October 20, 2016, Introduced by Senators STAMAS, SCHMIDT, HORN, MEEKHOF, KNEZEK, HERTEL and ANANICH and referred to the Committee on Economic Development and International Investment.
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.
(c) "Eligible business" means a business that proposes to
create a minimum of 500 qualified new jobs in this state or, if the
business proposes to pay a wage that is equal to 125% or more of
the average wage paid in the county in which the facility is
located, 250 qualified 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.
(d) "Facility" means a site or sites within this state in
which an authorized business creates qualified new jobs.
(e) "Full-time job" means a job performed by an individual for
35 hours or more each week and 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.
(f) "Local governmental unit" means a county, city, village,
or township in this state.
(g) "Qualified new job" means a full-time job created by an
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 with an average wage that is equal to or greater than the
average wage paid in the county in which the facility is located.
(h) "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.
(i) "Written agreement" means a written agreement made between
the eligible business and the fund pursuant to this chapter.
Sec. 90h. (1) Beginning January 1, 2017, the fund shall create
and operate the Michigan business withholding abatement program to
provide economic assistance to authorized businesses that provide
qualified new jobs in this state. The fund shall develop and use a
detailed application, approval, and compliance process adopted by a
resolution of the board and published and available on the fund's
website. Program standards, guidelines, templates, or any other
forms used by the fund to implement the Michigan business
withholding abatement program shall be approved by the board.
(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 qualified new jobs at a facility in this state or, if the
business proposes to pay a wage that is equal to 125% or more of
the average wage paid in the county in which the facility is
located, 250 qualified 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.
(c) The wage paid for each qualified new job is equal to or
greater than the average wage paid in the county in which the
facility is located. The fund may include the value of the health
care benefit in determining the wage paid for each qualified new
job for an eligible business under this act.
(d) The plans for the expansion or location are economically
sound.
(e) The eligible business has not begun construction or
occupation of the facility.
(f) 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.
(g) 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.
(h) A cost/benefit analysis by a third party 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.
(i) That the eligible business will create the qualified new
jobs within 5 years of entering into the written agreement as
determined by the fund.
(j) That the eligible business will maintain the number of
qualified 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 qualified new jobs as provided in
the written agreement. Subject to subsection (6), in determining
the amount and duration of the withholding abatement authorized,
the fund shall consider the following factors:
(a) The number of qualified new jobs to be created.
(b) The degree to which the average wage and health care
benefit level of the qualified new jobs exceeds the average wage
and health care benefit paid by private entities in the county in
which the facility is located.
(c) The cost differential to the business between expanding or
locating new jobs in this state and a site outside of 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 local
government unit, 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 develop a sliding scale in determining the
duration of the withholding abatement and the amount of the
withholding abatement. The sliding scale of the duration of the
withholding abatement shall provide a duration of 5 years for
eligible businesses that pay a wage that is equal to the average
wage paid in the county in which the facility is located and up to
a duration of 10 years for eligible businesses that pay a wage that
is equal to 125% or more of the average wage paid in the county in
which the facility is located. The sliding scale of the amount of
the withholding abatement shall provide an amount of 50% of the
withholding abatement for an eligible business that pays a wage
that is equal to the average wage paid in the county in which the
facility is located and an amount of up to 100% of the withholding
abatement for an eligible business that pays a wage that is equal
to 125% or more of the average wage paid in the county in which the
facility is located.
(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.
(c) A statement that the eligible business would not have
added qualified 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 qualified new jobs.
(h) A provision that, for each employee in a qualified 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.
(c) The taxpayer's federal employer identification number or
the Michigan treasury number assigned to the taxpayer.
(3) As a condition of being an authorized business, the
authorized business shall pay a fee of 5% of the withholding
abatement for that year to the fund. The board shall use the fee
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.