Michigan Legislation Seeks Transparency in Economic Development Deals
A move to ensure greater transparency in Michigan’s economic development processes is underway with the introduction of new legislation in the state House. These bills aim to eliminate the necessity for legislators to sign non-disclosure agreements (NDAs) to gain insight into economic development projects.
The Michigan Economic Development Corporation (MEDC) has been known to require lawmakers to sign NDAs for access to details on projects that seek state incentives.
Representatives Steve Carra (R-Three Rivers) and Dylan Wegela (D-Garden City), who are both critical of state business subsidies, have sponsored HB 4052 and HB 4053. They argue that legislators should be able to discuss the rationale for incentives with their constituents without restrictions.
“This is just a common-sense solution that we should work on this term to bring forward transparency and to make sure that we aren’t doing these behind-closed-doors deals and then subjecting ourselves to silence, not being able to be open with the people from our communities,” Carra stated during a press conference unveiling the legislation.
Wegela emphasized the importance of communication between lawmakers and constituents, saying, “It is fundamental to our democracy that lawmakers are free to communicate with their constituents. NDAs and the signing of them prevent that from happening in terms of these deals.”
He also pointed out the challenges posed by the MEDC’s NDA requirements, noting, “If you were to refuse to sign the NDA, then you’re being expected to vote on the legislation without having the full scope of the details of a project.”
However, the MEDC maintains the position that NDAs are crucial for securing investment opportunities, as premature disclosure of information could deter corporate interest. MEDC Media and Communications Manager Otis McKinley mentioned in an email, “we look to reviewing the legislation and working with our bipartisan partners in the legislature,” adding, “it is important to note that those seeking to make a significant investment will increasingly require NDAs, given the financial and proprietary information being shared.”
McKinley further noted that the Michigan Strategic Fund board publicly votes on incentives during their meetings.
House Speaker Matt Hall (R-Richland Twp.) has appointed Carra and Wegela to spearhead a new corporate subsidies subcommittee. He also suggested that the proposed bills might not be essential, stating, “I happen to agree with them on the non-disclosure agreements and basically the way we’re going to run things from here on out is they can share with me the details of these economic development deals or the deals won’t happen. If they want to hide behind their NDAs and never tell us what the details are, they just won’t get their projects funded.”
MPRN’s Colin Jackson contributed to this report.
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