May 24, 2006, Introduced by Rep. Drolet and referred to the Committee on Government Operations.
A bill to amend 1984 PA 270, entitled
"Michigan strategic fund act,"
by amending sections 4, 5, 7, and 13 (MCL 125.2004, 125.2005,
125.2007, and 125.2013), as amended by 2005 PA 225; and to repeal
acts and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 4. As used in this act:
(a) "Board" means the board of directors of the Michigan
strategic fund, except where the context clearly requires a
different definition.
(b) "Economic development project" means an endeavor related
to industrial, commercial, or agricultural enterprise. Economic
development project includes, but is not limited to, a theme or
recreation park; agricultural or forestry production, harvesting,
storage, or processing facilities or equipment; and the use of
equipment or facilities designed to produce energy from renewable
resources. Economic development project does not include that
portion of an endeavor devoted to the sale of goods at retail,
except that, as used in relation to the fund insuring a transaction
entered into by a depository institution, and as used in relation
to a loan by the fund to a minority owned business, an economic
development project may include that portion of an endeavor devoted
to
the sale of goods at retail. Economic development project does
not
include that portion of an endeavor devoted to housing or a
program
or activity authorized under chapter 8A.
(c) "Financial institution" means a state or nationally
chartered bank or a state or federally chartered savings and loan
association, savings bank, or credit union whose deposits are
insured by an agency of the United States government and that
maintains a principal office or branch office in this state under
the laws of this state or the United States.
(d) "Fund" means the Michigan strategic fund created under
section 5, except where the context clearly requires a different
definition.
(e) "Michigan economic development corporation" or "MEDC"
means the Michigan economic development corporation, the public
body corporate created under section 28 of article VII of the state
constitution of 1963 and the urban cooperation act of 1967, 1967
(Ex Sess) PA 7, MCL 124.501 to 124.512, by a contractual interlocal
agreement effective April 5, 1999, and subsequently amended,
between local participating economic development corporations
formed under the economic development corporations act, 1974 PA
338, MCL 125.1601 to 125.1636, and the fund.
(f) "Municipality" means a county, city, village, township,
port district, development organization, institution of higher
education, community or junior college, or subdivision or
instrumentality of any of the legal entities listed in this
subdivision.
(g) "Person" means an individual, sole proprietorship,
partnership, limited partnership, limited liability partnership,
limited liability company, joint venture, profit or nonprofit
corporation including a public or private college or university,
public utility, local industrial development corporation, economic
development corporation, or other association of persons organized
for agricultural, commercial, or industrial purposes.
(h) "Project" means an economic development project and, in
addition, means the acquisition, construction, reconstruction,
conversion, or leasing of an industrial, commercial, retail,
agricultural, or forestry enterprise, or any part of these, to
carry out the purposes and objectives of this act and of the fund,
including, but not limited to, acquisition of land or interest in
land, buildings, structures, or other planned or existing planned
improvements to land including leasehold improvements, machinery,
equipment, or furnishings which include, but are not limited to,
the following: research parks; office facilities; engineering
facilities; research and development laboratories; warehousing
facilities; parts distribution facilities; depots or storage
facilities; port facilities; railroad facilities, including
trackage, right of way, and appurtenances; airports; water and air
pollution control equipment or waste disposal facilities; theme or
recreational parks; equipment or facilities designed to produce
energy from renewable resources; farms, ranches, forests, and other
agricultural or forestry commodity producers; agricultural
harvesting, storage, transportation, or processing facilities or
equipment; grain elevators; shipping heads and livestock pens;
livestock; warehouses; wharves and dock facilities; water,
electricity, hydro electric, coal, petroleum, or natural gas
provision facilities; dams and irrigation facilities; sewage,
liquid, and solid waste collection, disposal treatment, and
drainage
services and facilities. Project does not include a
program
or activity authorized under chapter 8A.
(i) "Private sector" means other than the fund, a state or
federal source, or an agency of a state or the federal government.
Sec. 5. (1) There is created by this act a public body
corporate and politic to be known as the Michigan strategic fund.
The fund shall be within the department of treasury and shall
exercise its prescribed statutory powers, duties, and functions
independently of the state treasurer. The statutory authority,
powers, duties, functions, records, personnel, property, unexpended
balances of appropriations, allocations, and other funds of the
fund, including the functions of budgeting, procurement, personnel,
and management-related functions, shall be retained by the fund,
and the fund shall be an autonomous entity within the department of
treasury in the same manner as the Michigan employment security
commission was designated an autonomous entity within the Michigan
department of labor under section 379 of the executive organization
act of 1965, 1965 PA 380, MCL 16.479.
(2) Except as otherwise provided in this act, the purposes,
powers, and duties of the Michigan strategic fund are vested in and
shall be exercised by a board of directors.
(3) Except as provided in subsection (4), the board shall
consist of the director of the department of labor and economic
growth or his or her designee from within the department of labor
and economic growth, the state treasurer or his or her designee
from within the department of treasury, the chief executive officer
of the MEDC, and 6 other members with knowledge, skill, and
experience in the academic, business, or financial field, who shall
be appointed by the governor with the advice and consent of the
senate. None of the 6 members appointed under this section shall be
employees of this state. Not less than 5 members of the board
appointed under this subsection shall be members of the private
sector. Five of the 6 members appointed under this subsection shall
serve for fixed terms. Upon completion of each fixed term expiring
after December 30, 2005, a member shall be appointed for a term of
4 years. Of the private sector members appointed by the governor
for a fixed term, 1 shall be appointed from a list of 3 or more
nominees of the speaker of the house of representatives
representing persons within the private sector with experience in
private equity or venture capital investments, commercial lending,
or commercialization of technology and 1 shall be appointed from a
list of 3 or more nominees of the senate majority leader
representing persons within the private sector with experience in
private equity or venture capital investments, commercial lending,
or commercialization of technology. A member appointed under this
subsection or subsection (4) shall serve until a successor is
appointed, and a vacancy shall be filled for the balance of the
unexpired term in the same manner as the original appointment. The
member appointed under this subsection and serving without a fixed
term shall serve at the pleasure of the governor. Of the members
appointed under this subsection and subsection (4), there shall be
minority, female, and small business representation. After December
31, 2005, at least 2 of the members of the board shall have
experience in private equity or venture capital investments, at
least 1 of the members shall have experience in commercial lending,
and at least 1 of the members of the board shall have experience in
commercialization of technology.
(4) In addition to the 9 members of the board under subsection
(3), not later than December 15, 2005, the governor shall appoint,
with the advice and consent of the senate, 2 additional members to
the board for terms expiring December 31, 2007. The members
appointed under this subsection shall be from the private sector
and shall have experience in private equity or venture capital
investments, commercial lending, or commercialization of
technology. From the date of the appointment of the members under
this subsection until December 31, 2007, the board shall have 11
members. After December 31, 2007, the board shall have 9 members.
(5) The governor shall designate 1 member of the board to
serve as its chairperson. The governor shall designate 1 member of
the board to serve as president of the fund and may designate 1
member to serve as vice-president of the fund. The chairperson,
president, and vice-president, if a vice-president is designated,
shall serve as those officers at the pleasure of the governor.
(6) Members of the board shall serve without compensation for
their membership on the board, except that members of the board may
receive reasonable reimbursement for necessary travel and expenses.
(7) The board may delegate to its president, vice-president,
staff, or others those functions and authority that the board deems
necessary or appropriate, which may include the oversight and
supervision
of employees of the fund. However, responsibilities
specifically
vested in the board under chapter 8A shall be
performed
by the board and shall not be transferred to the MEDC.
(8) A majority of the members of the board appointed and
serving constitutes
constitute a quorum for the transaction of
business at a meeting, or the exercise of a power or function of
the fund, notwithstanding the existence of 1 or more vacancies. The
board may act only by resolution approved by a majority of board
members appointed and serving. Voting upon action taken by the
board shall be conducted by majority vote of the members appointed
and serving. Members of the board may be present in person at a
meeting of the board or, if authorized by the bylaws of the board,
by use of telecommunications or other electronic equipment. The
fund shall meet at the call of the chair and as may be provided in
the bylaws of the fund. Meetings of the fund may be held anywhere
within the state of Michigan.
(9) The business of the board shall be conducted at a public
meeting of the board held in compliance with the open meetings act,
1976 PA 267, MCL 15.261 to 15.275. Public notice of the time, date,
and place of the meeting shall be given in the manner required by
the
open meetings act, 1976 PA 267, MCL 15.261 to 15.267 15.275,
and shall also be provided on an internet website operated by the
fund. A record or portion of a record, material, or other data
received, prepared, used, or retained by the fund or any of its
centers in connection with an application to or with a project or
product
assisted by the fund or any of its centers or with an
award,
grant, loan, or investment under chapter 8A that relates to
financial or proprietary information submitted by the applicant
that is considered by the applicant and acknowledged by the board
as confidential shall not be subject to the disclosure requirements
of the freedom of information act, 1976 PA 442, MCL 15.231 to
15.246. The
disclosure of a record concerning investment
information
described in section 88c under the freedom of
information
act, 1976 PA 442, MCL 15.231 to 15.246, is subject to
the
limitations provided in section 88c. The board may also meet
in closed session pursuant to the open meetings act, 1976 PA 267,
MCL
15.261 to 15.267 15.275, to make a determination of whether
it acknowledges as confidential any financial or proprietary
information submitted by the applicant and considered by the
applicant as confidential. Unless considered proprietary
information, the board shall not acknowledge routine financial
information as confidential. If the board determines that
information submitted to the fund is financial or proprietary
information and is confidential, the board shall release a written
statement, subject to disclosure under the freedom of information
act, 1976 PA 442, MCL 15.231 to 15.246, that states all of the
following:
(a) The name and business location of the person requesting
that the information submitted be confidential as financial or
proprietary information.
(b) That the information submitted was determined by the board
to be confidential as financial or proprietary information.
(c) A broad nonspecific overview of the financial or
proprietary information determined to be confidential.
(10) The fund shall not disclose financial or proprietary
information not subject to disclosure pursuant to subsection (9)
without consent of the applicant submitting the information.
(11) Any document to which the fund is a party evidencing a
loan, insurance, mortgage, lease, venture, or other type of
agreement the fund is authorized to enter into shall not be
considered financial or proprietary information that may be exempt
from disclosure under subsection (9).
(12) For purposes of subsections (9), (10), and (11),
"financial or proprietary information" means information that has
not been publicly disseminated or which is unavailable from other
sources, the release of which might cause the applicant significant
competitive harm.
Sec. 7. The fund shall have the powers and duties provided in
this act, the powers delegated by other laws or executive orders,
including, but not limited to, the power to:
(a) Sue and be sued; to have a seal and alter the same at
pleasure; to have perpetual succession; to make, execute, and
deliver contracts, conveyances, and other instruments necessary or
convenient to the exercise of its powers; and to make and amend
bylaws.
(b) Solicit and accept gifts, grants, loans, and other aids
from any person or the federal, state, or a local government or any
agency of the federal, state, or a local government, or to
participate in any other way in any federal, state, or local
government program.
(c) Make grants, loans, and investments; to guarantee and
insure loans, leases, bonds, notes, or other indebtedness, whether
public or private; and to issue letters of credit.
(d) Construct; acquire by gift, purchase, installment
purchase, or lease; and reconstruct, improve, repair, or equip a
project or any part of a project.
(e) Borrow money and issue bonds and notes to finance part or
all of the project costs of a project, or of a loan under
subdivision (r) for an export transaction, and to secure those
bonds and notes by mortgage, assignment, or pledge of any of its
money, revenues, income, and properties. The authority provided by
this subdivision includes, but is not limited to, issuing bonds and
notes to acquire and install machinery, equipment, furnishings, and
other personal property, notwithstanding that the fund does not own
or propose to own or finance the building or land in or near to
which the machinery, equipment, furnishings, and other personal
property is or is to be located.
(f) Acquire or contract to acquire from any person,
municipality, the federal or state government, or any agency of the
foregoing, or otherwise, leaseholds, real or personal property or
any interest in real or personal property; to own, hold, clear,
improve, and rehabilitate and to sell, assign, exchange, transfer,
convey, lease, mortgage, or otherwise dispose of or encumber
leaseholds, real or personal property or any interest in real or
personal property, as is convenient for the accomplishment of the
purposes of this act and of the fund.
(g) Procure insurance against any loss in connection with the
fund's property, assets, or activities.
(h) Invest any money of the fund at the fund's discretion, in
any obligations determined proper by the fund, and name and use
depositories for its money.
(i) Engage personnel as is necessary and engage the services
of private consultants, managers, counsel, auditors, engineers, and
scientists for rendering professional management and technical
assistance and advice, payable out of any money of the fund legally
available for this purpose.
(j) Charge, impose, and collect fees and charges in connection
with any transaction and provide for reasonable penalties for
delinquent payment of fees or charges.
(k) Indemnify and procure insurance indemnifying any members
of the board from personal loss or accountability from liability
asserted by a person on the bonds or notes of the fund or from any
personal liability or accountability by reason of the issuance of
the bonds, notes, insurance, or guarantees; by reason of
acquisition, construction, ownership, or operation of a project; or
by reason of any other action taken or the failure to act by the
fund.
(l) Enter into a lease for the use or sale of a project. The
lease may provide for options to purchase or renew.
(m) Mortgage or create security interests in a project or any
part of a project, or in a lease or loan, or in the rents,
revenues, or sums to be paid thereunder, in favor of the holders of
the bonds or notes issued by the fund.
(n) Convey or release a project or any part of a project to a
lessee, purchaser, or borrower under any agreement after provision
has been made for the retirement in full of the bonds or notes
issued for that project under terms and conditions provided in the
agreement or as may be agreed with the holders of the bonds or
notes, at any time where the obligation of the lessee, purchaser,
or borrower to make the payments prescribed shall remain fixed as
provided in the agreement notwithstanding the conveyance or
release, or as may otherwise be agreed with the holders of the
bonds or notes.
(o) Make loans, participate in the making of loans, undertake
commitments to make loans and mortgages, buy and sell loans and
mortgages at public or private sale, rewrite loans and mortgages,
discharge loans and mortgages, foreclose on a mortgage, commence an
action to protect or enforce a right conferred upon the fund by a
law, mortgage, loan, contract, or other agreement, bid for and
purchase property which was the subject of the mortgage at a
foreclosure or other sale, acquire or take possession of the
property and in that event complete, administer, pay the principal
and interest on obligations incurred in connection with that
property, and dispose of and otherwise deal with the property, in a
manner as may be necessary or desirable to protect the interests of
the fund.
(p) Certify, for the purpose of determining eligible
investments for the basis of a single business tax credit, minority
venture capital companies, as defined by law.
(q) Except as otherwise provided in this subdivision, to
create and operate centers, accounts, and funds as required or
permitted by law for the use and disbursement of assets of the
fund. The
powers granted under this subdivision do not apply to
chapter
8A.
(r) To make loans to a financial institution to facilitate
financing of all or part of an export related transaction
including, but not limited to, pre-export working capital financing
and postexport receivable financing.
(s) Do all other things necessary or convenient to achieve the
objectives and purposes of the fund, this act, or other laws that
relate to the purposes and responsibilities of the fund.
Sec. 13. The total debt owed to the fund, excluding rights and
royalties under a venture capital agreement or obligations to the
fund resulting from an industrial development revenue bond or note,
in relation to any 1 project shall at no time exceed 5% of the
total assets of the fund, except that upon approval by a 2/3 vote
of the board this amount may be increased to not to exceed 10% of
the
assets of the fund. This section does not apply to a program
or
activity authorized under chapter 8A.
Enacting section 1. Chapter 8a of the Michigan strategic fund
act, 1984 PA 270, MCL 125.2088 to 125.2088p, is repealed.