REFERENCE TITLE: state land trust; best interest.

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HCR 2046

Introduced by

Representative Way

A CONCURRENT RESOLUTION

Proposing an amendment to the constitution of Arizona; amending article X, Section 3, Constitution of Arizona; RELATING to state lands.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it resolved by the House of Representatives of the State of Arizona, the Senate concurring:

1. Article X, section 3, Constitution of Arizona, is proposed to be amended as follows if approved by the voters and on proclamation of the Governor:

CONST3. Mortgage or other encumbrance; sale or lease at public auction

Section 3. No to further the value of said lands, including through the improvement or development of water resources or transportation, utility or other infrastructure and the state land trust,  the legislature may by law allow the mortgage, PLEDGE or other encumbrance of the said lands or any interests therein, consistent with the fiduciary obligation owed to the trust beneficiaries, or any part thereof, shall be valid in favor of any person or for any purpose or under any circumstances whatsoever. Said lands shall not may be sold or leased, in whole or in part, except to the highest and best bidder at a public auction to be held at the county seat of the county wherein the lands to be affected, or the major portion thereof, shall lie, notice of which public auction shall first have been duly given by advertisement, which shall set forth the nature, time and place of the transaction to be had, with a full description of the lands to be offered, and be published once each week for not less than ten successive weeks in a newspaper of general circulation published regularly at the state capital, and in that newspaper of like circulation which shall then be regularly published nearest to the location of the lands so offered; nor shall any sale or contract for the sale of any timber or other natural product of such lands be made, save at the place, in the manner, and after the notice by publication provided for sales and leases of the lands themselves. In a manner consistent with the fiduciary duties through public auction or any other method authorized by law. For the sale, lease, encumbrance or other disposition of state trust lands, the commissioner shall act soley in the FINANCIAL best interest of the trust beneficiaries and shall exercise the care, skill, prudence and diligence of a prudent investor that is acting in a like capacity. The commissioner may consider the highest and best use of said lands in any bid or proposal for said lands, but no factor shall be determinative and no sale or lease is required to be sold to the highest monetary bidder. The commissioner may improve, develop, manage or enhance the value of the state trust lands through the improvement or development of water resources or transportation, utility or other infrastructure or other method as the legislature deems fit through law consistent with fiduciary and prudent investor standards, including the use of available monies or financing mechanisms, before the disposition of state lands that will REASONABLY increase the long-term FINANCIAL returns of the trust BENEFICIARIES. the legislature may by law establish programs or funds to implement the purposes of this section, including the use of trust assets, interests or earnings in a manner consistent with fiduciary and prudent investor standards. Nothing herein, or elsewhere in this article X contained, shall prevent any of the following:

1. The leasing of any of the lands referred to in this article in such manner as the legislature may prescribe, for grazing, agricultural, commercial and homesite purposes, for a term of ten years or less, without advertisement. ; 

2. The leasing of any of said lands, in such manner as the legislature may prescribe, whether or not also leased for grazing and agricultural purposes, for mineral purposes, other than for the exploration, development,  and production of oil, gas and other hydrocarbon substances, for a term of twenty years or less, without advertisement. , or,

3. The leasing of any of said lands, whether or not also leased for other purposes, for the exploration, development, and production of oil, gas and other hydrocarbon substances on, in or under said lands for an initial term of twenty (20) years or less and as long thereafter as oil, gas or other hydrocarbon substance may be procured therefrom in paying quantities, the leases to be made in any manner, with or without advertisement, bidding, or appraisement, and under such terms and provisions, as the legislature may prescribe, the terms and provisions to include a reservation of a royalty to the this state of not less than twelve and one-half per cent percent of production. CONST

2. The Secretary of State shall submit this proposition to the voters at the next general election as provided by article XXI, Constitution of Arizona.