SB-0271, As Passed Senate, June 13, 2013
SUBSTITUTE FOR
SENATE BILL NO. 271
A bill to amend 1984 PA 270, entitled
"Michigan strategic fund act,"
by amending sections 88r, 90a, 90b, 90c, and 90d (MCL 125.2088r,
125.2090a, 125.2090b, 125.2090c, and 125.2090d), section 88r as
added by 2011 PA 250 and sections 90a, 90b, 90c, and 90d as amended
by 2012 PA 395.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 88r. (1) The fund shall create and operate the Michigan
business development program to provide grants, loans, and other
economic assistance to qualified businesses that make qualified
investments in this state or provide qualified new jobs in this
state.
(2) The Michigan business development program shall provide
for all of the following:
(a) Grants, loans, and other economic assistance to assist
qualified businesses in making qualified investments and providing
new jobs in this state, with preference given to qualified
businesses that need additional assistance for deal-closing and for
second stage company gap financing.
(b) A detailed application, approval, and compliance process
published and available on the fund's website. The detailed
application, approval, and compliance process shall, at a minimum,
contain the following:
(i) A qualified business may apply for a grant, loan, or other
economic assistance in a form and manner determined by the fund.
(ii) After receipt of an application, the fund may enter into a
written agreement with the qualified business if the qualified
business agrees to make certain qualified investments or create a
certain number of new jobs in this state.
(iii) The written agreement shall provide in a clear and concise
manner all of the conditions imposed, including specific time
frames, on the qualified business to receive a grant, loan, or
other economic assistance under this section.
(iv) The written agreement shall provide for a repayment
provision of any grants, loans, or other economic assistance if the
qualified business fails to comply with the provisions of the
written agreement.
(v) The written agreement shall provide for an audit provision
that requires the fund to verify that established milestones for
the project have been met.
(c) In any fiscal year, a qualified business shall not receive
more than $10,000,000.00 for a project funded under this section.
(3) The fund shall not enter into a written agreement with a
qualified business unless all of the following are met:
(a) The municipality makes a staff, financial, or economic
commitment to the project as determined by the fund.
(b) The qualified business provides a business plan or
demonstrates the need for the grant, loan, or other economic
assistance.
(c) The qualified business agrees to provide the data
described in the written agreement necessary for the fund to report
to the legislature under this act.
(4) The fund shall post on its website or post on the website
of the Michigan economic development corporation the name and
location of each qualified business that received a grant, loan, or
other economic assistance awarded under this section and the amount
of the grant, loan, or other economic assistance.
(5)
The fund, with assistance from the Michigan economic
development
corporation and the office of the chief compliance
officer,
shall establish policies and procedures to conduct
background
checks on each qualified business applying for a grant,
loan,
or other economic assistance under this section.
(6)
Beginning November 1, 2012 and each year thereafter, the
fund
shall report to each house of the legislature on the
activities
of the fund under this section that occurred in the
previous
fiscal year. The report shall be made available in an
electronic
format. The report shall include, but is not limited to,
all
of the following:
(a)
The total proposed amount of qualified investment
attracted
under this section.
(b)
The total actual amount of qualified investment attracted
under
this section as reported to the fund.
(c)
The total committed number of new jobs created under this
section.
(d)
The total actual number of new jobs created under this
section
as reported to the fund.
(e)
The total number of new written agreements.
(f)
The amount of the grant, loan, or other economic
assistance
awarded under this section separately for each qualified
business.
(g)
The actual amount of the grant, loan, or other economic
assistance
made under this section separately for each qualified
business
verified by the fund.
(h)
For each qualified business, whether it is a new business,
whether
it is an expansion of an existing business, or whether it
relocated
from outside of this state.
(i)
An evaluation of the aggregate return on investment that
this
state realizes on the actual qualified new jobs and actual
qualified
investment made by qualified businesses.
(j)
A report on the individuals hired by the qualified
business
that includes the number of individuals hired by the
qualified
business, their educational attainment, including, but
not
limited to, high school diploma or equivalent, higher education
certificate
or degree, or advanced degree or training, and the
number
of individuals hired by the qualified business who relocated
to
this state as reported to the fund.
(5) (7)
Beginning February 1, 2012 and not
less than every 3
months thereafter, the fund shall post on its internet website the
name and location of a qualified business that received approval of
a grant, loan, or other economic assistance under this section in
the immediately preceding 3-month period.
(6) (8)
The legislature finds and declares
that funding
authorized under this section to encourage diversification of the
economy, to encourage capital investment in this state, and to
promote the creation of qualified new jobs in this state is a
public purpose and of paramount concern in the interest of the
health, safety, and general welfare of the citizens of this state.
(7) (9)
As used in this section:
(a) "Other economic assistance" means any other form of
assistance allowed under this act that is not a grant or a loan.
(b) "Qualified business" means a business that is located in
or operates in this state or will locate or will operate in this
state as determined by the fund. A qualified business may include
more than 1 business as determined by the fund board.
(c) "Qualified investment" means investment in this state
related to a project subject to a written agreement under this
section.
(d) "Qualified new job" means a job performed by an individual
who is a resident of this state whose Michigan income taxes are
withheld by an employer, or an employee leasing company or
professional employer organization on behalf of the employer, that
is in excess of the number of jobs maintained by the qualified
business maintained in this state prior to the expansion or
location, as determined and verified by the fund.
Sec. 90a. As used in this chapter:
(a) "Community revitalization grant" or "grant" means a grant
that is approved under section 90b and that is subject to
requirements in section 90c.
(b) "Community revitalization incentive" means a community
revitalization grant, a community revitalization loan, or other
economic assistance.
(c) "Community revitalization loan" or "loan" means a loan
that is approved under section 90b and that is subject to the
requirements in section 90d.
(d) "Eligible investment" means 1 or more of the following,
subject to a written agreement under this section, including
investment which occurred prior to the approval of the application,
to the extent that the project has not been completely reimbursed
to or been paid for on behalf of the person requesting a community
revitalization incentive under this chapter:
(i) Any demolition, construction, alteration, rehabilitation,
or improvement of buildings.
(ii) Site improvements.
(iii) The addition of machinery, equipment, or fixtures to the
approved project.
(iv) Architectural, engineering, surveying, and similar
professional fees but not certain soft costs of the eligible
investment as determined by the board, 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.
(e) "Eligible property" means property that meets 1 or more of
the following conditions:
(i) Is determined to be a facility. As used in this
subparagraph, "facility" means that term as defined in section 2 of
the brownfield redevelopment financing act, 1996 PA 381, MCL
125.2652.
(ii) Is a historic resource. As used in this subparagraph,
"historic resource" means a publicly or privately owned historic
building or structure located within a historic district designated
by the national register of historic places, the state register of
historic sites, or a local unit acting under the local historic
districts act, 1970 PA 169, MCL 399.201 to 399.215.
(iii) Is blighted property. As used in this subparagraph,
"blighted property" means property that meets any of the following
criteria:
(A) Has been declared a public nuisance in accordance with a
local housing, building, plumbing, fire, or other related code or
ordinance.
(B) Is an attractive nuisance to children because of physical
condition, use, or occupancy.
(C) Is a fire hazard or is otherwise dangerous to the safety
of persons or property.
(D) Has had the utilities, plumbing, heating, or sewerage
permanently disconnected, destroyed, removed, or rendered
ineffective so that the property is unfit for its intended use.
(E) Is tax reverted property owned by a qualified local
governmental unit, by a county, or by this state.
(F) Is property owned or under the control of a land bank fast
track authority under the land bank fast track act, 2003 PA 258,
MCL 124.751 to 124.774.
(G) Has substantial subsurface demolition debris buried on
site so that the property is unfit for its intended use.
(iv) Is functionally obsolete property. As used in this
subparagraph, "functionally obsolete" means that the property is
unable to be used to adequately perform the function for which it
was intended due to a substantial loss in value resulting from
factors such as overcapacity, changes in technology, deficiencies
or superadequacies in design, or other similar factors that affect
the property itself or the property's relationship with other
surrounding property as determined by a Michigan advanced assessing
officer or a Michigan master assessing officer.
(v) Is a parcel that is adjacent or contiguous to property
described in subparagraphs (i) through (iv) if the development of the
adjacent or contiguous parcel is estimated to increase the taxable
value of the property described in subparagraphs (i) through (iv).
(vi) Any other property as determined by the fund board.
(f) "Other economic assistance" means any other form of
assistance allowed under this act that is not a community
revitalization loan or community revitalization grant.
Sec. 90b. (1) The fund shall create and operate the Michigan
community revitalization program to provide community
revitalization incentives for eligible investments on eligible
property in this state. The fund shall develop and use a detailed
application, approval, and compliance process adopted by a
resolution of the board and published and available on the fund's
website. Program standards, guidelines, templates, or any other
forms used by the fund to implement the Michigan community
revitalization program shall be approved by the board.
(2) A person or 2 or more persons may apply to the fund for
approval of community revitalization incentives associated with a
project under this section. Community revitalization incentives
shall not be approved for any property that is not eligible
property.
(3) Funds appropriated for programs under this chapter shall
be placed in the 21st century jobs trust fund created in the
Michigan trust fund act, 2000 PA 489, MCL 12.251 to 12.260.
(4) Subject to section 88c, the fund shall review all
applications for community revitalization incentives. As part of
the application, the applicant shall include documentation
establishing that the project is located on eligible property and a
project description that includes a project pro-forma. The fund
shall
may consider the following criteria to the extent
reasonably
applicable to the type of project proposed when approving a
community revitalization inventive:
(a) The importance of the project to the community in which it
is located.
(b) If the project will act as a catalyst for additional
revitalization of the community in which it is located.
(c) The amount of local community and financial support for
the project.
(d) The applicant's financial need for a community
revitalization incentive.
(e) The extent of reuse of vacant buildings, reuse of
historical buildings, and redevelopment of blighted property.
(f) Creation of jobs.
(g) The level of private sector and other contributions,
including, but not limited to, federal funds and federal tax
credits.
(h) Whether the project is financially and economically sound.
(i) Whether the project increases the density of the area.
(j) Whether the project promotes mixed-use development and
walkable communities.
(k) Whether the project converts abandoned public buildings to
private use.
(l) Whether the project promotes sustainable development.
(m) Whether the project involves the rehabilitation of a
historic resource.
(n) Whether the project addresses areawide redevelopment.
(o) Whether the project addresses underserved markets of
commerce.
(p) The level and extent of environmental contamination.
(q) If the rehabilitation of the historic resource will meet
the federal secretary of the interior's standards for
rehabilitation and guidelines for rehabilitating historic
buildings, 36 CFR 67.
(r) Whether the project will compete with or effect existing
Michigan businesses within the same industry.
(s) Any other additional criteria approved by the board that
are specific to each individual project and are consistent with the
findings and intent of this chapter.
(5) An application shall be approved or denied not more than
90 days after receipt of the application that is considered
administratively complete by the board or its designee. If the
application is neither approved nor denied within 90 days after
being considered administratively complete, it shall be considered
by the fund board, or its president if delegated, for action at, or
by, the next regularly scheduled board meeting. If an application
is approved, the fund shall determine the amount of community
revitalization incentives for the project based on the fund's
review of the application and the criteria specified in subsection
(4).
(6) The amount of community revitalization incentives that the
board may approve for a single project shall not exceed 25% of a
project's eligible investment up to $10,000,000.00. A community
revitalization loan shall not exceed $10,000,000.00 and a community
revitalization
grant shall not exceed $1,000,000.00. $2,500,000.00.
However, a combination of loans, grants, and other economic
assistance under this chapter shall not exceed $10,000,000.00 per
project. The board may not approve $10,000,000.00 per project in
community revitalization incentives to more than 3 projects per
fiscal year. The board shall approve not less than 5 projects of
$1,000,000.00 or less per project per fiscal year. If, after
reviewing all applications in a fiscal year, the fund determines
that less than 5 projects warranted an award of $1,000,000.00 or
less, this subsection shall not apply.
(7) When the board approves an application and determines the
amount of community revitalization incentives, the board shall
enter into a written agreement with the applicant. The written
agreement shall provide in a clear and concise manner all of the
conditions imposed, including specific time frames, on the
applicant to receive the community revitalization incentive under
this chapter. The written agreement shall provide for the secured
status of any loan, repayment, and penalties if the applicant fails
to comply with the provisions of the written agreement as
determined by the board. The applicant shall agree to provide the
data described in the written agreement that is necessary for the
fund to report to the legislature under this chapter.
(8) Not more than 4% of the annual appropriation as provided
by law from the 21st century jobs trust fund established in the
Michigan trust fund act, 2000 PA 489, MCL 12.251 to 12.260, may be
used for the purposes of administering the programs and activities
authorized under this chapter. However, the fund and the fund board
shall not use more than 3% of the annual appropriation for
administering the programs and activities authorized under this
chapter unless the fund board by a 2/3 vote authorizes the
additional 1% for administration. The MEDC may charge actual and
reasonable fees for costs associated with the community
revitalization incentive authorized under this chapter. These fees
are in addition to an amount of the appropriation used for
administering the programs and activities authorized under this
chapter.
Sec. 90c. Upon satisfying a milestone established in a written
agreement for which the board has approved a community
revitalization grant under section 90b, the applicant may apply to
the fund for a grant disbursement as specified in the written
agreement. All or a portion of the rights or obligations of the
applicant under the written grant agreement may be assigned by the
applicant to 1 or more assignees with prior written approval of,
and on terms and conditions acceptable to, the fund. The board, or
its designee, shall develop and implement the use of an application
form and assignment form to be used under this section. Within 90
days of receipt of an application for disbursement, the fund or its
designee
shall then determine whether the project has complied is
in compliance with the terms of the written agreement and, if
applicable, is in compliance, or when completed will be in
compliance, with the federal secretary of the interior's standards
for rehabilitation and guidelines for rehabilitating historic
buildings, 36 CFR 67. If the fund or its designee determines that
the
project has complied is in
compliance with the written
agreement and, if applicable, is in compliance, or when completed
will be in compliance, with the federal secretary of the interior's
standards for rehabilitation and guidelines for rehabilitating
historic buildings, 36 CFR 67, the fund shall issue the grant
proceeds to the applicant or, if the grant has been assigned, to
the assignee.
Sec. 90d. (1) Upon satisfying a milestone established in a
written agreement for which the board has approved a community
revitalization loan under section 90b, the applicant may apply to
the fund for a loan disbursement as specified in the written
agreement. All or a portion of the rights or obligations of the
applicant under the written loan agreement may be assigned by the
applicant to 1 or more assignees with prior written approval of,
and on terms and conditions acceptable to, the fund. The board, or
its designee, shall develop and implement the use of an application
for disbursement form and assignment form to be used under this
subsection. Within 90 days of receipt or disbursement of an
application for disbursement, the fund or its designee shall
determine
whether the project has complied is in compliance with
the written agreement and, if applicable, is in compliance, or when
completed will be in compliance, with the federal secretary of the
interior's standards for rehabilitation and guidelines for
rehabilitating historic buildings, 36 CFR 67. If the fund or its
designee
determines that the project has complied is in compliance
with the written agreement and, if applicable, is in compliance, or
when completed will be in compliance, with the federal secretary of
the interior's standards for rehabilitation and guidelines for
rehabilitating historic buildings, 36 CFR 67, the fund shall
distribute the loan proceeds to the applicant or, if the loan
proceeds have been assigned, to the assignee.
(2)
The board shall develop criteria for repayment of the Each
written agreement for a community revitalization loan shall contain
a repayment provision.
(3) The proceeds from repayment of community revitalization
loans under subsection (2) shall be paid into the investment fund
described in section 88h and expended exclusively for community
revitalization incentives under this chapter.
(4)
Beginning November 1, 2012 and each year thereafter, the
fund
shall report to each house of the legislature on the
activities
of the fund under this chapter that occurred in the
previous
fiscal year. The report shall be made available in an
electronic
format. Except as otherwise provided in this subsection
or
in this act, the fund shall not divulge sensitive or private
financial
information associated with a community revitalization
incentive.
The report shall include, but is not limited to, all of
the
following:
(a)
The total proposed amount of private investment attracted
under
this section.
(b)
The total actual amount of private investment attracted
under
this section as reported to the fund.
(c)
The total number of new written agreements.
(d)
The amount of the community revitalization incentives
awarded
under this chapter separately for each project.
(e)
The actual amount of the community revitalization
incentives
made under this chapter separately for each project.
(f)
The total actual amount of square footage revitalized or
added
for each project approved under this section as reported to
the
fund. When reporting square footage, the person must report the
square
footage by category, including, but not limited to,
commercial,
residential, or retail.
(g)
The aggregate increase in taxable value of all property
subject
to a written agreement under this chapter when established
and
recorded by the local units of government and as reported to
the
fund.
(h)
A summary of all written agreements for community
revitalization
loans.
(i)
The total actual number of residential units revitalized
or
added for each project approved under this section as reported
to
the fund.
(j)
The identity of persons who received a community
revitalization
incentive outside the program standards and
guidelines
and why the variance was given.
(k)
The amount of administrative costs used to administer the
programs
and activities authorized under this chapter.
(l) A summary of the projected and actual aggregated
taxpayer
return
on investment for each eligible investment that received a
distribution
in the reporting period.
(4) (5)
Beginning February 1, 2012 and not
less than every 3
months thereafter, the fund shall post on its internet website the
name and location of a person who received approval of community
revitalization investment under this chapter in the immediately
preceding 3-month period.
(6)
Beginning on and after January 1, 2012, on a monthly basis
the
fund shall provide exact copies of all information that is
provided
to board members of the fund for the purpose of monthly
board
meetings, subject to confidentiality under section 5, to each
of
the following:
(a)
The chairperson and minority vice-chairperson of the house
commerce
committee.
(b)
The chairperson and minority vice-chairperson of the house
appropriations
subcommittee on general government.
(c)
The chairperson and minority vice-chairperson of the
senate
economic development committee.
(d)
The chairperson and minority vice-chairperson of the
senate
appropriations subcommittee on general government.