Homestake lands purchase.

04LSO-0177.L2

                                                         

UPDATED FISCAL NOTE BASED ON JANUARY 2004 CREG (SF0012)

This bill contains an appropriation of $24,000,000 from the COMMON SCHOOL PERMANENT LAND FUND to the State Land Board.

This bill contains an appropriation of $200,000 from the GENERAL FUND to the State Land Board.

	FY 2005	FY 2006	FY 2007
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Increase (Decrease):
COMMON SCHOOL - LI FUND	317,000	325,000	333,000
COMMON SCHOOL - LI FUND	(864,000)	(912,000)	(960,000)
SCHOOL FOUNDATION FUND	(2,000)	(2,000)	(2,000)

Source of revenue increase: Anticipated revenue to the state from the purchase and ownership of the Homestake Lands.

Assumptions:

Above estimate based on reported existing agreements/contracts:

Grazing leases       $ 57,000/year

Timber contract      $250,000/year

Elk hunting outfitter$ 10,000/year

 

Above estimates increased annually by consumer price index (assume 2.5%).

 

Source of revenue decrease: Investment income from $24 million appropriation from Common School Permanent Land Fund. Decrease in 12 mill state share of county property tax to School Foundation Program (SFP).

Assumptions:

Investment income from Common School Permanent Land Fund flows to Common School Land Income Fund. Assume rates of return of 3.6% for FY05, 3.8% for FY06, and 4.0% for FY07, based on January 2004 CREG projections. Decrease in 12 mill state share to SFP estimated at $2,000/year, and decrease in local school resource estimated at $5,000/year, based on 2003 property taxes.

 

In addition, expenditure increases should be anticipated for FY06 and FY07 depending on the condition of the Homestake property and the final determination of how the land should be managed. The property may require fencing, weed control, as well as recreation related improvements. The amount of these expenditure increases is currently unknown.

 

Prepared by:   Dean Temte, LSO  Phone:   777-7881

(Information provided by Jim Whalen, State Lands; phone 777-6639: Sharon Garland, Treasurer’s Office; phone 777-7408)

 

This bill has administrative impact that appears to increase (or decrease) duties or responsibilities of one or more state agencies and may impact agency spending or staffing requirements. As introduced, the bill does not modify any state agency budget or current personnel authorizations.

The following state agencies will be asked to provide their estimate of the administrative fiscal impact prior to the first committee meeting held to consider the bill:

Office of State Lands and Investments