28-5-41.1. Economic analysis of certain tax benefits of law or proposed law.

1. (1)

   Each year, the Department of Audits and Accounts shall cause the completion of at least 12 economic analyses pursuant to this Code section to be determined as follows:#

   1. (A)

      An analysis for any income tax credit or sales and use tax exemption that will sunset or be repealed by operation of law within two years from July 1 of the year during which the economic analyses are to be conducted and that have an expenditure of more than $20 million as reported in the most recent tax expenditure review, as provided for in paragraph (8) of Code Section 45-12-75. If more than 12 such credits or exemptions meet such criteria, then the first 12 that are set to sunset or be repealed shall be selected in chronological order; and#

   2. (B)

      If the total number of analyses required by subparagraph (A) of this paragraph is fewer than 12, the chairperson of the House Committee on Ways and Means and the chairperson of the Senate Finance Committee may each request one-half of the remaining number of economic analyses, which requests shall be transmitted to the Department of Audits and Accounts by April 15 of each year. In the event that the number of remaining economic analyses is an odd number, such number shall be increased by one, ensuring that each chairperson has an equal number of requests available.#

2. (2)

   The Department of Audits and Accounts shall post on its public website the list of analyses to be conducted each year and provide a mechanism for intended beneficiaries or representatives to provide information that may be beneficial to the analyses. The Department of Audits and Accounts shall share such information with the independent auditors conducting the relevant analysis, and the Department of Audits and Accounts and such independent auditors may use such information in such analysis.#

3. (3)

   The Department of Audits and Accounts shall contract with one or more independent auditors to complete all such analyses on or before November 15 of the year in which such analysis was required or requested.#

4. (4)

   Each such economic analysis shall be limited to one existing provision of law or proposed law and shall specify one particular exemption, exclusion, or deduction from the base of a tax; credit against a tax; deferral of a tax; rebate of taxes paid; tax abatement; or preferential tax rate to be analyzed.#

An economic analysis conducted pursuant to this Code section shall include the following:#

1. (1)

   An analysis considering whether the provision is accomplishing its stated or implied purpose, intent, or goal;#

2. (2)

   A good faith estimate, on an annual basis for the following five years, of the net changes to state revenue, state expenditures, and economic activity. When appropriate, the net changes shall include direct, indirect, and induced impacts;#

3. (3)

   A comparison to similar provisions provided by other states;#

4. (4)

   An assessment of the extent to which modifying or terminating the provision would affect the beneficiaries and the state economy;#

5. (5)

   If possible, a description of the ancillary impacts of the business activity attributable to the provision, which may include, but not be limited to, those on public safety, education, and infrastructure; and#

6. (6)

   Any recommendations for improving the state’s return on investment from the provision being studied.#

Copies of each completed economic analysis shall be provided to the House Budget and Research Office and the Senate Budget and Evaluation Office.#

If a fiscal note is requested pursuant to Code Section 28-5-42 and a relevant economic analysis has been conducted within one year of such request, the Office of Planning and Budget may prepare a summary of such economic analysis and attach it with the requested fiscal note.#