HF 1669

as introduced - 92nd Legislature (2021 - 2022) Posted on 02/25/2021 03:32pm

A bill for an act
relating to natural resources; authorizing counties to manage forests on state trust
lands; amending Minnesota Statutes 2020, sections 16A.125, subdivision 5; 84.027,
subdivision 18; 127A.353, subdivision 4; proposing coding for new law in
Minnesota Statutes, chapter 92.

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

Section 1.

Minnesota Statutes 2020, 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.

(b) The commissioner of management and budget shall credit the revenue from the forest
trust fund lands 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
costs incurred for forestry during that year under appropriations for the 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. After presentation to the Legislative Permanent
School Fund Commission, the commissioner of natural resources shall supply the
commissioner of management and budget with the information needed for the certificate.
The certificate shall include an analysis that compares costs certified under this section with
costs incurred on other public and private lands with similar land assets.

(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 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) new text begin the amount of the certified costs incurred by each forest-managing county, as defined
in section 92.123, for forest management on school trust land during the fiscal year is
appropriated to each respective county's school trust land forest management fund established
under section 92.123;
new text end

new text begin (3) new text end the amount of costs incurred by the Legislative Permanent School Fund Commission
under section 127A.30, and by the school trust lands director under section 127A.353, shall
be transferred to the general fund;

deleted text begin (3) deleted text end new text begin (4) new text end the balance of the certified costs incurred by the state during the fiscal year shall
be transferred to the general fund; and

deleted text begin (4) deleted text end new text begin (5) new text end the balance of the receipts shall then be returned prorated to the trust funds in
proportion to their respective interests in the lands deleted text begin which deleted text end new text begin that new text end produced the receipts.

Sec. 2.

Minnesota Statutes 2020, section 84.027, subdivision 18, is amended to read:

Subd. 18.

Permanent school fund authority; reporting.

(a) The commissioner of
natural resources has the authority and responsibility to administer school trust lands under
sections 92.122 and 127A.31. The commissioner shall biannually report to the Legislative
Permanent School Fund Commission and the legislature on the management of the school
trust lands that shows how the commissioner has and will continue to achieve the following
goals:

(1) manage the school trust lands efficiently and in a manner that reflects the undivided
loyalty to the beneficiaries consistent with the commissioner's fiduciary duties;

(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, requiring
returns of not less than fair market value, 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;

(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;

(5) optimize school trust land revenues and maximize the value of the trust consistent
with balancing short-term and long-term interests, so that long-term benefits are not lost in
an effort to maximize short-term gains; deleted text begin and
deleted text end

(6) maintain the integrity of the trust and prevent the misapplication of its lands and its
revenues new text begin ; and
new text end

new text begin (7) work with forest-managing counties, as defined in section 92.123, to achieve the
goals described in clauses (1) to (6) new text end .

(b) When the commissioner finds an irresolvable conflict between maximizing the
long-term economic return and protecting natural resources and recreational values on
school trust lands, the commissioner shall give precedence to the long-term economic return
in managing school trust lands. By July 1, 2018, the permanent school fund must be
compensated for all school trust lands included under a designation or policy provision that
prohibits long-term economic return. The commissioner shall submit recommendations to
the appropriate legislative committees and divisions on methods of funding for the
compensation required under this paragraph, including recommendations for appropriations
from the general fund, nongeneral funds, and the state bond fund. Any uncompensated
designation or policy provision restrictions on the long-term economic return on school
trust lands remaining after July 1, 2018, must be compiled and submitted to the Legislative
Permanent School Fund Commission for review.

(c) By December 31, 2013, the report required under paragraph (a) must provide an
inventory and identification of all school trust lands that are included under a designation
or policy provision that prohibits long-term economic return. The report must include a plan
to compensate the permanent school fund through the purchase or exchange of the lands or
a plan to manage the school trust land to generate long-term economic return to the permanent
school fund. Subsequent reports under paragraph (a) must include a status report of the
commissioner's progress in maximizing the long-term economic return on lands identified
in the 2013 report.

(d) When management practices, policies, or designations by the commissioner diminish
or prohibit the long-term economic return on school trust land, the conflict must be resolved
as provided in section 92.122.

Sec. 3.

new text begin [92.123] COUNTY MANAGEMENT OF FORESTS ON SCHOOL TRUST
LANDS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms in this subdivision
have the meanings given.
new text end

new text begin (b) "Applicable law" means:
new text end

new text begin (1) Minnesota Constitution, article XI, section 8, creating and governing the permanent
school fund;
new text end

new text begin (2) section 84.027, subdivision 18, paragraph (b), establishing management priorities
for school trust lands;
new text end

new text begin (3) section 89.002, establishing state forestry policies; and
new text end

new text begin (4) section 127A.31, establishing the legislative goal of the permanent school fund.
new text end

new text begin (c) "Forest" means:
new text end

new text begin (1) new text end new text begin land that is at least ten percent stocked by trees of any size and capable of producing
timber or of exerting an influence on the climate or on the water regime;
new text end

new text begin (2) land described in clause (1) from which trees have been removed to less than ten
percent stocking and that has not been developed for other use; and
new text end

new text begin (3) new text end new text begin afforested areas.
new text end

new text begin (d) "Forest-managing county" means a county in which the county board has elected
under subdivision 2 to manage forests on school trust land within the county's jurisdiction.
new text end

new text begin Subd. 2. new text end

new text begin Election by county board. new text end

new text begin Notwithstanding section 89.031, a county board
may by resolution elect to act on behalf of the state by managing forests on school trust
land within the county. A resolution adopted under this subdivision, or the cancellation of
a resolution adopted under this subdivision, takes effect 30 days after a copy is delivered
to the commissioner.
new text end

new text begin Subd. 3. new text end

new text begin Powers. new text end

new text begin The board of a forest-managing county may:
new text end

new text begin (1) manage forests on school trust lands consistent with applicable law;
new text end

new text begin (2) conduct timber sales in the same manner and with the same limitations as timber
sales on tax-forfeited lands under section 282.04, subdivision 1, paragraphs (a) to (c), (i),
and (j);
new text end

new text begin (3) lease forest on school trust land in the same manner and with the same limitations
as leases of tax-forfeited lands under section 282.04, subdivision 1, paragraphs (d) to (f),
and (h);
new text end

new text begin (4) grant easements or permits on forest on school trust land in the same manner and
with the same limitations as those that apply to granting such easements or permits on
tax-forfeited lands under section 282.04, subdivisions 4 and 4a. Any road easement over
school trust land to a nongovernmental entity is subject to the limitation in section 84.633,
subdivision 3; and
new text end

new text begin (5) take any other action on school trust land that is delegated to the county by the
commissioner of natural resources.
new text end

new text begin Subd. 4. new text end

new text begin School trust land forest management fund. new text end

new text begin (a) The county treasurer of a
forest-managing county must place all money used to conduct the activities authorized under
this section, and received through the operation of this section, in a fund to be known as the
school trust land forest management fund. All disbursements and costs incurred by the
county under this section must be charged against that fund when allowed by the county
board.
new text end

new text begin (b) Each quarter, or as frequently as the commissioner of management and budget directs,
the county treasurer of a forest-managing county must:
new text end

new text begin (1) pay all revenue generated from activities authorized under this section to the
commissioner of management and budget for crediting to the forest suspense account under
section 16A.125; and
new text end

new text begin (2) certify to the commissioner of management and budget and the commissioner of
natural resources the costs incurred by the county under this section and charged against
the county's school trust land forest management fund according the paragraph (a).
new text end

new text begin Subd. 5. new text end

new text begin Duty to provide information. new text end

new text begin The board of a forest-managing county must
provide the commissioner of natural resources or the school trust lands director with any
information the commissioner or the director requests about the county's activities under
this section.
new text end

new text begin Subd. 6. new text end

new text begin Relation to other law. new text end

new text begin Nothing in this section authorizes the board of a
forest-managing county to:
new text end

new text begin (1) encumber, sell, or otherwise dispose of any school trust land, except as provided in
subdivision 3; or
new text end

new text begin (2) impose a management practice that will diminish the revenue generated on school
trust land without working with the commissioner of natural resources to ensure that the
permanent school fund is compensated under section 92.122.
new text end

Sec. 4.

Minnesota Statutes 2020, section 127A.353, subdivision 4, is amended to read:

Subd. 4.

Duties; powers.

(a) The school trust lands director shall:

(1) take an oath of office before assuming any duties as the director;

(2) evaluate the school trust land asset position;

(3) determine the estimated current and potential market value of school trust lands;

(4) advise the governor, Executive Council, commissioner of natural resources, deleted text begin and the deleted text end
Legislative Permanent School Fund Commission new text begin , and forest-managing counties, as defined
in section 92.123, new text end on the management of school trust lands, including:

(i) Department of Natural Resources school trust land management plans;

(ii) leases of school trust lands;

(iii) royalty agreements on school trust lands;

(iv) land sales and exchanges;

(v) cost certification; deleted text begin and
deleted text end

(vi) deleted text begin revenue generating deleted text end new text begin revenue-generating new text end options; new text begin and
new text end

new text begin (vii) forest management by forest-managing counties;
new text end

(5) propose to the Legislative Permanent School Fund Commission legislative changes
that will improve the asset allocation of the school trust lands;

(6) develop a ten-year strategic plan and a 25-year framework for management of school
trust lands, in conjunction with the commissioner of natural resources new text begin and forest-managing
counties new text end , that is updated every five years and implemented by the commissioner, with goals
to:

(i) retain core real estate assets;

(ii) increase the value of the real estate assets and the cash flow from those assets;

(iii) rebalance the portfolio in assets with high performance potential and the strategic
disposal of selected assets;

(iv) establish priorities for management actions; and

(v) balance revenue enhancement and resource stewardship;

(7) submit to the Legislative Permanent School Fund Commission for review an annual
budget and management plan for the director; and

(8) keep the beneficiaries, governor, legislature, and the public informed about the work
of the director by reporting to the Legislative Permanent School Fund Commission in a
public meeting at least once during each calendar quarter.

(b) In carrying out the duties under paragraph (a), the school trust lands director shall
have the authority to:

(1) direct and control money appropriated to the director;

(2) establish job descriptions and employ up to five employees in the unclassified service,
within the limitations of money appropriated to the director;

(3) enter into interdepartmental agreements with any other state agency;

(4) enter into joint powers agreements under chapter 471;

(5) evaluate and initiate real estate development projects on school trust lands with the
advice of the Legislative Permanent School Fund Commission in order to generate long-term
economic return to the permanent school fund;

(6) serve as temporary trustee of school trust land for school trust lands subject to
proposed or active eminent domain proceedings; and

(7) submit recommendations on strategies for school trust land leases, sales, or exchanges
to the commissioner of natural resources and the Legislative Permanent School Fund
Commission.