SB-0802, As Passed Senate, June 27, 2006
HOUSE SUBSTITUTE FOR
SENATE BILL NO. 802
A bill to amend 1995 PA 24, entitled
"Michigan economic growth authority act,"
by amending sections 8 and 10 (MCL 207.808 and 207.810), section 8
as amended by 2006 PA 117 and section 10 as amended by 2003 PA 248.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 8. (1) After receipt of an application, the authority may
enter into an agreement with an eligible business for a tax credit
under section 9 if the authority determines that all of the
following are met:
(a) Except as provided in subsection (5), the eligible
business creates 1 or more of the following within 12 months of the
expansion or location as determined by the authority:
(i) A minimum of 75 50
qualified new jobs at the facility if
expanding in this state.
(ii) A minimum of 150 100
qualified new jobs at the facility
if locating in this state.
(iii) A minimum of 25 qualified new jobs at the facility if the
facility is located in a neighborhood enterprise zone as determined
under the neighborhood enterprise zone act, 1992 PA 147, MCL
207.771 to 207.786, is located in a renaissance zone under the
Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to
125.2696, or is located in a federally designated empowerment zone,
rural enterprise community, or enterprise community.
(iv) A minimum of 5 qualified new jobs at the facility if the
eligible business is a qualified high-technology business.
(v) A minimum of 5 qualified new jobs at the facility if the
eligible business is a rural business.
(b) Except as provided in subsection (5), the eligible
business agrees to maintain 1 or more of the following for each
year that a credit is authorized under this act:
(i) A minimum of 75 50
qualified new jobs at the facility if
expanding in this state.
(ii) A minimum of 150 100
qualified new jobs at the facility
if locating in this state.
(iii) A minimum of 25 qualified new jobs at the facility if the
facility is located in a neighborhood enterprise zone as determined
under the neighborhood enterprise zone act, 1992 PA 147, MCL
207.771 to 207.786, is located in a renaissance zone under the
Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to
125.2696, or is located in a federally designated empowerment zone,
rural enterprise community, or enterprise community.
(iv) If the eligible business is a qualified high-technology
business, all of the following apply:
(A) A minimum of 5 qualified new jobs at the facility.
(B) A minimum of 25 qualified new jobs at the facility within
5 years after the date of the expansion or location as determined
by the authority and a minimum of 25 qualified new jobs at the
facility each year thereafter for which a credit is authorized
under this act.
(v) If the eligible business is a rural business, all of the
following apply:
(A) A minimum of 5 qualified new jobs at the facility.
(B) A minimum of 25 qualified new jobs at the facility within
5 years after the date of the expansion or location as determined
by the authority.
(c) Except as provided in subsection (5) and as otherwise
provided in this subdivision, in addition to the jobs specified in
subdivision (b), the eligible business, if already located within
this state, agrees to maintain a number of full-time jobs equal to
or greater than the number of full-time jobs it maintained in this
state prior to the expansion, as determined by the authority. After
an eligible business has entered into a written agreement as
provided in subsection (2), the authority may adjust the number of
full-time jobs required to be maintained by the authorized business
under this subdivision, in order to adjust for decreases in full-
time jobs in the authorized business in this state due to the
divestiture of operations, provided a single other person continues
to maintain those full-time jobs in this state. The authority shall
not approve a reduction in the number of full-time jobs to be
maintained unless the authority has determined that it can monitor
the maintenance of the full-time jobs in this state by the other
person, and the authorized business agrees in writing that the
continued maintenance of the full-time jobs in this state by the
other person, as determined by the authority, is a condition of
receiving tax credits under the written agreement. A full-time job
maintained by another person under this subdivision, that otherwise
meets the requirements of section 3(i), shall be considered a full-
time job, notwithstanding the requirement that a full-time job be
performed by an individual employed by an authorized business, or
an employee leasing company or professional employer organization
on behalf of an authorized business.
(d) Except as otherwise provided in this subdivision, the
average wage paid for all retained jobs and qualified new jobs is
equal to or greater than 150% of the federal minimum wage. However,
if the eligible business is a qualified high-technology business,
then the average wage paid for all qualified new jobs is equal to
or
greater than 400% 300% of the federal minimum wage.
(e) Except for a qualified high-technology business, the
expansion, retention, or location of the eligible business will not
occur in this state without the tax credits offered under this act.
(f) Except for an eligible business described in subsection
(5)(b)(ii), the local governmental unit in which the eligible
business will expand, be located, or maintain retained jobs, or a
local economic development corporation or similar entity, will make
a staff, financial, or economic commitment to the eligible business
for the expansion, retention, or location.
(g) The financial statements of the eligible business
indicated that it is financially sound or has submitted a chapter
11 plan of reorganization to the bankruptcy court and that its
plans for the expansion, retention, or location are economically
sound.
(h) Except for an eligible business described in subsection
(5)(c), the eligible business has not begun construction of the
facility.
(i) The expansion, retention, or location of the eligible
business will benefit the people of this state by increasing
opportunities for employment and by strengthening the economy of
this state.
(j) The tax credits offered under this act are an incentive to
expand, retain, or locate the eligible business in Michigan and
address the competitive disadvantages with sites outside this
state.
(k) A cost/benefit analysis reveals that authorizing the
eligible business to receive tax credits under this act will result
in an overall positive fiscal impact to the state.
(l) If feasible, as determined by the authority, in locating
the facility, the authorized business reuses or redevelops property
that was previously used for an industrial or commercial purpose.
(m) If the eligible business is a qualified high-technology
business described in section 3(m)(i), the eligible business agrees
that not less than 25% of the total operating expenses of the
business will be maintained for research and development for the
first 3 years of the written agreement.
(2) If the authority determines that the requirements of
subsection (1) or (5) have been met, the authority shall determine
the amount and duration of tax credits to be authorized under
section 9, and shall enter into a written agreement as provided in
this section. The duration of the tax credits shall not exceed 20
years or for an authorized business that is a distressed business,
3 years. In determining the amount and duration of tax credits
authorized, the authority shall consider the following factors:
(a) The number of qualified new jobs to be created or retained
jobs to be maintained.
(b) The average wage level of the qualified new jobs or
retained jobs relative to the average wage paid by private entities
in the county in which the facility is located.
(c) The total capital investment or new capital investment the
eligible business will make.
(d) The cost differential to the business between expanding,
locating, or retaining new jobs in Michigan and a site outside of
Michigan.
(e) The potential impact of the expansion, retention, or
location on the economy of Michigan.
(f) The cost of the credit under section 9, the staff,
financial, or economic assistance provided by the local government
unit, or local economic development corporation or similar entity,
and the value of assistance otherwise provided by this state.
(3) A written agreement between an eligible business and the
authority shall include, but need not be limited to, all of the
following:
(a) A description of the business expansion, retention, or
location that is the subject of the agreement.
(b) Conditions upon which the authorized business designation
is made.
(c) A statement by the eligible business that a violation of
the written agreement may result in the revocation of the
designation as an authorized business and the loss or reduction of
future credits under section 9.
(d) A statement by the eligible business that a
misrepresentation in the application may result in the revocation
of the designation as an authorized business and the refund of
credits received under section 9.
(e) A method for measuring full-time jobs before and after an
expansion, retention, or location of an authorized business in this
state.
(f) A written certification from the eligible business
regarding all of the following:
(i) The eligible business will follow a competitive bid process
for the construction, rehabilitation, development, or renovation of
the facility, and that this process will be open to all Michigan
residents and firms. The eligible business may not discriminate
against any contractor on the basis of its affiliation or
nonaffiliation with any collective bargaining organization.
(ii) The eligible business will make a good faith effort to
employ, if qualified, Michigan residents at the facility.
(iii) The eligible business will make a good faith effort to
employ or contract with Michigan residents and firms to construct,
rehabilitate, develop, or renovate the facility.
(iv) The eligible business is encouraged to make a good faith
effort to utilize Michigan-based suppliers and vendors when
purchasing goods and services.
(g) A condition that if the eligible business qualified under
subsection (5)(b)(ii) and met the subsection (1)(g) requirement by
filing a chapter 11 plan of reorganization, the plan must be
approved by the bankruptcy court within 2 years of the date of the
agreement or the agreement is rescinded.
(4) Upon execution of a written agreement as provided in this
section, an eligible business is an authorized business.
(5) After receipt of an application, the authority may enter
into a written agreement, which shall include a repayment provision
of all or a portion of the credits under section 9 for a violation
of the written agreement, with an eligible business that meets 1 or
more of the following criteria:
(a) Is located in this state on the date of the application,
makes new capital investment of $250,000,000.00 in this state, and
maintains 500 retained jobs, as determined by the authority.
(b) Meets 1 or more of the following criteria:
(i) Relocates production of a product to this state after the
date of the application, makes capital investment of
$500,000,000.00 in this state, and maintains 500 retained jobs, as
determined by the authority.
(ii) Maintains 150 retained jobs at a facility, maintains 1,000
or more full-time jobs in this state, and makes new capital
investment in this state.
(iii) Is located in this state on the date of the application,
maintains at least 100 retained jobs at a single facility, and
agrees to make new capital investment at that facility equal to the
greater of $100,000.00 per retained job maintained at that facility
or $10,000,000.00 to be completed or contracted for not later than
December 31, 2007.
(iv) Maintains 300 retained jobs at a facility; is
a rural
business;
the facility is at risk of being closed and if it
were
to close, the work would go to a location outside this state, as
determined by the authority; new management or new ownership is
proposed for the facility that is committed to improve the
viability of the facility; and the tax credits offered under this
act are necessary for the facility to maintain operations. The
authority may not enter into a written agreement under this
subparagraph
after December 31, 2006 2007. Of the written
agreements entered into under this subparagraph, the authority may
enter
into 1 3 written agreement agreements under this
subparagraph
that is are excluded from the requirements of
subsection (1)(e), (f), (g), (h), (j), and (k) if the authority
considers it in the public interest and if the eligible business
would have met the requirements of subsection (1)(e), (i), (j), and
(k) within the immediately preceding 6 months from the signing of
the written agreement for a tax credit.
(v) Maintains 100 retained jobs at a facility; is a rural
business; the facility is at risk of being closed and if it were to
close, the work would go to a location outside this state, as
determined by the authority; new management or new ownership is
proposed for the facility that is committed to improve the
viability of the facility; and the tax credits offered under this
act are necessary for the facility to maintain operations. The
authority may not enter into a written agreement under this
subparagraph after December 31, 2007. Of the written agreements
entered into under this subparagraph, the authority may enter into
3 written agreements under this subparagraph that are excluded from
the requirements of subsection (1)(e), (f), (g), (h), (j), and (k)
if the authority considers it in the public interest and if the
eligible business would have met the requirements of subsection
(1)(e), (i), (j), and (k) within the immediately preceding 6 months
from the signing of the written agreement for a tax credit.
(vi) (v) Maintains 175 retained jobs and makes new capital
investment at a facility in a county with a population of not less
than 7,500 but not greater than 8,000.
(vii) Is located in this state on the date of the application,
maintains at least 675 retained jobs at a facility, agrees to
create 400 new jobs, and agrees to make a new capital investment of
at least $45,000,000.00 to be completed or contracted for not later
than December 31, 2007. Of the written agreements entered into
under this subparagraph, the authority may enter into 1 written
agreement under this subparagraph that is excluded from the
requirements of subsection (1)(h) if the authority considers it in
the public interest.
(c) Is a distressed business.
(6) The authority shall not execute more than 25 new written
agreements each year for eligible businesses that are not qualified
high-technology businesses, distressed businesses, or rural
businesses. If the authority executes less than 25 new written
agreements in a year, the authority may carry forward for 1 year
only the difference between 25 and the number of new agreements
executed in the immediately preceding year.
(7) The authority shall not execute more than 50 new written
agreements each year for eligible businesses that are qualified
high-technology
businesses or rural business. Only
5 25 of
the 50
written agreements for businesses that are qualified high-
technology businesses or rural business may be executed each year
for qualified rural businesses.
(8) The authority shall not execute more than 20 new written
agreements each year for eligible businesses that are distressed
businesses. The authority shall not execute more than 5 of the
written agreements described in this subsection each year for
distressed businesses that had 1,000 or more full-time jobs at a
facility 4 years immediately preceding the application to the
authority under this act.
Sec. 10. The authority shall report to both houses of the
legislature yearly on October 1 on the activities of the authority.
The report shall include, but is not limited to, all of the
following:
(a) The total amount of capital investment attracted under
this act.
(b) The total number of qualified new jobs created under this
act.
(c) The total number of new written agreements.
(d) Name and location of all authorized businesses and the
names and addresses of all of the following:
(i) The directors and officers of the corporation if the
authorized business is a corporation.
(ii) The partners of the partnership or limited liability
partnership if the authorized business is a partnership or limited
liability partnership.
(iii) The members of the limited liability company if the
authorized business is a limited liability company.
(e) The amount and duration of the tax credit separately for
each authorized business.
(f) The amount of any fee, donation, or other payment of any
kind from the authorized business to the Michigan economic
development corporation or a foundation or fund associated with the
Michigan economic development corporation paid or made in the
previous reporting year end or, if it is the first reporting year
for the authorized business, for the immediately preceding 3
calendar years.
(g) The total number of new written agreements entered into
under section 8(5) and, of those written agreements, the number in
which the board determined that it was in the public interest to
waive 1 or more of the requirements of section 8(1).
Enacting section 1. This amendatory act does not take effect
unless House Bill No. 6035 of the 93rd Legislature is enacted into
law.