FOR CAUCUS & FLOOR ACTION

REVISED

ARIZONA STATE SENATE

RESEARCH STAFF

JAMES F. KEANE

LEGISLATIVE RESEARCH ANALYST

GOVERNMENT COMMITTEE

Telephone: (602) 542-3171

Facsimile: (602) 542-7833

TO: MEMBERS OF THE SENATE

DATE: April 5, 2001

SUBJECT: Strike Everything Amendment to H.B. 2072

Purpose

Allows a state trust land lease to be assigned to a municipality if the lessee consents to the assignment or if the lessee defaults on the lease.

Background

Presently, state trust land may be leased for a variety of purposes: grazing, agriculture, mineral, mineral material, exploration and apiary. Statute provides that a lessee of state lands that violates any term of the lease is in default and must forfeit the lease. Regarding nonpayment of lease rent, the State Land Department is authorized to extend the time for payment up to 90 days no more than three times per year. Prior to canceling a lease, the State Land Commissioner is required to provide notice of the default and a 30 day period for the lessee to cure defaults stemming from failure to pay rent, taxes or assessments and a 45 day period to cure any other default. If the default is not cured, then statute requires the State Land Commissioner to cancel the lease. This legislation establishes a similar process for assigning defaulted leases to municipalities that submit a written request such an assignment.

This legislation has no fiscal impact to the state general fund.

Provisions

1. Allows a lease of state land to be assigned to a municipality if:

a. the state land is located entirely within or adjacent to the municipality

b. no portion of the state land is contained within any other municipality

c. the municipality consents to be bound by the lease terms and conditions

d. the State Land Commissioner determines that the assignment of the lease to the municipality is in the best interest of the state land trust.

e. the municipality cures any outstanding default.

f. the lessee consents to the assignment of the lease to the municipality, or if a notice of default has been sent to the lessee and the lessee’s mortgagees or lienholders and the default has not been cured in required time.

2. Requires the State Land Commissioner to make a formal order assigning a lease to a municipality and mail the order to the last known address of the lessee and the lessee’s mortgagees and lienholders if an assignment is granted by the commissioner.

3. Requires the lessee be permitted to remove any improvements to the leased land at any time within 60 days after the date of assignment.

4. Allows the lessee and the lessee’s mortgagees and lienholders to appeal an assignment order through judicial review of administrative actions. Stipulates that if no appeal is made within allotted time, the order becomes final and the assignment must be on record with the State Land Department.

5. Conforms foreclosure protections for cancellation of state trust land leases to the assignment of such leases.

6. Provides for a general effective date.

Amendments Adopted by Committee

Removes ability of a municipality to enter into agreement with the State Land Commissioner at any time for a lease of state land to be assigned to the municipality if a future default in the lease is not cured.

Senate Action

NRAE 4/5/01 DPA 5-3-0

JFK/ac