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H.B. 367 Enrolled

             1     

TRUST LANDS AMENDMENTS

             2     
2012 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Michael E. Noel

             5     
Senate Sponsor: Margaret Dayton

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill amends provisions related to trust lands.
             10      Highlighted Provisions:
             11          This bill:
             12          .    provides that certain amounts deposited into the Interest and Dividends Account and
             13      appropriated from that account shall be used to provide funding for specified
             14      purposes related to trust lands;
             15          .    defines terms;
             16          .    establishes the School Children's Trust Section within the State Office of Education
             17      to perform certain duties related to trust lands;
             18          .    modifies the process for determining the membership of the School and Institutional
             19      Trust Lands Board of Trustees nominating committee;
             20          .    modifies the duties of the chief executive officer of the School and Institutional
             21      Trust Lands Administration; and
             22          .    makes technical and conforming changes.
             23      Money Appropriated in this Bill:
             24          None
             25      Other Special Clauses:
             26          None
             27      Utah Code Sections Affected:
             28      AMENDS:
             29          53A-16-101, as last amended by Laws of Utah 2010, Chapter 278


             30          53A-16-101.5, as last amended by Laws of Utah 2011, Chapter 293
             31          53C-1-103, as last amended by Laws of Utah 2005, Chapter 39
             32          53C-1-203, as last amended by Laws of Utah 2011, Chapter 247
             33          53C-1-303, as last amended by Laws of Utah 2011, Chapter 247
             34      ENACTS:
             35          53A-16-101.6, Utah Code Annotated 1953
             36     
             37      Be it enacted by the Legislature of the state of Utah:
             38          Section 1. Section 53A-16-101 is amended to read:
             39           53A-16-101. Uniform School Fund -- Contents -- Interest and Dividends Account.
             40          (1) The Uniform School Fund, a special revenue fund within the Education Fund,
             41      established by Utah Constitution, Article X, Section 5, consists of:
             42          (a) interest and dividends derived from the investment of money in the permanent State
             43      School Fund established by Utah Constitution, Article X, Section 5;
             44          (b) money transferred to the fund pursuant to Title 67, Chapter 4a, Unclaimed Property
             45      Act; and
             46          (c) all other constitutional or legislative allocations to the fund, including revenues
             47      received by donation.
             48          (2) (a) There is created within the Uniform School Fund a restricted account known as
             49      the Interest and Dividends Account.
             50          (b) The Interest and Dividends Account consists of:
             51          (i) interest and dividends derived from the investment of money in the permanent State
             52      School Fund referred to in Subsection (1)(a); and
             53          (ii) interest on account money.
             54          (3) (a) Upon appropriation by the Legislature, money from the Interest and Dividends
             55      Account shall be used for:
             56          (i) the administration of the School LAND Trust Program as provided in Section
             57      53A-16-101.5 [.]; and


             58          (ii) the performance of duties described in Section 53A-16-101.6 .
             59          (b) The Legislature may appropriate any remaining balance for the support of the
             60      public education system.
             61          Section 2. Section 53A-16-101.5 is amended to read:
             62           53A-16-101.5. School LAND Trust Program -- Purpose -- Distribution of funds --
             63      School plans for use of funds.
             64          (1) There is established the School LAND (Learning And Nurturing Development)
             65      Trust Program for the state's public schools to provide financial resources to enhance or
             66      improve student academic achievement and implement a component of the school
             67      improvement plan.
             68          (2) (a) The program shall be funded each fiscal year:
             69          (i) from the Interest and Dividends Account created in Section 53A-16-101 ; and
             70          (ii) in the amount of the sum of the following:
             71          (A) the interest and dividends from the investment of money in the permanent State
             72      School Fund deposited to the Interest and Dividends Account in the immediately preceding
             73      year; and
             74          (B) interest accrued on money in the Interest and Dividends Account in the
             75      immediately preceding fiscal year.
             76          (b) On and after July 1, 2003, the program shall be funded as provided in Subsection
             77      (2)(a) up to an amount equal to 2% of the funds provided for the Minimum School Program,
             78      pursuant to Title 53A, Chapter 17a, Minimum School Program Act, each fiscal year.
             79          (c) (i) The Legislature shall annually allocate, through an appropriation to the State
             80      Board of Education, a portion of [School LAND Trust Program money for the administration
             81      of the program.] the Interest and Dividends Account created in Section 53A-16-101 to be used
             82      for:
             83          (A) the administration of the School LAND Trust Program; and
             84          (B) the performance of duties described in Section 53A-16-101.6 .
             85          (ii) Any unused balance remaining from an amount appropriated under Subsection


             86      (2)(c)(i) shall be deposited in the Interest and Dividends Account for distribution to schools in
             87      the School LAND Trust Program.
             88          (3) (a) The State Board of Education shall allocate the money referred to in Subsection
             89      (2) annually for the fiscal year beginning July 1, 2000, and for each fiscal year thereafter as
             90      follows:
             91          (i) school districts and the charter schools combined shall receive 10% of the funds on
             92      an equal basis; and
             93          (ii) the remaining 90% of the funds shall be distributed on a per student basis, with
             94      each school district and charter school receiving its allocation based on the number of students
             95      in the school district and charter school as compared to the state total.
             96          (b) A school district shall distribute its allocation under Subsection (3)(a) to each school
             97      within the district on an equal per student basis.
             98          (c) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
             99      State Board of Education may make rules regarding the time and manner in which the student
             100      count shall be made for allocation of the money.
             101          (4) (a) Except as provided in Subsection (7), in order to receive its allocation under
             102      Subsection (3):
             103          (i) a school shall have established a school community council in accordance with
             104      Section 53A-1a-108 ; and
             105          (ii) the school's principal shall provide a signed, written assurance in accordance with
             106      rules of the State Board of Education that:
             107          (A) the membership of the school community council is consistent with the
             108      membership requirements specified in Section 53A-1a-108 ; and
             109          (B) the members were elected or appointed consistent with selection requirements
             110      specified in 53A-1a-108 .
             111          (b) At the direction of the Legislative Audit Subcommittee, the legislative auditor
             112      general shall:
             113          (i) audit a sample of schools to determine compliance with requirements specified in


             114      Section 53A-1a-108 for school community council membership and the election or
             115      appointment of school community council members; and
             116          (ii) submit an audit report to the Legislative Audit Subcommittee.
             117          (c) The Legislative Audit Subcommittee shall forward the audit report to the Public
             118      Education Appropriations Subcommittee and the State Board of Education.
             119          (d) (i) The State Board of Education may recommend that all or a portion of a school's
             120      allocation of School LAND Trust Program money under Subsection (3) be reduced or
             121      eliminated for a fiscal year if the school has failed to comply with requirements specified in
             122      Section 53A-1a-108 for school community council membership or the election or appointment
             123      of school community council members.
             124          (ii) The State Board of Education shall report to the Public Education Appropriations
             125      Subcommittee on the board's action or decision regarding a school identified in an audit report
             126      as being not in compliance with requirements specified in Section 53A-1a-108 for school
             127      community council membership or the election or appointment of school community council
             128      members.
             129          (5) (a) The school community council or its subcommittee shall create a program to use
             130      its allocation under Subsection (3) to implement a component of the school's improvement
             131      plan, including:
             132          (i) the school's identified most critical academic needs;
             133          (ii) a recommended course of action to meet the identified academic needs;
             134          (iii) a specific listing of any programs, practices, materials, or equipment which the
             135      school will need to implement a component of its school improvement plan to have a direct
             136      impact on the instruction of students and result in measurable increased student performance;
             137      and
             138          (iv) how the school intends to spend its allocation of funds under this section to
             139      enhance or improve academic excellence at the school.
             140          (b) The school may develop a multiyear program, but the program shall be approved by
             141      the school community council and the local school board of the district in which the school is


             142      located annually and as a prerequisite to receiving program funds allocated under this section.
             143          (c) (i) A school community council shall consider the approval of a plan for the use of
             144      School LAND Trust Program money in a meeting of the school community council at which a
             145      quorum is present.
             146          (ii) If a majority of the quorum votes to approve a plan for the use of School LAND
             147      Trust Program money, the plan is approved.
             148          (d) A school community council shall:
             149          (i) submit a plan for the use of School LAND Trust Program money that is approved in
             150      accordance with Subsection (5)(c) to the local school board for the local school board's
             151      approval; and
             152          (ii) include with the plan a report noting the number of school community council
             153      members who voted for or against the approval of the plan and the number of members who
             154      were absent for the vote.
             155          (e) (i) A local school board may approve or disapprove a plan for the use of School
             156      LAND Trust Program money.
             157          (ii) If a local school board disapproves a plan for the use of School LAND Trust
             158      Program money, the local school board shall provide a written explanation of why the plan was
             159      disapproved and request the school community council who submitted the plan to revise the
             160      plan.
             161          (iii) The school community council shall submit a revised plan to the local school
             162      board for approval.
             163          (6) (a) Each school shall:
             164          (i) implement the program as approved by the school community council and approved
             165      by the local school board;
             166          (ii) provide ongoing support for the council's or its subcommittee's program; and
             167          (iii) meet school board reporting requirements regarding financial and performance
             168      accountability of the program.
             169          (b) (i) Each school through its council or its subcommittee shall prepare and present an


             170      annual report of the program to its local school board at the end of the school year.
             171          (ii) The report shall detail the use of program funds received by the school under this
             172      section and an assessment of the results obtained from the use of the funds.
             173          (iii) A summary of the report shall be sent to households in accordance with the
             174      provisions under Subsection 53A-1a-108 (7).
             175          (7) (a) The governing board of a charter school shall prepare a plan for the use of
             176      School LAND Trust Program money that includes the elements listed in Subsection (5).
             177          (b) The plan shall be subject to approval by the entity that authorized the establishment
             178      of the charter school.
             179          (8) (a) A school community council and a governing board of a charter school may not
             180      be required to:
             181          (i) send a letter to legislators or other elected officials on the school's use of School
             182      LAND Trust Program money as a condition of receiving the money; or
             183          (ii) report to the State Board of Education or any local school board on whether any
             184      letters were sent to legislators or other elected officials on the school's use of School LAND
             185      Trust Program money.
             186          (b) Subsection (8)(a)(i) does not apply to the annual report to the local school board
             187      required by Subsection (6)(b).
             188          Section 3. Section 53A-16-101.6 is enacted to read:
             189          53A-16-101.6. Creation of School Children's Trust Section -- Duties.
             190          (1) As used in this section:
             191          (a) "School and institutional trust lands" is as defined in Section 53C-1-103 .
             192          (b) "Section" means the School Children's Trust Section created in this section.
             193          (c) "Trust" means:
             194          (i) the School LAND Trust Program created in Section 53A-16-101.5 ; and
             195          (ii) the lands and funds associated with the trusts described in Subsection
             196      53C-1-103 (7).
             197          (2) There is established a School Children's Trust Section within the State Office of


             198      Education.
             199          (3) (a) The section shall have a director.
             200          (b) The director shall have professional qualifications and expertise in the areas
             201      generating revenue to the trust, including:
             202          (i) economics;
             203          (ii) energy development;
             204          (iii) finance;
             205          (iv) public education;
             206          (v) real estate;
             207          (vi) renewable resources; and
             208          (vii) trust law.
             209          (c) The director shall be appointed as provided in this Subsection (3).
             210          (d) The School and Institutional Trust Lands Board of Trustees nominating committee
             211      shall submit to the State Board of Education the name of one person to serve as director.
             212          (e) The State Board of Education may:
             213          (i) appoint the person described in Subsection (3)(d) to serve as director; or
             214          (ii) deny the appointment of the person described in Subsection (3)(d) to serve as
             215      director.
             216          (f) If the State Board of Education denies an appointment under this Subsection (3):
             217          (i) the State Board of Education shall provide in writing one or more reasons for the
             218      denial to the School and Institutional Trust Lands Board of Trustees nominating committee;
             219      and
             220          (ii) the School and Institutional Trust Lands Board of Trustees nominating committee
             221      and the State Board of Education shall follow the procedures and requirements of this
             222      Subsection (3) until the State Board of Education appoints a director.
             223          (4) The director shall report to the state superintendent or the state superintendent's
             224      designee.
             225          (5) The section shall have a staff.


             226          (6) The section shall protect current and future beneficiary rights and interests in the
             227      trust consistent with the state's perpetual obligations under:
             228          (a) the Utah Enabling Act;
             229          (b) the Utah Constitution;
             230          (c) state statute; and
             231          (d) standard trust principles described in Section 53C-1-102 .
             232          (7) The section shall promote productive use of school and institutional trust lands.
             233          (8) The section shall provide representation, advocacy, and input:
             234          (a) on behalf of current and future beneficiaries of the trust, school community
             235      councils, schools, and school districts;
             236          (b) on federal, state, and local land decisions and policies that affect the trust; and
             237          (c) to:
             238          (i) the School and Institutional Trust Lands Administration;
             239          (ii) the School and Institutional Trust Lands Board of Trustees;
             240          (iii) the Legislature;
             241          (iv) the state treasurer;
             242          (v) the attorney general;
             243          (vi) the public; and
             244          (vii) other entities as determined by the section.
             245          (9) The section shall provide independent oversight on the prudent and profitable
             246      management of the trust and report annually to the State Board of Education and the
             247      Legislature.
             248          (10) The section shall provide information requested by a person or entity described in
             249      Subsections (8)(c)(i) through (v).
             250          Section 4. Section 53C-1-103 is amended to read:
             251           53C-1-103. Definitions.
             252          As used in this title:
             253          (1) "Administration" means the School and Institutional Trust Lands Administration.


             254          (2) "Board" or "board of trustees" means the School and Institutional Trust Lands
             255      Board of Trustees.
             256          (3) "Director" or "director of school and institutional trust lands" means the chief
             257      executive officer of the School and Institutional Trust Lands Administration.
             258          (4) "Mineral" includes oil, gas, and hydrocarbons.
             259          (5) "Nominating committee" means the committee that nominates candidates for
             260      positions and vacancies on the board.
             261          (6) "Policies" means statements applying to the administration that broadly prescribe a
             262      future course of action and guiding principles.
             263          (7) "Primary beneficiary representative" means the State Board of Education acting as
             264      representative on behalf of the following trusts:
             265          (a) the trust established for common schools;
             266          (b) the trust established for schools for the blind; and
             267          (c) the trust established for schools for the deaf.
             268          [(7)] (8) "School and institutional trust lands" or "trust lands" means those properties
             269      granted by the United States in the Utah Enabling Act to the state in trust, and other lands
             270      transferred to the trust, which must be managed for the benefit of:
             271          (a) the state's public education system; or
             272          (b) the institutions of the state which are designated by the Utah Enabling Act as
             273      beneficiaries of trust lands.
             274          Section 5. Section 53C-1-203 is amended to read:
             275           53C-1-203. Board of trustees nominating committee -- Composition --
             276      Responsibilities -- Per diem and expenses.
             277          (1) There is established an 11 member board of trustees nominating committee.
             278          (2) (a) The State Board of Education shall appoint five members to the nominating
             279      committee from different geographical areas of the state.
             280          (b) The governor shall appoint five members to the nominating committee on or before
             281      the December 1 of the year preceding the vacancy on the nominating committee as follows:


             282          (i) one individual from a nomination list of at least two names of individuals
             283      knowledgeable about institutional trust lands submitted on or before the October 1 of the year
             284      preceding the vacancy on the nominating committee by the University of Utah and Utah State
             285      University on an alternating basis every four years;
             286          (ii) one individual from a nomination list of at least two names submitted by the
             287      [livestock industry] Utah Farm Bureau in consultation with the Utah Cattleman's Association
             288      and the Utah Wool Growers' Association on or before the October 1 of the year preceding the
             289      vacancy on the nominating committee;
             290          (iii) one individual from a nomination list of at least two names submitted by the Utah
             291      Petroleum Association on or before the October 1 of the year preceding the vacancy on the
             292      nominating committee;
             293          (iv) one individual from a nomination list of at least two names submitted by the Utah
             294      Mining Association on or before the October 1 of the year preceding the vacancy on the
             295      nominating committee; and
             296          (v) one individual from a nomination list of at least two names submitted by the
             297      executive director of the Department of Natural Resources after consultation with statewide
             298      wildlife and conservation organizations on or before the October 1 of the year preceding the
             299      vacancy on the nominating committee.
             300          (c) The president of the Utah Association of Counties shall designate the chair of the
             301      Public Lands Steering Committee, who must be an elected county commissioner or councilor,
             302      to serve as the eleventh member of the nominating committee.
             303          (3) (a) Except as required by Subsection (3)(b), each member shall serve a four-year
             304      term.
             305          (b) Notwithstanding the requirements of Subsection (3)(a), the state board and the
             306      governor shall, at the time of appointment or reappointment, adjust the length of terms to
             307      ensure that the terms of committee members are staggered so that approximately half of the
             308      committee is appointed every two years.
             309          (c) When a vacancy occurs in the membership for any reason, the replacement shall be


             310      appointed for the unexpired term.
             311          (4) The nominating committee shall select a chair and vice chair from its membership
             312      by majority vote.
             313          (5) (a) The nominating committee shall nominate at least two candidates for each
             314      position or vacancy which occurs on the board of trustees except for the governor's appointee
             315      under Subsection 53C-1-202 (5).
             316          (b) The nominations shall be by majority vote of the committee.
             317          (6) A member may not receive compensation or benefits for the member's service, but
             318      may receive per diem and travel expenses in accordance with:
             319          (a) Section 63A-3-106 ;
             320          (b) Section 63A-3-107 ; and
             321          (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
             322      63A-3-107 .
             323          Section 6. Section 53C-1-303 is amended to read:
             324           53C-1-303. Responsibilities of director -- Budget review -- Legal counsel --
             325      Contract for services.
             326          (1) In carrying out the policies of the board of trustees and in establishing procedures
             327      and rules the director shall:
             328          (a) take an oath of office before assuming any duties as the director;
             329          (b) adopt procedures and rules necessary for the proper administration of matters
             330      entrusted to the director by state law and board policy;
             331          (c) submit to the board for its review and concurrence on any rules necessary for the
             332      proper management of matters entrusted to the administration;
             333          (d) faithfully manage the administration under the policies established by the board;
             334          (e) submit to the board for public inspection an annual management budget and
             335      financial plan for operations of the administration and, after approval by the board, submit the
             336      budget to the governor;
             337          (f) direct and control the budget expenditures as finally authorized and appropriated;


             338          (g) establish job descriptions and employ, within the limitation of the budget, staff
             339      necessary to accomplish the purposes of the office subject to Section 53C-1-201 ;
             340          (h) establish, in accordance with generally accepted principles of fund accounting, a
             341      system to identify and account for the assets and vested interests of each beneficiary;
             342          (i) notify the primary beneficiary representative's designee regarding the trusts listed in
             343      Subsection 53C-1-103 (7) on major items that the director knows may be useful to the primary
             344      beneficiary representative's designee in protecting beneficiary rights;
             345          (j) permit the primary beneficiary representative's designee regarding a trust listed in
             346      Subsection 53C-1-103 (7) reasonable access to inspect records, documents, and other trust
             347      property pertaining to that trust, provided that the primary beneficiary representative's designee
             348      shall maintain confidentiality if confidentiality is required of the director;
             349          [(i)] (k) maintain appropriate records of trust activities to enable auditors appointed by
             350      appropriate state agencies or the board to conduct periodic audits of trust activities;
             351          [(j)] (l) provide that all leases, contracts, and agreements be submitted to legal counsel
             352      for review of compliance with applicable law and fiduciary duties prior to execution and utilize
             353      the services of the attorney general as provided in Section 53C-1-305 ;
             354          [(k)] (m) keep the board, beneficiaries, governor, Legislature, and the public informed
             355      about the work of the director and administration by reporting to the board in a public meeting
             356      at least once during each calendar quarter; and
             357          [(l)] (n) respond in writing within a reasonable time to a request by the board or the
             358      primary beneficiary representative's designee regarding a trust listed in Subsection
             359      53C-1-103 (7) for responses to questions on policies and practices affecting the management of
             360      the trust.
             361          (2) The administration shall be the named party in substitution of the Division of State
             362      Lands and Forestry or its predecessor agencies, with respect to all documents affecting trust
             363      lands from the effective date of this act.
             364          (3) The director may:
             365          (a) with the consent of the state risk manager and the board, manage lands or interests


             366      in lands held by any other public or private party pursuant to policies established by the board
             367      and may make rules to implement these board policies;
             368          (b) sue or be sued as the director of school and institutional trust lands;
             369          (c) contract with other public agencies for personnel management services;
             370          (d) contract with any public or private entity to make improvements to or upon trust
             371      lands and to carry out any of the responsibilities of the office, so long as the contract requires
             372      strict adherence to trust management principles, applicable law and regulation, and is subject to
             373      immediate suspension or termination for cause; and
             374          (e) with the approval of the board enter into joint ventures and other business
             375      arrangements consistent with the purposes of the trust.
             376          (4) Any application or bid required for the lease, permitting, or sale of lands in a
             377      competitive process or any request for review pursuant to Section 53C-1-304 shall be
             378      considered filed or made on the date received by the appropriate administrative office, whether
             379      transmitted by United States mail or in any other manner.


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