Merit career-technical scholarships.

13LSO-0485.L3

FISCAL NOTE

This bill contains an appropriation of $50,000 from the GENERAL FUND to the Legislative Service Office.  This appropriation is effective immediately.

DETAIL OF APPROPRIATION

Agency #:  201     Agency Name:  Legislative Service Office

Unit:  0101 Administration

EXPENDITURE BY SERIES AND YEAR       FY 2013         FY 2014         FY 2015

0100  Personnel/Benefit Costs           $2,700            $5,500                

0200  Supportive Services Costs         $8,600           $17,200                

0900  Contractual Services Costs        $5,500           $10,500                

Total Expenditure Per Year:            $16,800           $33,200               

Grand Total Expenditure:               $50,000

Total Appropriated to Agency:          $50,000

Total Appropriated by Fund

GENERAL FUND             :             $50,000

Description of appropriation:

It is assumed that $8,200 of this appropriation will be expended for the payment of salary for the 4 legislative committee members, and $25,800 will be expended for the per diem and mileage for all committee members. This estimate assumes a total of 6 meeting days, with 2 meeting days taking place in FY 2013 and 4 days taking place in FY 2014. It is assumed that $16,000 of the appropriation would be expended on consultants through 0900 series expenditures.

	FY 2014	FY 2015	FY 2016
NON-ADMINISTRATIVE IMPACT
Anticipated Revenue Increase (Decrease):
SCHOOL CAP CON ACCOUNT	(125,050,000)	0	0
TECH ED SCHOLAR ENDOWMENT	125,000,000	0	0
GENERAL FUND	50,000	0	0
TECH ED SCHOLAR EXPEND	1,625,000	3,000,000	3,000,000

Source of revenue increase (decrease):

Diversion of coal lease bonus revenues from the School Capital Construction Account to the Merit Career-Technical Education Student Scholarship Endowment Fund. The January 2013 CREG Forecast indicates the entire $125,000,000 in coal lease bonus payments would be received by the state within the first two quarters of FY 2014 at which time the new endowment fund would be fully funded.

Investment earnings from the endowment fund will flow into the Merit Career-Technical Education Student Scholarship Expenditure Account.

[page 1 of 2]

Assumptions: 

It is assumed the entire $125,000,000 would be in the endowment fund and invested for a full six months.  Funds in the endowment fund would be invested as other permanent higher education endowment funds.  October 2012 CREG projections indicate that the estimated yield for the Hathaway Scholarship Endowment Fund and the Higher Education Endowment fund to be 2.6% for FY 2014 and 2.4% for FY 2015 and FY 2016. Yield is defined as the interest and dividend income from the investment. 

The School Capital Construction Account would see a revenue decrease of $125,050,000 in FY14 as $125,000,000 in coal lease bonus revenues received in FY 2014 would flow to the proposed endowment fund, and $50,000 would flow to the General Fund as repayment of the appropriation to the Legislative Service Office. It is estimated that $1,625,000 in investment income would flow to the expenditure account in FY 2014, and $3,000,000 would flow to the expenditure account in FY 2015 and FY 2016. 

Any additional fiscal or personnel impact is not determinable due to insufficient time to complete the fiscal note process.

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

(Information provided by Sharon Garland, Treasurer's Office; 777-7475)

[page 2 of 2]