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HomeMy WebLinkAboutResolutions - 1999.12.16 - 25644December 16, 1999 REPORT (Misc. #99274) BY: GENERAL GOVERNMENT COMMITTEE -Shelley G. Taub, Chairperson RE: MR #99274 Board of Commissioners (Support) HB 4796, Amend Income Tax Act to Exempt Holocaust Victim Compensation To the Oakland County Board of Commissioners Chairperson, Ladies and Gentlemen: The General Government Committee having reviewed the above mentioned resolution on December 6, 1999, recommends to the Oakland County Board of Commissioners the resolution be adopted. Chairperson, on behalf of the General Government Committee, I move the acceptance of the foregoing report. GENERAL GOVERNMENT COMMITTEE General Government Committee Vote: Motion carried on unanimous roll call vote Michelle Friedman Appel District 423 Chairperson, we move the adoption o h foregoing ) ution. resolution. Shelley Go District #12 Zav,) 40} iciao 7:7 11 L(JJ4, L.4...tc-f1/4 2- - 1. /4 Orriuv v).5 • October 28, 1999 MISCELLANEOUS RESOLUTION #99274 BY: COMMISSIONERS SHELLEY GOODMAN TAUB, DISTRICT #12 AND MICHELLE FRIEDMAN APPEL, DISTRICT #23 IN RE: Board of Commissioners(Support) HB4796, Amend Income Tax Act to Exempt Holocaust Victim Compensation To the Oakland County Board of Commissioners Chairperson, Ladies and Gentlemen: WHEREAS, as a result of the international lawsuit, known as the "Holocaust Victims Asset Litigation", $1.25 billion will soon be distributed to 50,000 Holocaust victims persecuted by Nazi Germany and the Axis Regime, and their heirs and beneficiaries, as a compensation for the seizure and confiscation of their assets which included, but is not limited to, interest earned on assets, securities, bonds, insurance policies, bank deposits, gold, artwork, gems, furniture and books by the Nazis, their allies and neutral trading partners; and WHEREAS, HB4796 would amend the Michigan Income Tax Act to provide a deduction to taxpayers for amounts received through this reparation verdict or as a result of any similar action; and WHEREAS, this bill, which both symbolically and substantially, acknowledges the persecution suffered by the Holocaust victims and recognizes the losses suffered by the victims and their beneficiaries; and WHEREAS, this bill is in accord with similar federal legislation, and is supported by the Department of State Treasury. NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners does hereby support HB4796, a bill to Amend Income Tax Act to Exempt Holocaust Victim HIloppensation. 4797 MICHIGAN LEGISLATIVE INFORJylATION http://www.michrgan1egisIdture.org/isapi/nIs_ax.d11/Bil1Search Michigan egislature 4776 to 4800 House Bill 4796 (1999-2000) Sponsor - Representative - M. Shulman Categories: Income-tax Income tax; deductions; Holocaust survivors; provide deduction for settlement proceeds. Amends sec. 30 of 1967 PA 281 (MCL 206.30). House Introduced Bill a iwr Introduced bills appear as they were introduced and reflect no subsequent amendments or changes. — As Passed By The House As passed by the House is the bill, as introduced, that includes any adopted F F House amendments, delineated within brackets, and/or substitute before transmittal to the Senate. . . _ As Passed By The Senate As passed by the Senate is the bill, as received from the House, that includes III 111 any adopted Senate amendments, delineated with shading, and/or substitute before transmittal to the House. _.... House Enrolled Bill ! Enrolled bill is the version passed in identical form by both houses of the Legislature. LommilL 1 House Legislative Analysis First Analysis (10-6-99) M. Mr This document analyzes: HB 4796 History 1 of 2 10/08/19992:50 PM http://www.michigan1fgis1ature.org/isapi/nIs_ax.d11/Bi1lSearch MICHIGAN LEGISLATIVE INFORMATION I Action 06/17/1999 HJ 57 P. 1713 referred to Committee on Tax Policy I 10/05/1999 HJ 64 P. 1870 reported with recommendation without amendment(s) 10/05/1999 HJ 64 P. 1870 referred to second reading 110/06/1999 HJ 65 P. 1881 placed on third reading [-I 0/06/1999 HJ 65 P. 1881 placed on immediate passage 110/06/1999 HJ 65 P. 1881 passed; given immediate effect: Roll Call # 0849 Yeas 103 Nays 000 10/07/1999 SJ 66 REFERRED TO COMMITTEE ON FINANCE SEARCH for a Bill / Resolution / Sponsor I Browse House Bills I Browse Senate Bills SEARCH by Subject Categories I Journals I Calendars I Session Schedules House Committee Schedules I Senate Committee Schedules Public Acts Tables I MCL Tables I FAQ I Comments 2 of 2 10/08/1999 2:50 PM HB4796,•As Passed House, October 6, 1999 • House Bill No. 4796 A bill to amend 1967 PA 281, entitled "Income tax act of 1967," by amending section 30 (MCL 206.30), as amended by 1997 PA 86. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: Sec. 30. (1) "Taxable income" means, for a person other 2 than a corporation, estate, or trust, adjusted gross income as 3 defined in the internal revenue code subject to the following 4 adjustments and the adjustments provided in subsections (2) to 5 (4): 6 (a) Add gross interest income and dividends derived from 7 obligations or securities of states other than Michigan, in the 8 same amount that has been excluded from adjusted gross income 9 less related expenses not deducted in computing adjusted gross 10 income because of section 265(a)(1) of the internal revenue 11 code. 03587'99 RJA HB4796,, As Passed House, October 6, 1999 2 1 (b) Add taxes on or measured by income to the extent the 2 taxes have been deducted in arriving at adjusted gross income. 3 (c) Add losses on the sale or exchange of obligations of the 4 United States government, the income of which this state is pro- 5 hibited from subjecting to a net income tax, to the extent that 6 the loss has been deducted in arriving at adjusted gross income. 7 (d) Deduct, to the extent included in adjusted gross income, 8 income derived from obligations, or the sale or exchange of obli- 9 gations, of the United States government that this state is pro- 10 hibited by law from subjecting to a net income tax, reduced by 11 any interest on indebtedness incurred in carrying the obligations 12 and by any expenses incurred in the production of that income to 13 the extent that the expenses, including amortizable bond premi- 14 urns, were deducted in arriving at adjusted gross income. 15 (e) Deduct, to the extent included in adjusted gross income, 16 compensation, including retirement benefits, received for serv- 17 ices in the armed forces of the United States. 18 (f) Deduct the following to the extent included in adjusted 19 gross income: 20 (i) Retirement or pension benefits received from a federal 21 public retirement system or from a public retirement system of or 22 created by this state or a political subdivision of this state. 23 (ii) Retirement or pension benefits received from a public 24 retirement system of or created by another state or any of its 25 political subdivisions if the income tax laws of the other state 26 permit a similar deduction or exemption or a reciprocal deduction 27 or exemption of a retirement or pension benefit received from a 03587'99 HB4796, As Passed House, October 6, 1999 '11. 1 public retirement system of or created by this state or any of 2 the political subdivisions of this state. 3 (iii) Social security benefits as defined in section 86 of 4 the internal revenue code. 5 (iv) Before October 1, 1994, retirement or pension benefits 6 from any other retirement or pension system as follows: 7 (A) For a single return, the sum of not more than 8 $7,500.00. 9 (B) For a joint return, the sum of not more than 10 $10,000.00. 11 (v) After September 30, 1994, retirement or pension benefits 12 not deductible under subparagraph (i) or subdivision (e) from any 13 other retirement or pension system or benefits from a retirement 14 annuity policy in which payments are made for life to a senior 15 citizen, to a maximum of $30,000.00 for a single return and 16 $60,000.00 for a joint return. The maximum amounts allowed under 17 this subparagraph shall be reduced by the amount of the deduction 18 for retirement or pension benefits claimed under subparagraph (1) 19 or subdivision (e) and for tax years after the 1996 tax year by 20 the amount of a deduction claimed under subdivision (r). For the 21 1995 tax year and each tax year after 1995, the maximum amounts 22 allowed under this subparagraph shall be adjusted by the percen- 23 tage increase in the United States consumer price index for the 24 immediately preceding calendar year. The department shall annu- 25 alize the amounts provided in this subparagraph and subparagraph 26 (iv) as necessary for tax years that end after September 30, 03587'99 HB4796,,As Passed House, October 6, 1999 Elo 1 1994. As used in this subparagraph, "senior citizen" means that 2 term as defined in section 514. 3 (vi) The amount determined to be the section 22 amount eli- 4 gible for the elderly and THE permanently and totally disabled 5 credit provided in section 22 of the internal revenue code. 6 (g) Adjustments resulting from the application of section 7 271. 8 (h) Adjustments with respect to estate and trust income as 9 provided in section 36. 10 (i) Adjustments resulting from the allocation and apportion- 11 ment provisions of chapter 3. 12 (j) Deduct political contributions as described in section 4 13 of the Michigan campaign finance act, 1976 PA 388, MCL 169.204, 14 or section 301 of title III of the federal election campaign act 15 of 1971, Public Law 92-225, 2 U.S.C. 431, not in excess of $50.00 16 per annum, or $100.00 per annum for a joint return. 17 (k) Deduct, to the extent included in adjusted gross income, 18 wages not deductible under section 2800 of the internal revenue 19 code. 20 (/) Deduct the following payments made by the taxpayer in 21 the tax year: 22 (i) The amount of payment made under an advance tuition pay- 23 ment contract as provided in the Michigan education trust act, 24 1986 PA 316, MCL 390.1421 to 390.1444. 25 (ii) The amount of payment made under a contract with a pri- 26 vate sector investment manager that meets all of the following 27 criteria: 03587'99 HB4796,,As Passed House, October 6, 1999 . . 5 4h 1 (A) The contract is certified and approved by the board of 2 directors of the Michigan education trust to provide equivalent 3 benefits and rights to purchasers and beneficiaries as an advance 4 tuition payment contract as described in subparagraph (1). 5 (B) The contract applies only for a state institution of 6 higher education as defined in the Michigan education trust act, 7 1986 PA 316, MCL 390.1421 to 390.1444, or a community or junior 8 college in Michigan. 9 (C) The contract provides for enrollment by the contract's 10 qualified beneficiary in not less than 4 years after the date on 11 which the contract is entered into. 12 (D) The contract is entered into after either of the 13 following: 14 (I) The purchaser has had his or her offer to enter into an 15 advance tuition payment contract rejected by the board of direc- 16 tors of the Michigan education trust, if the board determines 17 that the trust cannot accept an unlimited number of enrollees 18 upon an actuarially sound basis. 19 (II) The board of directors of the Michigan education trust 20 determines that the trust can accept an unlimited number of 21 enrollees upon an actuarially sound basis. 22 (m) If an advance tuition payment contract under the 23 Michigan education trust act, 1986 PA 316, MCL 390.1421 to 24 390.1444, or another contract for which the payment was deducti- 25 ble under subdivision (1) is terminated and the qualified benefi- 26 ciary under that contract does not attend a university, college, 27 junior or community college, or other institution of higher 03587'99 HB4796„As Passed House, October 6, 1999 . . 6 41. 1 education, add the amount of a refund received by the taxpayer as 2 a result of that termination or the amount of the deduction taken 3 under subdivision (/) for payment made under that contract, 4 whichever is less. 5 (n) Deduct from the taxable income of a purchaser the amount 6 included as income to the purchaser under the internal revenue 7 code after the advance tuition payment contract entered into 8 under the Michigan education trust act, 1986 PA 316, MCL 390.1421 9 to 390.1444, is terminated because the qualified beneficiary 10 attends an institution of postsecondary education other than 11 either a state institution of higher education or an institution 12 of postsecondary education located outside this state with which 13 a state institution of higher education has reciprocity. 14 (o) Add, to the extent deducted in determining adjusted 15 gross income, the net operating loss deduction under section 172 16 of the internal revenue code. 17 (p) Deduct a net operating loss deduction for the taxable 18 year as determined under section 172 of the internal revenue code 19 subject to the modifications under section 172(b)(2) of the 20 internal revenue code and subject to the allocation and appor- 21 tionment provisions of chapter 3 of this act for the taxable year 22 in which the loss was incurred. 23 (q) For a tax year beginning after 1986, deduct, to the 24 extent included in adjusted gross income, benefits from a dis- 25 criminatory self-insurance medical expense reimbursement plan. 26 (r) After September 30, 1994 and before the 1997 tax year, a 27 taxpayer who is a senior citizen may deduct, to the extent 03587'99 HB4796, As Passed House, October 6, 1999 • 1 1 included in adjusted gross income, interest and dividends 2 received in the tax year not to exceed $1,000.00 for a single 3 return or $2,000.00 for a joint return. However, for tax years 4 before the 1997 tax year, the deduction under this subdivision 5 shall not be taken if the taxpayer takes a deduction for retire- ment benefits under subdivision (e) or a deduction under 7 subdivision (f)(1), (ii), (iv), or (v). For tax years after the 8 1996 tax year, a taxpayer who is a senior citizen may deduct to 9 the extent included in adjusted gross income, interest, divi- 10 dends, and capital gains received in the tax year not to exceed 11 $3,500.00 for a single return and $7,000.00 for a joint return 12 for the 1997 tax year, and $7,500.00 for a single return and 13 $15,000.00 for a joint return for tax years after the 1997 tax 14 year. For tax years after the 1996 tax year, the maximum amounts 15 allowed under this subdivision shall be reduced by the amount of 16 a deduction claimed for retirement benefits under subdivision (e) 17 or a deduction claimed under subdivision (f) (1), (ii), (iv), or 18 (v). For the 1995 tax year, for the 1996 tax year, and for each 19 tax year after the 1998 tax year, the maximum amounts allowed 20 under this subdivision shall be adjusted by the percentage 21 increase in the United States consumer price index for the imme- 22 diately preceding calendar year. The department shall annualize 23 the amounts provided in this subdivision as necessary for tax 24 years that end after September 30, 1994. As used in this subdi- 25 vision, "senior citizen" means that term as defined in section 26 514. 03587'99 HB4796, , As Passed House, October 6, 1999 46 1 (s) Deduct, to the extent included in adjusted gross income, 2 all of the following: 3 (i) The amount of a refund received in the tax year based on 4 taxes paid under this act. 5 (ii) The amount of a refund received in the tax year based 6 on taxes paid under the city income tax act, 1964 PA 284, 7 MCL 141.501 to 141.787. 8 (iii) The amount of a credit received in the tax year based 9 on a claim filed under sections 520 and 522 to the extent that 10 the taxes used to calculate the credit were not used to reduce 11 adjusted gross income for a prior year. 12 (t) Add the amount paid by the state on behalf of the tax- 13 payer in the tax year to repay the outstanding principal on a 14 loan taken on which the taxpayer defaulted that was to fund an 15 advance tuition payment contract entered into under the Michigan 16 education trust act, 1986 PA 316, MCL 390.1421 to 390.1444, if 17 the cost of the advance tuition payment contract was deducted 18 under subdivision (1) and was financed with a Michigan education 19 trust secured loan. 20 (u) For the 1998 tax year and each tax year after the 1998 21 tax year, deduct the amount calculated under section 30d. 22 (V) FOR TAX YEARS THAT BEGIN ON AND AFTER JANUARY 1, 1994, 23 DEDUCT, TO THE EXTENT INCLUDED IN ADJUSTED GROSS INCOME, ANY 24 AMOUNT, AND ANY INTEREST EARNED ON THAT AMOUNT, RECEIVED IN THE 25 TAX YEAR BY A TAXPAYER WHO IS A HOLOCAUST VICTIM AS A RESULT OF A 26 SETTLEMENT OF CLAIMS AGAINST ANY ENTITY OR INDIVIDUAL FOR ANY 27 RECOVERED ASSET PURSUANT TO THE GERMAN ACT REGULATING UNRESOLVED 03587'99 1184796, As passed House, October 6, 1999 4.. 1 PROPERTY CLAIMS, ALSO KNOWN AS GESETZ ZUR REGELUNG OFFENER 2 VERMOGENSFRAGEN, AS A RESULT OF THE SETTLEMENT OF THE ACTION 3 ENTITLED IN RE: HOLOCAUST VICTIMS ASSFTS, CV-96-4849, CV 96-6161, 4 AND CV 97-0461 (E.D. NY), OR AS A RESULT OF ANY SIMILAR ACTION. 5 AS USED IN THIS SUBDIVISION: 6 (i) "HOLOCAUST VICTIM" MEANS A PERSON, OR THE HEIR OR BENE- 7 FICIARY OF THAT PERSON, WHO WAS PERSECUTED BY NAZI GERMANY OR ANY 8 AXIS REGIME DURING ANY PERIOD FROM 1933 TO 1945. 9 (ii) "RECOVERED ASSET" MEANS ANY ASSET OF ANY TYPE AND ANY 10 INTEREST EARNED ON THAT ASSET INCLUDING, BUT LIMITED TO, BANK 11 DEPOSITS, INSURANCE PROCEEDS, OR ARTWORK OWNED BY A HOLOCAUST 12 VICTIM DURING THE PERIOD FROM 1920 TO 1945, WITHHELD FROM THAT 13 HOLOCAUST VICTIM FROM AND AFTER 1945, AND NOT RECOVERED, 14 RETURNED, OR OTHERWISE COMPENSATED TO THE HOLOCAUST VICTIM UNTIL 15 AFTER 1994. 16 (2) The following personal exemptions multiplied by the 17 number of personal or dependency exemptions allowable on the 18 taxpayer's federal income tax return pursuant to the internal 19 revenue code shall be subtracted in the calculation that deter- 20 mines taxable income: 21 (a) For a tax year beginning during 1987 $1,600.00. 22 (b) For a tax year beginning during 1988 $1,800.00. 23 (c) For a tax year beginning during 1989 $2,000.00. 24 (d) For a tax year beginning after 1989 and before 25 1995 $2,100.00. 26 (e) For a tax year beginning during 1995 or 1996 $2,400.00. 03587'99 HB4796,As Passed House, October 6, 1999 16 1 (f) Except as otherwise provided in subsection (7), 2 for a tax year beginning after 1996 $2,500.00. 3 (3) A single additional exemption of $1,400.00 for a tax 4 year beginning during 1987, $1,200.00 for a tax year beginning 5 during 1988, $1,000.00 for a tax year beginning during 1989, and 6 $900.00 for a tax year beginning after 1989 shall be subtracted 7 in the calculation that determines taxable income in each of the 8 following circumstances: 9 (a) The taxpayer is a paraplegic, a quadriplegic, a hemiple- 10 gic, a person who is blind as defined in section 504, or a PERSON 11 WHO IS totally and permanently disabled person as defined in 12 section 522. 13 (b) The taxpayer is a deaf person as defined in section 2 of 14 the deaf persons' interpreters act, 1982 PA 204, MCL 393.502. 15 (c) The taxpayer is 65 years of age or older. 16 (d) The return includes unemployment compensation that 17 amounts to 50% or more of adjusted gross income. 18 (4) For a tax year beginning after 1987, an individual with 19 respect to whom a deduction under section 151 of the internal 20 revenue code is allowable to another federal taxpayer during the 21 tax year is not considered to have an allowable federal exemption 22 for purposes of subsection (2), but may subtract $500.00 in the 23 calculation that determines taxable income for a tax year begin- 24 ning in 1988 and $1,000.00 for a tax year beginning after 1988. 25 (3) A nonresident or a part-year resident is allowed that 26 proportion of an exemption or deduction allowed under subsection 27 (2), (3), or (4) that the taxpayer's portion of adjusted gross 03587'99 HB4796, As Passed House, October 6, 1999 117 1 income from Michigan sources bears to the taxpayer's total 2 adjusted gross income. 3 (6) For a tax year beginning after 1987, in calculating tax- 4 able income, a taxpayer shall not subtract from adjusted gross 5 income the amount of prizes won by the taxpayer under the 6 McCauley-Traxler-Law-Bowman-McNeely lottery act, 1972 PA 239, 7 MCL 432.1 to 432.47. 8 (7) For each tax year after the 1997 tax year, the personal 9 exemption allowed under subsection (2) shall be adjusted by 10 multiplying the exemption for the tax year beginning in 1997 by a 11 fraction, the numerator of which is the United States consumer 12 price index for the state fiscal year ending in the tax year 13 prior to the tax year for which the adjustment is being made and 14 the denominator of which is the United States consumer price 15 index for the 1995-96 state fiscal year. The resultant product 16 shall be rounded to the nearest $100.00 increment. The personal 17 exemption for the tax year shall be determined by adding $200.00 18 to that rounded amount. As used in this section, "United States 19 consumer price index" means the United States consumer price 20 index for all urban consumers as defined and reported by the 21 United States department of labor, bureau of labor statistics. 22 (8) As used in subsection (1)(f), "retirement or pension 23 benefits" means distributions from all of the following: 24 (a) Except as provided in subdivision (d), qualified pension 25 trusts and annuity plans that qualify under section 401(a) of the 26 internal revenue code, including all of the following: 03587'99 HB4796, As Passed House, October 6, 1999 1 (i) Plans for self-employed persons, commonly known as Keogh 2 or HR 10 plans. 3 (ii) Individual retirement accounts that qualify under sec- 4 tion 408 of the internal revenue code if the distributions are 5 not made until the participant has reached 59-1/2 years of age, 6 except in the case of death, disability, or distributions 7 described by section 72(t)(2)(iv) 72(t)(2)(A)(iv) of the inter- 8 nal revenue code. 9 (iii) Employee annuities or tax-sheltered annuities pur- 10 chased under section 403(b) of the internal revenue code by 11 organizations exempt under section 501(c)(3) of the internal rev- 12 enue code, or by public school systems. 13 (iv) Distributions from a 401k 401(k) plan attributable to 14 employee contributions mandated by the plan or attributable to 15 employer contributions. 16 (b) The following retirement and pension plans not qualified 17 under the internal revenue code: 18 (i) Plans of the United States, state governments other than 19 this state, and political subdivisions, agencies, or instrumen- 20 talities of this state. 21 (ii) Plans maintained by a church or a convention or associ- 22 ation of churches. 23 (iii) All other unqualified pension plans that prescribe 24 eligibility for retirement and predetermine contributions and 25 benefits if the distributions are made from a pension trust. 26 (c) Retirement or pension benefits received by a surviving 27 spouse if those benefits qualified for a deduction prior to the ; ; 03587'99 HB4796, As Passed House, October 6, 1999. 13' 4.11b 1 decedent's death. Benefits received by a surviving child are not 2 deductible. 3 (d) Retirement and pension benefits do not include: 4 (i) Amounts received from a plan that allows the employee to 5 set the amount of compensation to be deferred and does not pre- 6 scribe retirement age or years of service. These plans include, 7 but are not limited to, all of the following: 8 (A) Deferred compensation plans under section 457 of the 9 internal revenue code. 10 (B) Distributions from plans under section 401(k) of the 11 internal revenue code other than plans described in 12 subdivision (a) (iv) 13 (C) Distributions from plans under section 403(b) of the 14 internal revenue code other than plans described in 15 subdivision (a) (iii) 16 (ii) Premature distributions paid on separation, withdrawal, 17 or discontinuance of a plan prior to the earliest date the recip- 18 ient could have retired under the provisions of the plan. 19 (iii) Payments received as an incentive to retire early 20 unless the distributions are from a pension trust. 21 Enacting section 1. Notwithstanding any other provision of 22 law, this amendatory act is intended to be retroactive and effec- 23 tive for tax years that begin on and after January 1, 1994. 1 03587'99 Final page. RJA 4 I • r .0 Resolution #99274 October 28, 1999 The Chairperson referred the resolution to the General Government Committee. There were no objections. OP 40, Resolution #99274 December 16, 1999 Moved by Taub supported by Appel the General Government Committee Report be accepted. A sufficient majority having voted therefor, the report was accepted. Moved by Taub supported by Appel the resolution be adopted. AYES: Gregory, Law, McCulloch, McPherson, Melton, Millard, Moffitt, Obrecht, Palmer, Patterson, Schmid, Sever, Suarez, Taub, Amos, Appel, Causey-Mitchell, Colasanti, Coleman, Dingeldey, Douglas, Galloway, Garfield. (23) NAYS: None. (0) A sufficient majority having voted therefor, the resolution was adopted. STATE OF MICHIGAN) COUNTY OF OAKLAND) I, G. William Caddell, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and accurate copy of a resolution adopted by the Oakland County Board of Commissioners on December 16, 1999 with the original record thereof now remaining in my office. In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakland at Pontiac, Michigan this„116th4y of December, 1999. G. William Caddell, County Clerk