SRC-HRD C.S.S.B. 1778 75(R)BILL ANALYSIS Senate Research CenterC.S.S.B. 1778 By: Shapleigh Finance 4-8-97 Committee Report (Substituted) DIGEST Currently, the comptroller is not required to report to the legislature and governor prior to the legislative session regarding the overall incidence of school district property tax and other state tax generating more than 2.5 percent of state tax revenue, nor is the Legislative Budget Board, during session, required to prepare an incidence impact analysis of a bill or resolution that would affect taxes by more than $20,000,000. This bill would require the comptroller, prior to session, and the Legislative Budget Board, during session at the request of a committee chair, to identify the impact of the current tax system and proposed changes through "tax incidence analysis," which illustrates how current and proposed taxes affect different segments of the Texas population. PURPOSE As proposed, C.S.S.B. 1778 requires the comptroller to report to the legislature and governor before each regular legislative session an analysis on the overall incidence of school district property tax and any other state tax generating more than 2.5 percent of state tax revenue. In addition, this bill requires the Legislative Budget Board, at the request of a committee chair, to prepare an incidence impact analysis of a bill or resolution that would increase, decrease, or redistribute taxes by more than $20,000,000. RULEMAKING AUTHORITY This bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 403B, Government Code, by adding Section 403.0141, as follows: Sec. 403.0141. REPORT ON INCIDENCE OF TAX. Requires the comptroller, before each regular session of the legislature, to report to the legislature and the governor on the overall incidence of the school district property tax and any state tax generating more than 2.5 percent of state tax revenue in the prior fiscal year. Requires the analysis to report on the distribution of the tax burden for taxes included in the report. Requires the Legislative Budget Board, with the assistance, as requested, of the comptroller, to prepare an incidence impact analysis of the bill or resolution, at the request of the chair of a committee of the senate or house of representatives to which has been referred a bill or resolution to change the tax system which would increase, decrease, or redistribute tax by more than $20,000,000. Requires the analysis to report on the incidence impact analysis under Subsections (a) and (b). Set forth additional requirements regarding the analysis. SECTION 2. Effective date: September 1, 1997. SECTION 3. Emergency clause. SUMMARY OF COMMITTEE CHANGES SECTION 1. Amends Chapter 403B, Government Code, to require the comptroller to report on the overall incidence of the school district property tax and any state tax generating more than 2.5 percent of state tax revenue in the prior fiscal year, rather than on the overall incidence of each state tax, including but not limited to, any sales tax, excise tax, property tax, franchise tax, and business activity or value added tax. Requires the analysis to report on the distribution of the tax burden for taxes included in the report. Requires the incidence impact analysis under Subsections (a) and (b) to evaluate the tax burden on income classes, including at a minimum quintiles, rather than deciles, of the income distribution, on renters and homeowners, and on industry or business classes, as appropriate, as well as on various types of business organizations. Removes a proposed requirement regarding the Suits index. Authorizes the incidence impact analysis to evaluate certain data, rather than requiring it to do so.