LANSING – The Michigan House of Representatives today passed legislation introduced by State Representative Kate Ebli (D-Monroe) that will create a state-level New Market Tax Credit (NMTC) program to help boost Michigan's economy by encouraging new investment in low-income and underserved communities across the state.
"This plan will be a great job-creator for Michigan," said Ebli, Chair of the House Tax Policy Committee. "We need to make Michigan more attractive to the businesses and small businesses that drive our local economies. These tax credits will encourage new investments that will lift up our struggling communities, create lasting jobs for our residents and help get Michigan's economy back on track."
The legislation passed today will create $20 million in tax credits for individuals or businesses who invest in low-income communities or low-income residents. The state-level tax credits will work in conjunction with the federal NMTC program to encourage investment in underserved areas across Michigan. Since 2005, the federal NMTC program has helped create 18,000 jobs in Michigan and more than 255,000 jobs across the country.
Beginning in 2011, organizations who qualify for the tax credit will receive a credit of 5 percent for the first three years of the award, 6 percent for the fourth and fifth years, and 12 percent in the final year. To qualify as a low-income area, communities must either have a 20 percent poverty rate or a median income of less than 80 percent of Michigan's average income.
Residents in Detroit are benefiting from three NMTC investments, including a renovation of a former General Motors building sponsored by the College for Creative Studies, which has created more than 210 construction jobs, 200 permanent jobs and 300 new school seats; a fourth campus for the University Preparatory Academy, which created 30 construction jobs and 27 positions at the school; and TechTown's 300,000-square-foot business incubator where more than 70 businesses in the fields of public health, biobanking, life sciences, alternative energy, education and advanced manufacturing are creating new economic opportunities and jobs in the Detroit area.
Just last week, Peckham Inc., a nonprofit organization that provides job training and placement assistance for people with disabilities and other barriers to employment, held a grand opening for its flagship building in Lansing – a LEED certified building that was made possible by the federal NMTC program. The new building consolidates Peckham's Lansing-based operations into one flexible facility, and gives Peckham the ability to expand by 200 to 300 jobs within the next 10 years.
The federal NMTC program was created in 2000 to encourage greater capital investments in low-income and underserved communities. Through 2008, the program authorized $19.5 billion in credits and has been widely acclaimed for its impact in low income communities. An additional $1.5 billion also has been authorized for both 2008 and 2009 as part of the federal American Recovery and Reinvestment Act.
"If we expect to rebuild our economy, we can't neglect certain areas of Michigan," Ebli said. "We need to make sure we are working to revitalize every corner of our state, supporting our local economies and creating good-paying jobs for workers from Monroe to Marquette. This plan ensures that some of Michigan's distressed areas will have the chance to receive the help they need."