Tax Drafting Conference

TAX DRAFTING CONFERENCE

TOOLS FOR

SIMPLIFYING COMPLEX LEGISLATION

Prepared by

David C Elliott

27-29 November 1996
Auckland, New Zealand

Contents

Page #

The crystal set
An obsession for clarity
Information anxiety

Document organization 2

How will the document be used?
Organizing for readers
Overall organization

Using questions 3

Using diagrams 4

Using examples 5

Using formula 5

Identifying defined words 7

Drafting in the second person 8

Using algorithms 9

Conclusion 11

TAX DRAFTING CONFERENCE

TOOLS FOR SIMPLIFYING COMPLEX LEGISLATION

The crystal set

There is always the complaint that legislation is complicated. Of course it is, because life is complicated. The bulk of the legislation enacted nowadays is social, economic or financial; the laws they must express and the life situations they must regulate are in themselves complicated, and these laws cannot in any language or in any style be reduced to kindergarten level, any more than can the theory of relativity. One might as well ask why television sets are so complicated. Why do they not make television sets so everyone can understand them? Well, you can't expect to put a colour image on a screen in your living-room with a crystal set. And you can't have crystal set legislation in a television age.

Dr Elmer Driedger

An obsession for clarity

If, as Garth Thornton suggests(1), legislative drafters must be obsessed with the desire to have their work readily understood, we cannot be satisfied with Dr Driedger’s response to complaints about the complexity of statute law, even though as policy makers and drafters ourselves, we might sympathize with what he says.

Ever since reading Dr Driedger's remark, I have wondered if it needs to be true – whether, despite the complexity, drafters can simplify complex ideas. It is an endless task, but this paper outlines some of the more innovative approaches being taken, or on the verge of being taken, to expressing complex ideas as simply and clearly as possible. In a modification of Einstein’s words to

Make things as simple as possible but no simpler.

Information anxiety

People read legislation looking for answers to questions. More often than not they find what Richard Saul Wurman calls "information anxiety"(2); the black hole between data and knowledge. It happens when "information" doesn't tell us what we want or need to know.

The starting point to fill that black hole for legislative drafters is to accept that what we write is not for ourselves but for others.

The moment we accept that fact our minds start to reorient themselves. We start to think not only of getting what we write technically correct – but of getting the message across to the audience for whom we write. It means we become interested in clarity as well as precision. That leads us to ask

· what helps people understand texts (and then to use those things in our writing); and

· what impedes understanding (and so avoid those things in our writing).

Writing for others means we are constantly on the look-out for ideas. Ideas that help communication. Ideas we can then use for particular drafting jobs. What we should be about is to reverse the extraordinarily strange situation that free societies have arrived at where their members enter binding obligations they do not understand and are governed from cradle to grave by legislative texts they cannot comprehend.(3) (4)

Document organization

Documents should be organised to help the most likely readers. Legislation is not read for pleasure but to get information. So, from a reader's point of view, good writing is writing that structures information in a way that enables readers to get the information they seek as easily as possible.

How will the document be used?

Organizing a document well means that we must know who the most likely readers of it will be. The writer is often not the best person to make organizational decisions. Clients can help here because they should know who the likely readers are and the questions they commonly ask and mistakes most often made by the readers they serve.

Research into how people read and react to documents can be a guide to internal organization. If we can foresee how readers are likely to use a particular document we can organize it so that it is as efficient as possible for their use. For legislation we have barely entertained the notion that testing, or reader considerations, should affect our writing.

Organizing for readers

The usual drafting practice is to impose the writer's thinking process and organization on readers. A process and organization that is entirely logical to the writer but not necessarily helpful for the reader.

We can look at organization of statutes on several levels:

(a) overall organization(5)

(b) organization within Parts and divisions

Overall organization

In particularly long Acts it is helpful to divide them up into more manageable chunks and to start off each chunk with an explanation of what the chunk contains. This could be done in the form of a mini table of contents, a diagram or flow chart, or explanatory text.

Here is how the UK Tax Law Rewrite project has proposed to outline one of its chapters:(6)

New Zealand's Taxation (Core Provisions) Act contains this illustration of the structure of Part B of the Act:

The following example outlines a complaint and appeal process in a recommended Property Assessment Act.

Using questions

Most readers come to legislation with questions: can I do this? what happens if I do that? how can I get this or that?(7)

How helpful it would be if readers coming to a document with a question not only found the same question in the document – but the answer. It is a simple matter for documents to be given appropriate headings stated as questions; and suddenly the document becomes alive, meaningful, useful – it becomes functional.

The Local Government Act (NSW) used this approach in several of its Parts. For example,

CHAPTER 10 – HOW ARE PEOPLE ELECTED TO CIVIC OFFICE?

PART 1-
PART 2-
PART 3-
PART 4-
PART 5-
PART 6- / WHO MAY VOTE?
WHO MAY BE ELECTED?
WHAT IS THE SYSTEM OF ELECTION?
WHEN ARE ELECTIONS HELD?
HOW ARE CASUAL VACANCIES FILLED?
HOW ARE ELECTIONS CONDUCTED?
Division 1-The role of the Electoral Commissioner
Division 2-Electoral rolls
Division 3-Nominations and election
Division 4-Where residents fail to vote
Division 5-Miscellaneous

Using diagrams

It is easy to get lost in a series of complex provisions. An explanatory line diagram can help paint the big picture so that readers can find a road map out of the confusion. A line diagram was included in Alberta's 1973 Labour Relations Bill (although not enacted as part of the legislation) to explain how parties in collective bargaining could move to a strike or lock out position through a complex process.

New Zealand included the following flow chart in its Taxation (Core Provisions) Act:

And Australian drafters have made particular use of diagrams:

Local Government Act (NSW)

Using examples

Occasionally examples are used in legislation.(8) They have been welcomed by a wide variety of readers and more use should be made of them.

Examples illustrate ideas. The texts we write have ideas behind them – our ideas. If those ideas are not, or are inadequately, conveyed to the readers of the text there is a lack of communication. One way of making sure the ideas we have get across to readers is to help readers with examples.

For additional thoughts on the use of examples, and illustrations of when examples have been used, see Using Examples in Legislation.(9)

Using formula

Although formula are now commonly used in legislation, I have been surprised at the number of people who have a "math attack" at the very mention of the word "formula".

Dr Driedger has explained the reasons for using formula well(10)

I would like to see more legislation in mathematical form. A provision of the Income Tax Act reads as follows:

(6) Where a corporation is or has been a personal corporation, notwithstanding paragraph (b) of subsection (1), its tax-paid undistributed income at a specified time is the amount that it would be according to the terms of paragraph (b) of subsection (1) plus the amount by which

(a) the aggregate of the incomes deemed under section 67 to have been distributed to its shareholders while it was a personal corporation prior to that time, exceeds

(b) the aggregate of dividends received from the corporation prior to that time and not included, by virtue of section 67, in computing the incomes of the shareholders by whom they were received.

Re-written in symbols it would be much easier to read and understand. Thus:

(6) Where a corporation is or has been a personal corporation, notwithstanding paragraph (b) of subsection (1), its tax-paid undistributed income at a specified time is

A = (B - C)

Where

A = the amount it would be accorded under paragraph (1)(b)

B = the aggregate of the incomes deemed under section 67 to have been distributed to its shareholders while it was a personal corporation prior to that time,

C = the aggregate of dividends received from the corporation prior to that time and not included, by virtue of section 67, in computing the incomes of the shareholders by whom they were received.

A pension act has the following provision:

5.(1) The supplementary retirement benefit payable to a recipient for a month in any year is an amount equal to the amount obtained by multiplying

(a) the amount of the pension payable to the recipient for that month

(b) the ratio that the Benefit Index for that year bears to the Benefit Index for the retirement year of the person to or in respect of whom or in respect of whose service the pension is payable

and subtracting therefrom

How much simpler it would be to write it as follows: The supplementary retirement benefit payable to a recipient for a month in any year is

(M x BY) - M
BR

where

M = the amount of the pension payable to the recipient for that month;

BY = the Benefit Index for that year; and

BR = the Benefit Index for the retirement year of the person to or in respect of whom or in respect of whose service the pension is payable.

Identifying defined words

Drafters continue to experiment with techniques to indicate that words used in a text have defined meanings.

Some drafters italicize defined words:

3 Audit engagements and review engagements

No person may engage in an audit engagement or a review engagement nor represent or imply an ability to do so, unless that person

(a) is a public accounting firm or supervised by a public accounting firm,

(b) practices in accordance with the Certified Management Accountants Act or the Certified General Accountants Act, or

[Work in progress draft of a
Chartered Accountants Act (Alberta)]

Some drafters note defined words in an explanation following the section in which the defined word is used:

Taxation (Core Provisions) Act New Zealand

And a recently proposed model for South African legislation uses an expanded marginal note to indicate defined words:

Human Rights Commission Act (South Africa) (Proposed model)

Drafting in the second person

There are occasions when drafting in the second person is effective:

Complaints about valuations

23 What can you file a complaint about?

You can file a complaint with a board of revision about the assessed value of your property or about anything else on or omitted from a valuation notice.

24 When can a municipality file a complaint, and about what?

(1) A municipality can file a complaint with a board of revision about the assessed value of property in the municipality or about anything else on or omitted from a property valuation roll or valuation notice.

(2) One municipality can also file a complaint with a board of revision about all or any of the assessed values of property in another municipality.

25 How do you file a complaint?

(1) You can make your complaint by writing to a board of revision within 30 days from the date the valuation notice is mailed to you.

(2) You must

(a) give details of your complaint and your reasons for it, and

(b) give the address where you can be contacted and to which notices can be sent.

(3) You lose your right to file a complaint if you do not do so within the required period.

Proposed Property Assessment Act (Alberta) 95.425

How do I sign my CB license application?

(a) / If you are an individual, you must sign your own application personally.
(b) / If the applicant is not an individual, the signature on an application must be made as follows:
Type of applicant
Partnership
Corporation
r Association
Government Unit / Who must sign
One of the partners
Office
Member who is an officer
Appropriate elected or appointed official

[Federal Communications Commission
Rules for the Citizens' Band Radio Service]

And the proposed rewrite of the Taxes Management Act 1970 includes several sections drafted in the second person. Here is one of them: