Bill Text: AZ SB1195 | 2010 | Forty-ninth Legislature 2nd Regular | Chaptered
Bill Title: State land department; fees; funds
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2010-05-06 - Governor Signed [SB1195 Detail]
Download: Arizona-2010-SB1195-Chaptered.html
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House Engrossed Senate Bill |
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State of Arizona Senate Forty-ninth Legislature Second Regular Session 2010
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SENATE BILL 1195 |
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AN ACT
Amending section 27-251, Arizona Revised Statutes; Repealing sections 37-107 and 37-108, Arizona Revised Statutes; amending title 37, chapter 1, article 1, Arizona Revised Statutes, by adding a new section 37-107; amending sections 37-109, 37-110, 37-132, 37-205, 37-239, 37-241, 37-258, 37-260, 37‑281.02, 37-285, 37-313, 37-314, 37-604 and 37-615, Arizona Revised Statutes; relating to the state land department.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 27-251, Arizona Revised Statutes, is amended to read:
27-251. Application for mineral exploration permit
A. Any natural person over eighteen years of age and any other person qualified to transact business in this state may apply to the state land commissioner for a mineral exploration permit on the state land in one or more of the rectangular subdivisions of twenty acres, more or less, or lots, in any one section of the public land survey. Such application shall be in writing and signed by the applicant, or an authorized agent or attorney for the applicant, and shall contain the name and address of the applicant, a description according to the public land survey of the state land for which the applicant seeks a mineral exploration permit, and such other information as the commissioner may prescribe by rule. The application shall be filed with the state land department and shall be accompanied by payment to the department of a filing fee as prescribed by section 37‑108 pursuant to section 37-107. Each application meeting the requirements of this section shall be stamped by the department with the time and date it is filed with the department. The application shall have priority over any other application for a mineral exploration permit involving the same state land which may be filed with the department subsequent to such time and date, and such land shall be deemed withdrawn as long as the application is pending.
B. Not less than thirty days nor more than forty‑five days from the filing of the application with the department, provided there is no prior application for a mineral exploration permit involving the same state land then pending before the department, or if such prior application is then pending but is subsequently cancelled, not more than thirty days after it is cancelled, the department shall mail to the applicant at the address shown on the application a written notice designating the state land that is described in the application and that, at the time the application was filed with the department, was open to application, the amount of rental required to be paid for the mineral exploration permit as herein provided, and whether a bond will be required under the provisions of section 27‑255 as a condition to issuance of such permit. If, within thirty days after the mailing of such notice, the applicant pays to the department as rental for the permit the amount of two dollars per acre for each acre of state land designated in the notice and files with the department the bond, if any, required under section 27‑255, and if the commissioner finds that issuing the permit is in the best interest of the trust, the commissioner shall issue to the applicant a mineral exploration permit for the state land designated in the notice. The commissioner may deny the application for any of the following reasons:
1. The application was not made in good faith.
2. The proposed exploration or possible future mining activities would not be the highest and best use of the trust lands.
3. The value and income potential of surrounding trust lands would be adversely affected and the benefit from proposed exploration and future mining activity cannot reasonably be expected to be greater than the diminished value to those surrounding trust lands.
4. The proposed operations would violate applicable state or federal law.
5. The commissioner determines that the proposed exploration activities or possible future mining activities will create a liability to the state greater than the income from the proposed operations.
C. During the period such mineral exploration permit is in effect no person except the permittee and the authorized agents and employees of the permittee shall be entitled to explore for minerals on the state land covered by the permit. If the applicant fails to make the payment or furnish the bond within the period of thirty days, the application shall be deemed cancelled and of no further effect.
Sec. 2. Repeal
Sections 37-107 and 37-108, Arizona Revised Statutes, are repealed.
Sec. 3. Title 37, chapter 1, article 1, Arizona Revised Statutes, is amended by adding a new section 37-107, to read:
37-107. Fees; accounts
A. The commissioner shall prescribe by rule application, permit, transaction, appraisal, service, filing and document fees for transactions related to the selling, leasing, annexation, conveyance, exchange, right‑of‑way and use of state lands or products of state lands managed by the department. Before adopting any rule setting or changing a fee under this section, the commissioner must submit the proposed fee amount to the joint legislative budget committee for review. The commissioner shall deposit the revenues derived from the fees in the trust land management fund pursuant to section 37-527.
B. The commissioner may establish selling and administrative fees, which may include:
1. Up to three per cent of the consideration paid for all lands and improvements sold or long‑term leased.
2. Zoning application fees paid by the department to rezone land.
3. Legal advertising expenses required by law and paid by the department.
C. The revenues derived from the fees established pursuant to subsection B of this section shall be deposited as follows:
1. The revenues derived from the fees collected pursuant to subsection B, paragraph 1 of this section, less any amounts paid as brokerage fees pursuant to section 37-132, subsection B, paragraph 2, shall be deposited in the trust land management fund pursuant to section 37-527.
2. The monies collected pursuant to subsection B, paragraph 2 of this section as actual costs of zoning application fees paid by the department to rezone lands shall be deposited in a separate account of the state land department fund designated as the zoning application fee account. Monies in the account shall be used to pay zoning application fees if developing lands require rezoning by the jurisdiction in which the lands are located. The commissioner shall administer the account.
3. The monies collected under subsection B, paragraph 3 of this section, subsection D of this section and application evaluation and processing costs pursuant to section 37-205, subsection A shall be deposited in separate accounts of the state land department fund to be used to pay costs of legal advertising, costs of appraisals required by the Enabling Act, by the Constitution of Arizona or by statute and the costs of evaluating and processing applications. The commissioner shall administer the accounts. On notice from the commissioner, the state treasurer shall invest and divest monies in the state land department fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.
D. The commissioner may require or allow prepayment for the estimated cost of an appraisal required pursuant to section 27-234 and this title. The commissioner shall deposit and administer prepayment monies as provided by subsection C, paragraph 3 of this section. The commissioner shall use monies accepted pursuant to this subsection to conduct contract appraisals. If an auction is held and an applicant who has prepaid the estimated cost of an appraisal or paid an appraisal fee is not the successful bidder, the successful bidder shall reimburse the applicant either for the actual cost of the appraisal or for the appraisal fee, whichever was paid. If the commissioner proceeds to auction on the commissioner's initiative, the successful bidder at auction shall reimburse the department for the actual cost of the appraisal, if there was a contract appraisal, or pay the appraisal fee if a contract appraisal was not obtained. Nothing in this subsection:
1. Requires the commissioner to offer any land at auction or for lease.
2. Requires the commissioner to reimburse an applicant if the land is not auctioned or leased.
3. Affects the status of any other application pending an appraisal.
E. Except as provided under section 37-205, fees paid under this section are not refundable to the applicant, regardless of the outcome of the application.
Sec. 4. Section 37-109, Arizona Revised Statutes, is amended to read:
37-109. Alternative payment methods
At the commissioner's sole discretion, the commissioner may accept fees imposed by section 37‑108 pursuant to section 37-107 by alternative payment methods, including credit and charge cards, pursuant to section 35‑142, subsection I, debit cards and electronic funds transfers or other alternative payment methods, pursuant to section 35‑315, but the department is not obligated to accept any payment using an alternative payment method.
Sec. 5. Section 37-110, Arizona Revised Statutes, is amended to read:
37-110. Due diligence fund; exemption; reversion
A. The due diligence fund is established. The commissioner shall may use the monies in the fund to pay the department's costs of evaluating and processing applications and otherwise preparing lands for sales, leases, rights-of-way or other use permits, including cultural resource investigations, legal land surveys, environmental assessments, economic consulting and engineering, planning, legal and geological studies.
B. The fund consists of legislative appropriations and reimbursements to the department by winning bidders for the department's costs of advance due diligence investigations and analyses pursuant to subsection A of this section. Monies in the fund are subject to legislative appropriation.
C. The commissioner shall administer the fund. Monies in the fund are exempt from the provisions of section 35-190 relating to the lapsing of appropriations, except that all monies in the fund exceeding five hundred thousand dollars at any time revert to the state general fund.
Sec. 6. Section 37-132, Arizona Revised Statutes, is amended to read:
37-132. Powers and duties
A. The commissioner shall:
1. Exercise and perform all powers and duties vested in or imposed upon the department, and prescribe such rules as are necessary to discharge those duties.
2. Exercise the powers of surveyor‑general except for the powers of the surveyor‑general exercised by the treasurer as a member of the selection board pursuant to section 37‑202.
3. Make long‑range plans for the future use of state lands in cooperation with other state agencies, local planning authorities and political subdivisions.
4. Promote the infill and orderly development of state lands in areas beneficial to the trust and prevent urban sprawl or leapfrog development on state lands.
5. Classify and appraise all state lands, together with the improvements on state lands, for the purpose of sale, lease or grant of rights‑of‑way. The commissioner may impose such conditions and covenants and make such reservations in the sale of state lands as the commissioner deems to be in the best interest of the state trust. The provisions of this paragraph are subject to hearing procedures pursuant to title 41, chapter 6, article 10 and, except as provided in section 41‑1092.08, subsection H, are subject to judicial review pursuant to title 12, chapter 7, article 6.
6. Have authority to lease for grazing, agricultural, homesite or other purposes, except commercial, all land owned or held in trust by the state.
7. Have authority to lease for commercial purposes and sell all land owned or held in trust by the state, but any such lease for commercial purposes or any such sale shall first be approved by the board of appeals.
8. Except as otherwise provided, determine all disputes, grievances or other questions pertaining to the administration of state lands.
9. Appoint deputies and other assistants and employees necessary to perform the duties of the department, assign their duties, and require of them such surety bonds as the commissioner deems proper. The compensation of the deputy, assistants or employees shall be as determined pursuant to section 38‑611.
10. Make a written report to the governor annually, not later than September 1, disclosing in detail the activities of the department for the preceding fiscal year, and publish it for distribution. The report shall include an evaluation of auctions of state land leases held during the preceding fiscal year considering the advantages and disadvantages to the state trust of the existence and exercise of preferred rights to lease reclassified state land.
11. Withdraw state land from surface or subsurface sales or lease applications if the commissioner deems it to be in the best interest of the trust. This closure of state lands to new applications for sale or lease does not affect the rights which existing lessees have under law for renewal of their leases and reimbursement for improvements.
B. The commissioner may:
1. Take evidence relating to, and may require of the various county officers information on, any matter that the commissioner has the power to investigate or determine.
2. Under such rules as the commissioner adopts, use private real estate brokers to assist in any sale or long‑term lease of state land and pay, from fees collected under section 37‑108 37-107, subsection A B, paragraph 10, subdivision (a) 1, a commission to a broker that is licensed pursuant to title 32, chapter 20 and that provides the purchaser or lessee at auction. The purchaser or lessee at auction is not eligible to receive a commission pursuant to this subsection. A commission shall not be paid on a sale or a long‑term lease if the purchaser or lessee is another governmental agency a political subdivision of this state.
3. Require a permittee, lessee or grantee to post a surety bond or any form of collateral deemed sufficient by the commissioner for performance or restoration purposes. The commissioner shall use the proceeds of a bond or collateral only for the purposes determined at the time the bond or collateral is posted. For agricultural lessees, the commissioner may require collateral as follows:
(a) As security for payment of the annual assessments levied by the irrigation district in which the state land is located if the lessee has a history of late payments or defaults. The amount of the collateral required shall not exceed the annual assessment levied by the irrigation district.
(b) As security for payment of rent, if an extension of time for payment is requested or if the lessee has a history of late payments of rent. The collateral shall be submitted at the time any extension of time for payment is requested. The amount of the collateral required shall not exceed the annual amount of rent for the land.
(c) A surety bond shall be required only if the commissioner determines that other forms of collateral are insufficient.
4. Withhold market and economic analyses, preliminary engineering, site and area studies and appraisals that are collected during the urban planning process from public viewing before they are submitted to local planning and zoning authorities.
5. Withhold from public inspection proprietary information received during lease negotiations. The proprietary information shall be released to public inspection unless the release may harm the competitive position of the applicant and the information could not have been obtained by other legitimate means.
6. Issue permits for short‑term use of state land for specific purposes as prescribed by rule.
7. Contract with a third party to sell recreational permits. A third party under contract pursuant to this paragraph may assess a surcharge for its services as provided in the contract, in addition to the fees prescribed by pursuant to section 37‑108 37-107.
8. Close urban lands to specific uses as prescribed by rule if necessary for dust abatement, to reduce a risk from hazardous environmental conditions that pose a risk to human health or safety or for remediation purposes.
9. Notwithstanding subsection A, paragraph 4 of this section, authorize, in the best interest of the trust, the extension of public services and facilities either:
(a) That are necessary to implement plans of the local governing body, including plans adopted or amended pursuant to section 9‑461.06 or 11‑824.
(b) Across state lands that are either:
(i) Classified as suitable for conservation pursuant to section 37‑312.
(ii) Sold or leased at auction for conservation purposes.
C. The commissioner or any deputy or employee of the department shall not have, own or acquire, directly or indirectly, any state lands or the products on any state lands, any interest in or to such lands or products, or improvements on leased state lands, or be interested in any state irrigation project affecting state lands.
Sec. 7. Section 37-205, Arizona Revised Statutes, is amended to read:
37-205. Due diligence costs related to disposition of land
A. In addition to other fees required by this title, and instead of the department performing advance due diligence pursuant to section 37-110, subsection A, the commissioner may require or allow an applicant to advance or incur the costs for of the department's evaluating and processing an application and otherwise preparing land for a sale, lease, right‑of‑way or other use permit, including cultural resource investigations, legal land surveys, environmental assessments, economic consulting and engineering, planning, legal or geological studies. Monies that are advanced by the applicant to the department pursuant to this subsection shall be deposited and administered by the commissioner as provided by section 37‑108, subsection B in a separate account of the state land department fund.
B. If the successful bidder at an auction is not the applicant, the successful bidder shall reimburse the applicant for fees and costs paid pursuant to this section in amounts and on terms the commissioner or the commissioner’s designee directs in the auction notice. After receiving the reimbursement amounts, the commissioner shall remit them to the applicant.
C. If an auction does not occur or a transaction is otherwise not completed as a result of a mistake or circumstances caused by the department, including issues arising out of concerns over title, misidentification of the parcel and factors affecting the commissioner's view of the timeliness or desirability of disposing of the parcel, then the commissioner, on the timely written request of an applicant, may reimburse or cause to be reimbursed to the applicant, on terms that the commissioner considers reasonable and appropriate, from monies of the department all or part of the costs paid pursuant to this section and application fees paid pursuant to section 37‑108 37-107. Reimbursement for costs paid pursuant to this section may only be for costs that the commissioner determines to represent an enhancement of knowledge about the parcel or that tangibly or intangibly enhance the value of the parcel. The commissioner may refuse any reimbursement request for any reason.
Sec. 8. Section 37-239, Arizona Revised Statutes, is amended to read:
37-239. Participation contracts; planning and disposition proposals
A. The commissioner may enter into participation contracts and may charge a fee to an applicant to retain one or more consultants to assist in negotiating or preparing a participation contract. If the applicant is not the successful bidder, the commissioner shall refund the fee.
B. Before recommending any participation contract to the board of appeals, the commissioner shall consider and report on:
1. The methodology for determining any reimbursable infrastructure costs.
2. An analysis of the state trust revenue to be derived from the proposed participation contract.
3. The historical trends in land values in the area by types of proposed land uses.
4. An analysis of the financial feasibility of the planned development's proposed build‑out schedule.
5. An evaluation of the potential economic risks and benefits to the trust arising from the participation contract.
6. An analysis of the economic and financial impact, and other factors determined by the commissioner, regarding alternative dispositions or no disposition of the lands.
C. Each participation contract shall:
1. Provide that subsequent sales or leases of state land that are subject to a participation contract shall be based on the criteria and the phasing and disposition plan included in the participation contract and the formula for determining the amount of revenue to the trust as a result of the subsequent sale or lease.
2. Prescribe rights and remedies in the case of default including rights to cure, forfeiture and other appropriate remedies.
D. This state's share of the revenues from the sale of land under a participation contract shall be deposited, pursuant to sections 35‑146 and 35‑147, in the appropriate perpetual fund.
E. A participation contract may be offered on lands that do not have a development plan approved by the commissioner or on land that may require the successful bidder to further plan and zone property after the auction. Before auctioning a contract requiring planning and zoning, the commissioner may solicit planning and disposition proposals, through advertisement for at least five consecutive days in a newspaper of general circulation in the county in which the lands are located, or if there is no daily newspaper of general circulation in that county, the advertisement shall be published as many times within a thirty‑day period as the newspaper is published but not more than five times. The commissioner may require information regarding the projected planning and zoning, the estimated costs of the planning and zoning and the financial feasibility of the proposal. The proposals shall also contain proposed participation payments. The commissioner may provide that some of the information that is contained in the proposals will remain confidential, if the information is proprietary, until the commissioner recommends a contract to the board of appeals. After the proposals are received, the commissioner may conduct preauction conferences regarding the proposals. The commissioner may then auction a participation contract that, at the commissioner's option, may incorporate information that was acquired through the proposal process. A participation contract that is entered into pursuant to this subsection shall:
1. Require the successful bidder to pay a nonrefundable down payment of at least two and one‑half per cent of the minimum bid for the property, plus the required fees prescribed in pursuant to section 37‑108 37‑107 and, if the successful bidder did not pay the consultant fee pursuant to subsection A of this section, any fee charged pursuant to subsection A of this section, by cashier's check at the time of the auction. The down payment does not include participation payments.
2. Require an additional payment to be made within thirty days if the amount bid for the land exceeds the minimum bid, so that the total down payment, including the down payment paid on the date of the sale, will equal the required percentage down payment of the total amount bid. The additional payment does not include participation payments.
3. Require the successful bidder to post within thirty days after the auction a surety bond or another form of collateral that the commissioner considers to be sufficient to cover the costs of the required planning and zoning.
4. Provide for the forfeiture of the contract and any accompanying certificate of purchase or lease if the successful bidder fails to provide the required collateral.
5. Describe the land to be planned and zoned, which may include land that is retained by the department and not auctioned with the contract.
6. Contain guidelines for expected planning and zoning and time frames for the planning and zoning consistent with the guidelines.
7. Provide for the forfeiture of the contract and any accompanying certificate of purchase or lease if the successful bidder fails to accomplish the planning and zoning within the prescribed time, unless extended in writing by the commissioner based on good cause shown.
8. Require at least ten per cent of the total purchase price to be paid by the time the planning and zoning are completed, unless extended in writing by the commissioner based on good cause shown.
9. Provide for absolute approval authority by the commissioner of any planning and zoning actions.
10. Deny the successful bidder the right to physically develop the property, including grading or leveling, until at least ten per cent of the purchase price has been paid.
11. Deny the issuance of partial patents for the property until at least ten per cent of the purchase price has been paid and the requirements of section 37‑251 have been met.
12. Contain such other terms that the commissioner considers to be necessary or appropriate.
F. After it is accepted by the commissioner, a planning and zoning proposal submitted to the local governing body by the successful bidder shall be administered as a state general plan or development plan as appropriate, according to the procedures described in article 5.1 of this chapter.
Sec. 9. Section 37-241, Arizona Revised Statutes, is amended to read:
37-241. Terms of sale of state land; payment; interest rate
A. The terms of sale of state land are as follows:
1. At least ten per cent, but not more than twenty‑five per cent, of the appraised value, as stated in the auction notice, which shall be applied to principal, together with the required fees prescribed by pursuant to section 37‑108 37‑107, shall be paid by cashier's check upon announcement of the successful bidder.
2. If the amount bid for the land exceeds the appraised value, further payment shall be made within thirty days so that the total amount paid including the amount paid on the date of sale shall equal the percentage of the bid, as stated in the auction notice, which shall be allocated to principal, together with the required fees prescribed under section 37‑108 37‑107.
B. Upon payment of the amounts provided in subsection A of this section, and upon compliance by the purchaser with the requirements of this article, and the payment of the fees under section 37‑108 37‑107, a certificate of purchase shall issue as provided in section 37‑244. On full payment for the entire tract of land sold within thirty days after the auction, the department shall issue a patent as provided in section 37‑251.
C. If the purchaser fails to complete the payment of the percentage of the bid stated in the auction notice, together with the fees required by pursuant to section 37‑108 37‑107, or to enter into a contract of sale within the time provided in the certificate of purchase offered by the department:
1. The purchaser forfeits all amounts paid, including:
(a) All payments made on the purchase price, which shall be deemed to be rental for the land.
(b) All amounts paid under section 37‑108 37‑107.
2. The commissioner may declare that the bid placed before the final bid accepted is the highest bid, and that bidder has five business days after notification by the department to pay by cashier's check all amounts due under this section and section 37‑108 37‑107.
D. The balance of the purchase price is payable as follows:
1. The commissioner shall establish prior to the notice of sale the length of the term over which the balance shall be paid, and whether a variable or fixed interest rate is appropriate, or whether the entire balance without interest is due and payable within thirty days after the auction. This determination shall be based on the nature of the land being sold and general market conditions in effect at the time.
2. After establishing the length of the term and whether a fixed or variable rate is appropriate, the commissioner shall notify the state treasurer to establish the interest rate after consideration of local prevailing prime interest rates and mortgage rates and the maximum amount of interest set by statute by this state, if any.
3. If a variable rate is established, the interest rate charged a purchaser may vary from year to year. The department shall annually notify each purchaser of the interest rate specified by the state treasurer to be paid by the purchaser for the following year and the total amount of interest payable the following year with the purchaser's annual payment.
E. The commissioner shall establish prior to the notice of sale the length of the term over which the balance shall be paid. The term shall not exceed twenty‑five years.
F. The length of term and interest rate and whether the rate is variable or fixed shall be considered terms of the sale to be included in the notice required by section 37‑237.
G. The purchaser may discharge the entire debt at any time and be entitled to a patent for the land if the purchaser pays the entire purchase price, together with the applicable fees, and demonstrates that all terms and conditions of the certificate of purchase have been satisfied.
Sec. 10. Section 37-258, Arizona Revised Statutes, is amended to read:
37-258. Sale of rights in dry riverbed
A. Upon receipt of the appraisal and when it is in the best interests of this state and of the trust, the commissioner may cause rights of the state in any dry riverbed on the land described in the application to be put up for sale to the highest bidder. This sale may include the state's interest in oil, gas, other hydrocarbon substances, helium or other substances of a gaseous nature, geothermal resources, coal, minerals, fossils and fertilizer of every name and description together with all uranium, thorium or other materials peculiarly essential to the production of fissionable materials.
B. The sale shall be held at the county seat of the county wherein the land was located immediately preceding the river movement which left the riverbed dry, and if such county cannot be determined by the commissioner, then the sale shall be held at the county seat of Maricopa county.
C. The sale is subject to all existing leases, covenants, conditions, restrictions, easements, encumbrances, rights and rights‑of‑way against the land described in the application. The state may sell its rights in an entire section in any one year. No sales shall be deemed to be agricultural land for purposes of section 37‑234. At least ten per cent, but not more than twenty‑five per cent, of the appraised value, as stated in the auction notice, which shall be applied to principal, together with the prescribed fee under section 37‑108 37‑107 shall be paid by cashier's check upon announcement of the successful bidder. The balance of the purchase price shall be paid by cashier's check within thirty days of the date of the sale and no interest shall be charged. In other respects, the sale shall be conducted as specified in this article. The minimum price at the sale shall be the value of Arizona's interest in the land as determined by the preceding appraisal, including the increased value resulting from the development or improvements made by the applicant and his the applicant's predecessors in interest.
D. If the applicant is not the purchaser he shall be the applicant is entitled to receive from the proceeds of sale the amount of the increased value of the land, as determined by the appraisal, resulting from the development of or improvement of or on the land made by the applicant or his the applicant's predecessors in interest. If the applicant is the purchaser he shall be the applicant is entitled to an offset against the purchase price in the amount of the increased value resulting from said developments and improvements. The payment for these improvements shall be made in the manner specified in sections 37‑322 and 37‑322.02, except that obtaining the prior approval of the state for making the development or improvement shall not be a prerequisite to the applicant's recovery of the increased value of the land resulting therefrom and that the payment for the improvements may not be on installments.
Sec. 11. Section 37-260, Arizona Revised Statutes, is amended to read:
37-260. Selling and administrative expenses
Any application and any payment made to this state pursuant to sections 37‑257 and 37‑258 shall be exempt from the provisions of section 37‑108 37‑107. If the commissioner determines that an appraisal is required on the improvements, the purchaser of the land shall pay the actual cost of such appraisal.
Sec. 12. Section 37-281.02, Arizona Revised Statutes, is amended to read:
37-281.02. Leasing state lands for commercial purposes for more than ten years
A. All state lands are subject to lease as provided in this article for a term in excess of ten years, but not more than ninety‑nine years, for commercial purposes to the highest and best bidder at public auction. The auction shall be conducted at the place, in the manner, and after the notice by publication provided for sales of such lands except as otherwise provided in this section. For commercial leases of state land more than three miles outside the boundaries of incorporated cities and towns having a population of ten thousand persons or less or more than five miles outside the boundaries of incorporated cities and towns having a population in excess of ten thousand persons, the department shall cooperate with the county or counties in which the land to be leased is located in considering the intended uses. The leases shall be granted in accordance with the Constitution of Arizona, state laws and the rules of the department.
B. If the department determines that leasing of the land is in the best interest of the state, the tract or tracts shall be offered for lease to the highest and best bidder.
C. Each offer for lease shall reserve the right in the department to reject any and all bids and to again offer the tract or tracts for lease if the bids received are not acceptable to the department.
D. Upon announcement of the successful bidder, the first year's annual rental shall be paid by cashier's check. The successful bidder shall also pay the cost of the publication and reasonable expenses of the sale, and such funds shall be subject to the provisions of sections section 37‑107 and 37‑108. If there are bids exceeding the minimum bid accepted at the auction, the successful bidder has until 5:00 p.m. of the fifth business day following the date of the auction to deposit a cashier's check with the department for the amount exceeding the minimum bid for the first year's rent. The failure to pay the first year's rent at the time of the auction or to pay the amount exceeding the minimum bid by 5:00 p.m. on the fifth business day after the auction results in forfeiture of the lease and all monies paid. In the event of forfeiture the commissioner may declare that the bid placed before the final bid accepted is the highest bid, and that bidder has five business days after notification by the department to pay by cashier's check all amounts due under this section and section 37‑108 37‑107.
E. Before acceptance of any bid for a lease under this section, the department shall establish to its satisfaction the responsibility of the bidder.
F. Each lease shall be for a term in excess of ten years, but not more than ninety‑nine years, as determined by the department, and shall provide for an annual rental of not less than the appraised fair market rental value of the land. The department shall establish a rental adjustment formula by which the rental provided for in the lease is subject to adjustment after periods of time specified in the lease. A period of time shall not exceed five years. The department shall include a rental adjustment formula in each lease. The rental for the first five‑year period and the rental adjustment formula for that lease shall be established by the department prior to the call for bids. The department shall publish in the call for bids the rental for the first period and the rental adjustment formula for that lease.
G. A lease issued under this section may include an amortization schedule to be used to determine the value of improvements when the lease is terminated.
H. All provisions of this title applicable to state lands and the lease thereof, not in conflict with the provisions of this section, shall apply to leasing and leases issued under this section.
I. The department shall require an applicant to pay a deposit before beginning to process an application to lease state trust lands if the applicant did not bid at an auction where the applicant initiated the process. The deposit shall be based on the approximate first year rental plus administrative expenses and shall be deposited in a noninterest bearing account. Monies must be deposited at the time of filing an application or at a time determined by the commissioner. If the applicant is not the successful bidder at public auction, the department shall refund the deposit to the applicant. If the applicant is the successful bidder, the department shall apply the deposit to the rental price at auction. If there are no bids at the time of the auction, the department shall transfer the deposit made by the applicant to the appropriate trust beneficiary .
Sec. 13. Section 37-285, Arizona Revised Statutes, is amended to read:
37-285. Rental rates for grazing and other lands; grazing land valuation commission; reclassification and reappraisal; definitions
A. An agricultural, commercial or homesite lease shall provide for an annual rental of not less than the appraised rental value of the land, and never less than five cents per acre per year. The rental provided in such leases is subject to adjustment each year.
B. A grazing lease shall provide for an annual rental of the grazing land as computed under this section. All grazing land shall be classified and appraised on the basis of its forage and annual carrying capacity, measured in animal unit months. The annual rental rate for grazing land shall be the amount determined by multiplying the number of animal unit months to be grazed on the lands by the true value rental rate per animal unit month as established by the commissioner. The rental rate per animal unit month is the rental rate determined by the commissioner based on the recommendations of the grazing land valuation commission under subsection E of this section.
C. Before September 1, 1994, and at other times the commissioner may propose, but not more frequently than every five years, the governor shall appoint a grazing land valuation commission consisting of five members appointed by the governor pursuant to section 38‑211. The commission shall serve for a period of one year from the date the members assume office during which period the commission shall complete the appraisal. The commission shall consist of the following members, each of whom shall have experience in analyzing and valuing the use of forage on grazing land:
1. One member who is a professional appraiser and who is certified in this state.
2. One member who is a professor and who serves on the faculty of the college of agriculture at the university of Arizona.
3. One member who is a retired employee of a financial institution that is actively engaged in agricultural lending.
4. One member who primarily derives income from livestock grazing and who does not hold a state lease.
5. One member who is a conservationist and who represents a natural resource conservation district in this state.
D. Each member of the grazing land valuation commission shall receive compensation at the rate of one hundred dollars for each meeting. Each member of the commission shall receive reimbursement for expenses pursuant to title 38, chapter 4, article 2.
E. The grazing land valuation commission may employ a person who is experienced in analyzing and valuing the use of forage on grazing land and who, together with the members of the commission, shall gather the information that is necessary to prepare an appraisal to determine the true value of the use of forage on state grazing land and shall prepare this appraisal using both the market and income approaches. The appraisal report shall recommend a grazing fee that will equal the true value as recommended by the commission. The information and work products gathered in preparing the appraisal shall be available to the public. In determining the rental rate using the market approach the commission shall determine the typical lease of two years or more of private grazing land located in this state during normal years. The commission shall compare all factors that make up the bundle of rights and obligations in the typical private lease with the factors that make up the bundle of rights and obligations in the typical state lease. The commission shall document all adjustments, calculations and assumptions made in reaching a conclusion of true rental value for the state land grazing fee and shall determine economic benefit, burden or value attributable to each of these factors. These factors shall include the following:
1. All services, equipment and water rights provided by the lessor or lessee.
2. All improvements typically constructed and maintained to facilitate or enhance the use of the land for livestock grazing, wildlife, hunting or recreation.
3. All management and protection services that are typically provided.
4. The tenure, right to renew, assignability, right to reimbursement for improvements, responsibility for property taxes, right of others to share in the use of the land and ability to control access by others.
5. The size, location, accessibility, condition and carrying capacity of the land being leased and all related costs.
F. The commissioner's decision under this section may be appealed by any affected lessee to the board of appeals pursuant to section 37‑215, and, except as provided in section 41‑1092.08, subsection H, the decision of the board of appeals may be appealed to the superior court pursuant to title 12, chapter 7, article 6.
G. The commissioner may make a reclassification or reappraisal, or both, at any time. If a reclassification or reappraisal, or both, is made pursuant to a request of a lessee, before expiration of the lease, the leasee lessee shall pay the a reclassification fee prescribed by pursuant to section 37‑108 37‑107 plus the actual expenses incurred in making a reappraisal.
H. The department may authorize nonuse for part or all of the grazing use upon request of the lessee at least sixty days prior to the beginning of the billing date. The rental fee shall be based on the animal unit months used, but the total rental fee for partial or full nonuse shall not be less than five cents per acre per year.
I. In For the purposes of this section:
1. "Animal unit" means one weaned beef animal over six months of age, or one horse, or five goats, or five sheep, or the equivalent.
2. "Animal unit month" means one animal unit grazing for one month.
Sec. 14. Section 37-313, Arizona Revised Statutes, is amended to read:
37-313. Conservation lease of trust lands suitable for conservation; definition
A. The commissioner may sell leases of trust land for conservation purposes to a qualifying lessee when it is in the best interest of the trust. The conservation lease may authorize the lessee to protect the conservation and open space value of the land in cooperation with other lessees of the land, consistent with the plan adopted under section 37‑312. The commissioner retains the right to authorize other compatible uses of the land.
B. The term of the lease may be for less than ten years or for at least ten but not more than fifty years. The sale of any lease shall be:
1. At public auction.
2. Based on one independent appraisal and one independent review appraisal, both of which may be reviewed by the department, of the fair market value of the interest in the trust land that is being offered, including mineral, sand and gravel and oil and gas value.
3. Consistent with the requirements of the Constitution of Arizona, applicable provisions of this title and rules adopted by the commissioner.
C. If an existing lease is not renewed as a result of any action taken pursuant to this article and the conservation lessee and the existing lessee cannot agree on compensation, the commissioner shall determine the amount of reasonable compensation for damages sustained by the existing lessee after considering the following factors:
1. The actual use of the leased land.
2. The rentals paid during the term of the lease.
3. The actual amount of economic damage to the production unit caused by the failure to renew. In determining the amount of economic damage to the production unit, the commissioner shall not limit the scope of review to only that portion of the lands involved in the reclassification but shall take into consideration the impact of the loss of these lands on the overall production unit, including situations in which other leased or private lands are necessary and have been leased by the existing lessee for operation as a production unit.
4. Other factors that the commissioner or the existing lessee determine to be relevant.
D. The conservation lessee shall make payments for reimbursement or compensation, or both, as established in this section to the existing lessee at the time the lease is not renewed. This section does not prevent the payment for reimbursement or compensation, or both, from being made in installments if the former lessee and conservation lessee agree to installment payments.
E. If trust lands that are leased pursuant to this section are subject to a current planning permit under article 5.1 of this chapter, the succeeding lessee shall reimburse the holder of the permit as provided by section 37‑338.
F. The department shall make application forms available for leases. The application form shall contain a statement under penalty of perjury that the person signing the application represents that the information in the application is complete and correct. A material false statement or omission of facts in the application is cause for canceling a conservation lease that was issued based on the application.
G. At the time of application the applicant shall post a bond pursuant to section 37‑108 37‑107. The bond is forfeit to this state if no bidder bids at the auction for the conservation lease.
H. The successful bidder shall pay the first year's annual rental and other costs pursuant to section 37‑281.02, subsection D and section 37‑108 37-107.
I. If the applicant did not bid at a previous auction where the applicant initiated the process, the department shall require the applicant to pay a deposit pursuant to section 37‑281.02, subsection I.
J. A lessee under a conservation lease shall not:
1. Use the lands for any purpose other than that for which the lease was issued.
2. Sublease the lands except to another qualifying lessee and on approval by the commissioner.
3. Inhibit or interfere with other existing leases.
K. A state land trust beneficiary may lease trust land under this section but may not make payments on the lease from monies that were received from the state trust.
L. For purposes of this section "qualifying lessee" includes:
1. The United States or an agency or instrumentality of the United States.
2. An agency of this state, including a state land trust beneficiary.
3. A county, city, town, school district, community college district or special taxing district or any of their agencies or instrumentalities.
4. An individual or a private organization or entity that is legally empowered to own or manage real property in this state.
Sec. 15. Section 37-314, Arizona Revised Statutes, is amended to read:
37-314. Conveyance of title to trust lands suitable for conservation purposes
A. The commissioner may sell or otherwise transfer title to trust lands suitable for conservation purposes when it is in the best interest of the trust.
B. A sale of trust land under this section shall be:
1. At public auction.
2. Based on one independent appraisal and one independent review appraisal, both of which may be reviewed by the department, of the fair market value of the trust land that is being offered. The appraisal shall not take into consideration the conditions or covenants which may be imposed under subsection C of this section in order to reduce the appraised value.
3. Consistent with the requirements of the Constitution of Arizona, applicable provisions of this title and rules adopted by the commissioner.
C. The terms of the sale may include the condition that the conveyance of title is subject to a covenant that runs with the land and that the land shall be used only for purposes that are consistent with the conservation of specifically named resources or public values.
D. The commissioner shall include the applicable conditions under subsection C of this section in any public notices relating to the sale under this section.
E. If the trust land is sold subject to a lease and the lease is canceled or modified due to a sale of land under this section and the purchaser and the existing lessee cannot agree on compensation, the commissioner shall determine the amount of reasonable compensation for damages sustained by the existing lessee after considering the following factors:
1. The time remaining in the term of the lease at the time that the lease is canceled or modified.
2. The actual use of the leased land.
3. The rentals paid during the term of the lease.
4. The actual amount of economic damage to the production unit caused by the cancellation or modification. In determining the amount of economic damage to the production unit, the commissioner shall not limit the scope of review to only that portion of the lands involved in the reclassification but shall take into consideration the impact of the loss of these lands on the overall production unit, including situations in which other leased or private lands are necessary and have been leased by the existing lessee for operation as a production unit.
5. Other factors that the commissioner or the existing lessee determine determines to be relevant.
F. The purchaser shall make payments for reimbursement or compensation, or both, as established in this section to the existing lessee at the time of sale. This section does not prevent the payment for reimbursement or compensation, or both, from being made in installments if the existing lessee and purchaser agree to installment payments.
G. If trust lands that are conveyed pursuant to this section are subject to a current planning permit under article 5.1 of this chapter, the transferee shall reimburse the holder of the permit as provided by section 37‑338.
H. At the time of application the applicant shall post a bond pursuant to section 37‑108 37‑107. The bond is forfeit to this state if no bidder bids at the auction for the sale of the land.
Sec. 16. Section 37-604, Arizona Revised Statutes, is amended to read:
37-604. Exchange of state land; procedure; limitation and exceptions
A. The state land department and selection board, for proper management, control, protection or public use of state lands, may exchange state lands managed by the department for any other land within the state. The state land department and selection board, to encourage compatible use of lands near military airports, may exchange state lands managed by the department for private lands near military airports. Exchanges may be made for land owned or administered by other state agencies, counties, municipalities and private parties. Exchanges with the United States or its agencies shall be in conformance with section 37‑722, but the department shall also follow the procedures for notifying interested parties prescribed by subsection C, paragraph 5 of this section and the classification procedures in section 37‑212.
B. The department shall adopt rules governing the application and procedure for the exchange of state land. Such rules shall include the following requirements:
1. The application shall include:
(a) The name, age and residence of the applicant.
(b) A legal description of all lands to be considered for exchange.
(c) A list of permanent improvements on the state lands to be considered for exchange.
(d) A list of the leasehold interest in the state land to be considered for exchange.
(e) Accompanying agreements, if any, with the leaseholder or owner of improvements on the state land to be considered for exchange.
2. Payment of the fee fees prescribed by for that purpose pursuant to section 37‑108 37‑107.
3. Such additional requirements as the department determines to be necessary. Upon completion of processing and analyzing the application, and on determining that the proposed exchange would benefit the applicable trust, the department shall notify and deliver a report containing details of the proposed exchange to members of the selection board. At the same time the department shall also notify and provide the report to the state legislators from the legislative districts in which the lands proposed to be exchanged are located.
C. Exchanges of state lands are subject to the following requirements:
1. The commissioner shall determine by at least two independent appraisals that the state lands being considered for exchange are of substantially equal value or of lesser value than the land offered by the applicant. However, the commissioner may determine that rural lands being exchanged to consolidate land ownership for management purposes require only one independent appraisal. The commissioner may require the applicant to pay the cost of appraisals.
2. No county or municipality may be permitted to select lands in another county or municipality.
3. State lands known to contain oil, gases and other hydrocarbon substances, coal or stone, metals, minerals, fossils and fertilizer, in paying quantities, and state lands adjoining lands upon which there are producing oil or gas wells, or adjoining lands known to contain any of such substances in paying quantities shall not be exchanged. These prohibitions against exchange shall not prevent the exchange of lands where the state does not own such substances, minerals or metals in the lands to be considered for exchange.
4. All state lands offered for trade pursuant to this section must be located in the same county as the lands offered to the state. However, lands in adjoining counties more than three miles outside the corporate boundaries of incorporated cities and towns having a population of ten thousand people or less and lands in adjoining counties but more than five miles outside the corporate boundaries of incorporated cities and towns having a population in excess of ten thousand people may be exchanged to facilitate consolidating land ownership if the boards of supervisors of the counties in which lands are to be exchanged give their prior approval.
5. Prior to public notice of a proposed exchange of state lands for other lands, the department and selection board shall give thirty days' notice in writing to other interested state agencies, counties, municipalities, and leaseholders on state lands that are or may be affected by the exchange.
6. Before any state land may be considered for exchange under the provisions of this article, the land shall be classified as suitable for such purposes in accordance with the provisions of section 37‑212. Any person adversely affected by such classification may appeal from the decision as provided in section 37‑215.
7. The department shall publish notice of all proposed exchanges in the same manner and places as is required for the sale of state lands pursuant to section 37‑237, except that the notice shall be published once each week for four consecutive weeks. The notice shall contain a legal description of the properties involved and other pertinent terms and conditions of the exchange. The department shall also schedule a public hearing on the exchange contemplated in the notice. The hearing shall be held at the county seat of the county in which the state lands proposed to be exchanged are located or in the county in which the majority of the state lands is located. The hearing shall be held not less than fifteen days prior to the date of the selection board's consideration of the proposed exchange, and any person may appear and protest the proposed exchange at that time.
D. Lands conveyed to the state under this article shall, upon acceptance of title and recording, be dedicated to the same purpose and administered under the same laws to which the lands conveyed were subject, but may be reclassified as provided in section 37‑212.
Sec. 17. Section 37-615, Arizona Revised Statutes, is amended to read:
37-615. Exchange of road rights‑of‑way on state land; procedure; limitation and exceptions
A. The state land department and selection board, for reasons of proper management, control, protection, or public use of state lands, may exchange road rights‑of‑way over state lands managed by the state land department for road rights‑of‑way over any other land within the state. The exchange may be made for road rights‑of‑way over land owned or held by the United States or an agency thereof, other state agencies, counties or municipalities and privately owned lands.
B. The state land department shall adopt rules governing the application and procedure for exchange of road rights‑of‑way over state land. Such rules shall include the following requirements:
1. The application shall include:
(a) The name, age and residence of the applicant.
(b) A description of all road rights‑of‑way sought to be exchanged.
(c) A list of permanent improvements on the road rights‑of‑way to be exchanged.
(d) Any leasehold interest in the land affected by the proposed exchange.
(e) Accompanying agreements, if any, with the leaseholder or owner of improvements on the land affected by the proposed exchange.
2. Payment of the fee fees prescribed by for that purpose pursuant to section 37‑108 37‑107.
3. An application initiated by a private owner shall be accompanied by a deposit equal to the estimated cost of appraising the value of the road rights‑of‑way on any privately owned property to be exchanged.
4. Such additional requirements may be imposed as the state land department from time to time determines to be necessary.
C. The exchange of road rights‑of‑way over state lands shall be subject to the following requirements:
1. All road rights‑of‑way exchanged shall be of substantially equal value.
2. All road rights‑of‑way over state lands offered for trade pursuant to this section must be located in the same county as the road rights‑of‑way over lands offered to the state.
3. Prior to any exchange of road rights‑of‑way over state lands for road rights‑of‑way over privately owned lands, the state land department and selection board shall give thirty days' notice in writing to other interested state agencies, counties, municipalities, and leaseholders on such lands that are or may be affected by the trade.
4. Before any road rights‑of‑way over state land may be considered for exchange under the provisions of this article, the land shall be classified as suitable for such purposes in accordance with the provisions of section 37‑212.
5. Any person adversely affected by such decision may appeal from the decision as provided in section 37‑215.
D. Any person may, within ten days of the date of notice as provided herein, file a written protest of the exchange at the state land department offices at the state capitol upon forms provided by the state land department. Upon receipt of such a protest to a contemplated exchange pursuant to this section, the state land commissioner shall, not later than thirty days after receipt of the protest, hold a public hearing at the county seat of the county in which the state lands proposed to be exchanged are located to hear any and all matters properly subject to the proposed exchange. Notice of the public hearing shall be mailed to all protestants and published one time prior to the date of the hearing in a newspaper of general circulation in the county.
Sec. 18. Exemption from rule making
The state land commissioner is exempt from the rule making requirements of title 41, chapter 6, Arizona Revised Statutes, for one year after the effective date of this act for the purpose of prescribing and reestablishing, pursuant to section 37-107, subsection A, Arizona Revised Statutes, as added by this act, the amount of fees that were already in existence pursuant to prior law. For this purpose, the commissioner shall not increase the amount of any fee in existence under prior law. This section does not apply to any fee that was not in existence under prior law.
Sec. 19. Fiscal year 2010-2011 fee deposits
Notwithstanding section 37-107, subsection A and subsection C, paragraph 1, Arizona Revised Statutes, as added by this act, the first $2,060,000 received by the state land department from fees established pursuant to those provisions shall not be deposited in the trust land management fund, but shall be transmitted to the state treasurer for deposit in the state general fund.
Sec. 20. Retroactivity
Section 37-107, Arizona Revised Statutes, as added by this act, and section 18 of this act apply retroactively to from and after June 30, 2010.
