March 10, 2009, Introduced by Rep. Leland and referred to the Committee on Commerce.
A bill to amend 2007 PA 36, entitled
"Michigan business tax act,"
by amending section 437 (MCL 208.1437), as amended by 2008 PA 578.
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, 2013,
or a taxpayer that received a preapproval letter prior to January
1, 2008 under section 38g of former 1975 PA 228 and has not
received a certificate of completion prior to the taxpayer's last
tax year, provided that the project is completed not more than 5
years after the preapproval letter for the project is issued unless
extended under subsection (9) or if it is a multiphase project not
more than 10 years after the preapproval letter, as amended, if
applicable, for the project is issued, or an assignee under
subsection (20), (21), or (22) may claim a credit that has been
approved under section 38g of former 1975 PA 228 or under
subsection (2), (3), or (4) against the tax imposed by this act
equal to either of the following:
(a) For projects approved before 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, if the
total of all eligible investments for a project is more than
$10,000,000.00 but $300,000,000.00 or less, up to 12.5% of the
costs of the qualified taxpayer's eligible investment as determined
under subsection (11) paid or accrued by the qualified taxpayer on
an eligible property that, except as provided in subsection (6)(b),
is located in a qualified local governmental unit, up to 15% of the
cost of the qualified taxpayer's eligible investment as determined
under subsection (11) paid or accrued by the qualified taxpayer on
an eligible property if the project is designated as an urban
development area project by the Michigan economic growth authority,
or, until December 31, 2010, up to 20% of the costs of the
qualified taxpayer's eligible investment as determined under
subsection (11) paid or accrued by the qualified taxpayer on an
eligible property if the project is designated as an urban
development area project by the Michigan economic growth authority.
If eligible investment exceeds the amount of eligible investment in
the preapproval letter, as amended, for that project, the total of
all credits for the project shall not exceed the total of all
credits on the certificate of completion.
(2) If the cost of a project will be $2,000,000.00 or less, a
qualified taxpayer shall apply to the Michigan economic growth
authority for approval of the project under this subsection. An
application under this subsection shall state whether the project
is a multiphase project. Subject to the limitation provided under
subsection (31), 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 under subsection (4), and
the following limitations apply:
(a) Of the 20 projects allowed under this subsection, the
total of all credits for each project may be more than
$10,000,000.00 but $30,000,000.00 or less for only 1 project.
(b) Of the 20 projects allowed under this subsection, up to 3
projects may be approved for projects that are not in a qualified
local governmental unit if the property is a facility for which
eligible activities are identified in a brownfield plan or, for 1
of the 3 projects, if the property is not a facility but is
functionally obsolete or blighted, property identified in a
brownfield plan. For purposes of this subdivision, a facility
includes a building or complex of buildings that was used by a
state or federal agency and that is no longer being used for the
purpose for which it was used by the state or federal agency.
(c) The project allowed under subdivision (a) may also qualify
under subdivision (b).
(7) The Michigan economic growth authority shall review all
applications for projects under subsection (4) and, if an
application is approved, shall determine the maximum total of all
credits for that project. Before approving a project for which the
total of all credits will be more than $10,000,000.00 but
$30,000,000.00 or less only, the Michigan economic growth authority
shall determine that the project would not occur in this state
without the tax credit offered under subsection (4). The Michigan
economic growth authority shall consider the following criteria to
the extent reasonably applicable to the type of project proposed
when approving a project under subsection (4), and the chairperson
of the Michigan economic growth authority or his or her designee
shall consider the following criteria to the extent reasonably
applicable to the type of project proposed when approving a project
under subsection (2) or (3) or when considering an amendment to a
project under subsection (9):
(a) The overall benefit to the public.
(b) The extent of reuse of vacant buildings and redevelopment
of blighted property.
(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.
(10) A project may be a multiphase project. If a project is a
multiphase project, when each component of the multiphase project
is completed, the taxpayer shall submit documentation that the
component is complete, an accounting of the cost of the component,
and the eligible investment for the component of each taxpayer
eligible for a credit for the project of which the component is a
part to the Michigan economic growth authority or the designee of
the Michigan economic growth authority, who shall verify that the
component is complete. When the completion of the component is
verified, a component completion certificate shall be issued to the
qualified taxpayer which shall state that the taxpayer is a
qualified taxpayer, the credit amount for the component, the
qualified taxpayer's federal employer identification number or the
Michigan treasury number assigned to the taxpayer, and the project
number. The taxpayer may assign all or part of the credit for a
multiphase project as provided in this section after a component
completion certificate for a component is issued. The qualified
taxpayer may transfer ownership of or lease the completed component
and assign a proportionate share of the credit for the entire
project to the qualified taxpayer that is the new owner or lessee.
A multiphase project shall not be divided into more than 10
components. A component is considered to be completed when a
certificate of occupancy has been issued by the local municipality
in which the project is located for all of the buildings or
facilities that comprise the completed component and a component
completion certificate is issued or the chairperson of the Michigan
economic growth authority or his or her designee, for projects
approved under subsection (2) or (3), or the Michigan economic
growth authority, for projects approved under subsection (4),
verifies that the component is complete. A credit assigned based on
a multiphase project shall be claimed by the assignee in the tax
year in which the assignment is made. The total of all credits for
a multiphase project shall not exceed the amount stated in the
preapproval letter, as amended, for the project under subsection
(1). If all components of a multiphase project are not completed by
10 years after the date on which the preapproval letter, as
amended, if applicable, for the project was issued, the qualified
taxpayer that received the preapproval letter for the project shall
pay to the state treasurer, as a penalty, an amount equal to the
sum of all credits claimed and assigned for all components of the
multiphase project and no credits based on that multiphase project
shall be claimed after that date by the qualified taxpayer or any
assignee of the qualified taxpayer. The penalty under this
subsection is subject to interest on the amount of the credit
claimed or assigned determined individually for each component at
the rate in section 23(2) of 1941 PA 122, MCL 205.23, beginning on
the date that the credit for that component was claimed or
assigned. As used in this subsection, "proportionate share" means
the same percentage of the total of all credits for the project
that the qualified investment for the completed component is of the
total qualified investment stated in the preapproval letter, as
amended, for the entire project.
(11) When a project under this section is completed, the
taxpayer shall submit documentation that the project is completed,
an accounting of the cost of the project, the eligible investment
of each taxpayer if there is more than 1 taxpayer eligible for a
credit for the project, and, if the taxpayer is not the owner or
lessee of the eligible property on which the eligible investment
was made at the time the project is completed, that the taxpayer
was the owner or lessee of, or was a party to an agreement to
purchase or lease, that eligible property when all eligible
investment of the taxpayer was made. The chairperson of the
Michigan economic growth authority or his or her designee, for
projects approved under subsection (2) or (3), or the Michigan
economic growth authority, for projects approved under subsection
(4), shall verify that the project is completed. The Michigan
economic growth authority shall conduct an on-site inspection as
part of the verification process for projects approved under
subsection (4). When the completion of the project is verified, a
certificate of completion shall be issued to each qualified
taxpayer that has made eligible investment on that eligible
property. The certificate of completion shall state the total
amount of all credits for the project and that total shall not
exceed the maximum total of all credits listed in the preapproval
letter for the project under subsection (2), (3), or (4) as
applicable and as amended under subsection (9) and shall state all
of the following:
(a) That the taxpayer is a qualified taxpayer.
(b) The total cost of the project and the eligible investment
of each qualified taxpayer.
(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 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
324.11550, shall not be used as a basis for a credit under this
section.
(29) The Michigan economic growth authority annually shall
prepare and submit to the house of representatives and senate
committees responsible for tax policy and economic development
issues a report on the credits under subsections (2), (3), and (4).
The report shall include, but is not limited to, all of the
following:
(a) A listing of the projects under subsections (2), (3), and
(4) that were approved in the calendar year.
(b) The total amount of eligible investment for projects
approved under subsections (2), (3), and (4) in the calendar year.
(30) For purposes of this section, taxpayer includes a person
subject
to the tax imposed under chapters 2A and or 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) For tax years beginning on or after January 1, 2009, an
otherwise qualified taxpayer who fails to comply with section 3 of
the Michigan corporate responsibility act or who fails to disclose
a civil or criminal offense as required by section 3 of the
Michigan corporate responsibility act is not eligible for the
credit under this section.
(33) (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.
(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.
(d) "Eligible investment" or "eligible investments" means,
when made after the approval date of the brownfield plan but in any
event no earlier than 90 days prior to the date of the preapproval
letter, any demolition, construction, restoration, alteration,
renovation, or improvement of buildings or site improvements on
eligible property and the addition of machinery, equipment, and
fixtures to eligible property after the date that eligible
activities on that eligible property have started pursuant to a
brownfield plan under the brownfield redevelopment financing act,
1996 PA 381, MCL 125.2651 to 125.2672, if the costs of the eligible
investment are not otherwise reimbursed to the taxpayer or paid for
on behalf of the taxpayer from any source other than the taxpayer.
The addition of leased machinery, equipment, or fixtures to
eligible property by a lessee of the machinery, equipment, or
fixtures is eligible investment if the lease of the machinery,
equipment, or fixtures has a minimum term of 10 years or is for the
expected useful life of the machinery, equipment, or fixtures, and
if the owner of the machinery, equipment, or fixtures is not the
qualified taxpayer with regard to that machinery, equipment, or
fixtures. For projects approved after 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) (34), means property for which eligible activities
are identified under a brownfield plan that was used or is
currently used for commercial, industrial, public, or residential
purposes, including personal property located on the property, to
the extent included in the brownfield plan, and that is 1 or more
of the following:
(i) Is in a qualified local governmental unit and is a
facility, functionally obsolete, or blighted and includes parcels
that are adjacent or contiguous to that property if the development
of the adjacent and contiguous parcels is estimated to increase the
captured taxable value of that property.
(ii) Is not in a qualified local governmental unit and is a
facility, and includes parcels that are adjacent or contiguous to
that property if the development of the adjacent and contiguous
parcels is estimated to increase the captured taxable value of that
property.
(iii) Is tax reverted property owned or under the control of a
land bank fast track authority.
(f) "Last tax year" means the taxpayer's tax year under former
1975 PA 228 that begins after December 31, 2006 and before January
1, 2008.
(g) "Michigan economic growth authority" means the Michigan
economic growth authority created in the Michigan economic growth
authority act, 1995 PA 24, MCL 207.801 to 207.810.
(h) "Multiphase project" means a project approved under this
section that has more than 1 component, each of which can be
completed separately.
(i) "Personal property" means that term as defined in section
8 of the general property tax act, 1893 PA 206, MCL 211.8, except
that personal property does not include either of the following:
(i) Personal property described in section 8(h), (i), or (j) of
the general property tax act, 1893 PA 206, MCL 211.8.
(ii) Buildings described in section 14(6) of the general
property tax act, 1893 PA 206, MCL 211.14.
(j) "Project" means the total of all eligible investment on an
eligible property or, for purposes of subsection (6)(b), 1 of the
following:
(i) All eligible investment on property not in a qualified
local governmental unit that is a facility.
(ii) All eligible investment on property that is not a facility
but is functionally obsolete or blighted.
(k) "Qualified local governmental unit" means that term as
defined in the obsolete property rehabilitation act, 2000 PA 146,
MCL 125.2781 to 125.2797.
(l) "Qualified taxpayer" means a taxpayer that meets both of
the following criteria:
(i) Owns, leases, or has entered into an agreement to purchase
or lease eligible property.
(ii) Certifies that, except as otherwise provided in this
subparagraph, the department of environmental quality has not sued
or issued a unilateral order to the taxpayer pursuant to part 201
of the natural resources and environmental protection act, 1994 PA
451, MCL 324.20101 to 324.20142, to compel response activity on or
to the eligible property, or expended any state funds for response
activity on or to the eligible property and demanded reimbursement
for those expenditures from the qualified taxpayer. However, if the
taxpayer has completed all response activity required by part 201
of the natural resources and environmental protection act, 1994 PA
451, MCL 324.20101 to 324.20142, is in compliance with any deed
restriction or administrative or judicial order related to the
required response activity, and has reimbursed the state for all
costs incurred by the state related to the required response
activity, the taxpayer meets the criteria under this subparagraph.
(m) "Urban development area project" means a project located
on eligible property in the downtown or traditional central
business district of a qualified local governmental unit or county
seat or along a traditional commercial corridor of a qualified
local governmental unit or county seat as determined by the
Michigan economic growth authority or the chairperson of the
Michigan economic growth authority or his or her designee.
(34) (33)
For purposes of subsection (2),
eligible property
means
that term as defined under subsection (32)(e) (33)(e) except
that all of the following apply:
(a) Eligible property means property identified under a
brownfield plan that was used or is currently used for commercial,
industrial, public, or residential purposes and that is 1 of the
following:
(i) Property for which eligible activities are identified under
the brownfield plan, is in a qualified local governmental unit, and
is a facility, functionally obsolete, or blighted.
(ii) Property that is not in a qualified local governmental
unit but is within a downtown development district established
under 1975 PA 197, MCL 125.1651 to 125.1681, and is functionally
obsolete or blighted, and a component of the project on that
eligible property is 1 or more of the following:
(A) Infrastructure improvements that directly benefit the
eligible property.
(B) Demolition of structures that is not response activity
under section 20101 of the natural resources and environmental
protection act, 1994 PA 451, MCL 324.20101.
(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.