ARIZONA STATE SENATE
Phoenix, Arizona
trust land proceeds and
income
Purpose:
Requests voter approval
during the next general election of constitutional amendments to specify that
rental income derived from state trust lands and other funds as provided by law
are to be apportioned to supplement, not supplant, state general fund
appropriations for state aid to education.
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.
The fiscal impact to the
state general fund associated with this bill is unknown.
Provisions:
1. Stipulates that rental revenues derived from state trust lands supplement, rather than supplant, state general fund appropriations for state aid to education.
2. Requires that, from and after June 30, 2001, income from the permanent fund be apportioned for classroom site enhancements in addition to the amount of basic state aid paid from the state general fund.
3. Requires the Legislature to provide by law for the use 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.
4. Requires the Secretary of State to submit this proposition to the voters at the next general election.
5. Contains technical, clarifying and conforming changes.
Amendments
Adopted by the NRAE Committee
1. Requires that, from and after June 30, 2001, income from the permanent fund be apportioned for classroom site enhancements in addition to the amount of basic state aid paid from the state general fund.
2. Eliminates legislative appropriation for the 10 percent of proceeds from the sale of state trust land not deposited into the permanent fund.
3. Eliminates the requirement 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 for clarifying changes.
Amendments
Adopted by Committee of the Whole
1. Removes the provision reducing, from 100 percent to 90 percent, the portion of monies derived from the sale of state trust lands deposited into the permanent fund.
2. Stipulates that rental revenues derived from state trust lands supplement, rather than supplant, state general fund appropriations for state aid to education.
3. Makes conforming changes.
Senate Action
NRAE 3/9/01 DPA 5-0-3
3rd Read 3/26/01 20-10
Prepared by Senate Staff
March 12, 2001