Ariz. Admin. Code § R12-5-801 - Linear Right-of-Way

A. Rights of surface and subsurface lessees or permittees
1. The Department may grant a right-of-way without the consent of a surface or subsurface lessee.
2. When the applicant for a right-of-way and any existing right holder do not agree on the appraised value of damages to the right holder, the applicant for right-of-way may apply to the Department to appraise the value of any improvements that may be injured or damaged. The cost of any such appraisal shall be paid by the right-of-way applicant.
3. In cases where it is necessary to cut a fence belonging to a surface lessee or permittee or otherwise enter through a fence, the Department may require the installation of a standard cattle guard or other facilities by the right-of-way grantee as a condition to the granting of the right-of-way.

4. "Lease" means any lease on state land in existence at the time applicant applies for right-of-way, or granted thereafter for either surface or subsurface use.

5. "Patent" means a document used by the State Land Department to convey title to land.

6. "Site" means a reservoir for storage of water; a location for a dam, a power plant or an irrigation plant, and for other purposes for public uses. (Not to include workings for the removal of sand, gravel and other road materials.)

B. Termination of use; abandonment
1. When a right-of-way holder is no longer used by the grantee for which the right-of-way was granted, the right-of-way shall be terminated.
2. The Department may determine that a right-of-way has been abandoned or used for the purpose granted. In such case, the Department shall give the right-of-way grantee 30 days to show why a right-of-way should not be cancelled. I within 30 days the right-of-way grantee fails to respond, the Department may issue an order of cancellation.
C. Right-of-way provisions.
1. Term of right-of-way. The term of the right-of-way shall be determined by the Department and shall be set forth on the right-of-way contract.

a. Any citizen of the United States, partnership or association of citizens, or a corporation organized under the laws of the United States or any state or territory thereof, and who are authorized to transact business in the state, and any governmental agency of the state or political subdivision and municipal corporations thereof, may apply to the Department for a right-of-way on, over or through state land.

b. Application for right-of-way shall be made upon forms provided by the State Land Department.

2. Right-of-way subject to public auction. A right-of-way for exclusive use, perpetual in nature, or for a term exceeding 50 years (except a right-of-way for transportation purposes granted to governmental agencies of the state or political subdivisions and municipal corporations thereof) shall be sold at public auction as provided under the laws for sale of State Trust Land.
3. Possession and right of use of right-of-way area. The right is granted for the use of the area described in the right-of-way contract subject to any existing prior rights and subject to any rights the Department shall grant thereafter.

a. The application for a right-of-way shall be in such form as the Commissioner may prescribe, shall be filed with the Department by the applicant or by an authorized agent for the applicant, and shall be required to furnish the Department the following information as the Commissioner may prescribe.

i. Name and address of applicant.

ii. Statement whether applicant is an individual, partnership or corporation, or governmental agency of the state or political subdivision and municipal corporation thereof.

iii. Statement of citizenship, when applicable.

iv. If a corporation:

(1) Name.

(2) State of incorporation.

(3) Arizona business address.

(4) Affirmation of authority to do business in Arizona.

v. Age and marital status, when applicable.

vi. Description, according to the public land survey of the land for which application is being made.

vii. Width of the right-of-way.

viii. The nature of the right-of-way (the right-of-way is temporary or permanent; the right-of-way requires exclusive use or to what extent; a right- of-way through a given area).

ix. A survey of the land for which application is being made showing distance and direction from a known cadastral survey point in each section.

x. Location of improvements or crops on land under application over which proposed routes of right-of-way will pass (information required in (ix) and (x) shall be conveyed by means of accurate plat or drawing accompanying the application form).

xi. The applicant shall furnish evidence from surface lessee and all other right holders in the land applied for giving consent to the new right-of-way or objection thereto.

b. This rule shall not be taken or construed to limit or restrict the authority of the Commissioner to require the applicant to furnish such additional information as the Commissioner may deem necessary.

4. Provisions of the right-of-way. Every contract shall provide for:
a. Payment to the Department of the rental amount.
b. The right to install and construct necessary equipment and facilities with the right to remove the same within 90 days after expiration or termination of the right-of-way.
c. The obligation of the grantee to install and maintain fencing, gates, cattleguards, and other protective measures deemed necessary by the Department.
d. The obligation of the grantee to restore the surface of the land within the right-of-way to a reasonable condition as required by the Department.
e. The obligation of the grantee to indemnify, hold and save grantor harmless against all loss, damage, liability, expenses, costs and charges incident to or resulting in any way from the use, condition or occupation of the land.
f. A use provision.
g. The right of the grantee to assign the right-of-way.
h. The right of the grantee to terminate the right-of-way at any time during its term by giving the Department 30 days' notice of termination in writing, if the grantee is not delinquent in payments and has complied with all conditions on the date of termination.
5. A sub-grant of the right-of-way contract is prohibited.

a. Each application filed with the Department shall be accompanied by a filing fee.

b. Each application filed shall first be checked for its completeness and when it meets the requirements shall be made of record in the Department.

c. Rental or other payment for each right-of-way shall be determined by the Commissioner after appraisal.

i. Rental for rights-of-way granted without public auction sale shall be determined by the Commissioner after appraisal.

ii. Rights-of-way for exclusive use or perpetual in nature (except rights-of-way granted to governmental agencies of the state or political subdivisions and municipal corporations thereof) shall be sold at public auction as provided under the laws for sale of state land after appraisal.

iii. Rights-of-way for governmental agencies of the state or political subdivisions and municipal corporations thereof may be granted by the Department for an indefinite period for so long as used for the purpose granted after full payment of the appraised value of the right-of- way has been made to the State Land Department.

(1) All appraisals of rights-of-way shall be established by the State Land Commissioner.

(2) The appraised value of the right-of-way shall be determined in accordance with the principles established in A.R.S. §§ 12-1122 and 37-132 .

6. Right-of-way renewal. Upon application to the Department, not less than 30 days, nor more than 1 year prior to the expiration of the right-of-way contract, the grantee of a right-of-way contract, shall have a preferred right to renew the right-of-way contract if the grantee is not delinquent in the payment of rental or of monies due the Department on the date of expiration of the contract. The renewal right-of-way contract shall commence on the day following the expiration of the former contract.

a. The filing of an application for a right-of-way shall not confer upon the applicant any right to use the area applied for.

b. A right of entry to map and survey or for any other purpose in the area to be applied for may be obtained from the Commissioner on forms provided by the Department.

7. Bonds.
a. The Department may require the grantee to furnish bond, in a reasonable amount, to be fixed by the Commissioner, guaranteeing that the grantee will restore the surface of the land described in the contract to a reasonable condition, upon the termination of the right-of-way contract.
b. The Department may require the grantee to file with the Department a surety bond in such form, approved by, and for such amount determined by, the Department, which shall be conditioned upon prompt payment to the lessee of the surface, subsurface or otherwise of the State Trust Land covered by the right-of-way. A surety bond required under this subsection shall cover any loss to a lessee from damage or destruction to grasses, forage, crops, and improvements upon such lands which is caused by the construction or use of the right-of-way.
c. Assignment of any or all of the right-of-way contract will not relieve the assignor of his obligation as principal under the bond. Release of the assignor's obligation under bond may be affected through the posting of a replacement bond by the assignee and subsequent, approval by the Department and notification of the release by the Department in writing to the principal and surety.
d. The Department, in its discretion, may reduce or increase the principal amount of the bond.
e. Immediately after determination by the Department that full discharge of the conditions of the obligations under any bond has been affected, it will notify in writing the principal and surety held by the bond so that it may be formally terminated.
f. Surety on the bond shall have the right to cancel the bond and be relieved of further liability after the period of notice, by giving 30 days' notice to the Department of its desire to cancel.
g. Upon receipt of such notification, the Department will notify the grantee by certified mail within 14 days of the impending action by surety.
h. Failure by the grantee to post a replacement bond before the expiration of the 30 days mentioned above, shall constitute a default by the grantee and cause for cancellation of the right-of-way.
8. Reports of completed facilities and construction. A right-of-way grantee shall report any completed facilities and construction to the Department.

a. Upon the compliance by the applicant with the requirements set forth by the Commissioner, the right-of-way contract shall be issued.

b. The failure of the applicant to execute and return the right-of-way contract with all monies required within 60 days from the date of mailing by the Department, the Commissioner may issue a cancellation order for non-completion of the contract.

c. The date of the right-of-way contract shall commence on the date the contract is mailed by the Department to the applicant.

D. Right-of-way

1. Term of right-of-way. The term of the right-of-way shall be determined by the Department and shall be set forth on the right-of-way contract.

2. Right-of-way rentals or other payments. The rental or any other payments required for rights-of-way shall be determined by the Commissioner after appraisal.

3. Possession and right of use of right-of-way area. The right is granted for the use of the area described in the right-of- way contract subject to any existing prior rights and subject to any rights the Department shall grant hereafter.

4. Provisions of the right-of-way

a. Every right-of-way contract shall provide for:

i. Payment to the Department of the amount established by the Commissioner after determination of the true appraised value.

ii. The installation and construction of necessary machinery, equipment and facilities with the right of removal within 90 days after expiration or termination of the right-of-way.

iii. Fencing and other protective requirements deemed necessary by the Commissioner.

iv. That the grantee shall restore the surface of the land within the right-of-way to a reasonable condition as required by the Commissioner.

v. That the grantee will indemnify, hold and save grantor harmless against all loss, damage, liability, expenses, costs and charges incident to or resulting in any way from the use, condition or occupation of the land.

vi. A statement of the purpose for which the right-of-way was granted.

vii. The right of the grantee to assign the right-of-way, provided that such an assignment shall not become effective until approved in writing by the Commissioner as being in the best interests of the state and until a copy thereof is filed with the Department.

viii. The right of termination of the right-of-way by the grantee at any time during its term by giving the Commissioner 30 days notice of termination in writing, provided that the grantee is not delinquent in any payments and has complied with all conditions on the date of termination.

5. Assignment of right-of-way; sublease prohibited

a. Grantee of each right-of-way contract, if not in default of rental or other payments, and who has kept and performed all the conditions of his lease, may, with written approval of the Commissioner, assign the right-of-way.

i. Application for assignment, the assignment and the assumption of the right-of-way will be on such forms as the Commissioner may prescribe.

ii. An assignment shall not become effective unless and until it is approved by the Commissioner.

iii. The assignee shall succeed to all the rights and shall be subject to the obligations of the assignor.

iv. A sub-grant of the right-of-way contract is prohibited.

6. Right-of-way renewal. Upon application to the Commissioner, not less than 30 days, nor more than 60 days prior to the expiration of the right-of-way contract, the grantee of a right-of-way contract, if he is not delinquent in the payment of rental or of monies due the State Land Department on the date of expiration of the contract, shall have a preferred right to renew the right-of-way contract bearing even date with the expiration of the old contract.

7. Bonds

a. The Commissioner may require the grantee to post a cash deposit or surety bond to guarantee the payment of all monies due under the contract.

b. The Commissioner may require the grantee to furnish bond, in a reasonable amount, to be fixed by the Commissioner, conditioned that the grantee will guarantee restoration of the surface of the land described in the contract to a reasonable condition, upon the termination of the right-of-way contract.

c. The Commissioner may require the lessee to file with the Department a surety bond in the form, amount, and with surety approved by the Commissioner, conditioned upon prompt payment to the lessee of the surface, subsurface or otherwise of the state land covered by the right-of-way, for any loss to such owner or lessee from damage or destruction caused by the construction or use of the right-of-way, his or its agents, or employees, to grasses, forage, crops and improvements upon such land.

d. Assignment of any or all of the right-of-way contract will not relieve the assignor of his obligation as principal under the bond. Release of the assignor's obligation under bond may be affected through the posting of a replacement bond by the assignee, but then only after approval by the Commissioner and subsequent notification of the release by the Commissioner in writing to the principal and surety.

e. The Commissioner, in his discretion, may reduce or increase the principal amount of the bond.

f. Immediately after determination by the Commissioner that full discharge of the conditions of the obligations under any bond has been affected, he will, in writing, notify the principal and surety held by the bond so that it may be formally terminated.

g. Surety on the bond shall have the right to cancel the bond and be relieved of further liability after the period of notice, by giving 30 days' notice to the Department of its desire to so cancel.

i. Upon receipt of such notification, the Department will immediately notify the grantee by certified mail of the impending action by surety.

ii. Failure by the grantee to post a replacement bond before the expiration of the 30 days mentioned next above, shall constitute a default by the grantee and cause for cancellation of the right-of-way.

8. Principal payments. Each right-of-way granted to governmental agencies of the state or political subdivisions and municipal corporations thereof for exclusive use or perpetual use shall provide for payment of principal in the full amount of the appraised value as provided by the Commissioner after appraisal.

E. Reports

1. Report of improvements

a. Applications for and reports of improvements placed shall be presented to the Commissioner on forms provided by the Department.

b. Grantee of every right-of-way shall submit to the Department an application to place any improvement to be placed on the right-of-way and shall secure written approval from the Commissioner to place the improvement before any work is commenced toward the improvement.

c. The grantee shall report any completed improvements to the Commissioner and secure approval from the Commissioner.

Notes

Ariz. Admin. Code § R12-5-801
Original rule, Art. VIII, Subchapter B, Ch. II (Supp. 76-4). Section R12-5-801 renumbered from Section R12-5-165 (Supp. 93-3). Amended by final rulemaking at 30 A.A.R. 2360, effective 8/19/2024.

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