Farm loans-livestock lost to brucellosis.

04LSO-0337.L1

                                                         

FISCAL NOTE (HB0189)

 

 

The fiscal impact, in the form of potential revenue decrease, is indeterminable.

 

 

The amount of revenue decrease to the General Fund for FY05, FY06 and FY07 is indeterminable as it is not known how much livestock will be affected by brucellosis or how many loans will be approved during FY05, FY06 and FY07.  However, if loans were approved during FY05, FY06 and FY07, it is anticipated that there would be reduction in the rate of return on the farm loan LDI’s.  Interest rates for farm loans are currently set at 8% and loans under this legislation would be authorized at the market return rate earned during the prior fiscal year by the State Treasurer on investible funds, excluding LDI’s.  This rate of return for FY03 was 6.83%.  The rate for calendar year 2003 was 5.46% (rounded to 5.5%).   For illustration purposes, the loss in potential investment income to the general fund would be the difference between 8% and 5.5% on the amount that is loaned out.

 

 

 

Prepared by:   Sharon Garland, Treasurer’s Office    Phone:   777-7408