Bill Text: MN HF1353 | 2011-2012 | 87th Legislature | Introduced
Bill Title: Minnesota's permanent school trust lands independent authority created to manage, supervise, and administer.
Spectrum: Partisan Bill (Democrat 7-0)
Status: (Introduced - Dead) 2011-04-05 - Authors added Peterson, S.; Scalze; Benson, J., and Hortman [HF1353 Detail]
Download: Minnesota-2011-HF1353-Introduced.html
1.2relating to the permanent school fund; creating an independent authority to
1.3manage, supervise, and administer Minnesota's permanent school trust lands;
1.4amending Minnesota Statutes 2010, sections 16A.06, subdivision 11; 16A.125,
1.5subdivision 5; 84.027, subdivision 18; 84.085, subdivision 1; 92.12, subdivision
1.61; 92.121; 92.13; 93.2236; 94.342, subdivision 5; proposing coding for new law
1.7as Minnesota Statutes, chapter 128E.
1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.9 Section 1. Minnesota Statutes 2010, section 16A.06, subdivision 11, is amended to read:
1.10 Subd. 11. Permanent school fund reporting. The commissioner shall annually
1.11report to the Board of Trustees of the Permanent School Trust Lands Administration,
1.12the Permanent School Fund Advisory Committee, and the legislature the amount of the
1.13permanent school fund transfer and information about the investment of the permanent
1.14school fund provided by the State Board of Investment. The State Board of Investment
1.15shall provide information about how they maximized the long-term economic return of the
1.16permanent school fund.
1.17EFFECTIVE DATE.This section is effective July 1, 2013.
1.18 Sec. 2. Minnesota Statutes 2010, section 16A.125, subdivision 5, is amended to read:
1.19 Subd. 5. Forest trust lands. (a) The term "state forest trust fund lands" as used
1.20in this subdivision, means public land in trust under the Constitution set apart as "forest
1.21lands under the authority of the commissioner" of natural resources as defined by section
1.2289.001, subdivision 13
.
2.1(b) The commissioner of management and budget shall credit the revenue from the
2.2forest trust fund lands to the forest suspense account. The account must specify the trust
2.3funds interested in the lands and the respective receipts of the lands.
2.4(c) After a fiscal year, the commissioner of management and budget shall certify the
2.5total costs incurred for forestry during that year under appropriations for the protection,
2.6improvement, administration, and management of state forest trust fund lands and
2.7construction and improvement of forest roads to enhance the forest value of the lands.
2.8The certificate must specify the trust funds interested in the lands. The commissioner of
2.9natural resources and the director of the Permanent School Trust Lands Administration
2.10shall supply the commissioner of management and budget with the information needed
2.11for the certificate.
2.12(d) After a fiscal year, the commissioner shall apportion the receipts and distribute
2.13the receipts credited to the suspense account during that fiscal year as follows:
2.14(1) the amount of the certified costs incurred by thestate Department of Natural
2.15Resources for forest management, forest improvement, and road improvement during the
2.16fiscal year shall be transferred to the forest management investment account established
2.17under section89.039 , and the portion of the certified costs incurred by the Permanent
2.18School Trust Lands Administration must be transferred to that agency's investment
2.19account;
2.20(2) the balance of the certified costs incurred by thestate Department of Natural
2.21Resources during the fiscal year shall be transferred to the general fund; and
2.22(3) the balance of the receipts shall then be returned prorated to the trust funds in
2.23proportion to their respective interests in the lands which produced the receipts.
2.24EFFECTIVE DATE.This section is effective July 1, 2013.
2.25 Sec. 3. Minnesota Statutes 2010, section 84.027, subdivision 18, is amended to read:
2.26 Subd. 18. Permanent school fund authority; reporting. Thecommissioner of
2.27natural resources director of the Permanent School Trust Lands Administration has the
2.28authority and responsibility for the administration of school trust lands under sections
2.2992.121
and
127A.31 . The commissioner director shall biannually report to the Permanent
2.30School Fund Advisory Committee and the legislature on the management of the school
2.31trust lands that shows how thecommissioner director has and will continue to achieve
2.32the following goals:
2.33 (1) manage the school trust lands efficiently;
2.34 (2) reduce the management expenditures of school trust lands and maximize the
2.35revenues deposited in the permanent school trust fund;
3.1 (3) manage the sale, exchange, and commercial leasing of school trust lands to
3.2maximize the revenues deposited in the permanent school trust fund and retain the value
3.3from the long-term appreciation of the school trust lands; and
3.4 (4) manage the school trust lands to maximize the long-term economic return for the
3.5permanent school trust fund while maintaining sound natural resource conservation and
3.6management principles.
3.7EFFECTIVE DATE.This section is effective July 1, 2013.
3.8 Sec. 4. Minnesota Statutes 2010, section 84.085, subdivision 1, is amended to read:
3.9 Subdivision 1. Authority. (a) The commissioner of natural resources may accept for
3.10and on behalf of the state any gift, bequest, devise, or grants of lands or interest in lands or
3.11personal property of any kind or of money tendered to the state for any purpose pertaining
3.12to the activities of the department or any of its divisions. Any money so received is hereby
3.13appropriated and dedicated for the purpose for which it is granted. Lands and interests in
3.14lands so received may be sold or exchanged as provided in chapter 94.
3.15(b) When the commissioner of natural resources accepts lands or interests in land,
3.16the commissioner may reimburse the donor for costs incurred to obtain an appraisal needed
3.17for tax reporting purposes. If the state pays the donor for a portion of the value of the
3.18lands or interests in lands that are donated, the reimbursement for appraisal costs shall not
3.19exceed $1,500. If the donor receives no payment from the state for the lands or interests in
3.20lands that are donated, the reimbursement for appraisal costs shall not exceed $5,000.
3.21(c) The commissioner of natural resources, on behalf of the state, may accept and
3.22use grants of money or property from the United States or other grantors for conservation
3.23purposes not inconsistent with the laws of this state. Any money or property so received
3.24is hereby appropriated and dedicated for the purposes for which it is granted, and shall
3.25be expended or used solely for such purposes in accordance with the federal laws and
3.26regulations pertaining thereto, subject to applicable state laws and rules as to manner
3.27of expenditure or use providing that the commissioner may make subgrants of any
3.28money received to other agencies, units of local government, private individuals, private
3.29organizations, and private nonprofit corporations. Appropriate funds and accounts shall
3.30be maintained by the commissioner of management and budget to secure compliance
3.31with this section.
3.32(d) The commissioner may accept for and on behalf of the permanent school fund a
3.33donation of lands, interest in lands, or improvements on lands. A donation so received
3.34shall become state property, be classified as school trust land as defined in section
92.025,
3.35and be managed consistent with section
127A.31.
4.1EFFECTIVE DATE.This section is effective July 1, 2013.
4.2 Sec. 5. Minnesota Statutes 2010, section 92.12, subdivision 1, is amended to read:
4.3 Subdivision 1. Appraisers. The director of the Permanent School Trust Lands
4.4Administration may have any school trust land appraised. The commissioner may
4.5have anyschool trust or other state lands appraised. The appraisals must be made by
4.6regularly appointed and qualified state appraisers. To be qualified, an appraiser must
4.7hold a state appraiser license issued by the Department of Commerce. The appraisal
4.8must be in conformity with the Uniform Standards of Professional Appraisal Practice of
4.9the Appraisal Foundation.
4.10EFFECTIVE DATE.This section is effective July 1, 2013.
4.11 Sec. 6. Minnesota Statutes 2010, section 92.121, is amended to read:
4.1292.121 PERMANENT SCHOOL FUND LANDS.
4.13The director of the Permanent School Trust Lands Administration and the
4.14commissioner of natural resources shall exchange permanent school fund land as defined
4.15in the Minnesota Constitution, article XI, section 8, located in state parks, state recreation
4.16areas, wildlife management areas, scientific and natural areas, or state waysides or on lands
4.17managed by the commissioner as old growth stands, for other lands as allowed by the
4.18Minnesota Constitution, article XI, section 10, and section94.343, subdivision 1 , that are
4.19compatible with the goal of the permanent school fund lands in section127A.31 when, as a
4.20result of management practices applied to the permanent school fund lands and associated
4.21resources, revenue generation has been diminished or is prohibited and no alternative has
4.22been put into effect to compensate the permanent school fund for the income losses.
4.23EFFECTIVE DATE.This section is effective July 1, 2013.
4.24 Sec. 7. Minnesota Statutes 2010, section 92.13, is amended to read:
4.2592.13 STATE LANDS, DATE OF SALE.
4.26The commissioner shall hold public sales ofschool and other state lands other than
4.27school trust lands when it is advantageous to the state and to intending buyers and settlers.
4.28EFFECTIVE DATE.This section is effective July 1, 2013.
4.29 Sec. 8. Minnesota Statutes 2010, section 93.2236, is amended to read:
4.3093.2236 MINERALS MANAGEMENT ACCOUNT.
5.1(a) The minerals management account is created as an account in the natural
5.2resources fund. Interest earned on money in the account accrues to the account. Money in
5.3the account may be spent or distributed only as provided in paragraphs (b) and (c).
5.4(b) If the balance in the minerals management account exceeds $3,000,000 on June
5.530, the amount exceeding $3,000,000 must be distributed to the permanent school fund
5.6and the permanent university fund. The amount distributed to each fund must be in the
5.7same proportion as the total mineral lease revenue received in the previous biennium
5.8from school trust lands and university lands.
5.9(c) Subject to appropriation by the legislature, and approval by the director of the
5.10Permanent School Trust Lands Administration, money in the minerals management
5.11account may be spent by the commissioner of natural resources for mineral resource
5.12management and projects to enhance future mineral income and promote new mineral
5.13resource opportunities.
5.14EFFECTIVE DATE.This section is effective July 1, 2013.
5.15 Sec. 9. Minnesota Statutes 2010, section 94.342, subdivision 5, is amended to read:
5.16 Subd. 5. Additional restrictions on school trust land. School trust land may
5.17be exchanged with other Class A land only if thePermanent School Fund Advisory
5.18Committee is appointed as temporary Board of Trustees of the Permanent School Trust
5.19Lands Administration is serving as trustee of the school trust land for purposes of the
5.20exchange. Thecommittee board shall provide independent legal counsel to review the
5.21exchanges.
5.22EFFECTIVE DATE.This section is effective July 1, 2013.
5.23 Sec. 10. [128E.01] CITATION; PERMANENT SCHOOL TRUST LANDS
5.24ADMINISTRATION ACT.
5.25This chapter may be cited as the Permanent School Trust Lands Administration Act.
5.26EFFECTIVE DATE.This section is effective July 1, 2013.
5.27 Sec. 11. [128E.02] POLICY AND PURPOSE.
5.28(a) The purpose of this chapter is to establish an administration and board to manage
5.29Minnesota's school trust lands in accordance with the provisions of the Minnesota
5.30Constitution, article XI, section 8.
5.31(b) As trustee, the state must manage the lands and revenues generated from the
5.32lands in the most prudent and profitable manner possible, and not for any purpose
6.1inconsistent with the best interests of the trust beneficiaries as defined in the Minnesota
6.2Constitution, article XI, section 8.
6.3(c) The trustee must be concerned with both income for the current beneficiaries
6.4and the preservation of trust assets for future beneficiaries, which requires a balancing of
6.5short-term and long-term interests so that long-term benefits are not lost in an effort to
6.6maximize short-term gains.
6.7(d) This chapter shall be liberally construed to enable the board of trustees, the
6.8director, and the administration to faithfully fulfill the state's obligations to the trust
6.9beneficiaries.
6.10EFFECTIVE DATE.This section is effective July 1, 2013.
6.11 Sec. 12. [128E.03] DEFINITIONS.
6.12 Subdivision 1. Administration. "Administration" means the Permanent School
6.13Trust Lands Administration.
6.14 Subd. 2. Board. "Board" or "board of trustees" means the Permanent School Trust
6.15Lands Board of Trustees.
6.16 Subd. 3. Director. "Director" or "director of the Permanent School Trust Lands
6.17Administration" means the chief executive officer of the Permanent School Trust Lands
6.18Administration.
6.19 Subd. 4. School trust land. "School trust land" means land granted by the United
6.20States for use of schools within each township, swampland granted to the state, and
6.21internal improvement land that are reserved for permanent school fund purposes under the
6.22Minnesota Constitution, article XI, section 8, and land exchanged, purchased, or granted
6.23for the benefit of the permanent school fund.
6.24EFFECTIVE DATE.This section is effective July 1, 2013.
6.25 Sec. 13. [128E.04] GOVERNANCE.
6.26 Subdivision 1. Establishment. The Permanent School Trust Lands Administration
6.27is established. The Permanent School Trust Lands Administration is located within the
6.28Department of Natural Resources for administrative purposes. The commissioner of
6.29natural resources shall provide office space for the administration. The commissioner
6.30of natural resources shall provide human resources, payroll, accounting, procurement,
6.31and other similar administrative services to the administration, except to the extent the
6.32administration decides to obtain these services from another state agency that provides
6.33services to small agencies.
7.1 Subd. 2. Management. (a) The Permanent School Trust Lands Administration
7.2shall manage all school trust lands within the state. The administration is managed by
7.3a director appointed by a majority vote of the board of trustees. The board of trustees
7.4shall provide policies for the management of the administration and for the management
7.5of trust lands and assets.
7.6(b) The Board of Trustees may enter into an agreement with the commissioner of
7.7natural resources for administration and management of trust lands. This agreement
7.8must specify the services that the Department of Natural Resources will provide to the
7.9administration and the fees the department will charge for providing these services. If
7.10the administration and the commissioner of natural resources cannot reach an agreement
7.11satisfactory to both parties, the administration may contract with an outside entity for
7.12these services.
7.13(c) If, after July 1, 2013, the administration determines that receiving administrative
7.14and management services from the commissioner of natural resources is not the best way
7.15to manage lands in the most prudent and profitable manner, the board may move these
7.16services to another agency.
7.17 Subd. 3. Joint ventures. The Permanent School Trust Lands Administration, upon
7.18approval of the board of trustees, may enter into joint ventures to develop trust lands
7.19and minerals.
7.20 Subd. 4. Board of trustees membership; nomination list; qualifications; terms;
7.21replacement; chair. (a) There is established the Permanent School Trust Lands Board of
7.22Trustees.
7.23(b) The board shall consist of seven members appointed by the governor with the
7.24consent of the senate for six-year terms. Of the initial appointments to the board, the
7.25governor shall appoint one member to serve a six-year term, one member to serve a
7.26five-year term, one member to serve a four-year term, one member to serve a three-year
7.27term, one member to serve a two-year term, and one member to serve a one-year term. All
7.28subsequent appointments shall be for a term of six years, except that if a vacancy occurs,
7.29the governor shall appoint a replacement to fill the unexpired term.
7.30(c) The governor shall select six of the seven appointees to the board from a
7.31nomination list of at least two candidates for each position or vacancy submitted according
7.32to subdivision 5. The governor may request an additional nomination list of at least two
7.33candidates from the nominating committee if the initial list of candidates for a given
7.34position is unacceptable.
8.1(d) The governor may appoint one member without requiring a nomination list. This
8.2member serves a six-year term, but may be removed at the pleasure of the governor. The
8.3initial member appointed under this paragraph serves a six-year term.
8.4(e) Each board member must possess outstanding professional qualifications
8.5pertinent to the purposes and activities of the trust. Qualifications which are pertinent
8.6include: renewable and nonrenewable resource management or development, real estate,
8.7business, finance, trust administration, asset management, and the practice of law in the
8.8areas of natural resources or real estate.
8.9(f) The board of trustees shall select a chair from its membership. The governor or
8.10five board members may, for cause, remove a member of the board.
8.11(h) Compensation and reimbursement of expenses for members of the board of
8.12trustees is as provided in section 15.0575.
8.13(i) Board members are "public officials" for purposes of chapter 10A.
8.14 Subd. 5. Board of trustees nominating committee. The Board of Trustees
8.15Nominating Committee consists of 12 members. Six members must be appointed by the
8.16Subcommittee on Committees of the Committee on Rules and Administration of the
8.17senate. Six members must be appointed by the speaker of the house. A legislator may not
8.18be a member of the committee. Appointing authorities must attempt to appoint members
8.19who are knowledgeable about school trust funds issues. Geographical representation
8.20must be taken into consideration when making appointments. Membership terms,
8.21compensation, and removal of the members are governed by section 15.0575. The
8.22nominating committee is subject to the open meeting law under chapter 13D.
8.23 Subd. 6. Information to board. Board members shall be given access to all
8.24administration records and personnel consistent with law and as necessary to permit
8.25the board to accomplish its responsibilities to ensure that the administration is in full
8.26compliance with applicable policies and law.
8.27EFFECTIVE DATE.This section is effective July 1, 2013.
8.28 Sec. 14. [128E.05] POLICIES.
8.29 Subdivision 1. Management. The board shall establish policies for the management
8.30of the Permanent School Trust Lands Administration. The policies shall:
8.31(1) be consistent with the Minnesota Constitution and state law;
8.32(2) reflect undivided loyalty to the beneficiaries consistent with fiduciary duties;
8.33(3) require the return of not less than fair market value for the use, sale, or exchange
8.34of school trust assets;
9.1(4) seek to optimize trust land revenues and increase the value of trust land holdings
9.2consistent with the balancing of short-term and long-term interests, so that long-term
9.3benefits are not lost in an effort to maximize short-term gains; and
9.4(5) maintain the integrity of the trust and prevent the misapplication of its lands
9.5and its revenues.
9.6 Subd. 2. Duties. The board and the director shall recommend to the governor and
9.7the legislature any necessary or desirable changes in statutes relating to the trust or their
9.8trust responsibilities. The board shall develop policies for the long-term benefit of the trust
9.9utilizing the broad discretion and power granted to it in this chapter. The board is subject
9.10to the open meeting law under chapter 13D.
9.11 Subd. 3. Policies continued unless changed. Policies adopted by the Department
9.12of Natural Resources prior to the effective date of this act regarding school trust lands
9.13shall remain in effect until amended or repealed by the board. The administration shall be
9.14the named party in substitution of the Department of Natural Resources or its predecessor
9.15agencies with respect to all documents affecting trust lands from the effective date of
9.16this act.
9.17 Subd. 4. Accept land and property. The board may accept for and on behalf of the
9.18permanent school fund a donation of lands, interest in lands, or improvements on lands.
9.19A donation so received shall become state property, be classified as school trust land as
9.20defined in section92.025 , and be managed consistent with section
127A.31 .
9.21EFFECTIVE DATE.This section is effective July 1, 2013.
9.22 Sec. 15. [128E.06] DIRECTOR.
9.23 Subdivision 1. Term. The board shall select the director on the basis of outstanding
9.24professional qualifications pertinent to the purposes and activities of the trust. The director
9.25serves in the unclassified service at the pleasure of the board.
9.26 Subd. 2. Compensation. The board shall establish the compensation of the director
9.27and annually report the director's compensation to the legislature. The compensation and
9.28performance of the director shall be examined each year as part of the board's budget
9.29review process. The director's compensation is subject to approval under section 3.855.
9.30EFFECTIVE DATE.This section is effective July 1, 2013.
9.31 Sec. 16. [128E.07] RESPONSIBILITIES OF DIRECTOR.
9.32 Subdivision 1. Duties and budget review. In carrying out the policies of the board
9.33of trustees and in establishing procedures and rules, the director shall:
10.1(1) take an oath of office before assuming any duties as the director;
10.2(2) adopt procedures necessary for the proper administration of matters entrusted to
10.3the director by state law and board policy;
10.4(3) faithfully manage the administration under the policies established by the board;
10.5(4) submit to the board and for public inspection an annual management budget
10.6and financial plan for operations of the administration and, after approval by the board,
10.7submit the budget to the governor;
10.8(5) direct and control the budget expenditures as finally authorized and appropriated;
10.9(6) establish job descriptions and employ, within the limitation of the budget, staff
10.10necessary to accomplish the purposes of the office;
10.11(7) maintain appropriate records of trust activities to enable the legislative auditor to
10.12conduct periodic audits of trust activities;
10.13(8) provide that all leases, contracts, and agreements be submitted to legal counsel
10.14for review of compliance with applicable law and fiduciary duties prior to execution and
10.15utilize the services of the attorney general as provided in section 128E.08;
10.16(9) keep the board, beneficiaries, governor, legislature, and the public informed
10.17about the work of the director and administration by reporting to the board in a public
10.18meeting at least once during each calendar quarter; and
10.19(10) respond in writing within a reasonable time to a request by the board for
10.20responses to questions on policies and practices affecting the management of the trust.
10.21 Subd. 2. Additional responsibilities. The director may:
10.22(1) contract with other public agencies for personnel management services; and
10.23(2) with the approval of the board, enter into joint ventures and other business
10.24arrangements consistent with the purposes of the trust.
10.25EFFECTIVE DATE.This section is effective July 1, 2013.
10.26 Sec. 17. [128E.08] ATTORNEY GENERAL; CAUSE OF ACTION.
10.27(a) The attorney general shall: represent the board, director, or administration in
10.28any legal action relating to trust lands; review leases, contracts, and agreements submitted
10.29for review prior to execution; and undertake suits for the collection of royalties, rental,
10.30and other damages in the name of the state.
10.31(b) The attorney general may institute actions against any party to enforce this
10.32chapter or to protect the interests of the trust beneficiaries.
10.33(c) The trust beneficiaries specified in the Minnesota Constitution, article XI, section
10.348, may bring an action against the board of trustees to ensure that the board of trustees
10.35faithfully fulfills the board's obligations to the trust beneficiaries.
11.1EFFECTIVE DATE.This section is effective July 1, 2013.
11.2 Sec. 18. [128E.09] LAND EXCHANGE.
11.3The director of the Permanent School Trust Lands Administration may enter into
11.4land exchange agreements with the commissioner of natural resources according to the
11.5provisions of section 92.121.
11.6 Sec. 19. [128E.10] FOREST AND MINERALS MANAGEMENT.
11.7 Subdivision 1. Control. All forest and minerals management on school trust lands
11.8is vested with the board of the Permanent School Trust Lands Administration according
11.9to the provisions of this chapter.
11.10 Subd. 2. May contract. The administration may contract with any public or
11.11private entity to make improvements to or upon trust lands and to carry out any of the
11.12responsibilities of the office, so long as the contract requires strict adherence to trust
11.13management principles and applicable law.
11.14EFFECTIVE DATE.This section is effective July 1, 2013.
11.15 Sec. 20. TRANSFER OF STAFF AND ASSETS AND BUDGET
11.16RESPONSIBILITY.
11.17Unless otherwise provided by statute, the responsibilities of the Department of
11.18Natural Resources and any other state agency with respect to the permanent school fund
11.19lands are transferred to the Permanent School Trust Lands Administration effective July
11.201, 2013.
11.21EFFECTIVE DATE.This section is effective July 1, 2013.
1.3manage, supervise, and administer Minnesota's permanent school trust lands;
1.4amending Minnesota Statutes 2010, sections 16A.06, subdivision 11; 16A.125,
1.5subdivision 5; 84.027, subdivision 18; 84.085, subdivision 1; 92.12, subdivision
1.61; 92.121; 92.13; 93.2236; 94.342, subdivision 5; proposing coding for new law
1.7as Minnesota Statutes, chapter 128E.
1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.9 Section 1. Minnesota Statutes 2010, section 16A.06, subdivision 11, is amended to read:
1.10 Subd. 11. Permanent school fund reporting. The commissioner shall annually
1.11report to the Board of Trustees of the Permanent School Trust Lands Administration,
1.12the Permanent School Fund Advisory Committee, and the legislature the amount of the
1.13permanent school fund transfer and information about the investment of the permanent
1.14school fund provided by the State Board of Investment. The State Board of Investment
1.15shall provide information about how they maximized the long-term economic return of the
1.16permanent school fund.
1.17EFFECTIVE DATE.This section is effective July 1, 2013.
1.18 Sec. 2. Minnesota Statutes 2010, section 16A.125, subdivision 5, is amended to read:
1.19 Subd. 5. Forest trust lands. (a) The term "state forest trust fund lands" as used
1.20in this subdivision, means public land in trust under the Constitution set apart as "forest
1.21lands under the authority of the commissioner" of natural resources as defined by section
2.1(b) The commissioner of management and budget shall credit the revenue from the
2.2forest trust fund lands to the forest suspense account. The account must specify the trust
2.3funds interested in the lands and the respective receipts of the lands.
2.4(c) After a fiscal year, the commissioner of management and budget shall certify the
2.5total costs incurred for forestry during that year under appropriations for the protection,
2.6improvement, administration, and management of state forest trust fund lands and
2.7construction and improvement of forest roads to enhance the forest value of the lands.
2.8The certificate must specify the trust funds interested in the lands. The commissioner of
2.9natural resources and the director of the Permanent School Trust Lands Administration
2.10shall supply the commissioner of management and budget with the information needed
2.11for the certificate.
2.12(d) After a fiscal year, the commissioner shall apportion the receipts and distribute
2.13the receipts credited to the suspense account during that fiscal year as follows:
2.14(1) the amount of the certified costs incurred by the
2.15Resources for forest management, forest improvement, and road improvement during the
2.16fiscal year shall be transferred to the forest management investment account established
2.17under section
2.18School Trust Lands Administration must be transferred to that agency's investment
2.19account;
2.20(2) the balance of the certified costs incurred by the
2.21Resources during the fiscal year shall be transferred to the general fund; and
2.22(3) the balance of the receipts shall then be returned prorated to the trust funds in
2.23proportion to their respective interests in the lands which produced the receipts.
2.24EFFECTIVE DATE.This section is effective July 1, 2013.
2.25 Sec. 3. Minnesota Statutes 2010, section 84.027, subdivision 18, is amended to read:
2.26 Subd. 18. Permanent school fund authority; reporting. The
2.27
2.28authority and responsibility for the administration of school trust lands under sections
2.30School Fund Advisory Committee and the legislature on the management of the school
2.31trust lands that shows how the
2.32the following goals:
2.33 (1) manage the school trust lands efficiently;
2.34 (2) reduce the management expenditures of school trust lands and maximize the
2.35revenues deposited in the permanent school trust fund;
3.1 (3) manage the sale, exchange, and commercial leasing of school trust lands to
3.2maximize the revenues deposited in the permanent school trust fund and retain the value
3.3from the long-term appreciation of the school trust lands; and
3.4 (4) manage the school trust lands to maximize the long-term economic return for the
3.5permanent school trust fund while maintaining sound natural resource conservation and
3.6management principles.
3.7EFFECTIVE DATE.This section is effective July 1, 2013.
3.8 Sec. 4. Minnesota Statutes 2010, section 84.085, subdivision 1, is amended to read:
3.9 Subdivision 1. Authority. (a) The commissioner of natural resources may accept for
3.10and on behalf of the state any gift, bequest, devise, or grants of lands or interest in lands or
3.11personal property of any kind or of money tendered to the state for any purpose pertaining
3.12to the activities of the department or any of its divisions. Any money so received is hereby
3.13appropriated and dedicated for the purpose for which it is granted. Lands and interests in
3.14lands so received may be sold or exchanged as provided in chapter 94.
3.15(b) When the commissioner of natural resources accepts lands or interests in land,
3.16the commissioner may reimburse the donor for costs incurred to obtain an appraisal needed
3.17for tax reporting purposes. If the state pays the donor for a portion of the value of the
3.18lands or interests in lands that are donated, the reimbursement for appraisal costs shall not
3.19exceed $1,500. If the donor receives no payment from the state for the lands or interests in
3.20lands that are donated, the reimbursement for appraisal costs shall not exceed $5,000.
3.21(c) The commissioner of natural resources, on behalf of the state, may accept and
3.22use grants of money or property from the United States or other grantors for conservation
3.23purposes not inconsistent with the laws of this state. Any money or property so received
3.24is hereby appropriated and dedicated for the purposes for which it is granted, and shall
3.25be expended or used solely for such purposes in accordance with the federal laws and
3.26regulations pertaining thereto, subject to applicable state laws and rules as to manner
3.27of expenditure or use providing that the commissioner may make subgrants of any
3.28money received to other agencies, units of local government, private individuals, private
3.29organizations, and private nonprofit corporations. Appropriate funds and accounts shall
3.30be maintained by the commissioner of management and budget to secure compliance
3.31with this section.
3.32
3.33
3.34
3.35
4.1EFFECTIVE DATE.This section is effective July 1, 2013.
4.2 Sec. 5. Minnesota Statutes 2010, section 92.12, subdivision 1, is amended to read:
4.3 Subdivision 1. Appraisers. The director of the Permanent School Trust Lands
4.4Administration may have any school trust land appraised. The commissioner may
4.5have any
4.6regularly appointed and qualified state appraisers. To be qualified, an appraiser must
4.7hold a state appraiser license issued by the Department of Commerce. The appraisal
4.8must be in conformity with the Uniform Standards of Professional Appraisal Practice of
4.9the Appraisal Foundation.
4.10EFFECTIVE DATE.This section is effective July 1, 2013.
4.11 Sec. 6. Minnesota Statutes 2010, section 92.121, is amended to read:
4.1292.121 PERMANENT SCHOOL FUND LANDS.
4.13The director of the Permanent School Trust Lands Administration and the
4.14commissioner of natural resources shall exchange permanent school fund land as defined
4.15in the Minnesota Constitution, article XI, section 8, located in state parks, state recreation
4.16areas, wildlife management areas, scientific and natural areas, or state waysides or on lands
4.17managed by the commissioner as old growth stands, for other lands as allowed by the
4.18Minnesota Constitution, article XI, section 10, and section
4.19compatible with the goal of the permanent school fund lands in section
4.20result of management practices applied to the permanent school fund lands and associated
4.21resources, revenue generation has been diminished or is prohibited and no alternative has
4.22been put into effect to compensate the permanent school fund for the income losses.
4.23EFFECTIVE DATE.This section is effective July 1, 2013.
4.24 Sec. 7. Minnesota Statutes 2010, section 92.13, is amended to read:
4.2592.13 STATE LANDS, DATE OF SALE.
4.26The commissioner shall hold public sales of
4.27school trust lands when it is advantageous to the state and to intending buyers and settlers.
4.28EFFECTIVE DATE.This section is effective July 1, 2013.
4.29 Sec. 8. Minnesota Statutes 2010, section 93.2236, is amended to read:
4.3093.2236 MINERALS MANAGEMENT ACCOUNT.
5.1(a) The minerals management account is created as an account in the natural
5.2resources fund. Interest earned on money in the account accrues to the account. Money in
5.3the account may be spent or distributed only as provided in paragraphs (b) and (c).
5.4(b) If the balance in the minerals management account exceeds $3,000,000 on June
5.530, the amount exceeding $3,000,000 must be distributed to the permanent school fund
5.6and the permanent university fund. The amount distributed to each fund must be in the
5.7same proportion as the total mineral lease revenue received in the previous biennium
5.8from school trust lands and university lands.
5.9(c) Subject to appropriation by the legislature, and approval by the director of the
5.10Permanent School Trust Lands Administration, money in the minerals management
5.11account may be spent by the commissioner of natural resources for mineral resource
5.12management and projects to enhance future mineral income and promote new mineral
5.13resource opportunities.
5.14EFFECTIVE DATE.This section is effective July 1, 2013.
5.15 Sec. 9. Minnesota Statutes 2010, section 94.342, subdivision 5, is amended to read:
5.16 Subd. 5. Additional restrictions on school trust land. School trust land may
5.17be exchanged with other Class A land only if the
5.18
5.19Lands Administration is serving as trustee of the school trust land for purposes of the
5.20exchange. The
5.21exchanges.
5.22EFFECTIVE DATE.This section is effective July 1, 2013.
5.23 Sec. 10. [128E.01] CITATION; PERMANENT SCHOOL TRUST LANDS
5.24ADMINISTRATION ACT.
5.25This chapter may be cited as the Permanent School Trust Lands Administration Act.
5.26EFFECTIVE DATE.This section is effective July 1, 2013.
5.27 Sec. 11. [128E.02] POLICY AND PURPOSE.
5.28(a) The purpose of this chapter is to establish an administration and board to manage
5.29Minnesota's school trust lands in accordance with the provisions of the Minnesota
5.30Constitution, article XI, section 8.
5.31(b) As trustee, the state must manage the lands and revenues generated from the
5.32lands in the most prudent and profitable manner possible, and not for any purpose
6.1inconsistent with the best interests of the trust beneficiaries as defined in the Minnesota
6.2Constitution, article XI, section 8.
6.3(c) The trustee must be concerned with both income for the current beneficiaries
6.4and the preservation of trust assets for future beneficiaries, which requires a balancing of
6.5short-term and long-term interests so that long-term benefits are not lost in an effort to
6.6maximize short-term gains.
6.7(d) This chapter shall be liberally construed to enable the board of trustees, the
6.8director, and the administration to faithfully fulfill the state's obligations to the trust
6.9beneficiaries.
6.10EFFECTIVE DATE.This section is effective July 1, 2013.
6.11 Sec. 12. [128E.03] DEFINITIONS.
6.12 Subdivision 1. Administration. "Administration" means the Permanent School
6.13Trust Lands Administration.
6.14 Subd. 2. Board. "Board" or "board of trustees" means the Permanent School Trust
6.15Lands Board of Trustees.
6.16 Subd. 3. Director. "Director" or "director of the Permanent School Trust Lands
6.17Administration" means the chief executive officer of the Permanent School Trust Lands
6.18Administration.
6.19 Subd. 4. School trust land. "School trust land" means land granted by the United
6.20States for use of schools within each township, swampland granted to the state, and
6.21internal improvement land that are reserved for permanent school fund purposes under the
6.22Minnesota Constitution, article XI, section 8, and land exchanged, purchased, or granted
6.23for the benefit of the permanent school fund.
6.24EFFECTIVE DATE.This section is effective July 1, 2013.
6.25 Sec. 13. [128E.04] GOVERNANCE.
6.26 Subdivision 1. Establishment. The Permanent School Trust Lands Administration
6.27is established. The Permanent School Trust Lands Administration is located within the
6.28Department of Natural Resources for administrative purposes. The commissioner of
6.29natural resources shall provide office space for the administration. The commissioner
6.30of natural resources shall provide human resources, payroll, accounting, procurement,
6.31and other similar administrative services to the administration, except to the extent the
6.32administration decides to obtain these services from another state agency that provides
6.33services to small agencies.
7.1 Subd. 2. Management. (a) The Permanent School Trust Lands Administration
7.2shall manage all school trust lands within the state. The administration is managed by
7.3a director appointed by a majority vote of the board of trustees. The board of trustees
7.4shall provide policies for the management of the administration and for the management
7.5of trust lands and assets.
7.6(b) The Board of Trustees may enter into an agreement with the commissioner of
7.7natural resources for administration and management of trust lands. This agreement
7.8must specify the services that the Department of Natural Resources will provide to the
7.9administration and the fees the department will charge for providing these services. If
7.10the administration and the commissioner of natural resources cannot reach an agreement
7.11satisfactory to both parties, the administration may contract with an outside entity for
7.12these services.
7.13(c) If, after July 1, 2013, the administration determines that receiving administrative
7.14and management services from the commissioner of natural resources is not the best way
7.15to manage lands in the most prudent and profitable manner, the board may move these
7.16services to another agency.
7.17 Subd. 3. Joint ventures. The Permanent School Trust Lands Administration, upon
7.18approval of the board of trustees, may enter into joint ventures to develop trust lands
7.19and minerals.
7.20 Subd. 4. Board of trustees membership; nomination list; qualifications; terms;
7.21replacement; chair. (a) There is established the Permanent School Trust Lands Board of
7.22Trustees.
7.23(b) The board shall consist of seven members appointed by the governor with the
7.24consent of the senate for six-year terms. Of the initial appointments to the board, the
7.25governor shall appoint one member to serve a six-year term, one member to serve a
7.26five-year term, one member to serve a four-year term, one member to serve a three-year
7.27term, one member to serve a two-year term, and one member to serve a one-year term. All
7.28subsequent appointments shall be for a term of six years, except that if a vacancy occurs,
7.29the governor shall appoint a replacement to fill the unexpired term.
7.30(c) The governor shall select six of the seven appointees to the board from a
7.31nomination list of at least two candidates for each position or vacancy submitted according
7.32to subdivision 5. The governor may request an additional nomination list of at least two
7.33candidates from the nominating committee if the initial list of candidates for a given
7.34position is unacceptable.
8.1(d) The governor may appoint one member without requiring a nomination list. This
8.2member serves a six-year term, but may be removed at the pleasure of the governor. The
8.3initial member appointed under this paragraph serves a six-year term.
8.4(e) Each board member must possess outstanding professional qualifications
8.5pertinent to the purposes and activities of the trust. Qualifications which are pertinent
8.6include: renewable and nonrenewable resource management or development, real estate,
8.7business, finance, trust administration, asset management, and the practice of law in the
8.8areas of natural resources or real estate.
8.9(f) The board of trustees shall select a chair from its membership. The governor or
8.10five board members may, for cause, remove a member of the board.
8.11(h) Compensation and reimbursement of expenses for members of the board of
8.12trustees is as provided in section 15.0575.
8.13(i) Board members are "public officials" for purposes of chapter 10A.
8.14 Subd. 5. Board of trustees nominating committee. The Board of Trustees
8.15Nominating Committee consists of 12 members. Six members must be appointed by the
8.16Subcommittee on Committees of the Committee on Rules and Administration of the
8.17senate. Six members must be appointed by the speaker of the house. A legislator may not
8.18be a member of the committee. Appointing authorities must attempt to appoint members
8.19who are knowledgeable about school trust funds issues. Geographical representation
8.20must be taken into consideration when making appointments. Membership terms,
8.21compensation, and removal of the members are governed by section 15.0575. The
8.22nominating committee is subject to the open meeting law under chapter 13D.
8.23 Subd. 6. Information to board. Board members shall be given access to all
8.24administration records and personnel consistent with law and as necessary to permit
8.25the board to accomplish its responsibilities to ensure that the administration is in full
8.26compliance with applicable policies and law.
8.27EFFECTIVE DATE.This section is effective July 1, 2013.
8.28 Sec. 14. [128E.05] POLICIES.
8.29 Subdivision 1. Management. The board shall establish policies for the management
8.30of the Permanent School Trust Lands Administration. The policies shall:
8.31(1) be consistent with the Minnesota Constitution and state law;
8.32(2) reflect undivided loyalty to the beneficiaries consistent with fiduciary duties;
8.33(3) require the return of not less than fair market value for the use, sale, or exchange
8.34of school trust assets;
9.1(4) seek to optimize trust land revenues and increase the value of trust land holdings
9.2consistent with the balancing of short-term and long-term interests, so that long-term
9.3benefits are not lost in an effort to maximize short-term gains; and
9.4(5) maintain the integrity of the trust and prevent the misapplication of its lands
9.5and its revenues.
9.6 Subd. 2. Duties. The board and the director shall recommend to the governor and
9.7the legislature any necessary or desirable changes in statutes relating to the trust or their
9.8trust responsibilities. The board shall develop policies for the long-term benefit of the trust
9.9utilizing the broad discretion and power granted to it in this chapter. The board is subject
9.10to the open meeting law under chapter 13D.
9.11 Subd. 3. Policies continued unless changed. Policies adopted by the Department
9.12of Natural Resources prior to the effective date of this act regarding school trust lands
9.13shall remain in effect until amended or repealed by the board. The administration shall be
9.14the named party in substitution of the Department of Natural Resources or its predecessor
9.15agencies with respect to all documents affecting trust lands from the effective date of
9.16this act.
9.17 Subd. 4. Accept land and property. The board may accept for and on behalf of the
9.18permanent school fund a donation of lands, interest in lands, or improvements on lands.
9.19A donation so received shall become state property, be classified as school trust land as
9.20defined in section
9.21EFFECTIVE DATE.This section is effective July 1, 2013.
9.22 Sec. 15. [128E.06] DIRECTOR.
9.23 Subdivision 1. Term. The board shall select the director on the basis of outstanding
9.24professional qualifications pertinent to the purposes and activities of the trust. The director
9.25serves in the unclassified service at the pleasure of the board.
9.26 Subd. 2. Compensation. The board shall establish the compensation of the director
9.27and annually report the director's compensation to the legislature. The compensation and
9.28performance of the director shall be examined each year as part of the board's budget
9.29review process. The director's compensation is subject to approval under section 3.855.
9.30EFFECTIVE DATE.This section is effective July 1, 2013.
9.31 Sec. 16. [128E.07] RESPONSIBILITIES OF DIRECTOR.
9.32 Subdivision 1. Duties and budget review. In carrying out the policies of the board
9.33of trustees and in establishing procedures and rules, the director shall:
10.1(1) take an oath of office before assuming any duties as the director;
10.2(2) adopt procedures necessary for the proper administration of matters entrusted to
10.3the director by state law and board policy;
10.4(3) faithfully manage the administration under the policies established by the board;
10.5(4) submit to the board and for public inspection an annual management budget
10.6and financial plan for operations of the administration and, after approval by the board,
10.7submit the budget to the governor;
10.8(5) direct and control the budget expenditures as finally authorized and appropriated;
10.9(6) establish job descriptions and employ, within the limitation of the budget, staff
10.10necessary to accomplish the purposes of the office;
10.11(7) maintain appropriate records of trust activities to enable the legislative auditor to
10.12conduct periodic audits of trust activities;
10.13(8) provide that all leases, contracts, and agreements be submitted to legal counsel
10.14for review of compliance with applicable law and fiduciary duties prior to execution and
10.15utilize the services of the attorney general as provided in section 128E.08;
10.16(9) keep the board, beneficiaries, governor, legislature, and the public informed
10.17about the work of the director and administration by reporting to the board in a public
10.18meeting at least once during each calendar quarter; and
10.19(10) respond in writing within a reasonable time to a request by the board for
10.20responses to questions on policies and practices affecting the management of the trust.
10.21 Subd. 2. Additional responsibilities. The director may:
10.22(1) contract with other public agencies for personnel management services; and
10.23(2) with the approval of the board, enter into joint ventures and other business
10.24arrangements consistent with the purposes of the trust.
10.25EFFECTIVE DATE.This section is effective July 1, 2013.
10.26 Sec. 17. [128E.08] ATTORNEY GENERAL; CAUSE OF ACTION.
10.27(a) The attorney general shall: represent the board, director, or administration in
10.28any legal action relating to trust lands; review leases, contracts, and agreements submitted
10.29for review prior to execution; and undertake suits for the collection of royalties, rental,
10.30and other damages in the name of the state.
10.31(b) The attorney general may institute actions against any party to enforce this
10.32chapter or to protect the interests of the trust beneficiaries.
10.33(c) The trust beneficiaries specified in the Minnesota Constitution, article XI, section
10.348, may bring an action against the board of trustees to ensure that the board of trustees
10.35faithfully fulfills the board's obligations to the trust beneficiaries.
11.1EFFECTIVE DATE.This section is effective July 1, 2013.
11.2 Sec. 18. [128E.09] LAND EXCHANGE.
11.3The director of the Permanent School Trust Lands Administration may enter into
11.4land exchange agreements with the commissioner of natural resources according to the
11.5provisions of section 92.121.
11.6 Sec. 19. [128E.10] FOREST AND MINERALS MANAGEMENT.
11.7 Subdivision 1. Control. All forest and minerals management on school trust lands
11.8is vested with the board of the Permanent School Trust Lands Administration according
11.9to the provisions of this chapter.
11.10 Subd. 2. May contract. The administration may contract with any public or
11.11private entity to make improvements to or upon trust lands and to carry out any of the
11.12responsibilities of the office, so long as the contract requires strict adherence to trust
11.13management principles and applicable law.
11.14EFFECTIVE DATE.This section is effective July 1, 2013.
11.15 Sec. 20. TRANSFER OF STAFF AND ASSETS AND BUDGET
11.16RESPONSIBILITY.
11.17Unless otherwise provided by statute, the responsibilities of the Department of
11.18Natural Resources and any other state agency with respect to the permanent school fund
11.19lands are transferred to the Permanent School Trust Lands Administration effective July
11.201, 2013.
11.21EFFECTIVE DATE.This section is effective July 1, 2013.
