Texas House Bill HB3328

Texas 2021 - 87th Regular

Caption

Relating to the periodic review and expiration dates of state and local tax preferences.

Impact

The impact of HB3328 is substantial as it introduces a structured approach to oversight of tax preferences, which could enhance government accountability and transparency. By creating a regular review process, the bill aims to assess each tax preference's effectiveness and necessity. The periodic reviews will consider multiple factors, including economic development, the impact on market efficiencies, and the overall public benefit of the preferences. This system emphasizes the need for a reassessment, especially for tax policies that may have lasting implications on state revenue and fiscal health.

Summary

House Bill 3328 proposes a system for the periodic review and expiration of state and local tax preferences in Texas. The bill establishes a new chapter within the Government Code that mandates the comptroller of public accounts to create and maintain a review schedule for tax preferences, which include credits, exemptions, refunds, and other special rates or valuations authorized by state law. A significant feature of the bill is the requirement that all tax preferences enacted after January 1, 2022, will automatically expire six years after their effective date unless otherwise specified by the legislature. This aims to ensure that tax benefits remain relevant and effective over time.

Contention

Notably, there may be contention surrounding the implementation of this bill. Proponents argue that the automatic expiration of tax preferences will prevent outdated fiscal policies from persisting and ensure that all tax incentives are effective and aligned with current economic goals. Conversely, critics may voice concerns regarding potential inequities arising from the expiration of established tax preferences, particularly those beneficial to specific industries or communities. The review criteria set forth by the bill could also be contentious, depending on how the intended purposes of tax preferences are evaluated and prioritized within the state government.