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H 740

EDUCATION – Amends existing law to revise provisions regarding the deposit and distribution of earnings reserve funds.

68th Legislature, 2nd Regular Session (2026)

The bill directs endowment earnings to local K-12 education via a per-pupil distribution based on ADA, funded from earnings reserves and overseen by the Land Commissioners and Depa

Reported Printed and Referred to Education
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Bill Summary · H 740

Summary of Bill H 740 (2026) – Idaho

Purpose and intent

  • The bill amends existing law to revise how earnings reserve funds from endowment investments are deposited and distributed.
  • It formalizes distribution of earnings from permanent endowment funds related to state land grants and directs a special, per-pupil distribution to Idaho public school districts for the earnings that support public education.
  • An emergency clause is included, making the act effective July 1, 2026.

Key provisions and changes

  • Section 57-723A, Idaho Code, is amended to govern:
    • (1) The responsibility of the investment board, directed by the state board of land commissioners, to distribute investment earnings from endowments in accordance with this act and endowment laws.
    • (2) Annual distribution of earnings reserve funds (beyond administrative costs) to income funds of each endowment or to the endowment’s permanent endowment fund or free fund balance within the earnings reserve funds, as determined by the state board of land commissioners.
    • (3) A special distribution mechanism for earnings intended to support public school beneficiaries. This per-pupil distribution uses the average daily attendance (ADA) calculation from section 33-1003A, Idaho Code, to allocate funds to each school district for students who receive most instruction in a facility owned or leased by the district or a public charter school.
    • (4) Authorization for the legislature to appropriate earnings reserve funds to cover administrative costs associated with managing endowment assets (real property and monetary assets).
  • The bill clarifies that earnings distributions to support K-12 education are made through the Department of Education via a per-pupil basis, tied to ADA for students in eligible facilities.

Who/what is affected

  • Endowment funds and their earnings reserve funds, specifically:
    • Permanent endowment funds related to state land grants.
    • The endowment’s income funds or free balance within earnings reserve funds.
  • Idaho public school districts and public charter schools, which would receive a special per-pupil distribution funded from endowment earnings.
  • The State Board of Land Commissioners and the Investment Board, which will oversee distribution of earnings and management of endowment assets.
  • The Idaho Department of Education, which administers the per-pupil distributions to districts.

Procedural and timeline details

  • Effective date: July 1, 2026, due to the emergency clause.
  • Distribution timing: At least annually, distributions from earnings reserve funds (beyond administrative costs) to appropriate endowment accounts or funds as determined by the State Board of Land Commissioners.
  • Administrative costs: Earnings may be used to pay administrative costs of administering endowments, including property and monetary assets.
  • Supporting documentation: The bill includes a fiscal note stating no impact on the General Fund; funding comes from constitutionally authorized endowment fund distributions. A statement of purpose outlines that the Endowment Lands and Endowment Fund were created to support public education in perpetuity.

Additional context

  • The bill emphasizes transparency and distribution of endowment earnings to local school districts, aligning with Idaho’s constitutional and historical framework for endowment funds supporting education.
  • It codifies a per-pupil distribution approach for funds intended to benefit K-12 students, leveraging ADA to determine allocations.

If you’d like, I can provide a plain-language paraphrase of the per-pupil distribution calculation or compare this bill to prior endowment distribution statutes.

Compiled from official sources — confirm details with the bill’s official record.

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