TAX CHECK-OFF FOR SCOUTS S.B. 645 & 646:
ANALYSIS AS REPORTED FROM COMMITTEE
Senate Bills 645 and 646 (as reported without amendment) (Senate-passed version)
Sponsor: Senator Roger Kahn, M.D.
RATIONALE
Individual taxpayers in Michigan may make contributions to various causes by allocating a portion of their tax refund, or an amount of additional tax liability, to one or more of the funds listed on the income tax return. These "check-offs" are identified in the Income Tax Act and the Department of Treasury is required to create a schedule of the funds to be included with the annual return. In 2010, legislation was enacted to create the Girl Scouts of Michigan Fund and add a tax check-off for it, beginning with the 2011 tax year. It has now been suggested that the Fund should include the Boy Scouts, and that donations from the tax check-off should benefit both Boy Scout and Girl Scout organizations in Michigan.
CONTENT
Senate Bill 645 would amend the Girl Scouts of Michigan Fund Act, and Senate Bill 646 would amend the Income Tax Act, to do the following:
-- Include Boy Scouts in the Girl Scouts of Michigan Fund.
-- Provide for income tax check-off donations to the Girl Scouts and Boy Scouts of Michigan Fund beginning with the 2014 tax year.
-- Require money from the donations to be disbursed equally between Girl Scouts organizations and Boy Scouts organizations in Michigan.
The bills are tie-barred.
Senate Bill 645
Under the Girl Scouts of Michigan Fund Act, the Fund is created in the Department of Treasury to provide funds for donation to Girl Scout organizations located in Michigan, "to prepare young people to make ethical and moral choices over their lifetimes by instilling in them the values of the scout oath and law".
The State Treasurer is required to credit to the Fund all amounts appropriated for this purpose under Section 435 of the Income Tax Act (which provides for tax check-off donations to this and other funds).
The money, interest, and earnings of the Fund must be spent solely for the purposes described in the Girl Scouts of Michigan Fund Act. Money granted or received as a gift or donation to the Fund is available for distribution and appropriation to each county from which a contribution, gift, or donation was received.
The bill would rename the Act as the "Girl Scouts and Boy Scouts of Michigan Fund Act" and would rename the Fund accordingly. The Fund would provide funds for donation to Girl Scouts organizations and Boy Scouts organizations located in Michigan, to prepare young people as described above.
The bill would require that money in the Fund be disbursed equally between the Girl Scouts organizations and the Boy Scouts organizations located in the State.
Senate Bill 646
Section 435 of the Income Tax Act allows an individual to designate on his or her annual tax return that a contribution of $5, $10, or more of his or her State income tax refund (or additional tax liability) be credited to any of the funds listed in the Act. The Department of Treasury must create a schedule of the specified check-offs to be included with an annual income tax return. The schedule may not include more than 10 separate check-offs in a single year, and the Department must discontinue a check-off that fails to raise $50,000 in a tax year for two consecutive years.
Beginning with the 2011 tax year, the funds on the schedule of check-offs have included the Girl Scouts of Michigan Fund. Under the bill, instead, the funds would include the Girl Scouts and Boy Scouts of Michigan Fund, for the 2014 tax year and each subsequent tax year.
MCL 206.921-206.924 (S.B. 645)
206.435 (S.B. 646)
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
The Girl Scouts and the Boy Scouts share many goals: to build character in young people; help them to achieve their full potential and develop leadership skills; instill in them sound values, such as loyalty, trustworthiness, self-reliance, and respect for others; and teach them to contribute to society. Both organizations achieve these goals in a variety of ways, such as performing community service, participating in cultural exchanges, attending camp and going on field trips, earning badges, and engaging in environmental stewardship projects. To pay for these activities, Boy Scout and Girl Scout organizations rely on dues, fund-raising efforts (such as popcorn and cookie sales), activity fees, individual donations, foundation grants, corporate sponsorships, bequests, and investment income.
Several years ago, the Girl Scouts of Michigan Fund and the associated tax check-off were created to help support Girl Scout organizations in this State. In tax years 2011 and 2012 combined, these donations raised more than $100,000. According to representatives of Girl Scouts in Michigan, it is time to share with Boy Scouts so the entire scouting "family" will benefit. Considering the similarity of the organizations' goals, the contributions that scouts make to the community, and the positive differences that scouting can make in an individual's life, it would make sense to give taxpayers an easy opportunity to donate to both the Boy Scouts and the Girl Scouts.
Opposing Argument
Both the Girl Scout Promise and the Boy Scout Oath include a reference to serving or doing a duty to God, but the Boy Scouts of America stand for religious discrimination and intolerance. It is the official position and actual practice of the Boy Scouts not to accept atheists or agnostics as members or leaders. As a private entity, the organization has a legal right to exclude nonbelievers. The State of Michigan, however, should not endorse or sanction religious discrimination by including the Boy Scouts in a check-off on the tax return.
Providing the check-off for the Girl Scouts, on the other hand, is appropriate. The Girl Scouts allow an alternative Promise for secular members and accommodate all individuals regardless of their creed or lack of religious belief.
Legislative Analyst: Suzanne Lowe
FISCAL IMPACT
The bills would have no fiscal impact on State or local government. The check-off provisions on individual income tax returns are for voluntary donations and do not affect State revenue. There currently is a check-off for Girl Scouts of Michigan. Donations to the Girl Scouts of Michigan through the check-off were $59,505 for tax year 2011 and $41,677 for tax year 2012. Tax year 2013 data are not yet complete. Current law provides that if a check-off raises less than $50,000 for two consecutive years, the organization must be removed from the tax form. Adding the Boy Scouts to the check-off would keep it on individual income tax forms for 2014 and 2015, even if the donations to the Girl Scouts of Michigan for 2013 are less than $50,000. Revenue from the check-off for the Girl Scouts and Boy Scouts of Michigan would be divided equally between the two groups.
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.