 |
ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
trust land fund monies; distributions
Purpose
Requires the State Treasurer to make distributions to land beneficiaries from the State Land Trust (Trust) on or before the last business day of each month, rather than the 15th business day of each month.
Background
The Arizona Constitution requires all state lands expressly transferred to the state by the federal government in the Enabling Act and all lands acquired by the state to be held in trust for specified beneficiaries (Ariz. Const. art. 10 § 1). The 13 beneficiaries of the Trust are: 1) common schools (K-12); 2) agricultural and mechanical colleges; 3) military institutes; 4) University Land Code; 5) normal schools; 6) the University of Arizona; 7) the School of Mines; 8) state charitable, penal and reformatory institutions; 9) the Miners' Hospital; 10) penitentiaries; 11) legislative, executive and judicial buildings; 12) the Arizona State Hospital; and 13) the School for the Deaf and Blind. The largest beneficiary of the Trust is public K-12 education, which owns 87 percent of the land and receives approximately 90 percent of the revenue (SLD Annual Report).
The State Treasurer manages a separate Permanent Land Endowment Trust Fund (Permanent Fund) for each of the beneficiaries of the Trust. Proceeds derived from the sale of any Trust land is deposited into the appropriate beneficiaries' Permanent Funds to be invested by the State Treasurer in safe interest-bearing securities and prudent equity-securities. The State Board of Investment (Board) provides for the management of the assets of the Permanent Funds and ensures that no more than 60 percent are invested in equities at any one time. The earnings, interest, dividends and capital gains and losses from investment of each Permanent Fund are credited to that Permanent Fund by the State Treasurer.
The 13 beneficiaries of the Trust receive monthly distributions of investment earnings from the State Treasurer. The distribution to the beneficiaries from each Permanent Fund in FY 2016 through FY 2025 is 6.9 percent of the average monthly market values of the Permanent Fund for the preceding five years (Ariz. Const. art. 10 § 7). The Board and State Treasurer are required to make distributions pursuant to this formula to each Permeant Fund on the 15th business day of each month (A.R.S. § 35-319).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires the Board and State Treasurer to distribute monies from each Permanent Fund to the beneficiaries on or before the last business day of each month, rather than on the 15th business day of each month.
2. Becomes effective on the general effective date.
Prepared by Senate Research
January 31, 2019
MH/kja