State common school trust land management account.

09LSO-0028.C1

†††††††††††††††††††††††††††††††††††††††††††††††††††††††††

FISCAL NOTE

 

 

FY 2010

FY 2011

FY 2012

NON-ADMINISTRATIVE IMPACT

 

 

 

Anticipated Revenue Increase (Decrease):

 

 

 

COMMON SCHOOL - PL FUND

(2,168,293)

(1,970,482)

(1,759,241)

TRUST LAND MGT ACCOUNT

2,168,293

1,970,482

1,759,241

 

Source of revenue increase (decrease): Distribution of 1% of Common School Permanent Land Fund revenues to the proposed Common School Trust Land Management Account.

 

Assumptions:

 

Estimate is based on current commodity price and volume trend data for the first half of calendar year 2008. This estimate is conditioned upon and subject to market volatility.

 

Investment income earned on deposits to the proposed Common School Trust Land Management Account (CSTLMA) would be invested as part of the State Agency Pool. Investment earnings would still be credited to the Common School Permanent Land Fund (CSPLF) income fund which flows to the School Foundation Account.†

 

It is not known, however, how much of the amount deposited to the proposed CSTLMA will be expended each year, therefore, the amount of investment income earned on the balance in the CSTLMA that will flow to the CSPLF income account (School Foundation Account) is not determinable.

 

Yields for the CSPLF are projected to be 2.90% in FY10, FY11 and FY12. Yields for the State Agency Pool are expected to be 4.81% in FY10, FY11 and FY12 (October CREG).

 

Yield is defined as the actual cash or realized return on investment. Total returns for the permanent funds are expected to be just under 7% over the long-term (10 plus years), while total returns for the non-permanent funds are expected to be just under 5%. Total return is defined as growth in the value of a fund including both yield and unrealized gains.

 

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

(Information provided by Sharon Garland, Treasurerís Office; 777-7475

Susan Child, Office of State Lands & Investments; 777-3428)