Designation; assured water supply; offset
HB2297 creates a new process for obtaining or modifying a designation of assured water supply in an active management area when the application includes groundwater or stored water recovered outside the area of impact. The bill directs the director to treat certain volumes of groundwater and stored water as physically available if the applicant meets the bill’s offset and calculation rules, which are based largely on 2023 municipal provider reporting and the applicant’s existing and projected water use. It also sets limits on what can be counted, excludes effluent from the definition of new alternative water supply, and bars the director from adding other groundwater sources in a designation that uses this offset framework.
The bill establishes a 15-year initial term for designations granted under this section and allows expedited modifications during the term to add additional water supplies that do not rely on groundwater or stored water recovered outside the area of impact. It also adds financial-capability standards for applicants, including requirements tied to completed facilities, developer agreements, financing evidence, city capital improvement plans, or Corporation Commission approval for private water companies. In addition, it limits extinguishment credits to those delivered to the subdivision subject to the application and sets a groundwater allowance formula tied to 2023 groundwater deliveries.
The bill would amend Arizona’s groundwater management laws in Title 45 by adding a new section governing alternative assured water supply designations, offsets, and calculations within active management areas. It would affect municipal providers, private water companies, developers, and the Arizona Department of Water Resources director by creating a new pathway for water-supply approval and by constraining how water volumes are counted for assured water supply purposes. The measure is also designated as an emergency and requires a two-thirds vote for enactment.
The general sentiment appears mixed to favorable among supporters but clearly contested overall. The House Natural Resources, Energy & Water Committee advanced it on a 6-3 vote, the House Rules Committee passed it unanimously, and the House third reading was narrow at 33-27, indicating significant division. The available voting history suggests the bill had enough support to move forward, but not broad consensus.
The main point of contention appears to be whether the bill appropriately relaxes or restructures assured water supply requirements in a way that helps development and water providers versus whether it weakens groundwater management safeguards. Supporters likely view it as a practical mechanism for recognizing alternative water supplies and existing provider conditions, while opponents likely object to the use of 2023 baseline calculations, the treatment of groundwater and stored water outside the area of impact, and the potential for expanded development approvals under a new offset formula.
HB2297 would add a new statutory section to Arizona’s groundwater management laws in Title 45, creating an alternative assured water supply designation framework for active management areas. It changes how the Department of Water Resources calculates physically available water, groundwater allowances, and offsets for applications that include groundwater or stored water recovered outside the area of impact, and it imposes new financial-capability and credit-use requirements on applicants. The bill would directly affect municipal providers, private water companies, developers, and the state water director by establishing new approval criteria and limiting what water sources may be counted.
The bill’s sentiment appears divided. It passed the House Natural Resources, Energy & Water Committee 6-3, cleared House Rules unanimously, and then passed the House on third reading by a relatively narrow 33-27 margin. That pattern suggests the bill had meaningful support, but also substantial opposition and no broad bipartisan consensus.
The likely core dispute is whether the bill improves water-supply flexibility or weakens Arizona’s groundwater protections. Supporters appear to favor the new offset-based designation process and expedited modifications for additional non-groundwater supplies, while opponents likely object to the use of 2023 reporting as the baseline, the treatment of groundwater and stored water recovered outside the area of impact, and the possibility that the bill could facilitate development approvals without adding enough new water security. The close House vote indicates these concerns were significant among legislators.