Opinion ID: 2639449
Heading Depth: 2
Heading Rank: 2

Heading: The Status of School Lands in Wyoming

Text: [¶ 24] Turning to the main issue, we must first decide whether the Wyoming Act of Admission creates a trust obligation with regard to the State's ownership of those lands. As recited above, each state's admission to the Union was a unique situation, negotiated between Congress and the respective territories. There was an evolution in the various states' enabling acts passed by Congress, as well as an evolution in the terms of the states' acceptance of admission. [¶ 25] At one extreme, the United States Supreme Court has ruled that the relatively unrestricted grants to Michigan and Alabama did not create a federal trust as to the school lands but merely a solemn agreement that the lands would be used for the purposes recited. Papasan v. Allain, 478 U.S. 265, 289-90 n. 18, 106 S.Ct. 2932, 2947 n. 18, 92 L.Ed.2d 209 (1986); see also Schmidt, 232 U.S. at 173-74, 34 S.Ct. at 302; Cooper, 59 U.S. (18 How.) at 181-82. At the other extreme, the Supreme Court has ruled that the more restricted land grants to New Mexico and Arizona imposed fiduciary obligations, equivalent to a federally-imposed trust, to manage the lands for the exclusive benefit of the common schools. Lassen, 385 U.S. at 467-68, 87 S.Ct. at 588-89; Ervien, 251 U.S. at 48, 40 S.Ct. at 76. [¶ 26] The United States Court of Appeals for the 10th Circuit has noted that the question of whether a statehood statute creates a federal trust requires a case-specific analysis of the particular state's enabling statute because the history of each state's admission to the Union is unique. Branson Sch. Dist., 161 F.3d at 633. Observing that the Colorado Enabling Act falls somewhere in betweenin both chronology and specificitythe Michigan-Alabama model and the Arizona-New Mexico model, the court ruled that the Colorado act contains a sufficient enumeration of duties to indicate Congress's intent to create a fiduciary relationship between the state and its common schools. Id. at 633-34. The court also found significant the fact that the Colorado Constitution, adopted immediately after the Enabling Act and therefore a contemporaneous expression of the parties' intent, clearly indicated that the land grants shall be ... held in trust subject to disposal, for the use and benefit of the respective objects for which said grants of land were made. Id. at 634-35. [¶ 27] Two years later, the 10th Circuit Court of Appeals reviewed the 1896 Utah Enabling Act's grant of land for a miners' hospital for disabled miners. Dist. 22 United Mine Workers v. Utah, 229 F.3d 982 (10th Cir.2000). Noting Branson's requirement of a case-specific review, the court ruled that Utah's enabling act did not create a trust because the Utah legislature was authorized to dispose of the lands in such manner as the legislature may provide, and this express latitude given to the State of Utah militates against the creation of a trust. Id. at 990. The 10th Circuit's ruling was in accord with Andrus v. Utah, 446 U.S. 500, 507, 100 S.Ct. 1803, 1807, 64 L.Ed.2d 458 (1980), which held that the Utah Enabling Act created a solemn agreement by the state to use its school lands as intended by the federal government, but did not create a trust. [¶ 28] Wyoming's enabling act is similar to Colorado's but differs in two significant respects. The Wyoming act does not specify a minimum sales price for its school lands and expressly authorizes the leasing of the lands in any manner the state legislature provides. Colo. Enabling Act, § 14, 18 Stat. at 476; Wyo. Act of Admission, § 5, 26 Stat. at 22-23. Wyoming's enabling legislation is therefore more in accord with that of Utah, and we therefore conclude that the latitude given the Wyoming legislature likewise militates against the creation of an express trust by the Wyoming Act of Admission. [¶ 29] Turning to the question of whether the Wyoming Constitution creates an express trust of the school lands, we conclude that it does not. The parties cite authority from several states for the proposition that the state constitution, either alone or in concert with the states' enabling acts, creates an express trust in accepting the land grants from Congress. Each of those state constitutions is distinguishable from Wyoming's, however. The Colorado Constitution, as noted by the Branson court, directs its legislature to provide by law that the several grants of land ... shall be ... carefully preserved and held in trust .... 1876 Colo. Const., Art. IX, § 10 (amended 1996); Branson Sch. Dist., 161 F.3d at 635. The South Dakota Constitution likewise provides that all lands and the proceeds from such lands are considered perpetual funds, S. Dak. Const., Art. VIII, § 7, which the South Dakota Supreme Court interpreted as creating an express trust in Kanaly v. State, 368 N.W.2d 819, 823 (S.D.1985). The Oklahoma Constitution recites that that state accepts all grants of land as a sacred trust. Okla. Const., Art. XI, § 1; see also §§ 2, 5. The Utah Constitution states that the lands shall be held in trust for the people, ... for the respective purposes for which they have been or may be granted, donated, devised or otherwise acquired. Utah Const., Art. XX, § 1. [¶ 30] Although Wyoming's Constitution contains a declaration of trust as to the proceeds from the sale of the lands, Wyo. Const. Art. 7, §§ 2, 6, there is no similar declaration as to the land itself as in the states listed above. The delegates would have had available to them the specific trust language of constitutions such as Colorado's, Oklahoma's, Idaho's and Washington's. It is also significant to note in this regard that the Wyoming Constitution, drafted in September 1889 and adopted by vote of the territorial citizenry in November 1889, was available for review by Congress when it passed the Wyoming Act of Admission in July of 1890. Just as it was significant to the Branson court that Colorado, immediately after passage of the Colorado Enabling Act, declared in its constitution that the lands were held in trust, so it is significant that Congress passed the Wyoming Enabling Act knowing that the new Wyoming Constitution limited the declaration of trust to proceeds from the sale of the lands. [¶ 31] The State in its brief cites National Parks & Cons. Ass'n v. Bd. of State Lands, 869 P.2d 909 (Utah 1993), for the proposition that it is irrational to distinguish between the lands and the proceeds of those lands as the corpus of a constitutionally declared trust. However, although such a distinction is not an uncommon one in state constitutions, Utah is the only state to so rule and, in fact, the only state to address the issue. According to one commentator, the issue of whether the school lands are a part of the same trust that applies to the permanent fund remains an open question that a state legislature could answer. Sean E. O'Day, School Trust Lands: The Land Manager's Dilemma Between Educational Funding and Environmental Conservation, A Hobson's Choice?, 8 N.Y.U. Envtl. L.J. 163, 210 (1999); see also, Fairfax, supra, at 826. [¶ 32] A summary of the Wyoming Constitution's provisions regarding the state school lands shows that the lands are accepted for educational purposes; that the board of land commissioners is established with authority to manage, sell or lease the lands as directed by the legislature; that the proceeds from the sale and lease of the lands shall constitute a permanent trust fund, with only the income used for educational purposes; that the lands may be leased on whatever terms the legislature shall prescribe; and that the lands may be sold only at public auction for at least three-quarters of their appraised value. We conclude that the express latitude given the legislature, combined with the limitation of the express trust language to the proceeds from the lands, militate against a constitutionally-created trust in the school lands by the terms of the Wyoming Constitution. [¶ 33] Although neither the Wyoming Act of Admission nor the Wyoming Constitution encumber the school land grants with a trust, the legislature's wide management authority over those lands includes the authority to statutorily declare a trust. Wyo. Stat. Ann. § 36-5-101, et seq. (LexisNexis 2001) (regulating leases of school land grants). In 1996 the legislature commissioned a study of the school lands, see, Final Report and Recommendations of the Select Committee on State Trust Lands, (Wyo.Leg.Serv.Office, Nov. 15, 1996), which resulted in substantial amendment of the leasing statutes during the 1997 session. While the state land grants may have heretofore been informally referred to as trust lands, the 1997 act included the following statement of principles: (a) The legislature endorses the following statements of principle and directs that the board of land commissioners and the director of state lands abide by these statements in the implementation of these statutes: (i) The state land trust, consisting of trust lands, trust minerals and permanent land funds shall be managed under a total asset management policy; (ii) The state land trust is intergenerational. Therefore, the focus is on protecting the corpus for the long term; (iii) Trust land should remain a substantial, integral component of the state land trust portfolio. There is no mandate to sell any trust asset to maximize revenue in the short term; (iv) All leases of trust land shall assure a return of at least fair market value considering the management practices and risk assumed by the lessee when determining fair market value; (v) Investment policies shall ensure that the earning power of the permanent land fund is not reduced from the effect of inflation. 1997 Wyo. Sess. Laws ch. 200, § 3. Section § 36-5-105, amended in the same 1997 Act, directs that the state school lands shall be leased in such manner and to such parties as shall inure to the greatest benefit to the state land trust beneficiaries. Id., § 1. [¶ 34] The use of such explicit trust language in the declaration of principles and the statute clearly indicates the legislature's intention that the land grant be subject to a trust and administered according to the prescribed guidelines. The Association correctly points out in its brief that the referenced language first appeared in 1997, apparently for the proposition that the right to renew takes historical precedence over a later statutory trust. However, because we find it is within the legislature's authority to declare a trust in the school lands, that authority could be exercised at any time, and the chronology of that exercise is not significant in this case, nor is it necessary for us to decide if a statutory trust existed before 1997. It is sufficient to note that the legislature has now declared a trust. It is also not necessary for us to decide whether this Court's use of trust language in Frolander v. Ilsley, 72 Wyo. 342, 264 P.2d 790 (1953), decided the issue or was dicta that merely used a colloquial expression to describe the school lands.