Date Requested: February 23, 2017
Time Requested: 02:27 PM
Agency: Agriculture, WV Department of
CBD Number: Version: Bill Number: Resolution Number:
2402 Introduced HB2566
CBD Subject: Agriculture



Sources of Revenue:

Other Fund N/A

Legislation creates:

Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    The purchase threshold of 20% locally-sourced fresh produce for state-funded entities established by HB2566 will have some impact on the costs of Department of Agriculture's Cedar Lakes Camp and Conference Center. However, as noted below in the Memorandum section, there could be a much greater impact on agencies with a higher ordering volume since there is potential for a 10-15% cost increase.

Fiscal Note Detail

Effect of Proposal Fiscal Year
Fiscal Year
(Upon Full
1. Estmated Total Cost 0 945 945
Personal Services 0 0 0
Current Expenses 0 945 945
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0

Explanation of above estimates (including long-range effect):

    In calendar year 2016, the Cedar Lakes Camp and Conference Center (transferred to the Department of Agriculture on July 1, 2016) ordered approximately $31,500 in fresh produce for guest food service. If 20% of these expenditures were to be made to local producers, at an estimated 15% cost increase over established industry sources, the increase in cost would be $945/year (from $6,300 to $7,245).


    The potential cost increase is minimal for the Department of Agriculture due to its relatively small food service operations. On a statewide scale, however, the potential increase in cost for institutions with higher ordering volumes would be significantly greater. Institutions may initially have difficulty meeting the 20% requirement immediately on July 1, 2017, due to lack of WV growers with sufficient output to meet demand, variety of "in season" produce of equal quality to outside sources,and processing and/or distribution infrastructure. In other instances, institutions may already have ordering constraints or regulations in place that conflict with this legislation, such as school food programs which are required to order a certain amount of federally-sourced products (including fresh produce through the USDA-coordinated Department of Defense Fresh Fruit and Vegetable Program [DoD Fresh]).
    Aside from logistical concerns, there are areas of vagueness in SB2566, including an unclear definition of what is included in the term "fresh produce"; no guidance on how the 20% requirement will be monitored or self-reported; and lack of specific language for how institutions who grow food products on their own premises (in high tunnels, for example) can offset the sourcing requirement (that is, by volume or fair market value of self-grown products).

    Person submitting Fiscal Note: Alan Clemans, on behalf of Sandra Gillispie, CFO
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