The House Tax Policy Committee today approved landmark legislation to help Upper Peninsula mining companies create jobs and become stronger financially while encouraging economic development in the region, state Rep. Matt Huuki announced.
House Bills 6007-6012, introduced by Huuki, would place a 2.75 percent severance tax on gross mineral value on specified non-ferrous metallic minerals such as copper and nickel. The tax replaces the property tax, corporate income tax, sales tax and use tax that mining companies currently pay.
“The tax reforms will help create good-paying mining jobs for local families and encourage economic development in the Upper Peninsula,” said Huuki, R-Atlantic Mine. “This could be the single, most-effective reform proposal to come out of Lansing to help the Upper Peninsula as a whole. A simplified and fairer tax structure will support strong investment in our communities for years to come.”
Huuki worked with state departments and local municipal governments to improve the package. After some local government officials voiced concern about the revenue distribution formula, Huuki rewrote the bills to allow 65 percent of the revenue from the severance tax to be retained by counties, townships, school districts and the school aid fund. The remaining 35 percent would go into a rural development fund to support long-term regional economic opportunities.
“Legislation is always a work in progress and I appreciate our local officials who attended last week’s committee hearing on the package,” Huuki said. “We’ll continue to work with all stakeholders as the legislation works its way through the process. Our goal is to properly balance the needs of local governments with the need for local families to find work.”
Huuki said the rural development fund would provide funding for infrastructure improvements such as broadband Internet connectivity, energy, rail and talent to strengthen local communities. In addition, the fund could address energy issues that have been hampering job creation and new business development in the Upper Peninsula.
The bills now go to the full House for consideration.