School and Public Lands Office History When So uth Dakota b eca me a - - PDF document

2 Agency Presentation - SPL - FY15

Tuesday, February 18, 2014 9:06 AM

South Dakota Office of School and Public Lands

February 20th, 2014 Appropriations Committee Presentation School & Public Lands Budget

School and Public Lands Office History

When South Dakota became a state in 1889, the Federal Government granted the state over 3.5 million a res of land. Township ections 16 and 36 were reserved for sch ool and publi purposes; these are known as Common School Lands. If the sections were alread) settled, the govenunent pro, ided repla ement property known as indemnity lands. Additional property was also provided to be used however the state wished . The South Dakota

• nstitution divided these lands among the tate' universities, the

hool for the Visually Handi apped, the School for the Deaf, State Training School, and the Developmental

enter in. Redfield. To manage these lands and the money generated, th

• nstitution

established the Office of School and Public Lands. According to the

• nstitution, conunon school and indenuuty lands were either to be sold or

leased and the pro e ds deposited in a permanent b.ust fund for edu ation. TI1e prin ipal could be increased, but ne, er diminished. Interest from the fund was to be used for funding

edu ation.

Each year the office returns approximately $10 nullion to school districts and endowed

:iJ.1.stituti.011.s. TI1e money is generated from grazing, nuneral, oil and ga lease , :iJ.1.tere t from

the Permanent Fund, and interest earned on land and sales contracts.

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Surface Division

• a

ar for 5 y ar with a 5 y ar pti n

V r 2800 l ~ uo•c o

760,422.454 acre

• n

tat manag s weed

and p t

• ntrol on

land

tlu·ough the w d and p t fund

• Ex ut

an.d land

• ther agen ies in. state

go mm nt urfa R v nu by Land

COMMON SCHOOL SOUTH DAKOTA STATE UNIVERSITY UNIVERSITY OF SOUTH DAKOTA PUBLIC BUILDINGS SDSU EXPERIMENTAL STATION DOC JUVENILE PROGRAMS SCHOOL FOR THE DEAF SCHOOL FOR THE VISUALLY IMPAIRED REDFIELD HOSPITAL AND SCHOOL SCHOOL OF MINES DAKOTA STATE UNIVERSITY SPRINGFIELD NORTHERN STATE UNIVERSITY REDFIELD SD DEVELOPMENT CENTER CORRECTIONS/PLANKINTON

TOTAL

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$3,454,838.72 S323, 175.37 $95,900.53 $48,017.28 $15,511 .89 $24,364.02 $34,151 .85 $68,364.18 $83,251 .73 $50,264.79 $168,294.04 $69,274.52 $76,653.52 $672.00 $4,331 .20

$4,517,065.64

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Mineral Division

• State owns 5.2 million acres of mineral rights
• 50% of r v nu paid ut annually and 50% to th

SPL Trust Fund Mineral, Oil & Ga L a R ntal Oil & Gas Royalty (12.5 %

)

Mineral, Oil & Gas Bonus Oil & Ga Mi -- Han ou TOTAL $ 242,715.00 $3,298,003.24 $ 244,061.00 $ 35,759.43 $3,820,538.67 Money split $1.9 M paid out and $1.9 M to trust fund

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Permanent Trust Fund

At statehood, the Permanent Trust Fund was e tablished with the intent of providing a continuous sour e of revenue for public s hools, universities and endowed institutions. Proceeds from the sale of land are to be deposited in the fund, which can be added to but never diminished. The interest and dividend generated by the fund are apportion d to s hool distri t , universities, and endowed institutions. Constitutional amendment in 2000 allowed for two things

• 1. Adjust for inflation
• Pr viously r quir d to pay out all in ome
• Land that sold for $20 an acre in 1900 was never adjusted.
• 2. Invest in Stocks through the SD Inveshnent Council
• Previously limited to savings bonds or direct loans
• Much higher growth potential of the fund.

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225 200 175 150 125

J%

100 75 50 25

Asset Growth23 ($ in millions)

'7

M

,-..;

N N

• The permanent fund is tarting to benefit from the year 2000 on titutional

am ndment allowing for inflationary adju tment and inv sting in sto ks. The futur payout will in rea e ignifi antly if the 1narket hold

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Dollars to Education

• K-12 money is earned in previous fiscal year. FY13 payout

is revenue generated in FY12.

• K-12 S h ol in FY13-

$7,422,431.60

• K-12 Schools in FY14-

$8,773,821.56 (18% increase)

• FY14 payout occurred on February 4th, 2014
• Board of R g nt -

$1,441,627.55

• Endowed Institutions-

$548,260.83 Total FY13 $9,412,319.98 Total FY14 $10.7 milli n timat d

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Dollars Returned to Universities

South Dakota Stat Univ rsity Dakota Stat Univ rsity Univ rsity of South Dakota SD S hool of Min s & T hnology Black Hills State University Northern State University TOTAL

$ 548,451.00 $ 173,360.00 $ 236,041.00 $ 127,022.55 $ 173,360.00 $ 183,393.00

$1,441,627.55

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Dollars Returned to Endowed Institutions

Ju v nil

• rr tions

SD & SVH Adnunistrativ Fund R dfi ld D v lop1n nt C nt r S hool for th D af SDSU Experilnental Station S hool for the Visually Handi apped TOTAL

$ 92,642.77 $ 47,063.99

$145,013.94 $ 99,776.87 $ 69,051.26

$ 94,712.00

$548,260.83

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Future of School and Public Lands Revenue

• Surfa

L asing-

• nsist nt, d p ndabl incom will ee som

increases because of den1.and for land and the price of cattle.

• Oil and Gas- Steady increases. FY14 royalties already higher

than FY13. New wells ontinue to be drilled.

• P rrnan nt Fund- R ov r d from th r

ssion and the sto k mark t ra h. Full amount of payouts i starting to b r iv d. Long-term growth of the permanent fund will help adjust for 112 years of lost value due to inflation. This will result in higher p you ts for th futur as th fund grows.

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Other SPL topics

• FY15 Budget- Similar to FY14 budget. No changes from the

Governor's recommendation.

• Dams- House Bill 1034 now in the Senate Appropriations Committee.

HB 1034 extends time deadline on existing funding. Future Topics

• Land Trax Software System update needed in the future
• Ranch Improvements

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