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H0643aa....................................................by STATE AFFAIRS
ENDOWMENT FUNDS - Amends, repeals and adds to existing law to establish a
permanent endowment fund, earnings reserve fund and income fund for each of
the nine state endowments; to provide the contents and operation of each
fund; to provide for protection of and payment to beneficiaries; to provide
that the Endowment Fund Investment Board shall be within the State Board of
Land Commissioners; to provide for the make up and operation of the
Investment Board, including investment as a trustee; to provide for
operation of the Land Board regarding the Investment Board and the
permanent endowment funds, earnings reserve funds and income funds; to
establish a Land Bank Fund and to provide the contents and operation of
that fund.
02/09 House intro - 1st rdg - to printing
02/10 Rpt prt - to St Aff
02/20 Rpt out - rec d/p - to 2nd rdg
02/23 2nd rdg - to 3rd rdg
02/25 To Gen Ord
02/26 Rpt out amen - to engros
02/27 Rpt engros - 1st rdg - to 2nd rdg as amen
03/02 2nd rdg - to 3rd rdg as amen
03/05 3rd rdg as amen - Held
03/06 3rd rdg as amen - PASSED - 53-14-3
AYES -- Alltus, Barraclough, Bieter, Bivens, Black(15), Boe, Bruneel,
Callister, Campbell, Chase, Crane, Crow, Deal, Ellsworth, Field(13),
Gagner, Gould, Hadley, Hansen, Henbest, Hornbeck, Jaquet, Jones(9),
Jones(22), Judd, Kellogg, Kempton, Kendell, Kjellander, Kunz, Lake,
Linford, Mader, Marley, McKague, Meyer, Miller, Mortensen, Newcomb,
Pischner, Pomeroy, Reynolds, Richman, Ridinger, Robison, Stone,
Tilman, Tippets, Trail, Watson, Wheeler, Zimmermann, Mr Speaker
NAYS -- Barrett, Bell, Black(23), Denney, Field(20), Geddes,
Loertscher, Sali, Schaefer, Stevenson, Stoicheff, Stubbs, Taylor,
Wood
Absent and excused -- Clark, Cuddy, Jones(20)
Floor Sponsor - Deal
Title apvd - to Senate
03/09 Senate intro - 1st rdg as amen - to St Aff
03/11 Rpt out - rec d/p - to 2nd rdg as amen
03/12 2nd rdg - to 3rd rdg as amen
03/17 3rd rdg as amen - PASSED - 31-2-2
AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
Crow, Danielson, Darrington, Deide, Dunklin, Frasure, Geddes, Ipsen,
Keough, King, Lee, McLaughlin, Noh, Parry, Richardson, Riggs, Risch,
Sandy, Sorensen, Stennett, Sweeney, Thorne, Twiggs, Wheeler,
Whitworth
NAYS--Hawkins, Schroeder
Absent and excused--Hansen, Ingram
Floor Sponsor - Bunderson, Danielson
Title apvd - to House
03/18 To enrol
03/18 Rpt enrol - Sp signed
03/19 Pres signed - to Governor
03/23 Governor signed
Session Law Chapter 256
Effective: 07/01/2000
with specified contingencies
H0643|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-fourth Legislature Second Regular Session - 1998IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 643, As Amended BY STATE AFFAIRS COMMITTEE 1 AN ACT 2 RELATING TO STATE ENDOWMENT LANDS; REPEALING SECTION 20-102, IDAHO CODE; 3 AMENDING CHAPTER 1, TITLE 20, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 4 20-102, IDAHO CODE, TO ESTABLISH THE PENITENTIARY PERMANENT ENDOWMENT 5 FUND; AMENDING CHAPTER 1, TITLE 20, IDAHO CODE, BY THE ADDITION OF A NEW 6 SECTION 20-102A, IDAHO CODE, TO ESTABLISH THE PENITENTIARY EARNINGS 7 RESERVE FUND; REPEALING SECTION 20-103, IDAHO CODE; AMENDING CHAPTER 1, 8 TITLE 20, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 20-103, IDAHO CODE, 9 TO ESTABLISH THE PENITENTIARY INCOME FUND; REPEALING SECTION 33-902, IDAHO 10 CODE; AMENDING CHAPTER 9, TITLE 33, IDAHO CODE, BY THE ADDITION OF A NEW 11 SECTION 33-902, IDAHO CODE, TO ESTABLISH THE PUBLIC SCHOOL PERMANENT 12 ENDOWMENT FUND; AMENDING CHAPTER 9, TITLE 33, IDAHO CODE, BY THE ADDITION 13 OF A NEW SECTION 33-902A, IDAHO CODE, TO ESTABLISH THE PUBLIC SCHOOL EARN- 14 INGS RESERVE FUND; AMENDING SECTION 33-903, IDAHO CODE, TO ESTABLISH THE 15 PUBLIC SCHOOL INCOME FUND; REPEALING SECTION 33-2909, IDAHO CODE; AMENDING 16 CHAPTER 29, TITLE 33, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 17 33-2909, IDAHO CODE, TO ESTABLISH THE UNIVERSITY PERMANENT ENDOWMENT FUND; 18 AMENDING CHAPTER 29, TITLE 33, IDAHO CODE, BY THE ADDITION OF A NEW SEC- 19 TION 33-2909A, IDAHO CODE, TO ESTABLISH THE UNIVERSITY EARNINGS RESERVE 20 FUND; REPEALING SECTION 33-2910, IDAHO CODE; AMENDING CHAPTER 29, TITLE 21 33, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 33-2910, IDAHO CODE, TO 22 ESTABLISH THE UNIVERSITY INCOME FUND; REPEALING SECTION 33-2911, IDAHO 23 CODE; AMENDING CHAPTER 29, TITLE 33, IDAHO CODE, BY THE ADDITION OF A NEW 24 SECTION 33-2911, IDAHO CODE, TO ESTABLISH THE SCIENTIFIC SCHOOL PERMANENT 25 ENDOWMENT FUND; AMENDING CHAPTER 29, TITLE 33, IDAHO CODE, BY THE ADDITION 26 OF A NEW SECTION 33-2911A, IDAHO CODE, TO ESTABLISH THE SCIENTIFIC SCHOOL 27 EARNINGS RESERVE FUND; REPEALING SECTION 33-2912, IDAHO CODE; AMENDING 28 CHAPTER 29, TITLE 33, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 29 33-2912, IDAHO CODE, TO ESTABLISH THE SCIENTIFIC SCHOOL INCOME FUND; 30 REPEALING SECTION 33-2913, IDAHO CODE; AMENDING CHAPTER 29, TITLE 33, 31 IDAHO CODE, BY THE ADDITION OF A NEW SECTION 33-2913, IDAHO CODE, TO 32 ESTABLISH THE AGRICULTURAL COLLEGE PERMANENT ENDOWMENT FUND; AMENDING 33 CHAPTER 29, TITLE 33, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 34 33-2913A, IDAHO CODE, TO ESTABLISH THE AGRICULTURAL COLLEGE EARNINGS 35 RESERVE FUND; REPEALING SECTION 33-2914, IDAHO CODE; AMENDING CHAPTER 29, 36 TITLE 33, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 33-2914, IDAHO 37 CODE, TO ESTABLISH THE AGRICULTURAL COLLEGE INCOME FUND; REPEALING SECTION 38 33-3301, IDAHO CODE; AMENDING CHAPTER 33, TITLE 33, IDAHO CODE, BY THE 39 ADDITION OF A NEW SECTION 33-3301, IDAHO CODE, TO ESTABLISH THE NORMAL 40 SCHOOL PERMANENT ENDOWMENT FUND; AMENDING CHAPTER 33, TITLE 33, IDAHO 41 CODE, BY THE ADDITION OF A NEW SECTION 33-3301A, IDAHO CODE, TO ESTABLISH 42 THE NORMAL SCHOOL EARNINGS RESERVE FUND; AMENDING CHAPTER 33, TITLE 33, 43 IDAHO CODE, BY THE ADDITION OF A NEW SECTION 33-3301B, IDAHO CODE, TO 44 ESTABLISH THE NORMAL SCHOOL INCOME FUND; AMENDING SECTION 33-3302, IDAHO 45 CODE, TO PROVIDE A REFERENCE TO THE NORMAL SCHOOL EARNINGS RESERVE FUND 46 AND TO MAKE A TECHNICAL CORRECTION; AMENDING SECTION 33-3303, IDAHO CODE, 2 1 TO PROVIDE A REFERENCE TO THE NORMAL SCHOOL EARNINGS RESERVE FUND AND TO 2 MAKE A TECHNICAL CORRECTION; AMENDING SECTION 33-3304, IDAHO CODE, TO PRO- 3 VIDE A REFERENCE TO THE NORMAL SCHOOL EARNINGS RESERVE FUND AND TO MAKE A 4 TECHNICAL CORRECTION; AMENDING THE CHAPTER HEADING OF CHAPTER 7, TITLE 57, 5 IDAHO CODE; AMENDING SECTION 57-715, IDAHO CODE, TO PROVIDE THAT THE 6 ENDOWMENT FUND INVESTMENT BOARD SHALL CONTROL, MANAGE AND INVEST PERMANENT 7 ENDOWMENT FUNDS ACCORDING TO POLICIES ESTABLISHED BY THE STATE BOARD OF 8 LAND COMMISSIONERS; AMENDING SECTION 57-716, IDAHO CODE, TO PROVIDE FOR 9 DEPOSIT OF PROCEEDS OF THE SALES OF PUBLIC LANDS INTO PERMANENT ENDOWMENT 10 FUNDS; AMENDING SECTION 57-718, IDAHO CODE, TO PROVIDE THAT THE ENDOWMENT 11 FUND INVESTMENT BOARD IS WITHIN THE STATE BOARD OF LAND COMMISSIONERS, TO 12 PROVIDE REFERENCES TO THE INVESTMENT BOARD, TO DELETE THE SUPERINTENDENT 13 OF PUBLIC INSTRUCTION AND THE DIRECTOR OF THE DEPARTMENT OF FINANCE FROM 14 THE ENDOWMENT FUND INVESTMENT BOARD; AMENDING SECTION 57-720, IDAHO CODE, 15 TO PROVIDE THAT THE ENDOWMENT FUND INVESTMENT BOARD AND ITS MANAGERS ARE 16 AUTHORIZED TO AND MAY INVEST THE PERMANENT ENDOWMENT FUNDS AND THE EARN- 17 INGS RESERVE FUNDS OF THE STATE AND TO PROVIDE REFERENCES TO THE INVEST- 18 MENT BOARD; AMENDING SECTION 57-721, IDAHO CODE, TO PROVIDE FOR MANAGEMENT 19 OF EARNINGS RESERVE FUNDS AND TO PROVIDE REFERENCES TO THE INVESTMENT 20 BOARD; REPEALING SECTION 57-722, IDAHO CODE; AMENDING SECTION 57-723, 21 IDAHO CODE, TO PROVIDE FOR APPLICATION OF THE UNIFORM PRUDENT INVESTOR ACT 22 AND THE IDAHO CONSTITUTION SHALL APPLY TO THE INVESTMENT ACTIONS OF THE 23 ENDOWMENT FUND INVESTMENT BOARD AND THE INVESTMENT MANAGERS REGARDING PER- 24 MANENT ENDOWMENT FUNDS AND EARNINGS RESERVE FUNDS AND TO PROVIDE REFER- 25 ENCES TO THE INVESTMENT BOARD; AMENDING CHAPTER 7, TITLE 57, IDAHO CODE, 26 BY THE ADDITION OF A NEW SECTION 57-723A, IDAHO CODE, TO PROVIDE FOR 27 DEPOSIT AND DISTRIBUTION OF EARNINGS RESERVE FUNDS AND INCOME FUNDS BY THE 28 STATE BOARD OF LAND COMMISSIONERS AND TO PROVIDE FOR PAYMENT OF ADMINIS- 29 TRATIVE COSTS FROM EARNINGS RESERVE FUNDS BY THE LEGISLATURE; REPEALING 30 SECTION 57-724, IDAHO CODE; AMENDING CHAPTER 7, TITLE 57, IDAHO CODE, BY 31 THE ADDITION OF A NEW SECTION 57-724, IDAHO CODE, TO PROVIDE A FORMULA FOR 32 DETERMINING GAINS AND LOSSES; AMENDING CHAPTER 7, TITLE 57, IDAHO CODE, BY 33 THE ADDITION OF A NEW SECTION 57-724A, IDAHO CODE, TO DEFINE EARNINGS; 34 AMENDING SECTION 57-725, IDAHO CODE, TO PROVIDE THAT THE ENDOWMENT FUND 35 INVESTMENT BOARD SHALL MAKE A SUMMARY REPORT TO THE STATE BOARD OF LAND 36 COMMISSIONERS AS DIRECTED BY THE STATE BOARD OF LAND COMMISSIONERS; AMEND- 37 ING SECTION 58-104, IDAHO CODE, TO PROVIDE POWERS AND DUTIES OF THE STATE 38 LAND BOARD; AMENDING SECTION 58-133, IDAHO CODE, TO PROVIDE FOR ESTABLISH- 39 MENT OF A LAND BANK FUND, TO PROVIDE FOR DEPOSIT WITH THE STATE TREASURER, 40 TO PROVIDE FOR CONTROL OF THE MONEY IN THE FUND BY THE STATE BOARD OF LAND 41 COMMISSIONERS AND TO PROVIDE FOR TREATMENT OF MONEYS IN THE FUND; REPEAL- 42 ING SECTION 58-140, IDAHO CODE; AMENDING SECTION 58-316, IDAHO CODE, TO 43 PROVIDE THAT PURCHASE MONEYS SHALL BE CREDITED TO THE LAND BANK FUND AND 44 TO PROVIDE FOR CONDUCT OF THE ENDOWMENT FUND INVESTMENT BOARD REGARDING 45 MONEYS IN THE FUND; REPEALING SECTION 66-1101, IDAHO CODE; AMENDING CHAP- 46 TER 11, TITLE 66, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 66-1101, 47 IDAHO CODE, TO ESTABLISH THE MENTAL HOSPITAL PERMANENT ENDOWMENT FUND; 48 AMENDING CHAPTER 11, TITLE 66, IDAHO CODE, BY THE ADDITION OF A NEW SEC- 49 TION 66-1101A, IDAHO CODE, TO ESTABLISH THE MENTAL HOSPITAL EARNINGS 50 RESERVE FUND; REPEALING SECTION 66-1102, IDAHO CODE; AMENDING CHAPTER 11, 51 TITLE 66, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 66-1102, IDAHO 52 CODE, TO ESTABLISH THE MENTAL HOSPITAL INCOME FUND; REPEALING SECTION 53 66-1103, IDAHO CODE; AMENDING CHAPTER 11, TITLE 66, IDAHO CODE, BY THE 54 ADDITION OF A NEW SECTION 66-1103, IDAHO CODE, TO ESTABLISH THE CHARITABLE 55 INSTITUTIONS PERMANENT ENDOWMENT FUND; REPEALING SECTION 66-1104, IDAHO 3 1 CODE; AMENDING CHAPTER 11, TITLE 66, IDAHO CODE, BY THE ADDITION OF A NEW 2 SECTION 66-1104, IDAHO CODE, TO ESTABLISH THE CHARITABLE INSTITUTIONS 3 EARNINGS RESERVE FUND; REPEALING SECTION 66-1105, IDAHO CODE; AMENDING 4 CHAPTER 11, TITLE 66, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 5 66-1105, IDAHO CODE, TO ESTABLISH THE CHARITABLE INSTITUTIONS INCOME FUND; 6 AMENDING CHAPTER 57, TITLE 67, IDAHO CODE, BY THE ADDITION OF A NEW SEC- 7 TION 67-5779, IDAHO CODE, TO ESTABLISH THE PUBLIC BUILDINGS PERMANENT 8 ENDOWMENT FUND; AMENDING CHAPTER 57, TITLE 67, IDAHO CODE, BY THE ADDITION 9 OF A NEW SECTION 67-5780, IDAHO CODE, TO ESTABLISH THE PUBLIC BUILDINGS 10 EARNINGS RESERVE FUND; AMENDING CHAPTER 57, TITLE 67, IDAHO CODE, BY THE 11 ADDITION OF A NEW SECTION 67-5781, IDAHO CODE, TO ESTABLISH THE PUBLIC 12 BUILDINGS INCOME FUND; AND PROVIDING EFFECTIVE DATES AND DIRECTION TO THE 13 STATE CONTROLLER. 14 Be It Enacted by the Legislature of the State of Idaho: 15 SECTION 1. That Section 20-102, Idaho Code, be, and the same is hereby 16 repealed. 17 SECTION 2. That Chapter 1, Title 20, Idaho Code, be, and the same is 18 hereby amended by the addition thereto of a NEW SECTION , to be 19 known and designated as Section 20-102, Idaho Code, and to read as follows: 20 20-102. PENITENTIARY PERMANENT ENDOWMENT FUND. (1) There is established 21 in the state treasury the penitentiary permanent endowment fund. This fund is 22 perpetually appropriated for the beneficiaries of the endowment. The fund 23 shall be managed and invested by the endowment fund investment board according 24 to law and the policies established by the state board of land commissioners. 25 The fund principal shall forever remain intact. The fund shall be a permanent 26 fund and shall consist of the following: 27 (a) Proceeds of the sale of lands granted to the state of Idaho by the 28 United States government in the Idaho Admission Bill, 26 Stat. L. 215, ch. 29 656, known as penitentiary endowment lands, and lands granted in lieu 30 thereof; 31 (b) Proceeds of royalties arising from the extraction of minerals on pen- 32 itentiary endowment lands owned by the state; and 33 (c) Moneys allocated from the penitentiary earnings reserve fund. 34 (2) Proceeds from the sale of penitentiary endowment lands may first be 35 deposited into the land bank fund established in section 58-133, Idaho Code, 36 to be used to acquire other lands within the state for the benefit of the ben- 37 eficiaries of the penitentiary endowment. If the land sale proceeds are not 38 used to acquire other lands in accordance with section 58-133, Idaho Code, the 39 land sale proceeds shall be deposited into the penitentiary permanent endow- 40 ment fund along with any earnings on the proceeds. 41 (3) Earnings from the investment of the penitentiary permanent endowment 42 fund shall be distributed according to the provisions of section 57-723A, 43 Idaho Code. 44 SECTION 3. That Chapter 1, Title 20, Idaho Code, be, and the same is 45 hereby amended by the addition thereto of a NEW SECTION , to be 46 known and designated as Section 20-102A, Idaho Code, and to read as follows: 47 20-102A. PENITENTIARY EARNINGS RESERVE FUND. (1) There is established in 48 the state treasury the penitentiary earnings reserve fund. The fund shall be 49 managed and invested by the endowment fund investment board according to law 4 1 and the policies established by the state board of land commissioners. The 2 fund shall consist of the following: 3 (a) All earnings of the penitentiary permanent endowment fund; 4 (b) Proceeds of the sale of timber growing upon penitentiary endowment 5 lands; 6 (c) Proceeds of leases of penitentiary endowment lands; 7 (d) Proceeds of interest charged upon deferred payments on penitentiary 8 endowment lands or timber on those lands; and 9 (e) All other proceeds received from the use of penitentiary endowment 10 lands and not otherwise designated for deposit in the penitentiary perma- 11 nent endowment fund. 12 (2) Moneys shall be distributed out of the penitentiary earnings reserve 13 fund only to support the beneficiaries of the penitentiary endowment, includ- 14 ing distributions by the state board of land commissioners to the penitentiary 15 permanent endowment fund and the penitentiary income fund; provided, that 16 funds shall not be appropriated by the legislature from the penitentiary earn- 17 ings reserve fund except to pay for administrative costs incurred managing the 18 assets of the penitentiary endowment including, but not limited to, real prop- 19 erty and monetary assets. 20 SECTION 4. That Section 20-103, Idaho Code, be, and the same is hereby 21 repealed. 22 SECTION 5. That Chapter 1, Title 20, Idaho Code, be, and the same is 23 hereby amended by the addition thereto of a NEW SECTION , to be 24 known and designated as Section 20-103, Idaho Code, and to read as follows: 25 20-103. PENITENTIARY INCOME FUND. There is established in the state trea- 26 sury the penitentiary income fund. The fund shall consist of all moneys dis- 27 tributed from the penitentiary earnings reserve fund and from other sources as 28 the legislature deems appropriate. Moneys in the penitentiary income fund 29 shall be used to benefit the beneficiaries of the penitentiary endowment and 30 distributed to current beneficiaries of the penitentiary endowment pursuant to 31 legislative appropriation. 32 SECTION 6. That Section 33-902, Idaho Code, be, and the same is hereby 33 repealed. 34 SECTION 7. That Chapter 9, Title 33, Idaho Code, be, and the same is 35 hereby amended by the addition thereto of a NEW SECTION , to be 36 known and designated as Section 33-902, Idaho Code, and to read as follows: 37 33-902. PUBLIC SCHOOL PERMANENT ENDOWMENT FUND. (1) There is established 38 in the state treasury the public school permanent endowment fund. This fund 39 is perpetually appropriated for the beneficiaries of the endowment. The fund 40 shall be managed and invested by the endowment fund investment board according 41 to law and the policies established by the state board of land commissioners. 42 The fund principal shall forever remain intact. The fund shall be a permanent 43 fund and shall consist of the following: 44 (a) Proceeds from the sale of lands granted to the state by the federal 45 government, known as public school endowment lands, and lands granted in 46 lieu of public school endowment school lands; 47 (b) Lands, money or other property acquired by gift or grant from any 48 person or corporation or under any law or grant of the federal government 49 for general educational purposes; 5 1 (c) All other grants of lands or money made to the state from the federal 2 government for general educational purposes where no other purpose is 3 indicated in the grant; 4 (d) All estates or distributive shares of estates that may escheat to the 5 state; 6 (e) All unclaimed shares and dividends of any corporation incorporated 7 under the laws of the state; 8 (f) Proceeds of royalties arising from the extraction of minerals on pub- 9 lic school land owned by the state; 10 (g) Other proceeds and avails as are required by law of the federal gov- 11 ernment or of the state of Idaho to be made a part of the fund; and 12 (h) Moneys allocated from the public school earnings reserve fund. 13 (2) Public school endowment land sale proceeds may be deposited into the 14 land bank fund established in section 58-133, Idaho Code, to be used to 15 acquire other lands within the state for the benefit of the endowment benefi- 16 ciaries. If proceeds from the sale of public school endowment lands are not 17 used to acquire other lands in accordance with section 58-133, Idaho Code, the 18 proceeds from the sale shall be deposited into the public school permanent 19 endowment fund along with any earnings on the proceeds. 20 (3) Earnings from the investment of the public school permanent endowment 21 fund shall be distributed according to the provisions of section 57-723A, 22 Idaho Code. 23 SECTION 8. That Chapter 9, Title 33, Idaho Code, be, and the same is 24 hereby amended by the addition thereto of a NEW SECTION , to be 25 known and designated as Section 33-902A, Idaho Code, and to read as follows: 26 33-902A. PUBLIC SCHOOL EARNINGS RESERVE FUND. (1) There is established in 27 the state treasury the public school earnings reserve fund. The fund shall be 28 managed and invested by the endowment fund investment board according to law 29 and the policies established by the state board of land commissioners. The 30 public school earnings reserve fund shall consist of the following: 31 (a) All earnings of the public school permanent endowment fund; 32 (b) Proceeds of the sale of timber on public school endowment lands; 33 (c) Proceeds of leases of public school endowment lands; 34 (d) Proceeds of interest charged upon deferred payments on public school 35 endowment lands or timber on those lands; 36 (e) Earnings on contracts for the sale of timber and the sale of lands 37 related to the public school endowment; and 38 (f) All other proceeds received from the use of public school endowment 39 lands and not otherwise designated for deposit in the public school perma- 40 nent endowment fund. 41 (2) Moneys shall be distributed out of the public school earnings reserve 42 fund only to support the beneficiaries of the public school endowment, includ- 43 ing distributions by the state board of land commissioners to the public 44 school permanent endowment fund and the public school income fund; provided, 45 that funds shall not be appropriated by the legislature from the public school 46 earnings reserve fund except to pay for administrative costs incurred managing 47 the assets of the public school endowment including, but not limited to, real 48 property and monetary assets. 49 SECTION 9. That Section 33-903, Idaho Code, be, and the same is hereby 50 amended to read as follows: 51 33-903. PUBLIC SCHOOL INCOME FUND. (1) The public school 6 1 income fund is that fund in the treasury of the state of Idaho to which are 2 creditedall income from the public school fund;the fol- 3 lowing: 4 (a) Moneys distributed from the public school earnings reserve fund and 5 other sources the legislature deems appropriate; 6 (b)the pP roceeds of all state taxes 7 levied for public school purposes; 8 (c) Ggrants of moneys from the federal govern- 9 ment for public school purposes when other disposition is not specified by 10 law; 11 (d) Nninety percent (90%) of any moneys 12 received by any department of state government from the federal government 13 from sales, royalties, bonuses or rentals of oil, gas or mineral lands; 14 (e) Llegislative appropriations in support of 15 the public schools, and other moneys required by the law of the federal 16 government or of the state of Idaho to be made a part ofsaid fund17and creditedthereto. Interest earnedto the 18 fund. 19 (2) Earnings on the investment of idle moneys in the public school 20 income fund shall be paid to the public school income fund. 21 (3) Moneys in the public school income fund shall be used for the 22 benefit of beneficiaries of the public school endowment and distributed to 23 current beneficiaries of the public school endowment pursuant to legislative 24 appropriation. 25 SECTION 10. That Section 33-2909, Idaho Code, be, and the same is hereby 26 repealed. 27 SECTION 11. That Chapter 29, Title 33, Idaho Code, be, and the same is 28 hereby amended by the addition thereto of a NEW SECTION , to be 29 known and designated as Section 33-2909, Idaho Code, and to read as follows: 30 33-2909. UNIVERSITY PERMANENT ENDOWMENT FUND. (1) There is established in 31 the state treasury the university permanent endowment fund. This fund is per- 32 petually appropriated for the beneficiaries of the endowment. The fund shall 33 be managed and invested by the endowment fund investment board according to 34 law and the policies established by the state board of land commissioners. The 35 fund principal shall forever remain intact. The fund shall be a permanent fund 36 and shall consist of the following: 37 (a) Proceeds from the sale of any lands granted to the state of Idaho by 38 the United States government for university purposes under the provisions 39 of the act of congress of February 18, 1881, entitled "An act to grant 40 lands to Dakota, Montana, Arizona, Idaho and Wyoming for university pur- 41 poses," as amended by the Idaho Admission Bill 26 Stat. L. 215, ch. 656, 42 and lands granted in lieu of university lands; 43 (b) Proceeds of royalties arising from the extraction of minerals on uni- 44 versity endowment lands owned by the state; 45 (c) Moneys allocated from the university earnings reserve fund. 46 (2) Proceeds from the sale of university endowment lands may be first 47 deposited into the land bank fund established in section 58-133, Idaho Code, 48 for the benefit of endowment beneficiaries. If the proceeds from the sale of 49 land are not used to acquire other lands in accordance with section 58-133, 50 Idaho Code, the land sale proceeds shall be deposited into the university per- 51 manent endowment fund along with any earnings on the proceeds. 52 (3) Earnings from the investment of the university permanent endowment 7 1 fund shall be distributed according to the provisions of section 57-723A, 2 Idaho Code. 3 SECTION 12. That Chapter 29, Title 33, Idaho Code, be, and the same is 4 hereby amended by the addition thereto of a NEW SECTION , to be 5 known and designated as Section 33-2909A, Idaho Code, and to read as follows: 6 33-2909A. UNIVERSITY EARNINGS RESERVE FUND. (1) There is established in 7 the state treasury the university earnings reserve fund. The fund shall be 8 managed and invested by the endowment fund investment board according to law 9 and the policies established by the state board of land commissioners. The 10 fund shall consist of the following: 11 (a) All earnings from the university permanent endowment fund; 12 (b) Proceeds of the sale of timber growing upon university endowment 13 lands; 14 (c) Proceeds of leases of university endowment lands; 15 (d) Proceeds of interest charged upon deferred payments on university 16 endowment lands or on timber on those lands; and 17 (e) All other proceeds received from the use of university endowment 18 lands and not otherwise designated for deposit in the university permanent 19 endowment fund. 20 (2) Moneys shall be distributed out of the university earnings reserve 21 fund only to support the beneficiaries of the university endowment, including 22 distributions by the state board of land commissioners to the university per- 23 manent endowment fund and the university income fund; provided, that funds 24 shall not be appropriated by the legislature from the university earnings 25 reserve fund except to pay for administrative costs incurred managing the 26 assets of the university endowment including, but not limited to, real prop- 27 erty and monetary assets. 28 SECTION 13. That Section 33-2910, Idaho Code, be, and the same is hereby 29 repealed. 30 SECTION 14. That Chapter 29, Title 33, Idaho Code, be, and the same is 31 hereby amended by the addition thereto of a NEW SECTION , to be 32 known and designated as Section 33-2910, Idaho Code, and to read as follows: 33 33-2910. UNIVERSITY INCOME FUND. There is established in the state trea- 34 sury the university income fund. The fund shall consist of all moneys distrib- 35 uted from the university earnings reserve fund and from other sources as the 36 legislature deems appropriate. Moneys in the university income fund shall be 37 used for the benefit of beneficiaries of the university endowment and distrib- 38 uted to current beneficiaries of the endowment pursuant to legislative appro- 39 priation. 40 SECTION 15. That Section 33-2911, Idaho Code, be, and the same is hereby 41 repealed. 42 SECTION 16. That Chapter 29, Title 33, Idaho Code, be, and the same is 43 hereby amended by the addition thereto of a NEW SECTION , to be 44 known and designated as Section 33-2911, Idaho Code, and to read as follows: 45 33-2911. SCIENTIFIC SCHOOL PERMANENT ENDOWMENT FUND. (1) There is estab- 46 lished in the state treasury the scientific school permanent endowment fund. 47 This fund is perpetually appropriated for the beneficiaries of the endowment. 8 1 The fund shall be managed and invested by the endowment fund investment board 2 according to law and the policies established by the state board of land com- 3 missioners. The fund principal shall forever remain intact. The fund shall be 4 a permanent fund and shall consist of the following: 5 (a) Proceeds of the sale of lands granted to the state of Idaho by the 6 United States government under the provisions of the Idaho Admission Bill, 7 26 Stat. L. 215, ch. 656, known as scientific school endowment lands, and 8 those granted in lieu of such lands; 9 (b) Proceeds of royalties arising from the extraction of minerals on sci- 10 entific school endowment lands owned by the state; 11 (c) Moneys allocated from the scientific school earnings reserve fund. 12 (2) Proceeds from the sale of scientific school endowment lands may be 13 first deposited into the land bank fund established in section 58-133, Idaho 14 Code, to be used to acquire other lands within the state for the benefit of 15 beneficiaries of the scientific school endowment. If the land sale proceeds 16 are not used to acquire other lands in accordance with section 58-133, Idaho 17 Code, the proceeds shall be deposited into the scientific school permanent 18 endowment fund along with any earnings on the proceeds. 19 (3) Earnings from the investment of the scientific school permanent 20 endowment fund shall be distributed according to the provisions of section 21 57-723A, Idaho Code. 22 SECTION 17. That Chapter 29, Title 33, Idaho Code, be, and the same is 23 hereby amended by the addition thereto of a NEW SECTION , to be 24 known and designated as Section 33-2911A, Idaho Code, and to read as follows: 25 33-2911A. SCIENTIFIC SCHOOL EARNINGS RESERVE FUND. (1) There is estab- 26 lished in the state treasury the scientific school earnings reserve fund. The 27 fund shall be managed and invested by the endowment fund investment board 28 according to law and the policies established by the state board of land com- 29 missioners. The fund shall consist of the following: 30 (a) All earnings of the scientific school permanent endowment fund; 31 (b) Proceeds of the sale of timber on scientific school endowment lands; 32 (c) Proceeds of leases of scientific school lands; 33 (d) Proceeds of interest charged upon deferred payments on scientific 34 school endowment lands or on timber on those lands; and 35 (e) All other proceeds received from the use of scientific school endow- 36 ment lands and not otherwise designated for deposit in the scientific 37 school permanent endowment fund. 38 (2) Moneys shall be distributed out of the scientific school earnings 39 reserve fund only to support the beneficiaries of the scientific school endow- 40 ment, including distributions by the state board of land commissioners to the 41 scientific school permanent endowment fund and the scientific school income 42 fund; provided, that funds shall not be appropriated by the legislature from 43 the scientific school earnings reserve fund except to pay for administrative 44 costs incurred managing the assets of the scientific school endowment includ- 45 ing, but not limited to, real property and monetary assets. 46 SECTION 18. That Section 33-2912, Idaho Code, be, and the same is hereby 47 repealed. 48 SECTION 19. That Chapter 29, Title 33, Idaho Code, be, and the same is 49 hereby amended by the addition thereto of a NEW SECTION , to be 50 known and designated as Section 33-2912, Idaho Code, and to read as follows: 9 1 33-2912. SCIENTIFIC SCHOOL INCOME FUND. There is established in the state 2 treasury the scientific school income fund. The fund shall consist of all 3 moneys distributed from the scientific school earnings reserve fund and from 4 other sources as the legislature deems appropriate. Moneys in the scientific 5 school income fund shall be used for the benefit of the beneficiaries of the 6 endowment and distributed to current beneficiaries of the scientific school 7 endowment pursuant to legislative appropriation. 8 SECTION 20. That Section 33-2913, Idaho Code, be, and the same is hereby 9 repealed. 10 SECTION 21. That Chapter 29, Title 33, Idaho Code, be, and the same is 11 hereby amended by the addition thereto of a NEW SECTION , to be 12 known and designated as Section 33-2913, Idaho Code, and to read as follows: 13 33-2913. AGRICULTURAL COLLEGE PERMANENT ENDOWMENT FUND. (1) There is 14 established in the state treasury the agricultural college permanent endowment 15 fund. This fund is perpetually appropriated for the beneficiaries of the 16 endowment. The fund shall be managed and invested by the endowment fund 17 investment board according to law and the policies established by the state 18 board of land commissioners. The fund principal shall forever remain intact. 19 The fund shall be a permanent fund and shall consist of the following: 20 (a) Proceeds of the sale of agricultural college endowment lands granted 21 to the state of Idaho by the United States government under the provisions 22 of the Idaho Admission Bill, 26 Stat. L. 215, ch. 656; 23 (b) Proceeds of royalties arising from the extraction of minerals on 24 agricultural college endowment lands owned by the state; 25 (c) Moneys allocated from the agricultural college earnings reserve fund. 26 (2) Proceeds from the sale of agricultural college endowment lands may be 27 first deposited into the land bank fund established in section 58-133, Idaho 28 Code, to be used to acquire other lands within the state for the benefit of 29 beneficiaries of the agricultural college endowment. If the land sale proceeds 30 are not used to acquire other lands in accordance with section 58-133, Idaho 31 Code, the proceeds shall be deposited into the agricultural college permanent 32 endowment fund along with any earnings on the proceeds. 33 (3) Earnings from the agricultural college permanent endowment fund shall 34 be distributed according to the provisions of section 57-723A, Idaho Code. 35 SECTION 22. That Chapter 29, Title 33, Idaho Code, be, and the same is 36 hereby amended by the addition thereto of a NEW SECTION , to be 37 known and designated as Section 33-2913A, Idaho Code, and to read as follows: 38 33-2913A. AGRICULTURAL COLLEGE EARNINGS RESERVE FUND. (1) There is estab- 39 lished in the state treasury the agricultural college earnings reserve fund. 40 The fund shall be managed and invested by the endowment fund investment board 41 according to law and the policies established by the state board of land com- 42 missioners. The fund shall consist of the following: 43 (a) All earnings of the agricultural college permanent endowment fund; 44 (b) Proceeds of the sale of timber growing on agricultural college 45 endowment lands; 46 (c) Proceeds of leases of agricultural college endowment lands; 47 (d) Proceeds of interest charged upon deferred payments on agricultural 48 college endowment lands or on timber on those lands; and 49 (e) All other proceeds received from the use of agricultural college 50 endowment lands and not otherwise designated for deposit in the agricul- 10 1 tural college permanent endowment fund. 2 (2) Moneys shall be distributed out of the agricultural college earnings 3 reserve fund only to support the beneficiaries of the agricultural college 4 endowment, including distributions by the state board of land commissioners to 5 the agricultural college permanent endowment fund and the agricultural college 6 income fund; provided, that funds shall not be appropriated by the legislature 7 from the agricultural college earnings reserve fund except to pay for adminis- 8 trative costs incurred managing the assets of the agricultural college endow- 9 ment including, but not limited to, real property and monetary assets. 10 SECTION 23. That Section 33-2914, Idaho Code, be, and the same is hereby 11 repealed. 12 SECTION 24. That Chapter 29, Title 33, Idaho Code, be, and the same is 13 hereby amended by the addition thereto of a NEW SECTION , to be 14 known and designated as Section 33-2914, Idaho Code, and to read as follows: 15 33-2914. AGRICULTURAL COLLEGE INCOME FUND. There is established in the 16 state treasury the agricultural college income fund. The fund shall consist of 17 all moneys distributed from the agricultural college earnings reserve fund and 18 from other sources as the legislature deems appropriate. Moneys in the agri- 19 cultural college income fund shall be used for the benefit of the beneficia- 20 ries of the endowment and distributed to current beneficiaries of the agricul- 21 tural college endowment pursuant to legislative appropriation. 22 SECTION 25. That Section 33-3301, Idaho Code, be, and the same is hereby 23 repealed. 24 SECTION 26. That Chapter 33, Title 33, Idaho Code, be, and the same is 25 hereby amended by the addition thereto of a NEW SECTION , to be 26 known and designated as Section 33-3301, Idaho Code, and to read as follows: 27 33-3301. NORMAL SCHOOL PERMANENT ENDOWMENT FUND. (1) There is established 28 in the state treasury the normal school permanent endowment fund. This fund is 29 perpetually appropriated for the beneficiaries of the endowment. The fund 30 shall be managed and invested by the endowment fund investment board according 31 to law and the policies established by the state board of land commissioners. 32 The fund principal shall forever remain intact. The fund shall be a permanent 33 fund and shall consist of the following: 34 (a) Proceeds of the sale of any of the lands granted to the state of 35 Idaho by the United States government under the provisions of the Idaho 36 Admission Bill, 26 Stat. L. 215, ch. 656, known as normal school endowment 37 lands, and those granted in lieu of such; 38 (b) Proceeds of royalties arising from the extraction of minerals on nor- 39 mal endowment school lands owned by the state; and 40 (c) Moneys allocated from the normal school earnings reserve fund. 41 (2) Provided however, that proceeds from the sale of normal school endow- 42 ment lands may be first deposited into the land bank fund established in sec- 43 tion 58-133, Idaho Code, to be used to acquire other lands within the state 44 for the benefit of endowment beneficiaries. If the land sale proceeds are not 45 used to acquire other lands in accordance with section 58-133, Idaho Code, the 46 proceeds shall be deposited into the normal school permanent endowment fund 47 along with any earnings on the proceeds. 48 (3) Earnings from the investment of the normal school permanent endowment 49 fund shall be distributed according to the provisions of section 57-723A, 11 1 Idaho Code. 2 SECTION 27. That Chapter 33, Title 33, Idaho Code, be, and the same is 3 hereby amended by the addition thereto of a NEW SECTION , to be 4 known and designated as Section 33-3301A, Idaho Code, and to read as follows: 5 33-3301A. NORMAL SCHOOL EARNINGS RESERVE FUND. (1) There is established 6 in the state treasury the normal school earnings reserve fund. The fund shall 7 be managed and invested by the endowment fund investment board according to 8 law and the policies established by the state board of land commissioners. The 9 fund shall consist of the following: 10 (a) All earnings of the normal school permanent endowment fund; 11 (b) Proceeds of the sale of timber growing on normal school endowment 12 lands; 13 (c) Proceeds of leases of normal school endowment lands; 14 (d) Proceeds of interest upon deferred payments on normal school endow- 15 ment lands or timber on those lands; and 16 (e) All other proceeds received from the use of normal school endowment 17 lands and not otherwise designated for deposit in the normal school perma- 18 nent endowment fund. 19 (2) Moneys shall be distributed out of the normal school earnings reserve 20 fund only to support the beneficiaries of the normal school endowment, includ- 21 ing distributions by the state board of land commissioners to the normal 22 school permanent endowment fund and the normal school income fund; provided, 23 that funds shall not be appropriated by the legislature from the normal school 24 earnings reserve fund except to pay for administrative costs incurred managing 25 the assets of the normal school endowment including, but not limited to, real 26 property and monetary assets. 27 SECTION 28. That Chapter 33, Title 33, Idaho Code, be, and the same is 28 hereby amended by the addition thereto of a NEW SECTION , to be 29 known and designated as Section 33-3301B, Idaho Code, and to read as follows: 30 33-3301B. NORMAL SCHOOL INCOME FUND. There is established in the state 31 treasury the normal school income fund. The fund shall consist of all moneys 32 distributed from the normal school earnings reserve fund and from other 33 sources as the legislature deems appropriate. Moneys in the normal school 34 income fund shall be used for the benefit of the beneficiaries of the endow- 35 ment and distributed to current beneficiaries of the normal school endowment 36 pursuant to legislative appropriation. However, not more than fifty percent 37 (50%) of earnings of the normal school income fund shall ever be appropriated 38 for the support and maintenance of either Lewis-Clark State College or the 39 department of education at Idaho State University. 40 SECTION 29. That Section 33-3302, Idaho Code, be, and the same is hereby 41 amended to read as follows: 42 33-3302. APPROPRIATION FOR LEWIS-CLARK STATE COLLEGE. Fifty percent (50%) 43 of all moneys that now are in or which may hereafter accrue to thesaid44normal school income fund are perpetually appropriated and 45 set apart for the support and maintenance of the Lewis-Clark State College, 46 the same to be available for such purpose immediately upon their being cred- 47 ited to thesaidfund. 48 SECTION 30. That Section 33-3303, Idaho Code, be, and the same is hereby 12 1 amended to read as follows: 2 33-3303. APPROPRIATION FOR SUPPORT AND MAINTENANCE OF AN ALBION NORMAL 3 SCHOOL FIELD INSTITUTE. Subject to legislative approval by adoption of a con- 4 current resolution in both houses approving a department of parks and recre- 5 ation memorandum of understanding negotiated between the Idaho department of 6 parks and recreation and the city of Albion and other public or private agen- 7 cies interested in cooperative management of an Albion Normal School Field 8 Institute within an Albion State Normal School state park complex, the appro- 9 priately designated state agency shall receive three percent (3%) of all 10 moneys that are now in or which may hereafter accrue tosaid11 the normal school income fund, the same to be set 12 apart for support and maintenance of the Albion Normal School Field Institute. 13 The memorandum of understanding negotiated by the Idaho department of parks 14 and recreation and the city of Albion and other public or private agencies 15 interested in cooperative management of an Albion Normal School Field Insti- 16 tute within an Albion State Normal School state park complex shall be negoti- 17 ated in accordance with guidelines established in the Idaho department of 18 parks and recreation's Albion Campus General Development Plan. 19 SECTION 31. That Section 33-3304, Idaho Code, be, and the same is hereby 20 amended to read as follows: 21 33-3304. APPROPRIATION FOR THE DEPARTMENT OF EDUCATION AT IDAHO STATE 22 UNIVERSITY. Fifty percent (50%) of all the moneys that now are in or which may 23 hereafter accrue to thesaidnormal school income 24 fund are hereby appropriated and set apart for the support and maintenance of 25 the department of education at Idaho State University, the same to be avail- 26 able for such purpose immediately upon their being credited to thesaid27fund. Should the legislature, by adoption of a concurrent resolution in 28 both houses, approve a memorandum of understanding negotiated by the Idaho 29 department of parks and recreation between the city of Albion and other public 30 or private agencies interested in cooperative management of an Albion Normal 31 School Field Institute within an Albion State Normal School state park com- 32 plex, the percentage share for the department of education at Idaho State Uni- 33 versity shall be reduced from fifty percent (50%) to forty-seven percent 34 (47%). In the event that the memorandum of understanding is not approved, sec- 35 tion 33-3305, Idaho Code, shall apply. 36 SECTION 32. That the heading of Chapter 7, Title 57, Idaho Code, be, and 37 the same is hereby amended to read as follows: 38 CHAPTER 7 39 INVESTMENT OF PERMANENT ENDOWMENT AND EARNINGS RESERVE FUNDS 40 SECTION 33. That Section 57-715, Idaho Code, be, and the same is hereby 41 amended to read as follows: 42 57-715. PERMANENT ENDOWMENT FUNDS DECLARED TO BE TRUST FUNDS. Permanent 43 endowment funds of the state of Idaho are hereby declared to be trust funds of 44 the highest and most sacred order and shall be controlled, managed and 45 invested by the investment board and the investment manager(s) or 46 custodian(s) in accordance with the highest standard, as directed by law 47 and according to policies established by the state board of land commission- 48 ers, and as hereinafter provided. 13 1 SECTION 34. That Section 57-716, Idaho Code, be, and the same is hereby 2 amended to read as follows: 3 57-716. INVESTMENT OF PROCEEDS OF THE SALES OF PUBLIC LANDS. The proceeds 4 of the sales ofpublicendowment lands of the 5 state , if not deposited into the land bank fund established in section 6 58-133, Idaho Code, and used to purchase other lands, shall be deposited into 7 the appropriate permanent endowment funds and must be invested for and 8 on account of the specific purposes for which the lands were granted. 9 SECTION 35. That Section 57-718, Idaho Code, be, and the same is hereby 10 amended to read as follows: 11 57-718. ESTABLISHMENT OF INVESTMENT BOARD -- MEMBERS -- QUALIFICATIONS. 12 There is hereby established in theoffice of the governor13 state board of land commissioners an endowment fund 14 investment board, hereinafter referred to as the " investment 15 board." This investment board shall consist ofthe superin-16tendent of public instruction, the director of the department of finance, and17othermembers hereinafter designated who shall be appointed by the gov- 18 ernor subject to senate confirmation. The members of the investment 19 board subject to appointment shall be: one (1) citizen with a minimum 20 of ten (10) years' broad experience in the field of public educational admin- 21 istration, one (1) member of the Idaho senate, one (1) member of the Idaho 22 house of representatives, andfoursix (4236 ) public members from the citizenry at large who are 24 knowledgeable and experienced in financial matters and the place- 25 ment or management of investmentsassets . 26 SECTION 36. That Section 57-720, Idaho Code, be, and the same is hereby 27 amended to read as follows: 28 57-720. PERMANENT ENDOWMENT FUNDS -- EARNINGS RESERVE FUNDS -- 29 INCOME FUNDS -- INVESTMENT POLICY REGULATIONS -- ANNUAL AUDIT. 30 The investment board or its investment manager(s) may, and are hereby autho- 31 rized to, invest the permanent endowment funds and the earnings reserve funds 32 of the state of Idaho. The investment board shall formu- 33 late investment policy regulations governing the investment of permanent 34 endowment funds and earnings reserve funds . The regulations shall 35 pertain to the types, kinds or nature of investment of any of the funds, and 36 any limitations, conditions or restrictions upon the methods, practices or 37 procedures for investment, reinvestments, purchases, sales or exchange trans- 38 actions, provided such regulations shall not conflict with nor be in deroga- 39 tion of any Idaho constitutional provision or of the provisions of this act. 40 Annually, the investment board shall cause an audit to be 41 conducted of the investment of permanent endowment funds and earnings 42 reserve funds , such audit to be conducted by a recognized certified 43 public accountant. The certified public accountant conducting the audit shall 44 not be an employee of the state. The expense of such audit shall be paid from 45 the appropriation to the investment board. 46 The state treasurer shall invest the income funds of the respective 47 endowments and distribute the moneys in the income funds according to legisla- 48 tive appropriation. 49 SECTION 37. That Section 57-721, Idaho Code, be, and the same is hereby 14 1 amended to read as follows: 2 57-721. MANAGEMENT OF PERMANENT ENDOWMENT FUNDS BY INVESTMENT MANAGER(S) 3 -- APPOINTMENT OF CUSTODIAN OF PERMANENT ENDOWMENT FUNDS. The investment 4 board shall select and contract with a minimum of one (1) investment 5 manager(s) to manage the permanent endowment funds and the earnings 6 reserve funds . Such investment manager(s) so selected shall, subject to 7 the direction of the investment board, exert control over the 8 funds as though the investment manager(s) were the owner thereof. 9 The investment board may select and contract with a minimum 10 of one (1) bank or trust company to act as custodian of endowment fund assets 11 and provide safekeeping thereof. 12 SECTION 38. That Section 57-722, Idaho Code, be, and the same is hereby 13 repealed. 14 SECTION 39. That Section 57-723, Idaho Code, be, and the same is hereby 15 amended to read as follows: 16 57-723. INVESTMENT POWERS OF THE BOARD -- APPLICATION OF 17 IDAHO UNIFORM PRUDENTMAN INVESTMENTINVESTOR 18 ACT. Any other sections of the Code notwithstanding, the invest- 19 ment board or its investment manager(s) or custodian(s) shall have the 20 care and control of all investment instruments representing mortgages, bonds, 21 warrants, investments and other securities in which the permanent endow- 22 ment funds and earnings reserve funds of the state shall 23 be invested. 24In exercising its discretion in the selection and purchase of25investments or securities hereinabove authorized, tT he 26 investment board and its investment manager(s) shall be governed 27 by the Idaho uniformPp rudentMan28InvestmentinvestorAa ct 29 (chapter 5, title 68, Idaho Code) , and shall invest and manage the 30 assets of the respective trusts in accordance with that act and the Idaho con- 31 stitution . 32 SECTION 40. That Chapter 7, Title 57, Idaho Code, be, and the same is 33 hereby amended by the addition thereto of a NEW SECTION , to be 34 known and designated as Section 57-723A, Idaho Code, and to read as follows: 35 57-723A. DEPOSIT AND DISTRIBUTION OF EARNINGS RESERVE FUNDS -- INCOME 36 FUNDS -- ADMINISTRATIVE COSTS. (1) As directed by the state board of land com- 37 missioners, the investment board shall distribute the earnings from the 38 investments or securities in accordance with this act and the laws governing 39 the respective endowment funds. Earnings from the investment of permanent 40 endowment funds related to state land grants shall be deposited into each 41 endowment's respective earnings reserve fund for distribution as provided in 42 this section. 43 (2) At least annually, the state board of land commissioners shall dis- 44 tribute moneys constituting earnings reserve funds, in excess of the amount 45 necessary to pay administrative costs, to the income funds of the respective 46 endowments, to each endowment's respective permanent endowment fund or main- 47 tained as a free fund balance in the earnings reserve funds, in amounts to be 48 determined by the state board of land commissioners. 49 (3) Moneys in the earnings reserve funds shall be available for appropri- 15 1 ation by the legislature to pay for administrative costs incurred managing the 2 assets of the endowments including, but not limited to, real property and mon- 3 etary assets. 4 SECTION 41. That Section 57-724, Idaho Code, be, and the same is hereby 5 repealed. 6 SECTION 42. That Chapter 7, Title 57, Idaho Code, be, and the same is 7 hereby amended by the addition thereto of a NEW SECTION , to be 8 known and designated as Section 57-724, Idaho Code, and to read as follows: 9 57-724. DETERMINATION OF GAINS AND LOSSES. Gains and losses shall be 10 determined as follows: 11 (1) The current value of the fund as of the end of the fiscal year, 12 excluding unrealized capital gains and losses; compared to 13 (2) All amounts allocated under section 4, article IX, constitution of 14 the state of Idaho excluding all amounts allocated from the earnings reserve 15 fund. 16 Losses shall be made up from earnings reserve funds or by legislative 17 appropriation. 18 SECTION 43. That Chapter 7, Title 57, Idaho Code, be, and the same is 19 hereby amended by the addition thereto of a NEW SECTION , to be 20 known and designated as Section 57-724A, Idaho Code, and to read as follows: 21 57-724A. EARNINGS DEFINED. "Earnings" shall mean all revenues generated 22 from the management of endowment lands and their related endowment funds 23 including, but not limited to, timber sale proceeds, lease fees, interest, 24 dividends, and net realized capital gains and losses. "Earnings" does not 25 include mineral royalties, land sale proceeds, or unrealized gains or losses 26 from the investment of endowment funds. 27 SECTION 44. That Section 57-725, Idaho Code, be, and the same is hereby 28 amended to read as follows: 29 57-725.SUMMARYREPORT S TOLEGISLATURE30THE STATE BOARD OF LAND COMMISSIONERS . The invest- 31 ment board shall makea summaryreport s to 32 thestate affairs committees of the senate and the house of representa-33tives within fourteen (14) days after a regular session of the legislature34convenes of all securities and investments sold, purchased or acquired by the35permanent endowment funds of the state since the previous report. The report36shall further include the net profit or loss, if any, as a result of all sales37or purchases of such securities and investments.38The summary report shall include a status report of the investments held39at the end of the last fiscal year of the state, and shall further report on40the overall performance of the funds under the control of the board, compared41to the overall market and/or comparable selected funds or investment42portfolios, including a comparison of the performance of the outside invest-43ment manager and the performance of the staff investment trustee44 state board of land commissioners as directed by the state board of land com- 45 missioners . 46 SECTION 45. That Section 58-104, Idaho Code, be, and the same is hereby 47 amended to read as follows: 16 1 58-104. STATE LAND BOARD -- POWERS AND DUTIES. The state board of land 2 commissioners shall have power: 3 1. To exercise the general direction, control and disposition of the pub- 4 lic lands of the state. 5 2. To appoint its executive officer, the director of the department of 6 lands. 7 3. To perform legislative functions not inconsistent with law and to del- 8 egate to its executive officer and his assistants the execution of all poli- 9 cies adopted by it. 10 4. To review upon appeal all decisions of the director of the department 11 of lands in contested matters. 12 5. To determine the policy, direct the work to be undertaken and appro- 13 priate from its funds the money necessary to carry out such work. 14 6. To prescribe rules, not inconsistent with law, for the government of 15 the department, the conduct of its employees and clerks, the distribution and 16 performance of its business and the custody, use and preservation of the 17 records, papers, books, documents, and property pertaining thereto. 18 7. To engage in reseeding and reforestation programs on the public lands 19 of the state. 20 8. To exchange any public lands of the state, over which the board has 21 power of disposition and control for lands of equal value, the title to which, 22 or power of disposition, belongs or is vested in the governing body or board 23 of trustees of any state governmental unit, agency or institution. 24 9. To regulate and control the use or disposition of lands in the beds of 25 navigable lakes, rivers and streams, to the natural or ordinary high water 26 mark thereof, so as to provide for their commercial, navigational, recre- 27 ational or other public use; provided, that the board shall take no action in 28 derogation of or seeking to interfere with the riparian or littoral rights of 29 the owners of upland property abutting or adjoining such lands; except that 30 when necessary to provide for the highest and best use of such lands for com- 31 mercial, navigational, recreational or other public purposes, the board may 32 acquire the riparian or littoral rights of upland owners by purchase or gift. 33 The term "natural or ordinary high water mark" as herein used shall be defined 34 to be the line which the water impresses on the soil by covering it for suffi- 35 cient periods to deprive the soil of its vegetation and destroy its value for 36 agricultural purposes. Provided that this definition shall not be construed so 37 as to affect or change the vested property rights of either the state of Idaho 38 or of riparian or littoral property owners. Lands lying below the meander line 39 of a lake bed encompassing a national wildlife refuge as established under the 40 authority of the Migratory Bird Conservation Act of February 18, 1929 (45 41 Stat. 1222), as amended, or the Fish and Wildlife Coordination Act (48 Stat. 42 401), as amended, or the Fish and Wildlife Act of 1956 (70 Stat. 1119), as 43 amended (16 USC 742a through 742i), are not subject to the application of this 44 act. 45 10. To enter into a joint exercise of powers agreement with the United 46 States forest service in the department of agriculture, pursuant to section 47 67-2328, Idaho Code. 48 11. To direct and oversee the conduct and operations of the endow- 49 ment fund investment board and the Idaho department of lands. 50 12. To appoint and consult with expert advisors for each critical function 51 for which the state board of land commissioners has responsibility. In this 52 context, the term "expert advisor" shall mean a person engaged in the business 53 for which he holds himself out to be an expert and who is experienced in that 54 field. 55 13. Strategically plan and establish policies to coordinate the management 17 1 of state lands with the investment goals of the permanent endowment funds and 2 earnings reserve funds. 3 14. To provide reports of the status and performance of state endowment 4 lands and the respective endowment funds to the state affairs committees of 5 the senate and the house of representatives within fourteen (14) days after a 6 regular session of the legislature convenes. 7 15. To make distributions to endowment income funds as provided in section 8 57-723A, Idaho Code. 9 SECTION 46. That Section 58-133, Idaho Code, be, and the same is hereby 10 amended to read as follows: 11 58-133. ACQUISITION, SALE, LEASE, EXCHANGE OR DONATION OF PUBLIC LANDS 12 -- CREATION AND OPERATION OF LAND BANK FUND . (1) 13 The state board of land commissioners may select and purchase, lease, receive 14 by donation, hold in trust, or in any manner acquire for and in the name of 15 the state of Idaho such tracts or leaseholds of land as it shall deem proper, 16 and after inventory and classification as provided herein, shall determine the 17 best use or uses of said lands: provided, however, that all state-owned lands 18 classified as chiefly valuable for forestry, reforestation, recreation and 19 watershed protection are hereby reserved from sale and set aside as state for- 20 ests. 21 (2) The proceeds from the sale of state endowment land may be 22 deposited into a fund which shall be known as the "land bank fund," which is 23 hereby created in the state treasury for the purpose of temporarily holding 24 proceeds from land sales pending the purchase of other land for the benefit of 25 the beneficiaries of the endowment. A record shall be maintained showing sepa- 26 rately from each of the respective endowments the moneys received from the 27 sale of endowment lands. Moneys from the sale of lands which are a part of an 28 endowment land grant shall be used only to purchase land for the same endow- 29 ment. 30 (3) All moneys deposited in the land bank fund, including earnings on 31 those moneys, are hereby continually appropriated to the state board of land 32 commissioners for the purposes enumerated in this section. The state board of 33 land commissioners may hold proceeds from the sale of land in the land bank 34 fund for a period not to exceed two (2) years from the effective date of sale. 35 If, by the end of the second year, the proceeds from the land sale have not 36 been encumbered to purchase other land within the state, the proceeds shall be 37 deposited in the permanent endowment fund of the respective endowment along 38 with any earnings on the proceeds from the land sale, unless the period is 39 extended by the legislature. 40 SECTION 47. That Section 58-140, Idaho Code, be, and the same is hereby 41 repealed. 42 SECTION 48. That Section 58-316, Idaho Code, be, and the same is hereby 43 amended to read as follows: 44 58-316. FORFEITURE OF RIGHTS OF DELINQUENT PURCHASER -- REINSTATEMENT -- 45 DISPOSITION OF PURCHASE MONEY. If any purchaser of state land after receiving 46 a certificate of purchase, as provided in this chapter, shall fail to make any 47 of the payments stipulated therein, and the same remains unpaid for thirty 48 (30) days after the time when it should have been paid as specified in such 49 certificate, the director of the department of lands shall, by certified let- 50 ter addressed to such delinquent purchaser at his last known post-office 18 1 address, notify such purchaser of such delinquency and of the amount due, and 2 that unless such amount be paid within sixty (60) days after the date of mail- 3 ing such letter and notice, the board will declare all rights of the purchaser 4 in and to said land forfeited and the certificate and contract relating 5 thereto annulled. 6 After the expiration of said period of sixty (60) days, the state board of 7 land commissioners shall declare such forfeiture, and shall annul said con- 8 tract and certificate. Such action of the board shall be recorded in the min- 9 utes of the proceedings of the board. When such forfeiture shall have been 10 declared and entered in the minutes, as hereinbefore provided, all rights of 11 such purchaser in and to said lands shall be and are extinguished and the 12 state board of land commissioners may sell the land again: provided, that 13 unless other disposition has meanwhile been made of the land, said state board 14 of land commissioners may, upon application of the former purchaser, if such 15 application is made within two (2) years after the certificate has been can- 16 celed, reinstate any such canceled certificate upon compliance by the pur- 17 chaser with such conditions as the board may impose. Such conditions to be 18 imposed by the board shall include the funding of delinquent instalments of 19 principal and interest accrued to the date of reinstatement, by distributing 20 the same in annual payments, to commence with the expiration of the original 21 period covered by the contract of sale, or any extension or extensions 22 thereof, such deferred payments to draw interest from the date of the rein- 23 statement of the certificate; but the board may, in its discretion, impose 24 other conditions, and may, in its discretion, require the payment of such 25 delinquencies in cash at the time of reinstatement. On reinstatement being 26 made the board may, in its discretion, give credit to the purchaser, as for 27 interest paid on his contract, of any amounts which may have been paid by the 28 purchaser as rent of the land during the period of the cancellation of his 29 certificate. Any and all reinstatements of certificates of purchase of state 30 lands heretofore made by the state board of land commissioners are hereby 31 legalized and validated: provided further, that in case of such default and 32 declaration of forfeiture except as provided for in this section, all previous 33 payments made by a purchaser on account of such land shall be forfeited to the 34 state, and the title and right of possession to such land shall be in the 35 state as if no sale had ever been made. 36 All purchase moneys arising from the sale of state land shall without 37 delay be paid by the director of the department of lands to the treasurer who 38 shall receipt for the same, and the same shall be credited by 39him creditedthe treasurer to thepermanent40land bank fund to which the land sold belonged. All41interestearnings on such money shall be paid forthwith by 42 the director to the state treasurer,andbe by the trea-43surercredited by the treasurer to theincome44 land bank fund to which the land belonged: provided, that 45 moneys arising from the sale of state land and earnings on those moneys shall 46 be managed by the state board of land commissioners pursuant to section 47 58-133, Idaho Code; and providedhoweverfurther 48 , that upon the application of any such owner of a certificate of pur- 49 chase of state land, filed with the director before the expiration of the 50 sixty (60) days limited in said notice, showing by affidavit, or otherwise, 51 that he is unable to pay the amount then due, or that it would work great 52 hardship upon him to be required to make such payment at that time, and stat- 53 ing that he believes he will be unable to make such payment on or before 54 November first of the current year, the state board of land commissioners may 55 extend the time of payment of the amount then due to November first succeed- 19 1 ing: provided, that in case of such extension the purchaser shall pay interest 2 on the amount due from January first of the current year to the date of pay- 3 ment at the rate per annum, set by the state board of land commissioners, such 4 interest to be part of the amount payable. Provided, the state board of land 5 commissioners may, in its sole discretion, enter into a supplemental agreement 6 with any owner and holder of a sale certificate on state land, by the terms of 7 which all delinquent payments of principal and interest due on such certifi- 8 cate may be deferred beyond the end of the term of such certificate, or any 9 prior extension thereof, a number of years equal to the period of such delin- 10 quency. The said sum so deferred shall draw interest the same as if it were 11 originally a part of the purchase price named in the sale certificate from the 12 date of the supplemental certificate herein referred to until paid. The forms, 13 terms and conditions of such supplemental agreement, and the form of the 14 application therefor, shall be as prescribed by the board. Any such supplemen- 15 tal agreement as herein provided, and any agreement reinstating a canceled 16 certificate, as herein provided, shall be deemed a part of the original sale 17 certificate. 18 SECTION 49. That Section 66-1101, Idaho Code, be, and the same is hereby 19 repealed. 20 SECTION 50. That Chapter 11, Title 66, Idaho Code, be, and the same is 21 hereby amended by the addition thereto of a NEW SECTION , to be 22 known and designated as Section 66-1101, Idaho Code, and to read as follows: 23 66-1101. MENTAL HOSPITAL PERMANENT ENDOWMENT FUND. (1) There is estab- 24 lished in the state treasury the mental hospital permanent endowment fund. 25 This fund is perpetually appropriated for the beneficiaries of the endowment. 26 The fund shall be managed and invested by the endowment fund investment board 27 according to law and the policies established by the state board of land com- 28 missioners. The fund principal shall forever remain intact. The fund shall be 29 a permanent fund and shall consist of the following: 30 (a) Proceeds from the sale of lands granted to the state of Idaho under 31 the provisions of section 11 of the Idaho Admission Bill, 26 Stat. L. 215, 32 ch. 656, known at the time of admission as insane asylum lands, and lands 33 granted in lieu thereof; 34 (b) Proceeds of royalties from the extraction of minerals on mental hos- 35 pital lands owned by the state; 36 (c) Moneys allocated from the mental hospital earnings reserve fund. 37 (2) Provided however, that proceeds from the sale of mental hospital 38 lands may be first deposited into the land bank fund established in section 39 58-133, Idaho Code, to be used to acquire other lands within the state for the 40 benefit of beneficiaries of the mental hospital endowment. If the land sale 41 proceeds are not used to acquire other lands in accordance with section 42 58-133, Idaho Code, the proceeds shall be deposited into the mental hospital 43 permanent endowment fund along with any earnings on the proceeds. 44 (3) Earnings from the investment of the mental hospital permanent endow- 45 ment fund shall be distributed according to the provisions of section 57-723A, 46 Idaho Code. 47 SECTION 51. That Chapter 11, Title 66, Idaho Code, be, and the same is 48 hereby amended by the addition thereto of a NEW SECTION , to be 49 known and designated as Section 66-1101A, Idaho Code, and to read as follows: 50 66-1101A. MENTAL HOSPITAL EARNINGS RESERVE FUND. (1) There is established 20 1 in the state treasury the mental hospital earnings reserve fund. The fund 2 shall be managed and invested by the endowment fund investment board according 3 to law and the policies established by the state board of land commissioners. 4 The fund shall consist of the following: 5 (a) Earnings of the mental hospital permanent endowment fund, created to 6 receive moneys from the insane asylum endowment provided in section 11 of 7 the Idaho Admission Bill, 26 Stat. L. 215, ch. 656; 8 (b) Proceeds of the sale of timber growing upon mental hospital lands; 9 (c) Proceeds of leases of mental hospital lands; 10 (d) Proceeds of interest charged upon deferred payments on mental hospi- 11 tal lands or timber on those lands; and 12 (e) All other proceeds received from the use of mental hospital endowment 13 lands and not otherwise designated for deposit in the mental hospital per- 14 manent endowment fund. 15 (2) Moneys shall be distributed out of the mental hospital earnings 16 reserve fund only to support the beneficiaries of the mental hospital endow- 17 ment, including distributions by the state board of land commissioners to the 18 mental hospital permanent endowment fund and the mental hospital income fund; 19 provided, that funds shall not be appropriated by the legislature from the 20 mental hospital earnings reserve fund except to pay for administrative costs 21 incurred managing the assets of the mental hospital endowment including, but 22 not limited to, real property and monetary assets. 23 SECTION 52. That Section 66-1102, Idaho Code, be, and the same is hereby 24 repealed. 25 SECTION 53. That Chapter 11, Title 66, Idaho Code, be, and the same is 26 hereby amended by the addition thereto of a NEW SECTION , to be 27 known and designated as Section 66-1102, Idaho Code, and to read as follows: 28 66-1102. MENTAL HOSPITAL INCOME FUND. There is established in the state 29 treasury the mental hospital income fund. The fund shall consist of all moneys 30 distributed from the mental hospital earnings reserve fund and from other 31 sources as the legislature deems appropriate. Moneys in the mental hospital 32 income fund shall be used for the benefit of the beneficiaries of the endow- 33 ment and distributed to current beneficiaries of the mental hospital endowment 34 pursuant to legislative appropriation. 35 SECTION 54. That Section 66-1103, Idaho Code, be, and the same is hereby 36 repealed. 37 SECTION 55. That Chapter 11, Title 66, Idaho Code, be, and the same is 38 hereby amended by the addition thereto of a NEW SECTION , to be 39 known and designated as Section 66-1103, Idaho Code, and to read as follows: 40 66-1103. CHARITABLE INSTITUTIONS PERMANENT ENDOWMENT FUND. (1) There is 41 established in the state treasury the charitable institutions permanent endow- 42 ment fund. This fund is perpetually appropriated for the beneficiaries of the 43 endowment. The fund shall be managed and invested by the endowment fund 44 investment board according to law and the policies established by the state 45 board of land commissioners. The fund principal shall forever remain intact. 46 The fund shall be a permanent fund and shall consist of the following: 47 (a) Proceeds from the sale of lands granted to the state of Idaho for 48 charitable, educational, penal and reformatory institutions by the Idaho 49 Admission Bill, 26 Stat. L. 215, ch. 656, and lands granted in lieu 21 1 thereof; 2 (b) Proceeds of royalties from the extraction of minerals on charitable 3 institutions endowment lands owned by the state; 4 (c) Moneys allocated from the charitable institutions earnings reserve 5 fund; 6 (2) Provided however, that proceeds from the sale of charitable institu- 7 tions endowment lands may be first deposited into the land bank fund estab- 8 lished in section 58-133, Idaho Code, to be used to acquire other lands within 9 the state for the benefit of beneficiaries of the charitable institutions 10 endowment. If the land sale proceeds are not used to acquire other lands in 11 accordance with section 58-133, Idaho Code, the proceeds shall be deposited 12 into the charitable institutions permanent endowment fund along with any earn- 13 ings on the proceeds. 14 (3) Earnings from the investment of the charitable institutions permanent 15 endowment fund shall be distributed according to the provisions of section 16 57-723A, Idaho Code. 17 SECTION 56. That Section 66-1104, Idaho Code, be, and the same is hereby 18 repealed. 19 SECTION 57. That Chapter 11, Title 66, Idaho Code, be, and the same is 20 hereby amended by the addition thereto of a NEW SECTION , to be 21 known and designated as Section 66-1104, Idaho Code, and to read as follows: 22 66-1104. CHARITABLE INSTITUTIONS EARNINGS RESERVE FUND. (1) There is 23 established in the state treasury the charitable institutions earnings reserve 24 fund. The fund shall be managed and invested by the endowment fund investment 25 board according to law and the policies established by the state board of land 26 commissioners. The fund shall consist of the following: 27 (a) Earnings of the charitable institutions permanent endowment fund; 28 (b) Proceeds from the sale of timber growing upon charitable institutions 29 endowment lands; 30 (c) Proceeds of leases of charitable institutions endowment lands; 31 (d) Proceeds of interest charged upon deferred payments on charitable 32 institutions endowment lands or timber on those lands; and 33 (e) All other proceeds received from the use of charitable institutions 34 endowment lands and not otherwise designated for deposit in the charitable 35 institutions permanent endowment fund. 36 (2) Moneys shall be distributed out of the charitable institutions earn- 37 ings reserve fund only to support the beneficiaries of the charitable institu- 38 tions endowment, including distributions by the state board of land commis- 39 sioners to the charitable institutions permanent endowment fund and the chari- 40 table institutions income fund; provided, that funds shall not be appropriated 41 by the legislature from the charitable institutions earnings reserve fund 42 except to pay for administrative costs incurred managing the assets of the 43 charitable institutions endowment including, but not limited to, real property 44 and monetary assets. 45 SECTION 58. That Section 66-1105, Idaho Code, be, and the same is hereby 46 repealed. 47 SECTION 59. That Chapter 11, Title 66, Idaho Code, be, and the same is 48 hereby amended by the addition thereto of a NEW SECTION , to be 49 known and designated as Section 66-1105, Idaho Code, and to read as follows: 22 1 66-1105. CHARITABLE INSTITUTIONS INCOME FUND. There is established in the 2 state treasury the charitable institutions income fund. The fund shall consist 3 of all moneys distributed from the charitable institutions earnings reserve 4 fund and from other sources as the legislature deems appropriate. Moneys in 5 the charitable institutions income fund shall be used for the benefit of the 6 beneficiaries of the endowment and distributed to current beneficiaries of the 7 charitable institutions endowment pursuant to legislative appropriation. 8 SECTION 60. That Chapter 57, Title 67, Idaho Code, be, and the same is 9 hereby amended by the addition thereto of a NEW SECTION , to be 10 known and designated as Section 67-5779, Idaho Code, and to read as follows: 11 67-5779. PUBLIC BUILDINGS PERMANENT ENDOWMENT FUND. (1) There is estab- 12 lished in the state treasury the public buildings permanent endowment fund. 13 This fund is perpetually appropriated for the beneficiaries of the endowment. 14 The fund shall be managed and invested by the endowment fund investment board 15 according to law and the policies established by the state board of land com- 16 missioners. The fund principal shall forever remain intact. The fund shall be 17 a permanent fund and shall consist of the following: 18 (a) Proceeds of the sale of lands granted to the state of Idaho by the 19 United States government in the Idaho Admission Bill, 26 Stat. L. 215, ch. 20 656, known as public buildings endowment lands, and lands granted in lieu 21 thereof; 22 (b) Proceeds of royalties arising from the extraction of minerals on pub- 23 lic buildings endowment lands owned by the state; and 24 (c) Moneys allocated from the public buildings earnings reserve fund. 25 (2) Proceeds from the sale of public buildings endowment lands may first 26 be deposited into the land bank fund established in section 58-133, Idaho 27 Code, to be used to acquire other lands within the state for the benefit of 28 the beneficiaries of the public buildings endowment. If the land sale proceeds 29 are not used to acquire other lands in accordance with section 58-133, Idaho 30 Code, the land sale proceeds shall be deposited into the public buildings per- 31 manent endowment fund along with any earnings on the proceeds. 32 (3) Earnings from the investment of the public buildings permanent endow- 33 ment fund shall be distributed according to the provisions of section 57-723A, 34 Idaho Code. 35 SECTION 61. That Chapter 57, Title 67, Idaho Code, be, and the same is 36 hereby amended by the addition thereto of a NEW SECTION , to be 37 known and designated as Section 67-5780, Idaho Code, and to read as follows: 38 67-5780. PUBLIC BUILDINGS EARNINGS RESERVE FUND. (1) There is established 39 in the state treasury the public buildings earnings reserve fund. The fund 40 shall be managed and invested by the endowment fund investment board according 41 to law and the policies established by the state board of land commissioners. 42 The fund shall consist of the following: 43 (a) All earnings of the public buildings permanent endowment fund; 44 (b) Proceeds of the sale of timber growing upon public buildings endow- 45 ment lands; 46 (c) Proceeds of leases of public buildings endowment lands; 47 (d) Proceeds of interest charged upon deferred payments on public build- 48 ings endowment lands or timber on those lands; and 49 (e) All other proceeds received from the use of public buildings endow- 50 ment lands and not otherwise designated for deposit in the public build- 51 ings permanent endowment fund. 23 1 (2) Moneys shall be distributed out of the public buildings earnings 2 reserve fund only to support the beneficiaries of the public buildings endow- 3 ment, including distributions by the state board of land commissioners to the 4 public buildings permanent endowment fund and the public buildings income 5 fund; provided, that funds shall not be appropriated by the legislature from 6 the public buildings earnings reserve fund except to pay for administrative 7 costs incurred managing the assets of the public buildings endowment includ- 8 ing, but not limited to, real property and monetary assets. 9 SECTION 62. That Chapter 57, Title 67, Idaho Code, be, and the same is 10 hereby amended by the addition thereto of a NEW SECTION , to be 11 known and designated as Section 67-5781, Idaho Code, and to read as follows: 12 67-5781. PUBLIC BUILDINGS INCOME FUND. There is established in the state 13 treasury the public buildings income fund. The fund shall consist of all 14 moneys distributed from the public buildings earnings reserve fund and from 15 other sources as the legislature deems appropriate. Moneys in the public 16 buildings income fund shall be used for the benefit of the beneficiaries of 17 the endowment and distributed to current beneficiaries of the public buildings 18 endowment pursuant to legislative appropriation. 19 SECTION 63. This act shall be in full force and effect on and after July 20 1, 2000, provided the United States Congress has approved amendments to Sec- 21 tion 5 of the Idaho Admission Bill, 26 Stat. L. 215, ch. 656, regarding sale 22 or lease of school lands; and the state board of canvassers has certified that 23 amendments to Sections 3, 4, 8 and 11 of Article IX of the Constitution of the 24 State of Idaho have been adopted at the general election of 1998 regarding 25 funds related to the public school endowment, disposition of school lands, and 26 investing of permanent endowment funds. 27 Following the successful occurrence of the foregoing events, the governor 28 shall issue a proclamation declaring that the described events have occurred 29 and the dates of the events, and this act shall be in full force and effect on 30 and after the date described. 31 Upon enactment, the state controller shall transfer all fund balances from 32 the improvement funds to the respective earnings reserve funds.
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STATEMENT OF PURPOSE
RS 07949
This legislation is recommended by the Legislative Council Interim Committee on Endowment
Fund Investment Reform. This legislation provides statutory changes that work together with changes the
Committee has proposed for the Idaho Admission Bill and the Constitution of the State of Idaho.
Currently, the State Board of Land Commissioners manages endowment lands. The Endowment
Fund Investment Board manages money made from endowment lands. The boards do not coordinate
their actions. The result is an inefficient asset management program that exposes the State to claims that
it has breached its fiduciary duty to the endowment beneficiaries.
This legislation will coordinate management and investment of endowment assets by placing the
Endowment Fund Investment Board within the State Board of Land Commissioners. It requires
management of assets according to certain plans and policies, removes restrictive investment barriers,
and requires a higher level of reporting and accountability than is required now.
This legislation improves management of endowment assets by creating a permanent
endowment fund, an earnings reserve fund and an income fund for each of the nine endowments. The
principal in the permanent endowment funds is protected. The earnings of those funds will be deposited
into the earnings reserve fund, which can be used for investment, to absorb fluctuations in the investment
market, to make distributions, and to pay administrative costs incurred managing endowment assets,
including real property and monetary assets. Use of earnings to pay for administrative costs has been
determined to be a legal use by the Idaho Supreme Court in Moon v. State Board of Land
Commissioners, 111 Idaho 389 (1986). Administrative costs are intended to include all costs of operating,
managing, caring for and improving the endowment assets.
Currently, endowment land sale proceeds have to be deposited directly into the permanent
endowment fund. This legislation allows those proceeds to be temporarily deposited into a Land Bank
Fund to be used to buy other lands for the beneficiaries of the endowments.
FISCAL NOTE
These changes will not increase the financial impact on the General Fund or on local
government. There will be a minimal one-time financial impact associated with the implementation of
the proposed changes. In addition, there will be a financial impact on the endowments as a result of
being required to pay their administrative costs. These financial impacts are expected to be offset,
however, by the greater rates of return expected from the changes permitting improved investment
management.
CONTACTS:
Representative William W. "Bill" Deal Senator Judi Danielson Michael McConnell
House of Representatives Senate Legislative Services
(208) 332-1000 (208) 332-1000 (208) 334-2475
STATEMENT OF PURPOSE/FISCAL NOTE
H 643