In this subtitle the following words have the meanings indicated. “Department” means the Department of Legislative Services. “Evaluation” means the process of legislative review of a tax credit, exemption, or preference for which this subtitle provides.

The purpose of this subtitle is to establish a system of legislative review that will determine whether a tax credit, exemption, or preference is necessary for the public interest.

Subject to subsections (b) and (c) of this section, on a request by the Senate Budget and Taxation Committee, the House Committee on Ways and Means, the Executive Director of the Department, or the Director of the Office of Policy Analysis in the Department, the Department shall conduct an evaluation of a State tax credit, exemption, or preference, or an aspect of a State tax credit, exemption, or preference. On or before July 1, 2023, the Department shall conduct an evaluation of the tax credits under § 10–733 of this article (innovation investment incentive) and § 10–733.1 of this article (purchase of cybersecurity technology or service). Beginning October 1, 2022, the Department shall conduct an evaluation at least once every 10 years of each income tax credit that is primarily claimed by business entities and has an annual fiscal impact exceeding $5,000,000. In conducting a reevaluation of an income tax credit described under paragraph (1) of this subsection for which the Department has previously conducted an evaluation, the Department may conduct an expedited review of the income tax credit if the Department determines that there have been no substantial alterations to the income tax credit since the previous evaluation was conducted. In consultation with the Senate Budget and Taxation Committee and the House Committee on Ways and Means, the Department shall publish on the Department’s website a schedule of the evaluations to be conducted by the Department.

For each evaluation required under this subtitle, the Department shall: consult with: the Department of Budget and Management; the Comptroller; and the department, instrumentality of the State, or local government that administers the tax credit, exemption, or preference under evaluation; and prepare a plan for the evaluation.

During an evaluation, the Comptroller, the Department of Budget and Management, and the department, instrumentality of the State, or local government that administers the tax credit, exemption, or preference shall: provide promptly any information that the Department requests; and otherwise cooperate with the Department.

The Department shall prepare a report on the evaluation that: discusses, to the degree relevant: the purpose for which the tax credit, exemption, or preference was established; whether the original intent of the tax credit, exemption, or preference is still appropriate; whether the tax credit, exemption, or preference is meeting its objectives; whether the purposes of the tax credit, exemption, or preference could be more efficiently and effectively carried out through alternative methods; and the costs of providing the tax credit, exemption, or preference, including the administrative cost to the State and lost revenues to the State and local governments; and include a recommendation on whether the tax credit, exemption, or preference should be continued, with or without changes, or terminated. For each evaluation conducted by the Department, the Department shall report to the General Assembly, in accordance with § 2–1257 of the State Government Article, on the evaluation.

This subtitle may be cited as the “Tax Expenditure Evaluation Act”.