FISCAL NOTE
Date Requested: March 17, 2025
Time Requested: 03:31 PM |
| Agency: |
Governor's Office, The |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2885 |
Introduced |
HB2543 |
|
|---|
| CBD Subject: |
Rule Making Authority |
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FUND(S):
Depending on the agency the costs may come from general or special revenue
Sources of Revenue:
Other Fund Depending on the agency the costs may come from general or special revenue
Legislation creates:
Increases Existing Expenses
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 purpose of this bill is to require agencies to include in the submission of legislative rules to the Legislative Rulemaking Review Committee ("LRMRC") (1) a statement of economic impact on the state, its residents, and those doing business in the state; and (2) an economic impact statement when the proposed rule could have an economic impact of more than $200,000 in a given year or $1,000,000 over a five-year period.
The first requirement is not anticipated to have a significant impact on the costs and revenues of state government. Agencies are already require to provide a short statement of economic impact in the notice of emergency rule, notice of public comment, and agency approved forms as part of the legislative rulemaking process. Additional clarity and directive on the factors to consider when completing that part of the rulemaking forms is not expected to add materially to agencies costs.
The second requirement could increase the state's costs between $400,000 to $4,800,000 depending on the cost of an individual economic impact statement ("EIS") and how many rules would meet the $200,000 threshold for an EIS. The lower range of costs estimates were used for the fiscal note below.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2025
Increase/Decrease
(use"-") |
2026
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
400,000 |
400,000 |
| 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 costs estimates provides are based on a number of assumptions and estimates.
Additional clarity and directive on the factors to consider when completing the statement of economic impact in the various rulemaking forms is not expected to add materially to agencies costs.
Instead, the estimated costs are associated with the filing of a more detailed economic impact statement ("EIS"). EIS that have been performed related to some past legislation were detailed (often 50-plus page) expert reports performed by university economics departments. Assuming that HB2543 would require the same type of EIS, it could cost the state $10,000 on average per report. If alternatively an agency were required to hire a third-party economist or consulting firm, the costs could be even higher. For example, assuming an hourly expert rate between $250 to $500 for an economist and a completion time of between four to six weeks, an individual EIS performed by a third-party expert could cost anywhere between $40,000 to $120,000.
Without more detailed analysis, it is unclear how many agency, board, or commission rules could meet the $200,000 EIS threshold under HB2543. But over 120 rules were submitted to the LRMRC for the 2025 Legislative Session. If that number of rules is consistent year-over-year and if even a third of those rules triggered an EIS, it could cost the state anywhere between $400,000 to $4,800,000 each year. If half those rules met the threshold, it could cost the state $600,000 to $7,200,000. That estimate could be substantially higher if the $200,000 threshold was also read to apply to proposed rules that merely extend an expiring sunset clause.
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.
Without more extensive analysis, it is unclear how many agency, board, or commission rules could meet the $200,000 EIS threshold under HB2543. It is also unclear if an EIS would be required for a proposed rules that merely extend an expiring sunset clause.
Person submitting Fiscal Note: Sean M. Whelan
Email Address: sean.m.whelan@wv.gov