HB-5412, As Passed Senate, December 13, 2007

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5412

     A bill to amend 2007 PA 36, entitled

"Michigan business tax act,"

(MCL 208.1101 to 208.1601) by adding section 453.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 453. (1) An eligible taxpayer may claim a credit against

the tax imposed by this act equal to the eligible taxpayer's tax

liability attributable to the activities as an eligible taxpayer

for the tax year after claiming any other credits allowed under

this act multiplied by a fraction, the numerator of which is the

total activity of the private equity fund manager conducted in this

state during the tax year and the denominator of which is the total

activity of the private equity fund manager conducted everywhere

during the tax year.

     (2) For purposes of this section, the location of the activity

of the private equity fund manager is based on the location of the

office from which the fund manager conducts management activity for

the eligible taxpayer.

     (3) As used in this section:

     (a) "Accredited investor" means that term as defined under

section 2 of the securities act of 1933, 15 USC 77b.

     (b) "Eligible taxpayer" means a taxpayer that is a private

equity fund which serves as a conduit for the investment of private

securities not listed on a public exchange by accredited investors

or qualified purchasers at any time during which the investment is

acquired or subsequently used to claim the credit under this

section.

     (c) "Private equity fund manager" means the person or persons

responsible for the management of the investments of the eligible

taxpayer.

     (d) "Qualified purchaser" means that term as defined under

section 2 of the investment company act of 1940, 15 USC 80a-2.

     Enacting section 1. This amendatory act takes effect January

1, 2008.