Section R12-5-703. Commercial Leases

A.      Scope of commercial leasing rules. An applicant for a com- mercial lease shall be subject to the general leasing rules enu- merated, supra. Such applicant shall also be subject to the commercial leasing rules set out, infra. In a commercial leas- ing situation where the general leasing rules and the commer- cial leasing rules conflict, the latter rules shall be controlling.

B.       Lands subject to commercial lease. All state lands classified as suitable for commercial purposes are subject to a commercial lease. Unless it is deemed to be for the best interests of the state, it is not the policy of the State Land Department to allow and issue commercial leases which will seriously interfere with, damage, or break up operations of an established ranch or farm unit. There is no limit to the amount of commercial land that may be leased to any one individual, corporation, partnership or association.

C.      Term of commercial lease. State lands suitable for commercial purposes may be leased for a period of not more than ten years without advertising, or subject to such lesser term as may be

established by the Commissioner if he deems such lesser term to be in the best interests of the state.

D.      Applications to lease state lands not classified as commercial. Applications to lease lands not classified as commercial shall be accompanied by a petition for reclassification as provided by the general leasing rules.

E.       Application for commercial lease; application for commercial lease renewal. All applications for commercial leases and all applications for renewal of commercial leases shall be made on such form or forms as may from time to time be prescribed by the Commissioner and provided by the Commissioner. A commercial lease before the time of execution or renewal will be subject to the provisions and supplemental conditions and restrictions as may be added thereto and the provisions of law and these rules.

F.       Additional conditions for commercial leases.

1.        Unless otherwise directed by the Commissioner in writ- ing, the lessee shall:

a.         Notify the Commissioner in writing as to the number of any license issued by the state Tax Commission of Arizona to the lessee, any sublessee, any conces- sionaire or any assignee; such notice shall also include the exact name in which license is issued.

b.        Keep and maintain an accounting system satisfac- tory to the Commissioner.

c.         Allow access to accounting records during business hours where the same are kept for the purpose of inspecting and auditing the same.

d.        File with the Commissioner, if requested by the Commissioner, a statement of the total gross sales made for the period specified. Unless otherwise directed by the Commissioner, this report may be made by filing with the Commissioner the requested information on the form used by the state Tax Com- mission.

e.         Acquire consent in writing from the Commissioner for any improvements made on the site.

f.         Acquire consent in  writing for moving buildings from other premises onto the leased premises. All buildings and structures shall be of acceptable con- struction.

g.        Keep any gas, electric, power, telephone, water, sewer, cable television and other utility or service lines under ground unless prohibited by law.

h.        File with the Commissioner, prior to the approval of any application to place improvements, plans and specifications showing the nature, location, cost, quality of proposed material, size, area, height, color, shape and design of the proposed improve- ments. The Commissioner may also require a perim- eter survey of the leased premises upon which shall be shown the location of the completed improve- ments. The lessee shall also submit grading plans.

2.        The above conditions shall apply to any assignee, subles- see or concessionaire of the original lessee.

G.      Maps required as part of application for commercial lease. The applicant shall furnish such information map of the lands to be leased as the Commissioner may require and deem necessary to evaluate the application and assist in making an appraisal; and, in addition, the Commissioner may require an aerial pho- tograph or photographs of such lands as he may specify in a request therefor.

H.      Minimum rental rates for commercial leases. No commercial lease shall provide for an annual rental of less than the appraised rental value of the land and in no event shall the rent

be less than 5¢ per acre per annum or less than $10.00 per annum per lease.

I.        Division of leases. The State Land Commissioner may at any time divide a commercial lease into two or more separate leases when such division would, in the opinion of the Com- missioner, facilitate administration and management of the subject lands or would result in separating one commercial use from another. The rent for the lease year in which such divi- sion is made shall be allocated to the separate leases.

J.        Sublease of commercial lease by lessee. No commercial lessee shall sublet his lease without the written permission of the Commissioner. Approval of a sublease may be granted at the discretion of the Commissioner and shall be obtained by the lessee submitting for approval of the Commissioner the sub- lease executed in triplicate. Upon the approval by the Com- missioner, two copies of the sublease, with the Commissioner’s approval and any limitation to such approval endorsed by the Commissioner thereon will be returned to the lessee, one copy thereof being retained in the files of the Department.

K.      Application to assign lease. Application to assign and applica- tion for assumption of lease and transfer shall be made upon such forms as may from time to time be prescribed by the Commissioner; upon the approval of the application, the action taken by the Commissioner will be noted upon the lease and made of record in the Department.

L.       Use of state lands; failure to use. No lessee or permittee shall use lands under permit or lease except for the uses and pur- poses specifically set forth in the lease or other such uses or purposes as may be subsequently authorized by the Commis- sioner in writing.

M.     Rights of commercial lessee or permittee. All leases or permits granted by the Commissioner are only a license or permit to use the land described in the lease or permit for commercial purposes in a manner compatible with the terms of said lease or permit. The state of Arizona reserves the right to grant other leases or permits for the use of said lands or the removal of natural products therefrom.

No lessee or permittee has the authority or right to issue any person any right to the use of said land or the removal of any products therefrom, but such right to use vests solely in the Commissioner and must be granted by the Commissioner in writing.

Historical Note

Original rule, Art. V, Subchapter B, Ch. II (Supp. 76-4). Amended by adding subsection (N) as an emergency effective January 9, 1989, pursuant to A.R.S. § 41-1026, valid for only 90 days (Supp. 89-1). Emergency expired.

Readopted without change as an emergency effective June 16, 1989, pursuant to A.R.S. § 41-1026, valid for only 90 days (Supp. 89-2). Emergency expired. Section R12-5-703 renumbered from Section R12-5-152 (Supp.

93-3).