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Rep. Reilly authors bipartisan legislation for economic development accountability and transparency in Michigan
RELEASE|February 4, 2020

Representative John Reilly (R-Oakland Township) today introduced legislation as part of a bipartisan plan to inform the people of Michigan about what special economic incentives are offered, which companies receive them, how much they have received, and whether or not those incentives were successful.

Each bill has bipartisan co-sponsorship in both the House and Senate.

Rep. Reilly’s bill would make tax credits under the Michigan Economic Growth Authority subject to disclosure through the Freedom of Information Act. Under current law, the state does not report the dollar amounts companies have received, transferring a large amount of taxpayer money to these companies without normal transparency requirements.

Michigan policies related to transparency involving these tax credits were significantly weakened in 2009.

“This is a basic transparency measure for Michigan taxpayers who deserve to know where their money is going,” Rep. Reilly said of his legislation. “If the state is giving companies special tax treatment that essentially amounts to taxpayer subsidies, the taxpayers who paid for these agreements should not be blocked from seeing where their own money is going.”

Other provisions in the bipartisan package also improve transparency for Michigan taxpayers.

The Michigan Strategic Fund would be required to post draft contract agreements plus any briefing memoranda and term sheets on its website 10 business days before it can approve a grant, award, tax credit, loan, or other assistance.

The Michigan Economic Development Corporation would be required to post a notice on its website when a recipient of funds fails to meet the terms of a written agreement or requests to amend an agreement. In cases where an economic development agreement has to be amended in a way that reduces a recipient’s job-creation obligation, the amount of the incentive would be lowered by a proportionate amount. Money returned because of failed agreements would revert to the state general fund rather going back to the Michigan Strategic Fund.

The legislation is House Bill 5460.

 

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