1
2
3
4
5
6
7
8 LONG TITLE
9 General Description:
10 This bill amends provisions regarding the School Children's Trust Section under the
11 State Board of Education.
12 Highlighted Provisions:
13 This bill:
14 ▸ creates the beneficiary advocate under the State Board of Education:
15 • shall take an oath of office as specified;
16 • shall serve for a term of four years;
17 • may serve multiple terms; and
18 • is exempt from the Utah State Personnel Management Act;
19 ▸ amends the reasons for which the State Board of Education may remove the
20 beneficiary advocate; and
21 ▸ requires the School Children's Trust Section to annually:
22 • review distribution recipient's compliance with applicable laws and rules; and
23 • report any findings to the appropriate governing bodies.
24 Money Appropriated in this Bill:
25 None
26 Other Special Clauses:
27 None
28 Utah Code Sections Affected:
29 AMENDS:
30 53A-16-101.6 (Superseded 07/01/17), as last amended by Laws of Utah 2016, Chapter
31 144
32 53A-16-101.6 (Effective 07/01/17), as last amended by Laws of Utah 2016, Chapters
33 144 and 172
34 53C-1-103, as last amended by Laws of Utah 2012, Chapter 224
35 53D-1-102, as last amended by Laws of Utah 2016, Chapter 144
36 53D-1-202, as enacted by Laws of Utah 2014, Chapter 426
37 53D-1-304, as enacted by Laws of Utah 2014, Chapter 426
38 53D-1-403, as last amended by Laws of Utah 2015, Chapter 276
39 53D-1-501, as enacted by Laws of Utah 2014, Chapter 426
40
41 Be it enacted by the Legislature of the state of Utah:
42 Section 1. Section 53A-16-101.6 (Superseded 07/01/17) is amended to read:
43 53A-16-101.6 (Superseded 07/01/17). Creation of School Children's Trust Section
44 -- Duties.
45 (1) As used in this section:
46 (a) "Beneficiary advocate" means the individual, as an independent employee, who
47 shall fulfill the duties prescribed in this section to the trust land beneficiaries as the primary
48 beneficiary representative set forth in Section 53C-1-103(7).
49 (b) "Board" means the Sate Board of Education.
50 [
51 [
52 [
53 (i) the School LAND Trust Program created in Section 53A-16-101.5; and
54 (ii) the lands and funds associated with the trusts described in Subsection
55 53C-1-103(7).
56 (2) There is established a School Children's Trust Section under the [
57
58 [
59 (3) (a) There is created an independent beneficiary advocate who shall:
60 (i) act in a fiduciary capacity to the trust and to the trust beneficiaries in accordance
61 with the principles set forth in Section 53C-1-102; and
62 (ii) take an oath of office before assuming the position of beneficiary advocate as
63 follows: "I solemnly swear to carry out my duties as beneficiary advocate with undivided
64 loyalty to the beneficiaries, to the best of my abilities and according to law."
65 (b) The [
66 expertise in the areas generating revenue to the trust, including:
67 (i) economics;
68 (ii) energy and mineral development;
69 (iii) finance;
70 (iv) investments;
71 (v) public education;
72 (vi) real estate;
73 (vii) renewable resources;
74 (viii) risk management; and
75 (ix) trust law.
76 (c) (i) The [
77 (A) be appointed as provided in this Subsection (3)[
78 (B) except as provided in Subsection (3)(c)(ii), serve for a term of four years.
79 (ii) The four-year term of an individual who is the beneficiary advocate on July 1,
80 2017, shall expire on July 1, 2021, unless a vacancy occurs.
81 (iii) The beneficiary advocate may serve more than one term.
82 (iv) The beneficiary advocate shall notify the board whether the beneficiary advocate is
83 willing to be considered for reappointment to another term no later than four months before the
84 end of the current term.
85 (v) The board shall announce whether the beneficiary advocate is reappointed for
86 another term no later than three months before the end of the current term.
87 (d) [
88 and Institutional Trust Lands Board of Trustees nominating committee shall submit to the
89 [
90 beneficiary advocate.
91 (e) The [
92 (i) appoint the [
93 beneficiary advocate; or
94 (ii) deny the appointment of the [
95 serve as [
96 (f) If the [
97 (3):
98 (i) the [
99 for the denial to the School and Institutional Trust Lands Board of Trustees nominating
100 committee; and
101 (ii) the School and Institutional Trust Lands Board of Trustees nominating committee
102 and the [
103 Subsection (3) until the [
104 advocate.
105 (g) (i) The [
106 advocate only:
107 (A) by majority vote [
108 meeting after proper notice and the inclusion of the removal item on the agenda[
109 (B) for neglect of fiduciary duty, malfeasance, gross negligence, incapacitation, or
110 insubordination for the failure to follow the rules, policies, and directives of the board for the
111 proper administration of the School Land Trust Program.
112 (ii) The termination of an individual under this Subsection (3)(g) is effective
113 immediately and creates a vacancy in the position of the beneficiary advocate.
114 (h) The position of beneficiary advocate is exempt from the career service provisions
115 of Title 67, Chapter 19, Utah State Personnel Management Act.
116 (4) The [
117 (a) regular reporting from the [
118 advocate to the [
119 board to fulfill its duties in also representing the trust beneficiaries; and
120 (b) the day-to-day reporting of the [
121 beneficiary advocate.
122 (5) (a) The [
123 budget to the [
124 (b) After approving a section budget, the [
125 annually:
126 (i) receive input on the beneficiary advocate's performance from the chair of the board
127 and director of:
128 (A) the School and Institutional Trust Lands Administration; and
129 (B) the School and Institutional Trust Fund Office;
130 (ii) establish the range and compensation of the beneficiary advocate in line with
131 comparable positions in state government, the responsibilities of the position, and the
132 qualifications required in Subsection (3)(b);
133 (iii) report the beneficiary advocate's compensation to the Public Education
134 Appropriations Subcommittee; and
135 (iv) propose the approved budget to the Legislature.
136 (6) The [
137 discussion, meeting, or other gathering concerning the trust, subject to:
138 (a) provisions of law prohibiting the [
139 preserve confidentiality; or
140 (b) other provisions of law that the [
141 violate.
142 (7) The section shall have a staff.
143 (8) The [
144 rights and interests in the trust consistent with the state's perpetual obligations under:
145 (a) the Utah Enabling Act;
146 (b) the Utah Constitution;
147 (c) state statute; and
148 (d) standard trust principles described in Section 53C-1-102.
149 (9) The [
150 (a) productive use of school and institutional trust lands for the financial support of the
151 trust beneficiaries; and
152 (b) the efficient and prudent investment of funds managed by the School and
153 Institutional Trust Fund Office, created in Section 53D-1-201.
154 (10) The [
155 input:
156 (a) on behalf of current and future beneficiaries of the trust, school community
157 councils, schools, and school districts;
158 (b) on federal, state, and local land decisions and policies that affect the trust; and
159 (c) to:
160 (i) the School and Institutional Trust Lands Administration;
161 (ii) the School and Institutional Trust Lands Board of Trustees;
162 (iii) the Legislature;
163 (iv) the School and Institutional Trust Fund Office, created in Section 53D-1-201;
164 (v) the School and Institutional Trust Fund Board of Trustees, created in Section
165 53D-1-301;
166 (vi) the attorney general;
167 (vii) the public; and
168 (viii) other entities as determined by the section.
169 (11) The [
170 prudent and profitable management of the trust and report annually to the [
171
172 (12) The [
173 person or entity described in Subsections (10)(c)(i) through (vii).
174 (13) (a) The section shall provide training to the entities described in Subsection
175 (13)(b) on:
176 (i) the School LAND Trust Program established in Section 53A-16-101.5; and
177 (ii) (A) a school community council established pursuant to Section 53A-1a-108; or
178 (B) a charter trust land council established under Section 53A-16-101.5.
179 (b) The section shall provide the training to:
180 (i) a local school board or a charter school governing board;
181 (ii) a school district or a charter school; and
182 (iii) a school community council.
183 (14) The section shall annually:
184 (a) review K-12 trust distribution recipient's compliance with applicable law, including
185 applicable rules, policies, and directives adopted by the board; and
186 (b) report findings to the board and other appropriate governing bodies, including:
187 (i) the School and Institutional Trust Lands Administration created in Section
188 53C-1-201 and the School and Institutional Trust Lands Board of Trustees established in
189 Section 53C-1-202;
190 (ii) the School and Institutional Trust Fund Office created in Section 53D-1-201 and
191 the School and Institutional Trust Fund Board of Trustees created in Section 53D-1-301; and
192 (iii) other designated representatives and organizations of trust beneficiaries of school
193 and institutional trust lands.
194 Section 2. Section 53A-16-101.6 (Effective 07/01/17) is amended to read:
195 53A-16-101.6 (Effective 07/01/17). Creation of School Children's Trust Section --
196 Duties.
197 (1) As used in this section:
198 (a) "Beneficiary advocate" means the individual, as an independent employee, who
199 shall fulfill the duties prescribed in this section to the trust land beneficiaries as the primary
200 beneficiary representative set forth in Section 53C-1-103(7).
201 (b) "Board" means the State Board of Education.
202 [
203 [
204 [
205 (i) the School LAND Trust Program created in Section 53A-16-101.5; and
206 (ii) the lands and funds associated with the trusts described in Subsection
207 53C-1-103(7).
208 (2) There is established a School Children's Trust Section under the State Board of
209 Education.
210 [
211 (3) (a) There is created an independent beneficiary advocate who shall:
212 (i) act in a fiduciary capacity to the trust and to the trust beneficiaries in accordance
213 with the principles set forth in Section 53C-1-102; and
214 (ii) take an oath of office before assuming the position of beneficiary advocate and as
215 the director as follows: "I solemnly swear to carry out my duties as beneficiary advocate with
216 undivided loyalty to the beneficiaries, to the best of my abilities and according to law."
217 (b) The [
218 expertise in the areas generating revenue to the trust, including:
219 (i) economics;
220 (ii) energy and mineral development;
221 (iii) finance;
222 (iv) investments;
223 (v) public education;
224 (vi) real estate;
225 (vii) renewable resources;
226 (viii) risk management; and
227 (ix) trust law.
228 (c) (i) The [
229 (A) be appointed as provided in this Subsection (3)[
230 (B) except as provided in Subsection (3)(c)(ii), serve for a term of four years.
231 (ii) The four-year term of an individual who is the beneficiary advocate on July 1,
232 2017, shall expire on July 1, 2021, unless a vacancy occurs.
233 (iii) The beneficiary advocate may serve more than one term.
234 (iv) The beneficiary advocate shall notify the board whether the beneficiary advocate is
235 willing to be considered for reappointment to another term no later than four months before the
236 end of the current term.
237 (v) The board shall announce whether the beneficiary advocate is reappointed for
238 another term no later than three months before the end of the current term.
239 (d) [
240 and Institutional Trust Lands Board of Trustees nominating committee shall submit to the
241 [
242 beneficiary advocate.
243 (e) The [
244 (i) appoint the [
245 beneficiary advocate; or
246 (ii) deny the appointment of the [
247 serve as [
248 (f) If the [
249 (3):
250 (i) the [
251 for the denial to the School and Institutional Trust Lands Board of Trustees nominating
252 committee; and
253 (ii) the School and Institutional Trust Lands Board of Trustees nominating committee
254 and the [
255 Subsection (3) until the [
256 advocate.
257 (g) (i) The [
258 advocate only:
259 (A) by majority vote [
260 meeting after proper notice and the inclusion of the removal item on the agenda[
261 (B) for neglect of fiduciary duty, malfeasance, gross negligence, incapacitation or
262 insubordination for the failure to follow the rules, policies and directives of the board for the
263 proper administration of the School Land Trust Program.
264 (ii) The termination of an individual under this Subsection (3)(g) is effective
265 immediately and creates a vacancy in the position of the beneficiary advocate.
266 (h) The position of beneficiary advocate is exempt from the career service provisions
267 of Title 67, Chapter 19, Utah State Personnel Management Act.
268 (4) The [
269 (a) regular reporting from the [
270 advocate to the [
271 board to fulfill its duties in representing the trust beneficiaries; and
272 (b) the day-to-day reporting of the [
273 beneficiary advocate.
274 (5) (a) The [
275 budget to the [
276 (b) After approving a section budget, the [
277 annually:
278 (i) receive input on the beneficiary advocate's performance from the chair of the board
279 and director of:
280 (A) the School and Institutional Trust Lands Administration; and
281 (B) the School and Institutional Trust Fund Office;
282 (ii) establish the range and compensation of the beneficiary advocate in line with
283 comparable positions in state government, the responsibilities of the position, and the
284 qualifications required in Subsection (3)(b);
285 (iii) report the beneficiary advocate's compensation to the Public Education
286 Appropriations Subcommittee; and
287 (iv) propose the approved budget to the Legislature.
288 (6) The director is entitled to attend any presentation, discussion, meeting, or other
289 gathering concerning the trust, subject to:
290 (a) provisions of law prohibiting the [
291 preserve confidentiality; or
292 (b) other provisions of law that the [
293 violate.
294 (7) The section shall have a staff.
295 (8) The [
296 rights and interests in the trust consistent with the state's perpetual obligations under:
297 (a) the Utah Enabling Act;
298 (b) the Utah Constitution;
299 (c) state statute; and
300 (d) standard trust principles described in Section 53C-1-102.
301 (9) The [
302 (a) productive use of school and institutional trust lands for the financial support of the
303 trust beneficiaries; and
304 (b) the efficient and prudent investment of funds managed by the School and
305 Institutional Trust Fund Office, created in Section 53D-1-201.
306 (10) The [
307 input:
308 (a) on behalf of current and future beneficiaries of the trust, school community
309 councils, schools, and school districts;
310 (b) on federal, state, and local land decisions and policies that affect the trust; and
311 (c) to:
312 (i) the School and Institutional Trust Lands Administration;
313 (ii) the School and Institutional Trust Lands Board of Trustees;
314 (iii) the Legislature;
315 (iv) the School and Institutional Trust Fund Office, created in Section 53D-1-201;
316 (v) the School and Institutional Trust Fund Board of Trustees, created in Section
317 53D-1-301;
318 (vi) the attorney general;
319 (vii) the public; and
320 (viii) other entities as determined by the section.
321 (11) The [
322 prudent and profitable management of the trust and report annually to the [
323
324 (12) The [
325 person or entity described in Subsections (10)(c)(i) through (vii).
326 (13) (a) The section shall provide training to the entities described in Subsection
327 (13)(b) on:
328 (i) the School LAND Trust Program established in Section 53A-16-101.5; and
329 (ii) (A) a school community council established pursuant to Section 53A-1a-108; or
330 (B) a charter trust land council established under Section 53A-16-101.5.
331 (b) The section shall provide the training to:
332 (i) a local school board or a charter school governing board;
333 (ii) a school district or a charter school; and
334 (iii) a school community council.
335 (14) The section shall annually:
336 (a) review [
337 law, including applicable rules, policies, and directives adopted by the [
338
339 (b) report findings to the [
340 governing bodies, including:
341 (i) the School and Institutional Trust Lands Administration created in Section
342 53C-1-201 and the School and Institutional Trust Lands Board of Trustees established in
343 Section 53C-1-202;
344 (ii) the School and Institutional Trust Fund Office created in Section 53D-1-201 and
345 the School and Institutional Trust Fund Board of Trustees created in Section 53D-1-301; and
346 (iii) other designated representatives and organizations of trust beneficiaries of school
347 and institutional trust lands.
348 Section 3. Section 53C-1-103 is amended to read:
349 53C-1-103. Definitions.
350 As used in this title:
351 (1) "Administration" means the School and Institutional Trust Lands Administration.
352 (2) "Board" or "board of trustees" means the School and Institutional Trust Lands
353 Board of Trustees.
354 (3) "Director" or "director of school and institutional trust lands" means the chief
355 executive officer of the School and Institutional Trust Lands Administration.
356 (4) "Mineral" includes oil, gas, and hydrocarbons.
357 (5) "Nominating committee" means the committee that nominates candidates for
358 positions and vacancies on the board.
359 (6) "Policies" means statements applying to the administration that broadly prescribe a
360 future course of action and guiding principles.
361 (7) "Primary beneficiary representative" means the beneficiary advocate appointed by
362 the State Board of Education acting with undivided loyalty consistent with the fiduciary duties
363 and principles set forth in Section 53C-1-102 for the financial support of and as representative
364 on behalf of the following trusts:
365 (a) the trust established for common schools;
366 (b) the trust established for schools for the blind; and
367 (c) the trust established for schools for the deaf.
368 (8) "School and institutional trust lands" or "trust lands" means those properties
369 granted by the United States in the Utah Enabling Act to the state in trust, and other lands
370 transferred to the trust, which must be managed for the benefit of:
371 (a) the state's public education system; or
372 (b) the institutions of the state which are designated by the Utah Enabling Act as
373 beneficiaries of trust lands.
374 (9) The director of the School and Institutional Trust Lands Administration shall use
375 best efforts to provide independent and separate space for the beneficiary advocate created in
376 Section 53A-16-101.6, with costs charged to the section for the use of the facilities equal to
377 those charged to divisions in the administration.
378 Section 4. Section 53D-1-102 is amended to read:
379 53D-1-102. Definitions.
380 (1) "Account" means the School and Institutional Trust Fund Management Account,
381 created in Section 53D-1-203.
382 (2) "Beneficiaries":
383 (a) means those for whose benefit the trust fund is managed and preserved, consistent
384 with the enabling act, the Utah Constitution, and state law; and
385 (b) does not include other government institutions or agencies, the public at large, or
386 the general welfare of the state.
387 (3) "Beneficiary advocate" means the same as that term is defined in Section
388 53A-16-101.6.
389 [
390 [
391 [
392 people of Utah to form a constitution and state government and to be admitted into the Union.
393 [
394 53D-1-501.
395 [
396 Section 53D-1-201.
397 [
398 under the State Board of Education, established in Section 53A-16-101.6.
399 [
400 (a) the sale or use of land granted to the state under Sections 6, 8, and 12 of the
401 enabling act;
402 (b) proceeds referred to in Section 9 of the enabling act from the sale of public land;
403 and
404 (c) revenue and assets referred to in Utah Constitution, Article X, Section 5,
405 Subsections (1)(c), (e), and (f).
406 Section 5. Section 53D-1-202 is amended to read:
407 53D-1-202. Access to office records and personnel.
408 (1) The office shall provide board members and the [
409
410 board members and the [
411 fulfill their responsibilities to ensure that the office is in full compliance with applicable law
412 and policies.
413 (2) If the director requires, board members and the [
414
415 from office records and personnel.
416 Section 6. Section 53D-1-304 is amended to read:
417 53D-1-304. Board meetings.
418 (1) The board shall hold at least nine meetings per year to conduct business.
419 (2) The board chair or two board members:
420 (a) may call a board meeting; and
421 (b) if calling a board meeting, shall provide as much advance notice as is reasonable
422 under the circumstances to all board members, the director, and the [
423
424 (3) Any board member may place an item on a board meeting agenda.
425 (4) The board shall annually adopt a set of parliamentary procedures to govern board
426 meetings.
427 (5) The board may establish an attendance policy to govern the attendance of board
428 members at board meetings.
429 Section 7. Section 53D-1-403 is amended to read:
430 53D-1-403. Reports.
431 (1) At least annually, the director shall report in person to the Legislative Management
432 Committee, the governor, and the State Board of Education, concerning the office's
433 investments, performance, estimated distributions, and other activities.
434 (2) The director shall report to the board concerning the work of the director and the
435 investment activities and other activities of the office:
436 (a) in a public meeting at least nine times per year; and
437 (b) as otherwise requested by the board.
438 (3) (a) Before November 1 of each year, the director shall:
439 (i) submit a written report to school community councils, created under Section
440 53A-1a-108, and charter trust land councils, established under Section 53A-16-101.5
441 concerning the office's investments, performance, estimated distributions, and other activities;
442 and
443 (ii) post the written report described in Subsection (3)(a)(i) on the office's website.
444 (b) A report under Subsection (3)(a) shall be prepared in simple language designed to
445 be understood by the general public.
446 (4) The director shall provide to the board:
447 (a) monthly written reports on the activities of the office;
448 (b) quarterly financial reports; and
449 (c) any other report requested by the board.
450 (5) The director shall:
451 (a) invite the [
452 attend any meeting at which the director gives a report under this section; and
453 (b) provide the [
454 (i) a copy of any written report prepared under this section; and
455 (ii) any other report requested by the [
456 beneficiary advocate.
457 Section 8. Section 53D-1-501 is amended to read:
458 53D-1-501. Nominating committee -- Membership -- Terms -- Vacancies --
459 Compensation.
460 (1) There is established a School and Institutional Trust Fund Nominating Committee.
461 (2) The nominating committee consists of:
462 (a) two members appointed by the State Board of Education;
463 (b) two members, appointed by the [
464 beneficiary advocate, each of whom is a member of a respected professional organization;
465 (c) the chief investment officer of the University of Utah endowment;
466 (d) the chief investment officer of the Utah State University endowment; and
467 (e) the director of the school children's trust section.
468 (3) An individual appointed as a member of the nominating committee under
469 Subsection (2)(a) or (b) shall be appointed based on the individual's expertise in:
470 (a) investment finance;
471 (b) institutional asset management;
472 (c) trust administration; or
473 (d) the practice of law in the areas of capital markets, securities law, trusts,
474 foundations, endowments, investment finance, institutional asset management, or trust
475 administration.
476 (4) The term of a member appointed under Subsection (2)(a) or (b) is four years, except
477 that the initial term of members appointed under Subsection (2)(b) is two years.
478 (5) A nominating committee member shall serve until a successor is appointed and
479 qualified.
480 (6) (a) If a member appointed under Subsection (2)(a) or (b) leaves office, the vacancy
481 shall be filled in the same manner as the initial appointment under Subsection (2)(a) or (b).
482 (b) An individual appointed to fill a vacancy under Subsection (6)(a) serves the
483 remainder of the unexpired term.
484 (7) A member of the nominating committee may not receive compensation or benefits
485 for the member's service, but may receive per diem and travel expenses in accordance with:
486 (a) Section 63A-3-106;
487 (b) Section 63A-3-107; and
488 (c) rules made by the Division of Finance pursuant to Sections 63A-3-106 and
489 63A-3-107.