Bill > S1383

Introduced Session

This bill enhances certain reporting and disclosure requirements regarding State development subsidies, including tax expenditures. Under current law, the Executive branch of State government is required to review and evaluate certain State development subsidies, including tax expenditures, to determine if the tax incentives have met expectations. State tax expenditures and preferences are special or selective tax relief or benefits authorized by law that are designed to accomplish certain public goals by forgoing State tax dollars to the direct benefit of certain taxpayers. The relief or benefit provided through tax expenditures typically is intended to encourage investment, create jobs, and facilitate economic development or to relieve the tax on certain favored or important products, services, or financial decisions. This bill enhances the current review and evaluation required of the specific goals, purposes, and objectives that each State tax expenditure is intended to achieve. The bill requires an enhanced annual evaluation of specific data collection and improved reporting requirements imposed upon the recipient of tax expenditures, the comprehensive presentation of the State costs of development subsidies, including tax expenditures, and review of the specific data and baseline measurements to be collected and remitted in each year that a tax expenditure is in effect, necessary to measure any change in performance indicators for evaluation of the overall benefit of tax expenditures, and a return on investment analysis. The bill amends the definition of "development subsidy" to increase the threshold of a reportable subsidy from $25,000 to $100,000 for purposes of the Development Subsidy Job Goals Accountability Act. The bill also prohibits the granting body or State Treasurer or any current or former employee of either, or any person who has secured information, from divulging, disclosing, examining for any reason other than required in the performance of official duties, or using for their own personal advantage information obtained from the applications submitted to granting bodies pursuant to that act and from the progress reports filed pursuant to that act. The bill modifies the definition of "State tax expenditure" in section 1 of the bill to specify that for purposes of the State tax expenditure report, currently required by law to be transmitted to the Legislature as part of the Governor's annual budget message, State tax expenditures are those revenue losses attributable to provisions of State tax law which deviate from the generally applicable tax structure. Currently, State tax expenditures are defined as those revenue losses attributable to provisions of State tax law which establish special tax treatment. The bill also changes the definition of "tax expenditure" in section 2 of the bill to make the definition of tax expenditure used in the Development Subsidy Job Goals Accountability Act consistent with the definition of "State tax expenditure" for purposes of the State tax expenditure reporting requirements in section 1 of the bill. The bill requires that each recipient entity of a development subsidy include on their progress reports to the granting body, information concerning the recipient's supplier diversity goals and policies, including amounts paid, during the previous fiscal year for products and services supplied by a female business, a small business, a minority business, or a veteran-owned business as defined by the bill. Further, the supplier diversity information provided is to be summarized and included in the annual Unified Economic Development Budget Report, prepared by the State Treasurer and transmitted to the Legislature as part of the Governor's Budget Message. The bill also requires that the annual State tax expenditure report detail instances in which the benefit of a particular State tax expenditure exceeds 10 percent of the recipient's State tax liability. The bill takes effect immediately upon enactment.

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Troy Singleton (D)*, 

Introduced in the Senate, Referred to Senate Budget and Appropriations Committee (on 01/09/2024)

Official Document