(a) The Alaska Mental Health Trust Authority

1. (1) has a fiduciary obligation to ensure that the assets of the trust are managed consistent with the requirements of the Alaska Mental Health Enabling Act, P.L. 84-830, 70 Stat. 709 (1956);

2. (2) shall contract with the Department of Natural Resources to manage the land assets of the trust; the contract must provide for the recording of at least one conveyance to the authority by quitclaim deed of mental health trust land in each recording district in the state in which mental health trust land is located; a conveyance to the authority is exempt from the platting and surveying requirements of AS 38.04.045(b) and municipal ordinances adopted under AS 29.40; when the Department of Natural Resources manages land assets of the trust under a contract entered into under this paragraph, the department shall

   1. (A) manage in conformity with AS 38.05.801;
   2. (B) consult with the authority before adopting regulations under AS 38.05.801(c);
   3. (C) provide notice to, and consult with, the authority regarding all proposed actions subject to public notice under AS 38.05.945 before giving that public notice;

   4. (D) annually provide the authority with a report including

      1. (i) a description of all land management activities undertaken under this section during the prior year;
      2. (ii) an accounting of all income and proceeds generated from mental health trust land;
      3. (iii) an explanation of the manner in which the income and proceeds were allocated between the mental health trust fund and the mental health trust settlement income account; and
   5. (E) obtain the approval of the authority before exchanging mental health trust land under AS 38.05.801(b)(2); and
3. (3) shall contract with Alaska Permanent Fund Corporation for management of the mental health trust fund.