by Daniel Macke, JD, Center for Wildlife Law

There is a well of new hope for conservationists that millions of acres of lands held in trust by state governments to support common-schools may now be managed to obtain long-term social and environmental benefits. In Branson School District RE-82 v. Romer, 161 F.3d 619 (10^th Cir.1998), cert denied 119 S.Ct. 1461 (1999), the Tenth Circuit Court of Appeals approved an amendment to the Colorado Constitution which alters the management principle for the state’s school lands. The amendment allows Colorado to manage the lands to conserve the long term value of the natural resources and puts land in permanent trust to protect wildlife habitat.

Every state entering the Union since 1803 has received lands from the federal government for the support of public schools. However, only twenty-two states presently manage trust lands, totaling approximately 135 million acres of school lands (the states are Alabama, Alaska, Arizona, California, Colorado, Hawaii, Idaho, Louisiana, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, Wisconsin, Wyoming).

Most school land grants appear in federal Congressional enabling acts for the various states, and the grants are accepted in their respective state constitutions. The earliest grants were not specific as to management principles. Over the course of the nineteenth century however, Congress began to exhibit growing concern for the management of school lands, and more specific language appears in later enabling acts.

It is generally accepted that states hold the lands as a beneficial trust for the benefit of schools rather than for the public at large. More often than not, the idea of "maximum economic benefit" has been the guiding principle in carrying out this trust relationship. Obviously, this principle exists at the expense of other non-monetary land values. Colorado appears to be a shining exception to this general rule.

The 1875 Enabling Act for the Territory of Colorado authorizing the admission of Colorado as a state upon adoption of a state constitution, provided that two sections of every township would be "granted for the support of common schools." The Act provided that the lands be sold "only at public sale" with "the proceeds to constitute a permanent school fund" the "interest of which to be expended in the support of common schools."

By 1876 the State of Colorado had approved the required constitution. Article IX of that document provided for "a public school fund" consisting of "the proceeds of those lands granted to the state by the federal government for educational purposes." The fund was to "remain forever inviolate and intact," and the interest was to be "expended in the maintenance of the schools." The constitution created a State Board of Land Commissioners to manage the lands and provided that the legislature was to ensure that the land grants "be judiciously located and carefully preserved and held in trust subject to disposal, for the use and benefit of the respective objects for which said grants of land were made." According to the constitution, the land board was to manage the lands in a manner which obtains the maximum possible amount of income.

The early history of Colorado’s management of these trust lands is consistent with other western states in that the land was quickly sold to provide an income base for schools and to encourage settlement in the state. As the state settled however, holding and leasing lands to farmers and ranchers emerged as a preferable income producing method.

By the end of the twentieth century Colorado had done well to retain three million acres of the granted school lands. In the 1990's a shift in management policy toward public land sales jeopardized the school lands. Governor Roy Romer led the effort to halt this trend. The governor offered Amendment 16 in 1996, a ballot initiative designed to amend the constitution’s school land provisions, including a fundamental alteration of school land management principles.

The most controversial of Amendment 16's revisions was its elimination of the requirement that the school land board manage the school lands in a manner "as will secure the maximum possible amount." Amendment 16 proposed rather that the land board manage its holdings "in order to produce reasonable and consistent income over time." The revised section also created a permanent "Stewardship Trust" of three hundred thousand acres of school lands "for the long-term benefit of the state." The amendment provided that the land be managed "for stewardship, public use or future disposition," permitting only uses that "will enhance the beauty, natural values, open space, and wildlife habitat." Amendment 16 was approved by the voters of Colorado on November 5, 1996.

Less than two months after passage of Amendment 16, a coalition of school districts and parents filed suit to stop its implementation. The trial court upheld the legality of the new provisions. On appeal the coalition challenged whether the voters of the state may alter the management principles guiding state trusteeship of school lands without violating the trust established by Congress. The Tenth Circuit Court of Appeals felt there was no such violation and the U.S. Supreme Court declined to review that determination.

For now Amendment 16 stands as an example of what can be done to turn age-old state trust land management principles away from maximum income production toward more conservation-friendly purposes.

The crux of the issue in Branson is federal supremacy. If Congress intended to create a trust in the enabling act for Colorado, that law is supreme under Article VI of the U.S. Constitution. Colorado may not enact a law which is in conflict with the trust. The Tenth Circuit believed that Congress did intend to set up an enforceable federal trust, but that Amendment 16 does not trigger a violation of the state’s fiduciary responsibilities under the trust. Thus, the amendment does not violate the supremacy clause of the federal constitution.

It is important to recognize how the court made the trust determination before examining the specific amendment provisions challenged by the plaintiffs. First, the court was frank to point out that the question of whether a "trust" exists is unique to every state because states do not share the same history of admission to the Union. Second, the court noted that the key is congressional intent and whether Congress established sufficient "duties" in the enabling act to justify the conclusion that Congress intended to create a trust.

In Colorado’s case, the specificity of the grant justified such a conclusion. Colorado’s enabling act included the number of sections per township; the purpose of the grant; that lands shall be sold only at public auction; and that a permanent fund shall be established, the interest to be spent in support of schools. This specificity distinguishes Colorado from earlier grants which simply announced that lands would be granted for schools without including further detail. The Tenth Circuit intimated that these earlier, less specific grants, merely created in other states an "honorary trust."

The language in Colorado’s constitution buttresses the court’s conclusion. "For the use and benefit" is typical language used in the creation of a trust. In response to Congress’ 1875 Enabling Act therefore, Colorado’s state constitution language also recognizes the school land grant as a legally enforceable trust.

The court next examined whether certain Amendment 16 provisions violate Colorado’s fiduciary responsibilities under the federal trust. Opposition from the plaintiffs was mostly directed at the declaration that "sound stewardship," including protection of natural beauty, values, open space and wildlife habitat, should guide management of school lands. Plaintiffs argued that this new principle conflicted with fiduciary obligations because it diverts the state from managing the lands for the exclusive purpose of supporting common schools.

As with all the challenged provisions, the court disagreed. The 1875 Enabling Act is essentially silent as to any requirement that Colorado dispose of all its school land. This was taken to mean that Congress had no intention of stripping the state of the power to hold the land over time or to obtain income through other uses. "Sound stewardship" is merely a new management approach, indicating a change in the state’s chosen method of obtaining support for schools. It is possible for the State of Colorado to conclude that protecting and enhancing values will increase long-term economic potential and productivity.

Striking out "income maximization" and replacing it with a new obligation to "produce reasonable and consistent income over time" also was not considered by the court to amount to a violation of trust principles. The enabling act does not direct the state when to dispose of land nor how to invest proceeds. The only duty imposed is to achieve fair market value for the lands when sold. Again, Amendment 16 does not change the purpose of the trust; it merely creates a new approach to management.

The most troubling provision for the court was creation of the permanent, three hundred thousand acre "Stewardship Trust." The court envisioned the possibility that eventually the only remaining acreage in the school trust would be these reserved lands. According to the amendment the reserved lands cannot be sold even if doing so would be economically beneficial to schools. This possibility did not prevent the court from deciding that nothing in Amendment 16 prevents realizing income through leases or other compatible uses.

That these provisions were upheld by the Tenth Circuit should be welcome news for those who would like to see a change in how school trust lands are managed. There are two reasons for caution however. First, Branson is limited to the Tenth Circuit and the unique case of Colorado. Second, the court in Branson was constrained by an extremely deferential rule of statutory construction that applies when there is a facial challenge to the federal constitutionality of state statutes. Upon such a challenge, a statute must be presumed constitutional unless shown otherwise. A court may not invalidate the measure if there is some "fairly possible" construction that would be constitutional. The court in this case believed that for each provision of Amendment 16 there was a possible construction that would conform to Colorado’s trust obligations. This does not mean that all courts, reviewing other measures, will apply such a deferential view.

Yet conservationists will still be encouraged by the Tenth Circuit’s summary approval of Amendment 16's overarching management philosophy. The fundamental importance of Branson is that there may exist a distinct difference between ends and means. The court did not suggest that trust lands can be managed for purposes other than the support of common schools. Yet it held that Colorado can conserve the resources as a means of achieving that purpose. This case provides some support for the proposition that conservation can be seen as a long-term benefit, rather than a diversion from economic gain.

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