ARIZONA STATE LAND DEPARTMENT ANNUAL REPORT 2010 - 2011 Janice K. Brewer Governor Maria Baier State Land Commissioner “S er v in g Ar izo n a ’s S ch o o ls a n d Pu b l ic In s ti tu tio n s S in ce 1 9 1 5 ” CONTENTS Message From the Commissioner ....................................................................................... 1 Historical Overview ............................................................................................................... 3 Organizational Chart ............................................................................................................. 5 NRCD Environmental Education .......................................................................................... 6 Major Transactions and Leases ........................................................................................... 7 Cooperating to Secure Arizona’s Borders ........................................................................... 8 Natural Resources ................................................................................................................ 9 Major Lease Updates: ASARCO & Freeport McMoRan .................................................. 9 Geothermal Developments: Ridgeway & GreenFire Energy ............................................ 9 Comments on Federal Proposals .................................................................................. 10 Crossroads East: City of Scottsdale Rezoning .................................................................. 11 Superstition Vistas .............................................................................................................. 12 ADOT I-10 & State Route 303 Interchange Project ............................................................ 13 Statewide Broadband Project: Data Collection and Mapping ........................................... 14 Renewable Energy Developments ..................................................................................... 15 The Arizona Solar Energy Viewer ................................................................................... 15 Preparing for Renewable Energy Development ............................................................ 16 Wind Developments: Dry Lake Winds Project ............................................................... 16 Wind Developments: Perrin Ranch ................................................................................ 17 Preserve Land ..................................................................................................................... 18 Five Year Plan ..................................................................................................................... 19 State Trust Land Uses ........................................................................................................ 20 Land Ownership and Management .................................................................................... 21 Board of Appeals ................................................................................................................ 23 Fiscal Year 2011 ................................................................................................................. 24 Permanent Fund ................................................................................................................. 26 Expendable Revenue .......................................................................................................... 27 Fund and Beneficiary Summary ......................................................................................... 28 Common Schools K - 12 ............................................................................................... 29 University Grants ........................................................................................................... 31 Other Grants .................................................................................................................. 35 Financial Schedules ............................................................................................................ 38 Receipts by Category .................................................................................................... 39 Rental Acreage and Receipts ........................................................................................ 40 Treasurer’s Formula Distribution ................................................................................... 41 State Trust Land Acreage by Beneficiary ...................................................................... 42 Auctions of Leases With and Without Preferred Right .................................................. 43 Janice K. Brewer Governor State of Arizona Please visit our website at www.land.state.az.us Special Thanks: Carolyn Harbison with the Natural Resource Education Center and the ASLD employees who contributed photos to this annual report: Willie Sommers, Chris Lowman, Bill Webster, Bruce Davis, Joe Dixon, Keenan Murray, Max Masel, Rebecca Molina, Ronnie Tsosie, Chuck Vencill, Raymond Moore, Ghaleb Yassine, and Steve Ross MESSAGE FROM THE COMMISSIONER September 1, 2011 The Honorable Janice K. Brewer Governor of Arizona 1700 West Washington Street Phoenix, Arizona 85007 Dear Governor Brewer: It is my privilege to deliver to you the State Land Department’s Annual Report for Fiscal Year 2011 as required by A.R.S. §37-132. The report contains a summary of the Department’s management activities and the revenue the Land Department earned during the fiscal year. Maria Baier Arizona State Land Commissioner It is my primary and continuing goal to increase revenue for the beneficiaries of the State Trust and to protect its long term interest. In this fiscal year, Land Department staff continued their diligent work to support the Trust. Even in these economically challenging times, we were very successful in generating revenue for the beneficiaries. While the Department did not set a lot of new records, it did perform remarkably well in this economy. The Department sold 5,599 carefully selected acres that earned in excess of $85 million in permanent receipts, an increase of approximately $66 million over last year. We also have seen significant revenue from other sources. For example, the royalty receipts from mineral sales continued to improve with $39.8 million in receipts this year, an increase of approximately $13.2 million over last year. In addition, we had noteworthy revenue increases in agriculture, grazing, and commercial leases this year. All in all, the Department brought in over $190 million in revenue in FY2011. The Department continues to carry a large outstanding balance for previous sales that are financed through the Department. The beneficiaries will earn interest on the balance at a rate averaging from 5% to 11% for an average term of seven years. The total outstanding receivable balance from term sales is $535.2 million, which earns interest daily. The revenue earned on this balance will be distributed to our beneficiaries over the next several years. In addition, the payments on the remaining principal will be deposited in the Permanent Fund in future years. During this past year, the Department has worked closely with several of the buyers that financed their land through the Department. Many bought at or near the peak of the market and are unable to make their scheduled payments in the current market at this time. They have not been able to progress as quickly with their development of the land, which has reduced their cash flow. Given the record-high price paid for this land, it is usually in the best interest of the Trust to work with the buyers to extend their payment for this land. In addition, SB1228 was passed last year which allows the 1 A BOUT THE COMMISSIONER Maria Baier was appointed as the Arizona State Land Commissioner in June, 2009. Department to increase the extension time given for long-term commercial lessees to make payments on the balance due for their rentals. It is important to note, that the Department also implemented a vast IT update which included a virtual desktop network for all employees in FY2011. With this update the Department was able to improve its desktop systems as well as implement strategic upgrades to our GIS mapping systems. These improvements have helped the Department become more efficient and responsive to the many requests and inquiries we receive. Finally, the Department’s five-year plan is complete and received unanimous approval from the Urban Land Planning Oversight Committee. Per A.R.S. §37-133.03, the five-year plan represents potential areas of concentration for the Department to consider for land sales and long term leases on behalf of our beneficiaries. The plan streamlines the Department’s disposition efforts by identifying priority parcels for sale or lease. Thank you for the opportunity to serve Arizona and the Trust beneficiaries as the State Land Commissioner. The opportunities that exist for the Land Department over the next year are exciting, and I look forward to working alongside you, your staff, the staff at the Department, and the citizens of Arizona to advance the interest of those we serve. Sincerely, Maria has held several executive positions, including President of MBC, Inc., a sustainability consulting firm specializing in sustainable land use and natural resource management practices; President and CEO of Valley Partnership, a trade organization representing 600 Metro Phoenix businesses, whose primary mission is to ―advocate responsible development;‖ and Director of the Trust for Public Land Arizona Field Office. She also spent 10 years on the Executive Staff of the Office of the Governor, serving two administrations. She served as senior policy advisor in the areas of natural resources, growth and development, environmental quality and criminal justice. Maria also was elected to the Phoenix City Council and served from 2008 - 2009, until her appointment as Commissioner. She is an active member of the Arizona State Bar and volunteers on numerous boards and commissions including the Trust for Public Land Arizona, Foundation for Blind Children, Great Hearts Academies, Valley Partnership, and Central Arizona Partnership. Maria received her Bachelor of Arts Degree from Arizona State University, and her Juris Doctor from the James E. Rogers College of Law at the University of Arizona. Maria Baier Arizona State Land Commissioner 2 H ISTORICAL O VERVIEW LAND GRANT they were charged with assessing, evaluating, and making recommendations about the land granted by Congress to the State for the Common Schools and other institutions. The Commission was to report back to the Legislature with its findings and conclusions by the end of the second Legislative session. 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 Commission concluded that Arizona should not sell its Trust land outright, as other states had done. Instead, it should put the lands to their ―highest and best use.‖ The decision to sell or lease the land should be based upon the potential use of each parcel. The Commission recommended the creation of a permanent State Land Department ―... in order that the multitudinous detail attached to the State’s varied land interests may have constant attention and to prevent irretrievable loss.‖ 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. 1914 photo of Arizona Governor George W.P. Hunt and members of the Arizona State Land Commission: Catherine Grove, George W.P. Hunt, Ethel Shoemaker, and E.L. Trippel. (Photo courtesy of Arizona State Library, Archives and Public Rec- Two men by a Model T Ford in the Pinal Mountains of Gila County, Arizona. (Photo courtesy of Arizona State Library, Archives and Public Records, History and Archives Division, Phoenix, #98-1660) ords, History and Archives Division, Phoenix, #97-6948) CREATION OF THE LAND DEPARTMENT The State Land Department and the system by which Trust lands were to be managed were established in 1915 by the State Land Code. In compliance with the Enabling Act and the State Constitution, the State Land Code gave the Department authority over all Trust lands and the natural products from these Trust lands. On May 20, 1912, an act of the First Legislature created the three-member State Land Commission to serve as the temporary Land Department of the State. The members were Mulford Winsor, Chairman; Cy Byrne, Secretary; and William A. Moody, member. Appointed by Governor George W. P. Hunt, 3 Since the State Land Department’s inception, its mission has been to manage the Land Trust and to maximize its revenues for the beneficiaries. All uses of the land must benefit the Trust, a fact that distinguishes it from the way public land, such as parks or national forests, may be used. While public use of Trust land is not prohibited, it is regulated to ensure protection of the land and compensation to the beneficiaries for its use. TRUST REVENUE Revenues earned from Trust land are classified as either permanent or expendable receipts. Revenues derived from the sale of State Trust land and natural products are referred to as permanent receipts. The receipts are deposited into the permanent funds and invested in stocks, bonds, and interest-bearing securities by the State Treasurer. The Treasurer distributes money from the funds to the beneficiaries according to a constitutional formula. Expendable revenue includes lease revenue from Trust land leases and permits, interest from sales contracts, and the Treasurer’s formula distribution. This revenue is distributed directly to the beneficiaries for their use. State Trust land management priorities continually evolve to remain efficient in all areas of the Trust’s maintenance. One change that dramatically increased the Department’s revenue-generating potential was the passage of the Urban Lands Act in 1981. The Act allows the Department to increase the value of Trust land in urban areas by planning and zoning it in cooperation with the local governments. The Legislature has also expanded the Department’s leasing capabilities, making long-term leases of up to 99 years possible for land that either has been planned under the urban planning process, or is rural commercial land. Bridge on Sawmill Road in the Pinal Mountains of Gila County, Arizona. (Photo courtesy of Arizona State Library, Archives and Public Records, History and Archives Division, Phoenix, #98-1663) BENEFICIARIES There are 13 beneficiaries of State Trust land revenues. The Common Schools is the beneficiary with the largest Trust land acreage, originally receiving about 8.4 million acres of land. Other beneficiaries, which originally received a total of about 2.5 million acres, include the University Land Code; Legislative, Executive, and Judiciary Building Fund; Penitentiary Fund; State Hospital; School for the Deaf and Blind; Normal (Universities) Schools; State Charitable, Penal, and Reformatory Institutions; Agricultural and Mechanical Colleges; School of Mines; Military Institutions; University of Arizona (Act of 2-18-1881); and two grants for the Miners’ Hospital. A 14th beneficiary, County Bonds, was funded by Trust revenues until it was eventually paid. Revenues derived from County Bond lands are now added to the Common Schools’ grant. 4 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 was 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. Original Land Endowment Pattern Land Endowment by Township Township = 36 Sections Each Section = 1 Square Mile O R G A N I Z AT I O N A L C H A R T Commissioner’s Office Conservation Advisory Committee Board of Appeals Urban Land Planning Oversight Committee Administration Division Budget & Procurement Accounting Human Resources Land Information, Title and Transfer Natural Resources Real Estate Sales & Commercial Leasing Information Systems & Resource Analysis Geographic Information Systems Title & Contracts Natural Resource Conservation Administrative Procedures & Information Range Right-of-Way State Cartographer’s Office Cadastral Water Rights & Agriculture Planning & Engineering Information Technology Environmental Resources & Trespass Appraisal Minerals 5 N R C D E N V I R O N M E N TA L E D U C AT I O N study of insects), and various soil and water conservation practices. Another method of education is coordinating class field trips to the NREC facility located on the campus of Arizona Central College. In August of 2001, the NREC and the College entered into a Memorandum of Understanding outlining the duties and responsibilities of each party. The College has since provided the Center with four acres of irrigated land and classroom space. Children are bused from their schools to the Center where they receive both classroom and field instruction and learn the ―Five C’s‖ of Arizona. The Five C’s found on the Great Seal of the State of Arizona represent Copper, Cattle, Citrus, Cotton, and Climate. During the 2010 – 2011 school year, this Natural Resource Education Center presented 50 field days at Central Arizona College, ventured on 10 classroom visits, and participated in three community events. In total, the Center instructed 4,642 children and 441 adults in the wise use and management of Arizona’s renewable natural resources. While on campus, visitors are encouraged to meet with college administrators and learn about opportunities for higher learning in the field of natural resource management. Title 37, Chapter 6, Article 2 of the Arizona Revised Statutes authorizes the State Land Department to establish a Division of Natural Resource Conservation. Since 1942, thirty-two Natural Resource Conservation Districts (NRCD) have been established across Arizona with specific powers and authorities delegated by the State Land Commissioner. One such authority is to organize and sponsor local efforts to inform and educate youth and adults in principles of wise land use and sustained management of Arizona’s renewable natural resources. The daily operations of Natural Resource Conservation Districts and corresponding Environmental Education Centers are overseen administratively by Arizona State Land Department program staff. There are currently 23 Natural Resource Education Centers (NREC) operating today. One of the Education Centers located on the campus of Central Arizona College is sponsored by the West Pinal NRCD, Eloy NRCD, and Florence - Coolidge NRCD. It was organized as a formal 501(c)(3) private non-profit organization; staff includes a full-time Director, a part-time Assistant Director, and a number of volunteers. Although the primary source of funding is the Arizona Environmental Special Plate Fund (ESPF), this NREC has leveraged their base funding to successfully receive grants from the Arizona Department of Health Services, Central Arizona Project, Gila River Indian Community, and the Pinal County Attorney’s office. The Arizona State Land Department is primarily recognized for its mandate to generate revenue for the beneficiaries of the Trust, many of which are educational institutions. The Department is also proud of its efforts to inform and educate the residents of Arizona through the Natural Resource Conservation District Environmental Education Program. This Natural Resource Education Center uses several avenues for program delivery. They provide classroom visits where all types of natural resource issues can be discussed such and agronomy (corn, pumpkins, and vegetable production), animal husbandry (dairy and egg production), entomology (the 6 M AJOR T RANSACTIONS/ L EASES $44,100,000 — The City of Scottsdale purchased 2,000.59 acres on 10/15/2010. The land is part of the McDowell Sonoran Preserve and is located east of Pima Road and north of Dixileta Drive. $25,850,000 — The City of Phoenix purchased 1,139.21 acres on 10/15/2010. The land is part of the Sonoran Preserve and is located south of the Carefree Highway, east of I-17. $29,025,862 — Mineral lease 11-98925 to ASARCO LLC for 574.79 acres. $15,000,000 — DJL Enterprises, LLC purchased 68.87 acres on 1/6/2011 for the Bullhead City waterfront project. $11,875,000 — Coconino County purchased 2,249.04 acres on 11/1/2010 for their Preserve/ Conservation Area. Railroad mine siding at the mine in Morenci, Arizona (Photo courtesy of Arizona State Library, Archives and Public Records, History and Archives Division, Phoenix, #94-2009) $ 8,899,406 — Mineral lease 11-113183 to Freeport Morenci for 331.79 acres. Facts and Figures Did You Know?    The Department processed 1,153 new customer applications, issued 7,454 recreational use permits, and retrieved 7,066 lease and contract files for customers. ASLD Public Records Central Files answered more than 2,219 email and phone customer inquiries. It took 85 years to reach a permanent funds balance of $1 billion in 2001. The current book value is $2.5 billion. Land Auctioned FY 2011 Acres Sold Total Sales Price Acres Leased Minimum Cumulative Lease Revenue Urban 3,341.23 $92,484,686.00 59.78 $1,000,000.00 Rural 2,257.71 $11,886,900.00 0 $0 TOTAL 5,598.94 $104,371,586.00 59.78 $1,000,000.00 7 Did You Know?  By Statute, all major Land Department transactions must be substantiated by an appraisal to help protect the Trust beneficiaries.  The current appraisal staff consists of three appraisers with a combined 60 years of experience.  During the past year, the Appraisal Section either appraised or contracted out for appraisal over 100 assignments totaling $350,000,000 in combined land value. The Morenci Public School in Morenci, Arizona (Photo courtesy of Arizona State Library, Archives and Public Records, History and Archives Division, Phoenix #04-6649) CONTINUED COOPERATION TO SECURE ARIZONA’S BORDERS So they can continue their border security efforts, The Department continues to work closely with the U.S. Border Patrol and the Corps of Engineers to provide them with the instruments necessary for legal access to State Trust land. The Corps of Engineers coordinates the access and fence related projects, and the Border Patrol coordinates projects related to entry locations, check points and the National Guard. There is a coordinated effort to provide access to and installation of telecommunication sites for the purpose of public safety communication facilities. 8 N AT U R A L R E S O U R C E S MAJOR LEASE UPDATES: ASARCO & FREEPORT MCMORAN For the second straight year, the Department received a record income of $41 million in FY2011 from minerals-related activities. As with last year, the majority of this income was from an older Mineral Lease with ASARCO’s Mission Mine in Pima County that generated $29.0 million. This Mineral Lease expired on December 31, 2010, but the renewal process was already underway for several months prior to its expiration and was finalized in May 2011. The Department’s other big Mineral Lease, signed October 23, 2009 with Freeport McMoRan for their Morenci Mine in Greenlee County, generated $8.9 million in royalty income in FY2011. Income from common variety sand, gravel, and other aggregates operations continued their decline from the peak of $6.2 million in FY2006 to $1.1 million in FY2011, continuing to reflect the depressed market for these commodities. However, the Department did hold four Mineral Material auctions during FY2011, and although all were relatively small in area and volume of material to be mined, this bodes well for the future. GEOTHERMAL DEVELOPMENTS: RIDGEWAY & GREENFIRE ENERGY A Unit Agreement between the Department and Ridgeway Arizona Oil Corporation (Ridgeway) for the development of the St. Johns CO 2 and Helium Field in east-central Apache County was finalized and signed in December 2009. Earlier, in August 2009, Ridgeway entered into a joint-venture with GreenFire Energy of Salt Lake City, Utah to develop a geothermal energy project in the St. Johns Field. Rather than using the CO2 for enhanced oil recovery projects as originally planned, Ridgeway and GreenFire Energy will use the gas as the ―fluid‖ for the transfer of heat from the granitic rocks underlying the field to generate up to 800 megawatts (MW) of electricity using a series of 50 MW modular plants (by comparison, the nearby Springerville Generating Station has a total rating of 1,560 MW from its four units). The ASLD would collect royalties on both the CO2 and the geothermal energy produced from the St. Johns Field. GreenFire Energy continued its efforts to develop a geothermal energy project in the St. Johns – Springerville area of Apache County. In September 2010, GreenFire Energy received a $2 million grant from the U.S. Department of Energy and plans to use at least part of that money to drill a geothermal test hole, probably during the second half of FY2012. 9 LEASES AND PERMITS/REVENUE PRODUCTION FY 2011 COMMENTS ON FEDERAL PROPOSALS Recognizing a potential negative fiscal impact of the U.S. Bureau of Land Management’s proposed withdrawal of Federal lands in Northern Arizona on State Trust land, the Department continued to serve as a ―Cooperating Agency.‖ The benefit of participating as a Cooperating Agency (which is a technical term that defines a status) is the ability to participate early in the NEPA process and provide information specific to ASLD’s interests to help inform BLM’s decision making process. BLM’s proposal would withdraw approximately one million acres of public lands for a period of 20 years from location and entry under the General Mining Law of 1872, specifically from uranium mining (the ―Withdrawal‖). The ―Withdrawal‖ area includes approximately 57,617 acres of State Trust lands which, although is technically NOT off limits to uranium mining, would be difficult, if not impossible, to access if the ―Withdrawal‖ is authorized. Over the past year, the Minerals Section read through the approximately one-thousand pages generated by the BLM for the associated Environmental Impact Statement (EIS) several times, providing comments and guidance back to the preparers. Although to date the EIS has not found any concrete evidence for harm to the Colorado River watershed from past or proposed future uranium mining activities, it is widely anticipated within the BLM, as well as by most impartial observers outside of the agency, that the ―Withdrawal‖ will ultimately be approved by the Secretary of the Interior, Ken Salazar. It is expected that the Final EIS will be issued in late October or early November 2011, and that the decision on the ―Withdrawal‖ will be reached before the end of 2011. ASLD will provide comments that are consistent with the Trust’s mission of making thoughtful and productive use of the Trust’s natural resources and to provide for the best interest of its beneficiaries. Facts & Figures Lease Rentals NUMBER ACRES OF LEASES Agriculture Grazing Mineral Material Exploration Permits Mineral Oil & Gas Mineral SLUPs 156,575 8,368,575 1,515 485,773 11,946 330,833 26,783 Number of Registrations and Water Rights Claims Stockpond Registrations Certificated Surface Water Rights Well Registrations Adjudication Statements of Claimant Water Right Registrations Grandfathered Groundwater Rights 354 1,239 15 916 88 204 72 INCOME Agriculture Grazing Mineral Material Exploration Permits Mineral Oil & Gas Mineral SLUPs TOTAL $4,362,612 $2,390,769 $126,805 $1,341,115 $61,013 $457,623 $181,571 $8,921,508 Sale of Products 4,305 121 2,789 7,027 7,403 241 Public Auction Water Sales $366,283 Lease Water Charges $155,441 Mineral Royalties $38,025,560 Natural Products $1,209,114 TOTAL $39,756,398 Trespass Revenues Settlements $26,919 Trespass Revenue $27,748 TOTAL $54,666 GRAND TOTAL $48,732,572 10 CROSSROADS EAST C ITY OF S COTTSDALE R EZONING During FY2011, the Department and the City of Scottsdale initiated a joint effort to revise the zoning within the Crossroads East Planned Community District. Crossroads East is located between Scottsdale and Pima roads and bisected by the Loop 101 Pima Freeway, and is composed of most of the remaining State Trust land within the Core North and Core South State Plats. These are the largest and last remaining contiguous development parcels in the City of Scottsdale and undoubtedly some of the most visible and valuable parcels in the State Trust inventory and the Southwest United States. The purpose of this rezoning is twofold: to add C-3 ―Highway Commercial‖ zoning to the allowable zoning districts within Crossroads East, which will allow auto sales on the site; and, to increase the dwelling unit density allowed under the Crossroads East R-5 ―Multi-Family Residential‖ zoning district to the full 23 units per acre allowed in other R-5 districts in the City of Scottsdale. By making these changes, the Department will increase the marketability of Crossroads East. The ability to locate auto dealerships at Crossroads East will allow the City to retain existing dealerships and attract new ones, and multi-family is currently the most active sector in the residential housing market, with several new projects under consideration in the Scottsdale Airpark area. Together with existing Crossroads East zoning that allows mixed use, neighborhood commercial, office and light industrial land uses, this rezoning effort will enhance the value of Crossroads East and maximize future returns to the Trust. 11 S UPERSTITION V I S TA S Superstition Vistas is 275 square miles of contiguous State land located in Northeast Pinal County. This is an exciting project for the State Land Department because it is the largest Conceptual Plan completed in the history of the Department. Planning ahead for development on this scale will ultimately generate more revenue for the Trust. The Land Department proposed an amendment to the Pinal County Comprehensive Plan for Superstition Vistas in June of 2011. This proposal was submitted after several years of effort on the part of the Department, and many stakeholders including Pinal County, Salt River Project, East Valley Partnership, City of Apache Junction, City of Mesa, Town of Queen Creek, Town of Florence, Catholic Healthcare West, Resolution Copper, and many others. A variety of interests came together to study the area and prepare a vision for its future development. This vision was translated into the Comprehensive Plan Amendment that was submitted to Pinal County. Achieving this amendment is an important step for the Department because planning for infrastructure such as roads, water, and electricity can now be done with a more realistic picture of what will happen in this area in terms of future development. This means that we can plan for infrastructure in advance of development rather than retrofitting important infrastructure after development has occurred. If planning at this scale can be used as a starting point, then the provision of infrastructure can be done much more effectively and efficiently. 12 ADOT I-10 & STATE ROUTE 303 I NTERCHANGE P ROJECT The Loop 303 (Bob Stump Memorial Parkway) is a 39-mile freeway stretching from Interstate 10 (Papago Freeway) in Goodyear to Interstate 17 (Black Canyon Freeway) in Phoenix. Loop 303 is designed to serve as an outer loop that will improve regional transportation in the Far West Valley. Historically operating as a two-lane roadway, the expansion to a four-lane divided highway from north of U.S. 60 to I-17 across numerous Trust land sections was completed in 2010. Construction of a new interchange at Loop 303 and U.S. 60 is currently scheduled to begin in 2015 and completed in 2017. Construction is now focused on the segment from I-10 at Cotton Lane in Goodyear north to the U.S. 60 in Surprise. When completed in Fall 2014, the transportation interchange at Cotton Lane and I-10 will be the largest in the state, encompassing five layers of traffic across three lanes in each direction. Motorists can expect the Loop 303 to widen to a six-lane freeway (three lanes in each direction) extending from I-10 in Goodyear to U.S. 60 in Surprise. To facilitate construction ASLD will issue six rights-of-way for public road alignments, underground utilities and drainage easements adjacent to the Perryville Prison, two temporary construction easements to ADOT, and two rights of way for power lines. Relocation of APS power poles and the Duncan Farms compost operation located at the Northwest corner of McDowell Road and Cotton Lane were necessary to complete the road design and construction. 13 STATEWIDE BROADBAND PROJECT D ATA C O L L E C T I O N AND M APPING The Arizona State Land Department (ASLD), through its State Cartographer’s Office and the Arizona Land Resource Information System (ALRIS) program, is participating in a large, statewide Broadband Internet Data Collection and Mapping Project. The project, called the Arizona Broadband Mapping and Planning Project, is a cooperative project between ASLD and the Arizona Strategic Enterprise Technology (ASET) Office. To implement the project, Arizona has received a set of American Recovery and Reinvestment Act (ARRA) grants from the U.S. Department of Commerce's National Telecommunications and Information Administration (NTIA). The purpose of the broadband mapping project is to collect and verify the availability, speed and location of broadband services across Arizona. This information will be publicly available and provided via an interactive, web-based map. The data and map will be updated on a semi-annual basis. The map will provide significantly increased access to information on the status of broadband services in Arizona to the public, local governments, and organizations involved with expansion and adoption of broadband services. ASLD staff are working directly with ASET staff and a team of private sector contractors on the project. While the bulk of the grant’s funding is supporting the massive amount of work being done by the private sector contractors to collect, process and verify the data, some of the ARRA grant is helping to provide ASLD funds for staff time for its contributions to the project. Agency staff are developing the internet mapping application and a GIS database of locations of schools, libraries, hospitals, government office buildings and other facilities which will be included in the map. One of the most beneficial aspects of the project will be the development of an addressed street segment GIS database constructed by aggregating data sets from local governments. The project will be working with the ADOA 9-1-1 Office, county governments, and ADOT to help improve the quality of the GIS-based street network for Arizona. 14 R ENEWABLE E NERGY D EVELOPMENTS THE ARIZONA SOLAR ENERGY VIEWER Arizona has some of the best potential for development of solar energy resources in the nation. The rapid expansion of Arizona’s renewable energy industry will help create new jobs, sustain domestic energy supplies, and develop potential export supplies for the 21st century. With over nine million acres of State Trust land, the Arizona State Land Department is in a unique position to assist in the development of renewable energy in Arizona. sions of the Solar Energy Map Viewer: a public viewer and an internal GIS website that will provide additional information to partner state agencies. The main difference stems from the sharing capabilities. While the public will be able to use the viewer to locate and review potential sites, internal agencies will be able to download and share data within the viewer. To emphasize the importance of coordination in the development of Arizona’s renewable energy resources, Governor Jan Brewer issued Executive Order 2010-02. This order directed the Land Department, to convene with Federal and State agencies in order to frame the issues and barriers related to the development of Arizona’s renewable energy generation capacity. The Land Department, through an agreement with the Arizona Energy Office, and in cooperation with Arizona State University, the Arizona Department of Environmental Quality, the Arizona Department of Water Resources, the Arizona Game and Fish Department, the Arizona Corporation Commission and the Bureau of Land Management, is conducting the Arizona Renewable Energy Mapping Project. To facilitate the rapid implementation of this project, Arizona received an American Recovery and Reinvestment Act (ARRA) grant from the U.S. Department of Energy. The Arizona Renewable Energy Mapping Project is a collaborative project to acquire geospatial data from cooperating agencies that can be used to assess the development potential of State Trust land for renewable energy. The primary focus is on developing a common database of information that can be used by all State agencies. While each agency may have different business requirements, the data would be consistent for all to use. This geographic information database was then used to create a renewable energy mapping system to help better understand the potential to develop Renewable Energy resources on State Trust lands in a coordinated manner. An Arizona Solar Energy Viewer is a tool the public and renewable energy industry developers can use to evaluate State Trust lands for solar energy development. It achieves this by displaying solar energy development factors for State Trust lands throughout Arizona. The system also displays sites on State Trust lands that are currently under consideration for development and identifies sites where there have been applications submitted and the land is under review for possible sale or lease. The project focuses on lands that are available for industrial scale solar energy generation. There will be two ver- 15 PREPARING FOR RENEWABLE ENERGY SITE DEVELOPMENT The Arizona State Land Department (ASLD) has been evaluating State Trust land for development suitability and has worked toward preparation of parcels for the adoption of emerging renewable energy technologies and production. There are several parameters a Trust land parcel must meet in order to be considered suitable for solar energy development. In addition to physical land requirements, the parcel must meet various jurisdictional parameters and have an available transmission interconnection within a reasonable distance. increased efficiency of doing these studies advances the process of facilitating solar energy development. The Department has several sites where due diligence has been completed by third party consultants in preparation for development. Due diligence includes Class III Archaeology Studies, Phase I Environmental Reports, ALTA Surveys and where applicable, Jurisdictional Waters of the U.S. Studies. With help from the ARRA Grant, the Department is very active in promoting the development of renewable energy projects and assisting the industry with reliable and pertinent information. Among the least conspicuous and most time consuming aspects of preparing for development is cultural resource discovery on the subject property. In some cases, the presence of cultural resources can render a property undevelopable. Recognizing this possibility, the Department has used a portion of the ARRA Grant to conduct archaeological surveys and ascertain the existence of cultural resources, further defining ideal sites for renewable energy development. Approximately 15,300 acres of State Trust land have been surveyed which has identified more sites with greater potential and significantly reduced due diligence efforts. The Department has also conducted several very specific transmission studies to complement the archaeological work in major areas of interest for renewable energy. The information gathered is very valuable toward evaluating a site’s potential for successful development and the resulting SOLAR ENERGY: COOPERATION OFF STATE TRUST LAND The Department also works closely with renewable energy companies developing projects off Trust land. Sempra Energy, California’s third largest utility, has connected an initial 42 Megawatts (MW) of power from its Mesquite Solar I photovoltaic project in Arlington, Arizona to the Hassayampa switchyard via a 230 kV transmission line crossing Trust land. Diligence by Department staff enabled this project to meet a December 2010 financing deadline. At full build-out, this privately owned facility is projected to produce 600 MW of electric power from 800,000 solar panels covering 900 acres, enough to power 50,000 homes. 16 WIND DEVELOPMENTS: PERRIN RANCH The Perrin Ranch Wind, LLC project (2011) is the newest edition to the Department’s wind energy portfolio. This 99 Megawatt (MW) installation lies north of Williams and west of SR 64 and the Grand Canyon Railway in Coconino County. The project boundary encompasses 73 ―checkerboard‖ sections (square miles) 34 of which are Trust land; of the 64 turbines in the project, 29 are located on Trust land. Through the 50-year term of this right-of-way lease, beneficiaries will collect approximately $11 million in revenue in addition to rent normally earned through grazing activities. The private lands associated with this project are owned by the Perrin Ranch, LLC, a fifth generation Arizona family ranching company and ASLD grazing lessee. Other than during actual project construction, an agreement between the Department, Perrin Ranch, LLC, Perrin Ranch Wind, LLC, and the Arizona Game and Fish Commission, hunting privileges remain unchanged. As with all wind energy projects, the right-of-way instrument contains provisions for rehabilitation of Trust land upon expiration of the right-of-way. WIND DEVELOPMENTS: DRY LAKE WIND PROJECTS The Dry Lake Wind I (2008) and Dry Lake Wind II (2010) wind energy projects, located north of Snowflake in Navajo County, are on-line and generating revenue for the beneficiaries far in excess of historical revenue from grazing activities. However, cattle grazing and wind energy development are complementary uses of Trust land. Wind energy development only affects approximately five percent of surface acres, thereby enabling our valued grazing lessees to continue their stewardship of the land. 17 P RESERVE L AND This year the Department brought to auction three parcels that had been classified as suitable for conservation under the Arizona Preserve Initiative. In October 2010, The City of Phoenix purchased a 1,139.21-acre parcel for $25.85 million. This purchase represents another step toward completion of the Sonoran Preserve. To date, Phoenix has purchased a total of 6,000 acres of the 20,000 acres approved by the City Council in 1998. Also in October 2010, the City of Scottsdale successfully bid $44.1 million and added an additional 2,000.59 acres to the McDowell Sonoran Preserve. Scottsdale has already acquired or protected more than 18,000 acres for the preserve and has a long-range goal to expand the preserve to about 36,000 acres, nearly a third of the city’s land area. Scottsdale is pursuing approximately 4,400 acres of State Trust land in the next fiscal year in addition to another purchase the following year. Finally, in November 2010 Coconino County successfully purchased 2,249 acres of State Trust land in the Roger’s Lake area for $11.875 million. Roger’s Lake is about ten miles southwest of the City of Flagstaff and had been reclassified as suitable for conservation purposes last fiscal year. 18 S TAT E T R U S T L A N D U S E S  10,313 leases and other contracts contain 9,409,449.77 surface acres.  1,223 leases and other contracts contain 830,066.71 subsurface acres. STATE TRUST LAND USES NO. OF % OF TOTAL % OF ACREAGE LEASES LEASES ACREAGE Rights Of Way 7,532 73.03% 153,885.35 1.64% Grazing 1,239 12.01% 8,368,575.48 88.94% Commercial 325 3.15% 79,738.68 0.85% Commercial School Leases 21 0.20% 1,142.93 0.01% Agricultural 354 3.43% 156,574.84 1.66% Use Permits 665 6.45% 618,343.88 6.57% U.S. Government 158 1.53% 18,291.41 0.19% Homesite 1 0.01% 5.63 0.00% Institutional 10 0.10% 12,891.56 0.14% Recreational 8 0.08% 0.01 0.00% SUBTOTAL (Leases) 10,313 100.00% 9,409,449.77 100.00% SURFACE SUBSURFACE Mineral Mineral Exploration Mineral Materials Oil & Gas SUBTOTAL (Leases) TOTAL LEASES 19 NO. OF % OF TOTAL % OF ACREAGE LEASES LEASES ACREAGE 88 7.20% 11,946.44 1.44% 916 74.90% 485,772.74 58.52% 15 1.23% 1,514.85 0.18% 204 16.68% 330,832.68 39.86% 1,223 100.00% 830,066.71 100.00% 10,325 10,239,516.48 STATE TRUST LAND USES FIVE YEAR PLAN This year, the Department presented its updated Five Year Plan (FYP) to the Urban Land Planning Oversight Committee (ULPOC), prepared under ARS § 37-331.03. The FYP is a GIS-based database containing over 300 parcels, as well as information about these parcels considered for disposition in the near-term, mid-term, and long-term. The FYP aids in identifying potential disposition opportunities by narrowing down the parcel candidates and offering additional information about those parcels selected for disposition. ULPOC unanimously recommended the updated FYP for approval by the Arizona State Land Commissioner. The FYP was signed by Commissioner Baier on May 6, 2011. Photograph of Cy Byrne, William A. Moody, and Swift riding horses in Graham County during the Arizona State Land Survey of 1912. (Photo courtesy of Arizona State Library, Archives and Public Records, History and Archives Division, Phoenix, #94-1471) 20 L AND OWNERSHIP AND MANAGEMENT 21 L AND O WNERSHIP IN A RIZONA 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 into four basic categories. STATE TRUST LAND WITHIN EACH COUNTY COUNTY 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. Apache 652,660 Cochise 1,370,681 Coconino 1,122,900 Gila S TAT E T R U S T L A N D W I T H I N E A C H C O U N T Y 31,231 Graham 496,321 Greenlee 172,104 La Paz 254,411 Maricopa 636,994 Mohave 565,237 Navajo 370,155 Pima 860,483 Pinal 1,204,528 Santa Cruz Yavapai 61,154 1,264,280 Yuma 186,832 Other 2,523 TOTAL 22 ACRES 9,252,495 BOARD OF A PPEALS CURRENT B OARD MEMBERS Arizona Revised Statute §37-132(A)(7) requires all land sales and commercial leases be approved by the Board of Appeals, which also serves as an Administrative Review Board. An appeal from a final decision of the State Land Commissioner relating to appraisals and classifications may be taken to the Board of Appeals by any person adversely affected by the decision. Kathleen M. Holmes, Chair Scottsdale Member-at-Large. The State Land Department Board of Appeals consists of five board members (pictured to the left) selected by the Governor and confirmed by the Senate for six-year terms. Three members represent the 15 counties in the State, which is divided into three districts. Two members hold positions atlarge. Jolene U. Dance, Vice-Chair Phoenix Member-at-Large. Jeffrey Covill Phoenix Represents the Second District consisting of Maricopa, Pinal, Gila, Yuma and La Paz counties. The Board currently meets every other month (vs. monthly) to ease budget concerns. This schedule still allows the Board to address appeals of Commissioner decisions related to reclassification and appraisals, as directed by statute. All meetings were held in Phoenix this fiscal year. Sanders K. Solot Tucson During this fiscal year, the Board approved 10 new commercial leases, 25 renewal leases, 72 rights-of-way sale appraisals, and 10 land sale appraisals. Represents the First District, consisting of Pima, Santa Cruz, Cochise, Graham and Greenlee counties. Two new appeals were filed with the Board. One appeal modified the Commissioner’s decision. One appeal was withdrawn and dismissed by the Board. At the close of FY 2011, two appeals were still pending. Norman R. Brown St. Johns The Commissioner and the staff of the Arizona State Land Department appreciate the considerable time and effort Board of Appeals members invest in serving the Trust and the citizens of Arizona. Represents the Third District consisting of Mohave, Yavapai, Coconino, Apache and Navajo counties. 23 FISCAL Y EAR 2011 FUNDS FY 2011 TOTAL Expendable $49,023,574.81 Commercial Prepayment $1,054,391.83 School Leases $1,558,877.73 General $2,800,745.85 Trust Land Management Fund $14,162,981.62 Permanent $121,707,862.40 TOTAL LAND DEPARTMENT $190,308,434.24 Treasurer's Distribution GRAND TOTAL - FY 2011 $17,478,141 $207,786,575.24 24 FISCAL Y EAR 2011 BENEFICIARIES Common Schools (K—12)‡ REVENUES BY BENEFICIARY FY 2011 TRUST ACRES STATE LAND EXPENDABLE EARNINGS TREASURER'S FORMULA DISTRIBUTION TOTAL EXPENDABLE RECEIPTS TOTAL PERMANENT RECEIPTS TOTAL RECEIPTS 8,092,703.51 43,749,720.12* 16,163,946.00 59,913,666.12 109,360,337.70 169,274,003.82 Normal Schools Grant 174,797.56 156,498.83 20,904.00 177,402.83 97,092.08 274,494.91 Agricultural & Mechanical Colleges 124,943.87 124,842.97 56,793.00 181,635.97 1,598.43 183,234.40 Military Institutes Grant 80,168.11 62,632.45 4,161.00 66,793.45 8.10 66,801.55 School of Mines Grant 123,254.09 173,921.12 70,521.00 244,442.12 36,075.46 280,517.58 University Land Code 137,908.88 798,517.57 108,150.00 906,667.57 128,124.89 1,034,792.46 51,885.05 406,642.65 242,481.00 649,123.65 11,222,582.47 11,871,706.12 82,559.65 174,732.51 31,266.00 205,998.51 971.57 206,970.08 8,868,220.72 45,647,508.22 16,698,222.00 62,345,730.22 120,846,790.70 183,192,520.92 Legislative, Executive & Judicial Buildings 64,257.21 170,589.19 53,709.00 224,298.19 2,429.10 226,727.29 State Hospital Grant 71,248.39 348,364.49 27,759.00 376,123.49 51,855.68 427,979.17 Miners' Hospital Grant† 95,429.04 1,444,424.99 75,186.00 1,519,610.99 691,865.24 2,211,476.23 State Charitable, Penal, 77,228.58 1,874,010.04 507,633.00 2,381,643.04 62,858.61 2,444,501.65 Penitentiary Grant 76,110.72 1,097,555.61 115,632.00 1,213,187.61 52,063.05 1,265,250.66 9,252,494.66 50,582,452.54 17,478,141.00 68,060,593.54 121,707,862.37 189,768,455.91 University of Arizona (Act of 2/18/1881) School for the Deaf & Blind SUBTOTAL Education TOTAL * The amount for State Land expendable earnings includes $1,558,877.73 from the school leases in accordance with A.R.S.§ 37-221, D. Miners’ Hospital and Miners’ Hospital 1929 combined ‡ Including County Bonds † 25 P ERMANENT FUND  The Department deposited $121.7 million into the Permanent Funds in FY 2011, increasing the book value to $2,486,381,000. BENEFICIARY SHARE OF PERMANENT FUND June 30, 2011  The balance of Department managed sales contracts is $535.2 million.  The Permanent Funds consist of revenues earned from the sale of State Trust land or assets such as minerals or other natural products. Book Value 2,311,454,000 Market Value 3,050,936,000 Normal Schools 2,408,000 3,371,000 Agricultural & Mechanical Colleges 6,368,000 9,400,000 359,000 525,000 7,673,000 10,611,000 University Land Code 12,542,000 17,484,000 University of Arizona (Act of 2/18/1881) 37,495,000 48,801,000 School for the Deaf & Blind 3,395,000 4,857,000 LegIislative, Executive, and Judicial 5,207,000 7,469,000 State Hospital 3,909,000 5,660,000 Miner's Hospital 11,515,000 14,871,000 State Charitable, Penal, and Reformatory 76,000,000 101,357,000 8,056,000 11,336,000 2,486,381,000 3,286,678,000 Common Schools  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. Military Institutes School of Mines Penitentiaries TOTAL 26 E XPENDABLE 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 Fund. EXPENDABLE REVENUE BY BENEFICIARY FY 2011  Expendable revenues are distributed directly to the beneficiaries.  Expendable revenue totaled $68.1 million in FY 2011. TREASURERS'S FORMULA DISTRIBUTIONS LEASE AND SALES CONRACT INTEREST TOTAL EXPENDABLE REVENUE 16,163,946.00 43,749,720.12 59,913,666.12  Revenue from Trust land leases, permits, and interest earnings from sales financed through the Department totaled $50.0 million. BENEFICIARIES  The Treasurer distributed $17.5 million according to the constitutional formula based on the 5-year average net return and the 60 month average market value. Normal Schools 20,904.00 156,498.83 177,402.83 Agriculture and Mechanical Colleges 56,793.00 124,842.97 181,635.97 Military Institutes 4,161.00 62,632.45 66,793.45 School of Mines 70,521.00 173,921.12 244,442.12 University Land Code 108,150.00 798,517.57 906,667.57 University of Arizona (Act of 2/18/1881) 242,481.00 406,642.65 649,123.65 31,266.00 174,732.51 205,998.51 16,698,222.00 45,647,508.22 62,345,730.22 Legislative, Executive & Judicial Buildings 53,709.00 170,589.19 224,298.19 State Hospital 27,759.00 348,364.49 376,123.49 Miners Hospital 75,186.00 1,444,424.99 1,519,610.99 State Chritable, Penal, & Reformatory 507,633.00 1,874,010.04 2,381,643.04 Penitentiaries 115,632.00 1,097,555.61 1,213,187.61 17,478,141.00 50,582,452.54 68,060,593.54 Common Schools School for the Deaf and Blind Subtotal Education TOTAL 27 F U N D A N D B E N E F I C I A RY S U M M A RY In FY 2011, State Trust receipts totaled $190,308,434. A total of $173,344,707 was earned for the beneficiaries, $2,800,746 was deposited in the General Fund, $1,054,392 was received as commercial prepayments, and $14,162,982 was deposited into the Trust Land Management Fund, which is used to manage the Trust. Of the beneficiary amount, $12,707,862 was deposited into the Permanent Funds. The Permanent Funds are managed by the State Treasurer. The remaining $49,170,112 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 8,092,704 Receipts over $72.3 million 174,798 Normal Schools 124,944 Agricultural & Mechanical Colleges 80,168 Military Institutes 123,254 School of Mines 137,909 University Land Code Classroom Site Fund Board of Regents to Distribute to Universities 51,885 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 95,429 Miners’ Hospital (2 Grants) Pioneers' Home 77,229 State Charitable, Penal, and Reformatory 76,111 Penitentiary 9,252,495 State Aid Formula for K - 12 Common Schools (K - 12) (Includes County Bonds) 50% Pioneers' Home 25% Department of Corrections Department of Corrections TOTAL 28 25% Department of Juvenile Corrections F U N D A N D B E N E F I C I A RY S U M M A RY 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 8.2 million acres remain in the Trust for common schools.  In FY 2011, $109.4 million from sales and royalties was deposited into the Permanent Fund for common schools bringing the total balance to $2,311,454,000.  In FY 2011, $59.9 million was generated in expendable receipts from leases and interest on the outstanding sales balance. The Treasurer did not distribute money to the common schools in FY 2010. According to A.R.S. § 37-521 B, expendable receipts are distributed first to the School Facilities Board for revenue bonds, second to the New School Facilities Fund, if appropriated, third for basic state aid, and fourth, any receipts in excess of $72.3 million are 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. 29 COMMON SCHOOLS ACRES AND INCOME-FY 2011 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education 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 Permanent Fund Receipts Permanent Fund Balance ACRES 113,265 22,186 7,371,180 6 107,466 536,370 0 5,406 17,452 0 8,173,331 INCOME $3,103,630.50 19,221,773.33 2,038,396.88 4,886.11 3,567,359.84 2,710,101.34 0.00 408,611.00 418,240.27 7,154,091.18 38,627,090.45 11,607 441,546 845 292,987 17,452 764,436 59,898.82 1,217,398.18 54,404.80 390,379.02 0.00 1,722,080.82 429,330.77 1,412,340.35 1,558,877.73 16,163,946.00 59,913,666.12 109,360,337.70 2,311,454,000.00 Proposition 301 (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 items such 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 can be 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. COMMON SCHOOL REVENUE (Millions) 2007 2008 2009 2010 2011 182.7 238.5 138.5 91.7 109.4 32.4 69.3 54.3 0 16.2 Rent & Interest 106.9 104.4 74.1 38.1 42.2 Total Expendable 139.2 173.7 128.4 38.1 58.4 Base Year Amount (72.3) (72.3) (72.3) (72.3) (72.3) 67 101.4 56.2 0 0 Fiscal Year Permanent Fund Revenue Treasurer's Distribution Classroom Site Fund 30 F U N D A N D B E N E F I C I A RY S U M M A RY University Grants  Arizona’s three universities (Arizona State University, Northern Arizona University, and the University of Arizona) are the beneficiaries of six Trust grants.  The total expendable revenue distributed to the Board of Regents and then to the universities to fund their operations was $2.2 million in FY 2011. An additional $11.5 million was earned and added to the permanent funds for the six grants, bringing the total Permanent Fund balance to $66.8 million.  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: Board of Regents Distribution of Trust Revenues to the Universities Grant Distribution Agricultural & Mechanical Colleges 1/2 to UA and the other 1/2 split between the three universities based on engineering credit hours Military Institutes Grant Split between the three universities based on credit hours University Land Code Split between the three universities based on credit hours Normal Schools 1/3 to each university UA 1881 Grants UA School of Mines Grant UA TOTAL UNIVERSITY ACRES AND INCOME—FY 2011 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government TOTAL SUBSURFACE Penalty & Interest Sales Interest Treasurer's Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance 31 ACRES 13,561 51,418 597,907 0 10,683 31,501 0 5,151 299 0 710,519 INCOME $329,015.08 $643,723.24 $211,160.49 $0.00 $255,720.34 $90,594.62 $0.00 $780.35 $9,234.47 $1,687.00 $1,541,915.59 0 31,501 200 34,897 299 66,897 $0.00 $70,635.36 $32,160.09 $56,535.04 $0.00 $159,330.49 $21,809.51 $0.00 $503,010.00 $2,226,065.59 $11,485,481.43 $66,845,000.00 University of Arizona The new, LEED platinumcertified Student Recreation Center at the University of Arizona (Photo by Ameresco Southwest and courtesy of the University of Arizona) Arizona State University The ASU Sun Devil mascot with a solar panel. (Photo by Tom Story and courtesy of Arizona State University) Northern Arizona University At NAU, there are 87 different academic programs that let students tailor their educations to any career. (Photo courtesy of Northern Arizona University) 32 F UND AND B E N E F I C I A R Y S U M M A RY University Grants Continued NORMAL SCHOOLS GRANT ACRES AND INCOME—FY 2011 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 165 22,539 146,026 0 1,647 7,133 0 2,721 184 0 INCOME $7,069.84 $22,947.24 $50,470.88 $0.00 $10,236.98 $7,400.94 $0.00 $0.00 $9,234.47 $700.00 TOTAL SURFACE 180,414 $108,060.35 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 0 19,924 120 2,862 184 TOTAL SUBSURFACE 23,090 Penalty & Interest Sales Interest Treasurer's Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance AGRICULTURAL & MECHANICAL COLLEGES ACRES AND INCOME—FY 2011 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 251 10,172 107,163 0 3,848 5,527 0 1,917 86 0 INCOME $2,876.52 $1,938.39 $34,703.60 $0.00 $57,218.68 $16,886.05 $0.00 $0.00 $0.00 $0.00 TOTAL SURFACE 128,964 $113,623.24 MILITARY INSTITUTES ACRES AND INCOME—FY 2011 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 0 1,677 76,749 0 266 3,339 0 0 0 0 INCOME $0 $4,800.00 $31,718.90 $0.00 $2,835.11 $7,014.04 $0.00 $0.00 $0.00 $237.00 TOTAL SURFACE 82,030 $46,605.05 0 640 0 4,323 0 $0.00 $1,280.00 $0.00 $14,121.38 $0.00 4,963 $15,401.38 $0.00 $29,754.52 $10,560.09 $7,025.21 $0.00 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 0 1,789 0 3,040 86 $0.00 $3,458.16 $2,400.00 $3,040.00 $0.00 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government $47,339.82 TOTAL SUBSURFACE 4,915 $8,898.16 TOTAL SUBSURFACE $1,098.66 $0.00 $20,904.00 Penalty & Interest Sales Interest Treasurer's Formula Distribution $177,402.83 $97,092.08 $2,408,000.00 GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance 33 $2,321.57 $0.00 $56,793.00 $181,635.97 $1,598.43 $6,368,000.00 Penalty & Interest Sales Interest Treasurer's Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance $626.02 $0.00 $4,161.00 $66,793.45 $8.10 $359,000.00 SCHOOL OF MINES ACRES AND INCOME—FY 2011 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 2,485 8,483 111,207 0 1,715 7,569 0 0 17 0 INCOME 38,137.67 10,824.49 37,845.32 0.00 34,149.29 8,838.09 0.00 0.00 0.00 0.00 TOTAL SURFACE 131,476 129,794.86 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 0 2,711 0 12,007 17 TOTAL SUBSURFACE 14,734 Penalty & Interest Sales Interest Treasurer's Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance UNIVERSITY LAND CODE ACRES AND INCOME—FY 2011 UNIVERSITY OF ARIZONA—1881 ACRES AND INCOME—FY 2011 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 3,626 8,238 117,855 0 2,400 5,178 0 107 8 0 INCOME 61,653.18 515,625.15 40,075.91 0.00 127,528.61 24,552.48 0.00 780.35 0.00 750.00 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 7,034 308 38,908 0 808 2,755 0 406 4 0 INCOME 219,277.87 87,587.97 16,345.88 0.00 23,751.67 25,903.02 0.00 0.00 0.00 0.00 TOTAL SURFACE 137,412 770,965.68 TOTAL SURFACE 50,223 372,866.41 0 400 80 0 4 0.00 800.00 19,200.00 0.00 0.00 484 20,000.00 0.00 27,106.80 0.00 15,233.29 0.00 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 0 6,038 0 12,665 8 0.00 8,235.88 0.00 17,115.16 0.00 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 42,340.09 TOTAL SUBSURFACE 18,711 25,351.04 TOTAL SUBSURFACE 1,786.17 0.00 70,521.00 Penalty & Interest Sales Interest Treasurer's Formula Distribution 2,200.85 0.00 108,150.00 Penalty & Interest Sales Interest Treasurer's Formula Distribution 13,776.24 0.00 242,481.00 GRAND TOTAL EXPENDABLE 906,667.57 GRAND TOTAL EXPENDABLE 649,123.65 244,442.12 36,075.46 7,673,000.00 Permanent Fund Receipts Permanent Fund Balance 34 128,124.89 12,542,000.00 Permanent Fund Receipts Permanent Fund Balance 11,222,582.47 37,495,000.00 F U N D A N D B E N E F I C I A RY S U M M A RY Other Grants  The remaining six Trust beneficiaries are 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 beneficiaries 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 $2,710,432.51 in expendable receipts in FY 2011.  The Department of Juvenile Corrections received $595,410.76 in expendable receipts in FY 2011.  The Department of Corrections received a total of $1,808,598.37 in expendable receipts in FY 2011. Grant Beneficiary 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 Schools for the Deaf and Blind Henry C. White was the first principal, appointed by Governor George W. P. Hunt, and classes began in October, 1912. Nineteen children with hearing loss were the first students, and classes were held in a converted residence on the campus of the University of Arizona in Tucson. Arizona Department of Juvenile Corrections Black Canyon School (BCS) operates intake and secure programming for youth. BCS (pictured to the right) houses all female youth and is located in Phoenix. (Photo courtesy of the Arizona Department of Juvenile Corrections) (Photo courtesy of the Arizona State Schools for the Deaf and Blind) 35 SCHOOL FOR THE DEAF & BLIND ACRES AND INCOME—FY 2011 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 2,638 1,453 72,540 0 801 10,632 0 1 32 0 INCOME $74,738.30 $24,407.73 $26,242.14 $0.00 $15,070.30 $15,823.62 $0.00 $2,326.04 $0.00 $0.00 TOTAL SURFACE 88,097 $158,608.13 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 0 2,442 0 400 32 TOTAL SUBSURFACE 2,874 Penalty & Interest Sales Interest Treasurer's Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance LEGISLATIVE, EXECUTIVE, & JUDICIAL BUILDINGS ACRES AND INCOME—FY 2011 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 1,179 5 57,427 0 1,390 5,062 0 0 92 0 INCOME $25,942.49 $25,920.00 $18,724.83 $0.00 $76,880.27 $4,778.55 $0.00 $0.00 $0.00 $0.00 TOTAL SURFACE 65,155 $152,246.14 STATE HOSPITAL ACRES AND INCOME—FY 2011 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 4,246 199 57,770 0 877 5,388 0 80 108 0 INCOME $111,444.61 $141,365.05 $20,182.98 $0.00 $8,110.30 $9,783.41 $0.00 $17,622.00 $0.00 $918.00 TOTAL SURFACE 68,669 $309,426.35 60 1,140 77 0 108 $600.00 $11,240.67 $11,000.00 $3,910.97 $0.00 1,386 $26,751.64 $0.00 $11,539.00 $0.00 $3,551.05 $0.00 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 0 1,488 0 1,280 92 $0.00 $15,131.18 $0.00 $1,320.00 $0.00 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government $15,090.05 TOTAL SUBSURFACE 2,860 $16,451.18 TOTAL SUBSURFACE $1,034.33 $0.00 $31,266.00 Penalty & Interest Sales Interest Treasurer's Formula Distribution $1,891.87 $0.00 $53,709.00 Penalty & Interest Sales Interest Treasurer's Formula Distribution $205,998.51 $971.57 $3,395,000.00 GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance 36 $224,298.19 $2,429.10 $5,207,000.00 GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance $12,186.50 $0.00 $27,759.00 $376,123.49 $51,855.68 $3,909,000.00 F UND AND B E N E F I C I A R Y S U M M A RY Other Grants Continued MINERS’ HOSPITAL* ACRES AND INCOME—FY 2011 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 12,856 580 73,515 0 1,586 8,396 0 1 168 0 INCOME $414,200.79 $875,714.03 $25,136.09 $0.00 $38,216.13 $53,154.44 $0.00 $1,839.78 $0.00 $0.00 TOTAL SURFACE 97,102 $1,408,261.26 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 119 6,066 230 0 168 TOTAL SUBSURFACE 6,583 Penalty & Interest Sales Interest Treasurer's Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance STATE CHARITABLE, PENAL, & REFORMATORY ACRES AND INCOME—FY 2011 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 3,997 3,401 62,845 0 1,843 5,802 0 475 117 0 INCOME $116,361.55 $733,115.22 $23,854.43 $0.00 $41,134.08 $826,148.84 $0.00 $69,465.36 $0.00 $0.00 TOTAL SURFACE 78,479 $1,810,079.48 PENITENTIARY ACRES AND INCOME—FY 2011 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 4,724 456 65,932 0 589 15,012 0 1,778 5 0 INCOME $181,876.42 $695,572.99 $24,010.37 $0.00 $67,731.96 $84,456.81 $0.00 $0.00 $0.00 $0.00 TOTAL SURFACE 88,496 $1,053,648.55 0 990 0 0 5 $0.00 $1,979.20 $0.00 $0.00 $0.00 995 $1,979.20 $394.56 $11,991.83 $20,239.91 $200.00 $0.00 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 160 600 138 1,268 117 $120.00 $1,200.00 $0.00 $1,726.80 $0.00 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government $32,826.30 TOTAL SUBSURFACE 2,283 $3,046.80 TOTAL SUBSURFACE $3,337.43 $0.00 $75,186.00 Penalty & Interest Sales Interest Treasurer's Formula Distribution $1,519,610.99 $691,865.24 $11,515,000.00 GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance * Miners’ Hospital and Miners’ 1929 combined 37 $60,883.76 $0.00 $507,633.00 $2,381,643.04 $62,858.61 $76,000,000.00 Penalty & Interest Sales Interest Treasurer's Formula Distribution $41,927.86 $0.00 $115,632.00 GRAND TOTAL EXPENDABLE $1,213,187.61 Permanent Fund Receipts Permanent Fund Balance $52,063.05 $8,056,000.00 Financial Schedules Receipts by Category .............................................................. 39 Rental Acreage and Receipts .................................................. 40 Treasurer’s Formula Distribution .............................................. 41 State Trust Land Acreage by Beneficiary ................................. 42 Auctions of Leases with and without Preferred Right ............... 43 38 F INANCIAL S CHEDULES RECEIPTS BY CATEGORY ROYALTY SALES SALES INTEREST LEASE RENTAL PENALTY & INTEREST OTHER RECEIPTS TOTAL 35,201,401.02 74,158,936.68 1,412,340.35 40,349,171.27 429,330.77 0.00 151,551,180.09 1,439.10 990.00 0.00 168,697.32 1,891.87 0.00 173,018.29 51,855.68 0.00 0.00 336,177.99 12,186.50 0.00 400,220.17 152,405.24 539,460.00 0.00 1,441,087.56 3,337.43 0.00 2,136,290.23 St Char., Pen. & Ref. 48,803.31 14,055.30 0.00 1,813,126.28 60,883.76 0.00 1,936,868.65 Penitentiaries 52,063.05 0.00 0.00 1,055,627.75 41,927.86 0.00 1,149,618.66 Normal Schools 97,092.08 0.00 0.00 155,400.17 1,098.66 0.00 253,590.91 1,598.43 0.00 0.00 122,521.40 2,321.57 0.00 126,441.40 Common Schools (K-12)‡ Leg., Exec. & Judicial State Hospital Miners' Hospital* A&M Colleges Military Institutes 8.10 0.00 0.00 62,006.43 626.02 0.00 62,640.55 School of Mines 36,075.46 0.00 0.00 172,134.95 1,786.17 0.00 209,996.58 University Land Code 31,208.80 96,916.10 0.00 796,316.72 2,200.85 0.00 926,642.47 U of A (Act of 2/18/1881) 98,492.47 11,124,090.00 0.00 392,866.41 13,776.24 0.00 11,629,225.12 School for the Deaf & Blind 971.57 0.00 0.00 173,698.18 1,034.33 0.00 175,704.08 School Leases 0.00 0.00 0.00 1,558,877.73 0.00 0.00 1,558,877.73 Comercial Prepayments 0.00 0.00 0.00 0.00 0.00 1,054,391.83 1,054,391.83 35,773,414.31 85,934,448.08 1,412,340.35 48,597,710.16 572,402.03 1,054,391.83 173,344,706.76 35,000.00 0.00 0.00 32,720.00 0.00 0.00 67,720.00 Farm Loan Lands 2.00 14.37 0.00 3,829.27 42.83 0.00 3,888.47 Navigable Streambeds Non-Navigable Streambeds Lands Held in Trust 0.00 0.00 0.00 60,468.68 120.41 0.00 60,589.09 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8,548.29 0.00 0.00 8,548.29 Fees: Lease, Sale & Misc 0.00 0.00 0.00 0.00 0.00 2,660,000.00 2,660,000.00 TOTAL GENERAL FUND 35,002.00 14.37 0.00 105,566.24 163.24 2,660,000.00 2,800,745.85 3,974,823.75 9,548,272.00 0.00 0.00 0.00 639,885.87 14,162,981.62 39,783,240.06 95,482,734.45 1,412,340.35 48,703,276.40 572,565.27 4,354,277.70 190,308,434.23 TOTAL SCHOOLS & INSTITUTIONS F.E.M.A Lands TRUST LAND MANAGEMENT FUND TOTAL RECEIPTS * Miner's Hospital & Miners Hospital 1929 Combined ‡ Including County Bonds 39 RENTAL ACREAGE AND RECEIPTS BY TYPE OF LEASE FY 2011 SURFACE LEASES Acres Receipts Agriculture Commercial School Leases Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other 156,575 79,739 ** 8,368,575 6 125,366 618,388 0 12,892 18,291 0 4,362,611.95 22,393,874.56 1,558,877.73 2,390,768.65 4,886.11 4,094,112.05 3,826,773.42 0.00 500,644.53 427,474.74 7,156,696.18 TOTAL SURFACE 9,379,832 46,716,719.92 11,946 485,773 1,515 330,833 18,291 61,013.38 1,341,115.42 126,804.80 457,622.88 0.00 848,358 1,986,556.48 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 572,565.27 1,412,340.35 39,756,401.55 93,558,690.21 1,923,964.23 26,918.52 1,054,391.83 3,299,885.87 TOTAL NON-LEASE REVENUES 141,605,157.83 GRAND TOTAL 190,308,434.23 **The acres for School Leases is part of the total for Commercial 40 TREASURER'S FORMULA DISTRIBUTION* Year Ending June 30 Year Ending June 30 FY 2010 FY 2011 Increase (Decrease) May 12, 1912 To Date Common Schools 0 16,163,946 16,163,946 1,162,536,174 Normal Schools Grant 0 20,904 20,904 2,498,799 Agricultural & Mechanical Colleges 0 56,793 56,793 8,501,971 Military Institutes Grant 0 4,161 4,161 1,209,097 School of Mines Grant 0 70,521 70,521 1,002,356 University Land Code 0 108,150 108,150 11,150,180 University of Arizona (Act of 2/18/1881) 0 242,481 242,481 23,037,306 School for the Deaf & Blind 0 31,266 31,266 4,448,226 Legislative, Executive & Judicial Buildings 0 53,709 53,709 7,201,927 State Hospital Grant 0 27,759 27,759 3,504,764 Miners' Hospital Grant† 0 75,186 75,186 6,865,871 State Charitable, Penal, and Reformatory 0 507,633 507,633 26,483,066 Penitentiary Grant 1,799 115,632 113,833 4,523,142 TOTAL 1,799 17,478,141 17,476,342 1,262,962,879 * Information from the State Treasurer † Miner's Hospital & Miners Hospital 1929 Combined 41 STATE TRUST LAND ACREAGE BY BENEFICIARY BENEFICIARY FY 1978 FY 2011 8,342,469 8,092,704 Normal Schools 172,405 174,798 Agricultural & Mechanical Colleges 134,469 124,944 Military Institutes 82,945 80,168 School of Mines 132,882 123,254 University Land Code 166,354 137,909 University of Arizona (Act of 2/18/1881) 62,216 51,885 School for the Deaf & Blind 84,209 82,560 Leg., Exec. & Judicial 66,660 64,257 State Hospital 79,198 71,248 Miners Hospital 48,648 47,743 Miners Hospital (1929) 53,311 47,686 St Char., Pen. & Ref. 80,010 77,229 Penitentiaries 80,830 76,111 9,586,606 9,252,495 Common Schools (K-12)* TOTAL *Includes County Bonds 42 AUCTIONS OF LEASES WITH AND WITHOUT THE PREFERRED RIGHT TO MATCH THE HIGHEST BID (REPORT REQUIRED BY A.R.S.§37-132) Auction Date Lease # Parcel Location 12/16/2010 03-111282 W of Houghton Rd. approx. 3 mi. S of I-10, Pima County Preference Preferred No. of Minumum Exercised Right Bidders Bid* Revenue No 1 No $1,000,000 *Minimum Bid based upon appraised land value rather than 1st year rent 43 Bonus Bid N/A Sum Base Rental $ 11,517,524.61 1616 West Adams ● Phoenix, Arizona 85007 www.land.state.az.us