HB2512 - 532R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 11-823, Arizona Revised Statutes, is amended to read:

START_STATUTE11-823. Water supply; adequacy; exemptions

A. To protect the public health and safety, the general regulations adopted by the board pursuant to section 11‑821, subsection B, if approved by unanimous vote of the board of supervisors, may provide that, except as provided in subsection C and subsection D, paragraph 1 of this section, the board shall not approve a final plat for a subdivision composed of subdivided lands, as defined in section 32‑2101, located outside of an active management area, as defined in section 45‑402, unless one of the following applies:

1. The director of water resources has determined that there is an adequate water supply for the subdivision pursuant to section 45‑108 and the subdivider has included the report with the plat.

2. 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 adequate water supply by the director of water resources pursuant to section 45‑108.

B. If the board unanimously adopts the provision authorized by subsection A of this section:

1. The board may include in the general regulations an exemption from the provision for a subdivision that the director of water resources has determined will have an inadequate water supply because the water supply will be transported to the subdivision by motor vehicle or train if all of the following apply:

(a) The board determines that there is no feasible alternative water supply for the subdivision and that the transportation of water to the subdivision will not constitute a significant risk to the health and safety of the residents of the subdivision.

(b) If the water to be transported to the subdivision will be withdrawn or diverted in the service area of a municipal provider as defined in section 45‑561, the municipal provider has consented to the withdrawal or diversion.

(c) If the water to be transported is groundwater, the transportation complies with the provisions governing the transportation of groundwater in title 45, chapter 2, article 8.

(d) The transportation of water to the subdivision meets any additional conditions imposed by the county.

2. The board shall promptly give written notice of the adoption of the provision to the director of water resources, the director of environmental quality and the state real estate commissioner. The notice shall include a certified copy of the provision and any exemptions adopted pursuant to paragraph 1 of this subsection. Water providers may be eligible to receive monies in a water supply development fund, as otherwise provided by law.

3. Except as provided in paragraph 4 of this subsection, the board shall not rescind the provision or amend it in a manner that is inconsistent with subsection A of this section. If the board amends the provision, it shall give written notice of the amendment to the director of water resources, the director of environmental quality and the state real estate commissioner. The board may rescind an exemption adopted pursuant to paragraph 1 of this subsection. If the board rescinds the exemption, it shall give written notice of the rescission to the director of water resources, the director of environmental quality and the state real estate commissioner, and the board shall not readopt the exemption for at least five years after the rescission becomes effective.

4. For a county that is not in an active management area:

(a) the board shall review the provision and after review may by unanimous vote at a public meeting vote not to readopt the provision. The review shall occur not more than five years after the effective date of this amendment to this section AND at least EVERY TEN YEARS THEREAFTER, but not more frequently than every five years thereafter.

(b) If the board does not vote UNANIMOUSLY not to readopt the PROVISION or if the board after review does not vote on the provision, the provision remains in effect.

(c) If the board VOTES unanimously not to readopt the provision, the provision has no further force and subsection A of this section does not apply IF ALL OF THE FOLLOWING APPLY AT THE TIME of the vote:

(i) THE county or the largest city in the county IS PARTICIPATING IN A PROGRAM TO recharge or supplement THE AQUIFER UNDERLYING THE county.

(ii) THE county or the largest city in the county HAS ADOPTED A PLAN FOR THE REUSE OF RECLAIMED WATER. FOR THE PURPOSES OF THIS item, "RECLAIMED WATER" HAS THE SAME MEANING PRESCRIBED IN SECTION 49-201.

(iii) THE county or the largest city in the county HAS ADOPTED A RESIDENTIAL AND NONRESIDENTIAL WATER CONSERVATION PROGRAM FOR INTERIOR AND EXTERIOR WATER USE.

(iv) If the largest city in the county is a community water system as defined in section 45-341, the city is in compliance with all applicable planning and reporting requirements under title 45, chapter 1, article 14.

(v) The county or the largest city in the county has adopted an ordinance allowing only the use of xeriscape or other drought tolerant or low‑water use vegetation for landscaping within any publicly owned right‑of-way of a highway, street, road, sidewalk, curb or shoulder or any median of a highway, street or road within the county or the city, as applicable, after the effective date of that landscape ordinance.

(vi) THE COUNTY OR THE LARGEST CITY IN THE COUNTY IS FUNDING A PROGRAM TO PROVIDE REBATES FOR REPLACING LOW‑EFFICIENCY PLUMBING FIXTURES IN RESIDENTIAL AND NONRESIDENTIAL STRUCTURES WITHIN THE county or city WITH HIGH EFFICIENCY PLUMBING FIXTURES.

(vii) IF the largest city in the county iS A WATER PROVIDER, THE city IS LIMITING THE AMOUNT OF LOST AND UNACCOUNTED FOR WATER IN ITS WATER DISTRIBUTION SYSTEM TO NOT MORE THAN TEN PERCENT OF THE TOTAL QUANTITY OF WATER THAT ENTERS THE DISTRIBUTION SYSTEM.

(viii) THE county or the largest city in the county IS FUNDING A PUBLIC EDUCATION PROGRAM RELATED TO WATER CONSERVATION AND HAS IDENTIFIED AND IMPLEMENTED OTHER PROGRAMS TO REDUCE WATER USE WITHIN THE county or city, as applicable.

5. The board shall give written notice of any vote not to readopt the provision to the director of water resources, the director of environmental quality and the state real estate commissioner if the PROVISION is no longer in effect as prescribed in paragraph 4 of this subsection.

4. 6. If the board approves a subdivision plat pursuant to subsection A, paragraph 1 or 2 of this section, the board shall note on the face of the plat that the director of water resources has reported that the subdivision has an adequate water supply or that the subdivider has obtained a commitment of water service for the proposed subdivision from a city, town or private water company designated as having an adequate water supply pursuant to section 45‑108.

5. 7. If the board approves a subdivision plat pursuant to an exemption authorized by paragraph 1 of this subsection or granted by the director of water resources pursuant to section 45‑108.02 or 45‑108.03:

(a) The board shall give written notice of the approval to the director of water resources and the director of environmental quality.

(b) The board shall include on the face of the plat a statement that the director of water resources has determined that the water supply for the subdivision is inadequate and a statement describing the exemption under which the plat was approved, including a statement that the board or the director of water resources, whichever applies, has determined that the specific conditions of the exemption were met. If the director of water resources subsequently informs the board that the subdivision is being served by a water provider that has been designated by the director as having an adequate water supply pursuant to section 45‑108, the board shall record in the county recorder's office a statement disclosing that fact.

C. Subsection A of this section does not apply to:

1. A proposed subdivision that the director of water resources has determined will have an inadequate water supply pursuant to section 45‑108 if the director grants an exemption for the subdivision pursuant to section 45‑108.02 and the exemption has not expired or the director grants an exemption pursuant to section 45‑108.03.

2. A proposed subdivision that received final plat approval from the county before the requirement for an adequate water supply became effective in the county if the plat has not been materially changed since it received the final plat approval. If changes were made to the plat after the plat received the final plat approval, the director of water resources shall determine whether the changes are material pursuant to the rules adopted by the director to implement section 45‑108. If the county approves a plat pursuant to this paragraph and the director of water resources has determined that there is an inadequate water supply for the subdivision pursuant to section 45‑108, the county shall note this on the face of the plat.

D. If the subdivision is composed of subdivided lands as defined in section 32‑2101 outside of an active management area and the board has not adopted a provision pursuant to subsection A of this section:

1. If the director of water resources has determined that there is an adequate water supply for the subdivision pursuant to section 45‑108 or if 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 adequate water supply by the director of water resources pursuant to section 45‑108, the board shall note this on the face of the plat if the plat is approved.

2. If the director of water resources has determined that there is an inadequate water supply for the subdivision pursuant to section 45‑108, the board shall note this on the face of the plat if the plat is approved. END_STATUTE

Sec. 2. Section 37-1002, Arizona Revised Statutes, is amended to read:

START_STATUTE37-1002. Definitions

In this chapter, unless the context otherwise requires:

1. "Agency of the state" includes the government of the state and any subdivision, agency or instrumentality, corporate or otherwise, of the state government.

2. 1. "Agricultural lands" means irrigated farm lands farmlands or dry farm lands farmlands that are devoted to the purpose of agriculture.

3. 2. "Commissioner" or "state natural resource conservation commissioner" means the state land commissioner forester.

4. 3. "Department" means the state land department Arizona department of forestry and fire management.

5. 4. "District" means a natural resource conservation district that is organized in accordance with the provisions of this chapter.

6. 5. "District cooperator" means any person who has entered into a cooperative agreement with a natural resource conservation district for the purpose of protecting, conserving and practicing wise use of the natural resources under his that person's control.

7. 6. "Due notice" means notice that is published at least twice with an interval of at least six days between the two publication dates, in a newspaper of general circulation within the area affected, or if there is no newspaper of general circulation within the area affected, in a newspaper of general circulation in the county in which the area is located.

8. 7. "Government" or "governmental" includes the government of the this state, the government of the United States, and any subdivision, agency or instrumentality, corporate or otherwise, of either of them.

9. 8. "Irrigation district" means an irrigation district, drainage district, water conservation district, or agricultural improvement district, and, in addition thereto, includes any district, political subdivision, government agency, canal company, association, corporation or instrumentality of the this state, having territorial boundaries and created or organized for the purpose of furnishing irrigation water for lands in the this state.

10. 9. "Landowner" or "owner of land" means any person, firm or corporation, including the this state, holding title to any land lying within a district organized or proposed to be organized under the provisions of this chapter, and includes a buyer on contract who is the occupant of land. For the purposes of this chapter, a holder of a certificate of purchase or lease from the state shall be considered the "landowner" or "owner of land" .

11. 10. "Nominating petition" means a petition to nominate candidates for the office of supervisor.

12. 11. "Petition" means a petition for the creation or for the dissolution of a district.

13. 12. "Qualified elector" means a person who is a district cooperator and a qualified elector of the this state.

14. 13. "Range lands Rangeland" means lands other than agricultural lands and that are devoted principally to the purpose of grazing livestock.

15. 14. "Supervisor" means a member of the governing body of a district, elected or appointed in accordance with the provisions of this chapter.

16. 15. "United States" or "agencies of the United States" includes the United States, the United States department of agriculture and any other agency or instrumentality, corporate or otherwise, of the United States. END_STATUTE

Sec. 3. Section 37-1011, Arizona Revised Statutes, is amended to read:

START_STATUTE37-1011. Division of natural resource conservation

For the purpose of administering this chapter, there shall be a division of the state land department which shall be known as the division of natural resource conservation is established in the Arizona department of forestry and fire management under the authority and direction of the state natural resource conservation commissioner. END_STATUTE

Sec. 4. Section 37-1012, Arizona Revised Statutes, is amended to read:

START_STATUTE37-1012. State natural resource conservation commissioner

A. The state land commissioner shall be forester is the state natural resource conservation commissioner. He and shall serve as such without additional compensation.

B. The commissioner may appoint an administrative officer of the division of natural resource conservation, a secretary and such other assistants as may be required, assign their duties, define their powers and determine the amount of bond required of any assistant entrusted with funds or property. The compensation of all such assistants shall be as determined pursuant to section 38‑611.

C. The commissioner shall adopt a seal, which shall be judicially noticed, and shall hold such public hearings, provide for the keeping of a record of all proceedings and annual records of district operations, promulgate such adopt orders, and rules and regulations and perform such other acts as are necessary to carry out the provisions of this chapter. END_STATUTE

Sec. 5. Section 37-1013, Arizona Revised Statutes, is amended to read:

START_STATUTE37-1013. Powers and duties of commissioner

A. The state natural resource conservation commissioner shall:

1. Offer appropriate assistance to the supervisors of districts in carrying out their powers and programs.

2. Keep the supervisors of each district informed of the activities and experiences of other districts, and facilitate cooperation and interchange of advice and experience between districts.

3. Coordinate the programs of the several districts insofar as possible by advice and consultation.

4. Require the supervisors of each district to file with the commissioner annually any audits and the records of the operations of the district for the preceding year in the form and detail as the commissioner prescribes.

5. Secure the cooperation and assistance of the United States, its agencies and agencies of this state, in the work of districts as local units of state government with special expertise concerning land, soil, water and natural resources management within the boundaries of the district, as the commissioner deems for the best interest of the state.

6. Disseminate information throughout the state concerning the activities and program of districts.

7. Provide staff support to the Arizona water protection fund commission established by title 45, chapter 12 and provide administrative assistance to natural resource conservation districts for compliance with the duties for districts pursuant to title 45, chapter 12.

8. Publicly recognize water conservation measures or water conservation projects in this state, including watershed improvement or protection programs.

9. Promote to the public this state's water-related advancements and their effect on watersheds, forest health, multiple uses and stormwater runoff protection programs.

B. The commissioner may remove a district supervisor from office if the commissioner determines, after reasonable notice and an impartial hearing, that the supervisor is guilty of misfeasance, malfeasance or nonfeasance in office. For the purposes of this subsection, "nonfeasance" includes the failure to attend three consecutive meetings of district supervisors without reasonable excuse. END_STATUTE

Sec. 6. Section 37-1014, Arizona Revised Statutes, is amended to read:

START_STATUTE37-1014. State financial assistance; application; criteria

A. The commissioner shall include in the annual state land department budget request a sum of not more than forty thousand dollars for each district and sixty thousand dollars for each education center for distribution by the commissioner to those natural resource conservation districts that have applied for, have met the criteria for and have been approved for receiving state financial assistance, as provided in this section.

B. Any district or education center desiring to receive state financial assistance for the next ensuing fiscal year shall apply to the commissioner not later than June 20, on a form supplied by the division of natural resource conservation. Each application shall include:

1. The number of acres of land lying within the district.

2. The extent of conservation programs or education center programs proposed to be undertaken during the fiscal year for which the financial assistance is being requested.

3. Any audits that are requested by the commissioner.

C. On receipt of the application, the commissioner shall determine whether or not such funds monies for the district or education center will be included in the budget request for the state land department and shall promptly notify the district or education center of that determination. END_STATUTE

Sec. 7. Section 37-1036, Arizona Revised Statutes, is amended to read:

START_STATUTE37-1036. Proceedings to organize district; certificate of organization

A. A district shall be organized and shall be a body corporate upon on taking the following steps:

1. The supervisors elected as provided in section 37‑1035 shall present to the secretary of state an application, signed and acknowledged by each supervisor, setting forth:

(a) That a petition for the creation of the district was approved by the commissioner pursuant to the provisions of this chapter.

(b) The name and official residence of each supervisor, and a certified copy of their notification of election.

(d) The location of the proposed office of the supervisors of the district.

2. The application shall be accompanied by a certificate of the commissioner which shall set setting forth:

(a) The boundaries of the district as determined by him the commissioner.

(b) That a petition was filed, notice was issued and a hearing was held as prescribed by law.

(c) That for a district to function in the proposed territory was determined by the commissioner to be in the public interest.

(d) That notice was given and a referendum on the question of the creation of the district and an election of supervisors were held.

(e) That the results of the referendum showed not less than sixty‑five per cent percent of the votes cast, representing not less than fifty per cent percent of the owners of land, to be in favor of the creation of the district.

(f) That the supervisors signing the application are the duly elected supervisors of the district.

3. The secretary of state shall examine the application and statement and, if he the secretary of state finds that the name proposed for the district is not identical with or so similar to that of any other district as to lead to confusion, he the secretary of state shall record them. If the name proposed is identical with or so similar to another district as to lead to confusion, he the secretary of state shall certify that fact to the commissioner, who shall submit another name. Upon On receipt of a new name, free from defects, the secretary of state shall record the application and statement.

B. The secretary of state shall issue to the supervisors a certificate, under the seal of the state, certifying the organization of the district, and shall record the certificate with the application and statement. The district shall include includes the territory as determined by the commissioner, but it shall does not include any area within the boundaries of another district, nor shall it and does not include any area, land or property of or lands held under certificate of purchase or lease from the this state by any person or persons, which if the area, land, property or leaseholds lie within the geographical limits of such a district but the owners or holders of certificates of purchase or lessees of which do not desire to come within join the district.

C. In any action or proceeding involving the validity or enforcement of, or relating to, any contract, proceeding or action of the district, the district shall be is deemed to have been be established in accordance with the provisions of this chapter upon on proof of the issuance of the certificate of organization by the secretary of state. A copy of the certificate certified by the secretary of state shall be is admissible in evidence in any action or proceeding, and shall be is proof of the filing and contents thereof. In like manner, any district combined, and consolidated with an adjacent district or districts, and reorganized and renamed prior to the date of this section shall be before June 20, 1968 is deemed to have been be established upon on proof of certifications and official maps filed with the secretary of state by the division of natural resource conservation of the state land department.

D. The commissioner shall appoint two supervisors from a panel of candidates compiled by the elected supervisors and presented by the temporary chairman of the elected supervisors. Candidates for the office of appointed supervisors shall be qualified electors of the state. Appointed supervisors shall continue to serve until May 31 of the next even‑numbered year or until their successors are otherwise appointed. END_STATUTE

Sec. 8. Section 37-1054, Arizona Revised Statutes, is amended to read:

START_STATUTE37-1054. Powers of district

A. This state recognizes the special expertise of the districts in the fields of land, soil, water and natural resources management within the boundaries of the district. A district is empowered to:

1. Conduct surveys, investigations and research relating to the character of the soil, soil erosion prevention within a farm or ranch, methods of cultivation, farm and range practices, seeding, eradication of noxious growths and any other measures that will aid farm and range operations, disseminate information pertaining thereto, and carry on research programs with or without the cooperation of this state or its agencies or the United States or its agencies.

2. Conduct demonstration projects within the district on lands owned or controlled by the state or any of its agencies with the consent and cooperation of the agency having jurisdiction of the land, and on any other lands within the district on obtaining the consent of the landowner or the necessary rights or interests in the land, in order to demonstrate by example the means, methods and measures by which water, soil and soil resources may be conserved and soil erosion and soil washing may be prevented and controlled.

3. Cooperate and enter into agreements with a landowner, an operator or any agency or subdivision of the state or federal government to carry on programs of watershed improvement, soil erosion prevention, methods of cultivation, cropping practices, land leveling and improvement on agricultural lands, and programs limited to methods of proper range use, reseeding and the eradication of noxious growth on grazing lands, all within the limits of an individual farm or ranch and subject to the conditions the supervisors deem necessary.

4. Acquire, by purchase, exchange, lease or otherwise, any property, real or personal, or rights or interest in any property, maintain, administer and improve any properties acquired, receive income from any property or right or interest in property and expend it in carrying out the purposes of this chapter, and sell, lease or otherwise dispose of any property or interest in property in furtherance of the purposes of this chapter.

5. Make available, on the terms it prescribes to landowners within the district, agricultural and engineering machinery and equipment, fertilizer, seed and other material or equipment as will assist the landowners to carry on operations on their lands for the purposes and programs authorized by this chapter.

6. Develop, publish and bring to the attention of landowners within the district comprehensive plans for the conservation of soil and water resources within the district that specify in such detail as may be feasible the acts, procedures, performances and avoidances necessary or desirable for the effectuation of the plans.

7. Apply for, receive and spend monies from the Arizona water protection fund pursuant to title 45, chapter 12 to be used in individual districts or in cooperation with other districts, persons, cities, towns, counties, special districts and Indian communities for projects consistent with title 45, chapter 12.

8. Employ agents, engineers, attorneys or other employees not readily available from existing state agencies.

9. Sue and be sued in the name of the district, have a seal, which shall be judicially noticed, have perpetual succession unless terminated as provided in this chapter, make and execute contracts and other instruments necessary or convenient to the exercise of its powers and make, amend and repeal rules not inconsistent with this chapter to carry into effect its purposes and powers.

10. Accept donations, gifts and contributions in money, services, materials or otherwise, and use or expend them in carrying on its operations.

11. Organize and establish an education center to increase the knowledge of natural resources in this state through the following methods:

(a) Offering technical guidance and training to agricultural producers.

(b) Publishing scholarly materials.

(d) Conducting or sponsoring scientific studies that affect natural resources in this state.

B. A provision of law with respect to the acquisition, operation or disposition of property by other public bodies shall not be applicable to a district organized under this chapter unless specifically stated therein.

C. After the formation of any district under this chapter, all participation thereunder shall be voluntary, notwithstanding any provision of this chapter to the contrary.

D. A district may send to the Arizona water protection fund commission established by title 45, chapter 12 written recommendations for geographic areas to be emphasized, issues of concern and measures to implement title 45, chapter 12. A district that sends written recommendations to the commission shall request information from at least the following:

1. The director of the department of water resources, the state forester and the state land commissioner.

2. The federal and state fish, wildlife, recreation and natural resource agencies.

3. County and municipal entities.

4. The public.

E. The district shall develop procedures to ensure adequate participation in the public involvement process prescribed by subsection D of this section. END_STATUTE

Sec. 9. Section 37-1302, Arizona Revised Statutes, is amended to read:

START_STATUTE37-1302. Powers and duties of state forester; rules; legislative presentation; acceptance of federal law

A. The state forester is designated as the agent of the this state of Arizona and shall administer this chapter. The state forester shall:

1. Exercise and perform all powers and duties vested in or imposed on the Arizona department of forestry and fire management.

2. Adopt rules necessary to discharge the powers and duties of the Arizona department of forestry and fire management, including rules that create efficiencies, protect the public health and safety and prescribe budgetary obligations.

3. Subject to title 41, chapter 4, article 4, appoint an assistant director to the office of the state fire marshal, a state fire training officer and a state fire resource coordinator, all of whom serve at the pleasure of the state forester.

4. Subject to title 41, chapter 4, article 4, employ, determine the terms and conditions of employment of and prescribe the duties and powers of administrative, professional, technical, secretarial, clerical and other persons as may be necessary in the performance of the Arizona department of forestry and fire management's duties. The compensation of department employees shall be as determined pursuant to section 38‑611.

5. Contract for the services of outside advisors, consultants and aides as may be reasonably necessary.

6. Perform all management and administrative functions assigned or delegated to this state by the United States relating to forestry and financial assistance and grants relating to forestry.

7. Identify sources of information relating to forest management, including wildfire prevention, mitigation, suppression and recovery and administrative and judicial appeals and litigation with respect to timber sales and forest thinning projects in this state, and develop procedures for compiling and distributing that information.

8. Take necessary action to maximize state fire assistance grants, including establishing timelines for using grant monies and reallocating lapsed grant monies to other projects.

9. Conduct education and outreach in forest communities by explaining the wildfire threat to private property caused by the lack of timber harvesting, forest thinning, land management and watershed protection and enhancement.

10. Monitor and conduct forestry projects and wildfire prevention, mitigation and suppression activities.

11. Assist in the development of the forestry products industry in this state.

12. Intervene on behalf of this state and its citizens in administrative and judicial appeals and litigation that challenge governmental efforts supported by the state forester if the state forester determines that intervention is in the best interests of this state.

13. Annually develop and implement a comprehensive statewide wildfire response plan for the deployment of state, county, municipal, fire district, volunteer fire association and private fire service provider contract resources to wildfire suppression activities. The statewide wildfire response plan shall take into account anticipated fire conditions and fire severity and may include prepositioning resources as necessary. The state forester shall consult with federal land management firefighting agencies, state and county emergency agencies, municipal fire departments, fire districts, statewide fire district and statewide fire chiefs associations, volunteer fire departments and private fire contractors in the development of the comprehensive statewide wildfire response plan, the implementation of standards for training and certification for all classes of wildland fire and hazard personnel and the implementation of standards for wildland fire apparatus and equipment that are deployed under cooperative agreements with the state forester.

14. Provide necessary oversight to ensure standardized training and certification for all classifications of firefighters to be deployed to any incident.

15. Develop recommendations for minimum standards for safeguarding life and property from wildland fires and fire hazards, preventing wildland fires and alleviating fire hazards.

16. Develop recommendations for minimum standards for the storage, sale, distribution and use of dangerous chemicals, combustibles, flammable liquids, explosives and radioactive materials in wildland‑urban interface areas.

17. Consult with the department of public safety, the department of emergency and military affairs and local governments regarding the establishment of fire evacuation routes and community alert systems.

18. Make recommendations for minimum standards for the creation of defensible spaces in and around wildland-urban interface areas as authorized by existing county and municipal laws and ordinances.

19. Serve as the state natural resource conservation commissioner pursuant to section 37-1012.

B. During the first regular session of each legislature, the state forester shall present information to the legislative committees with jurisdiction over forestry issues. The state forester shall collaborate with, and invite the participation of, relevant state, federal and local governmental officers and agencies. A written report is not required, but the presentation shall include information concerning:

1. Forestry management, including the current conditions of the forests in this state on federal, state and private property as affected by federal, state and local public policies, climatic conditions, wildfire hazards, pest infestations, overgrowth and overgrowth control policies and methods and the effects of current federal policy on forest management and impacts on forest land management.

2. The wildland‑urban interface, including the effects of county and municipal zoning policies and wildfire hazards on public and private property.

3. Wildfire emergency management and all hazard response issues, including:

(a) Intergovernmental and interagency primacy, cooperation, coordination, roles and training of federal, state and local forestry, firefighting and law enforcement agencies.

(b) Channels and methods of communicating emergency information to the public.

(d) The level of federal, state and local emergency funding.

C. The state forester may:

1. Furnish technical advice to the people of this state on forestry and land management matters.

2. Do all other acts necessary to take advantage of and carry out the provisions of the act of Congress described in subsection D of this section.

D. This state accepts the provisions of the cooperative forestry assistance act of 1978 (P.L. 95‑313; 92 Stat. 365; 16 United States Code chapter 41) providing for federal forestry assistance programs to states. END_STATUTE

Sec. 10. Section 45-101, Arizona Revised Statutes, is amended to read:

START_STATUTE45-101. Definitions

In this title, unless the context otherwise requires:

1. "Appropriator" means the person or persons initiating or perfecting the right to use appropriable water based on state law, or the person's successor or successors in interest.

2. "Department" means the department of water resources.

3. "Director" means the director of water resources, who is also the director of the department.

4. "Effluent" or, for the purposes of departmental informational materials only, "recycled water" means water that has been collected in a sanitary sewer for subsequent treatment in a facility that is regulated pursuant to title 49, chapter 2. Such water remains effluent until it acquires the characteristics of groundwater or surface water.

5. "Groundwater" means water under the surface of the earth regardless of the geologic structure in which it is standing or moving. Groundwater does not include water flowing in underground streams with ascertainable beds and banks.

6. "Interstate stream" means any stream constituting or flowing along the exterior boundaries of this state, and any tributary originating in another state or foreign country and flowing into or through this state.

7. "Riparian area" means a geographically delineated area with distinct resource values, that is characterized by deep-rooted plant species that depend on having roots in the water table or its capillary zone and that occurs within or adjacent to a natural perennial or intermittent stream channel or within or adjacent to a lake, pond or marsh bed maintained primarily by natural water sources. Riparian area does not include areas in or adjacent to ephemeral stream channels, artificially created stockponds, man-made storage reservoirs constructed primarily for conservation or regulatory storage, municipal and industrial ponds or man‑made water transportation, distribution, off-stream storage and collection systems.

8. "Sanitary sewer" means any pipe or other enclosed conduit that carries, among other substances, any water-carried wastes from the human body from residences, commercial buildings, industrial plants or institutions.

9. "Surface water" means the waters of all sources, flowing in streams, canyons, ravines or other natural channels, or in definite underground channels, whether perennial or intermittent, floodwater, wastewater or surplus water, and of lakes, ponds and springs on the surface. For the purposes of administering this title, surface water is deemed to include central Arizona project water. END_STATUTE

Sec. 11. Title 45, chapter 1, article 1, Arizona Revised Statutes, is amended by adding section 45-118, to read:

START_STATUTE45-118. Desalination action plan; report

A. THE DIRECTOR SHALL PREPARE A DESALINATION ACTION PLAN THAT INCLUDES ALL THE FOLLOWING:

1. AN IDENTIFICATION OF AREAS WITHIN THis STATE WHERE BRACKISH GROUNDWATER EXISTS IN SIGNIFICANT AMOUNTS.

2. AN ESTIMATE OF THE COST TO TREAT AND DELIVER THE BRACKISH GROUNDWATER FOR AN ECONOMICALLY VIABLE USE.

3. AN IDENTIFICATION OF AREAS of this state THAT WOULD BENEFIT FROM THE USE OF THE TREATED BRACKISH GROUNDWATER.

4. aN IDENTIFICATION OF POTENTIAL FUNDING SOURCES FOR THE TREATMENT AND DELIVERY OF THE BRACKISH GROUNDWATER.

5. AN EVALUATION OF THE FEASIBILITY AND COST OF DISPOSal of THE BRINE PRODUCT that results from TREATing BRACKISH GROUNDWATER.

6. An evaluation and analysis of issues related to the sources of the brackish groundwater identified in the desalination action plan, including any potential impacts that might occur to the water supplies of water users in the area of the brackish groundwater if the groundwater is withdrawn and treated for use.

B. A DESALINATION ACTION PLAN MAY ALSO IDENTIFY AND EVALUATE POTENTIAL BINATIONAL AGREEMENTS or projects RELATED TO the TREATMENT OF BRACKISH GROUNDWATER or sea water USING THE CRITERIA prescribed in SUBSECTION A OF THIS SECTION.

C. If the director determines there is significant brackish water underground in a county adjacent to the Colorado river, the director shall include in the desalination action plan an analysis and evaluation of the source of the underground water, whether the water is being used and, if the water is being used, the purposes for which it is being used. If the director concludes that the likely source of the water is Colorado river water, the director shall not address that water in the desalination action plan. Any conclusion made by the director as to the source of the water is not binding for any purpose and does not create a presumption of the legal character of the water in any administrative or judicial proceeding.

D. THE DIRECTOR SHALL SUBMIT THE INITIAL DESALINATION ACTION PLAN ON OR BEFORE SEPTEMBER 30, 2019 TO THE GOVERNOR, THE PRESIDENT OF THE SENATE, THE SPEAKER OF THE HOUSE OF REPRESENTATIVES, THE MEMBERS OF THE SENATE NATURAL RESOURCES, ENERGY AND WATER COMMITTEE, OR ITS SUCCESSOR COMMITTEE, AND THE MEMBERS OF THE HOUSE OF REPRESENTATIVES ENERGY, ENVIRONMENT AND NATURAL RESOURCES COMMITTEE, OR ITS SUCCESSOR COMMITTEE, and shall provide a copy of the report to the secretary of state. The director shall submit subsequent REPORTS on the desalination action plan and its results by December 31 every two years there‑after. END_STATUTE

Sec. 12. Section 45-292, Arizona Revised Statutes, is amended to read:

START_STATUTE45-292. Approval required to transport water out of state; application; fee; criteria; hearing

A. A person may withdraw, or divert, and transport water from this state for a reasonable and beneficial use in another state if approved by the director pursuant to this article and on approval of the legislature as prescribed by this section. A person shall not transport water from this state whether surface water, groundwater or other water unless approved by the director and the legislature, but this article does not apply to or prohibit transporting water from this state as required by interstate compact, federal law or international treaty.

B. An application to transport water from this state for use in another state shall be filed with the director, including a fee established by the director by rule. In establishing a fee by rule, the director may consider factors including the amount of time likely to be expended in processing the application, the amount of preexisting hydrological information available, if any, and the complexity of the application. The application shall include:

1. The name and address of the applicant's statutory agent in this state for service of process and other legal notices.

2. The legal basis for acquiring the water to be transported.

3. The purpose for which the water will be used.

4. The annual amount of water in acre-feet for which the application is made.

5. The proposed duration of the permit, not to exceed fifty years with an option to renew.

6. Studies satisfactory to the director of the probable hydrologic impact on the area from which the water is proposed to be transported.

7. Any other information which that the director may require.

C. The director shall approve or reject the application. If the director approves the application, the director may prescribe terms and conditions for the approval. In determining whether to approve the application the director shall consider:

1. Whether the proposed action would be consistent with conservation of water, including any applicable management goals and plans.

2. Potential harm to the public welfare of the citizens of this state.

3. The supply of water to this state and current and future water demands in this state in general and the proposed source area in particular.

4. The feasibility of intrastate transportation of the water that is the subject of the application to alleviate water shortages in this state.

5. The availability of alternative sources of water in the other state.

6. The demands placed on the applicant's supply in the other state.

7. Whether the proposed action is prohibited or affected by other law, including sections 45-165 and 45-172 and chapter 2 of this title.

D. If the director approves the application, the director shall notify the legislature of the director's approval. The legislature shall consider the proposed action and may approve the proposed action by legislative enactment, approved by the governor. If the legislature fails to pass a legislative enactment or the legislative enactment is not approved by the governor, the application is denied and shall not proceed.

D. E. This article does not authorize and the director shall not approve transporting from this state water allocated to this state by federal law or interstate compact.

E. F. An administrative hearing shall be held on the application, and the director shall give notice of the hearing by publication once a week for three consecutive weeks in a newspaper of general circulation in the county or counties from which the applicant proposes to transport the water. The hearing shall be conducted in the area from which water is proposed to be transported. Any interested person, including the department, may appear and give oral or written testimony on all issues involved.

F. G. Section 45‑114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

G. H. The director shall deposit, pursuant to sections 35‑146 and 35‑147, all fees received under this section in the water resources fund established by section 45‑117.END_STATUTE

Sec. 13. Section 45-462, Arizona Revised Statutes, is amended to read:

START_STATUTE45-462. Grandfathered groundwater rights; persons included; certificate of exemption amount is legal use; extinguishment

A. In an active management area, a person who was legally withdrawing and using groundwater as of the date of the designation of the active management area or who owns land legally entitled to be irrigated with groundwater as determined pursuant to this article has the right to withdraw or receive and use groundwater as determined by the director pursuant to this article.

B. For purposes of determining grandfathered rights pursuant to this article, a groundwater use shall not be determined to be illegal merely because the groundwater legally withdrawn is or has been transported.

C. The amount of groundwater use described by an applicaton application for a certificate of exemption is recognized as a legal use for purposes of determining grandfathered rights pursuant to section 45‑464, subject to any modification as a result of a finding on appeal of a factual mistake by the state land department or Arizona water commission in computing the amount of the authorized withdrawal.

D. The right to withdraw or receive and use groundwater pursuant to this article is a grandfathered right. There are three categories of grandfathered rights as follows:

1. Non-irrigation grandfathered rights associated with retired irrigated land as determined pursuant to sections 45‑463, 45‑469 and 45‑472.

2. Non-irrigation grandfathered rights not associated with retired irrigated land as determined pursuant to section 45‑464.

3. Irrigation grandfathered rights as determined pursuant to section 45‑465.

E. Notwithstanding any other statute or rule, in the pinal active management area until December 31, 2021:

1. THE DIRECTOR SHALL CALCULATE THE INITIAL VOLUME OF EXTINGUISHMENT CREDITS FOR THE EXTINGUISHMENT OF A GRANDFATHERED RIGHT AS FOLLOWS:

(a) FOR THE EXTINGUISHMENT OF A TYPE 2 NON-IRRIGATION GRANDFATHERED RIGHT, MULTIPLY THE NUMBER OF ACRE-FEET INDICATED ON THE CERTIFICATE OF GRANDFATHERED RIGHT BY one hundred.

(b) FOR THE EXTINGUISHMENT OF ALL OR PART OF AN IRRIGATION GRANDFATHERED RIGHT, OR ALL OR PART OF A TYPE 1 NON-IRRIGATION GRANDFATHERED RIGHT, MULTIPLY 1.5 ACRE-FEET BY THE NUMBER OF IRRIGATION ACRES ASSOCIATED WITH THE EXTINGUISHED IRRIGATION GRANDFATHERED RIGHT OR THE NUMBER OF ACRES TO WHICH THE EXTINGUISHED TYPE 1 NON-IRRIGATION GRANDFATHERED RIGHT IS APPURTENANT, AND THEN MULTIPLY THAT PRODUCT BY one hundred, EXCEPT THAT:

(i) IF ONLY A PORTION OF AN IRRIGATION GRANDFATHERED RIGHT OR A TYPE 1 NON-IRRIGATION GRANDFATHERED RIGHT IS EXTINGUISHED, ONLY THOSE ACRES ASSOCIATED WITH THE PORTION OF THE RIGHT THAT IS EXTINGUISHED SHALL BE INCLUDED IN THE CALCULATION.

(ii) IF AN EXTINGUISHED IRRIGATION GRANDFATHERED RIGHT HAS A DEBIT BALANCE IN THE CORRESPONDING FLEXIBILITY ACCOUNT ESTABLISHED pursuant to section 45-467, THE DIRECTOR SHALL SUBTRACT THE AMOUNT OF THE DEBIT FROM THE AMOUNT OF THE EXTINGUISHMENT CREDITS.

2. FOR GRANDFATHERED RIGHTS EXTINGUISHED from and AFTER August 31, 2018, IF THE AMOUNT OF THE EXTINGUISHMENT CREDITS REMAINING UNUSED ON THE SIXTH, ELEVENTH, SIXTEENTH OR TWENTY-FIRST ANNIVERSARY OF THE DATE OF EXTINGUISHMENT IS GREATER THAN AN AMOUNT CALCULATED BY MULTIPLYING THE INITIAL VOLUME OF EXTINGUISHMENT CREDITS BY THE APPLICABLE PERCENTAGE ESTABLISHED IN THIS subseCTION, THE AMOUNT OF UNUSED CREDITS SHALL BE REDUCED TO AN AMOUNT CALCULATED BY MULTIPLYING THE INITIAL VOLUME OF EXTINGUISHMENT CREDITS BY THE APPLICABLE PERCENTAGE.

3. FOR THE PURPOSES OF DETERMINING THE REDUCTION IN THE AMOUNT OF UNUSED CREDITS AS PROVIDED IN paragraph 2 of this sUBSECTION, THE APPLICABLE PERCENTAGES are AS FOLLOWS:

(a) FOR CREDITS REMAINING ON THE SIXTH ANNIVERSARY OF THE DATE OF EXTINGUISHMENT, SEVENTY-five PERCENT.

(b) FOR CREDITS REMAINING ON THE ELEVENTH ANNIVERSARY OF THE DATE OF EXTINGUISHMENT, fifty PERCENT.

(d) FOR CREDITS REMAINING ON THE TWENTY-FIRST ANNIVERSARY OF THE DATE OF EXTINGUISHMENT, zero PERCENT.

4. FOR the PURPOSES OF paragraph 2 of this SUBSECTION, THE AMOUNT OF EXTINGUISHMENT CREDITS REMAINING UNUSED ON THE ANNIVERSARY OF THE DATE OF EXTINGUISHMENT OF A GRANDFATHERED RIGHT SHALL BE THE INITIAL VOLUME OF EXTINGUISHMENT CREDITS ISSUED FOR THE EXTINGUISHMENT OF THE RIGHT, reduced by both of the following:

(a) THE AMOUNT OF ANY OF THE EXTINGUISHMENT CREDITS PREVIOUSLY PLEDGED TO A CERTIFICATE OF ASSURED WATER SUPPLY OR DESIGNATION OF ASSURED WATER SUPPLY PURSUANT TO rules adopted by the director AND REPORTED TO THE DEPARTMENT AS HAVING BEEN USED.

(b) The amount of any previous reductions made to the extinguishment credits pursuant to paragraph 2 of this subsection.

5. The groundwater allowance for a certificate of assured water supply is as follows:

(a) For an application for a certificate filed before September 1, 2018, multiply the annual estimated water demand for the proposed subdivision by ten.

(b) For an application for a certificate filed on or after September 1, 2018, multiply the annual estimated water demand for the proposed subdivision by zero.

6. Not later than January 1, 2019, the director of water resources shall adopt rules to calculate extinguishment credits in the pinal active management area consistent with this section. For this purpose, the director is exempt from the rulemaking requirements of title 41, chapter 6, except that the director shall file a notice of exempt rulemaking with the secretary of state who shall publish the rules in the Arizona administrative register and the Arizona administrative code. The rules shall have an immediate effective date.

F. Notwithstanding any other statute or rule, in the pinal active management area the director shall recalculate the amount of groundwater AVAILABLE for use in the active management area for purposes of determining an assured water supply. END_STATUTE

Sec. 14. Title 45, chapter 2, article 5, Arizona Revised Statutes, is amended by adding section 45-465.04, to read:

START_STATUTE45-465.04. Use of groundwater to water plants in containers as non-irrigation use; right to use groundwater withdrawn pursuant to irrigation grandfathered right to water plants in containers; definition

A. The use of groundwater to water plants in containers on or above the surface of the ground is a non-irrigation use in an active management area.

B. Notwithstanding subsection A of this section, in an initial active management area, a person who holds a certificate of irrigation grandfathered right may withdraw groundwater pursuant to the right and use the groundwater to water plants in containers on or above the surface of the certificated acres if the plants are grown for sale or human consumption or for use as feed for livestock, range livestock or poultry, as those terms are defined in section 3-1201.

C. A person who holds a certificate of irrigation grandfathered right shall separately measure with a measuring device approved by the director pursuant to section 45-604 any groundwater used for watering plants in containers on or above the surface of the certificated acres and any groundwater used for an irrigation use on the certificated acres.

D. Except as provided in section 45-563.02, if a person uses groundwater to water plants in containers pursuant to subsection B of this section, the total amount of water used by the person for that purpose and for any irrigation uses on the certificated acres may not exceed the amount allowed by the irrigation water duty for the farm.

E. The director may not register credits to the flexibility account established pursuant to section 45-467 for a farm in any year in which the person who holds the certificate of irrigation grandfathered right for the farm uses groundwater to water plants in containers on or above the surface of the certificated acres pursuant to subsection B of this section.

F. On request by the owner of a certificate of irrigation grandfathered right, the director shall separate the certificate into two certificates, with one certificate for those certificated acres on which plants in containers are watered with groundwater pursuant to subsection B of this section and one certificate for those certificated acres on which groundwater is used for an irrigation use. If the director separates a certificate of irrigation grandfathered right into two certificates pursuant to this subsection, the certificated acres associated with each certificate shall be considered a separate farm for purposes of subsection E of this section. The director may not separate a certificate of irrigation grandfathered right into two certificates pursuant to this subsection if it would result in the issuance of a certificate of irrigation grandfathered right with less than two certificated acres.

G. For the purposes of this section, "certificated acres" means the acres described on the certificate of irrigation grandfathered right.END_STATUTE

Sec. 15. Section 45-561, Arizona Revised Statutes, is amended to read:

START_STATUTE45-561. Definitions

In this article, unless the context otherwise requires:

1. "Aquifer" means a geologic formation that contains sufficient saturated materials to be capable of storing water and transmitting water in usable quantities to a well.

2. "Augmentation" means to supplement the water supply of an active management area and may include the importation of water into the active management area, storage of water or storage of water pursuant to chapter 3.1 of this title.

3. "Incidental recharge" means the percolation of water to an aquifer after the water has been withdrawn, diverted or received for delivery by a municipal provider for use within its service area, except water that is added to an aquifer pursuant to chapter 3.1 of this title.

4. "Incidental recharge factor" means the ratio of the amount of incidental recharge attributable to a municipal provider during a calendar year to the amount of water withdrawn, diverted or received for delivery by the municipal provider for use within its service area during the year. The amount of incidental recharge attributable to a municipal provider during a calendar year is the amount of water that is incidentally recharged during the year after it is withdrawn, diverted or received for delivery by the municipal provider for use within its service area.

5. "Industrial use" means a non-irrigation use of water not supplied by a city, town or private water company, including animal industry use and expanded animal industry use.

6. "Intermediate water duty" means an irrigation water duty, as defined in section 45‑402, which that is established by the director during a management period to apply for a specific number of years during the management period.

7. "Large untreated water provider" means a municipal provider that as of January 1, 1990 was serving untreated water to at least five hundred persons or supplying at least one hundred acre-feet of untreated water during a calendar year.

8. "Management period" means a period of years prescribed by sections 45‑564, through 45-565, 45-565.01, 45-566, 45-566.01, 45-566.02, 45-567, 45-567.01, 45-567.02, 45‑568 and 45-568.03 during which a prescribed management plan applies.

9. "Mined groundwater" means the amount of groundwater withdrawn or received by a municipal provider from within an active management area during a calendar year for use in its service area, minus both of the following, as applicable:

(a) An amount of water computed by multiplying the amount of water supplied by the municipal provider for use within its service area during the calendar year by the incidental recharge factor established for the municipal provider pursuant to this article.

(b) If the municipal provider is a city or town in the Tucson active management area, the amount of groundwater withdrawn by the municipal provider during the calendar year from land owned or leased by the municipal provider to which a type 1 non-irrigation grandfathered right under section 45‑463, subsection A is appurtenant, up to the following amount:

(i) If the municipal provider has made a request to the director as described in section 45‑463, subsection F, the amount of groundwater computed by the director under section 45‑463, subsection F, in determining whether to designate or redesignate the municipal provider as having an assured water supply, minus the amount of any groundwater withdrawn by the municipal provider from the land during the period beginning with January 1 of the year in which the request was made and ending on December 31 of the year immediately preceding the calendar year for which the calculation of mined groundwater is being made.

(ii) If the municipal provider has not made a request to the director as described in section 45‑463, subsection F, the amount of groundwater that the director would have been required to include in determining whether to designate or redesignate the municipal provider as having an assured water supply, as computed under section 45‑463, subsection F, if the municipal provider had made a request to the director as described in that subsection on January 1 of the calendar year for which the calculation of mined groundwater is being made.

10. "Municipal provider" means a city, town, private water company or irrigation district that supplies water for non-irrigation use.

11. "Municipal use" means all non-irrigation uses of water supplied by a city, town, private water company or irrigation district, except for uses of water, other than Colorado river water, released for beneficial use from storage, diversion or distribution facilities to avoid spilling that would otherwise occur due to uncontrolled surface water inflows that exceed facility capacity.

12. "Safe-yield" means a groundwater management goal which that attempts to achieve and thereafter maintain a long-term balance between the annual amount of groundwater withdrawn in an active management area and the annual amount of natural and artificial recharge in the active management area.

13. "Small municipal provider" means a municipal provider that supplies two hundred fifty acre-feet or less of water for non-irrigation use during a calendar year. For the purposes of this paragraph, the amount of untreated water that is supplied by a large untreated water provider during a year shall not be counted in determining whether the municipal provider supplied two hundred fifty acre-feet or less of water for non‑irrigation use.

14. "Untreated water" means water that is not treated to improve its quality and that is supplied by a municipal provider through a distribution system other than a potable water distribution system.END_STATUTE

Sec. 16. Section 45-563, Arizona Revised Statutes, is amended to read:

START_STATUTE45-563. Management plans in active management areas; management periods; general provisions

A. The director shall develop a management plan for each initial active management area for each of five six management periods pursuant to the guidelines prescribed in sections 45‑564, through 45-565, 45-565.01, 45-566, 45-566.01, 45-566.02, 45-567, 45-567.01, 45-567.02, 45‑568, 45‑568.01, 45-568.02, 45‑468.03, 45-568.04 and 45-568.05 and shall adopt the plans only after public hearings held pursuant to sections 45‑570 and 45‑571. The plans shall include a continuing mandatory conservation program for all persons withdrawing, distributing or receiving groundwater designed to achieve reductions in withdrawals of groundwater.

B. The director shall develop a management plan for the Santa Cruz active management area for the third, fourth, and fifth and sixth management periods pursuant to the guidelines prescribed in sections 45‑566, 45‑566.01, 45‑567, 45‑567.01, 45‑568, and 45‑568.01, 45-568.03, 45-568.04 and 45-568.05 and shall adopt the plans only after public hearings held pursuant to sections 45‑570 and 45‑571. The plans shall include a continuing mandatory conservation program designed to achieve the management goal of the active management area for all persons withdrawing water, other than stored water, from a well and all persons distributing or receiving water, other than stored water, from a well. The plans shall also include criteria for the location of new wells and replacement wells in new locations consistent with the management goal of the active management area. END_STATUTE

Sec. 17. Section 45-563.02, Arizona Revised Statutes, is amended to read:

START_STATUTE45-563.02. Exemption from irrigation water duties; small irrigation grandfathered rights; criteria; conservation requirement; exception

A. A person who is entitled to use groundwater pursuant to an irrigation grandfathered right is exempt from any irrigation water duties or intermediate water duties established for the farm to which the right is appurtenant under sections 45‑564, 45‑565, 45‑566, 45‑567, and 45‑568 and 45-568.03 if both of the following apply:

1. There are ten or fewer irrigation acres in the farm.

2. The farm is not part of an integrated farming operation.

B. The director shall not establish irrigation water duties or intermediate water duties under section 45‑566, 45‑567, or 45‑568 or 45‑568.03 for a farm to which both of the following apply:

1. There are ten or fewer irrigation acres in the farm.

2. The farm is not part of an integrated farming operation.

C. Except as provided in subsection D of this section, a person who is exempt from the irrigation water duties established for a farm pursuant to subsection A of this section or who owns or uses groundwater on a farm for which irrigation water duties are prohibited in subsection B of this section shall not allow any groundwater to flow off the surface of the farm's irrigation acres unless the groundwater is used for a reasonable and beneficial use approved in writing by the director.

D. A person who is required under subsection C of this section to prevent groundwater from flowing off the surface of a farm's irrigation acres may apply to the director for an exemption from the requirement. The director may grant the exemption if the person demonstrates to the satisfaction of the director that one of the following applies:

1. Preventing groundwater from flowing off the surface of the farm's irrigation acres would not be economically feasible.

2. Any groundwater that will flow off the surface of the farm's irrigation acres will be used by a person with an exempt well in lieu of groundwater that otherwise would have been withdrawn from that well.END_STATUTE

Sec. 18. Section 45-568, Arizona Revised Statutes, is amended to read:

START_STATUTE45-568. Management plan for fifth management period; guidelines

A. For the fifth management period, 2020 to 2025, the director shall promulgate adopt a management plan for each initial active management area not later than January 1, 2019 pursuant to the guidelines prescribed in section 45‑567, subsections A and B, except that:

1. The director shall establish the historic annual net natural recharge for any groundwater replenishment district in the active management area, computed by determining the net natural recharge, as defined by section 48‑4401, for the groundwater basin beneath the district during calendar years 1988 through 2017 and dividing the result by thirty.

2. The director may adjust the highest twenty‑five per cent percent of the irrigation water duties established within an area of similar farming conditions pursuant to section 45‑567 by reducing each water duty in an amount up to five per cent percent, except that in making the adjustment, no water duty may be reduced to an amount less than the greater of the following:

(a) The highest water duty within the lowest seventy‑five per cent percent of the water duties computed within the area of similar farming conditions for the fifth management period.

(b) A water duty computed for the farm unit under this paragraph using an irrigation efficiency of eighty per cent percent.

3. A person who is entitled to use groundwater pursuant to an irrigation grandfathered right may apply to the director at any time during the management period for an exemption from the irrigation water duties established pursuant to this section. The director shall grant the exemption if the person demonstrates to the director's satisfaction that granting the exemption is consistent with achieving the management goal of the active management area and that one of the following applies:

(a) Withdrawal of groundwater pursuant to the irrigation grandfathered right during the management period will intercept groundwater that would otherwise flow out of and be lost to the active management area in the next fifteen years without entering another active management area.

(b) Withdrawal of groundwater pursuant to the irrigation grandfathered right during the management period will prevent encroachment of a rising depth to groundwater level that will cause waterlogging problems within the next fifteen years.

B. Within thirty days after the management plan for the fifth management period is adopted, the director shall give written notice in the manner and to the persons prescribed in section 45‑565, subsection B and shall give written notice of the non-per capita conservation program established pursuant to section 45-568.01 to all municipal providers. Two years before the compliance date specified in the management plan for any irrigation water duty, intermediate water duty, conservation requirement or intermediate conservation requirement, the director shall give additional written notice by first class mail to the last known addresses of the persons prescribed in section 45‑565, subsection B and this subsection.

C. Except for a person who obtains a variance under section 45-574 or who is exempt from irrigation water duties under section 45‑563.02, subsection A, all persons notified pursuant to subsection B of this section shall comply with the applicable irrigation water duty or conservation requirements for the fifth management period not later than January 1, 2025 and shall remain in compliance until the legislature determines otherwise the applicable compliance date established in the management plan for the SIXTH management period. If intermediate water duties or intermediate conservation requirements have been established, a person to whom those water duties or conservation requirements apply shall comply with the intermediate water duties or intermediate conservation requirements not later than the compliance date specified in the management plan, unless the person obtains a variance pursuant to section 45‑574 or is exempt from intermediate water duties under section 45‑563.02, subsection A. A person who obtains a variance under section 45‑574 shall comply with the applicable irrigation water duty or conservation requirements by the date specified in the variance and shall remain in compliance until the subsequent compliance date for any applicable irrigation water duty or conservation requirements established in the management plan for the FIFTH management period. END_STATUTE

Sec. 19. Title 45, chapter 2, article 9, Arizona Revised Statutes, is amended by adding sections 45-568.03, 45-568.04 and 45-568.05, to read:

START_STATUTE45-568.03. Management plan for sixth management period; guidelines

A. For the sixth management period, 2025 to 2035, the director shall adopt a management plan for each initial active management area not later than january 1, 2023 pursuant to the guidelines prescribed in section 45-567, subsections a and b and sections 45-568.04 and 45-568.05, except that:

1. The director shall establish the historic annual net natural recharge for any groundwater replenishment district in the active management area, computed by determining the net natural recharge, as defined by section 48-4401, for the groundwater basin beneath the district during the most recent thirty-year period of record and dividing the result by thirty.

2. The director may adjust the highest twenty-five percent of the irrigation water duties established within an area of similar farming conditions pursuant to section 45-567 by reducing each water duty in an amount up to five percent, except that in making the adjustment, no water duty may be reduced to an amount less than the greater of the following:

(a) the highest water duty within the lowest seventy-five percent of the water duties computed within the area of similar farming conditions for the sixth management period.

(b) a water duty computed for the farm unit under this paragraph using an irrigation efficiency of eighty percent.

(a) withdrawal of groundwater pursuant to the irrigation grandfathered right during the management period will intercept groundwater that would otherwise flow out of and be lost to the active management area in the next fifteen years without entering another active management area.

(b) withdrawal of groundwater pursuant to the irrigation grandfathered right during the management period will prevent encroachment of a rising depth to groundwater level that will cause waterlogging problems within the next fifteen years.

B. Within thirty days after the management plan for the sixth management period is adopted, the director shall give written notice in the manner and to the persons prescribed in section 45-565, subsection b and shall give written notice of the non-per capita conservation program established pursuant to section 45-568.04 to all municipal providers. Two years before the compliance date specified in the management plan for any irrigation water duty, intermediate water duty, conservation requirement or intermediate conservation requirement, the director shall give additional written notice by first class mail to the last known addresses of the persons prescribed in section 45-565, subsection B and this subsection.

C. Except for a person who obtains a variance under section 45-574 or who is exempt from irrigation water duties under section 45-563.02, subsection a, all persons notified pursuant to subsection b of this section shall comply with the applicable irrigation water duty or conservation requirements for the sixth management period not later than january 1, 2035 and shall remain in compliance until the legislature otherwise requires. If intermediate water duties or intermediate conservation requirements have been established, a person to whom those water duties or conservation requirements apply shall comply with the intermediate water duties or intermediate conservation requirements not later than the compliance date specified in the management plan, unless the person obtains a variance pursuant to section 45-574 or is exempt from intermediate water duties under section 45-563.02, subsection a. A person who obtains a variance under section 45-574 shall comply with the applicable irrigation water duty or conservation requirements by the date specified in the variance and shall remain in compliance until the subsequent compliance date for any applicable irrigation water duty or conservation requirements established in the management plan for the sixth management period or until the legislature otherwise provides. END_STATUTE

START_STATUTE45-568.04. Non-per capita conservation program for municipal providers; sixth management period

A. In addition to the provisions of the management plan for the sixth management period prescribed by section 45-568.03, the director shall include in the management plans a non-per capita conservation program for municipal providers. The program shall require a municipal provider regulated under the program to implement one or more water conservation measures in its service area from the list adopted by the director pursuant to subsection b of this section, subject to approval by the director pursuant to subsection f or g of this section. The program may prescribe the number of conservation measures that a provider must implement under this subsection based on the number of service connections in the provider's service area.

B. The director shall include in the non-per capita conservation program a list and description of conservation measures that municipal providers regulated under the program must select from to comply with the requirements adopted pursuant to subsection a of this section, which may include the conservation measures described in section 45-567.01, subsection a, paragraphs 1 and 2.

C. In addition to the requirements prescribed in subsection a of this section, a municipal provider regulated under the non-per capita conservation program shall:

1. Include in its annual report filed pursuant to section 45-632 a copy of the provider's current water rate structure unless no changes have been made to the rate structure since it was last submitted to the director. A municipal provider regulated under the non-per capita conservation program is encouraged to adopt a water rate structure that promotes efficient use of water, subject to approval by the corporation commission if the provider is a public service corporation.

2. For at least five years after a year in which the municipal provider is regulated under the non-per capita conservation program, keep and maintain accurate records verifying that the municipal provider implemented the conservation measures required by the non-per capita conservation program during that year.

D. The director shall design the non-per capita conservation program to achieve water use efficiency in the service areas of municipal providers regulated under the program equivalent to the water use efficiency assumed by the director in establishing the per capita conservation requirements for the management plan pursuant to section 45‑568.03.

E. Except as provided in subsections i, j and k of this section, on or before the date specified in the management plan, a municipal provider notified of the non-per capita conservation program pursuant to section 45-568.03, subsection b, shall submit to the director, on a form prescribed by the director, a provider profile that contains the following information:

1. A description of the municipal provider's existing service area characteristics and water use patterns.

2. A description of the conservation measures the municipal provider is currently implementing and any additional conservation measures that the provider intends to implement to comply with the non-per capita conservation program.

3. An explanation of how each conservation measure described in the provider profile is relevant to the municipal provider's existing service area characteristics or water use patterns.

F. Within ninety days after receiving a municipal provider's provider profile under subsection e of this section, the director shall approve or disapprove the provider profile and send written notice of the decision to the municipal provider. The director shall approve the provider profile if the director determines that the profile contains information demonstrating that the municipal provider will implement at least the minimum number of conservation measures required by the non-per capita conservation program and that the conservation measures are reasonably relevant to the municipal provider's existing service area characteristics or water use patterns. If the director disapproves the provider profile, the director shall include with the written notice of the decision the reasons for the disapproval. A decision of the director disapproving a provider profile is an appealable agency action pursuant to title 41, chapter 6, article 10. If the director fails to send the municipal provider written notice approving or disapproving the provider profile within ninety days after receiving the provider profile, the provider profile shall be deemed approved.

G. If the director disapproves a municipal provider's provider profile pursuant to subsection f of this section, within ninety days after the date of the director's written notice disapproving the provider profile, or within ninety days after the director's decision is final if the municipal provider files a timely notice of appeal of the decision pursuant to title 41, chapter 6, article 10, the municipal provider shall revise the provider profile to correct the deficiencies identified by the director in the written notice and submit the revised provider profile to the director. Within ninety days after receiving a municipal provider's revised provider profile pursuant to this subsection, the director shall approve or disapprove the revised provider profile pursuant to subsection f of this section. If the director disapproves the revised provider profile:

1. The decision is an appealable agency action pursuant to title 41, chapter 6, article 10.

2. The municipal provider is in violation of this section beginning on the date the director's decision is final until the municipal provider submits a provider profile that is approved by the director, except that the provider may not be in violation before the compliance date for the non-per capita conservation program specified in the management plan.

H. Except as provided in subsections i, j and k of this section, a municipal provider notified of the non-per capita conservation program pursuant to section 45-568.03, subsection b or section 45-571.01, subsection b shall be regulated under the program beginning on the date the director approves the municipal provider's provider profile pursuant to subsection f or g of this section, but not earlier than the compliance date specified in the management plan. A municipal provider regulated under the non-per capita conservation program shall comply with the program beginning on the date the provider is first regulated under the program.

I. A municipal provider designated as having an assured water supply pursuant to section 45-576 may not be regulated under the non-per capita conservation program, but instead shall be regulated under the per capita conservation program established by the director in the applicable management plan, unless both of the following apply:

1. The municipal provider notifies the director in writing that it elects to be regulated under the non-per capita conservation program and includes with the notice a provider profile that contains the information prescribed by subsection e of this section.

2. The director approves the municipal provider's provider profile pursuant to subsection f of this section or a revised provider profile pursuant to subsection g of this section. The municipal provider shall be regulated under the non-per capita conservation program beginning on the date the director approves the provider profile or a revised provider profile.

J. A large untreated water provider may not be regulated under the non-per capita conservation program with respect to its deliveries of untreated water. A large untreated water provider shall comply with any conservation or rate of use requirements established for deliveries of untreated water by large untreated water providers in the applicable management plan with respect to its deliveries of untreated water.

K. A small municipal provider may not be regulated under the non‑per capita conservation program, but instead shall comply with any conservation requirements established for small municipal providers in the applicable plan.

L. A municipal provider that is regulated under the non-per capita conservation program established in a management plan under this section shall comply with any individual user requirements prescribed in the management plan, except as provided in section 45-571.02.

M. A municipal provider that is regulated under the non-per capita conservation program established in a management plan under this section is exempt from the per capita conservation requirements prescribed in the management plan.END_STATUTE

START_STATUTE45-568.05. Alternative conservation programs for agriculture; sixth management period

A. In addition to the provisions of the management plan for the sixth management period prescribed by section 45-568.03, the director shall include in the management plan the historic cropping program prescribed by this section as an alternative agricultural conservation program that achieves conservation equivalent to the agricultural conservation program included in the management plan pursuant to section 45-568.03.

B. The director shall establish the components of the historic cropping program in the management plan for the sixth management periods to assure that conservation equivalent to that required by the agricultural conservation program established in the management plan pursuant to section 45-568.03 will be achieved. In addition to the program components established by the director, the historic cropping program shall include the following provisions:

1. The director shall calculate the maximum annual groundwater allotment as provided in section 45-465.

2. The director shall calculate the irrigation water duty in the same manner as that required by section 45-568.03, subsection A, using an irrigation efficiency of seventy-five percent. In areas deemed by the director to have limiting soils, the director may use an irrigation efficiency of seventy percent for the water duty calculation.

3. The flexibility account provisions of section 45-467 apply except as otherwise provided in this section.

4. The director may not register credits to the flexibility account established under section 45-467 that cause the credit balance to exceed seventy-five percent of the maximum annual groundwater allotment established pursuant to this subsection.

5. Only owners of an irrigation grandfathered right may apply for participation in the historic cropping program.

C. In the management plans, the director shall establish criteria that the applicant shall satisfy to enter the historic cropping program to assure that conservation equivalent to that required by the agricultural conservation program established in the management plan pursuant to section 45-568.03 will be achieved. An owner of an irrigation grandfathered right may apply to participate in the historic cropping program by filing an application with the director. The director may not approve an application for the historic cropping program unless the applicant satisfies the entrance criteria established by the director and the following conditions are satisfied:

1. The applicant's accumulation of credits in the applicant's flexibility account under section 45-467 is equal to or less than seventy‑five percent of the farm's maximum annual groundwater allotment established pursuant to the applicable management plan under section 45‑568.03, subsection A, section 45-568.04, subsection A or section 45‑568.05, subsection A. To satisfy this requirement, the applicant may either sell or convey any excess credits as provided by section 45-467, or the applicant may relinquish any excess credits.

2. The applicant's accumulation of debits in the applicant's flexibility account under section 45-467 is equal to or less than twenty‑five percent of the farm's maximum annual groundwater allotment established pursuant to the management plan under section 45-568.03, subsection A.

D. In the management plan, the director shall establish performance standards that the owner of an irrigation grandfathered right or any person using groundwater pursuant to that right shall satisfy while participating in the historic cropping program to assure that conservation equivalent to that required by the agricultural conservation program included in the management plan pursuant to section 45-568.03, subsection A will be achieved. After an owner of an irrigation grandfathered right has been approved for participation in the historic cropping program, the owner of that right, and any person using groundwater pursuant to that right, shall meet both of the following conditions:

1. Comply with the performance standards established by the director.

2. Not accumulate debits to the flexibility account established under section 45-467 that exceed twenty-five percent of the maximum annual groundwater allotment established under subsection B of this section. The owner of the irrigation grandfathered right and any person entitled to use groundwater pursuant to that right violate this section if the debit balance exceeds the amount stated in this paragraph.

E. Notwithstanding section 45-467, an owner of an irrigation grandfathered right, while participating in the historic cropping program, may not convey or sell flexibility account credits from, or purchase flexibility account credits for, the flexibility account regulated by the historic cropping program.

F. The director may include in the adoption of, or a modification to, the management plan for the sixth management period additional alternative agricultural conservation programs that the director determines achieve conservation that is at least equivalent to that required under the agricultural conservation program included in the management plan pursuant to section 45-568.03, including a cropped acreage program in which the maximum annual groundwater allotment is determined based on the crops grown during the calendar year in which the irrigation efficiency is applied.

G. The director shall include in the adoption of the management plan for the sixth management period a best management practices program that requires the owner of an irrigation grandfathered right and any person using groundwater pursuant to the right to implement specific agricultural conservation practices for water use on the land or farm unit to which the right is appurtenant in lieu of complying with an irrigation water duty and a maximum annual groundwater allotment. The program shall be designed to achieve conservation that is at least equivalent to that required by the agricultural conservation program included in the management plan pursuant to section 45-568.03. END_STATUTE

Sec. 20. Section 45-574, Arizona Revised Statutes, is amended to read:

START_STATUTE45-574. Variances; application; notice; hearing; issuance

A. A person who requires additional time to comply with an irrigation water duty or conservation requirement established pursuant to section 45‑565, 45‑566, 45‑566.01, 45‑567, 45‑567.01, 45‑568, or 45‑568.01, 45-568.03 or 45-568.04 may apply to the director for a variance from the water duty or requirement within ninety days from the date of notice of the water duty or requirement. The application shall include the following:

1. The name and mailing address of the applicant.

2. The name of the active management area in which the use is located.

3. The amount of groundwater currently being withdrawn annually by the person.

4. The irrigation water duty or conservation requirement from which the variance is sought.

5. A general description of the economic circumstances preventing timely compliance with the irrigation water duty or conservation requirement and any information relevant to such circumstances.

6. The sworn statement that the information contained in the application is true and correct to the best belief and knowledge of the applicant.

7. Such other information as the director may require.

B. The director shall give written notice to the applicant of the opportunity for an administrative hearing. An administrative hearing shall be held before the director's decision on the application if the director deems a hearing necessary or a hearing is requested by the applicant.

C. The director may grant a variance upon on a showing of compelling economic circumstances. The variance shall specify:

1. The amount of groundwater which that may be withdrawn by the person during the variance period, or a schedule of intermediate water duties or conservation requirements to be reached at specified intervals during the variance period.

2. The duration of the variance, which may not exceed five years from the date of the director's final determination of the variance.

D. A party aggrieved by the director's decision may seek judicial review of the final decision of the director as provided in section 45‑114, subsection B in the superior court in the county in which the irrigated land or non-irrigation use is located.

E. Section 45‑114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section. If an administrative hearing is held, it shall be conducted in the active management area in which the use is located.END_STATUTE

Sec. 21. Section 45-575, Arizona Revised Statutes, is amended to read:

START_STATUTE45-575. Administrative review of irrigation water duty and conservation requirements

A. Any aggrieved party may request an administrative review of an irrigation water duty or conservation requirement established pursuant to section 45‑565, 45‑566, 45‑566.01, 45‑567, 45‑567.01, 45‑568, or 45‑568.01, 45-568.03 or 45-568.04. Except as provided in subsection B of this section, the request must be made not later than ninety days from the date of notice of such duty or requirement given thirty days after the adoption of the management plan or if the notice was given pursuant to section 45-566.01, subsection E or 45‑571.02, subsection B, not later than ninety days from the date of the notice.

B. An aggrieved person who claims that extraordinary circumstances not in existence as of the date of notice that was given thirty days after adoption of the management plan justify modification of an irrigation water duty or conservation requirement established pursuant to section 45‑565, 45‑566, 45‑566.01, 45‑567, 45-567.01, 45‑568, or 45‑568.01, 45‑568.03 or 45-568.04 may request administrative review of the water duty or conservation requirement more than ninety days from the date of notice of the water duty or conservation requirement. The director may modify the water duty or conservation requirement if the aggrieved person demonstrates to the director by clear and convincing evidence that extraordinary circumstances not in existence as of the date of the notice that was given thirty days after adoption of the management plan make it unreasonable to require compliance with a water duty or conservation requirement.

C. The director shall give written notice to the aggrieved party who is requesting an administrative review of the opportunity for an administrative hearing. An administrative hearing shall be held before the director's decision on the application if the director deems a hearing necessary or a hearing is requested by the applicant.

Sec. 22. Section 45-2103, Arizona Revised Statutes, is amended to read:

START_STATUTE45-2103. Arizona water protection fund commission

A. The Arizona water protection fund commission is established and consists of two three ex officio members, two advisory members and nine appointed members who are residents of this state, who have demonstrated an interest in natural resources and who are appointed as follows:

1. One person who represents a multi‑county water conservation district established pursuant to title 48, chapter 22 and named by that district's governing board.

2. One person who represents a state association of natural resource conservation districts and who is appointed by the governor.

3. Four persons who represent natural resource conservation districts established pursuant to title 37, chapter 6, and who represent geographically diverse areas of this state, two of whom shall be appointed by the president of the senate and two of whom are appointed by the speaker of the house of representatives.

4. One member of the public who has at least a bachelor's degree in hydrology, who represents a city that is served by the central Arizona project and who is appointed by the governor.

5. One person who is knowledgeable in natural resource conservation issues or in water resource issues related to riparian ecosystems, who represents an agricultural improvement district established pursuant to title 48, chapter 17 and who is appointed by the governor.

6. One person who represents an Indian tribe and who is appointed by the chairman of the intertribal inter tribal council of Arizona.

7. As nonvoting ex officio members, the director of the department of water resources, the state forester and the state land commissioner.

8. As nonvoting advisory members, one member of the house of representatives who is appointed by the speaker of the house of representatives and one member of the senate who is appointed by the president of the senate. Advisory members may not be considered for purposes of establishing a quorum.

B. Members of the commission appointed pursuant to subsection A, paragraphs 1 through 6 of this section shall be appointed for staggered terms of three years. A member may serve more than one term and may continue to serve beyond the expiration of the term until a successor is appointed and assumes office.

C. On request, members who are not ex officio members of the commission are eligible to receive compensation pursuant to section 38‑611, not to exceed three thousand dollars in any calendar year, and are eligible for reimbursement for expenses pursuant to title 38, chapter 4, article 2.

D. Members of the commission are immune from liability for any action necessary to carry out the purposes of this chapter. END_STATUTE

Sec. 23. Section 45-2106, Arizona Revised Statutes, is amended to read:

START_STATUTE45-2106. Public involvement

A. The commission is subject to the provisions of title 38, chapter 3, article 3.1 and title 39, chapter 1.

B. The commission shall develop and may amend the guidelines for applicants required by section 45‑2105 after reviewing the recommendations submitted by the natural resource conservation districts developed pursuant to section 37‑1054, subsections D and E and the information gathered during the public involvement process.

C. The commission shall gather information from the following:

1. The director of the department of water resources, the state forester and the state land commissioner.

2. The federal and state fish, wildlife, recreation and natural resource agencies.

3. County and municipal entities.

4. The public.

D. The commission shall develop procedures to assure ensure adequate public participation. At a minimum, public participation procedures shall prescribe public notice requirements including the content and publication of the notice, provide an opportunity for public hearings and specify the procedures governing the hearings and require the public availability of relevant documents. Public hearings shall be held at places and times which that afford a reasonable opportunity to persons to participate.

E. The commission shall make available for viewing copies of the recommendations and supporting documents submitted pursuant to this section and may charge a reasonable fee for copying. END_STATUTE

Sec. 24. Section 45-2113, Arizona Revised Statutes, is amended to read:

START_STATUTE45-2113. Fund grants; applications

A. The commission shall grant monies from the fund consistent with the application guidelines developed pursuant to section 45‑2105. The commission shall establish a procedure by which monies may be granted annually which shall include that includes a maximum of six months between the receipt of the proposal by the commission and the disbursement of monies. The commission shall give priority in funding to the following:

1. Projects for which matching monies or assets of comparable value, including in-kind contributions, will be provided by other sources.

2. Projects that provide for the continued maintenance of the portion of the river and stream and associated riparian habitat that are enhanced by the project.

3. Projects that include broad based broad-based local involvement.

4. Projects that directly benefit perennial or intermittent rivers or streams or that otherwise increase the supply of water.

B. The commission shall require as a condition of approval of any proposal all of the following provisions:

1. Allowing access for inspection and evaluation of the project.

2. Controlling the expenditure of and accounting for any monies granted by the commission

3. Requiring that those persons responsible for the project submit all pertinent information and research gained from the project to the commission.

4. Requiring that any person receiving a grant spend no more than five percent of the grant on costs of administration.

C. The commission shall provide for public involvement regarding the applications submitted to the commission, which shall include notice to any person who requests notice of applications and which shall provide a reasonable opportunity for comment on the application which shall that is not be less than forty‑five days.

D. On receipt of an application the commission shall notify cities, towns, counties, natural resource conservation districts, special districts and Indian communities affected by the proposal and shall provide a reasonable opportunity for comment on the application which shall that is not be less than forty‑five days.

E. Any person, state agency or political subdivision of this state may submit a request for funding from the fund for purposes prescribed by this section. A federal agency is not eligible for funding from the fund. Requests for funding shall be made to the commission. Requests for funding submitted to the commission may be accompanied by expressions of support from affected cities, towns, counties, natural resource conservation districts, special districts or Indian communities.

F. As a condition of approval by the commission, the applicant shall commit to work jointly with the affected cities, towns, counties, natural resource conservation districts, special districts and Indian communities that have contacted the commission pursuant to subsection D of this section on all aspects of the proposal's implementation and monitoring, unless the jurisdiction chooses not to participate.

G. Monies in the fund may only be spent to finance programs located in this state.

H. Monies in the fund may be spent for any of the following:

1. Granting monies to entities for the acquisition of central Arizona project water or effluent that will protect or restore rivers or streams consistent with state water law. No An entity may not exercise the right of eminent domain to acquire water or water rights using monies derived from this fund.

2. Granting monies to assist in developing, promoting and implementing water conservation programs, that are directly related to the purposes of this chapter, outside of the active management areas.

3. Granting monies in support of research and data collection, compilation and analysis that are directly related to the purposes of this chapter, except that no more than five percent of the monies deposited in the fund in any fiscal year may be spent for this purpose. Before the approval of any such project, the commission shall consult with the department of water resources, the Arizona department of forestry and fire management and the state land department to determine whether any research of a similar nature has been or is in the process of being performed and is already available. The commission shall not approve a proposal if either department determines that sufficient data exists and notifies the commission in writing.

4. Granting monies for the development and implementation of capital projects or specific measures consistent with the purposes of this chapter.

I. Monies in the fund may not be spent for:

1. Any project that includes the planting of mesquite, tamarisk or other nonnative high water usage trees that consume water to a degree that is detrimental to water conservation efforts, but may be used for removal of mesquite, tamarisk or other nonnative high water usage trees that consume water to a degree that is detrimental to water conservation efforts.

2. Any remedial action purposes undertaken pursuant to the comprehensive environmental response, compensation, and liability act of 1980, as amended (P.L. 96‑510; 94 Stat. 2767; 42 United States Code section 9601) or title 49, chapter 2, article 5. END_STATUTE

Sec. 25. Section 48-3702, Arizona Revised Statutes, is amended to read:

START_STATUTE48-3702. District as municipal corporation; immunity

A. A multi‑county water conservation district is a tax-levying public improvement district of the state and a municipal corporation to the extent of the powers and privileges conferred by this chapter or granted generally to municipal corporations by the constitution and statutes of the state, including the immunities and exemptions provided by article 13 XIII, section 7, of the Constitution of Arizona.

B. A multi-county water conservation DISTRICT shall not assert the defense of immunity under the eleventh amendment of the United States Constitution in litigation brought by a water user to enforce the terms of a central Arizona project water delivery contract or subcontract. END_STATUTE

Sec. 26. Title 48, chapter 22, article 1, Arizona Revised Statutes, is amended by adding section 48-3713.04, to read:

START_STATUTE48-3713.04. District, department communication; interstate, federal issues; notice

A. If the district is a party to discussions on or negotiations of interstate agreements or agreements with the United States INVOLVING the use, storage or conservation of Colorado river water, the district shall promptly inform the director of water resources.

B. If the director of water resources is a party to DISCUSSIONS on or negotiations of interstate agreements or agreements with the United States INVOLVING the use, storage or conservation of Colorado river water, the director of water resources shall promptly inform the district. END_STATUTE

Sec. 27. Evaluation of conservation requirements and irrigation water duties for fifth and sixth management periods; advisory committee; report; delayed repeal

A. The director of water resources shall evaluate the conservation requirements and irrigation water duties required to be established in the management plans for the fifth and sixth management periods pursuant to section 45-568, Arizona Revised Statutes, as amended by this act, and sections 45-568.03, 45-568.04 and 45-568.05, Arizona Revised Statutes, as added by this act, to determine whether any changes to those conservation requirements and irrigation water duties are appropriate to achieve reasonable conservation in the active management areas.

B. The director shall establish one or more advisory committees for each active management area to assist the director in the evaluation required by subsection A of this section. The director may also contract with an independent researcher to assist in the evaluation. The evaluation shall include a review of the conservation requirements and irrigation water duties established in the management plans for the fifth management period for each active management area to determine whether those conservation requirements should continue for the management plans for the fifth and sixth management periods, or whether changes are appropriate.

C. The director shall prepare a report of the director's findings and recommendations and submit the report on or before December 31, 2030 to the governor, the president of the senate, the speaker of the house of representatives, the members of the senate natural resources, energy and water committee, or its successor committee, and the members of the house of representatives energy, environment and natural resources committee, or its successor committee. The report shall include any recommendations for statutory changes.

D. This section is repealed from and after September 30, 2031.

Sec. 28. Conforming legislation

The legislative council staff shall prepare proposed legislation conforming the Arizona Revised Statutes to the provisions of this act for consideration in the fifty‑fourth legislature, first regular session.

Sec. 29. Transfer; effect; succession; natural resource conservation districts; Arizona department of forestry and fire management

A. All matters, including contracts, orders and judicial or quasi‑judicial actions, whether completed or pending, of the state land department relating to natural resource conservation districts are transferred, on the date prescribed by section 30 of this act, and maintain the same status with the Arizona department of forestry and fire management.

B. Rules adopted by the state land department relating to natural resource conservation districts are effective until superseded by rules adopted by the Arizona department of forestry and fire management.

C. All personnel, property and records, all data and investigative findings, all obligations and all appropriated monies remaining unspent and unencumbered of the state land department relating to natural resource conservation districts are transferred to the Arizona department of forestry and fire management and may be used for the purposes of this act.

Sec. 30. Retroactivity

Sections 37‑1002, 37‑1011, 37‑1012, 37‑1013, 37‑1014, 37‑1036, 37‑1054, 37‑1302, 45‑2103, 45‑2106 and 45‑2113, Arizona Revised Statutes, as amended by this act, apply retroactively to from and after June 30, 2018.