FISCAL NOTE
Date Requested: January 14, 2023
Time Requested: 02:47 PM |
| Agency: |
Treasurer's Office, WV |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1645 |
Introduced |
HB2073 |
|
|---|
| CBD Subject: |
|
|---|
|
FUND(S):
N/A
Sources of Revenue:
Other Fund N/A
Legislation creates:
Creates New Expense, Creates New Program, Creates New Fund: State Bank of West Virginia
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The proposed legislation creates a State Bank of West Virginia and transfers banking authorities of the State Treasurer to the State Bank. By way of background information, the Bank of North Dakota was the first state bank founded in 1919, capitalized initially through a $2 million bond issue in 1919. Adjusting for inflation, this amount in today’s cost would be approximately $25 million without taking into account any adjustments for the growth in the size of the economy from 1919 to today. The Commonwealth of Massachusetts commissioned a study in 2011 on the feasibility of a state bank in Massachusetts and used the Bank of North Dakota as a model for data and comparison. The report produced from this feasibility study adjusted the capitalization for the Bank of North Dakota and suggested that today (or in 2011) a capitalization of $325 million would be required to establish the Bank of North Dakota. Additionally, this report suggested with the large-scale size of the economy of Massachusetts, an initial capital investment of up to $3.6 billion would be required to establish a state-run bank in Massachusetts. It is difficult to predict the range of potential start-up costs in West Virginia, but it would likely be a large cost initially in the range between North Dakota and Massachusetts, especially considering the differences in economies between North Dakota, Massachusetts, and West Virginia. However, it would be a significant capital investment needed to establish a state-run bank.
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 |
900,000,000 |
900,000,000 |
| 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 proposed legislation creates a State Bank of West Virginia and transferring banking authorities of the State Treasurer to the State Bank. By way of background information, the Bank of North Dakota was the first state bank founded in 1919, capitalized initially through a $2 million bond issue in 1919. Adjusting for inflation, this amount in today’s cost would be approximately $25 million without taking into account any adjustments for the growth in the size of the economy from 1919 to today. The Commonwealth of Massachusetts commissioned a study in 2011 on the feasibility of a state bank in Massachusetts and used the Bank of North Dakota as a model for data and comparison. The report produced from this feasibility study adjusted the capitalization for the Bank of North Dakota and suggested that today (or in 2011) a capitalization of $325 million would be required to establish the Bank of North Dakota. Additionally, this report suggested with the large-scale size of the economy of Massachusetts, an initial capital investment of up to $3.6 billion would be required to establish a state-run bank in Massachusetts. It is difficult to predict the range of potential start-up costs in West Virginia, but it would likely be a large cost initially in the range between North Dakota and Massachusetts, especially considering the differences in economies between North Dakota, Massachusetts, and West Virginia. However, it would be a significant capital investment needed to establish a state-run bank.
Memorandum
Person submitting Fiscal Note: James Fuerhoff
Email Address: james.fuerhoff@wvsto.gov