foreign entities; land; legislative approval, the official text

PREFILED    DEC 29 2025

REFERENCE TITLE: foreign entities; land; legislative approval

State of Arizona

Senate

Fifty-seventh Legislature

Second Regular Session

2026

SB 1075

Introduced by

Senator
Finchem

AN
ACT

amending
title 33, chapter 4, article 4, Arizona Revised Statutes, by adding section 33-459;
amending sections 37-231 and 37-240, Arizona Revised Statutes;
relating to land sales.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title
33, chapter 4, article 4, Arizona Revised Statutes, is amended by adding
section 33-459, to read:

START_STATUTE33-459. Conveyance to foreign entity; prohibition; identification;
definitions

A. Beginning on the effective date of
this section, land in this state may not be conveyed to a hostile foreign
entity without majority approval of both the senate and the house of
representatives.

B. A grantor in this state and the
grantor's agent, including a real estate professional licensed pursuant to
title 32, chapter 20, shall submit to the state real estate department a valid identification of any grantee.  If the grantee is
not a natural person, the grantor and the grantor's agent shall submit a valid
identification of the grantee's agent and the name and principal place of
business of the grantee.  The grantor, the grantor's agent and the state real
estate
department shall maintain a copy of the
identification provided by the grantee or, if the grantee is not a natural
person, the identification of the grantee's agent and the grantee's name and
principal place of business.

C. Identification is deemed valid
unless it can be determined on its face that the identification has expired.

D. For the purposes of this section:

1. "Foreign entity" means a
foreign government, a state-controlled enterprise of a foreign government
or an entity acting as an agent for a foreign government or state-controlled
enterprise of a foreign government.

2. "Hostile" means a
foreign entity that is listed as a threat or a country of concern by the
director of national intelligence or the United States department of state.

3. "Valid identification"
includes:

(a) Any
document that bears the photograph, name and address of the grantee or if the
grantee is not a natural person, the grantee's agent.

(b) An Arizona
driver license, an Arizona nonoperating identification license, a tribal
enrollment card or another form of tribal identification or a United States,
state or local government-issued identification.

Sec. 2. Section 37-231, Arizona Revised
Statutes, is amended to read:

START_STATUTE37-231. 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 except as provided in section
37-240.

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] this
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] that is or may
be determined by the laws of [the] this
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]
To promote 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] this 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] on 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 that may be on or in the land, upon on terms and conditions that 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] this 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] On
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] this 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]
this 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, may enter [upon]
on such lands and drill all wells necessary to protect the this state against such drainage.

4. The interest reserved by [the]
this 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]
this state may be affected thereby, may
join in and consent to any such plan on behalf of [the] this 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 not
relieve any operator from the obligation to develop reasonably the lands and
leases as a whole committed thereto. The royalties to which the this 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] that is or may be determined by the laws of [the]
this state or the United States or BY 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] on 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] this state does not own such substances, minerals or metals in
the lands sought to be sold. [The provisions of]
This subsection [shall] does 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] this 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] that is or may be determined by the laws of the United States
or of this state[, ] or by
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] this 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]
this 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, may require each of its
lessees or permittees to execute a bond in a reasonable principal amount
conditioned [upon] on payment for all
such damages.

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

Sec. 3. Section 37-240, Arizona Revised
Statutes, is amended to read:

START_STATUTE37-240. Limits on sales of state lands; definitions

A. [No] A
person may not 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] may not be made to [corporations] a corporation or [associations] association that is not qualified to transact business in the this state.

C. Beginning on the effective date of
this amendment to this section, sales of state lands may not be made to a
hostile foreign entity without the majority approval of both the senate and the
house of representatives.

D. For the purposes of this section:

1. "Foreign entity" means a
foreign government, a state-controlled enterprise of a foreign government
or an entity acting as an agent for a foreign government or state-controlled
enterprise of a foreign government.

2. "Hostile" means a
foreign entity that is listed as a threat or a country of concern by the
director of national intelligence or the United States department of state.