Title 37 — Public Lands

Chapter 1 State Agencies and Officers

Article 1 State Land Department

§ 37-101 Definitions

In this title, unless the context otherwise requires:

1. "Agricultural lands" means lands which are used or can be used principally for:

(a) Raising crops, fruits, grains and similar farm products.

(b) Algaculture. For the purposes of this subdivision "algaculture" means the controlled propagation, growth and harvest of algae.

2. "Amortized value" means the value for improvements established pursuant to section 37-281.02, subsection G.

3. "Commercial lands" means lands which can be used principally for business, institutional, religious, charitable, governmental or recreational purposes, or any general purpose other than agricultural, grazing, mining, oil, homesite or rights-of-way.

4. "Commissioner" means the state land commissioner.

5. "Community identity package" means a design theme including such elements as architecture, landscape, lighting, street furniture, walls and signage.

6. "Department" means the state land department.

7. "Grazing lands" means lands which can be used only for the ranging of livestock.

8. "Holding lease" means a commercial lease issued solely to grant a limited use leasehold interest in state land in anticipation of future development.

9. "Homesite lands" means lands which are suitable for residential purposes.

10. "Improvements" means anything permanent in character which is the result of labor or capital expended by the lessee or his predecessors in interest on state land in its reclamation or development, and the appropriation of water thereon, and which has enhanced the value of the land.

11. "Infrastructure" means facilities or amenities, such as streets, utilities, landscaping and open space, which are constructed or located on state lands and which are intended to benefit more than the land on which they are immediately located by enhancing the development potential and value of the state lands impacted by the facility or amenities.

12. "Leapfrog development" means the development of lands in a manner requiring the extension of public facilities and services from their existing terminal point through intervening undeveloped areas that are scheduled for development at a later time, according to the plans of the local governing body having jurisdiction for the area and which is responsible for the provision of these facilities and services.

13. "Leased school or university land" means school or university land for which a lease has been issued by the state, or the territory of Arizona, under which the lessee retains rights.

14. "Master developer" means a person who assumes, as a condition of a land disposition, the responsibilities prescribed by the department for infrastructure or community identity package amenities, or both, or for implementing a development plan containing a master plan area.

15. "Participation contract" means a contract arising out of a sale together with other rights and obligations in trust lands whereby the department receives a share of the revenues generated by subsequent sales or leases.

16. "Section of land" means an area of land consisting of six hundred forty acres.

17. "State lands" means any land owned or held in trust, or otherwise, by the state, including leased school or university land.

18. "Sublease" means an agreement in which the lessee relinquishes control of the leased land to another party for the purposes authorized in the lease.

19. "Urban lands" means any state lands which are adjoining existing commercially or homesite developed lands and which are either:

(a) Within the corporate boundaries of a city or town.

(b) Adjacent to the corporate boundaries of a city or town.

(c) Lands for which the designation as urban lands is requested pursuant to section 37-331.01.

20. "Urban sprawl" means the development of lands in a manner requiring the extension of public facilities and services on the periphery of an existing urbanized area where such extension is not provided for in the existing plans of the local governing body having the responsibility for the provision of these facilities and services to the lands in question.

§ 37-102 State land department; powers and duties

A. The state land department shall administer all laws relating to lands owned by, belonging to and under the control of this state.

B. The department shall have charge and control of all lands owned by this state, and timber, stone, gravel and other products of such lands, except lands under the specific use and control of state institutions and the products of such lands.

C. The department, in the name of this state, may commence, prosecute and defend all actions and proceedings to protect the interest of this state in lands within this state or the proceeds of lands within this state. Actions shall be commenced and prosecuted at the request of the department by the attorney general, a county attorney or a special counsel under the direction of the attorney general.

D. The department shall be the official representative of this state in any communication between this state and the United States government in all matters respecting state lands or any interest of this state in or to the public lands within this state.

E. The summons in any action against this state respecting any lands of this state or the products of such lands and all notices concerning such lands or products shall be served on the commissioner. Summonses, warrants or legal notices served on behalf of the department may be served by the commissioner or the commissioner's deputy, or by the sheriff or a constable of any county of this state.

F. The department shall maintain as a public record in each of the department's offices a public docket and index of all matters before the department that may be subject to appeal to the board of appeals or to the courts and all sale, exchange and lease transactions subject to bidding by the public. The department shall list a matter on the public docket immediately after an application or other request for department action is received by the department. The department shall include in the public docket every formal action and decision affecting each matter in question. The department shall establish by rule a means by which any person may obtain a copy of the public docket at the current copying cost.

G. The department shall reappraise or update the department's original appraisal of property to be leased, exchanged or sold if the board of appeals' approval of the lease or sale occurred more than two hundred forty days before the auction.

H. To the extent possible, the state land department shall:

1. Prepare maps of the ancillary military facilities described in section 28-8461, paragraph 7, subdivisions (b) and (c).

2. Make a map of the ancillary military facility described in section 28-8461, paragraph 7, subdivision (a) available to the public in printed or electronic format and provide the map in printed or electronic format to the state real estate department.

3. On receipt of proper information from the military installation commander with responsibility for the military electronics range, prepare a map of the military electronics range as defined in section 9-500.28 and make that map available to the public in printed or electronic format and provide the map in printed or electronic format to the state real estate department. Within ninety days after receipt of notice of any change in the boundaries of the military electronics range from the military installation commander, the state land department shall revise its map and provide the map to the public and to the state real estate department.

4. On or before December 31, 2024 and on receipt of proper information from the applicable military installation's and range's and Arizona national guard site's commanders, prepare electronic legal descriptions and maps of the military installation and range and Arizona national guard site and their respective influence areas as defined in sections 9-500.50 and 11-818.01 and provide the legal descriptions and maps to the state real estate department and the public. The state land department shall make changes to the boundaries of the military installation and range and national guard site and their respective influence areas and provide them to the state real estate department and the public within ninety days after receipt of those changes from the military installation's and range's and Arizona national guard site's commanders.

I. The state land department shall provide each map and the legal description of the boundaries of each ancillary military facility described in section 28-8461, paragraph 7 in electronic format to the state real estate department. Each map prepared by the state land department pursuant to this section shall:

1. Describe the ancillary military facility, the territory in the vicinity of the ancillary military facility and the high noise and accident potential zone, accident potential zone one and accident potential zone two associated with the ancillary military facility.

2. Be submitted to the county in which the ancillary military facility is located.

3. Be made available to the public.

J. The state land department shall prepare a military training route map. The map shall contain military training route numbers in this state that are used by various United States armed forces. The map shall be dated.

K. When preparing the military training route map, the state land department shall use information contained in the most current department of defense publication that is entitled "area planning military training routes for North and South America".

L. The military training route map shall be made available to the public.

M. Within ninety days after the department is notified of a change of a military training route in this state, the department shall prepare a revised military training route map. The map shall be dated and contain a statement that the map supersedes all previously dated maps. The state land department shall send the revised map to the state real estate department electronically and shall also send an accompanying letter specifying the military training route changes. The state land department shall send the revised map and an accompanying letter specifying the military training route changes to the municipalities affected by the changes and to all counties.

N. The department shall submit the military training route map prepared pursuant to this section to the counties in either an electronic or a printed format. The format shall be determined by the receiving county.

O. The state land department shall provide the legal description of the boundaries of the military training routes as delineated in the military training route map to the state real estate department in electronic format.

P. The state land department shall prepare a military restricted airspace map. The map shall contain military restricted airspace in this state that is used by various United States armed forces. The map shall be dated.

Q. When preparing the military restricted airspace map, the state land department shall use information contained in the most current department of transportation publication that is entitled "aeronautical chart".

R. The military restricted airspace map shall be made available in printed or electronic format to the public at the state land department and at the state real estate department.

S. Within ninety days after the department is notified of a change of military restricted airspace in this state, the department shall prepare a revised military restricted airspace map. The map shall be dated and contain a statement that the map supersedes all previously dated maps. The state land department shall send the revised map to the state real estate department electronically and shall also send an accompanying letter specifying the military restricted airspace changes. The state land department shall send the revised map and an accompanying letter specifying the military restricted airspace changes to the municipalities affected by the changes and to all counties.

T. The department shall submit the military restricted airspace map prepared pursuant to this section to the counties in either an electronic or a printed format. The format shall be determined by the receiving county.

U. The state land department shall provide the legal description of the boundaries of the military restricted airspace as delineated in the military restricted airspace map to the state real estate department in electronic format.

V. The department may accept title to and manage real estate, property rights and related infrastructure acquired pursuant to section 26-262, subsection K for preserving or enhancing military installations in this state.

§ 37-103 Seal of state land department

The state land department shall have a seal, and it shall be affixed with the signature of the state land commissioner to all instruments of conveyance, leases, certificates and other official acts. The signature of the commissioner and seal of the department upon the original or copy of any paper, plat, map or document from the state land department shall impart verity thereto.

§ 37-104 Power to make and accept conveyances of real property

A. The state land department may accept conveyances to the state of real property or any interest therein whether by gift, in trust, or otherwise, and containing terms, conditions or requirements deemed proper by the department.

B. Conveyances may be accepted for the purposes, among others, of establishing and maintaining airports and landing fields, with uses necessary or incidental thereto, proving grounds, testing grounds, and in addition but without limitation, war projects necessary to state or national defense, upon terms and conditions reasonable or necessary. The department may enter into arrangements, agreements or leases for the establishment, operation or maintenance of such projects with agencies of the United States or with any person, firm or corporation.

C. The department may lease, dedicate, convey or otherwise transfer state lands unless otherwise leased, subject to constitutional limitations, to agencies of the United States or to any person, firm or corporation, upon terms and conditions necessary and proper, for the purpose of establishing, maintaining or conducting airports and landing fields and uses necessary or incidental thereto, proving grounds, testing grounds, and in addition but without limitation, war projects necessary to state or national defense.

§ 37-105 Inclusion of state lands under reclamation projects and irrigation districts; assessments and charges

A. The state land department, with the approval of the governor, may make contracts for and on behalf of the state with the United States or an irrigation district organized and existing under the laws of the state, which is served wholly or partially by a federal reclamation project, to include lands owned by the state or belonging to any institution of the state within the project and to agree to pay as much of the cost of the project as becomes due on account of such lands.

B. The department, after state lands are included within the project, may guarantee the payment of and may pay to the United States or the irrigation district the full amount of district or reclamation assessments or charges against the state lands at any time the assessments or charges become delinquent.

C. Nothing in this section shall be construed as creating a lien upon state lands or against the interest of the state therein, or as creating an obligation of the state to pay any charges, assessments or debts incurred by any district other than those described in this section.

§ 37-106 Federal reclamation trust fund

A. There shall be a federal reclamation trust fund of which the state treasurer shall be custodian. Payments made by the state land department for the assessments or charges authorized to be paid by the department under section 37-105, and payments received by him as reimbursements therefor, shall be drawn from and credited to the federal reclamation trust fund.

B. The fund shall not revert to the general fund, and shall not be subject to the provisions of title 35, chapter 1.

§ 37-106.01 Power to contract for central Arizona project water for use on state lands; payment of costs; selling unallocated water; disposition of revenue from sale of central Arizona project water and water rights

A. The state land department, with the approval of the governor, may make contracts for and on behalf of the state with the United States or a multi-county water conservation district, organized under title 48, chapter 22, or both, for the purchase and delivery of water from the central Arizona project for use for municipal and industrial purposes on state lands within such district and to agree to pay therefor an amount equal to that paid by other municipal and industrial users under the project for comparable quantities.

B. The quantity of water for which the department is authorized to contract shall not exceed one hundred thousand acre-feet per annum diverted from the aqueduct system between the Colorado river and the Salt river, and one hundred thousand acre-feet per annum diverted from the system south of the Salt river.

C. All or any part of the rights to water acquired by the department under any such contract may be sold, assigned and transferred to any lessee or purchaser of any of the state lands on which such water has been or is to be used or to any provider of permanent municipal water service to those lands. The department shall not make the purchase or use of central Arizona project water by the lessee a condition to renewal of a lease of state land or by the purchaser or lessee in a sale or new lease where mining of groundwater from state lands will not be involved. The transferee of any rights to water under this subsection must have or obtain before the transfer a contract with either or both the United States or a multi-county water conservation district for service of central Arizona project water for municipal and industrial use. The transferee shall reimburse the department, on a pro rata basis, for all costs and charges, including capital costs and administrative expenses, incurred by the department, as of the time of transfer, under its contract for the purchase and delivery of central Arizona project water under subsection A of this section.

D. The cost of central Arizona project water shall be paid from revenues derived from the transfer of water rights acquired by the department under its contract and from revenues from the sale of central Arizona project municipal and industrial water or, in the event such revenues are not sufficient, such cost shall be a charge against the state, providing such contract does not violate article IX, section 5, Constitution of Arizona. Nothing in this section shall be construed as creating a lien upon state lands or against the interest of the state therein or as creating an obligation of the state to pay any charges, costs, assessments or debts other than those described in this section.

E. Before the selection board allocates central Arizona project water to specific state trust lands the department, with the board's approval, may enter into interim contracts to sell unallocated central Arizona project water for municipal and industrial uses on state or any other land subject to a determination by a multi-county water conservation district that the proposed action complies with the terms of the applicable subcontract and the central Arizona project master repayment contract and subject to approval of the director of the department of water resources. Purchasers of water under this subsection shall reimburse the department, on a pro rata basis, for all costs and charges, including capital costs and administrative expenses, incurred by the department under its contract for the purchase and delivery of central Arizona project water under subsection A of this section.

F. The department, with the approval of the state selection board, may enter into contracts to undertake or authorize the storage of central Arizona project water for which the department has signed a municipal and industrial water service subcontract, but that the department has not otherwise allocated for use. A person with whom the department contracts shall pay to a multi-county water conservation district all applicable operation, maintenance and replacement charges established under the provisions of title 48, chapter 22 and associated with any water stored, but shall not be responsible for capital costs paid by the department pursuant to its contracts with the multi-county water conservation district. Each contract between the department and another person for water storage shall specify that the water storage permit holder for the stored water shall assign to the department a share of any long-term storage credits accrued pursuant to the permit and that the department's share of the long-term storage credits shall be negotiated based on the proportion of the costs incurred by the department in the water storage. The department may sell long-term storage credits for the benefit of the state trust land at the appraised fair market value of the credits. In undertaking water storage pursuant to this subsection, the department and the persons with whom it contracts shall comply with all of the provisions of title 45, chapter 3.1. For the purposes of this subsection, "water storage", "long-term storage credit" and "water storage permit" have the same meanings prescribed in section 45-802.01.

G. The department shall deposit, pursuant to sections 35-146 and 35-147, revenues from the transfer of water rights under subsection C of this section and from the sale of water under subsection E of this section, except for monies attributable to reimbursement of administrative expenses, in the central Arizona project municipal and industrial repayment fund established by section 37-526. Monies attributable to reimbursement of administrative expenses, under both subsections C and E of this section, shall be deposited in the state general fund pursuant to sections 35-146 and 35-147.

§ 37-107 Fees; accounts

A. The commissioner shall prescribe by rule application, permit, transaction, appraisal, service, filing and document fees for transactions related to the selling, leasing, annexation, conveyance, exchange, right-of-way and use of state lands or products of state lands managed by the department. Before adopting any rule setting or changing a fee under this section, the commissioner must submit the proposed fee amount to the joint legislative budget committee for review. The commissioner shall deposit the revenues derived from the fees in the trust land management fund pursuant to section 37-527.

B. The commissioner may establish selling and administrative fees, which may include:

1. Up to three per cent of the consideration paid for all lands and improvements sold or long-term leased.

2. Zoning application fees paid by the department to rezone land.

3. Legal advertising expenses required by law and paid by the department.

C. The revenues derived from the fees established pursuant to subsection B of this section shall be deposited as follows:

1. The revenues derived from the fees collected pursuant to subsection B, paragraph 1 of this section, less any amounts paid as brokerage fees pursuant to section 37-132, subsection B, paragraph 2, shall be deposited in the trust land management fund pursuant to section 37-527.

2. The monies collected pursuant to subsection B, paragraph 2 of this section as actual costs of zoning application fees paid by the department to rezone lands shall be deposited in a separate account of the state land department fund designated as the zoning application fee account. Monies in the account shall be used to pay zoning application fees if developing lands require rezoning by the jurisdiction in which the lands are located. The commissioner shall administer the account.

3. The monies collected under subsection B, paragraph 3 of this section, subsection D of this section and application evaluation and processing costs pursuant to section 37-205, subsection A shall be deposited in separate accounts of the state land department fund to be used to pay costs of legal advertising, costs of appraisals required by the enabling act, by the Constitution of Arizona or by statute and the costs of evaluating and processing applications. The commissioner shall administer the accounts. On notice from the commissioner, the state treasurer shall invest and divest monies in the state land department fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.

D. The commissioner may require or allow prepayment for the estimated cost of an appraisal required pursuant to section 27-234 and this title. The commissioner shall deposit and administer prepayment monies as provided by subsection C, paragraph 3 of this section. The commissioner shall use monies accepted pursuant to this subsection to conduct contract appraisals. If an auction is held and an applicant who has prepaid the estimated cost of an appraisal or paid an appraisal fee is not the successful bidder, the successful bidder shall reimburse the applicant either for the actual cost of the appraisal or for the appraisal fee, whichever was paid. If the commissioner proceeds to auction on the commissioner's initiative, the successful bidder at auction shall reimburse the department for the actual cost of the appraisal, if there was a contract appraisal, or pay the appraisal fee if a contract appraisal was not obtained. Nothing in this subsection:

1. Requires the commissioner to offer any land at auction or for lease.

2. Requires the commissioner to reimburse an applicant if the land is not auctioned or leased.

3. Affects the status of any other application pending an appraisal.

E. Except as provided under section 37-205, fees paid under this section are not refundable to the applicant, regardless of the outcome of the application.

§ 37-108 Court actions related to natural resources projects; remedies; account; definition

A. In addition to other remedies available by law, a person that files an action in a court of record in this state to enjoin a natural resources project and that does not prevail may be assessed court costs and damages as determined by the court incurred by the natural resources project as a result of the injunction, including any of the following:

1. Costs relating to fire suppression.

2. Costs relating to flooding or damage to the watershed.

3. Costs relating to the damage or loss of natural resources or real property.

B. Any monetary damages awarded by the court pursuant to subsection A of this section shall be deposited in an account established and managed by the department for the purpose of paying for the costs incurred as a result of the injunction, including the costs identified in subsection A of this section.

C. For the purposes of this section, "natural resources project" includes any project that reduces the risk of catastrophic fire or loss from erosion, flooding and landslides or that protects watersheds.

§ 37-109 Alternative payment methods

At the commissioner's sole discretion, the commissioner may accept fees imposed pursuant to section 37-107 by alternative payment methods, including credit and charge cards, pursuant to section 35-142, subsection J, debit cards and electronic funds transfers or other alternative payment methods, pursuant to section 35-315, but the department is not obligated to accept any payment using an alternative payment method.

§ 37-110 Due diligence fund; exemption; reversion

A. The due diligence fund is established. The commissioner may use monies in the fund to pay the department's costs of evaluating and processing applications and otherwise preparing lands for sales, leases, rights-of-way or other use permits.

B. The fund consists of legislative appropriations and reimbursements to the department by winning bidders for the department's costs of advance due diligence investigations and analyses pursuant to subsection A of this section. Monies in the fund are subject to legislative appropriation.

C. The commissioner shall administer the fund. Monies in the fund are exempt from the provisions of section 35-190 relating to the lapsing of appropriations, except that all monies in the fund exceeding $5,000,000 at any time revert to the state general fund.

Article 2 State Land Commissioner

§ 37-131 State land commissioner; appointment; term; removal; compensation

A. There shall be a state land commissioner who shall be the executive officer of the state land department.

B. The commissioner shall be appointed by the governor pursuant to section 38-211 and shall serve at the pleasure of the governor.

C. The commissioner shall receive compensation as determined pursuant to section 38-611.

§ 37-132 Powers and duties

A. The commissioner shall:

1. Exercise and perform all powers and duties vested in or imposed on the department and prescribe such rules as are necessary to discharge those duties.

2. Exercise the powers of surveyor-general except for the powers of the surveyor-general exercised by the state treasurer as a member of the selection board pursuant to section 37-202.

3. Make long-range plans for the future use of state lands in cooperation with other state agencies, local planning authorities and political subdivisions.

4. Promote the infill and orderly development of state lands in areas beneficial to the trust and prevent urban sprawl or leapfrog development on state lands.

5. Classify and appraise all state lands, together with the improvements on state lands, for the purpose of sale, lease or grant of rights-of-way. The commissioner may impose such conditions and covenants and make such reservations in the sale of state lands as the commissioner deems to be in the best interest of the state trust. The provisions of this paragraph are subject to hearing procedures pursuant to title 41, chapter 6, article 10 and, except as provided in section 41-1092.08, subsection H, are subject to judicial review pursuant to title 12, chapter 7, article 6.

6. Have authority to lease for grazing, agricultural, homesite or other purposes, except commercial, all land owned or held in trust by this state.

7. Have authority to lease for commercial purposes and sell all land owned or held in trust by this state, but any such lease for a term longer than ten years for commercial purposes or any such sale shall first be approved by the board of appeals.

8. Except as otherwise provided, determine all disputes, grievances or other questions pertaining to the administration of state lands.

9. Appoint deputies and other assistants and employees necessary to perform the duties of the department and assign their duties subject to title 41, chapter 4, article 4 and require of them such surety bonds as the commissioner deems proper. The compensation of the deputy, assistants or employees shall be as determined pursuant to section 38-611.

10. Make a written report to the governor annually, not later than September 1, disclosing in detail the activities of the department for the preceding fiscal year and publish it for distribution. The report shall include an evaluation of auctions of state land leases held during the preceding fiscal year considering the advantages and disadvantages to the state trust of the existence and exercise of preferred rights to lease reclassified state land.

11. Withdraw state land from surface or subsurface sales or lease applications if the commissioner deems it to be in the best interest of the trust. This closure of state lands to new applications for sale or lease does not affect the rights that existing lessees have under law for renewal of their leases and reimbursement for improvements.

B. The commissioner may:

1. Take evidence relating to, and may require of the various county officers information on, any matter that the commissioner has the power to investigate or determine.

2. Under such rules as the commissioner adopts, use private real estate brokers to assist in any sale or long-term lease of state land and pay, from fees collected under section 37-107, subsection B, paragraph 1, a commission to a broker that is licensed pursuant to title 32, chapter 20 and that provides the purchaser or lessee at auction. The purchaser or lessee at auction is not eligible to receive a commission pursuant to this paragraph. A commission shall not be paid on a sale or a long-term lease if the purchaser or lessee is a political subdivision of this state.

3. Require a permittee, lessee or grantee to post a surety bond or any form of collateral deemed sufficient by the commissioner for performance or restoration purposes. The commissioner shall use the proceeds of a bond or collateral only for the purposes determined at the time the bond or collateral is posted. For agricultural lessees, the commissioner may require collateral as follows:

(a) As security for payment of the annual assessments levied by the irrigation district in which the state land is located if the lessee has a history of late payments or defaults. The amount of the collateral required may not exceed the annual assessment levied by the irrigation district.

(b) As security for payment of rent, if an extension of time for payment is requested or if the lessee has a history of late payments of rent. The collateral shall be submitted at the time any extension of time for payment is requested. The amount of the collateral required may not exceed the annual amount of rent for the land.

(c) A surety bond shall be required only if the commissioner determines that other forms of collateral are insufficient.

4. Withhold market and economic analyses, preliminary engineering, site and area studies and appraisals that are collected during the urban planning process from public viewing before they are submitted to local planning and zoning authorities.

5. Withhold from public inspection proprietary information received during lease negotiations. The proprietary information shall be released to public inspection unless the release may harm the competitive position of the applicant and the information could not have been obtained by other legitimate means.

6. Issue permits for short-term use of state land for specific purposes as prescribed by rule.

7. Contract with a third party to sell recreational permits. A third party under contract pursuant to this paragraph may assess a surcharge for its services as provided in the contract, in addition to the fees prescribed pursuant to section 37-107.

8. Close urban lands to specific uses as prescribed by rule if necessary for dust abatement, to reduce a risk from hazardous environmental conditions that pose a risk to human health or safety or for remediation purposes.

9. Notwithstanding subsection A, paragraph 4 of this section, authorize, in the best interest of the trust, the extension of public services and facilities either:

(a) That are necessary to implement plans of the local governing body, including plans adopted or amended pursuant to section 9-461.06 or 11-805.

(b) Across state lands that are either:

(i) Classified as suitable for conservation purposes pursuant to section 37-312.

(ii) Sold or leased at auction for conservation purposes.

10. Contract with a qualified third-party reviewer that is selected by the commissioner to review any application submitted to the department if the commissioner determines that the department will not be able to take action on the application within sixty working days after the application is submitted to the department. A third-party reviewer that reviews an application pursuant to this paragraph shall do both of the following:

(a) Review the application and take all other related actions in accordance with all requirements that are adopted by the department.

(b) Notify the department and the applicant of the findings of the review.

C. The commissioner or any deputy or employee of the department may not have, own or acquire, directly or indirectly, any state lands or the products on any state lands, any interest in or to such lands or products, or improvements on leased state lands, or be interested in any state irrigation project affecting state lands.

§ 37-132.01 Performance and restoration account; agreements with public and private entities

A. The proceeds of any security imposed by the commissioner as a condition of sale pursuant to section 37-132, subsection A, paragraph 5 and the proceeds of a bond, collateral or security received pursuant to section 37-132, subsection B, paragraph 3 or section 37-335.06, subsection B shall be deposited in a separate account of the state land department fund that is designated as the performance and restoration account and that shall be used for the performance or restoration purposes for which the bond, collateral or security was acquired. The commissioner shall administer the account.

B. The commissioner may enter into an agreement with a private entity or an intergovernmental agreement pursuant to title 11, chapter 7, article 3 to coordinate the review and approval of plans for performance or restoration purposes and to perform the performance or restoration action, including:

1. Designating a lead agency for the performance or restoration action.

2. Issuing the lead agency or entity temporary rights of entry on, under and over state trust lands for the purpose of access for the performance or restoration action. The temporary rights of entry shall be issued pursuant to applicable law.

3. Authorizing the lead agency or entity to use the proceeds of the bond, collateral or security for the performance or restoration action.

§ 37-133 Decisions of commissioner; filing; notice to persons in interest

A. Decisions rendered by the commissioner pursuant to the powers and duties conferred upon him by law, whether relating to the administration of state lands or other departments or agencies of state under his jurisdiction, shall be in writing and filed of record in his office.

B. Notice of the decisions shall be given by the commissioner to any person in interest of record in the department by notifying the person in interest by certified mail, return receipt requested, addressed to the last known post office address of record in the department.

C. If no appeal is taken by any person in interest as provided in title 41, chapter 6, article 10, the decision of the commissioner shall be final and conclusive.

Chapter 1.2 Resource Analysis Division

Article 1 General Provisions

§ 37-171 Definitions

In this chapter, unless the context otherwise requires:

1. "Administrator" means the administrator of the division.

2. "Geographic information system" means computer-based technologies for storing, manipulating and analyzing geospatial data.

3. "Geospatial data" means digital data using geographic or projected map coordinate values, identification codes and associated descriptive data to locate and describe boundaries or features on, above or below the surface of the earth or characteristics of the earth's inhabitants or its natural or human-constructed features.

4. "Public agency" means any agency or instrumentality of the United States, this state, another state, a regional council of governments in this state, an Indian tribe, nation, community or band, any political subdivision of this state or another state or any foreign country.

5. "Resource analysis division" or "division" means the resource analysis division of the state land department.

§ 37-172 Resource analysis division; administrator; employees; compensation; state cartographer

A. There is established within the state land department the resource analysis division.

B. The state land commissioner shall appoint an administrator of the division.

C. The administrator shall be responsible for the administrative functions of the division.

D. The administrator may employ, with the approval of the commissioner, the employees necessary to carry out the provisions of this chapter.

E. Compensation for the administrator and other employees of the division shall be established pursuant to section 38-611.

F. The office of state cartographer is established within the division. The commissioner is designated the state cartographer, but the commissioner may delegate the responsibilities and functions of the state cartographer under this chapter to an administrative officer of the division.

§ 37-173 Duties

The division shall:

1. Establish a clearinghouse of information and a central repository for geospatial data and statewide geographic information system services.

2. Provide geographic information system services and geospatial data for the state land department and other public agencies in this state.

3. Facilitate the sharing of geospatial data and geographic information system services among all public agencies to address the needs of this state.

4. Prepare standards and specifications for developing, maintaining and sharing geospatial data and geographic information system services.

5. Function as the Arizona affiliate office for national geographic information systems and geospatial data coordination initiatives.

6. Establish a liaison relationship with the United States geological survey, federal geospatial organizations and other state and local government organizations in order to facilitate and coordinate sharing geospatial data, providing geographic information system services and using a clearinghouse.

7. Identify federal, state, regional, tribal and local government and private sector geospatial data and geographic information system services to include in the clearinghouse.

8. Coordinate the development and maintenance of a geospatial public land survey system and cadastral database with responsible federal, state and local agencies.

§ 37-174 Powers

The division may:

1. Apply for and accept grants, contributions and appropriations for carrying out the functions of the division.

2. Contract for professional services if such work or services cannot be satisfactorily performed by its employees or by any other state agency.

3. Request and utilize the advice and services of all federal, state, local and regional agencies.

4. Correspond, confer and represent its own interest or the interest of any political subdivision upon request.

§ 37-175 Information; cost

The division shall make information available to any person requesting such information at a uniform rate adequate to cover the cost of providing such information.

§ 37-176 Revolving fund; source of monies; claims

A. Monies received by the division pursuant to this article, other than appropriations, shall be promptly deposited, pursuant to sections 35-146 and 35-147, by the administrator in a fund to be known as the resource analysis division revolving fund. Monies in the resource analysis division revolving fund are exempt from section 35-190, relating to the lapsing of appropriations.

B. Expenses to be paid from the resource analysis division revolving fund shall be limited to data processing supplies and support for the geographic information system, including equipment, software and supplies, contract services, maps, equipment and software maintenance, equipment repair and geographic system training. Claims for expenses shall be approved by the administrator.

§ 37-177 Arizona geographic information council

A. The Arizona geographic information council is established in the department consisting of the following members who are appointed by the governor:

1. Eighteen members representing state agencies and instrumentalities.

2. Six members representing federal governmental agencies.

3. One member representing a statewide association of county governments.

4. One member representing a statewide association of municipal governments.

5. Six members representing geographic information systems consortia or local governments.

6. One member representing an Arizona Indian tribal nation.

7. One member representing a professional geospatial organization.

8. One member representing the private sector.

B. The governor shall appoint members of the council for staggered three year terms of office, but the governor may remove a member for cause. Vacancies shall be filled for an unexpired term in the same manner as original appointments. The council shall annually elect a chairperson, vice-chairperson and other officers it considers necessary.

C. Members of the council are not eligible to receive compensation, but, subject to the availability of monies, are eligible to receive reimbursement of expenses pursuant to title 38, chapter 4, article 2.

D. The council shall:

1. Advise the Arizona state cartographer's office on matters related to geospatial data sharing and appropriate strategies to support a geospatial clearinghouse and statewide geographic information system.

2. Facilitate interagency coordination for the purpose of geospatial data sharing and supporting a geospatial clearinghouse, a statewide geographic information system and location-based services that enhance and support federal, state and local government business systems, including emergency preparedness and other disaster mitigation response systems.

3. Collect information on user requirements on matters related to geographic information systems, geospatial data, technologies, products, services, standards, programs and activities and prioritize those requirements to the Arizona state cartographer's office, the United States geological survey and other producers of geospatial data.

4. Serve as a forum to facilitate informational exchange between federal, state, tribal, regional and local governments, the private sector and professional associations.

5. Appoint technical committees as necessary.

§ 37-178 Geospatial data sharing

A. A public agency that shares geospatial data with another public agency may:

1. Share geospatial data without entering into a written agreement with the other public agency.

2. Share geospatial data of which it is the custodian.

3. Retain custodial ownership of any geospatial data provided to other public agencies.

4. Prohibit shared data from being redistributed by recipient public agencies if notification of the prohibition is given.

B. A public agency that shares geospatial data may exempt the data from commercial use fees prescribed in section 39-121.03, subsection A, paragraph 3.

C. A public agency that shares geospatial data of which it is the custodian is not liable for errors, inaccuracies or omissions and shall be held harmless from and against all damage, loss or liability arising from any use of geospatial data that is shared.

D. A public agency that shares geospatial data or receives shared geospatial data may withhold the shared data from public disclosure if the data consist of critical infrastructure information as defined in section 41-1801.

Chapter 2 Administration of State and Other Public Lands

Article 1 Selection

§ 37-201 Examination and selection duties of commissioner

A. The commissioner shall:

1. Examine the public lands within the state for the purpose of assisting the selection board in selecting the lands granted to the state in quantity, or as indemnity, by the enabling act.

2. Prepare all lists, forms and papers required in the selection of the lands and securing title thereto.

3. Maintain such records and perform such duties as necessary to protect the rights of the state in the lands.

B. The fees and expenses of selecting and securing title to the lands shall be paid from the general fund on claims approved by the commissioner.

§ 37-202 Selection board; powers and duties; distribution of central Arizona project water to state trust lands

A. There is established a selection board composed of the governor, the state treasurer exercising those powers of the surveyor-general with respect to the selection of lands as provided in this section and the attorney general.

B. The selection board shall do all things necessary to comply with the laws of the United States and of the state in securing title to the lands granted to the state in quantity or as indemnity by the enabling act, or to any other lands which may be granted to the state.

C. The board shall file upon and select, and cause to be withdrawn and surveyed for selection, lands the commissioner from time to time recommends for selection or for withdrawal and survey.

D. The selection board shall cancel, relinquish and release the claim of the state and reconvey to the United States any tract of land erroneously listed to the state or any tract upon which, at the time of selection or withdrawal, a bona fide claim has been initiated by an actual settler.

E. The board shall designate which of the lands selected shall be assigned to each specific fund designated in the grants made to the state by the United States. The selections shall be apportioned among the various grants so that each fund shall receive as nearly as possible its pro rata share of the different classes of land selected.

F. The board shall determine the distribution of all central Arizona project water allocated for the benefit of state trust lands. All allocations of central Arizona project water made by the selection board shall be used on state trust lands except that if state trust lands to which central Arizona project waters have been allocated are sold, then the central Arizona project water allocated to those lands may be used on those lands. All allocations of central Arizona project water made by the selection board shall conform to the Arizona state water plan administered by the department of water resources. Allocations greater than ten per cent of the total amount of central Arizona project water available to the state for the benefit of state trust lands shall require legislative approval by concurrent resolution before such allocation is available for use.

G. If state land is included in a proposed corporate limit of a municipality, the selection board, at the commissioner’s request, may render a determination approving or rejecting the inclusion of the state land in the proposed corporate limit.

§ 37-203 Selection of lands; designation of land to institution or purpose; credit of receipts to specific funds

A. Lands granted to the state shall be selected and filed upon by the selection board as expeditiously as the best interest of the state warrants. All lands selected and all lands specifically by description granted to the state shall be designated on the books, maps and plats of the state land department as lands of the institution, department or purpose to which the proceeds received therefrom will be credited.

B. All money received from leases or grants of any land designated as belonging to any institution, department or purpose, and all monies received for forfeitures or penalties in connection therewith shall belong to the institution, department or purpose and shall be credited to a fund set up for such institution, department or purpose.

§ 37-204 Advances for survey; repayment

For the purpose of having public lands of the United States surveyed to satisfy any public land grants made to the state in the manner prescribed by the act of Congress approved August 18, 1894, and as that act was made applicable to this state by the enabling act, the governor may deposit to the credit of the treasurer of the United States at a United States depository designated by the commissioner of the general land office, monies necessary for the survey of any township for which application for survey has been made, and the director of the department of administration shall draw the necessary warrants for that purpose. Such warrants shall be paid from the general fund, and when the monies so advanced are returned to the state they shall be returned to the general fund.

§ 37-205 Due diligence costs related to disposition of land

A. In addition to other fees required by this title, and instead of the department performing advance due diligence pursuant to section 37-110, subsection A, the commissioner may require or allow an applicant to advance or incur the costs of the department's evaluating and processing an application and otherwise preparing land for a sale, lease, right-of-way or other use permit. Monies that are advanced by the applicant to the department pursuant to this subsection shall be deposited in a separate account of the state land department fund.

B. If the successful bidder at an auction is not the applicant, the successful bidder shall reimburse the applicant for fees and costs paid pursuant to this section in amounts and on terms the commissioner directs in the auction notice. After receiving the reimbursement amounts, the commissioner shall remit them to the applicant.

C. If an auction does not occur or a transaction is otherwise not completed as a result of a mistake or circumstances caused by the department, including issues arising out of concerns over title, misidentification of the parcel and factors affecting the commissioner's view of the timeliness or desirability of disposing of the parcel, then the commissioner, on the timely written request of an applicant, may reimburse or cause to be reimbursed to the applicant, on terms that the commissioner considers reasonable and appropriate, from monies of the department all or part of the costs paid pursuant to this section and application fees paid pursuant to section 37-107. Reimbursement for costs paid pursuant to this section may only be for costs that the commissioner determines to represent an enhancement of knowledge about the parcel or that tangibly or intangibly enhance the value of the parcel. The commissioner may refuse any reimbursement request for any reason.

Article 2 Investigation, Classification and Appraisal

§ 37-211 Investigations of and experiments on state lands to determine possible uses; reclassification

A. The state land commissioner may conduct investigations and experiments on the lands of the state to:

1. Determine which are suitable for agricultural purposes, or which may be suitable therefor by the development of water and otherwise.

2. Determine which are useful for grazing purposes only.

3. Ascertain the requirements of lands susceptible of agricultural development and the method or means best adapted to insure the development.

4. Determine which trust lands are suitable for conservation purposes pursuant to article 4.2 of this chapter.

5. Obtain other information and data which will aid in the leasing, sale and administration of lands belonging to the state.

B. If in the investigation the commissioner determines that lands have been erroneously classified, the classification shall be changed.

§ 37-212 Classification of lands selected; reclassification

A. The commissioner shall promptly classify all lands selected as provided in article 1 of this chapter.

B. In classifying state lands, the commissioner shall maintain in the offices of the department plats, maps or books containing the description of lands and disclosing:

1. Lands suitable for agricultural purposes.

2. Lands suitable for grazing purposes.

3. Lands suitable for homesite purposes.

4. Lands suitable for commercial purposes.

5. Lands within the boundaries of any school district which may, within the discretion of the governing board of the applicable school district within which the lands are located and within the discretion of the commissioner, become adaptable to public educational purposes, provided such lands shall not exceed sixty acres for school buildings and grounds.

6. Lands suitable for exchange.

7. Urban lands suitable for urban planning.

8. Urban lands consistent with a development or secondary plan.

9. Lands suitable for multipurpose use.

10. Trust lands suitable for conservation purposes pursuant to article 4.2 of this chapter.

C. The commissioner may reclassify lands if the commissioner determines that reclassification is in the best interest of the trust and of the state.

D. Classification of urban lands as suitable for urban planning or for self-contained community site planning shall not cause an existing lease to be terminated under section 37-290, and such classification shall be accomplished pursuant to the requirements of article 5.1 of this chapter.

E. Classification of trust lands suitable for conservation pursuant to subsection B, paragraph 10 of this section shall be accomplished pursuant to article 4.2 of this chapter and shall not cause an existing lease to be impaired or canceled under section 37-290.

§ 37-213 Board of appeals

A. There is established a board of appeals consisting of five members appointed by the governor pursuant to section 38-211. No more than three members shall be appointed from the same political party. Members shall be appointed as follows:

1. One member from each of three districts into which the state is divided as follows:

(a) First district: Pima, Santa Cruz, Cochise, Graham and Greenlee counties.

(b) Second district: Maricopa, Yuma, La Paz, Pinal and Gila counties.

(c) Third district: Mohave, Yavapai, Coconino, Apache and Navajo counties.

2. The remaining two members of the board of appeals shall be appointed at large by the governor.

B. To be eligible for appointment as a member of the board a person shall be experienced in the classification and appraisal of all types of real estate.

C. The term of office of each member is six years, ending on the third Monday in January of the sixth year after his appointment. Appointments to fill vacancies resulting other than from expiration of term shall be for the unexpired portion of the term only.

D. Each member of the board is eligible to receive compensation as determined pursuant to section 38-611.

E. The board may adopt administrative rules necessary to perform its duties prescribed by law.

§ 37-214 Board of appeals; approval of participation contracts; appeal

A. Before approving a participation contract, the board of appeals shall review the report submitted by the commissioner pursuant to section 37-239. A majority vote of a quorum of the board is required for the adoption of the report. Upon the adoption of the report the proposed participation contract may be approved. The board shall act within one hundred twenty days after receiving the report.

B. Land classified as suitable for commercial or homesite purposes after completing the planning process pursuant to article 5.1 of this chapter shall not be leased for a term greater than ten years unless the board determines that such lease will result in obtaining a higher benefit to the trust than would result if the land were sold. In making this determination, the board shall consider the sales price, the investment earnings potential, the property tax revenues obtainable once the land has been sold, the role of trust earnings in the financing of the activities of the beneficiaries, the potential earnings available through the lease or exchange of the lands in question, the potential long-term appreciation of the land and all other factors deemed relevant by the board.

C. A final decision of the board may be appealed by the commissioner or by any person adversely affected by the decision pursuant to title 41, chapter 6, article 10.

§ 37-215 Appeal from decision of commissioner or board of appeals

A. An appeal from a final decision of the state land commissioner relating to classification or appraisal of lands or improvements may be taken to the board of appeals by any person adversely affected by the decision. Appeals shall be taken by giving notice in writing to the commissioner within thirty days from the date notice of the decision is mailed to the last known post office address of the appellant by the commissioner.

B. As a condition for filing an appeal of an order regarding an appraisal conducted under section 37-285 or a reappraisal required by the terms of a lease, the appellant, with the notice of appeal, shall pay to the department all amounts of the billed rental during the pendency of the appeal. The disputed amount shall be held by the state treasurer in an impound fund to be invested subject to the final disposition of the appeal, and the undisputed amount shall be credited to the appropriate trust. If the appellant fails to pay any amount before the deadline for filing notice of the appeal and fails to provide proof of payment of the amount with the notice of appeal, any notice of appeal to the board of appeals or to superior court shall not be accepted for filing and the decision of the commissioner is final. If billed rental becomes due during the pendency of an appeal and is not paid on or before the due date, the appeal shall be dismissed and the decision of the commissioner is final. If the commissioner's decision is upheld on final disposition of the appeal, the monies in the impound fund, with interest, shall be paid to the appropriate trust. If the commissioner's decision is not upheld on final disposition of the appeal, the monies in the impound fund, with interest, shall be credited first to the accrued rent determined to be due and the remainder shall be paid to the appellant.

C. The board of appeals, within one hundred twenty days from the date of the notice of appeal, shall conduct a hearing in the county in which the major portion of the land involved in the appeal is located, unless otherwise stipulated by the parties to the appeal. The board shall render its decision upon the hearing within sixty days from the date of the hearing unless the parties to the appeal otherwise stipulate. The board shall make its findings and decision in writing and shall furnish a copy to all parties to the appeal. A majority of a quorum of the board may render the decision.

D. All records of the board of appeals shall be kept in the offices of the state land department. The department shall provide clerical assistants to the board as necessary to perform its duties.

E. Except as provided in section 41-1092.08, subsection H, the commissioner or any person adversely affected by a final decision of the board of appeals may seek judicial review pursuant to title 12, chapter 7, article 6.

F. Any person adversely affected by a final decision of the commissioner not relating to the classification or appraisal of lands or improvements is entitled to a hearing pursuant to title 41, chapter 6, article 10.

G. If no appeal is taken, the decision of the commissioner or the board of appeals, as the case may be, is final and conclusive.

Article 2.1 Sale and Lease of State Lands for Public Education

§ 37-221 Sale or lease of state lands for public education purposes

A. Notwithstanding any other law, school districts may enter into leases of state land for more than ten years if the land is to be used for public education purposes. These leases shall be granted according to the constitution of this state and department rules. School districts shall apply for leases for educational purposes on forms prepared and furnished by the department, and an authorized agent of the governing board of the school district shall sign and swear to the application. A school district shall not use lands leased to it under this section except for public education purposes.

B. The department shall develop procedures to give priority to the procedures used for school districts to lease state lands for public education purposes. The department shall develop procedures to simplify the procedures used for school districts to lease state lands for public education purposes. The procedures shall specify that any leases entered into and any improvements made to properties leased pursuant to this section using state monies shall comply with the requirements of title 41, chapter 56.

C. The department shall develop procedures to give priority to the procedures used for school districts to purchase state lands for public education purposes. The department shall develop procedures to simplify the procedures used for school districts to purchase state lands for public education purposes. The procedures shall specify that any purchase of school lands by school districts using state monies shall comply with the requirements of title 41, chapter 56.

D. Any monies received by the department from the lease of state public school land for public education purposes pursuant to this section shall be transferred for deposit in the new school facilities fund established by section 41-5741.

E. For the purposes of this section, a school district shall be considered to have abandoned a lease when leased property and any improvements are no longer being used for public education purposes.

Article 3 Sale of State Lands

§ 37-231 State lands subject to sale; rights reserved in lands sold; state lands not subject to sale; development agreements

A. All state lands, except as otherwise provided for in this title, including all improvements made or placed on or connected with state lands, shall be subject to appraisal and sale as provided in this title.

B. Any person over eighteen years of age is entitled to purchase any of the state lands.

C. All sales, grants, deeds or patents to any state lands sold between July 9, 1954 and March 18, 1968 shall be subject to and shall contain a reservation to the state of an undivided one-sixteenth of all oil, gases and other hydrocarbon substances, coal or stone, metals, minerals, fossils and fertilizer of every name and description, together with all uranium, all thorium, or any other material which is or may be determined by the laws of the state or the United States or decisions of courts to be peculiarly essential to the production of fissionable materials, whether or not of commercial value, subject to the following:

1. For the purpose of promoting the sale of state lands and the more active cooperation of the owner of the soil, and to facilitate the development of its mineral resources, the state constitutes the purchaser of the land its agent for the purposes specified in this section, and in consideration hereof, relinquishes to and vests in the purchaser of the state land an undivided fifteen-sixteenths of all oil, gas and the value thereof which may be upon or within any state land purchased after July 9, 1954 and before March 18, 1968.

2. The purchaser of the soil may sell or lease to any person, firm or corporation the oil and gas and other minerals which may be on or in the land, upon terms and conditions the purchaser and the owner deem best, subject to the provisions and reservations of this section, but the lessee or purchaser shall pay to the state an undivided one-sixteenth of the mineral produced or the value of the mineral produced at the well or mine as determined by the state land department.

3. Upon discovery of oil and gas in paying quantities on land adjoining state lands purchased under the authority of this section, the purchaser or the purchaser's lessee shall drill and produce all wells necessary to protect the land so purchased from drainage by wells on lands in which the state has no royalty interest, or has a lesser royalty interest. If the purchaser or the purchaser's lessee fails to protect against such drainage, the state, acting through the state land department, may, three months after demand therefor in writing by the state land department to such purchaser and the purchaser's lessee, enter upon such lands and drill all wells necessary to protect the state against such drainage.

4. The interest reserved by the state in any state lands sold may be committed to a drilling unit or cooperative or unit plans of development and operation of oil and gas pools with the United States, its agencies and its and their lessees and permittees, and with private owners and persons holding oil and gas leases on private lands or on state lands. The state land department may, insofar as the interest of the state may be affected thereby, join in and consent to any such plan on behalf of the state. Such agreements shall provide for the equitable division on an agreed basis of the oil and gas produced from the unit, but no such agreement shall relieve any operator from the obligation to develop reasonably the lands and leases as a whole committed thereto. The royalties to which the state is entitled on production from land purchased under this section shall be computed only on that part of the production allocated to such tract. When the agreements made under this section provide for the return of gas to a formation underlying the unit, they may provide that no royalties are required to be paid on the gas so returned.

D. State lands known to contain oil, gases and other hydrocarbon substances, geothermal resources, coal or stone, metals, minerals, fossils and fertilizer of every name and description, in paying quantities, or uranium, thorium or any other material which is or may be determined by the laws of the state the United States or decisions of court to be peculiarly essential to the production of fissionable materials, whether or not of commercial value, and state lands adjoining lands upon which there are producing oil, gas or geothermal wells or adjoining lands known to contain any of such substances in paying quantities, or uranium, thorium or any other material peculiarly essential to the production of fissionable materials, whether or not of commercial value, shall not be sold. The prohibition against sale shall not operate to prevent the sale of lands known to contain, in paying quantities, common variety minerals as defined in section 27-271 or to prevent the sale of lands where the state does not own such substances, minerals or metals in the lands sought to be sold. The provisions of this subsection shall not prohibit the sale of such lands located within the exterior boundaries of an incorporated city or town, in which case the commissioner may offer the land for sale, provided the land shall be used solely for a public purpose. Such land shall revert to the state if it is used other than for a public purpose.

E. Notwithstanding the provisions of subsection C of this section, all state lands sold after March 18, 1968 shall be sold with the reservation that all oil, gas, other hydrocarbon substances, helium or other substances of a gaseous nature, geothermal resources, coal, metals, minerals, fossils, fertilizer of every name and description, together with all uranium, all thorium or any other material which is or may be determined by the laws of the United States or of this state, or decisions of court, to be peculiarly essential to the production of fissionable materials, whether or not of commercial value, and the exclusive right thereto, on, in, or under such land, shall be and remain and be reserved in and retained by the state, regardless of any sale under this section and the issuance of any certificate of purchase to any purchaser of state lands pursuant to this section, provided, that the reservation shall not include common variety minerals as defined in section 27-271, subject to the following:

1. The state land department shall adopt rules providing for the protection of the patentee or contract purchaser of state lands, or their successors in interest, and the state of Arizona, against damage to the lands, livestock, water, crops, or other tangible improvements on lands held by such patentee or contract purchaser, and suffered by reason of the use or occupation of such lands by lessees or permittees engaged in mining and oil, gas and geothermal resource exploration and development under leases or permits executed by the department. The state land department may, at any time, require each of its lessees or permittees to execute a bond in a reasonable principal amount conditioned upon payment for all such damages.

2. The mineral rights reserved to the state in the lands sold shall be closed to entry and location as a mineral claim or claims, but the department may issue, upon application, mineral exploration permits embracing the reserved mineral rights when such issuance is deemed in the best interest of the state, provided that the surface owner or owners shall have the first right of refusal to acquire such mineral exploration permits.

§ 37-232 Application to purchase state lands or for reimbursement for improvements; deposit

A. A person desiring to purchase state lands, or the lessee of any leased school or university land entitled to reimbursement for improvements thereon, may make a verified written application to the state land department to purchase the land.

B. In all cases, the application shall contain the name, age and residence of the applicant and a description of the land sought to be purchased. The application shall also contain the following information, as applicable:

1. If a lessee of school or university lands is the applicant, the application shall contain the date the lease of the land was issued to him.

2. If the applicant has or claims the right of possession by instrument in writing from a former lessee, the application shall contain the name of his assignor or grantor, the date of the original lease and the date of the assignment, and he shall attach to his application the original instrument of assignment, or if lost, furnish proof of loss.

3. If the applicant claims by judgment of a court or by operation of law, he shall attach to the application a certified copy of the instrument giving him such right.

4. If the application is by one claiming a right to reimbursement for improvements placed on leased school or university lands, he shall set forth in the application a list of improvements made upon the land.

C. The department shall require an applicant to pay a deposit before beginning to process an application to purchase state trust lands if the applicant:

1. Has requested that a property be reappraised or advertised, or both, within two years of the most recent public auction of that same property.

2. Has previously held title to that same property under a certificate of purchase.

3. Is known to be a second time applicant on the same property that was previously offered at public auction.

D. If the applicant is subject to a deposit pursuant to subsection C, the department shall place the deposit in a noninterest bearing account and the deposit shall be calculated on a percentage of the estimated value of the property. Monies must be deposited at the time of filing an application or at a time determined by the commissioner. If the applicant is not the successful bidder at public auction, the department shall refund the deposit to the applicant. If the applicant is the successful bidder, the department shall apply the deposit to the purchase price at auction. If there are no bids at the time of the auction, the department shall transfer the deposit made by the applicant to the appropriate trust beneficiary.

§ 37-233 Sale of state lands; restriction on sale of timber land; expense of sale

A. On receiving an application, or on the commissioner's initiative, the state land department, under the rules of the department, may cause state lands to be sold if the sale of them is not prohibited by law.

B. Land containing timber of a value which in the opinion of the commissioner should be sold separately from the land shall not be subject to sale until after the timber is sold.

C. When an application is filed with the department for selection or sale of land under the laws of this state, and the department determines that the benefit to be derived from the selection or sale is less than the expense involved, the commissioner may accept from the applicant an amount of money sufficient to pay the expense incidental to the selection or sale. If the applicant fails to secure a lease after selection of land, or fails to purchase land after bidding for it, the successful lessee or purchaser shall reimburse the original applicant for all funds so advanced.

§ 37-234 Sale of agricultural lands without application; limitation on sales of agricultural lands

The state land department may sell agricultural land without application. Sales of agricultural land with or without application shall not exceed two hundred thousand acres in any one year. No more than three hundred twenty acres of a section shall be sold in any one year.

§ 37-235 Subdivision of state lands for sale; size and price limitations

A. If any one lessee holds more than one hundred sixty acres of state lands susceptible of irrigation, or when the state land department determines that it is desirable that the land held under one lease be subdivided and sold in separate tracts, there shall be a separate appraisal made of such portions of the entire holdings under the lease together with the improvements thereon in such tracts, and the tracts and improvements thereon shall be separately described in the advertisement of sale and shall be separately sold.

B. The department may subdivide any state land into small parcels not larger than ten acres each, or into town or city lots, record a map thereof in the county where the lands are located, and appraise and sell the lands in the manner provided in this article. A parcel of such land shall not be sold for less than ten dollars per acre and no town or city lot for less than ten dollars each, and for not less than the appraised value.

§ 37-236 Order by department of sale of lands; sale at auction; electronic means; cancellation of sale; appeal; exception; department immunity

A. On completion of the appraisal, if the department determines that the interests of this state will not be prejudiced by sale of the land, or when application for purchase was made by the lessee of agricultural land entitled to compensation for improvements on the land appraised, within sixty days after the time for taking an appeal expires and no appeal is taken, or if an appeal is taken and the decision is against appellant, within sixty days after the decision is received, the department shall order the sale of the lands to the highest and best bidder at public auction held at the county seat of the county in which the land or the major portion of the land is located, and the department shall give notice of the sale by advertisement.

B. Notwithstanding any other law, the department may accept bids offered through electronic means during a public auction. If the department accepts bids offered through electronic means, the department is not liable for either:

1. The failure of a person's electronic means that prevents the person from participating in the auction.

2. The failure of the electronic means the department operates that is caused by an act of god or of nature, a superior or overpowering force or an event or effect that cannot be reasonably anticipated or controlled during or directly preceding the public auction that prevents a person from participating in the public auction.

C. If the commissioner receives information that indicates a change in the circumstances regarding the benefits to the trust but before the acceptance of a final bid at the public auction, the commissioner may cancel the sale proceedings.

D. A person adversely affected by a decision to terminate a sale pursuant to subsection C of this section may appeal such decision to the board of appeals pursuant to section 37-215, except a person may not file an appeal on the basis of an electronic means failure for which the department is not liable as prescribed in subsection B of this section.

§ 37-236.01 Sale of lands suitable for conservation purposes and other purposes at single auction

The department may offer for sale at a single auction trust land that has been classified as suitable for conservation purposes pursuant to article 4.2 of this chapter and land to be used for other purposes.

§ 37-237 Notice required for sale of lands or lands and improvements; publication; electronic means

Notice of sales of state lands shall be by advertisement, stating the time, place and terms of the sale and a full description of the land. The notice shall be published once each week for not less than ten successive weeks in a newspaper of general circulation published regularly at the state capital, and in a newspaper of like circulation regularly published nearest the location of the lands to be sold. If the notice is for the sale of lands and improvements, the advertisement shall also state the appraised value of the improvements, the name of the owner thereof and the terms on which compensation therefor shall be made. If the department accepts bids through electronic means, the department shall include in the notice a link or other instructions to access the electronic means through which a person can offer bids during the public auction.

§ 37-238 Procedure for sale; report of sale; posting; rules

A. A representative of the state land department shall attend at the time and place fixed for the sale and proceed by first announcing information relevant to the sale sufficient, in the representative's judgment, to begin the bidding process, then calling for bids and selling the lands for the highest and best bid.

B. The department shall adopt rules to prescribe the procedure, method and means for the sale of state lands pursuant to this chapter, including rules for the following:

1. The sale of state lands through electronic means.

2. A requirement that any location where state lands are auctioned online includes internet access.

3. A method for persons to prove the person has sufficient monies to bid for a parcel before a public auction.

4. Reasonable qualifications and procedures to ensure a person is legally eligible to bid.

C. The department shall prepare a written report of the sale and post the report on the department's website.

D. The sale may be adjourned from day to day, or the department may dissolve the sale and readvertise the lands.

§ 37-239 Participation contracts; planning and disposition proposals

A. The commissioner may enter into participation contracts and may charge a fee to an applicant to retain one or more consultants to assist in negotiating or preparing a participation contract. If the applicant is not the successful bidder, the commissioner shall refund the fee.

B. Before recommending any participation contract to the board of appeals, the commissioner shall consider and report on:

1. The methodology for determining any reimbursable infrastructure costs.

2. An analysis of the state trust revenue to be derived from the proposed participation contract.

3. The historical trends in land values in the area by types of proposed land uses.

4. An analysis of the financial feasibility of the planned development's proposed build-out schedule.

5. An evaluation of the potential economic risks and benefits to the trust arising from the participation contract.

6. An analysis of the economic and financial impact, and other factors determined by the commissioner, regarding alternative dispositions or no disposition of the lands.

C. Each participation contract shall:

1. Provide that subsequent sales or leases of state land that are subject to a participation contract shall be based on the criteria and the phasing and disposition plan included in the participation contract and the formula for determining the amount of revenue to the trust as a result of the subsequent sale or lease.

2. Prescribe rights and remedies in the case of default including rights to cure, forfeiture and other appropriate remedies.

D. This state's share of the revenues from the sale of land under a participation contract shall be deposited, pursuant to sections 35-146 and 35-147, in the appropriate perpetual fund.

E. A participation contract may be offered on lands that do not have a development plan approved by the commissioner or on land that may require the successful bidder to further plan and zone property after the auction. Before auctioning a contract requiring planning and zoning, the commissioner may solicit planning and disposition proposals, through advertisement for at least five consecutive days in a newspaper of general circulation in the county in which the lands are located, or if there is no daily newspaper of general circulation in that county, the advertisement shall be published as many times within a thirty-day period as the newspaper is published but not more than five times. The commissioner may require information regarding the projected planning and zoning, the estimated costs of the planning and zoning and the financial feasibility of the proposal. The proposals shall also contain proposed participation payments. The commissioner may provide that some of the information that is contained in the proposals will remain confidential, if the information is proprietary, until the commissioner recommends a contract to the board of appeals. After the proposals are received, the commissioner may conduct preauction conferences regarding the proposals. The commissioner may then auction a participation contract that, at the commissioner's option, may incorporate information that was acquired through the proposal process. A participation contract that is entered into pursuant to this subsection shall:

1. Require the successful bidder to pay a nonrefundable down payment of at least two and one-half per cent of the minimum bid for the property, plus the required fees prescribed pursuant to section 37-107 and, if the successful bidder did not pay the consultant fee pursuant to subsection A of this section, any fee charged pursuant to subsection A of this section, by cashier's check at the time of the auction. The down payment does not include participation payments.

2. Require an additional payment to be made within thirty days if the amount bid for the land exceeds the minimum bid, so that the total down payment, including the down payment paid on the date of the sale, will equal the required percentage down payment of the total amount bid. The additional payment does not include participation payments.

3. Require the successful bidder to post within thirty days after the auction a surety bond or another form of collateral that the commissioner considers to be sufficient to cover the costs of the required planning and zoning.

4. Provide for the forfeiture of the contract and any accompanying certificate of purchase or lease if the successful bidder fails to provide the required collateral.

5. Describe the land to be planned and zoned, which may include land that is retained by the department and not auctioned with the contract.

6. Contain guidelines for expected planning and zoning and time frames for the planning and zoning consistent with the guidelines.

7. Provide for the forfeiture of the contract and any accompanying certificate of purchase or lease if the successful bidder fails to accomplish the planning and zoning within the prescribed time, unless extended in writing by the commissioner based on good cause shown.

8. Require at least ten per cent of the total purchase price to be paid by the time the planning and zoning are completed, unless extended in writing by the commissioner based on good cause shown.

9. Provide for absolute approval authority by the commissioner of any planning and zoning actions.

10. Deny the successful bidder the right to physically develop the property, including grading or leveling, until at least ten per cent of the purchase price has been paid.

11. Deny the issuance of partial patents for the property until at least ten per cent of the purchase price has been paid and the requirements of section 37-251 have been met.

12. Contain such other terms that the commissioner considers to be necessary or appropriate.

F. After it is accepted by the commissioner, a planning and zoning proposal submitted to the local governing body by the successful bidder shall be administered as a state general plan or development plan as appropriate, according to the procedures described in article 5.1 of this chapter.

§ 37-240 Limitations on amount of land one person may purchase

A. No person may purchase more than six hundred forty acres of grazing land, or more than one hundred sixty acres of agricultural land.

B. No sales, leases or subleases of state lands shall be made to corporations or associations not qualified to transact business in the state.

§ 37-241 Terms of sale of state land; payment; interest rate

A. The terms of sale of state land are as follows:

1. At least ten percent, but not more than twenty-five percent, of the appraised value, as stated in the auction notice, which shall be applied to the principal and associated rights-of-way, together with the required fees prescribed pursuant to section 37-107, shall be paid by cashier's check or any other form of payment approved by the commissioner on announcement of the successful bidder.

2. If the amount bid for the land exceeds the appraised value, further payment shall be made within thirty days so that the total amount paid, including the amount paid on the date of sale, equals the percentage of the bid, as stated in the auction notice, which shall be allocated to the principal and associated rights-of-way, together with the required fees prescribed under section 37-107.

B. On payment of the amounts provided in subsection A of this section, on compliance by the purchaser with the requirements of this article and on payment of the fees under section 37-107, a certificate of purchase shall issue as provided in section 37-244. On full payment for the entire tract of land sold within thirty days after the auction, the department shall issue a patent as provided in section 37-251.

C. If the purchaser fails to complete the payment of the percentage of the bid stated in the auction notice, together with the fees required pursuant to section 37-107, or to enter into a contract of sale within the time provided in the certificate of purchase offered by the department:

1. The purchaser forfeits all amounts paid, including:

(a) All payments made on the purchase price, which shall be deemed to be rental for the land.

(b) All amounts paid under section 37-107.

2. The commissioner may declare that the bid placed before the final bid accepted is the highest bid and that bidder has five business days after notification by the department to pay by cashier's check or any other form of payment approved by the commissioner all amounts due under this section and section 37-107.

D. The balance of the purchase price is payable as follows:

1. The commissioner shall establish before the notice of sale the length of the term over which the balance shall be paid and whether a variable or fixed interest rate is appropriate or whether the entire balance without interest is due and payable within thirty days after the auction. This determination shall be based on the nature of the land being sold and general market conditions in effect at the time.

2. After establishing the length of the term and whether a fixed or variable rate is appropriate, the commissioner shall notify the state treasurer to establish the interest rate after consideration of local prevailing prime interest rates and mortgage rates and the maximum amount of interest set by statute by this state, if any.

3. If a variable rate is established, the interest rate charged to a purchaser may vary from year to year. The department shall annually notify each purchaser of the interest rate specified by the state treasurer to be paid by the purchaser for the following year and the total amount of interest payable the following year with the purchaser's annual payment.

E. The commissioner shall establish before the notice of sale the length of the term over which the balance shall be paid. The term shall not exceed twenty-five years.

F. The length of term and interest rate and whether the rate is variable or fixed shall be considered terms of the sale to be included in the notice required by section 37-237.

G. The purchaser may discharge the entire debt at any time and be entitled to a patent for the land if the purchaser pays the entire purchase price, together with the applicable fees, and demonstrates that all terms and conditions of the certificate of purchase have been satisfied.

§ 37-243 Payment of rent in arrears; payment for use of land

If the owner of improvements upon leased school or university lands sold as provided by this article is the purchaser of the lands and is in arrears for rent due under a permit or lease, or if he has failed to take out a permit or to pay rent, then before a certificate of purchase is issued to him he shall, in addition to the payments required by this article, pay to the department all rent for which he is in arrears, and if no rent has been stipulated, he shall be charged for the use and occupation of the land. Interest at the rate of five per cent per annum shall be charged on all such amounts, and added to the amount to be paid. A like charge shall be made against the occupant, if some other party is the purchaser of the land and improvements.

§ 37-244 Certificate of purchase; conditions

A. Upon compliance by a purchaser of state lands with the requirements of this article, the department shall make and deliver to the purchaser a certificate of purchase, which shall set forth:

1. The name of the purchaser.

2. A description of the entire tract of land purchased.

3. The amount paid.

4. The amount paid for improvements, if any.

5. The amount remaining due.

6. The date when each of the deferred payments falls due, the amount of each deferred payment and the rate of interest on the first deferred payment.

7. An agreement by the purchaser that he will pay taxes, water assessments and other charges which may be assessed against the land.

B. Each certificate of purchase shall be signed by the commissioner or his deputy and by the purchaser, and shall contain the following covenants in addition to any others imposed pursuant to section 37-132:

1. That the purchaser will not permit any loss or commit any waste to or upon the lands.

2. That any right to the use of water appurtenant to the lands shall be maintained to prevent the forfeiture or abandonment of the right.

3. That all taxes levied against the land and all construction and maintenance charges of a United States reclamation project from which the lands may receive water will be promptly paid.

4. That all things will be done to insure the acquisition and maintenance of the rights and the use of the water, except if the successful irrigation of lands susceptible to irrigation from works constructed or controlled by the United States government is not dependent upon the irrigation works it shall not be necessary to acquire and maintain water rights on such lands.

C. After sale of state land and issuance of a certificate of purchase, the department shall not issue a certificate of purchase that covers only a part of the entire tract of land sold for the purposes of obtaining a patent to part of the land.

§ 37-245 Rights conferred by certificate of purchase; recording of certificate

A. The certificate of purchase shall entitle the purchaser and his heirs, or in case of an assignment filed with and approved by the department, the assigns of the purchaser, to possession of the lands therein described, to maintain actions for injuries thereto or to recover possession thereof, unless the certificate has become void by forfeiture.

B. The certificate may be recorded as deeds of conveyance are recorded.

§ 37-246 Sale of natural products of lands by purchaser under certificate of purchase; disposition of proceeds; violation; classification

A. If a purchaser of state land under a certificate of purchase sells or contracts to sell directly or indirectly any sand, gravel, stone or other natural product from the land described in the certificate, he shall file with the department within ten days after the sale or making the contract, a statement under oath on a form furnished by the department, of the kind and quantity of natural product sold, the terms of the sale, and the amount received or to be received therefor.

B. Upon receipt of any money from a sale or contract described in subsection A, the holder of the certificate shall promptly pay the money to the department. The money shall be applied by the department first to payment of the interest accrued under the certificate, and the remainder, if any, to payment of the principal amount owing on the land described in the certificate. If the payment is sufficient to discharge the total debt owing under the certificate, with accrued interest thereon, the department shall issue a patent to the purchaser as provided in this article.

C. The department shall cancel the certificate of purchase of a purchaser of state land who fails or refuses to make or knowingly makes any false statement in any statement required by subsection A, or who fails or refuses to pay to the department any money required to be paid by subsection B. The land described in the certificate, together with all improvements thereon, shall revert to the state, and all amounts theretofore paid for the land by the purchaser shall be forfeited to the state.

D. A person who violates a provision of this section is guilty of a class 2 misdemeanor.

§ 37-247 Purchaser's default; forfeiture and cancellation of certificate of purchase; extension of time for payments

A. When a purchaser defaults in a payment of principal or interest, as provided in the certificate of purchase, or fails to comply with a condition, covenant or requirement thereof, the certificate shall be declared subject to forfeiture. Within sixty days after default or failure the department shall give notice of the default or failure by certified mail to the purchaser's last known address of record in the department.

B. If the payment is not made, or the condition, covenant or requirement is not complied with, within sixty days from the date of notice, the certificate of purchase and all rights of the purchaser to the land and improvements thereon may be canceled. In the event of cancellation, the commissioner shall make a formal order canceling the certificate of purchase and a copy of the order shall be mailed to the last known post-office address of the holder of the certificate of purchase. If no appeal is made within thirty days from the date a copy of the order is mailed to the holder of the certificate of purchase, the order shall become final and the certificate of purchase shall be canceled on the records of the department, and the improvements and all payments made on the purchase price deposited in the respective permanent fund under article 13 of this chapter shall be deemed rental for the land.

C. On the purchaser's written request, the commissioner may extend the time for payment of the amount delinquent for a period of not more than five years on terms that the commissioner considers to be appropriate as follows:

1. The commissioner may grant an extension in response to a request made within sixty days before the due date of the payment. An extension under this paragraph begins on the date the payment was due and continues for the period stated in a written notice to the purchaser.

2. The commissioner may grant an extension in response to a request made within sixty days after the date of the default or failure notice provided in subsection A. An extension under this paragraph begins on the date of the notice and continues for the period stated in a written notice to the purchaser.

3. If the department does not act on a request for extension within thirty days after receiving the request, the request is considered to be denied. If the purchaser fails during the period of the extension to complete all delinquent payments, including principal and interest, the certificate of purchase is subject to default and cancellation pursuant to subsections A and B, except that if the last day of the last period of extension expires on the last day of the five-year period and all delinquent payments have not been paid by the last day of the five-year period, the certificate of purchase shall automatically be canceled on the last day of the five-year period and noted on the records of the department.

D. If a payment of principal or interest is made after the due date, payments shall be made according to the extension granted by the commissioner under subsection C. If no extension was granted, delinquent interest shall be added at a rate set by the state treasurer.

§ 37-249 Actions to rescind sales

A. The commissioner or any other person may rescind a sale based on fraud only by filing an action in the superior court. An action based on fraud shall be filed within three years after the date of the auction of that property. If the court voids the sale pursuant to this subsection because the buyer has committed fraud, the buyer at that sale shall not receive a refund of the monies paid for the fraudulent sale.

B. A person may rescind a sale based on failure to comply with the enabling act, the Constitution of Arizona or the statutes only by filing an action in the superior court. An action based on the failure to comply with the enabling act, the Constitution of Arizona or the statutes shall be filed within two years after the date of the auction of that property, unless a shorter period of limitations applies. If the court voids the sale pursuant to this subsection, the buyer at that sale shall reconvey the property to the state land department. The department shall refund the money paid thereon to the buyer at that sale, and make compensation to the buyer for the actual value of the improvements placed on the land by the purchaser. The value shall be determined by the department and paid from the general fund.

C. A person who files suit pursuant to this section shall record a notice of lis pendens in the county or counties in which the property is located. Suit shall not proceed to trial unless the court receives a copy of the recorded lis pendens.

D. This section does not apply to actions to protest auctions pursuant to section 37-301.

§ 37-250 Replacement of lost or destroyed certificate of purchase

When a certificate of purchase is lost, destroyed or wrongfully withheld by any person from the owner thereof, the state land department may receive evidence of the loss, destruction or wrongful withholding, and issue a new certificate of purchase, or patent, to the person entitled thereto.

§ 37-251 Issuance of patents for state lands

A. On filing the certificate of purchase, together with evidence of full payment of principal and interest, for the entire tract of land sold, and evidence that all terms and conditions of the certificate of purchase have been satisfied, the department shall issue to the purchaser a patent under the seal of this state, signed by the governor and countersigned by the secretary of state.

B. On application by the purchaser, a patent for less than the entire tract may be issued to the purchaser if the commissioner finds that it is in the best interest of the applicable trust, subject to the following:

1. The parcel to be patented may consist of one or more pieces of land, described either by metes and bounds or by legal subdivision.

2. Before any parcel less than the entire tract is patented, the department shall determine that the remaining lands are of greater value than the unpaid balance of the certificate of purchase and that the remaining lands have development potential independent of the acreage that is being patented. Before patenting, the commissioner shall require to be paid an amount, on the lands to be patented, in excess of the purchase price per acre of the entire tract until the total price of the entire tract has been paid. In establishing the amount to be paid for the partial patent, the commissioner shall take into account the amount of the down payment made on the entire tract. This paragraph does not affect certificates of purchase issued before September 30, 1988.

3. When paid, the partial purchase price shall be credited on the total purchase price stated in the certificate of purchase. The department may issue a supplement to the certificate of purchase deleting the land patented and reducing the amount of each of the remaining annual installments to that amount which, when all installments are paid in full, will discharge the entire unpaid balance due on the original certificate of purchase.

C. Any land patented under this section is subject to existing valid rights-of-way.

D. If the purchaser has died and the land described has been sold and confirmed by order of court, the patent shall be issued to the purchaser to whom confirmation of sale was made. If the estate of the deceased person is distributed by order of the court, the patent shall be issued to the heirs of the deceased person, or to the person to whom the lands are distributed. Patents issued to a deceased person shall inure to the benefit of the heirs or assigns of the deceased person.

E. If an assignment of the certificate of purchase has been filed with and approved by the department, the patent shall be issued to the assignee, and if proper evidence of a transfer of the certificate by operation of law is filed with the department, the patent shall be issued to the transferee.

F. A record of all patents issued shall be kept in the records of the department.

§ 37-252 Taxation of lands sold

A. All lands sold under the provisions of this article shall not be subject to taxation until the department issues a patent for such lands pursuant to section 37-251 or until seven years after the date of auction, whichever occurs first.

B. If a patent for such lands pursuant to section 37-251 has not been issued within seven years after the department issued a certificate of purchase for such lands under section 37-244, all lands sold under the provisions of this article shall be taxed, and the taxes assessed on those lands shall be collected and enforced as against other lands. The department shall not issue a patent under section 37-251, subsection A or B until all taxes that are due on the lands have been paid. On payment of taxes on lands held under certificate of purchase, the county treasurer to whom the taxes are paid shall immediately furnish to the state land department a statement of the taxes paid. The statement shall be made on forms supplied for that purpose by the department.

§ 37-253 Report to assessor

As soon as possible after a sale of state land and when a patent is issued, the state land department shall transmit to the assessor of the county in which the land is located a report of the sale and patent setting forth separately a description thereof, the name of the purchaser, the amount paid for the land and the improvements thereon.

§ 37-254 Cancellation of tax assessment on lands reverting to state

If any lands sold revert to the state for any cause, the state land department shall at once notify the assessor and tax collector of the county in which the land is located, and upon receipt of the notice, the assessor shall cancel any assessment of the land, and the tax collector, the board of supervisors or other county official shall charge off all taxes levied against the land.

§ 37-255 Sale of or mortgage or other lien on interest of lessee or holder of certificate of purchase

A. The interest of the holder of any certificate of purchase of state land, or any lease or permit on state land, shall be subject to sale, mortgage or other lien to the same extent as patented land, without prejudice to the state. A contract of sale, mortgage or other lien affecting any certificate of purchase, lease or permit on state land shall not become effective unless a copy of the document is filed with the state land department. When filed, no assignment of the certificate of purchase, lease or permit affected shall be made without notice to and the consent of all parties.

B. Upon foreclosure of a contract of sale, mortgage or other lien filed with the department as provided in subsection A of this section, the department shall assign the instrument in question to the party entitled to the instrument, if all taxes, rent and assessment payments are current.

C. If a cancellation or assignment order is issued pursuant to section 37-247, 37-281.04 or 37-289, the cancellation or assignment order shall not become final until any foreclosure action by a party registered with the department as a mortgagee or other lienholder of the purchaser's interest or the lessee's interest is finally resolved, if the mortgagee or lienholder does both of the following:

1. Within thirty days of the date of issuance of a notice of default, files written notice with the department of its intent to proceed with a foreclosure action.

2. Within one hundred twenty days of the date of issuance of a notice of default, has commenced either a foreclosure action in court or a nonjudicial foreclosure of a deed of trust, and has provided the department with a certified copy of the complaint or other document that officially commences the foreclosure process, and thereafter prosecutes the foreclosure with reasonable diligence.

D. If a default notice has been sent to a purchaser pursuant to section 37-247, subsection A or to a lessee pursuant to section 37-289, subsection A, and the purchaser or lessee thereafter applies to assign the certificate of purchase or lease to a mortgagee or lienholder registered with the department, before the date a cancellation or assignment order becomes final and conclusive, the department shall approve the assignment if all taxes, purchase payments, rent and assessment payments are current and subject to the written consent of any other mortgagees or lienholders of record.

E. On proof that a lessee or purchaser has rejected a lease or certificate of purchase in a bankruptcy proceeding, the department shall issue a lease or certificate of purchase to the registered mortgagee or other lienholder in order of priority on application by the mortgagee or other lienholder within thirty days after the rejection if all taxes, purchase payments, rent and assessment payments are current. Any lease or certificate of purchase that is issued pursuant to this subsection shall be for the remaining term and on the same conditions and priority as the rejected lease or certificate of purchase.

§ 37-256 Application of provisions; east half of dry bed of Colorado river

The provisions of this section and sections 37-257, 37-258 and 37-259 shall apply to the following lands:

1. Lands owned by the state of Arizona which lands are located in the Palo Verde irrigation district in Riverside county, California, within three miles, measured in a true west direction, of any portion of the Colorado river between river points 13.00 and 13.19 as defined in the "interstate compact defining the boundary between the states of Arizona and California," (Laws 1963, chapter 77) and which lands, in the opinion of the state land commissioner, may have constituted the east half of a now dry bed of the Colorado river.

2. Lands owned by the state of Arizona other than lands referred to in paragraph 1 of this section, which other lands are located within three miles, measured in a true east or true west direction of any portion of the Colorado river as located in the interstate compact defining the boundary between the states of Arizona and California (Laws 1963, chapter 77) and which lands, in the opinion of the state land commissioner, may have constituted the east half of a now dry bed of the Colorado river, at such time that the attorney general of the state of Arizona is satisfied that an agency of the state of California is empowered to convey title to any west half of a now dry bed of the Colorado river which may be located within three miles measured in a true east direction of any portion of the Colorado river as above located.

§ 37-257 Application for sale

A. Any person who shall satisfy the state land commissioner that the person, with predecessors in interest, has held title to a tract of land, which is subject to sections 37-256 through 37-259, under claim or color of title for more than ten years and for such ten-year period have paid all real property taxes levied on the land, may file an application with the state land commissioner requesting the commissioner to offer for sale the state's interest, if any it has, to the rights the state of Arizona may own to any dry riverbed on any part of the land described in the application.

B. Upon receipt of the application, if the state land commissioner determines that the interests of the state will not be prejudiced by the sale of the land, the commissioner shall:

1. Determine the amount of state land which may be contained in any dry riverbed on the tract of land described in the application.

2. Cause an appraisal to be made based upon the amount of acreage so determined to be possible state land. The appraisal shall specify the value of the state's interest in the land at the date of appraisal exclusive of any increased value resulting from the development of or improvement of or on the land made by the applicant or the applicant's predecessors in interest and the appraisal shall specify the amount of increased value of the land resulting from such development or improvement. In determining the value of the state's interest in the land, the appraiser shall consider the likelihood of and costs to the state of the state's establishing title to the land.

§ 37-258 Sale of rights in dry riverbed

A. Upon receipt of the appraisal and when it is in the best interests of this state and of the trust, the commissioner may cause rights of the state in any dry riverbed on the land described in the application to be put up for sale to the highest bidder. This sale may include the state's interest in oil, gas, other hydrocarbon substances, helium or other substances of a gaseous nature, geothermal resources, coal, minerals, fossils and fertilizer of every name and description together with all uranium, thorium or other materials peculiarly essential to the production of fissionable materials.

B. The sale shall be held at the county seat of the county wherein the land was located immediately preceding the river movement which left the riverbed dry, and if such county cannot be determined by the commissioner, then the sale shall be held at the county seat of Maricopa county.

C. The sale is subject to all existing leases, covenants, conditions, restrictions, easements, encumbrances, rights and rights-of-way against the land described in the application. The state may sell its rights in an entire section in any one year. No sales shall be deemed to be agricultural land for purposes of section 37-234. At least ten per cent, but not more than twenty-five per cent, of the appraised value, as stated in the auction notice, which shall be applied to principal, together with the prescribed fee under section 37-107 shall be paid by cashier's check upon announcement of the successful bidder. The balance of the purchase price shall be paid by cashier's check within thirty days of the date of the sale and no interest shall be charged. In other respects, the sale shall be conducted as specified in this article. The minimum price at the sale shall be the value of Arizona's interest in the land as determined by the preceding appraisal, including the increased value resulting from the development or improvements made by the applicant and the applicant's predecessors in interest.

D. If the applicant is not the purchaser the applicant is entitled to receive from the proceeds of sale the amount of the increased value of the land, as determined by the appraisal, resulting from the development of or improvement of or on the land made by the applicant or the applicant's predecessors in interest. If the applicant is the purchaser the applicant is entitled to an offset against the purchase price in the amount of the increased value resulting from said developments and improvements. The payment for these improvements shall be made in the manner specified in sections 37-322 and 37-322.02, except that obtaining the prior approval of the state for making the development or improvement shall not be a prerequisite to the applicant's recovery of the increased value of the land resulting therefrom and that the payment for the improvements may not be on installments.

§ 37-258.01 Sale of development rights

The department may offer for sale at public auction all or part of the development rights and other similar interests in land if the remaining fee land still retains long-term income production potential.

§ 37-259 Application as offer to settle dispute

Any application under section 37-257 and any payments made to this state pursuant thereto shall be deemed an offer by the applicant to compromise and settle a dispute with this state, and no applicant by filing such application shall be deemed to be admitting that title to the land applied for is owned by this state, nor shall such application or any payments thereunder be admissible in evidence in any action at law or equity with respect to such land, nor shall such sale by this state be an admission by this state that it does not own the bed of the present location of the Colorado river or any other bed not specifically covered by such sale.

§ 37-260 Selling and administrative expenses

Any application and any payment made to this state pursuant to sections 37-257 and 37-258 shall be exempt from the provisions of section 37-107. If the commissioner determines that an appraisal is required on the improvements, the purchaser of the land shall pay the actual cost of such appraisal.

§ 37-261 Authority to auction reversion rights

A. If this state has held a right of reversion with respect to any land sold under this article for ten years without exercise or encumbrance, the commissioner may order the right of reversion to be appraised and offered for sale at public auction. The commissioner shall prescribe a minimum acceptable bid.

B. The purchaser shall agree in writing to indemnify and hold harmless this state, the department and the commissioner against all liability with respect to the land.

C. The commissioner shall deposit, pursuant to sections 35-146 and 35-147, the revenues from the sale in the appropriate fund under article 13 of this chapter.

Article 4 Lease of State Lands

§ 37-281 Lease of state lands for certain purposes without advertising; terms and conditions

A. All state lands are subject to lease as provided in this article for a term of not more than ten years for agricultural, commercial and homesite purposes, without advertising. The leases shall be granted according to the constitution, the law and the rules of the state land department.

B. No lease shall be granted as provided by this section without application. All applications for leases shall be made upon forms prepared and furnished by the department, shall be signed and sworn to by the applicant or his authorized agent or attorney and shall be filed with the department. In lieu of signing and swearing to the application before a notary public or other person authorized to take acknowledgments, the applicant may affix his signature to the application, accompanied by a certification, under penalty of perjury, that the information and statements made in the application are to the best of his knowledge and belief true, correct and complete, and the application shall be accepted as duly executed.

C. Any material false statement or concealment of facts made by an applicant, his authorized agent or his attorney in the application to lease, which, if known to the department, would have prevented issuance of the lease in the form or to the person issued, shall be grounds for cancellation of a lease issued upon such application.

D. No lessee shall use lands leased to him except for the purpose for which the lands are leased.

E. No lessee shall sublease lands leased to him without written permission of the state land department.

§ 37-281.01 Lease of state lands for grazing purposes; notice

A. All state lands are subject to lease as provided in this article for a term of not more than ten years for grazing purposes without public auction. In addition to the requirements of section 37-281, subsections B, C, D and E, the leases shall be granted according to the constitution and laws of this state and rules of the department.

B. The department shall give notice of the availability of expiring grazing leases on state lands by advertisement, published in December of each year, at least one year in advance of the expiration date of any grazing lease. The notice shall be published at least once in a newspaper of general circulation, indicating the number of leases expiring, the county or counties where each lease is located and the location of posting the notice where additional information may be obtained. The newspaper that prints the notice may also post the notice on an internet web site that aggregates legal notices of ten or more Arizona newspapers. The department shall post notice of expiring leases by lease number, abbreviated legal description of the lease area, carrying capacity, expiration date and application information in the following locations:

1. In each department office.

2. On the department's internet web site.

3. In the office or offices of the county board of supervisors where the land is located.

4. In United States bureau of land management offices in this state where posting is allowed.

§ 37-281.02 Leasing state lands for commercial purposes for more than ten years

A. All state lands are subject to lease as provided in this article for a term in excess of ten years, but not more than ninety-nine years, for commercial purposes to the highest and best bidder at public auction. The auction shall be conducted at the place, in the manner, and after the notice by publication provided for sales of such lands except as otherwise provided in this section. For commercial leases of state land more than three miles outside the boundaries of incorporated cities and towns having a population of ten thousand persons or less or more than five miles outside the boundaries of incorporated cities and towns having a population in excess of ten thousand persons, the department shall cooperate with the county or counties in which the land to be leased is located in considering the intended uses. The leases shall be granted in accordance with the Constitution of Arizona, state laws and the rules of the department.

B. If the department determines that leasing of the land is in the best interest of the state, the tract or tracts shall be offered for lease to the highest and best bidder.

C. Each offer for lease shall reserve the right in the department to reject any and all bids and to again offer the tract or tracts for lease if the bids received are not acceptable to the department.

D. Upon announcement of the successful bidder, the first year's annual rental shall be paid by cashier's check. The successful bidder shall also pay the cost of the publication and reasonable expenses of the sale, and such funds shall be subject to the provisions of section 37-107. If there are bids exceeding the minimum bid accepted at the auction, the successful bidder has until 5:00 p.m. of the fifth business day following the date of the auction to deposit a cashier's check with the department for the amount exceeding the minimum bid for the first year's rent. The failure to pay the first year's rent at the time of the auction or to pay the amount exceeding the minimum bid by 5:00 p.m. on the fifth business day after the auction results in forfeiture of the lease and all monies paid. In the event of forfeiture the commissioner may declare that the bid placed before the final bid accepted is the highest bid, and that bidder has five business days after notification by the department to pay by cashier's check all amounts due under this section and section 37-107.

E. Before acceptance of any bid for a lease under this section, the department shall establish to its satisfaction the responsibility of the bidder.

F. Each lease shall be for a term in excess of ten years, but not more than ninety-nine years, as determined by the department, and shall provide for an annual rental of not less than the appraised fair market rental value of the land. The department shall establish a rental adjustment formula by which the rental provided for in the lease is subject to adjustment after periods of time specified in the lease. A period of time shall not exceed five years. The department shall include a rental adjustment formula in each lease. The rental for the first five-year period and the rental adjustment formula for that lease shall be established by the department prior to the call for bids. The department shall publish in the call for bids the rental for the first period and the rental adjustment formula for that lease.

G. A lease issued under this section may include an amortization schedule to be used to determine the value of improvements when the lease is terminated.

H. All provisions of this title applicable to state lands and the lease thereof, not in conflict with the provisions of this section, shall apply to leasing and leases issued under this section.

I. The department shall require an applicant to pay a deposit before beginning to process an application to lease state trust lands if the applicant did not bid at an auction where the applicant initiated the process. The deposit shall be based on the approximate first year rental plus administrative expenses and shall be deposited in a noninterest bearing account. Monies must be deposited at the time of filing an application or at a time determined by the commissioner. If the applicant is not the successful bidder at public auction, the department shall refund the deposit to the applicant. If the applicant is the successful bidder, the department shall apply the deposit to the rental price at auction. If there are no bids at the time of the auction, the department shall transfer the deposit made by the applicant to the appropriate trust beneficiary.

§ 37-281.03 Leasing land along Colorado river from United States; subleasing requirements; limitations

A. The state land department may lease from the United States or its authorized agencies, for park, recreational and wildlife purposes, lands under the jurisdiction of the bureau of reclamation, which are located along the Colorado river embracing the area from Davis dam to the international line, for such terms and under such conditions as the United States or its agencies may provide.

B. The state land department may sublease lands leased to the department, as provided in subsection A, for park, recreational and wildlife purposes to the state parks board, the game and fish commission or to any political subdivision of the state.

C. The provisions of section 41-511.05, paragraph 3, restricting the creation of a state park or monument or additions thereto to one hundred sixty acres, shall not apply to any land leased or acquired from the state land department for park and recreational purposes which are under the jurisdiction of the bureau of reclamation on lands located along the Colorado river embracing the area from Davis dam to the international line.

D. The provisions of sections 37-281 and 37-281.02 shall not apply to sublease of lands leased to the state under the provisions of subsection A of this section.

E. The state parks board, the game and fish commission or a political subdivision of the state which leases land from the state land department as provided by this section may sublease such lands according to the terms of the lease executed between the state land department and the state parks board, the game and fish commission or the political subdivision of the state.

§ 37-281.04 Default of lease of state land; assignment to cities and towns

A. If a default of a lease of state land made pursuant to this article occurs during the first year of the lease agreement or within four years of the first anniversary date determined by the lease agreement, the lease may be assigned to a city or town by the commissioner pursuant to this section if the following conditions are met:

1. The state land is located either entirely within or adjacent to the city or town.

2. No portion of the state land is contained within any other city or town.

3. The city or town consents to be bound by all of the terms and conditions of the lease.

4. The commissioner determines that the assignment of the lease to the city or town is in the best interest of the state land trust.

B. If a notice of default has been sent to the lessee and the lessee's registered mortgagees or lienholders and the default has not been cured in accordance with the procedures and time periods in section 37-289, the commissioner, on written request of a city or town, may assign the lease to the city or town without the consent of the defaulting lessee if the city or town cures any outstanding default. An assignment made pursuant to this subsection is an alternative to cancellation of the lease as provided in section 37-289, subsection B. If the commissioner grants the written request of the city or town for assignment as provided in this subsection, the commissioner shall make a formal order assigning the lease to the city or town, and a copy of the order shall be mailed to the last known post office address of the defaulting lessee and the defaulting lessee's registered mortgagees and lienholders. The defaulting lessee shall be permitted to remove the defaulting lessee's improvements, if any, at any time within sixty days after the date of assignment.

C. The defaulting lessee and the defaulting lessee's registered mortgagees and lienholders may appeal an assignment order pursuant to title 12, chapter 7, article 6. If no appeal is made within the prescribed time or if no notice is filed with the department pursuant to section 37-255, subsection C, the order becomes final and the assignment shall be shown on the records of the department.

D. Nothing in this section authorizes a city, town, person or legal entity that has rights under this section to claim, represent, assert or imply any ownership interest or right of leasehold interest, present or future, in any negotiations with a state or federal agency without the consent of the private lessee before having been granted an assignment of a lease pursuant to subsection C of this section.

§ 37-282 Duty of lessees to cooperate with state land department in making classifications and appraisals

Lessees of state lands shall cooperate with the state land department in making classifications and appraisals. Lessees shall furnish information requested by the department pertaining to the use of the lands proposed by lessee and in connection with other property held by the lessee as part of a unit. Information furnished by lessee, except that pertaining to state lands, shall be confidential and shall not be subject to public inspection.

§ 37-282.01 Mass appraisals; notice; procedure; definitions

A. Before undertaking a mass appraisal pursuant to section 37-132, subsection A, paragraph 5, the commissioner shall:

1. Notify in writing all lessees, permittees and right-of-way grantees currently occupying state land for the use to which the mass appraisal would apply and solicit comments from the affected parties and any valuation information, including comparables, that the affected parties might voluntarily provide.

2. Notify in writing known industry, trade and professional organizations that typically represent occupants of state lands for the use to which the mass appraisal would apply and solicit comments from the organizations and any valuation information, including comparables, that the organizations might voluntarily provide.

3. Provide the affected parties and organizations ninety days to submit written comments and valuation information, including comparable data.

B. Valuation information, including comparable data, submitted to the department pursuant to subsection A of this section must include information typically used for valuation purposes. The commissioner shall consider all valuation information, including comparable data.

C. Industry, trade and professional organizations that do not receive notice pursuant to subsection A, paragraph 2 of this section and that wish to provide comments and valuation information, including comparable data, have ninety days from the date of the notice provided in subsection A of this section to identify themselves in writing to the department and provide comments and valuation information, including comparable data.

D. The commissioner shall base mass appraisals on valuation information including comparables that are consistent with the market for that land use in this state, to the extent that adequate valuation information, including comparable data, is available. The commissioner shall consider whether there are different markets for that land use within different areas of the state, including urban, suburban and rural, and require that these different markets are appropriately addressed in the mass appraisal.

E. In using valuation information, including comparable data, on lands in preparing a mass appraisal, the commissioner shall take into account, if applicable, the specific terms and conditions of leases, permits and right-of-way grants affecting the lands, including:

1. Any costs incurred by the occupier of the land to prepare the land for use, including acquisition of rights-of-way for access to the land and extension of utility services necessary to use the land.

2. Whether the occupier of the land may subsequently sublease, permit or license the land or improvements on the land to obtain third-party revenue and the extent to which the improvement being sublet, permitted or licensed is leased, permitted or licensed to the occupier of the land.

F. At least sixty days before the commissioner submits a mass appraisal to the board of appeals for approval, rejection or modification, the commissioner shall notify in writing all parties who were notified or provided comments and valuation information pursuant to subsection A or C of this section and shall make available on the department's website a copy of the mass appraisal to be acted on by the board of appeals. The commissioner shall provide a hard copy of the mass appraisal to any person who requests it pursuant to section 37-102, subsection F. The notice shall advise the recipients of their right to appear before the board of appeals regarding the mass appraisal.

G. The commissioner shall adjust the mass appraisal at any time if the commissioner determines that significant changes in market conditions or technology have occurred or that other changed conditions would materially affect the valuation of land uses subject to the mass appraisal. Before modifying a mass appraisal, the commissioner shall give written notice to holders of leases, permits and right-of-way grants affected by the mass appraisal and to the persons identified in subsection A of this section. The commissioner shall reappraise any mass appraisal that has not been adjusted in a ten-year period.

H. For the purposes of this section:

1. "Comparables" means similar transactions, within a relevant time period, between unrelated parties involving similar uses of similar property in which none of the differences, if any, between the transactions could materially affect the valuation or in which reasonably accurate adjustments may be made to eliminate the effect of the differences.

2. "Mass appraisal" means an appraisal that the commissioner proposes to use to set rental or fees for multiple applications from multiple persons for a specific use of state lands by lease, permit or right-of-way grant. Multiple applications for similar land uses in a defined geographic region that are appraised by a single appraiser shall not be considered a mass appraisal.

§ 37-283 Subleases by grazing lessee; limitation upon grazing use; sublease surcharge

A. A grazing lessee shall not sublease his lease or sell or lease pasturage to lands included in his lease, without written permission from the state land department. A grazing lessee, his sublessee or users under pasturage agreement shall not graze, without written permission of the department, in excess of the carrying capacity as previously determined by the department, upon state lands under lease or being used by such persons, within the exterior boundaries of any one ranch unit or units in the same general locality jointly operated. If permission is granted for such excess, the department shall assess and collect the rental for the excess on the rental basis provided for in this article.

B. In addition to the annual rental on grazing lands established pursuant to section 37-285, grazing subleases are subject to a surcharge that is equal to twenty-five per cent of the annual rental on grazing land, multiplied by the number of animal unit months to be grazed on the subleased state trust land. The surcharge shall be assessed only for that period of time the state trust land is subleased. The surcharge shall be paid to the department when the annual rental is due, or upon receiving department permission to sublease if the sublease is approved after the annual rental is due.

§ 37-284 Conflicting short-term lease applications; preference rights

A. A conflicting application for an existing lease for a term of not more than ten years shall be filed at least two hundred seventy days but not more than one year before the expiration date on the lease. The conflicting application must be accompanied by a list of nonremovable improvements on the leased lands on file with the department, including fences. The conflicting applicant must post a surety bond or other form of security in the amount of two thousand five hundred dollars or twenty per cent of the rental payments over the term of the current lease, whichever is greater. The department shall calculate the amount of the security within thirty days after receiving the conflicting application, and the conflicting applicant must post the security within thirty days after the department determines the amount. If the conflicting applicant is unsuccessful or withdraws the application, the department shall return the security to the applicant. If the conflicting applicant is successful, the security shall be applied against the value of the nonremovable improvements.

B. When the department receives a conflicting application, the department shall give the existing lessee thirty days' notice to file an application for renewal pursuant to this section.

C. If two or more applicants apply to lease the same land for a term of not more than ten years, the department shall approve the application of the one who, after investigation or hearing, appears to have the best right and equity to the lease. The order of filing shall not be a controlling factor in deciding who is entitled to the lease. If it appears that none of the applicants has any right or equities superior to those of another that would outweigh an offer of additional rent, and if it is in the best interest of the trust, the department, at a stated time and after due notice to all applicants, may receive bids submitted in accordance with rules of the department. If one of the competing applicants is the existing lessee who has a preferred right of renewal pursuant to section 37-291, the department shall extend the preferred right of renewal to the existing lessee if the existing lessee offers a bid matching the highest bid. The department shall approve the application of the bidder who in all respects is eligible to receive a lease upon the land and will pay the highest annual rental, or the department may reject all bids.

D. Before the department issues a lease to the successful bidder, the successful bidder shall pay one full year of rent and, unless all parties agree to an extended payment schedule, the appraised value of any nonremovable improvements pursuant to section 37-322.01. If the successful bidder does not pay one full year of rent or the value of any nonremovable improvements within thirty days after the department requests payment, the department may offer the lease to the next best bidder. A lease that is issued pursuant to this section shall require the lessee to pay annual rent that is equal to the amount of annual rent bid, unless a reappraisal or rental adjustment requires a higher amount.

E. Any person residing upon contiguous land for which the person has an allowed United States homestead entry or for which the person has received a patent from the United States upon a homestead entry, upon application, shall have a preferred right to lease the amount of contiguous state land necessary for personal use.

F. Any person lawfully occupying any lands, the title to which is acquired by the state by operation of law, shall have a preference right to lease the occupied land provided application to do so is made within thirty days from and after written notice by the department to such occupant of the acquisition of title.

§ 37-285 Rental rates for grazing and other lands; grazing land valuation commission; reclassification and reappraisal; definitions

A. An agricultural, commercial or homesite lease shall provide for an annual rental of not less than the appraised rental value of the land, and never less than five cents per acre per year. The rental provided in such leases is subject to adjustment each year.

B. A grazing lease shall provide for an annual rental of the grazing land as computed under this section. All grazing land shall be classified and appraised on the basis of its forage and annual carrying capacity, measured in animal unit months. The annual rental rate for grazing land shall be the amount determined by multiplying the number of animal unit months to be grazed on the lands by the true value rental rate per animal unit month as established by the commissioner. The rental rate per animal unit month is the rental rate determined by the commissioner based on the recommendations of the grazing land valuation commission under subsection E of this section.

C. Before September 1, 1994, and at other times the commissioner may propose, but not more frequently than every five years, the governor shall appoint a grazing land valuation commission consisting of five members appointed by the governor pursuant to section 38-211. The commission shall serve for a period of one year from the date the members assume office during which period the commission shall complete the appraisal. The commission shall consist of the following members, each of whom shall have experience in analyzing and valuing the use of forage on grazing land:

1. One member who is a professional appraiser and who is certified in this state.

2. One member who is a professor and who serves on the faculty of the college of agriculture at the university of Arizona.

3. One member who is a retired employee of a financial institution that is actively engaged in agricultural lending.

4. One member who primarily derives income from livestock grazing and who does not hold a state lease.

5. One member who is a conservationist and who represents a natural resource conservation district in this state.

D. Each member of the grazing land valuation commission shall receive compensation at the rate of one hundred dollars for each meeting. Each member of the commission shall receive reimbursement for expenses pursuant to title 38, chapter 4, article 2.

E. The grazing land valuation commission may employ a person who is experienced in analyzing and valuing the use of forage on grazing land and who, together with the members of the commission, shall gather the information that is necessary to prepare an appraisal to determine the true value of the use of forage on state grazing land and shall prepare this appraisal using both the market and income approaches. The appraisal report shall recommend a grazing fee that will equal the true value as recommended by the commission. The information and work products gathered in preparing the appraisal shall be available to the public. In determining the rental rate using the market approach the commission shall determine the typical lease of two years or more of private grazing land located in this state during normal years. The commission shall compare all factors that make up the bundle of rights and obligations in the typical private lease with the factors that make up the bundle of rights and obligations in the typical state lease. The commission shall document all adjustments, calculations and assumptions made in reaching a conclusion of true rental value for the state land grazing fee and shall determine economic benefit, burden or value attributable to each of these factors. These factors shall include the following:

1. All services, equipment and water rights provided by the lessor or lessee.

2. All improvements typically constructed and maintained to facilitate or enhance the use of the land for livestock grazing, wildlife, hunting or recreation.

3. All management and protection services that are typically provided.

4. The tenure, right to renew, assignability, right to reimbursement for improvements, responsibility for property taxes, right of others to share in the use of the land and ability to control access by others.

5. The size, location, accessibility, condition and carrying capacity of the land being leased and all related costs.

F. The commissioner's decision under this section may be appealed by any affected lessee to the board of appeals pursuant to section 37-215, and, except as provided in section 41-1092.08, subsection H, the decision of the board of appeals may be appealed to the superior court pursuant to title 12, chapter 7, article 6.

G. The commissioner may make a reclassification or reappraisal, or both, at any time. If a reclassification or reappraisal, or both, is made pursuant to a request of a lessee, before expiration of the lease, the lessee shall pay a reclassification fee prescribed pursuant to section 37-107 plus the actual expenses incurred in making a reappraisal.

H. The department may authorize nonuse for part or all of the grazing use upon request of the lessee at least sixty days prior to the beginning of the billing date. The rental fee shall be based on the animal unit months used, but the total rental fee for partial or full nonuse shall not be less than five cents per acre per year.

I. For the purposes of this section:

1. "Animal unit" means one weaned beef animal over six months of age, or one horse, or five goats, or five sheep, or the equivalent.

2. "Animal unit month" means one animal unit grazing for one month.

§ 37-286 Execution of leases by land department; covenants; assignment of lease by lessee

A. Leases shall be signed by the commissioner and sealed with the seal of the state land department, and shall contain covenants that the lessee will not permit any loss, cause any waste in or upon the land, or cut, waste or allow to be cut or wasted, any timber or standing trees thereon without written consent of the department, except for fuel for domestic uses, or for necessary improvements on the land, and that the lessee will surrender peaceable possession of the lands at the expiration of the lease. Nothing in this section shall be construed to permit the cutting of saw timber for any purpose without the written consent of the department.

B. A lessee of state lands who is not in default in rent, and who has kept and performed all the conditions of his lease, may, with the written consent of the department, assign the lease, but a lessee who assigns a holding lease shall pay to the department one-half of the consideration received for the assignment.

§ 37-286.01 Duty to exclude unauthorized livestock bond; damages; injunction

A. Notwithstanding the provisions of title 3, chapter 11, article 8, if the commissioner leases land located within the boundaries of a fenced range to a person other than the prior state grazing lessee, the new lessee shall exclude unauthorized livestock grazing by fencing the exterior boundary of the state land or by any other means that the commissioner considers to be suitable. The commissioner may require the new lessee to post a bond sufficient to cover the cost of the fence construction.

B. If the new lessee referred to in subsection A of this section fails to fence the exterior boundaries of the state land, or otherwise exclude unauthorized livestock from the state land, within the time for compliance with the fencing requirements set forth in the lease conditions prescribed by the department, the failure constitutes a default on the lease and the new lessee is subject to default proceedings pursuant to section 37-289 and, if a bond was required pursuant to subsection A of this section, the bond may be forfeited on cancellation of the lease.

C. The commissioner shall include the requirements imposed by this section in the terms of all new leases to which this section applies.

D. If the commissioner withdraws state land from lease pursuant to section 37-132, subsection A, paragraph 11, because the land may pose a threat to human health and cannot be used for livestock grazing, and the land is located within the boundaries of a fenced range, either the commissioner or the party responsible for causing the land to be withdrawn shall be responsible for excluding unauthorized livestock from grazing on the land. The lessee may not exercise the preferred right pursuant to section 37-291 to renew a lease on the land withdrawn.

E. Until livestock are excluded from the state land pursuant to this section, or during the pendency of the lease default for failure to exclude livestock pursuant to subsection B of this section, the unauthorized grazing of livestock on state land within the fenced range shall not constitute trespass pursuant to section 37-501 or wilful trespass pursuant to section 37-502, subsection A or B, but shall constitute prima facie evidence of casual or involuntary trespass pursuant to section 37-502, subsection A. The monetary damages for the unauthorized grazing of livestock under this subsection shall be limited to the greater of the carrying capacity of the state land for the period of unauthorized grazing as expressed in animal unit months or the actual animal unit months of unauthorized grazing actually determined to have occurred on the state land, multiplied by the grazing fee, as most recently determined by the state grazing land valuation commission pursuant to section 37-285, subsection E. The commissioner may seek to enjoin the unauthorized grazing of livestock, and the provisions of sections 37-501 and 37-502 apply on the occurrence of any of the following:

1. The number of unauthorized livestock exceeds the carrying capacity of the fenced range that includes the state land.

2. The owner of the unauthorized livestock does not agree to pay the monetary damages authorized by this subsection.

3. The lease is canceled pursuant to subsection B of this section and the owner of the unauthorized livestock fails to apply for the lease when requested by the commissioner or accept the offer by the commissioner for a lease on the state land.

4. The owner of unauthorized livestock intentionally hinders the fencing of state land pursuant to subsection A or D of this section.

F. Nothing in subsection E of this section shall limit the ability of the commissioner to enjoin unauthorized activities other than grazing that may damage or decrease the value of the state land or otherwise impede the management of the state land.

§ 37-287 Reservation of rights in state land leases

A. Unless the rights and interests described in this section are specifically included in a particular lease, all leases of state lands shall expressly except and reserve to the state:

1. All oils, gases, geothermal resources, coal, ores, minerals, fertilizer and fossils of every kind, which may be in or upon the land leased.

2. Any legal claim existing or which may be established under the mineral land laws of the United States or the state.

3. The right to enter upon the land for the purpose of exploring for those commodities or extracting any or all of such commodities from the land.

4. The right to relinquish to the United States lands needed for irrigation works in connection with a government reclamation project, and to grant or dispose of rights-of-way and sites for canals, reservoirs, dams, power or irrigating plants or works, railroads, tramways, transmission lines or any other purpose or use on or over the land.

B. The reservations of rights required in subsection A do not apply to existing or future leases under article 5.1 of this chapter, except as required by the state constitution, the enabling act or the commissioner acting in the best interests of the state lands.

C. If the state reserves the rights described in subsection A, the lease shall provide for reasonable compensation to the lessee for any damage resulting from the exercise of those rights.

§ 37-287.01 Default on long-term lease; forfeiture and cancellation of lease; extension of time for payments; penalty and interest on delinquent rent

A. If a lessee of a lease in excess of ten years defaults in a payment of rent, as provided in the lease, or fails to comply with a condition, covenant or requirement of the lease, the lease and the lessee's rights under the lease are subject to forfeiture and cancellation as provided by this section and section 37-289. Within sixty days after default or failure the department shall notify the lessee of the default or failure by certified mail to the lessee's last known address of record with the department.

B. On the written request of a lessee of a lease in excess of ten years, the commissioner may extend the time for payment of the delinquent amount for a period of not more than five years on terms that the commissioner considers to be appropriate as follows:

1. The commissioner may grant an extension in response to a request made within sixty days before the due date of the payment. An extension under this paragraph begins on the date the payment was due and continues for the period stated in a written notice to the lessee.

2. The commissioner may grant an extension in response to a request made within sixty days after the date of the default or failure notice provided in subsection A of this section. An extension under this paragraph begins on the date of the notice and continues for the period stated in a written notice to the lessee.

3. If the department does not act on a request for extension within thirty days after receiving the request, the request is considered to be denied.

4. If the lessee fails during the period of the extension to complete all delinquent payments of rent, penalty and interest, the lease is subject to default and cancellation as provided by this section and section 37-289, except that if the last day of the last period of extension expires on the last day of the five-year period and all delinquent payments have not been paid by the last day of the five-year period, the lease is automatically canceled on the last day of the five-year period and shall be so noted on the records of the department.

5. If a payment of rent is made after the due date, payments must be made according to the extension granted by the commissioner under this subsection.

C. There shall be added to the delinquent rental a penalty and delinquent interest. The rate of interest on delinquent rent shall be set by the state treasurer. The penalty shall be the greater of a minimum processing cost as determined by the commissioner or five per cent. The delinquent rent, penalty and interest shall be a lien on the improvements, crops and property on the land.

§ 37-288 Default on short-term lease; forfeiture and cancellation of lease; extension of time for payment; penalty and interest on delinquent rental; automatic termination for arrearage

A. If a lessee of a lease of ten years or less defaults in a payment of rent, as provided in the lease, or fails to comply with a condition, covenant or requirement of the lease, the lease and the lessee's rights under the lease are subject to forfeiture and cancellation as provided by this section and section 37-289.

B. If the lessee of a lease of ten years or less fails to pay the rent when due, the department may extend the time for payment an additional period not to exceed ninety days. The department shall not extend the period for payment of rental more than three times in one lease year and in no event for more than two hundred seventy days.

C. There shall be added to the delinquent rental a penalty and delinquent interest. The rate of interest on delinquent rent shall be set by the state treasurer. The penalty shall be the greater of a minimum processing cost as determined by the commissioner or five per cent. The delinquent rent, penalty and interest shall be a lien on the improvements, crops and property on the land.

D. If, on a lease of ten years or less, the annual rental at any time is one calendar year in arrears from the date the rental payment was due, the lease shall automatically terminate and the department shall proceed to cancel it on the records of the department.

§ 37-288.01 Disposition of personal property abandoned by lessee at the end of the lease; definitions

A. Within ninety days after the date of expiration or cancellation of a lease of state land, the lessee shall remove the lessee's personal property from the state land and give written notice to the department of the name and address of any person known to the lessee who owns any personal property remaining on the state land.

B. Except as provided in subsection F of this section, after ninety days, the department may sell the property at public auction or cause it to be sold at public auction. Before auctioning property, the department shall:

1. Attempt to identify any lienholder of record if all the following apply:

(a) The owner of the property is known to the department.

(b) The property is mechanical equipment bearing a serial number or registration number.

2. Give written notice to the owner of any lienholder of record identified pursuant to paragraph 1 of this subsection.

C. The department's notice to an owner pursuant to subsection B of this section shall state:

1. That the department will auction the property.

2. The time and place of the auction, which must be at least ten days after the owner receives the notice.

3. That the department will send the owner the proceeds of the auction after deducting amounts equal to the amount of any delinquent rent, penalty and interest, the amount of any lien pursuant to section 37-288, subsection C and the costs of notification and auction. Unpaid costs of notification and auction shall be a lien on the property. Any lien pursuant to section 37-288, subsection C shall be first priority for payment and a lien for costs of notification and auction pursuant to this section shall be second priority.

4. That the owner may claim the property by appearing at the auction and paying the amount of any delinquent rent, penalty and interest, the costs of notification and auction and the amount of any lien on the property pursuant to section 37-288, subsection C.

D. The department's notice to a lienholder of record pursuant to subsection B of this section shall state:

1. That the department will auction the property.

2. The time and place of the auction, which must be at least ten days after the lienholder receives the notice.

3. That the lienholder may recover the property according to the terms of the lienholder's security agreement before the auction.

4. That the department will send the lienholder the proceeds of the auction after deducting the department's costs of identifying the lienholder, notification and auction if the lienholder does not recover the property before auction.

E. The department shall hold any excess proceeds of a sale under subsection B that are returned as undeliverable for twelve months after the sale. After twelve months, the department shall deposit the excess proceeds in the fund of the beneficiary for whom the land is held in trust.

F. If the department reasonably determines that the value of the property is less than or equal to the cost of removing it, the department may destroy or otherwise dispose of the property. Before destroying or disposing of the property, the department shall send a written notice to the owner indicating that:

1. The department has determined that the value of the property is less than or equal to the cost of removing it.

2. The department will destroy or dispose of the property at any time beginning thirty days after the owner receives the notice.

3. The department's valuation of the property in relation to the costs of removal is an appealable agency action pursuant to title 41, chapter 6, article 10.

G. If an owner appeals the department's valuation of the property pursuant to subsection F, paragraph 3 of this section, the department shall attempt to identify any lienholder of record if the property is mechanical equipment bearing a serial number or registration number. If the department finds a lienholder of record, the department shall notify the lienholder that the lienholder may appeal the department's valuation of the property pursuant to title 41, chapter 6, article 10.

H. Notices to owners and lienholders under this section must be by certified mail, return receipt requested, addressed to the owner's or lienholder's last address of record with the department.

I. The same procedure for the sale or disposition of personal property prescribed by this section may also be used after the termination, cancellation or expiration of a permit, right of entry, certificate of purchase or other instrument issued by the department.

J. For the purposes of this section:

1. "Lienholder of record" or "lienholder" means any person who has perfected a security agreement pursuant to title 47, chapter 9, article 3.

2. "Owner" means a former lessee or other person who owns property on state land after the expiration or termination of a lease, permit, right of entry, certificate of purchase or other instrument issued by the department.

§ 37-289 Procedure on cancellation of lease; notice, default, hearing and appeal

A. Before any lease is canceled, the commissioner shall take the following steps:

1. Notice of default shall be sent by certified mail to the lessee and to any parties who have registered with the department as mortgagees or other lienholders of the lessee's interest. The notice shall inform the lessee and registered mortgagees and lienholders of the specific nature of any default and their right to cure any curable default.

2. For leases of ten years or less, the lessee and registered mortgagees and lienholders have thirty days from receipt of notice of default in which to cure any default involving failure to pay rent, taxes or other assessments, and forty-five days from the receipt of notice to cure any other curable default.

3. For leases of more than ten years, the lessee and registered mortgagees and lienholders have sixty days from receipt of notice of default in which to cure any curable default.

4. As a condition of curing a default, the commissioner may require the lessee and registered mortgagees and lienholders to waive any right to cure future defaults of the same type. A waiver of the right to cure is valid only until the expiration of the current lease.

B. If the default is not cured within the applicable time period, the commissioner may make an order canceling the lease, and if it appears that the lease was procured through fraud, deceit or wilful misrepresentation, the improvements on the land shall be forfeited to the state. If the lease is canceled for any other reason, the lessee shall be permitted to remove the lessee's improvements at any time within sixty days after the date of cancellation.

C. In the event of cancellation the commissioner shall make a formal order canceling the lease, and a copy of the order shall be mailed to the last known post office address of the lessee and registered mortgagees and lienholders.

D. The lessee and registered mortgagees or other lienholders may appeal a cancellation order pursuant to title 41, chapter 6, article 10. If no appeal is made within the prescribed time or if no notice is filed with the department pursuant to section 37-255, subsection C, the order shall become final and the lease shall be canceled on the records of the department.

§ 37-290 Cancellation of lease on reclassification of lands; preferred right to lease reclassified land; refund of advance rental payments

A. Upon reclassification of state lands, whether upon application for reclassification or upon initiation by the commissioner, notice of the decision shall be served upon all interested parties of record in the department. If no appeal from the reclassification is taken as provided for by law, or if the decision of the commissioner is upheld on appeal, any lease upon the land reclassified shall be automatically cancelled on the issuance of a new lease or at the time of auction, whichever occurs first.

B. An applicant for renewal of a lease shall have a preferred right to lease the reclassified land at the reappraised rental thereof for a term not longer than ten years as determined by the department. The preferred right to lease does not extend to a lessee who has not substantially complied with the terms of the lease or who has not placed the land to the use prescribed in the lease during the term of the lease or within the time prescribed in the lease, except when that action was excused for good cause by written authorization by the department.

C. Upon cancellation of the lease of reclassified lands, if the land as reclassified is leased to a person other than the existing lessee or applicant for a renewal lease, the unused pro rata of an advance rental payment made by the existing lessee shall be refunded to such lessee, and the lessee shall be protected in improvements on the land owned by the lessee in the same manner as provided in section 37-322.01.

§ 37-291 Preferred rights to renewal of lease; exceptions; notification

A. On application to the state land department not less than thirty days nor more than one year before the expiration of a lease of state lands, the lessee, if a bona fide resident of this state or legally authorized to transact business in this state, shall have a preferred right to renewal, bearing even date with the expiration of the old lease, for a term not longer than ten years, as determined by the department, at a reappraised rental.

B. The preferred right of renewal shall not extend to a lessee that has not substantially complied with the terms of the lease or that has not placed the land to the use prescribed in the lease during its term or within the time prescribed, unless for good cause the failure to perform was given written authorization by the department. If the department determines the continued leasing of the land is not in the best interest of the state trust, the lease shall not be renewed.

C. Not later than ninety days before the expiration of a lease, the department shall:

1. Notify the lessee by mail of the pending expiration and enclose an application for the lessee to renew the lease.

2. Send a copy of the notice to any parties that have registered with the department as mortgagees or other lienholders of the lessee's interest by certified mail, return receipt requested.

D. The department shall accept renewal applications by mail and may accept renewal applications electronically. The method by which the renewal application is submitted may not be a factor in the department's determination of whether to renew the lease.

E. If the existing lease is not renewed and the existing lessee is in substantial compliance with the terms of the lease and there is not a new lessee or buyer for the land within ninety days after the lease termination, the commissioner must sign an agreement to reimburse the former lessee for the improvements on the lands as provided by section 37-322.01.

§ 37-294 Recovery of lands unlawfully held

A. Nothing in this article shall confer any rights upon occupants or lessees of lands who have not executed and received a lease under the provisions of this article.

B. The state land department shall examine into the rights of all persons in possession of state lands, or improvements thereon, or claiming compensation for improvements on the lands. If it is determined that any person is unlawfully in possession of such lands, or is unlawfully claiming compensation for improvements, the department shall bring an action to recover possession of the lands and improvements, or otherwise establish the rights of the state.

§ 37-295 Disposition of long-term commercial lease prepayments; prepayment fund

A. If the department receives prepayments of rent paid from long-term commercial leases under any provision of this chapter, the monies received shall be transmitted to the state treasurer for investment in a prepayment fund for the appropriate beneficiary. Any interest earned from the investments of monies in the prepayment fund shall be credited to the prepayment fund. For each lease that is prepaid, the department shall give notice to the treasurer of the amount of rent annually due to the beneficiary according to a schedule maintained by the department. The treasurer shall remit to the department an amount from the prepayment fund that is equal to the amount stated in the notice. The department shall transfer the remittance to the credit of the fund of the appropriate beneficiary.

B. For leases entered into through December 31, 2000, the discount rate for prepayments made pursuant to subsection A shall be no greater than the current prevailing long-term interest rate established by the state treasurer on the date the lease is approved by the board of appeals.

C. For leases entered into from and after December 31, 2000, the discount rate for prepayments made pursuant to subsection A shall be no greater than the twenty-four month average yield for a fixed income security with a ten year maturity or average life which is eligible for purchase by the permanent fund managed by the state treasurer. The twenty-four month average calculation ends on the last day of the month before the month in which the board of appeals approves the lease.

Article 4.1 Protesting Auctions

§ 37-301 Procedure for protesting auctions

A. Any person who desires to protest any of the terms of a proposed auction for the sale of state land, the lease of state land, or the sale of natural products of state land shall file a written protest with the department within thirty days after the first day of publication of the terms of the proposed auction. All protests shall state specifically the term or terms of the auction to which objection is made and state specifically the reasons for each objection. An objection not specifically stated or timely made is deemed to be waived.

B. At his discretion, the commissioner, on ten days' notice, may order a hearing on any protest. Whether or not a hearing is held, the commissioner, not less than seven days before the auction date, shall enter a final order determining the validity of the protests. If the commissioner determines that a protest is correct, the pending auction shall be cancelled. If the commissioner determines that the grounds of protest are incorrect, the auction shall proceed at the time and place for which it was noticed.

C. Notwithstanding section 37-133, the commissioner's order granting or denying a protest is subject to review only through a special action to the court of appeals or supreme court, served on the department within twenty days after the commissioner's order is entered. Notwithstanding any law or rule applicable to other orders of the commissioner, no motion for rehearing is required before seeking review of an order of the commissioner rejecting a protest to the terms of an auction. Any rehearing motion shall be filed within ten days of the entry of the commissioner's order. Unless otherwise ordered by the commissioner, the filing of a motion for rehearing does not extend the time for seeking review of the commissioner's order granting or denying a protest. Unless the commissioner orders a rehearing within five days after the rehearing motion is filed, the rehearing motion is deemed denied. If a special action review is not sought within twenty days after the commissioner enters his order granting or denying a protest, or if the commissioner's order is sustained on special action review and the decision becomes final, no further action contesting the legality of the terms of the auction may be brought.

Article 4.2 Trust Lands Suitable for Conservation

§ 37-311 Definitions

In this article, unless the context otherwise requires:

1. "Conservation" means protection of the natural assets of state trust lands for the long-term benefit of the land, the trust beneficiaries, lessees, the public and the unique resources that each area contains, such as open space, scenic beauty, protected plants, wildlife, archaeology and multiple use values.

2. "Existing lessee" means any of the following:

(a) The lessee who is entitled to the use of state lands at the time the lands are considered for classification and are classified as trust lands suitable for conservation purposes.

(b) An existing lessee who continues to lease the trust lands after classification as trust lands suitable for conservation purposes.

3. "Open space" means land that is generally free of land uses that would jeopardize the conservation and open space values of the land or development that would obstruct the scenic beauty of the land.

4. "Trust land" means any land that is owned or held in trust by this state.

§ 37-312 Nominating and classifying trust land as suitable for conservation purposes

A. On the commissioner's initiative, on petition as provided by subsection C of this section or as provided by section 37-332, the commissioner may nominate certain trust lands as being under consideration for classification as trust lands suitable for conservation purposes. The commissioner shall not nominate trust lands as being under consideration for classification as trust lands suitable for conservation purposes unless the trust lands are eligible for classification under this section and are located within:

1. One mile of the corporate boundaries of an incorporated city or town having a population of less than ten thousand persons.

2. Three miles of the corporate boundaries of an incorporated city or town having a population of ten thousand persons or more.

3. Ten miles of the boundaries that are established in paragraph 1 or 2 of this subsection and that are located within counties with a population greater than five hundred thousand persons and are adjacent to lands that are eligible for conservation and share with them a specific physical characteristic such as a reach of a river, a mountain slope or an archaeological feature.

B. In addition to the lands identified in subsection A, paragraphs 1 through 3 of this section, the following lands may be nominated for reclassification by the commissioner:

1. Those lands within the Tortolita mountain park in Pinal county located within T10S, R12E and T10S, R13E.

2. Those lands in the vicinity of the Superstition mountains in Pinal county located within T1N, R9E; T1N, R10E; T1S, R9E; and T1S, R10E.

3. Those lands in the vicinity of the San Tan mountains in Pinal county located within T3S, R7E, section 10, the northwest quarter of the southeast quarter and the south half of the southeast quarter; section 15, the north half and southeast quarter.

4. The following lands located in Coconino county:

(a) T19N, R5E, section 3.

(b) T19N, R6E, sections 5 and 6.

(c) T20N, R5E, sections 2, 8, 10, 12, 14, 18, 20, 22, 24, 26, 28, 30, 32, 34 and 36.

(d) T20N, R6E, sections 4, 5, 6, 8, 10, 14, 17, 18, 20, 22, 26, 28, 30, 32 and 34.

(e) T21N, R6E, sections 21, 22, 28, 31, 32 and 33.

C. The commissioner shall receive a petition to nominate trust lands as being under consideration for classification as trust lands suitable for conservation purposes from:

1. A state agency that leases the land or intends to lease or purchase the land.

2. The board of supervisors of the county in which the land is located.

3. The governing body of a city or town if the land is located within:

(a) The corporate boundaries of the city or town.

(b) One mile outside the corporate boundaries and the city or town has a population of less than ten thousand persons.

(c) Three miles outside the corporate boundaries and the city or town has a population of ten thousand persons or more.

4. Ten or more private individuals who:

(a) Reside in the county in which the land is located.

(b) Have the financial capability to lease or purchase the land.

5. A nonprofit corporation or trust, the purpose or powers of which include conservation of natural, scenic, open space or other conservation values.

6. The current lessee of the land.

7. A business or corporation that is legally empowered to own or manage real property in this state and that intends to lease or purchase the land.

D. A petitioner who requests the commissioner to reclassify the land pursuant to this article solely or partially on grounds that the land contains cultural resources worthy of conservation shall provide, on the commissioner's request, a report on the results of a cultural resources survey of the petitioned land for the commissioner's consideration before determining if the reclassification is in the best interest of the trust.

E. Unless the commissioner nominates the trust lands under section 37-332, a petitioner shall post a bond or other security sufficient to cover the costs of the planning, notice, advertisement and public hearing as required by this article and as determined by the commissioner. The bond or security is forfeit to this state if the commissioner reclassifies the land pursuant to this article.

F. The commissioner shall not nominate or classify trust land as suitable for conservation purposes if a development plan was approved for the land pursuant to article 5.1 of this chapter before July 26, 1996. The commissioner may nominate and classify trust land as suitable for conservation purposes in an area within a development plan approved after July 26, 1996 if appropriate conservation purposes are incorporated within the development plan prepared for the commissioner's approval. In nominating and classifying trust land as suitable for conservation purposes under this subsection, the commissioner shall follow the procedures for requesting local government zoning pursuant to section 37-334, subsection E.

G. Unless the commissioner nominates the trust lands under section 37-332, after nominating the trust lands under subsection A or B of this section, the commissioner shall:

1. Mail notice of intent to classify the lands as trust lands suitable for conservation purposes to the beneficiary or beneficiaries for whom the lands are held in trust, existing lessees, local planning authorities, the appropriate regional planning authorities and owners of private land that consists of forty or more acres and that is located within three hundred feet of the trust land. The notice shall include the date, time and place of the public hearing to be held pursuant to subsection H of this section and a request for written comments on the proposed classification within thirty days after the date of notice.

2. Within thirty days after giving the notice under paragraph 1 of this subsection:

(a) Publish the notice stating a date, time and place of a public hearing for six publications in a newspaper of general circulation in the county in which the designated lands are located.

(b) Mail the notice to any person who has requested notice of any classification under this article.

(c) Mail the notice to the Arizona game and fish department, the Arizona department of agriculture, the Arizona state parks board, the Arizona department of transportation and any other affected state agency.

H. Within sixty days after the last date of publication of notice under subsection G of this section, the commissioner or the commissioner's designee shall conduct a public hearing in a location in this state as close as conveniently possible to the trust land to receive and record oral and written testimony concerning the proposed classification.

I. In determining whether reclassification is in the best interest of the trust, the commissioner shall:

1. Consult with the governing body of each city or town in which the land proposed for reclassification is located or to which the land is contiguous, the county board of supervisors of each county in which the land is located if the land is not located within the boundaries of a city or town and the local planning and zoning authorities, including the affected regional planning authorities.

2. Consider all evidence and testimony that are submitted at the hearing that was held pursuant to:

(a) Subsection H of this section if the commissioner nominated the trust lands under this section.

(b) Section 37-332, subsections B, C and D if the commissioner nominated the trust lands under section 32-332.

3. Consider the physical and economic impacts that the reclassification would have on other lands owned or controlled by the current lessee and the physical and economic impacts on the local community.

4. Consider the existence of any holding lease on the lands.

5. Consider the existence of any planning permit issued by the commissioner for the lands pursuant to article 5.1 of this chapter.

6. Consider the amount of progress on any development plans being completed for the lands pursuant to article 5.1 of this chapter.

7. Evaluate the mineral potential of the land.

J. The commissioner shall determine whether the reclassification is in the best interest of the trust and, in making the determination, shall state in writing the reasons why the classification is or is not in the best interests of the trust.

K. If the commissioner reclassifies the trust land as suitable for conservation purposes, the commissioner shall adopt a plan to allow existing and conservation uses to be coordinated in a manner that will protect both existing uses and conservation and open space values. If the reclassified trust land is unleased or the petitioner is the lessee pursuant to subsection C, paragraph 6 of this section, the commissioner may require a plan from the petitioners describing how the property is to be managed. In adopting the plan, the commissioner shall consult with:

1. The governing body of the city or town if the land is located in a city or town.

2. The county board of supervisors if the land is not located in a city or town.

3. Existing lessees of the trust land, local and regional planning authorities and owners of private land who provided written comments pursuant to subsection G, paragraph 1 of this section.

4. Any other person or entity that the commissioner considers to be necessary.

L. The classification of state land as suitable for conservation does not affect the designation or use of adjacent federal, state or private land.

M. A person who is adversely affected by the commissioner's decision to reclassify land as suitable for conservation purposes may appeal the decision to the board of appeals pursuant to section 37-215.

N. On classifying trust lands suitable for conservation purposes, existing leases shall not be canceled or modified as a result of any actions taken pursuant to this article, and renewals of existing leases shall be pursuant to section 37-291.

§ 37-312.01 Access to and use and enjoyment of private lands

Notwithstanding any other provision of this article, the reclassification of trust lands as suitable for conservation purposes shall not restrict or unreasonably limit access to or use or enjoyment of private lands. Any lease or sale of land pursuant to this article shall include a condition requiring that permanent access to and use and enjoyment of private lands be allowed.

§ 37-313 Conservation lease of trust lands suitable for conservation; definition

A. The commissioner may sell leases of trust land for conservation purposes to a qualifying lessee when it is in the best interest of the trust. The conservation lease may authorize the lessee to protect the conservation and open space value of the land in cooperation with other lessees of the land, consistent with the plan adopted under section 37-312. The commissioner retains the right to authorize other compatible uses of the land.

B. The term of the lease may be for less than ten years or for at least ten but not more than fifty years. The sale of any lease shall be:

1. At public auction.

2. Based on one independent appraisal and one independent review appraisal, both of which may be reviewed by the department, of the fair market value of the interest in the trust land that is being offered, including mineral, sand and gravel and oil and gas value.

3. Consistent with the requirements of the Constitution of Arizona, applicable provisions of this title and rules adopted by the commissioner.

C. If an existing lease is not renewed as a result of any action taken pursuant to this article and the conservation lessee and the existing lessee cannot agree on compensation, the commissioner shall determine the amount of reasonable compensation for damages sustained by the existing lessee after considering the following factors:

1. The actual use of the leased land.

2. The rentals paid during the term of the lease.

3. The actual amount of economic damage to the production unit caused by the failure to renew. In determining the amount of economic damage to the production unit, the commissioner shall not limit the scope of review to only that portion of the lands involved in the reclassification but shall take into consideration the impact of the loss of these lands on the overall production unit, including situations in which other leased or private lands are necessary and have been leased by the existing lessee for operation as a production unit.

4. Other factors that the commissioner or the existing lessee determine to be relevant.

D. The conservation lessee shall make payments for reimbursement or compensation, or both, as established in this section to the existing lessee at the time the lease is not renewed. This section does not prevent the payment for reimbursement or compensation, or both, from being made in installments if the former lessee and conservation lessee agree to installment payments.

E. If trust lands that are leased pursuant to this section are subject to a current planning permit under article 5.1 of this chapter, the succeeding lessee shall reimburse the holder of the permit as provided by section 37-338.

F. The department shall make application forms available for leases. The application form shall contain a statement under penalty of perjury that the person signing the application represents that the information in the application is complete and correct. A material false statement or omission of facts in the application is cause for canceling a conservation lease that was issued based on the application.

G. At the time of application the applicant shall post a bond pursuant to section 37-107. The bond is forfeit to this state if no bidder bids at the auction for the conservation lease.

H. The successful bidder shall pay the first year's annual rental and other costs pursuant to section 37-281.02, subsection D and section 37-107.

I. If the applicant did not bid at a previous auction where the applicant initiated the process, the department shall require the applicant to pay a deposit pursuant to section 37-281.02, subsection I.

J. A lessee under a conservation lease shall not:

1. Use the lands for any purpose other than that for which the lease was issued.

2. Sublease the lands except to another qualifying lessee and on approval by the commissioner.

3. Inhibit or interfere with other existing leases.

K. A state land trust beneficiary may lease trust land under this section but may not make payments on the lease from monies that were received from the state trust.

L. For purposes of this section "qualifying lessee" includes:

1. The United States or an agency or instrumentality of the United States.

2. An agency of this state, including a state land trust beneficiary.

3. A county, city, town, school district, community college district or special taxing district or any of their agencies or instrumentalities.

4. An individual or a private organization or entity that is legally empowered to own or manage real property in this state.

§ 37-314 Conveyance of title to trust lands suitable for conservation purposes

A. The commissioner may sell or otherwise transfer title to trust lands suitable for conservation purposes when it is in the best interest of the trust.

B. A sale of trust land under this section shall be:

1. At public auction.

2. Based on one independent appraisal and one independent review appraisal, both of which may be reviewed by the department, of the fair market value of the trust land that is being offered. The appraisal shall not take into consideration the conditions or covenants which may be imposed under subsection C of this section in order to reduce the appraised value.

3. Consistent with the requirements of the Constitution of Arizona, applicable provisions of this title and rules adopted by the commissioner.

C. The terms of the sale may include the condition that the conveyance of title is subject to a covenant that runs with the land and that the land shall be used only for purposes that are consistent with the conservation of specifically named resources or public values.

D. The commissioner shall include the applicable conditions under subsection C of this section in any public notices relating to the sale under this section.

E. If the trust land is sold subject to a lease and the lease is canceled or modified due to a sale of land under this section and the purchaser and the existing lessee cannot agree on compensation, the commissioner shall determine the amount of reasonable compensation for damages sustained by the existing lessee after considering the following factors:

1. The time remaining in the term of the lease at the time that the lease is canceled or modified.

2. The actual use of the leased land.

3. The rentals paid during the term of the lease.

4. The actual amount of economic damage to the production unit caused by the cancellation or modification. In determining the amount of economic damage to the production unit, the commissioner shall not limit the scope of review to only that portion of the lands involved in the reclassification but shall take into consideration the impact of the loss of these lands on the overall production unit, including situations in which other leased or private lands are necessary and have been leased by the existing lessee for operation as a production unit.

5. Other factors that the commissioner or the existing lessee determines to be relevant.

F. The purchaser shall make payments for reimbursement or compensation, or both, as established in this section to the existing lessee at the time of sale. This section does not prevent the payment for reimbursement or compensation, or both, from being made in installments if the existing lessee and purchaser agree to installment payments.

G. If trust lands that are conveyed pursuant to this section are subject to a current planning permit under article 5.1 of this chapter, the transferee shall reimburse the holder of the permit as provided by section 37-338.

H. At the time of application the applicant shall post a bond pursuant to section 37-107. The bond is forfeit to this state if no bidder bids at the auction for the sale of the land.

§ 37-315 Withdrawing trust lands suitable for conservation purposes by department without lease or sale

A. Notwithstanding any other law, when it is in the best interest of the trust, the commissioner may withdraw trust land suitable for conservation purposes from lease or sale for development purposes to allow qualifying lessees or buyers to complete the plans and arrangements necessary to accomplish the purposes of the classification and plan of the lands.

B. The commissioner shall prescribe a termination date, of at least three but not more than five years, after which the lease or sale may proceed. Within one year before the expiration of the withdrawal period the commissioner, after a public hearing, may extend the withdrawal period for not more than one additional three year period if significant progress is evident in the effort toward acquiring the land.

C. The commissioner's decision under this section is subject to appeal pursuant to section 37-214.

D. During a withdrawal period under this section:

1. The commissioner may allow existing lessees of the land to continue their normal and customary use of the land. The commissioner may renew existing leases pursuant to section 37-291.

2. The commissioner may authorize a new use of the land that is consistent with the classification.

E. If the commissioner withdraws trust lands from lease or sale pursuant to this section, or fails to lease or convey trust lands suitable for conservation purposes as provided by this article within three years after classification, and the trust lands are subject to a current planning permit under article 5.1 of this chapter, the commissioner shall reimburse the holder of the permit pursuant to section 37-338.

§ 37-317 Subordination to constitution and enabling act

This article shall not be construed to replace or supersede the responsibilities and obligations of the state land department and the state land commissioner under article X, Constitution of Arizona, and section 28 of the enabling act of June 20, 1910.

Article 5 Improvements on State Lands

§ 37-321 Permission required for person other than holder of certificate of purchase to make improvements; forfeiture for failure to obtain permission; report of improvements

A. Except as otherwise provided in section 37-323, if a lessee, a permittee or other person having a legal interest in state lands, other than a holder of a certificate of purchase, desires to construct or make improvements upon the lands, he shall first file with the department an application for permission to construct or make the improvements unless improvement authorization is contained within the terms of the lease. The application shall be allowed or rejected as the best interest of the state requires as determined by the department. Unless permission is granted by the department, the applicant shall not be entitled to reimbursement or compensation for improvements placed upon the state lands. Upon expiration or cancellation of the lessee's lease or permit, improvements placed on the land without approval shall be forfeited and become the property of the state.

B. The owner of improvements placed upon state lands by a lessee, a permittee or any other person having a legal interest in state lands shall prior to December 31, 1965, unless such time is extended by the department, report to the department in writing the description of the improvements, their location and the actual current cash value thereof. The improvements reported as provided by this subsection shall be allowed or rejected as the best interest of the state requires as determined by the department.

C. Improvements placed on state land granted to the territory of Arizona by the act of Congress approved January 27, 1894, or placed on land to which the state gains title by any determination, by a person who is not a lessee or permittee may be reported to the department after the person becomes a lessee or permittee. The improvements shall be allowed or rejected as the best interests of the state require, as determined by the department.

D. The department may, from time to time, but not more frequently than once a year, require from any lessee or permittee or the person having a legal interest in state lands information concerning the improvements. Failure to make the report shall, in the discretion of the department, subject the improvements to forfeiture to the state.

§ 37-321.01 Rights to water used on state land; definition

A. A permit or certificate for the right to use water on state land for stock watering or stockpond purposes, or for domestic use on a ranch or farm, shall be issued in the name of the state of Arizona except as follows:

1. If the place of use is located on state land, but the point of diversion is located on patented land, the certificate or permit shall be issued to the owner of the patented land.

2. If the place of use is located on state land, but the point of diversion is located on land owned by the United States, the permit or certificate shall be issued to the lessee of the state land.

3. If the water right was perfected under the law applicable at the time that the right was initiated by the lessee or its predecessors in interest for use on land that was owned by the United States before that land was designated for transfer to the state of Arizona, the certificate or permit shall be issued to the lessee of the state land.

B. The commissioner and the person or persons asserting that a permit or certificate should be issued as prescribed by this section may stipulate as to the ownership of a water right. The stipulation or agreement shall be accepted by the department of water resources.

C. An application for a certificate to appropriate water for use on state land as provided in subsection A of this section shall not be approved nor shall a permit or certificate be issued pursuant to this section by the director of the department of water resources, until the commissioner has been given the opportunity to review and object to the permit or certificate. Section 45-164, subsection C applies to any objections made pursuant to this subsection.

D. No person shall have any legal interest in or the right to lease state land based solely upon ownership of a water right acquired or confirmed under this section or section 45-257, subsection C.

E. No water right for stock watering or stockpond purposes, or for domestic uses on a ranch or farm that is acquired by a lessee pursuant to subsection A, paragraph 3 of this section, may be severed from its place of use on state land and transferred for use on other land without prior written consent of the commissioner. The commissioner may withhold consent if the commissioner finds that the use of state land for grazing purposes is dependent upon the water right that is proposed to be transferred. A lessee's successor in interest or the state shall pay compensation to a lessee of state land who is entitled to a domestic, stock watering or stockpond water right pursuant to subsection A, paragraph 3 of this section, if the lessee is denied reasonable use of the water right because of a refusal by the commissioner to consent to the severance and transfer of the right from its place of use on state land. Compensation shall be determined by appraisal and may be reviewed by the state board of appeals by the procedure for appraising improvements on state land. On payment of the compensation, the department of water resources shall reissue the water right in the name of the person or entity making the payment.

F. For the purposes of this section, "certificate" includes certificates issued pursuant to title 45, chapter 1, article 5 or 10.

§ 37-322 Basis for appraisal of improvements; reimbursements; amortization; reimbursement for irrigation or district assessments and levies; limitation

A. Improvements placed on state lands prior to June 25, 1952 shall be appraised in accordance with the law in effect at the time the improvements were made. Improvements placed upon state lands after June 25, 1952, including water rights, when the owner thereof is entitled under law to reimbursement for the improvements, shall be appraised as follows:

1. Improvements, except eradication of noxious growth on grazing lands, and irrigation or other district assessments, shall be appraised at the time the appraisal is made on the following basis:

(a) The condition of the improvements.

(b) The current value.

(c) Their suitability for uses ordinarily made on the lands on which they are located at the time the improvements were made.

2. Reimbursement for the cost of eradication of noxious growth on grazing lands, shall be amortized at the rate of ten per cent per annum.

3. Reimbursement for irrigation or other district assessments and levies which have been legally assessed and levied against state lands, and the interest of the holders of such lands, whether under lease or permit, shall be limited to that portion of the assessments and levies which have been properly and legally assessed and levied to defray such district or project construction charges.

B. Pumps especially designed for the well in which placed shall be reimbursable improvements and shall be appraised as other reimbursable improvements.

C. The cost of improvements for clearing and leveling land for agricultural purposes shall remain as a credit for the lessee in case of sale of the land. Any reimbursement for the cost of clearing and leveling land used for agricultural purposes remaining unamortized on the effective date of this section shall not be amortized, but such unamortized balance shall remain as a credit for the lessee in case of sale of the land.

§ 37-322.01 Reimbursement for nonremovable improvements by succeeding lessee of lands not subject to auction; failure to pay; penalty

A. A lessee of state lands that are not subject to lease by auction shall be reimbursed by a succeeding lessee for improvements placed on the lands which are not removable.

B. If the retiring lessee and the new lessee do not agree upon the value of the improvements, or if there is no amortized value established for the improvements, either party may file with the state land department an application for appraisal of the improvements. If a lease is granted pursuant to section 37-284, a request for an appraisal shall be made more than ninety days before the expiration of the lease. Thereafter an appraisal of the improvements shall be made pursuant to section 37-322. For agricultural and grazing leases, the appraiser shall consider the following in determining the value of the improvements:

1. The impact to surrounding state land.

2. Replacement cost minus physical and functional obsolescence as it relates to agriculture and grazing.

3. Any other factors that the commissioner determines to be relevant.

C. Upon making the appraisal, the department shall give notice of the amount by certified mail to each person interested in the appraisal. The notice shall require that the new lessee pay to the department for the prior lessee the entire amount of the appraisal before issuance of the lease unless all parties agree to an extended payment schedule. If the improvements were placed on state lands subject to a commercial lease and if the commissioner determines that the value of the improvements is so great that it inhibits the commissioner's ability to lease the property at fair market value, the commissioner may require reimbursement of the improvements pursuant to a payment schedule of not more than five years.

D. If the improvements are not paid for as agreed in an extended payment schedule, the succeeding lessee shall not be permitted to sell, assign or transfer his lease nor sell, assign or remove any improvements whatever from the land until the entire amount of the appraised value of the improvements has been paid. Upon default the succeeding lessee shall be subject to the same penalties and liabilities as provided by section 37-288 for failure to pay rents, including a cancellation of the lease.

§ 37-322.02 Payment by purchaser or succeeding lessee for improvements on auctioned land

A. When state lands on which there are improvements for which the owner is entitled to be compensated are offered at an auction for sale or lease, and the purchaser or succeeding lessee is not the owner of the improvements, the purchaser or succeeding lessee shall pay the department at the time of the auction ten per cent of the appraised or remaining unamortized value of the improvements and the balance within thirty days thereafter. The department shall pay the owner of the improvements the payments collected.

B. If the department determines that the amount at which the improvements are appraised is so great that it hinders competitive bidding at an auction for the land, the department may sell the improvements on installments payable ten per cent upon announcement of the successful bidder, fifteen per cent thirty days thereafter and fifteen per cent annually thereafter for five years, together with six per cent interest on the balance remaining unpaid, which amount, until paid, shall be a lien upon the purchaser's or succeeding lessee's interest in the land.

C. The purchaser or succeeding lessee shall at all times keep the insurable improvements insured for the benefit of the owner of the improvements.

D. Payments shall be made at the time and in the manner prescribed for payments on the land or lease, and any default in the payments for improvements shall be deemed a forfeiture in the payments for the land or the lease and of all payments made.

§ 37-322.03 Improvements on state lands; taxation; disposition on termination of lease; statement of improvements

A. A lessee of state land shall maintain all improvements that are pertinent to the lease in serviceable condition for the term of the lease and shall not remove any improvement without written authorization from the department except as provided by subsection B. All improvements placed upon state land shall, until they become the property of the state, be subject to assessment for taxes in the name of the owner, as other property.

B. Within sixty days before or ninety days following the expiration of a lease of state land, the lessee may remove from the land the lessee's removable improvements, if the removal will not injure the land. Wells, embankments or dams designed for development, storage or conservation of water shall not be taken away, destroyed or injured, but shall remain as appurtenant to the land and shall be removed, destroyed or altered only by authority of the department.

C. The retiring lessee may, with written authority from the department, and within the time for removal, sell the lessee's improvements to the succeeding lessee.

D. At the commissioner's request, a lessee shall file with the department a sworn statement setting forth the character of the improvements and their actual cash value.

E. If an improvement remains on the land after ninety days after the lease termination, the department may remove, destroy or otherwise dispose of the improvement if the department reasonably determines that any of the following apply to the condition of the improvement:

1. The improvement must be repaired before it can be used for the purpose for which it was placed on the land, and the cost of repairs would equal or exceed the value of the repaired improvement.

2. The improvement must be repaired before it can be used for the purpose for which it was placed on the land and the value of the improvement before repair is equal to or less than the cost of disposing of the improvement.

3. The existence of the improvement in its current condition is unsafe, poses an unreasonable risk of injury to persons or property, violates an applicable provision of law or is a nuisance.

4. The improvement is not authorized by the department and is not in the best interest of the trust.

F. Before disposing of an improvement pursuant to subsection E of this section, the department shall send written notice to the former lessee, by certified mail, return receipt requested and addressed to the lessee’s last address of record with the department, that:

1. The department intends to remove, destroy or otherwise dispose of the improvement at any time beginning thirty days after the lessee’s receipt of the notice.

2. The department’s determination pursuant to subsection E of this section is appealable pursuant to section 37-215.

§ 37-322.04 Accounting for improvements which become property of state

When improvements on state lands become the property of the state, they shall be deemed to belong to the fund for the purpose of which the land was granted. Any monies subsequently received for the improvements shall be deposited in the fund in which the monies received from the sale or lease of the land are deposited. When any money has been paid from the general fund for the improvements such improvements shall not be deemed to belong to any special fund, and if the land is subsequently sold or leased, the purchaser or lessee shall reimburse the state for the improvements, and the amount paid from the general fund for the improvements shall be returned to that fund. Any surplus remaining after reimbursing the fund shall belong to the fund for the purpose for which the lands were granted.

§ 37-323 Permission required for construction on floodplains; criteria

A. A lessee, permittee or other person having a legal interest in state lands located in a floodplain as defined in section 48-3601 other than a holder of a certificate of purchase shall not construct or make improvements or any other development upon the lands without obtaining the written permission of the department.

B. The department may grant permission for any proposed construction, improvement or development under this section after consideration of the following:

1. The value of the construction, improvement or development to this state if this state were required to purchase it.

2. The effect the construction, improvement or development would have on other landowners or land occupiers.

3. Whether the proposed construction, improvement or development is in compliance with local floodplain regulations promulgated under title 48, chapter 21, article 1.

4. Whether the proposed construction, improvement or development is consistent with local floodplain management goals.

5. The requirements for lands held in trust by this state.

6. Possible construction, improvements or development as an alternative to that proposed.

7. Any other reasonable and relevant criteria determined by the department.

§ 37-324 Development or secondary plan; effect

Notwithstanding any other statute, a development or secondary plan prepared in the consideration of potential future uses for any state lands shall not be considered an improvement of any kind.

Article 5.1 Urban Lands Development

§ 37-331 Definitions

In this article, unless the context otherwise requires:

1. "Conservation" has the same meaning prescribed in section 37-311.

2. "Existing lessee" means any of the following:

(a) The lessee who is entitled to the use of state lands at the time such lands are considered for classification and are classified as urban lands suitable for urban planning.

(b) An existing lessee who continues to lease urban lands following classification as urban lands suitable for urban planning.

(c) A person who leases urban lands following classification as urban lands suitable for urban planning.

3. "Local planning authorities" means any city, town or county in which urban lands suitable for urban planning are located. When urban lands that are located in an unincorporated area of a county are designated as urban lands suitable for urban planning, a city or town whose corporate boundaries are three miles or less from these lands shall be considered to be a local planning authority, together with the governing body of the county in whose jurisdiction the lands are located.

4. "Planning contractor" means the person or persons who contract with the department to formulate a development or secondary plan for urban lands suitable for urban planning.

5. "State general plan" means a policy document that addresses appropriate uses for state lands, provides a general basis for a development plan and makes policy statements related to the use and management of state lands.

§ 37-331.01 Designation of state lands as urban lands on request

A. The governing body of a city, town or county may request that the commissioner designate as urban lands state lands that are located within:

1. One mile of the corporate boundaries of an incorporated city or town having a population of less than two hundred fifty thousand people.

2. Three miles of the corporate boundaries of an incorporated city or town having a population of two hundred fifty thousand people or more.

B. The commissioner shall provide notice of a request made pursuant to subsection A of this section to all local governing bodies within three miles of the land in question.

C. The commissioner shall designate as urban lands those state lands requested pursuant to subsection A of this section unless the commissioner determines that the designation is an inappropriate categorization of the lands. When the commissioner makes a designation, he shall provide notice of the designation of the lands as urban lands to all local governing bodies within three miles of the lands so designated. If the commissioner determines that the designation would be inappropriate, he shall state in writing his reasons, and shall provide a copy of this statement to the requesting local governing body. The local governing body may appeal this decision to the board of appeals as provided in section 37-215.

§ 37-331.02 Urban land planning oversight committee

A. The urban land planning oversight committee is established in the department consisting of the following members appointed by the governor pursuant to section 38-211:

1. One member with experience in drainage, hydrologic or infrastructure engineering.

2. One member with experience in urban and community planning.

3. One member with experience in contracting for planning studies related to residential, commercial or industrial real estate development.

4. One member with experience in open space or natural resource planning.

5. One public member.

B. The governor shall appoint the members to staggered terms of four years. A vacancy is created, and the governor shall appoint a replacement member to fill the unexpired term, if a member:

1. No longer resides in this state.

2. Is absent without excuse from three consecutive meetings of the committee.

3. Resigns or is unable to perform the duties as a committee member.

C. Each year the committee shall select a chairman from among the members. Members of the committee are eligible for compensation as provided by title 38, chapter 4, article 1. The committee shall meet on the call of the chairman.

D. The committee shall:

1. Recommend to the department procedures and strategies to efficiently create conceptual land use plans for urban state trust land and other state trust lands the commissioner considers to be appropriate, as provided by section 37-331.03, subsection A.

2. Provide advice on the types and extent of studies that are needed to create the plans.

3. Review and make recommendations for approval regarding the final conceptual land use plans and the final five year state trust land disposition plans for conformity with the adopted conceptual plans.

§ 37-331.03 Conceptual urban state trust land use plans; five year state trust land disposition plans; definitions

A. The commissioner shall create conceptual land use plans for all urban state trust land in this state and other state trust lands the commissioner considers to be appropriate. The commissioner shall:

1. Prioritize the creation of conceptual plans to the extent possible to:

(a) Correlate with the rate of population growth in the urban areas in this state.

(b) Coincide with the production of municipal general plans under title 9, chapter 4, article 6 and county plans under title 11, chapter 6, article 1.

2. Revise and update each plan at least every ten years.

3. Consult with the city, town or county in which the land is located and with any regional planning organization regarding integrating the conceptual plan into the general land use plan of the city, town or county.

4. Submit each plan, and revision of the plan, to the urban land planning oversight committee for review.

B. On approval of the conceptual land use plan by the commissioner under this section, the conceptual plan is considered to be a state general plan for purposes of this article.

C. The commissioner may create the conceptual land use plans under subsection A of this section by any of the following methods:

1. Using department staff or private consultants.

2. Entering into participation contracts pursuant to section 37-239.

3. Issuing planning permits for urban lands pursuant to section 37-338.

4. Entering into planning contracts for urban lands or other state trust lands the commissioner considers to be appropriate, including compensation as provided by section 37-338, subsection D.

D. The commissioner shall create five year disposition plans for all state trust land in this state, based at a minimum on market demand, anticipated transportation and infrastructure availability. The commissioner shall:

1. Review and update each plan each year as may be necessary.

2. Consult with the city, town or county in which the land is located and with any regional planning organization.

3. Submit each plan and revision to the urban land planning oversight committee to ensure conformity with the conceptual plan under subsection A.

E. For the purposes of this section:

1. "Conceptual land use plan" means a plan that is developed for urban state trust land and other state trust lands the commissioner considers to be appropriate and that identifies:

(a) Appropriate land uses, including commercial, industrial, residential and open space uses.

(b) Transportation corridors and infrastructure requirements.

(c) All natural and artificial constraints and opportunities associated with the land.

2. "Five year disposition plan" means a plan that identifies the land projected to be sold, leased, reclassified for conservation purposes, master planned or zoned during the next five years.

§ 37-332 Urban lands; notice; hearing; requirements; classification; state general plan

A. On the commissioner's initiative, the commissioner may designate certain urban lands as being under consideration for classification as urban lands suitable for urban planning, or suitable for conservation purposes if the lands are to be planned in conjunction with lands to be developed, pursuant to this section. The commissioner may designate urban lands as being under consideration for classification as urban lands suitable for urban planning or conservation purposes upon application by the governing body having jurisdiction for the area in which the urban lands are located.

B. Unless the commissioner has asked the local governing body for a general or comprehensive plan amendment that would include public notification and hearing, and after designating lands pursuant to subsection A of this section, the commissioner shall give notice of intent to classify the lands as suitable for urban planning or conservation purposes and of intent to prepare a state general plan to existing lessees, local planning authorities, owners of property that extends to within three hundred feet of the designated urban lands and the beneficiary or beneficiaries for whom the lands are held in trust. Within thirty days after giving notice, the commissioner shall publish the notice stating the date, time and place of the public hearing for six publications in a newspaper of general circulation in the county in which the designated urban lands are located. The commissioner shall give notice to any person who requests notice of any classification and preparation of a state general plan made under this section.

C. In the notice required under subsection B of this section, or on the commissioner's request of the local governing body for a general or comprehensive plan amendment, the commissioner shall notify all existing lessees of state land within the boundaries of the area under consideration that such a designation may subsequently result in reclassification of state lands within the boundaries of the designated areas.

D. If applicable, within sixty days after the last date of publication of notice under subsection B of this section, the commissioner or the commissioner's designee shall conduct a public hearing in the city, town or county in which the lands are located to receive and record oral and written testimony concerning the classification as urban lands suitable for urban planning or conservation purposes and the state general plan.

E. The commissioner may classify urban lands as urban lands suitable for urban planning or conservation purposes and may approve a state general plan after determining that:

1. The department has met the notice and public hearing requirements of subsections B, C and D of this section or that the commissioner has requested a general or comprehensive plan amendment by the local governing body that would include public notice and hearing.

2. The state lands being considered as urban lands suitable for urban planning are adjoining existing commercially or homesite developed lands which are either:

(a) Within the corporate boundaries of a city or town.

(b) Adjacent to the corporate boundaries of a city or town.

(c) Lands for which the designation as urban lands is requested pursuant to section 37-331.01.

3. The state lands under consideration are located in areas where planning for urban growth and development is appropriate, is beneficial to the trust and does not promote urban sprawl or leapfrog development.

4. The proximity of the urban lands to other developed areas and local jurisdictions is considered.

5. The urban lands' compatibility with adjoining development and land uses is considered.

6. The department has cooperated with the department of water resources to determine that the urban lands have the quality and quantity of water needed for urban development.

7. The department has fully cooperated with the local planning authorities with jurisdiction over the area or areas in which the state urban lands being considered are located.

8. All of the affected local planning authorities' development policies have been taken into consideration by the department.

9. The classification is consistent with the local planning authorities' development policies.

10. The proximity to and impact on public facilities, including streets and highways, water supply systems, wastewater collection and treatment systems and other public facilities and services necessary to support development, are considered.

11. It is in the best long-term interest of the trust to plan for development.

12. The types of land uses for state lands, including residential, commercial, industrial, agricultural, open space and recreational uses are considered.

13. The natural and artificial features of the state lands, including floodplains, geologic instabilities, natural areas, wildlife habitat, airport influence zones, other potentially hazardous conditions and historic and archaeological sites and structures are considered.

14. The timing of development is considered.

15. The impact to all existing leases in the area under consideration and in the general area is considered.

16. The department has resources available to plan the urban lands under consideration.

17. Any other considerations deemed relevant by the commissioner and local planning authorities.

F. Before approving the classification and proposed state general plan the commissioner shall determine whether the classification and state general plan are in the best interest of the trust. The commissioner shall state in writing the reasons for any determination that the classification or state general plan prepared according to this section would be detrimental to the interests of the trust.

G. After the commissioner approves the state general plan, no amendment or revision may be made without the commissioner's approval. The commissioner may approve a proposed amendment or revision only after notifying and meeting with the local planning authority regarding the nature of the proposed amendment or revision. If the local planning authority does not hold a public hearing on the proposed amendment or revision, the commissioner shall hold a public hearing on the proposed amendment or revision if the proposed amendment or revision does not substantially conform to the state general plan. If such a hearing is held, the proposed amendment or revision may be adopted after the hearing and after the commissioner and the local planning authority consider the information presented at the hearing. The commissioner shall provide notice of the public hearing as provided by subsections B, C and D of this section. If neither the commissioner nor the local planning authority determines that a public hearing is necessary, the commissioner may adopt the proposed amendment or revision.

H. If the land included in a state general plan was previously sold or leased, and the plan amendment proposed by the owner or lessee would substantially increase the value of the land as estimated by an appraisal or would compete with land uses elsewhere on land included under the plan, then as a condition for approving the amendment, the commissioner may require additional consideration.

§ 37-334 Designation of lands; development or secondary plan; requirements; approval

A. The commissioner may designate certain urban lands as suitable for a development plan. The designation may be made only for lands for which a state general plan has been approved under section 37-332, or a conceptual plan has been developed pursuant to section 37-331.03. The designation shall specify the boundaries of the urban lands and that a development plan is to be prepared for those lands.

B. After designating certain urban lands as suitable for a development plan, the commissioner may cause a development or secondary plan to be prepared. The development or secondary plan may be submitted to the department, after a development planning permit or secondary planning permit is issued, or may be prepared by a planning contract to the lowest and best bidder, with monies appropriated by the legislature for the purpose of urban lands development planning. A secondary planning permit is a planning permit issued for a parcel or parcels of state land that have not yet been disposed of to prepare a secondary plan which supplements and implements an approved development plan.

C. The development or secondary plan shall contain specific provisions for the use, development and management of the urban lands in accordance with the state general plan as approved under section 37-332.

D. The development or secondary plan shall contain provisions as are necessary to implement the purposes of this section, including:

1. Provisions for allocation and location of specific uses of the land, including residential, commercial, industrial, recreational or other appropriate uses.

2. Provisions for acceptable densities and concentrations of the designated land uses.

3. Provisions for the timing and rate of development.

4. Provisions for the delivery of an adequate or assured water supply as specified in title 45, chapter 1 or 2.

5. Provisions for public facilities and resources, including water supply delivery systems, wastewater collection and treatment systems, parks and public recreational facilities, school sites, roads and other elements of a transportation system and other necessary facilities and services.

6. Provisions for needed zoning and other land use control mechanisms.

7. Provisions for resource conservation and the use of alternate sources of energy.

8. Other provisions deemed relevant by the commissioner.

E. To the extent the proposed development plan would require zoning inconsistent with any existing zoning, the commissioner shall submit a request to the local government with jurisdiction over the lands in question for either rezoning consistent with the development plan or approval of a land use plan pursuant to statute or ordinance that would include designations of proposed zoning categories and land use intensity and that would be consistent with the development plan. The local government shall act upon the request within six months, notifying the commissioner as to the acceptance or rejection of the commissioner's request for rezoning or plan approval. Rejection of a request for rezoning or plan approval may, at the commissioner's discretion, be appealed in the manner provided to any owner of land affected by a zoning decision. The local government's zoning decision shall govern the use of the lands unless the commissioner determines that such zoning or plan is detrimental to the interests of the trust. If the commissioner so determines, the commissioner shall prepare a written statement of the reasons for the determination and shall within ten days of such decision provide a copy of the written statement to the local planning authority. The local government within whose jurisdiction the lands are located has thirty days from receipt of this statement to appeal the commissioner's decision to the board of appeals as provided for in section 37-215. If the local government fails to act upon the commissioner's request for rezoning or plan approval within the time provided in this subsection, the commissioner may adopt the development plan, noting that the requested rezoning or plan approval has not been obtained from the local government. The commissioner may, after compliance with the requirements of section 37-335, reclassify the lands and proceed with their sale or lease, noting in the call for bids that the requested rezoning or plan approval has not been obtained.

F. The commissioner shall not approve the development or secondary plan until the director of water resources has either evaluated the plans for an adequate water supply for the proposed development of lands outside a groundwater active management area as required by section 45-108 or has certified that there is an assured water supply for the proposed development of lands in a groundwater active management area as required by section 45-576.

G. Following approval of the development plan by the commissioner, no amendment or revision may be made without approval by the commissioner. The commissioner may approve a proposed amendment or revision of the development plan only if it is consistent with the state general plan or conceptual plan or after complying with the requirements prescribed under section 37-332, subsections E, F and G.

H. Following approval of a secondary plan by the commissioner, no amendment or revision may be made without the commissioner's approval. After notice to the development planning permittee, if one exists, and any master property association for the affected development plan, the commissioner may approve a proposed amendment of the secondary plan only if it is consistent with the development plan. If the proposed amendment is inconsistent with the development plan, the development plan must be amended under subsection G of this section.

I. If the land included in a development or secondary plan was previously sold or leased, and the plan amendment proposed by the owner or lessee would substantially increase the value of the land as estimated by an appraisal or would compete with land uses elsewhere on land included under the plan, then as a condition for approving the amendment, the commissioner may require additional consideration.

§ 37-334.01 Development plan for a master plan area

A. The commissioner may approve a development plan which includes a proposed master plan area if the proposed master plan area:

1. Is within the corporate boundaries of a city or town.

2. Has inadequate infrastructure to use state land for its highest and best use.

3. Has an area of at least one hundred sixty acres.

B. A development plan approved for a master plan area may propose:

1. Design guidelines and covenants, conditions and restrictions.

2. Infrastructure planning, implementation and funding.

3. Provisions for construction, maintenance and enforcement of a community identity package.

4. Phasing, timing and method of disposition and placement of infrastructure.

5. Conformance with municipal development ordinances, in addition to the requirements of section 37-335, subsections H and K.

6. Membership in a master property association that is governed by a board of directors with responsibility to implement and enforce compliance with the master plan area.

7. A marketing program description to promote the master plan area, including provisions to fund the marketing program.

§ 37-335 Sale or lease of state lands for development

A. On approval of the development or secondary plan, the commissioner may reclassify the lands consistent with the plan. The existing lessee is entitled to compensation as provided by this chapter.

B. Upon the reclassification of state lands, the existing lessee shall be given notice of this reclassification and of the lessee's rights as provided in section 37-290, subsections A and C.

C. Upon the cancellation of a lease due to a reclassification of state lands under subsection A of this section, the existing lessee shall have a preferred right to lease the reclassified land by offering a bid that matches the highest and best bid received by the commissioner for the reclassified land at public auction. The highest bidder may offer one subsequent bid that exceeds the bid of the existing lessee, but the existing lessee has the right to match the final bid. If the existing lessee is not successful in obtaining the reclassified lease, or if the existing lessee chooses not to exercise the preferred right specified in this subsection, the existing lessee is eligible for compensation and reimbursement as provided in section 37-335.01. The preferred right described in this section is subject to the requirements of section 37-291, subsection B, and the preferred right shall expire after the commissioner receives the highest and best bid at public auction. If the commissioner determines that no bid will be accepted, the preferred right to lease the reclassified lease shall remain in effect, subject to any subsequent public auction. The preferred right is not transferrable and can be exercised only by the existing lessee.

D. At least one independent appraisal is required for commercial leases that are offered at public auction if a former lessee has a vested preferred right under subsection C of this section. The commissioner shall require the successful bidder to pay the cost of the appraisal.

E. Following cancellation of a lease due to reclassification, the commissioner may issue an interim use permit for the urban lands reclassified for a term the commissioner deems necessary to protect the income of the trust and this state. For thirty days after cancellation of a lease, the prior lessee has a preferred right to obtain the interim use permit.

F. On determination by the board of appeals that the lands to be developed under this article should be sold, the commissioner shall comply with all publication and other statutory requirements for the sale of state lands. In determining the minimum amount acceptable as a bid, the commissioner shall include the related proportionate part, based on the ratio of lands proposed to be sold to lands covered by the development or secondary plan, of the actual costs incurred by this state in obtaining the development or secondary plan adopted for implementation. All state costs recovered at the time of sale shall be paid to the state general fund.

G. The certificate of purchase or patent shall require the purchaser to honor any covenants and restrictions as deemed necessary by the commissioner to implement the approved development or secondary plan. A breach of any covenant or restriction results in the reversion of all rights, title and interests in the land to this state pursuant to the conditions prescribed by section 37-247.

H. If urban lands in the area of the adopted plan are sold, the purchaser shall conform the use of the land to the development or secondary plan and to other local zoning ordinances.

I. On a determination by the board of appeals that the land to be developed under this article should be leased, the commissioner shall incorporate the provisions of the approved development or secondary plan into the lease. The commissioner shall comply with all publication and other statutory requirements for the lease of state lands.

J. The successful bidder shall pay to this state the relative proportionate part, based on the ratio of lands proposed to be leased to lands covered by the development or secondary plan, of the actual costs incurred by this state in obtaining the development or secondary plan adopted for implementation. Payment to this state shall be made at the time the lease is signed. All state costs recovered at the time of lease shall be paid to the state general fund.

K. The lessee shall submit to the jurisdiction of the county or the incorporated city or town within whose jurisdiction the land is located with respect to compliance with building, safety and housing codes or ordinances and any development or site plan review procedures applicable to the development of the land for the uses permitted by the lease.

L. A lease issued pursuant to this section may be terminated, at the option of the commissioner, for any violation of lease provisions pursuant to the conditions prescribed by section 37-288. On cancellation or termination of a lease issued pursuant to this section, the commissioner may seek a new lessee only by complying with the same process through which the original lease was issued. If the costs of the development or secondary plan have been received by the state as provided in subsection J of this section at the time of termination or cancellation, a subsequent lessee under this subsection need comply with subsection J of this section only to the extent that the lease offered to the subsequent lessee includes lands for which the proportionate part of the costs to the state for obtaining the development or secondary plan have not been recovered.

M. An encumbrance shall not be placed upon this state's interest in land leased for development. The lease may contain provisions that will permit the encumbering of the lessee's interest in the lease by mortgage or deed of trust.

N. Within the scope of an approved development or secondary plan, the commissioner may assess the value of rights-of-way or parcels to be used for parks, schools, public facilities, open space or other public purposes, and assign those values to parcels that will be sold or leased for residential, commercial or industrial purposes as payment for the purchase or lease price that otherwise would be required for such rights-of-way, or parcels to be used for parks, schools, public facilities, open space or other public purposes. The total revenues derived from all parcels within the development plan shall not be less than the aggregate appraised value of all the parcels.

§ 37-335.01 Compensation and reimbursement of lessee upon cancellation of lease

A. If an existing lease is cancelled due to reclassification under section 37-335, and if the existing lessee either did not utilize his preferred right to lease the reclassified land or was unsuccessful in obtaining the reclassified lease, the lessee is entitled to receive reimbursement for non-removable improvements as provided in section 37-322.01, and to receive reasonable compensation as provided in subsection B of this section for damages sustained by reason of the cancellation of the lease.

B. The commissioner shall determine the amount of reasonable compensation for damages sustained by the lessee after consideration of the following factors:

1. The time remaining in the term of the lease at the time that the lease is cancelled.

2. The actual use of the leased land.

3. The rentals paid during the term of the lease.

4. The actual amount of economic damage to the production unit caused by cancellation of the lease. In determining the amount of economic damage to the production unit, the commissioner shall not limit the scope of his review to only that portion of the lands involved in the reclassification for the purposes of urban lands development, but shall take into consideration the impact of the loss of these lands upon the overall production unit, including situations where other leased or private lands are necessary and have been leased by the existing lessee for operation as a production unit.

5. Other factors that the commissioner or the existing lessee determine to be relevant.

C. The commissioner's determination of reasonable compensation for damages under this section may be appealed as provided in section 37-214.

D. Payments for reimbursement or compensation or both as established in this section shall be made by the purchaser or lessee of the reclassified land to the lessee who had been the existing lessee at the time of sale or upon the signing of the lease for the reclassified land. This section shall not prevent the payment for reimbursement or compensation or both from being made in installments if this process is agreed to by the lessee who had been the existing lessee and the purchaser or subsequent lessee.

§ 37-335.02 Off-site improvement of urban lands

A. The governing body of an incorporated city or town or the board of directors of a county improvement district or a community facilities district pursuant to title 48, chapter 4, article 6 may submit to the commissioner for approval an improvement plan to be carried out by the city, town or district for some or all of the urban lands within its corporate or district boundaries. The plan shall be submitted before any assessment has been levied for construction of off-site improvements which will be on or adjacent to and benefit the urban land. The plan may provide for the imposition of special assessments only against the leasehold interest of the lessee or the interest in the certificate of purchase of the purchaser of urban lands which will be subject to sale or long-term lease pursuant to section 37-281.02 or other law. The plan shall include the following:

1. A description of the work proposed.

2. An estimate of the cost of such work and the costs to be imposed against the leasehold interest of the lessee or the interest in the certificate of purchase of the purchaser of urban land within the area of the plan.

3. A map and legal description of the area showing the urban lands benefited by the work proposed.

4. A method of charging the cost to any long-term lessee or certificate of purchase holder of the urban lands benefited.

5. A schedule or alternative schedules for payment of the costs so charged by future holders of certificates of purchase or lease on such urban land, including the manner in which charges under such schedules will be held in abeyance for urban lands not subject to a certificate of purchase or lease. The schedule for payments shall state the maximum assessment amount, excluding interest, which may be imposed against the leasehold interest of the lessee or the interest in the certificate of purchase of the purchaser of urban land involved in the plan.

6. The maximum interest rate to be charged on the unpaid charges, including the maximum rate at which interest, if any, will accrue for urban lands benefited but not subject to a certificate of purchase or lease.

7. Information showing that the urban land involved in the plan will be benefited in an amount equal to or greater than the proposed maximum assessment amount.

8. Such other terms as the governing body deems necessary or appropriate.

B. No plan may include urban land which is already subject to a long-term lease or certificate of purchase nor may any assessment be imposed against the leasehold interest of the lessee or the interest in the certificate of purchase of the purchaser of such land unless the lessee or certificate of purchase holder agrees to such inclusion and assessment.

C. The commissioner shall cooperate if requested by the governing body of the city, town or county improvement district in the preparation and revision of the improvement plan. The commissioner may hold such public hearings as the commissioner determines are necessary and may approve the plan if it is in compliance with the development or secondary plan for the urban lands affected.

D. If the commissioner approves the improvement plan or any modification of the plan, he shall enter an order to that effect in his official records and cause a copy to be served on the governing body requesting approval, recorded with the county recorder of the county in which the land is located and filed with the secretary of state. Fees shall not be charged for recording or filing.

§ 37-335.03 Assessment district assessments and city improvement plan assessments as lien on urban lands within district; enforcement

A. Officially certified descriptions of all urban lands included within the boundaries of a city special assessment or county improvement district subject to an approved improvement plan, with the amounts of assessments and charges of every character made against the leasehold interest of the lessee or the interest in the certificate of purchase of the purchaser of such lands, shall be furnished to the state land department as soon as the assessments or charges are levied. A promise by the lessee or purchaser to make timely payment of all assessment charges and an acknowledgment of the assessment shall be inserted in any certificate of purchase or lease for such lands. If assessments have been levied against urban lands prior to purchase or lease pursuant to an improvement plan, the commissioner shall require that all unpaid installments on assessments be paid to the city or town or county improvement district before executing a lease or any instrument of sale. Thereafter the proceedings leading to the recording of an assessment by the city or town or county improvement district may treat the lessee's or purchaser's interest in state land as land subject to an assessment notwithstanding section 48-582 or 48-920.

B. If any installment of any assessment or charge against the leasehold interest of the lessee or the interest in the certificate of purchase of the purchaser of urban land subject to an improvement plan is not paid when due, the superintendent of streets of the city or town or county improvement district where the urban land is located may, after not less than thirty days' notice to the named purchaser or lessee, notify the state land department of the nonpayment. Such nonpayment is a default under any certificate of purchase or long-term lease under which such lands are held. The interest of any purchaser or lessee of any urban lands within a municipal assessment district is subject to the enforcement and sale, redemption and forfeiture provisions of title 48, chapter 4, article 2 or title 48, chapter 6, article 1. Nonpayment of charges due pursuant to an improvement plan subjects the certificate or lease to default proceedings as provided by this chapter. If the delinquent amounts against such land are not paid within thirty days from the date the notice is received by the commissioner, the commissioner shall act to cancel the certificate of purchase or lease.

C. All charges and assessments legally imposed against the leasehold interest of the lessee or the interest in the certificate of purchase of the purchaser of urban lands subject to an improvement plan approved by the commissioner which are not held under a certificate of purchase or lease by the assessment district or pursuant to an improvement plan shall be a continuing charge, and such land shall not be leased or sold until the purchaser or lessee of the land presents to the state land department a certificate from the superintendent of streets of the city or town or county improvement district in which the land is located showing that all assessments due have been paid as provided in subsection A of this section.

§ 37-335.04 Liens not liabilities of state

This chapter shall not be construed as creating a lien against the interest of this state in any urban lands, nor an obligation against this state to pay charges or assessments imposed against urban land pursuant to an improvement plan. No action of any nature may be brought to forfeit, terminate or foreclose this state's title or interest in urban lands for failure of any lessee or purchaser to pay any assessment.

§ 37-335.06 Agreements to fund, install and reimburse costs of infrastructure on trust lands

A. The commissioner may enter into agreements with any public or private party to permit the construction, operation and maintenance of infrastructure on urban lands, including a community identity package for urban lands with a plan that is approved pursuant to this article. The agreement:

1. May provide for reimbursement by subsequent purchasers or lessees of actual infrastructure related land acquisition and construction costs plus a reasonable rate of interest as determined by the commissioner.

2. Shall contain such limitations as deemed necessary by the commissioner to protect the marketability of the affected trust land.

3. Shall identify the type, quality and location of infrastructure, the schedule for installation, the method of computing the reimbursable costs and the methods for repayment.

4. Shall include requirements to maintain and repair the infrastructure and address the issue of liability for damage or accidents resulting from the design, construction, maintenance or repair of the infrastructure.

5. Shall state the procedure for amending the agreement.

6. Shall include rights and remedies for default under the agreement, including the right to cure.

B. A party to an agreement under this section may not delegate his obligations under the agreement without written approval of the commissioner. The commissioner may require performance and payment bonds or other sufficient security as a condition for his approval.

C. An agreement entered into under this section does not give rise to any preferred rights or other rights generally acquired by a lessee of state lands unless specifically stated in the agreement. Notwithstanding section 37-322.01 or 37-322.02 or any other statute, the right to reimbursement for infrastructure on urban lands is limited pursuant to subsection A, paragraph 1 of this section. The general provisions for default under state land leases or certificates of purchase do not apply to agreements under subsection A of this section.

§ 37-336 Rules; review and approval by legislature; duties of commissioner

A. The commissioner may adopt rules pursuant to title 41, chapter 6 to carry out this article. All rules adopted by the commissioner are subject to review and approval by the legislature.

B. Following the adoption of a rule, the commissioner shall immediately forward a certified copy to the speaker of the house of representatives and the president of the senate. The legislature may review and, by concurrent resolution, approve, disapprove or modify any rule submitted by the commissioner for review and approval. Each rule adopted by the commissioner as provided by law is effective pending legislative review. If a concurrent resolution is not passed by the legislature with respect to the rule within one year following receipt of a certified copy, the rule is deemed to have been approved by the legislature.

C. On disapproval by the legislature of a rule, the commissioner shall immediately discontinue the use of any procedure, action or proceeding authorized or required by the disapproved rule. On modification by the legislature of a rule, the commissioner shall immediately suspend the use of any procedure, action or proceeding authorized or required by the original rule until a modified rule has been adopted in accordance with title 41, chapter 6. Following the adoption of the modified rule, the commissioner shall conduct all subsequent proceedings in accordance with the modified version of the rule.

§ 37-338 Selection of application for development planning permit or secondary permit

A. The commissioner shall review all applications before issuing a development planning permit or secondary permit. The application shall include:

1. The applicant's experience, expertise and financial capability to prepare and complete the development or secondary plan.

2. The experience and expertise of any consultants.

3. The proposed cost to prepare the development or secondary plan.

4. A development concept statement of the proposed or potential uses for state land included in the proposed development or secondary plan area.

5. Any additional information relating to the disposition feasibility and scheduling of the proposed development or secondary plan as the commissioner may require.

B. The commissioner may retain one or more independent experts to assist in assessing the qualifications of any applicant and consultants or in evaluating the benefits of any proposed development concept. The commissioner shall select any such independent experts and may require each applicant to pay the fees, costs and hiring expenses incurred in analyzing the applicant's qualifications and proposal. If the applicant is unwilling to pay such fees, costs and expenses, the applicant shall notify the commissioner in writing before the fees, costs and expenses are actually incurred, and the applicant's application shall be automatically withdrawn from consideration. The commissioner shall deposit, pursuant to sections 35-146 and 35-147, monies received under this subsection in the state general fund.

C. The commissioner may deny the applications or select the best applicant, considering each consultant's or applicant's experience and expertise, the cost to complete the development planning under the permit or secondary permit and the best interest of the trust.

D. Compensation for planning may be allowed as follows:

1. The commissioner may allow compensation for planning if all of the following conditions apply:

(a) The department has issued a development planning or secondary planning permit.

(b) The permit specifically states the maximum cost that the commissioner will recognize as development or secondary planning costs.

(c) The development plan or secondary plan is approved by the commissioner pursuant to this article.

(d) The lands are leased or sold at public auction based on the approved development plan or secondary plan.

2. The commissioner may recognize by rule development or secondary planning costs as eligible for reimbursement in cases where the commissioner terminates the permit in the best interests of the trust.

3. If any party who is due reimbursable development or secondary planning costs is not the successful bidder for lease or purchase of state land implementing the development or secondary plan, the successful bidder shall compensate that party at the time leases are granted or the land is sold. The commissioner shall determine the amount of the development or secondary planning costs to be recovered from each lease or sale.

Article 6 Reclamation of State Lands

§ 37-341 Preliminary investigation of projects for reclamation of state lands

The state land department may make preliminary investigation of projects for the reclamation of state lands by the storage of flood waters, for the discovery and development of subterranean water for irrigation and domestic purposes, or the diversion of running streams adapted for development in cooperation with the United States or by the state independently, and report to the legislature the possibilities and physical requirements of the reclamation accompanied by recommendations for carrying the reclamation into effect.

§ 37-342 Acquisition by land department of rights necessary or advisable for reclamation or irrigation of state lands

A. The state land department shall make and file locations, appropriations, and rights of way of waters, reservoir sites and dam and power sites whenever the location and filing is deemed advisable for the irrigation of state lands. The land department shall, for and on behalf of the state, acquire title to the water or the appropriation of water, reservoir, dam, power or other sites and rights of way, as necessary or advisable for the reclamation and irrigation of state lands.

B. The filing and locations shall be in the name of the state and the procedure therefor shall conform to that provided for the acquisition of such rights by private citizens.

§ 37-343 Investigation of adverse claims upon state lands; protection of equities of persons appropriating water prior to reservation of land for the state

A. The state land department may investigate and determine adverse claims to lands the title to which is held by the state, and in instances where title to other land is obtained in lieu of such land, the department may relinquish the claim of the state thereto. The determination of the department shall be final until set aside by a court of competent jurisdiction.

B. The department may investigate any appropriation of water or reservoir site for irrigation or livestock purposes made and maintained prior to reservation, for the benefit of the state, of the land on which the water appropriation is located, and protect the equities of the prior appropriator of water by the extension of a preference right to lease the land or by such other lawful means as the department may prescribe.

Article 7 Payments to Local Governments

§ 37-371 Definition of acquired entitlement land

In this article, unless the context otherwise requires, "acquired entitlement land" means land which this state acquired from the United States after December 31, 1985 and at the time it was acquired it was entitlement land under title 31 United States Code chapter 69 and the acquisition by the state resulted in a reduction of payments to the county under title 31 United States Code chapter 69.

§ 37-372 Payments to local governments with respect to acquired entitlement lands

A. Each fiscal year the commissioner shall pay to each county in which acquired entitlement land is located a payment from monies appropriated and available for such purpose in an amount determined under this section to be used by the county for any official purpose.

B. Subject to subsections C, D and E, the amount of the payment is equal to seventy-five cents for each acre of acquired entitlement land located in the county.

C. The amount of the annual payment shall be reduced by seventy-five cents for each acre of acquired entitlement land which has been patented by the state to private ownership.

D. If the legislature appropriates insufficient monies to make the full payment determined under this section for a fiscal year, the commissioner shall proportionately reduce the payments to all counties under this section according to the amount appropriated.

E. Payments described in this section shall be made only in those years in which the federal government provides funds under title 31 United States Code chapter 69.

Article 8 Rights of Entrymen Upon Public Domain

§ 37-411 Rights of entrymen under federal laws to possession and enjoyment of land

All persons qualified to make entry under the public land laws of the United States, who settle upon, cultivate or improve a tract of land in the state for the purpose of acquiring title thereto as a homestead or desert land entry under the laws of the United States, and who are conforming to all requirements of residence, improvement or cultivation of such land required by such laws in perfecting title to the land if entered by the claimant under such laws, shall be protected in the peaceable possession and quiet enjoyment of the land, with all the crops, timber and improvements thereon, to the extent of the maximum number of acres allowed by such laws in compact form, if unsurveyed according to the cardinal points, and, if surveyed by the United States, then according to the lines of the survey so as to include the improvements.

§ 37-412 Limitation on claims; marking boundaries of claim; notice; recording of notice

A. A person shall not hold more than one claim of the classes referred to in section 37-411 at the same time.

B. The claimant shall distinctly mark the boundaries of his claim so that it can be readily traced, and shall accurately describe it in a written notice under oath. The notice shall refer to the laws of the United States under which claimant intends to acquire title to the claim, and shall disclose the time when the location was made, and that it does not contain more than the maximum number of acres allowed by such laws.

C. The notice shall be recorded in the office of the county recorder wherein the lands are situated.

Article 9 Use of State Lands by State Institutions

§ 37-441 Taking by state of state lands and improvements; reimbursement of owners for improvements; lease by department or institution

The state may, when necessary for its uses or for the uses of any state department or institution, take over any state lands and the improvements thereon by reimbursing the owners for the improvements, and the department or institution so using the lands shall lease them and pay such rental as the state land department requires.

§ 37-442 Application by department or institution to take over state lands; approval by governor; compensation of lessee for improvements and damages resulting from termination

A. The governing board or officer of a state department or institution desiring to avail itself of the provisions of this article shall make application to the governor for taking the lands over, and, if the application is approved by the governor, it shall be transmitted to the state land department which shall appraise the improvements on the lands.

B. The existence of a permit or lease for the land desired shall not bar the state from taking the land, but the permittee or lessee shall be entitled, in addition to the appraised value of the improvements on the lands, to reasonable compensation for damages he may sustain by reason of the cancellation of the permit or lease prior to its termination. Such damages shall be determined as a part of the appraisal.

C. Upon surrender of the lands to the state, the owner of the improvements shall be paid in the manner provided by law the appraised value thereof and the amount of the damages. The owner of the improvements shall prior to payment file his claim, and certify that the possession of the lands and improvements has been surrendered to the state by all persons having lawful claims thereon.

§ 37-443 Improvements as state property

Upon payment by the state for improvements on state land taken over by the state or its departments or institutions the improvements shall become the property of the state. If the land subsequently is sold or leased to other parties, the purchaser or lessee shall reimburse the state for the improvements and the amount so received shall be placed in the general fund.

§ 37-444 Offset against rent due from trust beneficiaries; substituting trust designations

A. If a state agency or institution that leases a parcel of trust land is also a beneficiary of that trust, the department may offset trust proceeds to the agency against the rent due from the agency or institution. The amount of the offset shall be included in the agency's or institution's beneficiary account under the trust and shall be recorded by the department and the agency or institution in accordance with generally accepted accounting principles.

B. The commissioner, with the approval of the selection board, may transfer and substitute the designation of trust land parcels between land grant trusts if the parcels have substantially equal value and the substitution would permit an offset under subsection A against the rent due from a state agency or institution that leases one of the parcels.

Article 10 Rights of Way and Sites for Public Uses

§ 37-461 Grants of rights-of-way and sites for public uses

A. The department may grant rights-of-way for any purpose it deems necessary, and sites for reservoirs, dams and power or irrigation plants, or other purposes, on and over state lands, subject to terms and conditions the department imposes. The department may make rules respecting the granting and maintenance of such rights-of-way and sites.

B. The department may grant rights-of-way for transportation purposes to federal agencies, state agencies or political subdivisions of this state for nonexclusive uses for a term exceeding ten years without a public auction. If a grant of a right-of-way or site to any other entity amounts to the disposition of or conveys a perpetual right to use the surface of the land, the department shall grant the right-of-way or site at public auction to the highest and best bidder.

C. The department may grant rights-of-way to any person for nonexclusive uses for a term of not more than fifty years without a public auction.

Article 11 Disposition of Products of State Lands

§ 37-481 Conservation and administration of products of state lands

The state land department shall conserve, sell or otherwise administer the timber products, stone, gravel and other products and property upon lands belonging to the state under rules not in conflict with the enabling act and the constitution.

§ 37-482 Contracts for sale of timber; limitations; universities timber land account; composition; use

A. No contract for the sale of timber shall exceed a term of five years nor shall more than fifty million feet of timber be sold to any one person at one sale, nor shall any sale be made or contract entered into with any person while such person has under sale or contract more than five million feet of timber sold under the provisions of this title.

B. There is established a universities timber land account within the universities land fund established pursuant to section 15-1662. The account shall be administered by the state land commissioner. The proceeds that accrue through the sale of timber or timber products from lands granted or given for university purposes shall be deposited into the universities timber land account and are continuously appropriated to the state land department for the payment of expenditures incurred for the conservation, sale and other administration of timber or timber products. The state land department shall transfer to the universities land fund any monies in the account that the state land commissioner determines are not necessary for the conservation, sale and other administration of timber or timber products. The state land department shall report the projected account activity and distributions in their normal budget submitted pursuant to section 35-113. On notice from the state land department, the state treasurer shall invest and divest monies in the universities timber land account as provided by section 35-313, and monies earned from investments shall be credited to the universities timber land account.

§ 37-483 Program to remove vegetative natural products; hazardous vegetation; definition

A. The commissioner and the state forester shall collaborate to establish a program to remove vegetative natural products for the purposes of fire prevention and forest and watershed restoration and to facilitate the development of wood products industries in this state.

B. To implement the program to remove vegetative natural products from state land, the commissioner and state forester may:

1. Coordinate and contract with public and private entities.

2. Enter into an intergovernmental agreement pursuant to title 11, chapter 7, article 3 with a county, city, town, natural resource conservation district or other political subdivision to share the cost of implementing the program. An intergovernmental agreement entered into pursuant to this paragraph must state the responsibilities of each party with regard to implementing the program to remove vegetative natural products from state lands.

C. To implement the program to remove vegetative natural products where the vegetation is hazardous, the state forester may:

1. Enter into an intergovernmental agreement pursuant to title 11, chapter 7, article 3 or a memorandum of understanding with a public agency to identify and remove the hazardous vegetation from land in this state, including state, federal, tribal and private lands for the purposes of fire prevention, forest and watershed restoration and critical infrastructure protection. An intergovernmental agreement or memorandum of understanding entered into pursuant to this subsection must state the responsibilities of each party with regard to implementing the agreement. This paragraph does not apply to state trust land.

2. Use legislative appropriations and accept and spend monies from public agencies, gifts, donations and grants for the costs of implementing this subsection. Monies received pursuant to this paragraph shall be deposited in the cooperative forestry fund established by section 37-1306.

3. Use programs that are designed to reduce recidivism for forest restoration projects on lands located within this state.

D. Consent of the property owner is required to remove hazardous vegetation on private property as prescribed in subsection C of this section.

E. Consent of the tribe is required to remove hazardous vegetation as prescribed in subsection C of this section on tribal land.

F. For the purposes of this section, "public agency" has the same meaning prescribed in section 11-951.

Article 12 Trespass on State Lands

§ 37-501 Trespass on state lands; classification

A person is guilty of a class 2 misdemeanor who:

1. Knowingly commits a trespass upon state lands, either by cutting down or destroying timber or wood standing or growing thereon, by carrying away timber or wood therefrom, by mowing, cutting, or removing hay or grass thereon or therefrom, or by grazing livestock thereon, unless he has a lease or sublease approved by the department for the area being grazed.

2. Knowingly extracts or removes oil, gas, coal, mineral, earth, rock, fertilizer or fossils of any kind or description therefrom.

3. Knowingly without right injures or removes any building, fence or improvements on state lands, or unlawfully occupies, plows or cultivates any of the lands.

4. With criminal negligence exposes growing trees, shrubs or undergrowth standing on state lands to danger or destruction by fire.

§ 37-502 Damages in civil action for trespass on state lands; seizure of products; report of trespasses

A. Whoever commits any trespass upon state lands as defined by section 37-501 is also liable in a civil action brought in the name of the state in the county in which the trespass was committed, for three times the amount of the damage caused by the trespass, if the trespass was wilful, but for single damages only if casual or involuntary.

B. When unfenced state land is included within a fenced range, it is prima facie evidence of wilful trespass to permit the grazing of livestock thereon, unless the person has a lease or sublease approved by the department for the area being grazed.

C. The damage provided for in this section is the rate per acre as determined for the year for the appraised carrying capacity of the lands.

D. The state land department may also, without legal process, seize and take any product or property unlawfully severed from the land, whether it has been removed from the land or not, and may dispose of the product or property so seized in the manner prescribed by law for disposing of products of state lands.

E. The county officers of the several counties shall report to the department any trespass upon state lands which comes to their knowledge.

§ 37-503 Disposition of personal property unlawfully abandoned on state land

A. Except as provided by title 28, chapter 11 and section 37-288.01, the department may dispose of or contract for the disposal of personal property on state land without legal process if the department reasonably determines that the property was deposited by:

1. A person who was trespassing on state trust land.

2. A permittee or lessee of the department who deposited the property while engaging in activities that are not authorized by the permit or lease.

B. If the department reasonably determines that the value of the property is more than the cost of removing it, the department:

1. Shall post on the property a conspicuous notice of pending disposal of the property at least ten days before disposing of the property pursuant to subsection A of this section.

2. May deliver the property to the department of administration for disposal pursuant to title 41, chapter 23, article 8, if the property is not removed within ten days after the department posts the notice pursuant to paragraph 1 of this subsection.

C. If the department reasonably determines that the value of the property is more than the cost of removing it and that the property creates a risk to public health or safety, the department shall promptly take action to reduce the risk posed by the property that may include:

1. Erecting a temporary fence or other barrier around the property.

2. Posting a conspicuous notice on the barrier or property warning of the risk.

3. Immediately removing the property to a secure location, notwithstanding subsection B of this section. If the department considers that removal to a secure location is necessary:

(a) The department shall post a notice in place of the property stating:

(i) The date the property was removed.

(ii) That the department may dispose of the property within ten days after the date of the notice unless the owner redeems the property by paying the department’s costs of removing and storing the property.

(iii) The name, street address and telephone number of the department’s agent who an owner may contact in response to the notice.

(b) The department is not liable for any loss or damage to the property.

D. Notwithstanding any provision of this section, if the personal property is mechanical equipment bearing a serial number or registration number, the department shall take reasonable efforts to identify any lienholder of record, provide written notice to any identified lienholder of record and refrain from disposal of the property until thirty days after the date of the notice. If the lienholder chooses to recover the property, the lienholder shall reimburse the department the reasonable costs incurred in removing and storing the property, identifying and contacting the lienholder.

E. This section does not limit the department from recovering its costs of removing and disposing of personal property on state land according to the terms of a permit or lease or as otherwise allowed by law.

Article 13 Segregation of Funds Derived from Lands

§ 37-521 Permanent state school fund; composition; use

(Caution: 1998 Prop. 105 applies)

A. After any appropriation pursuant to section 37-527, the permanent state school fund shall consist of:

1. The proceeds of all lands granted to this state by the United States for the support of common schools.

2. All property which accrues to this state by escheat or forfeiture.

3. All property donated for the benefit of the common schools, unless the terms of the donation otherwise provide.

4. All unclaimed shares and dividends of any corporation incorporated under the laws of this state.

5. The proceeds of sale of timber, mineral, gravel or other natural products or property from school lands and state lands other than those granted for specific purposes.

6. The residue of the lands granted for payment of the bonds and accrued interest issued by Maricopa, Pima, Yavapai and Coconino counties, after the purpose of the grant has been satisfied, and the five percent of the proceeds of sales of public lands lying within this state sold by the United States subsequent to admission of this state into the union, as granted by the enabling act.

B. The fund shall be and remain a perpetual fund and distributions from the fund pursuant to article X, section 7, Constitution of Arizona, plus monies derived from the rental of the lands and property, interest and accrued rent for that year credited pursuant to section 37-295 and interest paid on installment sales, shall be used as follows:

1. If there are outstanding state school facilities revenue bonds pursuant to title 41, chapter 56, article 6, outstanding qualified zone academy bonds pursuant to title 41, chapter 56, article 7 or outstanding state school trust revenue bonds issued to correct existing deficiencies, the state treasurer and the state land department shall annually transfer to the state school facilities revenue bond debt service fund established in section 41-5754, the state school improvement revenue bond debt service fund established in section 41-5784 and the state school trust revenue bond debt service fund the amount that is necessary to pay that fiscal year's debt service on outstanding state school facilities revenue bonds, qualified zone academy bonds and state school trust revenue bonds, before transferring amounts for any other uses.

2. If there are no outstanding state school facilities revenue bonds pursuant to title 41, chapter 56, article 6 or if the amount of monies available under this subsection exceeds the amount required under paragraph 1 of this subsection, the monies are subject to legislative appropriation to the new school facilities fund established by section 41-5741.

3. If the amount of monies available under this subsection exceeds the amount required under paragraphs 1 and 2 of this subsection, the legislature may annually appropriate an amount to be used as provided in section 15-971, subsection G, except that the amount appropriated may not exceed the amount appropriated from the permanent state school fund and from the rent and interest paid on installment sales for this purpose in fiscal year 2000-2001.

4. Notwithstanding paragraphs 1, 2 and 3 of this subsection, from and after June 30, 2001, any expendable earnings under this subsection that exceed the fiscal year 2000-2001 expendable earnings shall be deposited in the classroom site fund established by section 15-977.

§ 37-522 Universities land fund; composition; use

A. After any appropriation pursuant to section 37-527, the universities land fund shall consist of:

1. The proceeds of all lands granted to the state by the United States for university purposes.

2. All property donated by individuals for university purposes, unless the terms of the donation otherwise provide.

3. The sale of timber, mineral, gravel or other natural products or property from lands granted or given for university purposes.

B. The fund is and shall remain a perpetual fund for the benefit and support of the universities of this state and distributions from the fund pursuant to article X, section 7, Constitution of Arizona together with the monies derived from the sales of timber or timber products and the rental of the lands and property, including interest and accrued rent for that year credited pursuant to section 37-295, shall be used.

§ 37-523 Normal schools land fund; composition; use

A. After any appropriation pursuant to section 37-527, the normal schools land fund shall consist of:

1. The proceeds of all lands granted to the state by the United States for normal schools for the purpose of training teachers.

2. All property donated for normal schools, teacher colleges or colleges of education for the purpose of training teachers, unless the terms of the donation otherwise provide.

3. The sale of timber, mineral, gravel or other natural products of property granted or donated for such purposes.

B. The fund shall be and remain a perpetual fund for the benefit and support equally of the universities for the purpose of training teachers and distributions from the fund pursuant to article X, section 7, Constitution of Arizona together with the monies derived from the rental of the lands and property, including interest and accrued rent for that year credited pursuant to section 37-295, shall be used.

§ 37-524 Agricultural and mechanical colleges land fund and school of mines land fund; composition; use

A. After any appropriation pursuant to section 37-527, the agricultural and mechanical colleges land fund, and the school of mines land fund, shall separately consist of the proceeds of:

1. All lands granted to the state by the United States for the respective purposes named.

2. All property donated by individuals for like purposes, unless the terms of the donation otherwise provide.

3. The sale of timber, mineral, gravel or other natural products or property from lands granted or donated for such purposes.

B. The funds provided for in this section shall be and remain perpetual funds for the benefit and support of the agricultural and mechanical colleges and the schools of mines at the universities and distributions from the funds pursuant to article X, section 7, Constitution of Arizona together with the money derived from the rental of the lands and property, including interest and accrued rent for that year credited pursuant to section 37-295, shall be used.

§ 37-525 Other land funds; composition; use

A. After any appropriation pursuant to section 37-527, the legislative, executive and judicial public buildings land fund, the penitentiary land fund, the Arizona state hospital land fund, the state charitable, penal and reformatory institutions land fund, the schools and asylum for the deaf, dumb and blind land fund, the miners' hospital for miners with disabilities land fund and the military institutes land fund shall separately consist of:

1. The proceeds of all lands granted to this state by the United States for the respective purposes named.

2. All property donated by individuals for like purposes, unless the terms of the donation otherwise provide.

3. The sale of timber, mineral, gravel or other natural products or property from lands granted or donated for such purposes.

B. The funds shall be and remain perpetual funds for the benefit and support of institutions corresponding to the purposes for which the funds are established, except as otherwise provided in the enabling act and section 37-295 and distributions from the funds pursuant to article X, section 7, Constitution of Arizona together with the monies derived from the rental of the lands and property shall be used. Monies in the state charitable, penal and reformatory institutions land fund are subject to legislative appropriation.

§ 37-526 Central Arizona project municipal and industrial repayment fund

A. The central Arizona project municipal and industrial repayment fund is established consisting of:

1. Revenues from the transfer of central Arizona project municipal and industrial water rights and the sale of central Arizona project municipal and industrial water pursuant to section 37-106.01.

2. Monies appropriated to the fund by the legislature.

B. Monies in the fund shall be used to make payments charged to this state under the central Arizona project municipal and industrial water service subcontract among the United States, the central Arizona water conservation district and this state. Any monies remaining in the fund after satisfying the subcontract obligations revert to the state general fund.

§ 37-527 Trust land management fund

A. The trust land management fund is established. The fund consists of up to ten percent of the annual proceeds of:

1. Each beneficiary's trust lands granted to this state by the United States.

2. All sales of timber, mineral, gravel or other natural products or property from each beneficiary's trust lands granted to this state by the United States.

B. The commissioner shall determine the percentage of trust land proceeds to be deposited in the fund each fiscal year. The percentage shall be the same for all beneficiaries. The commissioner shall notify the joint legislative budget committee and the governor's office of strategic planning and budgeting of the determination on or before September 1 of the preceding fiscal year.

C. The monies in the fund:

1. Are subject to legislative appropriation. The department may retain an amount of monies from the fund that is sufficient to pay the department's costs for contracting with a qualified third-party reviewer as prescribed in section 37-132, subsection A, paragraph 12.

2. Shall be used exclusively to manage trust lands as prescribed by law.

D. The commissioner shall administer the fund. On notice from the commissioner, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.

E. Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations, but if the balance in the fund at the end of any fiscal year exceeds two times the budget of the department for the management of trust lands for the next fiscal year, the excess amount shall be credited proportionately to the several permanent funds based on the last fiscal year's deposits.

F. This section does not prevent the legislature from appropriating state general fund monies for the purposes described in this section.

Article 14 Exchange of Public Lands

§ 37-601 Authorization to exchange

The governing body of any county, city, town or school district may exchange with each other any land owned by them but such exchange shall not be made of lands situated in different counties. The determination of the governing body having control of the land that such land should be exchanged shall be final.

§ 37-602 Notice

Not less than thirty days prior to the actual exchange of such land, the governing body of any county, city, town or school district having control of the land shall cause to be published in a newspaper of general circulation within the county in which the land is located a notice of intent to exchange the property, together with a description thereof, and a description of the property to be received in exchange therefor, together with other terms and conditions of the exchange.

§ 37-603 Method of exchange; appraisal

The exchange shall be conducted without formalities, advertisements for bids or considerations of other offers by other persons, but the value of the respective parcels of land being so exchanged shall be substantially the same as determined by an appraisal to be made by a qualified appraiser to be appointed by the governing body of the county, city, town, or school district having control of the land to be exchanged, provided that in the event the value of the respective parcels of land are not substantially equal, the exchange may be made on payment by the governing body, owning the less valuable parcel of land, to the other governing body of an amount in cash substantially the same as the difference in value of the parcels of land.

§ 37-604 Exchange of state land; procedure; limitation and exceptions; definition

A. State land may be exchanged for public land in this state to improve the management of state lands for the purpose of sale or lease or conversion to public use of state lands or to assist in preserving and protecting military facilities in this state. Exchanges may be made for land owned or administered by other state agencies, counties, municipalities or the United States or its agencies. Exchanges with the United States or its agencies shall be in conformance with section 37-722, but the department shall also follow the procedures and requirements prescribed by article X, section 12, Constitution of Arizona, subsection C, paragraph 7 of this section and the classification procedures in section 37-212.

B. The department shall adopt rules governing the application and procedure for the exchange of state land. Such rules shall include the following requirements:

1. The application shall include:

(a) The name, mailing address, telephone number and relevant affiliation, if any, of the applicant.

(b) A legal description of all lands to be considered for exchange.

(c) A list of permanent improvements on the state lands to be considered for exchange.

(d) A list of the leasehold interest in the state land to be considered for exchange.

(e) Accompanying agreements, if any, with the leaseholder or owner of improvements on the state land to be considered for exchange.

2. Payment of fees prescribed for that purpose pursuant to section 37-107.

3. Such additional requirements as the department determines to be necessary. On determining that the application is complete and correct, including payment of the required fees, and on completion of processing and analyzing the application, and on determining that the proposed exchange would benefit the applicable trust, the department shall notify and deliver a report containing details of the proposed exchange to the president of the senate, the speaker of the house of representatives and the state legislators from the legislative districts in which the lands proposed to be exchanged are located.

C. Exchanges of state lands are subject to the following requirements:

1. The commissioner shall determine by at least two independent appraisals that the state lands being considered for exchange are of substantially equal value or of lesser value than the land offered by the applicant.

2. At least two independent analyses of the proposed exchange must be conducted to determine:

(a) The income to the trust from the lands before the exchange and the projected income to the trust after the exchange.

(b) The fiscal impact of the exchange on each county, city or town and school district in which all the lands involved in the exchange are located.

(c) The physical, economic and natural resource impacts of the proposed exchange on the surrounding or directly adjacent communities and the impacts on military facilities, local land uses and land use plans.

3. The commissioner may require the applicant to pay the cost of the independent appraisals and analyses required by this subsection.

4. No county or municipality may be permitted to select lands in another county or municipality.

5. State lands known to contain oil, gases and other hydrocarbon substances, coal or stone, metals, minerals, fossils and fertilizer, in paying quantities, and state lands adjoining lands on which there are producing oil or gas wells, or adjoining lands known to contain any of such substances in paying quantities shall not be exchanged. These prohibitions against exchange shall not prevent the exchange of lands where the state does not own such substances, minerals or metals in the lands to be considered for exchange.

6. All state lands offered for trade pursuant to this section must be located in the same county as the lands offered to the state. However, lands in adjoining counties more than three miles outside the corporate boundaries of incorporated cities and towns having a population of ten thousand people or less and lands in adjoining counties but more than five miles outside the corporate boundaries of incorporated cities and towns having a population in excess of ten thousand people may be exchanged to facilitate consolidating land ownership if the boards of supervisors of the counties in which lands are to be exchanged give their prior approval.

7. Prior to public notice of a proposed exchange of state lands for other lands, the department shall give thirty days' notice in writing to other interested state agencies, counties, municipalities, the military affairs commission established by section 26-261, each military facility at the address on record at the department and to leaseholders on state lands that are to be exchanged and on state lands that are adjacent to the lands to be exchanged.

8. Before any state land may be considered for exchange under this article, the land shall be classified as suitable for such purposes in accordance with section 37-212. Any person adversely affected by such classification may appeal from the decision as provided in section 37-215.

9. After determining that the application is complete and correct and all required payments, appraisals and analyses have been completed, the department shall publish notice of the proposed exchange in the same manner and places as is required for the sale of state lands pursuant to section 37-237, except that the notice shall be published once each week for six consecutive weeks. The notice shall contain a legal description of the properties involved and other pertinent terms and conditions of the exchange. The department shall also schedule at least two public hearings on the exchange contemplated in the notice. One hearing must be held at the state capital and another hearing must be held in a location of general accessibility in the proximate vicinity of the state lands being exchanged. Any person may appear and comment on the proposed exchange at that time.

10. Within sixty days after the conclusion of the last hearing, the commissioner shall determine and issue a written finding recommending either that the exchange be denied or approved and shall transmit the finding to the governor, the president of the senate, the speaker of the house of representatives and the secretary of state.

D. Each exchange transaction must be approved by the qualified electors of this state in the form of a referendum submitted and conducted pursuant to article IV, part 1, section 1, Constitution of Arizona, at the next regular general election. To be approved, the proposition must receive an affirmative vote of a majority of the qualified electors voting on the measure.

E. Lands conveyed to the state under this article shall, on acceptance of title and recording, be dedicated to the same purpose and administered under the same laws to which the lands conveyed were subject, but may be reclassified as provided in section 37-212.

F. This section applies with respect to the exchange of lands held in trust by this state pursuant to the enabling act and the Constitution of Arizona and does not apply with respect to any other state land under the jurisdiction of the department or the commissioner.

G. The provisions of this section do not diminish or otherwise affect the commissioner's fiduciary responsibilities with respect to lands held in trust by this state as provided by the enabling act and the Constitution of Arizona.

H. For the purposes of this section, "military facilities" includes:

1. Military airports, ancillary military facilities, military training routes, high noise or accident potential zones and territory in the vicinity as defined in section 28-8461.

2. Military reservations or other real property owned by, leased to, designated for, reserved to or under the jurisdiction of an active unit of the uniformed services of the United States or any reserve or national guard component of the uniformed services of the United States.

3. Military electronics ranges as defined in section 9-500.28.

4. Military restricted airspace identified pursuant to section 37-102.

5. The Barry M. Goldwater range as described in section 37-620, subsection D, paragraph 3.

§ 37-604.01 Exchange of state subsurface rights and interests

A. The department and selection board, for the purpose of consolidating surface and subsurface ownership, may exchange unleased or unclaimed subsurface rights and interests and leased oil and gas rights and interests, managed by the state land department for subsurface rights and interests owned by others.

B. Such exchanges shall be subject to the following requirements:

1. All subsurface rights and interests exchanged shall be of substantially equal value.

2. Exchanges of subsurface rights and interests leased for oil and gas shall only be made with the United States of America.

3. Leases for oil and gas on subsurface rights and interests exchanged pursuant to this article shall remain in full force and effect for the term of the lease.

4. Before any of the state subsurface rights and interests may be considered for exchange under the provisions of this article, they shall be classified as suitable for purposes in accordance with the provisions of section 37-212.

5. Prior to any exchange of subsurface rights and interests the state land department shall give thirty days' notice in writing to other interested state agencies, counties, municipalities and leaseholders on such lands that are or may be affected by the exchange.

6. Subsurface rights and interests conveyed to the state under this article shall, upon the acceptance of title and records, be dedicated to the same purpose and administered under the same laws which the lands conveyed were subject to.

C. Any person may, within ten days of the date of notice as provided herein, file a written protest of the exchange at the state land department. Upon receipt of such a protest to a contemplated exchange pursuant to this section, the state land commissioner shall, not later than thirty days after receipt of the protest, hold a public hearing at the county seat of the county in which the state lands proposed to be exchanged are located to hear any and all matters relevant to the proposed exchange. Notice of the public hearing shall be mailed to all protestants and published at least weekly during the thirty day period prior to the date of the hearing in a newspaper of general circulation in the county.

D. The state land department may promulgate rules and regulations governing application and procedures for exchanges of subsurface rights and interests.

§ 37-605 Title; reservations, restrictions and encumbrances

A. An exchange for state lands shall not be authorized, approved or made unless the owner of the lands to be traded for state land agrees to grant the state title in fee simple with appropriate title insurance as determined to be acceptable by the department.

B. The state shall grant to the owner of lands being exchanged pursuant to this article a patent to the state lands being exchanged, with any reservations, restrictions or encumbrances as previously agreed to by the parties in writing.

C. Either party to an exchange may reserve mineral estates, easements and rights of use consistent with such reservations.

§ 37-606 Protest; public hearing; judicial review

A. A person interested in the exchange of state lands may appear at any hearing and enter a written protest as provided in section 37-604.

B. The commissioner shall render a decision regarding any protest and serve notice of the decision pursuant to section 37-133.

C. Except as provided in section 41-1092.08, subsection H, final decisions of the commissioner are subject to judicial review pursuant to title 12, chapter 7, article 6.

§ 37-607 Method of exchange; valuation

A. Exchange of state lands managed by the state land department may be initiated by the owner of the other lands proposed to be exchanged on application forms provided by the department.

B. The department, on determining that the proposed exchange presents obvious benefits to the applicable trust, shall appraise the values of all lands described in the application to establish the fair market value. The appraised value of state lands being considered for exchange shall, in the opinion of the department, be substantially equal to or less than the appraised value of the land offered by the applicant.

C. After completion of the requirements of subsection B of this section, the commissioner shall analyze the long-term potential of all the lands proposed to be exchanged and report his findings to the selection board. The commissioner shall consider at least the following criteria:

1. Proximity to existing and proposed development.

2. Potential zoning and topography of those lands.

3. The impact of paragraphs 1 and 2 on the lands proposed for exchange. Based on this analysis, the commissioner shall recommend approval of the exchange only if he finds that the potential for appreciation in value of the other lands is equal to or greater than the state lands, or that special circumstances make the exchange in the long-term interest of the trust.

D. In lieu of a written agreement between the owner of the permanent improvements and the applicant relieving this state, the department and the commissioner of all duty to compensate the owner for those improvements, the department shall appraise the permanent improvements on the state lands being exchanged, pursuant to section 37-322, and the applicant shall pay the appraised amount to the department on demand. The department shall pay the appraised amount to the owner of the improvements on the effective date of the exchange.

§ 37-608 Supplemental authority

The provisions of this article are supplemental to and in addition to the authority provided in chapter 3, article 2 of this title.

§ 37-609 Exchange of sovereign lands

A. For proper management of state land, the department may exchange the surface or subsurface rights and interests in sovereign lands of this state that are managed by the department for surface or subsurface rights and interests in federal lands, state lands of another state or lands owned by other agencies or subdivisions of this state.

B. The department may not exchange sovereign land of this state for other lands under this section unless:

1. The commissioner determines that the exchange is in the best interest of the state.

2. The commissioner determines by at least one independent appraisal that either of the following conditions apply to the exchange:

(a) The fair market value of the sovereign land of this state that is included in the proposed exchange is substantially equal to the fair market value of the other land that is included in the proposed exchange.

(b) The fair market value of the sovereign land of this state that is included in the proposed exchange is greater than the fair market value of the other land that is included in the proposed exchange and this state will be compensated for the difference in value with a cash payment to the department from the other party in the exchange.

C. At least sixty days before any exchange under this section, the department shall:

1. Publish a notice of the proposed exchange in a newspaper of general circulation in the county in which the majority of state land that is included in the exchange is located. A notice under this paragraph shall include:

(a) The identity of the parties to the exchange.

(b) A description of all property included in the exchange.

(c) The terms and conditions of the exchange.

(d) The address to which written comments on the exchange may be mailed for the commissioner's consideration. The comments must be mailed within thirty days after the date of the notice.

2. Give written notice of the proposed exchange to:

(a) The county or counties in which the state land included in the exchange is located.

(b) Any municipality in which the state land included in the exchange is located.

(c) Any person with an interest of record in the state land that is included in the exchange.

D. Notice given by the department pursuant to subsection C, paragraph 2 shall be by certified mail and include the information listed in subsection C, paragraph 1.

E. If the sovereign lands of this state that are included in the proposed exchange are located in another state, the notification requirements under subsection C shall be applied to the Arizona county that is nearest the lands.

F. In determining whether a proposed exchange is in the best interest of this state, the commissioner shall consider written comments received by the department pursuant to subsection C.

G. Land conveyed to this state pursuant to this section shall become sovereign land of this state on acceptance of title and recording.

H. Monies paid to the department pursuant to subsection B, paragraph 2, subdivision (b) shall be promptly transferred to the state treasurer for deposit in the appropriate fund.

§ 37-610 Disposition of surplus floodplain lands

A. If the department manages surplus floodplain lands acquired from the department of emergency and military affairs, the commissioner may transfer the land to an appropriate political subdivision of this state if the land will be used for public parks and recreation facilities.

B. The commissioner shall evaluate each request pursuant to this section and, if the commissioner determines that a transfer would serve the best interest of this state and the public in the area in which the surplus land is located, the commissioner shall recommend to the state selection board that the transfer be approved.

C. If the state selection board approves the transfer, the department shall offer a patent transferring the surplus land to the political subdivision. Any patent offered under this subsection shall require that the land immediately revert to this state if the land is not used for the public purpose for which it was conveyed.

Article 15 Acquisition of Lands by United States for Penal Purposes

§ 37-611 Acquisition of lands by United States for penal purposes

The consent of the state may be given pursuant to section 37-620.02 in accordance with the seventeenth clause, eighth section, of the first article of the Constitution of the United States to the acquisition by the United States by purchase, lease, condemnation or otherwise of any land in the state required for erection of a penitentiary, prison, honor farm, detention center or any correctional institution of any kind and other needful buildings or for any other penal or correctional institutions of the government of the United States.

§ 37-612 Concurrent jurisdiction of the United States over lands acquired for penal purposes; termination of jurisdiction

Concurrent jurisdiction over any land in the state heretofore or hereafter acquired by the United States for any of the purposes set forth in section 37-611 and over any public domain in the state reserved or used for penal purposes by the United States is ceded to the United States, but such jurisdiction shall continue no longer than the United States owns or leases the land or continues to reserve or use such public domain for penal purposes.

§ 37-613 Power of state to serve process upon land ceded United States for penal purposes

Any land over which exclusive or concurrent jurisdiction is ceded by the state to the United States, the state retains concurrent jurisdiction with the United States for serving process, civil or criminal, issuing under the authority of the state, or any courts, or judicial officers thereof, upon any person amenable thereto, within the limits of the land ceded in like manner as if no cession had taken place.

Article 16 Exchange of Road Rights-of-Way

§ 37-615 Exchange of road rights-of-way on state land; procedure; limitation and exceptions

A. The state land department and selection board, for reasons of proper management, control, protection, or public use of state lands, may exchange road rights-of-way over state lands managed by the state land department for road rights-of-way over any other land within the state. The exchange may be made for road rights-of-way over land owned or held by the United States or an agency thereof, other state agencies, counties or municipalities and privately owned lands.

B. The state land department shall adopt rules governing the application and procedure for exchange of road rights-of-way over state land. Such rules shall include the following requirements:

1. The application shall include:

(a) The name, age and residence of the applicant.

(b) A description of all road rights-of-way sought to be exchanged.

(c) A list of permanent improvements on the road rights-of-way to be exchanged.

(d) Any leasehold interest in the land affected by the proposed exchange.

(e) Accompanying agreements, if any, with the leaseholder or owner of improvements on the land affected by the proposed exchange.

2. Payment of fees prescribed for that purpose pursuant to section 37-107.

3. An application initiated by a private owner shall be accompanied by a deposit equal to the estimated cost of appraising the value of the road rights-of-way on any privately owned property to be exchanged.

4. Such additional requirements may be imposed as the state land department from time to time determines to be necessary.

C. The exchange of road rights-of-way over state lands shall be subject to the following requirements:

1. All road rights-of-way exchanged shall be of substantially equal value.

2. All road rights-of-way over state lands offered for trade pursuant to this section must be located in the same county as the road rights-of-way over lands offered to the state.

3. Prior to any exchange of road rights-of-way over state lands for road rights-of-way over privately owned lands, the state land department and selection board shall give thirty days' notice in writing to other interested state agencies, counties, municipalities, and leaseholders on such lands that are or may be affected by the trade.

4. Before any road rights-of-way over state land may be considered for exchange under the provisions of this article, the land shall be classified as suitable for such purposes in accordance with the provisions of section 37-212.

5. Any person adversely affected by such decision may appeal from the decision as provided in section 37-215.

D. Any person may, within ten days of the date of notice as provided herein, file a written protest of the exchange at the state land department offices at the state capitol upon forms provided by the state land department. Upon receipt of such a protest to a contemplated exchange pursuant to this section, the state land commissioner shall, not later than thirty days after receipt of the protest, hold a public hearing at the county seat of the county in which the state lands proposed to be exchanged are located to hear any and all matters properly subject to the proposed exchange. Notice of the public hearing shall be mailed to all protestants and published one time prior to the date of the hearing in a newspaper of general circulation in the county.

§ 37-616 Protest; public hearing; judicial review

A. A person interested in the exchange of any road rights-of-way may appear at any hearing on the exchange and enter a written protest as provided in section 37-604.

B. The state land commissioner shall render a decision regarding any such protest and serve notice of the decision in accordance with section 37-133.

C. Except as provided in section 41-1092.08, subsection H, final decisions of the commissioner are subject to judicial review pursuant to title 12, chapter 7, article 6.

§ 37-617 Method of exchange; valuation

A. Exchange of road rights-of-way over state lands managed by the state land department may be initiated by application of the owner of the road rights-of-way over other lands proposed to be exchanged upon forms provided by the state land department.

B. Upon the filing of an exchange application, the state land department shall immediately appraise the values of all road rights-of-way over lands described in the application to establish the full cash value thereof. The appraised value of road rights-of-way over state lands being exchanged shall, in the opinion of the state land department, be substantially the same as the appraised value of the road rights-of-way over land sought by the application to be exchanged for road rights-of-way over lands managed by the state land department.

C. The land department shall appraise the permanent improvements on the road rights-of-way over state lands offered in exchange in accordance with section 37-322 and the applicant shall pay the value thereof to the state land department upon demand, and the land department shall pay the same to the owner of said improvements on the effective date of the exchange or in lieu thereof the applicant shall submit an agreement between the owner of the improvements and the applicant relieving the state of Arizona and land department and commissioner of all duty to effect due compensation for such improvements to the owner thereof.

§ 37-618 Supplemental authority

The provisions of this article are supplemental to and in addition to the authority provided in chapter 3, article 2 of this title.

Article 17 Concurrent Jurisdiction With United States Over Certain Lands and Areas

§ 37-620 Vesting of concurrent criminal jurisdiction in the United States over certain lands and areas

A. Concurrent criminal jurisdiction over any lands in this state heretofore reserved from public domain or acquired by the United States as identified in subsection D of this section, and any additions made to such lands, is hereby vested in the United States on completion of the conditions set forth in subsection B of this section, except that the jurisdiction of this state over such lands shall continue.

B. Concurrent criminal jurisdiction vests as to the lands in each area identified in subsection D of this section when the United States submits to the governor of this state a formal written request for concurrent criminal jurisdiction accompanied by a satisfactory legal description and plat of the area, and on approval by the governor granting concurrent jurisdiction the legal description and plat shall be filed by the governor with the county recorder of each county in which the land is situated. This state may withdraw jurisdiction over any land or area three years after written notification by the governor to the United States secretary of the interior.

C. The concurrent criminal jurisdiction hereby vested continues only as long as the United States continues to own or control the lands within those areas. In the case of any lands included within the boundaries of the areas set forth in subsection D of this section that are not owned or controlled by the United States, the jurisdiction does not change by operation of this section.

D. The lands subject to this section are all those lands that are owned or controlled by the United States and that are now or hereafter included within the exterior boundaries of:

1. The national park service lands consisting of:

(a) Canyon de Chelly national monument.

(b) Casa Grande Ruins national monument.

(c) Chiricahua national monument.

(d) Coronado national memorial.

(e) Fort Bowie national historic site.

(f) Glen Canyon national recreation area.

(g) Grand Canyon national park.

(h) Hohokam Pima national monument.

(i) Hubbell Trading Post national historic site.

(j) Lake Mead national recreation area.

(k) Montezuma Castle national monument.

(l) Navajo national monument.

(m) Organ Pipe Cactus national monument.

(n) Petrified Forest national park.

(o) Pipe Spring national monument.

(p) Saguaro national monument.

(q) Sunset Crater national monument.

(r) Tonto national monument.

(s) Tumacacori national monument.

(t) Tuzigoot national monument.

(u) Walnut Canyon national monument.

(v) Wupatki national monument.

2. Those lands administered by the bureau of reclamation or its successor agency of the United States department of the interior consisting of:

(a) Davis dam.

(b) Glen Canyon dam.

(c) Hoover dam.

(d) Imperial dam.

(e) Laguna dam.

(f) Parker dam.

3. Lands administered by the United States department of defense or its successor land management agency consisting of:

(a) The Barry M. Goldwater range. This subdivision is effective only after a memorandum of understanding has been completed with the sheriff of a county that has territory within the Barry M. Goldwater range to address lead investigative agency responsibilities on specific crimes and other coordinating matters. For the purposes of this subdivision, the Barry M. Goldwater range is defined by the military lands withdrawal act of 1999 (P.L. 106-65) and federal register volume 66, number 231, Friday, November 30, 2001.

(b) The Yuma proving ground. This subdivision is effective only after a memorandum of understanding has been completed with the sheriff of a county that has territory within the Yuma proving ground to address lead investigative agency responsibilities on specific crimes and other coordinating matters.

§ 37-620.01 Concurrent jurisdiction over veterans administration properties; acceptance

A. If the administrator of the veterans administration of the United States desires, on behalf of the United States, to relinquish to this state any legislative jurisdiction over lands or interests in lands under the administrator's supervision or control in order to establish concurrent jurisdiction between the United States and this state pursuant to title 38, section 1004(g) or 5007, United States code, the administrator may file with the governor a written notice to that effect. The notice shall state the nature and extent of such jurisdiction to be relinquished to the state by specifying the subjects upon which the state may legislate and the lands or interests in lands affected.

B. This state may accept such jurisdiction upon the governor's signing a joint resolution adopted by the legislature. The joint resolution shall state the nature and extent of the jurisdiction to be accepted by this state by specifying the subjects upon which the state may legislate and the lands or interests in lands affected.

§ 37-620.02 State consent to acquisition of land by the United States for exclusive jurisdiction

Pursuant to article I, section 8, clause 17 of the Constitution of the United States, the consent of this state may be given to the acquisition of any other privately owned real property within this state by the United States only upon the governor's signing a joint resolution adopted by the legislature to that effect. The joint resolution shall recite the legal description of the land and the purposes to which the state consents that the property may be used.

§ 37-620.03 National monuments; catalog; attorney general; litigation

A. The department shall maintain a catalog of each existing or newly created national monument in this state. For each national monument, the department shall request from the federal government the following:

1. A detailed accounting of each individual item to be protected.

2. The precise global positioning system location of each item to be protected.

3. The square footage that each item to be protected occupies.

4. The total square footage of the parcel of land comprising the national monument.

5. A peer-reviewed justification for the protection of the object by the federal government.

B. The department shall determine whether the limits of a parcel comprising a national monument in this state are confined to the smallest area compatible with the proper care and management of the objects to be protected by the national monument.

C. If the department determines pursuant to subsection B of this section that the limits of a parcel comprising a national monument in this state are not confined to the smallest area compatible with the proper care and management of the objects to be protected by the national monument, the department shall notify the attorney general. On receipt of the notice, the attorney general may commence an action to confine the limits of the parcel comprising the national monument to the smallest area compatible with the proper care and management of the objects to be protected by the national monument.

Article 18 Interstate Compact for Jurisdiction on the Colorado River

§ 37-620.11 Enactment of compact

The interstate compact for jurisdiction on the Colorado river is enacted into law as follows:

Section I. Concurrent Jurisdiction

A. If conduct is prohibited by two adjoining party states, courts and law enforcement officers in either state who have jurisdiction over criminal offenses committed in a county where the Colorado river forms a common interstate boundary have concurrent jurisdiction to arrest, prosecute and try offenders for the prohibited conduct that is committed anywhere on the boundary water between the two states and concurrent jurisdiction to arrest offenders for prohibited conduct that is committed on any land mass within twenty-five air miles of the Colorado river or within twenty-five air miles of any lake that is formed by or is a part of the Colorado river.

B. This compact does not authorize:

1. Prosecution of any person for conduct which is lawful in the state where it was committed.

2. Any conduct prohibited by any party state.

Section II. Ratification

This compact is ratified by enactment of the language of this compact, or substantially similar language expressing the same purpose, by at least two states of which the Colorado river forms a common boundary.

Article 19 Holistic Resource Management

§ 37-620.21 Holistic resource management program

A. The state land commissioner may coordinate the development of a process of using holistic resource management planning methods to incorporate the critical habitat requirements of plant and animal species with the resource use requirements of this state. If developed, this planning process shall be used as a model for developing specific area plans and developing conservation agreements with the United States fish and wildlife service to alleviate the need for critical habitat designations in this state. In developing the planning process the commissioner may consult with:

1. Holistic resource management practitioners and experts.

2. Federal and state land and wildlife management agencies.

3. Natural resources commodity groups.

B. The commissioner may test the holistic resource management planning process developed under subsection A by developing a plan for at least two areas that are currently proposed as critical habitat for one or more species of concern. The commissioner may develop the plan in conjunction with:

1. Affected land owning and land management entities.

2. Lessees or permittees of land in the planning area.

3. Known land use groups in the planning area.

4. Natural resource conservation districts.

5. Environmental organizations that are incorporated under the laws of this state or that are qualified under section 501(c)(3) of the United States internal revenue code for federal income tax purposes.

C. If a test plan is developed, the commissioner and entities that are identified under subsection B shall select planning areas based on at least the following factors:

1. The planning area must be large enough in size to represent a management unit for purposes of logging, grazing, mining or other land use activities.

2. The planning area must contain proposed or designated critical habitat of the species of concern.

D. The state land department is the central repository for all holistic resource management plans that are developed pursuant to this section.

Chapter 3 Acts of Congress Relating to State and Federal Lands

Article 1 Carey Land Acts

§ 37-701 Acceptance of Carey land acts; state agency

The state accepts the conditions of the acts of Congress known as the Carey land acts, and the grants of land upon the conditions imposed by those acts. The selection, management and disposal of lands granted by those acts shall vest in the state land department.

§ 37-702 Application for selection of arid lands for irrigation projects or reclamation projects; proposal; deposit

A. Any person desiring to construct irrigation works or to reclaim lands under the provisions of this article shall file with the state land department an application for selection of the lands to be reclaimed. The application shall be accompanied by a proposal for complete reclamation of the lands so designated.

B. The proposal shall state:

1. The source and right of the water supply acquired or to be acquired.

2. The location and layout of the works constructed, in process of construction or proposed.

3. The maximum price and terms per acre at which perpetual water rights will be sold to settlers on the land to be reclaimed.

4. The maximum price per acre per annum for maintenance charges.

C. If the applicant is a corporation, the proposal shall state:

1. The purposes for which the corporation is organized.

2. The names and residences of its directors and officers.

3. The amount of its authorized and paid-up capital.

D. If applicant is not a corporation, the proposal shall set forth the names of the parties and such facts as will enable the commissioner to determine their financial ability to carry out the proposed enterprise.

E. A certified check in a reasonable sum required by the department, but not less than two hundred fifty dollars, shall accompany each proposal to be held as guaranty for the execution of the contract with the state in accordance with its terms, if the proposal is approved by the department.

§ 37-703 Processing of proposal by land department; processing by director of water resources; approval or disapproval of application

A. The state land department shall determine:

1. Whether the land applied for can be reclaimed by means of the proposed irrigation project.

2. Whether according to records of the department of water resources there are sufficient water rights vested in the applicant, or sufficient unappropriated water in the source of supply.

3. Whether the capacity of the project is adequate.

4. Whether the proposed cost of construction is reasonable, and the lands proposed to be irrigated are desert in character and may properly be set apart.

B. The application for selection of lands shall then be submitted to the director of water resources who shall make a written report and make recommendations upon the application to the land department. The director of water resources shall make a survey or examination to provide an accurate report if requested by the department to do so.

C. If the application is approved, the state land department shall file in the local land office a request for withdrawal from entry of the land described in the application. If disapproved, the parties shall be notified and given reasons for the disapproval. The parties shall have sixty days in which to submit another proposal, or further time if allowed by the department.

§ 37-704 Contract; contents; bond of contractor

A. Upon approval of the application and withdrawal of the land by the department of the interior, the state land department shall enter into a contract with the applicant containing complete maps and specifications of the proposed project. The contract shall state:

1. The maximum price per acre at which perpetual water rights shall be sold to settlers.

2. The maximum cost per annum for maintenance charges.

3. The price and terms upon which the state is to dispose of the land to settlers.

B. The contract shall provide that the sale to a settler of a tract of land with a permanent water right shall include an interest in the project and any power plants that may be built equal to the proportion that the tract of land purchased by him bears to the entire tract to be reclaimed by the irrigation project, and that upon full payment of the purchase price of the land, capital stock of the corporation, representing the interest, shall be issued and delivered to the settler by the person constructing the project. The price and terms of water rights, maintenance charges, and land, shall be reasonable.

C. The contracting party may provide in the contract with the applicant for the land and permanent water right the amount of the annual water supply, and may provide rules and regulations for the use and distribution of the water, to be approved by the department.

D. The contractor shall make and deliver to the state a bond in a penal sum equal to five per cent of the estimated cost of the project but not exceeding fifty thousand dollars for the faithful performance of the contract.

§ 37-705 Contract provisions as to beginning and completion dates; forfeiture for failure to prosecute work

A. The contract with the state shall provide that the work shall begin within six months from the date of the contract, and shall be prosecuted diligently and continuously to completion, and that cessation of work for a period of six months shall be a ground of forfeiture of all rights under the contract, upon which the state may obtain a judgment of forfeiture and recover the penal sum named in the bond. No property or right which was vested in the applicant or contractor at the date of the contract shall be forfeited. In such cases the forfeiture shall extend only to the portions of the system unconstructed at the time of default, and to the penalty of the bond.

B. Upon failure of the contractor to comply with any requirement of his contract, the state land department shall notify the contractor that, unless he complies with such requirements within sixty days from the date of the notice, the bond and contract shall be forfeited to the state, and, if not complied with, the department will advertise for proposals to complete the work, and may contract with the bidder who will pay the original contractor the highest amount for the works partially completed to complete the works as stated in the original contract. If no bid is received the department shall proceed to collect the bond.

§ 37-706 Persons eligible to apply for entry; limitation on area; contents of application; price of lands; disposition of monies received

A. Any citizen of the United States, or any person who has declared his intention to become a citizen, over the age of eighteen years, may make application to enter any of the lands not exceeding one hundred sixty acres, under the regulations of the department of the interior and the state land department.

B. The application shall be accompanied by a certified copy of a contract for a perpetual water right, made by applicant with the person authorized to furnish water for reclamation of the lands, together with twenty-five cents per acre for the land applied for, to be returned if the application is not allowed, and the application shall contain the declaration that applicant will settle upon and improve the land. If the application is allowed, the applicant shall be issued a certificate of the location.

C. If the contractor fails to furnish water to any settler under the provisions of his contract, the state shall refund to the settler all payments he has made to the state.

D. The state land department shall dispose of all lands accepted by the state at a price not to exceed fifty cents per acre, twenty-five cents to be paid at the time of entry and the remainder at the time of making final proof by the settler. No settler shall be entitled to make more than one entry. Settlers shall also pay, at the time of making final proof, whatever additional amount per acre, if any, which the state may be required to pay to the United States for the land so entered.

E. All monies received for the sale of lands, except those required to be paid to the United States, shall be deposited, pursuant to sections 35-146 and 35-147, in the appropriate fund of the state.

§ 37-707 Procedure upon completion of project by settler; application for federal patent; grant of state patent to settler

Upon completion of the project or any section thereof, the contractor shall notify the state land department that he is prepared to supply water to the land designated in his application, or any particular tract thereof, whereupon the department shall request the department of the interior that a patent to such land be issued to the state, and notice shall be given to each settler of that fact. Within three years thereafter, each settler shall appear before the state land department and make final proof of reclamation, settlement and occupation, and make final payment for the land entered upon by him. Upon final payment the state, through the state land department, shall issue to the settler a patent for the land entered upon.

§ 37-708 Water rights appurtenant to lands; lien; foreclosure and redemption

A. The water rights shall attach and become appurtenant to the land when the title passes from the United States to the state. Any person furnishing water for any tract of land so acquired shall be entitled to receive directly, when due under the water contracts, all payments upon the land, and shall have a first lien on the water rights, which shall be prior to other liens created or attempted to be created by the owner or possessor of the land. The lien shall remain in force and effect until the last deferred payment for the water rights is fully paid and settled according to the terms of the contract under which the water rights were acquired. The contract for the water rights upon which the lien is founded shall be recorded in the office of the county recorder.

B. Upon default of any deferred payment secured by lien, the lienholder may foreclose the lien as mortgages are foreclosed, and the settler may within one year from the date of foreclosure redeem by paying the deferred payments, with interest at not to exceed ten per cent per annum, accrued interest and cost of maintenance.

C. The contractor shall have a like lien on and against the separate legal subdivisions of land reclaimed upon the interest therein of the settler for the actual cost and necessary expenses of reclamation, and interest thereon at the rate of six per cent per annum, from the date of reclamation.

§ 37-709 Maps of project; right of easement reserved

A. The maps of the lands shall show the location of the irrigation project approved in the contract. Certified copies of the maps shall be filed and recorded in the office of the county recorder in each of the counties into which the irrigation project, or the lands to be reclaimed thereby, extend.

B. The lands filed upon by settlers shall be subject to rights of way and easements of the canals, reservoirs, dams and irrigation projects to the extent specified in the contract, and of other structures connected with the acquisition and control of water power to be used, directly or indirectly, for the purpose of the irrigation project.

§ 37-710 Reservation of mineral rights in school lands sold

A. The additional grant of numbered school sections, mineral in character, made to the state by the act of Congress approved January 25, 1927 is accepted.

B. All sales, grants, deeds or patents for any lands so granted shall be subject to and contain a reservation to the state of all minerals in the lands so sold, granted, deeded or patented, together with the right to explore for, mine and remove them.

Article 2 Taylor Grazing Act

§ 37-721 Acceptance of Taylor grazing act, amendment of enabling act and other federal laws relating to exchange of lands

A. The state accepts the provisions of the act of Congress of June 28, 1934, as amended, known as the Taylor grazing act, and the provisions of the act of Congress of June 5, 1936 amending section 28 of the enabling act, and all other applicable acts of Congress which are enacted relating to the exchange of state land for federally owned land.

B. The state land department may cooperate with the federal government in the administration of the Taylor grazing act and other applicable acts of Congress relating to the exchange of state lands for federal lands whenever the interest of the state can best be served thereby.

§ 37-722 Authority of land department and selection board to make exchanges of state owned for federally owned land

The state land department and the selection board may effect exchanges of state owned land for federally owned land, and the department and the selection board may do all things necessary or required to be done by the state in order to comply with the provisions of the Taylor grazing act as amended, section 28 of the enabling act as amended, or any other act of Congress relating to the exchange of lands and any rules or regulations promulgated pursuant thereto. Such exchanges shall be made in the same manner and under the same rules and regulations as required for the selection of lands under the provisions of the enabling act, as amended, provided that if the federal government retains the mineral rights on the land it exchanges the state shall retain the mineral rights on the land it exchanges.

§ 37-723 Distribution of money received from United States; appropriations to counties

A. All monies received by the state as its distributive shares of the amounts collected by the United States government under the provisions of the act of Congress of June 28, 1934 known as the Taylor grazing act, and acts amendatory thereof, shall be deposited with the state treasurer. The treasurer shall distribute the funds to the several counties of the state in which the public lands are located.

B. The state treasurer shall ascertain from the proper United States officers having the records of receipts from grazing permits and leased public lands the amount of receipts from sources in this state for each year for which money is received by the state. A separate account shall be kept of the amount received from each grazing district and lease of public lands, and the state treasurer shall pay the county in which the grazing district or leased public land is located. If the grazing district or leased land lies in more than one county, each county shall receive the proportional part of the amount as the area of the grazing district or leased public land included within the boundary of the county bears to the total area of the grazing district or lease.

C. For the purposes of this section the monies deposited with the state treasurer as provided by subsection A are appropriated to the several counties of the state in the proportions in which the counties are entitled thereto, as shown by the records of the United States officers and transmitted to the state treasurer.

§ 37-724 Receipts from lease of public lands

All monies received from leases of public lands within any county shall be placed to the credit of the school district within the county in which the land lies. If the lands do not lie within a school district, the monies shall be placed to the credit of the general school fund of the county.

§ 37-725 Receipts from grazing district fees; district treasurer; duties

A. All monies received from grazing fees of a grazing district regularly established and including public lands within the county shall be placed to the credit of a special fund designated the range improvement fund of the grazing district which shall be given a number.

B. The county treasurer of the county in which such public lands are located shall be the ex officio district treasurer of any federal grazing district located wholly or in part within the county, and shall be liable upon his official bond for the proper care and distribution of the monies. He shall collect, receive, receipt and account for all monies from such source, and shall pay it upon the warrant of the grazing district signed by the chairman of the board of district advisors and countersigned by the vice-chairman thereof and the regional grazier in administrative charge of the district.

§ 37-726 Expenditure of grazing fees of district; purposes authorized

The monies from grazing fees of grazing districts shall be expended within the county as the board of district advisors directs for range improvements and maintenance thereof, predatory animal control, rodent control, poisonous or noxious weed extermination, or the purchase or rental of lands within the county which will benefit the grazing district or the part thereof within the county.

Article 3 Federal Mineral, Oil and Gas Lease Act

§ 37-741 Public roads and public education fund; purposes; approval of expenditures by legislature; distribution

A. There is created a special fund known as the state public roads and public education fund. There shall be deposited in the fund all monies received by the state as its distributive shares of the amounts collected by the United States government under the provisions of the act of Congress of February 25, 1920, chapter 85 (41 Stat. 437) and acts amendatory thereof, entitled, "an act to promote the mining of coal, phosphate, oil, oil shale, gas and sodium on the public domain".

B. No monies shall be expended from the fund created by subsection A of this section without prior approval therefor by an act of the legislature. The legislature may authorize expenditures from the fund for any of the following purposes:

1. The construction and maintenance of public roads.

2. The support of public schools or other public educational institutions.

C. At the beginning of each fiscal year, one-half of the balance in the state public roads and public education fund shall be transferred to the state highway fund to be expended for secondary roads and one-half shall be transferred to the permanent state school fund and shall be administered as provided by section 37-521.

Chapter 4 Acquisition of Private Real Property by State or Political Subdivision

Article 1 In General

§ 37-801 Duty to disclose names of persons having a beneficial interest in real property

When the state or any political subdivision thereof purchases or acquires an option to purchase real property, or takes official preliminary steps by resolution of an executive commission resolving to purchase or acquire an option to purchase real property or an easement thereon, or files an action to acquire title to real property or an easement thereon by condemnation, the full names and addresses of all persons having a beneficial interest in such real property shall be disclosed to the person in charge of such department or agency of the state or political subdivision thereof, acquiring or attempting to acquire title to such real property, or an option therefor, when requested in accordance with the provisions of this section. Upon receipt of a written demand therefor, signed by the person in charge of such department or agency of the state or political subdivision thereof, served in person by his authorized agent to which has been attached a certified copy of the resolution referred to in this section, any person serving as a fiduciary in relation to such real property for any or all of the persons having a beneficial interest in such real property or any person who holds such property in his name in trust or otherwise for the benefit of any or all of such persons having a beneficial interest in the real property shall, upon presentment of such demand, disclose the names and addresses of all persons having a beneficial interest in the real property to the person making such demand on behalf of the department or agency of the state or political subdivision thereof.

§ 37-802 Disposition of real property by state agency; alternative fuel delivery systems; definition

A. Unless another procedure is prescribed by law, the director or other chief administrative officer of a state agency may lease or convey real property or any right, title or interest in real property as prescribed by this section if the director or officer determines that it is no longer needed or used for public purposes.

B. Unless the property is subject to a right of reversion to a previous owner or the previous owner's successors in interest, the director or other chief administrative officer of a state agency may lease or convey:

1. Real property to another agency of this state, any county, municipality or other political subdivision or any school district of this state without the necessity of a public sale if the real property will be used for an alternative fuel delivery system. The transferee agency shall pay the transferor agency for a conveyance made pursuant to this section based on a current appraisal establishing the fair market value of the property.

2. Other marketable real property to the highest and most responsible bidder at a public auction or by direct sale or exchange after at least thirty days' notice in a newspaper of general circulation in the county in which the property is located. At least two independent appraisals are required for property that is offered, and the property shall not be offered or conveyed for less than the amount of the low appraisal. All purchase offers are public, and any person may submit a subsequent offer that matches or exceeds a previous purchase offer.

C. The sale shall be for cash or on terms of at least twenty percent down payment with the balance payable in annual amortized installments for ten years, the unpaid balance to bear interest at a rate determined by the director or other chief administrative officer of the state agency.

D. The director or other chief administrative officer of a state agency may execute all deeds or conveyances necessary to lease or convey any real property or interest in the real property to be leased or conveyed under this section and may assess a fee for the costs of preparing and executing any lease or conveyance under this section. The director or officer may insert in any deed or conveyance conditions, covenants, exceptions and reservations the director or officer considers to be in the public interest or may convey in fee simple absolute.

E. A conclusive presumption exists in favor of any purchaser for value and without notice of any real property or interest in the real property leased or conveyed pursuant to this section that the agency acted within its lawful authority in acquiring the property and that the director or other chief administrative officer of the state agency acted under lawful authority in executing any deed, conveyance or lease authorized by this section.

F. Subsection B of this section does not apply to any lease or sublease of state hospital lands or buildings that is executed by the director of the department of health services or the director's designee for the benefit of mentally ill persons in this state. The director of the department of health services or the director's designee shall ensure that the department receives the fair rental value for the leased property.

G. For the purposes of this section, "alternative fuel delivery system" means any facility that provides for the fueling of an alternative fuel vehicle.

§ 37-803 Disposition of real property by state agency

A. Unless another procedure is prescribed by law, the director or other chief administrative officer of a state agency may dispose of real property or any right, title or interest in real property as prescribed by this section if the director or officer determines that the real property is no longer needed or used for public purposes by that agency.

B. Unless the property is subject to a right of reversion to a previous owner or the previous owner's successors in interest, the director or other chief administrative officer of a state agency may convey:

1. The real property to an agency of the federal government, to another agency of this state or to any county, municipality, school district or other political subdivision of this state or charter school in this state without the necessity of a public sale if the director or officer considers the conveyance to be in the public interest and if the real property will be used for a specific purpose in the public interest. The transferee agency shall pay the transferor agency for such a conveyance based on an appraisal prepared within the last one hundred eighty days by a certified real estate appraiser establishing the fair market value of the property to be conveyed.

2. Other marketable property to the highest and most responsible bidder at a public auction or by direct sale or exchange after at least thirty days' notice in a newspaper of general circulation in the county in which the property is located. At least two independent appraisals are required for property that is offered and the property shall not be offered or conveyed for less than or the amount of the low appraisal. All purchase offers are public and any person may submit a subsequent offer that matches or exceeds a previous purchase offer.

C. The sale shall be for cash or on terms of not less than twenty percent down payment with the balance payable in annual amortized installments for ten years, the unpaid balance to bear interest at a rate determined by the director or other chief administrative officer of the state agency.

D. The director or other chief administrative officer of a state agency may execute all deeds or conveyances necessary to convey any real property or interest in the real property to be conveyed under this section and may assess a fee for the costs of preparing and executing any conveyance under this section. The director or officer may insert in any deed or conveyance such conditions, covenants, exceptions and reservations as the director or officer considers to be in the public interest or may convey in fee simple absolute.

E. A conclusive presumption exists in favor of any purchaser for value and without notice of any real property or interest in the real property conveyed pursuant to this section that the agency acted within its lawful authority in acquiring the property and that the agency director or other chief administrative officer of the state agency acted under lawful authority in executing any deed, conveyance or lease authorized by this section.

F. The agency may adopt rules for using licensed real estate brokers to assist in any disposition of property under this section. The director or other chief administrative officer of the state agency may pay a commission, from proceeds received under this section, to a broker who provides the purchaser unless the broker is the purchaser or lessee or the purchaser is another governmental agency.

G. Subsection B of this section does not apply to any lease or sublease of state hospital lands or buildings that is executed by the director of the department of health services or the director's designee for the benefit of mentally ill persons in this state. The director of the department of health services or the director's designee shall ensure that the department receives the fair rental value for the leased property.

§ 37-804 Payment of outstanding taxes, penalties and interest on acquiring property

A. If this state or any agency or instrumentality of this state acquires real or personal property, whether by purchase, exchange, condemnation, gift or otherwise, the entity acquiring the title to the property may require the owner of subject property to provide sufficient funds to pay to the county treasurer any taxes on the property that were unpaid as of the date of acquisition, including penalties and interest, prorated to reflect the area of the acquisition.

B. The lien for unpaid delinquent taxes, penalties and interest on property acquired by this state:

1. Is not abated, extinguished, discharged or merged in the title to the property.

2. Is enforceable in the same manner as other delinquent tax liens.

Chapter 5 State Claims to Public Lands

Article 1 General Provisions

§ 37-901 Definitions

In this chapter, unless the context otherwise requires:

1. "Board" means the public lands board of review.

2. "Public lands" means all lands within the exterior boundaries of this state except lands:

(a) To which title is held by any natural person, corporation, company, partnership, firm, association, society or any other entity.

(b) Which are owned or held in trust by this state or any political subdivision of this state, including leased school or university land.

(c) Lands which are located within and meet the standards and purposes of congressionally authorized national parks, monuments, national forests and wildlife refuges and such other lands acquired by purchase, exchange, gift or eminent domain consented to by the legislature.

(d) Which are controlled by the United States department of defense, department of energy or bureau of reclamation and which were acquired by consent of the legislature and which meet the standards and purposes for which control was authorized.

(e) Which are held in trust for Indian purposes or which are Indian reservations.

§ 37-902 Public lands; public policy; state land department

A. The department shall hold the public lands of this state in trust for the benefit of the people of this state and shall manage them in an orderly and beneficial manner consistent with the public policy declared in subsection B.

B. The department shall administer the public lands of this state in such a manner as to conserve and preserve natural resources, wildlife habitat, wilderness areas and historical sites and artifacts and to permit the development of compatible public uses for recreation, agriculture, ranching, mining and timber production and the development, production and transmission of energy and other public utility services under principles of multiple use which provide the greatest benefit to the people of this state.

C. Subject to existing rights, all public land in this state and all minerals not previously appropriated to private ownership are the property of this state and subject to its jurisdiction and control.

D. Any public lands within this state administered by the United States under treaties or interstate compacts shall continue to be administered by this state in conformance with the treaties or compacts.

E. Until equivalent measures are enacted by this state, the rights and privileges of the people of this state under the national forest reserve transfer act, 16 U.S.C. sec. 471 et seq., the general mining laws, 30 U.S.C. sec. 21 et seq., the Taylor grazing act, 43 U.S.C. sec. 315 et seq., the desert land act, 43 U.S.C. sec. 321 et seq., the Carey act, 43 U.S.C. sec. 641 et seq., the public rangelands improvement act, 43 U.S.C. sec. 1901 et seq. and all rights-of-way and easements for public utilities are preserved under the administration of this state.

§ 37-903 State land commissioner; powers; duties

A. The commissioner may:

1. With the approval of the board, promulgate rules and regulations deemed necessary to manage the public lands in an orderly and beneficial manner according to this chapter.

2. Contract for or employ professional and clerical personnel deemed necessary to carry out his functions under this chapter.

3. Convey, lease or permit the use of public lands to the same extent or in the same manner as the public lands are conveyed, leased, licensed or permitted to be used by the federal government or any of its agencies.

B. The commissioner shall deposit, pursuant to sections 35-146 and 35-147, all fees, rents, royalties or other monies paid to this state for purposes of public lands, except for state trust lands, in the state general fund.

§ 37-904 Public lands board of review; members; powers and duties; staff and officers; service of process

A. There is established a public lands board of review consisting of the following members:

1. State land commissioner.

2. Director of environmental quality.

3. State geologist.

4. Director of the Arizona state parks board.

5. Director of the department of transportation.

6. Deputy state forester.

7. Director of water resources.

8. Director of the Arizona game and fish department.

9. As provided in subsection F, the chairman of the board of supervisors of a county in which public lands are located.

10. One county supervisor, appointed by the governor to serve at the pleasure of the governor.

B. The board shall elect one of its members to serve as chairman. The chairman shall call meetings of the board and prescribe the time and place of each meeting.

C. Members of the board are not eligible to receive compensation but are eligible for reimbursement of expenses pursuant to title 38, chapter 4, article 2.

D. The board:

1. Shall review and approve or disapprove all rules and regulations proposed by the commissioner under this chapter.

2. May review any decision of the commissioner relating to public lands under this chapter and affirm, modify or reverse the decision.

E. The state land department shall provide the administrative staff and offices needed by the board, and the state land commissioner shall be deemed the clerk of the board upon which notices of appeal and other process shall be served.

F. The chairman of the county board of supervisors of a county in which public lands are located and which are the subject of the board action shall serve as a member of the board for the purposes of the action.

§ 37-905 Appeal of commissioner's decision; board of review; procedures; decision; further appeal

A. Any person who is aggrieved by a decision of the commissioner made pursuant to this chapter may appeal to the board by letter within thirty days after the date of the decision from which the appeal is taken.

B. To have the effect of commencing an appeal as provided for in subsection A, a letter is required to:

1. Identify the decision from which the appeal is taken.

2. State legal grounds for the appeal.

3. List facts to support the grounds for the appeal.

4. Provide any other information specified by the board.

C. Upon receipt of the letter of appeal, the board may:

1. Order the appeal dismissed if it appears to lack merit.

2. Set a date for a hearing on the appeal not more than forty-five days nor less than fifteen days after receipt of the letter of appeal. The board shall notify the commissioner and the person appealing of the date, time and place of the hearing. The board shall conduct the hearing in an informal manner.

D. At the hearing the commissioner or his representative shall present the facts and reasons for reaching the decision being appealed. The person appealing or his representative may present facts and reasons supporting the appeal. If the person appealing or his representative is not present, the board may consider the information set forth in the letter of appeal.

E. After the hearing, if held, the board may dismiss the appeal or take any other action which the board finds to be reasonable and proper. The board shall issue its order as soon as practicable after conducting the hearing.

F. The order of the board under this section is a final decision in a contested case and is subject to judicial review pursuant to title 41, chapter 6, article 10.

§ 37-906 Public lands; disposal; use; written authorization required

A. After January 1, 1980 no sale, conveyance or other disposal of public lands may be authorized by the commissioner unless specifically authorized by law by the legislature.

B. Except as authorized by this chapter or by the commissioner pursuant to law, any sale, lease, exchange, encumbrance or other disposal of any parcel of or interest in the public lands is void.

C. Any person who intends to perform or carry out any act with respect to the use, management or disposal of any public lands under any statute, ordinance, regulation, custom or usage of the United States or otherwise shall obtain written authorization from the commissioner confirming or approving the act. The commissioner shall give the written authorization only as permitted under this chapter.

D. Any person who does not obtain written authorization as required under subsection C may be enjoined in an action brought by the attorney general from performing or continuing to carry out any act respecting the use, management or disposal of any public lands.

E. Any person who receives any money or other consideration for any purported sale or other disposition of any public lands which was made in violation of this chapter is liable to this state for that money or the value of any other consideration. The money or value of any other consideration may be recovered for this state in an action brought by the attorney general.

§ 37-907 Federal lands acquired without legislative consent; placement on tax rolls

All federal lands acquired before the effective date of this section without consent of the legislature through gift, purchase, exchange or eminent domain shall be placed on the general tax rolls of the counties of this state in the name of the grantor of the respective transactions. Such property is subject to taxation in the same manner as like property from and after January 1, 1981 unless prior to January 1, 1981 the legislature specifically approves and consents to federal ownership of the lands.

§ 37-908 Powers and duties of attorney general

The attorney general may initiate or defend an action commenced in any court to carry out or enforce this chapter or seek any appropriate judicial relief to protect the interests of this state. Enforcement of this chapter rests exclusively with the attorney general.

§ 37-909 State payments to counties

A. A county receiving payments from the federal government or any federal agency under 31 United States code section 1601 et seq., whose payments are reduced due to action taken by this state under this article shall be reimbursed by the state treasurer from the state general fund in the total amount of the reduced revenues.

B. Prior to receiving any amount from the state treasurer, the board of supervisors of an affected county shall submit to the state treasurer, on a form provided by the state treasurer, the following information:

1. The acreage and location of the land involved.

2. The total amount of revenue received from the federal government under 31 United States code section 1601 et seq., for the prior fiscal year.

3. The total amount of revenue received from the federal government under 31 United States code section 1601 et seq., for the current fiscal year.

4. The total amount of revenue lost by the county during the current fiscal year due to action taken under this article.

C. The state treasurer, after verifying the information submitted, shall draw a warrant on the state general fund and send the warrant to the county which submitted the information under subsection B.

D. A county shall not receive an amount from the state treasurer that, when combined with the amount received from the federal government, exceeds the total amount the county would have been eligible for under 31 United States code section 1601 et seq., during the same period of time.

Article 2 Rights-of-Way Across Public Lands

§ 37-931 Claims of right-of-way under revised statute 2477

A. This state, on behalf of itself and its political subdivisions, asserts and claims rights-of-way across public lands under section 8 of the mining act of 1866, reenacted and recodified as Revised Statute 2477; 43 United States Code section 932, acquired from and after its effective date through October 21, 1976, the date of its repeal, by authority of the department of the interior and related agencies appropriations act, 1997, section 108, enacted by the omnibus consolidated appropriations act, 1997 (P.L. 104-208; 110 Stat. 3009). These rights-of-way across public lands may have been acquired in any manner authorized by the law of the United States, the Territory of Arizona or this state, including:

1. The use by this state or a political subdivision of this state with the intention of establishing a public highway over public lands.

2. The construction or maintenance of a public highway over public lands.

3. The inclusion of a legally described right-of-way across public lands in a state, county or municipal plat or map of public roads.

4. The expenditure of public monies on the highway.

5. The execution of a memorandum of understanding or other agreement with any agency of the United States government that recognizes the right or obligation of this state or a county, city or town of this state to widen or maintain a highway or a portion of a highway.

6. Any other affirmative act by this state or a county, city or town of this state, consistent with federal, territorial or state law, indicating acceptance of a right-of-way across public lands.

7. The use by the public for a period required by law.

B. This state does not recognize or consent, and has not consented, to the exchange, waiver or abandonment of any Revised Statute 2477 right-of-way across public lands unless by formal, written official action that was taken by the state, county or municipal agency or instrumentality that held the right-of-way across public lands and that was recorded in the office of the county recorder of the county in which the public lands are located. No officer, employee or agent of this state or a county, city or town of this state has or had authority to exchange, waive or abandon a Revised Statute 2477 right-of-way across public lands in violation of this subsection, and any such purported action was void when taken unless later ratified by official action in compliance with this subsection.

C. The failure to conduct mechanical maintenance of a Revised Statute 2477 right-of-way across public lands does not affect the status of the right-of-way across public lands as a highway for any purpose of Revised Statute 2477.

D. The omission of a Revised Statute 2477 right-of-way across public lands from any plat, description or map of public roads does not waive or constitute a failure to acquire a right-of-way across public lands under Revised Statute 2477.

E. For the purposes of this section:

1. The extent of a Revised Statute 2477 right-of-way across public lands is the dimension that is reasonable under the circumstance.

2. A Revised Statute 2477 right-of-way across public lands includes the right to:

(a) Widen the highway as necessary to accommodate increased public travel and traffic associated with all accepted uses.

(b) Change or modify the horizontal alignment or vertical profiles as required for public safety and contemporary design standards.

3. The public has the right to use a Revised Statute 2477 right-of-way across public lands to access public lands.

4. If privately owned land is completely surrounded by or adjacent to public lands, the landowner has the right to use a Revised Statute 2477 right-of-way across public lands to access that land.

5. A Revised Statute 2477 right-of-way across public lands shall be closed only by order of a court of competent jurisdiction or the proper completion of an administrative process established for the abandonment, maintenance, construction or vacation of a public right-of-way otherwise allowed by law.

F. This section does not affect the inclusion or exclusion of, or the obligation of maintaining, any highway, road, street or route in any system of state, county or municipal streets, roads or highways. The inclusion of any highway, road, street or route in the state, county or municipal system shall be solely in accordance with other law.

G. This section does not:

1. Apply to any Revised Statute 2477 right-of-way across private property.

2. Impair, modify or otherwise affect any private property rights in effect on July 3, 2015. Any claim, determination or identification of a right-of-way across public lands pursuant to this section does not establish prior rights for determining financial or legal responsibility for taking any private property rights, in whole or in part. All presumptions and interpretations of fact and law relating to a claim, determination or identification of a right-of-way across public lands pursuant to this section shall be in favor of preserving private property rights.

Chapter 7 State Claims to Streambeds

Article 1 General Provisions

§ 37-1101 Definitions

In this chapter, unless the context otherwise requires:

1. "Arizona navigable stream adjudication commission" or "commission" means the Arizona navigable stream adjudication commission established by section 37-1121.

2. "Bed" means the land lying between the ordinary high watermarks of a watercourse.

3. "Highway for commerce" means a corridor or conduit within which the exchange of goods, commodities or property or the transportation of persons may be conducted.

4. "Man-made water conveyance system" means:

(a) An irrigation or drainage canal, lateral canal, ditch or flume.

(b) A municipal, industrial, domestic, irrigation or drainage water system, including dams, reservoirs and diversion facilities.

(c) A channel or dike that is designed, dedicated and constructed solely for flood control purposes.

(d) A hydropower inlet and discharge facility.

(e) A canal, lateral canal, ditch or channel for transporting central Arizona project water.

5. "Navigable" or "navigable watercourse" means a watercourse that was in existence on February 14, 1912, and at that time was used or was susceptible to being used, in its ordinary and natural condition, as a highway for commerce, over which trade and travel were or could have been conducted in the customary modes of trade and travel on water.

6.  "Ordinary high watermark" means the line on the banks of a watercourse established by fluctuations of water and indicated by physical characteristics, such as a clear natural line impressed on the bank, shelving, changes in the character of the soil, destruction of terrestrial vegetation or the presence of litter and debris, or by other appropriate means that consider the characteristics of the surrounding areas. Ordinary high watermark does not mean the line reached by unusual floods.

7. "Public entity" means the United States and its agents, this state, a county, city or town, a county flood control district or any other entity established under title 48.

8. "Public trust land" means the portion of the bed of a watercourse that is located in this state and that is determined to have been a navigable watercourse as of February 14, 1912. Public trust land does not include land held by this state pursuant to any other trust.

9. "Public trust purposes" or "public trust values" means commerce, navigation and fishing.

10. "Riparian area" means a geographically delineated area with distinct resource values, that is characterized by deep-rooted plant species that depend on having roots in the water table or its capillary zone and that occurs within or adjacent to a natural perennial or intermittent stream channel or within or adjacent to a lake, pond or marsh bed maintained primarily by natural water sources. Riparian area does not include areas in or adjacent to ephemeral stream channels, artificially created stockponds, man-made storage reservoirs constructed primarily for conservation or regulatory storage, municipal and industrial ponds or man-made water or effluent transportation, distribution, off-stream storage and collection systems.

11. "Watercourse" means the main body or a portion or reach of any lake, river, creek, stream, wash, arroyo, channel or other body of water. Watercourse does not include a man-made water conveyance system described in paragraph 4 of this section, except to the extent that the system encompasses lands that were part of a natural watercourse as of February 14, 1912.

§ 37-1102 Trust advocate

In all activities and proceedings under this chapter, the commissioner shall:

1. Act as an advocate for the public trust.

2. Act diligently to promote trust interests.

3. Challenge or defend commission decisions as the commissioner considers necessary to protect trust interests.

Article 2 Determining Navigability

§ 37-1121 Arizona navigable stream adjudication commission

A. The Arizona navigable stream adjudication commission is established through June 30, 2028 as a separate agency and independent of the state land department. The commission consists of five persons, not more than three of whom are from the same political party, who are appointed by the governor pursuant to section 38-211. The terms of office of members of the commission end on July 1, 2028. Persons who are appointed to the commission must be well-informed on issues relating to rivers and streams in this state. The commission shall select a presiding officer from among its members.

B. Members of the commission are public officers for the purposes of title 38, chapter 3, article 8 and title 38, chapter 3.1. A person who has advocated for or expressed a desire that a watercourse in this state be determined to have been navigable or nonnavigable may not serve as a commission member. A commission member who is a witness, gives evidence or makes statements of personal knowledge of the characteristics of navigability of a watercourse for the commission's consideration shall not participate as a commission member in proceedings relating to that watercourse. A commission member shall not:

1. Have any bias regarding the possible navigability of any watercourse.

2. Own, obtain a significant portion of income from or claim any ownership or possessory interest in lands affected by this chapter.

3. Directly or indirectly receive a significant portion of income from a person who claims an ownership or possessory interest in lands affected by this chapter or from a person who obtains a significant portion of income from such lands or shall not have been employed by such persons within two years before or be employed by such persons within two years after the commission member's term of office.

C. Funding for the commission and its necessary and reasonable expenses, including contracting for private services, shall be provided from legislative appropriations as may be necessary for the commission to fulfill its responsibilities. All unexpended and unencumbered monies appropriated to the commission revert to the state general fund on July 1, 2028.

D. The governor, on good cause shown, may remove a member for neglect of duty or misconduct or malfeasance in office. On removal, the governor shall file with the secretary of state a complete statement of all charges made against the member, the governor's findings and a complete record of the disciplinary proceedings conducted with respect to the removal.

E. Members are eligible to receive compensation pursuant to section 38-611 for service on the commission, unless a member who is otherwise employed as a public officer is prohibited from receiving additional compensation.

F. The commission shall maintain its principal office at the state capital but may hold meetings or hearings any place in this state. The commission shall meet at least once each calendar quarter, except that if the commission has completed all inquiries and hearings required under this chapter, the commission is not required to meet. The presiding officer or a majority of the members may call additional meetings. On termination, the commission shall transmit all of its records to the secretary of state.

G. If a vacancy occurs on the commission, the governor may appoint a replacement member pursuant to section 38-211.

H. Notwithstanding section 41-192, the attorney general shall not advise or represent the commission.

I. For the purposes of subsection B of this section, "significant portion of income" means ten percent or more of gross personal income for a calendar year.

§ 37-1122 General powers and duties of the commission

A. The commission shall:

1. Adopt administrative rules that in its discretion it considers to be necessary and proper to carry out the provisions and purposes of this chapter.

2. Assemble and distribute information to the public relating to the commission's determination of navigability or nonnavigability of any watercourse and the commission's other activities.

3. Conduct inquiries or hearings in performing the commission's powers and duties. The commission shall conduct its proceedings informally without adherence to judicial rules of procedure or evidence. The commission shall facilitate participation by persons who are not represented by legal counsel and shall not require a person to file documents or notices in order to be heard and participate in proceedings before the commission.

4. Exercise such other powers as may be necessary to fully carry out its responsibilities imposed by this chapter.

B. The commission may employ subject to title 41, chapter 4, article 4 or contract for legal counsel, independent from the attorney general, and other professional and administrative services. Legal counsel retained by the commission may advise and represent the commission in connection with legal matters before other departments and agencies of this state and represent the commission in litigation concerning the affairs of the commission. Contracts for legal and professional services are exempt from section 41-192 and title 41, chapter 23.

§ 37-1123 Receiving and compiling evidence and records

A. The commission shall receive, review and consider all relevant historical and other evidence presented to the commission by the state land department and by other persons regarding the navigability or nonnavigability of watercourses in this state as of February 14, 1912, together with associated public trust values, except for evidence with respect to the Colorado river, and, after public hearings conducted pursuant to section 37-1126:

1. Based only on evidence of navigability or nonnavigability, determine which watercourses were not navigable as of February 14, 1912.

2. Based only on evidence of navigability or nonnavigability, determine which watercourses were navigable as of February 14, 1912.

3. In a separate, subsequent proceeding pursuant to section 37-1128, subsection B, consider evidence of public trust values and then identify and make a public report of any public trust values that are now associated with the navigable watercourses.

B. Before receiving, reviewing or considering any evidence pursuant to subsection A of this section for a particular watercourse, the commission shall publish notice once each week for three consecutive weeks in a newspaper of general circulation in each county in which the watercourse is located. The notice shall include:

1. A statement of the intent to receive, review and consider evidence.

2. An address to which interested parties may submit evidence for the commission's review.

3. A date by which evidence must be submitted.

4. A general description of the procedures the commission will use to review the evidence.

C. Private citizens, clubs, organizations, corporations, partnerships, unincorporated associations, municipal corporations and public entities may present evidence to the commission at a hearing according to commission rules. The submission of evidence by any party pursuant to the commission's notice under subsection B of this section does not preclude that party from submitting additional evidence at any hearing before the commission.

D. The state land department shall consult and coordinate its efforts to gather evidence of navigability and public trust values with the department of water resources, the game and fish department, the state parks board and other interested persons and public and private entities. The commission shall consider the information that those persons and entities have compiled regarding the navigability of watercourses.

E. After public notice, the commission shall set priorities for investigating and conduct hearings on the navigability of the watercourses in this state. In setting the priorities, the commission shall consider:

1. The number and value of parcels of real property that are affected by a state claim of sovereign ownership to the bed of the watercourse.

2. The degree of hardship to private parties and political subdivisions due to title uncertainties relating to the bed of the watercourse.

3. The significance of the public trust values associated with the watercourse and the degree to which those values are threatened.

4. The potential viability of this state's sovereign claims to the watercourse, giving higher priority consideration to more viable claims.

F. A person who is aggrieved by the undetermined navigability status of a watercourse may petition the commission to modify the priority set under subsection E of this section and grant expedited consideration for a particular watercourse. The commission shall grant the petition if justified by the factors listed in subsection E of this section.

G. No judicial action seeking a determination of navigability of a watercourse, to establish or obtain ownership of land within the bed and banks of a watercourse or to determine any public trust values associated with a watercourse may be commenced, continued or completed unless the commission has made a final determination with respect to the watercourse pursuant to section 37-1128. This subsection does not preclude the department from seeking a temporary restraining order or injunctive relief at any time to prevent loss or damage to public trust resources.

H. Notwithstanding subsection G of this section, any condemnation action by this state or a political subdivision of this state may proceed to trial and conclusion, including the payment of compensation, regardless of the potential claim of title by this state based on the navigability of the watercourse. In any action commenced or continued pursuant to this subsection, the court shall not consider or decide the navigability of the watercourse. Any judgment in any action commenced or continued pursuant to this subsection shall be subject to a potential claim of title by this state based on the navigability of the watercourse.

§ 37-1124 Compiling evidence and records by department

A. Beginning on or about the date that the commission establishes priorities pursuant to section 37-1123, subsection E, but in no event later than January 2, 1993, the department shall begin the necessary investigation and inquiries to assemble the evidence relevant to finding navigability with respect to those watercourses given the highest priority by the commission. The department shall continue the investigations and inquiries as resources permit, in the order of priority set by the commission.

B. After collecting and documenting all reasonably available evidence regarding the condition and usage of a watercourse as of February 14, 1912, the present uses of the underlying land and the public trust values associated with the watercourse, if any, the department shall promptly transmit all of the evidence to the commission.

C. The department shall maintain a permanent record of the material assembled and transmitted to the commission.

§ 37-1126 Hearings; notice

A. The commission shall schedule public hearings to receive additional evidence and testimony relating to navigability or nonnavigability of each watercourse, and, if the commission finds a watercourse is navigable, the commission shall schedule public hearings to identify and make a public report of any public trust values associated with the watercourse. The hearings shall be held at the commission's office or, in the case of a hearing concerning a watercourse located principally outside of Maricopa county, at the county seat of the county in which the predominant portion of the particular watercourse is located. The commission may schedule additional hearings at other locations at the commission's discretion.

B. At least thirty days before any public hearing under this section, the commission shall cause notice of the hearing to be published in two newspapers, one of statewide circulation and another of general circulation in the county where the hearing is to be held. In addition, the commission shall mail notice of the hearing to any person who has previously requested notice of hearings in writing from the commission.

§ 37-1128 Determination of navigability

A. After the commission completes the public hearing with respect to a watercourse, the commission shall again review all available evidence and render its determination as to whether the particular watercourse was navigable as of February 14, 1912. If the preponderance of the evidence establishes that the watercourse was navigable, the commission shall issue its determination confirming that the watercourse was navigable. If the preponderance of the evidence fails to establish that the watercourse was navigable, the commission shall issue its determination confirming that the watercourse was nonnavigable.

B. With respect to those watercourses that the commission determines were navigable, the commission shall, in a separate, subsequent proceeding, identify and make a public report of any public trust values associated with the navigable watercourse.

C. The commission shall make its determinations under subsections A and B of this section in writing with sufficient documentation and detail to confirm the rationale and basis for the determination. The determinations constitute final administrative determinations and are not subject to title 41, chapter 6, article 10.

D. The commission shall immediately notify the department of any watercourse that it determines to be navigable or nonnavigable under subsection A of this section. Within one hundred eighty days after receiving notice that a watercourse is:

1. Navigable, the department shall send notice of that determination to each record owner of, and each person or entity that has an interest of record in, any property that may be affected by the determination and to each person or entity that has requested notification of any determination of navigability. The department shall include a statement of whether the department intends to seek judicial review of the commission’s determination. Any time after the date of the notice under this paragraph, the record title owner or lessee of any affected property may petition the department in writing to disclaim, release, relinquish or dispose of the property from public trust land status as no longer necessary or materially useful for the purposes of the trust.

2. Nonnavigable, the department shall send notice of that determination to each person or entity that has requested notification of any determination of nonnavigability. The department shall include a statement of whether the department intends to seek judicial review of the commission’s determination.

E. After the time for judicial review of the commission's determination with respect to any watercourse has expired, as provided in section 37-1129, the commission shall cause a record of its determination to be recorded in the office of the county recorder of each county in which any part of the watercourse affected by the determination is located.

§ 37-1129 Judicial review

A. Beginning on the date the commission issues a determination under section 37-1128, subsection A and continuing through ninety days after the department issues a notice under either section 37-1128, subsection D, paragraph 1 or 2, the state land commissioner or any person who is aggrieved by the commission’s determination may seek judicial review in superior court in the county in which all or part of the watercourse that is directly affected by the determination is located.

B.  Except as otherwise provided in this chapter, judicial review shall be conducted pursuant to title 12, chapter 7, article 6.

C.  If separate actions are filed under this section with respect to the same watercourse or adjacent or proximate watercourses, on motion by any party to any such action or on its own initiative, the court may:

1.  Order a joint hearing or trial of any matter in the actions.

2.  Order all of the actions pending in any court to be consolidated.

3.  Issue such orders concerning proceedings in the actions as may tend to avoid unnecessary costs or delay or as may be necessary to avoid inconsistent results.

§ 37-1130 Title to bed of nonnavigable watercourse; appropriation of waters for public trust values

A. Subject to judicial review under section 37-1129, the commission’s determination that a watercourse is nonnavigable constitutes a waiver, relinquishment and disclaimer of this state's right, title or interest in the bed of the watercourse based on its navigability.

B. This state may obtain any water that is necessary to maintain and protect public trust values that are identified by the commission pursuant to section 37-1128, subsection B only by complying with the requirements of title 45.

§ 37-1131 Notice to landowners; quiet title action

A. If the commission determines a watercourse to be navigable as provided in section 37-1128, the state land department shall do the following before it files any quiet title action regarding public trust property beneath or adjacent to the watercourse:

1. Collect information and perform land surveys that are necessary to determine the boundaries of the bed of the watercourse. The bed of the watercourse to which the state claim applies is the bed of the watercourse existing on the date of the commission's determination, unless the preponderance of the evidence establishes a different location. Before making this determination, the department shall provide public notice and any opportunity for comment by the public.

2. Compile a complete description of each parcel of land lying wholly or partially in the bed of the watercourse, including record title ownership by any person, and a complete title search of each parcel to show how and when the lands were first conveyed in apparent violation of the public trust.

3. If the land was conveyed in apparent violation of the public trust by an agency of the United States, bring an action against the United States for damages and prosecute the action to final judgment. Any damages collected shall be placed in the riparian trust fund established by section 37-1156.

B. At least thirty days before entering onto any lands in or adjacent to the bed of a watercourse as required for purposes of this section, the department shall notify any record title owner of the property by certified mail of the intention to inspect the property. The notice shall:

1. State the period during which the department or the department's consultant intends to inspect the property and that the inspection is required under subsection A of this section.

2. Describe the activities that the department or the department's consultant intends to perform on the property.

C. Within thirty days after compiling the parcel information pursuant to subsection A, paragraph 2 of this section the department shall notify each record owner or lessee of property that is located in the bed of the navigable watercourse and each person and entity that have an interest of record in the property of the commission's determination and that, by virtue of the determination, all or a portion of the property will be claimed as public trust land of this state in a quiet title action. The notice shall include:

1. The name of the watercourse and the date of the determination of navigability pursuant to section 37-1128.

2. The legal description and acreage of the parcels that the department has determined to be in the bed of the watercourse.

3. A statement that record title owners, lessees and parties having an interest of record in the parcels have a right to appeal the department's determination of the parcel boundaries within thirty days after receiving the notice as provided by title 41, chapter 6, article 10.

D. The department shall not commence an action to quiet title to land under this article until the commission has issued a final determination regarding the navigability of the watercourse pursuant to section 37-1128 and that determination is subject to no further judicial review pursuant to section 37-1129.

E.  Venue for any action to quiet title under this section is proper only in the superior court in the county in which the affected lands are located, but the court may grant or deny requests for change of venue pursuant to title 12, chapter 4, article 1.

F.  The department shall join as parties to any action to quiet title under this section each record owner of, and each person or entity that has an interest of record in, any property in the county that may be affected by this state's claim to ownership of the bed of the affected watercourse, but this requirement does not constitute grounds for dismissing the action if the persons or entities not joined are not subject to the jurisdiction of the courts of this state.

§ 37-1132 Refunds to record title owners

A. If this state's ownership of a parcel or portion of a parcel of property is confirmed in a quiet title action under this article, the state treasurer shall pay to the record title owner an amount from the state general fund to:

1. Refund all property taxes ever paid on the property.

2. Compensate the person for all improvements to the property.

3. Refund the purchase price paid for the property, plus interest at the legal rate, if the property was purchased from this state by the person or any predecessor in title.

B. The department of administration, in coordination with the department of revenue and the state land department, shall certify to the state treasurer the amounts due to the record title owner pursuant to this section.

Article 3 Management of Public Trust Lands

§ 37-1151 Petition to release public trust status

A. In responding to a petition filed by a record title owner or lessee pursuant to section 37-1128, subsection D, paragraph 1 the department shall consider the extent to which the property that has been confirmed to the state's ownership in a quiet title action, either because of its nature or because of changes, is no longer of material use for protecting public trust values. If the department concludes that the property is not of material use for protecting public trust values, the department shall consider the extent to which a release of the trust is appropriate in light of the public benefit to be derived from alternate uses, and the equitable interests or hardships of the record title holder or lessee, including each of the following:

1. The year in which the property was acquired by the record owner or lessee.

2. The entity or person from whom the property was acquired by the record owner or lessee.

3. The manner in which the record owner or lessee acquired the property.

4. The purchase price or lease terms paid by the record owner or lessee.

5. The amount of property taxes paid each year since the record owner or lessee acquired the property.

6. The profit or benefit derived from the property by the record owner.

7. The extent to which the record owner on the date of acquisition knew or should have known that the property was potentially trust land.

8. All improvements made to the property since the record owner or lessee acquired the property.

9. The public trust values identified by the commission pursuant to section 37-1128, subsection B.

10. Whether any improvements on the property impair, obstruct, promote or destroy the value of the watercourse for public trust values.

11. The existing uses of the property, its reasonable highest and best use and whether such uses impair, obstruct, promote or destroy the value of the watercourse for public trust values.

12. Whether the physical condition of the watercourse has materially changed since February 14, 1912 adversely affecting the watercourse's capability of being navigated, including changes due to construction of dams, reservoirs, dikes, levees, canals and ditches that were constructed for water conservation or flood control purposes by public entities, municipal corporations or the United States.

13. Any diminution in value to the record owner's or lessee's contiguous property caused by this state's ownership.

14. The degree of effect of continuation of the current use or any proposed change in use of the property on public trust values.

15. The impact of continuation of the current use or any proposed change in use of the property on the public trust values.

16. The impact of continuation of the current use or any proposed change in use of the property when examined cumulatively in conjunction with existing authorized impediments to full use of the public trust values.

17. The impact of continuation of the current use or any proposed change in use of the property on the public trust values if those values are considered with respect to the primary purpose to which the property is now suited.

18. The degree to which continuation of the current use or any proposed change in use requires that broad public uses be set aside in favor of more limited and private uses.

B. At least thirty days before issuing a decision that land may be released from the public trust under this section the department shall provide written notice of the proposed action and an opportunity to comment to any person who has previously requested written notice of actions under this section. The department shall provide contemporaneous written notice of the final decision to any person who filed a comment.

§ 37-1152 Auction and sale of released public trust lands

A. If the department determines that any portion or reach of a bed of a navigable watercourse may be released from the public trust, the department shall cause an appraisal of the property to be made to determine its fair market value. The property shall not be disposed of for an amount less than that appraised value.

B. At the same time, the department shall also cause an appraisal to be made of such reasonable improvements to the property as the record owner or lessee may have made in good faith. The amount of that appraised value of the improvements shall be credited and applied to the bid of the record owner or lessee at any sale or public auction of the land that the department conducts. If the record owner or lessee is not the successful bidder at the sale or auction, the successful bidder shall reimburse the owner or lessee by the amount of the appraised value of the improvements.

C. Sections 37-236, 37-237 and 37-238 apply to the sale of such lands at public auction.

§ 37-1153 Permit to use public trust lands

A. On application, the department may permit the use of public trust lands by a public entity or private person or entity if the department determines that such use will be consistent with, and in the best interests of, the public trust. The use may continue only as long as the lands are used for the purposes for which the permit is granted. The permit shall contain terms and conditions that are necessary or appropriate to assure protection of the public trust interests associated with the lands. The user shall pay due compensation to the department that shall be used for the purposes prescribed by this chapter.

B. At least thirty days before issuing a permit under this section the department shall provide written notice of the proposed action and an opportunity to comment to any person who has previously requested written notice of actions under this section. The department shall provide contemporaneous written notice of the final decision to any person who filed a comment.

C. The department may lease rights-of-way in public trust lands for nonexclusive uses for a term of not more than ten years without a public auction, if the conditions prescribed by subsection A are met.

D. The department shall adopt rules relating to granting the use permits and maintaining the public trust land that is subject to permit under this section.

§ 37-1154 Public improvements in beds of navigable watercourses; definition

A. A determination that a watercourse is navigable does not affect the right of a public entity to own, operate, maintain or repair a public improvement reasonably constructed in the bed of the watercourse under the public entity's powers if the improvement was constructed before the determination that the watercourse is navigable and does not materially impair the public trust. The public entity is considered to have obtained this state's consent to construct the public improvement and is not liable to pay compensation to this state for the land on which the public improvement is constructed if the improvement does not materially impair, obstruct or destroy the function of the watercourse for public trust purposes.

B. If the commissioner determines that the public improvement described in subsection A of this section does not, or will not if appropriate conditions are followed, materially impair the public trust uses, the department may require the public entity to obtain a permit for the improvement pursuant to section 37-1153 but shall not assess any fee for issuing the permit.

C. At least thirty days before issuing a decision under subsection D or E of this section the department shall provide written notice of the proposed action and an opportunity to comment to any person who has previously requested notice of actions under this section. The department shall provide contemporaneous written notice of the final decision to any person who filed a comment.

D. If the commissioner determines that the public improvement described in subsection A of this section destroys the function of the watercourse for public trust purposes and is not in furtherance of the public trust status of the land, the public entity may petition the department for release of public trust status pursuant to section 37-1151. In evaluating the petition, the department shall consider, in addition to the factors prescribed by section 37-1151, whether constructing the public improvement was undertaken pursuant to the public entity's authority and whether the public improvement continues to serve a public purpose.

E. If the commissioner determines that a release is appropriate under subsection D of this section, the public entity may purchase this state's interest in the land without a public auction by paying an amount to be determined by the department pursuant to section 37-1152 directly to this state pursuant to section 9-401, subsection A, section 11-251, paragraph 45 or section 48-3603, subsection C, paragraph 2, as applicable. No cause of action or claim for reimbursement accrues for the benefit of any public entity that exercises its right to purchase this state's interest pursuant to this subsection.

F. For purposes of this section, "public improvement" includes any facility established, constructed or maintained by a public entity pursuant to law and those works described in section 37-1101, paragraph 4.

§ 37-1155 Prior use of public trust lands

This state shall not claim compensation for any good faith use of public trust lands made before September 10, 1991 by the record owner or the record owner's lessee if all of the following conditions apply:

1. The landowner had record title to the land at the time of the use.

2. At the time of use, the record landowner did not have actual knowledge, nor did any recorded instrument disclose, that the state had a sovereign claim to the land.

3. The record landowner used the land in a reasonable manner.

§ 37-1156 Riparian trust fund; acquisition and management of riparian lands

A. The riparian trust fund is established consisting of monies received from the sale or use of sovereign streambed lands and resources under this chapter, damages collected from the United States pursuant to section 37-1131 and any other appropriations, gifts, grants or donations designated by the donor for that purpose. The state shall maintain the fund separate and apart from all other funds. On notice from the commissioner the state treasurer shall invest and divest monies in the riparian trust fund as provided by section 35-313, and monies earned from investment shall be credited to the riparian trust fund.

B. The state land commissioner shall use the income, other proceeds and not more than seventy-five per cent of any added principal of the fund in a fiscal year pursuant to this section:

1. To acquire, from willing sellers, land or interests in land located in riparian areas in this state for public purposes consistent with conservation of wildlife and recreation.

2. For such other expenditures as promote the purposes of the public trust.

C. The state land commissioner shall consult with and receive advice from the Arizona state parks board and the Arizona game and fish department regarding the acquisition and management of land and interests in land under this section.

Chapter 8 Military Airport Land Exchanges

Article 1 General Provisions

§ 37-1201 Declaration of policy

It is declared the policy of the legislature to promote the preservation of military airports in this state by facilitating the conservation of open space around military airports, and thereby to protect and enhance the irreplaceable economic benefit that military airports directly and indirectly contribute to the communities and citizens of this state.

§ 37-1202 Definitions

In this chapter, unless the context otherwise requires:

1. "High noise or accident potential zone" has the same meaning prescribed in section 28-8461.

2. "Landowner" means any private person, firm or corporation holding title to any land that is wholly or partially in territory in the vicinity of a military airport.

3. "Manager" means the manager of the section.

4. "Military airport" has the same meaning prescribed in section 28-8461.

5. "Section" means the military airport land exchange section of the state land department.

6. "Subject property" means private land that is to be offered in a proposed exchange pursuant to this chapter.

7. "Territory in the vicinity of a military airport" has the same meaning prescribed in section 28-8461.

Article 2 Military Airport Land Exchange Section

§ 37-1221 Military airport land exchange section; purpose; employees; compensation

A. Subject to the availability of monies in the military airport land exchange fund, the military airport land exchange section is established within the state land department for the purpose of facilitating exchanges of federal land in this state for private land in territory in the vicinity of a military airport in this state.

B. All personnel and administrative costs shall be paid from the fund. The commissioner shall appoint a manager of the section, who shall be responsible for the administrative functions of the section. With the commissioner's approval, the manager may hire employees necessary to carry out this chapter.

C. Compensation for the manager and other employees of the section shall be determined pursuant to section 38-611.

§ 37-1222 Military airport land exchange proposal application; agreement

A. A landowner may apply to the section for assistance in preparing a proposal to exchange the landowner's land for land owned by a federal agency if the landowner's land is wholly or partially in a high noise or accident potential zone or if all of the following apply:

1. The landowner's land is undeveloped land.

2. The landowner's land is zoned for uses that are not compatible with the operation of a military airport as determined by the local jurisdiction.

3. The landowner agrees to a rezoning of the landowner's land to uses that are compatible with the operation of a military airport as a condition of an exchange proposed pursuant to this chapter.

B. An application pursuant to subsection A of this section shall include all of the following:

1. The name and address of the landowner.

2. A description of the location of the subject property.

3. The size of the subject property in acres.

4. A copy of the county tax assessor's map showing the subject property.

5. A copy of the zoning ordinance that applies to the subject property.

6. A list of any improvements that are on the subject property.

7. The current use of the subject property and, to the extent known to the landowner, a history of past uses of the subject property.

8. The landowner's preference for the general location of federal lands to be offered in a proposed exchange.

C. The section shall evaluate each application that it receives pursuant to this section and give written notice to the applicant of acceptance or rejection of the application by the section. If the section rejects an application, the notice shall state the reason or reasons for the rejection and that the rejection is an appealable agency action pursuant to title 41, chapter 6, article 10. If the section accepts an application, the notice shall indicate that the section agrees to assist the landowner in preparing a proposal for the exchange of the landowner's land for federal land if the landowner pays the fee prescribed in section 37-1223, subsection A, paragraph 1.

§ 37-1223 Powers and duties of the section; limitations

A. If the section agrees to assist a landowner pursuant to section 37-1222, subsection C, the section shall:

1. Charge the landowner a fee for each acre of the subject property. The section shall deposit, pursuant to sections 35-146 and 35-147, monies received pursuant to this paragraph in the military airport land exchange fund established by section 37-1224 and shall use the monies to hire staff and support the operations of the section.

2. Evaluate the suitability of the subject property for exchange with federal land.

3. Coordinate with federal agencies to identify federal lands that are available and suitable for exchange for the subject property.

4. Prepare an exchange proposal for the landowner's review.

B. The section may:

1. Request a landowner to advance or incur costs of evaluations and studies that may be needed to prepare an exchange proposal including legal land surveys, title reports, appraisals, environmental assessments and cultural and biological investigations. The section shall deposit, pursuant to sections 35-146 and 35-147, the monies collected under this paragraph in a separate account of the military airport land exchange fund and shall use the monies to contract for the evaluations and studies that are needed to prepare an exchange proposal.

2. Accept and spend grants, gifts and contributions from individuals, businesses, cities, towns, counties, other political subdivisions of this state, other state agencies, federal agencies and any other sources to hire staff and support the operations of the section.

3. At the request of the landowner, present an exchange proposal to a federal agency.

4. Disburse monies in the military airport land exchange fund to a federal agency that agrees to an exchange proposed under this chapter to cover costs incurred by the agency in preparing the exchange.

C. The landowner shall be responsible for making all decisions and bearing all costs arising from an exchange proposed under this chapter. Neither the section nor the department shall be the landowner's agent. Assistance provided by the section to a landowner under this chapter is limited by the availability of monies in the military airport land exchange fund. An agreement under section 37-1222, subsection C is not a guarantee or other assurance by the section, the department, this state or any agency of this state that a federal agency will exchange land with the landowner.

§ 37-1224 Military airport land exchange fund

A. A military airport land exchange fund is established consisting of monies appropriated by the legislature, fees deposited pursuant to section 37-1223, subsection A, paragraph 1 and monies deposited pursuant to section 37-1223, subsection B. The commissioner shall administer the fund.

B. Monies in the fund are continuously appropriated for the purpose of conducting the activities of the section.

C. Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

Chapter 9 Arizona Department of Forestry and Fire Management

Article 1 Arizona Department of Forestry and Fire Management

§ 37-1301 Arizona department of forestry and fire management; state forester; appointment; qualifications

A. The Arizona department of forestry and fire management is established to provide for land management and the prevention and suppression of wildland fires on state land and on private property located outside of cities and towns.

B. The governor shall appoint a state forester pursuant to section 38-211. The state forester serves at the pleasure of the governor. The state forester is responsible for the direction, operation and control of the Arizona department of forestry and fire management.

C. The qualifications of the state forester shall be either of the following:

1. Graduation from a full four-year college course with a bachelor's degree, with a major in forestry, including five years of technical experience in the forestry-land management field.

2. Ten years of successful and progressive technical experience in forestry and land management activities of such a nature as to enable the applicant to perform the duties of the state forester successfully at the professional level.

§ 37-1302 Powers and duties of state forester; rules; legislative presentation; report; acceptance of federal law

A. The state forester is designated as the agent of this state and shall administer this chapter. The state forester shall:

1. Exercise and perform all powers and duties vested in or imposed on the Arizona department of forestry and fire management.

2. Adopt rules necessary to discharge the powers and duties of the Arizona department of forestry and fire management, including rules that create efficiencies, protect the public health and safety and prescribe budgetary obligations.

3. Subject to title 41, chapter 4, article 4, appoint an assistant director to the office of the state fire marshal, a state fire training officer and a state fire resource coordinator, all of whom serve at the pleasure of the state forester.

4. Subject to title 41, chapter 4, article 4, employ, determine the terms and conditions of employment of and prescribe the duties and powers of administrative, professional, technical, secretarial, clerical and other persons as may be necessary in the performance of the Arizona department of forestry and fire management's duties. The compensation of department employees shall be as determined pursuant to section 38-611.

5. Contract for the services of outside advisors, consultants and aides as may be reasonably necessary.

6. Perform all management and administrative functions assigned or delegated to this state by the United States relating to forestry and financial assistance and grants relating to forestry and wildfire prevention, mitigation and suppression activities. The state forester shall obtain and maintain a copy of the initial and any revised delegation of authority agreement entered into with the United States.

7. Identify sources of information relating to forest management, including wildfire prevention, mitigation, suppression and recovery and administrative and judicial appeals and litigation with respect to timber sales and forest thinning projects in this state, and develop procedures for compiling and distributing that information.

8. Take necessary action to maximize state fire assistance grants, including establishing timelines for using grant monies and reallocating lapsed grant monies to other projects.

9. Conduct education and outreach in forest communities by explaining the wildfire threat to private property caused by the lack of timber harvesting, forest thinning, land management and watershed protection and enhancement.

10. Monitor and conduct forestry projects and wildfire prevention, mitigation and suppression activities.

11. Assist in the development of the forestry products industry in this state.

12. Intervene on behalf of this state and its citizens in administrative and judicial appeals and litigation that challenge governmental efforts supported by the state forester if the state forester determines that intervention is in the best interests of this state.

13. Annually develop and implement a comprehensive statewide wildfire response plan for the deployment of state, county, municipal, fire district, volunteer fire association and private fire service provider contract resources to wildfire suppression activities. The statewide wildfire response plan shall take into account anticipated fire conditions and fire severity and may include prepositioning resources as necessary. The state forester shall consult with federal land management firefighting agencies, state and county emergency agencies, municipal fire departments, fire districts, statewide fire district and statewide fire chiefs associations, volunteer fire departments and private fire contractors in the development of the comprehensive statewide wildfire response plan, the implementation of standards for training and certification for all classes of wildland fire and hazard personnel and the implementation of standards for wildland fire apparatus and equipment that are deployed under cooperative agreements with the state forester.

14. Provide necessary oversight to ensure standardized training and certification for all classifications of firefighters to be deployed to any incident.

15. Develop recommendations for minimum standards for safeguarding life and property from wildland fires and fire hazards, preventing wildland fires and alleviating fire hazards.

16. Develop recommendations for minimum standards for the storage, sale, distribution and use of dangerous chemicals, combustibles, flammable liquids, explosives and radioactive materials in wildland-urban interface areas.

17. Consult with the department of public safety, the department of emergency and military affairs and local governments regarding the establishment of fire evacuation routes and community alert systems.

18. Make recommendations for minimum standards for the creation of defensible spaces in and around wildland-urban interface areas as authorized by existing county and municipal laws and ordinances.

B. During the first regular session of each legislature, the state forester shall present information to the legislative committees with jurisdiction over forestry issues and provide a written report to each of those legislative committees, the governor and the secretary of state. The state forester shall collaborate with, and invite the participation of, relevant state, federal and local governmental officers and agencies. The presentation and written report shall include information concerning:

1. Forestry management, including the current conditions of the forests in this state on federal, state and private property as affected by federal, state and local public policies, climatic conditions, wildfire hazards, pest infestations, overgrowth and overgrowth control policies and methods and the effects of current federal policy on forest management and impacts on forest land management.

2. The wildland-urban interface, including the effects of county and municipal zoning policies and wildfire hazards on public and private property.

3. Wildfire emergency management and all hazard response issues, including:

(a) Intergovernmental and interagency primacy, cooperation, coordination, roles and training of federal, state and local forestry, firefighting and law enforcement agencies.

(b) Channels and methods of communicating emergency information to the public.

(c) The roles of governmental and nongovernmental disaster relief agencies and organizations.

(d) The level of federal, state and local emergency funding.

4. Current and ongoing wildfire mitigation and suppression activities.

5. The associated budget allocated for wildfire mitigation and suppression and the expected actual costs.

C. The state forester may:

1. Furnish technical advice to the people of this state on forestry and land management matters.

2. Do all other acts necessary to take advantage of and carry out the provisions of the act of Congress described in subsection D of this section.

D. This state accepts the provisions of the cooperative forestry assistance act of 1978 (P.L. 95-313; 92 Stat. 365; 16 United States Code chapter 41) providing for federal forestry assistance programs to states.

§ 37-1303 Suppression of wildfires; powers and duties of state forester; entry on private lands; exemption

A. The state forester shall have authority to prevent, manage or suppress any wildfires on state and private lands located outside incorporated municipalities and, if subject to cooperative agreements, on other lands located in this state or in other states, Mexico or Canada. If there is no cooperative agreement, the state forester may furnish wildfire suppression services on any lands in this state if the state forester determines that suppression services are in the best interests of this state and are immediately necessary to protect state lands.

B. In exercising the authority to prevent, manage or suppress wildfires, if the state forester declares a prohibition on fire-causing activities and fireworks, the state forester shall post a notice of the action on the state forester's website and provide a copy of the notice to the news media and the original declaration to the Arizona state library, archives and public records. The notice shall clearly state the types of prohibited activities, where they are prohibited and whether permits that are issued by other governmental entities are affected by the action.

C. The state forester may request the governor to declare a wildland fire emergency pursuant to section 35-192. If liabilities are authorized under both sections 35-192 and 37-1305, the authorization under section 37-1305 must be exhausted before any liabilities may be incurred under section 35-192.

D. The state forester may enter into cooperative agreements with other state and federal agencies, departments and political subdivisions and any person for:

1. The prevention and suppression of wildfires.

2. Assistance with fire and nonfire national and state emergencies and multiagency logistical support in this state and other states.

3. Activities pursuant to the wildfire suppression assistance act (P.L. 101-11; 103 Stat. 15; 42 United States Code sections 1856m through 1856o) in Mexico and Canada.

E. The state forester may enter private lands in performing the duties under this section.

F. The state forester may enter into agreements to use private landowners' equipment and personnel if the fire is on or adjacent to such private landowners' property.

G. The state forester is exempt from the provisions of title 3, chapter 7 relating to protected native plants in this state for the prevention, management or suppression of wildfires.

H. Within a wildfire management area, the state forester or the designated wildfire incident commander is not responsible for the safety or actions of any person or private entity contracted to provide wildfire protection services for private property.

§ 37-1304 Forestry administrative districts; equipment and personnel

A. The state forester may establish state forestry administrative districts in all eligible areas of this state.

B. The state forester shall establish an equipment program in order to supply the forestry administrative districts. Equipment shall be supplied through both the federal excess property program and purchases of new equipment when warranted.

C. Subject to title 41, chapter 4, article 4, the state forester may hire personnel in each such district or other most practical area based upon need and workload.

D. The state forester may:

1. Hire personnel and rent equipment on a temporary basis in order to monitor and suppress wild land fires occurring on state and private lands within any of the forestry administrative districts.

2. Cooperate with other federal, state and local government agencies and any person to establish a reserve of personnel and equipment which may be utilized when needed to suppress wild land fires.

3. Adopt rules necessary to carry out the provisions of this subsection which shall be exempt from existing advertising and certification procedures.

§ 37-1305 Emergencies; prohibiting fireworks; liabilities and expenses; fire suppression revolving fund

A. On request of the state forester, the governor may authorize the state forester to incur liabilities for suppressing wildland fires and responding to other unplanned all-risk activities from unrestricted monies in the state general fund whether or not the legislature is in session.

B. The state forester has the authority to prohibit the use of fireworks during times of high fire potential in the unincorporated areas of the state.

C. The state forester or the state forester's designee shall review all liabilities incurred and expenditures made under this section and shall report the expenditures to the department of administration for audit according to department of administration rules. The state forester shall transmit a copy of the report to the state emergency council.

D. Liabilities incurred under this section are subject to the following limitations:

1. Wildland fire suppression or other unplanned all-risk emergency liabilities shall not exceed three million dollars of state general fund monies pursuant to subsection A of this section in a fiscal year for costs associated with suppressing wildland fires, supporting other unplanned all-risk activities such as fire, flood, earthquake, wind and hazardous material responses and preparing for periods of extreme fire danger and pre-position equipment and other fire suppression resources to provide for enhanced initial attack on wildland fires. The state forester shall not incur nonreimbursable liabilities for support of nonfire all-risk activities. The governor shall determine when periods of extreme fire danger exist and must approve any expenditure for pre-positioning activities.

2. If the funding authorization in paragraph 1 of this subsection is exhausted, or if the nonreimbursable liabilities incurred exceed the cash balance of the fire suppression revolving fund, the state forester shall not incur additional liabilities without the consent of a majority of the state emergency council as authorized by section 35-192.

E. The state forester shall process and pay claims for reimbursement for wildland fire suppression services, including claims for personnel hours, used supplies and reasonable and negotiated costs of damage to equipment that exceeds normal wear and tear, as follows:

1. Except as provided by paragraph 2 of this subsection, within thirty days after receiving a complete and correct claim for wildland fire suppression services, the state forester shall pay the claim from available monies that have not been committed to the payment of other wildfire expenses.

2. Within thirty days after receiving a complete and correct claim for wildland fire suppression services on federal lands, the state forester shall complete the processing of the claim and forward the claim to the appropriate federal agency.

3. For any valid claim other than for federal reimbursement, if there is insufficient funding in the fire suppression revolving fund, the holder of the unpaid claim shall be issued a certificate pursuant to section 35-189.

4. For any valid claim for federal reimbursement, the state forester shall certify the claim to the state treasurer who shall pay the claim, including claims for personnel hours, used supplies and reasonable and negotiated costs of damage to equipment that exceeds normal wear and tear, from monies appropriated from the budget stabilization fund pursuant to section 35-144, subsection A, paragraph 3. The state forester shall reimburse the state treasurer within forty-five days after payment of the claim by a federal agency and the state treasurer shall deposit those monies in the budget stabilization fund established by section 35-144.

F. Monies received for suppressing wildland fires, pre-positioning equipment and firefighting resources and other unplanned all-risk activities may be used for the purposes of section 37-1303 and this section.

G. The state forester shall adopt rules for administering the wildland fire suppression monies authorized under this section, subject to approval of the governor.

H. The state forester may require reimbursement from cities and other political subdivisions of this state and state and federal agencies for costs incurred in the suppression of wildland fires, pre-suppression or unplanned all-risk activities. Reimbursement shall be based on the terms and conditions in cooperative agreements, land ownership or negligence. The state forester may require reimbursement from individuals or businesses only for costs incurred in the suppression of wildland fires or unplanned all-risk activities caused by their negligence or criminal acts.

I. The fire suppression revolving fund is established consisting of civil penalties collected pursuant to section 36-1610 and monies received by the state forester for wildland fire suppression and pre-positioning equipment and resources and for payment for activities related to combating wildland fires and supporting other unplanned all-risk activities such as fire, flood, earthquake, wind and hazardous material responses. The state forester shall not incur nonreimbursable liabilities for support of nonfire all-risk activities. The state forester shall administer the fund, and all monies received for these activities shall be deposited, pursuant to sections 35-146 and 35-147, in the fund. Monies in the fire suppression revolving fund are continuously appropriated to the state forester, except that if the unobligated balance of the fund exceeds two million dollars at the end of any calendar year, the excess shall be transferred to the state general fund. Monies in the fire suppression revolving fund are otherwise exempt from the provisions of section 35-190 relating to lapsing of appropriations.

§ 37-1306 Cooperative forestry fund; purpose; exemption

A. The cooperative forestry fund is established. The state forester shall administer the fund.

B. Except as otherwise provided in this chapter, the state forester shall deposit, pursuant to sections 35-146 and 35-147, in this fund all monies appropriated to this fund and monies received from individuals, businesses, any public agency as defined in section 11-951, and any other sources.

C. Appropriations, grants, gifts and contributions hazardous vegetation removal received from any public or private source must be used for hazardous vegetation removal pursuant to section 37-483.

D. Monies deposited pursuant to an intergovernmental agreement or a memorandum of understanding entered into pursuant to section 37-483 must be used for the purposes outlined in the agreement or memorandum.

E. Monies in the fund are continuously appropriated for the purpose of conducting the activities of the state forester.

F. Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

§ 37-1307 State fire safety committee; members; terms; powers and duties; compensation; fire watch requirements

A. The state fire safety committee is established consisting of nine members who are appointed for three-year terms by the governor pursuant to section 38-211. The governor may remove any member from the committee for incompetency, improper conduct, disability or neglect of duty. Membership on the committee is as follows:

1. Two members, not from the same municipality, each of whom is a fire chief or fire marshal of a paid municipal fire department of a city with a population of one hundred thousand persons or more.

2. One member who is a fire chief of a paid municipal fire department of a town with a population of less than one hundred thousand persons.

3. One member who is a fire chief in a fire district of an unincorporated area in a county with a population of less than five hundred thousand persons.

4. One member who is a member of the Arizona fire chiefs association.

5. One member who is a registered architect.

6. One member who is a chief building official of a city, town or county.

7. One member who is a member of the public.

8. One member who is a member of the public and who is engaged in the business of distributing, selling or providing liquefied petroleum gas to consumers.

B. The state fire safety committee shall annually select from its membership a chairperson for the committee. The committee shall meet on the call of the chairperson or on the request of at least five members.

C. The state fire safety committee shall advise the office of the state fire marshal on all of the following:

1. The adoption of a state fire code.

2. The adoption of a fee schedule for permits, plan submissions, plan reviews and reinspections.

3. The allocation of monies from the arson detection reward fund established by section 37-1387.

D. Members of the committee are not eligible to receive compensation for service on the committee but are eligible for reimbursement of expenses pursuant to title 38, chapter 4, article 2.

E. If the state fire safety committee requires the use of a fire watch, an employee who works at the building in which a fire watch is required may serve as the fire watch. A person who is designated as a fire watch shall be equipped with means to contact the local fire department, and the person's only duty shall be to perform constant patrols of the protected premises while keeping watch for fires. The local jurisdiction shall provide the fire watch with printed instructions from the office of the state fire marshal and may provide a free training session before the person's deployment as the fire watch begins. For the purposes of this subsection, "fire watch" means a person who is stationed in a building or in a place relative to a building to observe the building and its openings when the fire protection system for the building is temporarily nonoperational or absent.

§ 37-1308 Fire detection, prevention and suppression training for ranchers and landowners; immunity

A. To ensure that ranchers and landowners in this state are adequately equipped to protect their own property and neighboring property from forest and range fires, the Arizona department of forestry and fire management shall develop a program to train individual or groups of ranchers and landowners to detect, prevent and suppress forest and range fires within this state.

B. This state is not liable for any claim based on a rancher's or landowner's exercise or performance of, or failure to exercise or perform, any fire detection, prevention or suppression activity that the landowner or rancher was trained to exercise or perform under subsection A of this section.

§ 37-1309 Nonnative vegetation species eradication fund; department duties; grants; annual report

A. The nonnative vegetation species eradication fund is established consisting of legislative appropriations for specific nonnative vegetation invasive species eradication projects. Monies in the fund are continuously appropriated to the Arizona department of forestry and fire management for the purposes of this section and are exempt from the provisions of section 35-190 relating to lapsing of appropriations. On notice from the state forester, the state treasurer shall invest and divest monies in the fund as provided in section 35-313, and monies earned from investment shall be credited to the fund.

B. The Arizona department of forestry and fire management shall:

1. Coordinate with the Arizona state land department on projects conducted on state trust land pursuant to this section.

2. Coordinate with the Arizona game and fish department on projects conducted pursuant to this section.

3. Monitor and oversee specific projects for which the legislature appropriates monies to the nonnative vegetation species eradication fund.

4. Provide grants to other state agencies, cities, towns, counties, Indian tribes and other political subdivisions of this state and to nonprofit organizations for nonnative vegetation invasive species eradication projects that will assist in preventing fire and flooding, conserving water, replacing nonnative vegetative species with native vegetative species and restoring habitat to wildlife. A grant recipient shall follow state and federal laws to preserve endangered species when implementing the nonnative vegetation invasive species eradication project.

5. Establish application procedures and qualification criteria for the grants. Grants awarded pursuant to this section shall be awarded in accordance with title 41, chapter 24.

C. On or before September 1 of each year, the Arizona department of forestry and fire management shall report to the joint legislative budget committee and the governor's office of strategic planning and budgeting the total expenditures from the previous year for grants for nonnative vegetation species eradication projects. The report shall indicate each project's expenditures, the benefits of each project to the treated land, the status of each project and the projected timeline for completion of each project.

§ 37-1310 Emergency medical services on federal lands; payment; requirements; definition

A. Subject to legislative appropriation, the state forester shall process and pay to a fire district with a population of less than five thousand inhabitants claims for expenses incurred in responding to emergency medical services calls on federal lands as follows:

1. The fire district shall submit an itemized claim for payment within ninety days after the emergency medical services response.

2. Within thirty days after receiving a complete and correct claim for payment, the state forester shall complete the processing of the claim and pay the fire district.

B. For the purposes of this section, "expenses":

1. Includes personnel costs for personnel that directly respond to an emergency medical services call, fuel costs, costs for medical supplies and other costs the state forester determines are related to the response.

2. Does not include emergency medical services regulated pursuant to title 36, chapter 21.1.

§ 37-1311 Wildfire mitigation plan; hearing; rules; fees; definitions

A. The state forester shall review and approve a submitted wildfire mitigation plan if the state forester finds that the wildfire mitigation plan:

1. Complies with title 30, chapter 7, article 1 or title 40, chapter 8, article 1 and any other applicable rules.

2. Is reasonable considering the public power entity's or electric utility's size and resources.

3. Is in the public interest.

4. Meets the requirements of subsection H of this section.

5. Is designed to meet the specific conditions and risk of the public power entity's or electric utility's service area in which the public power entity or the electric utility operates.

B. The state forester shall provide public notice and an opportunity for public comment on a submitted wildfire mitigation plan. The state forester shall publish the notice on the Arizona department of forestry and fire management's website and in the Arizona administrative register.

C. Within fourteen days after receiving a submitted wildfire mitigation plan, the state forester shall:

1. Identify the counties and cities and towns that are located within the geographic region as described in the public power entity's or electric utility's wildfire mitigation plan.

2. Establish the time period and instructions for the affected counties and cities and towns to provide public comment.

3. Provide the information prescribed in paragraphs 1 and 2 of this subsection to the public power entity or electric utility.

D. Within ten days after receipt of the information prescribed in subsection C of this section, the public power entity or electric utility shall provide written notice to the identified counties and cities and towns of the opportunity to provide comment on the wildfire mitigation plan.

E. Within forty-five days after receipt of any wildfire mitigation plan, the state forester shall hold a public meeting to solicit comments on any proposed wildfire mitigation plan. The state forester shall provide for remote attendance at the public meeting using telephonic or video conferencing.

F. The state forester may request additional information or request modification to the submitted wildfire mitigation plan within one hundred twenty days after the initial receipt of the wildfire mitigation plan by providing written notice to the public power entity or electric utility. If the state forester does not request additional information or a modification to the wildfire mitigation plan, the wildfire mitigation plan is deemed administratively approved after the one hundred twenty-day review period.

G. Within ninety days after receipt of the notice prescribed in subsection F of this section, the public power entity or electric utility shall respond to the state forester's request for information and, if necessary, may revise the wildfire mitigation plan. The state forester shall have sixty days after receipt of the responses or a revised wildfire mitigation plan, whichever is later, to consider the approval or denial of the wildfire mitigation plan. If the state forester does not request further additional information or a modification to the wildfire mitigation plan, the wildfire mitigation plan is deemed administratively approved at the expiration of sixty days. The wildfire mitigation plan is deemed approved during the pendency of any judicial action pursuant to title 12, chapter 7, article 6 that seeks review of the state forester's approval or denial of the wildfire mitigation plan or any portion of the wildfire mitigation plan.

H. The wildfire mitigation plan shall do the following:

1. Identify Preventive actions, protective equipment and monitoring programs that the public power entity or electric utility will carry out, install, repair, replace or implement to minimize the risk of a wildfire.

2. Include:

(a) A description of areas within the geographic region where the public power entity's or electric utility's facilities may be subject to a heightened risk of wildfire.

(b) A description of the procedures, standards and time frames that the public power entity or electric utility will use to inspect and operate the public power entity's or electric utility's infrastructure to mitigate the risk of wildfires.

(c) A description of the key individuals or position titles of those persons who are responsible for implementing the wildfire mitigation plan.

(d) A description of the procedures for deenergizing power lines and disabling reclosers to mitigate potential wildfires or provide a public safety power shutoff plan.

(e) A description of the procedures, standards and time frames that the public power entity or electric utility will use to carry out vegetation management.

(f) A summary of the procedures the public power entity or electric utility intends to use to restore the public power entity's or electric utility's electrical system in the event of a wildfire.

(g) A description of community outreach and public awareness efforts.

(h) A description of potential participation, if applicable, with state or local wildfire protection efforts.

(i) A description of how the public power entity or electric utility will monitor compliance with the wildfire mitigation plan.

I. A public power entity or electric utility may reference procedures and standards that are not specifically enumerated in the wildfire mitigation plan in lieu of the requirements prescribed in subsection H of this section. Referenced material shall be included as attachments to the wildfire mitigation plan submission.

J. During the pendency of any review and approval process by the state forester prescribed in this section, any wildfire mitigation plan previously approved by the state forester shall remain approved and in effect.

K. The state forester may adopt rules to implement this section.

L. Any action by the state forester pursuant to this section and any comments on the wildfire mitigation plan provided by any county, city, town or other governmental entity pursuant to this section are the exercise of an administrative function involving the determination of fundamental governmental policy as prescribed in section 12-820.01.

M. The state forester may charge reasonable fees to public power entities and electric utilities for the review and approval of wildfire mitigation plans as prescribed in this section. In establishing the fees, the state forester may consider factors such as the time and materials necessary to review the wildfire mitigation plans with consideration given to the relative size, resources and service territory complexity of the public power entity or electric utility submitting a wildfire mitigation plan. The state forester shall deposit fees collected pursuant to this subsection in the cooperative forestry fund established by section 37-1306.

N. For the purposes of this section:

1. "Electric utility" has the same meaning prescribed in sections 30-901 and 40-1301.

2. "Public power entity" has the same meaning prescribed in sections 30-901 and 40-1301.

3. "Public safety power shutoff" means the intentional temporary shutoff of power during certain weather or environmental conditions to reduce the risk of wildfire.

4. "Wildfire" has the same meaning prescribed in sections 30-901 and 40-1301.

5. "Wildfire mitigation plan" has the same meaning prescribed in section 30-901 or 40-1301.

Article 3 Compact for Interstate Cooperation on Forests

§ 37-1361 Enactment of compact

The compact for interstate cooperation on forests is enacted into law as follows:

Compact for interstate cooperation on forests

I. If federal law permits the forestry agency of two or more party states to assume any delegated agency role in performing any forestry management function on federal lands in that state, those party state agencies may, under concurrent jurisdiction, coordinate and unify the management of the forests that traverse the common boundary between those states including:

(A) Performing all management and administrative functions assigned or delegated by the United States relating to forestry.

(B) Compiling and sharing data and other information, documents and electronic files among the party states and the United States forest service.

(C) Projects for recovery, rehabilitation, maintenance and improvement of forests, watersheds and rangelands damaged by wildfire, drought, disease, pest infestation, depredation and other natural and human causes.

(D) Wildfire prevention and suppression activities.

II. This compact does not authorize:

(A) Any conduct that is illegal in any party state.

(B) The prosecution of any person for conduct that is lawful in the state where it was committed.

III. This compact is ratified by enactment of the language of this compact, or substantially similar language expressing the same purpose, by at least two states that form a common boundary.

Article 3.1 Great Plains Wildland Fire Protection

§ 37-1371 Enactment of compact; authority to join

The governor may enter into a compact on behalf of this state with any other state or states legally joining therein in the form substantially as follows:

Article I

The purpose of this compact is to promote effective prevention and control of forest fires in the great plains region of the United States by maintaining adequate forest firefighting services by the member states and by providing for reciprocal aid in fighting forest fires among the compacting states of the region, including South Dakota, North Dakota, Wyoming, Colorado and any adjoining state of a current member state.

Article II

This compact is operative immediately as to those states ratifying it if any two or more of the member states have ratified it.

Article III

In each state, the state forester or officer holding the equivalent position who is responsible for forest fire control may act as compact administrator for that state, consult with like officials of the other member states and implement cooperation between the states in forest fire prevention and control. The compact administrators of the member states may organize to coordinate the services of the member states and provide administrative integration in carrying out the purposes of this compact. Each member state may formulate and put into effect a forest fire plan for that state.

Article IV

If the state forest fire control agency of a member state requests aid from the state forest fire control agency of any other member state in combating, controlling or preventing forest fires, the state forest fire control agency of that state may render all possible aid to the requesting agency, consonant with maintaining protection at home.

Article V

If the forces of any member state are rendering outside aid pursuant to the request of another member state under this compact, the employees of the state shall, under the direction of the officers of the state to which they are rendering aid, have the same powers (except the power of arrest), duties, rights, privileges and immunities as comparable employees of the state to which they are rendering aid.

A member state and its officers and employees rendering outside aid pursuant to this compact are not liable on account of any act or omission on the part of such forces while so engaged or on account of maintaining or using any equipment or supplies in connection with rendering the outside aid.

All liability, except as otherwise provided in this compact, that may arise either under the laws of the requesting state, under the laws of the aiding state or under the laws of a third state on account of or in connection with a request for aid shall be assumed and borne by the requesting state.

Any member state rendering outside aid pursuant to this compact shall be reimbursed by the member state receiving the aid for any loss or damage to, or expense incurred in the operation of, any equipment used in answering a request for aid, and for the cost of all materials, transportation, wages, salaries and maintenance of employees and equipment incurred in connection with the request. This compact does not prevent any assisting member state from assuming the loss, damage, expense or other cost from loaning the equipment or from donating the services to the receiving member state without charge or cost.

Each member state shall ensure that workers' compensation benefits in conformity with the minimum legal requirements of the state are available to all employees and contract firefighters sent to a requesting state pursuant to this compact.

For the purposes of this compact, "employee" includes any volunteer or auxiliary legally included within the forest firefighting forces of the aiding state under the laws of the aiding state.

The compact administrators may formulate procedures for claims and reimbursement under this article in accordance with the laws of the member states.

Article VI

Ratification of this compact does not affect any existing statute so as to authorize or permit curtailment or diminution of the forest firefighting forces, equipment, services or facilities of any member state.

This compact does not authorize or permit any member state to curtail or diminish its forest firefighting forces, equipment, services or facilities. Each member state shall maintain adequate forest firefighting forces and equipment to meet demands for forest fire protection within its borders in the same manner and to the same extent as if this compact were not operative.

This compact does not limit or restrict the powers of any state ratifying the compact to provide for the prevention, control and extinguishment of forest fires or to prohibit the enactment or enforcement of state laws, rules or regulations intended to aid in the prevention, control and extinguishment in the state.

This compact does not affect any existing or future cooperative relationship or arrangement between the United States forest service and a member state or states.

Article VII

Representatives of the United States forest service may attend meetings of the compact administrators.

Article VIII

The provisions of articles IV and V of this compact that relate to reciprocal aid in combating, controlling or preventing forest fires are operative as between any state party to this compact and any other state that is party to this compact and any other state that is party to a regional forest fire protection compact in another region if the legislature of the other state has given its assent to the mutual aid provisions of this compact.

Article IX

This compact shall continue in force and remain binding on each state ratifying it until the legislature or the governor of the state takes action to withdraw from the compact. Such action is not effective until six months after notice of the withdrawal has been sent by the chief executive of the state desiring to withdraw to the chief executives of all states then parties to the compact.

Article 4 Office of the State Fire Marshal

§ 37-1381 Office of the state fire marshal; purpose; assistant director; qualifications

To promote public health and safety and to reduce hazards to life, limb and property, the office of the state fire marshal is established within the Arizona department of forestry and fire management. The office shall perform its duties by performing inspections and fire investigations, by providing public education and by adopting fire protection codes. The person appointed as assistant director of the office of the state fire marshal shall have extensive experience in the field of fire prevention and fire protection, including administrative experience in such a capacity.

§ 37-1382 Deputy fire marshals and assistants; appointment; duties; recovery of costs

A. With the approval of the state forester, the assistant director of the office of the state fire marshal may:

1. Hire deputy fire marshals who shall have knowledge in the field of fire safety and hire such other assistants and employees as are necessary to properly discharge the duties imposed on the office of the state fire marshal pursuant to this article.

2. Appoint as assistant fire inspectors any of the fire chiefs of a city, town, county, volunteer fire company or protective district or an employee of a private fire service provider who meets the requirements of this section to act within their area of jurisdiction or area of service or on the recommendation of the fire chief appoint other assistant fire inspectors if needed to function within the jurisdiction.

3. Appoint other assistant fire inspectors who meet the requirements of this section as are necessary in areas that are not under the jurisdiction of a fire chief designated in paragraph 2 of this subsection and who may be employees of this state, the federal government or a private fire service provider.

B. Assistant fire inspectors appointed pursuant to subsection A of this section shall carry out their duties only within the geographic areas assigned by the assistant director of the office of the state fire marshal. When designating assistant fire inspectors and when assigning geographic areas, the assistant director of the office of the state fire marshal shall give a preference to assigning assistant fire inspectors to the service area covered by the municipal or private fire service provider where the assistant fire inspector is employed.

C. Assistant fire inspectors appointed under subsection A, paragraph 2 or 3 of this section are not entitled to receive additional compensation for performing duties under this article, except that an employee of a public or private fire service provider who acts as an assistant fire inspector may charge fees to recover costs incurred in conducting inspections or for the review of plans and inspections of property. Assistant fire inspectors appointed under subsection A, paragraph 2 or 3 of this section or fire inspectors appointed pursuant to subsection E of this section shall have attended fire inspector training by an entity that meets nationally recognized standards and is approved by the office of the state fire marshal.

D. An assistant fire inspector who is appointed pursuant to subsection A of this section may inspect property, issue notices of violation and enforce the jurisdiction's fire code. An assistant fire inspector who is appointed pursuant to subsection A of this section shall report all actions taken to the assistant director of the office of the state fire marshal in a manner prescribed by the assistant director.

E. A city, town or county may appoint a fire inspector from one or more public or private fire service providers that service areas in the city, town or county to inspect property. City, town or county fire inspectors may issue notices of violation and enforce the fire code on behalf of the city, town or county within the respective service area of the public or private fire service provider. A fire inspector shall report all actions taken to the city, town or county manager. A fire inspector who is appointed pursuant to this subsection is not entitled to receive additional compensation for performing duties on behalf of the city, town or county, but may charge fees to recover the costs for review of plans and the inspection of public or private premises.

F. The assistant director of the office of the state fire marshal, deputy fire marshals, assistant fire inspectors or a fire inspector who is appointed pursuant to this section may inspect buildings and premises in response to an emergency call or at the request of the occupant of the public or private property.

G. The amount of the fees charged by a fire inspector or an assistant fire inspector shall be available at the office of the state fire marshal or the city, town or county where the property is located.

§ 37-1383 Powers and duties; construction plans and specifications; permit applications; arson investigators

A. Under the authority and direction of the state forester, the assistant director of the office of the state fire marshal or a deputy fire marshal or an assistant fire inspector who is acting at the direction of the assistant director of the office of the state fire marshal shall:

1. Assist in the enforcement of state laws and ordinances of cities and counties relating to fire prevention and fire protection.

2. Adopt by rule a state fire code establishing minimum standards for:

(a) Safeguarding life and property from fire and fire hazards.

(b) The prevention of fires and alleviation of fire hazards.

(c) The storage, sale, distribution and use of dangerous chemicals, combustibles, flammable liquids, explosives and radioactive materials.

(d) The installation, maintenance and use of fire escapes, fire protection equipment, fire alarm systems, smoke detectors and fire extinguishing equipment.

(e) The means and adequacy of fire protection and exit in case of fire in places in which numbers of persons work, live or congregate, excluding family dwellings that have fewer than five residential dwelling units.

(f) Other matters relating to fire prevention and control that are considered necessary by the office of the state fire marshal.

3. Adopt rules and a schedule of fees for permits, plan submissions, plan reviews and reinspections that are payable by persons regulated under this article.

4. Adopt rules for the allocation of monies from the arson detection reward fund established by section 37-1387. The rules shall be consistent with the purposes set forth in section 37-1387 and shall promote the effective and efficient use of the fund monies.

5. Enforce compliance with the fire code adopted pursuant to this subsection throughout this state except in any city with a population of one hundred thousand persons or more that has in effect a nationally recognized fire code, whether modified or unmodified, and that has enacted an ordinance to assume such jurisdiction from the office of the state fire marshal. Such cities do not have authority that supersedes and are not exempt from the state fire code adopted pursuant to paragraph 2 of this subsection in state or county owned buildings wherever located throughout this state.

6. Cooperate and coordinate with other state agencies in the administration of the state fire code.

7. Establish a regularly scheduled fire safety inspection program for all state and county owned public buildings and all public and private school buildings wherever located throughout this state, except for private school buildings in cities with a population of one hundred thousand or more persons.

8. Inspect as necessary all other occupancies located throughout this state, except family dwellings having fewer than five residential dwelling units and occupancies located in cities with a population of one hundred thousand or more persons.

9. At the written request of county or municipal authorities, make and provide to them a written report of the examination made by the office of the state fire marshal of any fire within their jurisdiction.

10. Administer the arson detection reward fund established by section 37-1387.

B. Except as provided in subsection G of this section, all plans and specifications for new construction, remodeling, alterations and additions for state, county and public school buildings and grounds shall be submitted to the state forester for review and approval by the assistant director of the office of the state fire marshal or as authorized to a deputy fire marshal or an assistant fire inspector acting at the direction of the assistant director of the office of the state fire marshal before construction. The state forester shall adopt rules to implement a one-phase and a two-phase construction, remodeling, alteration or addition permit. A person may choose to submit either a one-phase or a two-phase permit application.

C. For a one-phase permit application, within sixty days after receiving a valid permit application, the state forester shall make a final determination to approve or deny the permit application. Construction may not commence until the plans have been approved and a permit has been issued or unless the state forester has not taken action on a permit application within sixty days after receiving a valid application.

D. For a two-phase application, within thirty days after receiving a valid permit application, the state forester shall review the plans and specifications and make an initial determination to approve or deny the permit. Within sixty days after a valid submission, the state forester shall make a final determination to approve or deny the permit application. Construction shall not commence beyond the constraints of phase one until the plans have been approved and a permit has been issued or unless the state forester has not taken action on phase two of a permit application within sixty days after receiving a valid application.

E. Under the authority and direction of the state forester, the assistant director of the office of state fire marshal or a deputy fire marshal or an assistant fire inspector acting at the direction of the assistant director of the office of the state fire marshal may:

1. Conduct or participate in investigations of causes, origins and circumstances of fires, including cases of possible arson.

2. Prescribe a uniform system of reporting fires and their causes and effects.

3. Provide and coordinate training in firefighting and fire prevention and cooperate with educational institutions to provide and further such training.

4. Impound necessary evidence in conjunction with investigations of causes, origins and circumstances of fires if that evidence might be lost, destroyed or otherwise altered if not impounded.

5. Employ specialized testing services to evaluate evidence and conditions involved in fire investigations.

6. Designate certain members of the office of the state fire marshal's staff or a deputy fire marshal or an assistant fire inspector as arson investigators.

F. The primary duty of investigators designated pursuant to subsection E, paragraph 6 of this section is the investigation, detection and apprehension of persons who have violated or are suspected of violating any provision of title 13, chapter 17. A person designated as an arson investigator, while engaged in arson investigation in this state, possesses and may exercise law enforcement powers of peace officers of this state. This subsection does not grant any powers of peace officers of this state to arson investigators other than those necessary for the investigation, detection and apprehension authority granted by this subsection. Any individual designated as an arson investigator shall have law enforcement training under section 41-1822.

G. A city or town may allow all plans and specifications for new construction, remodeling, alterations and additions for municipal or private buildings and grounds to be submitted to the city or town for review and approval by a person designated by the city or town as knowledgeable of the state fire code. If the city or town adopts a process to approve construction permits pursuant to this subsection, the plans and specifications shall be reviewed and approved or disapproved within sixty days after submission. Construction shall not commence until the plans and specifications have been approved and a permit has been issued.

§ 37-1384 Inspection; consent; search warrant

A. The assistant director of the office of the state fire marshal, a deputy fire marshal or an assistant fire inspector may investigate fire damage and shall carry out periodic inspection programs of buildings and premises to examine or inspect for fire hazards.

B. In carrying out such inspections or investigations, the assistant director of the office of the state fire marshal, a deputy fire marshal or an assistant fire inspector shall identify himself to the owner or tenant of the building or premises and seek the consent of the owner or tenant to carry out such an inspection. If consent is refused, or if it is not possible to reasonably obtain consent, the assistant director of the office of the state fire marshal, deputy fire marshal or an assistant fire inspector shall obtain a search warrant for the building or property in compliance with title 13, chapter 38, article 8.

C. If the assistant director of the office of the state fire marshal is assisting a local fire department in an investigation of fire damage, the authority of the local fire department to investigate the fire damage shall be deemed to include the assistant director of the office of the state fire marshal, deputy fire marshal or an assistant fire inspector.

§ 37-1385 School protection; definition

A. The assistant director of the office of the state fire marshal, deputy fire marshal or an assistant fire inspector shall enforce rules and regulations for establishing programs for evacuating school buildings and for instructing all students in public and private schools as to proper methods of fire prevention and control and of the importance thereof. Such rules, regulations and programs shall be transmitted to the department of education for distribution to those schools.

B. For the purposes of this article, "school" means an educational institution of any description, public or private, wherever situated in this state.

§ 37-1386 Construction of article; hazardous materials; electronic filing

A. This article does not prohibit cities subject to this article, towns or volunteer fire districts from enacting ordinances, resolutions, rules or regulations with regard to fire protection or prevention pursuant to other provisions of law or charter, provided such ordinances, resolutions, rules or regulations are equal to or exceed minimum standards imposed pursuant to this article.

B. A facility that is located in a city or town with a population of seventy-five thousand persons or more, in conjunction with the local fire department or fire district, may deliver hazardous materials management plans and hazardous materials inventory statements electronically.

C. Nothing in this section prohibits a local fire department or fire district from requiring electronic filing of hazardous materials management plans and hazardous materials inventory statements.

§ 37-1387 Arson detection reward fund; administration; purpose; receipts and disbursements

A. The arson detection reward fund is established and shall be administered within the guidelines of this section and rules of the office of state fire marshal.

B. The advisory committee on arson prevention established by the office of the state fire marshal shall provide rewards of not to exceed ten thousand dollars for information concerning a violation of any provision of title 13, chapter 17 relating to arson. The reward amounts shall be based on the value of the information, the availability of information from other sources and other factors deemed relevant by the committee.

C. The advisory committee is subject to title 38, chapter 3, article 3.1 and title 39, chapter 1, article 2, except that the advisory committee shall not disclose records that:

1. Reveal the identity of a confidential informant.

2. Endanger the life or physical safety of any person.

3. Jeopardize any ongoing criminal investigation.

D. Payment of rewards shall be from available funds consisting of:

1. Fines imposed by a court for an offense set forth in title 13, chapter 17. Notwithstanding section 13-811, the municipal, justice or superior court imposing and collecting such fine shall transfer the monies to the appropriate county treasurer who shall transfer the amount to the state treasurer for deposit in the arson detection reward fund.

2. Monies from forfeiture of bail posted in connection with an offense set forth in title 13, chapter 17. All amounts recovered by the prosecutor on an appropriate order of judgment forfeiting all or part of the amount of the bond shall be transferred to the appropriate county treasurer who shall transfer the amount to the state treasurer for deposit in the arson detection reward fund.

3. Monies received from donations to the fund.

4. Monies appropriated by the legislature for the purposes of this section.

E. Monies may be expended only for payment of rewards and promotion of public awareness of the arson detection reward fund.

F. Balances in the fund remaining at the end of the fiscal year are exempt from section 35-190, relating to lapsing of appropriations.

§ 37-1388 Fire protection systems; definitions

A. All backflow prevention equipment installed on class 1 and class 2 fire protection systems shall comply with state fire code standards.

B. Check valve assemblies installed on class 1 or class 2 fire protection systems as backflow protection equipment pursuant to this section shall be inspected and maintained in accordance with the state fire code. Inspections of check valve assemblies installed on class 1 or class 2 fire protection systems shall be performed on an annual basis with records of the inspections provided to the local fire department and drinking water provider.

C. Any malfunction or abnormality with a check valve assembly installed on class 1 or class 2 fire protection systems shall be reported within twenty-four hours to the local fire department and drinking water provider.

D. A fire code authority may establish guidelines for the installation of backflow prevention equipment on a class 1 or class 2 fire protection system that exceeds the minimum standards established by the state fire code if the backflow prevention equipment is approved for use on class 1 or class 2 fire protection systems pursuant to the state fire code.

E. A fire code authority or a drinking water provider may require the installation of backflow prevention equipment on class 1 and class 2 fire protection systems that exceeds the minimum standards established by the state fire code if a special backflow condition is identified. The use of nonpotable pipe in a fire protection system does not by itself constitute a special backflow condition. The drinking water provider shall consult with the fire code authority and provide the fire code authority with an opportunity to comment before installing or requiring the installation of backflow equipment that exceeds the minimum standards established by the state fire code.

F. For the purposes of this section:

1. "Class 1 fire protection system" means a fire protection system that is directly connected to a public water main and on which all sprinkler drains discharge into the atmosphere, dry wells or other safe outlets. Class 1 fire protection system does not include a system that has a connection with pumps, tanks, reservoirs or other water supplies, or a system that contains antifreeze or other additives.

2. "Class 2 fire protection system" means a class 1 fire protection system with booster pumps installed in the connections from the street mains.

3. "Fire code authority" means the assistant director of the office of the state fire marshal or the assistant director's designee, except that for an incorporated city or town with a population of at least one hundred thousand persons that has adopted an ordinance pursuant to section 37-1383, subsection A, fire code authority means the municipal fire chief or the fire chief's designee.

4. "Special backflow condition" means a condition that exists at the site of a class 1 or class 2 fire protection system and that may present a contamination hazard to the domestic water supply, including:

(a) Underground fire protection system lines that are parallel to and within six feet horizontally of sewer lines or other lines carrying toxic materials.

(b) The use, storage or handling of materials on a site by a property owner or occupant that could present a significant health hazard to the domestic water supply.

(c) The presence of unusually complex piping systems.

(d) Water supplied to a site or an area from either:

(i) Two or more services of a water utility.

(ii) Two different water utilities.

(iii) A supplemental water supply.

§ 37-1389 Substitute refrigerants; approval by administrator

A person shall not use, sell or offer to sell a product intended for use as a refrigerant for any motor vehicle, residential, commercial or industrial air conditioning system, refrigerator or other cooling or heating device unless it has been approved for use by the administrator of the United States environmental protection agency or it meets one of the following standards relating to flammability:

1. SAE J639.

2. SAE J1657.

3. ASHRAE standard 34-1992.

4. UL2182.

5. ASTM E681-85.

§ 37-1390 Safety standards in fire training

All training provided by the state forester shall comply with the safety standards prescribed by the national fire protection association and the occupational safety and health administration regulations of this state.

§ 37-1391 Cease and desist order; law enforcement procedures; violation; civil penalty

A. If the state forester, the assistant director of the office of the state fire marshal or a deputy fire marshal has reasonable cause to believe that any person has committed or is committing a violation of this article, any rule adopted pursuant to this article or any order issued pursuant to this article that does not constitute an immediate and apparent hazard to life or property, the assistant director through the state forester may issue and serve on the person by certified mail a cease and desist order.

B. If the violation does not constitute an immediate hazard to life or property, the assistant director of the office of the state fire marshall shall grant to the person whom the assistant director alleges to be in violation of any rule or order a reasonable period of time, which is not less than five days after the date of receipt of the notice, to comply with the order.

C. On the failure or refusal of a person to comply with a cease and desist order issued pursuant to subsection A of this section, the state forester may file an action in the superior court in the county in which the violation is alleged to have occurred to enjoin the person from engaging in further acts in violation of the cease and desist order. The court shall proceed as in other actions for preliminary injunction. Any person found to be in contempt of an injunctive order of the court shall be assessed a civil penalty of not more than one thousand dollars with each day of violation constituting a separate contempt.

D. If the state forester, the assistant director of the office of the state fire marshall or a deputy fire marshall has reasonable cause to believe that any person has committed or is committing a violation of this article, any rule adopted pursuant to this article or any order issued pursuant to this article that constitutes an immediate and apparent hazard to life or property, the assistant director through the state forester may either:

1. Issue and serve by personal service a cease and desist order, which may require immediate compliance. On failure of a person to comply with a cease and desist order issued pursuant to this paragraph, the state forester shall file an action in the superior court in the county where the violation occurred to enjoin the person from engaging in further acts in violation of the cease and desist order.

2. File an action in the superior court in the county in which the violation is alleged to have occurred to enjoin a person from engaging in further acts in violation of the rule or order without issuing a cease and desist order.

E. In an action filed under subsection D of this section, the court shall proceed as in other actions for preliminary injunction. Any person found to be in contempt of an injunctive order of the court shall be assessed a civil penalty of not more than one thousand dollars with each day of violation constituting a separate contempt.

F. A person who is served with a cease and desist order pursuant to this section may request a hearing pursuant to title 41, chapter 6, article 10.

Article 5 Reduced Cigarette Ignition Propensity

§ 37-1401 Definitions

(Conditionally Rpld.)

In this article, unless the context otherwise requires:

1. "Agent" means a person who is authorized by the department of revenue to purchase and affix stamps on packages of cigarettes.

2. "Cigarette" means any roll of tobacco or any substitute for tobacco wrapped in paper or any substance not containing tobacco.

3. "Manufacturer" means:

(a) An entity that manufactures or otherwise produces cigarettes or causes cigarettes to be manufactured or produced anywhere and that the manufacturer intends to be sold in this state, including cigarettes that are intended to be sold in the United States through an importer.

(b) The first purchaser anywhere that intends to resell in the United States cigarettes that are manufactured anywhere and that the original manufacturer or maker does not intend to be sold in the United States.

(c) A successor entity to an entity described in subdivision (a) or (b) of this paragraph.

4. "Quality control and quality assurance program" means the laboratory procedures implemented to ensure:

(a) That operator bias, systematic and nonsystematic methodological errors and equipment-related problems do not affect the results of the testing.

(b) That the testing repeatability remains within the required repeatability values prescribed in section 37-1402, subsection B, paragraph 6 for all test trials that are used to certify cigarettes pursuant to this article.

5. "Repeatability" means the range of values within which the repeat results of cigarette test trials from a single laboratory will fall ninety-five percent of the time.

6. "Retailer" means any person, other than a manufacturer or wholesaler, who is engaged in selling cigarettes or tobacco products.

7. "Sale" means a transfer of title or possession, or both, or an exchange or barter, conditional or otherwise, in any manner or by any means whatever or any agreement to transfer, exchange or barter. Sale includes the giving of cigarettes as samples, prizes or gifts and the exchanging of cigarettes for any consideration other than money.

8. "Sell" means to sell or to offer or agree to sell.

9. "Wholesaler" means a person, other than a manufacturer, who sells cigarettes or tobacco products to retailers or other persons for resale, and any person who owns, operates or maintains one or more cigarette or tobacco product vending machines in, at or on premises owned or occupied by any other person.

§ 37-1402 Test method and performance standard; civil penalty; reports

(Conditionally Rpld.)

A. Except as provided in subsection I of this section, cigarettes may not be sold or offered for sale in this state or offered for sale or sold to persons located in this state unless both of the following occur:

1. The cigarettes are tested pursuant to the test method prescribed in this section and meet the performance standard prescribed in this section.

2. The manufacturer files a written certification with the office of the state fire marshal pursuant to section 37-1403 and marks the cigarettes pursuant to section 37-1404.

B. The tests prescribed in subsection A, paragraph 1 of this section shall conform to the following standards:

1. Testing of cigarettes shall be conducted pursuant to the American society of testing and materials standard E2187-04, "standard test method for measuring the ignition strength of cigarettes".

2. Testing shall be conducted on ten layers of filter paper.

3. Not more than twenty-five percent of the cigarettes tested in a test trial pursuant to this section shall exhibit full-length burns. Forty replicate tests comprise a complete test trial for each cigarette tested.

4. The performance standard required by this subsection is applied only to a complete test trial.

5. Written certifications shall be based on testing conducted by a laboratory that has been accredited pursuant to standard ISO/IEC 17025 of the international organization for standardization or another comparable accreditation standard required by the office of the state fire marshal.

6. Laboratories conducting testing pursuant to this subsection shall implement a quality control and quality assurance program that includes a procedure that will determine the repeatability of the testing results. The repeatability value shall not be greater than 0.19.

7. Additional testing is not required if cigarettes are tested consistent with this article for any other purpose.

8. Testing performed or sponsored by the office of the state fire marshal to determine a cigarette's compliance with the performance standard required by this subsection shall be conducted pursuant to this subsection.

C. Each cigarette listed in a certification submitted pursuant to section 37-1403 that uses lowered permeability bands in the cigarette paper to achieve compliance with the performance standard prescribed in this section shall have at least two nominally identical bands on the paper surrounding the tobacco column. At least one complete band shall be located at least fifteen millimeters from the lighting end of the cigarette. For cigarettes on which the bands are positioned by design, there shall be at least two bands fully located at least fifteen millimeters from the lighting end and ten millimeters from the filter end of the tobacco column or ten millimeters from the labeled end of the tobacco column for nonfiltered cigarettes.

D. A manufacturer of a cigarette that the office of the state fire marshal determines cannot be tested pursuant to the test method prescribed in subsection B, paragraph 1 of this section shall propose a test method and performance standard for the cigarette to the office of the state fire marshal. On approval of the proposed test method and a determination by the office of the state fire marshal that the performance standard proposed by the manufacturer is equivalent to the performance standard prescribed in subsection B, paragraph 3 of this section, the manufacturer may employ that test method and performance standard to certify the cigarette pursuant to section 37-1403. If the office of the state fire marshal determines that another state has enacted reduced cigarette ignition propensity standards that include a test method and performance standard that are the same as those prescribed in this article, and the office of the state fire marshal finds that the officials responsible for implementing those requirements have approved the proposed alternative test method and performance standard for a particular cigarette proposed by a manufacturer as meeting the fire safety standards of that state's law or regulation under a legal provision comparable to this section, the office of the state fire marshal shall authorize that manufacturer to employ the alternative test method and performance standard to certify that cigarette for sale in this state, unless the office of the state fire marshal demonstrates a reasonable basis why the alternative test should not be accepted pursuant to this article. All other applicable requirements of this section apply to the manufacturer.

E. Each manufacturer shall maintain copies of the reports of all tests conducted on all cigarettes offered for sale for three years and shall make copies of these reports available to the office of the state fire marshal and the attorney general on written request. Any manufacturer that fails to make copies of these reports available within sixty days after receiving a written request is subject to a civil penalty of not to exceed ten thousand dollars for each day after the sixtieth day that the manufacturer does not make the copies available.

F. The office of the state fire marshal may adopt a subsequent American society of testing and materials standard test method for measuring the ignition strength of cigarettes on a finding that the subsequent method does not result in a change in the percentage of full-length burns exhibited by any tested cigarette if compared to the percentage of full-length burns the same cigarette would exhibit if it were tested pursuant to the American society of testing and materials standard E2187-04 and the performance standard prescribed in subsection B, paragraph 3 of this section.

G. The office of the state fire marshal shall review the effectiveness of this section and report every three years to the legislature on the office of the state fire marshal's findings and any recommendations for legislation to improve the effectiveness of this section. The office of the state fire marshal shall submit the report and legislative recommendations on or before July 1 of each three-year period.

H. The office of the state fire marshal shall notify the governor, the speaker of the house of representatives and the president of the senate in writing immediately after a federal reduced cigarette ignition propensity standard that preempts the standard prescribed in this article becomes effective.

I. This section does not prohibit either of the following:

1. Wholesalers or retailers from selling their existing inventory of cigarettes on or after August 1, 2009 if the wholesaler or retailer can establish that state tax stamps were affixed to the cigarettes before August 1, 2009 and the wholesaler or retailer can establish that the inventory was purchased before August 1, 2009 in comparable quantity to the inventory purchased during the same period of the prior year.

2. The sale of cigarettes solely for the purpose of consumer testing. For the purposes of this paragraph, "consumer testing" means an assessment of cigarettes that is conducted by a manufacturer, or under the control and direction of a manufacturer, for the purpose of evaluating consumer acceptance of the cigarettes, using only the quantity of cigarettes that is reasonably necessary for such an assessment.

§ 37-1403 Certification; product change; fee

(Conditionally Rpld.)

A. Each manufacturer shall submit to the office of the state fire marshal a written certification attesting that each cigarette listed in the certification:

1. Has been tested pursuant to section 37-1402.

2. Meets the performance standards prescribed in section 37-1402.

B. The manufacturer shall describe each cigarette listed in the certification with the following information:

1. Brand or trade name on the package.

2. Style, such as light or ultra light.

3. Length in millimeters.

4. Circumference in millimeters.

5. Flavor, such as menthol or chocolate, if applicable.

6. Filter or nonfilter.

7. Package description, such as soft pack or box.

8. Marking approved pursuant to section 37-1404.

9. Name, address and telephone number of the laboratory, if different than the manufacturer that conducted the test.

10. Date that the testing occurred.

C. A manufacturer shall recertify each cigarette certified under this section every three years.

D. A manufacturer shall make the certifications available to the attorney general for purposes consistent with this article and the department of revenue for the purposes of ensuring compliance with this section.

E. If a manufacturer has certified a cigarette pursuant to this section and after certification makes any change to the cigarette that is likely to alter its compliance with the reduced cigarette ignition propensity standards prescribed by this article, that cigarette shall not be sold or offered for sale in this state until the manufacturer retests the cigarette pursuant to the testing standards prescribed in section 37-1402 and maintains records of that retesting as required by section 37-1402. Any altered cigarette that does not meet the performance standard prescribed in section 37-1402 may not be sold in this state.

F. The office of the state fire marshal may adopt rules requiring each manufacturer to pay to the office of the state fire marshal a fee of two hundred fifty dollars per brand family of cigarettes certified in compliance with this section. The fee applies to all cigarettes within the brand family certified and includes any new cigarette brand style within the brand family during the three-year certification period.

§ 37-1404 Markings; requirements; office of the state fire marshal approval

(Conditionally Rpld.)

A. A manufacturer shall mark cigarettes that are certified pursuant to section 37-1403 to indicate compliance with section 37-1402. The marking shall be in at least eight-point type and shall consist of either:

1. Modification of the product UPC code to include a visible mark printed at or around the area of the UPC code. The mark may consist of alphanumeric or symbolic characters permanently stamped, engraved, embossed or printed in conjunction with the UPC code.

2. Any visible combination of alphanumeric or symbolic characters permanently stamped, engraved or embossed on the cigarette package or cellophane wrap.

3. Printed, stamped, engraved or embossed text that indicates that the cigarettes meet the standards of this section.

B. A manufacturer shall use only one marking and shall apply this marking uniformly for all packages, including packs, cartons and cases, and brands marketed by that manufacturer.

C. Before the certification of any cigarette, a manufacturer shall present its proposed marking to the office of the state fire marshal for approval. Proposed markings are deemed approved if the office of the state fire marshal fails to act within ten business days after receiving a request for approval. On receipt of the request, the office of the state fire marshal shall approve or disapprove the marking offered, except that the office of the state fire marshal shall approve either of the following:

1. Any marking in use and approved for sale in New York state pursuant to the New York fire safety standards for cigarettes in section 156-c of the New York executive law and part 429 of title 19 of the New York Code of Rules and Regulations.

2. The letters "FSC", which signify fire standards compliant, appearing in eight-point type or larger and are permanently printed, stamped, engraved or embossed on the package at or near the UPC code.

D. A manufacturer shall not modify its approved marking unless the modification has been approved by the office of the state fire marshal pursuant to this section.

E. Manufacturers certifying cigarettes pursuant to section 37-1403 shall provide a copy of the certifications to all wholesalers and agents to whom they sell cigarettes and shall also provide sufficient copies of an illustration of the package marking used by the manufacturer pursuant to this section for each retailer to whom the wholesalers or agents sell cigarettes. Wholesalers and agents shall provide a copy of these package markings received from manufacturers to all retailers to whom they sell cigarettes. Wholesalers, agents and retailers shall permit the office of the state fire marshal, the department of revenue or the attorney general, or their employees, to inspect markings of cigarette packaging marked pursuant to this section.

§ 37-1405 Civil penalties; seizure

(Conditionally Rpld.)

A. A manufacturer, wholesaler, agent or other person or entity that knowingly sells or offers to sell cigarettes, other than through retail sale, in violation of section 37-1402 is subject to a civil penalty of not to exceed one hundred dollars for each pack of cigarettes sold or offered for sale. This penalty shall not exceed twenty-five thousand dollars during any thirty-day period.

B. A retailer who knowingly sells or offers to sell cigarettes in violation of section 37-1402 is subject to a civil penalty of not to exceed one hundred dollars for each pack of cigarettes sold or offered for sale. This penalty shall not exceed one thousand dollars during any thirty-day period.

C. In addition to any penalty prescribed by law, any corporation, partnership, sole proprietor, limited partnership or association that is engaged in the manufacture of cigarettes and that knowingly makes a false certification pursuant to section 37-1403 is subject to a civil penalty of at least twenty-five thousand dollars but not more than one hundred thousand dollars for each false certification.

D. A person who violates any other provision of this article is subject to a civil penalty for a first offense of not to exceed one thousand dollars and a civil penalty of not to exceed five thousand dollars for each subsequent violation.

E. Any cigarettes that have been sold or offered for sale and that do not comply with the performance standard prescribed by section 37-1402 are subject to forfeiture and, on forfeiture, shall be destroyed. Before the destruction of any forfeited cigarette, the true holder of the trademark rights in the cigarette brand may inspect the cigarette.

F. In addition to any other remedy provided by law, the state forester or the attorney general may file an action in the superior court for injunctive relief or to recover any costs or damages suffered by this state because of a violation of this section, including enforcement costs relating to the specific violation and attorney fees. Each violation of this section or rules adopted pursuant to this section is a separate civil violation for which the state forester or attorney general may obtain relief.

G. If a law enforcement officer or duly authorized representative of the office of the state fire marshal discovers cigarettes that have not been marked as required by section 37-1404, the officer or representative shall notify the department of revenue and may seize and take possession of the cigarettes. The cigarettes shall be turned over to the department of revenue and shall be forfeited to the state. Cigarettes seized pursuant to this section shall be destroyed. Before the destruction of any seized cigarette, the true holder of the trademark rights in the cigarette brand may inspect the cigarette.

§ 37-1406 Implementation; rulemaking; inspection of cigarettes; definitions

(Conditionally Rpld.)

A. The office of the state fire marshal shall implement this article pursuant to the implementation and substance of the New York fire safety standards for cigarettes in section 156-c of the New York executive law and part 429 of title 19 of the New York Code of Rules and Regulations.

B. The office of the state fire marshal may adopt rules to enforce this article.

C. As authorized pursuant to section 42-3151, the department of revenue in the regular course of conducting inspections of distributors and retailers may inspect cigarettes to determine whether the cigarettes are marked as required by section 37-1404. If the cigarettes are not marked as required, the department of revenue shall notify the office of the state fire marshal.

D. An agent of the department of revenue who is also a law enforcement agent or investigator may conduct inspections pursuant to section 37-1405, subsection G.

E. For the purpose of this section, "cigarette", "distributor" and "retailer" have the same meanings prescribed in section 42-3001.

§ 37-1407 Inspection

(Conditionally Rpld.)

To enforce this article, the attorney general and the office of the state fire marshal under the authority and direction of the state forester, or their employees, may examine the books, papers, invoices and other records of any person in possession, control or occupancy of any premises where cigarettes are placed, stored, sold or offered for sale, as well as the stock of cigarettes on the premises. Each person in the possession, control or occupancy of any premises where cigarettes are placed, sold or offered for sale shall allow the attorney general and the office of the state fire marshal, or their employees, the means, facilities and opportunity for the examinations authorized by this section.

§ 37-1408 Sale outside of state

(Conditionally Rpld.)

This article does not prohibit any person or entity from manufacturing or selling cigarettes that do not meet the requirements of section 37-1402 if the cigarettes are or will be stamped for sale in another state or are packaged for sale outside of the United States and that person or entity has taken reasonable steps to ensure that the cigarettes will not be sold or offered for sale to persons in this state.

§ 37-1409 State preemption

The legislature finds that the safety standards prescribed in this article are of statewide concern. This article preempts regulation by a political subdivision of this state regarding the cigarette ignition propensity safety standards prescribed in this article.

Article 6 Trampoline Courts

§ 37-1421 Definition of trampoline court

In this article, unless the context otherwise requires, "trampoline court":

1. Means a commercial facility with a defined area composed of one or more trampolines, a series of trampolines, a trampoline court foam pit or a series of trampoline court foam pits.

2. Does not include:

(a) Any playground operated by a school or local government.

(b) Inflatable rides, inflatable bounce houses, ball crawls and equipment used exclusively for exercise.

(c) A physical rehabilitation facility.

(d) A gymnastic training facility that derives a majority of its revenue from supervised instruction in the teaching of gymnastic skills and basics.

§ 37-1422 Duties; fund

A. The state forester shall:

1. Administer and enforce this article, including adopting rules necessary to administer and enforce this article.

2. Establish fees for the initial registration and renewal of registration of trampoline courts in amounts to be determined by the state forester. The state forester shall deposit, pursuant to sections 35-146 and 35-147, all fees received pursuant to this section in the trampoline court safety fund established by this section.

3. Request from each trampoline court owner or operator information to determine that the insurance required by this article is in effect and that the trampoline court has been inspected at least annually.

4. Maintain a registry of all trampoline courts.

5. Maintain as public record proof of insurance, service calls to emergency responders and inspection certificates that are issued by an insurer or an inspector with whom the insurer has contracted and records for each trampoline court that is registered pursuant to this article.

B. The trampoline court safety fund is established consisting of monies received pursuant to this section. The state forester shall administer the fund and use the monies in the fund to implement this article.

§ 37-1423 Registration; renewal

A. At least thirty days before operation an owner or operator of a trampoline court must register with and submit to the state forester all of the following:

1. An application for registration on a form prescribed by the state forester and the fee prescribed by section 37-1422.

2. Proof of insurance as required by this article.

3. A copy of an inspection certificate that is issued by an insurer or an inspector with whom the insurer has contracted.

4. A copy of the owner's or operator's business license.

B. A registrant must renew its registration annually by submitting an application for renewal as prescribed by the state forester and the renewal fee prescribed by section 37-1422.

§ 37-1424 Trampoline court owners and operators; requirements; denial of entry; rules

A. A trampoline court owner or operator shall:

1. Have the trampoline court inspected at least once each year by an insurer or an inspector with whom the insurer has contracted. If an inspection reveals that any component of the trampoline court does not substantially meet the American society for testing and materials standards, the inspector shall notify the state forester and the owner or operator and shall not issue the written certificate of inspection for that component of the trampoline court until the owner or operator meets the standards and makes the repairs or installs the replacement equipment.

2. Maintain at all times a written certificate of the annual inspection.

3. Procure insurance for the trampoline court from an insurer authorized to do business in this state pursuant to section 20-217 or by an insurer on the list of qualified unauthorized insurers pursuant to section 20-413, insuring the owner or operator against liability for injury to persons arising from the use of the trampoline court, in an amount of not less than one million dollars for bodily injury.

4. Maintain and display at all times the certificate of registration.

5. Maintain for a period of at least two years accurate records of any governmental action taken relating to the trampoline court, including any operation permits, insurance certificates, inspection reports, service calls to emergency responders, maintenance and operational records and records documenting the repair or replacement of equipment used in the operation of the trampoline court. The owner or operator of the trampoline court shall provide a copy of these records to the state forester on request when the owner or operator applies for initial registration and when the owner or operator applies for registration renewal.

6. Maintain for a period of at least two years accurate records of service calls to emergency responders from the trampoline court. Within ten days after a trampoline court makes a service call to an emergency responder, an owner or operator of the trampoline court shall provide a copy of the service call records to the state forester. The service call records are public records.

B. A registrant must notify the state forester within thirty days after any changes to the information that the registrant submitted to the state forester with the registrant's initial registration application or registration renewal application.

C. A trampoline court owner or operator may deny a person entry to the trampoline court if the owner or operator believes that the entry may jeopardize the safety of the person or any other trampoline court patron.

D. A trampoline court patron shall follow all rules that are posted or provided in writing to the patron by the trampoline court owner or operator. The rules must include a statement that there are inherent risks in the participation in a trampoline court activity or on any trampoline court and that a trampoline court patron, by participation, understands the risks inherent in the participation of which the ordinary prudent person is or should be aware. The rules must specify that a trampoline court patron:

1. Shall:

(a) Exercise good judgment and act in a responsible manner while using a trampoline court and obey all oral or written warnings before and during participation.

(b) Meet height, weight and age restrictions imposed by the owner to use the trampoline court or participate in the trampoline court activity.

2. Shall not:

(a) Participate in a trampoline court activity or on any trampoline court when under the influence of drugs or alcohol.

(b) Participate in a trampoline court activity or on any trampoline court if the patron may be pregnant, has had recent surgery, has a preexisting medical condition, circulatory condition, heart or lung condition, back or neck condition or history of spine, musculoskeletal or head injuries or has high blood pressure.

§ 37-1425 Enforcement

A. The state forester may determine compliance with this article, prohibit the operation of any trampoline court that is not in compliance with this article and institute an action in a court of competent jurisdiction to enforce this article.

B. On request, the owner or operator of a trampoline court shall provide the registration certificate, inspection certificate that is issued by an insurer or an inspector with whom the insurer has contracted and insurance certificate to the state forester. A copy of the documents may be provided instead of originals.

§ 37-1426 Trampoline court regulation; state preemption

The regulation of trampoline courts is of statewide concern. The regulation of trampoline courts pursuant to this article is not subject to further regulation by a county, city, town or other political subdivision of this state.