House Engrossed

 

 

 

 

State of Arizona

House of Representatives

Forty-seventh Legislature

Second Regular Session

2006

 

 

HOUSE BILL 2835

 

 

 

AN ACT

 

amending sections 45-552 and 45-554, Arizona Revised Statutes; amending section 45-611, Arizona Revised Statutes, as amended by Laws 2005, chapter 143, section 1; amending sections 45-2401 and 45-2402, Arizona Revised Statutes; amending section 45-2423, Arizona Revised Statutes, as amended by Laws 2005, chapter 143, section 4; amending section 45-2425, Arizona Revised Statutes, as amended by Laws 2005, chapter 143, section 5 and chapter 332, section 1; amending section 45-2457, Arizona Revised Statutes, as amended by Laws 2005, chapter 143, section 6; amending title 45, chapter 14, Arizona Revised Statutes, by adding article 5; amending sections 45-2601, 45-2611, 45‑2622 and 45-2626, Arizona Revised Statutes; relating to waters; providing for conditional enactment.

 

 

(TEXT OF BILL BEGINS ON NEXT PAGE)

 



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

Section 1.  Section 45-552, Arizona Revised Statutes, is amended to read:

START_STATUTE45-552.  Transportation of groundwater withdrawn in McMullen valley basin to an active management area; definitions

A.  A city that purchased land before January 1, 1988 in the McMullen valley groundwater basin or a person who purchased land before January 1, 1988 that was in that basin and that was in the same county as an adjacent initial active management area may, either directly or in exchange for central Arizona project water allocated for agricultural purposes, may transport groundwater from that land to an adjacent initial active management area for use by any city, town, private water company or groundwater replenishment district.  A city, town, private water company or groundwater replenishment district that purchases any land in the McMullen valley groundwater basin from that city or land that was in that basin and that was in the same county as an adjacent initial active management area from that person may, either directly or in exchange for central Arizona project water allocated for agricultural purposes, may transport groundwater from that land to the adjacent initial active management area only for use by a city, town, private water company or groundwater replenishment district or the Arizona water banking authority pursuant to section 45-2491.  The amount of groundwater that may be transported away from the basin shall be determined pursuant to subsection B of this section but shall not exceed:

1.  In any year, two times the annual transportation allotment for the land determined pursuant to subsection B of this section.

2.  For any period of ten consecutive years computed in continuing progressive series beginning in the year transportation of groundwater from the land begins, ten times the annual transportation allotment for the land determined pursuant to subsection B of this section.

3.  Six million acre-feet in total.

B.  The director shall determine the annual transportation allotment for land that is subject to this section as follows:

1.  Determine each farm or portion of a farm on that land.

2.  For each such farm or portion of a farm, determine the historically irrigated acres.

3.  Multiply the sum of those historically irrigated acres for all such farms or portions of farms by three acre-feet per acre.

C.  In an initial active management area, for purposes of determining whether to issue a certificate of assured water supply or to designate or redesignate a city, town or private water company as having an assured water supply, pursuant to section 45-576, based in whole or in part on groundwater transported from the groundwater basin under this section, the director shall consider only the amount of groundwater that can be withdrawn in the groundwater basin from a depth to one thousand two hundred feet at the site or sites of the proposed withdrawals at a rate that, when added to the existing rates of withdrawal in the area, is not expected to cause the groundwater table at the site or sites to decline more than an average of ten feet per year during the one hundred year evaluation period and does not exceed forty per cent of the groundwater that can be withdrawn in the groundwater basin, less the sum of the following amounts of groundwater in the groundwater basin:

1.  The total amount on which the director has already based certificates or designations of assured water supply in an initial active management area.

2.  The total amount transported to an initial active management area for other purposes.

D.  For the purposes of this section:

1.  Land that is owned by a city, town, private water company or groundwater replenishment district includes land that is owned indirectly through a nonprofit corporation or other entity that is owned or controlled by the city, town, private water company or groundwater replenishment district.

3.  2.  "Historically irrigated acres" means land overlying an aquifer that was irrigated with groundwater from that aquifer before January 1, 1988.

2.  3.  "Person" means person as defined in section 45-402 and a person who purchased land before January 1, 1988 includes any successor in interest of that person if the successor acquires an interest in the land by means of either of the following:

(a)  Inheritance, devise or intrafamily gift or conveyance directly or in trust.

(b)  The reorganization of a closely held corporation, a partnership or a limited liability company that is and remains owned by or controlled by or for the benefit of individuals related to that person.END_STATUTE

Sec. 2.  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

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 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:

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 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.

C.  If this state or one or more political subdivisions of this state own eighty per cent 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. END_STATUTE

Sec. 3.  Section 45-611, Arizona Revised Statutes, as amended by Laws 2005, chapter 143, section 1, is amended to read:

START_STATUTE45-611.  Groundwater withdrawal fee; amounts and purposes of fee; exception

A.  Except as provided in subsection B of this section, the director shall levy and collect an annual groundwater withdrawal fee from each person withdrawing groundwater in the Prescott active management area or the person who owns the right to withdraw the groundwater, in an amount not to exceed five dollars per acre-foot of groundwater withdrawn and beneficially used. The director shall levy and collect an annual withdrawal fee from each person withdrawing water, other than stored water, from a well in the Santa Cruz active management area or the person who owns the right to withdraw the water, in an amount not to exceed five dollars per acre-foot of water, other than stored water, that is withdrawn and beneficially used.† For purposes of this article, the annual withdrawal fee levied and collected in the Santa Cruz active management area shall be considered a groundwater withdrawal fee. The actual amount of the fee levied and collected by the director pursuant to this subsection shall be set by the director as follows:

1.  For administration and enforcement of this chapter, an amount not less than fifty cents and not greater than one dollar per acre-foot per year. The initial fee for administration and enforcement shall be levied as soon as practicable after the active management area is established.

2.  For augmentation of the water supply of the active management area, conservation assistance to water users within the active management area and monitoring and assessing water availability within the active management area, an amount not greater than two dollars per acre-foot per year.

3.  For purchasing and retiring grandfathered rights, an amount not greater than two dollars per acre-foot per year.† The initial fee for purchasing and retiring grandfathered rights shall be levied in the first year in which the director develops and implements a program for the purchase and retirement of grandfathered rights as part of the management plan for the active management area, but not earlier than January 1, 2006.† The director may not levy a fee under this paragraph on a district member of a groundwater replenishment district that withdraws groundwater in the district for a non‑irrigation use in the district.

B.  A person, other than an irrigation district, who withdraws groundwater in an active management area from a non-exempt well for use pursuant to an irrigation grandfathered right that is appurtenant to ten or fewer irrigation acres and the person who owns the right to withdraw the groundwater are exempt from the groundwater withdrawal fee requirements of subsections A and C of this section for those withdrawals unless the irrigation acres are part of an integrated farming operation.

C.  Except as provided in section 45‑411.01, subsection C and subsection B of this section, the director shall levy and collect an annual groundwater withdrawal fee from each person who withdraws groundwater in the Tucson, Phoenix and Pinal active management areas or the person who owns the right to withdraw the groundwater, in an amount of not more than five dollars per acre-foot of groundwater withdrawn and beneficially used.† The director shall set the actual amount of the fee as follows:

1.  In the Tucson and Phoenix active management areas, beginning in 2017, for administration and enforcement of this chapter, an amount of at least fifty cents but not more than one dollar per acre-foot per year.† In the Pinal active management area, beginning in 2017, for administration and enforcement of this chapter, an amount of not more than one dollar per acre‑foot per year.

2.  Through 2016, for augmentation of the water supply of the active management area, conservation assistance to water users within the active management area and monitoring and assessing water availability within the active management area, an amount of not more than fifty cents per acre-foot per year, and after 2016, an amount of not more than two dollars per acre‑foot per year.† If a permanent board of directors of an active management area water district assumes office under section 48‑4831, the fee for augmentation under this paragraph shall not be levied in that active management area.

3.  In the Tucson and Phoenix active management areas, through 2016, for Arizona water banking purposes, the amount of two dollars fifty cents per acre-foot per year.† In the Pinal active management area, through 2016, for Arizona water banking purposes, including replenishment under chapter 15, article 3 of this title, the amount of two dollars fifty cents per acre‑foot per year and, beginning in 2017, for Arizona water banking purposes, including replenishment under chapter 15, article 3 of this title, an amount of not more than two dollars fifty cents per acre-foot per year.

4.  For purchasing and retiring grandfathered rights, an amount of not more than two dollars per acre-foot per year.  The initial fee for purchasing and retiring grandfathered rights shall be levied in the first year in which the director develops and implements a program for the purchase and retirement of grandfathered rights as part of the management plan for the active management area, but not earlier than January 1, 2006.† The director may not levy a fee pursuant to this paragraph on a district member of a groundwater replenishment district that withdraws groundwater in the district for non-irrigation use in the district. END_STATUTE

Sec. 4.  Section 45-2401, Arizona Revised Statutes, is amended to read:

START_STATUTE45-2401.  Declaration of policy and purpose

A.  The legislature finds that this state is currently and temporarily underutilizing both the entitlement to Colorado river water confirmed to it by the United States supreme court in Arizona v. California, 373 U.S. 546 (1963), and the central Arizona project, which has the capacity to divert into this state a significant portion of this state's entitlement to Colorado river water.  The legislature further finds that, due to the low priority on the Colorado river of the central Arizona project and other Arizona Colorado river water users, the susceptibility of this state to future shortages of water on the Colorado river is a threat to the general economy and welfare of this state and its citizens.

B.  The legislature further finds that water users within the central Arizona project service area also rely on other surface water supplies, that these supplies are susceptible to future shortages of water and that these shortages are a threat to the general economy and welfare of this state and its citizens.

C.  The legislature further finds that future water needs in the states of California and Nevada could exceed the entitlements of those states to Colorado river water.  Those future water needs could thereby affect the general economy and welfare of this state and its citizens because of the close economic ties among Arizona, California and Nevada.

D.  The legislature further finds that Arizona water users could more efficiently manage, distribute and use available water resources through the storage of water supplies and through stored water lending arrangements, but that not all of these Arizona water users have the opportunities or resources needed to store water or enter into stored water lending arrangements.

E.  The legislature further finds that for the purposes of this chapter diverting Colorado river water for storage off of the Colorado river system is a consumptive use of that water.

F.  The legislature further finds that water banking is complimentary and compatible with existing water management efforts.  The Arizona water banking authority will compliment and assist the activities of the central Arizona water conservation district in its mission to provide a dependable and cost-effective water supply.

G.  The legislature therefore finds that it is in the best interest of the general economy and welfare of this state and its citizens to:

1.  Use the central Arizona project to store otherwise unused Arizona entitlement to Colorado river water within this state to meet future water needs within this state.

2.  Provide the opportunity to the states of California and Nevada to store currently unused Colorado river water in Arizona to meet future needs in those states.

3.  Provide the opportunity to facilitate the storage of water and stored water lending arrangements by entities in Arizona that may not have the opportunities or resources needed to store water.

4.  Provide the opportunity to facilitate the settlement of Indian water rights claims by delivering and storing water.

H.  The public policy and general purposes of this chapter are to:

1.  Increase utilization of Arizona's Colorado river entitlement that was confirmed to Arizona by the United States supreme court in article ii(b)(1), (2) and (6) of the decree entered at Arizona v. California, 376 U.S. 340 (1964), and that would otherwise be unused in Arizona, by delivering that water into this state through the central Arizona project aqueducts.

2.  Store water brought into this state through the central Arizona project to protect Arizona municipal and industrial water users against future water shortages on the Colorado river and disruptions of operation of the central Arizona project.

3.  Store water brought into this state through the central Arizona project to fulfill the water management objectives of this state set forth in chapter 2 of this title.

4.  Provide the opportunity for storing water brought into this state through the central Arizona project to be available to implement the settlement of water right claims by Indian communities within Arizona.

5.  Provide the opportunity to authorized agencies in the states of California and Nevada to store otherwise unused Colorado river water in Arizona to assist those states in meeting future water needs.

6.  Provide the opportunity to facilitate the storage of water and stored water lending arrangements by entities in Arizona that may not have the opportunities or resources needed to store water.END_STATUTE

Sec. 5.  Section 45-2402, Arizona Revised Statutes, is amended to read:

START_STATUTE45-2402.  Definitions

Unless the context otherwise requires, the terms defined in sections 45-101, 45-402 and 45-802.01 have the same meaning in this chapter and for purposes of this chapter:

1.  "Authority" means the Arizona water banking authority.

2.  "Banking fund" means the Arizona water banking fund.

3.  "Central Arizona water conservation district" or "CAWCD" means the multi-county water conservation district established under title 48, chapter 22.

4.  "Commission" means the Arizona water banking authority commission.

5.  "Decree" means the decree entered by the United States supreme court in Arizona v. California, 376 U.S. 340 (1964).

6.  "Indian firming" means measures taken to ensure that central Arizona project non-Indian agricultural priority water that is made available to Indian tribes pursuant to Public Law 108-451 may be delivered during water shortages in the same manner that water with a municipal and industrial priority in the central Arizona project system is delivered during water shortages.

6.  7.  "Water banking services" means services provided by the authority to persons and Indian communities in this state to facilitate for those persons and Indian communities storage of water and stored water lending arrangements.† Water banking services include the direct delivery of water to Indian communities in this state in replacement of or supplemental to the accrual of long-term storage credits pursuant to article 5 of this chapter.  Water banking services include only arrangements by which water will be made available for use in this state.  Water banking services do not include interstate water banking undertaken by the authority pursuant to article 4 of this chapter.  Water banking services may include:

(a)  Storage of water.

(b)  Obtaining water storage permits.

(c)  Accruing, exchanging and assigning long-term storage credits.

(d)  Lending and obtaining repayment of long-term storage credits.

7.  8.  "Water banking services agreement" means an agreement entered into between the authority and a person or Indian community in this state under which the authority will provide water banking services to that person or Indian community.END_STATUTE

Sec. 6.  Section 45-2423, Arizona Revised Statutes, as amended by Laws 2005, chapter 143, section 4, is amended to read:

START_STATUTE45-2423.  Powers and duties of authority

A.  The authority, acting through its commission, shall:

1.  Administer the Arizona water banking fund in accordance with this chapter.

2.  Coordinate its staffing needs with the director and CAWCD.

3.  Coordinate the storage of water and distribution and extinguishment of long‑term storage credits with the director in accordance with this chapter and the water management objectives set forth in chapter 2 of this title.

4.  Coordinate with CAWCD for the purchase, delivery and storage of Colorado river water delivered through the central Arizona project in accordance with this chapter.

5.  Coordinate and confer with state agencies, municipal corporations, special districts, authorities, other political subdivisions, private entities, Indian communities and the United States on matters within their jurisdiction relating to the policy and purposes of this chapter.

6.  Determine, on an annual basis, the quantity of Colorado river water, surface water other than Colorado river water and effluent to be stored by the authority and where that storage will occur.

7.  Account for, hold and distribute or extinguish long‑term storage credits in accordance with this chapter.

8.  Comply with all aspects of chapter 3.1 of this title.

9.  Perform the authority's replenishment responsibilities under chapter 15, article 3 of this title with monies appropriated from the state general fund by the legislature for that purpose and to the extent that monies appropriated by the legislature for that purpose are not available, with monies collected in the Pinal active management area pursuant to section 45-611, subsection C, paragraph 3.

10.  Carry out the obligations of this state under section 105 of Public Law 108-451 as agent for this state, including the direct delivery of water to Indian communities in this state and the leasing of non-Indian agricultural priority and Indian priority central Arizona project water as prescribed by article 5 of this chapter.

10.  11.  Adopt an official seal for the authentication of its records, decisions and resolutions.

11.  12.  Keep the minutes of its meetings and all records, reports and other information relating to its work and programs in permanent form, systematically indexed and filed.

B.  The authority, acting through its commission, may:

1.  Apply for and hold water storage permits.

2.  Accrue, exchange, assign, lend and hold long‑term storage credits in accordance with this chapter.

3.  Exchange Colorado river water for any type of water in accordance with chapter 4 of this title.

4.  Enter into water banking services agreements.

5.  Charge fees for water banking services.

6.  Apply for and hold any water quality permit required for water storage by the department of environmental quality under title 49, chapter 2, article 3 or by federal law.

7.  Make and execute all contracts, including intergovernmental agreements pursuant to title 11, chapter 7, article 3, that shall be signed by the chairperson, or in the chairperson's absence the vice‑chairperson, and attested by the secretary, necessary to:

(a)  Obtain for storage Colorado river water delivered through the central Arizona project.† Agreements by which the authority obtains Colorado river water are exempt from the requirements of title 41, chapter 23.

(b)  Obtain effluent or surface water other than Colorado river water for storage but only after the authority has stored all available excess Central Arizona project water or when central Arizona project water is otherwise unavailable or undeliverable.

(c)  Affiliate water storage permits held by the authority with storage facility permits.

(d)  Store Colorado river water for purposes of this chapter at permitted storage facilities.

(e)  Distribute long‑term storage credits earned by the authority to make water available to municipal and industrial users of Colorado river water in this state that are inside or outside of the CAWCD service area, in accordance with the provisions of this chapter.

(f)  Store Colorado river water in Arizona on behalf of appropriately authorized agencies in California and Nevada.

(g)  Cause a decrease in Arizona diversions from the Colorado river, ensuring that Arizona will use less than its full entitlement to Colorado river water in years in which California and Nevada agencies are contractually authorized to call on the water stored on their behalf by the authority.

(h)  Distribute long‑term storage credits earned by the authority on behalf of agencies in California and Nevada to Colorado river water users in Arizona to use in place of Colorado river water that would have otherwise been used by those Arizona users.

(i)  Replenish water pursuant to chapter 15, article 3 of this title, including entering into an intergovernmental agreement with the Gila river Indian community pursuant to section 45‑2624.

(j)  Distribute long-term storage credits earned by the authority to make water available to Indian communities in this state for Indian firming measures pursuant to article 5 of this chapter.

8.  Sue and be sued.

9.  Perform all other acts necessary for the authority to carry out its purposes, powers and duties in accordance with this chapter.

10.  Submit a request for a general fund appropriation to the legislature each year.† A request shall be accompanied by a budget detailing how the appropriation would be used and justifying the need for the appropriation.

11.  Form temporary committees as deemed necessary by the authority to provide the authority with advice on issues identified by the authority. Advisory committees may consist of members of the public selected by the authority, members of the authority and authority staff.

12.  Purchase long‑term storage credits accrued by an Indian community pursuant to section 45‑841.01, provided such long‑term storage credits are distributed or extinguished in accordance with the rules of operation specified in section 45‑2457 for the funds used by the authority to purchase the credits. END_STATUTE

Sec. 7.  Section 45-2425, Arizona Revised Statutes, as amended by Laws 2005, chapter 143, section 5 and chapter 332, section 1, is amended to read:

START_STATUTE45-2425.  Arizona water banking fund

A.  The Arizona water banking fund is established and shall include subaccounts based on funding sources. The authority shall administer the banking fund in accordance with this chapter.

B.  The banking fund consists of all of the following:

1.  Monies appropriated from the state general fund by the legislature for water banking purposes other than replenishment under chapter 15, article 3 of this title.

2.  Monies appropriated from the state general fund by the legislature for replenishment under chapter 15, article 3 of this title.

3.  Reimbursement for the distribution of long-term storage credits, collected by the authority in accordance with section 45‑2457, subsection B, paragraph 2.

4.  Monies paid to the authority by the recipients of in lieu water at a groundwater savings facility, in accordance with section 45-2455, subsection C.

5.  Monies collected in accordance with section 45‑611, subsection C, paragraph 3.

6.  Monies deposited in the banking fund in accordance with section 48‑3715.03, subsection B.

7.  Monies paid to the authority by agencies that have entered into interstate water banking agreements with the authority in accordance with section 45‑2471.† All monies received through an interstate water banking agreement with the state of Nevada that are not used to purchase or store water or otherwise fulfill contractual obligations with the state of Nevada are subject to legislative appropriation.

8.  Monies paid to the authority by persons and Indian communities in this state that have entered into water banking services agreements with the authority in accordance with section 45‑2458.

C.  In addition to the monies prescribed in this section, the authority may accept any gifts, grants or donations and deposit those monies in the banking fund.

D.  Monies in the banking fund are exempt from lapsing under the provisions of section 35‑190 relating to lapsing of appropriations.  On notice from the authority, the state treasurer shall invest and divest monies in the fund as provided by section 35‑313, and monies earned from investment shall be credited to the banking fund.† The authority may invest the monies paid to the authority in accordance with section 45‑2471, Arizona Revised Statutes, with the state treasurer pursuant to section 35‑326, Arizona Revised Statutes.

E.  The authority may use the banking fund to pay all reasonable expenses incurred in carrying out its duties and responsibilities in accordance with this chapter.

F.  The authority shall establish a reserve subaccount in the fund for the deposit of monies to be used for the purposes of article 5 of this chapter.END_STATUTE

Sec. 8.  Section 45-2457, Arizona Revised Statutes, as amended by Laws 2005, chapter 143, section 6, is amended to read:

START_STATUTE45-2457.  Accounting; rules of operation

A.  The authority shall develop an accounting system for the long‑term storage credits accrued by the authority.† The accounting system shall be designed to allow the authority to determine which funding source of the banking fund paid for each long‑term storage credit accrued by the authority.

B.  The authority shall operate in accordance with all of the following rules of operation:

1.  The authority shall reserve a reasonable number of long‑term storage credits accrued with general fund appropriations, other than general fund appropriations for replenishment under chapter 15, article 3 of this title, for the benefit of municipal and industrial users of Colorado river water in this state that are outside of the service area of CAWCD.

2.  The authority may distribute long‑term storage credits accrued with general fund appropriations, other than general fund appropriations for replenishment under chapter 15, article 3 of this title, for both of the following:

(a)  To make water available to a municipal and industrial user of Colorado river water in this state that is outside of the service area of CAWCD, if both of the following apply:

(i)  The municipal and industrial user would otherwise suffer a water shortage.  The authority may distribute long‑term credits to the extent reasonably necessary to offset the water shortage.

(ii)  The authority collects reimbursement for the cost to the authority of replacing the long‑term storage credits distributed.  The authority may replace the long‑term storage credits in any year it deems appropriate but shall use good faith efforts to replace the long‑term storage credits at a reasonable cost to the person who is responsible for reimbursing the authority for the credits distributed.

(b)  To make water available to CAWCD to the extent necessary for CAWCD to meet the demands of its municipal and industrial subcontractors, if all of the following apply:

(i)  CAWCD's normal diversions from the Colorado river have been or will be disrupted by shortages on the river or by disruptions in the operation of the central Arizona project.

(ii)  The authority does not distribute for this purpose the long‑term storage credits reserved in accordance with paragraph 1.

(iii)  The authority collects reimbursement from CAWCD for the cost to the authority of replacing the long‑term storage credits distributed.  The authority may replace the long‑term storage credits in any year it deems appropriate but shall use good faith efforts to replace the long‑term storage credits at a reasonable cost to CAWCD.

3.  The authority may distribute or extinguish long‑term storage credits accrued with general fund appropriations, other than general fund appropriations for replenishment under chapter 15, article 3 of this title, to implement the settlement of water right claims by Indian communities in this state.

4.  On request from the director, the authority may extinguish long‑term storage credits accrued with general fund appropriations, other than general fund appropriations for replenishment under chapter 15, article 3 of this title, to fulfill the water management objectives set forth in chapter 2 of this title.

5.  The authority may exchange long‑term storage credits accrued with general fund appropriations for long‑term storage credits held by other persons if the long‑term storage credits received by the authority were stored in a location that better enables the authority to fulfill the purposes and policies of this chapter than were the long‑term storage credits exchanged by the authority.† For the purposes of this paragraph, the authority may make exchanges of long‑term storage credits stored in one active management area for long‑term storage credits stored in a different active management area or of long‑term storage credits stored in one groundwater basin for long‑term storage credits stored in a different groundwater basin.

6.  The authority shall distribute or extinguish long‑term storage credits accrued with monies collected in accordance with section 45‑611, subsection C, paragraph 3 only for the benefit of the active management area in which the monies were collected.† The authority may distribute or extinguish these long‑term storage credits to the extent necessary to meet the demands of CAWCD's municipal and industrial subcontractors during times in which CAWCD's diversions from the Colorado river have been or will be disrupted by shortages on the Colorado river or by disruptions in operation of the central Arizona project, to implement the settlement of water right claims by Indian communities in this state or, on request from the director, to meet the other water management objectives set forth in chapter 2 of this title.† The authority may use the monies collected in the Pinal active management area under section 45‑611, subsection C, paragraph 3 to acquire long‑term storage credits for replenishment purposes under chapter 15, article 3 of this title.

7.  The authority shall distribute long‑term storage credits accrued with monies deposited in the fund in accordance with section 48‑3715.03, subsection B only for the benefit of the county in which the monies were collected.† The authority shall distribute these long‑term storage credits to CAWCD to the extent necessary to meet the demands of CAWCD's municipal and industrial subcontractors during times in which CAWCD's diversions from the Colorado river have been or will be disrupted by shortages on the Colorado river or by disruptions in operation of the central Arizona project.

8.  For each county within the CAWCD service area, on a determination by the authority that the number of long‑term storage credits accrued with monies deposited in the fund in accordance with section 48‑3715.03, subsection B exceeds the needs specified in paragraph 7 for that county, the authority shall distribute those excess long‑term storage credits to municipal water providers within that county that are at the time of distribution experiencing surface water supply shortages not associated with the central Arizona project.  The authority shall distribute to each such municipal water provider the lesser of the following number of long‑term storage credits:

(a)  The total number of credits determined to be available by the authority under this paragraph multiplied by the percentage produced by dividing a numerator equaling the amount of revenues paid pursuant to section 48‑3715.02, subsections B and C by taxpayers that are within both the boundaries of the municipal provider that is experiencing the shortage and the boundaries of the surface water supply system that is experiencing the shortage by a denominator equaling the total revenues paid pursuant to section 48‑3715.02, subsections B and C by all taxpayers that are located within both the boundaries of a municipal water provider and the boundaries of a surface water supply system in the county.† In making these computations, the authority shall use the amounts of revenue paid by taxpayers during the most recent tax year for which this information is available.

(b)  Twenty per cent of the total surface water shortage that the municipal and industrial water provider is experiencing.

9.  The authority shall distribute or replace long‑term storage credits accrued with monies collected pursuant to water banking services agreements in accordance with the terms of those agreements.

10.  The authority shall acquire sufficient water supplies to perform its replenishment responsibilities under chapter 15, article 3 of this title. The authority shall acquire those water supplies with monies appropriated from the state general fund by the legislature for replenishment under chapter 15, article 3 of this title and to the extent that monies appropriated by the legislature for that purpose are not available, with monies collected in the Pinal active management area under section 45‑611, subsection C, paragraph 3.† The authority shall use the water supplies acquired pursuant to this paragraph for any replenishment activity authorized by section 45‑2623 and for implementation of the southside replenishment bank established by section 45‑2624, including delivering water directly to the Gila river Indian community for those purposes.

C.  Any other long‑term storage credits accrued by the authority may be distributed or extinguished by the authority in accordance with the policy and purposes of this chapter.

D.  Except as provided by subsection B, paragraph 7 of this section and except as provided by agreements entered into by the authority, the decision to distribute or extinguish any long‑term storage credit accrued by the authority is at the complete discretion of the authority. END_STATUTE

Sec. 9.  Title 45, chapter 14, Arizona Revised Statutes, is amended by adding article 5, to read:

ARTICLE 5.  INDIAN FIRMING MEASURES

START_STATUTE45-2491.  State commitments to firm Indian settlement water

A.  The authority shall act as agent for this state in meeting this stateís obligation to deliver water in times of shortage pursuant to Public Law 108-451, fulfilling the requirements of sections 105, 207(c)(I)(ii) and 302(b)(8), and the Indian firming measures established pursuant to this article.† In carrying out this obligation the authority may:

1.  Store water at permitted recharge facilities for the purpose of Indian firming.

2.  Enter into contracts or agreements with the United States and Indian communities for storage, recovery or direct delivery of water for Indian firming.

3.  Enter into leasing agreements with one or more Indian communities in partnership with other entities for non-Indian agricultural priority or Indian priority central Arizona project water.

4.  Enter into contracts for the use of water sources including Colorado river water, surface water other than Colorado river water and effluent.

5.  Enter into contracts with eligible entities for the use of imported groundwater from allowable groundwater basins pursuant to sections 45-552, 45-553 and 45-554 for the purposes of Indian firming.

6.  Enter into agreements with a multi-county water conservation district established pursuant to title 48, chapter 22 for delivery of water to Indian communities.

7.  Subject to periodic review of progress toward meeting this stateís Indian firming obligation, allow for the use of existing long-term storage credits developed from withdrawal fees collected pursuant to section 45-611, subsection c, paragraph 3.

8.  Transfer long-term storage credits to a multi‑county water conservation district established pursuant to title 48, chapter 22 for recovery and subsequent delivery to Indian communities in times of shortage.

9.  Enter into agreements for the recovery of long-term storage credits for purposes of Indian firming.

B.  Indian firming measures established pursuant to this article shall include funding from the following sources:

1.  Legislative appropriations provided for Indian firming on an annual basis to carry out Indian firming measures.

2.  To the extent necessary to carry out Indian firming measures after expenditure of legislative appropriations, the authority may use withdrawal fees collected from the phoenix, Pinal and Tucson active management area water management accounts. END_STATUTE

Sec. 10.  Section 45-2601, Arizona Revised Statutes, is amended to read:

START_STATUTE45-2601.  Definitions

Unless the context otherwise requires, the terms defined in sections 45‑402 and 45‑802.01 have the same meaning in this chapter and for the purposes of this chapter:

1.  "Central protection zone" means the central protection zone established under section 45‑2602.

2.  "Community" means the Gila river Indian community, a government composed of members of the Pima tribe and the Maricopa tribe and organized under section 16 of the act of June 18, 1934 (25 United States Code section 476).

3.  "Dam" has the meaning prescribed in section 45‑1201 on January 1, 2005.

4.  "Designed storage capacity" means the storage capacity in acre‑feet of a reservoir at the elevation of the lowest spillway in the dam impounding water in the reservoir, as the dam was originally constructed.

5.  "Eastern protection zone" means the eastern protection zone north or the eastern protection zone south.

6.  "Eastern protection zone north" means the eastern protection zone north established under section 45‑2602, subsection A.

7.  "Eastern protection zone south" means the eastern protection zone south established under section 45‑2602, subsection A.

8.  "Gila river maintenance area" means the Gila river maintenance area established under section 45‑2603, subsection A.

9.  "Gila river maintenance area impact zone" means the Gila river maintenance area impact zone established under section 45‑2603, subsection B.

10.  "Globe equity decree" means the decree dated June 29, 1935 and entered in United States of America v. Gila valley irrigation district, Globe equity No. 59, et al. by the United States district court for the district of Arizona and includes all court orders and decisions supplemental to that decree.

11.  "Industrial use" means all of the following:

(a)  A nonirrigation use of water commenced after December 31, 2002 that is not supplied by a municipal provider, including animal industry use and expanded animal industry use.

(b)  A use of groundwater commenced before January 1, 2003 by a holder of a type 1 nonirrigation grandfathered right in existence on December 31, 2002, other than a type 1 nonirrigation grandfathered right held by a municipal provider and other than a use under another groundwater right or permit, in excess of the amount allowed under the type 1 nonirrigation grandfathered right.

(c)  A use of groundwater commenced before January 1, 2003 by a holder of a type 2 nonirrigation grandfathered right in existence on December 31, 2002, other than a type 2 nonirrigation grandfathered right held by a municipal provider, in excess of the amount allowed under the right and for which the holder has no other groundwater right.

(d)  A use of groundwater commenced before January 1, 2003 by a holder of a general industrial use permit issued under section 45‑515 and in existence on December 31, 2002, other than a use under another groundwater right or permit, in excess of the amount allowed under the general industrial use permit.

12.  "Irrigation use" means the use of water on two or more acres of land to produce plants or parts of plants for sale or human consumption, or for use as feed for livestock, range livestock or poultry, as defined in section 3‑1201.

13.  "Municipal acreĒ means the acre or acres of land within a protection zone, on which water pumped from within a protection zone is supplied by a municipal provider, on which water use was first commenced after December 31, 2002 and for which the water use is reported pursuant to section 45‑632, 45‑875.01 or 45‑2602.

14.  "Municipal provider" means a city, town, private water company or irrigation district special taxing district established pursuant to title 48 that supplies water for nonirrigation use.

15.  "Municipal use" means a nonirrigation use of water commenced after December 31, 2002 and supplied by a municipal provider on municipal acres.

16.  "Nonirrigation use" means a use of water withdrawn from a well, other than an irrigation use.

17.  "Reservation" means the Gila river Indian community reservation.

18.  "Settlement agreement" means the agreement entitled the "Gila river Indian community water rights settlement agreement", dated February 4, 2003 between the community, this state and other parties, as amended before the effective date of this section December 21, 2005, a copy of which is on file in the department.

19.  "Southside protection zones" means the eastern protection zone north, the eastern protection zone south, the western municipal protection zone, the western municipal and industrial protection zone and the central protection zone.

20.  "Stockpond" means a pond that has a capacity of not more than fifteen acre‑feet and that is used solely for watering livestock or wildlife. Stockpond does not include a pond used primarily for fishing or for the culturing of fish.

21.  "Stored water" means water that has been stored or saved underground pursuant to a storage permit issued under chapter 3.1 of this title.

22.  "Underground water" means water, other than stored water, withdrawn from a well.

23.  "Water company" means either of the following:

(a)  A private water company that as of January 1, 2000 was regulated as a public service corporation by the Arizona corporation commission and was withdrawing underground water from lands now within the eastern protection zone north.

(b)  Any successor of a private water company described in subdivision (a) of this paragraph.

24.  "Western municipal and industrial protection zone" means the western municipal and industrial protection zone established under section 45‑2602, subsection A.

25.  "Western municipal protection zone" means the western municipal protection zone established under section 45‑2602, subsection A.

26.  "Western protection zones" means the western municipal protection zone and the western municipal and industrial protection zone. END_STATUTE

Sec. 11.  Section 45-2611, Arizona Revised Statutes, is amended to read:

START_STATUTE45-2611.  Transportation of underground water and stored water away from an eastern protection zone or western protection zone prohibited; exceptions

A.  Except as provided in subsection B of this section, beginning on the effective date of this section, underground water or stored water withdrawn in an eastern protection zone or a western protection zone may not be transported away from the protection zone in which the water was withdrawn if the transportation is for a nonirrigation use.

B.  Subsection A of this section does not apply to any of the following:

1.  The transportation of underground water or stored water away from an eastern protection zone or a western protection zone for a nonirrigation use in an annual amount that does not exceed the highest annual volume of underground water or stored water transported away from the same protection zone for that use during calendar years 1999 through 2001.

2.  The transportation of underground water or stored water away from an eastern protection zone or a western protection zone for a nonirrigation use if the person transporting the underground water or stored water replenishes the water as provided in section 45‑2625 within twenty-four months after the end of the calendar year in which the transportation occurs.

3.  The transportation of underground water or stored water away from an eastern protection zone or a western protection zone for a nonirrigation use if the person transporting the underground water or stored water replaces the water with an equivalent amount of water imported into that protection zone within the same calendar year in which the transportation occurs.

4.  The transportation of stored water away from an eastern protection zone or a western protection zone if the stored water was originally stored in the protection zone from which the water was recovered.

5.  The transportation of underground water or stored water between the eastern protection zone north and the eastern protection zone south.

6.  The transportation of underground water or stored water between the western municipal and industrial protection zone and the western municipal protection zone if the water is transported for a municipal use on municipal acres.

7.  Through 2023, the transportation of underground water and stored water withdrawn by a water company within an eastern protection zone and transported by the water company for municipal uses outside of the eastern protection zones.† For the purposes of this paragraph, stored water does not include any water stored within an eastern protection zone and recovered within that protection zone.

8.  Beginning with calendar year 2024, the annual transportation of up to one thousand two hundred seventy-five acre-feet of underground water and stored water withdrawn by a water company within an the eastern protection zone zones and transported by the water company for municipal uses outside of the eastern protection zones.† For the purposes of this paragraph, stored water does not include any water stored within an eastern protection zone and recovered within that protection zone. END_STATUTE

Sec. 12.  Section 45-2622, Arizona Revised Statutes, is amended to read:

START_STATUTE45-2622.  Annual southside replenishment obligations

A.  No later than October 1 of each calendar year following the year in which this section becomes effective, the director shall calculate the southside replenishment obligations for the preceding calendar year and notify the authority of the amount of the obligations.

B.  The director shall calculate the southside replenishment obligations for a calendar year as follows:

1.  The director shall calculate the municipal and industrial replenishment obligation for the western municipal and industrial protection zone for the year as follows:

(a)  Determine the total amount of underground water and stored water withdrawn during the year from within the western municipal and industrial protection zone for municipal uses within a western protection zone and the total amount of underground water and stored water withdrawn during the year from within the western municipal and industrial protection zone for industrial uses within the western municipal and industrial protection zone, as reported to the director under sections 45‑632, 45‑875.01 and 45‑2602.† For the purposes of this subdivision, stored water does not include any water stored at a storage facility located within the western municipal and industrial protection zone or any water stored and recovered on an annual basis pursuant to section 45‑851.01.

(b)  Divide the volume of water determined in subdivision (a) of this paragraph by the total number of municipal acres and industrial acres within the western protection zones on which the water was used during the year.

(c)  Multiply the total number of municipal acres and industrial acres within the western protection zones on which the water determined in subdivision (a) of this paragraph was used during the year by two acre‑feet.

(d)  Subtract the product in subdivision (c) of this paragraph from the quotient in subdivision (b) of this paragraph.† The result is the municipal and industrial replenishment obligation for the western municipal and industrial protection zone for the year, except that if the result is less than zero, there is no replenishment obligation.

2.  The director shall calculate the municipal replenishment obligation for the western municipal protection zone for the year as follows:

(a)  Determine the total amount of underground water and stored water withdrawn during the year from within the western municipal protection zone for municipal uses within a western protection zone, as reported to the director under sections 45‑632, 45‑875.01 and 45‑2602.† For the purposes of this subdivision, stored water does not include any water stored at a storage facility located within the western municipal protection zone or any water stored and recovered on an annual basis pursuant to section 45‑851.01.

(b)  Divide the volume of water determined in subdivision (a) of this paragraph by the total number of municipal acres within the western protection zones on which the water was used during the year.

(c)  Multiply the total number of municipal acres within the western protection zones on which the water determined in subdivision (a) of this paragraph was used during the year by two acre‑feet.

(d)  Subtract the product in subdivision (c) of this paragraph from the quotient in subdivision (b) of this paragraph.† The result is the municipal replenishment obligation for the western municipal protection zone for the year, except that if the result is less than zero, there is no replenishment obligation.

3.  The director shall calculate the municipal and industrial replenishment obligation for the eastern protection zone north for the year as follows:

(a)  Determine the total amount of underground water and stored water withdrawn during the year from within the eastern protection zone north for municipal uses and industrial uses within an eastern protection zone, as reported to the director under sections 45‑632, 45‑875.01 and 45‑2602.† For the purposes of this subdivision, stored water does not include any water stored at a storage facility located within the eastern protection zone north or any water stored and recovered on an annual basis pursuant to section 45‑851.01.

(b)  Determine the total amount of underground water and stored water withdrawn during the year by a water company from within the eastern protection zone south and used for municipal uses within the eastern protection zone north.† For the purposes of this subdivision, stored water does not include any water stored at a storage facility located within the eastern protection zone south or any water stored and recovered on an annual basis pursuant to section 45‑851.01.

(c)  Add the volumes of water in subdivisions (a) and (b) of this paragraph and then divide the sum by the total number of municipal acres and industrial acres within the eastern protection zones on which the water was used during the year.

(d)  Multiply the total number of municipal acres and industrial acres within the eastern protection zones on which the water determined in subdivision (c) of this paragraph was used during the year by 2.33 acre‑feet.

(e)  Subtract the product in subdivision (d) of this paragraph from the quotient in subdivision (c) of this paragraph.† The result is the municipal and industrial replenishment obligation for the eastern protection zone north for the year, except that if the result is less than zero, there is no replenishment obligation.

4.  The director shall calculate the municipal and industrial replenishment obligation for the eastern protection zone south for the year as follows:

(a)  Determine the total amount of underground water and stored water withdrawn during the year from within the eastern protection zone south for municipal uses and industrial uses within an eastern protection zone, as reported to the director under sections 45‑632, 45‑875.01 and 45‑2602.† For the purposes of this subdivision, stored water does not include any water stored at a storage facility located within the eastern protection zone south or any water stored and recovered on an annual basis pursuant to section 45‑851.01.

(b)  Determine the total amount of underground water and stored water withdrawn during the year by a water company from within the eastern protection zone south and used for municipal uses within the eastern protection zone north.† For the purposes of this subdivision, stored water does not include any water stored at a storage facility located within the eastern protection zone south or any water stored and recovered on an annual basis pursuant to section 45‑851.01.

(c)  Subtract the volume in subdivision (b) of this paragraph from the volume in subdivision (a) of this paragraph and then divide the difference by the total number of municipal acres and industrial acres within the eastern protection zones on which the water determined in subdivision (a) of this paragraph other than water determined in subdivision (b) of this paragraph was used during the year.

(d)  Multiply the total number of municipal acres and industrial acres within the eastern protection zones on which the water determined in subdivision (a) of this paragraph other than water determined in subdivision (b) of this paragraph was used during the year by 2.33 acre‑feet.

(e)  Subtract the product in subdivision (d) of this paragraph from the quotient in subdivision (c) of this paragraph.† The result is the municipal and industrial replenishment obligation for the eastern protection zone south for the year, except that if the result is less than zero, there is no replenishment obligation.

5.  The director shall calculate the irrigation replenishment obligation for the western municipal and industrial protection zone and the western municipal protection zone for the year as follows:

(a)  Determine the total amount of underground water and stored water withdrawn during the year from within the western municipal and industrial protection zone and the western municipal protection zone and used for the irrigation of lands within those protection zones, as reported to the director on the annual reports required by sections 45‑632, 45‑875.01 and 45‑2602.† For the purposes of this subdivision, stored water does not include any water stored at a storage facility located within the western municipal and industrial protection zone or the western municipal protection zone.

(b)  For each farm within the western municipal and industrial protection zone and the western municipal protection zone for which an annual report is filed under section 45‑632, 45‑875.01 or 45‑2602 for the year, calculate the maximum amount of groundwater that may be used on the farm for irrigation purposes during the year without causing the flexibility account for the farm to be in arrears in excess of the amount allowed under section 45‑467, subsection I.† In making this calculation, the director shall use the irrigation water duty established for the farm for the third management period pursuant to section 45‑566, subsection A, paragraph 1.

(c)  Add together the amount calculated for each farm under subdivision (b) of this paragraph.

(d)  Subtract the amount in subdivision (c) of this paragraph from the amount in subdivision (a) of this paragraph.† The difference is the irrigation replenishment obligation for the year for the western municipal and industrial protection zone and the western municipal protection zone, except that if the difference is less than zero, there is no replenishment obligation.

6.  The director shall calculate the irrigation replenishment obligation for the eastern protection zone north and the eastern protection zone south for the year as follows:

(a)  Determine the total amount of underground water and stored water withdrawn during the year from within the eastern protection zone north and the eastern protection zone south and used for the irrigation of lands within those protection zones, as reported to the director on the annual reports required by section 45‑632, section 45‑875.01, subsection D and section 45‑2602.† For the purposes of this subdivision, stored water does not include any water stored at a storage facility located within the eastern protection zone north or the eastern protection zone south.

(b)  For each farm within the eastern protection zone north and the eastern protection zone south for which an annual report is filed under section 45‑632, 45‑875.01 or 45‑2602 for the year, calculate the maximum amount of groundwater that may be used on the farm for irrigation purposes during the year without causing the flexibility account for the farm to be in arrears in excess of the amount allowed under section 45‑467, subsection I.  In making this calculation, the director shall use the irrigation water duty established for the farm for the third management period pursuant to section 45‑566, subsection A, paragraph 1.

(c)  Add together the amount calculated for each farm under subdivision (b) of this paragraph.

(d)  Subtract the amount in subdivision (c) of this paragraph from the amount in subdivision (a) of this paragraph.† The difference is the irrigation replenishment obligation for the year for the eastern protection zone north and the eastern protection zone south, except that if the difference is less than zero, there is no replenishment obligation.

7.  Through 2023, the director shall calculate the water company replenishment obligation for the year by determining the amount of underground water and stored water withdrawn during the year from within an the eastern protection zone zones by a water company and transported for municipal uses outside of the eastern protection zones and then subtracting from that amount one thousand two hundred seventy‑five acre‑feet.† The difference is the water company replenishment obligation for the year, except that if the difference is less than zero, there is no replenishment obligation.† For the purposes of this paragraph, stored water does not include any water stored at a storage facility located within an eastern protection zone and recovered within that protection zone. END_STATUTE

Sec. 13.  Section 45-2626, Arizona Revised Statutes, is amended to read:

START_STATUTE45-2626.  Individual replenishment obligations of persons using underground water or stored water within an eastern protection zone or a western protection zone for industrial use; enforcement action; notice

A.  If there is a municipal and industrial replenishment obligation for the eastern protection zone north for any year, as calculated under section 45‑2622, subsection B, any person who withdraws underground water or stored water from within that protection zone during the year for an industrial use within an eastern protection zone in an amount that exceeds a volume calculated by multiplying the number of industrial acres associated with the industrial use by three and one‑half acre‑feet shall have an individual replenishment obligation for that year in the amount of the excess, except that if the industrial use was commenced prior to January 1, 2003, the replenishment obligation shall be limited to the volume of groundwater withdrawn in excess of the amount allowed under the industrial userís type 1 nonirrigation grandfathered right, type 2 nonirrigation grandfathered right or general industrial use permit issued under section 45‑515.† For the purposes of this subsection, stored water does not include any water stored at a storage facility located within the eastern protection zone north or any water stored and recovered on an annual basis pursuant to section 45‑851.01.

B.  If there is a municipal and industrial replenishment obligation for the eastern protection zone south for any year, as calculated under section 45‑2622, subsection B, any person who withdraws underground water or stored water from within that protection zone during the year for an industrial use within an eastern protection zone in an amount that exceeds a volume calculated by multiplying the number of industrial acres associated with the industrial use by three and one‑half acre‑feet shall have an individual replenishment obligation for that year in the amount of the excess, except that if the industrial use was commenced prior to January 1, 2003, the replenishment obligation shall be limited to the volume of groundwater withdrawn in excess of the amount allowed under the industrial userís type 1 nonirrigation grandfathered right, type 2 nonirrigation grandfathered right or general industrial use permit issued under section 45‑515.† For the purposes of this subsection, stored water does not include any water stored at a storage facility located within the eastern protection zone south or any water stored and recovered on an annual basis pursuant to section 45‑851.01.

C.  If there is a municipal and industrial replenishment obligation for the western municipal and industrial protection zone for any year, as calculated under section 45‑2622, subsection B, any person who withdraws underground water or stored water from within that protection zone during the year for an industrial use within that protection zone in an amount that exceeds a volume calculated by multiplying the number of industrial acres associated with the industrial use by three and one‑half acre‑feet shall have an individual replenishment obligation for that year in the amount of the excess, except that if the industrial use was commenced prior to January 1, 2003, the replenishment obligation shall be limited to the volume of groundwater withdrawn in excess of the amount allowed under the industrial userís type 1 nonirrigation grandfathered right, type 2 nonirrigation grandfathered right or general industrial use permit issued under section 45‑515.† For the purposes of this subsection, stored water does not include any water stored at a storage facility located within the western municipal and industrial protection zone or any water stored and recovered on an annual basis pursuant to section 45‑851.01.

D.  A person who has an individual replenishment obligation under subsection A, B or C of this section shall satisfy the obligation no later than twelve months after the authority sends written notice of the obligation to the person as provided in subsection E of this section.† The person shall satisfy the obligation by performing one of the following replenishment activities in an amount equivalent to the replenishment obligation:

1.  Pay the authority the actual or estimated cost of replenishing the water under section 45‑2623, subsection C as determined by the authority and included in the notice described in subsection E of this section.

2.  If approved by the authority, deliver water or long‑term storage credits to the authority in the amount of the replenishment obligation.

E.  No later than December 31 of each year, the authority shall send written notice to each person who has an individual replenishment obligation for the preceding year.† The notice shall be sent by first‑class mail to the personís mailing address on file with the department.† The notice shall specify the amount of the replenishment obligation, the authorityís actual or estimated cost of replenishing the water under section 45‑2623, subsection C, the date by which the person must satisfy the replenishment obligation and the manner in which the person may satisfy the replenishment obligation.

F.  If a person with an individual replenishment obligation fails to satisfy the replenishment obligation by the date specified in the written notice received from the authority, the person shall be subject to an enforcement action by the department pursuant to article 6 of this chapter.

G.  The director shall include written notice of the requirements of this section in any groundwater withdrawal permit, nonirrigation grandfathered right authorization to drill a nonexempt well under section 45‑596 or recovery well permit issued in an eastern protection zone or the western municipal and industrial protection zone after the effective date of this section. END_STATUTE

Sec. 14.  Effective date; condition

The following are effective as prescribed in Laws 2005, chapter 143, section 15:

1.  Section 45-611, Arizona Revised Statutes, as amended by Laws 2005, chapter 143, section 1 and this act.

2.  Section 45-2423, Arizona Revised Statutes, as amended by Laws 2005, chapter 143, section 4 and this act.

3.  Section 45-2425, Arizona Revised Statutes, as amended by Laws 2005, chapter 143, section 5 and chapter 332, section 1 and this act.

4.  Section 45-2457, Arizona Revised Statutes, as amended by Laws 2005, chapter 143, section 6 and this act.

5.  Sections 45-2611, 45-2622 and 45-2626, Arizona Revised Statutes, as amended by this act.