This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0945 - Cotton growers ballot measures
sb 945 - Fiscal Note

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 3987-03

BILL NO. Truly Agreed To and Finally Passed CCS for SB 945

SUBJECT: Agriculture and Animals: Cotton Growers

TYPE: Original

DATE: May 13, 1998


FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS

FUND AFFECTED FY 1999 FY 2000 FY 2001
None $0 $0 $0
Total Estimated

Net Effect on All

State Funds*

$0 $0 $0

*Includes losses and savings of approximately $8 million annually, which net out to zero.

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 3 pages.

FISCAL ANALYSIS

ASSUMPTION

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

Officials from the Department of Agriculture (AGR) stated this proposal would reduce total state revenues by eliminating the commodity assessment fees currently collected by AGR. Currently, AGR collects check-off fees, tracks all receipts, refunds and maintains a running balance in the fund. This proposal would require fees to be collected by the appropriate commodity councils for deposit into their individually controlled bank accounts. However, the individual commodity councils may contract with the Department of Agriculture to perform administrative services, including collection of the check-off fees for deposit into the council's bank accounts. AGR would be allowed to retain fees for the cost of these administrative services, to be deposited into the commodity council merchandising fund.

Oversight assumes that essentially all revenue from fees, less administrative expenses, is currently being distributed to councils. Oversight also assumes the Councils would contract with AGR at a cost of approximately $104,000 annually (FTE, E & E, fringe benefits). These costs have been deducted from $8,000,000 in anticipated fee collections, with a net effect to state funds of zero.

FISCAL IMPACT - State Government FY 1999 FY 2000 FY 2001
(12 Mo.)
COMMODITY COUNCIL
MERCHANDISING FUND
Loss - Department of Agriculture (AGR)
Reduction in Revenue from lost
check-off fees ($7,896,063) ($7,896,063) ($7,896,063)
Savings-Department of Agriculture (AGR)
Program costs - distributions to councils $7,896,063 $7,896,063 $7,896,063

ESTIMATED NET EFFECT ON

COMMODITY COUNCIL
MERCHANDISING FUND $0 $0 $0
FISCAL IMPACT - Local Government FY 1999 FY 2000 FY 2001
(10 Mo.)
$0 $0 $0

FISCAL IMPACT - Small Business

Small businesses would be expected to be fiscally impacted to the extent that they may incur additional administrative costs due to this proposal, if they choose not to contract with the Department of Agriculture for administration of their check-off fees.

DESCRIPTION

This proposal would clarify the eligibility of cotton growers to vote in an assessment referendum. Each grower is entitled to one vote. Current law allows one vote per acre dedicated to cotton production.

This proposal would change the accounting of the monies collected for the Commodity Council Merchandising Fund. The monies shall be collected by the appropriate commodity council. The individual councils may contract with the Department of Agriculture to perform all administrative services related to the collection and accounting of the funds. Administrative costs related to such services shall be deposited into the Commodity Council Merchandising Fund. This act shall be in full force and effect upon passage and approval or on July 1, 1998, whichever occurs later.

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

SOURCES OF INFORMATION

Department of Revenue

Department of Agriculture

Attorney General's Office

State Treasurer's Office

Jeanne Jarrett, CPA

Director

May 13, 1998