REFERENCE TITLE: physical availability exemption credit; groundwater State of Arizona Senate Fifty-seventh Legislature First Regular Session 2025 SB 1611 Introduced by Senators Shope: Petersen An Act amending title 45, chapter 2, article 5, Arizona Revised Statutes, by adding section 45-465.05; amending sections 45-576 and 45-576.08, Arizona Revised Statutes; relating to groundwater. (TEXT OF BILL BEGINS ON NEXT PAGE)
REFERENCE TITLE: physical availability exemption credit; groundwater
State of Arizona Senate Fifty-seventh Legislature First Regular Session 2025
SB 1611
Introduced by Senators Shope: Petersen
REFERENCE TITLE: physical availability exemption credit; groundwater
State of Arizona
Senate
Fifty-seventh Legislature
First Regular Session
2025
SB 1611
Introduced by
Senators Shope: Petersen
An Act
amending title 45, chapter 2, article 5, Arizona Revised Statutes, by adding section 45-465.05; amending sections 45-576 and 45-576.08, Arizona Revised Statutes; relating to groundwater.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona: Section 1. Title 45, chapter 2, article 5, Arizona Revised Statutes, is amended by adding section 45-465.05, to read: START_STATUTE45-465.05. Permanent relinquishment of irrigation grandfathered rights; physical availability exemption credits; assured water supply; definitions A. A person who owns land within an active management area that may be legally irrigated with groundwater pursuant to an irrigation grandfathered right may permanently Relinquish all or a portion of the irrigation grandfathered right in exchange for a physical availability exemption credit if both of the following apply: 1. Within a reasonable time before or after the land is retired, the person applies to the director to permanently relinquish all or a portion of the irrigation grandfathered right in exchange for a physical availability exemption credit. 2. The person's use of the irrigation grandfathered right complies with this chapter and the applicable management plan. b. a person who RECEIVES a PHYSICAL AVAILABILITY EXEMPTION credit may choose to ANNUALLY withdraw and use the following volume of groundwater PURSUANT to this section as follows: 1. In the phoenix and tucson active management areas: (a) two acre-feet per irrigation acre in the farm or portion of the farm. If the volume of the credit is two acre-feet per irrigation acre, sixty-seven percent of the groundwater used on that parcel of land must be replenished in accordance with the applicable assured water supply rules adopted by the department for the active management area where the land is located, and thirty-three percent of the groundwater used is deemed consistent with achievement of the management goal pursuant to section 45-576, subsection N, paragraph 2 and section 45-576.01. (b) onE AND ONE-HALF acre-feet per irrigation acre in the farm or portion of the farm. If the volume of the credit is one and one-half acre-feet per irrigation acre, fifty percent of the groundwater used on that parcel of land must be replenished in accordance with the applicable assured water supply rules adopted by the department for the active management area where the land is located, and fifty percent of the groundwater used is deemed consistent with achievement of the management goal pursuant to section 45-576, subsection N, paragraph 2 and section 45-576.01. (c) onE acre-foot per irrigation acre in the farm or portion of the farm. If the volume of the credit is one-acre foot per irrigation acre, thirty-three percent of the groundwater used on that parcel of land must be replenished in accordance with the applicable assured water supply rules adopted by the department for the active management area where the land is located, and sixty-seven percent of the groundwater used is deemed consistent with achievement of the management goal pursuant to section 45-576, subsection N, paragraph 2 and section 45-576.01. 2. In the pinal active management area: (a) One and one-half acre-feet per irrigation acre in the farm or portion of the farm. If the volume of the credit is one and one-half acre-feet per irrigation acre, one hundred percent of the groundwater used on that parcel of land must be replenished in accordance with the applicable assured water supply rules adopted by the department for the active management area where the land is located, and none of the groundwater used is deemed consistent with achievement of the management goal pursuant to section 45-576, subsection N, paragraph 2 and section 45-576.01. (b) onE acre-foot per irrigation acre in the farm or portion of the farm. If the volume of the credit is one acre-foot per irrigation acre, sixty-seven percent of the groundwater used on that parcel of land must be replenished in accordance with the applicable assured water supply rules adopted by the department for the active management area where the land is located, and thirty-three percent of the groundwater used is deemed consistent with achievement of the management goal pursuant to section 45-576, subsection N, paragraph 2 and section 45-576.01. (c) onE-half acre-foot per irrigation acre in the farm or portion of the farm. If the volume of the credit is one-half acre-foot per irrigation acre, thirty-three percent of the groundwater used on that parcel of land must be replenished in accordance with the applicable assured water supply rules adopted by the department for the active management area where the land is located, and sixty-seven percent of the groundwater used is deemed consistent with achievement of the management goal pursuant to section 45-576, subsection N, paragraph 2 and section 45-576.01. c. the director shall identify all of the following When issuing a physical availability exemption credit: 1. The volume of groundwater that may be withdrawn and used and the corresponding replenishment obligation as calculated pursuant to subsection B of this section. 2. the number and location of the acres that are associated with the relinquishment. 3. the wells that have been used to serve the irrigation grandfathered right. 4. the owner of the land at the time of the relinquishment, which shall be the holder of the physical availability exemption credit. 5. The director's determination whether the criteria prescribed in subsection d, paragraph 3, subdivision (b) of this section would be satisfied based on the director's most recent assured water supply projection. This determination shall be applied to an assured water supply application that is submitted to the department within two years after the date the physical availability exemption credit is issued and shall remain valid until the director makes a final decision on the assured water supply application. d. 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 pursuant to subsection B of this section shall be exempt from the requirement to demonstrate that the groundwater supply is physically available in accordance with section 45-576 if all of the following apply: 1. the proposed groundwater use associated with an application for an assured water supply is on one or more of the following locations: (a) the retired irrigation acres. (b) land within one mile of the exterior boundary of the retired irrigation acres. For the PURPOSES of this subdivision, If a portion of a parcel of land is within one mile of the exterior boundary, the entire parcel shall be included. 2. the applicant for an assured water supply proposes to WITHDRAW GROUNDWATER from one or more of the following locations: (a) wells that were used to serve the irrigation grandfathered right. (b) wells located within one mile of any well that was used to serve the irrigation grandfathered right. (c) wells located on the acres associated with the relinquishment. (d) wells located within one mile of the acres associated with the relinquishment. 3. the applicant demonstrates, using a method of analysis approved by the director, that groundwater can be withdrawn to serve the proposed use for one hundred years without exceeding the depth of the aquifer or the applicable depth-to-static water level as prescribed by SUBSECTION k of this section, whichever is less. For the purposes of this demonstration: (a) the director shall not consider other withdrawals of groundwater that exceed the depth of the aquifer or the applicable depth-to-static water level during the one hundred-year PERIOD. (b) FOR groundwater withdrawals located within one mile of any WELL that was used to serve the irrigation grandfathered right pursuant to PARAGRAPH 2, SUBDIVISION (b) of this subsection, the applicant may rely on the director's most recent assured water supply projection to satisfy this requirement. e. On request from the holder of an irrigation grandfathered right, the Director shall make a determination to grant a PHYSICAL AVAILABILITY EXEMPTION credit within an overall time frame of ninety days PURSUANT to the licensing TIME FRAMES PRESCRIBED in Title 41, Chapter 6, Article 7.1. The overall time frame shall include thirty days for an administrative completeness review and sixty days for a substantive review. The time frame may be extended by mutual agreement as prescribed by section 41-1075. f. Before the director issues a physical availability exemption credit, the director shall notify the holder of the irrigation grandfathered right in writing whether the criterion prescribed in subsection d, paragraph 3, subdivision (b) of this section would be satisfied based on the director'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. A person may not receive a physical availability exemption credit for a volume of water that exceeds the person's irrigation grandfathered right. g. on notice to the director by the holder of a physical availability exemption credit, some or all of the credit may be assigned to a municipal provider or to a subsequent owner of the land associated with the relinquishment. h. 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 pursuant to section 45-576, the director shall identify the volumes and corresponding replenishment obligation remaining for the physical availability exemption credit. i. after the issuance of a certificate of assured water supply based on a physical availability exemption credit, if a municipal provider that serves land associated with the relinquishment becomes a designated provider, the physical availability exemption credit associated with the certificate shall be used to support the designation. j. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director pursuant to this section. k. for the purposes of seeking an EXEMPTION from the PHYSICAL AVAILABILITY REQUIREMENT for an assured water supply as prescribed by SUBSECTION d of this section, the applicable depth-to-static water level for each active management area shall be: 1. in the pinal active management area, one thousand one hundred feet below land surface. 2. in all other active management areas, one thousand feet below land surface. l. a person that REPLENISHES GROUNDWATER PURSUANT to subsection B of this section may REPLENISH with effluent. A person that RECEIVES a physical AVAILABILITY EXEMPTION credit in the area DELINEATED for exemption under SECTION 45-411.01 is not subject to any REPLENISHMENT obligation otherwise imposed by this section. M. For the purposes of this section: 1. "MUNICIPAL provider" has the same meaning prescribed in section 45-561. 2. "well" includes a replacement well as prescribed in sections 45-597 and 45-598. END_STATUTE Sec. 2. Section 45-576, Arizona Revised Statutes, is amended to read: START_STATUTE45-576. Certificate of assured water supply; designated cities, towns and private water companies; exemptions; definition A. Except as provided in subsections G and J of this section, a person who proposes to offer subdivided lands, as defined in section 32-2101, for sale or lease in an active management area shall apply for and obtain a certificate of assured water supply from the director before presenting the plat for approval to the city, town or county in which the land is located, where such is required, and before filing with the state real estate commissioner a notice of intention to offer such lands for sale or lease, pursuant to section 32-2181, 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 pursuant to this section. B. Except as provided in subsections G and J of this section, a city, town or county may approve a subdivision plat only if the subdivider has obtained a certificate of assured water supply from the director or 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 pursuant to this section. The city, town or county shall note on the face of the approved plat that a certificate of assured water supply has been submitted with the plat or that the subdivider has obtained a written commitment of water service for the proposed subdivision from a city, town or private water company designated as having an assured water supply pursuant to this section. C. Except as provided in subsections G and J of this section, the state real estate commissioner may issue a public report authorizing the sale or lease of subdivided lands only on compliance with either of the following: 1. The subdivider, owner or agent has paid any activation fee required under section 48-3772, subsection A, paragraph 7 and any replenishment reserve fee required under section 48-3774.01, subsection A, paragraph 2 and has obtained a certificate of assured water supply from the director. 2. The subdivider has obtained a written commitment of water service for the lands from a city, town or private water company designated as having an assured water supply pursuant to this section and the subdivider, owner or agent has paid any activation fee required under section 48-3772, subsection A, paragraph 7. D. The director shall designate private water companies in active management areas that have an assured water supply. If a city or town acquires a private water company that has contracted for central Arizona project water, the city or town shall assume the private water company's contract for central Arizona project water. E. The director shall designate cities and towns in active management areas where an assured water supply exists. If a city or town has entered into a contract for central Arizona project water, the city or town is deemed to continue to have an assured water supply until December 31, 1997. Commencing on January 1, 1998, the determination that the city or town has an assured water supply is subject to review by the director and the director may determine that a city or town does not have an assured water supply. F. The director shall notify the mayors of all cities and towns in active management areas and the chairmen of the boards of supervisors of counties in which active management areas are located of the cities, towns and private water companies designated as having an assured water supply and any modification of that designation within thirty days of after the designation or modification. If the service area of the city, town or private water company has qualified as a member service area pursuant to title 48, chapter 22, article 4, the director shall also notify the conservation district of the designation or modification and shall report the projected average annual replenishment obligation for the member service area based on the projected and committed average annual demand for water within the service area during the effective term of the designation or modification subject to any limitation in an agreement between the conservation district and the city, town or private water company. For each city, town or private water company that qualified as a member service area under title 48, chapter 22 and that was designated as having an assured water supply before January 1, 2004, the director shall report to the conservation district on or before January 1, 2005 the projected average annual replenishment obligation based on the projected and committed average annual demand for water within the service area during the effective term of the designation subject to any limitation in an agreement between the conservation district and the city, town or private water company. Persons proposing to offer subdivided lands served by those designated cities, towns and private water companies for sale or lease are exempt from applying for and obtaining a certificate of assured water supply. G. This section does not apply in the case of the sale of lands for developments that are subject to a mineral extraction and metallurgical processing permit or an industrial use permit pursuant to sections 45-514 and 45-515. H. The director shall adopt rules to carry out the purposes of this section. On or before January 1, 2008, The rules shall provide for a reduction in water demand for an application for a designation of assured water supply or a certificate of assured water supply if a gray water reuse system will be installed that meets the requirements of the rules adopted by the department of environmental quality for gray water systems and if the application is for a certificate of assured water supply, the land for which the certificate is sought must qualify as a member land in a conservation district pursuant to title 48, chapter 22, article 4. For the purposes of this subsection, "gray water" has the same meaning prescribed in section 49-201. I. If the director designates a municipal provider as having an assured water supply under this section and the designation lapses or otherwise terminates while the municipal provider's service area is a member service area of a conservation district, the municipal provider or its successor shall continue to comply with the consistency with management goal requirements in the rules adopted by the director under subsection H of this section as if the designation was still in effect with respect to the municipal provider's designation uses. When determining compliance by the municipal provider or its successor with the consistency with management goal requirements in the rules, the director shall consider only water delivered by the municipal provider or its successor to the municipal provider's designation uses. A person is the successor of a municipal provider if the person commences water service to uses that were previously designation uses of the municipal provider. Any groundwater delivered by the municipal provider or its successor to the municipal provider's designation uses in excess of the amount allowed under the consistency with management goal requirements in the rules shall be considered excess groundwater for purposes of title 48, chapter 22. For the purposes of this subsection, "designation uses" means all water uses served by a municipal provider on the date the municipal provider's designation of assured water supply lapses or otherwise terminates and all recorded lots within the municipal provider's service area that were not being served by the municipal provider on that date but that received final plat approval from a city, town or county on or before that date. Designation uses do not include industrial uses served by an irrigation district under section 45-497. J. Subsections A, B and C of this section do not apply to a person who proposes to offer subdivided land for sale or lease in an active management area if all the following apply: 1. The director issued a certificate of assured water supply for the land to a previous owner of the land and the certificate was classified as a type A certificate under rules adopted by the director pursuant to subsection H of this section. 2. The director has not revoked the certificate of assured water supply described in paragraph 1 of this subsection, and proceedings to revoke the certificate are not pending before the department or a court. The department shall post on its website a list of all certificates of assured water supply that have been revoked or for which proceedings are pending before the department or a court. 3. The plat submitted to the department in the application for the certificate of assured water supply described in paragraph 1 of this subsection has not changed. 4. Water service is currently available to each lot within the subdivided land and the water provider listed on the certificate of assured water supply described in paragraph 1 of this subsection has not changed. 5. The subdivided land qualifies as a member land under title 48, chapter 22 and the subdivider has paid any activation fee required under section 48-3772, subsection A, paragraph 7 and any replenishment reserve fee required under section 48-3774.01, subsection A, paragraph 2. 6. The plat is submitted for approval to a city, town or county that is listed on the department's website as a qualified platting authority. K. Subsection J of this section does not affect the assignment of a certificate of assured water supply as prescribed by section 45-579. L. On or before December 31, 2023, the director shall study and submit to the governor, president of the senate and speaker of the house of representatives a report on whether and how a person that seeks a building permit for six or more residences within an active management area, without regard to any proposed lease term for those residences, should apply for and obtain a certificate of assured water supply from the director before presenting the permit application for approval to the county in which the land is located, unless the applicant has obtained a written commitment of water service for the residences from a city, town or private water company designated as having an assured water supply pursuant to this section. M. For the purposes of this section, the director shall find that the volume of groundwater CALCULATED PURSUANT to section 45-465.05, subsection B is exempt from the PHYSICAL AVAILABILITY requirement for an Assured water supply if the VOLUME of GROUNDWATER CALCULATED PURSUANT to section 45-465.05, subsection b meets the requirements prescribed by section 45-465.05, subsection d. M. n. For the purposes of this section, "assured water supply" means all of the following: 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 one hundred years. Beginning January 1 of the calendar year following the year in which a groundwater replenishment district is required to submit its preliminary plan pursuant to section 45-576.02, subsection A, paragraph 1, with respect to an applicant that is a member of the district, "sufficient groundwater" for the purposes of this paragraph means that the proposed groundwater withdrawals that the applicant will cause over a period of one hundred years will be of adequate quality and will not exceed, in combination with other withdrawals from land in the replenishment district, a depth to water of one thousand feet or the depth of the bottom of the aquifer, whichever is less. In determining depth to water for the purposes of this paragraph, the director shall consider the combination of: (a) The existing rate of decline. (b) The proposed withdrawals. (c) The expected water requirements of all recorded lots that are not yet served water and that are located in the service area of a municipal provider. 2. The projected groundwater use is consistent with the management plan and achievement of the management goal for the active management area. 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. The director may accept evidence of the construction assurances required by section 9-463.01, 11-823 11-822 or 32-2181 to satisfy this requirement. END_STATUTE Sec. 3. Section 45-576.08, Arizona Revised Statutes, is amended to read: START_STATUTE45-576.08. Pinal active management area; assured water supply; physical availability; exemption; definitions A. All of the following apply in the Pinal active management area for an application to modify a designation of assured water supply: 1. except as PROVIDED in SUBSECTION B of this section, if the total volume of groundwater and stored water to be recovered outside the area of impact of storage sought to be included in the designation does not exceed the total volume of those sources of water included in the previous designation minus the sum of the volume of groundwater actually withdrawn and the volume of stored water recovered outside the area of impact of storage by the applicant since issuance of the previous designation order: (a) The director shall not review the physical availability of the groundwater and stored water to be recovered outside of the area of impact of storage sought to be included in the designation. (b) The physical availability of the groundwater and stored water to be recovered outside the area of impact of storage sought to be included in the designation shall not be grounds for an objection. 2. Paragraph 1 of this subsection shall not affect the director's review of assured water supply criteria other than the physical availability of groundwater and stored water to be recovered outside the area of impact of storage. 3. Both of the following are deemed physically available for purposes of an assured water supply designation: (a) Stored water that is to be recovered by the applicant within the area of impact of storage pursuant to existing long-term storage credits pledged to the designation of assured water supply. (b) Stored water that is to be recovered by the applicant within the area of impact of storage either on an annual basis pursuant to section 45-851.01 or as long-term storage credits to be earned in the future if the water to be stored meets the physical availability requirements for the water supply under rules adopted pursuant to section 45-576, subsection H. b. for the CALCULATION prescribed by subsection A of this section, the director shall exclude any volume of groundwater that is subject to a PHYSICAL availability exemption credit as prescribed in section 45-465.05. B. c. For the purposes of this section: 1. "Area of impact of storage" means any of the following: (a) Within one mile of an existing or proposed underground storage facility where the water to be recovered is or will be stored. (b) Within the district boundaries of an irrigation district that has a permit for a groundwater savings facility and where the water to be recovered is or will be stored. (c) An area not described in subdivision (a) or (b) of this paragraph that has been shown to have been positively impacted by the storage of the water to be recovered as demonstrated by a hydrologic model approved by the director. 2. "Long-term storage credit" has the same meaning prescribed in section 45-802.01. 3. "Stored water" has the same meaning prescribed in section 45-802.01. END_STATUTE
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 45, chapter 2, article 5, Arizona Revised Statutes, is amended by adding section 45-465.05, to read:
START_STATUTE45-465.05. Permanent relinquishment of irrigation grandfathered rights; physical availability exemption credits; assured water supply; definitions
A. A person who owns land within an active management area that may be legally irrigated with groundwater pursuant to an irrigation grandfathered right may permanently Relinquish all or a portion of the irrigation grandfathered right in exchange for a physical availability exemption credit if both of the following apply:
1. Within a reasonable time before or after the land is retired, the person applies to the director to permanently relinquish all or a portion of the irrigation grandfathered right in exchange for a physical availability exemption credit.
2. The person's use of the irrigation grandfathered right complies with this chapter and the applicable management plan.
b. a person who RECEIVES a PHYSICAL AVAILABILITY EXEMPTION credit may choose to ANNUALLY withdraw and use the following volume of groundwater PURSUANT to this section as follows:
1. In the phoenix and tucson active management areas:
(a) two acre-feet per irrigation acre in the farm or portion of the farm. If the volume of the credit is two acre-feet per irrigation acre, sixty-seven percent of the groundwater used on that parcel of land must be replenished in accordance with the applicable assured water supply rules adopted by the department for the active management area where the land is located, and thirty-three percent of the groundwater used is deemed consistent with achievement of the management goal pursuant to section 45-576, subsection N, paragraph 2 and section 45-576.01.
(b) onE AND ONE-HALF acre-feet per irrigation acre in the farm or portion of the farm. If the volume of the credit is one and one-half acre-feet per irrigation acre, fifty percent of the groundwater used on that parcel of land must be replenished in accordance with the applicable assured water supply rules adopted by the department for the active management area where the land is located, and fifty percent of the groundwater used is deemed consistent with achievement of the management goal pursuant to section 45-576, subsection N, paragraph 2 and section 45-576.01.
(c) onE acre-foot per irrigation acre in the farm or portion of the farm. If the volume of the credit is one-acre foot per irrigation acre, thirty-three percent of the groundwater used on that parcel of land must be replenished in accordance with the applicable assured water supply rules adopted by the department for the active management area where the land is located, and sixty-seven percent of the groundwater used is deemed consistent with achievement of the management goal pursuant to section 45-576, subsection N, paragraph 2 and section 45-576.01.
2. In the pinal active management area:
(a) One and one-half acre-feet per irrigation acre in the farm or portion of the farm. If the volume of the credit is one and one-half acre-feet per irrigation acre, one hundred percent of the groundwater used on that parcel of land must be replenished in accordance with the applicable assured water supply rules adopted by the department for the active management area where the land is located, and none of the groundwater used is deemed consistent with achievement of the management goal pursuant to section 45-576, subsection N, paragraph 2 and section 45-576.01.
(b) onE acre-foot per irrigation acre in the farm or portion of the farm. If the volume of the credit is one acre-foot per irrigation acre, sixty-seven percent of the groundwater used on that parcel of land must be replenished in accordance with the applicable assured water supply rules adopted by the department for the active management area where the land is located, and thirty-three percent of the groundwater used is deemed consistent with achievement of the management goal pursuant to section 45-576, subsection N, paragraph 2 and section 45-576.01.
(c) onE-half acre-foot per irrigation acre in the farm or portion of the farm. If the volume of the credit is one-half acre-foot per irrigation acre, thirty-three percent of the groundwater used on that parcel of land must be replenished in accordance with the applicable assured water supply rules adopted by the department for the active management area where the land is located, and sixty-seven percent of the groundwater used is deemed consistent with achievement of the management goal pursuant to section 45-576, subsection N, paragraph 2 and section 45-576.01.
c. the director shall identify all of the following When issuing a physical availability exemption credit:
1. The volume of groundwater that may be withdrawn and used and the corresponding replenishment obligation as calculated pursuant to subsection B of this section.
2. the number and location of the acres that are associated with the relinquishment.
3. the wells that have been used to serve the irrigation grandfathered right.
4. the owner of the land at the time of the relinquishment, which shall be the holder of the physical availability exemption credit.
5. The director's determination whether the criteria prescribed in subsection d, paragraph 3, subdivision (b) of this section would be satisfied based on the director's most recent assured water supply projection. This determination shall be applied to an assured water supply application that is submitted to the department within two years after the date the physical availability exemption credit is issued and shall remain valid until the director makes a final decision on the assured water supply application.
d. 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 pursuant to subsection B of this section shall be exempt from the requirement to demonstrate that the groundwater supply is physically available in accordance with section 45-576 if all of the following apply:
1. the proposed groundwater use associated with an application for an assured water supply is on one or more of the following locations:
(a) the retired irrigation acres.
(b) land within one mile of the exterior boundary of the retired irrigation acres. For the PURPOSES of this subdivision, If a portion of a parcel of land is within one mile of the exterior boundary, the entire parcel shall be included.
2. the applicant for an assured water supply proposes to WITHDRAW GROUNDWATER from one or more of the following locations:
(a) wells that were used to serve the irrigation grandfathered right.
(b) wells located within one mile of any well that was used to serve the irrigation grandfathered right.
(c) wells located on the acres associated with the relinquishment.
(d) wells located within one mile of the acres associated with the relinquishment.
3. the applicant demonstrates, using a method of analysis approved by the director, that groundwater can be withdrawn to serve the proposed use for one hundred years without exceeding the depth of the aquifer or the applicable depth-to-static water level as prescribed by SUBSECTION k of this section, whichever is less. For the purposes of this demonstration:
(a) the director shall not consider other withdrawals of groundwater that exceed the depth of the aquifer or the applicable depth-to-static water level during the one hundred-year PERIOD.
(b) FOR groundwater withdrawals located within one mile of any WELL that was used to serve the irrigation grandfathered right pursuant to PARAGRAPH 2, SUBDIVISION (b) of this subsection, the applicant may rely on the director's most recent assured water supply projection to satisfy this requirement.
e. On request from the holder of an irrigation grandfathered right, the Director shall make a determination to grant a PHYSICAL AVAILABILITY EXEMPTION credit within an overall time frame of ninety days PURSUANT to the licensing TIME FRAMES PRESCRIBED in Title 41, Chapter 6, Article 7.1. The overall time frame shall include thirty days for an administrative completeness review and sixty days for a substantive review. The time frame may be extended by mutual agreement as prescribed by section 41-1075.
f. Before the director issues a physical availability exemption credit, the director shall notify the holder of the irrigation grandfathered right in writing whether the criterion prescribed in subsection d, paragraph 3, subdivision (b) of this section would be satisfied based on the director'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. A person may not receive a physical availability exemption credit for a volume of water that exceeds the person's irrigation grandfathered right.
g. on notice to the director by the holder of a physical availability exemption credit, some or all of the credit may be assigned to a municipal provider or to a subsequent owner of the land associated with the relinquishment.
h. 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 pursuant to section 45-576, the director shall identify the volumes and corresponding replenishment obligation remaining for the physical availability exemption credit.
i. after the issuance of a certificate of assured water supply based on a physical availability exemption credit, if a municipal provider that serves land associated with the relinquishment becomes a designated provider, the physical availability exemption credit associated with the certificate shall be used to support the designation.
j. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director pursuant to this section.
k. for the purposes of seeking an EXEMPTION from the PHYSICAL AVAILABILITY REQUIREMENT for an assured water supply as prescribed by SUBSECTION d of this section, the applicable depth-to-static water level for each active management area shall be:
1. in the pinal active management area, one thousand one hundred feet below land surface.
2. in all other active management areas, one thousand feet below land surface.
l. a person that REPLENISHES GROUNDWATER PURSUANT to subsection B of this section may REPLENISH with effluent. A person that RECEIVES a physical AVAILABILITY EXEMPTION credit in the area DELINEATED for exemption under SECTION 45-411.01 is not subject to any REPLENISHMENT obligation otherwise imposed by this section.
M. For the purposes of this section:
1. "MUNICIPAL provider" has the same meaning prescribed in section 45-561.
2. "well" includes a replacement well as prescribed in sections 45-597 and 45-598. END_STATUTE
Sec. 2. Section 45-576, Arizona Revised Statutes, is amended to read:
START_STATUTE45-576. Certificate of assured water supply; designated cities, towns and private water companies; exemptions; definition
A. Except as provided in subsections G and J of this section, a person who proposes to offer subdivided lands, as defined in section 32-2101, for sale or lease in an active management area shall apply for and obtain a certificate of assured water supply from the director before presenting the plat for approval to the city, town or county in which the land is located, where such is required, and before filing with the state real estate commissioner a notice of intention to offer such lands for sale or lease, pursuant to section 32-2181, 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 pursuant to this section.
B. Except as provided in subsections G and J of this section, a city, town or county may approve a subdivision plat only if the subdivider has obtained a certificate of assured water supply from the director or 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 pursuant to this section. The city, town or county shall note on the face of the approved plat that a certificate of assured water supply has been submitted with the plat or that the subdivider has obtained a written commitment of water service for the proposed subdivision from a city, town or private water company designated as having an assured water supply pursuant to this section.
C. Except as provided in subsections G and J of this section, the state real estate commissioner may issue a public report authorizing the sale or lease of subdivided lands only on compliance with either of the following:
1. The subdivider, owner or agent has paid any activation fee required under section 48-3772, subsection A, paragraph 7 and any replenishment reserve fee required under section 48-3774.01, subsection A, paragraph 2 and has obtained a certificate of assured water supply from the director.
2. The subdivider has obtained a written commitment of water service for the lands from a city, town or private water company designated as having an assured water supply pursuant to this section and the subdivider, owner or agent has paid any activation fee required under section 48-3772, subsection A, paragraph 7.
D. The director shall designate private water companies in active management areas that have an assured water supply. If a city or town acquires a private water company that has contracted for central Arizona project water, the city or town shall assume the private water company's contract for central Arizona project water.
E. The director shall designate cities and towns in active management areas where an assured water supply exists. If a city or town has entered into a contract for central Arizona project water, the city or town is deemed to continue to have an assured water supply until December 31, 1997. Commencing on January 1, 1998, the determination that the city or town has an assured water supply is subject to review by the director and the director may determine that a city or town does not have an assured water supply.
F. The director shall notify the mayors of all cities and towns in active management areas and the chairmen of the boards of supervisors of counties in which active management areas are located of the cities, towns and private water companies designated as having an assured water supply and any modification of that designation within thirty days of after the designation or modification. If the service area of the city, town or private water company has qualified as a member service area pursuant to title 48, chapter 22, article 4, the director shall also notify the conservation district of the designation or modification and shall report the projected average annual replenishment obligation for the member service area based on the projected and committed average annual demand for water within the service area during the effective term of the designation or modification subject to any limitation in an agreement between the conservation district and the city, town or private water company. For each city, town or private water company that qualified as a member service area under title 48, chapter 22 and that was designated as having an assured water supply before January 1, 2004, the director shall report to the conservation district on or before January 1, 2005 the projected average annual replenishment obligation based on the projected and committed average annual demand for water within the service area during the effective term of the designation subject to any limitation in an agreement between the conservation district and the city, town or private water company. Persons proposing to offer subdivided lands served by those designated cities, towns and private water companies for sale or lease are exempt from applying for and obtaining a certificate of assured water supply.
G. This section does not apply in the case of the sale of lands for developments that are subject to a mineral extraction and metallurgical processing permit or an industrial use permit pursuant to sections 45-514 and 45-515.
H. The director shall adopt rules to carry out the purposes of this section. On or before January 1, 2008, The rules shall provide for a reduction in water demand for an application for a designation of assured water supply or a certificate of assured water supply if a gray water reuse system will be installed that meets the requirements of the rules adopted by the department of environmental quality for gray water systems and if the application is for a certificate of assured water supply, the land for which the certificate is sought must qualify as a member land in a conservation district pursuant to title 48, chapter 22, article 4. For the purposes of this subsection, "gray water" has the same meaning prescribed in section 49-201.
I. If the director designates a municipal provider as having an assured water supply under this section and the designation lapses or otherwise terminates while the municipal provider's service area is a member service area of a conservation district, the municipal provider or its successor shall continue to comply with the consistency with management goal requirements in the rules adopted by the director under subsection H of this section as if the designation was still in effect with respect to the municipal provider's designation uses. When determining compliance by the municipal provider or its successor with the consistency with management goal requirements in the rules, the director shall consider only water delivered by the municipal provider or its successor to the municipal provider's designation uses. A person is the successor of a municipal provider if the person commences water service to uses that were previously designation uses of the municipal provider. Any groundwater delivered by the municipal provider or its successor to the municipal provider's designation uses in excess of the amount allowed under the consistency with management goal requirements in the rules shall be considered excess groundwater for purposes of title 48, chapter 22. For the purposes of this subsection, "designation uses" means all water uses served by a municipal provider on the date the municipal provider's designation of assured water supply lapses or otherwise terminates and all recorded lots within the municipal provider's service area that were not being served by the municipal provider on that date but that received final plat approval from a city, town or county on or before that date. Designation uses do not include industrial uses served by an irrigation district under section 45-497.
J. Subsections A, B and C of this section do not apply to a person who proposes to offer subdivided land for sale or lease in an active management area if all the following apply:
1. The director issued a certificate of assured water supply for the land to a previous owner of the land and the certificate was classified as a type A certificate under rules adopted by the director pursuant to subsection H of this section.
2. The director has not revoked the certificate of assured water supply described in paragraph 1 of this subsection, and proceedings to revoke the certificate are not pending before the department or a court. The department shall post on its website a list of all certificates of assured water supply that have been revoked or for which proceedings are pending before the department or a court.
3. The plat submitted to the department in the application for the certificate of assured water supply described in paragraph 1 of this subsection has not changed.
4. Water service is currently available to each lot within the subdivided land and the water provider listed on the certificate of assured water supply described in paragraph 1 of this subsection has not changed.
5. The subdivided land qualifies as a member land under title 48, chapter 22 and the subdivider has paid any activation fee required under section 48-3772, subsection A, paragraph 7 and any replenishment reserve fee required under section 48-3774.01, subsection A, paragraph 2.
6. The plat is submitted for approval to a city, town or county that is listed on the department's website as a qualified platting authority.
K. Subsection J of this section does not affect the assignment of a certificate of assured water supply as prescribed by section 45-579.
L. On or before December 31, 2023, the director shall study and submit to the governor, president of the senate and speaker of the house of representatives a report on whether and how a person that seeks a building permit for six or more residences within an active management area, without regard to any proposed lease term for those residences, should apply for and obtain a certificate of assured water supply from the director before presenting the permit application for approval to the county in which the land is located, unless the applicant has obtained a written commitment of water service for the residences from a city, town or private water company designated as having an assured water supply pursuant to this section.
M. For the purposes of this section, the director shall find that the volume of groundwater CALCULATED PURSUANT to section 45-465.05, subsection B is exempt from the PHYSICAL AVAILABILITY requirement for an Assured water supply if the VOLUME of GROUNDWATER CALCULATED PURSUANT to section 45-465.05, subsection b meets the requirements prescribed by section 45-465.05, subsection d.
M. n. For the purposes of this section, "assured water supply" means all of the following:
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 one hundred years. Beginning January 1 of the calendar year following the year in which a groundwater replenishment district is required to submit its preliminary plan pursuant to section 45-576.02, subsection A, paragraph 1, with respect to an applicant that is a member of the district, "sufficient groundwater" for the purposes of this paragraph means that the proposed groundwater withdrawals that the applicant will cause over a period of one hundred years will be of adequate quality and will not exceed, in combination with other withdrawals from land in the replenishment district, a depth to water of one thousand feet or the depth of the bottom of the aquifer, whichever is less. In determining depth to water for the purposes of this paragraph, the director shall consider the combination of:
(a) The existing rate of decline.
(b) The proposed withdrawals.
(c) The expected water requirements of all recorded lots that are not yet served water and that are located in the service area of a municipal provider.
2. The projected groundwater use is consistent with the management plan and achievement of the management goal for the active management area.
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. The director may accept evidence of the construction assurances required by section 9-463.01, 11-823 11-822 or 32-2181 to satisfy this requirement. END_STATUTE
Sec. 3. Section 45-576.08, Arizona Revised Statutes, is amended to read:
START_STATUTE45-576.08. Pinal active management area; assured water supply; physical availability; exemption; definitions
A. All of the following apply in the Pinal active management area for an application to modify a designation of assured water supply:
1. except as PROVIDED in SUBSECTION B of this section, if the total volume of groundwater and stored water to be recovered outside the area of impact of storage sought to be included in the designation does not exceed the total volume of those sources of water included in the previous designation minus the sum of the volume of groundwater actually withdrawn and the volume of stored water recovered outside the area of impact of storage by the applicant since issuance of the previous designation order:
(a) The director shall not review the physical availability of the groundwater and stored water to be recovered outside of the area of impact of storage sought to be included in the designation.
(b) The physical availability of the groundwater and stored water to be recovered outside the area of impact of storage sought to be included in the designation shall not be grounds for an objection.
2. Paragraph 1 of this subsection shall not affect the director's review of assured water supply criteria other than the physical availability of groundwater and stored water to be recovered outside the area of impact of storage.
3. Both of the following are deemed physically available for purposes of an assured water supply designation:
(a) Stored water that is to be recovered by the applicant within the area of impact of storage pursuant to existing long-term storage credits pledged to the designation of assured water supply.
(b) Stored water that is to be recovered by the applicant within the area of impact of storage either on an annual basis pursuant to section 45-851.01 or as long-term storage credits to be earned in the future if the water to be stored meets the physical availability requirements for the water supply under rules adopted pursuant to section 45-576, subsection H.
b. for the CALCULATION prescribed by subsection A of this section, the director shall exclude any volume of groundwater that is subject to a PHYSICAL availability exemption credit as prescribed in section 45-465.05.
B. c. For the purposes of this section:
1. "Area of impact of storage" means any of the following:
(a) Within one mile of an existing or proposed underground storage facility where the water to be recovered is or will be stored.
(b) Within the district boundaries of an irrigation district that has a permit for a groundwater savings facility and where the water to be recovered is or will be stored.
(c) An area not described in subdivision (a) or (b) of this paragraph that has been shown to have been positively impacted by the storage of the water to be recovered as demonstrated by a hydrologic model approved by the director.
2. "Long-term storage credit" has the same meaning prescribed in section 45-802.01.
3. "Stored water" has the same meaning prescribed in section 45-802.01. END_STATUTE