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Governor Granholm Signs Bicycle Production Incentive Package, Sets Stage for Growing Industry in Michigan

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Part of economic stimulus plan to grow economy, create jobs

LANSING – Governor Jennifer M. Granholm today signed into law legislation designed to grow the bicycle industry in Michigan, setting the stage for hundreds of millions of dollars in private investment that will create jobs in the state.  The legislation was proposed by the governor in her State of the State address and is part of an overall economic stimulus plan to grow Michigan’s economy and create jobs.

“We’re going to grow this industry and in the process, grow our economy and create jobs,” Granholm said.  “Across the country and around the world, the bicycle industry is a multi-billion dollar industry.  We’re going to bring some of that investment to Michigan.”

Granholm said Michigan’s bicycle incentive program is now the most aggressive in the nation.  Not only is it designed to increase the number of bicycles produced in Michigan, it is designed to attract production facilities, grow industry activities that support the bicycle industry, create jobs, and train workers for those jobs.

“This program is designed to attract bicycle companies and aftermarket production facilities that will be employing people and growing an industry to support the growing community of bicyclists here in Michigan” Granholm said.  “We’ve seen the excitement that is generated when Lance Armstrong is in the Tour, and when Americans like Kristen Armstrong and Jill Kintner are competing at such a high level internationally, we want to turn that excitement into jobs and community investment so that families can stay in the area and raise children here that can enjoy a healthier future”

Bicycle incentives in other states have resulted in short- and long-term economic benefits, including investments in infrastructure. In Maine, bicycle tourism brings $66.8 million to the Maine economy. In the Minneapolis-St. Paul area, for every 400 meters closer a median-priced home is to an off-street bicycle facility, its value increases by $510. The Wisconsin bicycle industry brings $556 million and 3,420 jobs to the state, and more than $1 billion to the Colorado state economy.

Bicycling also brings summer business to ski areas: 161 U.S. ski areas open trails to mountain bikers in the summer, and 84 run lifts for cyclists. In 2005, 19.8 million bicycles were sold in the U.S., 4.4 million more than all the cars and trucks purchased in the U.S. that year.

Michigan’s new bicycle production program provides incentives for bicycle frame and parts production, infrastructure development, financing and workforce development with an emphasis on hiring Michigan workers and making use of existing factory facilities in Michigan’s 103 core communities, urban communities, and traditional centers of commerce.  It also provides a number of other incentives for growing the industry in Michigan, including enhanced engagement with the National Bicycle Dealer Association.

Specifically, the new laws provide a 45-percent refundable or transferable tax credit for producing bicycles, in part or in whole, in Michigan, with an added 2-percent rebate for parts produced in core communities.

The new laws also provide 25 percent tax credit for bicycle and pedestrian infrastructure investments for such facilities as building in bicycle parking and covered access enhancements for mass-transit projects currently in planning and production.

Bicycle frame and parts production companies are now eligible to receive job creation tax credits issued by the Michigan Economic Growth Authority (MEGA) against MBT liability for the creation of jobs; loans from the Michigan Strategic Fund under the 21st Century Jobs Fund program for up to $15 million per qualifying bicycle frame and parts productions in Michigan; loans against bicycle frame and parts tax incentives; and are eligible to participate in the capital access program established by the Michigan Strategic Fund under the 21st Century Jobs program.

In an effort to grow the number of bicycle industry jobs in the state, the new laws establish a Bicycle Frame and Parts Manufacturing Job Training Tax Credit of 50 percent for expenditures incurred by a production company providing on-the-job training for Michigan residents.  Bicycle frame and parts manufacturers are allowed free use of state property for film and digital media productions, an option that local governments are allowed to authorize, as well.