1. Legislation, with the exception of appropriation bills, introduced into either house of the general assembly shall, before being acted upon, be submitted to the oversight division of the committee on legislative research for the preparation of a fiscal note. The staff of the oversight division shall prepare a fiscal note, examining the items contained in subsection 2 and such additional items as may be provided either by joint rule of the house and senate or by resolution adopted by the committee or the oversight subcommittee.

2. The fiscal note shall state:

(1) The cost of the proposed legislation to the state for the next two fiscal years;

(2) Whether or not the proposed legislation will establish a program or agency that will duplicate an existing program or agency;

(3) Whether or not there is a federal mandate for the program or agency;

(4) Whether or not the proposed program or agency will have significant direct fiscal impact upon any political subdivision of the state;

(5) Whether or not any new physical facilities will be required; and

(6) Whether or not the proposed legislation will have an economic impact on small businesses. For the purpose of this subdivision “small business” means a corporation, partnership, sole proprietorship or other business entity, including its affiliates, that:

(a) Is independently owned and operated; and

(b) Employs fifty or fewer full-time employees.

3. The fiscal note for a bill shall accompany the bill throughout its course of passage. No member of the general assembly, lobbyist or persons other than oversight division staff members shall participate in the preparation of any fiscal note unless the communication is in writing, with a duplicate to be filed with the fiscal note or unless requested for information by the fiscal analyst preparing the note. Violations of this provision shall be reported to the chairman of the legislative research committee and subject the fiscal note and proposed bill to subcommittee review. Once a fiscal note has been signed and approved by the director of the oversight division, the note shall not be changed or revised without prior approval of the chairman of the legislative research committee, except to reflect changes made in the bill it accompanies, or to correct patent typographical, clerical or drafting errors that do not involve changes of substance, nor shall substitution be made therefor. Appeals to revise, change or to substitute a fiscal note shall be made in writing by a member of the general assembly to the chairman of the legislative research committee and a hearing before the committee or subcommittee shall be granted as soon as possible. Any member of the general assembly, upon presentation of new or additional material, may, within three legislative days after the hearing on the request to revise, change or substitute a fiscal note, request one rehearing before the full committee to further consider the requested change. The subcommittee, if satisfied that new or additional material has been presented, may recommend such rehearing to the full committee, and the rehearing shall be held as soon as possible thereafter.

4. The director of the division, hereinafter provided for, or the director’s designees, shall seek information and advice from the affected department, division or agency of state government and shall call upon the research staffs of the house of representatives and of the senate, and upon the staffs of the house and senate appropriations committees for assistance in carrying out fiscal notes and evaluations of programs selected by the committee, during the interim, and each staff shall supply such information or advice as it deems appropriate in response to the inquiry. The state auditor shall, upon request, cooperate and provide assistance in the conduct of audits and the preparation of reports made in connection therewith.