Subdivision 1.Compensation requirements.

(a) When the revenue generated from school trust land and associated resources is diminished by management practices applied to the land and resources as determined by the commissioner of natural resources, the commissioner must compensate the permanent school fund.

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(b) When generating revenue from school trust land and associated resources will be prohibited by a policy or designation applied to the land and resources as determined by the commissioner, the commissioner must compensate the permanent school fund before the policy or designation is applied.

Subd. 2.Compensation methods.

To compensate the permanent school fund under subdivision 1, the commissioner may use compensation methods that include:

(1) exchanging other land that is compatible with the goal of the permanent school fund under section 127A.31, as allowed under sections 94.343, subdivision 1, and 94.3495, and the Minnesota Constitution, article XI, section 10;

(2) leasing under section 92.50 and according to subdivision 3, with rental payments as compensation; and

(3) condemning the land under section 92.83, with payment of the amount of the award and judgment as compensation.

Subd. 3.Lease terms for compensating fund.

With advice from the school trust lands director according to section 127A.353, subdivision 4, the commissioner may lease school trust land to compensate the permanent school fund. Rental payments received under this subdivision:

(1) must be credited to the forest suspense account as nonqualifying revenue and not subject to cost certification under section 16A.125;

(2) must be paid in full upon executing the lease; and

(3) are determined by the commissioner and subject to review by a licensed appraiser.