FISCAL NOTE
Date Requested: March 03, 2021
Time Requested: 11:24 AM |
| Agency: |
Economic Development Authority, WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2655 |
Comm.Sub. Eng.2 |
SB295 |
|
|---|
| CBD Subject: |
Governor -- Bills Requested By |
|---|
|
FUND(S):
9061
Sources of Revenue:
Other Fund Special Revenue
Legislation creates:
Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
This bill amends existing law to require the Board of Treasury Investments to make, subject to a liquidity determination and cash availability, a nonrecourse loan to West Virginia Economic Development Authority (WVEDA) in the amount of up to $80 million, representing a $30 million increase to the current nonrecourse loan, to finance WVEDA’s Broadband Loan Insurance (BLINS) Program. The $80 million loan is funded from the Consolidated Fund. Under its BLINS Program, WVEDA insures loans made by financial institutions to broadband service providers to finance capital costs related to projects to provide broadband service to unserved and underserved areas of the state. WVEDA will request a draw under its nonrecourse loan with the Board of Treasury Investments only if a broadband service provider defaults on its loan with the financial institution. The bill requires WVEDA to pursue reasonable remedies against the broadband service provider and all collateral securing the bank loan to recover and repay funds borrowed by WVEDA under the nonrecourse loan with the Board of Treasury Investments, which should help mitigate losses to the Consolidated Fund. WVEDA is not able to determine what affect the increase in the principal amount of the nonrecourse loan will have upon the Consolidated Fund. The BLINS program has historically had limited activity and to date WVEDA has not drawn under its existing nonrecourse loan with the Board of Treasury Investments to pay a bank on a defaulted loan made to a broadband service provider. Therefore, there has been no impact to the Consolidated Fund during the existence of the current BLINS program, which went into effect in 2017. Recently, WVEDA has seen an increase in the number of requests for loans insured under the BLINS Program resulting from applications made by banks to issue letters of credit to broadband service providers who are participating in federally funded broadband expansion programs, but any impact to the Consolidated Fund from the increase in the amount of insured loans is speculative and not able to be estimated. Any administrative costs to the WVEDA are minimal so long as there is no default on any insured loan. In the event of a default, WVEDA will incur legal expenses in connection with the exercise of rights and remedies against the broadband service provider and the collateral securing the bank loan.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2021
Increase/Decrease
(use"-") |
2022
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
WVEDA is not able to determine what affect the increase in the principal amount of the nonrecourse loan will have upon the Consolidated Fund. Any administrative costs to the WVEDA are minimal.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
NONE
Person submitting Fiscal Note: Caren Wilcher, Associate Director
Email Address: caren.d.wilcher@wv.gov