Colorado Legislative Council Staff

STATE

FISCAL NOTE

No State General Fund Impact

Cash Fund Revenue Impact

Drafting Number:

Prime Sponsor(s):

LLS 98-495

Rep. Young

Sen. Wattenberg

Date:

Bill Status:

Fiscal Analyst:

January 8, 1998

House Agriculture

Steve Tammeus (866-2756)

 

TITLE:            CONCERNING REGULATION OF THE LIVESTOCK INDUSTRY BY THE DIVISION OF BRAND INSPECTION IN THE DEPARTMENT OF AGRICULTURE, AND, IN CONNECTION THEREWITH, INCREASING FEES FOR LIVESTOCK INSPECTION, PROVIDING FOR THE PUBLIC SALE OF ABANDONED BRANDS, CREATING AN ANNUAL TRANSPORTATION PERMIT FOR CATTLE AND ALTERNATIVE LIVESTOCK, AND AUTHORIZING THE CERTIFICATION OF FEEDLOTS BY THE STATE BOARD OF INSPECTION COMMISSIONERS.


Summary of Legislation


STATE FISCAL IMPACT SUMMARY

FY 1998/99

FY 1999/2000

State Revenues

General Fund

Brand Inspection Fund



Reallocates inspection fee structure among equine and bovine livestock for no net revenue change

State Expenditures

General Fund

Other Fund


 


 

FTE Position Change

None

None

Local Government Impact — None


            This bill revises certain inspection taxes, fees, and service charges assessed by the Department of Agriculture, Division of Brand Inspection, on bovine and equine livestock, as follows:

               redesignates the existing per-head brand inspection tax on livestock as a fee at 40 cents per bovine and $1 per equine livestock;

               redesignates the existing bovine service charge for requesting an inspection as a minimum fee and raises the amount from $7.50 to $10;

               establishes a minimum equine fee for requesting inspection of $10;

               raises the assessment to record brands, effective January 2002, from $18 per year to $30 per year, and increases the maximum amount payable in one assessment period (five years) from $90 to $150;

               requires payment in a lump sum for a given period and creates a presumption of abandonment of any brand that has been canceled for nonpayment of assessments and has remained unclaimed for five years;

               requires the state board to adopt rules governing the publication and sale of abandoned brands;

               requires the net proceeds from the sale of an abandoned brand to be credited to the Brand Assessment Account in the Brand Inspection Fund;

               increases the permanent transportation permit for rodeo horses from $10 to $20; and

               authorizes bovine and alternative livestock to be eligible for an annual transportation permit at a cost of $20.


            The bill enacts the “Feedlot Certification Act” which establishes a program of voluntary certification for feedlot owners under the authority of the state board. The state board is authorized to establish the administrative requirements for the program and to establish fees to fund all direct and indirect costs of the program. The bill specifies feedlot certification eligibility requirements and establishes an annual certification fee of $1,000 per application.


            The bill establishes a certified feedlot per-head inspection fee discount of 15 cents for direct-to-slaughter cattle and 17 cents for other cattle. The bill specifies the fee payment method and prescribes a late payment penalty of 10 percent of the amount due. The bill specifies the notification and documentation procedures for movement of cattle from, and into, certified feedlots. The bill authorizes the board to inspect and audit feedlot operations; issue, deny, suspend, and revoke certificates; conduct hearings and issue subpoenas; and assess civil penalties of up to $1,000 per violation. All civil penalties are to be deposited into the Brand Inspection Fund.


            The bill will become effective at 12:01 a.m. on the day following the ninety-day period after adjournment sine die of the General Assembly, or on the date of the official declaration of the vote of the people as proclaimed by the Governor, if a referendum petition is filed pursuant to Article V, Section 1 (3) of the State Constitution.


            This bill will not affect state expenditures, but will affect state cash fund revenues. Therefore, it is assessed as having a fiscal impact.


State Revenues


            Section 20 of Article X of the Colorado Constitution, limits the maximum annual percentage increase in state fiscal year spending. Once total state revenue from all sources that are not specifically excluded from fiscal year spending exceeds these limits for the fiscal year, the state constitution requires that the excess shall be refunded in the next fiscal year unless voters approve a revenue change as an offset. Based on the current Legislative Council economic forecast, it is projected that the state will be in a TABOR refund position during each of the next five fiscal years. Any increase in state revenue from changes in fees, fines, licenses, or other revenue sources will affect the amount of the state revenue to be refunded. 


            Section 35-55-115, C.R.S. requires all licence fees collected from public livestock markets to be deposited in the Brand Inspection Fund for use by the board in paying ordinary expenses of the State Board of Stock Inspection Commissioners. This bill also requires the net proceeds from the sale of an abandoned brand and civil penalties to be credited to the fund. This fiscal note assumes that certified feedlot application fees will also be credited to the fund.


            Fee Impact. Pursuant to Section 2-2-322, C.R.S., which requires legislative service agency review of legislative measures which include the creation or increase of any fee collected by a state agency, the following analysis is provided. The Administrative Services Section of the Department of Agriculture has provided the following summary of the fiscal impact of each of the sections of this bill:

               the bovine inspection minimum inspection fee increase from $7.50 to $10.00 will increase fee revenue slightly, most assessments currently exceed $10;

               the equine inspection fee of $1 and minimum fee of $10 per visit will increase fees significantly;

               the brand assessment increase from $18 to $30 will not be effective until January 2002;

               the proceeds from sale of abandoned brands will be insignificant;

               the rodeo horse permit increase from $10 to $20 will be insignificant;

               the transportation permit for bovine and alternative livestock will be insignificant;

               the feedlot certification application fees will generate $10,000 from 10 applications; and

               the certified feedlot per-head inspection discount will reduce revenue by $94,356.


            The provisions of this bill will not significantly affect state revenue but will reallocate the current Brand Inspection Fund fee structure as shown in Table 1.


Table 1

Actual Inspection Fees

FY 1996-97

Projected Inspection Fees

FY 1998-99

Equine

 

 

Inspection Fees -Country

$16,487

$277,680

Inspection Fees - Sale Barns

5,374

13,434

Service Charges

178,875

0

Horse Permits

73,780

147,560

Subtotal

$274,516

$438,674

Bovine

 

 

Inspection Fees - Country

$1,495,571

$1,549,859

Inspection Fees - Sale Barns

446,288

446,288

Service Charges

133,643

0

Certified Feedlots

0

10,000

Feedlot Inspections

0

(94,356)

Subtotal

$2,075,502

$1,911,791

Total

$2,350,018

$2,350,465

 


State Expenditures


            The provisions of this bill will not affect state expenditures for FY 1998-99. The Division of Brand Inspection believes any additional costs to implement this program will be insignificant and may be absorbed within existing resources.



Spending Authority


            This fiscal note would imply that no new state spending authority or appropriations are required for FY 1998-99 to implement the provisions of this bill.



Departments Contacted


            Agriculture                 Law