SB-0891, As Passed House, December 14, 2006

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

SENATE BILL NO. 891

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1941 PA 122, entitled

 

"An act to establish the revenue collection duties of the

department of treasury; to prescribe its powers and duties as the

revenue collection agency of the state; to prescribe certain powers

and duties of the state treasurer; to regulate the importation,

stamping, and disposition of certain tobacco products; to provide

for the transfer of powers and duties now vested in certain other

state boards, commissions, departments and offices; to prescribe

certain duties of and require certain reports from the department

of treasury; to provide procedures for the payment, administration,

audit, assessment, levy of interests or penalties on, and appeals

of taxes and tax liability; to prescribe its powers and duties if

an agreement to act as agent for a city to administer, collect, and

enforce the city income tax act on behalf of a city is entered into

with any city; to provide an appropriation; to abolish the state

board of tax administration; to prescribe penalties and provide

remedies; and to declare the effect of this act,"

 

by amending the title and sections 1, 3, 13, and 28 (MCL 205.1,

 

205.3, 205.13, and 205.28), the title and section 1 as amended by

 

2002 PA 657, section 3 as amended by 2003 PA 92, section 13 as

 

amended by 1996 PA 479, and section 28 as amended by 2003 PA 114.

 


Senate Bill No. 891 as amended December 6, 2006

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

TITLE

 

     An act to establish the revenue collection duties of the

 

department of treasury; to prescribe its powers and duties as the

 

revenue collection agency of  the  this state; to prescribe certain

 

powers and duties of the state treasurer; to establish the

 

collection duties of certain <<other>> state departments for money or

 

accounts owed to this state; to regulate the importation, stamping,

 

and disposition of certain tobacco products; to provide for the

 

transfer of powers and duties now vested in certain other state

 

boards, commissions, departments, and offices; to prescribe certain

 

duties of and require certain reports from the department of

 

treasury; to provide procedures for the payment, administration,

 

audit, assessment, levy of interests or penalties on, and appeals

 

of taxes and tax liability; to prescribe its powers and duties if

 

an agreement to act as agent for a city to administer, collect, and

 

enforce the city income tax act on behalf of a city is entered into

 

with any city; to provide an appropriation; to abolish the state

 

board of tax administration; to prescribe penalties and provide

 

remedies; and to declare the effect of this act.

 

     Sec. 1. (1) The department  of treasury  is the agency of this

 

state responsible for the collection of taxes and is responsible

 

for all of the following:

 

     (a) Coordinated collection of state taxes, assessments,

 

licenses, fees, and other money as may be designated by law.

 

     (b) Specialized service for tax enforcement, through

 

establishment and maintenance of uniformity in definition,

 


regulation, return, and payment.

 

     (c) Avoidance of duplication in state facilities for tax

 

collections that involve seasonal or occasional increases of staff,

 

duplication of audits, and wasteful travel expenses.

 

     (d) Safeguarding tax and other collections wherever received

 

until duly deposited in the state treasury.

 

     (e) Providing an advisory service on fiscal status, processes,

 

and needs of state government, including periodic reports on

 

payments, receipts, and debts.

 

     (f) Development of a state revenue enforcement service by

 

means of a staff that is permanent, qualified by training and

 

experience, protected by merit system procedure, and so organized

 

as to serve the public with efficiency, economy, consistency, and

 

equity.

 

     (g) Except as otherwise provided in this act, supervise and

 

control the collection of all past due money and accounts owed to

 

this state or to any officer, department, commission, board, or

 

agency of this state.

 

     (2) Any reference to the department of revenue in this act or

 

any other act shall mean the state treasurer. Any reference to the

 

state commissioner of revenue in this act or any other act shall

 

mean the state treasurer.

 

     (3) As used in this act:  , "department"  

 

     (a) "Department" means the department of treasury.

 

     (b) "Support" means that term as defined in section 2 of the

 

support and parenting time enforcement act, 1982 PA 295, MCL

 

552.602.

 


     Sec. 3.  The  Except as otherwise provided in this act, the

 

department shall have all the powers and perform the duties

 

formerly vested in a department, board, commission, or other

 

agency, in connection with taxes due to or claimed by this state

 

and in connection with unpaid accounts or  amounts  money due to

 

this state or any of its departments, institutions, or agencies

 

that may be made payable to or collectible by the department

 

created by this act. The department has the power and authority

 

incidental to the performance of the following acts, duties, and

 

services:

 

     (a) The state treasurer or a duly appointed agent of the state

 

treasurer may examine the books, records, and papers touching the

 

matter at issue of any person or taxpayer subject to any tax,

 

unpaid account, or  amount  money the collection of which is

 

charged to the department. The state treasurer or a duly appointed

 

agent of the state treasurer may issue a subpoena requiring a

 

person to appear and be examined with reference to a matter within

 

the scope of the inquiry or investigation being conducted by the

 

department and to produce any books, records, or papers. The state

 

treasurer or a duly appointed agent, referee, or examiner of the

 

state treasurer may administer an oath to a witness in any matter

 

before the department. The department may invoke the aid of the

 

circuit court of this state in requiring the attendance and

 

testimony of witnesses and the producing of books, papers, and

 

documents. The circuit court of this state within the jurisdiction

 

of which an inquiry is carried on, in case of contumacy or refusal

 

to obey a subpoena, may issue an order requiring the person to

 


appear before the department and produce books and papers if so

 

ordered and any evidence touching the matter in question, and

 

failure to obey the order of the court may be punished by the court

 

as a contempt. A person shall not be excused from testifying or

 

from producing any books, papers, records, or memoranda in any

 

investigation, or upon any hearing when ordered to do so by the

 

state treasurer, upon the ground that the testimony or evidence,

 

documentary or otherwise, may tend to incriminate or subject him or

 

her to a criminal penalty, however, a person shall not be

 

prosecuted or subjected to any criminal penalty for or on account

 

of any transaction made or thing concerning which he or she may

 

testify or produce evidence, documentary or otherwise, before the

 

department or its agent. A person testifying is not exempt from

 

prosecution and punishment for perjury committed while testifying.

 

     (b) After reasonable notice and public hearing, the department

 

may promulgate rules consistent with this act in accordance with

 

the administrative procedures act of 1969, 1969 PA 306, MCL 24.201

 

to 24.328, necessary to the enforcement of the provisions of tax

 

and other revenue measures that are administered by the department.

 

     (c) The department may consult with the governor and the

 

legislature on the subject of taxation, revenue, and the

 

administration of the laws in relation to taxation and revenue, and

 

the progress of the work of the department, including the

 

furnishing of reports, information, and other assistance as the

 

governor may require.

 

     (d) The department may investigate and study all matters of

 

taxation and revenue as the basis of recommending to the governor

 


and the legislature those changes and alterations in the tax laws

 

of this state, as in the state treasurer's judgment may bring about

 

a more adequate and just system of state and local taxation.

 

     (e) The department may formulate a standard procedure that

 

requires the departments, commissions, boards, institutions, and

 

the agencies of this state that collect taxes, fees, or accounts

 

for this state to report all sums of money due and uncollected and

 

those uncollected items as prescribed by law and by the state

 

treasurer. The procedure prescribed in this subdivision shall

 

include a standard practice for receiving, receipting,

 

safeguarding, and periodically reporting all state revenue

 

receipts, whether current, delinquent, penalty, interest, or

 

otherwise, and the amounts, kinds, and terms of items either

 

collected, compromised, or still outstanding, to be summarized,

 

studied, and reported upon as the state treasurer considers

 

advisable.

 

     (f) The department may periodically issue bulletins that index

 

and explain current department interpretations of current state tax

 

laws. Beginning  90 days after the effective date of the amendatory

 

act that added this sentence  October 22, 2003, each bulletin or

 

letter ruling issued by the department on or after August 18, 2000

 

shall be published and made available to the public in printed and

 

electronic formats. The department may charge a reasonable fee for

 

subscriptions to this service not to exceed the cost of printing.

 

The money received from the sale of subscriptions shall revert to

 

the department and be placed in the taxation manual revolving fund.

 

     Sec. 13. (1) The department of treasury shall administer and

 


enforce the following laws and shall succeed to and is vested with

 

all of the powers, duties, functions, responsibilities, and

 

jurisdiction now or hereafter conferred upon the following:

 

     (a) State board of tax administration, by the general sales

 

tax act,  Act No. 167 of the Public Acts of 1933, being sections

 

205.51 to 205.78 of the Michigan Compiled Laws  1933 PA 167, MCL

 

205.51 to 205.78, and by the use tax act,  Act No. 94 of the Public

 

Acts of 1937, being sections 205.91 to 205.111 of the Michigan

 

Compiled Laws  1937 PA 94, MCL 205.91 to 205.111.

 

     (b) Auditor general, by  Act No. 282 of the Public Acts of

 

1905, being sections 207.1 to 207.21 of the Michigan Compiled Laws  

 

1905 PA 282, MCL 207.1 to 207.21, and by the Michigan estate tax

 

act,  Act No. 188 of the Public Acts of 1899, being sections

 

205.201 to 205.256 of the Michigan Compiled Laws  1899 PA 188, MCL

 

205.201 to 205.256.

 

     (c) State tax commission, by  Act No. 48 of the Public Acts of

 

1929, being sections 205.301 to 205.317 of the Michigan Compiled

 

Laws, and by Act No. 301 of the Public Acts of 1939, being sections

 

205.131 to 205.147 of the Michigan Compiled Laws  1929 PA 48, MCL

 

205.301 to 205.317.

 

     (d) State tax commission, by section 61524  of part 615

 

(supervisor of wells)  of the natural resources and environmental

 

protection act,  Act No. 451 of the Public Acts of 1994, being

 

section 324.61524 of the Michigan Compiled Laws  1994 PA 451, MCL

 

324.61524.

 

     (e) The commission shall also succeed to and is vested with

 

all of the powers, duties, functions, responsibilities, and

 


Senate Bill No. 891 as amended December 6, 2006

ommission over the

 

enforcement, investigation, and collection of past due and

 

delinquent corporate privilege and franchise fees and license fees

 

of any nature. The corporation and securities commission shall,

 

whenever requested by the department, report to the department the

 

names of all delinquent corporations and delinquent licensees, and

 

the department shall be charged with the collection of all fees and

 

licenses covered in the reports.

 

     <<(e) (f) The department shall succeed to and is vested with all

 

powers, duties, functions, responsibilities, and jurisdiction of

 

the attorney general over the collection of all past due money and

 

accounts that are owing to the state of Michigan or any department,

 

commission, or institution of this state, vested in the attorney

 

general by Act No. 375 of the Public Acts of 1927, being sections

 

14.131 to 14.134 of the Michigan Compiled Laws 1927 PA 375, MCL 14.131

to 14.134.

 

     (F)>>  (g)  For cities that enter into an agreement with the

 

department of treasury pursuant to section 9 of chapter 1 of the

 

city income tax act,  Act No. 284 of the Public Acts of 1964, being

 

section 141.509 of the Michigan Compiled Laws  1964 PA 284, MCL

 

141.509, the department of treasury is vested with all the powers,

 

duties, functions, responsibilities, and jurisdiction to

 

administer, collect under, and enforce  Act No. 284 of the Public

 

Acts of 1964 as provided in Act No. 284 of the Public Acts of 1964  

 

the city income tax act, 1964 PA 284, MCL 141.501 to 141.787, as

 

provided in the city income tax act, 1964 PA 284, MCL 141.501 to

 

141.787, and the agreement. The department of treasury shall not

 

charge to or collect from a taxpayer any amount not otherwise

 


authorized by law in conjunction with the collection of the tax

 

pursuant to an agreement entered into under section 9 of chapter 1

 

of  Act No. 284 of the Public Acts of 1964  the city income tax

 

act, 1964 PA 284, MCL 141.509.

 

     (2) The department of human services and its designees are

 

vested with all of the powers, duties, functions, responsibilities,

 

and jurisdiction of the department of treasury under this act for

 

the enforcement, investigation, and collection of support owed to

 

this state.

 

     (3) Except as otherwise provided in this act, each state

 

officer, department, board, commission, or agency from time to time

 

shall forward to the department of treasury statements of all

 

delinquent and past due money, specific taxes, and accounts owing

 

or belonging to this state, or any officer, department, board,

 

commission, or agency of this state together with any information

 

necessary to enable the department to carry out the purposes of

 

this act. The department shall do all of the following:

 

     (a) Keep an accurate record and account of all of the

 

statements.

 

     (b) Enforce payment and collection of the money, specific

 

taxes, or accounts.

 

     (c) Keep an accurate account of all money, specific taxes, or

 

accounts collected.

 

     (d) Report monthly all collections made to the officer,

 

department, board, commission, or agency to which the indebtedness

 

was incurred.

 

     (e) Pay monthly to the state treasurer all money collected

 


Senate Bill No. 891 as amended December 6, 2006

 

unless otherwise provided by law.

 

     <<                                                       

 

                                                            

 

                                                               

 

                                                           

 

                                                             

 

                                                                  

 

                                                               

 

     (4) The department of human services>> or its designee

authorized under subsection

 

(2) to collect support owed to this state may settle and compromise

 

claims and accounts and receive and issue receipts for collections

 

and payments, subject to the authority granted to it by the social

 

security act, 42 USC 301 to 1397jj, the office of child support

 

act, 1971 PA 174, MCL 400.231 to 400.240, and the support and

 

parenting time enforcement act, 1982 PA 295, MCL 552.601 to

 

552.650.

 

     Sec. 28. (1) The following conditions apply to all taxes

 

administered under this act unless otherwise provided for in the

 

specific tax statute:

 

     (a) Notice, if required, shall be given either by personal

 

service or by certified mail addressed to the last known address of

 

the taxpayer. Service upon the department may be made in the same

 

manner.

 

     (b) An injunction shall not issue to stay proceedings for the

 

assessment and collection of a tax.

 

     (c) In addition to the mode of collection provided in this

 

act, the department may institute an action at law in any county in

 


Senate Bill No. 891 as amended December 6, 2006

 

which the taxpayer resides or transacts business.

 

     (d) The state treasurer may request in writing information or

 

records in the possession of any other department, institution, or

 

agency of state government for the performance of duties under this

 

act. Departments, institutions, or agencies of state government

 

shall furnish the information and records upon receipt of the state

 

treasurer's request. Upon request of the state treasurer, any

 

department, institution, or agency of state government shall hold a

 

hearing under the administrative procedures act of 1969, 1969 PA

 

306, MCL 24.201 to 24.328, to consider withholding a license or

 

permit of a person for nonpayment of taxes or accounts collected

 

under this act.

 

     (e) Except as otherwise provided in <<             >> section 30c,

 

the state treasurer or an employee of the department shall not

 

compromise or reduce in any manner the taxes due to or claimed by

 

this state or unpaid accounts or amounts due to any department,

 

institution, or agency of state government. This subdivision does

 

not prevent a compromise of interest or penalties, or both.

 

     (f) Except as otherwise provided in this subdivision, an

 

employee, authorized representative, or former employee or

 

authorized representative of the department or anyone connected

 

with the department shall not divulge any facts or information

 

obtained in connection with the administration of a tax or

 

information or parameters that would enable a person to ascertain

 

the audit selection or processing criteria of the department for a

 

tax administered by the department. An employee or authorized

 

representative shall not willfully inspect any return or

 


information contained in a return unless it is appropriate for the

 

proper administration of a tax law administered under this act. A

 

person may disclose information described in this subdivision if

 

the disclosure is required for the proper administration of a tax

 

law administered under this act or the general property tax act,

 

1893 PA 206, MCL 211.1 to 211.157, pursuant to a judicial order

 

sought by an agency charged with the duty of enforcing or

 

investigating support obligations pursuant to an order of a court

 

in a domestic relations matter as that term is defined in section 2

 

of the friend of the court act, 1982 PA 294, MCL 552.502, or

 

pursuant to a judicial order sought by an agency of the federal,

 

state, or local government charged with the responsibility for the

 

administration or enforcement of criminal law for purposes of

 

investigating or prosecuting criminal matters or for federal or

 

state grand jury proceedings or a judicial order if the taxpayer's

 

liability for a tax administered under this act is to be

 

adjudicated by the court that issued the judicial order. A person

 

may disclose the adjusted gross receipts and the wagering tax paid

 

by a casino licensee licensed under the Michigan gaming control and

 

revenue act, the Initiated Law of 1996, MCL 432.201 to 432.226,

 

pursuant to section 18, sections 341, 342, and 386 of the

 

management and budget act, 1984 PA 431, MCL 18.1341, 18.1342, and

 

18.1386, or authorization by the executive director of the gaming

 

control board. However, the state treasurer or a person designated

 

by the state treasurer may divulge information set forth or

 

disclosed in a return or report or by an investigation or audit to

 

any department, institution, or agency of state government upon

 


receipt of a written request from a head of the department,

 

institution, or agency of state government if it is required for

 

the effective administration or enforcement of the laws of this

 

state, to a proper officer of the United States department of

 

treasury, and to a proper officer of another state reciprocating in

 

this privilege. The state treasurer may enter into reciprocal

 

agreements with other departments of state government, the United

 

States department of treasury, local governmental units within this

 

state, or taxing officials of other states for the enforcement,

 

collection, and exchange of data after ascertaining that any

 

information provided will be subject to confidentiality

 

restrictions substantially the same as the provisions of this act.

 

     (2) A person who violates subsection (1)(e), (1)(f), or (4) is

 

guilty of a felony, punishable by a fine of not more than

 

$5,000.00, or imprisonment for not more than 5 years, or both,

 

together with the costs of prosecution. In addition, if the offense

 

is committed by an employee of this state, the person shall be

 

dismissed from office or discharged from employment upon

 

conviction.

 

     (3) A person liable for any tax administered under this act

 

shall keep accurate and complete records necessary for the proper

 

determination of tax liability as required by law or rule of the

 

department.

 

     (4) A person who receives information under subsection (1)(f)

 

for the proper administration of the general property tax act, 1893

 

PA 206, MCL 211.1 to 211.157, shall not willfully disclose that

 

information for any purpose other than the administration of the

 


general property tax act, 1893 PA 206, MCL 211.1 to 211.157. A

 

person who violates this subsection is subject to the penalties

 

provided in subsection (2).

 

     (5) As used in subsection (1), "adjusted gross receipts" and

 

"wagering tax" mean those terms as described in the Michigan gaming

 

control and revenue act, the Initiated Law of 1996, MCL 432.201 to

 

432.226.