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ARIZONA STATE SENATE
Fifty-Seventh Legislature, Second Regular Session
groundwater transportation fee; counties; fund
Purpose
Specifies that groundwater transportation fee collections are considered general county monies and allows a county that establishes a water improvements program to designate an amount or percentage of the 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owners of residential property who reside within the groundwater basin or subbasin from which the groundwater was withdrawn and transported away.
Background
A person who directly or indirectly transports groundwater, withdrawn in a groundwater basin or subbasin or in the Pinal Active Management Area (AMA), away from the county in which it was withdrawn to an initial AMA must pay annually to the county a groundwater transportation fee determined by the Director of the Arizona Department of Water Resources (ADWR) for each acre-foot of groundwater transported directly or indirectly away from the county, less any amount of Central Arizona Project water actually used on the property from which the groundwater is transported. A person is not required to pay a transportation fee for stored water withdrawn pursuant to recovery well permits issued by the Director of ADWR. The Director of ADWR must annually adjust the dollar amount of the fee according to the annual changes in the GDP price deflator using the 1993 calendar year as the base year and notify all concerned partied of the fee adjustments.
Credits are allowed against the fees in statutorily prescribed amounts. If the amount of the credit exceeds the amount of the fee imposed for any year, the unused portion of the credit may be carried forward and applies to subsequent years' fees until the amount of the credit is exhausted (A.R.S. § 45-556).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. 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owners of residential property who reside within the groundwater basin or subbasin from which the groundwater was withdrawn and transported away.
2. 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.
3. 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.
4. Makes technical and conforming changes.
5. Becomes effective on the general effective date.
House Action
NREW 2/10/26 DP 10-0-0-0
3rd Read 2/23/26 57-0-3
Prepared by Senate Research
March 13, 2026
SB/hk