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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
2026-2027; environment.
Purpose
Makes statutory and session law changes relating to the environment necessary to implement the FY 2027 state budget.
Background
The Arizona Constitution prohibits substantive law from being included in the general appropriations, capital outlay appropriations and supplemental appropriations bills. However, it is often necessary to make statutory and session law changes to effectuate the budget. Thus, separate bills called budget reconciliation bills (BRBs) are introduced to enact these provisions. Because BRBs contain substantive law changes, the Arizona Constitution provides that they become effective on the general effective date, unless an emergency clause is enacted.
S.B. 1852 contains the budget reconciliation provisions for changes relating to the environment.
Groundwater Withdrawal Fees
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 Active Management Area (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.
Underground Storage Tank Revolving Fund
3. Continues to authorize the Arizona Department of Environmental Quality (ADEQ) to use up to $6,531,000 from the Underground Storage Tank Revolving Fund in FY 2027 for the administrative costs of ADEQ and for remediating sewage discharge issues in Naco, Arizona and other border areas of Arizona.
Arizona Water Banking Fund
4. Continues to include legal fees as an authorized use of Arizona Water Banking Fund monies appropriated to the Arizona Navigable Stream Adjudication Commission in FY 2027 in addition to the statutorily prescribed purposes of the Arizona Water Banking Fund.
Arizona Water Protection Fund
5. Continues to authorize the Arizona Water Protection Fund Commission to grant to the Arizona Department of Water Resources (ADWR) up to $336,000 of the unobligated balance in the Arizona Water Protection Fund in FY 2027 to pay for ADWR's FY 2027 administrative costs.
Water Quality Assurance Revolving Fund
6. Prohibits the statutorily prescribed appropriation from the state General Fund to the Water Quality Assurance Revolving Fund for FY 2027 from exceeding $15,000,000.
Arizona System Conservation Fund
7. Extends the delayed repeal date for the Arizona System Conservation Fund from April 1, 2027, to April 1, 2031.
Temporary Groundwater and Irrigation Efficiency Projects Fund
8. Extends the delayed repeal date for the Temporary Groundwater and Irrigation Efficiency Projects Fund from April 1, 2028, to April 1, 2033.
9. Delays by five years, from June 30, 2027, to June 30, 2032, the date in which any unencumbered monies in the Temporary Groundwater and Irrigation Efficiency Projects Fund must be proportionally distributed to the Fund's contributors.
Emission Fees
10. Continues to require the Director of ADEQ, in FY 2027, to maintain fees for tests conducted in Area A at the Area A emission fee level as of June 30, 2025.
Miscellaneous
11. Makes technical changes.
12. Becomes effective on the general effective date.
Prepared by Senate Research
June 9, 2026
SB/hk