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HB2055 - 572R - H Ver
House Engrossed
brackish groundwater
recovery program
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HOUSE BILL 2055
AN
ACT
amending section 49-1303, Arizona
Revised Statutes; amending title 49, chapter 8, Arizona Revised Statutes, by
adding article 6; RELATING to the water infrastructure finance authority.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 49-1303, Arizona Revised
Statutes, is amended to read:
START_STATUTE
49-1303.
Long-term water augmentation fund; purposes; limit
A. Monies and other assets in the long-term water
augmentation fund may be used for the following purposes:
1. Funding water supply development projects that
import water from outside the boundaries of this state. At least
seventy-five percent of the monies in the fiscal years 2022-2023, 2023-2024
and 2024-2025 appropriations to the fund shall be reserved for one or
more projects with this purpose, and those monies shall be accounted for
separately.
2. Purchasing imported water or rights to imported
water.
3. Acquiring or constructing water-related
facilities in this state to convey or deliver imported water within
the
this
state.
4. Conducting investigations, including performing
environmental or other reviews.
5. Contracting for water needs assessments.
6. Providing financial assistance to eligible
entities
for the purposes of financing or refinancing
to finance or refinance
water supply development projects
within this state, including projects for conservation through reducing
existing water use or more efficient uses of existing water supplies.
7. Guaranteeing debt obligations of eligible
entities that are issued or incurred to finance or refinance water supply
development projects within this state or providing credit enhancements in
connection with these debt obligations.
8. Paying the costs to administer the fund.
9. Funding not more than ten full-time
equivalent positions of the authority.
10. Developing one or
more brackish groundwater recovery projects pursuant to article 6 of this
chapter that create new sources of potable water within the boundaries of this
state.
B. In providing financial assistance from the
long-term water augmentation
fund, the authority shall comply
with section 49-1304.
C. Monies in the
long-term water
augmentation
fund may not be used to purchase conservation or other
similar easements on real property.
D. If the monies pledged to secure long-term
water augmentation bonds issued pursuant to section 49-1309 become
insufficient to pay the principal and interest on the long-term water
augmentation bonds guaranteed by the
long-term water
augmentation
fund, the authority shall direct the state treasurer to
liquidate securities in the
long-term water augmentation
fund as
may be
necessary and shall apply those proceeds to
make current all payments then due on the long-term water augmentation bonds.�
The state treasurer shall immediately notify the attorney general and auditor
general of the insufficiency. The auditor general shall audit the
circumstances surrounding the depletion of the
long-term water
augmentation
fund and report the findings to the attorney
general. The attorney general shall conduct an investigation and
report those findings to the governor and the legislature.
E. The authority shall take necessary actions to
obtain full repayment for monies or financial assistance provided from the
long-term water augmentation
fund by the recipients of the
funding or financial assistance or the recipients of any water supply
development project made available from monies from the
long-term
water augmentation
fund through water subcontracts, loan repayments,
rates, fees, charges or otherwise, as appropriate. This subsection
does not apply to monies spent by the authority for investigations and studies
or monies spent in connection with loan guarantees or credit enhancement.
END_STATUTE
Sec. 2. Title 49, chapter 8, Arizona Revised
Statutes, is amended by adding article 6, to read:
ARTICLE
6. BRACKISH GROUNDWATER RECOVERY PROGRAM
START_STATUTE
49-1341.
Brackish groundwater recovery program fund
A. The brackish groundwater recovery
program fund is established consisting of all of the following:
1. Monies appropriated by the
legislature.
2. Monies received from the united
states government for any allowable purpose of the brackish groundwater
recovery program.
3. Monies received as loan
repayments, interest, administrative fees and penalties.
4. Monies from any lawful activity of
the authority, including public-private partnership agreements relating to
water supply development projects.
5. Interest and other income received
from investing monies in the brackish groundwater recovery program fund.
6. Gifts, grants and donations
received from any public or private source for the purposes of the brackish
groundwater recovery program fund.
B. Monies in the fund are
continuously appropriated and are exempt from the provisions of section 35-190
relating to lapsing of appropriations. On notice from the authority,
the state treasurer shall invest and divest monies in the fund as provided by
sections 35-313 and 35-314.03, and monies earned from investment shall be
credited to the fund.
C. All monies shall be deposited,
pursuant to sections 35-146 and 35-147, in the fund and shall be held in
trust. The monies in the fund may not be appropriated or transferred
by the legislature to fund the general operations of this state or to otherwise
meet the obligations of the state general fund unless approved by a
three-fourths vote of the members of each house of the legislature.
D. The authority shall administer the
fund. The authority shall establish as many other accounts and
subaccounts as required to administer the fund.
E. Not more than ten percent of the
monies in the fund may be used to cover staffing and administrative costs.
F. The authority shall use the monies
and other assets in the fund solely for the purposes authorized by this
article.
END_STATUTE
START_STATUTE
49-1342.
Brackish groundwater recovery program fund; purposes; criteria
A. The authority shall use the monies
in the brackish groundwater recovery program fund established by section 49-1341
to provide matching dollars for the development and construction of qualifying
brackish groundwater recovery and desalination projects within this state
but outside the boundaries of an initial active management area. Not
more than $1 shall be awarded per $3 of total capital expenditures per
qualifying project. Not more than one qualifying project shall be
awarded monies per request for proposals.
B. The authority
may not grant monies from the brackish groundwater recovery program
fund established by section 49-1341 without first issuing a request for
proposals to develop and construct a qualifying brackish groundwater recovery
and desalination project
pursuant to this section.
C. the authority shall evaluate
proposals that are submitted in response to the request for proposals and
select a
winning project for ISSUING matching dollars
based on the criteria adopted pursuant to this section.
D. The authority shall grant monies
pursuant to this section contingent on the execution of proposed projects and
expenditure of capital costs within a time frame the authority determines
following the award of monies.
E. the authority, in consultation
with the department of water resources, shall establish all of the following:
1. the Minimum information that a
qualifying bidder must include with a proposed project to be considered for
evaluation, including all of the following:
(
a
) Design and
engineering studies or reports.
(
b
) Site
location, right-of-way and land ownership information.
(
c
) Depth-to-water,
salinity levels and other hydrological information.
(
d
) withdrawal
permit and groundwater rights and access information.
(
e
) the Method
of brackish groundwater recovery, treatment and desalination.
(
f
) the Method
of desalination brine disposal.
(
g
) the total
volume of brackish groundwater expected to be desalinated.
(
h
) the Total
project capacity and expected output.
(
i
) the
Proximity to likely offtakers and the proposed method of transportation or
delivery of treated brackish groundwater to the offtakers in the basin.
(
j
) the total
estimated capital cost for the project.
2. the Minimum criteria that the
authority will use to evaluate the feasibility and viability of qualifying
projects submitted in response to a request for proposals and to select a
winning project. the Criteria to select a winning project shall
include all of the following:
(
a
) the
cost-effectiveness of the project.
(
b
) the
reliability and long-term security of the water supply to be developed through
the project.
(
c
) the impact
to the regional aquifer and local water users from the project's brackish
groundwater withdrawals.
(
d
) the impacts
to the regional aquifer and local water users from the project's brine
disposal.
(
e
) comments
from water users, local residents and affected jurisdictions.
3. the Minimum criteria that a bidder
must satisfy to qualify for participation in the program and to submit
proposals in response to a request for proposals.
4. the Minimum criteria that the
authority will use to evaluate the technical, financial and managerial
capabilities of a qualifying bidder that submits a proposal in response to a
request for proposals.
END_STATUTE