Opinion ID: 1192540
Heading Depth: 1
Heading Rank: 4

Heading: the board acted outside its constitutional and statutory authority by granting the lease to ingram

Text: IWP contends that the Board violated article IX, section 8 of the Idaho Constitution by leasing the 640 acres of state public land without requiring a competitive bid for the lease of the state public land. IWP argues that a party must actually place a bid at a conflict auction, in order to be considered a qualified applicant for a lease of state public lands. We agree. Article IX, section 8 of the Idaho Constitution describes the Board's duties as follows: It shall be the duty of the [Board] to provide for the location, protection, sale or rental of all the lands ... in such manner as will secure the maximum long term financial return to the institution to which granted or to the state if not specifically granted; provided, that no state lands shall be sold for less than the appraised price. Article IX, section 8 defines the legislature's authority as follows: The legislature shall, at the earliest practical period, provide by law that the general grants of land made by congress to the state shall be judiciously located and carefully preserved and held in trust, subject to disposal at public auction for the use and benefit of the respective object for which said grants of land were made.... IWP argues that the Court's holding in East Side Blaine County Livestock Ass'n v. State Bd. Land Comm'rs, 34 Idaho 807, 198 P. 760 (1921), should be applied in this case. The issue in East Side was whether school land leases had to be offered at a public auction, pursuant to Idaho's constitutional and statutory mandate. East Side, 34 Idaho at 812, 198 P. at 762. The East Side Court held that state school lands are to be leased at public auction to the highest bidder therefore. East Side, 34 Idaho at 814, 198 P. at 762. The East Side Court further held that [t]he dominant purpose of these provisions of the constitution and of the statutes enacted thereunder is that the state shall receive the greatest possible amount for the lease of school lands for the benefit of school funds, and for this reason competitive bidding is made mandatory. Id. The Board is granted broad discretion in determining what constitutes the maximum long term financial return for the schools. Idaho Const. art. IX, § 8. Idaho Code § 58-310 states that the Board shall have power to reject any and all bids made at such auction sales, when in their judgment there has been fraud or collusion, or for any other reason, which in the judgment of said [Board] justified the rejection of said bids.... In Barber Lumber Co. v. Gifford, 25 Idaho 654, 139 P. 557 (1914), the Court upheld the Board's decision to award a timber sale to the lower dollar bidder. The Court held that: From all of the facts in this case, it is clear that the board did not exceed its discretion in making said sale, and as held in Pike v. State Board of Land Commissioners [19 Idaho 268, 113 P. 447 (1911)]..., said board is the trustee or business manager for the state in making the sale of said timber and on matters of policy, expediency and business interest of the state, they were the sole and exclusive judges, so long as they did not run counter to the provisions of the constitution or statute and no fraud was shown. Under the law and the facts of this case, the board had the discretionary power to reject the bid made by Snow and accept the bid made by the Barber Lumber Co. Barber, 25 Idaho at 671, 139 P. at 562-63. In the present case, the Board contends its decision to grant the lease to Ingram was within its discretionary powers and should be upheld. The Board relies upon a Department policy that does not require a former lessee to place a premium bid at a conflict auction, in order for the former lessee to maintain the status quo and its lease of the state public land. The Department's policy presumes, in effect, that a former lessee place a premium bid, despite the fact that the former lessee has not placed a premium bid, above the former lessee's previous rental rate, at a conflict auction. The Department's policy does not require a former lessee to place a premium bid at a conflict auction, in order to remain qualified to receive the lease of state public land. IWP responds arguing that any conflicting applicant for a lease of state public land must place a bid at a conflict auction, in order to be qualified to receive a lease of state public land, pursuant to I.C. § 58-310. In Balderston v. Brady, 17 Idaho 567, 107 P. 493 (1910), the Court considered the scope of the Board's authority: The authority for such an act cannot be found in either the constitution or statute. It is, therefore, perfectly safe to say that no such power exists. We have hereinbefore said that the board must act under the law. It must find authority in the constitution and statute for its acts. No such authority as claimed exists, and it is clear that the state land board has no power to relinquish or surrender the right or title of the state of Idaho to any of its school lands. Balderston, 17 Idaho at 585, 107 P. at 499 (emphasis added). In Tobey v. Bridgewood, 22 Idaho 566, 127 P. 178 (1912), overruled on other grounds by Idaho-Iowa Lateral & Reservoir Co. v. Fisher, 27 Idaho 695, 151 P. 998 (1915), the Court held that the Board had improperly granted the appellant a deed of conveyance of state land perpetually for a reservoir site, without such land being obtained by purchase at a public auction. Tobey, 22 Idaho at 580, 127 P. at 183. The Court stated the following with regard to the Board's action: The question of policy and business expediency which may have been pursued by the state board in the past, and which might be pursued in the future, should not control or guide this court in upholding and sustaining a policy, where such policy is absolutely prohibited by the provisions of the constitution and the laws of this state. The constitution and laws of the state should at all times be followed and upheld and sustained by the courts, and should not be ignored by public officers in the administration of public affairs of the state. Tobey, 22 Idaho at 584, 127 P. at 184-85 (emphasis added). The issue before the Court in this case is whether it was within the Board's discretion to grant the lease to Ingram. Idaho Code § 58-310 is the statutory provision that applies to situations where there are two competing applications filed to lease the same state public land. Idaho Code § 58-310 provides the Board with discretion to reject any bid, for any reason. However, I.C. § 58-310 does not address the situation where the Board has rejected the sole bid placed at a conflict auction, and then granted the lease to a person who appeared, but did not bid, at the conflict auction. The legislative policy for granting leases when two persons have applied for the same lease, is stated in I.C. § 58-310. Idaho Code § 58-310 specifically states that, [w]hen two (2) or more persons apply to lease the same land, the director of the department of lands, or his agent, shall, at a stated time, and at such place as he may designate, auction off and lease the land to the applicant who will pay the highest premium bid therefor. I.C. § 58-310 (emphasis added). The Board's ability to reject any bid is broadly stated: [the Board] shall have power to reject any and all bids made at such auction sales, when in their judgment there has been fraud or collusion, or for any other reason, which in the judgment of said [Board] justified the rejection of said bids....