87R2330 SRA-F
By: Bernal H.B. No. 3328
A BILL TO BE ENTITLED
AN ACT
relating to the 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.0001. 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.0051. DEVELOPMENT AND BIENNIAL MODIFICATION OF
STATE AND LOCAL TAX PREFERENCE REVIEW SCHEDULE. (a) The
comptroller shall:
(1) identify each state tax preference and each 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 preliminary report required by Section
320A.0151.
(b) Except as provided by 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
schedule:
(1) all tax preferences authorized in the same chapter
of the Tax Code for review at the same time; and
(2) 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repealed or that expired after the comptroller developed the most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.0052. 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.0051. The
comptroller shall consider those comments in developing or revising
the schedule.
Sec. 320A.0053. 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 under Section 320A.0051 to the Legislative Budget Board.
SUBCHAPTER C. REVIEW OF STATE AND LOCAL TAX PREFERENCES
Sec. 320A.0101. PERIODIC REVIEW OF TAX PREFERENCES. The
Legislative Budget Board shall periodically review each state tax
preference and each local tax preference according to the state and
local tax preference review schedule the comptroller provides under
Section 320A.0053. In reviewing a tax preference, the board shall:
(1) determine the intended purpose of the tax
preference; and
(2) evaluate:
(A) whether the tax preference accomplishes its
intended purpose;
(B) whether the tax preference is inefficient,
ineffective, or unnecessary, or the intended purpose of the tax
preference is a low priority for this state; and
(C) the effect of the tax preference on economic
development, the number of high-wage jobs, funding for public
services, the distribution of the tax burden by income class and
industry or business class, and total income by income class in this
state.
Sec. 320A.0102. ADMINISTRATIVE SUPPORT. As requested by
the Legislative Budget Board, a state governmental entity shall
provide administrative support to the board as reasonable and
necessary for the board to perform the review required by Section
320A.0101.
SUBCHAPTER D. RECOMMENDATIONS REGARDING REVIEWED TAX PREFERENCES
Sec. 320A.0151. PRELIMINARY REPORT. Not later than
September 1 of each even-numbered year, the Legislative Budget
Board shall provide to 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
conducted under Section 320A.0101. The report must include drafts
of any proposed legislation needed to implement the board's
recommendations.
Sec. 320A.0152. FINAL REPORT. 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.0151. Not later than December 1 of
each even-numbered year, the committees 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.
The final report must include:
(1) with respect 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
under Subdivision (1);
(3) proposed legislation necessary to implement the
findings of the final report; and
(4) a description of any changes to the preliminary
report that were made in the final report, including a description
of the reasons for each change.
Sec. 320A.0153. 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.0152.
SUBCHAPTER E. EXPIRATION OF TAX PREFERENCES
Sec. 320A.0201. EXPIRATION; REQUIRED STATEMENT. (a) A tax
preference that becomes law on or after January 1, 2022, expires
six years after the date the tax preference takes effect, unless the
legislature provides for an earlier or later expiration date. The
law enacting a tax preference described by this subsection 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." A tax preference described by
this subsection that does not include the required statement
expires as provided by this subsection.
(b) A tax preference that became law before January 1, 2022,
and that remains in effect on that date expires January 1, 2028,
unless the legislature provides for an earlier or later expiration
date.
SECTION 2. (a) Notwithstanding Section 320A.0053,
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,
2022.
(b) The Legislative Budget Board shall submit the initial
preliminary report required by Section 320A.0151, Government Code,
as added by this Act, not later than September 1, 2022.
(c) The Senate Finance Committee and the House Ways and
Means Committee shall submit the initial final report required by
Section 320A.0152, Government Code, as added by this Act, not later
than December 1, 2022.
SECTION 3. This Act takes effect January 1, 2022, but only
if the constitutional amendment proposed by the 87th Legislature,
Regular Session, 2021, requiring the legislature to provide for a
periodic review of state and local tax preferences and providing
for the expiration of those tax preferences after six years, 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.