Office of Sen.

Mike Johnston
Colorado General Assembly | 200 E. Colfax Avenue | Denver, CO 80203 | 303.866.4864

FACT SHEET MEMORANDUM

SB 12-083 Dynamic Modeling For Fiscal Impact Of Bills Sen. Scheffel & Rep. DelGrosso Staff Name: Dietrich Hoefner What the Bill Does: Colorado law currently requires the Director of Research at Legislative Council to develop or procure a dynamic model to evaluate the primary and secondary economic effects related to pieces of legislation. The Director has authority to select the model and is to notify the Executive Committee of the Legislative Council prior to the 1st legislative session in which the model will be used. In that first year, the model will be applied to no more than ten bills. Under current law, this pilot program cannot be implemented until the balance of the Dynamic Modeling Fund (DMF) reaches $120,000. General Fund (GF) moneys cannot currently be used in support of this program. S.B. 12-083 changes: o The director must solicit and accept proposals to develop or procure the model, o The Director must present those proposals to the Executive Committee for selection, o The $120,000 trigger is eliminated, allowing the Director to purchase the model as soon as there is enough money in the DMF, o GF restrictions are narrowed to only prohibit expenditures on the model itself, and o The DMF is exempted from reporting and repeal requirements for gifts, grants, and donations. Colorado Context: The Legislative Council currently generates fiscal notes based on implementation costs of specific programs, but does not analyze long-term economic costs and benefits of legislation. A dynamic model would model both primary and secondary economic effects of proposed legislation. National Context: In 2003, the Michigan Senate Fiscal Agency surveyed states to determine the degree to which dynamic models were used to analyze tax policy changes. The results found six states using dynamic analysis. The Michigan study also found that four other states initiated or completed development of dynamic models in the 1990s, but had subsequently discontinued their use.1 Fiscal Impact: There is no fiscal impact note associated with this legislation.

Colorado Legislative Council, Dynamic Modeling in Other States (Aug. 2004), http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs& blobwhere=1251617683512&ssbinary=true

DRAFT 2/8/2012 9:26 PM

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