HB2099 - 572R

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

Section 1. Section 45-852.01, Arizona Revised Statutes, is amended to read:

START_STATUTE45-852.01. Long-term storage accounts

A. The director shall establish one long-term storage account for each person holding long-term storage credits. The director shall establish subaccounts within the long-term storage account according to each active management area, irrigation non-expansion area, groundwater basin or groundwater subbasin in which the person's stored water is located. The long-term storage account shall be further subdivided by type of water, if the person holds long-term storage credits for more than one type of water.

B. Water stored pursuant to a water storage permit at a storage facility may be credited to a long-term storage account if the director determines that all of the following apply:

1. Either:

(a) The water that was stored was water that cannot reasonably be used directly.

(b) The water was stored in a groundwater savings facility located in an active management area that does not have a management goal of achieving or maintaining a safe yield condition, the water was stored between January 1, 2020 and December 31, 2026 and the director determines that the storage assists in implementing within this state a drought contingency plan for the lower basin of the Colorado River. The total maximum amount that may qualify under this subdivision is fifteen thousand acre-feet per year.

2. If the stored water was stored at a storage facility within an active management area, either:

(a) The water would not have been naturally recharged within the active management area.

(b) If the water was stored at a managed underground storage facility that has been designated as a facility that could add value to a national park, national monument or state park and the water stored is effluent, the water stored is water that could have been used or disposed of by the storer by means other than discharging the effluent into the stream.

3. The stored water was not recovered on an annual basis pursuant to section 45-851.01.

C. The director shall credit ninety-five percent of the recoverable amount of stored water that meets the requirements of subsection B of this section to the storer's long-term storage account, except that:

1. If the water was stored at a managed underground storage facility that does not qualify as an existing effluent managed underground storage facility and that had not been designated at the time of storage as a facility that could add value to a national park, national monument or state park and the water stored is effluent, the director shall credit to the storer's long-term storage account fifty percent of the recoverable amount of water that meets the requirements of subsection B of this section. For storage of effluent in a managed underground storage facility that is located in a recreational corridor channelization district established pursuant to title 48, chapter 35, the director may increase the storage credits earned from fifty percent to ninety-five percent if both of the following apply:

(a) The effluent was not discharged into the stream where the facility is located before the permit application for that facility was filed.

(b) The director determines that the storage of effluent in the facility will provide a greater benefit to aquifer conditions in the active management area or, if outside an active management area, to the groundwater basin than would accrue to the active management area or groundwater basin if the effluent is used or disposed of in another manner.

2. If the water was stored at a groundwater savings facility and the storer has not met the burden of proving that one hundred percent of the in lieu water was used on a gallon-for-gallon substitute basis for groundwater, the director shall credit to the storer's long-term storage account only the percentage of the in lieu water that meets the requirements of subsection B of this section and that was proven to the director's satisfaction as being used on a gallon-for-gallon substitute basis for groundwater.

3. The director shall credit to the storer's long-term storage account ninety percent of the recoverable amount of the water that meets the requirements of subsection B of this section if all of the following apply:

(a) The stored water was central Arizona project water that qualifies as water that cannot reasonably be used directly due solely to the exclusion of groundwater withdrawn by the storer for mineral extraction or metallurgical processing under section 45-802.01, paragraph 23, subdivision (c).

(b) The storer was engaged in mineral extraction and metallurgical processing within an initial active management area on or before January 1, 2011.

(c) All exterior boundaries of the storage facility that is used to store the stored water are more than twenty miles from a well owned by the storer on January 1, 2012 and that well is not an exempt well and any one or more of the following apply:

(i) The well is an existing well as defined in section 45-591, paragraph 1.

(ii) The department has issued a permit for the well under section 45-599, subsection C.

(iii) The well was drilled pursuant to a mineral extraction and metallurgical processing permit issued by the department under section 45-514.

4. Except as otherwise provided in paragraph 2 of this subsection, the director shall credit to the storer's long-term storage account or conservation district account one hundred percent of the recoverable amount of water that meets the requirements of subsection B of this section if any of the following applies:

(a) The water stored was effluent that was stored at a constructed underground storage facility, a groundwater savings facility or a managed underground storage facility that was designated at the time of storage as a facility that could add value to a national park, national monument or state park.

(b) The water was stored in an active management area and the stored water is water from outside the active management area that would not have reached the active management area without the efforts of the holder of the long-term storage credits.

(c) The water was stored outside an active management area and the stored water is water from outside the groundwater basin in which the water was stored that would not have reached the groundwater basin without the efforts of the holder of the long-term storage credits.

(d) The water was stored for purposes of establishing and maintaining a replenishment reserve pursuant to section 48-3772, subsection E.

(e) The water was stored for replenishment purposes pursuant to section 48-3771 and credited directly to a conservation district account pursuant to section 45-859.01, subsection E.

5. If the storer is a municipal provider, the director may not credit to the storer's long-term storage account any stored water that is Colorado River water or central Arizona project water and that is stored during a period of shortage on the Colorado River, as declared by the United States secretary of the interior or the commissioner of the bureau of reclamation.

D. The director shall credit a person's long-term storage account by the amount of long-term storage credits assigned to that person by another holder of long-term storage credits pursuant to section 45-854.01.

E. The director shall debit the appropriate subaccount of a person's long-term storage account:

1. One hundred percent of the amount of stored water that the holder of the long-term storage credits has recovered during the calendar year pursuant to the permit.

2. The amount of long-term storage credits that the person has assigned to another person or transferred to a master replenishment account, conservation district account or water district account.

3. If the water was stored in an active management area, the amount of water during the calendar year that migrates to a location outside the active management area or to a location within the active management area where it cannot be beneficially used within a reasonable period of time by persons other than the storer with rights to withdraw and use groundwater.

4. If the water was stored outside of an active management area, the amount of water during the calendar year that migrates to a location outside the groundwater basin in which the storage facility is located or to a location in the groundwater basin where it cannot be beneficially used within a reasonable period of time by persons other than the storer with rights to withdraw and use groundwater.

5. The amount of long-term storage credits that the storer, pursuant to section 45-853.01, subsection B, has applied to offset groundwater withdrawn or used in excess of the storer's per capita municipal conservation requirements under the second management plan.

6. The amount of long-term storage credits that are held by the Arizona water banking authority and that the authority has chosen to extinguish.

F. To the extent the total amount of water withdrawn by a person from wells designated as recovery wells pursuant to section 45-834.01 during a calendar year exceeds the amount of stored water recovered by the person on an annual basis pursuant to section 45-851.01 and the amount of long-term storage credits recovered by the person, the excess amount of water recovered shall be considered groundwater withdrawn pursuant to chapter 2 of this title. END_STATUTE

Sec. 2. Section 45-854.01, Arizona Revised Statutes, is amended to read:

START_STATUTE45-854.01. Assignability of long-term storage credits

A. Except as provided in section 45-855.01, subsection C, the holder of long-term storage credits may assign by grant, gift, sale, lease or exchange all or part of the holder's long-term storage credits.

B. Except as provided in subsection C or D of this section, an assignment of long-term storage credits from one person to another is valid on receipt by the director of notification of the assignment in writing on a form that is provided by the director and that has been signed by both the assignor and assignee.

C. The director may reject and invalidate any assignment of long-term storage credits in which the stored water would not have met the requirements for long-term storage credits as prescribed by section 45-852.01 if the assignee had stored the water.

D. The director shall reject and invalidate any assignment of long-term storage credits that is inconsistent with section 45-852.01, subsection C, paragraph 5. END_STATUTE

Sec. 3. Section 48-3713.02, Arizona Revised Statutes, is amended to read:

START_STATUTE48-3713.02. Additional authority regarding water storage

A. The district may enter into a contract with the this state, the Arizona water banking authority, a county, a municipality or another person to develop, acquire, construct, operate or maintain water storage, storage facilities and recovery wells pursuant to title 45, chapter 3.1 on behalf of the this state, the Arizona water banking authority, a county, a municipality or any other person. With respect to such agreements or contracts, the this state, the Arizona water banking authority, a county, a municipality or any other persons person shall pay all costs relating to such water storage, storage facilities and recovery wells, including their proportional share of the costs that the district incurred under section 48-3713.01.

B. The contract shall contain the further provision that use of central Arizona project facilities for any purpose under this section shall not interfere with deliveries to central Arizona project subcontractors for direct use.

C. Any contract that is executed by the district under this section with a central Arizona project subcontractor shall contain the provision that in any year in which the amount of Colorado River water available for delivery to central Arizona project subcontractors is one million five hundred thousand acre-feet or less, central Arizona project water that is allocated to the subcontractor to be used for any water storage under this section will be limited to water which that would otherwise not be delivered for direct use to other central Arizona project subcontractors, except that after December 31, 1993, central Arizona project water that is allocated to the subcontractor to be used for any water storage under this section will be limited to water which that would otherwise not be delivered for direct use to other central Arizona project subcontractors serving water in the same active management area. Nothing in This subsection shall be construed to does not affect the subcontract rights of central Arizona project subcontractors.

D. The contract may include a provision to require the district to pay to the county contributions in lieu of taxes on any property, or interest in property, that is acquired under this section. The amount of the contribution shall be determined according to the procedures in title 42, chapter 15, article 6. If the contract contains such a provision, the property, or interest in property, that is acquired under this section is deemed to be taxable property in the county only for purposes of determining the county's levy limit under section 42-17051 and the distribution of state transaction privilege tax revenues to the counties under section 42-5029, subsection D, paragraph 3, subdivision (a), item (i).

E. Notwithstanding any other law, a municipal provider may not place an order with the district for the delivery of central Arizona project water that the provider intends to store in an underground storage facility pursuant to section 45-811.01 during a period of shortage on the Colorado River, as declared by the united states secretary of the interior or the commissioner of the bureau of reclamation. END_STATUTE