Fiscal Note Act Exposed

The Fiscal Note Act is listed under ALEC's Tax and Fiscal Policy Task Force and was included in the 1995 Sourcebook of American State Legislation. According to ALEC.org, the Act was re-approved by the Board of Directors on January 29, 2013. (Accessed on 1/27/2016).

ALEC Bill Text

Summary

The Fiscal Note Act is designed to make state legislatures more fiscally responsible by informing legislators of all costs associated with a particular bill.

This Act requires a reliable estimate of the cost of any proposed legislation. It prohibits any committee of the legislature from holding hearing on any legislative instrument until a fiscal note on that instrument has been prepared by the legislative fiscal office. The fiscal note must contain an estimate of the immediate and long-range costs of the measure, as well as a listing of any revenue it will produce or savings it will bring about. Costs are itemized in the fiscal note to reflect the capital expenditures and operating costs needed to implement the Act.

Model Legislation

{Title, enacting clause, etc.}

Section 1.

This act may be cited as the Fiscal Note Act.

Section 2. {Requirements for a fiscal note.}

Every legislative instrument that would affect the receipt, expenditure, or allocation of state or local funds, either directly or indirectly, shall have attached to it prior to its consideration by any committee of either House of the legislature a fiscal note which shall include a reliable estimate of the fiscal impact of such measure. A fiscal note shall not constitute a legal attachment of the proposed measure.

Section 3. {Preparation by legislative fiscal office.}

The author of a measure requiring a fiscal note shall be responsible for obtaining the required note from the legislative fiscal officer, directly or through the legislative council. The legislative fiscal officer shall be responsible for obtaining, directly or through another agency, the information necessary to complete the fiscal note from the agency best suited to furnish the information. The agency furnishing the information to the legislative fiscal officer shall do so within 24 hours; thereafter, the legislative fiscal officer shall prepare the fiscal note and transmit it to the author of the measure. The legislative fiscal officer, for good and appropriate cause, may approve an extension of the time within which the information is to be furnished.

Section 4. {Form of the fiscal note.}

(A) Fiscal note forms, which shall consist of two parts, a work sheet and a fiscal effect form, shall be prepared and distributed by the legislative fiscal officer to the appropriate agencies.

(B) The fiscal effect form shall be factual, brief, and concise, and shall provide an estimate in dollars of the immediate and long-range fiscal effect of the measure. If no dollar estimate is possible, the fiscal note shall set forth the reasons therefor. The fiscal note shall not contain reference to the merits of the measure.

(C) The work sheet shall include a breakdown of the costs that the measure is expected to cause, such as personnel, materials, supplies, and capital outlay, the effect of expenditures or allocation or receipt of funds, such other information as is required by rules and regulations which may be adopted by the legislative fiscal officer, and such other pertinent information as the legislative fiscal officer may deem appropriate.

(D) The fiscal note shall be prepared in quintuplicate, and the name of the agency furnishing the information required shall appear at the end of the fiscal note and the original of both the work sheet and the fiscal effect form shall be signed by the head of the agency or by his/her designee.

(E) Taking into consideration the fiscal note prepared by the agency and all other relevant information available, the legislative fiscal officer shall prepare a fiscal note in the same manner as provided in this Section and shall transmit it in quintuplicate to the author as provided in Section 3. The fiscal note prepared by the agency shall be preserved by the legislative fiscal officer and a copy thereof shall be transmitted to the author or any other person upon request.

Section 5. {Absence of fiscal note.}

Whenever any committee of either house reports any measure with any amendment which alters the fiscal effect of the measure, there shall be attached to the amendment a fiscal note delineating the fiscal effect of the change proposed by the amendment. The committee chairman shall request such note from the legislative fiscal officer. In the like manner, whenever a floor amendment that alters the fiscal effect of the measure is proposed without a fiscal note of the fiscal effect of such amendment attached thereto, any member of the house in question may offer a motion that the amendment be withdrawn. The amendment may be proposed again at any time it would otherwise be in order, provided that the required fiscal note is attached.

Section 6. {Absence of fiscal note.}

Whenever a measure requiring a fiscal note has been reported by any committee of either house of the legislature without a fiscal note, any member may, on the reading of such measure, offer a motion that the measure be returned to the calendar.

Section 7. {Confidentiality of certain legislation.}

Agencies involved in the preparation of the required information for a fiscal note shall keep in strict confidence the subject matter of the proposed measure and the information contained in the fiscal note prior to the filing or pre-filing of such measure with the chief clerical officer of the respective house, except that the author or authors of the measure and legislative council shall be furnished a copy of the fiscal note. Any person who violates any provision of this Section shall be fined not more than $500 or imprisoned not more than six months, or both.

Section 8. {Exemptions.}

A fiscal note shall not be required for the general appropriations bill, any bill which appropriates a specific amount, nor any measure affecting state funds for retirement purposes.

Section 9. {Programs using federal funds.}

Notwithstanding the provisions of Section 8 above, a fiscal note shall be required for any measure concerning any program wholly or partially funded by federal monies which involves an expenditure of state funds or any legislative appropriation of funds. Such fiscal note shall reflect the immediate and long-range fiscal effect on the state of any such program and shall also include the following information:

(A) The length of time federal funds are to be provided; and

(B) The probable amount of state funds required to continue the program.

Such fiscal notes shall comply with all rules and contain all the information contained in other fiscal notes.

Section 10. {Severability clause.}

Section 11. {Repealer clause.}

Section 12. {Effective date.}

ALEC's Sourcebook of American State Legislation 1995