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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
McMullen Valley; eligible entities; groundwater
Purpose
Allows an eligible entity that owns historically irrigated acres in the McMullen Valley Groundwater Basin to withdraw groundwater from the land for transportation to a location and for prescribed purposes. Prescribes requirements relating to water improvements programs, the statutorily prescribed land division disclosure affidavit, groundwater transportation fees and county improvement districts (districts).
Background
A city that purchased land before January 1, 1988, in the McMullen Valley Groundwater Basin or a person who purchased land before January 1, 1988, that was in that basin and that was in the same county as the Phoenix Active Management Area (AMA), either directly or in exchange for Central Arizona Project (CAP) water allocated for agricultural purposes, may transport groundwater from that land to the Phoenix AMA for use by any city, town, private water company or groundwater replenishment district. A city, town, private water company or groundwater replenishment district that purchases any land in the McMullen Valley Groundwater Basin from that city or land that was in the same county as the Phoenix AMA from that person, either directly or in exchange for CAP water allocated for agricultural purposes, may transport groundwater from that land to the Phoenix AMA only for use by a city, town, private water company, groundwater replenishment district or the Arizona Water Banking Authority.
The Director of the Arizona Department of Water Resources (ADWR) must determine the annual transportation allotment for land that is subject to the transportation of groundwater withdrawn in the McMullen Valley Groundwater Basin as follows: 1) determine each farm or portion of a farm on that land; 2) for each such farm or portion of a farm, determine the historically irrigated acres; and 3) multiply the sum of those historically irrigated acres for all such farms or portions of farms by three acre-feet per acre. The amount of groundwater that may be transported away from the McMullen Valley Groundwater Basin, must not exceed: 1) in any year, two times the annual transportation allotment for the land; 2) for any period of 10 consecutive years computed in continuing progressive series beginning in the year transportation of groundwater from the land begins, 10 times the annual transportation allotment for the land; and 3) six million acre-feet in total (A.R.S. § 45-552).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
Transportation
of Groundwater Withdrawn in the
McMullen Valley Groundwater Basin
1. Allows an eligible entity that owns historically irrigated acres in the McMullen Valley Groundwater Basin to withdraw groundwater from the land for transportation to a location and for prescribed purposes if:
a) the groundwater is withdrawn:
i. from a depth to 1,200 feet at the site or sites of the proposed withdrawals; and
ii. at a rate that, when added to the existing rate of withdrawals in the area, does not cause the groundwater table at the site or sites of the withdrawals to decline more than an average of 10 feet per year during the 100-year evaluation period;
b) the groundwater is in an amount:
i. per acre of the historically irrigated acres, not to exceed six acre-feet in any year or 30 acre-feet for any period of 10 consecutive years computed in continuing progressive series beginning in the year transportation of groundwater from the land begins; or
ii. established by the Director of ADWR, but only if the Director determines that the withdrawals in an amount greater than allowed, as prescribed, will not unreasonably increase damage to residents of the surrounding land and other water users in the McMullen Valley Groundwater Basin, or that one or more of the entities withdrawing the groundwater will mitigate the damage to the residents and other water users;
c) by a public service corporation, all costs associated with withdrawing, transporting and delivering groundwater away from the McMullen Valley Groundwater Basin are collected from the customers of the public service corporation's water district where the transported groundwater is used;
d) before the withdrawal of groundwater from the McMullen Valley Groundwater Basin, the eligible entity has demonstrated compliance with the prescribed criteria using a hydrological study;
e) before the withdrawal of groundwater from the McMullen Valley Groundwater Basin, the eligible entity installs water measuring devices, or other similarly reliable and accessible methods as approved by ADWR, to determine the volume of groundwater that is withdrawn from wells related to the transportation activity and that is transported out of the McMullen Valley Groundwater Basin by pipelines, canals or conduits; and
f) within 30 days after the withdrawal of groundwater from the McMullen Valley Groundwater Basin for transportation, the eligible entity submits a monthly report containing:
i. the volume of groundwater the entity withdrew from the McMullen Valley Groundwater Basin in the preceding month;
ii. the volume of groundwater the entity transported out of the McMullen Valley Groundwater Basin in the preceding month; and
iii. the end use or destination of groundwater the entity transported out of the McMullen Valley Groundwater Basin in the preceding month.
2. Requires the Director of ADWR to prescribe the contents of the outlined hydrological study that is submitted with an application.
3. Determines that the following entities are eligible to transport groundwater away from the McMullen Valley Groundwater Basin:
a) the state;
b) a political subdivision of Arizona; or
c) a public service corporation that is regulated by the Arizona Corporation Commission and that holds a certificate of convenience and necessity for water service.
4. Requires rules adopted relating to the transportation of groundwater withdrawn in the Harquahala Irrigation Non-expansion Area to apply to the requirements relating to the transportation of groundwater withdrawn in the McMullen Valley Groundwater Basin.
5. Determines that the following locations and purposes are eligible to receive groundwater transported away from the McMullen Valley Groundwater Basin:
a) an initial AMA for use by an eligible entity or the Arizona Water Banking Authority; or
b) La Paz County by an eligible entity in a total cumulative volume not to exceed 10 percent of the total annual volume of groundwater ADWR determines is available for transport out of the McMullen Valley Groundwater Basin.
6. Allows an eligible entity in La Paz County to:
a) transport groundwater from historically irrigated acres in the McMullen Valley Groundwater Basin owned by the eligible entity to a location in La Paz County for the eligible entity's own use; or
b) sell or lease groundwater from historically irrigated acres owned by the eligible entity that are located in La Paz County to a designated provider in the Phoenix, Tucson or Pinal AMAs for the designated provider's own use, if the total cumulative volume of groundwater sold or leased does not exceed 90 percent of the total cumulative volume of groundwater available to La Paz County.
7. Requires any local use of groundwater by an eligible entity that sells or leases groundwater to count toward the eligible entity's prescribed maximum per acre withdrawal limit.
8. Determines that the requirements relating to the transportation of groundwater withdrawn in the McMullen Valley Groundwater Basin do not prohibit a person from storing and recovering water that is not groundwater and that is stored pursuant to the statutory requirements relating to underground water storage, savings and replenishment.
9. Determines that water that is not groundwater and that is stored pursuant the statutory requirements relating to underground water storage, savings and replenishment does not count toward the prescribed withdrawal limits.
Water Improvements Programs
10. Allows the board of supervisors of a county to establish a water improvements program to allow persons to make gifts, grants or donations for the purpose of providing financial assistance to qualified owners of residential real property for water hauling for water delivery.
11. Adds acquiring or installing storage tanks for receiving and storing water delivered through water hauling to the list of projects that a recipient's grant must be used toward.
Land Division Disclosure Affidavit
12. Requires a licensed escrow agent for the outlined land transaction, on the request, direction or instruction of the seller, to record the executed affidavit of disclosure at the same time that the deed is recorded.
13. Requires a subsequent seller or the licensed escrow agent for the outlined subsequent land transaction, on request, direction or instruction of the subsequent seller, to record the statutorily prescribed subsequently executed affidavit.
14. Specifies that a licensed escrow agent who records the statutorily prescribed affidavit is not liable for any inaccurate information in the affidavit, including any omissions of material facts.
15. Modifies the statutorily prescribed disclosure affidavit that a seller or subsequent seller of five or fewer parcels of land, other than subdivided land, in an unincorporated area of a county must complete.
16. Stipulates that, for the purposes of the requirements relating to the disclosure affidavit, the seller and subsequent seller do not include a personal representative acting on behalf of an estate that is selling the property.
Groundwater Transportation Fees
17. Requires the Director of ADWR, within 60 days after the general effective date, to post on ADWR's website the table of groundwater transportation fees and annually update the table with the annual change in the GDP price deflator and statutorily prescribed fee adjustments.
18. Allows a county that establishes a water improvements program to designate an amount or percentage of the total groundwater transportation fees received to be used under the water improvements program only for qualified owners of residential property who reside within the groundwater basin or subbasin from which the groundwater was withdrawn and transported away.
19. Specifies that the collections from the statutorily prescribed groundwater transportation fees are considered general county monies and must be deposited in the county general fund.
20. Requires the county to separately account for monies received from the groundwater transportation fees and any monies in excess of that amount or percentage designated by the county to be deposited in the county general fund.
Districts
21. Allows a district that is formed in a subsequent AMA or in a basin or subbasin from which groundwater may be transported for the purpose of delivering water through water hauling to exercise the power of eminent domain only for the limited purpose of acquiring or otherwise securing a site in the subsequent AMA or in a basin or subbasin from which groundwater may be transported for the construction of and legal access to a single well and a standpipe to produce water and make water available at the site for delivery through water hauling.
22. Allows a district to be established for the purpose of constructing and operating a domestic water delivery system that is located in a subsequent AMA or basin or subbasin from which groundwater may be transported for the purpose of delivering water through water hauling.
23. Allows the board of directors of a district, when the public interest or convenience requires, to order the acquisition, construction, reconstruction, maintenance or repair of wells and standpipes.
24. Allows the statutorily prescribed acquisition, construction, reconstruction, maintenance or repair of waterworks for the delivery of water for domestic water purposes to be for the delivery of water in a subsequent AMA or in a basin or subbasin from which groundwater may be transported through water hauling.
Miscellaneous
25. Repeals the statutorily prescribed requirements relating to the transportation of groundwater withdrawn in the McMullen Valley Groundwater Basin to an AMA.
26. Defines historically irrigated acres as land overlaying an aquifer that was irrigated with groundwater from that aquifer before January 1, 1988.
27. Modifies the definition of waterworks to include standpipes.
28. Makes technical and conforming changes.
29. Becomes effective on the general effective date.
House Action
NREW 1/27/26 DPA 6-4-0-0
3rd Read 2/19/26 32-24-4
Prepared by Senate Research
March 13, 2026
SB/hk