Bill Text: MI HB5169 | 2011-2012 | 96th Legislature | Introduced
Bill Title: Financial institutions; other; organization of business development corporations by financial institutions; provide for. Creates new act. TIE BAR WITH: HB 5170'11
Spectrum: Partisan Bill (Democrat 11-0)
Status: (Introduced - Dead) 2011-11-29 - Printed Bill Filed 11/14/2011 [HB5169 Detail]
Download: Michigan-2011-HB5169-Introduced.html
HOUSE BILL No. 5169
November 10, 2011, Introduced by Reps. Barnett, Meadows, Brown, Segal, Liss, Slavens, Lindberg, Townsend, Switalski, Irwin and Howze and referred to the Committee on Banking and Financial Services.
A bill to provide for the organization, regulation, and
certification of business development corporations; to provide for
the powers and duties of business development corporations and
their stockholders, directors, and loan participants; and to
prescribe the powers and duties of certain state governmental
officers and entities.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"business development corporation act".
Sec. 3. As used in this act:
(a) "Business development corporation" means a Michigan
corporation certified by the state treasurer under this act.
(b) "Financial institution" means any of the following:
(i) A state or national bank, state or federal savings and loan
association, state-chartered developmental authority, or state or
federal credit union.
(ii) An insurance corporation that is authorized by law to
transact the business of insurance in this state.
(iii) A wholly owned subsidiary of a bank, savings and loan
association, authority, credit union, or insurance corporation
described in subparagraph (i) or (ii).
(c) "Loan participant" means a person that is 1 of the lenders
in a loan participation agreement.
(d) "Loan participation agreement" means an agreement between
2 or more loan participants under which the loan participants
together agree to make a commercial loan to a person that conducts
business in this state and that originally sought a loan from 1 of
the loan participants.
(e) "Michigan corporation" means a corporation incorporated
under the business corporation act, 1972 PA 284, MCL 450.1101 to
450.2098, or the nonprofit company act, 1982 PA 162, MCL 450.2101
to 450.3192.
(f) "Person" means an individual, sole proprietorship,
partnership, limited liability company, or corporation.
(g) "Qualified loan transaction" means a commercial loan made
pursuant to a loan participation agreement and certified as a
qualified loan transaction by the state treasurer under section
5(2).
Sec. 5. (1) For purposes of establishing eligibility for the
exemption described in section 625(1)(d) of the income tax act of
1967, 1967 PA 281, MCL 206.625, the state treasurer may certify a
Michigan corporation that meets all of the following as a business
development corporation:
(a) The corporation has at least 3 shareholders and each
shareholder is a financial institution.
(b) If a person owns 50% or more of the shares or other
ownership interests of a shareholder of the corporation, that
person does not own 50% or more of the shares or other ownership
interests of another shareholder of the corporation.
(c) The articles of incorporation of the corporation include
all of the following as part of the purposes of the corporation:
(i) To facilitate loan participation agreements that provide
loans to commercial borrowers.
(ii) To conduct other activities designed to increase access to
commercial loans to businesses in this state.
(d) The articles of incorporation provide for a board of
directors for the corporation that meets the requirements of
section 11.
(2) For purposes of establishing eligibility for the exemption
described in section 625(1)(d) of the income tax act of 1967, 1967
PA 281, MCL 206.625, the state treasurer may certify that a
commercial loan facilitated by a business development corporation
and made pursuant to a loan participation agreement is a qualified
loan transaction.
Sec. 7. (1) A business development corporation is subject to
and has all of the powers and privileges conferred by this act and
to 1 of the following:
(a) The business corporation act, 1972 PA 284, MCL 450.1101 to
450.2098, if the corporation is incorporated under that act.
(b) The nonprofit corporation act, 1982 PA 162, MCL 450.2101
to 450.3192.
Sec. 9. (1) A business development corporation may receive a
proposal for a loan participation agreement from a shareholder or
any other source.
(2) If the board of directors of a business development
corporation determine that a proposal for a loan participation
agreement meets the purposes described in section 5(1)(c), the
board shall offer the shareholders of the corporation the
opportunity to participate in the loan participation agreement as a
loan participant and may offer other persons the opportunity to
participate as loan participants in the loan participation
agreement.
Sec. 11. (1) A business development corporation shall be
governed by a board of directors that consists of 1 director
appointed by each shareholder.
(2) The board of directors of a business development
corporation shall appoint officers and may employ or engage any
employees or agents it determines are appropriate to fulfill the
purposes of the corporation and the requirements of this act.
(3) The board of directors of a business development
corporation may provide for the formation of a loan committee, and
the powers of that loan committee, in its bylaws.
Sec. 13. (1) The state treasurer may review the books and
records of a business development corporation as part of his or her
determination of the corporation's initial or continued eligibility
for certification under this act.
(2) A business development corporation shall provide the state
treasurer with a copy of each loan participation agreement for
purposes of his or her determination of the loan transaction's
eligibility for certification as a qualified loan transaction under
section 5(2).
Sec. 15. Loan participation agreements shall not be granted or
denied based on the race, religion, color, national origin, age,
gender, height, weight, marital status, physical or mental
disability, sexual orientation, gender identity or expression, or
genetic information of any of the proposed borrowers.
Enacting section 1. This act does not take effect unless
Senate Bill No.____ or House Bill No. 5170(request no. 01420'11) of
the 96th Legislature is enacted into law.
