Chapter 155
2013 -- S 0734 SUBSTITUTE B
Enacted 07/11/13
A N A C T
RELATING TO
TAXATION --
CREDIT
ACCOUNTABILITY ACT OF 2013
Introduced By: Senators DaPonte, Goodwin, Ruggerio, Paiva Weed, and Lynch
Date Introduced: March 13, 2013
It is enacted by the
General Assembly as follows:
SECTION 1. Section 35-1.1-3 of the General Laws in Chapter
35-1.1 entitled "Office of
Management and Budget"
is hereby amended to read as follows:
35-1.1-3.
Director of management and budget. -- Appointment
and responsibilities.
(a) Within the
department of administration there shall be a director of management and
budget, who shall be appointed by the director of
administration with the approval of the
governor. The director shall be responsible to the governor
and director of administration for
supervising the office of management and budget and for managing
and providing strategic
leadership and direction to the budget officer, the performance
management office, and the
federal grants management office.
(b) The director of
management and budget shall be responsible to:
(1) Oversee, coordinate
and manage the functions of the budget officer as set forth by
section 35-3, program performance management as set forth by
§ 35-3-24.1, approval of
agreements with federal agencies defined by § 35-3-25 and
budgeting, appropriation and receipt
of federal monies as set forth by chapter 42-41;
(2) Manage federal
fiscal proposals and guidelines, and serve as the State Clearinghouse
for the application of federal grants; and,
(3) Maximize the
indirect cost recoveries by state agencies set forth by § 35-4-23.1.
(4) To undertake a
comprehensive review and inventory of all reports filed by the
executive office and agencies of the state with the general
assembly. The inventory should
include but not be limited to: the type, title, and summary
of reports; the author(s) of the reports;
the specific audience of the reports; and a schedule of
the reports’ release. The inventory shall be
presented to the general assembly as part of the budget
submission on a yearly basis. The office
of management and budget shall also make recommendations
to consolidate, modernize the
reports, and to make recommendations for elimination or
expansion of each report.
SECTION 2. Section 35-3-7 of the General Laws in Chapter
35-3 entitled “State Budget”
is hereby amended to read as follows:
35-3-7. Submission
of budget to general assembly - Contents. --
(a) On or before the
third Thursday in January in each year of each January session of
the general assembly, the governor shall submit to the
general assembly a budget containing a
complete plan of estimated revenues and proposed expenditures,
with a personnel supplement
detailing the number and titles of positions of each agency and
the estimates of personnel costs
for the next fiscal year., and with the
inventory required by subsection 35-1.1-3(b)(4). Provided,
however, in those years that a new governor is inaugurated,
the new governor shall submit the
budget on or before the first Thursday in February. In the
budget the governor may set forth in
summary and detail:
(1) Estimates of the
receipts of the state during the ensuing fiscal year under laws existing
at the time the budget is transmitted and also under the
revenue proposals, if any, contained in the
budget, and comparisons with the estimated receipts of the
state during the current fiscal year, as
well as actual receipts of the state for the last two (2)
completed fiscal years.
(2) Estimates of the
expenditures and appropriations necessary in the governor's
judgment for the support of the state government for the ensuing
fiscal year, and comparisons
with appropriations for expenditures during the current
fiscal year, as well as actual expenditures
of the state for the last two (2) complete fiscal years.
(3) Financial statements
of the
(i)
Condition of the treasury at the end of the last completed fiscal year;
(ii) The estimated
condition of the treasury at the end of the current fiscal year; and
(iii) Estimated
condition of the treasury at the end of the ensuing fiscal year if the
financial proposals contained in the budget are adopted.
(4) All essential facts
regarding the bonded and other indebtedness of the state.
(5) A report indicating
those program revenues and expenditures whose funding source is
proposed to be changed from state appropriations to restricted
receipts, or from restricted receipts
to other funding sources.
(6) Such other financial
statements and data as in the governor's opinion are necessary or
desirable.
(b) Any other provision
of the general laws to the contrary notwithstanding, the proposed
appropriations submitted by the governor to the general assembly for
the next ensuing fiscal year
should not be more than five and one-half percent (5.5%) in
excess of total state appropriations,
excluding any estimated supplemental appropriations, enacted by
the general assembly for the
fiscal year previous to that for which the proposed
appropriations are being submitted; provided,
that the increased state share provisions required to achieve
fifty percent (50%) state financing of
local school operations as provided for in P.L. 1985, ch. 182, shall be excluded from the
definition of total appropriations.
(c) Notwithstanding the
provisions of subsection 35-3-7(a), the governor shall submit to
the general assembly a budget for the fiscal year ending
June 30, 2006 not later than the fourth
(4th) Thursday in January 2005.
(d) Notwithstanding the
provisions of subsection 35-3-7(a), the governor shall submit to
the general assembly a supplemental budget for the fiscal
year ending June 30, 2006 and/or a
budget for the fiscal year ending June 30, 2007 not later
than Thursday, January 26, 2006.
(e) Notwithstanding the
provisions of subsection 35-3-7(a), the governor shall submit to
the general assembly a supplemental budget for the fiscal
year ending June 30, 2007 and/or a
budget for the fiscal year ending June 30, 2008 not later
than Wednesday, January 31, 2007.
(f) Notwithstanding the
provisions of subsection 35-3-7(a), the governor shall submit to
the general assembly a budget for the fiscal year ending
June 30, 2012 not later than Thursday,
March 10, 2011.
(g) Notwithstanding the
provisions of subsection 35-3-7(a), the governor shall submit to
the general assembly a budget for the fiscal year ending
June 30, 2013 not later than Tuesday,
January 31, 2012.
SECTION 3. Section 22-12-3 of the General Laws in Chapter
22-12 entitled “Fiscal
Notes” is hereby amended to
read as follows:
22-12-3. Request
for fiscal notes.-- (a) Fiscal
notes shall only be requested by the
chairperson of the house or senate finance committee upon being
notified by another committee
chairperson, the sponsor of the bill or resolution, or in the
case of bills or resolutions affecting
cities or towns, by the Rhode Island League of Cities and
Towns in addition to the individuals
referred to in this section, of the existence of any bill or
resolution described in § 22-12-1.
Requests shall be made in the form and substance as
may be requested by the finance committee
chairperson, and shall be forwarded through the house or senate
fiscal adviser to the state budget
officer, who shall determine the agency or agencies affected
by the bill, or for bills affecting cities
and towns to the chief executive official of the cities
and the towns, the Rhode Island League of
Cities and Towns, and the department
of revenue. The budget officer
shall then be responsible, in
cooperation with these agencies, for the preparation of the
fiscal note, except that the department
of administration, in consultation and cooperation with
the Rhode Island League of Cities and
Towns, shall be responsible for the preparation of the
fiscal note for bills affecting cities and
towns.
(b) The chairperson
of either the house finance or senate finance committee may also
require executive branch agencies to provide performance
metrics when legislation affecting an
agency’s program or policy has an economic impact.
SECTION 4. Section 42-146-6 of the General Laws in Chapter
42-142 entitled
“Department of Revenue” is
hereby amended to read as follows:
42-142-6. Annual
unified economic development report. -- (a) The
director of the
department of revenue shall, no later than January 15th of each
state fiscal year, compile and
publish, in printed and electronic form, including on the
Internet, an annual unified economic
development report which shall provide the following
comprehensive information regarding the
tax credits or other tax benefits conferred pursuant to
§§ 42-64-10, 44-63-3, 42-64.5-5, 42-64.3-1,
and 44-31.2-6.1 during the preceding fiscal year:
(1) The name of each
recipient of any such tax credit or other tax benefit; the dollar
amount of each such tax credit or other tax benefit; and
summaries of the number of full-time and
part-time jobs created or retained, an overview of benefits
offered, and the degree to which job
creation and retention, wage and benefit goals and requirements
of recipient and related
corporations, if any, have been met. The report shall include
aggregate dollar amounts of each
category of tax credit or other tax benefit; to the extent
possible, the amounts of tax credits and
other tax benefits by geographical area; the number of
recipients within each category of tax
credit or retained; overview of benefits offered; and the
degree to which job creation and
retention, wage and benefit rate goals and requirements have
been met within each category of
tax credit or other tax benefit;
(2) The cost to the
state and the approving agency for each tax credit or other tax benefits
conferred pursuant to §§ 42-64-10, 44-63-3, 42-64.5-5,
42-64.3-1, and 44-31.2-6.1 during the
preceding fiscal year;
(3) To the extent
possible, the amounts of tax credits and other tax benefits by
geographical area; and
(4) The extent to which
any employees of and recipients of any such tax credits or other
tax benefits has received RIte
Care or RIte Share benefits or assistance.;
and
(5) To the extent the
data exists, a cost-benefit analysis prepared by the office of revenue
analysis based upon the collected data under sections
42-64-10, 44-63-3, 42-64.5-5, 42-64-3.1,
and 44-31.2-6.1, and required for the preparation of the
unified economic development report.
The cost-benefit analysis may include but shall not be
limited to the cost to the state for the
revenues reductions, cost to administer the credit, projected revenues
gained from the credit, and
other metrics which can be measured along with a baseline
assessment of the original intent of
the legislation. The office of revenue analysis shall
also indicate the purpose of the credit to the
extent that it is provided in the enabling legislation, or
note the absence of such information, and
any measureable goals established by the granting
authority of the credit. Where possible, the
analysis shall cover a five (5) year period projecting the
cost and benefits over this period. The
office of revenue analysis may utilize outside services or
sources for development of the
methodology and modeling techniques. The unified economic
development report shall include
the cost-benefit analysis starting January 15, 2014. The
office of revenue analysis shall work in
conjuncture with
(b) After the initial
report, the division of taxation will perform reviews of each recipient
of this tax credit or other tax benefits to ensure the
accuracy of the employee data submitted. The
division of taxation will include a summary of the reviews
performed along with any adjustments,
modifications and/or allowable recapture of tax credit amounts and
data included on prior year
reports.
SECTION 5. Title 44 of the General Laws entitled
"TAXATION" is hereby amended by
adding thereto the following chapter:
CHAPTER
48.2
"
OF
2013"
44-48.2-1.
Short title. -- This chapter shall be known and
may be cited as the "Economic
Development Tax Incentives
Evaluation Act of 2013."
44-48.2-2.
Legislative findings and purpose. -- The
general assembly finds and declares
that:
(1) The state of
exemptions, and deductions, to encourage businesses to locate,
hire employees, expand, invest,
and/or remain in the state;
(2) These various tax
incentives are intended as a tool for economic development,
promoting new jobs and business growth in
(3) The state needs a
systematic approach for evaluating whether incentives are fulfilling
their intended purposes in a cost-effective manner;
(4) In order to improve
state government's effectiveness in serving the residents of this
state, the legislature finds it necessary to provide for
the systematic and comprehensive analysis
of economic development tax incentives, and for those
analyses to be incorporated into the
budget and policymaking processes.
44-48.2-3.
Economic development tax incentive defined. -- (a) As used in this section,
the term "economic development tax incentive"
shall include:
(1) Those tax
credits, deductions, exemptions, exclusions, and other preferential tax
benefits associated with sections 42-64.3-6, 42-64.3-7,
42-64.5-3, 42-64.6-4, 42-64.11-4, 44-30-
1.1, 44-31-1, 44-31-1.1, 44-31-2, 44-31.2-5, 44-32-1,
44-32-2, 44-32-3, 44-39.1-1, 44-43-2, 44-
43-3, and 44-63-2, and;
(2) Any future
incentives enacted after the effective date of this section for the purpose of
recruitment or retention of businesses in the state of
(b) In determining
whether a future tax incentive is enacted for "the purpose of
recruitment or retention of businesses," the office of
revenue analysis shall consider legislative
intent, including legislative statements of purpose and
goals, and may also consider whether the
tax incentive is promoted as a business incentive by the
state’s economic development agency or
other relevant state agency.
44-48.2-4.
Economic Development Tax Incentive Evaluations, Schedule. -- (a) In
accordance with the following schedule, the tax expenditure
report produced by the chief of the
office of revenue analysis pursuant to section 44-48.1-1,
shall include an additional analysis
component, consistent with section 44-48.2-5 and produced in
consultation with the director of
the economic development corporation, the director of the
office of management and budget, and
the director of the department of labor and training:
(1) Analyses of
economic development tax incentives as listed in subdivision 44-48.2-
3(1) shall be completed at least once between July
1, 2014 and June 30, 2017, and no less than
once every three (3) years thereafter;
(2) Analyses of any
economic development tax incentives created after July 1, 2013, shall
be completed within five (5) years of taking effect, and
no less than once every three (3) years
thereafter;
(b) No later than the
tenth (10th) of January each year, beginning in 2014, the office of
revenue analysis will submit to the chairs of the senate and
house finance committees a three (3)
year plan for evaluating economic development tax
incentives.
44-48.2-5.
Economic Development Tax Incentive Evaluations, Analysis.
--
(a) The additional
analysis as required by section 44-48.2-4 shall include, but not be
limited to:
(1) A baseline
assessment of the tax incentive, including, if applicable, the number of
aggregate jobs associated with the taxpayers receiving such tax
incentive and the aggregate
annual revenue that such taxpayers generate for the state
through the direct taxes applied to them
and through taxes applied to their employees;
(2) The statutory and
programmatic goals and intent of the tax incentive, if said goals and
intentions are included in the incentive’s enabling statute or
legislation;
(3) The number of
taxpayers granted the tax incentive during the previous twelve (12)
month period;
(4) The value of the
tax incentive granted, and ultimately claimed, listed by the North
American Industrial Classification System (NAICS) Code
associated with the taxpayers receiving
such benefit, if such NAICS Code is available;
(5) An assessment and
five (5) year projection of the potential impact on the state's
revenue stream from carry forwards allowed under such tax
incentive;
(6) An estimate of the
economic impact of the tax incentive including, but not limited to:
(i)
A cost-benefit comparison of the revenue foregone by allowing the tax incentive
compared to tax revenue generated by the taxpayer receiving
the credit, including direct taxes
applied to them and taxes applied to their employees;
(ii) An estimate of
the number of jobs that were the direct result of the incentive; and
(iii) A statement by
the director of the economic development corporation as to whether,
in his or her judgment, the statutory and programmatic
goals of the tax benefit are being met, with
obstacles to such goals identified, if possible;
(7) The estimated
cost to the state to administer the tax incentive, if such information is
available;
(8) An estimate of
the extent to which benefits of the tax incentive remained in state or
flowed outside the state, if such information is available;
(9) In the case of
economic development tax incentives where measuring the economic
impact is significantly limited due to data constraints,
whether any changes in statute would
facilitate data collection in a way that would allow for better
analysis;
(10) Whether the
effectiveness of the tax incentive could be determined more definitively
if the general assembly were to clarify or modify the
tax incentive’s goals and intended purpose;
(11) A recommendation
as to whether the tax incentive should be continued, modified or
terminated, the basis for such recommendation, and the expected
impact of such recommendation
on the state’s economy;
(12) The methodology
and assumptions used in carrying out the assessments, projections
and analyses required pursuant to subdivisions (1)
through (8) of this section.
(b) All departments, offices,
boards, and agencies of the state shall cooperate with the
chief of the office of revenue analysis and shall provide
to the office of revenue analysis any
records, information (documentary and otherwise), data, and
data analysis as may be necessary
to complete the report required pursuant to this
section.
44-48.2-6.
Consideration by the governor. -- The
governor's budget submission as
required under chapter 35-3 shall identify each economic
development tax incentive for which an
evaluation was completed in accordance with this chapter in the
period since the governor's
previous budget submission. For each evaluated tax incentive,
the governor's budget submission
shall include a recommendation as to whether the tax
incentive should be continued, modified, or
terminated.
SECTION 6. Sections 1, 2, 3 and 4 of this act shall take
effect January 1, 2014. Section 5
of this act shall take effect sixty (60) days after
passage.
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LC02050/SUB B
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