Summary — HB 4112 (Michigan) — Amend MCL 207.803 (Michigan Economic Growth Authority Act)
Status / Key dates
- Introduced: February 25, 2025 (read 1st time); filed March 7, 2025 (sponsor record lists Rep. Greg VanWoerkom).
- Final action: Signed by Governor June 20, 2025; effective September 1, 2025.
- Tie‑bar: HB 4111 (2025 session).
- Note: the legislative file provided contains extraneous text from unrelated legislation (Illinois and an ID/DD care bill). This summary focuses on the Michigan HB 4112 content amending section 3 (MCL 207.803).
Purpose and intent
- HB 4112 revises definitions in section 3 of the Michigan Economic Growth Authority (MEGA) Act. The changes clarify and expand the statutory definitions that determine which businesses, jobs, and activities qualify for MEGA incentives (tax credits and related agreements), and add new categories of eligible businesses — with the objective of modernizing eligibility criteria and eligibility calculations for state economic development incentives.
Key provisions and changes
- Revises multiple core definitions used throughout the MEGA Act, including:
- "Affiliated business" and "associated business" — clarifies ownership/control thresholds (50% ownership/control).
- "Authorized business" — expands/clarifies when an eligible business may qualify for credits, including provisions that allow qualified job counts to be attributed where associated, subsidiary, affiliated businesses, employee leasing companies, or professional employer organizations (PEOs) with withholding relationships perform payroll functions.
- "Distressed business" — sets a specific eligibility test: had ≥150 full‑time Michigan jobs in the 4 years before application and experienced a ≥30% reduction in full‑time jobs over any consecutive 3‑year period; excludes seasonal employers.
- "Eligible business" — enumerates covered sectors (manufacturing, mining, R&D, wholesale/trade, film and digital media production, office operations, high‑technology, tourism attractions, qualified lodging); excludes most retail establishments and professional sports stadiums (with limited grandfathering).
- Adds "eligible next Michigan business" — a new category focused on businesses engaged in multimodal commerce and supply‑chain/logistics activities (e.g., shipping, packaging, assembly facilities that rely on multimodal transport).
- "Film and digital media production" — provides an expanded operational definition and lists specific exclusions (e.g., news, live sports, advertising, certain obscene content, radio, game shows).
- "Full‑time job" — establishes a 35+ hour/week threshold and specifies permitted payroll/withholding arrangements (authorized business, employee leasing company, PEO, or specified third parties).
- Other definitions clarified/added: "facility," "local governmental unit," and "high‑technology activity" (with illustrative categories).
Who is affected
- Primary: Businesses applying for or holding MEGA agreements/tax credits — especially manufacturers, logistics/multimodal firms, film/digital media producers, high‑tech firms, tourism/lodging facilities, and distressed firms that meet the statutory test.
- Secondary: Employee leasing companies and professional employer organizations (PEOs), local units of government that partner on incentive projects, and the Michigan Economic Growth Authority (administration/verification responsibilities).
- Fiscal/State impact: Changes could expand the pool of qualifying projects and job counts eligible for MEGA credits, potentially affecting future state tax expenditures; exact fiscal impact depends on program uptake and agreement approvals (not provided in the bill text).
Procedural/implementation notes
- The bill amends statutory definitions (MCL 207.803) used throughout the MEGA Act; implementing guidance, administrative rules, or updated application procedures may be required for the Authority to apply the revised definitions.
- Effective date: September 1, 2025.
- Tie‑bared to HB 4111 — often used to coordinate related statutory changes; implementers should review HB 4111 for complementary provisions.
Limitations / Observations
- The bill text excerpt focuses on definitional changes rather than altering the core mechanics (e.g., credit amounts or scoring). The practical effect will depend on how the Authority interprets and applies the new definitions in future agreements.
- No fiscal note or projected cost/benefit was included in the provided materials.
