HOUSE BILL No. 6501 November 7, 2002, Introduced by Rep. Richardville and referred to the Committee on Tax Policy. A bill to amend 1975 PA 228, entitled "Single business tax act," by amending section 38g (MCL 208.38g), as added by 2000 PA 143. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 38g. (1) Subject to the criteria under this section, an 2 eligible taxpayer may claim a credit against the tax imposed by 3 this act as determined under subsections(19)(21) to(24)4 (26); and subject to the criteria under this section, a qualified 5 taxpayer that has a preapproval letter issued after December 31, 6 1999 and before January 1,20032008, provided that the project 7 is completed not more than 5 years after the preapproval letter 8 for the project is issued, or an assignee under subsection(16)9 (18) or(17)(19) may claim a credit that has been approved 10 under subsection (2) or (3) against the tax imposed by this act 11 equal to either of the following: 06784'02 * RJA 2 1 (a) If the total of all credits for a project is 2 $1,000,000.00 or less, 10% of the cost of the qualified 3 taxpayer's eligible investment paid or accrued by the qualified 4 taxpayer on an eligible property provided that the project does 5 not exceed the amount stated in the preapproval letter. If eli- 6 gible investment exceeds the amount of eligible investment in the 7 preapproval letter for that project, the total of all credits for 8 the project shall not exceed the total of all credits on the cer- 9 tificate of completion. 10 (b) If the total of all credits for a project is more than 11 $1,000,000.00 but $30,000,000.00 or less and, except as provided 12 in subsection(4)(b)(5)(B), the project is located in a quali- 13 fied local governmental unit, a percentage as determined by the 14 Michigan economic growth authority not to exceed 10% of the cost 15 of the qualified taxpayer's eligible investment as determined 16 under subsection(7)(9) paid or accrued by the qualified tax- 17 payer on an eligible property. If eligible investment exceeds 18 the amount of eligible investment in the preapproval letter for 19 that project, the total of all credits for the project shall not 20 exceed the total of all credits on the certificate of 21 completion. 22 (2) If the cost of a project will be for $10,000,000.00 or 23 less, a QUALIFIED taxpayer shall apply to thestate treasurer24 DEPARTMENT for approval of the project under this subsection. 25The state treasurer shall approve or deny theTHE STATE TREA- 26 SURER OR A DESIGNEE OF THE STATE TREASURER IS AUTHORIZED TO 27 APPROVE AN APPLICATION OR PROJECT UNDER THIS SUBSECTION. ONLY 06784'02 * 3 1 THE STATE TREASURER IS AUTHORIZED TO DENY AN APPLICATION OR 2 PROJECT UNDER THIS SUBSECTION. A project SHALL BE APPROVED OR 3 DENIED not more than 45 days after receipt of the application. 4 If the state treasurer OR THE STATE TREASURER'S DESIGNEE does not 5 approve or deny an application within 45 days afterhe or she6receivesthe application IS RECEIVED BY THE DEPARTMENT, the 7 application is considered approved as written. The total of all 8 credits for all projects approved under this subsection shall not 9 exceed $30,000,000.00 in any calendar year. Thestate treasurer10shall use thecriteria in subsection(5)(7) SHALL BE USED 11 when approving projects under this subsection. When approving 12 projects under this subsection,the state treasurer shall give13 priority SHALL BE GIVEN to projects on a facility. The total of 14 all credits for an approved project under this subsection shall 15 not exceed $1,000,000.00. A taxpayer may apply under this sub- 16 section instead of subsection (3) for approval of a project that 17 will be for more than $10,000,000.00 but the total of all credits 18 for that project shall not exceed $1,000,000.00. If the state 19 treasurer OR A DESIGNEE OF THE STATE TREASURER approves a project 20 under this subsection, the state treasurer OR A DESIGNEE OF THE 21 STATE TREASURER shall issue a preapproval letter that states that 22 the taxpayer is a qualified taxpayer; the maximum total eligible 23 investment for the project on which credits may be claimed and 24 the maximum total of all credits for the project when the project 25 is completed and a certificate of completion is issued; and the 26 project number assigned by thestate treasurerDEPARTMENT. If 27 a project is denied under this subsection, a taxpayer is not 06784'02 * 4 1 prohibited from subsequently applying under this subsection or 2 subsection (3) for the same project or for another project. 3 (3) If the cost of a project will be for more than 4 $10,000,000.00 and, except as provided in subsection(4)(b)5 (5)(B), the project is located in a qualified local governmental 6 unit, a QUALIFIED taxpayer shall apply to the Michigan economic 7 growth authority for approval of the project. The Michigan eco- 8 nomic growth authority shall approve or deny the project not more 9 than 65 days after receipt of the application. A project under 10 this subsection shall not be approved without the concurrence of 11 the state treasurer. If the Michigan economic growth authority 12 does not approve or deny the application within 65 days after it 13 receives the application, the Michigan economic growth authority 14 shall send the application to the state treasurer. The state 15 treasurer shall approve or deny the application within 5 days 16 after receipt of the application. If the state treasurer does 17 not deny the application within the 5 days after receipt of the 18 application, the application is considered approved. The 19 Michigan economic growth authority shall approve a limited number 20 of projects under this subsection during each calendar year as 21 provided in subsection(4)(5). The Michigan economic growth 22 authority shall use the criteria in subsection(5)(7) when 23 approving projects under this subsection, when determining the 24 total amount of eligible investment, and when determining the 25 percentage of eligible investment for the project to be used to 26 calculate a credit. The total of all credits for an approved 27 project under this subsection shall not exceed the amount 06784'02 * 5 1 designated in the preapproval letter for that project. If the 2 Michigan economic growth authority approves a project under this 3 subsection, the Michigan economic growth authority shall issue a 4 preapproval letter that states that the taxpayer is a qualified 5 taxpayer; the percentage of eligible investment for the project 6 determined by the Michigan economic growth authority for purposes 7 of subsection (1)(b); the maximum total eligible investment for 8 the project on which credits may be claimed and the maximum total 9 of all credits for the project when the project is completed and 10 a certificate of completion is issued; and the project number 11 assigned by the Michigan economic growth authority. The Michigan 12 economic growth authority shall send a copy of the preapproval 13 letter to the department. If a project is denied under this sub- 14 section, a taxpayer is not prohibited from subsequently applying 15 under this subsection or subsection (2) for the same project or 16 for another project. 17 (4) IF THE PROJECT IS ON PROPERTY THAT IS FUNCTIONALLY OBSO- 18 LETE, THE TAXPAYER SHALL INCLUDE, WITH THE APPLICATION, AN AFFI- 19 DAVIT SIGNED BY A LEVEL 3 OR LEVEL 4 ASSESSOR, THAT STATES THAT 20 IT IS THE ASSESSOR'S EXPERT OPINION THAT THE PROPERTY IS FUNC- 21 TIONALLY OBSOLETE AND THE UNDERLYING BASIS FOR THAT OPINION. 22 (5)(4) TheEXCEPT AS PROVIDED IN SUBSECTION (6), THE 23 Michigan economic growth authority may approve not more than 15 24 projects each calendar year under subsection (3), and the follow- 25 ing limitations apply: 06784'02 * 6 1 (a) Of the 15 projects allowed under this subsection, the 2 total of all credits for each project may be more than 3 $10,000,000.00 but $30,000,000.00 or less for up to 3 projects. 4 (b) Of the 15 projects allowed under this subsection, up to 5 3 projects may be approved for projects that are not in a quali- 6 fied local governmental unit if the property is a facility for 7 which eligible activities are identified in a brownfield plan. 8 For purposes of this subdivision, a facility includes a building 9 or complex of buildings that was used by a state or federal 10 agency and that is no longer being used for the purpose for which 11 it was used by the state or federal agency. 12 (c) Of the 3 projects allowed under subdivision (a), 1 may 13 be a project that also qualifies under subdivision (b). 14 (6) IF THE MICHIGAN ECONOMIC GROWTH AUTHORITY APPROVES FEWER 15 THAN 15 PROJECTS IN A CALENDAR YEAR, THE MICHIGAN ECONOMIC GROWTH 16 AUTHORITY MAY CARRY FORWARD FOR 1 YEAR ONLY THE DIFFERENCE 17 BETWEEN 15 AND THE NUMBER OF NEW AGREEMENTS EXECUTED IN THE IMME- 18 DIATELY PRECEDING CALENDAR YEAR. EACH YEAR THE MICHIGAN ECONOMIC 19 GROWTH AUTHORITY MAY APPROVE THE 15 PROJECTS FOR THAT YEAR PLUS 20 THE NUMBER OF PROJECTS CARRIED FORWARD FROM THE IMMEDIATELY PRE- 21 CEDING YEAR. THE CARRIED FORWARD PROJECTS SHALL NOT BE APPROVED 22 FOR MORE THAN $10,000,000.00. 23 (7)(5)The Michigan economic growth authority shall 24 review all applications for projects under subsection (3) and, if 25 an application is approved, shall determine the maximum total of 26 all credits for that project. Before approving a project for 27 which the total of all credits will be more than $10,000,000.00 06784'02 * 7 1 but $30,000,000.00 or less only, the Michigan economic growth 2 authority shall determine that the project would not occur in 3 this state without the tax credit offered under subsection (3), 4 except that the Michigan economic growth authority may approve 1 5 project the construction of which began after January 1, 2000 and 6 before January 1, 2001 without determining that the eligible 7 investment would not occur in this state without the tax credit 8 offered under this section. The Michigan economic growth author- 9 ity shall consider the following criteria to the extent reason- 10 ably applicable to the type of project proposed when approving a 11 project under subsection (3) and the state treasurer OR A DESIG- 12 NEE OF THE STATE TREASURER shall consider the following criteria 13 to the extent reasonably applicable to the type of project pro- 14 posed when approving a project under subsection (2) OR WHEN CON- 15 SIDERING AN AMENDMENT TO A PROJECT UNDER SUBSECTION (32): 16 (a) The overall benefit to the public. 17 (b) The extent of reuse of vacant buildings and redevelop- 18 ment of blighted property. 19 (c) Creation of jobs. 20 (d) Whether the eligible property is in an area of high 21 unemployment. 22 (e) The level and extent of contamination alleviated by the 23 qualified taxpayer's eligibleinvestmentACTIVITIES to the 24 extent known to the qualified taxpayer. 25 (f) The level of private sector contribution. 06784'02 * 8 1 (g) The cost gap that exists between the site and a similar 2 greenfield site as determined by the Michigan economic growth 3 authority. 4 (h) If the qualified taxpayer is moving from another loca- 5 tion in this state, whether the move will create a brownfield. 6 (i) Whether the financial statements of the qualified tax- 7 payer indicate that it is financially sound and that the project 8 is economically sound. 9 (j) Any other criteria that the Michigan economic growth 10 authority or the state treasurer, as applicable, considers appro- 11 priate for the determination of eligibility under subsection (2) 12 or (3). 13 (8)(6)A qualified taxpayer may apply for projects under 14 subsection (2) or (3) for eligible investment on more than 1 eli- 15 gible property in a tax year. Each project approved and each 16 project for which a certificate of completion is issued under 17 this section shall be for eligible investment on 1 eligible 18 property. 19 (9)(7)When a project under subsection (2) or (3) is com- 20 pleted, the taxpayer shall submit documentation that the project 21 is completed, an accounting of the cost of the project,andthe 22 eligible investment of each taxpayer if there is more than 1 tax- 23 payer eligible for a credit for the project, AND, IF THE TAXPAYER 24 IS NOT THE OWNER OR LESSEE OF THE ELIGIBLE PROPERTY ON WHICH THE 25 ELIGIBLE INVESTMENT WAS MADE AT THE TIME THE PROJECT IS COM- 26 PLETED, THAT THE TAXPAYER WAS THE OWNER OR LESSEE OF THAT 27 ELIGIBLE PROPERTY WHEN ALL ELIGIBLE INVESTMENT OF THE TAXPAYER 06784'02 * 9 1 WAS MADE. The state treasurer OR A DESIGNEE OF THE STATE 2 TREASURER, for projects approved under subsection (2), or the 3 Michigan economic growth authority, for projects approved under 4 subsection (3), shall verify that the project is completed. For 5 projects approved under subsection (3), the Michigan economic 6 growth authority shall conduct an on-site inspection as part of 7 the verification process. When the completion of the project is 8 verified, a certificate of completion shall be issued to each 9 qualified taxpayer that has made eligible investment on that eli- 10 gible property. The certificate of completion shall state the 11 total amount of all credits for the project and that total shall 12 not exceed the maximum total of all credits listed in the preap- 13 proval letter for the project under subsection (2) or (3) as 14 applicable and shall state all of the following: 15 (a) That the taxpayer is a qualified taxpayer. 16 (b) The total cost of the project and the eligible invest- 17 ment of each qualified taxpayer. 18 (c) Each qualified taxpayer's credit amount. 19 (d) The qualified taxpayer's federal employer identification 20 number or the Michigan treasury number assigned to the taxpayer. 21 (e) The project number. 22 (f) For a project approved under subsection (3) for which 23 the total of all credits is more than $10,000,000.00 but 24 $30,000,000.00 or less, the total of all credits and the schedule 25 on which the annual credit amount shall be claimed by the quali- 26 fied taxpayer. 06784'02 * 10 1 (10)(8)Except as otherwise provided in this section, 2 qualified taxpayers shall claim credits under subsections (2) and 3 (3) in the tax year in which the certificate of completion is 4 issued. For a project approved under subsection (3) for which 5 the total of all credits is more than $10,000,000.00 but 6 $30,000,000.00 or less, the qualified taxpayer shall claim 10% of 7 its approved credit each year for 10 years. 8 (11)(9)The cost of eligible investment for leased 9 machinery, equipment, or fixtures is the cost of that property 10 had the property been purchased minus the lessor's estimate, made 11 at the time the lease is entered into, of the market value the 12 property will have at the end of the lease. A credit for prop- 13 erty described in this subsection is allowed only if the cost of 14 that property had the property been purchased and the lessor's 15 estimate of the market value at the end of the lease are provided 16 to thestate treasurerDEPARTMENT or the Michigan economic 17 growth authority, as applicable. 18 (12)(10)For credits under subsections (2) and (3), cred- 19 its claimed by a lessee of eligible property are subject to the 20 total of all credits limitation under this section. 21 (13)(11)Each qualified taxpayer and assignee under sub- 22 section(16)(18) or(17)(19) that claims a credit under 23 subsection (1)(a) or (b) shall attach a copy of the certificate 24 of completion and, if the credit was assigned, a copy of the 25 assignment form provided for under this section to the annual 26 return filed under this act on which the credit under subsection 27 (2) or (3) is claimed. 06784'02 * 11 1 (14)(12)Except as otherwise provided in this subsection 2 or subsection(14)(16),(16)(18), or(17)(19), a credit 3 under subsection (2) or (3) shall be claimed in the tax year in 4 which the certificate of completion is issued to the qualified 5 taxpayer. For a project described in subsection(7)(f)(9)(F) 6 for which a schedule for claiming annual credit amounts is desig- 7 nated on the certificate of completion by the Michigan economic 8 growth authority, the annual credit amount shall be claimed in 9 the tax year specified on the certificate of completion. 10 (15)(13)The credits approved under this section shall be 11 calculated after application of all other credits allowed under 12 this act. The credits under subsections (2) and (3) shall be 13 calculated before the calculation of credits under subsections 14(19)(21) to(24)(26) and before the credits under sections 15 37c and 37d. 16 (16)(14)If the credit allowed under subsection (2) or 17 (3) for the tax year and any unused carryforward of the credit 18 allowed under subsection (2) or (3) exceed the qualified 19 taxpayer's or assignee's tax liability for the tax year, that 20 portion that exceeds the tax liability for the tax year shall not 21 be refunded but may be carried forward to offset tax liability in 22 subsequent tax years for 10 years or until used up, whichever 23 occurs first. Except as otherwise provided in this subsection, 24 the maximum time allowed under the carryforward provisions under 25 this subsection begins with the tax year in which the certificate 26 of completion is issued to the qualified taxpayer. If the 27 qualified taxpayer assigns all or any portion of its credit 06784'02 * 12 1 approved under subsection (2) or (3), the maximum time allowed 2 under the carryforward provisions for an assignee begins to run 3 with the tax year in which the assignment is made and the 4 assignee first claims a credit, which shall be the same tax 5 year. The maximum time allowed under the carryforward provisions 6 for an annual credit amount for a credit allowed under subsection 7 (3) begins to run in the tax year for which the annual credit 8 amount is designated on the certificate of completion issued 9 under this section. 10 (17)(15)If a project or credit under subsection (2) or 11 (3) is for the addition of personal property, if the cost of that 12 personal property is used to calculate a credit under subsection 13 (2) or (3), and if the personal property is sold or disposed of 14 or transferred from eligible property to any other location, the 15 qualified taxpayer that sold, disposed of, or transferred the 16 personal property shall add the same percentage as determined 17 pursuant to subsection (1) of the federal basis of the personal 18 property used for determining gain or loss as of the date of the 19 sale, disposition, or transfer to the qualified taxpayer's tax 20 liability after application of all credits under this act for the 21 tax year in which the sale, disposition, or transfer occurs. If 22 a qualified taxpayer has an unused carryforward of a credit under 23 subsection (2) or (3), the amount otherwise added under this sub- 24 section to the qualified taxpayer's tax liability may instead be 25 used to reduce the qualified taxpayer's carryforward under sub- 26 section(14)(16). 06784'02 * 13 1 (18)(16)For credits under subsections (2) and (3) and 2 except as otherwise provided in this subsection, if a qualified 3 taxpayer pays or accrues eligible investment on or to an eligible 4 property that is leased for a minimum term of 10 years OR SOLD to 5 another taxpayer for use in a business activity, the qualified 6 taxpayer may assign all or a portion of the credit based on that 7 eligible investment to the lessee OR PURCHASER OF THAT ELIGIBLE 8 PROPERTY. A CREDIT ASSIGNMENT UNDER THIS SUBSECTION SHALL ONLY 9 BE MADE TO A TAXPAYER THAT WHEN THE ASSIGNMENT IS COMPLETE WILL 10 BE A QUALIFIED TAXPAYER.AALL creditassignmentASSIGNMENTS 11 under this subsectionisARE irrevocable and shall be made in 12 the tax year in which the certificate of completion is issued, 13 unless the assignee is AN unknown LESSEE. If a qualified tax- 14 payer wishes to assign all or a portion of its credit to a lessee 15 but the lessee is unknown in the tax year in which the certifi- 16 cate of completion is issued, the qualified taxpayer may delay 17 claiming and assigning the credit until the first tax year in 18 which the lessee is known. A qualified taxpayer may claim a por- 19 tion of a credit and assign the remaining credit amount. Except 20 as otherwise provided in this subsection, if the qualified tax- 21 payer both claims and assigns portions of the credit, the quali- 22 fied taxpayer shall claim the portion it claims in the tax year 23 in which the certificate of completion is issued. If a qualified 24 taxpayer assigns all or a portion of the credit and the eligible 25 property is leased to more than 1 taxpayer, the qualified tax- 26 payer shallprorateDETERMINE the AMOUNT OF credit ASSIGNED to 27 each lessee. A lessee shall not subsequently assign a credit or 06784'02 * 14 1 any portion of a credit assigned under this subsection. A 2 PURCHASER MAY SUBSEQUENTLY ASSIGN A CREDIT OR ANY PORTION OF A 3 CREDIT ASSIGNED TO THE PURCHASER UNDER THIS SUBSECTION TO A 4 LESSEE OF THE ELIGIBLE PROPERTY. The credit assignment under this 5 subsection shall be made on a form prescribed by the department. 6 The qualified taxpayer shall send a copy of the completed assign- 7 ment form to the department in the tax year in which the assign- 8 ment is made. The assignee shall attach a copy of the completed 9 assignment form to its annual return required to be filed under 10 this act, for the tax year in which the assignment is made and 11 the assignee first claims a credit, which shall be the same tax 12 year. In addition to all other procedures under this subsection, 13 the following apply if the total of all credits for a project is 14 more than $10,000,000.00 but $30,000,000.00 or less: 15 (a) The credit shall be assigned based on the schedule con- 16 tained in the certificate of completion. 17 (b) If the qualified taxpayer assigns all or a portion of 18 the credit amount, the qualified taxpayer shall assign the annual 19 credit amount for each tax year separately. 20 (c) More than 1 annual credit amount may be assigned to any 21 1 assignee and the qualified taxpayer may assign all or a portion 22 of each annual credit amount to any assignee. 23 (d) The qualified taxpayer shall not assign more than the 24 annual credit amount for each tax year. 25 (19)(17)If a qualified taxpayer is a partnership, 26 limited liability company, or subchapter S corporation, the 27 qualified taxpayer may assign all or a portion of a credit 06784'02 * 15 1 allowed under subsection (2) or (3) to its partners, members, or 2 shareholders, based on their proportionate share of ownership of 3 the partnership, limited liability company, or subchapter S cor- 4 poration OR BASED ON AN ALTERNATIVE METHOD APPROVED BY THE 5 DEPARTMENT. A credit assignment under this subsection is irrevo- 6 cable and shall be made in the tax year in which a certificate of 7 completion is issued. A qualified taxpayer may claim a portion 8 of a credit and assign the remaining credit amount. If the qual- 9 ified taxpayer both claims and assigns portions of the credit, 10 the qualified taxpayer shall claim the portion it claims in the 11 tax year in which a certificate of completion is issued. A part- 12 ner, member, or shareholder that is an assignee shall not subse- 13 quently assign a credit or any portion of a credit assigned under 14 this subsection. The credit assignment under this subsection 15 shall be made on a form prescribed by the department. The quali- 16 fied taxpayer shall send a copy of the completed assignment form 17 to the department in the tax year in which the assignment is 18 made. A partner, member, or shareholder who is an assignee shall 19 attach a copy of the completed assignment form to its annual 20 return required under this act, for the tax year in which the 21 assignment is made and the assignee first claims a credit, which 22 shall be the same tax year. In addition to all other procedures 23 under this subsection, the following apply if the total of all 24 credits for a project is more than $10,000,000.00 but 25 $30,000,000.00 or less: 26 (a) The credit shall be assigned based on the schedule 27 contained in the certificate of completion. 06784'02 * 16 1 (b) If the qualified taxpayer assigns all or a portion of 2 the credit amount, the qualified taxpayer shall assign the annual 3 credit amount for each tax year separately. 4 (c) More than 1 annual credit amount may be assigned to any 5 1 assignee and the qualified taxpayer may assign all or a portion 6 of each annual credit amount to any assignee. 7 (d) The qualified taxpayer shall not assign more than the 8 annual credit amount for each tax year. 9 (20)(18)A qualified taxpayer or assignee under subsec- 10 tion(16)(18) or(17)(19) shall not claim a credit under 11 subsection (1)(a) or (b) based on eligible investment on which a 12 credit claimed under section 38d was based. 13 (21)(19)In addition to the other credits allowed under 14 this section and sections 37c and 37d, for tax years that begin 15 after December 31, 1999 and for a period of time not to exceed 20 16 years as determined by the Michigan economic growth authority, an 17 eligible taxpayer may credit against the tax imposed by section 18 31 the amount certified each year by the Michigan economic growth 19 authority that is 1 of the following: 20 (a) For an eligible business under section 8(5)(a) of the 21 Michigan economic growth authority act, 1995 PA 24, MCL 207.808, 22 an amount that is not more than 50% of 1 or both of the following 23 as determined by the Michigan economic growth authority: 24 (i) An amount determined under the Michigan economic growth 25 authority act, 1995 PA 24, MCL 207.801 to 207.810, that does not 26 exceed the payroll of the eligible taxpayer attributable to 06784'02 * 17 1 employees who perform retained jobs multiplied by the tax rate 2 for the tax year. 3 (ii) The tax liability attributable to the eligible 4 taxpayer's business activity multiplied by a fraction the numera- 5 tor of which is the ratio of the value of new capital investment 6 to all of the taxpayer's property located in this state plus the 7 ratio of the taxpayer's payroll attributable to retained jobs to 8 all of the taxpayer's payroll in this state and the denominator 9 of which is 2. 10 (b) For an eligible business under section 8(5)(b) of the 11 Michigan economic growth authority act, 1995 PA 24, MCL 207.808, 12 an amount that is not more than 1 or both of the following as 13 determined by the Michigan economic growth authority: 14 (i) An amount determined under the Michigan economic growth 15 authority act, 1995 PA 24, MCL 207.801 to 207.810, that does not 16 exceed the payroll of the eligible taxpayer attributable to 17 employees who perform retained jobs multiplied by the tax rate 18 for the tax year. 19 (ii) The tax liability attributable to eligible taxpayer's 20 business multiplied by a fraction the numerator of which is the 21 ratio of the value of capital investment to all of the taxpayer's 22 property located in this state plus the ratio of the taxpayer's 23 payroll attributable to retained jobs to all of the taxpayer's 24 payroll in this state and the denominator of which is 2. 25 (22)(20)An eligible taxpayer shall not claim a credit 26 under subsection(19)(21) unless the Michigan economic growth 27 authority has issued a certificate under section 9 of the 06784'02 * 18 1 Michigan economic growth authority act, 1995 PA 24, MCL 207.809, 2 to the taxpayer. The eligible taxpayer shall attach the certifi- 3 cate to the return filed under this act on which a credit under 4 subsection(19)(21) is claimed. 5 (23)(21)An affiliated group as defined in this act, a 6 controlled group of corporations as defined in section 1563 of 7 the internal revenue code and further described in 26 8 C.F.R. 1.414(b)-1 and 1.414(c)-1 to 1.414(c)-5, or an entity 9 under common control as defined by the internal revenue code 10 shall claim only 1 credit under subsection(19)(21) for each 11 tax year based on each written agreement whether or not a com- 12 bined or consolidated return is filed. 13 (24)(22)A credit shall not be claimed by a taxpayer 14 under subsection(19)(21) if the eligible taxpayer's initial 15 certification under section 9 of the Michigan economic growth 16 authority act, 1995 PA 24, MCL 207.809, is issued after December 17 31, 2003. 18 (25)(23)If the credit allowed under subsection 19(19)(a)(ii)(21)(A)(ii) or(19)(b)(ii)(B)(ii) for the tax 20 year and any unused carryforward of the credit allowed by subsec- 21 tion(19)(a)(ii)(21)(A)(ii) or (b)(ii) exceed the taxpayer's 22 tax liability for the tax year, that portion that exceeds the tax 23 liability for the tax year shall not be refunded but may be car- 24 ried forward to offset tax liability in subsequent tax years for 25 10 years or until used up, whichever occurs first. 26 (26)(24)If the credit allowed under subsection 27(19)(a)(i)(21)(A)(i) or(19)(b)(i)(B)(i) exceeds the tax 06784'02 * 19 1 liability of the eligible taxpayer for the tax year, the excess 2 shall be refunded to the eligible taxpayer. 3 (27)(25)An eligible taxpayer that claims a credit under 4 subsection (1)(a) or (b) is not prohibited from claiming a credit 5 under subsection(19)(21). However, the eligible taxpayer 6 shall not claim a credit under both subsections (1)(a) or (b) and 7(19)(21) based on the same costs. 8 (28)(26)Eligible investment attributable or related to 9 the operation of a professional sports stadium, and eligible 10 investment that is associated or affiliated with the operation of 11 a professional sports stadium, including, but not limited to, the 12 operation of a parking lot or retail store, shall not be used as 13 a basis for a credit under subsection (2) or (3). Professional 14 sports stadium does not include a professional sports stadium 15 that will no longer be used by a professional sports team on and 16 after the date that an application related to that professional 17 sports stadium is filed under subsection (2) or (3). 18 (29)(27)Eligible investment attributable or related to 19 the operation of a casino, and eligible investment that is asso- 20 ciated or affiliated with the operation of a casino, including, 21 but not limited to, the operation of a parking lot, hotel, motel, 22 or retail store, shall not be used as a basis for a credit under 23 subsection (2) or (3). As used in this subsection, "casino" 24 means a casino regulated by this state pursuant to the Michigan 25 gaming control and revenue act, the Initiated Law of 1996, 26 MCL 432.201 to 432.226. 06784'02 * 20 1 (30)(28)Eligible investment attributable or related to 2 the construction of a new landfill or the expansion of an 3 existing landfill regulated under part 115 of the natural 4 resources and environmental protection act, 1994 PA 451, 5 MCL 324.11501 to 324.11550, shall not be used as a basis for a 6 credit under subsection (2) or (3). 7 (31)(29)The department annually shall prepare and submit 8 to the house of representatives and senate committees responsible 9 for tax policy and economic development issues a report on the 10 credits under subsection (2). The report shall include, but is 11 not limited to, all of the following: 12 (a) A listing of the projects under subsection (2) that were 13 approved in the calendar year. 14 (b) The total amount of eligible investment for projects 15 approved under subsection (2) in the calendar year. 16 (32) IF, AFTER A TAXPAYER'S PROJECT HAS BEEN APPROVED AND 17 THE TAXPAYER HAS RECEIVED A PREAPPROVAL LETTER BUT BEFORE THE 18 PROJECT IS COMPLETED, THE TAXPAYER DETERMINES THAT THE PROJECT 19 CANNOT BE COMPLETED AS PREAPPROVED, THE TAXPAYER MAY PETITION THE 20 DEPARTMENT FOR PROJECTS APPROVED UNDER SUBSECTION (2) OR THE 21 MICHIGAN ECONOMIC GROWTH AUTHORITY FOR PROJECTS APPROVED UNDER 22 SUBSECTION (3) TO AMEND THE PROJECT. THE TOTAL OF ELIGIBLE 23 INVESTMENT FOR THE PROJECT AS AMENDED SHALL NOT EXCEED THE AMOUNT 24 ALLOWED IN THE PREAPPROVAL LETTER FOR THAT PROJECT. 25 (33)(30)As used in this section: 26 (a) "Annual credit amount" means the maximum amount that a 27 qualified taxpayer is eligible to claim each tax year for a 06784'02 * 21 1 project for which the total of all credits is more than 2 $10,000,000.00 but $30,000,000.00 or less, which shall be 10% of 3 the qualified taxpayer's credit amount approved under subsection 4 (3). 5 (b) "Authority" means a brownfield redevelopment authority 6 created under the brownfield redevelopment financing act, 1996 7 PA 381, MCL 125.2651 to 125.2672. 8 (c) "Authorized business", "full-time job", "new capital 9 investment", "retained jobs", and "written agreement" mean those 10 terms as defined in the Michigan economic growth authority act, 11 1995 PA 24, MCL 207.801 to 207.810. 12 (d) "Blighted", "brownfield plan", "eligible activities", 13 "eligible property", "facility", "functionally obsolete", and 14 "response activity" mean those terms as defined in the brownfield 15 redevelopment financing act, 1996 PA 381, MCL 125.2651 to 16 125.2672. 17 (e) "Eligible investment" means demolition, construction, 18 restoration, alteration, renovation, or improvement of buildings 19 or site improvements on eligible property and the addition of 20 machinery, equipment, and fixtures to eligible property after the 21 date that eligible activities on that eligible property have 22 started pursuant to a brownfield plan under the brownfield rede- 23 velopment financing act, 1996 PA 381, MCL 125.2651 to 125.2672, 24 and after the date that the preapproval letter is issued, except 25 that the date that the preapproval letter is issued is not a lim- 26 itation for 1 project the construction of which began after 27 January 1, 2000 and before January 1, 2001 without the Michigan 06784'02 * 22 1 economic growth authority determining that the project would not 2 occur in this state without the tax credit offered under this 3 section as provided in subsection(5)(7), if the costs of the 4 eligible investment are not otherwise reimbursed to the taxpayer 5 or paid for on behalf of the taxpayer from any source other than 6 the taxpayer. The addition of leased machinery, equipment, or 7 fixtures to eligible property by a lessee of the machinery, 8 equipment, or fixtures is eligible investment if the lease of the 9 machinery, equipment, or fixtures has a minimum term of 10 years 10 or is for the expected useful life of the machinery, equipment, 11 or fixtures, and if the owner of the machinery, equipment, or 12 fixtures is not the qualified taxpayer with regard to that 13 machinery, equipment, or fixtures. 14 (f) "Eligible taxpayer" means an eligible business that 15 meets the criteria under section 8(5) of the Michigan economic 16 growth authority act, 1995 PA 24, MCL 207.808. 17 (g) "Michigan economic growth authority" means the Michigan 18 economic growth authority created in the Michigan economic growth 19 authority act, 1995 PA 24, MCL 207.801 to 207.810. 20 (h) "Payroll" and "tax rate" mean those terms as defined in 21 section 37c. 22 (i) "Personal property" means that term as defined in sec- 23 tion 8 of the general property tax act, 1893 PA 206, MCL 211.8, 24 except that personal property does not include either of the 25 following: 26 (i) Personal property described in section 8(h), (i), or (j) 27 of the general property tax act, 1893 PA 206, MCL 211.8. 06784'02 * 23 1 (ii) Buildings described in section 14(6) of the general 2 property tax act, 1893 PA 206, MCL 211.14. 3 (j) "Project" means the total of all eligible investment on 4 an eligible property or, for purposes of subsection(4)(b)5 (5)(B), all eligible investment on property not in a qualified 6 local governmental unit that is a facility. 7 (k) "Qualified local governmental unit" means that term as 8 defined in the obsolete property rehabilitation act. 9 (l) "Qualified taxpayer" means a taxpayer that meets both of 10 the following criteria: 11 (i) Owns or leases eligible property. 12 (ii) Certifies that, EXCEPT AS OTHERWISE PROVIDED IN THIS 13 SUBPARAGRAPH, the department of environmental quality has not 14 sued or issued a unilateral order to the taxpayer pursuant to 15 part 201 of the natural resources and environmental protection 16 act, 1994 PA 451, MCL 324.20101 to 324.20142, to compel response 17 activity on or to the eligible property, or expended any state 18 funds for response activity on or to the eligible property and 19 demanded reimbursement for those expenditures from the qualified 20 taxpayer. HOWEVER, IF THE TAXPAYER HAS COMPLETED ALL RESPONSE 21 ACTIVITY REQUIRED BY PART 201 OF THE NATURAL RESOURCES AND ENVI- 22 RONMENTAL PROTECTION ACT, 1994 PA 451, MCL 324.20101 TO 23 324.20142, IS IN COMPLIANCE WITH ANY DEED RESTRICTION OR ADMINIS- 24 TRATIVE OR JUDICIAL ORDER RELATED TO THE REQUIRED RESPONSE ACTIV- 25 ITY, AND HAS REIMBURSED THE STATE FOR ALL COSTS INCURRED BY THE 26 STATE RELATED TO THE REQUIRED RESPONSE ACTIVITY, THE TAXPAYER 27 MEETS THE CRITERIA UNDER THIS SUBPARAGRAPH. 06784'02 * 24 1 (m) "Tax liability attributable to authorized business 2 activity" means the tax liability imposed by this act after the 3 calculation of credits provided in sections 36, 37, and 39. 06784'02 * Final page. RJA