Montana Attorney General Opinion 16-126

Opinion No. 126. State Lands-Farm Loan Mortgage Lands-Appraisal-Reappraisal -Public School Fund. HELD: 1. Section 17 of Chapter 42, Laws of 1933, authorizes the State Board of Land Commissioners "mort- gage lands," acquired by the state through its farm loan mortgages, to be reappraised even though such re- appraisals place a lower value on any tract of such lands than the amount of the State's investment thereon plus the accrued and unpaid interest. 2. If all receipts from such lands are credited upon the amount loaned with no deductions for interest and a reappraisement is not less than the balance of the principal remaining un- paid on the loan, the public school fund would show no loss and the re- appraisal would not violate Section 3 of Article XI of the Constitution. June 27, 1935. Hon. 1. M. Brandjord Commissioner of State Lands The Capitol You inquire as to the authority of the State Board of Land Commis- sioners to reappraise "mortgage lands" acquired by the State through its farm loan mortgages in cases where such reappraisals place a low- er value on any tract of such lands than the amount of the State's in- vestment thereon plus the accrued and unpaid interest. In Chapter 60, of the Laws of 1927, Section 2 thereof, the term "mort- gaged land" or "mortgaged lands" is defined as land or lands to which the State has become the owner through a mortgage thereon either by fore- closure or otherwise. Section 17 of the same chapter in relation to appraisals was amended by Chapter 42 of the Laws of 1933, which authorizes reappraisals and contains the following statement: "* * * and provided, further, that the board may cause mortgaged land to be reappraised without reappraising other state lands in the county or counties in which they are located. * * * ." There being no constitutional in- hibition to prevent such reappraisals, the plain language contained in this statement authorizes a reappraisal. The next question is: May such re- appraisal be for an amount less than the State's investment in said land plus the accrued and unpaid interest? A prior statute, Chapter 168, Laws OPINIONS OF THE ATTORNEY GENERAL 127 of 1925, forbids a sale for less than the State has invested in the loan, including all costs and interest to date of the sale. This provision was omit- ted in the Laws of 1927, and has not since that time been a requirement for reappraisement for sale. Section 3 of Article XI of the Con- stitution of Montana provides: "Such public school fund shall forever re- main inviolate, guaranteed by the state against loss or diversion, to be invested so far as possible in public securities within the state, * * * under the restrictions to be provided by law." If all receipts from said lands are credited upon the amount loaned with no deductions for interest and a re- appraisement is not less than the bal- ance of the pt:incipal remaining un- paid on said loan, certainly the public school fund would show no loss or diversion by such transaction, and a reappraisement within such limits would certainly be authorized.