Anti-Piracy Rules - Michigan

For years cities have been offering tax breaks to large corporations as a way to draw investment and jobs to their own jurisdictions. In effect, these tax breaks pit one city against the other while benefiting already wealthy corporations at the expense of local tax bases.

Act 198, passed in 1974, allows Michigan towns to offer such tax abatements at a time when auto manufacturers were fleeing to Sun Belt states. The law allows Michigan towns and cities to apply for an industrial facilities exemption certificate, which gives them the authority to offer property tax abatements of up to 50 percent to industrial facilities that locate in designated districts.

But at least one provision of the law prevents corporations from playing cities off each other. Section 207.559 states that another Michigan municipality may veto the certificate if the corporation intends to transfer employees from the latter city to the former.

1974 Michigan Act 198
Section 207.559, (2), (f)

The legislative body of the local governmental unit shall not approve an application and the commission shall not grant an industrial facilities exemption certificate unless the applicant complies with all of the following requirements:

(f) Completion of the facility shall not have the effect of transferring employment from 1 or more local governmental units of this state to the local governmental unit in which the facility is to be located, except that this restriction does not prevent the granting of a certificate if the legislative body of each local governmental unit from which employment is to be transferred consents by resolution to the granting of the certificate. If the local governmental unit does not give its consent, a copy of the resolution of denial showing reasons for the denial shall be filed within 20 days after adoption with the department of consumer and industry services.

More Information:

• Full Text of Michigan Act 198 of 1974 - Plant Rehabilitation and Industrial Development Districts