Natural gas service development.

13LSO-0486.L3

FISCAL NOTE

The fiscal impact is indeterminable.

Interest income would be generated from loans funded through the State’s permanent funds, 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 earning of the funds as they stand in the current investment portfolio.  The projected yield on the PWMTF and the CSPLF is anticipated to be around 2.3% in FY14 through FY16.  (Oct 2012 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 FY14 – FY16 of 1.7% (4% - 2.3%), however, funds would not be available to invest in longer term securities that could potentially achieve a higher yield.   

Yield is defined as the interest and dividend income from the investment.  Total returns for the permanent funds are expected to be just under 6.5% over the long term (10 plus years).  Total return is defined as growth in the value of the investment, including both yield and realized & unrealized gains.

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

(Information provided by: Sharon Garland, Treasurer’s Office Phone: 777-7475 and Amanda Sewell, Office of State Lands and Investments Phone: 777-7028)