SB-1174, As Passed House, March 18, 2008

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 1174

A bill to amend 1995 PA 24, entitled

"Michigan economic growth authority act,"

by amending section 3 (MCL 207.803), as amended by 2007 PA 62.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 3. As used in this act:

(a) "Affiliated business" means a business that is 100% owned

and controlled by an associated business.

(b) "Associated business" means a business that owns at least

50% of and controls, directly or indirectly, an authorized

business.

(i) A single eligible business with a unique federal employer

identification number that has met the requirements of section 8

and with which the authority has entered into a written agreement

for a tax credit under section 9.

(ii) A single eligible business with a unique federal employer

identification number that has met the requirements of section 8,

except as provided in this subparagraph, and with which the

authority has entered into a written agreement for a tax credit

under section 9. An eligible business is not required to create

qualified new jobs or maintain retained jobs if qualified new jobs

are created or retained jobs are maintained by an associated or

affiliated business.

(iii) A single eligible business with a unique federal employer

identification number that has met the requirements of section 8,

except as provided in this subparagraph, and with which the

authority has entered into a written agreement for a tax credit

under section 9. An eligible business is not required to create

qualified new jobs or maintain retained jobs if qualified new jobs

are created or retained jobs are maintained by a subsidiary

business that withholds income and social security taxes, or an

employee leasing company or professional employer organization that

has entered into a contractual service agreement with the

authorized business in which the employee leasing company or

professional employer organization withholds income and social

security taxes on behalf of the authorized business.

(d) "Authority" means the Michigan economic growth authority

created under section 4.

(e) "Business" means proprietorship, joint venture,

partnership, limited liability partnership, trust, business trust,

syndicate, association, joint stock company, corporation,

cooperative, limited liability company, or any other organization.

(f) "Distressed business" means a business that meets all of

the following as verified by the Michigan economic growth

authority:

(i) Four years immediately preceding the application to the

authority under this act, the business had 150 or more full-time

jobs in this state.

(ii) Within the immediately preceding 4 years, there has been a

reduction of not less than 30% of the number of full-time jobs in

this state during any consecutive 3-year period. The highest number

of full-time jobs within the consecutive 3-year period shall be

used in order to determine the percentage reduction of full-time

jobs in this subparagraph.

(iii) Is not a seasonal employer as defined in section 27 of the

Michigan employment security act, 1936 (Ex Sess) PA 1, MCL 421.27.

(g) "Eligible business" means a distressed business or

business that proposes to maintain retained jobs after December 31,

1999 or to create qualified new jobs in this state after April 18,

1995 in manufacturing, mining, research and development, wholesale

and trade, film and digital media production, or office operations

or a business that is a qualified high-technology business. An

eligible business does not include retail establishments,

professional sports stadiums, or that portion of an eligible

business used exclusively for retail sales. Professional sports

stadium does not include a sports stadium in existence on June 6,

2000 that is not used by a professional sports team on the date

that an application related to that professional sports stadium is

filed under section 8.

(h) "Facility" means a site or sites within this state in

which an authorized business or subsidiary business maintains

retained jobs or creates qualified new jobs.

(i) "Film and digital media production" means the development,

preproduction, production, postproduction, and distribution of

single media or multimedia entertainment content for distribution

or exhibition to the general public in 2 or more states by any

means and media in any digital media format, film, or video tape,

including, but not limited to, a motion picture, a documentary, a

television series, a television miniseries, a television special,

interstitial television programming, long-form television,

interactive television, music videos, interactive games, video

games, internet programming, an internet video, a sound recording,

a video, digital animation, or an interactive website. Film and

digital media production also includes the development,

preproduction, production, postproduction, and distribution of a

trailer, pilot, video teaser, or demo created primarily to

stimulate the sale, marketing, promotion, or exploitation of future

investment in a film or digital media production. Film or digital

media production does not include the production of any of the

following:

(i) A production for which records are required to be

maintained with respect to any performer in the production under 18

USC 2257.

(ii) A production that includes obscene matter or an obscene

performance as described in 1984 PA 343, MCL 752.361 to 752.374.

(iii) A production that primarily consists of televised news or

current events.

(iv) A production that primarily consists of a live sporting

event.

(v) A production that primarily consists of political

advertising.

(vi) A radio program.

(vii) A weather show.

(viii) A financial market report.

(ix) A talk show.

(x) A game show.

(xi) A production that primarily markets a product or service.

(xii) An awards show or other gala event production.

(xiii) A production with the primary purpose of fund-raising.

(xiv) A production that primarily is for employee training or

in-house corporate advertising or other similar production.

(j) ~~(i)~~ "Full-time job" means a job performed by an individual

for 35 hours or more each week and whose income and social security

taxes are withheld by 1 or more of the following:

(i) An authorized business.

(ii) An employee leasing company.

(iii) A professional employer organization on behalf of the

authorized business.

(iv) Another person as provided in section 8(1)(c).

(v) A business that sells all or part of its assets to an

eligible business that receives a credit under section 8(1) or (5).

(k) ~~(j)~~ "Local governmental unit" means a county, city,

village, or township in this state.

(l) ~~(k)~~ "High-technology activity" means 1 or more of the

following:

(i) Advanced computing, which is any technology used in the

design and development of any of the following:

(A) Computer hardware and software.

(B) Data communications.

(D) Film and digital media production.

(ii) Advanced materials, which are materials with engineered

properties created through the development of specialized process

and synthesis technology.

(iii) Biotechnology, which is any technology that uses living

organisms, cells, macromolecules, microorganisms, or substances

from living organisms to make or modify a product, improve plants

or animals, or develop microorganisms for useful purposes.

Biotechnology does not include human cloning as defined in section

16274 of the public health code, 1978 PA 368, MCL 333.16274, or

stem cell research with embryonic tissue.

(iv) Electronic device technology, which is any technology that

involves microelectronics, semiconductors, electronic equipment,

and instrumentation, radio frequency, microwave, and millimeter

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

digital communications and imaging devices.

(v) Engineering or laboratory testing related to the

development of a product.

(vi) Technology that assists in the assessment or prevention of

threats or damage to human health or the environment, including,

but not limited to, environmental cleanup technology, pollution

prevention technology, or development of alternative energy

sources.

(vii) Medical device technology, which is any technology that

involves medical equipment or products other than a pharmaceutical

product that has therapeutic or diagnostic value and is regulated.

(viii) Product research and development.

(ix) Advanced vehicles technology, which is any technology that

involves electric vehicles, hybrid vehicles, or alternative fuel

vehicles, or components used in the construction of electric

vehicles, hybrid vehicles, or alternative fuel vehicles. For

purposes of this act:

(A) "Electric vehicle" means a road vehicle that draws

propulsion energy only from an on-board source of electrical

energy.

(B) "Hybrid vehicle" means a road vehicle that can draw

propulsion energy from both a consumable fuel and a rechargeable

energy storage system.

(x) Tool and die manufacturing.

(xi) Competitive edge technology as defined in section 88a of

the Michigan strategic fund act, 1984 PA 270, MCL 125.2088a.

(m) (l) "New capital investment" means 1 or more of the

following:

(i) New construction. As used in this subparagraph:

(A) "New construction" means property not in existence on the

date the authorized business enters into a written agreement with

the authority and not replacement construction. New construction

includes the physical addition of equipment or furnishings, subject

to section 27(2)(a) to (o) of the general property tax act, 1893 PA

206, MCL 211.27.

(B) "Replacement construction" means that term as defined in

section 34d(1)(b)(v) of the general property tax act, 1893 PA 206,

MCL 211.34d.

(ii) The purchase of new personal property. As used in this

subparagraph, "new personal property" means personal property that

is not subject to or that is exempt from the collection of taxes

under the general property tax act, 1893 PA 206, MCL 211.1 to

211.155, on the date the authorized business enters into a written

agreement with the authority.

(n) ~~(m)~~ "Qualified high-technology business" means a business

or facility that is either of the following:

(i) A business with not less than 25% of the total operating

expenses of the business used for research and development in the

tax year in which the business files an application under this act

as determined under generally accepted accounting principles and

verified by the authority.

(ii) A business or facility whose primary business activity is

high-technology activity.

(o) ~~(n)~~ "Qualified new job" means 1 of the following:

(i) A full-time job created by an authorized business at a

facility that is in excess of the number of full-time jobs the

authorized business maintained in this state prior to the expansion

or location, as determined by the authority.

(ii) For jobs created after July 1, 2000, a full-time job at a

facility created by an eligible business that is in excess of the

number of full-time jobs maintained by that eligible business in

this state up to 120 days before the eligible business became an

authorized business, as determined by the authority.

(iii) For a distressed business, a full-time job at a facility

that is in excess of the number of full-time jobs maintained by

that eligible business in this state on the date the eligible

business became an authorized business.

(p) ~~(o)~~ "Retained jobs" means the number of full-time jobs at

a facility of an authorized business maintained in this state on a

specific date as that date and number of jobs is determined by the

authority.

(q) ~~(p)~~ "Rural business" means an eligible business located in

a county with a population of 90,000 or less.

(r) ~~(q)~~ "Subsidiary business" means a business that is

directly or indirectly controlled or at least 80% owned by an

authorized business.

(s) ~~(r)~~ "Written agreement" means a written agreement made

pursuant to section 8. A written agreement may address new jobs,

qualified new jobs, full-time jobs, retained jobs, or any

combination of new jobs, qualified new jobs, full-time jobs, or

retained jobs.