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5 AN ACT RELATING TO SCHOOL AND INSTITUTIONAL TRUST LANDS; ALLOWING
6 THE TRUST LANDS BOARD TO CREATE AN ANNUAL INCENTIVE AND BONUS
7 PLAN FOR ADMINISTRATION EMPLOYEES; PROVIDING THAT THE
8 ADMINISTRATION MAY BECOME A MEMBER OF A LIMITED LIABILITY COMPANY
9 IN CONNECTION WITH JOINT VENTURES FOR THE DEVELOPMENT OF TRUST
10 LANDS AND MINERALS; PROVIDING THAT PROCEDURES AND RULES SHALL BE
11 BROADLY CONSTRUED TO GRANT THE TRUST LANDS BOARD, DIRECTOR, AND
12 ADMINISTRATION DISCRETIONARY AUTHORITY TO MANAGE AND DISPOSE OF
13 TRUST ASSETS IN A MANNER CONSIDERED MOST FAVORABLE TO
14 BENEFICIARIES; AND MAKING CERTAIN TECHNICAL CHANGES.
15 This act affects sections of Utah Code Annotated 1953 as follows:
17 53C-1-201, as last amended by Chapter 60, Laws of Utah 1996
18 53C-1-302, as last amended by Chapter 103, Laws of Utah 1996
19 53C-1-303, as last amended by Chapter 299, Laws of Utah 1995
20 53C-4-101, as enacted by Chapter 294, Laws of Utah 1994
21 Be it enacted by the Legislature of the state of Utah:
22 Section 1. Section 53C-1-201 is amended to read:
23 53C-1-201. Creation of administration -- Purpose -- Director.
24 (1) (a) There is established within state government the School and Institutional Trust
25 Lands Administration.
26 (b) The administration shall manage all school and institutional trust lands and assets
27 within the state, except as otherwise provided in Chapter 3 of this title and Section 51-7-12.
1 (2) The administration is an independent state agency and not a division of any other
3 (3) (a) It is subject to the usual legislative and executive department controls except as
5 (i) (A) the director may make rules as approved by the board that allow the administration
6 to classify a business proposal submitted to the administration as protected under Section
7 63-2-304, for as long as is necessary to evaluate the proposals;
8 (B) the administration shall return the proposal to the party who submitted the proposal,
9 and incur no further duties under Title 63, Chapter 2, Government Records Access and
10 Management Act, if the administration determines not to proceed with the proposal;
11 (C) the administration shall classify the proposal pursuant to law if it decides to proceed
12 with the proposal; and
13 (D) Section 63-2-403 does not apply during the review period;
14 (ii) the director shall make rules in compliance with Title 63, Chapter 46a, Utah
15 Administrative Rulemaking Act, except that the director, with the board's approval, may establish
16 a procedure for the expedited approval of rules, based on written findings by the director showing:
17 (A) the changes in business opportunities affecting the assets of the trust;
18 (B) the specific business opportunity arising out of those changes which may be lost
19 without the rule or changes to the rule;
20 (C) the reasons the normal procedures under Section [
21 without causing the loss of the specific opportunity;
22 (D) approval by at least five board members; and
23 (E) that the director has filed a copy of the rule and a rule analysis, stating the specific
24 reasons and justifications for its findings, with the Division of Administrative Rules and notified
25 interested parties as provided in Subsection 63-46a-4(4); and
26 (iii) the administration shall comply with Title 67, Chapter 19, Utah State Personnel
27 Management Act, except [
28 (A) the board [
29 exemption for specific positions under Subsections 67-19-12(2) and 67-19-15(1) is required in
30 order to enable the administration to efficiently fulfill its responsibilities under the law. The
31 director shall consult with the director of the Department of Human Resource Management prior
1 to making such a recommendation. The positions of director, deputy director, h ASSISTANT
1a DIRECTOR, h legal counsel
2 appointed under Subsection 53C-1-305(2), administrative assistant, and public affairs officer are
3 exempt under Subsections 67-19-12(2) and 67-19-15(1)[
4 (B) salary for exempted positions, except for the director, shall be set by the director, after
5 consultation with the director of the Department of Human Resource Management, within ranges
6 approved by the board. The board and director shall consider salaries for similar positions in
7 private enterprise and other public employment when setting salary ranges; and
8 (C) the board may create an annual incentive and bonus plan for the director and other
9 administration employees designated by the board, based upon the attainment of financial
10 performance goals and other measurable criteria defined and budgeted in advance by the board;
12 (iv) the administration shall comply with Title 63, Chapter 56, Utah Procurement Code,
13 except where the board approves, upon recommendation of the director, exemption under Section
14 63-56-3 and simultaneous adoption of policies for procurement, which enable the administration
15 to efficiently fulfill its responsibilities under the law.
16 (b) (i) The board and director shall review the exceptions under Subsection (3)(a) and
17 make recommendations for any modification, if required, which the Legislature would be asked
18 to consider during its annual General Session.
19 (ii) The board and director may include in their recommendations any other proposed
20 exceptions from the usual executive and legislative controls the board and director consider
21 necessary to accomplish the purpose of this title.
22 (4) The administration is managed by a director of school and institutional trust lands
23 appointed by a majority vote of the board of trustees with the consent of the governor.
24 (5) (a) The board of trustees shall provide policies for the management of the
25 administration and for the management of trust lands and assets.
26 (b) The board shall provide policies for the ownership and control of Native American
27 remains that are discovered or excavated on school and institutional trust lands in consultation with
28 the Division of Indian Affairs and giving due consideration to Title 9, Chapter 9, Part 4, Native
29 American Graves Protection and Repatriation Act.
30 (6) In connection with joint ventures for the development of trust lands and minerals
31 approved by the board under Subsection 53C-1-303(4)(c), the administration may become a
lilac-February 26, 1997
1 member of a limited liability company under Title 48, Chapter 2b, Utah Limited Liability
2 Company Act, and is considered a person under Subsection 48-2b-102(6) for such purposes.
3 Section 2. Section 53C-1-302 is amended to read:
4 53C-1-302. Management of the administration -- Trust responsibilities.
5 (1) (a) The director has broad authority to:
6 (i) manage the School and Institutional Trust Lands Administration in fulfillment of its
7 purpose; and
8 (ii) establish fees, procedures, and rules [
10 (b) The procedures and rules shall:
11 (i) be consistent with the Utah Enabling Act, the Utah Constitution, and policies of the
13 (ii) reflect undivided loyalty to the beneficiaries consistent with the director's fiduciary
14 duties and responsibilities; [
15 (iii) subject to Subsection (2), obtain the optimum values from use of trust lands and
16 revenues for the trust beneficiaries, including the return of not less than fair market value for the
17 use, sale, or exchange of school and institutional trust assets[
18 (iv) be broadly construed to grant the board, director, and administration full discretionary
19 authority to manage, maintain, or dispose of trust assets in the manner they consider most
20 favorable to the beneficiaries.
21 (2) The director shall seek to optimize trust land revenues consistent with the balancing
22 of short and long-term interests, so that long-term benefits are not lost in an effort to maximize
23 short-term gains.
24 (3) The director shall maintain the integrity of the trust and prevent, through prudent
25 management, the misapplication of its lands and revenues.
26 Section 3. Section 53C-1-303 is amended to read:
27 53C-1-303. Responsibilities of director -- Budget review -- Establishment of advisory
28 committees -- Legal counsel -- Contract for services.
29 (1) In carrying out the policies of the board of trustees and in establishing [
30 and rules [
31 (a) take an oath of office before assuming any duties as the director;
1 (b) adopt procedures and rules necessary for the proper administration of matters entrusted
2 to the director by state law and board policy;
3 (c) submit to the board for its review and concurrence on any rules necessary for the proper
4 management of matters entrusted to the administration;
5 (d) faithfully manage the administration under the policies established by the board;
6 (e) submit to the board and for public inspection by October 1 of each year, an annual
7 management budget and financial plan for operations of the administration and, after approval by
8 the board, submit the budget to the governor;
9 (f) direct and control the budget expenditures as finally authorized and appropriated;
10 (g) establish job descriptions and employ, within the limitation of the budget, staff
11 necessary to accomplish the purposes of the office subject to Section 53C-1-201;
12 (h) establish, in accordance with generally accepted principles of fund accounting, a
13 system to identify and account for the assets and vested interests of each beneficiary;
14 (i) maintain appropriate records of trust activities to enable auditors appointed by
15 appropriate state agencies or the board to conduct periodic audits of trust activities;
16 (j) provide that all leases, contracts, and agreements be submitted to legal counsel for
17 review of compliance with applicable law and fiduciary duties prior to execution and utilize the
18 services of the attorney general as provided in Section 53C-1-305;
19 (k) keep the board, beneficiaries, governor, Legislature, and the public informed about the
20 work of the director and administration by reporting to the board in a public meeting at least once
21 during each calendar quarter; and
22 (l) respond in writing within a reasonable time to a request by the board for responses to
23 questions on policies and practices affecting the management of the trust.
24 (2) Procedures and rules adopted by the Division of State Lands and Forestry as they relate
25 to trust lands prior to the effective date of this act remain in effect until amended or repealed by
26 the director.
27 (3) The administration shall be the named party in substitution of the Division of State
28 Lands and Forestry or its predecessor agencies, with respect to all documents affecting trust lands
29 from the effective date of this act.
30 (4) The director may:
31 (a) with the consent of the state risk manager and the board, manage lands or interests in
1 lands held by any other public or private party pursuant to policies established by the board;
2 (b) sue or be sued as the director of school and institutional trust lands;
3 (c) contract with other public agencies for personnel management services;
4 (d) contract with any public or private entity to make improvements to or upon trust lands
5 and to carry out any of the responsibilities of the office, so long as the contract requires strict
6 adherence to trust management principles, applicable law and regulation, and is subject to
7 immediate suspension or termination for cause; and
8 (e) with the approval of the board enter into joint ventures and other business arrangements
9 consistent with the purposes of the trust.
10 (5) Any application or bid required for the lease, permitting, or sale of lands in a
11 competitive process or any request for review pursuant to Section 53C-1-304 shall be considered
12 filed or made on the date received by the appropriate administrative office, whether transmitted
13 by United States mail or in any other manner.
14 Section 4. Section 53C-4-101 is amended to read:
15 53C-4-101. Criteria for sale, lease, exchange, or other disposition of trust lands.
16 (1) (a) The director shall establish criteria by rule for the sale, exchange, lease, or other
17 disposition or conveyance of trust lands, including procedures for determining fair market value
18 of those lands.
19 (b) (i) Nothing in this title or in the administration's rules and procedures shall be
20 considered to require h [
21 disposition of trust lands on terms that the director determines by a written finding to be
22 unfavorable to the beneficiaries.
23 (ii) The director shall send a copy of the written finding to each board member for review
24 and comment.
25 (2) The governor pursuant to P.L. 103-93 and in collaboration with the board shall
26 implement the inholdings land exchange authorized in that public law.
27 (3) The governor, with the consent of the board, may participate in similar efforts and
28 initiatives related to school and institutional trust lands inholdings.
lilac-February 26, 1997
Legislative Review Note
as of 1-29-97 10:31 AM
A limited legal review of this bill raises no obvious constitutional or statutory concerns.
Office of Legislative Research and General Counsel
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