MN HF3900

Proposes a constitutional amendment to Article XI, Section 8 of the Minnesota Constitution, to be submitted to voters at the 2026 state general election, modifying how the permanent school fund is managed and distributed to school districts.

Changes the fund's mandate from "maximum return consistent with perpetuity" to a new standard focused on providing annual distributions while preserving purchasing power and balancing needs of current and future beneficiaries.

Replaces the current income-based distribution method with a formula-based approach: distributable earnings would equal 4.5% of the average net asset value of the permanent school fund over the preceding three fiscal years.

Eliminates the existing 10-year gain/loss apportionment system for securities sales and requires the State Board of Investment director to report total distributable earnings to the Legislative Permanent School Fund Commission and Department of Education.

Statutory changes take effect January 1, 2027, only if voters adopt the constitutional amendment.