Taxation: tax expenditures: Legislative Analyst’s Office: report and recommendation.

Plain English Breakdown

There are no uncertainties left open by the source material, but it's noted that the exact details of what happens if LAO fails to complete or publish the report on time are not specified.

Tax Expenditures Report

This law requires the Legislative Analyst's Office (LAO) to write a report by January 1, 2029, about major tax expenditures in California and make recommendations based on their cost-effectiveness.

What This Bill Does

• Requires the LAO to write and publish a comprehensive report assessing major tax expenditures of the state by January 1, 2029.
• The LAO must identify potential savings from reducing or eliminating these tax breaks and consider factors like impact on the General Fund when making recommendations.
• Requires the LAO to describe who benefits from each tax expenditure in the report.
• After receiving the report, certain legislative committees are required to hold a joint public hearing by August 15 of the second year of the session.
• The bill makes these requirements inactive six months after the hearing and removes them completely in January.

Who It Names or Affects

• The Legislative Analyst's Office (LAO) will write and publish the report.
• Legislative committees, including Budget and Fiscal Review and Revenue and Taxation, must review and hold a public hearing on the report.

Terms To Know

Tax Expenditures

Money that the government does not collect because of tax breaks or special rules for certain groups or activities.

General Fund

The main account in California's budget where most state money is kept and spent on various programs and services.

Limits and Unknowns

• The bill does not specify what happens if the LAO fails to complete or publish the report by January 1, 2029.
• It is unclear how much detail will be included in the report about who benefits from each tax expenditure.

Official Summary Text

SB 1349, as amended, Gonzalez.
Taxation: tax expenditures: Legislative Analyst’s Office: report and recommendation.
Existing law, including, but not limited to, property tax law, the Sales and Use Tax Law, the Personal Income Tax Law, the Corporation Tax Law, the Motor Vehicle Fuel Tax Law, the law governing the taxation of insurers, the Use Fuel Tax Law, and the Diesel Fuel Tax Law, provides for tax expenditures, including exemptions, deductions, exclusions, and credits against the taxes imposed by those laws.
The bill would require the Legislative Analyst’s Office (LAO), by January 1, 2029, to write and publish a report that comprehensively assesses major tax expenditures, as defined, of the state, and make a recommendation to the Legislature based on the report. In this regard, the bill would require LAO, as part of the comprehensive assessments, to identify any savings that the Legislature can
reduce or eliminate from
realize by reducing or limiting
the major tax expenditures, and require them to consider certain criteria when finalizing the report, including the impact on the General Fund.
The bill would require the scope of each comprehensive assessment to include certain specified information, to the extent possible, including a brief description of the beneficiaries of each tax expenditure, as specified.
The bill would require LAO to submit the report to the Senate Committee on Budget and Fiscal Review, the Senate Committee on Revenue and Taxation, the Assembly Committee on Budget, and the Assembly Committee on Revenue and Taxation, as specified, and to publish the report on its internet website. The bill would require the Senate Committee on Revenue and Taxation and the Assembly Committee on Revenue and Taxation, after receipt of the report by the Legislature, to hold a joint public hearing on the
report by August 15 of the second year of the legislative session.
The bill would require the recommendation from LAO to the Legislature based on the report to include certain specified information, including the extent to which each major tax expenditure is a cost-effective use of resources compared to other options to address the same purpose, intent, or goal.
The bill would make these provisions inoperative 6 months after the hearing described above, and repeal them the following January. The bill would make findings and declarations relating to these provisions.

Current Bill Text

Download Bill PDF