Minnesota Legislature
SF 1988
as introduced - 91st Legislature (2019 - 2020) Posted on 07/02/2019 02:18pm
Current Version - as introduced
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A bill for an act
relating to natural resources; clarifying authority to compensate permanent school
fund; amending Minnesota Statutes 2018, sections 84.027, subdivision 18; 92.121;
92.50, subdivision 1.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2018, section 84.027, subdivision 18, is amended to read:
Subd. 18.
Permanent school fund authority; reporting.
(a) The commissioner of
natural resources has the authority and responsibility deleted text begin for the administration ofdeleted text end new text begin to administernew text end
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:
(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;
(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, 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;
(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;
(5) optimize school trust land revenues and maximize the value of the trust consistent
with deleted text begin thedeleted text end balancing deleted text begin ofdeleted text end short-term and long-term interests, so that long-term benefits are not
lost in an effort to maximize short-term gains; and
(6) maintain the integrity of the trust and prevent the misapplication of its lands and its
revenues.
(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. By July 1, 2018, the permanent school fund deleted text begin shalldeleted text end new 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 shall 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 begin shalldeleted text end new text begin mustnew text end be compiled and submitted to the
Legislative Permanent School Fund Commission for review.
(c) By December 31, 2013, the report required under paragraph (a) deleted text begin shalldeleted text end new text begin mustnew text end 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 deleted text begin shalldeleted text end new text begin mustnew text end 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) deleted text begin shalldeleted text end new text begin mustnew text end include a
status report of the commissioner's progress in maximizing the long-term economic return
on lands identified in the 2013 report.
(d) When deleted text begin futuredeleted text end new text begin management practices, policies, ornew text end designations deleted text begin or policiesdeleted text end by the
commissionernew text begin diminish ornew text end prohibit the long-term economic return on school trust land, the
conflict deleted text begin shalldeleted text end new text begin mustnew text end be resolved deleted text begin by compensating the permanent school fund through an
exchange or purchase of the lands before designation or application of the policydeleted text end new text begin as provided
in section 92.121new text end .
Sec. 2.
Minnesota Statutes 2018, section 92.121, is amended to read:
92.121 PERMANENT SCHOOL FUND LANDS.
new text begin (a) new text end The 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
(b) When revenue generation of school trust land and associated resources is diminished
by management practices applied to the land and resources as determined by the
commissioner of natural resources, the commissioner shall compensate the permanent school
fund. When revenue generation of school trust land and associated resources is prohibited
by policies or designations applied to the land and resources as determined by the
commissioner of natural resources, the commissioner shall compensate the permanent school
fund before the designation or application of the policy. To compensate the permanent
school fund, the commissioner may use compensation methods that include exchange for
other lands that are compatible with the goal of the permanent school fund in section 127A.31
as allowed by sections 94.343, subdivision 1, and 94.3495 and the Minnesota Constitution,
article XI, section 10; leasing under section 92.50 with rental payments as compensation;
or condemnation of the lands under section 92.83 with payment of the amount of the award
and judgment.
new text end
Sec. 3.
Minnesota Statutes 2018, section 92.50, subdivision 1, is amended to read:
Subdivision 1.
Lease terms.
(a) The commissioner of natural resources may lease land
under the commissioner's jurisdiction and control:
(1) to remove sand, gravel, clay, rock, marl, peat, and black dirt;
(2) to store ore, waste materials from mines, or rock and tailings from ore milling plants;
(3) for roads or railroads;
new text begin (4) to compensate the permanent school fund according to section 92.121;new text end or
deleted text begin (4)deleted text end new text begin (5)new text end for other uses consistent with the interests of the state.
(b) The commissioner shall offer the lease at public or private sale for an amount and
under terms and conditions prescribed by the commissioner. Commercial leases for more
than ten years and leases for removal of peat that cover 320 or more acres must be approved
by the Executive Council.
(c) The lease term may not exceed 21 years except:
(1) leases of lands for storage sites for ore, waste materials from mines, or rock and
tailings from ore milling plantsdeleted text begin ,deleted text end or for the removal of peat for nonagricultural purposes may
not exceed a term of 25 years; and
(2) leases for commercial purposes, including major resort, convention center, or
recreational area purposes, may not exceed a term of 40 years.
(d) Leases must be subject to sale and leasing of the land for mineral purposes and
contain a provision for cancellation for just cause at any time by the commissioner upon
six months' written notice. A longer notice period, not exceeding three years, may be provided
in leases for storing ore, waste materials from minesnew text begin ,new text end or rock or tailings from ore milling
plants. The commissioner may determine the terms and conditions, including the notice
period, for cancellation of a lease for the removal of peat and commercial leases.
(e) Money received from leases under this section must be credited to the fund to which
the land belongs.