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SOP & Fiscal Note Drafting Guide

 

A Drafting Guide for Statements of Purpose and Fiscal Notes

 

A statement of purpose (SOP) is a brief explanation, in lay terms, of what a bill would do or what changes a bill would make to existing law. The SOP and fiscal note should be no longer than one page. However, it is preferable to go to a second page rather than to overfill one page. You must submit a paper copy and/or an electronic copy of your SOP/fiscal note to the appropriate committee secretary.

A fiscal note must explain the impact on state or local government appropriations or expenditures of funds, and must explain how the bill would increase or decrease revenues or if it would require future appropriations of funds. The Idaho Legislature’s Joint Rule 18 defines fiscal note requirements in detail.

In preparing fiscal notes, the guidelines below should be followed:

  • The name of a contact person and that person’s telephone number must be included on the statement of purpose and fiscal note.

  • The fiscal note should address the impact to the general fund in dollar terms, not exclusively in statements of general economic benefit. If there is no impact to the general fund, then the note should so state this.

  •  The note should address the fiscal impact on any other state fund or expenditure, not just the general fund or general fund programs.

  • Remember, Joint Rule 18 applies to fiscal impacts on local government as well.

  • The note should identify the fiscal impact of at least one full fiscal year (not calendar year), and care should be given to understanding the fiscal impact of legislation that is phased in or has changing requirements over more than one fiscal year.

  • Fiscal impacts should be concise–not to exceed one page and may be included on the same page as the statement of purpose–and address the total fiscal impact of the legislation, not just the mathematics of the changes, e.g. a fiscal impact that changes the grocery credit from $15 to $30 for an estimated 500,000 income tax filers should state: “Fiscal impact to state general fund revenues is an estimated loss of $7,500,000 from individual income tax collections for FY 2010,” as opposed to a statement like, “an additional credit of $15 per filer would benefit 500,000 filers by doubling their refund of sales tax paid on groceries, which amounts to another $300 worth of groceries that could be purchased tax free.”

  • Fiscal notes should identify the source of revenues or funds affected, e.g. corporate income tax, cigarette tax, mine license tax, etc., (or) Department of Commerce–Tourism Promotion Fund, etc. Referencing the fund only is often not sufficient to identify the tax or fee source that is impacted.

  • The committee to which the bill is assigned will review the statement of purpose and fiscal note to be sure that they meet the above requirements.

A quick way to determine whether your fiscal note complies with requirements is to check it against the following list:

  • Contact person included?

  • Telephone number of contact person listed?

  • Impact to state general fund explained?

  • Impact to other state funds or expenditures addressed?

  • Impact on local government addressed?

  • If fiscal impact of legislation is phased in over more than one fiscal year, does fiscal note address impact of full fiscal year?