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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.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Section 17-1-501, MCA, is amended to read:
findings intent. (1) The legislature finds that provisions for dedicating state revenue and
statutorily appropriating funds have increased in number, reduce legislative control over state spending, complicate the state
funding structure, and increase the effort required to budget, appropriate, and monitor public funds. The dedication and
statutory appropriation of funds result in the inability of the legislature to practically and systematically conduct reasoned
prioritization of programs or funds. (2)(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.
(3)(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.
(1) The balance remaining in each special revenue account
terminated pursuant to legislative review must be deposited in the general fund. (2) If the legislative finance committee concurs, the department may transfer the unobligated balance in a special revenue
account to the general fund based upon the survey conducted pursuant to 17-2-111."
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
each dedicated revenue provision not exempted 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. 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
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
(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.
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."
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
each statutory appropriation appropriations that is are contained in
a section the sections listed in 17-7-502 and that is not exempted under subsection (6) of this section and shall review the
guidelines set forth in subsection (4) to eliminate statutory appropriations 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
(4) (3). (3) As part of each agency audit, the legislative auditor shall review statutory appropriations to the agency and report
instances in which they do not appear consistent with the guidelines set forth in subsection (4). (4)(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.
(5)(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. (6)(5) The legislative finance committee shall establish procedures to facilitate a biennial review and evaluation of
statutory appropriations. If the review determines that continual review of a statutory appropriation is not necessary, the
statutory appropriation may be exempt from future review. 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
Section 5. Section 17-2-111, MCA, is amended to read:
Survey of state State special revenue accounts -- report. Each biennium, the department shall conduct a
survey of provide information on all state special revenue accounts not exempt under 17-1-505 and coordinate with as
requested by the legislative finance committee to provide information necessary to complete the review required by
17-1-505. The department shall provide the survey information to the legislative finance committee not later than February 1
of the year preceding a regular session of the legislature."
- END -
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