1. Changing the name of the Public School Fund to the Public School Permanent Endowment Fund will promote accuracy and efficiency by clarifying the distinction between this fund and the other funds related to the public school endowment.
2. Providing that the Public School Permanent Endowment Fund would contain, among other things, proceeds from the sale of lands of the public school endowment if such lands are sold, will help clarify the contents of the fund and will prevent confusion in the future.
3. Creating a Land Bank Fund lets the state eliminate the current, cumbersome requirement that land exchanges must be performed to acquire land for the public school endowment. The Land Bank Fund would greatly enhance the performance of the public school endowment by enabling the state to sell unproductive endowment land and buy productive land. This would help the state maintain its endowment land base while increasing revenues from the land.
4. Placing money in the Land Bank Fund would not result in a loss of revenue. Money would be held in the Land Bank Fund only temporarily, and if not used to buy land, would be invested in the Public School Permanent Endowment Fund as other money would be.
5. The Land Bank Fund would not cause rampant sales of endowment lands. The state constitution limits sales of endowment land to no more than 100 sections (64,000 acres) of endowment land per year. Further, the state has always had the authority to sell endowment land and has sold over one million acres since Idaho became a state. Legal, social and political pressures limiting endowment land sales will still exist. The amendment does not alter state authority regarding land management.
1. Changing the word "disposal" to "sale" is necessary to clarify ambiguous terms.
2. The amendment uses the word "sale" of endowment lands because a sale is a permanent decision and should be addressed in the state's most permanent document, the state constitution. A lease is sometimes promoted as being within the term "disposal." However, a lease is not a permanent decision and should be distinguished from "sale."
3. The state constitution requires that endowment lands must be managed for the maximum long-term financial return. Endowment lands and the financial assets of the endowments are held in trust by the state for the endowment beneficiaries, to whom the state owes a fiduciary duty. By law, the state will operate under the "prudent investor" standard. Accordingly, competitive bidding for any lease of state land will be a key tool used to maximize the total return on endowment assets and to assure that the state is meeting its obligation to its beneficiaries.
4. The change reflects the fact that the word "disposal" historically has been interpreted to mean "sale." The statutory requirement that leases be offered at public auctions would still be exist.
1. Changing the name of the Public School Fund to the Public School Permanent Endowment Fund is unnecessary. People who deal with the public school endowment already know what the name refers to.
2. Requiring that the Public School Permanent Endowment Fund contain proceeds from the sale of lands of the public school endowment is unnecessary because those proceeds already have to be deposited into the permanent fund of the public school endowment.
3. Creating a Land Bank Fund and eliminating the requirement for land exchanges will turn the state into a land broker. The state should not be in the business of buying and selling land. The requirement for land exchanges helps limit how much the state deals in lands.
4. The Land Bank Fund will divert investment money from the Public School Permanent Endowment Fund, possibly resulting in lower revenues. Therefore, the Land Bank Fund will decrease the amount of growth in the financial assets of the public school endowment and will decrease revenues if this money is kept in an account where, although invested, it may not be invested in the best earning instruments.
5. Although the state constitution limits land sales to no more than 100 sections (64,000 acres) of state land per year, these amendments will promote land sales, thereby depleting the physical assets of the endowments and jeopardizing their financial health and that of the endowment beneficiaries.
1. The word "disposal" may be ambiguous, but should remain open to different interpretations as time and circumstances require.
2. It does not matter that a sale might be permanent and a lease temporary. Both transactions alter the ownership or the use of endowment lands. The requirements for sales and leases addressed in the state constitution should remain unchanged.
3. The amendment will eliminate the constitutional requirement that a lease of lands of the public school endowment must be offered at a public auction. Thus, the change could eliminate competition that is necessary for getting the most revenue from state endowment lands. Combined with proposed changes to the Idaho Admission Bill, this amendment could result in leases of unlimited duration at below market rates. The change would decrease the accountability of state decision-makers and would perpetuate a deficiency in investment return on leases of endowment lands.
4. Although the word "disposal" has historically been interpreted to mean "sale," the definition of "disposal" is still disputed. A statutory requirement for leases to be offered at public auctions is inadequate because the legislature could change or eliminate that requirement.