Government Relations Update

March 24, 2008

Tourism Promotion Bills Move Forward

One of the top initiatives of the Chamber and the Northwest Regional Chamber Alliance is the creation of consistent funding to promote Michigan as a tourism destination.

Both chambers are acting on bipartisan packages aimed at creating a steady stream of funding to promote Michigan in major metropolitan markets across the country. The bills call for the creation of a Michigan Promotion Program by the Michigan Strategic Fund board to promote tourism funding, allocate $60 million over three years for tourism promotion activities from the 21^st Century Jobs Trust Fund, and recommend a dedicated funding proposal for tourism by the end of 2009.

The senate bills are slated for a committee vote on March 25. Senate Bills 1223-25 are sponsored by Sens. Allen, Stamas, and Clarke. The house bills, HB 5865-5867, sponsored by Reps. Ebli, Brown and Horn, have passed the House and were referred to the Senate Commerce and Tourism Committee, chaired by Sen. Jason Allen. All of the bills can be viewed at www.mileg.org.

The case for swift action on the legislation comes as the calendar continues to move toward summer, since tourism-heavy areas need to have the ads run early in the season to garner any results. Also, with 2008 being an election year, much of the summer airtime is already being bought up by political campaigns across the country, limiting the availability for tourism ads.

Chamber and Alliance Continue Gathering “Your MBT Experience” Submissions

Michigan businesses have just calculated and submitted their first quarter Michigan Business Tax payment and are finding in many cases that their liability has increased, sometimes significantly.The Chamber and the Northwest Regional Chamber Alliance continue to gather input from chamber members on these cases.

Reports are coming in from across the state that some businesses are seeing increases in their MBT liability as high as 200-300% over last year. The Chamber and the Alliance have launched an information drive to see how the new tax is impacting northwest Michigan. We want to hear about the experience your firm or your accountant has encountered in preparation for this first MBT payment.

What obstacles did you meet during your preparation? Were there areas of the reporting requirements that were unclear or incomplete? Was preparation more complicated than before? Do you anticipate increased tax preparation fees due to the MBT? Did you see an increase in your liability? If you did see an increase, what type of impact could it have on your business? If you saw a decrease in your taxes or thought that preparation was less complicated, we would like to hear about that as well.

The Chamber and the Alliance continue to compile the responses and work with other chamber and business organizations across the state to show legislators the problems the new tax has created for businesses in northwest Michigan, and to collaborate for possible alternatives.

Please send your MBT experience comments to Jamie Callahan at jamie@tcchamber.org. Any information disclosed as proprietary or confidential will be kept confidential.

Film Incentive Bills on Verge of Gov. Signature

Tax incentives to lure film and commercial business to Michigan continue to receive support and are on the verge of being signed by the governor. The Chamber and the Northwest Regional Chamber Alliance supports the legislation, which would make Michigan the top state in the country for film and commercial incentives.

Some bills in the package have been ordered enrolled and sent to the governor for signature, while others will need procedural action once the House returns from their spring recess.

The House bills are HB 5841 – 5856, while the Senate bills are SB 1168-1183. Highlights of the bill package include tax credits for companies involved in the production of motion pictures, television programs, music videos, and similar productions in Michigan. This would apply to production costs and job training, tax credits and deductions for private investment in certain media productions and in media production facilities, and state-financed loans.

Individual Market Reform Hearings Resume

The debate on the individual market reform legislation took a twist last week when committee chair Sen. Tom George presented his proposed substitutes for the legislation, House Bills 5282-5285, to mixed reviews.

Highlights of Senator George’s proposal eliminates the creation of a high-risk pool in the individual market (a central part of the House-passed version), keeps Attorney General oversight in the market, establishes the creation of a charitable and social mission fund that would provide tax credits for people to buy health insurance in the individual market, keeps current pre-existing condition waiting periods, prevents re-underwriting, and allows the use of modified community rating.

Senator George says his substitutes would “protect consumers, level the playing field in the individual market, make Michigan healthier, and make insurance more accessible and affordable.”

The committee chair laid out a series of six committee hearings to review his proposals between now and the end of April. During the committee, other legislators announced that there were even more alternative proposals being drafted, with the suggestion that all the alternatives be laid before the committee so they can each be analyzed by the committee before any decisions are made.