FISCAL NOTE

Date Requested: January 21, 2019
Time Requested: 01:41 PM
Agency: Agriculture, WV Department of
CBD Number: Version: Bill Number: Resolution Number:
2402 Introduced HB2564
CBD Subject: Agriculture


FUND(S):

Dept. of Agriculture Fund (Existing General Revenue)

Sources of Revenue:

General Fund

Legislation creates:

Creates New Expense, Creates New Program



Fiscal Note Summary


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


As written, HB2564 will place a significant demand on existing agency personnel from two (2) distinct divisions within the Department of Agriculture because of the stark changes from current legislation being proposed, especially in the first year of implementation. This is due in large part to the extensive staff retraining and public outreach that would be necessary to implement these regulations. Also, as written, no revenue could be generated by the Department of Agriculture for carrying out the regulatory activities in the bill.



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 0 164,393 64,332
Personal Services 0 139,393 59,332
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 25,000 5,000
2. Estimated Total Revenues 0 0 0


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


As noted above, staff from multiple agency divisions would be required to have extensive retraining and spend a considerable amount of time on outreach activities. It is anticipated that staff from both the Department of Agriculture's Regulatory and Environmental Affairs Division and Agriculture Business Development Division will be involved in this process. In the first year, approximately $139,000 in staff time from both divisions will be required, along with another $25,000 in support expenses to facilitate such things as reprinting new forms and informational materials, and travel for training purposes. In addition to retraining staff, agency personnel would need to attend all the local health department meetings, farmers market association meetings, WV Small Farms Conference, State Fair, etc. to educate the public on the changes that have been made with the adoption. After the first year, the staff time investment drops to approximately $59,000 and production of materials to $5,000. Agency staff are often the first contact for someone wanting to start or scale up a business. Staff time is utilized initially for taking constituent calls and answering questions ranging from how to start/scale-up a business, to looking for resources (kitchen space, packing facility, etc.) to rules and regulations and labeling questions. These calls can require research, consulting partners (local, state and/or federal), reviewing product/labels, filling out intake forms, which typically leads to many follow-up constituent calls and/or meetings. Time is also spent on development of outreach and educational materials. Additionally, WVDA staff servicing focus areas around the state spend a great deal of time talking to producers and potential producers. They are equipped with outreach and educational materials developed at the Department. However, their job is really to dive into the details and therefore may spend weeks with a producer assisting them with startup practices (permitting, WV Grown application, kitchen facility/space, production planning, financial assistance guidance, business planning, etc.) They often also work with local (public and private) institutions on ag-related issues (producer-buyer events, ag-education, nutrition education) which is additional time spent with established producers, those looking to expand, or those wanting to begin agribusinesses.



Memorandum


As written, HB2564, has several inaccuracies. It has water activity levels has listed incorrectly, it should say "water activity should be greater than 0.85" It is currently listed as ".085 (incorrect)" It also states that "canned acidified foods are exempt from all food licensing, permitting, inspection, packaging, and labeling laws of the state" This is also incorrect. Canned acidified foods MUST have an inspection and vendor permit to be made in a home kitchen. "Cottage Foods" is not defined anywhere the definitions but appears in the body of the text. Needs defined in the definitions. "Potentially Hazardous Foods" also needs defined as these foods still require a vendor permit and inspection. Under section 19-35-5, b. line 3, it must state "The production and sale of homemade non-potentially food items under this section are exempt from all food licensing, permitting, inspection, packaging, and labeling laws of the state. This exemption shall apply only if the conditions in this section are satisfied." If non-potentially hazardous is not added to this section, then it changes the entire context of the bill, allowing for all homemade food items to be sold without any permitting or inspection. The changes indicated in this bill have potential serious health related implications. In the event of a foodborne outbreak, any epidemiological traceback will become very difficult, without registration, label review, and regulatory oversight.



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