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State Tax Credits News Briefs - February 2012

Michigan Gov. Rick Snyder enacted legislation in December to create incentive programs that will provide $100 million for competitive projects throughout the state. The programs, called Michigan Business Development and Michigan Community Revitalization, are designed to replace the state's Michigan Economic Growth Authority (MEGA), brownfield and historic tax credit (HTC) programs. Those programs were features of the Michigan Business Tax and were eliminated under business tax restructuring legislation approved and signed into law last May. Senate Bill 556 creates the Michigan Business Development program, which through the Michigan Strategic Fund (MSF) will provide as much as $10 million in grants or loans to a qualified business that creates jobs or invests in Michigan, effectively replacing the MEGA tax credit program. The Community Revitalization Program, created by Senate Bills 566-568 and 644, will provide as much as $10 million in grants or loans to projects that will revitalize regional urban areas, act as a catalyst for additional investment in the community, reuse vacant or historic buildings, or promote mixed-use and sustainable development. It will also be administered through MSF and replaces the brownfield and HTC programs. More information on the new programs is available at Michigan Business.

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In its final incentive awards before being replaced by the state's new business development and community revitalization programs, the Michigan Economic Growth Authority (MEGA) in December approved tax incentives for a dozen projects that are expected to generate $1.2 billion in new investment and as many as 7,601 direct jobs. Companies or projects selected to receive state brownfield credits and other tax incentives include 205 South Division Avenue in Grand Rapids; Capitol Park Development Initiative, Detroit Manufacturing Systems, Detroit Renewable and Gateway Marketplace Project, all in Detroit; Ford Motor Company and Townsend Energy Solutions in Wixom; MJC Templin Medical/Professional Office Redevelopment Project in Wyandotte; Stadium District Project in Midland; Suniva Inc. in Thomas; Uptown at Rivers Edge in Bay City; and Y Site Project in Lansing.

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The Oregon Department of Energy (ODOE) filed new temporary rules to streamline the energy tax credit process for small conservation projects. This rulemaking, which includes conservation rules and compliance and pass-through rules, implements changes to the business energy tax credit program that were caused by House Bill 3672. The agency said it will adopt permanent rules later this year. Download the temporary rules from the Oregon Department of Energy.

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New Jersey Gov. Chris Christie signed Senate Bill 3033 in January to create the GrowNJ Assistance program, which will provide $200 million in job creation and retention incentives. Under the program, companies relocating to or expanding in New Jersey will be offered tax credits based on capital investment and job creation. An eligible business can receive an annual tax credit of as much as $8,000 for 10 years for each full-time job created or retained. To qualify, businesses must retain 100 full-time jobs or create at least 100 full-time jobs in a state-designated desirable industry and invest at least $20 million in a qualified incentive area. The governor's office says the new credit is comparable to the state's Urban Transit Hub Tax Credit, which not all areas are eligible for, and allows businesses in other areas of the state to compete for new development, job retention and reinvestment.

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Connecticut Comptroller Kevin Lembo urged legislative leaders to monitor the effectiveness of the state's new business development and job creation tax credit programs. Lembo recommended that the state reconvene the Business Tax Credit and Tax Policy Committee to evaluate the programs that were created by H.B. 6801 in October. If reconvened, the committee would evaluate the credits or policies to determine whether they provide a benefit to the state in terms of measurable economic development, new investments in the state, new jobs or retention of existing jobs, or measurable benefits for the workforce. The committee would also determine whether there is sufficient justification to continue the credit; if the credit could be administered more efficiently as part of a broad-based credit or policy; and if the credit adds unnecessary complexity in the application, administration and approval process for the corporation business tax.

Journal Category:

State Tax Credits

Authors:

Novogradac

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