Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund

Fiscal Note Summary

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

The purpose of this bill is to identify the persons qualified to perform inspections of individual water supply and wastewater systems, provide uniform criteria and methods for these inspections and provide for the certification of inspectors qualified to carry out these inspections. The bill requires the Secretary of the Department of Health and Human Resources to prepare and propose rules, on or before the first day of July, 2005, for legislative approval, to establish the criteria to be used in evaluating and inspecting an individual water supply system or an individual wastewater system. The bill also requires that rules be prepared to establish the standards for certification of inspectors. The Department estimates the costs associated with proposed legislation to be $186,813 the first year and $170,463 thereafter. The Department also estimates that there will be 400 certifications issued at a fee of $500 each generating $200,000 in revenue.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2005 Increase/Decrease (use"-")	2006 Increase/Decrease (use"-")	Fiscal Year (Upon Full Implementation)
1. Estmated Total Cost	0	186,813	170,463
Personal Services	0	123,613	123,613
Current Expenses	0	46,850	46,850
Repairs and Alterations	0	0	0
Assets	0	16,350	0
Other	0	0	0
2. Estimated Total Revenues	0	0	200,000

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

Personal Services = 1.0 FTE (Engineer Tech), 1.0 FTE (Sanitarian), 1.0 FTE (Office Assistant II) = $91,000. Employee Benefits @ 19.19% (FICA, PERS, Worker Comp) + $5,050/FTE (PEIA, Admin. Fees) = $32,613. Total Personal Services and Employee Benefits = $123,613. Current Expense = Travel @ $24,000, Office Rent @ $6,600, Telecommunications @ $3,750, Office Supplies/Printing @ $7,500, and Conference Room Rental @ $5,000 = Total Current Expense $46,850. Assets = Computers @ $9,000, Office Furniture @ $3,600, Miscellaneous Equipment @ $3,750 = Total Assets $16,350

Memorandum

In calculating the potential revenue generation the Department encountered several uncertainties, including the number of individuals that will be subject to the certification and testing. The Department calculated the estimate of the number of individuals that may need this certification based on the number of system installers, as well as, estimates of home inspectors and system service personnel. The proposed fee of $500 per inspector certification per year is believed to be reasonable and provide support of the estimated program costs. The proposed legislation, while allowing for the establishment of a fee does not specify if the Department can utilize that fee or if general revenue would have to be appropriated to cover the expected cost of the program. Other fee generating legislation has contained language establishing funds in the State Treasury for the purpose of supporting specific programs for which the fee was collected. The Department would request, that if it is the intent of the legislation for the fee to cover the cost of the program that language be included to establish the special revenue account in the State Treasury. Without such language the fees collected will be deposited into the general revenue fund and program support will be necessary from general revenue appropriations. As proposed in this fiscal note, the first year would require total support of general revenue funds while the program is developed and implemented. Subsequent years should be supported based on fees collected, although the second year may also require some general revenue support. It is recommended that this program be contingent on adequate fees to support the activity. The certification of individuals to conduct inspections will create some liability on the part of the Department. With the current septic systems installers program, approximately five to six complaints are received from homeowners annually. Complaints with regard to certified inspector services could also occur which would require investigation by Department staff and potential liability for errors. This legislation also may put the agency in a position of allowing local government to provide a service that the Department is regulating and that could create a potential conflict. State employed and county employed inspectors currently evaluate on-site wastewater and individual water systems. The rule should exempt these state and county employees from certification or fees. This could raise an issue of competition between government and private sector business. County health departments may lose revenue if evaluations/inspections are conducted by private individuals that obtain certification. DISCLAIMER: THIS FISCAL NOTE REPRESENTS THE DRAFT VERSION AND HAS NOT BEEN APPROVED BY SECRETARY WALKER. DUE TO THE URGENCY OF THE REQUEST THE FISCAL NOTE IS BEING SUBMITTED WITHOUT APPROVAL.

Person submitting Fiscal Note:
Email Address: fnbudoff@wvdhhr.org