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After Ford expands in South, Michigan Senate approves incentives

LANSING (Mich.) -- On Thursday, the Michigan Senate quickly approved bills to increase job-creation and expand incentives for businesses. This is in addition to efforts to land major projects unspecified in the industry as it transitions to greener technology.

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After Ford expands in South, Michigan Senate approves incentives

The House had approved the same legislation a day earlier. Due to legislative rules, final action won't occur until next week. Legislators are also discussing how much money to place in the new Strategic Outreach and Attraction Reserve Fund.

Democratic Gov. backed the measures. Gretchen Whitmer described the measures as a "once in a lifetime opportunity to expand our economic developmental toolkit." This could allow legislators to have more say in deals. Because they could control how money is transferred to new sites readiness or critical industry funds. The state's economic board could then disburse incentives.

These fast-tracked steps were announced less than three months ago by Dearborn-based automaker Ford, which had announced plans to construct three electric-vehicle batteries factories and an assembly plant in Kentucky. This would create an estimated 10,800 new jobs.

Senator Curt VanderWall of Ludington, a Republican, is the sponsor of one of these bills. He said that Detroit-based General Motors is looking at expansions.

He said that the legislation "allows us negotiate and ensure that we take care Michigan businesses... those that we want to stay here and not leave our region." It is crucial that Michigan gives Michigan the tools it needs to be competitive for these jobs and businesses.

Mary Barra, GM CEO, gave a strong hint that Michigan might get an electric vehicle factory. When asked by the Automotive Press Association whether Michigan could get an electric vehicle battery factory, Mary Barra said that talks are ongoing with the state.

Barra stated in Detroit that "In the not too distant future, we will be able to answer this question." He also said that an announcement would likely occur in weeks and not months.

GM plans to build four North American batteries factories. Two locations have been announced in Ohio and Tennessee. It would be logical to build a Michigan plant, as the company plans to construct at least two electric vehicle assembly plants in Michigan.

VanderWall stated that Ford's announcement caught legislators by surprise and "probably tipped them the scales" in convincing them to do something, two years after they allowed a 2017 tax incentive program geared towards large-scale business expansions expire.

He said that sites will be shovel-ready so businesses can "get up and running much faster than what we currently have."

The GOP-led chamber voted against the bills by seven of 21 Republicans, and three of sixteen Democrats. One member was absent. They argued that corporate subsidies make it less possible to spend on other priorities of the government.

"How morally fair is it to collect taxes from thousands of businesses that pay into the state treasurey, only to then pay that money out to larger businesses or others that may actually be a direct rival to an existing business within our state?" asked Sen. Tom Barrett, a Charlotte Republican.

The legislation's supporters claim that it contains detailed criteria that the Michigan Strategic Fund Board would need to review and document before authorizing a grant, loan, financing, or other assistance for business investment, site development, and/or site development. Legislators would be informed of any proposed changes or actual modifications to any written agreement.

Before the Critical Industry Fund and the Michigan Strategic Site Readiness Fund can be used for deals, the House and Senate budget committees will have to approve transfers from the main fund known as SOAR. This fund is overseen by the state Department of Labor and Economic Opportunity.

"This gives the Legislature a credible voice during these processes so that we understand the macro and have information about some emerging opportunities for the State, and we can maintain Michigan as the place where things happen," stated Rep. Ben Frederick, Owosso Republican.

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