HB2055 - 572R

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

Section 1. Section 49-1303, Arizona Revised Statutes, is amended to read:

START_STATUTE49-1303. Long-term water augmentation fund; purposes; limit

A. Monies and other assets in the long-term water augmentation fund may be used for the following purposes:

1. Funding water supply development projects that import water from outside the boundaries of this state. At least seventy-five percent of the monies in the fiscal years 2022-2023, 2023-2024 and 2024-2025 appropriations to the fund shall be reserved for one or more projects with this purpose, and those monies shall be accounted for separately.

2. Purchasing imported water or rights to imported water.

3. Acquiring or constructing water-related facilities in this state to convey or deliver imported water within the this state.

4. Conducting investigations, including performing environmental or other reviews.

5. Contracting for water needs assessments.

6. Providing financial assistance to eligible entities for the purposes of financing or refinancing to finance or refinance water supply development projects within this state, including projects for conservation through reducing existing water use or more efficient uses of existing water supplies.

7. Guaranteeing debt obligations of eligible entities that are issued or incurred to finance or refinance water supply development projects within this state or providing credit enhancements in connection with these debt obligations.

8. Paying the costs to administer the fund.

9. Funding not more than ten full-time equivalent positions of the authority.

10. Developing one or more brackish groundwater recovery projects pursuant to article 6 of this chapter that create new sources of potable water within the boundaries of this state.

B. In providing financial assistance from the long-term water augmentation fund, the authority shall comply with section 49-1304.

C. Monies in the long-term water augmentation fund may not be used to purchase conservation or other similar easements on real property.

D. If the monies pledged to secure long-term water augmentation bonds issued pursuant to section 49-1309 become insufficient to pay the principal and interest on the long-term water augmentation bonds guaranteed by the long-term water augmentation fund, the authority shall direct the state treasurer to liquidate securities in the long-term water augmentation fund as may be necessary and shall apply those proceeds to make current all payments then due on the long-term water augmentation bonds. The state treasurer shall immediately notify the attorney general and auditor general of the insufficiency. The auditor general shall audit the circumstances surrounding the depletion of the long-term water augmentation fund and report the findings to the attorney general. The attorney general shall conduct an investigation and report those findings to the governor and the legislature.

E. The authority shall take necessary actions to obtain full repayment for monies or financial assistance provided from the long-term water augmentation fund by the recipients of the funding or financial assistance or the recipients of any water supply development project made available from monies from the long-term water augmentation fund through water subcontracts, loan repayments, rates, fees, charges or otherwise, as appropriate. This subsection does not apply to monies spent by the authority for investigations and studies or monies spent in connection with loan guarantees or credit enhancement. END_STATUTE

Sec. 2. Title 49, chapter 8, Arizona Revised Statutes, is amended by adding article 6, to read:

ARTICLE 6. BRACKISH GROUNDWATER RECOVERY PROGRAM

START_STATUTE49-1341. Brackish groundwater recovery program fund

A. The brackish groundwater recovery program fund is established consisting of all of the following:

1. Monies appropriated by the legislature.

2. Monies received from the united states government for any allowable purpose of the brackish groundwater recovery program.

3. Monies received as loan repayments, interest, administrative fees and penalties.

4. Monies from any lawful activity of the authority, including public-private partnership agreements relating to water supply development projects.

5. Interest and other income received from investing monies in the brackish groundwater recovery program fund.

6. Gifts, grants and donations received from any public or private source for the purposes of the brackish groundwater recovery program fund.

B. Monies in the fund are continuously appropriated and are exempt from 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 sections 35-313 and 35-314.03, and monies earned from investment shall be credited to the fund.

C. All monies shall be deposited, pursuant to sections 35-146 and 35-147, in the fund and shall be held in trust. The monies in the fund 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 unless approved by a three-fourths vote of the members of each house of the legislature.

D. The authority shall administer the fund. The authority shall establish as many other accounts and subaccounts as required to administer the fund.

E. Not more than ten percent of the monies in the fund may be used to cover staffing and administrative costs.

F. The authority shall use the monies and other assets in the fund solely for the purposes authorized by this article. END_STATUTE

START_STATUTE49-1342. Brackish groundwater recovery program fund; purposes; criteria

A. The authority shall use the monies in the brackish groundwater recovery program fund established by section 49-1341 to provide matching dollars for the development and construction of qualifying brackish groundwater recovery and desalination projects within this state but outside the boundaries of an initial active management area. Not more than $1 shall be awarded per $3 of total capital expenditures per qualifying project. Not more than one qualifying project shall be awarded monies per request for proposals.

B. The authority may not grant monies from the brackish groundwater recovery program fund established by section 49-1341 without first issuing a request for proposals to develop and construct a qualifying brackish groundwater recovery and desalination project pursuant to this section.

C. the authority shall evaluate proposals that are submitted in response to the request for proposals and select a winning project for ISSUING matching dollars based on the criteria adopted pursuant to this section.

D. The authority shall grant monies pursuant to this section contingent on the execution of proposed projects and expenditure of capital costs within a time frame the authority determines following the award of monies.

E. the authority, in consultation with the department of water resources, shall establish all of the following:

1. the Minimum information that a qualifying bidder must include with a proposed project to be considered for evaluation, including all of the following:

(a) Design and engineering studies or reports.

(b) Site location, right-of-way and land ownership information.

(d) withdrawal permit and groundwater rights and access information.

(e) the Method of brackish groundwater recovery, treatment and desalination.

(f) the Method of desalination brine disposal.

(g) the total volume of brackish groundwater expected to be desalinated.

(h) the Total project capacity and expected output.

(i) the Proximity to likely offtakers and the proposed method of transportation or delivery of treated brackish groundwater to the offtakers in the basin.

(j) the total estimated capital cost for the project.

2. the Minimum criteria that the authority will use to evaluate the feasibility and viability of qualifying projects submitted in response to a request for proposals and to select a winning project. the Criteria to select a winning project shall include all of the following:

(a) the cost-effectiveness of the project.

(b) the reliability and long-term security of the water supply to be developed through the project.

(d) the impacts to the regional aquifer and local water users from the project's brine disposal.

(e) comments from water users, local residents and affected jurisdictions.

3. the Minimum criteria that a bidder must satisfy to qualify for participation in the program and to submit proposals in response to a request for proposals.

4. the Minimum criteria that the authority will use to evaluate the technical, financial and managerial capabilities of a qualifying bidder that submits a proposal in response to a request for proposals.END_STATUTE