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2005 Senate Bill 533: Borrow $1 billion for “competitive edge technology” spending

Public Act 215 of 2005

Introduced by Sen. Valde Garcia R- on May 24, 2005
To authorize $1 billion in government borrowing (bonds) for grants and loans to public entities and private businesses engaged in the research, development, marketing and commercialization of life sciences technology; advanced automotive, manufacturing and materials technology; homeland security and defense technology; and basic research in “competitive edge” technologies. A government “strategic economic investment board” appointed by the governor with the advice and consent of the Senate, and composed of representatives of the various organizations likely to receive the money, would disburse the borrowed money. This is the Senate Republican "counter-offer" to Gov. Jennifer Granholm’s $2 billion "Jobs for Michigan" debt proposal. In addition to authorizing less new debt than the governor, this proposal does not repeal an 1851 prohibition on purchases by the state of equity interest in private companies, requires more legislative oversight and is somewhat more restrictive on the uses for the borrowed money.   Official Text and Analysis.
Referred to the Senate Appropriations Committee on May 24, 2005
Reported in the Senate on June 7, 2005
With the recommendation that the substitute (S-4) be adopted and that the bill then pass.
Substitute offered in the Senate on June 8, 2005
To replace the previous version of the bill with one that revises details. Among these are clarifications of the administration and lines of authority over the borrowed money, and revisions to the allocation of the money. At least $60.0 million would go to the state Forest Development Fund. At least half of the balance would be go to life sciences technology, and the rest to advanced automotive, manufacturing, and materials technology; homeland security and defense technology; and alternative energy technology. Not more than 10 percent could be spent for basic research, not more than 3 percent for administrative expenses, and not more than 2.5 percent to any one business.
The substitute passed by voice vote in the Senate on June 8, 2005
Amendment offered by Sen. Bob Emerson D-, Sen. Valde Garcia R- and Sen. Ken Sikkema R- on June 9, 2005
To revise the makeup of the board that would decide who gets the borrowed money, adding more members with expertise in the "high tech venture capital" business, and requiring one of the members to be from the Van Andel Institute in Grand Rapids.
The amendment passed by voice vote in the Senate on June 9, 2005
Amendment offered by Sen. Bob Emerson D-, Sen. Valde Garcia R- and Sen. Ken Sikkema R- on June 9, 2005
To change the name of the “Michigan Strategic Fund” to the “Jobs For Michigan Fund,” and revise some details regarding the administration and governance of the fund.
The amendment passed by voice vote in the Senate on June 9, 2005
Amendment offered by Sen. Michael Prusi D- on June 9, 2005
To raise the amount of new government debt the measure would authorize from $1 billion to $2 billion. Assuming a 5-percent interest rate and 30 year amortization, this would raise the annual debt service payments from $66 million to $132 million, and increase the total interest expense from approximately $932 million to $1.865 billion.
The amendment failed by voice vote in the Senate on June 9, 2005
Amendment offered by Sen. Ken Sikkema R- on June 9, 2005
To require any individual or entity that contributes to the election campaign urging the public to vote "yes" on this debt proposal to wait at least two years before getting any grants or loans from the borrowed money.
The amendment passed by voice vote in the Senate on June 9, 2005
Amendment offered by Sen. Michael Prusi D- on June 9, 2005
To eliminate a tie bar to Senate Bills 358 and 359, which create a state “life sciences authority” that would subsidize research companies and other entities that develop, market, or commercialize life science products.
The amendment failed by voice vote in the Senate on June 9, 2005
Amendment offered by Sen. Samuel B. Thomas, III D- on June 9, 2005
To require that extra consideration be given to "minority-owned, female-owned, and businesses representative of traditionally underserved communities" when the borrowed money is distributed.
The amendment failed 15 to 22 in the Senate on June 9, 2005.
    See Who Voted "Yes" and Who Voted "No".
To authorize $1 billion in government borrowing (bonds) for grants and loans to public entities and private businesses engaged in the research, development, marketing and commercialization of various “competitive edge” technologies identified by the state (see Senate substitute for details). A government “Strategic Economic Investment Board” composed of government officials and representatives of the types of organizations likely to receive the money would disburse the borrowed money. Assuming a 5-percent interest rate and 30 year amortization, the new debt would require annual debt service payments of $66 million, and incur approximately $930 million in interest expense. The proposal would be on the Nov. 8, 2005 ballot.
Received in the House on June 9, 2005
Referred to the House Appropriations Committee on June 9, 2005
Referred to the House Commerce Committee on June 14, 2005
Reported in the House on August 31, 2005
With the recommendation that the substitute (H-2) be adopted and that the bill then pass.
Substitute offered in the House on September 28, 2005
To replace the previous version of the bill with one that reflects ongoing negotiations. This was subsequently superceded by the Huizenga substitute, described below.
The substitute failed by voice vote in the House on September 28, 2005
Substitute offered by Rep. Bill Huizenga R- on September 28, 2005
To replace the previous version of the bill with one that incorporates changes reflecting ongoing negotiations that continued even as a preliminary version of the bill was reported out of committee to "move the process along." In these negotiations House Bill 5047 became the primary bill in the legislative package, which no longer proposes $1 billion in government borrowing, but instead "securitizes" or sells tobacco lawsuit setttlement revenue and uses the proceeds for a similar purpose. This latest substitute includes stronger fiduciary oversight of that process than the defeated committee substitute.
The substitute passed by voice vote in the House on September 28, 2005
Amendment offered by Rep. David Law R- on September 28, 2005
To require the government committee and board that will determine who gets the subsidies to cooperate with a "compliance officer" employed by the state Auditor General (who is hired by the legislature).
The amendment passed 101 to 0 in the House on September 28, 2005.
    See Who Voted "Yes" and Who Voted "No".
To create a "Strategic Economic Investment Board” to select which entities will be given a portion of the $1 billion in subsidies proposed by House Bill 5047 for research, development, marketing and commercialization of various “competitive edge” technologies.
Received in the Senate on September 29, 2005
Substitute offered by Sen. Valde Garcia R- on October 19, 2005
To adopt a Senate version of the bill 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 19, 2005
Amendment offered by Sen. Valde Garcia R- on October 19, 2005
To adopt "clean up" language correcting and clarifying other provisions of the bill and revising certain dates specified in the bill.
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 revise certain dates specified in the bill.
The amendment passed by voice vote in the Senate on October 19, 2005
To create a "Strategic Economic Investment and Commercialization Board” to select which entities will be given the $1 billion in subsidies proposed by House Bill 5047 for research, development, marketing and commercialization of various “competitive edge” technologies, including state ownership of shares of private companies.
Received in the House on October 19, 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".
The substitute passed by voice vote in the House on November 10, 2005
Amendment offered by Rep. Rick Baxter R- on November 10, 2005
To give preference in the allocation of the proposed subsidies to entities that forecast revenues within two years, and which have both outside directors and other investors who are experienced in the targeted industry.
The amendment passed by voice vote in the House on November 10, 2005
Received in the Senate on November 10, 2005
To create a "Strategic Economic Investment and Commercialization Board” with governance and procedures that reflect the agreement struck between Gov. Jennifer Granholm and Republican legislative leaders on modest business tax cuts and subsidies for selected businesses.
Signed by Gov. Jennifer Granholm on November 21, 2005

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