The Arizona Revised Statutes have been updated to include the revised sections from the 57th Legislature, 2nd Regular Session. Please note that the next update of this compilation will not take place until after the conclusion of the 58th Legislature, 1st Regular Session, which convenes in January 2027.
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This online version of the Arizona Revised Statutes is primarily maintained for legislative drafting purposes and reflects the version of law that is effective on January 1st of the year following the most recent legislative session. The official version of the Arizona Revised Statutes is published by Thomson Reuters.
27-240 - State trust lands; production leases; renewals; indexed royalties
27-240. State trust lands; production leases; renewals; indexed royalties
A. Notwithstanding any other law, the commissioner may renew an existing production lease without public auction if the commissioner determines all of the following:
1. The lessee is in compliance with the terms of the production lease.
2. 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.
3. The renewal is for a term that is allowed by the laws of this state.
B. A production lease that the commissioner renews pursuant to this section shall provide for a royalty rate that is adjusted pursuant to a market-based indexing mechanism that the commissioner adopts. The indexing mechanism may include any of the following:
1. Producer price indices.
2. Regional or statewide construction aggregate price indices.
3. Other objective indicators that are recognized by the industry.
C. The commissioner shall review the indexed royalty rate for each renewed production lease not more than once every five years.