SB-1188, As Passed Senate, March 26, 2008

SUBSTITUTE FOR

SENATE BILL NO. 1188

A bill to amend 2007 PA 36, entitled

"Michigan business tax act,"

(MCL 208.1101 to 208.1601) by adding section 431b.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 431b. (1) Upon application, a person or group of persons

acting collectively may enter into an agreement with the Michigan

economic growth authority for a credit under this section. In

determining whether to enter into an agreement with a person or

group of persons, the authority shall consider the following

factors:

(a) The number of qualified new jobs or products, or both, to

be created or maintained as a result of winning a federal

procurement contract offered by the United States department of

defense, department of energy, or department of homeland security.

(b) The potential impact of the expansion, retention, or

location on the economy of Michigan if the person or group of

persons acting collectively is awarded the federal contract

described under subdivision (a).

person or group of persons acting collectively for the federal

contract described under subdivision (a).

(d) The total capital investment or new capital investment the

person or group of persons acting collectively will make to win and

maintain the federal contract described under subdivision (a).

(2) The agreement required under subsection (1) shall include,

but is not limited to, all of the following:

(a) A description of the federal contract for which the person

or group of persons acting collectively intends to bid.

(b) A description of the person's or group's expansion,

retention, or location that is necessary if awarded the federal

contract that is the subject of the agreement.

acting collectively is designated a qualified taxpayer under this

section.

(d) A statement by the person or group of persons acting

collectively that a violation of the written agreement may result

in the revocation of the designation as a qualified taxpayer and

the loss or reduction of future credits under this section.

(e) A statement by the person or group of persons acting

collectively that a misrepresentation in the application may result

in the revocation of the designation as a qualified taxpayer and

the refund of credits received under this section.

(f) A method for measuring qualified new jobs before and after

the award of a federal contract and the expansion, retention, or

location of the person or group of persons acting collectively in

this state as a result of winning the federal contract.

(3) A qualified taxpayer may claim a credit against the tax

imposed by this act in an amount up to 100% of the qualified

taxpayer's payroll attributable to employees who perform qualified

new jobs created as a result of the person or group of persons

acting collectively being awarded a federal procurement contract by

the United States department of defense, department of energy, or

department of homeland security as determined by the Michigan

economic growth authority, multiplied by the tax rate for the tax

year for a period of up to 7 years or the term of the contract,

whichever is less, as determined by the Michigan economic growth

authority. If the qualified taxpayer is a group of persons acting

collectively, the Michigan economic growth authority shall

determine the amount of the credit which each person included in

the group is allowed to claim by multiplying the amount of the

credit allowed collectively by the qualified taxpayer by a

fraction, the numerator of which is the person's payroll

attributable to employees who perform qualified new jobs and the

denominator of which is 100% of the qualified taxpayer's payroll

attributable to employees who perform qualified new jobs, and then

certifying the amount of the credit that each person is allowed to

claim respectively. If the credit allowed under this subsection

exceeds the liability of the taxpayer for the tax year, the

taxpayer may elect to have that portion that exceeds the tax

liability of the taxpayer refunded or to have the excess carried

forward to offset tax liability in subsequent years for 10 years or

until it is used up, whichever occurs first. The Michigan economic

growth authority shall not execute more than 10 new written

agreements each year. If a qualified taxpayer is awarded a credit

under this section, any subsequent credits awarded to that

qualified taxpayer shall not be included in determining the yearly

limit of 10 new agreements under this subsection.

(4) A taxpayer shall not claim a credit under this section

unless the Michigan economic growth authority has issued the

taxpayer a certificate of designation as a qualified taxpayer.

However, a credit shall not be provided for a tax year prior to the

tax year during which the certification is made. The taxpayer shall

attach the certificate to the annual return filed under this act on

which the credit under this section is claimed. The certificate

required by this subsection shall state all of the following:

(a) The taxpayer is a qualified taxpayer.

(b) The amount of the credit under this section for the

qualified taxpayer for the designated tax year or, if the qualified

taxpayer is a group of persons, the percentage of the amount of the

credit that the taxpayer is allowed to claim for the designated tax

year.

the Michigan department of treasury number assigned to the

taxpayer.

(5) As used in this section:

(a) "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) A taxpayer.

(ii) An employee leasing company on behalf of a taxpayer.

(iii) A professional employer organization on behalf of a

taxpayer.

(b) "Michigan economic growth authority" or "authority" means

the Michigan economic growth authority created in the Michigan

economic growth authority act, 1995 PA 24, MCL 207.801 to 207.810.

qualified taxpayer at a facility or facilities that is in excess of

the number of full-time jobs the qualified taxpayer maintained in

this state or at a facility prior to being awarded the federal

procurement contract and the expansion or location, as determined

by the authority.

(d) "Qualified taxpayer" means a person that individually

satisfies each of the following or a group of 1 or more persons

that enter into a cooperative or informal agreement to act

collectively and satisfy each of the following:

(i) Has entered into an agreement with the authority as

described under this section.

(ii) Has submitted a competitive bid for a federal procurement

contract offered by the United States department of defense,

department of energy, or department of homeland security.

(iii) Has been awarded the federal contract for which the person

or group of persons acting collectively submitted a bid under

subparagraph (ii).

(iv) Has created a minimum of 25 qualified new jobs.

Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 94th Legislature are

enacted into law:

(a) Senate Bill No. 1187.

(b) Senate Bill No. 1189.