March 15, 2012, Introduced by Rep. Wayne Schmidt and referred to the Committee on Commerce.
A bill to amend 1984 PA 270, entitled
"Michigan strategic fund act,"
by amending sections 88f and 88q (MCL 125.2088f and 125.2088q),
section 88f as added by 2005 PA 225 and section 88q as amended by
2009 PA 144.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 88f. (1) When creating programs for 21st century
investments under this chapter, the fund shall create and operate
the venture capital investment program. The fund board shall
authorize investments that shall invest only in or alongside a
qualified venture capital fund that invests primarily in early
stage businesses. The venture capital investment program shall do
all of the following:
(a) Provide that the return on investment that is sought is
greater than the return on investment under the commercial loan
portion of the loan enhancement program to reflect the greater
risk.
(b) Provide that the qualified venture capital fund will have
an amount at risk greater than the fund's investment.
(c) Provide that a qualified venture capital fund is not
eligible to participate in a venture capital investment program
unless it operates a business development office in this state
staffed with at least 1 full-time equivalent employee who is
actively seeking opportunities for venture capital investments in
businesses located in this state unless the investment opportunity
requested by the qualified venture capital fund is targeted to a
specific transaction involving a competitive edge technology that
will not occur without the fund's investment as determined by the
fund board.
(d) Provide that a qualified venture capital fund is not
eligible to participate in a venture capital investment program
unless it agrees to make venture capital investments in this state
at a percentage rate that is not less than the percentage rate that
the fund's investment in the qualified venture capital fund bears
to the total amount in the qualified venture capital fund.
(e) Provide that a qualified venture capital fund is not
eligible to participate in a venture capital investment program if
its investment strategy provides for the breakup and liquidation of
businesses. The fund board shall make sure that the agreements with
a venture capital fund have the appropriate provisions to prohibit
the actions described in this subdivision.
(f) Coordinate with the Michigan early stage venture
investment fund as defined in section 3 of the Michigan early stage
venture investment act of 2003, 2003 PA 296, MCL 125.2233, to
ensure that a continuum of venture capital is available in this
state.
(g) Provide that 80% of the funds allocated to a venture
capital investment program shall focus on competitive edge
technologies.
(h) Provide that a qualified venture capital fund may make
follow-up investments that were eligible for investment at the time
of initial investment but that subsequently may not be
characterized as an investment in an early stage business.
(2) The fund board may limit overhead rates for recipients of
awards to reflect actual overhead, administrative fees, and
management fees, to an amount as determined by the fund board.
Start-up costs may be reimbursed as determined by the fund board.
Sec.
88q. (1) The fund may create and operate a centers center
of
energy excellence innovation
program to promote the development,
acceleration,
and sustainability of energy excellence competitive
edge technology sectors in this state. The fund may enter into
agreements with 1 or more qualified entities for the designation
and
operation of a center of energy excellence innovation as
provided in subsection (5). Prior to entering into an agreement
under this section, 1 or more qualified entities may apply to the
fund for an agreement for designation and operation of a center of
energy
excellence innovation. The application shall be in a form
determined by the fund and shall include information the fund
determines necessary and appropriate.
(2)
The fund board shall not expend more than $45,000,000.00
through
fiscal year 2008-2009 and not more than $30,000,000.00 for
fiscal
year 2009-2010 through fiscal year 2010-2011 of the money
appropriated
for programs authorized under this chapter from the
21st
century jobs trust fund created in the Michigan trust fund
act,
2000 PA 489, MCL 12.251 to 12.260, for the centers of energy
excellence
program. Grants, loans, or other economic assistance
given
for the centers of energy excellence innovation program shall
only
may be awarded to for-profit companies, nonprofit companies,
universities, and national laboratories for all of the following
purposes:
(a) Providing up to a 1-for-1 match for federal, collaborative
partners, or third party funding of up to 50% of the total project
costs.
(b) Supplementing in-kind contributions provided by a person
or entity other than this state.
(c)
Accelerating the commercialization of an innovative energy
technology
or process that will be ready to market within 3 5 years
of the effective date of the agreement.
(d) Activities of the center, including, but not limited to,
workforce development and technology demonstration.
(3)
All of the funds allocated to the centers for energy
excellence
innovation program shall be used to match federal,
collaborative partners, or third party funding. The fund board may
authorize investment terms in qualified entities as part of any
agreement
as provided in subsection (5). Not more than 15% of any
An amount of the grant, loan, or other economic assistance awarded,
as determined by the fund board, can be used for administrative
costs
or overhead by the grantee awardee
or any subcontractor hired
to
implement any portion of the centers for energy excellence
innovation agreement. Grants, loans, or other economic assistance
authorized by this section shall be disbursed pursuant to a
timeline and progress disbursement schedule included as part of an
agreement under this section.
(4) The fund board shall establish a standard process to
evaluate applications for an agreement under this section and shall
appoint
a committee of members of the fund board to assist in the
review of applications. The fund or the fund board shall not
appoint or designate any person paid or unpaid to a committee to
review applications if that person has a conflict of interest with
any potential applicants as determined by the office of the chief
compliance officer established in section 88i. When determining
whether to enter into an agreement under this section, the fund
board shall consider all of the following:
(a) The potential that in the absence of an agreement the
development,
acceleration, and sustainability of energy excellence
competitive edge technology sectors addressed by the proposed
center
of energy excellence innovation
will occur in a location
other than this state.
(b)
The extent to which the proposed center of energy
excellence
innovation will promote the development of energy
excellence
competitive edge technology sectors in this state.
(c)
The extent to which the proposed center of energy
excellence
innovation will promote economic development or job
creation in this state.
(d)
The extent to which the proposed center of energy
excellence
innovation could attract private investment or encourage
commercialization
in energy excellence competitive
edge technology
sectors in this state.
(e)
The extent to which the proposed center of energy
excellence
innovation may leverage skills or resources in which
this state possesses a competitive advantage, including, but not
limited to, skills of workers, intellectual property, and natural
resources.
(f)
The extent to which the proposed center of energy
excellence
innovation may encourage collaboration on
commercialization and technology transfer among qualified entities
in this state.
(g)
The extent to which the proposed center of energy
excellence
innovation may attract additional federal funding to
this state or persons or entities within this state.
(h)
The financial viability of the proposed center of energy
excellence
innovation and the proposed business plan for the center
of
energy excellence innovation, including, but not limited to,
commitments of financial and other support for the proposed center
and the potential availability of federal funding for the proposed
center.
(i) The financial resources available to the fund board for
operation
of the centers of energy excellence innovation program
under this section.
(j) Any recommendations from the centers manager selected
under subsection (6).
(5) If the fund board enters into an agreement with 1 or more
qualified
entities for the operation of a center of energy
excellence
innovation, the agreement shall include participation by
at least 1 qualified business and at least 1 institution of higher
education or a national laboratory. An agreement shall include, but
is not limited to, all of the following:
(a) The roles and responsibilities of the fund and the
qualified entities participating in the agreement.
(b)
A governance structure for the center of energy excellence
innovation. The agreement may provide for representation of the
fund in the governance of the center.
(c) The responsibilities of the fund and the qualified
entities participating in the agreement, including, but not limited
to, financial resources, technology, real property, personal
property, or other resources contributed by the parties to the
agreement.
(d) A commitment by the qualified entities participating in
the agreement to collaborate on commercialization and technology
transfer
opportunities in energy excellence competitive edge
technology sectors in this state.
(e) A commitment by qualified entities that are institutions
of higher education to provide incentives for faculty who
participate in technology transfer and commercialization activities
in
energy excellence competitive
edge technology sectors and
expansion
of business formation efforts related to energy
excellence
competitive edge technology sectors to increase the
number of institution of higher education related start-up
companies.
(f) A commitment to locate and retain commercialization
opportunities
resulting from the agreement or center of energy
excellence
innovation within this state.
(g)
A business plan for the center of energy excellence
innovation that identifies clear and measurable objectives,
timelines, and deliverables for the center.
(h) The duration of the agreement and a mechanism for the
dissolution
of the center of energy excellence innovation and the
disposition of any assets. The fund board may revoke an agreement
for
the designation and operation of a center of energy excellence
innovation if a qualified entity that is a party to the agreement
does not comply with the agreement.
(i) Provision for repayment of grants, loans, or other
economic assistance from the fund in the event a qualified entity
fails to comply with the agreement.
(6) The fund board may select a person or entity as a centers
manager to assist the fund in the administration of the centers of
energy
excellence innovation program authorized by this section.
Costs
associated with the administration of the centers of energy
excellence
innovation program are subject to section 88b(5). The
centers manager shall do all of the following as determined by the
fund board:
(a) Provide administrative services related to the centers of
energy
excellence innovation program.
(b) Act as contract manager on behalf of the fund for any
agreement
establishing a center of energy excellence innovation
under this section.
(c) Recommend to the fund board a plan for managing the
centers
of energy excellence innovation
program and implement any
plan authorized by the fund board.
(d)
Assist centers of energy excellence innovation in
developing
a supply chain for energy excellence competitive edge
technology sectors.
(e) Evaluate and report to the fund board on the centers of
energy
excellence innovation program and progress made toward
commercialization
of technology in energy excellence competitive
edge technology sectors in this state.
(f) Review applications submitted under subsection (1) and
make recommendations to the fund board on the applications for
approval of applications.
(g)
Perform other functions related to the centers for energy
excellence
innovation program authorized by this section as deemed
necessary and appropriate by the fund board.
(7) As used in this section:
(a) "Centers manager" means a centers manager selected under
subsection (6).
(b)
"Energy excellence sectors" means new and developing
industry
sectors in the energy field in this state where the fund
has
determined the state has a competitive advantage and there are
barriers
to the commercialization of technology within the new and
developing
industry sector.
(c)
"Energy field" means alternative energy technology, energy
efficiency
technology, technologies that contribute to energy
security
and independence, other advanced energy technologies, or
water
technology related to the development of energy excellence
sectors.
(b) "Competitive edge technology sectors" means sectors
involving competitive edge technology.
(c) (d)
"Qualified entity" means
a qualified business, an
institution of higher education, a Michigan nonprofit corporation,
a national laboratory, or a political subdivision of this state.