By:  Shapleigh, Ellis                        S.B. No. 1778

         97S0703/3                           

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to reports on and analyses of tax impacts.

 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-3           SECTION 1.  Subchapter B, Chapter 403, Government Code, is

 1-4     amended by adding Section 403.0141 to read as follows:

 1-5           Sec. 403.0141.  REPORT ON INCIDENCE OF TAX.  (a)  Before each

 1-6     regular session of the legislature, the comptroller shall report to

 1-7     the legislature and the governor on the overall incidence of each

 1-8     state tax, including but not limited to any sales tax, excise tax,

 1-9     property tax, franchise tax, and business activity or value added

1-10     tax.  The analysis shall report on the distribution of the tax

1-11     burden.

1-12           (b)  At the request of the chair of a committee of the senate

1-13     or house of representatives to which has been referred a bill or

1-14     resolution to change the tax system which would increase, decrease,

1-15     or redistribute tax by more than $20,000,000, the Legislative

1-16     Budget Board with the assistance, as requested, of the comptroller

1-17     shall prepare an incidence impact analysis of the bill or

1-18     resolution.  The analysis shall report on the incidence effects

1-19     that would result if the bill or resolution were enacted.

1-20           (c)  To the extent data is available, the incidence impact

1-21     analysis under Subsections (a) and (b):

1-22                 (1)  shall evaluate the tax burden:

1-23                       (A)  on the overall income distribution, using a

 2-1     systemwide incidence measure such as the Suits index or other

 2-2     appropriate measures of equality and inequality;

 2-3                       (B)  by income class, including at a minimum

 2-4     deciles of the income distribution, and by industry or business

 2-5     class; and

 2-6                       (C)  by other appropriate taxpayer

 2-7     characteristics, such as:

 2-8                             (i)  whether the taxpayer is a renter,

 2-9     homeowner, farmer, rancher, retired elderly, or resident or

2-10     nonresident of the state; and

2-11                             (ii)  the manner of business organization

2-12     of the taxpayer; and

2-13                       (D)  by distribution of impact on consumers,

2-14     labor, capital, and out-of-state persons and entities; and

2-15                 (2)  shall:

2-16                       (A)  use the broadest measure of economic income

2-17     for which reliable data is available; and

2-18                       (B)  include a statement of the incidence

2-19     assumptions that were used in making the analysis.

2-20           SECTION 2.  This Act takes effect September 1, 1997.

2-21           SECTION 3.  The importance of this legislation and the

2-22     crowded condition of the calendars in both houses create an

2-23     emergency and an imperative public necessity that the

2-24     constitutional rule requiring bills to be read on three several

2-25     days in each house be suspended, and this rule is hereby suspended.