May 24, 2005, Introduced by Senators GARCIA, SIKKEMA, KUIPERS, CROPSEY, BIRKHOLZ, GEORGE and HARDIMAN and referred to the Committee on Appropriations.
A bill to amend 1984 PA 270, entitled
"Michigan strategic fund act,"
by amending the title and sections 4 and 13 (MCL 125.2004 and
125.2013), sections 4 and 13 as amended by 1987 PA 278, and by
adding section 94 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 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 Michigan strategic fund; to provide for the
expenditure of proceeds in certain funds to which the Michigan
strategic fund succeeds in ownership; to provide for the issuance
of, and terms and conditions for, notes and bonds of the 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
implement section 15(2) of article IX of the state constitution of
1963; to create the strategic economic investment board and the
strategic economic investment bond fund; 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 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. 4. As used in this act:
(a) "Board" means the board of directors of the Michigan
strategic fund, except as used in chapter 8A or 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 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. This chapter shall implement the provisions of
section 15(2) of article IX of the state constitution of 1963.
Sec. 88a. 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 vehicle safety, vehicle performance,
vehicle production, or environmental impact, including, but not
limited to, vehicle equipment and component parts.
(v) Advanced computing or electronic device technology related
to technology described under this subdivision.
(vi) Design, engineering, testing, or diagnostics related to
technology described under this subdivision.
(vii) Product research and development related to 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) "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.
(d) "Basic research" means any original investigation for the
advancement of scientific or technological knowledge that will
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.
(e) "Commercialization" means the transition from research to
the actions necessary to achieve market entry and general market
competitiveness of new innovative technologies, processes, and
products and the services that support that transition.
(f) "Competitive edge technology" means 1 or more of the
following:
(i) Life sciences technology.
(ii) Advanced automotive, manufacturing, and materials
technology.
(iii) Homeland security and defense technology.
(g) "Electronic device technology" means any technology that
involves microelectronics, semiconductors, electronic equipment,
and instrumentation, radio frequency, microwave, and millimeter
electronics; optical and optic-electrical devices; or data and
digital communications and imaging devices.
(h) "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 technology
described under this subdivision.
(i) "Independent peer review expert" means a person or persons
approved by the board with appropriate expertise to conduct an
independent, unbiased, objective, and competitive evaluation of
activities funded under this chapter. 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 board 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. The recommendations
shall include all materials used by the independent peer review
expert in making the recommendation.
(iv) Assure that any peer review process developed maintains a
high level of integrity.
(j) "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.
(k) "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.
(l) "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 technology
described under this subdivision.
(m) "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.
(n) "Qualified business" means a Michigan business entity that
develops, markets, or commercializes competitive edge technology
products or services.
(o) "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 this state and
of all state institutions.
(p) "Strategic economic investment board" or "board" means the
strategic economic investment board created in section 88j.
(q) "Strategic economic investment bond fund" or "bond fund"
means the strategic economic investment bond fund created under
section 88f.
(r) "Strategic economic investment bond repayment subaccount"
or "repayment subaccount" means the strategic economic investment
bond repayment subaccount created in section 88f.
(s) "University technology transfer" means innovative methods
to accelerate the creation of start-up companies affiliated with
institutions of higher education or the transfer of competitive
edge technology research from an institution of higher education to
a qualified business in Michigan.
Sec. 88b. Notwithstanding section 23, this state shall borrow
a sum not to exceed $1,000,000,000.00 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.
Sec. 88c. (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
88b.
(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,
upon recommendation of the state treasurer, 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. 88d. (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. 88e. 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. 88f. (1) The strategic economic investment 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 strategic economic investment 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 board 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 board
or the MEDC under agreements related to grants or loans by the
board under this chapter.
(b) Royalties, return on investments, return of principal,
payments made, or other money received by or payable to the board
or the MEDC under agreements related to grants, loans, 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. 88g. (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. 88h. (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 88f 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 paid
as provided by law.
(3) The governor shall include the expenditures provided for
in subsection (2), if necessary, in his or her annual executive
budget recommendations to the legislature.
Sec. 88i. (1) The proceeds of bonds issued under this chapter
shall be deposited into the bond fund and appropriated as provided
by law for purposes authorized under this chapter. The proceeds of
the bonds issued under this chapter shall be expended by the board
to encourage the development of competitive edge technology with
strong potential to provide jobs in this state.
(2) The board shall not expend more than 10% of the total
proceeds of bonds authorized under this chapter in any calendar
year. The limits on expenditures established under this subsection
are cumulative and may carry forward to a future calendar year if
the funds are not previously expended.
(3) The total proceeds of bonds authorized under this chapter
shall be expended as follows:
(a) Not less than 50% for life sciences technology.
(b) Not less than 20% for advanced automotive, manufacturing,
and materials technology.
(c) Not less than 20% for homeland security and defense
technology.
(4) Not more than 10% of each expenditure category described
in subsection (3)(a), (b), and (c), respectively, may be expended
by the board to support basic research in competitive edge
technologies.
(5) 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 88c(3).
(6) Not more than 3% of the total amount of the bonds
authorized under this chapter shall be available for appropriation
to the board to pay its costs and the costs of the MEDC directly
associated with the administration of this chapter including, but
not limited to, peer review costs. The 3% limitation under this
subsection does not apply to costs under subsection (5).
(7) Not more than 2.5% of the total expenditures authorized
under this chapter can go to any 1 qualified business, including
its affiliates and subsidiaries.
Sec. 88j. (1) The strategic economic investment board is
created as a public body corporate within the fund. The board shall
exercise its powers and duties as an autonomous entity independent
of the strategic fund and the department of labor and economic
growth.
(2) Money in the bond fund that is available for expenditure
by the board under section 88i shall be expended annually by the
board only for basic research, applied research, university
technology transfer, and commercialization of products, processes,
and services to encourage the development of competitive edge
technologies with strong potential to provide jobs in this state.
(3) Subject to subsection (2), the board shall do all of the
following:
(a) Establish a competitive process to award grants and make
loans for competitive edge technologies. The competitive process
shall include, but is not limited to, the following:
(i) A provision that the applications must be peer-reviewed by
independent peer review experts.
(ii) A preference for Michigan-based applicants.
(iii) A provision that out-of-state business must have a
significant existing or proposed business activity in this state.
(iv) A preference for proposals that can contribute directly to
the development of employment opportunities in this state.
(v) A provision that the program will utilize contracts with
measurable milestones, clear objectives, provisions to revoke
awards for breach of contract, and repayment provisions for funds
given to qualified businesses that leave Michigan within 5 years of
receiving funding or otherwise breach the terms of the contract.
(vi) A provision that the applicant leverage other resources as
a condition of the grant or loan.
(vii) Overhead rates for grants and loans that reflect actual
overhead but not greater than 15% of total direct costs.
(viii) A provision that grants can only be awarded to Michigan
institutions of higher education and Michigan nonprofit research
institutions.
(ix) A preference for collaborations between institutions of
higher education, Michigan nonprofit research institutions, and
qualified businesses.
(b) The board shall contract with independent peer review
experts to assist the board with its responsibilities under this
chapter.
(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.
(5) All programs established by the board under this chapter
may be administered by the MEDC.
(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 or loans to a person who has been convicted of a
criminal offense incident to the application for or performance of
a state contract or subcontract. As used in this subdivision, if a
person is a business entity, then person includes affiliates,
subsidiaries, officers, directors, managerial employees, and any
person who, directly or indirectly, holds a pecuniary interest in
that business entity of 20% or more.
(b) Grants or loans to 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, based on a
finding of embezzlement, theft, forgery, bribery, falsification or
destruction of records, receiving stolen property, or violation of
state or federal antitrust statutes. As used in this subdivision,
if a person is a business entity, then person includes affiliates,
subsidiaries, officers, directors, managerial employees, and any
person who, directly or indirectly, holds a pecuniary interest in
that business entity of 20% or more.
(c) Grants or loans 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 or loans 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 or loans 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 or loans 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) In addition to any audit requirements under section 9, not
later than May 15 of each year the auditor general shall conduct a
performance audit of board activities funded with the proceeds of
bonds authorized under this chapter. The results of the performance
audit shall be published on the internet and disseminated by other
means determined by the board in a manner designed to advise the
citizens of this state of the results of the audit. A copy of the
audit shall be provided to the governor, the clerk of the house of
representatives, and the secretary of the senate.
(9) In addition to any reporting requirements under section 9,
not later than December 31 of each year, the board shall report to
the governor, the clerk of the house of representatives, and the
secretary of the senate. The report shall contain all of the
following for the immediately preceding fiscal year that are
related to a grant or loan made by the board:
(a) A list of entities that received funding, the amount
received, and the type of funding.
(b) The number of new patents applied for and issued.
(c) The number of new start-up businesses.
(d) The number of new jobs and projected new job growth.
(e) Amounts of other funds leveraged.
(f) Money or other revenue or property returned to the bond
fund.
(10) The board shall publish the standards described in this
section on the internet and disseminate them by any other means
determined by the board.
Sec. 88k. (1) The board shall consist of 13 members, as
provided under subsections (2) and (3).
(2) The board shall include each of the 2 following voting 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 state treasurer or his or her designee from within the
department of treasury.
(3) The board shall include the following 11 members appointed
by the governor with the advice and consent of the senate:
(a) One member with knowledge, skill, or experience in
science, engineering, or technology.
(b) One member with knowledge, skill, or experience in venture
capital investments.
(c) Two members with knowledge, skill, or experience in
bringing competitive edge technology products to market.
(d) One member appointed from a list of 2 or more individuals
selected by the majority leader of the senate representing
qualified businesses or persons with business, technological, or
financial experience related to competitive edge technology.
(e) One member appointed from a list of 2 or more individuals
selected by the speaker of the house of representatives
representing qualified businesses or persons with business,
technological, or financial experience related to competitive edge
technology.
(f) One member representing qualified businesses or persons
with business, technological, or financial experience related to
competitive edge technology.
(g) One member representing a Michigan nonprofit research
institution.
(h) Two members representing an institution of higher
education that has 24,000 or more fiscal year equated students as
reported to the higher education institutional data inventory
database at the time of the appointment.
(i) One member representing an institution of higher education
that has fewer than 24,000 fiscal year equated students as reported
to the higher education institutional data inventory database at
the time of the appointment.
(4) Of the members of the board initially appointed under
subsection (3), 3 members shall be appointed for terms expiring on
December 31, 2006, 3 members shall be appointed for terms expiring
on December 31, 2007, 3 members shall be appointed for terms
expiring on December 31, 2008, and 2 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 board shall be appointed for terms of 4 years.
(5) For members of the board appointed under subsection (3), a
vacancy on the board 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 board shall hold
office until a successor has been appointed and qualified. A member
of the board is eligible for reappointment. State employees are not
eligible to serve as members appointed under subsection (3).
(6) The governor shall designate 1 of the members of the board
to serve as its chairperson at the pleasure of the governor. The
board shall select from among its members a member to serve as
vice-chairperson and a member to serve as secretary. Staff from the
department of labor and economic growth or the MEDC shall assist
the secretary with record-keeping responsibilities.
(7) Upon appointment to the board 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.
(8) Members of the board shall serve without compensation, but
may be reimbursed for actual and necessary expenses.
(9) Upon the initial appointment of members under this
section, the board shall organize and adopt its own policies,
procedures, schedule of regular meetings, and a regular meeting
date, place, and time.
(10) The board may act only by resolution approved by a
majority of board members appointed and serving. A majority of the
members of the board then in office shall constitute a quorum for
the transaction of business. The board shall meet in person or by
means of electronic communication devices that enable all
participants in the meeting to communicate with each other.
(11) The board 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, and shall be
published on the internet.
(12) Not more than 7 members of the board shall be members of
the same political party.
Sec. 88l. (1) Members 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 board shall discharge the duties of the position in a
nonpartisan manner, in good faith, in the best interests of this
state, 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 board when acting in good faith may rely
upon the report of an independent expert or independent peer review
expert or upon financial statements of the board represented to the
member of the board by the officer of the board having charge of
its books or accounts or stated in a written report by the auditor
general.
(2) A member of the board shall not make, participate in
making, or in any way attempt to use his or her position as a
member of the board to influence a decision regarding a loan,
grant, investment, or other expenditure under this chapter to his
or her employer.
(3) An independent peer review expert, other than an
investment management company utilized by the board, shall not have
any financial interest in a recipient of bond proceeds under this
chapter.
Sec. 88m. (1) A record prepared, owned, used, in the
possession of, or retained by the board 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) A record or portion of a record, material, or other data
received, prepared, used, or retained by the board in connection
with an application for a grant, loan, or qualified investment
under this chapter that relates to financial or proprietary
information submitted by the applicant that is considered by the
applicant and acknowledged by the board as confidential shall not
be subject to the disclosure requirements of the freedom of
information act, 1976 PA 442, MCL 15.231 to 15.246. A designee of
the board shall make the determination as to whether the board
acknowledges as confidential any financial or proprietary
information submitted by the applicant and considered by the
applicant as confidential. Unless considered proprietary
information, the board shall not acknowledge routine financial
information as confidential. If the designee of the board
determines that information submitted to the board is financial or
proprietary information and is confidential, the designee of the
board shall release a written statement, subject to disclosure
under the freedom of information act, 1976 PA 442, 15.231 to
15.246, which states all of the following:
(a) The name and business location of the person requesting
that the information submitted be confidential as financial or
proprietary information.
(b) That the information submitted was determined by the
designee of the board to be confidential as financial or
proprietary information.
(c) A broad nonspecific overview of the financial or
proprietary information determined to be confidential.
(3) Unless otherwise required by law, the board 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) As used in this section, "financial or proprietary
information" means information that has not been publicly
disseminated or is unavailable from other sources, the release of
which might cause the person significant competitive harm.
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. The governor may request the
MEDC to remove or suspend any MEDC corporate employee 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.
Enacting section 1. This amendatory act takes effect December
26, 2005.
Enacting section 2. This amendatory act does not take effect
unless Senate Joint Resolution ____ or House Joint Resolution ____
(request no. 03091'05) 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.