FISCAL NOTE
Date Requested: February 15, 2023
Time Requested: 08:26 AM |
| Agency: |
Alcohol Beverage Control Administration |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3601 |
Introduced |
HB3467 |
|
|---|
| CBD Subject: |
Alcoholic Liquors and Beers |
|---|
|
FUND(S):
General
Sources of Revenue:
Special Fund
Legislation creates:
Decreases Existing Revenue
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
The bill has extensive drafting and technical issues and errors. The bill is illogical and inconsistent in the application of requirements to the WVABCA, the Tax Commissioner and other agencies.
The bill, as written, purports:
(1) to allow municipalities to establish "entertainment zones" that would allow for bars and restaurants to sell drinks for to-go consumption in designated areas - There is no charge for this service and would drastically reduce license revenue for fairs and festivals.
(2) to allow non-resident business owners to open a brewery which violate the 3 Tier system and the function resident brewers.
(3) to direct home sales of beer to be on equal footing with wine, cider, and liquor - it is illegal to sell beer without a license.
(4) to allow retail liquor stores, beer stores, and wine stores to have direct-to-home sales - not sure what this is, there is already home delivery options in the code.
(5) to remove ABV caps on wine, cider, and beer - this makes no sense.
(6) to remove background check and label approval requirements for temporary brewery permit - this makes no sense all licensees should have their backgrounds check and such check is a federal check.
(7) to allow breweries with a temporary license to sell to any retail store or bar/restaurant - this would violate the 3 Tier system.
(8) to separate the Tax Department from ABCA. The bill restricts employment to just one agency. The agencies are not together.
(9) to remove fingerprinting requirement for license/permit applications - this makes no sense since under the 21st Amendment and the state constitution the state is charged with regulating public health and safety and selecting suitable applicants for licensure.
(10) to provide oversight of ABCA and Tax Department from unilaterally changing or modifying interpretations of state law/code - this makes no sense. The Agencies are under the Executive branch of government and are audited by currently.
(11) to require the ABCA to create an online label database, to provide an online submission of ABCA documents and applications, and to allow ABCA licensees to pay for license applications/renewals with standard business checks or credit/debit cards
- the WVABCA has online capabilities however licensees have chosen not to utilize these online abilities in the past. Further, having to utilize state systems for payment and website site development have added to the cost and difficulty to implement
(12) to require a 15-day maximum time period for processing ABCA paperwork - Currently, the WVABCA has 30 days from receiving an application to issue or deny a license. However, many applicants have to obtain zoning, health permits and etc, from state, county or city agencies which takes additional time to complete the paperwork.
(13) to allow private clubs to batch cocktails and dispense cocktails without additional approval from the ABCA - there are currently free permits to do this
(14) to allow wine, cider, and liquor to be dispensed on patios/outdoor spaces - there is already authority to do this.
(15) to allow stadiums and arenas to sell liquor and cocktails - there is already authority to do this.
(16) to remove food sale requirements for carry out alcohol sales at bars and restaurants - this is a bad idea.
(17) to legalize neon beer signs - currently legal for up to $25, but actual use are LED lights.
(18) to allow alcohol manufacturers to own more than one facility - this likely violates the 3 tier system.
(19) to provide term limits for ABCA administration - this makes no sense as the Commissioner serves at the will and pleasure of the Governor.
(20) to provide for a third-party audit of ABCA - This makes no sense as the WVABCA is audited and produces and annual report.
(21) to forbid the ABCA administration from contacting licensees by phone - this makes no sense as many licensees do not operate in Charleston.
(22) to require the ABCA to announce compliance sweeps/stings/checks in the same manner that DUI checkpoints are announced - This makes no sense as this would skew the results of all checks and overstate compliance numbers.
(23) to remove the monthly "account sweeping" requirement - licensees must pay for liquor when they order liquor and this makes no sense.
(24) to adjust the two percent gross tax on distilleries - this money is transferred to retail liquor outlets for the privilege to alcohol at the manufacturing. This was a deal cut by the manufacturers.
(25) to provide for a license for art gallery beer and wine. The WVABCA has licenses for such business.
(26) to provide for a license for food hall that has separate sales for food and alcohol and shares a communal space - the WVABCA has a bill to address a private food court.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
1,300,000 |
1,550,000 |
1,550,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| 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):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
The bill would require an online database online, online submission of ABCA documents and applications, and to allow WVABCA licensees to pay for license applications/renewals with standard business checks or credit/debit cards - this new system could cost $750,000 and likely have an annual maintenance cost of $250,000. For at total of $1 million.
The bill would require a 15-day maximum time period for processing ABCA paperwork - this would require doubling staff by 10 employees at an estimated annual cost $550,000.
There may additional cost with any reduction in any license fee purportedly made by the bill.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
The bill has extensive drafting and technical issues and errors. The bill is illogical and inconsistent in the application of requirements to the WVABCA, the Tax Commissioner and other agencies across all state government.
The bill, as written, purports:
(1) to allow municipalities to establish "entertainment zones" that would allow for bars and restaurants to sell drinks for to-go consumption in designated areas - There is no charge for this service and would drastically reduce license revenue for fairs and festivals.
(2) to allow non-resident business owners to open a brewery which violate the 3 Tier system and the function resident brewers.
(3) to direct home sales of beer to be on equal footing with wine, cider, and liquor - it is illegal to sell beer without a license.
(4) to allow retail liquor stores, beer stores, and wine stores to have direct-to-home sales - not sure what this is, there is already home delivery options in the code.
(5) to remove ABV caps on wine, cider, and beer - this makes no sense.
(6) to remove background check and label approval requirements for temporary brewery permit - this makes no sense all licensees should have their backgrounds check and such check is a federal check.
(7) to allow breweries with a temporary license to sell to any retail store or bar/restaurant - this would violate the 3 Tier system.
(8) to separate the Tax Department from ABCA. The bill restricts employment to just one agency. The agencies are not together.
(9) to remove fingerprinting requirement for license/permit applications - this makes no sense since under the 21st Amendment and the state constitution the state is charged with regulating public health and safety and selecting suitable applicants for licensure.
(10) to provide oversight of ABCA and Tax Department from unilaterally changing or modifying interpretations of state law/code - this makes no sense. The Agencies are under the Executive branch of government and are audited by currently.
(11) to require the ABCA to create an online label database, to provide an online submission of ABCA documents and applications, and to allow ABCA licensees to pay for license applications/renewals with standard business checks or credit/debit cards
- the WVABCA has online capabilities however licensees have chosen not to utilize these online abilities in the past. Further, having to utilize state systems for payment and website site development have added to the cost and difficulty to implement
(12) to require a 15-day maximum time period for processing ABCA paperwork - Currently, the WVABCA has 30 days from receiving an application to issue or deny a license. However, many applicants have to obtain zoning, health permits and etc, from state, county or city agencies which takes additional time to complete the paperwork.
(13) to allow private clubs to batch cocktails and dispense cocktails without additional approval from the ABCA - there are currently free permits to do this
(14) to allow wine, cider, and liquor to be dispensed on patios/outdoor spaces - there is already authority to do this.
(15) to allow stadiums and arenas to sell liquor and cocktails - there is already authority to do this.
(16) to remove food sale requirements for carry out alcohol sales at bars and restaurants - this is a bad idea.
(17) to legalize neon beer signs - currently legal for up to $25, but actual use are LED lights.
(18) to allow alcohol manufacturers to own more than one facility - this likely violates the 3 tier system.
(19) to provide term limits for ABCA administration - this makes no sense as the Commissioner serves at the will and pleasure of the Governor.
(20) to provide for a third-party audit of ABCA - This makes no sense as the WVABCA is audited and produces and annual report.
(21) to forbid the ABCA administration from contacting licensees by phone - this makes no sense as many licensees do not operate in Charleston.
(22) to require the ABCA to announce compliance sweeps/stings/checks in the same manner that DUI checkpoints are announced - This makes no sense as this would skew the results of all checks and overstate compliance numbers.
(23) to remove the monthly "account sweeping" requirement - licensees must pay for liquor when they order liquor and this makes no sense.
(24) to adjust the two percent gross tax on distilleries - this money is transferred to retail liquor outlets for the privilege to alcohol at the manufacturing. This was a deal cut by the manufacturers.
(25) to provide for a license for art gallery beer and wine. The WVABCA has licenses for such business.
(26) to provide for a license for food hall that has separate sales for food and alcohol and shares a communal space - the WVABCA has a bill to address a private food court.
Person submitting Fiscal Note: Anoop Bhasin, General Counsel on behalf of WVABCA
Email Address: Anoop.K.Bhasin@wv.gov