HB 2755 — state land use; highest; best

(a) APPROVE ANY IMPROVEMENTS THAT ARE REASONABLE AND CUSTOMARY IN THE LESSEE'S OR PERMITTEE'S COURSE OF BUSINESS.

ON CONCLUSION OF THE LEASE OR SPECIAL LAND USE PERMIT, THE DEPARTMENT SHALL REIMBURSE THE LESSEE OR PERMITTEE FOR THE IMPROVEMENTS WITH MONIES FROM THE STATE LAND TRUST.

(b) PROVIDE AMPLE NOTICE TO A LESSEE OR PERMITTEE BEFORE THE TERMINATION OF THE LEASE OR SPECIAL LAND USE PERMIT.

-K. 2 - H.B.

2755 K.

N.- 3 - H.B.

2755 N.

-T. 3 - H.B.

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2.

Title 37, chapter 2, article 4, Arizona Revised Statutes, is amended by adding section 37-281.05, to read:

37-281.05.

Lease of state lands for commercial purposes;

underperforming commercial leases;

option to purchase;

auction;

definitions A.

NOTWITHSTANDING ANY OTHER LAW, THE COMMISSIONER SHALL PRIORITIZE THE SALE OF STATE LANDS THAT ARE SUBJECT TO AN UNDERPERFORMING COMMERCIAL LEASE IF THE LESSEE PROVIDES NOTICE TO THE DEPARTMENT THAT THE LESSEE IS WILLING AND PREPARED TO PURCHASE THE PARCEL IN FEE SIMPLE CONSISTENT WITH THIS SECTION.

B.

A PERSON WHO HOLDS AN UNDERPERFORMING COMMERCIAL LEASE OR WHO HELD AN UNDERPERFORMING COMMERCIAL LEASE THAT EXPIRED LESS THAN ONE YEAR BEFORE THE DATE OF APPLICATION MAY APPLY TO PURCHASE THE UNDERPERFORMING COMMERCIAL STATE LANDS.

WITHIN EIGHTEEN MONTHS AFTER RECEIVING AN APPLICATION SUBMITTED PURSUANT TO THIS SUBSECTION, THE COMMISSIONER SHALL APPRAISE, ADVERTISE AND CAUSE THE UNDERPERFORMING COMMERCIAL STATE LANDS TO BE SOLD AT PUBLIC AUCTION TO THE HIGHEST AND BEST BIDDER.

C.

A PERSON WHO MEETS THE REQUIREMENTS OF THIS SECTION AND WISHES TO PURCHASE THE UNDERPERFORMING COMMERCIAL STATE LANDS MAY DO EITHER OF THE FOLLOWING:

1.

SUBMIT A SINGLE APPLICATION FOR MULTIPLE ELIGIBLE PARCELS THAT THE APPLICANT LEASES.

2.

SUBMIT A SEPARATE APPLICATION FOR EACH ELIGIBLE PARCEL THAT THE APPLICANT LEASES.

D.

EACH PUBLIC AUCTION THAT THE COMMISSIONER HOLDS PURSUANT TO THIS SECTION SHALL BE OPEN TO ALL ELIGIBLE BIDDERS FROM ALL COMMERCIAL LAND USES.

THE COMMISSIONER MAY NOT TAKE ANY ACTION DURING THE PUBLIC AUCTION OR BEFORE THE PUBLIC AUCTION THAT INCREASES THE PROBABILITY OF A BIDDER FROM ONE ELIGIBLE LAND USE WINNING THE PUBLIC AUCTION INSTEAD OF A BIDDER FROM ANOTHER ELIGIBLE LAND USE.

E.

IF AN APPLICANT'S UNDERPERFORMING COMMERCIAL LEASE EXPIRES OR IF AN APPLICANT APPLIES TO RENEW THE UNDERPERFORMING COMMERCIAL LEASE DURING THE EIGHTEEN-MONTH TIME FRAME ESTABLISHED PURSUANT TO THIS SECTION AND THE - 4 - H.B.

2755 APPLICANT DOES NOT WITHDRAW THE APPLICATION TO PURCHASE, THE COMMISSIONER SHALL PROCEED WITH THE AUCTION.

F.

A PERSON MAY NOT TRIGGER A PUBLIC AUCTION PURSUANT TO THIS SECTION ON UNDERPERFORMING COMMERCIAL STATE LANDS IF THE PERSON DOES NOT HOLD OR HAS NOT HELD AN UNDERPERFORMING COMMERCIAL LEASE OF THE STATE LANDS SUBJECT TO APPLICATION IN THE PREVIOUS EIGHTEEN MONTHS BEFORE APPLICATION.

G.

FOR THE PURPOSES OF THIS SECTION:

1.

"UNDERPERFORMING COMMERCIAL LEASE" MEANS A VALID LEASE OR A VALID HOLDOVER LEASE OF UNDERPERFORMING COMMERCIAL STATE LANDS.

2.

"UNDERPERFORMING COMMERCIAL STATE LANDS" MEANS A PARCEL OF STATE LANDS THAT IS LEASED FOR COMMERCIAL PURPOSES AND THAT MEETS AT LEAST ONE OF THE FOLLOWING CONDITIONS:

(a) THE SIZE OF THE PARCEL PREVENTS ITS INDEPENDENT DEVELOPMENT.

(b) THE PARCEL IS LANDLOCKED.

(c) THE PARCEL LACKS ON-SITE INFRASTRUCTURE OR SERVICES NECESSARY TO INDEPENDENTLY SUSTAIN THE PARCEL’S DEVELOPMENT.

(d) THE ANNUAL BASE RENT ON THE PARCEL IS BELOW AN ACCEPTABLE PERCENTAGE OF THE APPRAISED FAIR MARKET VALUE OF THE PARCEL AS DETERMINED BY THE COMMISSIONER.

(e) THE RATE OF APPRECIATION IN LAND VALUE ON THE PARCEL IS FASTER THAN THE RATE OF INCREASE IN ANNUAL BASE RENT ON THE PARCEL.

(f) THE APPRAISED FAIR MARKET VALUE OF THE APPROVED REIMBURSABLE IMPROVEMENTS ON THE PARCEL EXCEEDS THE APPRAISED FAIR MARKET VALUE OF THE PARCEL SUCH THAT THE VALUE OF THE IMPROVEMENTS WILL REDUCE THE SALE VALUE TO THE TRUST BY A PERCENTAGE DEEMED UNACCEPTABLE TO THE COMMISSIONER.

Sec.

Legislative findings The legislature,legislature as the trustee of the Arizona state land trust, finds that:

OverMinerals anand extendedcommon periodvariety theminerals stateexist landwhere departmentthey hasare. created a significant number of underperforming commercial leases of state lands.

2.- 4 - H.B.

Underperforming2755 commercial2. leases burden the state land department with excessive costs and management responsibilities and generate insufficient returns to the state land trust.

Minerals and common variety minerals are needed for all forms of commercial development on state trust lands, including affordable housing and semiconductor fabrication.

ContinuallyDevelopment renewingthat underperformingoccurs commercialover leasesstate merelytrust perpetuateslands thethat managementcontains costsminerals andpermanently burdenslocks andaway isthose notminerals, inpreventing the bestminerals interestfrom ofbeing thisextracted stateand orpermanently inforeclosing thetheir bestrevenues interestfrom ofaccruing theto statethe land trust.

TheMineral highestextraction andis bestsubject useto ofreclamation stateplans trust lands that arerestore subjectthe land to underperformingits commercialprevious leasescondition isbefore toextraction allowoccurred theand statethis trustmakes landsthe toland beusable soldfor atother publiccommercial auctionuses toonce themining highestis andcompleted. best bidder.

ThisPursuant actto isthe necessaryArizona toConstitution ensureand the bestEnabling interestAct, of the stateextraction landof trust,minerals statemust landoccur trustbefore beneficiariesany andother thiscommercial state.land use.