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SB 783

Economic development: other; eligibility for stock buybacks during the period of award if awarded an economic incentive; prohibit. Amends 1984 PA 270 (MCL 125.2001 - 125.2094) by adding sec. 7c.

2025-2026 Regular Session Introduced by Mallory McMorrow and 1 co-sponsor

SB 783 would ban stock buybacks by publicly traded economic-incentive recipients during the incentive period and impose penalties for breaches.

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Bill Summary · SB 783

Summary of SB 783 (2025-2026) – Michigan

Purpose and intent

SB 783 seeks to restrict stock buybacks by publicly traded entities that receive or are subject to economic incentives under Michigan's strategic fund programs. The bill adds a new section (Sec. 7c) to the Michigan Strategic Fund Act and, if enacted, would prohibit stock repurchases during the period an entity is receiving an economic incentive or is bound by a related written agreement. It also establishes requirements for written incentive agreements with publicly traded recipients and provides penalties for breach.

Key provisions

  • Stock buyback prohibition during incentive period (Sec. 7c(1))

    • If a recipient of an economic incentive is a publicly traded entity, that entity may not undertake a stock buyback during the period it receives the economic incentive or is subject to a written incentive agreement.

  • Conditions for written incentive agreements (Sec. 7c(2))

    • Beginning on the act’s effective date, the Michigan Strategic Fund (MSF) may not enter into a written economic incentive agreement with a publicly traded entity unless the agreement includes:
    • (i) A clause prohibiting stock buybacks during the incentive period.
    • (ii) A breach penalty: termination of the agreement, repayment of all economic incentives received, and a penalty equal to 10% of the total amount of incentives received if the stock buyback prohibition is breached.

  • Definitions (Sec. 7c(3))

    • “Economic incentive” includes grants, loans, tax captures or abatements, or any other economic assistance or benefit provided under MSF-administered programs or where certification/approval is required by MSF or related state law.
    • “Michigan Strategic Fund” covers the MSF and its officers, employees, and agents (including MEDC and staff).
    • “Stock buyback” means the entity’s acquisition of its own issued and outstanding shares (by purchase, exchange, etc.) that results in shares being retired, canceled, or held as treasury shares.

Who is affected

  • Publicly traded entities receiving any form of economic incentive from Michigan’s Michigan Strategic Fund or subject to related incentive agreements.
  • MSF, MEDC, and related state entities that administer economic incentive programs and negotiate/execute incentive agreements.

Procedural and timeline aspects

  • The amendments would apply from the act’s effective date. From that date forward, MSF cannot enter into a written incentive agreement with a publicly traded recipient unless it includes the stock buyback prohibition and the 10% breach penalty.
  • If a breach occurs, the penalties require immediate termination of the agreement, full repayment of incentives received, and an additional 10% penalty of the total incentives.

Fiscal impact

  • The fiscal note indicates no net impact on state or local government finances. Any changes to MSF’s incentive-approval processes would be routine operating matters within existing appropriations.

Context and status

  • Introduced February 11, 2026, and referred to the Committee on Economic and Community Development.
  • Co-sponsors: Senator Mallory McMorrow and Senator Sue Shink.

Bottom line

SB 783 aims to align Michigan’s economic incentive programs with broader expectations for corporate governance by restricting stock buybacks for publicly traded incentive recipients and enforcing consequences for violations. The measure would require incentive agreements with explicit prohibitions and penalties, potentially influencing how publicly traded companies approach incentive negotiations with the state.

Compiled from official sources — confirm details with the bill’s official record.

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