LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: SB 495 SLS 24RS 834
Bill Text Version: ORIGINAL
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: May 2, 2024 12:37 PM Author: TALBOT
Dept./Agy.: Agriculture and Forestry, ATC, Health
Subject: Consumable Hemp Analyst: Richie Anderson
AGRICULTURAL COMMODITIES OR INCREASE SG EX See Note Page 1 of 2
Provides relative to industrial and consumable hemp products. (8/1/24)
Proposed law will introduce regulations regarding licensing, fees, and sales practices for the hemp industry. Proposed law provides that the
Louisiana Department of Agriculture and Forestry (LDAF) charge and collect an annual license fee due each year on 12/31, equal to $500
for a seed producer, $250 for a grower, and $500 for a processor. Proposed law states that any wholesaler or retailer must have a “Good
Manufacturing Practices” certificate as of 12/31/23, have been inspected by the Department of Health (LDH) as of 12/31/21, and carry a
food manufacturing license with a specialization in industrial hemp products. Additionally, proposed law states that no person can sell or
offer any single serving beverage with THC or CBD, any hemp product without a license, or any hemp product if the retail business sells
any type of petroleum product such as gasoline or diesel. Proposed law also requires that all products sold by consumable hemp
processors be registered with LDH’s registry located on their web site. Additionally, proposed law provides for a system of fines for certain
violations.
EXPENDITURES 2024-25 2025-26 2026-27 2027-28 2028-29 5 -YEAR TOTAL
State Gen. Fd. SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Agy. Self-Gen. INCREASE INCREASE INCREASE INCREASE INCREASE
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Annual Total
REVENUES 2024-25 2025-26 2026-27 2027-28 2028-29 5 -YEAR TOTAL
State Gen. Fd. SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Agy. Self-Gen. SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Ded./Other INCREASE INCREASE INCREASE INCREASE INCREASE
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Annual Total
EXPENDITURE EXPLANATION
Proposed law will increase governmental expenditures for ATC and LDR for regulation costs and collecting revenue associated with the
consumable hemp industry. The LDAF and State Police will not realize any shift in expenditures resulting from the changes in proposed
law. Proposed law may result in an indeterminable increase in SGF expenditures in the Dept. of Public Safety and Corrections – Corrections
Services if a person is convicted of intentionally falsifies accountability reports.
Department of Revenue (LDR): LDR anticipates initial costs of $25,200 SGR in FY 25 for computer system development and
modification to electronically receive file transfers into the Delta system from ATC. The department anticipates costs associated with the
proposed law to be absorbed into the department’s existing budget allocation, but maintains that further SGF may be required if new
activity requires significant expenditures.
Office of Alcohol and Tobacco Control (ATC): Initial implementation costs for FY 25 are estimated at $726,358 SGR. ATC expects
initial costs to be creating and developing an electronic reporting registry for any entity that may or may not be registered with ATC.
Proposed law changes the definition of THC to only include Delta 9 and not Delta 8, 10, and 11, resulting in a need for continued
monitoring to ensure illegal products are not for sale. ATC currently permits 2,000 entities, and has a current objective of performing a
compliance check and inspection annually. Proposed law will likely increase these inspections due to the type of product being regulated
and the changing landscape of the hemp industry.
Continued on Page 2
REVENUE EXPLANATION
Office of Alcohol and Tobacco Control (ATC): ATC estimates that collections generated by the sale of consumable hemp retail permits
from this proposed law will impact revenues due to the prohibition of anyone selling hemp to not also be selling gasoline, and because of
the increased fines and penalties collected. The proposed law would impact hemp retail permits by requiring businesses to have a physical
location within the state and prohibiting the sale of hemp where gasoline is sold. ATC anticipates a decrease in permit revenues as hemp
retail permitting would decrease, but an increase fines of $1,000 for unlawful hemp sales may offset losses. Businesses must submit
reports on the prior month’s hemp sales to ATC by the 20th of the following month, or face a $1,000 fine for noncompliance and a
minimum fine of $10,000 fine for falsification. ATC anticipates increased revenue from fines, potentially covering lost permit fees and legal
expenses.
Department of Revenue (LDR): Proposed law has the potential to increase the taxable hemp product basis but also prohibits certain
hemp products that contain THC, because of these changes it is difficult to ascertain the revenue changes collected by the department.
The revenue collections from hemp products include the 3% excise tax which is deposited into the Early Childhood Education Fund.
Additionally, sales tax collections on these products from both the state (4.45%) and local (5.1% average) could be impacted. In FY 23,
collections for consumable hemp products generated approximately $992,000 in excise tax collections, $1.5 M in state sales tax
collections, and $1.7 M in local sales tax collections.
Continued on Page 2
Senate Dual Referral Rules House
x 13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Patrice Thomas
13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Deputy Fiscal Officer
 LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: SB 495 SLS 24RS 834
Bill Text Version: ORIGINAL
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: May 2, 2024 12:37 PM Author: TALBOT
Dept./Agy.: Agriculture and Forestry, ATC, Health
Subject: Consumable Hemp Analyst: Richie Anderson
CONTINUED EXPLANATION from page one: Page 2 of 2
EXPENDITURE EXPLANATION CONTINUED:
Office of Alcohol and Tobacco Control (ATC): ATC anticipates needing new agents and associated equipment, administrative
personnel, and a new electronic reporting registry. ATC estimates needing at least five (5) additional agents dedicated to the enforcement
of hemp laws through inspections, compliance checks, and education along with administrative staff to assist with compliance for entities
that are located outside of Louisiana. These include one (1) Program Manager to oversee the electronic registry system as well as two (2)
Administrative Coordinators to assist in processing and monitoring the monthly reports sent to ATC. Personnel costs for these 8 positions
would be $477,229 including salaries and related benefits. This fiscal note assumes a 3% market rate adjustment in salaries and related
benefits as seen below. To the extent SGR collections are not sufficient to fully fund the anticipated expenditures, SGF may be required to
make up the difference.
Expenditures FY 25 FY 26 FY 27 FY 28 FY 29
Salaries $402,037 $414,068 $427,887 $439,920 $452,499
Related Benefits $75,192 $77,448 $79,771 $82,164 $84,629
Registry $50,000 $20,000 $5,000 $5,000 $5,000
Equipment $199,129 $0 $0 $0 $0
Total: $726,358 $511,516 $512,658 $527,084 $542,128
Department of Public Safety and Corrections – Corrections Services (DPS&C – CS): Proposed law may result in an indeterminable
increase in SGF expenditures in DPS&C – CS if a wholesaler or retailer is convicted of intentionally falsifies an accountability report to ATC.
Proposed law requires the wholesaler or retailer shall be fined no less than $10,000 and serve not more than 5 years at hard labor. For
those convicted, sentenced, and then subsequently housed in a state facility, DPS&C-CS will sustain expenditures of $107.60 per offender
per day, or $26.39 per offender per day for those housed in local facilities.
REVENUE EXPLANATION CONTINUED:
Louisiana Department of Agriculture and Forestry (LDAF): Proposed law replaces the hemp handler license currently under LDAF’s
authority with the Consumable Hemp Manufacturer and Consumable Food Manufacturing Distributor licenses and moves these licenses
under the authority of the Department of Health (LDH). In FY 24, LDAF sold 7 Hemp Handler licenses for $500 each generating $3,500 in
revenue. Proposed law would also decrease the grower license fee from $500 to $250, based on the number of current grower licenses
issued (67), this would decrease revenue to the statutorily dedicated Seed Fund by $16,750 ($250 x 67), bringing the total decrease in
the Seed Fund’s revenue to $20,250 ($3,500 + $16,750).
Department of Health (LDH): Proposed law will replace the handler license with the Consumable Hemp Processor license and the
Consumable Food Manufacturing Distributor license, which will be under the authority of LDH. The Consumable Hemp Processor license is
in present law and will continue to be collected by LDH. The Consumable Food Manufacturing Distributor License is a new license in the
proposed law that will cost $500 annually. LDH is unable to estimate the amount of these licenses that will be purchased and the
associated revenue as this is a new type of business in Louisiana.
Senate Dual Referral Rules House
x 13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Patrice Thomas
13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Deputy Fiscal Officer


Statutes affected:
SB495 Original: 3:1467(B)