Contents

Message From the Commissioner........................................................................................ 1
Fiscal Year 2007—A Historic Revenue Year ....................................................................... 3
Permanent Fund ................................................................................................................... 5
Expendable Revenue ........................................................................................................... 6
Real Estate Program ............................................................................................................ 7
Natural Resources Program ............................................................................................... 11
Forestry Program................................................................................................................ 13
Land Information, Title & Transfer Program ....................................................................... 15
Board of Appeals ................................................................................................................ 16
State Trust Land Uses ........................................................................................................ 17
Land Ownership and Management .................................................................................... 18
Original Land Grant ............................................................................................................ 20
Management Team............................................................................................................. 21
Fund and Beneficiary Summary ......................................................................................... 22
Common Schools K - 12 ................................................................................................ 23
University Grants ........................................................................................................... 25
Other Grants .................................................................................................................. 29
Financial Schedules............................................................................................................ 32
Receipts by Category.....................................................................................................33
Rental Acreage and Receipts ........................................................................................ 34
Treasurer’s Formula Distribution.................................................................................... 35
State Trust Land Acreage by Beneficiary ...................................................................... 36
Auctions of Leases With and Without Preferred Right .................................................. 37

Please visit our website at www.land.state.az.us

Janet Napolitano
Governor
State of Arizona

Message From the Commissioner
September 1, 2007

A Written Report to
Governor Janet Napolitano
by the Arizona State Land
Commissioner

The Honorable Janet Napolitano
Governor of Arizona 1700 W. Washington Street
Phoenix, Arizona 85007
Dear Governor Napolitano:
It is my privilege to deliver to you the State Land Department’s Annual Report for fiscal year 2007 as required by A.R.S.
§37.132. The report contains a summary of the Department’s management activities and, more importantly, the revenue
that the Land Department earned during the fiscal year.
It is my primary and continuing goal to increase our ability to generate revenue for the beneficiaries of the State Trust. In
this fiscal year, Land Department staff continued their diligent work and sincere dedication to support the Trust. As you
are aware, we were extremely successful in generating more revenue for the beneficiaries.
Fiscal year 2007 was one of the most productive years in the history of the Land Department. Several revenue records
were broken. The Department had receipts of $332.3 million. The Department completed 16 land sales auctions, resulting
in gross sales of approximately $453.7 million. In many of these auctions there was intense, competitive bidding that
raised the sale price significantly above the appraised value of the land.

Mark Winkleman
Arizona State Land
Commissioner

Of the total $453.7 million, $14.8 million was from cash sales and was directly deposited into the Permanent Fund. The
balance of just over $431.1 million was financed through the Department and will be paid off over time. The beneficiaries
will earn interest on the balance at a rate of 8% to 11% for an average term of 7 years. These interest rates are generally
higher than market and the total outstanding receivable balance from term sales is a record $983.9 million, earning interest
daily. The money earned on this balance will be paid to our beneficiaries over the next several years. In addition, the remaining principal payments on the sales price for the land will be deposited in the permanent Fund in future years.
This year the Department generated $122.0 million in expendable revenue that was sent to beneficiaries for their immediate use. An impressive $58.3 million was generated from sales interest. Records were set in several other areas of expendable revenues: commercial leasing, $24.6 million; agriculture, $4.3 million and royalties for natural products, $9.8 mil-

lion.
The $367.8 million revenue generated this year by the Trust has been allowed as follows: $194.8 million from the sale of
land, rights-of-ways and minerals was deposited into the Trust Permanent Fund, increasing the Fund to $1,935,883.000;
The public schools and institutions received a record $118.9 million from land rents and interest income, school leases of
$3.1 million, as well as $35.6 million from the Treasurer’s formula distributions; the Treasurer’s Office also received $5.6

1

Message From the Commissioner
million in commercial prepayments that the Land Department will receive back over time as expendable revenue for the
beneficiaries; and $9.9 million was deposited in the General Fund. Of the $142.3 million in expendable revenue for the
schools (K-12), $72.3 was distributed through the School Aid Formula, $67.0 million went to the Classroom Site Fund and
$3.1 million was used for school leases.
Since I began in January of 2003, I have made an effort to streamline and improve operations. We are continuing to improve the procedures for our five year plan, conceptual planning, engineering and the terms allowed for financing purchases
of State Trust land. We have increased revenues by implementing a gross receipts audit program and a process to track audits for leases and participation sales. I am sure you would agree, the records sales and leases that occurred this year show
the success of our actions.
In FY 2007, several actions have been taken to protect the State Trust resources and, in situations where damage has been
done, to pursue monetary compensation for the Trust beneficiaries. Additionally, the Department worked hard to clean up
after trespassers that illegally dumped trash and other items on State Trust land. For example, the Department contracted to
remove the trash from a sinkhole called Dante’s Descent near Ashfork and fenced-off the area to prevent further damage.
Dante’s Descent is a natural sinkhole about 100 feet across and 300 feet deep, which as has been used for the illegal disposal of trash. Also, over 466 tons of trash was removed from State Trust land as the result of community volunteer groups
such as the stewards of Public Lands and Eagle Scout projects. More than 1,800 hours were contributed to clean up 36 different sites.
The Forestry Division was challenged by an early onset of fire season this year. Exceptionally severe drought through the
fall and winter months set the state for a potentially devastating wildfire season and the agency responded with an aggressive prevention and preparedness strategy that included the 15 inmate fire fighting crews. With the help of an early monsoon and extraordinary effort, the number of fires and acres burned was held to statistically normal values, and no serious
losses or injuries were suffered. The foresters also assisted 64 rural communities with hazardous fuel reduction projects
treating over 6,000 acres, provided 60 local fire departments with equipment, and helped trained 1,500 firefighters from
more than 105 fire departments from across the state in wildland firefighting tactics.
Thank you for the opportunity to serve Arizona and the Trust beneficiaries as State Land Commissioner. The possibilities
that exist for the Land Department over the next year are exciting. We intend to continue to prepare and market State Trust
land for public auction in a manner to ensure as much competition as possible so as to generate greater revenue for the
beneficiaries of the Trust. We will also strive to fulfill the additional and important responsibilities contained in our mission
such as fire suppression, mapping, title and conservation for the benefit of the citizens of Arizona.
Sincerely,

Mark Winkleman
Arizona State Land Commissioner
2

About the Commissioner
On January 6, 2003, Arizona Governor Janet Napolitano appointed Mark
Winkleman as the Arizona State Land
Commissioner. Mark has the responsibility to act as a trustee in the management of over 9 million acres of
State Trust land throughout all of Arizona, including over 500,000 acres in
major Arizona cities.
Mark brings over 24 years of commercial real estate experience to the
Land Department. When Mark came
to the Land Department, his initial
goal was to maximize the revenues
from the disposition of urban lands
through the auction process. After
implementing new strategies through
the Land Department staff, the intensity of bidders and the prices achieved
were unprecedented.
Mark has been a leader in the effort to
reform the laws under which the Trust
lands are managed. His goal is to encourage reform that will increase
revenues to the beneficiaries, primarily public education. He hopes to promote better planning of lands directly
in the path of growth and reduce urban sprawl while also providing for
better management of the vast rural
lands held by the Trust.

Fiscal Year 2007 - A Historic Revenue Year

Total Trust Revenue
FY 1998 - 2007

Record Revenues

(Millions)

• FY 2007 was an exceptional year for Trust revenues.
The Department received $332.3 million and the
Treasurer distributed $35.6 million for a grand total of
$367.8 million.
• Sold 4,262.33 acres for $453.7 million through 16
successful auctions, including 26.33 acres sold for
$28.5 million.
• Auctioned five long-term leases comprising of
12,228.36 acres that will generate at least $1.25 billion
over the terms of the leases.

$450
$400
$350
$300
$250
$200
$150
$100
$50
$0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

• The Department deposited $67.0 million into the
Classroom Site Fund, a 276% increase.

Fiscal Year

Land Department Earnings
Treasurer's Distribution
FUNDS
Expendable

5,611,921.02

School Leases

3,094,125.00

General

9,860,701.20

Permanent

194,766,598.13

TOTAL LAND DEPARTMENT

332,250,845.03

GRAND TOTAL - FY 2007

3

118,917,499.68

Commercial Prepayment

Treasurer’s Formula Distribution

Deputy State Land Commissioner
Jamie L. Hogue

FY 2007 TOTAL

35,572,689.00
367,823,534.03

Fiscal Year 2007 - A Historic Revenue Year
REVENUES BY BENEFICIARY
FY 2007

STATE LAND
EXPENDABLE
EARNINGS

TREASURER'S
FORMULA
DESTRIBUTION

TOTAL
EXPENDABLE
RECEIPTS

TOTAL
PERMANENT
FUND RECEIPTS

BENEFICIARIES

TRUST
ACRES

Common Schools (K - 12)
(Includes County Bonds)

8,101,127

109,977,020

32,351,317

142,328,337

182,685,597

325,013,934

Normal Schools

174,798

168,541

46,082

214,623

52,276

266,899

Agricultural & Mechanical
Colleges

124,944

102,538

201,319

303,857

10,721

314,578

Military Institutes

80,168

94,485

9,949

104,434

0

104,434

School of Mines

123,254

153,923

133,902

287,825

28,760

316,585

University Land Code

137,908

452,179

226,823

679,002

56,860

735,862

University of Arizona
(Act Of 2/18/1881)

54,157

454,598

566,953

1,021,551

412,088

1,433,639

School for the Deaf
& Blind

82,560

163,629

87,629

251,258

151,608

402,866

8,878,916

$111,566,913

$33,623,974

$145,190,887

$183,397,910

$328,588,797

Legislative, Executive
& Judicial Buildings

64,257

104,411

122,537

226,948

260,098

487,046

State Hospital

71,248

356,791

124,204

480,995

16,974

497,969

Miners Hospital*

95,431

1,516,377

158,276

1,674,653

554,015

2,228,668

State Charitable, Penal,
and Reformatory

76,818

7,483,715

1,403,184

8,886,899

10,453,377

19,340,276

Penitentiary

76,111

983,417

140,515

1,123,932

84,224

1,208,156

9,262,781

$122,011,624

$35,572,690

$157,584,314

$194,766,598

$352,350,912

Subtotal Education

TOTAL
*Miners' Hospital and Miners' 1929 combined.

4

TOTAL
RECEIPTS

Permanent Fund
• The Department deposited $194.8 million into the
Permanent Funds in FY 2007, increasing the book
value to $1,935,883,000.
• Principle payments on sales financed through the
Department are deposited into the Permanent Funds.
The balance of Department managed sales’ contracts
increased by $251.5 million resulting in a balance of
$983.9 million.
• The Permanent Funds consist of revenues earned
from the sale of State Trust land or assets such as
minerals or other natural products.
• Each beneficiary has its own Permanent Fund.
• The State Treasurer manages the Permanent Funds
and invests the funds in stocks, bonds and other
interest bearing securities. Distributions from the
Permanent Funds to the beneficiaries are based on a
constitutional formula.

Permanent Fund Balance
FY 1988 - 2007

BENEFICIARY SHARE OF PERMANENT FUND
JUNE 30, 2007
BOOK VALUE

MARKET VALUE

1,794,123,000

2,261,161,000

Normal Schools

2,121,000

2,800,000

Agricultural & Mechanical Colleges

6,494,000

8,869,000

Military Institutes

364,000

492,000

School of Mines

7,785,000

9,834,000

University Land Code

11,372,000

14,938,000

University of Arizona (Act of 2/18/1881)

25,777,000

33,530,000

School for the Deaf & Blind

3,072,000

4,166,000

Legislative, Executive, and Judicial

5,412,000

7,090,000

State Hospital

3,064,000

4,440,000

Miners Hospital*

6,658,000

8,751,000

64,184,000

83,140,000

5,458,000

7,424,000

1,935,883,000

2,446,636,000

Common Schools (K - 12)

State Charitable, Penal and Reformatory

$2,000

Penitentiaries
TOTAL**
*Miners' Hospital and Miners' 1929 combined.

$1,000

**Values are prov ided by the State Treasurer's Office and are rounded to the nearest thousand.

$500

'06

'04

'02

'00

'98

'96

'94

'92

'90

$0
'88

(M illions )

$1,500

Fiscal Year

5

Expendable Revenue
• Expendable revenue includes lease revenue from
Trust land leases and permits, interest from sales
contracts, and the Treasurer’s formula distribution of
the Permanent Funds.

EXPENDABLE REVENUE BY BENEFICIARY 2007

BENEFICIARIES

• Expendable revenues are distributed directly to the
beneficiaries.
• Expendable revenue totaled $157.6 million in FY 2007.
• Revenue from Trust land leases, permits, and interest
earnings from sales financed through the Department
totaled $122.0 million, a 55% increase.
• The Treasurer distributed $35.6 million based on the
constitutional formula based on net return and the
market value.

Trust Expendable Earnings
FY 1998 - 2007

Normal Schools
Agricultural and Mechanical Colleges
Military Institutes

LEASE & SALES
CONTRACT
INTEREST

TOTAL
EXPENDABLE
REVENUE

32,351,317.00

109,977,019.94

142,328,336.94

46,082.00

168,541.31

214,623.31

201,319.00

102,538.26

303,857.26

9,949.00

94,485.26

104,434.26

School of Mines

133,902.00

153,923.24

287,825.24

University Land Code
University of Arizona
(Act of March 18, 1881)

226,823.00

452,179.39

679,002.39

566,953.00

454,597.91

1,021,550.91

87,629.00

163,629.23

251,258.23

33,623,974.00

111,566,914.54

145,190,888.54

School for the Deaf and Blind
Subtotal Education:
Legislative, Executive & Judicial Buildings

122,537.00

104,411.35

226,948.35

$180

State Hospital

124,204.00

356,790.61

480,994.61

$160

Miners' Hospital
State Charitable, Penal, and Reformatory

$140

Penitentiary Grant

158,276.00

1,516,376.58

1,674,652.58

1,403,184.00

7,483,714.54

8,886,898.54

140,515.00

983,417.06

1,123,932.06

35,572,689.00

122,011,624.68

157,584,314.68

$120
$100

TOTAL

$80
*The amount for expendable earnings includesf $3,094,125.00 from the school leases in accordance
w ith 37-221, D.

$60
$40
$20
$0
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07

(Millions)

Common Schools (K - 12)
(Including lands to Retire County Bonds)

TREASURER'S
FORMULA
DISTRIBUTION

Total Expendable
Treasurer's Distribution
Land Department Earnings

6

Real Estate Program
• A total of 24 Sales & Commercial Leases were auctioned leading to an
outstanding year with total auctioned value of over $602 million. In many
of these auctions there was intense, competitive bidding. The total sales
price was increased by approximately 14% above the appraised value.

• The interest payment on the certificate of purchase balances was an
impressive $58.3 million in FY 2007. Interest payments are expendable revenue and are available to the beneficiaries for use in their
operations during the same year they are generated.

• Of the total $453.7 million in sales, the majority was financed through the
Department and will be paid off over time. The beneficiaries will earn
interest on the balance at a rate of 10%, to over 11% for an average term
of seven years. These interest rates are generally higher than market, and
the total outstanding receivable balance from FY 2007 term sales was a
record $441.6 million, earning interest daily. The money earned on this
balance will be paid to our beneficiaries over the next several years. In
addition, the remaining principal payments on the price for the land will
be deposited in the Permanent Fund in future years.

• The beneficiaries also received expendable revenues from commercial leases of $24.6 million and rights-of-way leases of $20.7 million.
In addition, $5.6 million in commercial prepayment revenue and $3.1
million in school facility lease revenue was earned.
• The Department paid approximately $3.7 million in Broker’s commissions in FY 2007. Beginning in 1996, Real Estate Brokers were
authorized to represent bidders at State Trust land public auctions by
registering according to Land Department Rules. Commissions are
paid by the successful bidder as a condition of the public auction.
The program has been very successful in bringing more bidders to
the auctions and at increasing the sales prices.
•

• The chart to the right
shows the significant
increase in the outstanding certificate of
purchase balance in
recent years due to the
cumulative effect of
several very successful
sales years. The $983.9
million balance at the
end of the FY 2007,
was $251.5 million
higher than the FY
2006 ending balance.

• The strong real estate market statewide created a vigorous demand
for additional infrastructure, including public roads, electrical power,
water and sewer. Revenues from perpetual rights-of-ways generated
in excess of $24.3 million in FY 2007.

7

Real Estate Program
Major Auctions
• $149.45 Million; Phoenix, April 17, 2007:
Desert Ridge Holdings, LLC, purchased 269 acres of multi-family property in Desert
Ridge, located at the Southeast corner of 40th Street and Deer Valley Drive in Phoenix.
This is the highest land sale in department history.
• $28.5 Million; Phoenix, May 31, 2007:
With more that 40 bids, Westfield / Greystone Master Partnership, LLC successfully
purchased 26 acres of high density residentially-zoned land located on the Northeast
corner of Deer Valley Drive and 56th Street in the City of Phoenix. The sale reflects a
36% percent premium above the appraised land value of $20.5 million and is the state
Trust record of $1.082 million per acre.
• $58.6 Million; Apache Junction, December 7, 2006:
A very exciting auction, with 118 bids for the 1,011 acres of Lost Dutchman Heights.
Desert Communities Inc., a subsidiary of Las Vegas-based Rhodes Homes won the
auction for a final price that was a 30 percent premium above the appraised value of
$45,250,000. As part of this auction, the State Land Department initiated an innovative
process that required the winning bidder to complete a master plan for the surrounding
6,690 acres of State Trust land at an estimated cost of $6 million. As the winning bidder,
Desert Communities Inc. is required to work with City, County and State Land
Department in developing a plan that includes infrastructure financing, developing land
uses, water sources, waste water treatment and other elements of the master-planned
community. The planning process for the area is expected to take 18-24 months to
complete.
• $110.1 Million; Fountain Hills, March 15, 2007:
The Ellman Companies provided the winning $110.1 million bid for 1,276 acres of land in
the Town of Fountain Hills, reflecting a 16% premium above the appraised land value of
$95 million. The auction capped a successful planning and annexation effort by ASLD
and the Town of Fountain Hills that brought certainty and value to the only remaining
vacant tract in the Town.
• $61.1 Million; Peoria, February 15, 2007:
After 89 bids, the last residential tract in the ASLD-master planned community of Camino
a Lago was sold to Camino a Lago, LLC (Communities Southwest). This 694 acre
parcel is in the heart of north Peoria, adjacent to residential and commercial parcels that
are rapidly building out, despite the slowdown in the residential market.
• $8.44 Million; Sierra Vista, May 31, 2007:
Wal-Mart Company was the successful bidder in a competitive auction for 54 acres of
land in the center of Sierra Vista. This sale reflects the increasingly successful efforts to
market dispositions in the out lying areas.

8

• $875 Million Lease; Scottsdale, April 24, 2007:
A milestone bid of $68.5 million in land value for a 99-year lease on 124-acres of
commercially-zoned land in Scottsdale that will generate more than $875 million in
minimum lease revenue. Scottsdale Vistella, LLC won the land lease located at the
southeast corner of Pima Road and Loop 101 in the City of Scottsdale.
• $54 Million Lease; Outside of Gila Bend, December 14, 2006:
The successful bid for a land value of $44.8 million, will result in over $54 million for the
trust over the 25 years of the lease. Volkswagen of America, Inc. was the successful
bidder on the 11,977 acre parcel of land that had little potential for revenue generation
for decades. The land will be used for an automotive test track.

Real Estate Program
Facts and Figures
Land Auctioned FY 2007

Commercial Leases
• A record 5 commercial leases were successfully auctioned in FY
2007 that will generate a minimum of $1.3 billion in minimum lease
revenue over their collective terms. All of the leases have a
participation element, and total revenue generated is expected to
vastly exceed the minimum. Over $4.2 million was generated for
first year’s rent alone from these 5 leases, 15.6% of the total
commercial lease revenue for the year. The total land value bid for
the leases amounted to $148.6 million, a significant part of the total
$602 million in land value auctioned during the year. Two of the
auctions, for a 20 and 26 acre commercial parcels, were fiercely
competitive with 22 and 17 bids respectively. Total acres auctioned
were 12,228; however, the vast majority of the acreage (11,977) was
for an automotive test tract outside of Gila Bend.

Arces Sold
Urban 3,486.83

Total Sales Price

Acres Leased

Minimum Cumulative
Lease Revenue

$441,700,273.00

250.85

Rural

775.61

$11,955,000.00

11,977.51

$1,200,052,533.00
$54,776,434.00

Total

4,262.44

$453,655,273.00

12,228.36

$1,254,828,967.00

New Business Models
The Department continues to develop new business models in order to increase
productivity and revenue. The Lost Dutchman Heights project, as previously
discussed, provided for the sale of 1,100 acres in the Southeast Valley with the
successful bidder being responsible for the planning and entitlement of the
adjoining 6,600 of State Trust land.
The planning and zoning of Azara, a 6,000 acre project in north Phoenix, was
completed during the past year. Department staff utilized professional consultants,
under their direct management, to accomplish the entitlement process. The
Department will now move forward with its first sale in the project, which will be
subject to a participation element. A substantial parcel will be sold at auction and
the Department will then receive a percentage of subsequent sales of that parcel.
In Tucson, the Department is utilizing a different model whereby a planning
permitee will be granted authority to preliminary plan a large property in the
Houghton Road Corridor in the east part of the City. The Department will then
move forward with an auction and participation element for a portion of the
property, with the successful bidder being responsible for the subsequent detailed
planning of the auction property and remaining property.
The Department will consider the continued use of these and other business
models as they evolve in order to increase revenues to the beneficiaries.

9

Real Estate Program

DESERT RIDGE

DESERT RIDGE

A 5,400-Acre Master Planned Community in North Phoenix

A 5,400-Acre Master Planned

Community in North Phoenix

PARCEL 13
84 bids were placed for the 41 acre sitePARCEL
that is 8
surrounded on three sides by a golf course.
76 bids
for 536 acre master
The winning bid of $23.2 Million
represented
planned
community that includes
an almost 58% increase over
the appraised
semi-custom and condominium
land value.
housing, a community center and
open space areas.
The Aviano at Desert Ridge
Sold in 2001

DESERT RIDGE DISPOSITIONS
Parcel
No.

Acres

1A & 1B
1C
1D
1E, F& 1G
2A
2B
3
4
5
6
7
8
9
10
11
12
13
14
2
1S
2H
12
8
1H

780
180
54
332
106
2
242
23
24
62
91
536
50
189
279
41
40.23
104
288
502
32
81
269
26

The District at Desert Ridge Marketplace Opened
Sold/Leased
Use
December 2001
Parcels 1E, 1F, and 1G

Sold
Leased
Leased
Leased
Leased
Sold
Sold
Sold
Sold
Sold
Leased
Sold
Sold
Sold
Sold
Sold
Sold
Sold
Sold
Sold
Sold
Sold
Sold
Sold

Residential/Golf
Resort Golf
Marriott Resort
Commercial Retail
Sumitomo Sitix
Utility Pump Station
Mayo Hospital
Residential
Middle School
High School
American Express
Residential
Multi-family
Residential
Residential
Residential
Residential
Mixed Use
Residential
Residential
Multi-family
Residential
Residential
Residential

Date
Sold/Lease

Revenue

7/7/1993
$9,360,000
7/7/1993
$33,200,000
7/7/1993
$45,800,000
7/7/1993
$347,400,000
12/12/1995
$90,300,000
12/12/1995
$57,350
1/3/1996
$12,320,000
2/27/1996
$1,416,000
2/27/1996
$1,654,040
2/10/1998
$2,965,000
11/13/2000
$486,000,000
4/4/2001
$52,900,000
6/24/2003
$24,102,500
3/30/2004
$49,300,000
5/12/2004
$ 100,500,00
5/27/2004
$32,000,000
9/21/2004
$23,200,000
5/11/2005
$38,200,000
7/13/2005
$92,200,000
8/18/2005
$135,000,000
1/19/2006
$33,400,000
4/6/2006
$19,700,000
4/17/2007 $149,450,000
5/31/2007
$28,500,000

PARCEL 9
The winning bid of $24,102,500 was
bid up 156 times before The Statesman Group was announced the successful bidder. The 50 acre Toscana
community will include luxury condominium housing.
Toscana at Desert Ridge
Sold in 2003

10

Natural Resources Program

• Range Section
° Reviews Applications to Place Improvement and Land Treatment
Applications, and provides environmental and cultural clearances.
° Participates in statewide efforts to coordinate rangeland management activities with landowners,
lessees and other land management
and natural resource management
agencies on ranch units with intermingled land ownership patterns.
° Experienced a 6% increase in the
appraised value of forage on State
Trust rangeland from the previous
year.
• Minerals Section
° Administers five distinct leasing programs as well as providing
mineral resource evaluations and geologic information for land
sales, conservation proposals and conceptual plans.
° Continued improvement in metal prices and urban expansion is
reflected in the continued high levels of mineral exploration, aggregate production and oil and gas leasing activity.
° Revenues from aggregate sales totaled $5.7 million.
• Natural Resource Conservation Section
° Provided administrative support to 32 NRCDs and 21 environmental education centers they sponsored. Provided administrative
oversight for the formation of 2 new education centers. Served as
the clearing house and certified all annual reporting requirements
including annual reports, annual plans of operations, quarterly and
annual financial reports, and monthly/quarterly notices of public
meetings and minutes. Processed 85 requests for supplemental
funding including general fund and environmental special license
plate funding. Disbursed $617,500 to NRCDs and $27,100 to Conservation Ed Centers.

LEASES AND PERMITS
FY 2007

REVENUE PRODUCTION
FY 2007

Facts & Figures

Lease Rentals

Agriculture

Num ber
of
Acres Leases
172,310
396

Mineral Material
Grazing
Exploration Permits

$4,341,570

Mineral Material

$303,712

Grazing

$2,531,825

Exploration Permits

1,827

17

8,360,471

1,262

185,021

401

Oil & Gas

12,605

101

TOTAL

482,937

269

Mineral
Oil & Gas

Agriculture

$290,744

Geothermal

$0

Mineral

$36,977
$609,353
$8,114,182
Sale of Products

Num ber of Registrations
and Water Rights Claim s

Public Auction Water Sales

$297,004

Lease Water Charges
Stockpond Registrations

4,305

Certificated Surface
Water Rights
Well Registrations

108

$3,489,742

Natural Products

$5,714,578

TOTAL

$9,778,451

2,857

Adjudication Statements

Trespass Revenues

of Claimant

7,027

Water Right Registrations

7,405

Grandfathered
Groundw ater Rights

$277,127

Mineral Royalties

Trespass Revenue

$192,611

TOTAL*

$192,611

233
GRAND TOTAL

$18,085,244

*In addition $200,593 w as collected as leasing or salary revenue as a result of trespass
resolution.

11

Natural Resources Program
° $192,611 was collected from 12 different trespass and/or unauthorized
use case actions, including $100,000 from a commercial landscape firm
for mesquite trees removed from Trust land without permission.
° Dante’s Descent, a natural sinkhole in
northern Arizona has for years been an
attraction to cavers and climbers and, unfortunately, a target for illegal disposal of
household waste by local residents. In
May of 2007, ASLD retained an environmental contractor and removed 120 cubic
yards of waste from the sinkhole.
° Completed testing of a very rare archaeological site in the Phoenix area. The information will provide a comprehensive understanding of a Middle Archaic site in the Phoenix Basin
with a time period between 2572 and 2055 B.C., continuing into the
Hohokam time periods.

° Participated in 35 local, state and federal meetings involving a variety
of natural resource conservation issues ranging from Rapid Watershed
Assessments, reclamation and reforestation of wildlife area, and eradication and
control of noxious and invasive plants.
Represents the agency on the Arizona
Advisory Council for Invasive Species
(AISAC), established by Governor Napolitano’s Executive Order 2007-07.
° Provided technical review and assessment of 15 leases involving the removal of native plants from State
Trust lands and issued billing notices totaling $55,000 for the beneficiaries of the Trust.
• Water Rights & Agriculture Section
° The Land Department’s claim for a federal reserved water right for
State Trust land was briefed and argued, with the assistance of the Attorney General’s Office before the Special Master in the Water Rights
Adjudications. In 1979, the Land Department, on behalf of the Trust,
first asserted the claim for a federal reserved water right for trust land.
The claim has been pending since 1979. If granted, this right would be
the first of its kind in the United States. The State is currently waiting
for the Special Master’s decision.
° Produced increased revenues for Water Sales, Public Auction Water
Sales and Agricultural Lease rentals.
° Executed an Irrigation Contract for Central Arizona Project (CAP)
water for State Trust lands within the Maricopa Stanfield Irrigation
District (9,026 acre-feet) and an amendment for the M&I CAP subcontract (32,076 acre-feet). Will seek court validation for both contracts in
FY 2008.

• Dam Safety Program
° In January 2006, the Dam Safety Program was reorganized and expanded to develop a program for the identification, inventory and management of all water barriers located on Trust land. The program’s major objective is to reduce the State’s liability associated with jurisdictional and unsafe dams by identifying structural modifications that will allow the Arizona Department of Water Resources to reduce or
completely remove the jurisdictional or
unsafe classification.
° Major Accomplishments:
° Wineglass Dam in Yavapai County was retrofitted with two new
spillways, designed to reduce the storage capacity below the 50 acrefeet threshold. Subsequently, ADWR classified Wineglass Dam as a
Jurisdictional dam.
° Two unauthorized dams were identified in North Pinal County near
Biosphere II. Negotiations over a ten month period resulted in the
responsible party assuming all financial costs for the removal of the
dams and restoration of the area to pre-existing conditions.

• Environmental Resources and Trespass Section
° Over 466 tons of trash was removed from State Trust land as the result
of community volunteer groups such as the Stewards of Public Lands
and Eagle Scout projects. More than 1,800 hours were contributed to
clean up 36 different sites. Sheriff Arpaio’s Inmate Labor Detail and
adult probationers from two counties contributed service hours to conduct clean-up activities at five additional sites.

12

Forestry Program
• The State Forester (the Forestry Division Director) has the authority to prevent and suppress
wildland fires on approximately 30 percent of
land throughout the
State; more than
nine million acres of
State Trust land and
nearly 13 million
acres of private land
outside incorporated
municipalities. The
Land Department mobilizes firefighters and
equipment to and from all areas of Arizona and
other states for fire and non-fire emergencies.
• The Forestry Division responded to 1,647 wildland fires; 388 were State responsibilities and
1,259 were in support of federal and tribal agencies. Although 98 percent of all Land Department
fires were controlled at less than 100 acres, 7,790
acres were burned on State and private lands during the year.
• The Division maintains cooperative agreements
with more than 255 local and rural fire departments, other State and Federal agencies, and private companies to control wildfires on State and
private lands.
• The Division also sponsored 46 courses in basic
and intermediate wildland fire suppression strategies and tactics for approximately 1,500 students
from over 105 rural fire departments.

INMATE FIREFIGHTER PROGRAM
Governor Napolitano, with the support of the
State Legislature, has taken the initiative to
significantly expand the State’s Inmate Firefighter Program. There are currently 15 twentyperson Fire/Fuels Crews; 14 are all male crews
and one crew is staffed by all-female inmates.
These crews are
based out of the ten
Arizona Department
of Corrections Prisons Complexes located around the
State. The Fort
Grant,
Douglas,
Lewis and Yuma prison facilities each host one
crew. Four prisons each have two crews: Tucson, Florence, Globe and the Perryville Prison.
The Perryville facility houses the one female
crew and one of the all-male crews. The Winslow Prison Complex, including the smaller

“satellite” facility at Springerville, maintains
three crews.
The inmates selected for these Fire/Fuels Crews
are the lowest custody inmates in the system.
The inmates volunteer for this special work
assignment, and all
go through a comprehensive review
prior to being allowed into the program. Each of the
inmates must successfully complete
the standard firefighter training and physical
fitness testing prior to being allowed to go on
fire assignment. When these crews are not involved in fire fighting activities they work various thinning and brush abatement projects to
protect our communities at risk from wildfires.

Summary of Rural Fire and Volunteer Fire Assistance Grants
RFA Grant

VFA Grant

Annual Summary

Year

Number of
Projects

Dollars

Number of
Projects

Dollars

Number of
Projects

Dollars

2002
2003
2004
2005
2006
2007

37
33
42
38
42
3

$415,000
$482,000
$592,000
$580,000
$580,000
$85,000

26
21
24
22
31
18

$300,000
$298,000
$300,000
$283,000
$254,826
$223,650

63
54
66
60
73
21

$715,000
$780,000
$892,000
$863,000
$762,826
$308,650

13

Forestry Program
• The Division provides technical, educational, and financial assistance to rural communities and private landowners in the management of their forested lands.
Forest Stewardship Plans are written and implemented by natural resource professionals to guide landowners in reducing the risk of wildfire, insects and disease, protecting soil and water quality, providing timer and other forest products, improving fish and wildlife habitat, and maintaining the landscape’s natural
beauty. The Department supports rural fire departments and communities with State Fire Assistance Grants, Forest Health and Fire Abatement Grants, and
Rural and Volunteer Fire Assistance Grants.

SUMMARY OF COMMUNITY ASSISTANCE, 2002 - 2007
Dollars
Grant

Year Number

Provided

Firewise

Fuel

Acres

Homes

Plans Programs Workshops Treatments Treated Protected

State Fire Assistance
2002
2003
2004

38
19
29

$2,126,215
$1,458,222
$2,584,532

60
21
29

78
13
3

50
6
-

24
8
12

6,537
4825
1507

1095
1462
889

2005
2006
2007

13
19
18

$2,375,574
$2,063,621
$2,110,365

15
19
(18)

1
1

2
3

4
10

140
1,733

84
434

7

$1,089,050

7

4

1

4

1,922

446

2003
2004

18
3

$1,995,290
$1,498,324

20
3

7
7

7
-

11
6

2,542
800

804

2002
2003

38
44

$2,126,215
$4,542,562

60
48

78
29

50
17

24
29

6,537
9,599

1,095
2,729

2004
2005
2006

32
13
19

$4,082,856
$2,375,574
$2,063,621

32
15
19

10
1
1

2
3

18
10
10

7,870
1280
1,733

1150
328
434

2007

18

$2,110,365

18

164 $17,301,193

192

119

72

91

27,019

5,736

• The Division’s Urban and Community Forestry Program
provides technical assistance
and grants to Arizona cities and
towns. Staff coordinates the
Community Challenge Grant
Program, the Arizona Arbor
Day celebration and poster
contest. They work closely
with the Arizona Community
Tree Council, participating in
trade shows, consumer education programs, and workshops.
Arborists study classes are also coordinated by the staff
and the Tree Council, providing training for tree care
professionals.

Forest Health Protection
2003
Fire Hazard Abatement

Annual Summary

Grand Total

14

• The Division refurbished and distributed six
excess federal fire engines valued at $226,000
to cooperating rural fire
departments. The Division
developed
one
agency type six engine
and converted two chipper trucks into duel use
vehicles. The vehicles
will be used as fire
trucks in the summer
and chip trucks the rest
of the year. There are
currently 155 refurbished fire trucks on loan to rural fire departments statewide. The new equipment and equipment already provided to fire departments is valued at nearly $4,650,000.

Land Information, Title & Transfer Program
The Land Information, Title & Transfer
Division ensures the integrity of the State’s title
to 9.3 million acres of Trust land, is
accountable for the accuracy of public records
and land surveys, processes applications,
finalizes contracts and addresses legal and
administrative issues that come before the
Department.
• Public Records and Survey Information
State Trust lands have always been associated
with the growth of Arizona.
Customer
demands on Trust land information, whether
associated with land use planning, economic
development or conservation, have steadily
increased with the State’s growth.
The
Department prides itself in its ability to serve
all its customers with a State-of-the-art
computerized records information system,
while at the same time, provide the same level
of service to those customers who do not have
technological computer use skills. This past
year, the Department provided accurate and
timely records and survey information on 9.3
million acres of land to over 52,000 public,
corporate, and business inquiries.
• Public Response to the Department
The Department continually requests its
customers to rate our customer service in order
to assist us in improving our customer service
skills.
Virtually all customers, receiving

assistance or doing business with the
Department this past year, rated the
Department’s customer service as highly
satisfactory.
• Legal and Administrative
There can be numerous legal and
administrative issues that go hand-in-hand with
the administration of land management issues
associated with 9.3 million acres of surface and
subsurface estate.
The Department has made advances in bringing
to a close, several federal land management
actions that affect the
Department’s
management of Trust lands. One such issue
addresses approximately 35,000 acres of Trust
land now located within the recently expanded
boundary of the Petrified Forest National Park.
The Department provided Park officials with a
right of access to the Trust land proposed for
acquisition by the federal government for Park
purposes. The Park will provide policing
services on the State lands until federal
acquisition
can
be
accomplished.

• Application and Contract Processing
The Division develops and processes all
surface lease, sale, and use applications; and
prepares, drafts and revises all surface lease,
permit, and right-of-way documents, ensuring
compliance with laws, rules and guidelines of
the Department; and prepares land use and title
reports for all legal actions and special projects
addressing Trust lands.
This fiscal year, the Division processed 1,470
new applications, finalized 1,398 contracts, and
researched 5.2 million acres of land associated
with the sale, lease, use and title records
maintenance of the State’s Trust and sovereign
lands for its customers. The Division was
instrumental in completing the reparceling of
approximately 500,000 acres of subsurface land
in OASIS to allow PALMS to map and analyze
parcel information from its business system.

Another issue is the prospect that the State will
receive title to approximately 15,000 acres of
surface, mineral and oil and gas resources in
Apache County as compensation for the federal
condemnation of several hundred acres of Trust
land within the Fort Huachuca Military
Reservation.
Public Records Room

15

Board of Appeals

CURRENT BOARD MEMBERS

Jolene U. Dance, Chair
Phoenix
Member-at-Large.
Sanders K. Solot, Vice-Chair
Tucson
Represents the First District, consisting of Pima,
Santa Cruz, Cochise, Graham and Greenlee
counties.
Jeffrey Covill
Phoenix
Represents the Second District consisting of
Maricopa, Pinal, Gila, Yuma and La Paz counties.
Norman R. Brown
St. Johns
Represents the Third District consisting of Mohave,
Yavapai, Coconino, Apache and Navajo counties.
Kathleen M. Holmes
Scottsdale
Member-at-Large.

Arizona Revised Statute §37-215 requires all land sales and commercial leases
to be approved by the Board of Appeals, which also serves as an Administrative
Review Board.
Applicants and lessees may file an appeal with the Board of a final decision of
the State Land Commissioner relating to appraisals and classifications.
The State Land Department Board of Appeals consists of five board members
selected by the Governor and confirmed by the Senate for six-year terms. Three
members represent the 15 counties in the State, which are divided into three
districts. Two members hold positions-at-large.
The Board meets once a month unless special circumstances warrant additional
sessions. Meetings are usually held in Phoenix.
During the fiscal year, the Board approved 42 commercial leases, including
seven long-term leases, one for 25 years, two for 50 years, two for 75 years, and
two for 99 years; 99 rights-of-way sales appraisals, and 12 land sales appraisals;
seven of which were urban land sales.
Twelve new appeals were filed with the Board. One appeal modified the
Commissioner's decision. One appeal sustained the Commissioner's decision.
Nine appeals were withdrawn and dismissed by the Board. One appeal was
carried over to the next fiscal year.

16

State Trust Land Uses

The State Land Department manages 9.3 million acres
of Trust land.
•
•

9,075,493 acres of the surface are under 10,078
leases and other contracts.
682,389 acres of the subsurface are under 788
leases and other contracts.

STATE TRUST LAND USES - FY 2007
NO. OF
LEASES

% OF
LEASES

Rights-Of-Way

7,289

72.33%

144,109

1.59%

Grazing

1,262

12.52%

8,360,471

92.12%

326

3.23%

92,433

1.02%

17

0.17%

878

0.01%

Agricultural

396

3.93%

172,311

1.90%

Use Permits

580

5.76%

223,752

2.47%

U.S. Government

156

1.55%

18,265

0.20%

5

0.05%

22

0.00%

10

0.10%

12,892

0.14%

SURFACE

Commercial
Commercial School Leases

Homesite
Institutional
Recreational

TOTAL
ACREAGE

% OF
ACREAGE

37

0.37%

50,359

0.55%

10,078

100%

9,075,493

100%

Mineral

101

12.82%

12,605

1.85%

Mineral Exploration

401

50.89%

185,021

27.11%

Subtotal (Leases)
SUBSURFACE

Mineral Materials

17

2.16%

1,827

0.27%

Oil & Gas

269

34.14%

482,937

70.77%

Subtotal (Leases)

788

100%

682,389

100%

TOTAL LEASES

17

10,866

9,757,882

Land Ownership and Management

i
N

BLM
Forest Service
Indian Trust
Military
Nat’l Parks/Monuments
Other
Parks & Recreation
Private
State Trust
Wildlife Refuge
Cities

Produced by the Arizona State Land Department, GIS Section. The Arizona
State Land Department makes no warranties, implied or expressed, with respect to the information shown on this map.

18

Land Ownership and Management

State Trust Land within Each County

Land Ownership in Arizona
The State of Arizona contains an estimated 72,931,000 acres,
or approximately 113,417 square miles, making it the sixth
largest state in the United States. The surface land ownership
in Arizona can be classified in four basic categories.

COUNTY
Apache

ACRES
652,660

Cochise

1,371,005

Coconino

1,125,206

Gila

31,231

Graham

496,321

Greenlee

172,104

La Paz

254,411

Maricopa

644,226

Mohave

564,885

Navajo

370,169

Pima

860,756

Pinal

1,205,178

Santa Cruz
Yavapai
Yuma
Misc*
TOTAL
The percentages are estimates derived from digitized map data. The category
called Private is overestimated due to the inclusion of small amounts of land
owned by local, State, and Federal agencies.

61,154
1,264,246
186,689
2,540
9,262,781

*Trust lands located in California or Nev ada due to
realignment of Colorado Riv er

19

Original Land Grant
The Territory of Arizona was established on February 24, 1863, by an Act of Congress. This Act granted sections
16 and 36 of each township for the benefit of the Common Schools. Endowment of public lands for educational
purposes was a practice established by the Northwest Ordinance in 1787. Congress quickly recognized the value of
the land and the importance of public schools to a developing nation.
The State Enabling Act, passed on June 20, 1910, allowed the Territory of Arizona to prepare for statehood. In
addition to the previously designated sections of land, the Enabling Act assigned sections 2 and 32 of each township to be held in trust for the Common Schools. The needs of other public institutions were considered by Congress, and through the Enabling Act, more than two million additional acres were allocated for their use.

Today, the original school section
pattern exists only in a few locations
such as the remote Arizona Strip.
About three-quarters of the school
section acreage were relocated
through selections and exchanges
that have consolidated the Trust
lands into large blocks in Pinal,
Pima, Graham, Greenlee, and
Cochise counties in central and
southeastern Arizona; north and
northwest of Phoenix in Maricopa
and Yavapai counties; and in the
checkerboard railroad grant zone
across Mohave, Yavapai, Coconino,
Navajo, and Apache counties.

Land Endowment by Township
Township = 36 Sections
Each Section = 1 Square Mile

20

Management Team

Lynn Larson
Director
Administration &
Resource Analysis
Division

Jim Adams
Director
Real Estate Division

Bill Dowdle
Director
Natural Resources
Division

Kirk Rowdabaugh
State Forester
Forestry Division

Richard Oxford
Director
Land Information,
Title, & Transfer
Division

21

Fund and Beneficiary Summary
In 2007, State Trust revenues totaled $367,823,534. A total of $352,350,912 in receipts were earned for the beneficiaries, $9,860,701 was deposited in
the General Fund, and $5,611,921 was received as commercial prepayments. Of the beneficiary amount, $194,766,598 was deposited in the Permanent Funds. The Permanent Funds are managed by the State Treasurer. The remaining $154,490,189 in receipts were expendable and were distributed
to the beneficiaries for use in their operations. Expendable receipts are comprised of lease revenues, interest on the outstanding sales balance and the
Treasurer’s formula distribution. The table below indicates the number of acres remaining for each grant along with a breakdown on how the expendable receipts are distributed to the beneficiaries.

TRUST
ACRES

GRANT

BENEFICIARY

1st $72.3 million of expendable receipts
8,101,127

Receipts over $72.3 million
174,798

Normal Schools

124,944

Agricultural & Mechanical Colleges

80,168

Military Institutes

123,254

School of Mines

137,908

University Land Code

Classroom Site Fund

Board of Regents
to
Distribute to Universities

54,157

University of Arizona (Act 0f 2/18/1881)

82,560

School for the Deaf & Blind

School for the Deaf & Blind

64,257

Legislative, Executive & Judicial Buildings

Legislature, Executive & Judicial Branch

71,248

State Hospital

State Hospital

95,431

Miners’ Hospital (2 Grants)

Pioneers' Home

76,818

State Charitable, Penal, and Reformatory

76,111

Penitentiary

9,262,781

State Aid Formula for K - 12

Common Schools (K - 12) (Includes County Bonds)

Department of Corrections

TOTAL

22

50% Pioneers' Home
25% Department of Corrections
25% Department of Juvenile Corrections

Fund and Beneficiary Summary
Common Schools (K-12)
• Public education is by far the largest beneficiary of Trust land managed by the
Department. Congress granted two sections of each township to common schools
when Arizona became a territory and another two sections when Arizona became
a state. The State was able to select Federal lands equal to the sections that could
not be granted due to the establishment of Federal forests, parks and Indian reservations. Today, approximately 7.8 million acres remains in the Trust for common
schools.
• In FY 2007, a $182.7 million from sales and royalties
was deposited in the Permanent Fund for common
schools bringing the total
balance to $1,794,123,000.
• In FY 2007, a record 142.3
million was generated in
expendable receipts from
leases, interest on the outstanding sales balance and
from the Treasurer’s formula
distribution. Of this total,
$3.1 million was transferred
to the School Facilities
Board, $72.3 million was
distributed through the
School Aid Formula and
$67.0 million was deposited
into the Classroom Site
Fund, which will be used for teacher raises, classroom size reduction and dropout
prevention programs.
• The location of common school grant lands are shown in the above map. As a
result of the large number of acres that are strategically located around urban
areas, substantial revenues are expected to be generated in future years on behalf
of the schools.

23

COMMON SCHOOLS (K - 12)
ACRES AND INCOME - FY 2007
SURFACE LEASES
Agriculture
Commercial
Grazing
Homesite
Rights of Way
Use Permits
Institutional Taking
U.S. Government
Other
TOTAL SURFACE
SUBSURFACE LEASES
Mineral
Prospecting Permit
Mineral Material
Oil & Gas
U.S. Government
TOTAL SUBSURFACE
Penalty & Interest
Sales Interest
School Leases
Treasurer's Formula Distribution
GRAND TOTAL EXPENDABLE
Perm anent Fund Receipts
Perm anent Fund Balance

ACRES
126,668
34,460
7,365,245
22
105,050
179,133
5,406
17,426
0
7,833,409

INCOME
$3,034,569.36
$21,517,178.98
$2,179,453.36
$9,409.00
$20,286,405.59
$1,660,535.26
$190,215.08
$278,167.97
$4,290,853.10
$53,446,787.70

12,265
168,112
1,270
420,510
17,426
619,583

$36,257.33
$267,039.70
$164,228.01
$521,108.99
$0.00
$988,634.03
$263,776.73
$52,183,696.48
$3,094,125.00
$32,351,317.00
$142,328,336.94
$182,685,596.70
$1,794,123,000.00

Classroom Site Fund
Actual

Fund and Beneficiary Summary
Common Schools (K-12)
Proposition 310 (passed by voters in the 2000 election) created a Classroom Site Fund
whereby particular sources of funds, including revenue from the fiduciary management
of State Trust land, are directed to fund such items as teacher salaries, classroom size
reduction and dropout prevention programs. According to Proposition 301, the first
$72.3 million in expendable revenue for common schools is used to fund the basic state
aid formula, which funds education. Expendable revenue in excess of $72.3 million is
deposited into the Classroom Site Fund.

Fiscal Year

2002

2003

2004

2005

2006

2007

Permanent Fund Revenue

46.7

77.5

131.3

264.4

264.3

182.7

Treasurer's Distribution

54.8

53.9

18.6

24.4

31.4

32.4

Rent & Interest Received

31.1

39.2

46.3

60.8

58.7

106.9

Expendable Received

85.9

93.1

64.9

85.2

90.1

139.2

(72.3)

(72.3)

(72.3)

(72.3)

(72.3)

(72.3)

13.6

20.8

12.9

17.8

67.0

Base Year Amount
Classroom Site Fund

Common Schools Expendable
Earnings FY 1998 - 2007

-

Classroom Site Fund
FY 2002 - 2007

$160
$160.0

$140

$140.0

$120

$100.0
(Millions)

(Millions)

$120.0

$100
$80
$60

$80.0
$60.0

$40

$40.0

$20

$20.0

$0
'98

'99

'00

'01

'02

'03

'04

'05

'06

$0.0
2002

'07

2003

2004

2005

2006

Total Common School Expendable

Expendable Earnings
Treasurer's Formula Distribution
Leases & Sales Interest

Classroom Site Fund Distribution

24

2007

Fund and Beneficiary Summary
University Grants
• Arizona’s three universities (Arizona State University, Northern
Arizona University, and University of Arizona) are the beneficiaries of six Trust grants.

TOTAL UNIVERSITY GRANTS
FY 2007
SURFACE LEASES

• The total expendable revenue that was distributed to the Board
of Regents and then to the universities to fund their operations
was $2.6 million in FY 2007. An additional $560.7 thousand was
earned and added to the permanent funds for the six grants
bringing the total permanent fund balance to $53.9 million.

14,764

$372,288.47

Commercial

51,737

$399,801.61

596,364

$214,323.38

Homesite
Rights-of-Way
Use Permits
Institutional Taking
U.S. Government
Other
TOTAL SURFACE

Board of Regents
Distribution of Trust Revenues to the Universities
Grant

Prospecting Permit

1/2 to UofA and the other 1/2 split
between the 3 Universities based on
Engineering Credit hours

Military Institutes Grant

Split between the 3 Universities
based on Credit hours

TOTAL SUBSURFACE

University Land Code

Split between the 3 Universities
based on Credit hours

Penalty & Interest

Normal Schools

1/3 to each University

UofA 1881 Grants

UofA

School of Mines Grant

UofA

0

$5,153.00

7,725

$206,503.31

13,760

$117,189.87

5,151

$702.65

299

$6,000.03

0

$1,592.87

689,799

$1,323,555.19

SUBSURFACE LEASES

Distribution

Mineral Material

Agricultural & Mechanical Colleges

INCOME

Agriculture
Grazing

• The Board of Regents distributes the expendable earnings from
the six grants to the University of Arizona, Northern Arizona University and Arizona State University as follows:

ACRES

Oil & Gas
U.S. Government

$10,380.72

140

$11,760.09

49,488

$60,362.47

299

$0.00

56,095

$82,503.28
$20,206.90

Treasurer's Formula Distribution

$1,185,028.00

GRAND TOTAL EXPENDABLE

$2,611,293.37

Perm anent Fund Receipts
Perm anent Fund Balance

25

6,168

$560,705.00
$53,913,000.00

Fund and Beneficiary Summary
University Grants

Music Building

Location of University Trust Grant land

Arizona State University (ASU) is, along with the University of Arizona and Northern
Arizona University, beneficiary of six Trust grants. ASU was established in Tempe in
1885 by an act of the Thirteenth Territorial Legislature, and was initially formed as a
teachers college. The curriculum and degrees offered increased and by 1958 the college
performed all the functions of a university, and received authorization by an act of the
governor to become Arizona State University. It is now one of the premier metropolitan
research universities in the nation.
The Music Building is home to the ASU School of Music. Frank Lloyd-Wright’s son-inlaw designed the building which is a neighbor to Lloyd-Wright’s Gammage Auditorium.
The Hayden Library, built in 1966, is the largest library at ASU. The library is named for
Charles Hayden, the first president of the board of the Arizona Territorial Normal School.

26

Hayden Library

Fund and Beneficiary Summary
University Grants

NORMAL SCHOOLS GRANT

AGRICULTURAL & MECHANICAL COLLEGES

MILITARY INSTITUTES

ACRES AND INCOME - FY 2007

ACRES AND INCOME - FY 2007

ACRES AND INCOME - FY 2007

SURFACE LEASES

ACRES

INCOME

165

$3,014.01

Agriculture

Agriculture
Commercial

SURFACE LEASES

22,539

$20,458.69

Commercial

145,409

$51,887.02

Grazing

1,527

$47,244.89

Rights-of-Way

Use Permits

3,364

$15,771.01

Institutional Taking

2,721

$0.00

184

$6,000.03

175,909

$144,375.65

Grazing
Rights-of-Way

U.S. Government
TOTAL SURFACE

ACRES

INCOME

251

$2,911.78

Agriculture
Commercial

10,172

$1,567.72

106,443

$37,521.70

Grazing

1,876

$33,880.53

Rights-of-Way

Use Permits

2,920

$15,085.40

Institutional Taking

1,917

$0.00

Other

86

$0.00

TOTAL SURFACE

0

$92.87

123,664

$91,060.00

U.S. Government
Other
TOTAL SURFACE

SUBSURFACE LEASES
Prospecting Permit
Mineral Material
Oil & Gas
U.S. Government
TOTAL SUBSURFACE

2,290

$5,948.20

120

$10,560.09

1,982

$6,065.76

184

$0.00

4,576

$22,574.05

SUBSURFACE LEASES
Prospecting Permit

60

Mineral Material
Oil & Gas
U.S. Government
TOTAL SUBSURFACE

Penalty & Interest

$46,082.00

GRAND TOTAL EXPENDABLE

$214,623.31

Permanent Fund Receipts

$52,276.01

Permanent Fund Balance

$2,121,000.00

Penalty & Interest

INCOME

480

$960.00

1,935

$37,737.00

76,749

$31,613.66

259

$3,668.09

Use Permits

40

$179.06

0

$1,500.00

79,463

$75,657.81

SUBSURFACE LEASES
Oil & Gas

16,551

$16,550.81

TOTAL SUBSURFACE

16,551

$16,550.81

20

$1,200.00

Penalty & Interest

$2,276.64

7,421

$9,698.01

Treasurer’s Formula Distribution

$9,949.00

86

$0.00

7,587

$10,958.01
$520.25

Treasurer’s Formula Distribution

$201,319.00

GRAND TOTAL EXPENDABLE

$303,857.26

Permanent Fund Receipts

$10,721.25

Permanent Fund Balance

$6,494,000.00

27

ACRES

$60.00

$1,591.61

Treasurer’s Formula Distribution

SURFACE LEASES

GRAND TOTAL EXPENDABLE

$104,434.26

Permanent Fund Receipts

$0.00

Permanent Fund Balance

$364,000.00

Fund and Beneficiary Summary
University Grants

SCHOOL OF MINES

UNIVERSITY LAND CODE

UNIVERSITY OF ARIZONA - 1881

ACRES AND INCOME - FY 2007

ACRES AND INCOME - FY 2007

ACRES AND INCOME - FY 2007

SURFACE LEASES

ACRES

INCOME

2,485

$37,992.12

Agriculture
Commercial

Agriculture
Commercial

SURFACE LEASES

8,483

$9,213.52

111,207

$40,773.87

Grazing

Rights-of-Way

1,040

$46,752.62

Use Permits

1,286

$2,173.58

Grazing

U.S. Government
TOTAL SURFACE

17

$0.00

124,518

$136,905.71

ACRES

INCOME

4,276

$84,985.18

Agriculture
Commercial

8,238

$257,158.55

117,681

$40,364.44

Grazing

Rights-of-Way

2,218

$18,066.83

Homesite

Use Permits

4,249

$32,841.72

Rights-of-Way

107

$702.65

8

$0.00

136,777

$434,119.37

Institutional Taking
U.S. Government
TOTAL SURFACE

SUBSURFACE LEASES
Prospecting Permit
Oil & Gas

1,271

$1,270.68

11,737

$14,388.58

U.S. Government
TOTAL SUBSURFACE

17

$0.00

13,025

$15,659.26

SUBSURFACE LEASES
Prospecting Permit
Oil & Gas

2,513

$3,031.71

11,677

$13,419.31

8

$0.00

14,198

$16,451.02

U.S. Government

$1,358.27
$133,902.00

Penalty & Interest

GRAND TOTAL EXPENDABLE

$287,825.24

Treasurer’s Formula Distribution

$226,823.00

GRAND TOTAL EXPENDABLE

$679,002.39

$28,759.87

Permanent Fund Balance

$7,785,000.00

INCOME

7,107

$242,425.38

369

$73,666.13

38,876

$12,162.69
$5,153.00

791

$56,890.35

1,901

$51,139.10

406

$0.00

U.S. Government

4

$0.00

Other

0

$0.00

49,455

$441,436.65

Use Permits
Institutional Taking

SUBSURFACE LEASES
Prospecting Permit
Oil & Gas
U.S. Government

Treasurer’s Formula Distribution

Permanent Fund Receipts

ACRES

0

TOTAL SURFACE

TOTAL SUBSURFACE
Penalty & Interest

SURFACE LEASES

$1,609.00

TOTAL SUBSURFACE
Penalty & Interest
Treasurer’s Formula Distribution

Permanent Fund Receipts

$56,860.11

Permanent Fund Balance

$11,372,000.00

28

GRAND TOTAL EXPENDABLE

35

$70.13

120

$240.00

4

$0.00

159

$310.13
$12,851.13
$566,953.00
$1,021,550.91

Permanent Fund Receipts

$412,087.76

Permanent Fund Balance

$25,777,000.00

Fund and Beneficiary Summary
Other Grants
• The remaining six Trust grants have as their beneficiaries the School for the Deaf & Blind, the Legislative, Executive and Judicial Buildings, the State Hospital,
the Pioneers’ Home, the Department of Juvenile Corrections and the Department of Corrections. These six grants were authorized in the Enabling Act and
received 100,000 acres, except for the State Charitable Grant which received 200,000 acres. A chart showing the connection between the grants and the beneficiaries is provided below.
• The Pioneers’ Home received a total of $6,118,102 in expendable receipts and $5,780,703 in Permanent Fund receipts in FY 2007.
• The Department of Juvenile Corrections received a total of $2,221,725 in expendable receipts and $2,613,344 in Permanent Fund receipts in FY 2007.
• The Department of Corrections received a total of $3,345,657 in expendable receipts and $2,697,569 in Permanent Fund receipts in FY 2007.

Beneficiary
Grant
School for Deaf & Blind........................................ School for Deaf & Blind
Legislative, Executive & Judicial Buildings.......... Legislature, Executive & Judicial Branch
State Hospital......................................................... State Hospital
Miners’ Hospital (2 Grants)................................... Pioneers’ Home
State Charitable, Penal & Reformatory ................. 50% Pioneers’ Home
25% Dept. of Juvenile Corrections
25% Dept. of Corrections
Penitentiary............................................................ Dept. of Corrections

Arizona State School for the Deaf and
the Blind - Tucson Campus

Arizona Pioneers’ Home
Prescott, Arizona

29

Fund and Beneficiary Summary
Other Grants

SCHOOL FOR THE DEAF & BLIND

LEGISLATIVE, EXECUTIVE, & JUDICIAL BUILDINGS

STATE HOSPITAL

ACRES AND INCOME - FY 2007

ACRES AND INCOME - FY 2007

ACRES AND INCOME - FY 2007

SURFACE LEASES

ACRES

INCOME

2,638

$67,348.16

Agriculture

Agriculture
Commercial
Grazing

SURFACE LEASES

1,453

$21,055.57

Commercial

72,540

$25,500.36

Grazing

802

$26,006.95

Rights-of-Way
Use Permits

INCOME

2,180

$31,623.46

Agriculture

SURFACE LEASES

5

$31,300.00

Commercial

56,406

$20,736.73

Grazing

Rights-of-Way

1,392

$16,011.80

Rights-of-Way

5,062

$2,326.51

92

$0.00

5,956

$4,525.52

Use Permits

Institutional Taking

1

$1,163.02

U.S. Government

U.S. Government

32

$0.00

83,421

$145,599.58

TOTAL SURFACE

ACRES

TOTAL SURFACE

65,137

$101,998.50

ACRES

INCOME

4,251

$104,686.92

269

$199,683.01

58,121

$20,607.29

869

$3,775.58

Use Permits

4,961

$9,515.43

Institutional Taking

80

$4,673.88

U.S. Government

108

$0.00

68,660

$342,942.11

Mineral

60

$600.00

Prospecting Permit

53

$106.77

Oil & Gas

755

$3,257.64

U.S. Government

108

$0.00

TOTAL SUBSURFACE

976

$3,964.41

TOTAL SURFACE
SUBSURFACE LEASES
Prospecting Permit

SUBSURFACE LEASES
Prospecting Permit

2,692

$3,462.72

Oil & Gas

6,102

$13,616.03

U.S. Government
TOTAL SUBSURFACE
Penalty & Interest

32

$0.00

8,826

$17,078.75
$950.90

Treasurer’s Formula Distribution

$87,629.00

GRAND TOTAL EXPENDABLE

$251,258.23

Permanent Fund Receipts

$151,608.07

Permanent Fund Balance

$3,072,000.00

U.S. Government
TOTAL SUBSURFACE
Penalty & Interest

863

$686.53

92

0

955

$686.53
$1,726.32

Treasurer's Formula Distribution

$122,537.00

GRAND TOTAL EXPENDABLE

$226,948.35

SUBSURFACE LEASES

Penalty & Interest
Permanent Fund Receipts

$260,097.99

Permanent Fund Balance

$5,412,000.00

30

$9,884.09

Treasurer's Formula Distribution

$124,204.00

GRAND TOTAL EXPENDABLE

$480,994.61

Permanent Fund Receipts

$16,974.16

Permanent Fund Balance

$3,064,000.00

Fund and Beneficiary Summary
Other Grants

MINERS' HOSPITAL*

STATE CHARITABLE, PENAL, & REFORMATORY

PENITENTIARY

ACRES AND INCOME - FY 2007

ACRES AND INCOME - FY 2007

ACRES AND INCOME - FY 2007

SURFACE LEASES

ACRES

INCOME

ACRES

INCOME

ACRES

INCOME

Agriculture

13,031

$394,843.37

Agriculture

3,997

$102,680.61

Agriculture

4,673

$226,479.96

Commercial

590

$950,935.95

Commercial

3,401

$849,014.73

Commercial

478

$617,348.10

65,932

$21,688.08

Grazing

SURFACE LEASES

SURFACE LEASES

73,835

$22,386.03

Grazing

62,369

$24,040.61

Grazing

Rights-of-Way

1,521

$43,772.55

Rights-of-Way

1,801

$82,016.15

Rights-of-Way

Use Permits

3,571

$65,070.80

Use Permits

5,467

$98,884.23

Institutional Taking

475

$61,147.39

U.S. Government

117

$0.00

U.S. Government

0

$0.00

TOTAL SURFACE

77,627

$1,217,783.72

Institutional Taking
U.S. Government
Other
TOTAL SURFACE

1

$919.89

168

$0.00

0

$2,100.00

92,717 $1,480,028.59

Other
TOTAL SURFACE

495

$56,408.26

Use Permits

5,783

$56,436.83

Institutional Taking

1,778

$0.00

5

$0.00

79,143

$978,361.23

990

$1,550.52

SUBSURFACE LEASES
SUBSURFACE LEASES
Mineral
Prospecting Permit
Mineral Material

$0.00

6,143

$7,517.19

230

$20,239.91

4,809

$5,765.76

168

$0.00

11,469

$33,522.86

Oil & Gas
U.S. Government
TOTAL SUBSURFACE

119

Penalty & Interest
Treasurer’s Formula Distribution
GRAND TOTAL EXPENDABLE

$2,825.13
$158,276.00

Mineral

160

$120.00

Mineral Material

186

$107,484.34

1,268

$5,237.05

Oil & Gas
U.S. Government
TOTAL SUBSURFACE

117

$0.00

1,732

$112,841.39

$554,014.65

Permanent Fund Balance

$6,658,000.00

TOTAL SUBSURFACE
Penalty & Interest
Treasurer’s Formula Distribution

Penalty & Interest

$35,589.35

GRAND TOTAL EXPENDABLE

5

$0.00

995

$1,550.52
$3,505.31
$140,515.00
$1,123,932.06

Sales Interest

$6,117,500.08

Treasurer’s Formula Distribution

$1,403,184.00

Permanent Fund Receipts

$84,224.23

GRAND TOTAL EXPENDABLE

$8,886,898.54

Permanent Fund Balance

$5,458,000.00

$1,674,652.58

Permanent Fund Receipts

Prospecting Permit
U.S. Government

Permanent Fund Receipts

$10,453,377.37

Permanent Fund Balance

$64,184,000.00

*Miners' Hospital and Miners' 1929 combined

31

Financial Schedules

Receipts by Category .................................................................33
Rental Acreage and Receipts.....................................................34
Treasurer’s Formula Distribution ................................................35
State Trust Land Acreage by Beneficiary...................................36
Auctions of Leases with and without Preferred Right.................37

32

Financial Schedules

RECEIPTS BY CATEGORY - FY 2007

Common Schools (K - 12)
Normal Schools
A&M Colleges
Military Institutes
School of Mines
University Land Code
U of A (Act of 2/18/1881)
School for the Deaf & Blind
Leg., Exec & Judicial
State Hospital
Miners' Hospital
St Char., Pen. & Ref
Penitentiaries
School Leases
Commercial Prepayment
Total Schools & Institutions

ROYALTY

SALES
PRINCIPAL

8,725,632.62
52,179.52
10,721.25
0.00
23,886.14
7,654.74
207,087.76
6,695.57
1,317.99
16,974.16
82,832.26
553,498.79
71,047.23
0.00
0.00
9,759,528.03

173,959,964.04
96.49
0.00
0.00
4,873.73
49,205.37
205,000.00
144,912.50
258,780.00
0.00
471,182.39
9,899,878.58
13,177.00
0.00
0.00
185,007,070.10

0.00
0.00
0.00
0.00
0.00
0.00
0.00

0.00
0.00
0.00
0.00
0.00
0.00
0.00

9,759,528.03

185,007,070.10

SALES
INTEREST

LEASE
RENTAL

PENALTY &
INTEREST

OTHER
RECEIPTS

TOTAL

52,183,696.48 54,435,421.73
0.00
166,949.70
0.00
102,018.01
0.00
92,208.62
0.00
152,564.97
0.00
450,570.39
0.00
441,746.78
0.00
162,678.33
0.00
102,685.03
0.00
346,906.52
0.00 1,513,551.45
6,117,500.08 1,330,625.11
0.00
979,911.75
0.00 3,094,125.00
0.00
0.00
58,301,196.56 63,371,963.39

263,776.73
1,591.61
520.25
2,276.64
1,358.27
1,609.00
12,851.13
950.90
1,726.32
9,884.09
2,825.13
35,589.35
3,505.31
0.00
0.00
338,464.73

0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
5,611,921.02
5,611,921.02

289,568,491.60
220,817.32
113,259.51
94,485.26
182,683.11
509,039.50
866,685.67
315,237.30
364,509.34
373,764.77
2,070,391.23
17,937,091.91
1,067,641.29
3,094,125.00
5,611,921.02
322,390,143.83

29,880.00
4,789.61
101,973.17
9,368.07
0.00
146,010.85
0.00

93.15
74.24
361.80
0.00
0.00
529.19
0.00

0.00
0.00
0.00
0.00
9,714,161.16
9,714,161.16
0.00

29,973.15
4,863.85
102,334.97
9,368.07
9,714,161.16
9,860,701.20
0.00

58,301,196.56 63,517,974.24

338,993.92

15,326,082.18

332,250,845.03

GENERAL FUND
F.E.M.A. Lands
Farm Loan Lands
Navigable Streambeds
Lands Held in Trust
Fees: Lease, Sale & Misc
Total General Fund
Riparian Trust Fund
TOTAL RECEIPTS

0.00
0.00
0.00
0.00
0.00
0.00
0.00

*Miners' Hospital and Miners' 1929 combined

33

Financial Schedules

RENTAL ACREAGE AND RECEIPTS
FY 2007
BY TYPE OF LEASE

SURFACE LEASES
Agriculture
Commercial
School Leases
Grazing
Homesite
Rights-of-Way
Use Permits
Institutional Taking
U.S. Government
Other
TOTAL SURFACE
SUBSURFACE LEASES
Mineral
Prospecting Permit
Mineral Material
Oil and Gas
U.S. Government
TOTAL SUBSURFACE
NON-LEASE REVENUES
Penalty & Interest
Sales Interest
Royalty
Land Sales Principal
Rights-of-Way Sales Principal
Settlements
Commercial Prepayments
Fees
TOTAL NON-LEASE REVENUES

ACRES
172,311
92,433
*
8,360,471
22
119,787
223,753
12,892
18,265
0
8,999,934

RECEIPTS
4,341,570.33
24,618,076.32
3,094,125.00
2,531,825.45
14,562.00
20,743,961.82
2,095,530.97
258,821.91
284,168.00
4,294,545.97
$62,277,187.77

12,605
185,021
1,827
482,937
18,265
700,655

36,977.33
290,744.15
303,712.35
609,352.64
0.00
$1,240,786.47

338,993.92
58,301,196.56
9,759,528.03
160,484,765.56
24,345,307.54
176,997.00
5,611,921.02
9,714,161.16
268,732,870.79

GRAND TOTAL

$332,250,845.03

*The acres for School Leases are included in the total for Commercial acres.

34

Financial Schedules

TREASURER'S FORMULA DISTRIBUTION*
YEAR ENDING JUNE 30
FY 2006
FY 2007
Common Schools

INCREASE
(DECREASE)

5/12/1912
TO DATE

31,437,534

32,351,317

913,783

1,022,765,475

41,740

46,082

4,342

2,300,697

180,233

201,319

21,086

7,779,967

9,173

9,949

776

1,169,470

School of Mines Grant

104,439

133,902

29,463

6,408,434

University Land Code

213,276

226,823

13,547

10,161,389

University of Arizona (Act 0f 2/18/1881)

551,950

566,953

15,003

20,743,221

77,139

87,629

10,490

4,130,403

Legislative,Executive & Judicial Buildings

104,788

122,537

17,749

6,696,979

State Hospital Grant

147,619

124,204

(23,415)

3,147,134

Miners' Hospital Grant**

165,791

158,276

(7,515)

6,238,067

1,182,283

1,403,184

220,901

20,813,971

118,596

140,515

21,919

3,920,443

34,334,561

35,572,690

1,238,129

1,116,275,650

Normal Schools Grant
Agricultural & Mechanical Colleges
Military Institutes Grant

School for the Deaf & Blind

State Charitable,Penal, and Reformatory
Penitentiary Grant
TOTAL
*Information from the State Treasurer
**Miners' Hospital & Miners' Hospital 1929 combined

35

Financial Schedules
STATE TRUST LAND ACREAGE BY BENEFICIARY
TRUST ACRES
BENEFICIARY

FY 1978

FY 2007

8,342,469

8,101,127

Normal Schools Grant

172,405

174,798

Agricultural & Mechanical Colleges

134,469

124,944

Military Institutes Grant

82,945

80,168

School of Mines Grant

132,882

123,254

University Land Code

166,354

137,908

University of Arizona (Act 0f 2-18-1881)

62,216

54,157

School for the Deaf & Blind

84,209

82,560

Legislative, Executive & Judicial Buildings

66,660

64,257

State Hospital Grant

79,198

71,248

Miners' Hospital

48,648

47,745

Miners' Hospital (1929)

53,311

47,686

State Charitable, Penal, and Reformatory

80,010

76,818

Penitentiary Grant

80,830

76,111

9,586,606

9,262,781

Common Schools (K - 12)*

TOTAL
*Includes County Bonds

36

Financial Schedules

AUCTIONS OF LEASES WITH AND WITHOUT THE
PREFERRED RIGHT TO MATCH THE HIGHEST BID
(REPORT REQUIRED BY A.R.S.§37-132)

AUCTION

LEASE #

DATE

PARCEL

PREFERRED

NO. OF

PREFERENCE

MINIMUM

BONUS

SUM BASE

LOCATION

RIGHT

BIDDERS

EXERCISED

BID

BID

RENTAL

NA

$216,921,636

REVENUE
10/12/2006 03-108115

7th Ave and Rose Garden Lane, Phoenix

No

12/14/2006 03-110288

10 miles w est of Gila Bend

No

1/23/2007

03-109627

39th Ave and Happy Valley Rd., Phoenix

No

5/24/2007

03-108992

NEC of East Bell Road and Loop 101, Scottsdale

No

6/19/2007

03-110179

Happy Valley Road and Lake Pleasant Parkw ay, Peoria

No

*Minimum bid at auction based on appraised land value rather than 1st year rent.

37

1

NA

$21,200,000

1

NA

$44,835,000

2

NA

$5,627,000

1

NA

$68,500,000

2

NA

$3,400,000

NA
$2,773,000
NA
$2,300,000

$54,776,432
$52,777,158
$875,239,955
$55,133,783