HOUSE BILL NO. 4272

February 28, 2019, Introduced by Reps. Coleman, Lasinski, Cambensy, Elder, Hertel, Haadsma, Robinson, Kennedy, Brenda Carter and Sneller and referred to the Committee on Commerce and Tourism.

A bill to amend 1984 PA 270, entitled

"Michigan strategic fund act,"

by amending section 88r (MCL 125.2088r), as amended by 2018 PA 458.

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 must, 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 must 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 must 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 must provide for an audit provision that requires the fund to verify that established milestones for the project have been met.

(vi) The written agreement must provide that the qualified business will follow a competitive bid process for the construction, rehabilitation, development, or renovation of a facility or project that is a qualified investment, and that this process will be open to all Michigan residents and firms. The qualified business may not discriminate against any contractor on the basis of its affiliation or nonaffiliation with any collective bargaining organization.

(vii) The written agreement must provide that the qualified business will make a good-faith effort to employ, if qualified, Michigan residents at the facility or project that is a qualified investment.

(viii) The written agreement must provide that the qualified business will make a good-faith effort to employ or contract with Michigan residents and firms to construct, rehabilitate, develop, or renovate the facility or project that is a qualified investment.

(ix) The written agreement must provide that the qualified business is encouraged to make a good-faith effort to utilize Michigan-based suppliers and vendors when purchasing goods and services.

(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.

(d) The qualified business agrees to all the provisions of the Michigan business development program contained in subsection (2).

(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, to encourage the hiring of residents of this state, to encourage the hiring of Michigan-based suppliers and vendors, 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, or by an individual who is not a resident of this state and is employed by a business at a project location that is located in this state, provided that the business certifies in writing at the time of disbursement that not less than 75% of the employees of that business are residents of this state, that is in excess of the number of jobs maintained by the qualified business in this state prior to the expansion or location, as determined and verified by the fund.