Fiscal Note & Local Impact Statement

125 th General Assembly of Ohio

Ohio Legislative Service Commission

77 South High Street, 9th Floor, Columbus, OH 43215-6136 ² Phone: (614) 466-3615

² Internet Web Site: http://www.lsc.state.oh.us/

BILL:

Sub. S.B. 202

DATE:

December 7, 2004

STATUS:

As Reported by House Agriculture & Natl. Resources

SPONSOR:

Sen. Mumper

LOCAL IMPACT STATEMENT REQUIRED:

No —

Minimal cost

 


CONTENTS:

To revise the laws governing the inspection of meat and poultry, claims for injuries to certain animals by coyotes or black vultures, agricultural easements, and applications concerning new drugs

 

State Fiscal Highlights

 

STATE FUND

FY 2005

FY 2006

FUTURE YEARS

General Revenue Fund

     Revenues

- 0 -

- 0 -

- 0 -

     Expenditures

Potential minimal effect

Potential minimal effect

Potential minimal effect

Note:  The state fiscal year is July 1 through June 30.  For example, FY 2005 is July 1, 2004 – June 30, 2005.

 

·        The bill allows the value of an agricultural easement to be determined by a points-based appraisal system that is to be established by the Director of Agriculture.  Any costs associated with this provision would be minimal and would be paid for out of the Office of Farmland Preservation’s GRF line item.

·        The Director shall establish and review requirements for continuing education courses for weighers, samplers, and testers licensed under the dairy law and grant approval to those that meet requirements.  This could minimally increase expenditures to the Division of Dairy's GRF line item.

·        Under the bill, adjudicatory hearings requested by dairy licensees are moved from the county seat of the county in which the licensee's facility is located to the central office of the Ohio Department of Agriculture (ODA).  This could save travel expenses for the Division of Dairy's GRF line item.  Any savings would be minimal in nature since there have been few hearings in the past five years.

·        Several changes are made regarding the Meat and Poultry Inspection law.  Some changes include granting authority for the Director to deny the re-issuance of a meat or poultry license and allowing for progressive enforcement actions while dealing with meat inspection violations.  The bill also allows the Director to apply to a court of common pleas for a temporary or permanent injunction regarding meat and poultry violations.  These provisions, as well as others affecting the Meat and Poultry Inspection law, should have minimal or no costs to the Meat and Poultry Inspection’s GRF line items.

·        The bill allows local soil and water conservation districts to access moneys received from tax levies in excess of the ten-mill levy limitation approved for the benefit of local soil and water conservation districts.  Two counties (Monroe and Noble) may be able to leverage these moneys for additional state aid from the Department of Natural Resources' Division of Soil and Water's GRF line item.  Any additional state aid will be minimal in nature.

·        The bill adds colleges to the list of publicly accessible sites that require pesticide application to be conducted by a commercially licensed applicator.  This may minimally increase GRF expenditures for those colleges that do not already hire licensed applicators.

·        The bill makes changes to the livestock indemnification law by limiting the amount a claimant without a voluntary animal damage control plan may receive for livestock losses or injuries associated with predators.  (ODA) may assist owners in developing and implementing a voluntary animal damage control plan.  The ODA may not use more than 50% of the money appropriated for livestock indemnification or $25,000, whichever is less, to pay for costs incurred while providing assistance for voluntary animal damage control plans.  The ODA will realize increased expenditures for assisting with the voluntary plans; however, the plans should eventually decrease the number of claims submitted which would decrease costs to the Animal Damage Control’s GRF line item.  Also, decreasing costs should be realized due to the provision that limits a claimant’s (without a voluntary animal damage control plan in place) livestock indemnification amount to $500 per calendar year.

Local Fiscal Highlights

 

LOCAL GOVERNMENT

FY 2005

FY 2006

FUTURE YEARS

Counties and Soil and Water Conservation Districts

     Revenues

Potential minimal loss in annual property tax revenues, offset by increase in interest paid; potential minimal gain from levy monies

Potential minimal loss in annual property tax revenues, offset by increase in interest paid; potential minimal gain from levy monies

Potential loss in total property tax revenues for improvement assessments, offset by increase in interest paid; potential minimal gain from levy monies

     Expenditures

Potential decrease in annual bond repayments; potential minimal increase for administrative costs

Potential decrease in annual bond repayments; potential minimal increase for administrative costs

Potential increase in interest paid on improvement bonds; potential minimal increase for administrative costs

Townships

     Revenues

- 0 -

- 0 -

- 0 -

     Expenditures

Potential minimal decrease for administrative costs

Potential minimal decrease for administrative costs

Potential minimal decrease for administrative costs

Note:  For most local governments, the fiscal year is the calendar year.  The school district fiscal year is July 1 through June 30.

 

·        The bill allows boards of county commissioners to increase the repayment term for soil and water conservation district improvement bonds from eight to fifteen years.  This extension will lower annual debt payments, but increase the total interest paid on a project, raising the total cost of future projects.  The total fiscal impact is dependent on the total cost of the project and the interest rate at which the bonds are issued.

·        The bill allows ODA to apply to the court of common pleas for a temporary or permanent injunction for meat and poultry violations.  This could increase expenditures for county courts.  However, ODA maintains that they will pursue administrative remedies before going to court.  Therefore, the number of injunction requests would be small and costs associated with this are likely to be minimal.

·        The bill requires local soil and water conservation districts to send notices of improvements by certified mail to people located adjacent to the proposed improvement.  According to the Department of Natural Resources, this will result in a minimal increase in expenditures to local districts.

·        The bill allows local soil and water conservation districts to access moneys received from tax levies in excess of the ten-mill levy limitation approved for the benefit of local soil and water conservation districts.  Two counties (Monroe and Noble) may be able to leverage these moneys for additional state aid.

 


 


 

 

Detailed Fiscal Analysis

 

The bill makes several changes to various laws concerning agricultural easements, meat and poultry inspection, livestock indemnification, and food safety in the Ohio Department of Agriculture (ODA).  The changes in the bill and their effects are discussed below.

 

Agricultural Easements

 

Currently, grants for agricultural easement purchases may be made using moneys from the Clean Ohio Agricultural Easement Fund.  Grants may provide up to 75% of the value of an agricultural easement as that value is determined by a general real estate appraiser.  Under the bill, the value of an agricultural easement may also be determined through a points-based appraisal system.  The points-based system shall be established by the Director of ODA and may include any or all of the following factors:

 

·        Whether the county auditor determined land is exclusively devoted to agriculture;

·        Changes in land values after county auditor reappraisal or triennial update;

·        Soil types and productivity;

·        Proximity to land that is subject to agricultural or conservation easement or similar land-use limitations;

·        Proximity to water and sewer lines, road interchanges, and nonagricultural development;

·        Parcel size and roadway frontage;

·        Existence of an operation and management plan developed under the agricultural pollution control provisions;

·        Existence of a comprehensive plan that is adopted by the planning commission of a municipal corporation;

·        Any other factors that the Director determines are necessary.

 

According to ODA, establishing the points-based system and reviewing applications using the system could increase expenditures.  Any work associated with this would be performed by existing, internal staff and would be minimal at best.   A points-based system is currently used by applicants prior to submitting their application to ODA.

 

Soil and Water Conservation Districts

 

The bill allows soil and water conservation districts to acquire agricultural easements.  Soil and water conservation districts are also eligible for matching grants from the Agricultural Easement Purchase Fund within ODA.  This provision is permissive.  Soil and water conservation districts do not have to purchase agricultural easements.  ODA will evaluate their applications for matching grants as any other application would be evaluated. 

 

The bill authorizes a board of township trustees to enter into a contract with a soil and water conservation district, without advertising or bidding, for the purchase of services.  This provision is also permissive.  If a board of township trustees does choose to enter into a contract with a soil and water conservation district, without advertising or bidding, there could be a minimal decrease in expenditures for the board in regards to the advertising expenses. 

 

Improvements by Soil and Water Conservation Districts

 

            Under the bill, an owner of land that is located in a soil and water conservation district may file a petition with the supervisors of the district requesting the construction of a conservation works of improvement.  Supervisors of the district shall make a preliminary determination to accept or reject the petition.  Supervisors may reject a petition for a variety of reasons, such as insufficient information or the petition is frivolous.  If a petition is rejected, the supervisors shall notify the petitioner of the reasons.  If a petition is accepted, supervisors shall establish a date and time for a view of the proposed improvement.  The date shall be not fewer than 25 or more than 90 days after the petition filing date. The supervisors shall also establish a date and time to hold a meeting on the proposed improvement.  The supervisors shall send at least 20 days prior to the date established for the view, a written notice of the view and the hearing to the landowners within the area to be benefited by the proposed improvement and to the board of county commissioners and the county engineer.  The supervisors shall also notify all landowners that are adjacent to the proposed improvement by certified mail and shall notify all others by certified mail or first class mailings. 

 

            Upon acceptance of a petition requesting the construction of an improvement, the supervisors shall begin to prepare, as a guide to the board of county commissioners and the petitioners, a preliminary report regarding the proposed improvement.  The report shall include an estimate of cost, comments on feasibility, and statement of the supervisors' opinion as to whether the benefits will exceed the cost.    The supervisors may also submit alternate proposals to accomplish the intent of the petition.  All preliminary reports and all alternate proposals shall be reviewed and receive concurrence from an engineer employed by the Division of Soil and Water Conservation or by the Natural Resources Conservation Service or any other registered engineer of the supervisors choosing.  The bill also specifies the hearing process, management of alternative proposals, and the construction requirements for a proposed improvement.  The bill states that supervisors of a soil and water conservation district shall estimate the value of land or other property that must be taken and the damages to be sustained by any owner as a result of the construction and maintenance of the proposed improvement.  The total of the estimated damages and valuations shall be included as part of the estimate of the total cost of constructing the improvement.  The total estimate of cost shall be submitted to the board of county commissioners of each county in which the improvement is to be located.   The bill outlines the factors influencing the approval or disapproval of an improvement. 

 

            When the board of county commissioners that approves construction of a proposed improvement shall prepare a schedule of estimated assessments on property within the area that is to be benefited by the improvement.  The total of the estimated assessments shall equal the estimated cost of the proposed improvement.  The board shall use the schedule of estimated assessments for purposes of levying final assessments.

 

            According to the Department of Natural Resources' Division of Soil and Water, the costs for these provisions should be minimal in nature.  Minimal costs may arise from the certified mail requirements, as well as the provision that requires payment for construction easements.  There are typically three or fewer improvements done per county (typically improvements are done in western and northwestern Ohio).  The Division estimates that there are generally 50 or fewer people who would need certified mail notices.  According to the United States Postal Service, certified mail is $2.30 plus postage.  If the certified mailings are $2.67 ($2.30 for certified mail and $0.37 for postage) and they are mailed to 50 people the cost would be $134.  If the certified mailings for an improvement were delivered for both assessments and legal notices this cost would double to $268.  If three assessments were done in the county the cost would be $804. Also, a few projects may have additional costs for the construction easement.  However, most of these would be minimal in nature.

 

            The bill extends the maximum repayment period for bonds sold for soil and water conservation district improvements from eight to fifteen years.  This provision is permissive.  An extension would lower the annual debt payments but increase the interest due on the debt for a total increase in the cost of the improvement.  Annual property tax assessments would be lower but would be extended for a longer period of time.  According to Division estimates, approximately 30 projects at a cost of roughly $200,000 each are completed statewide each year.

 

Matching Grants and Soil and Water Conservation Districts

 

            The bill allows local soil and water conservation districts to access moneys received from tax levies in excess of the ten-mill levy limitation approved for the benefit of local soil and water conservation districts.  Currently, local soil and water conservation districts receive from the Department of Natural Resources, an amount that is not to exceed one dollar for each one dollar received within the ten-mill levy or received from an appropriation by a municipal corporation or a township to a maximum of $8,000.  This provision will allow those counties with a tax levy in excess of ten-mills leverage those excess moneys to receive state dollars.  Currently, there are only two counties (Monroe and Noble) that would be affected.

 

Dairy Division

 

            Under the bill, the Director shall adopt rules establishing requirements for continuing education courses for weighers, samplers, and testers licensed under the dairy law and review continuing education courses for weighers, samplers, and testers and grant approval to those that meet requirements.  This provision could minimally increase expenditures from the Division of Dairy's GRF line item.  The bill also changes the location of any adjudicatory hearing that a dairy licensee requests.  Currently, the hearing shall take place in the county seat of the county in which the licensee's facility is located.  Under the bill, the hearing will take place in the central office of ODA.  This provision could reduce travel expenses for the Division. 

 

Meat and Poultry Inspection

 

According to ODA’s website, Ohio has the second largest meat inspection program in the nation with 229 plants under full inspection.  The Division of Meat Inspection has 100 meat inspectors that are responsible for overseeing the wholesomeness of meat products.  The inspectors provide daily inspections of all fully licensed meat and poultry slaughter and process establishments.   In 2003, there were 15 notices of violations issued and three withdrawals of inspections carried out.  From 2000 to 2002, there were five cease orders issued.  There have been no cease orders issued since October of 2002. 

License Applications and Violations for Meat Inspection and Poultry Inspection

 

The bill adds language that if a meat or poultry establishment is not in compliance after inspection with laws and rules dealing with licensure, the license shall be denied and an applicant may appeal the denial.  Language is also added that gives the Director authority to deny the re-issuance of a license, after the expiration date, if the establishment is not in compliance with laws or rules.  If a meat processing or slaughtering establishment is in violation, the Director may impose progressive enforcement actions or suspend or revoke the license.  Currently, if an establishment is in violation, the Director may withdraw inspection and order the establishment to cease operations.

 

The progressive enforcement authority is in the Ohio Administrative Code (OAC).  The bill is expanding the statutory authority to revoke a red meat license under certain conditions.  The revocation authority is currently available for a poultry license.  According to ODA, the need for the authority for the Director to deny the re-issuance of a license has been limited.  As a result, there should be little or no fiscal effect to ODA.  The other changes within the bill will most likely have little to no effect due to the small number of violations each year.

 

The bill adds language that if a meat establishment is unsanitary and is not in compliance with its hazard analysis critical control point plan, the Director may take actions prior to an adjudication hearing.  The Director shall afford a hearing upon request of the owner of the meat establishment.  The OAC currently authorizes regulatory control action, so there should not be any changes or fiscal impacts for ODA.

 

The bill also adds language that the Director may apply to the court of common pleas in the county in which the meat or poultry violation occurs for a temporary or permanent injunction.  This provision could create a minimal increase in expenditures for counties if injunctions are requested.  However, ODA maintains that they will pursue progressive administrative remedies before going to court.  Also, there have only been two or three times in the past seven years that ODA could have applied to a court for an injunction.  Thus, at most, only a minimal impact on local courts could be expected.

 

Pesticide Application

 

            The bill makes changes to the pesticide law.  No individual shall apply pesticides, in certain situations, without having a commercial applicator license.  If the individual is the owner of a business or an employee of that same business, pesticides shall not be applied unless by an applicator with a commercial license at food service operations that are licensed under the Retail Food or Food Service Operations Law.    Currently, pesticides shall not be applied unless by an applicator with a commercial license at retail food establishments or food service operations as defined in section 3717.01.  Under the definition, a food service operation means "a place, location, site, or separate area where food intended to be served in individual portions is prepared or served for a charge or required donation."  Under the definition, a retail food establishment means a "means a premises or part of a premises where food is stored, processed, prepared, manufactured, or otherwise held or handled for retail sale."  This change in law will exempt churches and farm markets from these requirements.  Colleges are added to the list of sites that require pesticides to be applied by commercially licensed applicators.  This may increase expenses minimally for colleges, as they will now have to hire a commercially licensed applicator for pesticide application, if they do not do so already.

 

            The bill also specifies that the Director of Agriculture, after a hearing regarding pesticide licenses, may deny, suspend, revoke, refuse to renew, or modify any provision of any license, permit, or registration if the director finds that the applicant or holder of a license, permit, etc. is no longer qualified or has violated any provision of the Pesticide Law, etc.

 

Livestock Indemnification

 

The bill makes several changes to the animal damage control program.  It adds that an owner of an animal that has been attacked by a predator shall notify the dog warden by telephone and document by photograph the wounds sustained to the animal.  It also outlines the procedure for submitting a claim for indemnification.  The bill states that the dog warden shall send to ODA the determination of whether the animal was killed or injured by a predator and any other documents, testimony, etc.  The wildlife officer shall notify ODA in writing regarding the determination.  Under the bill, ODA will hear claims that are approved by the dog warden and supported by the wildlife officer.

 

The bill also specifies the amount of indemnification received for an animal.  The definition of “fair market value” is the average price that is paid for a healthy grade animal at a livestock auction that is licensed.  If the owner of an animal does not agree with ODA’s determination of the value of the animal, the owner may appeal the determination.  Claims certified by ODA shall be paid from the GRF except in the following situations:

 

·        A claim for the same loss or injury has been paid or is payable under policy or policies of insurance (in current law).

·        The owner of an animal has been paid more than $500 within the immediately preceding calendar year from money so appropriated.  However, that owner may be paid if the owner has implemented a voluntary animal damage control plan that meets ODA requirements.

 

If at any time money appropriated from the GRF for livestock indemnification purposes, is insufficient to pay certified claims, ODA shall disapprove those claims and those claims shall not be resubmitted.  Also, ODA may assist owners in developing and implementing a voluntary animal damage control plan to prevent and minimize loss or injury to animals by predators or may enter into an agreement with another state agency, a federal agency, or a person to provide assistance.  The ODA may not use more than 50% or $25,000, whichever is less, of the money appropriated for livestock indemnification, to pay the costs incurred for providing assistance or entering into an agreement to provide assistance.  The Director shall adopt rules that establish requirements governing voluntary animal damage control plans.

 

The ODA could realize an increase in expenditures due to the provision concerning assisting owners in developing and implementing a voluntary animal damage control plan.  However, the implementation of voluntary animal damage control plans should eventually reduce costs by reducing the numbers of injuries or attacks that take place.  The ODA will also realize a reduction in expenditures due to the provision specifying that no one should receive more than $500 in indemnification payments in a calendar year.  The bill specifies that the dog warden shall provide assistance in filling out the indemnification form when requested by the owner.  There are also provisions detailing that the dog warden shall send to ODA the copy of the determination and other documents.  The wildlife officer shall send to ODA his or her determination.  It appears that the bill does not expand the role of dog wardens and wildlife officers.  As such, there should be no fiscal impact to local governments. 

 

Food Safety

 

The bill removes the Director of Agriculture’s authority to review applications for new drugs.  According to ODA, the affect of this provision is that the bill will eliminate an existing loophole whereby individuals can try to bypass the U.S. Food and Drug Administration’s authority to review new drug applications. 

 

Board of Trustees, Southern Ohio Agricultural and Community Development Foundation

 

            The bill would allow the Director of Agriculture and the Director of Development to appoint designees to serve in their places on the Board of Directors for the Southern Ohio Agricultural and Community Development Foundation.  Currently, the directors serve as ex officio members of the board.  Members appointed by the Governor serve for five years. 

 

 

LSC fiscal staff:  Wendy Risner, Budget Analyst

 

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