HB-5511, As Passed House, December 11, 2007

SUBSTITUTE FOR

HOUSE BILL NO. 5511

     A bill to amend 2007 PA 36, entitled

"Michigan business tax act,"

by amending section 437 (MCL 208.1437).

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 437. (1) Subject to the criteria under this section, a

qualified taxpayer that has unused credits or has a preapproval

letter issued after December 31, 2007 and before January 1, 2013,

or a taxpayer that received a preapproval letter prior to January

1, 2008 under section 38g of former 1975 PA 228 and has not

received a certificate of completion prior to the taxpayer's last

tax year, provided that the project is completed not more than 5

years after the preapproval letter for the project is issued or if

it is a multiphase project not more than 10 years after the

preapproval letter for the project is issued, or an assignee under

subsection (20), (21), or (22) may claim a credit that has been

approved under section 38g of former 1975 PA 228 or under

subsection (2), (3), or (4) against the tax imposed by this act

equal to either of the following:

     (a) If For projects approved before January 1, 2008, if the

total of all credits for a project is $1,000,000.00 or less, 10% of

the cost of the qualified taxpayer's eligible investment paid or

accrued by the qualified taxpayer on an eligible property provided

that the project does not exceed the amount stated in the

preapproval letter. For projects approved on and after January 1,

2008, if the total of all credits for a project is $1,000,000.00 or

less, up to 12.5% of the costs of the qualified taxpayer's eligible

investment paid or accrued by the qualified taxpayer on an eligible

property or up to 15% of the costs of the qualified taxpayer's

eligible investment paid or accrued by the qualified taxpayer on an

eligible property if the project is designated as an urban

development area project by the chairperson of the Michigan

economic growth authority provided that the project does not exceed

the amount stated in the preapproval letter. If eligible investment

exceeds the amount of eligible investment in the preapproval letter

for that project, the total of all credits for the project shall

not exceed the total of all credits on the certificate of

completion.

     (b) If For projects approved before January 1, 2008, if the

total of all credits for a project is more than $1,000,000.00 but

$30,000,000.00 or less and, except as provided in subsection

(6)(b), the project is located in a qualified local governmental

unit, a percentage as determined by the Michigan economic growth

authority not to exceed 10% of the cost of the qualified taxpayer's

eligible investment as determined under subsection (9) (11) paid or

accrued by the qualified taxpayer on an eligible property. For

projects approved on and after January 1, 2008, if the total of all

credits for a project is more than $1,000,000.00 but $30,000,000.00

or less and, except as provided in subsection (6)(b), the project

is located in a qualified local governmental unit, a percentage as

determined by the Michigan economic growth authority not to exceed

15% of the costs of the qualified taxpayer's eligible investment as

determined under subsection (11) paid or accrued by the qualified

taxpayer on an eligible property. However, the credit shall not

exceed 12.5% of the cost of the qualified taxpayer's eligible

investment as determined under subsection (11) paid or accrued by

the qualified taxpayer on an eligible property unless the project

is designated as an urban development area project by the Michigan

economic growth authority. If eligible investment exceeds the

amount of eligible investment in the preapproval letter for that

project, the total of all credits for the project shall not exceed

the total of all credits on the certificate of completion.

     (2) If the cost of a project will be $2,000,000.00 or less, a

qualified taxpayer shall apply to the Michigan economic growth

authority for approval of the project under this subsection. An

application under this subsection shall state whether the project

is a multiphase project. The Subject to the limitation provided

under subsection (31), the chairperson of the Michigan economic

growth authority or his or her designee is authorized to approve an

application or project under this subsection. Only the chairperson

of the Michigan economic growth authority is authorized to deny an

application or project under this subsection. A project shall be

approved or denied not more than 45 days after receipt of the

application. If the chairperson of the Michigan economic growth

authority or his or her designee does not approve or deny the

application within 45 days after the application is received by the

Michigan economic growth authority, the application is considered

approved as written. The total of all credits for all projects

approved under this subsection shall not exceed $10,000,000.00 in

any calendar year. If the chairperson of the Michigan economic

growth authority or his or her designee approves a project under

this subsection, the chairperson of the Michigan economic growth

authority or his or her designee shall issue a preapproval letter

that states that the taxpayer is a qualified taxpayer; the maximum

total eligible investment for the project on which credits may be

claimed and the maximum total of all credits for the project when

the project is completed and a certificate of completion is issued;

and the project number assigned by the Michigan economic growth

authority. If a project is denied under this subsection, a taxpayer

is not prohibited from subsequently applying under this subsection

for the same project or for another project. If the authority

approves a total of all credits for all projects under this

subsection of less than $10,000,000.00 in a calendar year, the

authority may carry forward for 1 year only the difference between

$10,000,000.00 and the total of all credits for all projects under

this subsection approved in the immediately preceding calendar

year. The Michigan economic growth authority shall develop and

implement the use of the application form to be used for projects

under this subsection. Before the Michigan economic growth

authority substantially changes the form, the Michigan economic

growth authority shall adopt the changes by resolution and give

notice of the proposed resolution to the secretary of the senate,

to the clerk of the house of representatives, and to each person

who requested from the Michigan economic growth authority in

writing or electronically to be notified regarding proposed

resolutions. The notice and proposed resolution and all attachments

shall be published on the Michigan economic growth authority's

internet website. The Michigan economic growth authority shall hold

a public hearing not sooner than 14 days and not later than 30 days

after the date notice of a proposed resolution is given and offer

an opportunity for persons to present data, views, questions, and

arguments. The Michigan economic growth authority board members or

1 or more persons designated by the Michigan economic growth

authority who have knowledge of the subject matter of the proposed

resolution shall be present at the public hearing and shall

participate in the discussion of the proposed resolution. The

Michigan economic growth authority may act on the proposed

resolution no sooner than 14 days after the public hearing. The

Michigan economic growth authority shall produce a final decision

document that describes the basis for its decision. The final

resolution and all attachments and the decision document shall be

provided to the secretary of the senate and to the clerk of the

house of representatives and shall be published on the Michigan

economic growth authority's internet website. The notice shall

include all of the following:

     (a) A copy of the proposed resolution and all attachments.

     (b) A statement that any person may express any data, views,

or arguments regarding the proposed resolution.

     (c) The address to which written comments may be sent and the

date by which comments must be mailed or electronically

transmitted, which date shall not be restricted to only before the

date of the public hearing.

     (d) The date, time, and place of the public hearing.

     (3) If the cost of a project will be for more than

$2,000,000.00 but $10,000,000.00 or less, a qualified taxpayer

shall apply to the Michigan economic growth authority for approval

of the project under this subsection. An application under this

subsection shall state whether the project is a multiphase project.

The Subject to the limitation provided under subsection (31), the

chairperson of the Michigan economic growth authority or his or her

designee is authorized to approve an application or project under

this subsection. Only the chairperson of the Michigan economic

growth authority is authorized to deny an application or project

under this subsection. A project shall be approved or denied not

more than 45 days after receipt of the application. If the

chairperson of the Michigan economic growth authority or his or her

designee does not approve or deny an application within 45 days

after the application is received by the Michigan economic growth

authority, the application is considered approved as written. The

total of all credits for all projects approved under this

subsection shall not exceed $30,000,000.00 in any calendar year. If

the authority approves a total of all credits for all projects

under this subsection of less than $30,000,000.00 in a calendar

year, the authority may carry forward for 1 year only the

difference between $30,000,000.00 and the total of all credits for

all projects approved under this subsection in the immediately

preceding calendar year. The criteria in subsection (7) shall be

used when approving projects under this subsection. When approving

projects under this subsection, priority shall be given to projects

on a facility. The total of all credits for an approved project

under this subsection shall not exceed $1,000,000.00. A taxpayer

may apply under this subsection instead of subsection (4) for

approval of a project that will be for more than $10,000,000.00,

but the total of all credits for that project shall not exceed

$1,000,000.00. If the chairperson of the Michigan economic growth

authority or his or her designee approves a project under this

subsection, the chairperson of the Michigan economic growth

authority or his or her designee shall issue a preapproval letter

that states that the taxpayer is a qualified taxpayer; the maximum

total eligible investment for the project on which credits may be

claimed and the maximum total of all credits for the project when

the project is completed and a certificate of completion is issued;

and the project number assigned by the Michigan economic growth

authority. If a project is denied under this subsection, a taxpayer

is not prohibited from subsequently applying under this subsection

or subsection (4) for the same project or for another project.

     (4) If the cost of a project will be for more than

$10,000,000.00 and, except as provided in subsection (6)(b), the

project is located in a qualified local governmental unit, a

qualified taxpayer shall apply to the Michigan economic growth

authority for approval of the project. An application under this

subsection shall state whether the project is a multiphase project.

The Michigan economic growth authority shall approve or deny the

project not more than 65 days after receipt of the application. A

project under this subsection shall not be approved without the

concurrence of the state treasurer. If the Michigan economic growth

authority does not approve or deny the application within 65 days

after it receives the application, the Michigan economic growth

authority shall send the application to the state treasurer. The

state treasurer shall approve or deny the application within 5 days

after receipt of the application. If the state treasurer does not

deny the application within 5 days after receipt of the

application, the application is considered approved. The Michigan

economic growth authority shall approve a limited number of

projects under this subsection during each calendar year as

provided in subsection (6). The Michigan economic growth authority

shall use the criteria in subsection (7) when approving projects

under this subsection, when determining the total amount of

eligible investment, and when determining the percentage of

eligible investment for the project to be used to calculate a

credit. The total of all credits for an approved project under this

subsection shall not exceed the amount designated in the

preapproval letter for that project. If the Michigan economic

growth authority approves a project under this subsection, the

Michigan economic growth authority shall issue a preapproval letter

that states that the taxpayer is a qualified taxpayer; the

percentage of eligible investment for the project determined by the

Michigan economic growth authority for purposes of subsection

(1)(b); the maximum total eligible investment for the project on

which credits may be claimed and the maximum total of all credits

for the project when the project is completed and a certificate of

completion is issued; and the project number assigned by the

Michigan economic growth authority. The Michigan economic growth

authority shall send a copy of the preapproval letter to the

department. If a project is denied under this subsection, a

taxpayer is not prohibited from subsequently applying under this

subsection or subsection (3) for the same project or for another

project.

     (5) If the project is on property that is functionally

obsolete, the taxpayer shall include with the application an

affidavit signed by a level 3 or level 4 assessor, that states that

it is the assessor's expert opinion that the property is

functionally obsolete and the underlying basis for that opinion.

     (6) The Michigan economic growth authority may approve not

more than 17 20 projects each calendar year under subsection (4),

and the following limitations apply:

     (a) Of the 17 20 projects allowed under this subsection, the

total of all credits for each project may be more than

$10,000,000.00 but $30,000,000.00 or less for up to 2 projects only

1 project.

     (b) Of the 17 20 projects allowed under this subsection, up to

3 projects may be approved for projects that are not in a qualified

local governmental unit if the property is a facility for which

eligible activities are identified in a brownfield plan or, for 1

of the 3 projects, if the property is not a facility but is

functionally obsolete or blighted, property identified in a

brownfield plan. For purposes of this subdivision, a facility

includes a building or complex of buildings that was used by a

state or federal agency and that is no longer being used for the

purpose for which it was used by the state or federal agency.

     (c) Of the 2 projects The project allowed under subdivision

(a) , 1 may be a project that also qualifies may also qualify under

subdivision (b).

     (7) The Michigan economic growth authority shall review all

applications for projects under subsection (4) and, if an

application is approved, shall determine the maximum total of all

credits for that project. Before approving a project for which the

total of all credits will be more than $10,000,000.00 but

$30,000,000.00 or less only, the Michigan economic growth authority

shall determine that the project would not occur in this state

without the tax credit offered under subsection (4). The Michigan

economic growth authority shall consider the following criteria to

the extent reasonably applicable to the type of project proposed

when approving a project under subsection (4), and the chairperson

of the Michigan economic growth authority or his or her designee

shall consider the following criteria to the extent reasonably

applicable to the type of project proposed when approving a project

under subsection (2) or (3) or when considering an amendment to a

project under subsection (9):

     (a) The overall benefit to the public.

     (b) The extent of reuse of vacant buildings and redevelopment

of blighted property.

     (c) Creation of jobs.

     (d) Whether the eligible property is in an area of high

unemployment.

     (e) The level and extent of contamination alleviated by the

qualified taxpayer's eligible activities to the extent known to the

qualified taxpayer.

     (f) The level of private sector contribution.

     (g) The cost gap that exists between the site and a similar

greenfield site as determined by the Michigan economic growth

authority.

     (h) If the qualified taxpayer is moving from another location

in this state, whether the move will create a brownfield.

     (i) Whether the financial statements of the qualified taxpayer

indicate that it project is financially sound and that the project

is and economically sound.

     (j) Any other criteria that the Michigan economic growth

authority or the chairperson of the Michigan economic growth

authority, as applicable, considers appropriate for the

determination of eligibility under subsection (3) or (4).

     (8) A qualified taxpayer may apply for projects under this

section for eligible investment on more than 1 eligible property in

a tax year. Each project approved and each project for which a

certificate of completion is issued under this section shall be for

eligible investment on 1 eligible property.

     (9) If, after a taxpayer's project has been approved and the

taxpayer has received a preapproval letter but before the project

is completed, the taxpayer determines that the project cannot be

completed as preapproved, the taxpayer may petition the Michigan

economic growth authority to amend the project. The total of

eligible investment for the project as amended shall not exceed the

amount allowed in the preapproval letter for that project.

     (10) A project may be a multiphase project. If a project is a

multiphase project, when each component of the multiphase project

is completed, the taxpayer shall submit documentation that the

component is complete, an accounting of the cost of the component,

and the eligible investment for the component of each taxpayer

eligible for a credit for the project of which the component is a

part to the Michigan economic growth authority or the designee of

the Michigan economic growth authority, who shall verify that the

component is complete. When the completion of the component is

verified, a component completion certificate shall be issued to the

qualified taxpayer which shall state that the taxpayer is a

qualified taxpayer, the credit amount for the component, the

qualified taxpayer's federal employer identification number or the

Michigan treasury number assigned to the taxpayer, and the project

number. The taxpayer may assign all or part of the credit for a

multiphase project as provided in this section after a component

completion certificate for a component is issued. The qualified

taxpayer may transfer ownership of or lease the completed component

and assign a proportionate share of the credit for the entire

project to the qualified taxpayer that is the new owner or lessee.

A multiphase project shall not be divided into more than 20 10

components. A component is considered to be completed when a

certificate of occupancy has been issued by the local municipality

in which the project is located for all of the buildings or

facilities that comprise the completed component and a component

completion certificate is issued or the chairperson of the Michigan

economic growth authority or his or her designee, for projects

approved under subsection (2) or (3), or the Michigan economic

growth authority, for projects approved under subsection (4),

verifies that the component is complete. A credit assigned based on

a multiphase project shall be claimed by the assignee in the tax

year in which the assignment is made. The total of all credits for

a multiphase project shall not exceed the amount stated in the

preapproval letter for the project under subsection (1). If all

components of a multiphase project are not completed by 10 years

after the date on which the preapproval letter for the project was

issued, the qualified taxpayer that received the preapproval letter

for the project shall pay to the state treasurer, as a penalty, an

amount equal to the sum of all credits claimed and assigned for all

components of the multiphase project and no credits based on that

multiphase project shall be claimed after that date by the

qualified taxpayer or any assignee of the qualified taxpayer. The

penalty under this subsection is subject to interest on the amount

of the credit claimed or assigned determined individually for each

component at the rate in section 23(2) of 1941 PA 122, MCL 205.23,

beginning on the date that the credit for that component was

claimed or assigned. As used in this subsection, "proportionate

share" means the same percentage of the total of all credits for

the project that the qualified investment for the completed

component is of the total qualified investment stated in the

preapproval letter for the entire project.

     (11) When a project under this section is completed, the

taxpayer shall submit documentation that the project is completed,

an accounting of the cost of the project, the eligible investment

of each taxpayer if there is more than 1 taxpayer eligible for a

credit for the project, and, if the taxpayer is not the owner or

lessee of the eligible property on which the eligible investment

was made at the time the project is completed, that the taxpayer

was the owner or lessee of that eligible property when all eligible

investment of the taxpayer was made. The chairperson of the

Michigan economic growth authority or his or her designee, for

projects approved under subsection (2) or (3), or the Michigan

economic growth authority, for projects approved under subsection

(4), shall verify that the project is completed. The Michigan

economic growth authority shall conduct an on-site inspection as

part of the verification process for projects approved under

subsection (4). When the completion of the project is verified, a

certificate of completion shall be issued to each qualified

taxpayer that has made eligible investment on that eligible

property. The certificate of completion shall state the total

amount of all credits for the project and that total shall not

exceed the maximum total of all credits listed in the preapproval

letter for the project under subsection (2), (3), or (4) as

applicable and shall state all of the following:

     (a) That the taxpayer is a qualified taxpayer.

     (b) The total cost of the project and the eligible investment

of each qualified taxpayer.

     (c) Each qualified taxpayer's credit amount.

     (d) The qualified taxpayer's federal employer identification

number or the Michigan treasury number assigned to the taxpayer.

     (e) The project number.

     (f) For a project approved under subsection (4) for which the

total of all credits is more than $10,000,000.00 but $30,000,000.00

or less, the total of all credits and the schedule on which the

annual credit amount shall be claimed by the qualified taxpayer.

     (g) For a multiphase project under subsection (10), the amount

of each credit assigned and the amount of all credits claimed in

each tax year before the year in which the project is completed.

     (12) Except as otherwise provided in this section, qualified

taxpayers shall claim credits under this section in the tax year in

which the certificate of completion is issued. For a project

approved under subsection (4) for which the total of all credits is

more than $10,000,000.00 but $30,000,000.00 or less, the qualified

taxpayer shall claim 10% of its approved credit each year for 10

years. A credit assigned based on a multiphase project shall be

claimed in the year in which the credit is assigned.

     (13) The cost of eligible investment for leased machinery,

equipment, or fixtures is the cost of that property had the

property been purchased minus the lessor's estimate, made at the

time the lease is entered into, of the market value the property

will have at the end of the lease. A credit for property described

in this subsection is allowed only if the cost of that property had

the property been purchased and the lessor's estimate of the market

value at the end of the lease are provided to the Michigan economic

growth authority.

     (14) Credits claimed by a lessee of eligible property are

subject to the total of all credits limitation under this section.

     (15) Each qualified taxpayer and assignee under subsection

(20), (21), or (22) that claims a credit under this section shall

attach a copy of the certificate of completion and, if the credit

was assigned, a copy of the assignment form provided for under this

section to the annual return filed under this act on which the

credit under this section is claimed. An assignee of a credit based

on a multiphase project shall attach a copy of the assignment form

provided for under this section and the component completion

certificate provided for in subsection (10) to the annual return

filed under this act on which the credit is claimed but is not

required to file a copy of a certificate of completion.

     (16) Except as otherwise provided in this subsection or

subsection (10), (18), (20), (21), or (22), a credit under this

section shall be claimed in the tax year in which the certificate

of completion is issued to the qualified taxpayer. For a project

described in subsection (11)(f) for which a schedule for claiming

annual credit amounts is designated on the certificate of

completion by the Michigan economic growth authority, the annual

credit amount shall be claimed in the tax year specified on the

certificate of completion.

     (17) The credits approved under this section shall be

calculated after application of all other credits allowed under

this act. The credits under this section shall be calculated before

the calculation of the credit under section 431.

     (18) If Except as otherwise provided under this subsection, if

the credit allowed under this section for the tax year and any

unused carryforward of the credit allowed under this section exceed

the qualified taxpayer's or assignee's tax liability for the tax

year, that portion that exceeds the tax liability for the tax year

shall not be refunded but may be carried forward to offset tax

liability in subsequent tax years for 10 years or until used up,

whichever occurs first. Except as otherwise provided in this

subsection, the maximum time allowed under the carryforward

provisions under this subsection begins with the tax year in which

the certificate of completion is issued to the qualified taxpayer.

If the qualified taxpayer assigns all or any portion of its credit

approved under this section, the maximum time allowed under the

carryforward provisions for an assignee begins to run with the tax

year in which the assignment is made and the assignee first claims

a credit, which shall be the same tax year. The maximum time

allowed under the carryforward provisions for an annual credit

amount for a credit allowed under subsection (4) begins to run in

the tax year for which the annual credit amount is designated on

the certificate of completion issued under this section. A credit

carryforward available under section 38g of former 1975 PA 228 that

is unused at the end of the last tax year may be claimed against

the tax imposed under act for the years the carryforward would have

been available under former 1975 PA 228. Beginning on and after

January 1, 2008, if the credit allowed under this section for the

tax year exceeds the qualified taxpayer's tax liability for the tax

year, the qualified taxpayer may elect to have the excess refunded

at a rate equal to 75% of that portion of the credit that exceeds

the tax liability of the qualified taxpayer for the tax year and

forgo the remaining 25% of the credit and any carryforward.

     (19) If a project or credit under this section is for the

addition of personal property, if the cost of that personal

property is used to calculate a credit under this section, and if

the personal property is sold to a purchaser other than an assignee

under subsection (20) or disposed of or transferred from the

eligible property to any other location, the qualified taxpayer

that sold, disposed of that property, or transferred the personal

property shall add the same percentage as determined under

subsection (1) of the federal basis of the personal property used

for determining gain or loss as of the date of the sale,

disposition , or transfer to the qualified taxpayer's tax liability

under this act after application of all credits under this act for

the tax year in which the sale, disposition , or transfer occurs.

If a qualified taxpayer has an unused carryforward of a credit

under this section, the amount otherwise added under this

subsection to the qualified taxpayer's tax liability may instead be

used to reduce the qualified taxpayer's carryforward under

subsection (18).

     (20) For credits under this section for projects for which a

certificate of completion is issued before January 1, 2006 and

except as otherwise provided in this subsection, if a qualified

taxpayer pays or accrues eligible investment on or to an eligible

property that is leased for a minimum term of 10 years or sold to

another taxpayer for use in a business activity, the qualified

taxpayer may assign all or a portion of the credit under this

section based on that eligible investment to the lessee or

purchaser of that eligible property. A credit assignment under this

subsection shall only be made to a taxpayer that when the

assignment is complete will be a qualified taxpayer. All credit

assignments under this subsection are irrevocable and, except for a

credit based on a multiphase project, shall be made in the tax year

in which the certificate of completion is issued, unless the

assignee is an unknown lessee. If a qualified taxpayer wishes to

assign all or a portion of its credit to a lessee but the lessee is

unknown in the tax year in which the certificate of completion is

issued, the qualified taxpayer may delay claiming and assigning the

credit until the first tax year in which the lessee is known. A

qualified taxpayer may claim a portion of a credit and assign the

remaining credit amount. Except as otherwise provided in this

subsection, if the qualified taxpayer both claims and assigns

portions of the credit, the qualified taxpayer shall claim the

portion it claims in the tax year in which the certificate of

completion is issued or, for a credit assigned and claimed for a

multiphase project before a certificate of completion is issued,

the taxpayer shall claim the credit in the year in which the credit

is assigned. If a qualified taxpayer assigns all or a portion of

the credit and the eligible property is leased to more than 1

taxpayer, the qualified taxpayer shall determine the amount of

credit assigned to each lessee. A lessee shall not subsequently

assign a credit or any portion of a credit assigned under this

subsection. A purchaser may subsequently assign a credit or any

portion of a credit assigned to the purchaser under this subsection

to a lessee of the eligible property. The credit assignment under

this subsection shall be made on a form prescribed by the Michigan

economic growth authority. The qualified taxpayer shall send a copy

of the completed assignment form to the Michigan economic growth

authority in the tax year in which the assignment is made. The

assignee shall attach a copy of the completed assignment form to

its annual return required to be filed under this act, for the tax

year in which the assignment is made and the assignee first claims

a credit, which shall be the same tax year. In addition to all

other procedures under this subsection, the following apply if the

total of all credits for a project is more than $10,000,000.00 but

$30,000,000.00 or less:

     (a) The credit shall be assigned based on the schedule

contained in the certificate of completion.

     (b) If the qualified taxpayer assigns all or a portion of the

credit amount, the qualified taxpayer shall assign the annual

credit amount for each tax year separately.

     (c) More than 1 annual credit amount may be assigned to any 1

assignee and the qualified taxpayer may assign all or a portion of

each annual credit amount to any assignee.

     (d) The qualified taxpayer shall not assign more than the

annual credit amount for each tax year.

     (21) Except as otherwise provided in this subsection, for

projects for which a certificate of completion is issued before

January 1, 2006, and except as otherwise provided in this

subsection, if a qualified taxpayer is a partnership, limited

liability company, or subchapter S corporation, the qualified

taxpayer may assign all or a portion of a credit under this section

to its partners, members, or shareholders, based on their

proportionate share of ownership of the partnership, limited

liability company, or subchapter S corporation or based on an

alternative method approved by the Michigan economic growth

authority. A credit assignment under this subsection is irrevocable

and, except for a credit assignment based on a multiphase project,

shall be made in the tax year in which a certificate of completion

is issued. A qualified taxpayer may claim a portion of a credit and

assign the remaining credit amount. Except as otherwise provided in

this subsection, if the qualified taxpayer both claims and assigns

portions of the credit, the qualified taxpayer shall claim the

portion it claims in the tax year in which a certificate of

completion is issued or for a credit assigned and claimed for a

multiphase project, before the component completion certificate is

issued, the taxpayer shall claim the credit in the year in which

the credit is assigned. A partner, member, or shareholder that is

an assignee shall not subsequently assign a credit or any portion

of a credit assigned under this subsection. The credit assignment

under this subsection shall be made on a form prescribed by the

Michigan economic growth authority. The qualified taxpayer shall

send a copy of the completed assignment form to the Michigan

economic growth authority in the tax year in which the assignment

is made. A partner, member, or shareholder who is an assignee shall

attach a copy of the completed assignment form to its annual return

required under this act, for the tax year in which the assignment

is made and the assignee first claims a credit, which shall be the

same tax year. A credit assignment based on a credit for a

component of a multiphase project that is completed before January

1, 2006 shall be made under this subsection. In addition to all

other procedures under this subsection, the following apply if the

total of all credits for a project is more than $10,000,000.00 but

$30,000,000.00 or less:

     (a) The credit shall be assigned based on the schedule

contained in the certificate of completion.

     (b) If the qualified taxpayer assigns all or a portion of the

credit amount, the qualified taxpayer shall assign the annual

credit amount for each tax year separately.

     (c) More than 1 annual credit amount may be assigned to any 1

assignee and the qualified taxpayer may assign all or a portion of

each annual credit amount to any assignee.

     (d) The qualified taxpayer shall not assign more than the

annual credit amount for each tax year.

     (22) For projects approved under this section or section 38g

of former 1975 PA 228 for which a certificate of completion is

issued on and after January 1, 2006, a qualified taxpayer may

assign all or a portion of a credit allowed under this section or

section 38g(2), (3), or (33) of former 1975 PA 228 under this

subsection. A credit assignment under this subsection is

irrevocable and, except for a credit assignment based on a

multiphase project, shall be made in the tax year in which a

certificate of completion is issued unless the assignee is an

unknown lessee. If a qualified taxpayer wishes to assign all or a

portion of its credit to a lessee but the lessee is unknown in the

tax year in which the certificate of completion is issued, the

qualified taxpayer may delay claiming and assigning the credit

until the first tax year in which the lessee is known. A qualified

taxpayer may claim a portion of a credit and assign the remaining

credit amount. If the qualified taxpayer both claims and assigns

portions of the credit, the qualified taxpayer shall claim the

portion it claims in the tax year in which a certificate of

completion is issued pursuant to this section or section 38g of

former 1975 PA 228. An assignee may subsequently assign a credit or

any portion of a credit assigned under this subsection to 1 or more

assignees. An assignment under this subsection of a credit allowed

under section 38g(2), (3), or (33) of former 1975 PA 228 shall not

be made after 10 years after the first tax year in which that

credit under section 38g(2), (3), or (33) of former 1975 PA 228 may

be claimed. The credit assignment or a subsequent reassignment

under this subsection shall be made on a form prescribed by the

Michigan economic growth authority. The qualified taxpayer shall

send a copy of the completed assignment form to the Michigan

economic growth authority in the tax year in which an assignment or

reassignment is made. The Michigan economic growth authority or its

designee shall review and issue a completed assignment or

reassignment certificate to the assignee or reassignee. An assignee

or subsequent reassignee shall attach a copy of the completed

assignment form certificate to its annual return required under

this act, for the tax year in which the assignment or reassignment

is made and the assignee or reassignee first claims a credit, which

shall be the same tax year. A credit assignment based on a credit

for a component of a multiphase project that is completed before

January 1, 2006 shall be made under section 38g(18) of former 1975

PA 228. A credit assignment based on a credit for a component of a

multiphase project that is completed on or after January 1, 2006

may be made under this section. In addition to all other procedures

and requirements under this section, the following apply if the

total of all credits for a project is more than $10,000,000.00 but

$30,000,000.00 or less:

     (a) The credit shall be assigned based on the schedule

contained in the certificate of completion.

     (b) If the qualified taxpayer assigns all or a portion of the

credit amount, the qualified taxpayer shall assign the annual

credit amount for each tax year separately.

     (c) More than 1 annual credit amount may be assigned to any 1

assignee, and the qualified taxpayer may assign all or a portion of

each annual credit amount to any assignee.

     (23) A qualified taxpayer or assignee under subsection (20),

(21), or (22) shall not claim a credit under subsection (1)(a) or

(b) based on eligible investment on which a credit claimed under

section 38d of former 1975 PA 228 was based.

     (24) The Michigan economic growth authority may certify a

credit under this section based on an agreement entered into prior

to January 1, 2008 pursuant to section 38g of former 1975 PA 228.

The number of years for which the credit under this subsection may

be claimed under this act shall equal the maximum number of years

designated in the agreement reduced by the number of years for

which a credit had been claimed or could have been claimed under

section 38g of former 1975 PA 228. When reviewing an application

for a project for designation as an urban development area project,

the Michigan economic growth authority for projects approved under

subsection (4) or the chairperson of the Michigan economic growth

authority or his or her designee for projects approved under

subsections (2) and (3) shall consider all of the following

criteria:

     (a) If the project increases the density of the area by

promoting multistory development.

     (b) If the project promotes mixed-use development and walkable

communities.

     (c) If the project promotes sustainable redevelopment.

     (d) If the project addresses areawide redevelopment and

includes multiple parcels of property.

     (e) If the project addresses underserved markets of commerce.

     (f) Any other criteria determined by the Michigan economic

growth authority or the chairperson of the Michigan economic growth

authority.

     (25) An eligible taxpayer that claims a credit under this

section is not prohibited from claiming a credit under section 431.

However, the eligible taxpayer shall not claim a credit under this

section and section 431 based on the same costs.

     (26) Eligible investment attributable or related to the

operation of a professional sports stadium, and eligible investment

that is associated or affiliated with the operation of a

professional sports stadium, including, but not limited to, the

operation of a parking lot or retail store, shall not be used as a

basis for a credit under this section. Professional sports stadium

does not include a professional sports stadium that will no longer

be used by a professional sports team on and after the date that an

application related to that professional sports stadium is filed

under this section.

     (27) Eligible investment attributable or related to the

operation of a casino, and eligible investment that is associated

or affiliated with the operation of a casino, including, but not

limited to, the operation of a parking lot, hotel, motel, or retail

store, shall not be used as a basis for a credit under this

section. As used in this subsection, "casino" means a casino

regulated by this state pursuant to the Michigan gaming control and

revenue act, the Initiated Law of 1996 IL 1, MCL 432.201 to

432.226.

     (28) Eligible investment attributable or related to the

construction of a new landfill or the expansion of an existing

landfill regulated under part 115 of the natural resources and

environmental protection act, 1994 PA 451, MCL 324.11501 to

324.11550, shall not be used as a basis for a credit under this

section.

     (29) The Michigan economic growth authority annually shall

prepare and submit to the house of representatives and senate

committees responsible for tax policy and economic development

issues a report on the credits under subsection subsections (2),

(3), and (4). The report shall include, but is not limited to, all

of the following:

     (a) A listing of the projects under subsection subsections

(2), (3), and (4) that were approved in the calendar year.

     (b) The total amount of eligible investment for projects

approved under subsection subsections (2), (3), and (4) in the

calendar year.

     (30) For purposes of this section, taxpayer includes a person

subject to the tax imposed under chapters 2A and 2B.

     (31) The total of all credits for all projects approved under

subsection (2) or (3) shall not exceed $40,000,000.00 in any

calendar year. If the authority approves a total of all credits for

all projects under subsection (2) or (3) of less than

$40,000,000.00 in a calendar year, the authority may carry forward

for 1 year only the difference between $40,000,000.00 and the total

of all credits for all projects under this subsection approved in

the immediately preceding calendar year.

(32) (31) As used in this section:

     (a) "Annual credit amount" means the maximum amount that a

qualified taxpayer is eligible to claim each tax year for a project

for which the total of all credits is more than $10,000,000.00 but

$30,000,000.00 or less, which shall be 10% of the qualified

taxpayer's credit amount approved under subsection (3) (4).

     (b) "Authority" means a brownfield redevelopment authority

created under the brownfield redevelopment financing act, 1996 PA

381, MCL 125.2651 to 125.2672.

     (c) "Authorized business", "full-time job", "new capital

investment", "qualified high-technology business", "retained jobs",

and "written agreement" mean those terms as defined in the Michigan

economic growth authority act, 1995 PA 24, MCL 207.801 to 207.810.

(c) (d) "Blighted", "brownfield plan", "eligible activities",

"facility", "functionally obsolete", "qualified local governmental

unit", and "response activity" mean those terms as defined in the

brownfield redevelopment financing act, 1996 PA 381, MCL 125.2651

to 125.2672.

(d) (e) "Eligible investment" means, after the date that the

preapproval letter is issued, any demolition, construction,

restoration, alteration, renovation, or improvement of buildings or

site improvements on eligible property and the addition of

machinery, equipment, and fixtures to eligible property after the

date that eligible activities on that eligible property have

started pursuant to a brownfield plan under the brownfield

redevelopment financing act, 1996 PA 381, MCL 125.2651 to 125.2672,

and after the date that the preapproval letter is issued, if the

costs of the eligible investment are not otherwise reimbursed to

the taxpayer or paid for on behalf of the taxpayer from any source

other than the taxpayer. The addition of leased machinery,

equipment, or fixtures to eligible property by a lessee of the

machinery, equipment, or fixtures is eligible investment if the

lease of the machinery, equipment, or fixtures has a minimum term

of 10 years or is for the expected useful life of the machinery,

equipment, or fixtures, and if the owner of the machinery,

equipment, or fixtures is not the qualified taxpayer with regard to

that machinery, equipment, or fixtures. For projects approved after

January 1, 2008, eligible investment does not include certain soft

costs of the eligible investment as determined by the Michigan

economic growth authority, including, but not limited to, developer

fees, appraisals, performance bonds, closing costs, bank fees, loan

fees, risk contingencies, financing costs, permanent or

construction period interest, legal expenses, leasing or sales

commissions, marketing costs, professional fees, shared savings,

taxes, title insurance, bank inspection fees, insurance, and

project management fees.

(e) (f) "Eligible property", except as otherwise provided

under subsection (33), means that term as defined in the brownfield

redevelopment financing act, 1996 PA 381, MCL 125.2651 to 125.2672,

except that, for purposes of subsection (2), all of the following

apply:

     (i) Eligible property means property identified under a

brownfield plan that was used or is currently used for commercial,

industrial, or residential purposes and that is 1 of the following:

     (A) Property for which eligible activities are identified

under the brownfield plan, is in a qualified local governmental

unit, and is a facility, functionally obsolete, or blighted.

     (B) Property that is not in a qualified local governmental

unit but is within a downtown development district established

under 1975 PA 197, MCL 125.1651 to 125.1681, and is functionally

obsolete or blighted, and a component of the project on that

eligible property is 1 or more of the following:

     (I) Infrastructure improvements that directly benefit the

eligible property.

     (II) Demolition of structures that is not response activity

under section 20101 of the natural resources and environmental

protection act, 1994 PA 451, MCL 324.20101.

     (III) Lead or asbestos abatement.

     (IV) Site preparation that is not response activity under

section 20101 of the natural resources and environmental protection

act, 1994 PA 451, MCL 324.20101.

     (C) Property for which eligible activities are identified

under the brownfield plan, is not in a qualified local governmental

unit, and is a facility.

     (ii) Eligible property includes parcels that are adjacent or

contiguous to the eligible property if the development of the

adjacent or contiguous parcels is estimated to increase the

captured taxable value of the property or tax reverted property

owned or under the control of a land bank fast track authority

pursuant to the land bank fast track authority act, 2003 PA 258,

MCL 124.751 to 124.774.

     (iii) Eligible property includes, to the extent included in the

brownfield plan, personal property located on the eligible

property.

     (iv) Eligible property does not include qualified agricultural

property exempt under section 7ee of the general property tax act,

1893 PA 206, MCL 211.7ee, from the tax levied by a local school

district for school operating purposes to the extent provided under

section 1211 of the revised school code, 1976 PA 451, MCL 380.1211.

property for which eligible activities are identified under a

brownfield plan that was used or is currently used for commercial,

industrial, or residential purposes, including personal property

located on the property, to the extent included in the brownfield

plan, and that is 1 or more of the following:

     (i) Is in a qualified local governmental unit and is a

facility, functionally obsolete, or blighted and includes parcels

that are adjacent or contiguous to that property if the development

of the adjacent and contiguous parcels is estimated to increase the

captured taxable value of that property.

     (ii) Is not in a qualified local governmental unit and is a

facility, and includes parcels that are adjacent or contiguous to

that property if the development of the adjacent and contiguous

parcels is estimated to increase the captured taxable value of that

property.

     (iii) Is tax reverted property owned or under the control of a

land bank fast track authority.

(f) (g) "Last tax year" means the taxpayer's tax year under

former 1975 PA 228 that begins after December 31, 2006 and before

January 1, 2008.

(g) (h) "Michigan economic growth authority" means the

Michigan economic growth authority created in the Michigan economic

growth authority act, 1995 PA 24, MCL 207.801 to 207.810.

(h) (i) "Multiphase project" means a project approved under

this section that has more than 1 component, each of which can be

completed separately.

(i) (j) "Personal property" means that term as defined in

section 8 of the general property tax act, 1893 PA 206, MCL 211.8,

except that personal property does not include either of the

following:

     (i) Personal property described in section 8(h), (i), or (j) of

the general property tax act, 1893 PA 206, MCL 211.8.

     (ii) Buildings described in section 14(6) of the general

property tax act, 1893 PA 206, MCL 211.14.

(j) (k) "Project" means the total of all eligible investment

on an eligible property or, for purposes of subsection (6)(b), 1 of

the following:

     (i) All eligible investment on property not in a qualified

local governmental unit that is a facility.

     (ii) All eligible investment on property that is not a facility

but is functionally obsolete or blighted.

(k) (l) "Qualified local governmental unit" means that term as

defined in the obsolete property rehabilitation act, 2000 PA 146,

MCL 125.2781 to 125.2797.

(l) (m) "Qualified taxpayer" means a taxpayer that meets both

of the following criteria:

     (i) Owns or leases eligible property.

     (ii) Certifies that, except as otherwise provided in this

subparagraph, the department of environmental quality has not sued

or issued a unilateral order to the taxpayer pursuant to part 201

of the natural resources and environmental protection act, 1994 PA

451, MCL 324.20101 to 324.20142, to compel response activity on or

to the eligible property, or expended any state funds for response

activity on or to the eligible property and demanded reimbursement

for those expenditures from the qualified taxpayer. However, if the

taxpayer has completed all response activity required by part 201

of the natural resources and environmental protection act, 1994 PA

451, MCL 324.20101 to 324.20142, is in compliance with any deed

restriction or administrative or judicial order related to the

required response activity, and has reimbursed the state for all

costs incurred by the state related to the required response

activity, the taxpayer meets the criteria under this subparagraph.

     (m) "Urban development area project" means a project located

on eligible property in the downtown or traditional central

business district of a qualified local governmental unit or along a

historic commercial corridor of a qualified local governmental unit

as determined by the Michigan economic growth authority or the

chairperson of the Michigan economic growth authority or his or her

designee.

     (33) For purposes of subsection (2), eligible property means

that term as defined under subsection (32)(e) except that all of

the following apply:

(a) Eligible property means property identified under a

brownfield plan that was used or is currently used for commercial,

industrial, or residential purposes and that is 1 of the following:

(i) Property for which eligible activities are identified under

the brownfield plan, is in a qualified local governmental unit, and

is a facility, functionally obsolete, or blighted.

(ii) Property that is not in a qualified local governmental

unit but is within a downtown development district established

under 1975 PA 197, MCL 125.1651 to 125.1681, and is functionally

obsolete or blighted, and a component of the project on that

eligible property is 1 or more of the following:

(A) Infrastructure improvements that directly benefit the

eligible property.

(B) Demolition of structures that is not response activity

under section 20101 of the natural resources and environmental

protection act, 1994 PA 451, MCL 324.20101.

(C) Lead or asbestos abatement.

(D) Site preparation that is not response activity under

section 20101 of the natural resources and environmental protection

act, 1994 PA 451, MCL 324.20101.

(iii) Property for which eligible activities are identified

under the brownfield plan, is not in a qualified local governmental

unit, and is a facility.

(b) Eligible property includes parcels that are adjacent or

contiguous to the eligible property if the development of the

adjacent or contiguous parcels is estimated to increase the

captured taxable value of the property or tax reverted property

owned or under the control of a land bank fast track authority

pursuant to the land bank fast track authority act, 2003 PA 258,

MCL 124.751 to 124.774.

(c) Eligible property includes, to the extent included in the

brownfield plan, personal property located on the eligible

property.

(d) Eligible property does not include qualified agricultural

property exempt under section 7ee of the general property tax act,

1893 PA 206, MCL 211.7ee, from the tax levied by a local school

district for school operating purposes to the extent provided under

section 1211 of the revised school code, 1976 PA 451, MCL 380.1211.

     Enacting section 1. This amendatory act takes effect January

1, 2008.