HOUSE BILL No. 4072 January 31, 2001, Introduced by Reps. Bishop, Koetje, Gosselin, Birkholz, Pappageorge, Mead, George, Cassis and Raczkowski and referred to the Committee on Tax Policy. A bill to amend 1967 PA 281, entitled "Income tax act of 1967," by amending section 260 (MCL 206.260), as amended by 1996 PA 484. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 260. (1) A taxpayer may credit against the tax imposed 2 by this act for the tax year, an amount, subject to the applica- 3 ble limitations provided by this section, equal to 50% of the 4 aggregate amount of charitable contributions made by the taxpayer 5 during the tax year to any of the following: 6 (a) This state pursuant to the Faxon-McNamee art in public 7 places act,Act No. 105 of the Public Acts of 1980, being sec-8tions 18.71 to 18.81 of the Michigan Compiled Laws1980 PA 105, 9 MCL 18.71 TO 18.81, of an artwork created by the taxpayer, for 10 display in a public place. 00197'01 RJA 2 1 (b) The state art in public places fund created pursuant to 2Act No. 105 of the Public Acts of 1980THE FAXON-MCNAMEE ART IN 3 PUBLIC PLACES ACT, 1980 PA 105, MCL 18.71 TO 18.81. 4 (c) A municipality in this state of an artwork created by 5 the personal effort of the taxpayer for display in a public 6 place. 7 (d) Either a municipality of this state or a nonprofit cor- 8 poration affiliated with both a municipality and an art institute 9 located in the municipality, of money or artwork, whether or not 10 created by the personal effort of the taxpayer, if for the pur- 11 pose of benefiting an art institute located in that 12 municipality. 13 (e) A public library. 14 (f) A public broadcast station as defined by section 397 of 15 subpartdE of PART IV OF title III of the communications act 16 of 1934, 47 U.S.C. 397, that is not affiliated with an institu- 17 tion of higher education and that is located within this state. 18 (g) An institution of higher learning located within this 19 state. 20 (h) The Michigan colleges foundation. 21 (i) The state museum. 22 (j) The department of state for the purpose of preservation 23 of the state archives. 24 (k) A nonprofit corporation, fund, foundation, trust, or 25 association organized and operated exclusively for the benefit of 26 institutions of higher learning located within this state. A tax 27 credit for a contribution described in this subdivision is 00197'01 3 1 permitted only if the donee corporation, fund, foundation, trust, 2 or association is controlled or approved and reviewed by the gov- 3 erning board of the institution benefiting from the charitable 4 contribution. The nonprofit corporation, fund, foundation, 5 trust, or association shall provide copies of its annual indepen- 6 dently audited financial statements to the auditor general of 7 this state and chairpersons of the senate and house appropria- 8 tions committees. 9 (l) AN EDUCATIONAL FACILITY OR ORGANIZATION. A CONTRIBUTION 10 TO AN ENTITY LISTED IN SECTION 261 SHALL NOT BE USED TO CALCULATE 11 A CREDIT UNDER THIS SUBDIVISION. 12 (2) For a taxpayer other than a resident estate or trust, 13 the amount allowable as a credit under this section for a tax 14 year shall not exceed $100.00, or for a husband and wife filing a 15 joint return as provided in section 311, $200.00. 16 (3) For a resident estate or trust, the amount allowable as 17 a credit under this section for a tax year shall not exceed 10% 18 of the tax liability for the year as determined without regard to 19 this section or $5,000.00, whichever is less and shall not have 20 been deducted in arriving at federal taxable income. 21 (4) As used in this section: 22 (a) "Institution of higher learning" means only an educa- 23 tional institution located within this state that meets all of 24 the following requirements: 25 (i) It maintains a regular faculty and curriculum and has a 26 regularly enrolled body of students in attendance at the place 27 where its educational activities are carried on. 00197'01 4 1 (ii) It regularly offers education above the twelfth grade. 2 (iii) It awards associate, bachelors, masters, or doctoral 3 degrees or a combination of those degrees or higher education 4 credits acceptable for those degrees granted by other institu- 5 tions of higher learning. 6 (iv) It is recognized by the state board of education as an 7 institution of higher learning and appears as an institution of 8 higher learning in the annual publication of the department of 9 education entitled "The Directory of Institutions of Higher 10 Education". 11 (b) "Public library" means that term as defined in section 2 12 of the state aid to public libraries act,Act No. 89 of the13Public Acts of 1977, being section 397.552 of the Michigan14Compiled Laws1977 PA 89, MCL 397.552. 15 (c) "Contributions made by the taxpayer" means, but is not 16 limited to, the fair market value of artwork created by the per- 17 sonal effort of the taxpayer that is donated to and accepted as a 18 donation by a qualified organization. The fair market value of a 19 piece of artwork shall be determined at the time of the donation 20 by independent appraisal. 21 (d) "Artwork" means an original, visual creation of quality 22 executed in any size or shape, in any media, using any kind or 23 type of materials. 24 (E) "EDUCATIONAL FACILITY OR ORGANIZATION" MEANS EITHER OF 25 THE FOLLOWING: 26 (i) AN EDUCATIONAL FOUNDATION. 00197'01 5 1 (ii) A CONTINUING EDUCATION, A COMMUNITY EDUCATION, OR AN 2 ADULT EDUCATION PROGRAM OPERATED BY A SCHOOL DISTRICT OR A PUBLIC 3 SCHOOL ACADEMY. 4 (F) "EDUCATION FOUNDATION" MEANS AN ORGANIZATION THAT 5 APPLIES FOR CERTIFICATION ON OR BEFORE APRIL 1 OF THE TAX YEAR 6 FOR WHICH THE TAXPAYER IS CLAIMING THE CREDIT THAT ANNUALLY SUB- 7 MITS DOCUMENTATION TO THE DEPARTMENT THAT DEMONSTRATES CONTINUED 8 COMPLIANCE WITH THIS SUBDIVISION, AND THAT THE DEPARTMENT CERTI- 9 FIES FOR THAT TAX YEAR AS MEETING ALL OF THE FOLLOWING 10 REQUIREMENTS: 11 (i) QUALIFIES FOR EXEMPTION FROM FEDERAL INCOME TAXATION 12 UNDER SECTION 501(c)(3) OF THE INTERNAL REVENUE CODE. 13 (ii) MAINTAINS AN ONGOING PROGRAM TO ATTRACT NEW FUNDS BY 14 SEEKING GIFTS AND BEQUESTS FROM A WIDE RANGE OF POTENTIAL DONORS 15 IN THE COMMUNITY OR AREA SERVED. 16 (iii) ALL FUNDS, GIFTS, AND BEQUESTS ARE EXCLUSIVELY DEDI- 17 CATED TO A SCHOOL DISTRICT OR PUBLIC SCHOOL ACADEMY OR A FOUNDA- 18 TION DESCRIBED IN SECTION 509(a)(1) OR 509(a)(3) OF THE INTERNAL 19 REVENUE CODE THAT IS LOCATED IN THE COMMUNITY OR AREA SERVED AND 20 THAT IS LOCATED IN THIS STATE. 21 (iv) IS PUBLICLY SUPPORTED AS DEFINED BY THE REGULATIONS OF 22 THE UNITED STATES DEPARTMENT OF TREASURY, 23 26 C.F.R. 1.170A-9(e)(10). 24 (v) MEETS THE REQUIREMENTS FOR TREATMENT AS A SINGLE ENTITY 25 CONTAINED IN THE REGULATIONS OF THE UNITED STATES DEPARTMENT OF 26 TREASURY, 26 C.F.R. 1.170A-9(e)(11). 00197'01 6 1 (vi) IS INCORPORATED OR ESTABLISHED AS A TRUST AT LEAST 6 2 MONTHS BEFORE THE BEGINNING OF THE TAX YEAR FOR WHICH THE CREDIT 3 IS CLAIMED. 4 (vii) HAS AN INDEPENDENT GOVERNING BODY REPRESENTING THE 5 GENERAL PUBLIC'S INTEREST AND THAT IS NOT APPOINTED BY A SINGLE 6 OUTSIDE ENTITY. 7 (viii) IS SUBJECT TO A PROGRAM REVIEW EACH YEAR AND AN INDE- 8 PENDENT FINANCIAL AUDIT EVERY 3 YEARS AND PROVIDES COPIES OF THE 9 REVIEWS AND AUDITS TO THE DEPARTMENT NOT MORE THAN 3 MONTHS AFTER 10 THE REVIEW OR AUDIT IS COMPLETED. 11 (G) "SCHOOL DISTRICT" MEANS A SCHOOL DISTRICT, LOCAL ACT 12 SCHOOL DISTRICT, OR INTERMEDIATE SCHOOL DISTRICT AS THOSE TERMS 13 ARE DEFINED IN THE REVISED SCHOOL CODE, 1976 PA 451, MCL 380.1 TO 14 380.1852. 15 (5) The sum of the credits allowed by section 257 and this 16 section shall not exceed the tax liability of the taxpayer. 00197'01 Final page. 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