81R8224 KLA-D

By: Villarreal H.B. No. 1402

A BILL TO BE ENTITLED

AN ACT

relating to a periodic review of state and local taxes.

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 TAXES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 320A.001. DEFINITIONS. In this chapter:

(1) "Commission" means the select commission on periodic tax review.

(2) "Committee" means the joint legislative tax review committee.

[Sections 320A.002-320A.050 reserved for expansion]

SUBCHAPTER B. SCHEDULE FOR PERIODIC REVIEW OF STATE AND LOCAL TAXES

Sec. 320A.051. SELECT COMMISSION ON PERIODIC TAX REVIEW. The select commission on periodic tax review is composed of:

(1) three members of the house of representatives, appointed by the speaker of the house of representatives, one of whom must be the individual selected under Section 320A.104(a) to serve as the chair of the committee;

(2) three members of the senate, appointed by the lieutenant governor;

(3) eight public members representing the geographic and cultural diversity of this state, of which:

(A) four are appointed by the governor;

(B) two are appointed by the lieutenant governor; and

(C) two are appointed by the speaker of the house of representatives; and

(4) the comptroller.

Sec. 320A.052. TERMS. The members of the commission serve two-year terms that expire December 31 of each even-numbered year.

Sec. 320A.053. VACANCY. If a vacancy occurs, the individual who originally appointed the vacating member shall appoint an individual to fill the vacancy for the remainder of the unexpired term.

Sec. 320A.054. OFFICERS. (a) The speaker of the house of representatives shall select one member of the commission appointed under Section 320A.051(1) to serve as chair of the commission.

(b) The lieutenant governor shall select one member of the commission appointed under Section 320A.051(2) to serve as vice chair of the commission.

Sec. 320A.055. MEETINGS. The commission shall meet at the call of the chair.

Sec. 320A.056. STAFF. On the commission's request:

(1) the committee shall provide committee staff to assist the commission in performing the commission's duties; and

(2) the Legislative Budget Board, the Texas Legislative Council, the office of the governor, the comptroller, the senate, and the house of representatives shall provide other staff necessary to assist in performing those duties.

Sec. 320A.057. COOPERATION BY OTHER STATE ENTITIES. The commission may request the assistance of any state agency, department, or office if the commission needs assistance to perform the commission's duties. The agency, department, or office shall provide the requested assistance.

Sec. 320A.058. EXPENSES. The operating expenses of the commission shall be paid from available funds of the office of the governor and the contingent expense funds of the senate and the house of representatives, as agreed by those entities. The commission members are entitled to reimbursement from those funds for expenses incurred by the members in implementing this chapter.

Sec. 320A.059. DEVELOPMENT AND BIENNIAL MODIFICATION OF STATE AND LOCAL TAX REVIEW SCHEDULE. (a) The commission shall:

(1) identify each state tax imposed in this state and each type of local tax imposed in this state authorized by state law;

(2) develop a state and local tax review schedule under which each identified tax is reviewed once during each 12-year period; and

(3) specifically identify on the schedule:

(A) each of the taxes the committee must review for purposes of the next report due under Section 320A.153;

(B) any tax described by Paragraph (A) the total revenue of which did not exceed $10 million during the most recent state fiscal biennium and that the commission recommends for an abbreviated review by the committee; and

(C) the components of the review specified by Section 320A.109 that the commission recommends are unnecessary with respect to a tax recommended for an abbreviated review.

(b) In developing the schedule, the commission shall schedule the taxes for review in the order in which the taxes were enacted or authorized, except that the commission may schedule the initial review of a tax that has an expiration date for any date the commission determines is appropriate.

(c) The commission shall revise the schedule biennially only to:

(1) add to the schedule a tax that was enacted or authorized after the commission developed the most recent schedule;

(2) delete from the schedule a tax that was repealed after the commission developed the most recent schedule;

(3) update the review dates of the taxes for which reviews were conducted after the commission developed the most recent schedule; and

(4) update the taxes identified under Subsection (a)(3).

Sec. 320A.060. PUBLIC COMMENT. The commission shall provide a process by which the public may comment on the state and local tax review schedule under Section 320A.059. The commission shall consider those comments in developing or revising the schedule.

Sec. 320A.061. SCHEDULE PROVIDED TO COMMITTEE. Not later than December 1 of each odd-numbered year, the commission shall provide the state and local tax review schedule to the committee.

[Sections 320A.062-320A.100 reserved for expansion]

SUBCHAPTER C. CONDUCT OF REVIEW OF STATE AND LOCAL TAXES

Sec. 320A.101. JOINT LEGISLATIVE TAX REVIEW COMMITTEE. The joint legislative tax review committee is composed of the following:

(1) six members of the house of representatives, appointed by the speaker of the house of representatives; and

(2) six members of the senate, appointed by the lieutenant governor.

Sec. 320A.102. TERMS. The members of the committee serve two-year terms that expire December 31 of each even-numbered year.

Sec. 320A.103. VACANCY. If a vacancy occurs, the individual who originally appointed the vacating member shall appoint an individual to fill the vacancy for the remainder of the unexpired term.

Sec. 320A.104. OFFICERS. (a) The speaker of the house of representatives shall select one member of the committee appointed under Section 320A.101(1) to serve as chair of the committee.

(b) The lieutenant governor shall select one member of the committee appointed under Section 320A.101(2) to serve as vice chair of the committee.

Sec. 320A.105. MEETINGS. The committee shall meet at least once each calendar quarter and at other times at the call of the chair.

Sec. 320A.106. STAFF. (a) The committee may hire staff as the committee determines necessary.

(b) On the committee's request, the Legislative Budget Board, the Texas Legislative Council, the office of the governor, the comptroller, the senate, and the house of representatives shall provide other staff necessary for the committee to perform the committee's duties.

Sec. 320A.107. COOPERATION BY OTHER STATE ENTITIES. The committee may request the assistance of any state agency, department, or office if the committee needs assistance to perform the committee's duties. The agency, department, or office shall provide the requested assistance.

Sec. 320A.108. EXPENSES. The operating expenses of the committee shall be paid from available funds of the office of the governor and the contingent expense funds of the senate and the house of representatives, as agreed by those entities. The committee members are entitled to reimbursement from those funds for expenses incurred by the members in implementing this chapter.

Sec. 320A.109. PERIODIC REVIEW OF STATE AND LOCAL TAXES. The committee shall periodically review each state tax imposed in this state and each type of local tax imposed in this state authorized by state law according to the state and local tax review schedule provided by the commission under Section 320A.061. In reviewing a tax, the committee shall:

(1) evaluate the impact of the tax and the expenditures of the tax revenue on economic development in this state;

(2) examine the relationship between:

(A) the tax and other revenue sources and the revenue needs of the state government and local governments, with particular consideration given to projected demographic trends in this state; and

(B) the tax burden imposed on taxpayers, categorized by household income level or business sector, as applicable, and the benefits those taxpayers receive from government expenditures in this state;

(3) develop recommendations for retaining or repealing the tax or for amending a provision related to the tax; and

(4) make recommendations for retaining, repealing, or amending a credit, exemption, discount, exclusion, special valuation, special accounting treatment, special rate, or special method of reporting related to the tax.

[Sections 320A.110-320A.150 reserved for expansion]

SUBCHAPTER D. RECOMMENDATIONS REGARDING REVIEWED TAXES

Sec. 320A.151. PRELIMINARY REPORT. Not later than September 1 of each even-numbered year, the committee shall provide to the commission a preliminary report on the reviews of taxes identified under Section 320A.059(a)(3)(A). The report must include drafts of any proposed legislation needed to implement the committee's recommendations.

Sec. 320A.152. COMMISSION REVIEW AND COMMENT. The commission may review the preliminary report and proposed legislation and submit comments to the committee. The commission shall submit the comments not later than October 15 of each even-numbered year.

Sec. 320A.153. FINAL REPORT. (a) The committee may modify the preliminary report and proposed legislation provided to the commission under Section 320A.151 in response to the commission's comments.

(b) Not later than December 1 of each even-numbered year, the committee shall provide to the governor and the presiding officers of the senate finance committee and the house ways and means committee a final report on the reviews of taxes identified under Section 320A.059(a)(3)(A) and proposed legislation necessary to implement the committee's recommendations. The committee shall include with the final report any comments received from the commission under Section 320A.152.

Sec. 320A.154. PUBLIC HEARING ON FINAL REPORT. The senate finance committee and the house ways and means committee shall hold a joint public hearing on the final report and proposed legislation provided under Section 320A.153.

SECTION 2. The governor, the lieutenant governor, and the speaker of the house of representatives shall appoint the initial members of the joint legislative tax review committee not later than September 1, 2009. The governor, the lieutenant governor, and the speaker of the house of representatives shall appoint the initial members of the select commission on periodic tax review not later than October 1, 2009. Notwithstanding Sections 320A.052 and 320A.102, Government Code, as added by this Act, the terms of the initial members of the commission and the committee expire December 31, 2010.

SECTION 3. Notwithstanding Section 320A.061, Government Code, as added by this Act, the select commission on periodic tax review shall submit the initial state and local tax review schedule required by that section not later than January 15, 2010.

SECTION 4. The joint legislative tax review committee shall submit:

(1) the initial preliminary report required by Section 320A.151, Government Code, as added by this Act, not later than September 1, 2010; and

(2) the initial final report required by Section 320A.153, Government Code, as added by this Act, not later than December 1, 2010.

SECTION 5. 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, 2009.