HB-4550, As Passed House, March 25, 2010

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 4550

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 2007 PA 36, entitled

 

"Michigan business tax act,"

 

by amending section 437 (MCL 208.1437), as amended by 2009 PA 241.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 437. (1) Subject to the criteria under this section, a

 

qualified taxpayer that has unused credits or has a preapproval

 

letter issued after December 31, 2007 and before January 1, 2014,

 

or a taxpayer that received a preapproval letter prior to January

 

1, 2008 under section 38g of former 1975 PA 228 and has not

 

received a certificate of completion prior to the taxpayer's last

 

tax year, provided that the project is completed not more than 5

 

years after the preapproval letter for the project is issued unless

 

extended under subsection (9) or if it is a multiphase project not

 

more than 10 years after the preapproval letter, as amended, if

 

applicable, for the project is issued, or an assignee under

 

subsection (20), (21), or (22) may claim a credit that has been

 

approved under section 38g of former 1975 PA 228 or under

 

subsection (2), (3), or (4) against the tax imposed by this act

 

equal to either of the following:

 

     (a) For projects approved before April 8, 2008, if the total

 

of all credits for a project is $1,000,000.00 or less, 10% of the

 

cost of the qualified taxpayer's eligible investment paid or

 

accrued by the qualified taxpayer on an eligible property provided

 

that the project does not exceed the amount stated in the

 

preapproval letter, as amended. For projects approved, or amended,

 

on and after April 8, 2008, if the total of all eligible

 

investments for a project are $10,000,000.00 or less, up to 12.5%

 

of the costs of the qualified taxpayer's eligible investment paid

 

or accrued by the qualified taxpayer on an eligible property or up

 

to 15% of the costs of the qualified taxpayer's eligible investment

 

paid or accrued by the qualified taxpayer on an eligible property

 

if the project is designated as an urban development area project

 

by the Michigan economic growth authority to the extent that the

 

project does not exceed the amount stated in the preapproval

 

letter, as amended, or, until December 31, 2010, up to 20% of the

 

costs of the qualified taxpayer's eligible investment paid or

 

accrued by the qualified taxpayer on an eligible property if the

 

project is designated as an urban development area project by the

 

Michigan economic growth authority. If eligible investment exceeds

 

the amount of eligible investment in the preapproval letter, as

 

amended, for that project, the total of all credits for the project

 

shall not exceed the total of all credits on the certificate of

 

completion.

 

     (b) For projects approved before April 8, 2008, if the total

 

of all credits for a project is more than $1,000,000.00 but

 

$30,000,000.00 or less and, except as provided in subsection

 

(6)(b), the project is located in a qualified local governmental

 

unit, a percentage as determined by the Michigan economic growth

 

authority not to exceed 10% of the cost of the qualified taxpayer's

 

eligible investment as determined under subsection (11) paid or

 

accrued by the qualified taxpayer on an eligible property. For

 

projects approved, or amended, on and after April 8, 2008 and

 

before January 1, 2010, if the total of all eligible investments

 

for a project is more than $10,000,000.00 but $300,000,000.00 or

 

less, up to 12.5% of the costs of the qualified taxpayer's eligible

 

investment as determined under subsection (11) paid or accrued by

 

the qualified taxpayer on an eligible property that, except as

 

provided in subsection (6)(b), is located in a qualified local

 

governmental unit, up to 15% of the cost of the qualified

 

taxpayer's eligible investment as determined under subsection (11)

 

paid or accrued by the qualified taxpayer on an eligible property

 

if the project is designated as an urban development area project

 

by the Michigan economic growth authority, or, until December 31,

 

2010, up to 20% of the costs of the qualified taxpayer's eligible

 

investment as determined under subsection (11) paid or accrued by

 

the qualified taxpayer on an eligible property if the project is

 

designated as an urban development area project by the Michigan

 

economic growth authority. For projects approved, or amended, on

 

and after January 1, 2010, if the total of all eligible investments

 

for a project is more than $10,000,000.00 but $100,000,000.00 or

 

less, up to 12.5% of the costs of the qualified taxpayer's eligible

 

investment as determined under subsection (11) paid or accrued by

 

the qualified taxpayer on an eligible property that, except as

 

provided in subsection (6)(b), is located in a qualified local

 

governmental unit, up to 15% of the cost of the qualified

 

taxpayer's eligible investment as determined under subsection (11)

 

paid or accrued by the qualified taxpayer on an eligible property

 

if the project is designated as an urban development area project

 

by the Michigan economic growth authority, or, until December 31,

 

2010, up to 20% of the costs of the qualified taxpayer's eligible

 

investment as determined under subsection (11) paid or accrued by

 

the qualified taxpayer on an eligible property if the project is

 

designated as an urban development area project by the Michigan

 

economic growth authority. If eligible investment exceeds the

 

amount of eligible investment in the preapproval letter, as

 

amended, for that project, the total of all credits for the project

 

shall not exceed the total of all credits on the certificate of

 

completion.

 

     (2) If the cost of a project will be $2,000,000.00 or less, a

 

qualified taxpayer shall apply to the Michigan economic growth

 

authority for approval of the project under this subsection. An

 

application under this subsection shall state whether the project

 

is a multiphase project. Subject to the limitation provided under

 

subsection (31), the chairperson of the Michigan economic growth

 

authority or his or her designee is authorized to approve an

 

application or project under this subsection. Only the chairperson

 

of the Michigan economic growth authority is authorized to deny an

 

application or project under this subsection. A project shall be

 

approved or denied not more than 45 days after receipt of the

 

application. If the chairperson of the Michigan economic growth

 

authority or his or her designee does not approve or deny the

 

application within 45 days after the application is received by the

 

Michigan economic growth authority, the application is considered

 

approved as written. If the chairperson of the Michigan economic

 

growth authority or his or her designee approves a project under

 

this subsection, the chairperson of the Michigan economic growth

 

authority or his or her designee shall issue a preapproval letter

 

that states that the taxpayer is a qualified taxpayer; the maximum

 

total eligible investment for the project on which credits may be

 

claimed and the maximum total of all credits for the project when

 

the project is completed and a certificate of completion is issued;

 

and the project number assigned by the Michigan economic growth

 

authority. If a project is denied under this subsection, a taxpayer

 

is not prohibited from subsequently applying under this subsection

 

for the same project or for another project. The Michigan economic

 

growth authority shall develop and implement the use of the

 

application form to be used for projects under this subsection.

 

     (3) If the cost of a project will be for more than

 

$2,000,000.00 but $10,000,000.00 or less, a qualified taxpayer

 

shall apply to the Michigan economic growth authority for approval

 

of the project under this subsection. An application under this

 

subsection shall state whether the project is a multiphase project.

 

Subject to the limitation provided under subsection (31), the

 

chairperson of the Michigan economic growth authority or his or her

 

designee is authorized to approve an application or project under

 

this subsection. Only the chairperson of the Michigan economic

 

growth authority is authorized to deny an application or project

 

under this subsection. A project shall be approved or denied not

 

more than 45 days after receipt of the application. If the

 

chairperson of the Michigan economic growth authority or his or her

 

designee does not approve or deny an application within 45 days

 

after the application is received by the Michigan economic growth

 

authority, the application is considered approved as written. The

 

criteria in subsection (7) shall be used when approving projects

 

under this subsection. When approving projects under this

 

subsection, priority shall be given to projects on a facility. The

 

total of all credits for an approved project under this subsection

 

shall not exceed the amounts authorized under subsection (1)(a). A

 

taxpayer may apply under this subsection instead of subsection (4)

 

for approval of a project that will be for more than

 

$10,000,000.00, but the total of all credits for that project shall

 

not exceed the amounts authorized under subsection (1)(a). If the

 

chairperson of the Michigan economic growth authority or his or her

 

designee approves a project under this subsection, the chairperson

 

of the Michigan economic growth authority or his or her designee

 

shall issue a preapproval letter that states that the taxpayer is a

 

qualified taxpayer; the maximum total eligible investment for the

 

project on which credits may be claimed and the maximum total of

 

all credits for the project when the project is completed and a

 

certificate of completion is issued; and the project number

 

assigned by the Michigan economic growth authority. If a project is

 

denied under this subsection, a taxpayer is not prohibited from

 

subsequently applying under this subsection or subsection (4) for

 

the same project or for another project.

 

     (4) If the cost of a project will be for more than

 

$10,000,000.00 and, except as provided in subsection (6)(b), the

 

project is located in a qualified local governmental unit, a

 

qualified taxpayer shall apply to the Michigan economic growth

 

authority for approval of the project. An application under this

 

subsection shall state whether the project is a multiphase project.

 

The Michigan economic growth authority shall approve or deny the

 

project not more than 65 days after receipt of the application. A

 

project under this subsection shall not be approved without the

 

concurrence of the state treasurer. If the Michigan economic growth

 

authority does not approve or deny the application within 65 days

 

after it receives the application, the Michigan economic growth

 

authority shall send the application to the state treasurer. The

 

state treasurer shall approve or deny the application within 5 days

 

after receipt of the application. If the state treasurer does not

 

deny the application within 5 days after receipt of the

 

application, the application is considered approved. The Michigan

 

economic growth authority shall approve a limited number of

 

projects under this subsection during each calendar year as

 

provided in subsection (6). The Michigan economic growth authority

 

shall use the criteria in subsection (7) when approving projects

 

under this subsection, when determining the total amount of

 

eligible investment, and when determining the percentage of

 

eligible investment for the project to be used to calculate a

 

credit. The total of all credits for an approved project under this

 

subsection shall not exceed the amount designated in the

 

preapproval letter, as amended, for that project. If the Michigan

 

economic growth authority approves a project under this subsection,

 

the Michigan economic growth authority shall issue a preapproval

 

letter that states that the taxpayer is a qualified taxpayer; the

 

percentage of eligible investment for the project determined by the

 

Michigan economic growth authority for purposes of subsection

 

(1)(b); the maximum total eligible investment for the project on

 

which credits may be claimed and the maximum total of all credits

 

for the project when the project is completed and a certificate of

 

completion is issued; and the project number assigned by the

 

Michigan economic growth authority. The Michigan economic growth

 

authority shall send a copy of the preapproval letter to the

 

department. If a project is denied under this subsection, a

 

taxpayer is not prohibited from subsequently applying under this

 

subsection or subsection (3) for the same project or for another

 

project.

 

     (5) If the project is on property that is functionally

 

obsolete, the taxpayer shall include with the application an

 

affidavit signed by a level 3 or level 4 assessor, that states that

 

it is the assessor's expert opinion that the property is

 

functionally obsolete and the underlying basis for that opinion.

 

     (6) The Michigan economic growth authority may approve not

 

more than 20 projects each calendar year through December 31, 2009,

 

not more than 19 projects for the 2010 calendar year, and, except

 

as otherwise provided under subdivision (d), not more than 17

 

projects for each calendar year after December 31, 2010 under

 

subsection (4), and the following limitations apply:

 

     (a) Of the projects allowed under this subsection, the total

 

of all credits for each project may be more than $10,000,000.00 but

 

$30,000,000.00 or less for only 1 project before December 31, 2009.

 

     (b) Of the projects allowed under this subsection, up to 3

 

projects may be approved for projects that are not in a qualified

 

local governmental unit if the property is a facility for which

 

eligible activities are identified in a brownfield plan or, for 1

 

of the 3 projects, if the property is not a facility but is

 

functionally obsolete or blighted, property identified in a

 

brownfield plan. For purposes of this subdivision, a facility

 

includes a building or complex of buildings that was used by a

 

state or federal agency and that is no longer being used for the

 

purpose for which it was used by the state or federal agency.

 

     (c) The project allowed under subdivision (a) may also qualify

 

under subdivision (b).

 

     (d) If the Michigan economic growth authority determines that

 

there are previously issued credits authorized under section 434(6)

 

available, the Michigan economic growth authority may approve 2

 

additional projects for each calendar year after December 31, 2010.

 

As used in this subdivision, "previously issued credits" means the

 

total amount of credits authorized by the Michigan economic growth

 

authority for a taxpayer under section 434(6) that meets all of the

 

following:

 

     (i) The taxpayer did not use any or a portion of the credits

 

authorized under the written agreement under section 434(6).

 

     (ii) The authority determined at a meeting upon a vote of the

 

majority of the members present that the credits previously

 

authorized satisfy subparagraph (i).

 

     (7) The Michigan economic growth authority shall review all

 

applications for projects under subsection (4) and, if an

 

application is approved, shall determine the maximum total of all

 

credits for that project. Before approving a project for which the

 

total of all credits will be more than $10,000,000.00 but

 

$30,000,000.00 or less only, the Michigan economic growth authority

 

shall determine that the project would not occur in this state

 

without the tax credit offered under subsection (4). The Michigan

 

economic growth authority shall consider the following criteria to

 

the extent reasonably applicable to the type of project proposed

 

when approving a project under subsection (4), and the chairperson

 

of the Michigan economic growth authority or his or her designee

 

shall consider the following criteria to the extent reasonably

 

applicable to the type of project proposed when approving a project

 

under subsection (2) or (3) or when considering an amendment to a

 

project under subsection (9):

 

     (a) The overall benefit to the public.

 

     (b) The extent of reuse of vacant buildings and redevelopment

 

of blighted property.

 

     (c) Creation of jobs.

 

     (d) Whether the eligible property is in an area of high

 

unemployment.

 

     (e) The level and extent of contamination alleviated by the

 

qualified taxpayer's eligible activities to the extent known to the

 

qualified taxpayer.

 

     (f) The level of private sector contribution.

 

     (g) The cost gap that exists between the site and a similar

 

greenfield site as determined by the Michigan economic growth

 

authority.

 

     (h) If the qualified taxpayer is moving from another location

 

in this state, whether the move will create a brownfield.

 

     (i) Whether the project is financially and economically sound.

 

     (j) Any other criteria that the Michigan economic growth

 

authority or the chairperson of the Michigan economic growth

 

authority, as applicable, considers appropriate for the

 

determination of eligibility under subsection (3) or (4).

 

     (8) A qualified taxpayer may apply for projects under this

 

section for eligible investment on more than 1 eligible property in

 

a tax year. Each project approved and each project for which a

 

certificate of completion is issued under this section shall be for

 

eligible investment on 1 eligible property.

 

     (9) If, after a taxpayer's project has been approved and the

 

taxpayer has received a preapproval letter but before the taxpayer

 

has made an eligible investment, other than soft costs, at the

 

property, the taxpayer determines that the project cannot be

 

completed as preapproved, the taxpayer may petition the Michigan

 

economic growth authority to amend the project and the preapproval

 

letter to increase the maximum total eligible investment for the

 

project on which credits may be claimed and the maximum total of

 

all credits for the project. A taxpayer may petition the Michigan

 

economic growth authority to make any other amendments to the

 

project or preapproval letter at any time before a certificate of

 

completion is issued. Amendments to the project or preapproval

 

letter may include, but are not limited to, extending the duration

 

of time provided to complete the project, as long as that extension

 

does not exceed 10 years from the date of the preapproval letter.

 

     (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 this act for the years the carryforward would

 

have been available under former 1975 PA 228. Beginning on and

 

after April 8, 2008, if the credit allowed under this section for

 

the tax year exceeds the qualified taxpayer's tax liability for the

 

tax year, the qualified taxpayer may elect to have the excess

 

refunded at a rate equal to 85% of that portion of the credit that

 

exceeds the tax liability of the qualified taxpayer for the tax

 

year and forgo the remaining 15% of the credit and any

 

carryforward.

 

     (19) If a project or credit under this section is for the

 

addition of personal property, if the cost of that personal

 

property is used to calculate a credit under this section, and if

 

the personal property is disposed of or transferred from the

 

eligible property to any other location, the qualified taxpayer

 

that disposed of that property, or transferred the personal

 

property shall add the same percentage as determined under

 

subsection (1) of the federal basis of the personal property used

 

for determining gain or loss as of the date of the disposition or

 

transfer to the qualified taxpayer's tax liability under this act

 

after application of all credits under this act for the tax year in

 

which the disposition or transfer occurs. If a qualified taxpayer

 

has an unused carryforward of a credit under this section, the

 

amount otherwise added under this subsection to the qualified

 

taxpayer's tax liability may instead be used to reduce the

 

qualified taxpayer's carryforward under subsection (18).

 

     (20) For credits under this section for projects for which a

 

certificate of completion is issued before January 1, 2006 and

 

except as otherwise provided in this subsection, if a qualified

 

taxpayer pays or accrues eligible investment on or to an eligible

 

property that is leased for a minimum term of 10 years or sold to

 

another taxpayer for use in a business activity, the qualified

 

taxpayer may assign all or a portion of the credit under this

 

section based on that eligible investment to the lessee or

 

purchaser of that eligible property. A credit assignment under this

 

subsection shall only be made to a taxpayer that when the

 

assignment is complete will be a qualified taxpayer. All credit

 

assignments under this subsection are irrevocable and, except for a

 

credit based on a multiphase project, shall be made in the tax year

 

in which the certificate of completion is issued, unless the

 

assignee is an unknown lessee. If a qualified taxpayer wishes to

 

assign all or a portion of its credit to a lessee but the lessee is

 

unknown in the tax year in which the certificate of completion is

 

issued, the qualified taxpayer may delay claiming and assigning the

 

credit until the first tax year in which the lessee is known. A

 

qualified taxpayer may claim a portion of a credit and assign the

 

remaining credit amount. Except as otherwise provided in this

 

subsection, if the qualified taxpayer both claims and assigns

 

portions of the credit, the qualified taxpayer shall claim the

 

portion it claims in the tax year in which the certificate of

 

completion is issued or, for a credit assigned and claimed for a

 

multiphase project before a certificate of completion is issued,

 

the taxpayer shall claim the credit in the year in which the credit

 

is assigned. If a qualified taxpayer assigns all or a portion of

 

the credit and the eligible property is leased to more than 1

 

taxpayer, the qualified taxpayer shall determine the amount of

 

credit assigned to each lessee. A lessee shall not subsequently

 

assign a credit or any portion of a credit assigned under this

 

subsection. A purchaser may subsequently assign a credit or any

 

portion of a credit assigned to the purchaser under this subsection

 

to a lessee of the eligible property. The credit assignment under

 

this subsection shall be made on a form prescribed by the Michigan

 

economic growth authority. The qualified taxpayer shall send a copy

 

of the completed assignment form to the Michigan economic growth

 

authority in the tax year in which the assignment is made. The

 

assignee shall attach a copy of the completed assignment form to

 

its annual return required to be filed under this act, for the tax

 

year in which the assignment is made and the assignee first claims

 

a credit, which shall be the same tax year. In addition to all

 

other procedures under this subsection, the following apply if the

 

total of all credits for a project is more than $10,000,000.00 but

 

$30,000,000.00 or less:

 

     (a) The credit shall be assigned based on the schedule

 

contained in the certificate of completion.

 

     (b) If the qualified taxpayer assigns all or a portion of the

 

credit amount, the qualified taxpayer shall assign the annual

 

credit amount for each tax year separately.

 

     (c) More than 1 annual credit amount may be assigned to any 1

 

assignee and the qualified taxpayer may assign all or a portion of

 

each annual credit amount to any assignee.

 

     (d) The qualified taxpayer shall not assign more than the

 

annual credit amount for each tax year.

 

     (21) Except as otherwise provided in this subsection, for

 

projects for which a certificate of completion is issued before

 

January 1, 2006, and except as otherwise provided in this

 

subsection, if a qualified taxpayer is a partnership, limited

 

liability company, or subchapter S corporation, the qualified

 

taxpayer may assign all or a portion of a credit under this section

 

to its partners, members, or shareholders, based on their

 

proportionate share of ownership of the partnership, limited

 

liability company, or subchapter S corporation or based on an

 

alternative method approved by the Michigan economic growth

 

authority. A credit assignment under this subsection is irrevocable

 

and, except for a credit assignment based on a multiphase project,

 

shall be made in the tax year in which a certificate of completion

 

is issued. A qualified taxpayer may claim a portion of a credit and

 

assign the remaining credit amount. Except as otherwise provided in

 

this subsection, if the qualified taxpayer both claims and assigns

 

portions of the credit, the qualified taxpayer shall claim the

 

portion it claims in the tax year in which a certificate of

 

completion is issued or for a credit assigned and claimed for a

 

multiphase project, before the component completion certificate is

 

issued, the taxpayer shall claim the credit in the year in which

 

the credit is assigned. A partner, member, or shareholder that is

 

an assignee shall not subsequently assign a credit or any portion

 

of a credit assigned under this subsection. The credit assignment

 

under this subsection shall be made on a form prescribed by the

 

Michigan economic growth authority. The qualified taxpayer shall

 

send a copy of the completed assignment form to the Michigan

 

economic growth authority in the tax year in which the assignment

 

is made. A partner, member, or shareholder who is an assignee shall

 

attach a copy of the completed assignment form to its annual return

 

required under this act, for the tax year in which the assignment

 

is made and the assignee first claims a credit, which shall be the

 

same tax year. A credit assignment based on a credit for a

 

component of a multiphase project that is completed before January

 

1, 2006 shall be made under this subsection. In addition to all

 

other procedures under this subsection, the following apply if the

 

total of all credits for a project is more than $10,000,000.00 but

 

$30,000,000.00 or less:

 

     (a) The credit shall be assigned based on the schedule

 

contained in the certificate of completion.

 

     (b) If the qualified taxpayer assigns all or a portion of the

 

credit amount, the qualified taxpayer shall assign the annual

 

credit amount for each tax year separately.

 

     (c) More than 1 annual credit amount may be assigned to any 1

 

assignee and the qualified taxpayer may assign all or a portion of

 

each annual credit amount to any assignee.

 

     (d) The qualified taxpayer shall not assign more than the

 

annual credit amount for each tax year.

 

     (22) For projects approved under this section or section 38g

 

of former 1975 PA 228 for which a certificate of completion is

 

issued on and after January 1, 2006, a qualified taxpayer may

 

assign all or a portion of a credit allowed under this section or

 

section 38g(2), (3), or (33) of former 1975 PA 228 under this

 

subsection. A credit assignment under this subsection is

 

irrevocable and, except for a credit assignment based on a

 

multiphase project, shall be made in the tax year in which a

 

certificate of completion is issued unless the assignee is an

 

unknown lessee. If a qualified taxpayer wishes to assign all or a

 

portion of its credit to a lessee but the lessee is unknown in the

 

tax year in which the certificate of completion is issued, the

 

qualified taxpayer may delay claiming and assigning the credit

 

until the first tax year in which the lessee is known. A qualified

 

taxpayer may claim a portion of a credit and assign the remaining

 

credit amount. If the qualified taxpayer both claims and assigns

 

portions of the credit, the qualified taxpayer shall claim the

 

portion it claims in the tax year in which a certificate of

 

completion is issued pursuant to this section or section 38g of

 

former 1975 PA 228. An assignee may subsequently assign a credit or

 

any portion of a credit assigned under this subsection to 1 or more

 

assignees. The credit assignment or a subsequent reassignment under

 

this subsection shall be made on a form prescribed by the Michigan

 

economic growth authority. The Michigan economic growth authority

 

or its designee shall review and issue a completed assignment or

 

reassignment certificate to the assignee or reassignee. An assignee

 

or subsequent reassignee shall attach a copy of the completed

 

assignment certificate to its annual return required under this

 

act, for the tax year in which the assignment or reassignment is

 

made and the assignee or reassignee first claims a credit, which

 

shall be the same tax year. A credit assignment based on a credit

 

for a component of a multiphase project that is completed before

 

January 1, 2006 shall be made under section 38g(18) of former 1975

 

PA 228. A credit assignment based on a credit for a component of a

 

multiphase project that is completed on or after January 1, 2006

 

may be made under this section. In addition to all other procedures

 

and requirements under this section, the following apply if the

 

total of all credits for a project is more than $10,000,000.00 but

 

$30,000,000.00 or less:

 

     (a) The credit shall be assigned based on the schedule

 

contained in the certificate of completion.

 

     (b) If the qualified taxpayer assigns all or a portion of the

 

credit amount, the qualified taxpayer shall assign the annual

 

credit amount for each tax year separately.

 

     (c) More than 1 annual credit amount may be assigned to any 1

 

assignee, and the qualified taxpayer may assign all or a portion of

 

each annual credit amount to any assignee.

 

     (23) A qualified taxpayer or assignee under subsection (20),

 

(21), or (22) shall not claim a credit under subsection (1)(a) or

 

(b) based on eligible investment on which a credit claimed under

 

section 38d of former 1975 PA 228 was based.

 

     (24) When reviewing an application for a project for

 

designation as an urban development area project, the Michigan

 

economic growth authority for projects approved under subsection

 

(4) or the chairperson of the Michigan economic growth authority or

 

his or her designee for projects approved under subsections (2) and

 

(3) shall consider all of the following criteria:

 

     (a) If the project increases the density of the area by

 

promoting multistory development.

 

     (b) If the project promotes mixed-use development and walkable

 

communities.

 

     (c) If the project promotes sustainable redevelopment.

 

     (d) If the project addresses areawide redevelopment and

 

includes multiple parcels of property.

 

     (e) If the project addresses underserved markets of commerce.

 

     (f) Any other criteria determined by the Michigan economic

 

growth authority or the chairperson of the Michigan economic growth

 

authority.

 

     (25) An eligible taxpayer that claims a credit under this

 

section is not prohibited from claiming a credit under section 431.

 

However, the eligible taxpayer shall not claim a credit under this

 

section and section 431 based on the same costs.

 

     (26) Eligible investment attributable or related to the

 

operation of a professional sports stadium, and eligible investment

 

that is associated or affiliated with the operation of a

 

professional sports stadium, including, but not limited to, the

 

operation of a parking lot or retail store, shall not be used as a

 

basis for a credit under this section. Professional sports stadium

 

does not include a professional sports stadium that will no longer

 

be used by a professional sports team on and after the date that an

 

application related to that professional sports stadium is filed

 

under this section.

 

     (27) Eligible investment attributable or related to the

 

operation of a casino, and eligible investment that is associated

 

or affiliated with the operation of a casino, including, but not

 

limited to, the operation of a parking lot, hotel, motel, or retail

 

store, shall not be used as a basis for a credit under this

 

section. As used in this subsection, "casino" means a casino

 

regulated by this state pursuant to the Michigan gaming control and

 

revenue act, 1996 IL 1, MCL 432.201 to 432.226.

 

     (28) Eligible investment attributable or related to the

 

construction of a new landfill or the expansion of an existing

 

landfill regulated under part 115 of the natural resources and

 

environmental protection act, 1994 PA 451, MCL 324.11501 to

 

324.11550, 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 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 April 1, 2010, 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. This subsection does not apply to an

 

assignee of a 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 natural resources and environment

 

has not sued or issued a unilateral order to the taxpayer pursuant

 

to part 201 of the natural resources and environmental protection

 

act, 1994 PA 451, MCL 324.20101 to 324.20142, to compel response

 

activity on or to the eligible property, or expended any state

 

funds for response activity on or to the eligible property and

 

demanded reimbursement for those expenditures from the qualified

 

taxpayer. However, if the taxpayer has completed all response

 

activity required by part 201 of the natural resources and

 

environmental protection act, 1994 PA 451, MCL 324.20101 to

 

324.20142, is in compliance with any deed restriction or

 

administrative or judicial order related to the required response

 

activity, and has reimbursed the state for all costs incurred by

 

the state related to the required response activity, the taxpayer

 

meets the criteria under this subparagraph.

 

     (m) "Urban development area project" means a project located

 

on eligible property in the downtown or traditional central

 

business district of a qualified local governmental unit or county

 

seat or along a traditional commercial corridor of a qualified

 

local governmental unit or county seat as determined by the

 

Michigan economic growth authority or the chairperson of the

 

Michigan economic growth authority or his or her designee.

 

     (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.