Date Requested: January 16, 2015
Time Requested: 10:05 AM
Agency: Alcohol Beverage Control Administration
CBD Number: Version: Bill Number: Resolution Number:
1517 Introduced SB23
CBD Subject: Alcoholic Liquors and Beers


FUND(S):

Likely general, bu 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 an "Alcohol server" a person who serves and sells alcoholic liquors or nonintoxicating beer at private clubs (on-premises - liquor, wine & beer) and for retail dealers which is defined as a Class A retailer of nonintoxicating beer under W. Va. Code 11-16-9 for consumption on or off premises (presumably beer retailers and taverns) and their employees. A "retail dealer" and "Class A Retailer" are not defined under Chapter 60 of the code. The requirements for beer should be placed in West Virginia Code s. 11-16-1 et seq.
    
    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 for such permits.
    
    This bill is similar to SB 218 from the previous legislative session.
    
    The bill has no standards for an application process or basis to grant or deny a license.
    
    The bill only permits suspension or revocation of a permit, not a warning, fine or probation.
    
    The bill states a criminal conviction of a felony for violating state alcohol or beer laws (vague) would only warrant suspension or revocation of an administrative permit. There should be an administrative hearing process.
    
    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 set any training requirements.
    
    The bill and its set fees likely do not cover the costs to implement this bill (see cost estimates below).
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2015
Increase/Decrease
(use"-")
2016
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 2014 numbers, used for SB 218, which also had a $25 permit fee, see the following information.
    
    Based on the confusing language in the bill, this bill would likely affect employees at all private clubs and all retailers with nonintoxicating beer and perhaps taverns.
    
     Based on license numbers as of 1/1/2014 (a year ago), the total number of potentially affected licensees would 4776 (as of 1/12/2015 the WVABCA has potentially 4937 licensees this bill could affect, so the permittee numbers could increase).
    
     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 throughout 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 additional 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 (note employee costs likely would increase as well since insurance and benefits cost have increased)
    
     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 requirements 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 construction, application and effect that are noted here.
    



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