82R4650 CJC-D
 
  By: Ellis S.B. No. 1051
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to a periodic review of state and local tax preferences.
         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 TAX PREFERENCES
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 320A.001.  DEFINITIONS. In this chapter:
               (1)  "Commission" means the select commission on
  periodic tax preference review.
               (2)  "Tax preference" means a credit, discount,
  exclusion, exemption, refund, special valuation, special
  accounting treatment, special rate, or special method of reporting
  authorized by state law that relates to a state or local tax imposed
  in this state.
  [Sections 320A.002-320A.050 reserved for expansion]
  SUBCHAPTER B. SCHEDULE FOR PERIODIC REVIEW
  OF STATE AND LOCAL TAX PREFERENCES
         Sec. 320A.051.  SELECT COMMISSION ON PERIODIC TAX PREFERENCE
  REVIEW. The select commission on periodic tax preference review is
  composed of:
               (1)  three members of the house of representatives,
  appointed by the speaker of the house of representatives;
               (2)  three members of the senate, appointed by the
  lieutenant governor;
               (3)  eight public members representing the geographic
  and cultural diversity of this state, composed of the following:
                     (A)  four members appointed by the lieutenant
  governor, of which one is a representative of the business
  community in this state; and
                     (B)  four members appointed by the speaker of the
  house of representatives, of which one is a representative of the
  business community in this state and one is a representative of an
  organization that advocates for public policies that benefit
  low- and moderate-income families in this state; 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, the
  Legislative Budget Board, the Texas Legislative Council, the office
  of the governor, the comptroller, the senate, and the house of
  representatives shall provide staff as necessary to assist the
  commission in performing the commission's duties.
         Sec. 320A.057.  COOPERATION BY OTHER STATE ENTITIES.  The
  commission may request assistance from the comptroller or any other
  state agency, department, or office if the commission needs
  assistance to perform the commission's duties.  The comptroller or
  other agency, department, or office shall provide the requested
  assistance.
         Sec. 320A.058.  EXPENSES.  The operating expenses of the
  commission shall be paid from 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 PREFERENCE REVIEW SCHEDULE. (a)  The commission
  shall:
               (1)  identify each state tax preference and each type
  of local tax preference;
               (2)  develop a state and local tax preference review
  schedule under which each identified tax preference is reviewed
  once during each 12-year period; and
               (3)  specifically identify on the schedule:
                     (A)  each of the tax preferences the Legislative
  Budget Board must review for purposes of the next report due under
  Section 320A.151;
                     (B)  any tax preference described by Paragraph (A)
  that reduces by less than one-fourth of one percent the total
  revenue derived from the tax to which the tax preference applies and
  that the commission recommends for an abbreviated review by the
  Legislative Budget Board; and
                     (C)  the components of the review specified by
  Section 320A.101 that the commission recommends are unnecessary
  with respect to a tax preference recommended for an abbreviated
  review.
         (b)  Except as provided in Subsection (c), in developing the
  schedule, the commission shall schedule the tax preferences for
  review in the order in which the tax preferences were enacted or
  authorized.
         (c)  In developing the schedule, the commission may:
               (1)  schedule for review at the same time all tax
  preferences authorized in the same chapter of the Tax Code; and
               (2)  schedule the initial review of a tax preference
  that has an expiration date for any date the commission determines
  is appropriate.
         (d)  The commission shall revise the schedule biennially
  only to:
               (1)  add to the schedule a tax preference that was
  enacted or authorized after the commission developed the most
  recent schedule;
               (2)  delete from the schedule a tax preference that was
  repealed after the commission developed the most recent schedule;
               (3)  update the review dates of the tax preferences for
  which reviews were conducted after the commission developed the
  most recent schedule; and
               (4)  update the tax preferences 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 preference review schedule under Section 320A.059. The
  commission shall consider those comments in developing or revising
  the schedule.
         Sec. 320A.061.  SCHEDULE PROVIDED TO LEGISLATIVE BUDGET
  BOARD. Not later than December 1 of each odd-numbered year, the
  commission shall provide the state and local tax preference review
  schedule to the Legislative Budget Board.
  [Sections 320A.062-320A.100 reserved for expansion]
  SUBCHAPTER C. CONDUCT OF REVIEW OF STATE
  AND LOCAL TAX PREFERENCES
         Sec. 320A.101.  PERIODIC REVIEW OF TAX PREFERENCES. The
  Legislative Budget Board shall periodically review each state tax
  preference and each type of local tax preference according to the
  state and local tax preference review schedule provided by the
  commission under Section 320A.061. In reviewing a tax preference,
  the board shall:
               (1)  determine the intended purpose of the tax
  preference; and
               (2)  evaluate:
                     (A)  whether the tax preference accomplishes its
  intended purpose;
                     (B)  whether the tax preference is inefficient,
  ineffective, or unnecessary, or the intended purpose of the tax
  preference is a low priority for this state; and
                     (C)  the effect of the tax preference on economic
  development, the number of high wage jobs, funding for public
  services, the distribution of the tax burden by income class and
  industry or business class, and total income by income class in this
  state.
         Sec. 320A.102.  COOPERATION BY OTHER STATE ENTITIES. The
  Legislative Budget Board may request assistance from the
  comptroller or any other state agency, department, or office if the
  board needs assistance to perform the review required by Section
  320A.101.  The comptroller or other agency, department, or office
  shall provide the requested assistance.
  [Sections 320A.103-320A.150 reserved for expansion]
  SUBCHAPTER D. RECOMMENDATIONS REGARDING REVIEWED TAX PREFERENCES
         Sec. 320A.151.  PRELIMINARY REPORT. Not later than
  September 1 of each even-numbered year, the Legislative Budget
  Board shall provide to the commission a preliminary report on the
  reviews of tax preferences identified under Section
  320A.059(a)(3)(A). The report must include drafts of any proposed
  legislation needed to implement the board's recommendations.
         Sec. 320A.152.  FINAL REPORT. (a)  The commission shall
  review and may modify the preliminary report and proposed
  legislation provided to the commission under Section 320A.151.
         (b)  Not later than December 1 of each even-numbered year,
  the commission 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 tax preferences
  identified under Section 320A.059(a)(3)(A). The final report must
  include:
               (1)  as to each tax preference examined, whether the
  commission recommends:
                     (A)  continuing the tax preference;
                     (B)  amending a provision relating to the tax
  preference; or
                     (C)  repealing the tax preference;
               (2)  a complete explanation of each of the commission's
  recommendations;
               (3)  proposed legislation necessary to implement the
  findings of the final report; and
               (4)  a description of any deviations from the
  preliminary report provided under Section 320A.151 that are made by
  the final report, and a description of the reasons for each
  deviation.
         Sec. 320A.153.  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.152.
         SECTION 2.  The lieutenant governor and the speaker of the
  house of representatives shall appoint the initial members of the
  select commission on periodic tax preference review not later than
  October 1, 2011. Notwithstanding Section 320A.052, Government
  Code, as added by this Act, the terms of the initial members of the
  commission expire December 31, 2012.
         SECTION 3.  The select commission on periodic tax preference
  review shall:
               (1)  notwithstanding Section 320A.061, Government
  Code, as added by this Act, submit the initial state and local tax
  preference review schedule required under that section not later
  than January 15, 2012; and
               (2)  submit the initial final report required by
  Section 320A.152, Government Code, as added by this Act, not later
  than December 1, 2012.
         SECTION 4.  The Legislative Budget Board shall submit the
  initial preliminary report required by Section 320A.151,
  Government Code, as added by this Act, not later than September 1,
  2012.
         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, 2011.