84R9029 TJB-F
 
  By: Ellis S.B. No. 868
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to a periodic review and expiration dates of state and
  local tax preferences.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle B, Title 3, Government Code, is amended
  by adding Chapter 320A to read as follows:
  CHAPTER 320A. REVIEW OF STATE AND LOCAL TAX PREFERENCES
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 320A.001.  DEFINITION. In this chapter, "tax
  preference" means a credit, discount, exclusion, exemption,
  refund, special valuation, special accounting treatment, special
  rate, or special method of reporting authorized by state law that
  relates to a state or local tax imposed in this state.
  SUBCHAPTER B. SCHEDULE FOR PERIODIC REVIEW OF STATE AND LOCAL TAX
  PREFERENCES
         Sec. 320A.051.  DEVELOPMENT AND BIENNIAL MODIFICATION OF
  STATE AND LOCAL TAX PREFERENCE REVIEW SCHEDULE. (a)  The
  comptroller shall:
               (1)  identify each state tax preference and each type
  of local tax preference;
               (2)  develop a state and local tax preference review
  schedule under which each identified tax preference is reviewed
  once during each six-year period; and
               (3)  specifically identify on the schedule each of the
  tax preferences the Legislative Budget Board must review for
  purposes of the next report due under Section 320A.151.
         (b)  Except as provided in Subsection (c), in developing the
  schedule, the comptroller shall give priority to scheduling for
  review the tax preferences that result in the greatest reduction in
  revenue derived from the taxes to which the tax preferences relate.
         (c)  In developing the schedule, the comptroller may:
               (1)  schedule for review at the same time all tax
  preferences authorized in the same chapter of the Tax Code; and
               (2)  schedule the initial review of a tax preference
  that has an expiration date for any date the comptroller determines
  is appropriate.
         (d)  The comptroller shall revise the schedule biennially
  only to:
               (1)  add to the schedule a tax preference that was
  enacted or authorized after the comptroller developed the most
  recent schedule;
               (2)  delete from the schedule a tax preference that was
  repealed or that expired after the comptroller developed the most
  recent schedule;
               (3)  update the review dates of the tax preferences for
  which reviews were conducted after the comptroller developed the
  most recent schedule; and
               (4)  update the tax preferences identified under
  Subsection (a)(3).
         Sec. 320A.052.  PUBLIC COMMENT.  The comptroller shall
  provide a process by which the public may comment on the state and
  local tax preference review schedule under Section 320A.051. The
  comptroller shall consider those comments in developing or revising
  the schedule.
         Sec. 320A.053.  SCHEDULE PROVIDED TO LEGISLATIVE BUDGET
  BOARD. Not later than December 1 of each odd-numbered year, the
  comptroller shall provide the state and local tax preference review
  schedule to the Legislative Budget Board.
  SUBCHAPTER C. REVIEW OF STATE AND LOCAL TAX PREFERENCES
         Sec. 320A.101.  PERIODIC REVIEW OF TAX PREFERENCES. The
  Legislative Budget Board shall periodically review each state tax
  preference and each type of local tax preference according to the
  state and local tax preference review schedule provided by the
  comptroller under Section 320A.053. In reviewing a tax preference,
  the board shall:
               (1)  summarize the legislative history of the tax
  preference;
               (2)  estimate the amount of lost tax revenue
  attributable to the tax preference during the preceding six-year
  period, including the percent reduction in the tax revenue of the
  related state or local tax, using amounts reported by the
  comptroller under Section 403.014, if available;
               (3)  determine the effect of the tax preference on the
  distribution of the tax burden by income class and industry or
  business class during the preceding six-year period, using amounts
  reported and data analyzed by the comptroller under Sections
  403.014 and 403.0141, if available; and
               (4)  evaluate, for a tax preference that reduces by
  more than one percent the total revenue of the related state or
  local tax, the fiscal impact of the tax preference during the
  preceding and following six-year periods, based on a cost-benefit
  analysis of the general effects of the tax preference on the overall
  state economy, including the effects on:
                     (A)  job creation by industry sector;
                     (B)  average wage by industry sector;
                     (C)  gross state product by industry sector;
                     (D)  business expenditures by industry sector;
  and
                     (E)  personal consumption by income class.
         Sec. 320A.102.  COOPERATION BY OTHER STATE ENTITIES. (a)  
  The Legislative Budget Board may request assistance from the
  comptroller or any other state agency, department, or office if the
  board needs assistance to perform the review required by Section
  320A.101.  The comptroller or other agency, department, or office
  shall provide the requested assistance.
         (b)  Notwithstanding Section 111.006, Tax Code, or other
  law, the comptroller shall provide to the Legislative Budget Board
  complete electronic access to tax files maintained by the
  comptroller, as the staff of the board determines necessary to
  perform a review required by Section 320A.101. An employee of the
  board that accesses tax files maintained by the comptroller is
  subject to the same duties and requirements regarding
  confidentiality as an employee of the comptroller who accesses the
  files.
  SUBCHAPTER D. RECOMMENDATIONS REGARDING REVIEWED TAX PREFERENCES
         Sec. 320A.151.  PRELIMINARY REPORT. Not later than
  September 1 of each even-numbered year, the Legislative Budget
  Board shall provide to the presiding officers of the senate finance
  committee, or its successor, and the house ways and means
  committee, or its successor, a preliminary report on the reviews of
  tax preferences identified under Section 320A.051(a)(3). The
  report must include drafts of any proposed legislation needed to
  implement the board's recommendations.
         Sec. 320A.152.  FINAL REPORT. (a)  The senate finance
  committee, or its successor, and the house ways and means
  committee, or its successor, shall review and may modify the
  preliminary report and proposed legislation provided to the
  committees under Section 320A.151.
         (b)  Not later than December 1 of each even-numbered year,
  the senate finance committee, or its successor, and the house ways
  and means committee, or its successor, shall provide to the
  governor, the lieutenant governor, and the speaker of the house of
  representatives a final report on the reviews of tax preferences
  identified under Section 320A.051(a)(3). The final report must
  include:
               (1)  as to each tax preference examined, a
  recommendation to:
                     (A)  continue the tax preference;
                     (B)  amend a provision relating to the tax
  preference; or
                     (C)  repeal the tax preference;
               (2)  a complete explanation of each recommendation;
               (3)  proposed legislation necessary to implement the
  findings of the final report; and
               (4)  a description of any deviations from the
  preliminary report provided under Section 320A.151 that are made by
  the final report, and a description of the reasons for each
  deviation.
         Sec. 320A.153.  PUBLIC HEARING ON FINAL REPORT.  The senate
  finance committee, or its successor, and the house ways and means
  committee, or its successor, shall hold a joint public hearing on
  the final report and proposed legislation provided under Section
  320A.152.
  SUBCHAPTER E. EXPIRATION OF TAX PREFERENCES
         Sec. 320A.201.  EXPIRATION; REQUIRED STATEMENT. (a)  Each
  tax preference enacted by the legislature that becomes law on or
  after September 1, 2016:
               (1)  expires six years after the date the tax
  preference takes effect, unless the legislature provides for an
  earlier or later expiration date; and
               (2)  must include the following statement: "This tax
  preference expires six years after its effective date unless the
  legislature provides for an earlier or later expiration date."
         (b)  A tax preference to which Subsection (a) applies that
  does not include the statement required by Subsection (a)(2)
  expires as provided by Subsection (a)(1).
         SECTION 2.  The comptroller of public accounts shall submit
  the initial state and local tax preference review schedule required
  by Section 320A.053, Government Code, as added by this Act, not
  later than January 15, 2016.
         SECTION 3.  The Legislative Budget Board shall submit the
  initial preliminary report required by Section 320A.151,
  Government Code, as added by this Act, not later than September 1,
  2016.
         SECTION 4.  The senate finance committee and the house ways
  and means committee shall submit the initial final report required
  by Section 320A.152, Government Code, as added by this Act, not
  later than December 1, 2016.
         SECTION 5.  This Act takes effect January 1, 2016, but only
  if the constitutional amendment proposed by the 84th Legislature,
  Regular Session, 2015, requiring the legislature to provide for a
  periodic review of state and local tax preferences and providing
  for the expiration of certain tax preferences six years after their
  effective dates or at another time prescribed by the legislature is
  approved by the voters. If that amendment is not approved by the
  voters, this Act has no effect.