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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
groundwater withdrawal fee; Pinal AMA
Purpose
Extends the statutorily prescribed moratorium on levying and collecting an annual groundwater withdrawal fee for Arizona water banking purposes and the $2.50 per acre-foot per year cap on the annual groundwater withdrawal fee for groundwater and efficiency projects in the Pinal active management area (AMA) from January 1, 2027, to January 1, 2031.
Background
The Director of
the Arizona Department of Water Resources (ADWR) must levy and collect an
annual groundwater withdrawal fee from each person withdrawing groundwater in
the Tucson, Phoenix and Pinal AMAs. In the Pinal AMA, beginning 2017, the
groundwater withdrawal fee for administration and enforcement of the
requirements relating to groundwater management may not exceed $1 per acre-foot
per year. In the Tucson and Phoenix AMAs, the groundwater withdrawal fee for
Arizona water banking purposes may not exceed $2.50 per
acre-foot per year. No groundwater withdrawal fee, for the purpose of Arizona
water banking, may be levied and collected in the Pinal AMA during calendar
years 2020 through 2026. The groundwater withdrawal fee for groundwater and
irrigation efficiency projects in the Pinal AMA may not exceed $2.50 per
acre-foot per year from and after December 21, 2019, through December 31, 2026
(A.R.S.
§ 45-611).
The Temporary Groundwater and Irrigation Efficiency Projects fund (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 AMA, Pinal AMA and Harquahala Irrigation Non-expansion Area (INA). The Fund consists of legislative appropriations, groundwater withdrawal fees collected for Arizona water banking purposes in the Pinal AMA, grants from federal agencies and monies deposited in the Fund by qualified irrigation districts in the Phoenix AMA, Pinal AMA and the Harquahala INA.
The Director of ADWR administers the Fund. Monies in the fund are continuously appropriated. Any unencumbered monies in the Fund on June 30, 2027, must be proportionally distributed to the Fund's contributors by December 31, 2027, according to the total amount of monies deposited in the Fund by each contributor (A.R.S. § 45-615.01).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Extends, from January 1, 2027, to January 1, 2031, the statutorily prescribed moratorium on levying and collecting an annual groundwater withdrawal fee for Arizona water banking purposes in the Pinal AMA.
2. Extends, from January 1, 2027, to January 1, 2031, the $2.50 per acre-foot per year cap on the annual groundwater withdrawal fee for groundwater and irrigation efficiency projects in the Pinal AMA.
3. Delays by five years, from 2027 to 2032, the year in which any unencumbered monies in the Fund must be proportionally distributed to the Fund's contributors.
4. Extends the delayed repeal of the Fund from April 1, 2028, to April 1, 2033.
5. Makes technical changes.
6. Becomes effective on the general effective date.
Prepared by Senate Research
February 6, 2026
SB/SF/hk