Assigned to NR FOR COMMITTEE
ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
FACT SHEET FOR S.B. 1521
unbuilt certificates; assured water supply
Purpose
Allows a person to sell, aggregate or transfer an unbuilt certificate of assured water supply
(Certificate) separate from the original lot or parcels where the Certificate was granted if outlined
conditions are met. Allows a person, if the unbuilt Certificate is to be served by a municipal
provider, to sell, transfer or aggregate the unbuilt Certificate or a portion of the unbuilt Certificate
to any lot or parcel within the same municipal service area without regard to where the municipal
provider would have acquired water to serve the unbuilt subdivision that received the original
Certificate.
Background
A person who proposes to offer subdivided lands for sale or lease in an active management
area (AMA) must apply for and obtain a Certificate 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 and before filing with the Arizona 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 designated provider. An assured water
supply means that: 1) sufficient groundwater, surface water or effluent of adequate quality will be
continuously available to satisfy the water needs of the proposed use for at least 100 years; 2) the
projected groundwater use is consistent with the management plan and achievement of the
management goal for the AMA; and 3) the financial capability has been demonstrated to construct
the water facilities necessary to make the supply of water available for the proposed use, including
a delivery system and any storage facilities or treatment works (A.R.S. § 45-576).
A holder of a Certificate may assign the Certificate, in whole or in part, to another person
if the holder applies to the Director of ADWR for approval within 10 years after the original
Certificate was issued and the Director of ADWR approves the application. An application may
be filed more than 10 years after the original Certificate was issued if a minimum of 500 lots within
the subdivision covered by the Certificate have been sold to individual home buyers by the holder
of the Certificate and any previous holders of the Certificate. The Director of ADWR must approve
a timely application for assignment of a Certificate if the Director of ADWR determines that
statutorily outlined conditions apply (A.R.S. § 45-579).
There is no anticipated fiscal impact to the state General Fund associated with this
legislation.
FACT SHEET
S.B. 1521
Page 2
Provisions
1. Allows a person to sell, aggregate or transfer an unbuilt Certificate separate from the original
lot or parcels where the Certificate was granted subject to the following conditions:
a) the transaction is to another lot or parcel in the same subbasin in the same AMA and any
wells committed to an unbuilt Certificate are located in the same subbasin in the same
AMA as the lot or parcel that will receive the unbuilt Certificate or a portion of the unbuilt
Certificate pursuant to the transaction;
b) the person that receives the unbuilt Certificate uses the groundwater allocated to the unbuilt
Certificate for the same proposed use;
c) if the transaction is to another lot or parcel located within the same overall master planned
community or common promotional plan, the transaction will result in the construction or
groundbreaking on the proposed lot or subdivision where the unbuilt Certificate will be
applied within 10 years after the date of the transaction; and
d) if the transaction is to another lot or parcel located outside the overall master planned
community or common promotional plan, the transaction will result in the construction or
groundbreaking on the proposed lot or subdivision where the unbuilt Certificate will be
applied within five years after the date of the transaction.
2. Allows a person, if the unbuilt Certificate is to be served by a municipal provider, to sell,
transfer or aggregate the unbuilt Certificate or a portion of the unbuilt Certificate to any lot or
parcel within the same municipal service area without regard to where the municipal provider
would have acquired water to serve the unbuilt subdivision that received the original
Certificate.
3. Requires a person that conducts a transaction to notify the Director of ADWR on a form
prescribed by the Director of ADWR that includes:
a) the volume of water in acre-feet of an unbuilt Certificate that is subject to the transaction;
b) the location of the parcel or proposed subdivision that is part of the transaction; and
c) whether the transaction is for parcels or proposed subdivisions that are located in the same
service area of a municipal provider.
4. Defines transaction as the sale, transfer or aggregation of an unbuilt Certificate.
5. Defines common promotional plan as a plan, undertaken by a person or a group of persons
acting in concert, to offer lots for sale or lease.
6. Defines master planned community as a development that consists of two or more separately
platted subdivisions and that is either subject to a master declaration of covenants, conditions
or restrictions, is subject to restrictive covenants sufficiently uniform in character to clearly
indicate a general scheme for improving or developing real property or is governed or
administered by a master owner's association.
7. Becomes effective on the general effective date.
Prepared by Senate Research
February 7, 2025
SB/slp