Vetoed by Governor Gavin Newsom

Vote Smart's Synopsis:

Vote to concur with house amendments and pass a bill that authorizes an evaluation of state tax expenditures.

Highlights:

• Establishes the California Tax Expenditure Review Board as an independent advisory body to comprehensively assess major tax expenditures and make recommendations to the legislature (Sec. 2).

• Authorizes the board to establish advisory committees involving members of the public (Sec. 2).

• Defines “major tax expenditure” as a tax expenditure that meets all of the following criteria (Sec. 2):

• The amount of revenue lost from the tax expenditure is equal to or greater than $1 billion in total over the preceding 10 fiscal years, and, as of January 1, 2020, does not have a repeal or inoperative date, or a requirement to report any metrics of efficacy;

• Is not a sales and use tax exemption pursuant to Section 6353, 6359, 6369, or 6369.1;

• Is not allowed only against personal income tax imposed under Part 10 of Division 2;

• Is not authorized by Chapter 4 of Part 11 of Division 2;

• Is not allowed as a deduction under Section 17201 by conformity to Section 170 of the Internal Revenue Code (IRC) or Section 24357; and

• Is not excluded as income under the following:

• Section 17131 by conformity to Section 1010 of the IRC, as modified by Section 17132.5;

• Section 17081 by conformity to Section 72 of the IRC, as modified by 17085;

• Section 24302; and

• Section 24305.

• Authorizes the legislature to request that the Regents of the University of California, through a new or existing research center, to perform a comprehensive assessment of major tax expenditures, including, but not limited to (Sec. 3):

• A description of the beneficiaries of the tax expenditure;

• Total General Fund dollars lost due to the tax expenditure;

• The economic, social, environmental, or any other impact of the tax expenditure to the state using metrics deemed appropriate by the University of California; and

• Options for modifying the tax expenditure to improve its efficacy or to reduce its costs to the General Fund.

• Requires the board, within 5  business days after receiving this assessment, to post it on its internet website (Sec. 3).

• Requires the board, no earlier than 14 days and no later than 2 months following the posting of the assessment online, to meet in public to vote on making a recommendation to the legislature concerning the major tax expenditure (Sec. 3).

• Requires the board, by January 1, 2022, to provide a report to the legislature including all of its recommendations concerning major tax expenditures (Sec. 3).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass an amended bill that authorizes an evaluation of state tax expenditures.

Highlights:

• Establishes the California Tax Expenditure Review Board as an independent advisory body to comprehensively assess major tax expenditures and make recommendations to the legislature (Sec. 2).

• Authorizes the board to establish advisory committees involving members of the public (Sec. 2).

• Defines “major tax expenditure” as a tax expenditure that meets all of the following criteria (Sec. 2):

• The amount of revenue lost from the tax expenditure is equal to or greater than $1 billion in total over the preceding 10 fiscal years, and, as of January 1, 2020, does not have a repeal or inoperative date, or a requirement to report any metrics of efficacy;

• Is not a sales and use tax exemption pursuant to Section 6353, 6359, 6369, or 6369.1;

• Is not allowed only against personal income tax imposed under Part 10 of Division 2;

• Is not authorized by Chapter 4 of Part 11 of Division 2;

• Is not allowed as a deduction under Section 17201 by conformity to Section 170 of the Internal Revenue Code (IRC) or Section 24357; and

• Is not excluded as income under the following:

• Section 17131 by conformity to Section 1010 of the IRC, as modified by Section 17132.5;

• Section 17081 by conformity to Section 72 of the IRC, as modified by 17085;

• Section 24302; and

• Section 24305.

• Authorizes the legislature to request that the Regents of the University of California, through a new or existing research center, to perform a comprehensive assessment of major tax expenditures, including, but not limited to (Sec. 3):

• A description of the beneficiaries of the tax expenditure;

• Total General Fund dollars lost due to the tax expenditure;

• The economic, social, environmental, or any other impact of the tax expenditure to the state using metrics deemed appropriate by the University of California; and

• Options for modifying the tax expenditure to improve its efficacy or to reduce its costs to the General Fund.

• Requires the board, within 5  business days after receiving this assessment, to post it on its internet website (Sec. 3).

• Requires the board, no earlier than 14 days and no later than 2 months following the posting of the assessment online, to meet in public to vote on making a recommendation to the legislature concerning the major tax expenditure (Sec. 3).

• Requires the board, by January 1, 2022, to provide a report to the legislature including all of its recommendations concerning major tax expenditures (Sec. 3).

Full Bill Text