SB-1396, As Passed Senate, September 23, 2004
September 15, 2004, Introduced by Senators GARCIA, CROPSEY, GEORGE, SANBORN, ALLEN, GILBERT, VAN WOERKOM, CASSIS, TOY, HARDIMAN, JELINEK, BIRKHOLZ, JOHNSON, KUIPERS, HAMMERSTROM, BERNERO, GOSCHKA, OLSHOVE and SWITALSKI and referred to the Committee on Economic Development, Small Business and Regulatory Reform.
A bill to amend 1995 PA 24, entitled
"Michigan economic growth authority act,"
by amending section 8 (MCL 207.808), as amended by 2004 PA 81.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 8. (1) After receipt of an application, the authority
2 may enter into an agreement with an eligible business for a tax
3 credit under section 9 if the authority determines that all of
4 the following are met:
5 (a) Except as provided in subsection (5), the eligible
6 business creates 1 or more of the following within 12 months of
7 the expansion or location as determined by the authority:
8 (i) A minimum of 75 qualified new jobs at the facility if
9 expanding in this state.
10 (ii) A minimum of 150 qualified new jobs at the facility if
11 locating in this state.
1 (iii) A minimum of 25 qualified new jobs at the facility if
2 the facility is located in a neighborhood enterprise zone as
3 determined under the neighborhood enterprise zone act, 1992 PA
4 147, MCL 207.771 to 207.786, is located in a renaissance zone
5 under the Michigan renaissance zone act, 1996 PA 376, MCL
6 125.2681 to 125.2696, or is located in a federally designated
7 empowerment zone, rural enterprise community, or enterprise
8 community.
9 (iv) A minimum of 5 qualified new jobs at the facility if the
10 eligible business is a qualified high-technology business.
11 (v) A minimum of 5 qualified new jobs at the facility if the
12 eligible business is a rural business.
13 (b) Except as provided in subsection (5), the eligible
14 business agrees to maintain 1 or more of the following for each
15 year that a credit is authorized under this act:
16 (i) A minimum of 75 qualified new jobs at the facility if
17 expanding in this state.
18 (ii) A minimum of 150 qualified new jobs at the facility if
19 locating in this state.
20 (iii) A minimum of 25 qualified new jobs at the facility if
21 the facility is located in a neighborhood enterprise zone as
22 determined under the neighborhood enterprise zone act, 1992 PA
23 147, MCL 207.771 to 207.786, is located in a renaissance zone
24 under the Michigan renaissance zone act, 1996 PA 376, MCL
25 125.2681 to 125.2696, or is located in a federally designated
26 empowerment zone, rural enterprise community, or enterprise
27 community.
1 (iv) If the eligible business is a qualified high-technology
2 business, all of the following apply:
3 (A) A minimum of 5 qualified new jobs at the facility.
4 (B) A minimum of 25 qualified new jobs at the facility within
5 5 years after the date of the expansion or location as determined
6 by the authority and a minimum of 25 qualified new jobs at the
7 facility each year thereafter for which a credit is authorized
8 under this act.
9 (v) If the eligible business is a rural business, all of the
10 following apply:
11 (A) A minimum of 5 qualified new jobs at the facility.
12 (B) A minimum of 25 qualified new jobs at the facility within
13 5 years after the date of the expansion or location as determined
14 by the authority.
15 (c) Except as provided in subsection (5), in addition to the
16 jobs specified in subdivision (b), the eligible business, if
17 already located within this state, agrees to maintain a number of
18 full-time jobs equal to or greater than the number of full-time
19 jobs it maintained in this state prior to the expansion, as
20 determined by the authority.
21 (d) Except as otherwise provided in this subdivision, the
22 average wage paid for all retained jobs and qualified new jobs is
23 equal to or greater than 150% of the federal minimum wage.
24 However, if the eligible business is a qualified high-technology
25 business, then the average wage paid for all qualified new jobs
26 is equal to or greater than 400% of the federal minimum wage.
27 (e) Except for a qualified high-technology business, the
1 expansion, retention, or location of the eligible business will
2 not occur in this state without the tax credits offered under
3 this act.
4 (f) Except for an eligible business described in subsection
5 (5)(b)(ii), the local governmental unit in which the eligible
6 business will expand, be located, or maintain retained jobs, or a
7 local economic development corporation or similar entity, will
8 make a staff, financial, or economic commitment to the eligible
9 business for the expansion, retention, or location.
10 (g) The financial statements of the eligible business
11 indicated that it is financially sound or has submitted a chapter
12 11 plan of reorganization to the bankruptcy court and that its
13 plans for the expansion, retention, or location are economically
14 sound.
15 (h) Except for an eligible business described in subsection
16 (5)(c), the eligible business has not begun construction of the
17 facility.
18 (i) The expansion, retention, or location of the eligible
19 business will benefit the people of this state by increasing
20 opportunities for employment and by strengthening the economy of
21 this state.
22 (j) The tax credits offered under this act are an incentive
23 to expand, retain, or locate the eligible business in Michigan
24 and address the competitive disadvantages with sites outside this
25 state.
26 (k) A cost/benefit analysis reveals that authorizing the
27 eligible business to receive tax credits under this act will
1 result in an overall positive fiscal impact to the state.
2 (l) If feasible, as determined by the authority, in locating
3 the facility, the authorized business reuses or redevelops
4 property that was previously used for an industrial or commercial
5 purpose.
6 (m) If the eligible business is a qualified high-technology
7 business described in section 3(m)(i), the eligible business
8 agrees that not less than 25% of the total operating expenses of
9 the business will be maintained for research and development for
10 the first 3 years of the written agreement.
11 (2) If the authority determines that the requirements of
12 subsection (1) or (5) have been met, the authority shall
13 determine the amount and duration of tax credits to be authorized
14 under section 9, and shall enter into a written agreement as
15 provided in this section. The duration of the tax credits shall
16 not exceed 20 years or for an authorized business that is a
17 distressed business, 3 years. In determining the amount and
18 duration of tax credits authorized, the authority shall consider
19 the following factors:
20 (a) The number of qualified new jobs to be created or
21 retained jobs to be maintained.
22 (b) The average wage level of the qualified new jobs or
23 retained jobs relative to the average wage paid by private
24 entities in the county in which the facility is located.
25 (c) The total capital investment or new capital investment
26 the eligible business will make.
27 (d) The cost differential to the business between expanding,
1 locating, or retaining new jobs in Michigan and a site outside of
2 Michigan.
3 (e) The potential impact of the expansion, retention, or
4 location on the economy of Michigan.
5 (f) The cost of the credit under section 9, the staff,
6 financial, or economic assistance provided by the local
7 government unit, or local economic development corporation or
8 similar entity, and the value of assistance otherwise provided by
9 this state.
10 (3) A written agreement between an eligible business and the
11 authority shall include, but need not be limited to, all of the
12 following:
13 (a) A description of the business expansion, retention, or
14 location that is the subject of the agreement.
15 (b) Conditions upon which the authorized business designation
16 is made.
17 (c) A statement by the eligible business that a violation of
18 the written agreement may result in the revocation of the
19 designation as an authorized business and the loss or reduction
20 of future credits under section 9.
21 (d) A statement by the eligible business that a
22 misrepresentation in the application may result in the revocation
23 of the designation as an authorized business and the refund of
24 credits received under section 9.
25 (e) A method for measuring full-time jobs before and after an
26 expansion, retention, or location of an authorized business in
27 this state.
1 (f) A written certification from the eligible business
2 regarding all of the following:
3 (i) The eligible business will follow a competitive bid
4 process for the construction, rehabilitation, development, or
5 renovation of the facility, and that this process will be open to
6 all Michigan residents and firms. The eligible business may not
7 discriminate against any contractor on the basis of its
8 affiliation or nonaffiliation with any collective bargaining
9 organization.
10 (ii) The eligible business will make a good faith effort to
11 employ, if qualified, Michigan residents at the facility.
12 (iii) The eligible business will make a good faith effort to
13 employ or contract with Michigan residents and firms to
14 construct, rehabilitate, develop, or renovate the facility.
15 (iv) The eligible business is encouraged to make a good faith
16 effort to utilize Michigan-based suppliers and vendors when
17 purchasing goods and services.
18 (g) A condition that if the eligible business qualified under
19 section 8(5)(b)(ii) subsection
(5)(b)(ii) and met
the section
20 8(1)(g) subsection (1)(g) requirement by filing a
chapter 11
21 plan of reorganization, the plan must be approved by the
22 bankruptcy court within 2 years of the date of the agreement or
23 the agreement is rescinded.
24 (4) Upon execution of a written agreement as provided in this
25 section, an eligible business is an authorized business.
26 (5) After receipt of an application, the authority may enter
27 into a written agreement, which shall include a repayment
1 provision of all or a portion of the credits under section 9 for
2 a violation of the written agreement, with an eligible business
3 that meets 1 or more of the following criteria:
4 (a) Is located in this state on the date of the application,
5 makes new capital investment of $250,000,000.00 in this state,
6 and maintains 500 retained jobs, as determined by the authority.
7 (b) Meets either of the following criteria:
8 (i) Relocates production of a product to this state after the
9 date of the application, makes capital investment of
10 $500,000,000.00 in this state, and maintains 500 retained jobs,
11 as determined by the authority.
12 (ii) Maintains 150 retained jobs at a facility, maintains
13 1,000 or more full-time jobs in this state, and makes new capital
14 investment in this state.
15 (iii) Is located in this state on the date of the
16 application, maintains at least 100 retained jobs at a single
17 facility, and agrees to make new capital investment at that
18 facility equal to the
greater of $150,000.00 $100,000.00 per
19 retained job maintained
at that facility or $15,000,000.00
20 $10,000,000.00 to be completed not later than December 31, 2006.
21 (c) Is a distressed business.
22 (6) The authority shall not execute more than 25 new written
23 agreements each year for eligible businesses that are not
24 qualified high-technology businesses, distressed businesses, or
25 rural businesses. If the authority executes less than 25 new
26 written agreements in a year, the authority may carry forward for
27 1 year only the difference between 25 and the number of new
1 agreements executed in the immediately preceding year.
2 (7) The authority shall not execute more than 50 new written
3 agreements each year for eligible businesses that are qualified
4 high-technology businesses or rural business. Only 5 of the 50
5 written agreements for businesses that are qualified
6 high-technology businesses or rural business may be executed each
7 year for qualified rural businesses.
8 (8) The authority shall not execute more than 20 new written
9 agreements each year for eligible businesses that are distressed
10 businesses. The authority shall not execute more than 5 of the
11 written agreements described in this subsection each year for
12 distressed businesses that had 1,000 or more full-time jobs at a
13 facility 4 years immediately preceding the application to the
14 authority under this act.