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ARIZONA STATE SENATE
Fifty-Fourth Legislature, Second Regular Session
water banking; storage credits; subcontractors
Purpose
Allows the Arizona Water Banking Authority (AWBA) to distribute long-term storage credits (LTSCs) directly to the Central Arizona Water Conservation District's (CAWCD) municipal and industrial (M&I) subcontractors.
Background
The AWBA stores unused Colorado River water in the ground to be used in times of shortage. Storing the water underground firms M&I water supplies, helps fulfill Arizona's water management objectives and provides an opportunity to store water for the settlement of water rights claims by Indian communities (A.R.S § 45-2423).
The Director of the Arizona Department of Water Resources (ADWR) establishes a long‑term storage account for each holder of long-term storage credits, divided according to where water is stored for each Active Management Area (AMA), irrigation non-expansion area, groundwater basin or groundwater subbasin. Permitted stored water qualifies for a long-term storage credit if the water meets outlined criteria for eligibility (A.R.S § 45-852.01).
Laws 1971, Chapter 50 created CAWCD to manage the Central Arizona Project (CAP), repay the federal government for construction costs of the CAP and contract CAP water with the U.S. Secretary of Interior (P.L. 90-537). CAWCD levies an annual property tax in an amount determined by the CAWCD Board for CAP costs and an additional tax for water storage. The CAWCD Board determines the portion of the tax monies for repayment of CAP construction costs and excess monies are deposited into the Arizona Water Banking Fund to be used toward the purchase and storage of LTSCs for the benefit of the county. Current statue directs the AWBA to distribute credits purchased with excess CAWCD-levied tax monies to CAWCD to meet the demands of CAWCD's M&I subcontractors (A.R.S §§ 48-3715.02 48-3715.03).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Allows the AWBA to distribute LTSCs purchased with excess CAWCD-levied water storage tax monies to CAWCD M&I subcontractors.
2. Prohibits the sale of a LTSC that is distributed directly to a CAWCD M&I subcontractor.
3. Deems the CAWCD subcontractor that is distributed a LTSC responsible for the associated water banking fees and recovery costs.
4. Makes technical changes.
5. Becomes effective on the general effective date.
Prepared by Senate Research
February 4, 2020
KN/CDT/gs