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Governor proposes settlement and statutory changes to resolve federal-retiree refund litigation
Summary
Governor Michael O'Lovitt asked the Senate to authorize a settlement offer on a federal-retiree tax-refund lawsuit and to change the state's refund-interest law to limit future retroactive interest liability, offering to pay refunds and interest equal to state earnings and to expedite checks by February.
SALT LAKE CITY — Governor Michael O'Lovitt addressed the Utah Senate during the special session on Oct. 11, 1993, asking lawmakers to authorize a settlement offer to resolve long-running litigation by federal retirees over state tax treatment and to change the state's interest-on-refunds statute.
O'Lovitt said the litigation arose after two U.S. Supreme Court decisions altered longstanding state practice and compelled retroactive refunds. "I'm going to ask, today that we change our law dealing with the interest that we owe on refunds," he told senators, arguing that the court-imposed retroactivity created an unprecedented liability for the state.
Nut graf: The governor proposed a two-part approach: (1) give him authority to offer a cash settlement that would pay refund principals to claimants and allow more people to file protective claims, and (2) amend state law so…
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