HB-5047, As Passed House, September 28, 2005

SUBSTITUTE FOR

HOUSE BILL NO. 5047

     A bill to amend 1984 PA 270, entitled

"Michigan strategic fund act,"

by amending the title and sections 4, 5, 6, 7, and 13 (MCL

125.2004, 125.2005, 125.2006, 125.2007, and 125.2013), sections 4,

5, 6, and 13 as amended by 1987 PA 278, and by adding section 94

and chapter 8A.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

TITLE

     An act relating to the economic development of this state; to

create the  Michigan strategic  21st century jobs fund and to

prescribe its powers and duties; to transfer and provide for the

acquisition and succession to the rights, properties, obligations,

and duties of the job development authority and the Michigan

economic development authority to the  Michigan strategic  21st

century jobs fund; to provide for the expenditure of proceeds in

certain funds to which the  Michigan strategic  21st century jobs

fund succeeds in ownership; to provide for the issuance of, and

terms and conditions for, certain notes and bonds;  of the Michigan

strategic fund;  to create certain boards and funds; to create

certain permanent funds; to exempt the property, income, and

operation of the fund and its bonds and notes, and the interest

thereon, from certain taxes; to provide for the creation of certain

centers within and for the purposes of the  Michigan strategic

21st century jobs fund; to provide for the creation and funding of

certain accounts for certain purposes; to impose certain powers and

duties upon certain officials, departments, and authorities of  the

this state; to make certain loans and investments; to provide

penalties; and to repeal  certain acts and parts of acts.

     Sec. 4. As used in this act:

     (a) "Board" means the board of directors of the  Michigan

strategic  21st century jobs fund, except as used in chapter 8A or

where the context clearly requires a different definition.

     (b) "Economic development project" means an endeavor related

to industrial, commercial, or agricultural enterprise. Economic

development project includes, but is not limited to, a theme or

recreation park; agricultural or forestry production, harvesting,

storage, or processing facilities or equipment; and the use of

equipment or facilities designed to produce energy from renewable

resources. Economic development project does not include that

portion of an endeavor devoted to the sale of goods at retail,

except that, as used in relation to the fund insuring a transaction

entered into by a depository institution, and as used in relation

to a loan by the fund to a minority owned business, an economic

development project may include that portion of an endeavor devoted

to the sale of goods at retail. Economic development project does

not include that portion of an endeavor devoted to housing or a

program or activity authorized under chapter 8A.

     (c) "Fund" means the  Michigan strategic  21st century jobs

fund created under section 5, except where the context clearly

requires a different definition.

     (d) "Michigan economic development corporation" or "MEDC"

means the Michigan economic development corporation, the public

body corporate created under section 28 of article VII of the state

constitution of 1963 and the urban cooperation act of 1967, 1967

(Ex Sess) PA 7, MCL 124.501 to 124.512, by a contractual interlocal

agreement effective April 5, 1999, and subsequently amended,

between local participating economic development corporations

formed under the economic development corporations act, 1974 PA

338, MCL 125.1601 to 125.1636, and the fund.

(e)  (d) "Municipality" means a county, city, village,

township, port district, development organization, institution of

higher education, community or junior college, or subdivision or

instrumentality of any of the legal entities listed in this

subdivision.

(f)  (e) "Person" means an individual, sole proprietorship,

partnership, limited partnership, limited liability company, joint

venture, profit or nonprofit corporation including a public or

private college or university, public utility, local industrial

development corporation, economic development corporation, or other

association of persons organized for agricultural, commercial, or

industrial purposes.

(g)  (f) "Project" means an economic development project and,

in addition, means the acquisition, construction, reconstruction,

conversion, or leasing of an industrial, commercial, retail,

agricultural, or forestry enterprise, or any part  thereof  of

these, to carry out the purposes and objectives of this act and of

the fund, including, but not limited to, acquisition of land or

interest in land, buildings, structures, or other planned or

existing planned improvements to land including leasehold

improvements, machinery, equipment, or furnishings which include,

but are not limited to, the following: research parks; office

facilities; engineering facilities; research and development

laboratories; warehousing facilities; parts distribution

facilities; depots or storage facilities; port facilities; railroad

facilities, including trackage, right of way, and appurtenances;

airports; water and air pollution control equipment or waste

disposal facilities; theme or recreational parks; equipment or

facilities designed to produce energy from renewable resources;

farms, ranches, forests, and other agricultural or forestry

commodity producers; agricultural harvesting, storage,

transportation, or processing facilities or equipment; grain

elevators; shipping heads and livestock pens; livestock;

warehouses; wharves and dock facilities; water, electricity, hydro

electric, coal, petroleum, or natural gas provision facilities;

dams and irrigation facilities; sewage, liquid, and solid waste

collection, disposal treatment, and drainage services and

facilities. Project does not include a program or activity

authorized under chapter 8A.

(h)  (g) "Private sector" means other than the fund, a state

or federal source, or an agency  thereof  of a state or the federal

government.

     Sec. 5. (1) There is created by this act a public body

corporate and politic to be known as the  Michigan strategic  21st

century jobs fund. The fund shall be within the department of

commerce  treasury and shall exercise its prescribed statutory

powers, duties, and functions independently of the  director of

commerce  state treasurer.  However, the budgeting, procurement,

and related functions of the fund and administrative

responsibilities for employees of the fund shall be performed under

the direction and supervision of the director of commerce.  The

statutory authority, powers, duties, functions, records, personnel,

property, unexpended balances of appropriations, allocations, and

other funds of the fund, including the functions of budgeting,

procurement, personnel, and management-related functions, shall be

retained by the fund, and the fund shall be an autonomous entity

within the department of treasury in the same manner as the

Michigan employment security commission was designated an

autonomous entity within the Michigan department of labor under

section 379 of the executive organization act of 1965, 1965 PA 380,

MCL 16.479.

     (2)  The  Except as otherwise provided in this act, the

purposes, powers, and duties of the  Michigan strategic  21st

century jobs fund are vested in and shall be exercised by a board

of directors.

     (3)  The  Except as provided in subsection (4), the board

shall consist of the director of the department of  commerce  labor

and economic growth or his or her designee from within the

department of labor and economic growth, the state treasurer or his

or her designee from within the department of treasury, and 7 other

members with knowledge, skill, and experience in the academic,

business, or financial field, who shall be appointed by the

governor with the advice and consent of the senate.  Not more than

2 of the 7 appointed members of the board shall be, during their

term of office on the board, employees of the state of Michigan.

The remainder of the appointed members of the board shall be

representatives  None of the 7 members appointed under this section

shall be employees of this state. Not less than 5 members of the

board appointed under this subsection shall be members of the

private sector. Five of the 7  appointed members appointed under

this subsection shall serve for fixed terms.  Of the 5 fixed-term

members first appointed, 2 shall be appointed for a term that

expires December 31, 1986, and 3 shall be appointed for a term that

expires December 31, 1987. Upon completion of each fixed term

expiring after December 30, 2005, a member shall be appointed for a

term of  3  4 years. Of the private sector members appointed by the

governor for a fixed term, 1 shall be appointed from  1  a list of

3 or more nominees of the speaker of the house of representatives

representing persons within the private sector with experience in

private equity or venture capital investments, commercial lending,

or commercialization of technology and 1 shall be appointed from  1

a list of 3 or more nominees of the senate majority leader

representing persons within the private sector with experience in

private equity or venture capital investments, commercial lending,

or commercialization of technology. A member appointed under this

subsection or subsection (4) shall serve until a successor is

appointed, and a vacancy shall be filled for the balance of the

unexpired term in the same manner as the original appointment. The

2  appointed members appointed under this subsection and serving

without a fixed term shall serve at the pleasure of the governor.

Of the members appointed under this subsection and subsection (4),

there shall be minority, female, and small business representation.

The chief executive officer or director of any state department,

who is a designated member of or an appointee to the board, may

appoint a representative from the department to serve as a voting

member of the fund in the absence of the chief executive officer or

director. After December 31, 2005, at least 2 of the members of the

board shall have experience in private equity or venture capital

investments, at least 1 of the members shall have experience in

commercial lending, and at least 1 of the members of the board

shall have experience in commercialization of technology.

     (4) In addition to the 9 members of the board under subsection

(3), not later than December 15, 2005, the governor shall appoint,

with the advice and consent of the senate, 2 additional members to

the board for terms expiring December 31, 2007. The members

appointed under this subsection shall be from the private sector

and shall have experience in private equity or venture capital

investments, commercial lending, or commercialization of

technology. From the date of the appointment of the members under

this subsection until December 31, 2007, the board shall have 11

members. After December 31, 2007, the board shall have 9 members.

(5)  (4) The governor shall designate 1 member of the board

to serve as its chairperson.  Of the 2 board members serving at the

pleasure of the governor, the  The director of the department of

labor and economic growth or his or her designee from within the

department of labor and economic growth shall serve as president of

the fund. Of the 2 board members serving at the pleasure of the

governor, the governor  shall  may designate 1 member to serve as

the board's president and shall designate the other member to serve

as its vice-president  if a vice-president is designated  of the

fund. The chairperson,  president , and vice-president, if a vice-

president is designated, shall serve as those officers at the

pleasure of the governor.

(6)  (5) Members of the board shall serve without

compensation for their membership on the board, except that  the

president and vice-president shall receive such compensation as is

reasonable and established by the board, and members of the board

shall  may receive reasonable reimbursement for necessary travel

and expenses.

(7)  (6) The board may delegate to its president, vice-

president, staff, or others those functions and authority that the

board deems necessary or appropriate, which may include the

oversight and supervision of employees of the fund. However,

responsibilities specifically vested in the board under chapter 8a

shall be performed by the board and shall not be transferred to the

MEDC. Except as otherwise provided in this act, the MEDC shall

provide all staffing, support, and administrative services

necessary to implement chapter 8a.

(8)  (7) A majority of the members of the board serving and

present in person at a board meeting constitutes a quorum for the

transaction of business at a meeting, or the exercise of a power or

function of the fund, notwithstanding the existence of 1 or more

vacancies. The board may act only by resolution approved by a

majority of board members appointed and serving. Voting upon action

taken by the board shall be conducted by majority vote of the

members present in person at a meeting of the board or, if

authorized by the bylaws of the board, by use of  amplified

telephonic  telecommunications or other electronic equipment. The

fund shall meet at the call of the chair and as may be provided in

the bylaws of the fund. Meetings of the fund may be held anywhere

within the state of Michigan.

(9)  (8) The business  which  of the board  may perform

shall be conducted at a public meeting of the board held in

compliance with the open meetings act,  Act No. 267 of the Public

Acts of 1976, being sections 15.261 to 15.275 of the Michigan

Compiled Laws 1976 PA 267, MCL 15.261 to 15.275. Public notice of

the time, date, and place of the meeting shall be given in the

manner required by  Act No. 267 of the Public Acts of 1976  the

open meetings act, 1976 PA 267, MCL 15.261 to 15.267, and shall

also be provided on an internet website operated by the fund. A

record or portion of a record, material, or other data received,

prepared, used, or retained by the fund or any of its centers in

connection with an application to or with a project or product

assisted by the fund or any of its centers  which  or with an

award, grant, loan, or investment under chapter 8A that relates to

financial or proprietary information submitted by the applicant

that is considered by the applicant and acknowledged by the board

as confidential shall not be subject to the disclosure requirements

of the freedom of information act,  Act No. 442 of the Public Acts

of 1976, being sections 15.231 to 15.246 of the Michigan Compiled

Laws  1976 PA 442, MCL 15.231 to 15.246. The board may also meet in

closed session pursuant to  Act No. 267 of the Public Acts of 1976

the open meetings act, 1976 PA 267, MCL 15.261 to 15.267, to make a

determination of whether it acknowledges as confidential any

financial or proprietary information submitted by the applicant and

considered by the applicant as confidential. Unless considered

proprietary information, the board shall not acknowledge routine

financial information as confidential. If the board determines that

information submitted to the fund is financial or proprietary

information and is confidential, the board shall release a written

statement, subject to disclosure under the freedom of information

act, 1976 PA 442, MCL 15.231 to 15.246, that states all of the

following:

     (a) The name and business location of the person requesting

that the information submitted be confidential as financial or

proprietary information.

     (b) That the information submitted was determined by the board

to be confidential as financial or proprietary information.

     (c) A broad nonspecific overview of the financial or

proprietary information determined to be confidential.

(10)  (9) The fund shall not disclose financial or

proprietary information not subject to disclosure pursuant to

subsection  (8)  (9) without consent of the applicant submitting

the information.

(11)  (10) Any document to which the fund is a party

evidencing a loan, insurance, mortgage, lease, venture, or other

type of agreement the fund is authorized to enter into shall not be

considered financial or proprietary information that may be exempt

from disclosure under subsection  (8)  (9).

(12)  (11) For purposes of subsections  (8), (9), (10), and

(10)  (11), "financial or proprietary information" means

information  which  that has not been publicly disseminated or

which is unavailable from other sources, the release of which might

cause the applicant significant competitive harm.

     Sec. 6. (1)  Members  Notwithstanding section 3(1) of 1968 PA

317, MCL 15.323, members of the board and officers and employees of

the fund are subject to  Act No. 317 of the Public Acts of 1968,

being sections 15.321 to 15.330 of the Michigan Compiled Laws, or

Act No. 318 of the Public Acts of 1968, being sections 15.301 to

15.310 of the Michigan Compiled Laws  1968 PA 317, MCL 15.321 to

15.330, or 1968 PA 318, MCL 15.301 to 15.310, as applicable.

     (2) A member of the board or officer, employee, or agent of

the fund shall discharge the duties of his or her position in a

nonpartisan manner, with good faith, and with that degree of

diligence, care, and skill which an ordinarily prudent person would

exercise under similar circumstances in a like position. In

discharging the duties, a member of the board or an officer,

employee, or agent, when acting in good faith, may rely upon the

opinion of counsel for the fund, upon the report of an independent

appraiser selected with reasonable care by the board, or upon

financial statements of the fund represented to the member of the

board or officer, employee, or agent of the fund to be correct by

the president or the officer of the fund having charge of its books

or account, or stated in a written report by a certified public

accountant or firm of certified public accountants fairly to

reflect the financial condition of the fund.

     (3) A member of the board shall not make, participate in

making, or in any way attempt to use his or her position as a

member of the board to influence a decision regarding a loan,

grant, investment, or other expenditure under this act to his or

her employer.

     (4) An independent peer review expert approved by the board

under chapter 8a shall not have any financial interest in a

recipient of proceeds from the jobs for Michigan investment fund

created under section 88b.

     (5) A member, employee, or agent of the board shall not engage

in any conduct that constitutes a conflict of interest and shall

immediately advise the board in writing of the details of any

incident or circumstances that may present the existence of a

conflict of interest with respect to the performance of the board-

House Bill No. 5047 (H-7) as amended September 28, 2005

related work or duty of the member, employee, or agent of the

board.

     (6) A member who has a conflict of interest related to any

matter before the board shall disclose the conflict of interest

before the board takes any action with respect to the matter, which

disclosure shall become a part of the record of the board's

official proceedings. The member with the conflict of interest

shall refrain from doing all of the following with respect to the

matter that is the basis of the conflict of interest:

     (a) Voting in the board's proceedings related to the matter.

     (b) Participating in the board's discussion of and

deliberation on the matter.

     (c) Being present at the meeting when the discussion,

deliberation, and voting on the matter take place.

     (d) Discussing the matter with any other board member.

     (7) Failure of a member to comply with subsection (6)

constitutes misconduct in office.

[(8) When authorizing expenditures under this act, the board and the committee shall not consider whether a recipient has made a contribution or expenditure under the Michigan campaign finance act, 1976 PA 388, MCL 169.201 to 169.282.

     (9) Expenditures under this act shall not be used to finance or influence political activities.]

     Sec. 7. The fund shall have the powers  necessary or

convenient to carry out and effectuate the purposes, objectives,

and provisions of this act, the purposes and objectives of the

fund, and duties specified in this act, the powers delegated by

other laws or executive orders, and all other powers necessary and

proper to fully and effectively execute and administer this act,

including, but not limited to, the power to:

     (a) Sue and be sued; to have a seal and alter the same at

pleasure; to have perpetual succession; to make, execute, and

deliver contracts, conveyances, and other instruments necessary or

convenient to the exercise of its powers; and to make and amend

bylaws.

     (b) Solicit and accept gifts, grants, loans, and other aids

from any person or the federal, state, or a local government or any

agency of the federal, state, or a local government, or to

participate in any other way in any federal, state, or local

government program.

     (c) Make grants, loans, and investments; to guarantee and

insure loans, leases, bonds, notes, or other indebtedness, whether

public or private; and to issue letters of credit.

     (d) Construct; acquire by gift, purchase, installment

purchase, or lease; and reconstruct, improve, repair, or equip a

project or any part of a project.

     (e) Borrow money and issue bonds and notes to finance part or

all of the project costs of a project, or of a loan  pursuant to

under subdivision (r) for an export transaction, and to secure

those bonds and notes by mortgage, assignment, or pledge of any of

its money, revenues, income, and properties. The authority provided

by this subdivision includes but is not limited to issuing bonds

and notes to acquire and install machinery, equipment, furnishings,

and other personal property, notwithstanding that the fund does not

own or propose to own or finance the building or land in or near to

which the machinery, equipment, furnishings, and other personal

property is or is to be located.

     (f) Acquire or contract to acquire from any person,

municipality, the federal or state government, or any agency of the

foregoing, or otherwise, leaseholds, real or personal property or

any interest in real or personal property; to own, hold, clear,

improve, and rehabilitate and to sell, assign, exchange, transfer,

convey, lease, mortgage, or otherwise dispose of or encumber

leaseholds, real or personal property or any interest in real or

personal property, as is convenient for the accomplishment of the

purposes of this act and of the fund.

     (g) Procure insurance against any loss in connection with the

fund's property, assets, or activities.

     (h) Invest any money of the fund at the fund's discretion, in

any obligations determined proper by the fund, and name and use

depositories for its money.

     (i) Engage personnel as is necessary and engage the services

of private consultants, managers, counsel, auditors, engineers, and

scientists for rendering professional management and technical

assistance and advice, payable out of any money of the fund legally

available for this purpose.

     (j) Charge, impose, and collect fees and charges in connection

with any transaction and provide for reasonable penalties for

delinquent payment of fees or charges.

     (k) Indemnify and procure insurance indemnifying any members

of the board from personal loss or accountability from liability

asserted by a person on the bonds or notes of the fund or from any

personal liability or accountability by reason of the issuance of

the bonds, notes, insurance, or guarantees; by reason of

acquisition, construction, ownership, or operation of a project; or

by reason of any other action taken or the failure to act by the

fund.

     (l)  Enter into a lease for the use or sale of a project. The

lease may provide for options to purchase or renew.

     (m) Mortgage or create security interests in a project or any

part of a project, or in a lease or loan, or in the rents,

revenues, or sums to be paid thereunder, in favor of the holders of

the bonds or notes issued by the fund.

     (n) Convey or release a project or any part of a project to a

lessee, purchaser, or borrower under any agreement after provision

has been made for the retirement in full of the bonds or notes

issued for that project under terms and conditions provided in the

agreement or as may be agreed with the holders of the bonds or

notes, at any time where the obligation of the lessee, purchaser,

or borrower to make the payments prescribed shall remain fixed as

provided in the agreement notwithstanding the conveyance or

release, or as may otherwise be agreed with the holders of the

bonds or notes.

     (o) Make loans, participate in the making of loans, undertake

commitments to make loans and mortgages, buy and sell loans and

mortgages at public or private sale, rewrite loans and mortgages,

discharge loans and mortgages, foreclose on a mortgage, commence an

action to protect or enforce a right conferred upon the fund by a

law, mortgage, loan, contract, or other agreement, bid for and

purchase property which was the subject of the mortgage at a

foreclosure or other sale, acquire or take possession of the

property and in that event complete, administer, pay the principal

and interest on obligations incurred in connection with that

property, and dispose of and otherwise deal with the property, in a

manner as may be necessary or desirable to protect the interests of

the fund.

     (p) Certify, for the purpose of determining eligible

investments for the basis of a single business tax credit, minority

venture capital companies, as defined by law.

     (q) To create and operate centers, accounts, and funds as

required  or permitted by law for the use and disbursement of

assets of the fund.

     (r) To make loans to a financial institution to facilitate

financing of all or part of an export related transaction

including, but not limited to, pre-export working capital financing

and postexport receivable financing.

     (s) Do all other things necessary or convenient to achieve the

objectives and purposes of the fund, this act, or other laws that

relate to the purposes and responsibilities of the fund.

     Sec. 13. The total debt owed to the fund, excluding rights and

royalties under a venture capital agreement or obligations to the

fund resulting from an industrial development revenue bond or note,

in relation to any 1 project shall at no time exceed 5% of the

total assets of the fund, except that upon approval by a 2/3 vote

of the board this amount may be increased to not to exceed 10% of

the assets of the fund. This section does not apply to a program or

activity authorized under chapter 8A.

                                CHAPTER 8A

     Sec. 88. (1) The legislature finds and declares that the

activities authorized under this chapter to encourage

diversification of the economy and the creation of jobs in this

state are a public purpose and of paramount concern in the interest

of the health, safety, and general welfare of the citizens of this

state. It is the intent of the legislature that the economic

benefits and the creation of jobs resulting from this chapter shall

accrue substantially within this state.

     (2) Activities authorized under this chapter shall not be

considered a project, economic development project, or a product

assisted by the 21st century jobs fund for purposes of chapter 1 or

2.

     Sec. 88a. As used in this chapter:

     (a) "Advanced automotive, manufacturing, and materials

technology" means any technology that involves 1 or more of the

following:

     (i) Materials with engineered properties created through the

development of specialized process and synthesis technology.

     (ii) Nanotechnology, including materials, devices, or systems

at the atomic, molecular, or macromolecular level, with a scale

measured in nanometers.

     (iii) Microelectromechanical systems, including devices or

systems integrating microelectronics with mechanical parts and a

scale measured in micrometers.

     (iv) Improvements to vehicle safety, vehicle performance,

vehicle production, or environmental impact, including, but not

limited to, vehicle equipment and component parts.

     (v) Any technology that involves an alternative energy vehicle

or its components, as alternative energy vehicle is defined under

section 2 of the Michigan next energy authority act, 2002 PA 593,

MCL 207.822.

     (vi) Advanced computing or electronic device technology related

to technology described under this subdivision.

     (vii) Design, engineering, testing, or diagnostics related to

technology described under this subdivision.

     (viii) Product research and development related to technology

described under this subdivision.

     (ix) A new technology, device, or system that enhances or

improves the manufacturing process of wood, timber, or

agricultural-based products.

     (b) "Advanced computing" means any technology used in the

design and development of 1 or more of the following:

     (i) Computer hardware and software.

     (ii) Data communications.

     (iii) Information technologies.

     (c) "Alternative energy technology" means applied research or

commercialization of new or next generation technology in 1 or more

of the following:

     (i) Alternative energy technology as that term is defined in

section 2 of the Michigan next energy authority act, 2002 PA 593,

MCL 207.822.

     (ii) Devices or systems designed and used solely for the

purpose of generating energy from agricultural crops, residue and

waste generated from the production and processing of agricultural

products, animal wastes, or food processing wastes, not including a

conventional gasoline or diesel fuel engine or retrofitted

conventional gasoline or diesel fuel engine.

     (iii) Advanced computing or electronic device technology related

to technology described under this subdivision.

     (iv) Design, engineering, testing, or diagnostics related to

technology described under this subdivision.

     (v) Product research and development related to a technology

described under this subdivision.

     (d) "Applied research" means translational research conducted

with the objective of attaining a specific benefit or to solve a

practical problem, or other research 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 probability of commercial application to create

jobs in this state.

     (e) "Basic research" means any 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.

     (f) "Commercialization" means the transition from research to

the actions necessary to achieve market entry and general market

competitiveness of new innovative technologies, processes, and

products and the services that support, assist, equip, finance, or

promote an entity with that transition.

     (g) "Competitive edge technology" means 1 or more of the

following:

     (i) Life sciences technology.

     (ii) Advanced automotive, manufacturing, and materials

technology.

     (iii) Homeland security and defense technology.

     (iv) Alternative energy technology.

     (h) "Competitive edge technology grant fund" or "grant fund"

means the competitive edge technology grant fund created in section

88i.

     (i) "Electronic device technology" means any technology that

involves microelectronics, semiconductors, electronic equipment,

and instrumentation, radio frequency, microwave, and millimeter

electronics; optical and optic-electrical devices; or data and

digital communications and imaging devices.

     (j) "Fund board" means the board of the 21st century jobs fund

described in section 5.

     (k) "Homeland security and defense technology" means

technology that assists in the assessment of threats or damage to

the general population and critical infrastructure, protection of,

defense against, or mitigation of the effects of foreign or

domestic threats, disasters, or attacks, or support for crisis or

response management, including, but not limited to, 1 or more of

the following:

     (i) Sensors, systems, processes, or equipment for

communications, identification and authentication, screening,

surveillance, tracking, and data analysis.

     (ii) Advanced computing or electronic device technology related

to technology described under this subdivision.

     (iii) Aviation technology, including, but not limited to,

avionics, airframe design, sensors, early warning systems, and

services related to technology described under this subdivision.

     (iv) Design, engineering, testing, or diagnostics related to

technology described under this subdivision.

     (v) Product research and development related to technology

described under this subdivision.

     (l) "Independent peer review expert" means a person or persons

approved by the board with appropriate expertise to conduct an

independent, unbiased, objective, and competitive evaluation of

activities funded under this chapter. The person or persons shall

demonstrate the capability and experience, as appropriate or

necessary for the particular activity funded, to do all of the

following:

     (i) Conduct a highly competitive and intensive, independent,

multiphased, peer-review-based evaluation process.

     (ii) Employ personnel with appropriate business, scientific,

technical, commercial, or other specialized expertise to carry out

each aspect of the evaluation process.

     (iii) Provide recommendations to or assist the board in

identifying high-quality activities for funding that are likely to

result in the development and commercialization of competitive edge

technology and job creation in this state. The recommendations

shall include all materials used by the independent peer review

expert in making the recommendation.

     (iv) Assure that any peer review process developed maintains a

high level of integrity.

     (m) "Institution of higher education" means an institution of

higher education or a community or junior college described in

section 4, 5, 6, or 7 of article VIII of the state constitution of

1963 or an independent nonprofit degree-granting institution of

postsecondary education in this state that is approved by the state

board of education.

     (n) "Jobs for Michigan investment fund" or "investment fund"

means the jobs for Michigan investment fund created in section 88f.

     (o) "Life sciences" means science for the examination or

understanding of life or life processes, including, but not limited

to, all of the following:

     (i) Bioengineering.

     (ii) Biomedical engineering.

     (iii) Genomics.

     (iv) Proteomics.

     (v) Molecular and chemical ecology.

     (vi) Biotechnology, including any technology that uses living

organisms, cells, macromolecules, microorganisms, or substances

from living organisms to make or modify a product for useful

purposes. Biotechnology or life sciences does not include any of

the following:

     (A) Activities prohibited under section 2685 of the public

health code, 1978 PA 368, MCL 333.2685.

     (B) Activities prohibited under section 2688 of the public

health code, 1978 PA 368, MCL 333.2688.

     (C) Activities prohibited under section 2690 of the public

health code, 1978 PA 368, MCL 333.2690.

     (D) Activities prohibited under section 16274 of the public

health code, 1978 PA 368, MCL 333.16274.

     (E) Stem cell research with human embryonic tissue.

     (p) "Life sciences technology" means any technology derived

from life sciences intended to improve human health or the overall

quality of human life, including, but not limited to, systems,

processes, or equipment for drug or gene therapies, biosensors,

testing, medical devices or instrumentation with a therapeutic or

diagnostic value, a pharmaceutical or other product that requires

United States food and drug administration approval or registration

prior to its introduction in the marketplace and is a drug or

medical device as defined by the federal food, drug, and cosmetic

act, 21 USC 301 to 399, or 1 or more of the following:

     (i) Advanced computing or electronic device technology related

to technology described under this subdivision.

     (ii) Design, engineering, testing, or diagnostics related to

technology or the commercial manufacturing of technology described

under this subdivision.

     (iii) Product research and development related to technology

described under this subdivision.

     (q) "Qualified business" means a business entity located in

this state.

     (r) "Qualified mezzanine fund" means a person or entity

primarily engaged in making loans or investments ranging in size

from $250,000.00 to $10,000,000.00 that is managed by 2 or more

individuals with no less than 5 years' direct experience in

mezzanine lending or capital investments and that holds investment

capital or has commitments from investors other than the fund and

at least 2 financial institutions.

     (s) "Qualified private equity fund" means a firm principally

or primarily engaged in investing in or acquiring businesses that

is managed by 2 or more individuals with no less than 5 years of

direct experience in private equity investments, and that holds

investment capital from investors other than the fund.

     (t) "Qualified venture capital fund" means a firm principally

or primarily engaged in investing in or acquiring early stage

businesses with growth potential that have not yet demonstrated

consistent profitability or a proven business model, that is

managed by 2 or more individuals with not less than 5 years of

direct experience in venture capital, and that holds capital from

investors other than the fund.

     (u) "Small business" means a business entity formed or doing

business in this state, including the affiliates of the business

concern, which business entity is independently owned and operated

and employs fewer than 250 full-time employees or has gross annual

sales of less than $6,000,000.00.

     (v) "21st century investments" means investments in 1 or more

of the following:

     (i) Commercial loan guarantees under a loan enhancement program

operated by the fund.

     (ii) Private equity investments under a private equity

investment program operated by the fund.

     (iii) Venture capital investments under a venture capital

investment program operated by the fund and mezzanine investments

under a mezzanine investment program operated by the fund.

     (w) "Strategic economic investment board" or "board" means the

strategic economic investment board created in section 88g.

     (x) "University technology transfer" means innovative methods

to accelerate the creation of start-up companies affiliated with

institutions of higher education or the transfer of competitive

edge technology research from an institution of higher education to

a qualified business in Michigan.

     Sec. 88b. (1) The fund shall create and operate programs

relating to 21st century investments and determine the annual

allocation of money to the investment fund and the grant fund. The

fund board shall not expend more than the following amounts from

the 21st century jobs trust fund created in the Michigan trust fund

act, 2000 PA 489, MCL 12.251 to 12.256, for the following purposes:

     (a) 25% for the loan enhancement program.

     (b) 40% for the private equity investment program, the venture

capital investment program, and the mezzanine investment program

combined.

     (c) 70% for the commercialization of competitive edge

technology.

     (2) The fund and all members of the fund board have a

fiduciary duty to the citizens of this state in all decisions made

by the fund and fund board for 21st century investment programs in

this chapter.

     (3) The fund board shall select qualified private equity funds

and qualified venture capital funds by issuing a request for

proposal. At a minimum, the request for proposal shall require the

responding entities to disclose any conflict of interest, disclose

any investigations by the internal revenue service, the securities

and exchange commission, or any other federal or state taxing or

securities regulatory body, or court, or pertinent litigation

regarding the conduct of the entity. The fund board shall establish

a standard process to evaluate proposals submitted as a result of a

request for proposal and appoint a committee to review the

proposals.

     (4) The fund board shall ensure that a recipient of money

under sections 88c, 88d, and 88e agrees as a condition of receiving

the money not to use the money for any of the following:

     (a) The development of a stadium or arena for use by a

professional sports team.

     (b) The development of a casino regulated by this state under

the Michigan gaming control and revenue act, the Initiated Law of

1996, MCL 432.201 to 432.226, a casino at which gaming is conducted

under the Indian gaming regulatory act, Public Law 100-497, 102

Stat. 2467, or property associated or affiliated with the operation

of either type of casino described in this subdivision, including,

but not limited to, a parking lot, hotel, motel, or retail store.

     (c) A recipient or an affiliate of the recipient who is

incorporated in a tax haven country after September 11, 2001, but

with the United States as the principal market for the public

trading of the corporation's stock, as determined by the board. As

used in this section, "tax haven country" includes a country with

tax laws that facilitate avoidance by a corporation or an affiliate

of the corporation of United States tax obligations, including

Barbados, Bermuda, British Virgin Islands, Cayman Islands,

Commonwealth of the Bahamas, Cyprus, Gibraltar, Isle of Man, the

principality of Liechtenstein, the principality of Monaco, and the

Republic of the Seychelles.

     (d) To induce qualified businesses or small businesses to

leave this state.

     (5) The fund board shall ensure that money expended under

sections 88c, 88d, and 88e shall not be used for any of the

following:

     (a) Provision of money to a person who has been convicted of a

criminal offense incident to the application for or performance of

a state contract or subcontract. As used in this subdivision, if a

person is a business entity, person includes affiliates,

subsidiaries, officers, directors, managerial employees, and any

person who, directly or indirectly, holds a pecuniary interest in

that business entity of 20% or more.

     (b) Provision of money to a person who has been convicted of a

criminal offense, or held liable in a civil proceeding, that

negatively reflects on the person's business integrity, based on a

finding of embezzlement, theft, forgery, bribery, falsification or

destruction of records, receiving stolen property, or violation of

state or federal antitrust statutes. As used in this subdivision,

if a person is a business entity, person includes affiliates,

subsidiaries, officers, directors, managerial employees, and any

person who, directly or indirectly, holds a pecuniary interest in

that business entity of 20% or more.

     (6) Before adopting a resolution that establishes or changes a

21st century investment program, including any fees, charges, or

penalties attached to that program, the fund board shall give

notice of the proposed resolution to the governor, to members of

the senate and house of representatives appropriation committees,

to members of the standing committees of the senate and house of

representatives that deal with the subject matter of the proposed

resolution, and to each person who requested from the fund in

writing or electronically to be notified regarding proposed

resolutions. The notice and proposed resolution and all attachments

shall be published on the fund's internet website. The fund board

shall hold a public hearing not sooner than 14 days and not longer

than 35 days from the date notice of a proposed resolution is given

and offer a person an opportunity to present data, views,

questions, and arguments. Members of the fund board or 1 or more

persons designated by the fund board who have knowledge of the

subject matter of the proposed resolution shall be present at the

public hearing and shall participate in the discussion of the

proposed resolution. The fund board may act on the proposed

resolution no sooner than 15 days after the public hearing and all

written comments are received. The fund board shall produce a final

decision document that describes the basis for its decision. The

final resolution and all attachments and the decision document

shall be provided to members of the senate and house of

representatives appropriation committees and to members of the

standing committees of the senate and house of representatives that

deal with the subject matter of the resolution and shall be

published on the fund's internet website.

     (7) The notice described in subsection (6) shall include all

of the following:

     (a) A copy of the proposed resolution and all attachments.

     (b) A statement that the addressee may express any data,

views, or arguments regarding the proposed resolution.

     (c) The address to which written comments may be sent and the

date by which comments must be mailed or electronically

transmitted, which date shall not be less than 35 days from the

date of the mailing or electronic transmittal of the notice.

     (d) The date, time, and place of the public hearing.

     (8) The fund board shall hire an executive director to manage

the private equity investment program and the venture capital

investment program. The executive director shall be paid a salary

and bonus comparable to what an individual in a comparable position

with similar responsibilities would be paid in the private sector.

The executive director shall have not less than 10 years'

experience in private equity or venture capital.

     (9) The fund board and board shall not use any money or funds

described in this chapter to purchase or improve real property.

     Sec. 88c. (1) The fund shall create and operate a loan

enhancement program that shall do all of the following:

     (a) Provide a guarantee to financial institutions located in

this state that provide commercial loans to qualified businesses.

     (b) Provide that the financial institution charge a higher

rate of interest for the amount of the loan covered by the

guarantee.

     (c) Provide that a qualified business is only eligible for a

loan guarantee under this section if it has a documented growth

opportunity. As used in this subdivision, "documented growth

opportunity" means a plant expansion, capital equipment investment,

acquisition of intellectual property or technology, or the hiring

of new employees to meet or satisfy a new business opportunity.

     (d) Provide that a qualified business that engages primarily

in retail sales is not eligible for a loan guarantee under this

chapter unless the fund board makes a specific finding that the

loan guarantee supports a new concept that has significant growth

potential.

     (2) As a separate and distinct part of the loan enhancement

program, the fund shall reestablish the small business capital

access program that was previously operated by the fund for small

businesses in a manner similar to how that program was operated

before January 1, 2002. The small business capital access program

shall operate on a market-driven basis and provide for premium

payments by borrowers into a special reserve fund. The small

business capital access program established by the board shall

prohibit an officer, director, principal shareholder of a

participating financial institution, or his or her immediate family

members from receiving a small business capital access program loan

from the financial institution. A loan under the small business

capital access program shall provide that the proceeds of a loan

may only be used for a business purpose within this state and may

not be used for any of the following:

     (a) The construction or purchase of residential housing.

     (b) To finance passive real estate ownership.

     (c) To refinance prior debt from the participating financial

institution that is not part of the small business capital access

program.

     (3) There are no annual minimum or maximum amounts of

investments under the loan enhancement programs operated under

subsection (1) or (2).

     (4) As a separate and distinct part of the loan enhancement

program, the investment fund shall provide $26,000,000.00 to the

Michigan forest finance authority. The money shall only be spent by

the Michigan forest finance authority as provided in an

appropriation. Any funds not spent within 5 years shall return to

the investment fund.

     (5) As a separate and distinct part of the loan enhancement

program, the investment fund shall create and operate a grant

program to expand WIMAX wireless internet systems in this state.

The investment fund shall provide grants not to exceed

$60,000,000.00 over a 3-year period beginning on the date the

amendatory act that added this chapter takes effect.

     Sec. 88d. The fund shall create and operate a private equity

investment program that shall invest only in or alongside a

qualified private equity fund. The private equity investment

program shall do all of the following:

     (a) Provide that the return on investment that is sought is

greater than the return on investment under the commercial loan

portion of the loan enhancement program to reflect the greater

risk.

     (b) Provide that the qualified private equity fund will have

an amount at risk greater than the fund's investment.

     (c) Provide that a qualified private equity fund is not

eligible to participate in the private equity investment program

unless it opens a business development office in this state staffed

with at least 1 full-time equivalent employee who is actively

seeking opportunities for investments in businesses located in this

state unless the investment opportunity requested by the qualified

private equity fund is targeted to a specific transaction that will

save jobs and will not occur without the fund's investment as

determined by the fund board.

     (d) Provide that a qualified private equity fund is not

eligible to participate in the private equity investment program

unless it agrees to make investments in this state at a percentage

rate that is not less than the percentage rate that the fund's

investment in the qualified private equity fund bears to the total

amount in the qualified private equity fund.

     (e) Provide that a qualified private equity fund is not

eligible to participate in the private equity investment program if

its investment strategy provides for the break up and liquidation

of businesses. The fund board shall make sure that the agreements

with a private equity fund have the appropriate provisions to

prohibit the actions described in this subdivision.

     (f) Provide that there are no annual minimum or maximum

amounts of investments under the private equity investment program.

     Sec. 88e. (1) The fund shall create and operate the venture

capital investment program that shall invest only in, or alongside,

a qualified venture capital fund that invests primarily in early

stage businesses. The venture capital investment program shall do

all of the following:

     (a) Provide that the return on investment that is sought is

greater than the return on investment under the commercial loan

portion of the loan enhancement program to reflect the greater

risk.

     (b) Provide that the qualified venture capital fund will have

an amount at risk greater than the fund's investment.

     (c) Provide that a qualified venture capital fund is not

eligible to participate in the venture capital investment program

unless it opens a business development office in this state staffed

with at least 1 full-time equivalent employee who is actively

seeking opportunities for venture capital investments in businesses

located in this state unless the investment opportunity requested

by the qualified venture capital fund is targeted to a specific

transaction involving a competitive edge technology that will not

occur without the fund's investment as determined by the fund

board.

     (d) Provide that a qualified venture capital fund is not

eligible to participate in the venture capital investment program

unless it agrees to make venture capital investments in this state

at a percentage rate that is not less than the percentage rate that

the fund's investment in the qualified venture capital fund bears

to the total amount in the qualified venture capital fund.

     (e) Provide that a qualified venture capital fund is not

eligible to participate in the venture capital investment program

if its investment strategy provides for the break up and

liquidation of businesses. The fund board shall make sure that the

agreements with a venture capital fund have the appropriate

provisions to prohibit the actions described in this subdivision.

     (f) Provide that there are no annual minimum or maximum

amounts of investments under the venture capital investment

program.

     (g) Coordinate with the Michigan early stage venture

investment fund as defined in section 3 of the Michigan early stage

venture investment act of 2003, 2003 PA 296, MCL 125.2233, to

ensure that a continuum of venture capital is available in this

state.

     (h) Provide that 80% of the funds allocated to the venture

capital investment program shall focus on competitive edge

technologies.

     (i) Provide that a qualified venture capital fund may make

follow-up investments that were eligible for investment at the time

of initial investment but that subsequently may not be

characterized as an investment in an early stage business.

     (2) The fund shall create and operate the mezzanine investment

program that shall invest in, or alongside, a qualified mezzanine

fund. The fund shall operate the mezzanine investment program in a

manner similar to the venture capital investment program.

     Sec. 88f. (1) The jobs for Michigan investment fund is created

within the state treasury as a permanent fund described in section

19 of article IX of the state constitution of 1963.

     (2) Money in the investment fund at the close of the fiscal

year shall remain in the investment fund and shall not lapse to the

general fund.

     (3) All expenditures by the investment fund shall be made

pursuant to an appropriation as provided by law.

     (4) The fund board and the board shall not expend over the

life of the investment fund and the grant fund more than 5% of the

initial amount allocated under this chapter for marketing costs,

and not more than 3% of the initial amount allocated under this

chapter for administrative costs and all other costs described in

this chapter.

     (5) The fund board shall maintain a balance in the fund of not

less than $50,000,000.00.

     (6) The investment fund shall be used only as provided in this

chapter for the benefit of the people of this state.

     (7) The investment fund shall consist of all of the following:

     (a) Any funds appropriated to the investment fund from the

21st century jobs trust fund under the Michigan trust fund act,

2000 PA 489, MCL 12.251 to 12.256.

     (b) Earnings, royalties, return on investments, return of

principal, payments made, or other money received by or payable to

the fund under agreements related to grants, loans, investments, or

expenditures by the fund under this chapter.

     (c) Assets, property, money, earnings, royalties, return on

investments, return of principal, payments made, or other money

owed, received by, or payable to the fund or the Michigan economic

development corporation under agreements related to grants, loans,

investments, or other payments funded by appropriations from the

state general fund or tobacco settlement revenue under 1 or more of

the following:

     (i) Section 418 of 1999 PA 120, commonly known as the health

and aging research and development initiative or the Michigan life

sciences corridor initiative, or any successor program.

     (ii) Section 410 of 2000 PA 292, commonly known as the health

and aging research and development initiative or the Michigan life

sciences corridor initiative, or any successor program.

     (iii) Section 410 of 2001 PA 80, commonly known as the health

and aging research and development initiative or the Michigan life

sciences corridor initiative, or any successor program.

     (iv) Section 410 of 2002 PA 517, commonly known as the Michigan

life sciences corridor initiative, or any successor program.

     (v) Section 410 of 2003 PA 169, commonly known as the Michigan

life sciences and technology tri-corridor initiative, or any

successor program.

     (vi) Section 510 of 2004 PA 354, commonly known as the Michigan

technology tri-corridor and life sciences initiative, or any

successor program.

     (vii) Section 801 of 2005 PA 11, commonly known as the

technology tri-corridor and life sciences initiative, or any

successor program.

     (viii) Section 381(1)(c) of 2003 PA 173, providing for payments

to the life sciences commercial development fund.

     (d) Money or assets received by the state treasurer or the

fund from any source for deposit in the investment fund.

     (e) Interest and earnings on any funds or other assets

deposited in the investment fund or other net income of the

investment fund.

     (8) The net income of the investment fund may be expended by

the fund only for purposes authorized under this chapter pursuant

to an appropriation authorized by law. As used in this section, the

net income of the investment fund shall be computed annually as of

the last day of the state fiscal year in accordance with generally

accepted accounting principles, excluding any unrealized gains or

losses.

     (9) The board may establish restricted subaccounts within the

investment fund as necessary to administer the investment fund. The

board may contract with the state treasurer to assist the board in

administering the investment fund. The board may authorize money in

the investment fund not invested as authorized under sections 88c,

88d, and 88e to be managed by the state treasurer as part of the

common cash fund of this state under 1967 PA 55, MCL 12.51 to

12.53. Money managed by the state treasurer under this subsection

shall be separately accounted for by the state treasurer. When

authorized under this subsection, the state treasurer may invest

the funds or assets of the investment fund in any investment

authorized under 1855 PA 105, MCL 21.141 to 21.147, for surplus

funds of this state, in obligations issued by any state or

political subdivision or instrumentality of the United States, or

in any obligation issued, assumed, or guaranteed by a solvent

entity created or existing under the laws of the United States or

of any state, district, or territory of the United States, which

are not in default as to principal or interest.

     (10) A member of the board or officer of the fund shall not

gain from any investment of funds or assets of the investment fund.

A member of the board or officer of the fund shall not have any

direct or indirect interest in an investment of funds or assets of

the investment fund. A member of the board or person connected with

the investment fund directly or indirectly, for himself or herself,

or as an agent or partner of others, shall not borrow any of the

funds or assets of the investment fund or in any manner use funds

or assets of the investment fund except as authorized under this

chapter. A member of the board or officer of the fund shall not

become an endorser or surety or become in any manner an obligor for

money loaned by or borrowed from the investment fund. Failure to

comply with this subsection constitutes misconduct in office.

     Sec. 94. (1) The governor shall inquire into the

administration of this act.

     (2) The governor may remove or suspend any appointive public

officer for violations of this act. The governor may request the

MEDC to remove or suspend any MEDC corporate employee for

violations of this act.

     (3) The governor may remove or suspend any elective public

officer for violation of this act that constitutes gross neglect of

duty, corrupt conduct in office, misfeasance, or malfeasance.

     (4) This section does not apply to any public officer of the

legislative branch or the judicial branch of state government.

     (5) The governor shall report the reasons for any removal or

suspension under this section to the clerk of the house of

representatives and the secretary of the senate.

     Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 93rd Legislature are

enacted into law:

     (a) Senate Bill No. 298.

     (b) Senate Bill No. 359.

     (c) Senate Bill No. 521.

     (d) Senate Bill No. 533.

     (e) House Bill No. 4972.

     (f) House Bill No. 4973.

     (g) House Bill No. 5048.

     (h) House Bill No. 5108.

     (i) House Bill No. 5109.