LANSING – A new Michigan House bill would take federal grants given to businesses to help them retool or expand so they can create green energy products and change the system into a revolving loan fund for businesses looking to do many of the same things, but with strings attached and penalties for not creating enough jobs.
Rep. Mark Meadows (D-East Lansing) promoted the bill at a Monday news conference. “This legislation only picks winners,” he said.
Some small businesses have had trouble gaining access to capital in recent years, he said. The bill, expected to be introduced Tuesday by Rep. Charles Brunner (D-Bay City), would not be a tax dollar giveaway, Mr. Meadows said.
There would be a number of qualifications at the front end for a company to have access to the funds, including that it pays workers the average manufacturing wage in the state, that it has a workforce turnover rate of less than 20 percent and that it provides health insurance to all full-time workers.
If a business receives the loan and promises to create a certain number of jobs, the state would check that number annually. If it does not create the promised jobs, the interest rate on the loan would increase.
After two years of creating less than half of the jobs promised, the loan would go into default.
Meadows said these type of clawback provisions stand in contrast to the Republican tax breaks to businesses that came without the promise they would use the money to create any jobs.
Meadows and the Michigan chapters of Sierra Club and Clean Water Action said it was not clear how many jobs might be created by such a loan program, or how much money would go into the fund.
The Michigan State AFL-CIO has endorsed the bill as part of the 2012 Good Jobs Agenda. The Blue Green Alliance also supports the bill.
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