Bill Text: MN SF1982 | 2011-2012 | 87th Legislature | Introduced

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Bill Title: Permanent school fund advisory committee change into the legislative-citizen permanent school fund commission

Sponsorship: Slight Partisan Bill (Republican 2-1)

Status: (Introduced - Dead) 2012-02-20 - Referred to Education [SF1982 Detail]

Download: Minnesota-2011-SF1982-Introduced.html

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A bill for an act

relating to the permanent school fund; changing the Permanent School Fund
Advisory Committee into a legislative commission; granting the commission
authority to employ a director to oversee, manage, and administer school
trust lands;amending Minnesota Statutes 2010, sections 16A.06, subdivision
11; 16A.125, subdivision 5; 84.027, subdivision 18; 84.085, subdivision 1;
92.12, subdivision 1; 92.121; 92.13; 93.2236; 94.342, subdivision 5; 127A.30;
proposing coding for new law in Minnesota Statutes, chapter 127A.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

    Section 1. Minnesota Statutes 2010, section 16A.06, subdivision 11, is amended to read:
    Subd. 11. Permanent school fund reporting. The commissioner shall annually
report to the Legislative-Citizen Permanent School Fund Advisory Committee
Commission, and the legislature the amount of the permanent school fund transfer and
information about the investment of the permanent school fund provided by the State
Board of Investment. The State Board of Investment shall provide information about how
they maximized the long-term economic return of the permanent school fund.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 2. Minnesota Statutes 2010, section 16A.125, subdivision 5, is amended to read:
    Subd. 5. Forest trust lands. (a) The term "state forest trust fund lands" as used
in this subdivision, means public land in trust under the Constitution set apart as "forest
lands under the authority of the commissioner" of natural resources as defined by section
89.001, subdivision 13 , but excludes school trust lands as defined in section 92.025.
(b) The commissioner of management and budget shall credit the revenue from the
forest trust fund lands, excluding school trust lands defined under section 92.025, to the
forest suspense account. The account must specify the trust funds interested in the lands
and the respective receipts of the lands.
(c) After a fiscal year, the commissioner of management and budget shall certify the
total costs incurred for forestry during that year under appropriations for the protection,
improvement, administration, and management of state forest trust fund lands and
construction and improvement of forest roads to enhance the forest value of the lands.
The certificate must specify the trust funds interested in the lands. The commissioner of
natural resources shall supply the commissioner of management and budget with the
information needed for the certificate.
(d) After a fiscal year, the commissioner shall distribute the receipts credited to the
suspense account during that fiscal year as follows:
(1) the amount of the certified costs incurred by the state Department of Natural
Resources for forest management, forest improvement, and road improvement during the
fiscal year shall be transferred to the forest management investment account established
under section 89.039;
(2) the balance of the certified costs incurred by the state Department of Natural
Resources during the fiscal year shall be transferred to the general fund; and
(3) the balance of the receipts shall then be returned prorated to the trust funds in
proportion to their respective interests in the lands which produced the receipts.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 3. Minnesota Statutes 2010, section 84.027, subdivision 18, is amended to read:
    Subd. 18. Permanent school fund authority; reporting. The commissioner
of natural resources director of trust lands and mineral assets has the authority and
responsibility for the administration of school trust lands under sections 92.121 and
127A.31 . The commissioner director shall biannually report to the Legislative-Citizen
Permanent School Fund Advisory Committee Commission and the legislature on the
management of the school trust lands that shows how the commissioner director has and
will continue to achieve the following goals:
    (1) manage the school trust lands efficiently;
    (2) reduce the management expenditures of school trust lands and maximize the
revenues deposited in the permanent school trust fund;
    (3) manage the sale, exchange, and commercial leasing of school trust lands to
maximize the revenues deposited in the permanent school trust fund and retain the value
from the long-term appreciation of the school trust lands; and
    (4) manage the school trust lands to maximize the long-term economic return for the
permanent school trust fund while maintaining sound natural resource conservation and
management principles.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 4. Minnesota Statutes 2010, section 84.085, subdivision 1, is amended to read:
    Subdivision 1. Authority. (a) The commissioner of natural resources may accept for
and on behalf of the state any gift, bequest, devise, or grants of lands or interest in lands or
personal property of any kind or of money tendered to the state for any purpose pertaining
to the activities of the department or any of its divisions. Any money so received is hereby
appropriated and dedicated for the purpose for which it is granted. Lands and interests in
lands so received may be sold or exchanged as provided in chapter 94.
(b) When the commissioner of natural resources accepts lands or interests in land,
the commissioner may reimburse the donor for costs incurred to obtain an appraisal needed
for tax reporting purposes. If the state pays the donor for a portion of the value of the
lands or interests in lands that are donated, the reimbursement for appraisal costs shall not
exceed $1,500. If the donor receives no payment from the state for the lands or interests in
lands that are donated, the reimbursement for appraisal costs shall not exceed $5,000.
(c) The commissioner of natural resources, on behalf of the state, may accept and
use grants of money or property from the United States or other grantors for conservation
purposes not inconsistent with the laws of this state. Any money or property so received
is hereby appropriated and dedicated for the purposes for which it is granted, and shall
be expended or used solely for such purposes in accordance with the federal laws and
regulations pertaining thereto, subject to applicable state laws and rules as to manner
of expenditure or use providing that the commissioner may make subgrants of any
money received to other agencies, units of local government, private individuals, private
organizations, and private nonprofit corporations. Appropriate funds and accounts shall
be maintained by the commissioner of management and budget to secure compliance
with this section.
(d) The commissioner may accept for and on behalf of the permanent school fund a
donation of lands, interest in lands, or improvements on lands. A donation so received
shall become state property, be classified as school trust land as defined in section 92.025,
and be managed consistent with section 127A.31.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 5. Minnesota Statutes 2010, section 92.12, subdivision 1, is amended to read:
    Subdivision 1. Appraisers. The director of trust lands and mineral assets may have
any school trust land appraised. The commissioner may have any school trust or other
state lands appraised. The appraisals must be made by regularly appointed and qualified
state appraisers. To be qualified, an appraiser must hold a state appraiser license issued
by the Department of Commerce. The appraisal must be in conformity with the Uniform
Standards of Professional Appraisal Practice of the Appraisal Foundation.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 6. Minnesota Statutes 2010, section 92.121, is amended to read:
92.121 PERMANENT SCHOOL FUND LANDS.
The director of trust lands and mineral assets and the commissioner of natural
resources shall exchange permanent school fund land as defined in the Minnesota
Constitution, article XI, section 8, located in state parks, state recreation areas, wildlife
management areas, scientific and natural areas, or state waysides or on lands managed
by the commissioner as old growth stands, for other lands as allowed by the Minnesota
Constitution, article XI, section 10, and section 94.343, subdivision 1, that are compatible
with the goal of the permanent school fund lands in section 127A.31 when, as a result
of management practices applied to the permanent school fund lands and associated
resources, revenue generation has been diminished or is prohibited and no alternative has
been put into effect to compensate the permanent school fund for the income losses.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 7. Minnesota Statutes 2010, section 92.13, is amended to read:
92.13 STATE LANDS, DATE OF SALE.
The commissioner shall hold public sales of school and other state lands other than
school trust lands when it is advantageous to the state and to intending buyers and settlers.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 8. Minnesota Statutes 2010, section 93.2236, is amended to read:
93.2236 MINERALS MANAGEMENT ACCOUNT.
(a) The minerals management account is created as an account in the natural
resources fund. Interest earned on money in the account accrues to the account. Money in
the account may be spent or distributed only as provided in paragraphs (b) and (c).
(b) If the balance in the minerals management account exceeds $3,000,000 on June
30, the amount exceeding $3,000,000 must be distributed to the permanent school fund
and the permanent university fund. The amount distributed to each fund must be in the
same proportion as the total mineral lease revenue received in the previous biennium
from school trust lands and university lands.
(c) Subject to appropriation by the legislature, money in the minerals management
account may be spent by the commissioner of natural resources for mineral resource
management and projects to enhance future mineral income and promote new mineral
resource opportunities.
(d) Beginning July 1, 2014, no revenue from school trust lands, including revenue
from severed minerals interests, shall be deposited in the minerals management account.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 9. Minnesota Statutes 2010, section 94.342, subdivision 5, is amended to read:
    Subd. 5. Additional restrictions on school trust land. School trust land may
be exchanged with other Class A land only if the Permanent School Fund Advisory
Committee is appointed as temporary director of trust lands and mineral assets is serving
as trustee of the school trust land for purposes of the exchange. The committee director
shall provide independent legal counsel to review the exchanges.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 10. Minnesota Statutes 2010, section 127A.30, is amended to read:
127A.30 LEGISLATIVE-CITIZEN PERMANENT SCHOOL FUND
ADVISORY COMMITTEE COMMISSION.
    Subdivision 1. Commission established; membership. A state (a) The
Legislative-Citizen Permanent School Fund Advisory Committee Commission of 14
members is established to advise the Department of Natural Resources on the management
of permanent school fund land, which is held in trust for the school districts of the state
in the legislative branch. The advisory committee must consist commission consists
of the following persons or their designees: the chairs of the education committees of
the legislature, the chairs of the legislative committees with jurisdiction over the K-12
education budget, the chairs of the legislative committees with jurisdiction over the
environment and natural resources policy and budget, the chair of the senate Committee
on Finance and the chair of the house of representatives Committee on Ways and Means,
the commissioner of education, one superintendent from a nonmetropolitan district, one
superintendent from a metropolitan area district, one person with an expertise in forestry,
one person with an expertise in minerals and mining, one person with an expertise in
real estate development, one person with an expertise in renewable energy, one person
with an expertise in finance and land management, and one person with an expertise in
natural resource conservation. The school district superintendents shall be appointed
by the commissioner of education. The committee members with areas of expertise in
forestry, minerals and mining, real estate development, renewable energy, finance and land
management, and natural resource conservation shall be appointed by the commissioner of
natural resources. Members of the legislature shall be given the opportunity to recommend
candidates for vacancies on the committee to the commissioners of education and natural
resources. The advisory committee must also include a nonvoting member appointed
by the commissioner of natural resources. The commissioner of natural resources shall
provide administrative support to the committee. The members of the committee shall
serve without compensation. The members of the Permanent School Fund Advisory
Committee shall elect their chair and are bound by the provisions of sections 43A.38 and
116P.09, subdivision 6.
(1) two public members appointed by the senate Subcommittee on Committees of
the Committee on Rules and Administration;
(2) two public members appointed by the speaker of the house;
(3) four public members appointed by the governor;
(4) three members of the senate, including one member from the minority party,
appointed by the senate Subcommittee on Committees of the Committee on Rules and
Administration; and
(5) three members of the house of representatives, including one member from the
minority party, appointed by the speaker of the house.
(b) Members appointed under paragraph (a) must not be registered lobbyists. In
making appointments, the governor, the senate Subcommittee on Committees of the
Committee on Rules and Administration, and the speaker of the house shall consider
geographic balance, gender, age, ethnicity, and varying interests. The governor's
appointments to the commission are subject to the advice and consent of the senate.
(c) Public members appointed under paragraph (a) shall have practical experience or
expertise or demonstrated knowledge in renewable or nonrenewable resource management
or development, real estate, business, finance, trust administration, asset management, or
the practice of law in the areas of natural resources or real estate.
(d) Public members serve four-year terms. Appointed legislative members serve
at the pleasure of the appointing authority. Public and legislative members continue to
serve until their successors are appointed. Public members shall be initially appointed
according to the following schedule of terms:
(1) two public members appointed by the governor for a term ending the first
Monday in January 2015;
(2) one public member appointed by the senate Subcommittee on Committees of the
Committee on Rules and Administration for a term ending the first Monday in January
2015;
(3) one public member appointed by the speaker of the house for a term ending
the first Monday in January 2015;
(4) two public members appointed by the governor for a term ending the first
Monday in January 2017;
(5) one public member appointed by the senate Subcommittee on Committees of the
Committee on Rules and Administration for a term ending the first Monday in January
2017; and
(6) one public member appointed by the speaker of the house for a term ending
the first Monday in January 2017.
(e) Terms, compensation, and removal of public members are as provided in section
15.0575. A vacancy on the commission may be filled by the appointing authority for the
remainder of the unexpired term.
(f) The first meeting of the commission shall be convened by the chair of the
Legislative Coordinating Commission no later than December 1, 2014. Members shall
elect a chair, vice-chair, secretary, and other officers as determined by the commission. The
chair may convene meetings as necessary to conduct the duties prescribed by this section.
(g) Upon coordination with the Legislative Coordinating Commission, the
commission may appoint nonpartisan staff, including a director of trust lands and
mineral assets, and contract with consultants as necessary to carry out the functions of
the commission.
    Subd. 2. Duties. The advisory committee commission shall review the policies of
the Department of Natural Resources and current statutes on management of school trust
fund lands at least annually and shall recommend necessary changes in statutes, policy,
and implementation in order to ensure provident utilization of the permanent school fund
lands. By January 15 of each year, the advisory committee commission shall submit
a report to the legislature with recommendations for the management of school trust
lands to secure long-term economic return for the permanent school fund, consistent with
sections 92.121 and 127A.31. The committee's commission's annual report may include
recommendations to:
    (1) manage the school trust lands efficiently;
    (2) reduce the management expenditures of school trust lands and maximize the
revenues deposited in the permanent school trust fund;
    (3) manage the sale, exchange, and commercial leasing of school trust lands to
maximize the revenues deposited in the permanent school trust fund and retain the value
from the long-term appreciation of the school trust lands; and
    (4) manage the school trust lands to maximize the long-term economic return for
the permanent school trust fund while maintaining sound natural resource conservation
and management principles; and
(5) make recommendations concerning the asset allocation of the school endowment
fund.
    Subd. 3. Duration. Notwithstanding section 15.059, subdivision 5, the advisory
committee is permanent and does not expire.
    Subd. 4. Conflict of interest. (a) A commission member may not be an advocate
for or against a commission action or vote on any action that may be a conflict of interest.
A conflict of interest must be disclosed as soon as it is discovered. The commission shall
follow the policies and requirements related to conflicts of interest developed by the Office
of Grants Management under section 16B.98.
(b) For the purposes of this section, a "conflict of interest" exists when a person
has an organizational conflict of interest or direct financial interests and those interests
present the appearance that it will be difficult for the person to impartially fulfill the
person's duty. An "organizational conflict of interest" exists when a person has an
affiliation with an organization that is subject to commission activities, which presents
the appearance of a conflict between organizational interests and commission member
duties. An "organizational conflict of interest" does not exist if the person's only affiliation
with an organization is being a member of the organization.
    Subd. 5. Open meetings. (a) Meetings of the commission and other groups
the commission may establish are subject to chapter 13D. Except where prohibited by
law, the commission shall establish additional processes to broaden public involvement
in all aspects of its deliberations, including recording meetings, video conferencing,
and publishing minutes. For the purposes of this subdivision, a meeting occurs when a
quorum is present and the members receive information or take action on any matter
relating to the duties of the commission. The quorum requirement for the commission
shall be seven members.
(b) Travel to and from scheduled and publicly noticed site visits by commission
members for the purposes of receiving information is not a violation of paragraph (a). Any
decision or agreement to make a decision during the travel is a violation of paragraph (a).
(c) For legislative members of the commission, enforcement of this subdivision is
governed by section 3.055, subdivision 2. For nonlegislative members of the commission,
enforcement of this subdivision is governed by section 13D.06, subdivisions 1 and 2.
    Subd. 6. Director of trust lands and mineral assets. The director of trust
lands and mineral assets must be appointed according to subdivision 1, paragraph (g).
The commissioner of administration shall provide office space for the director. The
commissioner of administration shall provide human resources, payroll, accounting,
procurement, and other similar administrative services to the director, except to the extent
the director decides to obtain these services from another public or private entity.
    Subd. 7. School trust lands suspense account. A school trust lands suspense
account is established in the state treasury. The director shall credit all revenue from
the school trust lands to the school trust lands suspense account. After a fiscal year,
the director shall certify that year's costs for oversight, protection, improvement,
administration, and management of school trust lands against the account and distribute
the balance of the revenue to the school trust fund endowment.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 11. [127A.3011] POLICY AND PURPOSE.
(a) The purpose of sections 127A.3011 to 127A.3019 is to establish a director to
oversee, manage, and administer Minnesota's school trust lands in accordance with the
provisions of the Minnesota Constitution, article XI, section 8.
(b) As trustee, the state must manage the lands and revenues generated from the
lands in the most prudent and profitable manner possible, and not for any purpose
inconsistent with the best interests of the trust beneficiaries as defined in the Minnesota
Constitution, article XI, section 8.
(c) The trustee must be concerned with both income for the current beneficiaries
and the preservation of trust assets for future beneficiaries, which requires a balancing of
short-term and long-term interests so that long-term benefits are not lost in an effort to
maximize short-term gains.
(d) Sections 127A.3011 to 127A.3019 shall be liberally construed to enable
the director and the commission to faithfully fulfill the state's obligations to the trust
beneficiaries.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 12. [127A.3012] DEFINITIONS.
    Subdivision 1. Scope. For purposes of sections 127A.3011 to 127A.3019, the
definitions have the meanings given.
    Subd. 2. Commission. "Commission" means the Legislative-Citizen Permanent
School Fund Commission.
    Subd. 3. Director. "Director" means the director of trust lands and mineral assets.
    Subd. 4. School trust land. "School trust land" means land granted by the United
States for use of schools within each township, swampland granted to the state, and
internal improvement land that are reserved for permanent school fund purposes under the
Minnesota Constitution, article XI, section 8, and land exchanged, purchased, or granted
for the benefit of the permanent school fund.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 13. [127A.3013] GOVERNANCE.
    Subdivision 1. Management. (a) The director shall manage all school trust lands
within the state. The Legislative-Citizen Permanent School Fund Commission shall
provide policies for the director and for the management of trust lands and assets.
(b) The director may enter into an agreement with the commissioner of natural
resources for administration and management of trust lands. This agreement must specify
the services that the Department of Natural Resources will provide to the director and
the fees the department will charge for providing these services. If the director and the
commissioner of natural resources cannot reach an agreement satisfactory to both parties,
the director may contract with an outside entity for these services.
(c) If, after July 1, 2014, the director determines that receiving administrative and
management services from the commissioner of natural resources is not the best way to
manage lands in the most prudent and profitable manner, the director may move these
services to another agency or outside entity.
    Subd. 2. Joint ventures. The director, upon approval of the Legislative-Citizen
Permanent School Fund Commission, may enter into joint ventures to develop trust lands
and minerals.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 14. [127A.3014] POLICIES.
    Subdivision 1. Management. The commission shall establish policies for the
director of trust lands and mineral assets. The policies shall:
(1) be consistent with the Minnesota Constitution and state law;
(2) reflect undivided loyalty to the beneficiaries consistent with fiduciary duties;
(3) require the return of not less than fair market value for the use, sale, or exchange
of school trust assets;
(4) seek to optimize trust land revenues and increase the value of trust land holdings
consistent with the balancing of short-term and long-term interests, so that long-term
benefits are not lost in an effort to maximize short-term gains; and
(5) maintain the integrity of the trust and prevent the misapplication of its lands
and its revenues.
    Subd. 2. Duties. The commission and the director shall recommend to the governor
and the legislature any necessary or desirable changes in statutes relating to the trust
or their trust responsibilities. The commission shall develop policies for the long-term
benefit of the trust utilizing the broad discretion and power granted to it in sections
127A.3011 to 127A.3015.
    Subd. 3. Policies continued unless changed. Policies adopted by the Department
of Natural Resources prior to the effective date of this act regarding school trust lands
shall remain in effect until amended or repealed by the commission. The director shall be
the named party in substitution of the Department of Natural Resources or its predecessor
agencies with respect to all documents affecting trust lands from the effective date of
this act.
    Subd. 4. Accept land and property. The commission may accept for and on behalf
of the permanent school fund a donation of lands, interest in lands, or improvements on
lands. A donation so received shall become state property, be classified as school trust
land as defined in section 92.025, and be managed consistent with section 127A.31.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 15. [127A.3015] DIRECTOR.
    Subdivision 1. Term. The commission shall select the director on the basis of
outstanding professional qualifications pertinent to the purposes and activities of the trust.
The director serves in the unclassified service at the pleasure of the commission.
    Subd. 2. Compensation. The commission shall establish the compensation of
the director and annually report the director's compensation to the legislature. The
compensation and performance of the director shall be examined each year as part of the
commission's budget review process. The director's compensation is subject to approval
under section 3.855.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 16. [127A.3016] RESPONSIBILITIES OF DIRECTOR.
    Subdivision 1. Duties and budget review. In carrying out the policies of the
commission and in establishing procedures and rules, the director shall:
(1) take an oath of office before assuming any duties as the director;
(2) adopt procedures necessary for the proper administration of matters entrusted to
the director by state law and commission policy;
(3) faithfully manage the administration under the policies established by the
commission;
(4) submit to the commission and for public inspection an annual management
budget and financial plan for operations of the administration and, after approval by the
commission, submit the budget to the governor;
(5) direct and control the budget expenditures as finally authorized and appropriated;
(6) establish job descriptions and employ, within the limitation of the budget, staff
necessary to accomplish the purposes of the director's office;
(7) maintain appropriate records of trust activities to enable the legislative auditor to
conduct periodic audits of trust activities;
(8) provide that all leases, contracts, and agreements be submitted to legal counsel
for review of compliance with applicable law and fiduciary duties prior to execution and
utilize the services of the attorney general as provided in section 127A.3017;
(9) keep the commission, beneficiaries, governor, legislature, and the public
informed about the work of the director and commission by reporting to the commission
in a public meeting at least once during each calendar quarter; and
(10) respond in writing within a reasonable time to a request by the commission for
responses to questions on policies and practices affecting the management of the trust.
    Subd. 2. Additional responsibilities. The director may:
(1) contract with other public agencies or other public or private entities for
personnel management services; and
(2) with the approval of the commission, enter into joint ventures and other business
arrangements consistent with the purposes of the trust.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 17. [127A.3017] ATTORNEY GENERAL.
The attorney general shall: represent the commission, director, or administration in
any legal action relating to trust lands; review leases, contracts, and agreements submitted
for review prior to execution; and undertake suits for the collection of royalties, rental,
and other damages in the name of the state.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 18. [127A.3018] LAND EXCHANGE.
The director may enter into land exchange agreements with the commissioner of
natural resources according to the provisions of section 92.121.

    Sec. 19. [127A.3019] FOREST AND MINERALS MANAGEMENT.
    Subdivision 1. Control. All forest and minerals management on school trust lands is
vested with the director according to the provisions of sections 127A.3011 to 127A.3019.
    Subd. 2. May contract. The director may contract with any public or private entity
to make improvements to or upon trust lands and to carry out any of the responsibilities of
the office, so long as the contract requires strict adherence to trust management principles
and applicable law.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 20. TRANSFER OF ASSETS AND BUDGET RESPONSIBILITY.
Unless otherwise provided by statute, the responsibilities of the Department of
Natural Resources and any other state agency with respect to the permanent school fund
lands are transferred to the director of trust lands and mineral assets effective upon
establishment of the director under Minnesota Statutes, section 127A.3015.
EFFECTIVE DATE.This section is effective July 1, 2014.

    Sec. 21. REVISOR'S INSTRUCTION.
The revisor of statutes shall recode Minnesota Statutes, section 84.027, subdivision
18, as section 127.3016, subdivision 3.