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Neumann: Background checks mandatory for tax incentives

Submitted by on March 26, 2010 – 6:14 amNo Comment


State Representative Andy Neumann Thursday, voted for the Corporate Responsibility Act – a package of bills to help ensure that taxpayers’ dollars are used wisely to create jobs and increase transparency and accountability in the awarding of state economic development incentives.

The plan includes mandatory criminal background checks on those applying for incentives in order to prevent the abuse of state tax credits like the recent awarding of a $9.1 million economic development incentive to a convicted felon.

“Economic development incentives can be a great tool to spur economic growth and create jobs for our workers,” Neumann said. “However, we need to shine a light on the process of how these tax credits are approved and what businesses they are awarded to. Especially in these tough times, we must make sure that every taxpayer dollar is used wisely and in the best interest of our hard-working residents.”

Under the Corporate Responsibility Act, recipients of state economic development incentives will be required to undergo mandatory criminal background checks before the state can approve them. This includes every officer, director, managerial employee and any person who holds a 20 percent interest in the company that is applying.

The package of bills will also help ensure that these taxpayer dollars produce their intended result of creating Michigan jobs for Michigan workers. When awarding contracts, the Department of Technology, Management and Budget will be required to consider whether applicants will provide goods or services from outside of Michigan or the United States.

Recipients also must disclose where the work – including any work done by subcontractors – will be completed and where their call or contact center is located, if they have one.

The Michigan State Police are currently investigating the $9.1 million state tax incentive awarded last week to Richard Short – a Flint resident who has been convicted of fraud in Genesee, Oakland and Muskegon counties and served prison time. Short was awarded the Michigan Economic Growth Authority (MEGA) tax incentive for his new company, RASCO.