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F I S C A L   I M P A C T   R E P O R T

 

 

 

SPONSOR:

Sharer

 

DATE TYPED:

2/17/03

 

HB

 

 

SHORT TITLE:

Economic Stimulus Bonding Act

 

SB

612

 

 

ANALYST:

Smith

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

 

(50,000.0)

 

Recurring

General Fund

(Ending Balance)

 

(5,500.0)

 

Recurring

General Fund

(Gross receipts)

 

(55,000.0)

 

Recurring

Economic Stimulus Bonding Fund

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

 

LFC Files

 

SUMMARY

 

     Synopsis of Bill

 

Senate Bill 614 allows the NMFA to issue “economic stimulus anticipation bonds” in an amount not to exceed $500 million. The bonds are payable from excess general fund revenue and shall have a differential rate as is consistent under the statutes governing the Severance Tax Permanent Fund-only the STPF can purchase the bonds.

 

Excess General Fund Revenue is defined as ¼ of 5% of prior year appropriations. Presumably, this distribution shall be made from general fund reserve balances. In any case, $5.5 million of the general fund gross receipts tax distribution shall be distributed to the new bonding fund.

 

FISCAL IMPLICATIONS

 

This is a companion piece to the sponsor’s tax cut legislation. Using a $4 billion estimate for appropriations leads to the $50 million estimate in the revenue table.

 

 

OTHER SUBSTANTIVE ISSUES

 

Since the transfer is predicated on appropriations, it is not clear what the link is to the economic development motives noted in the legislative findings section.

 

The other non-market rates STPF investments are heavily collateralized. It is unclear whether this proposal would conflict with the prudent investor rule that governs the investment of the permanent funds.

 

SS/yr