NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used for other purposes.

 

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F I S C A L   I M P A C T   R E P O R T

 

 

 

SPONSOR:

Nava

 

DATE TYPED:

2/4/03

 

HB

 

 

SHORT TITLE:

Next Generation Trust Fund

 

SB

228

 

 

ANALYST:

Smith

 

REVENUE

 

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

 

 

 

 

(3,720.0)

 

Recurring

Tobacco Settlement Permanent Fund

 

3,720.0

 

Recurring

Next Generation Trust Fund

 

 

(744.0)

Recurring

Tobacco Settlement Program Fund/General Fund

 

 

 

 

 

 

(Parenthesis ( ) Indicate Revenue Decreases)

 

SOURCES OF INFORMATION

 

Responses Received From

 

DFA

 

SUMMARY

 

     Synopsis of Bill

 

Senate Bill 228 intercepts 10 percent of the revenue received from the tobacco master settlement agreement and uses it to finance the “next generation trust fund.  The new fund will be administered as an endowment; the income from the fund will be distributed to the youth development fund. A new board will oversee this fund; it will support development programs and activities for youth between the ages of 5 and 20. Twenty percent of this fund could be used for administrative overhead. The fund is non-reverting. The revenue intercepts begin after July 1, 2003.

 


FISCAL IMPLICATIONS

 

The fund will actually receive cash in the spring of 2004. Since it intercepts prior to receipt by the tobacco settlement permanent fund, the tobacco settlement program fund will bear one half of the loss in FY05. This is ultimately a general fund impact.

 

This bill creates a new fund and provides for continuing appropriations.  The LFC objects to including continuing appropriation language in the statutory provisions for newly created funds.  Earmarking reduces the ability of the legislature to establish spending priorities.

 

CONFLICT

 

This bill conflicts with HB244 and SB298 which abolish the tobacco funds and divert all the revenue to the general fund. 

 

TECHNICAL ISSUES

 

 

 

 

SS/njw