HB2550 • 2026

rural water sustainability fund; appropriation

HB2550 - rural water sustainability fund; appropriation

Budget Education Technology Water

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Christopher Mathis
Last action: 2026-01-21
Official status: House second read
Effective date: Not listed

Plain English Breakdown

The official text does not specify an effective date, only that groups must exist 'on the effective date' to be eligible.

HB2550: Rural Watershed Sustainability Initiative Fund

This bill creates a new fund to give grants to local watershed groups in rural areas for their administrative and operational needs.

What This Bill Does

Creates the Rural Watershed Sustainability Initiative Fund with $500,000 from state funds for fiscal year 2026-2027.
Allows the Department of Water Resources to accept federal money and private donations for this fund.
Permits up to 15% of the fund's money to be used for administration costs, including hiring additional staff if needed.
Provides grants to rural watershed groups for needs such as training, salaries, technology, software, application fees, grant writers, and hosting education events.
Requires existing watershed groups on the effective date to apply for funding, with preference given to those in high-risk or critically depleted groundwater basins that improve water conservation.
Mandates an annual report sent to state leaders by December 1 starting in 2027.

Who It Names or Affects

Local watershed groups located in rural areas of Arizona that existed on the effective date of this law.
The Department of Water Resources, which manages the fund and grants.
State government officials who receive annual reports on the fund's activities.

Terms To Know

Appropriation: Money that the legislature officially sets aside for a specific purpose from state funds.
Watershed group: A local organization that works to protect and manage water resources in a specific area where rain flows into rivers or lakes.
Lapsing of appropriations: Rules about what happens if money is not spent by the end of a budget year; this bill says these rules do not apply to this fund, allowing unspent money to carry over.

Limits and Unknowns

The exact date when this law becomes effective is not listed in the provided text.
Future funding amounts after fiscal year 2026-2027 depend on new legislative decisions and are not guaranteed by this bill.

Bill History

2026-01-21 House
House second read
2026-01-20 House
House Rules: None
2026-01-20 House
House Appropriations: None
2026-01-20 House
House Natural Resources, Energy & Water: None
2026-01-20 House
House first read

Official Summary Text

HB2550 - rural water sustainability fund; appropriation

Current Bill Text

Read the full stored bill text

HB2550 - 572R - I Ver

REFERENCE TITLE:
rural water sustainability fund; appropriation

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 2550

Introduced by

Representative
Mathis

AN
ACT

Amending title 45, chapter 1, article 1,
Arizona Revised Statutes, by adding section 45-120; appropriating monies;
relating to water.

(TEXT OF BILL BEGINS ON NEXT PAGE)

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

Section 1. Title 45, chapter 1, article 1,
Arizona Revised Statutes, is amended by adding section 45-120, to read:

START_STATUTE
45-120.

Rural watershed sustainability initiative fund; grants; rules;
annual report

A. The rural watershed sustainability
initiative fund is established consisting of legislative
appropriations. The department shall administer the fund.� Monies in
the fund are subject to legislative appropriation.

B. The director may accept and spend
federal monies and private grants, gifts, contributions and devises to assist
in carrying out the purposes of this section.

C. Monies in the fund are exempt from
the provisions of section 35-190 relating to lapsing of appropriations.

D. Each year the department may use
up to fifteen percent of the monies in the fund to administer the fund.�
Subject to the fifteen percent cap, the department may hire additional staff as
needed to fulfill the purposes of this section.

E. The department shall provide
grants to local watershed groups in rural areas to fund the administrative and
operational needs of local watershed groups, including any of the following:

1. Staff training.

2. Budgeting software.

3. Technology.

4. Staff salaries.

5. Grant application fees.

6. Contracting fees for grant writers
and hosting education events.

7. Other administrative and
operational needs as determined by the department.

F. Any watershed group that exists on
the effective date of this section is eligible to apply for project funding
from the fund.� The department shall give preference to applicants that:

1. Have clearly defined goals and
objectives that will directly improve water conservation and watershed health.

2. Are located in high risk or
critically depleted groundwater basins.

G. The department shall adopt rules
to implement this section, including rules that prescribe the following:

1. Application criteria.

2. Grant application amounts.

3. Disbursement procedures.

4. Reporting requirements.

H. On or before December 1, 2027 and
each year thereafter, the department shall submit a report of the fund and the
activities conducted in the previous fiscal year to the governor, the president
of the senate and the speaker of the house of representatives and shall provide
a copy of this report to the secretary of state.� The department shall post the
report on the department's website.
END_STATUTE

Sec. 2.
Appropriation;
rural watershed sustainability initiative fund; exemption

A. The sum of $500,000 is
appropriated from the state general fund in fiscal year 2026-2027 to the rural
watershed sustainability initiative fund established by section 45-120,
Arizona Revised Statutes, as added by this act, and is appropriated from the
rural watershed sustainability initiative fund to the department of water
resources.

B. The appropriation made
in subsection A of this section is exempt from the provisions of section
35-190, Arizona Revised Statutes, relating to lapsing of appropriations.

Sec. 3.
Legislative findings

The legislature finds that a lack of
funding for local rural watershed groups is a significant barrier for local
watershed groups to conduct work that promotes water conservation, increases
resiliency against the adverse impacts of drought and protects the limited
water supplies of this state.