AN ACT REVISING THE LAWS GOVERNING THE REVIEW OF LAWS CONTAINING DEDICATED REVENUE PROVISIONS AND STATUTORY APPROPRIATIONS; PROVIDING FOR DISCRETION IN WHICH LAWS TO REVIEW; AND AMENDING SECTIONS 17-1-501, 17-1-503, 17-1-505, 17-1-508, AND 17-2-111, MCA.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Section 17-1-501, MCA, is amended to read:

"17-1-501. Legislative intent.

(1) It is the intent of the legislature, by establishing criteria for the review and evaluation of revenue dedication provisions, to ensure that provisions for revenue dedication:

(a) are based on sound principles of revenue dedication as described in 17-1-507;

(b) reflect present circumstances and legislative priorities for state spending;

(c) are terminated when they are no longer necessary or appropriate; and

(d) are subject to the same legislative scrutiny as programs or activities funded from the general fund.

(2) It is the intent of the legislature, by establishing criteria for the review and evaluation of statutory appropriation provisions, to ensure that provisions with statutory appropriations:

(a) reflect present circumstances and legislative priorities for state spending;

(b) are terminated when they are no longer necessary or appropriate; and

(c) are subject to the same legislative scrutiny as other appropriations."

Section 2. Section 17-1-503, MCA, is amended to read:

"17-1-503. Transfer of fund balances to general fund. The balance remaining in each special revenue account terminated pursuant to legislative review must be deposited in the general fund.

"

Section 3. Section 17-1-505, MCA, is amended to read:

"17-1-505. Review of dedicated revenue provisions. (1) Each interim, the legislative finance committee shall review dedicated revenue provisions based upon procedures established under subsection (4) and the principles of revenue dedication set forth in 17-1-507 to ensure that legislative policy is clearly stated.

(2) The legislature recognizes that dedicated revenue provisions are subject to review by:

(a) the office of budget and program planning in the development and implementation of the executive budget and analysis of legislation;

(b) the legislative finance division in analyzing the executive budget;

(c) the legislative services division in drafting legislation;

(d) the legislative auditor in auditing agencies; and

(e) the department of administration in performing the functions provided for in 17-2-106 and 17-2-111.

(3) To avoid unnecessary use of dedicated revenue provisions, the entities listed in subsection (2) shall, in the course of current duties, consider the principles in 17-1-507 and the criteria listed in this subsection for each new or existing dedicated revenue provision. A dedicated revenue provision should not give a program or activity an unfair advantage for funding. The expenditures from a dedicated revenue provision must be based on requirements for meeting a legislatively established outcome. Statutorily mandated programs or activities funded through dedicated revenue provisions from general revenue sources must be reviewed to the same extent as programs or activities funded from the general fund. The use of a dedicated revenue provision may be justified if it satisfies one or more of the following:

(a) The program or activity funded provides direct benefits for those who pay the dedicated tax, fee, or assessment, and the tax, fee, or assessment is commensurate with the costs of the program or activity.

(b) The use of the dedicated revenue provision provides special information or other advantages that could not be obtained if the revenue were allocated to the general fund.

(c) The dedicated revenue provision provides program funding at a level equivalent to the expenditures established by the legislature.

(d) The dedicated revenue provision involves collection and allocation formulas that are appropriate to the present circumstances and current priorities in state government.

(e) The dedicated revenue provision does not impair the legislature's ability to scrutinize budgets, control expenditures, and establish priorities for state spending.

(f) The dedicated revenue provision results in an appropriate projected ending fund balance.

(g) The dedicated revenue provision fulfills a continuing, legislatively recognized need.

(h) The dedicated revenue provision does not result in accounting or auditing inefficiency.

(4) The committee shall establish procedures to facilitate a biennial review and evaluation of dedicated revenue provisions.

(5) Upon completion of the review, the committee shall report a summary of its findings to the legislature, including its recommendation of termination or extension, with or without modification, of the dedicated revenue provision. "

Section 4. Section 17-1-508, MCA, is amended to read:

"17-1-508. Review of statutory appropriations. (1) Each interim, the legislative finance committee shall, based upon procedures established pursuant to subsection (5), review statutory appropriations that are contained in the sections listed in 17-7-502 to eliminate those that no longer fulfill a legislative need and to ensure that legislative policy is clearly stated concerning the use of statutory appropriations.

(2) Each biennium, the office of budget and program planning shall, in development of the executive budget, identify instances in which statutory appropriations in current law do not appear consistent with the guidelines set forth in subsection (3).

(3) The review of statutory appropriations must determine whether a statutory appropriation meets the requirements of 17-7-501. A statutory appropriation from a continuing and reliable source of revenue may not be used to fund administrative costs. In reviewing and establishing statutory appropriations, the legislature shall consider the following guidelines. A statutory appropriation may be considered appropriate if:

(a) the fund or use requires an appropriation;

(b) the money is not from a continuing, reliable, and estimable source;

(c) the use of the appropriation or the expenditure occurrence is not predictable and reliable;

(d) the authority does not exist elsewhere;

(e) an alternative appropriation method is not available, practical, or effective;

(f) other than for emergency purposes, it does not appropriate money from the state general fund;

(g) the money is dedicated for a specific use;

(h) the legislature wishes the activity to be funded on a continual basis; and

(i) when feasible, an expenditure cap and sunset date are included.

(4) The office of budget and program planning shall prepare a fiscal note for each piece of legislation that proposes to create or amend a statutory appropriation. It shall, consistent with the guidelines in this section, review each of these pieces of legislation. Its findings concerning the statutory appropriation must be contained in the fiscal note accompanying that legislation.

(5) The legislative finance committee shall establish procedures to facilitate a biennial review and evaluation of statutory appropriations. Upon completion of the review, the committee shall report a summary of its findings to the legislature, including a recommendation for terminating, extending, or modifying the statutory appropriations reviewed."

Section 5. Section 17-2-111, MCA, is amended to read:

"17-2-111. State special revenue accounts -- report. Each biennium, the department shall provide information on all state special revenue accounts as requested by the legislative finance committee . The department shall provide the information to the legislative finance committee not later than February 1 of the year preceding a regular session of the legislature."

- END -

I hereby certify that the within bill,

SB 0050, originated in the Senate.

Secretary of the Senate

President of the Senate

Signed this	day

of	, .

Speaker of the House

Signed this	day

of	, .

SENATE BILL NO. 50

INTRODUCED BY C. SWYSGOOD

BY REQUEST OF THE LEGISLATIVE FINANCE COMMITTEE

AN ACT REVISING THE LAWS GOVERNING THE REVIEW OF LAWS CONTAINING DEDICATED REVENUE PROVISIONS AND STATUTORY APPROPRIATIONS; PROVIDING FOR DISCRETION IN WHICH LAWS TO REVIEW; AND AMENDING SECTIONS 17-1-501, 17-1-503, 17-1-505, 17-1-508, AND 17-2-111, MCA.