FISCAL NOTE

Date Requested: February 05, 2019
Time Requested: 01:29 PM
Agency: Alcohol Beverage Control Administration
CBD Number: Version: Bill Number: Resolution Number:
2955 Introduced SB529
CBD Subject: Alcoholic Liquors and Beers


FUND(S):

General

Sources of Revenue:

General Fund

Legislation creates:

Increases Revenue From Existing Sources



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. SB 529 is focused on amending the Nonintoxicating Beer Act and has several measures to benefit beer retailers, resident brewers, brewers, distributors and the WVABCA. SB 529 would add nonintoxicating beer floor plan extensions for retailers wanting to do events, from time to time, extended from their licensed premises to perhaps their parking lot. SB 529 would remove the 2 growler limit for brewers and resident brewers and retailers selling beer to consumers. SB 529 allows for better tracking and accountability with: (1) beer label registration (required in most states) and allows a fee for recoupment of costs and helps brewers and resident brewers make better business decisions regarding the number of beer labels to present to the WVABCA rather than presenting all labels for every beer product made by the brewer or resident brewer but then not ever selling the beer label in WV. This label registration would be good for 3 years. (2) beer transportation permits to account for the vehicles distributing beer from the brewer, resident brewer and distributor and this is already tracked for liquor and wine. (3) brewer, resident brewers and distributor representative licenses to hold such representatives accountable for improper conduct and trade practice violations and reduces the burden on the brewers, resident brewers and distributors. SB 529 also removes various beer bonding requirements for brewers, resident brewers, distributors and Class S licensees. This will save the parties between $3000 to $1000 per year depending on the cost of their bonds. SB 529 also has licensing clean up issues with respect to issuing or denying a license in 30 days and a reactivation requirement for licensee who fail to renew their licenses prior to July 1 of each year.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2019
Increase/Decrease
(use"-")
2020
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
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 337,701 166,431 122,241


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. Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government. SB 529 would add nonintoxicating beer floor plan extensions for retailers. This would generate an estimated $15,600 per year and likely could increase each year as events become more popular. SB 529 would remove the 2 growler limit for brewers and resident brewers and retailers selling beer to consumers. This should generate more sales tax and beer barrel tax revenue but it is too speculative to quantify. SB 529 allows for better tracking and accountability with: (1) beer label registration - likely the first year $153,210 would be generated from the active codes in the database and subsequent years approximately $43,440 based on new labels. The numbers would likely adjust downward after year 1 since this is a 3 year registration and the parties would be more selective in the products registered. (2) beer transportation permits - some extrapolation from liquor and wine permits should approximately require 17,150 permits and generate $18,491 annually. Resident Brewers would be approximately $288, distributors approximately $1,160 and brewers/contracted trucking firms approximately $17,043. (3) brewers reps likely generates $5,000, resident brewers generates $2,400 and distributor representative licenses generates $20,000, or $27,400 annually. (4) reactivation requirement generates, if the numbers were the same as last year, in year 1 of implementation 820 * 150 = $123,000, year 2 - 410 * 150 = 61,500, year 3 - 205 * 150 = $30,750. Note, the revenue generated may be initially a larger amount but likely greater compliance would reduce the amount over time.



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. Note some assumptions and extrapolations were made in the Fiscal Note Detail and actual numbers may vary. SB 529 would provide greater flexibility to licensees, applicants and the public while still responsibly permitting activities.



    Person submitting Fiscal Note: Anoop Bhasin on behalf of WVABCA
    Email Address: anoop.k.bhasin@wv.gov