ARIZONA STATE LAND DEPARTMENT ANNUAL REPORT 2011 - 2012 Janice K. Brewer Governor Maria Baier State Land Commissioner “S e r v i n g A r i z o n a ’ s S c h o o l s a n d P u b l i c I n s t i t u t i o n s S i n c e 1 9 1 5 ” CONTENTS Message From the Commissioner ....................................................................................... 1 Historical Overview ............................................................................................................... 4 Organizational Chart ............................................................................................................. 6 Agency Updates ................................................................................................................... 7 Natural Resources Major Lease Updates: ASARCO & Freeport McMoRan .................................................. 8 Mineral Materials Leases: An Update on STL Aggregates .............................................. 8 Potash Mining .................................................................................................................. 8 Florence Copper Project .................................................................................................. 9 Oil and Gas Leases .......................................................................................................... 9 Agriculture on State Land to Include Algaculture .......................................................... 10 A Change for Water Rights and Permits ........................................................................ 11 Adequate Water for State Trust Lands .......................................................................... 11 NRCD Environmental Education .................................................................................... 12 Real Estate Crossroads East Sale .................................................................................................... 13 ADOT 1-10 & State Route 303: Interchange Project Update ........................................ 14 Picture Canyon API ........................................................................................................ 15 Major Transactions/Leases ............................................................................................ 16 Other Major Land Sales for FY 2012 ............................................................................. 17 Solar Energy Leases ...................................................................................................... 18 State Trust Land Uses ........................................................................................................ 19 Land Ownership and Management .................................................................................... 20 Board of Appeals ................................................................................................................ 22 Fiscal Year 2012 Revenues ................................................................................................ 24 Permanent Fund ................................................................................................................. 25 Expendable Revenue .......................................................................................................... 26 Fund and Beneficiary Summary ......................................................................................... 27 Common Schools K - 12 ............................................................................................... 28 University Grants ........................................................................................................... 30 Other Grants .................................................................................................................. 32 Financial Schedules Receipts by Category .................................................................................................... 38 Rental Acreage and Receipts ........................................................................................ 39 Treasurer’s Formula Distribution ................................................................................... 40 State Trust Land Acreage by Beneficiary ...................................................................... 41 Auctions of Leases With and Without Preferred Right .................................................. 42 Janice K. Brewer Governor State of Arizona Please visit our website at w w w .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, Rebecca Molina, Ronnie Tsosie, Chuck Vencill, Raymond Moore, and Steve Ross 4 MESSAGE FROM THE COMMISSIONER September 4, 2012 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 2012 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. 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. The Department sold 9,600 carefully selected acres for a combined auction price of close to $120 million. The Department earned almost $162 million in permanent receipts, an increase of approximately $77 million over last year. We also have seen significant revenue from other sources. For example, the royalty receipts from mineral sales contributed $24.5 million in proceeds this year. In addition, we had noteworthy revenue in agriculture, grazing, subsurface, and commercial leases this year. All in all, the Department brought in over $213 million in revenue in FY 2012. 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 ranging from 5% to 11% for an average term of seven years. The total outstanding receivable balance from term sales is $503 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. The Land Department completed four auctions for Open Space Preservation during FY 2012. The City of Phoenix was the successful bidder on two parcels of land adjacent to the Sonoran Preserve in the northern sector of the city. The auctions were for 343 and 283 acres, a total of 626 acres; the auctions resulted in approximately $11.8 million dollars for the Trust. The City of Scottsdale was the successful bidder on two parcels of land adjacent to the McDowell Mountain Sonoran Preserve, also in the northern sector of the city. The auctions were for 1,937 and 2,482 acres, for a total of 4,419 acres, and the auctions resulted in approximately $86.0 million dollars for the Trust. 1 Maria Baier Arizona State Land Commissioner A BOUT THE COMMISSIONER Maria Baier was appointed as the Arizona State Land Commissioner in June, 2009. 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 On March 28th 2012, the Arizona State Land Department successfully entered into its first long-term commercial lease for the production of solar energy. The lease is with APS and is located on 398 acres in the Foothills area of Yuma County. On March 29th, we entered into our second solar lease, which is with Arlington Valley Solar Energy II and is located on 150 acres west of Buckeye in Maricopa County. After significant research and discussion, we successfully crafted a marketable lease with terms that are beneficial to the Trust and, because of this, the energy development community is more comfortable and has accepted our auction process, which had before been considered a bar to the use of State Trust land for solar projects. Due to our achievements in this arena, other State Land Departments are asking for guidance from Arizona for their solar energy programs. The APS Solar lease is scheduled to generate a minimum of $10,984,000.00 during its 35-year term and the Arlington Valley Solar Energy II lease is scheduled to generate a minimum of $5,633,000.00 during its 35year term. Following the success of Dry Lake I and II, the Department issued its third right of way for the purpose of utility scale wind energy generation to Perrin Ranch Wind, LLC. This 99MW project encompassing over 60,000 acres of private and Trust land north of Williams began production in January of 2012 and operates in concert with both the underlying grazing lease and hunting agreements between the land owner and the Arizona Game and Fish Department. Time has proven that wind energy generation facilities are of great benefit to the overall mix of land management the Department provides the Trust by significantly increasing income, while minimally impacting the primary use of livestock grazing. The Department continues to work with wind energy developers to encourage further development of our wind resources. Further, FY 2012 saw the completion of the Arizona Renewable Energy Mapping Project. This project was a collaborative project to create a renewable energy mapping system to encourage the development of Arizona’s Renewable Energy resources in a concise and coordinated manner. The Department, through a grant from the Arizona Energy Office, was asked to develop a system which provides information to the public, the renewable energy industry, and public agencies on lands in Arizona, which help users evaluate lands for their general potential for development as renewable energy generation sites. The system also provides information regarding specific areas which are currently under consideration for development. The project is currently focused on lands for use in industrial scale solar energy generation. Finally, three companies continue to explore for potash in the Holbrook Basin. During FY 2012, the three companies drilled a total of 48 holes in the Basin, 20 of which were on State Trust lands. In addition, approximately 65 miles of 2 seismic lines were run, mainly in the southern portion of the basin, to help the companies better define the structure of the basin and the potash deposit. To date, the State Land Department has issued 124 Exploration Permits which are held under four different company names (one of these four has an agreement with one of the active companies to manage their permits). In March 2012, one of the three active companies visited the Department to discuss the process of converting their Exploration Permits into a Mineral Lease, and met with the various State regulatory agencies to initiate the process of permitting a mine. If their current schedule is met, the mine would start construction in 2014 and be in full production by 2016. Depending on the price of potash during the life of the mine, the Department expects to receive between $10 and $25 million in annual mineral royalties from the mining operation. Over the 40 or more years of mining life in the Holbrook Basin, total mineral royalties to the Department could be in the billions of dollars! Thank you for the opportunity to serve Arizona and the Trust beneficiaries as the State Land Commissioner. The opportunities that exist for the 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, 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 3 HISTORICAL OVERVIEW L AND 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 Records, History and Archives Division, Phoenix, #97-6948) 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) CREATION OF THE L AND D EPARTMENT 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, 4 TRUST REVENUE Since the 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. 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. Original Land Endowment Pattern 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. 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 218-1881); 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. 5 Land Endowment by Township Township = 36 Sections Each Section = 1 Square Mile ORGANIZATIONAL CHART Commissioner’s Office Conservation Advisory Committee Board of Appeals Urban Land Planning Oversight Committee Administration Division Land Information, Title and Transfer Natural Resources Real Estate Sales & Commercial Leasing Information Systems & Resource Analysis Geographic Information Systems Budget & Procurement Title & Contracts Natural Resource Conservation Accounting Administrative Procedures & Information Range Right-of-Way State Cartographer’s Office Human Resources Cadastral Water Rights & Agriculture Planning & Engineering Information Technology Environmental Resources & Trespass Appraisal Minerals 6 AGENCY UPDATES Did You Know?  The Department processed 1,162 new customer applications, issued 7,113 recreational use permits, and retrieved 7,368 lease and contract files for customers; of those customers, 3,869 were external and 3,499 were internal.  ASLD Public Records Central Files answered more than 1,872 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 over $2.6 billion. PERSONNEL R EFORM IMPLEMENTATION AT THE ASLD In May 2012, HB2571, state personnel system, was passed by the Arizona Legislature and signed by the Governor. The bill, effective September 29, 2012, implements significant personnel reform for Arizona State government. Some of the key factors of personnel reform involve consolidating 97 agencies, boards, and commissions into one personnel system and transitioning the state work force to a predominately at-will status. Prior to personnel reform implementation, the ASLD has a total of 112 employees agency wide. Of that 112 employees, only 16 are at-will (uncovered). Out of the 96 covered employees, 79 will transition to at-will status and 17 may elect to the transition. CONTINUED COOPERATION TO SECURE A RIZONA ’S BORDERS The Department works diligently with both the Corps of Engineers and the U.S. Border Patrol to provide legal access to State Trust land. Over the past year cooperative efforts involving forward operating bases, surveillance towers and staging areas have allowed the Border Patrol to more effectively secure and defend the border between the State of Arizona and Mexico. It is the Department’s sincere hope that this cooperative effort will improve the safety and welfare of the citizens of Arizona. Arizona State Land in Graham County, Arizona. (Photo courtesy of Arizona State Library, Archives and Public Records, History and Archives Division, Phoenix, #953441) 7 NATURAL RESOURCES M AJOR L EASE UPDATES: ASARCO & F REEPORT MCM OR AN POTASH M INING The Department received total income of $27.3 million in FY 2012 from mining and minerals-related activities, the third best year ever for the Minerals Section. The majority of this income was from a mineral lease for copper with ASARCO’s Mission Mine in Pima County that generated $16.7 million in royalty payments to the Trust. The Department’s other significant copper lease, Freeport McMoRan, signed in October of 2009 for the Morenci Mine in Greenlee County, generated $4.9 million in royalty income in FY 2012. Three companies continue to explore for potash in the Holbrook Basin. During FY 2012, the three companies drilled a total of 48 holes in the Basin, 20 of which were on State Trust lands. In addition, approximately 65 miles of seismic exploration lines were run, mainly in the southern portion of the basin, to help the companies better define the structure of the basin and the potash deposit. To date, the Department has issued 124 Exploration Permits which are held under four different company names. In 2012, one of the three active companies visited the Department to discuss the process of converting their exploration permits into a mineral lease, and met with State regulatory agencies to initiate the process of permitting a mine. If their proposed schedule is met, construction of the mine would start in 2014, with full production achieved in 2016. Depending on the price of potash during the life of any mine or mines operating in the basin, the Department projects to receive between $10 and $25 million in annual mineral royalty payments. M INERAL M ATERIALS L EASES: AN UPDATE ON STL A GGREGATES After a steady decline from a peak of $6.2 million in FY2006 to $1.1 million in FY 2011, income from mineral material leases, i.e., leases for common variety sand, gravel, and other aggregates operations, increased to $2.1 million in FY 2012. The Department held three mineral materials auctions during FY 2012, all three awarded to the original applicant as the successful bidder. The first auction held in August 2011 in Pima County, went to Clay Mine Adobe for $6,150 in annual rental and royalty income. The second auction was held in May 2012 in Yuma County; Cemex was the successful bidder resulting in an annual income of $74,000 to the Trust. Finally in June 2012, Kilauea Crushers successfully won the third auction for mineral materials in Maricopa County, worth $56,225 in annual income to the Trust. 8 OIL AND GAS L EASES In late January 2012, Kinder Morgan CO2 Company, L.P. acquired the St. Johns CO2 and Helium Field from Ridgeway Arizona Oil Corporation, including 80 State land oil and gas leases covering 111,514 acres of State Trust lands in southeastern Apache County (the State Trust lands represent a little more than 80% of the area within the Field), along with the Unit Agreement (UA) for the St. Johns Gas Field of February 1, 2009. Following the assignment of the leases and the UA from Ridgeway to Kinder Morgan, the Department received $996K in compensatory rentals under the terms of the UA. Once the purchase of the field was completed, the UA was amended to allow Kinder Morgan the original five-year period to bring the field into development, extending the term of the UA to eight years, or effectively, to January 31, 2017. Starting in April 2012, Kinder Morgan began re-entering and retesting eight of the wells drilled by Ridgeway, and in June 2012, they applied to drill two new wells on State Trust land. Should all of this additional testing and new drilling prove out the field to their satisfaction, Kinder Morgan plans to start developing the field in earnest in 2013, drilling 25 to 100 new wells per year for a period of three to four years for production of the CO 2. A pipeline would be required to transport the CO2 about 400 miles across New Mexico to the Permian Basin Oil Fields of southeastern New Mexico and west Texas, where the gas would then be used for secondary or tertiary recovery of oil from older fields. FLORENCE COPPER PROJECT The Department continues to work with Curis Resources on the Florence Copper Project, an in-situ solution mining process to recover a rich copper deposit. Curis is waiting on the issuance of an Aquifer Protection Permit (APP) from the Arizona Department of Environmental Quality. Once the APP is issued, Curis will provide the Department with a Plan of Operation and a Reclamation Plan for what it terms the Production Test Field (PTF). The PTF is a small test field that will be operated for one year to 18 months, and will help Curis determine the efficiency and economic viability of its insitu mining process. The royalty income from the Florence Copper Project could potentially make this, on a per-acre basis, the most lucrative mining project that the Department has ever participated in, generating between $78 and $188 million, depending on the price of copper, just from the 160-acre State Land parcel over the projected 20-year, or less, life of the mine. 9 A GRICULTURE ON STATE L AND TO INCLUDE A LGACULTURE House Bill 2225 expanded the definition of “agricultural lands” in A.R.S. §37-101 to include algaculture, the cultivation of single- or multi-cell organisms, algae, “for research, development and commercial production of biofuel or hydrogen (HB 2225).” Algae is grown in small shallow ponds or containers filled with water, and need carbon dioxide and prolonged exposure to sunlight in order to survive and grow. It can then be harvested off the top of the water and processed for various purposes. For example, the oil from algae has the capability to be transformed into biofuel, and the byproducts can then be used as animal feed, fertilizer, or in the production of ethanol (Curtiss & Kreider, Environmental Sustainability 2009— 90324). This bill will become effective in FY 2013. Aerial view of the outdoor testbed at the Arizona Center for Algae Technology and Innovation on Arizona State University's Polytechnic campus. (Photo by: Arizona Center for Algae Technology and Innovation) 10 LEASES AND PERMITS/REVENUE PRODUCTION FY 2012 Facts & Figures Lease Rentals NUMBER ACRES OF LEASES A CHANGE FOR WATER R IGHTS AND PERMITS The Department experienced an increase in the number of surface water documents processed as a result of changes at the Arizona Department of Water Resources (ADWR). Historically, lessees of State and Federal lands applied for, and were sometimes granted, water rights on lands to which they did not hold title. Permits to appropriate public water, certificates of water right, and assignments, i.e., changes of ownership, on State and Federal lands received prior to 1995 had been on hold with the ADWR. This fiscal year, the ADWR began processing these permits/certificates with a disclaimer related to ownership of the water right. Additional permits and water rights are expected to be processed in coming years. A DEQUATE WATER FOR Agriculture Grazing Mineral Material Exploration Permits Mineral Oil & Gas Mineral SLUPs 157,174 8,378,985 1,560 364,297 10,098 508,567 30,431 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 347 1,224 17 707 68 291 81 Agriculture Grazing Mineral Material Exploration Permits Mineral Oil & Gas Mineral SLUPs TOTAL Sale of Products 4,314 122 2,899 7,033 7,480 265 Public Auction Water Sales 281,194 Lease Water Charges 214,981 Mineral Royalties 21,783,656 Mineral Materials 2,118,940 Other Natural Products 106,538 TOTAL 24,505,309 GRAND TOTAL STATE T RUST L ANDS The Department conducted geological and hydrological investigations and Groundwater model studies of the Harquahala Valley and Butler Valley groundwater basins. Based on A.R.S. §45-108 and A.A.C. R12-15-712, ADWR approved an Analysis of Adequate Water Supply (AAWS) for approximately 37,796 acre-feet/year for a 100-year period for future development of State Trust lands in the Harquahala Valley basin. Additionally, this fiscal year, the Department submitted an AAWS application for future development of State Trust land within the Butler Valley basin. We anticipate a decision from the ADWR next fiscal year on the Butler Valley application. 11 INCOME 4,470,978 2,458,350 418,523 1,007,236 104,553 1,614,618 239,885 10,314,143 34,819,452 NRCD E NVIRONMENTAL E DUCATION Title 37, Chapter 6, Article 2 of the Arizona Revised Statutes authorizes the Department to establish a Division of Natural Resource Conservation. Since 1942, 32 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 NRCDs and corresponding Environmental Education Centers are overseen administratively by ASLD 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 successfully received grants from the Arizona Department of Health Services, Central Arizona Project, Gila River Indian Community, and the Pinal County Attorney’s office. 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 2011–2012 school year, this NREC presented 37 field days at Central Arizona College, ventured on 12 classroom visits, and participated in 12 community events. In total, the Center instructed 4,085 people in the wise use and management of Arizona’s renewable natural resources. Of those, 3,560 were children and 525 were adults. 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. This NREC uses several avenues for program delivery. They provide classroom visits where all types of natural resource issues can be discussed such as agronomy (corn, pumpkins, and vegetable production), animal husbandry (dairy and egg production), entomology (the study of insects), and various soil The 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. 12 REAL ESTATE CROSSROADS E AST SALE The sale of this 29.37-acre parcel at the southeast corner of Scottsdale Road and Union Hills Drive marks the first applicant-initiated commercial sale for the Department since the downturn in the real estate market. This parcel is within the 2002 Crossroads East Master Development Plan and Planned Community District, which is located between Scottsdale and Pima Roads, bisected by the 101 Pima Freeway, and comprised of most of the remaining State Trust land within the Core North and Core South State Plats. These parcels are the largest and some of the last unimproved development parcels remaining in the City of Scottsdale, and some of the most valuable parcels in the State Trust. The applicant was the successful bidder and intends to develop a Lexus dealership on the north half of the parcel, which is compatible with the auto sales use along Scottsdale Road. The sale is promising for the Trust, not only because of its direct monetary benefit, but also due to the significant progress made with the Crossroads East Development Agreement which will positively impact future sales in the area. Crossroads East for a greater variety of retail and auto sales uses, along with increased multi-family uses, the most active sector in the residential market. The sale of this parcel and the attendant approvals and agreements, with respect to zoning and infrastructure reimbursements, will further enhance the value of the Crossroads East parcels, maximizing returns to the Trust, and allowing for greater predictability of costs associated with the purchase of other parcels within the Crossroads East Master Development Plan and Planned Community District. The Crossroads East Development Agreement provides for infrastructure payments to the City of Scottsdale for its installation of infrastructure, including roadways, underpasses and water, drainage, and sewer improvements. This agreement promotes growth and development in this 1000-acre area of raw State Trust land. The sale of this parcel included reimbursement to Scottsdale for a portion of those infrastructure costs and interest. In conjunction with this sale, the Department sought an amendment to the Land Use Budget Table of the 2002 Crossroads East Master Development Plan and rezoning case. The Master Plan and rezoning case established six character areas for the approximate 1000-acre site with specific zoning districts assigned to each. They also established a land use budget that maintained the zoning densities (or dwelling units) and intensities (i.e., commercial square footage) allowable, with flexibility to determine at the point of development in which the underlying zoning district would apply based on the proposed use. In 2011, the Department sought an amendment to the Land Use Budget Table to add Highway Commercial (C-3) District, and to remove the cap on the maximum allowable residential units within the R-5 Multi-Family Residential. This will allow increased density equal to the 23-unit per acre density provided to other R-5-zoned properties in Scottsdale. The amendment, which was approved by the Scottsdale City Council, creates opportunity in 13 ADOT I-10 & S TATE R OUTE 303: INTERCHANGE PROJECT UPDATE 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 is well underway 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. To facilitate construction the ASLD, working through the ASLD/ ADOT Partnership, has issued six rights-of-way for public road alignments, underground utilities and drainage easements adjacent to the Perryville Prison, two temporary construction easements to the ADOT, and two rights of way to utilities for power lines. In total over $8,000,000 was generated for the beneficiaries of the Trust. Artist’s rendition of preliminary design, courtesy of the Arizona Department of Transportation (actual frontage roads differ) 14 PICTURE CANYON API The Arizona Preserve Initiative (API) program is designed to encourage the preservation of select parcels of State Trust land for open space to benefit future generations. The Picture Canyon API petition, filed by the City of Flagstaff, is for an approximate 478 acres of State Trust land in the eastern part of the city. The petition area includes 126 petroglyph panels containing more than 735 images. The petroglyphs belong to the Sinaguan culture and some date back to 8,000 BCE (Robert Breunig, Director, Museum of Northern Arizona). Additionally the Rio de Flag courses through the petition site and the wetland and riparian conditions support over 130 bird species, including the bald eagle and the peregrine falcon. This area is also a wildlife corridor for species such as elk, mule deer, and turkey (Ron Sieg, Regional Supervisor, Arizona Game and Fish Department). The Arizona Trail bisects the site. In the final step of the API process, the State Land Commissioner, Maria Baier, made the decision to classify Picture Canyon as suitable for conservation purposes in April 2012 with Commissioner’s Order No. 193-2011/12. With the land classified as such, the City of Flagstaff would be eligible to use Growing Smarter matching funds to purchase the State Trust land at public auction in 2012. 15 M AJOR T RANSACTIONS/L EASES The City of Scottsdale purchased 2,482.24 acres on 12/14/2011. The land is part of the McDowell $45,000,000.00 Sonoran Preserve and is located east of the Pima Road alignment, between the Dixileta Drive and Dove Valley Road Alignments. The City of Scottsdale purchased 1,937.19 acres for the McDowell Sonoran Preserve on $41,000,000.00 12/7/2011. This area is located west of 136 th Street, between the Pinnacle Peak and Lone Mountain Road alignments. $16,700,163.00 Mineral lease 11-98925 to ASARCO, LLC for 574.79 acres. Caterpillar, Inc. purchased 4,425.25 acres on $12,600,000.00 12/22/2011, adjacent to their Pima County Proving Grounds. BCB Group Investments, LLC purchased 29.37 $10,222,274.37 acres in the City of Scottsdale (Crossroads East) on 5/15/2012 for commercial development. The City of Phoenix purchased 343.16 acres on 11/30/2011. This land is part of the Sonoran Pre$6,100,000.00 serve and is located south of the Carefree Highway, east of I-17. $4,925,159.00 SCOTTSDALE M C D OWELL SONORAN P RESERVE Mineral lease 11-113183 to Freeport Morenci for 331.79 acres. The City of Phoenix purchased 282.99 acres on 11/30/2011. This land is part of the Sonoran Pre$4,300,000.00 serve and is located south of the Carefree Highway, east of I-17. 16 OTHER M AJOR L AND SALES FOR FY 2012 This year the Department brought to auction four parcels that had been classified as suitable for conservation under the API. In November 2011, The City of Phoenix purchased two parcels for the Sonoran Preserve: a 343.16-acre parcel for $6.1 million and a 282.99-acre parcel for $4.3 million. To date, Phoenix has purchased approximately 6,600 acres of the 19,400 acres approved by the City Council in 1998. The City of Scottsdale also had two successful auctions in December, working toward completion of the McDowell Sonoran Preserve. The first sale in December was for a 1,937.29-acre parcel for $41 million; the second 2,482.24-acre parcel sold for $45 million. Scottsdale has now acquired or protected more than 13,500 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. Also in December, the Department auctioned 4,425.25 acres proximate to P HOENIX SONORAN P RESERVE the Town of Green Valley in Pima County. The successful bidder, Caterpillar, Inc., will use the lands for a facility for engine and heavy equipment testing, heavy equipment demonstration and training, in addition to an assembly and maintenance center. Facts and Figures Land Auctioned FY 2012 17 Acres Sold Total Sales Price Acres Leased Minimum Cumulative Lease Revenue Urban 5,121.21 $107,242,274.37 0 $0 Rural 4,479.23 $12,644,675.00 546.62 $3,405,000.00 TOTAL 9,600.44 $119,886,949.37 546.62 $3,405,000.00 SOLAR E NERGY L EASES term of the lease, the ASLD will generate in excess of $10,984,000 in the form of rent based on the land value, coupled with a capacity fee based upon power production. Fiscal year 2012 marks a historical year for the Department’s push toward working with the renewable energy community. The ASLD worked diligently to develop a lease to cover the aspects of project development, lease payments, operation, and decommissioning of solar power facilities. Market information regarding the economics of real estate pertaining to solar energy is very sparse and closely guarded. This required significant and original work by the ASLD to determine applicable lease rates and terms. The Department successfully crafted a marketable lease with terms very beneficial to the Trust. The solar development community is comfortable with the lease and has accepted the ASLD’s process. On March 29, 2012 the ASLD entered into their second solar lease with Arlington Valley Solar Energy II (AVSE II) located on 150 acres west of Buckeye in Maricopa County. This project also uses photovoltaic technology with a single axis sun tracking system, and is presently under construction. The minimum rating of this facility will be 17 megawatts. The location of the lease is just a portion of a larger project spanning both State and private land. The produced energy has been sold with a 20 year commitment to San Diego Gas & Electric. The Department will receive in excess of $5,633,000.00 from base rent and capacity fees over the term of the lease. The Department is often invited to speak to, and enthusiastically engages groups representing the solar energy industry. The ASLD will continue to enhance the value of the Trust and the State economy by pursuing these opportunities. La Paz Co. AVSE II PHOENIX On March 28, 2012, the ASLD successfully entered into its first long-term commercial lease for the production of solar energy. The lease with Arizona Public Service Company (APS) is located on 398 acres in the Foothills area of Yuma County. The photovoltaic solar power facility will be mounted on a tracking system to rotate from east to west, following the sun’s arc across the sky, maximizing the photovoltaic panels’ exposure. The facility is presently under construction and will be rated at 35 megawatts. The power generated from APS’s facility will be enough to serve approximately 8,500 homes in the Yuma area and is strategically located to improve the reliability of their generating capacity, particularly through the summer months. During the Yuma Co. Maricopa Co. YUMA APS 18 Pima Co. Pinal Co. STATE TRUST LAND USES STATE TRUST LAND USES NO. OF % OF TOTAL % OF LEASES LEASES ACREAGE ACREAGE Rights Of Way 7,540 73.14% 137,360.45 1.46% Grazing 1,224 11.87% 8,378,984.84 88.86% Commercial 326 3.16% 75,092.42 0.80% Commercial School Leases 21 0.20% 1,142.93 0.01% Agricultural 347 3.37% 157,173.68 1.67% Use Permits 678 6.58% 648,401.83 6.88% U.S. Government 156 1.51% 18,270.03 0.19% Homesite 1 0.01% 5.63 0.00% Institutional 10 0.10% 12,891.56 0.14% Recreational 6 0.06% 0.01 0.00% SUBTOTAL (Leases) 10,309 100.00% 9,429,323.38 100.00% SURFACE  10,309 leases and other contracts contain 9,429,323.38 surface acres.  1,083 leases and other contracts contain 884,522.41 subsurface acres. SUBSURFACE Mineral Mineral Exploration Mineral Materials Oil & Gas SUBTOTAL (Leases) TOTAL LEASES NO. OF % OF TOTAL % OF LEASES LEASES ACREAGE ACREAGE 68 6.28% 10,097.59 1.14% 707 65.28% 364,297.39 41.19% 17 1.57% 1,559.64 0.18% 291 26.87% 508,567.40 57.50% 1,083 100.00% 884,522.02 100.00% 11,392 10,313,845.41 Did You Know? 19  By Statute, all major ASLD transactions must be substantiated by an appraisal to help protect the Trust beneficiaries.  The current appraisal staff consists of three appraisers with over 60 years of experience combined.  During the past year, the Appraisal Section either appraised or contracted out for appraisal over 95 assignments totaling $266,000,000 in combined land value. LAND OWNERSHIP AND MANAGEMENT 20 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. COUNTY DISTRIBUTION OF STATE TRUST LAND 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 661,739.44 Cochise 1,370,674.67 Coconino 1,134,038.83 Gila P ERCENTAGE OF STATE T RUST L AND P ER C OUNTY 31,231.07 Graham 496,948.63 Greenlee 172,104.74 La Paz 258,990.86 Maricopa 638,068.18 Mohave 581,527.37 Navajo 370,155.14 Pima 856,093.91 Pinal 1,204,533.61 Santa Cruz Yavapai 61,235.97 1,264,327.04 Yuma 189,370.57 Other 11,215.59 TOTAL 21 ACRES 9,302,255.62 B OARD OF A PPEALS C URRENT B OARD M EMBERS Jolene U. Dance, Chair Phoenix 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. Member-at-Large. Jeffrey Covill, Vice Chair Phoenix Represents the Second District consisting of Maricopa, Pinal, Gila, Yuma and La Paz counties. The State Land Department Board of Appeals consists of five board members (pictured to the left) appointed 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 at-large. During FY 2012 two board members’ retired their terms: Kathleen M. Holmes was replaced by Sandra B. Kelly, and Richard Pointer took over Norman R. Brown’s place on the board. Sanders K. Solot Tucson Represents the First District, consisting of Pima, Santa Cruz, Cochise, Graham and Greenlee counties. Sandra B. Kelley Scottsdale The Board currently meets monthly. This schedule 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. Member-at-Large. Richard Pointer Prescott During this fiscal year, the Board approved 15 new commercial leases, 33 renewal leases, 55 rights-of-way sale appraisals, and 20 land sale appraisals. Represents the Third District consisting of Mohave, Yavapai, Coconino, Apache and Navajo counties. Three new appeals were filed with the Board. All appeals were withdrawn and dismissed by the Board. At the close of FY 2012, there were no appeals pending. B OARD M EMBERS, T ERM E XPIRED D URING FY 2012 Kathleen M. Holmes, Term Expired January 2012 Scottsdale The Commissioner and the staff of the ASLD appreciate the considerable time and effort Board of Appeals members invest in serving the Trust and the citizens of Arizona. Member-at-Large. Norman R. Brown, Term Expired March, 2012 St. Johns Represents the Third District consisting of Mohave, Yavapai, Coconino, Apache and Navajo counties. 22 FISCAL YEAR 2012 FUNDS Expendable Commercial Prepayment School Leases General Trust Land Management Fund $47,113,466.89 $54,964.28 $0.00 $155,912.50 $3,973,475.22 Permanent $161,920,981.00 TOTAL LAND DEPARTMENT $213,218,799.89 Treasurer's Distribution GRAND TOTAL - FY 2012 $83,922,184.00 $297,140,983.89 23 FISCAL YEAR 2012 BENEFICIARIES Common Schools (K—12)‡ REVENUES BY BENEFICIARY FY 2012 TRUST ACRES STATE LAND EXPENDABLE EARNINGS TREASURER'S FORMULA DISTRIBUTION TOTAL EXPENDABLE RECEIPTS TOTAL PERMANENT RECEIPTS TOTAL RECEIPTS 8,088,270.54 39,155,062.11 77,832,917.00 116,987,979.11 155,572,376.94 272,560,356.05 Normal Schools Grant 174,797.56 138,286.55 90,281.00 228,567.55 81,208.47 309,776.02 Agricultural & Mechanical Colleges 124,943.87 96,550.51 264,320.00 360,870.51 6,406.42 367,276.93 Military Institutes Grant 80,168.11 45,720.41 15,388.00 61,108.41 0.00 61,108.41 School of Mines Grant 123,254.09 212,463.84 299,966.00 512,429.84 42,933.29 555,363.13 University Land Code 137,906.42 1,134,451.75 479,020.00 1,613,471.75 261,068.47 1,874,540.22 51,881.13 549,515.11 1,023,757.00 1,573,272.11 175,985.61 1,749,257.72 82,559.65 172,111.51 129,625.00 301,736.51 97,303.95 399,040.46 SUBTOTAL Education 8,863,781.36 41,504,161.79 80,135,274.00 121,639,435.79 156,237,283.15 277,876,718.94 Legislative, Executive & Judicial Buildings 64,257.10 114,558.21 216,960.00 331,518.21 395,329.50 726,847.71 State Hospital Grant 71,248.39 550,600.71 146,483.00 697,083.71 154,632.46 851,716.17 Miners' Hospital Grant† 95,383.13 1,661,731.67 350,474.00 2,012,205.67 3,378,831.20 5,391,036.87 State Charitable, Penal, and Reformatory 77,228.58 2,266,176.12 2,725,732.00 4,991,908.12 1,642,557.48 6,634,465.60 Penitentiary Grant 76,110.72 1,016,238.39 347,261.00 1,363,499.39 112,347.21 1,475,846.60 9,248,009.29 47,113,466.89 83,922,184.00 131,035,650.89 161,920,981.00 292,956,631.89 University of Arizona (Act of 2/18/1881) School for the Deaf & Blind TOTAL † ‡ Miners’ Hospital and Miners’ Hospital 1929 combined Including County Bonds 24 PERMANENT FUND  The Department deposited $162 million into the Permanent Funds in FY 2012, increasing the book value to $2,613,717,000. BENEFICIARY SHARE OF PERMANENT FUND June 30, 2012  The balance of Department managed sales contracts is $503.1 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 2,433,849,000 Market Value 3,277,439,000 Normal Schools 2,467,000 3,511,000 Agricultural & Mechanical Colleges 6,372,000 9,586,000 359,000 535,000 7,669,000 10,855,000 University Land Code 12,735,000 18,093,000 University of Arizona (Act of 2/18/1881) 37,523,000 50,276,000 School for the Deaf & Blind 3,483,000 5,053,000 Legislative, Executive, and Judicial 5,588,000 8,000,000 State Hospital 3,992,000 5,895,000 Miner's Hospital 14,737,000 18,605,000 State Charitable, Penal, and Reformatory 76,863,000 105,154,000 8,080,000 11,632,000 2,613,717,000 3,524,634,000 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 25 EXPENDABLE REVENUE EXPENDABLE REVENUE BY BENEFICIARY FY 2012  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 revenues are distributed directly to the beneficiaries.  Expendable revenue totaled $131.0 million in FY 2012. BENEFICIARIES  Revenue from Trust land leases, permits, and interest earnings from sales financed through the Department totaled $47.1 million. Common Schools  The Treasurer distributed $83.9 million according to the constitutional formula based on the five-year average net return and the 60 month average market value. Normal Schools LEASE AND SALES TOTAL CONRACT EXPENDABLE INTEREST REVENUE 77,832,917.00 39,155,062.11 116,987,979.11 90,281.00 138,286.55 228,567.55 264,320.00 96,550.51 360,870.51 Military Institutes 15,388.00 45,720.41 61,108.41 School of Mines 299,966.00 212,463.84 512,429.84 University Land Code 479,020.00 1,134,451.75 1,613,471.75 1,023,757.00 549,515.11 1,573,272.11 129,625.00 172,111.51 301,736.51 Agriculture and Mechanical Colleges University of Arizona (Act of 2/18/1881) School for the Deaf and Blind Subtotal Education 80,135,274.00 41,504,161.79 121,639,435.79 Legislative, Executive & Judicial Buildings 216,960.00 114,558.21 331,518.21 State Hospital 146,483.00 550,600.71 697,083.71 Miners Hospital 350,474.00 1,661,731.67 2,012,205.67 2,725,732.00 2,266,176.12 4,991,908.12 347,261.00 1,016,238.39 1,363,499.39 State Chritable, Penal, & Reformatory Penitentiaries TOTAL 26 TREASURERS'S FORMULA DISTRIBUTIONS 83,922,184.00 47,113,466.89 131,035,650.89 FUND AND BENEFICIARY SUMMARY In FY 2012, State Trust receipts totaled $297,140,984. A total of $213,218,800 was earned for the beneficiaries, $155,913 was deposited in the General Fund, $54,964 was received as commercial prepayments, and $3,973,475 was deposited into the Trust Land Management Fund, which is used to manage the Trust. Of the beneficiary amount, $83,922,184 was deposited into the Permanent Funds. The Permanent Funds are managed by the State Treasurer. The remaining $131,035,651 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 8,088,271 Receipts over $72.3 million 174,798 Normal Schools 124,944 Agricultural & Mechanical Colleges 80,168 Military Institutes 123,254 School of Mines 137,906 University Land Code Classroom Site Fund Board of Regents to Distribute to Universities 51,881 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 95,383 Miners’ Hospital (2 Grants) Pioneers' Home 77,229 State Charitable, Penal, and Reformatory 76,111 Penitentiary 9,248,009 State Aid Formula for K - 12 Common Schools (K - 12) (Includes County Bonds) 50% Pioneers' Home 25% Department of Corrections Department of Corrections TOTAL 27 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 8.1 million acres remain in the Trust for common schools.  In FY 2012, $155.6 million from sales and royalties was deposited into the Permanent Fund for common schools bringing the total balance to $2,433,849,000.  In FY 2012, $117.0 million was generated in expendable receipts from leases and interest on the outstanding sales balance. The Treasurer distributed $16.2 million to the common schools in FY 2011. 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. 28 COMMON SCHOOLS ACRES AND INCOME-FY 2012 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 113,970 18,099 7,381,009 6 94,146 556,823 0 5,406 17,430 0 8,186,889 INCOME 3,186,657.41 17,035,740.31 2,095,140.11 6,893.23 2,532,397.08 3,272,236.17 0.00 457,653.47 409,106.07 2,417,009.28 31,412,833.13 9,758 324,756 889 418,509 17,430 771,343 71,888.94 909,183.83 148,521.93 1,477,482.82 0.00 2,607,077.52 538,635.34 4,596,516.12 0.00 77,832,917.00 116,987,979.11 155,572,376.94 2,433,849,000.00 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) 2008 2009 2010 2011 2012 238.5 138.5 91.7 109.4 155.6 69.3 54.3 0 16.2 77.8 Rent & Interest 104.4 74.1 38.1 42.2 39.2 Total Expendable 173.7 128.4 38.1 59.9 117.0 Base Year Amount (72.3) (72.3) (72.3) (72.3) (72.3) Classroom Site Fund 101.4 56.2 0 0 44.7 Fiscal Year Permanent Fund Revenue Treasurer's Distribution 29 FUND AND BENEFICIARY SUMMARY 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 $4.3 million in FY 2012. An additional $567,602 was earned and added to the permanent funds for the six grants, bringing the total Permanent Fund balance to $67.1 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 2012 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 Northern Arizona University Permanent Fund Receipts Permanent Fund Balance NAU Letters Photo 2012 (Photo courtesy of Northern Arizona University) 30 ACRES 13,525 51,417 598,427 0 7,962 39,026 0 5,151 299 0 715,807 INCOME 342,149.86 637,460.21 219,007.57 0.00 178,836.21 413,488.86 0.00 780.35 363.43 5,372.04 1,797,458.53 0 25,700 200 70,335 299 96,533 0.00 60,420.17 53,760.09 123,565.27 0.00 237,745.53 13,271.65 128,512.46 2,172,732.00 4,349,720.17 567,602.26 67,125,000.00 Arizona State University An aerial view of the Tempe campus, (Photo by Tom Story and courtesy of Arizona State University) University of Arizona Tucson is a bustling urban center of nearly a million residents. Set in the lush Sonoran Desert and surrounded by mountains, this unique environment is famous for mild winters, stunning sunsets and outdoor adventures (Photo credit: University of Arizona External Relations | Marketing) 31 FUND AND BENEFICIARY SUMMARY University Grants Continued NORMAL SCHOOLS GRANT ACRES AND INCOME—FY 2012 AGRICULTURAL & MECHANICAL COLLEGES ACRES AND INCOME—FY 2012 MILITARY INSTITUTES ACRES AND INCOME—FY 2012 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 165 22,539 146,666 0 1,634 7,130 0 2,721 184 0 INCOME 3,694.85 21,644.67 55,169.27 0.00 5,470.82 5,214.25 0.00 0.00 363.43 300.00 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 1,803 11,691 0 1,917 86 0 INCOME 3,442.45 1,376.17 40,419.21 0.00 26,216.31 17,338.39 0.00 0.00 0.00 0.00 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE 181,039 91,857.29 TOTAL SURFACE 133,083 88,792.53 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 0 19,250 120 7,935 184 0.00 18,059.74 10,560.09 16,663.47 0.00 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 0 1,789 0 6,589 86 TOTAL SUBSURFACE 27,489 45,283.30 TOTAL SUBSURFACE 8,464 Penalty & Interest Sales Interest Treasurer's Formula Distribution 1,145.96 0.00 90,281.00 Penalty & Interest Sales Interest Treasurer's Formula Distribution 475.23 0.00 264,320.00 Penalty & Interest Sales Interest Treasurer's Formula Distribution 401.81 0.00 15,388.00 GRAND TOTAL EXPENDABLE 228,567.55 GRAND TOTAL EXPENDABLE 360,870.51 GRAND TOTAL EXPENDABLE 61,108.41 Permanent Fund Receipts Permanent Fund Balance 81,208.47 2,467,000.00 Permanent Fund Receipts Permanent Fund Balance 32 ACRES 0 1,677 76,749 0 269 3,337 0 0 0 0 INCOME 0 2,400.00 33,334.73 0.00 2,868.63 2,054.20 0.00 0.00 0.00 0.00 TOTAL SURFACE 82,032 40,657.56 0.00 60.00 0.00 7,222.75 0.00 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 0 640 0 18,182 0 0.00 0.00 0.00 4,661.04 0.00 7,282.75 TOTAL SUBSURFACE 18,822 4,661.04 6,406.42 6,372,000.00 Permanent Fund Receipts Permanent Fund Balance 0.00 359,000.00 SCHOOL OF MINES ACRES AND INCOME—FY 2012 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 2,445 8,483 111,087 0 1,086 8,935 0 0 17 0 INCOME 40,427.81 8,381.11 38,570.33 0.00 16,884.62 9,406.13 0.00 0.00 0.00 0.00 TOTAL SURFACE 132,052 113,670.00 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 0 2,731 0 17,215 17 0.00 40,857.48 0.00 56,482.10 0.00 TOTAL SUBSURFACE 19,962 97,339.58 UNIVERSITY LAND CODE ACRES AND INCOME—FY 2012 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 2,358 5,178 0 107 8 0 INCOME 59,676.16 514,813.03 41,660.30 0.00 105,013.18 346,398.85 0.00 780.35 0.00 1,850.00 TOTAL SURFACE 137,370 1,070,191.87 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 0 890 0 20,414 8 0.00 1,442.95 0.00 38,535.91 0.00 TOTAL SUBSURFACE 21,312 39,978.86 UNIVERSITY OF ARIZONA—1881 ACRES AND INCOME—FY 2012 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 7,039 308 38,908 0 812 2,755 0 406 4 0 INCOME 234,908.59 88,845.23 9,853.73 0.00 22,382.65 33,077.04 0.00 0.00 0.00 3,222.04 50,231 392,289.28 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 0 400 80 0 4 0.00 0.00 43,200.00 0.00 0.00 TOTAL SUBSURFACE 484 43,200.00 TOTAL SURFACE Penalty & Interest Sales Interest Treasurer's Formula Distribution 1,454.26 0.00 299,966.00 Penalty & Interest Sales Interest Treasurer's Formula Distribution 986.10 23,294.92 479,020.00 Penalty & Interest Sales Interest Treasurer's Formula Distribution 8,808.29 105,217.54 1,023,757.00 GRAND TOTAL EXPENDABLE 512,429.84 GRAND TOTAL EXPENDABLE 1,613,471.75 GRAND TOTAL EXPENDABLE 1,573,272.11 Permanent Fund Receipts Permanent Fund Balance 42,933.29 7,669,000.00 Permanent Fund Receipts Permanent Fund Balance 33 261,068.47 12,735,000.00 Permanent Fund Receipts Permanent Fund Balance 175,985.61 37,523,000.00 FUND AND BENEFICIARY SUMMARY 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 $4,508,159.73 in expendable receipts in FY 2012.  The Department of Juvenile Corrections received $1,247,977.03 in expendable receipts in FY 2012.  The Department of Corrections received a total of $2,611,476.42 in expendable receipts in FY 2012. 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. (Photo courtesy of the Arizona State Schools for the Deaf and Blind) Arizona Department of Juvenile Corrections Black Canyon School (BCS) operates intake and secure programming for youth. BCS houses all female youth and is located in Phoenix. (Photo courtesy of the Arizona Department of Juvenile Corrections) 34 SCHOOL FOR THE DEAF & BLIND ACRES AND INCOME—FY 2012 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 0 798 11,309 0 1 32 0 INCOME 68,301.96 30,997.35 29,213.61 0.00 22,372.32 16,512.37 0.00 1,197.47 0.00 17.57 88,771 168,612.65 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 0 2,282 0 3,551 32 0.00 1,041.90 0.00 1,240.00 0.00 TOTAL SUBSURFACE 5,865 2,281.90 TOTAL SURFACE LEGISLATIVE, EXECUTIVE, & JUDICIAL BUILDINGS ACRES AND INCOME—FY 2012 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other STATE HOSPITAL ACRES AND INCOME—FY 2012 ACRES 1,104 5 57,427 0 1,390 4,226 0 0 92 0 INCOME 23,902.91 25,920.00 18,852.52 0.00 13,003.98 146.31 0.00 0.00 0.00 0.00 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other 64,244 81,825.72 TOTAL SURFACE SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 0 2,153 0 4,443 92 0.00 26,299.63 0.00 5,810.47 0.00 TOTAL SUBSURFACE 6,688 32,110.10 TOTAL SURFACE ACRES 4,246 204 57,770 0 877 6,379 0 80 108 0 INCOME 141,691.25 271,533.74 20,503.08 0.00 25,857.60 18,411.15 0.00 20,559.00 0.00 1,195.00 69,664 499,750.82 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 60 1,196 77 3,911 108 32,544.00 1,344.15 11,000.00 0.00 0.00 TOTAL SUBSURFACE 5,352 44,888.15 Penalty & Interest Sales Interest Treasurer's Formula Distribution 1,216.96 0.00 129,625.00 Penalty & Interest Sales Interest Treasurer's Formula Distribution 622.39 0.00 216,960.00 Penalty & Interest Sales Interest Treasurer's Formula Distribution 5,961.74 0.00 146,483.00 GRAND TOTAL EXPENDABLE 301,736.51 GRAND TOTAL EXPENDABLE 331,518.21 GRAND TOTAL EXPENDABLE 697,083.71 Permanent Fund Receipts Permanent Fund Balance 97,303.95 3,483,000.00 Permanent Fund Receipts Permanent Fund Balance 35 395,329.50 5,588,000.00 Permanent Fund Receipts Permanent Fund Balance 154,632.46 3,992,000.00 FUND AND BENEFICIARY SUMMARY Other Grants Continued MINERS’ HOSPITAL* ACRES AND INCOME—FY 2012 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 12,866 579 73,482 0 1,560 9,112 0 1 168 0 INCOME 406,318.54 975,933.50 24,168.81 2,495.00 25,302.28 62,597.69 0.00 947.14 0.00 534.72 97,768 1,498,297.68 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 119 6,382 230 1,960 168 0.00 6,326.70 20,239.91 1,760.00 0.00 TOTAL SUBSURFACE 8,859 28,326.61 TOTAL SURFACE STATE CHARITABLE, PENAL, & REFORMATORY ACRES AND INCOME—FY 2012 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 3,997 2,834 62,845 0 1,148 6,854 0 475 117 0 INCOME 100,870.97 343,502.59 23,533.95 0.00 47,569.58 843,227.51 0.00 71,549.33 0.00 0.00 78,271 1,430,253.93 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 160 0 138 5,378 117 120.00 0.00 176,000.64 4,279.92 0.00 TOTAL SUBSURFACE 5,793 180,400.56 TOTAL SURFACE PENITENTIARY ACRES AND INCOME—FY 2012 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other ACRES 4,717 456 66,025 0 586 14,344 0 1,778 5 0 INCOME 194,637.75 718,200.50 24,646.65 0.00 11,788.65 61,244.39 0.00 0.00 0.00 0.00 87,911 1,010,517.94 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil and Gas U.S. Government 0 1,830 0 480 5 0.00 2,619.32 0.00 480.00 0.00 TOTAL SUBSURFACE 2,315 3,099.32 TOTAL SURFACE Penalty & Interest Sales Interest Treasurer's Formula Distribution 5,098.34 130,009.04 350,474.00 Penalty & Interest Sales Interest Treasurer's Formula Distribution 4,430.99 651,090.64 2,725,732.00 Penalty & Interest Sales Interest Treasurer's Formula Distribution 2,621.13 0.00 347,261.00 GRAND TOTAL EXPENDABLE 2,012,205.67 GRAND TOTAL EXPENDABLE 4,991,908.12 GRAND TOTAL EXPENDABLE 1,363,499.39 Permanent Fund Receipts Permanent Fund Balance 112,347.21 8,080,000.00 Permanent Fund Receipts Permanent Fund Balance 3,378,831.20 14,737,000.00 Permanent Fund Receipts Permanent Fund Balance * Miners’ Hospital and Miners’ 1929 combined 36 1,642,557.48 76,863,000.00 Financial Schedules Receipts by Category ................................................................ 38 Rental Acreage and Receipts .................................................... 39 Treasurer’s Formula Distribution ............................................... 40 State Trust Land Acreage by Beneficiary .................................. 41 Auctions of Leases with and without Preferred Right ............... 42 37 FINANCIAL SCHEDULES Common Schools (K-12)‡ Leg., Exec. & Judicial RECEIPTS BY CATEGORY ROYALTY SALES SALES INTEREST LEASE RENTAL PENALTY & INTEREST OTHER RECEIPTS TOTAL 23,567,835.56 132,004,541.38 4,596,516.12 34,019,910.65 538,635.34 0.00 194,727,439.05 329.50 395,000.00 0.00 113,935.82 622.39 0.00 509,887.71 State Hospital 131,970.40 22,662.06 0.00 544,638.97 5,961.74 0.00 705,233.17 Miners' Hospital* 117,528.00 3,261,303.20 130,009.04 1,526,624.29 5,098.34 0.00 5,040,562.87 St Char., Pen. & Ref. 368,753.93 1,273,803.55 651,090.64 1,610,654.49 4,430.99 0.00 3,908,733.60 Penitentiaries 63,236.09 49,111.12 0.00 1,013,617.26 2,621.13 0.00 1,128,585.60 Normal Schools 81,208.47 0.00 0.00 137,140.59 1,145.96 0.00 219,495.02 6,406.42 0.00 0.00 96,075.28 475.23 0.00 102,956.93 0.00 0.00 0.00 45,318.60 401.81 0.00 45,720.41 A&M Colleges Military Institutes School of Mines 42,933.29 0.00 0.00 211,009.58 1,454.26 0.00 255,397.13 4,640.79 256,427.68 23,294.92 1,110,170.73 986.10 0.00 1,395,520.22 137,584.22 38,401.39 105,217.54 435,489.28 8,808.29 0.00 725,500.72 1,314.01 95,989.94 0.00 170,894.55 1,216.96 0.00 269,415.46 School Leases 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Comercial Prepayments 0.00 0.00 0.00 0.00 0.00 54,964.28 54,964.28 24,523,740.68 137,397,240.32 5,506,128.26 41,035,480.09 571,858.54 54,964.28 209,089,412.17 University Land Code U of A (Act of 2/18/1881) School for the Deaf & Blind TOTAL SCHOOLS & INSTITUTIONS F.E.M.A Lands 35,000.00 0.00 0.00 46,820.00 109.11 0.00 81,929.11 Farm Loan Lands 0.00 0.00 0.00 3,893.88 26.92 0.00 3,920.80 Navigable Streambeds Non-Navigable Streambeds Lands Held in Trust 0.00 0.00 0.00 61,247.17 267.13 0.00 61,514.30 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 0.00 0.00 TOTAL GENERAL FUND 35,000.00 0.00 0.00 120,509.34 403.16 0.00 155,912.50 0.00 0.00 0.00 0.00 0.00 3,973,475.22 3,973,475.22 24,558,740.68 137,397,240.32 5,506,128.26 41,155,989.43 572,261.70 4,028,439.50 213,218,799.89 TRUST LAND MANAGEMENT FUND TOTAL RECEIPTS * Miner's Hospital & Miners Hospital 1929 Combined ‡ Including County Bonds 38 RENTAL ACREAGE AND RECEIPTS BY TYPE OF LEASE FY 2012 SURFACE LEASES Agriculture Commercial School Leases Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE Acres Receipts 157,174 75,092 ** 8,378,985 6 108,596 648,302 0 12,892 18,270 0 4,470,978.47 20,065,234.25 0.00 2,458,349.71 9,388.23 2,880,427.76 4,740,396.45 0.00 552,686.76 409,469.50 2,424,128.61 9,399,316 38,011,059.74 10,098 364,297 1,560 508,567 18,270 104,552.94 1,007,235.70 418,522.57 1,614,618.48 0.00 902,792 3,144,929.69 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 572,261.70 5,506,128.26 24,505,309.64 132,401,234.99 4,964,754.00 84,682.37 54,964.28 3,973,475.22 TOTAL NON-LEASE REVENUES 172,062,810.46 GRAND TOTAL 213,218,799.89 **The acres for School Leases is part of the total for Commercial 39 TREASURER'S FORMULA DISTRIBUTION* Year Ending June 30 Year Ending June 30 FY 2011 FY 2012 Common Schools Increase (Decrease) May 12, 1912 To Date 16,163,946 77,832,917 61,668,971 1,240,369,091 Normal Schools Grant 20,904 90,281 69,377 2,589,080 Agricultural & Mechanical Colleges 56,793 264,320 207,527 8,766,291 Military Institutes Grant 4,161 15,388 11,227 1,224,485 School of Mines Grant 70,521 299,966 229,445 1,302,322 University Land Code 108,150 479,020 370,870 11,629,200 University of Arizona (Act of 2/18/1881) 242,481 1,023,757 781,276 24,061,063 School for the Deaf & Blind 31,266 129,625 98,359 4,577,851 Legislative, Executive & Judicial Buildings 53,709 216,960 163,251 7,418,887 State Hospital Grant 27,759 146,483 118,724 3,651,247 Miners' Hospital Grant† 75,186 350,474 275,288 7,216,345 State Charitable, Penal, and Reformatory 507,633 2,725,732 2,218,099 29,208,798 Penitentiary Grant 115,632 347,261 231,629 4,870,403 17,478,141 83,922,184 66,444,043 1,346,885,063 TOTAL * Information from the State Treasurer † Miner's Hospital & Miners Hospital 1929 Combined 40 STATE TRUST LAND ACREAGE BY BENEFICIARY BENEFICIARY FY 1978 FY 2012 8,342,469 8,088,271 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 166,354 137,906 University of Arizona (Act of 2/18/1881) 62,216 51,881 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 47,697 Miners Hospital (1929) 53,311 47,686 St Char., Pen. & Ref. 80,010 77,229 Penitentiaries 80,830 76,111 9,586,606 9,248,010 Common Schools (K-12)* TOTAL *Includes County Bonds 41 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 3/28/2012 S of East 40th St., between 03-115986 Fortuna and Foothills Rds., E of Yuma, Arizona 3/29/2012 03-113632 Approx. 1.25 mi. S of Narramore Rd., on the 363rd Ave. Alignment Preference Preferred No. of Minimum Exercised Right Bidders Bid* Revenue Bonus Sum Base Rental Bid No 1 No $2,775,000 N/A $ 10,983,642.00 No 1 No $630,000 N/A $ 5,632,941.35 *Minimum Bid based upon appraised land value rather than 1st year rent 42 1616 West Adams ● Phoenix, Arizona 85007 www.land.state.az.us