Opinion No. 73-312 (1973) Ag ( 1973 )

LAND OFFICE COMMISSIONERS — BONDS Under the provisions of Article XI, Section 6 of the Oklahoma Constitution and 64 Ohio St. 51 [64-51] (1971), the Commissioners of the Land Office may exchange United States Treasury bonds, in which they have invested, for Government National Mortgage Association Participation Certificates having the same maturity value and a higher annual yield. The Attorney General has considered your opinion request wherein you ask the following question: "May the Commissioners of the Land Office trade U.S. Treasury Bonds with a maturity value of $2,150,000, a maturity date of February 15, 1980, and an interest rate of 4% for Government National Mortgage Association Participation Certificates with a maturity value of $2,150,000, a maturity date of April 6, 1987, and an interest rate of 5.10%?" The Commissioners of the Land Office is a constitutional body established pursuant to Article VI, Section 32 of the Oklahoma Constitution. Section 32 provides: "The Governor, Secretary of State, State Auditor, Superintendent of Public Instruction, and the President of the Board of Agriculture, shall constitute the Commissioners of the Land Office, who shall have charge of the sale, rental, disposal, and managing of the school lands and other public lands of the State, and of the funds and proceeds derived therefrom, under rules and regulations prescribed by the Legislature." The Oklahoma Constitution further provides in Article XI, Section 6 for the "Investment of permanent common school and other educational funds". That section provides for the investment of the funds administered by the Commissioners of the Land Office and provides in part: "The permanent common school and other educational funds shall be invested in first mortgages upon good and improved farm lands within the state (and in no case shall more than fifty per centum (50%) of the reasonable valuation of the lands without improvements be loaned on any tract), Oklahoma State bonds, county bonds of the counties of Oklahoma, school district bonds of the school districts of Oklahoma, promissory notes evidencing federal and state insured loans made to students under any federal or State of Oklahoma insured student loan program, and United States bonds, preference to be given to the securities in the order named. The said funds may also be invested in deposits in banks or trust companies in Oklahoma to the extent such deposit is insured by the Federal Deposit Insurance Corporation." (Emphasis added) Title 64 Ohio St. 51 [64-51] (1971), also specifies the above listed uses for the funds administered by the Commissioners of the Land Office and additionally requires that any proposed investment be approved by the Attorney General of the State of Oklahoma. The question you ask is similar to that question answered in Attorney General Opinion No. 73-277 to the Commissioners of the Land Office, wherein the Attorney General ruled that the Commissioners could trade U.S. Treasury bonds for Farmers Home Administration Notes and Export-Import Bank Debentures with the same maturity value and a higher annual yield. That holding was premised on the fact that the Farmers Home Administration Notes and Export-Import Bank Debentures were backed by the full faith and credit of the United States and, thus, constitute "United States bonds" under the provisions of Article XI, Section 6 of the Oklahoma Constitution and 64 Ohio St. 51 [64-51] (1971). You state in your request that the Government National Mortgage Association Participation Certificates are backed by the full faith and credit of the United States Government. You also relate that the Commissioners of the Land Office desire to trade U.S. Treasury bonds for Government National Mortgage Association Participation Certificates having the same maturity value and a higher annual yield. Pursuant to the holding in Attorney General Opinion No. 73-277, which we have reviewed and hereby affirm, and from the facts you relate in your request, it is clear that the Commissioners of the Land Office are authorized to trade invested securities for Government National Mortgage Association Participation Certificates. It is, therefore, the opinion of the Attorney General that your question be answered in the affirmative. Under the provisions of Article XI, 6 of the Oklahoma Constitution and 64 Ohio St. 51 [64-51] (1971), the Commissioners of the Land Office may exchange United States Treasury bonds, in which they have invested, for Government National Mortgage Association Participation Certificates having the same maturity value and a higher annual yield. (Mike D. Martin)