SB1746 - 571R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 41-792.01, Arizona Revised Statutes, is amended to read:

START_STATUTE41-792.01. Capital outlay stabilization fund; authorization for collection of rental; basis of payment; report; distribution of monies collected; transfer of payment; lease-purchase building operating and maintenance fund; definition

A. The capital outlay stabilization fund is established which shall consist of monies paid into it in accordance with subsections D and F of this section and legislative appropriations to the account. All monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

B. The director shall make a recommendation for the allocation of a varying sum to the capital outlay stabilization fund each year. No part of the fund may be expended without specific appropriation from the legislature.

C. Each state department and each state agency when using space under the jurisdiction of the department as prescribed in section 41-791 or when using space in a building leased to the state shall pay rental and tenant improvement labor costs as prescribed in subsection D, E or F of this section.

D. The rental rates authorized for agencies occupying state-owned buildings shall be determined by the joint committee on capital review after recommendation by the director before July 1 of each even-numbered year. The rental is payable whether the state department or state agency is funded in whole or in part by state monies. The department of administration shall transfer the entire amount of the rental fee assessed on a state agency from the agency account into the capital outlay stabilization fund promptly at the start of each fiscal year. During the remainder of the fiscal year, the department of administration shall calculate pro rata adjustments to the rental fee on a monthly basis to reflect any changes in the occupancy of state-owned buildings. The department of administration shall transfer the amount of the rental fee adjustment assessed on a state agency from the agency account into the capital outlay stabilization fund. The rental fee authorized for state agencies occupying state-owned buildings is the greater of the amount included in each agency's annual operating budget as reported by the staff of the joint legislative budget committee or the pro rata adjusted amount based on actual occupancy. The director of the department of administration may authorize an exemption for periods of one year or more at a time for a state agency from the full payment account transfer requirements of this subsection if the agency can demonstrate a practice of making full payment of rent on a different basis necessitated by its cash flow. If a state agency does not have the financial resources for state-owned space, or does not occupy or vacates state-owned space after the beginning of the fiscal year, the director of the department of administration may authorize a whole or partial exemption from payment of the rental fee. Before authorizing a rental fee exemption On or before June 30 of each year, the department of administration shall submit a report the proposed rental fee exemption to the staff of the joint legislative budget committee that details all rental fee exemptions authorized in the prior year.

E. The rental authorized for state agencies occupying state-leased buildings shall be the greater of the amount included in each agency's annual operating budget as reported by the staff of the joint legislative budget committee or the pro rata adjusted amount based on actual occupancy. The rental amount shall include the amount necessary to pay the lease or lease-purchase obligation and may include the amount necessary to pay operating costs associated with the lease-purchase buildings. The rental is payable whether the state department or state agency is funded in whole or in part by state monies. At the start of each fiscal year, the department of administration shall transfer the entire amount of the rental fee assessed on a state agency from the agency account into the department of administration's funds established for the purposes of this subsection. The department shall transfer from the applicable state agency budgets to the lease-purchase building operating and maintenance fund established in subsection I of this section amounts necessary to pay all operating costs associated with a lease-purchase building in the amounts reported by the staff of the joint legislative budget committee. During the remainder of the fiscal year, the department of administration shall calculate pro rata adjustments to the rental fee on a monthly basis to reflect any changes in the occupancy of state-leased buildings. The director of the department of administration may authorize an exemption for a state agency from the full payment account transfer requirements of this subsection for one-year periods or longer periods if the agency can demonstrate a practice of making full payment of rent on a different basis necessitated by its cash flow. If a state agency does not have the financial resources for state-leased space, or does not occupy or vacates state-leased space after the beginning of the fiscal year, the director of the department of administration may authorize a whole or partial exemption from payment of the rental fee. Before authorizing a rental fee exemption, the department of administration shall report the proposed rental fee exemption to the staff of the joint legislative budget committee.

F. The department of administration shall charge state agencies for the full costs of labor services it provides to accomplish tenant improvement projects within a building owned by or leased to the state. Charges for this labor shall be deposited in the capital outlay stabilization fund.

G. State universities, community colleges and the department of transportation are exempt from the provisions of this section, except when these state agencies are using space under the jurisdiction of the department of administration.

H. The department of administration shall not begin to charge rental or tenant improvement labor costs as prescribed in subsection D, E or F of this section until July 1, 2012 for any buildings operated by the secretary of state primarily for the purpose of storing, managing or preserving a large amount of public records or archival material.

I. The lease-purchase building operating and maintenance fund is established consisting of monies transferred into it in accordance with subsection E of this section. All monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations. Monies in the fund are subject to legislative appropriation.

J. For the purposes of this section, buildings leased by this state through the sale and lease-back deficit financing mechanism are considered state-owned buildings. State-leased buildings that are subject to subsection E of this section and that meet the requirements of section 41-791, subsection B are subject to subsection D of this section in the fiscal year following the retirement of the lease or lease-purchase debt service financing. On or before September 1 of each year, the department of administration shall report to the joint legislative budget committee and the governor's office of strategic planning and budgeting on the cost associated with charging rental rates to state agencies with retired leases or lease purchases for the next fiscal year.

K. For the purposes of this section, "state department" or "state agency" means any department or agency of the executive or judicial branch of state government. END_STATUTE

Sec. 2. Rental rates; state-owned buildings; fiscal year 2025-2026

Notwithstanding section 41-792.01, subsection D, Arizona Revised Statutes, as amended by this act, the capital outlay stabilization fund rental rates for state-owned buildings in fiscal year 2025-2026 are $17.87 per square foot for office space and $6.43 per square foot for storage space.

Sec. 3. Laws 2025, chapter 35, section 1 is amended to read:

Section 1. Transfer; conditions

A. The title of state sovereign land described in subsection B of this section is transferred from the state land department to the city of Bullhead City, a municipal corporation in this state, on the effective date of this act.

B. The state sovereign lands referred to in subsection A of this section are described as follows:

1. A parcel of state sovereign land lying within section 32, township 20 north, range 22 west of the Gila and Salt River meridian, Mohave county, Arizona, being more particularly described as follows:

Commencing at the northeast northwest corner of section 2, township 19 north, range 22 west, said corner also being on the south line of said section 32 and the point of beginning; thence south 89 degrees 57 minutes 52 seconds east along the south line of said section 32 a distance of 100.09 feet; thence leaving said south line north 26 degrees 36 minutes 28 seconds west a distance of 213.01 feet; thence north 36 degrees 39 minutes 20 seconds west along the westerly line of palo verde place tract 4006 A and 4006 C, being recorded subdivisions, a distance of 2878.64 feet to a point on the northerly line of said palo verde place tract 4006 C; thence north 89 degrees 33 minutes 32 seconds west along said northerly line a distance of 307.67 307.69 feet to a point on the ordinary high-water line (OHWL) of the Colorado River; thence along said OHWL the following courses: south 39 degrees 39 minutes 50 seconds east a distance of 58.95 feet; south 30 degrees 48 minutes 14 seconds east a distance of 370.79 feet; south 23 degrees 07 minutes 10 seconds east a distance of 76.05 feet; south 28 degrees 54 minutes 17 seconds east a distance of 290.69 feet; south 59 degrees 05 minutes 56 seconds east a distance of 68.71 feet; south 26 degrees 55 minutes 25 seconds east a distance of 101.01 feet; south 24 degrees 55 minutes 28 seconds east a distance of 92.73 feet; south 21 degrees 57 minutes 10 seconds east a distance of 99.17 feet; south 19 degrees 43 minutes 06 seconds east a distance of 94.88 feet; south 14 degrees 43 minutes 19 seconds east a distance of 90.91 feet; south 19 degrees 58 minutes 56 seconds east a distance of 95.37 feet; south 09 degrees 39 minutes 18 seconds east a distance of 106.52 feet; south 12 degrees 43 minutes 46 seconds east a distance of 95.40 feet; south 13 degrees 10 minutes 24 seconds east a distance of 96.88 feet; south 18 degrees 14 minutes 04 seconds east a distance of 96.82 feet; south 17 degrees 02 minutes 31 seconds east a distance of 95.92 feet; south 11 degrees 18 minutes 07 seconds east a distance of 89.88 feet; south 10 degrees 40 minutes 56 seconds east a distance of 96.07 feet; south 11 degrees 00 minutes 40 seconds east a distance of 93.09 feet; south 12 degrees 47 minutes 08 seconds east a distance of 100.82 feet; south 04 degrees 18 minutes 03 seconds east a distance of 101.78 feet; south 08 degrees 21 minutes 59 seconds east a distance of 106.77 feet; south 01 degrees 22 minutes 04 seconds west a distance of 98.08 feet; south 02 degrees 12 minutes 08 seconds west a distance of 91.80 feet to a point on the south line of said section 32; thence along said south line south 89 degrees 59 minutes 00 seconds east a distance of 1142.94 feet to the point of beginning.

2. A parcel of state sovereign land lying within section 1, township 20 north, range 22 west of the Gila and Salt River meridian, Mohave county, Arizona, being more particularly described as follows: commencing at the southeast corner of section 1, township 20 north, range 22 west; thence north 50 degrees 58 minutes 32 seconds west a distance of 3610.99 feet to a point on the OHWL of the Colorado River and the point of beginning; thence along said OHWL the following courses: north 18 degrees 36 minutes 39 seconds east a distance of 43.86 feet; north 09 degrees 18 minutes 55 seconds west a distance of 42.45 feet; north 73 degrees 10 minutes 05 seconds west a distance of 16.87 feet; south 86 degrees 03 minutes 07 seconds west a distance of 42.31 feet; south 71 degrees 36 minutes 03 seconds west a distance of 36.05 feet; south 48 degrees 08 minutes 11 seconds west a distance of 24.45 feet; south 02 degrees 10 minutes 19 seconds west a distance of 33.38 feet; south 12 degrees 17 minutes 36 seconds west a distance of 51.77 feet; south 58 degrees 11 minutes 10 seconds east a distance of 18.07 feet; north 86 degrees 05 minutes 23 seconds east a distance of 54.29 feet; north 55 degrees 23 minutes 20 seconds east a distance of 56.40 feet to the point of beginning.

3. A parcel of state sovereign land lying within section 1, township 20 north, range 22 west of the Gila and Salt River meridian, Mohave county, Arizona, being more particularly described as follows: commencing at the southeast corner of section 1, township 20 north, range 22 west; thence north 43 degrees 17 minutes 44 seconds west a distance of 3882.13 feet to a point on the OHWL of the Colorado River and the point of beginning; thence along said OHWL the following courses: north 27 degrees 53 minutes 56 seconds east a distance of 44.82 feet; north 16 degrees 47 minutes 20 seconds east a distance of 57.74 feet; north 18 degrees 55 minutes 21 seconds east a distance of 55.82 feet; north 28 degrees 45 minutes 29 seconds east a distance of 47.86 feet; north 21 degrees 54 minutes 57 seconds east a distance of 62.99 feet; north 16 degrees 44 minutes 03 seconds east a distance of 66.67 feet; north 14 degrees 56 minutes 38 seconds east a distance of 64.13 feet; north 04 degrees 51 minutes 05 seconds west a distance of 52.70 feet; north 12 degrees 24 minutes 01 seconds east west a distance of 33.79 feet; south 73 degrees 47 minutes 17 seconds west a distance of 25.54 feet; south 08 degrees 56 minutes 05 seconds west a distance of 37.67 feet; south 15 degrees 44 minutes 26 seconds west a distance of 37.40 feet; south 16 degrees 10 minutes 28 seconds west a distance of 38.95 feet; south 02 degrees 17 minutes 23 seconds east a distance of 32.31 feet; south 17 degrees 58 minutes 22 seconds west a distance of 49.70 feet; south 43 degrees 56 minutes 10 seconds west a distance of 45.77 feet; south 07 degrees 21 minutes 18 seconds east a distance of 25.77 feet; south 25 degrees 28 minutes 03 seconds east a distance of 20.38 feet; south 52 degrees 52 minutes 38 seconds west a distance of 38.39 feet; south 12 degrees 56 minutes 59 seconds west a distance of 49.68 feet; south 24 degrees 32 minutes 08 seconds west a distance of 47.00 feet; south 40 degrees 24 minutes 30 seconds west a distance of 46.08 feet; south 15 degrees 45 minutes 34 seconds west a distance of 12.95 feet; south 39 degrees 05 minutes 20 seconds east a distance of 34.15 feet; north 84 degrees 13 minutes 23 seconds east a distance of 32.08 feet to the point of beginning.

4. A parcel of state sovereign land lying within section 1, township 20 north, range 22 west of the Gila and Salt River meridian, Mohave county, Arizona, being more particularly described as follows: commencing at the southeast corner of section 1, township 20 north, range 22 west; thence north 47 degrees 15 minutes 38 seconds west a distance of 3778.28 feet to a point on the OHWL of the Colorado River and the point of beginning; thence along said OHWL the following courses: north 31 degrees 33 minutes 56 seconds east a distance of 37.74 feet; north 03 degrees 43 minutes 57 seconds east a distance of 53.18 feet; north 00 degrees 57 minutes 41 seconds east a distance of 59.84 feet; north 01 degrees 54 minutes 31 seconds west a distance of 41.65 feet; north 08 degrees 42 minutes 25 seconds east west a distance of 37.76 feet; north 50 degrees 51 minutes 43 seconds east west a distance of 22.70 feet; south 17 degrees 21 minutes 04 seconds west a distance of 35.78 feet; south 03 degrees 45 minutes 37 seconds west a distance of 23.01 feet; south 03 degrees 18 minutes 33 seconds west a distance of 48.68 feet; south 08 degrees 02 minutes 24 seconds west a distance of 54.75 feet; south 06 degrees 37 minutes 33 seconds east a distance of 47.06 feet; south 04 degrees 09 minutes 29 seconds east a distance of 29.03 feet; south 80 degrees 07 minutes 44 seconds east a distance of 15.83 feet to the point of beginning.

C. The state land commissioner shall deliver a properly signed and recorded deed or patent to the city of Bullhead City within thirty days after the effective date of this act.

D. The transferred land shall be managed by the city of Bullhead City for park and public recreation purposes perpetually and shall not be sold, exchanged or bartered.