MEGA: ANNUAL REPORT S.B. 71: COMMITTEE SUMMARY
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Senate Bill 71 (as introduced 1-27-09)
Sponsor: Senator Nancy Cassis
Committee: Finance


Date Completed: 1-27-09

CONTENT The bill would amend the Michigan Economic Growth Authority (MEGA) Act to do the following:

-- Require the Auditor General to audit MEGA's annual report to the Legislature and include his or her audit findings with the report before MEGA could submit it.
-- Beginning October 1, 2009, and each subsequent year, require MEGA to report to the chairpersons of the Senate Appropriations and Finance Committees, the House of Representatives Appropriations and Tax Policy Committees, and the directors of the Senate and House Fiscal Agencies.
-- Require MEGA to include additional information in its annual report.

Under the Act, MEGA must report on its activities to both houses of the Legislature yearly on October 1. The bill would require the Auditor General to audit the report and include his or her audit findings with the report before MEGA could submit it. Beginning October 1, 2009, and each subsequent year, MEGA also would have to report to the chairpersons of the Senate Appropriations and Finance Committees, the House of Representatives Appropriations and Tax Policy Committees, and the directors of the Senate and House Fiscal Agencies.


Currently, the report must include at least all of the following:

-- The total amount of capital investment attracted under the Act.
-- The total number of qualified new jobs created under the Act.
-- The total number of new written agreements made by MEGA.
-- The name and location of all authorized businesses and the names and addresses of the directors and officers of corporations, the partners of partnerships or limited liability partnerships, or the members of limited liability companies.
-- The amount and duration of the tax credit separately for each authorized business.
-- The amount of any fee, donation, or other payment of any kind from the authorized business to the Michigan Economic Development Corporation or a foundation or fund associated with it paid or made in the previous reporting year end or, if it is the first reporting year for the authorized business, for the immediately preceding three calendar years.
-- The total number of new written agreements entered into under Section 8(5) and, of those agreements, the number in which the MEGA board determined that it was in the public interest to waive one or more of the requirements of Section 8(1).


Under the bill, in addition to the information currently required, the report would have to include the amount of capital investment required and the number of jobs required to be created or retained for each authorized business to be eligible for the tax credits under the Act. For each written agreement with each authorized business, the report would have to include the actual number of jobs created or retained, the total capital investment at that facility, and the total value of the tax credits received for that year and all previous years under the written agreement.

(Under Section 8(1), MEGA may enter into a written agreement for a credit against the Single Business Tax and the Michigan Business Tax with an eligible business that meets certain criteria related to the location of the business, capital investment, and jobs created or retained by the business, as determined by MEGA. Under Section 8(5), MEGA could enter into agreements with eligible businesses through December 31, 2007.)


MCL 207.810 Legislative Analyst: Craig Laurie

FISCAL IMPACT
The additional reporting requirements proposed in the bill would increase the administrative responsibilities of the Michigan Strategic Fund, in particular in FY 2008-09 when it would be necessary to compile the historical data for the October 1, 2009, report date. It is likely that these costs could be absorbed within the agency's existing appropriations.


The Legislative Auditor General could incur additional costs to audit the required report. Depending on the staff time needed to perform the audit, additional appropriations could be required to hire additional personnel.

Fiscal Analyst: Joe Carrasco Elizabeth Pratt Maria Tyszkiewicz

Analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent. sb71/0910