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2005 House Bill 5047: Create "21st Century Jobs Fund"

Public Act 225 of 2005

  1. Introduced by Rep. Bill Huizenga (R) on July 6, 2005, to establish a government “Jobs for Michigan Investment Fund” to provide grants, loans, and various subsidies to public entities and private businesses engaged in the research, development, marketing and commercialization of various “competitive edge” technologies identified by the state. A "Strategic Economic Investment Board” composed of government officials and representatives of the types of organizations likely to receive funding under the program would allocate the money. The money for the grants, loans and subsidies would come from the sale or “securitization” of the revenue stream from the 1998 tobacco company lawsuit, proposed by House Bill 5048. This is a House response to Gov. Jennifer Granholm’s $2 billion "Jobs for Michigan" debt proposal, and the Senate’s similar $1 billion debt proposal. See also House Bill 5005, another subsidy proposal that would rely on selling the tobacco revenue stream.
    • Referred to the House Commerce Committee on July 6, 2005.
      • Reported in the House on July 13, 2005, with the recommendation that the substitute (H-1) be adopted and that the bill then pass.
    • Substitute offered in the House on August 31, 2005, to replace the previous version of the bill with one that incorporates changes reflecting the status of ongoing negotiations that continued even as this preliminary version of the bill was reported out of committee to "move the process along". The substitute passed by voice vote in the House on August 31, 2005.
    • Amendment offered by Rep. Bill Huizenga (R) on August 31, 2005, to tie-bar the bill to House Republican tax cut proposals, in particular House Bill 5108. This means this bill can't become law unless that one does also. The amendment passed by voice vote in the House on August 31, 2005.
    • Amendment offered by Rep. Tom Casperson (R) on August 31, 2005, to require that $25 million of the subsidy money be given to the Michigan Forest Finance Authority, which is the entity that contracts for timber cutting rights on state lands. The amendment passed by voice vote in the House on August 31, 2005.
    • Substitute offered by Rep. Bill Huizenga (R) on September 28, 2005, to replace the previous version of the bill with one that reflects negotiated changes. See House-passed bill. The substitute passed by voice vote in the House on September 28, 2005.
    • Amendment offered by Rep. Tim Moore (R) on September 28, 2005, to instruct the government committee and board that will determine who gets the subsidies to disregard any political contributions made by potential recipients of the money to candidates, PACs, etc. The amendment passed 104 to 0 in the House on September 28, 2005.
      Who Voted "Yes" and Who Voted "No"

  2. Passed 103 to 1 in the House on September 28, 2005, to establish a government $1 billion “Jobs for Michigan Investment Fund” to give subsidies to public entities and private businesses engaged in various “competitive edge” technologies. The bill authorizes government ownership of private businesses and gets around a state Constitutional prohibition on this by placing these in a "permanent fund," which Senate Joint Resolution T of 2002 exempted from the prohibition, and which was described when presented to the people for a vote as applying to natural resources, veterans and state parks trust funds. Government officials and representatives of the types of organizations likely to get the money would make up a "Strategic Economic Investment Board” to allocate 70 percent of the subsidies (see Senate Bill 533 ). The balance would be given out by the existing “Michigan Strategic Fund,” renamed the "21st Century Jobs Fund." The $1 billion would come from “securitizing” (selling) one-third of the approximately $280 million annual revenue stream from the 1998 tobacco company lawsuit settlement. This is the legislature's response to Gov. Granholm’s $2 billion "Jobs for Michigan" debt proposal. The bill also authorizes spending $60 million on “WiMAX” ventures, an untested wireless internet technology covering large areas.
    Who Voted "Yes" and Who Voted "No"

  3. Received in the Senate on September 29, 2005.
    • Referred to the Senate Government Operations and Reform Committee on September 29, 2005.
      • Reported in the Senate on October 18, 2005, with the recommendation that the substitute (S-2) be adopted and that the bill then pass.
    • Substitute offered in the Senate on October 18, 2005, to replace the previous version of the bill with one that removes the $65 million grant to "WiMAX" internet service providers, replacing it with other more general earmarks, including $15 million to promote tourism, $10 million for a "defense contract coordination center," $6 million for "automation alley" in Southeast Michigan, $4 million to the Van Andel Institute in Grand Rapids, $2 million to promote movie production, $2 million to transfer new technology from universities to the private sector, in addition to $26 million added by the House for the forestry industry. These earmarks would come out of $400 million to be spent in the next year. Up to 5 percent of the $1 billion could be spent for "business development and marketing expenses," and another 4 percent could be spent on administration. The substitute revises other details governing how the money would be distributed, and to replace the previous version of the bill with one that does not require that the business tax cuts passed by the House in House Bill 5108 go into effect for this and related business subsidy bills to go into effect. The substitute passed by voice vote in the Senate on October 18, 2005.
    • Amendment offered by Sen. Cameron Brown (R), Sen. Ron Jelinek (R), Sen. Michelle McManus (R) and Sen. Gerald Van Woerkom (R) on October 19, 2005, to add a $10 million "earmark" to be spent subsidizing agricultural development. This would be added to other industry-specific earmarks (see Senate substitute). The amendment passed by voice vote in the Senate on October 19, 2005.
    • Amendment offered by Sen. Valde Garcia (R) on October 19, 2005, to give the governor the authority to appoint any member of the Michigan Strategic Fund board to be its chair, rather than the head of the Michigan Economic Development Corporation automatically assuming the position. This body will preside over the disbursement of the $1 billion authorized by this legislation. The amendment also has "clean up" language correcting and clarifying other provisions. The amendment passed by voice vote in the Senate on October 19, 2005.
    • Amendment offered by Sen. Valde Garcia (R) on October 19, 2005, to spend $40 million on the commercialization of life sciences in the current fiscal year, rather than $50 million, but still spend $50 million in each of the next four years. The amendment passed by voice vote in the Senate on October 19, 2005.
  4. Passed 34 to 4 in the Senate on October 19, 2005, to establish a government $1 billion “Jobs for Michigan Investment Fund” to give subsidies to public entities and private businesses engaged in various “competitive edge” technologies. The bill authorizes government ownership of private businesses and gets around a state Constitutional prohibition on this by placing these in a "permanent fund," which Senate Joint Resolution T of 2002 exempted from the prohibition, and which was described when presented to the people for a vote as applying to natural resources, veterans and state parks trust funds. Government officials and representatives of the types of organizations likely to get the money would make up a "Strategic Economic Investment and Commercialization Board” to allocate the subsidies (see Senate Bill 533 ). The $1 billion would come from “securitizing” (selling) one-third of the approximately $280 million annual revenue stream from the 1998 tobacco company lawsuit settlement. This is the legislature's response to Gov. Granholm’s $2 billion "Jobs for Michigan" debt proposal. The bill specifically authorizes spending $400 million in 2006, $75 million of which is earmarked for particular industries. It is tied to other business subsidy measures, in particular Senate Bills 359 and 521, but not to the House-passed tax cuts in HB 5108.
    Who Voted "Yes" and Who Voted "No"

  5. Received in the House on October 20, 2005.
    • Substitute offered by Rep. Bill Huizenga (R) on November 10, 2005, to replace the previous version of the bill with one that reflects the agreement struck between Gov. Jennifer Granholm and Republican legislative leaders to adopt modest business tax cuts and a scaled-down "21st Century Jobs Fund." Of the initial $400 million in subsidies for cutting-edge research or commercialization projects, $10 million would go to the state Agricultural Development Fund; $26 million to the state Forest Finance Authority; $15 million for tourism advertising; and $36 million for administrative costs, business development and marketing efforts. The annual $75 million appropriation in future would go to the “Strategic Fund,” which is basically the Michigan Economic Development Corporation’s legal mechanism for receiving funds. MEDC is the state entity that oversees its various business subsidy programs. The complete package includes House Bills 4972, 5047, 5048, 5095, 5097, 5108, 5109, and Senate Bill 633. The tax cut and business subsidy bills are all tie-barred together, meaning they all must become law or none do. The substitute passed by voice vote in the House on November 10, 2005.
    • Amendment offered by Rep. Andy Dillon (D) on November 10, 2005, to condition the granting of subsidies for the “commercialization of competitive edge technology” on sufficient qualified applicants applying for them. The amendment failed by voice vote in the House on November 10, 2005.
    • Amendment offered by Rep. Bill Huizenga (R) on November 10, 2005, to revise annual allocation of subsidies for the “commercialization of competitive edge technology.” In Fiscal Year 2007 $50 million would be authorized, then $30 million per year through 2012. The amendment passed by voice vote in the House on November 10, 2005.
  6. Passed 92 to 13 in the House on November 10, 2005, to establish a scaled down program of business and research subsidies along the lines described in earlier versions of this bill, as part of an agreement struck between Gov. Jennifer Granholm and Republican legislative leaders to also adopt modest business tax cuts. The revised version of this bill would use $400 million of "securitized" tobacco settlement revenue right away, and give $75 million per year for eight years from the remaining “unsecuritized” settlement revenue stream to the "Michigan Strategic Fund" for various business subsidies. Future legislatures would not be bound by the $75 million per year agreement, however. The tax cut is described under the final votes on Senate Bill 633, and details of the full package by a Senate Fiscal Agency analysis (pdf).
    Who Voted "Yes" and Who Voted "No"

  7. Received in the Senate on November 10, 2005.
  8. Passed 35 to 3 in the Senate on November 10, 2005, to establish a scaled down program of business and research subsidies along the lines described in earlier versions of this bill, as part of an agreement struck between Gov. Jennifer Granholm and Republican legislative leaders to also adopt modest business tax cuts. The revised version of this bill would use $400 million of "securitized" tobacco settlement revenue right away, and give $75 million per year for eight years from the remaining “unsecuritized” settlement revenue stream to the "Michigan Strategic Fund" for various business subsidies. Future legislatures would not be bound by the $75 million per year agreement, however. The tax cut is described under the final votes on Senate Bill 633, and details of the full package by a Senate Fiscal Agency analysis (pdf).
    Who Voted "Yes" and Who Voted "No"

  9. Signed with line-item veto by Gov. Jennifer Granholm on November 21, 2005, at the same time she vetoed a package of bills business tax cut bills associated with this bill (but not all tie-barred to it).

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