School Trust Lands - Projects

Canoeing on a misty Minnesota lake

U.S. Forest Service to purchase school trust lands inside the Boundary Waters

School trust lands were granted by the federal government to provide a constant source of funding for public education. Mining and timber harvesting on school trust lands generate the primary financial contributions to the state’s Permanent School Fund. The U.S. Forest Service is proposing to purchase 80,000 acres of School Trust lands within the Boundary Waters Canoe Area Wilderness (BWCAW) that are currently unable to generate revenues for the fund.

The state’s constitutional mandate for managing school trust lands is to ensure their maximum long-term economic return while adhering to sound natural resource conservation and management principles. However, the U.S. Forest Service’s wilderness laws and regulations in the BWCAW limit the State’s ability to manage school trust lands located within the BWCAW to maximize revenue for the Permanent School Fund.

To benefit public education, the Department of Natural Resources (DNR), the Minnesota Office of School Trust Lands (OSTL), and the U.S. Forest Service—Superior National Forest (U.S. Forest Service) are working together to transfer ownership of approximately 80,000 acres of school trust lands located within the BWCAW to federal ownership.
 

Overview

The DNR had previously proposed to exchange school trust lands within the BWCAW for suitable lands outside of the wilderness.  The DNR understands that the U.S. Forest Service received input opposing a land exchange and calling for the state to instead sell school trust lands within the BWCAW to the United States. Under the new proposal, the DNR would initiate the process by removing the school trust land designation from approximately 80,000 acres of state lands within the BWCAW and then selling those lands to the U.S. Forest Service. 

The U.S. Forest Service would use a federal appropriation from the Land and Water Conservation Fund (LWCF) to purchase approximately 80,000 acres of school trust lands in the BWCAW, which spans Cook, Lake, and St. Louis counties. Federal appropriation payments would ensure that the Permanent School Fund is fully compensated for the federal land acquisition.

The proposed federal land acquisition would be an achievement for the Permanent School Fund. The funds from the sale would compensate the Permanent School Fund, which supports 850,000 students in K-12 public education by distributing revenue to every public and charter school in the state.
 

Milestones

The state and federal partners, along with northern Minnesota Tribes and local governments, have been collaborating on the transaction process. The DNR has submitted a land exchange withdrawal letter to proceed with the sale to the U.S. Forest Service. 

The U.S. Forest Service has canceled the Environmental Impact Statement for the original exchange proposal. The cancellation notice will be posted to the Federal Register - opens in a new browser tab - at 8 a.m. on Friday, Jul. 12, 2024. The U.S. Forest Service anticipates initiating scoping of the purchase proposal soon. 

The DNR will soon begin work with OSTL to remove the school trust land designation from state lands within the BWCAW, appraising approximately 80,000 acres for acquisition by the U.S. Forest Service.

The U.S. Forest Service is also moving forward with the acquisition of up to 15,000 acres inside the Forest boundary, which The Conservation Fund (TCF) originally acquired for the exchange proposal. 

The State will consider acquiring private forestlands owned by TCF both within and outside the Forest boundary. The State is evaluating acres of TCF lands in consultation with the U.S. Forest Service, counties, and Tribes to reach an agreement on which parcels would benefit each entity's public land portfolio through acquisition. Funding will be needed for the DNR to purchase TCF lands within and outside the BWCAW.

What are school trust lands?

When Minnesota became a state in 1858, the federal government granted sections 16 and 36 of every township for the use of schools. Today, the DNR manages 2.5 million acres of school trust lands and one million acres of mineral rights on behalf of Minnesota’s public schools. The DNR oversees revenue-generating activities such as mining, mineral exploration leasing, land sales, utility licenses, and timber harvesting while prioritizing economic return, environmental stewardship, and sustainability.

Who benefits from school trust lands?

The Minnesota constitution is clear: beneficiaries of school trust lands are Minnesota’s 329 public school districts and 181 charter schools, currently educating nearly 850,000 K-12 students.

What is the Permanent School Fund?

The Permanent School Fund was established by the Minnesota Constitution to guarantee a long-term source of funds for public education. It is made up of the revenues generated from school trust lands, as well as the interest and dividends. These funds support K-12 public education and are distributed to every public school district within the state.

Why are State school trust lands within the BWCAW being transferred to federal ownership?

The transfer of school trust lands within the BWCAW to federal ownership will benefit Minnesota's public education system. The 1964 Wilderness Act and the 1978 BWCAW Act confined approximately 80,000 acres of school trust lands within the wilderness area, limiting the State’s ability to generate revenue from the lands for the Permanent School Fund.

The transaction aims to uphold Minnesota’s fiduciary responsibility to generate income for the Permanent School Fund and will help to provide a continual source of funding for Minnesota’s K-12 schools. The sale of school trust lands to the U.S. Forest Service at fair market value will generate revenue for the Permanent School Fund. The fund supports 850,000 students by distributing revenue to public and charter schools in the state. The DNR is pleased to work with the U.S. Forest Service to remove the school trust designation from lands from within the BWCAW.

Why is the project a land purchase rather than a land exchange?

The DNR understands that the U.S. Forest Service received input opposing a land exchange and calling for the state to sell school trust lands within the BWCAW to the United States. The current approach, despite being underway for many years, has yet to yield an outcome. The DNR recently withdrew its land exchange proposal, originally submitted to the U.S. Forest Service on August 22, 2012, involving school trust lands within the BWCAW.

Under the new proposal, the DNR would initiate the process by removing the school trust land designation from approximately 80,000 acres of state lands within the BWCAW. Then, the federal government will purchase those lands from the DNR using a federal Land and Water Conservation Fund appropriation. Following the federal acquisition, the DNR will deposit the sale proceeds in the Permanent School Fund for management by the State Board of Investment.

The purchase-only proposal will:  

  • Consolidate federal ownership of lands within the BWCAW through the acquisition of State-owned school trust parcels and outside of the BWCAW through the purchase of TCF-owned lands.
  • Maximize long-term economic return of state school trust.
  • Prevent the fragmentation of former private forestlands by ensuring their long-term conservation.
  • Respect Tribal government requests to refrain from divestiture of any federal property via land exchange.
How many acres of school trust lands are being transferred from State to Federal ownership?

The U.S. Forest Service is proposing to purchase approximately 80,000 acres of school trust lands within the BWCAW, which are located in parts of Minnesota's Cook, Lake, and St. Louis counties.

The school trust lands proposed for purchase include approximately 24,000 acres in Cook County, 25,000 acres in Lake County, and 33,000 acres in St. Louis County.

What will be the direct implications of this land ownership transfer on our local governments?

We anticipate that an increase in federally owned acres would lead to an increase in various federal payments to counties, such as Secure Rural Schools (SRS), Payment in Lieu of Taxes (PILT), and Thye-Blatnik.

Detailed information on future SRS/PILT payments can only be provided after the purchases are finalized and final acreages are determined. School Trust lands acquired by the federal government will be considered in the next Thye-Blatnik appraisal beginning in 2028.

What will happen to the remaining lands that The Conservation Fund purchased as part of the original exchange proposal?

Minnesota has a long-standing partnership with TCF to protect the state’s natural resources. This partnership aims to increase access to nature, preserve wildlife habitat, and improve climate resilience. The DNR and the OSTL appreciate TCF's commitment to protecting and preserving the BWCAW through the acquisition of lands for the original exchange proposal. The state will evaluate the remaining TCF lands in consultation with counties, Tribes, TCF, and the U.S. Forest Service to determine which parcels would benefit each agency’s public land portfolio through acquisition.

When will the land transfer be complete?

The land transfer between the state and the U.S. Forest Service is anticipated to be completed by the end of 2026. This website will be regularly updated with new information about the project timeline.

Will the transferred lands be available for public use and recreation?

The U.S. Forest Service will manage the lands it acquires in accordance with the BWCAW Act and the Forest Plan. The lands will remain open to the public for recreational activities. The public should not expect any change in their access to recreation in Burntside, Insula Lake, and Lake Isabella, and Little Sag Forests within the BWCAW boundary after the federal acquisition.

How can the public learn more about the project?

The DNR’s website will be continually updated with more information on the progress of the land transactions between state and federal partners.

How has the State and the federal government engaged with Tribal Nations in northern Minnesota?

The DNR has mutually respectful and beneficial relationships with federally recognized Indian Tribes, as established by the Constitution of the United States, treaties, statutes, case law, and agreements. DNR leaders have partnered with the U.S. Forest Service throughout this process to consult and collaborate with Fond du Lac, Grand Portage, and Bois Forte.

The U.S. Forest Service is currently consulting with Tribes in northern Minnesota During a February consultation, the U.S. Forest Service informed the Bands that they would not proceed with the land exchange with the state but would move forward with purchases of state land and certain TCF lands inside the forest boundary. The Tribes requested continued engagement with the school trust land project.

Resources

Contact

DNR Lands and Minerals Division
St. Paul, MN
651-296-6157 or 888-646-6367

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