HOUSE BILL NO. 206
INTRODUCED BY C. HARRIS
A BILL FOR AN ACT ENTITLED: "AN ACT PROVIDING A ONE-TIME BONUS PAYMENT OF $10,000 TO A MONTANA PUBLIC SCHOOL TEACHER WHO RECEIVES A DOCTORATE DEGREE; EXEMPTING THE BONUS FROM MONTANA TAXES OR CALCULATION OF SAME SALARY; PROVIDING THAT THE BONUS IS A STATE OBLIGATION; PROVIDING AN APPROPRIATION; AMENDING SECTION 15-30-111, MCA; AND PROVIDING AN EFFECTIVE DATE AND AN APPLICABILITY DATE."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
NEW SECTION. Section 1. Bonus payment for teachers obtaining doctorate degree. (1) Subject to subsection (7), a one-time bonus payment of $10,000 must be provided to a teacher who obtains a doctorate degree from an accredited postsecondary institution during the teacher's employment if the teacher is:
(a) a full-time classroom teacher who is certified to teach in Montana under the provisions of 20-4-103; and
(b) is a full-time employee of:
(i) a Montana public school district, as defined in 20-6-101; or
(ii) the Montana school for the deaf and blind, as described in 20-8-101.
(2) A district that employs a teacher who obtains a doctorate degree and is eligible for the bonus payment under subsection (1) shall submit a request to the superintendent of public instruction for the bonus payment. The request must be made on a form prescribed by the superintendent of public instruction and must provide documentation that the teacher has received a doctorate degree as prescribed in subsection (1).
(3) Upon receipt of documentation from the district, the superintendent of public instruction shall distribute the bonus payment to the district for payment to the qualifying teacher.
(4) The bonus payment is exempt from taxation pursuant to 15-30-111(2)(q). The employer shall deduct the employer and the employee share of any federal taxes and retirement contributions from the bonus prior to payment to the employee.
(5) The bonus payment may not be included in the calculation of same salary, as defined in 20-4-203, but must be included in the calculation of average final compensation for purposes of determining a retirement allowance under 19-20-802 or 19-20-804. The district is not liable for any additional contributions to the teachers' retirement system as a result of the inclusion of the bonus payment in the calculation of average final compensation.
(6) Any bonus payment money remaining at the end of the biennium reverts to the fund from which the funding for payments is made.
(7) The obligation for funding the bonus payment is an obligation of the state. This section may not be construed to require a district to provide a bonus payment to a qualifying teacher without a payment from the state to the district. If the appropriation for funding teacher bonus payments is less than the total amount for which Montana teachers qualify, the superintendent of public instruction shall prorate the appropriation to the districts in a manner that provides the same amount to each qualifying teacher.
Section 2. Section 15-30-111, MCA, is amended to read:
"15-30-111. Adjusted gross income. (1) Adjusted gross income is the taxpayer's federal income tax adjusted gross income as defined in section 62 of the Internal Revenue Code of 1954, 26 U.S.C. 62, as that section may be labeled or amended, and in addition includes the following:
(a) (i) interest received on obligations of another state or territory or county, municipality, district, or other political subdivision of another state, except to the extent that the interest is exempt from taxation by Montana under federal law;
(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue Code of 1986, 26 U.S.C. 852(b)(5), as that section may be amended or renumbered, that are attributable to the interest referred to in subsection (1)(a)(i);
(b) refunds received of federal income tax, to the extent that the deduction of the tax resulted in a reduction of Montana income tax liability;
(c) that portion of a shareholder's income under subchapter S. of Chapter 1 of the Internal Revenue Code of 1954 that has been reduced by any federal taxes paid by the subchapter S. corporation on the income;
(d) depreciation or amortization taken on a title plant as defined in 33-25-105(15);
(e) the recovery during the tax year of an amount deducted in any prior tax year to the extent that the amount recovered reduced the taxpayer's Montana income tax in the year deducted; and
(f) if the state taxable distribution of an estate or trust is greater than the federal taxable distribution of the same estate or trust, the difference between the state taxable distribution and the federal taxable distribution of the same estate or trust for the same tax period.
(2) Notwithstanding the provisions of the federal Internal Revenue Code of 1954, as labeled or amended, adjusted gross income does not include the following, which are exempt from taxation under this chapter:
(a) (i) all interest income from obligations of the United States government, the state of Montana, a county, municipality, or district, or other political subdivision of the state and any other interest income that is exempt from taxation by Montana under federal law;
(ii) exempt-interest dividends as defined in section 852(b)(5) of the Internal Revenue Code of 1986, 26 U.S.C. 852(b)(5), as that section may be amended or renumbered, that are attributable to the interest referred to in subsection (2)(a)(i);
(b) interest income earned by a taxpayer who is 65 years of age or older in a tax year up to and including $800 for a taxpayer filing a separate return and $1,600 for each joint return;
(c) (i) except as provided in subsection (2)(c)(ii), the first $3,600 of all pension and annuity income received as defined in 15-30-101;
(ii) for pension and annuity income described under subsection (2)(c)(i), as follows:
(A) each taxpayer filing singly, head of household, or married filing separately shall reduce the total amount of the exclusion provided in subsection (2)(c)(i) by $2 for every $1 of federal adjusted gross income in excess of $30,000 as shown on the taxpayer's return;
(B) in the case of married taxpayers filing jointly, if both taxpayers are receiving pension or annuity income or if only one taxpayer is receiving pension or annuity income, the exclusion claimed as provided in subsection (2)(c)(i) must be reduced by $2 for every $1 of federal adjusted gross income in excess of $30,000 as shown on their joint return;
(d) all Montana income tax refunds or tax refund credits;
(e) gain required to be recognized by a liquidating corporation under 15-31-113(1)(a)(ii);
(f) all tips or gratuities that are covered by section 3402(k) or service charges that are covered by section 3401 of the Internal Revenue Code of 1954, 26 U.S.C. 3402(k) or 3401, as amended and applicable on January 1, 1983, received by persons for services rendered by them to patrons of premises licensed to provide food, beverage, or lodging;
(g) all benefits received under the workers' compensation laws;
(h) all health insurance premiums paid by an employer for an employee if attributed as income to the employee under federal law;
(i) all money received because of a settlement agreement or judgment in a lawsuit brought against a manufacturer or distributor of "agent orange" for damages resulting from exposure to "agent orange";
(j) principal and income in a medical care savings account established in accordance with 15-61-201 or withdrawn from an account for eligible medical expenses, as defined in 15-61-102, of the taxpayer or a dependent of the taxpayer or for the long-term care of the taxpayer or a dependent of the taxpayer;
(k) principal and income in a first-time home buyer savings account established in accordance with 15-63-201 or withdrawn from an account for eligible costs, as provided in 15-63-202(7), for the first-time purchase of a single-family residence;
(l) money, not exceeding $3,000 for each taxpayer, contributed to a family education savings program account established in accordance with 15-62-201;
(m) principal withdrawn from an account for qualified higher education expenses, as defined in 15-62-103, for a designated beneficiary of the taxpayer;
(n) the recovery during the tax year of any amount deducted in any prior tax year to the extent that the recovered amount did not reduce the taxpayer's Montana income tax in the year deducted;
(o) if the federal taxable distribution of an estate or trust is greater than the state taxable distribution of the same estate
or trust, the difference between the federal taxable distribution and the state taxable distribution of the same estate or trust
for the same tax period; and
(p) income of a dependent child that is included in the taxpayer's federal adjusted gross income pursuant to the Internal Revenue Code. The child is required to file a Montana personal income tax return if the child and taxpayer meet the filing requirements in 15-30-142.
(q) money, not exceeding $10,000, paid to a qualifying teacher pursuant to [section 1].
(3) A shareholder of a DISC that is exempt from the corporation license tax under 15-31-102(1)(l) shall include in the shareholder's adjusted gross income the earnings and profits of the DISC in the same manner as provided by section 995 of the Internal Revenue Code, 26 U.S.C. 995, for all periods for which the DISC election is effective.
(4) A taxpayer who, in determining federal adjusted gross income, has reduced the taxpayer's business deductions by an amount for wages and salaries for which a federal tax credit was elected under sections 38 and 51(a) of the Internal Revenue Code of 1954, as those sections may be labeled or amended, is allowed to deduct the amount of the wages and salaries paid regardless of the credit taken. The deduction must be made in the year that the wages and salaries were used to compute the credit. In the case of a partnership or small business corporation, the deduction must be made to determine the amount of income or loss of the partnership or small business corporation.
(5) Married taxpayers filing a joint federal return who are required to include part of their social security benefits or part of their tier 1 railroad retirement benefits in federal adjusted gross income may split the federal base used in calculation of federal taxable social security benefits or federal taxable tier 1 railroad retirement benefits when they file separate Montana income tax returns. The federal base must be split equally on the Montana return.
(6) A taxpayer receiving retirement disability benefits who has not attained age 65 by the end of the tax year and who has retired as permanently and totally disabled may exclude from adjusted gross income up to $100 a week received as wages or payments in lieu of wages for a period during which the employee is absent from work due to the disability. If the adjusted gross income before this exclusion and before application of the two-earner married couple deduction exceeds $15,000, the excess reduces the exclusion by an equal amount. This limitation affects the amount of exclusion, but not the taxpayer's eligibility for the exclusion. If eligible, married individuals shall apply the exclusion separately, but the limitation for income exceeding $15,000 is determined with respect to the spouses on their combined adjusted gross income. For the purpose of this subsection, "permanently and totally disabled" means unable to engage in any substantial gainful activity by reason of any medically determined physical or mental impairment lasting or expected to last at least 12 months.
(7) Married taxpayers who file a joint federal return and who make an election on the federal return to defer income ratably for 4 tax years because of a conversion from an IRA other than a Roth IRA to a Roth IRA, pursuant to section 408A(d)(3) of the Internal Revenue Code, 26 U.S.C. 408A(d)(3), may file separate Montana income tax returns to defer the full taxable conversion amount from Montana adjusted gross income for the same time period. The deferred amount must be attributed to the taxpayer making the conversion. (Subsection (2)(f) terminates on occurrence of contingency--sec. 3, Ch. 634, L. 1983.)"
NEW SECTION. Section 3. Appropriation. (1) Except as provided in subsection (2), there is appropriated $60,000 from the dollars for education fund created in [section 1] of ___Bill No.___ [LC 672] to the office of public instruction for the biennium beginning July 1, 2001, and ending June 30, 2003, to provide for bonus payments to teachers obtaining doctorate degrees.
(2) If ___Bill No.___ [LC 672] is not passed and approved or if ___Bill No.___ [LC 672] is passed and approved but funds are not allocated to the dollars for education fund, then there is appropriated $60,000 from the general fund to the office of public instruction for the biennium beginning July 1, 2001, and ending June 30, 2003, to provide for bonus payments to teachers obtaining doctorate degrees.
NEW SECTION. Section 4. Codification instruction. [Section 1] is intended to be codified as an integral part of Title 20, chapter 4, part 1, and the provisions of Title 20, chapter 4, part 1, apply to [section 1].
NEW SECTION. Section 5. Effective date -- applicability. [This act] is effective July 1, 2001, and applies to bonus payments for teachers receiving a doctorate degree on or after July 1, 2001.
- END -
Latest Version of HB 206 (HB0206.01)
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