Assigned to NRRA                                                                                                      AS PASSED BY THE SENATE

ARIZONA STATE SENATE

Forty-eighth Legislature, First Regular Session

AMENDED

FACT SHEET FOR S.B. 1575

water adequacy amendments

Purpose

            Authorizes a county or municipality that is located outside an Active Management      Area  to adopt by a unanimous vote an ordinance requiring an adequate water supply before any subdivision may be approved.

Background

            In 1973, the Legislature enacted laws requiring all new subdivisions to submit plans on water adequacy to meet the needs of the subdivision.  The 1980 Groundwater Code strengthened those requirements by designating five Active management Areas (AMAs) around the state in areas where groundwater overdraft was most severe. The Groundwater Code requires a subdivision to demonstrate an assured water supply (AWS) to the Department of Water Resources (ADWR) or have a written commitment for water from a city, town or private water company before the Department of Real Estate (ADRE) may issue a public report that the land may be sold. In order to demonstrate an AWS a developer must demonstrate: 1) a 100-year water supply of sufficient quality and quantity; 2) projected groundwater use is consistent with the management plan as well as the AMA management goal; and 3) financial capability to construct any necessary water facilities.

            The assured water supply requirements apply only inside of AMAs.  Outside of an AMA, a developer must submit, to the Director of ADWR (Director), plans for the water supply and demonstrate the adequacy of the water supply to meet the projected needs of the subdivision.  The Director must evaluate the proposed water supply and forward a copy of the evaluation to the State Real Estate Commissioner (Commissioner). If the Director has reported an inadequate water supply for the subdivision, the Commissioner must note the inadequacy on all promotional material and contracts for the sale of lots in the subdivision. 

            The Statewide Water Advisory Group (SWAG) was created in 2006 to advise ADWR regarding programs for water resources development and management.  It is made up of 54 members from all over the state in a variety of occupations, including county supervisors, city and state legislators, business owners and water providers.

            There is no estimated fiscal impact to the state General Fund as a result of this legislation.

Provisions

1. Authorizes a county board of supervisors by unanimous vote to adopt an ordinance requiring a proposed subdivision located outside of an AMA to demonstrate an adequate water supply before the final plat can be approved.

2. Requires the Director to notify, in writing, all cities and towns located within a county that has adopted an ordinance requiring an adequate water supply and requires the city or town to comply with and enforce the provisions of the ordinance.

3. Authorizes cities and towns located in counties that have not adopted an ordinance requiring an adequate water supply for subdivision approval to adopt a city ordinance allowing the governing body to disapprove a subdivision.

4. Requires a county board of supervisors, or a municipality if the county has not adopted an ordinance, to notify, in writing, the Director of ADWR, the Director of the Department of Environmental Quality (ADEQ) and the State Real Estate Commissioner of the adoption of an ordinance requiring an adequate water supply for all new subdivisions, including any exemptions and amendment.

5. Requires the Director to evaluate the proposed source of water for every subdivision to determine whether there is an adequate water supply and report to the Commissioner and the city, town or county responsible for platting the subdivision. 

6. Outlines notification requirements the Director must follow when an application for a water report or an application for an adequate water supply designation is received by ADWR.

7. Requires a subdivision located in a county or municipality that has an ordinance requiring an adequate water supply, to accompany a notice to subdivide to the ADRE with a report from the Director stating the subdivision has an adequate water supply unless:

a) the subdivider submitted the report to a county, city or town before approval of the plat and that has been noted on the plat.

b) the subdivider has a written commitment of water service from a provider with an adequate water supply designation.

c) the plat was approved pursuant to an exemption, which must be noted on all promotional material and contracts for the sale of lots.

8. Stipulates that the county board of supervisors or municipal governing body must note on the face of the plat that the Director has reported that the subdivision has an adequate water supply or a commitment of water service from a water provider with a designation of adequate water supply.

9. Requires the county board of supervisors or municipal governing body to record a statement at the County Recorder’s office if the board of supervisors subsequently finds that the subdivision is being served by a water provider with a designation of an adequate water supply.

10. Requires the Commissioner to deny issuance of a public report for any subdivision or timeshare property located in a county or municipality that has adopted an ordinance requiring an adequate water supply unless:

a) ADWR has reported that the subdivision has an adequate water supply.

b) the subdivider has written commitment for a water supply from a water provider with a designation of adequacy.

c) the subdivision was approved pursuant to an exception.

11. Requires the Director of ADWR to provide an exemption from an adequate water supply ordinance if all of the following apply:

a) the subdivider has made substantial capital investment toward the construction of the proposed project before the date the provision was adopted by the board, which includes construction costs, site preparation costs, construction of off-site improvements and conversion or remodeling costs for existing structures, as well as planning and design costs, but does not include the costs of purchasing the property.

b) the subdivider has demonstrated that the subdivider was not aware of the adequate water supply requirement at the time that the capital investment was made.

c) the proposed project complied in all other respects with existing law.

      This exemption expires after five years unless a parcel is sold, but the Director may extend the exemption for up to two additional five-year periods if sales have been delayed for reasons outside of the control of the subdivider.  If an extension expires, the subdivider must reapply to subdivide lands.

12. Outlines notification requirements that the Director must follow on receipt of an application  for an adequate water supply designation for uses in counties or municipalities that have adopted an adequate water supply requirement.

13. Authorizes the Director of ADWR to provide an exemption from a water adequacy requirement for a subdivision if both of the following apply:

a) the subdivision has demonstrated financial capability but the water supply project will not be capable of delivering water because either:

i. the water supply system is not finished, but will by within 20 years, or

ii. the subdivision will be served Colorado River Water by a water provider that does not currently have the legal right to serve the water to the subdivision, but the water provider has an existing contract for the Colorado River water and will have the legal right to serve water within 20 years.

iii. the subdivision will have an adequate water supply with the construction of the physical works is completed or the water supply is legally available, whichever applies and the interim supply will not be available for 100 years.

14. Authorizes the  board of supervisors to provide an exemption for a subdivision that the Director has determined will have an inadequate water supply because the water supply will be transported to the subdivision by motor vehicle or train if there is no feasible alternative water supply, the municipal water provider providing the water has consented to the water withdrawal, transported groundwater complies with all applicable laws and the transportation of water to the subdivision meets any additional conditions enacted by the Legislature.

15. Requires a municipality or county, if the subdivision was approved through an exemption, to note on the face of the plat that the Director has determined the water supply to be inadequate and a statement describing the exemption under which the plat was approved. 

16. Requires a subdivider to record a document with the plat that contains a statement that the subdivision is served by a water supply that has been determined as inadequate and that water must be hauled to the subdivision.

17. Requires the Director to amend rules relating to adequate water supply to include criteria for making a determination and criteria for demonstrating a physical available one hundred year water supply.

18. Requires the Director to include the estimated water demand of any projected use in the same groundwater basin  in the calculation of the projected one hundred-year depth-to-static water level when determining if an adequate water supply exists.

19. Defines adequate water supply as: 1) sufficient groundwater, surface water or effluent of adequate quality will be continuously, legally and physically available to satisfy the water needs of the proposed use for at least one hundred years; or 2) the financial capability has been demonstrated to construct the water facilities necessary to make the supply of water available to the proposed use, including a delivery system and any storage facilities or treatment works.

20. Makes technical and conforming changes.

21. Becomes effective on the general effective date.

Amendments Adopted by Committee

1. Requires unanimous vote by a county board of supervisors to adopt an ordinance requiring water adequacy.

2. Removes the ability for a buyer to void a property sale if proper disclosure of water is hauled to the property.

Amendments Adopted by Committee of the Whole

1. Clarifies “substantial capital investment.”

2. Places authority for granting exemptions, except for hauled water, with the Director of ADWR.

Senate Action

NRRA             2/14/07     DPA     4-3-0-0

3^rd Read           3/8/07                    26-2-2

Prepared by Senate Research

March 27, 2007

MG/ac