SB-1153, As Passed Senate, November 29, 2016

SUBSTITUTE FOR

SENATE BILL NO. 1153

A bill to amend 1984 PA 270, entitled

"Michigan strategic fund act,"

(MCL 125.2001 to 125.2094) by adding chapter 8D.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

CHAPTER 8D

Sec. 90g. As used in this chapter:

(a) "Authorized business" means an eligible business that has

met the requirements of this chapter and with which the fund has

entered into a written agreement for a withholding abatement

pursuant to this chapter.

(b) "Casino" means a casino regulated by this state under the

Michigan gaming control and revenue act, 1996 IL 1, MCL 432.201 to

432.226, a casino at which gaming is conducted under the Indian

gaming regulatory act, Public Law 100-497, 102 Stat 2467, or

property associated or affiliated with the operation of either type

of casino described in this subdivision, including, but not limited

to, a parking lot, hotel, or motel.

authorized business at a facility in this state that is in excess

of the number of full-time jobs that authorized business maintained

in this state prior to the expansion or location, as determined by

the fund.

(d) "County average wage" means the average wage for the

county where the project is located based off the most recent data

made available by the Michigan bureau of labor market information

and strategic initiatives.

(e) "Eligible business" means a business that proposes to

create a minimum of 500 certified new jobs in this state or, if the

business proposes to pay an average wage that is equal to 125% or

more of the county average wage, 250 certified new jobs. An

eligible business does not include retail establishments,

professional sports stadiums, casinos, or that portion of an

eligible business used exclusively for retail sales.

(f) "Facility" means a site or sites within this state in

which an authorized business creates certified new jobs.

(g) "Full-time job" means a full-time job as determined by the

fund performed by an individual whose income and social security

taxes are withheld by 1 or more of the following:

(i) An authorized business.

(ii) An employee leasing company.

(iii) A professional employer organization on behalf of the

authorized business.

(h) "Municipality" means that term as defined in section 4.

(i) "Withholding abatement" means that portion of withholdings

required to be deducted and withheld under part 3 of the income tax

act of 1967, 1967 PA 281, MCL 206.701 to 206.713, which may be

retained by the authorized business under the written agreement.

(j) "Written agreement" means a written agreement made between

the eligible business and the fund pursuant to this chapter.

Sec. 90h. (1) Beginning June 1, 2017, the fund shall create

and operate the Michigan business withholding abatement program to

provide economic assistance to authorized businesses that provide

certified new jobs in this state. The fund shall develop and use a

detailed application, approval, and compliance process published

and available on the fund's website.

(2) An eligible business may apply to the fund to enter into a

written agreement which authorizes a withholding abatement under

this chapter.

(3) The fund may request information, in addition to that

contained in an application, as may be needed to permit the fund to

discharge its responsibilities under this chapter.

(4) After receipt of an application, the fund may enter into

an agreement with an eligible business for a withholding abatement

under this chapter if the fund determines that all of the following

are met:

(a) The eligible business creates and maintains a minimum of

500 certified new jobs at a facility in this state or, if the

business proposes to pay an average wage that is equal to 125% or

more of the county average wage, 250 certified new jobs.

(b) In addition to the jobs specified in subdivision (a), the

eligible business, if already located within this state, agrees to

maintain a number of full-time jobs equal to or greater than the

number of full-time jobs it maintained in this state prior to the

expansion, as determined by the fund.

sound.

(d) The expansion or location of the eligible business will

benefit the people of this state by increasing opportunities for

employment and by strengthening the economy of this state.

(e) The withholding abatement offered under this chapter is an

incentive to expand or locate the eligible business in this state

and address the competitive disadvantages with sites outside this

state.

(f) A Regional Economic Models, Inc. style cost/benefit

analysis reveals that authorizing the eligible business to receive

the withholding abatement under this chapter will result in an

overall positive fiscal impact to the state.

(g) That the eligible business will create the certified new

jobs within 5 years of entering into the written agreement as

determined by the fund.

(h) That the eligible business will maintain the number of

certified new jobs throughout the term of the written agreement if

the duration of the withholding abatement exceeds 5 years.

(5) If the fund determines that the requirements of this

section have been met, subject to subsection (6), the fund shall

determine the amount and duration of the withholding abatement to

be authorized under this chapter and shall enter into a written

agreement as provided in this section. The duration of the

withholding abatement shall not exceed 10 years from the date the

authorized business creates the certified new jobs as provided in

the written agreement. Subject to subsection (6), in determining

the maximum amount and maximum duration of the withholding

abatement authorized, the fund shall consider the following

factors, if applicable:

(a) The number of certified new jobs to be created.

(b) The degree to which the average wage of the certified new

jobs exceeds the county average wage.

if it were to expand or locate in this state versus a site outside

this state.

(d) The potential impact of the expansion or location on the

economy of this state.

(e) The cost of the withholding abatement under this chapter,

the staff, financial, or economic assistance provided by the

municipality, or local economic development corporation or similar

entity, and the value of assistance otherwise provided by this

state.

(f) Whether the expansion or location will occur in this state

without the withholding abatement offered under this chapter.

(6) The fund shall determine the duration of the withholding

abatement and the amount of the withholding abatement. In

determining the duration of the withholding abatement, the fund

shall provide a duration of up to 5 years for eligible businesses

that pay an average wage that is equal to or more than the county

average wage and up to a duration of 10 years for eligible

businesses that pay an average wage that is equal to 125% or more

of the county average wage. In determining the amount of the

withholding abatement, the fund shall provide an amount of up to

50% of the withholding abatement for an eligible business that pays

an average wage that is equal to or more than the county average

wage and an amount of up to 100% of the withholding abatement for

an eligible business that pays an average wage that is equal to

125% or more of the county average wage.

(7) A written agreement between an eligible business and the

fund shall include, but need not be limited to, all of the

following:

(a) A description of the business expansion or location that

is the subject of the written agreement.

(b) Conditions upon which the authorized business designation

is made.

added certified new jobs without the withholding abatement.

(d) A statement by the eligible business that a violation of

the written agreement may result in the revocation of the

designation as an authorized business, the loss or reduction of

future withholding abatement under this chapter, or a refund of the

withholding abatement received under this chapter.

(e) A statement by the eligible business that a

misrepresentation in the application may result in the revocation

of the designation as an authorized business and the refund of the

withholding abatement received under this chapter plus a penalty

equal to 10% of the withholding abatement under this chapter.

(f) A method for measuring and verifying full-time jobs before

and after an expansion or location of an authorized business in

this state.

(g) A provision that the withholdings abatement shall be based

on salary and wages paid to employees of the authorized business in

the certified new jobs.

(h) A provision that, for each employee in a certified new

job, the authorized business may retain that portion of the amount

required to be deducted and withheld by the authorized business

under section 703 of the income tax act of 1967, 1967 PA 281, MCL

206.703, shall certify to the department of treasury the amount

that has been retained pursuant to a written agreement, and shall

provide any other information reasonably requested by the

department of treasury.

(i) A maximum amount of the withholding abatement that the

authorized business may claim.

(8) Upon execution of a written agreement as provided in this

chapter, an eligible business is an authorized business.

(9) The fund shall not execute more than 15 new written

agreements each year for authorized businesses.

(10) The fund shall not have written agreements in effect that

provide for more than $250,000,000.00 in combined withholding

abatements.

Sec. 90i. (1) Subject to section 90h(9), an authorized

business is eligible for the withholding abatement provided in this

chapter.

(2) The fund shall issue a certificate each year to an

authorized business that states the following:

(a) That the eligible business is an authorized business.

(b) The amount of the withholding abatement for the designated

tax year.

the Michigan treasury number assigned to the taxpayer.

(3) As a condition of being an authorized business, the

authorized business shall pay an amount equal to 5% of the

withholding abatement for that year to the fund. The board shall

use the amount described in this subsection to pay for

administration expenses under this act.

(4) As a condition of being an authorized business, the

authorized business authorizes the fund to identify the authorized

business and disclose the amount and duration of the withholding

abatement. The fund shall publish the information described in this

subsection on the fund's website.