HB2549 - 552R

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

Section 1. Section 45-468, Arizona Revised Statutes, is amended to read:

START_STATUTE45-468. Accounting of water by persons delivering a combination of surface water and groundwater for irrigation uses

A. A person delivering a combination of surface water or effluent, or both, and groundwater for irrigation uses shall prior to before the beginning of each accounting period estimate the amount of groundwater that will be withdrawn and delivered during the next accounting period and shall make such the estimate available to the director. The estimate may be modified from time to time as conditions warrant.

B. Within ninety days following the end of each accounting period a person who delivers a combination of surface water or effluent, or both, and groundwater for uses by cities, towns, private water companies, industries, farms or other users shall provide the director with an accounting for water during the past accounting period which that shows the following:

1. All surface water provided to each class of user and each farm user authorized to withdraw groundwater.

2. All groundwater provided to each class of user and each farm user authorized to withdraw groundwater.

3. All effluent provided to each class of user and each farm user authorized to withdraw groundwater.

C. If a water provider or any other person delivers water to a user through a delivery system that commingles groundwater with surface water or effluent, or both, the amount of groundwater charged to the user pursuant to the accounting in subsection B of this section shall be computed as follows:

1. Determine the total amount of water delivered to the user through the system during the accounting period.

2. Determine the amount of surface water and effluent that would have been delivered to the user through the system during the accounting period if no groundwater had been delivered through the system.

3. Subtract the amount determined pursuant to paragraph 2 from the amount determined pursuant to paragraph 1.

D. This section does not change the applicability, if any, of groundwater conservation rules to water supplies that physically contain groundwater.END_STATUTE

Sec. 2. 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 the purposes of determining the physical availability of groundwater to be withdrawn through future wells for all assured water supply determinations, the director shall assume that:

1. The service area of a water provider that is a city or town is coterminous with the city or town boundaries.

2. The service area of a water provider that is an improvement district formed pursuant to title 48 is coterminous with its district boundaries.

3. The service area of a water provider that is a private water company regulated by the corporation commission is coterminous with its certificate of convenience and necessity boundaries.

L. M. 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.

(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.

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. 3. Section 45-576.08, Arizona Revised Statutes, is amended to read:

START_STATUTE45-576.08. Pinal active management area; assured water supply; physical availability; definitions

A. All of the following apply in the Pinal active management area for an application to modify a designation of assured water supply:

1. If the total volume of groundwater and stored water to be recovered outside the area of impact of storage sought to be included in the designation does not exceed the total volume of those sources of water included in the previous designation minus the sum of the volume of groundwater actually withdrawn and the volume of stored water recovered outside the area of impact of storage by the applicant since issuance of the previous designation order:

(a) The director shall not review the physical availability of the groundwater and stored water to be recovered outside of the area of impact of storage sought to be included in the designation.

(b) The physical availability of the groundwater and stored water to be recovered outside the area of impact of storage sought to be included in the designation shall not be grounds for an objection.

2. Paragraph 1 of this subsection shall not affect the director's review of assured water supply criteria other than the physical availability of groundwater and stored water to be recovered outside the area of impact of storage.

3. Both of the following are deemed physically available for purposes of an assured water supply designation:

(a) Stored water that is to be recovered by the applicant within the area of impact of storage pursuant to existing long-term storage credits pledged to the designation of assured water supply.

(b) Stored water that is to be recovered by the applicant within the area of impact of storage either on an annual basis pursuant to section 45-851.01 or as long-term storage credits to be earned in the future if the water to be stored meets the physical availability requirements for the water supply under rules adopted pursuant to section 45-576, subsection H.

B. For the purposes of this section:

1. "Area of impact of storage" means any of the following:

(a) Within one mile of an existing or proposed underground storage facility where the water to be recovered is or will be stored.

(b) Within the district boundaries of an irrigation district that has a permit for a groundwater savings facility and where the water to be recovered is or will be stored.

(c) An area not described in subdivision (a) or (b) of this paragraph that has been shown to have been positively impacted by the storage of the water to be recovered as demonstrated by a hydrologic model approved by the director has the same meaning as area of impact defined in section 45-802.01.

2. "Long-term storage credit" has the same meaning prescribed in section 45-802.01.

3. "Stored water" has the same meaning prescribed in section 45-802.01. END_STATUTE

Sec. 4. Title 45, chapter 2, article 9, Arizona Revised Statutes, is amended by adding section 45-576.10, to read:

START_STATUTE45-576.10. Certificates of assured water supply; nonlocal groundwater; water from outside active management area

For an application for a certificate of assured water supply that proposes to use a water supply other than groundwater withdrawn from within the active management area in which the proposed development is located, All of the following apply:

1. The proposed source shall be deemed consistent with the goal of the active management area.

2. If the proposed source is stored water recovered within the area of impact as defined in section 45-802.01, the proposed source shall be deemed physically available and the director shall not review the physical availability of other sources of water served by the MUNICIPAL PROVIDER or included in an issued certificate of assured water supply or designation of assured water supply in the active management area.

3. If a municipal PROVIDER proposes to use a source of water prescribed by this section in the same water system with central arizona project water, surface water, effluent or groundwater, the proposed source does not affect the continuous, legal and physical availability of the proposed source, without regard to the continuous, legal and physical availability of other supplies within the same municipal provider's water system, including groundwater withdrawn within the active MANAGEMENT area in which the proposed CERTIFICATE of assured water supply is located.END_STATUTE

Sec. 5. Section 45-802.01, Arizona Revised Statutes, as amended by Laws 2019, chapter 1, section 9, 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 any of the following:

(a) The area within one mile of an existing or proposed underground storage facility where the water to be recovered is or will be stored.

(b) The area within one mile of the district boundaries or within the district boundaries of an irrigation district that has a permit for a groundwater savings facility and where the water to be recovered is or will be stored.

(c) Any area that is not described in subdivision (a) or (b) of this paragraph and that has been shown to have been positively impacted by the storage of the water to be recovered as demonstrated by a hydrologic model approved by the director.

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. "Existing effluent managed underground storage facility" means a managed underground storage facility that meets one of the following conditions:

(a) The facility is operated pursuant to a storage facility permit that the director issued before January 1, 2019 and that authorizes the storage of effluent at the facility.

(b) The facility is operated pursuant to a renewed or modified storage facility permit that the director issued after January 1, 2019 if the facility qualified as an existing effluent managed underground storage facility under subdivision (a), (c) or (d) of this paragraph at any time before the renewal or modification.

(c) The facility is operated pursuant to a permit that the director issued after January 1, 2019 and that authorizes the storage of effluent at a location where the permit holder was authorized to store effluent pursuant to a storage facility permit that the director issued before January 1, 2019.

(d) The facility is operated pursuant to a permit that the director issued after January 1, 2019 and that authorizes the storage of effluent at the facility, and the application to operate the facility was on file with the director as of January 1, 2019.

9. "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.

10. "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.

11. "Long-term storage account" means an account established pursuant to section 45-852.01.

12. "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.

13. "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.

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

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

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

17. "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.

18. "Reserve target" has the same meaning prescribed in section 48-3701.

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

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

21. "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.

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

23. "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.

(g) 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.

(h) 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.

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

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

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

Sec. 6. Section 45-802.01, Arizona Revised Statutes, as amended by Laws 2019, chapter 1, section 10, is amended to read: