Booher: We can make Michigan a small business leader
Small and local businesses are the backbone of any healthy economy. Michigan’s economy is certainly healthier than it was just a few short years ago, but I believe we can do more. To keep that positive momentum going and give Michigan businesses across the board a boost, I introduced Senate Bill 200.
The legislation would enhance current, innovative Michigan laws in the local investment area by providing Michigan Investment Markets and investors with Michigan Advancement Portfolios the ability to apply for and receive grants, loans, and other economic assistance through the Michigan Strategic Fund.
You have likely heard it said that Texas has a pretty solid economy. The word on the street is that Texas is inviting to entrepreneurs and encourages small business growth. While this may all be quite true, what would you say if someone told you that Michigan is the state that Texas is now modeling in its approach? True story.
Last legislative session, House Bills 4996 and 5273 were signed into law. Together, they pushed Michigan to the forefront of local investment and investment crowdfunding in the nation. The Michigan Invests Locally Exemption (MILE) has been touted as model investment crowdfunding legislation, while Michigan Investment Markets (MIMs), which take effective May 1, are being copied by Texas lawmakers.
Through these efforts, Michigan residents—accredited and non-accredited investors alike—will be able to buy shares and securities in local, small (or large), Michigan businesses. Michiganders can then use a MIM as a secondary market to buy, sell, and trade those shares within Michigan. The concept seems simple, but is actually quite innovative within the state investment realm. How innovative? Enough so that Texas has pending legislation to enable Texas Investment Markets.
Michigan is leading the way, but we must act to maintain our lead as other states begin to model our legislation and compete to attract new businesses. Senate Bill 200 provides the fuel to keep our positive momentum by further and truly backing small and start-up businesses in Michigan.
With my bill, institutional and accredited investors who invest at least $200,000 in a portfolio consisting solely of Michigan businesses have the potential to receive grants, loans, lower tax rates on income from the portfolio, and, in some cases, securitization of a portion of the portfolio investments. Not only that, but the bill requires that no less than 10 percent of each portfolio consist of small businesses in the state.
As the nation’s first intrastate secondary market of its type, and combined with the ability of MIMs to receive assistance and hit the ground running, Senate Bill 200 will further catapult Michigan at the forefront of the entrepreneurial landscape.
This claim and the legislation are backed by the Small Business Association of Michigan, the Michigan Bankers Association, and the Michigan Municipal League. Each has been supportive of the local investment effort in Michigan from the start and continue to lead the charge.
The league, realizing the potential for downtowns and community economies, noted: “Attracting and supporting entrepreneurs is a vital piece to creating vibrant communities and a vibrant state of Michigan. Anything we can do to provide that level of support is critical.”
After a decade of despair, Michigan is back and leading the economic recovery. We now have a simple, fair and efficient business tax climate that has helped foster the creation of nearly 400,000 private sector jobs over the past four years, while the state’s unemployment rate is at its lowest point in 14 years.
We can’t take our foot off the gas now. If Michigan wants to maintain its lead in this innovative space as we continue the work to turn our state around, we need to keep moving forward. It starts with passing Senate Bill 200.
State Sen. Darwin Booher, R-Evart, represents the 35th District.