HOUSE DOCKET, NO. 2737        FILED ON: 1/21/2011

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2540

The Commonwealth of Massachusetts

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PRESENTED BY:

Jay R. Kaufman

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relative to the tax expenditure budget.

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PETITION OF:

HOUSE DOCKET, NO. 2737        FILED ON: 1/21/2011

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2540

The Commonwealth of Massachusetts

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In the Year Two Thousand Eleven

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An Act relative to the tax expenditure budget.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

SECTION 1:  Section 5B of Chapter 29 of the General Laws is hereby amended by inserting after the fifth paragraph the following:

    Notwithstanding any general law to the contrary there shall be established a standing commission that shall review and evaluate all tax expenditures, as defined in Section 1 of Chapter 29 of the General Laws, and make recommendations to the General Court on the effectiveness, timeliness, and cost benefit analysis of said tax expenditures.

    The commission shall be comprised of the Secretary of Administration and Finance or his or her designee, the Speaker of the House or his or her designee, the Senate President or his or her designee, the Chair of the House Ways and Means Committee or his or her designee, the Chair of the Senate Ways and Means Committee or his or her designee, the House and Senate chairs of the Joint Committee on Revenue or his or her designee, the House minority leader or his or her designee, and the Senate minority leader or his or her designee. 

    The commission shall conduct its evaluation and report findings to the General Court by December 31 of each year as part of an ongoing 3 year cycle beginning with a review of tax expenditures under Chapter 64H in year 1, Chapter 62 in year 2 and Chapter 63 in year 3, beginning on or before January 1, 2012.   

SECTION 2:  Chapter 62 of the General Laws is hereby amended by inserting a new section after Section 64 with the following:

(a)Tax expenditures, as defined by Section 1 of Chapter 29 of the General Laws, created by this chapter on or after January 1, 2011, shall include the following criteria upon passage:

(1)Stated public policy objective for said tax expenditure including, but not limited to, the intended impact of the expenditure with estimates of both the cost and benefit to the Commonwealth

(2)Metrics the tax expenditure shall meet by the date referenced in paragraph (3) of this section

(3)Date by which the legislature shall review the tax expenditure to determine its effectiveness and its cost and benefit to the Commonwealth

(4)An evaluation that considers whether or not a sunset or clawback provision should be applied

(b) Any future expenditure must be matched by the repeal of one or more existing expenditures under Chapter 62 that constitutes a cost to the Commonwealth as determined by the annual tax expenditure estimates required by Section 5B of Chapter 29 of the General Laws that is equal to or exceeds the newly created tax expenditure.  For any unmatched elimination or reduction of expenditure under Chapter 62, the legislature shall consider a corresponding reduction in the rate, as defined by subsection (b) of Section 4 of Chapter 62. 

SECTION 3:  Chapter 63 of the General Laws is hereby amended by inserting a new section after Section 81 with the following:

(a) Tax expenditures, as defined by Section 1 of Chapter 29 of the General Laws, created by this chapter on or after January 1, 2011, shall include the following criteria upon passage:

(1)Stated public policy objective for said tax expenditure including, but not limited to, the intended impact of the expenditure with estimates of both the cost and benefit to the Commonwealth

(2)Metrics the tax expenditure shall meet by the date referenced in paragraph (3) of this section

(3)Date by which the legislature shall review the tax expenditure to determine its effectiveness and its cost and benefit to the Commonwealth

(4)An evaluation that considers whether or not a sunset or clawback provision should be applied

(b)Any future expenditure must be matched by the repeal of one or more existing expenditures under Chapter 63 that constitutes a cost to the Commonwealth as determined by the annual tax expenditure estimates required by Section 5B of Chapter 29 of the General Laws that is equal to or exceeds the newly created tax expenditure.  For any unmatched elimination or reduction of an expenditure under Chapter 63, the legislature shall consider a corresponding reduction in the rate, as defined by subsection (b) of Section 2 of Chapter 63. 

SECTION 4:  Chapter 64H of the General Laws is hereby amended by inserting a new section after Section 33 with the following:

(a)Tax expenditures, as defined by Section 1 of Chapter 29 of the General Laws, created by this chapter on or after January 1, 2011, shall include the following criteria upon passage:

(1)Stated public policy objective for said tax expenditure including, but not limited to, the intended impact of the expenditure with estimates of both the cost and benefit to the Commonwealth

(2)Metrics the tax expenditure shall meet by the date referenced in paragraph (3) of this section

(3)Date by which the legislature shall review the tax expenditure to determine its effectiveness and its cost and benefit to the Commonwealth

(4)An evaluation that considers whether or not a sunset or clawback provision should be applied

(b)Any future expenditure must be matched by the repeal of one or more existing expenditures under Chapter 64H that constitutes a cost to the Commonwealth as determined by the annual tax expenditure estimates required by Section 5B of Chapter 29 of the General Laws that is equal to or exceeds the newly created tax expenditure. For any unmatched elimination or reduction of an expenditure under Chapter 64H, the legislature shall consider a corresponding reduction in the rate, as defined by Section 2 of Chapter 64H. 

SECTION 5:Subsection (b)(4) of Section 14C of Chapter 7 of the General Laws is hereby amended by adding the following “(v) information required by Section 5B of Chapter 29 of the General Laws;”

SECTION 6: The sections of this bill shall take effect on January 1, 2012.