 |
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 conceptual land use plans and five-year disposition plans, the leasing or sale of state trust lands, the Trust Land Management Fund and exploration permits. Establishes the Joint Legislative Ad Hoc Committee on State Land Oversight and the Biosolids Study Committee (Study Committee) 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:
a) unless mutually agreed on by the ASLD and the lessee, restrict the use of a holdover provision for a lease or permit to not more than 90 days;
b) unless mutually agreed on by the ASLD and the lessee, restrict the use of special land use permits to only temporary land uses that do not have a dedicated land use lease or permit;
c) use publicly posted criteria that are created by the ASLD and posted on the ASLD's website and determine the administrative completeness of all applications that the ASLD receives pursuant to state law; and
d) make available to the public on the ASLD's website all boilerplate lease, patent, addendum, application and other instrument conditions and obligations that the ASLD requires in a lease, patent, addendum or instrument for the use, possession, occupancy, lease or conveyance of state lands.
4. Requires the ASLD to issue a special land use permit only for a set time frame enumerated in the special land use permit.
5. Prohibits the ASLD from cancelling a special land use permit unless the special land use permittee violates the terms of the special land use permit.
6. Stipulates that an application is subject to withdrawal if the applicant does not respond to a written and electronic notice of deficiency or request for additional information within three months after the notice of request.
7. Requires the ASLD to issue a final notice that states the application is withdrawn if the applicant does not respond within 30 days.
8. Prohibits the ASLD from including any term, condition or obligation in an instrument for the use, possession, occupancy, lease or conveyance of state lands that is not authorized by statute, from being more stringent than statute.
9. Requires the ASLD to establish a procedure and the criteria that the Commissioner must use for determining whether to initiate the sale of state lands by the Commissioner's own initiative and to post the procedure and criteria on the ASLDs website.
10. Requires the Commissioner to hire a third-party contractor to appraise and prepare state lands for public auction.
11. Requires the ASLD to use either ASLD staff or a third-party contractor to satisfy the outlined notice requirements.
12. Specifies that the outlined requirements relating to the sale of state lands do not prohibit the Commissioner from selling state lands that have not been identified for sale in the five-year disposition plan or restrict the use of state lands to the uses identified in the conceptual land use plan.
13. Requires the ASLD to:
a) within 90 days, approve or deny any application to place an improvement on leased state lands that is consistent with the lease;
b) within six months after the conclusion of a lease or lease holdover, provide the lessee a reimbursement plan that includes:
i. a valuation of the fair market value of all previously approved improvements that the lessee made to the state lands, as determined by an independent third-party vendor; and
ii. a reasonable timeline in which the ASLD will reimburse the lessee for the fair market value of all previously approved improvements that the lessee made to the state lands; and
c) not less than six months before the expiration of a lease, provide to the lessee a notice that must include:
i. any proposed rental increase or proposed change to the terms and conditions of the lease;
ii. the intent of the ASLD to renew or terminate the lease; and
iii. the justification for the Commissioners decisions to renew or terminate the lease.
14. Requires the ASLD, in any communication with the U.S. government, if the matter involves a federal land withdrawal or reservation or the federal government's acquisition of nonfederally controlled land, to cooperate and seek the advice of the President of the Senate and the Speaker of the House of Representatives (House) on the communication.
15. Allows the Commissioner to renew an existing production lease without public auction if the Commissioner determines that:
a) the lessee is in compliance with the terms of the production lease;
b) the production lease is in production or a person will put the production lease in production within two years after the date of production lease renewal; and
c) the renewal is for a term that is allowed by the laws of Arizona.
16. Requires an outlined production lease that the Commissioner renews to provide for a royalty rate that is adjusted pursuant to a market-based indexing mechanism that the Commissioner adopts.
17. Allows the indexing mechanism to include:
a) producer price indices;
b) regional or statewide construction aggregate price indices; or
c) other objective indicators that are recognized by the industry.
18. Requires the Commissioner to review the indexed royalty rate for each renewed production lease not more than once every five years.
19. Specifies that the Commissioner or the Commissioner's authorized representative may enter, and the lessee must maintain access to, the state land held under a production lease, rather than mineral lease, at reasonable times to inspect the workings, improvements and other facilities used to extract or sever minerals or common variety minerals from state lands.
Conceptual Land Use Plans and Five-year State Trust Land Disposition Plans
20. Requires the ASLD, rather than the Commissioner, to create and approve conceptual land use plans for all urban state trust land in Arizona.
21. 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 all areas of Arizona, rather than only in urban areas of Arizona and to promote economic growth in the rural areas of Arizona.
22. Requires the Commissioner to issue a written order approving each conceptual land use plan and conceptual land use plan revision.
23. Requires the Commissioner to consult with the Arizona Geological Survey, rather than with any regional planning organization, regarding integrating the conceptual land use plan into the general land use plan of a city, town or county.
24. Requires the Commissioner to post each conceptual land use plan and revision of a conceptual land use plan and the Commissioner's written approval of each conceptual land use plan and plan revision on the ASLDs website.
25. Removes the requirement that the Commissioner submit each conceptual land use plan and revision of the plan to the Urban Land Planning Oversight Committee for review.
26. Clarifies that conceptual land use plans remain effective until revised.
27. Requires the Commissioner to create a five-year disposition plan for all state trust land in each county in Arizona.
28. Adds potential economic benefits to rural communities to the statutorily list that the conceptual land use plans must be based on.
29. Requires the Commissioner to:
a) post each five-year disposition plan, plan revision and each written order that adopts or approves a five-year disposition plan or plan revision on the ASLD's website to ensure conformity with the conceptual land use plan;
b) ensure that each five-year disposition plan and plan revision conforms with the conceptual land use plan;
c) consider hiring third-party contractors to prepare the five-year disposition plan;
d) include residential development within the service area of a municipal provider; and
e) issue a written order that approves and adopts each five-year disposition plan and plan revision.
30. Requires a five-year disposition plan, on approval of the five-year disposition plan, to remain effective until revised.
31. Specifies that the outlined requirements relating to conceptual land use plans and five-year disposition plans do not prohibit the conveyance of state lands that are not identified in the five-year disposition plan or conceptual land use plan.
32. Requires the Commissioner, within two years after the general effective date, to:
a) complete the five-year disposition plans for state trust lands and update the conceptual land use plan for state lands;
b) adopt written policies and procedures for updating the five-year disposition plan every five years and the conceptual land use plan every 10 years;
c) adopt written policies and procedures on how the ASLD will use the five-year disposition plans and the conceptual land use plan for determining whether state trust lands are or will be sent to public auction; and
d) provide a copy of the five-year disposition plans and the conceptual land use plan and the adopted policies and procedures to the Joint Legislative Ad Hoc Committee on State Land Oversight.
Trust Land Management Fund
33. Removes the requirement that the Trust Land Management Fund consist of up to 10 percent of the annual proceeds of:
a) each beneficiary's trust lands granted to Arizona by the United States; or
b) all sales of timber, mineral, gravel or other natural products of property from each beneficiary's trust lands granted to Arizona by the United States.
34. Removes the requirement that the Commissioner determine the percentage of trust land proceeds to be deposited in the Trust Land Management Fund each fiscal year.
35. Adds to the statutorily list of allowable uses of monies in the Trust Land Management Fund that the monies must be used to prepare state lands for sale or lease and may be used to award ASLD-wide, performance-based incentives.
36. Specifies that for the purpose of awarding performance-based incentives, the Commissioner may only use monies collected from fees.
37. Prohibits the Commissioner from diverting more than 10 percent of the revenues collected from fees in any one fiscal year.
Exploration Permits
38. Extends the term for an exploration permit from one year to five years after the date of issuance.
39. Specifies that the exploration permit is eligible for a renewal for one additional five-year period for an aggregate of 10 years after the date of issuance.
40. Clarifies that, during the period the exploration permit is in force and effect, the permittee has the surface rights necessary for exploration on state land covered by the permit but may remove from the state land only that amount of commodity type that is required by the permittee for sampling, assay and metallurgical testing purposes.
41. Clarifies that the application for an exploration permit applies to state land that is reserved for statutorily outlined minerals.
42. Prohibits each exploration permit application on state land in one or more of the rectangular subdivisions of 20 acres, more or less, or lots, in any identified contiguous sections of the public land survey from exceeding more than nine sections of the public land survey.
43. Removes the condition that the total area of contiguous property may not exceed three miles on a side for a permittee that has an interest in one or more contiguous properties that the permittee holds an exploration permit, to group such permits and expend the required sum under a common plan of development on one or more of the properties for the benefit of all.
44. Allows the holder of an exploration permit, within 60 days before the expiration of the initial five-year exploration permit period, to file with the ASLD an application for renewal of the exploration permit for the ensuing five-year period.
45. Prohibits an application for renewal from being filed or renewed for more than one additional five-year permit period after expiration of the initial five-year period that the permit was issued.
46. Allows the Commissioner, in the Commissioner's discretion, to require an applicant for an exploration permit to file with the Commissioner a surety bond, as outlined, in conjunction with the issuance of the exploration permit, rather than prior to the issuance of the exploration permit.
47. Allows a mineral permit or common variety right of entry permit that the ASLD issued before the general effective date to, at the choice of the permittee:
a) continue in effect until the initial expiration date stated in the existing exploration permit; or
b) be surrendered at any time before the initial expiration date stated in the exploration permit and remain subject to a replacement with a five-year permit period.
Joint Legislative Ad Hoc Committee on State Land Oversight
48. Establishes the Joint Legislative Ad Hoc Committee on State Land Oversight.
49. Requires the President of the Senate and the Speaker of the House to collaborate to determine the appropriate number of members and to appoint members and cochairpersons of the Joint Legislative Ad Hoc Committee on State Land Oversight.
50. Requires the Senate and the House to provide meeting space and staff support as requested by the cochairpersons of the Joint Legislative Ad Hoc Committee on State Land Oversight.
51. Requires the ASLD and the Commissioner, on request of either the cochairpersons of the Joint Legislative Ad Hoc Committee on State Land Oversight, to provide any requested information that is in possession of the ASLD and appear and testify during a meeting of the Committee.
52. Repeals the Joint Legislative Ad Hoc Committee on State Land Oversight on January 1, 2027.
Study Committee
53. Establishes the Study Committee consisting of:
a) the chairperson of the Senate Natural Resources Committee, or the chairpersons designee, who serves as the chairperson of the Study Committee in even-numbered years;
b) the chairperson of the House Natural Resources Energy and Water Committee, or the chairperson's designee, who serves as the chairperson of the Study Committee in odd-numbered years;
c) the Director of the Department of Environmental Quality (ADEQ) or the Directors designee;
d) the Director of the Arizona Department of Agriculture (AZDA) or the Directors designee;
e) the Commissioner or the Commissioners designee; and
f) the Chairperson of the Yuma County Board of Supervisors or the Chairperson's designee.
54. Requires the Study Committee to review the use of biosolids for agricultural and other uses in Arizona, including on state trust lands.
55. Requires the Study Committee to evaluate the policy of accepting biosolids from other states.
56. Allows the Study Committee to hold hearings, conduct fact-finding tours, request data from any political subdivision of Arizona and take testimony from witnesses who may assist the Study Committee in fulfilling the Study Committees responsibilities.
57. Requires all Study Committee hearings to be open to the public.
58. Requires the Legislature, the ASLD, ADEQ and the AZDA to provide meeting space, staff and support services to the Study Committee.
59. Specifies that the Study Committee members are not eligible to receive compensation but are eligible for reimbursement of expenses.
60. Requires the Study Committee, by December 31, 2028, to submit a report of its findings and recommendations for rule changes or legislative changes that the Study Committee determines necessary to the Governor, the President of the Senate and the Speaker of the House and provide a copy to the Secretary of State.
61. Repeals the Study Committee on July 1, 2029.
Miscellaneous
62. Defines commodity type as:
a) including minerals, common variety minerals, oil, gas, geothermal resources and any other tangible natural produce of the lands, not including native plants, timber or water, that may be explored and produced in the future; and
b) not including, except for heat and other forms of energy associated with geothermal resources, nontangible natural products of the land, including wind, solar or electricity generated by nontangible natural products of the land.
63. Defines common variety mineral as:
a) a deposit of petrified wood, stone, pumice, pumicite, cinders, decomposed granite, sand, gravel, boulders, common clay, fill dirt and waste rock;
b) a deposit that, although the deposits may have value for use in trade, manufacturing, construction, landscape and decorative rock industries, does not possess a distinct, special economic value for those uses beyond the normal uses of the deposit; or
c) a material that is used as road base material, riprap, ballast, borrow, fill, facing stone, landscape or ornamental uses and other similar uses.
64. Specifies that common variety mineral does not include limestone that is suitable for use in producing cement, metallurgical or chemical grade limestone of gypsum.
65. Defines production lease as a lease for the purposes of the extraction, sale or processing or any other processes of a commodity type.
66. Modifies the definitions of conceptual land use plan and property.
67. Defines Commissioner, mineral and state land.
68. Contains a purpose statement and a statement of legislative findings.
69. Makes technical and conforming changes.
70. 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.
Amendments Adopted by the House of Representatives
1. Allows the Commissioner to renew an existing production lease without public auction if the Commissioner makes outlined determinations.
2. Outlines requirements for royalty rates for existing production leases that are renewed.
3. Extends the term for an exploration permit from one year to five years after the date of issuance and specifies that the exploration permit is eligible for a renewal for one additional five-year period for an aggregate of 10 years after the date of issuance.
4. Clarifies that, during the period the exploration permit is in force and effect, the permittee has the surface rights necessary for exploration on state land covered by the permit but may remove from the state land only that amount of commodity type that is required by the permittee for sampling, assay and metallurgical testing purposes.
5. Allows a mineral permit or common variety right of entry permit that the ASLD issued before the general effective date to, at the choice of the permittee:
a) continue in effect until the initial expiration date stated in the existing exploration permit; or
b) be surrendered at any time before the initial expiration date stated in the exploration permit and remain subject to a replacement with a five-year permit period.
6. Requires the ASLD, when communicating with the federal government, if the matter involves a federal land withdrawal or reservation or the federal government's acquisition of nonfederally controlled land, to cooperate and seek the advice of the President of the Senate and the Speaker of the House in the communication.
7. Removes the Requirement that the ASLD, to the extent possible, adopt rules to establish time frames for action on any application or comparable request that an applicant or instrument holder submits to the ASLD.
8. Exempts a lease or permit that was mutually agreed on by the ASLD and the lessee from the prohibition on a lease having a holdover provision that is longer than 90 days.
9. Requires the ASLD to establish a procedure and the criteria that the Commissioner must use for determining whether to initiate the sale of state lands by the Commissioner's own initiative.
10. Prescribes requirements for the ASLD relating to reporting, holdover leases, conceptual land use plans and five-year state trust land disposition plans.
11. Establishes the Joint Legislative Ad Hoc Committee on State Land Oversight and outlines committee membership.
12. Establishes the Study Committee and outlines committee membership, powers and duties.
13. Removes the State Land Oversight Board.
14. Modifies requirements relating to exploration permits and the Trust Land Management Fund.
15. Removes requirements for the ASLD relating to the State Natural Resource Conservation Board and rulemaking.
16. Defines terms.
17. Modifies the statement of legislative findings and the purpose statement.
18. Makes technical and conforming changes.
Senate Action House Action
NR 2/17/26 DPA 6-2-0 NREW 3/24/26 DP 5-4-0-1
3rd Read 3/10/26 16-13-1 3rd Read 6/12/26 51-3-6
Prepared by Senate Research
June 24, 2026
SB/hk