FISCAL NOTE

Date Requested: January 14, 2020
Time Requested: 11:10 AM
Agency: Agriculture, WV Department of
CBD Number: Version: Bill Number: Resolution Number:
1307 Introduced HB4159
CBD Subject: Alcoholic Liquors and Beers


FUND(S):

Special Revenue - Agriculture Development Fund

Sources of Revenue:

Special Fund

Legislation creates:

Creates New Revenue, Creates New Expense, Creates New Program, Creates New Fund:



Fiscal Note Summary


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


    The Bill proposed for the purpose of creating an Agriculture Development Fund and related activities, will incur costs to the West Virginia Department of Agriculture (Department) for initial development, implementation, administration and review of the new Program. In addition, §60-8A-4 tasks the Department with issuing a permit to import fruits for hard cider production when not available in the state. During the initial year, two (2) employees, utilizing thirty (30) percent of full time employment plus cost of fringe benefits, would be required to administer activities for the development and implementation phase of programming. During subsequent years, two (2) employees utilizing twenty (20) percent of full time employment plus cost of fringe benefits, would be required to administer activities related to the fund and program. Additional costs for assisting with program promotion would be required. Information in this fiscal note was developed by the WVDA Agriculture Business Development Division, who would be responsible for the program if implemented.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2020
Increase/Decrease
(use"-")
2021
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 52,712 36,808
Personal Services 0 47,712 31,808
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 5,000 5,000
2. Estimated Total Revenues 0 0 0


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


    With the addition of new fund and program administration responsibilities, two full time employees will be required to complete necessary Program activities with the following costs:
    
    Program Development and Implementation Year 1 - (2) FTE x 30% effort + fringe rate brings us to a personnel total for Program management and on-site visits/permit issuance of $47,712. An additional $5,000 is estimated to be incurred for the promotion of the program. The total Program management cost for Year 1 is estimated to be $52,712.
    
    Program Implementation Year 2 and Fiscal Year - (2) FTE x 20% effort + fringe rate brings us to a personnel total for Program management and on-site visits/permit issuance of $31,808. An additional $5,000 is estimated to be incurred for the promotion of the program. The total Program management cost for Year 2 is estimated to be $36,808.
    
    Any future potential revenue cannot be reasonably estimated at this time.



Memorandum


    It is suggested that definitions be added in the bill to fully explain and clarify key terms and details to adequately describe the terms and concepts. Additionally, language should be added to allow the Commissioner of Agriculture the authority to promulgate rules related to carrying out this section to aid in fostering and supporting the development of agricultural sectors, such as hard cider.
    
    §60-8-2(a) States any person who is licensed to engage in any business concerning the manufacture, sale, or distribution of wine may also engage in the manufacture, sale, or distribution of hard cider without obtaining a separate hard cider license. It is requested that WV Alcohol Beverage Control provide a list of these wineries who engage in hard cider distribution to the Department in the event that the distributor needs a permit to import fruit as stated in §60-8A-4. §60-8A-4 tasks the Department with issuing a permit to import fruits for hard cider production when these are not available in the state. Clarification is needed as to whether WV Alcohol Beverage Control will coordinate the application or WVDA.
    
    Also, §60-8-3(b)(13) requires a $250 per year hard cider distributor's license; given that this is specific to hard cider it would be advantageous for the fee to go into the Agriculture Development Fund established in §19-2-12(a).



    Person submitting Fiscal Note: Alan Clemans, on behalf of Sandra Gillispie, CFO
    Email Address: sgillispie@wvda.us