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2009 House Bill 4922: Lower eligibility for certain MEGA tax breaks

Public Act 123 of 2009

  1. Introduced by Rep. Ed Clemente (D) on May 12, 2009, to reduce another eligibility standard in selective tax breaks granted by the Michigan Economic Growth Authority (MEGA), this one requiring at least 25 percent of the total operating expenses of certain “high technology” businesses to be for research and development for the first three years of their tax break deals.
    • Referred to the House New Economy And Quality Of Life Committee on May 12, 2009.
      • Reported in the House on May 20, 2009, with the recommendation that the substitute (H-1) be adopted and that the bill then pass.
    • Substitute offered in the House on June 10, 2009, to replace the previous version of the bill with one that also increases the number of selective tax breaks that can be granted by the Michigan Economic Growth Authority (MEGA) each year. The substitute passed by voice vote in the House on June 10, 2009.
    • Amendment offered by Rep. Tom McMillin (R) on June 10, 2009, to establish that if it is discovered that a company lied on its MEGA tax break application it must not just pay back the tax breaks, but also pay a penalty equal to 50 percent of their value. The amendment passed by voice vote in the House on June 10, 2009.
    • Amendment offered by Rep. Tom McMillin (R) on June 10, 2009, to prohibit MEGA tax breaks for a firm likely to compete with any existing Michigan-based business (which is not the beneficiary of a special tax break). The amendment would require make granting MEGA tax breaks contingent on an analysis that shows this non-competition status. The amendment failed by voice vote in the House on June 10, 2009.
    • Amendment offered by Rep. Tom McMillin (R) on June 10, 2009, to require that a cost/benefit analysis required as a condition of awarding a MEGA tax break to a particular firm must be promptly made available to the public for inspection. The required cost/benefit analysis must "reveal that authorizing the . . . tax credits will result in an overall positive fiscal impact to the state". The amendment failed by voice vote in the House on June 10, 2009.
    • Amendment offered by Rep. Tom McMillin (R) on June 10, 2009, to tie-bar the bill to Senate Bill 71, meaning this bill cannot become law unless that one does also. SB 71 would require the Michigan Economic Growth Authority to file annual reports that disclose not just aggregate data on the tax break deals offered to particular firms it selects, but also disclose the amount of capital investment and jobs that each individual beneficiary firm must "create or retain” to earn a tax break reward, and the amount of jobs, investments and tax credits rewards actually generated by each current and past beneficiary. The amendment failed by voice vote in the House on June 10, 2009.
  2. Passed 92 to 15 in the House on June 10, 2009, to increase the number of selective tax breaks that can be granted by the Michigan Economic Growth Authority (MEGA) in 2009, cap the number in future years, and reduce the eligibility standards for certain tax breaks.
    Who Voted "Yes" and Who Voted "No"

  3. Received in the Senate on June 16, 2009.
    • Referred to the Senate Finance Committee on June 16, 2009.
    • Motion by Sen. Samuel B. Thomas, III (D) on August 27, 2009, to discharge the Finance Committee from further consideration of the bill, and bring it directly to the full Senate for a vote. The motion failed 16 to 19 in the Senate on August 27, 2009.
      Who Voted "Yes" and Who Voted "No"

    • Substitute offered by Sen. Nancy Cassis (R) on October 15, 2009, to replace the previous version of the bill with one that revises the proposed caps and eligibility standards. The substitute passed by voice vote in the Senate on October 15, 2009.
  4. Passed 32 to 3 in the Senate on October 15, 2009, to increase the number of selective tax breaks that can be granted by the Michigan Economic Growth Authority (MEGA) in 2009, cap the number in future years, and reduce the eligibility standards for certain tax breaks.
    Who Voted "Yes" and Who Voted "No"

  5. Received in the House on October 15, 2009.
    • Amendment offered by Rep. Tom McMillin (R) on October 21, 2009, to require members of the board of the Michigan Economic Growth Authority (which selects particular companies to be beneficiaries of targeted state tax breaks and subsidies) to disclose their own personal financial investment decisions made during the past five years. The amendment failed by voice vote in the House on October 21, 2009.
    • Amendment offered by Rep. Ed Clemente (D) on October 21, 2009, to strip out a provision making an exception to the MEGA tax break eligibility criteria inserted by the Senate to benefit the Federal Mogul company. The amendment passed by voice vote in the House on October 21, 2009.
    • Amendment offered by Rep. Ed Clemente (D) on October 21, 2009, to clarify that the cap on "yearly tax credits" applies to future tax breaks. The amendment passed by voice vote in the House on October 21, 2009.
  6. Passed 93 to 11 in the House on October 21, 2009, to increase the number of selective tax breaks that can be granted by the Michigan Economic Growth Authority (MEGA) in 2009 and cap the number in future years. The House removed a provision added by the Senate carving out a special break for the Federal Mogul company.
    Who Voted "Yes" and Who Voted "No"

  7. Received in the Senate on October 22, 2009.
  8. Passed 30 to 4 in the Senate on October 22, 2009, to concur with the House-passed version of the bill, which removed a special tax break eligibility exemption for the Federal Mogul company.
    Who Voted "Yes" and Who Voted "No"

  9. Signed by Gov. Jennifer Granholm on October 27, 2009.

Comments

Re: 2009 House Bill 4922 (Lower eligibility for certain MEGA tax breaks )  by Admin003 on October 21, 2009 

 




Re: 2009 House Bill 4922 (Lower eligibility for certain MEGA tax breaks )  by Admin003 on August 28, 2009 

 

Senator Cherry’s statement is as follows:


I rise this afternoon just to say quickly that while there may have been some agreement between MEGA and the Senator, there has been no agreement between any of us and the Senator that we attempted to break any deal. While I may understand her deal which she has made with somebody else, I resent the fact that I’m being told that I broke my word when my word was never apart of this. In fact, we never even got the bills until the Senate committee and didn’t get to know what was in them prior to that. It never was part of any kind of discussion or negotiation, so how could a deal be broken?


Let me just say that it is important to pass the House bill, too, if we want to make sure that certain projects get done quickly. There’s one right now in Wixom, I believe, that we could be acting on quickly if we pass House Bill No. 4922. We are not against transparency, but we believe, I think, that the bill should not be held up just to make sure that one house doesn’t get credit and the other house does.


That is why I believe it is important to pass House Bill No. 4922. We should have done it today. We should do it as quickly as we possibly can, and we should get this issue resolved very quickly.




Re: 2009 House Bill 4922 (Lower eligibility for certain MEGA tax breaks )  by Admin003 on August 28, 2009 

 

Senator Cassis’ statement is as follows:


Earlier in our session today, my good Democratic colleagues attempted to break a deal and discharge House Bill No. 4922 which sits in the Senate Finance Committee. Interestingly, this bill came over to the Senate as a House Democrat bill simply expanding MEGA credits without any accountability after the MEDC and MEGA blithely blew through all of their allotted statutory credits in seven months. This prompted a renewed outcry for the House to pass important MEDC/MEGA transparency and accounting bills which have been languishing, and still are languishing, in the House for more than six months. I want to say on the record I’m proud of these good government transparency measures.

So I have one important question for the good Senator representing Livonia, who supported the discharge today. Senator, where were you when Quicken Loans got almost $50 million in MEGA credits to locate in Livonia and then leave this fair city for Detroit and gain another $42 million in credits? Where was your voice then? Why didn’t you stand up for your hometown Livonia, losing jobs, losing important revenue? It took a Senator from across 8 Mile Road, a neighbor from Novi, to do so.


This is a precise reason to require transparency and accountability from the Michigan Economic Development Corporation. There couldn’t be a more glaring example. So I would say this: Please, let’s all work together. Political gamesmanship only undermines those who play it.





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