LANSING – Oakland County's Democratic State Representatives today announced a bipartisan, bicameral plan that will help make Michigan a leader in emerging high-tech industries by dramatically expanding the tax credits available to companies that are involved in the production, development and commercialization of advanced battery technologies. The original tax credits, signed by the Governor in January, offered businesses a potential $335 million in refundable tax credits.
"Being able to produce advanced batteries for the next generation of vehicles will help create the high-tech jobs that Michigan needs now," said Lisa Brown (D-Bloomfield Hills). "As the demand for alternative-fuel vehicles continues to grow, these incentives will put Michigan in a position to be a leader in advance battery technology."
The bipartisan initiative would give an additional $200 million in tax credits for companies involved in all aspects of advanced battery development. These tax credits would be spaced out over the next four years, providing a continued benefit for new technologies and development. The plan also rewards companies who support fellow Michigan businesses by giving priority in the awarding of these tax credits to those who commit to using local suppliers.
"In these tough economic times, we have to stand behind Michigan businesses," said State Representative Vicki Barnett (D-Farmington Hills). "This plan will make Michigan a magnet for these advanced manufacturing companies that will create thousands of good-paying jobs. I'm very pleased that we're working across the aisle on this common-sense plan to turn Michigan's economy around."
The plan builds on the last tax credit initiative, which was the first of its kind in the United States and passed with overwhelming bipartisan support. The law authorized the Michigan Economic Growth Authority (MEGA) to provide refundable tax credits totaling up to $335 million for battery pack assembly; research and engineering to support battery use in vehicles; engineering of advanced battery technologies; and capital investment for construction of battery manufacturing facilities. MEGA awarded the first of these tax breaks last month to GM, for the production of lithium-ion batteries for the upcoming Chevy Volt.
Under the most conservative estimates, the battery tax credits will create more than 40,000 jobs and over $9 billion in economic activity by the year 2020, according to the Center for Economic Analysis at Michigan State University. The most likely scenario would see Michigan gaining nearly 90,000 jobs and over $18 billion in economic activity as result of the initial $335 million program.