domestic water improvement districts; hauling

HB2102 - 572R - H Ver

House Engrossed

domestic water
improvement districts; hauling

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HOUSE BILL 2102

AN
ACT

amending sections 48-901, 48-902
and 48-909, Arizona Revised Statutes; relating to county improvement districts.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it
enacted by the Legislature of the State of Arizona:

Section 1. Section 48-901, Arizona Revised
Statutes, is amended to read:

START_STATUTE
48-901.

Definitions

In this article, unless the context otherwise requires:

1. "Assessment" or "assessment
roll" means a special assessment made under this article.

2. "Block" means a parcel of ground,
regular or irregular, bounded by streets or by streets and district boundary
lines.

3. "Chairman of the board" means the
person designated to preside over meetings of the board of directors.

4. "Clerk"
or "district
clerk"
means the clerk of the board of supervisors, who shall be
the clerk under this article and in whose office shall be filed all papers
directed or required to be filed with the clerk.

5. "Commercial farming" means the
intensive cultivation of arable land by the raising of agricultural or
horticultural products as a principal source of the owner's livelihood.

6. "Commercial stock raising" means the
breeding, raising and care of domestic animals as a principal source of the
owner's livelihood.

7. "Contractor" includes personal
representatives or assignee of the contractor.

8. "Delinquency" means delinquency in the
payment of an assessment.

9. "Engineer" or "district
engineer" means a person designated or employed by the board of directors
of a district to perform any or all of the engineering work authorized to be
done by the district under this article.

10. "Improvement bond" means a bond issued
under this article.

11. "Lighting plants" includes electric
light plants, electric power plants, gas plants, distribution systems, poles,
parts, pipes, conduits, wires, tanks, reservoirs, generators for gas or
electricity, transmission lines, towers, lamps, transformers of every
character, machinery, apparatus, equipment and all appliances and structures
necessary or incidental to the construction, installation or operation of a
complete electric light, power and gas plant and distribution system placed on
the streets improved, though extended beyond.

12. "Lot"
:

(
a
)
Includes
any portion, piece, parcel or subdivision of land
.
, but

(
b
) Does
not
include
property owned or controlled by any person as a
railroad
right of way
right-of-way
.

13. "Owner" means the person in whom legal
title appears by recorded deed, or the person in possession under claim or
title, or the person exercising acts of ownership for
himself

the person
or as the personal representative of the
owner, including the boards of trustees of school districts and the boards of
education of high school districts owning property within the proposed
improvement district.

14. "Sewers" includes wastewater treatment
facilities, tunnels, excavations, ditches, drains, conduits, channels, outlets,
outfalls, cesspools, manholes, catch basins, flush tanks, septic tanks,
connecting sewers of every character, machinery, apparatus, equipment and all
appliances and structures necessary or incidental to the construction,
installation or operation of a complete sewer system for either sanitary or
drainage purposes.

15. "Street" includes avenues, alleys,
highways, lanes, crossings, intersections, courts, places and grounds opened or
dedicated to public use and public ways.

16. "Street superintendent" or
"superintendent" means a county employee designated by the board of
supervisors to perform the duties of street superintendent for all the
districts organized under this article in any county.

17. "Time of delinquency"
means the time when assessments become delinquent.

18.
17.
"Treasurer"
or "district treasurer" means the treasurer of the county in which a
district is situated, who shall be the treasurer of the district.

19.
18.
"Unincorporated
area" means any portion of a county not within the limits of an
incorporated city or town, so situated that any of the improvements provided
for in this article might reasonably or properly be made or constructed for the
benefit of the inhabitants of the area under existing special assessment
statutes if the area were situated within an incorporated city or town.

20.
19.
"Wastewater
systems" means sewers and other wastewater treatment facilities.

21.
20.
"Waterworks"
:

(
a
)
Means
works for the storage or development of water for domestic uses
.

, including

(
b
) Includes
drinking
water treatment facilities, wells, pumping machinery, power plants,
standpipes,
pipelines and all equipment necessary for those
purposes.

22.
21.
"Work"
or "improvement" includes any of the improvements mentioned and
authorized to be made in this article, the construction, reconstruction and
repair of all or any portion of any such improvement, and labor, services, expenses
and material necessary or incidental thereto.
END_STATUTE

Sec. 2. Section 48-902, Arizona Revised Statutes, is amended to read:

START_STATUTE
48-902.

Authorization for improvement district; areas and lands excluded

A. An improvement
district may be established in any unincorporated area, whether or not
contiguous, by the board of supervisors of the county in which the proposed
district is located, for the purpose of constructing and operating a wastewater
treatment facility
or a domestic water delivery system that is
located
in a subsequent active management area
ESTABLISHED PURSUANT TO TITLE 45, CHAPTER 2, ARTICLE 2 OR that is
located IN A BASIN OR SUBBASIN FROM WHICH GROUNDWATER MAY BE TRANSPORTED
PURSUANT TO TITLE 45, CHAPTER 2, ARTICLE 8.1 for the purpose of delivering
water through water hauling
and making other local improvements or
acquisitions in the district or for the benefit of the district that are
permitted

allowed
by this article, and may
contract for or in any other manner provide transportation services within the
district through special assessments in such districts, or the issuing of bonds
or making other contractual arrangements for improvements, and levying taxes
for the operation and maintenance of improvements and streets within the
district or for the benefit of the district.

B. With written consent of the state land
commissioner
,
an improvement district may include state
lands or state trust lands within its boundaries, but those lands shall not be
included for purposes of forming or objecting to the formation or expansion of
a district.

C. Notwithstanding subsection A of this section, an
improvement district established for the purposes described in section 48-909,
subsection A, paragraph 1, 6, 7 or 10 may include areas in an incorporated city
or town with the consent of the city's or town's governing body.

D. At the time of the establishment of an
improvement district,
none of
the following shall
not
be included in the improvement district:

1. Territory lying within an incorporated city or
town except as provided in subsection C of this section.

2. Lands owned or held by any common carrier for use
in connection with interstate or intrastate commerce.

3. Unpatented mining claims.

E. Unless the improvement district is formed for the
purposes described in section 48-909, subsection A, paragraph 7, at the
time of establishment of an improvement district,
none of

the following shall
not
be included in the improvement
district if the owner objects to such inclusion as provided in subsection F of
this section:

1. Lands owned or held for mining or metallurgical
purposes.

2. Any tract of land of twenty or more acres in area
actually used for commercial farming or commercial stock raising, or any
subdivided lands of which lots or blocks have not been offered generally for
sale since the lands were subdivided.

F. The owner of any property included in the
classifications listed in subsection E of this section may have the property
excluded from the proposed improvement district if the owner files a verified
statement with the board of supervisors
prior to

before
the adoption of the resolution ordering the formation of
the district, stating that the person executing the statement is one of the
owners of the respective lot or parcel, the respective classification, that the
lot or parcel is within such classification on the date of the statement, the
legal description of the lot or parcel and that the signer requests that the
lot or parcel be excluded from the improvement district. Any
property owner may contest the statement at the hearing on formation of the
improvement district.� The board of supervisors shall rule on all such
objections.

G. A domestic water improvement district may be
formed or expanded in noncontiguous areas. If the proposed
boundaries of a noncontiguous district are located within six miles of an
incorporated city or town, the district shall obtain the consent of the
governing body of the city or town
prior to

before
the formation or expansion of the district.
END_STATUTE

Sec. 3. Section 48-909, Arizona Revised
Statutes, is amended to read:

START_STATUTE
48-909.

Purposes for which
public improvements may be undertaken; powers incidental to public improvements

A. When the public interest or convenience requires,
the board of directors of an improvement district may
order
:

1.
order
the whole or any
portion, either in length or width, of one or more of the streets of the
district graded or regraded, paved or repaved, landscaped or otherwise
maintained, improved or reimproved.

2.
order
the acquisition,
construction, reconstruction or repair of any street, tunnel, subway, viaduct
or conduit in, on, under or over which the district may have an easement or
right-of-way therefor.

3.
order
the construction or
reconstruction of sidewalks, crosswalks, curbs, gutters, culverts, bridges,
tunnels, siphons, manholes, steps, parkings and parkways.

4.
order
the placement,
replacement or repair of pipes, hydrants and appliances for fire protection.

5.
order
the acquisition,
construction, reconstruction, maintenance or repair of wastewater treatment
facilities, sewers, ditches, drains, conduits, pipelines and channels for
sanitary and drainage purposes, with outlets, cesspools, manholes, catch
basins, flush tanks, septic tanks, connecting sewers, ditches, drains,
conduits, channels and other appurtenances in, under, over or through any
street or any land of the district or any right-of-way granted or
obtained for such a purpose, either within or without the district limits.

6.
order

the acquisition, construction, reconstruction, maintenance or repair of
waterworks, including
wells, standpipes and
drinking
water treatment facilities, for the delivery of water for domestic purposes,
including for the delivery of water in a subsequent active management
area
ESTABLISHED PURSUANT TO TITLE 45, CHAPTER 2, ARTICLE
2 OR IN A BASIN OR SUBBASIN FROM WHICH GROUNDWATER MAY BE TRANSPORTED PURSUANT
TO TITLE 45, CHAPTER 2, ARTICLE 8.1 through water hauling,
and of wells,
ditches, canals, channels, conduits, pipelines and siphons, together with the
necessary or usual appurtenances for carrying
storm water

stormwater
or water from irrigation ditches, watercourses,
streams or springs into, through or out of the district in, under, over or
through any street, or any land of the district or any right-of-way granted or
obtained for such a purpose, either within or without the district
limits. This section does not prohibit the board of directors of an
improvement district from purchasing an existing domestic water delivery system
within the district or outside the district or constructing an initial or
improving an existing domestic water delivery system inside or outside the district.

7.
order
the construction,
reconstruction or repair of breakwater levees or walls, riverbank protection or
replacement of riverbanks and supporting land. A district
established for this purpose shall cooperate and coordinate its plans and
activities with the county flood control district established in the county and
any incorporated city or town in which the district is established.

8.
order
the acquisition,
construction, reconstruction or repair of lighting plants and poles, wire
conduits, lamps, standards and other appliances for the purpose of lighting and
beautifying streets or other public lands.

9.
order
the construction,
reconstruction or repair of any work incidental to or connected with any
improvement.

10.
order
the acquisition, in
the name of the district, by gift, purchase or otherwise and the maintenance,
repair, improvement or disposal of any real or personal property necessary or
convenient for district operation for a community center, park or recreational
area.

11. Pursuant to section 48-902,
the
board of directors of an improvement district may
contract for or in any
other manner provide transportation services within the district.

B. In addition to the powers specifically granted by
or reasonably inferred from this article, an improvement district through its
board of directors may:

1.
Except as prescribed by subsection
f of this section,
acquire by gift, purchase, condemnation or otherwise
in the name of the district and own, control, manage and dispose of any real or
personal property or interest in the property necessary or convenient for the
construction, operation and maintenance of any of the improvements provided for
by this article.

2. Join with any other improvement district, any
city, town, governmental agency or Indian tribe, or any agency or
instrumentality of an Indian tribe, or any person in the construction,
operation or maintenance of any of the improvements hereby authorized.

3. Join with any other improvement district or any
city, town, county or Indian tribe, or any agency or instrumentality of an
Indian tribe, in improving streets running on or along the boundary of the
district and levy assessments and issue bonds for the district's part of the
cost of those improvements.

4. Sell, lease or otherwise dispose of any property
of the district or interest in the property when the property is no longer
required for the purposes of the district or the use of which may be permitted
without interfering with the use thereof by the district.

5. Sell or otherwise dispose of any property or
material acquired in the construction or operation of any improvements as a
by-product or otherwise, and acquire rights-of-way for the disposal
by condemnation or otherwise.

6. Accept from this state or the federal government,
or any agency, department or instrumentality of either, grants for or in aid of
the construction of any of the improvements provided for by this chapter.

7. Notwithstanding any other law, sell improvement
bonds to the federal government, or any agency, department or instrumentality
of the federal government, for the construction of any of the improvements
provided by this chapter.

8. Enter into contracts with this state or the
federal government, or any agency, department or instrumentality of either or
both, for the construction or supervision of construction by
the

this
state
of Arizona
or the federal
government, or any agency, department or instrumentality of either or both, but
reserving to the district the right to assess against the property benefited by
the improvement, and located within the district, that portion of the cost of the
improvement that does not qualify for aid under a state or federal grant.

9. Operate, maintain and repair the streets within
the district and any improvements made pursuant to this chapter.

10. Do all things incidental to the exercise of the
powers granted by this article.

C. A county improvement district formed for the
purpose of purchasing an existing or constructing a new domestic water delivery
system within the district or outside the district shall have the same
authority and responsibility as an incorporated city or town pursuant to title
45 and chapters 22 and 28 of this title.

D. An improvement district that proposes to provide
domestic water service within the certificated area of a public service
corporation serving domestic water shall provide just compensation to the
public service corporation pursuant to section 9-516 for the facilities
or certificated area taken. The right to compensation for a public
service corporation from an improvement district shall not apply if no
facilities of the public service corporation are actually acquired by the
improvement district and either of the following conditions exist:

1. At the time the law providing for compensation
became effective the certificated area for which compensation is sought is an
area that was within the boundaries of an improvement district.

2. A certificate is issued to a public service
corporation for any area that is within an improvement district at the time the
certificate is issued.

E. If the county board of supervisors determines
that the public interest or convenience so requires, an improvement district
that is formed for the purposes of providing domestic water service pursuant to
article 4 of this chapter may also provide domestic wastewater service.

F. An improvement district that is
formed in a subsequent active management area
ESTABLISHED
PURSUANT TO TITLE 45, CHAPTER 2, ARTICLE 2 OR IN A BASIN OR SUBBASIN FROM WHICH
GROUNDWATER MAY BE TRANSPORTED PURSUANT To TITLE 45, CHAPTER 2, ARTICLE 8.1 for
the purpose of delivering water through water hauling may exercise the power of
eminent domain only for the limited purpose of acquiring or otherwise securing
a site in the subsequent active management area
or 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.
END_STATUTE