Report 2015-127 Recommendation Responses
Report 2015-127: Corporate Income Tax Expenditures: The State's Regular Evaluation of Corporate Income Tax Expenditures Would Improve Their Efficiency and Effectiveness (Release Date: April 2016)
Recommendation for Legislative Action
To increase oversight of existing and future tax expenditures through the use of best practices, the Legislature should consider enacting a law requiring a state entity to conduct a comprehensive evaluation of all tax expenditures and develop conclusions and recommendations to continue, modify, or repeal each of them. The state entity should have the necessary resources and a reasonable time frame for analysis.
Description of Legislative Action
AB 545 (Quirk,2021) would have, until February 15, 2025, requested the Regents of the University of California to perform a comprehensive assessment of major tax expenditures to study the legislative intent, the beneficiaries, the number of affected returns or business entities, the cost to the General Fund, the effectiveness of those tax expenditures, and options to modify the tax expenditures to improve their effectiveness or reduce their cost. The bill would have requested the Regents to provide a report to the Legislature by January 1, 2024, and provided that the Senate Committee on Governance and Finance and the Assembly Committee on Revenue and Taxation would have held a joint public hearing on the report by August 15, 2024. The bill died in the Senate.
- Legislative Action Current As-of: November 2022
California State Auditor's Assessment of Annual Follow-Up Status: Legislation Proposed But Not Enacted
Description of Legislative Action
On February 10, 2021, Assembly Member Quirk introduced AB 545, which would have requested that the Regents of the University of California perform a comprehensive assessment of major tax expenditure programs. The bill was sent to suspense in August 2021.
- Legislative Action Current As-of: April 2021
California State Auditor's Assessment of Annual Follow-Up Status: Legislation Introduced
Description of Legislative Action
SB 956 (Jackson) was introduced on February 10, 2020, and would establish the California Tax Expenditure Review Board as an independent advisory body to comprehensively assess major tax expenditures and make recommendations to the Legislature. The bill also would request that the University of California, through a new or existing research center, perform a comprehensive assessment of the major tax expenditures and present a comprehensive, peer-reviewed assessment to the board by July 1, 2022, at a public hearing.
- Legislative Action Current As-of: April 2020
California State Auditor's Assessment of 1-Year Status: Legislation Introduced
Description of Legislative Action
SB 468 (Jackson) would require the Legislative Analyst's Office (LAO), prior to December 1, 2022, to conduct an analysis of specified tax expenditures describing, in part, economic, social, or any other benefits of the tax expenditure to the State. The bill would require the LAO to submit a report to the Legislature on its findings.
- Legislative Action Current As-of: April 2019
California State Auditor's Assessment of Annual Follow-Up Status: Legislation Introduced
Description of Legislative Action
Legislation has not been introduced to address this specific recommendation.
- Legislative Action Current As-of: April 2018