Assigned to NREW AS PASSED BY HOUSE
ARIZONA STATE SENATE
Fifty-Sixth Legislature, Second Regular Session
AMENDED
FACT SHEET FOR SB 1172
physical availability credits; water supply
Purpose
Allows a person who owns land with an irrigation grandfathered right within an active
management area (AMA) to permanently retire the land from irrigation use and to retain a physical
availability credit. Outlines exemptions to unlawful acting in concert for the purpose of the sale or
lease of subdivision lots or parcels of land. Modifies requirements for applications related to
construction and sale of homes and the division of parcels of land. Modifies turf regulations.
Background
Subdivided Land
A subdivision or subdivided land is improved or unimproved land divided or proposed to
be divided for the purpose of sale or lease, whether immediate or future, into six or more lots,
parcels or fractional interests, including: 1) a stock cooperative; 2) lands divided or proposed to be
divided as part of a common promotion plan; and 3) residential condominiums. Leasehold
offerings of one year or more are exempt from the classification of subdivision or subdivided lands
(A.R.S. § 32-2101).
Land Division
A county board of supervisors (county BOS) must approve any land divisions of five or
fewer lots, parcels or fractional interests, any of which is 10 acres or smaller in size, if the land
division meets outlined requirements. A person or group of persons may not act in concert to
attempt to avoid the requirements to divide a parcel of land or sell subdivision lots by using a series
of owners or conveyances or by any other method that ultimately results in the division of lands
into a subdivision or the sale of subdivided land (A.R.S. §§ 11-831 and 32-2181).
Irrigation Grandfathered Rights
An irrigation grandfathered right is granted to a person who owns land within an AMA
which was legally irrigated in whole or in part with groundwater at any time during the five years
preceding January 1, 1980, for initial AMAs, or the date of the notice of the initiation of
designation procedures or the call for the election for subsequent AMAs (A.R.S. § 45-465).
Non-irrigation use is a use of groundwater other than irrigation use. Irrigation use is the use of
groundwater on two or more acres of land to produce plants or parts of plants for sale or human
consumption, or for use as feed for livestock, range livestock or poultry (A.R.S. § 45-402).
FACT SHEET – Amended
S.B. 1172
Page 2
Assured Water Supply
A person who proposes to offer subdivided lands for sale or lease in an AMA must apply
for and obtain a certificate of assured water supply from the Director of the Arizona Department
of Water Resources (ADWR) before presenting the plat for approval to the city, town or county in
which the land is located, if required, and before filing with the State Real Estate Commissioner a
notice of intention to offer such lands for sale or lease, unless the subdivider has obtained a written
commitment of water service for the subdivision from a city, town or private water company
designated as having an assured water supply (A.R.S § 45-576).
In an AMA, a city, town or private water company or irrigation or water conservation
district may withdraw groundwater only pursuant to the established groundwater rights, except as
provided by a grandfathered right or as otherwise stated (A.R.S. § 45-491).
Current statute prohibits the groundwater rights and uses of service areas from being
construed to enlarge the authority of an irrigation or water conservation district to withdraw and
distribute groundwater for municipal or industrial purposes (A.R.S. § 45-497).
Groundwater Replenishment Obligation
For each active AMA in which member lands or member service areas are or may be
located, the irrigation or water conservation district must replenish groundwater in an amount
equal to the groundwater replenishment obligation for that AMA. If a parcel of member land is
included in the service area of a municipal provider that is not a member service area but that has
been designated as having an assured water supply, the parcel of member land has no parcel
replenishment obligation, and the irrigation or water conservation district has no groundwater
replenishment obligation attributable to that parcel of member land for as long as the designation
remains in effect. Additionally, if a parcel of member land is included in the service area of a
municipal provider that is a member service area and that has been designated as having an assured
water supply, the parcel of member land has no further parcel replenishment obligation (A.R.S.
§ 48-3771).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation.
Provisions
Land Division
1. Requires an applicant for a building permit for new construction of a residential single-family
home to identify any ownership interests in the property that is the subject of the permit.
2. Exempts an applicant for a building permit from requirements relating to the identification of
ownership interests if the applicant provides copies of the subdivision final plat indicating
assured water supply as approved by the municipality where the parcels, lots or fractional
interests exist.
FACT SHEET – Amended
S.B. 1172
Page 3
3. Adds, to the qualifications required for a county BOS to approve an application to split a parcel
of land, outlined questions regarding ownership and representation of property that is in the
same tax parcel map or subdivision as the lots, parcels or fractional interests that are the subject
of the application.
4. Requires an applicant for a land division to disclose any ownership interest in the properties
that are the subject of the land division application.
5. Prescribes an attestation that must be included in an application for a land division.
6. Adds, to the list of lot creation exemptions, lots, parcels or fractional interests which are owned
by a licensed financial institution in Arizona as a result of foreclosure and are being sold by
the financial institution by an Arizona real estate licensee, if limited to those that have been
included with a previous public report when the public report was approved within the last 10
years and no material changes have occurred within the public report.
7. Adds a specification to the special order exemption that lots, parcels or fractional interests
where compliance is not essential to the public interest or for the protection of buyers include
those that have been included with a previous public report approved within the last 10 years
where the applicant for an exemption attests that there are no material changes altering the
facts of the public report.
8. Modifies the affidavit of disclosure that must be completed by the seller of five or fewer parcels
of land, other than subdivided land, in an unincorporated area of a county.
Subdivided Land
9. Subjects a subdivider or agent subject to the jurisdiction of the Arizona Department of Real
Estate (ADRE) who violates outlined rules or laws or engages in outlined unlawful practices
with respect to the sale or lease of subdivided lands to a civil penalty of up to $2,000 for each
lot where the violation occurs, rather than for each infraction.
10. Specifies that, for any sale or lease of subdivided lands which have been approved by ADRE,
an infraction that concerns more than one lot in a subdivision is a single infraction.
Unlawful Acting in Concert
11. Specifies that, for the purpose of attempting to avoid subdivision laws by acting in concert to
divide a parcel of land into six or more lots or sell or lease six or more lots by using a series of
owners or conveyances, any of the following alone is not sufficient to constitute unlawful
acting in concert:
a) a familial relationship;
b) a well share agreement;
c) a road maintenance agreement; or
d) for a county with a population of fewer than 500,000 persons, the use of or referral to the
same licensed contractor or registered architect, engineer, geologist, home inspector,
landscape architect or surveyor. FACT SHEET – Amended
S.B. 1172
Page 4
12. Specifies that, for the purpose of attempting to avoid subdivision laws by acting in concert to
divide a parcel of land or sell subdivision lots by using a series of owners or by any other
method that ultimately results in the division of the lands into a subdivision or the sale of
subdivided lands, any of the following is not sufficient to constitute unlawful acting in concert:
a) a familial relationship;
b) a well share agreement;
c) a road maintenance agreement; or
d) for a county with a population of fewer than 500,000 persons, the use of or referral to the
same licensed contractor or registered architect, engineer, geologist, home inspector,
landscape architect or surveyor.
Turf
13. Prohibits a municipal provider, on or after January 1, 2026, from applying potable water on
nonfunctional turf that is installed as part of a new development project or redevelopment
project on any portion of applicable property within an initial AMA.
14. States that the prohibition does not:
a) preclude a municipality from adopting requirements that are more restrictive than the
requirements regarding applying potable water on nonfunctional turf; or
b) impair vested rights to the use of water.
15. Prohibits a municipality located in an initial AMA, notwithstanding any other law, from
adopting or enforcing any requirement establishing, directly or indirectly:
a) minimum turf requirements, except for functional turf requirements that are associated with
public recreational use areas or other public space that is regularly used for civic,
community or recreational purposes, including playgrounds, sports fields, cemeteries,
schoolyards and storm water management; and
b) the installation of plants that are not included on the low-water-use and drought-tolerant
plant list that is published by ADWR for the most current management plan in the initial
AMA.
Physical Availability Exemption Credit
11. Allows a person who owns land within an AMA that may be legally irrigated with groundwater
pursuant to an irrigation grandfathered right to permanently relinquish all or a portion of the
irrigation grandfathered right in exchange for a physical availability exemption credit if:
a) within a reasonable time before or after the land is retired, the person applies to the Director
of ADWR to permanently relinquish all or a portion of the irrigation grandfathered right in
exchange for a physical availability exemption credit; and
b) the person's use of the irrigation grandfathered right complies with grandfathered
groundwater rights and the applicable management plan.
12. Requires, in an initial AMA with a management goal of safe-yield, the volume of groundwater
that may be withdrawn annually per acre for non-irrigation use to be the lesser of the following:
a) the maximum amount of groundwater that a person may use pursuant to an irrigation
grandfathered right for the acre at the time it is relinquished; or
FACT SHEET – Amended
S.B. 1172
Page 5
b) either:
i. if the irrigation grandfathered right is relinquished by January 1, 2026, two acre-feet
per irrigation acre in the farm or portion of the farm; or
ii. if the irrigation grandfathered right is relinquished by January 1, 2036, one and five-
tenths of an acre-foot per irrigation acre in the farm or portion of the farm.
13. Requires, in an initial AMA that does not have a management goal of safe-yield or a subsequent
AMA, the volume of groundwater that may be withdrawn and used annually per acre to be the
lesser of:
a) the maximum amount of groundwater if that a person may use pursuant to an irrigation
grandfathered right for the acre at the time it is relinquished;
b) 50 percent of the volume of groundwater that may be withdrawn annually per acre pursuant
to the holder's irrigation grandfathered right; or
c) either:
i. if the irrigation grandfathered right is relinquished by January 1, 2035, two acre-feet per
irrigation acre in the farm or portion of the farm; or
ii. if the irrigation grandfathered right is relinquished by January 1, 2036, one and five-
tenths of an acre-foot per irrigation acre in the farm or portion of the farm.
14. Requires the Director of ADWR to identify all of the following when issuing a physical
availability exemption credit:
a) volume of groundwater calculated for non-irrigation use that may be withdrawn and used
as calculated;
b) the number and location of the acres that are associated with the relinquishment;
c) the wells that have been used to serve the irrigation grandfathered right;
d) the owner of the land at the time of the relinquishment, which must be the holder of the
physical availability exemption credit; and
e) the Director's determination whether the criteria would be satisfied based on the Director
of ADWR's most recent assured water supply projection.
15. Requires the determination to be applied to an assured water supply application that is
submitted to ADWR within two years after the date the physical availability exemption credit
is issued and remain valid until the Director of ADWR makes a final decision on the assured
water supply application.
16. Requires, on request of the holder of a physical availability exemption credit for purposes of
an application for an assured water supply, the volume of groundwater calculated to be exempt
from the requirement to demonstrate that the groundwater supply is physically available if:
a) the proposed groundwater use associated with an application for an assured water supply
is one or more of the following locations:
i. the retired irrigation acres; or
ii. land within one mile of the exterior boundary of the retired irrigation acres, including
an entire parcel if a portion of the parcel is within one mile of the exterior boundary;
b) the applicant for an assured water supply proposes to withdraw groundwater from one or
more of the following locations:
i. wells that were used to serve the irrigation grandfathered right;
ii. wells located within one mile of any well that was used to serve the irrigation
grandfathered right; FACT SHEET – Amended
S.B. 1172
Page 6
iii. wells located on the acres associated with the relinquishment; or
iv. wells located within one mile of the acres associated with the relinquishment; or
c) the applicant demonstrates, using a method of analysis approved by the Director of ADWR,
that groundwater can be withdrawn to serve the proposed use for 100 years without
exceeding the depth of the aquifer or the applicable depth-to-static water level as
prescribed, whichever is less.
17. States that, for the purpose of demonstrating that groundwater can be withdrawn to serve the
proposed use for 100 years without exceeding the depth of the aquifer or the applicable
depth-to-static water level:
a) the Director of ADWR may not consider other withdrawals of groundwater that exceed the
depth of the aquifer or the applicable depth-to-static water level during the 100 year period;
and
b) for groundwater withdrawals located within one mile of any well that was used to serve
the irrigation grandfathered right, the applicant may rely on the Director of ADWR's most
recent assured water supply projection to satisfy this requirement.
18. Requires, on request from the holder of an irrigation grandfathered right, the Director of
ADWR to make a determination to grant a physical availability exemption credit within an
overall time frame of 90 days pursuant to outlined licensing time frames.
19. Requires the overall time frame to include 30 days for an administrative completeness review
and 60 days for a substantive review.
20. Allows the time frame to be extended by mutual agreement.
21. Requires, before the Director of ADWR issues a physical availability exemption credit, the
Director of ADWR to notify the holder of the irrigation grandfathered right in writing whether
the prescribed criterion would be satisfied based on the Director of ADWR's most recent
assured water supply projection and request written confirmation that the holder of the
irrigation grandfathered right would like to proceed with the relinquishment.
22. Allows, on notice to the Director of ADWR by the holder of a physical availability exemption
credit, some or all of the credit to be assigned to a municipal provider or to a subsequent owner
of the land associated with the relinquishment.
23. Requires, if only a portion of a physical availability exemption credit is applied to a certificate
of assured water supply or a designation of assured water supply issued, the Director of ADWR
to identify the volumes remaining for the physical availability exemption credit.
24. Requires, after the issuance of a certificate of assured water supply based on a physical
availability exemption credit, if a municipal provider that served land associated with the
relinquishment becomes a designated provider, the physical availability exemption credit
associated with the certificate to be used to support the designation.
25. Outlines governance of administrative proceedings, rehearing or review and judicial review of
the final decisions of the Director of the ADWR. FACT SHEET – Amended
S.B. 1172
Page 7
26. Requires, for the purposes of seeking an exemption from the physical availability requirement
for an assured water supply, the applicable depth-to-static water level for each AMA to be:
a) in the Pinal AMA, 1,100 below land surface; and
b) in all other AMAs, 1,000 feet below land surface.
Miscellaneous
27. Defines terms.
28. Makes technical and conforming changes.
29. Becomes effective on the general effective date.
Amendments Adopted by the House of Representatives
1. Adds exemptions to unlawful acting in concert for the purpose of the sale or lease of
subdivision lots or parcels of land.
2. Subjects a subdivider or agent who violates outlined rules or laws to a civil penalty of up to
$2,000 for each lot where the violation occurs, rather than for each infraction.
3. Modifies requirements for applications related to construction or sale of homes and the division
of parcels of land.
4. Requires the Director of ADWR to identify, when issuing a physical availability exemption
credit, whether the outlined criteria would be satisfied based on the Director of ADWR's most
recent assured water supply projection.
5. Modifies the process and requirements for issuing a physical availability exemption credit.
6. Modifies turf regulations.
7. Defines terms.
Senate Action House Action
NREW 2/1/24 DP 4-3-0 NREW 3/19/24 DPA 6-4-0-0
3
rd
Read 2/29/24 16-12-2 3
rd
Read 6/14/24 29-30-1
3
rd
Read* 6/15/24 32-25-3
*on reconsideration
Prepared by Senate Research
June 19, 2024
RA/slp