SPECIAL OLYMPICS TAX CHECK-OFF                                                S.B. 381 & H.B. 4632:

                                                                                              ANALYSIS AS ENACTED

 

 

 

 

 

 

 

 

 

 

 

 

Senate Bill 381 (as enacted)                                                   PUBLIC ACT 155 of 2012

House Bill 4632 (as enacted)                                                   PUBLIC ACT 154 of 2012

Sponsor:  Senator Rick Jones (S.B. 381)

               Representative Kevin Cotter (H.B. 4632)

Senate Committee:  Finance

House Committee:  Tax Policy

 

Date Completed:  6-26-12

 

RATIONALE

 

Founded in 1968, Special Olympics provides year-round sports training and athletic competition for children and adults with intellectual disabilities.  Special Olympics International is an umbrella organization with regional offices around the globe.  The North American Region includes Canada, the Caribbean, and the United States, where the individual states have Special Olympics programs.  In this State, Special Olympics Michigan (SOMI) offers 23 sports, in which approximately 20,680 athletes participate.  The programs are provided at no cost to the athletes or their families, and SOMI's budget is funded almost entirely by corporate donations, individual gifts, and special events, according to the organization's website.  In order to generate additional revenue for Special Olympics Michigan, it was suggested that people should have the opportunity to donate through a check-off on the income tax return.

 

CONTENT

 

Senate Bill 381 enacted the "Special Olympics Michigan Fund Act" to create the Fund, require amounts from an income tax check-off to be credited to it, and provide for distribution of money in the Fund to Special Olympics Michigan.  House Bill 4632 amended the Income Tax Act to create a tax check-off for the Fund, beginning with the 2012 tax year.

 

The bills were tie-barred and took effect on June 5, 2012.

 

Senate Bill 381

 

The bill created the Special Olympics Michigan Fund in the Department of Treasury to provide funds for donation to Special Olympics Michigan.

 

The State Treasurer must credit to the Fund all amounts appropriated for this purpose under Section 435 of the Income Tax Act (which provides for tax check-offs), and money from any other source for deposit into the Fund.  The Fund must include these amounts and any interest and earnings from the saving and investment of the tax check-off proceeds.

 

The money, interest, and earnings of the Fund may be spent solely for donation to Special Olympics Michigan. 

 

The money in the Fund that is available for distribution must be appropriated each year.  Money granted or received as a gift to the Fund will be available for distribution upon appropriation.  Money in the Fund at the close of the fiscal year will remain in the Fund.

 

The State Treasurer must direct the investment of the Fund, and the Department will be the administrator of the Fund for auditing purposes.

 

House Bill 4632

 

Section 435 of the Income Tax Act allows an individual to designate on his or her annual tax return that contributions of $5, $10, or more of his or her State income tax refund (or additional tax liability) be credited to any of the funds specified in the Act.  The Department of Treasury must create a schedule of the check-offs to be included with an annual income tax return.  New check-offs must be incorporated as soon as practical on the schedule, which may not include more than 10 separate check-offs in any single tax year.  The Department must cease to include a check-off if it fails to raise $50,000 in any tax year for two consecutive tax years.

 

Check-offs on the schedule include the Animal Welfare Fund, the Children of Veterans Tuition Grant Program, the Children's Trust Fund, the Girl Scouts of Michigan Fund, the Military Family Relief Fund, and the United Way Fund.

 

Under the bill, the schedule also must include the Special Olympics Michigan Fund, for the 2012 tax year and each subsequent tax year.

 

MCL 206.941-206.949 (S.B. 381)

       206.435 (H.B. 4632)

 

ARGUMENTS

 

(Please note:  The arguments contained in this analysis originate from sources outside the Senate Fiscal Agency.  The Senate Fiscal Agency neither supports nor opposes legislation.)

 

Supporting Argument

Special Olympics is the world's largest movement dedicated to promoting respect, acceptance, inclusion, and dignity for children and adults with intellectual disabilities, through sports, competition, and socialization.  Competitions take place at local, regional, state, national, and world levels.  In Michigan, the program offers eight State-level competitions, district basketball tournaments, and more than 400 competitions statewide each year.  In addition to the nearly 20,700 athletes who participate, thousands of volunteers contribute their time, energy, and expertise by serving as coaches, sports officials, committee members, and on-site volunteers at competitions.  The organization not only helps the  athletes to develop physical skills,

 

 

but also teaches them to lead healthy lifestyles.

 

Special Olympics Michigan is a 501(c)(3) nonprofit organization supported almost entirely by private donations, without State funding and without charge to the participants.  The bills will give Michigan taxpayers an easy and convenient way to contribute to this organization through a check-off on the income tax form. 

 

Legislative Analyst:  Suzanne Lowe

 

FISCAL IMPACT

 

The revenue from the new income tax check-off for the Special Olympics Michigan Fund will depend on the size and number of taxpayer donations.  The income tax check-off revenue history in recent years is summarized in Table 1 below.  The bills will increase the costs of the Department of Treasury by a minimal amount to administer and track the revenue from the new check-off.

 

Table 1

Estimated Income Tax Check-Off Donations by Fund

 

Tax Year 2009

Tax Year 2010

Tax Year 2011a)

 

Number of

Donations

Total

Donated

Number of

Donations

Total

Donated

Number of

Donations

Total

Donated

Amanda's Fund for Breast Cancer

3,754

$37,818

 

 

 

 

Animal Welfare Fund1)

7,854

100,862

10,852

$148,164

10,800

125,636

Children's Hospital of MI Fund

5,661

61,186

7,418

90,853

 

 

Children's Miracle Network Fund

3,432

35,357

4,707

56,901

 

 

Children's Trust Fund1)

17,244

185,407

7,387

92,631

8,499

88,839

Children of Veterans Tuition Grant Program1)

15,225

126,531

5,928

76,417

5,878

70,374

Foster Care Trust Fund

2,407

24,123

3,467

40,057

 

 

Girl Scouts of Michigan Fund1)

 

 

 

 

3,500

44,163

Michigan Military Relief Fund1)

22,432

273,428

7,443

128,603

9,463

134,757

Michigan Council for the Arts Fund

2,598

27,978

3,356

34,677

 

 

Michigan Housing and Community Development Fund

1,618

17,415

 

 

 

 

Michigan Law Enforcement Memorial Fund

2,492

27,457

 

 

 

 

Prostate Cancer Research

2,920

29,319

 

 

 

 

Renewable Fuels Fund

2,157

18,247

2,589

23,648

 

 

United Way Fund1)

5,736

241,797

7,747

389,080

5,574

163,937

    Total

 

$1,206,925

 

$1,081,031

 

$627,706

a) Collections through April 22, 2012.

1)  Check-offs on the 2011 contribution schedule.

       Source:  Department of Treasury

 

Fiscal Analyst:  Elizabeth Pratt

This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.