ID Opinion 02-1 2002-06-05

Did Idaho's AG correct or supplement Opinion 01-4 on the Land Board's authority over the land bank fund?

Short answer: This opinion supersedes Section D.2 of Opinion 01-4 to the extent of conflict with Idaho Code provisions identified in this opinion. The other conclusions of 01-4 (which endowments are eligible, that use is discretionary, and that reasonable acquisition costs may be paid) carry forward unchanged.

Disclaimer: This is an official Idaho Attorney General opinion. AG opinions are persuasive authority but not binding precedent. This summary is for informational purposes only and is not legal advice. Consult a licensed Idaho attorney for advice on your specific situation.

Plain-English summary

This opinion was issued in response to a follow-up request from Idaho Department of Lands Director Winston Wiggins regarding the December 2001 Opinion 01-4. The AG concluded that "Section D.2 of [Opinion 01-4] conflicts with three provisions of the Idaho Code. Accordingly, to the extent Attorney General Opinion No. 01-4 conflicts with this Opinion, it is hereby superseded."

The substantive conclusions are the same as 01-4 in most respects:

Eligible endowments. Same as 01-4: penitentiary, public school, university, scientific school, agricultural college, normal school, mental hospital, and charitable institutions endowments may use the land bank fund. The capitol permanent endowment may not.

Discretionary use. Same as 01-4: Idaho Code § 58-133 says proceeds "may" be deposited, so the Land Board has discretion. Proceeds not deposited go to the appropriate permanent endowment fund under Idaho Code § 57-716.

Costs that may be paid from land bank fund proceeds. This is where the change appears. Opinion 02-1 says that proceeds deposited in the land bank fund may be used to pay reasonable and necessary costs incidental to the acquisition or purchase of new endowment property. Opinion 01-4 had also discussed sale-incidental costs and addressed them in Section D.2; that section is superseded here. The narrow reading is that reasonable acquisition costs are payable from the land bank fund, but sale-incidental costs (which Section D.2 of 01-4 addressed) need to be handled under different statutory authority.

The opinion is otherwise short. The conflict identified in 01-4 was technical, and the AG simply restated the unchanged conclusions and excised the problematic Section D.2 by superseding it.

Currency note

This opinion was issued in 2002. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The land bank fund framework (Idaho Code §§ 57-716, 58-133, 58-138) has been amended since 2002. The Land Board's exercise of trust responsibilities for endowment lands has been the subject of substantial Idaho Supreme Court litigation since this opinion. Anyone advising on current land bank fund administration should consult current statutes and decisions.

Common questions

Q: Why was this opinion issued so soon after 01-4?
A: Because the Department of Lands or the AG identified that Section D.2 of Opinion 01-4 conflicted with three Idaho Code provisions. Rather than amend the prior opinion in place, the AG issued a new opinion superseding the conflicting section.

Q: What's still good in Opinion 01-4?
A: Sections A and B (which endowments are eligible; the discretionary nature of land bank fund use). Section C (trust principles allowing reasonable cost deductions) carries forward in modified form here. Section D.2 (whatever it said about specific costs) is superseded.

Q: Why does this matter for endowment land management?
A: Because the Land Board administers federally granted endowment lands as trustee for named beneficiaries (public schools, universities, etc.). The trust dollars are real, and the question of how proceeds may be used (held in the land bank fund for reinvestment versus deposited in the permanent endowment fund versus spent on sale-related costs) directly affects the corpus available for the beneficiaries.

Background and statutory framework

See Opinion 01-4 for the broader framework. This opinion is a correction to one section of the earlier opinion. The Land Board administers endowment lands as trustee under Idaho Const. art. IX and the federal Admission Acts.

Citations and references

Statutes: Idaho Code §§ 57-716, 58-133, 58-138.

Related opinion: Opinion 01-4 (December 18, 2001) is partially superseded by this opinion.

Source

Landing page: https://www.ag.idaho.gov/office-resources/opinions/
Original PDF: https://ag.idaho.gov/content/uploads/2018/04/Op02-01.pdf

Original opinion text

ATTORNEY GENERAL OPINION NO. 02-1

To: Winston A. Wiggins, Director
Idaho Department of Lands
STATEHOUSE MAIL

Per Request for Attorney General's Opinion

INTRODUCTION

In 2001, the Idaho Department of Lands ("Department") requested a formal opinion from this office regarding aspects of the newly created land bank fund. On December 18, 2001, this office issued Attorney General Opinion No. 01-4. Section D.2 of that Opinion conflicts with three provisions of the Idaho Code. Accordingly, to the extent Attorney General Opinion No. 01-4 conflicts with this Opinion, it is hereby superseded.

QUESTIONS PRESENTED

You ask the following questions:

A. For which endowments may the State Board of Land Commissioners ("Land Board") utilize the land bank fund created by Idaho Code § 58-133;

B. Is use of the land bank fund mandatory; and

C. What "expenses" of property sale/acquisition, if any, can be paid for out of the proceeds from the sale of endowment lands that are invested in the land bank fund?

CONCLUSIONS

A. Pursuant to various provisions of the Idaho Code, the Land Board may deposit into the land bank fund proceeds from the sale of lands belonging to the penitentiary endowment; public school endowment; university endowment; scientific school endowment; agricultural college endowment; normal school endowment; mental hospital endowment; and charitable institutions endowment. The proceeds from the sale of lands belonging to the capitol permanent endowment, however, may not be placed into the land bank fund.

B. Based on the plain language of Idaho Code § 58-133, which states, "[t]he proceeds from the sale of state endowment land may be deposited into a fund which shall be known as the 'land bank fund'" (emphasis added), the Land Board retains discretion in deciding whether to deposit proceeds from the sale of various parcels of endowment lands into the land bank fund. In the event the Land Board chooses not to deposit the proceeds from the sale of eligible endowment lands into the land bank fund, Idaho Code § 57-716 requires those proceeds to be placed in the appropriate permanent endowment fund.

C. The trusts created by the grants of endowment lands by the federal government are governed by basic trust principles. One such principle is that reasonable costs incurred acquiring trust property may be deducted from the principal of the trust. Accordingly, proceeds deposited in the land bank fund may be used to pay reasonable and necessary costs incidental to the acquisition or purchase of new endowment property.

[The full opinion runs approximately 8 pages and is available in the linked PDF.]

DATED this 5th day of June, 2002.

LAWRENCE G. WASDEN
Attorney General