HF 2244

2nd Unofficial Engrossment - 87th Legislature (2011 - 2012)

Posted on 04/02/2012 09:59 a.m.

1.1A bill for an act 1.2relating to the permanent school fund; changing the Permanent School Fund 1.3Advisory Committee into a legislative commission; providing for an advisor 1.4for school trust lands;amending Minnesota Statutes 2010, sections 15A.0815, 1.5subdivision 3; 16A.06, subdivision 11; 16A.125, subdivision 5; 84.027, 1.6subdivision 18; 94.342, subdivision 5; 127A.30; proposing coding for new law 1.7in Minnesota Statutes, chapter 127A. 1.8BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.9    Section 1. Minnesota Statutes 2010, section 15A.0815, subdivision 3, is amended to 1.10read: 1.11    Subd. 3. Group II salary limits. The salaries for positions in this subdivision may 1.12not exceed 85 percent of the salary of the governor: 1.13    Executive director of Gambling Control Board; 1.14    Commissioner, Iron Range Resources and Rehabilitation Board; 1.15    Commissioner, Bureau of Mediation Services; 1.16    Ombudsman for Mental Health and Developmental Disabilities; 1.17    Chair, Metropolitan Council; 1.18     new text begin School trust lands advisor; new text end 1.19    Executive director of pari-mutuel racing; and 1.20    Commissioner, Public Utilities Commission. 1.21    Sec. 2. Minnesota Statutes 2010, section 16A.06, subdivision 11, is amended to read: 1.22    Subd. 11. Permanent school fund reporting. The commissioner shall annually 1.23report to the new text begin Legislative-Citizen new text end Permanent School Fund Advisory Committee new text begin new text end 1.24 new text begin Commission, new text end and the legislature the amount of the permanent school fund transfer and 2.1information about the investment of the permanent school fund provided by the State 2.2Board of Investment. The State Board of Investment shall provide information about how 2.3they maximized the long-term economic return of the permanent school fund. 2.4    Sec. 3. Minnesota Statutes 2010, section 16A.125, subdivision 5, is amended to read: 2.5    Subd. 5. Forest trust lands. (a) The term "state forest trust fund lands" as used 2.6in this subdivision, means public land in trust under the Constitution set apart as "forest 2.7lands under the authority of the commissioner" of natural resources as defined by section 2.889.001, subdivision 13 . 2.9(b) The commissioner of management and budget shall credit the revenue from the 2.10forest trust fund lands to the forest suspense account. The account must specify the trust 2.11funds interested in the lands and the respective receipts of the lands. 2.12(c) After a fiscal year, the commissioner of management and budget shall certify the 2.13total costs incurred for forestry during that year under appropriations for the protection, 2.14improvement, administration, and management of state forest trust fund lands and 2.15construction and improvement of forest roads to enhance the forest value of the lands. The 2.16certificate must specify the trust funds interested in the lands. new text begin After presentation to the new text end 2.17 new text begin Legislative-Citizen Permanent School Fund Commission, new text end the commissioner of natural 2.18resources shall supply the commissioner of management and budget with the information 2.19needed for the certificate. new text begin The certificate shall include an analysis that compares costs new text end 2.20 new text begin certified under this section with costs incurred on other public and private lands with new text end 2.21 new text begin similar land assets. new text end 2.22(d) After a fiscal year, the commissioner shall distribute the receipts credited to the 2.23suspense account during that fiscal year as follows: 2.24(1) the amount of the certified costs incurred by the state for forest management, 2.25forest improvement, and road improvement during the fiscal year shall be transferred to 2.26the forest management investment account established under section 89.039; 2.27(2) the balance of the certified costs incurred by the state during the fiscal year 2.28shall be transferred to the general fund; and 2.29(3) the balance of the receipts shall then be returned prorated to the trust funds in 2.30proportion to their respective interests in the lands which produced the receipts. 2.31 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2013. new text end 2.32    Sec. 4. Minnesota Statutes 2010, section 84.027, subdivision 18, is amended to read: 2.33    Subd. 18. Permanent school fund authority; reporting. new text begin (a) new text end The commissioner of 2.34natural resources has the authority and responsibility for the administration of school trust 3.1lands under sections 92.121 and 127A.31. The commissioner shall biannually report to the 3.2Permanent School Fund Advisory Committee new text begin Legislative-Citizen Permanent School Fund new text end 3.3 new text begin Commission new text end and the legislature on the management of the school trust lands that shows 3.4how the commissioner has and will continue to achieve the following goals: 3.5    (1) manage the school trust lands efficiently; 3.6    (2) reduce the management expenditures of school trust lands and maximize the 3.7revenues deposited in the permanent school trust fund; 3.8    (3) manage the sale, exchange, and commercial leasing of school trust lands to 3.9maximize the revenues deposited in the permanent school trust fund and retain the value 3.10from the long-term appreciation of the school trust lands; and 3.11    (4) manage the school trust lands to maximize the long-term economic return for the 3.12permanent school trust fund while maintaining sound natural resource conservation and 3.13management principles. 3.14 new text begin (b) When the commissioner finds an irresolvable conflict between maximizing the new text end 3.15 new text begin long-term economic return and protecting natural resources and recreational values on new text end 3.16 new text begin school trust lands, the commissioner shall give precedence to the long-term economic new text end 3.17 new text begin return in managing school trust lands. By July 1, 2016, the permanent school fund shall be new text end 3.18 new text begin compensated for all school trust lands included under a designation or policy provision new text end 3.19 new text begin that prohibits long-term economic return. Any uncompensated designation or policy new text end 3.20 new text begin provision restrictions on the long-term economic return on school trust lands is removed new text end 3.21 new text begin on July 1, 2016, and the lands shall be managed for long-term economic return to the new text end 3.22 new text begin permanent school fund. new text end 3.23 new text begin (c) The first 2013 report required under paragraph (a) shall provide an inventory new text end 3.24 new text begin and identification of all school trust lands that are included under a designation or policy new text end 3.25 new text begin provision that prohibits long-term economic return. The report shall include a plan to new text end 3.26 new text begin compensate the permanent school fund through the purchase or exchange of the lands new text end 3.27 new text begin or a plan to manage the school trust land to generate long-term economic return to the new text end 3.28 new text begin permanent school fund. Subsequent reports under paragraph (a) shall include a status new text end 3.29 new text begin report of the commissioner's progress in maximizing the long-term economic return on new text end 3.30 new text begin lands identified in the first 2013 report. new text end 3.31 new text begin (d) When future designations or policies prohibit the long-term economic return on new text end 3.32 new text begin school trust land, the conflict shall be resolved by compensating the permanent school new text end 3.33 new text begin fund through an exchange or purchase of the lands before designation or application new text end 3.34 new text begin of the policy. new text end 3.35    Sec. 5. Minnesota Statutes 2010, section 94.342, subdivision 5, is amended to read: 4.1    Subd. 5. Additional restrictions on school trust land. School trust land may 4.2be exchanged with other Class A land only if the Permanent School Fund Advisory 4.3Committee new text begin Legislative-Citizen Permanent School Fund Commission new text end is appointed as 4.4temporary trustee of the school trust land for purposes of the exchange. The committee 4.5 new text begin commission new text end shall provide independent legal counsel to review the exchanges. 4.6    Sec. 6. Minnesota Statutes 2010, section 127A.30, is amended to read: 4.7127A.30 new text begin LEGISLATIVE-CITIZEN new text end PERMANENT SCHOOL FUND 4.8ADVISORY COMMITTEE new text begin COMMISSION new text end . 4.9    Subdivision 1. new text begin Commission established; new text end membership. A state new text begin (a) The new text end 4.10 new text begin Legislative-Citizen new text end Permanent School Fund Advisory Committee new text begin Commission of 16 new text end 4.11 new text begin members new text end is established to advise the Department of Natural Resources on the management 4.12of permanent school fund land, which is held in trust for the school districts of the state new text begin new text end 4.13 new text begin in the legislative branch new text end . The advisory committee must consist new text begin commission consists new text end 4.14of the following persons or their designees: the chairs of the education committees of 4.15the legislature, the chairs of the legislative committees with jurisdiction over the K-12 4.16education budget, the chairs of the legislative committees with jurisdiction over the 4.17environment and natural resources policy and budget, the chair of the senate Committee 4.18on Finance and the chair of the house of representatives Committee on Ways and Means, 4.19the commissioner of education, one superintendent from a nonmetropolitan district, one 4.20superintendent from a metropolitan area district, one person with an expertise in forestry, 4.21one person with an expertise in minerals and mining, one person with an expertise in 4.22real estate development, one person with an expertise in renewable energy, one person 4.23with an expertise in finance and land management, and one person with an expertise in 4.24natural resource conservation. The school district superintendents shall be appointed 4.25by the commissioner of education. The committee members with areas of expertise in 4.26forestry, minerals and mining, real estate development, renewable energy, finance and land 4.27management, and natural resource conservation shall be appointed by the commissioner of 4.28natural resources. Members of the legislature shall be given the opportunity to recommend 4.29candidates for vacancies on the committee to the commissioners of education and natural 4.30resources. The advisory committee must also include a nonvoting member appointed 4.31by the commissioner of natural resources. The commissioner of natural resources shall 4.32provide administrative support to the committee. The members of the committee shall 4.33serve without compensation. The members of the Permanent School Fund Advisory 4.34Committee shall elect their chair and are bound by the provisions of sections and 4.35116P.09, subdivision 6. 5.1 new text begin (1) two public members appointed by the senate Subcommittee on Committees of new text end 5.2 new text begin the Committee on Rules and Administration; new text end 5.3 new text begin (2) two public members appointed by the speaker of the house; new text end 5.4 new text begin (3) four public members appointed by the governor; new text end 5.5 new text begin (4) four members of the senate, two members appointed by the majority leader and new text end 5.6 new text begin two members appointed by the minority leader; and new text end 5.7 new text begin (5) four members of the house of representatives, two members appointed by the new text end 5.8 new text begin speaker of the house of representatives and two members appointed by the minority leader. new text end 5.9 new text begin (b) Members appointed under paragraph (a) must not be registered lobbyists. The new text end 5.10 new text begin governor's appointments to the commission are subject to the advice and consent of the new text end 5.11 new text begin senate. new text end 5.12 new text begin (c) Public members appointed under paragraph (a) shall have practical experience or new text end 5.13 new text begin expertise or demonstrated knowledge in renewable or nonrenewable resource management new text end 5.14 new text begin or development, real estate, business, finance, trust administration, asset management, or new text end 5.15 new text begin the practice of law in the areas of natural resources or real estate. new text end 5.16 new text begin (d) Public members serve four-year terms. Appointed legislative members serve new text end 5.17 new text begin at the pleasure of the appointing authority. Public and legislative members continue to new text end 5.18 new text begin serve until their successors are appointed. Public members shall be initially appointed new text end 5.19 new text begin according to the following schedule of terms: new text end 5.20 new text begin (1) two public members appointed by the governor for a term ending the first new text end 5.21 new text begin Monday in January 2015; new text end 5.22 new text begin (2) one public member appointed by the senate Subcommittee on Committees of the new text end 5.23 new text begin Committee on Rules and Administration for a term ending the first Monday in January new text end 5.24 new text begin 2015; new text end 5.25 new text begin (3) one public member appointed by the speaker of the house for a term ending new text end 5.26 new text begin the first Monday in January 2015; new text end 5.27 new text begin (4) two public members appointed by the governor for a term ending the first new text end 5.28 new text begin Monday in January 2017; new text end 5.29 new text begin (5) one public member appointed by the senate Subcommittee on Committees of the new text end 5.30 new text begin Committee on Rules and Administration for a term ending the first Monday in January new text end 5.31 new text begin 2017; and new text end 5.32 new text begin (6) one public member appointed by the speaker of the house for a term ending new text end 5.33 new text begin the first Monday in January 2017. new text end 5.34 new text begin (e) Terms, compensation, and removal of public members are as provided in section new text end 5.35 new text begin 15.0575. A vacancy on the commission may be filled by the appointing authority for the new text end 5.36 new text begin remainder of the unexpired term. new text end 6.1 new text begin (f) The first meeting of the commission shall be convened by the chair of the new text end 6.2 new text begin Legislative Coordinating Commission no later than December 4, 2013. Members shall new text end 6.3 new text begin elect a chair, vice-chair, secretary, and other officers as determined by the commission. The new text end 6.4 new text begin chair may convene meetings as necessary to conduct the duties prescribed by this section. new text end 6.5 new text begin (g) The school trust lands advisor shall provide staffing for the commission. new text end 6.6    Subd. 2. Duties. The advisory committee new text begin commission new text end shall review the policies of 6.7the Department of Natural Resources and current statutes on management of school trust 6.8fund lands at least annually and shall recommend necessary changes in statutes, policy, 6.9and implementation in order to ensure provident utilization of the permanent school fund 6.10lands. By January 15 of each year, the advisory committee new text begin commission new text end shall submit 6.11a report to the legislature with recommendations for the management of school trust 6.12lands to secure long-term economic return for the permanent school fund, consistent with 6.13sections 92.121 and 127A.31. The committee's new text begin commission's new text end annual report may include 6.14recommendations to: 6.15    (1) manage the school trust lands efficiently; 6.16    (2) reduce the management expenditures of school trust lands and maximize the 6.17revenues deposited in the permanent school trust fund; 6.18    (3) manage the sale, exchange, and commercial leasing of school trust lands to 6.19maximize the revenues deposited in the permanent school trust fund and retain the value 6.20from the long-term appreciation of the school trust lands; and 6.21    (4) manage the school trust lands to maximize the long-term economic return for 6.22the permanent school trust fund while maintaining sound natural resource conservation 6.23and management principles new text begin ; and new text end 6.24 new text begin (5) manage the asset allocation of the permanent school fund new text end . 6.25    Subd. 3. Duration. Notwithstanding section 15.059, subdivision 5, the advisory 6.26committee is permanent and does not expire. 6.27     new text begin Subd. 4. new text end new text begin Conflict of interest. new text end new text begin (a) A commission member may not be an advocate new text end 6.28 new text begin for or against a commission action or vote on any action that may be a conflict of interest. new text end 6.29 new text begin A conflict of interest must be disclosed as soon as it is discovered. The commission shall new text end 6.30 new text begin follow the policies and requirements related to conflicts of interest developed by the Office new text end 6.31 new text begin of Grants Management under section 16B.98. new text end 6.32 new text begin (b) For the purposes of this section, a "conflict of interest" exists when a person new text end 6.33 new text begin has an organizational conflict of interest or direct financial interests and those interests new text end 6.34 new text begin present the appearance that it will be difficult for the person to impartially fulfill the new text end 6.35 new text begin person's duty. An "organizational conflict of interest" exists when a person has an new text end 6.36 new text begin affiliation with an organization that is subject to commission activities, which presents new text end 7.1 new text begin the appearance of a conflict between organizational interests and commission member new text end 7.2 new text begin duties. An "organizational conflict of interest" does not exist if the person's only affiliation new text end 7.3 new text begin with an organization is being a member of the organization. new text end 7.4     new text begin Subd. 5. new text end new text begin Open meetings. new text end new text begin (a) Meetings of the commission and other groups the new text end 7.5 new text begin commission may establish are subject to section 3.055. Except where prohibited by new text end 7.6 new text begin law, the commission shall establish additional processes to broaden public involvement new text end 7.7 new text begin in all aspects of its deliberations, including recording meetings, video conferencing, new text end 7.8 new text begin and publishing minutes. For the purposes of this subdivision, a meeting occurs when a new text end 7.9 new text begin quorum is present and the members take action on any matter relating to the duties of the new text end 7.10 new text begin commission. The quorum requirement for the commission shall be seven members. new text end 7.11 new text begin (b) For legislative members of the commission, enforcement of this subdivision is new text end 7.12 new text begin governed by section 3.055, subdivision 2. For nonlegislative members of the commission, new text end 7.13 new text begin enforcement of this subdivision is governed by section 13D.06, subdivisions 1 and 2. new text end 7.14    Sec. 7. new text begin [127A.3014] POLICIES. new text end 7.15     new text begin Subdivision 1. new text end new text begin Management. new text end new text begin The Legislative-Citizen Permanent School Fund new text end 7.16 new text begin Commission shall recommend policies for the school trust lands advisor and the new text end 7.17 new text begin commissioner of natural resources. The policies shall: new text end 7.18 new text begin (1) be consistent with the Minnesota Constitution and state law; new text end 7.19 new text begin (2) reflect undivided loyalty to the beneficiaries consistent with fiduciary duties; new text end 7.20 new text begin (3) require the return of not less than fair market value for the use, sale, or exchange new text end 7.21 new text begin of school trust assets; new text end 7.22 new text begin (4) seek to optimize trust land revenues and increase the value of trust land holdings new text end 7.23 new text begin consistent with the balancing of short-term and long-term interests, so that long-term new text end 7.24 new text begin benefits are not lost in an effort to maximize short-term gains; and new text end 7.25 new text begin (5) maintain the integrity of the trust and prevent the misapplication of its lands new text end 7.26 new text begin and its revenues. new text end 7.27     new text begin Subd. 2. new text end new text begin Duties. new text end new text begin The commissioner of natural resources and the school trust lands new text end 7.28 new text begin advisor shall recommend to the governor and the legislature any necessary or desirable new text end 7.29 new text begin changes in statutes relating to the trust or their trust responsibilities. new text end 7.30    Sec. 8. new text begin [127A.3015] SCHOOL TRUST LANDS ADVISOR. new text end 7.31     new text begin Subdivision 1. new text end new text begin Appointment. new text end new text begin The school trust lands advisor shall be appointed by new text end 7.32 new text begin the governor. The commissioner of management and budget shall provide office space new text end 7.33 new text begin for the advisor. The commissioner shall provide human resources, payroll, accounting, new text end 8.1 new text begin procurement, and other similar administrative services to the advisor. The advisor's new text end 8.2 new text begin appointment is subject to the advice and consent of the senate. new text end 8.3     new text begin Subd. 2. new text end new text begin Qualifications. new text end new text begin The governor shall select the advisor on the basis of new text end 8.4 new text begin outstanding professional qualifications and knowledge of finance, business practices, new text end 8.5 new text begin minerals, forest and real estate management, and the fiduciary responsibilities of the new text end 8.6 new text begin trustee to the beneficiaries of the trust. The advisor serves in the unclassified service. new text end 8.7     new text begin Subd. 3. new text end new text begin Compensation. new text end new text begin Compensation of the advisor shall be established under new text end 8.8 new text begin chapter 15A. new text end 8.9     new text begin Subd. 4. new text end new text begin Duties. new text end new text begin The school trust lands advisor shall advise the governor, new text end 8.10 new text begin commissioners of natural resources and management and budget, and the new text end 8.11 new text begin Legislative-Citizen Permanent School Fund Commission on the management of school new text end 8.12 new text begin trust lands, including: new text end 8.13 new text begin (1) Department of Natural Resources management plans; new text end 8.14 new text begin (2) leases; new text end 8.15 new text begin (3) royalty agreements; new text end 8.16 new text begin (4) land sales and exchanges; new text end 8.17 new text begin (5) cost certifications; and new text end 8.18 new text begin (6) revenue generation opportunities. new text end 8.19     new text begin Subd. 5. new text end new text begin Cost certification. new text end new text begin The costs of the school trust lands advisor and the new text end 8.20 new text begin Legislative-Citizen Permanent School Fund Commission shall be certified under section new text end 8.21 new text begin 16A.125. new text end