Provides that the governor is requested to review the report from the department of revenue and prepare a tax expenditure report as part of the biennial budget documents under RCW 43.88.030. The tax expenditure report must include the listing of exemptions prepared by the department of revenue and a budget analysis of each exemption. The budget analysis must categorize each exemption according to the programs or functions each exemption supports. The budget analysis must include the findings and recommendations of the joint legislative audit and review committee developed under RCW 43.136.055 and the comments of the citizen commission for performance measurement of tax preferences under RCW 43.136.065.

Directs the governor to identify each exemption that will terminate during the next biennium and make a recommendation as to whether the exemption should be allowed to terminate, continue, or continue with modification.