A deal is close that could end a decades-long dispute over state land within the federal Boundary Waters Canoe Area Wilderness.

An advisory committee of state and federal officials, environmental groups, logging and mining interests and local government land officials has met quietly several times in the past year to forge a compromise on a combination land trade and purchase.

They’ll meet again in Sandstone on Wednesday as they near agreement on how to handle nearly 87,000 acres of state land locked inside the 1.1 million-acre BWCAW.

Under the deal, the state would trade about 43,000 acres inside the BWCAW for Superior National Forest federal land outside the wilderness.

The federal government also would purchase another 40,000 or so acres of state land in the BWCAW directly from the state. The money — estimated at about $80 million — would go into the state’s permanent school trust fund that funnels interest earned to school districts across the state.

Another 4,000 acres remain in question.

The state land became locked inside the federal wilderness after Congress drew the most recent boundaries of the BWCAW in 1978. At first, Minnesota officials said they welcomed the opportunity to manage their state lands as part of the wilderness. But over the years, state officials say the land has become de facto federal land, with the state unable to cut trees, mine or otherwise develop the property.

Much of the state land in the BWCAW is “owned” by the Minnesota Legislature’s Permanent School Fund. Money earned from school trust fund land, through such activities as logging and mining, goes to help schools across the state, and the fund was getting nothing from the BWCAW property.

For years, some Iron Range lawmakers and representatives of the timber and mining industries have pushed for a straight land exchange to expand state influence in the area while diminishing federally regulated forest.

But because the state land inside the BWCAW is waterfront property and more valuable, that option would have required more than double the amount of forest land in exchange. That would dramatically reduce the size of the Superior National Forest overall — a move favored by some and strongly opposed by environmental interests.

“A straight land trade just isn’t going to happen,” said Ron Nargang a former assistant Department of Natural Resources commissioner and former state director of the Nature Conservancy who serves as a leader for the advisory committee. “But I think we can make this hybrid plan work.”

The committee forging the agreement is an offshoot of the Permanent School Fund Advisory Committee that’s charged with maximizing return for school trust-fund land across the state, including thousands of the state acres in question in the BWCAW.

Any agreement would require approval from the 2012 Minnesota Legislature and money from Congress. Federal money to buy the state land probably would come from the Land and Water Conservation Fund that’s stocked with federal royalties from off-shore oil drilling.

Identifying parcels outside the BWCAW to trade that all sides could agree on has been the key issue, said Wayne Brandt, executive vice president of the Minnesota Timber Producers forest industry group.

“Both the DNR and the Forest Service have developed some reasonable criteria this time to identify candidate parcels for the exchange,” Brandt said.

Much of the federal land being considered for the trade is at the western, southern and eastern edge of the sprawling Superior forest.

The deal was delayed early this year after the influx of new legislative leaders on the overseeing committee, and again in July when state government shut down. But Nargang said the deal already has “buy-in” from the Dayton administration, Republican officials in the Legislature and from the state’s congressional delegation.

A similar plan for the federal government to purchase all the state land died in the mid-1990s when Iron Range lawmakers vetoed it at the last minute, demanding instead to receive land instead of cash in the trade.

“I think we’re as close to something both sides can accept now as we ever will be,” said Bob Krepps, St. Louis County land commissioner, who serves on the committee. “If we don’t do this now, I don’t think it will ever happen.”

Mining foes raise concerns

Some opponents of copper mining in the region have raised flags, saying at least some of the land that would be traded to the state is in areas of high interest for mining companies. Because the newly state-owned land would be under school trust fund management, mining opponents say there will be pressure to maximize return and ignore environmental concerns.

Indeed, one of the criteria that Department of Natural Resources negotiators have asked for is to receive National Forest land in the trade that already has mineral rights owned by the state. That reconnection of surface and mineral ownership would make the land easier to open for mining and remove any federal review from the mining proposals.

“We are deeply concerned about the long-term impact of removing federal protection from high-quality natural land” proposed for the trade, said Lori Andresen, mining chair for the Sierra Club’s North Star Chapter. The group favors a federal purchase of state land rather than a trade. “We believe that the existing level of protection provided to the Superior National Forest should be maintained, and that the goals of the Minnesota School Trust can be most easily achieved by a full federal buyout of trust lands within the BWCAW.”

Nargang and others said minerals exploration potential is considered but hasn’t been a major factor as the DNR and Forest Service sit down to pick parcels for the exchange.

“I don’t see any indication that the lands are being picked specifically or mining,” Nargang said. “The primary objective has been to get land (outside the BWCAW) that the state can manage, that’s contiguous with other state lands and has access … that can provide some sort of return” for the school trust.

Members of the working group on the BWCAW school trust land issue include Nargang, Krepps, Brandt, Betsy Daub, policy director for Friends of the Boundary Waters Wilderness; Jim Sanders, supervisor of the Superior National Forest; Craig Engwall, northeast region director for the Minnesota DNR; Dan Roark, DNR lands and minerals attorney; Frank Ongaro, president of Mining Minnesota, the copper mining industry group; and Tim Dabney, deputy Superior forest supervisor.

Lake, Cook and St. Louis counties also hold land in the BWCAW, as does the permanent University of Minnesota trust fund. Lake County is just completing a land exchange with the Superior forest for much of its land in the wilderness. Nargang said he would support settling the other county and trust land issues at the same time, if possible.