Douglas A. Ducey
GOVERNOR

ANNUAL REPORT
2015 - 2016

Lisa A. Atkins
COMMISSIONER

Serving Arizona’s Schools and Public Institutions Since 1915

MISSION STATEMENT
To manage State Trust lands and resources to enhance value and optimize economic return
for the Trust beneficiaries, consistent with sound business management principles, prudent
stewardship, and conservation needs supporting socio-economic goals for citizens here
today and future generations. To act in the best interest of The Trust for the enrichment of
the beneficiaries and preserve the long term value of the State’s Trust lands.

Arizona Revised Statutes §37-103. Seal of state land department
The state land department shall have a seal, and it shall be affixed with the signature of
the state land commissioner to all instruments of conveyance, leases, certificates and
other official acts. The signature of the commissioner and seal of the department upon
the original or copy of any paper, plat, map or document from the state land
department shall impart verity thereto.

TABLE OF CONTENTS

DOUG DUCEY
GOVERNOR
STATE OF ARIZONA

MESSAGE FROM THE COMMISSIONER ..................................................................... 4
ABOUT THE COMMISSIONER AND DEPUTY COMMISSIONER .................................. 5
HISTORICAL OVERVIEW .............................................................................................. 6
INSTITUTIONAL LANDS ............................................................................................... 7
LAND MANAGEMENT MAP ....................................................................................... 8
FISCAL YEAR 2016 RECEIPTS .................................................................................... 9
PERMANENT AND EXPENDABLE FUNDS ...................................................................10
FISCAL YEAR RECEIPTS ..............................................................................................11
STATE TRUST LAND USES…………………………………………………………………......12
STATE TRUST REVENUE GENERATION……………………………………………………...12
STATE TRUST LAND IN EACH COUNTY ...................................................................13
BENEFICIARIES ............................................................................................................14
REVENUE BY BENEFICIARY .........................................................................................15
FUND AND BENEFICIARY SUMMARY: K-12 EDUCATION .....................................16
FUND AND BENEFICIARY SUMMARY: UNIVERSITIES ..............................................17
FUND AND BENEFICIARY SUMMARY: OTHER GRANTS .........................................19
ABOUT THE LAND DEPARTMENT: DIVISIONS AND SECTIONS .............................22
REAL ESTATE .............................................................................................................22
NATURAL RESOURCES ..............................................................................................22
MINERAL ACTIVITY MAP...........................................................................................24
ADMINISTRATION ......................................................................................................25
INFORMATION SYSTEMS AND RESOURCE ANALYSIS ............................................25
RENTAL ACREAGE AND RECEIPTS ...........................................................................26
FINANCIAL SCHEDULES ...........................................................................................27
RECEIPTS BY CATEGORY ......................................................................................27
TREASURER’S FORMULA DISTRIBUTION .............................................................28

Please visit our website at
www.land.az.gov

MESSAGE FROM THE COMMISSIONER
September 1, 2016
Honorable Douglas A. Ducey
Governor
State of Arizona
1700 West Washington
Phoenix, Arizona 85007
Dear Governor Ducey:
It is a privilege to deliver the Annual Report of the Arizona State Land Department (ASLD)
for Fiscal Year 2016 (FY 2016) as required by A.R.S. § 37-132. The report contains a summary
of the Department’s activities and revenue earned during the fiscal year.
Of particular note are the following ASLD transactions.
 In March 2016, the Department sold a 409.93-acre property in northeast Phoenix for
$100,000,000, which was the highest-dollar land sale brought to public auction since
2007.
 In total for FY 2016, the Department sold 4 land parcels at public auction, totaling
$149,825,000 in value.
 ASLD auctioned a 30-year solar lease in Pinal County, valued at $5,229,000. In
addition to annual base rent, the lease will generate additional rent, based on
the megawatt capacity of the improvements.
 ASLD auctioned 145.84 acres of Trust land, classified as suitable for conservation, to the
City of Phoenix, for open space. That conservation sale generated more than $2,500,000
for the Trust.
 The Natural Resources Division generated $11,193,069 on agriculture, grazing and
mineral leases. Another $10,306,098 was generated from mineral royalties for the
Trust beneficiaries, and the Land Endowment Fund, in FY 2016.
Thank you for the opportunity to serve Arizona, the Trust beneficiaries and our customers.
The ASLD team will continue to make appreciable advancements of the interests of those we
serve.
Sincerely,
Lisa A. Atkins
Commissioner

4

ABOUT THE COMMISSIONER AND DEPUTY COMMISSIONER

Lisa A. Atkins
Commissioner
Arizona State Land Department

Wesley Mehl
Deputy Commissioner
Arizona State Land Department

Lisa A. Atkins was appointed by
Governor Douglas A. Ducey to serve as
Commissioner of the Arizona State Land
Department on June 15, 2015.

Wesley Mehl was appointed as the
Deputy Commissioner of the State Land
Department on July 2, 2015.
Wesley served as Vice President and
General Counsel of Town West Realty,
Inc., a real estate development company
in Tucson from 2011 to 2015, and was
previously in private legal practice.

As an Arizona native, Lisa combines a well
-rounded understanding of the State with
more than 40 years of experience in the
federal and State legislative and policy
arenas, focusing on land, water and
military issues.

Wesley graduated from the University of
Arizona with a B.A. in Political Science. He
obtained his law degree from Pepperdine
University, and an LL.M. in real
property law from the University of
Miami.

Lisa is well respected in the Arizona
community for her involvement in a
variety of organizations.
Among her
current community activities associated
with her duties as State Land
Commissioner, include Commissioner of
the Natural Resource Conservation
Districts and the State’s Cartographers
Office. Lisa also serves on the Military
Affairs Commission, The State Parks
Board, The Oil and Gas Conservation
Commission, and the Governor's Water
Augmentation Council.

Wesley serves on the Board of Directors
of Good News Communications, Inc., a
Christian radio broadcasting company.
Mr. Mehl was born and raised in Tucson,
Arizona. He and his wife, Elizabeth, and
their children live in Phoenix, Arizona.

Lisa is a graduate of the University of
Arizona. She and her husband John
reside in Phoenix, Arizona.

5

HISTORICAL OVERVIEW
LAND GRANT
Endowment of public lands for educational purposes was a practice established by the Northwest
Ordinance in 1787. Congress established the Territory of Arizona on February 24, 1863, and granted
sections 16 and 36 of each township across Arizona for the benefit of the Common Schools.
The Enabling Act, passed by State Congress on June 20, 1910, allowed for Arizona 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 more than two million additional acres were allocated for their use.

HISTORIC NOTE: The Land Ordinance of 1785 established the basis for the Public Land Survey

System. Under this system each western township contained six square miles of land which
was divided into 36 square mile lots. The Ordinance reserved lot 16 specifically to public
education.

CREATION OF THE LAND DEPARTMENT
On May 20, 1912, an act of the First Legislature of Arizona created the three-member State Land
Commission to serve as Arizona’s temporary Land Department. The members were Mulford
Winsor, Chairman; Cy Byrne, Secretary; and William A. Moody, member.
The Commission was charged with assessing, evaluating, and making recommendations about the
Trust land granted by Congress to the State. The Commission was to report back to the Legislature
with its findings and conclusions by the end of the second Legislative session.
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 Arizona State Land Department (ASLD) 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 ASLD authority over all Trust lands and
the natural products from Trust land.

6

HISTORICAL OVERVIEW
Original Endowment Pattern
Today, the original school section
pattern exists only in a few
locations such as the remote
Arizona Strip. About threequarters of the school section
acreage was relocated through
selections and exchanges that
have consolidated the Trust lands
into large blocks.

SELECTION OF INSTITUTIONAL LANDS
The Enabling Act required the Institutional Lands to be selected by a commission composed of the
Governor, Surveyor-General, and the Attorney General. In order to comply with the requirements of the
Enabling Act, the Legislature made the Chairman of the State Land Commission the Surveyor-General, a
power that the State Land Commissioner continues to hold today.
According to the 1914 Report of the State Land Commission, “every section of the State, regardless of
the remoteness or inaccessibility has been visited.” By 1914, 636,661 acres had been selected. Congress
granted an additional 50,000 acres of Institutional Lands for a Disabled Miners’ Hospital in 1929 and by
1930 all but about 35,000 Institutional acres had been selected. By 1967, Arizona had selected all of the
Institutional Lands granted. The Enabling Act stipulated that if any of the sections granted were mineral
lands, previously sold, reserved or otherwise appropriated by Congress, or if there were homesteads
present, the State would not receive that land, but would be allowed to reselect other land. These were
known as indemnity-lieu selections.

Since the ASLD’s inception, its mission has been to manage the assets of the multi generational
perpetual Land Trust, in a manner which maximizes its value and 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 or managed. 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. Today
the Arizona State Land Department actively manages 9.2 million acres of Trust land.

7

LAND MANAGEMENT IN ARIZONA

8

FISCAL YEAR 2016 TOTAL REVENUE

Natural Resources Rental

11,193,069

Commercial Leasing

32,783,789

Other Rental Receipts

4,806,351

Sales Total

94,455,440

Royalties Total

10,306,098

Other Misc.

3,557,705

Total Land Department Receipts

$ 157,102,454

Treasurer’s Formula Distribution

277,442,315

Grand Total

$ 434,544,769

Total Trust Revenue FY 2005-2016
$360,000,000
$310,000,000
$260,000,000
$210,000,000
$160,000,000
$110,000,000
$60,000,000
$10,000,000

Treasurer's Distribution

Land Department Earnings

9

PERMANENT AND EXPENDABLE FUNDS
ASLD G ENERATES

TWO TYPES OF REVENUE :

Permanent – Revenue earned from the sale of State Trust land or assets such as, minerals or other
natural products including royalties. This revenue is deposited into the appropriate beneficiary’s
Permanent Fund, which is administered by the State Treasurer. It is generally one time revenue.


ASLD deposited $101 million into the Permanent Funds in FY 2016.



Beneficiaries receive monthly distribution of investment earnings from the Treasurer, according to
the distribution formula defined in the Constitution.



In FY 2016, the combined value of the Permanent Funds exceeded $5.1 billion.



In FY 2016, the Treasurer distributed $277,442,316 of the investment earnings to the Trust
beneficiaries.

Expendable – Revenue from leases, permits, interest from sales contracts, and other revenue from
the non-permanent disposition of Trust assets. It is generally recurring revenue.


Expendable revenues are distributed directly to the beneficiaries monthly.



Expendable revenue, including the distribution formula from the Treasurer, totaled $312 million in
FY 2016.



ASLD generated $51,878,996.79 in expendable revenue in FY 2016.

10

FISCAL YEAR 2016 RECEIPTS
Permanent Receipts 2006-2016
$270,000,000.00

Receipts-Millions

$220,000,000.00

$170,000,000.00

$120,000,000.00

$70,000,000.00
2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2013

2014

2015

2016

Expendable Receipts 2006-2016
$120,000,000.00
$110,000,000.00
$100,000,000.00

Recei pts -Mi l l i ons

$90,000,000.00
$80,000,000.00
$70,000,000.00
$60,000,000.00
$50,000,000.00
$40,000,000.00
$30,000,000.00
2006

2007

2008

2009

2010
11

2011

2012

STATE TRUST LAND USES

SURFACE

NO. OF LEASES

Grazing
Use Permits
Rights of Way
Agriculture
Commercial
U.S. Government
Institutional Taking
Commercial School Leases

SUBSURFACE

TOTAL ACREAGE

% OF ACREAGE

1,191
655
7,673
342

11.51%
6.33%
74.15%
3.30%

8,329,280.41
462,859.39
198,487.24
153,779.31

90.08%
5.01%
2.15%
1.66%

295
157

2.86%
1.52%

69,397.43
18,268.68

0.75%
0.20%

10
21

0.10%
0.20%

12,891.56
1,142.93

0.14%
0.01%

3

0.03%

0.01

0.00%

10,347

100.00%

9,246,106.96*

100.00%

Recreational

Subtotal

% OF LEASES

NO. OF LEASES

% OF LEASES

TOTAL ACREAGE

% OF ACREAGE

Oil & Gas

450

40.87%

818,592.52

70.76%

Mineral Exploration
Mineral

578
55

52.50%
5.00%

306,224.30
30,229.56

26.47%
2.61%

18

1.63%

1,769.25

0.15%

1,101

100.00%

1,114,230.52

100.00%

Mineral Material

Subtotal
Total Leases

11,448

10,360,337.48

REVENUE GENERATION ON TRUST LAND
Leases and Permits/Revenue Production

Activity

Acres

Leases

Income

153,779.31
69,397.43
8,329,280.41

342
295
1,191

$4,402,721.57
$26,199,557.42
$3,404,424,.84

12,891.56

10

$420,578.56

198,487.24

7,673

$4,212,499.30

Use Permits
Mineral
Mineral Exploration
Mineral Material

18,268.68
462,859.39
30,229.56
306,224.30
1,769.25

157
655
55
578
18

$401,326.22
$5,762,327.03
$226,255.28
$1,552,053.13
$324,920.80

Oil & Gas

818,592.52

450

$1,282,693.45

Agriculture
Commercial
Grazing
Institutional Taking
Rights of Way
U.S. Government

*This acreage total may include multiple uses or instruments on the same parcel of land
12

STATE TRUST LAND IN EACH COUNTY

13

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 9.4 million acres of land. 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.

Grant
Common Schools (K-12) and County Bonds
University of Arizona (Act of 2/18/1881)
University Land Code
Normal Schools Grant
Agricultural & Mechanical Colleges
School of Mines Grant
Military Institutes Grant
State Charitable, Penal, and Reformatory
Miners' Hospital Grant
Penitentiary Grant
Legislative, Executive & Judicial Buildings
State Hospital Grant
School for the Deaf & Blind

Total

14

Acres

Acres as of
FY 2016

9,400,000
60,000
200,000
200,000
150,000
150,000
100,000
200,000
100,000
100,000
100,000
100,000
100,000

8,059,492
49,188
137,778
174,786
124,944
123,256
80,168
77,225
95,231
76,111
64,229
71,248
82,557

10,960,000

9,216,213

REVENUE BY BENEFICIARY
BENEFICIARIES

Common Schools

ASLD
EXPENDABLE

TREASURER'S
DISTRIBUTION

TOTAL
EXPENDABLE

PERMANENT
FUND RECEIPTS

TOTAL
RECEIPTS

$43,505,536.19

$259,266,200.00

$302,771,736.19

$98,177,124.67

$703,720,597.05

Normal Schools

$231,835.35

$256,640.00

$488,475.35

$157,135.47

$1,134,086.17

Agricultural & Mechanical
Colleges

$104,103.27

$695,221.00

$799,324.27

$6,012.25

$1,604,660.79

$69,533.59

$38,609.00

$108,142.59

School of Mines

$137,391.37

$785,961.00

$923,352.37

$51,139.33

$1,897,844.07

University Land Code

$974,799.98

$1,334,964.00

$2,309,763.98

$79,491.81

$4,699,019.77

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

$823,922.28

$3,868,238.00

$4,692,160.28

$824,950.35

$10,209,270.91

School for the Deaf & Blind

$227,393.65

$361,956.00

$589,349.65

$247,744.62

$1,426,443.92

$266,607,789.00 $312,682,304.68

$99,543,598.50

$724,908,207.86

Military Institutes

SUBTOTAL EDUCATION

State Hospital

$46,074,515.68

$216,285.18

$323,216.33

$431,065.00

$754,281.33

$272,530.05

$1,781,092.71

State Charitable, Penal &
Reformatory

$2,301,361.40

$7,628,265.00

$9,929,626.40

$227,950.82

$20,087,203.62

Penitentiaries

$1,300,760.21

$906,343.00

$2,207,103.21

$940,113.62

$5,354,320.04

$120,319.09

$566,887.00

$687,206.09

$16,514.87

$1,390,927.05

Miners' Hospital

$1,758,824.08

$1,301,965.00

$3,060,789.08

$478,025.67

$6,599,603.83

GRAND TOTAL

$51,878,996.79

$277,442,314.00 $329,321,310.79

$101,478,733.53

$760,121,355.11

Legislative, Executive &
Judicial Buildings




Expendable receipts include lease revenue from Trust land leases and permits, interest
from sales contracts, and the Treasurer’s formula distribution.
Permanent receipts are derived from the sale of State Trust land and natural products
and are deposited into the Permanent Fund by the State Treasurer.

15

FUND AND BENEFICIARY SUMMARY
Common Schools Public K-12 Education
Public education is the largest of the
thirteen beneficiaries owning
approximately 87% of the land in the
Trust and receiving close to 90% of the
revenue. Congress granted two sections
of each township to common schools
when Arizona became a Territory. The
State Enabling Act, passed on June 20,
1910, granted 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 because of the establishment
of federal forests, parks and Indian
reservations. The total original acreage
granted to common schools was
9,400,000 acres. Today, 8,008,496 acres
still remain in the Trust for common
schools.
In FY 2016, about $98 million from sales
and royalties was deposited into the
Permanent Fund for common schools.
In FY 2016, $302.7 million was
generated in expendable receipts.
According to Arizona State Statute § 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 is used for
teacher raises, classroom size reduction
and dropout prevention programs

COMMON SCHOOLS
Acres and Income FY 2016
SURFACE LEASES

Acres

Income

Type of Surface Lease
Agriculture
Commercial
Grazing
Rights of Way
Use Permits
Institutional Taking
U.S. Government
Other

Total Surface Leases

111,925
14,938
7,331,789
95,141
431,868
5,406
17,429
0

$3,213,060
$22,329,635
$2,918,384
$3,748,085
$4,149,103
$328,350
$392,526
$6,135

8,008,496

$37,085,278

29,890
286,111
1,015
702,871

$164,726
$1,518,252
$132,887
$1,144,114

1,019,887

$2,959,979

SUBSURFACE LEASES

Type of Subsurface Lease
Mineral
Prospecting Permit
Mineral Material
Oil & Gas

Total Subsurface Leases
NON-LEASE REVENUES

Type of Non-lease Revenue
Penalty & Interest
Sales Interest

Total Non-lease Revenue

$211,474
$3,247,806
$3,459,280

TREASURER'S FORMULA DISTRIBUTION
Formula Distribution
Total Treasurer’s Formula Distribution

$259,266,200

GRAND TOTAL EXPENDABLE

$302,770,736

ADDITIONAL ITEMS
Permanent Fund Receipts
Permanent Fund (Book)
Permanent Fund (Market)

16

$259,266,200

$98,177,125
$2,767,904,000
$4,805,967,000

FUND AND BENEFICIARY SUMMARY
Total University Grants
Arizona’s three universities (Arizona
State University, Northern Arizona
University, and the University of
Arizona) are the beneficiaries of six
Trust grants. In 1912, the total
granted acreage was 860,000. As of
the end of FY 2016, all six (6)
university grants hold 690,119 acres.
The total expendable revenue
distributed to the Board of Regents,
and then to the universities to fund
their operations, was $9.3 million in
FY 2016.
An additional $1.1 million was
earned and added to the Permanent
Funds for the six grants, bringing the
total Permanent Fund balance to
$87.5 million.

UNIVERSITY GRANTS
Acres and Income FY 2016
SURFACE LEASES

Acres

Income

Type of Surface Lease
Agriculture
Commercial
Grazing
Rights of Way
Use Permits
Institutional Taking
U.S. Government
Other

Total Surface Leases

12,332
51,462
594,716
8,260
26,160
5,151
299
0

$189,285
$638,925
$282,531
$232,967
$461,303
$1,051
$8,800
$339,963

698,379

$2,154,824

9,227
284
79,371

$13,437
$63,793
$100,732

88,882

$177,963

SUBSURFACE LEASES

Type of Subsurface Lease

BOARD OF REGENTS
DISTRIBUTION OF TRUST REVENUES
TO UNIVERSITIES
AGRICULTURAL & MECHANICAL
COLLEGES GRANT
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 GRANT
Split between the three universities
based on credit hours
NORMAL SCHOOLS GRANT
1/3 to each university
UA 1881 GRANTS
UA
SCHOOL OF MINES GRANT
UA

Prospecting Permit
Mineral Material
Oil & Gas

Total Subsurface Leases
NON-LEASE REVENUES

Type of Non-lease Revenue
Penalty & Interest

$8,800

Total Non Lease Revenue

$8,800

TREASURER'S FORMULA DISTRIBUTION
Formula Distribution

$6,979,633

Total Treasurer’s Formula Distribution

$6,979,633

GRAND TOTAL EXPENDABLE
ADDITIONAL ITEMS
Permanent Fund Receipts
Permanent Fund (Book)
Permanent Fund (Market)

17

$ 9,321,219

$

1,118,729

$ 87,535,000
$146,926,000

FUND AND BENEFICIARY SUMMARY
UNIVERSITY GRANTS- FISCAL YEAR 2016
A&M Colleges
Surface Leases Acres
Agriculture

Income

Military
Institutes

Normal Schools School of Mines

Acres Income Acres

Income

Acres

Income

251

$3,442.45

10,173

$9,161.79

107,163

$51,307.50

Rights of Way

1,852

$-2,021.84

268

$1,876.55

1,684

$49,752.22

1,120

$-14,470.24

Use Permits

5,705

$14,745.64

3,486

$4,200.00

5,231

$7,197.31

2,881

$7,554.85

Institutional Taking

1,917

$0.00

2,721

$0.00

86

$0.00

184

$8,800.05

Commercial
Grazing

U.S. Government

1,677

$2,400.00

University Land
Code
Acres

Income

Acres

Income

165

$3,694.85

1,805

$34,646.65

3,233

$51,401.82

6,879

$96,098.92

22,546

$46,254.62

8,485

$42,218.55

8,274

$392,313.47

307

$146,576.36

$43,106.58 117,859

$60,063.00

33,923

$12,365.71

2,528

$67,137.86

809

$130,692.31

6,246

$379,073.62

2,610

$48,531.67

107

$1,050.65

406

$0.00

8

$0.00

4

$0.00

0

$339,962.81

44,938

$774,227.78

164

$43,200.00

164

$43,200.00

77,709 $46,847.18 146,654

$68,840.72 111,409

17

$0.00

Other
Total Surface

University of
Arizona 1881

127,146

$76,635.54

83,140 $55,323.73 179,185

$184,539.77 125,716

$113,056.39 138,254

$951,040.42

120

$119.50

7,762

$12,543.14

0

$10,033.00

120

$10,560.09

Oil & Gas

20,048

$16,847.58

14,201 $14,201.29

17,372

$23,748.63

13,501

$23,628.14

14,249

$22,306.70

Total Subsurface

20,168

$27,000.08

14,201 $14,201.29

25,254

$46,851.86

14,772

$23,628.14

14,324

$23,081.31

$467.65

$8.57

$443.72

$706.84

$678.25

$6,494.50

$695,221.00

$38,609.00

$256,640.00

$785,961.00

$1,334,964.00

$3,868,238.00

$799,324.27

97,341 $108,142.59 204,438

$488,475.35 140,487

$923,352.37 152,578 $2,309,763.98

Subsurface Leases
Mineral
Prospecting Permit
Mineral Material

Penalty & Interest
Treasurer's Formula
Distribution
Grand Total
Expendable

147,314

Permanent Fund
Receipts

$6,012.25

Permanent Fund
Balance (Book)

$6,293,000.00

Permanent Fund
Balance (Mrkt)

$12,422,000.00

1,271

$0.00

74

$774.61

45,102

$4,692,160.28

$157,135.47

$51,139.33

$79,491.81

$824,950.35

$340,000.00

$2,958,000.00

$7,524,000.00

$14,285,000.00

$56,135,000.00

$672,000.00

$5,245,000.00

$14,099,000.00

$25,693,000.00

$88,795,000.00

18

FUND AND BENEFICIARY SUMMARY
Institutional Grants
The remaining six Trust beneficiaries
are the School for the Deaf and
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 to receive 100,000 acres
each, except for the State Charitable
Grant which received 200,000 acres.


The Pioneers’ Home received a
total of $4,886,939 in expendable
receipts in FY 2016.



The Department of Juvenile
Corrections received $1,452,469
in expendable receipts in FY
2016.



The Department of Corrections
received a total of $2,834,985 in
expendable receipts in FY 2016.

OTHER GRANTS
Acres and Income FY 2016
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)

The Arizona State Schools for the Deaf and the Blind (ASDB) was
founded in 1912. Currently, ASDB assists over 2,000 children who
are blind and/or deaf from birth to grade 12. ASDB operates two
schools for the deaf, one school for the blind, and a statewide early
childhood and family education program.
In FY 16, ASDB received $227,393 in expendable revenue.

ARIZONA STATE EXECUTIVE AND JUDICIAL BUILDINGS

ARIZONA DEPARTMENT OF JUVENILE CORRECTIONS

In FY16, Arizona buildings received $120,319 in
expendable revenue. Originally the State was
granted 100,000 acres of which 64,229 are still held
by the state in FY16.

The Arizona Department of Juvenile
Corrections (ADJC) manages and
secures juvenile correctional
facilities and administers programs
to help educate and rehabilitate
juveniles.
Arizona Juvenile Corrections receives
25% of the revenue generated by the
State Charitable, Penal &
Reformatory land grant. In FY16,
Arizona Juvenile Corrections earned
$575,340 million in expendable
revenue from this grant.

Arizona State Legislature

(Photo courtesy of Azleg.gov)

19

Maricopa Reentry Center located in
Phoenix, AZ .

(Photo courtesy of the Arizona
Department of Juvenile Corrections )

FUND AND BENEFICIARY SUMMARY
Institutional Grants
ARIZONA DEPARTMENT OF CORRECTIONS

OTHER GRANTS

The Arizona Department of Corrections (ADOC) is
responsible for securely incarcerating convicted felons
and managing programs to successfully reintegrate
inmates into the community. ADOC also provides
supervision for conditionally released prisoners.
In FY16, State Penitentiaries received $2.2 million in
expendable revenue. In addition, State Penitentiaries
receives 50% of the revenue generated by the State
Charitable, Penal & Reformatory land grant. In FY16,
State Penitentiaries received $4.9 million in expendable
revenue from this grant.

Acres and Income FY 2016
ARIZONA STATE HOSPITAL
Arizona State Hospital (ASH) in Phoenix, AZ provides a full
continuum of psychiatric and
medical care. ASH facilities
include about 300 beds and
specialized services for adult
and adolescent patients.
In FY16, the state hospital
received $754,281 in
expendable revenue.

Arizona State Hospital
(Photo courtesy of abc15.com)

AZ Department of Corrections located in Phoenix, AZ.
(Photo courtesy of Phoenix New Times)

ARIZONA PIONEERS’ HOME
The Arizona Pioneers’ Home is
a continuing care retirement
home. The Home provides care
and services to residents living
independently or those
requiring personal, assisted
living or intermediate and
skilled care.
In FY16, the pioneers’ home
received $3.06 million in
expendable revenue.
The Arizona Pioneers’ Home is
one of three agencies that
receives additional revenue
from the State Charitable,
Arizona Pioneers’ Home
Penal
& Reformatory land
(Photo courtesy of the Arizona Pioneers’ Home)
grant. In FY16, the Pioneers’
Home received $2.48 million in expendable revenue which amounts to 25% of the revenue generated by this
grant.
20

FUND AND BENEFICIARY SUMMARY
INSTITUTIONAL GRANTS FISCAL YEAR 2016
Legislative,
Executive, &
Judicial Buildings
Surface Leases
Agriculture

Acres Income

Miners’
Hospital

Penitentiaries

Acres Income

1,315

22,167.02

5

43,920.00

56,406

29,914.60

73,322

Rights of Way

1,477

22,598.45

Use Permits

4,227

Acres Income

State Charitable,
Penal, &
Reformatory
Acres Income

State Hospital

Acres Income

433,696.45

4,717

252,716.88

2,636

74,086.04

3,898

114,863.30

3,981

94,997.69

609 1,139,861.05

458

773,176.95

55

95,219.09

2,835

963,905.53

135

138,103.32

36,273.06

66,025

33,435.29

74,618

31,039.32 62,941

38,032.38 60,003

33,124.49

1,839

64,801.22

587

83,887.15

1,068

-4,951.66

1,148

51,555.69

956

-2,447.82

1,217.10

11,066

36,841.56

5,735

142,356.03

8,385

15,210.92

7,567

897,622.85

7,167

20,240.72

0

0.00

1

992.69

1,778

0.00

1

1,255.06

475

76,928.50

80

12,001.32

U.S. Government

92

0.00

168

0.00

5

0.00

32

0.00

117

0.00

108

0.00

Other

0

0.00

0

0.00

0

0.00

0

0.00

0

0.00

0

321.00

63,522

116,817.17

79,304 1,285,572.30

86,795

2,142,908.25 72,430

296,340.72

0

0.00

119

429.06

0

0.00

0

0.00

160

60,500.00

60

600.00

1,525

885.14

4,418

4,947.62

3,270

2,629.60

1,042

4,288.58

0

0.00

903

7,613.28

0

0.00

230

20,239.91

0

0.00

0

0.00

138

88,000.32

77

11,000.00

Oil & Gas

2,726

2,136.04

9,217

8,897.35

6,720

6,720.41

9,568

10,687.71

7,479

8,747.60

641

658.34

Total Subsurface

4,250

3,021.18

13,714

34,513.94

9,990

9,350.01

10,610

14,976.29

7,777

157,247.92

1,680

19,871.62

Commercial
Grazing

Institutional Taking

Total Surface

12,866

Acres Income

School for the
Deaf & Blind

99,872 1,712,466.03

211,858.77 78,982

Subsurface Leases
Mineral
Prospecting Permit
Mineral Material

Penalty & Interest
Treasurer's Formula
Distribution
Grand Total
Expendable

66,772

480.74

11,844.11

5,837.90

558.59

1,205.23

7,003.99

566,887.00

1,301,965.00

906,343.00

361,956.00

7,628,265.00

431,065.00

589,349.65 86,759

9,929,626.40 74,110

754,281.33

687,206.09 113,586 3,060,789.08 204,438 1,557,400.21

97,405

Permanent Fund
Receipts

16,514.87

478,025.67

940,113.62

247,744.62

227,950.82

272,530.05

Permanent Fund
Balance (Book)

5.398,000.00

18,167,000.00

11,738,000.00

3,774,000.00

76,845,000.00

4,535,000.00

Permanent Fund
Balance (Mrkt)

10,257,000.00

28,978,000.00

19,669,000.00

6.924,000.00

139,620,000.00

8,404,000.00

21

ABOUT THE
LAND
DEPARTMENT
Divisions and Sections
REAL ESTATE
The Real Estate Division is made up of four Sections: Appraisal, Planning and Engineering, Rights of Way, and
Sales and Commercial Leasing. The Appraisal Section is tasked with the responsibility of determining land
value for the Trust’s land holdings. The Planning & Engineering Section handles land planning, entitlement,
drainage and engineering issues impacting State Trust land throughout Arizona.
A Right of Way is an encumbrance on the property it crosses. Rights of Way are granted across State Trust
land for a variety of public and private uses, such as access roads, infrastructure, power lines, communication
lines, and public roadways.
The Sales and Commercial Leasing Section processes Special Land Use Permits (SLUP’s), commercial leases,
and sales of State Trust land. The section not only processes new applications, it also administers active
leases that generate ongoing revenue for the Trust Beneficiaries.

FISCAL YEAR 2016 UPDATES
In February 2016, the Department auctioned 145.84 acres of Trust land, classified as suitable for conservation,
to the City of Phoenix, for open space. That conservation sale generated more than $2,500,000 for the Trust.
In March 2016, the Department sold property in northeast Phoenix for $100,000,000, which was the highestdollar land sale brought to public auction since 2007. The Department also auctioned a 30-year solar lease in
Pinal County, valued at $5,229,000. In addition to annual base rent, the lease will generate additional rent,
based on the megawatt capacity of the improvements.

NATURAL RESOURCES
The Natural Resources Division administers all natural resource-related leases, Conservation Districts and any
natural resource issue affecting State Trust land. Leasing categories include grazing, agriculture, mineral,
mineral material, exploration, and apiary. Other administrative areas include, mineral material sales, water
rights administration, dam safety, trespass, recreation permits, environmental contamination, and cultural
resources. The Field Services Section oversees agriculture and grazing leases on Trust Land, which generate
roughly $7,000,000 in revenue each year from lease rental payments. The Environmental Program is
responsible for protection of soil, surface and groundwater, and air quality on State Trust land. The Trespass
Program is responsible for investigating reports of illegal occupancy of Trust land ranging from minor to
major offenses. Most involve native plant damage or theft, mineral theft, roads or utilities placed without a
right-of-way, and commercial or agricultural trespass.
The Minerals Section primarily supports five State-wide permitting and leasing programs including: mineral
exploration permits, mineral leases for hardrock and industrial minerals mining, mineral materials
leases for common variety sand and gravel or aggregates, energy minerals leases for oil and gas or
geothermal resources and special land use permits for split estate operations with ASLD Surface only.
Continued on page 23

22

ABOUT THE LAND DEPARTMENT
Divisions and Sections
NATURAL RESOURCES
MIN ERALS SECTION - FY 2016
S UMMARY OF P ERMITS , L EASES AND R EVENUE
Rental
KE (Kind of Entry)
No.

Permits and Leases
Number

Royalty

Total

Income

Income

Income

($)

($)

($)

1,836,857

2,161,778

Acres

Mineral Material Leases

04

18

1,769

324,921

Exploration Permits

08

578

306,224

1,552,053

Mineral Leases

11

55

30,230

226,255

Oil and Gas Leases
Mineral SLUPs

13
23
24

818,593
47,637
13

1,282,693
354,494

Incidental Sales
Total

450
90
1
1,192

1,204,466

$3,740,417

FISCAL YEAR 2016 UPDATES
In what is the most note-worthy development for the
Mineral Section in FY 2016, Ranger Development LLC
(Ranger) of Dallas completed a helium well on State
Trust land on June 10, 2016, and brought the well online on June 28, 2016. This represents the first oil and
gas production on State Trust land since 1972! On
August 25, 2016, the Trust received its first royalty
payment from oil and gas production in more than 40
years

Permits Available for Recreation on State Trust
Land: Arizona State Trust lands are not public
lands such as National Parks or Federal Forests.
Any use of State Trust land requires a permit
from the Arizona State Land Department with a
few exceptions. Permits are available in several
formats, including online, to accommodate individual, family and group needs.

23

1,552,053
2,805,595

3,031,851

130,790

1,282,693
354,494
130,790

$4,773,242

$8,513,659

24

ABOUT THE LAND DEPARTMENT
Divisions and Sections
ADMINISTRATION
The Administrative Division consists of four Sections: Accounting, Budget and Procurement, Titles and
Contracts and Administrative Procedures and Information (public records). The Accounting section’s primary
purpose is to properly bill, receive, and distribute Trust receipts. The section also processes the Department’s
expenditures. The Budget & Procurement unit is responsible for the development and monitoring of the
Department’s budget and procurement activities. Administrative Procedures Section schedules hearings
related to appeals of Commissioner Decisions, either with the Office of Administrative Hearings or the Board
of Appeals. This Section also handles public records and assists and instructs the public and Department
staff, in the research of computer records, interpretation of title documentation, and lease/permit files. Title
& Contracts ensures that electronic and paper records for the State’s title to 9.2 million acres of Trust land
accurately reflect each acquisition, disposition, lease, permit and right of way that has been executed or
granted.

FISCAL YEAR 2016 UPDATES
In Fiscal Year 2016, Arizona State Land Department began selling individual and family recreation permits
online. This has dramatically increased the number of recreation permits and revenue derived from
recreational permit activities. Arizona State Lands has also been hard at work adapting and implementing
the Arizona Management System (AMS). The system is based on principles of Lean management, and has
already begun to radically change how Arizona government thinks and does business as one cohesive
statewide enterprise. The Department will continue to learn to use standard methods and techniques for data
driven decision-making and disciplined problem solving.

INFORMATION SYSTEMS AND RESOURCE ANALYSIS
The Information Systems and Resource Analysis Division has three different Sections: Information Technology,
GIS, and the State Cartographer Office (SCO). The Information Technology Section provides support for the
development and management of the Department’s information technology resources. The Section develops
and manages the Department’s computer network including its data communications, servers, and data
storage systems. The GIS Section develops and manages the Department’s enterprise GIS system which
includes user access software and an extensive GIS data base used in the system. GIS also provides user
training and technical support for the use of GIS in managing the State Trust Lands. The SCO was created by
the Legislature to provide the framework for a coordinated development of GIS technology in Arizona through
the development of standards, facilitation of cooperative efforts, and improvement of access to geo-spatial
databases.

25

RENTAL ACREAGE AND RECEIPTS
FISCAL YEAR 2016
SURFACE LEASES
Agriculture
Commercial
Grazing
Rights-of-Way
Use Permits
Institutional Taking
U.S. Government
Other
TOTAL SURFACE
SUBSURFACE LEASES
Mineral
Prospecting Permit
Mineral Material
Oil & Gas
TOTAL SUBSURFACE

Acres
153,779
70,540
8,329,280
110,611
502,393
12,892
18,269
0

Receipts
$4,402,721.57
$26,199,557.42
$3,404,424.84
$4,212,499.30
$5,762,327.03
$420,578.56
$401,326.22
$346,418.81

9,197,764

$45,149,853.75

Acres
30,230
306,224
1,769
818,593

Receipts
$226,255.28
$1,552,053.13
$ 324,920.80
$1,282,693.45

1,156,816

$3,385,922.66

NON-LEASE REVENUES
Penalty & Interest
Sales Interest
Royalty
Land Sales Principal
Rights-of-Way Sales Principal
Fees
TOTAL NON-LEASE REVENUE

Receipts
$247,433.41
$3,247,805.60
$10,306,098.74
$77,096,386.79
$14,111,248.00
$3,557,705.25
$108,566,677.79

GRAND TOTAL

$157,102,454.20

26

FINANCIAL SCHEDULES
Receipts by Category– Fiscal Year 2016
LEASE
RENTAL
A&M Colleges
Common Schools
Leg., Exec & Judicial
Military Institutes
Miners' Hospital*
Normal Schools
Penitentiaries
School for the Deaf &
Blind
School of Mines
St Char., Pen. & Ref
State Hospital
U of A (Act of
2/18/1881)
University Land Code
Total School &
Institutions
F.E.M.A. Lands
Farm Loan Lands
Fees: Lease, Sale &
Misc.
Lands Held in Trust
Navigable Streambeds
General Fund

TOTAL RECEIPTS

OTHER
RECEIPTS

103,635.62
40,046,256.68
119,838.35
69,525.02
1,746,979.97
231,391.63
1,294,922.31
226,835.06
136,684.53
2,300,156.17
316,212.34
817,427.78
974,121.73
48,383,987.19

22,492.00
5,291.39
11,214.17
112,791.66
151,789.22

PENALTY &
INTEREST
-

3,557,705.25
3,557,705.25

SALES
INTEREST

ROYALTY

467.65

6,012.25

211,473.91

9,169,788.24

480.74

16,514.87

8.57

-

11,844.11

221,220.26

443.72

157,085.30

5,837.90

84,721.62

558.59

30,340.62

706.84

51,046.30

1,205.23

227,950.82

7,003.99

120,044.97

6,494.50

107,117.63

678.25

79,255.86

247,204.00

10,271,098.74

-

35,000.00

26.29
203.12
229.41

SALES
PRINCIPAL

TOTAL

-

-

3,247,805.60

89,007,336.43

-

-

-

-

-

110,115.52
141,682,660.86
136,833.96
69,533.59

256,805.41

2,236,849.75

50.17

388,970.82

855,392.00

2,240,873.83

217,404.00

475,138.27

93.03

188,530.70

-

2,529,312.22

152,485.08

595,746.38

717,832.72

1,648,872.63

235.95

1,054,291.79

3,247,805.60

91,207,634.79

153,357,730.32

-

-

-

-

-

-

-

-

-

-

-

-

-

-

35,000.00

-

-

-

57,492.00
5,317.68
3,557,705.25
11,214.17
112,994.78
3,744,723.88

$48,535,776.41 $ 3,557,705.25 $ 247,433.41 $ 10,306,098.74 $ 3,247,805.60 $ 91,207,634.79 $157,102,454.20

*Miners' Hospital & Miners' Hospital 1929 Combined - Common Schools (K-12) Including County Bonds

27

FINANCIAL SCHEDULES
Treasurer’s Fiscal Year 2016 Formula Distribution
BENEFICIARY
Common Schools
Normal Schools ASU/NAU
Agricultural & Mechanical Colleges
Military Institutes
School of Mines
University Land Code
University of Arizona (Act of 2/18/1881)
School for the Deaf & Blind
Legislative, Executive & Judicial Buildings
State Hospital
Miners' Hospital
State Charitable, Penal & Reformatory
Penitentiaries

TOTALS

FY ENDING
JUNE 30, 2015
75,984,425
82,066

FY ENDING
JUNE 30, 2016
259,266,200
256,640

INCREASE
<DECREASE>
183,281,775
174,574

MAY 12, 1912
TO DATE
1,705,819,299
3,073,093

227,961

695,221

467,260

10,112,292

12,784
257,994
429,026
1,129,225
116,300
185,230
138,412
388,978
2,494,572
282,456

38,609
785,961
1,334,964
3,868,238
361,956
566,887
431,065
1,301,965
7,628,265
906,343

25,825
527,967
905,938
2,739,013
245,656
381,657
292,653
912,987
5,133,693
623,887

1,299,690
2,823,376
14,171,837
30,912,363
5,264,380
8,511,221
4,466,054
9,523,158
43,957,274
6,529,276

$81,729,429 $277,442,314 $195,712,885 $1,846,463,313

28

1616 West Adams ● Phoenix, Arizona 85007
www.azland.gov