[House Report 106-140]
[From the U.S. Government Publishing Office]
106th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 106-140
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ARIZONA STATEHOOD AND ENABLING ACT AMENDMENTS OF 1999
_______
May 13, 1999.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Young of Alaska, from the Committee on Resources, submitted the
following
R E P O R T
[To accompany H.R. 747]
[Including cost estimate of the Congressional Budget Office]
The Committee on Resources, to whom was referred the bill
(H.R. 747) to protect the permanent trust funds of the State of
Arizona from erosion due to inflation and modify the basis on
which distributions are made from those funds, having
considered the same, report favorably thereon without amendment
and recommend that the bill do pass.
Purpose of the Bill
The purpose of H.R. 747 is to protect the permanent trust
funds of the State of Arizona from erosion due to inflation and
modify the basis on which distributions are made from those
funds.
Background and Need for Legislation
Under the Enabling Act of 1910, the State of Arizona
receives revenues generated from lands that were granted to the
State upon admission to the Union. After deposit in several
existing trust Funds, these revenues contribute funding for
public schools, state colleges and universities, and other
public institutions.
As currently provided for in the original Enabling Act, the
Funds must pay out all of their income, with ``income''
interpreted as all interest and dividends received. This
creates a problem because it does not account for and adjust to
rates of inflation. Inflation has averaged approximately 4.5%
over the past 50 years and the income generated from the Funds
has grown at less than the rate of inflation. To account for
inflation, a portion of the interest should be retained and
reinvested to fuel future income growth.
Further, the current Enabling Act has a number of stringent
investment restrictions. While these restrictions may have been
appropriate at one time, they are outdated and are no longer
advisable. The restrictions have severely limited the potential
of the Funds to earn high returns and have also limited their
ability to reduce risk through investment diversification.
To make the necessary changes to allow the State trust
Funds to be managed differently, it is necessary for Congress
to approve of the changes as well as amend the Arizona Enabling
Act.
Committee Action
H.R. 747 was introduced on February 11, 1999, by
Congressman Bob Stump (R-AZ). The bill was referred to the
Committee on Resources, and within the Committee to the
Subcommittee on National Parks and Public Lands. On April 29,
1999, the Subcommittee met to mark up the bill. No amendments
were offered. The bill was then ordered favorably reported to
the Full Committee by voice vote. On May 5, 1999, the Full
Resources Committee met to consider the bill. No amendments
were offered and the bill was then ordered favorably reported
to the House of Representatives by voice vote.
Committee Oversight Findings and Recommendations
Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII of the Rules of the House of Representatives, the
Committee on Resources' oversight findings and recommendations
are reflected in the body of this report.
Constitutional Authority Statement
Article I, section 8 and Article IV, section 3 of the
Constitution of the United States grant Congress the authority
to enact this bill.
Compliance With House Rule XIII
1. Cost of Legislation.--Clause 3(d)(2) of rule XIII of the
Rules of the House of Representatives requires an estimate and
a comparison by the Committee of the costs which would be
incurred in carrying out this bill. However, clause 3(d)(3)(B)
of that rule provides that this requirement does not apply when
the Committee has included in its report a timely submitted
cost estimate of the bill prepared by the Director of the
Congressional Budget Office under section 402 of the
Congressional Budget Act of 1974.
2. Congressional Budget Act.--As required by clause 3(c)(2)
of rule XIII of the Rules of the House of Representatives and
section 308(a) of the Congressional Budget Act of 1974, this
bill does not contain any new budget authority, spending
authority, credit authority, or an increase or decrease in
revenues or tax expenditures.
3. Government Reform Oversight Findings.--Under clause
3(c)(4) of rule XIII of the Rules of the House of
Representatives, the Committee has received no report of
oversight findings and recommendations from the Committee on
Government Reform on this bill.
4. Congressional Budget Office Cost Estimate.--Under clause
3(c)(3) of rule XIII of the Rules of the House of
Representatives and section 403 of the Congressional Budget Act
of 1974, the Committee has received the following cost estimate
for this bill from the Director of the Congressional Budget
Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, May 11, 1999.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 747, the Arizona
Statehood and Enabling Act Amendments of 1999.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Marjorie A.
Miller (for the state and local impact) and Victoria Heid Hall
(for federal costs).
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
congressional budget office cost estimate
H.R. 747--Arizona Statehood and Enabling Act Amendments of 1999
H.R. 747 would amend the Arizona Statehood and Enabling Act
of 1910 and would consent to amendments to the constitution of
the state of Arizona approved by the voters on November 3,
1998. These amendments generally concern the administration of
the state's permanent trust funds. Congressional consent to the
amendments to the constitution of the state of Arizona is
required before they can be implemented by the state
government.
CBO estimates that enacting H.R. 747 would have no effect
on the federal budget. Because the bill would not affect direct
spending or receipts, pay-as-you-go procedures would not apply.
H.R. 747 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would impose no costs on state, local, or tribal governments.
Enactment of this bill would give Arizona state officials
greater flexibility in investing and distributing the assets of
the state's permanent funds.
The estimate was prepared by Marjorie A. Miller (for the
state and local impact) and Victoria Heid Hall (for federal
costs). This estimate was approved by Paul N. Van de Water,
Assistant Director for Budget Analysis.
Compliance With Public Law 104-4
This bill contains no unfunded mandates.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
ACT OF JUNE 20, 1910
CHAP. 310.--An Act To enable the people of New Mexico to form a
constitution and state government and be admitted into the Union on an
equal footing with the original States; and to enable the people of
Arizona to form a constitution and state government and be admitted
into the Union on an equal footing with the original States.
* * * * * * *
Sec. 25. That in lieu of the grant of land for purposes of
internal improvements made to new States by the eighth section
of the Act of September fourth, eighteen hundred and forty-one,
and in lieu of the swamp-land grant made by the Act of
September twenty-eighth, eighteen hundred and fifty, and
section twenty-four hundred and seventy-nine of the Revised
Statutes, and in lieu of the grant of thirty thousand acres for
each Senator and Representative in Congress, made by the Act of
July second, eighteen hundred and three, which grants are
hereby declared not to extend to the said State, the following
grants are hereby made, to wit:
For university purposes, two hundred thousand acres; for
legislative, executive, and judicial public buildings
heretofore erected in said Territory or to be hereafter erected
in the proposed State, and for the payment of the bonds
heretofore or hereafter issued therefor, one hundred thousand
acres; for penitentiaries, one hundred thousand acres; for
insane asylums, one hundred thousand acres; for school and
asylums for the deaf, dumb, and the blind, one hundred thousand
acres; for miners' hospitals for disabled miners, fifty
thousand acres; for normal schools, two hundred thousand acres;
for state charitable, penal, and reformatory institutions, one
hundred thousand acres; for agricultural and mechanical
colleges, one hundred and fifty thousand acres; and the
national appropriation heretofore annually paid for the
agricultural and mechanical college to said Territory shall,
until further order of Congress, continue to be paid to said
State for the use of said institution; for school of mines, one
hundred and fifty thousand acres; for military institutes, one
hundred thousand acres; and for the payment of the bonds and
accrued interest thereon issued by Maricopia, Pima, Yavapai,
and Coconino counties, Arizona, which said bonds were
validated, approved, and confirmed by the Act of Congress of
June sixth, eighteen hundred and ninety-six (Twenty-ninth
Statutes, page two hundred and sixty-two), one million acres:
Provided, That if there shall remain any of the one million
acres of land so granted, or of the proceeds of the sale or
lease thereof, or rents, issues, or other profits therefrom,
after the payment of said debts, such remainder of lands and
the proceeds of sales thereof shall be added to and become a
part of the permanent school fund of said State, [the income
therefrom only to be used] distributions from which shall be
made in accordance with the first paragraph of section 28 and
shall be used for the maintenance of the common schools of said
State.
* * * * * * *
Sec. 27. That five per centum of the proceeds of sales of
public lands lying within said State which shall be sold by the
United States subsequent to the admission of said State into
the Union, after deducting all the expenses incident to such
sales, shall be paid to the said State to be used as a
permanent inviolable fund, [the interest of which only shall be
expended] distributions from which shall be made in accordance
with the first paragraph of section 28 and shall be expended
for the support of the common schools within said State.
Sec. 28. That it is hereby declared that all lands hereby
granted, including those which, having been heretofore granted
to the said Territory, are hereby expressly transferred and
confirmed to the said State, shall be by the said State held in
trust, to be disposed of in whole or in part only in manner as
herein provided and for the several objects specified in the
respective granting and confirmatory provisions, and that the
natural products and money proceeds of any of said lands shall
be subject to the same trusts as the lands producing the same.
The trust funds (including all interest, dividends, other
income, and appreciation in the market value of assets of the
funds) shall be prudently invested on a total rate of return
basis. Distributions from the trust funds shall be made as
provided in Article 10, Section 7 of the Constitution of the
State of Arizona.
Disposition of any of said lands, or of any money or thing of
value directly or indirectly derived therefrom, for any object
other than for which such particular lands, or the lands from
which such money or thing of value shall have been derived,
were granted or confirmed, or in any manner contrary to the
provisions of this Act, shall be deemed a breach of trust,
except that amounts in the Miners' Hospital Endowment Fund may
be used for the benefit of the Arizona Pioneers' Home.
* * * * * * *