Idaho’s state Land Board has voted to oppose HB 118, the House-passed bill from Rep. Megan Blanksma to forbid the state Department of Lands from using legal representation provided by the Idaho Attorney General’s office, saying it would cost the state’s endowment beneficiaries millions and violate the constitutional and fiduciary duties of the Land Board.
The board, created by the Idaho Constitution, is chaired by the governor and consists of the state Controller, Secretary of State, Attorney General, and state Superintendent of Public Instruction. Gov. Brad Little abstained from the vote, as he does on all matters regarding legislation because of his role signing or vetoing legislation as governor. Attorney General Lawrence Wasden also abstained, as did state Superintendent Sherri Ybarra; public schools, which she oversees, are the largest beneficiary by far of the state’s endowment.
State Controller Brandon Woolf said, “I guess I’d like to share a few thoughts about this bill. I oppose this bill for a couple of reasons. I do not agree with the last line in this bill.” That last line says, “The department of lands may not employ legal counsel from the office of the attorney general.”
“I believe that the five of us as Land Board members have the right and authority to decide who we would like to provide legal counsel for our board and the department’s legal counsel,” Woolf said. “Since 1905, Idaho Code 58-120 has included this language, that as a Land Board, we can determine who our legal counsel shall be. If we do not agree with the current counsel, existing law provides that we have the authority to request a 2nd or 3rd opinion.”
State Lands Director Dustin Miller told the board that the Department of Lands currently spends an average of $405,000 per year on legal costs. “If HB 118 becomes law, the department estimates that contracting outside legal services, hiring attorneys to work internally or a combination thereof could cost the agency and the endowments more than $1.8 million annually.”
Woolf said, “This bill has been a good exercise to step back and evaluate. There’s a perception out there that we have an opportunity to evaluate and look for areas to correct, adjust and improve. I believe as board members, Land Board staff and department staff can continue to look for areas of improvement and share those suggestions that may help moving forward. At every point, our teams need to collaborate with each other and stakeholders to make sure all points are clear.”
The controller said, “The business and financial side of this bill causes me to pause. The director shared some of the potential financial impacts of this bill. As a Land Board, we all know one of our key fiduciary duties is to secure the maximum long-term return, and in my opinion, I believe this would go the opposite direction, if we had to find other outside counsel. To put that cost in context, the potential increase to the endowments could be equal to the same amount of net income we receive annually from the grazing program.”
Idaho Secretary of State Lawerence Denney said, “I have to agree with Controller Woolf that the vast majority of the legal advice that we need is certainly not in the controversial or in conflict in any way. And I think we do have the authority when there is a conflict to hire outside counsel. So I would agree with Controller Woolf that we should direct the department to oppose this bill.”
Woolf’s motion then passed unanimously, 2-0. It instructs the IDL’s director to “appear before the relevant committee of our Legislature considering the passage of HB 118, and testify in opposition to the passage of HB 118,” making the following points: That “HB 118 will infringe upon the board’s discretion as trustee to obtain the most effective and qualified services necessary for fulfillment of its constitutional and fiduciary duties,” and secondly, that “HB 118 will increase the legal cost to the state Board of Land Commissioners substantially, which has the direct effect of taking money away from the endowment beneficiaries, invading the discretion of the board in the exercise of its fiduciary duties.”
An earlier Senate bill aimed at the same end died in committee earlier this session.