HB2952 - 571R

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

Section 1. Title 3, chapter 1, article 1, Arizona Revised Statutes, is amended by adding section 3-109.04, to read:

START_STATUTE3-109.04. Agriculture and water innovation fund pilot program; fund; grants; requirements; annual report; definitions

A. The agriculture and water innovation fund pilot program is established to provide grants and collect data for water-focused innovation in agriculture. The department shall administer the pilot program.

B. The agriculture and water innovation fund is established consisting of legislative appropriations, grants from federal agencies and monies appropriated by any other lawful source. Monies in the fund are continuously appropriated and exempt from the provisions of section 35-190 relating to lapsing of appropriations. The department shall administer the fund and may use not more than three percent of the monies in the fund annually for the costs of administering the fund and the agriculture and water innovation fund pilot program.

C. The department may grant monies from the fund to qualified applicants to acquire or contract for implementing innovative technology that improves water use efficiency by improving soil health subject to the following conditions:

1. The grant may not exceed $2,000,000 for a single qualified applicant or for qualified applicants from the same farm unit or $5,000,000 if the qualified applicant is an irrigation district that will implement innovative technology pursuant to the pilot program on three or more farm units within the irrigation district.

2. The innovative technology is currently implemented throughout this state and has demonstrated consistent improvement in indicators of water use efficiency on fields implementing the technology. For the purposes of this paragraph, a demonstration of increased water use efficiency may include third-party validated commercial implementation of the innovative technology and does not require academic analysis.

3. The increase in water use efficiency proposed is a function of improved soil health due to implementing the innovative technology.

4. The qualified applicant provides a record of active farming or intentional water conservation for three of the previous five years for the proposed acreage at the time of the application.

5. The proposed acreage proposed to receive the innovative technology is located completely within this state.

D. In assessing an application, the department may give preference to implementing an innovative technology that the department determines:

1. Increases agricultural yields on fields that increase water use efficiency.

2. Improves water use efficiency on high-water-demand crops or high-value crops.

3. Maximizes benefits to soil health, including reduced need for cover cropping, reduction in soil salinity and improved disease resilience.

4. Provides opportunities for data collection and public demonstration of the technology for diverse high agricultural water use regions in this state.

E. Recipients of grant monies may not receive a state tax credit for the portion of an innovative technology that is purchased with grant monies.

F. The director may prepay the grantee for implementing the innovative technology if the contracted-for innovative technology service provider agrees in the contract to provide recourse to this state in the event of nonperformance.

G. As a condition of the grant, the department shall require the qualified applicant to:

1. Certify the installation of the new innovative technology.

2. Agree to use the new innovative technology for not less than three years.

3. Report on the individual fields that receive the benefit of the grant monies to demonstrate increased water use efficiency on the affected fields.

H. For a qualified applicant that uses mainstream Colorado River water or water delivered through the central Arizona project for agricultural irrigation that is impacted by this program, water savings may be used to farm fallowed irrigated acreage or be dedicated to system conservation as approved by the director of the department of water resources.

I. On or before December 31 of each year, the department shall submit a written report to the president of the senate and the speaker of the house of representatives describing the activities of the department for the preceding fiscal year related to the agriculture and water innovation fund and shall provide a copy of the report to the secretary of state. The report shall include an accounting of expenditures from the fund and how the monies were used to improve water efficiency and soil health. The report shall identify at least the following:

1. The specific fields where implementation of the innovative technology occurred.

2. The legal character of the water used on those fields.

3. The soil type and types of crops produced.

4. The improvement in water use efficiency resulting from implementing the innovative soil health technology and, if known, the amount of water conserved.

5. Cobenefits arising from implementing the innovative soil health technology, including yield increases, crop quality improvements and nutrient use efficiencies.

6. Any other relevant data to better inform future decisions on strategically implementing agriculture and water innovation technologies or programs to use agricultural water more efficiently in this state.

j. For the purposes of this section:

1. "Farm unit" means one or more farms that are irrigated with groundwater, surface water, mainstream Colorado River water or water delivered through the central Arizona project and that are contiguous or in proximity to each other with similar soil conditions.

2. "Innovative technology" means products or services that improve water use efficiency by improving soil health in agriculture without requiring nonnative soil amendments or improvements to irrigation infrastructure.

3. "Qualified applicant" means either of the following:

(a) An agricultural landowner, beneficial owner of trust land or lessee of agricultural land that has actively farmed the land or committed the land to intentional water conservation in three of the five calendar years immediately preceding the date of the application.

(b) An irrigation district established pursuant to title 48, chapter 19 that applies for the benefit of members of the irrigation district. END_STATUTE

Sec. 2. Delayed repeal

Section 3-109.04, Arizona Revised Statutes, as added by this act, is repealed from and after December 31, 2028.

Sec. 3. Section 45-611, Arizona Revised Statutes, 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 $5 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 $5 per acre-foot of water, other than stored water, that is withdrawn and beneficially used. For the 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 $.50 and not greater than $1 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.

3. For purchasing and retiring grandfathered rights, an amount not greater than $2 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 $5 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 $.50 but not more than $1 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 $1 per acre-foot per year.

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 of not more than $2 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, for Arizona water banking purposes, the amount of $2.50 per acre-foot per year. In the Pinal active management area, for Arizona water banking purposes, including replenishment under chapter 15, article 3 of this title, the director shall set the fee in an amount of not more than $2.50 per acre-foot per year, except that no fee shall be levied in the Pinal active management area for this purpose during calendar years 2020 through 2026 2027.

4. For purchasing and retiring grandfathered rights, an amount of not more than $2 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.

5. In the Pinal active management area, beginning from and after December 31, 2019 through December 31, 2026 2027, an amount of not more than $2.50 per acre-foot per year for groundwater and irrigation efficiency projects. END_STATUTE

Sec. 4. Section 45-615.01, Arizona Revised Statutes, is amended to read:

START_STATUTE45-615.01. Temporary groundwater and irrigation efficiency projects fund; purpose; report; definition

A. The temporary groundwater and irrigation efficiency projects fund is established for the purpose of funding projects for the construction and rehabilitation of wells and related infrastructure for the withdrawal and efficient delivery of groundwater by qualified irrigation districts in the Phoenix active management area, the Pinal active management area and the Harquahala irrigation non-expansion area. The fund consists of legislative appropriations, groundwater withdrawal fees collected in the Pinal active management area pursuant to section 45-611, subsection C, paragraph 5, grants from federal agencies and monies deposited in the fund by qualified irrigation districts in the Phoenix active management area, the Pinal active management area and the Harquahala irrigation non-expansion area. Groundwater withdrawal fees deposited in the fund shall be accounted for separately from other monies in the fund and shall be used only for constructing and rehabilitating wells and related infrastructure in the Pinal active management area. Monies in the fund are continuously appropriated for the purposes of this section.

B. The director may accept and deposit into the fund monies, grants, gifts, contributions and devises to assist in carrying out the purposes of this section.

C. The director shall administer the fund. On notice from the director, 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 fund.

D. The director may grant monies from the fund to qualified irrigation districts established pursuant to title 48, chapter 19 in the Phoenix active management area, the Pinal active management area and the Harquahala irrigation non-expansion area for the purposes described in subsection A of this section. In granting monies from the fund, the director may give preference to wells and related infrastructure that would be used to recover stored water. Grants made to qualified irrigation districts are exempt from title 41, chapter 24.

E. Before December 31 of each year, the director shall submit to the speaker of the house of representatives and the president of the senate a written report describing the activities of the department for the preceding fiscal year related to expenditures from the fund. The report shall include an accounting for expenditures from the fund and how the monies were used to finance projects for the construction and rehabilitation of wells and related infrastructure for the withdrawal and efficient delivery of groundwater by qualified irrigation districts in the Phoenix active management area, the Pinal active management area and the Harquahala irrigation non-expansion area.

F. Except as provided in subsection G of this section, monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

G. On June 30, 2027 2029, any unencumbered monies in the fund shall be proportionally distributed to the fund's contributors by December 31, 2027 2029 according to the total amount of monies deposited in the fund by each contributor. The proportion of the unencumbered monies attributable to groundwater withdrawal fees levied under section 45-611, subsection C, paragraph 5 shall be deposited in the Arizona water banking fund established by section 45-2425 and shall be used only in the Pinal active management area in the same manner as groundwater withdrawal fees collected in the Pinal active management area pursuant to section 45-611, subsection C, paragraph 3.

H. All monies deposited in the temporary groundwater and irrigation efficiency projects fund shall be held in trust. The monies in the fund may be used only for the purposes prescribed in this section and may not be appropriated or transferred by the legislature to fund the general operations of this state or to otherwise meet the obligations of the state general fund. This subsection does not apply to any taxes or other levies that are imposed pursuant to title 42 or 43.

I. For the purposes of this section, "qualified irrigation district" means an irrigation district that meets all of the following requirements:

1. The irrigation district received central Arizona project water in any year after calendar year 2014 other than through a groundwater savings facility permit issued under chapter 3.1 of this title.

2. There are at least nine thousand acres that may be lawfully irrigated within the boundaries of the irrigation district.

3. For an irrigation district located in the Phoenix active management area only, the district did not deliver surface water other than central Arizona project water in calendar year 2017.

4. The irrigation district submitted an application to the department for monies from the fund established by this section to construct an irrigation efficiency project in the Phoenix active management area, the Pinal active management area or the Harquahala irrigation non-expansion area. END_STATUTE

Sec. 5. Laws 2019, chapter 1, section 8 is amended to read:

Sec. 8. Delayed repeal

Section 45-615.01, Arizona Revised Statutes, as added amended by this act, is repealed from and after March 31, 2028 2030.

Sec. 6. Repeal

Laws 2023, chapter 138, section 2 is repealed.

Sec. 7. Laws 2023, chapter 138, section 3, as amended by Laws 2024, chapter 214, section 5, is amended to read:

START_STATUTESec. 3. Fire incident management fund; exemption; delayed repeal; transfer of monies

A. The fire incident management fund is established consisting of legislative appropriations. The department of administration shall administer the fund. Not more than $200,000 of monies appropriated to the fund may be used by the department of administration to administer the fund. Monies in the fund are continuously appropriated and are exempt from the provisions of section 35-190, Arizona Revised Statutes, relating to lapsing of appropriations. The department of administration shall distribute monies from the fund to provide grants to municipal fire departments and fire districts for hardware and software that:

1. Enables the statewide deployment of a secure incident management platform to fire and law enforcement agencies.

2. Provides a standardized incident command and management platform based on federal emergency management agency standards that enable diverse incident management and support entities to work together and ensure the following:

(a) A clearly defined chain of command.

(b) The use of common terminology.

(d) The achievement of response objectives.

(e) The efficient use of resources.

3. Provides a collaboration and communications solution that does the following:

(a) Identifies the location, status and assignment of assigned resources.

(b) Allows status updates, tracking and management of an incident.

(d) Allows the sharing of collaborative maps, building floor plans and images between public safety agencies.

(e) Allows collaboration and information sharing between disparate agencies during a mass casualty incident.

(f) Defines a federal emergency management agency or national incident management systems-based organizational structure for the management of incidents.

(g) Provides the ability to print standard integrated computer solutions forms for tracking and cost reimbursement.

(h) Provides enhanced telemetry-based firefighter safety monitoring.

(i) Works in areas without internet access in a disconnected mode.

(j) Provides a seamless and connected platform for notification, response and rostering.

(k) Provides cross-platform functionality.

(l) Provides a smartphone-based application for notification, accountability and situational awareness.

B. Each municipal fire department or fire district in this state may submit a grant request to the department of administration for the costs of the secure incident management system that meets all of the criteria described in subsection A of this section.

C. The department of administration shall award grants on a first-come, first-served basis. Grants that are awarded shall fully fund the costs of the secure incident management system for each municipal fire department or fire district for three years.

D. From and after June 30, 2025 2027, this section is repealed and all unexpended and unencumbered monies in the fire incident management fund established by this section revert to the state general fund. END_STATUTE

Sec. 8. Arizona water protection fund; use of monies

Notwithstanding section 45-2114, Arizona Revised Statutes, in fiscal year 2025-2026, the Arizona water protection fund commission may grant to the department of water resources up to $336,000 of the unobligated balance in the Arizona water protection fund established by section 45-2111, Arizona Revised Statutes, to pay for administrative costs of the department in fiscal year 2025-2026.

Sec. 9. Underground storage tank revolving fund; use of monies

Notwithstanding any other law, in fiscal year 2025-2026, the department of environmental quality may use up to $6,531,000 from the underground storage tank revolving fund established by section 49-1015, Arizona Revised Statutes, in fiscal year 2025-2026 for:

1. Administrative costs of the department.

2. Remediating sewage discharge issues in Naco, Arizona and other border areas of this state.

Sec. 10. Arizona water banking fund; use of monies

In addition to the purposes provided in section 45-2425, Arizona Revised Statutes, monies appropriated to the Arizona navigable stream adjudication commission from the Arizona water banking fund established by section 45-2425, Arizona Revised Statutes, may be used in fiscal year 2025-2026 to pay legal fees.

Sec. 11. Appropriation limit; water quality assurance revolving fund

Notwithstanding section 49-282, Arizona Revised Statutes, the appropriation from the state general fund to the water quality assurance revolving fund established by section 49-282, Arizona Revised Statutes, for fiscal year 2025-2026 may not exceed $15,000,000.

Sec. 12. Department of environmental quality; vehicle emissions testing fees; exemption from rulemaking

A. Notwithstanding any other law, in fiscal year 2025-2026, the director of the department of environmental quality shall reduce fees for tests conducted in area A so that vehicle emissions testing fee revenues collected from area A are reduced by five percent of fiscal year 2023-2024 area A collections. For the purposes of this subsection, "area A" has the same meaning prescribed in section 49-541, Arizona Revised Statutes.

B. The department of environmental quality is exempt from the rulemaking requirements of title 41, chapter 6, Arizona Revised Statutes, until July 1, 2026 for the purpose of establishing fees pursuant to this section.

Sec. 13. Agricultural fees; emergency rulemaking

A. For fiscal year 2025-2026, notwithstanding any other law, the director of the Arizona department of agriculture, subject to the review of the department of agriculture advisory council, may lower existing fees for any funds held in trust by the department.

B. The Arizona department of agriculture shall adopt emergency rules pursuant to title 41, chapter 6, Arizona Revised Statutes, through July 1, 2026, in conjunction with the industry, to modify fees deposited in the dangerous plants, pests and diseases trust fund established by section 3-214.01, Arizona Revised Statutes. These rules must be reviewed by the department of agriculture advisory council.

Sec. 14. State land department; auction for state lands

A. On or before October 1, 2025, the Arizona state parks board shall apply to the state land department to purchase state lands for the Arizona veterans memorial state park pursuant to section 41-511.25, Arizona Revised Statutes.

B. On the state land commissioner's receipt of a valid application to purchase state lands from the Arizona state parks board pursuant to section 41-511.25, Arizona Revised Statutes, the commissioner shall schedule and hold an auction for such state lands pursuant to title 37, chapter 2, article 3, Arizona Revised Statutes.