Michigan House Bill HB4425

Michigan 2023-2024 Regular Session

• Introduced: 4/13/23
• Refer: 4/13/23

Caption

State: interstate compacts and agreements; incentives to encourage companies to relocate from one state to another; prohibit. Amends 1984 PA 270 (MCL 125.2001 - 125.2094) by adding sec. 15.

Impact

The bill's implementation signifies a shift in how Michigan handles economic development funding concerning interstate relocation incentives. By ensuring compliance with the interstate compact, it stresses the importance of adhering to collective jurisdictional agreements around subsidies, preventing any potential misuse of state funds to incentivize businesses to move from one state to another. This prohibitive stance helps maintain equitable economic practices among states, potentially protecting local economies from aggressive competitive practices.

Summary

House Bill 4425 is designed to amend the Michigan Strategic Fund Act of 1984 by introducing a new section that restricts financial support from the Michigan Economic Development Corporation (MEDC) for projects that would violate the Company-Specific Subsidy Interstate Compact Act. This new measure aims to establish a robust framework for interstate compacts regarding economic incentives, ensuring that any funding or assistance provided does not contravene these agreements. Beginning October 1, 2023, this amendment is set to take effect, contingent on the enactment of related legislation.

Contention

Debate around HB4425 may focus on the implications of restricting funding to specific projects. Supporters argue that this bill provides essential protections for the state’s economic interests and ensures fairness in the use of public funds. Conversely, opponents may view the restrictions as too limiting, potentially hurting Michigan's ability to attract new businesses and create jobs. The effectiveness of such a law, particularly in balancing state incentives against inter-state compacts, could be a significant point of contention in public discussions.