adequate water supply; statewide requirements

HB2514 - 572R - I Ver

REFERENCE TITLE:
adequate water supply; statewide requirements

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 2514

Introduced by

Representatives
Stahl Hamilton: Garcia, Gutierrez, Sandoval, Simacek, Travers, Villegas;�
Senators Gabald�n, Ortiz

AN
ACT

amending sections 9-463.01, 11-823,
32-2181, 32-2183, 32-2197.08, 33-406, 45-108 and 45-108.01, Arizona Revised
Statutes; repealing sections 45-108.02 and 45-108.03, Arizona Revised
Statutes; amending sections 45-108.04, 45-576 and 48-6414, Arizona
Revised Statutes; relating to water.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Section 9-463.01, Arizona Revised
Statutes, is amended to read:

START_STATUTE
9-463.01.

Authority

A. Pursuant to this article, the legislative body of
every municipality shall regulate the subdivision of all lands within its
corporate limits.

B. The legislative body of a municipality shall
exercise the authority granted in subsection A of this section by ordinance
prescribing:

1. Procedures to be followed in the preparation,
submission, review and approval or rejection of all final plats.

2. Standards governing the design of subdivision
plats.

3. Minimum requirements and standards for the
installation of subdivision streets, sewer and water utilities and improvements
as a condition of final plat approval.

C. By ordinance, the legislative body of any
municipality shall:

1. Require the preparation, submission and approval
of a preliminary plat as a condition precedent to submission of a final plat.

2. Establish the procedures to be followed in the
preparation, submission, review and approval of preliminary plats.

3. Make requirements as to the form and content of
preliminary plats.

4. Either determine that certain lands may not be subdivided,
by reason of adverse topography, periodic inundation, adverse soils, subsidence
of the earth's surface, high water table, lack of water or other natural or man-made
hazard to life or property, or control the lot size, establish special grading
and drainage requirements and impose other regulations deemed reasonable and
necessary for the public health, safety or general welfare on any lands to be
subdivided affected by such characteristics.

5. Require payment of a proper and reasonable fee by
the subdivider based on the number of lots or parcels on the surface of the
land to defray municipal costs of plat review and site inspection.

6. Require the dedication of public streets, sewer
and water utility easements or rights-of-way, within the proposed
subdivision.

7. Require the preparation and submission of
acceptable engineering plans and specifications for the installation of
required street, sewer, electric and water utilities, drainage, flood control,
adequacy of water and improvements as a condition precedent to recordation of
an approved final plat.

8. Require the posting of performance bonds,
assurances or such other security as may be appropriate and necessary to assure
the installation of required street, sewer, electric and water utilities,
drainage, flood control and improvements meeting established minimum standards
of design and construction. The municipality may allow an applicant
to request a hold on the issuance of a certificate of occupancy as a security
required by this paragraph to assure the installation of the required streets,
sewer, electric and water utilities, drainage, flood control and improvements
meeting established standards of design and construction.

D. The legislative body of any municipality may
require by ordinance that land areas within a subdivision be reserved for
parks, recreational facilities, school sites and fire stations subject to the
following conditions:

1. The requirement may only be made on preliminary
plats filed at least thirty days after the adoption of a general or specific
plan affecting the land area to be reserved.

2. The required reservations are in accordance with
definite principles and standards adopted by the legislative body.

3. The land area reserved shall be of such a size
and shape as to allow the remainder of the land area of the subdivision within
which the reservation is located to develop in an orderly and efficient manner.

4. The land area reserved shall be in such multiples
of streets and parcels as to allow an efficient division of the reserved area
in the event that it is not acquired within the prescribed period.

5. If groundwater savings credits have been pledged
to a certificate of assured water supply for a subdivision, a municipality may
not condition final approval of the subdivision plat on inclusion of a school
site within the subdivision plat unless all of the following apply:

(a) The municipality pledges to the certificate of
assured water supply a volume of water that is equal to the probable water use
on the school site as determined by the director of the department of water
resources.

(b) The water pledged by a municipality pursuant to
this paragraph meets all requirements for inclusion as an assured water supply
as prescribed in title 45, chapter 2.

(c) The municipality does not require an applicant
for final plat approval to procure or provide monies to procure water that is
required to be pledged by a municipality pursuant to this paragraph.

E. The public agency for whose benefit an area has
been reserved shall have a period of one year after recording the final
subdivision plat to enter into an agreement to acquire such reserved land
area. The purchase price shall be the fair market value of the
reserved land area at the time of the filing of the preliminary subdivision
plat plus the taxes against such reserved area from the date of the reservation
and any other costs incurred by the subdivider in the maintenance of such
reserved area, including the interest cost incurred on any loan covering such
reserved area.

F. If the public agency for whose benefit an area
has been reserved does not exercise the reservation agreement set forth in
subsection E of this section within such one-year period or such extended
period as may be mutually agreed on by such public agency and the subdivider,
the reservation of such area shall terminate.

G. The legislative body of every municipality shall
comply with this article and applicable state statutes pertaining to the
hearing, approval or rejection, and recordation of:

1. Final subdivision plats.

2. Plats filed for the purpose of reverting to
acreage of land previously subdivided.

3. Plats filed for the purpose of vacating streets
or easements previously dedicated to the public.

4. Plats filed for the purpose of vacating or
redescribing lot or parcel boundaries previously recorded.

H. Approval of every preliminary and final plat by a
legislative body is conditioned on compliance by the subdivider with:

1. Rules as may be established by the department of
transportation relating to provisions for the safety of entrance on and
departure from abutting state primary highways.

2. Rules as may be established by a county flood
control district relating to the construction or prevention of construction of
streets in land established as being subject to periodic inundation.

3. Rules as may be established by the department of
health services or a county health department relating to the provision of
domestic water supply and sanitary sewage disposal.

I. If the subdivision is composed of subdivided
lands, as defined in section 32-2101, and is within an active management
area, as defined in section 45-402, the final plat shall not be approved
unless it is accompanied by a certificate of assured water supply issued by the
director of water resources, or unless the subdivider has obtained a written
commitment of water service for the subdivision from a city, town or private
water company designated as having an assured water supply by the director of
water resources pursuant to section 45-576 or is exempt from the
requirement pursuant to section 45-576. The legislative body
of the municipality shall note on the face of the final plat that a certificate
of assured water supply has been submitted with the plat or that the subdivider
has obtained a written commitment of water service for the proposed subdivision
from a city, town or private water company designated as having an assured
water supply, pursuant to section 45-576, or is exempt from the
requirement pursuant to section 45-576.

J. Except as provided in
subsections K
and P

subsection L

of this section, if the subdivision is composed of subdivided
lands as defined in section 32-2101 outside of an active management area
and the director of water resources has given written notice to the
municipality pursuant to section 45-108, subsection H
, the final
plat shall not be approved unless one of the following applies:

1. The director of water resources has determined
that there is an adequate water supply for the subdivision pursuant to section
45-108 and the subdivider has included the report with the plat.

2. The subdivider has obtained a written commitment
of water service for the subdivision from a city, town or private water company
designated as having an adequate water supply by the director of water
resources pursuant to section 45-108.

K. The legislative body of a
municipality that has received written notice from the director of water
resources pursuant to section 45-108, subsection H or that has adopted an
ordinance pursuant to subsection O of this section may provide by ordinance an
exemption from the requirement in subsection J or O of this section for a
subdivision that the director of water resources has determined will have an
inadequate water supply because the water supply will be transported to the
subdivision by motor vehicle or train if all of the following apply:

1. The legislative body determines
that there is no feasible alternative water supply for the subdivision and that
the transportation of water to the subdivision will not constitute a
significant risk to the health and safety of the residents of the subdivision.

2. If the water to be transported to
the subdivision will be withdrawn or diverted in the service area of a
municipal provider as defined in section 45-561, the municipal provider
has consented to the withdrawal or diversion.

3. If the water to be transported is
groundwater, the transportation complies with the provisions governing the
transportation of groundwater in title 45, chapter 2, article 8.

4. The transportation of water to the
subdivision meets any additional conditions imposed by the legislative body.

L. A municipality that adopts the
exemption authorized by subsection K of this section shall give written notice
of the adoption of the exemption, including a certified copy of the ordinance
containing the exemption, to the director of water resources, the director of
environmental quality and the state real estate commissioner. If the
municipality later rescinds the exemption, the municipality shall give written
notice of the rescission to the director of water resources, the director of
environmental quality and the state real estate commissioner. A municipality
that rescinds an exemption adopted pursuant to subsection K of this section
shall not readopt the exemption for at least five years after the rescission
becomes effective.

M.

k.
If
the legislative body of a municipality approves a subdivision plat pursuant to
subsection J, paragraph 1 or 2
or subsection O
of
this section, the legislative body shall
:

1.
Note on the face of the
plat that the director of water resources has reported that the subdivision has
an adequate water supply or that the subdivider has obtained a commitment of
water service for the proposed subdivision from a city, town or private water
company designated as having an adequate water supply pursuant to section 45-108.

N. If the legislative body of a
municipality approves a subdivision plat pursuant to an exemption authorized by
subsection K of this section or granted by the director of water resources
pursuant to section 45-108.02 or 45-108.03:

1.

2.
The legislative body shall
Give written notice of the approval
to the director of water resources and the director of environmental quality.

2. The legislative body shall include
on the face of the plat a statement that the director of water resources has
determined that the water supply for the subdivision is inadequate and a
statement describing the exemption under which the plat was approved, including
a statement that the legislative body or the director of water resources,
whichever applies, has determined that the specific conditions of the exemption
were met.� If the director subsequently informs the legislative body that the
subdivision is being served by a water provider that has been designated by the
director as having an adequate water supply pursuant to section 45-108,
the legislative body shall record in the county recorder's office a statement
disclosing that fact.

O. If a municipality has not been
given written notice by the director of water resources pursuant to section 45-108,
subsection H, the legislative body of the municipality, to protect the public
health and safety, may provide by ordinance that, except as provided in
subsections K and P of this section, the final plat of a subdivision located in
the municipality and outside of an active management area will not be approved
by the legislative body unless the director of water resources has determined
that there is an adequate water supply for the subdivision pursuant to section
45-108 or the subdivider has obtained a written commitment of water
service for the subdivision from a city, town or private water company
designated as having an adequate water supply by the director of water
resources pursuant to section 45-108. Before holding a public hearing to
consider whether to enact an ordinance pursuant to this subsection, a
municipality shall provide written notice of the hearing to the board of
supervisors of the county in which the municipality is located. A
municipality that enacts an ordinance pursuant to this subsection shall give
written notice of the enactment of the ordinance, including a certified copy of
the ordinance, to the director of water resources, the director of
environmental quality, the state real estate commissioner and the board of
supervisors of the county in which the municipality is located. If a
municipality enacts an ordinance pursuant to this subsection, water providers
may be eligible to receive monies in a water supply development fund, as
otherwise provided by law.

P.

l.
Subsections
Subsection
J
and
O
of this section
do

does
not
apply to
:

1. A proposed subdivision that the
director of water resources has determined will have an inadequate water supply
pursuant to section 45-108 if the director grants an exemption for the
subdivision pursuant to section 45-108.02 and the exemption has not
expired or if the director grants an exemption pursuant to section 45-108.03.

2.
a proposed subdivision that
received final plat approval from the municipality before the requirement for
an adequate water supply became effective in the municipality if the plat has
not been materially changed since it received the final plat approval.� If
changes were made to the plat after the plat received the final plat approval,
the director of water resources shall determine whether the changes are
material pursuant to the rules adopted by the director to implement section 45-108.
If the municipality approves a plat pursuant to this
paragraph
subsection
and the director of water resources has determined
that there is an inadequate water supply for the subdivision pursuant to
section 45-108, the municipality shall note this on the face of the plat.

Q. If the subdivision is composed of
subdivided lands as defined in section 32-2101 outside of an active
management area and the municipality has not received written notice pursuant
to section 45-108, subsection H and has not adopted an ordinance pursuant
to subsection O of this section:

1. If the director of water resources
has determined that there is an adequate water supply for the subdivision
pursuant to section 45-108 or if the subdivider has obtained a written
commitment of water service for the subdivision from a city, town or private
water company designated as having an adequate water supply by the director of
water resources pursuant to section 45-108, the municipality shall note
this on the face of the plat if the plat is approved.

2. If the director of water resources
has determined that there is an inadequate water supply for the subdivision
pursuant to section 45-108, the municipality shall note this on the face
of the plat if the plat is approved.

R.

m.
Every
municipality is responsible for the recordation of all final plats approved by
the legislative body and shall receive from the subdivider and transmit to the
county recorder the recordation fee established by the county recorder.

S.

n.
Pursuant
to provisions of applicable state statutes, the legislative body of any
municipality may itself prepare or have prepared a plat for the subdivision of
land under municipal ownership.

T.

o.
The
legislative bodies of cities and towns may regulate by ordinance land splits
within their corporate limits. Authority granted under this section
refers to the determination of division lines, area and shape of the tracts or
parcels and does not include authority to regulate the terms or condition of
the sale or lease nor does it include the authority to regulate the sale or
lease of tracts or parcels that are not the result of land splits as defined in
section 9-463.

U.

p.
For
any subdivision that consists of ten or fewer lots, tracts or parcels, each of
which is of a size as prescribed by the legislative body, the legislative body
of each municipality may expedite the processing of or waive the requirement to
prepare, submit and receive approval of a preliminary plat as a condition
precedent to submitting a final plat and may waive or reduce infrastructure
standards or requirements proportional to the impact of the
subdivision. Requirements for dust-controlled access and
drainage improvements shall not be waived.
END_STATUTE

Sec. 2. Section 11-823, Arizona Revised
Statutes, is amended to read:

START_STATUTE
11-823.

Water supply; adequacy; exemption

A. To protect the public health and safety,
the general regulations adopted by the board pursuant to section 11-821,
subsection B, if approved by unanimous vote of the board of supervisors, may
provide that, except as provided in subsection C and subsection D, paragraph 1
of this section,
the board or a county employee who is

authorized by the adopted county ordinance shall not
approve a final plat for a subdivision composed of subdivided lands, as defined
in section 32-2101, located outside of an active management area, as
defined in section 45-402, unless one of the following applies:

1. The director of water resources has determined
that there is an adequate water supply for the subdivision pursuant to section
45-108 and the subdivider has included the report with the plat.

2. The subdivider has obtained a written commitment
of water service for the subdivision from a city, town or private water company
designated as having an adequate water supply by the director of water
resources pursuant to section 45-108.

B. If the board unanimously adopts the
provision authorized by subsection A of this section:

1. The board may include in the
general regulations an exemption from the provision for a subdivision that the
director of water resources has determined will have an inadequate water supply
because the water supply will be transported to the subdivision by motor
vehicle or train if all of the following apply:

(a) The board determines that there is
no feasible alternative water supply for the subdivision and that the
transportation of water to the subdivision will not constitute a significant
risk to the health and safety of the residents of the subdivision.

(b) If the water to be transported to
the subdivision will be withdrawn or diverted in the service area of a
municipal provider as defined in section 45-561, the municipal provider
has consented to the withdrawal or diversion.

(c) If the water to be transported is
groundwater, the transportation complies with the provisions governing the
transportation of groundwater in title 45, chapter 2, article 8.

(d) The transportation of water to the
subdivision meets any additional conditions imposed by the county.

2. The board shall promptly give
written notice of the adoption of the provision to the director of water
resources, the director of environmental quality and the state real estate
commissioner.� The notice shall include a certified copy of the provision and
any exemptions adopted pursuant to paragraph 1 of this
subsection. Water providers may be eligible to receive monies in a
water supply development fund, as otherwise provided by law.

3. The board shall not rescind the
provision or amend it in a manner that is inconsistent with subsection A of
this section.� If the board amends the provision, it shall give written notice
of the amendment to the director of water resources, the director of
environmental quality and the state real estate commissioner.� The board may
rescind an exemption adopted pursuant to paragraph 1 of this subsection.� If
the board rescinds the exemption, it shall give written notice of the
rescission to the director of water resources, the director of environmental
quality and the state real estate commissioner, and the board shall not readopt
the exemption for at least five years after the rescission becomes effective.

4.

b.
If
the board or a county employee who is

authorized
by the adopted county ordinance approves a subdivision plat pursuant to
subsection A, paragraph 1 or 2 of this section, the board shall note on the
face of the plat that the director of water resources has reported that the
subdivision has an adequate water supply or that the subdivider has obtained a
commitment of water service for the proposed subdivision from a city, town or
private water company designated as having an adequate water supply pursuant to
section 45-108.

5. If the board or
a county employee who is authorized by the adopted county ordinance
approves a subdivision plat pursuant to an exemption authorized by paragraph 1
of this subsection or granted by the director of water resources pursuant to
section 45-108.02 or 45-108.03:

(a) The board shall give written
notice of the approval to the director of water resources and the director of
environmental quality.

(b) The board shall include on the
face of the plat a statement that the director of water resources has
determined that the water supply for the subdivision is inadequate and a
statement describing the exemption under which the plat was approved, including
a statement that the board or the director of water resources, whichever
applies, has determined that the specific conditions of the exemption were
met. If the director of water resources subsequently informs the
board that the subdivision is being served by a water provider that has been
designated by the director as having an adequate water supply pursuant to
section 45-108, the board shall record in the county recorder's office a
statement disclosing that fact.

C. Subsection A of this section does not apply to
:

1. A proposed subdivision that the
director of water resources has determined will have an inadequate water supply
pursuant to section 45-108 if the director grants an exemption for the
subdivision pursuant to section 45-108.02 and the exemption has not
expired or the director grants an exemption pursuant to section 45-108.03.

2.
a proposed subdivision that
received final plat approval from the county before the requirement for an
adequate water supply became effective in the county if the plat has not been
materially changed since it received the final plat approval.� If changes were
made to the plat after the plat received the final plat approval, the director
of water resources shall determine whether the changes are material pursuant to
the rules adopted by the director to implement section 45-108.� If the
county approves a plat pursuant to this
paragraph

subsection
and the director of water resources has determined
that there is an inadequate water supply for the subdivision pursuant to
section 45-108, the county shall note this on the face of the plat.

D. If the subdivision is composed of
subdivided lands as defined in section 32-2101 outside of an active
management area and the board has not adopted a provision pursuant to
subsection A of this section:

1. If the director of water resources
has determined that there is an adequate water supply for the subdivision
pursuant to section 45-108 or if the subdivider has obtained a written
commitment of water service for the subdivision from a city, town or private
water company designated as having an adequate water supply by the director of
water resources pursuant to section 45-108, the board or
a county employee who is authorized by the adopted county ordinance
shall note this on the face of the plat if the plat is approved.

2. If the director of water resources
has determined that there is an inadequate water supply for the subdivision
pursuant to section 45-108, the board or
a county
employee who is authorized by the adopted county ordinance shall note this on
the face of the plat if the plat is approved.
END_STATUTE

Sec.
3.
Section
32-2181, Arizona Revised Statutes, is amended to read:

START_STATUTE
32-2181.

Notice to
commissioner of intention to subdivide lands; unlawful acting in concert; exceptions;
deed restrictions; definition

A. Before offering subdivided lands
for sale or lease, the subdivider shall notify the commissioner in writing of
the subdivider's intention.� The notice shall contain:

1. The name and address of the
owner. If the holder of any ownership interest in the land is other
than an individual, such as a corporation, partnership or trust,
the notice shall contain
a
statement naming the type of legal entity and listing the interest and the
extent of any interest of each principal in the entity.� For the purposes of
this section, "principal" means any person or entity having a ten
per cent

percent
or more financial interest or, if the legal
entity is a trust,
the name and address of
each beneficiary of the trust holding a ten
per cent

percent
or more beneficial interest.

2. The name and address of the
subdivider.

3. The legal description and area of
the land.

4. A true statement of the condition
of the title to the land, including all encumbrances on the land, and a statement
of the provisions agreed to by the holder of any blanket encumbrance enabling a
purchaser to acquire title to a lot or parcel free of the lien of the blanket
encumbrance on completion of all payments and performance of all of the terms
and provisions required to be made or performed by the purchaser under the real
estate sales contract by which the purchaser has acquired the lot or
parcel. The subdivider shall file copies of documents acceptable to
the department containing these provisions with the commissioner before the
sale of any subdivision lot or parcel subject to a blanket encumbrance.

5. The terms and
conditions on which it is intended to dispose of the land, together with copies
of any real estate sales contract, conveyance, lease, assignment or other
instrument intended to be used, and any other information the owner or the
owner's agent or subdivider desires to present.

6. A map of the subdivision that has
been filed in the office of the county recorder in the county in which the
subdivision is located.

7. A brief but comprehensive statement
describing the land on and the locality in which the subdivision is located.

8. A statement of the provisions that
have been made for permanent access and provisions, if any, for health
department approved sewage and solid waste collection and disposal and public
utilities in the proposed subdivision, including water, electricity, gas and
telephone facilities.

9. A statement as to the location of
the nearest public common and high schools available for the attendance of
school age

school-age
pupils residing
on the subdivision property.

10. A statement of the use or uses for
which the proposed subdivision will be offered.

11. A statement of the provisions, if
any, limiting the use or occupancy of the parcels in the subdivision, together
with copies of any restrictive covenants affecting all or part of the
subdivision.

12. The name and business address of
the principal broker selling or leasing, within this state, lots or parcels in
the subdivision.

13. A true statement of the
approximate amount of indebtedness that is a lien on the subdivision or any
part of the subdivision and that was incurred to pay for the construction of
any on-site or off-site improvement, or any community or
recreational facility.

14. A true statement or reasonable
estimate, if applicable, of the amount of any indebtedness that has been or is
proposed to be incurred by an existing or proposed special district, entity,
taxing area or assessment district, within the boundaries of which the
subdivision, or any part of the subdivision, is located, and that is to pay for
the construction or installation of any improvement or to furnish community or
recreational facilities to the subdivision, and which amounts are to be obtained
by ad valorem tax or assessment, or by a special assessment or tax
upon

on
the subdivision or any part of the subdivision.

15. A true statement as to the
approximate amount of annual taxes, special assessments or fees to be paid by
the buyer for the proposed annual maintenance of common facilities in the
subdivision.

16. A statement of the provisions for
easements for permanent access for irrigation water
,

where

if
applicable.

17. A true statement of assurances for
the completion of off-site improvements, such as roads, utilities,
community or recreational facilities and other improvements to be included in
the offering or represented as being in the offering, and approval of the
offering by the political subdivision with authority. This statement
shall include a trust agreement or any other evidence of assurances for
delivery of the improvements and a statement of the provisions, if any, for the
continued maintenance of the improvements.

18. A true statement of the nature of
any improvements to be installed by the subdivider, the estimated schedule for
completion and the estimated costs related to the improvements that will be
borne by purchasers of lots in the subdivision.

19. A true statement of the
availability of sewage disposal facilities and other public utilities,
including water, electricity, gas and telephone facilities in the subdivision,
the estimated schedule for their installation, and the estimated costs related
to the facilities and utilities that will be borne by purchasers of lots in the
subdivision.

20. A true statement as to whether all
or any portion of the subdivision is located in an open range or area in which
livestock may roam at large under the laws of this state and what provisions,
if any, have been made for
the
fencing
of
the subdivision to preclude livestock from
roaming within the subdivided lands.

21. If the subdivider is a subsidiary
corporation, a true statement identifying the parent corporation and any of the
following in which the parent or any of its subsidiaries is or has been
involved within the past five years:

(a) Any subdivision in this state.

(b) Any subdivision, wherever located,
for which registration is required pursuant to the federal interstate land
sales full disclosure act.

(c) Any
subdivision, wherever located, for which registration would have been required
pursuant to the federal interstate land sales full disclosure act but for the
exemption for subdivisions whose lots are all twenty acres or more in size.

22. A
true statement identifying all other subdivisions, designated in paragraph 21
of this subsection, in which any of the following is or, within the last five
years, has been directly or indirectly involved:

(a) The holder of any ownership
interest in the land.

(b) The subdivider.

(c) Any principal or officer in the
holder or subdivider.

23. A true statement as to whether all
or any portion of the subdivision is located in territory in the vicinity of a
military airport or ancillary military facility as defined in section 28-8461,
in territory in the vicinity of a public airport as defined in section 28-8486,
on or after July 1, 2001, in a high noise or accident potential zone as defined
in section 28-8461 or on or after July 1 of the year in which the
subdivision becomes located in a high noise or accident potential zone. The
statement required pursuant to this paragraph does not require the amendment or
refiling of any notice filed before July 1, 2001 or before July 1 of the year
in which the subdivision becomes located in a high noise or accident potential
zone.

24. If the subdivision is a conversion
from multifamily rental to condominiums as defined in section 33-1202, a
true statement as to the following:

(a) That
the property is a conversion from multifamily rental to condominiums.

(b) The
date original construction was completed.

25. Other
information and documents and certifications as the commissioner may reasonably
require
,

provided
except
that the subdivider shall not be required to disclose any critical
infrastructure information as defined in section 41-1801 or any
information contained in a report issued pursuant to section 41-4273.

B. The commissioner, on application,
may grant a subdivider of lots or parcels within a subdivision for which a
public report was previously issued by the commissioner an exemption from all
or part of the notification requirements of subsection A of this section.� The
subdivider shall file a statement with the commissioner indicating the change
of ownership in the lots or parcels together with any material changes
occurring subsequent to the original approval of the subdivision within which the
lots or parcels are located. The statement shall further refer to
the original approval by the commissioner.

C. If the subdivision is within an
active management area, as defined in section 45-402, the subdivider
shall accompany the notice with a certificate of assured water supply issued by
the director of water resources along with proof that all applicable fees have
been paid pursuant to sections 48-3772 and 48-3774.01, unless the
subdivider has obtained a written commitment of water service for the
subdivision from a city, town or private water company designated as having an
assured water supply by the director of water resources pursuant to section 45-576
or is exempt from the requirement pursuant to section 45-576.� If the
subdivider has submitted a certificate of assured water supply to a city, town
or county
prior to

before
approval
of the plat by the city, town or county and this has been noted on the face of
the plat, the submission constitutes compliance with this subsection if the
subdivider provides proof to the commissioner that all applicable fees have
been paid pursuant to sections 48-3772 and 48-3774.01.

D. It is unlawful for a person or
group of persons acting in concert to attempt to avoid this article by acting
in concert to divide a parcel of land or sell subdivision lots by using a
series of owners or conveyances or by any other method that ultimately results
in the division of the lands into a subdivision or the sale of subdivided
land.� The plan or offering is subject to this article. Unlawful
acting in concert pursuant to this subsection with respect to the sale or lease
of subdivision lots requires proof that the real estate licensee or other
licensed professional knew or with the exercise of reasonable diligence should
have known that property which the licensee listed or for which the licensee
acted in any capacity as agent was subdivided land subject to this
article. A familial relationship alone is not sufficient to
constitute unlawful acting in concert.

E. A creation of six or more lots,
parcels or fractional interests in improved or unimproved land, lots or parcels
of any size is subject to this article except when:

1. Each of the lots, parcels or
fractional interests represents, on a partition basis, thirty-six acres
or more in area of land located in this state, including to the centerline of
dedicated roads or easements, if any, contiguous to the land in which the
interests are held.

2. The lots, parcels or fractional
interests are the result of a foreclosure sale, the exercise by a trustee under
a deed of trust of a power of sale or the grant of a deed in lieu of
foreclosure. This paragraph does not allow circumvention of the
requirements of this article.

3. The lots, parcels or fractional
interests are created by a valid order or decree of a court pursuant to and
through compliance with title 12, chapter 8, article 7 or by operation of
law. This paragraph does not allow circumvention of the requirements
of this article.

4. The lots, parcels or fractional
interests consist of interests in any oil, gas or mineral lease, permit, claim
or right therein and such interests are regulated as securities by the United
States or by this state.

5. The lots, parcels or fractional
interests are registered as securities under the laws of the United States or
the laws of this state or are exempt transactions under section 44-1844,
44-1845 or 44-1846.

6. The commissioner by special order
exempts offerings or dispositions of any lots, parcels or fractional interests
from compliance with this article on written petition and on a showing
satisfactory to the commissioner that compliance is not essential to the public
interest or for the protection of buyers.

7. A sale or lease of a lot, parcel or
fractional interest occurs ten or more years after the sale or lease of another
lot, parcel or fractional interest and the other lot, parcel or fractional
interest is not subject to this article and is treated as an independent parcel
unless,
upon

on
investigation by the commissioner, there is
evidence of intent to subdivide.

F. In areas outside of active
management areas established pursuant to title 45, chapter 2, article 2
:

1. If the subdivision is
located in a county that has adopted the provision authorized by section 11-823,
subsection A, or in a city or town that has enacted an ordinance pursuant to
section 9-463.01, subsection O
,
the subdivider shall accompany the notice with a
report issued by the director of water resources pursuant to section 45-108
stating that the subdivision has an adequate water supply, unless one of the
following applies:

(a)

1.
The subdivider submitted the report to a city,
town or county before approval of the plat by the city, town or county and this
has been noted on the face of the plat.

(b)

2.
The subdivider has obtained a written commitment
of water service for the subdivision from a city, town or private water company
designated as having an adequate water supply by the director of water
resources pursuant to section 45-108.

(c) The plat was approved
pursuant to an exemption authorized by section 9-463.01, subsection K,
pursuant to an exemption authorized by section 11-823, subsection B,
paragraph 1, pursuant to an exemption granted by the director of water
resources under section 45-108.02 and the exemption has not expired or
pursuant to an exemption granted by the director under section 45-108.03.�
If the plat was approved pursuant to an authorized exemption, the state real
estate commissioner shall require that all promotional material and contracts
for the sale of lots in the subdivision adequately display the following:

(i) The director of water
resources' report or the developer's brief summary of the report as approved by
the commissioner on the proposed water supply for the subdivision.

(ii) A statement describing
the exemption under which the subdivision was approved, including the specific
conditions of the exemption that were met.� If the plat was approved by the
legislative body of a city or town pursuant to an exemption authorized by
section 9-463.01, subsection K or by the board of supervisors of a county
pursuant to an exemption authorized by section 11-823, subsection B,
paragraph 1, the subdivider shall record the document required by section 33-406.

(d)

3.
The subdivision received final plat approval from
the city, town or county before the requirement for an adequate water supply
became effective in the city, town or county, and there have been no material
changes to the plat since the final plat approval.� If changes were made to the
plat after the final plat approval, the director of water resources shall
determine whether the changes are material pursuant to the rules adopted by the
director to implement section 45-108.� If this
subdivision

paragraph
applies, the state real estate commissioner shall
require that all promotional materials and contracts for the sale of lots in
the subdivision adequately display the director of water resources' report or
the developer's brief summary of the report as approved by the commissioner on
the proposed water supply for the subdivision.

2. If the subdivision is not
located in a county that has adopted the provision authorized by section 11-823,
subsection A or in a city or town that has enacted an ordinance pursuant to
section 9-463.01, subsection O, and if the director of water resources,
pursuant to section 45-108, reports an inadequate on-site supply of
water to meet the needs projected by the developer or if no water is available,
the state real estate commissioner shall require that all promotional material
and contracts for the sale of lots in subdivisions approved by the commissioner
adequately display the director of water resources' report or the developer's
brief summary of the report as approved by the commissioner on the proposed
water supply for the subdivision.

G. The commissioner may require the
subdivider to supplement the notice of intention to subdivide lands and may
require the filing of periodic reports to update the information contained in
the original notice of intention to subdivide lands.

H. The commissioner may authorize the
subdivider to file as the notice of intention to subdivide lands, in lieu of
some or all of the requirements of subsection A of this section, a copy of the
statement of record filed with respect to the subdivision pursuant to the
federal interstate land sales full disclosure act if the statement complies
with the requirements of the act and the regulations pertinent to the act.

I.
Neither
A real estate sales contract, conveyance, lease,
assignment or other instrument to transfer any interest in subdivided land
nor

and

any covenant or restriction
affecting real property shall
not
contain any provision limiting the right of any
party to appear or testify in support of or opposition to zoning changes,
building permits or any other official acts affecting real property before a
governmental body or official considering zoning changes, building permits or
any other official acts affecting real property, whether the property is
located within or outside of the boundaries of the subdivision. All
contractual provisions that conflict with this subsection are declared to be
contrary to public policy.
Nothing contained in
This subsection
shall

may not
prohibit private restrictions on the use of any
real property.

J. Before offering subdivided lands
for lease or sale, the subdivider who makes any promises through any form of
advertising media that the subdivided lands will be exclusively a retirement
community or one that is limited to the residency of adults or senior citizens
shall include the promises in the deed restrictions affecting any interest in
real property within the subdivided lands.

K. Except as otherwise provided in
this section, a subdivider
shall
is
not
be
required to disclose items that are over one
mile from the subdivision boundaries.� The existence of foreign nations or
tribal lands shall also be disclosed if located within the
one mile

one-mile
radius of the
subdivision boundaries.
END_STATUTE

Sec.
4.

Section
32-2183, Arizona Revised Statutes, is amended to read:

START_STATUTE
32-2183.

Subdivision public reports; denial of issuance; unlawful sales;
voidable sale or lease; order prohibiting sale or lease; investigations;
hearings; summary orders

A. On examination of a
subdivision, the commissioner, unless there are grounds for denial, shall issue
to the subdivider a public report authorizing the sale or lease in this state
of the lots, parcels or fractional interests within the subdivision.� The
report shall contain the data obtained in accordance with section 32-2181
and any other information that the commissioner determines is necessary to
implement the purposes of this article. If any of the lots, parcels
or fractional interests within the subdivision are located within territory in the
vicinity of a military airport or ancillary military facility as defined in
section 28-8461, under a military training route as delineated in the
military training route map prepared pursuant to section 37-102
,
in a military installation or range or Arizona national guard
site influence area as delineated in the maps prepared pursuant to section 37-102,
subsection H, paragraph 4, under restricted air space as delineated in the
restricted air space map prepared pursuant to section 37-102 or contained
in the military electronics range as delineated in the military electronics
range map prepared pursuant to section 37-102, the report shall include,
in bold twelve-point font block letters on the first page of the report,
the statements required pursuant to section 28-8484, subsection A,
section 32-2183.05 or section 32-2183.06 and, if the department has
been provided a map prepared pursuant to section 28-8484, subsection B or
section 37-102, the report shall include a copy of the
map. The military airport report requirements do not require the
amendment or reissuance of any public report issued on or before December 31,
2001 or on or before December 31 of the year in which the lots, parcels or
fractional interests within a subdivision become territory in the vicinity of a
military airport or ancillary military facility.� The military training route
report requirements do not require the amendment or reissuance of any public
report issued on or before December 31, 2004.� The restricted air space report
requirements do not require the amendment or reissuance of any public report
issued on or before December 31, 2006.� The military electronics range report
requirements do not require the amendment or reissuance of any public report
issued on or before December 31, 2008.
A
Military
installation or range or Arizona national guard site report requirements do not
require the amendment or reissuance of any public report issued on or before
December 31, 2024.� The commissioner shall require the subdivider to reproduce
the report, make the report available to each initial prospective customer and
furnish each initial buyer or lessee with a copy before the buyer or lessee
signs any offer to purchase or lease, taking a receipt therefor.

B. This section does not require a public report
issued sixty or fewer days before the filing of the military electronics range
map or the military installation or range or Arizona national guard site
influence area map prepared pursuant to section 37-102 to meet the
military electronics range or military installation or range or Arizona
national guard site notification requirements of this section.

C. A public report issued
sixty-one or more days after the filing of the military electronics range map
or the military installation or range or Arizona national guard site influence
area map prepared pursuant to section 37-102 shall meet all of the
requirements of subsection A of this section.

D. Notwithstanding
subsection A of this section, a subdivider may elect to prepare a final public
report for use in the sale of improved lots as defined in section 32-2101,
as follows:

1. The subdivider shall
prepare the public report and provide a copy of the report to the commissioner
with the submission of the notification required by sections 32-2181 and
32-2184 and shall comply with all other requirements of this article.

2. An initial filing fee
of $500 or an amended filing fee of $250 shall accompany the notification
required by paragraph 1 of this subsection.

3. The department shall
assign a registration number to each notification and public report submitted
pursuant to this subsection and shall maintain a database of all of these
submissions.� The subdivider shall place the number on each public report.

4. On receipt of the
notification and public report, the department shall review and issue within
ten business days either a certification that the notification and public
report are administratively complete or a denial letter if it appears that the
application or project is not in compliance with all legal requirements, that
the applicant has a background of violations of state or federal law or that
the applicant or project presents an unnecessary risk of harm to the
public. If the commissioner has received the notification and public
report but has not issued a certification or a denial letter within ten
business days pursuant to this paragraph, the notification and public report
are administratively complete.

5. A subdivider may
commence sales or leasing activities as
permitted

allowed
under this article after obtaining a certificate of
administrative completeness from the commissioner.

6. Before or after the
commissioner issues a certificate of administrative completeness or, if
applicable, after the notification and public report are deemed to be
administratively complete pursuant to paragraph 4 of this subsection, the department
may examine any public report, subdivision or applicant that has applied for or
received the certificate. If the commissioner determines that the
subdivider or subdivision is not in compliance with any requirement of state
law or that grounds exist under this chapter to suspend, deny or revoke a
public report, the commissioner may commence an administrative action under
section 32-2154 or 32-2157.� If the subdivider immediately corrects
the deficiency and comes into full compliance with state law, the commissioner
shall vacate any action that the commissioner may have commenced pursuant to
section 32-2154 or 32-2157.

7. The department shall
provide forms and guidelines for the submission of the notification and public
report pursuant to this section.

E. The commissioner may
suspend, revoke or deny issuance of a public report on any of the following
grounds:

1. Failure to comply with
this article or the rules of the commissioner pertaining to this article.

2. The sale or lease would
constitute misrepresentation to or deceit or fraud of the purchasers or
lessees.

3. Inability to deliver
title or other interest contracted for.

4. Inability to
demonstrate that adequate financial or other arrangements acceptable to the
commissioner have been made for completion of all streets, sewers, electric,
gas and water utilities, drainage and flood control facilities, community and
recreational facilities and other improvements included in the offering.

5. Failure to make a
showing that the lots, parcels or fractional interests can be used for the
purpose for which they are offered.

6. The owner, agent,
subdivider, officer, director or partner, subdivider trust beneficiary holding
ten percent or more direct or indirect beneficial interest or, if a
corporation, any stockholder owning ten percent or more of the stock in the
corporation has:

(a) Been convicted of a
felony or misdemeanor involving fraud or dishonesty or involving conduct of any
business or a transaction in real estate, cemetery property, timeshare
intervals or membership camping campgrounds or contracts.

(b) Been permanently or
temporarily enjoined by order, judgment or decree from engaging in or
continuing any conduct or practice in connection with the sale or purchase of
real estate or cemetery property, timeshare intervals, membership camping
contracts or campgrounds, or securities or involving consumer fraud or the
racketeering laws of this state.

(c) Had an administrative
order entered against the person by a real estate regulatory agency or security
regulatory agency.

(d) Had an adverse
decision or judgment entered against the person involving fraud or dishonesty
or involving the conduct of any business or transaction in real estate,
cemetery property, timeshare intervals or membership camping campgrounds or
contracts.

(e) Disregarded or
violated this chapter or the rules of the commissioner pertaining to this
chapter.

(f) Controlled an entity
to which subdivision (b), (c), (d) or (e)
of this paragraph

applies.

7. Procurement or an
attempt to procure a public report by fraud, misrepresentation or deceit or by
filing an application for a public report that is materially false or
misleading.

8. Failure of the
declaration for a condominium created pursuant to title 33, chapter 9, article
2 to comply with the requirements of section 33-1215 or failure of the
plat for the condominium to comply with the requirements of section 33-1219. The
commissioner may require an applicant for a public report to submit a notarized
statement signed by the subdivider or an engineer or attorney licensed to
practice in this state certifying that the condominium plat and declaration of condominium
are in compliance with the requirements of sections 33-1215 and 33-1219. If
the notarized statement is provided, the commissioner is entitled to rely on
this statement.

9. Failure of any blanket
encumbrance or valid supplementary agreement executed by the holder of the
blanket encumbrance to contain provisions that enable the purchaser to acquire
title to a lot or parcel free of the lien of the blanket encumbrance, on
completion of all payments and performance of all of the terms and provisions
required to be made or performed by the purchaser under the real estate sales
contract by which the purchaser has acquired the lot or parcel.� The subdivider
shall file copies of documents acceptable to the commissioner containing these
provisions with the commissioner before the sale of any subdivision lot or
parcel subject to a blanket encumbrance.

10. Failure to demonstrate
permanent access to the subdivision lots or parcels.

11. The use of the lots
presents an unreasonable health risk.

F. It is unlawful for a
subdivider to sell any lot in a subdivision unless one of the following occurs:

1. All proposed or
promised subdivision improvements are completed.

2. The completion of all
proposed or promised subdivision improvements is assured by financial
arrangements acceptable to the commissioner. The financial
arrangements may be made in phases for common community and recreation facilities
required by a municipality or county as a stipulation for approval of a plan
for a master planned community.

3. The municipal or county
government agrees to prohibit occupancy and the subdivider agrees not to close
escrow for lots in the subdivision until all proposed or promised subdivision
improvements are completed.

4. The municipal or county
government enters into an assurance agreement with any trustee not to convey
lots until improvements are completed within the portion of the subdivision
containing these lots, if the improvements can be used and maintained
separately from the improvements required for the entire subdivision plat.� The
agreement shall be recorded in the county in which the subdivision is located.

G. If the subdivision is
within an active management area, as defined in section 45-402, the
commissioner shall deny issuance of a public report or the use of any exemption
pursuant to section 32-2181.02, subsection B unless the subdivider has
been issued a certificate of assured water supply by the director of water
resources and has paid all applicable fees pursuant to sections 48-3772
and 48-3774.01, or unless the subdivider has obtained a written
commitment of water service for the subdivision from a city, town or private
water company designated as having an assured water supply by the director of
water resources pursuant to section 45-576 or is exempt from the
requirement pursuant to section 45-576.

H. In areas outside of
active management areas,
if the subdivision is located in a
county that has adopted the provision authorized by section 11-823,
subsection A or in a city or town that has enacted an ordinance pursuant to
section 9-463.01, subsection O,
the commissioner shall deny
issuance of a public report or the use of any exemption pursuant to section 32-2181.02,
subsection B unless one of the following applies:

1. The director of water
resources has reported pursuant to section 45-108 that the subdivision
has an adequate water supply.

2. The subdivider has
obtained a written commitment of water service for the subdivision from a city,
town or private water company designated as having an adequate water supply by
the director of water resources pursuant to section 45-108.

3. The plat
was approved pursuant to an exemption authorized by section 9-463.01,
subsection K, pursuant to an exemption authorized by section 11-823,
subsection B, paragraph 1, pursuant to an exemption granted by the director of
water resources under section 45-108.02 and the exemption has not expired
or pursuant to an exemption granted by the director of water resources under
section 45-108.03.

4.

3.
The subdivision received final plat approval from
the city, town or county before the requirement for an adequate water supply
became effective in the city, town or county, and there have been no material
changes to the plat since the final plat approval. If changes were
made to the plat after the final plat approval, the director of water resources
shall determine whether the changes are material pursuant to the rules adopted
by the director to implement section 45-108.

I. A subdivider shall not
sell or lease or offer for sale or lease in this state any lots, parcels or
fractional interests in a subdivision without first obtaining a public report
from the commissioner except as provided in section 32-2181.01 or 32-2181.02,
and a certificate of administrative completeness issued pursuant to this
section. Unless exempt, the sale or lease of subdivided lands before
issuance of the public report or failure to deliver the public report to the
purchaser or lessee shall render the sale or lease rescindable by the purchaser
or lessee.� An action by the purchaser or lessee to rescind the transaction
shall be brought within three years after the date of execution of the purchase
or lease agreement by the purchaser or lessee. In any rescission
action, the prevailing party is entitled to reasonable attorney fees as
determined by the court.

J. On a print
advertisement in a magazine or newspaper or on an internet advertisement that
advertises a specific lot or parcel of a subdivider, the subdivider shall
include a disclosure stating that "a public report is available on the state
real estate department's website".

K. Any applicant objecting
to the denial of a public report, within thirty days after receipt of the order
of denial, may file a written request for a hearing. The
commissioner shall hold the hearing within twenty days after receipt of the
request for a hearing unless the party requesting the hearing has requested a
postponement. If the hearing is not held within twenty days after a
request for a hearing is received, plus the period of any postponement, or if a
proposed decision is not rendered within forty-five days after
submission, the order of denial shall be rescinded and a public report issued.

L. On the commissioner's
own motion, or when the commissioner has received a complaint and has
satisfactory evidence that the subdivider or the subdivider's agent is
violating this article or the rules of the commissioner or has engaged in any
unlawful practice as defined in section 44-1522 with respect to the sale
of subdivided lands or deviated from the provisions of the public report, the
commissioner may investigate the subdivision project and examine the books and
records of the subdivider. For the purpose of examination, the subdivider shall
keep and maintain records of all sales transactions and funds received by the
subdivider pursuant to the sales transactions and shall make them accessible to
the commissioner on reasonable notice and demand.

M. On the commissioner's
own motion, or when the commissioner has received a complaint and has
satisfactory evidence that any person has violated this article or the rules of
the commissioner or has engaged in any unlawful practice as defined in section
44-1522 with respect to the sale of subdivided lands or deviated from the
provisions of the public report or special order of exemption, or has been
indicted for fraud or against whom an information for fraud has been filed or
has been convicted of a felony, before or after the commissioner issues the
public report as provided in subsection A of this section, the commissioner may
conduct an investigation of the matter, issue a summary order as provided in
section 32-2157, or provide notice and hold a public hearing and, after
the hearing, may issue the order or orders the commissioner deems necessary to
protect the public interest and ensure compliance with the law, rules or public
report or the commissioner may bring action in any court of competent jurisdiction
against the person to enjoin the person from continuing the violation or
engaging in or doing any act or acts in furtherance of the
violation. The court may make orders or judgments, including the
appointment of a receiver,
that are
necessary to prevent
the use or employment by a person of any unlawful practices
,

or
which

that
may be necessary to
restore to any person in interest any monies or property, real or personal,
that may have been acquired by means of any practice in this article declared
to be unlawful.

N. When it appears to the
commissioner that a person has engaged in or is engaging in a practice declared
to be unlawful by this article and that the person is concealing assets or self
or has made arrangements to conceal assets or is about to leave the state, the
commissioner may apply to the superior court, ex parte, for an order appointing
a receiver of the assets of the person or for a writ of ne exeat, or both.

O. The court, on receipt of an application for the
appointment of a receiver or for a writ of ne exeat, or both, shall examine the
verified application of the commissioner and other evidence that the
commissioner may present the court.� If satisfied that the interests of the
public require the appointment of a receiver or the issuance of a writ of ne
exeat without notice, the court shall issue an order appointing the receiver or
issue the writ, or both.� If the court determines that the interests of the public
will not be harmed by the giving of notice, the court shall set a time for a
hearing and require notice be given as the court deems satisfactory.

P. If the court appoints a receiver without notice,
the court shall further direct that a copy of the order appointing a receiver
be served on the person engaged in or engaging in a practice declared to be
unlawful under this article by delivering the order to the last address of the
person that is on file with the state real estate department. The
order shall inform the person that the person has the right to request a
hearing within ten days after the date of the order and, if requested, the
hearing shall be held within thirty days after the date of the order.
END_STATUTE

Sec.
5.

Section
32-2197.08, Arizona Revised Statutes, is amended to read:

START_STATUTE
32-2197.08.

Issuance of public report and amended public report by
commissioner on timeshare plan; denial of issuance; additional information; use
of another state's public report

A. On examination of a timeshare plan, the
commissioner, unless there are grounds for denial, shall approve for use by the
developer a public report authorizing the sale or lease of the timeshare
interests within the timeshare plan. For all timeshare interests
sold in this state, the commissioner shall require the developer to reproduce
the public report and furnish each prospective customer with a copy, taking a
receipt for each copy. The public report shall be made available to
each prospective purchaser in written format either by electronic means or in
hard copy.� The public report shall include the following:

1. The name and principal address of the owner and
developer.

2. A description of the type of timeshare interests
being offered.

3. A description of the existing and proposed
accommodations and amenities of the timeshare plan, including type and number,
any use restrictions and any required fees for use.

4. A description of any accommodations and amenities
that are committed to be built, including:

(a) The developer's schedule of commencement and
completion of all accommodations and amenities.

(b) The estimated number of accommodations per site
that may become subject to the timeshare plan.

5. A brief description of the duration, phases and
operation of the timeshare plan.

6. The current annual budget if available or the
projected annual budget for the timeshare plan.� The budget shall include:

(a) A statement of the amount or a statement that
there is no amount included in the budget as a reserve for repairs and
replacement.

(b) The projected common expense liability, if any,
by category of expenditures for the timeshare plan.

(c) A statement of any services or expenses that are
not reflected in the budget and that the developer provides or pays.

7. A description of any liens, defects or
encumbrances on or affecting the title to the timeshare interests.

8. A statement that by midnight of the tenth
calendar day after execution of the purchase agreement a purchaser may cancel
any purchase agreement for a timeshare interest from a developer together with
a statement providing the name and street address where the purchaser should
mail any notice of cancellation.� If, by agreement of the parties through the
purchase agreement, the purchase agreement allows for cancellation of the
purchase agreement for a period of time exceeding ten calendar days, the public
report shall include a statement that the cancellation of the purchase
agreement is allowed for that period of time exceeding ten calendar days.

9. A description of any bankruptcies, pending suits,
adjudications or disciplinary actions material to the timeshare interests of
which the developer has knowledge.

10. Any restrictions on alienation of any number or
portion of any timeshare interests.

11. Any current or expected fees or charges to be
paid by timeshare purchasers for the use of any amenities related to the
timeshare plan.

12. The extent to which financial arrangements have
been provided for completion of all promised improvements.

13. If the timeshare plan provides purchasers with
the opportunity to participate in any exchange programs, a description of the
name and address of the exchange companies and the method by which a purchaser
accesses the exchange programs.

14. Any other information that the developer, with
the approval of the commissioner, desires to include in the public report.

15. If the developer is offering a multisite
timeshare plan, the following information, which may be disclosed in a written,
graphic or tabular form:

(a) A description of each component site, including
the name and address of each component site.

(b) The number of accommodations and timeshare
periods, expressed in periods of use availability, committed to the multisite
timeshare plan and available for use by purchasers.

(c) Each type of accommodation in terms of the
number of bedrooms, bathrooms and sleeping capacity and a statement of whether
or not the accommodation contains a full kitchen. For the purposes
of this subdivision, "full kitchen" means a kitchen having a minimum
of a dishwasher, range, oven, sink and refrigerator.

(d) A description of amenities available for use by
the purchaser at each component site.

(e) A description of the reservation system,
including the following:

(i) The entity responsible for operating the
reservation system.

(ii) A summary of the rules governing access to and
use of the reservation system.

(iii) The existence of and an explanation regarding
any priority reservation features that affect a purchaser's ability to make
reservations for the use of a given accommodation on a first-reserved,
first-served basis.

(f) A description of any right to make any
additions, substitutions or deletions of accommodations or amenities and a
description of the basis on which accommodations and amenities may be added to,
substituted in or deleted from the multisite timeshare plan.

(g) A description of the purchaser's liability for
any fees associated with the multisite timeshare plan.

(h) The location and the anticipated relative use
demand of each component site in a multisite timeshare plan as well as any
periodic adjustment or amendment to the reservation system that may be needed
in order to respond to actual purchaser use patterns and changes in purchaser
use demand for the accommodations existing at the time within the multisite
timeshare plan.

(i) Any other information reasonably required by the
commissioner or established by rule that is necessary for the protection of
purchasers of timeshare interests in timeshare plans.

(j) Any other information that the developer, with
the approval of the commissioner, desires to include in the public report.

16. If a developer offers a nonspecific timeshare
interest in a multisite timeshare plan, the information set forth in paragraphs
1 through 14 of this subsection as to each component site.

17. Any other information that the commissioner
determines or establishes by rule is necessary to implement the purpose of this
article.

B. Except as otherwise provided in this subsection,
the requirements prescribed by subsection A of this section apply to a
developer's application for approval to use an amended public report for the
sale of timeshare interests in a timeshare plan, including an amended public
report to disclose and address a material change under section 32-2197.04. A
developer may elect to prepare an amended public report for use in the sale of
timeshare interests as follows:

1. The developer shall prepare the amended public
report and provide a copy of the report to the commissioner with the submission
of the application for an amended public report, including any notification
required by section 32-2197.04, and shall comply with all other
requirements of this article.

2. An amendment filing fee established pursuant to
section 32-2197.07 shall accompany the application prescribed by
paragraph 1 of this subsection.

3. On receipt of the application and amended public
report, the department shall review and, within fifteen business days if the
amendment adds less than six new component sites to the timeshare plan or
within thirty calendar days if the amendment adds six or more new component
sites to the timeshare plan, issue either a certification that the application
and amended public report are administratively complete or a denial letter if
it appears that the application, amended public report or timeshare plan is not
in compliance with all legal requirements, that the applicant has a background
of violations of state or federal law or that the applicant or timeshare plan
presents an unnecessary risk of harm to the public. If the
commissioner has received the application and amended public report but has not
issued a certification or a denial letter within the required time period, the
application and amended public report are deemed administratively complete.

4. The developer may commence sales or leasing
activities as allowed under this article using an amended public report when
the commissioner issues a certification of administrative completeness or as of
the date the application and amended public report are deemed administratively
complete pursuant to paragraph 3 of this subsection.� The certification may be
issued on paper or electronically.

5. Before or after the commissioner issues a
certification of administrative completeness or, if applicable, after the
application and amended public report are deemed to be administratively
complete pursuant to paragraph 3 of this subsection, the department may examine
any public report, timeshare plan or applicant that has applied for or received
the certification. If the commissioner determines that the public
report, timeshare plan or applicant is not in compliance with any requirement
of state law or that grounds exist under this chapter to suspend, deny or
revoke a public report, the commissioner may commence an administrative action
under section 32-2154, 32-2157 or 32-2197.14. If
the developer immediately corrects the deficiency and fully complies with state
law, the commissioner shall promptly vacate any action that the commissioner
may have commenced pursuant to section 32-2154, 32-2157 or 32-2197.14.

6. The department shall provide forms and guidelines
for the submission of the application and amended public report pursuant to
this subsection.

C. In the event of denial, suspension or revocation,
grounds shall be set forth in writing at the time of denial, suspension or
revocation. The commissioner may deny, suspend or revoke the public
report on any of the following grounds:

1. Failure to comply with this article or the rules
of the commissioner pertaining to this article.

2. The sale or lease would constitute
misrepresentation to or deceit or fraud of the purchasers or lessees.

3. Inability to demonstrate that adequate financial
or other arrangements acceptable to the commissioner have been made for
completion of the timeshare property, installation of all streets, sewers,
electric, gas and water utilities, drainage, flood control and other similar
improvements included in the offering.

4. The developer, including if an entity, an
officer, director, member, manager, partner, owner, trust beneficiary holding
ten percent or more beneficial interest, stockholder owning ten percent or more
of the stock or other person exercising control of the entity, has:

(a) Been convicted of a felony or misdemeanor
involving theft, fraud or dishonesty or involving the conduct of any business
or a transaction in real estate, cemetery property, timeshare interests or
membership camping campgrounds or contracts.

(b) Been permanently or temporarily enjoined by
order, judgment or decree from engaging in or continuing any conduct or
practice in connection with the sale or purchase of real estate, cemetery
property, timeshare interests, membership camping campgrounds or contracts, or
securities or involving consumer fraud or the
Arizona

racketeering laws
of this state
.

(c) Had an administrative order entered against him
by a real estate regulatory agency or securities regulatory agency.

(d) Had an adverse decision or judgment entered
against him involving fraud or dishonesty or involving the conduct of any
business in or a transaction in real estate, cemetery property, timeshare
interests or membership camping campgrounds or contracts.

(e) Disregarded or violated this chapter or the
rules of the commissioner pertaining to this chapter.

(f) Participated in, operated or held an interest in
any entity to which subdivision (b), (c), (d), or (e) of this paragraph
applies.

5. If within this state, the timeshare property is
incompatible with the existing neighborhood and would introduce into a
neighborhood a character of property or use that would clearly be detrimental
to property values in that neighborhood.

D. If the timeshare property is within an active
management area, as defined in section 45-402, the commissioner shall
deny issuance of a public report unless the developer has been issued a
certificate of assured water supply by the director of water resources and has
paid all applicable fees pursuant to sections 48-3772 and 48-3774.01,
or unless the developer has obtained a written commitment of water service for
the timeshare property from a city, town or private water company designated as
having an assured water supply by the director of water resources pursuant to
section 45-576.

E. In areas outside of active management areas,
if the timeshare property is located in a county that has adopted the
provision authorized by section 11-823, subsection A or in a city or town
that has enacted an ordinance pursuant to section 9-463.01, subsection O,

the commissioner shall deny issuance of a public report unless one of the
following applies:

1. The director of water resources has reported
pursuant to section 45-108 that the timeshare property has an adequate
water supply.

2. The developer has obtained a written commitment
of water service for the timeshare property from a city, town or private water
company designated as having an adequate water supply by the director of water
resources pursuant to section 45-108.

3. The timeshare property was approved
pursuant to an exemption authorized by section 9-463.01, subsection K,
pursuant to an exemption authorized by section 11-823, subsection B,
paragraph 1, pursuant to an exemption granted by the director of water
resources under section 45-108.02 and the exemption has not expired or
pursuant to an exemption granted by the director of water resources under
section 45-108.03.

4.

3.
The
subdivision received final plat approval from the city, town or county before
the requirement for an adequate water supply became effective in the city, town
or county, and there have been no material changes to the plat since the final
plat approval.� If changes were made to the plat after the final plat approval,
the director of water resources shall determine whether the changes are
material pursuant to the rules adopted by the director to implement section 45-108.

F. In addition to providing to each prospective
customer a copy of the public report as required in subsection A of this
section, the developer shall also provide to each customer before the close of
any transaction information and materials that identify any timeshare exchange
companies currently under contract and disclosure statements regarding the use
of the timeshare exchange companies, as well as any additional information the
commissioner deems appropriate.

G. The commissioner may authorize for use in this
state by a developer of a timeshare plan in which all accommodations are
located outside of this state a current public report that is issued by another
jurisdiction or an equivalent registration and disclosure document that is
required before offering a timeshare plan for sale, lease or use and that is
issued by another jurisdiction.� This authorization does not constitute an
exemption from other applicable requirements of this article.
END_STATUTE

Sec.
6.
Section
33-406, Arizona Revised Statutes, is amended to read:

START_STATUTE
33-406.

Disclosure
of transportation of water to property; definition

A. Notwithstanding
section 33-411, subsection D, a subdivider who sells a lot that was
included in a plat approved by the legislative body of a city
,

or
town
pursuant to an
exemption authorized by section 9-463.01, subsection K
or
by the board of supervisors of a
county
pursuant to an exemption authorized by section 11-823,
subsection B, paragraph 1

with a determination
by the director of water resources that there is an inadequate water supply for
the subdivision
shall record with
the plat a document that contains a legal description of the land that is
subject to the subdivision plat and that contains a statement that the lots are
served by a water supply that has been determined as inadequate and that the
water must be hauled to the lot.

B. For
the purposes of this section, "subdivider" has the same meaning
as
prescribed in section 32-2101.
END_STATUTE

Sec.
7.
Section
45-108, Arizona Revised Statutes, is amended to read:

START_STATUTE
45-108.

Evaluation
of subdivision water supply; definition

A. In
areas outside of active management areas established pursuant to chapter 2,
article 2 of this title, the developer of a proposed subdivision
,
including dry lot
subdivisions, regardless of subdivided lot size,
prior
to
recordation of

before recording
the plat, shall submit plans for the water supply for the subdivision and
demonstrate the adequacy of the water supply to meet the needs projected by the
developer to the director. The director shall evaluate the plans and
issue a report on the plans.

B. The
director shall evaluate the proposed source of water for the subdivision to
determine whether there is an adequate water supply for the subdivision, and
shall forward a copy of the director's
water
report to the state real estate commissioner and
the city, town or county responsible for platting the subdivision.

C. A
city, town or county may approve a subdivision plat only if the subdivider has
obtained a water report from the director that there is an adequate water
supply for the subdivision or the subdivider has obtained a written commitment
of water service for the subdivision from a city, town or private water company
designated as having an adequate water supply pursuant to this section.

D. The
state real estate commissioner may issue a public report authorizing the sale
or lease of subdivided lands only if the director has issued a water report
that there is an adequate water supply for the subdivision or the subdivider
has obtained a written commitment of water service for the subdivision from a
city, town or private water company designated as having an adequate water
supply pursuant to this section.

C.

E.
The director
may designate cities, towns and private water companies as having an adequate
water supply by reporting that designation to the water department of the city
or town or private water company and the state real estate commissioner.

D.

F.
As an
alternative to designation under subsection
C

E
of this
section, the director may designate a city or town that has entered into a
contract with the United States secretary of the interior or a county water
authority established pursuant to chapter 13 of this title for permanent
supplies of Colorado river water for municipal and industrial use as having an
adequate water supply if all of the following apply:

1. The
city or town has entered into a contract with each private water company that
serves water within the city or town to provide Colorado river water to those
private water companies.

2. The
Colorado river water for which the city or town has contracted is sufficient
together with other water supplies available to the city or town and the
private water companies that serve water within that city or town to provide an
adequate supply of water for the city or town.

3. The
director finds that new subdivisions within the city or town will be served
primarily with Colorado river water by the city or town or one of the private
water companies that serve water within that city or town.

E.

G.
The director
shall not require a developer to submit plans for the water supply pursuant to
subsection A of this section if either:

1. Both
of the following apply:

(a) The
developer has obtained a written commitment of water service from cities, towns
or private water companies that have been designated as having an adequate
water supply.

(b) That
city, town or private water company has been designated as having an adequate
water supply pursuant to subsection
C

E
of this
section.

2. All
of the following apply:

(a) The
city or town has been designated as having an adequate water supply pursuant to
subsection
D

F

of this section.

(b) The
developer has obtained a written commitment of water service from the city or
town or a private water company that serves water within that city or town.

(c) The
developer has obtained the written concurrence of the city or town that has
been designated.

F.

H.
The director
may revoke a designation made pursuant to this section when the director finds
that the water supply may become inadequate.

G.

I.
The

This
state

of Arizona
and
the director or department
shall

are
not
be
liable for any report, designation or evaluation
prepared in good faith pursuant to this section.

H. If the director receives written notice
from the board of supervisors of a county that it has adopted the provision
authorized by section 11-823, subsection A, the director shall give
written notice of the provision to the mayors of all cities and towns in the
county.� A city or town that receives the notice shall comply with section 9-463.01,
subsections J, K, L, M and N.

I.

j.
For the
purposes of this section, "adequate water supply" means both of the
following:

1. Sufficient
groundwater, surface water or effluent of adequate quality will be
continuously, legally and physically available to satisfy the water needs of
the proposed use for at least one hundred years.

2. The
financial capability has been demonstrated to construct the water facilities
necessary to make the supply of water available for the proposed use, including
a delivery system and any storage facilities or treatment works.
The director may accept evidence of the construction
assurances required by section 9-463.01, 11-823 or 32-2181 to
satisfy this requirement.

END_STATUTE

Sec.
8.
Section
45-108.01, Arizona Revised Statutes, is amended to read:

START_STATUTE
45-108.01.

Application
for water report or designation of adequate water supply; notice; objections;
hearing; appeals

A. On
receipt of an application for a water report or an application by a city, town
or private water company to be designated as having an adequate water supply
under section 45-108,
if the proposed use is
in a county that has adopted the provision authorized by section 11-823,
subsection A or in a city or town that has enacted an ordinance pursuant to
section 9-463.01, subsection O,
the director shall publish
notice of the application once each week for two consecutive weeks in a
newspaper of general circulation in the groundwater basin in which the
applicant proposes to use water.� The first publication shall occur within
fifteen days after the application is determined or deemed to be
administratively complete. If the application is substantially
modified after notice of the application is given pursuant to this subsection,
the director shall give notice of the application as modified in the manner
prescribed by this subsection. The first publication of any
subsequent notice shall occur within fifteen days after the modified
application is determined or deemed to be administratively complete.

B. Notice
pursuant to subsection A of this section shall state that written objections to
the application may be filed with the director by residents and landowners
within the groundwater basin within fifteen days after the last publication of
notice. An objection shall state the name and mailing address of the
objector and be signed by the objector, the objector's agent or the objector's
attorney. The grounds for objection are limited to whether the
application meets the criteria for determining an adequate water supply set
forth in section 45-108, subsection
I
J
.� The objection shall
clearly set forth reasons why the application does not meet the criteria.

C. In
appropriate cases, including cases in which a proper written objection to the
application has been filed, an administrative hearing may be held before the
director's decision on the application if the director deems a hearing
necessary. Thirty days before the date of the hearing, the director
shall give notice of the hearing to the applicant and to any person who filed a
proper written objection to the application. The hearing shall be
scheduled for at least sixty days but not more than ninety days after the
expiration of the time in which to file objections.

D. If
the application is for a water report:

1. If
the director determines that an adequate water supply exists for the proposed
use, the director shall issue a water report stating that the water supply for
the subdivision is adequate.

2. If
the director determines that an adequate water supply does not exist, the
director shall issue a water report stating that the water supply for the
subdivision is inadequate.

E. If
the application is for a designation of adequate water supply:

1. If
the director determines that an adequate water supply exists for the proposed
use, the director shall approve the application.

2. If
the director determines that an adequate water supply does not exist, the
director shall deny the application.

F. The
applicant or a person who contested the application by filing a proper
objection pursuant to subsection B of this section may seek judicial review of
the final decision of the director as provided in section 45-114,
subsection B in the superior court.

G. Section
45-114, subsections A and B govern administrative proceedings, rehearings
or reviews and judicial reviews of final decisions of the director under this
section.� If an administrative hearing is held, it shall be conducted in the
groundwater basin in which the use is located.
END_STATUTE

Sec.
9.

Repeal

Sections
45-108.02 and 45-108.03, Arizona Revised Statutes, are repealed.

Sec.
10.
Section
45-108.04, Arizona Revised Statutes, is amended to read:

START_STATUTE
45-108.04.

Definition
of adequate water supply; upper San Pedro water district

For
the purposes of section 45-108, if the upper San Pedro water district is
established under title 48, chapter 37 for proposed uses in the district,
"adequate water supply" means a water supply that complies with all
of the following:

1. Sufficient
groundwater, surface water or effluent of adequate quality will be
continuously, legally and physically available to satisfy the water needs of
the proposed use for at least one hundred years.

2. The
projected water use is consistent with the goal of the district as set forth in
section 48-6403, subsection B and the district's ability to meet the
measurable objectives for achieving the goal as included in the district's most
recent comprehensive plan, as determined by the director.� If the district is
established, the director shall adopt rules containing criteria for making
determinations under this paragraph and shall consult with the district board
in developing the rules.

3. The
financial capability has been demonstrated to construct the water facilities
necessary to make the supply of water available for the proposed use, including
a delivery system and any storage facilities or treatment works.
The director may accept evidence of the construction
assurances required by section 9-463.01, 11-823 or 32-2181 to
satisfy this requirement.

END_STATUTE

Sec. 11. Section 45-576, Arizona Revised
Statutes, is amended to read:

START_STATUTE
45-576.

Certificates of assured water supply; designated cities, towns
and private water companies; exemptions; rules; definition

A. Except as provided in subsections G and J of this
section, a person who proposes to offer subdivided lands, as defined in section
32-2101, for sale or lease in an active management area shall apply for
and obtain a certificate of assured water supply from the director before
presenting the plat for approval to the city, town or county in which the land
is located, where such is required, and before filing with the state real
estate commissioner a notice of intention to offer such lands for sale or lease,
pursuant to section 32-2181, unless the subdivider has obtained a written
commitment of water service for the subdivision from a city, town or private
water company designated as having an assured water supply pursuant to this
section.

B. Except as provided in subsections G and J of this
section, a city, town or county may approve a subdivision plat only if the
subdivider has obtained a certificate of assured water supply from the director
or the subdivider has obtained a written commitment of water service for the
subdivision from a city, town or private water company designated as having an
assured water supply pursuant to this section.� The city, town or county shall
note on the face of the approved plat that a certificate of assured water
supply has been submitted with the plat or that the subdivider has obtained a
written commitment of water service for the proposed subdivision from a city,
town or private water company designated as having an assured water supply
pursuant to this section.

C. Except as provided in subsections G and J of this
section, the state real estate commissioner may issue a public report
authorizing the sale or lease of subdivided lands only on compliance with
either of the following:

1. The subdivider, owner or agent has paid any
activation fee required under section 48-3772, subsection A, paragraph 7
and any replenishment reserve fee required under section 48-3774.01,
subsection A, paragraph 2 and has obtained a certificate of assured water
supply from the director.

2. The subdivider has obtained a written commitment
of water service for the lands from a city, town or private water company
designated as having an assured water supply pursuant to this section and the
subdivider, owner or agent has paid any activation fee required under section
48-3772, subsection A, paragraph 7.

D. The director shall designate private water
companies in active management areas that have an assured water
supply. If a city or town acquires a private water company that has
contracted for central Arizona project water, the city or town shall assume the
private water company's contract for central Arizona project water.

E. The director shall designate cities and towns in
active management areas where an assured water supply exists. If a
city or town has entered into a contract for central Arizona project water, the
city or town is deemed to continue to have an assured water supply until
December 31, 1997.� Commencing on January 1, 1998, the determination that the
city or town has an assured water supply is subject to review by the director
and the director may determine that a city or town does not have an assured
water supply.

F. The director shall notify the mayors of all
cities and towns in active management areas and the chairmen of the boards of
supervisors of counties in which active management areas are located of the
cities, towns and private water companies designated as having an assured water
supply and any modification of that designation within thirty days after the
designation or modification.� If the service area of the city, town or private
water company has qualified as a member service area pursuant to title 48,
chapter 22, article 4, the director shall also notify the conservation district
of the designation or modification and shall report the projected average
annual replenishment obligation for the member service area based on the
projected and committed average annual demand for water within the service area
during the effective term of the designation or modification subject to any
limitation in an agreement between the conservation district and the city, town
or private water company.� For each city, town or private water company that
qualified as a member service area under title 48, chapter 22 and that was
designated as having an assured water supply before January 1, 2004, the
director shall report to the conservation district on or before January 1, 2005
the projected average annual replenishment obligation based on the projected
and committed average annual demand for water within the service area during
the effective term of the designation subject to any limitation in an agreement
between the conservation district and the city, town or private water
company. Persons proposing to offer subdivided lands served by those
designated cities, towns and private water companies for sale or lease are
exempt from applying for and obtaining a certificate of assured water supply.

G. This section does not apply in the case of the
sale of lands for developments that are subject to a mineral extraction and
metallurgical processing permit or an industrial use permit pursuant to
sections 45-514 and 45-515.

H. The director shall adopt rules to carry out the
purposes of this section. The rules shall provide for a reduction in
water demand for an application for a designation of assured water supply or a
certificate of assured water supply if a gray water reuse system will be
installed that meets the requirements of the rules adopted by the department of
environmental quality for gray water systems and if the application is for a
certificate of assured water supply, the land for which the certificate is
sought must qualify as a member land in a conservation district pursuant to
title 48, chapter 22, article 4.� For the purposes of this subsection,
"gray water" has the same meaning prescribed in section 49-201.

I. If the director designates a municipal provider
as having an assured water supply under this section and the designation lapses
or otherwise terminates while the municipal provider's service area is a member
service area of a conservation district, the municipal provider or its
successor shall continue to comply with the consistency with management goal
requirements in the rules adopted by the director under subsection H of this
section as if the designation was still in effect with respect to the municipal
provider's designation uses. When determining compliance by the
municipal provider or its successor with the consistency with management goal
requirements in the rules, the director shall consider only water delivered by
the municipal provider or its successor to the municipal provider's designation
uses.� A person is the successor of a municipal provider if the person
commences water service to uses that were previously designation uses of the
municipal provider.� Any groundwater delivered by the municipal provider or its
successor to the municipal provider's designation uses in excess of the amount
allowed under the consistency with management goal requirements in the rules
shall be considered excess groundwater for purposes of title 48, chapter 22.�
For the purposes of this subsection, "designation uses" means all
water uses served by a municipal provider on the date the municipal provider's
designation of assured water supply lapses or otherwise terminates and all
recorded lots within the municipal provider's service area that were not being
served by the municipal provider on that date but that received final plat
approval from a city, town or county on or before that date. Designation uses
do not include industrial uses served by an irrigation district under section
45-497.

J. Subsections A, B
and C of this section do not apply to a person who proposes to offer subdivided
land for sale or lease in an active management area if all the following apply:

1. The director
issued a certificate of assured water supply for the land to a previous owner
of the land and the certificate was classified as a type A certificate under
rules adopted by the director pursuant to subsection H of this section.

2. The director has not revoked the certificate of
assured water supply described in paragraph 1 of this subsection, and
proceedings to revoke the certificate are not pending before the department or
a court.� The department shall post on its website a list of all certificates
of assured water supply that have been revoked or for which proceedings are
pending before the department or a court.

3. The plat submitted to the department in the
application for the certificate of assured water supply described in paragraph
1 of this subsection has not changed.

4. Water service is currently available to each lot
within the subdivided land and the water provider listed on the certificate of
assured water supply described in paragraph 1 of this subsection has not
changed.

5. The subdivided land qualifies as a member land
under title 48, chapter 22 and the subdivider has paid any activation fee
required under section 48-3772, subsection A, paragraph 7 and any
replenishment reserve fee required under section 48-3774.01, subsection
A, paragraph 2.

6. The plat is submitted for approval to a city,
town or county that is listed on the department's website as a qualified
platting authority.

K. Subsection J of this section does not affect the
assignment of a certificate of assured water supply as prescribed by section 45-579.

L. On or before December 31, 2023, the director
shall study and submit to the governor, president of the senate and speaker of
the house of representatives a report on whether and how a person that seeks a
building permit for six or more residences within an active management area,
without regard to any proposed lease term for those residences, should apply
for and obtain a certificate of assured water supply from the director before
presenting the permit application for approval to the county in which the land
is located, unless the applicant has obtained a written commitment of water
service for the residences from a city, town or private water company
designated as having an assured water supply pursuant to this section.

M. For the purposes
of this section, the director shall find that any volume of groundwater or
stored water recovered outside the area of impact of storage that is subject to
groundwater savings credits issued pursuant to section 45-465.05 or rules
adopted by the director pursuant to section 45-465.05, subsection L and
pledged to an application for a certificate or designation of assured water
supply is exempt from the physical availability requirement for an assured
water supply. This subsection does not exempt:

1. Any volume of groundwater or stored water
recovered outside the area of impact of storage that is subject to groundwater
savings credits from any requirement for an assured water supply other than the
physical availability requirement.

2. A water supply to be stored underground from the
requirement to demonstrate that the supply will be physically available for
storage.

N. For the purposes of this section, "assured
water supply" means all of the following:

1. Sufficient groundwater, surface water or effluent
of adequate quality will be continuously available to satisfy the water needs
of the proposed use for at least one hundred years. Beginning
January 1 of the calendar year following the year in which a groundwater
replenishment district is required to submit its preliminary plan pursuant to
section 45-576.02, subsection A, paragraph 1, with respect to an
applicant that is a member of the district, "sufficient groundwater"
for the purposes of this paragraph means that the proposed groundwater
withdrawals that the applicant will cause over a period of one hundred years
will be of adequate quality and will not exceed, in combination with other
withdrawals from land in the replenishment district, a depth to water of one
thousand feet or the depth of the bottom of the aquifer, whichever is
less. In determining depth to water for the purposes of this
paragraph, the director shall consider the combination of:

(a) The existing rate of decline.

(b) The proposed withdrawals.

(c) The expected water requirements of all recorded
lots that are not yet served water and that are located in the service area of
a municipal provider.

2. The projected groundwater use is consistent with
the management plan and achievement of the management goal for the active
management area.

3. The financial capability has been demonstrated to
construct the water facilities necessary to make the supply of water available
for the proposed use, including a delivery system and any storage facilities or
treatment works.
The director may accept evidence of
the construction assurances required by section 9-463.01, 11-822 or
32-2181 to satisfy this requirement.

END_STATUTE

Sec.
12.
Section
48-6414, Arizona Revised Statutes, is amended to read:

START_STATUTE
48-6414.

Inapplicability
of other adequate water supply provisions to proposed subdivisions in the
district

Section 9-463.01,
subsections J
,

through Q
K and L
, section 11-823, section 32-2181,
subsection F, section 32-2183, subsection H, section 32-2197.08,
subsection E
, section

and sections
45-108
, subsection H, section

and
45-108.01
,
section 45-108.02 and section 45-108.03
do not apply to
proposed subdivisions in the district.
END_STATUTE