Roles & Responsibilities
Minnesota’s school trust lands and the Permanent School Fund are administered through a shared system of land management, fiduciary oversight, legislative review, financial management, investment, and distribution. Each participating body has a distinct role.
Real Property Assets
The Department of Natural Resources (DNR) administers and manages Minnesota’s school trust lands. Its responsibilities include forestry and minerals management, leasing, land sales and exchanges, real estate transactions, resource evaluation, revenue generation and collection, and accounting for land-management activities.
Minnesota law gives DNR the authority and responsibility to administer school trust lands and identifies specific goals for their management. These include managing the lands efficiently and with undivided loyalty to the beneficiaries; reducing management expenditures and maximizing revenues deposited into the Permanent School Fund; receiving not less than fair-market value from specified transactions; balancing short-term revenues with long-term interests; maximizing long-term economic return while maintaining sound natural resource conservation and management principles; and maintaining the integrity of the trust.
The Office of School Trust Lands (OSTL) acts in a fiduciary capacity for the beneficiaries and provides advice, recommendations, and analysis relating to the management of school trust assets.
OSTL advises the governor, Executive Council, Land Exchange Board, and DNR on matters affecting school trust lands and the Permanent School Fund. Its advice and recommendations to DNR include management policies, leases, royalty agreements, land sales and exchanges, cost certification, and opportunities to generate revenue. OSTL also works with DNR to develop and implement long-term strategies for increasing asset value, improving cash flow, rebalancing the portfolio, and strengthening financial performance.
The Legislative Permanent School Fund Commission is a bipartisan legislative commission that advises DNR and OSTL on the management of school trust lands and reviews legislation affecting those lands.
The commission reviews relevant statutes, policies, and implementation and recommends changes intended to ensure the provident use of school trust lands. It reports annually to the Legislature with recommendations for securing long-term economic return for the Permanent School Fund.
The Executive Council considers and approves certain transactions involving school trust lands and mineral interests, including specified mineral leases and other transactions requiring council approval under state law.
The Executive Council consists of the governor, lieutenant governor, secretary of state, state auditor, and attorney general.
The Land Exchange Board reviews and approves exchanges of state-owned land for other public or private land when board approval is required.
The board consists of the governor, attorney general, and state auditor. OSTL advises the board on school trust land matters presented for its consideration.
Financial Assets
Minnesota Management and Budget manages the Permanent School Fund as a state financial fund. Its responsibilities include maintaining fund accounts and administering deposits, transfers, and distributions associated with the fund.
The State Board of Investment invests the financial assets of the Permanent School Fund. Investment performance determines the earnings available for distribution while the fund’s principal is preserved as a perpetual financial resource for Minnesota’s public schools.
The Department of Education distributes Permanent School Fund earnings to eligible public school districts and charter schools. Distributions are made semiannually and are allocated according to adjusted average daily membership from the preceding year.
Together, these entities support the management of school trust lands, the generation of revenue, the administration and investment of the Permanent School Fund, and the distribution of earnings to Minnesota’s public schools.