(1) Any county, city, or town may file with the department an application to purchase any stone, rock, gravel, or sand upon any state lands or state forestlands to be used in the construction, maintenance, or repair of any public street, road, or highway within such county, city, or town.
(2) Applications shall set forth the quantity and kind of material desired to be purchased, the location thereof, and the name, or other designation, and location of the street, road, or highway upon which the material is to be used.
(3) The department is authorized to appraise and sell the material in such a manner and upon such terms as the department deems advisable for not less than the fair market value thereof.
(4) The proceeds of any such sale shall be paid into the state treasury and credited to the fund to which the proceeds of the sale of the land upon which the material is situated would belong.