Nov. 14, 2025 | This Week in Government: House GOP Unveils Plan to Create Tax Credit for Job Creation, Rollup MEGA Credits

House Republicans rolled out their plan for economic development and job creation during a press conference Thursday afternoon.

HB 5292 and HB 5293 would create an annual payroll credit equal to 50% of the income tax withheld for each new job a company creates for up to 10 years.

To qualify for the credit, the positions created would have to be permanent, full-time jobs created after Sept. 30, 2025, and pay at least 150% of the median regional wage.

The program is capped at $50 million annually through 2036, with $10 million set aside for businesses with under 100 employees, $15 million set aside for businesses with between 100 and 999 employees, and $25 million set aside for businesses with more than 1,000 employees.

By capping the program at $50 million a year, taxpayers would get a better value, House Speaker Matt Hall, R-Richland Township, said.

“It’s going to ensure that all kinds of businesses benefit,” he said. “This isn’t a project where four or five businesses … get the benefit. This is something everyone can aspire to … and once they perform, they’ll get the benefits.”

Rep. Mike Hoadley, R-Au Gres, said this was different from previous incentives, like the Strategic Outreach Attraction and Reserve Fund, because it doesn’t provide taxpayer money to businesses up front.

“The biggest benefit to this is it’s not corporate welfare,” he said. “It’s not upfront taxpayer money. It is sincerely performance incentives that goes right to job creators in this state.”

The program would apply to all businesses, Rep. Mark Tisdel, R-Rochester Hills, said.

“It is not limited to simply large employers- every employer from Main Street right on up to the Renaissance Center in downtown Detroit could participate,” he said.

Any business can apply for the tax credit, regardless of industry, Hoadley said, adding, “the incentive starts around the first job.”

The plan works because the incentive doesn’t provide money up front, Tisdel said.

“It’s crediting against incremental growth,” he said. “We’re not mortgaging the future.”

The proposal also addresses Michigan Economic Growth Authority credits, which are still being paid out after being approved under the former Gov. Jennifer Granholm administration.

Most of those credits are 15 years old or older, and the total value of the remaining MEGA credits will start declining in 2026, dropping to nearly nothing in 2030, and they are scheduled to fully expire in 2031.

The bills roll MEGA credits into the Corporate Income Tax.

“We’re not walking away from the commitment,” Tisdel said. “We’re simply going to restructure that and try to get that out in 10 payments over the next 10 years.”

Tisdel said that although he believes the state has a responsibility to honor the promises made with MEGA credits, the economy has changed.

“It’s a new time. It’s a new opportunity for us to reset, and the economic realities in Michigan, in the U.S. and globally, require a kind of reevaluation of where we are and how we move forward on these programs,” he said. “There are a new set of rules, but we do recognize that we made a commitment.”

How the existing MEGA credits and the proposed tax credit would interact is unclear, Tisdel said.

“What I would advocate for is that the MEGA credits are a promise we made … and we still have an outstanding balance on those,” he said. “Now, if you want to grow jobs, if you want to add incremental jobs in the interim, I think that would be wonderful to reward those as well because we’re not digging into our base like we are with the MEGA credits.”

Tisdel said compliance and transparency would be handled through the Department of Treasury.

“They would have to be issuing to the state treasury affidavits, elements of their annual tax returns, indication that these incremental jobs have been in place,” he said. “Probably not a very good idea to lie to the Treasury Department.”

Hall said he wanted to get something done on economic development before the end of the year, and that he was talking to Sen. Sam Singh, D-East Lansing, about this bill package.

“We’ll make a deal, and we’ll come up with something hopefully by the end of the year,” he said.

Michiganders who received unemployment benefits they may not have qualified for during the height of the COVID-19 pandemic could see relief from having to pay that money back to the state under a bill advanced to the Senate floor on Wednesday.

SB 700, sponsored by Sen. Darrin Camilleri, D-Trenton, would waive the recovery of benefits paid by the Unemployment Insurance Agency between Feb. 7, 2020, and Sept. 5, 2021, by designating them the result of the agency’s administrative or clerical error and prevent recovery unless a determination is made that the payments were obtained fraudulently.

The bill was reported by the Senate Labor Committee just after UIA Director Jason Palmer testified before its members regarding the agency’s efforts to recoup nearly $2.7 billion in state unemployment funds doled out in 2020 and 2021 to people who should not have qualified for them, largely due to an administrative discrepancy between state and federal government regulations at the time.

“This was a time of panic, anxiety and confusion for so many across Michigan. Our neighbors found themselves suddenly out of work and unable to make ends meet as we took steps to contain the spread of COVID-19. During this challenging time, these UI payments were what kept food on the table and paid rent for millions of Michiganders,” Camilleri said. “I was proud that we fulfilled our responsibilities of state government and provided for the most vulnerable of our residents across the state by expanding payments and putting more money in the pockets of those left without a stable income. Now, as families are dealing with the on-again, off-again SNAP benefits and ACA premiums that are set to skyrocket due to Republicans in Congress refusing to act, these same residents are being told they owe thousands of dollars back to the state due to no fault of their own.”

The bill is supported by the Michigan AFL-CIO, Michigan Laborers District Council and Michigan Nurses Association and opposed by the Detroit Regional Chamber, Michigan Chamber of Commerce, and Michigan Small Business Association.

The Michigan Alliance for Legal Reform announced its formation on Wednesday focused on two goals: regulations for outside parties funding lawsuits and reviving the “open and obvious” doctrine in premises liability.

The newly formed alliance of legal experts and business groups told reporters that their main goal is to push for policy that restores Michigan to a healthy legal climate they say has been lost in recent Michigan Supreme Court decisions to expand liability.

Zach Rudat, the alliance’s director, also director of legal reform at the Michigan Chamber of Commerce, said recent court rulings and pending litigation in the state undermine fairness and predictability of the legal process.

Advocates for plaintiffs disagree with the group’s agenda, saying the effort for fairness and balance is just “a guise.”

“Michigan’s legal system impacts everyone, even when they don’t set foot in the courtroom,” Rudat said. “Right now, the average Michigan household pays over $3,000 annually on a trickle down toward tax dollars that families could otherwise spend on groceries, mortgage payments, or monthly bills.”

Tiger Joyce, president of the American Tort Reform Association, explained that during his tenure at the association, Michigan used to be a state enacting key reforms, but has recently been on the radar for courts working outside of what is appropriate to expand liability, naming Michigan “a judicial hellhole.”

Starting in 1999, when a 5-2 conservative majority took hold of the Supreme Court, business groups extolled the state’s legal climate following a series of rulings restricting liability. However, starting in 2018, that 5-2 conservative majority has flipped, going from 4-3 conservative to 4-3 liberal to 6-1 liberal this term.

One of the group’s efforts is to revive the “open and obvious” doctrine for defense of premises liability, which shielded business or property owned from injury caused by a hazard that was reasonably visible. It was also used to dismiss meritless claims early in litigation.

This statute exists in 41 states. The Michigan Supreme Court abolished the doctrine in 2023, overturning a 2001 precedent.

Brad Ward, vice president of public policy and legal affairs for Michigan Realtors, said restoring this doctrine would lower costs, liability and “the threat of loss and abuse for property owners.”

There is legislation in the House now that could codify the liability doctrine and restore the status quo before the ruling (See Gongwer Michigan Report, Aug. 20, 2025).

Another key issue for the alliance is being spearheaded by Rep. Mike Harris, R-Waterford Township, by introducing HB 5281 to add transparency measures to third-party litigation funding, or when an outside investor finances another person’s lawsuit for a cut of the winnings.

The bill would require a funder to register with the state, prohibit funders from influencing how the case is handled, ban “foreign adversaries” from funding Michigan lawsuits, and cap funder earnings to protect compensation for the plaintiffs.

“Without oversight, the system has quietly grown into a $15 billion shadow industry that distorts justice,” Harris said. “Right here in the state today, a funder can bankroll a lawsuit without anyone knowing – not the judge, not the defendant, sometimes not even the plaintiff themselves. These financiers can influence settlement decisions, drag out litigation, and take a hefty portion of the award. It’s an unregulated marketplace that invites abuse, and it undermines the confidence in our courts here in the state, and it’s not just a fairness issue, it’s really a security issue.”

Harris said these “are common sense guardrails” and follow suit from states like California and Tennessee that have enacted transparency law on these funding mechanisms.

There are no clear examples of this in the state, Rudat said, because of this lack of transparency. Instead, he pointed to examples across the country like a man in New York who used third-party funders for his lawsuit on the health effects of the 9/11 cleanup effort, didn’t read the fine print, and lost all his earnings in the suit.

Wendy Block, senior vice president of business advocacy at the Michigan Chamber of Commerce, said when the legal system does not function fairly, it can affect job creation, business investment, and even consumer costs.

“For Michigan to compete and win, we need clear and consistent laws that have staying power,” Block said. “The reality is this, though, businesses invest when and where they have confidence. This includes confidence in the fairness of our legal system. This is a key economic competitiveness factor.”

Brian Calley, Chief Executive Officer of the Small Business Association of Michigan, said for all the smaller operations in the state, one lawsuit can take them out with rising costs, and that the current legal environment created by “poor decisions from the Michigan Supreme Court” puts those businesses at risk.

Rudat said the new alliance is purely a legislative lobbying effort at this point and is not focused on any campaigns like judicial elections.

During the late 1990s and 2000s, business groups – led by the Michigan Chamber of Commerce – poured millions into the Supreme Court races. Recent cycles have not seen that type of investment. The Democratic nominees for the Supreme court of late have widely outspent their Republican opponents.

The Michigan Association for Justice, which represents trial attorneys, said in a statement that the alliance is just “a corporate-funded effort to strip away the rights of Michigan consumers, workers, and patients under the guise of ‘fairness’ and ‘balance.’”

“This is not a grassroots coalition, it’s an insurance industry wish list wrapped in talking points,” Steve Pontoni, executive director of the association, said in a statement. “For 30 years, the courts benefited the business community, making Michigan one of the worst places in the country for consumers and workers. It is not surprising that a coalition of groups that benefit from exploiting consumers, patients and workers would gather to try to put their thumb on the scales of justice again.”

The association said the reinstatement of the doctrine would allow negligent property owners to evade responsibility and that the transparency measures would make it harder for people to stand up to industries with much higher means than them.

The association also said job losses because of “tort tax” has been “repeatedly debunked.” The association urges lawmakers to reject the efforts that would “weaken” the justice system.

The Public Service Commission on Thursday approved a request by Consumers Energy Company for a build transfer agreement for the utility to acquire a 200-megawatt solar energy project in Otsego County.

Consumers under the agreement will acquire the 45th Parallel Solar Project from 45th Parallel Solar LLC.

The 200-megawatt project in Otsego County is expected to have an installed capital cost of $436 million with a tentative operation date of Dec. 31, 2027.

PSC members also on Thursday approved power purchase agreements from Consumers from multiple small solar facilities.

A 15-year power purchase agreement was approved between Consumers and Pivot Energy MI 10 for 3 megawatts of power at Pivot Energy MI 10 Solar Plant in Calhoun County covering July 31, 2027, through July 31, 2042.

Another 15-year agreement, this one with Pivot Energy Michigan, 19 LLC, was also approved. This agreement covers 2 megawatts of output from the Pivot Energy MI 19 Solar Plant in Mecosta County for the period of July 31, 2028, through July 31, 2043.

Bipartisan bills intended to improve transparency in the approval of legislative earmarks sailed through both chambers on Thursday following an agreement by both chambers to extend the period in which they must be introduced prior to being voted on.

Members of the Senate voted Thursday in favor of a compromise on bills that would create a 45-day period in which legislative earmarks would have to be submitted prior to being put up for votes.

Amended versions of the legislative earmark transparency package, HB 4420 and SB 596, were passed 35-0.

The House quickly moved to pass the legislation later Thursday, too.

Thursday’s votes mark a compromise struck to set a requirement that legislative earmarks must be submitted at least 45 days prior to being voted on in both legislative chambers.

As introduced, the Senate had set a 10-day period prior to voting. Last month, the House amended SB 596 to set the period at 60 days and sent it back to the Senate along with an amended version of HB 4420 (See Gongwer Michigan Report, Oct. 30, 2025).

The Senate votes on Thursday came after last month’s threat by House Speaker Matt Hall, R-Richland Township, to refuse movement on any Senate bills through the House if the Senate does not move the earmark bills with a 60-day provision.

Another key change made to SB 596 states that any legislative earmark request introduced during the first year of a two-year legislative session applies to both fiscal years. Those introduced in the second year of the two-year legislation session would apply only to the final years of the cycle.

A substitute for HB 4420 was also adopted prior to the vote to align the bills.

“We want to get value for your dollars as taxpayers,” Hall said during a press conference Thursday afternoon. “This is the most important ethics, accountability and transparency legislation to move through the House and the Senate. … It’s going to make budgets much better.”

SB 596 passed the chamber unanimously, 101-0, as did the concurrence votes for HB 4420 and HB 5055. HB 5055 would allow sergeants to enforce the rules of the House or the Senate and the laws of the state. This would enable sergeants to attend committee meetings with members as security and to investigate threats against members as individuals. The bill would also authorize sergeants to work with local law enforcement, giving them statewide jurisdiction.

The supplemental for the 2025 budget contains funding for both the House and Senate to implement HB 5055, Hall said.

“That will allow us the opportunity to hire more sergeants and the equipment we need to carry this out,” he said.

Hall said although he would have liked to see legislation requiring public hearings for the earmarks, it was more important to get the 45 days.

“If I put in a requirement that forces them to have a committee hearing and they’re just going to make it a show committee hearing, why am I fighting for this?” Hall said. “I think it’s the best practice and we should have a committee hearing, and that’s something that we’re going to aspire to.”

During the press conference, Hall repeatedly emphasized that he was not getting enough credit for the transparency legislation on earmarks.