission the report would have to be audited by the Auditor General.
Substitute offered
To adopt a substitute that includes the transparency provisions in the version recommended by the committee, but not the prohibition on offering tax breaks to a firm competing against existing Michigan businesses that do not get the same preferential treatment. Instead, this would just have to be disclosed, and the competed-against firms identified. This version was further amended to also reduce the previously-agreed job retention criteria that qualify the Federal Mogul corporation for MEGA tax breaks.
The substitute passed by voice vote
Amendment offered
by
To strip out a provision lowering the previously-agreed research and development criteria that qualify certain "high-technology businesses" to claim tax credits.
The amendment failed 16 to 20 (details)
Amendment offered
by
To strip out the provision prohibiting MEGA from advocating for political reasons that a potential tax credit recipient choose one Michigan location over another; and replace the provision requiring disclosure if a proposed MEGA tax break recipient will be competing against existing Michigan businesses that do not get the same preferential treatment with one requiring it to state the "project’s effects on other Michigan businesses within the same industry".
The amendment failed 16 to 20 (details)
Amendment offered
by
To revise the formula used to calculate the quantity of tax credits claimed newly claimed under past MEGA deals in a manner that expands the bill's proposed caps. Also, to strip out the provisions requiring MEGA to include a copy of each tax credit certificates issued in its annual report, and to disclose the identity of each company granted a tax break deal and the number of tax credits it has actually been issued.
The amendment failed 16 to 20 (details)
Amendment offered
by
To require businesses awarded MEGA tax breaks to follow the state “prevailing wage” law, which requires a firm to pay wages based on union pay scales in a particular part of a geographic region. These wage rates may be above the market rate in other parts of the region.
The amendment failed 17 to 19 (details)
Passed in the Senate 23 to 13 (details)
To cap the number of new Michigan Economic Growth Authority tax break deals at 300 per year, and limit to 85 the number of new tax credits claimed by recipients of past MEGA deals who had not previously met the job creation/retention targets of those deals, and so had not “earned” business tax credits. For 2009, the caps would be 400 and 85, respectively. The bill would also add increased transparency requirements to MEGA, including a requirement that its annual report provide data on individual company tax break deals, not just aggregate data; prohibit MEGA from advocating for political reasons that a potential tax break recipient choose one Michigan location over another; and require disclosure if a proposed tax break recipient will be competing against existing Michigan businesses that do not get the same preferential treatment.
Referred to the Committee on New Economy and Quality of Life
