ITEM 116-106-R0902

 

TO:                   Board of Regents

 

FROM:              LeRoy H. Schramm

                        Chief Legal Counsel

 

RE:                   Administrative Assessment on Land Grant Income and Permanent Trust Funds

 

DATE:               September 19-20, 2002


At its July meeting the Board reviewed an extended memorandum in which I concluded that various administrative assessments that have been levied against University System land grant proceeds and permanent fund income are likely illegal.  These fees are being used to fund the  administrative operations of the Division of State Lands and the Board of Investment.  The Board of Regents voted to instruct me to draft a formal legal Complaint by which the legality of these assessments and fees could be determined.  Attached is such a Complaint.  Subsequent to the July meeting I attended the meeting of the State Land Board and informed them of the possibility that the Regents might initiate legal action to resolve this question.  This announcement elicited virtually no discussion from the Land Board members and no one voiced any criticism (or praise either, for that matter).  The Regents are clearly the proper party to initiate such a suit because the Regents, more than any other body, have the responsibility to see that the campuses that are the beneficiaries of the various Enabling Act land grants are getting the full measure of benefit from those grants as intended by law.  If the Regents wish to move forward with a legal action as described in the attached Complaint a motion such as the following would be appropriate.

 

Motion:   That the Board direct legal counsel to initiate a formal legal action as generally described in the attached Complaint.