FISCAL NOTE

Date Requested: January 10, 2020
Time Requested: 03:42 PM
Agency: Agriculture, WV Department of
CBD Number: Version: Bill Number: Resolution Number:
1061 Introduced SB18
CBD Subject: Agriculture


FUND(S):

Special Revenue - WV Healthy Food Crop Block Grant Program Fund

Sources of Revenue:

Special Fund

Legislation creates:

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 a West Virginia Healthy Food Crop Block Grant Program (Program) and related activities, will incur costs to the West Virginia Department of Agriculture (WVDA) to assist with the initial development, implementation, administration and review of the new Program. 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, including interviewing and selecting a nonprofit food and farm organization to implement and administer the program. 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. Additional costs for assisting with program promotion, training, establishment and facilitation of a review committee and technical assistance/monitoring 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 0 255,212 239,308
Personal Services 0 47,712 31,808
Current Expenses 0 7,500 7,500
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 200,000 200,000
2. Estimated Total Revenues 0 0 0


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


The initial $200,000 five-year transfer from General Revenue has been incorporated into the cost estimates above. While $200,000 shall be deposited into the fund for each of the following five fiscal years, this bill does not allows the Department to utilize any of the grant funds for administrative costs. §19-38-5 (c) allows for funding to be allocated to the nonprofit food and farm organization for administration, not the Department. With the addition of new Program administration responsibilities, including interviewing and selecting a nonprofit food and farm organization to implement and administer the program, two (2) 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 of $47,712. An additional $7,500 is estimated to be incurred for the promotion, training, application processing, establishment and facilitation of a review committee and technical assistance/monitoring. The total Program management cost for Year 1 is estimated to be $55,212. Program Implementation Year 2 and Fiscal Year - (2) FTE x 20% effort + fringe rate brings us to a personnel total for Program management of $31,808. An additional $7,500 is estimated to be incurred for assisting with program promotion, training, establishment and facilitation of a review committee and technical assistance/monitoring would be required. The total Program management cost for Year 2 is estimated to be $39,308. Any future potential revenue into the fund beyond the General Revenue transfer cannot be reasonably estimated at this time.



Memorandum


In §19-38-2 of the bill, sufficient definitions are not provided to fully explain and clarify key terms and details to adequately describe the Program structure, thereby creating areas of vagueness throughout. For example, the bill does not fully define terms such as community health initiatives. In addition, the definition of Non-profit food and farm organization narrows the possibility of many non-profit agencies being eligible to administer the program due to the constraints of the definition. While §19-38-3.(a) requires the WV Healthy Food Crop Block Grant fund to be administered by the Commissioner, §19-38-4 requires that the Commissioner shall interview and select a non-profit food and farm organization to partner with for the implementation and administration of the crop grant program. In the event that the non-profit food and farm organization falters and is unwilling/unable to perform the required duties to implement and administer this program, this bill does not allow for the Department to implement and administer the crop block grant program, only the fund. It is suggested that language be added to permit the Department to implement and administer the program if a non-profit food and farm organization is unable. There would seem to be an overlap in activities and potentially opportunities missed with a non-profit administering the Healthy Food Crop Block Grant Program and the Department administering the Fresh Food Act. Both the Fresh Food Act and the Healthy Food Crop Block Grant Program are promoting locally grown food for the benefit of stimulating the state agriculture economy and the health of WV residents. §19-38-1 (c) states the program will provide an incentive of up to $10,000 per year to eligible West Virginia farmers who commit to growing fruits and vegetables that serve community health initiatives. There is no mention in the bill as to how these funds will be disbursed. Grant recipients, are only defined in §19-38-2 as a "farmer located in West Virginia who is registered with the West Virginia Secretary of State's office as a farm business and who further meets the grant criteria set forth in this bill or by rule." Additional prerequisites for participation are not included in this bill so they would be included in a rule the Commissioner may propose. The provisions of this bill will be detailed in the rule making process and food safety audits, licensing, inspection, according to federal, state and local rules will impact the fiscal viability and the Department's ability to implement this bill without additional allocations. An additional example of unknown consideration is the uncertainty of the grant recipients' relationship to the end consumer. The bill is unclear if a requirement will be included in the Program for the grant recipient to utilize the "non-profit food and farm organization" to facilitate the sale of the product or if they will have the ability to sell directly to the healthy food initiative participating organization. This ambiguity makes a fiscal/programmatic impact determination challenging. §19-38-7 requires a a program review and accountability report evaluating the effectiveness of the grant program during the most recent fiscal year for which information is available be prepared by the Department. As stated above, the Department does not have the authority to implement and administer the crop block grant program, only the fund. Furthermore, in §19-38-1(d) the bill states that produce will be available for purchase at "wholesale rates". This rate is not more fully described in the definitions and it is unclear who/what would determine the pricing structure available to the farmers. The pricing structure of local products is a significant factor in determining which market a farmer chooses to enter. "Wholesale rates", without fully understanding how it is defined in the Program, could negatively impact the farmer's decision to apply for this grant opportunity, ultimately hindering the goal of increasing the amount of produce available for distribution and the overall sustainability of the Program. Lastly, it seems as if it may be inefficient for a state agency to develop rules for a program that they will not administer.



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