Natural Resources

Lands and Minerals - Real Estate and Minerals Management

Statewide Outcome(s):

Lands and Minerals supports the following statewide outcome(s).

A thriving economy that encourages business growth and employment opportunities.

A clean, healthy environment with sustainable uses of natural resources.

The program operates under the principle that economic prosperity depends on a healthy environment and sustainable use of natural resources

Context:

The Division of Land and Minerals is responsible for three critical economic and environmental areas within the Department of Natural Resources (DNR):

·         management of the department’s 5.5 million acres of state owned land;

·         management of the department’s 12 million acres of state-owned mineral rights;

·         and reclamation of previously mined land.

The Division of Land and Minerals provides services to local units of government and schools throughout the state. The division manages the calculation and payment of Payment in Lieu of Taxes (PILT), which is a local government aid payment established by the Minnesota Legislature in the late 1970s. The payments are made in lieu of property taxes for DNR-owned land and for tax-forfeited lands. The division identifies mineral resources for the financial benefit of local units of government.

The division’s primary customers include the schools and the university; local governments, conservation organizations, businesses, and landowners, and virtually all Minnesota citizens who value business growth, employment opportunities, a healthy environment, and sustainable natural resources.

The division operates on a variety of funding sources including general fund, natural resources fund, cooperative agreements with mining companies, permit fees, and game and fish fund. For more information, see: (http://files.dnr.state.mn.us/aboutdnr/budget/fy12-13/budget_spent.pdf) pages 2-3.

Strategies:

The work of the Division of Land and Minerals is divided into three categories:

·         Real Estate and Land Asset Management – The division implements the departments strategic decisions, including generating revenue for the permanent school trust, relative to purchases, sales and land exchanges. The division manages transactions for road easements, utility licenses, and various leases; pays real estate taxes and special assessments; reviews county proposed tax forfeited land sales; conducts land surveying, staking, and platting for acquisitions; develops plans for monitoring conservation easements; reviews encroachment and adjoining rights; reviews title actions and maintains land records for all DNR managed lands.

·         Mineral Management – The division manages minerals resources owned by the state in order to generate revenue for the permanent school trust fund and the general fund. The division monitors global commodity demand and pricing; establishes equitable royalty rates for state owned minerals; develops mineral resource information to support state mineral lease sales and mining; determines ore quality, generates resource and reserve estimates; conducts field inspections; collects rental and royalties due from exploration and mining on state lands; and reconciles and disburses mineral rental and royalty payments to the appropriate accounts.

·         Mineland Reclamation – The division, as directed by MN statutes, establishes and enforces regulations for reclamation of lands disturbed by mining. Responsibilities include reducing the environmental impacts of mining; ensuring adequate environmental review of proposed developments; issuing permits; ensuring progressive reclamation; enforcing reclamation law; ensuring public review and input to the permitting process; developing mine closure plans and overseeing mine closures.

Results:

The Land and Minerals division monitors a number of performance measures to help track progress in each of the strategic areas described above. Key factors that drive desired outcomes include:

•       Globalization of the mineral industry. The major funding for the school trust fund is from mineral rents and royalties. The impact of the globalization of the mineral industry and attendant commodity pricing will impact the amount of rents and royalties collected.

•       Acceptance of mining. There is considerable debate regarding the mining of precious metals such as platinum, palladium, nickel, gold, silver and copper. The ability to mine these minerals will have a significant impact on the school trust fund.

•       Fee for service. The willingness of citizens and companies to continue to fund government activity through fees may be reaching a turning point. A portion of the activities performed within Lands and Minerals (LAM) are still covered through the general fund. If general funds decline, additional fees will be charged to citizens and companies.

•       Land Record System. DNR is implementing a new Land Record System which will dramatically change our internal processes and will improve communications regarding the status of real estate transactions. The new system requires accurate linking of data from the current system and new system processes must be fully implemented and maintained into the future.

Performance Measures Notes:

1- Comparing averages from FY 2003 through FY 2007 to FY 2008 through FY 2012. Includes fee-title, easement, and condemnation transactions. Given year-to-year variability, the trend is stable. In order to determine the time required to complete land acquisitions, an agreed upon measurement and calculation needs to be established. The new Land Record System will provide a mechanism to track time and to communicate progress regarding the various real estate transactions.

2- Comparing averages from FY 2003 through FY 2007 to FY 2008 through FY 2012

3- Comparing FY 2010 to FY 2011

More information: Strategic Conservation Agenda: Performance and Accountability Report (http://www.mndnr.gov/conservation_agenda/performance)