HOUSE BILL No. 6748

November 25, 2008, Introduced by Reps. Meisner and Knollenberg and referred to the Committee on Commerce.

A bill to amend 2007 PA 36, entitled

"Michigan business tax act,"

by amending section 437 (MCL 208.1437), as amended by 2008 PA 89.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 437. (1) Subject to the criteria under this section, a

qualified taxpayer that has unused credits or has a preapproval

letter issued after December 31, 2007 and before January 1, 2013,

or a taxpayer that received a preapproval letter prior to January

1, 2008 under section 38g of former 1975 PA 228 and has not

received a certificate of completion prior to the taxpayer's last

tax year, provided that the project is completed not more than 5

years after the preapproval letter for the project is issued unless

extended under subsection (9) or if it is a multiphase project not

more than 10 years after the preapproval letter, as amended, if

applicable, for the project is issued, or an assignee under

subsection (20), (21), or (22) may claim a credit that has been

approved under section 38g of former 1975 PA 228 or under

subsection (2), (3), or (4) against the tax imposed by this act

equal to either of the following:

(a) For projects approved before ~~the effective date of the~~

~~amendatory act that added subsection (33)~~ April 8, 2008, 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, as amended. For projects approved on and after

~~the effective date of the amendatory act that added subsection (33)~~

April 8, 2008, if the total of all eligible investments for a

project are $10,000,000.00 or less, up to 12.5% of the costs of the

qualified taxpayer's eligible investment paid or accrued by the

qualified taxpayer on an eligible property or up to 15% of the

costs of the qualified taxpayer's eligible investment paid or

accrued by the qualified taxpayer on an eligible property if the

project is designated as an urban development area project by the

Michigan economic growth authority to the extent that the project

does not exceed the amount stated in the preapproval letter, as

amended, or, until December 31, 2010, up to 20% of the costs of the

qualified taxpayer's eligible investment paid or accrued by the

qualified taxpayer on an eligible property if the project is

designated as an urban development area project by the Michigan

economic growth authority. If eligible investment exceeds the

amount of eligible investment in the preapproval letter, as

amended, 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) For projects approved before ~~the effective date of the~~

~~amendatory act that added subsection (33)~~ April 8, 2008, 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

(6)(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 (11) paid or

accrued by the qualified taxpayer on an eligible property. For

projects approved on and after ~~the effective date of the amendatory~~

~~act that added subsection (33)~~ April 8, 2008, if the total of all

eligible investments for a project is more than $10,000,000.00 but

$300,000,000.00 or less, up to 12.5% of the costs of the qualified

taxpayer's eligible investment as determined under subsection (11)

paid or accrued by the qualified taxpayer on an eligible property

that, except as provided in subsection (6)(b), is located in a

qualified local governmental unit, up to 15% of the cost of the

qualified taxpayer's eligible investment as determined under

subsection (11) paid or accrued by the qualified taxpayer on an

eligible property if the project is designated as an urban

development area project by the Michigan economic growth authority,

or, until December 31, 2010, up to 20% of the costs of the

qualified taxpayer's eligible investment as determined under

subsection (11) paid or accrued by the qualified taxpayer on an

eligible property if the project is designated as an urban

development area project by the Michigan economic growth authority.

If eligible investment exceeds the amount of eligible investment in

the preapproval letter, as amended, 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 $2,000,000.00 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. Subject to the limitation provided under

subsection (31), 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 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

for the same project or for another project. The Michigan economic

growth authority shall develop and implement the use of the

application form to be used for projects under this subsection.

(3) 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.

Subject to the limitation provided under subsection (31), 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

criteria in subsection (7) 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 the amounts authorized under subsection (1)(a). A

taxpayer may apply under this subsection instead of subsection (4)

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 the amounts authorized under subsection (1)(a). 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 (4) for

the same project or for another project.

(4) If the cost of a project will be for more than

$10,000,000.00 and, except as provided in subsection (6)(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 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 (6). The Michigan economic growth authority

shall use the criteria in subsection (7) 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, as amended, 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 (3) for the same project or for another

project.

(5) 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.

(6) The Michigan economic growth authority may approve not

more than 20 projects each calendar year under subsection (4), and

the following limitations apply:

(a) Of the 20 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 only 1 project.

(b) Of the 20 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, or if the property is functionally obsolete or

blighted, property identified in a brownfield plan and is located

in a city with a population of 70,000 or more and within 10 miles

of another city in this state with a population of 500,000 or more

as designated by the United States bureau of the census in the 2000

census. 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. For purposes of

this subdivision, the Michigan economic growth authority shall give

preference to mixed use projects that satisfy each of the

following:

(i) The amount of new construction investment is $50,000,000.00

or more.

(ii) The project includes at least 1 aboveground multilevel

parking facility or underground parking facility.

(iii) The project includes at least one 2-story or greater

structure other than a parking facility.

(iv) The project is regionally transformational.

(v) This state and region will benefit from the project.

(vi) The project addresses a major redevelopment need in the

community.

(vii) The project's requirements require a strong subsidy.

under subdivision (b).

(7) The Michigan economic growth authority shall review all

applications for projects under subsection (4) 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 (4). 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 (4), 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 (3) or when considering an amendment to a

project under subsection (9):

(a) The overall benefit to the public.

(b) The extent of reuse of vacant buildings and redevelopment

of blighted property.

(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 project is financially and 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 (3) or (4).

(8) A qualified taxpayer may apply for projects under this

section 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.

(9) If, after a taxpayer's project has been approved and the

taxpayer has received a preapproval letter but before the taxpayer

has made an eligible investment, other than soft costs, at the

property, the taxpayer determines that the project cannot be

completed as preapproved, the taxpayer may petition the Michigan

economic growth authority to amend the project and the preapproval

letter to increase the maximum total eligible investment for the

project on which credits may be claimed and the maximum total of

all credits for the project. A taxpayer may petition the Michigan

economic growth authority to make any other amendments to the

project or preapproval letter at any time before a certificate of

completion is issued. Amendments to the project or preapproval

letter may include, but are not limited to, extending the duration

of time provided to complete the project, as long as that extension

does not exceed 10 years from the date of the preapproval letter.

(10) A project may be a multiphase 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 10

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 or the chairperson of the Michigan

economic growth authority or his or her designee, for projects

approved under subsection (2) or (3), or the Michigan economic

growth authority, for projects approved under subsection (4),

verifies that the component is complete. 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, as amended, 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, as

amended, if applicable, 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, as

amended, for the entire project.

(11) When a project under this section 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, or was a party to an agreement to

purchase or lease, 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 (3), or the Michigan

economic growth authority, for projects approved under subsection

(4), 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 (4). 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), (3), or (4) as

applicable and as amended under subsection (9) 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.

(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 (4) 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 (10), 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.

(12) Except as otherwise provided in this section, qualified

taxpayers shall claim credits under this section in the tax year in

which the certificate of completion is issued. For a project

approved under subsection (4) 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.

(13) 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.

(14) Credits claimed by a lessee of eligible property are

subject to the total of all credits limitation under this section.

(15) Each qualified taxpayer and assignee under subsection

(20), (21), or (22) that claims a credit under this section 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 this section 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 (10) 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.

(16) Except as otherwise provided in this subsection or

subsection (10), (18), (20), (21), or (22), a credit under this

section 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 (11)(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.

(17) Except as otherwise provided under this subsection, the

credits approved under this section shall be calculated after

application of all other credits allowed under this act. The

credits under this section shall be calculated before the

calculation of the credits under sections 413, 423, 431, and 450.

(18) Except as otherwise provided under this subsection, if

the credit allowed under this section for the tax year and any

unused carryforward of the credit allowed under this section 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 this section, 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 (4) begins to run in

the tax year for which the annual credit amount is designated on

the certificate of completion issued under this section. A credit

carryforward available under section 38g of former 1975 PA 228 that

is unused at the end of the last tax year may be claimed against

the tax imposed under act for the years the carryforward would have

been available under former 1975 PA 228. Beginning on and after ~~the~~

~~effective date of the amendatory act that added subsection (33)~~

April 8, 2008, if the credit allowed under this section for the tax

year exceeds the qualified taxpayer's tax liability for the tax

year, the qualified taxpayer may elect to have the excess refunded

at a rate equal to 85% of that portion of the credit that exceeds

the tax liability of the qualified taxpayer for the tax year and

forgo the remaining 15% of the credit and any carryforward.

(19) If a project or credit under this section is for the

addition of personal property, if the cost of that personal

property is used to calculate a credit under this section, and if

the personal property is disposed of or transferred from the

eligible property to any other location, the qualified taxpayer

that disposed of that property, or transferred the personal

property shall add the same percentage as determined under

subsection (1) of the federal basis of the personal property used

for determining gain or loss as of the date of the disposition or

transfer to the qualified taxpayer's tax liability under this act

after application of all credits under this act for the tax year in

which the disposition or transfer occurs. If a qualified taxpayer

has an unused carryforward of a credit under this section, 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 (18).

(20) For credits under this section 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 under this

section 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.

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.

(21) Except as otherwise provided in this subsection, 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 is a partnership, limited

liability company, or subchapter S corporation, the qualified

taxpayer may assign all or a portion of a credit under this section

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. 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 a certificate of

completion is issued or for a credit assigned and claimed for a

multiphase project, before the component completion certificate is

issued, the taxpayer shall claim the credit in the year in which

the credit is assigned. 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. 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.

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.

(22) For projects approved under this section or section 38g

of former 1975 PA 228 for which a certificate of completion is

issued on and after January 1, 2006, a qualified taxpayer may

assign all or a portion of a credit allowed under this section or

section 38g(2), (3), or (33) of former 1975 PA 228 under this

subsection. 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 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. 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 pursuant to this section or section 38g of

former 1975 PA 228. An assignee may subsequently assign a credit or

any portion of a credit assigned under this subsection to 1 or more

assignees. The credit assignment or a subsequent reassignment under

this subsection shall be made on a form prescribed by the Michigan

economic growth authority. The Michigan economic growth authority

or its designee shall review and issue a completed assignment or

reassignment certificate to the assignee or reassignee. An assignee

or subsequent reassignee shall attach a copy of the completed

assignment certificate to its annual return required under this

act, for the tax year in which the assignment or reassignment is

made and the assignee or reassignee 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 section 38g(18) of former 1975

PA 228. 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. In addition to all other procedures

and requirements under this section, 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.

assignee, and the qualified taxpayer may assign all or a portion of

each annual credit amount to any assignee.

(23) A qualified taxpayer or assignee under subsection (20),

(21), or (22) shall not claim a credit under subsection (1)(a) or

(b) based on eligible investment on which a credit claimed under

section 38d of former 1975 PA 228 was based.

(24) When reviewing an application for a project for

designation as an urban development area project, the Michigan

economic growth authority for projects approved under subsection

(4) or the chairperson of the Michigan economic growth authority or

his or her designee for projects approved under subsections (2) and

(3) shall consider all of the following criteria:

(a) If the project increases the density of the area by

promoting multistory development.

(b) If the project promotes mixed-use development and walkable

communities.

(d) If the project addresses areawide redevelopment and

includes multiple parcels of property.

(e) If the project addresses underserved markets of commerce.

(f) Any other criteria determined by the Michigan economic

growth authority or the chairperson of the Michigan economic growth

authority.

(25) An eligible taxpayer that claims a credit under this

section is not prohibited from claiming a credit under section 431.

However, the eligible taxpayer shall not claim a credit under this

section and section 431 based on the same costs.

(26) 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 this section. 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 this section.

(27) 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 this

section. As used in this subsection, "casino" means a casino

regulated by this state pursuant to the Michigan gaming control and

revenue act, 1996 IL 1, MCL 432.201 to 432.226.

(28) 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 this

section.

(29) 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 subsections (2), (3), and (4).

The report shall include, but is not limited to, all of the

following:

(a) A listing of the projects under subsections (2), (3), and

(4) that were approved in the calendar year.

(b) The total amount of eligible investment for projects

approved under subsections (2), (3), and (4) in the calendar year.

(30) For purposes of this section, taxpayer includes a person

subject to the tax imposed under chapters 2A and 2B.

(31) For the 2008 calendar year, the total of all credits for

all projects approved under subsection (2) or (3) shall not exceed

$63,000,000.00. For each calendar year after 2008, the total of all

credits for all projects approved under subsection (2) or (3) shall

not exceed $40,000,000.00. If the Michigan economic growth

authority approves a total of all credits for all projects under

subsection (2) or (3) of less than $40,000,000.00 in a calendar

year, the Michigan economic growth authority may carry forward for

1 year only the difference between $40,000,000.00 and the total of

all credits for all projects under this subsection approved in the

immediately preceding calendar year.

(32) 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, as approved under subsection (4).

(b) "Authority" means a brownfield redevelopment authority

created under the brownfield redevelopment financing act, 1996 PA

381, MCL 125.2651 to 125.2672.

"facility", "functionally obsolete", "qualified local governmental

unit", and "response activity" mean those terms as defined in the

brownfield redevelopment financing act, 1996 PA 381, MCL 125.2651

to 125.2672.

(d) "Eligible investment" or "eligible investments" means,

when made after the approval date of the brownfield plan but in any

event no earlier than 90 days prior to the date of the preapproval

letter, any 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, 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. For projects approved after ~~the effective date of the~~

~~amendatory act that added subsection (33)~~ April 8, 2008, eligible

investment does not include certain soft costs of the eligible

investment as determined by the Michigan economic growth authority,

including, but not limited to, developer fees, appraisals,

performance bonds, closing costs, bank fees, loan fees, risk

contingencies, financing costs, permanent or construction period

interest, legal expenses, leasing or sales commissions, marketing

costs, professional fees, shared savings, taxes, title insurance,

bank inspection fees, insurance, and project management fees.

Notwithstanding the foregoing, eligible investment does include

architectural, engineering, surveying, and similar professional

fees.

(e) "Eligible property", except as otherwise provided under

subsection (33), means property for which eligible activities are

identified under a brownfield plan that was used or is currently

used for commercial, industrial, public, or residential purposes,

including personal property located on the property, to the extent

included in the brownfield plan, and that is 1 or more of the

following:

(i) Is in a qualified local governmental unit and is a

facility, functionally obsolete, or blighted and includes parcels

that are adjacent or contiguous to that property if the development

of the adjacent and contiguous parcels is estimated to increase the

captured taxable value of that property.

(ii) Is not in a qualified local governmental unit and is a

facility, and includes parcels that are adjacent or contiguous to

that property if the development of the adjacent and contiguous

parcels is estimated to increase the captured taxable value of that

property.

(iii) Is tax reverted property owned or under the control of a

land bank fast track authority.

(f) "Last tax year" means the taxpayer's tax year under former

1975 PA 228 that begins after December 31, 2006 and before January

1, 2008.

(g) "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.

(h) "Multiphase project" means a project approved under this

section that has more than 1 component, each of which can be

completed separately.

(i) "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.

(j) "Project" means the total of all eligible investment on an

eligible property or, for purposes of subsection (6)(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.

(k) "Qualified local governmental unit" means that term as

defined in the obsolete property rehabilitation act, 2000 PA 146,

MCL 125.2781 to 125.2797.

(l) "Qualified taxpayer" means a taxpayer that meets both of

the following criteria:

(i) Owns, leases, or has entered into an agreement to purchase

or lease 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.

(m) "Urban development area project" means a project located

on eligible property in the downtown or traditional central

business district of a qualified local governmental unit or county

seat or along a traditional commercial corridor of a qualified

local governmental unit or county seat as determined by the

Michigan economic growth authority or the chairperson of the

Michigan economic growth authority or his or her designee.

(33) For purposes of ~~subsection~~ subsections (2), (3), and (4),

eligible property means that term as defined under subsection

(32)(e) except that all of the following apply:

(a) Eligible property means property identified under a

brownfield plan that was used or is currently used for commercial,

industrial, public, or residential purposes and that is 1 of the

following:

(i) 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.

(ii) 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:

(A) Infrastructure improvements that directly benefit the

eligible property.

(B) 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.

(D) Site preparation that is not response activity under

section 20101 of the natural resources and environmental protection

act, 1994 PA 451, MCL 324.20101.

(iii) Property for which eligible activities are identified

under the brownfield plan, is not in a qualified local governmental

unit, and is a facility.

(b) 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.

brownfield plan, personal property located on the eligible

property.

(d) 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.