17-1-505. Review of dedicated revenue provisions. (1) Each interim, the legislative finance committee shall review each dedicated revenue provision not exempted under subsection (4) and the principles of revenue dedication set forth in 17-1-507 to ensure that legislative policy is clearly stated. The committee shall also carry out the review prescribed by subsection (4).
     (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. If the review determines that the revenue dedication is constitutionally mandated, is for debt service, funds emergency services, or is a user fee that is designed to provide direct benefits for those who pay the dedicated tax, fee, or assessment in an amount commensurate with the benefits provided, the revenue dedication may be exempt from future review.
     (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. The summary must include the purpose of the revenue dedication, the source of funding, the activity funded, the number of personnel associated with the activity, and any balance in the dedicated revenue fund. The summary must state the reason why the revenue dedication is exempt from future review.

     History: En. Sec. 5, Ch. 593, L. 1993; amd. Sec. 18, Ch. 509, L. 1995.