Date Requested: January 23, 2015
Time Requested: 12:58 PM
Agency: Alcohol Beverage Control Administration
CBD Number: Version: Bill Number: Resolution Number:
2461 Introduced SB290
CBD Subject: Alcoholic Liquors and Beers


FUND(S):

General

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.


    This bill is similar to SB 273 in that it attempts to reduce fees for brewers only, however this bill has many flaws.
    
    The bill's primary problem is that it only addresses brewers and ignores resident brewers. There is no definitional change made to the distinction between licensed resident brewers and licensed brewers.
    
    The bill proposes a $750 license fee for all "brewers" who produce less than 12,500 barrels for sale in this state and $1500 for all other "brewers". The bill also requires estimation and reporting requirements for determining the production and thus the license fee.
    
    Lastly the bill authorizes only "brewers" to provide only nonintoxicating craft beer samples (no regular nonintoxicating beer samples) at 2.5 oz and up to 16 oz per person. As written this provision would not apply to resident brewers.
    



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 -67,200 -67,200 -67,200
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other -67,200 -67,200 -67,200
2. Estimated Total Revenues 0 0 0


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


    This bill is similar to SB 273 in that it attempts to reduce fees for brewers only, however this bill has many flaws.
    
    The bill proposes a $750 license fee for all "brewers" who produce less than 12,500 barrels for sale in this state and $1500 for all other "brewers".
    
    Based on numbers from the Tax Commissioner there are currently 91 brewers paying the beer barrel tax:
    
    Under 6,000 barrels – 81 Brewers
    6,000-20,000 barrels – 7 Brewers
    Over 20,000 barrels – 3 Brewers
    
    If 81 plus just 3 of the brewers between 6,000-20,000 are under 12,500 barrels of production for sale in WV, then this could result in a substantial loss of revenue for the general fund. If 84 brewers qualify at $750 then this could be a potential loss of revenue of $63,000 (from the current licensee fee of $1500).
    
    
    Also the 7 resident brewers who have brewpub licenses would see a fee reduction from $1000 to $400, resulting in a revenue loss of $4,200.
    
    Therefore total revenue loss could be $67,200, assuming no new licensees.
    



Memorandum


    This bill has many flaws.
    
    The bill's primary problem is that it only addresses brewers and ignores resident brewers. There is no definitional change made to the distinction between licensed resident brewers and licensed brewers.
    
    The bill proposes a $750 license fee for all "brewers" who produce less than 12,500 barrels for sale in this state and $1500 for all other "brewers".
    
    Lastly the bill authorizes only "brewers" to provide only nonintoxicating craft beer samples (no regular nonintoxicating beer samples) at 2.5 oz and up to 16 oz per person. As written this provision would not apply to resident brewers.
    
    This bill unlike SB 273 does not address bonding issues for brewpubs owned by resident brewers.



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