SENATE BILL NO. 631

A bill relating to the economic development of this state; to create the bureau of fair competition and free enterprise in the department of labor and economic opportunity and provide for the appointment of a director; to provide for the withdrawal of the Michigan strategic fund from the contractual interlocal agreement that created the Michigan economic development corporation and the termination of that agreement; to abolish the Michigan strategic fund; to transfer the powers, duties, functions, and properties of the Michigan strategic fund and the Michigan economic development corporation to the bureau of fair competition and free enterprise; to provide for the disposition of money in certain restricted funds; to provide for the powers and duties of certain state officers and entities; and to repeal acts and parts of acts.

the people of the state of michigan enact:

Sec. 1. This act may be cited as the "economic development fair competition and free enterprise act".

Sec. 3. The legislature finds all of the following:

(a) Job creation and economic growth are critical to the success of this state and the health, safety, and general welfare of the people of this state.

(b) Programs and policies related to job creation and economic growth should be undertaken in a manner that promotes fair competition and free enterprise and ensures that economic incentives provided by this state result in a concrete and measurable benefit to this state.

(c) The Michigan strategic fund, the Michigan economic development corporation, and the programs under the repealed laws have been ineffective at creating jobs and economic growth.

(d) The economy of this state and the health, safety, and general welfare of the people of this state would be better served if the Michigan strategic fund, the Michigan economic development corporation, and the programs under the repealed laws are abolished.

(e) It is necessary to create a new agency to handle coordination of policies and programs related to job creation and economic growth.

Sec. 5. As used in this act:

(a) "Board of the Michigan strategic fund" means the board of directors of the Michigan strategic fund.

(b) "Bureau" means the bureau of fair competition and free enterprise created in section 7.

(c) "Department" means the department of labor and economic opportunity.

(d) "Director" means the individual appointed to serve as head of the bureau under section 7.

(e) "Economic incentive" means a grant, loan, tax incentive, or other economic incentive.

(f) "Michigan economic development corporation" means the Michigan economic development corporation, the public body corporate created under section 28 of article VII of the state constitution of 1963 and the urban cooperation act of 1967, 1967 (Ex Sess) PA 7, MCL 124.501 to 124.512, by a contractual interlocal agreement effective April 5, 1999, and subsequently amended, between local participating economic development corporations formed under the economic development corporations act, 1974 PA 338, MCL 125.1601 to 125.1636, and the Michigan strategic fund.

(g) "Michigan strategic fund" means the Michigan strategic fund created under section 5 of former 1984 PA 270.

(h) "Repealed law" means an act or part of an act repealed under section 21.

Sec. 7. (1) The bureau of fair competition and free enterprise is created in the department.

(2) The head of the bureau is the director, who shall be appointed by the governor, by and with the advice and consent of the senate. The director is exempt from the classified state civil service and serves at the pleasure of the governor. The director shall receive an annual salary as appropriated by law.

(3) Before assuming the duties of office, the director shall take and subscribe to the oath of office prescribed in section 1 of article XI of the state constitution of 1963 and file the oath with the secretary of state.

(4) The director shall approve a seal for the use of the bureau and file a description and impression of the seal with the secretary of state.

(5) For a period of 1 year after the date an individual appointed as director leaves office, the individual may not accept employment with a person that received an economic development incentive from this state during the period the individual served as director.

Sec. 9. The bureau has the powers and duties provided in this act and the powers and duties delegated by other laws or executive orders, including, but not limited to, all of the following:

(a) The power to coordinate and administer policies and programs related to job creation and economic growth in this state.

(b) The powers and duties that the bureau acquires and succeeds to as described in section 13.

(c) The power to do all other things necessary or convenient to achieve the objectives and purposes of the bureau, this act, or other laws that relate to the purposes and responsibilities of the bureau.

Sec. 11. (1) The Michigan strategic fund is abolished.

(2) All of the powers, duties, and functions vested by law in the Michigan strategic fund are transferred to and vested in the bureau. Except as otherwise provided in section 15, all records, files, papers, money, and other property of the Michigan strategic fund shall be delivered and transferred to the bureau.

(3) Functions and authority transferred to and vested in the bureau under subsection (2) shall not be delegated or otherwise transferred to the Michigan economic development corporation.

(4) The Michigan strategic fund is withdrawn from the contractual interlocal agreement described in section 5(f) that created the Michigan economic development corporation and the contractual interlocal agreement is terminated. If the withdrawal or termination under this subsection violates the terms of the contractual interlocal agreement, the contractual interlocal agreement is against public policy and is void and unenforceable.

(5) All of the powers, duties, and functions vested by law in the Michigan economic development corporation are transferred to and vested in the bureau. Except as otherwise provided in section 15, all records, files, papers, money, and other property of the Michigan economic development corporation that belongs to this state shall be delivered and transferred to the bureau.

(6) Beginning on the effective date of this act, a reference to the Michigan strategic fund, the board of the Michigan strategic fund, or the Michigan economic development corporation in any other act is a reference to the bureau.

(7) Beginning on the effective date of this act, a reference to a member of the board or the president, chief executive officer, or other officer of the Michigan strategic fund or the Michigan economic development corporation in any other act is a reference to the director.

Sec. 13. (1) The bureau shall acquire and succeed to all of the rights, properties, obligations, and duties of the Michigan strategic fund or the Michigan economic development corporation under any of the following laws:

(a) The land bank fast track act, 2003 PA 258, MCL 124.751 to 124.774.

(b) 2006 PA 317, MCL 125.1972. The Michigan defense center created in section 2 of 2006 PA 317, MCL 125.1972, is transferred from the Michigan strategic fund to the bureau.

(c) The brownfield redevelopment financing act, 1996 PA 381, MCL 125.2651 to 125.2670.

(d) The Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to 125.2696.

(e) The recodified tax increment financing act, 2018 PA 57, MCL 125.4101 to 125.4915.

(f) The community convention or tourism marketing act, 1980 PA 395, MCL 141.871 to 141.880.

(g) The convention and tourism marketing act, 1980 PA 383, MCL 141.881 to 141.889.

(h) The regional tourism marketing act, 1989 PA 244, MCL 141.891 to 141.900.

(i) The convention and tourism promotion act, 2007 PA 25, MCL 141.1321 to 141.1328.

(j) The regional convention and tourism promotion act, 2010 PA 254, MCL 141.1431 to 141.1437.

(k) Section 4ee of the general sales tax act, 1933 PA 167, MCL 205.54ee, and section 4cc of the use tax act, 1937 PA 94, MCL 205.94cc.

(l) The Michigan economic growth authority act, 1995 PA 24, MCL 207.801 to 207.810.

(m) The Michigan business tax act, 2007 PA 36, MCL 208.1101 to 208.1519.

(n) Section 9f of the general property tax act, 1893 PA 206, MCL 211.9f.

(o) Section 9 of the state essential services assessment act, 2014 PA 92, MCL 211.1059.

(p) 1993 PA 69, MCL 247.951 to 247.958.

(q) Section 2 of the Julian-Stille value-added act, 2000 PA 322, MCL 285.302.

(r) Section 3 of 2008 PA 330, MCL 285.343.

(s) Part 721 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.72101 to 324.72118.

(t) Section 11550 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.11550. The up to 1 full-time equivalent employee described in section 11550(4)(p) of the natural resources and environmental protection act, 1994 PA 451, MCL 324.11550, is transferred to the bureau.

(u) The history, arts, and libraries act, 2001 PA 63, MCL 399.701 to 399.711, in accordance with Executive Reorganization Order No. 2022-1, MCL 333.27002. The Michigan council for arts and cultural affairs described in the history, arts, and libraries act, 2001 PA 63, MCL 399.701 to 399.711, and renamed the Michigan arts and culture council by Executive Reorganization Order No. 2022-1, MCL 333.27002, is transferred from the Michigan strategic fund to the bureau.

(v) The social welfare act, 1939 PA 280, MCL 400.1 to 400.119b.

(w) Section 303 of the Michigan liquor control code of 1998, 1998 PA 58, MCL 436.1303.

(x) The Michigan BIDCO act, 1986 PA 89, MCL 487.1101 to 487.2001.

(y) 2024 PA 121, 2023 PA 321, 2023 PA 119, 2023 PA 5, 2023 PA 1, 2022 PA 194, 2022 PA 166, 2021 PA 133, 2021 PA 132, and 2021 PA 87.

(z) Executive Reorganization Order No. 2024-2, MCL 16.735, with respect to the state historic preservation office. The state historic preservation office is transferred from the Michigan strategic fund to the bureau and shall exercise its authority, powers, duties, functions, and responsibilities independently of the bureau in the same manner as provided in Executive Reorganization Order No. 2024-2, MCL 16.735. As used in this subdivision, "state historic preservation office" means the state historic preservation office created by Executive Order No. 2007-53, transferred to the Michigan strategic fund by Executive Reorganization Order No. 2019-3, MCL 125.1998, and ordered to exercise its authority, powers, duties, functions, and responsibilities independently of the Michigan strategic fund by Executive Reorganization Order No. 2024-2, MCL 16.735.

(2) The bureau shall acquire and succeed to any remaining rights, properties, obligations, and duties of the Michigan strategic fund or the Michigan economic development corporation under a repealed law.

(3) Except as otherwise provided in section 11(4), a written agreement or other contractual obligation under a repealed law that is in effect on the effective date of this act remains in effect and shall be administered by the bureau in accordance with the written agreement or contractual obligation and the repealed law. The bureau shall not amend a written agreement or other contractual obligation under a repealed law to extend the duration of the written agreement or other contractual obligation, increase the economic incentives provided under the written agreement or other contractual obligation, or waive any requirements imposed on the person receiving an economic incentive under the written agreement or other contractual obligation.

Sec. 15. (1) Money in a restricted fund created by a section of law that is repealed by this act is transferred to the state general fund.

(2) If money described in subsection (1) is allocated to a contractual obligation that is in effect on the effective date of this act, that money must be placed in a restricted account for the purpose of satisfying the contractual obligation.

Sec. 17. (1) Not later than April 10 of each year, the bureau shall submit a report of its activities to each member of the legislature, the governor, the clerk of the house of representatives, the secretary of the senate, and the senate and house fiscal agencies and post the report on its website.

(2) The report under subsection (1) must include all of the following information:

(a) A list of all persons that are participating in a program or otherwise receiving an economic incentive administered by the bureau.

(b) For each person listed under subdivision (a), all of the following information:

(i) A description of the economic incentive received by the person, including, but not limited to, the type of economic incentive awarded, the total amount awarded, the amount received by the person to date, and the remaining amount the person will receive.

(ii) The program or authority under which the economic incentive is provided.

(iii) The remaining duration of the economic incentive.

(iv) If the person is required to create or maintain jobs to receive the economic incentive, the number of jobs required to be created and maintained and the number of jobs actually created or maintained.

(v) If the economic incentive is awarded for a particular project, the status of the project.

Sec. 19. (1) The office of chief compliance officer is created in the bureau. The office shall exercise its powers and duties under this section independently of the bureau.

(2) The office shall assist the bureau with the creation, implementation, monitoring, and enforcement of policies and procedures to prevent illegal, unethical, or improper conduct on the part of director and employees and agents of the bureau in carrying out their powers and duties.

(3) The principal executive officer of the office is the chief compliance officer. The state administrative board shall appoint the chief compliance officer in accordance with section 2b of 1921 PA 2, MCL 17.2b.

(4) A person may not interfere with, prevent, or prohibit the chief compliance officer from carrying out the chief compliance officer's duties as established in this section and set by the state administrative board. The chief compliance officer is an employee for purposes of the whistleblowers' protection act, 1980 PA 469, MCL 15.361 to 15.369.

(5) All departments, state agencies, committees, commissioners, or officers of this state, and any political subdivision of this state, to the extent compatible with their duties, shall give the chief compliance officer any necessary assistance required by the chief compliance officer in the performance of the duties of the chief compliance officer. All departments, state agencies, committees, commissioners, or officers of this state, and any political subdivision of this state, shall provide the chief compliance officer free access to any book, record, or document in their custody, relating to the matters within the scope of the chief compliance officer in the performance of the chief compliance officer's duties.

(6) The chief compliance officer shall do all of the following:

(a) Recommend policies and procedures, including, but not limited to, a conflict-of-interest policy, an investment policy, and an ethics policy, to the bureau that protect this state's assets consistent with the requirements of this act and applicable state and federal law. The chief compliance officer shall also assist in the design of the policies and procedures that will prevent violations from occurring, detect violations that have occurred, and correct such violations promptly.

(b) Assist employees and agents of the bureau to ensure that they comply with internal policies and procedures and with applicable state and federal law.

(c) Provide guidance to the bureau and its employees on matters related to compliance with internal policies and procedures and with applicable state and federal law.

(d) Make recommendations to the bureau and its employees regarding the appropriate evaluation, investigation, and resolution of issues and concerns regarding compliance with internal policies and procedures and with applicable state and federal law.

(e) Review and evaluate compliance with internal policies and procedures and with applicable state and federal law.

(f) Cooperate with the office of the auditor general as the auditor general carries out the auditor general's duties.

(g) Report quarterly to the director and the state administrative board regarding compliance with internal policies and procedures and with applicable state and federal law.

(h) Contact persons participating in a program or otherwise receiving an economic incentive administered by the bureau to the extent necessary to carry out responsibilities under this section.

(i) Prepare a written annual report that evaluates compliance with internal policies and procedures and with applicable state and federal law, explains any compliance matters that arose during the previous year, and suggests revisions to agency policies and procedures. Copies of the report must be provided to the governor, the clerk of the house of representatives, the secretary of the senate, the chairperson of the senate economic and community development committee, the chairperson of the house of representatives economic competitiveness committee, and the chairpersons of the senate and house of representatives committees on appropriations. The annual report must also be published on the bureau's website.

(j) Do all other things necessary to carry out the chief compliance officer's responsibilities under this section.

(7) As used in this section:

(a) "Office" means the office of the chief compliance officer.

(b) "State administrative board" means the state administrative board created in section 1 of 1921 PA 2, MCL 17.1.

Sec. 21. All of the following acts and parts of acts are repealed:

(a) The Michigan strategic fund act, 1984 PA 270, MCL 125.2001 to 125.2094.

(b) The entrepreneur-in-residence act, 2014 PA 393, MCL 125.2191 to 125.2197.

(c) The Michigan early stage venture investment act of 2003, 2003 PA 296, MCL 125.2231 to 125.2263.

(d) The commission for logistics and supply chain collaboration act, 2008 PA 398, MCL 125.1891 to 125.1894.

(e) The next Michigan development act, 2010 PA 275, MCL 125.2951 to 125.2959.

(f) Sections 455, 457, and 459 of the Michigan business tax act, 2007 PA 36, MCL 208.1455, 208.1457, and 208.1459.

Sec. 23. A next Michigan development corporation created under former 2010 PA 275 is terminated on the effective date of this act. Incentives previously granted by the next Michigan development corporation must be administered by the city, village, township, or charter township in which the eligible business to which the incentives were granted is located unless otherwise provided in the interlocal agreement described in former 2010 PA 275.