This bill proposes an amendment to the Minnesota Constitution regarding the management and distribution of the permanent school fund. The amendment aims to modify Article XI, Section 8, to establish that the fund will be managed as a perpetual financial resource specifically for supporting school districts in Minnesota. It introduces a new distribution policy that focuses on providing annual distributions while preserving the fund's purchasing power over time. The amendment also specifies that the management of the fund will be overseen by a board of investment, which includes the governor and other state officials, and prohibits the use of state funds for underwriting municipal securities.

In addition to the constitutional amendment, the bill amends Minnesota Statutes 2024, specifically section 11A.16, to change the terminology from "income" to "distributable earnings" and outlines the calculation and reporting of these earnings. The bill establishes that 4.5 percent of the average net asset value of the permanent school fund will be used to determine distributable earnings. It also mandates that these earnings be credited to the permanent school fund and transferred to the school endowment fund as necessary. The proposed changes will take effect on January 1, 2027, contingent upon the approval of the constitutional amendment by voters in the 2026 state general election.

Statutes affected:
Introduction: 11A.16