Trust Lands reports record assets and higher school distributions; asks for 2 staff to diversify revenues and audit unclaimed property

The Department of Trust Lands told the Senate Appropriations Committee on Tuesday that its 13 permanent trust funds — led by the Common Schools Trust Fund — are near record values and that distributions to beneficiaries will rise in the next biennium.

Commissioner Joseph Harringer said the department manages about 2.6 million mineral acres and roughly 700,000 surface acres on behalf of state beneficiaries, and that the Common Schools Trust Fund had about $7 billion in investment assets. Using the constitutional distribution formula (10% of the rolling five-year average balance), Harringer said the Common Schools Trust Fund payout to K–12 education is projected at about $585 million for the next biennium — roughly a 17% increase over the current biennium.

Harringer told the committee the department’s investment portfolio is diversified across public equities, private markets, real assets and other allocations and that investment returns have contributed materially to fund growth. He said the portfolio returned about 9.4% for fiscal 2024 and that the department aims for a long-term 6–8% return.

Budget request and new positions: Harringer asked the committee to approve a modest operating proposal that includes two new FTEs: a “diversified revenues officer” to develop non‑oil-and‑gas income streams (carbon storage, renewables, rare‑earth exploration, conservation/soil‑carbon markets) and an unclaimed‑property auditor to increase direct compliance work and internal audits of holder reporting. Harringer said those roles would help the department plan for longer‑term revenue variation; the department projects oil-and-gas revenues could decline around 2030 absent new developments.

Unclaimed property and recent returns: Susan Sommerfeld, who oversees unclaimed-property work for the department, told the committee the program returned nearly $20 million in claims in the current biennium and brought in roughly $40 million in reported property so far this year. She noted one recent payment: the department “recently paid our first $1,000,000 claim,” a stock-certificate case that was returned after a multi-year search.

Operational notes: Harringer said the department has completed a major minerals-management IT upgrade and plans an online customer portal to enable online lease payments and better service for lessees. He also noted turnover after pay-equity adjustments earlier in the session, and said the department is conducting a compensation study that could prompt additional requests.

Ending: Committee members asked for clarifications on land valuation, SIF (Strategic Investment and Improvement Fund) management and how distributions are tied to land parcels and associated trusts. Harringer said the department will provide additional documentation and that the land board will review a pending compensation study before new personnel requests are finalized.