Bill Text: CA AB2641 | 2009-2010 | Regular Session | Amended

California Assembly Bill 2641 (Prior Session Legislation)

Bill Title: Tax expenditures.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2010-05-28 - In committee: Set, second hearing. Held under submission. [AB2641 Detail]

Download: California-2009-AB2641-Amended.html

BILL NUMBER: AB 2641	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 27, 2010
	AMENDED IN ASSEMBLY  APRIL 13, 2010

INTRODUCED BY   Assembly Member Arambula
   (Coauthor: Assembly Member Solorio)

                        FEBRUARY 19, 2010

   An act to add Section 41 to the Revenue and Taxation Code,
relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2641, as amended, Arambula. Tax expenditures.
   Existing laws imposes various taxes and allows specified credits,
deductions, exclusions, and exemptions in computing those taxes.
Existing law requires the Department of Finance to provide an annual
report to the Legislature on tax expenditures by no later than
September 15 of each year, and requires that annual report to
include, among other things, a comprehensive list of tax expenditures
exceeding $5,000,000 in annual cost.
   This bill would require the Legislature, on and after January 1,
2014, to review each "tax expenditure subject to limitation" and each
"tax expenditure not subject to  limitation",  
limitation,"  as defined, for the purpose of ensuring that only
tax expenditures with a measurable benefit  ,   as
defined,  are provided by the state. The bill would require the
Legislature, based on the information from the review, to assess
whether each tax expenditure not subject to limitation meets stated
objectives and for each not meeting its objectives, to restrict or
eliminate that tax expenditure not subject to limitation in
accordance with specified procedures. The bill would specify that
each tax expenditure subject to limitation shall cease to be
operative and shall be repealed on January  1, 2015, and on
January 1 of every 5th year thereafter   1 of the 5th
calendar year after th   e calendar year of enactment 
.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 41 is added to the Revenue and Taxation Code,
to read:
   41.  (a) On and before January 1, 2014, and every fifth year
thereafter, notwithstanding any other law, the Legislature shall
review each tax expenditure subject to limitation and each tax
expenditure not subject to limitation, for the purpose of ensuring
that only tax expenditures with a measurable benefit are provided by
the state. The review shall include, but not be limited to, all of
the information required pursuant to subdivision (a) of Section 13305
of the Government Code, except that the list required pursuant to
paragraph (1) of subdivision (a) of Section 13305 shall be provided
for all tax expenditures, regardless of the annual cost of the tax
expenditure.
   (b) (1) Based on the information contained in the review, the
Legislature shall assess whether each tax expenditure not subject to
limitation meets the objectives provided in the statute adding or
amending that tax expenditure and provides a measurable benefit.
   (2) For each tax expenditure not subject to limitation that fails
to meet the objectives provided, the Legislature shall determine
whether to restrict or eliminate that tax expenditure not subject to
limitation.
   (3) If the Legislature chooses to restrict or eliminate a tax
expenditure not subject to limitation pursuant to paragraph (2), it
shall do so by enacting a statute in which any expected revenue
increase resulting from that restriction or elimination is offset by
another tax expenditure or multiple tax expenditures of an amount
equal to or greater than the expected tax increase resulting from
that tax expenditure not subject to limitation, so as to ensure that
the statute is revenue neutral.
   (c) Each tax expenditure subject to limitation shall cease to be
 operative and shall be repealed on January 1, 2015, and on
January 1 of every fifth year thereafter,   operative
and shall be repealed on January 1 of the fifth calendar year after
the calendar year of enactment,  unless a later enacted statute
that is enacted before that date deletes or extends the date on which
it becomes inoperative and is repealed.
   (d) For purposes of this section, the following definitions apply:

   (1) "Measurable benefit" means a metric that can quantify the
measurable social, economic, or other public benefit to the state
attributable to the tax expenditure.  
   (1) 
    (2)  "Tax expenditure subject to limitation" means any
credit, deduction, exclusion, exemption, or any other tax benefit
provided by the state that is enacted on or after the effective date
of this section. 
   (2) 
    (3)  "Tax expenditure not subject to limitation" means
any credit, deduction, exclusion, exemption, or any other tax benefit
provided by the state that was enacted prior to the effective date
of this section.