SB-1187, As Passed Senate, April 15, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SENATE SUBSTITUTE FOR HOUSE SUBSTITUTE FOR

 

SENATE BILL NO. 1187

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1995 PA 24, entitled

 

"Michigan economic growth authority act,"

 

by amending sections 3 and 5 (MCL 207.803 and 207.805), section 3

 

as amended by 2008 PA 87 and section 5 as amended by 2003 PA 248.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3. As used in this act:

 

     (a) "Affiliated business" means a business that is 100% at

 

least 50% owned and controlled, directly or indirectly, by an

 

associated business.

 

     (b) "Associated business" means a business that owns at least

 

50% of and controls, directly or indirectly, an authorized

 

business.

 

     (c) "Authorized business" means 1 of the following:

 


     (i) A single eligible business with a unique federal employer

 

identification number that has met the requirements of section 8

 

and with which the authority has entered into a written agreement

 

for a tax credit under section 9.

 

     (ii) A single eligible business with a unique federal employer

 

identification number that has met the requirements of section 8,

 

except as provided in this subparagraph, and with which the

 

authority has entered into a written agreement for a tax credit

 

under section 9. An eligible business is not required to create

 

qualified new jobs or maintain retained jobs if qualified new jobs

 

are created or retained jobs are maintained by an associated or

 

business, subsidiary business, affiliated business, or an employee

 

leasing company or professional employer organization that has

 

entered into a contractual service agreement with the authorized

 

business in which the employee leasing company or professional

 

employer organization withholds income and social security taxes on

 

behalf of the authorized business.

 

     (iii) A single eligible business with a unique federal employer

 

identification number that has met the requirements of section 8,

 

except as provided in this subparagraph, and with which the

 

authority has entered into a written agreement for a tax credit

 

under section 9. An eligible business is not required to create

 

qualified new jobs or maintain retained jobs if qualified new jobs

 

are created or retained jobs are maintained by a subsidiary

 

business that withholds income and social security taxes, or an

 

employee leasing company or professional employer organization that

 

has entered into a contractual service agreement with the

 


authorized business in which the employee leasing company or

 

professional employer organization withholds income and social

 

security taxes on behalf of the authorized business.

 

     (d) "Authority" means the Michigan economic growth authority

 

created under section 4.

 

     (e) "Business" means proprietorship, joint venture,

 

partnership, limited liability partnership, trust, business trust,

 

syndicate, association, joint stock company, corporation,

 

cooperative, limited liability company, or any other organization.

 

     (f) "Distressed business" means a business that meets all of

 

the following as verified by the Michigan economic growth

 

authority:

 

     (i) Four years immediately preceding the application to the

 

authority under this act, the business had 150 or more full-time

 

jobs in this state.

 

     (ii) Within the immediately preceding 4 years, there has been a

 

reduction of not less than 30% of the number of full-time jobs in

 

this state during any consecutive 3-year period. The highest number

 

of full-time jobs within the consecutive 3-year period shall be

 

used in order to determine the percentage reduction of full-time

 

jobs in this subparagraph.

 

     (iii) Is not a seasonal employer as defined in section 27 of the

 

Michigan employment security act, 1936 (Ex Sess) PA 1, MCL 421.27.

 

     (g) "Eligible business" means a distressed business or

 

business that proposes to maintain retained jobs after December 31,

 

1999 or to create qualified new jobs in this state after April 18,

 

1995 in manufacturing, mining, research and development, wholesale

 


and trade, film and digital media production, or office operations

 

or a business that is a qualified high-technology business or a

 

business that is a tourism attraction facility or a qualified

 

lodging facility. An Except for a retail establishment that meets

 

the criteria in section 8(11), an eligible business does not

 

include retail establishments, professional sports stadiums, or

 

that portion of an eligible business used exclusively for retail

 

sales. Professional sports stadium does not include a sports

 

stadium in existence on June 6, 2000 that is not used by a

 

professional sports team on the date that an application related to

 

that professional sports stadium is filed under section 8.

 

     (h) "Facility" means a site or sites within this state in

 

which an authorized business or subsidiary business maintains

 

retained jobs or creates qualified new jobs.

 

     (i) "Film and digital media production" means the development,

 

preproduction, production, postproduction, and distribution of

 

single media or multimedia entertainment content for distribution

 

or exhibition to the general public in 2 or more states by any

 

means and media in any digital media format, film, or video tape,

 

including, but not limited to, a motion picture, a documentary, a

 

television series, a television miniseries, a television special,

 

interstitial television programming, long-form television,

 

interactive television, music videos, interactive games, video

 

games, internet programming, an internet video, a sound recording,

 

a video, digital animation, or an interactive website. Film and

 

digital media production also includes the development,

 

preproduction, production, postproduction, and distribution of a

 


trailer, pilot, video teaser, or demo created primarily to

 

stimulate the sale, marketing, promotion, or exploitation of future

 

investment in a film or digital media production. Film or digital

 

media production does not include the production of any of the

 

following:

 

     (i) A production for which records are required to be

 

maintained with respect to any performer in the production under 18

 

USC 2257.

 

     (ii) A production that includes obscene matter or an obscene

 

performance as described in 1984 PA 343, MCL 752.361 to 752.374.

 

     (iii) A production that primarily consists of televised news or

 

current events.

 

     (iv) A production that primarily consists of a live sporting

 

event.

 

     (v) A production that primarily consists of political

 

advertising.

 

     (vi) A radio program.

 

     (vii) A weather show.

 

     (viii) A financial market report.

 

     (ix) A talk show.

 

     (x) A game show.

 

     (xi) A production that primarily markets a product or service.

 

     (xii) An awards show or other gala event production.

 

     (xiii) A production with the primary purpose of fund-raising.

 

     (xiv) A production that primarily is for employee training or

 

in-house corporate advertising or other similar production.

 

     (j) "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.

 

     (iv) Another person as provided in section 8(1)(c).

 

     (v) A business that sells all or part of its assets to an

 

eligible business that receives a credit under section 8(1) or (5).

 

     (k) "Local governmental unit" means a county, city, village,

 

or township in this state.

 

     (l) "High-technology activity" means 1 or more of the

 

following:

 

     (i) Advanced computing, which is any technology used in the

 

design and development of any of the following:

 

     (A) Computer hardware and software.

 

     (B) Data communications.

 

     (C) Information technologies.

 

     (D) Film and digital media production.

 

     (ii) Advanced materials, which are materials with engineered

 

properties created through the development of specialized process

 

and synthesis technology.

 

     (iii) Biotechnology, which is any technology that uses living

 

organisms, cells, macromolecules, microorganisms, or substances

 

from living organisms to make or modify a product, improve plants

 

or animals, or develop microorganisms for useful purposes.

 

Biotechnology does not include human cloning as defined in section

 


16274 of the public health code, 1978 PA 368, MCL 333.16274, or

 

stem cell research with embryonic tissue.

 

     (iv) Electronic device technology, which is any technology that

 

involves microelectronics, semiconductors, electronic equipment,

 

and instrumentation, radio frequency, microwave, and millimeter

 

electronics, and optical and optic-electrical devices, or data and

 

digital communications and imaging devices.

 

     (v) Engineering or laboratory testing related to the

 

development of a product.

 

     (vi) Technology that assists in the assessment or prevention of

 

threats or damage to human health or the environment, including,

 

but not limited to, environmental cleanup technology, pollution

 

prevention technology, or development of alternative energy

 

sources.

 

     (vii) Medical device technology, which is any technology that

 

involves medical equipment or products other than a pharmaceutical

 

product that has therapeutic or diagnostic value and is regulated.

 

     (viii) Product research and development.

 

     (ix) Advanced vehicles technology, which is any technology that

 

involves electric vehicles, hybrid vehicles, or alternative fuel

 

vehicles, or components used in the construction of electric

 

vehicles, hybrid vehicles, or alternative fuel vehicles. For

 

purposes of this act:

 

     (A) "Electric vehicle" means a road vehicle that draws

 

propulsion energy only from an on-board source of electrical

 

energy.

 

     (B) "Hybrid vehicle" means a road vehicle that can draw

 


propulsion energy from both a consumable fuel and a rechargeable

 

energy storage system.

 

     (x) Tool and die manufacturing.

 

     (xi) Competitive edge technology as defined in section 88a of

 

the Michigan strategic fund act, 1984 PA 270, MCL 125.2088a.

 

     (xii) Digital media, including internet publishing and

 

broadcasting, video gaming, web development, and entertainment

 

technology.

 

     (xiii) Music production, including record production and

 

development, sound recording studios, and integrated high-

 

technology record production and distribution.

 

     (xiv) Film and video, including motion picture and video

 

production and distribution, postproduction services, and

 

teleproduction and production services.

 

     (m) "New capital investment" means 1 or more of the following:

 

     (i) New construction. As used in this subparagraph:

 

     (A) "New construction" means property not in existence on the

 

date the authorized business enters into a written agreement with

 

the authority and not replacement construction. New construction

 

includes the physical addition of equipment or furnishings, subject

 

to section 27(2)(a) to (o) of the general property tax act, 1893 PA

 

206, MCL 211.27.

 

     (B) "Replacement construction" means that term as defined in

 

section 34d(1)(b)(v) of the general property tax act, 1893 PA 206,

 

MCL 211.34d.

 

     (ii) The purchase of new personal property. As used in this

 

subparagraph, "new personal property" means personal property that

 


is not subject to or that is exempt from the collection of taxes

 

under the general property tax act, 1893 PA 206, MCL 211.1 to

 

211.155, on the date the authorized business enters into a written

 

agreement with the authority.

 

     (n) "Qualified high-technology business" means a business or

 

facility that is either of the following:

 

     (i) A business with not less than 25% of the total operating

 

expenses of the business used for research and development in the

 

tax year in which the business files an application under this act

 

as determined under generally accepted accounting principles and

 

verified by the authority.

 

     (ii) A business or facility whose primary business activity is

 

high-technology activity or a qualified high-wage activity.

 

     (o) "Qualified high-wage activity" means a business that has

 

an average wage. Qualified high-wage activity may also include, but

 

is not limited to, 1 or more of the following as long as they have

 

an average wage of 300% or more of the federal minimum wage:

 

     (i) Architecture and design, including architectural design,

 

graphic design, interior design, fashion design, and industrial

 

design.

 

     (ii) Advertising and marketing, including advertising and

 

marketing firms and agencies, public relations agencies, and

 

display advertising.

 

     (p) "Qualified lodging facility" means 1 or more of the

 

following:

 

     (i) Lodging facilities that constitute a portion of a tourism

 

attraction facility and represent less than 50% of the total cost

 


of the tourism attraction facility, or the lodging facilities are

 

to be located on recreational property owned or leased by the

 

municipal, state, or federal government.

 

     (ii) The lodging facilities involve the restoration or

 

rehabilitation of a structure that is listed individually in the

 

national register of historic places or are located in a national

 

register historic district and certified by this state as

 

contributing to the historic significance of the district, and the

 

rehabilitation or restoration project has been approved in advance

 

by this state.

 

     (q) (o) "Qualified new job" means 1 of the following:

 

     (i) A full-time job created by an authorized business at a

 

facility that is in excess of the number of full-time jobs the

 

authorized business maintained in this state prior to the expansion

 

or location, as determined by the authority.

 

     (ii) For jobs created after July 1, 2000, a full-time job at a

 

facility created by an eligible business that is in excess of the

 

number of full-time jobs maintained by that eligible business in

 

this state up to 120 days before the eligible business became an

 

authorized business, as determined by the authority.

 

     (iii) For a distressed business, a full-time job at a facility

 

that is in excess of the number of full-time jobs maintained by

 

that eligible business in this state on the date the eligible

 

business became an authorized business.

 

     (r) (p) "Retained jobs" means the number of full-time jobs at

 

a facility of an authorized business maintained in this state on a

 

specific date as that date and number of jobs is determined by the

 


authority.

 

     (s) (q) "Rural business" means an eligible business located in

 

a county with a population of 90,000 or less.

 

     (t) (r) "Subsidiary business" means a business that is

 

directly or indirectly controlled or at least 80% owned by an

 

authorized business.

 

     (u) "Tourism attraction facility" means a cultural or

 

historical site, a recreation or entertainment facility, an area of

 

natural phenomena or scenic beauty, or an entertainment destination

 

center as determined by the Michigan economic growth authority as

 

follows:

 

     (i) In making a determination, the Michigan economic growth

 

authority shall consider all of the following:

 

     (A) Whether the facility will actually attract tourists.

 

     (B) Whether 50% or more of the persons using the facility

 

reside outside a 100-mile radius.

 

     (C) Whether 50% or more of the gross receipts are from

 

admissions, food, or nonalcoholic drinks.

 

     (D) Whether the facility offers a unique experience.

 

     (ii) The Michigan economic growth authority shall not determine

 

any of the following as a tourism attraction facility:

 

     (A) Facilities, other than an entertainment destination

 

center, that are primarily devoted to the retail sale of goods, a

 

theme restaurant destination attraction, or a tourism attraction

 

where the attraction is a secondary and subordinate component to

 

the sale of goods.

 

     (B) Recreational facilities that do not serve as a likely

 


destination where individuals who are not residents of the state

 

would remain overnight in commercial lodging at or near the

 

facility.

 

     (v) (s) "Written agreement" means a written agreement made

 

pursuant to section 8. A written agreement may address new jobs,

 

qualified new jobs, full-time jobs, retained jobs, or any

 

combination of new jobs, qualified new jobs, full-time jobs, or

 

retained jobs.

 

     Sec. 5. (1) The powers of the authority are vested in the

 

authority members in office. Regardless of the existence of a

 

vacancy, a majority of the members of the authority constitutes a

 

quorum necessary for the transaction of business at a meeting or

 

the exercise of a power or function of the authority. Action may be

 

taken by the authority at a meeting upon a vote of the majority of

 

the members present. Members of the authority may be present in

 

person at a meeting of the authority or, if authorized by the

 

bylaws of the authority, by use of telecommunications or other

 

electronic equipment.

 

     (2) The authority shall meet at the call of the chairperson or

 

as may be provided by the authority. Meetings of the authority may

 

be held anywhere within this state.

 

     (3) The business of the authority shall be conducted at a

 

public meeting of the authority 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 as provided

 

by the open meetings act, 1976 PA 267, MCL 15.261 to 15.275. A

 

record or portion of a record, material, or other data received,

 


prepared, used, or retained by the authority in connection with an

 

application for a tax credit under section 9 that relates to

 

financial or proprietary information submitted by the applicant

 

that is considered by the applicant and acknowledged by the

 

authority 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. A designee of the authority shall make the

 

determination as to whether the authority acknowledges as

 

confidential any financial or proprietary information submitted by

 

the applicant and considered by the applicant as confidential.

 

Unless considered proprietary information, the authority shall not

 

acknowledge routine financial information as confidential. If the

 

designee of the authority determines that information submitted to

 

the authority is financial or proprietary information and is

 

confidential, the designee of the authority shall release a written

 

statement, subject to disclosure under the freedom of information

 

act, 1976 PA 442, MCL 15.231 to 15.246, which 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

 

designee of the authority to be confidential as financial or

 

proprietary information.

 

     (c) A broad nonspecific overview of the financial or

 

proprietary information determined to be confidential.

 

     (4) The authority shall not disclose financial or proprietary

 


information not subject to disclosure pursuant to subsection (3)

 

without consent of the applicant submitting the information.

 

     (5) As used in this section, "financial or proprietary

 

information" means information that has not been publicly

 

disseminated or is unavailable from other sources, the release of

 

which might cause the applicant significant competitive harm.

 

Financial or proprietary information does not include a written

 

agreement under this act.

 

     Enacting section 1. This amendatory act does not take effect

 

unless all of the following bills of the 94th Legislature are

 

enacted into law:

 

     (a) Senate Bill No. 1188.

 

     (b) Senate Bill No. 1189.

 

     (c) Senate Bill No. 1190.