The Michigan departments of Agriculture (MDA) and Treasury today released
information on Public Act 231, which amends the Commercial Rehabilitation Act, a
new tool geared to support grocery store development and give citizens better
access to fresh food through tax incentives. Under the program, certain retail
food establishments that expand, improve, or open in underserved areas may
request that those improvements not be taxed for up to 10 years. It is estimated
PA 231 has the potential to generate economic growth that could lead to
approximately $852 million in sales and 3,020 additional jobs in Michigan.
Underserved areas can be found in both urban and rural communities. Under the
statute, MDA is required to identify "Underserved Areas" using three criteria
for Census Tracts in the definition: (1) low and moderate income, (2) below
average density of grocery stores and (3) travel limitations to grocery stores.
These areas are characterized by limited access to food retail establishments
that offer fresh and frozen food options such as meat and poultry, fruits &
vegetables, and dairy products. Retail food establishments in underserved areas,
especially in urban and rural settings, face unique operating challenges that
can drive up operating costs. Tax incentives can reduce overhead costs, which
can improve a business's cash flow and overall operation.
"This program provides another incentive to encourage businesses to grow here
in Michigan," said State Treasurer Robert J. Kleine. "The program serves the
dual purpose of creating jobs and broadening access to healthy food items
"MDA is excited to be helping provide Michigan's underserved citizens with
increased accessibility to healthy fresh food choices," said Don Koivisto, MDA
Director. "Not only is this an economic development tool, it also offers the
means to provide fresh food options for those whose previous grocery experiences
were limited to convenience stores."
An analysis by MDA and the U.S. Department of Agriculture (USDA) indicates
that approximately 54 percent of all census tracts in Michigan (2,707 tracts)
meet the criteria for an "underserved area" as defined in PA 231 with consistent
statewide standards and criteria established by MDA.
A recent report by Michigan Food Policy Council recommended that tax
incentives be considered as the state works to address underserved areas and
increase the number of retail outlets with fresh food options. Many studies have
documented increased rates of diet-related diseases, such as diabetes and
obesity, in neighborhoods where citizens lack adequate access to fresh food
"Grocery store development in underserved areas has the potential to create a
positive ripple effect in Michigan, including jobs and community economic
development, while combating one potential factor in the diet-related disease
rates we see today," said Kirsten Simmons, executive director of the Michigan
Food Policy Council.
Public Act 231, which was sponsored by Senator Mark Jansen, received support
from the grocery industry, food system and health experts, local economic
development organizations, and Healthy Kids, Healthy MI.
"As the author of this law, my goal was to give Michigan families better
access to fresh food, to encourage partnerships with local growers, and to spur
economic development," Jansen said. "I appreciate these agencies working with me
to better serve families in communities across the state."
Forms and information on designated underserved areas are available online at
the Michigan Department of Treasury's website at