HOUSE SUBSTITUTE FOR

SB-0327, As Passed Senate, June 12, 2014

SENATE BILL NO. 327

A bill to amend 1941 PA 122, entitled

"An act to establish the revenue collection duties of the

department of treasury; to prescribe its powers and duties as the

revenue collection agency of this state; to prescribe certain

powers and duties of the state treasurer; to establish the

collection duties of certain other state departments for money or

accounts owed to this state; to regulate the importation, stamping,

and disposition of certain tobacco products; to provide for the

transfer of powers and duties now vested in certain other state

boards, commissions, departments, and offices; to prescribe certain

duties of and require certain reports from the department of

treasury; to provide procedures for the payment, administration,

audit, assessment, levy of interests or penalties on, and appeals

of taxes and tax liability; to prescribe its powers and duties if

an agreement to act as agent for a city to administer, collect, and

enforce the city income tax act on behalf of a city is entered into

with any city; to provide an appropriation; to abolish the state

board of tax administration; to prescribe penalties and provide

remedies; and to declare the effect of this act,"

by amending section 4 (MCL 205.4), as amended by 2002 PA 657.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 4. (1) Not later than ~~1 year after the effective date of~~

~~this section,~~ April 1, 1994, the department of treasury shall

submit rules for a public hearing pursuant to the administrative

procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328, that

provide for all of the following:

(a) Standards to be followed by department officers and

employees for the fair and courteous treatment of the public, and a

system for monitoring compliance with those standards.

(b) The procedures governing an informal conference held under

section 21. These procedures shall include at least all of the

following:

(i) A method by which the department attempts to schedule the

informal conference at a mutually convenient time and place.

(ii) A requirement that the department include in the notice

for the informal conference the scope and nature of the subject of

the informal conference.

(iii) Authorization for the taxpayer at whose request the

informal conference is being held to make a sound recording of the

informal conference with prior notice to the department and for the

department to do the same with prior notice to the taxpayer.

(2) Not later than ~~1 year after the effective date of this~~

~~section,~~ April 1, 1994, the department shall develop guidelines to

govern departmental employee responses to inquiries from the public

and standards for tax audit activities. The guidelines shall

explicitly exclude the use of a collection goal or quota for

evaluating an employee. The department shall assemble the

guidelines required by this subsection into an employee handbook.

However, the handbook shall not disclose information or parameters

excluded from disclosure under section 28(1)(f). The department

shall distribute the handbook to all departmental employees

involved in the collection or auditing of taxes and shall make the

handbook available to the public.

(3) Not later than January 1, 2015, the department shall

electronically file a request for rule-making under section 39(1)

of the administrative procedures act of 1969, 1969 PA 306, MCL

24.239, with the office of regulatory reinvention. The proposed

rules shall provide for all of the following:

(a) Standards for the fair and courteous treatment of the

public to be followed by the department's contractors, consultants,

and agents and a system for monitoring compliance with these

standards.

(b) Standards that ensure that all statutes and rules shall be

fairly and consistently applied to all taxpayers.

goals or quotas during the conduct of an audit of a tax

administered under this act or an examination of records under the

uniform unclaimed property act, 1995 PA 29, MCL 567.221 to 567.265.

(4) If the department intentionally uses a collection goal or

quota in the conduct of an audit of a tax administered under this

act or the examination of records under the uniform unclaimed

property act, 1995 PA 29, MCL 567.221 to 567.265, the taxpayer may

be awarded actual damages, including reasonable attorney fees,

sustained as a result of the department's action. An award under

this subsection shall not exceed $45,000.00. Actual damages do not

include taxes owed or deliverable abandoned property.

(5) ~~(3)~~ The department shall publish a handbook for taxpayers

and tax preparers. The handbook shall be made available at a

reasonable cost, not to exceed the actual cost of publication, and

shall contain all of the following:

(a) The audit and collection procedures used by the department

and agents of the department.

(b) The procedures governing departmental communications with

taxpayers in the audit and collection process.