By KEVIN WALKER
Michigan Correspondent

LANSING, Mich. — A bill that would expand agricultural renaissance zones in Michigan appears to be on its way to passage.

State House Bill 5086, which would expand to 40 the number of tax-favored ag renaissance zones, passed last June by a vote of 106-2. Since then, the bill made it out of the state Senate agriculture committee and, according to its sponsor Rep. Mike Simpson (D-Jackson), is on its way to the Senate floor and passage.

“My understanding is that this bill has a green light,” he said. “It will get a full vote on the Senate floor.”

Simpson also said of Gov. Jennifer Granholm, “I would anticipate that she would sign it.” He added the administration has been supportive of the legislation all along.

The legislation will not affect the state budget right now, he said, because expansion of the ag renaissance zones will only increase the amount of business in the state rather than provide more tax breaks to businesses already here.

The Michigan Renaissance Zone Act of 1996 provides for 30 agricultural processing zones. The law works through state level boards that propose an agricultural zone, which the local government then looks at to see if it approves. If it does, then the zone can go through.

According to a Senate Fiscal Agency analysis, the bill would further reduce state and local tax revenues and increase school aid fund spending. The exact amount of the increased spending would depend on the size and characteristics of the property in the new ag renaissance zone.

Right now property inside such a zone is exempt from local property taxes and the state education tax. Also, businesses and individuals are exempt from the Michigan business tax and individual income taxes.

The law requires the state to reimburse many of the property taxes lost to the exemptions. These include revenue to the intermediate school districts, local school districts, community colleges, public libraries and the school aid fund.