Federal mineral royalty distributions.

07LSO-0320.L3

FISCAL NOTE

The fiscal impact is indeterminable.

This bill increases the maximum dollar amounts of over-the-cap federal mineral royalties (FMRs) that may be diverted from the School Foundation Program Account (SFP) to the Hathaway student scholarship endowment account and to the higher education endowment account. This bill proposes to continue distributions to the Hathaway student scholarship account until the balance equals $476 million. This bill also proposes to continue distributions to the higher education endowment account until total distributions to that account equal $125 million. A combined total of approximately $250.6 million has been distributed to these endowments thus far, as of the end of FY06.

This bill also creates a new diversion of over-the-cap FMRs to the Hathaway student scholarship endowment account and the higher education endowment account. This new diversion would take place each fiscal year, and be equal to the balance of each account as of July 1 multiplied by the most recent available statewide annual inflation rate as computed by the division of economic analysis. Like the current diversion to the endowment accounts, this proposed diversion would also be reduced as necessary to ensure an unencumbered balance of $100 million in the SFP as of July 1 of each fiscal year.

Since the final expenditure amounts from the SFP for the 2007-08 and 2009-10 bienniums are currently unknown, the amounts of these proposed diversions to the endowment accounts cannot be determined.

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