Opinion ID: 2639445
Heading Depth: 2
Heading Rank: 2

Heading: Does the Constitutional Requirement for Public Auctions Apply to Exchanges?

Text: [¶ 24] The reservation lists three separate questions, each arising under Article 18, Sections 1 and 3 of the Wyoming Constitution. Although presented as a series of discrete parts, the question is really singular: Whether the exchange of school lands without public auction violates Article 18, Sections 1 and 3 of the Wyoming Constitution. [¶ 25] In 1890, Wyoming adopted a constitution which accepted the lands granted to it for educational purposes, with the conditions and limitations that may be imposed by the act or acts of congress, and required that all such lands granted to it could be  disposed of only at public auction. Wyo. Const. art. 18, § 1 (emphasis added). [¶ 26] Article 18, Section 1 of the Wyoming Constitution provides in relevant part: The State of Wyoming hereby agrees to accept the grants of lands heretofore made, or that may hereafter be made by the United States to the state, for educational purposes ... with the conditions and limitations that may be imposed by the act or acts of congress making such grants or donations. Such lands shall be disposed of only at public auction to the highest responsible bidder, after having been duly appraised by the land commissioners, at not less than three-fourths the appraised value thereof, and for not less than $10 per acre.... In addition, Article 7, Section 13 (emphasis added) of the original constitution provided the sale of all [school] lands shall be at public auction ... at such minimum prices (not less than the minimum fixed by congress) as to realize the largest possible proceeds. That section also established a board to manage the lands granted for school purposes. The original constitution also established a different board in Article 18, Section 3 for the direction, control, disposition and care of all lands granted to the state. However, that section did not restrict the manner of disposal or sale of such lands. Likewise, Article 18, Section 3 as amended in 1921 provides for the establishment of a board of land commissioners serving under direction of the legislature as limited by this constitution which shall have direction, control, leasing and disposal of lands of the state granted, or which may be hereafter granted for the support and benefit of public schools, subject to the further limitations that the sale of all lands shall be at public auction, after such delay (not less than the time fixed by congress) in portions at proper intervals of time, and at such minimum prices (not less than the minimum fixed by congress) as to realize the largest possible proceeds. After adoption of the Wyoming Constitution, Congress passed the Act of Admission of the State of Wyoming, 26 Stat. at Large 222, ch. 664 (1890), admitting the State of Wyoming into the Union and granting to it Sections 16 and 36 of every township in Wyoming, including the Teton Village school section, for the support of the common schools with the condition that these sections be disposed of only at public sale. [2] [¶ 27] Pursuant to this grant, Wyoming received 3,543,820.62 acres of land for the purpose of supporting its public schools. See Office of State Lands and Investments Annual Report at 25 (2001). In 1921, the constitution was amended to combine the two land boards into a single board of land commissioners. With that amendment, the public auction requirement of Article 7, Section 13 was imported into a new Article 18, Section 3 and broadened to apply to the sale of all lands rather than just to school lands as provided in the original constitution. The amendment resulted in the two sections of Article 18 utilizing different language for the imposition of the public auction Section 1 referring to disposal and Section 3 referring to sales. [¶ 28] The challengers' argument rests on a simple proposition: The Wyoming Constitution requires a public auction for all sales and disposals of state lands, and an exchange is a form of sale or disposition; therefore, exchanges are subject to the public auction requirement. In our view, the issue is not so simple. The two constitutional provisions are not identical but rather contain different terms of uncertain meaning which are susceptible to incongruent interpretation. Neither provision mentions exchanges of school lands. [¶ 29] The State of Wyoming, through the legislature and the board, the entity constitutionally charged with the responsibility of managing school lands, historically has not interpreted the constitution as requiring public auctions for the exchange of school lands. On the contrary, the legislature has specifically authorized exchanges of school lands for private lands of equal value, and the board has adopted regulations specifying the procedures to be followed to assure lands of equal value are obtained by the state in the course of these exchanges. Pursuant to these statutes and regulations, the state has accomplished the exchange of thousands of acres of school lands over the course of the last century. [¶ 30] The statutes contain detailed and thorough procedures and requirements that must be followed before school lands can be exchanged, with the obvious purpose of assuring that the state and the permanent school fund receive fair value in return for any lands conveyed to a private party. Those statutes provide: § 36-1-107. Exchange of state-owned and privately owned lands The state of Wyoming is also authorized to exchange state-owned lands for privately owned lands. § 36-1-110. Authority of director to effect and complete exchanges The director is hereby authorized and empowered, subject to the approval of the state board of land commissioners, to effect and complete such exchange of state-owned lands for federal-owned lands; and also to effect and complete such exchange of state-owned lands for privately owned lands; and to do any and all things necessary or required to be done by the state of Wyoming in order to enable said state to comply with the provisions of said Taylor Grazing Act and other acts of congress authorizing the exchange of federal-owned lands, and any order, rule or regulation passed or promulgated in pursuance thereof; and to effect and complete the exchange of state-owned lands for privately-owned lands. The board of land commissioners may authorize the purchase of lands only in an amount necessary to effect and complete the exchange of state-owned lands for other lands and only for those lands identified in the authorization of purchase. The board shall not use the power of eminent domain pursuant to W.S. 1-26-801 et seq. to purchase any lands under this section. § 36-1-111. Orders, rules and regulations relative to exchange of lands (a) The board of land commissioners is hereby authorized and empowered to pass and promulgate all such orders, rules and regulations as may be necessary or required relative to the appraisal and valuation of the lands to be exchanged as provided in this act, and to provide for the execution of conveyances, contracts and other instruments pertaining to the exchange of the lands, and to enable the director to effect and complete each exchange of the lands. The board may authorize the purchase of lands only in an amount necessary to effect and complete the exchange of state-owned lands for other lands and only for those lands identified in the authorization of purchase. The board shall not use the power of eminent domain pursuant to W.S. 1-26-801 et seq. to purchase any lands under this section. The board of land commissioners is authorized to promulgate rules and regulations necessary to implement the exchange of state lands on a value for value basis. The exchange program may authorize a cash equalization receipt or payment of up to twenty-five percent (25%) of the value of the lands exchanged. Any receipt shall be deposited into, and any payment shall be made from, the permanent land fund. State lands may be exchanged upon the board's finding the exchange is necessary to: (i) Make state lands more manageable where the lands are not otherwise manageable; (ii) Meet a specific need of a school or community for land; (iii) Better meet the multiple use objectives for the benefit of the trust; or (iv) Realize a clear long term benefit to the trust which substantially exceeds the present and probable future benefit from continued ownership. [¶ 31] Pursuant to the authority granted by these statutes, the board adopted regulations authorizing exchanges of state lands pursuant to specific procedures. In a similar vein, these regulations provide detailed procedures for the exchange of school lands and require that any property acquired by the permanent fund be of equal or greater value than the property conveyed to the private party. [3]