FISCAL NOTE

Date Requested: January 26, 2023
Time Requested: 03:25 PM
Agency: Lottery Commission, WV
CBD Number: Version: Bill Number: Resolution Number:
2794 Introduced HB3044
CBD Subject: Legal Gaming


FUND(S):

State Excess Lottery Fund

Sources of Revenue:

Special Fund

Legislation creates:

Decreases Existing Revenue



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. As currently drafted, HB 3044 contains ambiguous language with respect to the calculation that determines those permittees that qualify or do not qualify for the reduction in permit fee. However, the Lottery has completed a few different calculations based upon different interpretations of the proposed language, which indicate 10% to 30% of permittees will not qualify for the reduced permit fee on an annual basis, meaning 70% to 90% will qualify to have the fee reduced from $1,000 to $500 annually. Based upon those percentages, the Lottery will realize a reduction in the collection of permit fees in the range of $3,150,000 (70%) to $4,050,000 (90%) annually, the actual number being based upon the number of permittees that actually qualify for the reduction each year. Over a 10-year permit period, such change will result in a decrease in revenue available for appropriation of $28,350,000 to $36,450,000 with respect to the Excess Lottery Fund, the fund in which the permit fees are directly deposited. The stated purpose of the bill is to provide an incentive to permittees to upgrade their machines and/or operating software, the intended result being an increase revenue for LVL, and also the State. Currently, there is no mechanism in the bill that requires the reduction in permit fees to be reinvested into the machines or software, and therefore, the Lottery cannot project what, if any, positive financial impact HB 3044 may have on the LVL program and state revenues. It is the Lottery’s understanding that a committee substitute will be introduced, or amendment adopted to address the ambiguity in the calculation as currently presented, which will enable the Lottery to more accurately project the effect of the reduction in permit fees for qualifying permittees.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2023
Increase/Decrease
(use"-")
2024
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 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. As currently drafted, HB 3044 contains ambiguous language with respect to the calculation that determines those permittees that qualify or do not qualify for the reduction in permit fee. However, the Lottery has completed a few different calculations based upon different interpretations of the proposed language, which indicate 10% to 30% of permittees will not qualify for the reduced permit fee on an annual basis, meaning 70% to 90% will qualify to have the fee reduced from $1,000 to $500 annually. Based upon those percentages, the Lottery will realize a reduction in the collection of permit fees in the range of $3,150,000 (70%) to $4,050,000 (90%) annually, the actual number being based upon the number of permittees that actually qualify for the reduction each year. Over a 10-year permit period, such change will result in a decrease in revenue available for appropriation of $28,350,000 to $36,450,000 with respect to the Excess Lottery Fund, the fund in which the permit fees are directly deposited. The stated purpose of the bill is to provide an incentive to permittees to upgrade their machines and/or operating software, the intended result being an increase revenue for LVL, and also the State. Currently, there is no mechanism in the bill that requires the reduction in permit fees to be reinvested into the machines or software, and therefore, the Lottery cannot project what, if any, positive financial impact HB 3044 may have on the LVL program and state revenues. It is the Lottery’s understanding that a committee substitute will be introduced, or amendment adopted to address the ambiguity in the calculation as currently presented, which will enable the Lottery to more accurately project the effect of the reduction in permit fees for qualifying permittees.



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. N/A.



    Person submitting Fiscal Note: W. Brian Nickerson, General Counsel
    Email Address: bnickerson@wvlottery.com