Tax Incentive Evaluation Law: Texas

This page is no longer being updated. As of June 15, 2017, newer tax incentive evaluation fact sheets are available here.

To ensure that economic development tax incentives are achieving their goals effectively, many states have approved laws requiring regular, rigorous, independent evaluations of these programs. For a list of states that have passed evaluation laws since the start of 2012, click here.


H.B. 26, enacted June 18, 2015

What it does

Requires evaluation of all major tax incentives

The newly created Economic Incentive Oversight Board will evaluate tax incentives, cash grants, and loans.

The board will develop performance indicators to determine whether incentives are achieving their goals.

Ensures that reports draw policy-relevant conclusions

As part of each evaluation, the board will recommend whether the incentive program should continue and how it might be improved.

The board may also recommend that the state auditor study any incentive.

Excerpt from Texas’ law: Policy recommendations

(a) The board shall develop a schedule for the periodic review of each state incentive program or fund described by Section 490G.005 for the purposes of making recommendations on whether to continue the program or fund or whether to improve program or fund effectiveness and efficiency.  The board shall review and make recommendations to the legislature regarding each program or fund according to the review schedule.

(b) After conducting a review of a state incentive program or fund under this chapter, the board may recommend to the legislative audit committee that an audit of the program or fund be included in the audit plan under Section 321.013.

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Issue Brief

This report advises states on how to design and implement tax incentive evaluation laws, so that these programs are studied regularly and rigorously and so that lawmakers can use the findings to improve economic development policy.

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