January 30, 2007, Introduced by Reps. Leland, Young, Polidori, Kathleen Law, Hopgood, Johnson, Meadows, Gillard, Wenke and Sheltrown and referred to the Committee on Commerce.
A bill to amend 1975 PA 228, entitled
"Single business tax act,"
by amending section 38g (MCL 208.38g), as amended by 2006 PA 240.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 38g. (1) Subject to the criteria under this section, an
eligible taxpayer may claim a credit against the tax imposed by
this act as determined under subsections (20) to (25); and subject
to the criteria under this section, a qualified taxpayer that has a
preapproval letter issued after December 31, 1999 and before
January 1, 2008, provided that the project is completed not more
than 5 years after the preapproval letter for the project is
issued, or an assignee under subsection (17) or (18) or section 35e
may claim a credit that has been approved under subsection (2),
(3), or (33) against the tax imposed by this act equal to either of
the following:
(a) If the total of all credits for a project is $1,000,000.00
or less, 10% of the cost of the qualified taxpayer's eligible
investment paid or accrued by the qualified taxpayer on an eligible
property provided that the project does not exceed the amount
stated in the preapproval letter. If eligible investment exceeds
the amount of eligible investment in the preapproval letter for
that project, the total of all credits for the project shall not
exceed the total of all credits on the certificate of completion.
(b) If the total of all credits for a project is more than
$1,000,000.00 but $30,000,000.00 or less and, except as provided in
subsection (5)(b), the project is located in a qualified local
governmental unit, a percentage as determined by the Michigan
economic growth authority not to exceed 10% of the cost of the
qualified taxpayer's eligible investment as determined under
subsection (8) paid or accrued by the qualified taxpayer on an
eligible property. If eligible investment exceeds the amount of
eligible investment in the preapproval letter for that project, the
total of all credits for the project shall not exceed the total of
all credits on the certificate of completion.
(2) If the cost of a project will be for more than
$2,000,000.00 but $10,000,000.00 or less, a qualified taxpayer
shall apply to the Michigan economic growth authority for approval
of the project under this subsection. An application under this
subsection shall state whether the project is a multiphase project.
The chairperson of the Michigan economic growth authority or his or
her designee is authorized to approve an application or project
under this subsection. Only the chairperson of the Michigan
economic growth authority is authorized to deny an application or
project under this subsection. A project shall be approved or
denied not more than 45 days after receipt of the application. If
the chairperson of the Michigan economic growth authority or his or
her designee does not approve or deny an application within 45 days
after the application is received by the Michigan economic growth
authority, the application is considered approved as written. The
total of all credits for all projects approved under this
subsection shall not exceed $30,000,000.00 in any calendar year.
After
the first full calendar year after the effective date of the
amendatory
act that added subsection (33) April
10, 2006, if the
authority approves a total of all credits for all projects under
this subsection of less than $30,000,000.00 in a calendar year, the
authority may carry forward for 1 year only the difference between
$30,000,000.00 and the total of all credits for all projects
approved under this subsection in the immediately preceding
calendar year. The criteria in subsection (6) shall be used when
approving projects under this subsection. When approving projects
under this subsection, priority shall be given to projects on a
facility. The total of all credits for an approved project under
this subsection shall not exceed $1,000,000.00. A taxpayer may
apply under this subsection instead of subsection (3) for approval
of a project that will be for more than $10,000,000.00 but the
total of all credits for that project shall not exceed
$1,000,000.00. If the chairperson of the Michigan economic growth
authority or his or her designee approves a project under this
subsection, the chairperson of the Michigan economic growth
authority or his or her designee shall issue a preapproval letter
that states that the taxpayer is a qualified taxpayer; the maximum
total eligible investment for the project on which credits may be
claimed and the maximum total of all credits for the project when
the project is completed and a certificate of completion is issued;
and the project number assigned by the Michigan economic growth
authority. If a project is denied under this subsection, a taxpayer
is not prohibited from subsequently applying under this subsection
or subsection (3) for the same project or for another project.
(3) If the cost of a project will be for more than
$10,000,000.00 and, except as provided in subsection (5)(b), the
project is located in a qualified local governmental unit, a
qualified taxpayer shall apply to the Michigan economic growth
authority for approval of the project. An application under this
subsection shall state whether the project is a multiphase project.
The Michigan economic growth authority shall approve or deny the
project not more than 65 days after receipt of the application. A
project under this subsection shall not be approved without the
concurrence of the state treasurer. If the Michigan economic growth
authority does not approve or deny the application within 65 days
after it receives the application, the Michigan economic growth
authority shall send the application to the state treasurer. The
state treasurer shall approve or deny the application within 5 days
after receipt of the application. If the state treasurer does not
deny the application within the 5 days after receipt of the
application, the application is considered approved. The Michigan
economic growth authority shall approve a limited number of
projects under this subsection during each calendar year as
provided in subsection (5). The Michigan economic growth authority
shall use the criteria in subsection (6) when approving projects
under this subsection, when determining the total amount of
eligible investment, and when determining the percentage of
eligible investment for the project to be used to calculate a
credit. The total of all credits for an approved project under this
subsection shall not exceed the amount designated in the
preapproval letter for that project. If the Michigan economic
growth authority approves a project under this subsection, the
Michigan economic growth authority shall issue a preapproval letter
that states that the taxpayer is a qualified taxpayer; the
percentage of eligible investment for the project determined by the
Michigan economic growth authority for purposes of subsection
(1)(b); the maximum total eligible investment for the project on
which credits may be claimed and the maximum total of all credits
for the project when the project is completed and a certificate of
completion is issued; and the project number assigned by the
Michigan economic growth authority. The Michigan economic growth
authority shall send a copy of the preapproval letter to the
department. If a project is denied under this subsection, a
taxpayer is not prohibited from subsequently applying under this
subsection or subsection (2) for the same project or for another
project.
(4) If the project is on property that is functionally
obsolete, the taxpayer shall include, with the application, an
affidavit signed by a level 3 or level 4 assessor, that states that
it is the assessor's expert opinion that the property is
functionally obsolete and the underlying basis for that opinion.
(5) The Michigan economic growth authority may approve not
more than 17 projects each calendar year under subsection (3), and
the following limitations apply:
(a) Of the 17 projects allowed under this subsection, the
total of all credits for each project may be more than
$10,000,000.00 but $30,000,000.00 or less for up to 2 projects.
(b) Of the 17 projects allowed under this subsection, up to 3
projects may be approved for projects that are not in a qualified
local governmental unit if the property is a facility for which
eligible activities are identified in a brownfield plan or, for 1
of the 3 projects, if the property is not a facility but is
functionally obsolete or blighted, property identified in a
brownfield plan. For purposes of this subdivision, a facility
includes a building or complex of buildings that was used by a
state or federal agency and that is no longer being used for the
purpose for which it was used by the state or federal agency.
(c) Of the 2 projects allowed under subdivision (a), 1 may be
a project that also qualifies under subdivision (b).
(6) The Michigan economic growth authority shall review all
applications for projects under subsection (3) and, if an
application is approved, shall determine the maximum total of all
credits for that project. Before approving a project for which the
total of all credits will be more than $10,000,000.00 but
$30,000,000.00 or less only, the Michigan economic growth authority
shall determine that the project would not occur in this state
without the tax credit offered under subsection (3), except that
the Michigan economic growth authority may approve 1 project the
construction of which began after January 1, 2000 and before
January 1, 2001 without determining that the eligible investment
would not occur in this state without the tax credit offered under
this section. The Michigan economic growth authority shall consider
the following criteria to the extent reasonably applicable to the
type of project proposed when approving a project under subsection
(3) and the chairperson of the Michigan economic growth authority
or his or her designee shall consider the following criteria to the
extent reasonably applicable to the type of project proposed when
approving a project under subsection (2) or (33) or when
considering an amendment to a project under subsection (31):
(a) The overall benefit to the public.
(b) The extent of reuse of vacant buildings and redevelopment
of blighted property.
(c) Creation of jobs.
(d) Whether the eligible property is in an area of high
unemployment.
(e) The level and extent of contamination alleviated by the
qualified taxpayer's eligible activities to the extent known to the
qualified taxpayer.
(f) The level of private sector contribution.
(g) The cost gap that exists between the site and a similar
greenfield site as determined by the Michigan economic growth
authority.
(h) If the qualified taxpayer is moving from another location
in this state, whether the move will create a brownfield.
(i) Whether the financial statements of the qualified taxpayer
indicate that it is financially sound and that the project is
economically sound.
(j) Any other criteria that the Michigan economic growth
authority or the chairperson of the Michigan economic growth
authority, as applicable, considers appropriate for the
determination of eligibility under subsection (2) or (3).
(7) A qualified taxpayer may apply for projects under
subsection (2), (3), or (33) for eligible investment on more than 1
eligible property in a tax year. Each project approved and each
project for which a certificate of completion is issued under this
section shall be for eligible investment on 1 eligible property.
(8) When a project under subsection (2), (3), or (33) is
completed, the taxpayer shall submit documentation that the project
is completed, an accounting of the cost of the project, the
eligible investment of each taxpayer if there is more than 1
taxpayer eligible for a credit for the project, and, if the
taxpayer is not the owner or lessee of the eligible property on
which the eligible investment was made at the time the project is
completed, that the taxpayer was the owner or lessee of that
eligible property when all eligible investment of the taxpayer was
made. The chairperson of the Michigan economic growth authority or
his or her designee, for projects approved under subsection (2) or
(33), or the Michigan economic growth authority, for projects
approved under subsection (3), shall verify that the project is
completed. The Michigan economic growth authority shall conduct an
on-site inspection as part of the verification process for projects
approved under subsection (3). When the completion of the project
is verified, a certificate of completion shall be issued to each
qualified taxpayer that has made eligible investment on that
eligible property. The certificate of completion shall state the
total amount of all credits for the project and that total shall
not exceed the maximum total of all credits listed in the
preapproval letter for the project under subsection (2) or (3) or
section 35c as applicable and shall state all of the following:
(a) That the taxpayer is a qualified taxpayer.
(b) The total cost of the project and the eligible investment
of each qualified taxpayer.
(c) Each qualified taxpayer's credit amount.
(d) The qualified taxpayer's federal employer identification
number or the Michigan treasury number assigned to the taxpayer.
(e) The project number.
(f) For a project approved under subsection (3) for which the
total of all credits is more than $10,000,000.00 but $30,000,000.00
or less, the total of all credits and the schedule on which the
annual credit amount shall be claimed by the qualified taxpayer.
(g) For a multiphase project under subsection (32), the amount
of each credit assigned and the amount of all credits claimed in
each tax year before the year in which the project is completed.
(9) Except as otherwise provided in this section, qualified
taxpayers shall claim credits under subsections (2), (3), and (33)
in the tax year in which the certificate of completion is issued.
For a project approved under subsection (3) for which the total of
all credits is more than $10,000,000.00 but $30,000,000.00 or less,
the qualified taxpayer shall claim 10% of its approved credit each
year for 10 years. A credit assigned based on a multiphase project
shall be claimed in the year in which the credit is assigned.
(10) The cost of eligible investment for leased machinery,
equipment, or fixtures is the cost of that property had the
property been purchased minus the lessor's estimate, made at the
time the lease is entered into, of the market value the property
will have at the end of the lease. A credit for property described
in this subsection is allowed only if the cost of that property had
the property been purchased and the lessor's estimate of the market
value at the end of the lease are provided to the Michigan economic
growth authority.
(11) For credits under subsections (2) and (3), credits
claimed by a lessee of eligible property are subject to the total
of all credits limitation under this section.
(12) Each qualified taxpayer and assignee under subsection
(17) or (18) or section 35e that claims a credit under subsection
(1)(a) or (b) or (33) shall attach a copy of the certificate of
completion and, if the credit was assigned, a copy of the
assignment form provided for under this section to the annual
return filed under this act on which the credit under subsection
(2), (3), or (33) is claimed. An assignee of a credit based on a
multiphase project shall attach a copy of the assignment form
provided for under this section and the component completion
certificate provided for in subsection (32) to the annual return
filed under this act on which the credit is claimed but is not
required to file a copy of a certificate of completion.
(13) Except as otherwise provided in this subsection or
subsection (15), (17), (18), or (32) or section 35e, a credit under
subsection (2), (3), or (33) shall be claimed in the tax year in
which the certificate of completion is issued to the qualified
taxpayer. For a project described in subsection (8)(f) for which a
schedule for claiming annual credit amounts is designated on the
certificate of completion by the Michigan economic growth
authority, the annual credit amount shall be claimed in the tax
year specified on the certificate of completion.
(14) The credits approved under this section shall be
calculated after application of all other credits allowed under
this act. The credits under subsections (2), (3), and (33) shall be
calculated before the calculation of credits under subsections (20)
to (25) and before the credits under sections 37c and 37d.
(15) If the credit allowed under subsection (2), (3), or (33)
for the tax year and any unused carryforward of the credit allowed
under subsection (2), (3), or (33) exceed the qualified taxpayer's
or assignee's tax liability for the tax year, that portion that
exceeds the tax liability for the tax year shall not be refunded
but may be carried forward to offset tax liability in subsequent
tax years for 10 years or until used up, whichever occurs first.
Except as otherwise provided in this subsection, the maximum time
allowed under the carryforward provisions under this subsection
begins with the tax year in which the certificate of completion is
issued to the qualified taxpayer. If the qualified taxpayer assigns
all or any portion of its credit approved under subsection (2),
(3), or (33), the maximum time allowed under the carryforward
provisions for an assignee begins to run with the tax year in which
the assignment is made and the assignee first claims a credit,
which shall be the same tax year. The maximum time allowed under
the carryforward provisions for an annual credit amount for a
credit allowed under subsection (3) begins to run in the tax year
for which the annual credit amount is designated on the certificate
of completion issued under this section.
(16) If a project or credit under subsection (2), (3), or (33)
is for the addition of personal property, if the cost of that
personal property is used to calculate a credit under subsection
(2), (3), or (33), and if the personal property is sold or disposed
of or transferred from eligible property to any other location, the
qualified taxpayer that sold, disposed of, or transferred the
personal property shall add the same percentage as determined
pursuant to subsection (1) of the federal basis of the personal
property used for determining gain or loss as of the date of the
sale, disposition, or transfer to the qualified taxpayer's tax
liability after application of all credits under this act for the
tax year in which the sale, disposition, or transfer occurs. If a
qualified taxpayer has an unused carryforward of a credit under
subsection (2), (3), or (33), the amount otherwise added under this
subsection to the qualified taxpayer's tax liability may instead be
used to reduce the qualified taxpayer's carryforward under
subsection (15).
(17) For credits under subsection (2), (3), or (33) for
projects for which a certificate of completion is issued before
January 1, 2006 and except as otherwise provided in this
subsection, if a qualified taxpayer pays or accrues eligible
investment on or to an eligible property that is leased for a
minimum term of 10 years or sold to another taxpayer for use in a
business activity, the qualified taxpayer may assign all or a
portion of the credit based on that eligible investment to the
lessee or purchaser of that eligible property. A credit assignment
under this subsection shall only be made to a taxpayer that when
the assignment is complete will be a qualified taxpayer. All credit
assignments under this subsection are irrevocable and, except for a
credit based on a multiphase project, shall be made in the tax year
in which the certificate of completion is issued, unless the
assignee is an unknown lessee. If a qualified taxpayer wishes to
assign all or a portion of its credit to a lessee but the lessee is
unknown in the tax year in which the certificate of completion is
issued, the qualified taxpayer may delay claiming and assigning the
credit until the first tax year in which the lessee is known. A
qualified taxpayer may claim a portion of a credit and assign the
remaining credit amount. Except as otherwise provided in this
subsection, if the qualified taxpayer both claims and assigns
portions of the credit, the qualified taxpayer shall claim the
portion it claims in the tax year in which the certificate of
completion is issued or for a credit assigned and claimed for a
multiphase project before a certificate of completion is issued,
the taxpayer shall claim the credit in the year in which the credit
is assigned. If a qualified taxpayer assigns all or a portion of
the credit and the eligible property is leased to more than 1
taxpayer, the qualified taxpayer shall determine the amount of
credit assigned to each lessee. A lessee shall not subsequently
assign a credit or any portion of a credit assigned under this
subsection. A purchaser may subsequently assign a credit or any
portion of a credit assigned to the purchaser under this subsection
to a lessee of the eligible property. The credit assignment under
this subsection shall be made on a form prescribed by the Michigan
economic growth authority. The qualified taxpayer shall send a copy
of the completed assignment form to the Michigan economic growth
authority in the tax year in which the assignment is made. The
assignee shall attach a copy of the completed assignment form to
its annual return required to be filed under this act, for the tax
year in which the assignment is made and the assignee first claims
a credit, which shall be the same tax year. In addition to all
other procedures under this subsection, the following apply if the
total of all credits for a project is more than $10,000,000.00 but
$30,000,000.00 or less:
(a) The credit shall be assigned based on the schedule
contained in the certificate of completion.
(b) If the qualified taxpayer assigns all or a portion of the
credit amount, the qualified taxpayer shall assign the annual
credit amount for each tax year separately.
(c) More than 1 annual credit amount may be assigned to any 1
assignee and the qualified taxpayer may assign all or a portion of
each annual credit amount to any assignee.
(d) The qualified taxpayer shall not assign more than the
annual credit amount for each tax year.
(18) Except as otherwise provided in this subsection, for
projects for which a certificate of completion is issued before
January 1, 2006, if a qualified taxpayer is a partnership, limited
liability company, or subchapter S corporation, the qualified
taxpayer may assign all or a portion of a credit allowed under
subsection (2) or (3) to its partners, members, or shareholders,
based on their proportionate share of ownership of the partnership,
limited liability company, or subchapter S corporation or based on
an alternative method approved by the Michigan economic growth
authority. A credit assignment under this subsection is irrevocable
and, except for a credit assignment based on a multiphase project,
shall be made in the tax year in which a certificate of completion
is issued. A qualified taxpayer may claim a portion of a credit and
assign the remaining credit amount. If the qualified taxpayer both
claims and assigns portions of the credit, the qualified taxpayer
shall claim the portion it claims in the tax year in which a
certificate of completion is issued. A partner, member, or
shareholder that is an assignee shall not subsequently assign a
credit or any portion of a credit assigned under this subsection.
The credit assignment under this subsection shall be made on a form
prescribed by the Michigan economic growth authority. The qualified
taxpayer shall send a copy of the completed assignment form to the
Michigan economic growth authority in the tax year in which the
assignment is made. A partner, member, or shareholder who is an
assignee shall attach a copy of the completed assignment form to
its annual return required under this act, for the tax year in
which the assignment is made and the assignee first claims a
credit, which shall be the same tax year. A credit assignment based
on a credit for a component of a multiphase project that is
completed before January 1, 2006 shall be made under this
subsection. A credit assignment based on a credit for a component
of a multiphase project that is completed on or after January 1,
2006 may be made under this section or section 35e. In addition to
all other procedures under this subsection, the following apply if
the total of all credits for a project is more than $10,000,000.00
but $30,000,000.00 or less:
(a) The credit shall be assigned based on the schedule
contained in the certificate of completion.
(b) If the qualified taxpayer assigns all or a portion of the
credit amount, the qualified taxpayer shall assign the annual
credit amount for each tax year separately.
(c) More than 1 annual credit amount may be assigned to any 1
assignee and the qualified taxpayer may assign all or a portion of
each annual credit amount to any assignee.
(d) The qualified taxpayer shall not assign more than the
annual credit amount for each tax year.
(19) A qualified taxpayer or assignee under subsection (17) or
(18) shall not claim a credit under subsection (1)(a) or (b) based
on eligible investment on which a credit claimed under section 38d
was based.
(20) In addition to the other credits allowed under this
section and sections 37c and 37d, for tax years that begin after
December 31, 1999 and for a period of time not to exceed 20 years
as determined by the Michigan economic growth authority, an
eligible taxpayer may credit against the tax imposed by section 31
the amount certified each year by the Michigan economic growth
authority that is 1 of the following:
(a) For an eligible business under section 8(5)(a) of the
Michigan economic growth authority act, 1995 PA 24, MCL 207.808, an
amount that is not more than 50% of 1 or both of the following as
determined by the Michigan economic growth authority:
(i) An amount determined under the Michigan economic growth
authority act, 1995 PA 24, MCL 207.801 to 207.810, that does not
exceed the payroll of the eligible taxpayer attributable to
employees who perform retained jobs multiplied by the tax rate for
the tax year.
(ii) The tax liability attributable to the eligible taxpayer's
business activity multiplied by a fraction the numerator of which
is the ratio of the value of new capital investment to all of the
taxpayer's property located in this state plus the ratio of the
taxpayer's payroll attributable to retained jobs to all of the
taxpayer's payroll in this state and the denominator of which is 2.
(b) For an eligible business under section 8(5)(b) of the
Michigan economic growth authority act, 1995 PA 24, MCL 207.808, an
amount that is not more than 1 or both of the following as
determined by the Michigan economic growth authority:
(i) An amount determined under the Michigan economic growth
authority act, 1995 PA 24, MCL 207.801 to 207.810, that does not
exceed the payroll of the eligible taxpayer attributable to
employees who perform retained jobs multiplied by the tax rate for
the tax year.
(ii) The tax liability attributable to eligible taxpayer's
business activity multiplied by a fraction the numerator of which
is the ratio of the value of capital investment to all of the
taxpayer's property located in this state plus the ratio of the
taxpayer's payroll attributable to retained jobs to all of the
taxpayer's payroll in this state and the denominator of which is 2.
(21) An eligible taxpayer shall not claim a credit under
subsection (20) unless the Michigan economic growth authority has
issued a certificate under section 9 of the Michigan economic
growth authority act, 1995 PA 24, MCL 207.809, to the taxpayer. The
eligible taxpayer shall attach the certificate to the return filed
under this act on which a credit under subsection (20) is claimed.
(22) An affiliated group as defined in this act, a controlled
group of corporations as defined in section 1563 of the internal
revenue code and further described in 26 CFR 1.414(b)-1 and
1.414(c)-1 to 1.414(c)-5, or an entity under common control as
defined by the internal revenue code shall claim only 1 credit
under subsection (20) for each tax year based on each written
agreement whether or not a combined or consolidated return is
filed.
(23) A credit shall not be claimed by a taxpayer under
subsection (20) if the eligible taxpayer's initial certification
under section 9 of the Michigan economic growth authority act, 1995
PA 24, MCL 207.809, is issued after December 31, 2009. If the
Michigan economic growth authority or a designee of the Michigan
economic growth authority requests that a taxpayer who claims the
credit under subsection (20) get a statement prepared by a
certified public accountant verifying that the actual number of new
jobs created is the same number of new jobs used to calculate the
credit under subsection (20), the taxpayer shall get the statement
and attach that statement to its annual return under this act on
which the credit under subsection (20) is claimed.
(24) If the credit allowed under subsection (20)(a)(ii) or
(b)(ii) for the tax year and any unused carryforward of the credit
allowed by subsection (20)(a)(ii) or (b)(ii) exceed the taxpayer's
tax liability for the tax year, that portion that exceeds the tax
liability for the tax year shall not be refunded but may be carried
forward to offset tax liability in subsequent tax years for 10
years or until used up, whichever occurs first.
(25) If the credit allowed under subsection (20)(a)(i) or
(b)(i) exceeds the tax liability of the eligible taxpayer for the
tax year, the excess shall be refunded to the eligible taxpayer.
(26) An eligible taxpayer that claims a credit under
subsection (1)(a), (1)(b), or (33) is not prohibited from claiming
a credit under subsection (20). However, the eligible taxpayer
shall not claim a credit under subsection (1)(a), (1)(b), or (33)
and subsection (20) based on the same costs.
(27) Eligible investment attributable or related to the
operation of a professional sports stadium, and eligible investment
that is associated or affiliated with the operation of a
professional sports stadium, including, but not limited to, the
operation of a parking lot or retail store, shall not be used as a
basis for a credit under subsection (2), (3), or (33). Professional
sports stadium does not include a professional sports stadium that
will no longer be used by a professional sports team on and after
the date that an application related to that professional sports
stadium is filed under subsection (2), (3), or (33).
(28) Eligible investment attributable or related to the
operation of a casino, and eligible investment that is associated
or affiliated with the operation of a casino, including, but not
limited to, the operation of a parking lot, hotel, motel, or retail
store, shall not be used as a basis for a credit under subsection
(2), (3), or (33). As used in this subsection, "casino" means a
casino regulated by this state pursuant to the Michigan gaming
control and revenue act, the Initiated Law of 1996, MCL 432.201 to
432.226.
(29) Eligible investment attributable or related to the
construction of a new landfill or the expansion of an existing
landfill regulated under part 115 of the natural resources and
environmental protection act, 1994 PA 451, MCL 324.11501 to
324.11550, shall not be used as a basis for a credit under
subsection (2), (3), or (33).
(30) The Michigan economic growth authority annually shall
prepare and submit to the house of representatives and senate
committees responsible for tax policy and economic development
issues a report on the credits under subsection (2). The report
shall include, but is not limited to, all of the following:
(a) A listing of the projects under subsection (2) that were
approved in the calendar year.
(b) The total amount of eligible investment for projects
approved under subsection (2) in the calendar year.
(31) If, after a taxpayer's project has been approved and the
taxpayer has received a preapproval letter but before the project
is completed, the taxpayer determines that the project cannot be
completed as preapproved, the taxpayer may petition the Michigan
economic growth authority to amend the project. The total of
eligible investment for the project as amended shall not exceed the
amount allowed in the preapproval letter for that project.
(32) A project under subsection (2), (3), or (33) may be a
multiphase project but, for projects completed before January 1,
2006, only if the project is an industrial or manufacturing
project. If a project is a multiphase project, when each component
of the multiphase project is completed, the taxpayer shall submit
documentation that the component is complete, an accounting of the
cost of the component, and the eligible investment for the
component of each taxpayer eligible for a credit for the project of
which the component is a part to the Michigan economic growth
authority or the designee of the Michigan economic growth
authority, who shall verify that the component is complete. When
the completion of the component is verified, a component completion
certificate shall be issued to the qualified taxpayer which shall
state that the taxpayer is a qualified taxpayer, the credit amount
for the component, the qualified taxpayer's federal employer
identification number or the Michigan treasury number assigned to
the taxpayer, and the project number. The taxpayer may assign all
or part of the credit for a multiphase project as provided in this
section after a component completion certificate for a component is
issued. The qualified taxpayer may transfer ownership of or lease
the completed component and assign a proportionate share of the
credit for the entire project to the qualified taxpayer that is the
new owner or lessee. A multiphase project shall not be divided into
more than 20 components. A component is considered to be completed
when a certificate of occupancy has been issued by the local
municipality in which the project is located for all of the
buildings or facilities that comprise the completed component and a
component completion certificate is issued. A credit assigned based
on a multiphase project shall be claimed by the assignee in the tax
year in which the assignment is made. The total of all credits for
a multiphase project shall not exceed the amount stated in the
preapproval letter for the project under subsection (1). If all
components of a multiphase project are not completed by 10 years
after the date on which the preapproval letter for the project was
issued, the qualified taxpayer that received the preapproval letter
for the project shall pay to the state treasurer, as a penalty, an
amount equal to the sum of all credits claimed and assigned for all
components of the multiphase project and no credits based on that
multiphase project shall be claimed after that date by the
qualified taxpayer or any assignee of the qualified taxpayer. The
penalty under this subsection is subject to interest on the amount
of the credit claimed or assigned determined individually for each
component at the rate in section 23(2) of 1941 PA 122, MCL 205.23,
beginning on the date that the credit for that component was
claimed or assigned. As used in this subsection, "proportionate
share" means the same percentage of the total of all credits for
the project that the qualified investment for the completed
component is of the total qualified investment stated in the
preapproval letter for the entire project.
(33) If the total of all credits for a project is $200,000.00
or less, a qualified taxpayer shall apply to the Michigan economic
growth authority for approval of the project under this subsection.
An application under this subsection shall state whether the
project is a multiphase project. Subject to section 35c, the
chairperson of the Michigan economic growth authority or his or her
designee is authorized to approve an application or project under
this subsection. Only the chairperson of the Michigan economic
growth authority is authorized to deny an application or project
under this subsection. A project shall be approved or denied not
more than 45 days after receipt of the application. If the
chairperson of the Michigan economic growth authority or his or her
designee does not approve or deny the application within 45 days
after the application is received by the Michigan economic growth
authority, the application is considered approved as written. If a
project is denied under this subsection, a taxpayer is not
prohibited from subsequently applying under this subsection for the
same project or for another project. The total of all credits for
all projects approved under this subsection shall not exceed
$10,000,000.00 in any calendar year. After the first full calendar
year
after the effective date of the amendatory act that added this
subsection
April 10, 2006, if the authority approves a total of all
credits for all projects under this subsection of less than
$10,000,000.00 in a calendar year, the authority may carry forward
for 1 year only the difference between $10,000,000.00 and the total
of all credits for all projects under this subsection approved in
the immediately preceding calendar year. If the chairperson of the
Michigan economic growth authority or his or her designee approves
a project under this subsection, the chairperson of the Michigan
economic growth authority or his or her designee shall issue a
preapproval letter that states that the taxpayer is a qualified
taxpayer; the maximum total eligible investment for the project on
which credits may be claimed and the maximum total of all credits
for the project when the project is completed and a certificate of
completion is issued; and the project number assigned by the
Michigan economic growth authority. The Michigan economic growth
authority shall develop and implement the use of the application
form to be used for projects under this subsection. Before the
application form is first used and if the Michigan economic growth
authority substantially changes the form, the Michigan economic
growth authority shall adopt the form or changes by resolution.
After
60 days after the effective date of the amendatory act that
added
this subsection June 9, 2006 and before the Michigan economic
growth authority substantially changes the application form, the
Michigan economic growth authority shall give notice of the
proposed resolution to the secretary of the senate, to the clerk of
the house of representatives, and to each person who requested from
the Michigan economic growth authority in writing or electronically
to be notified regarding proposed resolutions. The notice and
proposed resolution and all attachments shall be published on the
Michigan economic growth authority's internet website. The Michigan
economic growth authority shall hold a public hearing not sooner
than 14 days and not later than 30 days after the date notice of a
proposed resolution is given and offer an opportunity for persons
to present data, views, questions, and arguments. The Michigan
economic growth authority board members or 1 or more persons
designated by the Michigan economic growth authority who have
knowledge of the subject matter of the proposed resolution shall be
present at the public hearing and shall participate in the
discussion of the proposed resolution. The Michigan economic growth
authority may act on the proposed resolution no sooner than 14 days
after the public hearing. The Michigan economic growth authority
shall produce a final decision document that describes the basis
for its decision. The final resolution and all attachments and the
decision document shall be provided to the secretary of the senate
and to the clerk of the house of representatives and shall be
published on the Michigan economic growth authority's internet
website. The notice shall include all of the following:
(a) A copy of the proposed resolution and all attachments.
(b) A statement that any person may express any data, views,
or arguments regarding the proposed resolution.
(c) The address to which written comments may be sent and the
date by which comments must be mailed or electronically
transmitted, which date shall not be restricted to only before the
date of the public hearing.
(d) The date, time, and place of the public hearing.
(34) If this act is repealed for tax years beginning after
December 31, 2007, all of the following apply:
(a) Except as otherwise provided in this subsection, a
qualified taxpayer that has a preapproval letter issued before
January 1, 2007 for a brownfield credit for a project that is
completed after the end of the taxpayer’s last tax year but before
January 1, 2010 or an assignee may claim the brownfield credit
amount that could be claimed for the project for 2008 and 2009
against the taxpayer’s or assignee’s tax liability under this act
on the taxpayer’s or assignee’s timely filed original or amended
annual return filed under this act for the taxpayer’s or assignee’s
last tax year.
(b) Except as otherwise provided in subdivision (e), a credit
under this subsection shall be taken after all other credits the
taxpayer claims for the tax year under this act and all of the
following apply:
(i) The brownfield credit amount that the taxpayer or assignee
would have been allowed to claim for projects completed in 2008
after the end of the taxpayer's or assignee's last tax year or for
projects completed in 2009 is in addition to the brownfield credit
amount that the taxpayer or assignee is allowed to claim for
projects completed before the end of the taxpayer's or assignee's
last tax year.
(ii) The brownfield credit amount that the taxpayer or assignee
is allowed to claim for projects completed in 2008 after the end of
the taxpayer's or assignee's last tax year or for projects
completed in 2009 on the taxpayer's or assignee's annual return for
the taxpayer's or assignee's last tax year or the sum of both
brownfield credit amounts shall not exceed the taxpayer's or
assignee's tax liability for the taxpayer's or assignee's last tax
year after all other credits for that tax year except the
taxpayer's or assignee's brownfield credit for the taxpayer's or
assignee's last tax year have been taken.
(iii) The brownfield credit amount that the taxpayer or assignee
is allowed to claim for its last tax year under this subsection
shall not exceed the sum of the amount that the taxpayer or
assignee would have been allowed to claim for projects completed in
2008 after the end of the taxpayer's or assignee's last tax year
plus the amount that the taxpayer or assignee would have been
allowed to claim for projects completed in 2009.
(c) If the amount of the total of all brownfield credit
amounts that may be claimed by the taxpayer or assignee under this
subsection exceeds the taxpayer's or assignee's tax liability for
the taxpayer's or assignee's last tax year, the amount by which the
total of all brownfield credit amounts exceeds the taxpayer's or
assignee's tax liability for the taxpayer's or assignee's last tax
year shall be refunded.
(d) A brownfield credit under this subsection shall not be
claimed before a certificate of completion is issued for the
project on which the brownfield credit is based.
(e) The credit allowed under this subsection shall be taken
before the credit allowed under section 39c(16).
(f) This subsection does not apply to any amount the taxpayer
or assignee may claim for the same project for a tax year that
begins after December 31, 2007 under any other tax act.
(g) As used in this subsection:
(i) "Assignee" means an assignee under subsection (17) or (18)
or under section 35e.
(ii) "Brownfield credit" means the credit allowed under
subsections (2), (3), and (33).
(iii) "Last tax year" means the taxpayer's tax year under this
act that begins after December 31, 2006 and before January 1, 2008.
(35) For tax years beginning on or after January 1, 2007, an
otherwise qualified taxpayer who fails to comply with section 3 of
the Michigan corporate responsibility act or who fails to disclose
a civil or criminal offense as required by section 3 of the
Michigan corporate responsibility act is not eligible for the
credit under this section.
(36) (35)
As used in this section:
(a) "Annual credit amount" means the maximum amount that a
qualified taxpayer is eligible to claim each tax year for a project
for which the total of all credits is more than $10,000,000.00 but
$30,000,000.00 or less, which shall be 10% of the qualified
taxpayer's credit amount approved under subsection (3).
(b) "Authority" means a brownfield redevelopment authority
created under the brownfield redevelopment financing act, 1996 PA
381, MCL 125.2651 to 125.2672.
(c) "Authorized business", "full-time job", "new capital
investment", "qualified high-technology business", "retained jobs",
and "written agreement" mean those terms as defined in the Michigan
economic growth authority act, 1995 PA 24, MCL 207.801 to 207.810.
(d) "Blighted", "brownfield plan", "eligible activities",
"eligible property", "facility", "functionally obsolete",
"qualified local governmental unit", and "response activity" mean,
except as otherwise provided in subdivision (f), those terms as
defined in the brownfield redevelopment financing act, 1996 PA 381,
MCL 125.2651 to 125.2672.
(e) "Eligible investment" means demolition, construction,
restoration, alteration, renovation, or improvement of buildings or
site improvements on eligible property and the addition of
machinery, equipment, and fixtures to eligible property after the
date that eligible activities on that eligible property have
started pursuant to a brownfield plan under the brownfield
redevelopment financing act, 1996 PA 381, MCL 125.2651 to 125.2672,
and after the date that the preapproval letter is issued, except
that the date that the preapproval letter is issued is not a
limitation for 1 project the construction of which began after
January 1, 2000 and before January 1, 2001 without the Michigan
economic growth authority determining that the project would not
occur in this state without the tax credit offered under this
section as provided in subsection (7), if the costs of the eligible
investment are not otherwise reimbursed to the taxpayer or paid for
on behalf of the taxpayer from any source other than the taxpayer.
The addition of leased machinery, equipment, or fixtures to
eligible property by a lessee of the machinery, equipment, or
fixtures is eligible investment if the lease of the machinery,
equipment, or fixtures has a minimum term of 10 years or is for the
expected useful life of the machinery, equipment, or fixtures, and
if the owner of the machinery, equipment, or fixtures is not the
qualified taxpayer with regard to that machinery, equipment, or
fixtures.
(f) "Eligible property" means that term as defined in the
brownfield redevelopment financing act, 1996 PA 381, MCL 125.2651
to 125.2672, except that, for purposes of subsection (33), all of
the following apply:
(i) Eligible property means property identified under a
brownfield plan that was used or is currently used for commercial,
industrial, or residential purposes and that is 1 of the following:
(A) Property for which eligible activities are identified
under the brownfield plan, is in a qualified local governmental
unit, and is a facility, functionally obsolete, or blighted.
(B) Property that is not in a qualified local governmental
unit but is within a downtown development district established
under 1975 PA 197, MCL 125.1651 to 125.1681, and is functionally
obsolete or blighted, and a component of the project on that
eligible property is 1 or more of the following:
(I) Infrastructure improvements that directly benefit the
eligible property.
(II) Demolition of structures that is not response activity
under section 20101 of the natural resources and environmental
protection act, 1994 PA 451, MCL 324.20101.
(III) Lead or asbestos abatement.
(IV) Site preparation that is not response activity under
section 20101 of the natural resources and environmental protection
act, 1994 PA 451, MCL 324.20101.
(C) Property for which eligible activities are identified
under the brownfield plan, is not in a qualified local governmental
unit, and is a facility.
(ii) Eligible property includes parcels that are adjacent or
contiguous to the eligible property if the development of the
adjacent or contiguous parcels is estimated to increase the
captured taxable value of the property or tax reverted property
owned or under the control of a land bank fast track authority
pursuant
to the land bank fast track authority act, 2003 PA 258,
MCL 124.751 to 124.774.
(iii) Eligible property includes, to the extent included in the
brownfield plan, personal property located on the eligible
property.
(iv) Eligible property does not include qualified agricultural
property exempt under section 7ee of the general property tax act,
1893 PA 206, MCL 211.7ee, from the tax levied by a local school
district for school operating purposes to the extent provided under
section 1211 of the revised school code, 1976 PA 451, MCL 380.1211.
(g) "Eligible taxpayer" means an eligible business that meets
the criteria under section 8(5) of the Michigan economic growth
authority act, 1995 PA 24, MCL 207.808.
(h) "Michigan economic growth authority" means the Michigan
economic growth authority created in the Michigan economic growth
authority act, 1995 PA 24, MCL 207.801 to 207.810.
(i) "Multiphase project" means a project approved under
subsection (2), (3), or (33) that has more than 1 component, each
of which can be completed separately.
(j) "Payroll" and "tax rate" mean those terms as defined in
section 37c.
(k) "Personal property" means that term as defined in section
8 of the general property tax act, 1893 PA 206, MCL 211.8, except
that personal property does not include either of the following:
(i) Personal property described in section 8(h), (i), or (j) of
the general property tax act, 1893 PA 206, MCL 211.8.
(ii) Buildings described in section 14(6) of the general
property tax act, 1893 PA 206, MCL 211.14.
(l) "Project" means the total of all eligible investment on an
eligible property or, for purposes of subsection (5)(b), 1 of the
following:
(i) All eligible investment on property not in a qualified
local governmental unit that is a facility.
(ii) All eligible investment on property that is not a facility
but is functionally obsolete or blighted.
(m) "Qualified local governmental unit" means that term as
defined in the obsolete property rehabilitation act, 2000 PA 146,
MCL 125.2781 to 125.2797.
(n) "Qualified taxpayer" means a taxpayer that meets both of
the following criteria:
(i) Owns or leases eligible property.
(ii) Certifies that, except as otherwise provided in this
subparagraph, the department of environmental quality has not sued
or issued a unilateral order to the taxpayer pursuant to part 201
of the natural resources and environmental protection act, 1994 PA
451, MCL 324.20101 to 324.20142, to compel response activity on or
to the eligible property, or expended any state funds for response
activity on or to the eligible property and demanded reimbursement
for those expenditures from the qualified taxpayer. However, if the
taxpayer has completed all response activity required by part 201
of the natural resources and environmental protection act, 1994 PA
451, MCL 324.20101 to 324.20142, is in compliance with any deed
restriction or administrative or judicial order related to the
required response activity, and has reimbursed the state for all
costs incurred by the state related to the required response
activity, the taxpayer meets the criteria under this subparagraph.
(o) "Tax liability attributable to authorized business
activity" means the tax liability imposed by this act after the
calculation of credits provided in sections 36, 37, and 39.