Republican state lawmakers want to impose new regulations on the Arizona State Land Department following multiple poor performance audits.
The audits outline 51 total recommendations to address a variety of issues, including a large backlog of pending applications for land leases.
Critics of the department say those issues are preventing land from being used for needed affordable housing, and cutting down on state revenue. The land department funds a large chunk of public education in Arizona.
“The Department can improve housing supply and education funding today by selling more land and ending the internal practices that keep projects stalled,” Rep. Gail Griffin (R-Hereford) said in a statement.
The department’s last “disposition plans” for state land expired in 2016, even though the plans are required. The plans outline zoning and development requirements and illustrate the potential value of the land.
“It’s clear the Department’s problems are longstanding and cultural. The Department still lacks consistent long-term planning. Applications remain pending without final written decisions. Regulatory practices continue without written processes and procedures. The result is lost revenue, mission creep, due process violations, and added strain on Arizona’s housing supply at a time when land scarcity is already driving up costs,” House Republicans said of the agency in a statement on Friday.
Rep. Teresa Martinez (R-Casa Grande) and her colleagues said the agency needs to prioritize certain industries.
“I think we need a complete overhaul of this agency,” Martinez said. “I think we need to have more partnerships with mines, ag, business, housing, etc.”
Republicans also accused Gov. Katie Hobbs’ administration of prioritizing wind and solar projects.
The land department has fallen short for many years, but there’s a renewed push against the agency this session.
Republicans want to give the agency a shortened, four-year “continuation.” That means the department will be under the Legislature’s scrutiny again in 2030, instead of being allowed to continue for eight years as most agencies are.
Democrats oppose the shortened continuation because the department is already working to implement requested changes. They questioned why GOP lawmakers want to hold the agency’s feet to the fire now.
Without a continuation, the agency will shut down at the end of this year.
“We have seen that there is oversight in place. … We saw today, some very responsive, serious and thoughtful answers from the director,” Rep. Chris Mathis (D-Tucson) said.
Some of the bills proposed by GOP lawmakers this year would require the agency to take action on applications within a set time frame, establish an elected state land oversight board, and require the agency to prioritize applications for mining projects.
Coyotes stadium
One point of consternation for lawmakers was the proposed Coyotes stadium.
Two years ago, the Arizona hockey team took an interest in buying state land in north Phoenix to build a new stadium, but the team opted to leave Arizona instead after the state land auction was delayed, and multiple municipalities rejected the idea of building a hockey stadium for the team.
Lawmakers questioned State Land Commissioner Robyn Sahid about the land auction.
“Why did you bail on the Coyotes?” Martinez asked her at a hearing on Thursday.
Sahid told her that because of Phoenix zoning laws, the Coyotes would have needed a special-use permit to build their proposed stadium. The land ultimately went to a Minnesota-based company.
Fondomonte leases
A Saudi-Arabian based alfalfa farming operation called Fondomonte has been a focus for lawmakers for the last four years.
Fondomonte leases state land and uses groundwater to grow alfalfa. A state audit in 2024 determined the land department’s agricultural leases are below market rates, causing the state to lose out on revenue.
In 2023, Hobbs terminated one of Fondomonte’s leases and chose not to renew a handful of others. The land department paid Fondomonte $7 million in reimbursement for improvements. Sahid told lawmakers that’s because reimbursing agricultural leases is a requirement in state law.
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