FISCAL NOTE
Date Requested: February 08, 2024
Time Requested: 02:19 PM |
| Agency: |
Agriculture, WV Department of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3488 |
Introduced |
SB679 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
Special
Sources of Revenue:
Special Fund
Legislation creates:
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
SB 679 amends the code relating to the regulation of select plant-based derivatives, including hemp-derived cannabinoid products and kratom products.
The proposed bill primarily provides technical corrections to 19-12E and 19-12F and thus does not result in significant changes to the program or materially affect expense and revenue. However, the cost and revenue estimates have been prepared based on the anticipated operations to carry out 19-12E and 19-12F as they currently stand in WV Code (based on the original 2023 RS SB220) for informational purposes.
This fiscal note has been prepared based on the impacts to the Department of Agriculture only, specifically the Regulatory and Environmental Affairs Division which administers select plant-based derivatives. The Alcohol Beverage Control Administration has prepared a separate fiscal note.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2024
Increase/Decrease
(use"-") |
2025
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
260,000 |
628,500 |
464,500 |
| Personal Services |
222,000 |
277,500 |
388,500 |
| Current Expenses |
38,000 |
51,000 |
76,000 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
300,000 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
1,286,000 |
1,943,500 |
1,943,500 |
Explanation of above estimates (including long-range effect):
Personnel are needed for registration, sampling, outreach, laboratory testing, and administrative activities. Fiscal Year 2024 Personal Services is estimated at 4.0 FTE for salary and benefits (Estimated at $55,500 per FTE) for staff dedicated to this activity. For FY 2025, it is anticipated that an additional 1.0 FTE will be needed as kratom products are phased in. Upon full implementation, it is anticipated that 7.0 FTE total may be necessary dependent on the number of products and retail locations registered within the state.
Current expenses include mileage for inspections, embargoes, and general travel for the program (approximately $18,000 for FY 2024 and $26,000 for FY 2025 and full implementation). Maintenance and repair on laboratory testing equipment will also be necessary (approximately $20,000 for FY 2024, $25,000 for FY 2025 and $50,000 upon full implementation).
For FY 2025 an additional laboratory instrument will be needed to support the increase in samples tested.
The revenue estimate is based on current collections plus an additional two quarterly distributions from the Tax Department. For FY 2025, it is anticipated that an additional $432,500 in fees will be collected related to the phase-in of kratom and related sales tax. An additional $225,000 increase is revenue for FY2025 is anticipated related to a full year distribution of hemp-derived cannabinoid sales tax. Actual revenue will vary depending on the number of locations and products registered, as well as sales volume.
Memorandum
None noted.
Person submitting Fiscal Note: Laryssa Hoskins, on behalf of Alan Clemans, CFO
Email Address: lhoskins@wvda.us