COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.:         5025-01

Bill No.:          Perfected SB 1116

Subject:           Bonds - General Obligation and Revenue; Natural Resources Dept.

Type:              Original

Date:               March 13, 2008

Bill Summary:            Authorizes the issuance of an additional $40 million in bonds for certain water related grants and loans.

FISCAL SUMMARY

*Net Revenues and Expenditures of Bond issuance of $0 to $40,000,000.

Numbers within parentheses: ( ) indicate costs or losses.

This fiscal note contains 5 pages.

☐ Estimated Total Net Effect on All funds expected to exceed $100,000 savings or (cost).

☐ Estimated Net Effect on General Revenue Fund expected to exceed $100,000 (cost).

FISCAL ANALYSIS

ASSUMPTION

Officials from the Office of Administration - Division of Accounting assume, although there would be no fiscal impact relating to this authorization increase, there would be a fiscal impact if any of the currently outstanding authorization is actually issued. There would need to be approximately $700,000 for principal and interest for every $10 million dollars issued and one time costs of approximately $193,471 for each issuance.

Officials from the Department of Natural Resources assume the proposal wouldauthorize the sale of $40 million in Water Pollution and Stormwater Control Bonds to be used as noted:

*Provide funding to continue the state's 40% State Construction Grants Program for those economically disadvantaged communities that do not qualify for the SRF loan program.

*Provide funding to continue the rural water and sewer grant program and the storm water grant program.

*Initiate loan programs under the rural water and sewer grant and storm water grant programs.

Bonds are sold on as-needed basis.

37(e) money is approved for $10 million to be spend as follows:
$7 Million for the 40% State Construction Grant Programs
$3 Million for the Rural Water and Sewer grants

37(g) money is approved for $10 Million to be spent as follows:
$5 Million for Rural Water grants and loans
$5 Million for Rural Sewer grants and loans

47(h) money is approved for $20 Million to be spent as follows:
$10 Million for stormwater grants
$10 Million for stormwater loans

Oversight is unable to determine when bonds would be sold and has ranged the sale from $0 to $40 million. Oversight has ranged the annual income and annual repayment of bonds sold from $0 to $2,993,471.

FISCAL IMPACT - Small Business

No direct fiscal impact to small businesses would be expected as a result of this proposal.

FISCAL DESCRIPTION

The proposed legislation authorizes the issuance of an additional $40 million in bonds for grants and loans for storm water control in certain areas.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Office of Administration

Department of Natural Resources

                                                                                                Mickey Wilson, CPA

                                                                                                Director

                                                                                                March 13, 2008