FISCAL NOTE



FUND(S):

Reduced Cigarette Ignition Propensity Standard & Firefighter Protection Enforcement Fund and Reduced Cigarette Ignition Propensity Standard & Firefighter Protection Act Fund

Sources of Revenue:

Other Fund see above

Legislation creates:

A New Program



Fiscal Note Summary


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


The stated purpose of this bill is to require that cigarettes sold to persons in this state meet nationally recognized fire-safe standards. As written, this bill would incorporate into West Virginia law the American Society of Testing and Materials (ASTM) Standard E2187-04, Standard Test Method for Measuring the Ignition Strength of Cigarettes. This bill requires cigarette manufacturers to certify their products and pay a certification fee to the State Tax Commissioner every three years. Also, the State Tax Commissioner and the Alcohol Beverage Control Commissioner are to conduct inspections and apply penalties as necessary to those manufacturers not in compliance with the fire-safety standards. Based upon the number of “brand families” reported by cigarette manufacturers within in this State, the certification fee of $1,000 per “brand family” could potentially generate about $402,000 every three years for the Reduced Cigarette Ignition Propensity Standard & Firefighter Protection Act Enforcement Fund. This fund shall be available to the State Tax Commissioner solely to support the processing, testing, enforcement and oversight activities required by this bill. Additionally, all monies collected as penalties shall be deposited into the Reduced Cigarette Ignition Propensity Standard & Firefighter Protection Act Fund to support fire safety and prevention programs. Additional administrative costs to the State Tax Department would be minimal during the current fiscal year, but rise to $38,300 during FY2009 and $25,800 per year thereafter.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2008
Increase/Decrease
(use"-")
2009
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 4,100 38,300 25,800
Personal Services 0 20,800 20,800
Current Expenses 4,100 5,000 5,000
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 12,500 0
2. Estimated Total Revenues 0 402,000 402,000


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


As written, this bill would incorporate into West Virginia law the American Society of Testing and Materials (ASTM) Standard E2187-04, Standard Test Method for Measuring the Ignition Strength of Cigarettes. This bill requires cigarette manufacturers to certify their products and pay a certification fee to the State Tax Commissioner every three years. Also, the State Tax Commissioner and the Alcohol Beverage Control Commissioner are to conduct inspections and apply penalties as necessary to those manufacturers not in compliance with the fire-safety standards. Based upon the number of “brand families” reported by cigarette manufacturers within in this State, the certification fee of $1,000 per “brand family” could potentially generate about $402,000 every three years for the Reduced Cigarette Ignition Propensity Standard & Firefighter Protection Act Enforcement Fund. This fund shall be available to the State Tax Commissioner solely to support the processing, testing, enforcement and oversight activities required by this bill. Additionally, all monies collected as penalties shall be deposited into the Reduced Cigarette Ignition Propensity Standard & Firefighter Protection Act Fund to support fire safety and prevention programs. Additional administrative costs to the State Tax Department would be minimal during the current fiscal year, but rise to $38,300 during FY2009 and $25,800 per year thereafter.



Memorandum


The stated purpose of this bill is to require that cigarettes sold to persons in this state meet nationally recognized fire-safe standards. Proposed section 47-25-3 establishes the methodology for testing cigarettes. Under subsection (a)(8), reference is made to testing performed or sponsored by the State Tax Commissioner and requires the State Tax Commissioner to approve alternative testing methods and performance standards under certain circumstances (subsection (c)). In addition, the State Tax Commissioner is required to make a determination whether changes in the cigarettes by the manufacturer after certification will alter the cigarettes’ compliance with the standards (section 47-25-4). There is some question as to whether the Tax Department is the appropriate State organization to handle the responsibilities set forth in this bill. The State Fire Marshall typically administers fire safety and prevention programs. Also, the Bureau of Public Health provides for programs dealing with tobacco-related issues and the general public.



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kpetry@tax.state.wv.us