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SPONSOR: |
Tsosie |
DATE TYPED: |
|
HB |
|
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SHORT TITLE: |
Navajo Nation Capital Outlay Reserve Fund |
SB |
826 |
||||
|
ANALYST: |
Kehoe |
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REVENUE
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
|
FY03 |
FY04 |
|
|
|
|
See
Narrative |
|
Recurring |
New-Navajo
Nation Capitol
Outlay Reserve Fund |
|
|
|
|
|
(Parenthesis ( ) Indicate Revenue Decreases)
LFC
Files
Department
of Finance & Administration (DFA)
Board
of Finance (BOF)
No
Response
Office
of Indian Affairs (OIA)
SUMMARY
Synopsis
of Bill
Senate Bill 826 creates a Navajo Nation capital
outlay reserve fund within the state treasury.
Significant
Issues
Senate Bill 826 creates a Navajo Nation capital
outlay reserve fund consisting of money appropriated for capital projects for
the Navajo Nation that would be administered and disbursed by the Office of
Indian Affairs (OIA) for the purpose for which the appropriations are
made. Senate Bill 826 would allow OIA to
disburse up to 10 percent of the appropriation to the Navajo Nation for capital
projects before work commences, with the balance of the appropriation made on a
cost-reimbursement basis. The bill requires
OIA to maintain a separate accounting of both advance and cost-reimbursement
payments made to the Navajo Nation for each capital project, and in cooperation
with the State Board of Finance, promulgate rules for implementing the provisions
of the bill.
Under current law, appropriations made to the
Navajo Nation are deposited in capital accounts within the state treasury and
are monitored by OIA and the Board of Finance if projects are financed with
proceeds from Severance Tax Bonds.
Payments of all capital project expenditures, regardless of the funding
source, are administered by state agencies and are made solely on a
cost-reimbursement basis when agencies certify that the expenditures are within
the letter of the law. Upon
certification of a legitimate expenditure or completion of a project by the
state administering agency, payment is made either by a warrant issued by the
Financial Control Division of the Department of Finance and Administration, or
BOF transfers funds to the state agency’s capital project fund within the
treasury, and the agency can make a wire transfer from the capital fund
directly to an account of a government entity or a contractor. Capital outlay project managers at each state
agency are responsible for verifying reimbursable expenditures and completion
of a project.
FISCAL IMPLICATIONS
Senate Bill 826 would
allow OIA to disburse up to 10 percent of an appropriation to the Navajo Nation
for capital projects prior to work commencing, with the balance of the
appropriation made on a cost-reimbursement basis. According to BOF, if an appropriation is
authorized from severance tax bonds, bond counsel has concerns regarding the
issuance of tax-exempt bonds for advance funding. It is uncertain how the state would recover
the 10 percent of tax-exempt bonds if the project does not proceed as planned.
LMK/njw:yr