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History of the Michigan Natural Resources Trust Fund
The Michigan Natural Resources Trust Fund (MNRTF) began as the "Kammer Recreational Land Trust Fund Act of 1976" via P.A. 204 of 1976. Act 204 created the Michigan Land Trust Fund (MLTF) program to provide a source of funding for the public acquisition of land for resource protection and public outdoor recreation. Funding was derived from royalties on the sale and lease of state-owned minerals (primarily oil and gas).
On November 6, 1984, Michigan residents voted in favor of Proposal B, which amended the State Constitution and created the MNRTF. The constitutional amendment required that oil, gas, and other mineral lease and royalty payments be placed into the Trust Fund, with proceeds used to both acquire and develop public recreation lands. To implement the constitutional amendment, the Legislature passed the Michigan Natural Resources Trust Fund Act of 1985 (P.A. 101 of 1985, Act 101).
This act stipulated that in any one fiscal year, up to a third of all mineral lease revenues plus the interest and earnings of the MNRTF could be used to purchase land for resource conservation and public outdoor recreation but also to develop outdoor recreation facilities. P.A. 101 of 1985 specified that not less than 25 percent of funds made available from the fund in any fiscal year shall be expended for the acquisition of land and rights in land, and not more than 25 percent of funds made available from the fund in any fiscal year shall be expended for development of public recreation facilities. In addition, P.A. 101 of 1985 authorized the use of the MNRTF to make the annual payments in-lieu of taxes to local units of government that are required under subpart 14 of Part 21 of the Natural Resources and Environmental Protection Act, 451 PA 1994, as amended. The MNRTF is used to meet the DNR's obligations under Part 21 for lands acquired by the DNR with MNRTF assistance.
On November 8, 1994, Michigan voters approved Proposal P, which also amended the State Constitution. The 1994 amendment reversed a previous constitutional provision which allowed the diversion of Trust Fund revenue to the Michigan Strategic Fund. Proposal P also established the State Park Endowment Fund (SPEF) for the operation, maintenance and capital improvements at Michigan's State Parks, and provided for the distribution of $10 million annually in Trust Fund revenues to the new SPEF. The 1994 amendment also raised the maximum amount that could accumulate in the Trust Fund from $200 million to $400 million.
On August 6, 2002, Michigan residents approved Proposal 2. This amendment to Article IX of the Michigan Constitution allows the MNRTF to invest in a wider array of investments and raised the cap on the corpus amount from $400 million to $500 million.
In 2011, the MNRTF balance achieved the statutorily significant level of $500 million. At this point grant-making and related operations of the program began to be solely funded by the interest and earnings of the programs invested funds, as opposed to earlier days when mineral royalties themselves were the source of funding. New revenue from mineral royalties started to be deposited into the SPEF.
With the passage of Proposal 1 in 2020, the Trust Fund board is now able to exercise greater flexibility in balancing funding between acquisition and development projects. This change to the Michigan Constitution allows the board to respond to the state's changing recreation needs by acting more nimbly in its annual project selections. Acquisition and development grants now each receive a minimum of 25% of total funding made available each year, while the remaining 50% can go toward either acquisition or development projects based on the greatest needs and benefits.
Applications for MNRTF assistance are accepted annually. Applications are accepted from both local units of government and state agencies, including the land managing divisions of the Department. Applications are reviewed and scored by the DNR and final grant recommendations are made by the MNRTF Board and submitted to the Legislature for approval and appropriation of funds.