State of Idaho
Department of Lands

Endowment Land Transaction Advisory Committee

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BACKGROUND

At the March 17 and April 21, 2009 meetings of the State Board of Land Commissioners, the Board discussed and formulated an Endowment Land Transaction Advisory Committee ("Committee") for the express purpose of reviewing the constitutional language for consistency with modern business practices.  Committee objectives included identifying language that is a hindrance to the endowment mission, as well as assisting the Board with legislative and public education efforts for the 2010 legislative session.

Members of the Endowment Land Transaction Advisory Committee include:

August 18, 2009 State Board of Land Commissioners' Meeting

— August 18, 2009 Land Board Approved Memorandum with Attachments

At the August 18, 2009 meeting, a follow-up report was provided to the Board.  It was noted that the Board discussed and accepted the Committee's report presented at the prior July 21, 2009 meeting.  The report identified the need to reform portions of the Idaho Constitution and Admissions Bill to allow the Board greater flexibility in its endowment land sales and development program.  The Committee recommendations are necessary to allow the Board flexibility in structuring transactions that conform to modern business practice and to better maximize return to the beneficiaries.

The Board expressed concern about one recommendation in particular - removing the public auction standard without also providing guidance as to when other tools would be used to overcome a perception of the possibility that transactions could occur without public transparency.  At the same time, Board members recognized that certain information in the course of developing a business transaction appropriately should be sequestered so that others do not take advantage of knowledge of proprietary business plans, financial arrangements and other information that a proponent would need to provide the Department to evaluate an opportunity.  A second point Board members wanted to understand better is the impact of endowment land transactions on a local tax base.  Finally, Board members expressed concern that adequate time be allotted to educate all affected parties, including legislators and the general public if these issues were advanced for consideration during the 2010 general election.

A recommendation was made by the Department of Lands that (1) the Board finalize suggested language changes in the Constitution and Admissions Bill.  Either confirm the use of the Committee's recommended language or assign a deputy attorney general to write and offer alternative changes to be presented at a future board meeting to accomplish the goal of addressing the issues raised by the Committee and the Department.  This is an important step that needs to be finalized prior to launching even a basic educational outreach program; (2) that the Board direct the Department to initiate a basic educational outreach program with legislative leadership, local governments (counties) and the beneficiaries that covers the concepts presented in the Committee's report and subsequent document.  Use the Committee members to help with this effort, as available; (3) that the Board direct the Department to use the results gleaned from the educational outreach to design policies that support recommended Constitution and other changes while providing flexibility and transparency without sacrificing returns to the beneficiaries.

A motion was made by Attorney General Wasden that: (1) the Board accept the report of ELTAC; (2) that the Board request the Attorney General’s Office to draft appropriate legislation that would provide for amending Article 9, § 8 and 10 of the Idaho Constitution to do the following: (a) to allow the Legislature to provide for means of disposal of endowment lands in addition to the use of public auction, and to specifically clarify that the term public auction not be deleted from the Idaho Constitution but that we apply it in addition to other measures; and (b) remove the 320-acre limitation on the sale of endowment lands to an individual; and (ac) remove the 160 acreage limitation on the sale of university lands to any individual and, in addition, that the draft legislation, constitutional language, be submitted to the Department for submission to this Board for review; (3) that the Board request the Attorney General to draft legislation to amend section 5 of the Idaho Admissions Bill to provide for disposal of school lands in accordance with state law and to be submitted to the Department for submission to this Board for review; (4) that the Board direct the Department of Lands to initiate an informal outreach program to inform legislators, local governments and beneficiaries of the reasons for the proposed changes; (5) that the Board direct the Department of Lands to use the input from the informational outreach program to advise the Board of whether modifications to the proposed constitutional changes are warranted; (6) that the Board direct the Department of Lands to use the results of the outreach program to design legislation and policies to implement the recommended constitutional changes with the objective of providing management flexibility while at the same time ensuring transparency of decision-making; (7) that the Board direct the Department of Lands to complete this effort with the objective of submitting any recommended changes to article 9, § 8, along with any implementing legislation to the 2012 Legislature; and (8) that the Board thank the members of the ELTAC for their assistance in reviewing the Board’s land transaction policies and in assisting in developing sound business practices for management of state endowment lands and invite them to continue assisting the Board and the Department with that effort.  Controller Jones seconded the motion.  The motion carried on a vote of 5-0.

July 21, 2009 State Board of Land Commissioners' Meeting

— July 21, 2009 Land Board Approved Memorandum with Attachments

At the July 21, 2009 meeting of the State Board of Land Commissioners a recommendation was made by the Department of Lands that the Board formally accept the Committee's recommendations and direct the Department of Lands to complete the necessary paperwork to begin the 2010 idea legislative process.  In addition, the Department would begin to coordinate meetings with legislative leadership and draw upon members of the Committee to educate key stakeholders leading up to the 2010 legislative session.  At that meeting, a motion was made by Attorney General Wasden that the Board formally accept the Committee's recommendations and report and that the Board place this matter on the August agenda for further discussion to allow Board members an opportunity to review the information and to consider a way forward.  In addition, on behalf of the Board and the citizens of Idaho, Attorney General Wasden thanked the Committee for their work.  Controller Jones seconded the motion.  The motion carried on a vote of 4-0, with Superintendent Luna being absent for this vote.