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.