LANSING -- Companies that streamline their operations in the state by moving jobs to Michigan from elsewhere, but still show a net loss of jobs, could qualify for a tax credit under legislation approved by the state Legislature.

Lawmakers voted overwhelmingly late Tuesday and early Wednesday to approve the revised bill and other legislation in a package aimed at encouraging businesses to relocate in Michigan and getting companies already in the state to expand.

Democratic Gov. Jennifer Granholm said she will sign the bills. "There is no question that we must fight to keep the manufacturing jobs we have in Michigan," the governor said in a statement.

One bill originally would have provided a 100 percent personal property tax credit in 2007 and 2008 for businesses that bring jobs into Michigan. But businesses would not have qualified if they brought in new jobs yet showed a net job loss because they also cut jobs.

Lawmakers changed the bill to allow the Michigan Economic Development Corp. to award the credits to companies with a net job loss by citing "extenuating circumstances."

The change was aimed at helping large manufacturers such as General Motors Corp. and Ford Motor Co., which are downsizing. Some critics had complained that earlier versions of the bill would not help domestic automakers and suppliers.

The tax credit package, announced recently by Republican legislative leaders, reflects negotiations with Granholm.

House Speaker Craig DeRoche, R-Novi, said the vote wraps up a year of work on efforts to reduce the tax burden to make Michigan more attractive to companies.

"We're pleased today that we're able to take a very important first step," he said Tuesday. "We're pleased with the results and it was worth every ounce of the effort."

Under other bills approved by the Legislature:

• Auto suppliers Delphi Corp. and Visteon Corp. would continue getting special tax breaks scheduled to end in less than three weeks, but only for products sold from Michigan plants. That is another change designed to prod the suppliers to consolidate in Michigan. A company that buys a Delphi or Visteon plant, and keeps it operating over the next four years, could receive the same credits.
• The state's main business tax gradually would be revised over three years so a larger percentage is based on sales. Critics say the current ratio penalizes businesses that add workers or expand their facilities.
• Starting Jan. 1, companies would get a 15 percent credit for taxes they pay on equipment such as machinery and computers.

The bills would cut business taxes by about $575 million over four years. Granholm has questioned how the lost revenue will affect state funding for higher education and health care. Republicans say the losses will be covered by new tax revenue expected from businesses attracted to the state by lower taxes.

Broader cuts to the single business tax, first proposed by Granholm in January, have been put off until next year.

Read the story at the South Bend Tribune website.