Second Regular Session S.B. 1171
PROPOSED
SENATE AMENDMENTS TO S.B. 1171
(Reference to printed bill)
Strike everything after the enacting clause and insert:
"Section 1. Section 45-514, Arizona Revised Statutes, is amended to read:
45-514. Mineral extraction and metallurgical processing permit; conditions for issuance; duration of permit
A. Except as provided in subsection D of this section, a person who is engaged in or proposes to engage in the extraction and processing of minerals shall be issued a permit to withdraw groundwater in the required amount, if all of the following apply:
1. The amount of groundwater available for mineral extraction, metallurgical processing and compliance with applicable environmental controls under a dewatering permit is insufficient.
2. Uncommitted municipal and industrial central Arizona project water is not available at the point where the operator's wellhead or distribution system would otherwise be, at a cost which does not exceed the current municipal and industrial central Arizona project delivery rates.
3. Other surface water of adequate quality or effluent of adequate quality is not available at the point where the operator's wellhead or distribution system would otherwise be, at a cost, including treatment costs, which does not exceed by twenty-five percent the cost the operator would otherwise incur in withdrawing groundwater.
4. The applicant does not own or lease type 2 non-irrigation grandfathered rights originally based on withdrawals of groundwater for the extraction or processing of minerals that the applicant is not using or leasing and that can be used at the proposed location without imposing an unreasonable economic burden on the applicant.
B. A permit issued pursuant to this section shall be granted for a period of up to fifty years, subject to renewal under the same criteria used in granting the original permit.
C. If, during the duration of a mineral extraction and metallurgical processing permit, the director determines that uncommitted municipal and industrial central Arizona project water is available or surface water of adequate quality or effluent of adequate quality is available to the permittee at a cost comparable to groundwater, the director may require the permittee to use such water in lieu of groundwater.
D. 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, and except for an application to renew a mineral extraction and metallurgical processing permit, on receiving a permit application the director shall not issue a permit for a well in the district unless at the time the application is filed:
1. The director has determined that the district's plan for operation is consistent with achieving the management goal, according to section 45-576.03, subsection E, and the designation has not expired.
2. The master replenishment account, as established in section 45-858.01, does not have a debit balance in an amount in excess of the amount allowed under section 45-576.01, subsection A, paragraph 3.
E. If, during the duration of a mineral extraction and metallurgical processing permit issued after the effective date of this amendment to this section, the permittee earns long-term storage credits under section 45-852.01, subsection B for the storage of central Arizona project water in the active management area in which the permittee has the right to withdraw groundwater pursuant to the permit, and the central Arizona project water qualified as water that cannot reasonably be used directly due solely to the exclusion of groundwater withdrawn by the permittee for mineral extraction or metallurgical processing pursuant to section 45-802.01, paragraph 23 24, subdivision (c), the director shall establish a separate subaccount for those credits pursuant to section 45-852.01, subsection A. After each calendar year in which the permit is in effect, the director shall debit the subaccount by the amount of groundwater pumped by the permittee in the active management area during that calendar year pursuant to the permit, not to exceed the amount of long-term storage credits in the subaccount. This subsection shall not apply to:
1. A mineral extraction and metallurgical processing permit issued on or before the effective date of this amendment to this section, including any renewal or modification of the permit.
2. A mineral extraction and metallurgical processing permit unless the permittee was engaged in mineral extraction and metallurgical processing within an initial active management area on or before January 1, 2011.
Sec. 2. Section 45-802.01, Arizona Revised Statutes, as amended by Laws 2019, chapter 1, section 9, is amended to read:
45-802.01. 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. "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. "treated process water" means groundwater that is used for a nonirrigation use in a facility that manufactures food and beverage products and subsequently is treated at the site of use for storage pursuant to this chapter.
22. 23. "Underground storage facility" means a constructed underground storage facility or a managed underground storage facility.
23. 24. "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 (j) of this paragraph or except for an agricultural improvement district as provided in subdivision (d) of this paragraph, 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) of this paragraph, 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.
(j) treated process water.
24. 25. "Water storage" means adding water to an aquifer or saving water in an aquifer pursuant to permits issued under this chapter.
25. 26. "Water storage permit" means a permit issued pursuant to section 45-831.01 to store water at a storage facility.
Sec. 3. Section 45-802.01, Arizona Revised Statutes, as amended by Laws 2019, chapter 1, section 10, is amended to read:
45-802.01. 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. "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. "treated process water" means groundwater that is used for a nonirrigation use in a facility that manufactures food and beverage products and subsequently is treated at the site of use for storage pursuant to this chapter.
22. 23. "Underground storage facility" means a constructed underground storage facility or a managed underground storage facility.
23. 24. "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 (j) of this paragraph or except for an agricultural improvement district as provided in subdivision (d) of this paragraph, 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) of this paragraph, 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 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.
(ii) 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.
(j) treated process water.
24. 25. "Water storage" means adding water to an aquifer or saving water in an aquifer pursuant to permits issued under this chapter.
25. 26. "Water storage permit" means a permit issued pursuant to section 45-831.01 to store water at a storage facility.
Sec. 4. Section 45-832.01, Arizona Revised Statutes, is amended to read:
45-832.01. Use of stored water
A. Except as provided in subsection C of this section, water that has been stored pursuant to a water storage permit may be used or exchanged only in the manner in which it was permissible to use or exchange the water before it was stored.
B. Except as provided in subsection C of this section, water that has been stored pursuant to a water storage permit may be used only in the location in which it was permissible to use the water before it was stored.
c. Treated process water that has been stored pursuant to a water storage PERMIT MAY be used or exchanged by the storer, or an affiliate or successor of the storer, for nonirrigation use within the same groundwater subbasin in which the water was stored.
C. D. Water that has been stored pursuant to a water storage permit may be used for replenishment purposes only in the active management area in which the water is stored, unless the water is recovered and transported to another active management area.
D. E. Stored water may be used only as follows:
1. The water may be recovered by the storer and used on an annual basis in accordance with section 45-851.01.
2. The water may be credited to the storer's long-term storage account, if the water meets the requirements of section 45-852.01, and the long-term storage credits may be used in accordance with the provisions of this chapter.
3. A district that is storing water may have the stored water credited to its master replenishment account, if the water would meet the requirements of long-term storage credits as prescribed by section 45-852.01.
4. A conservation district that is storing water may have the stored water credited to its conservation district account, if the water would meet the requirements of long-term storage credits as prescribed by section 45-852.01.
5. A water district that is storing water may have the stored water credited to its water district account, if the water would meet the requirements of long-term storage credits as prescribed by section 45-852.01.
Sec. 5. Section 45-852.01, Arizona Revised Statutes, is amended to read:
45-852.01. Long-term storage accounts
A. The director shall establish one long-term storage account for each person holding long-term storage credits. The director shall establish subaccounts within the long-term storage account according to each active management area, irrigation non-expansion area, groundwater basin or groundwater subbasin in which the person's stored water is located. The long-term storage account shall be further subdivided by type of water, if the person holds long-term storage credits for more than one type of water.
B. Water stored pursuant to a water storage permit at a storage facility may be credited to a long-term storage account if the director determines that all of the following apply:
1. Either:
(a) The water that was stored was water that cannot reasonably be used directly.
(b) The water was stored in a groundwater savings facility located in an active management area that does not have a management goal of achieving or maintaining a safe yield condition, the water was stored between January 1, 2020 and December 31, 2026 and the director determines that the storage assists in implementing within this state a drought contingency plan for the lower basin of the Colorado River. The total maximum amount that may qualify under this subdivision is fifteen thousand acre-feet per year.
2. If the stored water was stored at a storage facility within an active management area, either:
(a) The water would not have been naturally recharged within the active management area.
(b) If the water was stored at a managed underground storage facility that has been designated as a facility that could add value to a national park, national monument or state park and the water stored is effluent, the water stored is water that could have been used or disposed of by the storer by means other than discharging the effluent into the stream.
3. The stored water was not recovered on an annual basis pursuant to section 45-851.01.
C. The director shall credit ninety-five percent of the recoverable amount of stored water that meets the requirements of subsection B of this section to the storer's long-term storage account, except that:
1. If the water was stored at a managed underground storage facility that does not qualify as an existing effluent managed underground storage facility and that had not been designated at the time of storage as a facility that could add value to a national park, national monument or state park and the water stored is effluent, the director shall credit to the storer's long-term storage account fifty percent of the recoverable amount of water that meets the requirements of subsection B of this section. For storage of effluent in a managed underground storage facility that is located in a recreational corridor channelization district established pursuant to title 48, chapter 35, the director may increase the storage credits earned from fifty percent to ninety-five percent if both of the following apply:
(a) The effluent was not discharged into the stream where the facility is located before the permit application for that facility was filed.
(b) The director determines that the storage of effluent in the facility will provide a greater benefit to aquifer conditions in the active management area or, if outside an active management area, to the groundwater basin than would accrue to the active management area or groundwater basin if the effluent is used or disposed of in another manner.
2. If the water was stored at a groundwater savings facility and the storer has not met the burden of proving that one hundred percent of the in lieu water was used on a gallon-for-gallon substitute basis for groundwater, the director shall credit to the storer's long-term storage account only the percentage of the in lieu water that meets the requirements of subsection B of this section and that was proven to the director's satisfaction as being used on a gallon-for-gallon substitute basis for groundwater.
3. The director shall credit to the storer's long-term storage account ninety percent of the recoverable amount of the water that meets the requirements of subsection B of this section if all of the following apply:
(a) The stored water was central Arizona project water that qualifies as water that cannot reasonably be used directly due solely to the exclusion of groundwater withdrawn by the storer for mineral extraction or metallurgical processing under section 45-802.01, paragraph 23 24, subdivision (c).
(b) The storer was engaged in mineral extraction and metallurgical processing within an initial active management area on or before January 1, 2011.
(c) All exterior boundaries of the storage facility that is used to store the stored water are more than twenty miles from a well owned by the storer on January 1, 2012 and that well is not an exempt well and any one or more of the following apply:
(i) The well is an existing well as defined in section 45-591, paragraph 1.
(ii) The department has issued a permit for the well under section 45-599, subsection C.
(iii) The well was drilled pursuant to a mineral extraction and metallurgical processing permit issued by the department under section 45-514.
4. Except as otherwise provided in paragraph 2 of this subsection, the director shall credit to the storer's long-term storage account or conservation district account one hundred percent of the recoverable amount of water that meets the requirements of subsection B of this section if any of the following applies:
(a) The water stored was effluent that was stored at a constructed underground storage facility, a groundwater savings facility or a managed underground storage facility that was designated at the time of storage as a facility that could add value to a national park, national monument or state park.
(b) The water was stored in an active management area and the stored water is water from outside the active management area that would not have reached the active management area without the efforts of the holder of the long-term storage credits.
(c) The water was stored outside an active management area and the stored water is water from outside the groundwater basin in which the water was stored that would not have reached the groundwater basin without the efforts of the holder of the long-term storage credits.
(d) The water was stored for purposes of establishing and maintaining a replenishment reserve pursuant to section 48-3772, subsection E.
(e) The water was stored for replenishment purposes pursuant to section 48-3771 and credited directly to a conservation district account pursuant to section 45-859.01, subsection E.
D. The director shall credit a person's long-term storage account by the amount of long-term storage credits assigned to that person by another holder of long-term storage credits pursuant to section 45-854.01.
E. The director shall debit the appropriate subaccount of a person's long-term storage account:
1. One hundred percent of the amount of stored water that the holder of the long-term storage credits has recovered during the calendar year pursuant to the permit.
2. The amount of long-term storage credits that the person has assigned to another person or transferred to a master replenishment account, conservation district account or water district account.
3. If the water was stored in an active management area, the amount of water during the calendar year that migrates to a location outside the active management area or to a location within the active management area where it cannot be beneficially used within a reasonable period of time by persons other than the storer with rights to withdraw and use groundwater.
4. If the water was stored outside of an active management area, the amount of water during the calendar year that migrates to a location outside the groundwater basin in which the storage facility is located or to a location in the groundwater basin where it cannot be beneficially used within a reasonable period of time by persons other than the storer with rights to withdraw and use groundwater.
5. The amount of long-term storage credits that the storer, pursuant to section 45-853.01, subsection B, has applied to offset groundwater withdrawn or used in excess of the storer's per capita municipal conservation requirements under the second management plan.
6. The amount of long-term storage credits that are held by the Arizona water banking authority and that the authority has chosen to extinguish.
F. To the extent the total amount of water withdrawn by a person from wells designated as recovery wells pursuant to section 45-834.01 during a calendar year exceeds the amount of stored water recovered by the person on an annual basis pursuant to section 45-851.01 and the amount of long-term storage credits recovered by the person, the excess amount of water recovered shall be considered groundwater withdrawn pursuant to chapter 2 of this title.
Sec. 6. Section 45-854.01, Arizona Revised Statutes, is amended to read:
45-854.01. Assignability of long-term storage credits
A. Except as provided in subsection D of this section and section 45-855.01, subsection C, the holder of long-term storage credits may assign by grant, gift, sale, lease or exchange all or part of the holder's long-term storage credits.
B. Except as provided in subsection C of this section, an assignment of long-term storage credits from one person to another is valid on receipt by the director of notification of the assignment in writing on a form that is provided by the director and that has been signed by both the assignor and assignee.
C. The director may reject and invalidate any assignment of long-term storage credits in which the stored water would not have met the requirements for long-term storage credits as prescribed by section 45-852.01 if the assignee had stored the water.
D. Long-term storage credits created through the storage of treated process water MAY only be assigned to an affiliate or successor of the storer of that treated process water.
Sec. 7. Effective date
Section 45-802.01, Arizona Revised Statutes, as amended by Laws 2019, chapter 1, section 10 and this act, is effective from and after December 31, 2024."
Amend title to conform