HB 2755

Senate Engrossed
  House Bill
state land use; highest; best
(now:� state lands;
  commercial leases; auction)
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HOUSE BILL 2755
AN
ACT
amending section 37-102, Arizona
Revised Statutes; Amending title 37, chapter 2, article 4, Arizona Revised
Statutes, by adding section 37-281.05; RELATING to state lands.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it
enacted by the Legislature of the State of Arizona:
Section 1. Section 37-102, Arizona Revised
Statutes, is amended to read:
START_STATUTE37-102. State land department; powers and duties
A. The state land department shall administer all
laws relating to lands owned by, belonging to and under the control of this
state.
B. The department shall have charge and control of
all lands owned by this state, and timber, stone, gravel and other products of
such lands, except lands under the specific use and control of state
institutions and the products of such lands.
C. The department, in the name of this state, may
commence, prosecute and defend all actions and proceedings to protect the
interest of this state in lands within this state or the proceeds of lands
within this state. Actions shall be commenced and prosecuted at the
request of the department by the attorney general, a county attorney or a
special counsel under the direction of the attorney general.
D. The department shall be the official
representative of this state in any communication between this state and the
United States government in all matters respecting state lands or any interest
of this state in or to the public lands within this state.
E. The summons in any action against this state
respecting any lands of this state or the products of such lands and all
notices concerning such lands or products shall be served on the commissioner.
Summonses, warrants or legal notices served on behalf of the department may be
served by the commissioner or the commissioner's deputy, or by the sheriff or a
constable of any county of this state.
F. The department shall maintain as a public record
in each of the department's offices a public docket and index of all matters
before the department that may be subject to appeal to the board of appeals or
to the courts and all sale, exchange and lease transactions subject to bidding
by the public. The department shall list a matter on the public docket
immediately after an application or other request for department action is
received by the department. The department shall include in the
public docket every formal action and decision affecting each matter in
question. The department shall establish by rule a means by which
any person may obtain a copy of the public docket at the current copying cost.
G. The department shall reappraise or update the
department's original appraisal of property to be leased, exchanged or sold if
the board of appeals' approval of the lease or sale occurred more than two
hundred forty days before the auction.
H. To the extent possible, the state land department
shall:
1. Prepare maps of the ancillary military facilities
described in section 28-8461, paragraph 7, subdivisions (b) and (c).
2. Make a map of the ancillary military facility
described in section 28-8461, paragraph 7, subdivision (a) available to
the public in printed or electronic format and provide the map in printed or
electronic format to the state real estate department.
3. On receipt of proper information from the
military installation commander with responsibility for the military
electronics range, prepare a map of the military electronics range as defined
in section 9-500.28 and make that map available to the public in printed
or electronic format and provide the map in printed or electronic format to the
state real estate department. Within ninety days after receipt of notice of any
change in the boundaries of the military electronics range from the military
installation commander, the state land department shall revise its map and
provide the map to the public and to the state real estate department.
4. On or before December 31, 2024 and on receipt of
proper information from the applicable military installation's and range's and
Arizona national guard site's commanders, prepare electronic legal descriptions
and maps of the military installation and range and Arizona national guard site
and their respective influence areas as defined in sections 9-500.50 and
11-818.01 and provide the legal descriptions and maps to the state real
estate department and the public.� The state land department shall make changes
to the boundaries of the military installation and range and national guard
site and their respective influence areas and provide them to the state real
estate department and the public within ninety days after receipt of those
changes from the military installation's and range's and Arizona national guard
site's commanders.
5. Provide ample notice to a lessee
of an underperforming commercial lease before the termination of the
underperforming commercial lease.
I. The state land department shall provide each map
and the legal description of the boundaries of each ancillary military facility
described in section 28-8461, paragraph 7 in electronic format to the
state real estate department. Each map prepared by the state land
department pursuant to this section shall:
1. Describe the ancillary military facility, the
territory in the vicinity of the ancillary military facility and the high noise
and accident potential zone, accident potential zone one and accident potential
zone two associated with the ancillary military facility.
2. Be submitted to the county in which the ancillary
military facility is located.
3. Be made available to the public.
J. The state land department shall prepare a
military training route map. The map shall contain military training route
numbers in this state that are used by various United States armed forces. The
map shall be dated.
K. When preparing the
military training route map, the state land department shall use information
contained in the most current department of defense publication that is
entitled "area planning military training routes for North and South
America".
L. The military training route map shall be made
available to the public.
M. Within ninety days after the department is
notified of a change of a military training route in this state, the department
shall prepare a revised military training route map. The map shall be dated and
contain a statement that the map supersedes all previously dated maps. The
state land department shall send the revised map to the state real estate
department electronically and shall also send an accompanying letter specifying
the military training route changes. The state land department shall send the
revised map and an accompanying letter specifying the military training route
changes to the municipalities affected by the changes and to all counties.
N. The department shall submit the military training
route map prepared pursuant to this section to the counties in either an
electronic or a printed format. The format shall be determined by the receiving
county.
O. The state land department shall provide the legal
description of the boundaries of the military training routes as delineated in
the military training route map to the state real estate department in
electronic format.
P. The state land department shall prepare a
military restricted airspace map. The map shall contain military restricted
airspace in this state that is used by various United States armed forces. The
map shall be dated.
Q. When preparing the military restricted airspace
map, the state land department shall use information contained in the most
current department of transportation publication that is entitled
"aeronautical chart".
R. The military restricted airspace map shall be
made available in printed or electronic format to the public at the state land
department and at the state real estate department.
S. Within ninety days after the department is
notified of a change of military restricted airspace in this state, the
department shall prepare a revised military restricted airspace
map. The map shall be dated and contain a statement that the map
supersedes all previously dated maps. The state land department shall send the
revised map to the state real estate department electronically and shall also
send an accompanying letter specifying the military restricted airspace
changes. The state land department shall send the revised map and an
accompanying letter specifying the military restricted airspace changes to the
municipalities affected by the changes and to all counties.
T. The department shall submit the military
restricted airspace map prepared pursuant to this section to the counties in
either an electronic or a printed format. The format shall be
determined by the receiving county.
U. The state land department shall provide the legal
description of the boundaries of the military restricted airspace as delineated
in the military restricted airspace map to the state real estate department in
electronic format.
V. The department may accept title to and manage
real estate, property rights and related infrastructure acquired pursuant to
section 26-262, subsection K for preserving or enhancing military
installations in this state. END_STATUTE
Sec. 2. Title 37, chapter 2, article 4, Arizona
Revised Statutes, is amended by adding section 37-281.05, to read:
START_STATUTE37-281.05. Lease of state lands for commercial purposes; underperforming
commercial leases; option to purchase; auction; definitions
A. Notwithstanding any other law, the
commissioner shall prioritize the sale of state lands that are subject to an
underperforming commercial lease if the lessee provides notice to the
department that the lessee is willing and prepared to purchase the parcel in
fee simple consistent with this section.
B. A person who holds an
underperforming commercial lease or who held an underperforming commercial
lease that expired less than one year before the date of application may apply
to purchase the underperforming commercial state lands. Within
eighteen months after receiving an application submitted pursuant to this
subsection, the commissioner shall appraise, advertise and cause the
underperforming commercial state lands to be sold at public auction to the
highest and best bidder.
C. A person who meets the
requirements of this section and wishes to purchase the underperforming
commercial state lands may do either of the following:
1. Submit a single application for
multiple eligible parcels that the applicant leases.
2. Submit a separate application for
each eligible parcel that the applicant leases.
D. Each public auction that the
commissioner holds pursuant to this section shall be open to all eligible
bidders from all commercial land uses. The commissioner may not take any action
during the public auction or before the public auction that increases the
probability of a bidder from one eligible land use winning the public auction
instead of a bidder from another eligible land use.
E. If an applicant's underperforming
commercial lease expires or if an applicant applies to renew the
underperforming commercial lease during the eighteen-month time frame
established pursuant to this section and the applicant does not withdraw the
application to purchase, the commissioner shall proceed with the auction.
F. A person may not trigger a public
auction pursuant to this section on underperforming commercial state lands if
the person does not hold or has not held an underperforming commercial lease of
the state lands subject to application in the previous eighteen months before
application.
g. For the purposes of this section:
1. "Underperforming commercial
lease" means a valid lease or a valid holdover lease of underperforming
commercial state lands.
2. "Underperforming commercial
state lands" means a parcel of state lands that is leased for commercial
purposes and that meets at least one of the following conditions:
(a) The size of
the parcel prevents its independent development.
(b) The parcel
is landlocked.
(c) The parcel
lacks on-site infrastructure or services necessary to independently sustain the
parcel�s development.
(d) The annual
base rent on the parcel is below an acceptable percentage of the appraised fair
market value of the parcel as determined by the commissioner.
(e) The rate of
appreciation in land value on the parcel is faster than the rate of increase in
annual base rent on the parcel.
(f) The
appraised fair market value of the approved reimbursable improvements on the
parcel exceeds the appraised fair market value of the parcel such that the
value of the improvements will reduce the sale value to the trust by a
percentage deemed unacceptable to the commissioner.END_STATUTE
Sec. 3. Legislative findings
The legislature, as the trustee of the Arizona state land trust, finds
that:
1. Over an extended period
the state land department has created a significant number of underperforming
commercial leases of state lands.
2. Underperforming
commercial leases burden the state land department with excessive costs and
management responsibilities and generate insufficient returns to the state land
trust.
3. Continually renewing
underperforming commercial leases merely perpetuates the management costs and
burdens and is not in the best interest of this state or in the best interest
of the state land trust.
4. The highest and best use
of state trust lands that are subject to underperforming commercial leases is
to allow the state trust lands to be sold at public auction to the highest and
best bidder.
5. This act is necessary to
ensure the best interest of the state land trust, state land trust
beneficiaries and this state.