Hydro-power development.

11LSO-0375.L1

FISCAL NOTE

The fiscal impact is indeterminable.

Interest income would be generated from loans funded through the State's permanent funds, either the Permanent Wyoming Mineral Trust Fund (PWMTF) or the Common School Account within the Permanent Land Fund (CSPLF).  However, the interest rate set for these loans (4% to 6%) may or may not exceed the investment earnings of the funds as they stand in the current investment portfolio. The projected yield on the PWMTF and the CSPLF is anticipated to be 2.7% for FY 2012 through FY 2014 (Oct CREG). If we assume these loans would be made at four percent (4%) for thirty (30) years (the maximum term allowed), there would be an increased yield for FY 2012 – FY 2014 of 1.3% (4% - 2.7%), however, funds would not be available to invest in longer term securities that could potentially achieve a higher yield through capital gains.   

Yield is defined as the actual cash or realized return on investment.  However, the total rate of return on the permanent funds is expected to be just under seven percent (7%) over the long-term (10 plus years).  Total return is defined as growth in the value of a fund including both yield and unrealized gains.

Prepared by:   Alex Kean, LSO   Phone: 777-7881

(Information provided by: Jeanne Norman, Office of State Lands and Investments Phone:777-6644, Sharon Garland, Treasurer’s Office Phone:777-7475 and Mike Purcell, Water Development Commission Phone:777-7613)