March 5, 2008, Introduced by Senators GILBERT, CLARKE, STAMAS and HUNTER and referred to the Committee on Commerce and Tourism.
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).
(c) The number of out-of-state persons bidding against the
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.
(c) Conditions upon which the person or group of persons
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. 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.
(c) The taxpayer's federal employer identification number or
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.
(c) "Qualified new job" means a full-time job created by a
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. 1115.
(b) Senate Bill No. 1187.
(c) Senate Bill No. 1190.
(d) Senate Bill No. 1189.