LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 15 HLS 201ES 10
Bill Text Version: ENGROSSED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: June 9, 2020 4:31 PM Author: IVEY
Dept./Agy.: Statewide
Subject: Establishes the State Budget Authority Reserve Trust Analyst: Alan M. Boxberger
BUDGETARY CONTROLS EG +$139,700,550 SD RV See Note Page 1 of 2
Establishes the State Budget Authority Reserve Trust for use as an extra source of revenue for executive department
agencies (Item #11)
Proposed law establishes the State Budget Authority Reserve Trust to be used as an extra source of revenue for executive
department agencies; requires that 1% of all monies that flow through the Bond Security and Redemption Fund (BSRF) for
appropriation from the general fund, except for monies pledged in connection with issuance of bonds, be deposited into the
fund; authorizes the commissioner of administration, acting in concert with the Joint Legislative Committee on the Budget,
to allocate revenues from the trust to agencies who apply for increased budget authority; provides that unexpended monies
in the trust at the end of the fiscal year shall remain in the fund; and requires that the treasurer report not less than
quarterly to the commissioner of administration and the Joint Legislative Committee on the Budget the total amount of funds
available for distribution from the trust. Proposed law is effective July 1, 2021.
EXPENDITURES 2020-21 2021-22 2022-23 2023-24 2024-25 5 -YEAR TOTAL
State Gen. Fd. $0 ($139,700,550) ($139,700,550) ($139,700,550) ($139,700,550) ($558,802,200)
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $139,700,550 $139,700,550 $139,700,550 $139,700,550 $558,802,200
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0 $0 $0
REVENUES 2020-21 2021-22 2022-23 2023-24 2024-25 5 -YEAR TOTAL
State Gen. Fd. $0 ($139,700,550) ($139,700,550) ($139,700,550) ($139,700,550) ($558,802,200)
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $139,700,550 $139,700,550 $139,700,550 $139,700,550 $558,802,200
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0 $0 $0
EXPENDITURE EXPLANATION
Proposed law will result in an increase in statutorily dedicated expenditures out of the newly created State Budget Authority
Reserve Trust of up to approximately $139.7 M annually beginning in FY 22. Proposed law provides that the commissioner
of administration, acting in concert with the Joint Legislative Committee on the Budget (JLCB), can allocate revenues from
the trust to agencies who apply for increased budget authority. Proposed law would provide an additional avenue to provide
supplemental funds to agencies outside of the legislative session with commissioner recommendation and JLCB approval.
These shortfalls are typically addressed by supplemental appropriation during the regular legislative session each year.
Proposed law directs that 1% of all monies that flow through the Bond Security and Redemption Fund (BSRF) for
appropriation from the general fund, except for monies pledged to the issuance of bonds, be deposited into the fund.
Proposed law will indirectly impact expenditures, possibly across multiple means of finance (designated in this fiscal note as
SGF only for simplicity). In addition to SGF, SGR and most statutorily dedicated funds flow through the BSRF and may be
impacted. Proposed law will result in a 1% reduction of appropriation capacity from any means of finance that flows through
the BSRF, except for monies pledged in connection with issuance of bonds. The ultimate impact will depend on legislative
appropriations.
SEE EXPENDITURE EXPLANATION CONTINUED ON PAGE TWO
REVENUE EXPLANATION
Proposed law diverts existing deposits of approximately $139.7 M annually beginning in FY 22 from the Bond Security and
Redemption Fund (BSRF) to be deposited into the newly created statutory dedication – State Budget Authority Reserve
Trust. For illustrative purposes, the Treasury reported to the Interim Emergency Board that $13.97 B was deposited into the
BSRF during FY 19. Therefore, the estimated amount that would be diverted to the newly created fund is $139.7 M annually
($13.97 B x 1%). Proposed law will indirectly impact revenues, possibly across multiple means of finance (designated in this
fiscal note as SGF for simplicity). In addition to SGF, SGR and most statutorily dedicated revenues flow through the BSRF
and may be impacted. The ultimate impact will depend on decisions made through legislative appropriations.
NOTE: These projections do not reflect any growth or change in the outyears as the BSRF is not a forecasted fund. The LFO
assumes there is potential change in the outyears but that amount is indeterminable and will be based on actual revenue
collections in each ensuing fiscal year.
Senate Dual Referral Rules House
x 13.5.1 >= $100,000 Annual Fiscal Cost {S & H} x 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Evan Brasseaux
13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Staff Director
 LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 15 HLS 201ES 10
Bill Text Version: ENGROSSED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: June 9, 2020 4:31 PM Author: IVEY
Dept./Agy.: Statewide
Subject: Establishes the State Budget Authority Reserve Trust Analyst: Alan M. Boxberger
CONTINUED EXPLANATION from page one: Page 2 of 2
EXPENDITURE EXPLANATION CONTINUED FROM PAGE ONE
For informational purposes, the legislature appropriated $131.6 M SGF and $74.9 M IAT in FY 19 via the Supplemental Bill
(Act 50 of the 2019 Regular Session). For FY 18, the legislature appropriated $158.5 M SGF and $2.2 M IAT via the
Supplemental Bill (Act 59 of the 2018 Regular Session).
Proposed law provides that all unexpended and unencumbered monies in the trust at the end of the fiscal year shall remain
in the fund.
Creating a new statutory dedication within the state treasury will result in a marginal workload increase for the Department
of Treasury, which can generally be absorbed within existing resources. However, to the extent other legislative instruments
create new statutory dedications, there may be material additional costs associated with the aggregate effort to administer
these funds. The Treasury performs fund accounting, financial reporting, banking and custodial functions for 404 special
funds. When unable to absorb additional workload with existing resources, the Treasury anticipates it will be required to add
one T.O. position at a total personal services cost of approximately $71,000, plus approximately $2,450 for a one-time
purchase of office equipment. These expenditures are assumed to be SGF in this fiscal note.
The treasury also reports that given limitations of the current statewide accounting system, the diversion of revenues flowing
through the BSRF that will require a 1% carve-out into the State Budget Authority Reserve Trust would require a significant
workload increase. Until all state agencies are moved onto the LaGov Enterprise Solution, each deposit into the treasury
would require a manual claw back for deposit into the Fund. In the current accounting system, once a deposit is coded to a
particular revenue source it flows almost instantaneously through the BSRF, is deposited into the appropriate agency
account, and is available for expenditure. The treasury would be required to intercede and remove 1% of any deposit
manually before an expenditure occurs. This would impact innumerable individual transactions on an annual basis. Once
state agencies have transferred all accounting functions onto LaGov, that system can be programmed to make the necessary
diversion as it flows through the BSRF. The legacy accounting system does not have this capability at this time.
Senate Dual Referral Rules House
x 13.5.1 >= $100,000 Annual Fiscal Cost {S & H} x 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Evan Brasseaux
13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} or a Net Fee Decrease {S} Staff Director