Michigan Laws 125.2090o – Demand for repayment; conditions; growth investments; notification
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Terms Used In Michigan Laws 125.2090o
- Affiliate: means an entity that, directly or indirectly, through 1 or more intermediaries, controls, is controlled by, or is under common control with another entity. See Michigan Laws 125.2090l
- Closing date: means the date on which a rural jobs and capital investment fund has received a grant, loan, or other type of economic assistance. See Michigan Laws 125.2090l
- Fund: means the Michigan strategic fund created under section 5, except where the context clearly requires a different definition. See Michigan Laws 125.2004
- Growth investment: means any capital or equity investment in a qualified business or any loan to a qualified business with a stated maturity at least 1 year after the date of issuance. See Michigan Laws 125.2090l
- Investment authority: means the amount stated on the certificate under section 90m certifying the rural jobs and capital investment fund. See Michigan Laws 125.2090l
- Principal business operations: means the operations of a business are located at the place or places where at least 60% of its employees work or where employees that are paid at least 60% of its payroll work. See Michigan Laws 125.2090l
- Qualified business: means an operating business that, at the time of the initial investment in the business by a rural jobs and capital investment fund, has fewer than 150 employees and is engaged in industries assigned a North American Industry Classification System code within sectors 11, 21, 23, 31 through 33, 42, 48, 49, 54, except 541110 through 541219, 56, 62, and 81 or, if not engaged in any of these industries, the fund determines that the investment will be beneficial to the rural area, the economic growth of this state, and the industry is not assigned a North American Industry Classification System code within sector 51. See Michigan Laws 125.2090l
- Rural jobs and capital investment fund: means an entity approved by the fund under section 90m that meets all of the following:
(i) The entity or 1 or more of its affiliates are regulated by the Securities and Exchange Commission and meet either of the following:
(A) Is a rural business investment company under 7 USC 2009cc or a small business investment company under 15 USC 681. See Michigan Laws 125.2090lstate: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories belonging to the United States; and the words "United States" shall be construed to include the district and territories. See Michigan Laws 8.3o
(1) The fund shall demand immediate repayment of the grants, loans, or other types of economic assistance issued under this chapter if any of the following occurs with respect to the rural jobs and capital investment fund before it is certified to exit the program as provided in this chapter:
(a) The rural jobs and capital investment fund does not invest all its investment authority in growth investments in this state within 3 years of the closing date with 100% of its investment authority invested in growth investments in qualified businesses with principal business operations located in qualified rural local governmental units.
(b) The rural jobs and capital investment fund, after satisfying subdivision (a), fails to maintain growth investments at the levels required by subdivision (a) until the sixth anniversary of the closing date. For the purposes of this subdivision, an investment is maintained even if the investment is sold or repaid so long as the rural jobs and capital investment fund reinvests an amount equal to the capital returned or recovered by the rural jobs and capital investment fund from the original investment, exclusive of any profits realized, in other growth investments in this state within 12 months of the receipt of that capital. Amounts received by a rural jobs and capital investment fund pursuant to periodic repayments shall be treated as continually invested in growth investments if the amounts are reinvested in 1 or more growth investments by the end of the following calendar year. A rural jobs and capital investment fund is not required to reinvest capital returned from growth investments after the fifth anniversary of the closing date, and those growth investments shall be considered held continuously by the rural jobs and capital investment fund through the sixth anniversary of the closing date.
(c) The rural jobs and capital investment fund, before exiting the program in accordance with this chapter, makes a distribution or payment that results in the rural jobs and capital investment fund having less than 100% of its investment authority invested in growth investments in this state or available for investment in growth investments and held in cash and other marketable securities.
(d) The rural jobs and capital investment fund makes a growth investment in a qualified business that directly or indirectly through an affiliate owns, has the right to acquire an ownership interest, makes a loan to, or makes an investment in the rural jobs and capital investment fund, an affiliate of the rural jobs and capital investment fund, or an investor in the rural jobs and capital investment fund. This section does not apply to investments in public-traded securities. For purposes of this subdivision, a rural jobs and capital investment fund will not be considered an affiliate of a business solely because of its growth investment.
(e) The rural jobs and capital investment fund invests in any industry assigned a North American Industry Classification System code within sector 51.
(2) No more than $5,000,000.00 in growth investments in a qualified business, including growth investments in affiliates of the qualified business, shall count toward the requirements of subsection (1)(a) and (b).
(3) Before demanding repayment under this section, the fund shall notify the rural jobs and capital investment fund of the reasons for the pending repayment. The rural jobs and capital investment fund shall have 90 days from the date the notice was dispatched to correct any violation outlined in the notice to the satisfaction of the fund and avoid repayment of the grants, loans, or other types of economic assistance.