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HF 785

as introduced - 87th Legislature (2011 - 2012) Posted on 03/03/2011 10:39am

KEY: stricken = removed, old language.
underscored = added, new language.
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Engrossments
Introduction Posted on 03/03/2011

Current Version - as introduced

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A bill for an act
 relating to education finance; clarifying the interest payments on the permanent
school fund; amending Minnesota Statutes 2010, section 11A.16, subdivision 5.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2010, section 11A.16, subdivision 5, is amended to read:


Subd. 5.

Calculation of income.

As of the end of each fiscal year, the state
board shall calculate the investment income earned by the permanent school fund. The
investment income earned by the fund shall equal the amount of interest on debt securities
deleted text begin anddeleted text end new text begin , new text end dividends on equity securitiesnew text begin , and interest earned on certified monthly earnings prior
to the transfer to the Department of Educationnew text end . Gains and losses arising from the sale of
securities shall be apportioned as follows:

(a) If the sale of securities results in a net gain during a fiscal year, the gain shall
be apportioned in equal installments over the next ten fiscal years to offset net losses in
those years. If any portion of an installment is not needed to recover subsequent losses
identified in paragraph (b) it shall be added to the principal of the fund.

(b) If the sale of securities results in a net loss during a fiscal year, the net loss shall
be recovered first from the gains in paragraph (a) apportioned to that fiscal year. If these
gains are insufficient, any remaining net loss shall be recovered from interest and dividend
income in equal installments over the following ten fiscal years.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
 new text end