What does Trust Lands Do?
What does Trust Lands do?
The Trust Lands Administration is legally obligated to manage trust lands to optimize the financial return for Utah's schools and the other 11 beneficiaries. There are only two ways to make money from real estate - rent it or sell it. Trust Lands does both.
Land Sales Income
The sale of undeveloped land is usually at a public auction to the highest bidder. The minimum acceptable bid, which, by law, must be at least fair-market value.
The sale of developed land is also part of Land Sales Income.
The money generated by trust land's operations earns investment income from a number of sources - interest on cash holdings, interest on loans made to buyers of trust lands, and earnings on the permanent funds deposited with the state treasurer.
Trust lands may be leased for the production of oil and gas, coal, gold, gems and other commodities. Mineral revenues come from two sources. First, people lease the land so they can use it for mineral production. Second, the Trust Lands Administration may also require payments based on the amount of the commodity which is produced and sold by the lessee. Historically, Mineral Revenue has been the backbone of Trust Lands' operations.
Surface revenues come from a wide variety of leasing activities - rental of farm land, telecommunication sites, commercial land and industrial sites. The surface work unit also managed the real estate sales program for undeveloped land. That activity generated $6,300,000, which is reported as part of Land Sales Income.
Grazing and Forestry Income
Approximately 3,000,000 acres of trust land are permitted for grazing purposes. In addition, about 250,000 acres of trust land are managed as forests. In FY'98, Grazing and Forestry revenue totaled $600,060 (2% of total revenue.)
Some parcels are not sold as raw land, but are developed so that the beneficiaries can gain through the increased value which may be realized by development. Development results in parcels which are then sold, rented or both. This could include, for example, turning raw lands into ready-to-build residential lots for sale or building commercial sites to rent to businesses. The money made from the sales of developed land is reported as part of Land Sales Income.