May 10, 2005, Introduced by Reps. Tobocman, Kolb, Bieda, Lipsey, Meisner, Mayes, Donigan, McDowell, Condino, Gleason, Alma Smith, Espinoza, Plakas, Hood, Anderson, Gillard, Phillips, Kathleen Law, Hopgood, Farrah, Clack, Sak, Whitmer, Brown, Adamini, Leland, Zelenko, Kehrl, Miller, Accavitti, Wojno, Hunter, Clemente, Gonzales, Byrum, Cushingberry, Lemmons, Jr., Virgil Smith, McConico, Waters and Lemmons, III and referred to the Committee on Commerce.
A bill to amend 1984 PA 270, entitled
"Michigan strategic fund act,"
by amending the title and sections 3, 4, and 13 (MCL 125.2003,
125.2004, and 125.2013), sections 4 and 13 as amended by 1987 PA
278, and by adding sections 94 and 95 and chapter 8A.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An act relating to the economic development of this state; to
create
the jobs for Michigan
strategic fund
and to prescribe its
powers and duties; to transfer and provide for the acquisition and
succession to the rights, properties, obligations, and duties of
the job development authority and the Michigan economic development
authority
to the jobs for Michigan
strategic fund;
to provide for
the expenditure of proceeds in certain funds to which the jobs for
Michigan strategic
fund succeeds in ownership; to provide for the
issuance of, and terms and conditions for, notes and bonds of the
jobs
for Michigan strategic
fund;
to authorize the issuance of
general obligation bonds of this state and to pledge the full faith
and credit of this state for the payment of principal and interest
on the bonds; to use bond proceeds to finance activities and
programs of the jobs for Michigan fund to diversify the economy of
this state, to encourage long-term economic growth and full
employment, and to create jobs; to pay for issuing the general
obligation bonds; to provide for other measures related to the
general obligation bonds; to exempt the property, income, and
operation of the fund and its bonds and notes, and the interest
thereon, from certain taxes; to provide for the creation of certain
centers
within and for the purposes of the jobs
for Michigan
strategic
fund; to provide for the creation and funding of
certain
accounts for certain purposes; to impose certain powers and duties
upon
certain officials, departments, and authorities of the
this
state;
to provide penalties; and to repeal
certain acts
and parts
of acts.
Sec. 3. This act shall be known and may be cited as the "jobs
for
Michigan strategic fund
act".
Sec. 4. As used in this act:
(a) "Board" means the board of directors of the jobs for
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)
"Fund" means the jobs
for Michigan strategic
fund
created under section 5, except where the context clearly requires
a different definition.
(d) "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.
(e) "Person" means an individual, sole proprietorship,
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.
(f) "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
thereof 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.
(g) "Private sector" means other than the fund, a state or
federal
source, or an agency thereof of a state or the federal
government.
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.
CHAPTER 8A
Sec. 88. The legislature finds and declares that the
activities and programs authorized under this chapter to diversify
the economy of this state, encourage long-term economic growth and
full employment, and create jobs are a public purpose and of
paramount concern in the interest of the health, safety, and
general welfare of the citizens of this state.
Sec. 88a. Notwithstanding section 23, this state shall borrow
a sum not to exceed $2,000,000,000.00 and issue the general
obligation bonds of this state, pledging the full faith and credit
of this state for the payment of principal and interest on those
bonds. Proceeds of the bonds shall finance the activities and
programs authorized under this chapter to diversify the economy of
this state, encourage long-term economic growth and full
employment, and create jobs.
Sec. 88b. (1) Bonds authorized under this chapter shall be
issued in 1 or more series, each series to be in a principal
amount, to be dated, to have the maturities that may be either
serial, term, or both, to bear interest at a rate or rates, to be
subject or not subject to prior redemption, and if subject to prior
redemption with or without call premiums, to be payable at a place
or places, to have or not have provisions for registration as to
principal only or as to both principal and interest, to be in a
form and to be executed in a manner as shall be determined by
resolution to be adopted by the state administrative board and
subject to covenants, directions, restrictions, or rights specified
by resolution to be adopted by the state administrative board as
necessary to ensure the marketability, insurability, or tax-exempt
status of the bonds. The state administrative board shall rotate
the services of legal counsel when issuing bonds.
(2) The state administrative board may refund bonds issued
under this chapter by the issuance of new bonds, whether or not the
bonds to be refunded have matured or are subject to prior
redemption. The state administrative board may issue bonds partly
to refund bonds issued under this chapter and partly for any other
purpose provided by this chapter. The principal amount of any
refunding bonds issued under this section shall not be counted
against the limitation on principal amount provided under section
88a.
(3) The state administrative board may authorize and approve
insurance contracts, agreements for lines of credit, letters of
credit, commitments to purchase bonds, and any other transactions
to provide security to assure timely payment or purchase of any
bond issued under this chapter. The state administrative board may
authorize and approve an interest rate exchange or swap, hedge, or
similar agreement in connection with the issuance of bonds under
this chapter, payable from the same source as the bonds.
(4) The state administrative board may authorize the state
treasurer, but only within limitations contained in the authorizing
resolution of the state administrative board, to do 1 or more of
the following:
(a) Sell and deliver and receive payment for the bonds.
(b) Deliver bonds partly to refund bonds and partly for other
authorized purposes.
(c) Select which outstanding bonds will be refunded, if any,
by the new issue of bonds.
(d) Buy issued bonds.
(e) Approve interest rates or methods for fixing interest
rates, including fixed or variable rates, prices, discounts,
maturities, principal amounts, purchase prices, purchase dates,
remarketing dates, denominations, dates of issuance, interest
payment dates, redemption rights at the option of this state or the
owner, the place and time of delivery and payment, and other
matters and procedures necessary to complete the authorized
transactions.
(f) Execute, deliver, and pay the cost of remarketing
agreements, insurance contracts, agreements for lines of credit,
letters of credit, commitments to purchase bonds or notes, and any
other transaction to provide security to assure timely payments or
purchase of any bond issued under this chapter.
(g) Determine the details of, execute, deliver, and pay the
cost of any interest rate exchange or swap, hedge, or similar
agreement.
(5) Bonds issued under this chapter are not subject to the
revised municipal finance act, 2001 PA 34, MCL 141.2101 to
141.2821. Bonds issued under this chapter are subject to the agency
financing reporting act, 2002 PA 470, MCL 129.171 to 129.177.
(6) Bonds issued under this chapter or any series of bonds
issued under this chapter may be sold at public or private sale or
may be issued and delivered to any person in which bond proceeds
may be invested or deposited under this chapter as determined by or
pursuant to a resolution of the state administrative board.
(7) Bonds issued under this chapter shall be issued in a
manner that provides that debt payments do not begin before October
1, 2007.
Sec. 88c. (1) Bonds issued under this chapter shall be fully
negotiable under the uniform commercial code, 1962 PA 174, MCL
440.1101 to 440.11102.
(2) Bonds and the interest on the bonds issued under this
chapter are exempt from all taxation by this state or any political
subdivision of this state.
Sec. 88d. Bonds issued under this chapter are securities in
which banks, savings and loan associations, state authorities,
investment companies, credit unions, and other persons carrying on
a banking business; all insurance companies, insurance
associations, and other persons carrying on an insurance business;
and all administrators, executors, guardians, trustees, and other
fiduciaries may properly and legally invest funds, including
capital, belonging to them or within their control.
Sec 88e. (1) The jobs for Michigan economic development and
diversification bond fund is created in the state treasury.
(2) The bond fund shall consist of all of the following:
(a) The proceeds of the sale of any series of the bonds
authorized under this chapter.
(b) Any premium and accrued interest received on the delivery
of the bonds.
(c) Any interest or earnings generated by the proceeds
described in subdivision (a).
(d) Any other funds required to be deposited in the bond fund
or a subaccount of the bond fund under this chapter.
(3) The department of treasury shall establish within the bond
fund a jobs for Michigan bond repayment subaccount. Money in the
repayment subaccount shall be used to repay principal or interest
on bonds issued under this chapter and any redemption premiums on
bonds issued under this chapter. The repayment subaccount shall
consist of all of the following, which shall be deposited by the
fund or the MEDC in the repayment subaccount:
(a) Royalties, return on investments, return of principal,
payments made, or other money received by or payable to the fund or
the MEDC under agreements related to grants, investments, or other
payments by the fund under this chapter.
(b) Royalties, return on investments, return of principal,
payments made, or other money received by or payable to the fund or
the MEDC under agreements related to grants, investments, or other
payments funded by appropriations from the state general fund or
tobacco settlement revenue under 1 or more of the following:
(i) Section 418 of 1999 PA 120, commonly known as the health
and aging research and development initiative or the Michigan life
sciences corridor initiative, or any successor program.
(ii) Section 410 of 2000 PA 292, commonly known as the health
and aging research and development initiative or the Michigan life
sciences corridor initiative, or any successor program.
(iii) Section 410 of 2001 PA 80, commonly known as the health
and aging research and development initiative or the Michigan life
sciences corridor initiative, or any successor program.
(iv) Section 410 of 2002 PA 517, commonly known as the Michigan
life sciences corridor initiative, or any successor program.
(v) Section 410 of 2003 PA 169, commonly known as the Michigan
life sciences and technology tri-corridor initiative, or any
successor program.
(vi) Section 510 of 2004 PA 354, commonly known as the Michigan
technology tri-corridor and life sciences initiative, or any
successor program.
(vii) Section 801 of 2005 PA 11, commonly known as the
technology tri-corridor and life sciences initiative, or any
successor program.
(viii) Section 381(1)(c) of 2003 PA 173, providing for payments
to the life sciences commercial development fund.
(4) In addition to the repayment subaccount created under
subsection (3), the department of treasury may establish other
restricted subaccounts within the bond fund as necessary to
administer the bond fund.
(5) Money in the bond fund shall be disbursed only for the
purposes for which the bonds issued under this chapter have been
authorized, including, but not limited to, the expense of issuing
the bonds, the proceeds of sale of any series of the bonds, any
premium and accrued interest received on the delivery of the bonds,
and any interest earned on the proceeds of the bonds.
Sec. 88f. (1) The state treasurer shall direct the investment
of the bond fund.
(2) Any remaining balance in the bond fund, the repayment
subaccount, or a subaccount of the bond fund at the close of a
fiscal year shall remain in the bond fund and shall not lapse or
revert to the general fund.
Sec. 88g. (1) After the issuance of the bonds authorized by
this chapter, there shall be expended from the repayment subaccount
of the bond fund created under section 88e a sufficient amount to
pay promptly, when due, the principal of and interest on all
outstanding bonds authorized by this chapter and the costs
incidental to the payment of the bonds.
(2) If the amount available in the repayment subaccount for a
fiscal year is not a sufficient amount under subsection (1), or a
sufficient expenditure under subsection (1) is not authorized, the
remaining amount necessary to pay promptly, when due, the principal
of and interest on all outstanding bonds authorized by this chapter
and the costs incidental to the payment of the bonds shall be
appropriated from the general fund.
(3) The governor shall include the appropriations provided for
in subsection (2), if necessary, in his or her annual executive
budget recommendations to the legislature.
Sec. 88h. (1) The proceeds of bonds issued under this chapter,
deposited into the bond fund, and appropriated as provided by law
shall be allocated by the fund for purposes authorized under
section 88i, committed by the fund for purposes of bond issuance,
and expended by the fund for activities or programs to encourage
the development of competitive edge technology in this state.
(2) The fund shall not allocate more than 20% of the total
proceeds of bonds authorized under this chapter in the calendar
year immediately following the adoption of the amendatory act that
added this chapter. After the calendar year immediately following
the adoption of the amendatory act that added this chapter, the
fund shall not allocate more than 10% of the total proceeds of
bonds authorized under this chapter in any calendar year. The
allocation limits established under this subsection are cumulative
and may carry forward to a future calendar year if the allocation
is not fully expended.
(3) Not more than 10% of the total proceeds of bonds
authorized under this chapter may be expended by the fund to
support basic research in competitive edge technologies.
(4) Not less than 20% and not more than 35% of the total
proceeds of bonds authorized under this chapter may be expended by
the fund to support life sciences technology.
(5) Not more than 15% of the total proceeds of bonds
authorized under this chapter may be expended by the fund for
qualified investments under section 88i(1)(e).
(6) For purposes of subsections (3) to (5), the proceeds of
bonds authorized under this chapter shall include bonds issued and
delivered under section 88b(6) to any person in which bond proceeds
may be invested or deposited under this chapter.
(7) Bond proceeds deposited into the bond fund may be used by
the department of treasury to pay for the cost of issuing bonds
under this chapter, including, but not limited to, costs incurred
under section 88b(3).
(8) Not more than 3% of the total amount of the bonds
authorized under this chapter shall be available for appropriation
to the fund to pay its costs and the costs of the MEDC directly
associated with the administration of this chapter. The 3%
limitation under this subsection does not apply to costs under
subsection (7).
Sec 88i. (1) Money in the bond fund that is available for
allocation by the fund under section 88h shall be allocated
annually by the board and expended as authorized by the board for
the following purposes:
(a) A program established by the fund to provide grants for
basic and applied research in competitive edge technologies at
institutions of higher education, Michigan nonprofit research
institutes, or qualified businesses, including, but not limited to,
1 or more of the following:
(i) Research targeted to developing competitive edge technology
research capacity in this state.
(ii) Fostering world-class centers of excellence in competitive
edge technology in this state.
(iii) Developing competitive edge technologies in this state
with strong potential for commercialization.
(iv) Developing or improving facilities for competitive edge
technology research in this state.
(b) A program established by the fund to provide grants to
institutions of higher education, Michigan nonprofit research
institutes, and qualified businesses for commercialization
opportunities aimed at growing competitive edge technology
companies in this state.
(c) A program established by the fund to provide grants to
institutions of higher education, Michigan nonprofit research
institutes, and qualified businesses to attract and retain
scientific talent in competitive edge technology or related
business talent.
(d) A program established by the fund to provide grants to
institutions of higher education, Michigan nonprofit research
institutes, or qualified businesses to serve as a match to promote
or secure the award and receipt of competitively awarded federal
research grants related to competitive edge technology. Matching
payments authorized under this program shall not exceed 10% of the
amount of federal research grants received.
(e) A program established by the fund to make qualified
investments in qualified businesses. The program shall provide for
the fund to contract with an investment management company to make
qualified investments in qualified businesses on behalf of the
fund. The investment management company shall assure a return on
the fund's investment similar to other investors in the qualified
business as determined by the investment management company.
(f) All other things necessary to promote and finance the
development and commercialization of competitive edge technology in
this state.
(2) The board shall request advice from the steering committee
before expending funds for an activity authorized in subsection
(1)(a) and (b). The fund shall not make a qualified investment in a
qualified business unless recommended by an independent job
creation expert selected by the steering committee and approved by
the board.
(3) All programs established by the fund under this chapter
shall be administered by the MEDC. Programs or activities
authorized under this chapter shall not be considered a project, an
economic development project, or a product assisted by the fund for
purposes of chapter 1 or 2.
(4) The board shall establish standards to ensure that money
expended under this chapter will result in economic benefit to this
state and ensure that a major share of the business activity
resulting from the expenditures occurs in this state. It is the
intent of the legislature that a majority of the economic benefits
and job creation resulting from money expended under this chapter
shall accrue within this state.
(5) The board in developing programs under this chapter shall
encourage collaboration among 2 or more of the following:
(a) Institutions of higher education.
(b) Michigan nonprofit research institutes.
(c) Qualified businesses.
(6) The board shall establish standards or procedures
requiring a recipient of money allocated under this chapter to
agree as a condition of receiving the money not to use the money
for 1 or more of the following:
(a) The development of a stadium or arena for use by a
professional sports team.
(b) The development of a casino regulated by this state under
the Michigan gaming control and revenue act, the Initiated Law of
1996, MCL 432.201 to 432.226, a casino at which gaming is conducted
under the Indian gaming regulatory act, Public Law 100-497, 102
Stat. 2467, or property associated or affiliated with the operation
of either type of casino described in this subdivision, including,
but not limited to, a parking lot, hotel, motel, or retail store.
(7) The board shall establish standards to prevent money
expended under this section from being used for 1 or more of the
following:
(a) Grants to or investments in a person who has been
convicted of a criminal offense incident to the application for or
performance of a state contract or subcontract.
(b) Grants to or investments in a person who has been
convicted of a criminal offense, or held liable in a civil
proceeding, that negatively reflects on the person's business
integrity, including embezzlement, theft, forgery, bribery,
falsification or destruction of records, receiving stolen property,
and state or federal antitrust statutes.
(c) Grants, investments, or other assistance to a business
enterprise currently located in the United States for the purpose
of inducing the enterprise to relocate outside the United States if
the incentive or inducement is likely to reduce the number of
employees of the business enterprise in the United States because
United States production is being replaced by the enterprise
outside the United States.
(d) Grants, investments, or other assistance to a business
enterprise currently located in this state for the purpose of
inducing the enterprise to relocate outside this state if the
incentive or inducement is likely to reduce the number of employees
of the business enterprise in this state because production in this
state is being replaced by the enterprise outside this state.
(e) Grants, investments, or other assistance that would
contribute to the violation of internationally recognized workers
rights, as defined in section 507(4) of the trade act of 1974, 19
USC 2467(4), of workers in a country other than the United States,
including any designated zone or area in that country.
(f) Grants to or an investment in a corporation or an
affiliate of the corporation incorporated in a tax haven country
after September 11, 2001, but with the United States as the
principal market for the public trading of the corporation's stock,
as determined by the board. As used in this section, "tax haven
country" includes a country with tax laws that facilitate avoidance
by a corporation or an affiliate of the corporation of United
States tax obligations, including Barbados, Bermuda, British Virgin
Islands, Cayman Islands, Commonwealth of the Bahamas, Cyprus,
Gibraltar, Isle of Man, the Principality of Liechtenstein, the
Principality of Monaco, and the Republic of the Seychelles.
(8) The Proceeds of bonds authorized under this chapter shall
only be expended by the fund pursuant to an appropriation
authorized by law with the assent of a majority of the members
elected to and serving in each house of the legislature.
(9) In addition to any audit requirements under section 9, not
later than May 15 of each year the fund shall commission a
certified public accounting firm to conduct an independent audit of
fund activities funded with the proceeds of bonds authorized under
this chapter. The results of the independent audit shall be
published on the internet or by other means determined by the board
in a manner designed to advise the citizens of this state of the
results of the independent audit.
(10) In addition to any reporting requirements under section
9, not later than December 31 of each year, the fund shall submit a
list of activities funded under this chapter to the governor, the
clerk of the house of representatives, and the secretary of the
senate.
Sec. 88j. (1) The jobs for Michigan research and
commercialization steering committee is created as an advisory body
within the fund to provide the fund with advice and review of the
programs established by the fund under section 88i(1)(a) or (b) to
support research and commercialization, including potential
business commercialization opportunities in competitive edge
technologies, with that advice provided only after review by an
independent job creation expert, to select independent job creation
experts for approval by the board, and to provide other advice
related to activities under this chapter as requested by the board.
The steering committee shall select, with the approval of the
board, independent job creation experts to assist the committee and
the fund in fulfilling their responsibilities under this chapter.
(2) The steering committee shall consist of 19 members, as
provided under subsections (3) and (4).
(3) The steering committee shall include each of the 3
following ex officio members:
(a) The director of the department of labor and economic
growth or his or her designee from within the department of labor
and economic growth.
(b) The chief executive officer of the MEDC or his or her
designee from within the MEDC.
(c) The state treasurer or his or her designee from within the
department of treasury.
(4) The steering committee shall include the following 16
members appointed by the governor:
(a) A member representing Michigan state university.
(b) A member representing the university of Michigan.
(c) A member representing Wayne state university.
(d) A member representing western Michigan university.
(e) A member representing Michigan technological university.
(f) A member representing a public university in Michigan
other than Michigan state university, the university of Michigan,
Wayne state university, western Michigan university, or Michigan
technological university.
(g) A member representing the Van Andel institute or a
successor organization.
(h) Six members representing qualified businesses or persons
with business, technological, or financial expertise related to
competitive edge technologies.
(i) Three members of the general public.
(5) Of the members of the steering committee initially
appointed under subsection (4), 4 members shall be appointed for
terms expiring on December 31, 2006, 4 members shall be appointed
for terms expiring on December 31, 2007, 4 members shall be
appointed for terms expiring on December 31, 2008, and 4 members
shall be appointed for terms expiring on December 31, 2009. After
the expiration of the initial appointment terms provided for by
this subsection, members of the steering committee shall be
appointed for terms of 4 years.
(6) for members of the steering committee appointed under
subsection (4), a vacancy on the steering committee occurring other
than by expiration of a term shall be filled in the same manner as
the original appointment for the balance of the unexpired term. A
member of the steering committee shall hold office until a
successor has been appointed and qualified. A member of the
steering committee is eligible for reappointment.
(7) The governor shall designate 1 of the members of the
steering committee to serve as its chairperson at the pleasure of
the governor. The steering committee shall select from among its
members a member to serve as vice-chairperson and a member to serve
as secretary. Staff from the fund or the MEDC shall assist the
secretary with record-keeping responsibilities.
(8) Upon appointment to the steering committee under this
section and upon the taking and filing of the constitutional oath
of office prescribed in section 1 of article XI of the state
constitution of 1963, a member shall enter the office and exercise
the duties of the office.
(9) Members of the steering committee shall serve without
compensation, but may be reimbursed for actual and necessary
expenses.
(10) Upon the appointment of members under this section, the
steering committee shall organize and adopt its own policies,
procedures, schedule of regular meetings, and a regular meeting
date, place, and time.
(11) The steering committee may act only by resolution
approved by a majority of steering committee members appointed and
serving. A majority of the members of the steering committee then
in office shall constitute a quorum for the transaction of
business. The steering committee shall meet in person or by means
of electronic communication devices that enable all participants in
the meeting to communicate with each other.
(12) The steering committee shall conduct all business at
public meetings 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 each meeting shall be given in the manner required by the
open meetings act, 1976 PA 267, MCL 15.261 to 15.275.
Sec. 88k. (1) Members of the steering committee and of the
board are considered public servants subject to 1968 PA 317, MCL
15.321 to 15.330, and public officers subject to 1973 PA 196, MCL
15.341 to 15.348. A member of the steering committee and of the
board shall discharge the duties of the position in a nonpartisan
manner, in good faith, in the best interests of the fund, and with
the degree of diligence, care, and skill that an ordinarily prudent
person would exercise under similar circumstances in a like
position. In discharging duties of the office, a member of the
steering committee and of the board when acting in good faith may
rely upon the report of an independent appraiser or independent job
creation expert or upon financial statements of the fund
represented to the member of the steering committee or of the board
by the officer of the fund having charge of its books or accounts
or stated in a written report by the auditor general or a certified
public accountant or a firm of accountants to fairly reflect the
financial condition of the fund.
(2) A member of the board or the steering committee shall not
make, participate in making, or in any way attempt to use his or
her position as a member of the board or the steering committee to
influence a decision regarding a loan, grant, investment, or other
expenditure under this chapter to his or her employer.
(3) An independent job creation expert, other than an
investment management company utilized by the fund, selected by the
steering committee and approved by the board shall not have any
financial interest in a recipient of bond proceeds under this
chapter.
Sec. 88l. (1) A record prepared, owned, used, in the possession
of, or retained by the fund, the steering committee, or the MEDC in
the performance of an official function under this chapter shall be
available to the public in compliance with the freedom of
information act, 1976 PA 442, MCL 15.231 to 15.246, unless
otherwise provided by law.
(2) Notwithstanding subsection (1), the following records are
exempt from disclosure under the freedom of information act, 1976
PA 442, MCL 15.231 to 15.246:
(a) Personnel, medical, or similar records, the disclosure of
which would constitute an unwarranted invasion of privacy.
(b) A record containing or reflecting confidential
intellectual property or work product, whether patentable or not,
including, but not limited to, any formula plan, pattern, process,
tool, mechanism, compound, procedure, production data, or
compilation of information that is not patented, that is known only
to certain individuals who are using it to fabricate, produce, or
compound an article of trade or a service having commercial value
and that gives its user an opportunity to obtain a business
advantage over competitors who do not know or use it.
(c) Scientific working papers or unpublished research data.
(3) Unless otherwise required by law, the fund, the steering
committee, and the MEDC shall not disclose financial or proprietary
information exempt from disclosure as provided by law without the
consent of the person submitting the information.
(4) Subject to subsection (5), a record received, prepared,
used, or retained by an investment fiduciary in connection with an
investment or potential investment of the fund that relates to
investment information pertaining to a portfolio company in which
the investment fiduciary has invested or has considered an
investment that is considered by the portfolio company and
acknowledged by the investment fiduciary as confidential, or that
relates to investment information whether prepared by or for the
investment fiduciary regarding loans and assets directly owned by
the investment fiduciary and acknowledged by the investment
fiduciary as confidential, is exempt from the disclosure
requirements of the freedom of information act, 1976 PA 442, MCL
15.231 to 15.246, if at least annually the fund provides to the
board, and makes available to the public, a report of fund
investments under this chapter that includes all of the following:
(a) The name of each portfolio company in which the fund
invested during the reporting period.
(b) The aggregate amount of money invested by the fund in
portfolio companies during the reporting period.
(5) If a record described in subsection (4) is an agreement or
instrument to which an investment fiduciary is a party, only those
parts of the record that contain investment information are exempt
from the disclosure requirements of the freedom of information act,
1976 PA 442, MCL 15.231 to 15.246.
(6) As used in this section:
(a) "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 person
significant competitive harm.
(b) "Intellectual property" means all original data, findings,
or other products of the mind or intellect commonly associated with
claims, interests, and rights that are protected under trade
secret, patent, trademark, copyright, or unfair competition law.
(c) "Investment" means the utilization of money or other
assets in the expectation of future returns in the form of income
or capital gain.
(d) "Investment fiduciary" means a person who exercises any
discretionary authority or control over a qualified investment
authorized under this chapter or renders investment advice to the
fund or to the MEDC for a fee or other direct or indirect
compensation.
(e) "Investment information" means information that has not
been publicly disseminated or that is unavailable from other
sources, the release of which might cause a qualified business or
an investment fiduciary significant competitive harm. Investment
information includes, but is not limited to, financial performance
data and projections, financial statements, list of coinvestors and
their level of investment, product and market data, rent rolls, and
leases.
(f) "Portfolio company" means an entity in which an investment
fiduciary has made or considered an investment on behalf of the
fund.
(g) "Trade secret" means information consisting of a valuable
unpatented formula, pattern, device, or process, or other
information that is used in a business and gives the possessor of
the information a competitive advantage over those who do not know
or use the information, and for which sufficient measures have been
taken to guard the secrecy of the information and preserve its
confidentiality, and that does not encompass information that is
readily ascertainable by competitors or the general public without
undue difficulty or hardship.
Sec. 88m. The fund is prohibited from imposing, levying, or
increasing any tax for any purpose, including, but not limited to,
purposes authorized under this chapter.
Sec. 88n. As used in this chapter:
(a) "Advanced automotive, manufacturing, and materials
technology" means any technology that involves 1 or more of the
following:
(i) Materials with engineered properties created through the
development of specialized process and synthesis technology.
(ii) Nanotechnology, including materials, devices, or systems
at the atomic, molecular, or macromolecular level, with a scale
measured in nanometers.
(iii) Microelectromechanical systems, including devices or
systems integrating microelectronics with mechanical parts and a
scale measured in micrometers.
(iv) Improvements to manufacturing or production quality,
productivity, processes, or environmental impact.
(v) Improvements to vehicle safety, vehicle performance,
vehicle production, or environmental impact, including, but not
limited to, vehicle equipment and component parts.
(vi) Any technology that involves an alternative energy vehicle
or its components, as alternative energy vehicle is defined under
section 2 of the Michigan next energy authority act, 2002 PA 593,
MCL 207.822.
(vii) Advanced computing or electronic device technology
related to technology described under this subdivision.
(viii) Design, engineering, testing, or diagnostics related to
technology described under this subdivision.
(ix) Product research and development related to a technology
described under this subdivision.
(b) "Advanced computing" means any technology used in the
design and development of 1 or more of the following:
(i) Computer hardware and software.
(ii) Data communications.
(iii) Information technologies.
(c) "Alternative energy technology" means 1 or more of the
following:
(i) Alternative energy technology as that term is defined in
section 2 of the Michigan next energy authority act, 2002 PA 593,
MCL 207.822.
(ii) Devices or systems designed and used solely for the
purpose of generating energy from agricultural crops, residue and
waste generated from the production and processing of agricultural
products, animal wastes, or food processing wastes, not including a
conventional gasoline or diesel fuel engine or retrofitted
conventional gasoline or diesel fuel engine.
(iii) Advanced computing or electronic device technology related
to technology described under this subdivision.
(iv) Design, engineering, testing, or diagnostics related to
technology described under this subdivision.
(v) Product research and development related to a technology
described under this subdivision.
(d) "Applied research" means translational research conducted
with the objective of attaining a specific benefit or to solve a
practical problem, or other research activity that seeks to
utilize, synthesize, or apply existing knowledge, information, or
resources to the resolution of a specified problem, question, or
issue, with potential commercial application or potential to create
jobs in this state.
(e) "Basic research" means any original investigation for the
advancement of scientific or technological knowledge with potential
long-range value to move this state toward a position of national
leadership in a specific scientific or technological discipline or
to enhance the research capacity of this state in a way that
increases the ability to attract to or develop companies, jobs,
researchers, or students in this state.
(f) "Bond fund" means the jobs for Michigan economic
development and diversification bond fund created under section
88e.
(g) "Competitive edge technology" means 1 or more of the
following:
(i) Life sciences technology.
(ii) Advanced automotive, manufacturing, and materials
technology.
(iii) Alternative energy technology.
(iv) Homeland security and defense technology.
(h) "Electronic device technology" means 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.
(i) "Grant" means a grant, loan, convertible loan, or
guarantee.
(j) "Homeland security and defense technology" means
technology that assists in the assessment of threats or damage to
the general population and critical infrastructure, protection of,
defense against, or mitigation of the effects of foreign or
domestic threats, disasters, or attacks, or support for crisis or
response management, including, but not limited to, 1 or more of
the following:
(i) Sensors, systems, processes, or equipment for
communications, identification and authentication, screening,
surveillance, tracking, and data analysis.
(ii) Advanced computing or electronic device technology related
to technology described under this subdivision.
(iii) Design, engineering, testing, or diagnostics related to
technology described under this subdivision.
(iv) Product research and development related to a technology
described under this subdivision.
(k) "Institution of higher education" means an institution of
higher education or a community or junior college described in
section 4, 5, 6, or 7 of article VIII of the state constitution of
1963.
(l) "Jobs for Michigan bond repayment subaccount" or "repayment
subaccount" means the jobs for Michigan bond repayment subaccount
created in section 88e.
(m) "Independent job creation expert" means a person or
persons selected by the steering committee and approved by the
board with appropriate expertise to conduct an independent,
unbiased, objective, and competitive evaluation of activities
funded under this chapter. Independent job creation expert includes
an investment management company used by the fund to make qualified
investments in qualified businesses as authorized under section
88i(1)(e). The person or persons shall demonstrate the capability
and experience, as appropriate or necessary for the particular
activity funded, to do all of the following:
(i) Conduct a highly competitive and intensive, independent,
multiphased, peer-review-based evaluation process.
(ii) Employ personnel with appropriate business, scientific,
technical, or other specialized expertise to carry out each aspect
of the evaluation process.
(iii) Provide recommendations to or assist the steering
committee or fund in identifying high-quality activities for
funding that are likely to result in the development and
commercialization of competitive edge technology and job creation
in this state.
(iv) Assure that any peer review process developed maintains a
high level of integrity.
(n) "Life sciences" means science for the examination or
understanding of life or life processes, including, but not limited
to, all of the following:
(i) Bioengineering.
(ii) Biomedical engineering.
(iii) Biogeochemistry.
(iv) Genomics.
(v) Proteomics.
(vi) Molecular and chemical ecology.
(vii) Biotechnology, including any technology that uses living
organisms, cells, macromolecules, microorganisms, or substances
from living organisms to make or modify a product for useful
purposes. Biotechnology or life sciences does not include any of
the following:
(A) Activities prohibited under section 2685 of the public
health code, 1978 PA 368, MCL 333.2685.
(B) Activities prohibited under section 2688 of the public
health code, 1978 PA 368, MCL 333.2688.
(C) Activities prohibited under section 2690 of the public
health code, 1978 PA 368, MCL 333.2690.
(D) Activities prohibited under section 16274 of the public
health code, 1978 PA 368, MCL 333.16274.
(E) Stem cell research with human embryonic tissue.
(o) "Life sciences technology" means any technology derived
from life sciences intended to improve human health or the overall
quality of human life, including, but not limited to, systems,
processes, or equipment for drug or gene therapies, biosensors,
testing, medical devices or instrumentation with a therapeutic or
diagnostic value, a pharmaceutical or other product that requires
United States food and drug administration approval or registration
prior to its introduction in the marketplace and is a drug or
medical device as defined by the federal food, drug, and cosmetic
act, 21 USC 301 to 399, or 1 or more of the following:
(i) Advanced computing or electronic device technology related
to technology described under this subdivision.
(ii) Design, engineering, testing, or diagnostics related to
technology described under this subdivision.
(iii) Product research and development related to a technology
described under this subdivision.
(p) "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.
(q) "Qualified business" means a Michigan business entity that
develops, markets, or commercializes competitive edge technology
products or services.
(r) "Qualified investment" means an investment in a qualified
business, or a business entity investing in a qualified business,
made by the board based upon review and recommendation of 1 or more
independent job creation experts, including by an investment
management company contracted with by the board under section 88i.
A qualified investment does not include a grant.
(s) "State administrative board" means the body created under
1921 PA 2, MCL 17.1 to 17.3, that exercises general supervisory
control over the functions and activities of all administrative
departments, boards, commissioners, and officers of the state and
of all state institutions.
(t) "Steering committee" means the jobs for Michigan research
and commercialization steering committee created under section 88j.
Sec. 94. (1) The governor shall inquire into the
administration of this act.
(2) The governor may remove or suspend any appointive public
officer for violations of this act.
(3) The governor may remove or suspend any elective public
officer for violation of this act that constitutes gross neglect of
duty, corrupt conduct in office, misfeasance, or malfeasance.
(4) This section does not apply to any public officer of the
legislative branch or the judicial branch of state government.
(5) The governor shall report the reasons for any removal or
suspension under this section to the clerk of the house of
representatives and the secretary of the senate.
Sec. 95. Beginning on the effective date of the amendatory act
that added this section, all statutory and other references to the
Michigan strategic fund shall be considered references to the jobs
for Michigan fund and statutory and other references to the
Michigan strategic fund act shall be considered references to this
act. Nothing in the amendatory act that added this section shall be
construed to alter any rights, responsibilities, or obligations of
the Michigan strategic fund, which shall remain the rights,
responsibilities, and obligations of the jobs for Michigan fund.
Enacting section 1. This amendatory act does not take effect
unless Senate Joint Resolution ____ or House Joint Resolution I
(request no. 02579'05) of the 93rd Legislature becomes a part of
the state constitution of 1963 as provided in section 1 of article
XII of the state constitution of 1963.