Oklahoma

Overview

Oklahoma was admitted to the Union on November 16, 1907 — the last of the lower-forty-eight grant states with a substantial trust endowment — through a complex admission that combined Oklahoma Territory and Indian Territory. The state received sections 16 and 36 of each township in the former Oklahoma Territory, along with cash payments in lieu of sections in the former Indian Territory where federal land had already been allotted. The Commissioners of the Land Office administer the trust today, overseeing roughly 750,000 surface acres and a substantially larger mineral estate [CITE PENDING for current corpus values]. Revenue from agricultural leases and significant oil and gas royalties flows to the permanent school fund.

Enabling Act

The Oklahoma Enabling Act of June 16, 1906 (34 Stat. 267) admitted Oklahoma on the condition that sections 16 and 36 of every township in the former Oklahoma Territory be granted to the state in trust for common schools, with cash compensation provided in lieu of sections in the former Indian Territory where allotment under prior federal action had foreclosed in-place grants. The Act required proceeds to be held in a permanent fund and prohibited disposition at less than appraised value.

Key cases

• Oklahoma Education Association, Inc. v. Nigh, 642 P.2d 230 (Okla. 1982) — The Oklahoma Supreme Court struck down five statutes that capped the rent the Commissioners of the Land Office could charge on preference-right leases, capped the interest they could charge on farm loans and land-sale contracts, and let a sitting lessee renew without matching competing bids. The statutes were unconstitutional because they required the trust to be managed for less than full value in order to subsidize farmers and ranchers. The state’s acceptance of the grant, the court held, made the constitution and the Enabling Act “an irrevocable compact between the United States and Oklahoma, for the benefit of the common schools, which cannot be altered or abrogated.” Id. at 235. That language has since been relied on in South Dakota (Kanaly v. State, 368 N.W.2d 819, 823 (S.D. 1985)), Montana (Department of State Lands v. Pettibone, 702 P.2d 948 (Mont. 1985)), Utah (Plateau Mining Co. v. Utah Division of State Lands, 802 P.2d 720 (Utah 1990)), and Washington (County of Skamania v. State, 102 Wn.2d 127 (1984)). The ruling operated prospectively only; nothing was ordered restored to the fund.

• State ex rel. Williamson v. Commissioners of the Land Office, 301 P.2d 655 (Okla. 1956) — An injunction against the Commissioners of the Land Office, stopping them from depositing oil-and-gas lease revenues into a school-building equalization fund as a 1955 constitutional amendment and an implementing statute required. The court held both invalid: the Enabling Act’s regulations touching the granted lands and their proceeds “exist as valid laws of the United States, which may not be modified, restricted or changed by an Act of the Oklahoma Legislature or the people of Oklahoma in amendment of the Oklahoma Constitution.” Id. at 659. It is the strongest form of that proposition in the Library’s collection, because it binds the electorate and not merely the legislature.

• School District No. 23 of Okfuskee County v. Commissioners of the Land Office, 166 Okla. 226, 27 P.2d 149 (1933) — School districts sought mandamus to have oil-and-gas bonus, rentals and royalty paid to them as current income. Denied and affirmed: those proceeds are corpus, “carried into and credited to the permanent funds,” with only the interest expendable. Id. at 231. Note the direction of the pressure — the beneficiaries wanted the corpus spent and the trustee defended it.

Notable Attorney General opinions

No Attorney General opinions for this state are on file yet. They are added as they are located and read.

Trust Integrity grade and rationale

Breached-and-recovered (as to the Nigh facts, prospectively). Oklahoma Education Association v. Nigh put the irrevocable-compact language into Oklahoma’s modern record and removed the statutory subsidies at issue, and administration under the Commissioners of the Land Office has since produced substantial mineral-royalty revenue for the permanent fund [CITE PENDING for current royalty figures]. The recovery was forward-looking only: the court expressly protected the Commissioners and the citizens who had dealt with them from liability for past acts under the invalidated statutes, and ordered nothing restored to the fund for the years the below-market terms were in force. Whether contemporary Oklahoma practice honors the Nigh doctrinal floor in full — particularly around mineral leasing terms and the use of trust mineral revenues — is a question the Library is presently surveying.

Current advocacy

Currently none named in substrate. If you advocate for school trust lands in Oklahoma, the Library welcomes contact through the pending Library contact form.