House Introduced Bill 5707

HOUSE BILL No. 5707


     February 21, 2002, Introduced by Rep. Patterson and referred to the Committee on House Oversight and Operations.


        A bill to amend 1899 PA 188, entitled

   "Michigan estate tax act,"

   by amending sections 1a, 6, 11, 14, and 17 (MCL 205.201a,

   205.206, 205.211, 205.214, and 205.217), section 6 as amended by

   1993 PA 54.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1
             Sec. 1a.  (1) The terms "death tax" and "death taxes", as

 2
        used in the  five  5 following subsections,  shall  include

 3
        inheritance, succession, transfer and estate taxes and any taxes

 4
        levied against the estate of a decedent upon the occasion of his

 5
        OR HER death.

 6
             (2)  At any time before  BEFORE the expiration of 18 months

 7
        after the qualification in any probate court in this state of any

 8
        executor of the will or administrator of the estate of any

 9
        non-resident decedent,  such  THE executor or administrator shall


   02227'01                                                 JLB                                   2

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        file with  such  THE court proof that all death taxes, together

 2
        with interest or penalties  thereon  ON THOSE TAXES, which are

 3
        due to the state of domicile of  such  THE decedent, or to any

 4
        political subdivision,  thereof,  have been paid or secured, or

 5
        that no  such  taxes, interest, or penalties are due, as the case

 6
        may be, unless it appears that letters testamentary or of admin-

 7
        istration have been issued on the estate of  such  THE decedent

 8
        in the state of his OR HER domicile, in  the 4 following  subsec-

 9
        tions (3), (4), (5), OR (6), called the domiciliary state.

10
             (3) The proof required by subsection (2) may be in the form

11
        of a certificate issued by the official or body charged with the

12
        administration of the death tax laws of the domiciliary state.

13
        If  such  THAT proof has not been filed within the time limited

14
        in subsection (2), and if within  such  THAT time it does not

15
        appear that letters testamentary or of administration have been

16
        issued in the domiciliary state, the register of probate shall

17
         forthwith  IMMEDIATELY upon the expiration of  such  THE time

18
        notify by mail the official or body of the domiciliary state

19
        charged with the administration of the death tax laws  thereof

20
        with respect to  such  THAT estate, and shall state in  such  THE

21
        notice so far as is known to him  (a)  OR HER the name, date of

22
        death, and last domicile of  such  THE decedent,  (b)  the name

23
        and address of each executor or administrator,  (c)  a summary of

24
        the values of the real estate, tangible personalty, and intangi-

25
        ble personalty, wherever situated, belonging to  such  THE dece-

26
        dent at the time of his OR HER death, and  (d)  the fact that

27
         such  THE executor or administrator has not filed  theretofore



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        the proof required in subsection (2).   Such  THE register shall

 2
        attach to  such  THE notice a plain copy of the will and codicils

 3
        of  such THE decedent, if he OR SHE died testate, or, if he OR

 4
        SHE died intestate, a list of his OR HER heirs and next of kin,

 5
        so far as is known to such register.  Within 60 days after the

 6
        mailing of  such  THE notice the official or body charged with

 7
        the administration of the death tax laws of the domiciliary state

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        may file with  such  THE probate court in this state a petition

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        for an accounting in  such  THE estate, and  such  THE official

10
        or body of the domiciliary state shall, for the purposes of this

11
        section, be a party interested for the purpose of petitioning

12
         such  THE probate court for  such  THE accounting.  If 
    such

13
        THE petition  be  IS filed within  said period of  60 days,

14
         such  THE probate court shall  decree such  ORDER AN accounting.

15
         , and upon such  WHEN THE accounting  being  IS filed and

16
        approved, THE PROBATE COURT shall decree either the payment of

17
        any  such  tax found to be due to the domiciliary state or subdi-

18
        vision  thereof  OF THAT STATE or the remission to a fiduciary,

19
        appointed or to be appointed by the probate court  ,  or other

20
        court charged with the administration of estates of decedents  ,

21
        of the domiciliary state, of the balance of the intangible per-

22
        sonalty after the payment of creditors and expenses of adminis-

23
        tration in this state.

24
             (4) No final account of an executor or administrator of a

25
        non-resident decedent shall be allowed unless  either (a) proof

26
        1 OF THE FOLLOWING APPLIES:





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 1
             (A) PROOF has been filed as required by subsection (2).  ,

 2
        or (b) notice

 3
             (B) NOTICE under subsection (3) has been given to the offi-

 4
        cial or body charged with the administration of the death tax

 5
        laws of the domiciliary state, and  such  EITHER OF THE FOLLOWING

 6
        APPLIES:

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             (i) THAT official or body has not petitioned for an account-

 8
        ing under  said  subsection (3) within 60 days after the mailing

 9
        of  such  THE notice.  , or (c) an

10
             (ii) AN accounting has been had under  said  subsection (3),

11
        a decree has been made upon  such  THE accounting, and it appears

12
        that the executor or administrator has paid  such  THE sums and

13
        remitted such securities, if any, as he was required to pay or

14
        remit by such decree.  , or (d) it

15
             (C) IT appears that letters testamentary or of administra-

16
        tion have been issued by the domiciliary state and that no notice

17
        has been given under  said  subsection (3).

18
             (5) Subsections (1) to (4), inclusive, shall apply to the

19
        estate of a non-resident decedent, only in case the laws of the

20
        domiciliary state contain a provision, of any nature or however

21
        expressed, whereby this state is given reasonable assurance, as

22
        finally determined by the  auditor general  STATE TREASURER, of

23
        the collection of its death taxes, interest and penalties from

24
        the estates of decedents dying domiciled in this state, when

25
         such  THE estates are administered in whole or in part by a pro-

26
        bate court, or other court charged with the administration of

27
        estates of decedents, in such other state.



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             (6)  The provisions of subsections (1) to (5), inclusive,

 2
        SUBSECTIONS (1) TO (5) shall be liberally construed in order to

 3
        ensure that the domiciliary state of any non-resident decedent

 4
        whose estate is administered in this state shall receive any

 5
        death taxes, together with interest and penalties thereon, due to

 6
        it from the estate of  such  THE decedent.

 7
             Sec. 6.  If any debt shall be allowed against the estate of

 8
        a decedent after the payment of any legacy or distributive share

 9
         thereof,  from which any  such  tax has been deducted or upon

10
        which it has been paid by the person entitled to  such  THE

11
        legacy or distributive share, and  such  THAT person is required

12
        to refund the amount of  such  THE debts,  or any part thereof,

13
        an equitable proportion of the tax shall, upon the order of the

14
        court, be paid to him or her by the executor, administrator,

15
        trustee or other person, if the tax has not been paid to the

16
        state of Michigan.  When any amount of said tax shall have been

17
        paid erroneously to the state of Michigan by reason of the allow-

18
        ance of debts or otherwise, it shall be lawful for the  auditor

19
        general  STATE TREASURER, upon satisfactory proof by the order or

20
        certificate of the proper court of the allowance of  such  THE

21
        debts or of the reversal, correction or alteration, in accordance

22
        with law, of the order fixing  such  THE tax, to draw his or her

23
        warrant upon the state treasury for  such  THE erroneous payment,

24
        to be refunded to the executor, administrator, trustee, person or

25
        persons entitled to receive it, and charge the  same  WARRANT to

26
        the fund which receives credit from the payment of taxes under

27
        the provisions of this act.  :  Provided, however, That all



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 1
        HOWEVER, applications for  such  THE refunding of erroneous tax

 2
        shall be made within 6 months from the allowance of  such  THE

 3
        debts or the reversal, correction or alteration of  said  THE

 4
        order.

 5
             Sec. 11.  The judge of probate, upon the application of any

 6
        interested party, including the  auditor general  STATE TREASURER

 7
        and county treasurers, or upon his OR HER own motion, shall, as

 8
        often as and whenever occasion may require, appoint a competent

 9
        person as appraiser to fix the clear market value at the time of

10
        the transfer  thereof  of property which shall be subject to the

11
        payment of any tax imposed by this act.  , a  A description of

12
         which  THE property and the names and residences of the persons

13
        to whom it passes shall be given by the judge of probate to

14
         such  THE appraiser.  If the property, upon the transfer of

15
        which the tax is imposed,  shall be  IS an estate, income or

16
        interest for a term of years or for life, or determinable upon

17
        any future or contingent estate, or  shall be  IS a remainder or

18
        reversion or other expectancy, real or personal, the entire prop-

19
        erty or fund by which  such  THE estate, income or interest is

20
        supported, or of which it is a part, shall be appraised immedi-

21
        ately after  such  THE transfer, or as soon thereafter as may be

22
        practicable, at the clear market value  thereof  as of that date.

23
         :  Provided, however, That when such  IF THE estate, income or

24
        interest  shall be  IS of such a nature that its clear market

25
        value cannot be ascertained at  such  THAT time, it shall be

26
        appraised in like manner at the time when  such  THE value first

27
        became ascertainable.  The value of every future or contingent or



   02227'01                                   7

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        limited estate, income, interest or annuity, dependent upon any

 2
        life or lives in being, shall be determined by the rule, method

 3
        or standard of mortality and value employed by the commissioner

 4
        of THE OFFICE OF insurance AND FINANCIAL SERVICES in ascertaining

 5
        the value of policies of life insurance companies, except that

 6
        the rate of interest for computing the present value of all

 7
        future and contingent interests or estates shall be  5 per

 8
        centum  5% per annum.  The commissioner of THE OFFICE OF insur-

 9
        ance AND FINANCIAL SERVICES shall, upon request of the  auditor

10
        general  STATE TREASURER, prepare  such  THE tables of values,

11
        expectancies and other matters as may be necessary for use in

12
        computing, under the provisions of this act, the value of life

13
        estates, annuities, reversions and remainders, which shall be

14
        printed and furnished by the auditor general to the several

15
        judges of probate upon request.  :  Provided further, That the

16
        THE clear market value of the transfer of a money legacy, pres-

17
        ently taxable, shall for the purposes of this act be taken to be

18
        the face value of the money at the date of death of decedent.

19
             Sec. 14.  If the  auditor general  STATE TREASURER or the

20
        treasurer of any county shall have reason to believe that any tax

21
        is due and unpaid under this act, after the refusal or neglect of

22
        the persons liable therefor to pay the same, he OR SHE shall

23
        notify the attorney general in writing of  such  THAT failure or

24
        neglect, and  such  THE attorney general may apply, or cause the

25
        prosecuting attorney of the county to apply, in behalf of the

26
        state, to the probate court for  a citation citing  AN ORDER

27
        REQUIRING the persons liable to pay  such  THE tax to appear



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        before the court on a day specified, not more than 3 months after

 2
        the date of  such citation  THE ORDER, and show cause why the tax

 3
        should not be paid.  The judge of probate upon such application,

 4
        and whenever it shall appear to him OR HER that any such tax

 5
        accruing under this act has not been paid as required by law,

 6
        shall issue  such  A citation, and the service of  such  A

 7
        citation, and the time, manner, and proof  thereof  OF THE

 8
        CITATION and the hearing and determination  thereon  OF THE

 9
        CITATION, and the enforcement of the determination or order made

10
        by the judge of probate shall conform to the practice of the pro-

11
        bate court in like cases made and provided for the service of

12
        citations out of the probate court, and the hearing and determi-

13
        nation thereon and its enforcement, so far as the same may be

14
        applicable.  In all cases where an estate has been declared

15
        closed without fixing or payment of the tax upon the transfers

16
        therein, and the attorney general  shall believe such  BELIEVES

17
        THAT THE transfers  to be  ARE subject to a tax and THE real

18
        estate in  said  THE estate  to be  IS subject to  the
     A lien

19
         thereof  and  shall contemplate  ANTICIPATES the institution of

20
        proceedings for the fixing and enforcing, or the enforcing of the

21
         same  LIEN when it has been fixed, he OR SHE may  in his

22
        discretion  file with the register of deeds of the county a

23
        notice setting forth  such  THE fact together with a description

24
        of the real estate claimed to be subject to the  same  LIEN which

25
        shall operate with the same force and effect as a lis pendens

26
        under existing statutes.  :  Provided, That  HOWEVER, the failure

27
        to file such notice shall not in any manner prejudice the rights



   02227'01                                   9

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        of the state.  The judge of probate or the probate clerk or

 2
        register shall, upon the request of the attorney general, prose-

 3
        cuting attorney, or treasurer of the county, furnish 1 or more

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        transcripts of such decree which shall be docketed and filed by

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        the county clerk of any county of the state without fees, in the

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        same manner and with the same effect as provided by law for

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        filing and docketing transcripts, judgments, and decrees of cir-

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        cuit courts in this state.  As a cumulative remedy for the col-

 9
        lection of the tax, the state may proceed by an action of assump-

10
        sit in any court of competent jurisdiction.  Whenever the probate

11
        judge  shall issue  ISSUES a citation and  take  UNDERTAKES the

12
        proceedings specified in this section, he OR SHE shall certify

13
         such  THAT fact to the county treasurer, together with an item-

14
        ized bill of all expenses incurred for the services of  such  THE

15
        citation, and other lawful disbursements not otherwise paid.  ,

16
        and thereupon  UPON RECEIPT OF THE BILL, the county treasurer

17
        shall pay the  same  BILL from the general or contingent fund of

18
        the county.  In all proceedings to which any county treasurer, or

19
        the  auditor general  STATE TREASURER, is cited to appear under

20
        sections 11 and 12 of this act and all proceedings arising or

21
        instituted  hereunder  UNDER THIS SECTION, the attorney general

22
        shall represent the interests of the state,  therein,  the com-

23
        pensation and expenses of necessary assistants and the expenses

24
        of the  said  attorney general to be paid after approval by the

25
        attorney general on the warrant of the  auditor general  STATE

26
        TREASURER out of the general fund in the state treasury.





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             Sec. 17.  The  auditor general  STATE TREASURER shall

 2
        furnish to each judge of probate a book, which shall be a public

 3
        record, in which  he  THE JUDGE OF PROBATE shall enter a formal

 4
        order containing the name of every decedent upon whose estate

 5
        letters of administration or letters testamentary or ancillary

 6
        letters have issued, the date of death, and place of residence at

 7
        the time of death of  such  THE decedent, the names, places of

 8
        residence and relationship to  him  THE DECEDENT of his OR HER

 9
        heirs at law, in case  he  THE DECEDENT died intestate or left

10
        estate not disposed of by will; the names, places of residence,

11
        and relationship to  him  THE DECEDENT of the legatees and devi-

12
        sees in the will of the decedent, in case  he  THE DECEDENT died

13
        testate, the ages of all life tenants and beneficiaries under

14
        life estates, the clear market value of  his  THE DECEDENT'S real

15
        and personal property, the clear market value of the property,

16
        real and personal, passing to each heir, legatee and devisee, and

17
        the clear market value of annuities, life estates, terms of

18
        years, and other property of  such  THE decedent, or given by

19
         him  THE DECEDENT in his OR HER will and otherwise, as fixed and

20
        determined by the judge of probate, and the amount of tax

21
        assessed thereon, and the amount of tax assessed on the share of

22
        each heir, legatee and devisee, when from the records of the

23
        court or the testimony given there appears to be property in such

24
        estate liable to tax under this act.  :  Provided, The  HOWEVER,

25
        A description of  no  real estate need NOT be given  except such

26
        as  UNLESS THE REAL ESTATE is taxable under this act,  and  IN

27
        WHICH CASE a sufficiently definite description shall be given to



   02227'01                                  11

 1
        fully identify  such  THE taxable real estate and the persons to

 2
        whom the several parcels are devised.   He  THE STATE TREASURER

 3
        shall also enter in  said  THE book the name, date of death, and

 4
        place of residence at time of death of every decedent, grantor,

 5
        vendor or donor who has made a transfer of property in contempla-

 6
        tion of death or intended to take effect in possession or enjoy-

 7
        ment at or after his OR HER death, subject to tax under this act;

 8
        the name and residence of the grantee, vendee or donee and his OR

 9
        HER relationship to the grantor, vendor or donor, the clear

10
        market value as determined by the judge of probate of the prop-

11
        erty so transferred by him OR HER and the tax determined by the

12
        court payable thereon.  These entries shall be made from data

13
        contained in the papers filed in the probate court and testimony

14
        taken in any proceedings relating to the estate of the decedent.

15
        The judge of probate shall also enter in  such  THE book the

16
        amount of the real and personal property of  such  THE decedent

17
        as shown by the inventory thereof when made and filed in his OR

18
        HER office.   In case  IF the judge of probate  shall determine

19
        DETERMINES the amount of tax to be paid upon any legacies or

20
        devises or upon the real estate of a decedent or upon the estate

21
        of the decedent as a whole before the final determination of the

22
        tax by him OR HER, only such entries need be made in  such  THE

23
        book in that particular case as refer to  such  THE partial

24
        determination, and it shall be distinctly stated in  said  THE

25
        book that it is but a partial determination by the judge of pro-

26
        bate of the tax due from the estate.  Whenever the determination

27
        of the tax in such estate by the judge of probate is general,



   02227'01                                  12

 1
        partial or final, the deductions made by the judge of probate

 2
        from the full value of the estate shall be particularly speci-

 3
        fied, so that the several reasons for the deductions made  shall

 4
        clearly appear upon the record.  ; such  THE record  so  required

 5
        to be furnished by the  auditor general  STATE TREASURER shall be

 6
        in the following form, and shall be of such size and so arranged

 7
        as he  shall determine  OR SHE DETERMINES will best meet the

 8
        requirements of this act:

 9
             Abstract of Taxable Inheritances.  Vol.  No.

10
        ...............  Page No.  ...............

11
        State of Michigan.

12
        The Probate Court for the County of ......................

13
             At a session of said court held at

14
        ............................., in said county the

15
        ....................  day of ...................., A.D.

16
         19 ....

17
             Present, The Honorable ............................, Probate

18
        Judge.

19
             In the matter of the inheritance tax upon transfers in the

20
        estate of ...................., deceased.

21
             In this matter it being represented to me and appearing that

22
        the said deceased was, at the time of his OR HER death on the

23
        ....................  day of ..................., a resident of

24
        ...........................  and possessed property the transfer

25
        of which or some interest or estate therein is taxable under the

26
         inheritance tax law (Act 188 of the Public Acts of 1899 and

27
        ...............  of 1903)  MICHIGAN ESTATE TAX ACT, 1899 PA 188,



   02227'01                                  13

 1
        MCL 205.201 TO 205.256; that ...............  of

 2
        ...................  was duly and regularly appointed

 3
        ...............  of the said estate and ........................,

 4
        and that as appears from the inventory on file in this court, the

 5
        amount of property belonging to said estate is stated to be as

 6
        follows:

 7
        Personal property, $...............; real property,

 8
        $...............

 9
             It further appears and I hereby find that the debts of said

10
        deceased owing at the time of OR HER death (exclusive of interest

11
        accruing thereafter) amount to $...............; that the funeral

12
        expenses of said deceased amount to $...............; and that

13
        the expenses of administration of the estate of said decedent

14
        (exclusive of all items of disbursement for repairs to buildings

15
        or other property belonging to, or taxes accruing after death,

16
        upon the estate of said deceased, all allowances for the support

17
        of widow and children of said deceased, expenses incurred in con-

18
        testing the will of said deceased, and other items of disburse-

19
        ment for the benefit of the beneficiaries of said estate, not

20
        strictly expenses of administration) amount to the sum of

21
        $..................; the total debts and expenses of administra-

22
        tion being $.........

23
             After due and careful investigation, examination and consid-

24
        eration, I find and determine that the clear market value of all

25
        of said decedent's personal property and real estate, at the date

26
        of his OR HER death, was as follows:  Personal property,

27
        $.......................; real property, $...................,



   02227'01                                  14

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        and that after deduction therefrom of the total debts and

 2
        expenses of administration (debts secured upon realty being

 3
        deducted from the value of the real estate, and debts unsecured

 4
        and secured on personalty being deducted from the value of the

 5
        personalty), there remains subject to taxation under the provi-

 6
        sions of said act before deducting statutory exemptions, trans-

 7
        fers of personal property to the amount of $..........; and

 8
        transfers of real property to the amount of $..........; and that

 9
        of said transfers certain interests hereinafter set forth in

10
        detail in the schedule hereto are not presently taxable by reason

11
        of the following contingency, rendering it impossible to deter-

12
        mine presently the value of the interests passing and the amount

13
        of the tax thereon, namely ........................

14
             And I hereby find and determine that the tax upon the pres-

15
        ently taxable transfers in said estate amounts to the sum of

16
        $..........  and find that the several names, residences, rela-

17
        tionships and ages, where interest consists of life estates or

18
        annuities, of the several beneficiaries, together with the char-

19
        acter and amount of the several interests or estates passing

20
        thereto, the rate of tax to which each is subject, and the por-

21
        tion of the tax fixed upon, apportioned to, and required to be

22
        borne by each of the several taxable transfers, is as set forth

23
        in detail in the following schedule:

24
             (The schedule shall contain the following headings for the

25
        several columns and space for sufficient entries, remarks, etc.)

26
        





   02227'01                                  15

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        _________________________________________________________________
 2
              A            B            C              D           E
 3
           Name of     Residence   Relationship   Age of Life   Rate of
 4
        Heir at Law,                               Tenant or      Tax
 5
         Legatee or                                Annuitant    .......%
 6
         Devisee to
 7
         whom estate
 8
           passes

 9
        _________________________________________________________________
10
              F            G            H              I           J
11
          Value of     Value of      Value of      Amount of    Value of
12
          Legacy or    Personal     Legacy or       Tax on        Real
13
          Personal      Estate       Personal      Personal      Estate
14
           Estate       Exempt        Estate        Estate      Passing
15
           Passing                   Taxable

16
        _________________________________________________________________
17
              K            L            M              N           O
18
          Value of     Value of     Amount of      Value of     Value of
19
            Real         Real         Tax on      Annuities,   Annuities,
20
           Estate       Estate         Real        Life Es-     Life Es-
21
           Exempt       Taxable       Estate      tates, etc.    tates,
22
                                                    Passing       etc.
23
                                                                 Exempt

24
        _________________________________________________________________
25
              P            Q            R
26
          Value of     Amount of      Total
27
         Annuities,     Tax on        Amount
28
          Life Es-    Annuities,      of Tax
29
        tates, etc.,   Life Es-
30
           Taxable    tates, etc.

31
        _________________________________________________________________

32
             Remarks:  Including descriptions of real estate taxed and
33
        any explanations necessary to a complete understanding of the
34
        foregoing entries.
35
        
36
                                           ..............................

37
                                                Judge of Probate.

38
             The department of  revenue  TREASURY may prescribe and fur-

39
        nish to the judge of probate, in lieu of the book and the form

40
        prescribed in this section, a form or forms containing such data

41
        as is required for proper determination of the tax.





   02227'01          Final page.                            JLB