ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fifth Legislature

Second Regular Session

Senate: FIN DP 8-1-1-0 | 3rd Read 26-3-1-0

House: NREW DPA/SE 8-4-0-0 | 3rd Read 43-13-3-1

Final Pass: 27-0-3-0

SB 1197: TPT; exemption; agricultural equipment.

NOW: irrigation districts; service area; WIFA

Sponsor: Senator Shope, LD 8

Transmitted to the Governor

Overview

Redefines service area for certain irrigation districts and allows these districts and water conservation districts to receive financial assistance from the Water Infrastructure Finance Authority (WIFA) to design, rehabilitate or improve water or wastewater infrastructure.

History

Irrigation Districts and the Drought Contingency Plan

An irrigation district is a special taxing district that owns and operates canals, reservoirs, wells and other infrastructure to divert, withdraw and distribute water to users within its boundaries (A.R.S. § 48-2901 et seq.) A district in an active management area (AMA) may withdraw and transport groundwater within its service area to landowners if it withdrew, delivered, and distributed groundwater as of January 1, 1977. These landowners can use the delivered groundwater if they have a grandfathered groundwater right (A.R.S. § 45-494(1)). For districts that did not withdraw, deliver and distribute groundwater when an AMA was designated, this service area includes:

· Member lands within the district that were legally irrigated anytime in the five years preceding the AMA's designation; and

· Any areas within the district that contained district-owned or -operated water infrastructure when the AMA was designated (A.R.S. § 45-402(32)).

The Legislature created the Temporary Groundwater and Irrigation Efficiency Projects Fund to implement part of the Drought Contingency Plan. It finances projects to build and rehabilitate wells and related infrastructure to withdraw and deliver groundwater for six irrigation districts in the Phoenix AMA and Pinal AMA (Laws 2019, Chapter 1, § 7). The increased groundwater pumping enabled by this infrastructure was designed to offset reductions to these districts' Central Arizona Project (CAP) deliveries as part of Arizona's required contributions to Lake Mead during declared shortages. In total, the Legislature appropriated $29 million to this fund, which was exempt from lapsing (Laws 2019, Ch. 1, §§ 16 and 20 and Laws 2019, Chapter 263, § 156). Any unencumbered fund monies will be proportionally distributed to the fund's contributors by December 31, 2027 (A.R.S. § 45-615.01).

Ak-Chin Indian Community Case

The Ak-Chin Indian Community (Community) is a federally recognized tribe that resides on a reservation in Pinal County. As part of its water rights settlements, the Community is entitled to an annual permanent supply of at least 75,000 acre-feet of higher priority water from the CAP suitable for agricultural use. Additionally, the United States agreed to design and build the infrastructure necessary to convey this water to the Community, which included the Santa Rosa Canal (P.L. 95-328 and P.L. 98-530).

In March 2020, the Community sued two neighboring irrigation districts, the Central Arizona Irrigation Drainage District and Maricopa-Stanfield Irrigation and Drainage District, in the U.S. District Court for the District of Arizona. It alleged that these districts pumped poorer quality groundwater that was ultimately discharged into the Santa Rosa Canal, where it commingled with the Community's CAP water and rendered it unsuitable for agricultural use (Case 2:20-cv-00489-JJT (D. Ariz.)). This case is ongoing.

Water Infrastructure Finance Authority

WIFA administers the Clean Water and Drinking Water State Revolving Funds which provide financial assistance through below-market rate loans, forgivable principal and technical assistance to Arizona’s communities. These funds primarily cover the construction, rehabilitation, and improvement of drinking water, wastewater, wastewater reclamation and other water quality facility projects (A.R.S. § 49-1221 et seq.). Irrigation districts may receive loans or other financial assistance from WIFA's Drinking Water State Revolving Fund to build, acquire or improve a drinking water facility. The loan repayment agreement may require the district to pay its share of expenses for administering this revolving fund and WIFA-approved financing and loan administration fees (A.R.S. § 48-3207).

Provisions

1.   Redefines, for a district that did not withdraw, deliver and distribute groundwater when an AMA was designated, the service area of an irrigation district to include lands that contain a system of district-owned or -operated canals, flumes, ditches and other works provided that no such additional lands may be included after December 31, 2027. (Sec. 1)

2.   Allows an irrigation or water conservation district to design, rehabilitate or improve water or wastewater infrastructure, related property and appurtenances or a nonpoint source project with monies borrowed or financial assistance provided from WIFA. (Sec. 2)

3.   ☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteMakes technical and conforming changes. (Sec. 1 and 2)

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7.                     SB 1197

8.   Initials PAB           Page 0 Transmitted

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