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Minnesota Legislature

Office of the Revisor of Statutes

HF 2936

as introduced - 90th Legislature (2017 - 2018) Posted on 03/08/2018 04:46pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 03/08/2018

Current Version - as introduced

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A bill for an act
relating to education policy; transferring administration of school trust lands;
establishing the school trust management account; authorizing rulemaking; requiring
a report; amending Minnesota Statutes 2016, sections 16A.125, subdivision 5;
84.027, subdivision 18; 84.085, subdivision 1; 89.001, subdivisions 6, 13; 92.01;
92.02; 92.12, subdivision 1; 92.121; 92.13; 93.0015, subdivisions 1, 2; 93.05,
subdivision 3; 93.055; 93.22; 93.2236; 94.16, subdivision 3; 127A.30, subdivision
1; 127A.351; 127A.352; 127A.353, subdivision 4; proposing coding for new law
in Minnesota Statutes, chapter 127A; repealing Minnesota Statutes 2016, section
92.83.

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

Section 1.

Minnesota Statutes 2016, section 16A.125, subdivision 5, is amended to read:


Subd. 5.

Forest trust lands.

(a) deleted text beginThe termdeleted text end "State forest trust fund lands" as used in this
subdivisiondeleted text begin,deleted text end means public land in trust under the new text beginMinnesota new text endConstitution 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 deleted text beginshalldeleted text endnew text begin mustnew text end credit the revenue from
the new text beginstate new text endforest trust fund lands to the forest suspense account. The account must specify
the trust funds interested in the lands and the respective receipts of the lands.

(c) After a fiscal year, the commissioner of management and budget deleted text beginshalldeleted text endnew text begin mustnew text end certify
the costs incurred for forestry during that year under appropriations for the improvement,
administration, and management of state forest trust fund lands and construction and
improvement of forest roads to enhance the forest value of the lands. The certificate must
specify the trust funds interested in the lands. deleted text beginAfter presentation to the Legislative Permanent
School Fund Commission,
deleted text end The commissioner of natural resources deleted text beginshalldeleted text endnew text begin mustnew text end supply the
commissioner of management and budget with the information needed for the certificate.
The certificate deleted text beginshalldeleted text endnew text begin mustnew text end include an analysis that compares costs certified under this section
with costs incurred on other public and private lands with similar land assets.

(d) After a fiscal year, the commissioner deleted text beginshalldeleted text endnew text begin mustnew text end distribute the receipts credited to
the suspense account during that fiscal year as follows:

(1) the amount of the certified costs incurred by the state for forest management, forest
improvement, and road improvement during the fiscal year deleted text beginshalldeleted text endnew text begin mustnew text end be transferred to the
forest management investment account established under section 89.039;

deleted text begin (2) the amount of costs incurred by the Legislative Permanent School Fund Commission
under section 127A.30, and by the school trust lands director under section 127A.353, shall
be transferred to the general fund;
deleted text end

deleted text begin (3)deleted text endnew text begin (2)new text end the balance of the certified costs incurred by the state during the fiscal year deleted text beginshalldeleted text endnew text begin
must
new text end be transferred to the general fund; and

deleted text begin (4)deleted text endnew text begin (3)new text end the balance of the receipts deleted text beginshalldeleted text endnew text begin mustnew text end then be returned prorated to the trust funds
in proportion to their respective interests in the lands deleted text beginwhichdeleted text endnew text begin thatnew text end produced the receipts.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 2.

Minnesota Statutes 2016, section 84.027, subdivision 18, is amended to read:


Subd. 18.

deleted text beginPermanent school fund authority; reportingdeleted text endnew text begin School trust landsnew text end.

deleted text begin (a) The
commissioner of natural resources has the authority and responsibility for the administration
of school trust lands under sections 92.121 and 127A.31. The commissioner shall biannually
report to the Legislative Permanent School Fund Commission and the legislature on the
management of the school trust lands that shows how the commissioner has and will continue
to achieve the following goals:
deleted text end

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

deleted text begin (2) reduce the management expenditures of school trust lands and maximize the revenues
deposited in the permanent school trust fund;
deleted text end

deleted text begin (3) manage the sale, exchange, and commercial leasing of school trust lands, requiring
returns of not less than fair market value, to maximize the revenues deposited in the
permanent school trust fund and retain the value from the long-term appreciation of the
school trust lands;
deleted text end

deleted text begin (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;
deleted text end

deleted text begin (5) optimize school trust land revenues and maximize the value of the trust 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
deleted text end

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

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

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

deleted text begin (d)deleted text endnew text begin (b)new text end When future designations or policies by the commissioner prohibit the long-term
economic return on school trust land, the conflict deleted text beginshalldeleted text endnew text begin mustnew text end be resolved by compensating
the permanent school fund through an exchange or purchase of the lands before designation
or application of the policy.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 3.

Minnesota Statutes 2016, 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 deleted text beginherebydeleted text end
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. The deed conveying
land or an interest in land to the state under this paragraph must clearly indicate whether
the state may resell the donated land or interest in land.

(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 deleted text beginshalldeleted text endnew text begin mustnew text end 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 deleted text beginshalldeleted text endnew text begin mustnew text end 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
deleted text begin herebydeleted text end appropriated and dedicated for the purposes for which it is granteddeleted text begin,deleted text end and deleted text beginshalldeleted text end new text beginmust
new text end 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 deleted text beginshalldeleted text endnew text begin
must
new text end 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. When the commissioner proposes to accept
a donation of land or an interest in land, the commissioner must notify the landowner of the
option to express in the deed whether the state may resell the land.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 4.

Minnesota Statutes 2016, section 89.001, subdivision 6, is amended to read:


Subd. 6.

State forest lands.

"State forest lands" means all land and waters owned by
the state within state forestsdeleted text begin, including all lands set apart under the Constitution of the state
of Minnesota, article XI, section 11, and laws enacted pursuant thereto
deleted text end, but exceptingnew text begin school
trust lands as defined in section 92.025,
new text end lands acquired by the state for other specific purposes
deleted text begin ordeleted text endnew text begin, andnew text end tax-forfeited lands held in trust for the taxing districts unless incorporated into state
forests as otherwise provided by law.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 5.

Minnesota Statutes 2016, section 89.001, subdivision 13, is amended to read:


Subd. 13.

Forest lands under the authority of the commissioner.

"Forest lands under
the authority of the commissioner" means state forest lands and other forest lands managed
by the commissioner outside of state forests, except for new text beginschool trust lands as defined in
section 92.025,
new text endtax-forfeited lands held in trust for the taxing districtsnew text begin,new text end and deleted text beginfordeleted text end the following
units of the outdoor recreation system as defined in section 86A.04: state parks, state trails,
state wildlife management areas, state scientific and natural areas, state water-access sites,
state historic sites, state rest areas, and state wilderness areas.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 6.

Minnesota Statutes 2016, section 92.01, is amended to read:


92.01 STATE PUBLIC LANDS OR STATE LANDS.

"State public lands" or "state lands" means deleted text beginschool, swamp, university, internal
improvement, and other lands granted to the state by acts of Congress
deleted text endnew text begin state-owned lands
acquired by purchase, gift, bequest, or eminent domain, but does not include school trust
lands as defined under section 92.025
new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 7.

Minnesota Statutes 2016, section 92.02, is amended to read:


92.02 AUTHORITY.

Salesnew text begin of state landsnew text end under this chapter must be conducted by the commissioner, a deputy
of the commissioner, or a competent person employed by the commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 8.

Minnesota Statutes 2016, section 92.12, subdivision 1, is amended to read:


Subdivision 1.

Appraisers.

The commissioner may have any deleted text beginschool trust or otherdeleted text end 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, 2019.
new text end

Sec. 9.

Minnesota Statutes 2016, section 92.121, is amended to read:


92.121 PERMANENT SCHOOL FUND LANDS.

The commissioner of natural resources deleted text beginshalldeleted text endnew text begin and the school trust lands director mustnew text end
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 deleted text beginby the commissionerdeleted text end 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 deleted text beginsectiondeleted text endnew text begin sectionsnew text end 127A.31 new text beginand 127A.353, subdivision 4, paragraph (a), clause
6,
new text endwhen, 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, 2019.
new text end

Sec. 10.

Minnesota Statutes 2016, section 92.13, is amended to read:


92.13 new text beginPUBLIC SALE OF new text endSTATE LANDSdeleted text begin, DATE OF SALEdeleted text end.

The commissioner deleted text beginshalldeleted text endnew text begin mustnew text end hold public sales of deleted text beginschool and otherdeleted text end state lands when 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, 2019.
new text end

Sec. 11.

Minnesota Statutes 2016, section 93.0015, subdivision 1, is amended to read:


Subdivision 1.

Establishment; membership.

The Mineral Coordinating Committee is
established to plan for diversified mineral development. The Mineral Coordinating Committee
consists of:

(1) the commissioner of natural resources;

(2) the commissioner of the Minnesota Pollution Control Agency;

(3) the commissioner of Iron Range resources and rehabilitation;

(4) the director of the Minnesota Geological Survey;

(5) the dean of the University of Minnesota Institute of Technology;

(6) the director of the Natural Resources Research Institute; deleted text beginand
deleted text end

new text begin (7) the school trust lands director; and
new text end

deleted text begin (7)deleted text endnew text begin (8)new text end four individuals appointed by the governor for a four-year term, one each
representing the iron ore and taconite, nonferrous metallic minerals, and industrial minerals
industries deleted text beginwithindeleted text endnew text begin innew text end the state and one representing labor.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 12.

Minnesota Statutes 2016, section 93.0015, subdivision 2, is amended to read:


Subd. 2.

Staffing.

The commissioner of deleted text beginnatural resources shall servedeleted text endnew text begin Iron Range resources
and rehabilitation serves
new text end as chair of the committee. A member of the committee may
designate another person of the member's organization to act in the member's place. The
commissioner deleted text beginshalldeleted text endnew text begin of Iron Range resources and rehabilitation mustnew text end provide staff and
administrative services necessary for the committee's activities.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 13.

Minnesota Statutes 2016, section 93.05, subdivision 3, is amended to read:


Subd. 3.

Attorney general to institute condemnation.

(a) Upon written request of the
holder of any mineral lease from the state, not in default, with the approval of the
commissioner of natural resourcesnew text begin or, for school trust lands, the school trust lands directornew text end,
the attorney general deleted text beginshalldeleted text endnew text begin mustnew text end institute, in the name of the state, proceedings to acquire by
condemnation any lands, rights-of-way, drainage or flowage rights, easements or other
interests necessary in connection with prospecting for or mining the ore covered by the
lease. All costs and expenses of the proceedings and all damages awarded therein deleted text beginshalldeleted text endnew text begin mustnew text end
be paid by the holder of the lease.

(b) In any eminent domain proceedings under this section, any value deleted text beginwhichdeleted text endnew text begin thatnew text end the land
taken may have by reason of its location or availability for the depositing of stripping,
tailings or other wastes from general mining operations in its vicinity, or for the erection of
buildings or structures thereon in connection with such operations, deleted text beginshalldeleted text endnew text begin mustnew text end be considered
in determining the damages to be awarded the owner of the land.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 14.

Minnesota Statutes 2016, section 93.055, is amended to read:


93.055 ACTION TO QUIET TITLE TO LANDS COVERED BY MINERAL
LEASE.

Upon written request of the holder of any mineral lease from the state, not in default,
with the approval of the commissioner of natural resourcesnew text begin or, for school trust lands, the
school trust lands director
new text end, the attorney general may institute proceedings to quiet the title
and determine adverse claims or to register the title of the state to the lands or interests
covered by the lease. All costs and expenses of the proceedings including compensation of
attorneys for the state deleted text beginshalldeleted text endnew text begin mustnew text end be paid by the holder of the lease.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 15.

Minnesota Statutes 2016, section 93.22, is amended to read:


93.22 DISPOSITION OF PAYMENTS.

Subdivision 1.

Generally.

(a) All payments under sections 93.14 to 93.285 deleted text beginshalldeleted text end new text beginfor
state lands as defined under section 92.01 must
new text endbe made to the Department of Natural
Resources and deleted text beginshalldeleted text endnew text begin mustnew text end be credited according to deleted text beginthis sectiondeleted text endnew text begin paragraphs (b) and (c)new text end.

(b) Twenty percent of all payments under sections 93.14 to 93.285 deleted text beginshalldeleted text end new text beginmust new text endbe credited
to the minerals management account in the natural resources fund as costs for the
administration and management of state mineral resources by the commissioner of natural
resources.

(c) The remainder of the payments deleted text beginshalldeleted text end new text beginmust new text endbe credited as follows:

(1) if the lands or minerals and mineral rights covered by a lease are held by the state
by virtue of an act of Congress, payments made under the lease deleted text beginshalldeleted text endnew text begin mustnew text end be credited to
the permanent fund of the class of land to which the leased premises belong;

(2) if a lease covers the bed of navigable waters, payments made under the lease deleted text beginshalldeleted text end
new text begin must new text endbe credited to the permanent school fund of the state;

(3) if the lands or minerals and mineral rights covered by a lease are held by the state
in trust for the taxing districts, payments made under the lease deleted text beginshalldeleted text endnew text begin mustnew text end be distributed
annually on the first day of September to the respective counties in which the lands lie, to
be apportioned among the taxing districts interested therein as follows: county, three-ninths;
town or city, two-ninths; and school district, four-ninths;

(4) if the lands or mineral rights covered by a lease became the absolute property of the
state under deleted text beginthe provisions ofdeleted text end chapter 84A, payments made under the lease deleted text beginshalldeleted text end new text beginmust new text endbe
distributed as follows: county containing the land from which the income was derived,
five-eighths; and general fund of the state, three-eighths; and

(5) except as provided under this section and except where the disposition of payments
may be otherwise directed by law, payments made under a lease deleted text beginshalldeleted text endnew text begin mustnew text end be paid into the
general fund of the state.

new text begin (d) All payments under sections 93.14 to 93.285 for school trust lands as defined under
section 92.025 must be made to the school trust lands director and credited to the school
trust management account in the special revenue fund.
new text end

Sec. 16.

Minnesota Statutes 2016, 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 deleted text begin$3,000,000deleted text endnew text begin $1,500,000new text end
on March 31, June 30, September 30, or December 31, the amount exceeding deleted text begin$3,000,000deleted text endnew text begin
$1,500,000
new text end must be distributed to deleted text beginthe permanent school fund,deleted text end the permanent university
funddeleted text begin,deleted text end and taxing districts as provided in section 93.22, subdivision 1, paragraph (c). The
amount distributed to each fund must be in the same proportion as the total mineral lease
revenue received in the previous biennium from deleted text beginschool trust lands,deleted text end university landsdeleted text begin,deleted text end and
lands held by the state in trust for taxing districts.

(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 EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2018.
new text end

Sec. 17.

Minnesota Statutes 2016, section 94.16, subdivision 3, is amended to read:


Subd. 3.

Proceeds from natural resources land.

(a) Except as provided in paragraphs
(b) and (c), the remainder of the proceeds from the sale of lands classified as a unit of the
outdoor recreation system under section 86A.05 that were under the control and supervision
of the commissioner of natural resources deleted text beginshalldeleted text endnew text begin mustnew text end be credited to the land acquisition
account in the natural resources fund.

(b) The remainder of the proceeds from the sale of administrative sites under the control
and supervision of the commissioner of natural resources deleted text beginshalldeleted text endnew text begin mustnew text end be credited to the
facilities management account established under section 84.0857 and used to acquire facilities
or renovate existing buildings for administrative use or to acquire land for, design, and
construct administrative buildings for the Department of Natural Resources.

(c) The remainder of the proceeds from the sale of land not within a unit of the outdoor
recreation system under section 86A.05 and not an administrative site, but under the control
and supervision of the commissioner of natural resources, deleted text beginshalldeleted text endnew text begin mustnew text end be credited to the
school trust deleted text beginlandsdeleted text endnew text begin managementnew text end account established under section deleted text begin92.83deleted text endnew text begin 127A.354new text end.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 18.

Minnesota Statutes 2016, section 127A.30, subdivision 1, is amended to read:


Subdivision 1.

Commission established; membership.

(a) The Legislative Permanent
School Fund Commission of 12 members is established to advise deleted text beginthe Department of Natural
Resources and
deleted text end the school trust lands director on the management of permanent school fund
land, which is held in trust for the school districts of the state and to review legislation
affecting permanent school fund land. The commission consists of the following persons:

(1) six members of the senate, including three majority party members appointed by the
majority leader and three minority party members appointed by the minority leader; and

(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.

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

(c) deleted text beginThe first meeting of the commission shall be convened by the chair of the Legislative
Coordinating Commission.
deleted text end Members deleted text beginshalldeleted text endnew text begin mustnew text end elect a chair, vice-chair, secretary, and
other officers as determined by the commission. The chair deleted text beginmaydeleted text endnew text begin or vice-chair mustnew text end convene
deleted text begin meetings as necessarydeleted text end new text begina meeting at least quarterly new text endto conduct the duties prescribed by this
section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2018.
new text end

Sec. 19.

Minnesota Statutes 2016, section 127A.351, is amended to read:


127A.351 POLICY AND PURPOSE.

(a) The purpose of sections 127A.351 to 127A.353 is to establish a school trust lands
director position to recommend new text beginand implement new text endmanagement policies for Minnesota's school
trust lands deleted text beginin accordance with the provisions ofdeleted text endnew text begin according tonew text end the Minnesota Constitution,
article XI, section 8.

(b) As trustee, the state must manage the lands and revenues generated from the lands
consistent with the best interests of the trust beneficiaries as defined in the Minnesota
Constitution, article XI, section 8. When it is in the best interest of the school trust lands,
ecological benefits deleted text beginshalldeleted text endnew text begin mustnew text end be taken into consideration.

(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.

(d) Sections 127A.351 to 127A.353 deleted text beginshalldeleted text endnew text begin mustnew text end be liberally construed to enable the school
trust lands director deleted text beginand the commissioner of natural resourcesdeleted text end to faithfully fulfill the state's
obligations to the trust beneficiaries.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 20.

Minnesota Statutes 2016, section 127A.352, is amended to read:


127A.352 POLICY RECOMMENDATIONS; DUTIES.

Subdivision 1.

Recommendations.

The Legislative Permanent School Fund Commission
deleted text begin shalldeleted text endnew text begin mustnew text end recommend policies for the school trust lands director deleted text beginand the commissioner of
natural resources
deleted text end that are consistent with the Minnesota Constitutiondeleted text begin,deleted text endnew text begin andnew text end state lawdeleted text begin, and the
goals established under section 84.027, subdivision 18
deleted text end.

Subd. 2.

Duties.

The deleted text begincommissioner of natural resources and thedeleted text end school trust lands director
deleted text begin shalldeleted text endnew text begin mustnew text end recommend to the governor and the Legislative Permanent School Fund
Commission any necessary or desirable changes in statutes relating to the trust or deleted text begintheirdeleted text endnew text begin the
director's
new text end trust responsibilities consistent with the policies under section 127A.351.

deleted text begin Subd. 3. deleted text end

deleted text begin Notice to commission and governor. deleted text end

deleted text begin If the school trust lands director has an
irreconcilable disagreement with the commissioner of natural resources pertaining to the
fiduciary responsibilities consistent with the school trust lands, it is the duty of the director
to report the subject of the disagreement to the Legislative Permanent School Fund
Commission and the governor.
deleted text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

Sec. 21.

Minnesota Statutes 2016, section 127A.353, subdivision 4, is amended to read:


Subd. 4.

Duties; powers.

(a) The school trust lands director deleted text beginshalldeleted text endnew text begin mustnew text end:

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

(2) evaluate the school trust land asset position;

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

(4) advise the governor, Executive Council, deleted text begincommissioner of natural resources,deleted text end and deleted text beginthedeleted text end
Legislative Permanent School Fund Commission on the management of school trust landsdeleted text begin,
including:
deleted text endnew text begin;
new text end

deleted text begin (i) Department of Natural Resources school trust land management plans;
deleted text end

deleted text begin (ii) leases of school trust lands;
deleted text end

deleted text begin (iii) royalty agreements on school trust lands;
deleted text end

deleted text begin (iv) land sales and exchanges;
deleted text end

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

deleted text begin (vi) revenue generating options;
deleted text end

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

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

(i) retain core real estate assets;

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

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

(iv) establish priorities for management actions; and

(v) balance revenue enhancement and resource stewardship;

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

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

(b) In carrying out the duties under paragraph (a), the school trust lands director deleted text beginshall
have the authority to
deleted text endnew text begin maynew text end:

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

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

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

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

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

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

(7) submit recommendations on strategies for school trust land leases, sales, or exchanges
to the deleted text begincommissioner of natural resources and thedeleted text end Legislative Permanent School Fund
Commissiondeleted text begin.deleted text endnew text begin;
new text end

new text begin (8) offer school trust lands at public auction when the director, in consultation with the
Legislative Permanent School Fund Commission, determines it is advantageous for the
school trust to divest of its real property assets;
new text end

new text begin (9) direct and control real estate transactions involving school trust lands, including land
sales, leasing, licensing, and permitting;
new text end

new text begin (10) accept for and on behalf of the permanent school fund a donation of money, gifts,
lands, interest in lands, or improvements on lands. A donation so received becomes state
property, is classified as school trust land as defined in section 92.025, and must be managed
consistent with section 127A.31. When the director proposes to accept a donation of land
or an interest in land, the director must notify the landowner of the option to express in the
deed whether the state may resell the land;
new text end

new text begin (11) have any school trust land or mineral asset appraised. Appraisers and real property
appraisals must meet the requirements under section 92.12, subdivision 1. The director must
coordinate any appraisal of school trust mineral assets, including severed mineral assets,
with the Legislative Permanent School Fund Commission and Minerals Coordinating
Commission; and
new text end

new text begin (12) adopt rules to ensure that school trust lands and mineral assets are efficiently and
economically managed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019, except that paragraph (b),
clause (8), is effective July 1, 2018.
new text end

Sec. 22.

new text begin [127A.354] SCHOOL TRUST MANAGEMENT ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Account established; sources. new text end

new text begin The school trust management account is
created in the special revenue fund in the state treasury, and money in the account may be
spent only for the purposes provided in subdivision 2. The following revenue must be
deposited in the school trust management account:
new text end

new text begin (1) all revenues generated from school trust lands, including revenues from timber sales
and mineral-related payments under section 93.22;
new text end

new text begin (2) money transferred to the account; and
new text end

new text begin (3) interest accruing from investment of the account.
new text end

new text begin Subd. 2. new text end

new text begin Account purposes. new text end

new text begin (a) Money in the school trust management account may
be spent only for:
new text end

new text begin (1) mineral-resource management and projects to enhance future mineral income and
promote new mineral-resource opportunities on school trust lands;
new text end

new text begin (2) improving, administering, and managing forests on school trust lands and constructing
and improving forest roads to enhance the forest value of school trust lands;
new text end

new text begin (3) real estate transaction costs for school trust lands, including valuation expenses, legal
fees, and transactional staff costs; and
new text end

new text begin (4) the costs incurred by the Legislative Permanent School Fund Commission under
section 127A.30 and by the school trust lands director under section 127A.353.
new text end

new text begin (b) The balance in the account originating from payments under sections 93.14 to 93.285
that exceeds $1,500,000 must be transferred to the permanent school fund on March 31,
June 30, September 30, and December 31 each year. The remaining balance that exceeds
$....... must be transferred to the permanent school fund on June 30 each year.
new text end

new text begin Subd. 3. new text end

new text begin Certification. new text end

new text begin The school trust lands director must certify to the Legislative
Permanent School Fund Commission the total costs incurred for:
new text end

new text begin (1) forest management, forest improvement, and road improvement on school trust lands
during each fiscal year;
new text end

new text begin (2) mineral-resource management and projects to enhance future mineral income and
promote new mineral-resource opportunities; and
new text end

new text begin (3) real estate transaction and other costs of the school trust lands director necessary to
ensure that school trust lands are managed efficiently and in the best interests of the
beneficiaries.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2018.
new text end

Sec. 23. new text beginTRANSFERRING SCHOOL TRUST LAND ASSETS AND AUTHORITY.
new text end

new text begin Unless otherwise provided by law, the responsibilities of the commissioner of natural
resources and other state agencies for administering or managing school trust lands as
defined under Minnesota Statutes, section 92.025, are transferred to the school trust lands
director in accordance with Minnesota Statutes, section 15.039.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2020.
new text end

Sec. 24. new text beginTRANSITION RECOMMENDATIONS; REPORT.
new text end

new text begin By January 15, 2019, the commissioner of natural resources and the school trust lands
director must submit a report to the Legislative Permanent School Fund Commission and
the chairs and ranking minority members of the legislative committees and divisions with
jurisdiction over education and environment and natural resources policy in accordance
with Minnesota Statutes, section 3.195. The report must include:
new text end

new text begin (1) recommendations for amending Minnesota Statutes and Minnesota Rules to implement
the transfer of authorities over school trust lands provided under this act and for the transition
of authority over all school trust lands to the school trust lands director by July 1, 2020; and
new text end

new text begin (2) a transition plan and recommendations, including any management contract between
the commissioner, director, and other entities, to transfer authority over school trust lands
to the school trust lands director by July 1, 2020.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2018.
new text end

Sec. 25. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2016, section 92.83, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2019.
new text end

APPENDIX

Repealed Minnesota Statutes: 18-5677

92.83 CONDEMNATION OF SCHOOL TRUST LAND.

Subdivision 1.

Purpose.

The purpose of this section is to extinguish the school trust interest in school trust lands where long-term economic return is prohibited by designation or policy while producing economic benefits for Minnesota's public schools. For the purposes of satisfying the Minnesota Constitution, article XI, section 8, which limits the sale of school trust lands to a public sale, the commissioner of natural resources shall acquire school trust lands through condemnation, as provided in subdivision 2.

Subd. 2.

Commencement of condemnation proceedings.

When the commissioner of natural resources has determined sufficient money is available to acquire any of the lands identified under section 84.027, subdivision 18, paragraph (c), the commissioner shall proceed to extinguish the school trust interest by condemnation action. When requested by the commissioner, the attorney general shall commence condemnation of the identified school trust lands.

Subd. 3.

Payment.

The portion of the payment of the award and judgment that is for the value of the land shall be deposited into the permanent school fund. The remainder of the award and judgment payment shall first be remitted for reimbursement to the accounts from which expenses were paid, with any remainder deposited into the permanent school fund.

Subd. 4.

Account.

The school trust lands account is created in the state treasury. Money credited to the account is appropriated to the commissioner of natural resources for the purposes of this section.