H.B. 106 Enrolled

TRUST LANDS ACT AMENDMENTS
1997 GENERAL SESSION
STATE OF UTAH
Sponsor: Byron L. Harward
AN ACT RELATING TO SCHOOL AND INSTITUTIONAL TRUST LANDS; ALLOWING
THE TRUST LANDS BOARD TO CREATE AN ANNUAL INCENTIVE AND BONUS
PLAN FOR ADMINISTRATION EMPLOYEES; PROVIDING THAT THE
ADMINISTRATION MAY BECOME A MEMBER OF A LIMITED LIABILITY
COMPANY IN CONNECTION WITH JOINT VENTURES FOR THE DEVELOPMENT
OF TRUST LANDS AND MINERALS; PROVIDING THAT PROCEDURES AND
RULES SHALL BE BROADLY CONSTRUED TO GRANT THE TRUST LANDS
BOARD, DIRECTOR, AND ADMINISTRATION DISCRETIONARY AUTHORITY TO
MANAGE AND DISPOSE OF TRUST ASSETS IN A MANNER CONSIDERED MOST
FAVORABLE TO BENEFICIARIES; AND MAKING CERTAIN TECHNICAL
CHANGES.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
53C-1-201, as last amended by Chapter 60, Laws of Utah 1996
53C-1-302, as last amended by Chapter 103, Laws of Utah 1996
53C-1-303, as last amended by Chapter 299, Laws of Utah 1995
53C-4-101, as enacted by Chapter 294, Laws of Utah 1994
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 53C-1-201 is amended to read:
53C-1-201. Creation of administration -- Purpose -- Director.
(1) (a) There is established within state government the School and Institutional Trust
Lands Administration.
(b) The administration shall manage all school and institutional trust lands and assets
within the state, except as otherwise provided in Chapter 3 of this title and Section 51-7-12.
(2) The administration is an independent state agency and not a division of any other

department.
(3) (a) It is subject to the usual legislative and executive department controls except as
follows:
(i) (A) the director may make rules as approved by the board that allow the administration
to classify a business proposal submitted to the administration as protected under Section 63-2-304,
for as long as is necessary to evaluate the proposals;
(B) the administration shall return the proposal to the party who submitted the proposal, and
incur no further duties under Title 63, Chapter 2, Government Records Access and Management Act,
if the administration determines not to proceed with the proposal;
(C) the administration shall classify the proposal pursuant to law if it decides to proceed with
the proposal; and
(D) Section 63-2-403 does not apply during the review period;
(ii) the director shall make rules in compliance with Title 63, Chapter 46a, Utah
Administrative Rulemaking Act, except that the director, with the board's approval, may establish
a procedure for the expedited approval of rules, based on written findings by the director showing:
(A) the changes in business opportunities affecting the assets of the trust;
(B) the specific business opportunity arising out of those changes which may be lost without
the rule or changes to the rule;
(C) the reasons the normal procedures under Section [63A-46a-4] 63-46a-4 cannot be met
without causing the loss of the specific opportunity;
(D) approval by at least five board members; and
(E) that the director has filed a copy of the rule and a rule analysis, stating the specific
reasons and justifications for its findings, with the Division of Administrative Rules and notified
interested parties as provided in Subsection 63-46a-4(4); and
(iii) the administration shall comply with Title 67, Chapter 19, Utah State Personnel
Management Act, except [where] as follows:
(A) the board [approves] may approve, upon recommendation of the director, that exemption
for specific positions under Subsections 67-19-12(2) and 67-19-15(1) is required in order to enable

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the administration to efficiently fulfill its responsibilities under the law. The director shall consult
with the director of the Department of Human Resource Management prior to making such a
recommendation. The positions of director, deputy director, assistant director, legal counsel
appointed under Subsection 53C-1-305(2), administrative assistant, and public affairs officer are
exempt under Subsections 67-19-12(2) and 67-19-15(1)[. Salary];
(B) salary for exempted positions, except for the director, shall be set by the director, after
consultation with the director of the Department of Human Resource Management, within ranges
approved by the board. The board and director shall consider salaries for similar positions in private
enterprise and other public employment when setting salary ranges; and
(C) the board may create an annual incentive and bonus plan for the director and other
administration employees designated by the board, based upon the attainment of financial
performance goals and other measurable criteria defined and budgeted in advance by the board; and
(iv) the administration shall comply with Title 63, Chapter 56, Utah Procurement Code,
except where the board approves, upon recommendation of the director, exemption under Section
63-56-3 and simultaneous adoption of policies for procurement, which enable the administration to
efficiently fulfill its responsibilities under the law.
(b) (i) The board and director shall review the exceptions under Subsection (3)(a) and make
recommendations for any modification, if required, which the Legislature would be asked to consider
during its annual General Session.
(ii) The board and director may include in their recommendations any other proposed
exceptions from the usual executive and legislative controls the board and director consider
necessary to accomplish the purpose of this title.
(4) The administration is managed by a director of school and institutional trust lands
appointed by a majority vote of the board of trustees with the consent of the governor.
(5) (a) The board of trustees shall provide policies for the management of the administration
and for the management of trust lands and assets.
(b) The board shall provide policies for the ownership and control of Native American
remains that are discovered or excavated on school and institutional trust lands in consultation with

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the Division of Indian Affairs and giving due consideration to Title 9, Chapter 9, Part 4, Native
American Graves Protection and Repatriation Act.
(6) In connection with joint ventures for the development of trust lands and minerals
approved by the board under Subsection 53C-1-303(4)(c), the administration may become a member
of a limited liability company under Title 48, Chapter 2b, Utah Limited Liability Company Act, and
is considered a person under Subsection 48-2b-102(6) for such purposes.
Section 2. Section 53C-1-302 is amended to read:
53C-1-302. Management of the administration -- Trust responsibilities.
(1) (a) The director has broad authority to:
(i) manage the School and Institutional Trust Lands Administration in fulfillment of its
purpose; and
(ii) establish fees, procedures, and rules [for the day-to-day management of the
administration] consistent with general policies prescribed by the board of trustees.
(b) The procedures and rules shall:
(i) be consistent with the Utah Enabling Act, the Utah Constitution, and policies of the
board;
(ii) reflect undivided loyalty to the beneficiaries consistent with the director's fiduciary
duties and responsibilities; [and]
(iii) subject to Subsection (2), obtain the optimum values from use of trust lands and
revenues for the trust beneficiaries, including the return of not less than fair market value for the use,
sale, or exchange of school and institutional trust assets[.]; and
(iv) be broadly construed to grant the board, director, and administration full discretionary
authority to manage, maintain, or dispose of trust assets in the manner they consider most favorable
to the beneficiaries.
(2) The director shall seek to optimize trust land revenues consistent with the balancing of
short and long-term interests, so that long-term benefits are not lost in an effort to maximize
short-term gains.
(3) The director shall maintain the integrity of the trust and prevent, through prudent

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management, the misapplication of its lands and revenues.
Section 3. Section 53C-1-303 is amended to read:
53C-1-303. Responsibilities of director -- Budget review -- Establishment of advisory
committees -- Legal counsel -- Contract for services.
(1) In carrying out the policies of the board of trustees and in establishing [the] procedures
and rules [for day-to-day management] the director shall:
(a) take an oath of office before assuming any duties as the director;
(b) adopt procedures and rules necessary for the proper administration of matters entrusted
to the director by state law and board policy;
(c) submit to the board for its review and concurrence on any rules necessary for the proper
management of matters entrusted to the administration;
(d) faithfully manage the administration under the policies established by the board;
(e) submit to the board and for public inspection by October 1 of each year, an annual
management budget and financial plan for operations of the administration and, after approval by
the board, submit the budget to the governor;
(f) direct and control the budget expenditures as finally authorized and appropriated;
(g) establish job descriptions and employ, within the limitation of the budget, staff necessary
to accomplish the purposes of the office subject to Section 53C-1-201;
(h) establish, in accordance with generally accepted principles of fund accounting, a system
to identify and account for the assets and vested interests of each beneficiary;
(i) maintain appropriate records of trust activities to enable auditors appointed by appropriate
state agencies or the board to conduct periodic audits of trust activities;
(j) provide that all leases, contracts, and agreements be submitted to legal counsel for review
of compliance with applicable law and fiduciary duties prior to execution and utilize the services of
the attorney general as provided in Section 53C-1-305;
(k) keep the board, beneficiaries, governor, Legislature, and the public informed about the
work of the director and administration by reporting to the board in a public meeting at least once
during each calendar quarter; and

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(l) respond in writing within a reasonable time to a request by the board for responses to
questions on policies and practices affecting the management of the trust.
(2) Procedures and rules adopted by the Division of State Lands and Forestry as they relate
to trust lands prior to the effective date of this act remain in effect until amended or repealed by the
director.
(3) The administration shall be the named party in substitution of the Division of State Lands
and Forestry or its predecessor agencies, with respect to all documents affecting trust lands from the
effective date of this act.
(4) The director may:
(a) with the consent of the state risk manager and the board, manage lands or interests in
lands held by any other public or private party pursuant to policies established by the board;
(b) sue or be sued as the director of school and institutional trust lands;
(c) contract with other public agencies for personnel management services;
(d) contract with any public or private entity to make improvements to or upon trust lands
and to carry out any of the responsibilities of the office, so long as the contract requires strict
adherence to trust management principles, applicable law and regulation, and is subject to immediate
suspension or termination for cause; and
(e) with the approval of the board enter into joint ventures and other business arrangements
consistent with the purposes of the trust.
(5) Any application or bid required for the lease, permitting, or sale of lands in a competitive
process or any request for review pursuant to Section 53C-1-304 shall be considered filed or made
on the date received by the appropriate administrative office, whether transmitted by United States
mail or in any other manner.
Section 4. Section 53C-4-101 is amended to read:
53C-4-101. Criteria for sale, lease, exchange, or other disposition of trust lands.
(1) (a) The director shall establish criteria by rule for the sale, exchange, lease, or other
disposition or conveyance of trust lands, including procedures for determining fair market value of
those lands.

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(b) (i) Nothing in this title or in the administration's rules and procedures shall be considered
to require the director or the administration to execute any transaction for the disposition of trust
lands on terms that the director determines by a written finding to be unfavorable to the beneficiaries.
(ii) The director shall send a copy of the written finding to each board member for review
and comment.
(2) The governor pursuant to P.L. 103-93 and in collaboration with the board shall
implement the inholdings land exchange authorized in that public law.
(3) The governor, with the consent of the board, may participate in similar efforts and
initiatives related to school and institutional trust lands inholdings.

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