SB-0418, As Passed House, November 4, 2009

SUBSTITUTE FOR

SENATE BILL NO. 418

A bill to amend 1984 PA 270, entitled

"Michigan strategic fund act,"

by amending section 88q (MCL 125.2088q), as added by 2008 PA 175.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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 $45,000,000.00

through fiscal year 2008-2009 and not more than $30,000,000.00 for

fiscal year 2009-2010 through fiscal year 2010-2011 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 all of the following purposes:

(a) Providing a up to a 1-for-1 match for ~~foundation funding,~~

federal funding ~~, or international investments~~ of up to 50% of the

total project costs.

(b) Supplementing in-kind contributions provided by a person

or entity other than this state.

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 50%~~ All of the funds allocated to the

centers for energy excellence program shall be used to match

~~foundation funding,~~ federal funding. ~~, or international~~

~~investments.~~ 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.

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

or a national laboratory. 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.

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.

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.

efficiency technology, technologies that contribute to energy

security and independence, other advanced energy technologies, or

water technology related to the development of energy excellence

sectors.

(d) "Qualified entity" means a qualified business, an

institution of higher education, a Michigan nonprofit corporation,

a national laboratory, or a political subdivision of this state.