SB-0774, As Passed Senate, October 15, 2009

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 774

A bill to amend 2007 PA 36, entitled

"Michigan business tax act,"

by amending section 431 (MCL 208.1431), as amended by 2008 PA 111.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 431. (1) Except as otherwise provided under this

subsection, for a period of time not to exceed 20 years as

determined by the Michigan economic growth authority, a taxpayer

that is an authorized business may claim a credit against the tax

imposed by this act equal to the amount certified each year by the

Michigan economic growth authority as follows:

(a) Except as otherwise provided under this subdivision, for

an authorized business for the tax year, an amount not to exceed

the payroll of the authorized business attributable to employees

who perform qualified new jobs as determined under the Michigan

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

multiplied by the tax rate; beginning after ~~the effective date of~~

~~the amendatory act that added subdivision (d)~~ April 28, 2008, for

an authorized business for the tax year, an amount not to exceed

the sum of the payroll and health care benefits of the authorized

business attributable to employees who perform qualified new jobs

as determined under the Michigan economic growth authority act,

1995 PA 24, MCL 207.801 to 207.810, multiplied by the tax rate.

(b) For an eligible business as determined under section

8(5)(a) of the Michigan economic growth authority act, 1995 PA 24,

MCL 207.808, an amount not to exceed 50% of the payroll of the

authorized business attributable to employees who perform retained

jobs as determined under the Michigan economic growth authority

act, 1995 PA 24, MCL 207.801 to 207.810, multiplied by the tax rate

for the tax year.

8(5)(b) of the Michigan economic growth authority act, 1995 PA 24,

MCL 207.808, an amount not to exceed the payroll of the authorized

business attributable to employees who perform retained jobs as

determined under the Michigan economic growth authority act, 1995

PA 24, MCL 207.801 to 207.810, multiplied by the tax rate for the

tax year.

(d) For an authorized business that is a qualified high-

technology business, for a period of time not to exceed 7 years as

determined by the Michigan economic growth authority, an amount not

to exceed 200% of the sum of the payroll and health care benefits

of the qualified high-technology business attributable to employees

who perform qualified new jobs as determined under the Michigan

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

for the first 3 tax years of the credit, multiplied by the tax rate

and, for each of the remaining tax years of the credit, an amount

not to exceed 100% of the sum of the payroll and health care

benefits of the qualified high-technology business attributable to

employees who perform qualified new jobs as determined under the

Michigan economic growth authority act, 1995 PA 24, MCL 207.801 to

207.810, multiplied by the tax rate.

(e) For an authorized business as determined under section

8(9) of the Michigan economic growth authority act, 1995 PA 24, MCL

207.808, an amount up to, but not to exceed 100% of, the sum of the

payroll and health care benefits of the authorized business

attributable to employees who perform retained jobs multiplied by a

fraction, the numerator of which is the amount of new capital

investment made at the facility and the denominator of which is the

product of the number of retained jobs multiplied by $100,000.00,

and then multiplied by the tax rate for the tax year.

(f) For an authorized business as determined under section

8(11) of the Michigan economic growth authority act, 1995 PA 24,

MCL 207.808, an amount not to exceed 100% of the sum of the payroll

and health care benefits of the authorized business attributable to

employees who perform new full-time jobs and retained jobs as

determined under the Michigan economic growth authority act, 1995

PA 24, MCL 207.801 to 207.810, multiplied by the tax rate for the

tax year.

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

unless the Michigan economic growth authority has issued a

certificate to the taxpayer. The taxpayer shall attach the

certificate to the annual return filed under this act on which a

credit under this section is claimed.

(3) The certificate required by subsection (2) shall state all

of the following:

(a) The taxpayer is an authorized business.

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

authorized business for the designated tax year.

the Michigan department of treasury number assigned to the

taxpayer.

(4) The Michigan economic growth authority may certify a

credit under this section based on an agreement entered into prior

to January 1, 2008 pursuant to section 37c of former 1975 PA 228.

The number of years for which the credit may be claimed under this

section shall equal the maximum number of years designated in the

resolution reduced by the number of years for which a credit has

been claimed or could have been claimed under section 37c of former

1975 PA 228.

(5) If the credit allowed under this section exceeds the tax

liability of the taxpayer for the tax year, that portion of the

credit that exceeds the tax liability of the taxpayer shall be

refunded.

(6) Except as otherwise provided under this subsection, a

taxpayer that claims a credit under subsection (1) or section 37c

or 37d of former 1975 PA 228, that has an agreement with the

Michigan economic growth authority based on qualified new jobs as

defined in section ~~3(p)(~~ii) 3(q)(ii) of the Michigan economic growth

authority act, 1995 PA 24, MCL 207.803, and that removes from this

state 51% or more of those qualified new jobs within 3 years after

the first year in which the taxpayer claims a credit described in

this subsection shall pay to the department no later than 12 months

after those qualified new jobs are removed from the state an amount

equal to the total of all credits described in this subsection that

were claimed by the taxpayer. Beginning after ~~the effective date of~~

~~the amendatory act that added subsection (1)(d)~~ April 28, 2008, a

taxpayer that claims a credit under subsection (1) and subsequently

fails to meet the requirements of this section or any other

conditions included in an agreement entered into with the Michigan

economic growth authority in order to obtain a certificate for the

credit claimed under this section or removes any of the qualified

new jobs from 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 Michigan economic growth authority, may have

its credit reduced or terminated or have a percentage of the credit

amount previously claimed under this section added back to the tax

liability of the taxpayer in the tax year that the taxpayer fails

to comply with this section or the agreement.

(7) If the Michigan economic growth authority or a designee of

the Michigan economic growth authority requests that a taxpayer

that claims the credit under this section get a statement prepared

by a certified public accountant verifying that the actual number

of new jobs created is the same number of new jobs used to

Senate Bill No. 774 (H-2) as amended October 14, 2009

calculate the credit under this section, the taxpayer shall get the

statement and attach that statement to its annual return under this

act on which the credit under this section is claimed.

(8) A credit shall not be claimed by a taxpayer under this

section if the taxpayer's initial certification as required in

subsection (3) is issued after December 31, 2013.

(9) For the 2010 calendar year and each calendar year after

2010, the total amount of all credits allowed to be claimed in the

first year of all new written agreements approved [in that calendar year]

under this

section shall not exceed $95,000,000.00.

(10) ~~(9)~~ For purposes of this section, taxpayer includes a

person subject to the tax imposed under ~~chapters~~ chapter 2A and a

person subject to the tax imposed under chapter 2B.

(11) ~~(10)~~ As used in this section:

(a) "Authorized business", "facility", "full-time job",

"qualified high-technology business", "retained jobs", and "written

agreement" mean those terms as defined in the Michigan economic

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

(b) "Health care benefits" means all costs paid for a self-

funded health care benefit plan or for an expense-incurred

hospital, medical, or surgical policy or certificate, nonprofit

health care corporation certificate, or health maintenance

organization contract. Health care benefit does not include

accident-only, credit, dental, or disability income insurance;

long-term care insurance; coverage issued as a supplement to

liability insurance; coverage only for a specified disease or

illness; worker's compensation or similar insurance; or automobile

medical payment insurance.

economic growth authority created in the Michigan economic growth

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

(d) "Payroll" means the total salaries and wages before

deducting any personal or dependency exemptions.

(e) "Qualified new jobs" means 1 or more of the following:

(i) The average number of full-time jobs at a facility of an

authorized business for a tax year in excess of the average number

of full-time jobs the authorized business maintained in this state

prior to the expansion or location as that is determined under the

Michigan economic growth authority act, 1995 PA 24, MCL 207.801 to

207.810.

(ii) The average number of full-time jobs at a facility created

by an eligible business up to 90 days before becoming an authorized

business that is in excess of the average number of full-time jobs

that the business maintained in this state up to 90 days before

becoming an authorized business, as determined under the Michigan

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

(f) "Tax rate" means the rate imposed under section 51 of the

income tax act of 1967, 1967 PA 281, MCL 206.51, for the tax year

in which the tax year of the taxpayer for which the credit is being

computed begins.

Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 95th Legislature are

enacted into law:

(a) Senate Bill No. 70.