Groundwater savings credit; ADWR
SB1611 creates a new “groundwater savings credit” program administered by the Arizona Department of Water Resources (ADWR) for land in the Phoenix and Pinal active management areas, with a possible future expansion to Tucson if ADWR finds it beneficial. Under the bill, owners of land with irrigation grandfathered rights may permanently relinquish those rights in exchange for groundwater savings credits, which can then be pledged to support certificates or designations of assured water supply. The bill also directs ADWR to adopt expedited rules for the program, sets deadlines for reporting and review, and sunsets the issuance of new credits after 2035 unless the program is extended by ADWR for an additional ten years in a given area.
The bill also changes how groundwater savings credits interact with subdivision approvals and assured water supply determinations. It exempts groundwater or stored water tied to these credits from the “physical availability” requirement for assured water supply, and it directs municipalities to treat those credits as valid support for subdivision approvals and water supply designations. In addition, SB1611 limits local subdivision and landscaping requirements in initial active management areas when groundwater savings credits are pledged, including restrictions on minimum turf, tree, irrigated ground cover, open space, and decorative water features. It also bars municipalities from requiring school sites in certain subdivisions unless the municipality itself pledges the water needed for the school site.
The bill’s impact on state law is substantial because it amends municipal subdivision authority, assured water supply rules, groundwater management provisions, and Central Arizona Project/replenishment district statutes. It creates a new pathway for converting agricultural groundwater use rights into development-supporting water credits, modifies ADWR’s review standards, and changes the obligations of municipalities, developers, water providers, and the multi-county water conservation district. It also establishes a delayed repeal of the new credit statute in 2035, while preserving a framework for continued rulemaking and possible extension.
Overall sentiment in the legislative process appears generally supportive but not unanimous. The bill passed the Senate Natural Resources Committee on a 4-3 vote, advanced through the Senate 26-4, and passed the House 35-20, suggesting meaningful bipartisan support but also significant opposition. The final enactment indicates the measure was ultimately approved by both chambers and signed by the governor.
The main points of contention appear to center on water supply policy, local control, and the effect on the Central Arizona Water Conservation District’s replenishment obligations. The bill itself acknowledges that it will likely increase projected replenishment obligations, and it directs support for acquiring additional supplies to meet those obligations. Likely concerns include whether the program encourages development outside existing water constraints, whether it shifts costs or obligations onto the district and its members, and whether it limits municipal authority to impose landscaping or subdivision conditions in water-sensitive areas.
SB1611 amends Arizona’s municipal subdivision statutes, assured water supply laws, groundwater management provisions, and Central Arizona Water Conservation District replenishment rules. It creates a new statutory mechanism for converting permanently relinquished irrigation grandfathered rights into groundwater savings credits, authorizes those credits to support assured water supply applications and subdivision approvals, and exempts credit-backed groundwater from the physical availability test. It also restricts certain municipal landscaping and subdivision conditions in initial active management areas and sets a 2035 sunset for new credit issuance unless extended by ADWR.
The bill appears to have received mixed but ultimately sufficient support. It passed the Senate Natural Resources Committee by a narrow 4-3 vote, then cleared the Senate 26-4 and the House 35-20. Those margins suggest broad enough support to enact the measure, but also notable resistance, likely reflecting differing views on water conservation, development policy, and local regulatory authority.
The most notable contention is between proponents of a market-based water savings mechanism and critics concerned about development impacts and water management burdens. The bill expressly limits municipal authority over landscaping, turf, open space, and school-site requirements in certain subdivisions, which likely drew local-control objections. It also states that the act will likely increase the replenishment obligations of the multi-county water conservation district, raising concerns about costs, supply adequacy, and whether the program could facilitate growth without sufficient long-term water certainty.