March 12, 2015, Introduced by Senators BOOHER, ZORN and SCHMIDT and referred to the Committee on Banking and Financial Institutions.
A bill to amend 1984 PA 270, entitled
"Michigan strategic fund act,"
(MCL 125.2001 to 125.2094) by adding section 88s.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 88s. (1) The fund shall create and operate the Michigan
investment program to provide grants, loans, and other economic
assistance to Michigan investment markets in this state and to
qualified persons that have a controlling interest in a Michigan
advancement portfolio.
(2) The Michigan investment program shall provide for all of
the following:
(a) Grants, loans, and other economic assistance to assist in
developing Michigan investment markets and Michigan advancement
portfolios in this state.
(b) A detailed application, approval, and compliance process
published and available on the fund's website. The detailed
application, approval, and compliance process shall, at a minimum,
contain the following:
(i) A Michigan investment market or qualified person with a
controlling interest in a Michigan advancement portfolio may apply
for a grant, loan, or other economic assistance in a form and
manner determined by the fund.
(ii) After receipt of an application, the fund may enter into a
written agreement with the Michigan investment market or qualified
person.
(iii) The written agreement shall provide in a clear and concise
manner all of the conditions imposed, including specific time
frames, on the Michigan investment market or the qualified person
to receive a grant, loan, or other economic assistance under this
section.
(iv) The written agreement shall provide for a repayment
provision of any grants, loans, or other economic assistance if the
Michigan investment market or qualified person fails to comply with
the provisions of the written agreement.
(v) The written agreement shall provide for an audit provision
that requires the fund to verify that established milestones for
the Michigan investment market or qualified person have been met.
(c) In any fiscal year, a Michigan investment market or
qualified person shall not receive more than $1,000,000.00 under
this section.
(3) The fund shall not enter into a written agreement with a
Michigan investment market or qualified person unless all of the
following are met:
(a) The Michigan investment market or qualified person
provides a business plan or demonstrates the need for the grant,
loan, or other economic assistance.
(b) The Michigan investment market or qualified person agrees
to provide the data described in the written agreement necessary
for the fund to report to the legislature under this act.
(4) The fund shall post on its website or post on the website
of the Michigan economic development corporation the name and
location of each Michigan investment market and qualified person
that received a grant, loan, or other economic assistance awarded
under this section and the amount of the grant, loan, or other
economic assistance.
(5) The fund, with assistance from the Michigan economic
development corporation and the office of the chief compliance
officer, shall establish policies and procedures to conduct
background checks on each Michigan investment market and qualified
person applying for a grant, loan, or other economic assistance
under this section.
(6) Beginning November 1, 2015 and each year thereafter, the
fund shall report to each house of the legislature on the
activities of the fund under this section that occurred in the
previous fiscal year. The report shall be made available in an
electronic format. The report shall include, but is not limited to,
all of the following:
(a) The total number of new written agreements.
(b) The amount of the grant, loan, or other economic
assistance awarded under this section separately for each Michigan
investment market and each qualified person.
(c) The actual amount of the grant, loan, or other economic
assistance made under this section separately for each Michigan
investment market and each qualified person verified by the fund.
(7) Beginning February 1, 2016 and not less than every 3
months thereafter, the fund shall post on its Internet website the
name and location of each Michigan investment market and each
qualified person that received approval of a grant, loan, or other
economic assistance under this section in the immediately preceding
3-month period.
(8) The legislature finds and declares that funding authorized
under this section to encourage diversification of the economy, to
encourage capital investment in this state, and to promote the
development of Michigan investment markets and Michigan advancement
portfolios in this state is a public purpose and of paramount
concern in the interest of the health, safety, and general welfare
of the citizens of this state.
(9) For purposes of this section, both of the following apply:
(a) A business is considered to be doing business in this
state if all of the following are met:
(i) If the business had gross revenues of more than $5,000.00
from the sale of products or services or other conduct of its
business for its most recent 12-month fiscal period, it derived at
least 80% of its gross revenues, and those of its subsidiaries on a
consolidated basis, from the operation of a business or of real
property located in or from the rendering of services in this state
during 1 of the following time periods:
(A) In its most recent fiscal year, if the first offer of any
part of the issue is made during the first 6 months of the issuer's
current fiscal year.
(B) In the first 6 months of its current fiscal year, or
during the 12-month fiscal period ending with that 6-month period,
if the first offer of any part of the business's intrastate
offering is made during the last 6 months of the business's current
fiscal year.
(ii) At the end of its most recent semiannual fiscal period
before the first offer of any part of the issue, the business had
at least 80% of its assets and those of its subsidiaries on a
consolidated basis located in this state.
(iii) The business intends to use and uses at least 80% of the
net proceeds to the business from the sale or resale of intrastate
securities in connection with the operation of a business or of
real property in, the purchase of real property located in, or the
rendering of services in this state.
(iv) The principal office of the business is located within
this state.
(b) Each of the following is prima facie evidence that an
individual is a resident of this state:
(i) A valid operator's license, chauffeur's license, or
official personal identification card issued by this state.
(ii) A current Michigan voter registration.
(iii) A signed affidavit as described in section 7cc(2) of the
general property tax act, 1893 PA 206, MCL 211.7cc, that indicates
that the individual owns and occupies property in this state as his
or her principal residence.
(iv) Any other record or documents issued by this state that
establishes that the individual's principal residence is in this
state.
(10) As used in this section:
(a) "Institutional investor" means that term as defined in
section 102a of the uniform securities act (2002), 2008 PA 551, MCL
451.2102a.
(b) "Michigan advancement portfolio" means a collection of
investments that, as a whole, meets all of the following criteria:
(i) Includes securities only in businesses that are doing
business in this state.
(ii) At least 10% of the portfolio's overall investment for a
calendar year is in businesses that employ 50 or fewer employees at
the time of the investment.
(iii) Includes securities in businesses that employ 50 or fewer
employees at the time of the investment transacted through a
Michigan investment market.
(iv) Maintains at least $1,000,000.00 in investments at all
times.
(c) "Michigan investment market" means that term as defined in
section 451 of the uniform securities act (2002), 2008 PA 551, MCL
451.2451.
(d) "Other economic assistance" means any other form of
assistance allowed under this act that is not a grant or a loan.
Economic assistance may include providing security for a qualified
person's investments within its Michigan advancement portfolio, and
that security may be equal to or less than 35% of the original
value of the qualified person's Michigan advancement portfolio.
However, that security is only payable in proportion to realized
losses on investments within that portfolio on an individual basis.
(e) "Qualified person" means a person that is doing business
in this state or is a resident of this state and is either an
institutional investor or an accredited investor as defined by rule
501 of SEC regulation D, 17 CFR 230.501. The fund may rely on
confirmation that the purchaser is an accredited investor from a
licensed broker-dealer or another third party in making a
determination that the individual is an accredited investor.