FISCAL NOTE
Date Requested: February 28, 2023
Time Requested: 08:38 AM |
| Agency: |
Economic Development Authority, WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3281 |
Comm. Sub. |
SB523 |
|
|---|
| CBD Subject: |
Economic Development |
|---|
|
FUND(S):
9069
Sources of Revenue:
Special Fund
Legislation creates:
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.
The committee substitute for Senate Bill 523 would amend the purposes and specified uses of the Economic Development Project Fund (“EDPF”), codified in W. Va. Code § 31-15-23a, which the West Virginia Economic Development Authority (“WVEDA”) may use to incentivize business formation, expansion, site development or other concerns for eligible recipients in West Virginia. The proposed bill amends the existing code to state that the monies in the EDPF may only be used for (1) High Impact Development Projects in the form of loans (which may be repaid and made available to subsequent recipients), grants, or other offers of financial assistance or aid upon such terms as the Governor may request and the WVEDA shall approve; (2) traditional loans, which shall be repaid and made available to subsequent borrowers; or (3) business retention projects loans, which shall be repaid and made available to subsequent borrowers. Unless otherwise provided by the legislature, funds in the EDPF would be limited to $300 million per annum for High Impact Development Projects (as such term is defined in the code), $250 million per annum on a rolling basis for traditional loans, and $50 million per annum on a rolling basis for business retention projects. The proposed legislation also removes existing language providing that a minimum of $200 million in the EDPF may only be used to finance High Impact Development Projects.
The WVEDA would not incur any additional expenses to administer programs funded by the EDPF; however, §31-15-23a(b) provides that the EDPF shall consist of monies appropriated to the WVEDA during the 2022 regular legislative session, from available surplus funds, transfers from the Industrial Development Loans fund, gifts, grants, contributions, any earnings or interest accruing to said fund, and any other moneys appropriated to said fund. Funds made available during the 2022 regular legislative session for High Impact Development Projects (as well as surplus funds made available for such projects pursuant to HB 2882 in a supplemental appropriation effective as of February 15, 2023) have been spent down or otherwise committed to eligible projects; therefore, an additional legislative appropriation would be necessary to replenish the EDPF with additional monies to be made available for purposes consistent with §31-15-23a.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2023
Increase/Decrease
(use"-") |
2024
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.
SB 523 would require a legislative appropriation to increase funds in the EDPF for purposes consistent with §31-15-23a but WVEDA is not able to predict what amount, if any, the legislature may appropriate for such purpose.
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.
Lines 3 and 4 of the bill’s title provides that “… funds may be used solely for loans; …”. Traditional loans and business retention loans, as described in the bill, are limited to loans; however, high impact development projects are eligible for loans as well as grants, other offers of financial assistance, or aid upon such terms as the governor may request and WVEDA shall approve. Recommend amending this portion of the title to: “providing that certain funds may be used solely for loans; …”
Person submitting Fiscal Note: Caren Wilcher
Email Address: caren.d.wilcher@wv.gov