Senate Bill No. 238
Introduced By _______________________________________________________________________________
A Bill for an Act entitled: "An Act prohibiting state agencies that set and collect charges for services from maintaining in an account receiving the charges a cash balance that is greater than necessary to finance the services of the agency for more than 2 years; requiring reduction of charges for services in certain instances; providing definitions and exceptions; requiring reports; and providing a delayed effective date and a retroactive applicability date."
WHEREAS, some state agencies set and collect charges to finance all or part of the cost of some public services; and
WHEREAS, there is a growing concern that some state agencies are building large reserves in operating revenue because of the amount of these charges for services; and
WHEREAS, governments must be responsible to the people whom they serve and must always be vigilant not to charge or retain more in charges for services than is justified by the operating expenses of the government programs supported by the charges.
Be it enacted by the Legislature of the State of Montana:
NEW SECTION. Section 1. Definitions. Unless the context requires otherwise, the following definitions apply to [sections 1 through 4]:
(1) "Approving authority" means the approving authority as defined in 17-7-102.
(2) "Capital project" means the planned and necessary replacement or upgrade of equipment that is budgeted for by a state agency.
(3) (a) "Charge for services" or "charge" means a fee, charge, levy, or other assessment that is established by state agency rule and that is:
(i) charged by the state agency to a user of a service provided by the state agency;
(ii) charged by the state agency in exchange for a license, permit, or other type of authority granted by the state agency; or
(iii) collected exclusively to provide promotional, marketing, or other services to the persons from whom the charge is collected and that is not assessed and collected pursuant to Title 15.
(b) For the purposes of [section 2(1) or (3)(a) or 4], the term includes a fee, charge, levy, or other assessment established as provided in subsection (3)(a) and a fee, charge, levy, or other assessment established by statute.
(4) "Charge for services account" or "account" means an account within the state special revenue fund created by 17-2-102, the exclusive source of revenue for which is one or more charges for services or interest or other income on the account.
(5) "Legislative audit division" means the legislative audit division established by 5-13-301.
(6) "Operating plan" means the financial plan used by a state agency showing in detail the purposes for which the state agency's operating revenue will be spent in the current fiscal year of the state agency and the account from which the expenditures will be made.
(7) "State agency" means an agency as defined in 17-7-102.
NEW SECTION. Section 2. Limitation on balance in charge for services account -- exceptions -- audits. (1) Except as provided in this section, a state agency that deposits money into a charge for services account may not maintain a cash balance in the account greater than twice the annual appropriation for that year or greater than the biennial appropriation from the account for the biennium, which includes that year as shown in the state agency's initial operating plan.
(2) A state agency may maintain more money in a charge for services account than is allowed by subsection (1) if the approving authority for the state agency certifies to the legislative finance committee established by 5-12-201:
(a) the date on which the account balance exceeded the limitation provided in subsection (1);
(b) the amount of money by which the account balance exceeded the limitation provided in subsection (1);
(c) the amount of money usually needed for the operation of the service or function of the state agency for 1 year, along with supporting facts;
(d) whether the amount of money within the account that is in excess of the limitation provided in subsection (1) is necessary for the operation of the service or function of the state agency because of:
(i) an emergency;
(ii) an unusual circumstance; or
(iii) a fluctuation in the services, function, or charges for services of the state agency; and
(e) the facts and circumstances demonstrating the emergency, unusual circumstance, or fluctuation claimed in subsection (2)(d).
(3) The legislative audit division shall include in financial audits performed by or at the direction of the legislative audit division a determination of whether money is or has been retained in a charge for services account contrary to the requirements of:
(a) this section; or
(b) [section 3].
(4) Except as otherwise provided in [section 1(3)(b)], this section does not apply to:
(a) a charge for services made by one state agency to another state agency;
(b) a charge for services account maintained by a state agency only for the purposes of replacement of buildings or to pay the costs of other future capital projects;
(c) an account used for the deposit of both one or more charges for services and money from another source other than interest earnings on the account; or
(d) charges for services deposited in the state general fund.
NEW SECTION. Section 3. Reduction of charge required. A state agency that maintains a cash balance in a charge for services account contrary to the limitation provided in [section 2(1)] for more than 60 days shall, within 90 days after the end of the 60-day period, reduce the charge for services or, in the case of an account into which two or more charges for services are deposited, reduce one or more charges for services determined by the state agency until the cash balance in the account complies with the limitation in [section 2(1)].
NEW SECTION. Section 4. Reports required. The approving authority for a state agency shall annually report in writing to the legislative finance committee by August 1:
(1) each state agency that had a cash balance in a charge for services account contrary to the limitation provided in [section 2(1)] during the previous 12 months;
(2) the facts certified by the approving authority pursuant to [section 2(2)];
(3) each state agency that has complied with the requirements of [section 3] and the circumstances of its compliance; and
(4) each state agency that has not complied with [section 3] and the circumstances of its noncompliance.
NEW SECTION. Section 5. Retroactive applicability. [This act] applies retroactively, within the meaning of 1-2-109, to charges for services, as defined in [section 1], collected prior to [the effective date of this act].
NEW SECTION. Section 6. Effective date. [This act] is effective July 1, 1998.