ARIZONA STATE SENATE
Phoenix, Arizona
trust land proceeds and
income
Purpose:
Requests voter approval
during the next general election of constitutional amendments to adjust the
deposit of monies derived from the sale of state trust lands to provide for
additional proceeds to be made available for beneficiaries.
Background:
The State Enabling Act was
passed in 1910 to prepare the Territory of Arizona for statehood. Under the Act, certain sections of each
township were assigned to be held by the state in a trust for the benefit of
schools and other public institutions.
The State Land Department (Department), established in 1915, has
authority over all state trust lands.
The mission of the Department is to manage the trust lands and maximize
the revenues derived from those lands for the beneficiaries.
Revenues earned from state
trust land are classified as either permanent or expendable. Revenues derived from the sale of state
trust land and the sale of natural products, such as sand, gravel, water and
fuel wood are deposited in the permanent fund by the State Treasurer and
invested in stocks, bonds and interest-bearing securities. The investment income from this fund is
subsequently made available as expendable revenue for use by the appropriate
beneficiary. Revenues generated from
lease rentals are additionally available to the beneficiary as expendable
revenue.
At the end of FY 2000,
monies in the permanent fund totaled $1.01 billion.
S.C.R. 1005, if approved by
the voters, adjusts the deposit of monies derived from the sale of state trust
lands so that 90 percent is deposited into the permanent fund. The legislature provides by law or appropriation
for the remaining 10 percent for the benefit of the respective objectives for
which the land was granted or confirmed.
The fiscal impact to the
state general fund associated with this bill is unknown.
Provisions:
1. Reduces, from 100 percent to 90 percent, the portion of monies derived from the sale of state trust lands deposited into the permanent fund.
2. Requires the Legislature to provide by law or appropriation for the use of 10 percent of the monies derived from the sale of state trust lands plus all of the interest, rental and other income from the use of those lands for the benefit of the respective objectives for which the land was granted or confirmed.
3. Requires that interest and other income derived from school lands be used only for construction and maintenance, including correction and renewal of deficiencies in common and high school buildings.
4. Makes conforming changes regarding the proposed change in distribution of revenue derived from the investment of the proceeds of the sale of state trust land.
5. Requires the Secretary of State to submit this proposition to the voters at the next general election.
6. Contains technical and conforming changes.
Prepared by Senate Staff
February 27, 2001