84R2822 TJB-D
 
  By: Dutton H.B. No. 2378
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to a periodic review and expiration dates 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 an abatement, credit,
  discount, exclusion, exemption, limitation on appraised value,
  refund, special valuation, special accounting treatment, special
  appraisal method or provision, special rate, or special method of
  reporting authorized by state law or the state constitution that
  relates to a state or local tax imposed in this state.
  SUBCHAPTER B. SELECT COMMISSION ON PERIODIC TAX PREFERENCE REVIEW
         Sec. 320A.051.  COMPOSITION OF COMMISSION. The select
  commission on periodic tax preference review is composed of:
               (1)  five members of the house of representatives,
  appointed by the speaker of the house of representatives;
               (2)  five members of the senate, appointed by the
  lieutenant governor; and
               (3)  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 or the
  individual's successor 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 to assist the commission in
  performing the commission's 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.
  SUBCHAPTER C.  POWERS AND DUTIES OF COMMISSION
         Sec. 320A.101.  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 six-year period; and
               (3)  specifically identify on the schedule:
                     (A)  each of the tax preferences the commission
  must review for purposes of the next report due under Section
  320A.153;
                     (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; and
                     (C)  the components of the review specified by
  Section 320A.104 that the commission recommends are unnecessary
  with respect to a tax preference recommended for an abbreviated
  review.
         (b)  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, except that the
  commission may schedule the initial review of a tax preference 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 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.102.  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.101. The
  commission shall consider those comments in developing or revising
  the schedule.
         Sec. 320A.103.  COMPLETION OF SCHEDULE. The state and local
  tax preference review schedule must be completed not later than
  December 1 of each odd-numbered year.
         Sec. 320A.104.  PERIODIC REVIEW OF STATE AND LOCAL TAX
  PREFERENCES. The commission shall review each state tax preference
  and each type of local tax preference according to the state and
  local tax preference review schedule developed under Section
  320A.101. In reviewing a tax preference, the commission 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 intended purpose of the tax
  preference could be accomplished through a more cost-effective
  method; and
                     (C)  the effect of the tax preference on economic
  development in this state.
  SUBCHAPTER D. RECOMMENDATIONS REGARDING REVIEWED TAX PREFERENCES
         Sec. 320A.151.  PRELIMINARY REPORT. Not later than
  September 1 of each even-numbered year, the commission shall file a
  preliminary report on the reviews of tax preferences identified
  under Section 320A.101(a)(3)(A) with the senate finance committee
  and the house ways and means committee. The report must include
  drafts of any proposed legislation needed to implement the
  commission's recommendations.
         Sec. 320A.152.  REVIEW AND COMMENT. The senate finance
  committee and the house ways and means committee may review the
  preliminary report and proposed legislation and submit comments to
  the commission. Comments must be submitted not later than October
  15 of each even-numbered year.
         Sec. 320A.153.  FINAL REPORT. (a) The commission may modify
  the preliminary report and proposed legislation in response to the
  comments received under Section 320A.152.
         (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.101(a)(3)(A) and proposed
  legislation necessary to implement the commission's
  recommendations.
         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.
  SUBCHAPTER E. EXPIRATION OF TAX PREFERENCES
         Sec. 320A.201.  EXPIRATION; REQUIRED STATEMENT. (a)  A tax
  preference included in a final report expires on the second
  anniversary of the date the final report is submitted under Section
  320A.153(b) unless reauthorized by law.
         (b)  Each tax preference enacted or reauthorized by an act of
  the legislature that becomes law on or after September 1, 2016, must
  state the expiration date of the preference and provide that the
  preference expires on that date. The expiration date may not be
  later than the sixth anniversary of the effective date of the law
  enacting or reauthorizing the tax preference.
         (c)  A tax preference to which Subsection (b) applies that
  does not include the provision required by that subsection expires
  on the sixth anniversary of the effective date of the law enacting
  or reauthorizing the preference.
         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
  January 5, 2016. Notwithstanding Section 320A.052, Government
  Code, as added by this Act, the terms of the initial members of the
  commission expire December 31, 2016.
         SECTION 3.  Notwithstanding Section 320A.103, Government
  Code, as added by this Act, the select commission on periodic tax
  preference review shall submit:
               (1)  the initial state and local tax preference review
  schedule required by that section not later than January 15, 2016;
               (2)  the initial preliminary report required by Section
  320A.151, Government Code, as added by this Act, not later than
  September 1, 2016; and
               (3)  the initial final report required by Section
  320A.153, Government Code, as added by this Act, not later than
  December 1, 2016.
         SECTION 4.  This Act takes effect January 1, 2016, but only
  if the constitutional amendment proposed by the 84th Legislature,
  Regular Session, 2015, requiring the legislature to provide for a
  periodic review of state and local tax preferences and providing
  for the expiration of certain tax preferences six years after the
  effective dates of the laws enacting or reauthorizing the
  preferences, or at another time prescribed by the legislature,
  unless reauthorized by law, is approved by the voters. If that
  amendment is not approved by the voters, this Act has no effect.