LANSING – Representative Gary McDowell (D-Rudyard) today lauded 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.
"This plan gives Michigan a key spot on the high-tech industry map," McDowell said. "By becoming part of this growing field, we can bring more good-paying jobs to the state. In these tough times, this boost is just what we need to do to help turn our economy around."
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.
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.
"The world is looking to our automakers to create vehicles of the 21st century, and by becoming a part of the alternative energy boom we are securing our place in the future." McDowell said. "We no longer have to be the auto industry of the past, but can once again create the vehicles that will make us the envy of the world. Positioning Michigan as a leader in the advanced battery manufacturing industry will help our state become a magnet for other high-tech businesses."