Bill Text: MI HB6193 | 2019-2020 | 100th Legislature | Introduced
Bill Title: Michigan business tax: credits; time frame for completion of certain multiphase projects; modify. Amends sec. 437 of 2007 PA 36 (MCL 208.1437).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2020-09-15 - Bill Electronically Reproduced 09/10/2020 [HB6193 Detail]
Download: Michigan-2019-HB6193-Introduced.html
HOUSE BILL NO. 6193
September 10, 2020, Introduced by Rep. O'Malley
and referred to the Committee on Tax Policy.
A bill to amend 2007 PA 36, entitled
"Michigan business tax act,"
by amending section 437 (MCL 208.1437), as amended by 2017 PA 217.
the people of the state of michigan enact:
Sec. 437. (1) Subject to the criteria under this
section, a qualified taxpayer that has unused credits or has a preapproval
letter issued after December 31, 2007 and before January 1, 2014, 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, or as otherwise extended under subsection (10), 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 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, or amended, on and after 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 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, or amended, on and after April 8,
2008 and before January 1, 2010, 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. For projects approved, or amended, on and after January 1, 2010, if
the total of all eligible investments for a project is more than $10,000,000.00
but $100,000,000.00 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), 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), 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
through December 31, 2009, not more than 19 projects for the 2010 calendar
year, and, except as otherwise provided under subdivision (d), not more than 17
projects for each calendar year after December 31, 2010 under subsection (4),
and the following limitations apply:
(a) Of the 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 before
December 31, 2009.
(b) Of the projects
allowed under this subsection, up to 3 projects may be approved for projects
that are not in a qualified local governmental unit if the property is a
facility for which eligible activities are identified in a brownfield plan or,
for 1 of the 3 projects, if the property is not a facility but is functionally
obsolete or blighted, property identified in a brownfield plan. For purposes of
this subdivision, a facility includes a building or complex of buildings that
was used by a state or federal agency and that is no longer being used for the
purpose for which it was used by the state or federal agency.
(c) The project allowed
under subdivision (a) may also qualify under subdivision (b).
(d) If the Michigan
economic growth authority determines that there are previously issued credits
authorized under section 434(6) available, the Michigan economic growth authority
may approve 2 additional projects for each calendar year after December 31,
2010. As used in this subdivision, "previously issued credits" means
the total amount of credits authorized by the Michigan economic growth
authority for a taxpayer under section 434(6) that meets all of the following:
(i) The taxpayer did not use any or a portion of the credits
authorized under the written agreement under section 434(6).
(ii) The authority
determined at a meeting upon a vote of the majority of the members present that
the credits previously authorized satisfy subparagraph (i).
(7) The Michigan economic growth authority shall review all
applications for projects under subsection (4) and, if an application is
approved, shall determine the maximum total of all credits for that project.
Before approving a project for which the total of all credits will be more than
$10,000,000.00 but $30,000,000.00 or less only, the Michigan economic growth
authority shall determine that the project would not occur in this state without
the tax credit offered under subsection (4). The Michigan economic growth
authority shall consider the following criteria to the extent reasonably
applicable to the type of project proposed when approving a project under
subsection (4), and the chairperson of the Michigan economic growth authority
or his or her designee shall consider the following criteria to the extent
reasonably applicable to the type of project proposed when approving a project
under subsection (2) or (3) or when considering an amendment to a project under
subsection (9):
(a) The overall benefit to the public.
(b) The extent of reuse of vacant buildings and redevelopment
of blighted property.
(c) Creation of jobs.
(d) Whether the eligible property is in an area of high
unemployment.
(e) The level and extent of contamination alleviated by the
qualified taxpayer's eligible activities to the extent known to the qualified
taxpayer.
(f) The level of private sector contribution.
(g) The cost gap that exists between the site and a similar greenfield
site as determined by the Michigan economic growth authority.
(h) If the qualified taxpayer is moving from another location
in this state, whether the move will create a brownfield.
(i) Whether the 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 or as otherwise extended under subsection
(10). However, if a project was approved prior to December 31,
2008 for 20% of the qualified taxpayer's eligible investment and a total of
less than $2,000,000.00 for all credits for that project and that project has
received a funding reservation for an allocation of the federal low-income
housing tax credit administered by the Michigan state housing development
authority of more than $1,100,000.00, then that project may be amended to
extend the duration of time provided to complete the project to the
placed-in-service date of the carryover allocation agreement for the federal
low-income housing tax credit.
(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 temporary or final 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 Except as otherwise provided under
this subsection, 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. A qualified taxpayer that was approved for a credit based
on a multiphase project by Resolution 2008-178 adopted by the Michigan economic
growth authority board on December 15, 2008 and issued a preapproval letter on
March 14, 2011 has until September 14, 2022 to complete that project and claim
the credit without penalty. 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.
(c) Each qualified taxpayer's credit amount.
(d) The qualified taxpayer's federal employer identification
number or the Michigan treasury number assigned to the taxpayer.
(e) The project number.
(f) For a project approved under subsection (4) for which the
total of all credits is more than $10,000,000.00 but $30,000,000.00 or less,
the total of all credits and the schedule on which the annual credit amount
shall be claimed by the qualified taxpayer.
(g) For a multiphase project under subsection (10), the
amount of each credit assigned and the amount of all credits claimed in each
tax year before the year in which the project is completed.
(12) Except as otherwise provided in this section, qualified
taxpayers shall claim credits under this section in the tax year in which the
certificate of completion is issued. For a project approved under subsection
(4) for which the total of all credits is more than $10,000,000.00 but
$30,000,000.00 or less, the qualified taxpayer shall claim 10% of its approved
credit each year for 10 years. A credit assigned based on a multiphase project
shall be claimed in the year in which the credit is assigned.
(13) The cost of eligible investment for leased machinery,
equipment, or fixtures is the cost of that property had the property been
purchased minus the lessor's estimate, made at the time the lease is entered
into, of the market value the property will have at the end of the lease. A
credit for property described in this subsection is allowed only if the cost of
that property had the property been purchased and the lessor's estimate of the
market value at the end of the lease are provided to the Michigan economic
growth authority.
(14) Credits claimed by a lessee of eligible property are
subject to the total of all credits limitation under this section.
(15) Each qualified taxpayer and assignee under subsection
(20), (21), or (22) that claims a credit under this section shall attach a copy
of the certificate of completion and, if the credit was assigned, a copy of the
assignment form provided for under this section to the annual return filed
under this act on which the credit under this section is claimed. An assignee
of a credit based on a multiphase project shall attach a copy of the assignment
form provided for under this section and the component completion certificate
provided for in subsection (10) to the annual return filed under this act on
which the credit is claimed but is not required to file a copy of a certificate
of completion.
(16) Except as otherwise provided in this subsection or
subsection (10), (18), (20), (21), or (22), a credit under this section shall
be claimed in the tax year in which the certificate of completion is issued to
the qualified taxpayer. For a project described in subsection (11)(f) for which
a schedule for claiming annual credit amounts is designated on the certificate
of completion by the Michigan economic growth authority, the annual credit
amount shall be claimed in the tax year specified on the certificate of
completion.
(17) 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
this act for the years the carryforward would have been available under former
1975 PA 228. Beginning on and after 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.
(c) More than 1 annual credit amount may be assigned to any 1
assignee and the qualified taxpayer may assign all or a portion of each annual
credit amount to any assignee.
(d) The qualified taxpayer shall not assign more than the
annual credit amount for each tax year.
(21) Except as otherwise provided in this subsection, for
projects for which a certificate of completion is issued before January 1,
2006, and except as otherwise provided in this subsection, if a qualified
taxpayer is a partnership, limited liability company, or subchapter S
corporation, the qualified taxpayer may assign all or a portion of a credit
under this section to its partners, members, or shareholders, based on their
proportionate share of ownership of the partnership, limited liability company,
or subchapter S corporation or based on an alternative method approved by the
Michigan economic growth authority. A credit assignment under this subsection
is irrevocable and, except for a credit assignment based on a multiphase
project, shall be made in the tax year in which a certificate of completion is
issued. A qualified taxpayer may claim a portion of a credit and assign the
remaining credit amount. Except as otherwise provided in this subsection, if
the qualified taxpayer both claims and assigns portions of the credit, the
qualified taxpayer shall claim the portion it claims in the tax year in which a
certificate of completion is issued or for a credit assigned and claimed for a
multiphase project, before the component completion certificate is issued, the
taxpayer shall claim the credit in the year in which the credit is assigned. A
partner, member, or shareholder that is an assignee shall not subsequently
assign a credit or any portion of a credit assigned under this subsection. The
credit assignment under this subsection shall be made on a form prescribed by
the Michigan economic growth authority. The qualified taxpayer shall send a
copy of the completed assignment form to the Michigan economic growth authority
in the tax year in which the assignment is made. A partner, member, or
shareholder who is an assignee shall attach a copy of the completed assignment
form to its annual return required under this act, for the tax year in which
the assignment is made and the assignee first claims a credit, which shall be the
same tax year. A credit assignment based on a credit for a component of a
multiphase project that is completed before January 1, 2006 shall be made under
this subsection. In addition to all other procedures under this subsection, the
following apply if the total of all credits for a project is more than
$10,000,000.00 but $30,000,000.00 or less:
(a) The credit shall be assigned based on the schedule
contained in the certificate of completion.
(b) If the qualified taxpayer assigns all or a portion of the
credit amount, the qualified taxpayer shall assign the annual credit amount for
each tax year separately.
(c) More than 1 annual credit amount may be assigned to any 1
assignee and the qualified taxpayer may assign all or a portion of each annual
credit amount to any assignee.
(d) The qualified taxpayer shall not assign more than the
annual credit amount for each tax year.
(22) For projects approved under this section or section 38g
of former 1975 PA 228 for which a certificate of completion is issued on and
after January 1, 2006, a qualified taxpayer may assign all or a portion of a
credit allowed under this section or section 38g(2), (3), or (33) of former
1975 PA 228 under this subsection. A credit assignment under this subsection is
irrevocable and, except for a credit assignment based on a multiphase project,
shall be made in the tax year in which a certificate of completion is issued
unless the assignee is an unknown lessee. If a qualified taxpayer wishes to
assign all or a portion of its credit to a lessee but the lessee is unknown in
the tax year in which the certificate of completion is issued, the qualified
taxpayer may delay claiming and assigning the credit until the first tax year
in which the lessee is known. A qualified taxpayer may claim a portion of a
credit and assign the remaining credit amount. If the qualified taxpayer both
claims and assigns portions of the credit, the qualified taxpayer shall claim
the portion it claims in the tax year in which a certificate of completion is
issued pursuant to this section or section 38g of former 1975 PA 228. An
assignee may subsequently assign a credit or any portion of a credit assigned
under this subsection to 1 or more assignees. 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.
(c) More than 1 annual credit amount may be assigned to any 1
assignee, and the qualified taxpayer may assign all or a portion of each annual
credit amount to any assignee.
(23) A qualified taxpayer or assignee under subsection (20),
(21), or (22) shall not claim a credit under subsection (1)(a) or (b) based on
eligible investment on which a credit claimed under section 38d of former 1975
PA 228 was based.
(24) When reviewing an application for a project for
designation as an urban development area project, the Michigan economic growth
authority for projects approved under subsection (4) or the chairperson of the
Michigan economic growth authority or his or her designee for projects approved
under subsections (2) and (3) shall consider all of the following criteria:
(a) If the project increases the density of the area by
promoting multistory development.
(b) If the project promotes mixed-use development and
walkable communities.
(c) If the project promotes sustainable redevelopment.
(d) If the project addresses areawide redevelopment and
includes multiple parcels of property.
(e) If the project addresses underserved markets of commerce.
(f) Any other criteria determined by the Michigan economic
growth authority or the chairperson of the Michigan economic growth authority.
(25) An eligible taxpayer that claims a credit under this
section is not prohibited from claiming a credit under section 431. However,
the eligible taxpayer shall not claim a credit under this section and section
431 based on the same costs.
(26) Eligible investment attributable or related to the
operation of a professional sports stadium, and eligible investment that is
associated or affiliated with the operation of a professional sports stadium,
including, but not limited to, the operation of a parking lot or retail store,
shall not be used as a basis for a credit under this section. Professional
sports stadium does not include a professional sports stadium that will no
longer be used by a professional sports team on and after the date that an
application related to that professional sports stadium is filed under this
section.
(27) Eligible investment attributable or related to the
operation of a casino, and eligible investment that is associated or affiliated
with the operation of a casino, including, but not limited to, the operation of
a parking lot, hotel, motel, or retail store, shall not be used as a basis for
a credit under this section. As used in this subsection, "casino"
means a casino regulated by this state pursuant to the Michigan gaming control
and revenue act, 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 324.11554, 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.
(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.
(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 125.2672.125.2670.
(c) "Blighted", "brownfield plan",
"eligible activities", "facility", "functionally
obsolete", "qualified local governmental unit", and
"response activity" mean those terms as defined in the brownfield
redevelopment financing act, 1996 PA 381, MCL 125.2651 to 125.2672.125.2670.
(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, 125.2670, 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
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), 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 natural
resources and environment 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.
(33) For purposes of subsection (2), eligible property means
that term as defined under subsection (32)(e) except that all of the following
apply:
(a) Eligible property means property identified under a
brownfield plan that was used or is currently used for commercial, industrial,
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, part 2 of the recodified tax increment financing act, 2018
PA 57, MCL 125.4201 to 125.4230, and is functionally obsolete or
blighted, and a component of the project on that eligible property is 1 or more
of the following:
(A) Infrastructure improvements that directly benefit the
eligible property.
(B) Demolition of structures that is not response activity
under section 20101 of the natural resources and environmental protection act,
1994 PA 451, MCL 324.20101.
(C) Lead or asbestos abatement.
(D) Site preparation that is not response activity under
section 20101 of the natural resources and environmental protection act, 1994
PA 451, MCL 324.20101.
(iii) Property for
which eligible activities are identified under the brownfield plan, is not in a
qualified local governmental unit, and is a facility.
(b) Eligible property includes parcels that are adjacent or
contiguous to the eligible property if the development of the adjacent or
contiguous parcels is estimated to increase the captured taxable value of the
property or tax reverted property owned or under the control of a land bank
fast track authority pursuant to the land bank fast track act, 2003 PA 258, MCL
124.751 to 124.774.
(c) Eligible property includes, to the extent included in the
brownfield plan, personal property located on the eligible property.
(d) Eligible property does not include qualified agricultural
property exempt under section 7ee of the general property tax act, 1893 PA 206,
MCL 211.7ee, from the tax levied by a local school district for school
operating purposes to the extent provided under section 1211 of the revised
school code, 1976 PA 451, MCL 380.1211.
