(1) The director of research shall establish a pilot program for the purpose of developing or procuring a dynamic model to analyze the economic impact of bills introduced by the general assembly that can be used as soon as possible.

(2) The director of research shall investigate all opportunities for developing or procuring a dynamic model, including private, nonprofit, and academic alternatives. Any dynamic model selected by the director shall consider the direct and indirect or secondary economic effects related to the bill, including an estimate of the probable behavioral responses of taxpayers, businesses, and other persons to the proposed tax policy change. It is not necessary that the model be kept at the director's office.

(3) Repealed.

(4) (a) Prior to the first regular session that the dynamic model can be used, the director of research shall notify the executive committee of the legislative council that the dynamic model is ready to be used to analyze bills during the upcoming regular session. If the model is ready, the executive committee shall select no more than ten bills to be analyzed using the dynamic model. Only bills that make a tax policy change are eligible to be analyzed. The analysis of the economic impact using a dynamic model shall be in addition to any fiscal note that is prepared pursuant to the rules of the general assembly.

(b) After the first regular session in which the dynamic model is used, the director of research shall prepare a report evaluating how the dynamic model worked during the session and making recommendations for the use of the dynamic model in future sessions of the general assembly, including the feasibility of expanding the scope of the type of bills for which the dynamic model may be used. The report shall be prepared no later than January 1 of the year following the session in which the dynamic model was used.

(5) (a) It is the intent of the general assembly that for the fiscal year commencing on July 1, 2006, no general fund moneys be appropriated for the purpose of implementing this section.

(b) The director of research is authorized to accept gifts, grants, or donations from private or public sources for the purposes of this section. All private and public funds received through gifts, grants, or donations shall be transmitted to the state treasurer, who shall credit the same to the dynamic modeling cash fund, which fund is hereby created and referred to in this subsection (5) as the "fund". The moneys in the fund shall be subject to appropriation by the general assembly for the direct and indirect costs associated with the implementation of this section. Any moneys in the fund not expended for the purpose of this section may be invested by the state treasurer as provided by law. All interest and income derived from the investment and deposit of moneys in the fund shall be credited to the fund. Any unexpended and unencumbered moneys remaining in the fund at the end of a fiscal year shall remain in the fund and shall not be credited or transferred to the general fund or another fund.

(c) Except as otherwise provided in subsection (3) of this section, the director of research shall not undertake the pilot program unless the balance in the fund is one hundred twenty thousand dollars. If the balance of the fund is at least one hundred twenty thousand dollars, then the director of research shall contract with an independent contractor to help implement the provisions of this section.