FISCAL NOTE



FUND(S):

Likely General but bill does not specify

Sources of Revenue:

General Fund

Legislation creates:

A New Program



Fiscal Note Summary


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


The bill proposes a $25 fee for a permit to sell, serve or provide alcoholic liquors or nonintoxicating beer for server at private clubs (on-premises - liquor, wine & beer) and for retail dealers (beer retailers) and their employees. The $25 fee is good for 3 years. The bill does not state whether this is a nonrefundable fee. The bill does not state where the fee should be deposited. The Agency would need the fee to implement the permitting, sanctioning and hearing process. The bill requires denial of a permit based on certain requirements. The bill only permits suspension or revocation of a permit, not a warning, fine or probation. The bill is not clear on what constitutes a violation to warrant suspension or revocation of a permit. The bill does not indicate what rights an applicant or permittee has to due process and a hearing. The bill does not provide or require any training for the applicants or training requirements. The bill and fees likely do not cover the costs to implement this bill (see cost estimates below)



Fiscal Note Detail


Effect of Proposal Fiscal Year
2014
Increase/Decrease
(use"-")
2015
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 687,684 687,684 687,684
Personal Services 387,684 387,684 387,684
Current Expenses 300,000 300,000 300,000
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 398,000 398,000 398,000


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


Based on the confusing language in the bill, this bill would likely affect employees at all private clubs and all retailers with nonintoxicating beer. Based on license numbers as of 1/1/2014, the various affected licensees would 4776. Assume a 10 employee average per licensee, which may be low based on shifts and part-time employees, who would need to obtain a permit. Keep in mind some licensees may employ over a 100 affected employees. This would estimate to 47,760 permittees. Taking the 47760 * $25 = $1,194,000 over 3 years or $398,000 per year. The WVABCA currently has 4 licensing clerks to work with approximately 5000 licensees at license renewal and throughtout the year. I would guess this alcohol server permit application may not be as complex but likely an additional 4 clerks would need to be hired, along with an additional enforcement clerk, 3- 5 additional enforcement agents and additionaal attorney and secretary to keep up with permit denials and suspension/revocation hearings. Note, numbers based on estimated current salary and benefits for similar current positions. 4 Licensing Clerks with benefits = $122,456 1 Enforcement Clerk with benefits = $30,614 4 Enforcement Agents with benefits = $144,000 1 Legal Secretary with benefits = $30,614 1 Attorney with benefits = $60,000 Total = $387,684 Plus the administrative costs for conducting hearings, mailings scheduling, hearing examiners which could be an additional $150,000 -$300,000. This is a difficult number to estimate. The Agency costs would exceed the revenues from this program. If the $25 fee was refundable on a pro-rated basis over the 3 years, then the revenues would be further reduced. the bill does not specify if the fee is or is not refundable.



Memorandum


This bill has many flaws: (1) It attempts to encompass liquor, wine and beer but only places the requirement in the liquor section of the code. (2) The terms used in the bill do not define the parties seeking to be licensed correctly and the manner of wording is confusing. as to who would be required to obtain a permit. (3) The bill has no clear standard to deny someone a license other than criminal convictions of an alcohol offense, criminal convictions of a felony or violating of Chapter 60, Article 6 which does not address private clubs, taverns, beer retailers or wine and beer retailers. There is no discretion in the bill on these decisions. (4) The bill only permits the WVABCA to suspend or revoke a permit. There is no provision for a warning or fine penalty or probation. It does not state whether the person has due process rights to hearing and sets no framework for a sanctioning and hearing process. (5) The bill does not provide or require any training for the applicants or set training requirements. There may be more flaws to point out in its contsruction, application and effect thata re noted noted here.



    Person submitting Fiscal Note: Anoop Bhasin, WVABCA General Counsel
    Email Address: Anoop.K.Bhasin@wv.gov