December 13, 2005, Introduced by Senator KUIPERS and referred to the Committee on Commerce and Labor.
A bill to amend 1995 PA 24, entitled
"Michigan economic growth authority act,"
by amending section 8 (MCL 207.808), as amended by 2005 PA 185.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 8. (1) After receipt of an application, the authority may
enter into an agreement with an eligible business for a tax credit
under section 9 if the authority determines that all of the
following are met:
(a) Except as provided in subsection (5), the eligible
business creates 1 or more of the following within 12 months of the
expansion or location as determined by the authority:
(i) A minimum of 75 qualified new jobs at the facility if
expanding in this state.
(ii) A minimum of 150 qualified new jobs at the facility if
locating in this state.
(iii) A minimum of 25 qualified new jobs at the facility if the
facility is located in a neighborhood enterprise zone as determined
under the neighborhood enterprise zone act, 1992 PA 147, MCL
207.771 to 207.786, is located in a renaissance zone under the
Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to
125.2696, or is located in a federally designated empowerment zone,
rural enterprise community, or enterprise community.
(iv) A minimum of 5 qualified new jobs at the facility if the
eligible business is a qualified high-technology business.
(v) A minimum of 5 qualified new jobs at the facility if the
eligible business is a rural business.
(b) Except as provided in subsection (5), the eligible
business agrees to maintain 1 or more of the following for each
year that a credit is authorized under this act:
(i) A minimum of 75 qualified new jobs at the facility if
expanding in this state.
(ii) A minimum of 150 qualified new jobs at the facility if
locating in this state.
(iii) A minimum of 25 qualified new jobs at the facility if the
facility is located in a neighborhood enterprise zone as determined
under the neighborhood enterprise zone act, 1992 PA 147, MCL
207.771 to 207.786, is located in a renaissance zone under the
Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to
125.2696, or is located in a federally designated empowerment zone,
rural enterprise community, or enterprise community.
(iv) If the eligible business is a qualified high-technology
business, all of the following apply:
(A) A minimum of 5 qualified new jobs at the facility.
(B) A minimum of 25 qualified new jobs at the facility within
5 years after the date of the expansion or location as determined
by the authority and a minimum of 25 qualified new jobs at the
facility each year thereafter for which a credit is authorized
under this act.
(v) If the eligible business is a rural business, all of the
following apply:
(A) A minimum of 5 qualified new jobs at the facility.
(B) A minimum of 25 qualified new jobs at the facility within
5 years after the date of the expansion or location as determined
by the authority.
(c) Except as provided in subsection (5), in addition to the
jobs specified in subdivision (b), the eligible business, if
already located within this state, agrees to maintain a number of
full-time jobs equal to or greater than the number of full-time
jobs it maintained in this state prior to the expansion, as
determined by the authority.
(d) Except as otherwise provided in this subdivision, the
average wage paid for all retained jobs and qualified new jobs is
equal to or greater than 150% of the federal minimum wage. However,
if the eligible business is a qualified high-technology business,
then the average wage paid for all qualified new jobs is equal to
or greater than 400% of the federal minimum wage.
(e)
Except for a qualified high-technology business, the
expansion,
retention, or location of the eligible business will not
occur
in this state without the tax credits offered under this act.
(e) (f)
Except for an eligible business described in
subsection (5)(b)(ii), the local governmental unit in which the
eligible business will expand, be located, or maintain retained
jobs, or a local economic development corporation or similar
entity, will make a staff, financial, or economic commitment to the
eligible business for the expansion, retention, or location.
(f) (g)
The financial statements of the eligible business
indicated that it is financially sound or has submitted a chapter
11 plan of reorganization to the bankruptcy court and that its
plans for the expansion, retention, or location are economically
sound.
(g) (h)
Except for an eligible business described in
subsection (5)(c), the eligible business has not begun construction
of the facility.
(h) (i)
The expansion, retention, or location of the
eligible business will benefit the people of this state by
increasing opportunities for employment and by strengthening the
economy of this state.
(j)
The tax credits offered under this act are an incentive to
expand,
retain, or locate the eligible business in Michigan and
address
the competitive disadvantages with sites outside this
state.
(i) (k)
A cost/benefit analysis reveals that authorizing the
eligible business to receive tax credits under this act will result
in an overall positive fiscal impact to the state.
(j) (l) If feasible, as determined by the authority, in
locating the facility, the authorized business reuses or redevelops
property that was previously used for an industrial or commercial
purpose.
(k) (m)
If the eligible business is a qualified high-
technology business described in section 3(m)(i), the eligible
business agrees that not less than 25% of the total operating
expenses of the business will be maintained for research and
development for the first 3 years of the written agreement.
(2) If the authority determines that the requirements of
subsection (1) or (5) have been met, the authority shall determine
the amount and duration of tax credits to be authorized under
section 9, and shall enter into a written agreement as provided in
this section. The duration of the tax credits shall not exceed 20
years or for an authorized business that is a distressed business,
3 years. In determining the amount and duration of tax credits
authorized, the authority shall consider the following factors:
(a) The number of qualified new jobs to be created or retained
jobs to be maintained.
(b) The average wage level of the qualified new jobs or
retained jobs relative to the average wage paid by private entities
in the county in which the facility is located.
(c) The total capital investment or new capital investment the
eligible business will make.
(d) The cost differential to the business between expanding,
locating, or retaining new jobs in Michigan and a site outside of
Michigan.
(e) The potential impact of the expansion, retention, or
location on the economy of Michigan.
(f) The cost of the credit under section 9, the staff,
financial, or economic assistance provided by the local government
unit, or local economic development corporation or similar entity,
and the value of assistance otherwise provided by this state.
(3) A written agreement between an eligible business and the
authority shall include, but need not be limited to, all of the
following:
(a) A description of the business expansion, retention, or
location that is the subject of the agreement.
(b) Conditions upon which the authorized business designation
is made.
(c) A statement by the eligible business that a violation of
the written agreement may result in the revocation of the
designation as an authorized business and the loss or reduction of
future credits under section 9.
(d) A statement by the eligible business that a
misrepresentation in the application may result in the revocation
of the designation as an authorized business and the refund of
credits received under section 9.
(e) A method for measuring full-time jobs before and after an
expansion, retention, or location of an authorized business in this
state.
(f) A written certification from the eligible business
regarding all of the following:
(i) The eligible business will follow a competitive bid process
for the construction, rehabilitation, development, or renovation of
the facility, and that this process will be open to all Michigan
residents and firms. The eligible business may not discriminate
against any contractor on the basis of its affiliation or
nonaffiliation with any collective bargaining organization.
(ii) The eligible business will make a good faith effort to
employ, if qualified, Michigan residents at the facility.
(iii) The eligible business will make a good faith effort to
employ or contract with Michigan residents and firms to construct,
rehabilitate, develop, or renovate the facility.
(iv) The eligible business is encouraged to make a good faith
effort to utilize Michigan-based suppliers and vendors when
purchasing goods and services.
(g) A condition that if the eligible business qualified under
subsection
(5)(b)(ii) and met the subsection (1)(g)
(1)(f)
requirement by filing a chapter 11 plan of reorganization, the plan
must be approved by the bankruptcy court within 2 years of the date
of the agreement or the agreement is rescinded.
(4) Upon execution of a written agreement as provided in this
section, an eligible business is an authorized business.
(5) After receipt of an application, the authority may enter
into a written agreement, which shall include a repayment provision
of all or a portion of the credits under section 9 for a violation
of the written agreement, with an eligible business that meets 1 or
more of the following criteria:
(a) Is located in this state on the date of the application,
makes new capital investment of $250,000,000.00 in this state, and
maintains 500 retained jobs, as determined by the authority.
(b) Meets 1 or more of the following criteria:
(i) Relocates production of a product to this state after the
date of the application, makes capital investment of
$500,000,000.00 in this state, and maintains 500 retained jobs, as
determined by the authority.
(ii) Maintains 150 retained jobs at a facility, maintains 1,000
or more full-time jobs in this state, and makes new capital
investment in this state.
(iii) Is located in this state on the date of the application,
maintains at least 100 retained jobs at a single facility, and
agrees to make new capital investment at that facility equal to the
greater of $100,000.00 per retained job maintained at that facility
or $10,000,000.00 to be completed not later than December 31, 2006.
(iv) Maintains 300 retained jobs at a facility; is a rural
business; the facility is at risk of being closed and if it were to
close, the work would go to a location outside this state, as
determined by the authority; new management or new ownership is
proposed for the facility that is committed to improve the
viability of the facility; and the tax credits offered under this
act are necessary for the facility to maintain operations. The
authority may not enter into a written agreement under this
subparagraph after December 31, 2006. Of the written agreements
entered into under this subparagraph, the authority may enter into
1 written agreement under this subparagraph that is excluded from
the
requirements of subsection (1)(e), (f), (g), (h), (j), and
(k)
(i) if the authority considers it in the public interest
and
if the eligible business would have met the requirements of
subsection (1)(e),
(i), (j), and (k) (1)(h) and
(i) within the
immediately preceding 6 months from the signing of the written
agreement for a tax credit.
(c) Is a distressed business.
(6) The authority shall not execute more than 25 new written
agreements each year for eligible businesses that are not qualified
high-technology businesses, distressed businesses, or rural
businesses. If the authority executes less than 25 new written
agreements in a year, the authority may carry forward for 1 year
only the difference between 25 and the number of new agreements
executed in the immediately preceding year.
(7) The authority shall not execute more than 50 new written
agreements each year for eligible businesses that are qualified
high-technology businesses or rural business. Only 5 of the 50
written agreements for businesses that are qualified high-
technology businesses or rural business may be executed each year
for qualified rural businesses.
(8) The authority shall not execute more than 20 new written
agreements each year for eligible businesses that are distressed
businesses. The authority shall not execute more than 5 of the
written agreements described in this subsection each year for
distressed businesses that had 1,000 or more full-time jobs at a
facility 4 years immediately preceding the application to the
authority under this act.