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HF 2244

4th Engrossment - 87th Legislature (2011 - 2012) Posted on 03/20/2012 08:41am

KEY: stricken = removed, old language.
underscored = added, new language.
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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; establishing a permanent
school fund board; granting the board 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; 477A.11, subdivisions 3, 4, by adding a subdivision;
477A.12, subdivisions 2, 3; Minnesota Statutes 2011 Supplement, section
477A.12, subdivision 1; 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 Permanent School Fund deleted text beginAdvisory Committeedeleted text endnew text begin Board,new text end 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

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 13new text begin, but excludes school trust lands as defined in section 92.025new text end.

(b) The commissioner of management and budget shall credit the revenue from the
forest trust fund landsnew text begin, excluding school trust lands defined under section 92.025,new text end 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 deleted text beginstatedeleted text endnew text begin Department of Natural
Resources
new text end 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 deleted text beginstatedeleted text endnew text begin Department of Natural
Resources
new text end 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 3.

Minnesota Statutes 2010, section 84.027, subdivision 18, is amended to read:


Subd. 18.

Permanent school fund authority; reporting.

The deleted text begincommissioner of
natural resources
deleted text endnew text begin Permanent School Fund Boardnew text end has the authority and responsibility
for the administration of school trust lands under sections 92.121 and 127A.31. The
deleted text begin commissionerdeleted text endnew text begin boardnew text end shall biannually report to the new text beginLegislative new text endPermanent School Fund
deleted text begin Advisory Committeedeleted text endnew text begin Commissionnew text end and the legislature on the management of the school
trust lands that shows how the deleted text begincommissionerdeleted text endnew text begin boardnew text end 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

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.

deleted text begin(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.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 5.

Minnesota Statutes 2010, section 92.12, subdivision 1, is amended to read:


Subdivision 1.

Appraisers.

new text beginThe Permanent School Fund Board may have any
school trust land appraised.
new text endThe commissioner may have any deleted text beginschool trust ordeleted text end 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 6.

Minnesota Statutes 2010, section 92.121, is amended to read:


92.121 PERMANENT SCHOOL FUND LANDS.

Thenew text begin Permanent School Fund Board and thenew text end 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.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

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 deleted text beginschool and otherdeleted text end state lands new text beginother than
school trust lands
new text endwhen it is advantageous to the state and to intending buyers and settlers.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

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 deleted text beginthe permanent school fund
and
deleted text end the permanent university fund. deleted text beginThe 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.
deleted text end

(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.

new text begin (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.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

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 deleted text beginPermanent School Fund Advisory
Committee is appointed as temporary
deleted text endnew text begin Permanent School Fund Board is serving asnew text end trustee
of the school trust land for purposes of the exchange. The deleted text begincommitteedeleted text end new text begindirector new text endshall provide
independent legal counsel to review the exchanges.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 10.

Minnesota Statutes 2010, section 127A.30, is amended to read:


127A.30 new text beginLEGISLATIVE new text endPERMANENT SCHOOL FUND deleted text beginADVISORY
COMMITTEE
deleted text endnew text begin COMMISSIONnew text end.

Subdivision 1.

new text beginCommission established; new text endmembership.

deleted text beginA statedeleted text endnew text begin (a) The Legislativenew text end
Permanent School Fund deleted text beginAdvisory Committeedeleted text endnew text begin Commission of 12 membersnew text end is established
to advise deleted text beginthe Department of Natural Resourcesdeleted text endnew text begin the Permanent School Fund Boardnew text end on the
management of permanent school fund land, which is held in trust for the school districts
of the statenew text begin and to review legislation affecting permanent school fund landnew text end. The deleted text beginadvisory
committee must consist
deleted text endnew text begin commission consistsnew text end of the following persons deleted text beginor their designeesdeleted text end:
deleted text begin 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.
deleted text end

new text begin (1) six members of the senate, including three members from the majority party
and three members from the minority party, appointed by the senate Subcommittee on
Committees of the Committee on Rules and Administration; and
new text end

new text begin (2) six members of the house of representatives, including three majority party
members appointed by the speaker of the house and three minority party members
appointed by the minority leader.
new text end

new text begin (b) Appointed legislative members serve at the pleasure of the appointing authority
and continue to serve until their successors are appointed.
new text end

new text begin (c) The first meeting of the commission shall be convened by the chair of the
Legislative Coordinating Commission. 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.
new text end

new text begin (d) The Legislative Coordinating Commission shall provide administrative support
for the commission.
new text end

Subd. 2.

Duties.

The deleted text beginadvisory committeedeleted text end new text begincommission new text endshall review deleted text beginthe policies of
the Department of Natural Resources and
deleted text end 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 deleted text beginadvisory committeedeleted text endnew text begin commissionnew text end 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 deleted text begincommittee'sdeleted text endnew text begin commission'snew text end 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; deleted text beginand
deleted text end

(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 principlesnew text begin; and
new text end

new text begin (5) make recommendations concerning the asset allocation of the school endowment
fund
new text end.

deleted text begin Subd. 3. deleted text end

deleted text begin Duration. deleted text end

deleted text begin Notwithstanding section 15.059, subdivision 5, the advisory
committee is permanent and does not expire.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective January 2, 2013.
new text end

Sec. 11.

new text begin [127A.3011] POLICY AND PURPOSE.
new text end

new text begin (a) The purpose of sections 127A.3011 to 127A.3020 is to establish a board and 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.
new text end

new text begin (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.
new text end

new text begin (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.
new text end

new text begin (d) Sections 127A.3011 to 127A.3020 shall be liberally construed to enable the
board and the director to faithfully fulfill the state's obligations to the trust beneficiaries.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 12.

new text begin [127A.3012] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin For purposes of sections 127A.3011 to 127A.3020, the
definitions have the meanings given.
new text end

new text begin Subd. 2. new text end

new text begin Board. new text end

new text begin "Board" means the Permanent School Fund Board.
new text end

new text begin Subd. 3. new text end

new text begin Director. new text end

new text begin "Director" means the director of trust lands and mineral assets.
new text end

new text begin Subd. 4. new text end

new text begin School trust land. new text end

new text begin "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.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 13.

new text begin [127A.3013] PERMANENT SCHOOL FUND BOARD.
new text end

new text begin Subdivision 1. new text end

new text begin Membership. new text end

new text begin The Permanent School Fund Board is composed of
five members. The governor must appoint the members with the advice and consent of
both the senate and the house of representatives acting separately. If either house fails to
confirm the appointment of a board member within 45 legislative days after appointment
or by adjournment sine die, whichever occurs first, the appointment terminates on the day
following the 45th legislative day or on adjournment sine die, whichever occurs first. If
either house votes not to confirm an appointment, the appointment terminates on the day
following the vote not to confirm.
new text end

new text begin Subd. 2. new text end

new text begin Qualifications. new text end

new text begin In making appointments, the governor shall consider
geographic balance, gender, age, ethnicity, and varying interests. Members must
have practical experience or expertise or demonstrated knowledge in renewable or
nonrenewable resource management or development, real estate, business, finance, trust
administration, asset management, environmental science, or the practice of law in the
areas of natural resources or real estate. Registered lobbyists must not be members of
the board.
new text end

new text begin Subd. 3. new text end

new text begin Terms, compensation, removal. new text end

new text begin Membership terms, compensation,
removal of members and filling of vacancies are as provided in section 15.0575.
new text end

new text begin Subd. 4. new text end

new text begin Conflict of interest. new text end

new text begin (a) A board member may not be an advocate for
or against a board 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 board shall follow
the policies and requirements related to conflicts of interest developed by the Office of
Grants Management under section 16B.98.
new text end

new text begin (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 board activities, which presents the appearance of a
conflict between organizational interests and board 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.
new text end

new text begin Subd. 5. new text end

new text begin No transfers. new text end

new text begin The commissioner of administration may not use section
16B.37 to transfer duties of the board.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 14.

new text begin [127A.3014] DUTIES.
new text end

new text begin Subdivision 1. new text end

new text begin Management. new text end

new text begin (a) The board shall manage all school trust lands
within the state, and shall provide policies for the director and for the management
of trust lands and assets.
new text end

new text begin (b) The board 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 board and
the fees the department will charge for providing these services. If the board and the
commissioner of natural resources cannot reach an agreement satisfactory to both parties,
the board may contract with an outside entity for these services.
new text end

new text begin (c) If, after July 1, 2014, the board 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 board may move these
services to another agency or outside entity.
new text end

new text begin Subd. 2. new text end

new text begin Joint ventures. new text end

new text begin The board may enter into joint ventures to develop trust
lands and minerals.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 15.

new text begin [127A.3015] POLICIES.
new text end

new text begin Subdivision 1. new text end

new text begin Management. new text end

new text begin The board shall establish policies for the director of
trust lands and mineral assets. The policies shall:
new text end

new text begin (1) be consistent with the Minnesota Constitution and state law;
new text end

new text begin (2) reflect undivided loyalty to the beneficiaries consistent with fiduciary duties;
new text end

new text begin (3) require the return of not less than fair market value for the use, sale, or exchange
of school trust assets;
new text end

new text begin (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
new text end

new text begin (5) maintain the integrity of the trust and prevent the misapplication of its lands
and its revenues.
new text end

new text begin Subd. 2. new text end

new text begin Duties. new text end

new text begin The board 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 board 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.
new text end

new text begin Subd. 3. new text end

new text begin Policies continued unless changed. new text end

new text begin 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 board. The board 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 with respect to duties
transferred to the board.
new text end

new text begin Subd. 4. new text end

new text begin Accept land and property. new text end

new text begin The board 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.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 16.

new text begin [127A.3016] DIRECTOR.
new text end

new text begin Subdivision 1. new text end

new text begin Term. new text end

new text begin The board shall select a 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 board.
new text end

new text begin Subd. 2. new text end

new text begin Compensation. new text end

new text begin The board shall establish the compensation of the director.
The compensation and performance of the director shall be examined each year as part of
the board's budget review process.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2013.
new text end

Sec. 17.

new text begin [127A.3017] RESPONSIBILITIES OF DIRECTOR.
new text end

new text begin Subdivision 1. new text end

new text begin Duties and budget review. new text end

new text begin In carrying out the policies of the board
and in establishing procedures and rules, the director shall:
new text end

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

new text begin (2) adopt procedures necessary for the proper administration of matters entrusted to
the director by state law and commission policy;
new text end

new text begin (3) faithfully manage the administration under the policies established by the board;
new text end

new text begin (4) submit to the board and for public inspection an annual management budget
and financial plan for operations of the administration and, after approval by the board,
submit the budget to the governor;
new text end

new text begin (5) direct and control the budget expenditures as finally authorized and appropriated;
new text end

new text begin (6) establish job descriptions and employ, within the limitation of the budget, staff
necessary to accomplish the purposes of the director's office;
new text end

new text begin (7) maintain appropriate records of trust activities to enable the legislative auditor to
conduct periodic audits of trust activities;
new text end

new text begin (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.3018;
new text end

new text begin (9) keep the board, beneficiaries, governor, legislature, and the public informed
about the work of the director and board by reporting to the board in a public meeting at
least once during each calendar quarter; and
new text end

new text begin (10) respond in writing within a reasonable time to a request by the board for
responses to questions on policies and practices affecting the management of the trust.
new text end

new text begin Subd. 2. new text end

new text begin Additional responsibilities. new text end

new text begin (a) The director may:
new text end

new text begin (1) contract with other public agencies or other public or private entities for
personnel management services; and
new text end

new text begin (2) with the approval of the board, enter into joint ventures and other business
arrangements consistent with the purposes of the trust.
new text end

new text begin (b) The director shall obtain revenue from permits granted on school trust lands
within the Boundary Waters Canoe Area as defined in section 84.523 by obtaining a
reimbursement agreement with the federal government. Revenue generated under this
paragraph shall be deposited into the school trust lands suspense account under section
127A.3021.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 18.

new text begin [127A.3018] ATTORNEY GENERAL.
new text end

new text begin The attorney general shall: represent the board, 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.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 19.

new text begin [127A.3019] LAND EXCHANGE.
new text end

new text begin The board may enter into land exchange agreements with the commissioner of
natural resources according to the provisions of section 92.121.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 20.

new text begin [127A.3020] FOREST AND MINERALS MANAGEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Control. new text end

new text begin All forest and minerals management on school trust lands
is vested with the board according to the provisions of sections 127A.3011 to 127A.3020.
new text end

new text begin Subd. 2. new text end

new text begin May contract. new text end

new text begin The board 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.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 21.

new text begin [127A.3021] SCHOOL TRUST LANDS SUSPENSE ACCOUNT.
new text end

new text begin A school trust lands suspense account is established as an account in the special
revenue fund. 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
permanent school fund.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 22.

new text begin [127A.3022] AUDIT BY LEGISLATIVE AUDITOR.
new text end

new text begin Beginning July 1, 2019, if approved by the Legislative Audit Commission, the
legislative auditor shall conduct a financial and program audit of the Permanent School
Fund Board's performance of its duties and report to the Legislative Audit Commission
and the Legislative Permanent School Fund Commission. If the board has an agreement
with the Department of Natural Resources under section 127A.3014, the audit shall
include the services provided by the Department of Natural Resources. After the audit
conducted under this section, periodic audits and evaluations may be performed by the
legislative auditor as authorized under section 3.971, subdivisions 5 and 6.
new text end

Sec. 23.

Minnesota Statutes 2010, section 477A.11, is amended by adding a
subdivision to read:


new text begin Subd. 1a. new text end

new text begin Board. new text end

new text begin "Board" means the Permanent School Fund Board established
under section 127A.3013.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 24.

Minnesota Statutes 2010, section 477A.11, subdivision 3, is amended to read:


Subd. 3.

Acquired natural resources land.

"Acquired natural resources land"
means:

(1) any land presently administered by the commissioner new text beginor the board new text endin which the
state acquired by purchase, condemnation, or gift, a fee title interest in lands which were
previously privately owned; and

(2) lands acquired by the state under chapter 84A that are designated as state parks,
state recreation areas, scientific and natural areas, or wildlife management areas.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 25.

Minnesota Statutes 2010, section 477A.11, subdivision 4, is amended to read:


Subd. 4.

Other natural resources land.

"Other natural resources land" means any
other land presently owned in fee title by the state and administered by the commissionernew text begin
or the board
new text end, or any tax-forfeited land, other than platted lots within a city or those lands
described under subdivision 3, clause (2), which is owned by the state and administered by
the commissioner new text beginor the board new text endor by the county in which it is located.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 26.

Minnesota Statutes 2011 Supplement, section 477A.12, subdivision 1, is
amended to read:


Subdivision 1.

Types of land; payments.

(a) As an offset for expenses incurred
by counties and towns in support of natural resources lands, the following amounts are
annually appropriated to the commissioner of natural resources from the general fund for
transfer to the commissioner of revenue. The commissioner of revenue shall pay the
transferred funds to counties as required by sections 477A.11 to 477A.14. The amounts
are:

(1) for acquired natural resources land, $5.133 multiplied by the total number
of acres of acquired natural resources land or, at the county's option three-fourths of
one percent of the appraised value of all acquired natural resources land in the county,
whichever is greater;

(2) $1.283 multiplied by the number of acres of county-administered other natural
resources land;

(3) $1.283 multiplied by the total number of acres of land utilization project land; and

(4) 64.2 cents multiplied by the number of acres of deleted text begincommissioner-administereddeleted text endnew text begin
noncounty-administered
new text end other natural resources land located in each county as of July
1 of each year prior to the payment year.

(b) The amount determined under paragraph (a), clause (1), is payable for land
that is acquired from a private owner and owned by the Department of Transportation
for the purpose of replacing wetland losses caused by transportation projects, but only
if the county contains more than 500 acres of such land at the time the certification is
made under subdivision 2.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 27.

Minnesota Statutes 2010, section 477A.12, subdivision 2, is amended to read:


Subd. 2.

Procedure.

Lands for which payments in lieu are made pursuant to
section 97A.061, subdivision 3, and Laws 1973, chapter 567, shall not be eligible for
payments under this section. Each county auditor shall certify to the Department of
Natural Resources during July of each year prior to the payment year the number of acres
of county-administered other natural resources land within the county. The Department of
Natural resources may, in addition to the certification of acreage, require descriptive lists
of land so certified. The commissioner of natural resources shall determine and certify to
the commissioner of revenue by March 1 of the payment year:

(1) the number of acres and most recent appraised value of acquired natural
resources landnew text begin, excluding any administered by the boardnew text end within each county;

(2) the number of acres of commissioner-administered natural resources land within
each county;

(3) the number of acres of county-administered other natural resources land within
each county, based on the reports filed by each county auditor with the commissioner
of natural resources; and

(4) the number of acres of land utilization project land within each county.

new text begin The Permanent School Fund Board shall determine and certify to the commissioner
of revenue by March 1 of the payment year the number of acres of land and the appraised
value of the land administered by the board subject to payments under this section.
new text end

The commissioner of transportation shall determine and certify to the commissioner
of revenue by March 1 of the payment year the number of acres of land and the appraised
value of the land described in subdivision 1, paragraph (b), but only if it exceeds 500 acres.

The commissioner of revenue shall determine the distributions provided for in this
section using the number of acres and appraised values certified by the commissioner of
natural resources and the commissioner of transportation by March 1 of the payment year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 28.

Minnesota Statutes 2010, section 477A.12, subdivision 3, is amended to read:


Subd. 3.

Determination of appraised value.

For the purposes of this section, the
appraised value of acquired natural resources land is the purchase price for the first five
years after acquisition. The appraised value of acquired natural resources land received as
a donation is the value determined for the commissioner of natural resources new text beginor the board
new text endby a licensed appraiser, or the county assessor's estimated market value if no appraisal is
done. The appraised value must be determined by the county assessor every five years
after the land is acquired.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 29. new text beginTRANSFER OF ASSETS AND BUDGET RESPONSIBILITY.
new text end

new text begin 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 Permanent School Fund Board. Minnesota Statutes, section
15.039, subdivisions 1 to 6, apply to this transfer.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2014.
new text end

Sec. 30. new text beginREPORT.
new text end

new text begin The Permanent School Fund Board must meet with the commissioner of natural
resources to discuss potential agreements with the commissioner for administration and
management of trust lands, including services that the Department of Natural Resources
will provide to the board and the fees the department will charge for these services. The
board must report to the legislature by January 15, 2014, on the result of these discussions,
including any statutory changes needed to implement agreements between the board and
the commissioner.
new text end

Sec. 31. new text beginREVISOR'S INSTRUCTION.
new text end

new text begin (a) The revisor of statutes shall recode Minnesota Statutes, section 84.027,
subdivision 18, as section 127A.3014, subdivision 3.
new text end

new text begin (b) By January 15, 2013, the revisor of statutes, in consultation with the
commissioner of natural resources shall identify and report to the legislature on statutes
related to management of school trust fund lands and transfer of functions in this act.
new text end