FISCAL NOTE
Date Requested: February 14, 2017
Time Requested: 01:45 PM |
| Agency: |
Agriculture, WV Department of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2388 |
Introduced |
SB283 |
|
|---|
| CBD Subject: |
|
|---|
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FUND(S):
0131 - Dept. of Agriculture Fund
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.
SB283 creates the Food Production Act which places responsibility for the regulation and inspection of commercial food production under the Department of Agriculture. Presently, this responsibility lies with the DHHR's Bureau of Public Health Office of Environmental Health Services. Information provided in this Fiscal Note is based upon ongoing discussions with DHHR staff who currently oversee that agency's Food Manufacturing Facility regulatory program.
The estimates provided below reflect the anticipated cost of field staff to carry out inspection activities; additional review of existing DHHR food production regulatory activities and federal food production standards would have to be carried out in order to determine needs (and associated costs) aside from field activities to successfully implement the Food Production Act under the Department of Agriculture.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2017
Increase/Decrease
(use"-") |
2018
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
145,000 |
107,500 |
| Personal Services |
0 |
98,000 |
98,000 |
| Current Expenses |
0 |
7,000 |
7,000 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
10,000 |
0 |
| Other |
0 |
30,000 |
5,000 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
In order to carry out inspection activities, the Department of Agriculture would need an additional 2.00 FTE field inspection staff, at an annual salary of $35,000 plus benefits for each. Existing DHHR inspection staff could not be transferred to the Department of Agriculture due to being utilized for other DHHR programs not affected by SB283.
Extensive training is required for new staff to be properly certified to complete food manufacturing inspections. It is estimated that training costs could be $15,000 per employee for the first 1-2 years of employment (as well as in subsequent years for new employees in the event of employee turnover). Additionally, equipment and other initial setup costs would be approximately $5,000 per employee.
Once the program is underway, it is estimated that $7,000 per year will be required for inspector travel, as well as $2,500 per employee for specialized continuing education (most likely only available at out-of-state training locations). DHHR presently receives $23,000 from FDA to offset the cost of inspections, but that amount may fluctuate from year to year depending on the availability of federal funding.
Revenue cannot be accurately estimated at this time. DHHR presently utilizes a tiered licensing fee based upon annual gross sales of the food manufacturing facility. Fees range from $35/year for the smallest facilities, up to $1,000/year for a large facility with over $50 million in sales. Future annual revenue would vary depending on the number of facilities regulated each year and the fee structure implemented by the Department of Agriculture.
Further review of current and projected inspection revenue would be required in order to determine if it would be sufficient to cover field, laboratory and administrative costs of this program, or if a General Revenue appropriation would be required to support these activities.
Memorandum
The proposed language in SB283 for WV Code 19-36-4 references, "the appropriate regulations of the U.S. Department of Agriculture." Reference should also be made to the U.S. Food and Drug Administration, in order to recognize the significant regulatory role of that agency in food production.
As noted above, implementation cost of the program may be substantial, but will require further discussion with and review of the existing DHHR program, as well as consideration of current and forthcoming federal regulations, in order to develop an accurate estimate of its impact.
Person submitting Fiscal Note: Alan Clemans, on behalf of Sandra Gillispie, CFO
Email Address: sgillispie@wvda.us