FISCAL NOTE
Date Requested: January 16, 2018
Time Requested: 11:25 AM |
| Agency: |
Agriculture, WV Department of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1689 |
Introduced |
HB4143 |
|
|---|
| CBD Subject: |
Governor -- Bills Requested By |
|---|
|
FUND(S):
Farm Operating Fund
Sources of Revenue:
Special Fund
Legislation creates:
Decreases Existing Revenue, Decreases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
HB4143 will reduce both the revenue and expenses recorded by the Department of Agriculture in its Farm Operating Fund (1412) should the mandate in WV Code 19-12A requiring state-operated institutions to purchase state farm commodities be rescinded.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2018
Increase/Decrease
(use"-") |
2019
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
-510,000 |
-510,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
-510,000 |
-510,000 |
| 2. Estimated Total Revenues |
0 |
-510,000 |
-51,000 |
Explanation of above estimates (including long-range effect):
The proposed legislation eliminates the mandate that the Department of Health and Human Resources and Division of Corrections must purchase commodities produced on Department of Agriculture-operated farms. Assuming these agencies elect to purchase no commodities from the Department of Agriculture, annual farm revenue would be reduced by a minimum of $510,000. This is the base statutory amount transferred from the recipient agencies to the Farm Operating Fund each year via the Budget Bill as a prepayment for commodities. When the value of commodities provided to agencies exceeds this transfer amount, agencies are billed for the overage which varies from year-to-year, so the actual overall decrease in gross revenue would likely be more than $510,000.
At the same time, agency expenses would decrease by the same or greater amount, as providing these commodities to institutions require significant staff time and outlays to meet demand, including purchasing livestock at public auction, transporting livestock between auction site, state-owned farm, and processor, and managing processing records and billing.
By becoming an optional source for commodities, the Department of Agriculture could evaluate the cost of this endeavor to determine if it is possible to provide commodities to institutions at prevailing wholesale prices per the updated language in 19-12A-5(b). If commodities could be provided in a cost-effective manner, the Department of Agriculture would remain a prospective vendor for state institutions.
Memorandum
None noted.
Person submitting Fiscal Note: Alan Clemans, on behalf of Sandra Gillispie, CFO
Email Address: sgillispie@wvda.us