SB1274 - 452R - House Bill Summary

House of Representatives

SB 1274

state land; leases and improvements

Sponsors: Senators Martin, Brown, Arzberger et al

X	Committee on Natural Resources and Agriculture
	Caucus and COW
	Third Read
	As Passed the House

SB 1274 requires the successful bidder on a conflicting lease application for state land to pay one year of rent to the State Land Department (Department) and the value of the improvements to the previous lessee before the lease will be granted. Requires the lessee to maintain improvements on the land unless the Department authorizes removal.

History

In 1910, the United States Congress passed the Arizona-New Mexico Enabling Act, which allowed Arizona to become a state and granted Arizona land to be held in trust to produce revenue for various public institutions. The Arizona State Land Department was established in 1915 to manage state lands and resources to enhance value and optimize economic return for the trust land beneficiaries. To achieve this goal, the Department is authorized to lease, grant right of way on and sell state trust land.

In 1997, a conflicting lease application was denied for a grazing lease because the highest bidder did not intend to use the land to graze. The applicants intended to rest the land for the period of the lease, a purpose for which the land was not classified. The applicants appealed the Department’s action and the Arizona Supreme Court found for the plaintiffs on November 21, 2001 (Forest Guardians and Jonathan D. Tate v. J. Dennis Wells and the Arizona State Land Department). The Arizona Supreme Court concluded that the Department may not reject lease applications for grazing land even if the applicant’s intended use is not consistent with the land classification.

Provisions

· Clarifies that, in cases when a conflicting lease application is filed, the bidder with the highest equity will be approved.

· If a conflicting lease application is filed, the successful bidder must pay the first year of rent and the appraised value of nonremovable improvements to the Department before the lease is issued.

· Requires the successful bidder to reimburse the previous lessee for improvements within thirty days after the Department requests payment unless all parties agree to an extended payment schedule.

· States that if the successful bidder does not pay one full year of rent or the value of the improvements within thirty days of the Department’s request for payment, the lease will be offered to the next best bidder.

· Requires the successful bidder to pay annual rent equal to the amount of the annual rent bid, unless a reappraisal or rental adjustment requires a higher amount.

· Requires the lessee of the state land to maintain all improvements pertinent to the lease unless written permission from the Department allows removal of any improvement.

· Makes technical and conforming changes.

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· 45th Legislature