1-1     By:  Shapleigh, Ellis, Armbrister                     S.B. No. 1778

 1-2           (In the Senate - Filed March 14, 1997; March 24, 1997, read

 1-3     first time and referred to Committee on Finance; April 9, 1997,

 1-4     reported adversely, with favorable Committee Substitute by the

 1-5     following vote:  Yeas 11, Nays 1; April 9, 1997, sent to printer.)

 1-6     COMMITTEE SUBSTITUTE FOR S.B. No. 1778         By:  Truan, Moncrief

 1-7                            A BILL TO BE ENTITLED

 1-8                                   AN ACT

 1-9     relating to reports on and analyses of tax impacts.

1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-11           SECTION 1.  Subchapter B, Chapter 403, Government Code, is

1-12     amended by adding Section 403.0141 to read as follows:

1-13           Sec. 403.0141.  REPORT ON INCIDENCE OF TAX.  (a)  Before each

1-14     regular session of the legislature, the comptroller shall report to

1-15     the legislature and the governor on the overall incidence of the

1-16     school district property tax and any state tax generating more than

1-17     2.5 percent of state tax revenue in the prior fiscal year.  The

1-18     analysis shall report on the distribution of the tax burden for the

1-19     taxes included in the report.

1-20           (b)  At the request of the chair of a committee of the senate

1-21     or house of representatives to which has been referred a bill or

1-22     resolution to change the tax system which would increase, decrease,

1-23     or redistribute tax by more than $20,000,000, the Legislative

1-24     Budget Board with the assistance, as requested, of the comptroller

1-25     shall prepare an incidence impact analysis of the bill or

1-26     resolution.  The analysis shall report on the incidence effects

1-27     that would result if the bill or resolution were enacted.

1-28           (c)  To the extent data is available, the incidence impact

1-29     analysis under Subsections (a) and (b):

1-30                 (1)  shall evaluate the tax burden:

1-31                       (A)  on the overall income distribution, using a

1-32     systemwide incidence measure or other appropriate measures of

1-33     equality and inequality; and

1-34                       (B)  on income classes, including, at a minimum,

1-35     quintiles of the income distribution, on renters and homeowners and

1-36     on industry or business classes, as appropriate, as well as on

1-37     various types of business organizations;

1-38                 (2)  may evaluate the tax burden:

1-39                       (A)  by other appropriate taxpayer

1-40     characteristics, such as whether the taxpayer is a farmer, rancher,

1-41     retired elderly, or resident or nonresident of the state; and

1-42                       (B)  by distribution of impact on consumers,

1-43     labor, capital, and out-of-state persons and entities; and

1-44                 (3)  shall:

1-45                       (A)  use the broadest measure of economic income

1-46     for which reliable data is available; and

1-47                       (B)  include a statement of the incidence

1-48     assumptions that were used in making the analysis.

1-49           SECTION 2.  This Act takes effect September 1, 1997.

1-50           SECTION 3.  The importance of this legislation and the

1-51     crowded condition of the calendars in both houses create an

1-52     emergency and an imperative public necessity that the

1-53     constitutional rule requiring bills to be read on three several

1-54     days in each house be suspended, and this rule is hereby suspended.

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