LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: SB 146 SLS 23RS 362
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: June 8, 2023 5:02 PM Author: CORTEZ
Dept./Agy.: Treasury/Transportation and Development
Subject: Megaproject Leverage Fund Investments Analyst: Kimberly Fruge
FUNDS/FUNDING EN INCREASE SD RV See Note Page 1 of 1
Provides for Megaprojects Leverage Fund investments. (gov sig)
Proposed law allows the Megaproject Leverage Fund to be invested in a separate portfolio in the same securities as allowed
for the State General Fund; allows for amounts in the fund to be appropriated to pay expenses incurred for custody,
investment, and disbursement costs.
EXPENDITURES 2023-24 2024-25 2025-26 2026-27 2027-28 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other INCREASE INCREASE INCREASE INCREASE INCREASE
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total
REVENUES 2023-24 2024-25 2025-26 2026-27 2027-28 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other INCREASE INCREASE INCREASE INCREASE INCREASE
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total
EXPENDITURE EXPLANATION
Proposed law will increase expenditures out of the Megaprojects Leverage Fund (MLF) to pay the custodian of the portfolio
the fund administration fee, the custody fee, and the transaction fees. The Treasury reports the fund administration fee to
be $179 per month, the custody fee to be 0.0002% of the fair market value of the fund as of the last day of the month, and
the transaction fee to vary but be approximately $3.50 per transaction. The table below presents an estimation of monthly
and annual fees based on the end of the year anticipated balance and the assumption that there will be 18 transactions in a
month.
FY 24 FY 25 FY 26 FY 27 FY 28
Account Fee $179 $179 $179 $179 $179
Custody Fee $1,612 $2,000 $2,398 $2,802 $3,212
Transaction Fee $63 $63 $63 $63 $63
Monthly Fee $1,854 $2,242 $2,640 $3,044 $3,455
Annual Fee $22,252 $26,909 $31,676 $36,534 $41,460
Note: Annual Fee and Monthly Fee sums differ due to rounding errors
REVENUE EXPLANATION
Proposed law will likely result in increased revenues to the Megaprojects Leverage Fund (MLF) as a result of investing the
fund in a separate portfolio. The Department of Transportation and Development (DOTD) has indicated that they will not use
money from the fund within the five-year window. Because the money will not be used, the Treasury is able to increase the
interest earned in the account by investing in a separate portfolio. Revenues produced by investments will depend on market
conditions. The table below presents the estimation by the Treasury of the earned interest.
(Interest Rate) FY 24 (4%) FY 25 (3.75%) FY 26 (3.5%) FY 27 (3.25%) FY 28 (3%)
Starting Balance $628,000,000 $806,086,679 $1,000,127,460 $1,198,764,957 $1,401,155,257
Vehicle Sales Tax $128,000,000 $160,000,000 $160,000,000 $160,000,000 $160,000,000
Interest Earned $24,486,679 $34,040,781 $38,637,497 $42,390,300 $45,241,461
Ending Balance $806,086,679 $1,000,127,460 $1,198,764,957 $1,401,155,257 $1,606,396,718
Senate Dual Referral Rules House
13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 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} Interim Deputy Fiscal Officer


Statutes affected:
SB146 Original: 48:1(B)
SB146 Engrossed: 48:1(B)
SB146 Enrolled: 48:1(B)
SB146 Act 327: 48:1(B)