HB2586 - 541R

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

Section 1. Section 45-576, Arizona Revised Statutes, is amended to read:

START_STATUTE45-576. Certificate of assured water supply; designated cities, towns and private water companies; exemptions; definition

A. Except as provided in subsections G and J of this section, a person who proposes to offer subdivided lands, as defined in section 32‑2101, for sale or lease in an active management area shall apply for and obtain a certificate of assured water supply from the director prior to before presenting the plat for approval to the city, town or county in which the land is located, where such is required, and prior to before filing with the state real estate commissioner a notice of intention to offer such lands for sale or lease, pursuant to section 32‑2181, unless the subdivider has obtained a written commitment of water service for the subdivision from a city, town or private water company designated as having an assured water supply pursuant to this section.

B. Except as provided in subsections G and J of this section, a city, town or county may approve a subdivision plat only if the subdivider has obtained a certificate of assured water supply from the director or the subdivider has obtained a written commitment of water service for the subdivision from a city, town or private water company designated as having an assured water supply pursuant to this section. The city, town or county shall note on the face of the approved plat that a certificate of assured water supply has been submitted with the plat or that the subdivider has obtained a written commitment of water service for the proposed subdivision from a city, town or private water company designated as having an assured water supply pursuant to this section.

C. Except as provided in subsections G and J of this section, the state real estate commissioner may issue a public report authorizing the sale or lease of subdivided lands only on compliance with either of the following:

1. The subdivider, owner or agent has paid any activation fee required under section 48‑3772, subsection A, paragraph 7 and any replenishment reserve fee required under section 48‑3774.01, subsection A, paragraph 2 and has obtained a certificate of assured water supply from the director.

2. The subdivider has obtained a written commitment of water service for the lands from a city, town or private water company designated as having an assured water supply pursuant to this section and the subdivider, owner or agent has paid any activation fee required under section 48‑3772, subsection A, paragraph 7.

D. The director shall designate private water companies in active management areas that have an assured water supply. If a city or town acquires a private water company that has contracted for central Arizona project water, the city or town shall assume the private water company's contract for central Arizona project water.

E. The director shall designate cities and towns in active management areas where an assured water supply exists. If a city or town has entered into a contract for central Arizona project water, the city or town is deemed to continue to have an assured water supply until December 31, 1997. Commencing on January 1, 1998, the determination that the city or town has an assured water supply is subject to review by the director and the director may determine that a city or town does not have an assured water supply.

F. The director shall notify the mayors of all cities and towns in active management areas and the chairmen of the boards of supervisors of counties in which active management areas are located of the cities, towns and private water companies designated as having an assured water supply and any modification of that designation within thirty days of the designation or modification. If the service area of the city, town or private water company has qualified as a member service area pursuant to title 48, chapter 22, article 4, the director shall also notify the conservation district of the designation or modification and shall report the projected average annual replenishment obligation for the member service area based on the projected and committed average annual demand for water within the service area during the effective term of the designation or modification subject to any limitation in an agreement between the conservation district and the city, town or private water company. For each city, town or private water company that qualified as a member service area under title 48, chapter 22 and was designated as having an assured water supply before January 1, 2004, the director shall report to the conservation district on or before January 1, 2005 the projected average annual replenishment obligation based on the projected and committed average annual demand for water within the service area during the effective term of the designation subject to any limitation in an agreement between the conservation district and the city, town or private water company. Persons proposing to offer subdivided lands served by those designated cities, towns and private water companies for sale or lease are exempt from applying for and obtaining a certificate of assured water supply.

G. This section does not apply in the case of the sale of lands for developments that are subject to a mineral extraction and processing permit or an industrial use permit pursuant to sections 45‑514 and 45‑515.

H. The director shall adopt rules to carry out the purposes of this section. On or before January 1, 2008, the rules shall provide for a reduction in water demand for an application for a designation of assured water supply or a certificate of assured water supply if a gray water reuse system will be installed that meets the requirements of the rules adopted by the department of environmental quality for gray water systems and if the application is for a certificate of assured water supply, the land for which the certificate is sought must qualify as a member land in a conservation district pursuant to title 48, chapter 22, article 4. For the purposes of this subsection, "gray water" has the same meaning prescribed in section 49‑201.

I. If the director designates a municipal provider as having an assured water supply under this section and the designation lapses or otherwise terminates while the municipal provider's service area is a member service area of a conservation district, the municipal provider or its successor shall continue to comply with the consistency with management goal requirements in the rules adopted by the director under subsection H of this section as if the designation was still in effect with respect to the municipal provider's designation uses. When determining compliance by the municipal provider or its successor with the consistency with management goal requirements in the rules, the director shall consider only water delivered by the municipal provider or its successor to the municipal provider's designation uses. A person is the successor of a municipal provider if the person commences water service to uses that were previously designation uses of the municipal provider. Any groundwater delivered by the municipal provider or its successor to the municipal provider's designation uses in excess of the amount allowed under the consistency with management goal requirements in the rules shall be considered excess groundwater for purposes of title 48, chapter 22. For the purposes of this subsection, "designation uses" means all water uses served by a municipal provider on the date the municipal provider's designation of assured water supply lapses or otherwise terminates and all recorded lots within the municipal provider's service area that were not being served by the municipal provider on that date but that received final plat approval from a city, town or county on or before that date. Designation uses do not include industrial uses served by an irrigation district under section 45‑497.

J. Subsections A, B and C of this section do not apply to a person who proposes to offer subdivided land for sale or lease in an active management area if all the following apply:

1. The director issued a certificate of assured water supply for the land to a previous owner of the land and the certificate was classified as a type a certificate under rules adopted by the director pursuant to subsection H of this section.

2. The director has not revoked the certificate of assured water supply described in paragraph 1 of this subsection, and proceedings to revoke the certificate are not pending before the department or a court. The department shall post on its website a list of all certificates of assured water supply that have been revoked or for which proceedings are pending before the department or a court.

3. The plat submitted to the department in the application for the certificate of assured water supply described in paragraph 1 of this subsection has not changed.

4. Water service is currently available to each lot within the subdivided land and the water provider listed on the certificate of assured water supply described in paragraph 1 of this subsection has not changed.

5. The subdivided land qualifies as a member land under title 48, chapter 22 and the subdivider has paid any activation fee required under section 48‑3772, subsection A, paragraph 7 and any replenishment reserve fee required under section 48‑3774.01, subsection A, paragraph 2.

6. The plat is submitted for approval to a city, town or county that is listed on the department's website as a qualified platting authority.

K. Subsection J of this section does not affect the assignment of a certificate of assured water supply as prescribed by section 45‑579.

L. FOR LAND LOCATED IN THE PINAL ACTIVE MANAGEMENT AREA, tHE INITIAL TERM OF AN ANALYSIS OF ASSURED WATER SUPPLY ISSUED BY THE DIRECTOR is TEN YEARS. A HOLDER OF AN ANALYSIS OF ASSURED WATER SUPPLY PERTAINING TO LAND LOCATED IN THE PINAL ACTIVE MANAGEMENT AREA MAY APPLY TO EXTEND THE ANALYSIS before THE EXPIRATION DATE OF THE ANALYSIS. EXCEPT AS PROVIDED IN SUBSECTION M OF THIS SECTION, THE DIRECTOR SHALL EXTEND THE ANALYSIS FOR AN ADDITIONAL FIVE YEARS IF MATERIAL PROGRESS IN THE DEVELOPMENT OF THE LAND DESCRIBED IN THE ANALYSIS HAS OCCURRED AT ANY TIME DURING THE CURRENT ANALYSIS PERIOD. EACH ANALYSIS EXTENSION COMMENCEs ON THE DATE THE ANALYSIS OF ASSURED WATER SUPPLY WOULD HAVE OTHERWISE EXPIRED. For any analysis UNDER THIS subsection:

1. FOR THE FIRST AND SECOND RENEWAL TERMS, THE DIRECTOR SHALL ACCEPT ANY ONE OF THE FOLLOWING ACTIONS AS CONSTITUTING MATERIAL PROGRESS IN THE DEVELOPMENT OF LAND, and fOR THE THIRD AND LATER RENEWAL TERMS, THE DIRECTOR SHALL ACCEPT ANY TWO OF THE FOLLOWING ACTIONS AS constituting MATERIAL PROGRESS IN THE DEVELOPMENT OF LAND:

(a) A CITY, TOWN OR COUNTY HAVING JURISDICTION HAS APPROVED THE ZONING FOR OR ISSUED A USE PERMIT FOR THE LAND DESCRIBED IN THE ANALYSIS.

(b) A CITY, TOWN OR COUNTY HAVING JURISDICTION HAS APPROVED A MAJOR AMENDMENT TO a ZONING OR USE APPROVAL FOR THE LAND DESCRIBED IN THE ANALYSIS. A MAJOR AMENDMENT TO a ZONING APPROVAL IS AN AMENDMENT THAT REQUIRES A HEARING AND NOTICE OF HEARING pursuant to section 9-462.04, subsection A, paragraphs 4 and 5 or section 11-813, subsection E, PARAGRAPHS 1 and 2, as applicable.

(c) A PERSON OR ENTITY AND A CITY, TOWN OR COUNTY HAVING JURISDICTION HAVE ENTERED INTO A DEVELOPMENT AGREEMENT PERTAINING TO THE LAND DESCRIBED IN THE ANALYSIS.

(d) A PERSON Or ENTITY HAS INSTALLED WATER, SEWER, ROADWAY OR DRAINAGE INFRASTRUCTURE TO PROVIDE SERVICE TO NOT LESS THAN A SUBSTANTIAL PORTION OF THE LAND DESCRIBED IN THE ANALYSIS.

(e) THE DEPARTMENT OF ENVIRONMENTAL QUALITY OR A COUNTY HAVING JURISDICTION HAS ISSUED AN APPROVAL TO CONSTRUCT OR APPROVAL OF CONSTRUCTION FOR WATER INFRASTRUCTURE TO PROVIDE SERVICE TO not LESS THAN A SUBSTANTIAL PORTION OF THE LAND DESCRIBED IN THE ANALYSIS.

(f) A PERSON OR ENTITY HAS INSTALLED WELLS that are ADEQUATE TO SATISFY THE ESTIMATED WATER DEMAND ASSOCIATED WITH NOT LESS THAN A SUBSTANTIAL PORTION OF THE LAND DESCRIBED IN THE ANALYSIS.

(g) A FEDERAL, STATE OR LOCAL GOVERNING BODY HAVING JURISDICTION HAS ISSUED A PERMIT OR LICENSE that is NECESSARY TO DEVELOP LAND AND THAT APPLIES TO NOT LESS THAN A SUBSTANTIAL PORTION OF THE LAND DESCRIBED IN THE ANALYSIS.

(h) A PERSON OR ENTITY AND A CITY, TOWN OR PRIVATE WATER COMPANY HAVE ENTERED INTO AN AGREEMENT FOR WATER SERVICE TO NOT LESS THAN A SUBSTANTIAL PORTION OF THE LAND DESCRIBED IN THE ANALYSIS AND THE AGREEMENT INCLUDES WATER INFRASTRUCTURE CONSTRUCTION REQUIREMENTS.

(i) THE DEPARTMENT HAS ISSUED A CERTIFICATE OF ASSURED WATER SUPPLY FOR NOT LESS THAN A SUBSTANTIAL PORTION OF THE LAND DESCRIBED IN THE ANALYSIS.

(j) A PERSON OR ENTITY HAS COMPLETED A MASTER WATER, MASTER WASTEWATER OR MASTER DRAINAGE PLAN FOR NOT LESS THAN A SUBSTANTIAL PORTION OF THE LAND DESCRIBED IN THE ANALYSIS AND HAS FILED THE PLAN WITH A LOCAL GOVERNING BODY HAVING JURISDICTION OR WITH A PRIVATE WATER COMPANY OR PRIVATE SEWER COMPANY that is OBLIGATED TO PROVIDE UTILITY SERVICE TO THE LAND DESCRIBED IN THE ANALYSIS.

(k) A PERSON OR ENTITY HAS COMPLETED ANY OF THE FOLLOWING SURVEYS OR REPORTS FOR NOT LESS THAN A SUBSTANTIAL PORTION OF THE LAND DESCRIBED IN THE ANALYSIS AND HAS FILED THE SURVEY OR REPORT WITH A LOCAL GOVERNING BODY HAVING JURISDICTION:

(i) ENVIRONMENTAL STUDY.

(ii) ENGINEERING SURVEY.

(iii) ARCHEOLOGICAL SURVEY.

(iv) TRAFFIC IMPACT ANALYSIS.

(v) GEOTECHNICAL SURVEY.

(vi) ECONOMIC IMPACT ANALYSIS.

(vii) LAND SURVEY.

2. AN APPLICANT FOR AN EXTENSION OF AN ANALYSIS MAY RELY ON THE OCCURRENCE OF AN ACTION prescribed in paragraph 1, subdivisions (d) through (k) OF THIS SUBSECTION AS PROOF OF MATERIAL PROGRESS IN THE DEVELOPMENT OF THE LAND IN MULTIPLE EXTENSION APPLICATIONS if, for each extension application, the prescribed action HAS OCCURRED FOR A DIFFERENT SUBSTANTIAL PORTION OF THE LAND.

M. WHEN CONSIDERING AN APPLICATION TO EXTEND AN ANALYSIS of assured water supply, THE DIRECTOR SHALL EXTEND THE ANALYSIS FOR AN ADDITIONAL FIFTEEN YEARS IF BOTH OF THE FOLLOWING HAVE OCCURRED:

1. THE DEPARTMENT HAS ISSUED CERTIFICATES OF ASSURED WATER SUPPLY FOR SUBDIVIDED LANDs for THE LAND DESCRIBED IN THE ANALYSIS AND EITHER THE SUBDIVIDED LANDs CUMULATIVELY INCLUDE NOT LESS THAN FIFTY PERCENT OF THE LAND that is suitable for development and that is DESCRIBED IN THE ANALYSIS OR THE SUBDIVIDED LANDS INCLUDE A CUMULATIVE NUMBER OF RESIDENTIAL LOTS that constitute NOT LESS THAN FIFTY PERCENT OF THE NUMBER OF RESIDENTIAL LOTS DESCRIBED IN THE ANALYSIS.

2. THE IMPROVED AND SOLD LOTS AT THE LAND DESCRIBED IN THE ANALYSIS CUMULATIVELY INCLUDE NOT LESS THAN TWENTY‑FIVE PERCENT OF THE land that is suitable for development and that is DESCRIBED IN THE ANALYSIS OR THE NUMBER OF THE IMPROVED AND SOLD RESIDENTIAL LOTS AT THE LAND DESCRIBED IN THE ANALYSIS IS NOT LESS THAN TWENTY-FIVE PERCENT OF THE NUMBER OF RESIDENTIAL LOTS DESCRIBED IN THE ANALYSIS. A LOT is DEEMED to be IMPROVED AND SOLD for the purposes of this paragraph WHEN A BUILDING HAS BEEN CONSTRUCTED ON THE LOT AND THE LOT HAS BEEN SOLD IN AN ARMS' LENGTH TRANSACTION.

N. For the purposes of subsection L of this section:

1. "CURRENT ANALYSIS PERIOD" MEANS, FOR A FIRST APPLICATION TO EXTEND AN ANALYSIS, THE INITIAL ten-year ANALYSIS PERIOD AND, FOR A SECOND AND ANY LATER APPLICATION TO EXTEND AN ANALYSIS, EITHER THE five‑YEAR EXTENSION PERIOD OR THE fifteen-YEAR EXTENSION PERIOD IN EFFECT AT THE TIME AN APPLICANT FILES AN APPLICATION TO EXTEND THE ANALYSIS OF ASSURED WATER SUPPLY.

2. "SUBSTANTIAL PORTION OF THE LAND" MEANS THE LESSER OF one hundred sixty ACRES OR ONE-QUARTER OF THE DEVELOPABLE LAND DESCRIBED IN THE ANALYSIS.

L. O. For the purposes of this section, "assured water supply" means all of the following:

1. Sufficient groundwater, surface water or effluent of adequate quality will be continuously available to satisfy the water needs of the proposed use for at least one hundred years. Beginning January 1 of the calendar year following the year in which a groundwater replenishment district is required to submit its preliminary plan pursuant to section 45‑576.02, subsection A, paragraph 1, with respect to an applicant that is a member of the district, "sufficient groundwater" for the purposes of this paragraph means that the proposed groundwater withdrawals that the applicant will cause over a period of one hundred years will be of adequate quality and will not exceed, in combination with other withdrawals from land in the replenishment district, a depth to water of one thousand feet or the depth of the bottom of the aquifer, whichever is less. In determining depth to water for the purposes of this paragraph, the director shall consider the combination of:

(a) The existing rate of decline. PROJECTED WITHDRAWALS BY EXISTING GROUNDWATER USERS, INCLUDING EXPECTED CHANGES IN FUTURE WITHDRAWAL PATTERNS CAUSED BY:

(i) THE EXPECTED PRODUCTION, REUSE, OR RECHARGE OF EFFLUENT.

(ii) REASONABLY ANTICIPATED CHANGES IN AGRICULTURAL WATER USE OR IRRIGATED ACREAGE, WHICH THE DIRECTOR SHALL DETERMINE IN CONSULTATION WITH IRRIGATION DISTRICTS OR IRRIGATION GRANDFATHERED RIGHT HOLDERS.

(iii) OTHER FACTORS REASONABLY DETERMINED BY THE DIRECTOR TO AFFECT FUTURE WITHDRAWALS BY EXISTING GROUNDWATER USERS.

(b) The proposed withdrawals.

(c) The expected water requirements of all recorded lots that are not yet served water and that are located in the service area of a municipal provider.

(d) IF THE PROPOSED USE IS WITHIN THE PHOENIX, PINAL OR TUCSON ACTIVE MANAGEMENT AREAS, THE EFFECTS OF EXPECTED GROUNDWATER REPLENISHMENT BY A CONSERVATION DISTRICT UNDER TITLE 48, CHAPTER 22, ARTICLE 4 WITHIN THE APPLICABLE ACTIVE MANAGEMENT AREA, except that THE DIRECTOR SHALL NOT CONSIDER THat EXPECTED GROUNDWATER REPLENISHMENT WHEN BOTH OF THE FOLLOWING APPLY:

(i) THE DIRECTOR DETERMINes WHETHER TO DESIGNATE OR MAINTAIN THE DESIGNATION OF A CITY, TOWN OR PRIVATE WATER COMPANY AS HAVING AN ASSURED WATER SUPPLY.

(ii) THE SERVICE AREA OF THAT CITY, TOWN OR PRIVATE WATER COMPANY does NOT QUALIFy AS A MEMBER SERVICE AREA OF A CONSERVATION DISTRICT PURSUANT TO TITLE 48, CHAPTER 22, ARTICLE 4.

2. The projected groundwater use is consistent with the management plan and achievement of the management goal for the active management area.

3. The financial capability has been demonstrated to construct the water facilities necessary to make the supply of water available for the proposed use, including a delivery system and any storage facilities or treatment works. The director may accept evidence of the construction assurances required by section 9‑463.01, 11‑823 or 32‑2181 to satisfy this requirement. END_STATUTE

Sec. 2. Section 45-576.02, Arizona Revised Statutes, is amended to read:

START_STATUTE45-576.02. Replenishment district plans, conservation district plans and water district plans

A. A groundwater replenishment district that is established pursuant to title 48, chapter 27 shall submit to the director:

1. On or before January 1 of the second calendar year following the year in which the district is established, a preliminary plan describing the activities that the district proposes to undertake during the seventeen calendar years following submittal of the preliminary plan.

2. On or before January 1 of the twelfth calendar year following the year in which the district is established, a long‑range plan describing the district's proposed activities through the first calendar year in which achieving safe‑yield is required.

B. The district's plan shall include:

1. An estimate of the district members' replenishment obligations that will arise during the planning period.

2. A description of water resources that are expected to be available to the district during the planning period.

3. A description of any facilities and projects to be used for replenishment during the planning period.

4. An analysis of potential groundwater replenishment sites in each groundwater subbasin in the district.

5. A description of the district's financial capabilities and financial requirements that are necessary to address the district members' replenishment obligations during the planning period.

6. A description of the district's current capability to meet the district members' replenishment obligations for the five calendar years following the calendar year in which the district submits its plan.

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

C. A conservation district that is established pursuant to title 48, chapter 22 shall submit to the director the following:

1. On or before June 1, 1994, a plan describing the activities that the conservation district proposes to undertake during the twenty calendar years following submitting the plan. Except as provided in subsection D F of this section, the plan shall include the following information for each active management area in which a member land or member service area is or may be located:

(a) An estimate of the conservation district's current and projected groundwater replenishment obligations, as that term is defined and used in title 48, chapter 22, for the twenty calendar years following the submission of the plan.

(b) A description of water resources that are expected to be available to the conservation district for replenishment purposes during the twenty calendar years following the submission of the plan.

(c) A description of any facilities and projects to be used for replenishment purposes during the twenty calendar years following the submission of the plan.

(d) An analysis of potential groundwater replenishment sites in each groundwater subbasin.

(e) A description of the conservation district's financial capabilities and financial requirements that are necessary to address the conservation district's groundwater replenishment obligations during the twenty calendar years following the submission of the plan.

(f) A description of the conservation district's current capability to meet the current and projected groundwater replenishment obligations for the five calendar years following the calendar year in which the conservation district submits the plan.

(g) If a water district has adopted an ordinance or resolution to undertake water district groundwater replenishment obligations pursuant to section 48‑4971, subsection A, a description of central Arizona project water that may be available to the water district for replenishment purposes during the twenty calendar years following the submission of the plan.

(h) Any other information that the director may require.

2. On or before January 1, 2005 and, except as prescribed in subsection D of this section, within one year before January 1 of every tenth calendar year thereafter, a plan describing the activities for each active management area that the conservation district proposes to undertake during the one hundred calendar years following submitting the plan. Except as provided in subsection D F of this section, the plan shall include the following information for each active management area in which a member land or member service area is or may be located:

(a) The conservation district's groundwater replenishment obligations and the extent to which those obligations have been met in the ten years preceding submittal of the plan.

(b) An estimate of the conservation district's current and projected groundwater replenishment obligations, as that term is defined and used in title 48, chapter 22, for current members for the twenty calendar years following the submission of the plan and an estimate of the district's projected groundwater replenishment obligations for the one hundred calendar years following the submission of the plan for current members and potential members based on reasonable projections of real property and service areas that could qualify for membership in the ten years following the submission of the plan.

(c) A description of the water resources that the conservation district plans to use for replenishment purposes during the twenty calendar years following submission of the plan and water resources potentially available to the conservation district for groundwater replenishment purposes during the subsequent eighty calendar years.

(d) A description of the district's current replenishment reserve activities in each active management area for the ten years preceding the current plan and planned replenishment reserve activities for the ensuing ten years to be undertaken pursuant to section 48‑3772, subsection E.

(e) A description of any facilities and projects to be used for replenishment and the replenishment capacity available to the conservation district during the twenty calendar years following submission of the plan.

(f) An analysis of potential storage facilities that may be used by the conservation district for replenishment purposes.

(g) A description of the conservation district's capability to meet the current and projected groundwater replenishment obligations for the twenty calendar years following the calendar year in which the conservation district submits the plan.

(h) Any other information that the director may require.

D. For the ONE-YEAR TIME PERIOD prescribed by subsection C, paragraph 2 of this section DURING WHICH THE CONSERVATION DISTRICT MUST SUBMIT ITS NEXT PLAN, the plan SHALL BE AUTOMATICALLY POSTPONED FOR TEN CALENDAR YEARS FOR ALL ACTIVE MANAGEMENT AREAS IF EITHER OF THE FOLLOWING OCCURs:

1. THE CONSERVATION DISTRICT SUBMITS TO THE DEPARTMENT A REQUEST FOR CONSULTATION ON A PROPOSED CONVEYANCE OR LEASE TO THE CONSERVATION DISTRICT, FOR REPLENISHMENT PURPOSES, OF A COLORADO RIVER ENTITLEMENT HELD BY A NONFEDERAL ENTITY OR INDIVIDUAL in this state TOGETHER WITH A WATER USE MANAGEMENT PLAN PERTAINING TO THAT PROPOSED CONVEYANCE OR LEASE OF THE COLORADO RIVER ENTITLEMENT AT ANY TIME before THE EXPIRATION OF THE DIRECTOR'S MOST RECENT DETERMINATION PURSUANT TO section 45-576.03, SUBSECTION M OR R THAT THE CONSERVATION DISTRICT'S PLAN OF OPERATION IS CONSISTENT WITH ACHIEVING THE MANAGEMENT GOAL AND THE DIRECTOR EITHER REFUSES TO RECOMMEND THAT THE UNITED STATES BUREAU OF RECLAMATION APPROVE THAT PROPOSED CONVEYANCE OR LEASE OF the COLORADO RIVER ENTITLEMENT OR THE DIRECTOR RECOMMENDS THAT THE UNITED STATES BUREAU OF RECLAMATION DISAPPROVE THAT PROPOSED CONVEYANCE OR LEASE OF tHE COLORADO RIVER ENTITLEMENT.

2. THE UNITED STATES BUREAU OF RECLAMATION REFUSES TO APPROVE A PROPOSED CONVEYANCE OR LEASE TO THE CONSERVATION DISTRICT, FOR REPLENISHMENT PURPOSES, OF A COLORADO RIVER ENTITLEMENT HELD BY A NONFEDERAL ENTITY OR INDIVIDUAL in this state.

E. IF THE TIME PERIOD FOR SUBMISSION OF A PLAN IS AUTOMATICALLY POSTPONED FOR TEN YEARS PURSUANT TO subsection D OF THIS SECTION, THE PLANS OF OPERATION FOR ALL ACTIVE MANAGEMENT AREAS that were MOST RECENTLY DETERMINED BY THE DIRECTOR TO BE CONSISTENT WITH ACHIEVING THE MANAGEMENT GOAL PURSUANT TO section 45-576.03, SUBSECTION M OR R SHALL REMAIN IN EFFECT DURING THE TEN-YEAR POSTPONEMENT PERIOD AND DURING THE REVIEW BY THE DIRECTOR OF ANY SUBSEQUENT PLANS OF OPERATION SUBMITTED BY THE CONSERVATION DISTRICT UNDER subsection C, PARAGRAPH 2 of this section AND SHALL NOT EXPIRE UNTIL THE DIRECTOR ISSUES A DECISION PURSUANT TO SECTION 45-576.03, SUBSECTION M ON ANY SUBSEQUENT PLANS OF OPERATION SUBMITTED BY THE CONSERVATION DISTRICT UNDER subsection C, paragraph 2 of this section.

D. F. The information required by subsection C, paragraph 1, subdivisions (b) and (f) and paragraph 2, subdivisions (c) and (g) of this section need not be included in a conservation district's plan if the conservation district demonstrates to the director that it has obtained an allocation of central Arizona project water or other water supplies determined by the director to be consistent with the assured water supply requirements pursuant to section 45‑576 in an amount that equals or exceeds the projected groundwater replenishment obligation for the one hundred calendar years following the submission of the plan. If the conservation district demonstrates to the director that it has obtained an allocation of central Arizona project water or other water supplies determined by the director to be consistent with the assured water supply requirements pursuant to section 45‑576 in an amount that is less than the projected groundwater replenishment obligation for the one hundred calendar years following the submission of the plan, the information required by subsection C, paragraph 1, subdivisions (b) and (f) and paragraph 2, subdivisions (c) and (g) of this section shall be submitted only for the amount of the obligation in excess of the total amount of the central Arizona project water allocation and other supplies. The director shall quantify the amount of an allocation of central Arizona project water associated with a nondeclining municipal and industrial subcontract on the basis of the amount of the contract. The director shall quantify the amount of an allocation of central Arizona project water associated with a subcontract other than a nondeclining municipal and industrial subcontract on the basis of the reliability of the source.

E. G. A water district shall submit to the director on or before June 1 of the calendar year following the year in which the water district has adopted an ordinance or resolution to undertake the water district groundwater replenishment obligations under section 48‑4971, and on or within one year before each date on which a plan is required to be submitted by the conservation district under subsection C of this section, a plan describing the replenishment activities that the water district proposes to undertake during the twenty calendar years following the submittal of the plan. The plan shall include the following information for the active management area in which the water district is located:

1. An estimate of the water district's current and projected water district groundwater replenishment obligation, as that term is defined and used in title 48, chapter 28, for the twenty calendar years following the submission of the plan.

2. A description of water resources that are expected to be available to the water district for replenishment purposes during the twenty calendar years following the submission of the plan.

3. A description of any facilities and projects to be used for replenishment purposes during the twenty calendar years following the submission of the plan.

4. An analysis of potential groundwater replenishment sites in each groundwater subbasin.

5. A description of the water district's financial capabilities and financial requirements that are necessary to address the water district groundwater replenishment obligation during the twenty calendar years following the submission of the plan.

6. A description of the water district's current capability to meet the current and projected water district groundwater replenishment obligation for the five calendar years following the calendar year in which the water district submits the plan.

7. Any other information that the director may require.

F. H. For each plan submitted by the water district, the water district may incorporate applicable portions of the conservation district's plan. END_STATUTE

Sec. 3. Section 45-576.03, Arizona Revised Statutes, is amended to read:

START_STATUTE45-576.03. Director's review of plans

A. Within sixty days after receiving a groundwater replenishment district's preliminary and long‑range plans pursuant to section 45‑576.02, the director shall determine if the district has submitted sufficient information to determine whether the district's plan for operation is consistent with the management goal of the active management area. If the director determines that the information is insufficient for such a determination, the director shall notify the district of the insufficiency in writing and shall specify what additional information is required. The district shall provide the information to the director within thirty days after receiving the notice.

B. On determining that the district's preliminary or long‑range plan is complete, the director shall publish notice in a newspaper of general statewide circulation once each week for two consecutive weeks:

1. Requesting public comment concerning information supplied by the district to meet the requirements of section 45‑576.02.

2. Setting a date and location of a public hearing to be held pursuant to subsection C of this section.

C. The director shall hold a public hearing within sixty days after the last day of notice under subsection B of this section. The hearing shall be conducted in an informal manner without adhering to the rules of evidence required in judicial proceedings. Any person, including the department, shall have an opportunity to comment on or to present evidence concerning the submitted plan.

D. The district shall respond in writing to all public comments whether received at the hearing or otherwise received by a date announced by the director.

E. Within one hundred twenty days after the hearing on the preliminary plan, the director shall issue a preliminary decision determining whether or not the plan for district operation shall be designated as being consistent with achieving the management goal. If the director determines that the preliminary plan for district operation is consistent with achieving the management goal, the designation expires on January 1 of the thirteenth calendar year following the calendar year in which the district is established. Within one hundred twenty days after the hearing on the long‑range plan, the director shall issue a final decision determining whether or not the plan for district operation shall be designated as being consistent with achieving the management goal. The director shall include findings with the decision and a summary of all public comments received in writing and public comments made at the public hearing.

F. The director shall issue a decision that the district's plan for operation is consistent with achieving the management goal if the director finds that the district has the current capability to meet the district members' replenishment obligations for the five calendar years following the calendar year in which the district submits its plan and, in addition, the director makes either of the following findings, as applicable:

1. If the director is evaluating the preliminary plan, that the district has established an adequate plan for obtaining financing and water resources that are necessary to meet the district members' replenishment obligations through the eighteenth calendar year following the year in which the district is established.

2. If the director is evaluating the long‑range plan, that the district has established an adequate plan to meet the projected replenishment obligations through the first calendar year in which achieving safe‑yield is required.

G. Unless the district successfully appeals the director's decision pursuant to subsection H of this section, if the director has made a determination that the district's plan for operation is not consistent with achieving the management goal, the director shall notify the district of the inconsistency in writing and shall specify how the district's plan for operation is inconsistent with achieving the management goal. The district shall modify its proposed plan and resubmit the plan, and the director shall review the plan as provided by section 45‑576.02 and this section, except that the director shall only hold a hearing regarding those matters that the district has modified in its resubmitted plan.

H. The director's determination under subsection E of this section is subject to rehearing or review and to judicial review as provided in section 45‑114, subsection C, but the court shall not issue a temporary restraining order or preliminary injunction to prevent the director from acting under this chapter while the action is pending.

I. Within sixty days after receiving a conservation district's plan or a water district's plan pursuant to section 45‑576.02, including a revised plan pursuant to subsection R of this section, the director shall determine if the conservation district or water district, as the case may be, has submitted sufficient information to determine whether the conservation district's plan for operation is consistent with the management goals of each of the active management areas in which a member land or member service area is or may be located or whether the water district's plan for operation is consistent with the management goal of the active management area in which a water district member land or a water district member service area is or may be located. If the director determines that the information is insufficient for such a determination, the director shall notify the conservation district or water district, as the case may be, of the insufficiency in writing and shall specify what additional information is required. The conservation district or water district, as the case may be, shall provide the information to the director within a reasonable time as specified by the director.

J. On determining that the conservation district's plan or the water district's plan, as the case may be, is complete, the director shall publish notice in a newspaper of general statewide circulation once each week for two consecutive weeks:

1. Requesting public comment concerning information supplied by the conservation district or water district, as the case may be, to meet the requirements of section 45‑576.02.

2. Setting a date and location of a public hearing to be held pursuant to subsection K of this section.

K. The director shall hold a public hearing within sixty days after the last day of the notice under subsection J of this section. The hearing shall be conducted in an informal manner without adhering to the rules of evidence required in judicial proceedings. Any person, including the department, shall have an opportunity to comment on or to present evidence concerning the submitted plan.

L. The conservation district or the water district, as the case may be, shall respond in writing to all public comments whether received at the hearing or otherwise received by a date announced by the director.

M. Within sixty days after the hearing on the first plan required under section 45‑576.02, subsection C or the first plan required under section 45‑576.02, subsection E G and within one hundred twenty days after the hearing on any subsequent plan required under section 45‑576.02, subsection C or E G, including a revised plan pursuant to subsection R of this section, the director shall issue a decision for each of the active management areas in which a member land or member service area is or may be located, and the active management area in which a water district member land or water district member service area is or may be located, as to whether or not the plan submitted with respect to an active management area is consistent with achieving the management goal of the active management area. The director shall include findings with the decision and a summary of all public comments received in writing and public comments made at the public hearing. If the director's decision includes a determination that the plan submitted for an active management area is consistent with achieving the management goal of that active management area, except as provided in subsection S of this section, the determination expires on December 31 of the year following the year in which the conservation district or the water district, as the case may be, is required to submit its next plan under section 45‑576.02, subsections C and E G, or the date the director issues a decision determining that the next plan is consistent with achieving the management goal of the active management area, whichever occurs first.

N. The director shall make a determination that the conservation district's plan is consistent with achieving the management goal for each active management area if all of the following have been demonstrated:

1. The conservation district has identified sufficient water supplies to meet its replenishment obligations for current members during the twenty calendar years following the submission of the plan and has identified additional water supplies potentially available for the district's projected groundwater replenishment obligations for the one hundred calendar years following the submission of the plan for current members and potential members based on reasonable projections of real property and service areas that could qualify for membership in the ten years following the submission of the plan.

2. The replenishment reserve target for each active management area was calculated as prescribed in section 48‑3772, subsection E, and the district is developing a replenishment reserve in each active management area pursuant to section 48‑3772, subsection E.

3. The conservation district has identified sufficient capacity at storage facilities and projects to be used for replenishment purposes during the twenty calendar years following the submission of the plan.

4. The district has made a reasonable estimate of its projected replenishment obligations for the one hundred calendar years following the submission of the ten year plan as required by section 45‑576.02, subsection C, paragraph 2, subdivision (b).

O. The director shall issue a decision that the water district's plan is consistent with achieving the management goal of the active management area in which the water district is located if the director finds that the water district has the current capability to meet the current and projected water district groundwater replenishment obligation, as that term is defined and used in title 48, chapter 28, for the five calendar years following the calendar year in which the water district submits its plan and, in addition, the director finds the water district has established an adequate plan to meet the projected water district groundwater replenishment obligation for the twenty calendar years following the calendar year in which the plan was submitted.

P. Unless the conservation district or water district successfully appeals the director's decision pursuant to subsection Q of this section, if the director finds for one or more active management areas that the conservation district's plan for operation or the water district's plan is not consistent with achieving the management goal of an active management area, the director shall notify the conservation district or water district, as the case may be, of the inconsistency in writing and shall specify how the conservation district's plan for operation or the water district's plan is inconsistent with achieving the management goal. The conservation district or water district, as the case may be, shall modify its proposed plan and resubmit the plan within sixty days after it has been notified in writing of the director's decision, and the director shall review the plan as provided by section 45‑576.02 and this section, except that the director shall only hold a hearing regarding those matters that the conservation district or water district, as the case may be, has modified in its resubmitted plan.

Q. The director's decision under subsection M or R of this section is subject to rehearing or review and to judicial review as provided in section 45‑114, subsection C, but the court shall not issue a temporary restraining order or preliminary injunction to prevent the director from acting under this chapter while the action is pending.

R. If, at any time between the second anniversary and the eighth anniversary of the director's determination of consistency with the management goal, the director finds that there has been either an unexpected increase in the conservation district's projected groundwater replenishment obligations or an unexpected reduction in water supplies available to meet the conservation district's current obligations such that the conservation district's plan no longer demonstrates consistency with the management goal for one or more active management areas, the director shall require the conservation district to submit a revised plan for operation. The revised plan for operation shall be submitted within one calendar year after the date that the director notifies the conservation district of such a finding, unless the director extends this time for good cause. The director shall review, hold a hearing on and make a decision on the revised plan as provided by this section, except that the director shall only hold a hearing regarding those conditions that have changed. IF THE DIRECTOR EITHER REFUSES TO RECOMMEND THAT THE UNITED STATES BUREAU OF RECLAMATION APPROVE A PROPOSED USE BY THE CONSERVATION DISTRICT OF A COLORADO RIVER ENTITLEMENT HELD BY A NONFEDERAL ENTITY OR INDIVIDUAL in this state FOR REPLENISHMENT PURPOSES OR THE DIRECTOR RECOMMENDS THAT THE UNITED STATES BUREAU OF RECLAMATION DISAPPROVE THAT PROPOSED USE OF THE COLORADO RIVER ENTITLEMENT, THE DIRECTOR SHALL NOT CONSIDER THE UNAVAILABILITY OF THAT COLORADO RIVER ENTITLEMENT TO BE AN UNEXPECTED REDUCTION IN WATER SUPPLIES AVAILABLE TO MEET THE CONSERVATION DISTRICT'S CURRENT OBLIGATIONS UNDER THIS SECTION.

S. Unless the conservation district successfully appeals the director's decision pursuant to subsection Q of this section, if the director's decision includes a finding for one or more active management areas that the conservation district's revised plan for operation is not consistent with achieving the management goal of that active management area pursuant to this section and the conservation district is unable to satisfy the director's concerns within sixty days after the director has notified the conservation district of the decision, the determination that the district's plan is consistent with the management goal of the active management area shall expire. END_STATUTE

Sec. 4. Section 45-802.01, Arizona Revised Statutes, as amended by Laws 2012, chapter 312, section 2, is amended to read:

START_STATUTE45-802.01. Definitions

Unless the context otherwise requires, the terms defined in section 45‑402 have the same meanings in this chapter and:

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

2. "Area of impact" means, as projected on the land surface, the area where the stored water has migrated or is located.

3. "CERCLA" means the comprehensive environmental response, compensation, and liability act of 1980, as amended (P.L. 96‑510; 94 Stat. 2767; 42 United States Code sections 9601 through 9657), commonly known as "superfund".

4. "Constructed underground storage facility" means a facility that meets the requirements of section 45‑811.01 and that is designed and constructed to store water underground pursuant to permits issued under this chapter.

5. "District" means a groundwater replenishment district established under title 48, chapter 27.

6. "District member" means a member of the groundwater replenishment district as provided by title 48, chapter 27.

7. "Electrical district" means a corporate body established pursuant to title 48, chapter 12.

8. "Groundwater savings facility" means a facility that meets the requirements of section 45‑812.01 in an active management area or an irrigation non‑expansion area at which groundwater withdrawals are eliminated or reduced by recipients who use in lieu water on a gallon‑for‑gallon substitute basis for groundwater that otherwise would have been pumped from within that active management area or irrigation non‑expansion area.

9. "In lieu water" means water that is delivered by a storer to a groundwater savings facility pursuant to permits issued under this chapter and that is used in an active management area or an irrigation non‑expansion area by the recipient on a gallon‑for‑gallon substitute basis for groundwater that otherwise would have been pumped from within that active management area or irrigation non‑expansion area.

10. "Long‑term storage account" means an account established pursuant to section 45‑852.01.

11. "Long‑term storage credit" means stored water that meets the requirements of section 45‑852.01 and that has been credited to a long‑term storage account.

12. "Managed underground storage facility" means a facility that meets the requirements of section 45‑811.01 and that is designed and managed to utilize the natural channel of a stream to store water underground pursuant to permits issued under this chapter through artificial and controlled releases of water other than surface water naturally present in the stream. Surface water flowing in its natural channel is not a managed underground storage facility.

13. "Master replenishment account" means an account established pursuant to section 45‑858.01 for a groundwater replenishment district.

14. "Recipient" means a person who receives in lieu water for use at a groundwater savings facility.

15. "Recoverable amount" means the amount of water, as determined by the director, that will reach the aquifer through water storage.

16. "Replenishment" means the storage of water or use of long‑term storage credits by a groundwater replenishment district to fulfill its duties under title 48, chapter 27, article 3, by a multi‑county water conservation district to fulfill its duties under title 48, chapter 22, article 4 or by an active management area water district to fulfill its duties under title 48, chapter 28, article 7.

17. "Reserve target" has the same meaning prescribed in section 48‑3701.

18. "Storage facility" means a groundwater savings facility or an underground storage facility.

19. "Stored water" means water that has been stored or saved underground pursuant to a storage permit issued under this chapter.

20. "Storer" means the holder of a water storage permit issued pursuant to section 45‑831.01 or a person to whom a water storage permit has been conveyed pursuant to section 45‑831.01, subsection F.

21. "Underground storage facility" means a constructed underground storage facility or a managed underground storage facility.

22. "Water that cannot reasonably be used directly" means water that the storer cannot reasonably put to a direct use during the calendar year, including:

(a) Except as provided in subdivision (b) or except for an agricultural improvement district as provided in subdivision (d), if the storer is a municipal provider, the amount of central Arizona project water that exceeds the amount of mined groundwater withdrawn during the calendar year by the storer in the active management area in which the storer's service area is located. If the storer withdrew mined groundwater during a calendar year in which the storer stored central Arizona project water underground pursuant to the storage permit, the amount of central Arizona project water stored underground during that year equal to the amount of mined groundwater withdrawn from the active management area in which the storer's service area is located shall not be credited to the storer's long‑term storage account but may be considered as being available for recovery by the storer on an annual basis under section 45‑851.01. In calculating the amount of mined groundwater withdrawn by the storer from the active management area, the director, at the request of the storer, shall exclude any groundwater withdrawn, treated and delivered for direct use as part of a remedial action undertaken pursuant to CERCLA or title 49, chapter 2, article 5. For the purposes of this subdivision, "mined groundwater" and "municipal provider" have the same meanings prescribed in section 45‑561.

(b) If the storer is a municipal provider that has been designated as having an assured water supply pursuant to section 45‑576, the amount of central Arizona project water that exceeds the amount of deficit groundwater withdrawn during the calendar year by the storer in the active management area in which the storer's service area is located. If the storer withdrew deficit groundwater during a calendar year in which the storer stored central Arizona project water underground pursuant to the storage permit, the amount of the central Arizona project water stored underground during that year equal to the amount of deficit groundwater withdrawn from the active management area in which the storer's service area is located shall not be credited to the storer's long‑term storage account but may be considered as being available for recovery by the storer on an annual basis pursuant to section 45‑851.01. In calculating the amount of deficit groundwater withdrawn by the storer from the active management area, the director, at the request of the storer, shall exclude any groundwater withdrawn, treated and delivered for direct use as part of a remedial action undertaken pursuant to CERCLA or title 49, chapter 2, article 5. For the purposes of this subdivision, "municipal provider" has the same meaning prescribed in section 45‑561 and "deficit groundwater" means that amount of groundwater withdrawn within an active management area for delivery and use within a service area by a municipal provider in excess of the amount of groundwater that may be withdrawn by the municipal provider consistent with the achievement of the active management area's management goals as prescribed by rules adopted by the director pursuant to section 45‑576.

(c) Except as provided in subdivision (d), if the storer is not a municipal provider, the amount of central Arizona project water stored in an active management area that exceeds the amount of groundwater withdrawn during the calendar year by the storer in that active management area. If the storer withdrew groundwater in an active management area during a calendar year in which the storer stored central Arizona project water underground in that active management area pursuant to the storage permit, the amount of central Arizona project water stored underground during that year equal to the amount of groundwater withdrawn from the active management area shall not be credited to the storer's long‑term storage account but may be considered as being available for recovery by the storer on an annual basis under section 45‑851.01. For the purposes of this subdivision, "municipal provider" has the same meaning prescribed in section 45‑561. In calculating the amount of groundwater withdrawn by the storer from the active management area, the director, at the request of the storer, shall exclude:

(i) The amount of groundwater withdrawn, treated and delivered for direct use as part of a remedial action undertaken pursuant to CERCLA or title 49, chapter 2, article 5.

(ii) The amount of groundwater withdrawn by the storer during the year for mineral extraction and metallurgical processing and delivered during that year for direct use to an irrigation district that is established pursuant to title 48, chapter 19 and that is located in the same active management area from which the amount of groundwater was withdrawn to the extent that the irrigation district or its customers demonstrate a reduction in the amount of groundwater that they otherwise would have withdrawn during that year within the irrigation district.

(iii) The amount of groundwater withdrawn by the storer during the year for mineral extraction or metallurgical processing if the storer was engaged in mineral extraction and metallurgical processing within an initial active management area on or before January 1, 2011.

(d) The amount of central Arizona project water stored in an active management area in any year after 1994 by an agricultural improvement district established pursuant to title 48, chapter 17 for use at those portions of electrical generating facilities that are constructed or expanded after June 12, 1980, subject to both of the following:

(i) If groundwater was used during a year in an active management area at those portions of the electrical generating facilities that were owned and operated by the agricultural improvement district and that were constructed or expanded after June 12, 1980, the amount of the central Arizona project water stored during that year equal to the amount of the groundwater withdrawn during the year for use at those portions of the facilities that were owned and operated by the agricultural improvement district and that were constructed or expanded after June 12, 1980 shall not be credited to the agricultural improvement district's long‑term storage account but may be considered as being available for recovery by the agricultural improvement district on an annual basis under section 45‑851.01.

(ii) Long‑term storage credits accrued as a result of the storage of the central Arizona project water may be recovered within the active management area by the agricultural improvement district only for the purpose of providing central Arizona project water to electrical generating facilities that were owned and operated by the agricultural improvement district and only pursuant to any water requirement included in a facility's certificate of environmental compatibility. Subject to section 45‑854.01, the long‑term storage credits may be assigned by the agricultural improvement district only to the owner of an electrical generating facility for use pursuant to any water requirement included in that facility's certificate of environmental compatibility.

(e) Surface water made available by dams constructed or modified after August 13, 1986.

(f) Effluent.

(f) (g) Until the year 2025:

(i) Effluent.

(ii) (i) If the storage facility is in an active management area, water from outside the active management area that would not have reached the active management area without the efforts of the storer.

(iii) (ii) If the storage facility is outside of an active management area, water from outside the groundwater basin in which the storage facility is located that would not have reached the groundwater basin without the efforts of the storer.

(g) (h) Water that is delivered through the central Arizona project and that is acquired by the Arizona water banking authority.

23. "Water storage" means adding water to an aquifer or saving water in an aquifer pursuant to permits issued under this chapter.

24. "Water storage permit" means a permit issued pursuant to section 45‑831.01 to store water at a storage facility. END_STATUTE

Sec. 5. Section 45-802.01, Arizona Revised Statutes, as amended by Laws 2013, chapter 168, section 4, is amended to read: