Bill Text: OH HB446 | 2011-2012 | 129th General Assembly | Introduced

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Bill Title: To provide for an appraisal of the effectiveness of tax expenditures.

Spectrum: Moderate Partisan Bill (Democrat 14-3)

Status: (Introduced - Dead) 2012-02-08 - To Finance & Appropriations [HB446 Detail]

Download: Ohio-2011-HB446-Introduced.html

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As Introduced

129th General Assembly Regular Session 2011-2012

H. B. No. 446

Representatives Driehaus, Foley 

Cosponsors: Representatives Blair, Hagan, R., Goyal, Antonio, Garland, Boyd, Letson, Ramos, Okey, Stinziano, Yuko, Murray, Williams, Goodwin, Henne 

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A BILL

To enact sections 5703.95, 5703.951, 5703.952,

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5703.953, and 5703.954 of the Revised Code to

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provide for an appraisal of the effectiveness of

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tax expenditures.

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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 5703.95, 5703.951, 5703.952,	5
5703.953, and 5703.954 of the Revised Code be enacted to read as	6
follows:	7

Sec. 5703.95. (A) As used in this section and sections	8
5703.951 to 5703.954 of the Revised Code:	9

(1) "Tax expenditure" has the same meaning as in section	10
5703.48 of the Revised Code.	11

(2) "Tax expenditure review committee" means the committee	12
created under section 5703.954 of the Revised Code.	13

(B) The tax expenditure review committee shall review all tax	14
expenditures created in the Revised Code once every two years. For	15
tax expenditures created before April 15, 2012, the committee	16
shall review one-half of such tax expenditures in every	17
even-numbered year and one-half of such tax expenditures in every	18
odd-numbered year. The committee shall review tax expenditures	19
created on or after April 15, 2012, according to the following	20
schedule:	21

(1) Tax expenditures created in an even-numbered year shall	22
be reviewed in every subsequent even-numbered year.	23

(2) Tax expenditures created in an odd-numbered year shall be	24
reviewed in every subsequent odd-numbered year.	25

For the purposes of this section, a tax expenditure is	26
created on the effective date of the amendment or enactment of the	27
section of the Revised Code that authorizes the tax expenditure.	28

Sec. 5703.951. (A) The tax expenditure review committee shall	29
hold at least one public hearing on a tax expenditure in each year	30
in which the tax expenditure is scheduled for review under section	31
5703.95 of the Revised Code. The tax commissioner shall publish a	32
notice of all such public hearings in the register of Ohio. During	33
the public hearing on a tax expenditure, the committee shall allow	34
any person to present testimony or evidence relevant to that tax	35
expenditure.	36

(B) On or before the date of the public hearing scheduled for	37
a tax expenditure under division (A) of this section, the tax	38
commissioner, and any other state official responsible for	39
administering the tax expenditure, shall submit to the committee a	40
report that does each of the following:	41

(1) Explains the tax expenditure's purpose;

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(2) Expresses an opinion as to the public need for the tax	43
expenditure;	44

(3) Expresses an opinion as to whether the tax expenditure	45
has been impeded or enhanced by existing statutes;	46

(4) Describes how, if at all, the tax expenditure promotes	47
economic growth and development;	48

(5) Provides an estimate of the amount of tax revenue forgone	49
each fiscal year as a result of the tax expenditure;	50

(6) Expresses an opinion as to whether the tax expenditure	51
should be repealed;	52

(7) Contains any other information relevant to the	53
committee's appraisal of the tax expenditure.	54

(C) Each year, beginning in 2012, the legislative service	55
commission shall prepare and submit to the committee a report that	56
describes each tax expenditure created in the Revised Code,	57
identifies the tax expenditure's intended purpose, and, if	58
applicable, appraises the tax expenditure's effectiveness using	59
the methods prescribed in the act creating the tax expenditure.	60

(D) After the public hearing on a tax expenditure, the	61
committee shall appraise the tax expenditure. In making its	62
appraisal, the committee shall consider the reports submitted	63
under divisions (B) and (C) of this section and knowledge gleaned	64
from the hearing, but is not limited to those sources. Upon the	65
committee's request, the department of taxation, the office of	66
budget and management, and any other state agency shall provide	67
the committee with any information in its possession that the	68
committee requires to appraise the tax expenditure. The	69
legislative service commission shall provide drafting and clerical	70
support to the committee.	71

Sec. 5703.952.  On or before the first day of November of	72
each year in which a tax expenditure is scheduled for review, the	73
tax expenditure review committee shall prepare a report of its	74
appraisal of the tax expenditure that contains all of the	75
following:	76

(A) A statement of the purpose served by the tax expenditure;

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(B) An appraisal of the tax expenditure's effectiveness in	78
serving its purpose;	79

(C) An evaluation of whether the tax expenditure's purpose	80
serves a public need;	81

(D) An evaluation of whether other statutes have enhanced or	82
impeded the tax expenditure's effectiveness in serving its	83
purpose;	84

(E) An appraisal of whether the tax expenditure promotes	85
economic growth and development;	86

(F) An estimate of the amount of revenue lost each fiscal	87
year because of the tax expenditure;	88

(G) A recommendation as to whether the tax expenditure should	89
be repealed;	90

(H) Any other information the committee considers relevant.

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In an appendix to its report, the committee may include a	92
draft of a bill that would improve the tax expenditure's	93
effectiveness in serving its purpose; redefine the tax	94
expenditure's purpose to serve or better serve a public need;	95
retain or improve the statutes that enhance, or amend or repeal	96
statutes that impede, the tax expenditure's effectiveness in	97
serving its purpose; improve the tax expenditure's effectiveness	98
in promoting economic growth and development; reduce the amount of	99
revenue lost as a result of the tax expenditure; or repeal the tax	100
expenditure.	101

The committee shall provide a copy of the report to the	102
governor and to each member of the general assembly. The report is	103
a public record.	104

Sec. 5703.953. An act creating a tax expenditure shall	105
specify all of the following:	106

(A) The purpose served by the tax expenditure;

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(B) Whether the tax expenditure shall be reviewed in every	108
even-numbered or odd-numbered year under section 5703.95 of the	109
Revised Code;	110

(C) The class of taxpayers that will benefit from the tax	111
expenditure;	112

(D) Methods to be used to appraise the tax expenditure's	113
effectiveness in serving its purpose.	114

Division (D) of this section may be fulfilled by applying	115
general statutes or by enacting statutory provisions that apply	116
particularly to the tax expenditure.	117

Sec. 5703.954. There is hereby created the tax expenditure	118
review committee composed of seven members. The president of the	119
senate, within fifteen days after the first day of the first	120
regular session of the general assembly, shall appoint two members	121
of the senate to the committee, one from each political party. The	122
speaker of the house of representatives, within fifteen days after	123
the first day of the first regular session of the general	124
assembly, shall appoint two members of the house of	125
representatives to the committee, one from each political party.	126
The governor, within fifteen days after the first day of the first	127
regular session of the general assembly and with the advice and	128
consent of the senate, shall appoint one member to the committee.	129
The tax commissioner and the director of budget and management or	130
their designees shall be ex officio, nonvoting members.	131

A legislative member of the committee shall continue as a	132
member until the member's successor is appointed or until the	133
member ceases to be a member of the senate or house of	134
representatives, whichever is earlier. The member appointed by the	135
governor shall continue to be a member for a term ending on the	136
thirty-first day of December of each even-numbered year. The	137
member appointed by the governor continues to be a member after	138
the expiration of the member's term until the member's successor	139
is appointed, or until thirty days have elapsed, whichever occurs	140
first.	141

In the first regular session of the general assembly, the	142
committee shall elect one of the members appointed from the house	143
of representatives as chairperson of the committee and one of the	144
members appointed from the senate as vice-chairperson of the	145
committee. In the second regular session of the general assembly,	146
the committee shall elect one of the members appointed from the	147
senate as chairperson of the committee and one of the members	148
appointed from the house of representatives as vice-chairperson of	149
the committee.	150

A vacancy on the committee shall be filled in the same manner	151
as the original appointment. A member appointed to fill a vacancy	152
occurring prior to the expiration of the term to which the	153
member's predecessor was appointed shall continue as a member for	154
the remainder of the unexpired term.	155

Members of the committee shall serve without compensation,	156
but shall be reimbursed for actual and necessary expenses they	157
incur in performance of their duties.	158

The committee shall meet as often as necessary to perform its	159
duties.	160

Three voting members of the committee constitute a quorum.	161
The committee shall not take any action without the concurrence of	162
at least three voting members. So long as a quorum is present, a	163
vacancy on the committee does not impair the ability of the	164
remaining members to perform the committee's duties.	165

Section 2. The Tax Commissioner shall prepare a list of the	166
tax expenditures, as defined in section 5703.95 of the Revised	167
Code, as enacted by this act, in existence on April 15, 2012, and	168
shall provide a copy of the list to the chairperson of the Tax	169
Expenditure Review Committee created by section 5703.954 of the	170
Revised Code, as enacted by this act. The Committee thereupon	171
shall prepare a schedule under section 5703.95 of the Revised	172
Code, as enacted by this act, for appraising one-half of the	173
listed tax expenditures so that the appraisal and the report	174
required for those tax expenditures under section 5703.952 of the	175
Revised Code, as enacted by this act, will be completed not later	176
than November 1, 2012. The schedule shall provide for the	177
appraisal of the remaining tax expenditures during the 2013	178
calendar year, in accordance with section 5703.95 of the Revised	179
Code, as enacted by this act.	180

Section 3. (A) Not later than thirty days after the effective	181
date of this act, the Governor, with the advice and consent of the	182
Senate, shall make the Governor's initial appointment to the Tax	183
Expenditure Review Committee under section 5703.954 of the Revised	184
Code, as enacted by this act. The member thus appointed shall be a	185
member for a term ending on December 31, 2012. Thereafter, the	186
gubernatorial appointment and term shall be as prescribed in that	187
section.	188

(B) Not later than thirty days after the effective date of	189
this act, the President of the Senate and the Speaker of the House	190
of Representatives each shall make their initial appointments to	191
the Tax Expenditure Review Committee under section 5703.954 of the	192
Revised Code. The members thus appointed shall be members for	193
terms ending as prescribed in that section.	194