By: Ellis S.B. No. 14
A BILL TO BE ENTITLED
AN ACT
relating to a periodic review 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 12-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 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repealed or that expired after the comptroller developed the most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. CONDUCT OF 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 12-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 12-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 12-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. REPORT ON TAX PREFERENCES
Sec. 320A.151. 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 report on the reviews of tax preferences identified
under Section 320A.051(a)(3). The board shall post the report on
the board's Internet website as soon as possible after the board
provides the report to the presiding officers under this section.
SECTION 2. Notwithstanding Section 320A.053, Government
Code, as added by this Act, the comptroller of public accounts shall
submit the initial state and local tax preference review schedule
required by that section not later than January 15, 2014.
SECTION 3. The Legislative Budget Board shall submit the
initial report required by Section 320A.151, Government Code, as
added by this Act, not later than September 1, 2014.
SECTION 4. This Act takes effect January 1, 2014.