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ARIZONA STATE SENATE

Forty-seventh Legislature, Second Regular Session

FACT SHEET FOR H.B. 2835

Arizona water settlements act; implementation

Purpose

            Expands the powers and duties of the Arizona Water Banking Authority (AWBA) relating to the state’s obligation for firming Indian water supplies pursuant to federal law and modifies other areas of the Groundwater Code for Indian firming purposes. 

Background

            The Arizona Water Settlements Act was enacted by Congress in 2004 to resolve the Gila River Indian Community’s (GRIC) water rights claims and related issues.  Subsequently, Laws 2005, Chapter 143 established fees and programs to meet some of the GRIC water rights settlement requirements and created the Arizona Water Firming Program Study Commission (Commission) to make additional recommendations. 

            An element of the settlement is an obligation to firm the water supply to GRIC.  Specifically, the state committed to firming 15,000 acre feet (af) allocated to GRIC and 8,724 af to be reallocated to Arizona Indian tribes.  Firming means to increase the reliability of the water supply by supplementing water supplies during periods when supplies are limited.  The AWBA banks unused Colorado River water to be used in times of shortage to firm Arizona municipal and industrial water supplies, fulfill the water management objectives of the state and also provide an opportunity to store water to be available for implementation of the settlement of water rights claims by Indian communities within Arizona. 

            The Commission recommended four strategies for meeting the firming obligations:  traditional storage and recovery, leasing of other water supplies that can be delivered to GRIC during times of shortage, leasing of GRIC non-Indian agricultural priority water supply that needs to be firmed and delivering water supplies to GRIC before a shortage occurs.  Other recommendations involved providing the AWBA with specific authorities needed to implement the Indian water firming strategies.  These recommendations are reflected in H.B. 2835.

            In order to fund the Indian firming obligation, the Commission recommended three options:  request the Legislature make a state General Fund appropriation, continue the transfer of groundwater withdrawal fees collected in the Phoenix, Pinal and Tucson Active Management Areas (AMAs) and, if the other options are insufficient, use existing storage credits from the Phoenix, Pinal and Tucson AMAs that were stored by using previously collected withdrawal fees. 

According to the Commission’s final report, the cost to the state for firming water pursuant to the Arizona Water Settlements Act is estimated at $15,660,000 to $52,190,000, dependent upon the contracts and arrangements that are made by the parties to the settlement as authorized by this bill.  H.B. 2835 requires any state General Fund appropriation to be spent first before revenues from groundwater withdrawal fees can be utilized; however, the bill does not appropriate any state General Fund monies.

Provisions

AWBA Indian Firming

1. Requires the AWBA to act as the agent for the State of Arizona for meeting the state’s obligations for firming Indian water supplies, including direct delivery of water to Indian communities, leasing of non-Indian agricultural priority water and leasing Indian priority Central Arizona Project (CAP) water.

2. Requires the AWBA to enter into contracts necessary for obtaining surface water other than Colorado River water for storage, storing water for Indian firming purposes and distributing long-term storage credits earned by the AWBA to Indian communities to firm their water supplies.

3. Allows the AWBA to store water at permitted recharge facilities for Indian firming.

4. Allows the AWBA to enter into contracts or agreements with the United States and Indian communities for storage, recovery or direct delivery of water for Indian firming.

5. Allows the AWBA, in partnership with other entities, to enter into water leasing agreements with Indian communities for non-Indian agricultural priority or Indian priority CAP water.

6. Allows the AWBA to enter into contracts to transfer groundwater from McMullen Valley and the Harquahala Irrigation Non-expansion Area (INA) for Indian firming and permits the transfer.

7. Allows the AWBA to enter into agreements with CAP for delivery of water to Indian communities.

8. Allows the AWBA to use existing long-term storage credits developed from withdrawal fees collected in the Tucson and Phoenix AMAs for Indian firming.  Stipulates that the use of these long-term storage credits is subject to periodic review.

9. Allows the AWBA to transfer long-term storage credits to CAP for recovery and delivery to Indian communities in times of water shortage.

10. Allows the AWBA to enter into agreements for the recovery of long-term storage credits for Indian firming.

Funding for Indian Water Firming

11. Requires Indian firming to be funded first by annual legislative appropriation and, if necessary after legislative appropriations have been spent, by withdrawal fees collected from the Phoenix, Pinal and Tucson AMAs.

12. Extends, in perpetuity, the $2.50 per acre foot annual groundwater withdrawal fee in the Tucson and Phoenix AMAs for Arizona water banking purposes.

13. Requires the AWBA to create a reserve subaccount in the Arizona Water Banking Fund for the deposit of monies to be used for Indian water firming.

Definitions

14. Expands the definition of “municipal provider” to include a special taxing district that supplies water for nonirrigation use.

15. Expands the definition of “water banking services” to include delivery of water directly to Indian communities.

16. Defines “Indian firming” to be consistent with federal law.

17. Revises the definition of “settlement agreement” to incorporate amendments to the agreement that occurred before December 21, 2005.

Miscellaneous

18. Allows long term storage credits to be used to meet the needs of Central Arizona Water Conservation District subcontractors during times of shortage or in the event the CAP canal operations are disrupted.

19. Requires the AWBA to annually determine the quantity of non-Colorado River water and effluent to be stored by the AWBA and where it will be stored.

20. States that it is in the best interest of the state to provide the opportunity to facilitate the settlement of Indian water rights claims by delivering and storing water.

21. Corrects provisions related to calculating replenishment obligations.

22. Makes technical and conforming changes.

23. Continues a conditional enactment of certain provisions of the GRIC Water Settlement Program (Laws 2005, Chapter 143) based on the Secretary of Interior’s final approval of the Arizona Water Settlements Act by December 31, 2010.

24. Becomes effective on the general effective date, subject to the provisions of the conditional enactment.

House Action

NRA               2/13/06     DP     10-0-0

3^rd Read           3/2/06                  56-1-3

Prepared by Senate Research

March 6, 2006

FB/jas