SB1272 - 451R - House Bill Summary

House of Representatives

SB 1272

property; right of way

Sponsors: Senator Aguirre; Representative Avelar

dpa	Committee on Transportation
dpa	Caucus and COW
x	As Transmitted to the Governor

Senate Bill 1272: (1) changes the Arizona Department of Transportation’s (ADOT) processes and authority to dispose of excess land owned by the Department; (2) includes “environmental mitigation” and “banking credits” as property acquired for transportation purposes; (3) permits the department to allow other governmental entities to have access to telecommunications facilities leased by ADOT provided the access is solely for a governmental purpose; and (4) specifies an additional exemption for ADOT from the state procurement code for property acquisitions and building facility design and construction for highway development.

History

According to ADOT, current statutes provide for the appraisal, marketing, sale and disposal of property the department no longer needs. However, the processes allowed by present statute are inefficient, cumbersome, and in some cases, result in higher costs to dispose of the land than it is worth. Currently, ADOT has 300 parcels of property in inventory worth approximately $40 million. Although many of the properties are of significant value, many are also small remnant parcels that are of minimal value.

In accordance with federal law, ADOT must mitigate impacts to threatened and endangered species resulting from ADOT construction projects. If ADOT is unable to mitigate the impacts on-site in accordance with U.S. Fish and Wildlife Services standards, ADOT cannot receive that agency’s approval for the project. This situation may require that ADOT purchase land off-site to lessen or off-set the project’s impact on the endangered species – the land is then typically turned over to a third party for management.

Current statute allows the department to lease areas above and below highways to any public agency or private person or entity. Leases are subject to statutory restrictions and procedures prescribed by the State Board of Transportation.

Current statute exempts ADOT from the procurement code for the procurement of construction or reconstruction, including engineering services, of transportation or highway facilities.

Provisions

· Allows ADOT to acquire property for legal access to landlocked parcels owned by ADOT.

· Defines property acquired for transportation purposes to include property acquired for environmental mitigation including “banking credits.”

· Authorizes the ADOT Director to permit local agencies to use and maintain land held for transportation purposes, but not presently needed, at fair rental value or other terms and conditions approved by the Director. Leases may also be granted under these conditions to nonprofit organizations, state or local agencies provided the property is historic property and will be used for a public purpose. ADOT may reduce the fair rental value by the costs of the maintenance of the land and improvements.

· Requires property conveyed to a federal, state or local agency to revert back to ADOT if the property is not used for a highway purpose.

· Increases the timeframe in which an appraisal for conveyance of property is valid from six to twelve months.

· Allows ADOT to grant an easement to a state or local agency at no cost to the agency if the property is used for a specific highway purpose. Requires the agency to indemnify ADOT for all liability and costs of maintenance of the property during the period of the easement. In addition, ADOT may terminate the easement if it is not used for a highway purpose or the ADOT determines the property is needed for highway purposes.

· Eliminates “exchange” as a method of conveying ADOT property.

· Specifies that the Director may sell property by direct sale if the property fails to sell at auction for the low appraisal amount. To sell the property at less than the low appraisal amount, the property must be advertised for 30 days at a price that is at least equal to 80% of the low appraisal amount. If more that one person makes an offer at or above the 80% level, then the director must hold another auction.

· To sell remnant parcels valued at $10,000 or less, the Director may send notice to adjacent property owners stating a range of estimated market value of the property between 80% and 100%. Adjacent owners may make an offer in that range within 60 days of the notice date. The Director shall establish procedures to dispose of these parcels at the best price the Director may obtain if no offers are received within the 60-day period.

· Allows ADOT to acquire property conveyed to an agency that is now needed for a transportation purpose at a cost equal to the amount paid by the agency or fair market value, whichever is less.

· Permits ADOT to offer property for sale to adjacent owners based on “net value” of the property. “Net value” is defined as the estimated market value reduced by cost to sell and maintain the property. The market or net value in this case must be $10,000 or less.

· Keeps the right of repurchase option for those former property owners for deeds executed with that language, but offers the original owner or their heir the option of using the new right of first refusal repurchase option.

· Permits ADOT to pay commissions at a rate determined by the ADOT Director, to licensed real estate brokers.

· Eliminates provisions pertaining to the repurchase of property from ADOT by the original owner and provides the original owner or original owner’s heir with a right of first refusal to acquire property if the property is no longer needed for transportation purpose at a price equal to the current market value of the property.

· Reduces the time period that the original owner can accept ADOT’s offer to repurchase property from 90 to 60 days.

· Specifies a 120 day notification from the state to the cities, towns or counties pertaining to abandonment of new street improvements and reconnections when a highway is complete.

· Raises the estimated property value from $2,500 to $50,000 pertaining to ADOT property that may be acquired or sold based on appraisal report and market analysis.

· Includes property necessary for environmental mitigation purposes or banking credits to be acquired for transportation needs.

· Exempts abandonment of new street improvements and reconnections of existing streets from the four-year notice requirement to affected jurisdictions, but requires a 120 day notice.

· Exempts ADOT from procurement services relating to land titles, appraisals, real property acquisitions, relocation services, property management, facility design and highway construction.

· Defines governmental entity, environmental mitigation and banking credits.

· Makes technical and conforming changes.

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· 45th Legislature