HOUSE DOCKET, NO. 3660        FILED ON: 1/18/2019

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 3891


The Commonwealth of Massachusetts



Nika C. Elugardo


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 establishing oversight and accountability in the implementation of tax expenditure commission recommendations.






Nika C. Elugardo

15th Suffolk

Marcos A. Devers

16th Essex

Michelle M. DuBois

10th Plymouth

Denise Provost

27th Middlesex

Maria Duaime Robinson

6th Middlesex

Michael J. Soter

8th Worcester

Christine P. Barber

34th Middlesex

HOUSE DOCKET, NO. 3660        FILED ON: 1/18/2019

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 3891

By Ms. Elugardo of Boston, a petition (accompanied by bill, House, No. 3891) of Nika C. Elugardo and others for legislation to establish a permanent advisory commission (including members of the General Court) to investigate and study the maximizing of the Commonwealth’s return on investment for tax expenditures and to provide assessment, evaluation and measurement tools for tax expenditures.  Revenue.


The Commonwealth of Massachusetts



In the One Hundred and Ninety-First General Court



An Act establishing oversight and accountability in the implementation of tax expenditure commission recommendations.


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

Chapter 3 of the General Laws is hereby amended by inserting after section 38C the following section:-

Section 38D. (a) There is hereby established an advisory commission for maximizing the commonwealth’s return on investment for tax expenditures and providing assessment, evaluation and measurement tools for tax expenditures. The commission shall consist of 7 members of the senate, 1 of whom shall be appointed by the minority leader of the senate, and 8 members of the house of representatives, 1 of whom shall be appointed by the minority leader of the house of representatives. The commission shall include among its members no less than 7 legislators who are members of registered legislative member organizations that include in their purpose defining, highlighting and analyzing issues and concerns affecting people of color, women, sexual orientation or gender identity and persons with disabilities in Massachusetts.

(b) Beginning September 1, 2019, the commission shall evaluate, in a real world manner the return on investment for current and proposed tax expenditures in the commonwealth based on the findings of the 2012 Report of the Tax Expenditure Commission, the 2014 Report of the Tax Fairness Commission and the findings of this commission.

The commission shall review  tax expenditures and their benefits with a community, regional and statewide point of view. For each tax expenditure reviewed or proposed, the commission shall submit a report to the joint committee on revenue containing the results of the review. The report shall contain a statement of the policy goals of the tax expenditure and a return on investment calculation for the tax expenditure. The term "return on investment calculation" includes analyzing the cost to the state of providing the tax expenditure, analyzing the real world benefits realized by the commonwealth from providing the tax expenditure, the tax expeniture’s economic multiplier effect and the geographical need for tax benefits in local economies affected by poverty. The commission shall reach a conclusion as to whether the benefits of the tax expenditure are worth the cost to the commonwealth of providing the tax expenditure. For example, the commission may propose new tax expenditures that benefit the commonwealth’s judiciary and the state’s housing market by providing for a tax credit to attorneys who represent low-income tenants in rental housing cases. This tax expenditure benefits tenants, landlords, and the commonwealth by allowing the judiciary to produce more decisions expeditiously and reducing the cost of unrepresented litigants by reducing risks associated with a rental relationship.

(c) The commission’s review shall include, but not be limited to:

(i) The intended beneficiaries of the tax expenditure;

(ii) The demographics of recipients or beneficiaries of tax expenditures;

(iii) The local economic impact, including: direct effects of tax expenditures of business spending, indirect effects such as consumer and business spending in response to the tax expenditure and induced effects, such as changes in household income and spending patterns caused by direct and indirect effects. Together, these represent an economic multiplier effect of tax expenditures;

(iv) The purposes, objectives, measures over time, intent or goals of the tax expenditure, as informed by original legislative intent as well as subsequent legislative and policy developments and changes in the state economy and fiscal condition;

(iv) the return on investment of the tax expenditure, which may include an assessment of:

(A) The fiscal impact of the tax expenditure, including past and estimated future impacts;

(B) The economic multiplier effect calculation of return on investment

(C) The extent to which the design of the tax expenditure is effective in accomplishing the tax expenditure’s purposes, intent or goals;

(D) The extent to which those actually benefiting from the tax expenditure are the intended beneficiaries;

(E) The extent to which it is likely that the desired behavior might have occurred without the tax expenditure;

(F) The extent to which the commonwealth’s administration of the tax expenditure, including enforcement efforts, is efficient and effective. Inefficient and ineffective expenditures rated low will need assessment for amendment, repeal or sunset.

(G) The extent to which the tax expenditure is a cost-effective use of resources compared to other options for using the same resources or addressing the same purposes, intent or goals. For example, the commonwealth’s earned income tax credit expenditure enhances intergenerational income mobility for children by counteracting credit constraints many low-income families face. And with larger EITC expenditures low-income children are more likely to move up the income ladder over time.

(I) Any opportunities to improve the effectiveness of the tax expenditure in meeting its purposes, intent or goals; and

(J) The performance measures appropriate for analyzing the return on investment evaluation objectives, including outcome based measures. Performance measures shall include:

(1) measures that are clear and relevant to the specific tax expenditure and the approved evaluation objectives;

(2) example-based conversations and questions; and

(3) longitudinal, showing increased or decreased confidence in a tax expenditure.

(d) The commission shall seek and consider input from stakeholders and may seek input from experts.

(e) Members shall serve 2-year terms, coterminous with their service as elected members of the legislature. If a legislative member ceases to be a member of the legislature, the legislator’s position shall be declared vacant, and the balance of the term filled by another legislator appointed in the same manner as the previous appointee. If the president of the senate or the speaker of the house serves on the commission, service continues until resignation from the commission or until the individual ceases to hold the office.

(f) Members, other than the president of the senate and the speaker of the house, who serve a full term may not be appointed to an immediately succeeding term.

(g) The president of the senate and the speaker of the house shall make their appointments before September 1 of each odd-numbered year.

(h) Six members of the commission shall constitute a quorum. A final action or recommendation may not be made unless approved by a recorded roll call vote of a majority of members appointed by the president of the senate and the speaker of the house. All other actions by the commission shall be decided by a majority of the members present and voting, so long as a quorum is present.

(i) The commission shall:

(i) Consult with the chairs of the Joint committee on revenue;

(ii) Make recommendations for determining public policy purposes, return on investment and desired outcomes for existing and new tax expenditures;

(iii) Establish budget like categories for public policy tax expenditures in tax expenditure legislation;

(iv) Recommend joint rules setting forth what tax expenditure legislation shall include;

(v) Make legislative recommendations for tax expenditure process, measurement, administration and enforcement;

(vi) Require collection of data necessary for metrics and real world measurements; and

(vii) Work with other states regarding public policy and administration of tax expenditures.

(j) The advisory commission shall submit to the general court a report documenting its activities under this section and any recommendations resulting from its review. The commission shall prepare drafts of legislation to carry out the commission’s recommendations under this section. The commission may submit a bill to the next regular session of the general court to implement the advisory commissions’ recommendations.

(l) The joint committee on revenue when reporting favorably on tax expenditure bills referred to it shall include the review, evaluation and recommendations by the commission pursuant to this section.

(m) The commission shall present to the secretary of administration and finance, the commission’s recommendations that do not require a statutory change to be put into effect.

(n) Notwithstanding any law to the contrary, the commission may accept from any source any grant, donation, gift or other form of conveyance of land, money, other real or personal property or other item of value made to the commonwealth or the commission for expenditures carrying out the purpose of this section.