## Facts

- Idaho Watersheds Project (IWP), a nonprofit environmental organization, sought grazing leases on Idaho state school-endowment lands to implement reduced-grazing and riparian restoration management.
- In 1995, IWP submitted multiple “conflict” lease applications on parcels historically leased to ranchers for grazing (sometimes with timber as a primary use and grazing secondary).
- The State Board of Land Commissioners used Idaho Code § 58-310B to evaluate whether applicants were “qualified” bidders, including by considering the lease’s impact on the livestock industry and the state economy.
- Based largely on IWP’s intended nontraditional use (reducing or eliminating grazing) and perceived adverse effects on the livestock industry, the Board found IWP not qualified, rejected many of IWP’s applications, and awarded leases to existing lessees without auction.
- In related 1996 lease matters, the Board also refused to allow IWP to bid at auction on certain expiring grazing leases.
- IWP sought judicial review and challenged § 58-310B as conflicting with the Idaho Constitution’s school-trust mandate; the district court granted summary judgment for the State, and IWP appealed.

## Issues

1. Whether Idaho Code § 58-310B, which directs the Board to consider impacts on the livestock industry and the state economy when determining bidder qualification for school-trust leases, violates Article IX, § 8 of the Idaho Constitution.
2. Whether the Board lawfully disqualified IWP and awarded leases to prior lessees without open bidding by relying on § 58-310B.

## Decision

- The Idaho Supreme Court held Idaho Code § 58-310B unconstitutional under Article IX, § 8 of the Idaho Constitution.
- The court reversed the judgment upholding the Board’s actions and remanded.
- The court directed that the contested leases be handled under Idaho Code § 58-310’s public auction and highest-bidder framework, without applying § 58-310B’s disqualifying criteria.

## Legal Principles

- Idaho school-endowment lands are held in a constitutional trust for the exclusive benefit of public schools, and the Board acts as a fiduciary trustee.
- The Board’s governing objective is to obtain the maximum long-term financial return for the school beneficiaries, consistent with prudent trust management.
- Statutory criteria that permit or encourage diverting trust benefits to other interests (including industry support or general economic policy) conflict with the trust duty and are unconstitutional.
- A bidder may not be excluded from competing for leases based on proposed land use when the exclusion rests on protecting an industry rather than on factors tied to achieving maximum long-term financial return under the trust.

## Conclusion

The court invalidated a statute that allowed the Land Board to disqualify lease applicants based on the perceived impacts of their proposed use on the livestock industry and the state economy, holding that school-endowment lands must be administered solely to secure maximum long-term financial return for public schools through lawful auction-based leasing procedures.


Idaho Watersheds Project v. State Bd. of Land Comm’rs, 133 Idaho 64, 982 P.2d 367 (Idaho 1999)