1.1                          A bill for an act 
  1.2             proposing an amendment to the Minnesota Constitution, 
  1.3             article XI, sections 9 and 14; authorizing 
  1.4             distributions from the permanent school fund and the 
  1.5             environment and natural resources trust fund to be up 
  1.6             to 5-1/2 percent per year. 
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  [CONSTITUTIONAL AMENDMENT.] 
  1.9      An amendment to the Minnesota Constitution is proposed to 
  1.10  the people as provided in this section.  
  1.11     If the amendment is adopted, article XI, section 8, will 
  1.12  read: 
  1.13     Sec. 8.  The permanent school fund of the state consists of 
  1.14  (a) the proceeds of lands granted by the United States for the 
  1.15  use of schools within each township, (b) the proceeds derived 
  1.16  from swamp lands granted to the state, (c) all cash and 
  1.17  investments credited to the permanent school fund and to the 
  1.18  swamp land fund, and (d) all cash and investments credited to 
  1.19  the internal improvement land fund and the lands therein.  No 
  1.20  portion of these lands shall be sold otherwise than at public 
  1.21  sale, and in the manner provided by law.  All funds arising from 
  1.22  the sale or other disposition of the lands, or income accruing 
  1.23  in any way before the sale or disposition thereof, shall be 
  1.24  credited to the permanent school fund.  Within limitations 
  1.25  prescribed by law, the fund shall be invested to secure the 
  1.26  maximum return consistent with the maintenance of the perpetuity 
  2.1   of the fund.  The principal of the permanent school fund shall 
  2.2   be perpetual and inviolate forever, except as otherwise provided 
  2.3   in this section.  This does not prevent the sale of investments 
  2.4   at less than the cost to the fund; however, all losses not 
  2.5   offset by gains shall be repaid to the fund from the interest 
  2.6   and dividends earned thereafter.  The net interest and dividends 
  2.7   arising from assets of the fund shall be distributed to the 
  2.8   different school districts of the state in a manner prescribed 
  2.9   by law.  The amount distributed each year of a biennium, 
  2.10  commencing on July 1 in each odd-numbered year and ending on and 
  2.11  including June 30 in the next odd-numbered year, may be up to 
  2.12  5-1/2 percent of the market value of the fund on June 30 one 
  2.13  year before the start of the biennium.  The amount distributed 
  2.14  must be determined by law and is not limited to the net earnings 
  2.15  of the fund. 
  2.16     A board of investment consisting of the governor, the state 
  2.17  auditor, the state treasurer, the secretary of state, and the 
  2.18  attorney general is hereby constituted for the purpose of 
  2.19  administering and directing the investment of all state funds.  
  2.20  The board shall not permit state funds to be used for the 
  2.21  underwriting or direct purchase of municipal securities from the 
  2.22  issuer or the issuer's agent. 
  2.23     and article XI, section 14, will read: 
  2.24     Sec. 14.  A permanent Minnesota environment and natural 
  2.25  resources trust fund is established in the state treasury.  The 
  2.26  principal of the environment and natural resources trust fund 
  2.27  must be perpetual and inviolate forever, except appropriations 
  2.28  may be made from up to 25 percent of the annual revenues 
  2.29  deposited in the fund until fiscal year 1997 and as otherwise 
  2.30  provided in this section.  Loans may be made of up to five 
  2.31  percent of the principal of the fund for water system 
  2.32  improvements as provided by law.  This restriction does not 
  2.33  prevent the sale of investments at less than the cost to the 
  2.34  fund, however, all losses not offset by gains shall be repaid to 
  2.35  the fund from the earnings of the fund.  The net earnings 
  2.36  from assets of the fund shall be appropriated in a manner 
  3.1   prescribed by law for the public purpose of protection, 
  3.2   conservation, preservation, and enhancement of the state's air, 
  3.3   water, land, fish, wildlife, and other natural resources.  The 
  3.4   amount appropriated each year of a biennium, commencing on July 
  3.5   1 in each odd-numbered year and ending on and including June 30 
  3.6   in the next odd-numbered year, may be up to 5-1/2 percent of the 
  3.7   market value of the fund on June 30 one year before the start of 
  3.8   the biennium.  The amount appropriated is not limited to the net 
  3.9   earnings of the fund.  Not less than 40 percent of the net 
  3.10  proceeds from any state-operated lottery must be credited to the 
  3.11  fund until the year 2001.  
  3.12     Sec. 2.  [SUBMISSION TO PEOPLE.] 
  3.13     The proposed amendment shall be submitted to the people at 
  3.14  the 1998 general election.  The question submitted shall be: 
  3.15     "Shall the Minnesota Constitution be amended to authorize 
  3.16  that the amount distributed from the permanent school fund and 
  3.17  the environment and natural resources trust fund be up to 5-1/2 
  3.18  percent per year? 
  3.19                                     Yes .......
  3.20                                     No ........"