Lens on the Legislature: Fiscal Notes and Impact Statements

Through noon today, 1,993 bills and 45 joint resolutions have been introduced in the 79th session. Some readers may wonder how the legislature keeps track of the impact of those bills and resolutions. There are two kinds of analysis routinely prepared by the Legislative Budget Board (LBB) staff: Fiscal Notes and Impact Statements.

A fiscal note is an estimate of the costs, savings, and revenue gains or losses that are expected to occur as a result of the bill or joint resolution that is being evaluated. The estimates only address the direct effect a bill would have on state (i.e. not including federal) government expenditures or revenues. In addition to the estimate, the fiscal note identifies the portions of the bill that would create the fiscal impact.

The law also requires a fiscal note for any bill or joint resolution that would have statewide impact on all units of local government of the same type or class, such as all cities or all counties. For example, a bill that would authorize or require a new local tax, fee, license charge or penalty would require a fiscal note.

The fiscal impact estimates are required to be projected for the five-year period that begins on the effective date of the bill or resolution. The note must also state whether or not the impact will continue thereafter. The director of the LBB may choose to project the fiscal impact beyond the five-year period.

Fiscal note estimates are based on law in effect at the time they are produced and on the Comptroller's Biennial Revenue Estimate (BRE) released at the beginning of the legislative session. They assume that no changes will be made to law other than those resulting from the particular bill's implementation. They further assume that the BRE will remain unchanged.

Fiscal notes come into the process once a bill has been referred to a committee; an author or sponsor is not authorized to request a fiscal note unless he or she is the chair of the committee to which that bill is referred.

An impact statement is created when proposed legislation has impact in specifically enumerated areas and will be the subject of next week's Lens on the Legislature.

Bills can have both fiscal notes and impact statements.

Here are some useful references about fiscal notes for the interested reader:

• How a Bill Becomes Law (House Research Organization)
• Guide to the Fiscal Notes Process for Legislative Staff and Committees
• To see the fiscal note for a specific bill, click here, then enter the bill number and click "history." On the following screen click "text" and it will bring up a screen that shows icons for the various versions of the bill and the corresponding fiscal notes.