SB 0851 - Fiscal Note

Fiscal Note - SB 0851 - Increases charge for privilege of selling wine; imposes new commercial producer fee

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 3612-01

BILL NO. SB 851

SUBJECT: Wine Production

TYPE: Original

DATE: February 3, 1998

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Marketing Development Fund	$143,000	$144,000	$145,000
Missouri Wine Marketing and Research Fund	$0 to $6,500	$0 to $7,000	$0 to $8,000
Total Estimated Net Effect on All State Funds	$143,000 to $149,500	$144,000 to $151,000	$145,000 to $153,000

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
NONE	$0	$0	$0
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Local Government	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 4 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials from the Department of Revenue, State Treasurer's Office, and the Office of Administration assume this proposal would not fiscally impact their agencies.

The Department of Agriculture (AGR) assumes that additional revenue would be generated as a result of a prorata charge of $3 per ton of grapes grown or one hundred sixty gallons of grape juice processed by commercial producers in Missouri. The Department of Agriculture estimates that this charge would generate approximately $6,500 in FY 99, $7,000 in FY 00, and $8,000 in FY 01 based on 700 to 800 acres of grapes grown in Missouri each year.

In addition, AGR assumes the current charge imposed by section 311.550 would increase from six cents to eight cents per gallon of wine sold in Missouri. Missouri wine vintners sell between 7 and 8 million gallons of wine each year. This increase would result in additional revenue of approximately $144,000 each year to be used for wine research, education, and marketing.

The Department of Public Safety, Division of Liquor Control, is responsible for the collection of excise taxes on 7 million gallons of wine products sold annually. This proposal would increase the current charge imposed by section 311.550 from six cents to eight cents per gallon of wine sold each year, thus increasing revenue by approximately $144,000 annually to be deposited into the Marketing Development Fund. This amount has already been shown in the financial impact section under the title "Marketing Development Fund" and therefore is not repeated.

This proposal would increase Total State Revenue.

FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
MISSOURI WINE MARKETING
AND RESEARCH FUND
Income - Department of Agriculture
Prorata Charge of $3 per ton of grapes	$6,500	$7,000	$8,000
Costs - Department of Agriculture
Enology, Research, Education and
Marketing of Wine	($0 to	($0 to	($0 to
	$6,500)	$7,000)	$8,000)
ESTIMATED NET EFFECT ON	$0 to	$0 to	$0 to
MARKETING AND RESEARCH FUND	$6,500	$7,000	$8,000
MARKETING DEVELOPMENT FUND
Income - Department of Agriculture
Check-Off Charge	$143,000	$144,000	$145,000
Long range fiscal impact - Department
of Agriculture
Effective October 1, 2001, the check-off charge would have terminated under current law. The proposal would delete the termination date; therefore, the charge of eight cents per gallon would continue, resulting in revenue of approximately $560,000 annually.
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
	$0	$0	$0

FISCAL IMPACT - Small Business

Missouri Wineries would be expected to be fiscally impacted to the extent that they would incur additional administrative costs due to the filing requirements of this proposal. These costs would be expected to be minimal.

DESCRIPTION

"Commercial Producer" is an individual or legal entity in Missouri who produces at least five thousand gallons of wine in a calendar year.

This proposal would create the Missouri Marketing and Research Council, consisting of five members, which shall provide a list of commercial producers of wine in this state to the Department of Agriculture; administer the Missouri wine marketing and research development fund; and communicate with commercial producers in order to enhance enology research, education and development of markets for wine produced in Missouri.

This proposal would also impose an additional prorata charge of three dollars per ton of grapes or

one hundred sixty gallons of grape juice processed by commercial producers in Missouri.

Payment of the charge shall be made by each commercial producer on or before the fifteenth day of January. Additional revenue derived from this charge shall be credited to the "Missouri Wine Marketing and Research Development Fund" to be used for enology research, education, and marketing wine produced in Missouri.

In addition, the proposal would increase the per gallon charge for wine from six cents to eight cents.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Department of Agriculture

Department of Revenue

Department of Public Safety - Liquor Control

Office of Administration - Budget & Planning

State Treasurer

Jeanne Jarrett, CPA

Director

February 3, 1998