September 6, 2018, Introduced by Rep. Kahle and referred to the Committee on Transportation and Infrastructure.
A bill to amend 1984 PA 270, entitled
"Michigan strategic fund act,"
by amending sections 90a and 90b (MCL 125.2090a and 125.2090b), as
amended by 2017 PA 239.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 90a. As used in this chapter:
(a) "Community revitalization grant" or "grant" means a grant
that is approved under section 90b and that is subject to
requirements in section 90c.
(b) "Community revitalization incentive" means a community
revitalization grant, a community revitalization loan, or other
economic assistance.
(c) "Community revitalization loan" or "loan" means a loan
that is approved under section 90b and that is subject to the
requirements in section 90d.
(d) "Eligible investment" means 1 or more of the following,
subject to a written agreement under this section, including
investment that occurred prior to the approval of the application,
to the extent that the project has not been completely reimbursed
to or been paid for on behalf of the person requesting a community
revitalization incentive under this chapter:
(i) Any demolition, construction, alteration, rehabilitation,
or improvement of buildings.
(ii) Site improvements.
(iii) The addition of machinery, equipment, or fixtures to the
approved project.
(iv) Architectural, engineering, surveying, and similar
professional fees but not certain soft costs of the eligible
investment as determined by the board, including, but not limited
to, developer fees, appraisals, performance bonds, closing costs,
bank fees, loan fees, risk contingencies, financing costs,
permanent or construction period interest, legal expenses, leasing
or sales commissions, marketing costs, professional fees, shared
savings, taxes, title insurance, bank inspection fees, insurance,
and project management fees.
(v) Qualified investments for research and development of a
qualified technology.
(e) "Eligible property" means property that meets 1 or more of
the following conditions:
(i) Is determined to be a facility. As used in this
subparagraph, "facility" means that term as defined in section 2 of
the brownfield redevelopment financing act, 1996 PA 381, MCL
125.2652.
(ii) Is a historic resource. As used in this subparagraph,
"historic resource" means a publicly or privately owned historic
building, structure, site, object, feature, or open space either
manmade or natural, individually listed or located within and
contributing to a historic district designated by the national
register of historic places, the state register of historic sites,
or a local unit acting under the local historic districts act, 1970
PA 169, MCL 399.201 to 399.215.
(iii) Is blighted property. As used in this subparagraph,
"blighted property" means property that meets any of the following
criteria:
(A) Has been declared a public nuisance in accordance with a
local housing, building, plumbing, fire, or other related code or
ordinance.
(B) Is an attractive nuisance to children because of physical
condition, use, or occupancy.
(C) Is a fire hazard or is otherwise dangerous to the safety
of persons or property.
(D) Has had the utilities, plumbing, heating, or sewerage
permanently disconnected, destroyed, removed, or rendered
ineffective so that the property is unfit for its intended use.
(E) Is tax reverted property owned by a qualified local
governmental unit, by a county, or by this state.
(F) Is property owned or under the control of a land bank fast
track authority under the land bank fast track act, 2003 PA 258,
MCL 124.751 to 124.774.
(G) Has substantial subsurface demolition debris buried on
site so that the property is unfit for its intended use.
(iv) Is functionally obsolete property. As used in this
subparagraph, "functionally obsolete" means that the property is
unable to be used to adequately perform the function for which it
was intended due to a substantial loss in value resulting from
factors such as overcapacity, changes in technology, deficiencies
or superadequacies in design, or other similar factors that affect
the property itself or the property's relationship with other
surrounding property as determined by a Michigan advanced assessing
officer or a Michigan master assessing officer.
(v) Is a parcel that is adjacent or contiguous to property
described in subparagraphs (i) through (iv) if the development of
the adjacent or contiguous parcel is estimated to increase the
taxable value of the property described in subparagraphs (i)
through (iv).
(vi) Through September 30, 2022, is used for a neighborhood
and commercial corridor food initiative.
(vii) Property used for the research and development of a
qualified technology.
(viii) (vii) Any
other property as determined by the fund
board if the development of the property will promote community
revitalization consistent with the findings and declarations in
section 90.
(f) "Federal secretary of the interior's standards for
rehabilitation and guidelines for rehabilitating historic
buildings, 36 CFR 67" means the nationally recognized federal
standards that guide work undertaken on historic resources.
(g) "Neighborhood and commercial corridor food initiative"
means property that will be used primarily as a retail supermarket,
grocery store, produce market, or delicatessen that is located in a
downtown area or in a development area as defined in section 2 of
the corridor improvement authority act, 2005 PA 280, MCL 125.2872,
as determined by the board, that offers unprocessed USDA-inspected
meat and poultry products or meat products that carry the USDA
organic seal, fresh fruits and vegetables, and dairy products for
sale to the public.
(h) "Other economic assistance" means any other form of
assistance allowed under this act that is not a community
revitalization loan or community revitalization grant.
(i) "Qualified investment" means an investment of at least
$20,000.00 as certified by the fund.
(j) "Qualified technology" means advanced propulsion and
mobility technologies or systems integral to the development of
power trains utilizing clean fuel.
(k) "Research and development" means "qualified research" as
that term is defined in section 41(d) of the internal revenue code
of 1986, 26 USC 41.
Sec. 90b. (1) The fund shall create and operate the Michigan
community revitalization program to provide community
revitalization incentives for eligible investments on eligible
property 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 community
revitalization program shall be approved by the board.
(2) A person or 2 or more persons may apply to the fund for
approval of community revitalization incentives associated with a
project under this section. Community revitalization incentives
shall not be approved for any property that is not eligible
property.
(3) Funds appropriated for programs under this chapter must be
placed in the 21st century jobs trust fund created in the Michigan
trust fund act, 2000 PA 489, MCL 12.251 to 12.262.
(4) Subject to section 88c, the fund shall review all
applications for community revitalization incentives. As part of
the application, the applicant shall include documentation
establishing that the project is located on eligible property and a
project
description that includes a project pro-forma. The Except
as otherwise provided in subsection (10), the fund shall consider
the following criteria to the extent reasonably applicable as
reasonably determined by the fund board or its designee to the type
of project proposed when approving a community revitalization
incentive:
(a) The importance of the project to the community in which it
is located.
(b) If the project will act as a catalyst for additional
revitalization of the community in which it is located.
(c) The amount of local community and financial support for
the project.
(d) The applicant's financial need for a community
revitalization incentive.
(e) The extent of reuse of vacant buildings, reuse of historic
resources, and redevelopment of blighted property.
(f) Creation of jobs.
(g) The level of private sector and other contributions,
including, but not limited to, federal funds and federal tax
credits.
(h) Whether the project is financially and economically sound.
(i) Whether the project increases the density of the area.
(j) Whether the project promotes mixed-use development and
walkable communities.
(k) Whether the project converts abandoned public buildings to
private use.
(l) Whether the project promotes sustainable development.
(m) Whether the project involves the rehabilitation of a
historic resource.
(n) Whether the project addresses areawide redevelopment.
(o) Whether the project addresses underserved markets of
commerce.
(p) The level and extent of environmental contamination.
(q) If the rehabilitation of the historic resource will meet
the federal secretary of the interior's standards for
rehabilitation and guidelines for rehabilitating historic
buildings, 36 CFR 67, when applied after engaging in discussions
with the state historic preservation office.
(r) Whether the project will compete with or affect existing
Michigan businesses within the same industry.
(s) Any other additional criteria approved by the board that
are specific to each individual project and are consistent with the
findings and intent of this chapter.
(5) An application shall be approved or denied not more than
90 days after receipt of the application that is considered
administratively complete by the board or its designee. If the
application is neither approved nor denied within 90 days after
being considered administratively complete, it must be considered
by the fund board, or its president if delegated, for action at, or
by, the next regularly scheduled board meeting. If an application
is approved, the fund shall determine the amount of community
revitalization incentives for the project based on the fund's
review of the application and the criteria specified in subsection
(4).
(6) Except as otherwise provided in this subsection, the
amount of community revitalization incentives that the board may
approve for a single project shall not exceed 25% of a project's
eligible investment up to $10,000,000.00. A community
revitalization loan shall not exceed $10,000,000.00, and a
community revitalization grant shall not exceed $1,500,000.00.
However, a combination of loans, grants, and other economic
assistance under this chapter shall not exceed $10,000,000.00 per
project. The board may not approve $10,000,000.00 per project in
community revitalization incentives to more than 3 projects per
fiscal year. The board shall approve not less than 5 projects of
$1,000,000.00 or less per project per fiscal year. If, after
reviewing all applications in a fiscal year, the fund determines
that less than 5 projects warranted an award of $1,000,000.00 or
less, this subsection does not apply. Notwithstanding any other
limitation in this subsection, each year, of the community
revitalization projects approved by the board, the board may
approve up to 3 single projects that shall not exceed 50% of a
project's eligible investment up to $10,000,000.00 for community
revitalization loans and grants for the specific purpose of
historic preservation. Beginning for the 2017-2018 fiscal year and
through the 2021-2022 fiscal year, except as otherwise provided in
subsection (9), not less than 5% of community revitalization
incentives shall be awarded to neighborhood and commercial corridor
food initiatives. Community revitalization incentives for qualified
investments for research and development of a qualified technology
shall not exceed 20% of the amount of the qualified investment of
the applicant not to exceed an amount equal to $1,000,000.00 per
applicant.
(7) When the board approves an application and determines the
amount of community revitalization incentives, the board shall
enter into a written agreement with the applicant. The written
agreement must provide in a clear and concise manner all of the
conditions imposed, including specific time frames, on the
applicant to receive the community revitalization incentive under
this chapter. The written agreement must provide for the secured
status of any loan, repayment, and penalties if the applicant fails
to comply with the provisions of the written agreement as
determined by the board. The applicant shall agree to provide the
data described in the written agreement that is necessary for the
fund to report to the legislature under this chapter.
(8) Not more than 4% of the annual appropriation as provided
by law from the 21st century jobs trust fund established in the
Michigan trust fund act, 2000 PA 489, MCL 12.251 to 12.262, 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. The MEDC may charge actual and
reasonable fees for costs associated with the community
revitalization incentive authorized under this chapter. These fees
are in addition to an amount of the appropriation used for
administering the programs and activities authorized under this
chapter.
(9) The application process for community revitalization
incentives for neighborhood and commercial corridor food
initiatives must provide that applications for neighborhood and
commercial corridor food initiatives must be received on or before
June 1 for that fiscal year. If there are insufficient approved
applications in a fiscal year for community revitalization
incentives for neighborhood and commercial corridor food
initiatives, then the remaining allocated funds may be used for
community revitalization incentives that are not for neighborhood
and commercial corridor food initiatives as determined by the
board. In addition, a new neighborhood and commercial corridor food
initiative, as determined by the board, is not eligible for a
community revitalization incentive if it is located within 1 mile
of an existing retail supermarket, grocery store, or produce
market, as determined by the board, that offers unprocessed USDA-
inspected meat and poultry products or meat products that carry the
USDA organic seal, fresh fruits and vegetables, and dairy products
for sale to the public.
(10) Subsection (4)(i) to (k) and (m) does not apply to
community revitalization incentives for eligible property used for
the research and development of a qualified technology.
(11) (10)
The legislature finds and declares
that funding
authorized under this section is intended to encourage
diversification of the economy, to encourage capital investment in
this state, to promote the creation of qualified new jobs in this
state, and to promote the investment in brownfield and historic
preservation projects that reclaim previously used property that is
less likely to be revitalized without the investment.