SENATE BILL No. 136

 

 

January 29, 2009, Introduced by Senators GARCIA, KAHN, GEORGE, BROWN, VAN WOERKOM, CROPSEY, KUIPERS, STAMAS, ALLEN, BARCIA and OLSHOVE and referred to the Committee on Commerce and Tourism.

 

 

 

     A bill to amend 1984 PA 270, entitled

 

"Michigan strategic fund act,"

 

by amending section 88b (MCL 125.2088b), as amended by 2008 PA 175,

 

and by adding section 88r.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 88b. (1) The fund shall create and operate programs

 

authorized under this chapter. The fund board shall determine the

 

annual allocation of money for programs authorized under this

 

chapter and make authorized expenditures or investments from the

 

investment fund of the 21st century jobs trust fund created in the

 

Michigan trust fund act, 2000 PA 489, MCL 12.251 to 12.260, as

 

authorized under this chapter for programs and activities

 

authorized under this chapter.

 


     (2) Money transferred or appropriated by law to the fund for

 

the purposes of carrying out this chapter shall be expended or

 

invested by the fund as authorized by law for the following

 

purposes:

 

     (a) 21st century investments.

 

     (b) Grants and loans approved by the commercialization board

 

under section 88k.

 

     (c) Other programs or activities authorized under this

 

chapter.

 

     (3) Except for the appropriations described in section 88j(3)

 

and as otherwise provided in section sections 88q and 88r, the fund

 

board shall not expend more than the following amounts each year

 

from the 21st century jobs trust fund created in the Michigan trust

 

fund act, 2000 PA 489, MCL 12.251 to 12.260, for the following

 

purposes:

 

     (a) 25% for the loan enhancement program.

 

     (b) 40% for the private equity investment program, the venture

 

capital investment program, and the mezzanine investment program

 

combined.

 

     (c) 70% for competitive edge technology grants and loans under

 

section 88k. The commercialization board shall not authorize the

 

expenditure of more than $100,000,000.00 of the amount described in

 

this subdivision for basic research over the life of the program.

 

     (4) The commercialization board shall authorize the

 

expenditure of not less than the following amounts described in

 

subsection (3)(c) as follows:

 

     (a) $40,000,000.00 in the 2005-2006 fiscal year.

 


     (b) $50,000,000.00 in the 2006-2007 fiscal year.

 

     (c) $30,000,000.00 in the 2007-2008 fiscal year.

 

     (d) $25,000,000.00 in the 2008-2009 through the 2011-2012

 

fiscal years.

 

     (5) Not more than 4% of the annual appropriation as provided

 

by law from the 21st century jobs trust fund created in the

 

Michigan trust fund act, 2000 PA 489, MCL 12.251 to 12.260, may be

 

used for the purposes of administering the programs and activities

 

authorized under this chapter. However, the fund and the fund board

 

shall not use more than 3% of the annual appropriation for

 

administering the programs and activities authorized under this

 

chapter unless the fund board by a 2/3 vote authorizes the

 

additional 1% for administration.

 

     (6) Not more than 5% of the annual appropriation as provided

 

by law from the 21st century jobs trust fund created in the

 

Michigan trust fund act, 2000 PA 489, MCL 12.251 to 12.260, may be

 

used for business development and business marketing costs. Not

 

less than 80% of the funds committed for business development and

 

business marketing costs shall be targeted to persons or entities

 

outside of this state. No funds may be used for any business

 

development and business marketing effort that includes a reference

 

to or the image or voice of an elected state officer or a candidate

 

for elective state office and that is targeted to a media market in

 

Michigan. The fund board shall select all vendors for all marketing

 

expenditures under this chapter by issuing a request for proposal.

 

At a minimum, the request for proposal shall require the responding

 

entities to disclose any conflict of interest, disclose any

 


criminal convictions, disclose any investigations by the internal

 

revenue service or any other federal or state taxing body or court,

 

disclose any pertinent litigation regarding the conduct of the

 

entity, and maintain records and evidence pertaining to work

 

performed. The fund board shall establish a standard process to

 

evaluate proposals submitted as a result of a request for proposal

 

and appoint a committee to review the proposals. The fund or the

 

fund board shall not appoint or designate any person paid or unpaid

 

to a committee to review proposals if that person has a conflict of

 

interest with any potential vendors as determined by the office of

 

the chief compliance officer established in section 88i.

 

     (7) The fund shall not use any money appropriated or

 

transferred for purposes authorized under this chapter to acquire

 

interests in or improve real property. The restriction under this

 

subsection applies only to the fund and not to recipients of

 

expenditures or investments under this chapter.

 

     Sec. 88r. (1) The fund may create and operate a centers of

 

creative artificial intelligence excellence program to promote the

 

development, acceleration, and sustainability of creative

 

artificial intelligence excellence sectors in this state. The fund

 

may enter into agreements with 1 or more qualified entities for the

 

designation and operation of a center of creative artificial

 

intelligence excellence as provided in subsection (5). Prior to

 

entering into an agreement under this section, 1 or more qualified

 

entities may apply to the fund for an agreement for designation and

 

operation of a center of creative artificial intelligence

 

excellence. The application shall be in a form determined by the

 


fund and shall include information the fund determines necessary

 

and appropriate.

 

     (2) The fund board shall not expend more than $18,000,000.00

 

of the money appropriated for programs authorized under this

 

chapter from the 21st century jobs trust fund created in the

 

Michigan trust fund act, 2000 PA 489, MCL 12.251 to 12.260, for the

 

centers of creative artificial intelligence excellence program.

 

Grants given for the centers of creative artificial intelligence

 

excellence program shall only be awarded to for-profit companies

 

for 1 of the following purposes:

 

     (a) Providing a match for foundation funding, federal funding,

 

or international investments of up to 85% of the total project

 

costs.

 

     (b) Supplementing in-kind contributions provided by a person

 

or entity other than this state.

 

     (c) Accelerating the commercialization of an innovative

 

creative artificial intelligence technology or process that will be

 

ready to market within 3 years of the effective date of the

 

agreement.

 

     (d) Activities of the center, including, but not limited to,

 

workforce development and technology demonstration.

 

     (3) Not less than 15% of the funds allocated to the centers

 

for creative artificial intelligence excellence program shall be

 

used to match foundation funding, federal funding, or international

 

investments. The fund board may authorize investment terms in

 

qualified entities as part of any agreement as provided in

 

subsection (5). Not more than 15% of any grant awarded can be used

 


for administrative costs or overhead by the grantee or any

 

subcontractor hired to implement any portion of the centers for

 

creative artificial intelligence excellence agreement. Grants

 

authorized by this section shall be disbursed pursuant to a

 

timeline and progress disbursement schedule included as part of an

 

agreement under this section.

 

     (4) The fund board shall establish a standard process to

 

evaluate applications for an agreement under this section and shall

 

appoint a committee of members of the fund board to assist in the

 

review of applications. The fund or the fund board shall not

 

appoint or designate any person paid or unpaid to a committee to

 

review applications if that person has a conflict of interest with

 

any potential applicants as determined by the office of the chief

 

compliance officer established in section 88i. When determining

 

whether to enter into an agreement under this section, the fund

 

board shall consider all of the following:

 

     (a) The potential that in the absence of an agreement the

 

development, acceleration, and sustainability of creative

 

artificial intelligence excellence sectors addressed by the

 

proposed center of creative artificial intelligence excellence will

 

occur in a location other than this state.

 

     (b) The extent to which the proposed center of creative

 

artificial intelligence excellence will promote the development of

 

creative artificial intelligence excellence sectors in this state.

 

     (c) The extent to which the proposed center of creative

 

artificial intelligence excellence will promote economic

 

development or job creation in this state.

 


     (d) The extent to which the proposed center of creative

 

artificial intelligence excellence could attract private investment

 

or encourage commercialization in creative artificial intelligence

 

excellence sectors in this state.

 

     (f) The extent to which the proposed center of creative

 

artificial intelligence excellence may encourage collaboration on

 

commercialization and technology transfer among qualified entities

 

in this state.

 

     (g) The extent to which the proposed center of creative

 

artificial intelligence excellence may attract additional federal

 

funding to this state or persons or entities within this state.

 

     (h) The financial viability of the proposed center of creative

 

artificial intelligence excellence, including, but not limited to,

 

commitments of financial and other support for the proposed center

 

and the potential availability of federal funding for the proposed

 

center.

 

     (i) The financial resources available to the fund board for

 

operation of the centers of creative artificial intelligence

 

excellence program under this section.

 

     (5) If the fund board enters into an agreement with 1 or more

 

qualified entities for the operation of a center of creative

 

artificial intelligence excellence, the agreement shall include

 

participation by at least 1 qualified business and at least 1

 

institution of higher education. An agreement shall include, but is

 

not limited to, all of the following:

 

     (a) The roles and responsibilities of the fund and the

 

qualified entities participating in the agreement.

 


     (b) A governance structure for the center of creative

 

artificial intelligence excellence. The agreement may provide for

 

representation of the fund in the governance of the center.

 

     (c) The responsibilities of the fund and the qualified

 

entities participating in the agreement, including, but not limited

 

to, financial resources, technology, real property, personal

 

property, or other resources contributed by the parties to the

 

agreement.

 

     (d) A commitment by the qualified entities participating in

 

the agreement to collaborate on commercialization and technology

 

transfer opportunities in creative artificial intelligence

 

excellence sectors in this state.

 

     (e) A commitment by qualified entities that are institutions

 

of higher education to provide incentives for faculty who

 

participate in technology transfer and commercialization activities

 

in creative artificial intelligence excellence sectors and

 

expansion of business formation efforts related to creative

 

artificial intelligence excellence sectors to increase the number

 

of institution of higher education related start-up companies.

 

     (f) A commitment to locate and retain commercialization

 

opportunities resulting from the agreement or center of creative

 

artificial intelligence excellence within this state.

 

     (g) The duration of the agreement and a mechanism for the

 

dissolution of the center of creative artificial intelligence

 

excellence and the disposition of any assets. The fund board may

 

revoke an agreement for the designation and operation of a center

 

of creative artificial intelligence excellence if a qualified

 


entity that is a party to the agreement does not comply with the

 

agreement.

 

     (h) Provision for repayment of grants from the fund in the

 

event a qualified entity fails to comply with the agreement.

 

     (6) As used in this section:

 

     (a) "Creative artificial intelligence" means advanced

 

artificial neural network technology that is capable of

 

autonomously generating new and potentially valuable concepts or

 

strategies.

 

     (b) "Creative artificial intelligence excellence sectors"

 

means new and developing industry sectors in the creative

 

artificial intelligence field in this state where the fund has

 

determined there are barriers to the commercialization of

 

technology within the new and developing industry sector.

 

     (c) "Creative artificial intelligence field" means computer

 

processor technology, natural language development technology for

 

computer processors, or mathematical research, if that research is

 

focused on providing algorithms for the development of creative

 

artificial intelligence software programs or hardware that will

 

support the development of creative artificial intelligence.

 

     (d) "Qualified entity" means a qualified business, an

 

institution of higher education, a Michigan nonprofit corporation,

 

or a political subdivision of this state.