FISCAL NOTE

Date Requested: January 21, 2019
Time Requested: 01:45 PM
Agency: Agriculture, WV Department of
CBD Number: Version: Bill Number: Resolution Number:
2178 Introduced SB383
CBD Subject: Agriculture


FUND(S):

WV Healthy Food Crop Block Grant Program Fund (New)

Sources of Revenue:

Special Fund

Legislation creates:

Creates New Expense, Creates New Program, Creates New Fund: WV Healthy Food Crop Block Grant Program Fund



Fiscal Note Summary


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


SB383 proposes creation of a West Virginia Healthy Food Crop Block Grant Program (Program) and related activities, and will result in costs to the Department of Agriculture (Department) for the 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. 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 for the implementation phase of programming. Additional costs for program promotion, training, application processing, establishment and facilitation of a review committee and technical assistance would be required.



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 55,212 39,308
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 0 0
2. Estimated Total Revenues 0 0 0


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


As written, this bill would not specifically generate new revenue from external sources, as the majority of funding would come from a $1M transferred from general revenue over a five (5) year period. Revenue from other non-general revenue sources cannot be estimated at this time. The bill mandates that program administration occur outside of the Department of Agriculture. However, even basic administrative oversight will result in state agency expenses being incurred, especially in the beginning year(s) of the program as it is fully developed. With the addition of new program administration responsibilities, 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. 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 the promotion, training, application processing, establishment and facilitation of a review committee and technical assistance. The total Program management cost for Year 2 is estimated to be $39,308.



Memorandum


In §19-36-2 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 to clearly identify those responsible for the administration of this program. For example, in §19-36-2 Definitions, it defines a “Nonprofit food and farm organization” as meaning a Title 26 U. S. C. § 501(c)(3) food and farm organization that is involved in food production and farm development throughout the state that is "capable of partnering with the department" to effectuate the grant program. According to this definition, it is unclear what would qualify a food and farm organization as being "capable of partnering with the department". In addition, §19-36-3 (a) states that the Program will be "administered by the Commissioner of Agriculture", however goes on to state in (d) that the department "may not use the grant funds for administrative expenses, as the majority of the administrative duties are to be delegated to the nonprofit food and farm organization partner." Subsequently, in the event that the non-profit food and farm organization falters and is unwilling/unable to preform the required duties to administer this program, according to this bill the Department has the ultimate responsibility to administer the program without access to the administrative income for support. Therefore, an overview of the impact that this measure will have on costs and revenues to the Department for the administration of this program are included in this Fiscal Note Summary and in order to support effective administration of this fund, it is suggested that language be added to permit a percentage of annual fund revenue be used for administrative expenses. This would parallel other special program and funds, such as the WV Spay Neuter Assistance Program established under WV Code 19-20C, which permits up to ten percent (10%) of annual revenue be used for program oversight. Lastly, there are a multitude of unknown factors that could have a fiscal and/or programmatic impact to the Department. For example, the bill describes a scenario of a non-profit food and farm organization taking possession of food intended for human consumption by our most vulnerable population, including patients who are children, elderly or socioeconomically disadvantaged, without identifying a plan for mitigating risks to the consumer or identifying who would be held liable if a food safety event should occur. Grant recipients, are only defined in §19-36-2 as a "farmer located in West Virginia who is registered with the West Virginia Secretary of State's office as a farm business" and additional prerequisites for participation are not included in this bill. However, if passed, 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. Another example of an unknown factor is program pricing. In §19-36-1(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.



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