NY State Senate Bill 2021-S852

Archive: Last Bill Status - In Senate Committee Budget And Revenue Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 05, 2022	referred to budget and revenue
Jan 06, 2021	referred to budget and revenue

co-Sponsors

2021-S852 (ACTIVE) - Details

See Assembly Version of this Bill:: A3729
Current Committee:: Senate Budget And Revenue
Law Section:: Executive Law
Laws Affected:: Amd §181, Exec L
Versions Introduced in Other Legislative Sessions:: 2009-2010: S7347
2011-2012: S408
2013-2014: S7083
2015-2016: S3080
2017-2018: S5015
2019-2020: S2515, A7738
2023-2024: S620

2021-S852 (ACTIVE) - Summary

Requires governor to perform a cost benefit analysis of tax expenditures.

2021-S852 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S852

SPONSOR: KRUEGER
 
TITLE OF BILL:

An act to amend the executive law, in relation to cost benefit analysis
of tax expenditures

 
PURPOSE:

This legislation proposes to require the Governor to provide in the
annual Tax Expenditure Report more information -- including cost/benefit
analyses that better gauges the effectiveness and efficiency of each tax
expenditure.

 
SUMMARY OF PROVISIONS:

§ 1. Amends subdivision 1 of Section 181 of the Executive Law to include
the following definitions:

1. "Cost benefit analysis"

2. "Cost benefit analysis ratio."

3. "Cost benefit analysis target ratio."

§ 2. Amends subdivision 2 of section 181 of include:

1. A cost benefit analysis of each tax expenditure;

2. A comparison between each tax expenditures cost benefit analysis
ratio and the tax expenditure's target ratio, along with an explanation
for any difference between the two ratios.

3. An analysis of whether each tax expenditure has successfully achieved
the purpose for which the tax expenditure was enacted and currently
serves, including an analysis of the persons or entities that are bene-
fited by the tax expenditure.

4. An explanation of the cost benefit analysis formula applied to each
tax expenditure.

5. An explanation of each tax expenditure's target ratio, including a
description of why the ratio reflects adequate levels of tax relief or
job creation or job retention or investment in the State.

§ 3. Amends subdivision 3 of Section 181 of the Executive Law to include
the following:

1. The Governor shall develop for each tax expenditure a cost benefit
analysis formula for determining the cost benefit analyses ratio.

2. The Governor shall set for each tax expenditure a cost benefit analy-
sis target ratio.

 
EXISTING LAW:

Section 181 of the Executive Law requires the Governor to submit to the
Legislature an annual Tax Expenditure Report no more than thirty days
after issuing the Executive Budget. The report shall contain information
and statements on the provisions of law authorizing the tax expenditures
and cost estimates on them. It shall also include any recommendations of
the Governor regarding continuing, modifying, or repealing tax expendi-
tures.

In cases when the Executive Budget includes proposals to expire, modify
or repeal a tax expenditure, the report shall contain an analysis of the
number and types of persons and entities benefiting or expected to bene-
fit from such tax expenditures, an estimate of the costs of such tax
expenditures for the coming fiscal year, and an explanation of the
reasons for the proposals. The explanation of recommendations shall
include comments on the effectiveness and efficiency of tax expenditures
plus general cautionary and advisory notes concerning limitations of
data, estimation procedures, sampling errors and imputed values.

 
JUSTIFICATION:

New York State has over 500 tax expenditures, some of which date back to
the 1890s. While the Governor's Tax Expenditure Report annually reviews
each tax expenditure's amount of reduced taxpayer liability to the
State, many of them have remained in law with little consideration as to
whether they are fulfilling their objectives to benefit the public.

More than twenty years have passed since the Governor issued his first
Tax Expenditure Report in 1990. Yet New York still needs a more rigorous
tax expenditure review process. This review should employ performance
metrics which weighs economic activity against tax assistance.

Cost benefit analyses on all tax expenditures would give legislators a
clearer understanding of the need to maintain, enhance or sunset them.
The Governor is already required to comment on a tax expenditure's
effectiveness and efficiency, but primarily when recommending to expire,
modify or repeal it.

 
LEGISLATIVE HISTORY:

2019-20 S2515/A7738 Kim - died in committee
2017-18 S5015 No Same As - died in committee
2015-16 S3080 No Same As - died in committee
2013-14 S7083 No Same As - died in committee
2011-12 S408 No Same As - notice of committee consideration; discharged
and sent to rules
2010 - S7347 No Same As - died in committee

 
FISCAL IMPLICATIONS:

Slightly higher administrative costs stemming from requirements on the
Executive to perform tax expenditure cost/benefit analyses. Potential
cost savings through changes to inefficient tax expenditures.

 
EFFECTIVE DATE:
This act shall take effect on the first of January next succeeding the
date it shall have become law.

2021-S852 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    852
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 6, 2021
                                ___________
 
 Introduced  by Sens. KRUEGER, LIU -- read twice and ordered printed, and
   when printed to be committed to the Committee on Budget and Revenue
 
 AN ACT to amend the executive law, in relation to cost benefit  analysis
   of tax expenditures

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision 1 of  section  181  of  the  executive  law  is
 amended  by  adding  three  new  paragraphs  (c), (d) and (e) to read as
 follows:
   (C) "COST BENEFIT ANALYSIS" SHALL MEAN, FOR TAX  EXPENDITURES  CLAIMED
 BY  TAXPAYERS  SUBJECT  TO ARTICLES NINE (OTHER THAN SECTION ONE HUNDRED
 EIGHTY), NINE-A, THIRTEEN-A, TWENTY-EIGHT, THIRTY-TWO, AND  THIRTY-THREE
 OF  THE  TAX LAW, A METHOD OF DETERMINING A TAX EXPENDITURE'S BENEFIT TO
 NEW YORK STATE BASED ON THE TAX EXPENDITURE  RECIPIENT'S  PROJECTED  JOB
 CREATION  OR  JOB  RETENTION  AND/OR  INVESTMENT IN THE STATE VERSUS THE
 TOTAL AMOUNT OF REVENUES FOREGONE UNDER THE  TAX  EXPENDITURE.  FOR  TAX
 EXPENDITURES  CLAIMED  BY  TAXPAYERS  SUBJECT TO ARTICLES TWENTY-TWO AND
 THIRTY-ONE OF THE TAX LAW, "COST BENEFIT ANALYSIS" SHALL MEAN  A  METHOD
 OF  DETERMINING  A  TAX EXPENDITURE'S BENEFIT TO NEW YORK STATE BASED ON
 THE AMOUNT OF TAX RELIEF A TAX EXPENDITURE PROVIDES TO PARTICULAR CLASS-
 ES OF PERSONS OR ENTITIES.
   (D) "COST BENEFIT ANALYSIS RATIO" SHALL MEAN THE RATIO CALCULATED BY A
 COST BENEFIT ANALYSIS OF A TAX EXPENDITURE.
   (E) "COST BENEFIT ANALYSIS TARGET RATIO" SHALL MEAN THE  COST  BENEFIT
 ANALYSIS  RATIO  LEVEL THAT THE GOVERNOR DEEMS TO REFLECT A TAX EXPENDI-
 TURE'S ADEQUATE LEVEL OF BENEFIT TO NEW  YORK  STATE  WHEN  TAKING  INTO
 CONSIDERATION THE AMOUNT OF REVENUES THE STATE FOREGOES BECAUSE OF A TAX
 EXPENDITURE  AND  THE  AMOUNT  OF  TAX  RELIEF  OR  JOB  CREATION OR JOB
 RETENTION OR INVESTMENT IN THE STATE PROVIDED  OR  SUPPORT  BY  THE  TAX
 EXPENDITURE.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD03553-01-1

 S. 852                              2
 
   §  2.  Paragraphs  (f)  and (g) of subdivision 2 of section 181 of the
 executive law, as added by chapter 23 of the laws of 1990,  are  amended
 and  five new paragraphs (h), (i), (j), (k) and (l) are added to read as
 follows:
   (f)  comment, if any, on the effectiveness and efficiency of other tax
 expenditures; [and]
   (g) general cautionary and advisory notes  concerning  limitations  of
 data,  estimation procedures, sampling errors and imputed values, promi-
 nently displayed[.]; AND
   (H) A COST BENEFIT ANALYSIS OF EACH TAX EXPENDITURE;
   (I) A COMPARISON BETWEEN EACH TAX EXPENDITURE'S COST BENEFIT  ANALYSIS
 RATIO  AND THE TAX EXPENDITURE'S TARGET RATIO, ALONG WITH AN EXPLANATION
 FOR ANY DIFFERENCE BETWEEN THE TWO RATIOS;
   (J) AN ANALYSIS OF  WHETHER  EACH  TAX  EXPENDITURE  HAS  SUCCESSFULLY
 ACHIEVED  THE  PURPOSE  FOR  WHICH  THE  TAX EXPENDITURE WAS ENACTED AND
 CURRENTLY SERVES, INCLUDING AN ANALYSIS OF THE PERSONS OR ENTITIES  THAT
 ARE BENEFITED BY THE TAX EXPENDITURE;
   (K)  AN  EXPLANATION  OF  THE COST BENEFIT ANALYSIS FORMULA APPLIED TO
 EACH TAX EXPENDITURE; AND
   (L) AN EXPLANATION OF EACH TAX EXPENDITURE'S TARGET RATIO, INCLUDING A
 DESCRIPTION OF WHY THE RATIO REFLECTS ADEQUATE LEVELS OF TAX  RELIEF  OR
 JOB CREATION OR JOB RETENTION OR INVESTMENT IN THE STATE.
   §  3.  Subdivision 3 of section 181 of the executive law is renumbered
 subdivision 5 and two new subdivisions 3 and 4  are  added  to  read  as
 follows:
   3.  COST BENEFIT ANALYSIS FORMULA. THE GOVERNOR SHALL DEVELOP FOR EACH
 TAX EXPENDITURE A COST BENEFIT ANALYSIS FORMULA FOR DETERMINING THE COST
 BENEFIT ANALYSIS RATIO.
   4. COST BENEFIT ANALYSIS TARGET RATIO. THE  GOVERNOR  SHALL  DETERMINE
 FOR EACH TAX EXPENDITURE A COST BENEFIT ANALYSIS TARGET RATIO.
   §  4. This act shall take effect on the first of January next succeed-
 ing the date on which it shall have become a law.

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Senate Bill S852

Sponsored By

Archive: Last Bill Status - In Senate Committee Budget And Revenue Committee

co-Sponsors

2021-S852 (ACTIVE) - Details

2021-S852 (ACTIVE) - Summary

2021-S852 (ACTIVE) - Sponsor Memo

2021-S852 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S852

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Sponsored By

Liz Krueger

Archive: Last Bill Status - In Senate Committee Budget And Revenue Committee

co-Sponsors

John C. Liu

2021-S852 (ACTIVE) - Details

2021-S852 (ACTIVE) - Summary

2021-S852 (ACTIVE) - Sponsor Memo

2021-S852 (ACTIVE) - Bill Text download pdf

Comments