An economic development and business relief bill package, supported by the Chamber, swiftly made its way through the Legislature and is headed to the Governor’s desk. The House and Senate passed identical versions of the almost $1.5 billion package in order to expedite the process, with the final versions of the bills being passed late Wednesday night. Below is a breakdown of the package.
$1 Billion for Economic Development Incentives:
HB 5603 (Calley), SB 769 (LaSata) and SB 771 (Victory) set up several new funds within the Department of Labor and Economic Opportunity (LEO) under the Strategic Outreach and Attraction Reserve (SOAR) fund. These newly created funds can be used to attract new business investments to the state. These changes aim to make Michigan more competitive and agile when working to attract economic development opportunities.
In order to fund these new programs, the legislature also passed SB 85 (Horn) which appropriates $1 billion into the newly created SOAR fund to be used for the economic development incentives.
$409 Million for Afflicted Business Relief Program:
SB 85 (Horn) includes much needed funding relief for existing businesses adversely affected by the COVID-19 pandemic. The bill provides $409 million in grants to support businesses in the newly created Afflicted Business Relief Program within the Michigan Department of Treasury.
The newly created fund focuses on businesses specifically impacted by the pandemic shut-down orders – Restaurants, hotels, entertainment venues, gyms, recreational facilities, cosmetologists, and other entertainment type businesses. Grants cannot exceed $5 million and must not exceed the business’s financial hardship. The legislation describes a financial hardship as a decline in total sales capped at the sum of property taxes or 17% of lease costs, plus 50% of unemployment insurance taxes, plus liquor license fees, plus food inspection fees, plus State license or inspection fees.
$75 Million for Personal Property Tax Exemption Increase:
HB 5351 (Johnson) increases the Personal Property Tax (PPT) Exemption value from $60,000 to $160,000. This is vital relief for small businesses that were adversely impacted from the pandemic and is in addition to the Afflicted Business Program. SB 85 (Horn) also provides $75 million in funding to backfill revenue losses and will be available to local units of government negatively impacted by increasing the PPT exemption.
The overall bill package is great news for our business community and is expected to be signed into law by the end of the month. Thus, capping off a big win for our businesses in a year of slightly lower-than-usual legislative victories.
Questions? Contact Nate Henschel, Director of Government Affairs at nate@grandrapids.org.
