April 18, 2007, Introduced by Reps. Clemente, Melton, Meadows, Griffin, Spade, Clack, Meisner, Constan and Hammel and referred to the Committee on Tax Policy.
A bill to amend 1975 PA 228, entitled
"Single business tax act,"
(MCL 208.1 to 208.145) by adding section 33.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 33. (1) A qualified taxpayer that makes an eligible
contribution in an eligible business may claim a credit against the
tax imposed by the act equal to 50% of the taxpayer's eligible
contribution, not to exceed $500,000.00.
(2) Prior to making an eligible contribution, a qualified
taxpayer shall submit an application to the authority for approval
of the credit. The application shall include at least all of the
following:
(a) An economic impact analysis, including all of the
following:
(i) The impact on both the qualified taxpayer and eligible
business.
(ii) The innovation impact on the technology sector.
(iii) The number of jobs created.
(b) A project and collaboration structure that includes:
(i) The structure of investment between the qualified taxpayer
and eligible business.
(ii) Technology development roles and responsibilities.
(iii) A commercialization plan, including intellectual property
structure.
(c) A technology summary, including a due diligence review by
the qualified taxpayer.
(d) Other collaborators or interested and supportive
businesses.
(e) A financial summary.
(f) Total eligible contribution by the qualified taxpayer.
(g) In-kind services provided by the qualified taxpayer.
(h) Other investors or service providers in the project.
(i) Total overall investment into the project.
(3) The authority shall develop criteria to competitively
review applications, including, but not limited to, criteria
related to all of the following:
(a) Economic impact in Michigan.
(b) Total cash investment by the qualified taxpayer.
(c) Total in-kind services provided by the qualified taxpayer.
(d) Other collaborators and services provided.
(e) Impact of technology development across specific and other
sectors.
(f) The commercialization plan and potential for
commercialization.
(4) A qualified taxpayer shall not claim a credit under this
section unless the Michigan economic growth authority has issued a
certificate to the taxpayer. The taxpayer shall attach the
certificate to the annual return filed under this act on which a
credit under this section is claimed.
(5) The certificate required by subsection (4) shall state all
of the following:
(a) The taxpayer is an eligible business.
(b) The amount of the credit under this section for the
eligible business for the designated tax year, which shall be the
year in which contribution is made.
(c) The taxpayer's federal employer identification number or
the Michigan department of treasury number assigned to the
taxpayer.
(6) The authority shall not grant more than 25 credits under
this section for any 1 year, based on an application and a
competitive review criteria.
(7) A qualified taxpayer that receives a credit under this
section and the eligible business to which a contribution is made
shall enter into an agreement with the authority that requires the
qualified taxpayer and the eligible business to comply with the
relevant provisions of the application as determined by the
authority for a period of 5 years. If the authority determines that
there has not been compliance with the requirements of the terms of
the agreement, the qualified taxpayer shall be liable for an amount
equal to 125% of the total of all credits received under this
section for all tax years.
(8) As used in this section:
(a) "Authority" means the Michigan economic growth authority
created in the Michigan economic growth authority act, 1995 PA 24,
MCL 207.801 to 207.810.
(b) "Eligible contribution" means the transfer of pecuniary
interest in the form of cash, for the purposes of research and
development and technology innovation. An eligible contribution
does not include contract research.
(c) "Eligible business" means a taxpayer engaged in research
and development that together with any affiliates employs fewer
than 50 full-time employees or has gross receipts of less than
$10,000,000.00 and has no prior financial interest in the qualified
taxpayer and in which the qualified taxpayer has no prior financial
interest.
(d) "Qualified taxpayer" means a taxpayer that meets all of
the following criteria:
(i) Proposes to fund, support, and collaborate in the research
and development and technology innovation with an eligible business
located in this state.
(ii) Has not received a credit under this section in the past
calendar year.
(e) "Research and development" means 1 of the following:
(i) Translational research conducted with the objective of
attaining a specific benefit or to solve a practical problem.
(ii) Activity that seeks to utilize, synthesize, or apply
existing knowledge, information, or resources to the resolution of
a specified problem, question, or issue, with high potential for
commercial application to create jobs in this state.
(iii) Original investigation for the advancement of scientific
or technological knowledge that will enhance the research capacity
of this state in a way that increases the ability to attract to or
develop companies, jobs, researchers, or students in this state.