88R241 RDS-F
By: Johnson S.B. No. 103
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.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 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.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:
(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repealed or that expired after the comptroller developed the most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.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 to the Legislative Budget Board.
SUBCHAPTER C. CONDUCT OF 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 type of local tax preference according to the
state and local tax preference review schedule provided by the
comptroller 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. COOPERATION BY OTHER STATE ENTITIES. 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.0101. The comptroller or other agency, department, or office
shall provide the requested assistance.
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 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.0051(a)(3). The
report must include drafts of any proposed legislation needed to
implement the board's recommendations.
Sec. 320A.0152. 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.0151.
(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.0051(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.0151 that are made
by the final report, and a description of the reasons for each
deviation.
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) Each
tax preference enacted by the legislature that becomes law on or
after September 1, 2024:
(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.0053, Government Code, as added by this Act, not
later than January 15, 2024.
SECTION 3. 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,
2024.
SECTION 4. 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, 2024.
SECTION 5. This Act takes effect January 1, 2024, but only
if the constitutional amendment proposed by the 88th Legislature,
Regular Session, 2023, 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.