SB-1187, As Passed Senate, March 26, 2008

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 2007 PA 62 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.

(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,

subsidiary, or 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, 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

(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) "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).

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

or township in this state.

(k) "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.

(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.

(l) "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.

(m) "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

Senate Bill No. 1187 as amended March 25, 2008

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

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

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

(o) "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

contributing to the historic significance of the district, and the

rehabilitation or restoration project has been approved in advance

by this state.

(p) ~~(n)~~ "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~~ 90 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.

(q) ~~(o)~~ "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.

(r) ~~(p)~~ "Rural business" means an eligible business located in

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

(s) ~~(q)~~ "Subsidiary business" means a business that is

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

authorized business.

(t) "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.

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 that are primarily devoted to the retail sale

of goods, other than an entertainment destination center, a theme

restaurant destination attraction, or a tourism attraction where

the sale of goods is a secondary and subordinate component of the

attraction.

(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.

(u) ~~(r)~~ "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.

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.