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H. B. No. 269 As IntroducedAs Introduced
127th General Assembly | Regular Session | 2007-2008 |
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Cosponsors:
Representatives DeGeeter, Dodd, Garrison, Hagan, R., Harwood, Healy, Letson, Lundy, McGregor, J., Otterman, Skindell, Strahorn, Ujvagi
A BILL
To enact sections 5703.95, 5703.951, 5703.952,
5703.953, 5703.954, 5703.955, 5703.956, and
5703.957 of the Revised Code to provide for an
appraisal of the effectiveness of tax expenditures
and for their expiration after appraisal if not
renewed.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 5703.95, 5703.951, 5703.952,
5703.953, 5703.954, 5703.955, 5703.956, and 5703.957 of the
Revised Code be enacted to read as follows:
Sec. 5703.95. (A) As used in this section and sections
5703.951 to 5703.956 of the Revised Code:
(1) "Tax expenditure" means a statutory provision, however
denominated, that exempts certain persons, activities,
dispositions, property, goods, or services, in whole or in part,
from the operation of a tax.
(2) "Tax expenditure sunset review committee" means the
committee created under section 5703.957 of the Revised Code.
(B) A tax expenditure created on or after April 15, 2008,
expires at the end of the thirty-first day of December of the
fifth year after the year in which it was created, unless, before
its expiration date, it is renewed under section 5703.952 of the
Revised Code. A tax expenditure does not apply to taxable years
that begin in the year the tax expenditure expires.
Sec. 5703.951. An act creating a tax expenditure shall
specify:
(A) The purpose served by the tax expenditure;
(B) The date on which the tax expenditure expires;
(C) The class of taxpayers that will benefit from the tax
expenditure; and
(D) Methods to be used to appraise the tax expenditure's
effectiveness in serving its purpose.
Division (D) of this section may be fulfilled by applying
general statutes or by enacting statutory provisions that apply
particularly to the tax expenditure.
Sec. 5703.952. The general assembly may renew a tax
expenditure by enacting an act that:
(A) Addresses only that subject;
(B) Fulfills all of the criteria in section 5703.951 of the
Revised Code, including specifying a new expiration date for the
tax expenditure; and
(C) Improves the tax expenditure's effectiveness in serving
its purpose; redefines the tax expenditure's purpose to serve or
better serve a public need; retains or improves the statutes that
enhance, or amends or repeals statutes that impede, the tax
expenditure's effectiveness in serving its purpose; improves the
tax expenditure's effectiveness in promoting economic growth and
development; reduces the amount of revenue lost as a result of the
tax expenditure; or re-enacts the tax expenditure to continue it
without change.
Housekeeping repeal of a tax expenditure that has expired
shall not be combined in an act renewing a tax expenditure.
Sec. 5703.953. Not later than the date that is twenty-four
months before a tax expenditure expires, the tax commissioner
shall notify the tax expenditure sunset review committee of the
tax expenditure's expiration. The committee thereupon shall
prepare a schedule for appraising the tax expenditure so that the
appraisal and the report required under section 5703.956 of the
Revised Code will be completed not later than the date that is
twelve months before the tax expenditure expires. The schedule
shall provide for a public hearing on the tax expenditure. The tax
commissioner shall publish the schedule in the register of Ohio.
Sec. 5703.954. (A) For each tax expenditure scheduled for
appraisal by the tax expenditure sunset review committee, the tax
commissioner, and any other state official responsible for
administering the tax expenditure, shall submit to the committee a
report that:
(1) Explains the tax expenditure's purpose;
(2) Expresses an opinion as to the public need for the tax
expenditure;
(3) Expresses an opinion as to whether the tax expenditure
has been impeded or enhanced by existing statutes;
(4) Describes how, if at all, the tax expenditure promotes
economic growth and development;
(5) Provides an estimate of the amount of tax revenue forgone
each fiscal year as a result of the tax expenditure;
(6) Expresses an opinion as to whether the tax expenditure
should be allowed to expire or be renewed;
(7) Contains any other information relevant to the
committee's appraisal of the tax expenditure.
The report shall be submitted to the committee on or before
the date scheduled for the tax expenditure's public hearing under
section 5703.953 of the Revised Code.
(B) Each year, beginning in 2008, the legislative service
commission shall prepare and submit to the committee a report that
describes each tax expenditure created on or after April 15, 2008,
or renewed under section 5703.952 of the Revised Code; identifies
the tax expenditure's intended purpose; and appraises the tax
expenditure's effectiveness using the methods prescribed in the
act creating the tax expenditure.
Sec. 5703.955. At the time and place specified in the
schedule prepared under section 5703.953 of the Revised Code, the
tax expenditure sunset review committee shall hold a public
hearing on the tax expenditure, at which any person may present
testimony or evidence relevant to the tax expenditure. After the
hearing, the committee shall appraise the tax expenditure. In
making its appraisal, the committee shall consider the reports
submitted under section 5703.954 of the Revised Code and knowledge
gleaned from the hearing, but is not limited to those sources.
Upon the committee's request, the department of taxation, office
of budget and management, and any other state agency shall provide
the committee with any information in its possession that the
committee requires to appraise the tax expenditure. The
legislative service commission shall provide drafting and clerical
support to the committee.
Sec. 5703.956. The tax expenditure sunset review committee
shall prepare a report of its appraisal of a tax expenditure that
contains:
(A) A statement of the purpose served by the tax expenditure;
(B) An appraisal of the tax expenditure's effectiveness in
serving its purpose;
(C) An evaluation of whether the tax expenditure's purpose
serves a public need;
(D) An evaluation of whether other statutes have enhanced or
impeded the tax expenditure's effectiveness in serving its
purpose;
(E) An appraisal of whether the tax expenditure promotes
economic growth and development;
(F) An estimate of the amount of revenue lost each fiscal
year because of the tax expenditure;
(G) A recommendation as to whether the tax expenditure should
be allowed to expire or be renewed; and
(H) Any other information the committee considers relevant.
In an appendix to its report, the committee shall include a
draft of a bill that would implement its recommendation under
division (G) of this section and, if the tax expenditure is
recommended for renewal, complies with the requirements of section
5703.952 of the Revised Code. If the committee recommends renewal
of the tax expenditure, the appendix shall include a commentary to
the bill draft explaining how renewal of the tax expenditure will
fulfill the criteria specified in division (C) of section 5703.952
of the Revised Code.
The committee shall provide a copy of the report to the
governor and to each member of the general assembly. The report is
a public record.
Sec. 5703.957. There is hereby created the tax expenditure
sunset review committee composed of seven members. The president
of the senate, within fifteen days after the first day of the
first regular session of the general assembly, shall appoint two
members of the senate to the committee, one from each political
party. The speaker of the house of representatives, within fifteen
days after the first day of the first regular session of the
general assembly, shall appoint two members of the house of
representatives to the committee, one from each political party.
The governor, within fifteen days after the first day of the first
regular session of the general assembly and with the advice and
consent of the senate, shall appoint one member to the committee.
The tax commissioner and the director of budget and management or
their designees shall be ex-officio voting members.
Legislative members of the committee hold office until their
successors are appointed or until they earlier cease to be members
of the senate or house of representatives, as the case may be. The
member appointed by the governor holds office for a term ending on
the thirty-first day of December of each even-numbered year. The
member appointed by the governor continues to hold office after
the expiration of the member's term until the member's successor
is appointed, or until thirty days have elapsed, whichever occurs
first.
In the first regular session of the general assembly, the
committee shall elect one of the members appointed from the house
of representatives as chairperson of the committee and one of the
members appointed from the senate as vice-chairperson of the
committee. In the second regular session of the general assembly,
the committee shall elect one of the members appointed from the
senate as chairperson of the committee and one of the members
appointed from the house of representatives as vice-chairperson of
the committee.
A vacancy on the committee shall be filled in the same manner
as the original appointment. A member appointed to fill a vacancy
occurring prior to the expiration of the term to which the
member's predecessor was appointed holds office for the remainder
of the unexpired term.
Members of the committee shall serve without compensation,
but shall be reimbursed for actual and necessary expenses they
incur in performance of their duties.
The committee shall meet as often as necessary to perform its
duties.
Four members of the committee constitute a quorum. The
committee shall not take any action without the concurrence of at
least four members. So long as a quorum is present, a vacancy on
the committee does not impair the ability of the remaining members
to perform the committee's duties.
Section 2. A tax expenditure, as defined in section 5703.95
of the Revised Code, as enacted by this act, in existence on April
15, 2008, expires at the end of December 31, 2008, unless, before
that expiration date, it is renewed under section 5703.952 of the
Revised Code, as enacted by this act. A tax expenditure in
existence on April 15, 2008, that expires does not apply to
taxable years beginning in or after 2009.
Section 3. The Tax Commissioner shall prepare a list of the
tax expenditures, as defined in section 5703.95 of the Revised
Code, as enacted by this act, in existence on April 15, 2008, and
shall provide a copy of the list to the chairperson of the Tax
Expenditure Sunset Review Committee created by section 5703.957 of
the Revised Code, as enacted by this act. The Committee thereupon
shall prepare a schedule under section 5703.953 of the Revised
Code, as enacted by this act, for appraising the listed tax
expenditures so that the appraisal and the report required under
section 5703.956 of the Revised Code, as enacted by this act, will
be completed not later than November 1, 2008. The schedule shall
provide for a public hearing on each tax expenditure. The Tax
Commissioner shall publish the schedule in the Register of Ohio.
On or before the date scheduled for a tax expenditure's public
hearing, the Tax Commissioner, and any other state official
responsible for administering the tax expenditure, shall submit
the reports required under division (A) of section 5703.954 of the
Revised Code, as enacted by this act. The Committee shall proceed
to appraise the listed tax expenditures under section 5703.955 of
the Revised Code, as enacted by this act, and to report upon its
appraisal of the listed tax expenditures under section 5703.956 of
the Revised Code.
Section 4. (A) Not later than thirty days after the effective
date of this act, the Governor, with the advice and consent of the
Senate, shall make the Governor's initial appointment to the Tax
Expenditure Sunset Review Committee under section 5703.957 of the
Revised Code, as enacted by this act. The member thus appointed
holds office for a term ending on December 31, 2008. Thereafter,
the gubernatorial appointment and term of office shall be as
prescribed in that section.
(B) Not later than thirty days after the effective date of
this act, the President of the Senate and the Speaker of the House
of Representatives shall make their initial appointments to the
Tax Expenditure Sunset Review Committee under section 5703.957 of
the Revised Code. The members thus appointed hold office for terms
ending as prescribed in that section.
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