June 12, 2008, Introduced by Senators ALLEN, PAPPAGEORGE and STAMAS and referred to the Committee on Commerce and Tourism.
A bill to amend 1984 PA 270, entitled
"Michigan strategic fund act,"
by amending section 88b (MCL 125.2088b), as added by 2005 PA 225,
and by adding section 88q.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 88b. (1) The fund shall create and operate programs
authorized under this chapter. The fund board shall determine the
annual allocation of money for programs authorized under this
chapter and make authorized expenditures or investments from the
investment fund of the 21st century jobs trust fund created in the
Michigan trust fund act, 2000 PA 489, MCL 12.251 to 12.256
12.260,
as authorized under this chapter for programs and activities
authorized under this chapter.
(2) Money transferred or appropriated by law to the fund for
the purposes of carrying out this chapter shall be expended or
invested by the fund as authorized by law for the following
purposes:
(a) 21st century investments.
(b) Grants and loans approved by the commercialization board
under section 88k.
(c) Other programs or activities authorized under this
chapter.
(3) Except for the appropriations described in section 88j(3)
and as otherwise provided in section 88q, the fund board shall not
expend more than the following amounts each year from the 21st
century jobs trust fund created in the Michigan trust fund act,
2000
PA 489, MCL 12.251 to 12.256 12.260, 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 competitive edge technology grants and loans under
section 88k. The commercialization board shall not authorize the
expenditure of more than $100,000,000.00 of the amount described in
this subdivision for basic research over the life of the program.
(4) The commercialization board shall authorize the
expenditure of not less than the following amounts described in
subsection (3)(c) as follows:
(a) $40,000,000.00 in the 2005-2006 fiscal year.
(b) $50,000,000.00 in the 2006-2007 fiscal year.
(c)
$30,000,000.00 in the 2007-2008 through the 2011-2012
fiscal
years year.
(d) $25,000,000.00 in the 2008-2009 through the 2011-2012
fiscal years.
(5) Not more than 4% of the annual appropriation as provided
by law from the 21st century jobs trust fund created in the
Michigan trust fund act, 2000 PA 489, MCL 12.251 to 12.256
12.260,
may be used for the purposes of administering the programs and
activities authorized under this chapter. However, the fund and the
fund board shall not use more than 3% of the annual appropriation
for administering the programs and activities authorized under this
chapter unless the fund board by a 2/3 vote authorizes the
additional 1% for administration.
(6) Not more than 5% of the annual appropriation as provided
by law from the 21st century jobs trust fund created in the
Michigan trust fund act, 2000 PA 489, MCL 12.251 to 12.256
12.260,
may be used for business development and business marketing costs.
Not less than 80% of the funds committed for business development
and business marketing costs shall be targeted to persons or
entities outside of this state. No funds may be used for any
business development and business marketing effort that includes a
reference to or the image or voice of an elected state officer or a
candidate for elective state office and that is targeted to a media
market in Michigan. The fund board shall select all vendors for all
marketing expenditures under this chapter 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 criminal convictions, disclose any investigations by the
internal revenue service or any other federal or state taxing body
or court, disclose any pertinent litigation regarding the conduct
of the entity, and maintain records and evidence pertaining to work
performed. 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. The fund or the
fund board shall not appoint or designate any person paid or unpaid
to a committee to review proposals if that person has a conflict of
interest with any potential vendors as determined by the office of
the chief compliance officer established in section 88i.
(7) The fund shall not use any money appropriated or
transferred for purposes authorized under this chapter to acquire
interests in or improve real property. The restriction under this
subsection applies only to the fund and not to recipients of
expenditures or investments under this chapter.
Sec. 88q. (1) The fund may create and operate a centers of
energy excellence program to promote the development, acceleration,
and sustainability of energy excellence sectors in this state. The
fund may enter into agreements with 1 or more qualified entities
for the designation and operation of a center of energy excellence
as provided in subsection (5). Prior to entering into an agreement
under this section, 1 or more qualified entities may apply to the
fund for an agreement for designation and operation of a center of
energy excellence. The application shall be in a form determined by
the fund and shall include information the fund determines
necessary and appropriate.
(2) The fund board shall not expend more than $40,000,000.00
of the money appropriated for programs authorized under this
chapter from the 21st century jobs trust fund created in the
Michigan trust fund act, 2000 PA 489, MCL 12.251 to 12.260, for the
centers of energy excellence program. Grants given for the centers
of energy excellence program shall only be awarded to for-profit
companies for 1 of the following purposes:
(a) Providing a match for a federal or international grant of
up to 25%.
(b) Supplementing in-kind contributions provided by a person
or entity other than this state.
(c) Accelerating the commercialization of a new energy
technology or process that will be ready to market within 3 years
of the effective date of the agreement.
(d) Activities of the center, including, but not limited to,
workforce development and technology demonstration.
(3) Not less than 70% of the funds allocated to the centers
for energy excellence program shall be used to match federal or
international grants. The fund board may authorize investment terms
in qualified entities as part of any agreement as provided in
subsection (5). Not more than 15% of any grant awarded can be used
for administrative costs or overhead by the grantee or any
subcontractor hired to implement any portion of the centers for
energy excellence agreement. Grants authorized by this section
shall be disbursed pursuant to a timeline and progress disbursement
schedule included as part of an agreement under this section.
(4) The fund board shall establish a standard process to
evaluate applications for an agreement under this section and shall
appoint a committee of members of the fund board to assist in the
review of applications. The fund or the fund board shall not
appoint or designate any person paid or unpaid to a committee to
review applications if that person has a conflict of interest with
any potential applicants as determined by the office of the chief
compliance officer established in section 88i. When determining
whether to enter into an agreement under this section, the fund
board shall consider all of the following:
(a) The potential that in the absence of an agreement the
development, acceleration, and sustainability of energy excellence
sectors addressed by the proposed center of energy excellence will
occur in a location other than this state.
(b) The extent to which the proposed center of energy
excellence will promote the development of energy excellence
sectors in this state.
(c) The extent to which the proposed center of energy
excellence will promote economic development or job creation in
this state.
(d) The extent to which the proposed center of energy
excellence could attract private investment or encourage
commercialization in energy excellence sectors in this state.
(e) The extent to which the proposed center of energy
excellence may leverage skills or resources in which this state
possesses a competitive advantage, including, but not limited to,
skills of workers, intellectual property, and natural resources.
(f) The extent to which the proposed center of energy
excellence may encourage collaboration on commercialization and
technology transfer among qualified entities in this state.
(g) The extent to which the proposed center of energy
excellence may attract additional federal funding to this state or
persons or entities within this state.
(h) The financial viability of the proposed center of energy
excellence and the proposed business plan for the center of energy
excellence, including, but not limited to, commitments of financial
and other support for the proposed center and the potential
availability of federal funding for the proposed center.
(i) The financial resources available to the fund board for
operation of the centers of energy excellence program under this
section.
(j) Any recommendations from the centers manager selected
under subsection (6).
(5) If the fund board enters into an agreement with 1 or more
qualified entities for the operation of a center of energy
excellence, the agreement shall include participation by at least 1
qualified business and at least 1 institution of higher education.
An agreement shall include, but is not limited to, all of the
following:
(a) The roles and responsibilities of the fund and the
qualified entities participating in the agreement.
(b) A governance structure for the center of energy
excellence. The agreement may provide for representation of the
fund in the governance of the center.
(c) The responsibilities of the fund and the qualified
entities participating in the agreement, including, but not limited
to, financial resources, technology, real property, personal
property, or other resources contributed by the parties to the
agreement.
(d) A commitment by the qualified entities participating in
the agreement to collaborate on commercialization and technology
transfer opportunities in energy excellence sectors in this state.
(e) A commitment by qualified entities that are institutions
of higher education to provide incentives for faculty who
participate in technology transfer and commercialization activities
in energy excellence sectors and expansion of business formation
efforts related to energy excellence sectors to increase the number
of institution of higher education related start-up companies.
(f) A commitment to locate and retain commercialization
opportunities resulting from the agreement or center of energy
excellence within this state.
(g) A business plan for the center of energy excellence that
identifies clear and measurable objectives, timelines, and
deliverables for the center.
(h) The duration of the agreement and a mechanism for the
dissolution of the center of energy excellence and the disposition
of any assets. The fund board may revoke an agreement for the
designation and operation of a center of energy excellence if a
qualified entity that is a party to the agreement does not comply
with the agreement.
(i) Provision for repayment of grants from the fund in the
event a qualified entity fails to comply with the agreement.
(6) The fund board may select a person or entity as a centers
manager to assist the fund in the administration of the centers of
energy excellence program authorized by this section. Costs
associated with the administration of the centers of energy
excellence program are subject to section 88b(5). The centers
manager shall do all of the following as determined by the fund
board:
(a) Provide administrative services related to the centers of
energy excellence program.
(b) Act as contract manager on behalf of the fund for any
agreement establishing a center of energy excellence under this
section.
(c) Recommend to the fund board a plan for managing the
centers of energy excellence program and implement any plan
authorized by the fund board.
(d) Assist centers of energy excellence in developing a supply
chain for energy excellence sectors.
(e) Evaluate and report to the fund board on the centers of
energy excellence program and progress made toward
commercialization of technology in energy excellence sectors in
this state.
(f) Review applications submitted under subsection (1) and
make recommendations to the fund board on the applications for
approval or disapproval of applications.
(g) Perform other functions related to the centers for energy
excellence program authorized by this section as deemed necessary
and appropriate by the fund board.
(7) As used in this section:
(a) "Centers manager" means a centers manager selected under
subsection (6).
(b) "Energy excellence sectors" means new and developing
industry sectors in the energy field in this state where the fund
has determined the state has a competitive advantage and there are
barriers to the commercialization of technology within the new and
developing industry sector.
(c) "Energy field" means alternative energy technology, energy
efficiency technology, technologies that contribute to energy
security and independence, and other advanced energy technologies.
(d) "Qualified entity" means a qualified business, an
institution of higher education, a Michigan nonprofit corporation,
or a political subdivision of this state.