HB2201 - 562R

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

Section 1. Section 11-321, Arizona Revised Statutes, is amended to read:

START_STATUTE11-321. Building permits; issuance; state preemption; utilities; distribution of copies; ownership interests; applicability; subsequent owner; limitation; definition

A. Except in those cities and towns that have an ordinance relating to the issuance of building permits, the board of supervisors shall require a building permit for any construction of a building or an addition to a building exceeding a cost of $1,000 within its jurisdiction. The building permit shall be filed with the board of supervisors or its designated agent.

B. The regulation of a utility provider's authority to operate and serve customers is a matter of statewide concern. The regulation of building permits as it relates to a building permit applicant's ability to use a utility provider that is capable and authorized to provide utility service is allowed solely in accordance with subsections C and D of this section. A building permit applicant's ability to use a utility provider that is capable and authorized to provide utility service is not subject to further regulation by a county.

C. A county may not deny a permit application based on the utility provider proposed to provide utility service to the project.

D. A county issuing a building permit shall ensure that all applicable permits and associated fees assessed on a building permit applicant contain requirements and amounts that do not exceed the requirements and amounts for use of other utility providers and do not have the effect of restricting a the permit applicant's ability to use the services of a utility provider that is capable and authorized to provide utility service.

E. The board of supervisors may not require an applicant for a building permit to hold a transaction privilege tax license or business license as a condition for issuing the building permit.

F. Where deemed of public convenience, the board of supervisors shall allow the application for and the issuance of building permits by mail.

G. One copy of the building permit required by the terms of subsection A of this section shall be transmitted to the county assessor and one copy shall be transmitted to the director of the department of revenue. The permit copy provided to the assessor and the department of revenue shall have the permit number, the issue date and the parcel number for which the permit is issued. On the issuance of the certificate of occupancy or the certificate of completion or on the expiration or cancellation of the permit, the assessor and the department of revenue shall be notified in writing or in electronic format of the permit number, parcel number, issue date and completion date.

H. At the time of applying for a building permit for new construction of a residential single-family home, an applicant must identify any ownership interests in the property that is the subject of the permit. This subsection does not apply if, at the time of applying for the building permit, the applicant provides a copy of the subdivision final plat that indicates an assured water supply and that is approved by the municipality where the parcels, lots or fractional interests of the proposed new construction exist.

H. I. If a person has constructed a building or an addition to a building without obtaining a building permit, a county shall not require a subsequent owner to obtain a permit for the construction or addition done by the prior owner before issuing a permit for a building addition, except that this section does not prohibit a county from enforcing an applicable ordinance or code provision that affects the public health or safety.

I. j. This section does not prohibit a county from recovering reasonable costs associated with reviewing and issuing a building permit.

J. k. This section does not affect any authority of a county to manage or operate a county-owned utility.

K. l. For the purposes of this section, "utility service" means water, wastewater, natural gas, including propane gas, or electric service provided to an end user. END_STATUTE

Sec. 2. Section 11-831, Arizona Revised Statutes, is amended to read:

START_STATUTE11-831. Review of land divisions; definitions

A. The board of supervisors of each county may adopt ordinances and regulations pursuant to this section for staff review and approval of land divisions of five or fewer lots, parcels or fractional interests, any of which is ten acres or smaller in size. The county may not deny approval of any land division that meets the requirements of this section. If a review of the request is not completed within thirty days after receiving the request, the land division is considered to be approved. At its option, the board of supervisors may submit a ballot question to the voters of the county to allow the voters to determine the application of subsections B and C of this section to qualifying land divisions in that county.

B. An application to split a parcel of land shall be approved if:

1. The lots, parcels or fractional interests each meet the minimum applicable county zoning requirements of the applicable zoning designation.

2. The applicant provides a standard preliminary title report or other acceptable document that demonstrates legal access to the lots, parcels or fractional interests.

3. The applicant provides a statement from a licensed surveyor or engineer, or other evidence acceptable to the county, stating whether each lot, parcel or fractional interest has physical access that is traversable by a two-wheel drive passenger motor vehicle.

4. The applicant reserves the necessary and appropriate utility easements to serve each lot, parcel or fractional interest created by the land division.

5. Except for an applicant that provides a plat of the lots, parcels or fractional interests that are the subject of the application, the applicant provides an answer on the application to the following questions:

(a) "Do you, or any corporation or limited liability company of which you are a member, manager or owner or for which you are an independent contractor, own or represent any property that is in the same tax parcel map or subdivision as the lots, parcels or fractional interests that are the subject of this application?"

(b) "Have you, or any corporation or limited liability company of which you are a member, manager or owner or for which you are an independent contractor, divided, sold or leased any property within the last ten years that is in the same tax parcel map or subdivision as the lots, parcels or fractional interests that are the subject of this application?"

5. 6. The applicant signs an affidavit or similar document under oath acknowledging the following:

(a) The applicant is aware that it is unlawful pursuant to subsection F H of this section and section 32-2181, subsection D for a person or group of persons to attempt to avoid these sections or the subdivision laws of this state by acting in concert to divide a parcel of land into six or more lots or parcels.

(b) The applicant is aware that the county where the land division occurred or the state real estate department may investigate and enforce the prohibition against acting in concert to unlawfully divide a parcel of land into six or more lots or parcels.

C. An application to split a parcel of land that does not comply with one or more of the items listed in subsection B of this section shall still be approved if the applicant provides an acknowledgment that is signed by the applicant and that confirms that a building or use permit will not be issued by the county until the lot, parcel or fractional interest has met the requirements of subsection B of this section. The county may grant a variance from one or more of the items listed in subsection B of this section.

D. Any approval of a land division under this section may:

1. Include the minimum statutory requirements for legal and physical on-site access that must be met as a condition to issuing a building or use permit for the lots, parcels or fractional interests.

2. Identify topographic, hydrologic or other site constraints, requirements or limitations that must be addressed as conditions to the eventual issuance of a building or use permit. These constraints, requirements or limitations may be as noted by the applicant or through county staff review, but there shall be no requirement for independent studies.

E. If the requirements of subsections A through D of this section do not apply, a county may adopt ordinances and regulations pursuant to this chapter for staff review of land divisions of five or fewer lots, parcels or fractional interests but only to determine compliance with minimum applicable county zoning requirements and legal access and may grant waivers from the county zoning and legal access requirements. The county may not deny approval of any land division that meets the requirements of this section or if the deficiencies are noticed in the deed. A county may not require a public hearing on a request to divide five or fewer lots, parcels or fractional interests. If a review of the request is not completed within thirty days after receipt of the request, the land division shall be deemed approved. If legal access is not available, the legal access does not allow access by emergency vehicles or the county zoning requirements are not met, the access or zoning deficiencies shall be noticed in the deed. If a county by ordinance requires a legal access of more than twenty-four feet roadway width, the county is responsible for the improvement and maintenance of the improvement. If the legal access does not allow access to the lots, parcels or fractional interests by emergency vehicles, neither the county nor its agents or employees are liable for damages resulting from the failure of emergency vehicles to reach the lot, parcel or fractional interest.

f. When applying FOR A LAND DIVISION, AN APPLICANT shall disclose ANY OWNERSHIP INTEREST IN THE PROPERTies that are the subject of the land division application.

G. AN APPLICATION FOR A LAND DIVISION shall INCLUDE THE FOLLOWING ATTESTATION LANGUAGE:

STATE LAW REQUIRES A SUBDIVIDER AS DEFINED IN SECTION 32-2101, Arizona Revised Statutes, TO OBTAIN A PUBLIC REPORT PURSUANT TO section 32-2183, Arizona Revised Statutes, before the sale or lease of six or more contiguous parcels, lots or fractional interests within the ten-year period following the land division. by submitting an application to divide land, the applicant and any ownership interests in the subject of the land division attest to their understanding of the public report requirements if intending to sell or lease six or more contiguous parcels, lots or fractional interests within a ten-year period following the land division and further attest to their intent to comply with the subdivision law of this state, as applicable.

If A PUBLIC REPORT IS REQUIRED PURSUANT TO SECTION 32-2183, Arizona Revised Statutes, AND a public report is NOT OBTAINED, the county where the properties are located or the state real estate department may enforce the public report requirement and issue a civil penalty pursuant to section 32-2185.09, arizona revised statutes.

F. H. It is unlawful for a person or group of persons acting in concert to attempt to avoid this section or the subdivision laws of this state by acting in concert to divide a parcel of land into six or more lots or sell or lease six or more lots by using a series of owners or conveyances. Either the county where the division occurred or the state real estate department pursuant to title 32, chapter 20, but not both, may enforce this prohibition. A familial relationship Any of the following alone is not sufficient to constitute unlawful acting in concert: .

1. A familial relationship.

2. A well share agreement.

3. A road maintenance agreement.

4. For a county with a population of less than five hundred thousand persons, the use of or referral to the same contractor who is licensed pursuant to title 32, chapter 10 or the same person who is registered pursuant to title 32, chapter 1.

G. I. For any subdivision that consists of ten or fewer lots, tracts or parcels, each of which is of a size as prescribed by the board of supervisors, the board of supervisors of each county may waive the requirement to prepare, submit and receive approval of a preliminary plat as a condition precedent to submitting a final plat and may waive or reduce infrastructure standards or requirements except for improved dust-controlled access and minimum drainage improvements.

H. J. For the purposes of this section:

1. "Legal access" means a public right of vehicular ingress and egress between the lots, parcels or fractional interests being created.

2. "Minimum applicable county zoning requirements" means the minimum acreage and dimensions of the resulting lot, parcel or fractional interest as required by the county's zoning ordinance.

3. "Utility easement" means an easement of eight feet in width dedicated to the general public to install, maintain and access sewer, electric, gas and water utilities. END_STATUTE

Sec. 3. Section 32-2181, Arizona Revised Statutes, is amended to read:

START_STATUTE32-2181. Notice to commissioner of intention to subdivide lands; unlawful acting in concert; exceptions; deed restrictions; definition

A. Before offering subdivided lands for sale or lease, the subdivider shall notify the commissioner in writing of the subdivider's intention. The notice shall contain:

1. The name and address of the owner. If the holder of any ownership interest in the land is other than an individual, such as a corporation, partnership or trust, the notice shall contain a statement naming the type of legal entity and listing the interest and the extent of any interest of each principal in the entity. For the purposes of this section, "principal" means any person or entity having a ten per cent percent or more financial interest or, if the legal entity is a trust, each beneficiary of the trust holding a ten per cent percent or more beneficial interest.

2. The name and address of the subdivider.

3. The legal description and area of the land.

4. A true statement of the condition of the title to the land, including all encumbrances on the land, and a statement of the provisions agreed to by the holder of any blanket encumbrance enabling a purchaser to acquire title to a lot or parcel free of the lien of the blanket encumbrance on completion of all payments and performance of all of the terms and provisions required to be made or performed by the purchaser under the real estate sales contract by which the purchaser has acquired the lot or parcel. The subdivider shall file copies of documents acceptable to the department containing these provisions with the commissioner before the sale of any subdivision lot or parcel subject to a blanket encumbrance.

5. The terms and conditions on which it is intended to dispose of the land, together with copies of any real estate sales contract, conveyance, lease, assignment or other instrument intended to be used, and any other information the owner or the owner's agent or subdivider desires to present.

6. A map of the subdivision that has been filed in the office of the county recorder in the county in which the subdivision is located.

7. A brief but comprehensive statement describing the land on and the locality in which the subdivision is located.

8. A statement of the provisions that have been made for permanent access and provisions, if any, for health department approved sewage and solid waste collection and disposal and public utilities in the proposed subdivision, including water, electricity, gas and telephone facilities.

9. A statement as to the location of the nearest public common and high schools available for the attendance of school age school-age pupils residing on the subdivision property.

10. A statement of the use or uses for which the proposed subdivision will be offered.

11. A statement of the provisions, if any, limiting the use or occupancy of the parcels in the subdivision, together with copies of any restrictive covenants affecting all or part of the subdivision.

12. The name and business address of the principal broker selling or leasing, within this state, lots or parcels in the subdivision.

13. A true statement of the approximate amount of indebtedness that is a lien on the subdivision or any part of the subdivision and that was incurred to pay for the construction of any on-site or off-site improvement, or any community or recreational facility.

14. A true statement or reasonable estimate, if applicable, of the amount of any indebtedness that has been or is proposed to be incurred by an existing or proposed special district, entity, taxing area or assessment district, within the boundaries of which the subdivision, or any part of the subdivision, is located, and that is to pay for the construction or installation of any improvement or to furnish community or recreational facilities to the subdivision, and which amounts are to be obtained by ad valorem tax or assessment, or by a special assessment or tax upon on the subdivision or any part of the subdivision.

15. A true statement as to the approximate amount of annual taxes, special assessments or fees to be paid by the buyer for the proposed annual maintenance of common facilities in the subdivision.

16. A statement of the provisions for easements for permanent access for irrigation water, where if applicable.

17. A true statement of assurances for the completion of off-site improvements, such as roads, utilities, community or recreational facilities and other improvements to be included in the offering or represented as being in the offering, and approval of the offering by the political subdivision with authority. This statement shall include a trust agreement or any other evidence of assurances for delivery of the improvements and a statement of the provisions, if any, for the continued maintenance of the improvements.

18. A true statement of the nature of any improvements to be installed by the subdivider, the estimated schedule for completion and the estimated costs related to the improvements that will be borne by purchasers of lots in the subdivision.

19. A true statement of the availability of sewage disposal facilities and other public utilities, including water, electricity, gas and telephone facilities in the subdivision, the estimated schedule for their installation, and the estimated costs related to the facilities and utilities that will be borne by purchasers of lots in the subdivision.

20. A true statement as to whether all or any portion of the subdivision is located in an open range or area in which livestock may roam at large under the laws of this state and what provisions, if any, have been made for the fencing of the subdivision to preclude livestock from roaming within the subdivided lands.

21. If the subdivider is a subsidiary corporation, a true statement identifying the parent corporation and any of the following in which the parent or any of its subsidiaries is or has been involved within the past five years:

(a) Any subdivision in this state.

(b) Any subdivision, wherever located, for which registration is required pursuant to the federal interstate land sales full disclosure act.

(c) Any subdivision, wherever located, for which registration would have been required pursuant to the federal interstate land sales full disclosure act but for the exemption for subdivisions whose lots are all twenty acres or more in size.

22. A true statement identifying all other subdivisions, designated in paragraph 21 of this subsection, in which any of the following is or, within the last five years, has been directly or indirectly involved:

(a) The holder of any ownership interest in the land.

(b) The subdivider.

23. A true statement as to whether all or any portion of the subdivision is located in territory in the vicinity of a military airport or ancillary military facility as defined in section 28-8461, in territory in the vicinity of a public airport as defined in section 28-8486, on or after July 1, 2001, in a high noise or accident potential zone as defined in section 28-8461 or on or after July 1 of the year in which the subdivision becomes located in a high noise or accident potential zone. The statement required pursuant to this paragraph does not require the amendment or refiling of any notice filed before July 1, 2001 or before July 1 of the year in which the subdivision becomes located in a high noise or accident potential zone.

24. If the subdivision is a conversion from multifamily rental to condominiums as defined in section 33-1202, a true statement as to the following:

(a) That the property is a conversion from multifamily rental to condominiums.

(b) The date original construction was completed.

25. Other information and documents and certifications as the commissioner may reasonably require, provided except that the subdivider shall not be required to disclose any critical infrastructure information as defined in section 41-1801 or any information contained in a report issued pursuant to section 41-4273.

B. The commissioner, on application, may grant a subdivider of lots or parcels within a subdivision for which a public report was previously issued by the commissioner an exemption from all or part of the notification requirements of subsection A of this section. The subdivider shall file a statement with the commissioner indicating the change of ownership in the lots or parcels together with any material changes occurring subsequent to the original approval of the subdivision within which the lots or parcels are located. The statement shall further refer to the original approval by the commissioner.

C. If the subdivision is within an active management area, as defined in section 45-402, the subdivider shall accompany the notice with a certificate of assured water supply issued by the director of water resources along with proof that all applicable fees have been paid pursuant to sections 48-3772 and 48-3774.01, 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 by the director of water resources pursuant to section 45-576 or is exempt from the requirement pursuant to section 45-576. If the subdivider has submitted a certificate of assured water supply to a city, town or county prior to before approval of the plat by the city, town or county and this has been noted on the face of the plat, the submission constitutes compliance with this subsection if the subdivider provides proof to the commissioner that all applicable fees have been paid pursuant to sections 48-3772 and 48-3774.01.

D. It is unlawful for a person or group of persons acting in concert to attempt to avoid this article by acting in concert to divide a parcel of land or sell subdivision lots by using a series of owners or conveyances or by any other method that ultimately results in the division of the lands into a subdivision or the sale of subdivided land. The plan or offering is subject to this article. Unlawful acting in concert pursuant to this subsection with respect to the sale or lease of subdivision lots requires proof that the real estate licensee or other licensed professional knew or with the exercise of reasonable diligence should have known that property which that the licensee listed or for which the licensee acted in any capacity as agent was subdivided land subject to this article. A familial relationship Any of the following alone is not sufficient to constitute unlawful acting in concert: .

1. A familial relationship.

2. A well share agreement.

3. A road maintenance agreement.

4. For a county with a population of less than five hundred thousand persons, the use of or referral to the same contractor who is licensed pursuant to chapter 10 of this title or the same person who is registered pursuant to chapter 1 of this title.

E. A creation of six or more lots, parcels or fractional interests in improved or unimproved land, lots or parcels of any size is subject to this article except when:

1. Each of the lots, parcels or fractional interests represents, on a partition basis, thirty-six acres or more in area of land located in this state, including to the centerline of dedicated roads or easements, if any, contiguous to the land in which the interests are held.

2. The lots, parcels or fractional interests are the result of a foreclosure sale, the exercise by a trustee under a deed of trust of a power of sale or the grant of a deed in lieu of foreclosure. This paragraph does not allow circumvention of the requirements of this article.

3. The lots, parcels or fractional interests are created by a valid order or decree of a court pursuant to and through compliance with title 12, chapter 8, article 7 or by operation of law. This paragraph does not allow circumvention of the requirements of this article.

4. The lots, parcels or fractional interests consist of interests in any oil, gas or mineral lease, permit, claim or right therein and such interests are regulated as securities by the United States or by this state.

5. The lots, parcels or fractional interests are registered as securities under the laws of the United States or the laws of this state or are exempt transactions under section 44-1844, 44-1845 or 44-1846.

6. The commissioner by special order exempts offerings or dispositions of any lots, parcels or fractional interests from compliance with this article on written petition and on a showing satisfactory to the commissioner that compliance is not essential to the public interest or for the protection of buyers. LOTS, PARCELS OR FRACTIONAL INTERESTS for which COMPLIANCE IS NOT ESSENTIAL TO THE PUBLIC INTEREST OR FOR THE PROTECTION OF BUYERS INCLUDE THOSE THAT HAVE BEEN INCLUDED WITH A PREVIOUS PUBLIC REPORT APPROVED WITHIN THE preceding ten YEARS in which the APPLICANT FOR AN EXEMPTION ATTESTS that THERE ARE NO MATERIAL CHANGES ALTERING THE FACTS OF THE PUBLIC REPORT.

7. A sale or lease of a lot, parcel or fractional interest occurs ten or more years after the sale or lease of another lot, parcel or fractional interest and the other lot, parcel or fractional interest is not subject to this article and is treated as an independent parcel unless, upon on investigation by the commissioner, there is evidence of intent to subdivide.

8. The lots, parcels or fractional interests are owned by a licensed financial institution in this state as a result of foreclosure and are being sold by or on behalf of the financial institution by a real estate licensee of this state if limited to those lots, parcels or fractional interests that have been included with a previous public report when the public report was approved within the preceding ten years and no material changes have occurred within the public report.

F. In areas outside of active management areas established pursuant to title 45, chapter 2, article 2:

1. If the subdivision is located in a county that has adopted the provision authorized by section 11-823, subsection A, or in a city or town that has enacted an ordinance pursuant to section 9-463.01, subsection O, the subdivider shall accompany the notice with a report issued by the director of water resources pursuant to section 45-108 stating that the subdivision has an adequate water supply, unless one of the following applies:

(a) The subdivider submitted the report to a city, town or county before approval of the plat by the city, town or county and this has been noted on the face of the plat.

(b) 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 adequate water supply by the director of water resources pursuant to section 45-108.

(c) The plat was approved pursuant to an exemption authorized by section 9-463.01, subsection K, pursuant to an exemption authorized by section 11-823, subsection B, paragraph 1, pursuant to an exemption granted by the director of water resources under section 45-108.02 and the exemption has not expired or pursuant to an exemption granted by the director under section 45-108.03. If the plat was approved pursuant to an authorized exemption, the state real estate commissioner shall require that all promotional material and contracts for the sale of lots in the subdivision adequately display the following:

(i) The director of water resources' report or the developer's brief summary of the report as approved by the commissioner on the proposed water supply for the subdivision.

(ii) A statement describing the exemption under which the subdivision was approved, including the specific conditions of the exemption that were met. If the plat was approved by the legislative body of a city or town pursuant to an exemption authorized by section 9-463.01, subsection K or by the board of supervisors of a county pursuant to an exemption authorized by section 11-823, subsection B, paragraph 1, the subdivider shall record the document required by section 33-406.

(d) The subdivision received final plat approval from the city, town or county before the requirement for an adequate water supply became effective in the city, town or county, and there have been no material changes to the plat since the final plat approval. If changes were made to the plat after the final plat approval, the director of water resources shall determine whether the changes are material pursuant to the rules adopted by the director to implement section 45-108. If this subdivision applies, the state real estate commissioner shall require that all promotional materials and contracts for the sale of lots in the subdivision adequately display the director of water resources' report or the developer's brief summary of the report as approved by the commissioner on the proposed water supply for the subdivision.

2. If the subdivision is not located in a county that has adopted the provision authorized by section 11-823, subsection A or in a city or town that has enacted an ordinance pursuant to section 9-463.01, subsection O, and if the director of water resources, pursuant to section 45-108, reports an inadequate on-site supply of water to meet the needs projected by the developer or if no water is available, the state real estate commissioner shall require that all promotional material and contracts for the sale of lots in subdivisions approved by the commissioner adequately display the director of water resources' report or the developer's brief summary of the report as approved by the commissioner on the proposed water supply for the subdivision.

G. The commissioner may require the subdivider to supplement the notice of intention to subdivide lands and may require the filing of periodic reports to update the information contained in the original notice of intention to subdivide lands.

H. The commissioner may authorize the subdivider to file as the notice of intention to subdivide lands, in lieu of some or all of the requirements of subsection A of this section, a copy of the statement of record filed with respect to the subdivision pursuant to the federal interstate land sales full disclosure act if the statement complies with the requirements of the act and the regulations pertinent to the act.

I. Neither A real estate sales contract, conveyance, lease, assignment or other instrument to transfer any interest in subdivided land nor and any covenant or restriction affecting real property shall not contain any provision limiting the right of any party to appear or testify in support of or opposition to zoning changes, building permits or any other official acts affecting real property before a governmental body or official considering zoning changes, building permits or any other official acts affecting real property, whether the property is located within or outside of the boundaries of the subdivision. All contractual provisions that conflict with this subsection are declared to be contrary to public policy. Nothing contained in This subsection shall does not prohibit private restrictions on the use of any real property.

J. Before offering subdivided lands for lease or sale, the subdivider who makes any promises through any form of advertising media that the subdivided lands will be exclusively a retirement community or one that is limited to the residency of adults or senior citizens shall include the promises in the deed restrictions affecting any interest in real property within the subdivided lands.

K. Except as otherwise provided in this section, a subdivider shall is not be required to disclose items that are over one mile from the subdivision boundaries. The existence of foreign nations or tribal lands shall also be disclosed if located within the one mile one-mile radius of the subdivision boundaries. END_STATUTE

Sec. 4. Section 32-2185.09, Arizona Revised Statutes, is amended to read:

START_STATUTE32-2185.09. Civil penalties; limitation

A. A subdivider or agent who that is subject to the jurisdiction of the department, who that violates this chapter or any rule adopted or order issued by the commissioner or who that engages in any unlawful practices defined in section 44-1522 with respect to the sale or lease of subdivided lands may be assessed a civil penalty by the commissioner, after a hearing, as follows:

1. In an amount not to exceed $2,000 for each infraction lot where a violation occurs if the subdivider or agent does not obtain a public report. An infraction that concerns more than one lot in a subdivision is a single infraction for the purposes of this section paragraph.

2. IF THE SUBDIVIDER OR AGENT OBTAINS A PUBLIC REPORT THAT IS SUBSEQUENTLY REVOKED AND AFTER THE REVOCATION COMMITS THE VIOLATION OR ENGAGES IN UNLAWFUL PRACTICES defined in section 44-1522 WITH RESPECT TO THE SALE OR LEASE OF SUBDIVIDED LANDS THAT ARE INCLUDED IN THE REVOKED PUBLIC REPORT, in an amount not to exceed $2,000 FOR EACH LOT THAT IS INCLUDED IN THE REVOKED PUBLIC REPORT WHERE A VIOLATION OCCURS.

B. A proceeding for imposition of to impose a civil penalty or for suspension to suspend or revocation of revoke a license for a violation of this article or any rule adopted or order issued by the commissioner must be commenced within five years of actual discovery by the department or discovery that should have occurred with the exercise of reasonable diligence by the department.

C. A subdivider who that sells or leases in this state any lots, parcels or fractional interest in a subdivision without first obtaining a public report from the commissioner except as provided in section 32-2181.01 or 32-2181.02 for a lot or lots created from and after December 31, 2008 and on an order issued by the commissioner may be assessed a civil penalty by the commissioner, after a hearing, in an amount not to exceed $5,000 for each infraction. A proceeding for the imposition of to impose a civil penalty or suspension to suspend or revocation of revoke a license for a violation of this subsection or any rule adopted or order issued by the commissioner must be commenced within five years after actual discovery by the department or discovery that should have occurred with the exercise of reasonable diligence by the department. END_STATUTE

Sec. 5. Section 33-422, Arizona Revised Statutes, as amended by Laws 2019, chapter 103, section 1 and chapter 131, section 1, is amended to read:

START_STATUTE33-422. Land divisions; recording; disclosure affidavit

A. A seller of five or fewer parcels of land, other than subdivided land, in an unincorporated area of a county and any subsequent seller of such a parcel shall complete and furnish a written affidavit of disclosure to the buyer at least seven days before the transfer of the property and the buyer shall acknowledge receipt of the affidavit.

B. The affidavit must be written in twelve-point type.

C. A release or waiver of a seller's liability arising out of any omission or misrepresentation contained in an affidavit of disclosure is not valid or binding on the buyer.

D. The buyer has the right to rescind the sales transaction for a period of five days after the affidavit of disclosure is furnished to the buyer.

E. The seller shall record the executed affidavit of disclosure at the same time that the deed is recorded. The county recorder is not required to verify the accuracy of any statement in the affidavit of disclosure. A subsequently recorded affidavit supersedes any previous affidavit.

F. The affidavit of disclosure shall contain all of the following DISCLOSURES, be completed by the seller, meet the requirements of section 11-480 and follow substantially the following form:

When recorded mail to:

__________________________

Affidavit of Disclosure

Pursuant to A.R.S. § 33-422

I, ______________________________________________ (seller(s)) being duly sworn, hereby make this affidavit of disclosure relating to the real property situated in the unincorporated area of:

_______________________, County, State of Arizona, located at:

______________________________________________________________

and legally described as:

(Legal description attached hereto as exhibit "A")

(property).

1. There ◻ is ◻ is not . . . . legal access to the property, as defined in A.R.S. § 11-831 . . . . ◻ unknown

Explain: ____________________________________________________

______________________________________________________________

2. There ◻ is ◻ is not . . . . physical access to the property. ◻ unknown

Explain: ____________________________________________________

______________________________________________________________

3. There ◻ is ◻ is not . . . . a statement from a licensed surveyor or engineer available stating whether the property has physical access that is traversable by a two-wheel drive passenger motor vehicle.

4. The legal and physical access to the property ◻ is ◻ is not . . . . the same....◻ unknown ◻ not applicable.

Explain: ____________________________________________________

______________________________________________________________

If access to the parcel is not traversable by emergency vehicles, the county and emergency service providers may not be held liable for any damages resulting from the inability to traverse the access to provide needed services.

5. The road(s) is/are ◻ publicly maintained ◻ privately maintained ◻ not maintained ◻ not applicable. If applicable, there ◻ is ◻ is not . . . . a recorded road maintenance agreement.

If the roads are not publicly maintained, it is the responsibility of the property owner(s) to maintain the roads and roads that are not improved to county standards and accepted for maintenance are not the county's responsibility.

6. A portion or all of the property ◻ is ◻ is not . . . . located in a FEMA designated regulatory floodplain. If the property is in a floodplain, it may be subject to floodplain regulation.

7. The property ◻ is ◻ is not subject to ◻ fissures or ◻ expansive soils. ◻ unknown

Explain: ____________________________________________________

______________________________________________________________

8. The following services are currently provided to the property: ◻ water ◻ sewer ◻ electric ◻ natural gas ◻ single party telephone ◻ cable television services.

9. The property ◻ is ◻ is not . . . . served by a water supply that requires the transportation of water to the property. IF THE PROPERTY IS SERVED BY A WATER SUPPLY THAT REQUIRES THE TRANSPORTATION OF WATER TO THE PROPERTY, THE SELLER SHALL DISCLOSE THE NAME AND CONTACT INFORMATION OF THE WATER HAULER OR WATER HAULING COMPANY THAT IS CURRENTLY PROVIDING THE TRANSPORTATION SERVICES TO THE PROPERTY AND THE NAME AND LOCATION OF THE WATER SUPPLY from WHICH THE WATER IS CURRENTLY BEING TRANSPORTED.

WATER HAULER NAME: ______________ PHONE:____________

WATER SUPPLY: __________________ LOCATION:_________

10. The property is served by ◻ a private water company ◻ a municipal water provider ◻ a private well ◻ a shared well ◻ no well. If served by a shared well, the shared well ◻ is ◻ is not . . . . a public water system, as defined by the safe drinking water act (42 United States Code § 300f).

Notice to buyer: If the property is served by a well, a private water company or a municipal water provider the Arizona department of water resources may not have made a water supply determination. For more information about water supply, contact the water provider.

11. The property or the water used on the property ◻ is ◻ is not the subject of a statement of claimant for the use of water in a general adjudication of water rights. ◻ unknown.

This is a lawsuit to determine the use of and relative priority of water rights. A map of adjudicated areas is available at the website of the department of water resources.

12. The property ◻ does have ◻ does not have . . . . an on-site wastewater treatment facility (i.e., standard septic or alternative system to treat and dispose of wastewater). ◻ unknown. If applicable: a) The property ◻ will ◻ will not . . . . require installation of an on-site wastewater treatment facility; b) The on-site wastewater treatment facility ◻ has ◻ has not been inspected.

13. The property ◻ has been ◻ has not been . . . . subject to a percolation test. ◻ unknown.

14. The property ◻ does have ◻ does not have one or more solar energy devices that are ◻ leased ◻ owned.

Notice to buyer: If the property contains solar energy devices, it is the responsibility of the buyer to verify the proper replacement and disposal method for the devices, as applicable. If the solar energy devices are leased, the seller or property owner shall disclose the name and contact information of the leasing company.

Leasing company name: _______________ Phone: _______________

15. THE PROPERTY ◻ does have ◻ does not HAVE ONE OR MORE BATTERY ENERGY STORAGE DEVICES THAT ARE ◻ leased ◻ owned.

IF THE BATTERY ENERGY STORAGE DEVICES ARE LEASED, THE SELLER SHALL DISCLOSE THE NAME AND CONTACT INFORMATION OF THE LEASING COMPANY.

LEASING COMPANY NAME: _________________ PHONE: ____________

15. 16. The property ◻ does ◻ does not . . . . meet the minimum applicable county zoning requirements of the applicable zoning designation.

16. 17. The sale of the property ◻ does ◻ does not . . . meet the requirements of A.R.S. § 11-831 and § 32-2181 regarding land divisions. If those requirements are not met, the property owner may not be able to obtain a building permit. it is unlawful pursuant to A.R.S. § 11-831, subsection H and A.R.S. § 32-2181, subsection D for a person or group of persons to attempt to avoid the subdivision laws of this state by acting in concert to divide a parcel of land into six or more lots or parcels. The county where the land division occurred or the state real estate department may investigate and ENFORCE the PROHIBITION AGAINST acting in CONCERt to UNLAWFULLY DIVIDE a PARCEL OF land into six or more lots or parcels. The seller or property owner shall disclose each of the deficiencies to the buyer.

Explain: ____________________________________________________

______________________________________________________________

17. 18. The property ◻ is ◻ is not located in the clear zone of a military airport or ancillary military facility, as defined in A.R.S. § 28-8461. (Maps are available at the state real estate department's website.)

18. 19. The property ◻ is ◻ is not located in the high noise or accident potential zone of a military airport or ancillary military facility, as defined in A.R.S. § 28-8461. (Maps are available at the state real estate department's website.)

19. 20. Notice: If the property is located within the territory in the vicinity of a military airport or ancillary military facility, the property is required to comply with sound attenuation standards as prescribed by A.R.S. § 28-8482. (Maps are available at the state real estate department's website.)

20. 21. The property ◻ is ◻ is not located under military restricted airspace. ◻ unknown. (Maps are available at the state real estate department's website.)

21. 22. The property ◻ is ◻ is not located in a military electronics range as defined in A.R.S. § 9-500.28 and § 11-818. ◻ unknown. (Maps are available at the state real estate department's website.)

22. 23. Use of the property ◻ is ◻ is not limited in any way relating to an encumbrance of title due to a lis pendens, a court order or a state real estate department order or a pending legal action. If the use of the property is limited due to an encumbrance of title, the seller or property owner shall disclose the limitations to the buyer.

Explain: ____________________________________________________

______________________________________________________________

This affidavit of disclosure supersedes any previously recorded affidavit of disclosure.

I certify under penalty of perjury that the information contained in this affidavit is true, complete and correct according to my best belief and knowledge.

Dated this (date) __ day of (year) by:

Seller's name (print): ______________ Signature: _____________

State of Arizona )

) ss.

County of ___________)

Subscribed and sworn before me this _ (date) __ day of (year) , by _________________________________________.

__________________________

Notary public

My commission expires:

(date)

Buyer(s) hereby acknowledges receipt of a copy of this affidavit of disclosure this (date) day of (year)

Buyer's name (print): _______________ Signature: _____________

G. For the purposes of this section, seller and subsequent seller do not include a trustee of a deed of trust who is selling property by a trustee's sale pursuant to chapter 6.1 of this title or any officer who is selling property by execution sale pursuant to title 12, chapter 9 and chapter 6 of this title. If the seller is a trustee of a subdivision trust as defined in section 6-801, the disclosure affidavit required by this section shall be provided by the beneficiary of the subdivision trust. END_STATUTE

Sec. 6. Repeal

Section 33-422, Arizona Revised Statutes, as amended by Laws 2023, chapter 77, section 3, is repealed.

Sec. 7. Title 45, chapter 2, article 5, Arizona Revised Statutes, is amended by adding section 45-465.05, to read:

START_STATUTE45-465.05. Permanent relinquishment of irrigation grandfathered rights; physical availability exemption credits; assured water supply; definitions

A. A person who owns land within an active management area that may be legally irrigated with groundwater pursuant to an irrigation grandfathered right may permanently relinquish all or a portion of the irrigation grandfathered right in exchange for a physical availability exemption credit if both of the following apply:

1. The irrigation grandfathered right has been exercised in at least one of the last five calendar years.

2. The person's use of the irrigation grandfathered right complies with this chapter and the applicable management plan.

B. The volume of groundwater that may be withdrawn and used annually per acre pursuant to this section shall be the lesser of either of the following:

1. The maximum amount of groundwater that a person may use pursuant to an irrigation grandfathered right for the acre at the time it is relinquished pursuant to section 45-465.

2. Either:

(a) If the irrigation grandfathered right is relinquished by december 31, 2035, two acre-feet multiplied by the retired irrigation acres in the farm or portion of the farm.

(b) If the irrigation grandfathered right is relinquished on or after January 1, 2036, one and five-tenths of an acre-foot multiplied by the retired irrigation acres in the farm or portion of the farm.

C. the director shall identify all of the following When issuing a physical availability exemption credit:

1. the volume of groundwater that may be withdrawn and used as calculated PURSUANT to subsection b of this section.

2. the number and location of the acres that are associated with the relinquishment.

3. the wells that have been used to serve the irrigation grandfathered right.

4. the owner of the land at the time of the relinquishment, which shall be the holder of the physical availability exemption credit.

5. The director's determination whether the criteria prescribed in subsection D, paragraph 3, subdivision (b) of this section would be satisfied based on the director's most recent assured water supply projection. This determination shall be applied to an assured water supply application that is submitted to the department within two years from the date the physical availability exemption credit is issued and shall remain valid until the director makes a final decision on the assured water supply application.

D. on request of the holder of a physical availability exemption credit for purposes of an application for an assured water supply, the volume of groundwater calculated pursuant to subsection B of this section shall be exempt from the requirement to demonstrate that the groundwater supply is physically available in accordance with section 45-576 if all of the following apply:

1. the proposed groundwater use associated with an application for an assured water supply shall be on one or more of the following locations:

(a) the retired irrigation acres.

(b) land that is under common ownership and contiguous to the retired irrigation acres, including land separated by a barrier, road, highway, easement or right-of-way.

(c) land within one mile of the exterior boundary of the retired irrigation acres. For the PURPOSES of this subdivision, If a portion of a parcel of land is within one mile of the exterior boundary, the entire parcel shall be included.

2. the applicant for an assured water supply proposes to WITHDRAW GROUNDWATER from one or more of the following locations:

(a) wells that were used to serve the irrigation grandfathered right.

(b) wells located within one mile of any well that was used to serve the irrigation grandfathered right.

(d) wells located within one mile of the acres associated with the relinquishment.

3. the applicant demonstrates, using a method of analysis approved by the director, that groundwater can be withdrawn to serve the proposed use for one hundred years without exceeding the depth of the aquifer or the applicable depth-to-static water level as prescribed by SUBSECTION K of this section, whichever is less. For the purposes of this demonstration:

(a) the director shall not consider other withdrawals of groundwater that exceed the depth of the aquifer or the applicable depth-to-static water level during the one hundred year PERIOD.

(b) FOR groundwater withdrawals located within one mile of any WELL that was used to serve the irrigation grandfathered right pursuant to PARAGRAPH 2, SUBDIVISION (b) of this subsection, the applicant may rely on the director's most recent assured water supply projection to satisfy this requirement.

E. On request from the holder of an irrigation grandfathered right, the Director shall make a determination to grant a PHYSICAL AVAILABILITY EXEMPTION credit within an overall time frame of ninety days PURSUANT to the licensing TIME FRAMES PRESCRIBED in Title 41, Chapter 6, Article 7.1. The overall time frame shall include thirty days for an administrative completeness review and sixty days for a substantive review. The time frame may be extended by mutual agreement as prescribed by section 41-1075.

F. Before the director issues a physical availability exemption credit, the director shall notify the holder of the irrigation grandfathered right in writing whether the criteria prescribed in subsection D, paragraph 3, subdivision (b) of this section would be satisfied based on the director's most recent assured water supply projection and request written confirmation that the holder of the irrigation grandfathered right would like to proceed with the relinquishment.

G. on notice to the director by the holder of a physical availability exemption credit, some or all of the credit may be assigned to a municipal provider or to a subsequent owner of the land associated with the relinquishment.

H. if only a portion of a physical AVAILABILITY exemption credit is applied to a certificate of assured water supply or a designation of assured water supply issued pursuant to section 45-576, the director shall identify the volumes remaining for the physical availability exemption credit.

I. after the issuance of a certificate of assured water supply based on a physical availability exemption credit, if a municipal provider that serves land associated with the relinquishment becomes a designated provider, the physical availability exemption credit associated with the certificate shall be used to support the designation.

J. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director PURSUANT to this section.

K. for the purposes of seeking an EXEMPTION from the PHYSICAL AVAILABILITY REQUIREMENT for an assured water supply as prescribed by SUBSECTION D of this section, the applicable depth-to-static water level for each active management area shall be:

1. in the pinal active management area, one thousand one hundred feet below land surface.

2. in all other active management areas, one thousand feet below land surface.

L. For the purposes of this section:

1. "MUNICIPAL provider" has the same meaning prescribed in section 45-561.

2. "well" includes a replacement well as prescribed in sections 45-597 and 45-598. END_STATUTE

Sec. 8. Section 45-554, Arizona Revised Statutes, is amended to read:

START_STATUTE45-554. Transportation of groundwater withdrawn in Harquahala irrigation non-expansion area to an initial active management area; annual report

A. A groundwater replenishment district established under title 48, chapter 27 may lease from an irrigation district located entirely within the Harquahala irrigation non-expansion area the use of one or more of the wells in the irrigation district to withdraw the groundwater that can be withdrawn from a depth to one thousand feet, at a rate that, when added to the existing rates of withdrawal in the area, does not cause the groundwater table at the site or sites to decline more than ten feet per year, for transportation to an initial active management area. The lease payments shall be made to the members of the irrigation district on a pro rata basis, per acre of land that is eligible to be irrigated under section 45-437, subsection B, minus the irrigation district's administrative costs. Wells leased under this subsection are exempt from well spacing requirements under section 45-559.

B. This state or a political subdivision of this state that An entity described in subsection D of this section that owns land eligible to be irrigated under section 45-437, subsection B in the Harquahala irrigation non-expansion area may withdraw groundwater from the land for transportation to an initial active management area for its own use or use by the Arizona water banking authority pursuant to section 45-2491 only a location and for the purposes prescribed in subsection F of this section:

1. If the groundwater is withdrawn:

(a) From a depth to one thousand feet at the site or sites of the proposed withdrawals.

(b) At a rate that, when added to the existing rate of withdrawals in the area, does not cause the groundwater table at the site or sites of the withdrawals to decline more than an average of ten feet per year during the one hundred year evaluation period.

2. In an amount either:

(a) Per acre of the eligible land, not to exceed:

(i) Six acre-feet in any year.

(ii) Thirty acre-feet for any period of ten consecutive years computed in continuing progressive series beginning in the year transportation of groundwater from the land begins.

(b) Established by the director, but only if the director determines that withdrawals in an amount greater than that permitted allowed by subdivision (a) of this paragraph will not unreasonably increase damage to residents of surrounding land and other water users in the irrigation non-expansion area, or that one or more of the entities withdrawing the groundwater will mitigate the damage to the residents and other water users.

3. By a public service corporation, if all costs associated with withdrawing, transporting and delivering groundwater away from the Harquahala irrigation non-expansion area are collected from the customers of the public service corporation's water district where the transported groundwater is used.

4. If before the withdrawal of groundwater from the Harquahala irrigation non-expansion area or the effective date of this amendment to this section, whichever is later, the eligible entity has DEMONSTRATED COMPLIANCE WITH THE CRITERIA IN THIS SUBSECTION OR SUBSECTION C OF THIS SECTION USING A HYDROLOGICAL STUDY. THE DIRECTOR SHALL PRESCRIBE THE CONTENTS OF THE STUDY THAT IS SUBMITTED WITH THE APPLICATION.

5. If before the withdrawal of groundwater from the Harquahala irrigation non-expansion area or the effective date of this amendment to this section, whichever is later, the eligible entity installs water measuring devices, or other similarly reliable and accessible methods as approved by the department to determine the volume of groundwater withdrawn from all relevant wells and transported out of the Harquahala irrigation non-expansion area by pipelines, canals or conduits.

6. If before the withdrawal of groundwater from the Harquahala irrigation non-expansion area or the effective date of this amendment to this section, whichever is later, the eligible entity submits a monthly report to the department containing all of the following:

(a) The volume of groundwater the entity withdrew from the Harquahala irrigation non-expansion area in the preceding month.

(b) The volume of groundwater the entity transported out of the Harquahala irrigation non-expansion area in the preceding month.

(c) The end use or destination of groundwater the entity transported out of the Harquahala irrigation non-expansion area in the preceding month.

C. If this state or one or more political subdivisions of this state own eighty per cent percent or more of the land that is eligible to be irrigated under section 45-437, subsection B in the irrigation non-expansion area, each of the entities may withdraw groundwater from the eligible land it owns for transportation to an initial active management area:

1. From a depth to one thousand feet at the site or sites of withdrawals.

2. From a depth between one thousand and one thousand two hundred feet at the site or sites of the withdrawals only if the director determines either that the withdrawals will not unreasonably increase damage to residents of surrounding land or that one or more of the entities withdrawing the groundwater will mitigate the damage to the residents.

D. The following entities are eligible to transport groundwater away from the Harquahala irrigation non-expansion area pursuant to subsection B of this section:

1. This state.

2. A political subdivision of this state.

3. A public service corporation that is regulated by the corporation commission and that holds a certificate of convenience and necessity for water service.

E. The director shall adopt rules to implement this section, including for the reporting of groundwater transported from the Harquahala irrigation non-expansion area.

F. The FOLLOWING locations and purposes are eligible to receive groundwater transported away from the Harquahala irrigation non-expansion area pursuant to subsection B of this section:

1. An initial active management area for use by an eligible entity or the Arizona water BANKING authority pursuant to section 45-2491.

2. Any location in La Paz county for use by an eligible entity.

G. On or before July 1 of each year, the department shall submit a report of all of the following to the governor, the president of the senate and the speaker of the house of representatives and shall provide a copy of this report to the secretary of state:

1. The total amount of groundwater all eligible entities withdrew from the Harquahala irrigation non-expansion area in the preceding year.

2. The total amount of groundwater each eligible entity withdrew from the Harquahala irrigation non-expansion area in the preceding year delineated by entity.

3. The total amount of groundwater all eligible entities transported from the Harquahala irrigation non-expansion area in the preceding year.

4. The total amount of groundwater each eligible entity transported from the Harquahala irrigation non-expansion area in the preceding year delineated by entity.

5. The end use or destination of all groundwater all eligible entities transported from the Harquahala irrigation non-expansion area in the preceding year.

6. The end use or destination of all groundwater all eligible entities transported from the Harquahala irrigation non-expansion area in the preceding year delineated by destination or end use. END_STATUTE

Sec. 9. Title 45, chapter 2, article 9, Arizona Revised Statutes, is amended by adding section 45-563.03, to read:

START_STATUTE45-563.03. Turf and plant installation; prohibition; exception; definitions

a. On or after January 1, 2026, a municipal provider may not apply potable water on nonfunctional turf that is installed as part of a new development project or redevelopment project on any portion of applicable property within an initial Active Management Area.

b. This section does not:

1. Preclude a municipality from adopting requirements that are more restrictive than the requirements regarding applying potable water on nonfunctional turf.

2. Impair vested rights to the use of water.

c. Notwithstanding any other law, a municipality located in an initial Active Management Area may not adopt or enforce any requirement establishing, directly or indirectly, any of the following:

1. Minimum turf requirements except for functional turf requirements that are associated with public recreational use areas or other public space that is regularly used for civic, community or recreational purposes, INCLUDING playgrounds, sports fields, cemeteries, schoolyards and storm water management.

2. The installation of plants that are not included on the Low-Water-Use and Drought-Tolerant Plant List that is published by the Department for the most current Management Plan in the initial Active Management Areas.

d. For the purposes of this section:

1. "Applicable property" means all of the following:

(a) Commercial property, institutional property or industrial property.

(b) Homeowners’ Association property.

2. "Commercial property" means property that is used for the provision or distribution of goods or services.

3. "Functional turf" means turf that is in a recreational use area or other space that is regularly used for civic, community or recreational purposes, including playgrounds, sports fields, cemeteries and schoolyards.

4. "Homeowners' association" means an association as defined in section 33-1202 or 33-1802.

5. "Industrial property":

(a) Means property that is primarily used for manufacturing or processing materials.

(b) Includes property that is primarily used for research and development.

6. "Institutional property" means property that is dedicated to public service, INCLUDING higher education institutions, schools, courts, churches, hospitals, government facilities and nonprofit research institutions.

7. "New development project":

(a) Means a new construction project that requires a building or landscaping permit, plan check or design review.

(b) Includes new construction projects at institutional properties that are not subject to local permitting requirements.

8. "Nonfunctional turf":

(a) Means all turf that is not functional turf.

(b) Includes:

(i) Turf that is located in a street right-of-way, parking lot or median.

(ii) Turf that is enclosed by fencing or other barriers to PERMANENTLY preclude human access for recreation or assembly.

9. "Redevelopment project":

(a) means a construction project that Requires a building or landscaping permit, plan check or design review and that Results in a disturbance of more than fifty percent of the parcel or parcels on which the construction project occurs.

(b) includes construction projects at institutional properties that are not subject to local permitting requirements and that result in a disturbance of more than fifty percent of the parcel or parcels on which the construction project occurs.END_STATUTE

Sec. 10. 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 before presenting the plat for approval to the city, town or county in which the land is located, where such is required, and 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 after 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 that 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 metallurgical 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. On or before December 31, 2023, the director shall study and submit to the governor, president of the senate and speaker of the house of representatives a report on whether and how a person that seeks a building permit for six or more residences within an active management area, without regard to any proposed lease term for those residences, should apply for and obtain a certificate of assured water supply from the director before presenting the permit application for approval to the county in which the land is located, unless the applicant has obtained a written commitment of water service for the residences from a city, town or private water company designated as having an assured water supply pursuant to this section.

M. For the purposes of this section, the director shall find that the volume of groundwater CALCULATED PURSUANT to section 45-465.05, subsection B is exempt from the PHYSICAL AVAILABILITY requirement for an Assured water supply if the VOLUME of GROUNDWATER CALCULATED PURSUANT to section 45-465.05, subsection b meets the requirements prescribed by section 45-465.05, subsection D.

M. n. 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 11-822 or 32-2181 to satisfy this requirement. END_STATUTE

Sec. 11. Section 45-576.08, Arizona Revised Statutes, is amended to read:

START_STATUTE45-576.08. Pinal active management area; assured water supply; physical availability; exemption; 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. except as PROVIDED in SUBSECTION B of this section, 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 CALCULATION prescribed by subsection A of this section, the director shall exclude any volume of groundwater that is subject to a PHYSICAL availability exemption credit as prescribed in section 45-465.05.

B. c. 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.

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

START_STATUTE45-576.10. Waterlogged area; assured water supply; designation

A. On application to the department by a city or town, the director may designate a portion of a city or town that is located both in the area delineated for exemption under section 45-411.01 and in the phoenix active management area as having an assured water supply if all of the following apply:

1. The portion of the city or town seeking an assured water supply designation is located entirely within an irrigation and water conservation district established pursuant to title 48, chapter 19.

2. The city or town seeking an assured water supply designation has contracted with the irrigation and water conservation district for a term of not less than one hundred years under which the city or town will receive water that the landowners in the district have the right to use on their lands and will treat and deliver the water for exclusive use on irrigation and conservation district lands for municipal use.

3. SUFFICIENT surface water or effluent of an adequate QUALITY will be continuously available to SATISFY the portion of a city's or town's PROPOSED water needs for not less than one hundred years.

4. the city or town demonstrates the financial CAPABILITY to construct the water FACILITIES, including delivery systems, storage facilities and treatment works, that are necessary to make the supply of water available for the PROPOSED use. The director may accept evidence of the construction assurances required by section 9-463.01, 11-822 or 32-2181 to satisfy this requirement.

B. For the purposes of this section and within an exemption area established pursuant to section 45-411.01:

1. The director may review the determination that a portion of a city or town has an assured water supply.

2. the director may determine that a portion of a city or town does not have an assured water supply. END_STATUTE

Sec. 13. Section 48-3771, Arizona Revised Statutes, is amended to read:

START_STATUTE48-3771. District replenishment obligations; replenishment location; source of replenishment; exception

A. For each active management area in which member lands or member service areas are or may be located, the district shall replenish groundwater in an amount equal to the groundwater replenishment obligation for that active management area. Except as provided in section 48-3781, subsection G, the district shall complete the replenishment of the groundwater replenishment obligation of that active management area applicable to a particular year within three full calendar years after the year that the district incurs the groundwater replenishment obligation. Replenishment of the groundwater replenishment obligation of an active management area applicable to a particular year is complete when the amount of water added to aquifers through water storage that has been credited directly to the district's conservation district account pursuant to title 45, chapter 3.1, plus long-term storage credits that have been transferred from the district's long-term storage account to its conservation district account pursuant to title 45, chapter 3.1, less the groundwater replenishment obligation of member lands and member service areas located in the active management area and applicable to previous years, less the contract replenishment obligations relative to municipal providers in the active management area for previous years and the year of the calculation, equals or exceeds the groundwater replenishment obligation of the active management area for that year.

B. With respect to the portion of the groundwater replenishment obligation attributable to a parcel of member land or a member service area, the district shall replenish groundwater in the active management area where the parcel of member land or the member service area is located in an amount equal to the groundwater replenishment obligation applicable to that parcel of member land or that member service area.

C. Except as provided by title 45, chapter 3.1, the district may replenish groundwater with central Arizona project water or water from any other lawfully available source except groundwater withdrawn from within an active management area.

D. Notwithstanding any other provision of this chapter, if a parcel of member land is included in the service area of a municipal provider that is not a member service area but that has been designated as having an assured water supply under section 45-576, the parcel of member land has no parcel replenishment obligation and the district has no groundwater replenishment obligation attributable to that parcel of member land for as long as the designation remains in effect.

E. Notwithstanding any other provision of this chapter and except as provided in subsection F of this section, if a parcel of member land is included in the service area of a municipal provider that is a member service area and that has been designated as having an assured water supply under section 45-576, the parcel of member land has no further parcel replenishment obligation.

F. After the effective date of this amendment to this section, a municipal provider that submits an application for a new designation of assured water supply pursuant to rules adopted by the department of water resources in the phoenix active management area that relies on a member service area agreement may elect for all parcels of member land in the municipal service area to retain a replenishment obligation. For parcels of member land that retain a replenishment obligation, the district shall replenish groundwater in an amount equal to the obligation applicable to that parcel of member land.

G. If, pursuant to subsection F of this SECTION, a municipal provider's service area contains member lands and the municipal provider applies to become designated as having an assured water supply, the municipal provider shall notify the district and the director of the department of water RESOURCES at the time of application whether it chooses to assume the member lands' replenishment obligation under the municipal provider's designation of assured water SUPPLY and member service area agreement. this section does not AUTHORIZE new member lands to be enrolled within the municipal provider's service area after the service area is DESIGNATED as having an ASSURED water supply.

H. If a municipal provider chooses to allow parcels of member land within its service area to retain the parcel replenishment obligation pursuant to this section, the designation of assured water supply and member service area agreement for the municipal provider shall provide that the parcels of member land retain the parcel replenishment obligation for the lesser of either of the following:

1. Ten years from the date of commencement of the first term of the designation.

2. The first term of the designation.

I. On the lesser of the conditions prescribed by subsection h of this section, the municipal provider shall begin to assume a percentage of the groundwater delivered to parcels of member land and any associated parcel replenishment obligation and provide the information to the district in the annual reports required by section 48-3775. In the first year of reporting pursuant to this subsection, the municipal provider may assume not less than ten percent of the total reported groundwater delivered to each parcel of member land. In each successive year the municipal provider shall assume at least an additional ten percent so that within ten years, all reported groundwater delivered and the parcel replenishment obligation are assumed by the municipal provider and the parcels of member land have no further parcel replenishment obligation.

J. After a municipal provider assumes all groundwater deliveries from all parcels of member land as prescribed by subsection I of this section, the municipal provider shall cease submitting reports to the district for parcels of member land pursuant to section 48-3775 while the municipal provider's designation of assured water supply remains valid.

K. If a municipal provider assumes the parcel replenishment obligation of member lands pursuant to a designation of assured water supply that relies on a member service area agreement, any groundwater allowance or extinguishment credits, as provided in rules adopted by the department of water resources pursuant to section 45-576, associated with the member lands assumed by the municipal provider may be used as follows:

1. If the parcel replenishment obligation and reported groundwater delivered to the member lands are entirely assumed on the initial designation of an assured water supply, the municipal provider may use the remaining extinguishment credits or groundwater allowance associated with the member lands as authorized pursuant to a member service area agreement.

2. If the parcel replenishment obligation and reported groundwater delivered to the member lands are assumed in stages as provided in subsection I of this section, the municipal provider may use the groundwater allowance and extinguishment credits for the member lands in the same manner as authorized in the applicable agreement and notice of municipal reporting requirements if the groundwater is being reported as delivered to member lands. Thereafter, the municipal provider may use any remaining extinguishment credits or groundwater allowance as authorized under the member service area agreement. END_STATUTE

Sec. 14. Section 48-3775, Arizona Revised Statutes, is amended to read:

START_STATUTE48-3775. Reports

A. Except as provided in subsection H of this section, on or before March 31 of each year after the recordation of the instrument described in section 48-3774, subsection C, each municipal provider delivering water to member land shall file a report with the district and with the director of water resources a report that contains the following information for the preceding calendar year, which is the reporting year:

1. The amount of groundwater delivered by the municipal provider to each parcel of member land, identified by the applicable tax parcel number, and the basis for the calculation of the amount of groundwater delivered.

2. The amount of groundwater delivered by the municipal provider to the member land and the basis for the calculation of the amount of groundwater delivered.

3. The amount of excess groundwater delivered by the municipal provider to the member land and the basis for the calculation of the amount of excess groundwater delivered.

4. The parcel replenishment obligation of each parcel of the member land, identified by the applicable tax parcel number.

5. Such other information as the district may reasonably require.

B. On or before March 31 of each year after the qualification of a municipal provider's service area as a member service area, the municipal provider shall file a report with the district and with the director of water resources a report that contains the following information for the preceding calendar year, which is the reporting year:

1. The amount of groundwater delivered by the municipal provider to all customers within the member service area and the basis for the calculation of the amount of groundwater delivered and, if the municipal provider has entered into a member service area agreement pursuant to section 48-3771, subsections H and I, the amount of groundwater delivered to member lands and the percentage of those groundwater deliveries assumed by the municipal provider.

2. The amount of excess groundwater delivered by the municipal provider to all customers within the member service area and the basis for the calculation of the amount of excess groundwater delivered.

3. Such other information as the district may require.

C. The district shall confirm the calculation of the parcel replenishment obligation of each parcel of the member land and the service area replenishment obligation of each member service area, using the information provided in subsections A and B of this section.

D. To the extent allowed by the assured water supply rules adopted by the department of water resources pursuant to section 45-576, subsection H, in calculating the excess groundwater of a member land or a member service area, the municipal provider shall reduce the amount of groundwater that may be used, consistent with such rules, at a member land or delivered for use within the member service area and that is not derived from credits on a straight line basis over the applicable period of years prescribed in such rules. The municipal provider may apply any credits applicable to the member land or the member service area as permitted allowed under such rules.

E. The district shall prepare and file with the director of water resources on or before August 31 of each year for the prior calendar year, which is the reporting year, an annual report that includes the following information:

1. The total amount of water that was stored by the district during the reporting year pursuant to each water storage permit issued to it under title 45, chapter 3.1.

2. The amount of water stored by the district during the reporting year to be credited to the district's conservation district account pursuant to title 45, chapter 3.1.

3. The amount of water stored by the district during the reporting year to be credited to the district's replenishment reserve subaccount pursuant to title 45, chapter 3.1.

4. The groundwater replenishment obligations for the reporting year and for the two calendar years preceding the reporting year, and the extent to which the district has completed the groundwater replenishment obligations applicable to each of those years.

5. The information required under section 45-877.01.

6. The amount of water stored by the district during the reporting year to be credited to the district's long-term storage account pursuant to title 45, chapter 3.1.

7. The amount of long-term storage credits the district has transferred and credited to its conservation district account pursuant to title 45, chapter 3.1 during the reporting year.

F. The district and the municipal providers required to file reports under this section shall maintain current, accurate records of the information required to be included in the reports.

G. If a municipal provider fails to file a report as required by the district, the district may assess a penalty of up to one thousand dollars $1,000 per day that the report is overdue.

H. A municipal provider shall not file the report required by subsection A of this section for a parcel of member land that is included in the service area of a municipal provider that is a member service area that has been designated as having an assured water supply under section 45-576 unless the parcel of member land is subject to a member service area agreement as prescribed in section 48-3771, subsections H and I. END_STATUTE

Sec. 15. Section 48-3778, Arizona Revised Statutes, is amended to read:

START_STATUTE48-3778. Annual assessment; general revenue law

A. On or before the third Monday of August of each year after the qualification of any real property as member land, the district shall charge an annual replenishment assessment against each parcel of member land that is subject to a parcel replenishment obligation. This charge becomes a lien on the parcel and shall be collected in the same manner as an ad valorem tax. The assessments shall be calculated by the district pursuant to this article and shall be sufficient to produce the amount of money estimated as needed to pay the costs and expenses to replenish groundwater established under section 48-3772, subsection A and taking into account any annual replenishment tax levied against municipal providers under section 48-3781 and any member service area agreement entered pursuant to section 48-3771, subsections H and I.

B. The district shall promptly certify the assessments to the board of supervisors of each county in which member lands are located, and these boards of supervisors at the time of levying general county taxes shall take the necessary steps for collection of replenishment assessments against the parcels of member land within such county.

C. The assessment when collected shall be deposited, pursuant to sections 35-146 and 35-147, in the special fund established under section 48-3773, subsection A, paragraph 3 to be spent by the district only for the purposes authorized by this article.

D. All provisions of the general revenue laws for the collection of taxes on real estate for county purposes apply to the collection of the replenishment assessment imposed by this article, including all remedies of the revenue laws for collecting delinquent taxes and provisions relating to sales of real property for delinquent taxes. The exemptions applicable to ad valorem taxes do not apply to assessments charged pursuant to this section. END_STATUTE

Sec. 16. Section 48-3780, Arizona Revised Statutes, is amended to read:

START_STATUTE48-3780. Qualification as a member service area; termination

A. The service area of a municipal provider qualifies as a member service area only if all of the following apply:

1. The service area is located in an active management area in which a part of the central Arizona project aqueduct is located.

2. The municipal provider is not a member of a groundwater replenishment district established pursuant to chapter 27 of this title.

3. The service area of the municipal provider is not a water district member service area under chapter 28 of this title.

4. If the municipal provider or its predecessor previously terminated member service area status pursuant to subsection B of this section, the service area or any portion of the service area has not been a member service area for at least ten years. The district may waive this requirement if the district and the director of water resources determine that previously unforeseen circumstances necessitate requalification of the service area.

5. If the municipal provider or its predecessor previously terminated member service area status pursuant to subsection B of this section, the municipal provider agrees to pay to the district all charges that would have otherwise been imposed by the district had the member service area status remained in effect during the period since termination became effective.

6. If all or a portion of the service area has previously qualified as a member service area, the municipal provider agrees to pay an amount equal to the amount of the replenishment taxes assessed against its predecessor that were not paid, plus interest calculated in accordance with section 48-3782, subsection A.

7. The conditions stated in section 45-576.01, subsection B, paragraphs 2 and 3 are satisfied with respect to the district at the time of the qualification.

8. The municipal provider publishes a resolution once each week for two consecutive weeks in a newspaper of general circulation in the county or counties where the service area is located that:

(a) Has attached to it a current map of the municipal provider's service area.

(b) Declares the intent of the municipal provider that the service area qualify as a member service area under this chapter.

(c) Declares that, for the privilege of withdrawing and delivering excess groundwater within its service area and to ensure the continued exercise of that privilege, the municipal provider shall pay an annual replenishment tax to be determined by the district.

(d) Contains a covenant, binding against the municipal provider, to pay to the district an annual replenishment tax based on the service area replenishment obligation in an amount determined by the district as necessary to allow the district to perform the groundwater replenishment obligations.

(e) Authorizes the municipal provider to enter into a written commitment with the district in the form and substance satisfactory to the district regarding payment of the annual replenishment tax.

(f) Declares that the resolution applies to the service area of the municipal provider as it currently exists and to all additions to and extensions of the service area.

(g) Declares that the resolution is irrevocable for as long as the district is obligated to perform the groundwater replenishment obligations.

(h) if applicable, declares that the MUNICIPAL PROVIDER has elected to have parcels of member land within the member service area of the MUNICIPAL provider retain the parcel REPLENISHMENT obligations as authorized PURSUANT to SECTION 48-3771, subsections H and I.

B. A service area previously accepted as a member service area pursuant to subsection A of this section terminates its member service area status only if all of the following apply:

1. The municipal provider for the member service area has submitted an application to the district requesting termination of member service area status.

2. The municipal provider for the member service area has submitted an application to the director of water resources requesting modification of the municipal provider's assured water supply designation under section 45-576 that eliminates the municipal provider's reliance on member service area status.

3. The applications provide evidence satisfactory to the director of water resources that the municipal provider has obtained a substitute supply of water, other than groundwater, that is determined by the director of water resources to be consistent with assured water supply requirements pursuant to section 45-576 and that is sufficient to eliminate the municipal provider's reliance on member service area status.

4. The director of water resources has approved the municipal provider's application to modify its assured water supply designation based on the addition of the substitute water supply.

5. The municipal provider publishes a resolution once each week for two consecutive weeks in a newspaper of general circulation in the county or counties where the service area is located that:

(a) Has attached to it a current map of the municipal provider's service area.

(b) Declares the intent of the municipal provider to terminate the service area’s member service area status.

(c) Declares that the district is no longer obligated to perform the groundwater replenishment obligations on behalf of the service area.

(d) Revokes the resolution for the member service area provided for in subsection A, paragraph 7 of this section.

6. All amounts owed by the water provider on behalf of the member service area to the district have been paid.

7. The municipal provider has paid or made arrangements suitable to the district for repayment of any capital costs incurred by the district specifically on behalf of the member service area. END_STATUTE

Sec. 17. Section 48-3781, Arizona Revised Statutes, is amended to read:

START_STATUTE48-3781. Annual replenishment tax; contract replenishment tax

A. On or before the third Monday of August of each year after the qualification of the member service area of any municipal provider, the district shall levy a replenishment tax against each municipal provider having a qualified member service area for the privilege of withdrawing and delivering excess groundwater within the member service area. The replenishment tax shall be calculated by the district in accordance with this article and shall be sufficient to produce the amount of money estimated as needed to pay the costs and expenses to replenish groundwater established under section 48-3772, subsection A, and taking into account any annual replenishment assessment levied under section 48-3778 and any member service area AGREEMENT entered PURSUANT to section 48-3771, subsections H and I.

B. The district shall promptly transmit a statement to each municipal provider having a member service area stating the amount of the annual replenishment tax and any replenishment reserve fee due under section 48-3780.01.

C. On or before the third Monday of August of each year after the district enters into any contract to replenish water pursuant to section 48-3772, subsection B, paragraph 9, the district shall levy a tax against each municipal provider that is a party to a contract to replenish groundwater at the assessment rate provided in the applicable contract. The district shall promptly transmit a statement to each municipal provider that is a party to a contract to replenish groundwater stating the amount of the replenishment tax due under the contract.

D. On or before October 15 of each year, each municipal provider that has a member service area shall pay to the district an amount equal to the annual replenishment tax levied by the district and any replenishment reserve fee due under section 48-3780.01.

E. On or before October 15 of each year, each municipal provider that is a party to a contract to replenish groundwater under section 48-3772, subsection B, paragraph 9 shall pay to the district the contract replenishment tax levied by the district pursuant to the contract.

F. Annual replenishment taxes and contract replenishment taxes collected by the district shall be deposited, pursuant to sections 35-146 and 35-147, in the special fund established pursuant to section 48-3773, subsection A, paragraph 3 and shall be expended by the district only for the purposes authorized by this article.

G. If a municipal provider is delinquent for more than ninety days in the payment of its replenishment tax, the district shall promptly notify the director of water resources of the delinquency. Except as provided in subsection H of this section, for any municipal provider that is delinquent for more than ninety days in the payment of its replenishment tax, the district shall complete the replenishment of the service area replenishment obligation. The district shall complete that obligation within three full calendar years after the year that the district is paid an amount equal to the delinquent replenishment tax, plus interest calculated in accordance with section 48-3782, subsection A, or within ten full calendar years after the year that the district incurs the service area replenishment obligation, whichever is sooner.

H. The district is not required to complete the replenishment of the service area obligation of a municipal provider that is delinquent for more than ninety days in the payment of its replenishment tax if both of the following apply:

1. The district is not paid an amount equal to the delinquent replenishment tax, plus interest calculated in accordance with section 48-3782, subsection A, within ten full calendar years after the year that the district incurs the service area replenishment obligation.

2. The municipal provider or its successor has violated section 45-492, subsection D or section 45-493, subsection D and the director of water resources has not commenced an enforcement action against the municipal provider or its successor for the violation within ten full calendar years after the year that the district incurs the service area replenishment obligation. END_STATUTE

Sec. 18. Rules; department of water resources; extinguishment credits; groundwater allowance; member land

On or before January 1, 2025, the department of water resources shall amend rules adopted pursuant to section 45-576, Arizona Revised Statutes, as amended by this act, for the incorporation of extinguishment credits and groundwater allowance associated with member lands in a designation of assured water supply consistent with section 48-3771, Arizona Revised Statutes, as amended by this act.

Sec. 19. Exemption from rulemaking

Notwithstanding any other law, for the purposes of section 45-554, Arizona Revised Statutes, as amended by this act, the department of water resources is exempt from the rulemaking requirements of title 41, chapter 6, Arizona Revised Statutes, for one year after the effective date of this act.

(ENACTED WITHOUT THE EMERGENCY)

Sec. 20. Emergency

This act is an emergency measure that is necessary to preserve the public peace, health or safety and is operative immediately as provided by law.