§ 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.