March 5, 2008, Introduced by Senators CLARKE, GILBERT, STAMAS and HUNTER and referred to the Committee on Commerce and Tourism.
A bill to amend 1995 PA 24, entitled
"Michigan economic growth authority act,"
by amending sections 6 and 8 (MCL 207.806 and 207.808), section 6
as amended by 2007 PA 150 and section 8 as amended by 2007 PA 62.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 6. The authority shall have powers necessary or
convenient to carry out and effectuate the purpose of this act,
including, but not limited to, the following:
(a) To authorize eligible businesses to receive tax credits to
foster job creation in this state.
(b) To determine which businesses qualify for tax credits
under this act.
(c) To determine the amount and duration of tax credits
authorized under this act.
(d) To issue certificates and enter into written agreements
specifying the conditions under which tax credits are authorized
and the circumstances under which those tax credits may be reduced
or terminated.
(e) To charge and collect reasonable administrative fees.
(f) To delegate to the chairperson of the authority, staff, or
others the functions and powers it considers necessary and
appropriate to administer the programs under this act.
(g) To assist an eligible business to obtain the benefits of a
tax credit, incentive, or inducement program provided by this act
or by law.
(h) To determine the eligibility of and issue certificates to
certain qualified taxpayers for credits allowed under former
section
38g(3) of the single business tax act, 1975 PA 228 , MCL
208.38g,
and section 431 of the Michigan
business tax act, 2007 PA
36, MCL 208.1431, and to develop the application process and
necessary forms to claim the credit under former section 38g(3) of
the
single business tax act, 1975 PA
228 , MCL 208.38g, and section
431 of the Michigan business tax act, 2007 PA 36, MCL 208.1431. The
Michigan economic growth authority annually shall prepare and
submit to the house of representatives and senate committees
responsible for tax policy and economic development issues a report
on
the credits under former section 38g(3) of the single business
tax
act, 1975 PA 228 , MCL 208.38g, and
section 431 of the Michigan
business tax act, 2007 PA 36, MCL 208.1431. The report shall
include, but is not limited to, all of the following:
(i) A listing of the projects under former section 38g(3) of
the
single business tax act, 1975 PA
228 , MCL 208.38g, and section
431 of the Michigan business tax act, 2007 PA 36, MCL 208.1431,
that were approved in the previous calendar year.
(ii) The total amount of eligible investment approved under
former
section 38g(3) of the single business
tax act, 1975 PA 228 ,
MCL
208.38g, and section 431 of the Michigan
business tax act, 2007
PA 36, MCL 208.1431, in the previous calendar year.
(i) To approve the capture of school operating taxes and work
plans as provided in sections 13 and 15 of the brownfield
redevelopment financing act, 1996 PA 381, MCL 125.2663 and
125.2665.
(j) To determine the eligibility of and issue certificates to
certain qualified taxpayers for credits allowed under section 407
of the Michigan business tax act, 2007 PA 36, MCL 208.1407.
(k) To determine the eligibility of and issue certificates to
certain taxpayers for credits allowed under sections 431a and 431b
of the Michigan business tax act, 2007 PA 36, MCL 208.1431a and
208.1431b.
Sec. 8. (1) After receipt of an application, the authority may
enter into an agreement with an eligible business for a tax credit
under section 9 if the authority determines that all of the
following are met:
(a) Except as provided in subsection (5), the eligible
business
creates 1 or more of the following within 12 months of the
expansion
or location as determined by the
authority and provided
with written agreement:
(i) A minimum of 50 qualified new jobs at the facility if
expanding in this state.
(ii) A minimum of 100 50 qualified
new jobs at the facility if
locating in this state.
(iii) A minimum of 25 qualified new jobs at the facility if the
facility is located in a neighborhood enterprise zone as determined
under the neighborhood enterprise zone act, 1992 PA 147, MCL
207.771 to 207.786, is located in a renaissance zone under the
Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to
125.2696, or is located in a federally designated empowerment zone,
rural enterprise community, or enterprise community.
(iv) A minimum of 5 qualified new jobs at the facility if the
eligible business is a qualified high-technology business.
(v) A minimum of 5 qualified new jobs at the facility if the
eligible business is a rural business.
(b) Except as provided in subsection (5), the eligible
business agrees to maintain 1 or more of the following for each
year that a credit is authorized under this act:
(i) A minimum of 50 qualified new jobs at the facility if
expanding in this state.
(ii) A minimum of 100 50 qualified
new jobs at the facility if
locating in this state.
(iii) A minimum of 25 qualified new jobs at the facility if the
facility is located in a neighborhood enterprise zone as determined
under the neighborhood enterprise zone act, 1992 PA 147, MCL
207.771 to 207.786, is located in a renaissance zone under the
Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to
125.2696, or is located in a federally designated empowerment zone,
rural enterprise community, or enterprise community.
(iv) If the eligible business is a qualified high-technology
business, all of the following apply:
(A) A minimum of 5 qualified new jobs at the facility.
(B) A minimum of 25 qualified new jobs at the facility within
5 years after the date of the expansion or location as determined
by the authority and a minimum of 25 qualified new jobs at the
facility each year thereafter for which a credit is authorized
under this act.
(v) If the eligible business is a rural business, all of the
following apply:
(A) A minimum of 5 qualified new jobs at the facility.
(B) A minimum of 25 qualified new jobs at the facility within
5 years after the date of the expansion or location as determined
by the authority.
(c) Except as provided in subsection (5) and as otherwise
provided in this subdivision, in addition to the jobs specified in
subdivision (b), the eligible business, if already located within
this state, agrees to maintain a number of full-time jobs equal to
or greater than the number of full-time jobs it maintained in this
state prior to the expansion, as determined by the authority. After
an eligible business has entered into a written agreement as
provided in subsection (2), the authority may adjust the number of
full-time jobs required to be maintained by the authorized business
under this subdivision, in order to adjust for decreases in full-
time jobs in the authorized business in this state due to the
divestiture of operations, provided a single other person continues
to maintain those full-time jobs in this state. The authority shall
not approve a reduction in the number of full-time jobs to be
maintained unless the authority has determined that it can monitor
the maintenance of the full-time jobs in this state by the other
person, and the authorized business agrees in writing that the
continued maintenance of the full-time jobs in this state by the
other person, as determined by the authority, is a condition of
receiving tax credits under the written agreement. A full-time job
maintained by another person under this subdivision, that otherwise
meets the requirements of section 3(i), shall be considered a full-
time job, notwithstanding the requirement that a full-time job be
performed by an individual employed by an authorized business, or
an employee leasing company or professional employer organization
on behalf of an authorized business.
(d) Except as otherwise provided in this subdivision, the
average
wage paid for all each retained
jobs job and qualified new
jobs
job is equal to or greater than 150% of the federal
minimum
wage. However, if the eligible business is a qualified high-
technology
business, then the average wage paid for all each
qualified
new jobs job is equal to or greater than 300% of the
federal minimum wage.
(e)
Except for a qualified high-technology business, the
expansion,
retention, or location of the eligible business will not
occur
in this state without the tax credits offered under this act.
(f)
Except for an eligible business described in subsection
(5)(b)(ii), the local governmental unit in which the eligible
business
will expand, be located, or maintain retained jobs, or a
local
economic development corporation or similar entity, will make
a
staff, financial, or economic commitment to the eligible business
for
the expansion, retention, or location.
(e) (g)
The financial statements of the
eligible business
indicated
that it is financially sound or has submitted a chapter
11
plan of reorganization to the bankruptcy court and that its
plans for the expansion, retention, or location are economically
sound.
(f) (h)
Except for an eligible business
described in
subsection (5)(c), the eligible business has not begun construction
of the facility.
(g) (i)
The expansion, retention, or
location of the eligible
business will benefit the people of this state by increasing
opportunities for employment and by strengthening the economy of
this state.
(h) (j)
The tax credits offered under this
act are an
incentive to expand, retain, or locate the eligible business in
Michigan and address the competitive disadvantages with sites
outside this state.
(i) (k)
A cost/benefit analysis reveals
that authorizing the
eligible business to receive tax credits under this act will result
in an overall positive fiscal impact to the state.
(l) If feasible, as determined by the authority, in
locating
the
facility, the authorized business reuses or redevelops property
that
was previously used for an industrial or commercial purpose.
(j) (m)
If the eligible business is a
qualified high-
technology business described in section 3(m)(i), the eligible
business agrees that not less than 25% of the total operating
expenses of the business will be maintained for research and
development for the first 3 years of the written agreement.
(2) If the authority determines that the requirements of
subsection
(1), or (5), or (9) have been met, the
authority shall
determine the amount and duration of tax credits to be authorized
under section 9, and shall enter into a written agreement as
provided in this section. The duration of the tax credits shall not
exceed 20 years or for an authorized business that is a distressed
business, 3 years. In determining the amount and duration of tax
credits authorized, the authority shall consider the following
factors:
(a) The number of qualified new jobs to be created or retained
jobs to be maintained.
(b) The average wage and health care benefit level of the
qualified new jobs or retained jobs relative to the average wage
and health care benefit paid by private entities in the county in
which the facility is located.
(c) The total capital investment or new capital investment the
eligible business will make.
(d) The cost differential to the business between expanding,
locating, or retaining new jobs in Michigan and a site outside of
Michigan.
(e) The potential impact of the expansion, retention, or
location on the economy of Michigan.
(f) The cost of the credit under section 9, the staff,
financial, or economic assistance provided by the local government
unit, or local economic development corporation or similar entity,
and the value of assistance otherwise provided by this state.
(g) Whether the expansion, retention, or location will occur
in this state without the tax credits offered under this act.
(h) Whether the authorized business reuses or redevelops
property that was previously used for an industrial or commercial
purpose in locating the facility.
(3) A written agreement between an eligible business and the
authority shall include, but need not be limited to, all of the
following:
(a) A description of the business expansion, retention, or
location that is the subject of the agreement.
(b) Conditions upon which the authorized business designation
is made.
(c) A statement by the eligible business that a violation of
the written agreement may result in the revocation of the
designation as an authorized business and the loss or reduction of
future credits under section 9.
(d) A statement by the eligible business that a
misrepresentation in the application may result in the revocation
of the designation as an authorized business and the refund of
credits received under section 9.
(e) A method for measuring full-time jobs before and after an
expansion, retention, or location of an authorized business in this
state.
(f) A written certification from the eligible business
regarding all of the following:
(i) The eligible business will follow a competitive bid process
for the construction, rehabilitation, development, or renovation of
the facility, and that this process will be open to all Michigan
residents and firms. The eligible business may not discriminate
against any contractor on the basis of its affiliation or
nonaffiliation with any collective bargaining organization.
(ii) The eligible business will make a good faith effort to
employ, if qualified, Michigan residents at the facility.
(iii) The eligible business will make a good faith effort to
employ or contract with Michigan residents and firms to construct,
rehabilitate, develop, or renovate the facility.
(iv) The eligible business is encouraged to make a good faith
effort to utilize Michigan-based suppliers and vendors when
purchasing goods and services.
(g) A condition that if the eligible business qualified under
subsection
(5)(b)(ii) and met the subsection (1)(g) (1)(e)
requirement by filing a chapter 11 plan of reorganization, the plan
must be confirmed by the bankruptcy court within 6 years of the
date of the agreement or the agreement is rescinded.
(4) Upon execution of a written agreement as provided in this
section, an eligible business is an authorized business.
(5)
After Through December 31,
2007, after receipt of an
application,
the authority may enter into a written agreement ,
which
shall include a repayment provision of all or a portion of
the
credits under section 9 for a violation of the written
agreement,
with an eligible business that
meets 1 or more of the
following criteria:
(a) Is located in this state on the date of the application,
makes new capital investment of $250,000,000.00 in this state, and
maintains 500 retained jobs, as determined by the authority.
(b) Meets 1 or more of the following criteria:
(i) Relocates production of a product to this state after the
date of the application, makes capital investment of
$500,000,000.00 in this state, and maintains 500 retained jobs, as
determined by the authority.
(ii) Maintains 150 retained jobs at a facility, maintains 1,000
or more full-time jobs in this state, and makes new capital
investment in this state.
(iii) Is located in this state on the date of the application,
maintains at least 100 retained jobs at a single facility, and
agrees to make new capital investment at that facility equal to the
greater of $100,000.00 per retained job maintained at that facility
or $10,000,000.00 to be completed or contracted for not later than
December 31, 2007.
(iv) Maintains 300 retained jobs at a facility; the facility is
at risk of being closed and if it were to close, the work would go
to a location outside this state, as determined by the authority;
new management or new ownership is proposed for the facility that
is committed to improve the viability of the facility, unless
otherwise provided in this subparagraph; and the tax credits
offered under this act are necessary for the facility to maintain
operations. The authority may not enter into a written agreement
under this subparagraph after December 31, 2007. Of the written
agreements entered into under this subparagraph, the authority may
enter into 3 written agreements under this subparagraph that are
excluded
from the requirements of subsection (1)(e), (f), (g), (h),
(j),
and (k) (i) if
the authority considers it in the public
interest and if the eligible business would have met the
requirements
of subsection (1)(e), (i), (j), (1)(g),
(h), and (k)
within the immediately preceding 6 months from the signing of the
written agreement for a tax credit. Of the 3 written agreements
described in this subparagraph, the authority may also waive the
requirement for new management if the existing management and labor
make a commitment to improve the viability and productivity of the
facility to better meet international competition as determined by
the authority.
(v) Maintains 100 retained jobs at a facility; is a rural
business, unless otherwise provided in this subparagraph; the
facility is at risk of being closed and if it were to close, the
work would go to a location outside this state, as determined by
the authority; new management or new ownership is proposed for the
facility that is committed to improve the viability of the
facility; and the tax credits offered under this act are necessary
for the facility to maintain operations. The authority may not
enter into a written agreement under this subparagraph after
December 31, 2007. Of the written agreements entered into under
this subparagraph, the authority may enter into 3 written
agreements under this subparagraph that are excluded from the
requirements
of subsection (1)(e), (f), (g), and
(h) , (j), and (k)
if the authority considers it in the public interest and if the
eligible business would have met the requirements of subsection
(1)(e),
(i), (j), and (k) (1)(g),
(h), and (e) within the
immediately preceding 6 months from the signing of the written
agreement for a tax credit. Of the 3 written agreements described
in this subparagraph, the authority may also waive the requirement
that the business be a rural business if the business is located in
a county with a population of 500,000 or more and 600,000 or less.
(vi) Maintains 175 retained jobs and makes new capital
investment at a facility in a county with a population of not less
than 7,500 but not greater than 8,000.
(vii) Is located in this state on the date of the application,
maintains at least 675 retained jobs at a facility, agrees to
create 400 new jobs, and agrees to make a new capital investment of
at least $45,000,000.00 to be completed or contracted for not later
than December 31, 2007. Of the written agreements entered into
under this subparagraph, the authority may enter into 1 written
agreement under this subparagraph that is excluded from the
requirements
of subsection (1)(h) (1)(f)
if the authority considers
it in the public interest.
(viii) Is located in this state on the date of the application,
makes new capital investment of $250,000,000.00 or more in this
state, and makes that capital investment at a facility located
north of the 45th parallel.
(c) Is a distressed business.
(6)
The Each year, the authority shall not execute more than
25
new written agreements each that in total provide for more than
500 yearly credits over the terms of those agreements entered into
that year for eligible businesses that are not qualified high-
technology businesses, distressed businesses, or rural businesses.
If
the authority executes less than 25 new written agreements in a
year,
the authority may carry forward for 1 year only the
difference
between 25 and the number of new agreements executed in
the
immediately preceding year.
(7) The authority shall not execute more than 50 new written
agreements each year for eligible businesses that are qualified
high-technology businesses or rural business. Only 25 of the 50
written agreements for businesses that are qualified high-
technology businesses or rural business may be executed each year
for qualified rural businesses.
(8) The authority shall not execute more than 20 new written
agreements each year for eligible businesses that are distressed
businesses. The authority shall not execute more than 5 of the
written agreements described in this subsection each year for
distressed businesses that had 1,000 or more full-time jobs at a
facility 4 years immediately preceding the application to the
authority under this act.
(9) Beginning January 1, 2008, after receipt of an
application, the authority may enter into a written agreement with
an eligible business that does not meet the criteria described in
subsection (1), if the eligible business meets all of the
following:
(a) Agrees to retain not fewer than 50 jobs.
(b) Agrees to make new capital investment at a facility equal
to $50,000.00 or more per retained job maintained at the facility.
(c) Certifies to the authority that, without the credits under
this act and without the new capital investment, the facility is at
risk of closing and the work and jobs would be removed to a
location outside of this state.
(d) Certifies to the authority that the management or
ownership is committed to improving the long-term viability of the
facility in meeting the national and international competition
facing the facility through better management techniques, best
practices, including state of the art lean manufacturing practices,
and market diversification.
(e) Certifies to the authority that it will make best efforts
to keep jobs in Michigan when making plant location and closing
decisions.
(f) Certifies to the authority that the workforce at the
facility demonstrates its commitment to improving productivity and
profitability at the facility through various means.
(10) Beginning on the effective date of the amendatory act
that added this subsection, if the authority enters into a written
agreement with an eligible business, the written agreement shall
include a repayment provision of all or a portion of the credits
received by the eligible business for a facility if the eligible
business moves full-time jobs outside this state during the term of
the written agreement and for a period of years after the term of
the written agreement, as determined by the authority.