SENATE BILL NO. 711


  September 30, 1997, Introduced by Senators BENNETT and STEIL
            and referred to the Committee on Finance.
     


        A bill to amend 1964 PA 284, entitled

   "City income tax act,"

   by amending section 31 of chapter 2 (MCL 141.631), as amended by

   1988 PA 120, and by adding section 67 to chapter 2.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1                                CHAPTER 2

 2         Sec. 31.  (1) An individual taxpayer in computing his or her

 3    taxable income is allowed deductions for the  full 
             SAME NUMBER

 4    OF personal and dependency exemptions authorized by the 
             federal 

 5    internal revenue code or, EXCEPT AS PROVIDED IN SUBSECTION (2)

 6    AND on the passage of a further ordinance, a deduction of a mini-

 7    mum of $600.00 for each personal and dependency exemption under

 8    the rules for determining exemptions and dependents  as
              provided

 9    in the  federal  internal revenue code.  The
             taxpayer may claim

10    his or her spouse and dependents as exemptions, but if the


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 1    taxpayer and the spouse are both subject to the tax imposed by

 2    this ordinance, the number of exemptions claimed by each of them

 3    when added together shall not exceed the total number of exemp-

 4    tions allowed under this ordinance.

 5         (2) FOR TAX YEARS AFTER THE 1996 TAX YEAR, THE PERSONAL AND

 6    DEPENDENCY EXEMPTION AMOUNT SHALL BE THE SAME AS THE PERSONAL AND

 7    DEPENDENCY EXEMPTION AMOUNT DETERMINED UNDER SECTION 30(2) OF THE

 8    INCOME TAX ACT OF 1967, 1967 PA 281, MCL 206.30.

 9         (3)  (2)  For tax years beginning after 1986,
             an additional

10    exemption is allowed under subsection (1), upon passage of a fur-

11    ther ordinance, for a taxpayer who is 65 years of age or older,

12    or who is blind as defined in section 504 of the income tax act

13    of 1967,  Act No. 281 of the Public Acts of 1967, being
             section

14     206.504 of the Michigan Compiled Laws  1967 PA 281,
                       MCL 206.504,

15    or if the taxpayer is both 65 years of age or older and blind, 2

16    additional exemptions are allowed under subsection (1).  For tax

17    years beginning after 1987, upon passage of a further ordinance,

18    an additional exemption is allowed under subsection (1) for a

19    taxpayer who is a paraplegic, quadriplegic, hemiplegic, or

20    totally and permanently disabled person as defined in section 216

21    of title II of the social security act, 42 U.S.C. 416, or a tax-

22    payer who is a deaf person as defined in section 2 of the deaf

23    persons' interpreters act,  Act No. 204 of the Public Acts
             of

24     1982, being section 393.502 of the Michigan Compiled Laws
                        1982

25    PA 204, MCL 393.502.  If the taxpayer qualifies for an additional

26    exemption under more than 1 of the  following 
             PRECEDING





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 1    CATEGORIES, an additional exemption is allowed for each  of
             the

 2     following for  CATEGORY UNDER which the taxpayer
                       qualifies.  : 

 3          (a) A taxpayer who is a paraplegic, quadriplegic, or
             hemi-

 4     plegic, or who is a totally or permanently disabled person
                       as

 5     defined in section 216 of title II of the social security
                       act, 42

 6     U.S.C. 416.

 7          (b) A taxpayer who is blind as defined in section 504
                       of the

 8     income tax act of 1967, Act No. 281 of the Public Acts of
                       1967,

 9     being section 206.504 of the Michigan Compiled Laws.

10          (c) A taxpayer who is a deaf person as defined in
                       section 2

11     of the deaf persons' interpreters act, Act No. 204 of the
                       Public

12     Acts of 1982, being section 393.502 of the Michigan Compiled

13     Laws.

14          (d) A taxpayer who is 65 years of age or older.
                       

15         (4)  (3)  For tax years beginning after 1986
             and upon pas-

16    sage of a further ordinance, a city, as determined by its govern-

17    ing body, may provide for either an exemption from the tax levied

18    under this act if  that  A person's adjusted gross
             income for

19    that tax year is less than a certain amount  to be 
             as specified

20    by the ordinance, or an exemption in an amount to be specified by

21    the ordinance, for a person with respect to whom a deduction

22    under section 151 of the internal revenue code is allowable to

23    another federal taxpayer during the tax year and WHO, FOR THAT

24    REASON, is  therefore  not considered to have a
             federal personal

25    exemption under subsection (1).

26         SEC. 67.  (1) FOR THE 1997 TAX YEAR AND EACH TAX YEAR AFTER

27    THE 1997 TAX YEAR AND SUBJECT TO THE LIMITATIONS IN



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 1    SUBSECTIONS (2) TO (4), A TAXPAYER MAY CREDIT AGAINST THE TAX

 2    IMPOSED BY THIS ACT 50% OF THE AMOUNT THE TAXPAYER CONTRIBUTES

 3    DURING THE TAX YEAR TO AN ENDOWMENT FUND OF A COMMUNITY

 4    FOUNDATION.

 5         (2) FOR A TAXPAYER WHO IS AN INDIVIDUAL, THE CREDIT ALLOWED

 6    BY THIS SECTION SHALL NOT EXCEED $100.00, OR $200.00 FOR A HUS-

 7    BAND AND WIFE FILING A JOINT RETURN.  FOR A TAXPAYER OTHER THAN

 8    AN INDIVIDUAL, THE CREDIT ALLOWED BY THIS SECTION SHALL NOT

 9    EXCEED 10% OF THE TAXPAYER'S TAX LIABILITY FOR THE TAX YEAR

10    BEFORE CLAIMING ANY CREDITS ALLOWED BY THIS ACT OR $5,000.00,

11    WHICHEVER IS LESS.

12         (3) THE CREDIT ALLOWED UNDER THIS SECTION IS NONREFUNDABLE

13    SO THAT A TAXPAYER SHALL NOT CLAIM UNDER THIS SECTION A TOTAL

14    CREDIT AMOUNT THAT REDUCES THE TAXPAYER'S TAX LIABILITY TO LESS

15    THAN ZERO.

16         (4) AS USED IN THIS SECTION, "COMMUNITY FOUNDATION" MEANS AN

17    ORGANIZATION THAT APPLIES FOR CERTIFICATION ON OR BEFORE APRIL 1

18    OF THE TAX YEAR FOR WHICH THE TAXPAYER IS CLAIMING THE CREDIT AND

19    THAT THE DEPARTMENT OF TREASURY CERTIFIES FOR THAT TAX YEAR AS

20    MEETING ALL OF THE FOLLOWING REQUIREMENTS:

21         (A) QUALIFIES FOR EXEMPTION FROM FEDERAL INCOME TAXATION

22    UNDER SECTION 501(c)(3) OF THE INTERNAL REVENUE CODE.

23         (B) SUPPORTS A BROAD RANGE OF CHARITABLE ACTIVITIES WITHIN

24    THE SPECIFIC GEOGRAPHIC AREA OF THIS STATE THAT IT SERVES, SUCH

25    AS A MUNICIPALITY OR COUNTY.







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 1         (C) MAINTAINS AN ONGOING PROGRAM TO ATTRACT NEW ENDOWMENT

 2    FUNDS BY SEEKING GIFTS AND BEQUESTS FROM A WIDE RANGE OF

 3    POTENTIAL DONORS IN THE COMMUNITY OR AREA SERVED.

 4         (D) IS PUBLICLY SUPPORTED AS DEFINED BY THE REGULATIONS OF

 5    THE UNITED STATES DEPARTMENT OF TREASURY, 26

 6    C.F.R. 1.170a-9(e)(10).

 7         (E) IS NOT A SUPPORTING ORGANIZATION AS DEFINED UNDER

 8    SECTION 509(a)(3) OF THE INTERNAL REVENUE CODE AND THE REGULA-

 9    TIONS OF THE UNITED STATES DEPARTMENT OF TREASURY, 26

10    C.F.R. 1.509(a)-4 AND 1.509(a)-5.

11         (F) MEETS THE REQUIREMENTS FOR TREATMENT AS A SINGLE ENTITY

12    CONTAINED IN THE REGULATIONS OF THE UNITED STATES DEPARTMENT OF

13    TREASURY, 26 C.F.R. 1.170a-9(e)(11).

14         (G) IS INCORPORATED OR ESTABLISHED AS A TRUST BEFORE

15    SEPTEMBER 1 OF THE YEAR IMMEDIATELY PRECEDING THE TAX YEAR FOR

16    WHICH THE CREDIT IS CLAIMED.

























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