The Legislature will have to find another way to fund the Arizona Land Department.
In a story broken today by the Yellow Sheet Report, the state failed to convince the Arizona Supreme Court to overturn the lower courts’ decision striking down a 2009 law that permitted the department to deposit up to 10 percent of proceeds from the trust lands into a newly created management fund.
In FY10, $9.8 million was diverted to the management fund and appropriated to the Land Dept. In FY11, $10.5 million was deposited into the management fund to pay for the department’s operations.
In its decision, the Supreme Court said Article 10 of the Constitution does not permit diversion of proceeds from trust lands to pay for their management.. The court noted the U.S. Supreme Court held long ago that the Enabling Act of 1910 precluded New Mexico from using trust land proceeds to promote that state and its resources.
their management, the court said.
The court also rejected the state’s argument that the Enabling Act and the Arizona Constitution are silent on how to pay for the management of the trust lands.
The court upheld the lower court ruling striking down the law and requiring that the department refund money diverted from the trust funds.
