FISCAL NOTE
Date Requested: March 03, 2021
Time Requested: 11:24 AM |
| Agency: |
Treasurer's Office, WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2655 |
Comm.Sub. Eng.2 |
SB295 |
|
|---|
| CBD Subject: |
Governor -- Bills Requested By |
|---|
|
FUND(S):
8692-- Consolidated Fund State Participation
Sources of Revenue:
Other Fund N/A
Legislation creates:
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The bill requires the Board of Treasury Investments, subject to a liquidity determination, to issue a nonrecourse loan from the state’s Consolidated Fund of up to $80 million to the Economic Development Authority (EDA). The loan is classified as a fixed income investment. This loan will finance the EDA’s Broadband Loan Insurance (BLINS) Program. Through the BLINS program, the EDA insures broadband providers’ repayment of loans to the third-party lending institutions financing federally supported broadband deployment projects. Current Code requires the Board to issue a nonrecourse loan of up to $50 million to finance the BLINS program – this bill will increase the permissible loan amount by $30 million.
Although the bill will not affect general revenue unless a broadband provider defaults on a BLINS loan, any resulting loss would ultimately be recorded as a loss to general revenue. The potential loss to general revenue that could result from a broadband provider’s default on a loan insured by the EDA is too speculative to estimate at this time; however, increasing the permissible loan amount does increase the general revenue fund’s exposure by that same amount.
Administrative costs to the Board of Treasury Investments would be minimal.
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):
The bill requires the Board of Treasury Investments, subject to a liquidity determination, to issue a nonrecourse loan from the state’s Consolidated Fund of up to $80 million to the Economic Development Authority (EDA). The loan is classified as a fixed income investment. This loan will finance the EDA’s Broadband Loan Insurance (BLINS) Program. Through the BLINS program, the EDA insures broadband providers’ repayment of loans to the third-party lending institutions financing federally supported broadband deployment projects. Current Code requires the Board to issue a nonrecourse loan of up to $50 million to finance the BLINS program – this bill will increase the permissible loan amount by $30 million.
Although the bill will not affect general revenue unless a broadband provider defaults on a BLINS loan, any resulting loss would ultimately be recorded as a loss to general revenue. The potential loss to general revenue that could result from a broadband provider’s default on a loan insured by the EDA is too speculative to estimate at this time; however, increasing the permissible loan amount does increase the general revenue fund’s exposure by that same amount.
Administrative costs to the Board of Treasury Investments would be minimal.
Memorandum
Person submitting Fiscal Note: James Fuerhoff
Email Address: james.fuerhoff@wvsto.com