JEFFERSON CITY - The state has yet to get the money. And officials don’t even know whether it’s legal to spend it if the state does get it.

Nevertheless, another plan has emerged to spend millions of dollars that would be generated by the sale of student loans under the control of the Missouri Higher Education Loan Authority.

"We are kind of in la-la land here," said Sen. Joan Bray, D-University City. "What are we doing here?"

Bray spoke this morning as the Senate Appropriations Committee considered a bill that would distribute about $450 million raised by the sale of some of the authority’s assets. As a member of the committee, Bray wondered whether perhaps the cart wasn’t being placed in front of the horse because the committee members didn’t even know whether the money would be available or whether the spending plan was legal.

The Senate’s plan, sponsored by Appropriations Committee Chairman Chuck Gross, R-St. Charles, would allocate the money for building projects on university campuses similar to a plan proposed by Gov. Matt Blunt. But it also would shift substantial amounts to health care.

For example, the Senate plan would devote $65.9 million to the state Department of Heath to fund creation of 20 additional Federally Qualified Health Centers in underserved areas of the state. Such centers deliver primary medical care through local clinics to uninsured patients and people relying on Medicaid coverage.

That component is at odds with a resolution approved last month by the loan authority board, which said all assets generated by the student loan sale should be used for higher education. In addition to the plans from Blunt and Gross, the House has its own version that would devote money for college capital improvements, scholarships and $75 million to retire some of the state’s debt.

Gross acknowledged there were questions about whether the authority would deliver the assets and whether it was legal. But he said those were issues for the authority’s board to consider.

"None of this will happen if the authority board decides not to sell the assets," Gross said. "All we are going to do is decide what we’re going to do with it if they decide to sell the assets."

And Gross added that his plan to spend the money was not perfect.

"A lot of this is our first best guess about the appropriate use of the money," he said.

Two Democrats on the committee, Tim Green of north St. Louis County and Pat Dougherty of St. Louis, questioned whether MOHELA’s ability to issue low-interest loans would suffer if some of its assets were sold.

"That’s the elephant in the room that everyone is ignoring," Dougherty said.

As the committee considered Gross’ plan, another meeting was under way down the street from the Capitol at the offices of the Missouri Bankers Association. There, executives of the MOHELA board were discussing with association officials what market share state banks would surrender to allow MOHELA to issue low-interest Stafford loans.

MOHELA does not have that authority now. Its executives say the agency needs it to remain financially viable. Missouri banks, which now issue such loans, would have to decide to let MOHELA compete for some of the business. The meeting broke up with no decision reached. MOHELA executives were asked to come back with numbers showing how much of the market they need, said Bill Ratliff, a lobbyist for the bankers association.

The committee made no decision on Gross’ plan and scheduled another meeting for later today to collect more testimony.