Energy impacted county roads program.

11LSO-0170.L5

FISCAL NOTE

This bill contains an appropriation of $20,000,000 from the GENERAL FUND to the ENERGY IMPACTED COUNTY ROADS PROGRAM ACCOUNT.  This appropriation is effective immediately.

DETAIL OF APPROPRIATION

Agency #:  060     Agency Name:  Office of State Lands and Investments

Unit:  0103        Unit Name: Grants and Loans

EXPENDITURE BY SERIES AND YEAR                  FY 2011                       FY 2012                       FY 2013

0600  Grant & Aid Payments                                                                             $10,000,000                   $10,000,000

Total Expenditure Per Year:                                                                               $10,000,000                   $10,000,000

Grand Total Expenditure:             $20,000,000

Total Appropriated to Agency:     $20,000,000

Total Appropriated by Fund:

GENERAL FUND:                   $20,000,000

Discussion of appropriation:

Funds will be expended through the awarding of grants by the State Loan and Investment Board (SLIB); however it should be noted that depending on specific funding requests by the counties and the actions of the Board, the general fund appropriation could be used during FY 2012 and FY 2013 or could be extended for any number of years.  Use of the general fund appropriation as a “first” choice of funding for the program would limit the Board's ability to provide funding for emergency road projects within qualified counties in future years.

Discussion of Revenue Increases/ Decreases:

The fiscal impact for the loan portion of the program is indeterminable.  Under the program, SLIB may loan, not to exceed $60,000,000, from the permanent mineral trust fund (PWMTF).  Each loan’s interest rate is set at a rate equal to the average interest earned on discretionary investments of the PWMTF for the five calendar years immediately preceding the year in which the loan was issued and shall be adjusted on an annual basis but shall never exceed the interest rate as of the date of issuance. Therefore the total interest earned on these loans may result in either a lower or higher rate of return to the PWMTF depending upon market conditions at the time the loans are made.  Using the actual yields for FY2007 through FY 2010 and the October CREG 2010 estimates for FY 2011 through FY 2013, the estimated average interest earned on discretionary investments of the permanent Wyoming mineral trust fund for the five (5) calendar years preceding FY12 is 4.56% for FY13 is 3.38% and for FY14 is 3.18%.

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

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