ARIZONA HOUSE OF REPRESENTATIVES

57th Legislature, 2nd Regular Session

Majority Research Staff

House: NREW DPA 6-4-0-0

HB 2755: state land use; highest; best

Sponsor: Representative Griffin, LD 19

Caucus & COW

Overview

Mandates that when there is a conflict in the proposed land use for the sale or lease of a parcel of State Trust land between mining and commercial use, the Commissioner of the Arizona State Land Department must presume the highest and best use of the parcel is for mineral extraction or exploration.

History

Established in 1915, the Arizona State Land Department (ASLD) currently manages approximately 9.2 million acres of State Trust lands which were granted to the state at statehood. These lands are held in trust and are managed for the sole purpose of generating revenue for the 13 state land beneficiaries. The ASLD is not a regulatory agency but is the trustee of the state's trust land and its natural resources (ASLD).

The ASLD administers laws related to lands owned by, belonging to and under control of the state, which includes both trust land and sovereign land. The ASLD also manages and controls the products and uses of state land including timber, stone, gravel, grazing and farming (A.R.S. § 37-102).

Provisions

1. Directs the ASLD Commissioner to presume that the highest and best use of a parcel of State Trust land is for mineral extraction or exploration if there is a conflict in the proposed land use for the sale or lease of a parcel between a mining and commercial use. (Sec. 1, 2)

2. Outlines the process for a person desiring to purchase or lease State Trust lands to overcome the presumption of best use. (Sec. 1, 2)

3. Contains a legislative findings clause. (Sec. 3)

Amendments

Committee on Natural Resources, Energy and Water

1. Replaces language relating to the presumption of highest and best use with language relating to the renewal of existing mineral or mineral material leases. (Sec. 1)

2. Allows the ASLD Commissioner to renew existing mineral or mineral material leases without public auction if they determine that:

a. the lessee is in substantial compliance with the terms of the lease;

b. renewal is in the best interest of the trust;

c. renewal is supported by written fiduciary findings; and

d. the renewal term is for not more than twenty years. (Sec. 1)

3. Mandates that a renewed lease provide for a royalty rate adjusted using a market-based indexing mechanism adopted by ASLD rule. (Sec. 1)

4. Outlines what may be included in the indexing mechanism. (Sec. 1)

5. Requires the Commissioner review indexed royalty rates at intervals not more than five years. (Sec. 1)

6. Requires ASLD restrict the use of a holdover lease to not more than 90 days. (Sec. 1)

7. Requires ASLD reimburse a holdover tenant whose lease is terminated for the fair market value of any improvements made to the land. (Sec. 1)

8. Requires ASLD, for a lease renewal and special land use permit:

a. approve any specified improvements in the lessee or permittee's course of business;

b. reimburse the lessee or permittee for the improvements on conclusion of the lease or special land use permit with monies from the State Land Trust;

c. provide ample notice to a lessee or permittee prior to termination of the lease or special land use permit. (Sec. 1)

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g. Initials CW/RS HB 2755

h. 2/13/2026 Page 0 Caucus & COW

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