Bill Text: AZ SB1243 | 2024 | Fifty-sixth Legislature 2nd Regular | Engrossed
Bill Title: Groundwater sales; online exchange.
Spectrum: Partisan Bill (Republican 10-0)
Status: (Engrossed) 2024-04-04 - House additional Committee of the Whole action: Do Pass Amended [SB1243 Detail]
Download: Arizona-2024-SB1243-Engrossed.html
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House Engrossed Senate Bill
groundwater sales; online exchange. |
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State of Arizona Senate Fifty-sixth Legislature Second Regular Session 2024
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SENATE BILL 1243 |
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An Act
amending section 45-558, Arizona Revised Statutes; amending title 45, chapter 2, Arizona Revised Statutes, by adding article 13; repealing title 45, chapter 2, article 13, Arizona Revised Statutes; relating to the groundwater code.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 45-558, Arizona Revised Statutes, is amended to read:
45-558. Weeds and dust
A person shall maintain property owned by the person and from which groundwater is or will be transported pursuant to this article or from which groundwater may be sold, leased or otherwise conveyed pursuant to article 13 of this chapter free of noxious weeds as defined in section 3-201, Russian thistles (salsola kali) and blowing dust that creates a threat to health or safety.
Sec. 2. Title 45, chapter 2, Arizona Revised Statutes, is amended by adding article 13, to read:
ARTICLE 13. WATER MARKETPLACE
45-651. Right to buy and sell groundwater; notice; exemption; disclosure
A. Notwithstanding any other law, a person with a grandfathered right to groundwater as prescribed in section 45-462 in the Tucson active management area may sell, lease or otherwise convey any portion of the right to pump groundwater or the groundwater itself to any other person in the Tucson active management area for any use in the tucson active management area. This article does not authorize a person to sell, lease or otherwise convey the right to pump groundwater or groundwater itself in one subbasin for use or withdrawal in another subbasin but groundwater may be transported between subbasins within the Tucson active management area by other means. Any groundwater withdrawn pursuant to this section shall be withdrawn at either of the following:
1. The same location authorized in the original grandfathered right.
2. Any other location in the same subbasin if the proposed location of withdrawal complies with rules adopted pursuant to section 45-598, subsection a.
B. A person who sells, leases or otherwise conveys the right to pump groundwater or groundwater itself as prescribed by subsection A of this section shall notify the department in writing of the following with respect to the transaction:
1. If the transaction is a sale, the name and address of the buyer and seller.
2. If the transaction is for a lease, the name and address of the lessor and lessee.
3. If the transaction is a lease or sale.
4. If for a lease, the duration of the lease.
5. If known, if the transaction is for the right to pump groundwater or the right to groundwater itself.
6. if known and if the transaction is only for a sale of the right to pump groundwater, the anticipated point of reduction and withdrawal.
7. If known, the anticipated method of conveyance or transport.
8. The volume of groundwater to be forgone by the seller or lessor.
9. The volume of groundwater to be received or withdrawn by the buyer or lessee.
10. The amount of any transaction costs incurred from the transaction.
11. The price per acre-foot to be paid for any groundwater received or withdrawn by the buyer or lessee.
12. Any other relevant information prescribed by the department.
C. The department may prescribe a form for the notice required under subsection B of this section. The parties to a transaction authorized by this section may update the information provided to the department at any time.
D. For any sale, lease or conveyance prescribed by subsection A of this section, the buyer or lessee shall receive the right to receive or withdraw sixty-five percent of the total volume of groundwater forgone by a seller or lessor resulting from the transaction.
E. For any sale authorized by this section, thirty-five percent of the original grandfathered right conveyed to a seller may not be pumped, otherwise used or further conveyed.
F. For any lease authorized by this section, thirty-five percent of the original grandfathered right conveyed to a seller may not be pumped, otherwise used or further conveyed during the duration of the lease.
G. In calculating the volume of groundwater itself or right to pump groundwater that a seller or lessor may forgo pursuant to this section, the department shall use the average volume of water pumped pursuant to the grandfathered right over the preceding five years.
H. Any groundwater or right to groundwater itself conveyed pursuant to subsection A of this section and the use of such groundwater shall be:
1. except as provided in subsection i of this section, Exempt from any replenishment obligation on the part of the buyer or lessee, including a replenishment tax.
2. Excluded from a city's or town's groundwater use for the purposes of determining the city's or town's groundwater allowance.
3. Deemed consistent with the management plan and ACHIEVEMENT of the management goal for the active management area unless the person uses the groundwater or right to groundwater to meet or obtain a certificate, designation or redesignation of assured water supply pursuant to section 45-576.
4. For the purpose of obtaining a certificate, DESIGNATION or REDESIGNATION of assured water supply, deemed physically available to the buyer or to the lessee for the number of years that the department determines the conveyed groundwater or right to groundwater, whether sold or leased, is PHYSICALLY AVAILABLE at the pROPOSED point of WITHDRAWAL and proposed rate of WITHDRAWAL, after a thirty-five percent REDUCTION has been applied PURSUANT to SUBSECTION E of this section. Notwithstanding this paragraph, an applicant for a certificate, designation or redesignation of assured water supply shall comply with the one hundred year requirement prescribed in section 45-576 for an assured water supply. If the department determines that the physical availability of the groundwater or the right to groundwater conveyed PURSUANT to this section is less than one hundred years as required under section 45-576, the applicant shall demonstrate an additional source of water for the remaining number of years.
I. Notwithstanding any other law and after applying the thirty-five percent reduction pursuant to subsection e of this section, a person who receives or withdraws groundwater or a right to groundwater pursuant to this section and who uses or relies on that groundwater or right to groundwater to meet or obtain an assured water supply may not be subject to any replenishment obligation greater than one hundred percent of the actual volume of groundwater that the person actually receives or withdraws pursuant to subsection d of this section.
J. Groundwater that is forgone by a seller as prescribed by subsection G of this section shall be treated by the department as follows:
1. Fifty percent shall be allocated to the common aquifer and treated as inflow for the purposes of any water modeling completed by the department.
2. Fifty percent shall be treated as inflow for the PURPOSES OF any water modeling completed by the department, separately accounted for and reserved for the exclusive benefit of an application for a certificate of assured water supply.
3. For the purposes of any water or potential water use for the seller, all groundwater shall be deemed permanently retired, relinquished or extinguished for the purposes of the seller.
K. Groundwater that is forgone by a lessor as prescribed by subsection g of this section shall:
1. Be excluded from any water modeling used to evaluate an application for a certificate or designation of assured water supply, unless the lease is for a period of one hundred years or longer in which case fifty percent shall be treated as inflow for the purposes of any water modeling completed by the department, separately accounted for and reserved for the exclusive benefit of an application for a certificate of assured water supply.
2. Revert back to the lessor at the end of the lease term.
L. This section does not apply to appropriable surface water or subflow and shall not be construed to modify existing law in any way with respect to determining which water is surface water and which water is groundwater.
M. This section does not authorize the department or any political subdivision of this state to:
1. Curtail the scope of existing grandfathered rights unless the rights are sold, leased or otherwise conveyed pursuant to this section.
2. Impose additional requirements or restrictions on the use or exercise of type 2 non-irrigation grandfathered rights.
n. a sellor or leasor that sells, leases or otherwise conveys the right to pump groundwater or groundwater itself pursuant to this section shall disclose any TRANSACTION costs related to the sale, lease or conveyance in the contract for any such sale, lease or conveyance.
45-652. Department of water resources; online water exchange
The department shall establish, maintain and host on its website an online water exchange for groundwater and groundwater rights that are transferred, sold, leased or otherwise conveyed as prescribed by section 45-651. The online water exchange shall be publicly accessible and shall include for each transaction the information submitted in the notices prescribed by section 45-651.
Sec. 3. Delayed repeal; applicability; report
A. Title 45, chapter 2, article 13, Arizona Revised Statutes, as added by this act, is repealed from and after December 31, 2029.
B. A sale of groundwater or the right to pump groundwater pursuant to title 45, chapter 2, article 13, Arizona Revised Statutes, as added by this act, that was effective on or before January 1, 2030 is valid and enforceable on and after January 1, 2030, except that any agreement for the sale of groundwater or the right to pump groundwater executed pursuant to title 45, chapter 2, article 13, Arizona Revised Statutes, as added by this act, may not include terms or provisions that allow for the sale or lease of groundwater or the right to pump groundwater after January 1, 2030.
C. A lease of groundwater or the right to pump groundwater executed pursuant to title 45, chapter 2, article 13, Arizona Revised Statutes, as added by this act:
1. Shall have an effective date on or before January 1, 2030.
2. Shall be valid and enforceable until January 1, 2030.
3. May not have a lease term beyond January 1, 2030, unless the lease includes in clear and conspicuous terms a provision stating that the conveyance of groundwater or the right to pump groundwater after January 1, 2030 is contingent on legislation extending or repealing the date prescribed in subsection A of this section.
D. The director of the department of water resources shall:
1. Monitor the depth-to-static level and aquifer health of each subbasin affected by transactions made pursuant to section 45-651, Arizona Revised Statutes, as added by this act.
2. On the occurrence of any of the following, quantify the total acute and aggregate volume of groundwater transacted, withdrawn, conveyed and foregone in each subbasin since the effective date of this act, and the total increases, decreases and net increases and decreases to depth-to-static levels in each affected subbasin resulting from such transactions, withdrawals, conveyances and foregone volumes:
(a) Receipt of a written notification made pursuant to section 45-651, subsection B, Arizona Revised Statutes, as added by this act.
(b) Receipt of updated information received pursuant to section 45-651, subsection C, Arizona Revised Statutes, as added by this act.
(c) Approval of a new pumping location pursuant to section 45-651, subsection A, Arizona Revised Statutes, as added by this act, and the rules adopted pursuant to section 45-598, subsection A, Arizona Revised Statutes.
3. Not later than January 1, 2025, 2027 and 2029, prepare and submit to the governor, speaker of the house of representatives and president of the senate a report including all of the following:
(a) The total volume of groundwater and number of grandfathered rights conveyed, leased, sold or otherwise transacted pursuant to this act, disaggregated by grandfathered right type and subbasin, in each year since the effective date of this act.
(b) The total volume of groundwater saved or otherwise left in the aquifer pursuant to section 45-651, subsection E, Arizona Revised Statutes, as added by this act, in each year since the effective date of this act.
(c) The average price per acre-foot for groundwater or groundwater rights conveyed, leased, sold or otherwise transacted pursuant to this act, disaggregated by grandfathered right type and subbasin, in each year since the effective date of this act.
(d) The total and net increases and decreases to depth-to-static levels in each subbasin resulting from transactions made pursuant to this act in each year since the effective date of this act.
(e) A brief narrative describing the director's opinion on the effectiveness of this act to secure future water supplies, strengthen existing water supplies, support continued growth and economic development and improve the overall health and depth-to-water level across the aquifer and each subbasin since the effective date of this act.
(f) Any other information the director deems relevant to the report.
