Montana Attorney General Opinion 15-564

Opinion No. 564 State Lanlls-Leases-Refunds of Rentals. HIi}LD: Proper refunds of rentals, charged against the propel' fund, may he made by the State Board of Land Commissioners from rentals paid be- fore snme are deposited with the state treasureL': (a) Where the lessee of ngricultural land has summer fallowed such land, (Sec. 3, Chapter 42, Laws of 1933) ; and (II) W11ere the lensed land is sold and possession giyen be- fore the expiration of the current year. June 27, 1934. You request an opinion regarding the power of the State Board of Land CommissioneL's to make a refund to a lessee of state agricultural land of the difference between the rental pai(l therefor and the stntutory rental for grazing land in a case where the Innd instead of being used to produce crops has been summer fallowed, and also regarding the power of the State Board of Land Commissioners to make a re- fund to a lessee of state land of the unearned part of the rental paid in a case where the land is sold and posses- sion given before the expira tion of the current year. Section 1 of Chapter 60, Laws of 1927, provides: - "There is hereby cre- ated a department of the government of the State of Montana to be known and designated as tlle 'Depnrtment of State JALnds nnd Inyestments.' The general purpose of this department shall be to administer the Federal Land Grunts mac1e to the State of Montana, and the other state lands, and the funds nrising from these lands, and the funds eoming under its control through the prOvisions of Article XXI of the State Constitution, or otherwise, as herein- n fter more specificnlly provided." Section 3 of the same chapter pro- vides: "The State Board of Land Com- missioners, conSisting of the Governor, Superintendent of Public Instruction, Secretary of State and Attorney Gen- eral, as provided by the Constitution, shall be the governing board of the De- partment of State Lands and Invest- ments; it shall have and exercise gen- eral authority, direction and control over the care, management and dis- position of all state lands and the funds arising from the leasing, use, sale and disposition of such lands or otherwise coming under its administration. In the exercise of these powers, the guid- ing rule and principle shall be that these Innds and funds nre held in trust for the support of education, and for the attainment of other worthy objects helpful to the well being of the people of this State; and that it is the duty of the board so to administer this trust as to secure the largest measure of legitimate and reasonahle advantage to the State. The enumeration in this Act of specific powers conferred upon the board shall not be so construed as to deprh'e the oonrd of other powers not enumerated but inherent in the general and discretionary powers con- fen'ell by the Constitution, and neces- 392 OPIKIONS OF THli] ATTORKEY GENERAL sary for the proper discharge of its duties; but there can be no such im- plied powers inconsistent with any part of the Constitution, nor shall any in- herent powers be assumed to exist which would be inconsistent with any statutory proviSion or with the general rule and principle herein stated." Section 3 of Chapter 42, Laws of 1933, provides that "agricultural rent- als shall apply and be charged and collected when the land is leased for or used for the raising of grain of an~' description, potatoes, beets or other cul- tivated crops. or for raising and har- vesting alfalfa, clover, timothy or other grasses, or for other crops gathered or harvested from the land except tha t the grazing rates only shall be charged for summer fallowed land." State lands are a trust and the funds derived therefrom are trust funds. (State ex reI. Koch v. Barret, 26 Mont. Cl2; Rider Y. Cooney, 94 Mont. 295.) It has been held that the expenses of administering such trust. may be taken from the trust funds without a specific appropriation therefor being made by the legislature. (State ex reI. Green- haum Y. Rhoades, 4 Ney. 312; Betts v. Commissioners of Land Office, 110 Pac. 766; United States v. Swope, 16 Fed. (2d) 215; State Y. Searle, 109 N. W. 770; State v. Brian, 120 N. W. 916; 59 C. J. 240; note to Dickinson v. Ed- mondson, Ann. Cas. 1917C, at page 917.) We may interject here that as a lease of state land, no matter what its character, is ordinarily, if not always, made on or before the first day of· March, as the rental for the first. year must then be paid and as the rental for each succeeding year must be paid between the 14th day of December of the preceding year and the 2nd day of February of the succeeding year (Sec. 26, Chap. 60, supra), it can be readily seen that a lessee of state agricultural land, when he pays the rental for any particular year, is not in a position to tell whether or not the land will be used to grow crops or will be summer fallowed that year. It is said in the letter by way of suggestion that "if the lease in connec- tion with which a certain refundment is made embraces public school lands, the refundment is due from the Public School Interest and Income Fund; if the lease embraces State Unh'ersity lands, the refundment would come from the University Interest and Income Fund and so on." But we think sec- tions 5 and 12. Article XI, of the Con- stitution present an insuperable ob- stacle to any attempt to make the sug- gestive effective. (Betts v. Commis- sioners of Land Office, supra.) Our understanding, however, is that the practice of allowing refunds of the kinds in question has long pre- "ailed and that its propriety has never heen questioned. This is highly sig- nificant. Moreover. it strikes us that the practice is both fair and just. The trust funds should not be augmented in such a way as to work injustice on some of those whose money has gone into them. Rentals from state lands are paid to the Commissioner of State Lands and Inyestments. Refunds therefrom could be made from time to time, as the oc- casion required, before depOSiting them with the state treasurer. We believe the law quoted above, custom, and the authorities cited justify it. In that way any conflict. with constitutional or statutory proviSions may be avoided. Care should be taken, of course, in each instance to make the charge against the proper fund.