Reference Title: state board of investment; powers

AN ACT
AMENDING SECTIONS 15-1662, 35-311, 37-521, 37-522, 37-523, 37-524 AND 37-525, ARIZONA REVISED STATUTES; RELATING TO PERMANENT STATE LAND FUNDS.

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 15-1662, Arizona Revised Statutes, is amended to read:

15-1662 . Universities; funds and accounts

A. The state treasurer shall maintain the following separate permanent funds and accounts:

1. Universities land fund. DISTRIBUTIONS FROM THE FUND PURSUANT TO ARTICLE X, SECTION 7, CONSTITUTION OF ARIZONA AND all monies derived from the lease, sale or other disposition of lands granted by the United States for the use and benefit of the universities shall be deposited in the universities land fund as provided in this section and section 37-522. Monies accruing to the universities under the laws of the United States pertaining to timber lands shall be deposited in the universities timber land account established by section 37-482, subsection B and may be used for the payment of expenditures which the state land department incurs for the conservation, sale and other administration of timber or timber products as provided in this section and sections 37-482 and 37-522.

2. Normal schools land fund. DISTRIBUTIONS FROM THE FUND PURSUANT TO ARTICLE X, SECTION 7, CONSTITUTION OF ARIZONA AND all monies derived from the lease, sale or other disposition of lands granted by the United States for the use and benefit of normal schools shall be deposited in the normal schools land fund as provided in this section and section 37-523.

3. Agricultural and mechanical colleges land fund. DISTRIBUTIONS FROM THE FUND PURSUANT TO ARTICLE X, SECTION 7, CONSTITUTION OF ARIZONA AND all monies derived from the lease, sale or other disposition of lands granted by the United States for the use and benefit of agricultural and mechanical colleges shall be deposited in the agricultural and mechanical colleges land fund as provided in this section and section 37-524.

4. School of mines land fund. DISTRIBUTIONS FROM THE FUND PURSUANT TO ARTICLE X, SECTION 7, CONSTITUTION OF ARIZONA AND all monies derived from the lease, sale or other disposition of lands granted by the United States for the use and benefit of schools of mines shall be deposited in the school of mines land fund as provided in this section and section 37-524.

5. Military institutes land fund. DISTRIBUTIONS FROM THE FUND PURSUANT TO ARTICLE X, SECTION 7, CONSTITUTION OF ARIZONA AND all monies derived from the lease, sale or other disposition of lands granted by the United States for the use and benefit of military institutes shall be deposited in the military institutes land fund as provided in this section and section 37-525.

B. The Arizona board of regents shall maintain a separate permanent fund to be known as the universities fund. All monies other than those specified in subsection A which are derived from the lease, sale or other disposition of lands or property which are given by any person or by law as a trust fund to be administered by the board in conformity with the terms of the gift shall be deposited in the universities fund. Such monies shall be invested and administered as designated for the use of the universities except such monies as are appropriated for specific purposes from the general fund of this state for the use of the universities.

C. The state treasurer shall keep the monies of the land funds invested in safe interest bearing securities AND PRUDENT EQUITY PURSUANT TO ARTICLE X, SECTION 7, CONSTITUTION OF ARIZONA . The securities shall be approved by the governor and the secretary of state.

D. Monies shall not be taken from one fund or deposited in any other fund nor shall any fund or the income from the fund be taken or expended for any object other than that of the original gift or appropriation.

Sec. 2. Section 35-311, Arizona Revised Statutes, is amended to read:

35-311 . State board of investment; membership; powers and duties

A. A state board of investment is established consisting of the state treasurer, the director of the department of administration, the superintendent of banks and two individuals appointed by the state treasurer, one of whom shall have verifiable expertise in investment management and one of whom shall represent a public entity with current deposits in a local government investment pool. The state treasurer shall be chairman of the board. The board shall keep an accurate record of its proceedings. A certified copy of the record is prima facie evidence of the matters appearing in the record in any court. A meeting of the board may be called at any time by the chairman or a majority of the board members.

B. The state board of investment shall:

1. Hold regular monthly meetings.

2. Review investments of treasury monies.

3. SERVE AS TRUSTEES OF THE PERMANENT STATE LAND FUNDS AND PROVIDE MANAGEMENT OF THE ASSETS OF THE FUNDS CONSISTENT WITH THE REQUIREMENTS OF ARTICLE X, SECTION 7, CONSTITUTION OF ARIZONA.

C. The state treasurer shall furnish to the board of investment at its regular monthly meeting a report of the performance of current investments and a report of the current investments as of the close of business of the preceding month. The state treasurer shall make these reports available for inspection by the public during normal working hours at the office of the state treasurer for a period of time of not less than two years after the date of the report.

D. The board of investment may order the state treasurer to sell any of the securities, and any order shall specifically describe the securities and fix the time period during which they are to be sold. Securities so ordered to be sold shall be sold for cash by the state treasurer at the current market price. The state treasurer and the members of the board are not accountable for any loss occasioned by sales of securities at prices lower than their book value. Any loss shall be charged against earnings received from interest or capital gains on the applicable treasury monies.

E. The board may establish standards in addition to those established by section 35-317, subsection A for the qualification of agents acting pursuant to section 35-317, subsection B.

Sec. 3. Section 37-521, Arizona Revised Statutes, is amended to read:

37-521 . Permanent state school fund; composition; use

A. The permanent state school fund shall consist of:

1. The proceeds of all lands granted to the state by the United States for the support of common schools.

2. All property which accrues to the state by escheat or forfeiture.

3. All property donated for the benefit of the common schools, unless the terms of the donation otherwise provide.

4. All unclaimed shares and dividends of any corporation incorporated under the laws of this state.

5. The proceeds of sale of timber, mineral, gravel or other natural products or property from school lands and state lands other than those granted for specific purposes.

6. The residue of the lands granted for payment of the bonds and accrued interest issued by Maricopa, Pima, Yavapai and Coconino counties, after the purpose of the grant has been satisfied, and the five per cent of the proceeds of sales of public lands lying within this state sold by the United States subsequent to admission of this state into the union, as granted by the enabling act.

B. The fund shall be and remain a perpetual fund AND DISTRIBUTIONS FROM THE FUND PURSUANT TO ARTICLE X, SECTION 7, CONSTITUTION OF ARIZONA , the interest of which only, together with the monies derived from the rental of the lands and property, including interest and accrued rent for that year credited pursuant to section 37-295, shall be used as follows, subject to legislative appropriation:

1. From and after June 30, 1999, if there are outstanding state school facilities revenue bonds pursuant to title 15, chapter 16, article 6, the state treasurer shall credit to the state school facilities revenue bond debt service fund established in section 15-2054 the amount that is necessary to service the obligation of issued and outstanding state school facilities revenue bonds.

2. From and after June 30, 1999, if there are no outstanding state school facilities revenue bonds pursuant to title 15, chapter 16, article 6 or if the amount of monies available under this subsection exceeds the amount required under paragraph 1 of this subsection, the monies are subject to legislative appropriation to the new school facilities fund established by section 15-2041.

3. From and after June 30, 1999, if the amount of monies available under this subsection exceeds the amount required under paragraphs 1 and 2 of this subsection, the remaining amount shall be used as provided in section 15-971, subsection H.

Sec. 4. Section 37-522, Arizona Revised Statutes, is amended to read:

37-522 . Universities land fund; composition; use

A. The universities land fund shall consist of:

1. The proceeds of all lands granted to the state by the United States for university purposes.

2. All property donated by individuals for university purposes, unless the terms of the donation otherwise provide.

3. The sale of timber, mineral, gravel or other natural products or property from lands granted or given for university purposes.

B. The fund is and shall remain a perpetual fund for the benefit and support of the universities of this state AND DISTRIBUTIONS FROM THE FUND PURSUANT TO ARTICLE X, SECTION 7, CONSTITUTION OF ARIZONA , the interest of which only, together with the monies derived from the sales of timber or timber products , AND the rental of the lands and property, including interest and accrued rent for that year credited pursuant to section 37-295, shall be used.

Sec. 5. Section 37-523, Arizona Revised Statutes, is amended to read:

37-523 . Normal schools land fund; composition; use

A. The normal schools land fund shall consist of:

1. The proceeds of all lands granted to the state by the United States for normal schools for the purpose of training teachers.

2. All property donated for normal schools, teacher colleges or colleges of education for the purpose of training teachers, unless the terms of the donation otherwise provide.

3. The sale of timber, mineral, gravel or other natural products of property granted or donated for such purposes.

B. The fund shall be and remain a perpetual fund for the benefit and support equally of the universities for the purpose of training teachers AND DISTRIBUTIONS FROM THE FUND PURSUANT TO ARTICLE X, SECTION 7, CONSTITUTION OF ARIZONA , and the interest only of the fund, together with the monies derived from the rental of the lands and property, including interest and accrued rent for that year credited pursuant to section 37-295, shall be used.

Sec. 6. Section 37-524, Arizona Revised Statutes, is amended to read:

37-524 . Agricultural and mechanical colleges land fund and school of mines land fund; composition; use

A. The agricultural and mechanical colleges land fund, and the school of mines land fund, shall separately consist of the proceeds of:

1. All lands granted to the state by the United States for the respective purposes named.

2. All property donated by individuals for like purposes, unless the terms of the donation otherwise provide.

3. The sale of timber, mineral, gravel or other natural products or property from lands granted or donated for such purposes.

B. The funds provided for in this section shall be and remain perpetual funds for the benefit and support of the agricultural and mechanical colleges and the schools of mines at the universities AND DISTRIBUTIONS FROM THE FUNDS PURSUANT TO ARTICLE X, SECTION 7, CONSTITUTION OF ARIZONA , and the interest only of the funds together with the money derived from the rental of the lands and property, including interest and accrued rent for that year credited pursuant to section 37-295, shall be used.

Sec. 7. Section 37-525, Arizona Revised Statutes, is amended to read:

37-525 . Other land funds; composition; use

A. The legislative, executive and judicial public buildings land fund, the penitentiary land fund, the Arizona state hospital land fund, the state charitable, penal and reformatory institutions land fund, the schools and asylum for the deaf, dumb and blind land fund, the miners' hospital for disabled miners land fund and the military institutes land fund shall separately consist of:

1. The proceeds of all lands granted to this state by the United States for the respective purposes named.

2. All property donated by individuals for like purposes, unless the terms of the donation otherwise provide.

3. The sale of timber, mineral, gravel or other natural products or property from lands granted or donated for such purposes.

B. The funds shall be and remain perpetual funds for the benefit and support of institutions corresponding to the purposes for which the funds are established, except as otherwise provided in the enabling act and section 37-295 AND DISTRIBUTIONS FROM THE FUNDS PURSUANT TO ARTICLE X, SECTION 7, CONSTITUTION OF ARIZONA , and the interest only of the funds, together with the monies derived from the rental of the lands and property, shall be used. Monies in the state charitable, penal and reformatory institutions land fund are subject to legislative appropriation.

APPROVED BY THE GOVERNOR APRIL 26, 1999.

FILED IN THE OFFICE OF THE SECRETARY OF STATE APRIL 27, 1999.