                    SUPREME COURT OF ARIZONA
                            En Banc

RAE ANN RUMERY; JOHN SKARHUS;     )   Arizona Supreme Court
and CARTWRIGHT ELEMENTARY SCHOOL  )   No. CV-11-0358-PR
DISTRICT,                         )
                                  )   Court of Appeals
            Plaintiffs/Appellees, )   Division One
                                  )   No. 1 CA-CV 10-0807
                 v.               )
                                  )   Maricopa County
MARIA BAIER, in her capacity as   )   Superior Court
Arizona State Land Commissioner, )    No. CV2010-012871
                                  )
             Defendant/Appellant, )
                                  )
and                               )   O P I N I O N
                                  )
DOUG DUCEY, in his capacity as    )
State Treasurer,                  )
                                  )
                       Defendant. )
__________________________________)


        Appeal from the Superior Court in Maricopa County
           The Honorable Gary E. Donahoe, Judge (Ret.)

                            AFFIRMED
________________________________________________________________

          Opinion of the Court of Appeals, Division One
               228 Ariz. 463, 268 P.3d 1120 (2011)

                            VACATED
________________________________________________________________

ARIZONA CENTER FOR LAW IN THE PUBLIC INTEREST            Phoenix
     By   Timothy M. Hogan
          Joy E. Herr-Cardillo
Attorneys for Rae Ann Rumery, John Skarhus, and Cartwright
Elementary School District

THOMAS C. HORNE, ARIZONA ATTORNEY GENERAL                     Tucson
     By   David F. Jacobs
Attorney for State Land Commissioner Maria Baier
THOMAS C. HORNE, ARIZONA ATTORNEY GENERAL                   Phoenix
     By   Rex C. Nowlan, Assistant Attorney General
          Eryn McCarthy, Assistant Attorney General
Attorneys for State Treasurer Doug Ducey

LASOTA & PETERS PLC                                      Phoenix
     By   Donald M. Peters
Attorney for Amici Curiae Arizona School Boards Association
and Arizona Association of School Business Officials

FENNEMORE CRAIG, P.C.                                    Phoenix
     By   Timothy Berg
          Theresa Dwyer-Federhar
          Michael J. Phalen
          Meredith K. Marder
Attorneys for Amici Curiae Valley Partnership, Arizona Chapter
of Associated General Contractors of America, Arizona Chamber of
Commerce and Industry, Arizona Mining Association, Arizona Rock
Products Association, County Supervisors Association of Arizona,
Greater Phoenix Leadership, International Council of Shopping
Centers, and League of Arizona Cities and Towns

OFFICE OF THE GOVERNOR                                      Phoenix
     By   Joseph Sciarrotta, Jr.
Attorney for Amicus Curiae Governor Janice K. Brewer

MARISCAL, WEEKS, MCINTYRE & FRIEDLANDER, P.A.               Phoenix
     By   Gary L. Birnbaum
          Michael S. Rubin
Attorneys for Amicus Curiae Superintendent of Public
Instruction John Huppenthal

ARIZONA EDUCATION ASSOCIATION                            Phoenix
     By   Samantha E. Blevins
Attorney for Amicus Curiae Arizona Education Association
________________________________________________________________

B A L E S, Vice Chief Justice

¶1        Arizona’s   Constitution   directs   that   “whenever   any

monies shall be in any manner derived from” state trust lands,

the monies “shall be deposited” into a permanent fund to serve

the purpose for which the land was granted.      Ariz. Const. art.


                                2
10, § 7(A).      We hold that A.R.S. § 37-527 (Supp. 2012) violates

this provision by diverting up to ten percent of certain trust

land proceeds to a management fund rather than depositing them

into a permanent fund.

                                      I.

                                      A.

¶2          In   1910,    Congress     passed    the     New   Mexico-Arizona

Enabling Act, granting Arizona more than ten million acres of

land   to   be   held    in   trust   for   designated     public      purposes,

including some eight million acres for the “support of common

schools.”     Act of June 20, 1910, ch. 310, §§ 24, 25, 36 Stat.

557; Lassen v. Arizona ex rel. Ariz. Highway Dep’t, 385 U.S.

458, 460 n.2 (1967).          To ensure that the beneficiaries derive

the full benefit of the land grants, the Enabling Act imposes

detailed restrictions on the sale of trust lands and the use of

trust funds.     Lassen, 385 U.S. at 466-68; see Enabling Act § 28.

¶3          By ratifying our state constitution, Arizona’s voters

accepted the land grants and incorporated the Enabling Act into

“the organic law of this state.”               Kadish v. Ariz. State Land

Dep’t, 155 Ariz. 484, 486, 747 P.2d 1183, 1185 (1987), aff’d

sub. nom. ASARCO Inc. v. Kadish, 490 U.S. 605 (1989).                   Article

10, Section 1 of Arizona’s Constitution declares that the lands

received    shall   be   “held   in   trust”    and    disposed   of    only   as

provided in the Enabling Act and the Arizona Constitution, and

                                       3
that “[t]he natural products and money proceeds of any of said

lands   shall       be   subject      to     the       same       trusts    as    the    lands”

themselves.

¶4           Additional restrictions on the use of proceeds from

state trust lands are contained in Article 10, Section 7, which

provides in part:

        A. A separate permanent fund shall be established
        for each of the several objects for which the said
        grants are made and confirmed by the enabling act to
        the state, and whenever any monies shall be in any
        manner derived from any of said lands, the same
        shall be deposited by the state treasurer in the
        permanent fund corresponding to the grant under
        which the particular land producing such monies was,
        by the enabling act, conveyed or confirmed.

        B. No monies shall ever be taken from one permanent
        fund for deposit in any other, or for any object
        other than that for which the land producing the
        same was granted or confirmed.

Sections 7(A) and (B) restate provisions from Section 28 of the

original Enabling Act.              Although this language was later deleted

from the Enabling Act, Act of Aug. 28, 1957, Pub. L. No. 85-180,

71   Stat.    457,       it   has     remained         in     our     constitution        since

statehood.

¶5           Monies      deposited         into    a     permanent         fund    “shall     be

invested in safe interest-bearing securities and prudent equity

securities.”         Ariz.    Const.       art.    10,        §    7(C).      Based      on   the

earnings     from    assets    in     a    particular             permanent      fund,   annual

distributions are made to promote the fund’s objectives.                                      See


                                              4
id.       §    7(G)     (authorizing        distributions      based      on    five-year

averages for annual rates of return, reduced by an inflation

index, and fund’s average market value); Ariz. Const. art. 11,

§§    8,        10     (establishing       permanent      state     school     fund    and

authorizing use of earnings for maintenance of state educational

institutions).

¶6               Trust lands granted for the support of common schools

also are governed by statutory provisions.                     See A.R.S. § 37-521.

The statute directs that proceeds from trust lands and the sale

of natural products from such lands, such as timber, minerals,

or gravel, shall be deposited into the permanent state school

fund.          Id. § 37-521(A).            The statute declares that the fund

“shall be and remain a perpetual fund.”                     Id. at (B).        As amended

by    a       2002    referendum,    the     statute      specifies      how   expendable

earnings from the fund shall be used and directs that certain

excess amounts shall be deposited into a classroom site fund for

use by school districts to fund operations.                        Id.    § 37-521; see

id. § 15-977.

¶7               The     State      Land     Department       is     responsible       for

administering the trust lands, Forest Guardians v. Wells, 200

Ariz. 255, 257 ¶ 2, 34 P.3d 364, 366 (2001), but neither the

Enabling         Act    nor   Arizona’s       Constitution        identifies     how   the

administrative costs associated with managing the lands will be

funded.          For     nearly   100      years,   the   legislature      appropriated

                                               5
monies    from   the    state’s   general     fund   to    pay   the    costs      for

generally administering the trust lands.                 In 2009, however, the

legislature altered the funding scheme by enacting A.R.S. § 37-

527.     2009 Ariz. Sess. Laws, ch. 5, § 9 (3d Spec. Sess.).

¶8           Section 37-527 allows the costs of administering the

state trust lands to be paid from a newly established trust land

management fund.        The statute provides that, at the discretion

of the State Land Commissioner, up to ten percent of the annual

proceeds    from    “[e]ach    beneficiary’s      trust     lands”     and    “[a]ll

sales of timber, mineral, gravel or other natural products or

property     from    each     beneficiary’s      trust     lands”      are    to    be

deposited into the management fund.              A.R.S. § 37-527(A).          Monies

in this fund are subject to legislative appropriation and are to

be “used exclusively to manage trust lands.”                 Id. at (C).           The

legislature also amended § 37-521 to provide that the permanent

state school fund would consist of proceeds from state school

trust lands “[a]fter any appropriation pursuant to section 37-

527.”    2009 Ariz. Sess. Laws, ch. 5, § 4 (3d Spec. Sess.).

¶9          Monies      designated      for   the     management        fund       are

separated from trust land proceeds before the remaining proceeds

are    placed    into   a   permanent    fund.       For   fiscal      year    2010,

$9,773,500 was diverted to the management fund and appropriated

to the State Land Department.           Id. § 18.        For fiscal year 2011,

the State Land Commissioner directed that the full ten percent

                                        6
of proceeds, or $10.5 million, be deposited into the management

fund to pay for the operations of the State Land Department.

                                               B.

¶10          In    2010,     Rae        Ann    Rumery,            John       Skarhus,      and     the

Cartwright Elementary School District sued the Commissioner and

the Treasurer, alleging that § 37-527 violates Section 28 of the

Enabling     Act     and     Article          10,       Section          7    of     the     Arizona

Constitution.        They further contended that the statute violates

the voter-protection provisions in Article 4, Part 1, Section

1(6)    of   the     Arizona           Constitution            because         it    alters        the

distribution of monies under § 37-521 and was not approved by a

three-quarters       vote     in       each    house         of    the       legislature.          The

Commissioner       defended        §    37-527          by    arguing         that    common       law

principles        allow     trust       assets         to     be    used        to    fund       trust

management and that the new statute does not alter A.R.S. § 37-

521’s formula for distributing expendable earnings from school

trust lands.

¶11          On cross-motions for summary judgment, the trial court

ruled that § 37-527 violates both Article 10, Section 7 and the

voter-protection          provisions          of       Arizona’s         Constitution.             The

court   enjoined      the    Commissioner              from       designating        state       trust

land proceeds for deposit into the management fund, ordered the

Treasurer    to     deposit    all       state         trust      land       proceeds      into    the

appropriate       permanent        fund,      and       ordered      the       Commissioner         to

                                                   7
repay to the permanent funds all amounts previously diverted.

The   Commissioner      appealed.           (The        Treasurer       did      not    join     the

Commissioner’s cross-motion or appeal the trial court’s ruling.)

¶12          The court of appeals affirmed, agreeing with the trial

court that § 37-527 violates Article 10, Section 7 by diverting

trust     land     proceeds    from        the        permanent       state      school       fund.

Rumery v. Baier, 228 Ariz. 463, 465 ¶ 1, 268 P.3d 1120, 1122

(App. 2011).          The court of appeals did not address the trial

court’s      ruling    that     the    statute           also        violates      the      voter-

protection provisions.          Id. at n.3.

¶13          We     granted      review              because     whether         the        Arizona

Constitution allows the costs of managing state trust lands to

be    paid   from     trust    land    proceeds          is     an    issue      of     statewide

importance.        The Court has jurisdiction under Article 6, Section

5(3) of the Arizona Constitution and A.R.S. § 12-120.24 (2009).

                                                II.

                                                A.

¶14          Our    resolution        of    this        case    turns       on    Article        10,

Section 7(A)’s directive that “whenever any monies shall be in

any manner derived from” any of the state trust lands, “the same

shall be deposited by the state treasurer” into the permanent

fund corresponding to the particular land grant.

¶15          “The     ‘Constitution             should     be     construed            so   as    to

ascertain     and     give    effect       to    the     intent       and   purpose         of   the

                                                 8
framers and the people who adopted it.’”                                Brewer v. Burns, 222

Ariz. 234, 239 ¶ 26, 213 P.3d 671, 676 (2009) (quoting State ex

rel. Morrison v. Nabours, 79 Ariz. 240, 245, 286 P.2d 752, 755

(1955)).     We do so by fairly interpreting the language used and,

unless     the        context     suggests       otherwise,             giving    words      “their

natural, obvious and ordinary meaning.”                           Id.

¶16          By        its    terms,     Article        10,       Section        7(A)      requires

proceeds     from       the     sale    of    state     trust       lands       and   of    natural

products from such lands to be deposited into a permanent fund.

The language does not permit diverting proceeds instead to a

management       fund.          Nor    does    the    context       suggest       that      Section

7(A)’s language should be interpreted to mean something other

than what it says.

¶17              In    interpreting           Article       10,    Section       7(A),      we   are

guided by decisions construing the Enabling Act.                                      Cf. Kadish,

155 Ariz. at 486, 747 P.2d at 1185 (noting that interpreting

restrictions           on     disposition        of     trust           lands    requires        “an

understanding of the historical process from which [the Act]

evolved”).        The Act’s restrictions regarding state trust lands

reflect “Congress’ concern both that the [land] grants provide

the most substantial support possible to the beneficiaries and

that only those beneficiaries profit from the trust.”                                       Lassen,

385   U.S.   at        467.      Consistent          with    this       purpose,      the    United

States Supreme Court has refused to allow the disposition of

                                                 9
trust assets or proceeds for purposes other than those specified

in the Enabling Act, even when the proposed use arguably would

benefit the trust overall.

¶18         The Supreme Court long ago held that the Enabling Act

prevented New Mexico from using income from its trust lands to

promote the state and its resources generally.                 Ervien v. United

States, 251 U.S. 41, 47-48 (1919).                New Mexico argued that such

payments   were    appropriate       for    administering     the   trust     estate

because they would foster the sale and leasing of trust lands.

Id. at 47.        Rejecting this argument, the Supreme Court noted

that the Enabling Act specifically enumerated the purposes for

which the trust lands had been granted, “and to make assurance

doubly sure it was provided that the natural products and money

proceeds of such lands should be subject to the same trusts as

the lands producing the same.”                  Id.   The Court held that the

Enabling Act precluded “any license of construction or liberties

of inference” that would allow the use of trust land proceeds

for purposes other than those recognized in the Enabling Act

itself.    Id.

¶19         In    1967,      the     Supreme      Court    reaffirmed    Ervien’s

interpretative approach in Lassen.                385 U.S. at 467.      There the

Court held that the Enabling Act barred Arizona’s long-standing

practice    of    allowing     the    State      Highway   Department    to    take

material sites and rights of way from state trust lands without

                                           10
compensating the trusts.              Id. at 466.           The rationale for this

practice, which our Court had approved, was that the highways

constructed across trust lands would enhance the remaining trust

lands by at least the value of the property taken.                      See id. at

460.     Without questioning this premise, the Supreme Court held

that “[t]he Enabling Act unequivocally demands both that the

trust receive the full value of any lands transferred from it

and that any funds received be employed only for the purposes

for which the land was given.”                Id. at 466.       To ensure that the

beneficiaries “derive the full benefit of the grant,” the Court

held that “Arizona must actually compensate the trust in money

for the full appraised value of any material sites or rights of

way    which    it   obtains    on    or   over    trust     lands.”    Id.    at   469

(footnotes and internal quotations omitted).

¶20            We have similarly recognized, in dealing with state

trust    lands,      that    “all    doubts     must   be   resolved   in   favor    of

protecting and preserving trust purposes.”                    Kadish, 155 Ariz. at

495, 747 P.2d at 1194.                Applying this principle, Kadish held

that a state statute mandating flat-rate royalties for certain

mineral leases violated the requirements in the Enabling Act and

Arizona Constitution that trust lands be leased for their true,

appraised value.            Id. at 495-97, 747 P.2d at 1194-96.               Although

those defending the statute argued that it would promote mineral

exploration and development and thereby increase payments to the

                                           11
state, we held that this prospect could not justify departing

from the Enabling Act’s requirements.              Id. at 496-97, 747 P.2d

at 1195-96.

¶21          The Commissioner correctly observes that cases such as

Ervien, Lassen, and Kadish did not involve Article 10, Section

7(A) of Arizona’s Constitution or the use of trust assets to pay

the costs of managing trust lands.            Those cases, however, are

relevant      for   what    they     teach    about        interpreting      the

constitutional restrictions on the disposition of trust assets:

courts may not permit use of trust lands or their proceeds in

ways not expressly authorized, even if doing so would benefit

the trust.      As Kadish observed, “we must strictly apply the

Enabling Act’s restrictions regarding disposal of school trust

assets.”     155 Ariz. at 488, 747 P.2d at 1187; see also Murphy v.

State, 65 Ariz. 338, 353, 181 P.2d 336, 346 (1947) (noting that

“every act of the legislature that in any manner circumvents the

plain   provisions     of   the    Enabling   Act     is    struck   down     as

unconstitutional and void”).

¶22          Because Article 10 retains certain restrictions that

were later deleted from the Enabling Act, the latter “merely

sets out the minimum protection for our state trust land.”                  Deer

Valley Unified Sch. Dist. v. Superior Court, 157 Ariz. 537, 541,

760 P.2d 537, 541 (1988).          Thus, consistent with the approach

taken   in   Ervien,   Lassen,     and   Kadish,    we   apply   Article     10,

                                     12
Section 7 according to its terms and decline to infer unstated

exceptions to its restrictions on the use of state trust land

proceeds.

                                              B.

¶23          In defending A.R.S. § 37-527, the Commissioner notes

that the Enabling Act and the Arizona Constitution are silent on

how the costs of managing the state trust lands will be funded.

She also observes that spending trust proceeds on trust land

management directly benefits the trust and its beneficiaries,

that the common law generally allows trust assets to be used for

trust administration, and that other courts have approved the

use   of    proceeds      from        state   trust   lands     to   pay       for     trust

management, citing United States v. Swope, 16 F.2d 215 (8th Cir.

1926), Betts v. Comm’rs of the Land Office, 110 P. 766 (Okla.

1910),     and    State   ex.    rel.     Greenbaum    v.   Rhoades,       4     Nev.    312

(1868).

¶24          The Constitution’s silence on the payment of the costs

of trust management and the fact that such expenditures might

benefit     the    trusts       are     not   sufficient      grounds      for       reading

exceptions        into    our     Constitution        and   Enabling        Act.         As

explained, supra ¶¶ 16-22, when the Constitution or the Enabling

Act specifies a particular disposition of trust assets, we may

not infer exceptions to the stated requirements, even if doing

so arguably could benefit the trust overall.                     Here, Article 10,

                                              13
Section 7(A) explicitly directs that monies derived from state

trust lands be deposited into the relevant permanent fund.

¶25        The language of Article 10, Section 7(A) also answers

the argument based on the common law of trusts.                        Such law is

relevant in defining the Commissioner’s powers and duties.                       See,

e.g., Forest Guardians, 201 Ariz. at 262 ¶ 20, 34 P.3d at 371.

The common law generally allows a trustee to use trust assets to

pay trust administration costs.                Restatement (Third) of Trusts

§ 38 (2003) (“A trustee is entitled to indemnity out of the

trust     estate    for        expenses        properly      incurred     in      the

administration     of    the    trust.”).       But    a   trustee’s    common    law

powers may be limited by the terms of the trust.                   See id. § 85

(2007) (providing that a trustee’s powers can be “limited by

statute or the terms of the trust”).                  Here, Article 10, Section

7(A) directs the state treasurer to deposit trust proceeds into

a   permanent   fund.          This   constitutional       language,    not    being

subject to implied exceptions, controls over the common law of

trusts.    Cf. Ervien, 251 U.S. at 47-48 (noting that the United

States, as grantor of lands under Enabling Act, had “impose[d]

conditions upon their use”).

¶26        For similar reasons, we are not persuaded by the out-

of-state cases.         In Swope, the United States Court of Appeals

upheld a New Mexico statute that allocated twenty percent of the

income from state trust lands to a maintenance fund for paying

                                          14
the costs of the state land office.              16 F.2d at 216, 219.          Swope

held that such payments were not prohibited by the Enabling Act,

noting the common law principle of allowing the payment of the

costs of trust administration from trust assets.                        See id. at

217.   Swope also cited the 1868 Nevada decision in Rhoades and

the 1910 Oklahoma decision in Betts as other cases approving the

use of monies derived from trust lands to pay the expenses of

managing the lands.         Id. at 217-18.

¶27          Although    Swope     interpreted     language       in   the   Enabling

Act identical to that in Arizona’s Constitution, the federal

decision is neither binding nor persuasive here.                        Swope gives

insufficient      weight    to    the   explicit   language       in   Article    10,

Section 7(A) directing that “whenever any monies shall be in any

manner derived” from state trust lands, such monies “shall be

deposited”    into   a     permanent    fund.      Even    less    persuasive     are

Rhoades and Betts, cases that involved enabling acts and state

constitutions with language different from that in Article 10,

Section 7.     Rhoades compared the state to an “ordinary trustee”

in allowing the expenses of the state land office to be paid

from trust proceeds, see 4 Nev. at 317, and Betts approved only

the payment of trust expenses from the “net income” from leasing

certain trust lands.          110 P. at 767-68.           Neither case supports

allowing   this    Court     to   disregard     Article     10,    Section    7(A)’s

requirement for the disposition of proceeds from Arizona trust

                                         15
lands.    Cf. Murphy, 65 Ariz. at 350-53, 181 P.2d at 344-46

(noting that out-of-state cases are of little precedential value

for   interpreting        Arizona’s     Enabling     Act       because    the     latter

“marked   a    complete      and    absolute     departure      from     the    enabling

acts” of other states).

                                        III.

¶28           We   hold    that    A.R.S.    §   37-527    violates       Article    10,

Section   7(A)     of     Arizona’s   Constitution        by    diverting       proceeds

from state trust lands to a management fund.                           We affirm the

trial court’s entry of summary judgment for Appellees and vacate

the opinion of the court of appeals.                 We also grant Appellees’

request for an award of attorney’s fees, as the Commissioner

conceded below that Appellees would be entitled to a fee award

under the private attorney general doctrine if they prevailed.



                                   __________________________________
                                   Scott Bales, Vice Chief Justice



CONCURRING:


__________________________________
Rebecca White Berch, Chief Justice


__________________________________
A. John Pelander, Justice




                                            16
__________________________________
Robert M. Brutinel, Justice


__________________________________
Virginia C. Kelly, Judge*




*Pursuant to Article 6, Section 3 of the Arizona Constitution,
the Honorable Virginia C. Kelly, Judge of the Arizona Court of
Appeals, Division Two, was designated to sit in this matter.




                               17
