FISCAL NOTE
Date Requested: February 06, 2024
Time Requested: 01:58 PM |
| Agency: |
Alcohol Beverage Control Administration |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3488 |
Introduced |
SB679 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
special
Sources of Revenue:
Special Fund
Legislation creates:
Creates New Expense
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
SB 220 from 2023 passed and created a hemp cannabinoid product tax and a kratom tax at 11%. That bill created revenues from the tax. The changes in this bill do not create any revenue.
The changes in the bill that affect WVABCA would impact costs of the agency with respect to enforcement of administrative penalties on various Department of Agriculture hemp and kratom retail licensees.
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 |
162,500 |
325,000 |
325,000 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
400,000 |
400,000 |
400,000 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
SB 220 from 2023 passed and created a hemp cannabinoid product tax and a kratom tax at 11%. That bill created revenues from the tax. The changes in this bill do not create any revenue. SB 220's tax has generated a quarter of revenue and conservative yearly estimate would be $400,000 to the WVABCA. Again, there is not a full year of data collected yet. With more enforcement, hemp and kratom tax revenue could be negatively impacted.
The changes in the bill that affect WVABCA would impact costs of the agency with respect to enforcement of administrative penalties on various Department of Agriculture hemp and kratom retail licensees.
License numbers provided Department of Agriculture indicate that there are 816 hemp retail licenses and 204 kratom retail licensees. It is unclear at this time if there is some overlap between the hemp and kratom licensees or if there are some stand alone licensees. Further it is not clear if there is overlap with WVABCA licensees as well.
Note, more kratom licensees are expected after January 1, 2025, when kratom law becomes effective.
Some assumptions being made, if there a 1000 separate licensees. The WVABCA will develop goal of a percentage of licensees to visit (working with Agriculture and Tax), If that number is 50%, then the WVABCA would visit 500 retail licensees either during regular hours and some overtime hours. At a 50% goal the cost would likely be approximately $325,000. Again, the cost factor could vary based on the salary of the agents used and whether during regular time or overtime hours worked by the agents and underage operatives. This is a rough estimate as the number of actual licensees is not well known at this time. At this time, it is unclear whether additional agent positions would need to be requested. This fiscal note does not account for Agriculture's or Tax's fiscal impact.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
Person submitting Fiscal Note: Anoop Bhasin, counsel on behalf of the WVABCA
Email Address: Anoop.K.Bhasin@wv.gov