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ARIZONA STATE SENATE
Fifty-Fifth Legislature, First 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 LTSCs, divided according to where water is stored for each Active Management Area, 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).
In 1971, the Legislature 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 directly to CAWCD M&I subcontractors.
2. Prohibits the sale of LTSCs distributed to CAWCD subcontractors and subjects the subcontractor to responsibility for all fees assessed by the AWBA or the Director of ADWR for LTSC distribution and recovery costs.
3. Becomes effective on the general effective date.
Prepared by Senate Research
January 14, 2021
KN/gs