(1) (a) The state
auditor shall evaluate the state's tax expenditures pursuant to the requirements in
this section. In evaluating each tax expenditure, the state auditor shall consult with
the intended beneficiaries or representatives of the intended beneficiaries of the
tax expenditure. In addition, if the tax expenditure is intended to benefit a specific
geographic region of the state, the state auditor shall consult with the intended
beneficiaries in that specific geographic region of the state.
(b) The state auditor's tax expenditure evaluation must include the following:
(I) A summary description of the purpose, intent, or goal of the tax
expenditure;
(II) The intended beneficiaries of the tax expenditure;
(III) Whether the tax expenditure is accomplishing its purpose, intent, or
goal;
(IV) An explanation of the intended economic costs and benefits of the tax
expenditure, with analyses to support the evaluation if they are available or
reasonably possible;
(V) A comparison of the tax expenditure to other similar tax expenditures in
other states;
(VI) Whether there are other tax expenditures, federal or state spending, or
other government, nonprofit, commercial, volunteer, or philanthropic programs, to
the extent the information is readily available, that have the same or similar
purpose, intent, or goal as the tax expenditure, how those all are coordinated, and if
coordination could be improved, or whether any redundancies can be eliminated;
(VII) If the evaluation of a particular tax expenditure's economic impact is
made difficult because of data constraints, any suggestions for changes in
administration or law that would facilitate such data collection; and
(VIII) An explanation of the performance measures used to determine the
extent to which the tax expenditure is accomplishing its purpose, intent, or goal.
The performance measures must be clear and relevant to the specific tax
expenditure being evaluated, should be measurable and track actionable goals, and
can be assessable and reportable over time. The state auditor shall consider the
original legislative intent as well as subsequent developments in the state's
economy, the national economy, and any changes in national, state, or local fiscal
policies and conditions.
(c) To the extent it can be determined by the state auditor, the tax
expenditure evaluation should also include the following:
(I) The extent to which the tax expenditure is a cost-effective use of
resources compared to other options for using the same resources to address the
same purpose, intent, or goal;
(II) An analysis of the tax expenditure's effect on competition and on
business and stakeholder needs;
(III) Whether there are any opportunities to improve the effectiveness of the
tax expenditure in meeting its purpose, intent, or goal; and
(IV) An analysis of the effect of the state tax policies connected to local
taxing jurisdictions on the overall purpose, intent, or goal of the tax expenditure.
(c.5) In addition to any other requirements in this section, the manner in
which the state auditor evaluates the state's tax expenditures is governed by the
following:
(I) New tax expenditures will be evaluated in accordance with the schedule
set by the state auditor in subsection (1)(d) of this section;
(II) Tax expenditures that have been evaluated by the state auditor in
accordance with this section do not need to be evaluated again, but the state
auditor, in the state auditor's discretion, may reevaluate tax expenditures if there
have been substantial changes to the tax expenditure;
(III) Tax expenditures that are on the state auditor's schedule for evaluation
but have been repealed or are set to repeal within a year of the evaluation do not
need to be evaluated; and
(IV) For a tax expenditure that is in effect for three years or less, the state
auditor shall make the auditor's best effort to prepare a report for the tax
expenditure using the best available data.
(d) (I) No later than September 15, 2017, the state auditor shall develop and
publish a multi-year schedule that lists all tax expenditures in law as of July 1, 2017,
and indicates the year when the evaluation report will be published for each tax
expenditure. In developing the multi-year schedule the state auditor shall endeavor
to review the oldest tax expenditures first and shall endeavor to review a tax
expenditure with a statutory repeal date so that the evaluation report for such tax
expenditure is available during the legislative session held in the calendar year
before the tax expenditure is scheduled to repeal.
(II) The state auditor may revise the schedule established in subsection
(1)(d)(I) of this section so long as the state auditor continues to provide for a
systematic evaluation of tax expenditures, including any new tax expenditures
enacted by the general assembly since the publication of a previous evaluation
report. In revising the schedule, the state auditor may consider when sufficient data
is expected to be available in order to review a tax expenditure.
(e) Notwithstanding section 2-3-103 (2), the state auditor shall present the
results in the form of an evaluation report that the state auditor shall ensure is
posted on the general assembly's website, and, notwithstanding section 24-1-136
(9), the state auditor shall deliver a copy of the report to the joint budget committee
and the finance committees of the senate and the house of representatives. The
state auditor shall ensure the first evaluation report is delivered and posted no later
than September 14, 2018, and shall ensure subsequent evaluation reports are
delivered and posted no later than June 30 of each year thereafter.
(2) (a) Any records, information, or documentation generated pursuant to this
section are work papers of the state auditor and shall be open to public inspection
only upon approval of a majority of members of the legislative audit committee
created in section 2-3-101, C.R.S. Only the specific work papers that the legislative
audit committee votes to approve for disclosure shall be open to public inspection.
Work papers that have not been specifically approved for disclosure by a majority
vote of the legislative audit committee shall remain confidential. Under no
circumstances shall the work papers be open to public inspection prior to a
completed report being posted as specified in paragraph (e) of subsection (1) of this
section.
(b) The department of revenue must provide any requested information,
analysis, or data, if available and under the control of the department, as requested
by the state auditor; except that, if the request includes confidential information,
such information must remain confidential in the hands of the state auditor, and the
state auditor is subject to the same limitations specified in section 39-21-113.
(c) The state auditor's authority set forth in section 2-3-107, C.R.S., applies to
the state auditor's evaluation set forth in this section.