HB-4817, As Passed Senate, December 2, 2010

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4817

A bill to amend 1984 PA 270, entitled

"Michigan strategic fund act,"

by amending sections 4, 71, 88b, and 89b (MCL 125.2004, 125.2071,

125.2088b, and 125.2089b), section 4 as amended by 2005 PA 225,

section 88b as amended by 2009 PA 218, and section 89b as added by

2008 PA 98.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 4. As used in this act:

(a) "Board" means the board of directors of the Michigan

strategic fund, except where the context clearly requires a

different definition.

(b) "Economic development project" means an endeavor related

to industrial, commercial, or agricultural enterprise. Economic

development project includes, but is not limited to, a theme or

recreation park; agricultural or forestry production, harvesting,

storage, or processing facilities or equipment; and the use of

equipment or facilities designed to produce energy from renewable

resources. Economic development project does not include that

portion of an endeavor devoted to the sale of goods at retail,

except that, as used in relation to the fund insuring a transaction

entered into by a depository institution, and as used in relation

to a loan by the fund to a minority owned business, an economic

development project may include that portion of an endeavor devoted

to the sale of goods at retail. Economic development project does

not include that portion of an endeavor devoted to housing or a

program or activity authorized under chapter 8A.

chartered bank or a state or federally chartered savings and loan

association, savings bank, or credit union whose deposits are

insured by an agency of the United States government and that

maintains a principal office or branch office in this state under

the laws of this state or the United States.

(d) "Fund" means the Michigan strategic fund created under

section 5, except where the context clearly requires a different

definition.

(e) "Green chemistry" means chemistry and chemical engineering

to design chemical products or processes that reduce or eliminate

the use or generation of hazardous substances, while producing

high-quality products through safe and efficient manufacturing

processes. Green chemistry is guided by the following 12

principles:

(i) Prevent waste: Design chemical syntheses to prevent waste,

leaving no waste to treat or clean up.

(ii) Design safer chemicals and products: Design chemical

products to be fully effective, yet have little or no toxicity.

(iii) Design less hazardous chemical syntheses: Design syntheses

to use and generate substances with little or no toxicity to humans

and the environment.

(iv) Use renewable feedstocks: Use raw materials and feedstocks

that are renewable rather than depleting. Renewable feedstocks are

often made from agricultural products or are the wastes of other

processes; depleting feedstocks are made from fossil fuels,

including petroleum, natural gas, or coal, or are mined.

(v) Use catalysts, not stoichiometric reagents: Minimize waste

by using catalytic reactions. Catalysts are used in small amounts

and can carry out a single reaction many times. They are preferable

to stoichiometric reagents, which are used in excess and work only

once.

(vi) Avoid chemical derivatives: Avoid using blocking or

protecting groups or any temporary modifications if possible.

Derivatives use additional reagents and generate waste.

(vii) Maximize atom economy: Design syntheses so that the final

product contains the maximum proportion of the starting materials.

There should be few, if any, wasted atoms.

(viii) Use safer solvents and reaction conditions: Avoid using

solvents, separation agents, or other auxiliary chemicals. If these

chemicals are necessary, use innocuous chemicals.

(ix) Increase energy efficiency: Run chemical reactions at

ambient temperature and pressure whenever possible.

(x) Design chemicals and products to degrade after use: Design

chemical products to break down to innocuous substances after use

so that they do not accumulate in the environment.

(xi) Analyze in real-time to prevent pollution: Include in-

process real-time monitoring and control during syntheses to

minimize or eliminate the formation of by-products.

(xii) Minimize the potential for accidents: Design chemicals

and their forms, including solid, liquid, or gas, to minimize the

potential for chemical accidents, including explosions, fires, and

releases to the environment.

(f) ~~(e)~~ "Michigan economic development corporation" or "MEDC"

means the Michigan economic development corporation, the public

body corporate created under section 28 of article VII of the state

constitution of 1963 and the urban cooperation act of 1967, 1967

(Ex Sess) PA 7, MCL 124.501 to 124.512, by a contractual interlocal

agreement effective April 5, 1999, and subsequently amended,

between local participating economic development corporations

formed under the economic development corporations act, 1974 PA

338, MCL 125.1601 to 125.1636, and the fund.

(g) ~~(f)~~ "Municipality" means a county, city, village,

township, port district, development organization, institution of

higher education, community or junior college, or subdivision or

instrumentality of any of the legal entities listed in this

subdivision.

(h) ~~(g)~~ "Person" means an individual, sole proprietorship,

partnership, limited partnership, limited liability partnership,

limited liability company, joint venture, profit or nonprofit

corporation including a public or private college or university,

public utility, local industrial development corporation, economic

development corporation, or other association of persons organized

for agricultural, commercial, or industrial purposes.

(i) ~~(h)~~ "Project" means an economic development project and,

in addition, means the acquisition, construction, reconstruction,

conversion, or leasing of an industrial, commercial, retail,

agricultural, or forestry enterprise, or any part of these, to

carry out the purposes and objectives of this act and of the fund,

including, but not limited to, acquisition of land or interest in

land, buildings, structures, or other planned or existing planned

improvements to land including leasehold improvements, machinery,

equipment, or furnishings which include, but are not limited to,

the following: research parks; office facilities; engineering

facilities; research and development laboratories; warehousing

facilities; parts distribution facilities; depots or storage

facilities; port facilities; railroad facilities, including

trackage, right of way, and appurtenances; airports; water and air

pollution control equipment or waste disposal facilities; theme or

recreational parks; equipment or facilities designed to produce

energy from renewable resources; farms, ranches, forests, and other

agricultural or forestry commodity producers; agricultural

harvesting, storage, transportation, or processing facilities or

equipment; grain elevators; shipping heads and livestock pens;

livestock; warehouses; wharves and dock facilities; water,

electricity, hydro electric, coal, petroleum, or natural gas

provision facilities; dams and irrigation facilities; sewage,

liquid, and solid waste collection, disposal treatment, and

drainage services and facilities. Project does not include a

program or activity authorized under chapter 8A.

(j) ~~(i)~~ "Private sector" means other than the fund, a state or

federal source, or an agency of a state or the federal government.

Sec. 71. As used in this chapter:

(a) "Economic development fund" means that fund to which the

fund succeeded in ownership pursuant to section 22.

(b) "Research and development enterprise" means any person

found by the fund to be engaged in a business which ~~has as its~~

~~principal function~~ uses green chemistry as a design guidance, or

the discovery of new substances and the refinement of known

substances, processes, products, theories, and ideas, except for

those persons whose businesses are directed primarily to the

accumulation or analysis of commercial, financial, or mercantile

data.

27 of ~~Act No. 70 of the Public Acts of 1982, being section 125.1927~~

~~of the Michigan Compiled Laws~~ former 1982 PA 70, to which the fund

succeeds in ownership pursuant to section 76.

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 12.260, 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.

chapter.

(d) For fiscal year 2010-2011 only, $10,000,000.00 for the

promotion of tourism in this state from funds appropriated in the

jobs for Michigan investment program - 21st century jobs fund line

in section 109 of 2010 PA 191 with not less than $1,500,000.00 to

be used for the 2010-2011 winter advertisement buy.

(3) Except for the appropriations described in section 88j(3)

and as otherwise provided in section 88q, for fiscal years other

than the 2008-2009 and 2009-2010 fiscal years 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 12.260, 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.

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) 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 12.260, 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.

(5) 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 12.260, 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.

(6) 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. 89b. (1) For the fiscal year ending September 30, 2008,

there is appropriated and transferred from the general fund to the

21st century jobs trust fund $60,000,000.00 and there is

appropriated from the 21st century jobs trust fund to the fund

$50,000,000.00 for carrying out the purposes of this chapter. Not

more than 1/4 of the total amount appropriated from the net

proceeds described in section 8(2) of the Michigan tobacco

settlement finance authority act, 2005 PA 226, MCL 129.268, shall

be used to promote business development in this state.

(2) Upon request from the board, the state treasurer shall

transfer appropriated funds from the 21st century jobs trust fund

established under section 7(1)(b) of the Michigan trust fund act,

2000 PA 489, MCL 12.257, any other available funds under this act,

funds otherwise appropriated for expenditure under this chapter, or

as authorized in section 88b(2)(d), in the amounts designated by

the board at the time and as necessary to fund disbursements

required for the Michigan promotion program.

(3) The appropriation authorized in subsection (1) is a work

project appropriation and any unencumbered or unallotted funds are

carried forward into the following fiscal year. The following is in

compliance with section 451a(1) of the management and budget act,

1984 PA 431, MCL 18.1451a:

(a) The purpose of the project is to provide economic benefits

and job creation within this state through the promotion of

tourism.

(b) The work project will be accomplished through the use of

interagency agreements, grants, state employees, and contracts.

$50,000,000.00.

(d) The expected completion date is December 31, 2010.