Bill Text: MI SB0271 | 2013-2014 | 97th Legislature | Enrolled
Bill Title: Economic development; Michigan strategic fund; community revitalization program; modify. Amends secs. 88r, 90a, 90b, 90c & 90d of 1984 PA 270 (MCL 125.2088r et seq.).
Spectrum: Bipartisan Bill
Status: (Passed) 2014-12-31 - Assigned Pa 0506'14 With Immediate Effect [SB0271 Detail]
Download: Michigan-2013-SB0271-Enrolled.html
STATE OF MICHIGAN
97TH LEGISLATURE
REGULAR SESSION OF 2014
Introduced by Senators Smith and Kowall
ENROLLED SENATE BILL No. 271
AN ACT to amend 1984 PA 270, entitled “An act relating to the economic development of this state; to create the Michigan strategic fund and to prescribe its powers and duties; to transfer and provide for the acquisition and succession to the rights, properties, obligations, and duties of the job development authority and the Michigan economic development authority to the Michigan strategic fund; to provide for the expenditure of proceeds in certain funds to which the Michigan strategic fund succeeds in ownership; to provide for the issuance of, and terms and conditions for, certain notes and bonds of the Michigan strategic fund; to create certain boards and funds; to create certain permanent funds; to exempt the property, income, and operation of the fund and its bonds and notes, and the interest thereon, from certain taxes; to provide for the creation of certain centers within and for the purposes of the Michigan strategic fund; to provide for the creation and funding of certain accounts for certain purposes; to impose certain powers and duties upon certain officials, departments, and authorities of this state; to make certain loans, grants, and investments; to provide penalties; to make an appropriation; and to repeal acts and parts of acts,” by amending sections 88r, 90a, 90b, 90c, and 90d (MCL 125.2088r, 125.2090a, 125.2090b, 125.2090c, and 125.2090d), section 88r as added by 2011 PA 250 and sections 90a, 90b, 90c, and 90d as amended by 2012 PA 395.
The People of the State of Michigan enact:
Sec. 88r. (1) The fund shall create and operate the Michigan business development program to provide grants, loans, and other economic assistance to qualified businesses that make qualified investments in this state or provide qualified new jobs in this state.
(2) The Michigan business development program shall provide for all of the following:
(a) Grants, loans, and other economic assistance to assist qualified businesses in making qualified investments and providing new jobs in this state, with preference given to qualified businesses that need additional assistance for deal‑closing and for second stage company gap financing.
(b) A detailed application, approval, and compliance process published and available on the fund’s website. The detailed application, approval, and compliance process shall, at a minimum, contain the following:
(i) A qualified business may apply for a grant, loan, or other economic assistance in a form and manner determined by the fund.
(ii) After receipt of an application, the fund may enter into a written agreement with the qualified business if the qualified business agrees to make certain qualified investments or create a certain number of new jobs in this state.
(iii) The written agreement shall provide in a clear and concise manner all of the conditions imposed, including specific time frames, on the qualified business to receive a grant, loan, or other economic assistance under this section.
(iv) The written agreement shall provide for a repayment provision of any grants, loans, or other economic assistance if the qualified business fails to comply with the provisions of the written agreement.
(v) The written agreement shall provide for an audit provision that requires the fund to verify that established milestones for the project have been met.
(c) In any fiscal year, a qualified business shall not receive more than $10,000,000.00 for a project funded under this section.
(3) The fund shall not enter into a written agreement with a qualified business unless all of the following are met:
(a) The municipality makes a staff, financial, or economic commitment to the project as determined by the fund.
(b) The qualified business provides a business plan or demonstrates the need for the grant, loan, or other economic assistance.
(c) The qualified business agrees to provide the data described in the written agreement necessary for the fund to report to the legislature under this act.
(4) The fund shall post on its website or post on the website of the Michigan economic development corporation the name and location of each qualified business that received a grant, loan, or other economic assistance awarded under this section and the amount of the grant, loan, or other economic assistance.
(5) Beginning February 1, 2012 and not less than every 3 months thereafter, the fund shall post on its internet website the name and location of a qualified business that received approval of a grant, loan, or other economic assistance under this section in the immediately preceding 3-month period.
(6) The legislature finds and declares that funding authorized under this section to encourage diversification of the economy, to encourage capital investment in this state, and to promote the creation of qualified new jobs in this state is a public purpose and of paramount concern in the interest of the health, safety, and general welfare of the citizens of this state.
(7) As used in this section:
(a) “Other economic assistance” means any other form of assistance allowed under this act that is not a grant or a loan.
(b) “Qualified business” means a business that is located in or operates in this state or will locate or will operate in this state as determined by the fund. A qualified business may include more than 1 business as determined by the fund board.
(c) “Qualified investment” means investment in this state related to a project subject to a written agreement under this section.
(d) “Qualified new job” means a job performed by an individual who is a resident of this state whose Michigan income taxes are withheld by an employer, or an employee leasing company or professional employer organization on behalf of the employer, that is in excess of the number of jobs maintained by the qualified business maintained in this state prior to the expansion or location, as determined and verified by the fund.
Sec. 90a. As used in this chapter:
(a) “Community revitalization grant” or “grant” means a grant that is approved under section 90b and that is subject to requirements in section 90c.
(b) “Community revitalization incentive” means a community revitalization grant, a community revitalization loan, or other economic assistance.
(c) “Community revitalization loan” or “loan” means a loan that is approved under section 90b and that is subject to the requirements in section 90d.
(d) “Eligible investment” means 1 or more of the following, subject to a written agreement under this section, including investment which occurred prior to the approval of the application, to the extent that the project has not been completely reimbursed to or been paid for on behalf of the person requesting a community revitalization incentive under this chapter:
(i) Any demolition, construction, alteration, rehabilitation, or improvement of buildings.
(ii) Site improvements.
(iii) The addition of machinery, equipment, or fixtures to the approved project.
(iv) Architectural, engineering, surveying, and similar professional fees but not certain soft costs of the eligible investment as determined by the board, including, but not limited to, developer fees, appraisals, performance bonds, closing costs, bank fees, loan fees, risk contingencies, financing costs, permanent or construction period interest, legal expenses, leasing or sales commissions, marketing costs, professional fees, shared savings, taxes, title insurance, bank inspection fees, insurance, and project management fees.
(e) “Eligible property” means property that meets 1 or more of the following conditions:
(i) Is determined to be a facility. As used in this subparagraph, “facility” means that term as defined in section 2 of the brownfield redevelopment financing act, 1996 PA 381, MCL 125.2652.
(ii) Is a historic resource. As used in this subparagraph, “historic resource” means a publicly or privately owned historic building, structure, site, object, feature, or open space either manmade or natural, individually listed or located within and contributing to a historic district designated by the national register of historic places, the state register of historic sites, or a local unit acting under the local historic districts act, 1970 PA 169, MCL 399.201 to 399.215.
(iii) Is blighted property. As used in this subparagraph, “blighted property” means property that meets any of the following criteria:
(A) Has been declared a public nuisance in accordance with a local housing, building, plumbing, fire, or other related code or ordinance.
(B) Is an attractive nuisance to children because of physical condition, use, or occupancy.
(C) Is a fire hazard or is otherwise dangerous to the safety of persons or property.
(D) Has had the utilities, plumbing, heating, or sewerage permanently disconnected, destroyed, removed, or rendered ineffective so that the property is unfit for its intended use.
(E) Is tax reverted property owned by a qualified local governmental unit, by a county, or by this state.
(F) Is property owned or under the control of a land bank fast track authority under the land bank fast track act, 2003 PA 258, MCL 124.751 to 124.774.
(G) Has substantial subsurface demolition debris buried on site so that the property is unfit for its intended use.
(iv) Is functionally obsolete property. As used in this subparagraph, “functionally obsolete” means that the property is unable to be used to adequately perform the function for which it was intended due to a substantial loss in value resulting from factors such as overcapacity, changes in technology, deficiencies or superadequacies in design, or other similar factors that affect the property itself or the property’s relationship with other surrounding property as determined by a Michigan advanced assessing officer or a Michigan master assessing officer.
(v) Is a parcel that is adjacent or contiguous to property described in subparagraphs (i) through (iv) if the development of the adjacent or contiguous parcel is estimated to increase the taxable value of the property described in subparagraphs (i) through (iv).
(vi) Any other property as determined by the fund board if the development of the property will promote community revitalization consistent with the findings and declarations in section 90.
(f) “Federal secretary of the interior’s standards for rehabilitation and guidelines for rehabilitating historic buildings, 36 CFR 67” means the nationally recognized federal standards that guide work undertaken on historic resources.
(g) “Other economic assistance” means any other form of assistance allowed under this act that is not a community revitalization loan or community revitalization grant.
Sec. 90b. (1) The fund shall create and operate the Michigan community revitalization program to provide community revitalization incentives for eligible investments on eligible property in this state. The fund shall develop and use a detailed application, approval, and compliance process adopted by a resolution of the board and published and available on the fund’s website. Program standards, guidelines, templates, or any other forms used by the fund to implement the Michigan community revitalization program shall be approved by the board.
(2) A person or 2 or more persons may apply to the fund for approval of community revitalization incentives associated with a project under this section. Community revitalization incentives shall not be approved for any property that is not eligible property.
(3) Funds appropriated for programs under this chapter shall be placed in the 21st century jobs trust fund created in the Michigan trust fund act, 2000 PA 489, MCL 12.251 to 12.260.
(4) Subject to section 88c, the fund shall review all applications for community revitalization incentives. As part of the application, the applicant shall include documentation establishing that the project is located on eligible property and a project description that includes a project pro-forma. The fund shall consider the following criteria to the extent reasonably applicable as reasonably determined by the fund board or its designee to the type of project proposed when approving a community revitalization inventive:
(a) The importance of the project to the community in which it is located.
(b) If the project will act as a catalyst for additional revitalization of the community in which it is located.
(c) The amount of local community and financial support for the project.
(d) The applicant’s financial need for a community revitalization incentive.
(e) The extent of reuse of vacant buildings, reuse of historic resources, and redevelopment of blighted property.
(f) Creation of jobs.
(g) The level of private sector and other contributions, including, but not limited to, federal funds and federal tax credits.
(h) Whether the project is financially and economically sound.
(i) Whether the project increases the density of the area.
(j) Whether the project promotes mixed-use development and walkable communities.
(k) Whether the project converts abandoned public buildings to private use.
(l) Whether the project promotes sustainable development.
(m) Whether the project involves the rehabilitation of a historic resource.
(n) Whether the project addresses areawide redevelopment.
(o) Whether the project addresses underserved markets of commerce.
(p) The level and extent of environmental contamination.
(q) If the rehabilitation of the historic resource will meet the federal secretary of the interior’s standards for rehabilitation and guidelines for rehabilitating historic buildings, 36 CFR 67, when applied after engaging in discussions with the state historic preservation office.
(r) Whether the project will compete with or affect existing Michigan businesses within the same industry.
(s) Any other additional criteria approved by the board that are specific to each individual project and are consistent with the findings and intent of this chapter.
(5) An application shall be approved or denied not more than 90 days after receipt of the application that is considered administratively complete by the board or its designee. If the application is neither approved nor denied within 90 days after being considered administratively complete, it shall be considered by the fund board, or its president if delegated, for action at, or by, the next regularly scheduled board meeting. If an application is approved, the fund shall determine the amount of community revitalization incentives for the project based on the fund’s review of the application and the criteria specified in subsection (4).
(6) Except as otherwise provided in this subsection, the amount of community revitalization incentives that the board may approve for a single project shall not exceed 25% of a project’s eligible investment up to $10,000,000.00. A community revitalization loan shall not exceed $10,000,000.00, and a community revitalization grant shall not exceed $1,500,000.00. However, a combination of loans, grants, and other economic assistance under this chapter shall not exceed $10,000,000.00 per project. The board may not approve $10,000,000.00 per project in community revitalization incentives to more than 3 projects per fiscal year. The board shall approve not less than 5 projects of $1,000,000.00 or less per project per fiscal year. If, after reviewing all applications in a fiscal year, the fund determines that less than 5 projects warranted an award of $1,000,000.00 or less, this subsection shall not apply. Notwithstanding any other limitation in this subsection, each year, of the community revitalization projects approved by the board, the board may approve up to 3 single projects that shall not exceed 50% of a project’s eligible investment up to $10,000,000.00 for community revitalization loans and grants for the specific purpose of historic preservation.
(7) When the board approves an application and determines the amount of community revitalization incentives, the board shall enter into a written agreement with the applicant. The written agreement shall provide in a clear and concise manner all of the conditions imposed, including specific time frames, on the applicant to receive the community revitalization incentive under this chapter. The written agreement shall provide for the secured status of any loan, repayment, and penalties if the applicant fails to comply with the provisions of the written agreement as determined by the board. The applicant shall agree to provide the data described in the written agreement that is necessary for the fund to report to the legislature under this chapter.
(8) Not more than 4% of the annual appropriation as provided by law from the 21st century jobs trust fund established 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. The MEDC may charge actual and reasonable fees for costs associated with the community revitalization incentive authorized under this chapter. These fees are in addition to an amount of the appropriation used for administering the programs and activities authorized under this chapter.
(9) The legislature finds and declares that funding authorized under this section is intended to encourage diversification of the economy, to encourage capital investment in this state, to promote the creation of qualified new jobs in this state, and to promote the investment in brownfield and historic preservation projects that reclaim previously used property that is less likely to be revitalized without the investment.
Sec. 90c. Upon satisfying a milestone established in a written agreement for which the board has approved a community revitalization grant under section 90b, the applicant may apply to the fund for a grant disbursement as specified in the written agreement. All or a portion of the rights or obligations of the applicant under the written grant agreement may be assigned by the applicant to 1 or more assignees with prior written approval of, and on terms and conditions acceptable to, the fund. The board, or its designee, shall develop and implement the use of an application form and assignment form to be used under this section. Within 90 days of receipt of an application for disbursement, the fund or its designee shall then determine whether the project is in compliance with the terms of the written agreement and, if applicable, after engaging in discussions with the state historic preservation officer, is in compliance, or when completed will be in compliance, with the federal secretary of the interior’s standards for rehabilitation and guidelines for rehabilitating historic buildings, 36 CFR 67. If the fund or its designee determines that the project is in compliance with the written agreement and, if applicable, after engaging in discussions with the state historic preservation officer, is in compliance, or when completed will be in compliance, with the federal secretary of the interior’s standards for rehabilitation and guidelines for rehabilitating historic buildings, 36 CFR 67, the fund shall issue the grant proceeds to the applicant or, if the grant has been assigned, to the assignee.
Sec. 90d. (1) Upon satisfying a milestone established in a written agreement for which the board has approved a community revitalization loan under section 90b, the applicant may apply to the fund for a loan disbursement as specified in the written agreement. All or a portion of the rights or obligations of the applicant under the written loan agreement may be assigned by the applicant to 1 or more assignees with prior written approval of, and on terms and conditions acceptable to, the fund. The board, or its designee, shall develop and implement the use of an application for disbursement form and assignment form to be used under this subsection. Within 90 days of receipt or disbursement of an application for disbursement, the fund or its designee shall determine whether the project is in compliance with the written agreement and, if applicable, after engaging in discussions with the state historic preservation officer, is in compliance, or when completed will be in compliance, with the federal secretary of the interior’s standards for rehabilitation and guidelines for rehabilitating historic buildings, 36 CFR 67. If the fund or its designee determines that the project is in compliance with the written agreement and, if applicable, after engaging in discussions with the state historic preservation officer, is in compliance, or when completed will be in compliance, with the federal secretary of the interior’s standards for rehabilitation and guidelines for rehabilitating historic buildings, 36 CFR 67, the fund shall distribute the loan proceeds to the applicant or, if the loan proceeds have been assigned, to the assignee.
(2) Each written agreement for a community revitalization loan shall contain a repayment provision.
(3) The proceeds from repayment of community revitalization loans under subsection (2) shall be paid into the investment fund described in section 88h and expended exclusively for community revitalization incentives under this chapter.
(4) Beginning February 1, 2012 and not less than every 3 months thereafter, the fund shall post on its internet website the name and location of a person who received approval of community revitalization investment under this chapter in the immediately preceding 3-month period.
This act is ordered to take immediate effect.
Secretary of the Senate
Clerk of the House of Representatives
Approved
Governor
