HOUSE BILL No. 6153

May 22, 2008, Introduced by Rep. Opsommer and referred to the Committee on Tax Policy.

A bill to amend 2007 PA 36, entitled

"Michigan business tax act,"

by amending sections 403, 431, 433, 435, and 437 (MCL 208.1403,

208.1431, 208.1433, 208.1435, and 208.1437), section 403 as amended

by 2007 PA 145, section 431 as amended by 2008 PA 111, section 433

as amended by 2007 PA 215, section 435 as amended by 2007 PA 216,

and section 437 as amended by 2008 PA 89; and to repeal acts and

parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 403. (1) Notwithstanding any other provision in this act,

the credits provided in this section shall be taken before any

other credit under this act. For the 2008 tax year, the total

combined credit allowed under this section shall not exceed 50% of

the tax liability imposed under this act before the imposition and

levy of the surcharge under section 281. For the 2009 tax year and

each tax year after 2009, the total combined credit allowed under

this section shall not exceed 52% of the tax liability imposed

under this act before the imposition and levy of the surcharge

under section 281.

(2) Subject to the limitation in subsection (1), for the 2008

tax year a taxpayer may claim a credit against the tax imposed by

this act equal to 0.296% of the taxpayer's compensation in this

state. For the 2009 tax year and each tax year after 2009, subject

to the limitation in subsection (1), a taxpayer may claim a credit

against the tax imposed by this act equal to 0.370% of the

taxpayer's compensation in this state. ~~For purposes of this~~

~~subsection, a taxpayer includes a person subject to the tax imposed~~

~~under chapter 2A and a person subject to the tax imposed under~~

~~chapter 2B.~~ A professional employer organization shall not include

payments by the professional employer organization to the officers

and employees of a client of the professional employer organization

whose employment operations are managed by the professional

employer organization. A client may include payments by the

professional employer organization to the officers and employees of

the client whose employment operations are managed by the

professional employer organization.

(3) Subject to the limitation in subsection (1), for the 2008

tax year a taxpayer may claim a credit against the tax imposed by

this act equal to 2.32% multiplied by the result of subtracting the

sum of the amounts calculated under subdivisions (d), (e), and (f)

from the sum of the amounts calculated under subdivisions (a), (b),

and (c). Subject to the limitation in subsection (1), for the 2009

tax year and each tax year after 2009, a taxpayer may claim a

credit against the tax imposed by this act equal to 2.9% multiplied

by the result of subtracting the sum of the amounts calculated

under subdivisions (d), (e), and (f) from the sum of the amounts

calculated under subdivisions (a), (b), and (c):

(a) Calculate the cost, including fabrication and

installation, paid or accrued in the taxable year of tangible

assets of a type that are, or under the internal revenue code will

become, eligible for depreciation, amortization, or accelerated

capital cost recovery for federal income tax purposes, provided

that the assets are physically located in this state for use in a

business activity in this state and are not mobile tangible assets.

(b) Calculate the cost, including fabrication and

installation, paid or accrued in the taxable year of mobile

tangible assets of a type that are, or under the internal revenue

code will become, eligible for depreciation, amortization, or

accelerated capital cost recovery for federal income tax purposes.

This amount shall be multiplied by the apportionment factor for the

tax year as prescribed in chapter 3.

purchased or acquired for use outside of this state in a tax year

beginning after December 31, 2007 and subsequently transferred into

this state and purchased or acquired for use in a business

activity, calculate the federal basis used for determining gain or

loss as of the date the tangible assets were physically located in

this state for use in a business activity plus the cost of

fabrication and installation of the tangible assets in this state.

(d) If the cost of tangible assets described in subdivision

(a) was paid or accrued in a tax year beginning after December 31,

2007, or before December 31, 2007 to the extent the credit is used

and at the rate at which the credit was used under former 1975 PA

228 or this act, calculate the gross proceeds or benefit derived

from the sale or other disposition of the tangible assets minus the

gain, multiplied by the apportionment factor for the taxable year

as prescribed in chapter 3, and plus the loss, multiplied by the

apportionment factor for the taxable year as prescribed in chapter

3 from the sale or other disposition reflected in federal taxable

income and minus the gain from the sale or other disposition added

to the business income tax base in section 201.

(e) If the cost of tangible assets described in subdivision

(b) was paid or accrued in a tax year beginning after December 31,

2007, or before December 31, 2007 to the extent the credit is used

and at the rate at which the credit was used under former 1975 PA

228 or this act, calculate the gross proceeds or benefit derived

from the sale or other disposition of the tangible assets minus the

gain and plus the loss from the sale or other disposition reflected

in federal taxable income and minus the gain from the sale or other

disposition added to the business income tax base in section 201.

This amount shall be multiplied by the apportionment factor for the

tax year as prescribed in chapter 3.

(f) For assets purchased or acquired in a tax year beginning

after December 31, 2007, or before December 31, 2007 to the extent

the credit is used and at the rate at which the credit was used

under former 1975 PA 228 or this act, that were eligible for a

credit under subdivision (a) or (c) and that were transferred out

of this state, calculate the federal basis used for determining

gain or loss as of the date of the transfer.

(4) For a tax year in which the amount of the credit

calculated under subsection (3) is negative, the absolute value of

that amount is added to the taxpayer's tax liability for the tax

year.

(5) A taxpayer that claims a credit under this section is not

prohibited from claiming a credit under section 405. However, the

taxpayer shall not claim a credit under this section and section

405 based on the same costs and expenses.

Sec. 431. (1) Except as otherwise provided under this

subsection, for a period of time not to exceed 20 years as

determined by the Michigan economic growth authority, a taxpayer

that is an authorized business may claim a credit against the tax

imposed by this act equal to the amount certified each year by the

Michigan economic growth authority as follows:

(a) Except as otherwise provided under this subdivision, for

an authorized business for the tax year, an amount not to exceed

the payroll of the authorized business attributable to employees

who perform qualified new jobs as determined under the Michigan

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

multiplied by the tax rate; beginning after ~~the effective date of~~

~~the amendatory act that added subdivision (d)~~ April 28, 2008, for

an authorized business for the tax year, an amount not to exceed

the sum of the payroll and health care benefits of the authorized

business attributable to employees who perform qualified new jobs

as determined under the Michigan economic growth authority act,

1995 PA 24, MCL 207.801 to 207.810, multiplied by the tax rate.

(b) For an eligible business as determined under section

8(5)(a) of the Michigan economic growth authority act, 1995 PA 24,

MCL 207.808, an amount not to exceed 50% of the payroll of the

authorized business attributable to employees who perform retained

jobs as determined under the Michigan economic growth authority

act, 1995 PA 24, MCL 207.801 to 207.810, multiplied by the tax rate

for the tax year.

8(5)(b) of the Michigan economic growth authority act, 1995 PA 24,

MCL 207.808, an amount not to exceed the payroll of the authorized

business attributable to employees who perform retained jobs as

determined under the Michigan economic growth authority act, 1995

PA 24, MCL 207.801 to 207.810, multiplied by the tax rate for the

tax year.

(d) For an authorized business that is a qualified high-

technology business, for a period of time not to exceed 7 years as

determined by the Michigan economic growth authority, an amount not

to exceed 200% of the sum of the payroll and health care benefits

of the qualified high-technology business attributable to employees

who perform qualified new jobs as determined under the Michigan

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

for the first 3 tax years of the credit, multiplied by the tax rate

and, for each of the remaining tax years of the credit, an amount

not to exceed 100% of the sum of the payroll and health care

benefits of the qualified high-technology business attributable to

employees who perform qualified new jobs as determined under the

Michigan economic growth authority act, 1995 PA 24, MCL 207.801 to

207.810, multiplied by the tax rate.

(e) For an authorized business as determined under section

8(9) of the Michigan economic growth authority act, 1995 PA 24, MCL

207.808, an amount up to, but not to exceed 100% of, the sum of the

payroll and health care benefits of the authorized business

attributable to employees who perform retained jobs multiplied by a

fraction, the numerator of which is the amount of new capital

investment made at the facility and the denominator of which is the

product of the number of retained jobs multiplied by $100,000.00,

and then multiplied by the tax rate for the tax year.

(f) For an authorized business as determined under section

8(11) of the Michigan economic growth authority act, 1995 PA 24,

MCL 207.808, an amount not to exceed 100% of the sum of the payroll

and health care benefits of the authorized business attributable to

employees who perform new full-time jobs and retained jobs as

determined under the Michigan economic growth authority act, 1995

PA 24, MCL 207.801 to 207.810, multiplied by the tax rate for the

tax year.

(2) A taxpayer shall not claim a credit under this section

unless the Michigan economic growth authority has issued a

certificate to the taxpayer. The taxpayer shall attach the

certificate to the annual return filed under this act on which a

credit under this section is claimed.

(3) The certificate required by subsection (2) shall state all

of the following:

(a) The taxpayer is an authorized business.

(b) The amount of the credit under this section for the

authorized business for the designated tax year.

the Michigan department of treasury number assigned to the

taxpayer.

(4) 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 37c of former 1975 PA 228.

The number of years for which the credit may be claimed under this

section shall equal the maximum number of years designated in the

resolution reduced by the number of years for which a credit has

been claimed or could have been claimed under section 37c of former

1975 PA 228.

(5) If the credit allowed under this section exceeds the tax

liability of the taxpayer for the tax year, that portion of the

credit that exceeds the tax liability of the taxpayer shall be

refunded.

(6) Except as otherwise provided under this subsection, a

taxpayer that claims a credit under subsection (1) or section 37c

or 37d of former 1975 PA 228, that has an agreement with the

Michigan economic growth authority based on qualified new jobs as

defined in section ~~3(p)(~~ii) 3(q)(ii) of the Michigan economic growth

authority act, 1995 PA 24, MCL 207.803, and that removes from this

state 51% or more of those qualified new jobs within 3 years after

the first year in which the taxpayer claims a credit described in

this subsection shall pay to the department no later than 12 months

after those qualified new jobs are removed from the state an amount

equal to the total of all credits described in this subsection that

were claimed by the taxpayer. Beginning after ~~the effective date of~~

~~the amendatory act that added subsection (1)(d)~~ April 28, 2008, a

taxpayer that claims a credit under subsection (1) and subsequently

fails to meet the requirements of this section or any other

conditions included in an agreement entered into with the Michigan

economic growth authority in order to obtain a certificate for the

credit claimed under this section or removes any of the qualified

new jobs from this state during the term of the written agreement

and for a period of years after the term of the written agreement,

as determined by the Michigan economic growth authority, may have

its credit reduced or terminated or have a percentage of the credit

amount previously claimed under this section added back to the tax

liability of the taxpayer in the tax year that the taxpayer fails

to comply with this section or the agreement.

(7) If the Michigan economic growth authority or a designee of

the Michigan economic growth authority requests that a taxpayer

that claims the credit under this section get a statement prepared

by a certified public accountant verifying that the actual number

of new jobs created is the same number of new jobs used to

calculate the credit under this section, the taxpayer shall get the

statement and attach that statement to its annual return under this

act on which the credit under this section is claimed.

(8) A credit shall not be claimed by a taxpayer under this

section if the taxpayer's initial certification as required in

subsection (3) is issued after December 31, 2013.

~~(9) For purposes of this section, taxpayer includes a person~~

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

(9) ~~(10)~~ As used in this section:

(a) "Authorized business", "facility", "full-time job",

"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.

(b) "Health care benefits" means all costs paid for a self-

funded health care benefit plan or for an expense-incurred

hospital, medical, or surgical policy or certificate, nonprofit

health care corporation certificate, or health maintenance

organization contract. Health care benefit does not include

accident-only, credit, dental, or disability income insurance;

long-term care insurance; coverage issued as a supplement to

liability insurance; coverage only for a specified disease or

illness; worker's compensation or similar insurance; or automobile

medical payment insurance.

economic growth authority created in the Michigan economic growth

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

(d) "Payroll" means the total salaries and wages before

deducting any personal or dependency exemptions.

(e) "Qualified new jobs" means 1 or more of the following:

(i) The average number of full-time jobs at a facility of an

authorized business for a tax year in excess of the average number

of full-time jobs the authorized business maintained in this state

prior to the expansion or location as that is determined under the

Michigan economic growth authority act, 1995 PA 24, MCL 207.801 to

207.810.

(ii) The average number of full-time jobs at a facility created

by an eligible business up to 90 days before becoming an authorized

business that is in excess of the average number of full-time jobs

that the business maintained in this state up to 90 days before

becoming an authorized business, as determined under the Michigan

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

(f) "Tax rate" means the rate imposed under section 51 of the

income tax act of 1967, 1967 PA 281, MCL 206.51, for the tax year

in which the tax year of the taxpayer for which the credit is being

computed begins.

Sec. 433. (1) A taxpayer that is a business located and

conducting business activity within a renaissance zone may claim a

credit against the tax imposed by this act for the tax year to the

extent and for the duration provided pursuant to the Michigan

renaissance zone act, 1996 PA 376, MCL 125.2681 to 125.2696, equal

to the lesser of the following:

(a) The tax liability attributable to business activity

conducted within a renaissance zone in the tax year.

(b) Ten percent of adjusted services performed in a designated

renaissance zone.

a renaissance zone before December 31, 2002, the product of the

following:

(i) The credit claimed under section 39b of former 1975 PA 228

for the tax year ending in 2007.

(ii) The ratio of the taxpayer's payroll in this state in the

tax year divided by the taxpayer's payroll in this state in its tax

year ending in 2007 under former 1975 PA 228.

(iii) The ratio of the taxpayer's renaissance zone business

activity factor for the tax year divided by the taxpayer's

renaissance zone business activity factor for its tax year ending

in 2007 under section 39b of former 1975 PA 228.

(2) Any portion of the taxpayer's tax liability that is

attributable to illegal activity conducted in the renaissance zone

shall not be used to calculate a credit under this section.

(3) The credit allowed under this section continues through

the tax year in which the renaissance zone designation expires.

(4) If the amount of the credit allowed under this section

exceeds the tax liability of the taxpayer for the tax year, that

portion of the credit that exceeds the tax liability shall not be

refunded.

(5) A taxpayer that claims a credit under this section shall

not employ, pay a speaker fee to, or provide any remuneration,

compensation, or consideration to any person employed by the state,

the state administrative board created in 1921 PA 2, MCL 17.1 to

17.3, or the renaissance zone review board created in 1996 PA 376,

MCL 125.2681 to 125.2696, whose employment relates or related in

any way to the authorization or enforcement of the credit allowed

under this section for any year in which the taxpayer claims a

credit under this section and for the 3 years after the last year

that a credit is claimed.

(6) To be eligible for the credit allowed under this section,

an otherwise qualified taxpayer shall file an annual return under

this act in a format determined by the department.

(7) Any portion of the taxpayer's tax liability that is

attributable to business activity related to the operation of a

casino, and business activity 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 to calculate a credit under this section.

~~(8) For purposes of this section, taxpayer includes a person~~

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

(8) ~~(9)~~ As used in this section:

(a) "Adjusted services performed in a designated renaissance

zone" means either of the following:

(i) Except as provided in subparagraph (ii), the sum of the

taxpayer's payroll for services performed in a designated

renaissance zone plus an amount equal to the amount deducted in

arriving at federal taxable income for the tax year for

depreciation, amortization, or immediate or accelerated write-off

for tangible property exempt under section 7ff of the general

property tax act, 1893 PA 206, MCL 211.7ff, in the tax year or, for

new property, in the immediately following tax year.

(ii) For a partnership, limited liability company, S

corporation, or individual, the amount determined under

subparagraph (i) plus the product of the following as related to the

taxpayer if greater than zero:

(A) Business income.

(B) The ratio of the taxpayer's total sales in this state

during the tax year divided by the taxpayer's total sales

everywhere during the tax year.

(b) "Casino" means a casino regulated by this state pursuant

to the Michigan gaming control and revenue act, 1996 IL 1, MCL

432.201 to 432.226.

to, or exempt from, the collection of taxes under the general

property tax act, 1893 PA 206, MCL 211.1 to ~~211.157~~ 211.155, and

has not been subject to, or exempt from, ad valorem property taxes

levied in another state, except that receiving an exemption as

inventory property does not disqualify property.

(d) "Payroll" means total salaries and wages before deducting

any personal or dependency exemptions.

(e) "Renaissance zone" means that term as defined in the

Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to

125.2696.

(f) "Renaissance zone business activity factor" means a

fraction, the numerator of which is the ratio of the average value

of the taxpayer's property located in a designated renaissance zone

to the average value of the taxpayer's property in this state plus

the ratio of the taxpayer's payroll for services performed in a

designated renaissance zone to all of the taxpayer's payroll in

this state and the denominator of which is 2.

(g) "Tax liability attributable to business activity conducted

within a renaissance zone" means the taxpayer's tax liability

multiplied by the renaissance zone business activity factor.

Sec. 435. (1) A qualified taxpayer with a rehabilitation plan

certified after December 31, 2007 or a qualified taxpayer that has

a rehabilitation plan certified before January 1, 2008 under

section 39c of former 1975 PA 228 for the rehabilitation of an

historic resource for which a certification of completed

rehabilitation has been issued after the end of the taxpayer's last

tax year may credit against the tax imposed by this act the amount

determined pursuant to subsection (2) for the qualified

expenditures for the rehabilitation of an historic resource

pursuant to the rehabilitation plan in the year in which the

certification of completed rehabilitation of the historic resource

is issued provided that the certification of completed

rehabilitation was issued not more than 5 years after the

rehabilitation plan was certified by the Michigan historical

center.

(2) The credit allowed under this section shall be 25% of the

qualified expenditures that are eligible for the credit under

section 47(a)(2) of the internal revenue code if the taxpayer is

eligible for the credit under section 47(a)(2) of the internal

revenue code or, if the taxpayer is not eligible for the credit

under section 47(a)(2) of the internal revenue code, 25% of the

qualified expenditures that would qualify under section 47(a)(2) of

the internal revenue code except that the expenditures are made to

an historic resource that is not eligible for the credit under

section 47(a)(2) of the internal revenue code, subject to both of

the following:

(a) A taxpayer with qualified expenditures that are eligible

for the credit under section 47(a)(2) of the internal revenue code

may not claim a credit under this section for those qualified

expenditures unless the taxpayer has claimed and received a credit

for those qualified expenditures under section 47(a)(2) of the

internal revenue code.

(b) A credit under this section shall be reduced by the amount

of a credit received by the taxpayer for the same qualified

expenditures under section 47(a)(2) of the internal revenue code.

(3) To be eligible for the credit under this section, the

taxpayer shall apply to and receive from the Michigan historical

center certification that the historic significance, the

rehabilitation plan, and the completed rehabilitation of the

historic resource meet the criteria under subsection (6) and either

of the following:

(a) All of the following criteria:

(i) The historic resource contributes to the significance of

the historic district in which it is located.

(ii) Both the rehabilitation plan and completed rehabilitation

of the historic resource meet the federal secretary of the

interior's standards for rehabilitation and guidelines for

rehabilitating historic buildings, 36 CFR part 67.

(iii) All rehabilitation work has been done to or within the

walls, boundaries, or structures of the historic resource or to

historic resources located within the property boundaries of the

property.

(b) The taxpayer has received certification from the national

park service that the historic resource's significance, the

rehabilitation plan, and the completed rehabilitation qualify for

the credit allowed under section 47(a)(2) of the internal revenue

code.

(4) If a qualified taxpayer is eligible for the credit allowed

under section 47(a)(2) of the internal revenue code, the qualified

taxpayer shall file for certification with the center to qualify

for the credit allowed under section 47(a)(2) of the internal

revenue code. If the qualified taxpayer has previously filed for

certification with the center to qualify for the credit allowed

under section 47(a)(2) of the internal revenue code, additional

filing for the credit allowed under this section is not required.

(5) The center may inspect an historic resource at any time

during the rehabilitation process and may revoke certification of

completed rehabilitation if the rehabilitation was not undertaken

as represented in the rehabilitation plan or if unapproved

alterations to the completed rehabilitation are made during the 5

years after the tax year in which the credit was claimed. The

center shall promptly notify the department of a revocation.

(6) Qualified expenditures for the rehabilitation of an

historic resource may be used to calculate the credit under this

section if the historic resource meets 1 of the criteria listed in

subdivision (a) and 1 of the criteria listed in subdivision (b):

(a) The resource is 1 of the following during the tax year in

which a credit under this section is claimed for those qualified

expenditures:

(i) Individually listed on the national register of historic

places or state register of historic sites.

(ii) A contributing resource located within an historic

district listed on the national register of historic places or the

state register of historic sites.

(iii) A contributing resource located within an historic

district designated by a local unit pursuant to an ordinance

adopted under the local historic districts act, 1970 PA 169, MCL

399.201 to 399.215.

(b) The resource meets 1 of the following criteria during the

tax year in which a credit under this section is claimed for those

qualified expenditures:

(i) The historic resource is located in a designated historic

district in a local unit of government with an existing ordinance

under the local historic districts act, 1970 PA 169, MCL 399.201 to

399.215.

(ii) The historic resource is located in an incorporated local

unit of government that does not have an ordinance under the local

historic districts act, 1970 PA 169, MCL 399.201 to 399.215, and

has a population of less than 5,000.

(iii) The historic resource is located in an unincorporated

local unit of government.

(iv) The historic resource is located in an incorporated local

unit of government that does not have an ordinance under the local

historic districts act, 1970 PA 169, MCL 399.201 to 399.215, and is

located within the boundaries of an association that has been

chartered under 1889 PA 39, MCL 455.51 to 455.72.

(7) If a qualified taxpayer is a partnership, limited

liability company, or subchapter S corporation, the qualified

taxpayer may assign all or any portion of a credit allowed under

this section to its partners, members, or shareholders, based on

the partner's, member's, or shareholder's proportionate share of

ownership or based on an alternative method approved by the

department. A credit assignment under this subsection is

irrevocable and shall be made in the tax year in which a

certificate of completed rehabilitation is issued. A qualified

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

credit amount. A partner, member, or shareholder that is an

assignee shall not subsequently assign a credit or any portion of a

credit assigned to the partner, member, or shareholder under this

subsection. A credit amount assigned under this subsection may be

claimed against the partner's, member's, or shareholder's tax

liability under this act or under the income tax act of 1967, 1967

PA 281, MCL 206.1 to 206.532. A credit assignment under this

subsection shall be made on a form prescribed by the department.

The qualified taxpayer and assignees shall send a copy of the

completed assignment form to the department in the tax year in

which the assignment is made and attach a copy of the completed

assignment form to the annual return required to be filed under

this act for that tax year.

(8) If the credit allowed under this section for the tax year

and any unused carryforward of the credit allowed by this section

exceed the taxpayer'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. An unused carryforward of a credit under section 39c

of former 1975 PA 228 that was unused at the end of the last tax

year for which former 1975 PA 228 was in effect may be claimed

against the tax imposed under this act for the years the

carryforward would have been available under section 39c of former

1975 PA 228.

(9) If the taxpayer sells an historic resource for which a

credit was claimed under this section or under section 39c of

former 1975 PA 228 less than 5 years after the year in which the

credit was claimed, the following percentage of the credit amount

previously claimed relative to that historic resource shall be

added back to the tax liability of the taxpayer in the year of the

sale:

(a) If the sale is less than 1 year after the year in which

the credit was claimed, 100%.

(b) If the sale is at least 1 year but less than 2 years after

the year in which the credit was claimed, 80%.

after the year in which the credit was claimed, 60%.

(d) If the sale is at least 3 years but less than 4 years

after the year in which the credit was claimed, 40%.

(e) If the sale is at least 4 years but less than 5 years

after the year in which the credit was claimed, 20%.

(f) If the sale is 5 years or more after the year in which the

credit was claimed, an addback to the taxpayer's tax liability

shall not be made.

(10) If a certification of completed rehabilitation is revoked

under subsection (5) less than 5 years after the year in which a

credit was claimed under this section or under section 39c of

former 1975 PA 228, the following percentage of the credit amount

previously claimed relative to that historic resource shall be

added back to the tax liability of the taxpayer in the year of the

revocation:

(a) If the revocation is less than 1 year after the year in

which the credit was claimed, 100%.

(b) If the revocation is at least 1 year but less than 2 years

after the year in which the credit was claimed, 80%.

years after the year in which the credit was claimed, 60%.

(d) If the revocation is at least 3 years but less than 4

years after the year in which the credit was claimed, 40%.

(e) If the revocation is at least 4 years but less than 5

years after the year in which the credit was claimed, 20%.

(f) If the revocation is 5 years or more after the year in

which the credit was claimed, an addback to the taxpayer's tax

liability shall not be made.

(11) The department of history, arts, and libraries through

the Michigan historical center may impose a fee to cover the

administrative cost of implementing the program under this section.

(12) The qualified taxpayer shall attach all of the following

to the qualified taxpayer's annual return required under this act

or under the income tax act of 1967, 1967 PA 281, MCL 206.1 to

206.532, if applicable, on which the credit is claimed:

(a) Certification of completed rehabilitation.

(b) Certification of historic significance related to the

historic resource and the qualified expenditures used to claim a

credit under this section.

assigned any portion of a credit allowed under this section to a

partner, member, or shareholder or if the taxpayer is an assignee

of any portion of a credit allowed under this section.

(13) The department of history, arts, and libraries shall

promulgate rules to implement this section pursuant to the

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

24.328.

(14) The total of the credits claimed under this section and

section 266 of the income tax act of 1967, 1967 PA 281, MCL

206.266, for a rehabilitation project shall not exceed 25% of the

total qualified expenditures eligible for the credit under this

section for that rehabilitation project.

(15) The department of history, arts, and libraries through

the Michigan historical center shall report all of the following to

the legislature annually for the immediately preceding state fiscal

year:

(a) The fee schedule used by the center and the total amount

of fees collected.

(b) A description of each rehabilitation project certified.

project.

~~(16) For purposes of this section, taxpayer includes a person~~

~~subject to the tax imposed under chapter 2A or 2B.~~

(16) ~~(17)~~ As used in this section:

(a) "Contributing resource" means an historic resource that

contributes to the significance of the historic district in which

it is located.

(b) "Historic district" means an area, or group of areas not

necessarily having contiguous boundaries, that contains 1 resource

or a group of resources that are related by history, architecture,

archaeology, engineering, or culture.

historic building, structure, site, object, feature, or open space

located within an historic district designated by the national

or a local unit acting under the local historic districts act, 1970

PA 169, MCL 399.201 to 399.215, or that is individually listed on

the state register of historic sites or national register of

historic places, and includes all of the following:

(i) An owner-occupied personal residence or a historic resource

located within the property boundaries of that personal residence.

(ii) An income-producing commercial, industrial, or residential

resource or an historic resource located within the property

boundaries of that resource.

(iii) A resource owned by a governmental body, nonprofit

organization, or tax-exempt entity that is used primarily by a

taxpayer lessee in a trade or business unrelated to the

governmental body, nonprofit organization, or tax-exempt entity and

that is subject to tax under this act.

(iv) A resource that is occupied or utilized by a governmental

body, nonprofit organization, or tax-exempt entity pursuant to a

long-term lease or lease with option to buy agreement.

(v) Any other resource that could benefit from rehabilitation.

(d) "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.

(e) "Local unit" means a county, city, village, or township.

(f) "Long-term lease" means a lease term of at least 27.5

years for a residential resource or at least 31.5 years for a

nonresidential resource.

(g) "Michigan historical center" or "center" means the state

historic preservation office of the Michigan historical center of

the department of history, arts, and libraries or its successor

agency.

(h) "Open space" means undeveloped land, a naturally

landscaped area, or a formal or man-made landscaped area that

provides a connective link or a buffer between other resources.

(i) "Person" means an individual, partnership, corporation,

association, governmental entity, or other legal entity.

(j) "Qualified expenditures" means capital expenditures that

qualify for a rehabilitation credit under section 47(a)(2) of the

internal revenue code if the taxpayer is eligible for the credit

under section 47(a)(2) of the internal revenue code or, if the

taxpayer is not eligible for the credit under section 47(a)(2) of

the internal revenue code, the qualified expenditures that would

qualify under section 47(a)(2) of the internal revenue code except

that the expenditures are made to an historic resource that is not

eligible for the credit under section 47(a)(2) of the internal

revenue code that were paid not more than 5 years after the

certification of the rehabilitation plan that included those

expenditures was approved by the center, and that were paid after

December 31, 1998 for the rehabilitation of an historic resource.

Qualified expenditures do not include capital expenditures for

nonhistoric additions to an historic resource except an addition

that is required by state or federal regulations that relate to

historic preservation, safety, or accessibility.

(k) "Qualified taxpayer" means a person that is an assignee

under subsection (7) or either owns the resource to be

rehabilitated or has a long-term lease agreement with the owner of

the historic resource and that has qualified expenditures for the

rehabilitation of the historic resource equal to or greater than

10% of the state equalized valuation of the property. If the

historic resource to be rehabilitated is a portion of an historic

or nonhistoric resource, the state equalized valuation of only that

portion of the property shall be used for purposes of this

subdivision. If the assessor for the local tax collecting unit in

which the historic resource is located determines the state

equalized valuation of that portion, that assessor's determination

shall be used for purposes of this subdivision. If the assessor

does not determine that state equalized valuation of that portion,

qualified expenditures, for purposes of this subdivision, shall be

equal to or greater than 5% of the appraised value as determined by

a certified appraiser. If the historic resource to be rehabilitated

does not have a state equalized valuation, qualified expenditures

for purposes of this subdivision shall be equal to or greater than

5% of the appraised value of the resource as determined by a

certified appraiser.

(l) "Rehabilitation plan" means a plan for the rehabilitation

of an historic resource that meets the federal secretary of the

interior's standards for rehabilitation and guidelines for

rehabilitation of historic buildings under 36 CFR part 67.

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 unless

extended under subsection (9) or if it is a multiphase project not

more than 10 years after the preapproval letter, as amended, if

applicable, 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) For projects approved before ~~the effective date of the~~

~~amendatory act that added subsection (33)~~ April 8, 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, as amended. For projects approved on and after

~~the effective date of the amendatory act that added subsection (33)~~

April 8, 2008, if the total of all eligible investments for a

project are $10,000,000.00 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

Michigan economic growth authority to the extent that the project

does not exceed the amount stated in the preapproval letter, as

amended, or, until December 31, 2010, up to 20% 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 Michigan

economic growth authority. If eligible investment exceeds the

amount of eligible investment in the preapproval letter, as

amended, 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) For projects approved before ~~the effective date of the~~

~~amendatory act that added subsection (33)~~ April 8, 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 (11) paid or

accrued by the qualified taxpayer on an eligible property. For

projects approved on and after ~~the effective date of the amendatory~~

~~act that added subsection (33)~~ April 8, 2008, if the total of all

eligible investments for a project is more than $10,000,000.00 but

$300,000,000.00 or less, up to 12.5% 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

that, except as provided in subsection (6)(b), is located in a

qualified local governmental unit, up to 15% 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 if the project is designated as an urban

development area project by the Michigan economic growth authority,

or, until December 31, 2010, up to 20% 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 if 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, as amended, 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. Subject to the limitation provided under

subsection ~~(31)~~ (30), 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. 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. The Michigan economic

growth authority shall develop and implement the use of the

application form to be used for projects under this subsection.

(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.

Subject to the limitation provided under subsection ~~(31)~~ (30), 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

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 the amounts authorized under subsection (1)(a). 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 the amounts authorized under subsection (1)(a). 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, as amended, 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 20 projects each calendar year under subsection (4), and

the following limitations apply:

(a) Of the 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 only 1 project.

(b) Of the 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.

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.

(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 project is financially 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 taxpayer

has made an eligible investment, other than soft costs, at the

property, the taxpayer determines that the project cannot be

completed as preapproved, the taxpayer may petition the Michigan

economic growth authority to amend the project and the preapproval

letter to increase the maximum total eligible investment for the

project on which credits may be claimed and the maximum total of

all credits for the project. A taxpayer may petition the Michigan

economic growth authority to make any other amendments to the

project or preapproval letter at any time before a certificate of

completion is issued. Amendments to the project or preapproval

letter may include, but are not limited to, extending the duration

of time provided to complete the project, as long as that extension

does not exceed 10 years from the date of the preapproval letter.

(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 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, as amended, 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, as

amended, if applicable, 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, as

amended, 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, or was a party to an agreement to

purchase or lease, 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 as amended under subsection (9) 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.

(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) Except as otherwise provided under this subsection, 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 credits under sections 413, 423, 431, and 450.

(18) 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 ~~the~~

~~effective date of the amendatory act that added subsection (33)~~

April 8, 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 85% of that portion of the credit that exceeds

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

forgo the remaining 15% 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 disposed of or transferred from the

eligible property to any other location, the qualified taxpayer

that 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 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 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.

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.

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. The credit assignment or a subsequent reassignment under

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

economic growth authority. 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 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.

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) 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.

(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, 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 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 subsections (2), (3), and

(4) that were approved in the calendar year.

(b) The total amount of eligible investment for projects

approved under 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.~~

(30) ~~(31)~~ For the 2008 calendar year, the total of all credits

for all projects approved under subsection (2) or (3) shall not

exceed $63,000,000.00. For each calendar year after 2008, the total

of all credits for all projects approved under subsection (2) or

(3) shall not exceed $40,000,000.00. If the Michigan economic

growth 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 Michigan economic growth 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.

(31) ~~(32)~~ 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, as approved under subsection (4).

(b) "Authority" means a brownfield redevelopment authority

created under the brownfield redevelopment financing act, 1996 PA

381, MCL 125.2651 to 125.2672.

"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) "Eligible investment" or "eligible investments" means,

when made after the approval date of the brownfield plan but in any

event no earlier than 90 days prior to the date of the preapproval

letter, 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, 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 ~~the effective date of the~~

~~amendatory act that added subsection (33)~~ April 8, 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.

Notwithstanding the foregoing, eligible investment does include

architectural, engineering, surveying, and similar professional

fees.

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

subsection ~~(33)~~ (32), means property for which eligible activities

are identified under a brownfield plan that was used or is

currently used for commercial, industrial, public, 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) "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) "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) "Multiphase project" means a project approved under this

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

completed separately.

(i) "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) "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) "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) "Qualified taxpayer" means a taxpayer that meets both of

the following criteria:

(i) Owns, leases, or has entered into an agreement to purchase

or lease 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 county

seat or along a traditional commercial corridor of a qualified

local governmental unit or county seat as determined by the

Michigan economic growth authority or the chairperson of the

Michigan economic growth authority or his or her designee.

(32) ~~(33)~~ For purposes of subsection (2), eligible property

means that term as defined under subsection ~~(32)(e)~~ (31)(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, public, 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.

(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.

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. Section 400 of the Michigan business tax

act, 2007 PA 36, MCL 208.1400, is repealed.