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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
VETOED
AMENDED
land division; applicant submissions; review
(NOW: assured water supply; certificate; model)
Purpose
An emergency measure that requires the Arizona Department of Water Resources (ADWR) to review the merits of a certificate of assured water supply and issue a new written determination of action if prescribed conditions apply and using outlined models as criteria. Requires a certificate of assured water supply issued pursuant to outlined requirements to relate back as if issued in calendar year 2023 for the purposes of an application for designation of assured water supply under outlined rules adopted by ADWR.
Background
A person who proposes to offer subdivided lands for sale or lease in an active management area (AMA) must apply for and obtain a certificate of assured water supply from the Director of ADWR before presenting the plat for approval to the city, town, or county in which the land is located and before filing with the State Real Estate Commissioner a notice of intention to offer such lands for sale or lease, unless the subdivider has obtained a written commitment of water service for the subdivision from a city, town or private water company designated as having an assured water supply. A city, town or county may only approve a subdivision plat if the subdivider has obtained a certificate of assured water supply from the Director of ADWR or the subdivider has obtained a written commitment of water supply from a designated provider.
An assured water supply means that: 1) sufficient groundwater, surface water or effluent of adequate quality will be continuously available to satisfy the water needs of the proposed use for at least 100 years; 2) the projected groundwater use is consistent with the management plan and achievement of the management goal for the AMA; and 3) the financial capability has been demonstrated to construct the water facilities necessary to make the supply of water available for the proposed use, including a delivery system and any storage facilities or treatment works (A.R.S. § 45-576).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires ADWR, on request of an applicant, to review the merits of an application for a certificate of assured water supply and issue a new written determination of action if:
a) the application is for a certificate of assured water supply for land located in the Phoenix AMA;
b) the application was submitted on or after January 26, 2021, and by August 31, 2023;
c) ADWR has not issued a certificate of assured water supply; and
d) the municipal provider for the land covered by the application has submitted to ADWR a notice of intent to serve.
2. Requires the outlined notice of intent to serve to state that:
a) each year after the issuance of the certificate of assured water supply for the land covered by the application, the municipal provider must calculate the total amount of excess groundwater delivered by the municipal provider during the preceding calendar year to parcels of member land contained within the land covered by the application;
b) the municipal provider, by March 31 of each year after the issuance of the certificate of assured water supply for the land covered by an application, must offer to assign to the multi-county water conservation district long-term storage credits accrued in the Phoenix AMA and held by the municipal provider;
c) the number of long-term storage credits offered by the municipal provider in a year must equal 25 percent of the total excess groundwater calculated by the municipal provider for the preceding calendar year;
d) the Central Arizona Groundwater Replenishment District (CAGRD) may elect to purchase all, or a portion of the long-term storage credits offered in a year and the municipal provider must accept a purchase price per acre foot of not less than the average per-acre-foot price paid by CAGRD for long-term storage credits in the Phoenix AMA during the preceding five calendar years; and
e) the obligation to assign long-term storage credits must continue for so long as the parcels of member land contained within the land covered by the certificate of assured water supply retain all or any portion of a parcel replenishment obligation.
3. Requires, if a municipal provider enters into a member service area agreement with CAGRD, the minimum amount of excess groundwater that the municipal provider is obligated to report to CAGRD in a year and that is subject to an annual replenishment tax to be reduced by the long-term storage credits transferred to CAGRD by the municipal provider in that year.
4. Prohibits CAGRD's purchase of long-term storage credits that are offered by a municipal provider from affecting the annual replenishment assessment charged by CAGRD against parcels of member land contained within the land covered by a certificate of assured water supply.
5. Requires ADWR, if an application for a certificate of assured water supply reviewed by ADWR was supported using either the 2006-2009 Salt River Valley Regional Model or the 2006 Lower Hassayampa Sub-Basin Groundwater Flow Model, to determine that the application meets the physical availability requirements for groundwater.
6. Requires all remaining requirements for a certificate of assured water supply to remain applicable to the determination to issue the certificate of assured water supply.
7. Requires ADWR, within 10 days after the effective date of this legislation, to notify all applicants that meet the outlined criteria of the ability to have determinations of assured water supply reviewed.
8. Allows applicants to request that ADWR review their pending applications.
9. Allows applicants to resubmit and request review of a withdrawn application.
10. Requires a certificate of assured water supply issued pursuant to outlined requirements to relate back as if issued in calendar year 2023 for the purposes of an application for designation of assured water supply under rules adopted by ADWR for inclusion in the base supply of physically available groundwater for the municipal provider on issuance of the designation of assured water supply.
11. Extends the delayed repeal date from January 1, 2026, to January 1, 2029.
12. Makes technical and conforming changes.
13. Becomes effective on signature of the Governor, if the emergency clause is enacted.
Amendments Adopted by Committee
· Adopted the strike-everything amendment.
Amendments Adopted by Committee of the Whole
1. Removes the requirement that ADWR, on request of an applicant to review the merits of an application for a certificate of assured water supply, issue a new written determination of action within 15 days if outlined conditions apply.
2. Modifies the conditions that require ADWR to review the merits of an application for a certificate of assured water supply and issue a new written determination of action.
3. Adds to the conditions that require ADWR to review the merits of an application for a certificate of assured water supply that the municipal provider for the land covered by the application has submitted to ADWR an outlined notice of intent to serve.
4. Requires, if a municipal provider enters into a member service area agreement with CAGRD, the minimum amount of excess groundwater that the municipal provider is obligated to report to CAGRD in a year and that is subject to an annual replenishment tax to be reduced by the long-term storage credits transferred to CAGRD by the municipal provider in that year.
5. Prohibits CAGRD's purchase of long-term storage credits that are offered by a municipal provider from affecting the annual replenishment assessment charged by CAGRD against parcels of member land contained within the land covered by a certificate of assured water supply.
6. Removes the requirement that ADWR review the determination to grant a certificate of assured water supply using either the 2006-2009 Salt River Valley regional model or the 2006 Lower Hassayampa Sub-basin groundwater flow model and any financial information submitted by the applicant.
7. Requires ADWR, if an application for a certificate of assured water supply reviewed by ADWR was supported using either the 2006-2009 Salt River Valley regional model or the 2006 Lower Hassayampa Sub-basin groundwater flow model, to determine that the application meets the physical availability requirements for groundwater.
8. Requires ADWR, within 10 days, rather than 5 days, after the effective date of this legislation, to notify all applicants that meet the outlined conditions of the ability to have their determinations of assured water supply reviewed.
9. Allows, rather than requires, applicants to request that ADWR review their pending applications at any time, rather than within 90 days after the effective date of this legislation.
10. Allows applicants to resubmit and request review of a withdrawn application.
11. Requires a certificate of assured water supply issued pursuant to outlined requirements to relate back as if issued in calendar year 2023 for the purposes of an application for designation of assured water supply under rules adopted by ADWR for inclusion in the base supply of physically available groundwater for the municipal provider on issuance of the designation of assured water supply.
12. Extends the delayed repeal date from January 1, 2026, to January 1, 2029.
13. Makes technical and conforming changes.
Governor's Veto Message
The Governor indicates in her veto message that H.B. 2091 would force the approval of developments without sufficient water supplies and that she will ensure that Arizona's water requirements and consumer protections are upheld.
Senate Action House Action
GOV 3/19/25 W/D Final Read 6/24/25 34-22-4-0
NR 3/25/25 DPA/SE 4-3-1
3rd Read 6/20/25 17-12-1
Vetoed by the Governor 7/1/25
Prepared by Senate Research
July 7, 2025
SB/ci