AGO 1984 No. 25 - Oct 19 1984
COLLEGES AND UNIVERSITIES ‑- COMMUNITY COLLEGES ‑- LANDS ‑- ENABLING ACT ‑- USE OF ENABLING ACT LANDS FOR TRUST PURPOSES
(1) Funds generated from the management, sale or other disposition of public lands granted at statehood for charitable, educational, penal and reformatory institutions (CEP & RI) by § 17 of the state's Enabling Act may be appropriated by the legislature for support of specific state institutions.
(2) Designated state institutions may, as well, be allowed by the legislature, in the exercise of reasonable prudence related to fulfillment of the particular trust purpose, to utilize CEP & RI lands themselves for their institutional purposes without cost.
(3) The state's community colleges are among the classes of educational institutions for the benefit of which CEP & RI lands, or revenues derived therefrom, may be applied or appropriated.
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October 19, 1984
Honorable Brian J. Boyle
Commissioner of Public Lands
Public Lands Building
Olympia, Washington 98504
Cite as: AGO 1984 No. 25
By letter previously acknowledged you requested the opinion of this office on several questions relating to the use of public lands granted at statehood for charitable, educational, penal and reformatory institutions (CEP & RI). We paraphase [paraphrase] those questions as follows:
(1) May funds generated from the management, sale or other permanent disposition of CEP & RI lands be appropriated by the legislature for support of specific state institutions?
(2) May designated state institutions be allowed by the legislature, in the exercise of reasonable prudence related to the particular trust purpose, to utilize CEP & RI lands themselves for their institutional purposes without cost?
[[Orig. Op. Page 2]]
(3) Do state community colleges come within the designation of charitable, educational, penal and reformatory institutions?
We answer each of the foregoing questions in the affirmative for the reasons set forth in our analysis.
The lands here involved were received in 1889 by grant from the federal government under § 17 of the State's Enabling Act, 25 U.S. Statutes at Large, 676, chapter 180. Section 17 reads, in relevant part, as follows:
". . . the following grants of land are hereby made, to wit:
". . .
"To the State of Washington: . . . for State charitable, educational, penal, and reformatory institutions, two hundred thousand acres.
". . .
". . . And the lands granted by this section shall be held, appropriated, and disposed of exclusively for the purposes herein mentioned, in such manner as the legislatures of the respective States may severally provide."
Thereafter, the 1893 legislature set aside one‑half of that particular grant1/ for the support of the University of Washington. See, § 9, chapter 122, Laws of 1893; cf., chapter 91, Laws of 1903. [[Orig. Op. Page 3]] That action, in turn, was challenged in State ex rel. Moore v. Callvert, 34 Wash. 58, 74 Pac. 1018 (1904). In essence, it was there argued that since another provision (in § 14 of the Enabling Act) specifically granted other lands for support of the University the existence of that other grant thereby impliedly negated a conclusion that the University could also share in the CEP & RI grant. The Washington Supreme Court, however, rejected that contention and held that no state educational institution was excluded from the § 17 grant. In addition, the Court in sustaining the challenged legislation also, in essence, held that the legislature had the authority to apply proceeds derived from the disposition of CEP & RI lands to the exclusive support of a particular, designated, state institution.
We further note that at about the same time, in another case, CEP & RI lands were held by the court to be subject to the requirement of § 11 of the Enabling Act that proceeds derived from the sale or other permanent disposition of granted lands go into permanent funds for support of the various, eligible, state institutions. State ex rel. Heuston v. Maynard, 31 Wash. 132, 71 Pac. 775 (1903). What that ruling was thereafter understood to mean was (a) that only rental income from the lands or investment income from the particular permanent fund could be spent and (b) that such income could only be used for the support (but not construction) of those institutions. See AGO 59-60 No. 2. Distribution of the available moneys for particular, designated institutions was again, however a matter left up to the discretion of the legislature. Accord,State ex rel. Moore v. Callvert, supra.
Thereafter, § 11 of the Enabling Act was amended by Congress on various occasions. One such amendment, which was adopted in 1962, specifically dealt with Washington's CEP & RI lands and provided that:
". . . proceeds from the sale and other permanent disposition of the two hundred thousand acres granted to the State of Washington for State charitable, educational, penal, and reformatory institutions may be used by such State for the construction of any such institution."
See, Public Law 87-473, 76 U.S. Statutes at Large, page 91. That change was apparently precipitated by the enactment, by our own legislature in 1961, of a measure authorizing the use of CEP & RI [[Orig. Op. Page 4]] funds for debt service on bonds sold to finance (in part) construction of a new state prison.2/
In addition to that 1962 amendment, § 11 was also amended by Congress in 1921, 1932, 1938, 1948, 1952, 1967 and, most recently, 1970. We have prepared, and enclose herewith, a color-coded compilation of all of those amendments for your immediate reference. The full text of § 11 presently reads as follows:
"That all lands granted by this Act shall be disposed of only at public sale after advertising‑-tillable land capable of producing agricultural crops for not less than ten dollars per acre and lands principally valuable for grazing purposes for not less than five dollars per acre. Any of the said lands may be exchanged for other lands, public or private, of equal value and as near as may be of equal area, but if any of the said lands are exchanged with the United States such exchange shall be limited to Federal lands that are surveyed, nonmineral, unreserved public lands within the State, or reserved public lands within the State that are subject to exchange under the laws governing the administration of such Federal reserve public lands.
"All exchanges heretofore made under section 11 of the Act approved February 22, 1889 (25 Stat. 676), as amended by the Act approved May 7, 1932 (47 Stat. 150), for reserved public lands of the United States that were subject to exchange under the law pursuant to which they were being administered and the requirements thereof had been met, are hereby approved to the same extent as though the lands exchanged were unreserved public lands. Except as otherwise provided herein, the said lands may be leased under such regulations as the legislature shall prescribe; leases for the production of minerals, including leases for exploration of oil, gas and other hydrocarbons and the extraction thereof, shall be for such term of years and on such conditions as may be from [[Orig. Op. Page 5]] time to time provided by the legislatures of the respective states; leases for grazing and agricultural purposes shall not be for a term longer than ten years; and leases for the development of hydroelectric power for a term not longer than fifty years. The State may also, upon such as it may prescribe, grant such easements or rights in such lands granted by this Act, as may be acquired in privately owned lands through proceedings in eminent domain: Provided, however, That none of such lands, nor any estate or interest therein, shall ever be disposed of except in pursuance of general laws providing for such disposition, nor unless the full market value of the estate or interest disposed of, to be ascertained in such manner as may be provided by law, has been paid or safely secured to the State.
"With the exception of the lands granted for public buildings, the proceeds from the sale or other permanent disposition of any of the said lands and from every part thereof, shall constitute permanent funds for the support and maintenance of the public schools and the various State institutions for which the lands have been granted, except that the proceeds from the sale and other permanent disposition of the 200,000 acres granted to the State of Washington for State charitable, educational, penal and reformatory institutions may be used by such State for the construction of any such institution. Rentals on leased lands, proceeds from the sale of timber and other crops, interest on deferred payments on land sold, interest on funds arising from these lands, and all other actual income, shall be available for the maintenance and support of facilities, including the retirement of bonds authorized by law for such purposes, and for the maintenance and support of such schools and institutions. Any State may, however, in its discretion, add a portion of the annual income to the permanent funds. The lands hereby granted shall not be subject to preemption, homestead entry, or any other entry under the land laws of the United States, whether surveyed or unsurveyed, but shall be reserved for the purposes for which they have been granted. Notwithstanding the forgoing [foregoing] provisions of this section, each of the States of North Dakota, South Dakota and Washington may pool monies reserved by it from oil and gas and other mineral leasing of said lands. The monies so pooled shall be appropriated among the public schools and the various [[Orig. Op. Page 6]] State institutions in such manner that the public schools and each of such institutions shall receive an amount which bears the same ratio to the total amount appropriated as the number of acres (including any that may have been disposed of) granted for such public schools or for such institutions bears to the total number of acres (including any that may have been disposed of) granted by this Act. Not less than 50 per centum of each such amount shall be covered into the appropriate permanent fund."
We now turn to your questions.
Your first question asks whether funds generated from the management, sale or other permanent disposition of CEP & RI lands may be appropriated by the legislature to support specific institutions. That question is clearly answerable in the affirmative on the basis of State ex rel. Heuston v. Maynard, supra, and State ex rel. Moore v. Callvert, supra. We therefore conclude that this is a matter falling within the discretion of the legislature.
Your second question, in turn, asks:
May designated state institutions be allowed by the legislature, in the exercise of reasonable prudence related to fulfillment of the particular trust purpose, to use CEP & RI lands themselves for their institutional purposes without cost?
It is important to understand that this question assumes the enactment of state legislation expressly authorizing, or requiring, your agency (which administers all public lands) to allow designated educational or other institutions to make actual use of CEP & RI lands without paying rent or some form of purchase price. Cf., House Bill No. 1403 which was considered, but not enacted, by the 1984 Legislature. The legal issue thus raised is whether such state legislation would be in conflict with § 11 of the Enabling Act,supra, and therefore be invalid under the federal supremacy clause.3/ [[Orig. Op. Page 7]]
It should also be understood, at this point, that we are not here considering the ramifications of a cost free use of Enabling Act lands by the state for some purpose other than that for which the particular lands were granted. We have, as you know, previously ruled that in such situations the user agency must fully compensate the applicable trust fund for the full value of the lands, or use thereof, which it receives. See, letter opinion dated April 14, 19644/ relating to the use of trust lands for highway purposes. Moreover, we further note that the rationale of that 1964 opinion (i.e., that such a non-trust use of the lands involves a "disposition") was subsequently applied by the United States Supreme Court, under similar facts, inLassen v. Arizona Highway Department, 385 U.S. 485, 17 L.Ed.2d 515, 87 S.Ct. 584 (1967).
But what if, instead, the lands themselves are to be used by the state for a purpose within the scope of the particular grant; e.g., as building sites for schools, colleges or other eligible state institutions?
In the case of those lands granted to the state by § 10 of the Enabling Act ". . . for thesupport of common schools . . ." (emphasis ours) the answer to that question would appear to be spelled out by the language of the grant provision itself. Lands grantedfor the support of common schools are to be used to produce revenues which are then to be appropriated by the legislature for school support. See, AGO 63-64 No. 6, copy enclosed, at page 6, citing Sheldon v. Purdy, 17 Wash. 135, 49 Pac. 228 (1897).
That qualifying language, however, does not appear in § 17 of the Enabling Act,supra. Therefore, in order to answer your question we must return to § 11 of the Enabling Act (quoted in full above) and, in essence, determine the proper function of that provision. The critical analytical issue, as we view it, is this:
(1) Does § 11 require thatall lands granted by the Enabling Act (and not merely those granted by § 10, supra, for support of the common schools) be used for their particular trust purposes solely through the production of income (or revenue)‑-by sale or lease of the lands or products therefrom and investment of the resulting proceeds‑-which income may then be appropriated to specific, designated, institutions?
[[Orig. Op. Page 8]]
(2) Or, instead, does § 11 simply set forth the standards and procedures which are to governif the state (acting through its legislature), instead of using the lands themselves for trust purposes, decides (in those cases where it has a choice) to sell or otherwise dispose of the lands (or the products therefrom) as the means of utilizing the lands for their specified trust purposes?
If the first of those two interpretations of § 11, and its function, is correct, a state statute such as was proposed by House Bill 1403, supra, would be invalid because it would be in conflict with the Enabling Act‑-and, under the supremacy clause of the U.S. Constitution, the latter (as a federal law) would prevail. On the other hand, if the second reading of § 11, is correct then the lands themselves (unless restricted by the terms of the grant, as in the case of § 10 common school lands) could then lawfully be devoted directly to the trust purposes for which they were granted‑-pursuant, however, to state legislative direction since, in the final analysis, it is clearly the legislature which has the policy-making function regarding the use of the lands to the extent that the Enabling Act affords the state some degree of discretion on the count. Accord, State ex rel. Moore v. Calvert,supra; and see also, in the case of CEP & RI lands, the final sentence of § 17, supra, which (once again) provides that:
". . . the lands granted by this section shall be held, appropriated, and disposed of exclusively for the purposes herein mentioned, in such manneras the legislatures of the respective States may severally provide." (Emphasis supplied)5/ [[Orig. Op. Page 9]]
With those thoughts and questions in mind we have read, and reread, § 11 and pondered its history. Our preparation of the color coded compilation of its numerous amendments has been particularly helpful in obtaining an understanding of the section's function. And what we have concluded, after due and deliberate consideration and debate, is that properly read, § 11 does not come into the picture until, and unless, a decision is made by the state to dispose of the subject lands, or of timber or other products therefrom or some interest therein.
Once that decision is made both the manner of disposition and the application (or use) of the proceeds are then regulated in great detail. Thus, for example, in order to make it possible for the State of Washington to use revenues derived from the disposition of CEP & RI lands for the construction of facilities‑-and not merely for the support of eligible institutions‑-the 1962 amendment to § 11, supra, was deemed to be necessary. But that amendment was not necessary in order to permit the state to use CEP & RI lands, themselves, as building sites for eligible state correctional or educational institutions. Therefore, it is analytically inappropriate to frame the instant question in terms of the scope of the 1962 amendment;i.e., to ask whether that amendment also permitted the legislature to authorize direct utilization of CEP & RI lands by designated institutions. Clearly it did not, but that is because such further authorization was not necessary‑-given the true function of § 11 as we now view it.
There is nothing in § 11 which requires the state to dispose of the subject lands at all. And that being the case, we find no impediment therein to the enactment of state legislation, under the above‑quoted final sentence of § 17, supra, pursuant to which the lands granted by that section could, themselves, be used for eligible institutional purposes without cost. In essence, that concluding sentence of § 17 makes it a function of the legislature, in the first instance, to decide how § 17 granted lands are to be used (i.e., held, appropriated and disposed of). That, it seems to us, leaves it up to the legislature to decide, in the exercise of reasonable prudence related to fulfillment of the purpose of the particular trust, whether‑-
(a) The lands themselves are to be sold, with the proceeds derived from the sale of those lands then to be placed into permanent funds for the designated trust purposes; or
[[Orig. Op. Page 10]]
(b) The lands are to be kept by the state and put to some revenue producing use (e.g., growing timber), with the revenues derived from such use of the lands then to go into the applicable permanent fund; or
(c) The lands are to be kept and, themselves, actually used for an eligible trust purpose;e.g., as the site of a college or university campus or state correctional facility.
We also would point out that if, indeed, the lands are kept under option (c) they remain as "permanent" an asset of the state as the resulting proceeds would be if the lands were sold‑-with the proceeds then being placed into a permanent fund. All that is "lost" is the income which would be earned through investment of the fund and/or revenue obtained from the sale of timber, etc., grown on the lands. But in lieu of that income or timber revenue, the state has the actual use of the lands themselves for a designated trust purpose. And, presumably, the legislature's decision to allow the lands to be used directly would involve findings (either by itself or by your office as its delagee) that direct use represents a reasonable and prudent application of the particular lands in view of the trust purpose for which they were granted.
We therefore also answer your second question (as above stated) in the affirmative.
Your final question, repeated for ease of reference, asks:
Do state community colleges come within the designation of charitable, educational, penal and reformatory institutions?
We answer this question in the affirmative as well; i.e., community colleges are state educational institutions for purposes of the above‑discussed grant of lands for CEP & RI. This result is dictated by the Court's decision inCentralia College Education Ass'n v. Board of Trustees, 82 Wn.2d 128, 508 P.2d 1357 (1973) and in Tacoma Community College Federation of Teachers v. Board of Trustees, 82 Wn.2d 136, 508 P.2d 612 (1973). Both of those cases clearly hold that the state community colleges are an integral part of the state's system of higher education and are state agencies. And, as pointed out inState ex rel. Moore v. Callvert, supra, the legislature is free to determine what state educational [[Orig. Op. Page 11]] institutions are to receive the funds generated by the management of the lands in question.
This completes our consideration of your request. We trust that the foregoing will be of assistance to you.
Very truly yours,
KENNETH O. EIKENBERRY
PHILIP H. AUSTIN
Senior Deputy Attorney General
*** FOOTNOTES ***
1/Other sections of the Enabling Act granted other lands to the state for the support of common schools (§ 10), for state capital buildings (§ 12) and for a state university (§ 14). In addition, § 17, supra, also granted lands for ". . . the establishment and maintenance of a scientific school, one hundred thousand acres; . . ." and for ". . . State normal schools, one hundred thousand acres; . . ." as well as a further grant of another one hundred thousand acres for ". . . buildings at the State capital . . ."
2/See § 1, chapter 170, Laws of 1961; § 1, chapter 17, Laws of 1961, 1st Ex. Sess.; and chapter 23, Laws of 1961, 1st Ex. Sess.; and see also, AGO 63-64 No. 113 which said that proceeds form the sale of CEP & RI lands earmarked for the University of Washington could now be used for construction of educational facilities.
3/U.S. Const., Art. VI.
4/Jointly written to a previous Commissioner of Public Lands and the then director of the State Department of Highways.
5/Based on an informal opinion given to DNR some years ago (January 16, 1968) by the Assistant Attorney General then assigned as its legal counsel, we understand that a particular tract of CEP & RI land was then allowed to be used on a rent-free basis as the site for a certain state correctional facility‑-notwithstanding the absence of specific statutory authorization such as is now contemplated by your present question. While that use of the particular land, as will be indicated by our answer below, does not represent a conflict with § 11 of the Enabling Act we also believe, upon further consideration and reflection, that any such transactions in the future (including continuation of the status quo with respect to this particular facility) should, properly, be based upon the enactment of the sort of legislation which your question now envisions.