SENATE BILL No. 1322

May 9, 2002, Introduced by Senators EMMONS, STILLE, STEIL and HAMMERSTROM and

referred to the Committee on Finance.

A bill to amend 1975 PA 228, entitled

"Single business tax act,"

(MCL 208.1 to 208.145) by adding section 39e.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 SEC. 39E. (1) A TAXPAYER OR A TRANSFEREE OF A TAXPAYER

2 UNDER SUBSECTION (11) OR (14) MAY CLAIM A CREDIT AGAINST THE TAX

3 IMPOSED BY THIS ACT FOR 1 OR MORE OF THE FOLLOWING AS

4 APPLICABLE:

5 (A) THE CREDIT ALLOWED UNDER SUBSECTION (2).

6 (B) THE CREDIT ALLOWED UNDER SUBSECTION (3).

7 (C) THE CREDIT ALLOWED UNDER SUBSECTION (5).

8 (D) THE CREDIT ALLOWED UNDER SUBSECTION (12).

9 (2) FOR TAX YEARS THAT BEGIN AFTER DECEMBER 31, 2002, A

10 TAXPAYER MAY CLAIM A NONREFUNDABLE CREDIT FOR THAT PORTION OF THE

11 TAXPAYER'S TAX LIABILITY ATTRIBUTABLE TO THE RESEARCH,

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1 DEVELOPMENT, OR MANUFACTURING OF AN ALTERNATIVE ENERGY MARINE

2 PROPULSION SYSTEM, AN ALTERNATIVE ENERGY SYSTEM, AN ALTERNATIVE

3 ENERGY VEHICLE, OR ALTERNATIVE ENERGY TECHNOLOGY FOR THE TAX

4 YEAR.

5 (3) FOR TAX YEARS THAT BEGIN AFTER DECEMBER 31, 2002, A TAX-

6 PAYER THAT IS A QUALIFIED ALTERNATIVE ENERGY ENTITY MAY CLAIM A

7 CREDIT FOR THE TAXPAYER'S QUALIFIED WITHHOLDING AMOUNT. A TAX-

8 PAYER SHALL CLAIM THE CREDIT UNDER THIS SUBSECTION AFTER ALL

9 ALLOWABLE NONREFUNDABLE CREDITS UNDER THIS ACT.

10 (4) IF THE CREDIT ALLOWED UNDER SUBSECTION (3) EXCEEDS THE

11 TAX LIABILITY OF THE TAXPAYER FOR THE TAX YEAR, THAT PORTION OF

12 THE CREDIT THAT EXCEEDS THE TAX LIABILITY SHALL BE REFUNDED.

13 (5) FOR TAX YEARS THAT BEGIN AFTER DECEMBER 31, 2002 AND

14 BEFORE JANUARY 1, 2013, AN ELIGIBLE TAXPAYER MAY CLAIM A CREDIT

15 FOR QUALIFIED INVESTMENT FOR RESEARCH EXPERIMENTAL ACTIVITIES

16 CONDUCTED IN THE TAX YEAR AS APPROVED BY THE MICHIGAN ECONOMIC

17 GROWTH AUTHORITY PURSUANT TO SUBSECTION (6) FOR THE AMOUNT DETER-

18 MINED UNDER SUBSECTION (7).

19 (6) THE MICHIGAN ECONOMIC GROWTH AUTHORITY SHALL APPROVE OR

20 DENY A CREDIT UNDER SUBSECTION (5) TO TAXPAYERS THAT APPLY FOR

21 THE CREDIT. THE MICHIGAN ECONOMIC GROWTH AUTHORITY SHALL NOT

22 APPROVE MORE THAN 50 TAXPAYERS AS ELIGIBLE TAXPAYERS EACH STATE

23 FISCAL YEAR. THE MICHIGAN ECONOMIC GROWTH AUTHORITY SHALL ISSUE

24 A LETTER AS PROVIDED UNDER SUBSECTION (8) AUTHORIZING THE CREDIT

25 TO EACH ELIGIBLE TAXPAYER APPROVED FOR THE CREDIT UNDER SUBSEC-

26 TION (5) THAT STATES THE AMOUNT OF THE CREDIT THAT THE ELIGIBLE

27 TAXPAYER MAY CLAIM EACH TAX YEAR AS DETERMINED UNDER SUBSECTION

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1 (7) AND THE TAX YEAR IN WHICH THE ELIGIBLE TAXPAYER MAY CLAIM

2 THAT CREDIT.

3 (7) THE MICHIGAN ECONOMIC GROWTH AUTHORITY SHALL DETERMINE

4 THE PERCENTAGE, WHICH SHALL NOT EXCEED 25%, OF THE TAXPAYER'S

5 QUALIFIED INVESTMENT FOR RESEARCH EXPERIMENTAL ACTIVITIES THAT

6 THE ELIGIBLE TAXPAYER MAY CLAIM AS A CREDIT UNDER SUBSECTION

7 (5). THE MAXIMUM CREDIT THAT THE MICHIGAN ECONOMIC GROWTH

8 AUTHORITY MAY APPROVE FOR EACH ELIGIBLE TAXPAYER SHALL NOT EXCEED

9 $1,000,000.00 PER TAXPAYER PER TAX YEAR.

10 (8) THE MICHIGAN ECONOMIC GROWTH AUTHORITY SHALL DETERMINE

11 ELIGIBLE TAXPAYERS AND ISSUE THE LETTER UNDER SUBSECTION (6) TO

12 ELIGIBLE TAXPAYERS IF THE QUALIFIED INVESTMENT OF THE ELIGIBLE

13 TAXPAYER MEETS AT LEAST 1 OF THE FOLLOWING CRITERIA:

14 (A) THE ACTIVITY ON WHICH THE QUALIFIED INVESTMENT IS BASED

15 IS CONDUCTED IN A CERTIFIED TECHNOLOGY PARK.

16 (B) THE QUALIFIED INVESTMENT IS IN A BUSINESS SECTOR TAR-

17 GETED BY THE MICHIGAN ECONOMIC DEVELOPMENT CORPORATION FOR

18 INCREASED ECONOMIC DEVELOPMENT WITHIN THIS STATE.

19 (C) THE QUALIFIED INVESTMENT IS DIRECTLY RELATED TO AN

20 AGREEMENT BETWEEN AN INSTITUTION OF HIGHER EDUCATION IN THIS

21 STATE AND A BUSINESS FOR A PRODUCT OR TECHNOLOGY BASED ON

22 ADVANCED TECHNOLOGY RESEARCH AND DEVELOPMENT CONDUCTED BY THE

23 INSTITUTION OF HIGHER EDUCATION.

24 (9) AN ELIGIBLE TAXPAYER SHALL ATTACH THE LETTER ISSUED

25 UNDER SUBSECTION (6) TO THE ANNUAL RETURN ON WHICH A CREDIT UNDER

26 SUBSECTION (5) IS CLAIMED.

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1 (10) IF THE CREDIT ALLOWED UNDER SUBSECTION (5) FOR THE TAX

2 YEAR AND ANY UNUSED CARRYFORWARD OF THE CREDIT ALLOWED UNDER

3 SUBSECTION (5) EXCEED THE TAX LIABILITY OF THE TAXPAYER FOR THE

4 TAX YEAR, THE EXCESS SHALL NOT BE REFUNDED, BUT MAY BE CARRIED

5 FORWARD AS AN OFFSET TO THE TAX LIABILITY IN SUBSEQUENT TAX YEARS

6 FOR 5 TAX YEARS OR UNTIL THE EXCESS CREDIT IS USED UP, WHICHEVER

7 OCCURS FIRST.

8 (11) A TAXPAYER MAY TRANSFER ALL OR A PORTION OF THE TAX

9 CREDIT ALLOWED UNDER SUBSECTION (5). A TAX CREDIT TRANSFER UNDER

10 THIS SUBSECTION IS IRREVOCABLE AND SHALL BE MADE IN THE TAX YEAR

11 IN WHICH THE LETTER UNDER SUBSECTION (6) IS ISSUED. A TAXPAYER

12 MAY CLAIM A PORTION OF A CREDIT AND TRANSFER THE REMAINING TAX

13 CREDIT AMOUNT. EXCEPT AS OTHERWISE PROVIDED IN THIS SUBSECTION,

14 IF THE TAXPAYER BOTH CLAIMS AND TRANSFERS PORTIONS OF THE TAX

15 CREDIT, THE TAXPAYER SHALL CLAIM THE PORTION IT CLAIMS IN THE TAX

16 YEAR IN WHICH THE LETTER UNDER SUBSECTION (6) IS ISSUED. IF A

17 TAXPAYER TRANSFERS ALL OR A PORTION OF THE TAX CREDIT TO MORE

18 THAN 1 TAXPAYER, THE TAXPAYER SHALL ALLOCATE THE TAX CREDIT TO

19 EACH TRANSFEREE. A TRANSFEREE SHALL NOT SUBSEQUENTLY TRANSFER A

20 TAX CREDIT OR ANY PORTION OF A TAX CREDIT TRANSFERRED UNDER THIS

21 SUBSECTION. THE TAX CREDIT TRANSFER UNDER THIS SUBSECTION SHALL

22 BE MADE ON A FORM PRESCRIBED BY THE DEPARTMENT OF TREASURY. THE

23 TAXPAYER SHALL SEND A COPY OF THE COMPLETED TRANSFER FORM TO THE

24 MICHIGAN ECONOMIC GROWTH AUTHORITY AND THE DEPARTMENT NOT MORE

25 THAN 30 DAYS AFTER THE TRANSFER IS MADE. THE TRANSFEREE SHALL

26 ATTACH A COPY OF THE COMPLETED TRANSFER FORM TO ITS ANNUAL RETURN

27 REQUIRED TO BE FILED UNDER THE SINGLE BUSINESS TAX ACT, 1975

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1 PA 228, MCL 208.1 TO 208.145, FOR THE TAX YEAR IN WHICH THE

2 TRANSFER IS MADE AND THE TRANSFEREE FIRST CLAIMS A CREDIT, WHICH

3 SHALL BE THE SAME TAX YEAR. THE TAXPAYER SHALL NOT TRANSFER MORE

4 THAN THE ANNUAL CREDIT AMOUNT FOR EACH TAX YEAR.

5 (12) FOR TAX YEARS THAT BEGIN AFTER DECEMBER 31, 2002 AND

6 BEFORE JANUARY 1, 2013, A QUALIFIED TAXPAYER MAY CLAIM A TAX

7 CREDIT FOR THE AMOUNT AUTHORIZED AND FOR WHICH A CERTIFICATE IS

8 ISSUED UNDER SECTION 11 OF THE MICHIGAN EARLY STAGE VENTURE CAPI-

9 TAL INVESTMENT ACT.

10 (13) IF THE CREDIT ALLOWED UNDER SUBSECTION (12) FOR THE TAX

11 YEAR AND ANY UNUSED CARRYFORWARD OF THE CREDIT EXCEED THE

12 TAXPAYER'S TAX LIABILITY FOR THE TAX YEAR, THAT PORTION OF THE

13 TAX LIABILITY THAT EXCEEDS THE TAX LIABILITY FOR THE TAX YEAR

14 SHALL NOT BE REFUNDED BUT MAY BE CARRIED FORWARD FOR 5 YEARS OR

15 UNTIL USED UP, WHICHEVER OCCURS FIRST. FOR TAX YEARS THAT BEGIN

16 AFTER DECEMBER 31, 2013, IF THE TAXPAYER HAS UNUSED CARRYFORWARD,

17 THE TAXPAYER MAY CONTINUE TO USE THAT CARRYFORWARD FOR THE

18 REMAINDER OF THE 5-YEAR PERIOD OR UNTIL IT IS USED UP, WHICHEVER

19 OCCURS FIRST.

20 (14) A CERTIFIED INVESTOR MAY TRANSFER ALL OR A PORTION OF

21 THE TAX CREDIT ALLOWED UNDER SUBSECTION (12). A TAX CREDIT

22 TRANSFER UNDER THIS SUBSECTION IS IRREVOCABLE AND SHALL BE MADE

23 IN THE TAX YEAR IN WHICH THE CERTIFICATE UNDER SECTION 11 OF THE

24 MICHIGAN EARLY STAGE VENTURE CAPITAL INVESTMENT ACT IS ISSUED. A

25 CERTIFIED INVESTOR MAY CLAIM A PORTION OF A CREDIT AND TRANSFER

26 THE REMAINING TAX CREDIT AMOUNT. EXCEPT AS OTHERWISE PROVIDED IN

27 THIS SUBSECTION, IF THE CERTIFIED INVESTOR BOTH CLAIMS AND

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1 TRANSFERS PORTIONS OF THE TAX CREDIT, THE CERTIFIED INVESTOR

2 SHALL CLAIM THE PORTION IT CLAIMS IN THE TAX YEAR IN WHICH THE

3 CERTIFICATE UNDER SECTION 11 OF THE MICHIGAN EARLY STAGE VENTURE

4 CAPITAL INVESTMENT ACT IS ISSUED. IF A CERTIFIED INVESTOR TRANS-

5 FERS ALL OR A PORTION OF THE TAX CREDIT TO MORE THAN 1 TAXPAYER,

6 THE CERTIFIED INVESTOR SHALL ALLOCATE THE TAX CREDIT TO EACH

7 TRANSFEREE. A TRANSFEREE SHALL NOT SUBSEQUENTLY TRANSFER A TAX

8 CREDIT OR ANY PORTION OF A TAX CREDIT TRANSFERRED UNDER THIS

9 SECTION. THE TAX CREDIT TRANSFER UNDER THIS SUBSECTION SHALL BE

10 MADE ON A FORM PRESCRIBED BY THE DEPARTMENT. THE CERTIFIED

11 INVESTOR SHALL SEND A COPY OF THE COMPLETED TRANSFER FORM TO THE

12 DEPARTMENT IN THE TAX YEAR IN WHICH THE TRANSFER IS MADE. THE

13 TRANSFEREE SHALL ATTACH A COPY OF THE COMPLETED TRANSFER FORM TO

14 ITS ANNUAL RETURN REQUIRED TO BE FILED UNDER THIS ACT FOR THE TAX

15 YEAR IN WHICH THE TRANSFER IS MADE AND THE TRANSFEREE FIRST

16 CLAIMS A CREDIT, WHICH SHALL BE THE SAME TAX YEAR. A CERTIFIED

17 INVESTOR SHALL NOT TRANSFER MORE THAN THE ANNUAL CREDIT AMOUNT

18 AUTHORIZED FOR THAT CERTIFIED INVESTOR FOR EACH TAX YEAR.

19 (15) AS USED IN THIS SECTION:

20 (A) "ALTERNATIVE ENERGY MARINE PROPULSION SYSTEM",

21 "ALTERNATIVE ENERGY SYSTEM", "ALTERNATIVE ENERGY VEHICLE", AND

22 "ALTERNATIVE ENERGY TECHNOLOGY" MEAN THOSE TERMS AS DEFINED IN

23 SECTION 9I OF THE GENERAL PROPERTY TAX ACT, 1893 PA 206,

24 MCL 211.9I.

25 (B) "ALTERNATIVE ENERGY ZONE" MEANS A RENAISSANCE ZONE DES-

26 IGNATED AS AN ALTERNATIVE ENERGY ZONE BY THE BOARD OF THE

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1 MICHIGAN STRATEGIC FUND UNDER SECTION 8A OF THE MICHIGAN

2 RENAISSANCE ZONE ACT, 1996 PA 376, MCL 125.2688A.

3 (C) "CERTIFIED INVESTOR" MEANS THAT TERM AS DEFINED IN THE

4 MICHIGAN EARLY STAGE VENTURE CAPITAL INVESTMENT ACT.

5 (D) "CERTIFIED TECHNOLOGY PARK" MEANS THAT TERM AS DEFINED

6 IN SECTION 2 OF THE LOCAL DEVELOPMENT FINANCING ACT, 1986 PA 281,

7 MCL 125.2152.

8 (E) "ELIGIBLE TAXPAYER" MEANS A TAXPAYER THAT WAS APPROVED

9 AND ISSUED A LETTER BY THE MICHIGAN ECONOMIC GROWTH AUTHORITY

10 UNDER SUBSECTION (6).

11 (F) "INSTITUTION OF HIGHER EDUCATION" MEANS A COLLEGE OR

12 UNIVERSITY DESCRIBED IN SECTION 4, 5, OR 6 OF ARTICLE VIII OF THE

13 STATE CONSTITUTION OF 1963; A COMMUNITY COLLEGE OR JUNIOR COLLEGE

14 ESTABLISHED UNDER SECTION 7 OF ARTICLE VIII OF THE STATE CONSTI-

15 TUTION OF 1963; OR A PRIVATE COLLEGE OR UNIVERSITY IN THIS

16 STATE.

17 (G) "MICHIGAN ECONOMIC GROWTH AUTHORITY" MEANS THE MICHIGAN

18 ECONOMIC GROWTH AUTHORITY CREATED IN THE MICHIGAN ECONOMIC GROWTH

19 AUTHORITY ACT, 1995 PA 24, MCL 207.801 TO 207.810.

20 (H) "QUALIFIED ALTERNATIVE ENERGY ENTITY" MEANS A TAXPAYER

21 LOCATED AND CONDUCTING A QUALIFIED BUSINESS ACTIVITY WITHIN AN

22 ALTERNATIVE ENERGY ZONE.

23 (I) "QUALIFIED BUSINESS ACTIVITY" MEANS RESEARCH, DEVELOP-

24 MENT, ENHANCEMENT, OR MANUFACTURING OF ALTERNATIVE ENERGY TECH-

25 NOLOGY OR ANY BUSINESS ACTIVITY THAT SUPPORTS THE RESEARCH,

26 DEVELOPMENT, ENHANCEMENT, OR MANUFACTURING OF ALTERNATIVE ENERGY

27 TECHNOLOGY.

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1 (J) "QUALIFIED EMPLOYEE" MEANS AN INDIVIDUAL WHO IS EMPLOYED

2 BY A QUALIFIED ALTERNATIVE ENERGY ENTITY, WHOSE JOB RESPONSIBILI-

3 TIES ARE RELATED TO THE RESEARCH, DEVELOPMENT, OR MANUFACTURING

4 ACTIVITIES OF THE QUALIFIED ALTERNATIVE ENERGY ENTITY, AND WHOSE

5 REGULAR PLACE OF EMPLOYMENT IS WITHIN AN ALTERNATIVE ENERGY

6 ZONE.

7 (K) "QUALIFIED INVESTMENT" MEANS THE INCREASE IN EXPENDI-

8 TURES FOR RESEARCH EXPERIMENTAL ACTIVITIES IN THE TAX YEAR BY THE

9 ELIGIBLE TAXPAYER AS COMPARED TO THE AVERAGE EXPENDITURES FOR

10 RESEARCH EXPERIMENTAL ACTIVITIES BY THE ELIGIBLE TAXPAYER OVER

11 THE 4 TAX YEARS IMMEDIATELY PRECEDING THE TAX YEAR IN WHICH THE

12 CREDIT IS CLAIMED. IF AN ELIGIBLE TAXPAYER'S EXPENDITURES FOR

13 RESEARCH EXPERIMENTAL ACTIVITIES FOR THE TAX YEAR ARE NOT MORE

14 THAN THE AVERAGE EXPENDITURES FOR RESEARCH EXPERIMENTAL ACTIVI-

15 TIES OVER THE 4 TAX YEARS IMMEDIATELY PRECEDING THE TAX YEAR IN

16 WHICH THE CREDIT IS CLAIMED, THE ELIGIBLE TAXPAYER SHALL NOT

17 CLAIM A CREDIT FOR THAT TAX YEAR. AN AFFILIATED GROUP AS DEFINED

18 IN THIS ACT, A CONTROLLED GROUP OF CORPORATIONS AS DEFINED IN

19 SECTION 1563 OF THE INTERNAL REVENUE CODE AND FURTHER DESCRIBED

20 IN 26 C.F.R. 1.414(b)-1 AND 1.414(c)-1 TO 1.414(c)-5, OR AN

21 ENTITY UNDER COMMON CONTROL AS DEFINED BY THE INTERNAL REVENUE

22 CODE SHALL NOT TAKE THE CREDIT ALLOWED BY THIS SECTION UNLESS THE

23 BUSINESS ACTIVITIES OF THE ENTITIES ARE CONSOLIDATED. IF THE

24 ELIGIBLE TAXPAYER HAS EXPENDITURES FOR RESEARCH EXPERIMENTAL

25 ACTIVITIES FOR LESS THAN 4 YEARS, THE AVERAGE EXPENDITURES FOR

26 RESEARCH EXPERIMENTAL ACTIVITIES FOR PURPOSES OF THIS SUBDIVISION

27 IS THE AVERAGE OF EXPENDITURES FOR RESEARCH EXPERIMENTAL

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1 ACTIVITIES FOR THE NUMBER OF YEARS IN WHICH THE ELIGIBLE TAXPAYER

2 HAD EXPENDITURES FOR RESEARCH EXPERIMENTAL ACTIVITIES.

3 (l) "QUALIFIED TAXPAYER" MEANS A TAXPAYER THAT HAS A CERTIF-

4 ICATE ISSUED UNDER SECTION 11 OF THE MICHIGAN EARLY STAGE VENTURE

5 CAPITAL INVESTMENT ACT OR A TAXPAYER THAT IS A TRANSFEREE UNDER

6 SECTION 13 OF THE MICHIGAN EARLY STAGE VENTURE CAPITAL INVESTMENT

7 ACT.

8 (M) "QUALIFIED WITHHOLDING AMOUNT" MEANS AN AMOUNT EQUAL TO

9 THE AMOUNT OF TAX THAT WOULD HAVE BEEN WITHHELD PURSUANT TO THE

10 INCOME TAX ACT OF 1967, 1967 PA 281, MCL 206.1 TO 206.532, BY THE

11 QUALIFIED ALTERNATIVE ENERGY ENTITY FOR ALL QUALIFIED EMPLOYEES

12 IN THE CALENDAR YEAR IMMEDIATELY PRECEDING THE CLOSE OF THE QUAL-

13 IFIED ALTERNATIVE ENERGY ENTITY FISCAL YEAR FOR WHICH THE CREDIT

14 UNDER SUBSECTION (4) IS BEING CLAIMED, IF THOSE QUALIFIED EMPLOY-

15 EES HAD CLAIMED THE SAME NUMBER OF PERSONAL AND DEPENDENCY EXEMP-

16 TIONS THAT THEY ARE ALLOWED TO CLAIM ON THEIR ANNUAL RETURN UNDER

17 SECTION 30(2) OF THE INCOME TAX ACT OF 1967, 1967 PA 281,

18 MCL 206.30.

19 (N) "RENAISSANCE ZONE" MEANS A RENAISSANCE ZONE DESIGNATED

20 UNDER THE MICHIGAN RENAISSANCE ZONE ACT, 1996 PA 376,

21 MCL 125.2681 TO 125.2696.

22 (O) "RESEARCH EXPERIMENTAL ACTIVITIES" MEANS RESEARCH AND

23 EXPERIMENTAL EXPENDITURES AS DESCRIBED IN SECTION 174 OF THE

24 INTERNAL REVENUE CODE.

25 (P) "TAX LIABILITY ATTRIBUTABLE TO RESEARCH, DEVELOPMENT,

26 AND MANUFACTURING OF AN ALTERNATIVE ENERGY MARINE PROPULSION

27 SYSTEM, AN ALTERNATIVE ENERGY SYSTEM, AN ALTERNATIVE ENERGY

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1 VEHICLE, OR ALTERNATIVE ENERGY TECHNOLOGY" MEANS THE TAXPAYER'S

2 TAX LIABILITY MULTIPLIED BY A FRACTION THE NUMERATOR OF WHICH IS

3 THE RATIO OF THE AVERAGE VALUE OF THE TAXPAYER'S PROPERTY IN THIS

4 STATE NOT IN A RENAISSANCE ZONE USED FOR THE RESEARCH, DEVELOP-

5 MENT, AND MANUFACTURING OF AN ALTERNATIVE ENERGY MARINE PROPUL-

6 SION SYSTEM, AN ALTERNATIVE ENERGY SYSTEM, AN ALTERNATIVE ENERGY

7 VEHICLE, OR ALTERNATIVE ENERGY TECHNOLOGY TO THE AVERAGE VALUE OF

8 ALL OF THE TAXPAYER'S PROPERTY IN THIS STATE PLUS THE RATIO OF

9 THE TAXPAYER'S PAYROLL IN THIS STATE NOT IN A RENAISSANCE ZONE

10 FOR RESEARCH, DEVELOPMENT, AND MANUFACTURING OF AN ALTERNATIVE

11 ENERGY MARINE PROPULSION SYSTEM, AN ALTERNATIVE ENERGY SYSTEM, AN

12 ALTERNATIVE ENERGY VEHICLE, OR ALTERNATIVE ENERGY TECHNOLOGY TO

13 ALL OF THE TAXPAYER'S PAYROLL IN THIS STATE AND THE DENOMINATOR

14 OF WHICH IS 2.

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