Text of RI HB 7804 (2006)

2006 -- H 7804 SUBSTITUTE A ======= LC02603/SUB A ======= STATE OF RHODE ISLAND IN GENERAL ASSEMBLY JANUARY SESSION, A.D. 2006 ____________ A N A C T RELATING TO LABOR AND LABOR RELATIONS - RHODE ISLAND PARENTAL AND FAMILY MEDICAL LEAVE ACT - INSURANCE BENEFITS - PERSONAL INCOME TAX Introduced By: Representatives Fox, Gemma, Moura, Costantino, and Ajello Date Introduced: February 28, 2006 Referred To: House Finance It is enacted by the General Assembly as follows: 1-1 SECTION 1. Section 28-48-1 of the General Laws in Chapter 28-48 entitled "Rhode 1-2 Island Parental and Family Medical Leave Act" is hereby amended to read as follows: 1-3 28-48-1. Definitions. -- As used in this chapter, the following words and terms have the 1-4 following meanings: 1-5 (1) "Director" means the director of the department of labor and training. 1-6 (2) "Employee" means any full-time employee who works an average of thirty (30) or 1-7 more hours per week. 1-8 (3) "Employer" means and includes: 1-9 (i) any person, sole proprietorship, partnership, corporation, or other business entity that 1-10 employs fifty (50) or more employees, 1-11 (ii) the state of Rhode Island, including the executive, legislative, and judicial branches, 1-12 and any state department or agency that employs any employees, 1-13 (iii) any city or town or municipal agency that employs thirty (30) or more employees, 1-14 and 1-15 (iv) any person who acts directly or indirectly in the interest of any employer. 1-16 (4) "Family leave" means leave by reason of the serious illness of a family member. 1-17 (5) "Family member" means a parent, spouse, child, mother-in-law, father-in-law, or the 1-18 employee himself or herself, and with respect to employees of the state as defined in subsection 2-1 (3) (ii), shall include domestic partners as defined in section 36-12-1(3). 2-2 (6) "Parental leave" means leave by reason of the birth of a child of an employee or the 2-3 placement of a child sixteen (16) years of age or less with an employee in connection with the 2-4 adoption of the child by the employee. 2-5 (7) "Serious illness" means a disabling physical or mental illness, injury, impairment, or 2-6 condition that involves inpatient care in a hospital, a nursing home, or a hospice, or outpatient 2-7 care requiring continuing treatment or supervision by a health care provider. 2-8 SECTION 2. Chapter 36-12 of the General Laws entitled "Insurance Benefits" is hereby 2-9 amended by adding thereto the following section: 2-10 36-12-2.4. Health insurance benefits - COBRA. – For purposes of fulfilling any 2-11 employer obligations under the Consolidated Omnibus Budget Reconciliation Act of 1985 2-12 (COBRA), 42 U.S.C. section 403 et seq., a domestic partner shall be deemed a dependent of an 2-13 employee as defined herein. 2-14 SECTION 3. Section 44-30-12 of the General Laws in Chapter 44-30 entitled "Personal 2-15 Income Tax" is hereby amended to read as follows: 2-16 44-30-12. Rhode Island income of a resident individual. -- (a) General. - The Rhode 2-17 Island income of a resident individual means his or her adjusted gross income for federal income 2-18 tax purposes, with the modifications specified in this section. 2-19 (b) Modifications increasing federal adjusted gross income. - There shall be added to 2-20 federal adjusted gross income: 2-21 (1) Interest income on obligations of any state, or its political subdivisions, other than 2-22 Rhode Island or its political subdivisions; 2-23 (2) Interest or dividend income on obligations or securities of any authority, commission, 2-24 or instrumentality of the United States, but not of Rhode Island or its political subdivisions, to the 2-25 extent exempted by the laws of the United States from federal income tax but not from state 2-26 income taxes; 2-27 (3) The modification described in section 44-30-25(g); 2-28 (4) (i) The amount defined below of a nonqualified withdrawal made from an account in 2-29 the tuition savings program pursuant to section 16-57-6.1. For purposes of this section, a 2-30 nonqualified withdrawal is: 2-31 (A) A transfer or rollover to a qualified tuition program under Section 529 of the Internal 2-32 Revenue Code, 26 U.S.C. section 529, other than to the tuition savings program referred to in 2-33 section 16-57-6.1; and 2-34 (B) A withdrawal or distribution which is: 3-1 (I) Not applied on a timely basis to pay "qualified higher education expenses" as defined 3-2 in section 16-57-3(12) of the beneficiary of the account from which the withdrawal is made; 3-3 (II) Not made for a reason referred to in section 16-57-6.1(e); or 3-4 (III) Not made in other circumstances for which an exclusion from tax made applicable 3-5 by Section 529 of the Internal Revenue Code, 26 U.S.C. section 529, pertains if the transfer, 3-6 rollover, withdrawal or distribution is made within two (2) taxable years following the taxable 3-7 year for which a contributions modification pursuant to subdivision (c)(4) of this section is taken 3-8 based on contributions to any tuition savings program account by the person who is the 3-9 participant of the account at the time of the contribution, whether or not the person is the 3-10 participant of the account at the time of the transfer, rollover, withdrawal or distribution; 3-11 (ii) In the event of a nonqualified withdrawal under subparagraphs (i)(A) or (i)(B) of this 3-12 subdivision, there shall be added to the federal adjusted gross income of that person for the 3-13 taxable year of the withdrawal an amount equal to the lesser of: 3-14 (A) The amount equal to the nonqualified withdrawal reduced by the sum of any 3-15 administrative fee or penalty imposed under the tuition savings program in connection with the 3-16 nonqualified withdrawal plus the earnings portion thereof, if any, includible in computing the 3-17 person's federal adjusted gross income for the taxable year; and 3-18 (B) The amount of the person's contribution modification pursuant to subdivision (c)(4) 3-19 of this section for the person's taxable year of the withdrawal and the two (2) prior taxable years 3-20 less the amount of any nonqualified withdrawal for the two (2) prior taxable years included in 3-21 computing the person's Rhode Island income by application of this subsection for those years. 3-22 Any amount added to federal adjusted gross income pursuant to this subdivision shall constitute 3-23 Rhode Island income for residents, nonresidents and part-year residents; and 3-24 (5) The modification described in section 44-30-25.1(d)(3)(i). 3-25 (c) Modifications reducing federal adjusted gross income. - There shall be subtracted 3-26 from federal adjusted gross income: 3-27 (1) Any interest income on obligations of the United States and its possessions to the 3-28 extent includible in gross income for federal income tax purposes, and any interest or dividend 3-29 income on obligations, or securities of any authority, commission, or instrumentality of the 3-30 United States to the extent includible in gross income for federal income tax purposes but exempt 3-31 from state income taxes under the laws of the United States; provided, that the amount to be 3-32 subtracted shall in any case be reduced by any interest on indebtedness incurred or continued to 3-33 purchase or carry obligations or securities the income of which is exempt from Rhode Island 3-34 personal income tax, to the extent the interest has been deducted in determining federal adjusted 4-1 gross income or taxable income; 4-2 (2) A modification described in section 44-30-25(f) or section 44-30-1.1(c)(1); 4-3 (3) The amount of any withdrawal or distribution from the "tuition savings program" 4-4 referred to in section 16-57-6.1 which is included in federal adjusted gross income, other than a 4-5 withdrawal or distribution or portion of a withdrawal or distribution that is a nonqualified 4-6 withdrawal; 4-7 (4) Contributions made to an account under the tuition savings program, including the 4-8 "contributions carryover" pursuant to paragraph (iv) of this subdivision, if any, subject to the 4-9 following limitations, restrictions and qualifications: 4-10 (i) The aggregate subtraction pursuant to this subdivision for any taxable year of the 4-11 taxpayer shall not exceed five hundred dollars ($500) or one thousand dollars ($1,000) if a joint 4-12 return; 4-13 (ii) The following shall not be considered contributions: 4-14 (A) Contributions made by any person to an account who is not a participant of the 4-15 account at the time the contribution is made; 4-16 (B) Transfers or rollovers to an account from any other tuition savings program account 4-17 or from any other "qualified tuition program" under section 529 of the Internal Revenue Code, 26 4-18 U.S.C. section 529; or 4-19 (C) A change of the beneficiary of the account; 4-20 (iii) The subtraction pursuant to this subdivision shall not reduce the taxpayer's federal 4-21 adjusted gross income to less than zero (0); 4-22 (iv) The contributions carryover to a taxable year for purpose of this subdivision is the 4-23 excess, if any, of the total amount of contributions actually made by the taxpayer to the tuition 4-24 savings program for all preceding taxable years for which this subsection is effective over the 4-25 sum of: 4-26 (A) The total of the subtractions under this subdivision allowable to the taxpayer for all 4-27 such preceding taxable years; and 4-28 (B) That part of any remaining contribution carryover at the end of the taxable year 4-29 which exceeds the amount of any nonqualified withdrawals during the year and the prior two (2) 4-30 taxable years not included in the addition provided for in this subdivision for those years. Any 4-31 such part shall be disregarded in computing the contributions carryover for any subsequent 4-32 taxable year; 4-33 (v) For any taxable year for which a contributions carryover is applicable, the taxpayer 4-34 shall include a computation of the carryover with the taxpayer's Rhode Island personal income 5-1 tax return for that year, and if for any taxable year on which the carryover is based the taxpayer 5-2 filed a joint Rhode Island personal income tax return but filed a return on a basis other than 5-3 jointly for a subsequent taxable year, the computation shall reflect how the carryover is being 5-4 allocated between the prior joint filers; and 5-5 (5) The modification described in section 44-30-25.1(d)(1). 5-6 (6) Amounts deemed taxable income to the taxpayer due to payment or provision of 5-7 insurance benefits to a dependent, including a domestic partner pursuant to chapter 12 of title 36 5-8 or other coverage plan. 5-9 (d) Modification for Rhode Island fiduciary adjustment. - There shall be added to or 5-10 subtracted from federal adjusted gross income (as the case may be) the taxpayer's share, as 5-11 beneficiary of an estate or trust, of the Rhode Island fiduciary adjustment determined under 5-12 section 44-30-17. 5-13 (e) Partners. - The amounts of modifications required to be made under this section by a 5-14 partner, which relate to items of income or deduction of a partnership, shall be determined under 5-15 section 44-30-15. 5-16 SECTION 4. This section and sections 1 and 2 of this act shall take effect upon passage. 5-17 Section 3 of this act shall take effect upon passage and apply to tax years commencing on or after 5-18 January 1, 2006. ======= LC02603/SUB A ======== EXPLANATION BY THE LEGISLATIVE COUNCIL OF A N A C T RELATING TO LABOR AND LABOR RELATIONS - RHODE ISLAND PARENTAL AND FAMILY MEDICAL LEAVE ACT - INSURANCE BENEFITS - PERSONAL INCOME TAX *** 6-1 This act would amend statutes on health insurance coverage, family leave and income tax 6-2 to include domestic partners. 6-3 Sections 1, 2, and 4 of this act would take effect upon passage. Section 3 of this act 6-4 would take effect upon passage and apply to tax years commencing on or after January 1, 2006. ======= LC02603/SUB A ======= H7804A