School trust lands are an important, little known, and often misunderstood category of land ownership. In fact, many Minnesotans have never heard of their school trust lands. They are not “public lands” in the sense we think of state parks and forests (although some school trust lands lie within park and forest boundaries). Rather, these lands are set aside in the state constitution to generate revenue for the state's public schools, and deliver millions of dollars annually to all 331 public school districts in Minnesota as well as 169 charter schools in operation throughout the state.
The history of school trust lands is one of extraordinary vision on the part of this nation's founding fathers. The idea was simple: generate income from land to supplement public school funding. The original thirteen states had sovereign authority over all of the lands within their borders. This land provided a tax base for the support of education and other governmental functions. In contrast, the federal government owned vast areas of the territories that later became states. This land was immune from taxation. As a result, states created from these public lands would not have been on an "equal footing" with those of the original thirteen. Congress, therefore, made land grants to the newly admitted states in order to equalize their tax base status with that of the original thirteen.
To ensure that land would be available for the school land grants to the new states, Congress established a practice of reserving certain sections in every township within the territories for the support of the schools. Thus, the first enactment for the sale of the public lands in the "western territory," the Land Ordinance of 1785, provided for setting apart section sixteen of every township for the maintenance of the public schools. And, when Ohio was admitted into the Union by the Act of April 30, 1802, it was granted section sixteen in every township "for the use of schools."
This was the basic pattern followed for subsequent states, although the specific terms of the school land reservations and grants have differed over time. In virtually every case, the school land grants are found in the states' admission or enabling acts. The grants have varied in terms of the number of sections granted per township, in the wording of the purpose of the grant (e.g., "for the use of schools," "for the support of common schools") and in the extent of explicit restrictions placed upon the state.
When the State of Minnesota entered the Union on May 11, 1858 , its grant of school trust land was contained in a series of federal congressional acts that were part of the process of Minnesota becoming a state. The Organic Act of 1849, which created the territory of Minnesota, reserved sections 16 and 36 in each township (or their equivalent) “for the purpose of being applied to the schools in said territory.” The Enabling Act of 1857 actually granted this land to the state.
The citizens of Minnesota accepted the land grant for the use of schools on October 13, 1857, when they voted to adopt a state constitution. The Minnesota Constitution also established the Permanent School Fund (PSF) to ensure a long-term source of funds for public education in the state. The PSF consists of the accumulated revenues generated from school trust lands.
The initial Enabling Act of 1857 granted approximately 2.9 million acres to the state to support public education. Minnesota subsequently received three additional federal grants that later became part of the school trust land portfolio. Federal legislation in 1857 extended so-called Indemnity trust lands to the state when sections 16 and 36 were occupied, reserved, otherwise unavailable, or submerged. In 1860, Congress extended the Swamp Acts of 1849 and 1850 to Minnesota, thereby conveying 4.7 million acres of "swamp trust" land. A final grant was made in 1866 for Internal Improvement lands meant to foster economic and railroad development in the state. All four grants are now considered school trust lands after constitutional amendments in 1914, 1938, 1974 and 1984.
The original policy of the state was the speedy survey and sale of the best school trust lands to generate income for the trust fund and to support public schools. By 1900 much of the best agricultural, timber, and mineral lands—especially in the southern part of the state—had been sold to private interests.
The remainder of the trust land was retained, leaving approximately 2.5 million acres of land (plus an additional 1 million acres of severed mineral rights), the vast majority of which is concentrated in the northeast quadrant of the state. These lands are predominantly found in a checkerboard pattern, with a few consolidated areas resulting from post-statehood land exchanges. Much of the land is intermixed with county, federal, private and other state lands.