Sources of Revenue:

General Fund,Special Fund

Legislation creates:

Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    Senate Bill 432 (SB432) makes Code revisions to various activities within the State Treasurer's Office, including, without limitation, Cash Management, Debt Management, Retirement Plus (457(b) supplemental deferred retirement plan), West Virginia Board of Treasury Investments, the West Virginia Internal Revenue Code Section 529 plans, remittances to policemen's and firemen's pension plans and Unclaimed Property.
    Provisions of SB432 have a fiscal impact on various special revenues of the state, but there is no specific fiscal impact on the state general revenue fund. An explanation of the fiscal impacts follows:
    1. Cash Management – It is anticipated that the proposed legislation will save money, but the amount is not really quantifiable. Most of the provisions pertaining to Cash Management are minor technical clean up.
    The revision from $100,000 to the amount set by a federal agency (FDIC) is expected to save the state and financial institutions money. The amount of the savings is not quantifiable because the amounts on deposit are fluid.
    Improved oversight of revenue collection processes, with the exception of the Department of Revenue, should enable spending units to improve their receipting of moneys. This will enable the moneys to be deposited faster and to earn more income. However, the fiscal impact is not really quantifiable. Cash Management has already allocated a ½ FTE to work with spending units to improve their receipting of moneys, which expense is paid from special revenues. The proposed legislation will further enable Cash Management and the Legislative Auditor to assist spending units through auditing and oversight of internal controls. No additional staff will be needed, so there will be no additional expense to the special revenue fund.
    The record retention issues should save the Treasurer's Office money as it moves more toward electronic records and away from paper documents. Again, the amount of savings is not really quantifiable.
    Revisions pertaining to stale checks with federal funds are included in the legislation because of the new ERP system. Programing and related costs to apply the Code as currently written would be more expensive than amending the Code to reflect what the system currently permits. The amount of $20,000 to $40,000 has been estimated as the savings of having to change the software to comply with current Code, but no formal determination of cost has been made.
    2. Consolidating Debt Capacity Division into the Debt Management Division – There is no fiscal impact on the general revenue fund, which pays for the costs associated with debt management. The Debt Capacity Division was never created due to the duplication of duties with the Debt Management Division, which meant that the Director of Debt Management performed the duties of both divisions. The consolidation is really clean up that eliminates the duplicate duties and clarifies reporting requirements.
    3. Retirement Plus (457(b) supplemental deferred compensation plan) – There is no real fiscal impact on the special revenue fund which pays these costs. Increased assets under management will create additional fees, which will offset any costs associated with the additional duties.
    4. West Virginia Board of Treasury Investments – As of February 28, 2013, the expected savings is $100,000 in special revenues each year. In addition, the legislation will preclude the state having to take a current loss of $430,000. The Board of Treasury Investments generates its income by charging fees on the assets it manages.
    Reducing the Board's surety bond from $50 million to $10 million is expected to save $100,000 each year.
    The legislation authorizes the Board to purchase investment grade corporate debt and to hold securities that become non-compliant with the Code after purchase, if approved by the Board upon recommendation of the investment consultant and investment manager. This is expected to save a one-time amount of $430,000. As of February 28, 2013, if the Board had to sell the five non-compliant securities it holds, such as Bank of America and Credit Suisse corporate bonds, the Board would take a loss of $430,731.95.
    The equipment and software financing program is expected to save money for the various spending units, such as the Fleet Management Office, that utilize financing to acquire their equipment and software. The savings is contingent on amounts needed and market rates, and so are not quantifiable.
    5. SMART529 (IRC Section 529 Plans) – Special revenue costs are expected to be $25,000 each year for matching grants and scholarships to be paid from the program Administrative Account. Fees in the Administrative Account are generated by fees assessed on the assets under management.
    Not allowing the value of a 529 account to be considered for purposes of determining eligibility for income-based assistance should have no fiscal impact on the general revenue fund.
    6. Unclaimed Property Trust Fund and Distributions to Policemen's and Firemen's Pension Plans – costs from the special revenue Unclaimed Property Trust Fund will be a one-time amount of $3,571,546.55 to cover the underpayments to the Policemen's and Firemen's Pension Plans from the period of 1983 through February 29, 2012.

Fiscal Note Detail

Effect of Proposal Fiscal Year
Fiscal Year
(Upon Full
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 -100,000 -100,000
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 3,571,546 0 0
2. Estimated Total Revenues 0 0 0

Explanation of above estimates (including long-range effect):

    Please see explanation in Fiscal Note Summary.


    Please see explanation in Fiscal Note Summary.

    Person submitting Fiscal Note: Diana Stout
    Email Address: