Notes

“Snap Shot” of Existing Economic

Development Laws
Originally Drafted in 2006; may be out of date

Scope of Document
This document is intended to give a brief “snap shot” of the scope of Michigan
economic development laws. It was drafted solely by reviewing the “Short
Summary and Extended Table of Comments” prepared by Jake Allen (doc. No.
LAN01\159107.1). The list of laws included in the document is not intended to
be an exhaustive list of Michigan economic development laws.

The purpose was to try and identify the major elements of the structure of
Michigan’s economic development laws under the following categories:

• Legislative Purposes. Generally, Michigan statutes do not have

extensive purposes clauses. Some bonding bills do include purposes
clause and any economic development laws have such purposes clause,
primarily for political purposes.
• Economic Development Functions. What powers did the Legislature
tell government agencies to take and what powers did they give to
government agencies?
• Targeted Industries and Businesses. What economic interests are
identified and served by existing law?
• Local Authorities and Special Purpose Units. What type of
specialized governmental unit, board, commission, zone, etc. are
authorized by law?
• State Entities and Agencies. What agencies and instrumentalities of
the State are created or authorized?
• Bonding and Finance. What financial mechanisms are authorized to
use governmental power to replace or supplement private financial
transactions?
• Administrative and Compliance Provisions. What are the key
administrative structures, tools, restraints and enforcement mechanism
used in Michigan’s laws?

A second section of this document is a more detailed breakdown of

“International Economic Development Statutory Powers” taken from a
document drafted several years ago to try and consolidate all of the
 international economic development functions in one summary document. The
international summary is included as a suggestion of one way to go deeper into
the structure of a particular aspect of Michigan’s economic development laws.

“Purposes”
• Encourage historic preservation
• Correct and prevent deterioration of business districts
• Promote economic growth
• Prevent urban deterioration
• Encourage economic development and activity
• Encourage local development to prevent conditions of unemployment
and promote economic growth
• Stimulate the creation of new jobs for the disadvantaged and long-term
unemployed
• Promote revitalization of economically distressed areas
• Revitalization, redevelopment and reuse of property including tax
reverted, blighted, or functionally obsolete property
• Foster economic opportunities in this state
• Facilitate economic development
• Stimulate industrial, commercial, and residential improvements
• Promote economic growth and job creation
• Create incentives to locate and maintain value-added agricultural
processing and production ventures within this state
• Stimulate the expansion of international export markets of state
products and services
• Provide incentive for the development of broadband services
• Promote film industry
• Promote tourism

Economic Development Functions

• Assembly and clearance of title to land
• Acquire, maintain and dispose of property
• Acquire and dispose of industrial buildings and sites and industrial
machinery
• Acquire and dispose of water and air pollution equipment
• Create small business incubation centers
• Condemnation and transfer of public and private property
• Creation and implementation of development plans
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 • Tax increment financing
• Payments in lieu of taxes
• Creation of “permanent fund”
• Exempt property from taxation
• Tax credits and incentives
• Provide tax exempt financing
• Assist private enterprise
• Assist local government
• Provide loan insurance
• Fund product development
• Public investment in private equity
• Public investment in venture capital
• Public investment in mezzanine financing
• Facilitate the implementation of brownfield plans
• Industrial facilities exemption certificate
• Industrial facility tax
• Grants to nonprofit organizations
• Guarantee of export insurance
• Special procurement protections for Michigan vendors
• Financial support for broadband deployment
• Direct business assistance and consulting.
• Certified development company under sections 501 to 503 of the small
business investment act of 1958.
• Product development to provide financial aid when financial aid would
not otherwise be available on reasonable terms from other sources,
whereby the fund will obtain royalties, rights, or other benefits from or
in a targeted invention, product, device, or technique; a related or
derivative invention, product, device, or technique; or other applicant
revenues, which royalties, rights, and other benefits are obtained in
exchange for the granting of financial aid to the applicant.
• Public works which will assist an economic development project.
• Insure, guarantee, or issue letters of credit for all or a part of a loan or
debenture of others, public or private.
• Certify a minority venture capital company and a MESBIC.

Targeted Industries and Businesses

Different laws target assistance to different favored industries, including:

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 • Manufacturing
• Small business
• Minority business
• Life sciences
• Industrial enterprise.
• Commercial enterprise
• Retail enterprise
• Forestry
• Government contractors
• Ports.
• Tourist industry
• Research and development enterprise (person engaged in a business
which has as its principal function the discovery of new substances and
the refinement of known substances, processes, products, theories, and
ideas).
• Life sciences
• Advanced automotive, manufacturing, and materials technology.
• Advanced computing
• Alternative energy technology
• Applied research and Basic research.
• University-based research
• Homeland security and defense technology
• Value-added agricultural processing and production ventures
• Exporters
• Broadband providers
• Venture capitalists
• Minority venture capitalists
• Banks
• Horse racing
• Prison industries
• In-state Vendors to the State

Agriculture
• Apples
• Cherries
• Cranberries
• Plums

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 • Asparagus
• Carrots
• Corn
• Onions
• Potatoes
• Beans
• Soybeans
• Beef (dairy, feeding, raising and breeding, retail sale, meat packing,
public livestock marketing)
• Dairy
• Veal
• Deer and elk producers
• Expositions and fairs
• Grapes and wine

Local Authorities and Special Purpose Units

• Michigan Economic Development Corporation
• Metropolitan districts
• Conditional transfer of property between units of government
• Interlocal agreements for joint exercise of powers
• Economic development corporations
• Subsidiary neighborhood development corporation
• Downtown development authority
• Enterprise zones
• Local development finance authorities
• Empowerment zone development corporations
• Enterprise community development corporations
• Brownfield redevelopment zone
• Brownfield redevelopment authority
• Renaissance zones
• Renaissance zone review board
• Renaissance zone for agricultural processing facilities
• Tool and die renaissance recover zones
• Alternative energy zone
• Plant rehabilitation and industrial development districts (may not be
applicable)

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State Entities and Agencies
• Michigan Strategic Fund
• Strategic Economic Investment and Commercialization Board
• Michigan Life Science Pipeline
• Michigan Department of Labor and Economic Growth
• Michigan Department of Agriculture
• Michigan Film Office
• Michigan Enterprise Zone Authority
• Michigan Early Stage Venture Investment Corporation
• Michigan Early Stage Venture Investment Fund
• Michigan Next Energy Authority
• Michigan Broadband Authority
• Michigan Export Development Authority (merged into MSF)
• Michigan Economic Growth Authority (merged into MSF)
• Metropolitan Extension Telecommunications Rights-of-Way Oversight
Authority
Bonding and Finance
• Issue industrial development revenue bonds
• Issuance of bonds by EDC

Administrative and Compliance Provisions

• Audits
• Administrative fee
• Applications
• Public hearings
• Disclosure of interest
• Conflicts of interest provisions
• Quorum requirements
• Qualifications
• Filling vacancies
• Employment of executive and staff
• Demographic diversity
• Neighborhood review panels
• Prohibited conduct
• Budgets
• Dissolution
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• Enforcement proceedings
• Penalties
• Open meetings
• FOIA; protection of trade secrets (“financial or proprietary
information”)

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International Economic Development Statutory Powers
The following is an outline of the statutory international economic development functions
excerpted from existing Michigan statutes.

1. Research and Related Activities

• Conduct its own research and contract for outside research, when
necessary, on such subjects as
o United States and foreign tariffs
o United States and foreign nontariff barriers and business
practices
o trade statistics;
o individual country and industry markets
o identification of the assets of this state in product offerings and
investment opportunities
o advances in international transport technology, and seaway and
port service improvements.
• Conduct foreign market research to determine areas where promotion
of Michigan products should be concentrated.i
• Maintain a basic foreign trade library where the products of its research
would be readily availableii
• Serve as the clearing house for the interchange of market and product
information between industry of this state and foreign interests.iii

2. Communications and Promotion

• Prepare brochures, in foreign languages as required, which attractively
and persuasively identify the international assets of this state in trade
and investment
• Conduct specialized advertising programs in conjunction with specific
promotional campaigns
• Collect and distribute to commercial libraries overseas directories,
catalogues, brochures and other information of value to foreign
businessmen
• Prepare articles for publication in state, national and foreign media.
• Publish a series of specialized newsletters.
• Prepare news releases on matters of timely interest.
• Provide speakers bureau services for civic organizations and other
private groups in this state.

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 • Develop English versions of foreign promotional presentations for
domestic markets and be responsible for appropriate distribution of all
trade material developed to aid Michigan shippers and foreign buyers.•
• Provide information and referrals to, and to act as a clearinghouse for,
potential and existing exporters.
• Develop or cause to be developed, multilingual promotional materials
for foreign distribution.iv
3. Export Development and Promotion
• Assist, promote, encourage, develop, and advance economic prosperity
and employment throughout this state by fostering the expansion of
exports of goods and services to foreign purchasers.
• Maintain continuing contacts with business of this state to encourage
and, when appropriate, assist them in selling abroad.
• Inform industrialists of this state of the advantages of overseas
arrangements for local manufacturing through joint ventures and
licensing.
• Lead, participate in, support, or otherwise cooperate in trade missions,
trade shows, and related efforts to encourage the export of Michigan
goods and services.
• Coordinate more active and effective state participation in assisting local
groups applying for foreign trade zones.

4. Cooperation with Government and Private Sector

Agencies
• Develop programs of mutual assistance with banks, shipping agents,
combination export managers, freight forwarders, international
consultants, and other trade intermediaries of this state.
• Encourage and assist the expansion of international trade activities of
the chambers of commerce, development commissions, trade
associations and similar organizations in this state.
• Organize, correlate and implement state, industry and commodity
groups on foreign visits and trade missions; selecting potential market
areas; developing and publishing market surveys for potential
penetration by Michigan suppliers.
• Cooperate and act in conjunction with other organizations, public and
private, the objects of which are the promotion and advancement of
export trade activities in this state.

5. Protocol
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 • Maintain continuing contacts with federal agencies, the Congress,
international organizations, foreign embassies, consulates and trade
promotion offices in the United States, regional organizations, and
colleges and universities.
• Promote visits to this state by, and cooperate with, foreign businessmen
and trade association representatives, to be coordinated where desirable
with invitations to visit this state to the appropriate country’s economic
and commercial representatives in the United States.

6. Policy and Legislation

• Coordinate state activities when appropriate for state presentation
before the United States trade commission, interstate commerce
commission, trade information committee, federal maritime
administration, congressional committees, and other similar bodies
when the international interests of the state can thus be advanced.v

7. Ports and Port Development

• Advertise and promote port utilization, including the mounting of
missions to key shipping areas abroad.
• Publish and distribute shipping schedules.
• Serve as a central information and intelligence center for ports matters.
• Coordinate intervention in Great Lakes rate and service cases.
• Spearhead state activities to encourage improvements in the St.
Lawrence seaway.

8. Agricultural Export Promotion

• Conduct research on foreign laws and regulations affecting sales of
agricultural products of this state abroad.
• Identify foreign markets for agricultural commodities.
• Design and execute commodity programs for individual country
markets
• Conduct programs to encourage greater awareness and participation of
the farm community of this state in export sales.
• Encourage and assist the expansion of international activities by the
various commodity commissions.
• Encourage and assist the expansion of international activities by farm
organizations

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 • Coordinate relationships and communications with the foreign
agriculture service, national commodity groups, United States bureau of
commerce, national trade associations and other national agencies in
requests for agriculture trade leads either for Michigan suppliers or in
cooperation with suppliers in other states.
• Encourage Michigan agricultural industry participation in F.A.S. and
bureau of commerce sponsored trade fairs and missions.

9. Administrative Powers
• In connection with any entities created under subsection 7n of the
Michigan Export Development Act acquire and transfer title to goods
and corporate or partnership ownership interest, and enter into joint
ventures with other export trading companies.
• Exercise all other powers and functions necessary or appropriate to
carry out the duties and purposes set forth in the Michigan Export
Development Act.
• Board may delegate to 1 or more of its members or to an official, agent,
or employee of the authority the powers and duties as the board
considers proper.
• Indemnify and procure insurance indemnifying the members of the
board and staff officers appointed by a resolution of the board from
personal loss or accountability from liability asserted by a person on the
bonds or notes of the fund or from any personal liability or
accountability by reason of the issuance of the bonds, notes, insurance,
or guarantees; or by reason of any other action taken or the failure to
act by the authority.
• Maintain as confidential, information submitted to or compiled by the
authority in connection with the authority’s responsibilities with respect
to the identity, background, finance, marketing plans, trade secrets, or
any other commercially sensitive information of persons, firms,
associations, partnerships, agencies, corporations, or other entities,
except to the extent that the person or entity which provided the
information consents to disclosure.
• Possess all the powers of a body politic and corporate necessary and
convenient to accomplish the purposes of the Michigan Export
Development Act.
• Accept gifts, grants, or loans from, and enter into contracts or other
transactions with, a federal or state agency, a municipality, a private
organization, or any other source.
• Sue and be sued.
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• Purchase; receive; take by grant, gift, devise, bequest, or otherwise;
lease; or acquire, own, hold, improve, employ, use, or deal in and with
real or personal property, or any interest in real or personal property,
wherever situated.
• Sell, convey, lease, exchange, transfer, or otherwise dispose of property
or an interest in property, wherever situated.
• Issue, sell, and provide for the retirement of bonds in the amount of
$50,000,000.00 to provide funds for the creation and operation of the
authority. These bonds shall be limited obligations of the authority, the
principal of and interest on which shall be payable solely out of the
revenues derived by the authority. Bonds issued under this act shall not
constitute an indebtedness of the state or the authority within the
meaning of any state constitutional provision or statutory limitation, but
the bonds shall be indebtedness payable solely from bond revenues and
fees, interest on the revenues and fees, and funds established for the
payment of the bonds, and shall not constitute nor give rise to a
pecuniary liability of the state or the authority, to a charge against the
general credit of the authority or the state, or to a charge against the
taxing powers of the state, and that fact shall be plainly stated on the
face of each bond.
• Create an insurance fund consisting solely of funds from the export
development bond fund. The insurance fund shall be held in the
custody of 1 or more financial institutions having a principal place of
business in this state. The insurance fund shall be held as security for
the holders of bonds issued under this act.
• On January 1 of each year, report on its operations for the preceding
fiscal year to the governor and the legislature. The report shall include a
summary of the activities of the authority and a complete operating and
financial statement. The report shall include, but not be limited to,
information on the number, value, type of product, and destination of
export transactions assisted, the type of assistance rendered for each by
the authority, grants made pursuant to section 8a and the results of
those activities, trade shows attended, trade missions led, and any other
information considered necessary for a competent evaluation or the
authority’s effectiveness.
• Provide that the accounts of the authority are audited by the state
auditor general or a certified public accountant appointed by the auditor
general.
• Promulgate rules necessary to carry out the purposes of this act and to
exercise the powers expressly granted in this act pursuant to the
administrative procedures act of 1969, Act No. 306 of the Public Acts
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 of 1969, being sections 24.201 to 24.328 of the Michigan Compiled
Laws.vi

10. Finance and Insurance Powers

• Provide guarantees and grants and to locate sources and export
insurance to support export development not otherwise available.
• Borrow money and otherwise incur indebtedness for any of its
purposes including the issuance of bonds, debentures, notes, or other
evidence of indebtedness, whether secured or unsecured.
• Purchase, discount, sell, or negotiate, with or without guaranty notes,
other evidences of indebtedness, and to sell and guarantee securities.
• Lend money to a financial institution in the form of an eligible export
loan which is used to finance eligible export transactions.
• Procure or locate sources of export insurance.
• To provide guarantees to guarantee, insure, coinsure, or reinsure against
risk of loss, and other insurance or guarantees as the authority may
consider necessary.
• Procure insurance to secure the payment of principal and interest on
bonds, notes, or other obligations of the authority.
• Enter into contracts or other agreements with the export-import bank
of the United States, the foreign credit insurance association, or other
federal agencies or instrumentalities.
• Sponsor or foster a foreign sales corporation as defined in section 922
of the internal revenue code of 1986, 26 U.S.C. 922.
• Establish, participate, and secure federal approval for an export trading
company under the export trading company act of 1982, Public Law
97-290, 96 Stat. 1233, or equivalent entities under similar federal
legislation.
• Provide a guarantee or export insurance for an eligible export
transaction.
• Provide a guarantee or export insurance for an eligible export
transaction.
• Provide the guarantee only if, and to the extent that, the authority
determines in its sole discretion that at least 1 of the following is true:
o (a) The guarantee is reasonably necessary in order to stimulate
or facilitate the making of an eligible export transaction
including, without limitation, the making of the eligible export
transaction upon terms that will enable the transaction to be
reasonably competitive with transactions in other states or in
foreign countries.
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 o (b) The guarantee is reasonably necessary in order to stimulate
or facilitate the resale of an eligible export loan to a holder in
due course that otherwise would not purchase the eligible
export loan and documentation is provided by the financial
institution indicating refusal to provide a loan sufficient for the
eligible export transaction.
• Condition the provision of guarantee or export insurance under section
8 of the Michigan Export Development Act upon such other terms and
conditions as the authority considers desirable to carry out the purposes
of this act.vii

11. Provide Services for Fees

• Provide financial counseling services to businesses of this state
• Charge and collect fees for its services.
• Charge reasonable fees for providing guarantee or export insurance
pursuant to section 8 of the Michigan Export Development Act to a
participating financial institution.

12. Make Grants

• Provide a grant to a non-profit organization for 1 or more of the
following purposes:
o (a) To encourage establishment or expansion of business
operations related to exports which will create or maintain
employment in this state.
o (b) To research industrial and commercial innovations which are
likely to increase exports from this state.
o (c) To conduct market research to determine the potential for
increasing goods and services from this state.

i
Mich. Comp. Laws Ann. §447.123(k) (West 2002).
ii
Mich. Comp. Laws Ann. §447.103(b) (West 2002).
iii
Mich. Comp. Laws Ann. §447.103(c) (West 2002).
iv
Mich. Comp. Laws Ann. §447.123(l) (West 2002).
v
Mich. Comp. Laws Ann. §447.103(q) (West 2002).
vi
Mich. Comp. Laws Ann. §447.157(l) (West 2002).
vii
Mich. Comp. Laws Ann. §447.158(5) (West 2002).