Bill Text: MI HB4207 | 2017-2018 | 99th Legislature | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Economic development; development incentives; incentive for certain grocery stores to locate in urban areas; create, and provide funding from the community revitalization program. Amends secs. 90a & 90b of 1984 PA 270 (MCL 125.2090a & 125.2090b).

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2017-12-28 - Assigned Pa 239'17 With Immediate Effect [HB4207 Detail]

Download: Michigan-2017-HB4207-Engrossed.html

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HB-4207, As Passed House, November 7, 2017

 

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 4207

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1984 PA 270, entitled

 

"Michigan strategic fund act,"

 

by amending sections 90a and 90b (MCL 125.2090a and 125.2090b), as

 

amended by 2014 PA 506.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     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 that 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) Through September 30, 2022, is used for a neighborhood

 

and commercial corridor food initiative.

 

     (vii) (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) "Neighborhood and commercial corridor food initiative"

 

means property that will be used primarily as a retail supermarket,

grocery store, produce market, or delicatessen that is located in a

 

downtown area or in a development area as defined in section 2 of

 

the corridor improvement authority act, 2005 PA 280, MCL 125.2872,

 

as determined by the board, that offers unprocessed USDA-inspected

 

meat and poultry products or meat products that carry the USDA

 

organic seal, fresh fruits and vegetables, and dairy products for

 

sale to the public.

 

     (h) (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

 

must be placed in the 21st century jobs trust fund created in the

 

Michigan trust fund act, 2000 PA 489, MCL 12.251 to 12.260.12.262.

     (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:incentive:

 

     (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 must 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 does 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. Beginning for the 2017-2018 fiscal year and

 

through the 2021-2022 fiscal year, except as otherwise provided in

 

subsection (9), not less than 5% of community revitalization

 

incentives shall be awarded to neighborhood and commercial corridor

food initiatives.

 

     (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 must 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 must 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, 12.262,

 

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 application process for community revitalization

 

incentives for neighborhood and commercial corridor food

 

initiatives must provide that applications for neighborhood and

 

commercial corridor food initiatives must be received on or before

 

June 1 for that fiscal year. If there are insufficient approved

 

applications in a fiscal year for community revitalization

 

incentives for neighborhood and commercial corridor food

 

initiatives, then the remaining allocated funds may be used for

 

community revitalization incentives that are not for neighborhood

 

and commercial corridor food initiatives as determined by the

 

board. In addition, a new neighborhood and commercial corridor food

 

initiative, as determined by the board, is not eligible for a

 

community revitalization incentive if it is located within 1 mile

 

of an existing retail supermarket, grocery store, or produce

 

market, as determined by the board, that offers unprocessed USDA-

 

inspected meat and poultry products or meat products that carry the

 

USDA organic seal, fresh fruits and vegetables, and dairy products

 

for sale to the public.

 

     (10) (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.