1.1                          A bill for an act 
  1.2             relating to public property; providing for 
  1.3             consolidation of state and federal landholdings 
  1.4             through land exchange; establishing a state forest; 
  1.5             specifying powers and duties of state officers and 
  1.6             employees; proposing coding for new law in Minnesota 
  1.7             Statutes, chapters 1; and 89. 
  1.8   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.9      Section 1.  [1.0452] [CONSOLIDATION OF LANDHOLDINGS BY 
  1.10  STATE AND FEDERAL GOVERNMENT IN NORTHEASTERN MINNESOTA; 
  1.11  EXPEDITED LAND EXCHANGE.] 
  1.12     Subdivision 1.  [PURPOSE AND METHOD.] Intermingled 
  1.13  ownership of state and federal land within the exterior 
  1.14  boundaries of the Superior National Forest, especially that part 
  1.15  designated as the Boundary Waters Canoe Area Wilderness, defeats 
  1.16  lawful management objectives mandated for each government.  Most 
  1.17  of the nonfederal land needed for efficient management of this 
  1.18  federal wilderness area is state-owned school and other grant 
  1.19  land which was granted to the state and accepted by its citizens 
  1.20  as a source of revenue for schools.  Under the Minnesota 
  1.21  Constitution, article XI, sections 8 and 10, school and other 
  1.22  grant lands may be disposed of only at public auction or 
  1.23  exchange.  To best resolve state and federal management problems 
  1.24  arising from the state's inholdings in the Boundary Waters Canoe 
  1.25  Area Wilderness, land exchange is desired.  Pursuant to the 
  1.26  Minnesota Constitution, article XI, section 10, the legislature 
  2.1   is expressly authorized to provide for the exchange of state 
  2.2   public lands, including granted lands, tax-forfeited lands, and 
  2.3   any other state-owned lands subject to the unanimous approval of 
  2.4   the governor, the attorney general, and the state auditor.  This 
  2.5   section is an exercise of that exchange authority, and is 
  2.6   intended to provide for the expedited exchange of state school 
  2.7   grant and other lands out of the federal wilderness so that the 
  2.8   purposes of their grant, acceptance, and dedication may be 
  2.9   fulfilled.  Sections 94.342 to 94.344 are superseded by this 
  2.10  section, except where specifically referred to in this section.  
  2.11     Subd. 2.  [DUTIES OF GOVERNOR AND ATTORNEY GENERAL.] The 
  2.12  governor, with the advice and assistance of the attorney 
  2.13  general, is directed to enter into discussions with federal 
  2.14  officials for the purpose of reaching an agreement, as soon as 
  2.15  reasonably possible, for the expedited exchange of state-owned 
  2.16  land inholdings located in the Boundary Waters Canoe Area 
  2.17  Wilderness for federal land located in the Superior National 
  2.18  Forest outside of the wilderness area.  Before entering into any 
  2.19  agreement, the governor and the attorney general shall consult 
  2.20  with the legislative advisory committee.  If the legislative 
  2.21  advisory committee recommends that the agreement not be executed 
  2.22  by the governor until after legislative consideration, the 
  2.23  governor shall transmit the proposed agreement to the 
  2.24  legislature for its consideration.  If the legislature fails to 
  2.25  act on the proposed agreement within 30 legislative days after 
  2.26  receiving it, the governor may execute the agreement. 
  2.27     Subd. 3.  [GUIDELINES FOR DISCUSSIONS AND AGREEMENT.] The 
  2.28  governor, the attorney general, and other state officials and 
  2.29  employees must follow the guidelines in paragraphs (a) to (f) 
  2.30  during discussions regarding the expedited exchange and in 
  2.31  preparation of any agreement to exchange.  
  2.32     (a) As required by the Minnesota Constitution, article XI, 
  2.33  section 10, any exchange that is agreed upon must be unanimously 
  2.34  approved by the governor, the attorney general, and the state 
  2.35  auditor, at a hearing scheduled for that purpose, and must 
  2.36  reserve all mineral and water power rights in lands transferred 
  3.1   by the state.  As provided in section 94.342, subdivision 3, the 
  3.2   land received by the state from the federal government need not 
  3.3   be riparian land if the state land given in exchange is riparian 
  3.4   land, but the rights of public travel must be reserved to the 
  3.5   state under section 92.45.  
  3.6      (b) Lands received by the state in the exchange must be of 
  3.7   substantially equal value to the lands transferred in the 
  3.8   exchange by the state, as illustrated in the following exchanges 
  3.9   with the federal government:  (1) Devils Track Lake forest 
  3.10  service recreation site and campground, located in Cook county, 
  3.11  where each acre of valuable state-owned lakeshore inholdings was 
  3.12  exchanged by the state for roughly eight acres of lower value, 
  3.13  nonlakeshore, federal forest land, and (2) Nerstrand Big Woods 
  3.14  state park, located in Rice county, where each acre of federally 
  3.15  owned, high-value hardwood forest land located within the 
  3.16  proposed state park boundaries, was exchanged by the federal 
  3.17  government for roughly 20 acres of lower value, state-owned 
  3.18  forest land located within the exterior boundaries of the 
  3.19  Superior National Forest. 
  3.20     (c) Lands located within the exterior boundaries of the 
  3.21  Boundary Waters Canoe Area Wilderness are of extraordinary 
  3.22  nature, as described by the 8th United States Circuit Court of 
  3.23  Appeals in its decision in State of Minnesota by Alexander v. 
  3.24  Block, 449 F.Supp. 1223 (D. Minn. 1980), 660 F.2d 1240 (8th Cir. 
  3.25  1981), Cert. denied 431 U.S. 939 (1982), where the court noted 
  3.26  that this wilderness area was the largest wilderness area west 
  3.27  of the Rockies, the second largest in the wilderness system, the 
  3.28  only lakeland canoe wilderness, and that it includes 540,000 
  3.29  acres of virgin forest and consists of a network of more than 
  3.30  1,000 lakes linked by hundreds of miles of streams and short 
  3.31  portages that constituted the highway of the fur traders, all of 
  3.32  which combines to form a natural ecosystem. 
  3.33     (d) The roughly 100,000 acres of state-owned inholdings 
  3.34  located within this federally designated wilderness are 
  3.35  scattered in a checkerboard fashion across the entire area, 
  3.36  including sections 16 and 36 in most townships within the area.  
  4.1   The monetary value assigned by the state to each tract for the 
  4.2   purpose of the exchange must consider the following:  (1) the 
  4.3   fact that most tracts have been maintained in state ownership 
  4.4   since the date the state received title to them as school and 
  4.5   other grant lands; (2) the monetary values assigned to each 
  4.6   tract in any report commissioned by the legislature for the 
  4.7   purposes of this exchange which includes:  (i) the acreage of 
  4.8   each tract and linear feet of lakeshore or stream frontage on 
  4.9   each tract, (ii) a general description of the surface topography 
  4.10  and vegetation that includes reference to any unique surficial 
  4.11  features such as virgin or old growth forests, (iii) valuation 
  4.12  estimates that use available real estate market value 
  4.13  information and are based upon accepted real estate market 
  4.14  valuation techniques, not including valuation of minerals and 
  4.15  mineral interests.  Formal real estate appraisals for each tract 
  4.16  are not necessary for these valuation estimates.  Information 
  4.17  contained in federal value estimates of federal tracts proposed 
  4.18  for the exchange is acceptable for discussion and may be used to 
  4.19  propose an exchange agreement, without formal appraisals, if the 
  4.20  federal government supplies the state substantially the same 
  4.21  type of factual information for each federal tract that the 
  4.22  state uses in describing each state tract. 
  4.23     (e) The agreement may provide for exchange of deeds without 
  4.24  formal legal title opinions if:  (1) an authorized federal 
  4.25  officer certifies that the federal government owns the title to 
  4.26  each federal tract of land to be transferred to the state; and 
  4.27  (2) the county auditor in which a tract of federal land is 
  4.28  located certifies that county real estate tax records show that 
  4.29  ownership of any tract to be transferred to the state is in the 
  4.30  federal government.  The exchange of deeds must occur within 180 
  4.31  days after the agreement has been ratified by both the federal 
  4.32  and state governments. 
  4.33     (f) The agreement may provide transitional provisions that 
  4.34  relate to matters such as the phasing in of possession of the 
  4.35  lands and interests in lands transferred, the status of 
  4.36  employees, and similar matters. 
  5.1      Subd. 4.  [INCLUSION OF COUNTY- AND CITY-OWNED LANDS.] By 
  5.2   resolution adopted by its governing body, a county or city 
  5.3   owning lands within the Boundary Waters Canoe Area Wilderness 
  5.4   may request the governor to include those lands in discussion 
  5.5   relating to the land exchange and any land exchange agreement.  
  5.6   For the purposes of this subdivision, county-owned lands 
  5.7   includes state tax-forfeited lands held in trust for the taxing 
  5.8   districts that are under the control of a county for purposes of 
  5.9   classification, appraisal, and sale.  The resolution may include 
  5.10  a request for a hearing before the land exchange board in regard 
  5.11  to land status classifications proposed by the commissioner of 
  5.12  natural resources under section 94.343, subdivision 11, for the 
  5.13  lands to be received in exchange. 
  5.14     Subd. 5.  [DEEDS.] The governor, with the advice of the 
  5.15  attorney general, shall execute the deeds conveying the state 
  5.16  lands given in the exchange.  Deeds received from the federal 
  5.17  government shall be recorded or registered as provided in 
  5.18  section 94.343, subdivision 11.  
  5.19     Subd. 6.  [COMMISSIONER'S DUTIES.] (a) Pursuant to section 
  5.20  94.343, subdivision 11, the commissioner of natural resources 
  5.21  shall recommend land status classifications for the lands 
  5.22  received in the exchange to the land exchange board, for their 
  5.23  approval.  A county may request a hearing before the board in 
  5.24  regard to disagreement with the commissioner over classification 
  5.25  of lands received in exchange for tax-forfeited land held in 
  5.26  trust by the state but administered by the county, and any other 
  5.27  land owned by the county that was included in the exchange.  A 
  5.28  city may also request such a hearing in regard to land owned by 
  5.29  a city that was included in the exchange. 
  5.30     (b) The commissioner may recommend to the legislature those 
  5.31  adjustments to the boundaries of state forests that are 
  5.32  determined to be in the public interest.  
  5.33     (c) The commissioner shall perform such other duties in 
  5.34  regard to this exchange as the governor or the land exchange 
  5.35  board may request. 
  5.36     Sec. 2.  [89.019] [CHILDREN'S STATE FOREST.] 
  6.1      Subdivision 1.  [ESTABLISHMENT; DESCRIPTION.] Under 
  6.2   authority provided in the Minnesota Constitution, article XI, 
  6.3   section 11, permitting the establishment of state forests on 
  6.4   school and other public land, the Children's state forest is 
  6.5   hereby established on the following described areas: 
  6.6      (1) lands located outside the Boundary Waters Canoe Area 
  6.7   Wilderness, which are within the exterior boundaries of the 
  6.8   Superior National Forest and which are received from the federal 
  6.9   government by the state of Minnesota in exchange for state lands 
  6.10  located within the Boundary Waters Canoe Area Wilderness; 
  6.11     (2) other state forest lands located within the exterior 
  6.12  boundaries of the Superior National Forest that are outside of 
  6.13  the Boundary Waters Canoe Area Wilderness; 
  6.14     (3) tax-forfeited lands owned by the state that are held in 
  6.15  trust for the taxing districts that are not in a state forest on 
  6.16  the effective date of this act but which are incorporated into 
  6.17  the Children's state forest in a manner otherwise provided by 
  6.18  law; 
  6.19     (4) lands acquired by the state for this forest; and 
  6.20     (5) waters owned or acquired by the state that are located 
  6.21  within the areas described in clauses (1) to (4). 
  6.22     Lands described in clauses (1) to (4) are perpetually 
  6.23  dedicated as the Children's state forest to be managed as 
  6.24  provided in this section.  They are withheld from sale unless 
  6.25  the sale is authorized by other provisions of state law and 
  6.26  removal of the lands from the forest is approved by the 
  6.27  legislature at its next regular session.  State forest 
  6.28  management laws that are not inconsistent with the management 
  6.29  requirements of this section apply also to the Children's state 
  6.30  forest.  State forest management laws that are inconsistent with 
  6.31  the management requirements of this section are superseded to 
  6.32  the extent of such inconsistency.  The commissioner may adopt 
  6.33  rules that are determined necessary to the management and 
  6.34  administration of the Children's state forest under this section.
  6.35     Subd. 2.  [MANAGEMENT; ADMINISTRATION.] Because most of the 
  6.36  land base of the Children's state forest is composed of state 
  7.1   school and other grant lands exchanged out of the Boundary 
  7.2   Waters Canoe Area Wilderness, and because lands of this forest 
  7.3   lie across continental divides that separate waters flowing from 
  7.4   Minnesota into the Atlantic Ocean, Hudson Bay, and the Gulf of 
  7.5   Mexico drainage systems, and because lands of this forest also 
  7.6   separate the populated areas of the state from its wilderness 
  7.7   areas, the following management and administrative standards are 
  7.8   prescribed for the Children's state forest. 
  7.9      (a) Any management activity on school and other grant lands 
  7.10  must recognize the following: 
  7.11     (1) that the people of Minnesota in the Minnesota 
  7.12  Constitution, article II, section 1, accepted school grant lands 
  7.13  for the use of schools, and university grant lands for the 
  7.14  support of the University; and 
  7.15     (2) that the proceeds from the sale or use of other granted 
  7.16  lands, as well as school lands, have been dedicated by the 
  7.17  people of Minnesota in the Minnesota Constitution, article XI, 
  7.18  section 8, for schools by requiring their deposit in the 
  7.19  permanent school fund. 
  7.20     (b) The purpose of exchanging state inholdings in the 
  7.21  Boundary Waters Canoe Area Wilderness for federal lands outside 
  7.22  the area was to restore the state lands to a context where 
  7.23  revenue production for public schools is possible and, 
  7.24  therefore, that any management activity, whether it be sale of 
  7.25  timber, minerals, or other natural resource from granted land, 
  7.26  or use of granted land for any lawful purpose such as 
  7.27  recreational uses must, in the long term, produce revenue for 
  7.28  the permanent school fund or other fund to which grant land 
  7.29  revenues are dedicated.  Therefore, reasonable costs of 
  7.30  management activities must not indefinitely exceed income from 
  7.31  permitted uses of granted lands.  Reasonable costs associated 
  7.32  with management of these lands must, in the long term, be 
  7.33  recovered through income derived from leases, licenses, permits, 
  7.34  or other authorizations allowing for the uses of granted lands 
  7.35  or the sale of natural resources from granted lands. 
  7.36     (c) The location of the Children's state forest as a 
  8.1   transition zone between the state's populated and wilderness 
  8.2   areas affords unique opportunities for experimental management 
  8.3   programs that authorize natural resource uses that will not 
  8.4   result in permanent and increasing population presence on state 
  8.5   lands in the forest, thereby maintaining the natural scene over 
  8.6   the long term, even though that scene may change as natural 
  8.7   resources are used. 
  8.8      Subd. 3.  [UNIQUE NATURAL COMMUNITIES ON SCHOOL GRANT 
  8.9   LANDS; COMMISSIONER'S AUTHORITY TO PRESERVE.] If the 
  8.10  commissioner of natural resources determines that a plant or 
  8.11  animal community, or other unique natural feature that is 
  8.12  located on school or other grant land in the Children's state 
  8.13  forest should not be managed as required by this section, but 
  8.14  should be preserved or protected in a relatively undisturbed 
  8.15  condition in a state park, scientific or natural area, or other 
  8.16  similar status, the commissioner may suspend, for one year, the 
  8.17  management requirements of this section.  At the end of one year 
  8.18  the suspension expires, unless the commissioner has filed a 
  8.19  petition to condemn the interests sought to be preserved or 
  8.20  protected in an eminent domain action brought pursuant to 
  8.21  chapter 117 for the purpose of freeing the state land from land 
  8.22  grant status.  The authority to exercise the power of eminent 
  8.23  domain under chapter 117 for the purposes of this subdivision is 
  8.24  granted to the commissioner, who must actively prosecute the 
  8.25  condemnation action once the petition has been filed.  No 
  8.26  petition may be filed under this subdivision to condemn more 
  8.27  than 80 acres without prior authorization by the the 
  8.28  legislature.  In determining whether it is necessary to preserve 
  8.29  or protect unique natural communities or features under this 
  8.30  subdivision, the commissioner must consider the following: 
  8.31     (1) the fact that the 8th United States Circuit Court of 
  8.32  Appeals in the State of Minnesota by Alexander v. Block, 449 
  8.33  F.Supp. 1223 (D. Minn. 1980), 660 F.2d 1240 (8th Cir. 1981), 
  8.34  Cert. denied 431 U.S. 939 (1982), has recognized that over 
  8.35  540,000 acres of the land area of the Boundary Waters Canoe Area 
  8.36  Wilderness is virgin forest, and thus relatively undisturbed by 
  9.1   man; and 
  9.2      (2) that the 100,000 acres of state school and other grant 
  9.3   land exchanged out of that wilderness were exchanged so as to 
  9.4   permit activities that will generate revenue for the permanent 
  9.5   school fund after having been preserved in an essentially 
  9.6   nonrevenue producing context for decades. 
  9.7      Subd. 4.  [FUNDAMENTAL MANAGEMENT AUTHORITY.] This section 
  9.8   specifies the fundamental authority relating to the ownership, 
  9.9   administration, and management of the Children's state forest.  
  9.10  This section supersedes any law at variance or in conflict with 
  9.11  it.  Any law that modifies, or attempts to modify, this section 
  9.12  which is enacted after the effective date of this act must name 
  9.13  the Children's state forest.  Laws relating to the management of 
  9.14  state forests that are not at variance or in conflict with this 
  9.15  section are applicable to the Children's state forest. 
  9.16     Subd. 5.  [MANAGEMENT AGREEMENTS WITH COUNTIES.] The 
  9.17  commissioner and a county that manages county forest land 
  9.18  located within the Children's state forest may enter into 
  9.19  cooperative agreements that provide for the most efficient 
  9.20  management of each others forest lands under terms that include 
  9.21  compliance with this section. 
  9.22     Sec. 3.  [STUDIES AND RECOMMENDATIONS IF EXCHANGE AGREEMENT 
  9.23  IS NOT REACHED.] 
  9.24     If no land exchange agreement is reached under section 1 
  9.25  before January 1, 2001, the governor, with the advice of the 
  9.26  attorney general, shall submit to the legislature, before March 
  9.27  1, 2001, recommendations relating to the future use or 
  9.28  disposition of the roughly 100,000 acres of school and other 
  9.29  grant land located within the Boundary Waters Canoe Area 
  9.30  Wilderness for the purpose of fulfilling the terms of the grants 
  9.31  of these lands, and their acceptance and dedication by the 
  9.32  people of Minnesota, as a source of revenue for the permanent 
  9.33  school fund and the schools of the state.  These recommendations 
  9.34  shall include, but are not limited to, considerations relating 
  9.35  to the following alternatives: 
  9.36     (1) the prohibition of the use of state-owned property in 
 10.1   the Boundary Waters Canoe Area Wilderness except by persons who 
 10.2   have been issued a state permit, license, lease, or other state 
 10.3   authorization and who have paid a fee or charge for using the 
 10.4   state property that is based upon the current appraised value of 
 10.5   the land or other property to be used and that will yield a 
 10.6   reasonable return, after expenses, to the permanent school fund; 
 10.7      (2) a federal court inverse condemnation action to compel 
 10.8   federal acquisition of the state-owned inholdings, or portions 
 10.9   of them, at current market values; and 
 10.10     (3) public auction sale of the lands, or portions of them, 
 10.11  giving consideration to phased sales over a ten-year period. 
 10.12     The governor also shall consider and make recommendations 
 10.13  to the legislature as to the desirability of memorializing 
 10.14  Congress to unify the management of federal areas located in 
 10.15  Minnesota that border on Canada under a single federal agency to 
 10.16  simplify the structure of federal management and reduce the 
 10.17  costs that arise from organizational duplication, with the 
 10.18  savings to be added to payments to the counties in which those 
 10.19  tax exempt federal lands lie. 
 10.20     Sec. 4.  [EFFECTIVE DATE.] 
 10.21     This act is effective the day following final enactment.