HB-4817, As Passed House, May 19, 2009

 

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 4817

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1984 PA 270, entitled

 

"Michigan strategic fund act,"

 

by amending sections 4, 71, and 88a (MCL 125.2004, 125.2071, and

 

125.2088a), section 4 as amended by 2005 PA 225 and section 88a as

 

amended by 2006 PA 639.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 4. As used in this act:

 

     (a) "Board" means the board of directors of the Michigan

 

strategic fund, except where the context clearly requires a

 

different definition.

 

     (b) "Economic development project" means an endeavor related

 

to industrial, commercial, or agricultural enterprise. Economic

 

development project includes, but is not limited to, a theme or

 

recreation park; agricultural or forestry production, harvesting,

 

storage, or processing facilities or equipment; and the use of

 

equipment or facilities designed to produce energy from renewable

 

resources. Economic development project does not include that

 

portion of an endeavor devoted to the sale of goods at retail,

 

except that, as used in relation to the fund insuring a transaction

 

entered into by a depository institution, and as used in relation

 

to a loan by the fund to a minority owned business, an economic

 

development project may include that portion of an endeavor devoted

 

to the sale of goods at retail. Economic development project does

 

not include that portion of an endeavor devoted to housing or a

 

program or activity authorized under chapter 8A.

 

     (c) "Financial institution" means a state or nationally

 

chartered bank or a state or federally chartered savings and loan

 

association, savings bank, or credit union whose deposits are

 

insured by an agency of the United States government and that

 

maintains a principal office or branch office in this state under

 

the laws of this state or the United States.

 

     (d) "Fund" means the Michigan strategic fund created under

 

section 5, except where the context clearly requires a different

 

definition.

 

     (e) "Green chemistry" means chemistry and chemical engineering

 

to design chemical products or processes that reduce or eliminate

 

the use or generation of hazardous substances, while producing

 

high-quality products through safe and efficient manufacturing

 

processes. Green chemistry is guided by the following 12

 

principles:

 

     (i) Prevent waste: Design chemical syntheses to prevent waste,

 

leaving no waste to treat or clean up.

 

     (ii) Design safer chemicals and products: Design chemical

 

products to be fully effective, yet have little or no toxicity.

 

     (iii) Design less hazardous chemical syntheses: Design syntheses

 

to use and generate substances with little or no toxicity to humans

 

and the environment.

 

     (iv) Use renewable feedstocks: Use raw materials and feedstocks

 

that are renewable rather than depleting. Renewable feedstocks are

 

often made from agricultural products or are the wastes of other

 

processes; depleting feedstocks are made from fossil fuels,

 

including petroleum, natural gas, or coal, or are mined.

 

     (v) Use catalysts, not stoichiometric reagents: Minimize waste

 

by using catalytic reactions. Catalysts are used in small amounts

 

and can carry out a single reaction many times. They are preferable

 

to stoichiometric reagents, which are used in excess and work only

 

once.

 

     (vi) Avoid chemical derivatives: Avoid using blocking or

 

protecting groups or any temporary modifications if possible.

 

Derivatives use additional reagents and generate waste.

 

     (vii) Maximize atom economy: Design syntheses so that the final

 

product contains the maximum proportion of the starting materials.

 

There should be few, if any, wasted atoms.

 

     (viii) Use safer solvents and reaction conditions: Avoid using

 

solvents, separation agents, or other auxiliary chemicals. If these

 

chemicals are necessary, use innocuous chemicals.

 

     (ix) Increase energy efficiency: Run chemical reactions at

 

ambient temperature and pressure whenever possible.

 

     (x) Design chemicals and products to degrade after use: Design

 

chemical products to break down to innocuous substances after use

 

so that they do not accumulate in the environment.

 

     (xi) Analyze in real-time to prevent pollution: Include in-

 

process real-time monitoring and control during syntheses to

 

minimize or eliminate the formation of by-products.

 

     (xii) Minimize the potential for accidents: Design chemicals

 

and their forms, including solid, liquid, or gas, to minimize the

 

potential for chemical accidents, including explosions, fires, and

 

releases to the environment.

 

     (f) (e) "Michigan economic development corporation" or "MEDC"

 

means the Michigan economic development corporation, the public

 

body corporate created under section 28 of article VII of the state

 

constitution of 1963 and the urban cooperation act of 1967, 1967

 

(Ex Sess) PA 7, MCL 124.501 to 124.512, by a contractual interlocal

 

agreement effective April 5, 1999, and subsequently amended,

 

between local participating economic development corporations

 

formed under the economic development corporations act, 1974 PA

 

338, MCL 125.1601 to 125.1636, and the fund.

 

     (g) (f) "Municipality" means a county, city, village,

 

township, port district, development organization, institution of

 

higher education, community or junior college, or subdivision or

 

instrumentality of any of the legal entities listed in this

 

subdivision.

 

     (h) (g) "Person" means an individual, sole proprietorship,

 

partnership, limited partnership, limited liability partnership,

 

limited liability company, joint venture, profit or nonprofit

 

corporation including a public or private college or university,

 

public utility, local industrial development corporation, economic

 

development corporation, or other association of persons organized

 

for agricultural, commercial, or industrial purposes.

 

     (i) (h) "Project" means an economic development project and,

 

in addition, means the acquisition, construction, reconstruction,

 

conversion, or leasing of an industrial, commercial, retail,

 

agricultural, or forestry enterprise, or any part of these, to

 

carry out the purposes and objectives of this act and of the fund,

 

including, but not limited to, acquisition of land or interest in

 

land, buildings, structures, or other planned or existing planned

 

improvements to land including leasehold improvements, machinery,

 

equipment, or furnishings which include, but are not limited to,

 

the following: research parks; office facilities; engineering

 

facilities; research and development laboratories; warehousing

 

facilities; parts distribution facilities; depots or storage

 

facilities; port facilities; railroad facilities, including

 

trackage, right of way, and appurtenances; airports; water and air

 

pollution control equipment or waste disposal facilities; theme or

 

recreational parks; equipment or facilities designed to produce

 

energy from renewable resources; farms, ranches, forests, and other

 

agricultural or forestry commodity producers; agricultural

 

harvesting, storage, transportation, or processing facilities or

 

equipment; grain elevators; shipping heads and livestock pens;

 

livestock; warehouses; wharves and dock facilities; water,

 

electricity, hydro electric, coal, petroleum, or natural gas

 

provision facilities; dams and irrigation facilities; sewage,

 

liquid, and solid waste collection, disposal treatment, and

 

drainage services and facilities. Project does not include a

 

program or activity authorized under chapter 8A.

 

     (j) (i) "Private sector" means other than the fund, a state or

 

federal source, or an agency of a state or the federal government.

 

     Sec. 71. As used in this chapter:

 

     (a) "Economic development fund" means that fund to which the

 

fund succeeded in ownership pursuant to section 22.

 

     (b) "Research and development enterprise" means any person

 

found by the fund to be engaged in a business which has as its

 

principal function uses green chemistry as a design guidance, or

 

the discovery of new substances and the refinement of known

 

substances, processes, products, theories, and ideas, except for

 

those persons whose businesses are directed primarily to the

 

accumulation or analysis of commercial, financial, or mercantile

 

data.

 

     (c) "Research center fund" means that fund created by section

 

27 of Act No. 70 of the Public Acts of 1982, being section 125.1927

 

of the Michigan Compiled Laws former 1982 PA 70, to which the fund

 

succeeds in ownership pursuant to section 76.

 

     Sec. 88a. As used in this chapter:

 

     (a) "Advanced automotive, manufacturing, and materials

 

technology" means any technology that involves 1 or more of the

 

following:

 

     (i) Materials with engineered properties created through the

 

development of specialized process and synthesis technology.

 

     (ii) Nanotechnology, including materials, devices, or systems

 

at the atomic, molecular, or macromolecular level, with a scale

 

measured in nanometers.

 

     (iii) Microelectromechanical systems, including devices or

 

systems integrating microelectronics with mechanical parts and a

 

scale measured in micrometers.

 

     (iv) Improvements to vehicle safety, vehicle performance,

 

vehicle production, or environmental impact, including, but not

 

limited to, vehicle equipment and component parts.

 

     (v) A new technology, device, or system that enhances or

 

improves the manufacturing process of wood, timber, or

 

agricultural-based products.

 

     (vi) Any technology that involves an alternative energy vehicle

 

or its components, as alternative energy vehicle is defined under

 

section 2 of the Michigan next energy authority act, 2002 PA 593,

 

MCL 207.822.

 

     (vii) Advanced computing or electronic device technology

 

related to technology described under this subdivision.

 

     (viii) Design, engineering, testing, or diagnostics related to

 

technology described under this subdivision.

 

     (ix) Product research and development related to technology

 

described under this subdivision.

 

     (b) "Advanced computing" means any technology used in the

 

design and development of 1 or more of the following:

 

     (i) Computer hardware and software.

 

     (ii) Data communications.

 

     (iii) Information technologies.

 

     (c) "Alternative energy technology" means applied research or

 

commercialization of new or next generation technology in 1 or more

 

of the following:

 

     (i) Alternative energy technology as that term is defined in

 

section 2 of the Michigan next energy authority act, 2002 PA 593,

 

MCL 207.822.

 

     (ii) Devices or systems designed and used solely for the

 

purpose of generating energy from agricultural crops, residue and

 

waste generated from the production and processing of agricultural

 

products, animal wastes, or food processing wastes, not including a

 

conventional gasoline or diesel fuel engine or retrofitted

 

conventional gasoline or diesel fuel engine.

 

     (iii) A new technology, product, or system that permits the

 

utilization of biomass for the production of specialty, commodity,

 

or foundational chemicals or of novel or economical commodity

 

materials through the application of biotechnology that minimizes,

 

complements, or replaces reliance on petroleum for the production.

 

Alternative energy technology also includes a new technology,

 

product, or system that utilizes wind energy.

 

     (iv) Advanced computing or electronic device technology related

 

to technology described under this subdivision.

 

     (v) Design, engineering, testing, or diagnostics related to

 

technology described under this subdivision.

 

     (vi) Product research and development related to a technology

 

described under this subdivision.

 

     (d) "Applied research" means translational research conducted

 

with the objective of attaining a specific benefit or to solve a

 

practical problem, or other research activity that seeks to

 

utilize, synthesize, or apply existing knowledge, information, or

 

resources to the resolution of a specified problem, question, or

 

issue, with high potential for commercial application to create

 

jobs in this state.

 

     (e) "Basic research" means any original investigation for the

 

advancement of scientific or technological knowledge that will

 

enhance the research capacity of this state in a way that increases

 

the ability to attract to or develop companies, jobs, researchers,

 

or students in this state.

 

     (f) "Commercialization" means the transition from research to

 

the actions necessary to achieve market entry and general market

 

competitiveness of new innovative technologies, processes, and

 

products and the services that support, assist, equip, finance, or

 

promote a person or an entity with that transition.

 

     (g) "Competitive edge technology" means 1 or more of the

 

following:

 

     (i) Life sciences technology.

 

     (ii) Advanced automotive, manufacturing, and materials

 

technology.

 

     (iii) Homeland security and defense technology.

 

     (iv) Alternative energy technology.

 

     (v) Technologies using green chemistry as a design guidance.

 

     (h) "Electronic device technology" means any technology that

 

involves microelectronics, semiconductors, electronic equipment,

 

and instrumentation, radio frequency, microwave, and millimeter

 

electronics; optical and optic-electrical devices; or data and

 

digital communications and imaging devices.

 

     (i) "Fund board" means the board of the Michigan strategic

 

fund described in section 5.

 

     (j) "Homeland security and defense technology" means

 

technology that assists in the assessment of threats or damage to

 

the general population and critical infrastructure, protection of,

 

defense against, or mitigation of the effects of foreign or

 

domestic threats, disasters, or attacks, or support for crisis or

 

response management, including, but not limited to, 1 or more of

 

the following:

 

     (i) Sensors, systems, processes, or equipment for

 

communications, identification and authentication, screening,

 

surveillance, tracking, and data analysis.

 

     (ii) Advanced computing or electronic device technology related

 

to technology described under this subdivision.

 

     (iii) Aviation technology, including, but not limited to,

 

avionics, airframe design, sensors, early warning systems, and

 

services related to technology described under this subdivision.

 

     (iv) Design, engineering, testing, or diagnostics related to

 

technology described under this subdivision.

 

     (v) Product research and development related to technology

 

described under this subdivision.

 

     (k) "Independent peer review expert" means a person or persons

 

selected by the commercialization board with appropriate expertise

 

to conduct an independent, unbiased, objective, and competitive

 

evaluation of activities funded under section 88k. The person or

 

persons shall demonstrate the capability and experience, as

 

appropriate or necessary for the particular activity funded, to do

 

all of the following:

 

     (i) Conduct a highly competitive and intensive, independent,

 

multiphased, peer-review-based evaluation process.

 

     (ii) Employ personnel with appropriate business, scientific,

 

technical, commercial, or other specialized expertise to carry out

 

each aspect of the evaluation process.

 

     (iii) Provide recommendations to or assist the commercialization

 

board in identifying high-quality activities for funding that are

 

likely to result in the development and commercialization of

 

competitive edge technology and job creation in this state. The

 

recommendations shall include all materials used by the independent

 

peer review expert in making the recommendation.

 

     (iv) Assure that any peer review process developed maintains a

 

high level of integrity.

 

     (l) "Institution of higher education" means an institution of

 

higher education or a community or junior college described in

 

section 4, 5, 6, or 7 of article VIII of the state constitution of

 

1963 or an independent nonprofit degree-granting institution of

 

postsecondary education in this state that is approved by the state

 

board of education.

 

     (m) "Jobs for Michigan investment fund" or "investment fund"

 

means the jobs for Michigan investment fund created in section 88h.

 

     (n) "Life sciences" means science for the examination or

 

understanding of life or life processes, including, but not limited

 

to, all of the following:

 

     (i) Bioengineering.

 

     (ii) Biomedical engineering.

 

     (iii) Genomics.

 

     (iv) Proteomics.

 

     (v) Molecular and chemical ecology.

 

     (vi) Biotechnology, including any technology that uses living

 

organisms, cells, macromolecules, microorganisms, umbilical cord

 

blood, or substances from living organisms to make or modify a

 

product for useful purposes. Biotechnology or life sciences does

 

not include any of the following:

 

     (A) Activities prohibited under section 2685 of the public

 

health code, 1978 PA 368, MCL 333.2685.

 

     (B) Activities prohibited under section 2688 of the public

 

health code, 1978 PA 368, MCL 333.2688.

 

     (C) Activities prohibited under section 2690 of the public

 

health code, 1978 PA 368, MCL 333.2690.

 

     (D) Activities prohibited under section 16274 of the public

 

health code, 1978 PA 368, MCL 333.16274.

 

     (E) Stem cell research with human embryonic tissue.

 

     (o) "Life sciences technology" means any technology derived

 

from life sciences intended to improve human health or the overall

 

quality of human life, including, but not limited to, systems,

 

processes, or equipment for drug or gene therapies, biosensors,

 

testing, medical devices or instrumentation with a therapeutic or

 

diagnostic value, a pharmaceutical or other product that requires

 

United States food and drug administration approval or registration

 

prior to its introduction in the marketplace and is a drug or

 

medical device as defined by the federal food, drug, and cosmetic

 

act, 21 USC 301 to 399, or 1 or more of the following:

 

     (i) Advanced computing or electronic device technology related

 

to technology described under this subdivision.

 

     (ii) Design, engineering, testing, or diagnostics related to

 

technology or the commercial manufacturing of technology described

 

under this subdivision.

 

     (iii) Product research and development related to technology

 

described under this subdivision.

 

     (p) "Qualified business" means a business entity located in

 

this state.

 

     (q) "Qualified mezzanine fund" means a person or entity

 

primarily engaged in making loans or investments ranging in size

 

from $250,000.00 to $6,000,000.00 that is managed by 2 or more

 

individuals with no less than 5 years' direct experience in

 

mezzanine lending or capital investments and that holds investment

 

capital or has commitments from investors other than the fund and

 

at least 2 financial institutions.

 

     (r) "Qualified private equity fund" means a firm principally

 

or primarily engaged in investing in or acquiring businesses that

 

is managed by 2 or more individuals with no less than 5 years of

 

direct experience in private equity investments, and that holds

 

investment capital from investors other than the fund.

 

     (s) "Qualified venture capital fund" means a firm principally

 

or primarily engaged in investing in or acquiring early stage

 

businesses with growth potential that have not yet demonstrated

 

consistent profitability or a proven business model, that is

 

managed by 2 or more individuals with not less than 5 years of

 

direct experience in venture capital, and that holds capital from

 

investors other than the fund.

 

     (t) "Small business" means a business entity formed or doing

 

business in this state, including the affiliates of the business

 

concern, which business entity is independently owned and operated

 

and employs fewer than 250 full-time employees or has gross annual

 

sales of less than $6,000,000.00.

 

     (u) "21st century investments" means investments in 1 or more

 

of the following:

 

     (i) Commercial loan guarantees under a loan enhancement program

 

operated by the fund.

 

     (ii) Private equity investments under a private equity

 

investment program operated by the fund.

 

     (iii) Venture capital investments under a venture capital

 

investment program operated by the fund.

 

     (iv) Mezzanine investments under a mezzanine investment program

 

operated by the fund.

 

     (v) "Strategic economic investment and commercialization

 

board" or "commercialization board" means the strategic economic

 

investment and commercialization board created in section 88k.

 

     (w) "University technology transfer" means innovative methods

 

to accelerate the creation of start-up companies affiliated with

 

institutions of higher education or the transfer of competitive

 

edge technology research from an institution of higher education to

 

a qualified business in Michigan.