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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 State Land Oversight Board (Oversight Board) and outlines membership, powers and duties.
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;
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 proposed federal conservation-related permit on nonurban state lands;
e) not include terms in the leases for state lands that are more stringent than statute; and
f) protect and uphold the due process rights of a person that does business with the ASLD consistent with the regulatory bill of rights.
4. Allows a person, in addition to submitting a complaint to the Office of Ombudsman-Citizens Aide, to file a complaint with the Attorney General alleging a violation of the outlined due process rights.
5. Extends the lease automatically for three years if the ASLD does not take action on a lease renewal within 90 days.
6. 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.
7. Requires the ASLD to reimburse the lessee or permittee for the outlined improvements with monies from the State Land Trust.
8. 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.
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. Removes the use of the ASLD Staff from the statutorily prescribed methods in which the Commissioner may create conceptual land use plans.
12. Requires the Commissioner to create five-year disposition plans for each county.
13. 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.
14. 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.
15. Allows the Board to delegate the authority over conservation permitting on state trust lands to the applicable NRCD as determined by the Board.
16. Requires the Board to immediately forward any conservation or environmental permitting issued or received by the Board or the applicable district to the ASLD.
17. Applies the statutorily prescribed requirements relating to administrative procedures to the ASLD.
18. 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.
19. 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.
20. 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.
21. Requires the ASLD to maintain a list on its website of all license applications and actions taken on the applications.
22. Repeals the prescribed licensing time frames rulemaking requirements on January 1, 2029.
Oversight Board
23. Establishes the Oversight Board to provide oversight of the ASLD and to perform other prescribed duties.
24. Prescribes the Oversight Board membership as follows:
a) four persons from a county with a population of 400,000 persons or more;
b) four persons from a county with a population of fewer than 400,000 persons;
c) one person who specializes in finance or statewide land use needs; and
d) the following advisory members without the power to vote but who may attend executive sessions of the Oversight Board:
i. the President of the Senate or a designee;
ii. the Speaker of the House of Representatives (House) or a designee;
iii. the Minority Leader of the Senate or a designee;
iv. the Minority Leader of the House or a designee;
v. the Commissioner or a designee;
vi. the Director of the Arizona Department of Environmental Quality or a designee;
vii. the Director of ADWR or a designee;
viii. the Director of the Arizona Department of Administration or a designee; and
ix. the Chief Executive Officer of the Arizona Commerce Authority or a designee.
25. Specifies that for the Oversight Board members from counties with specified population sizes:
a) no three appointed members may be residents of the same county;
b) at least one appointed member must be a resident of each county with a population of more than 400,000 persons; and
c) the members must have substantial knowledge and experience with land management or finance, including public finance.
26. Requires the Governor to appoint the following Oversight Board members from a joint list of at least five qualified applicants submitted by the President of the Senate and the Speaker of the House:
a) two members from a county with a population of 400,000 persons or more;
b) two members from a county with a population of fewer than 400,000 persons; and
c) the member who specializes in finance or statewide land management.
27. Requires the President of the Senate and the Minority Leader of the Senate to appoint the following Oversight Board members:
a) one member from a county with a population of 400,000 persons or more; and
b) one member from a county of fewer than 400,000 persons.
28. Requires the President of the Senate and Minority Leader of the Senate to alternate the terms in which the outlined members are appointed.
29. Requires the Speaker of the House and the Minority Leader of the House to appoint the following Oversight Board members:
a) one member from a county with a population of 400,000 persons or more; and
b) one member from a county of fewer than 400,000 persons.
30. Requires the Speaker of the House and Minority Leader of the House to alternate the terms in which the outlined members are appointed.
31. Specifies that the Oversight Board members with voting powers serve five-year terms of office beginning and ending on the third Monday in January and are eligible for reappointment.
32. Allows an Oversight Board member to be removed only for cause by the person who then holds the same office as the person who appointed that member.
33. Requires the Oversight Board members with voting powers to be residents of Arizona for at least two years.
34. Requires the Oversight Board members with voting powers to be appointed:
a) for the initial term and every third term after:
i. first, by the President of the Senate and Minority Leader of the Senate;
ii. second, by the Governor; and
iii. third, by the Speaker of the House and Minority Leader of the House;
b) for the second term and every third term after:
i. first, by the Governor;
ii. second, by the Speaker of the House and Minority Leader of the House; and
iii. third, by the President of the Senate and Minority Leader of the Senate; and
c) for the third term and every third term after:
i. first, by the Speaker of the House and Minority Leader of the House;
ii. second; by the President of the Senate and Minority Leader of the Senate; and
iii. third; by the Governor.
35. Requires the appropriate appointing authority to make all subsequent appointments.
36. Terminates:
a) on January 31, 2030, the initial terms of the three Oversight Board members from a county with a population of 400,000 persons or more; and
b) on January 31, 2032, the initial terms of the three Oversight Board members from a county with a population of fewer than 400,000 persons and one member who specializes in finance or statewide water needs.
37. Requires the prospective Oversight Board member, before the member is appointed, to submit a full set of fingerprints to the Governor for the purpose of obtaining a state and federal criminal records check.
38. Requires the Governor to submit the fingerprints to the Arizona Department of Public Safety (AZDPS).
39. Allows the AZDPS to exchange the outlined fingerprint data with the Federal Bureau of Investigation.
40. Requires the Oversight Board to elect a chairperson of the Board from among the voting members.
41. Allows the Oversight Board to:
a) hold public meetings to receive testimony and stakeholder input regarding the ASLDs processes; and
b) confer with subject matter experts on any matters relating to managing, leasing, developing and disposing state lands.
42. Requires the Oversight Board to:
a) have broad discretion on overseeing the ASLDs adoption of rules and policies;
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 ASLD's processes;
d) ensure that the ASLD complies with the laws of Arizona;
e) on request of the chairperson of the Senate Natural Resources COR and the House Natural Resources, Energy and Water COR or their successor CORs, provide testimony on the operations and oversight of the ASLD; and
f) by June 1, 2027, and each year thereafter, submit a report of the Oversight Board's findings and recommendations to the chairpersons of the Senate Natural Resources COR and House Natural Resources, Energy and Water COR, or their successor CORs, the Governor, the President of the Senate and the Speaker of the House and provide a copy to the Arizona Secretary of State.
43. Allows the chairperson of the Oversight Board to appoint subcommittees as necessary.
44. Allows the Oversight Board to request assistance from representatives of other state agencies.
45. Requires the ASLD to provide technical assistance to the Oversight Board.
46. Specifies that Oversight Board members serve without compensation but are eligible for reimbursement of expenses.
47. Prohibits an Oversight Board member who is otherwise employed as a public officer from receiving reimbursement if it is otherwise prohibited by law.
48. Determines that a majority of the Oversight Board voting members constitutes a quorum for the purpose of an official meeting for conducting business.
49. Determines that an affirmative vote of a majority of the voting members present at an official meeting is sufficient for the Oversight Board to take any action.
50. Requires the Oversight Board to keep and maintain a complete and accurate record of all Board proceedings.
51. Allows the Oversight Board and any subcommittees, except advisory nonvoting members, to attend executive sessions of the Oversight Board.
52. Subjects the Oversight Board, its subcommittees and the officers and any employees of the Board to statutory requirements relating to conflicts of interest.
53. Disqualifies a person, except for employees of the State of Arizona or a political subdivision of Arizona, from appointment to the Oversight Board if a person or the person's relative:
a) is employed by or participates in the management of a business entity or other organization that leases or buys state lands;
b) owns, controls or has, directly or indirectly, more than a 10 percent interest in a business entity or other organization that buys or leases state lands;
c) uses or receives a substantial amount of tangible goods, services or monies from the ASLD; or
d) has a personal financial interest in the conveyance of state lands.
54. Stipulates that the person or the person's relative does not have a personal financial interest if the person or the person's relative is a member of a class of persons and it reasonably appears that a majority of the total membership of that class is to be affected by the action.
55. Prohibits a person, except for employees of the State of Arizona or a political subdivision of Arizona, from being:
a) a voting member of the Oversight Board or act as the general counsel to the Oversight Board or authority if the person is required to register as a lobbyist; and
b) an Oversight Board member or an employee of the Oversight Board if the person or person's relative is an officer, employee or paid consultant for a water users' association or trade association.
56. Prohibits an employee of a political subdivision of Arizona who serves on the Oversight Board from participating in the consideration of or a vote concerning any conveyance that will directly benefit the political subdivision.
57. Requires the Oversight Board to adopt written policies, procedures and guidelines for standards of conduct, including a gift policy, for Oversight Board members and for officers and employees of the Oversight Board.
58. Deems that the Oversight Board is a public body that is subject to the statutory requirements relating to records.
59. Requires the Oversight Board to operate on the state fiscal year.
60. Requires all state agencies to cooperate with the Oversight Board and make available data pertaining to the functions of the Oversight Board as requested by the Board.
Miscellaneous
62. Defines trade association as any cooperative, association or business organization, whether or not incorporated under federal or state law, that is designed to assist its members, industry or profession in advocating for or promoting their common interest.
63. Contains a purpose statement, statement of legislative intent and a statement of legislative findings.
64. Makes technical and conforming changes.
65. 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.
Amendments Adopted by Committee of the Whole
1. Removes the Arizona State Land Department Temporary Oversight Committee and the related requirements, powers and duties.
2. Establishes the Oversight Board to provide oversight of the ASLD and to perform other prescribed duties.
3. Outlines the membership and the terms of office of the Oversight Board.
4. Prescribes the Oversight Boards powers and duties.
5. Requires the Oversight Board to keep and maintain a complete and accurate record of all board proceedings and subjects the Oversight Board to the statutory requirements relating to public meetings and conflicts of interest.
6. Prohibits an employee of a political subdivision of Arizona who serves on the Oversight Board from participating in the consideration of or a vote concerning any conveyance that will directly benefit the political subdivision.
7. Requires the Oversight Board to adopt written policies, procedures and guidelines for standards of conduct, including a gift policy, for Oversight Board members and for officers and employees of the Oversight Board.
8. Deems that the Oversight Board is a public body that is subject to the statutory requirements relating to records.
9. Requires all state agencies to cooperate with the Oversight Board and make available data pertaining to the functions of the Oversight Board as requested by the Oversight Board.
10. Removes the requirement that the Commissioner consult with the applicable natural resources conservation district when creating conceptual land use plans.
11. Specifies that the prescribed requirement for the ASLD to immediately reimburse a holdover tenant whose lease is terminated by the ASLD is notwithstanding any other law.
12. Specifies that the prescribed requirement for the ASLD to, on the conclusion of a lease or special land use permit, reimburse the lessee or permittee for outlined improvements with monies from the state land trust is notwithstanding any other law.
13. Removes the requirement that the ASLD alert the applicable NRCD or soil and water conservation district of any environmental permitting on state lands within the jurisdiction of an NRCD or soil and water conservation district.
14. Specifies that the requirement for the ASLD to collaborate with the Board or the applicable NRCD or soil and water conservation district be on the review of any proposed federal conservation-related permit on nonurban state lands, rather than on the review of any conservation-related permit on nonurban state lands.
15. Requires the ASLD, to the extent possible, to:
a) not include terms in the leases for state lands that are more stringent than statute; and
b) protect and uphold the due process rights of a person that does business with the ASLD consistent with the regulatory bill of rights.
16. Allows a person, in addition to submitting a complaint to the Office of Ombudsman-Citizens Aide, to file a complaint with the Attorney General alleging a violation of the outlined due process rights.
Senate Action
NR 2/17/26 DPA 6-2-0
Prepared by Senate Research
March 4, 2026
SB/hk