1.1.................... moves to amend H.F. No. 3475 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. Minnesota Statutes 2009 Supplement, section 16A.06, subdivision 11,
1.4is amended to read:
1.5    Subd. 11. Permanent school fund reporting. The commissioner shall annually
1.6report to the Board of Trustees of the Permanent School Trust Lands Administration,
1.7the Permanent School Fund Advisory Committee, and the legislature the amount of the
1.8permanent school fund transfer and information about the investment of the permanent
1.9school fund provided by the State Board of Investment. The State Board of Investment
1.10shall provide information about how they maximized the long-term economic return of the
1.11permanent school fund.
1.12EFFECTIVE DATE.This section is effective July 1, 2013.

1.13    Sec. 2. Minnesota Statutes 2008, section 16A.125, subdivision 5, is amended to read:
1.14    Subd. 5. Forest trust lands. (a) The term "state forest trust fund lands" as used
1.15in this subdivision, means public land in trust under the Constitution set apart as "forest
1.16lands under the authority of the commissioner" of natural resources as defined by section
1.1789.001, subdivision 13 .
1.18(b) The commissioner of management and budget shall credit the revenue from the
1.19forest trust fund lands to the forest suspense account. The account must specify the trust
1.20funds interested in the lands and the respective receipts of the lands.
1.21(c) After a fiscal year, the commissioner of management and budget shall certify the
1.22total costs incurred for forestry during that year under appropriations for the protection,
1.23improvement, administration, and management of state forest trust fund lands and
1.24construction and improvement of forest roads to enhance the forest value of the lands.
1.25The certificate must specify the trust funds interested in the lands. The commissioner of
2.1natural resources and the director of the Permanent School Trust Lands Administration
2.2shall supply the commissioner of management and budget with the information needed
2.3for the certificate.
2.4(d) After a fiscal year, the commissioner shall apportion the receipts and distribute
2.5the receipts credited to the suspense account during that fiscal year as follows:
2.6(1) the amount of the certified costs incurred by the state Department of Natural
2.7Resources for forest management, forest improvement, and road improvement during the
2.8fiscal year shall be transferred to the forest management investment account established
2.9under section 89.039, and the portion of the certified costs incurred by the Permanent
2.10School Trust Lands Administration must be transferred to that agency's investment
2.11account;
2.12(2) the balance of the certified costs incurred by the state Department of Natural
2.13Resources during the fiscal year shall be transferred to the general fund; and
2.14(3) the balance of the receipts shall then be returned prorated to the trust funds in
2.15proportion to their respective interests in the lands which produced the receipts.
2.16EFFECTIVE DATE.This section is effective July 1, 2013.

2.17    Sec. 3. Minnesota Statutes 2008, section 84.027, subdivision 18, is amended to read:
2.18    Subd. 18. Permanent school fund authority; reporting. The commissioner of
2.19natural resources director of the Permanent School Trust Lands Administration has the
2.20authority and responsibility for the administration of school trust lands under sections
2.2192.121 and 127A.31. The commissioner director shall biannually report to the Permanent
2.22School Fund Advisory Committee and the legislature on the management of the school
2.23trust lands that shows how the commissioner director has and will continue to achieve
2.24the following goals:
2.25    (1) manage the school trust lands efficiently;
2.26    (2) reduce the management expenditures of school trust lands and maximize the
2.27revenues deposited in the permanent school trust fund;
2.28    (3) manage the sale, exchange, and commercial leasing of school trust lands to
2.29maximize the revenues deposited in the permanent school trust fund and retain the value
2.30from the long-term appreciation of the school trust lands; and
2.31    (4) manage the school trust lands to maximize the long-term economic return for the
2.32permanent school trust fund while maintaining sound natural resource conservation and
2.33management principles.
2.34EFFECTIVE DATE.This section is effective July 1, 2013.

3.1    Sec. 4. Minnesota Statutes 2008, section 84.085, subdivision 1, is amended to read:
3.2    Subdivision 1. Authority. (a) The commissioner of natural resources may accept for
3.3and on behalf of the state any gift, bequest, devise, or grants of lands or interest in lands or
3.4personal property of any kind or of money tendered to the state for any purpose pertaining
3.5to the activities of the department or any of its divisions. Any money so received is hereby
3.6appropriated and dedicated for the purpose for which it is granted. Lands and interests in
3.7lands so received may be sold or exchanged as provided in chapter 94.
3.8(b) When the commissioner of natural resources accepts lands or interests in land,
3.9the commissioner may reimburse the donor for costs incurred to obtain an appraisal needed
3.10for tax reporting purposes. If the state pays the donor for a portion of the value of the
3.11lands or interests in lands that are donated, the reimbursement for appraisal costs shall not
3.12exceed $1,500. If the donor receives no payment from the state for the lands or interests in
3.13lands that are donated, the reimbursement for appraisal costs shall not exceed $5,000.
3.14(c) The commissioner of natural resources, on behalf of the state, may accept and
3.15use grants of money or property from the United States or other grantors for conservation
3.16purposes not inconsistent with the laws of this state. Any money or property so received
3.17is hereby appropriated and dedicated for the purposes for which it is granted, and shall
3.18be expended or used solely for such purposes in accordance with the federal laws and
3.19regulations pertaining thereto, subject to applicable state laws and rules as to manner
3.20of expenditure or use providing that the commissioner may make subgrants of any
3.21money received to other agencies, units of local government, private individuals, private
3.22organizations, and private nonprofit corporations. Appropriate funds and accounts shall
3.23be maintained by the commissioner of management and budget to secure compliance
3.24with this section.
3.25 (d) The commissioner may accept for and on behalf of the permanent school fund a
3.26donation of lands, interest in lands, or improvements on lands. A donation so received
3.27shall become state property, be classified as school trust land as defined in section 92.025,
3.28and be managed consistent with section 127A.31.
3.29EFFECTIVE DATE.This section is effective July 1, 2013.

3.30    Sec. 5. Minnesota Statutes 2008, section 92.12, subdivision 1, is amended to read:
3.31    Subdivision 1. Appraisers. The director of the Permanent School Trust Lands
3.32Administration may have any school trust land appraised. The commissioner may
3.33have any school trust or other state lands appraised. The appraisals must be made by
3.34regularly appointed and qualified state appraisers. To be qualified, an appraiser must
3.35hold a state appraiser license issued by the Department of Commerce. The appraisal
4.1must be in conformity with the Uniform Standards of Professional Appraisal Practice of
4.2the Appraisal Foundation.
4.3EFFECTIVE DATE.This section is effective July 1, 2013.

4.4    Sec. 6. Minnesota Statutes 2008, section 92.121, is amended to read:
4.592.121 PERMANENT SCHOOL FUND LANDS.
4.6The director of the Permanent School Trust Lands Administration and the
4.7commissioner of natural resources shall exchange permanent school fund land as defined
4.8in the Minnesota Constitution, article XI, section 8, located in state parks, state recreation
4.9areas, wildlife management areas, scientific and natural areas, or state waysides or on lands
4.10managed by the commissioner as old growth stands, for other lands as allowed by the
4.11Minnesota Constitution, article XI, section 10, and section 94.343, subdivision 1, that are
4.12compatible with the goal of the permanent school fund lands in section 127A.31 when, as a
4.13result of management practices applied to the permanent school fund lands and associated
4.14resources, revenue generation has been diminished or is prohibited and no alternative has
4.15been put into effect to compensate the permanent school fund for the income losses.
4.16EFFECTIVE DATE.This section is effective July 1, 2013.

4.17    Sec. 7. Minnesota Statutes 2008, section 92.13, is amended to read:
4.1892.13 STATE LANDS, DATE OF SALE.
4.19The commissioner shall hold public sales of school and other state lands other than
4.20school lands when it is advantageous to the state and to intending buyers and settlers.
4.21EFFECTIVE DATE.This section is effective July 1, 2013.

4.22    Sec. 8. Minnesota Statutes 2008, section 93.2236, is amended to read:
4.2393.2236 MINERALS MANAGEMENT ACCOUNT.
4.24(a) The minerals management account is created as an account in the natural
4.25resources fund. Interest earned on money in the account accrues to the account. Money in
4.26the account may be spent or distributed only as provided in paragraphs (b) and (c).
4.27(b) If the balance in the minerals management account exceeds $3,000,000 on June
4.2830, the amount exceeding $3,000,000 must be distributed to the permanent school fund
4.29and the permanent university fund. The amount distributed to each fund must be in the
4.30same proportion as the total mineral lease revenue received in the previous biennium
4.31from school trust lands and university lands.
5.1(c) Subject to appropriation by the legislature, and approval by the director of the
5.2Permanent School Trust Lands Administration, money in the minerals management
5.3account may be spent by the commissioner of natural resources for mineral resource
5.4management and projects to enhance future mineral income and promote new mineral
5.5resource opportunities.
5.6EFFECTIVE DATE.This section is effective July 1, 2013.

5.7    Sec. 9. Minnesota Statutes 2008, section 94.342, subdivision 5, is amended to read:
5.8    Subd. 5. Additional restrictions on school trust land. School trust land may
5.9be exchanged with other Class A land only if the Permanent School Fund Advisory
5.10Committee is appointed as temporary Board of Trustees of the Permanent School
5.11Trust Lands Administration is serving as trustee of the school trust land for purposes
5.12of the exchange. The committee shall provide independent legal counsel to review the
5.13exchanges.
5.14EFFECTIVE DATE.This section is effective July 1, 2013.

5.15    Sec. 10. [128E.01] CITATION; PERMANENT SCHOOL TRUST LANDS
5.16ADMINISTRATION ACT.
5.17This chapter may be cited as the Permanent School Trust Lands Administration Act.
5.18EFFECTIVE DATE.This section is effective July 1, 2013.

5.19    Sec. 11. [128E.02] POLICY AND PURPOSE.
5.20(a) The purpose of chapter 128E is to establish an administration and board to
5.21manage Minnesota's school trust lands in accordance with the provisions of the Minnesota
5.22Constitution, article XI, section 8.
5.23(b) As trustee, the state must manage the lands and revenues generated from the
5.24lands in the most prudent and profitable manner possible, and not for any purpose
5.25inconsistent with the best interests of the trust beneficiaries as defined in the Minnesota
5.26Constitution, article XI, section 8.
5.27(c) The trustee must be concerned with both income for the current beneficiaries
5.28and the preservation of trust assets for future beneficiaries, which requires a balancing of
5.29short-term and long-term interests so that long-term benefits are not lost in an effort to
5.30maximize short-term gains.
5.31(d) The beneficiaries do not include other governmental institutions or agencies, the
5.32public at large, or the general welfare of this state. This chapter shall be liberally construed
6.1to enable the board of trustees, the director, and the administration to faithfully fulfill the
6.2state's obligations to the trust beneficiaries.
6.3EFFECTIVE DATE.This section is effective July 1, 2013.

6.4    Sec. 12. [128E.03] DEFINITIONS.
6.5    Subdivision 1. Administration. "Administration" means the Permanent School
6.6Trust Lands Administration.
6.7    Subd. 2. Board. "Board" or "board of trustees" means the Permanent School Trust
6.8Lands Board of Trustees.
6.9    Subd. 3. Director. "Director" or "director of the Permanent School Trust Lands
6.10Administration" means the chief executive officer of the Permanent School Trust Lands
6.11Administration.
6.12    Subd. 4. School trust land. "School trust land" means land granted by the United
6.13States for use of schools within each township, swampland granted to the state, and
6.14internal improvement land that are reserved for permanent school fund purposes under
6.15the Minnesota Constitution, article XI, section 8, and land exchanged, purchased, or
6.16granted to the permanent school fund.
6.17EFFECTIVE DATE.This section is effective July 1, 2013.

6.18    Sec. 13. [128E.04] GOVERNANCE.
6.19    Subdivision 1. Establishment. The Permanent School Trust Lands Administration
6.20is established. The administration is an independent state agency and not a division of
6.21any other department and is not subject to section 16B.37.
6.22    Subd. 2. Management. The Permanent School Trust Lands Administration shall
6.23manage all school trust lands within the state. The administration is managed by a director
6.24appointed by a majority vote of the board of trustees. The board of trustees shall provide
6.25policies for the management of the administration and for the management of trust lands
6.26and assets.
6.27    Subd. 3. Joint ventures. The Permanent School Trust Lands Administration, upon
6.28approval of the board of trustees, may enter into joint ventures to develop trust lands
6.29and minerals.
6.30    Subd. 4. Board of trustees membership; nomination list; qualifications; terms;
6.31replacement; chair; quorum. (a) There is established the Permanent School Trust Lands
6.32Board of Trustees.
7.1 (b) The board shall consist of seven members by the governor with the consent of
7.2the senate for six-year terms. Of the initial appointments to the board, the governor shall
7.3appoint one member to serve a six-year term, one member to serve a five-year term, one
7.4member to serve a four-year term, one member to serve a three-year term, one member
7.5to serve a two-year term, and one member to serve a one-year term. All subsequent
7.6appointments shall be for a term of six years, except, if a vacancy occurs, the governor
7.7shall appoint a replacement to fill the unexpired term.
7.8(c) The governor shall select six of the seven appointees to the board from a
7.9nomination list of at least two candidates for each position or vacancy submitted according
7.10to subdivision 5. The governor may request an additional nomination list of at least two
7.11candidates from the nominating committee if the initial list of candidates for a given
7.12position is unacceptable.
7.13(d) The governor may appoint one member without requiring a nomination list. This
7.14member serves at the pleasure of the governor.
7.15(e) Each board member must posses outstanding professional qualifications pertinent
7.16to the purposes and activities of the trust. qualifications which are pertinent include:
7.17renewable and nonrenewable resource management or development, real estate, business,
7.18finance, trust administration, asset management, and the practice of law in the areas of
7.19natural resources or real estate.
7.20(f) The board of trustees shall select a chair from its membership. The governor or
7.21five board members may, for cause, remove a member of the board.
7.22(h) Compensation and reimbursement of expenses for members of the board of
7.23trustees is as provided in section 15.0575.
7.24    Subd. 5. Board of trustees nominating committee. The board of trustees
7.25nominating committee consists of 12 members. Six members must be appointed by the
7.26Subcommittee on Committees of the Committee on Rules and Administration of the
7.27senate. Six members must be appointed by the speaker of the house. A legislator may not
7.28be a member of the committee. Appointing authorities must attempt to appoint members
7.29who are knowledgeable about school trust funds issues. Geographical representation
7.30must be taken into consideration when making appointments. Membership terms,
7.31compensation, and removal of the members are governed by section 15.0575.
7.32    Subd. 6. Information to board. Board members shall be given access to all
7.33administration records and personnel consistent with law and as necessary to permit
7.34the board to accomplish its responsibilities to ensure that the administration is in full
7.35compliance with applicable policies and law.
7.36EFFECTIVE DATE.This section is effective July 1, 2013.

8.1    Sec. 14. [128E.05] POLICIES.
8.2    Subdivision 1. Management. The board shall establish policies for the management
8.3of the Permanent School Trust Lands Administration. The policies shall:
8.4(1) be consistent with the Minnesota Constitution and state law;
8.5(2) reflect undivided loyalty to the beneficiaries consistent with fiduciary duties;
8.6(3) require the return of not less than fair market value for the use, sale, or exchange
8.7of school trust assets;
8.8(4) seek to optimize trust land revenues and increase the value of trust land holdings
8.9consistent with the balancing of short-term and long-term interests, so that long-term
8.10benefits are not lost in an effort to maximize short-term gains; and
8.11(5) maintain the integrity of the trust and prevent the misapplication of its lands
8.12and its revenues.
8.13    Subd. 2. Duties. The board and the director shall recommend to the governor and
8.14the legislature any necessary or desirable changes in statutes relating to the trust or their
8.15trust responsibilities. The board shall develop policies for the long-term benefit of the trust
8.16utilizing the broad discretion and power granted to it in this chapter.
8.17    Subd. 3. Policies continued unless changed. Policies adopted by the Department
8.18of Natural Resources prior to the effective date of this act regarding school trust lands
8.19shall remain in effect until amended or repealed by the board. The administration shall be
8.20the named party in substitution of the Department of Natural Resources or its predecessor
8.21agencies with respect to all documents affecting trust lands from the effective date of
8.22this act.
8.23    Subd. 4. Accept land and property. The board may accept for and on behalf of the
8.24permanent school fund a donation of lands, interest in lands, or improvements on lands.
8.25A donation so received shall become state property, be classified as school trust land as
8.26defined in section 92.025, and be managed consistent with section 127A.31.
8.27EFFECTIVE DATE.This section is effective July 1, 2013.

8.28    Sec. 15. [128E.06] DIRECTOR.
8.29    Subdivision 1. Term. The board shall select the director on the basis of outstanding
8.30professional qualifications pertinent to the purposes and activities of the trust. The director
8.31serves in the unclassified service at the pleasure of the board.
8.32    Subd. 2. Compensation. The board shall establish the compensation of the director
8.33and annually report the director's compensation to the legislature. The compensation and
8.34performance of the director shall be examined each year as part of the board's budget
8.35review process. The director's compensation is subject to section 3.855.
9.1EFFECTIVE DATE.This section is effective July 1, 2013.

9.2    Sec. 16. [128E.07] RESPONSIBILITIES OF THE DIRECTOR.
9.3    Subdivision 1. Duties and budget review. In carrying out the policies of the board
9.4of trustees and in establishing procedures and rules, the director shall:
9.5(1) take an oath of office before assuming any duties as the director;
9.6(2) adopt procedures necessary for the proper administration of matters entrusted to
9.7the director by state law and board policy;
9.8(3) faithfully manage the administration under the policies established by the board;
9.9(4) submit to the board and for public inspection by October 1 of each year an
9.10annual management budget and financial plan for operations of the administration and,
9.11after approval by the board, submit the budget to the governor;
9.12(5) direct and control the budget expenditures as finally authorized and appropriated;
9.13(6) establish job descriptions and employ, within the limitation of the budget, staff
9.14necessary to accomplish the purposes of the office;
9.15(7) establish, in accordance with generally accepted principles of fund accounting, a
9.16system to identify and account for the assets and vested interests of each beneficiary;
9.17(8) maintain appropriate records of trust activities to enable the legislative auditor to
9.18conduct periodic audits of trust activities;
9.19(9) provide that all leases, contracts, and agreements be submitted to legal counsel
9.20for review of compliance with applicable law and fiduciary duties prior to execution and
9.21utilize the services of the attorney general as provided in section 128E.08;
9.22(10) keep the board, beneficiaries, governor, legislature, and the public informed
9.23about the work of the director and administration by reporting to the board in a public
9.24meeting at least once during each calendar quarter; and
9.25(11) respond in writing within a reasonable time to a request by the board for
9.26responses to questions on policies and practices affecting the management of the trust.
9.27    Subd. 2. Additional responsibilities. The director may:
9.28(1) contract with other public agencies for personnel management services; and
9.29(2) with the approval of the board, enter into joint ventures and other business
9.30arrangements consistent with the purposes of the trust.
9.31EFFECTIVE DATE.This section is effective July 1, 2013.

9.32    Sec. 17. [128E.08] ATTORNEY GENERAL.
9.33(a) The attorney general shall: represent the board, director, or administration in any
9.34legal action relating to trust lands except as otherwise provided in paragraph (c); review
10.1leases, contracts, and agreements submitted for review prior to execution; and undertake
10.2suits for the collection of royalties, rental, and other damages in the name of the state.
10.3(b) The attorney general may institute actions against any party to enforce this
10.4chapter or to protect the interests of the trust beneficiaries.
10.5(c) The trust beneficiaries specified in Minnesota Constitution, article XI, section
10.68, may bring an action against the board of trustees to ensure that the board of trustees
10.7faithfully fulfills the board's obligations to the trust beneficiaries.
10.8EFFECTIVE DATE.This section is effective July 1, 2013.

10.9    Sec. 18. [128E.09] LAND EXCHANGE.
10.10The director of the Permanent School Trust Lands Administration may enter into
10.11land exchange agreements with the commissioner of natural resources according to the
10.12provisions of section 92.121.

10.13    Sec. 19. [128E.10] FOREST AND MINERALS MANAGEMENT.
10.14    Subdivision 1. Control. All forest and minerals management on school trust lands
10.15is vested with the board of the Permanent School Trust Lands Administration according
10.16to the provisions of this chapter.
10.17    Subd. 2. May contract. The administration may contract with any public or
10.18private entity to make improvements to or upon trust lands and to carry out any of the
10.19responsibilities of the office, so long as the contract requires strict adherence to trust
10.20management principles and applicable law, and is subject to immediate suspension or
10.21termination for cause.
10.22EFFECTIVE DATE.This section is effective July 1, 2013.

10.23    Sec. 20. TRANSFER OF STAFF AND ASSETS AND BUDGET
10.24RESPONSIBILITY.
10.25All personnel, equipment, and other assets directly associated with the management
10.26of the permanent school fund lands are transferred from the Department of Natural
10.27Resources and any other state agency to the Permanent School Trust Lands Administration
10.28effective July 1, 2013, according to Minnesota Statutes, section 15.039.
10.29EFFECTIVE DATE.This section is effective July 1, 2013."
10.30Amend the title accordingly