Sections of an FIR

Sections of an FIR

A fairly typical FIR performed by the Taxation and Revenue Department is shown in Exhibit 2 below. As illustrated in the exhibit, FIRs contain a number of sections. The purpose of many of the sections is obvious, and therefore not discussed below. Some characteristics of FIRs that may not be clear to inexperienced viewers are, however.

Short Title

This heading is in a sense a misnomer because it is not always the same as what is shown on draft legislation under the heading “ Short Title”. In many cases, proposed legislation contains no short title. When this occurs, the reviewer invents one. The essential purpose of the short title section is to provide viewers with a brief summary of the measure’s purpose. Short titles employed by TRD therefore are typically confined to a single line and provide very succinct indications of what the proposed measure does.

Conflicts, Duplicates, Companions

This section simply lists related proposed legislation and indicates the nature of the relationship. It is not particularly precise. The material is often useful, however, because it allows individuals to follow, to a limited extent, relations between proposals. The number of bills listed in the section tends to grow as the session progress – thus making similar sections in FIRs of bills introduced early in the session incorrect in a sense. Hence the heading should probably be interpreted as “legislation that duplicates, conflicts with, or is a companion to the proposed measure that the reviewer is aware of at the time the FIR was written”.


This section provides a summary of substantive provisions of a bill. In some cases – typically extremely long and complex proposals – a “section-by-section summary” is provided in the “Other Issues” section of an FIR.

Fiscal Impact

The first set of numbers shown provides impact estimates likely during the first several years the measure is to become effective. Since, in many cases, revenues during the first year will be less than those following years, a “full year” estimate is also provided.7 The most common example of the latter is imposition of a local-option gross receipts tax. It normally requires at least two months between the time gross receipts taxes are imposed and revenues begin flowing to various government funds following imposition of a gross receipts tax rate. Ten months of revenues are therefore received during the first year of imposition. The first year impact is therefore typically estimated as 10/12ths of the full-year impact for gross receipts tax revenues. As shown in Exhibit 2, funds affected are listed in the fiscal impact section. Estimates reflect revenue changes to a particular fund or entity that analysts believe would occur if a proposal were to be enacted. They often therefore incorporate data from General Fund revenue forecasts.
A region to the left of first year impact is reserved for titles showing separate effects on a particular fund for actions in a particular bill. Suppose, for example, the measure reviewed in Exhibit 2 imposed a reduced rate and simultaneously changed the tax base via deduction. One line to the left of numbers shown in the FY2003 estimate may have been labeled “rate change” while another was labeled “deduction”. Alternatively, suppose the measure created personal and corporate income tax impacts on the General Fund. One line would be labeled “personal income tax” while the other would be labeled “corporate income tax”.

The text below the numbers shown in the fiscal impact section often describes assumptions, data sources and calculations made in determining the impacts. It also often discusses probable accuracy of the estimates. Behavioral changes assumed in the impact estimate are sometimes provided in this section. If the estimate is indeterminate (see below) the reason it is so is also discussed in the section.

Administrative Impact

Costs of administering the proposed measure are discussed in this section, as are indications of whether the measure can be performed with resources currently available to the Department, or whether an appropriation is needed to cover costs associated with implementing the measure. Descriptions particular administrative changes that would be by the proposal are also provided.

Technical Issues

This section describes common drafting errors, e.g., spelling or grammatical errors or failure to list appropriate items in the measure’s title, as well as more complex problems that may make implementing a proposal difficult. Examples of the latter consist of provisions whose intent is unclear and suggestions for improving clarity, unintended consequences of proposed legislation, characteristics of the proposal that may be contrary to its apparent intent, failure to define terms employed in the proposal, failure to specify distribution of a fund created by the measure and provisions in the proposal that are unnecessary due to similar provisions elsewhere in statute.

Other Impacts and Issues

This heading is sometimes labeled “Substantive Issues”. The heading is used for a variety of purposes, including providing additional data or text. It is also where commentary regarding efficiency or equity considerations is placed. Sometimes “demonstrations” or “illustrations” are shown under “Other Impacts and Issues” which indicate effects of the proposal on particular jurisdictions. An example: a local option measure that counties would be able to impose, although counties that would impose it is not known. Illustration showing revenues generated in each county, assuming all counties enacted a proposed measure are common. An example of an “illustration” is shown in Exhibit 5 below.

7 Actually, all sorts of scenarios are considered, ranging from “phased in” tax increases to programs that require several years to become effective.

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