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78R1290 SMJ-D

By:  Solomons                                                     H.B. No. 702



A BILL TO BE ENTITLED

AN ACT

relating to the application of the sunset review process to state 
taxes.    
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Chapter 325, Government Code, is amended by 
adding Section 325.023 to read as follows:
	Sec. 325.023.  EVALUATION OF STATE TAXES.  (a)  The 
commission shall periodically evaluate each of the taxes imposed by 
Subtitles E, F, G, H, I, and J, Title 2, Tax Code, according to a 
schedule adopted by the commission.  The schedule must provide for 
the commission to evaluate each tax at intervals not to exceed 10 
years.  The commission shall provide the schedule to the governor, 
lieutenant governor, speaker of the house of representatives, and 
presiding officers of the senate finance committee and the house 
ways and means committee.
	(b)  In its evaluation of each tax, the commission shall:               
		(1)  assess the extent of the tax's burden on the 
persons who pay it;
		(2)  consider the effect of the tax on:                                
			(A)  the economy, including economic development, 
in this state; and
			(B)  obligations of the state, including a lease, 
contract, other written obligation, or a continuing obligation to 
pay bonded indebtedness;
		(3)  take into account any other factors the commission 
considers relevant in its evaluation of the tax;
		(4)  consider whether retaining the tax is in the best 
interest of the public; and
		(5)  make recommendations for retaining or repealing 
the tax, or for amending a provision related to the tax.
	(c)  At each regular legislative session, the commission 
shall present to the legislature and the governor a report on the 
evaluation and recommendations it makes under Subsection (b).  The 
report must include drafts of any legislation needed to carry out 
the commission's recommendations under that subsection.
	SECTION 2.  Chapter 101, Tax Code, is amended by adding 
Section 101.010 to read as follows:
	Sec. 101.010.  SUNSET PROVISION FOR STATE TAXES.  (a)  The 
taxes imposed by Subtitles E, F, G, H, I, and J are subject to 
periodic evaluation by the Sunset Advisory Commission under Section 
325.023, Government Code, according to a schedule that the 
commission adopts under that section.
	(b)  A tax that is the subject of a Sunset Advisory 
Commission evaluation under Section 325.023, Government Code, and 
the chapter or subtitle that imposes the tax are repealed on October 
1 of the year in which the commission presents its evaluation to the 
legislature unless the legislature retains the tax.
	(c)  This section does not prohibit the legislature from  
repealing a tax at a date earlier than the date provided by this 
section.
	SECTION 3.  (a)  The Sunset Advisory Commission shall adopt a 
schedule for evaluating taxes as provided by Section 325.023, 
Government Code, as added by this Act, on or before January 1, 2004.
	(b)  This Act takes effect immediately if it receives a vote 
of two-thirds of all the members elected to each house, as provided 
by Section 39, Article III, Texas Constitution.  If this Act does 
not receive the vote necessary for immediate effect, this Act takes 
effect September 1, 2003.