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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
AMENDED
state land department; continuation; oversight
Purpose
Continues, retroactive to July 1, 2026, the Arizona State Land Department (ASLD) for four years until July 1, 2030, and prescribes requirements relating to licensing time frames, conceptual land use plans and five-year disposition plans. Establishes the ASLD Temporary Oversight Committee (Oversight Committee) and outlines membership, powers and duties. Repeals the Oversight Committee on January 1, 2031.
Background
The ASLD must administer all laws relating to lands owned by, belonging to and under control of Arizona and have charge and control of all lands owned by Arizona, and timber, stone, gravel and other products of such lands (A.R.S. § 37-102). The ASLD Commissioner (Commissioner) must: 1) exercise and perform all powers and duties vested in or imposed on the ASLD and prescribe such rules as are necessary to discharge those duties; 2) make long-range plans for the future use of state lands in cooperation with other state agencies, local planning authorities and political subdivisions; 3) have the authority to lease for commercial purposes and sell all land owned or held in trust by Arizona; and 4) fulfill all other statutorily prescribed duties (A.R.S. § 37-132). The ASLD is responsible for adopting rules to prescribe the procedure, method and means for the sale of state lands. An ASLD representative must attend at the time and place fixed for the sale and proceed by first announcing information relevant to the sale sufficient to begin the bidding process, then calling for bids and finally, selling the lands for the highest and best bid (A.R.S. § 37-238).
The Commissioner must create conceptual land use plans for all urban
state trust land in Arizona and other state trust lands the Commissioner
considers to be appropriate and;
1) prioritize the creation of conceptual plans to the extent possible to
correlate with the rate of population growth in urban areas and coincide with
the production of municipal and county general plans; 2) consult with the city,
town or county in which the land is located; and 3) submit each plan and
revision of the plan to the Urban Land Planning Oversight Committee for Review.
The conceptual plan is considered to be a state general plan on approval by the
Commissioner.
The Commissioner is responsible for creating five-year disposition plans for all state trust land in Arizona, based at a minimum on market demand and anticipated transportation and infrastructure availability. The Commissioner must: 1) review and update each plan each year as may be necessary; 2) consult with the city, town or county in which the land is located and with any regional planning organization; and 3) submit each plan and revision to the Urban Land Planning Oversight Committee to ensure conformity with the outlined conceptual land use plan (A.R.S. § 37-331.03).
The Senate Natural Resources Committee of Reference (COR) held a public meeting on Tuesday, January 20, 2026, to review the Auditor General's Performance Audit and Sunset Review Report, consider the ASLD's responses to the statutorily prescribed sunset factors and receive public testimony. The COR recommended that the ASLD be continued for four years, until July 1, 2030, with prescribed modifications and that the ASLD return to the Legislature with a report on the additional recommendations within two years. The ASLD terminates on July 1, 2026, unless continued by the Legislature (A.R.S. § 41-3026.05).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
ASLD
1. Continues, retroactive to July 1, 2026, the ASLD for four years until July 1, 2030.
2. Repeals the ASLD on January 1, 2031.
3. Requires the ASLD, to the extent possible, to:
a) restrict the use of a lease or permit holdover provision to not more than 90 days;
b) approve any improvements that are customary in the lessee's or permittee's course of business and provide notice of expiration at least six months before the expiration of the lease renewal or special land use permit for a lease renewal and special land use permit;
c) restrict the use of special land use permits to only temporary land uses that do not have a dedicated land use lease or permit; and
d) collaborate with the State Natural Resource Conservation Board (Board) or the applicable Natural Resource Conservation District (NRCD), or soil and water conservation district as designated by the Board, on the review of any conservation-related permit on nonurban state lands.
4. Extends the lease automatically for three years if the ASLD does not take action on a lease renewal within 90 days.
5. Requires a holdover tenant whose lease is terminated by the ASLD to receive immediate reimbursement for the fair market value, as determined by a third-party vendor of any reasonable and customary improvements that the holdover tenant made to the state land.
6. Requires the ASLD to reimburse the lessee or permittee for the outlined improvements with monies from the State Land Trust.
7. Requires the prescribed notice of expiration to include:
a) any proposed rental increase or change to the terms and conditions of the lease renewal or special land use permit;
b) the ASLDs intent to renew or terminate the lease on expiration and an explanation of the ASLD's renewal or termination process; and
c) the justification for the Commissioner's decision.
8. Requires the ASLD to alert the Board, or the applicable NRCD or soil and water conservation district as designated by the Board, of any environmental permitting on state lands within the jurisdiction of a NRCD or soil and water conservation district.
9. Requires the Commissioner to create conceptual land use plans for all state trust land in Arizona, rather than only for all urban state trust lands and other state trust lands the Commissioner considers to be appropriate.
10. Requires the Commissioner to prioritize the creation of conceptual land use plans to the extent possible to correlate with the rate of population growth in rural areas in Arizona.
11. Requires the Commissioner to consult with the applicable NRCD regarding integrating the conceptual land use plan into the general land use plan of the city, town or county where the land is located.
12. Removes the use of the ASLD Staff from the statutorily prescribed methods in which the Commissioner may create conceptual land use plans.
13. Requires the Commissioner to create five-year disposition plans for each county.
14. Requires the Commissioner, for the five-year disposition plans, to:
a) review and update each five-year disposition plan every three years, rather than every year;
b) hire third-party contractors; and
c) include residential development within the service area of a municipal provider.
15. Requires the Board to:
a) maintain authority over conservation permitting on state trust lands; and
b) collaborate with the ASLD for any conservation or environmental permitting located on state trust land.
16. Allows the Board to delegate the authority over conservation permitting on state trust lands to the applicable NRCD as determined by the Board.
17. Requires the Board to immediately forward any conservation or environmental permitting issued or received by the Board or the applicable district to the ASLD.
18. Applies the statutorily prescribed requirements relating to administrative procedures to the ASLD.
19. Requires the ASLD to adopt rules, by July 1, 2028, to establish appropriate time frames for action on any application or other comparable request that an applicant or instrument holder submits to the ASLD as prescribed in the statutes relating to licensing time frames.
20. Requires the ASLD, by July 1, 2027, to:
a) open a rulemaking docket to adopt licensing time frames; and
b) conduct a study to determine the appropriate licensing time frames for licenses issued by the ASLD.
21. Subjects the ASLD, if the ASLD fails to act within any time frame prescribed by the licensing time frames adopted by rulemaking, to the statutorily prescribed penalties relating to an agency's failure to comply with overall time frames.
22. Requires the ASLD to maintain a list on its website of all license applications and actions taken on the applications.
23. Repeals the prescribed licensing time frames rulemaking requirements on January 1, 2029.
Oversight Committee
24. Establishes the Oversight Committee consisting of the following members:
a) five members who are appointed by the Governor from a list of 15 persons that the President of the Senate and the Speaker of the House of Representatives (House) provide to the Governor and who represent construction aggregate producers, grazers, financers of land sales, buyers or lessees of state trust lands and planners;
b) two members who are appointed by the President of the Senate and who represent commercial development and homebuilding; and
c) two
members who is are appointed by the Speaker of the House and who
represent mining and agriculture;.
25. Requires Oversight Committee members to have demonstrated experience in administering, disposing, leasing or developing state trust lands.
26. Requires eight Oversight Committee members to work in the private sector and represent the following sectors:
a) finance;
b) land use planning;
c) commercial development;
d) mining;
e) construction aggregate production;
f) grazing;
g) agriculture; and
h) homebuilding.
27. Requires the Oversight Committee members to serve two-year staggered terms.
28. Requires initial Oversight Committee members to assign themselves to staggered terms of one and two years with five members serving one year and four members serving two years.
29. Requires the Oversight Committee members to elect a chairperson each year.
30. Requires the Oversight Committee chairperson to notify the ASLD and all appointing authorities of the Oversight Committee members' terms.
31. Allows the Oversight Committee members to be reappointed on discretion of the appointing authority.
32. Requires the Oversight Committee to:
a) have broad discretion on overseeing the ASLD and its adoption of rules, policies and procedures for administering, leasing and disposing of state trust lands;
b) review rulemaking, internal timelines and procedural efficiencies that affect applicants, lessees and purchasers of state trust lands;
c) collaborate with the ASLD to identify opportunities for improved transparency, predictability and accountability relating to the ASLDs processes; and
d) ensure the ASLD complies with the prescribed requirements relating to the Oversight Committee.
33. Requires the Oversight Committee, by June 1, 2027, and each year thereafter, to submit a report of its findings and recommendations to the chairpersons of the Senate and House Natural Resources Committees of Reference, or their successor committees, the Governor, the President of the Senate and the Speaker of the House and provide a copy to the Secretary of State.
34. Allows the Oversight Committee to hold public meetings to address and confer with subject matter experts relating to managing, leasing, developing and disposing of state lands.
35. Stipulates that Oversight Committee members are eligible for reimbursement of expenses.
36. Repeals the Oversight Committee on January 1, 2031.
Miscellaneous
38. Defines state lands.
39. Contains a purpose statement, statement of legislative intent and a statement of legislative findings.
40. Makes technical and conforming changes.
41. Becomes effective on the general effective date, with a retroactive provision as noted.
Amendments Adopted by Committee
1. Requires the ASLD to maintain a list on its website of all license applications and actions taken on the applications.
2. Requires the ASLD, to the extent possible, to:
a) restrict the use of a lease or permit holdover provision to not more than 90 days;
b) approve any improvements that are customary in the lessee's or permittee's course of business and provide notice of expiration at least six months before the expiration of the lease renewal or special land use permit for a lease renewal and special land use permit;
c) restrict the use of special land use permits to only temporary land uses that do not have a dedicated land use lease or permit; and
d) collaborate with the Board or the applicable NRCD, or soil and water conservation district as designated by the Board, on the review of any conservation-related permit on nonurban state lands.
3. Extends the lease automatically for three years if the ASLD does not take action on a lease renewal within 90 days.
4. Requires a holdover tenant whose lease is terminated by the ASLD to receive immediate reimbursement for the fair market value, as determined by a third-party vendor of any reasonable and customary improvements that the holdover tenant made to the state land.
5. Requires the ASLD to reimburse the lessee or permittee for the outlined improvements with monies from the State Land Trust.
6. Requires the prescribed notice of expiration to include specified information.
7. Requires the ASLD to alert the Board, or the applicable NRCD or soil and water conservation district as designated by the Board, of any environmental permitting on state lands within the jurisdiction of a NRCD or soil and water conservation district.
8. Outlines requirements for the Commission relating to conceptual land use plans.
9. Removes the use of the ASLD staff from the statutorily prescribed methods in which the Commissioner may create conceptual land use plans.
10. Requires the Commissioner to create five-year disposition plans for each county, as prescribed.
11. Requires the Board to:
a) maintain authority over conservation permitting on state trust lands; and
b) collaborate with the ASLD for any conservation or environmental permitting located on state trust land.
12. Allows the Board to delegate the authority over conservation permitting on state trust lands to the applicable NRCD as determined by the Board.
13. Requires the Board to immediately forward any conservation or environmental permitting issued or received by the Board or the applicable district to the ASLD.
14. Modifies the Oversight Committee membership and membership requirements.
15. Outlines additional powers and duties of the Oversight Committee.
16. Removes the requirement that the Oversight Committee oversee the ASLD's adoption of certain rules and policies.
17. Requires the Oversight Committee's prescribed report on its findings and recommendations to be submitted annually by June 1, rather than by June 1, 2027.
18. Prescribes Oversight Committee term requirements.
19. Requires the Oversight Committee members to elect a chairperson each year.
20. Requires the ASLD to adopt rules for licensing time frames by July 1, 2028.
21. Requires the ASLD, by July 1, 2027, to:
a) open a rulemaking docket to adopt licensing time frames; and
b) conduct a study to determine the appropriate licensing time frames for licenses issued by the ASLD.
22. Repeals the licensing time frame rulemaking requirements on January 1, 2029.
23. Repeals the Oversight Committee on January 1, 2031, rather than January 1, 2028.
24. Adds statements of legislative intent and legislative findings.
25. Makes technical and conforming changes.
Senate Action
NR 2/17/26 DPA 6-2-0
Prepared by Senate Research
February 20, 2026
SB/hk