LANSING – The Michigan Departments of Agriculture (MDA) and Treasury this week released information on Public Act 231, a new tool geared to support grocery store development and give citizens better access to fresh food through tax incentives. Under Public Act 231, certain retail food establishments that expand, improve or open in underserved areas may request those improvements not be taxed for up to 10 years. It’s 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. These areas are characterized by limited access to food retail establishments that offer fresh food options such as meat and poultry, fruits & veggies, 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 reduce business overhead costs, which can help improve working cash flow and overall business operation.

“This provides yet another incentive to encourage businesses to grow in Michigan,” said State Treasurer Robert J. Kleine. “The program will serve a dual purpose of creating jobs and broadening access to food items healthy families need in underserved areas.”

“PA 231 holds the potential to be a tremendous economic development tool creating thousands of new jobs, but offers also the means to provide fresh food options for those whose previous grocery experiences were limited to convenience stores,” said Don Koivisto, MDA Director. “MDA is excited to be helping provide Michigan’s underserved citizens with increased accessibility to healthy fresh food choices.”

An analysis by MDA and U.S. Department of Agriculture (USDA) National Agricultural Statistics Service 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 Michigan Food Policy Council report recommended tax incentives be explored as the state begins to address this complex issue 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 options.

“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 coordinator 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.

Forms and information on designated underserved areas are available online at the Michigan Department of Treasury’s website at www.michigan.gov/treasury.