Nebraska State Constitution Article VII-8

Article VII-8


Trust funds belong to state for educational purposes; use; investment.

All funds belonging to the state for common school purposes, including early childhood educational purposes operated by or distributed through the common schools, the interest and income whereof only are to be used, shall be deemed trust funds. Such funds with the interest and income thereof are hereby solemnly pledged to the purposes for which they are granted and set apart and shall not be transferred to any other fund for other uses. The state shall supply any net aggregate losses thereof realized at the close of each calendar year that may in any manner accrue. Notwithstanding any other provisions in this Constitution, such funds shall be invested as the Legislature may by statute provide.



The public school lands are held in trust for educational purposes. State ex rel. Ebke v. Board of Educational Lands & Funds, 159 Neb. 79, 65 N.W.2d 392 (1954); State ex rel. Ebke v. Board of Educational Lands & Funds, 154 Neb. 244, 47 N.W.2d 520 (1951).

Lease of school land under unconstitutional law was void from inception. Board of Educational Lands & Funds v. Gillett, 158 Neb. 558, 64 N.W.2d 105 (1954).

Persons dealing with school lands do so subject to trust obligation of state. Propst v. Board of Educational Lands & Funds, 156 Neb. 226, 55 N.W.2d 653 (1952).

State is under obligation to replace losses in permanent school fund, which cannot be diminished by application of capital gains. State ex rel. Bottcher v. Bartling, 149 Neb. 491, 31 N.W.2d 422 (1948).

While there is an obligation on the part of the state as trustee to replace shortages in the school fund, the obligation is not self-executing. State ex rel. Walker v. Board of Commissioners for Educational Lands & Funds, 141 Neb. 172, 3 N.W.2d 196 (1942).

Educational funds of state are trust funds, and can only be paid out for purposes specified. Taylor v. School Dist. of City of Lincoln, 128 Neb. 437, 259 N.W. 168 (1935).

Funds derived from grant by Congress of public lands, by contract with the federal government, are held by the state as trustee to carry out the object of the grant. State ex rel. Ledwith v. Brian, 84 Neb. 30, 120 N.W. 916 (1909).

School lands are held in trust by the state. United States v. 78.61 Acres of Land in Dawes & Sioux Counties, 265 F.Supp. 564 (D. Neb. 1967).