Massachusetts S 1700: An Act to ensure the efficacy of corporate tax expenditures

Bill Text

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SENATE DOCKET, NO. 1459        FILED ON: 1/17/2019 
SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1700 
 
The Commonwealth of Massachusetts 
_________________ 
PRESENTED BY: 
Eric P. Lesser 
_________________ 
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General 
 Court assembled: 
 The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill: 
An Act to ensure the efficacy of corporate tax expenditures. 
_______________ 
PETITION OF: 
 
NAME: DISTRICT/ADDRESS:  
Eric P. Lesser First Hampden and Hampshire  
José F. Tosado 9th Hampden 1/30/2019 

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SENATE DOCKET, NO. 1459        FILED ON: 1/17/2019 
SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1700 
By Mr. Lesser, a petition (accompanied by bill, Senate, No. 1700) of Eric P. Lesser and José F. 
Tosado for legislation to ensure the efficacy of corporate tax expenditures.  Revenue. 
 
The Commonwealth of Massachusetts 
 
_______________
 
In the One Hundred and Ninety-First General Court 
(2019-2020) 
_______________
 
 
An Act to ensure the efficacy of corporate tax expenditures. 
 
 Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority 
of the same, as follows: 
 
1 SECTION 1. Chapter 62C of the general laws, as so appearing in the 2016 edition, is 
2hereby amended by adding after section 89, the following section:- 
3 Section 90. (a) The department shall conduct tax expenditure performance audits 
4pursuant to this section on the all corporate tax expenditures utilized by the commonwealth, 
5including, but not limited to, any tax exclusions, deductions, deferrals, credits, and tax rates 
6established for the purpose of recruitment or retention of businesses or corporations in the 
7commonwealth. Each corporate tax expenditure performance audit conducted by the department 
8pursuant to this section shall include the following: (1) a summary description of the purpose, 
9intent, or goal of the tax expenditure; (2) the intended beneficiaries of the tax expenditure; (3) 
10whether the tax expenditure is accomplishing its purpose, intent, or goal; (4) an explanation of 
11the intended economic costs and benefits of the tax expenditure, with analyses to support the 
12evaluation if they are reasonably available; (5) a comparison of the tax expenditure to other 
13similar tax expenditures in the commonwealth or other states; (6) whether there are other tax 

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14expenditures, funding, or programs that accomplish the same purpose, intent, or goal as a 
15corporate tax expenditure and whether any redundancies could be eliminated; (7) an assessment 
16of the fiscal impact of the corporate tax expenditure on the budgets of local governments, if 
17applicable; (8) if the evaluation of a particular tax expenditure’s economic impact is made 
18difficult because of data constraints, any recommendations for changes in administration or law 
19that would facilitate such data collections; and (9) an explanation of the performance measures 
20used to determine the extent to which the tax expenditure is accomplishing its purpose, intent, or 
21goal. 
22 (b) The corporate tax expenditure evaluation should also include, to the extent possible, 
23the following: (1) the extent to which the tax expenditure is a cost-effective use of resources 
24compared to other options for using the same resources to address the same purpose, intent, or 
25goal; (2) an analysis of the tax expenditure’s effect on competition and on business and 
26stakeholder needs; (3) the extent to which the tax expenditure changes business behavior and 
27strengthens the commonwealth’s economy overall by attracting new business to the state; (4) an 
28analysis of how the tax expenditure helps to diversify the commonwealth’s economy and 
29position the state for the future by stimulating major sectors of the economy including, but not 
30limited to, the entrepreneurial, high-tech, manufacturing, and renewable energy sectors; and (5) 
31recommendations for any changes to statutes or regulations that would allow the tax expenditure 
32performance audits to be more easily evaluated in the future, including changes to data 
33collection, reporting, sharing of information, and clarification of goals. 
34 (c) The department shall develop a multi-year schedule for conducting corporate tax 
35expenditure performance audits that incorporates all corporate tax expenditures, not later than 
36July 1, 2017, and shall update the schedule annually. In developing the schedule, the department 

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37may revise said schedule in order to incorporate any new corporate tax expenditures or eliminate 
38any repealed corporate tax expenditures. The schedule shall ensure that each corporate tax 
39expenditure is reviewed at least once every three years. 
40 (d) The department shall present the results of the corporate tax expenditure performance 
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