Regents Approve Settlement on Trust Lands Management Fees

PULLMAN, Wash. — The Washington State University Board of Regents Friday authorized the university to enter into a legal settlement that resolves a 35-year-old problem on how fees are paid for management of WSU’s agricultural trust lands.
The settlement was reached between WSU and the State of Washington through the Department of Natural Resources and the Office of Financial Management. It calls for $36.3 million to be deposited to the university’s agricultural permanent fund to reimburse it for management fees incorrectly charged to the fund over three-plus decades. It also provides for a $4 million state appropriation to be placed in a new fund specifically for management of the agricultural trust lands.
At the heart of the problem is a conflict between federal and state statutes governing payment of fees for managing the federal lands given to Washington to establish and help fund its land-grant college. The federal land was granted for that purpose at the time of statehood in 1889. WSU was established as the state’s land-grant institution in March of 1890.
The Morrill Act that created the nation’s land-grant universities in 1862 specified that state treasuries must pay for management costs so that all the proceeds could be used to support the educational institutions. Under a state statute, fees for managing the trust lands were charged against proceeds from the agricultural trust starting in 1964.
The technical conflict between the statutes was recognized in a state attorney general’s opinion prepared for the Legislature in 1996. Efforts have been on-going since then to resolve the problem.
“The affected parties came together late last year in a spirit of good will to solve this legal problem, and find a joint solution that could be presented to the Legislature,” Sally Savage, university counsel, said.
The settlement must go to the Washington Legislature for passage of legislation to resolve the statutory conflict and for appropriation of the necessary funding.