SB 0761 - Fiscal Note

Fiscal Note - SB 0761 - Numerous Changes to Grain Dealer/Warehouse Laws

L.R. NO.  1869-05
BILL NO.  SB 761
SUBJECT:  Grain Dealer and Warehouse Laws
TYPE:     Original
DATE:     January 30, 1996



                              FISCAL SUMMARY
                    ESTIMATED NET EFFECT ON STATE FUNDS


FUND AFFECTED              FY 1997             FY 1998           FY 1999
General Revenue          ($80,390)           ($44,619)         ($46,496)

Total Estimated
Net Effect on All
State Funds              ($80,390)           ($44,619)         ($46,496)

                   ESTIMATED NET EFFECT ON FEDERAL FUNDS


FUND AFFECTED              FY 1997             FY 1998           FY 1999
None                            $0                  $0                $0

Total Estimated
Net Effect on All
Federal Funds                   $0                  $0                $0

                    ESTIMATED NET EFFECT ON LOCAL FUNDS


FUND AFFECTED              FY 1997             FY 1998           FY 1999
Local Government                $0                  $0                $0



                              FISCAL ANALYSIS

ASSUMPTION

The Department of Agriculture (DOA) assumed the number of licensed grain
dealers would remain steady at approximately 550.  Currently, about 280 Class
1 grain dealers are being audited by 15 DOA auditors.  This proposal would
require the DOA to audit all classes of grain dealers rather than only Class
1 dealers.  The proposal would increase the number of audits by 270.
However, the additional audits, would be less extensive than the Class I
audits.   Accordingly, DOA assumed they would request two additional grain
regulatory auditors and related expenses and equipment including two
vehicles.  The new FTE would be domiciled in various out-state locations and
would be required to travel 100% of the time.

The DOA assumed they would collect adenyl revenue of $13,750 due to the
increased grain dealer renewal fee.  They would also collect $13,500 from the
additional grain dealers that will be audited.  An additional $1,000 would be
collected from dealers requesting inspections.

This proposal has an emergency clause, therefore, costs will be incurred for
12 months in FY 1997.

FISCAL IMPACT - State Government   FY 1997   FY 1998   FY 1999

GENERAL REVENUE FUND

Income - DOA
  Increased renewal and audit fees $28,250   $28,250   $28,250

Costs - DOA
  Personal Service               ($46,364) ($47,293) ($48,475)
  Fringe Benefits                 (14,252)  (14,528)  (14,892)
  Expense and Equipment           (48,024)  (11,048)  (11,379)
Total Costs - DOA               ($108,640) ($72,869) ($74,746)

Net Effect on -
GENERAL REVENUE FUND             ($80,390) ($44,619) ($46,496)

FISCAL IMPACT - Local Government   FY 1997   FY 1998   FY 1999

None                                     0         0         0


DESCRIPTION

This act, which has an emergency clause,  makes numerous changes to the Grain
Dealer and Grain Warehouse laws and increases registration fees.

Financial Statement Requirements:  Current law, which goes into effect
February 1, 1996, requires all warehouses and dealers posting letters of
credit or certificates of deposit as security to submit financial statements
which have been audited by a certified public accountant.  Licensees
submitting  bonds as security must submit financial statements which have
been reviewed by a certified public accountant. This act requires all
licensees to submit at least review level financial statements.

Increased Financial Requirements for Credit Sales Contracts:  This act
increases financial requirements for licensees engaging in credit sales
contracts to the greater of  $50,000 or 2 percent of annual grain purchases.
Currently, the greater of 15 cents per bushel or 1 percent of annual grain
purchases is required.

Record keeping requirements for all classes of dealers are unified and all
classes of dealers will be audited by the Department of Agriculture.
Currently, only class I dealers are required to keep certain records and be
audited by the Department.

Clarifications are made to definitions in both laws to ensure consistency.
Grain dealer licenses are required for all businesses purchasing grain from
producers on a regular basis.  Licenses will no longer be required if grain
is only purchased  from licensed dealers.

A new section is added to the warehouse law to create a statutory lien on
grain and grain related assets of a failed warehouseman for the benefit of
grain storage depositors.

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

Missouri Department of Agriculture