ANNOUNCEMENT 28 Dec 2018
The reform may lead to the extension of incentives to some projects with out-of-state employees.
NUMBER OF INTERVENTIONS
On December 28, 2018 the governor of Michigan signed into law a bill (Senate Bill 40) that relaxes existing requirements for incentives that generally require that newly created jobs be located in Michigan. In place of counting only the Michigan residents, businesses would be required to certify that at least 75% of the employees of that business are residents of Michigan.
At issue is the Michigan Strategic Fund, a program created in 1984 that provides grants, loans, and other economic assistance to qualified businesses that make qualified investments or provide qualified new jobs in Michigan. Prior to enactment of this law, the term “qualified new job” meant a job performed by an individual who is a resident of Michigan. State officials observed that the requirement that a qualified new job must be held by a Michigan resident can be a significant factor for businesses seeking to locate or expand, especially in counties that border other states, and businesses might choose not to locate or expand in Michigan because they do not have, or fear they will not be able to fulfill, the number of qualified new jobs required to receive support.
The legislative history of the bill suggests that the principal concern leading to its enactment related to cases in which the non-Michigan residents would be residents of other U.S. states. The enactment of this reform may nonetheless allow for the extension of these incentives to firms that provide employment in neighboring Canada or other countries.