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HB2545 - 572R - I Ver
REFERENCE TITLE:
multifamily property; water; certificate
State of Arizona
House of Representatives
Fifty-seventh Legislature
Second Regular Session
2026
HB 2545
Introduced by
Representative
Mathis
AN
ACT
amending sections 45-576, 48-3701,
48-3772, 48-3774.01 and 48-3779, Arizona Revised Statutes; relating to real
estate.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. 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; definitions
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. Except for applications submitted
on or before September 30, 2024, before presenting a permit application for
approval to the city, town or county in which the land is located, a person
that seeks a building permit or building plan for six or more detached
single-family residences, a multifamily residential property or a condominium
within any active management area, without regard to any proposed lease term
for those detached single-family or multifamily residences, shall:
1. Apply for and obtain a certificate
of assured water supply from the director unless the applicant has obtained a
written commitment of water service for the residences from a city, town or
private water company that is designated as having an assured water supply
pursuant to this section.
2. Pay all applicable fees pursuant
to sections 48-3772 and 48-3774.01 and accompany the permit application
with proof that the applicable fees have been paid.
O. Except for applications submitted
on or before September 30, 2024, a city, town or county may approve a building
permit or building plan application that includes six or more detached
single-family residences, a multifamily residential property or a condominium
within any active management area, without regard to any proposed lease term
for those detached single-family or multifamily residences, only if the
residences included in the building permit or building plan have obtained a
certificate of assured water supply from the director or a written commitment
of water service for the residences from a city, town or private water company
that is designated as having an assured water supply pursuant to this section.
N.
P.
For
the purposes of this section
:
,
1.
"Assured water
supply" means all of the following:
1.
(
a
)
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
subdivision
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
subdivision
, the director shall consider the combination of:
(a)
(
i
)
The existing rate of decline.
(b)
(
ii
)
The proposed withdrawals.
(c)
(
iii
)
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.
(
b
)
The projected groundwater use is consistent with
the management plan and achievement of the management goal for the active
management area.
3.
(
c
)
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.
2. "Condominium" has the
same meaning prescribed in section 33-1202.
3. "Multifamily residential
property" has the same meaning prescribed in section 49-746.
END_STATUTE
Sec. 2. Section 48-3701, Arizona Revised
Statutes, is amended to read:
START_STATUTE
48-3701.
Definitions
In this chapter, unless the context otherwise requires:
1. "Active management area" means an
active management area established under title 45, chapter 2, article 2.
2. "Board" means the board of directors of
a multi-county water conservation district.
3. "Condominium" has the
same meaning prescribed in section 33-1202.
3.
4.
"Contract
replenishment obligation" means an amount of groundwater that the district
contracts to replenish in a year on behalf of a municipal provider pursuant to
a contract authorized under section 48-3772, subsection B, paragraph 9.
4.
5.
"Credits"
means any groundwater in addition to the amount of groundwater that may be used
at a member land or delivered within a member service area for use within the
member service area pursuant to the applicable assured water supply rules adopted
by the department of water resources.
5.
6.
"Declaration"
means an instrument recorded against real property and conforming to the
requirements prescribed by section 48-3774, subsection A, paragraph 5.
6.
7.
"District"
means a multi-county water conservation district organized under the
authority of this chapter.
7.
8.
"Excess
groundwater" means an amount of groundwater equal to that amount of
groundwater delivered to a member land in a calendar year or delivered within a
member service area by the municipal provider for that member service area in a
calendar year in excess of the amount of groundwater that may be used at the
member land in that calendar year or that may be delivered by the municipal
provider for use within the member service area in that calendar year and
consistent with the applicable assured water supply rules adopted by the
department of water resources for the active management area where the member
land or the member service area is located.
8.
9.
"Excess
groundwater increment" means the amount by which excess groundwater
reported for a member service area under section 48-3775, subsection B in
any year exceeds the maximum amount of excess groundwater reported for that
member service area in any prior year.
9.
10.
"Groundwater
replenishment obligation" means, for each active management area in which
member lands or member service areas are or may be located, the total of the
cumulative parcel replenishment obligation of all parcels of member land in
that active management area for a particular calendar year plus the cumulative
service area replenishment obligation of all member service areas in that
active management area for a particular calendar year.
10.
11.
"Member
land" means any real property that meets the requirements of section 48-3774.
11.
12.
"Member
service area" means the service area of a municipal provider that
qualifies as a member service area under section 48-3780, including any
additions to or extensions of the service area.
12.
13.
"Multi-county
water conservation district" means a district composed of three or more
counties that have joined together for the creation of a district.
13.
14.
"Municipal
provider" means a city, town or private water company or an irrigation
district that supplies water for non-irrigation use.
14.
15.
"Parcel
of member land" means any portion of member land for which the tax
assessor for the county in which the member land is located has issued a
separate county parcel number.
15.
16.
"Parcel
replenishment obligation" means, with respect to any particular parcel of
member land, an amount of groundwater that is equal to the amount of
groundwater delivered to the parcel of member land in a calendar year
multiplied by the percentage that the excess groundwater of the applicable
member land for that year bears to the total amount of groundwater delivered to
the applicable member land during that year.
16.
17.
"Population"
means the population determined in the most recent United States decennial
census.
17.
18.
"Private
water company" has the same meaning prescribed in section 45-402.
18.
19.
"Projected
replenishment obligation" means for each active management area, the
district's total projected annual groundwater replenishment obligation for each
of the one hundred years following submission of the district plan of
operation.
19.
20.
"Replenish"
means to increase the amount of groundwater in an aquifer through water storage
pursuant to title 45, chapter 3.1 for the purpose of meeting the obligations of
article 4 of this chapter.
20.
21.
"Reserve
target" means the volume calculated for each active management area as
prescribed by section 48-3772, subsection E.
22. "Residential lease
community":
(a) Means six or more detached
residential dwelling units that are on one or more lots, parcels or fractional
interests, without regard to the zoning classification of the lots, parcels or
fractional interests, and that are intended to be offered for the purpose of
lease, whether immediate or future, without regard to the lease term, under a
common promotional plan as defined in section 32-2101.
(b) Includes multifamily residential
properties as defined in section 49-746.
21.
23.
"Resolution"
means a resolution adopted by the governing body of a city or town, by the
board of directors of a private water company that is a corporation, by the
general partners of a private water company that is a partnership or by the
individual owners of a private water company that is individually owned.
22.
24.
"Secretary"
means the secretary of the interior of the United States of America.
23.
25.
"Service
area" has the same meaning prescribed in section 45-402.
24.
26.
"Service
area replenishment obligation" means, with respect to any particular
member service area, the excess groundwater of that member service area in a
particular calendar year reduced by the replenishment credits, if any, applied
by the municipal provider with respect to the member service area under section
48-3772, subsection H.
25.
27.
"Water
storage" has the same meaning prescribed in section 45-802.01.
END_STATUTE
Sec. 3. Section 48-3772, Arizona Revised
Statutes, is amended to read:
START_STATUTE
48-3772.
Duties and powers of district regarding replenishment
A. The district shall:
1. Establish annually the costs and expenses to
replenish groundwater pursuant to this article with respect to all parcels of
member lands and all member service areas located in each active management
area, including capital expenses, debt service expenses, the operation,
maintenance, replacement and administrative costs and expenses of the district,
replenishment reserve costs and expenses as provided in subsection E of this
section and reasonable reserves. Separate calculations of costs and expenses
shall be made for each active management area in which member lands or member
service areas are located and for each membership category. Costs
and expenses attributed by the district to contract replenishment obligations
shall not be included in these calculations.
2. Provide for the payment of all costs and expenses
to replenish groundwater pursuant to this chapter and the payment of operation,
maintenance, replacement and administrative costs and expenses and debt service
expenses of the district.
3. Levy an annual replenishment assessment against
each parcel of member land pursuant to section 48-3778 and an annual
replenishment tax against each municipal provider that has a member service
area pursuant to section 48-3781 to pay the district's costs and expenses
as established pursuant to paragraph 1 of this subsection.�
4. Levy a contract replenishment tax against
municipal providers that are parties to contracts authorized under subsection
B, paragraph 9 of this section to pay the district's costs and expenses to
replenish groundwater based on contract replenishment obligations.
5. Establish and maintain reserve accounts in
amounts as may be deemed necessary to perform the district's obligations under
this article.
6. Fulfill all obligations under resolutions adopted
pursuant to subsection B, paragraph 10 of this section.
7. Levy an activation fee as follows:
(a) For subdivisions within member lands and member
service areas that are enrolled before May 6, 2004 and that had not been issued
a public report before August 12, 2005, the district shall levy a onetime
activation fee against each housing unit to be constructed within the
subdivision.
(b) For subdivisions within member lands and member
service areas that are enrolled on or after May 6, 2004, the district shall
levy a onetime activation fee against each housing unit to be constructed
within the subdivision.
(
c
) For residential lease communities and condominiums within
member lands and member service areas that are enrolled on or after January 1,
2027, the district shall levy a onetime activation fee against each housing
unit to be constructed within the residential lease community or condominium.
(c)
(
d
)
The activation
fee shall be paid to the district according to
either
one
of the following schedules, whichever the
subdivider
payor
elects:
(i) Paid in full before issuance of a public report
for each real estate subdivision identified in subdivision (a) or (b) of this
paragraph.
(ii) One-half paid before issuance of a public
report for each real estate subdivision identified in subdivision (a) or (b) of
this paragraph and the remaining amount paid no later than one year after the
issuance of the public report. The total amount of the activation
fee must be the amount of the activation fee in effect at the time of the
initial payment.� Payment of the initial one-half of the activation fee
pursuant to this item constitutes sufficient payment of applicable fees for
notice of intent to subdivide as prescribed in section 32-2181,
subsection C and for issuance of a public report as prescribed in section 32-2183,
subsection G and section 45-576, subsection C, except that on failure to
pay the remaining amount, the commissioner shall suspend the public report for
that subdivision pursuant to section 32-2183.
(
iii
) Paid in full pursuant to section 45-576, subsection N.
(d)
(
e
)
The activation
fee shall be established annually by the district. The amount of the
activation fee to be paid to the district under subdivision
(c)
(d)
of this paragraph must be the amount of the
activation fee in effect at the time of payment. Revenues from the
activation fee together with revenues from other sources that are legally
available to the district for those uses shall be used by the district to
acquire, lease or exchange water or water rights and develop infrastructure
necessary for the district to perform its replenishment obligations.
8. For any year, set all of its rates and charges
associated with the acquisition, lease or exchange of water or water rights and
development of infrastructure necessary for the district to perform its
replenishment obligations, other than the annual membership dues established
pursuant to section 48-3779, so that the total projected revenues from
revenue sources other than the annual membership dues, that are legally
available to the district in that year to pay costs associated with the
acquisition, lease or exchange of water or water rights and development of
infrastructure necessary for the district to perform its replenishment
obligations, shall be at least three times the total projected revenues from
the annual membership dues in that year. For the purposes of this
paragraph, costs associated with the acquisition, lease or exchange of water or
water rights do not include the annual costs associated with delivery of water
for replenishment purposes.
B. The district may:
1. Acquire, develop, construct, operate, maintain,
replace and acquire permits for water storage, storage facilities and recovery
wells for replenishment purposes.
2. Acquire, transport, hold, exchange, own, lease,
store or replenish water, except groundwater withdrawn from an active
management area, subject to the provisions of title 45, for the benefit of
member lands and member service areas.
3. Acquire, hold, exchange, own, lease, retire or
dispose of water rights for the benefit of member lands and member service
areas.
4. Require municipal providers to provide such
information, in such form and within the time limits prescribed by the
district, as may be necessary to carry out the purpose of this chapter.
5. Levy and collect assessments, fees, charges,
taxes and other revenues as are provided in this chapter for the financing of
replenishment activities.
6. Contract for or perform feasibility studies of
water storage, storage facilities and recovery wells for replenishment
purposes.
7. Acquire real and personal property for water
storage, storage facilities and recovery wells for replenishment purposes by
purchase, lease, donation, dedication, exchange or other lawful means.
8. Use any facilities and any excess storage
capacity of any state demonstration projects undertaken pursuant to title 45,
chapter 3.1 for water storage for replenishment purposes.
9. Subject to subsection G of this section, contract
with any municipal provider having a member service area to replenish
groundwater on behalf of the municipal provider and with respect to the member
service area in an amount in excess of the sum of the service area
replenishment obligations applicable to the member service area for all years
in which the district has not completed the replenishment of the groundwater
replenishment obligation for the member service area.
10. Adopt resolutions
granting water availability status to a member service area of a city, town or
private water company and committing to replenish a specified average annual
volume of water in a location where the city, town or private water company may
physically access the water for service to its customers, if all of the
following apply:
(a) The district has reviewed its requirements for
transportation of central Arizona project water, its contracts, subcontracts,
letter agreements, excess water contracts and other contractual obligations and
its member service area and member land requirements and has determined that
the district can meet those obligations and that capacity remains in the
central Arizona project to meet the obligations undertaken through the
resolution.
(b) The resolution acknowledges that the commitment
to replenish the specified average annual volume of water in the location cited
in the resolution shall be a permanent obligation of the district, unless one
of the following applies:
(i) A permanent substitute supply of water is found
for the city, town or private water company and the substitution is approved by
the director of water resources, thus terminating the water availability status
of the member service area.
(ii) The requirements of section 45-576.07,
subsection A are not met, and thus the director of water resources does not
issue an order granting or maintaining the city, town or private water company
as having an assured water supply based in whole or in part on section 45-576.07.�
If no order is issued within two years of the district adopting the resolution,
the resolution may be repealed, and the district shall be relieved of all
obligations under the resolution.
(c) The average annual volume of water specified in
the resolution, when added to the average annual volume of water specified in
all other resolutions adopted pursuant to this paragraph, does not exceed
twenty thousand acre-feet.
(d) The district has entered into an agreement with
the city, town or private water company under which the city, town or private
water company will hold for the district's future use, and provide to the
district when needed, sufficient water to meet the obligations undertaken by
the district through the resolution.
(e) The district determines that the obligations
undertaken by the district through the resolution will not increase annual
replenishment assessment rates or costs to central Arizona project contract and
subcontract holders and its member service areas and member lands.
(f) The director of water resources has found,
pursuant to section 45-576.07, subsection H, that the district has the
capability to grant water availability status to member service areas.
11. Provide in resolutions
adopted pursuant to paragraph 10 of this subsection that the district may
fulfill its obligations under the resolution in any year by directly delivering
to the city, town or private water company the water that otherwise would have
been replenished pursuant to the resolution, if all of the following apply:
(a) The district has reviewed its requirements for
transportation of central Arizona project water, its contracts, subcontracts,
letter agreements, excess water contracts and other contractual obligations and
its member service area and member land requirements and has determined that
the district can meet those obligations and that capacity remains in the
central Arizona project to make direct deliveries pursuant to this paragraph.
(b) The district determines that the delivery will
not increase annual replenishment assessment rates or costs to central Arizona
project contract and subcontract holders, its member service area and member
lands.
12. Enter into agreements
with a city, town or private water company that will have water made available
to it through a resolution adopted pursuant to paragraph 10 of this subsection
and under which the city, town or private water company compensates the
district for the costs and fair value of the water supply provided by the
district.
13. Issue revenue bonds
pursuant to article 3 of this chapter to fund the costs and expenses of the
district for the acquisition, lease or exchange of water or water rights and
the development of infrastructure necessary for the district to perform its
replenishment obligations subject to the following:
(a) The principal of, interest and premiums, if any,
on revenue bonds issued pursuant to article 3 of this chapter to acquire, lease
or exchange water or water rights and develop infrastructure necessary for the
district to perform its replenishment obligations are not payable from any
revenues of the district other than revenues generated or collected pursuant to
this article that are legally available to the district for those purposes and
revenues from the investment of the proceeds of the bonds.
(b) The district may not use the proceeds of the
bonds to acquire or lease:
(i) Groundwater, as defined in section 45-101,
except as expressly authorized in sections 45-547, 45-553 and 45-554.
(ii) Surface water, as defined in section 45-101,
that is the subject of a general adjudication pursuant to title 45, chapter 1,
article 9.
(c) Subdivision (b) of this paragraph does not
prohibit the district from acquiring or leasing central Arizona project water.
14. Except as provided in
section 48-3780.01, subsection B, in addition to any other assessments,
fees, charges or taxes levied and collected under this chapter, or under any
declaration, contract or agreement entered into under this chapter, charge
annual dues for membership pursuant to section 48-3779 against each
parcel of member land and each municipal provider that has a member service
area.
C. The functions of the district under subsection B,
paragraph 1 of this section may be performed on behalf of the district by other
persons under contract with the district.
D. The capital costs of the facilities of any state
demonstration projects used by the district pursuant to subsection B, paragraph
8 of this section shall not be included in the capital costs and expenses
established by the district under subsection A, paragraph 1 of this section.
E. The district shall establish and maintain a
replenishment reserve of long-term storage credits as follows:
1. The district shall calculate a reserve target for
each of the three active management areas within the district and shall
identify the reserve target in the plan of operation prepared pursuant to
section 45-576.02. The reserve target for each active
management area shall be calculated as follows:
(a) For each active management area, add together
the projected replenishment obligation for each of the twenty years following
submission of the plan of operation. For the purposes of this
subdivision, each active management area's projected replenishment obligation
does not include replenishment obligations under resolutions adopted pursuant
to subsection B, paragraph 10 of this section or replenishment obligations for
category 2 member lands.
(b) Divide each sum from subdivision (a) of this
paragraph by twenty to determine the twenty-year average annual projected
replenishment obligations for each active management area and multiply by
five.� Each product is the reserve target for the applicable active management
area.� If the replenishment reserve account balance in any active management
area exceeds the reserve target as of September 26, 2025, the excess shall
remain in the account.
2. The reserve target for an active management area
may be adjusted by the district, subject to the approval of the director of
water resources, based on changes in either of the following:
(a) The active management area's projected
replenishment obligation.
(b) The volumes of water identified in the plan of
operation prepared pursuant to section 45-576.02 as water that the
district plans to use to meet its replenishment obligations for that active
management area.
3. The district shall include a replenishment
reserve charge in the annual replenishment assessment levied against all
parcels of category 1 member land as provided in section 48-3774.01 and
in the annual replenishment tax levied against all municipal providers that
have member service areas as provided in section 48-3780.01. The
replenishment reserve charge for each active management area is established
annually by the district based on the reserve target for that active management
area.
4. The district shall levy a replenishment reserve
fee against category 1 member lands pursuant to section 48-3774.01 and
against member service areas pursuant to section 48-3780.01.� For
category 1 member lands the fee is equal to twice the applicable replenishment
reserve charge multiplied by the total projected average annual replenishment
obligation for the member lands as reported by the director of water resources
pursuant to section 45-578, subsection F. For member service
areas the fee is equal to twice the applicable replenishment reserve charge
multiplied by the excess groundwater increment.� With the approval of the
district and the director of water resources, long-term storage credits
as defined in section 45-802.01 may be assigned to the district's
replenishment reserve subaccount in lieu of paying the replenishment reserve
fee.
5. The district shall use replenishment reserve
charges and replenishment reserve fees collected within each active management
area together with all interest earned on the charges and fees to store water
in that active management area in advance of groundwater replenishment
obligations for the purpose of developing long-term storage credits as
defined in section 45-802.01 that shall be credited to the replenishment
reserve subaccount for that active management area as provided in section 45-859.01.
6. Beginning on January 1, 2030 or earlier, on
approval of the director of water resources pursuant to section 45-859.01,
subsection K, the district may transfer credits from a replenishment reserve
subaccount to a conservation district account as provided in section 45-859.01
to satisfy its groundwater replenishment obligations.
7. If the district transfers credits from the
replenishment reserve subaccount for an active management area pursuant to
section 45-859.01, subsection E, the district shall include in the annual
replenishment assessment levied against all parcels of category 1 member land
in that active management area and, except as provided in section 48-3780.01,
subsection B, in the annual replenishment tax levied against all municipal
providers that have member service areas in that active management area a
reserve replacement component to fund the replacement of the transferred
credits. The district shall use all monies from the reserve
replacement component collected within an active management area together with
all interest earned on the monies to develop long-term storage credits as
defined in section 45-802.01 within that active management area to be
credited to the replenishment reserve subaccount for that active management
area as provided in section 45-859.01.
8. For the purposes of establishing and maintaining
the replenishment reserve, the district shall have access to excess central
Arizona project water equivalent to but not more than the access the Arizona
water banking authority has for the purposes specified in section 45-2401,
subsection H, paragraph 2.
F. Groundwater replenished by the district pursuant
to a contract to replenish groundwater under subsection B, paragraph 9 of this
section shall not be credited to a replenishment reserve subaccount established
under section 45-859.01.
G. The district shall not enter into a contract
authorized under subsection B, paragraph 9 of this section unless the district
has determined that the contract will not adversely affect the district's
ability to fulfill its obligations under this chapter. For each
contract entered into under subsection B, paragraph 9 of this section, the
district shall perform its contract replenishment obligations in the active
management area in which the service area of the municipal provider that is the
party to the contract is located.
H. If the district replenishes groundwater on behalf
of a municipal provider pursuant to a contract to replenish groundwater under
subsection B, paragraph 9 of this section, the amount of groundwater so
replenished shall be a replenishment credit to the municipal provider that may
be applied by the municipal provider on notice to the district to reduce the
service area replenishment obligations applicable to the municipal provider.
I. In the Phoenix active management area, the
district, to the extent reasonably feasible, shall replenish groundwater in the
east portion of the active management area and in the west portion of the
active management area in the approximate proportion that the groundwater
replenishment obligation attributable in a particular year to member lands and
member service areas located in the east portion of the active management area
bears to the groundwater replenishment obligation attributable in that year to member
lands and member service areas located in the west portion of the active
management area.� For the purposes of this subsection, the boundary between the
east Salt river valley subbasin and the west Salt river valley subbasin is the
boundary between the east and west portions of the active management area.
J. The costs and expenses charged by the district to
an active management area water district established under chapter 28 of this
title for delivery of surplus central Arizona project water to such active
management area water district for replenishment purposes shall not exceed the
costs and expenses for delivery of such water that are or would be included by
the district in the costs and expenses of replenishment for member lands and
member service areas within the active management area in which such active
management area water district is situated.
END_STATUTE
Sec. 4. Section 48-3774.01, Arizona Revised
Statutes, is amended to read:
START_STATUTE
48-3774.01.
Category 1 member lands; category 2 member lands; fees
A. Except as provided in subsection B of this
section, all real property that qualifies under section 48-3774 shall be
category 1 member land. The district shall levy annual replenishment
reserve charges and
one-time
onetime
replenishment reserve fees for category 1 member lands as provided in section
48-3772, subsection E and as follows:
1. For category 1 member lands that qualified before
January 1, 2004, the district shall levy annual replenishment reserve charges
for twenty-five years beginning in 2004.
2. For category 1 member land that qualifies on or
after January 1, 2004, a replenishment reserve fee shall be paid before
issuance of a public report for each final plat within the member land as
provided in section 45-576, subsection C
or paid in full
pursuant to section 45-576, subsection N
and the district shall levy
annual replenishment reserve charges against the land included within the final
plat for twenty-three years beginning in the year after payment of the
corresponding replenishment reserve fee.
B. A parcel of member land shall be a category 2
member land if all of the following apply:
1. The parcel of member land is or will be used as a
golf course.
2. The parcel of member land is not served by a
water provider that has been designated by the director of water resources as
having an assured water supply pursuant to section 45-576.
3. The owner of the parcel notifies the district in
writing at the time of qualification that the parcel is to be category 2 member
land.� For member land that qualified under section 48-3774 before
January 1, 2004,
such
THE
notification must be made
no
NOT
later than January 30, 2004.
C. The district shall not levy replenishment reserve
fees, replenishment reserve charges or a reserve replacement component against
category 2 member lands.
D. The district shall not use credits from a
replenishment reserve subaccount established under section 45-859.01 to
satisfy its groundwater replenishment obligations for category 2 member lands.�
If as a result the district incurs additional costs and expenses in meeting its
replenishment obligations for category 2 member lands, those additional costs
and expenses are attributed solely to category 2 member lands for
THE
purposes of section 48-3772, subsection A, paragraph
1.
END_STATUTE
Sec. 5. Section 48-3779, Arizona Revised
Statutes, is amended to read:
START_STATUTE
48-3779.
Annual membership dues
A. On or before the third Monday of August of each
year, the district may charge annual membership dues on all parcels of member
lands
, on each residence within a residential lease community or
unit within a condominium
and on all municipal providers having a member
service area.
B. The annual membership dues shall be established
annually by the district. The district shall use revenues from the
annual membership dues, together with revenues from other revenue sources that
are legally available to the district for those uses, solely to pay costs
associated with the acquisition, lease or exchange of water or water rights and
development of infrastructure necessary for the district to perform its
replenishment obligations, including the payment of debt service expenses, and
necessary reserves and coverage requirements, on bonds issued for replenishment
purposes.
C. For any year in which the district has, or
expects to have, any revenue bonds outstanding that were issued for
replenishment purposes pursuant to section 48-3772, subsection B,
paragraph 13, the annual membership dues shall be established in an amount
determined by the district to be sufficient to provide, with other revenues
legally available to the district for those purposes, and taking into account
the requirements of section 48-3772, subsection A, paragraph 8, for the
payment of all debt service expenses, including necessary reserves and coverage
requirements with respect to the bonds.
D. When the district has determined the amount of
revenues to be raised through the annual membership dues, the district shall
allocate the amount to be raised between member lands
,
residenceS within a residential lease community or units within condominiumS
and member service areas prorated on the basis of the following two volumes:
1. For member lands, the projected groundwater use
per lot multiplied by the total number of residential, commercial and common
area lots that are included, or intended to be included, in each parcel of
member land.
2. Total planned annual service area replenishment
obligations for all member service areas. The planned annual service
area replenishment obligation for a member service area is the lesser of:
(a) The annual service area replenishment
obligation, as determined by the district, associated with the current and
committed water demands projected within the member service area as of December
31 of the year following the year in which the district is required to submit
its next plan under section 45-576.02, subsection C.
(b) The maximum amount of excess groundwater that
may be reported to the district as delivered by the municipal provider within
the member service area in any year as established in an agreement executed
between the municipal provider and the district.
E. The total amount allocated to member lands in any
year, as calculated pursuant to subsection D of this section, shall be prorated
among all parcels of member land based on a uniform fee
per lot
levied against the total number of residential, commercial and common area lots
, all residences within residential lease communities and all units
within condominiums
included, or intended to be included, in each parcel
of member land as determined in subsection D of this section.� These dues are a
lien on each parcel of member land and shall be certified, collected and
enforced with respect to member land in the same manner as the annual
assessment pursuant to section 48-3778, except that any parcel of member
land that is included in the service area of a municipal provider that has been
designated as having an assured water supply under section 45-576 is not
subject to the annual membership dues.
F. The total amount allocated to member service
areas in any year, as calculated pursuant to subsection D of this section,
shall be prorated among all member service areas based on a uniform fee per
acre-foot levied against the member service area's dues volume.� The dues
volume for a member service area is the greater of:
1. The planned annual service area replenishment
obligation as established pursuant to subsection D, paragraph 2 of this section
for the member service area.
2. Five percent of the service area's annual
estimated water demand to be satisfied with excess groundwater as identified in
the service area's most recent designation order issued by the director of
water resources. If the service area's most recent designation order
issued by the director of water resources does not identify the annual
estimated water demand to be satisfied with excess groundwater, the service
area's annual estimated water demand to be satisfied with excess groundwater
shall be calculated consistent with the rules adopted by the director pursuant
to section 45-576, subsection H.
G. Except in the first full year following the year
in which the director makes a determination that the district's most recent
plan of operation is consistent with achieving the management goals of the
active management areas pursuant to section 45-576.03, subsection M, for any
year in which the dues volume for a member service area, as determined pursuant
to subsection F of this section, exceeds the previous year's dues volume for
the member service area, a makeup charge shall be added to the annual membership
dues allocated under subsection F of this section to the member service area.
The makeup charge shall become part of the member service area's annual
membership dues for that year and is the sum of:
1. The difference between the current year's dues
volume and the previous year's dues volume, in acre-feet, multiplied by the sum
of the uniform fees per acre-foot established pursuant to subsection F of this
section for each year since the later of:
(a) The first full year following the year of the
director's determination that the district's most recent plan of operation is
consistent with achieving the management goals of the active management areas
pursuant to section 45-576.03, subsection M.
(b) The year in which the service area qualified as
a member service area pursuant to section 48-3780.
2. Interest on the amount established in paragraph 1
of this subsection calculated at an interest rate determined by the district.
3. The amounts established in paragraphs 1 and 2 of
this subsection multiplied by ten percent.
H. The annual membership dues become an obligation
of each municipal provider that has a member service area and shall be stated,
collected and enforced with respect to the municipal provider in the same
manner as the annual replenishment tax pursuant to sections 48-3781 and
48-3782.
I. Annual membership dues collected by the district
shall be deposited in a special fund established by the state to be spent by
the district only for the purposes authorized by this article, including:
1. The payment of debt service expenses and funding
reserves for bonds issued for replenishment purposes.
2. The payment of the costs of acquiring, leasing or
exchanging water or water rights and development of infrastructure necessary
for the district to perform its replenishment obligations.
J. Amounts collected may be transferred to a bank or
trust company to be held in trust and spent with respect to bonds issued for
replenishment purposes.
END_STATUTE