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Riedel v. Anderson6/4/2003
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.
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. Ilsey, 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.
III. Constitutionality of Lease Preference
Given our conclusion that the school lands in Wyoming are subject to a statutory trust, we must address the parameters of that fiduciary obligation. Riedel and the State, citing Lassen and Ervien, argue that there is a fiduciary obligation to maximize revenues from the trust lands, and Riedel argues that the right-to-renew statute depresses the market for leasing school lands. Those cases, however, were interpreting the 1912 Arizona-New Mexico Enabling Act, which does include a express federal trust and is very different from the Wyoming Act of Admission. The Branson decision informs us that, even if there is a federal trust, it does not necessarily carry with it a common law duty to maximize revenue from the trust corpus and the state may define the fiduciary duty within the bounds of the federal trust. Branson Sch. Dist., 161 F.3d at 638-39. Since we hold that the land trust in Wyoming is a creature of statute, we agree with the Association that the statutes incorporate all of the trustee's duties, and that such ar
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