Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the School Trust Fund topic
No spam. Unsubscribe anytime.
Senate advances plan to move school trust lands fund toward endowment model
Summary
Senate Bill 109 would shift Utah’s School and Institutional Trust Lands Fund toward an endowment‑style management and set a conservative 4% distribution ceiling; sponsor said the fund is approximately $2 billion and the change aims to balance current distributions with long‑term growth.
The Utah State Senate on the morning calendar advanced Senate Bill 109, a measure that would change how the School and Institutional Trust Lands Fund is managed and how distributions to schools are calculated.
Sponsor Senator Milner told colleagues the trust lands fund has grown substantially and argued the state should manage it more like a modern endowment. "This fund has grown significantly, in the last 25 to 30 years. It is now a $2,000,000,000 fund," Milner said while explaining that the bill would establish a distribution policy based on a rolling 12‑quarter average and cap distributions at a 4% ceiling, with annual review and the ability for the Legislature to adjust the policy if market conditions warrant.
Milner said the change would broaden the fund's investment strategy beyond income‑only instruments so the fund can pursue growth as well as income, enabling larger distributions to schools now while preserving intergenerational equity. Opponents cautioned that moving from interest‑based investments to a broader portfolio can slow nominal fund growth in some years because distributions will increase; supporters said broader diversification could increase long‑term growth potential.
The sponsor answered questions about downside risk and said the proposed policy includes mechanisms for annual review and legislative oversight and that the constitutional amendment requirement would place a ceiling in the state constitution while leaving the exact distribution mechanism to statute.
Vote and next steps
Senate roll call recorded 25 yea, 2 nay, and 2 absent; the bill was advanced to third reading. Because the statutory distribution approach in SB 109 is contingent on a constitutional amendment, the measure will require additional legislative and potentially voter action before its full provisions can be implemented.
Why it matters
The fund supports public schools statewide; moving to an endowment approach would change how much the fund pays out each year and how it is invested. Sponsor statements and fiscal conversations indicate the shift could increase near‑term distributions while seeking to preserve long‑term purchasing power.
What to watch for
Future steps include possible floor amendments, the constitutional amendment process, and subsequent statutory detail specifying the distribution formula, reporting requirements and trustee/investment governance.
