A.R.S. tit. 45 | Title 45 — Waters

Chapter 1 Administration and General Provisions

Article 1 Department of Water Resources

§ 45-101 Definitions

In this title, unless the context otherwise requires:

"Appropriator" means the person or persons initiating or perfecting the right to use appropriable water based on state law, or the person's successor or successors in interest.
"Department" means the department of water resources.
"Director" means the director of water resources, who is also the director of the department.
"Effluent" means water that has been collected in a sanitary sewer for subsequent treatment in a facility that is regulated pursuant to title 49, chapter 2. Such water remains effluent until it acquires the characteristics of groundwater or surface water.
"Groundwater" means water under the surface of the earth regardless of the geologic structure in which it is standing or moving. Groundwater does not include water flowing in underground streams with ascertainable beds and banks.
"Interstate stream" means any stream constituting or flowing along the exterior boundaries of this state, and any tributary originating in another state or foreign country and flowing into or through this state.
"Riparian area" means a geographically delineated area with distinct resource values, that is characterized by deep-rooted plant species that depend on having roots in the water table or its capillary zone and that occurs within or adjacent to a natural perennial or intermittent stream channel or within or adjacent to a lake, pond or marsh bed maintained primarily by natural water sources. Riparian area does not include areas in or adjacent to ephemeral stream channels, artificially created stockponds, man-made storage reservoirs constructed primarily for conservation or regulatory storage, municipal and industrial ponds or man-made water transportation, distribution, off-stream storage and collection systems.
"Sanitary sewer" means any pipe or other enclosed conduit that carries, among other substances, any water-carried wastes from the human body from residences, commercial buildings, industrial plants or institutions.
"Surface water" means the waters of all sources, flowing in streams, canyons, ravines or other natural channels, or in definite underground channels, whether perennial or intermittent, floodwater, wastewater or surplus water, and of lakes, ponds and springs on the surface. For the purposes of administering this title, surface water is deemed to include central Arizona project water.

§ 45-102 Department of water resources; director; appointment; qualifications; compensation

A. There is established a department of water resources.

B. There shall be a director of the department who shall be responsible for the direction, operation and control of the department.

C. The director shall be appointed by the governor pursuant to section 38-211 and shall serve at the pleasure of the governor.

D. The director shall be experienced and competent in water resources management and conservation, and shall have proven administrative ability.

E. The director is entitled to receive compensation pursuant to section 38-611.

§ 45-103 Scope of authority and responsibility of department and director

A. The department, through the director, succeeds to the authority, powers, duties and responsibilities of the Arizona water commission and the state water engineer relating to surface water, groundwater and dams and reservoirs.

B. The director has general control and supervision of surface water, its appropriation and distribution, and of groundwater to the extent provided by this title, except distribution of water reserved to special officers appointed by courts under existing judgments or decrees.

§ 45-104 Department organization; deputy directors; employees; legal counsel; branch offices; consultants

A. The director may establish and organize divisions within the department and otherwise organize the department in the manner the director deems necessary to make the operation of the department efficient and effective.

B. The director may appoint a deputy director to each division or organizational unit that the director may establish. Subject to title 41, chapter 4, article 4, deputy directors shall serve at the pleasure of the director and are entitled to receive compensation pursuant to section 38-611.

C. Subject to title 41, chapter 4, article 4 and, as applicable, articles 5 and 6, the director may employ, define the duties of and prescribe the terms and conditions of employment of such clerical, technical, professional and administrative personnel as necessary to efficiently perform the responsibilities of the department. Compensation for all employees shall be pursuant to section 38-611.

D. The director may employ on a contract basis geologists, hydrologists, consulting engineers, other expert consultants and engineering and other assistants as the director deems advisable, who are not subject to the classification provided for in title 41, chapter 4, article 5.

E. The director may utilize the services of accounting, legal or engineering personnel made available by any department or agency of this state, who shall serve without additional compensation.

F. Subject to title 41, chapter 4, article 4, the director may employ legal counsel to advise and represent the department in connection with legal matters before other departments and agencies of this state, and represent the department and this state in litigation concerning affairs of the department. Legal counsel is not subject to the classification provided for in title 41, chapter 4, article 5.

G. The director shall maintain the director's office in Phoenix and may establish a branch office of the department in each active management area established pursuant to chapter 2, article 2 of this title.

H. The director on behalf of the department may contract with private consultants for the purposes of assisting the department in reviewing applications for licenses, permits or other authorizations to determine whether an applicant meets the criteria for issuance of the license, permit or other authorization. If the department contracts with a consultant under this subsection, an applicant may request that the department expedite the application review by requesting that the department use the services of the consultant and by agreeing to pay the department the costs of the consultant's services. Notwithstanding any other law, monies paid by applicants for expedited reviews pursuant to this subsection are appropriated to the department for use in paying consultants for services.

§ 45-105 Powers and duties of director

A. The director may:

Formulate plans and develop programs for the practical and economical development, management, conservation and use of surface water, groundwater and the watersheds in this state, including the management of water quantity and quality.
Investigate works, plans or proposals pertaining to surface water and groundwater, including management of watersheds, and acquire, preserve, publish and disseminate related information the director deems advisable.
Collect and investigate information on and prepare and devise means and plans for the development, conservation and use of all waterways, watersheds, surface water, groundwater and groundwater basins in this state and of all related matters and subjects, including irrigation, drainage, water quality maintenance, regulation of flow, diversion of running streams adapted for development in cooperating with the United States or by this state independently, flood control, use of water power, prevention of soil waste and storage, conservation and development of water for every useful purpose.
Measure, survey and investigate the water resources of this state and their potential development and cooperate and contract with agencies of the United States for such purposes.
Acquire, hold and dispose of property, including land, rights-of-way, water and water rights, as necessary or convenient for the performance of the groundwater and water quality management functions of the department.
Acquire, other than by condemnation, construct, improve, maintain and operate early warning systems for flood control purposes and works for the recovery, storage, treatment and delivery of water.
Accept grants, gifts or donations of money or other property from any source, which may be used for any purpose consistent with this title. All property acquired by the director is public property and is subject to the same tax exemptions, rights and privileges granted to municipalities, public agencies and other public entities.
Enter into an interagency contract or agreement with any public agency pursuant to title 11, chapter 7, article 3 and contract, act jointly or cooperate with any person to carry out the purposes of this title.
Prosecute and defend all rights, claims and privileges of this state respecting interstate streams.
Initiate and participate in conferences, conventions or hearings, including congressional hearings, court hearings or hearings of other competent judicial or quasi-judicial departments, agencies or organizations, and negotiate and cooperate with agencies of the United States or of any state or government and represent this state concerning matters within the department's jurisdiction.
Apply for and hold permits and licenses from the United States or any agency of the United States for reservoirs, dam sites and rights-of-way.
Receive and review all reports, proposed contracts and agreements from and with the United States or any agencies, other states or governments or their representatives and recommend to the governor and the legislature action to be taken on such reports, proposed contracts and agreements. The director shall take action on such reports, if authorized by law, and review and coordinate the preparation of formal comments of this state on both the preliminary and final reports relating to water resource development of the United States army corps of engineers, the United States secretary of the interior and the United States secretary of agriculture, as provided for in the flood control act of 1944 (58 Stat. 887; 33 United States Code section 701-1).
Contract with any person for imported water or for the acquisition of water rights or rights to withdraw, divert or use surface water or groundwater as necessary for the performance of the groundwater management functions of the director prescribed by chapter 2 of this title. If water becomes available under any contract executed under this paragraph, the director may contract with any person for its delivery or exchange for any other water available.
Recommend to the administrative heads of agencies, boards and commissions of this state, and political subdivisions of this state, rules to promote and protect the rights and interests of this state and its inhabitants in any matter relating to the surface water and groundwater in this state.
Conduct feasibility studies and remedial investigations relating to groundwater quality and enter into contracts and cooperative agreements under section 104 of the comprehensive environmental response, compensation, and liability act of 1980 (P.L. 96-510) to conduct such studies and investigations.
Dispose informally by stipulation, agreed settlement, consent order or alternative means of dispute resolution, including arbitration, if the parties and director agree, or by default of any case in which a hearing before the director is required or allowed by law.
Cooperate and coordinate with the appropriate governmental entities in Mexico regarding water planning in areas near the border between Mexico and Arizona and for the exchange of relevant hydrological information.

B. The director shall:

Exercise and perform all powers and duties vested in or imposed on the department and adopt and issue rules necessary to carry out the purposes of this title.
Administer all laws relating to groundwater, as provided in this title.
Be responsible for the supervision and control of reservoirs and dams of this state and, when deemed necessary, conduct investigations to determine whether the existing or anticipated condition of any dam or reservoir in this state is or may become a menace to life and property.
Coordinate and confer with and may contract with:

(a) The Arizona power authority, the game and fish commission, the state land department, the Arizona outdoor recreation coordinating commission, the Arizona commerce authority, the department of health services, active management area water authorities or districts and political subdivisions of this state with respect to matters within their jurisdiction relating to surface water and groundwater and the development of state water plans.

(b) The department of environmental quality with respect to title 49, chapter 2 for its assistance in the development of state water plans.

(c) The department of environmental quality regarding water plans, water resource planning, water management, wells, water rights and permits, and other appropriate provisions of this title pertaining to remedial investigations, feasibility studies, site prioritization, selection of remedies and implementation of the water quality assurance revolving fund program pursuant to title 49, chapter 2, article 5.

(d) The department of environmental quality regarding coordination of databases that are necessary for activities conducted pursuant to title 49, chapter 2, article 5.

Cooperate with the Arizona power authority in the performance of the duties and functions of the authority.
Maintain a permanent public depository for existing and future records of stream flow, groundwater levels and water quality and other data relating to surface water and groundwater.
Maintain a public docket of all matters before the department that may be subject to judicial review pursuant to this title.
Investigate and take appropriate action on any complaints alleging withdrawals, diversions, impoundments or uses of surface water or groundwater that may violate this title or the rules adopted pursuant to this title.
Adopt an official seal for the authentication of records, orders, rules and other official documents and actions.
Provide staff support to the Arizona water protection fund commission established by chapter 12 of this title.
Exercise and perform all powers and duties invested in the chairperson of the Arizona water banking authority commission as prescribed by chapter 14 of this title.
Provide staff support to the Arizona water banking authority established by chapter 14 of this title.
In the year following each regular general election, present information to the committees with jurisdiction over water issues in the house of representatives and the senate. A written report is not required but the presentation shall include information concerning the following:

(a) The current status of the water supply in this state and any likely changes in that status.

(b) Issues of regional and local drought effects, short-term and long-term drought management efforts and the adequacy of drought preparation throughout the state.

(d) The current state of each active management area and the level of progress toward management goals in each active management area.

(e) Issues affecting management of the Colorado river and the reliability of this state's two million eight hundred thousand acre-foot allocation of Colorado river water, including the status of water supplies in and issues related to the Colorado river basin states and Mexico.

(f) The status of any pending or likely litigation regarding surface water adjudications or other water-related litigation and the potential impacts on this state's water supplies.

(g) The status of Indian water rights settlements and related negotiations that affect this state.

(h) Other matters related to the reliability of this state's water supplies, the responsibilities of the department and the adequacy of the department's and other entities' resources to meet this state's water management needs.

Not later than December 1, 2023 and on or before December 1 of each year thereafter, prepare and issue a water supply and demand assessment for at least six of the fifty-one groundwater basins established pursuant to section 45-403. The director shall ensure that a water supply and demand assessment is completed for all groundwater basins and initial active management areas at least once every five years. The director may contract with outside entities to perform some or all of the assessments and those outside entities shall be identified in the assessment.

§ 45-106 Limitation of powers

An agreement entered into between the director and the United States or a state or government involving a sovereign right or claim of this state is not effective unless approved by the legislature by concurrent resolution.

§ 45-107 Cooperation with the secretary of the interior of the United States

A. The director is authorized, for and on behalf of the state of Arizona, to consult, advise and cooperate with the secretary of the interior of the United States, as follows:

In the exercise of any authority conferred upon the secretary of the interior under the provisions of sections 4, 5 and 14 of the act commonly known as the Boulder Canyon project act (43 United States Code sections 617 through 617t), as contemplated and provided in section 16 of the Boulder Canyon project act.
In respect to the authority of the secretary of the interior to contract for the delivery of water of the main stream of the Colorado river for use within the state of Arizona.
In respect to all powers and duties of the secretary of the interior under the provisions of that certain contract between the United States of America, acting by Harold L. Ickes, secretary of the interior, and the state of Arizona, acting by the Colorado river commission, entered into on the 9th day of February, 1944, pursuant to chapter 46 of the 1939 session laws of Arizona, and approved by chapter 4 of the 1944 session laws of Arizona.
In respect to the exercise by the secretary of the interior of any authority relative to the water of the Colorado river conferred upon the secretary of the interior by the provisions of any legislation enacted by the Congress of the United States of America.
In respect to the development, negotiation and execution of interstate banking agreements in accordance with chapter 14 of this title.

B. The powers and duties of the director authorized by this section shall be limited and restricted to only that quantity of water which may be available for use in the state of Arizona, after the satisfaction of all existing contracts between the secretary of the interior and users in the state of Arizona for the delivery of water of the main stream of the Colorado river, and shall not extend to any such contracts, any amendments or supplements thereto, or to any federal statute enacted before June 21, 1962 pertaining to any federal reclamation project within the state of Arizona constructed and using water of the main stream of the Colorado river before June 21, 1962. Nothing shall be done under the authority of this section which will impair existing rights in the state of Arizona for the diversion and use of Colorado river water.

C. The privilege and right of individuals, irrigation districts, corporations, state departments, agencies, boards, commissions or political subdivisions of the state of Arizona to negotiate and directly contract with the secretary of the interior for the delivery of water of the main stream of the Colorado river for use within the state of Arizona and to negotiate and subcontract with the secretary of the interior and a multi-county water conservation district for the delivery of Colorado river water through the central Arizona project for use within the state of Arizona, and all rights under such contracts or subcontracts shall not be affected by the provisions of this section, except as provided in subsection D.

D. Individuals, irrigation districts, corporations, state departments, agencies, boards, commissions and political subdivisions of the state shall cooperate, confer with and obtain the advice of the director as to those negotiations, contracts and subcontracts described in subsection C that affect the allocation and use of main stream Colorado river water or the allocation and use of Colorado river water delivered through the central Arizona project. For a proposed contract or subcontract or a proposed amendment of a contract or subcontract that will result in a transfer of an allocation or entitlement of Colorado river water, including central Arizona project water, from a non-Indian Arizona contractor or subcontractor for a term of more than one year, the obligation to cooperate, confer with and obtain the advice of the director shall include the obligation to submit to the director for review the proposed contract or subcontract or the proposed amendment, and all related exhibits and agreements, prior to its execution by the contractor or subcontractor.

§ 45-107.01 Waiver of rights to return flow credits

Before the beginning of each accounting year on the Colorado river, the director may consider a request by the secretary of the interior or the secretary's designated representative to waive rights held by this state to return flow credits for Colorado river water to the extent that water is returned to the Colorado river pursuant to a permit issued to the secretary under section 45-547. The director may grant the request on an annual basis, on behalf of this state, if all of the following apply:

The secretary holds a permit issued under section 45-547.
The secretary will use the water added to the Colorado river as a portion of the national obligation to provide replacement water for the specific purposes of replacement of the reject stream from the Yuma desalting plant, and of any Wellton-Mohawk drainage water bypassed to the Santa Clara slough to satisfy the requirements of minute 242 of the international boundary and water commission for the United States and Mexico that was concluded pursuant to the Mexican water treaty of February 3, 1944.
The secretary expressly agrees that the waiver granted on behalf of this state under this section does not in any way limit or impair the rights of this state to Colorado river water except for the specific quantity of water in the specific year for which the waiver is granted.
No person in Arizona has applied for and obtained a permit under section 45-547 that would allow the return flow credit to be fully used to increase the beneficial use of water in this state. If other permits have been issued under section 45-547 that would allow the return flow credit to be partially used to increase the beneficial use of water in this state, the director may grant the secretary the waiver for only that amount of the return flow credit that will not be used to increase the beneficial use of water in this state.
The director finds that granting the waiver will not impair the rights of this state or any holder in this state of a water delivery contract entered into pursuant to section 5 of the Boulder Canyon project act of 1928 (45 stat. 1060; 43 United States Code section 617d) to Colorado river water.

§ 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 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 report to the state real estate commissioner and the city, town or county responsible for platting the subdivision.

C. 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. As an alternative to designation under subsection C 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:

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

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 of this section.

All of the following apply:

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

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

G. The state of Arizona and the director or department shall 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. For the purposes of this section, "adequate water supply" means both of the following:

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.
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.

§ 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. 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:

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.
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:

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

§ 45-108.02 Exemption from adequate water supply requirements for city, town or county based on substantial capital investment; application; criteria; expiration

A. If the director determines pursuant to section 45-108 that an adequate water supply does not exist for a proposed subdivision and the proposed subdivision is located in a city, town or county that requires a determination of adequate water supply by the director as a condition of approval of the plat pursuant to section 9-463.01, subsection J or O or section 11-823, subsection A, the subdivider may apply to the director for an exemption from the water adequacy requirement pursuant to this section on a form prescribed by the director within one year after the requirement first becomes effective. The director shall grant the exemption if the subdivider demonstrates to the satisfaction of the director that all of the following apply:

The subdivider has made substantial capital investment toward the construction of the proposed subdivision before the date the water adequacy requirement first became effective. For the purposes of this paragraph, substantial capital investment may include construction costs, site preparation costs, construction of off-site improvements and conversion or remodeling costs for existing structures, as well as planning and design costs associated with those items, but does not include the original cost of acquiring the property.
The subdivider was not aware of the proposed water adequacy requirement at the time the investment was made.
The proposed subdivision complied in all other respects with existing state laws as of the date the water adequacy requirement became effective.

B. If the director grants an exemption pursuant to subsection A of this section:

The exemption expires five years after the date the exemption is granted, unless before that date at least one parcel in the subdivision is sold to a bona fide purchaser or the director extends the exemption pursuant to paragraph 2 of this subsection.
The director may extend the period of the exemption for no more than two successive five-year periods if the subdivider applies for an extension before the exemption expires and demonstrates to the satisfaction of the director that the subdivider has made material progress in developing the subdivision, but that sales of parcels in the subdivision have been delayed for reasons outside the control of the subdivider.

C. If an exemption granted under this section expires, any public report issued for the subdivision by the state real estate commissioner pursuant to section 32-2183 expires and the subdivider shall not sell any lots in the subdivision unless both of the following apply:

The subdivider files with the state real estate commissioner a new notice of intention to subdivide lands pursuant to section 32-2181 and complies with section 32-2181, subsection F.
The state real estate commissioner issues a new public report for the subdivision pursuant to section 32-2183.

D. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

§ 45-108.03 Exemption from adequate water supply requirements for city, town or county based on an adequate water supply within twenty years; criteria; application

A. If a proposed subdivision is located in a city, town or county that requires an adequate water supply determination by the director as a condition of approval of the plat pursuant to section 9-463.01, subsection J or O or section 11-823, subsection A, the subdivider may apply to the director for an exemption from the requirement pursuant to this section on a form prescribed by the director. The director shall grant the exemption if the subdivider demonstrates to the satisfaction of the director that the subdivision will be served by a water supply project to which both of the following apply:

The subdivider has demonstrated financial capability pursuant to section 45-108, subsection I, but the water supply project will not be capable of serving the subdivision with sufficient water to meet its demands in a timely manner because of one of the following:

(a) The physical works for delivering water to the subdivision are not complete but are under construction and will be completed within twenty years.

(b) The subdivision will be served Colorado river water by a water provider that does not currently have the legal right to serve the water to the subdivision, but the water provider has an existing permanent contract for the Colorado river water and will have the legal right to serve the water to the subdivision within twenty years.

The subdivision will have an adequate water supply when the construction of the physical works is completed or the water supply is legally available to serve the subdivision, whichever applies, and the interim water supply that will serve the subdivision meets all of the criteria for an adequate water supply under section 45-108 except that the interim water supply will not be available for one hundred years.

B. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

§ 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:

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.
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.
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.

§ 45-108.05 Water supply definitions

The director shall post and maintain on the department’s website definitions of the following subdivision water supply terms that apply to areas outside of active management areas:

Adequate water supply.
Inadequate water supply.
Property served by a water provider currently designated as having an adequate water supply.
No water supply determination, which shall apply to properties that were subdivided prior to May 1, 1973 and for which there have been no plat changes after that date, properties that are exempt from the requirements of section 45-108 and properties that have not received a determination of adequate water supply or inadequate water supply and that are not served by a water provider currently designated as having an adequate water supply.

§ 45-108.06 Water provider water supply information; definitions

A. On or after January 1, 2009, at the request of any person, all cities, towns and private water companies outside of an active management area as established pursuant to chapter 2, article 2 of this title shall provide a written statement describing the water supply status of real property within the service area of that city, town or private water company based on the most recent determination of the director pursuant to section 45-108. The water supply status description provided by the city, town or private water company shall include the applicable director's water supply definition posted pursuant to section 45-108.05.

B. The written statement required in subsection A of this section shall be delivered by fax, electronic mail or United States mail as designated by the person requesting the information. The city, town or private water company shall deliver the written statement of water supply within three business days after receipt of the request.

C. For the purposes of this section, "city", "town", "private water company" and "service area" have the same meanings prescribed in section 45-402, but also include cities, towns and private water companies serving surface water and Colorado river water.

§ 45-109 Division of state into water districts; district water superintendent

A. The director shall divide the state into water districts with reference to drainage watersheds in order to secure the best protection to claimants to water and the most economical supervision by the state. Districts shall not be created until necessary but shall be created as the claims from the streams or supply of the state are determined.

B. The director shall appoint one water superintendent for each district, who is eligible to receive such compensation as the director fixes, which shall be paid by the water users of the district. Each superintendent shall keep an account of the time spent by the superintendent and assistants in performing their duties in each county, and present a verified copy of the account to the superior court of each county at the end of each month, whereupon the judge of the court shall order the account paid according to an equitable distribution of the amount among the water users. The superintendent may employ assistants whose compensation shall be fixed and paid in like manner as the superintendent.

§ 45-110 Duties of superintendent; injunctive relief of injured water user

A. The superintendent of each water district shall:

Divide the water of the sources of supply of his district among the several ditches and reservoirs taking water therefrom, and among the laterals and ditches according to the rights of each.
Shut and fasten the head gates of ditches, and regulate the controlling works of reservoirs in time of scarcity of water as is necessary by reason of the rights existing from the supply of his district.
Regulate the distribution of water among the users under a partnership ditch or reservoir in accordance with existing judgments or decrees where the rights have been determined.
As far as practicable, divide, regulate and control the use of waters in his district by closing head gates to prevent the waste of water or its use in excess of the volume to which the owner of the right is lawfully entitled.

B. When the superintendent regulates a head gate to a ditch or the controlling works of reservoirs, he shall attach to the head gate or controlling works a written notice, dated and signed, stating that the head gate or controlling works has been regulated by him and is wholly under his control, and the notice shall be legal notice to all parties interested in the division and distribution of the water of the ditch or reservoir.

C. Any person injured by such action by the superintendent may apply to the superior court for an injunction against the superintendent, but the injunction shall not be issued unless it appears that the superintendent has failed to carry into effect the order of the director or a judgment or decree of court determining existing rights to the use of the water.

§ 45-111 Annual report by director

On or before August 15 each year the director shall render to the governor and the legislature a full and true report of the department's operations under this title, including operations relating to dam safety, levee repairs and other flood control activities. The report shall include suggestions as to amending existing laws or enacting new legislation as the director deems necessary and such other information, suggestions and recommendations as the director considers of value to the public. The report shall be published and made available to the public on the department's website.

§ 45-112 Violations; classification; enforcement

A. A person is guilty of a class 2 misdemeanor who:

Knowingly and without authority opens, closes, changes or interferes with a lawfully established headgate, measuring device or water box.
Knowingly uses water or conducts into or through such person's ditch water lawfully denied such person by the water superintendent or other competent authority.
Without authority uses water to which another is entitled except for water taken through a registered well without knowledge that such water constitutes the subflow of a river or stream.
Without authority diverts water from a stream.
Knowingly wastes water to the detriment of another.
Diverts a stream to the injury or threatened injury of the lands of another.
Uses, stores or diverts water without or before the issuance of a permit to appropriate such waters.
Places or maintains an obstruction interfering with the use of works, or prevents convenient access thereto, when an appropriator of water has the lawful right of way for the storage, diversion or carriage of such water.

B. The possession or use of water when it has been lawfully denied by the water superintendent or other competent authority is prima facie evidence of the guilt of the person using it.

C. The water superintendent or the water superintendent's assistants, within the water superintendent's district, may arrest any person violating this section and deliver that person to the sheriff or other police officer within the county, and on delivery shall immediately make a complaint against that person before a justice of the peace. If no water superintendent has been appointed for a water district, any affected person within the district may make a complaint to the sheriff or other police officer within the county against a person who violates this section.

§ 45-113 Fees; refunds

A. Except as otherwise prescribed, the director shall establish by rule and shall collect reasonable fees to cover the costs of administrative services and expenses.

B. Except as otherwise prescribed, the director may establish by rule and collect fees for applications, certificates, licenses and permits relating to surface water, groundwater, water exchanges, wells, grandfathered rights, substitution of acres, adequate and assured water supply, groundwater oversupply and lakes and for inspections relating to dam safety.

C. If the director determines that a fee, including a fee collected pursuant to section 45-611, has been erroneously paid during the same fiscal year or during any prior fiscal year, the director shall make an administrative adjustment or a refund, without interest, from the agency fund in which the fee was originally deposited to the current holder of the right, application or registration for which the fee was paid.

D. This section does not apply to fees paid or payable under section 45-254 or section 45-255, subsection B.

E. Except as provided in subsection F of this section, the director shall deposit, pursuant to sections 35-146 and 35-147, the monies collected under this section in the water resources fund established by section 45-117.

F. The director shall deposit, pursuant to sections 35-146 and 35-147, the fees collected under this section relating to adequate and assured water supply pursuant to sections 45-108, 45-576 and 45-579 in the assured and adequate water supply administration fund established by section 45-580.

§ 45-114 Administrative proceedings; rehearing or review; judicial review

A. Administrative proceedings under this title are subject to title 41, chapter 6, article 10, except for administrative proceedings under section 45-476.01. If an administrative hearing is held before the director's decision, the administrative proceeding is a contested case under title 41, chapter 6, article 10. If an administrative hearing is not held before the director's decision, the director's decision is an appealable agency action under title 41, chapter 6, article 10. This subsection does not apply to a public hearing conducted under this title or to a decision of the director that is entered after a public hearing conducted under this title.

B. Except for a decision of the director under section 45-476.01, after service of a final decision of the director under this title, a party may file a motion for rehearing or review under section 41-1092.09 and may seek judicial review under title 12, chapter 7, article 6, except as provided in section 41-1092.08, subsection H. This subsection does not apply to a decision of the director that is entered after a public hearing conducted under this title.

C. A decision of the director that is entered after a public hearing conducted under this title is subject to rehearing or review and judicial review as provided in this subsection. A party is not required to file a motion for rehearing or review in order to exhaust administrative remedies and may seek judicial review of the director's final decision under title 12, chapter 7, article 6 as follows:

If a party files a motion for rehearing or review, the director's decision is not final for the purposes of judicial review until the director denies the motion or the director issues a decision after rehearing or review. A party shall file a motion for rehearing or review within thirty days after the publication or issuance of the director's findings and order as provided in sections 45-404, 45-414, 45-436, 45-571 and 45-576.03 or by rule. The director shall issue an order either granting or denying the motion within sixty days after the filing of the motion. The director's decision after rehearing or review is the director's final decision for the purposes of judicial review by the party who filed the motion for rehearing or review or by any other party.
If a motion for rehearing or review is not filed by any party, the director's decision is final for the purposes of judicial review by any party.

§ 45-115 Production and copying fund; use; account; nonreversion

A. The department of water resources production and copying fund is established consisting of monies paid to the department for publications produced by the department and for copies of department records. The department shall administer the fund. Monies in the fund are continuously appropriated and shall be used for expenses incurred by the department in producing and distributing publications of the department and for copying department records for the public.

B. The fund shall be a separate account on the books of the department. Monies remaining in the fund at the end of the fiscal year remain in the fund, except that any monies in excess of twenty thousand dollars at the end of the fiscal year revert to the water resources fund established by section 45-117.

§ 45-116 Publication and mailing fund; use; account; nonreversion

A. The department of water resources publication and mailing fund is established consisting of monies paid to the department for the publication and mailing of legal notices required by law. The department shall administer the fund. Monies in the fund are continuously appropriated and shall be used for expenses incurred by the department in publishing and mailing legal notices required by law.

§ 45-117 Water resources fund; purpose; monies held in trust

A. The water resources fund is established to be maintained in perpetuity consisting of:

Except as provided in section 45-113, subsection F, monies received pursuant to sections 45-113, 45-115, 45-116, 45-183, 45-273, 45-292, 45-411.01, 45-467, 45-476.01, 45-595, 45-612, 45-703, 45-871.01, 45-874.01, 45-1021, 45-1041, 45-1205, 45-1603 and 45-1605.
Monies appropriated by the legislature to the water resources fund.
Gifts, grants and donations to the fund from any public or private source.
Interest and other income received from investing monies in the fund.

B. Monies in the fund are subject to legislative appropriation. Monies remaining in the fund at the end of the fiscal year remain in the fund and are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

C. Monies in the fund shall be used exclusively by the department of water resources to carry out the purposes of this title and shall not be appropriated for any other purpose.

D. The director shall administer the fund. On notice from the director, the state treasurer shall invest and divest the monies in the fund as provided by section 35-313 and monies earned from investment shall be credited to the fund.

E. Any fee, assessment or other levy that is authorized by law or administrative rule and that is collected and deposited in the water resources fund shall be held in trust. The monies in the fund may be used only for the purposes prescribed by statute and shall not be appropriated or transferred by the legislature to fund the general operations of this state or to otherwise meet the obligations of the general fund of this state. This subsection does not apply to any taxes or other levies that are imposed pursuant to title 42 or 43.

§ 45-118 Arizona system conservation fund; purpose; report

(Rpld. 4/1/27)

A. The Arizona system conservation fund is established consisting of legislative appropriations, grants and contributions from private and public entities. The director shall administer the fund. Monies in the fund are continuously appropriated for the purposes of this section. The director may spend monies from the fund to contract with Colorado River water users in this state that hold entitlements to Colorado River water under the decree in Arizona v. California to forgo water deliveries or diversions for the purpose of creating system conservation. Contracts entered into pursuant to this section are exempt from title 41, chapter 23.

B. System conservation created through the use of the fund shall provide for Colorado River water to be conserved in Lake Mead through a verified reduction in existing consumptive use in order to decrease the likelihood of lake elevations dropping to levels that could result in reductions to this state's Colorado River allocation. System conservation must be created for the benefit of the Colorado River system and not for the benefit of any individual Colorado River water user.

C. On notice from the director, the state treasurer shall invest and divest monies earned as provided by section 35-313, and monies earned from investment shall be credited to the fund. Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

D. Beginning July 1, 2021 and on July 1 each year thereafter, the director shall submit a detailed report to the governor, the president of the senate and the speaker of the house of representatives and provide a copy of this report to the secretary of state. The report shall describe the expenditures made from the fund during the previous fiscal year and the volume of water that was conserved in Lake Mead.

§ 45-119 Colorado River litigation fund

A. The Colorado River litigation fund is established consisting of legislative appropriations. The department shall administer the fund. Monies in the fund are continuously appropriated and are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

B. Monies in the fund shall be used by the department for the sole purpose of initiating, defending or participating in litigation related to this state's apportionment of Colorado River water or any other rights of this state regarding Colorado River water under the Colorado River compact of 1922, Boulder Canyon project act of 1928, Colorado River decree of 1964, Colorado River basin project act of 1968 or any other federal law that affects this state's apportionment of Colorado river water or the right to divert water controlled by the United States or to exercise this state's entitlement to water.

C. On notice from the director, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.

D. Notwithstanding subsection B of this section, monies in the fund may not be used by the department for the purpose of initiating litigation against any entity that holds an entitlement to this state's apportionment of Colorado River water.

Article 3 Bodies of Water

§ 45-131 Definitions

In this article, unless the context otherwise requires:

"Body of water" means a body of water in an active management area established under chapter 2 of this title, including a lake, pond, lagoon or swimming pool, that has a surface area greater than twelve thousand three hundred twenty square feet and that is filled or refilled for landscape, scenic or recreational purposes. A body of water that is used incidentally for landscape, scenic or recreational purposes is deemed not to be filled or refilled for landscape, scenic or recreational purposes. Only for the purpose of determining the surface area of a body of water, two or more bodies of water that are connected are considered to be one body of water.
"Swimming pool" means an artifically constructed pool for swimming purposes that meets the applicable design standards and specifications for swimming pools prescribed by the director of environmental quality pursuant to section 49-104, subsection B, paragraph 12.

§ 45-132 Filling large bodies of water for landscape, scenic or recreational purposes prohibited; exceptions; preemption

A. Except as provided in subsection B of this section, in an active management area established under chapter 2 of this title, a person shall not use any water for the purpose of filling or refilling all or a portion of a body of water.

B. This section does not apply to a body of water if any of the following applies:

The body of water was filled before January 1, 1987. If the surface area of the body of water is increased on or after January 1, 1987, this exception does not apply to the quantity of water that is added.
The director has determined that substantial capital investment has been made in the physical on-site construction of the body of water before January 1, 1987. If the surface area of the body of water is increased after it is initially filled, this exception does not apply to the quantity of water that is added.
The body of water is located in a recreational facility that is open to the public and owned or operated by the United States, this state, a city, town or county, a flood control district established under title 48, chapter 21 or a multi-county water conservation district established under title 48, chapter 22.
The body of water is filled and refilled exclusively with any one or any combination of the following:

(a) Effluent.

(b) Storm water runoff that is not subject to appropriation under section 45-141.

(d) Groundwater withdrawn pursuant to a drainage water withdrawal permit issued under section 45-519.

(e) Groundwater withdrawn in the first year of a temporary dewatering permit issued under section 45-518.

(f) Groundwater withdrawn as part of a remedial action under title 49, chapter 2, article 5, including mitigation of a nonhazardous release undertaken pursuant to an order issued by the department of environmental quality pursuant to section 49-286.

(g) Water used pursuant to a permit for interim water use issued under section 45-133.

(h) Surface water except central Arizona project water that, as determined by the director, physically occurs at such times, in such quantities or under such other circumstances that it cannot be physically captured and beneficially used by any other holder of an appropriative right.

The body of water is an integral part of a golf course that complies with any applicable conservation requirements in the management plan for the active management area adopted under chapter 2, article 9 of this title.
The body of water is unsealed and is an integral part of an underground storage facility for which the director has issued a permit under chapter 3.1 of this title.
The body of water is a swimming pool that is owned and operated by a hotel, motel, country club or resort and has a surface area equal to or less than forty-three thousand five hundred sixty square feet. If a hotel, motel, country club or resort has more than one swimming pool, only one of those swimming pools may have a surface area greater than twelve thousand three hundred twenty square feet.

C. A person who seeks to use poor quality groundwater to fill or refill all or a portion of a body of water shall apply to the director for a permit to use the groundwater for that purpose. The director may issue a permit if the applicant demonstrates that all of the following apply:

The applicant otherwise has a right to use the proposed source of groundwater for the proposed purpose.
The groundwater because of its poor quality cannot be used for another beneficial purpose at the present time and it is not economically feasible to treat and transport the groundwater and use it for another beneficial purpose.
The withdrawal of the groundwater is consistent with the management plan and achievement of the management goal for the active management area.

D. A permit issued pursuant to subsection C of this section may be issued for a period of up to thirty-five years. The director shall determine the duration of the permit on the basis of the estimated life of the source of poor quality groundwater and the potential for future beneficial use. The director shall monitor the use of groundwater pursuant to the permit and shall terminate the permit if any of the conditions for issuance of the permit no longer applies. A permit may be renewed subject to the same criteria used in granting the original permit.

E. This section preempts all municipal and county laws, charters, ordinances, rules and regulations relating to the use of any water to fill or refill all or a portion of a body of water, except that this section does not preempt a law, charter, ordinance, rule or regulation that has previously been adopted, passed or enacted or is subsequently adopted, passed or enacted if the law, charter, ordinance, rule or regulation is more restrictive than this section.

§ 45-133 Permit for interim water use; application; fee; surcharge on use of groundwater

A. A person otherwise subject to the prohibitions of section 45-132 may use groundwater withdrawn pursuant to a type 1 or type 2 non-irrigation grandfathered right or water other than groundwater to fill or refill all or a portion of a body of water until sufficient effluent is available to fill or refill the body of water if the person applies for and obtains a permit for interim water use from the director. The director may issue a permit if the applicant demonstrates to the satisfaction of the director that all of the following apply:

The applicant otherwise has a right to use the water for the proposed purpose.
Sufficient effluent to fill or refill the body of water is not reasonably available but it has been demonstrated by clear and convincing evidence that sufficient effluent will be available no later than five years from the date the permit is issued.
The applicant has:

(a) Provided the necessary easements for an on-site treatment facility or access to an off-site treatment facility and for transportation of a permanent effluent supply to the body of water.

(b) Provided the site location for the facility and received approval for the facility from the department of environmental quality, if an on-site treatment facility will be used.

(c) Recorded the easements and any site location for an on-site treatment facility on the plat of record for the subdivision or development within which the body of water is located.

The body of water will store effluent that will be applied to grow landscaping plants on common areas or will be used for other beneficial purposes that would otherwise require use of surface water or groundwater.
The development or facility in which the body of water is located will include an effective water conservation program. The specific conservation requirements in the water conservation program shall be consistent with and shall not by this paragraph be required to be more strict than any specific conservation requirements in the applicable management plan.
The body of water otherwise complies with this article.

B. The director may issue a permit under this section for a period of up to three years. The director shall specify the amount of water that may be used each year pursuant to the permit. The director shall determine the duration of the permit and the amount of water that may be used pursuant to the permit on the basis of the estimated time until sufficient effluent will be available to fill and refill the body of water. The director shall monitor the use of water pursuant to the permit and shall modify the terms of the permit as necessary and terminate the permit if any of the conditions for issuance of the permit no longer apply. The director may renew a permit for no more than two successive one-year periods subject to the same criteria used in granting the original permit.

C. An application for a permit under this section shall be made on a form prescribed and furnished by the director. The director shall levy and collect a reasonable application fee to cover the costs of administrative services and expenses, which shall be remitted to the augmentation and conservation assistance fund described in section 45-615, paragraph 1.

D. The director shall levy and collect an annual surcharge from each holder of a permit for interim groundwater use. The amount of the surcharge shall be as follows:

For the first year following issuance of the permit, twenty-five dollars per acre-foot of groundwater withdrawn pursuant to the permit.
For the second year following issuance of the permit, fifty dollars per acre-foot of groundwater withdrawn pursuant to the permit.
For the third year following issuance of the permit, one hundred dollars per acre-foot of groundwater withdrawn pursuant to the permit.
For the fourth year following issuance of the permit, two hundred dollars per acre-foot of groundwater withdrawn pursuant to the permit.
For the fifth year following issuance of the permit, four hundred dollars per acre-foot of groundwater withdrawn pursuant to the permit.

E. All monies collected pursuant to subsection D of this section shall be remitted as follows:

Fifty per cent to the augmentation and conservation assistance fund described in section 45-615, paragraph 1, or if a water district is organized in the active management area under title 48, chapter 28, to the general fund of the district.
Fifty per cent to the purchase and retirement fund described in section 45-615, paragraph 2.

F. If the holder of a permit for interim groundwater use fails to pay the surcharge levied pursuant to subsection D of this section by the date set by the director, the director shall revoke the permit.

§ 45-134 Temporary emergency permit for use of surface water or groundwater in body of water

A. The director may issue a temporary, emergency permit authorizing the use of surface water or groundwater in a body of water that is exempt under section 45-132, subsection B, paragraph 4 and that is filled or refilled primarily with effluent if the director determines that:

The director of environmental quality has determined that all of the following apply:

(a) An emergency exists because the condition of the body of water is a threat to the public health or welfare.

(b) There is a reasonable probability that the temporary use of surface water or groundwater in the body of water will significantly reduce the threat to the public health or welfare.

(c) Actions other than the temporary use of surface water or groundwater would not significantly reduce the threat or are unreasonable under the circumstances.

The owner or operator of the body of water otherwise has a right to use surface water or groundwater for the proposed purpose.
If a temporary emergency permit has previously been issued for the body of water, the owner or operator of the body of water has undertaken reasonable measures to prevent the condition of the body of water from again becoming a threat to the public health or welfare.

B. The director may issue a permit under this section for a period of up to thirty days. The director shall specify any conditions on the use of water pursuant to the permit the director determines are necessary. The director shall monitor the use of water pursuant to the permit and shall terminate the permit if the conditions for issuance of the permit no longer apply.

§ 45-135 Inspections; investigations

A. The director or the director's authorized representative may enter at reasonable times on private or public property where a body of water is located, and the owner, manager or occupant of the property shall permit such entry, to:

Inspect the body of water.
Ascertain compliance with this article.

B. Inspections and investigations under this section shall be on reasonable notice to the owner, manager or occupant of the property unless reasonable grounds exist to believe that the notice would frustrate the enforcement of this article. The director shall adopt rules for conducting inspections and obtaining warrants under this section. The director may apply for and obtain warrants. If warrants are required by law, the director shall apply for and obtain warrants for entry and inspection to carry out the administrative and enforcement purposes of this article.

C. The director shall provide a written report of each inspection and investigation under this section to the person subject to such action.

§ 45-136 Cease and desist order; temporary cease and desist order; hearings; injunctive relief

A. Except as provided by subsection B of this section, if the director has reason to believe that a person is violating or has violated any provision of this article, a permit or order issued pursuant to this article or a rule adopted to carry out the purposes of this article, the director may give the person written notice that the person may appear and show cause at an administrative hearing not less than thirty days after the date of service of the notice why the person should not be ordered to cease and desist from the violation. The notice shall inform the person of the date, time and place of the hearing and the consequences of failure to appear.

B. If the director finds that a person is filling or refilling all or a portion of a body of water in violation of any provision of this article, a permit or order issued pursuant to this article or a rule adopted to carry out the purposes of this article, the director may issue a temporary order for the person to cease and desist the filling or refilling pending final action by the director pursuant to subsection C of this section. The order shall include written notice to the person of the date, time and place where the person may appear at an administrative hearing to show cause why the temporary order should be vacated. The hearing shall be held within fifteen days of the date of the order unless the person consents to a longer period.

C. The decision and order of the director under subsections A and B of this section may take such form as the director determines to be reasonable and appropriate and may include a determination of violation, a cease and desist order, the recommendation of a civil penalty and an order directing that positive steps be taken to abate or ameliorate any harm or damage arising from the violation. The person affected may seek judicial review of the final decision of the director as provided in section 45-114, subsection B in the superior court in the county in which the violation is alleged to have occurred.

D. If the person continues the violation after the director has issued a final decision and order pursuant to subsection C of this section or a temporary order pursuant to subsection B of this section, the director may apply for a temporary restraining order or preliminary or permanent injunction from the superior court according to the Arizona rules of civil procedure. A decision to seek injunctive relief does not preclude other forms of relief or enforcement against the violator.

E. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

§ 45-137 Civil penalties

A. A person who is determined pursuant to section 45-136 to be in violation of any provision of this article, a permit or order issued pursuant to this article or a rule adopted to carry out the purpose of this article may be assessed a civil penalty in an amount not exceeding:

One hundred dollars per day of violation not directly related to the illegal filling or refilling of all or a portion of a body of water.
Ten thousand dollars per day of violation directly related to the illegal filling or refilling of all or a portion of a body of water.

B. An action to recover penalties under this section shall be brought by the director in the superior court in the county in which the violation occurred.

C. In determining the amount of the penalty, the court shall consider the degree of harm to the public, whether the violation was knowing or wilful, the past conduct of the defendant, whether the defendant should have been on notice of the violation, whether the defendant has taken steps to cease, remove or mitigate the violation and any other relevant information.

§ 45-138 Burden of proof

A person who claims in a hearing held pursuant to section 45-136 or in a civil action that he is not violating or has not violated any provision of this article, a permit or order issued pursuant to this article or a rule adopted to carry out the purpose of this article on the ground that he qualifies for an exemption under section 45-132, subsection B, paragraph 4 has the burden of proving that he qualifies for the exemption.

§ 45-139 Violation; classification

A. Unless otherwise specified, a person who knowingly violates or refuses to comply with any provision of this article, a permit or order issued pursuant to this article or a rule adopted to carry out the purpose of this article is guilty of a class 2 misdemeanor. A person who, after notice of violation, continues in violation of any provision of this article, a permit or order issued pursuant to this article or a rule adopted to carry out the purpose of this article is guilty of a separate offense for each day of violation.

B. A person who knowingly and intentionally fills or refills all or a portion of a body of water in violation of this article is guilty of:

A class 6 felony if the amount of water illegally used is one thousand acre-feet or more.
A class 1 misdemeanor if the amount of water illegally used is more than one hundred acre-feet but less than one thousand acre-feet.
A class 3 misdemeanor if the amount of water illegally used is one hundred acre-feet or less.

§ 45-139.01 Notice of source of water used to fill or refill body of water

A person who, after December 31, 1986, begins the physical on-site construction of a body of water located in a subdivision as defined in section 32-2101 and which will be filled or refilled with a source of water identified in section 45-132, subsection B, paragraph 4, shall:

Make written disclosure to prospective purchasers of property within the subdivision of the source of water to be used to fill or refill the body of water, the legal basis for access to the source of water and the duration of any permit or contract under which the source of water is obtained. If a public report for the subdivision is issued under section 32-2183, the disclosure may be made in the public report.
Include in the agreement or contract for the purchase of property within the subdivision a provision stating the source of water to be used to fill or refill the body of water and have the purchaser of the property acknowledge this provision by signing or initialing the provision.

§ 45-139.02 Effect on legal status of effluent

Nothing in this article shall be construed to determine the legal status of effluent.

Article 4 Public Nature and Use of Surface Water

§ 45-141 Public nature of waters of the state; beneficial use; reversion to state; actions not constituting abandonment or forfeiture

A. The waters of all sources, flowing in streams, canyons, ravines or other natural channels, or in definite underground channels, whether perennial or intermittent, flood, waste or surplus water, and of lakes, ponds and springs on the surface, belong to the public and are subject to appropriation and beneficial use as provided in this chapter.

B. Beneficial use shall be the basis, measure and limit to the use of water.

C. Except as otherwise provided in this title or in title 48, when the owner of a right to the use of water ceases or fails to use the water appropriated for five successive years, the right to the use shall cease, and the water shall revert to the public and shall again be subject to appropriation.

D. Underground water storage, pursuant to chapter 3.1 of this title, for future beneficial use of waters appropriated pursuant to this chapter does not constitute an abandonment or forfeiture.

E. The following water exchange arrangements or substitutions do not constitute an abandonment or forfeiture of all or any portion of a right to use surface water:

Exchanging surface water for groundwater, effluent, Colorado river water, including water delivered through the central Arizona project, or another source of surface water pursuant to chapter 4 of this title.
Substituting groundwater, effluent, Colorado river water, including water delivered through the central Arizona project, or another source of surface water for surface water.

F. Conservation of water pursuant to a water conservation plan notice filed with the director as prescribed by section 45-189.01 does not constitute an abandonment or forfeiture of the water conserved.

Article 5 Appropriation of Water

§ 45-151 Right of appropriation; permitted uses; water rights in stockponds

A. Any person, the state of Arizona or a political subdivision thereof may appropriate unappropriated water for domestic, municipal, irrigation, stock watering, water power, recreation, wildlife, including fish, nonrecoverable water storage pursuant to section 45-833.01 or mining uses, for his personal use or for delivery to consumers. The person, the state of Arizona or a political subdivision thereof first appropriating the water shall have the better right.

B. To effect the beneficial use, the person, the state of Arizona or a political subdivision thereof appropriating the water may construct and maintain reservoirs, storage facilities pursuant to chapter 3.1 of this title, dams, canals, ditches, flumes and other necessary waterways.

C. A water right in a stockpond, certified pursuant to article 10 of this chapter, shall be recognized as if such water had been appropriated pursuant to this article.

§ 45-152 Application for permit to appropriate water

A. Any person, including the United States, the state or a municipality, intending to acquire the right to the beneficial use of water, shall make an application to the director of water resources for a permit to make an appropriation of the water. The application shall state:

The name and address of the applicant.
The water supply from which the appropriation is applied for.
The nature and amount of the proposed use.
The location, point of diversion and description of the proposed works by which the water is to be put to beneficial use.
The time within which it is proposed to begin construction of such works and the time required for completion of the construction and the application of the water to the proposed use.

B. The application also shall set forth:

If for agricultural purposes, the legal subdivisions of the land and the acreage to be irrigated.
If for power purposes, the nature of the works by which power is to be developed, the pressure head and amount of water to be utilized, the points of diversion and release of the water and the uses to which the power is to be applied.
If for the construction of a reservoir, the dimensions and description of the dam, the capacity of the reservoir for each foot in depth, the description of the land to be submerged and the uses to be made of the impounded waters.
If for municipal uses, the population to be served, and an estimate of the future population requirements.
If for mining purposes, the location and character of the mines to be served and the methods of supplying and utilizing the waters.
If for recreation or wildlife, including fish, the location and the character of the area to be used and the specific purposes for which such area shall be used.

C. The application shall be accompanied by maps, drawings and data prescribed by the director.

§ 45-152.01 Instream flow applications; process; definition

A. In addition to the information prescribed in section 45-152, any person, including the United States, this state or a municipality, who files an instream flow application after the effective date of this section shall comply with the following:

The applicant shall submit at least five years of streamflow measurement data to support the proposed beneficial use which shall be submitted at the time the application is filed. The director shall not accept for filing an instream flow application that is not accompanied by at least five years of continuous streamflow measurement data. The streamflow data submitted shall consist of gauged on-site measurements of available water flow from the area in which the claimed beneficial use occurs.
The instream flow application shall describe the proposed beneficial use and shall specify both of the following:

(a) The amount of streamflow required for the proposed beneficial use.

(b) The availability of the requested flows during claimed periods of beneficial use.

B. Applications that are submitted after the effective date of this section shall be rejected if the application does not comply with this section.

C. For the purposes of this section, "instream flow application" means an application for a permit to make an appropriation of water for purposes of recreation or wildlife, including fish, in a specific stream reach without diverting the water from the stream.

§ 45-153 Criteria for approval or rejection of applications; restrictions on approval

A. The director shall approve applications made in proper form for the appropriation of water for a beneficial use, but when the application or the proposed use conflicts with vested rights, is a menace to public safety, or is against the interests and welfare of the public, the application shall be rejected. An administrative hearing may be held before the director's decision on the application if the director deems a hearing necessary.

B. An application may be approved for less water than applied for if substantial reasons exist but shall not be approved for more water than may be put to a beneficial use. Applications for municipal uses may be approved to the exclusion of all subsequent appropriations if the estimated needs of the municipality so demand after consideration by and upon order of the director.

C. If the director approves an application for the appropriation of water for use on land owned by the state of Arizona, a permit or certificate shall be issued as prescribed by section 37-321.01.

D. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

§ 45-154 Correction of defective application

Upon receipt of the application, the director shall endorse on the application the date of its receipt and keep a record of applications received. If the application is defective it shall be returned for correction or completion, with the date of and reasons for returning it endorsed on the application and a record made of applications returned. The application shall not lose priority of filing because of defects if the application is corrected, completed and refiled with the director within sixty days after its return to the applicant, or within such further time as the director may, by an order of record, allow. Applications shall be recorded in a book kept for that purpose.

§ 45-155 Requiring additional information on application

A. Before approving or rejecting the application, the director may require additional information to enable it to protect properly the public interest and may, on applications proposing to divert more than ten cubic feet of water per second, require a statement of the following facts:

If a corporation, a copy of the articles of incorporation, the names and residences of directors and officers and the amount of its authorized and paid-up capital.
If not a corporation, the name of the party proposing to construct the works and a disclosure of the party's financial ability to complete the proposed work.

B. The director may also require the applicant to show that the proposed diversion of water will not conflict with vested rights.

§ 45-156 Legislative authorization for appropriation of water to generate power

A. An application for appropriation of waters of a stream within the state for generating electric energy in excess of twenty-five thousand horsepower, or an application for a permit to build a dam for generating hydroelectric energy on a stream within the state in excess of twenty-five thousand horsepower, shall not be approved or granted unless authorized by an act of the legislature.

B. Except as otherwise prescribed by this section, a change in the use of water appropriated for domestic, municipal or irrigation uses shall not be made without approval of the director, and if the change contemplates generating hydroelectric energy or power of over twenty-five thousand horsepower, approval shall not be granted unless authorized by an act of the legislature.

C. The provisions of subsections A and B of this section requiring legislative authorization for the appropriation or use of water to generate electric energy in excess of twenty-five thousand horsepower and for the building of a dam for generating hydroelectric energy in excess of twenty-five thousand horsepower shall not apply to the generation of electricity by facilities constructed prior to January 1, 1985 as part of a federally authorized reclamation project or by an agricultural improvement district organized pursuant to title 48, chapter 17.

D. Subsection C of this section shall not affect the priority dates for facilities constructed prior to January 1, 1985, or the following components and appurtenant works:

New Waddell dam.
Cliff dam.
Increase in storage capacity of Roosevelt dam.
Modification of Stewart mountain dam.

§ 45-157 Relative value of uses

A. As between two or more pending conflicting applications for the use of water from a given water supply, when the capacity of the supply is not sufficient for all applications, preference shall be given by the director according to the relative values to the public of the proposed use.

B. The relative values to the public for the purposes of this section shall be:

Domestic and municipal uses. Domestic uses shall include gardens not exceeding one-half acre to each family.
Irrigation and stock watering.
Power and mining uses.
Recreation and wildlife, including fish.
Nonrecoverable water storage pursuant to section 45-833.01.

§ 45-158 Effect of approval or rejection of application

The approval or rejection of an application for the appropriation of water shall be endorsed on the application, a record of the action kept by the director, and the application returned immediately to the applicant. If approved, the applicant may construct the necessary works, take steps to apply the water to a beneficial use and perfect the appropriation. If the application is rejected, the applicant shall take no steps toward construction of the proposed work or diversion of the water.

§ 45-159 Conditions of acceptance of permit

An applicant accepts a permit to appropriate water upon the condition that no value in excess of the amount paid to the state shall be claimed for the permit or for the rights so acquired when a public authority is regulating or fixing the rate or charges of the services to be rendered by the permittee, his successors or assigns, or when the state, county, city, town, municipal water or irrigation district, or any political subdivision of the state, is seeking to acquire the rights and property of the permittee, his successors or assigns.

§ 45-160 Limitation on time of completion of construction; exception

Actual construction, except under applications by a city or town for municipal uses, shall begin within two years after approval of the application, and shall be prosecuted with reasonable diligence and completed within a reasonable time which shall be fixed in the permit at not to exceed five years from the date of approval. The director shall, for good cause shown, extend the time beyond the five-year period if the magnitude, physical difficulties and cost of the work justify extension.

§ 45-161 Applications for reservoir permits; secondary permits for water

A. Applications for reservoir permits shall be governed by this article, except that the lands proposed to be irrigated from the works need not be enumerated in the primary permit.

B. The person proposing to develop the supply of water or to complete the necessary works shall file an application for a primary permit that sets forth the plans and specifications for construction of the reservoir and associated diversion or delivery works, if any. On completion of construction or development of the supply of water, the holder of the primary permit shall file a notice of completion with the director.

C. The person proposing to apply to a beneficial use the water stored in such reservoir shall file an application for a secondary permit, which shall refer to the reservoir as the supply of water and shall show that a written agreement has been entered into with the owners of the reservoir for a permanent interest in the reservoir sufficient for the purposes set forth in the application. When the beneficial use has been perfected under the secondary permit, the director shall issue to the holder of the secondary permit a final certificate of appropriation that describes both the conduit described in the secondary permit and the reservoir described in the primary permit.

D. If the development of the supply of water and the completion of the proposed works are to be undertaken by the same person proposing to apply the water to a beneficial use, the person shall file a single application for a reservoir permit. In processing an application filed pursuant to this subsection, the director shall not issue separate primary and secondary permits but shall issue a single reservoir permit for the development of the supply of water, construction of the proposed works and application of the water to a beneficial use. When the beneficial use has been perfected under the reservoir permit, the director shall issue to the holder of the reservoir permit a final certificate of appropriation that describes both the conduit and the reservoir described in the reservoir permit.

E. If at any time it appears to the director, after an administrative hearing, that the holder of the primary permit will not or cannot within a reasonable period develop the supply of water or complete the works, the director may, upon application of the holder of the secondary permit, permit such holder joint occupancy and use under the primary permit with the holder of the primary permit to the extent deemed advisable by the director, but such applicant shall pay to the holder of the primary permit a pro rata portion of the total cost of the works, which shall be based on the proportion of water used by the original and the additional users of such works.

F. Nothing in this section or in section 45-257, subsection B, paragraph 1, shall be construed as modifying the law of priority or the requirement of section 45-141, subsection B, that beneficial use shall be the basis, measure and limit to the use of water.

G. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

§ 45-162 Certificate of water right; time limitation on use of water for power purposes

A. When it appears to the satisfaction of the director that an appropriation has been perfected and a beneficial use completed in accordance with the provisions of this article, the director shall issue to the applicant a certificate signed by the director and attested by the seal of the department. The certificate shall set forth the name and address of the owner of the right, the priority of date and the extent and purpose of the right and, if the water is for irrigation purposes, a description of the legal subdivisions of land to which the water is appurtenant. On receiving the certificate, the owner may transmit the certificate and the recording fee to the county recorder of the county in which such right is located, who shall record the certificate in a book kept for that purpose and immediately transmit the certificate to the owner.

B. Certificates for rights to the use of water for power development shall limit the right or franchise to a period of forty years from the date of application, subject to a preferred right of renewal under the laws existing at the date of expiration of the franchise or right. The right acquired by the appropriation shall date from filing the application with the director.

§ 45-163 Assignments

Applications, permits and certificates of water right filed or issued pursuant to this chapter and statements of claim filed pursuant to article 7 of this chapter may be assigned.

§ 45-164 Registry; reporting

A. The director shall establish and maintain a registry of applications, permits and certificates of water right filed or issued pursuant to this chapter and statements of claim filed pursuant to article 7 of this chapter.

B. A person who has filed an application or a statement of claim or a person to whom the director has issued a permit or a certificate of water right shall notify the director of a change in name or mailing address or an assignment pursuant to section 45-163. A person to whom an application, permit, certificate of water right or statement of claim is assigned shall notify the director of the assignment and shall furnish information as required by the director to keep the registry current and accurate. The director shall have continuing jurisdiction and shall issue revised permits and certificates as necessary.

C. If an appropriator of water filed an application for a permit to appropriate water pursuant to this article or an application for certification under article 10 of this chapter but the permit or certificate was issued or subsequently reissued to the United States or the state of Arizona, an appropriator of water may file a written application with the department to request that a permit or certificate be reissued in accordance with section 37-321.01, subsection A. Within thirty days after receiving the application, the department shall provide notice of the application to the state or federal agency that owns the land on which the water is used and, if applicable, to the owner of patented land from which the water is diverted or on which the water is stored. A person who is entitled to this notice from the department may file written objections to the application within forty-five days after the department mails the notice. If no timely objection is received by the department, the director shall approve or deny the application within ninety days from the date of filing of the application. If an objection is received, and on written request of either the applicant or the objector, an administrative hearing shall be held on the application and objections. If a request for a hearing is not received, the director shall grant or deny the relief sought in the application based upon the application and objections filed. A final decision of the director is subject to judicial review as provided in section 45-114, subsection B in the superior court in the county that has jurisdiction over the water right as part of a general adjudication conducted pursuant to article 9 of this chapter, or if the right is not subject to a general adjudication in the superior court pursuant to title 12, chapter 7, article 6. The form of the application and objection shall be prescribed by the director, but the department shall not charge a fee for processing an application.

D. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

§ 45-165 Application for interstate operations

Except as provided by article 11 of this chapter, an application for appropriation of water shall not be denied because the point of diversion of water described in the application or any portion of the works to be constructed for the purpose of storing, diverting or distributing water, or the place of intended use, or the lands to be irrigated by the water or part of such water, is located in another state.

§ 45-166 Approval for appropriation of waters for generating electric energy

A. The consumptive use of up to thirty-four thousand one hundred acre feet of water per year chargeable to the water apportioned to the state of Arizona under the provisions of article III, section (a) (1) of the upper Colorado river basin compact (act of April 6, 1949; 63 Stat. 31) for the operation of a thermal generating plant to be located in the state of Arizona and for the benefit of all of the participants in such thermal generating plant is hereby approved.

B. The phrase "for the operation of a thermal generating plant", as used in this section, shall include the use of water for thermal generation of electric energy and all other purposes necessary or related to the operation of the thermal generating plant, including but not limited to mining, coal transportation and ash disposal.

Article 6 Rights to Water

§ 45-171 Effect of chapter on vested water rights

Nothing in this chapter shall impair vested rights to the use of water, affect relative priorities to the use of water determined by a judgment or decree of a court, or impair the right to acquire property by the exercise of the right of eminent domain when conferred by law. The right to take and use water shall not be impaired or affected by the provisions of this chapter when appropriations have been initiated under and in compliance with prior existing laws and the appropriators have in good faith and in compliance with such laws commenced the construction of works for application of the water so appropriated to a beneficial use and prosecuted the work diligently and continuously, but the rights shall be adjudicated as provided in this chapter.

§ 45-172 Transfer of water rights; application; limitations; required consent

A. A water right may be severed from the land to which it is appurtenant or from the site of its use if for other than irrigation purposes and with the consent and approval of the owner of such right may be transferred for use for irrigation of agricultural lands or for municipal, stock watering, power and mining purposes and to the state or its political subdivisions for use for recreation and wildlife purposes, including fish, without losing priority theretofore established, subject to the following limitations and conditions:

Except as otherwise provided in this section no such severance or transfer shall be made unless approved by the director, and the approval of the director shall prescribe the conditions of the approval.
Vested or existing rights to the use of water shall not be affected, infringed upon nor interfered with, and in no event shall the water diverted or used after the transfer of such rights exceed the vested rights existing at the time of such severance and transfer, and the director shall by order so define and limit the amount of water to be diverted or used annually subsequent to such transfer.
The water rights sought to be transferred shall have been lawfully perfected under the laws of the territory or the state of Arizona and shall not have thereafter been forfeited or abandoned.
No such severance or transfer of water rights shall be permitted or allowed from lands within the exterior boundaries of any irrigation district, agricultural improvement district or water users' association without first having obtained the written consent and approval of such irrigation district, agricultural improvement district or water users' association.
No right to the use of water on or from any watershed or drainage area which supplies or contributes water for the irrigation of lands within an irrigation district, agricultural improvement district or water users' association shall be severed or transferred without the consent of the governing body of such irrigation district, agricultural improvement district or water users' association. All proposed applications for the severance and transfer of a right to use water of or from any watershed or drainage area which supplies or contributes water for the irrigation of lands within any irrigation district, agricultural improvement district or water users' association shall be submitted to the governing body of such irrigation district, agricultural improvement district or water users' association prior to the filing of such application with the director. Within forty-five days after the receipt of the application such governing body shall reject or approve the proposed application. Failure of such governing body to approve or reject the proposed application within forty-five days after receipt shall constitute approval of the proposed application by such governing body. No application for the severance or transfer of a right to the use of water of or from any watershed or drainage area which supplies or contributes water for the irrigation of lands within any irrigation district, agricultural improvement district or water users' association shall be accepted for filing by the director unless accompanied by the written consent of the governing body of such irrigation district, agricultural improvement district or water users' association to the proposed application or by satisfactory evidence that such governing body failed to either accept or reject the proposed application within forty-five days after receipt by such governing body.
A severance and transfer of an irrigation water right appurtenant to lands within the boundaries of an irrigation district to other lands within the boundaries of the same irrigation district for agricultural use may be accomplished by the exclusion of lands to which a water right is appurtenant from within the boundaries of an irrigation district, and the inclusion in lieu of other lands within the boundaries of such irrigation district. Such severance and transfer of a water right shall require the consent of only the irrigation district within which the affected lands are situated and of the owners of the lands affected by the severance and transfer. No proceedings before nor approval by the director shall be required to accomplish such severance and transfer.
An application for severance and transfer of a water right shall be filed with the director. The director shall give notice of the application by publication once a week for three successive weeks in a newspaper of general circulation in the county or counties in which the watershed or drainage area is located. The notice shall state that any interested person may file written objections to the proposed severance and transfer with the director within thirty days after the last publication of the notice. In appropriate cases, including cases in which an objection has been filed, an administrative hearing may be held before the director's decision on the application if the director deems a hearing necessary.

B. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

§ 45-172.01 Flood damaged acres; substitution of acres; definitions

A. Notwithstanding section 45-172, a person who owns acres of land that may be irrigated may permanently retire those acres from irrigation and substitute for those acres the same number of acres in the same farm unit under common ownership if the owner notifies the director that both of the following apply:

The irrigated acres were damaged by floodwaters after being irrigated.
It is not economically feasible to restore the flood damaged acres to irrigation use.

B. The substitution of acres as prescribed in this section does not affect the person's existing or vested rights to the use of water, except as to place of use, and any water diverted or used after the substitution of acres shall not exceed the vested rights to water that exist at the time of substitution.

C. The director shall post the notice prescribed by this section on the department's website.

D. For the purposes of this section:

"Farm unit" means one or more farms that are contiguous or in close proximity to each other, that are operated on a unitary basis and that are served water from the same water source by a water distribution system common to the irrigated land.
"Floodwaters" means a temporary and erosive overflow of waters on lands that are not normally covered by water.

§ 45-172.02 Impediments to efficient irrigation; substitution of acres; definitions

A. Notwithstanding section 45-172, a person who owns acres of land that are contiguous and that may be irrigated may permanently retire a portion of those acres from irrigation and substitute for the retired acres the same number of acres if the owner notifies the director that all of the following apply:

A limiting condition associated with the acres to be retired from irrigation substantially impedes implementing efficient irrigation practices on the irrigated acres.
The substitution of acres will substantially reduce the limiting condition and will substantially facilitate implementing efficient irrigation practices.
The substitute acres are within the same farm unit under common ownership as the irrigated acres that will not be retired.
If the acres to be retired are located within the exterior boundaries of an irrigation district, the substitute acres must be located within the exterior boundaries of the same irrigation district.
The area of land within the substitute acres that is physically capable of being irrigated at the time the notice of substitution of acres is filed does not exceed the area of land within the acres to be retired that is physically capable of being irrigated at the time the notice of substitution of acres is filed.

C. The director shall post the notice prescribed by this section on the department's website.

D. For the purposes of this section:

"Farm unit" means one or more farms that are contiguous or in close proximity to each other, that are operated on a unitary basis and that are served water from the same water source by a water distribution system common to the irrigated land.
"Limiting condition" means any condition that limits the achievement of efficient irrigation on the irrigated acres, including irregularly shaped irrigated acres and poor quality soils.

§ 45-173 Use of natural waterway to carry water of another or for other water projects; dispute over division of waters

A. Although the waters which naturally flow in the natural channel of a stream have been previously appropriated and put to beneficial use by others, the channel may be used to carry water of another or used for the location of an underground storage facility pursuant to chapter 3.1 of this title, if such use can be made without diminishing the quantity of water which naturally flows therein the use of which has been appropriated.

B. When the parties interested cannot agree upon the division of the water turned into the natural channel from the water naturally flowing therein, or if it is difficult to ascertain the amount to which each party is entitled, the water superintendent of the district shall make the division.

§ 45-174 Using bed of stream as carrier of reservoir waters

When the owner of a reservoir desires to use the bed of a stream or other watercourse for the purpose of carrying water from the reservoir to the consumer, he shall in writing notify the water superintendent of the district in which the water is to be used, giving the date when it is desired to discharge water from the reservoir, its volume, and the names of all persons and ditches entitled to its use. The superintendent shall supervise the opening of the reservoir gates and close or adjust the head gates of all ditches from the watercourse not entitled to the use of the stored water so that persons having the right will receive the water to which they are entitled.

§ 45-175 Chronological preference to water in times of scarcity

During years when a scarcity of water exists, owners of lands shall have preference to the water for irrigation according to the dates of their appropriation or their occupation of the lands, either by themselves or their grantors. The oldest titles shall have precedence.

Article 7 Water Rights Registration

§ 45-181 Definitions

In this article, unless the context otherwise requires:

"Beneficial use" includes but is not limited to use for domestic, municipal, recreation, wildlife, including fish, agricultural, mining, stockwatering and power purposes.
"Person" means any individual, partnership, association, public or private corporation, city or other municipality, county or state agency, a recognized Indian tribe and the United States of America when claiming water rights established under the laws of this state.
"Public waters" or "water" means waters of all sources flowing in streams, canyons, ravines or other natural channels or in definite underground channels, whether perennial or intermittent, flood, waste or surplus water, and of lakes, ponds and springs on the surface.

§ 45-182 Claim of right to withdraw, divert or use public waters; exception; administration by director of water resources

A. Except as provided by subsections B and E of this section, all persons who before March 17, 1995 were using and claiming the right to withdraw or divert and make beneficial use of public waters of the state based on state law shall file not later than ninety days before the date of the filing of the director's final report pursuant to section 45-256 for the subwatershed in which the claimed right is located a statement of claim for each water right asserted, on a prescribed form. The filing by any person on behalf of its members or users shall constitute the required filing of the individual users under this section.

B. The requirement of the filing of a statement of claim shall not apply to any of the following:

Any water rights issued pursuant to a permit or certificate issued pursuant to law.
Rights acquired to the use of the mainstream waters of the Colorado river.
Rights acquired or validated by contract with the United States of America, court decree or other adjudication.

C. The director succeeds to the administration of this article and may adopt such rules as may be necessary to do so. Such rules supersede those previously adopted by the state land department and the Arizona water commission relating to this article.

D. A person who before March 17, 1995 was using and claimed the right to withdraw or divert and make beneficial use of public waters of the state based on state law and who is exempt from filing pursuant to subsection B of this section is permitted to file a statement of claim of right under this article for each water right asserted not later than ninety days before the date of filing of the director's final report pursuant to section 45-256 for the subwatershed or federal reservation in which the claimed right is located. Any statement of claim of right filed pursuant to this section may be amended at any time before ninety days before the filing of the director's final report pursuant to section 45-256 for the subwatershed or federal reservation in which the claimed right is located.

E. Water right claims may be asserted under this article for uses, diversions or withdrawals of public waters of the state based on state law and initiated at any time before March 17, 1995. A claim may not be asserted under this article for uses, diversions or withdrawals of public waters of the state initiated on or after March 17, 1995. Any person who before March 17, 1995 filed a statement of claim for a water right under this article is not required to file another statement of claim for the same water right after March 17, 1995.

§ 45-183 Contents of statement of claim; filing procedure; fee

A. The statement of claim for each water right shall include the following:

The name and mailing address of the person filing the claim.
The name of the watercourse or water source from which the right to divert or make use of water is claimed.
The quantities of water and times of year use is claimed.
The legal description to the nearest forty-acre tract or by other appropriate description of the point or points of diversion and place of use of the waters.
The purpose and extent of use.
The approximate dates of first putting water to beneficial use for the various amounts and times claimed in paragraph 3 of this subsection.
The legal basis for the claim.
The sworn statement that the claim set forth is true and correct.

B. A statement of claim for a water right may be verified by the person claiming the right or may be verified by an authorized agent of such person.

C. Filing of a statement of claim shall be complete upon timely receipt by the department of a properly executed statement of claim and a five dollar filing fee for each such claim. The director shall deposit, pursuant to sections 35-146 and 35-147, the fees received pursuant to this subsection in the water resources fund established by section 45-117.

§ 45-184 Waiver and relinquishment of water right

Any person who is claiming the right to divert or withdraw public waters of the state based on state law and who fails to file a statement of claim as provided in this article shall have waived and relinquished any right, title or interest in that right.

§ 45-185 Filing of claim not deemed adjudication of right; presumption; exemption

A. The filing of a statement of claim under this article does not constitute an adjudication of any claim to the right to the use of waters as between the person and the state, or as between one or more persons asserting the water right, and the date of filing under this article shall have no effect upon the priority of such rights. A statement of claim is not admissible in evidence for the purpose of demonstrating that water diverted or withdrawn and beneficially used is appropriable under section 45-141, subsection A, but a statement of claim is admissible in evidence as a rebuttable presumption of the truth and accuracy of the contents of the claim.

B. Wells used to produce water exclusively for domestic or stock watering purposes are exempt from the provisions of this article, but the granting of this exemption shall not establish the presumption that a water right exists.

§ 45-186 Water rights claims registry

All claims set forth pursuant to this article shall be filed in a water rights claims registry in such a manner as deemed appropriate by the director.

§ 45-187 No rights acquired by adverse use or adverse possession

No rights to the use of public waters of the state may be acquired by adverse use or adverse possession as between the person and the state, or as between one or more persons asserting the water right, but nothing contained herein shall be deemed to diminish or enhance the validity of a claim filed under this article originating prior to the effective date of chapter 164 of the laws of 1919.

§ 45-188 Future rights acquired through appropriation; rights within service area of agricultural or municipal provider

A. Any person who is entitled to divert or withdraw public waters of the state through an appropriation and evidenced by a certificate of water right issued under article 5 of this chapter, a court decree, or previous possession or continued beneficial use and who intentionally abandons the use thereof or who voluntarily fails, without sufficient cause, to beneficially use all or any part of the right to withdraw for any period of five successive years shall relinquish such right or portion thereof. The rights relinquished shall revert to the state, and the waters affected by such rights shall become available for appropriation to the extent they are not lawfully claimed or used by existing appropriators.

B. If a use or claim is subject to forfeiture by nonuse, failure by the appropriator to use water within a five year period does not result in a forfeiture of the associated water right if water use is resumed before the occurrence of the earlier of any of the following:

The initiation of proceedings pursuant to section 45-189 to determine whether the right has been forfeited or abandoned.
The filing by a third party of a statement of claimant in a general adjudication instituted pursuant to article 9 of this chapter that asserts the right to use water from the stream in which the subject nonuse has occurred.
The assertion by a third party of written objections in response to an application by the appropriator to sever and transfer the right pursuant to section 45-172.

C. Conservation of water pursuant to a water conservation plan notice filed with the director as prescribed by section 45-189.01 does not constitute an abandonment or forfeiture of the water conserved.

§ 45-189 Reversion of rights due to nonuse; notice; hearing; order; exception

A. When it appears to the director that a person entitled to the use of water has not beneficially used all or a portion of the water right for a period of five or more consecutive years, and it appears that the right has or may have reverted to the state because of such nonuse, as provided by section 45-141 and section 45-188, subsection A, the director shall notify such person to show cause at an administrative hearing why the right or portion of the right should not be declared relinquished.

B. The notice shall contain:

The time and place of the hearing.
A description of the water right, including the approximate location of the point of diversion, the general description of the lands or places where such waters were used, the water source, the amount involved, the purpose of use, the apparent authority on which the right is based and the factual basis for the notice to show cause.
A statement that unless sufficient cause is shown the water right will be declared relinquished.

C. The notice shall be served at least thirty days before the hearing.

D. The director shall make an order determining whether such water right has been relinquished and give notice to each party of the order by serving such persons at their last known addresses.

E. For the purposes of this section, section 45-141, subsection C and section 45-188, subsection A, the following reasons shall be sufficient cause for nonuse:

Drought, or other unavailability of water.
Active service in the armed forces of the United States during military crisis.
Nonvoluntary service in the armed forces of the United States.
The operation of legal proceedings.
Federal, state or local laws imposing land or water use restrictions, or acreage limitations, or production quotas.
Compliance with an applicable conservation requirement established by the director pursuant to chapter 2, article 9 of this title.
Conservation of water pursuant to a water conservation plan notice filed with the director as prescribed by section 45-189.01.
With respect to a water right appropriated for an irrigation use, either of the following:

(a) Pendency of a proceeding before a court or the director to change the permitted use from irrigation to municipal or other uses pursuant to a court decree or section 45-156 or to sever the right from the land to which it is appurtenant and transfer it for municipal use pursuant to section 45-172.

(b) After a change in the permitted use from irrigation to municipal pursuant to a court decree or section 45-156 or 45-172, insufficient demand for the water by the municipal users.

Any other reason that a court of competent jurisdiction deems would warrant nonuse.

F. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

§ 45-189.01 Water conservation plan notice; filing; exemption; duration

A. Beginning on September 29, 2021, a person who is entitled to the use of water may file with the director a water conservation plan notice. A water conservation plan notice shall include the following:

The name and address of the person who is entitled to the use of water that is included in the water conservation plan.
A description of all water rights and claims that the person who is entitled to use those water rights and claims is including in the water conservation plan.
The place and purpose of the use of the identified water rights and claims and the historical and current water use.
A description of any water conservation measures that will be implemented as part of the water conservation plan.
A statement that the water conservation plan is voluntary and temporary in nature.
A statement that the water conservation plan is intended to result in the temporary reduction in the use of water or a reduction in the diversion of water.
A statement that the activities described in the water conservation plan will contribute to the practical and economical management, conservation and use of surface water in the watersheds of this state.
A statement that the person who holds the valid water right that is subject to the water conservation plan does not intend to abandon such water right during the terms of the water conservation plan.

B. On filing a water conservation plan notice, the conservation of water pursuant to the plan does not constitute an abandonment or forfeiture of the water conserved. A person may not accrue long-term storage credits for any water that is conserved in a water conservation plan notice filed pursuant to this section.

C. A water conservation plan shall designate a duration of up to ten years. The person filing the water conservation plan notice may file a subsequent notice for some or all of the water rights and claims before expiration of the designated time and may file subsequent water conservation plan notices for one or more periods of up to ten years each.

§ 45-190 Overstating claim; classification

The filing of a statement of claim pursuant to this article which knowingly provides for an overstatement of a right either in quantities of water or times of use claimed constitutes a class 3 misdemeanor.

Article 8 Reservoirs and Canals

§ 45-201 Construction of canals; eminent domain

An owner of arable and irrigable lands may construct public or private canals for carrying water and, when the canal necessarily runs through the lands of another, the right of way therefor through such lands may be acquired by condemnation under eminent domain.

§ 45-202 Opening fence without consent of owner; damages

A fence may be opened without consent of the owner in order to repair a public water ditch when it is necessary to use a team or vehicle to repair the ditch. On completion of the repair the fence shall be closed by the party opening it, and left as nearly as possible in the condition it was before the opening. The person opening the fence is liable for damages which occur by reason of the opening and entry.

§ 45-203 Head gates; measuring devices required on canals and reservoirs

A. The owner of a ditch or canal shall maintain at the point where the water is diverted a substantial head gate so constructed that it can be locked and kept closed by the water superintendent. An owner, when required by the director of water resources, shall construct and maintain measuring devices at points along the ditch to assist the water superintendent in determining the amount of water to be diverted into the ditch from the stream, or taken from it by the users.

B. The owner of a reservoir located across or upon the bed of a natural stream shall, when required by the director, construct and maintain a measuring device, approved by the director, below the reservoir, a gauge graduated to feet and tenths of feet inside the reservoir and a capacity table for the reservoir, and, if necessary, a measuring device above the reservoir on each source of supply discharging into the reservoir.

C. When necessary for the protection of other water users, the director may require flumes to be installed along the line of a ditch.

D. If the owner of irrigation works refuses or neglects to construct and maintain head gates, flumes or measuring devices after twenty days' notice, the director may close the ditch and it shall not be opened or water diverted from the source of supply until the requirements of the director have been complied with. If the owner of a reservoir located across the bed of a natural stream neglects to install such measuring device after twenty days' notice, the director may open the sluice gate or outlet of the reservoir and it shall not be closed until the measuring devices are installed. A person violating this subsection shall be punished as provided by section 45-112.

§ 45-204 Prohibition on canal owner to contract to carry water in excess of capacity of canal

A person owning or controlling a canal, flume or other means for carrying water from a stream or water supply to lands for irrigation of the lands, shall not contract to carry more water than the canal, flume or other means is estimated to carry at any one time, whether the contract is made for measured time or acreage quantity. Such person shall keep the canal, flume or other means in good repair and condition so that it will carry the full amount of water contracted to be carried or delivered.

§ 45-205 Failure of owner to clean canals and make repairs; lien for work done; release of lien; liability

A. When a person owning or controlling a canal, flume or other means for carrying water permits them, or the head gates at the dam or other appliances for securing the water at the head, to become disrepaired or reduced in capacity to an extent that they will not carry the amount of water contracted to be delivered to the users thereof, and does not within a reasonable time repair, clean or restore the canal, flume or other means of carrying the water, the users may, after six days' notice in writing to the owner or person in control thereof, enter in and upon the canal, flume or other means, and make repairs, clean or restore any thereof.

B. The cost of repairs, cleaning or restoration shall be a lien on the canal, flume or other carrying means, enforceable as liens upon real property. Within thirty days after completion of the repairs, cleaning or restoration, a verified notice of the lien claimed, stating the expenditures actually made, itemizing the amounts expended and the purpose for which each was expended and stating the facts upon which the lien is claimed, shall be filed in the office of the county recorder of the county in which the work was done, and recorded in a book kept by him for that purpose.

C. When any lien established by this section has been satisfied, the lienholder shall, within thirty days after satisfaction, issue a release of the lien to the person against whom the lien was claimed. Such release shall be a recordable document. Failure to grant such a release shall subject the lienholder to liability in the amount of one thousand dollars and also to liability for actual damages.

§ 45-206 Widening and extending lateral ditches; definition

A. A person owning an interest in common with another person in a lateral ditch constructed and used for irrigating, mining, milling or other useful and lawful purpose, may widen, deepen, border up or extend the lateral ditch by paying to his associates, and to the owner of the land through which the lateral ditch passes, a just compensation for damages to the land or growing crop occasioned by widening, deepening, bordering up or extending the lateral ditch.

B. "Lateral ditch" as used in this section means a private ditch leading from a main ditch or any of its branches receiving water from a river or original source of supply.

Article 9 General Adjudication of Water Rights

§ 45-251 Definitions

In this article, unless the context otherwise requires:

"Domestic use" means a single appropriative water right serving a residence, or multiple residences up to a maximum of three residential connections, for household purposes with associated irrigation of lawns, gardens or landscape in an amount of not more than one-half acre per residence. Domestic use does not include the use of water delivered to a residence or multiple residences by a city, town, private water company, irrigation provider or special taxing district established pursuant to title 48.
"General adjudication" means an action for the judicial determination or establishment of the extent and priority of the rights of all persons to use water in any river system and source.
"Person" means an individual, a partnership, a corporation, a municipal corporation, the state of Arizona or any political subdivision, the United States of America, an Indian tribe or a community or any other legal entity, public or private.
"Potential claimant" means all persons claiming water rights or on whose behalf claims to water rights are asserted.
"Prior decree" means any judgment or decree that is entered by a court of competent jurisdiction and that applies to the water right claim or use that is subject to adjudication.
"Prior filing" means a notice of appropriation recorded with the county recorder or the recorder's predecessor, an application to appropriate filed pursuant to section 45-152, a statement of claim filed pursuant to article 7 of this chapter or a claim of water right filed pursuant to article 10 of this chapter, any or all of which reasonably relate to the water right claim or use that is subject to adjudication.
"River system and source" means all water appropriable under section 45-141 and all water subject to claims based on federal law.
"Small water use claim" means any claim for a stockpond, stock watering use or water well that is identified in a statement of claimant filed in the adjudication pursuant to section 45-254 and the claim is for any of the following specific conditions:

(a) A stockpond having a capacity of not more than fifteen acre feet that is used solely for watering livestock or wildlife and that contains water that is appropriable under section 45-141, subsection A.

(b) Any well that is equipped so that it has a maximum pumping capacity of not more than thirty-five gallons per minute.

(c) A stock watering use by livestock and wildlife where the place of stock watering use is either directly from a naturally occurring body of water, such as an undeveloped spring, cienega, seep, bog, lake, depression, sink or stream, or from a developed facility that is not a stockpond or reservoir and that is served by a diversion of water that is appropriable under section 45-141, subsection A, including a drinker, trough, pipeline, spring box or other developed facility.

"Stockpond" means an on-channel or off-channel impoundment of any size that stores water that is appropriable under section 45-141, subsection A and that is for the sole purpose of watering livestock and wildlife.
"Stock watering use" means the consumption of water by livestock and wildlife, either:

(a) Directly from a naturally occurring body of water, such as an undeveloped spring, cienega, seep, bog, lake, depression, sink or stream.

(b) From small facilities, other than a stockpond, that are served by a diversion of water that is appropriable under section 45-141, subsection A.

§ 45-252 General adjudication; representation; superior court; assignment to judge; personnel funding; petition

A. One or more water users on a river system and source, the water rights of which have not been previously adjudicated under this article and administered by the director of water resources, or this state on the request of any state agency other than the department of water resources may file a petition to have determined in a general adjudication the nature, extent and relative priority of the water rights of all persons in the river system and source.

B. The attorney general shall represent this state in connection with all water claims asserted by this state. The director shall be represented by legal counsel retained in accordance with section 45-104, subsection F.

C. The general adjudication shall be brought and maintained in the superior court in the county in which the largest number of potential claimants resides. The clerk of the court in which the petition is filed shall notify the supreme court, and the supreme court shall assign the general adjudication to a superior court judge and appoint a master and shall consolidate the general adjudication with other pending general adjudications, if appropriate.

D. The supreme court may appoint additional paralegals and law clerks for the general adjudication. Notwithstanding section 12-128, the superior court judge, master, paralegal and law clerk positions prescribed in this subsection and subsection C of this section shall be fully funded by this state.

E. The petition for a general adjudication shall be captioned: "In re the general adjudication of all rights to use water in the ____________ river system and source" and shall request that the court determine the nature, extent and relative priority of the water rights of all persons in the river system and source.

§ 45-253 Service of summons; statement of claimant form; record

A. Personal service of the summons and petition shall not be required. The court shall order that:

The clerk of the court issue the summons which shall specify the date by which the statement of claimant must be filed, generally describe the nature of the general adjudication and set forth such other information as may be necessary or desirable in the circumstances. The form of the summons shall be approved by the court.
The clerk of the court deliver the summons to the director who shall make such copies and prepare such documents as may be necessary to effect service. The director shall assist the court in determining the scope of adjudication by recommending the portions of the river, its tributaries and any other relevant sources subject to the adjudication and in development of a statement of claimant form which shall include such duplicates as may be necessary. Upon identifying the potential claimants pursuant to section 45-256, subsection A, paragraph 1, the director shall effect service on all known potential claimants by mailing a copy of the summons by registered or certified mail, return receipt requested, to such known potential claimants.
When the superior court determines that the services of a master or masters appointed pursuant to section 45-255 are no longer necessary and enters an order terminating the appointment the clerk of the court shall reimburse the director from the fund of fees paid by the claimants pursuant to section 45-254 for funds expended by the director in effecting service of process and any subsequent notices to claimants. Reimbursement shall only be from monies remaining in the fund after payment of the costs and expenses attributable to the appointment of a master or masters in accordance with section 45-255, subsection B.

B. At the time of commencement of mailing of service of process on known potential claimants, the director shall effect service on all unknown potential claimants by publication of the summons at least once a week for four consecutive weeks in a newspaper published in each of the counties within which interests in and to the use of water may be affected by the general adjudication.

C. The director shall publicize the general adjudication through the electronic media and in general circulation newspapers.

D. The court shall direct the director:

To return the original summons to the clerk of the court with an endorsement of the dates on which mailing and publication were completed.
To maintain a true and accurate record of the names and addresses of all persons who have in fact been served by registered mail, return receipt requested. Any such record, together with all supporting documents, shall constitute the records of the court which shall be subject as such to the supervision and control of the court.

§ 45-254 Statement of claimant; filing; information to be included; verification; failure to file; fees

A. Each potential claimant who is served shall present in writing the particulars of his claim on the court-approved statement of claimant form and shall file the statement of claimant form with the court within ninety days of the date of service, unless otherwise ordered by the court. The court may extend the time for good cause. A duplicate of each statement of claimant shall be made available by the clerk of the court to the director.

B. The statement of claimant form may be filed by a person on behalf of its members or users and shall constitute the required filing of its members or users.

C. The statements of claimant shall include the following information, where appropriate:

The name and mailing address of the potential claimant.
The name of the specific river, stream, tributary, wash or other source from which the right to divert or make use of water is claimed.
The quantities of water and the periods of time during the year for which use is claimed.
If distributing works are used or required, the date of beginning and completion of construction or of enlargements and the dimensions of the ditch as originally constructed and as enlarged.
If the use is for irrigation, the amount of land reclaimed the first year and in subsequent years, and the amount and general location of the land, the character of the soil and the kind of crops cultivated.
The legal description of the point or points of diversion and place of use of the waters to the nearest forty-acre tract or by other appropriate description and such map or plat showing the relative points of diversion and place of use as may be required.
The purpose and extent of use.
The time of the initiation of the right and the date when water was first used for beneficial purposes for the various amounts and times claimed in paragraph 3 of this subsection.
The legal basis for the claim.

D. The statement of claimant shall be verified by the claimant or the person authorized to file as provided in subsection B of this section.

E. After the date by which statements of claimant are required to be filed as set forth in the summons or in an order of the court, the filing of a statement of claimant or an amendment is permitted under the following circumstances:

At any time up to ninety days before the publication of the director's final report pursuant to section 45-256, subsection B for a subwatershed or federal reservation within the river system and source, a person may file a statement of claimant or an amendment to a statement of claimant with the director without leave of the court.
After the expiration of the ninety day period prescribed by paragraph 1 of this subsection and before the conclusion of hearings by the master for a subwatershed or federal reservation within the river system and source, a person may assert a claim for a water use within the subwatershed or federal reservation without leave of the court by filing the original of the statement of claimant or amended statement of claimant with the director and a notice of filing with the court. After the conclusion of hearings on an existing claim, an amendment to that existing statement of claimant may only be permitted as prescribed by paragraph 3 of this subsection. If a statement of claimant or an amendment to a statement of claimant is filed after the expiration of the ninety day period, other parties may object to the elements of the claim or amended claim.
After the master has completed hearings on a subwatershed or federal reservation within the river system and source and has filed a report with the court for the entire subwatershed or federal reservation pursuant to section 45-257, a person may not assert a late claim for a water right within that subwatershed or reservation as a matter of right. A person may request the court's permission to intervene in the adjudication and file a statement of claimant with the director. The court may grant the motion if it finds that the intervention would not unduly delay or prejudice the adjudication of the rights of the original parties. An amendment to an existing statement of claimant after the filing of the master's report for the entire subwatershed or federal reservation is permitted only by leave of the court in its discretion and on motion of the party seeking an amendment. Other parties may object to the elements of a claim or an amended claim filed pursuant to this paragraph.

F. On entry of the final decree pursuant to section 45-257, any potential claimant who is properly served and who failed to file a statement of claimant as prescribed by this article for any water right or whose motion for permissive intervention was finally denied by the court is barred and estopped from subsequently asserting any right that was previously acquired on the river system and source and that was not included in a statement of claimant and forfeits any rights to the use of water in the river system and source that were not included in a properly filed statement of claimant.

G. On March 17, 1995, all statements of claimant previously filed in an adjudication pending under this article are deemed to be timely filed. An objection to the timeliness of any statement of claimant that was filed before March 17, 1995 in an adjudication pending under this article is not permitted.

H. The fee for filing a statement of claimant by an individual is twenty dollars and by a corporation, municipal corporation, the state or any political subdivision, an association or partnership is two cents for every acre-foot of water claimed, or twenty dollars, whichever is greater. The director shall review the statements of claimant and the amount of fees paid as to each and report to the court or master the sufficiency of the fees paid with respect to each statement of claimant. A claim shall not be considered by the court or the master unless all fees with respect to such claim have been fully paid in accordance with the provisions of this article. Fees shall not be imposed on any Indian tribe, community or allottee personally appearing in the general adjudication to assert claims to water.

§ 45-255 Appointment of master; compensation

A. The superior court judge assigned to the adjudication may appoint a master or masters under rule 53 of the Arizona rules of civil procedure to report on legal and factual issues designated under a specific order of reference.

B. A master's compensation and other expenses related to the conduct of an adjudication shall be fixed by the court and paid out of the fund of fees paid by the claimants pursuant to section 45-254. If that fund of fees is insufficient, a master's compensation and other expenses related to the conduct of an adjudication shall be paid from the state general fund as a separate line item appropriation for the superior court.

§ 45-256 Technical assistance of director; report

A. The court or the master shall request technical assistance from the director in all aspects of the general adjudication with respect to which the director possesses hydrological or other expertise. In rendering such technical assistance, the director shall expeditiously:

Identify the hydrological boundaries of the river system and source and the names and addresses of all reasonably identifiable potential claimants. In identifying potential claimants, the director, at a minimum, shall identify as far as reasonably possible the current record owners of all real property within the geographical scope of the adjudication.
Locate, procure and make available all public and other records relevant to determination of any factual or legal issues.
Conduct a general investigation or examination of the river system and source.
Investigate or examine the facts pertaining to the claim or claims asserted by each claimant.
Make a map or plat on a scale not less than one inch to the mile adequate to show with substantial accuracy the course of the river system and source, the location of the ditch or canal diverting water from such river system and source, and the legal subdivisions of lands that have been irrigated or are susceptible to irrigation from the ditches and canals already constructed.
Take such other steps and gather such other information as may be necessary or desirable for a proper determination of the relative rights of the parties.

B. The technical assistance rendered by the director shall be set forth in summary form on a claim by claim basis in a report prepared by the director and filed with the court or the master, which shall then be available for inspection by any claimant. The report shall list all information that is obtained by the director and that reasonably relates to the water right claim or use investigated. The report shall also include the director's proposed water right attributes for each individual water right claim or use investigated as prescribed by this article. If no water right is proposed in connection with an individual water right claim or use, the director's recommendations shall so indicate. Any claimant may file with the court or the master written objections to the report or any part of the report within one hundred eighty days of the date on which the report was filed. An objection shall specifically address the director's recommendations regarding the particular water right claim or use investigated. The court or master shall summarily dismiss with prejudice objections that do not comply with this subsection. Each claimant who has filed timely written objections that comply with this subsection shall have a fair and reasonable opportunity to present evidence in support of or in opposition to those recommendations of the director. Any claimant may present evidence in support of the claimant's claim.

C. Those portions of the report that do not contain the director's recommendations for the water rights claims and uses investigated shall not be summarily admitted into evidence but may be offered into evidence for any purpose relevant to the determination of a water right claim or use that is subject to adjudication. The appropriator and any other claimant who has filed an objection to the water right as prescribed by subsection B of this section shall have a fair and reasonable opportunity to present evidence in support of or in opposition to those portions of the director's report before the conclusion of hearings on the water right. If admitted into evidence over an objection, those portions of the report shall not be given any presumption of correctness.

D. Information that is included in the director's report and that describes a water right claim or use of five hundred acre-feet or less per year for any type of use claimed shall be summarily admitted into evidence. If conflicting evidence is presented, the director's proposed attributes of the water right shall be given the weight deemed appropriate by the master and the court consistent with this article.

E. Information that is included in the director's report and that describes a water right claim or use of more than five hundred acre-feet per year shall not be summarily admitted into evidence. If offered into evidence and if admitted over objection, it shall be given no presumption of correctness.

F. Claimants who are in agreement with those parts of the report that describe the claimants' water right claims or uses are not required to file objections to the report and may rely on the report as evidence of their water right. If the owner of a water right claim or use provides evidence in support of the report, that evidence shall be presented after all evidence has been introduced by the objectors.

G. On request of any party, the director shall present evidence concerning the facts stated in the report. This section shall not be construed to prevent the court or the master from issuing a protective order on a showing of good cause.

H. Before filing the report with the court or the master as provided in subsection B of this section, the director shall prepare a preliminary report. The director shall give notice to each water claimant that the preliminary report is available for inspection and comment. Upon expiration of the period provided for timely comment, the director shall revise the preliminary report as may be appropriate and shall file the report with the court or the master in accordance with subsection B of this section. At least one hundred twenty days before the final report is to be filed, the director shall file with the court a notice stating the date on which the final report is to be filed. The director shall adopt such rules as may be necessary to ensure that adequate notice is given, that the preliminary report is sufficiently available for inspection by the water claimants and that provisions are made for adequate time and procedure for comment on the preliminary report.

§ 45-257 Hearings; report of master; final judgment by court; administration and enforcement of decree

A. The master shall:

After due notice, conduct such hearings and take such testimony as shall be necessary to determine the relative water rights of each claimant. The determination of water rights of all small water use claims in any specific subwatershed shall be deferred until all other claims in that subwatershed are determined by the superior court in the course of the adjudication, except that for a claimant who asserted a small water use claim and who asserted other water use claims in the same subwatershed that are not small water use claims, the claimant's small water use claim shall be determined in conjunction with the determination of that claimant's other claims. This paragraph does not preclude the superior court or the master from approving settlements of small water use claims at any time during the course of the adjudication.
Subject to paragraph 1 of this subsection, for all determinations, recommendations, findings of fact or conclusions of law issued, prepare and file with the court a report in accordance with rule 53(g) of the Arizona rules of civil procedure, which shall contain those determinations, recommendations, findings of fact and conclusions of law. Each claimant may file written objections with the court to any rule 53(g) report within the later of sixty days after the report is filed with the court or before May 17, 1995. If the report covers an entire subwatershed or federal reservation, each claimant may file with the court written objections to the report within one hundred eighty days of the date on which the report was filed with the court.
Maintain under his control all records and documents at such locations as may be designated by the court.

B. The court, on review of the report and in accordance with subsection A, paragraph 1 of this section and rule 53 of the Arizona rules of civil procedure, shall:

Determine the extent and priority date of and adjudicate any interest in or right to use the water of the river system and source, provided that when rights to the use of water or dates of appropriation have previously been determined in a prior decree of a court, the court shall accept the determination of such rights and dates of appropriation as found in the prior decree unless such rights have been abandoned. Except if otherwise provided in an applicable prior filing, certificate of water right or prior decree, the decreed capacity of a reservoir includes the right to continuous filling and refilling in priority throughout the year.
Establish, in whatever form determined to be most appropriate by the court, one or more tabulations or lists of all water rights and their relative priorities on the river system and source.
Refer the final judgment or decree to the director for administration and enforcement under the continuing jurisdiction of the court.
Make appropriate orders to ensure that the entire record of the general adjudication is preserved in an accessible and usable form.
Record a certified copy of the final judgment or decree in each county within the geographical scope of the general adjudication which shall constitute constructive notice of the contents of the judgment or decree.

C. If ownership of a right to use water for stock watering or stockpond purposes or for domestic use on a ranch or farm on state land is disputed in a general adjudication of the rights to use the waters of a river system and source, the water right shall be adjudicated in the name of a claimant other than the state if both of the following apply:

The point of diversion and the place of use, or the perfection of the water right by the appropriator, comply with section 37-321.01, subsection A.
The state land commissioner has been afforded the opportunity to resolve the claim.

§ 45-259 Rules governing general adjudications

The general adjudication is governed in all respects by the Arizona rules of evidence, the Arizona rules of civil procedure and any other procedural rules generally applicable to civil proceedings, except that the specific provisions of this article govern if they conflict with the Arizona rules of civil procedure or any other procedural rules generally applicable to civil proceedings. Any proceedings previously initiated under prior law and transferred to the superior court for adjudication are subject to the provisions of this article only after the transfer has been effected.

§ 45-260 General adjudication fund

A. The general adjudication fund is established. All money appropriated to effect service of process and notices on potential claimants pursuant to section 45-253, subsection A, paragraphs 1 and 2, and all reimbursements to the director pursuant to section 45-253, subsection A, paragraph 3 shall be deposited, pursuant to sections 35-146 and 35-147, in such fund.

B. Monies in the general adjudication fund are exempt from the provisions of section 35-190, relating to lapsing of appropriations.

§ 45-261 Presumption in favor of prior filings and decrees

A. Except as otherwise specifically provided in this article and to the extent that water rights have not been forfeited or abandoned, the director, the master and the court shall apply the following evidentiary rules in determining the attributes of water rights claimed pursuant to this article:

The court shall accept information in an applicable prior decree as prescribed by section 45-257, subsection B, paragraph 1.
If information in a prior decree conflicts with information in one or more applicable prior filings, the court shall accept the information in the prior decree as prescribed by section 45-257, subsection B, paragraph 1.
If there is no information in any applicable prior filing or decree or if the court finds that information contained in an applicable prior filing regarding a water right attribute is clearly erroneous, the court shall determine the attribute. In making a determination pursuant to this subsection, the court may use the director's report, statement of claimant information, information obtained in claimant interviews, aerial photographs, satellite technology, historical records, maps, technical data or other relevant information in evidence.

B. If there is a conflict in applicable prior filings regarding the ownership of a water right and multiple parties have filed applicable statements of claimant, any claimant may offer that information to support or refute a claim of water right ownership.

C. Section 45-256, subsections D and E apply to the evidentiary weight given to the following determinations made by the director:

That information contained in a prior filing is clearly erroneous as it relates to the water right claim or use being investigated.
That no water right was initiated or perfected under the applicable federal, state or territorial law.
That a water right was forfeited or abandoned.

D. The director's report shall contain the basis for determinations made pursuant to subsection D of this section.

§ 45-263 State law applicable

State law, including all defenses available under state law, applies to the adjudication of all water rights initiated or perfected pursuant to state law.

§ 45-264 Joint legislative adjudication monitoring committee

A. A joint legislative committee shall be appointed to monitor the progress of general adjudications and the status of their funding. The committee shall consist of three members of the senate appointed by the president of the senate, not more than two of whom shall be members of the same political party, and of three members of the house of representatives appointed by the speaker of the house of representatives, not more than two of whom shall be members of the same political party.

B. The committee shall meet periodically and shall conduct hearings and request information from the director as it deems necessary to be apprised of the status of the adjudications. The committee shall report to the president of the senate and the speaker of the house of representatives at least annually on its findings, and include in that report any recommendations for legislative action it considers necessary to the efficient, prompt and just conclusion of the adjudications.

Article 10 Registration of Stockponds

§ 45-271 Definition of stockpond

In this article, unless the context otherwise requires, "stockpond" means a pond having a capacity of not more than fifteen acre feet that is used solely for watering livestock or wildlife. "Stockpond" shall not include a pond of any capacity used primarily for fishing or for the culturing of fish.

§ 45-272 Water rights in stockponds; priority

A. The owner of any stockpond constructed after June 12, 1919 and prior to August 27, 1977, the capacity of which is not in excess of fifteen acre-feet and concerning which water rights litigation or protest to the state land department was not a matter of record prior to August 27, 1977, shall have a valid water right in such stockpond with priority as of the date of construction and shall be eligible for such evidence of validity as the director may prescribe.

B. All water rights issued pursuant to a permit or certificate issued prior to August 27, 1977 by the state land department or its predecessors or pursuant to an application to appropriate filed with the state land department or its predecessors prior to August 27, 1977, rights to the use of the mainstream waters of the Colorado river, rights previously acquired or validated by contract with the United States, court decree or other adjudication or rights acquired prior to June 12, 1919 and registered pursuant to article 7 of this chapter shall have priority over any water right claimed pursuant to this article.

C. Any person who is claiming a water right pursuant to this article and who fails to file a claim of water right prior to one year after the effective date of this amendment to this section shall have a water right priority as of the date of filing. An existing claim of water right under this article may be amended at any time before the completion of hearings on the claimed right pursuant to section 45-257, subsection A.

D. Subsequent to August 27, 1977, no person may construct or cause to be constructed a stockpond of any size unless the director of water resources or his predecessors have approved an application for a permit to appropriate such water filed pursuant to section 45-152.

§ 45-273 Claim of water right; penalty; fee

A. A claim of water right for a stockpond and application for certification of such right shall be typewritten or legibly written in ink and filed in duplicate with the director upon a printed form furnished by the director. Each blank in the form shall be completed with the required information pursuant to instructions furnished by the director.

B. A claim which does not contain the required information or which is not accompanied by the required filing fee shall not be accepted, but shall be returned to the sender.

C. A separate claim shall be filed for each stockpond.

D. All claims shall be certified as true under penalty of perjury.

E. Each claim shall be accompanied by a filing fee of ten dollars.

F. The director shall deposit, pursuant to sections 35-146 and 35-147, all fees received pursuant to this section in the water resources fund established by section 45-117.

§ 45-274 Notice of claims; protest; grounds; contents

A. The director shall issue and deliver a notice of each claim to water users who, in the judgment of the director, might be affected by the use of water as set forth in the claim.

B. Any person affected may, within the time allowed in the notice or such further time as the director may allow, file a written protest to the claim. The protesting party shall send a copy of the protest to the claimant.

C. A protest shall state:

The name and address of the protesting party.
The location of the protesting party's point of diversion of water with respect to the claimant's stockpond.
The grounds for protest.
That a copy of the protest has been mailed or delivered to the claimant.

D. The grounds for protest are that the claim contains a misstatement of one or more of the following material facts:

The date of construction of the stockpond.
The capacity of the stockpond on August 27, 1977.
The sole purpose for which the stockpond was constructed and is used is watering livestock or wildlife, except fish.
The pond is not used primarily for fishing or culturing of fish.
That the stockpond was not the subject of water rights litigation or protest to the state land department prior to August 27, 1977.

§ 45-275 Investigation, hearing and certification of claims

A. Upon receipt of a claim, the director shall conduct such investigation as in the director's judgment is necessary to certify the water right. Such investigation may include an inspection of the stockpond.

B. When requested by a claimant or the protesting party, an administrative hearing shall be held to determine any material fact which is in dispute. A hearing may be held on the director's own motion.

C. The director shall issue a certification of the water right if it appears that the material facts stated in the claim are true and entitle the claimant to a water right for the stockpond. The water right shall be subject to all prior rights, and the certification shall so state.

D. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

§ 45-276 Statement of continuing use; revocation of certification

A. Once every five years, and at such other times as the director deems appropriate, the director shall require certificate holders to furnish a statement, under penalty of perjury, that the stockpond water is continuing to be used solely for watering livestock or wildlife, that the pond is not used primarily for fishing or the culturing of fish and that the stockpond has not been increased in capacity.

B. The director shall, after notice to the certificate holder and an opportunity for an administrative hearing, revoke any certification upon a finding that the water has ceased to be used solely for watering livestock or wildlife, that the pond is used primarily for fishing or the culturing of fish or that the stockpond has been increased in capacity.

C. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

Article 11 Exportation of Water From This State

§ 45-291 Definition of person

In this article, unless the context otherwise requires, "person" means an individual, public or private corporation, company, partnership, firm, association, society, estate, trust, any other private organization or enterprise, the United States, any state, territory or country or a governmental entity, political subdivision or municipal corporation organized under or subject to the constitution and laws of the United States, this state or any other state.

§ 45-292 Approval required to transport water out of state; application; fee; criteria; hearing

A. A person may withdraw, or divert, and transport water from this state for a reasonable and beneficial use in another state if approved by the director pursuant to this article. A person shall not transport water from this state unless approved by the director, but this article does not apply to or prohibit transporting water from this state as required by interstate compact, federal law or international treaty.

B. An application to transport water from this state for use in another state shall be filed with the director, including a fee established by the director by rule. In establishing a fee by rule, the director may consider factors including the amount of time likely to be expended in processing the application, the amount of preexisting hydrological information available, if any, and the complexity of the application. The application shall include:

The name and address of the applicant's statutory agent in this state for service of process and other legal notices.
The legal basis for acquiring the water to be transported.
The purpose for which the water will be used.
The annual amount of water in acre-feet for which the application is made.
The proposed duration of the permit, not to exceed fifty years with an option to renew.
Studies satisfactory to the director of the probable hydrologic impact on the area from which the water is proposed to be transported.
Any other information which the director may require.

C. The director shall approve or reject the application. If the director approves the application, the director may prescribe terms and conditions for the approval. In determining whether to approve the application the director shall consider:

Whether the proposed action would be consistent with conservation of water, including any applicable management goals and plans.
Potential harm to the public welfare of the citizens of this state.
The supply of water to this state and current and future water demands in this state in general and the proposed source area in particular.
The feasibility of intrastate transportation of the water that is the subject of the application to alleviate water shortages in this state.
The availability of alternative sources of water in the other state.
The demands placed on the applicant's supply in the other state.
Whether the proposed action is prohibited or affected by other law, including sections 45-165 and 45-172 and chapter 2 of this title.

D. This article does not authorize and the director shall not approve transporting from this state water allocated to this state by federal law or interstate compact.

E. An administrative hearing shall be held on the application, and the director shall give notice of the hearing by publication once a week for three consecutive weeks in a newspaper of general circulation in the county or counties from which the applicant proposes to transport the water. The hearing shall be conducted in the area from which water is proposed to be transported. Any interested person, including the department, may appear and give oral or written testimony on all issues involved.

F. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

G. The director shall deposit, pursuant to sections 35-146 and 35-147, all fees received under this section in the water resources fund established by section 45-117.

§ 45-293 Compliance monitoring, reports and notices; jurisdiction

A. The director shall monitor compliance with the terms and conditions prescribed for transporting and using the water out of this state and shall revoke his approval for any material violation of the prescribed terms and conditions.

B. A person transporting water under this article shall provide:

Written continuing consent for the director or the director's agent to perform on-site inspections of the transportation facilities and the use of the water.
Written periodic reports as required by the director.
Written notification of any changes in use of water transported from this state.

C. By applying for approval to transport water from this state under this article, a person submits to the jurisdiction of this state for that purpose and shall comply with all relevant provisions of the law of this state.

§ 45-294 Limited nonapplicability

Nothing in this article is intended to prescribe nor shall it be interpreted to prescribe the terms, conditions or rules for the transportation of water where the point of diversion or withdrawal and the point of use are both within the state of Arizona.

Article 12 Water Conservation Plumbing Requirements

§ 45-311 Definitions

In this article, unless the context otherwise requires:

"Commercial, industrial and public construction" means buildings used for commercial, industrial or public purposes, including restaurants, bars, nightclubs, public buildings, comfort stations, schools, gymnasia, factories, offices, athletic clubs, hotels and motels.
"Person" means an individual, public or private corporation, company, partnership, firm, association, society, estate or trust, any other private organization or enterprise, the United States, any state, territory or country or a governmental entity, political subdivision or municipal corporation organized under or subject to the constitution and laws of this state.
"Plumbing fixture" means a lavatory faucet, lavatory faucet replacement aerator, kitchen faucet, kitchen faucet replacement aerator, shower head, urinal, water closet, evaporative cooler or decorative fountain. Plumbing fixture does not include parts necessary for routine maintenance.
"PSI" means pounds per square inch of water pressure.
"Residential construction" or "residential dwelling" means buildings used for temporary or permanent human habitation, including single family residences and accessory guest houses, multi-family dwellings, townhouses, condominiums, apartments, the sleeping quarters of hotels and motels, dormitories and group housing units.
"Urinal" means a fixture that consists of a water flushed bowl, and any associated flush valve, and that is used for the disposal of human urine.
"Water closet" means a fixture that consists of a water flushed bowl, and any associated flush valve, and that is used for the disposal of all wastes from the human body.
"Water free urinal" means a plumbing fixture that does not require a water supply or flushing device to receive and convey only liquid waste through a trap seal and into the gravity drainage system for such function and that meets the requirements of the American society of mechanical engineers (ASME) standard A112.19.2M-95 or the American national standards institute (ANSI) standard Z124.9-94 or any equivalent standard.

§ 45-312 Prohibited plumbing fixtures; residential construction

Except as provided in sections 45-315 and 45-319, beginning January 1, 1994, no person may distribute, sell, offer for sale, import or install any plumbing fixture for use in this state in any new residential construction or for replacing plumbing fixtures in existing residential construction, unless the fixtures meet the following water saving performance standards:

Lavatory faucets and replacement aerators shall be designed to deliver no more than an average of three gallons of water per minute at a pressure of eighty PSI or shall be equipped with permanent flow control devices that allow delivery of no more than an average of three gallons of water per minute at a pressure of eighty PSI.
Kitchen faucets and replacement aerators shall be designed to deliver no more than an average of three gallons of water per minute at a pressure of eighty PSI or shall be equipped with permanent flow control devices that allow delivery of no more than an average of three gallons of water per minute at a pressure of eighty PSI.
Shower heads shall be designed to deliver no more than an average of three gallons of water per minute at a pressure of eighty PSI.
Water closets shall be designed to use no more than an average of one and six-tenths gallons of water per flush.
Urinals shall be designed to use no more than an average of one gallon of water per flush. No urinals may be installed that use a timing device to flush periodically regardless of demand.
Evaporative cooling systems and decorative fountains shall be equipped with water recycling or reuse systems.

§ 45-313 Prohibited plumbing fixtures; commercial, industrial and public construction

Except as provided in sections 45-315 and 45-319, beginning January 1, 1994, no person may distribute, sell, offer for sale, import or install any plumbing fixtures for use in this state in any new commercial, industrial or public construction or for replacing plumbing fixtures in existing commercial, industrial or public construction, unless the fixtures meet the following water saving performance standards:

Lavatory faucets shall be equipped with a mechanism that causes the faucet to close automatically after delivering no more than one-fourth gallon of water or shall be designed to deliver no more than an average of one-half gallon of water per minute at a pressure of eighty PSI.
Shower heads shall be designed to deliver no more than an average of three gallons of water per minute at a pressure of eighty PSI.
Water closets shall be designed to use no more than an average of one and six-tenths gallons of water per flush.
Urinals shall be designed to use no more than an average of one gallon of water per flush. No urinals may be installed that use a timing device to flush periodically regardless of demand.
Evaporative cooling systems and decorative fountains shall be equipped with water recycling or reuse systems.

§ 45-313.01 Water free urinals; state buildings

Every effort shall be made to install water free urinals in all new state buildings constructed after the effective date of this section that constitute capital projects as defined in section 41-790 and to install water free urinals in existing state buildings. The director of the department of administration shall endeavor to install as many water free urinals in as many state buildings as possible if the director determines that, given all of the circumstances, their use is in the best interest of this state.

§ 45-314 Labeling fixtures; violation

A. Before sale by any person who manufactures or distributes to a wholesaler or retailer any plumbing fixture for use in this state, each plumbing fixture that meets the requirements of this article shall be marked with labels, on both box and product, that certify that the fixture complies with this article.

B. The labels required by this section may be removable, but if a building or plumbing permit is required, the labels shall not be removed from the fixtures to which they are attached until the fixtures have been installed and inspected by the local authority having building or plumbing code inspection responsibility for the locality in which the fixtures have been installed.

C. A failure to label a fixture pursuant to this section, or any false or inaccurate labeling of a fixture, constitutes a separate violation of this article in addition to any violation of the prohibition against nonconforming fixtures in sections 45-312 and 45-313.

§ 45-315 Waiver of requirements; unavailability; health or safety requirements

A. If a water conserving plumbing fixture required by this article is unavailable from any reasonable source for a period of more than thirty days, the developer, builder or contractor of a new building or of a modification or addition to an existing building may apply for a waiver of the requirements of this article. The application for a waiver shall be in writing, shall contain sufficient documentation to support the claim that the device will not be available for a period of more than thirty days and shall be delivered to the director, either personally or by certified mail. The director may request additional information in order to determine if the application for waiver is valid.

B. Within three days of receipt of a completed application for a waiver pursuant to subsection A, the director shall either grant or deny the waiver. If the director finds that plumbing fixtures that meet the requirements of this article are unavailable from any reasonable source for a period of more than thirty days, the director may grant to the applicant a written waiver allowing installation of plumbing fixtures that do not meet the standards prescribed by this article for a period of one hundred eighty days from the date the waiver is issued. If plumbing fixtures meeting the requirements of this article become available before the one hundred eighty day period expires, the waiver terminates automatically except as to any noncomplying plumbing fixtures already purchased pursuant to a waiver obtained under this subsection.

C. If a water conserving plumbing fixture required by this article would cause a health or safety hazard or an unusual hardship, including any hardship for persons with disabilities or officially designated historic buildings, or would require a greater quantity of water to be used to operate the fixture properly if installed in a new or existing building, the developer, builder, contractor, owner or tenant of the building may apply for a waiver of the requirements of this article. The application for waiver shall be in writing, shall contain sufficient documentation to support the claim that the fixture would cause a health or safety hazard or an unusual hardship, including any hardship to persons with disabilities or officially designated historic buildings, or would require a greater quantity of water to be used to operate the fixture properly, and shall be delivered to the director, either personally or by certified mail. The director may request additional information in order to determine whether the application for waiver is valid.

D. Within three days of receipt of a completed application for a waiver pursuant to subsection C, the director shall either grant or deny the waiver. If the director finds that the use of a water conserving plumbing fixture required by this article would cause a health or safety hazard or an unusual hardship, including any hardship for persons with disabilities or officially designated historic buildings, or would require a greater quantity of water to be used to operate the fixture properly, the director may grant to the applicant a written waiver allowing installation of noncomplying plumbing fixtures for those uses identified in the application.

§ 45-316 Violation; civil penalties

A. A person who knowingly violates any provision of this article is subject to a civil penalty of not more than one hundred dollars for the first violation. A person who has previously been found in violation of any provision of this article is subject to a civil penalty of not more than two hundred fifty dollars for a second or any subsequent violation. The distribution, sale, offering for sale, importation or installation in this state of each plumbing fixture that fails to comply with the standards prescribed by this article constitutes a separate violation. Tampering with a fixture that was originally designed to comply with the standards prescribed by this article constitutes a violation. If a violation involves installing a fixture that does not comply with the standards prescribed by this article, the person who acquired the building or plumbing permit or the person who installed the fixture, or both, are subject to the penalties specified in this section.

B. The director, or a local official designated pursuant to section 9-500.08 or 11-251.09, shall bring an action to recover penalties under this section in superior court in the county in which the violation occurred, after a hearing conducted pursuant to section 45-318.

C. This section does not apply to the owner or occupant of a residential dwelling who violates this article in connection with the installation of a plumbing fixture in a residential dwelling occupied by the owner or occupant.

D. Except as provided in sections 9-500.08 and 11-251.09, all penalties collected under this article shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund.

§ 45-317 Inspections

The director or the director's authorized representative shall, during normal business hours, have access to places where distributors or retailers sell, store or maintain plumbing fixtures and to unoccupied new residential construction for the purpose of making periodic inspections to determine compliance with this article. New residential construction shall only be inspected prior to issuance of the certificate of occupancy or upon final electrical inspection. Inspections pursuant to this section shall be on reasonable notice to the owner or occupant of the premises to be inspected unless reasonable grounds exist to believe that such notice would frustrate the enforcement of this article. The director may, and if required by law shall, apply for and obtain warrants for entry and inspection to carry out the administration and enforcement purposes of this article.

§ 45-318 Cease and desist order; hearing; injunctive relief

A. If the director, or a local official designated pursuant to section 9-500.08 or 11-251.09, has reason to believe that a person is violating or has violated this article, the director or local official may give the person written notice that the person may appear and show cause at an administrative hearing to be held at least thirty days from the date of service of the notice why the person should not be ordered to cease and desist from the violation. The notice shall inform the person of the date, time and place of the hearing and the consequences of failure to appear.

B. The decision and order of the director or the local official under subsection A of this section may take such form as the director or local official determines to be reasonable and appropriate and may include a determination of violation, a cease and desist order, a recommendation of a civil penalty and an order directing that positive steps be taken to abate or ameliorate any harm or damage arising from the violation. The person affected may seek judicial review of the final decision of the director as provided in section 45-114, subsection B in superior court in the county in which the violation is alleged to have occurred.

C. If the person continues the violation after the director or local official has issued a final decision and order pursuant to subsection B of this section, the director or local official may apply for a temporary restraining order or preliminary or permanent injunction from the superior court according to the Arizona rules of civil procedure. A decision to seek injunctive relief does not preclude other forms of relief or enforcement against the violator.

D. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

§ 45-319 Exception; preemption

A. The requirements of this article do not apply to any plumbing fixture that is documented to have been purchased by a plumbing wholesaler, retailer or end user and that is actually located in this state before January 1, 1994.

B. An ordinance adopted by a county, city or town relating to water conserving low-flow plumbing fixtures is not preempted by this article to the extent that the ordinance sets forth requirements that are at least as restrictive as the requirements of this article or regulates fixtures that are not specified in this article, but any such ordinance is preempted to the extent that its requirements are less restrictive than the requirements of this article.

§ 45-320 Rules

The director may adopt any rules that are deemed necessary to carry out the purposes of this article. The director may adopt, by rule, lists of plumbing fixtures that satisfy the standards prescribed by this article. The director may also adopt, by rule, a list of uses for which plumbing fixtures satisfying the requirements of this article are inappropriate and may exempt such uses from further compliance with those requirements. The director may also amend this list as necessary to reflect advances in technology that allow water conserving plumbing fixtures to be employed for such uses. In adopting any rule defining the type, design or use of any plumbing fixture regulated under this article, the director shall give due consideration to the availability and affordability of the fixture and the method of its installation.

Article 13 Colorado River Water Use Fee

§ 45-331 Definitions

In this article, unless the context otherwise requires:

"Consumptive use" means, for any water user for any program year, the consumptive use as recorded in the final accounting for the most recent calendar year for which a final accounting is available, or if none is recorded, the amount of diversions so recorded.
"Final accounting" means, for any calendar year, the United States bureau of reclamation's final compilation of records of Colorado river diversions, return flows and consumptive uses for the year, compiled pursuant to article V(b) of the decree of the United States supreme court in Arizona v. California, 376 U.S. 340 (1964).
"Lower Colorado river multispecies conservation program" or "program" means the cooperative effort among agencies of the federal government and agencies and political subdivisions of the states of Arizona, California and Nevada and other local public and private parties with a common interest in the water and related resources of the lower Colorado river, including the historic floodplain and reservoirs to the full pool elevations, to provide the basis for compliance with sections 7 and 10(a)(1)(B) of the endangered species act of 1973 (P.L. 93-205; 87 Stat. 884; 16 United States Code sections 1536 and 1539).
"Program year" means the twelve month period beginning October 1 of any calendar year and ending September 30 of the following calendar year.

§ 45-332 Cooperation in lower Colorado river multispecies conservation program

On behalf of the department, the director may enter into one or more agreements with a multi-county water conservation district and other parties for participation in the lower Colorado river multispecies conservation program, including the collection of one or more fees under this article for purposes of the lower Colorado river multispecies conservation program.

§ 45-333 Colorado river water use fee; purpose

A. The director may assess and collect annual Colorado river water use fees from each person who diverts and consumptively uses water in this state from the mainstream of the Colorado river as recorded in the final accounting. This fee does not apply to persons who are paying fees and are current in their payments under agreements with a multi-county water conservation district and other parties for participation in the lower Colorado river multispecies conservation program with respect to the use of Colorado river water.

B. The director shall set the amount of a fee under this section each year according to the guidelines in section 45-334.

C. Any monies collected pursuant to this section shall be segregated from other revenues and deposited, pursuant to sections 35-146 and 35-147, in a fund designated as the Colorado river water use fee clearing account. Each month, on notification by the director, the state treasurer shall pay all of the monies in the clearing account to an account designated by a multi-county water conservation district established under title 48, chapter 22 to be used solely for the lower Colorado river multispecies conservation program and for no other purpose.

§ 45-334 Setting Colorado River water use fee

A. In setting Colorado River water use fees under this article:

Not later than July 1 of each year, the director shall set the Colorado River water use fees for the following program year. The director shall consider the following in setting the amount of the fees:

(a) The consumptive use for that program year by the persons to whom the fee will be assessed.

(b) The payment obligations that apply to similar water users under agreements to fund the lower Colorado River multispecies conservation program.

(c) The amount of monies necessary to fund the lower Colorado River multispecies conservation program for that program year.

(d) The amount of monies expected to be available to fund the lower Colorado River multispecies conservation program during the program year from other sources.

The director may establish classes of water users for the purpose of assigning graduated fee rates to the respective classes.
The director shall consider the date of any contract or other right to use Colorado River water and the type of water use when assigning fee rates.
The director shall enter in the department's records a statement of the fees for the following program year and transmit a copy of the statement to the state treasurer.
Before setting the fees, the director shall consult with representatives of the water users which will be assessed for the fees. The director shall publish notice of the fees and provide a comment period of at least thirty days before setting the final fee amounts.
Within thirty days after the director sets fees for a program year, the director shall give written notice of the fees to each person with consumptive use.
The director shall calculate the total amount of the fee that a person must pay for the consumptive use of Colorado River water for a program year by multiplying the applicable annual fee for that program year by the consumptive use for the person for the program year. The director may reduce the amount of a person's fee by the value of any services or tangible assets, including land or water, contributed by the person to, and accepted by, the federal government for use in the lower Colorado River multispecies conservation program.

B. The director shall give written notice of the total amount of the fee that a person must pay under this section no later than August 15 before the beginning of the program year.

§ 45-335 Payment of fee; penalty for delinquency

A. If the director assesses a fee pursuant to this article in any year, a person to whom the fee is assessed must pay the fee within forty-five days after the person receives written notice of the total amount of the fee from the director.

B. If a person fails to pay the fee when due, the director may assess and collect a penalty of ten per cent of the unpaid fee, without compounding, for each month or portion of a month that the fee is delinquent. The total penalty assessed shall not exceed sixty per cent of the unpaid fee. An action to recover penalties under this subsection shall be brought in the superior court in Maricopa county. Any penalties collected shall be deposited, pursuant to sections 35-146 and 35-147, in the Colorado river water use fee clearing account established pursuant to section 45-333.

Article 14 Community Water System Planning and Reporting Requirements

§ 45-341 Definitions

In this article, unless the context otherwise requires:

"Community water system" means a public water system that serves at least fifteen service connections used by year-round residents of the area served by the system or that regularly serves at least twenty-five year-round residents of the area served by the system. A person is a year-round resident of the area served by a system if the person’s primary residence is served water by that system.
"Large community water system" means a community water system that serves water to more than one thousand eight hundred fifty persons.
"Public water system" means an entity that distributes or sells water and that qualifies as a public water system under section 49-352, subsection B.
"Small community water system" means a community water system that does not qualify as a large community water system.

§ 45-342 System water plan; components; exceptions

A. Except as provided in subsections D and E of this section, by the dates specified in subsections B or C of this section, each community water system shall prepare and submit to the director a system water plan that includes the following components:

A water supply plan.
A drought preparedness plan.
A water conservation plan.

B. Except as provided in subsection C of this section, a large community water system shall submit its first system water plan to the director on or before January 1, 2007, and shall submit an updated plan within six months prior to January 1 of every fifth calendar year thereafter. A small community water system shall submit its first system water plan to the director on or before January 1, 2008, and shall submit an updated plan within six months prior to January 1 of every fifth calendar year thereafter. For a small community water system that submits its request to the director at least ninety days before the filing deadline, the director may extend the time for filing the first water system plan. If a community water system revises its system water plan after submitting the plan to the director, the community water system shall submit the revised plan to the director within sixty days from the date of revision.

C. If more than one community water system serves water to residents within a city or town, two or more of the community water systems serving water to residents within that city or town may coordinate their efforts in preparing the plans required by this section and may submit a joint plan that contains the information required in this section for that portion of the community supplied by the community water systems instead of submitting individual water system plans. Community water systems that submit a joint plan pursuant to this subsection shall submit the plan to the director by the date on which a small community water system is required to submit its system water plan under subsection B of this section. The director may extend the time for filing the first water system plan for a joint plan that includes a small community water system if the request is received ninety days before the filing deadline.

D. A community water system that has been designated as having an assured water supply pursuant to section 45-576 is exempt from the requirement to submit a water supply plan under this section.

E. A community water system regulated as a large municipal provider under chapter 2, article 9 of this title is exempt from the requirement to submit a water conservation plan under this section. The director shall exempt a community water system regulated as a small municipal provider under chapter 2, article 9 of this title from the requirement to submit a water conservation plan under this section if the community water system:

Petitions the director for an exemption prior to January 1, 2007.
Demonstrates, under reasonable growth projections, that it will be regulated as a large municipal provider under chapter 2, article 9 of this title prior to January 1, 2012.

F. A community water system that has previously submitted information required by this section to the director may make a written request to the director to be exempted from the requirement to submit the information in its system water plan. The director shall grant the exemption if the director determines that the information is already on file with the department.

G. The director shall review a system water plan, including a revised plan, submitted by a community water system pursuant to subsection B of this section and shall notify the community water system in writing as to whether the plan complies with this section. If the director determines that the plan does not comply with this section, the director shall give written notice of that determination to the community water system and give the community water system at least one hundred twenty days to make revisions or additions as are necessary to bring the plan into compliance. If the community water system does not bring the plan into compliance by the date specified in the notice, the director shall provide notice of the noncompliance to the governing bodies of the cities, towns and counties located within the service area of the community water system. If the director determines that the plan is in compliance with this section but that changes would improve the plan, the director shall give written notice of the changes to the community water system but the water system shall not be required to make the changes.

H. The water supply plan shall evaluate the water supply needs in the service area and propose a strategy to meet identified needs. The plan shall include:

A list and description of service area lands, sources of supply, including emergency sources, well registration numbers and water levels at the well sites, if known, and storage and treatment facilities. The list shall not include water levels at well sites that are sources of supply for hard rock mining or metallurgical processing or industrial uses related to hard rock mining or metallurgical processing.
A map and description of existing transmission and distribution facilities, unless previously provided pursuant to section 45-498. For a small community water system a map is not required.
A description of monthly system production data categorized by the system's sources of supply and, for systems that use meters to measure withdrawals and diversions, a summary of system average daily demands, maximum monthly demands and an estimate of peak day demands for the past five years.
A list, description and map of existing interconnections unless previously provided pursuant to section 45-498, and the quantities of water sold to or purchased from other water systems during the previous five years, unless previously provided pursuant to section 45-632. For a small community water system a map is not required.
An analysis of present and future water supply demands for the next five, ten and twenty years.

I. The drought preparedness plan shall be designed to meet the specific needs of the water system for which it applies and shall include:

The name, address and telephone number of the community water system and the names of the officers or other persons responsible for directing operations during a water shortage emergency.
Drought or emergency response stages providing for the implementation of measures in response to reduction in available water supply due to drought or infrastructure failure.
A plan of action that the community water system will take to respond to drought or water shortage conditions, including:

(a) Provisions to actively inform the public of the water supply shortage and a program for continued education and information regarding implementation of the drought preparedness plan.

(b) Development of emergency supplies, which may include identification of emergency or redundant facilities to withdraw, divert or transport substitute supplies of the same or other types of water.

(c) Specific water supply or water demand management measures for each stage of drought or water shortage conditions, subject to approval by the corporation commission if the community water system is a public service corporation. This requirement may be met by providing a curtailment tariff on file with the corporation commission.

J. The water conservation plan shall be designed to increase the efficiency of the water system, reduce waste and encourage consumer water conservation efforts. The water conservation plan shall be designed to meet the specific needs of the community water system and shall include both demand and supply management measures including the following:

Feasible measures that may be implemented to determine and control lost and unaccounted for water.
Consideration of water rate structures that encourage efficient use of water, as set by the community water system’s governing body, subject to approval by the corporation commission if the community water system is a public service corporation.
A continuing conservation education program containing provisions to actively inform the public of drought conditions and information regarding conservation measures to reduce vulnerability from drought conditions, including:

(a) Curtailment of nonessential water uses.

(b) Affordable efficiency technologies for indoor and outdoor use.

(d) Reuse and recycling programs.

K. The water conservation plan shall be implemented by the community water system within twelve months after receiving written notification from the director that the plan complies with this section. For a community water system that receives a notice pursuant to subsection G of this section that the water conservation plan does not comply with this section, the water conservation plan shall be implemented within twelve months after the expiration of the date by which the system is required to make revisions or additions to the plan to bring it into compliance, as specified in the notice given to the system under subsection G of this section.

L. The director shall prepare forms that small community water systems may complete and submit as their system water plan under this section. The director shall distribute the forms on a timely schedule and furnish them upon request. Failure to receive or obtain a form does not relieve any community water system from the requirement to file a system water plan by the date prescribed in subsections B or C of this section. The director of water resources shall coordinate with the corporation commission and the director of environmental quality in establishing the form to facilitate the reporting of similar or identical information to the department of water resources and the corporation commission or to the department of water resources and the department of environmental quality.

M. The director shall prepare a guidance document to assist community water systems in preparing the water system plan. The director shall cooperate with cities and towns, private water companies and irrigation districts that are community water systems in developing the guidance document and the form described in subsection L of this section.

§ 45-343 Records and annual report of water use; penalty

A. Each community water system that is required to file an annual report under this section and that uses meters to measure water withdrawals and diversions shall maintain current, complete, true and correct records of its withdrawals, diversions and deliveries of water in the form as prescribed by the director. Each community water system that is required to file an annual report under this section and that does not use meters to measure water withdrawals and diversions shall maintain records of the estimated amount of its withdrawals, diversions and deliveries of water in the form as prescribed by the director.

B. An annual report shall be filed with the director by each community water system. A community water system is exempt from the reporting requirements in this section if it is required to file an annual report under section 45-632.

C. A community water system required to file an annual report under this section shall report the following information:

If water was pumped or diverted by the community water system during the year:

(a) The quantity of water pumped or diverted and the well registration numbers of any wells used to pump or divert the water. Community water systems that do not use meters to measure water pumped or diverted shall estimate the quantity of water pumped or diverted.

(b) The number of customers to whom the community water system delivered water during the year.

If water was received by the community water system from another person during the year:

(a) The name of the person from whom the water was obtained.

(b) If the water was pumped or diverted, the registration numbers of any wells used to pump or divert the water, if known.

(d) The number of customers to whom the community water system delivered water during the year.

(e) An identification of the number of storage facilities and the storage capacity of each facility.

If effluent that is generated from a wastewater treatment facility was used or received by the community water system during the year, the estimated quantity of effluent generated from the wastewater treatment facility during the year, the estimated quantity of effluent used directly from the wastewater treatment facility during the year and the specific uses to which the effluent was applied during the year.

D. Community water systems required to file annual reports under this section shall maintain a current map clearly delineating its service area and distribution system.

E. The records and reports required to be kept and filed under this section shall be in the form as the director prescribes. The director shall prepare blank forms and distribute them on a timely schedule and furnish them upon request. Failure to receive or obtain the forms does not relieve any person from keeping the required records or making any required report. The director shall cooperate with cities and towns, private water companies and irrigation districts that are community water systems in establishing the form of the records and reports to be kept and filed by them. The director of water resources shall coordinate with the corporation commission and the director of environmental quality in establishing the form of the reports required to be filed by this section to facilitate the reporting of similar or identical information to the department of water resources and the corporation commission or to the department of water resources and the department of environmental quality.

F. If a community water system fails to timely file the report prescribed by this section, the director shall provide a written notice to the water system that requires compliance within sixty days of the date of the notice. If the water system does not comply within the sixty day period, the director shall provide notice of that noncompliance to the governing bodies of the cities, towns and counties located within the service area of the water system.

G. A violation of this article does not constitute a violation of chapter 2 of this title.

Article 15 Watershed Improvement Program

§ 45-351 Watershed improvement program; purpose; projects; funding

A. The watershed improvement program is established in the department under the authority of the director for the purpose of selective control, reduction or removal of noxious brush and other vegetation and for the revegetation of land on which brush and vegetation has been controlled, reduced or removed.

B. The watershed improvement program may provide funding for projects that are designed to control, reduce or remove brush from a watershed or a portion of a watershed, consistent with the purposes of the program.

C. Any person, organization or political subdivision is eligible to apply for project funding from the program.

D. The watershed improvement program shall be funded from any monies made available for that purpose from the Arizona water protection fund established by section 45-2111, from any monies made available for that purpose from the department and from any other monies received by the program.

§ 45-352 Program administration; rules; project criteria; report

A. The department shall adopt rules to carry out the purposes of this article, including rules that prescribe criteria for project proposals and that establish priorities for projects for each funding cycle, including a priority for projects that balance the most critical needs.

B. The department may employ or contract with persons as reasonably necessary to implement this article.

C. The department shall report to the speaker of the house of representatives, the president of the senate and the governor on or before December 31 each year regarding the activities of the watershed improvement program during the preceding fiscal year and shall provide a copy of the report to the secretary of state. The department shall make the report available to the public by posting the report on the department's website.

Chapter 2 Groundwater Code

Article 1 Administration

§ 45-401 Declaration of policy

A. The legislature finds that the people of Arizona are dependent in whole or in part upon groundwater basins for their water supply and that in many basins and sub-basins withdrawal of groundwater is greatly in excess of the safe annual yield and that this is threatening to destroy the economy of certain areas of this state and is threatening to do substantial injury to the general economy and welfare of this state and its citizens. The legislature further finds that it is in the best interest of the general economy and welfare of this state and its citizens that the legislature evoke its police power to prescribe which uses of groundwater are most beneficial and economically effective.

B. It is therefore declared to be the public policy of this state that in the interest of protecting and stabilizing the general economy and welfare of this state and its citizens it is necessary to conserve, protect and allocate the use of groundwater resources of the state and to provide a framework for the comprehensive management and regulation of the withdrawal, transportation, use, conservation and conveyance of rights to use the groundwater in this state.

§ 45-402 Definitions

In this chapter, unless the context otherwise requires:

"Accounting period" means the calendar year, except such other twelve-month period as may be otherwise agreed on by the director and the owner of a farm or a district on behalf of its landowners.
"Active management area" means a geographical area that has been designated pursuant to article 2 of this chapter as requiring active management of groundwater or, in the case of the Santa Cruz active management area, active management of any water, other than stored water, withdrawn from a well.
"Animal industry use" means the production, growing and feeding of livestock, range livestock or poultry, as such terms are defined in section 3-1201. Animal industry use is included in the term and general treatment of industry in this chapter, unless specifically provided otherwise.
"City" or "town" means a city or town incorporated or chartered under the constitution and laws of this state.
"Conservation district" means a multi-county water conservation district established under title 48, chapter 22.
"Convey" means to transfer the ownership of a grandfathered right from one person to another.
"Date of the designation of the active management area" means:

(a) With respect to an initial active management area, June 12, 1980.

(b) With respect to a subsequent active management area, the date on which the director's order designating the active management area becomes effective as provided in section 45-414 or the date on which the final results of an election approving the establishment of the active management area pursuant to section 45-415 are certified by the board of supervisors of the county or counties in which the active management area is located.

"Exempt well" means a well that has a pump with a maximum capacity of not more than thirty-five gallons per minute and that is used to withdraw groundwater pursuant to section 45-454.
"Expanded animal industry use" means increased water use by an animal industrial enterprise on the land in use by the enterprise on June 12, 1980 or on immediately adjoining land, excluding irrigation uses.
"Farm" means an area of irrigated land that is under the same ownership, that is served by a water distribution system common to the irrigated land and to which can be applied common conservation, water measurement and water accounting procedures.
"Farm unit" means:

(a) With respect to areas outside an active management area and with respect to an active management area other than the Santa Cruz active management area, one or more farms that are irrigated with groundwater and that are contiguous or in proximity to each other with similar soil conditions, crops and cropping patterns.

(b) With respect to the Santa Cruz active management area, one or more farms that are irrigated with water, other than stored water, withdrawn from a well and that are contiguous or in proximity to each other with similar soil conditions, crops and cropping patterns.

"Grandfathered right" means a right to withdraw and use groundwater pursuant to article 5 of this chapter based on the fact of lawful withdrawals and use of groundwater before the date of the designation of an active management area.
"Groundwater basin" means an area that, as nearly as known facts allow as determined by the director pursuant to this chapter, may be designated so as to enclose a relatively hydrologically distinct body or related bodies of groundwater, which shall be described horizontally by surface description.
"Groundwater replenishment district" or "replenishment district" means a district that is established pursuant to title 48, chapter 27.
"Groundwater withdrawal permit" means a permit issued by the director pursuant to article 7 of this chapter.
"Initial active management area" means the Phoenix, Prescott or Pinal active management area established by section 45-411, the Tucson active management area established by section 45-411 and modified by section 45-411.02 and the Santa Cruz active management area established by section 45-411.03.
"Integrated farming operation" means:

(a) With respect to land within an irrigation non-expansion area, more than ten acres of land that are contiguous or in close proximity, that may be irrigated pursuant to section 45-437, that are not under the same ownership and that are farmed as a single farming operation.

(b) With respect to land within an active management area, two or more farms that are contiguous or in close proximity, that collectively have more than ten irrigation acres and that are farmed as a single farming operation.

"Irrigate" means to apply water to two or more acres of land to produce plants or parts of plants for sale or human consumption, or for use as feed for livestock, range livestock or poultry, as such terms are defined in section 3-1201.
"Irrigation acre" means an acre of land, as determined in section 45-465, subsection B, to which an irrigation grandfathered right is appurtenant.
"Irrigation district" means a political subdivision, however designated, established pursuant to title 48, chapter 17 or 19.
"Irrigation grandfathered right" means a grandfathered right determined pursuant to section 45-465.
"Irrigation non-expansion area" means a geographical area that has been designated pursuant to article 3 of this chapter as having insufficient groundwater to provide a reasonably safe supply for the irrigation of the cultivated lands at the current rate of withdrawal.
"Irrigation use" means:

(a) With respect to areas outside an active management area and with respect to an active management area other than the Santa Cruz active management area, the use of groundwater on two or more acres of land to produce plants or parts of plants for sale or human consumption, or for use as feed for livestock, range livestock or poultry, as such terms are defined in section 3-1201.

(b) With respect to the Santa Cruz active management area, the use of water, other than stored water, withdrawn from a well on two or more acres of land to produce plants or parts of plants for sale or human consumption, or for use as feed for livestock, range livestock or poultry, as such terms are defined in section 3-1201.

"Irrigation water duty" or "water duty" means the amount of water in acre-feet per acre that is reasonable to apply to irrigated land in a farm unit during the accounting period, as determined by the director pursuant to sections 45-564 through 45-568 or as prescribed in section 45-483.
"Member land" means real property that qualifies as a member land of a conservation district as provided by title 48, chapter 22.
"Member service area" means the service area of a city, town or private water company that qualifies as a member service area of a conservation district as provided by title 48, chapter 22.
"Non-irrigation grandfathered right" means a grandfathered right determined pursuant to section 45-463, 45-464, 45-469 or 45-472.
"Non-irrigation use" means:

(a) With respect to areas outside an active management area and with respect to an active management area other than the Santa Cruz active management area, a use of groundwater other than an irrigation use.

(b) With respect to the Santa Cruz active management area, a use of water, other than stored water, withdrawn from a well, other than an irrigation use.

"Person" means an individual, public or private corporation, company, partnership, firm, association, society, estate or trust, any other private organization or enterprise, the United States, any state, territory or country or a governmental entity, political subdivision or municipal corporation organized under or subject to the constitution and laws of this state.
"Private water company" means:

(a) With respect to areas outside an active management area and with respect to an active management area other than the Santa Cruz active management area, any entity that distributes or sells groundwater, except a political subdivision or an entity that is established pursuant to title 48 and that is not regulated as a public service corporation by the Arizona corporation commission under a certificate of public convenience and necessity. A city or town is not a private water company.

(b) With respect to the Santa Cruz active management area, any entity that distributes or sells water, other than stored water, withdrawn from a well, except a political subdivision or an entity that is established pursuant to title 48 and that is not regulated as a public service corporation by the Arizona corporation commission under a certificate of public convenience and necessity. A city or town is not a private water company.

"Service area" means:

(a) With respect to a city or town, the area of land actually being served water, for a non-irrigation use, by the city or town plus:

(i) Additions to such area that contain an operating distribution system owned by the city or town primarily for the delivery of water for a non-irrigation use.

(ii) The service area of a city, town or private water company that obtains its water from the city pursuant to a contract entered into before the date of the designation of the active management area.

(b) With respect to a private water company, the area of land of the private water company actually being served water, for a non-irrigation use, by the private water company plus additions to such area that contain an operating distribution system owned by the private water company primarily for the delivery of water for a non-irrigation use.

"Service area of an irrigation district" means:

(a) With respect to an irrigation district that was engaged in the withdrawal, delivery and distribution of groundwater as of the date of the designation of the active management area, the area of land within the boundaries of the irrigation district actually being served water by the irrigation district at any time during the five years preceding the date of the designation of the active management area plus any areas as of the date of the designation of the active management area within the boundaries of the irrigation district that contain an operating system of canals, flumes, ditches and other works owned or operated by the irrigation district. The service area may be modified pursuant to section 45-494.01.

(b) With respect to an irrigation district that was not engaged in the withdrawal, delivery and distribution of groundwater as of the date of the designation of the active management area:

(i) The acres of member lands within the boundaries of the irrigation district that were legally irrigated at any time from January 1, 1975 through January 1, 1980 for initial active management areas or during the five years preceding the date of the designation of the active management area for subsequent active management areas.

(ii) Any areas of land that contain an operating system of canals, flumes, ditches and other works owned or operated by the irrigation district for the withdrawal, delivery and distribution of water, except that additional areas containing an operating system of canals, flumes, ditches and other works owned or operated by the irrigation district may not be added after December 31, 2027.

"Stored water" means water that is stored underground for the purpose of recovery pursuant to a permit issued under chapter 3.1 of this title.
"Subbasin" means an area that, as nearly as known facts allow as determined by the director pursuant to this chapter, may be designated so as to enclose a relatively hydrologically distinct body of groundwater within a groundwater basin, which shall be described horizontally by surface description.
"Subsequent active management area" means an active management area established after June 12, 1980 pursuant to article 2 of this chapter.
"Subsidence" means the settling or lowering of the surface of land that results from the withdrawal of groundwater.
"Transportation" means the movement of groundwater from the point of withdrawal to the point of use.
"Type 1 non-irrigation grandfathered right" means a non-irrigation grandfathered right associated with retired irrigated land and determined pursuant to section 45-463, 45-469 or 45-472.
"Type 2 non-irrigation grandfathered right" means a non-irrigation grandfathered right not associated with retired irrigated land and determined pursuant to section 45-464.
"Water district" means an active management area water district that is established under title 48, chapter 28 and that has adopted an ordinance or resolution to undertake water district groundwater replenishment obligations as defined and used in title 48, chapter 28, article 7.
"Water district member land" means real property that qualifies as water district member land of a water district as provided by title 48, chapter 28.
"Water district member service area" means the service area of the city, town or private water company that qualifies as a water district member service area of a water district as provided by title 48, chapter 28.
"Well" means a man-made opening in the earth through which water may be withdrawn or obtained from beneath the surface of the earth except as provided in section 45-591.01.

§ 45-403 Designation of groundwater basins and sub-basins; hearing

A. Within eighteen months of the effective date of this section, the director shall propose boundaries for all groundwater basins and sub-basins of groundwater basins in this state not included within initial active management areas established pursuant to section 45-411.

B. Within twenty-four months of the effective date of this section, the director shall hold public hearings to consider the final boundaries of groundwater basins and sub-basins in this state not included within initial active management areas established pursuant to section 45-411. The director shall give reasonable notice of the hearing appropriate to the circumstances which shall include the publication once each week for two consecutive weeks in a newspaper of general circulation in each county in which the proposed groundwater basin is located. Any notice shall contain the time and place of the hearing, the legal description and a map clearly identifying and describing all lands to be included in the proposed groundwater basin and any sub-basin and any other information the director deems necessary.

C. The hearings shall be held at the county seat of the county in which the major portion of the land in the proposed groundwater basin is located as soon as practicable but no less than thirty days and no more than sixty days after the first publication of the notice of the hearing. At the hearing, the director shall present the factual data in his possession in support of the proposed action. Any person may appear at the hearing, either in person or by representative, and submit oral or documentary evidence for or against the proposed action. In making his determination, the director shall give full consideration to public comment and to recommendations made by local political subdivisions.

§ 45-404 Findings on hearing; maps; order for boundaries of groundwater basin; review and modification of boundaries

A. Within sixty days after the hearing, the director shall make and file in the director's office written findings with respect to matters considered during the hearing. For each groundwater basin, the director shall prepare and file in the director's office:

A map clearly identifying all lands included within the groundwater basin and its sub-basins.
Factual data justifying the boundaries of the groundwater basin and its sub-basins.
An order designating the boundaries of each groundwater basin and its sub-basins.

B. The findings and order shall be published in the manner and for the length of time prescribed for the publication of notice of the public hearing, and the order is effective when published for the final time. The materials required by subsection A of this section and a transcript of the hearing are public records of the department and shall be available for examination by the public during regular business hours. The findings and order of the director are subject to rehearing or review and to judicial review as provided in section 45-114, subsection C.

C. The director shall file a true copy of the map in the office of the county recorder of the county or counties in which the groundwater basin is located.

D. The director may, as conditions require and factual data justify, review and modify the boundaries of any groundwater basin or any sub-basin of a groundwater basin except for groundwater basins and sub-basins of a groundwater basin that are included within an initial active management area. The review and modification of boundaries of a groundwater basin or sub-basin included within a subsequent active management area or irrigation non-expansion area shall follow procedures set forth in sections 45-417 and 45-438. Any modification of boundaries designated pursuant to this article shall follow as closely as practicable the procedural requirements of section 45-403 and this section.

§ 45-405 Judicial review of decisions of the director; assignment of actions for judicial review

A. This section and sections 45-406 and 45-407 govern all actions for judicial review of decisions of the director under this chapter, except those decisions made pursuant to section 45-476.01, subsection E. An action for judicial review under this chapter extends to all questions of law and fact presented by the record.

B. Administrative and public hearings shall be recorded manually or electronically. If the person seeks judicial review of a decision of the director, a transcript shall be made as provided by law.

C. Each action for judicial review under this chapter shall be assigned to a judge whom the chief justice of the supreme court has specifically designated, pursuant to section 45-406, to hear actions for judicial review under this chapter.

§ 45-406 Designation of judges; publication of designated judges

A. The chief justice of the supreme court shall designate at least one judge, but not more than five judges, of the superior court to hear actions for judicial review under this chapter. The chief justice of the supreme court shall also specify the particular county or counties for which each designated judge will be available for assignment.

B. The supreme court shall publish in the rules of the supreme court the name of each designated judge and the county or counties in which each designated judge will be available for assignment.

C. The presiding judge for the county in which an action for judicial review has been filed under this chapter shall assign the action for judicial review to the appropriate judge designated by the chief justice of the supreme court and shall advise in writing the presiding judge and clerk of the superior court in the county in which the designated judge ordinarily sits about the assignment.

§ 45-407 Stay of director's decision; precedence of actions for judicial review; review by the court of appeals

A. The decision of the director shall not be stayed pending an action for judicial review, except that the judge to whom the action for judicial review has been assigned may stay the decision of the director with or without bond upon a showing of good cause. In determining if good cause exists under the circumstances, the court may consider whether:

The public interest will be adversely affected by a stay.
The stay will harm others.
There is a high probability that the appellant will succeed on the merits.
The appellant will suffer irreparable harm before a decision on the merits can be rendered.

B. For the benefit of the people of this state, actions for judicial review under this chapter have precedence, in every court, over all other civil proceedings.

C. The final decision of the superior court is appealable in the same manner as in civil actions generally and shall be governed by the rules of appellate procedure.

Article 2 Active Management Areas

§ 45-411 Initial active management areas; maps

A. Four initial active management areas are established on the effective date of this section. The four initial active management areas are:

The Tucson active management area which includes the upper Santa Cruz and Avra valley sub-basins.
The Phoenix active management area which includes the east Salt river valley, west Salt river valley, Fountain Hills, Carefree, lake Pleasant, Rainbow valley and Hassayampa sub-basins.
The Prescott active management area which includes the Little Chino and upper Agua Fria sub-basins.
The Pinal active management area which includes the Maricopa-Stanfield, Eloy, Aguirre valley, Santa Rosa valley and Vekol valley sub-basins.

B. The boundaries of the initial active management areas established under subsection A of this section are shown on the maps filed in the office of the secretary of state on the effective date of this chapter.

C. A true copy of the maps identifying the initial active management areas established under subsection A of this section shall be on file in the department and shall be available for examination by the public during regular business hours. A true copy of the map of each initial active management area established under subsection A of this section shall also be filed in the office of the county recorder of the county or counties in which the active management area is located.

§ 45-411.01 Exemptions from irrigation water duties, conservation requirements for distribution of groundwater and portions of groundwater withdrawal fee for portions of Phoenix active management area; fee; review

A. Each person who is entitled to use groundwater pursuant to an irrigation grandfathered right under article 5 of this chapter on irrigation acres located within the area delineated for exemption under subsection E of this section is exempt, beginning January 1, 1989 through December 31, 2034, from any irrigation water duties or intermediate water duties established or required to be established for those irrigation acres in the management plans for the first, second, third, fourth and fifth management periods for the Phoenix active management area adopted pursuant to article 9 of this chapter.

B. The Arlington canal company, the Buckeye water conservation and drainage district and the St. John's irrigation district, or their successors, are exempt, beginning January 1, 1989 through December 31, 2034, from any applicable conservation requirements for the distribution of groundwater established in the management plans for the first, second, third, fourth and fifth management periods for the Phoenix active management area adopted pursuant to article 9 of this chapter.

C. No groundwater withdrawal fee shall be levied or collected pursuant to section 45-611 and no water quality assurance fee shall be levied or collected pursuant to section 45-616 for:

Groundwater withdrawn during calendar years 1989 through 2034 for irrigation use on irrigation acres within the area exempted from irrigation water duties and intermediate water duties under subsection A of this section.
Groundwater withdrawn and used in the area delineated for exemption under subsection E of this section during calendar years 1999 through 2034 for a non-irrigation use pursuant to section 45-519, subsection B, if the user of the groundwater pays a fee of $500 to the director by March 31 of each year following a year in which the groundwater was used. The director shall deposit, pursuant to sections 35-146 and 35-147, the monies collected under this paragraph in the water quality assurance revolving fund established by section 49-282.

D. Except as provided in subsection G of this section, a water duty exemption fee of $.25 per irrigation acre per year shall be paid to the department for each irrigation acre in the exempted area. The water duty exemption fee shall be paid to the department not later than March 31 of each year from 1990 through 2035 for the preceding year by each person who owns irrigation acres within the exempted area as of December 31 of the year preceding the date the payment is due except that, if the Arlington canal company, the Buckeye water conservation and drainage district or the St. John's irrigation district, or a successor, delivers water to the irrigation acres during the year preceding the date payment is due, the fee shall be paid by the company or district delivering water to the irrigation acres. If a person who is required to pay a fee pursuant to this subsection fails to pay the fee for the calendar year in question on or before March 31 of the following year, the director may assess and collect a penalty of ten percent of the unpaid fee, without compounding, for each month or portion of a month that the fee is delinquent. The total penalty assessed under this subsection shall not exceed sixty percent of the unpaid fee. The director shall deposit, pursuant to sections 35-146 and 35-147, all monies collected by the department under this subsection in the water resources fund established by section 45-117.

E. The boundaries of the exempted area under this section are delineated on a map of the Phoenix active management area filed in the office of the secretary of state on May 12, 1988. A true copy of the map filed in the office of the secretary of state shall be on file in the department and shall be available for examination by the public during regular business hours.

F. The director shall review the hydrologic conditions within the area delineated on the map filed in the office of the secretary of state pursuant to subsection E of this section. The director shall consult with representatives of the Arlington canal company, the Buckeye water conservation and drainage district and the St. John's irrigation district, or their successors, and all cities and towns within the exempted area, on the scope of the review before beginning the review and on the status of the review periodically during the course of the review. The director shall submit a recommendation to the governor, the president of the senate and the speaker of the house of representatives not later than November 15, 2031 regarding extending the exemptions established in this section.

G. A person who owns an irrigation grandfathered right appurtenant to ten or fewer irrigation acres located in the exempt area is exempt from the payment of a water duty exemption fee for the acres prescribed by subsection D of this section unless the irrigation acres are part of an integrated farming operation. The exemption provided by this subsection does not apply to the Arlington canal company, the Buckeye water conservation and drainage district or the St. John's irrigation district, or any successor, in any year in which the company or district delivers water to the irrigation acres.

§ 45-411.02 Modification of boundaries of Tucson active management area; map

A. Beginning July 1, 1994, the boundaries of the Tucson active management area are modified to exclude the portion of the upper Santa Cruz valley sub-basin included within the Santa Cruz active management area on that date. The modified boundaries of the Tucson active management area are shown on the map filed in the office of the secretary of state on June 10, 1994.

B. A true copy of the map identifying the modified boundaries of the Tucson active management area shall be on file in the department and shall be available for examination by the public during regular business hours. A true copy of the map shall also be filed in the office of the county recorder in the counties in which the active management area is located.

§ 45-411.03 Santa Cruz active management area; map

A. Beginning July 1, 1994, the Santa Cruz active management area is established as an initial active management area which consists of a portion of the upper Santa Cruz valley sub-basin. The boundaries of the Santa Cruz active management area are shown on the map filed in the office of the secretary of state on June 10, 1994.

B. A true copy of the map identifying the boundaries of the Santa Cruz active management area shall be on file in the department and shall be available for examination by the public during regular business hours. A true copy of the map shall also be filed in the office of the county recorder in the counties in which the active management area is located.

§ 45-411.04 Declaration of policy and intent; Santa Cruz active management area

A. The legislature finds that the hydrology and water resource management issues within the upper Santa Cruz river basin are unique due to the international nature of the river basin. The Tucson active management area includes areas beyond the one hundred kilometer border region established by treaties and agreements between the United States and Mexico relating to environmental issues. It is the finding of the legislature that a new active management area is needed in the immediate vicinity of the United States/Mexico border for the upper Santa Cruz river basin in order to facilitate binational negotiations for coordinated management of the water resources of the Santa Cruz river. It is the further finding of the legislature that the proposed boundaries designated for the Santa Cruz active management area are based on hydrologic parameters, such that the portion of the Santa Cruz river in Arizona has similar hydrologic characteristics with that portion of the Santa Cruz river in the State of Sonora, Mexico.

B. The legislature also finds that the coordinated management of surface water rights and groundwater rights set forth in this enactment has been specifically designed to address the unique problems for water resource management that are described in subsection A of this section and that are posed by the hydrology of the upper Santa Cruz river. Coordinated management of surface water rights and groundwater rights is necessary in the area designated as the Santa Cruz active management area for public health, safety and welfare reasons.

C. It is the express intent of the legislature that the creation of the Santa Cruz active management area is not to affect the definition of, or rights to, the surface waters and the groundwaters within this state, or to establish any precedent that could be used in a court of law to define, limit, or extend the rights of this state or the United States of America over the surface waters and groundwaters found within this state or to define or limit the legal distinction between surface water and groundwater in this state.

D. The legislature finds that the varied water interests within the Santa Cruz active management area have sought the creation of this active management area to facilitate their own participation in the coordinated management of the water resources within this active management area and participation in the negotiations for binational coordination of water resource planning for the upper Santa Cruz active management area. While the coordinated management can include all naturally occurring waters within the basin, it is not the intent of any party in the Santa Cruz active management area or this legislature to modify or amend in any way the fundamental laws and rights to surface water and groundwater pursuant to the laws of this state.

§ 45-412 Subsequent active management areas; criteria; review of groundwater basins not subject to active management

A. The director may designate an area which is not included within an initial active management area, pursuant to section 45-411, as a subsequent active management area if the director determines that any of the following exists:

Active management practices are necessary to preserve the existing supply of groundwater for future needs.
Land subsidence or fissuring is endangering property or potential groundwater storage capacity.
Use of groundwater is resulting in actual or threatened water quality degradation.

B. An active management area designated pursuant to this section may include more than one groundwater basin but shall not be smaller than a groundwater basin or include only a portion of a groundwater basin, except for the regional aquifer systems of northern Arizona.

C. The director shall periodically review all areas which are not included within an active management area to determine whether such areas meet any of the criteria for active management areas as prescribed in this section.

§ 45-413 Hearing on designation of subsequent active management areas and boundaries; notice; procedures

A. If the director proposes to designate a subsequent active management area pursuant to section 45-412, subsection A, the director shall hold a public hearing to consider:

Whether to issue an order declaring the area an active management area.
The boundaries and any sub-basins of the proposed active management area.

B. The director shall give reasonable notice of the hearing under the circumstances which shall include publication once each week for two consecutive weeks in a newspaper of general circulation in each county in which the proposed active management area is located. Any notice shall contain the time and place of the hearing, the legal description and a map clearly identifying and describing all lands to be included in the proposed active management area and any sub-basins and any other information the director deems necessary.

C. The hearing shall be held at a location within the proposed active management area as soon as practicable but no less than thirty days and no more than sixty days after the first publication of the notice of hearing. At the hearing, the director shall present the factual data in his possession in support of the proposed action. Any person may appear at the hearing, either in person or by representative, and submit oral or documentary evidence for or against the proposed action. In making his determination, the director shall give full consideration to public comment and to recommendations made by local political subdivisions.

§ 45-414 Findings upon hearing; order for active management area; publication

A. Within thirty days after the hearing, the director shall make and file in the director's office written findings with respect to matters considered during the hearing. If the director decides to declare an area an active management area, the director shall make and file an order designating the active management area.

B. The findings and order shall be published in the manner and for the length of time prescribed for the publication of notice of the public hearing, and the order is effective when published for the final time. All factual data compiled by the director, a transcript of the hearing, a copy of the findings and a map identifying the lands included in the active management area are public records of the department and shall be available for examination by the public during regular business hours. The findings and order of the director are subject to rehearing or review and to judicial review as provided in section 45-114, subsection C.

C. The director shall file a true copy of the map in the office of the county recorder of the county or counties in which the active management area is located.

§ 45-415 Local initiation for active management area; procedures

A. A groundwater basin that is not included within an initial active management area may be designated an active management area on petition by ten percent of the registered voters residing within the boundaries of the proposed active management area, as of the most recent report compiled by the county recorder in compliance with section 16-168, subsection G, and a subsequent election held pursuant to the general election laws of this state. The form of the petition shall be the same as for initiative petitions, and the applicant for the petition shall comply with section 19-111.

B. On application for a petition number with the clerk of the board of supervisors or county election officer, the director shall transmit a map of the groundwater basin to the county recorder of each county in which the proposed active management area is located. The map shall be on a scale adequate to show with substantial accuracy where the boundaries of the groundwater basin cross the boundaries of county voting precincts. The director shall also transmit to the county recorder all other factual data concerning the boundaries of the groundwater basin that may aid the county recorder in the determination of which registered voters of the county are residents of the groundwater basin.

C. Any registered voter of a county whose residency in the groundwater basin is in question shall be allowed to vote. The ballot shall be placed in a separate envelope, the outside of which shall contain the precinct name and number, the signature of the voter, the residence address of the voter and the voter registration number of the voter, if available. The voter receipt card shall be attached to the envelope. The county recorder shall verify the ballot for proper residency of the voter before counting. Such verification shall be made within five business days following the election, and the voter receipt card shall be returned to the voter. Verified ballots shall be counted using the procedure outlined for counting early ballots. If residency in the groundwater basin is not verified, the ballot shall remain unopened and shall be destroyed.

D. Except as provided in subsection E of this section, all election expenses incurred pursuant to this section are the responsibility of the county involved.

E. If a groundwater basin is located in two or more counties, the following procedures apply:

The petition shall be filed with the clerk of the board of supervisors or county election officer of the county in which the plurality of the registered voters in the groundwater basin resides.
The number of registered voters required to sign the petition shall be ten percent of the registered voters residing within the boundaries of the proposed active management area, as of the most recent report compiled by the county recorder in compliance with section 16-168, subsection G, within the county in which the plurality of the registered voters in the groundwater basin resides.
The election shall be called by the board of supervisors of the county in which the petition is filed, and the board shall immediately notify the board of supervisors of any other county included in the groundwater basin of the date of the election. The election shall be held not less than sixty days or more than ninety days from the date of the call. The board of supervisors so notified shall then call the election in that county for the same date and follow the procedures for conducting the general elections in this state.
All election expenses incurred pursuant to this subsection are the responsibilities of the counties involved on a proportional basis considering the number of registered voters of each county that are residents of the groundwater basin.

F. The ballot shall be worded, "should the (insert name of basin) groundwater basin be designated an active management area?" followed by the words "yes" and "no".

§ 45-416 Limitation on number of irrigated acres

A. If the director initiates the procedure for designating a subsequent active management area or the board of supervisors calls an election to establish an active management area, an irrigation user may irrigate within the proposed active management area only acres of land which were legally irrigated at any time during the five years preceding the date of the notice of the initiation of designation procedures or the call for the election.

B. The limitation on the acres which may be irrigated shall continue in effect until the director makes a final determination pursuant to section 45-414 or the final results of an election to establish an active management area pursuant to section 45-415 are certified by the board of supervisors of the county or counties in which the proposed subsequent active management area is located.

§ 45-417 Review and modification of boundaries of subsequent active management area

A. The director may review and modify the boundaries of a subsequent active management area or any of its sub-basins as conditions require and factual data justify.

B. The director shall review the boundaries of a subsequent active management area or any of its sub-basins upon receipt of a petition signed by persons who together withdraw not less than one-fourth of the groundwater withdrawn in the active management area or by request of the groundwater users advisory council in the active management area.

C. Before modifying the boundaries of a subsequent active management area or any of its sub-basins the director shall give notice of and hold a hearing on the proposed modifications pursuant to the procedures prescribed by section 45-413. After the hearing, the director shall prepare written findings pursuant to section 45-414.

§ 45-418 Area director; appointment; qualifications; compensation

A. The director shall appoint an area director for each active management area. For reasons of economy and efficiency in administration, one person may be the area director for more than one active management area. The area director shall serve at the pleasure of the director.

B. The area director is subject to title 41, chapter 4, article 4 and is entitled to receive compensation as determined pursuant to section 38-611.

§ 45-419 Duties of area director

The area director shall:

Assist the director in the development of the management plan for the active management area and implement the plan under the director's supervision.
Have such other duties as the director may assign and shall be responsible to the director for the performance of such duties.
Furnish technical and clerical services and such other assistance to the groundwater users advisory council as is required, to the extent funds are made available for such assistance.

§ 45-420 Groundwater users advisory councils; appointment; representation of water users; term; compensation

A. There shall be a groundwater users advisory council in each active management area consisting of five members. Members of the council shall be appointed by the governor to represent the users of groundwater in the active management area and on the basis of their knowledge of, interest in and experience with problems relating to the development, use and conservation of water.

B. The term of office of each member is six years. The terms of two members shall expire on the third Monday of January each even numbered year, except that each third even numbered year the term of one member shall expire.

C. Members of the council shall serve without compensation, except that each member shall be reimbursed for travel and subsistence while engaged in business of the council in the same manner as is provided by law for state officers.

§ 45-421 Administrative duties of the groundwater users advisory councils

The groundwater users advisory council shall:

Advise the area director for the active management area, make recommendations on groundwater management programs and policies for the active management area and comment to the area director and to the director on draft management plans for the active management area before they are promulgated by the director.
Keep the minutes of its meetings and all records, reports and other information relative to its work and programs in permanent form indexed and systematically filed.
Elect from its members a chairman and vice-chairman for terms of two years expiring on the third Monday of January of each even numbered year.
Designate the person or persons who shall execute all documents and instruments on behalf of the council.
Manifest and record its actions by motion, resolution or other appropriate means.
Make a complete record of its proceedings which shall be open to public inspection during regular business hours in the branch office of the department in the active management area.
Provide comment to the Arizona water banking authority with regard to draft plans for additional storage facilities and draft plans of operation in accordance with sections 45-2453 and 45-2456.

Article 3 Irrigation Non-Expansion Areas

§ 45-431 Initial irrigation non-expansion areas

The Douglas critical groundwater area and the Joseph City critical groundwater area, delineated in the orders of the state land commissioner dated May 5, 1965 and December 16, 1974, respectively, are designated as initial irrigation non-expansion areas on the effective date of this chapter and are governed by the provisions of this article.

§ 45-432 Subsequent irrigation non-expansion areas; designation; review

A. The director may designate an area which is not included within an active management area as a subsequent irrigation non-expansion area if the director determines that both of the following apply:

There is insufficient groundwater to provide a reasonably safe supply for irrigation of the cultivated lands in the area at the current rates of withdrawal.
The establishment of an active management area pursuant to section 45-412 is not necessary.

B. An irrigation non-expansion area established pursuant to this section may include more than one groundwater sub-basin but shall not be smaller than a groundwater sub-basin or include only a portion of a groundwater sub-basin.

§ 45-433 Local initiation for designation; procedures

A. The designation of a subsequent irrigation non-expansion area may be initiated by the director or by petition to the director signed by either:

Not less than twenty-five irrigation users of groundwater, or one-fourth of the irrigation users of groundwater within the boundaries of the groundwater basin or sub-basin specified in the petition.
Ten per cent of the registered voters residing within the boundaries of the groundwater basin or sub-basin specified in the petition as of the most recent report compiled by the county recorder in compliance with section 16-168, subsection G. The form of the petition shall be the same as for an initiative petition and the applicant for such petition shall comply with the provisions of section 19-111. If a groundwater basin or sub-basin is located in two or more counties, the number of registered voters required to sign the petition shall be ten per cent of the registered voters residing within the boundaries of the groundwater basin or sub-basin, as of the most recent report compiled by the county recorder in compliance with section 16-168, subsection G, within the county in which the plurality of the registered voters in the groundwater basin or sub-basin resides.

B. Upon receipt of a petition pursuant to subsection A, paragraph 2 of this section, the director shall transmit the petition to the county recorder of each county in which the groundwater basin or sub-basin is located for verification of signatures. In addition, the director shall transmit a map of the groundwater basin or sub-basin to the county recorder of each such county included. The map shall be on a scale adequate to show with substantial accuracy where the boundaries of the groundwater basin or sub-basin cross the boundaries of county voting precincts. The director shall also transmit to the county recorder all other factual data concerning the boundaries of the groundwater basin or sub-basin that may aid the county recorder in the determination of which registered voters of the county are residents of the groundwater basin or sub-basin.

§ 45-434 Limitation on number of irrigated acres

A. If procedures are initiated, whether by the director or by petition, for designating an irrigation non-expansion area, an irrigation user may irrigate within the proposed irrigation non-expansion area only acres of land which were irrigated at any time during the five years preceding the date of the notice of the initiation of designation procedures.

B. The limitation on the acres which may be irrigated shall continue in effect until the director makes a final determination pursuant to section 45-436.

§ 45-435 Hearing on designation of subsequent irrigation non-expansion areas and boundaries; notice; procedures

A. If the director finds that an area which is not included within an active management area meets the criteria specified in section 45-432, or a petition is filed pursuant to section 45-433, the director shall hold a public hearing to consider:

Whether to issue an order declaring the area an irrigation non-expansion area.
The boundaries of the proposed irrigation non-expansion area.

B. The director shall give reasonable notice of the hearing under the circumstances which shall include the publication once each week for two consecutive weeks in a newspaper of general circulation in each county in which the proposed irrigation non-expansion area is located. Any notice shall contain the time and place of the hearing, the legal description and a map clearly identifying and describing all lands to be included in the proposed irrigation non-expansion area and any other information the director deems necessary.

C. The hearing shall be held at a location in the county in which the major portion of the proposed irrigation non-expansion area is located no less than thirty days but no more than sixty days after the first publication of the notice of the hearing. At the hearing, the director shall present the factual data in his possession in support of or in opposition to the proposed action. Any person may appear at the hearing, either in person or by representative, and submit oral or documentary evidence for or against the proposed action. In making his determination, the director shall give full consideration to public comment and to recommendations made by local political subdivisions.

§ 45-436 Findings upon hearing; order for irrigation non-expansion area; publication

A. Within thirty days after the hearing, the director shall make and file in the director's office written findings with respect to matters considered during the hearing. If the director decides to declare an area an irrigation non-expansion area, the director shall make and file an order designating the irrigation non-expansion area.

B. The findings and order shall be published in the manner and for the length of time prescribed for the publication of notice of the public hearing, and the order is effective when published for the final time. All factual data compiled by the director, a transcript of the hearing, a copy of the findings and a map identifying the lands included in the irrigation non-expansion area are public records of the department and shall be available for examination by the public during regular business hours. The findings and order of the director are subject to rehearing or review and to judicial review as provided in section 45-114, subsection C.

C. The director shall file a true copy of the map in the office of the county recorder of the county or counties in which the irrigation non-expansion area is located.

§ 45-437 Irrigated acreage; water measuring device; annual report of groundwater pumping; penalty; transportation; exemption

A. In an initial irrigation non-expansion area established pursuant to section 45-431, except as provided in subsection E of this section, only acres of land which were legally irrigated at any time between January 1, 1975 and January 1, 1980 may be irrigated with groundwater, effluent, diffused water on the surface or surface water, except as provided in sections 45-172, 45-437.01, 45-437.02 and 45-437.03, and except that this does not prohibit irrigation with surface water used pursuant to decreed or appropriative rights established before June 12, 1980. Land which was not irrigated at any time from January 1, 1975 through January 1, 1980 is deemed to have been in irrigation if the director finds that substantial capital investment has been made in the twelve months before June 12, 1980 for the improvement of the land and on-site irrigation distribution facilities, including the drilling of wells, for an irrigation use. This subsection does not allow irrigation of land which could not have been legally irrigated under prior statutory law.

B. In a subsequent irrigation non-expansion area established pursuant to section 45-432, except as provided in subsection E of this section, only acres of land which were irrigated at any time during the five years preceding the date of the notice of the initiation of designation procedures may be irrigated with groundwater, effluent, diffused water on the surface or surface water, except as provided in sections 45-172, 45-437.01, 45-437.02 and 45-437.03, and except that this does not prohibit irrigation with surface water used pursuant to decreed or appropriative rights established before the date of the notice. Land which was not irrigated at any time during this five year period is deemed to have been in irrigation if the director finds that substantial capital investment has been made for the subjugation of such land for an irrigation use including on-site irrigation distribution facilities and a well or wells the drilling and construction of which were substantially commenced before the date of the notice of the initiation of designation procedures.

C. Except as provided in subsection F of this section, in an irrigation non-expansion area:

Each person withdrawing groundwater from a non-exempt well for an irrigation use and each person withdrawing more than ten acre-feet of groundwater per year from a non-exempt well for a non-irrigation use shall use a water measuring device approved by the director. Each person withdrawing groundwater from a non-exempt well shall file a report on a calendar year basis with the director on a form provided by the director no later than March 31 of the following year. In filing a report, each person withdrawing ten or fewer acre-feet of groundwater per year from a non-exempt well for a non-irrigation use shall estimate the quantity of groundwater withdrawn.
Transportations of groundwater are subject to the provisions of articles 8 and 8.1 of this chapter.

D. If a person, who is required under subsection C, paragraph 1 of this section to file an annual report for calendar year 1986 or any subsequent calendar year, fails to file a report for the calendar year in question on or before March 31 of the following year, the director may assess and collect a penalty of twenty-five dollars for each month or portion of a month that the annual report is delinquent. The total penalty assessed under this subsection shall not exceed one hundred fifty dollars. The director shall deposit, pursuant to sections 35-146 and 35-147, all penalties collected under this subsection in the state general fund.

E. In an irrigation non-expansion area, a correctional facility under the jurisdiction of the state department of corrections may irrigate with groundwater, effluent, diffused water on the surface or surface water up to a total of ten acres of land that otherwise may not be irrigated pursuant to subsection A or B of this section if the irrigation is for the purpose of producing plants or parts of plants for consumption by inmates at the correctional facility as part of a prisoner work program and if the correctional facility notifies the director of water resources in writing of the location of the acres of land to be irrigated prior to their irrigation. The actual number of acres of land that a correctional facility may irrigate pursuant to this subsection shall be calculated by subtracting the number of acres of land the correctional facility may already irrigate under subsection A or B of this section from ten.

F. A person who withdraws groundwater from a non-exempt well for an irrigation use is exempt from subsection C, paragraph 1 of this section for those withdrawals if both of the following apply:

Groundwater withdrawn from the well for an irrigation use is used only on land that is owned by a person who has the right under subsection A or B of this section to irrigate ten or fewer contiguous acres of land at the place of the use.
Groundwater withdrawn from the well is not used on land that is part of an integrated farming operation.

§ 45-437.01 Substitution of irrigated acreage in an irrigation district; central Arizona project water

In an irrigation non-expansion area, a person who owns acres of land which may be irrigated pursuant to section 45-437 may apply to the director during the central Arizona project contracting period, but no later than January 1, 1995, to permanently retire all or a portion of such acres from irrigation and to irrigate conjunctively with central Arizona project water the same number of substitute acres. The director may approve the substitution of acres if the director determines that all of the following exist:

The acres to be retired from irrigation and the substitute acres are located outside of the exterior boundaries of the service area of a city, town or private water company and such acres are located within the same irrigation district and the same sub-basin.
Central Arizona project water available to the irrigation district within which the acres are located will be adequate to supply the substitute acres.

§ 45-437.02 Flood damaged acres; substitution of acres; definitions

A. In an irrigation non-expansion area, a person who owns acres of land which may be irrigated pursuant to section 45-437 may permanently retire those acres from irrigation and substitute for those acres the same number of acres in the same irrigation non-expansion area if the owner demonstrates to the director's satisfaction that all of the following apply:

The legally irrigated acres were damaged by floodwaters after being irrigated.
It is not economically feasible to restore the flood damaged acres to irrigation use.

B. For purposes of this section:

"Floodwaters" means a temporary and erosive overflow of waters on lands not normally covered by water which occurred after January 1, 1975.
"Legally irrigated acres" means acres which may be irrigated pursuant to section 45-437.

§ 45-437.03 Impediments to efficient irrigation; substitution of acres; definitions

A. In an irrigation non-expansion area, a person who owns acres of land which are contiguous and which may be irrigated pursuant to section 45-437 may apply to the director to permanently retire a portion of those acres from irrigation and substitute for the retired acres the same number of acres. The director may approve the substitution of acres if the owner demonstrates to the director's satisfaction that all of the following apply:

A limiting condition associated with the acres to be retired from irrigation substantially impedes the implementation of more efficient irrigation practices on the legally irrigated acres.
The substitution of acres will substantially reduce the limiting condition and will substantially facilitate the implementation of more efficient irrigation practices.
The substitute acres are within the same farm unit as the legally irrigated acres that will not be retired.
The substitution will not reduce the number of acres of land within the farm unit that are eligible to receive central Arizona project water.
If the acres to be retired are located within the exterior boundaries of an irrigation district, the substitute acres will be located within the exterior boundaries of the same irrigation district.
The area of land within the substitute acres that is physically capable of being irrigated at the time the application for substitution of acres is filed does not exceed the area of land within the acres to be retired that is physically capable of being irrigated at the time the application for substitution of acres is filed.

B. For purposes of this section:

"Legally irrigated acres" means acres of land which are contiguous and which may be irrigated pursuant to section 45-437.
"Limiting condition" means any condition that limits the achievement of more efficient irrigation on the legally irrigated acres, including irregularly shaped legally irrigated acres and poor quality soils.

§ 45-438 Review and modification of boundaries of irrigation non-expansion areas

A. The director may review and modify the boundaries of an irrigation non-expansion area as conditions require and factual data justify.

B. The director shall review the boundaries of an irrigation non-expansion area upon receipt of a petition signed by persons who together withdraw not less than one-fourth of the groundwater withdrawn in the irrigation non-expansion area.

C. Before modifying the boundaries of an irrigation non-expansion area, the director shall give notice of and hold a hearing on the proposed modifications pursuant to the procedures prescribed by section 45-435. After the hearing, the director shall prepare written findings pursuant to section 45-436.

§ 45-439 Conversion from irrigation non-expansion area to active management area; director; local initiation; procedures

A. The director may designate an irrigation non-expansion area as an active management area if the director determines that the irrigation non-expansion area meets any of the criteria for designating an active management area specified in section 45-412, subsection A.

B. Any action taken under this section is subject to the procedures for notice and hearing prescribed by sections 45-413 and 45-414.

C. An irrigation non-expansion area may be designated an active management area upon petition and election pursuant to section 45-415 by the registered voters residing in the groundwater basin which is or includes the irrigation non-expansion area.

§ 45-440 Subsequent irrigation non-expansion area; limitation on use of groundwater

A. Except as provided in subsection B of this section, in a subsequent irrigation non-expansion area from which groundwater may be withdrawn and transported to an initial active management area pursuant to article 8.1 of this chapter, a person or entity may withdraw more than one hundred acre-feet of groundwater per year for commercial or industrial purposes other than irrigation or residential use only if the groundwater is withdrawn as follows:

From land that is eligible to be irrigated pursuant to section 45-437, subsection B.
From a depth to one thousand feet at the site or sites of the proposed withdrawals.
At a rate that when added to the existing rate of withdrawals in the area does not cause the groundwater table at the site or sites of the withdrawals to decline more than ten feet per year.
In an amount per acre of land from which withdrawals are made that does not exceed:

(a) Six acre-feet in any year.

(b) Thirty acre-feet for any period of ten consecutive years computed in continuing progressive series beginning in the year that withdrawals begin.

B. In a subsequent irrigation non-expansion area from which groundwater may be withdrawn and transported to an initial active management area pursuant to article 8.1 of this chapter, an electrical generating facility for which an application for a certificate of environmental compatibility was filed with the corporation commission pursuant to title 40, chapter 2, article 6.2 before January 1, 2000 may withdraw groundwater for electrical generation and related uses in an amount not to exceed sixty-two thousand five hundred acre-feet per ten year period as determined using a ten year rolling average beginning on the date the facility first begins withdrawing groundwater.

C. This section shall not be construed to affect the rights of:

A political subdivision to transport groundwater withdrawn from an irrigation non-expansion area to an initial active management area pursuant to section 45-554.
Any person to store or recover water pursuant to chapter 3.1 of this title.

Article 4 Groundwater Rights and Uses in General

§ 45-451 Groundwater rights and uses in active management areas

A. In an active management area, a person may:

Withdraw and use groundwater only in accordance with the provisions of articles 5 through 12 of this chapter.
Store water in a storage facility, as defined in section 45-802.01, only in accordance with chapter 3.1 of this title.

B. This chapter shall not be construed to affect decreed and appropriative water rights. Nothing in this chapter shall be construed to affect the definition of surface water in section 45-101 and the definition of water subject to appropriation in section 45-141 or the provisions of article 9 of chapter 1 of this title.

C. Notwithstanding subsection B of this section, solely in the Santa Cruz active management area:

The withdrawal of water, other than stored water, from a well and the distribution and use of water, other than stored water, withdrawn from a well shall be subject to any applicable conservation requirements established by the director in the management plans for the active management area pursuant to article 9 of this chapter.
The withdrawal of water from a well shall be subject to any applicable well location requirements contained in article 10 of this chapter.

§ 45-452 No new irrigated acreage in active management areas; central Arizona project water; exemption

A. In an initial active management area, except as provided in subsections B, H, I and J of this section and sections 45-172, 45-465.01 and 45-465.02, only acres of land which were legally irrigated at any time from January 1, 1975 through January 1, 1980, which are capable of being irrigated, which have not been retired from irrigation for a non-irrigation use pursuant to section 45-463 or 45-469 and for which the irrigation grandfathered right has not been conveyed for a non-irrigation use, may be irrigated with any groundwater, effluent, diffused water on the surface or surface water, except that this does not prohibit irrigation with surface water used pursuant to decreed or appropriative rights established before June 12, 1980. In an initial active management area, land which was not irrigated at any time from January 1, 1975 through January 1, 1980 is deemed to have been in irrigation if the director finds that either of the following applies:

In areas of an initial active management area not designated as critical groundwater areas under prior statutory law prior to the date of the designation of the active management area, land is deemed to have been in irrigation if substantial capital investment has been made for the subjugation of such land for an irrigation use including on-site irrigation distribution facilities and a well or wells the drilling and construction of which were substantially commenced prior to the date of the designation of the active management area.
In areas of an initial active management area which were designated as critical groundwater areas under prior statutory law, land is deemed to have been in irrigation if substantial capital investment has been made in the twelve months before June 12, 1980 for the improvement of the land and on-site irrigation distribution facilities, including the drilling of wells, for an irrigation use. This paragraph does not allow irrigation of land which could not have been legally irrigated under prior statutory law.

B. In an initial active management area, a person who owns acres of land which may be irrigated pursuant to subsection A of this section may apply to the director to permanently retire all or a portion of such acres from irrigation and to irrigate conjunctively with central Arizona project water the same number of substitute acres. The director may approve the substitution of acres if the director determines that all of the following exist:

The substitute acres were legally irrigated during the period of September 30, 1958 to September 30, 1968, or such other period as the United States secretary of the interior may designate.
The acres to be retired from irrigation and the substitute acres are located outside of the exterior boundaries of the service area of a city, town or private water company and such acres are located within the same irrigation district and the same sub-basin.
The substitution of acres is necessary to enable the irrigation district within which the acres are located to more efficiently deliver central Arizona project water.
Central Arizona project water available to the irrigation district within which the acres are located will be adequate to supply the substitute acres.
The substitution of acres will benefit the management of the active management area in which the acres are located.

C. Any acres permanently retired from irrigation pursuant to subsection B of this section relinquish their irrigation grandfathered rights, and such rights are deemed to be appurtenant to the substitute acres. Groundwater withdrawn or received for the irrigation of the substitute acres pursuant to an irrigation grandfathered right shall be reduced by the amount of central Arizona project water received for such acres.

D. The service area of the irrigation district in which the acres are located shall be modified to permanently delete the acres permanently retired from irrigation and include the substitute acres.

E. If a person retires land from irrigation pursuant to subsection B of this section, groundwater shall not be withdrawn from such retired land for any purpose unless pursuant to a groundwater withdrawal permit or unless withdrawn by a city, town or private water company within the service area of such city, town or private water company.

F. The director may reverse the substitution of irrigated acres as provided by subsections B through E of this section under the following conditions and procedures:

Title to the retired acres and substitute acres has reverted involuntarily, or voluntarily in lieu of foreclosure or forfeiture, to a previous owner or owners of the retired and substitute acres.
The current owner of the retired acres must apply to the director in writing stating:

(a) The history of the original substitution of acres under subsections B through E of this section.

(b) The circumstances regarding the reversion of title to the current owner or owners.

The director must find that reversing the substitution of acres:

(a) Will benefit the management of the active management area.

(b) Is necessary to prevent unreasonable hardship to the current owner of the retired acres.

(c) Will not cause unreasonable hardship to the current owner of the substitute acres, if owned separately from the retired acres.

If the director decides to reverse the substitution of acres:

(a) The originally retired irrigation acres regain their original irrigation grandfathered rights, but groundwater withdrawn or received for the irrigation of those acres pursuant to an irrigation grandfathered right shall be reduced by any amount of central Arizona project water received for such acres.

(b) The substitute acres relinquish all irrigation grandfathered rights that were transferred to them under the original substitution of acres.

(c) The service area of the irrigation district in which the acres are located shall be modified to delete the substitute acres and include the originally retired irrigation acres.

(d) Groundwater may not thereafter be withdrawn from the substitute acres for any purpose unless pursuant to a groundwater withdrawal permit or unless withdrawn by a city, town or private water company within its service area.

G. In a subsequent active management area, except as provided in subsections H, I and J of this section or section 45-172, only acres of land which were legally irrigated at any time during the five years preceding the date of the notice of the initiation of designation procedures or the call for the election, which are capable of being irrigated, which have not been retired from irrigation for a non-irrigation use pursuant to section 45-463 or 45-469 and for which the irrigation grandfathered right has not been conveyed for a non-irrigation use, may be irrigated with groundwater, effluent, diffused water on the surface or surface water, except that this does not prohibit irrigation with surface water used pursuant to decreed or appropriative rights established before the date of the notice or the call. In a subsequent active management area, land is deemed to have been in irrigation if the director finds that either of the following applies:

In areas of a subsequent active management area which were not irrigation non-expansion areas, land is deemed to have been in irrigation if substantial capital investment has been made for the subjugation of such land for an irrigation use including on-site irrigation distribution facilities and a well or wells the drilling and construction of which were substantially commenced before the date of the notice of the initiation of designation procedures or the call for the election.
In areas of a subsequent active management area which were irrigation non-expansion areas, land is deemed to have been in irrigation if the director finds that substantial capital investment has been made in the twelve months before the date of the notice of the initiation of designation procedures or the call for the election, for the improvement of the land and on-site irrigation distribution facilities, including the drilling of wells, for an irrigation use. This paragraph does not allow irrigation of land which could not have been legally irrigated under section 45-437.

H. In an active management area, a state university engaged in the teaching and study of and experimentation in the science of agriculture may irrigate not more than three hundred twenty acres of land for such purposes with not more than five acre-feet of groundwater per acre per year. Water produced from any well pursuant to this subsection shall not be leased, sold or transported off the irrigated land operated by the state university. The right to withdraw and use groundwater pursuant to this subsection does not require a withdrawal permit, is not a grandfathered right, shall not give rise to a grandfathered right and may not be conveyed to any other user.

I. In an active management area, a correctional facility under the jurisdiction of the state department of corrections may irrigate with groundwater, effluent, diffused water on the surface or surface water up to a total of ten acres of land that otherwise may not be irrigated pursuant to subsection A or G of this section if the irrigation is for the purpose of producing plants or parts of plants for consumption by inmates at the correctional facility as part of a prisoner work program and if the correctional facility notifies the director of water resources in writing of the location of the acres of land to be irrigated prior to their irrigation. The actual number of acres of land that a correctional facility may irrigate pursuant to this subsection shall be calculated by subtracting the number of acres of land the correctional facility may already irrigate under subsection A or G of this section from ten. The amount of water that a correctional facility may use during a year to irrigate acres of land pursuant to this subsection shall not exceed an amount calculated by multiplying the number of acres of land that are actually irrigated by the correctional facility during the year pursuant to this subsection, by four and one-half acre-feet of water. The right to withdraw and use groundwater pursuant to this subsection does not require an irrigation grandfathered right, is not a grandfathered right, shall not give rise to a grandfathered right, and may not be conveyed to any other user.

J. During the second management period, acres of land in an active management area which have been retired from irrigation for a non-irrigation use pursuant to section 45-463 or 45-469 or for which the irrigation grandfathered right has been conveyed for a non-irrigation use pursuant to section 45-472 may be irrigated with effluent, other than effluent recovered pursuant to a recovery well permit issued under chapter 3.1 of this title or effluent given or received pursuant to a water exchange under chapter 4 of this title, and shall retain its appurtenant type 1 non-irrigation grandfathered right where the following conditions are met:

The land to be irrigated lies within the boundaries of an incorporated city or town.
The governing body or manager of the city or town has consented in writing to the irrigation of the land with effluent.
The effluent proposed for irrigation of the land cannot be reasonably beneficially used otherwise.
The owner of the land gives written notice to the director of intention to irrigate the land with effluent and receives written approval from the director before commencing irrigation. The notice shall set forth the legal description of the land to be irrigated, the certificate number of the type 1 non-irrigation grandfathered right appurtenant to the land, the source of effluent and the reasons the effluent cannot be reasonably beneficially used otherwise, and shall be accompanied by a copy of the written consent of the city or town in which the land to be irrigated is located.

K. A person who may irrigate with effluent land to which a type 1 non-irrigation right is appurtenant under subsection J of this section may relinquish the right to irrigate all or a portion of the land by giving the director written notice that the person relinquishes the right. The notice shall include a legal description of the acres to be relinquished. The relinquishment is effective upon receipt of the notice by the director.

L. If a person who may irrigate with effluent land to which a type 1 non-irrigation grandfathered right is appurtenant under subsection J of this section conveys all or a portion of the land to a successor owner, the successor owner shall not irrigate the land prior to providing written notification to the director of the successor owner's intention to irrigate the land and receiving approval from the director pursuant to subsection J of this section.

M. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section. If an administrative hearing is held, it shall be conducted in the active management area in which the use is located.

§ 45-453 Groundwater rights and uses in areas outside active management areas; amounts; transportation; irrigation non-expansion areas

In areas outside of active management areas, a person may:

Withdraw and use groundwater for reasonable and beneficial use, except as provided in article 8.1 of this chapter.
Transport groundwater pursuant to articles 8 and 8.1 of this chapter.
Use groundwater for irrigation purposes within the exterior boundaries of an irrigation non-expansion area only pursuant to article 3 of this chapter.

§ 45-454 Exemption of small non-irrigation wells; definitions

A. Withdrawals of groundwater for non-irrigation uses from wells having a pump with a maximum capacity of not more than thirty-five gallons per minute which were drilled before April 28, 1983 or which were drilled after April 28, 1983 pursuant to a notice of intention to drill which was on file with the department on such date are exempt from this chapter, except that:

Wells drilled before June 12, 1980 which are not abandoned or capped or wells which were not completed on June 12, 1980 but for which a notice of intention to drill was on file with the Arizona water commission on such date are subject to subsections J, K and L of this section and must be registered pursuant to section 45-593. If two or more wells in an active management area are exempt under this paragraph and are used to serve the same non-irrigation use at the same location, the aggregate quantity of groundwater withdrawn from the wells shall not exceed fifty-six acre-feet per year.
Wells drilled between June 12, 1980 and April 28, 1983, except as provided in paragraph 1 of this subsection, and wells drilled after April 28, 1983 pursuant to a notice of intention to drill which was on file with the department on April 28, 1983, are subject to subsections G, I, J and K of this section.

B. Withdrawals of groundwater for non-irrigation uses from wells having a pump with a maximum capacity of not more than thirty-five gallons per minute drilled on or after April 28, 1983, except wells drilled after April 28, 1983 pursuant to a notice of intention to drill which was on file with the department on such date, are exempt from this chapter, except that:

Such wells are subject to subsections G through K of this section.
In an active management area, other than a subsequent active management area designated for a portion of a groundwater basin in the regional aquifer systems of northern Arizona, withdrawals of groundwater from such wells for non-irrigation uses other than domestic purposes and stock watering shall not exceed ten acre-feet per year.
In a subsequent active management area that is designated for a portion of a groundwater basin in the regional aquifer systems of northern Arizona, groundwater withdrawn from such wells may be used only for domestic purposes and stock watering.

C. On or after January 1, 2006, an exempt well otherwise allowed by this section may not be drilled on land if any part of the land is within one hundred feet of the operating water distribution system of a municipal provider with an assured water supply designation within the boundaries of an active management area established on or before July 1, 1994, as shown on a digitized service area map provided to the director by the municipal provider and updated by the municipal provider as specified by the director.

D. On request from the owner of the land on which an exempt well is prohibited pursuant to subsection C of this section on a form prescribed by the director, the director shall issue an exemption from subsection C of this section if the landowner demonstrates to the satisfaction of the director that any of the following applies:

The landowner submitted a written request for service to the municipal provider that operates the distribution system and the municipal provider did not provide written verification to the landowner within thirty calendar days after receipt of the request that water service is available to the landowner after payment of any applicable fee to the municipal provider.
The total capital cost and fees for connecting to the operating water distribution system exceed the total capital cost and fees for drilling and fully equipping an exempt well.
If the applicant must obtain an easement across other land to connect to the water distribution system of the municipal provider, the applicant sent the owner of the land a request for the easement by certified mail, return receipt requested, and either the applicant did not receive a response to the request within thirty calendar days of mailing the request or the request was denied.
The landowner does not qualify for an exemption pursuant to paragraph 1, 2 or 3 of this subsection and the landowner provides written verification from the municipal provider that the landowner shall not receive or request water service from the municipal provider while the exempt well is operational. The exemption for that well is revoked if the landowner or any subsequent landowner receives water service from the municipal provider. In determining whether to approve or reject a permit application filed under section 45-599, the director shall not consider any impacts the proposed well may have on an exempt well drilled pursuant to this paragraph.

E. This section does not prohibit a property owner, after January 1, 2006, from drilling a replacement exempt well for a lawful exempt well if the replacement well does not increase the total number of operable exempt wells on the applicant's land.

F. A remediation well drilled for the purpose of remediating groundwater is exempt from this section if it meets one of the following:

The remediation well is for an approved department of environmental quality or United States environmental protection agency remediation program.
A registered geologist certifies that the remediation well is for the purpose of remediation.

G. A person shall file a notice of intention to drill with the director pursuant to section 45-596 before drilling an exempt well or causing an exempt well to be drilled.

H. The registered well owner shall file a completion report pursuant to section 45-600, subsection B.

I. In an active management area only one exempt well may be drilled or used to serve the same non-irrigation use at the same location, except that a person may drill or use a second exempt well to serve the same non-irrigation use at the same location if the director determines that all of the following apply:

Because of its location, the first exempt well is not capable of consistently producing more than three gallons per minute of groundwater when equipped with a pump with a maximum capacity of thirty-five gallons per minute.
The second exempt well is located on the same parcel of land as the first exempt well, the parcel of land is at least one acre in size, all groundwater withdrawn from both exempt wells is used on that parcel of land and there are no other exempt wells on that parcel of land.
Combined withdrawals from both wells do not exceed five acre-feet per year.
If the second exempt well is drilled after January 1, 2000, the county health authority for the county in which the well is located or any other local health authority that controls the installation of septic tanks or sewer systems in the county has approved the location of the well in writing after physically inspecting the well site.
Use of two wells for the same non-irrigation use at the same location is not contrary to the health and welfare of the public.

J. An exempt well is subject to sections 45-594 and 45-595.

K. Groundwater withdrawn from an exempt well may be transported only pursuant to articles 8 and 8.1 of this chapter.

L. A person who owns land from which exempt withdrawals were being made as of the date of the designation of the active management area is not eligible for a certificate of grandfathered right for a type 2 non-irrigation use for such withdrawals.

M. For the purposes of this section:

"Domestic purposes" means uses related to the supply, service and activities of households and private residences and includes the application of water to less than two acres of land to produce plants or parts of plants for sale or human consumption, or for use as feed for livestock, range livestock or poultry, as such terms are defined in section 3-1201.
"Municipal provider" means a city, town, private water company or irrigation district that supplies water for non-irrigation use.
"Stock watering" means the watering of livestock, range livestock or poultry, as such terms are defined in section 3-1201.

§ 45-454.01 Exemption of superfund remedial action activities; use requirements; definition

A. New well construction and withdrawal, treatment and reinjection of groundwater into the aquifer that occur as a part of and on the site of a remedial action undertaken pursuant to CERCLA are exempt from this chapter, except that:

A well that is exempt under this subsection is subject to sections 45-594, 45-595, 45-596, 45-600 and 45-605, but no authorization to drill need be obtained before drilling.
If the groundwater that is withdrawn is not reinjected into the aquifer, the groundwater shall be put to reasonable and beneficial use.
A person who uses groundwater withdrawn in an active management area pursuant to this subsection shall pay the groundwater withdrawal fee for the groundwater the person withdrew or received and shall use the groundwater only pursuant to articles 5 through 12 of this chapter. A city, town, private water company or irrigation district that serves groundwater pursuant to article 6 of this chapter is deemed to have used the groundwater for purposes of this paragraph.

B. New well construction and withdrawal, treatment and reinjection of groundwater into the aquifer that occur as part of a remedial action relating to metal mining activities or a mitigation order relating to metal mining activities and that are undertaken pursuant to title 49, chapter 2, article 5 for the purpose of preventing the migration of a hazardous or nonhazardous substance are exempt from this chapter, except that:

A well that is exempt under this subsection is subject to sections 45-594, 45-595, 45-596, 45-600 and 45-605, but authorization to drill is not required before drilling.
If the groundwater that is withdrawn is not reinjected into the aquifer, the groundwater shall be put to reasonable and beneficial use. If the groundwater is withdrawn within an active management area and is not reinjected into the aquifer, the groundwater shall be put to reasonable and beneficial use within the same active management area as follows:

(a) At the metal mining facility pursuant to a groundwater withdrawal permit issued under section 45-514 or a type 2 non-irrigation grandfathered right issued under section 45-464.

(b) At another location pursuant to a grandfathered right issued under article 5 of this chapter or a service area right under article 6 of this chapter.

A person who uses groundwater withdrawn in an active management area pursuant to this subsection shall pay the groundwater withdrawal fee for the groundwater the person withdrew or received. The groundwater use is subject to articles 8, 8.1, 9, 10, 11 and 12 of this chapter. A city, town, private water company or irrigation district that serves groundwater pursuant to article 6 of this chapter is deemed to have used the groundwater for the purposes of this paragraph.

C. For the purposes of this section, "CERCLA" means the comprehensive environmental response, compensation, and liability act of 1980, as amended (P.L. 96-510; 94 Stat. 2767; 42 United States Code sections 9601 through 9657), commonly known as "superfund".

§ 45-455 Application to state lands

This chapter applies to all lands owned by the state of Arizona and any of its political subdivisions.

Article 5 Grandfathered Groundwater Rights in Active Management Areas

§ 45-461 Definitions

In this article, unless the context otherwise requires:

"Certificate of exemption" means a certificate which was issued by the state land department or Arizona water commission under prior statutory law for the purpose of describing specific uses and amounts of water which could not be enjoined if found to constitute the transfer or transportation of groundwater.
"Development plan" means a plan for the non-irrigation use of land in connection with which land has been or will be retired from irrigation for the bona fide purpose of conserving or using water for such non-irrigation use which would otherwise be used to irrigate the retired land.
"Owner" means:

(a) With respect to an irrigation grandfathered right or a type 1 non-irrigation grandfathered right, the owner of the land to which the right is appurtenant.

(b) With respect to a type 2 non-irrigation grandfathered right, the holder of the certificate of type 2 non-irrigation grandfathered right.

"Protected farmland" means land that has been designated by the director as protected farmland pursuant to section 45-483, subsection A and for which the designation has not been revoked by the director pursuant to section 45-483, subsection C.
"Same ownership" means ownership by the same person or entity or by successor persons or entities as a result of succession to heirs and personal representatives, corporate and partnership reorganizations, mergers, dissolutions, divestitures, partnerships, partitions, joint ventures, foreclosures, receivership or bankruptcy, purchase of capital stock, sale pursuant to United States Code, title 11, or similar succession, but not by outright sale to a bona fide purchaser for value where no portion of or beneficial interest in the successor in interest is retained by the original owner, its shareholders, partners, limited partners or beneficiaries.
"Water duty acres" means the acres of land in a farm, as determined pursuant to section 45-465, subsection B, which are used in calculating the maximum amount of groundwater which may be used pursuant to an irrigation grandfathered right.

§ 45-462 Grandfathered groundwater rights; persons included; certificate of exemption amount is legal use

A. In an active management area, a person who was legally withdrawing and using groundwater as of the date of the designation of the active management area or who owns land legally entitled to be irrigated with groundwater as determined pursuant to this article has the right to withdraw or receive and use groundwater as determined by the director pursuant to this article.

B. For purposes of determining grandfathered rights pursuant to this article, a groundwater use shall not be determined to be illegal merely because the groundwater legally withdrawn is or has been transported.

C. The amount of groundwater use described by an applicaton for a certificate of exemption is recognized as a legal use for purposes of determining grandfathered rights pursuant to section 45-464, subject to any modification as a result of a finding on appeal of a factual mistake by the state land department or Arizona water commission in computing the amount of the authorized withdrawal.

D. The right to withdraw or receive and use groundwater pursuant to this article is a grandfathered right. There are three categories of grandfathered rights as follows:

Non-irrigation grandfathered rights associated with retired irrigated land as determined pursuant to sections 45-463, 45-469 and 45-472.
Non-irrigation grandfathered rights not associated with retired irrigated land as determined pursuant to section 45-464.
Irrigation grandfathered rights as determined pursuant to section 45-465.

§ 45-463 Type 1 non-irrigation grandfathered right associated with retired irrigated land; appurtenancy; ownership

A. In an initial active management area, a person who owns land which was legally entitled to be irrigated with groundwater and who retired such land from irrigation after January 1, 1965 but prior to the date of the designation of the active management area in anticipation of a non-irrigation use has the right to withdraw from or receive for such land three acre-feet of groundwater per acre per year upon showing that:

The land has been held under the same ownership since it was retired.
A development plan for the proposed non-irrigation use existed at the time the land was retired.

B. In a subsequent active management area, a person who owns land which was legally entitled to be irrigated with groundwater and retires such land from irrigation prior to the date of the designation of the active management area in anticipation of a non-irrigation use has the right to withdraw from or receive for such land the lesser of three acre-feet of groundwater per acre per year or the average annual amount of groundwater which was used per acre during the five years preceding the time the land was retired upon showing that:

The land has been held under the same ownership since it was retired.
A development plan for the proposed non-irrigation use existed at the time the land was retired and is filed with the director within ninety days after the active management area is designated.

C. The development plan requirements of this section are deemed fulfilled if the land retired from irrigation has been described in an application for a certificate of exemption or if the land retired from irrigation is owned in conjunction with non-irrigation uses existing or for which substantial capital commitments have been incurred for the non-irrigation development of such land as of the date of the designation of the active management area.

D. The right to withdraw or receive groundwater pursuant to this section is a non-irrigation grandfathered right associated with retired irrigated land, or a type 1 non-irrigation grandfathered right.

E. A type 1 non-irrigation grandfathered right is appurtenant to the acre of retired irrigated land associated with the right, is owned by the owner of the land to which the right is appurtenant and may be leased with the land.

F. At the request of a city or town in the Tucson active management area that holds a type 1 non-irrigation grandfathered right under subsection A of this section, the director, in determining whether to designate or redesignate the city or town as having an assured water supply pursuant to section 45-576, shall include four and one-half acre-feet of groundwater for each acre of retired irrigated land to which the right is appurtenant, multiplied by the number of years between the year of retirement and the year of the request, minus the quantity of groundwater withdrawn from the land between June 12, 1980 and the year of the request, except that:

No groundwater may be included for any acre of retired irrigated land for any year after the land is developed for any municipal or industrial use.
The amount of groundwater that is included under this subsection shall not exceed four and one-half acre-feet for each acre of retired irrigated land to which the right is appurtenant multiplied by the number of years between the year of retirement and December 31, 2025 minus the quantity of groundwater withdrawn from the land between June 12, 1980 and December 31, 2025.
The net amount of groundwater included under this subsection shall not exceed two million acre-feet.
The city or town, before making the request of the director, shall extinguish any irrigation grandfathered rights or type 1 non-irrigation grandfathered rights held by the city or town and appurtenant to land acquired or contracted for by the city or town after June 12, 1980 in the same sub-basin.

G. In determining whether to designate a city or town as having an assured water supply pursuant to section 45-576, the director shall not consider the exercise of the right to withdraw groundwater under subsection F of this section to be the withdrawal of groundwater available from natural or artificial groundwater recharge.

§ 45-464 Type 2 non-irrigation grandfathered right not associated with retired irrigated land; determination of amount; definition; ownership

A. In an active management area, a person who owns land from which groundwater was being legally withdrawn and used for a non-irrigation purpose as of the date of the designation of the active management area has the right to withdraw annually:

If the person holds a certificate of exemption, the greater of:

(a) The amount of groundwater established in proceedings on the application for certificate of exemption, subject to any modification as a result of a finding on appeal of a factual mistake by the state land department or Arizona water commission in computing the amount of the authorized withdrawal, less the amount of any right obtained by the person pursuant to section 45-463.

(b) The maximum amount of groundwater legally withdrawn from such land and used by the person in any one of the five years preceding the date of the designation of the active management area, less the amount of any right obtained by the person pursuant to section 45-463.

If the person does not hold a certificate of exemption, the maximum amount of groundwater legally withdrawn from such land and used by the person withdrawing the groundwater in any one of the five years preceding the date of the designation of the active management area, less the amount of any right obtained pursuant to section 45-463 by the person withdrawing groundwater from such land which has not been subtracted by the person withdrawing the groundwater in calculating the amount of another right pursuant to this section.

B. If the calculation in subsection A of this section results in an amount greater than zero, that amount is a grandfathered right in addition to any right obtained pursuant to section 45-463.

C. For the purposes of this section, "person" includes:

A city, town or private water company which owns land outside of the service area of such city, town or private water company from which groundwater was being legally withdrawn for a non-irrigation use as of the date of the designation of the active management area.
A city, town or private water company withdrawing groundwater from within its service area pursuant to a certificate of exemption.
Any other non-irrigation user.

D. If a person has been using groundwater for less than one year during the twelve months immediately preceding the date of the designation of the active management area, the amount of the grandfathered right pursuant to this section is the annual amount determined by the director to be reasonable for a full year to meet the requirements for a facility owned by such person in existence as of the date of the designation of the active management area.

E. If a person has received a certificate of environmental compatibility pursuant to title 40, chapter 2, article 6.2 for the construction of an electrical generating facility within a subsequent active management area for which expenditures or financial commitments for land acquisition, water development, materials, construction or engineering in excess of five hundred thousand dollars have been made before the date of the notice of the initiation of designation procedures or the call for the election for the area, the amount of the grandfathered right pursuant to this section is the annual amount determined by the director to be reasonable to meet the operational requirements for the facility for a full year.

F. The right to withdraw groundwater pursuant to this section is a non-irrigation grandfathered right not associated with retired irrigated land, or a type 2 non-irrigation grandfathered right.

G. A type 2 non-irrigation grandfathered right may be leased. Except as provided in subsection H of this section, the owner or lessee of a type 2 non-irrigation grandfathered right may withdraw groundwater pursuant to the right only from a location within the same active management area in which the certificate of grandfathered right is issued.

H. Beginning July 1, 1994, the holder of a type 2 non-irrigation grandfathered right issued in the Tucson active management area prior to July 1, 1994, may withdraw groundwater pursuant to the right only from a location within the same active management area in which the well or wells listed on the certificate of grandfathered right on July 1, 1994, are located. If no well is listed on the certificate of grandfathered right on July 1, 1994, the holder of the right may withdraw groundwater pursuant to the right only from a location within the same active management area in which the land from which the originating withdrawals were made is located. For purposes of this subsection, the term "originating withdrawals" means the withdrawals of groundwater on which the issuance of a type 2 non-irrigation grandfathered right was based.

I. If the user of a type 2 non-irrigation grandfathered right is different from the owner of the right, either the owner, or the user of the right on behalf of the owner, may apply for a certificate of grandfathered right pursuant to section 45-476.

§ 45-465 Irrigation grandfathered right; determination of acres entitled to and amount; appurtenancy

A. In an active management area, a person who owns land which was legally irrigated in whole or in part with groundwater at any time during the five years preceding January 1, 1980 for initial active management areas or the date of the notice of the initiation of designation procedures or the call for the election for subsequent active management areas, which is capable of being irrigated and which has not been retired from irrigation for a non-irrigation use pursuant to section 45-463 or 45-469 has the right to use groundwater for the irrigation of such land as determined pursuant to subsections B and C of this section.

B. Except as provided in subsection C of this section, the director shall compute the maximum amount of groundwater which may be used pursuant to this section as follows:

Determine the farm units, as defined in section 45-402, within the active management area.
Determine the irrigation water duty, as defined in section 45-402, for each farm unit in an active management area, pursuant to sections 45-564 through 45-568.
Determine the water duty acres for each farm within the farm unit. The water duty acres are the highest number of acres in the farm, taking land rotation into account, which were legally irrigated during any one year in the five years preceding January 1, 1980 for initial active management areas or the date of the notice of the initiation of designation procedures or the call for the election for subsequent active management areas.
Determine the irrigation acres for each farm within the farm unit. The irrigation acres are the acres in the farm which were legally irrigated at any time during the five years preceding January 1, 1980 for initial active management areas or the date of the notice of the initiation of designation procedures or the call for the election for subsequent active management areas, which are capable of being irrigated and which have not been retired from irrigation for a non-irrigation use pursuant to section 45-463 or 45-469.
Multiply the water duty acres for each farm within the farm unit by the irrigation water duty for the farm unit and divide that amount by the number of irrigation acres in the farm. The result shall be the maximum amount of groundwater which may be used per year for the irrigation of each irrigation acre in the farm. If the farm is located in an active management area other than the Santa Cruz active management area and is irrigated solely with groundwater, the amount of groundwater used by the farm for irrigation shall be accounted for pursuant to section 45-467, subsection C. If a farm is located in an active management area other than the Santa Cruz active management area and is irrigated with a combination of surface water and groundwater, the amount of groundwater used by the farm for irrigation shall be accounted for pursuant to section 45-467, subsection D. If a farm is located in the Santa Cruz active management area, the amount of water, other than stored water, withdrawn from a well and used by the farm for irrigation purposes shall be accounted for pursuant to section 45-467, subsection E or F.

C. A person who owns land described in subsection A of this section and whose water use on the land is regulated under a best management practices program that is adopted by the director pursuant to section 45-566.02, subsection F, section 45-567.02, subsection G or section 45-568.02, subsection G:

Has the right to use groundwater for an irrigation use on the irrigation acres within that land as those acres are determined pursuant to subsection B, paragraph 4 of this section.
Is exempt from the provisions of subsection B of this section with respect to that land.

D. The right to use groundwater pursuant to this section for the irrigation of an irrigation acre is an irrigation grandfathered right and is appurtenant to that acre. An irrigation grandfathered right is owned by the owner of the land to which it is appurtenant and may be leased for an irrigation use with the land to which it is appurtenant.

E. A person who owns or leases irrigation acres may use the total amount of groundwater allowed by the irrigation grandfathered right for such acres for the irrigation of all or a portion of such acres.

F. If the irrigation water duty for the farm unit in which an irrigation acre is located is reduced by the director pursuant to article 9 of this chapter, the amount of groundwater which may be used for the irrigation of such acre pursuant to the irrigation grandfathered right under subsection B of this section is reduced accordingly.

G. For purposes of this chapter, the amount of groundwater which may be used or is used is the amount of groundwater withdrawn by the groundwater user, measured at the point of withdrawal, and the amount of groundwater received by the groundwater user from an irrigation district or other source.

§ 45-465.01 Flood damaged acres; substitution of acres; definition

A. A person who owns acres of land within an initial active management area which were legally irrigated at any time during the five years preceding January 1, 1980 and which have not been retired from irrigation for a non-irrigation use pursuant to section 45-463 or 45-469 may permanently retire such acres from irrigation and substitute for such acres the same number of acres within the same sub-basin or a contiguous sub-basin of the same initial active management area which were not legally irrigated at any time during the five years preceding January 1, 1980, and has the right to use groundwater for the irrigation of such substitute acres as determined pursuant to section 45-465 calculated on the basis of the acres which were legally irrigated, if the owner demonstrates to the satisfaction of the director that all the following apply:

The acres which were irrigated during the five years preceding January 1, 1980 were damaged by floodwaters after being irrigated.
It is not economically feasible to restore the flood damaged acres to irrigation use.
The owner has received a certificate of grandfathered right for an irrigation use for the flood damaged acres.

B. Any acres permanently retired from irrigation pursuant to this section relinquish their irrigation grandfathered rights and such rights are deemed to be appurtenant to the substitute acres.

C. For purposes of this section, "floodwaters" means a temporary and erosive overflow of waters on lands not normally covered by water which occurred after January 1, 1975.

§ 45-465.02 Impediments to efficient irrigation; substitution of acres; definitions

A. A person who owns acres of land described on a certificate of irrigation grandfathered right which have not been retired from irrigation for a non-irrigation use under section 45-463 or 45-469 may apply to the director to permanently retire a portion of those acres from irrigation and substitute for those acres the same number of acres to which irrigation grandfathered rights are not appurtenant. The director may approve the substitution of acres if the owner demonstrates to the director's satisfaction that all of the following apply:

A limiting condition associated with the acres to be retired from irrigation substantially impedes the implementation of more efficient irrigation practices on the certificated acres.
The substitution of acres will substantially reduce the limiting condition and will substantially facilitate the implementation of more efficient irrigation practices.
The substitute acres are within the same farm unit as the certificated acres that will not be retired.
The substitution will not reduce the number of acres of land within the farm unit that are eligible to receive central Arizona project water.
If the acres to be retired are located within the exterior boundaries of an irrigation district, the substitute acres will be located within the exterior boundaries of the same irrigation district.
The area of land within the substitute acres that is physically capable of being irrigated at the time the application for substitution of acres is filed does not exceed the area of land within the acres to be retired that is physically capable of being irrigated at the time the application for substitution of acres is filed.

B. Any acres permanently retired from irrigation pursuant to this section relinquish their irrigation grandfathered rights and such rights are deemed to be appurtenant to the substitute acres. The owner or lessee of the substitute acres has the right to use groundwater to irrigate the substitute acres as determined under section 45-465 calculated on the basis of the acres permanently retired from irrigation.

C. If the director approves a substitution of acres under this section, the director may modify an irrigation water duty established for the farm unit in which the certificated acres are located to reflect the removal of the limiting condition that is associated with the retired irrigation acres. The modification may be made without complying with section 45-572. The director shall give written notice of the modification to the owner of the certificated acres within thirty days after the modification. An aggrieved person may request an administrative review pursuant to section 45-575 or a variance pursuant to section 45-574. Unless a variance is obtained under section 45-574, the owner of the certificated acres and the person using groundwater on the certificated acres shall comply with the modified irrigation water duty no later than the compliance date specified in the modification notice which may be less than two years after the date of the notice.

D. For purposes of this section:

"Certificated acres" means the acres described on the certificate of irrigation grandfathered right.
"Limiting condition" means any condition that limits the achievement of more efficient irrigation on the certificated acres, including irregularly shaped certificated acres and poor quality soils.

§ 45-465.03 Right to use groundwater for domestic and stockwatering purposes incidental to irrigation grandfathered right; definitions

A. In an initial active management area, a person who holds a certificate of irrigation grandfathered right has the right to withdraw annually up to ten acre-feet of groundwater for domestic purposes or stockwatering from a well or wells the holder is using to withdraw groundwater for irrigation use on the certificated acres and use the groundwater pursuant to subsections B and C of this section if both of the following apply:

As of June 12, 1980 groundwater withdrawn from the well or wells was being used for domestic purposes or stockwatering.
No certificate of type 2 non-irrigation grandfathered right has been issued by the director based in whole or in part on the withdrawals for domestic purposes or stockwatering.

B. Groundwater withdrawn pursuant to this section may be used only:

On the same land on which groundwater withdrawn from the well or wells was being used for domestic purposes or stockwatering as of June 12, 1980.
For the same purpose for which groundwater withdrawn from the well or wells was being used as of June 12, 1980.

C. If groundwater withdrawn pursuant to this section is used for domestic purposes and stockwatering, the aggregate quantity of groundwater withdrawn for those purposes shall not exceed ten acre-feet per year.

D. For purposes of this section, a replacement well in the same location or a replacement well in a new location shall be considered to be the same well as the well being used as of June 12, 1980.

E. If the withdrawals for domestic purposes or stockwatering are separately measured with a water measuring device approved by the director pursuant to section 45-604, the withdrawals are exempt from the conservation requirements for non-irrigation uses established in the management plans adopted pursuant to article 9 of this chapter.

F. If the withdrawals for domestic purposes or stockwatering are not separately measured with a water measuring device approved by the director pursuant to section 45-604, the withdrawals shall be deemed to be withdrawals for irrigation use on the certificated acres for purposes of determining debits and credits to the flexibility account established pursuant to section 45-467 and for purposes of reporting the use to which the groundwater was applied in the annual reports required by section 45-632.

G. The right to withdraw and use groundwater pursuant to this section is an incident of an irrigation grandfathered right and may be leased or conveyed with the irrigation grandfathered right.

H. If an irrigation grandfathered right is retired or conveyed for a non-irrigation use, the right to withdraw and use groundwater pursuant to this section is extinguished.

I. For purposes of this section:

"Certificated acres" means the acres described on the certificate of irrigation grandfathered right.
"Domestic purposes" means uses related to the supply, service and activities of households and private residences. Domestic purposes does not include the application of water to produce plants or parts of plants for sale or human consumption, or for use as feed for livestock, range livestock or poultry, as such terms are defined in section 3-1201.
"Stockwatering" means watering livestock, range livestock or poultry, as such terms are defined in section 3-1201.

§ 45-465.04 Use of groundwater to water plants in containers as non-irrigation use; right to use groundwater withdrawn pursuant to irrigation grandfathered right to water plants in containers; definition

A. The use of groundwater to water plants in containers on or above the surface of the ground is a non-irrigation use in an active management area.

B. Notwithstanding subsection A of this section, in an initial active management area, a person who holds a certificate of irrigation grandfathered right may withdraw groundwater pursuant to the right and use the groundwater to water plants in containers on or above the surface of the certificated acres if the plants are grown for sale or human consumption or for use as feed for livestock, range livestock or poultry, as those terms are defined in section 3-1201.

C. A person who holds a certificate of irrigation grandfathered right shall separately measure with a measuring device approved by the director pursuant to section 45-604 any groundwater used for watering plants in containers on or above the surface of the certificated acres and any groundwater used for an irrigation use on the certificated acres.

D. Except as provided in section 45-563.02, if a person uses groundwater to water plants in containers pursuant to subsection B of this section, the total amount of water used by the person for that purpose and for any irrigation uses on the certificated acres may not exceed the amount allowed by the irrigation water duty for the farm.

E. The director may not register credits to the flexibility account established pursuant to section 45-467 for a farm in any year in which the person who holds the certificate of irrigation grandfathered right for the farm uses groundwater to water plants in containers on or above the surface of the certificated acres pursuant to subsection B of this section.

F. On request by the owner of a certificate of irrigation grandfathered right, the director shall separate the certificate into two certificates, with one certificate for those certificated acres on which plants in containers are watered with groundwater pursuant to subsection B of this section and one certificate for those certificated acres on which groundwater is used for an irrigation use. If the director separates a certificate of irrigation grandfathered right into two certificates pursuant to this subsection, the certificated acres associated with each certificate shall be considered a separate farm for purposes of subsection E of this section. The director may not separate a certificate of irrigation grandfathered right into two certificates pursuant to this subsection if it would result in the issuance of a certificate of irrigation grandfathered right with less than two certificated acres.

G. For the purposes of this section, "certificated acres" means the acres described on the certificate of irrigation grandfathered right.

§ 45-465.05 Permanent relinquishment of irrigation grandfathered rights; groundwater savings credits; assured water supply; rules; report; definitions

(Rpld. 1/1/36)

A. A person that owns land within the Phoenix or Pinal active management area that may be legally irrigated with groundwater pursuant to an irrigation grandfathered right may apply to the director to permanently relinquish all of the irrigation grandfathered right in exchange for groundwater savings credits. The director shall approve the application if all of the following conditions apply:

The person's use of the irrigation grandfathered right complies with this chapter and the applicable management plan.
For each irrigation grandfathered right that is relinquished, the director determines that land to which the irrigation grandfathered right is appurtenant has been legally irrigated with groundwater in at least three of the preceding five years.
The person has filed all reports required pursuant to section 45-632 for the last five years.
The person does not maintain a negative balance in the person's flexibility account established pursuant to section 45-467.
The department has not issued a certificate of assured water supply for the acres associated with the relinquishment.

B. The director shall quantify groundwater savings credits. When quantifying groundwater savings credits, the following apply:

The amount of groundwater savings credit shall be determined in acre-feet by multiplying the acres associated with the relinquishment by the following conversion multiplier:

(a) In the Phoenix active management area, one hundred fifty.

(b) In the Pinal active management area, one hundred.

A person may not receive groundwater savings credits for a volume of water that exceeds sixty times the mean amount of groundwater used annually pursuant to the irrigation grandfathered right in the three years with the highest use during the five years preceding an application to permanently relinquish the irrigation grandfathered right. If a person applies to relinquish an irrigation grandfathered right after conveyance of an irrigation grandfathered right, the mean amount of groundwater used annually shall be determined using a proportionate share of the total amount of groundwater used annually pursuant to any irrigation grandfathered rights appurtenant to the land included in the irrigation grandfathered right that the person has applied to relinquish in the years used to satisfy the requirements of subsection A, paragraph 2 of this section.

C. When issuing groundwater savings credits, the director shall:

Identify all of the following:

(a) The amount of groundwater savings credits as calculated pursuant to subsection B of this section.

(b) The number and location of the acres associated with the relinquishment.

(d) The owner of the acres associated with the relinquishment at the time of the relinquishment that holds the groundwater savings credits.

Determine whether the criteria prescribed in subsection D, paragraph 3 or subsection E, paragraph 3 of this section would be satisfied. This determination shall be applied to an assured water supply application that is submitted to the department within two years after the date the groundwater savings credits are issued and shall remain valid until the director makes a final decision on the assured water supply application.

D. For the purposes of a designation or modification of a designation of assured water supply, the volume of groundwater withdrawn or stored water recovered outside the area of impact of storage associated with groundwater savings credits calculated pursuant to subsection B of this section is exempt from the requirement to demonstrate that the groundwater is physically available in accordance with section 45-576 if all of the following apply:

The acres associated with the relinquishment and the location of the proposed use associated with the groundwater savings credits are or will be within the service area of a municipal provider that is designated as having an assured water supply or that has applied for a designation of assured water supply.
The applicant proposes to withdraw groundwater or stored water recovered outside of the area of impact of storage associated with the groundwater savings credits from one or more of the following locations:

(a) Any well that was used to serve land to which the irrigation grandfathered right is appurtenant.

(b) Any well that is located within one mile of any well that was used to serve land to which the irrigation grandfathered right is appurtenant.

(d) Any well that is located within one mile of the acres associated with the relinquishment.

The applicant demonstrates that groundwater or stored water recovered outside the area of impact of storage can be withdrawn to serve the proposed use for one hundred years without exceeding the depth of the aquifer or the applicable depth-to-static water level limit of the active management area, whichever is less. For the purposes of this demonstration:

(a) The director may not consider other withdrawals that exceed the depth of the aquifer or the applicable depth-to-static water level limit during the one hundred-year period as follows:

(i) In the Phoenix active management area, the depth-to-static water level limit is one thousand feet below land surface.

(ii) In the Pinal active management area, the depth-to-static water level limit is one thousand one hundred feet below land surface.

(b) For withdrawals located within one mile of any well that was used to serve land to which the irrigation grandfathered right is appurtenant, the applicant may rely on the director's determination pursuant to subsection C of this section, if applicable, or on the director's most recent assured water supply projection to satisfy this requirement. This subdivision shall not apply if more than forty percent of the water used during the period used in the director's most recent assured water supply projection by land to which the irrigation grandfathered right is appurtenant was in lieu water as defined in section 45-802.01.

(c) Except as provided by subdivision (b) of this paragraph, the applicant must update the director's most recent assured water supply projection only to make reasonable modifications to the locations or rates of the withdrawals to reflect the changes that result from the proposed use.

The applicant submits evidence to the department that the water used pursuant to the groundwater savings program established under this section will not be used on any of the following:

(a) Turf that is not located in a recreational use area or other space that is regularly used for stormwater management or for civic, community or other recreational purposes, including playgrounds, sports fields, cemeteries or schoolyards.

(b) Water parks.

(c) Decorative water features, including lakes, ponds or lagoons, except as provided in section 45-132, subsection B, paragraph 4, subdivision (a).

E. For the purposes of an application for a certificate of assured water supply that proposes to rely on groundwater savings credits, the volume of groundwater or stored water recovered outside the area of impact of storage associated with the amount of groundwater savings credits calculated pursuant to subsection B of this section is exempt from the requirement to demonstrate that the groundwater or stored water recovered outside the area of impact of storage is physically available in accordance with section 45-576 if all of the following apply:

The proposed use associated with the groundwater savings credits is on the acres associated with the relinquishment or on land that is located within one mile of the exterior boundary of the acres associated with the relinquishment.
The applicant proposes to withdraw groundwater or stored water recovered outside the area of impact of storage associated with the groundwater savings credits from one or more of the following locations:

(a) Any well that was used to serve land to which the irrigation grandfathered right is appurtenant.

(b) Any well that is located within one mile of any well that was used to serve land to which the irrigation grandfathered right is appurtenant.

(d) Any well that is located within one mile of the acres associated with the relinquishment.

The applicant demonstrates that groundwater or stored water recovered outside of the area of impact of storage can be withdrawn to serve the proposed use for one hundred years without exceeding the depth of the aquifer or the applicable depth-to-static water level limit of the active management area, whichever is less. For the purposes of this demonstration:

(a) The director may not consider other withdrawals that exceed the depth of the aquifer or the applicable depth-to-static water level limit during the one hundred-year period as follows:

(i) In the Phoenix active management area, the depth-to-static water level limit is one thousand feet below land surface.

(ii) In the Pinal active management area, the depth-to-static water level limit is one thousand one hundred feet below land surface.

(b) For withdrawals located within one mile of any well that was used to serve the irrigation grandfathered right, the applicant may rely on the director's determination pursuant to subsection C of this section, if applicable, or on the director's most recent assured water supply projection to satisfy this requirement. This subdivision shall not apply if more than forty percent of the water used by the irrigation grandfathered right during the period used in the director's most recent assured water supply projection was in lieu water as defined in section 45-802.01.

The applicant submits evidence to the department that the water used pursuant to the groundwater savings program established under this section will not be used on any of the following:

(b) Water parks.

(c) Decorative water features, including lakes, ponds or lagoons, except as provided in section 45-132, subsection B, paragraph 4, subdivision (a).

F. An applicant that submits an application for a certificate of assured water supply on or before December 31, 2030 may rely on groundwater savings credits pledged to the certificate that is issued based on that application. An applicant may not pledge groundwater savings credits to an application for a certificate of assured water supply that is submitted on or after January 1, 2031.

G. The director shall adopt rules on or before June 30, 2026 through expedited rulemaking to:

Set licensing time frames to issue groundwater savings credits.
Develop a summary process to apply groundwater savings credits to designations of assured water supply.

H. Before the director issues groundwater savings credits, the director shall both:

Notify the holder of the irrigation grandfathered right in writing of the department's preliminary recommendations regarding the items described in subsection C of this section.
Request written confirmation that the holder of the irrigation grandfathered right would like to proceed with relinquishment. On receipt of confirmation that the applicant would like to relinquish the irrigation grandfathered right, the director shall issue groundwater savings credits pursuant to subsection C of this section.

I. A person that holds groundwater savings credits may assign the person's credits to the subsequent owner of the acres associated with the relinquishment. A person that holds groundwater savings credits may pledge the credits to an assured water supply application that proposes to rely on the credits pursuant to subsection D or E of this section.

J. After the director issues a certificate of assured water supply based on groundwater savings credits, if a municipal provider that serves acres associated with the relinquishment becomes a designated provider or if the service area of a designated provider is extended to include the subdivision for which a certificate of assured water supply was issued, the remaining groundwater savings credits associated with the certificate shall be used to support the designation.

K. On acres associated with the relinquishment and areas within one mile of the acres associated with the relinquishment that use groundwater pursuant to subsection E of this section, the following prohibitions apply:

A municipal provider or association as defined in section 33-1802 may not use the groundwater or stored water recovered outside the area of impact of storage for any of the following:

(a) Application to turf that is not located in a recreational use area or other space that is regularly used for stormwater management or for civic, community or recreational purposes, including playgrounds, sports fields, cemeteries or schoolyards.

(b) Water parks.

(c) Decorative water features, including lakes, ponds or lagoons, except as provided in section 45-132, subsection B, paragraph 4, subdivision (a).

An association as defined in section 33-1802 may not adopt or enforce any of the following:

(a) Minimum turf requirements for turf that is not located in a recreational use area or other space that is regularly used for stormwater management or for civic, community or recreational purposes, including playgrounds, sports fields, cemeteries or schoolyards.

(b) Requirements for the installation, filling or refilling of:

(i) Water parks.

(ii) Decorative water features, including lakes, ponds or lagoons, except as provided in section 45-132, subsection B, paragraph 4, subdivision (a).

L. The director may adopt rules to implement the groundwater savings program prescribed by this section for the Tucson active management area that include an applicable conversion multiplier and necessary parameters to ensure groundwater savings in the Tucson active management area if the director determines that all of the following apply:

Groundwater withdrawals in the Tucson active management area over a period of one hundred years will exceed the depth-to-static water level of one thousand feet or the depth of the aquifer, whichever is less.
A groundwater savings program established in the Tucson active management area would reduce groundwater use over the next one hundred years.
Expanding the program to include the Tucson active management area would be in the best interest of that active management area and of a conservation district.

M. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director pursuant to this section.

N. On application to the director by the current owner of the acres associated with the relinquishment, the director shall restore a relinquished irrigation grandfathered right and rescind all issued groundwater savings credits if the groundwater savings credits have not been pledged to a certificate of assured water supply or a designation of assured water supply pursuant to section 45-576, subsection M.

O. For the purposes of this section:

"Acres associated with the relinquishment" means land to which the irrigation grandfathered right that is relinquished in exchange for groundwater savings credits was appurtenant.
"Municipal provider" has the same meaning prescribed in section 45-561.
Stored water recovered outside the area of impact does not include long-term storage credits issued to the Arizona water banking authority or held by the Arizona water banking authority at any time.
"Well" includes a replacement well as prescribed in section 45-597 or 45-598.

§ 45-466 Limitations on use of irrigation water duty; deliveries of water in excess of irrigation water duty

A. The irrigation water duty shall be used to determine the maximum amount of groundwater which may be used pursuant to section 45-465, subsection B and debits and credits to the flexibility account as set forth in section 45-467. Except as provided in subsection B of this section, the irrigation water duty shall not be applied to diminish surface water delivered to lands pursuant to appropriative surface water rights or decreed surface water rights.

B. In the Santa Cruz active management area, the irrigation water duty shall be used to determine the maximum amount of water, other than stored water, withdrawn from a well which may be used to irrigate the irrigation acres in a farm.

§ 45-467 Withdrawals in excess of irrigation grandfathered right; withdrawals less than irrigation grandfathered right; flexibility account; conveyances; variance; exemption

A. A person who is entitled to use groundwater pursuant to an irrigation grandfathered right may:

In an active management area other than the Santa Cruz active management area, use groundwater in excess of the amount allowed by the right in an amount determined pursuant to subsection I of this section.
In the Santa Cruz active management area, use water, other than stored water, withdrawn from a well in excess of the farm's current irrigation water duty multiplied by the farm's water duty acres in an amount determined pursuant to subsection J of this section.
Use less than the amount allowed by the right in one accounting period and use the remaining amount allowed by the right in a succeeding accounting period or periods.

B. The director shall establish rules for the maintenance of a flexibility account for each farm in an active management area.

C. If a farm located in an active management area other than the Santa Cruz active management area is irrigated solely with groundwater, the director shall:

Register a debit to the account in any accounting period in which the amount of groundwater used for the irrigation of the irrigation acres in the farm is greater than the current irrigation water duty for the farm multiplied by the water duty acres in the farm.
Register a credit to the account in any accounting period in which the amount of groundwater used for the irrigation of the irrigation acres in the farm is less than the current irrigation water duty for the farm multiplied by the water duty acres in the farm.

D. Except as provided in subsection G of this section, if a farm located in an active management area other than the Santa Cruz active management area is irrigated with a combination of surface water or effluent, or both, and groundwater, and uses of water by the farm from all sources for irrigation purposes, except for surface water, other than Colorado river water, released for beneficial use from storage, diversion or distribution facilities to avoid spilling that would otherwise occur due to uncontrolled surface water inflows that exceed facility capacity, in the accounting period:

Exceed the amount of the current irrigation water duty for the farm multiplied by the water duty acres in the farm, the amount of groundwater used up to the amount of the excess, less any effluent used, shall be registered as a debit to the account.
Are less than the amount of the current irrigation water duty for the farm multiplied by the water duty acres in the farm, the amount of water not used which would have been groundwater shall be registered as a credit to the account.

E. If a farm located in the Santa Cruz active management area is irrigated solely with water, other than stored water, withdrawn from a well, the director shall:

Register a debit to the account in any accounting period in which the amount of water, other than stored water, withdrawn from a well and used for the irrigation of the irrigation acres in the farm is greater than the current irrigation water duty for the farm multiplied by the water duty acres in the farm. The amount of the debit shall equal the amount of the excess.
Register a credit to the account in any accounting period in which the amount of water, other than stored water, withdrawn from a well and used for the irrigation of the irrigation acres in the farm is less than the current irrigation water duty for the farm multiplied by the water duty acres in the farm.

F. If a farm located in the Santa Cruz active management area is irrigated with a combination of surface water not withdrawn from a well and effluent, or both, and water, other than stored water, withdrawn from a well, and uses of water by the farm from all sources for irrigation purposes in the accounting period:

Exceed the amount of the current irrigation water duty for the farm multiplied by the water duty acres in the farm, the amount of water, other than stored water, withdrawn from a well and used on the farm up to the amount of the excess, less any effluent used that does not qualify as stored water, shall be registered as a debit to the account.
Are less than the amount of the current irrigation water duty for the farm multiplied by the water duty acres in the farm, the amount of water not used which would have been water, other than stored water, withdrawn from a well shall be registered as a credit to the account.

G. Beginning January 1, 1995 through December 31, 1999, if a farm that qualifies under this subsection as determined pursuant to subsection H of this section is irrigated during an accounting period with a combination of surface water or effluent, or both, and groundwater, and uses of water by the farm from all sources for irrigation purposes, except for surface water, other than Colorado river water, released for beneficial use from storage, diversion or distribution facilities to avoid spilling that would otherwise occur due to uncontrolled surface water inflows that exceed facility capacity, in the accounting period:

Exceed the amount of the first intermediate irrigation water duty established for the farm pursuant to section 45-565 multiplied by the water duty acres in the farm, the amount of groundwater used up to the amount of the excess, less any effluent used, shall be registered as a debit to the account.
Are less than the amount of the current irrigation water duty for the farm multiplied by the water duty acres in the farm, the amount of water not used that would have been groundwater shall be registered as a credit to the account.
Exceed or equal the amount of the current irrigation water duty for the farm multiplied by the water duty acres in the farm but are less than or equal to the amount of the first intermediate irrigation water duty established for the farm pursuant to section 45-565 multiplied by the water duty acres in the farm, no credit or debit may be registered to the account.

H. A farm qualifies under subsection G of this section if it is located in an active management area other than the Santa Cruz active management area and either of the following applies:

The amount of groundwater used to irrigate the farm during the accounting period does not exceed an amount computed by multiplying the water duty acres in the farm by one and one-half acre-feet of water, except that an electrical district organized under title 48, chapter 12 or an irrigation district may apply to the director no later than March 31 of a year for an increase in that amount for that year for the farms located within the boundaries of the district that do not qualify under paragraph 2 of this subsection. The director shall grant the increase if the district demonstrates that it holds a contract for the purchase of hydroelectric power marketed by the western area power administration or the Arizona power authority and that the use of groundwater during that year by all of the farms within the boundaries of the district that do not qualify under paragraph 2 of this subsection in an amount that does not exceed one and one-half acre-feet of water multiplied by the total number of water duty acres of those farms would result in the district being unable to use its hydroelectric power capacity entitlement under the contract. If the director grants the increase, the director shall compute the maximum amount of groundwater that may be used by a farm within the district during the year in order to qualify under subsection G of this section as follows:

(a) Determine the total amount of groundwater that must be used during the year by all farms in the district that do not qualify under paragraph 2 of this subsection to enable the district to efficiently use its hydroelectric kilowatt demand allocation.

(b) Divide the amount determined in subdivision (a) of this paragraph by the total number of water duty acres of the farms in the district that do not qualify under paragraph 2 of this subsection.

(c) Multiply the farm's water duty acres by the quotient in subdivision (b) of this paragraph or two acre-feet of water, whichever is less.

The farm is irrigated with water supplied by an irrigation district that owns or leases and operates all of the wells used to withdraw groundwater for irrigation use within the district, and the total amount of groundwater supplied by the irrigation district for irrigation use during the year does not exceed an amount computed by multiplying the total number of water duty acres within the irrigation district by one and one-half acre-feet of water, except that the irrigation district or an electrical district organized under title 48, chapter 12 may apply to the director no later than March 31 of a year for an increase in that amount for that year for the farms located within the boundaries of the irrigation district. The director shall grant the increase if the irrigation district or electrical district demonstrates that it holds a contract for the purchase of hydroelectric power marketed by the western area power administration or the Arizona power authority and that the irrigation district or electrical district would be unable to use its hydroelectric power capacity entitlement under the contract if the total amount of groundwater supplied by the irrigation district for irrigation use during the year does not exceed an amount computed by multiplying the total number of water duty acres within the irrigation district by one and one-half acre-feet of water. If the director grants the increase, the maximum amount of groundwater that may be supplied by the irrigation district for irrigation use during the year in order for the farms located within the boundaries of the irrigation district to qualify under subsection G of this section shall be the lesser of the following:

(a) The amount of groundwater that the director determines must be supplied by the irrigation district for irrigation use during the year to enable the irrigation district or electrical district to efficiently use its hydroelectric kilowatt demand allocation.

(b) An amount of groundwater computed by multiplying the total number of water duty acres within the irrigation district by two acre-feet of water.

I. The maximum excess amount of groundwater that may be used pursuant to this section is equal to fifty per cent of the current irrigation water duty for the farm multiplied by the water duty acres in the farm. An owner of an irrigation grandfathered right and the person using groundwater pursuant to the right violate this section if the flexibility account for the farm in which the irrigation acres to which the right is appurtenant are located is in arrears at any time in excess of this amount. Groundwater equal to the credit balance in the flexibility account may be used at any time.

J. In the Santa Cruz active management area, the maximum excess amount of water, other than stored water, withdrawn from a well that may be used pursuant to this section is equal to fifty per cent of the current irrigation water duty for the farm multiplied by the water duty acres in the farm. A person using water, other than stored water, withdrawn from a well for an irrigation use in the Santa Cruz active management area violates this section if the flexibility account for the farm is in arrears at any time in excess of this amount. Water, other than stored water, withdrawn from a well in an amount equal to the credit balance in the flexibility account may be used at any time, except that if the water is surface water, the amount that may be used shall not exceed the amount allowed by the decreed or appropriative surface water right.

K. If an irrigation grandfathered right is conveyed for an irrigation use pursuant to section 45-472, each acre conveyed shall carry with it a proportional share of any debits or credits in the flexibility account for the farm. If an irrigation grandfathered right is conveyed for a non-irrigation use pursuant to section 45-472, each acre conveyed shall carry with it a proportional share of any debits in the flexibility account for the farm.

L. A person in an active management area other than the Santa Cruz active management area who is using groundwater pursuant to an irrigation grandfathered right and who is operating under a variance to the irrigation water duty pursuant to section 45-574:

May accumulate a maximum debit in an amount equal to fifty per cent of the current irrigation water duty for the farm multiplied by the water duty acres in the farm.
Shall accumulate credits pursuant to subsection C or D of this section.

M. A person in the Santa Cruz active management area who is using water, other than stored water, withdrawn from a well for an irrigation use and who is operating under a variance to the irrigation water duty pursuant to section 45-574:

May accumulate a maximum debit in an amount equal to fifty per cent of the current irrigation water duty for the farm multiplied by the water duty acres in the farm.
Shall accumulate credits pursuant to subsection E or F of this section.

N. In an active management area other than the Santa Cruz active management area, a person using groundwater pursuant to an irrigation grandfathered right shall file a report with the director each year which shall include the amount of groundwater used pursuant to the irrigation grandfathered right and such other information as the director shall require. In the Santa Cruz active management area, a person using water, other than stored water, withdrawn from a well for irrigation use shall file a report with the director each year which shall include the amount of water used on the farm and such other information as the director shall require. The director may consolidate the reporting requirements of this section with the reporting requirements of section 45-632. A person using groundwater pursuant to an irrigation grandfathered right that is regulated under a best management practices program adopted by the director, pursuant to section 45-566.02, subsection F, section 45-567.02, subsection G or section 45-568.02, subsection F, is exempt from the reporting requirements of this subsection for groundwater used pursuant to the irrigation grandfathered right, except that the person shall file a report with the director each year that includes the information required by the best management practices program. A person using groundwater pursuant to an irrigation grandfathered right that is appurtenant to ten or fewer irrigation acres is exempt from the reporting requirements of this subsection for groundwater used pursuant to the irrigation grandfathered right unless one of the following applies:

The land to which the irrigation grandfathered right is appurtenant is part of an integrated farming operation.
Groundwater is withdrawn from the land to which the irrigation grandfathered right is appurtenant and delivered for use pursuant to either a service area right pursuant to article 6 of this chapter or a grandfathered groundwater right other than an irrigation grandfathered right that is appurtenant to irrigation acres that are exempt from irrigation water duties pursuant to section 45-563.02.
Groundwater is withdrawn from land that is both owned by the owner of the irrigation grandfathered right and contiguous to the land to which the irrigation grandfathered right is appurtenant and delivered for use pursuant to either a service area right pursuant to article 6 of this chapter or a grandfathered groundwater right other than an irrigation grandfathered right that is appurtenant to irrigation acres that are exempt from irrigation water duties pursuant to section 45-563.02.

O. A person who owns an irrigation grandfathered right that is appurtenant to irrigation acres that were capable of being irrigated as of December 31 of the preceding calendar year and whose farm has registered a credit balance to its flexibility account may convey or sell all or a portion of the credit balance to any person, including the conveyor or seller of the credit balance, who owns another irrigation grandfathered right or who uses groundwater pursuant to another irrigation grandfathered right, except that:

A credit balance that is registered to the flexibility account of a farm located within an irrigation district may be transferred only to:

(a) The flexibility account of a farm that is located within the same irrigation district.

(b) The flexibility account of a farm that is located outside of that irrigation district if both farms are located in the same groundwater subbasin and the same active management area and if the farm to which the credits are conveyed is owned or leased by the owner or lessee of the farm from which the credits are conveyed.

A credit balance that is registered to the flexibility account of a farm that is not located within an irrigation district may be transferred only to:

(a) The flexibility account of a farm that is located within the same groundwater subbasin and the same active management area and that is not located within an irrigation district.

(b) The flexibility account of a farm that is located within the same groundwater subbasin and the same active management area and that is located within an irrigation district if the farm to which the credits are conveyed is owned or leased by the owner or lessee of the farm from which the credits are conveyed.

A credit registered to a flexibility account for a year may be conveyed or sold only during the second calendar year following the year for which the credit was registered.
A person who owns a farm that includes protected farmland may not sell or otherwise convey any credit registered to the farm's flexibility account.

P. A person who sells or conveys all or a portion of a credit balance pursuant to subsection O of this section, and the person to whom the credit balance is sold or conveyed, shall notify the director of the sale or conveyance within thirty days after the sale or conveyance on a form prescribed and furnished by the director.

Q. The director shall establish and collect a reasonable fee from the conveyee or purchaser of a credit balance pursuant to subsection O of this section to cover the cost of administrative services and other expenses associated with registering a deduction to the conveyor's or seller's flexibility account balance and an addition to the conveyee's or purchaser's flexibility account balance pursuant to subsection R of this section. The conveyee or purchaser shall pay the fee at the time the notice required pursuant to subsection P of this section is given to the director. The director shall deposit, pursuant to sections 35-146 and 35-147, all fees received under this subsection in the water resources fund established by section 45-117.

R. A sale or conveyance of all or part of a credit balance under subsection O of this section is effective only if the director receives the notice required by subsection P of this section and the fee required by subsection Q of this section within thirty days after the sale or conveyance. After receiving the notice and the fee, the director shall register a deduction of the credit amount conveyed or sold from the conveyor's or seller's flexibility account balance and the corresponding addition to the conveyee's or purchaser's flexibility account balance. The deduction and addition to the flexibility account balances are effective as of the date of the sale or conveyance.

S. The director shall report to the president of the senate and the speaker of the house of representatives no later than June 30, 2002 on the effect of conveyances of flexibility account credit balances pursuant to subsection O, paragraph 2 of this section on the achievement of the management goal of each active management area as stated in section 45-562 and on the conservation program included in the management plan for each active management area as provided in section 45-565, and any recommended changes to subsection O, paragraph 2 of this section.

T. Except for subsection N of this section, this section does not apply to:

A farm if the person entitled to use groundwater on the farm is exempt from the irrigation water duties established for the farm as provided in section 45-563.02, subsection A or if the director may not establish irrigation water duties for the farm as provided in section 45-563.02, subsection B.
A farm if water use within the farm is regulated under a best management practices program adopted by the director pursuant to section 45-566.02, subsection F, section 45-567.02, subsection G or section 45-568.02, subsection F.

§ 45-468 Accounting of water by persons delivering a combination of surface water and groundwater for irrigation uses

A. A person delivering a combination of surface water or effluent, or both, and groundwater for irrigation uses shall prior to the beginning of each accounting period estimate the amount of groundwater that will be withdrawn and delivered during the next accounting period and shall make such estimate available to the director. The estimate may be modified from time to time as conditions warrant.

B. Within ninety days following the end of each accounting period a person who delivers a combination of surface water or effluent, or both, and groundwater for uses by cities, towns, private water companies, industries, farms or other users shall provide the director with an accounting for water during the past accounting period which shows the following:

All surface water provided to each class of user and each farm.
All groundwater provided to each class of user and each farm.
All effluent provided to each class of user and each farm.

C. If a person delivers water to a user through a delivery system that commingles groundwater with surface water or effluent, or both, the amount of groundwater charged to the user pursuant to the accounting in subsection B shall be computed as follows:

Determine the total amount of water delivered to the user through the system during the accounting period.
Determine the amount of surface water and effluent that would have been delivered to the user through the system during the accounting period if no groundwater had been delivered through the system.
Subtract the amount determined pursuant to paragraph 2 from the amount determined pursuant to paragraph 1.

§ 45-469 Right to retire irrigation grandfathered right for non-irrigation use; development plan approval; amendment of plan; approval of plan prior to retirement; amount withdrawn; service area determined; restoration of retired irrigation grandfathered right

A. Except as provided in section 45-480, subsection F and subsection P of this section, except as provided in subsection I of this section, a person who owns land that is legally entitled to be irrigated with groundwater pursuant to an irrigation grandfathered right and that is located within an active management area and outside of the exterior boundaries of the service area of a city, town or private water company has the right to retire such land from irrigation in anticipation of a future non-irrigation use and shall not forfeit or abandon the right to withdraw from or receive for such land the amount of groundwater calculated pursuant to subsection F of this section for a non-irrigation use if all of the following apply:

The land is held in the same ownership.
A development plan for the proposed non-irrigation use exists and is approved by the director within a reasonable time before or after the land is retired.
Either one of the following applies:

(a) The land has never been designated by the director as protected farmland pursuant to section 45-483, subsection A.

(b) The director designated the land as protected farmland pursuant to section 45-483, subsection A, the director subsequently revoked the designation pursuant to section 45-483, subsection C, paragraph 1 and the director determined at the time the designation was revoked that the conservation easement in the land was terminated because a partial or full condemnation of the land made farming impracticable.

B. Except as provided in subsection P of this section, the director shall approve the development plan required by subsection A of this section if it appears that the land:

Has been or will be retired for the bona fide purpose of conserving or using water for a non-irrigation use that would otherwise continue to be used for irrigation of such land.
Has not been sold or taken out of production primarily because it would have been uneconomical to continue to withdraw water for irrigation.

C. The director shall not investigate the legality, other than pursuant to this chapter, feasibility or other factors involved in the proposed development plan and shall not disapprove a development plan on such grounds.

D. A development plan may be amended and the director shall approve amendments if the criteria of this section are met.

E. A person proposing to retire irrigated land that is located inside or outside of an active management area may apply to the director for approval of a proposed development plan prior to the retirement of such land.

F. The amount of groundwater that may be withdrawn or received annually per acre pursuant to this section is the lesser of:

The current maximum amount of groundwater that may be used pursuant to the irrigation grandfathered right for the acre at the time it is retired, as calculated pursuant to section 45-465, subsection B.
Three acre-feet multiplied by the water duty acres in the farm in which the acre to which the right is appurtenant is located divided by the number of irrigation acres in the farm.

G. The right to withdraw or receive groundwater pursuant to this section is a non-irrigation grandfathered right associated with retired irrigated land, or a type 1 non-irrigation grandfathered right as described in section 45-463.

H. Whether the land to which an irrigation grandfathered right is appurtenant is within the exterior boundaries of the service area of a city, town or private water company shall be determined as of the date the development plan is filed with the director.

I. A city or town in an initial active management area that holds a certificate of irrigation grandfathered right for acres of land that were acquired before January 1, 1989 in another initial active management area, and a groundwater replenishment district established under title 48, chapter 27 that purchases any of that land from the city or town, has the right, subject to subsections J, K, L and M of this section, to retire the land in anticipation of a future non-irrigation use and withdraw from any location on the land groundwater for non-irrigation use on the land or for transportation to another initial active management area for the purpose of demonstrating and providing an assured water supply if all of the following apply:

Before January 1, 1989, the city or town filed with the director a development plan pursuant to this section for all or a portion of the land.
Any withdrawals pursuant to this subsection from a new well, as defined in section 45-591, will comply with the rules adopted pursuant to section 45-598, subsection A to prevent unreasonably increasing damage to surrounding land or other water users from the concentration of wells.
Any withdrawals for transportation to another initial active management area for the purpose of demonstrating and providing an assured water supply are made from a depth to one thousand two hundred feet at the site or sites of the withdrawals, except that the wells may be drilled to any depth.

J. The amount of groundwater that may be withdrawn and used annually pursuant to subsection I of this section shall be determined pursuant to subsection F of this section. The maximum amount of such groundwater that may be included by the director in determining whether to designate or redesignate the city or town as having an assured water supply pursuant to section 45-576 equals one hundred times the total amount that may be withdrawn annually from the land.

K. A city or town that is eligible for a type 1 non-irrigation grandfathered right under subsection I of this section may:

Before retiring the land under subsection I of this section, substitute for the acres of land described in subsection I of this section the same number of acres owned by the city or town to which irrigation grandfathered rights are appurtenant and located in the same subbasin as the acres described in subsection I of this section.
At any time, elect to convert a type 1 non-irrigation grandfathered right appurtenant to land in the same subbasin and acquired by the city or town before January 1, 1989 under subsection A of this section to a type 1 non-irrigation grandfathered right under subsection I of this section.

L. In determining whether to designate or redesignate the city or town as having an assured water supply pursuant to section 45-576, based in whole or in part on groundwater transported from the active management area under subsection I of this section, the director shall include the amount of groundwater that may be included under subsection J of this section and can be withdrawn from a depth to one thousand two hundred feet at the site or sites of the proposed withdrawals at a rate that, when added to the existing rate of withdrawals in the area, is not expected to cause the groundwater table at the site or sites of the proposed withdrawals to decline more than an average of ten feet per year during the one hundred year evaluation period.

M. In any designation or redesignation of an assured water supply pursuant to section 45-576, the projected use of the groundwater that is demonstrated to be available for assured water supply purposes under subsection L of this section is deemed to be consistent with achieving the management goal for the active management area. In any such designation or redesignation, the director shall determine whether the projected use is consistent with the management plan for the active management area by determining whether the projected use is consistent with the management plan of the active management area in which the city or town to be designated or redesignated is located.

N. Subsections A, B and H of this section do not apply to type 1 non-irrigation grandfathered rights acquired under subsection I of this section.

O. The director may restore retired irrigation grandfathered rights to land that was retired from irrigation under this section according to the following conditions and procedures:

Title to the retired land has reverted involuntarily, or voluntarily in lieu of foreclosure or forfeiture, from the person who retired it from irrigation, or a successor in title, to a previous owner.
The current owner of the retired land must apply to the director in writing stating:

(a) The history of the original retirement from irrigation under this section.

(b) The circumstances regarding the reversion of title to the current owner.

The director shall enter the application in the registry under section 45-479 and review the application. An administrative hearing shall be held in the active management area in which the use is located on whether to restore the irrigation grandfathered rights to the land.
The director must find that restoring the irrigation grandfathered rights:

(a) Will not adversely impact the management of the active management area.

(b) Is necessary to prevent unreasonable hardship to the current owner of the retired land.

If the director decides to restore the retired irrigation grandfathered rights to the land:

(a) The retired irrigation land regains its original irrigation grandfathered rights, with the debits and credits in its flexibility account at the time of retirement.

(b) The type 1 non-irrigation grandfathered right under this section is terminated.

P. 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, the director shall withhold approval of a development plan that is submitted under this section by a person who seeks to obtain a non-irrigation grandfathered right associated with retired irrigated land located in the district unless at the time the plan is submitted:

The director has determined that the district's plan for operation is consistent with achieving the management goal, according to section 45-576.03, subsection E, and the designation has not expired.
The master replenishment account, as established in section 45-858.01, does not have a debit balance in an amount in excess of the amount allowed under section 45-576.01, subsection A, paragraph 3.

Q. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

§ 45-470 Use of type 1 non-irrigation grandfathered right by original owner; definition

A. Except as provided in section 45-469, subsection I, or as provided in subsection B of this section, the original owner of a type 1 non-irrigation grandfathered right pursuant to section 45-463 or 45-469 may:

Use groundwater withdrawn pursuant to the right for any non-irrigation use:

(a) On the land to which the right is appurtenant.

(b) On any other land, subject to the provisions governing transportation of groundwater in articles 8 and 8.1 of this chapter, except that, if the land to which the right is appurtenant is included within the exterior boundaries of the service area of a city, town or private water company, use groundwater on other land only if the use on other land was commenced prior to the date of the designation of the active management area or is pursuant to a development plan filed with the director prior to the inclusion of the land within the exterior boundaries of the service area of the city, town or private water company.

Pursuant to section 45-473, convey retired irrigated land with the appurtenant type 1 non-irrigation grandfathered right. Any land not conveyed shall retain its appurtenant type 1 non-irrigation grandfathered right.

B. The original owner of a type 1 non-irrigation grandfathered right pursuant to section 45-463 or 45-469 shall not withdraw or use groundwater pursuant to the portion of the type 1 non-irrigation grandfathered right that is appurtenant to land which the original owner may irrigate with effluent under section 45-452, subsection J.

C. For the purposes of this section, "original owner" means:

The person who acquired and retired land from irrigation prior to the date of the designation of the active management area pursuant to section 45-463 and any person or entity that holds such land under the same ownership as defined by section 45-461.
The person who retires legally irrigated land after the date of the designation of the active management area pursuant to section 45-469 and any person or entity that holds such land under the same ownership as defined by section 45-461.

§ 45-471 Use of type 2 non-irrigation grandfathered right by owner

A. The owner of a type 2 non-irrigation grandfathered right pursuant to section 45-464 may use groundwater withdrawn pursuant to the right for any non-irrigation purpose at any location, subject to the provisions governing transportation of groundwater in article 8 of this chapter, except that, if the right is based on withdrawals of groundwater:

For the extraction or processing of minerals, the owner may use groundwater withdrawn pursuant to the right only for the purpose of mineral extraction or processing. For the purposes of this article, mineral extraction and processing use of groundwater means all withdrawals and uses of groundwater related to a mining operation including compliance with applicable environmental controls.
For the generation of electrical energy, the owner may use groundwater withdrawn pursuant to the right only for electrical energy generation.

B. The owner of a type 2 non-irrigation grandfathered right may withdraw groundwater pursuant to the right only from those wells listed on the certificate of grandfathered right.

C. The owner of a type 2 non-irrigation grandfathered right may request the director to issue a revised certificate to reflect new or additional points of withdrawal. If a proposed new or additional point of withdrawal is a well that was drilled pursuant to a permit or notice of intention to drill filed after June 12, 1980, the owner shall demonstrate that the proposed withdrawals will not cause unreasonably increasing damage to surrounding land or other water users, and in the Santa Cruz active management area, that the proposed withdrawals will be consistent with the management plan for the active management area.

D. If a type 2 non-irrigation grandfathered right is leased, the lessee may use groundwater withdrawn pursuant to the right subject to subsections A, B and C of this section.

§ 45-472 Conveyance of irrigation grandfathered right; within service area; outside service area; change to non-irrigation grandfathered right; forfeiture of right to convey to non-irrigation use; definition

A. The owner of an irrigation grandfathered right may convey the right only with the land to which the right is appurtenant.

B. If the land to which an irrigation grandfathered right is appurtenant is within the exterior boundaries of the service area of a city, town or private water company:

The irrigation grandfathered right may be conveyed only for an irrigation use, except for expanded animal industry use or as provided in paragraphs 2 and 3 of this subsection. If an irrigation grandfathered right is conveyed for an irrigation or expanded animal industry use, the full amount of the right is conveyed. The amount of groundwater conveyed pursuant to the right:

(a) For an irrigation use may be withdrawn from the land to which the right is appurtenant or any other land and may be used only on the land to which the right is appurtenant or on contiguous irrigation acres under common ownership within the service area of the city, town or private water company subject to the provisions of articles 8 and 8.1 of this chapter relating to transportation of groundwater. For purposes of this subdivision, irrigation acres that are separated by a road, highway, easement or right-of-way from the land to which the irrigation grandfathered right is appurtenant are deemed to be contiguous.

(b) For an expanded animal industry use may be withdrawn by the new owner of the right only from the land to which the right is appurtenant and used on that land or on any other land, subject to the provisions of articles 8 and 8.1 of this chapter relating to transportation of groundwater. If the groundwater was delivered by an irrigation district to the previous owner of the right, the irrigation district may continue to deliver groundwater to the new owner pursuant to the right. If any portion of the amount of groundwater conveyed is withdrawn by the new owner and used on other land, no additional groundwater may be withdrawn for use on the land to which the right is appurtenant.

The irrigation grandfathered right may be conveyed to an industry engaged in the generation of electrical energy for the purpose of electrical energy generation, except that, if the facility for the generation of electrical energy is not subject to title 40, chapter 2, article 6.2, the conveyance is subject to the approval of:

(a) The appropriate city or town, if the irrigation grandfathered right to be conveyed is appurtenant to land within the exterior boundaries of the service area of a city or town.

(b) The director, if the irrigation grandfathered right to be conveyed is appurtenant to land within the corporate limits of a city or town and within the exterior boundaries of the service area of a private water company.

If an irrigation grandfathered right is conveyed for a non-irrigation use pursuant to paragraph 2 of this subsection, the amount of the right that is conveyed is the lesser of:

(a) The current maximum amount of groundwater that may be used pursuant to the right, as calculated pursuant to section 45-465, subsection B.

(b) Three acre-feet per year multiplied by the number of water duty acres in the farm in which the acre to which the right is appurtenant is located divided by the number of irrigation acres in the farm.

The new owner of an irrigation grandfathered right conveyed pursuant to paragraph 2 of this subsection may withdraw the amount of groundwater conveyed pursuant to that right, as determined in paragraph 3 of this subsection, only from the land to which the right is appurtenant and use the groundwater on that land, but may not use the groundwater on other land, except that, if the groundwater was delivered by an irrigation district to the previous owner of the right, the irrigation district may continue to deliver groundwater to the new owner pursuant to the right for use on the land to which the right is appurtenant.
All withdrawal or use of groundwater pursuant to this subsection is subject to subsection H of this section.

C. If the land to which an irrigation grandfathered right is appurtenant is included within the exterior boundaries of the service area of a city, town or private water company subsequent to the date of the designation of an active management area, the owner of the right may, with the approval of the director and consistent with the provisions of this chapter, convey the grandfathered right for a non-irrigation use, other than an expanded animal industry use, on the land to which the right is appurtenant, upon a showing that adequate water service is unavailable at rates comparable to rates charged similar classes of water users within such service area. The amount of the right conveyed is determined pursuant to subsection B, paragraph 3 of this section. All withdrawal or use of groundwater pursuant to this subsection is subject to subsection H of this section.

D. If the land to which an irrigation grandfathered right is appurtenant is outside of the exterior boundaries of the service area of a city, town or private water company:

The irrigation grandfathered right may be conveyed for an irrigation use or a non-irrigation use. If an irrigation grandfathered right is conveyed for an irrigation or an expanded animal industry use, the full amount of the right is conveyed. If an irrigation grandfathered right is conveyed for a non-irrigation use, other than an expanded animal industry use, the amount of the right that is conveyed is the lesser of:

(a) The current maximum amount of groundwater that may be used pursuant to the right as calculated pursuant to section 45-465, subsection B.

(b) Three acre-feet per year multiplied by the number of water duty acres in the farm in which the acre to which the right is appurtenant is located and divided by the number of irrigation acres in the farm.

The amount of groundwater conveyed pursuant to the right for a non-irrigation use, as determined in paragraph 1 of this subsection, may be withdrawn by the new owner of the right only from the land to which the right is appurtenant and used on that land or on any other land, subject to section 45-473.01 and to the provisions of articles 8 and 8.1 of this chapter relating to transportation of groundwater, except that, if the groundwater was delivered by an irrigation district to the previous owner of the right, the irrigation district may continue to deliver groundwater to the new owner pursuant to the right. If any portion of the amount of groundwater conveyed is withdrawn by the new owner and used on other land, no additional groundwater may be withdrawn for use on the land to which the right is appurtenant, except that, if the new owner is an industry, it may withdraw a portion of the amount of groundwater conveyed for use on other land and withdraw the remainder of the amount of groundwater conveyed for municipal and industrial use on the land to which the right is appurtenant for purposes directly related to the industry's industrial operation.
The amount of groundwater conveyed pursuant to the right for an irrigation use, as determined in paragraph 1 of this subsection, may be withdrawn from the land to which the right is appurtenant or from any other land and may be used only on the land to which the right is appurtenant or on contiguous irrigation acres under common ownership, subject to the provisions of articles 8 and 8.1 of this chapter relating to transportation of groundwater. For purposes of this paragraph, irrigation acres that are separated by a road, highway, easement or right-of-way from the land to which the irrigation grandfathered right is appurtenant are deemed to be contiguous.
All withdrawal or use of groundwater pursuant to this subsection is subject to subsection H of this section.

E. If an irrigation grandfathered right is conveyed for a non-irrigation use, the new owner's right to withdraw or receive groundwater is a non-irrigation grandfathered right associated with retired irrigated land, or a type 1 non-irrigation grandfathered right. All subsequent conveyances of that right are governed by section 45-473.

F. The amount of a type 1 non-irrigation grandfathered right shall be determined at the time it is established and shall remain fixed at that amount.

G. An irrigation grandfathered right may not be conveyed for a non-irrigation use if one of the following applies:

The irrigation grandfathered right has not been retired in anticipation of a future non-irrigation use and has not been exercised for five consecutive years.
The land to which the irrigation grandfathered right is appurtenant was previously designated by the director as protected farmland pursuant to section 45-483, subsection A. This paragraph shall not apply to land that was designated by the director as protected farmland if the director revoked the designation pursuant to section 45-483, subsection C, paragraph 1 and the director determined at that time that the conservation easement in the land was terminated because a partial or full condemnation of the land made farming impracticable.

H. A person who owns a type 1 non-irrigation grandfathered right under this section shall not withdraw or use groundwater pursuant to the portion of the type 1 non-irrigation grandfathered right that is appurtenant to land that the owner may irrigate with effluent pursuant to section 45-452, subsection J.

I. For the purposes of this section, "land to which the right is appurtenant" means the acre or group of contiguous acres conveyed with an irrigation grandfathered right.

§ 45-473 Conveyance of type 1 non-irrigation grandfathered right; use by new owner; appurtenancy; within service area; outside service area; definition

A. The owner of a type 1 non-irrigation grandfathered right may convey the right only for a non-irrigation use and only with the land to which it is appurtenant. For purposes of this section, a type 1 non-irrigation grandfathered right means a non-irrigation grandfathered right associated with retired irrigated land pursuant to section 45-463 or 45-469 or an irrigation grandfathered right which was conveyed for a non-irrigation use pursuant to section 45-472.

B. If a type 1 non-irrigation grandfathered right is conveyed, the full amount of the right is conveyed.

C. If the land to which a type 1 non-irrigation grandfathered right is appurtenant is within the exterior boundaries of the service area of a city, town or private water company, the amount of groundwater conveyed pursuant to the right may be withdrawn by the new owner of the right only from the land to which the right is appurtenant subject to subsection F of this section. The groundwater may be used on the land to which the right is appurtenant, but may not be used on other land unless the use on other land was commenced prior to the date of the designation of the active management area or was commenced by the original owner of the right pursuant to a development plan filed with the director prior to the inclusion of the land within the exterior boundaries of the service area of the city, town or private water company.

D. If the land to which the type 1 non-irrigation grandfathered right is appurtenant is outside of the exterior boundaries of the service area of a city, town or private water company, the amount of groundwater conveyed pursuant to the right may be withdrawn by the new owner of the right only from the land to which the right is appurtenant and used on that land or on any other land, subject to section 45-473.01 and to the provisions of articles 8 and 8.1 of this chapter relating to transportation of groundwater, and to subsection F of this section. If any portion of the amount of groundwater conveyed is withdrawn by the new owner and used on other land, no additional groundwater may be withdrawn for use on the land to which the right is appurtenant, except that, if the new owner is an industry, it may withdraw a portion of the amount of groundwater conveyed for use on other land and withdraw the remainder of the amount of groundwater conveyed for municipal and industrial use on the land to which the right is appurtenant for purposes directly related to the industry's industrial operation.

E. If groundwater was delivered by an irrigation district to the previous owner of a type 1 non-irrigation grandfathered right, the irrigation district may continue to deliver groundwater pursuant to the right to the new owner of the right.

F. The new owner of a type 1 non-irrigation grandfathered right pursuant to section 45-463 or 45-469 shall not withdraw or use groundwater pursuant to the portion of the type 1 non-irrigation grandfathered right that is appurtenant to land which the new owner may irrigate with effluent under section 45-452, subsection J.

G. For purposes of this section, "land to which the right is appurtenant" means the acre or group of contiguous acres conveyed with a type 1 non-irrigation grandfathered right.

§ 45-473.01 Conditions on using groundwater withdrawn pursuant to rights acquired under sections 45-472 and 45-473

A person to whom an irrigation grandfathered right is conveyed for a non-irrigation use after the effective date of this section pursuant to section 45-472 or a person to whom a type 1 non-irrigation grandfathered right is conveyed after the effective date of this section pursuant to section 45-473 shall use the groundwater withdrawn pursuant to the right on the land to which the right is appurtenant or on any other land in the same active management area.

§ 45-474 Conveyance of type 2 non-irrigation grandfathered right; amount

A. The owner of a type 2 non-irrigation grandfathered right may convey the right for any non-irrigation use, except that:

A type 2 non-irrigation grandfathered right that is used for purposes of mineral extraction or processing may be conveyed only for a mineral extraction or processing use.
A type 2 non-irrigation grandfathered right that is used for purposes of electrical energy generation may be conveyed only for an electrical energy generation use.
A type 2 non-irrigation grandfathered right in a subsequent active management area that is used for purposes of demonstrating and providing an assured water supply pursuant to section 45-576 in an initial active management area may be conveyed only for the same use and only with the approval of the director. The director shall not withhold approval of a conveyance under this paragraph if the right is no longer needed to provide the assured water supply that it was used to demonstrate.

B. A type 2 non-irrigation grandfathered right may not be conveyed for an irrigation use.

C. If a type 2 non-irrigation grandfathered right is conveyed, the full amount of the right is conveyed.

§ 45-475 Determination of exterior boundaries of service area for purposes of conveyances

For purposes of conveyances of irrigation grandfathered rights and type 1 non-irrigation grandfathered rights, whether land to which the right is appurtenant is within the exterior boundaries of the service area of a city, town or private water company shall be determined as of the date of the closing of the conveyance transaction according to the most current map of the service area of the city, town or private water company available for public inspection on that date as required by section 45-498:

In the city clerk's office for a city.
In the town clerk's office for a town.
In the appropriate county recorder's office for a private water company.

§ 45-476 Application for certificate of grandfathered right

A. Except as provided in section 45-476.01, a person claiming the right to withdraw or receive and use groundwater pursuant to a grandfathered right shall file an application for a certificate of grandfathered right with the department not later than fifteen months after the date of the designation of the active management area on a form provided by the department.

B. The application for a certificate of grandfathered right not based upon prior proceedings on a certificate of exemption shall include the following:

The name and mailing address of the applicant.
The name of the active management area within which the withdrawal of groundwater pursuant to the claimed grandfathered right is being or has been made.
If the application is for a type 1 non-irrigation grandfathered right:

(a) The legal description and a map of the retired irrigated land in respect of which the right is claimed.

(b) The date when the irrigated land was retired.

(c) Such evidence as the director shall require that the retired irrigated land has been held under the same ownership since it was retired and that a development plan for the proposed non-irrigation use existed at the time the land was retired.

(d) If in a subsequent active management area, the amount of groundwater used per acre for the retired irrigated land each year during the five years preceding the time the land was retired.

(e) Whether the well from which the water will be withdrawn is located in a groundwater replenishment district.

If the application is for a type 2 non-irrigation grandfathered right:

(a) The maximum amount of groundwater legally withdrawn from land owned by the applicant and used in any one year during the five years preceding the date of the designation of the active management area.

(b) If the person withdrawing groundwater from the land owned by the applicant has made an application for a type 1 non-irrigation grandfathered right, a copy of the application.

If the application is for an irrigation grandfathered right:

(a) The legal description and a map of all land owned by the applicant which was legally irrigated at any time during the five years preceding January 1, 1980 for initial active management areas or the date of the designation of the active management area for subsequent active management areas and the highest number of acres legally irrigated with groundwater at one time in any one year during the five-year period.

(b) The type of crops grown on such land and the cropping patterns used during the five-year period.

The location of each well from which groundwater is being or has been withdrawn by the applicant to irrigate such land.
The sworn statement that the information contained in the application is true and correct to the best knowledge and belief of the applicant.
Any other information the director may require.

C. A person or his successor claiming the right to use groundwater pursuant to a grandfathered right, described in whole or in part by a certificate of exemption, shall file an application for a certificate of grandfathered right as provided in subsection D of this section and shall automatically be entitled to a certificate or certificates of grandfathered right for the portion of the grandfathered right claimed which is evidenced by the certificate of exemption or established by the proceedings on the certificate of exemption. Notice of the application is not required and hearings shall not be held. If the applicant claims grandfathered rights in addition to the amount of use described in the certificate of exemption, application for such additional amount shall be made pursuant to subsection B of this section, and such application is subject to the notice, objection and hearing provisions applicable to applications made pursuant to that subsection.

D. The application for a certificate of grandfathered right based upon prior proceedings upon an application for a certificate of exemption shall include the following:

The name and mailing address of the applicant.
The name of the active management area within which the withdrawal of groundwater pursuant to the claimed grandfathered right is being or has been made.
The total amount of groundwater to be withdrawn annually under the certificate of exemption.
The number of retired irrigated acres described in the application for a certificate of exemption.
Such evidence as the director shall require that the retired irrigated land has been held under the same ownership since it was retired.
The number of the certificate of exemption and a copy of the certificate of exemption.
The sworn statement that the information contained in the application is true and correct to the best knowledge and belief of the applicant.
Any other information the director may require.

§ 45-476.01 Late applications for certificates of grandfathered rights; definition

A. A person who claims the right to withdraw or receive and use groundwater in an initial active management area pursuant to a grandfathered right and who failed to file an application on or before July 1, 1983 as required by law may file a late application for a certificate of grandfathered right pursuant to this section on a form provided by the department.

B. A late application for a certificate of grandfathered right shall include the information required in section 45-476. The fee for filing a late application is one hundred dollars. The director shall deposit, pursuant to sections 35-146 and 35-147, all fees received under this subsection in the water resources fund established by section 45-117.

C. The director shall review each late application for a certificate of grandfathered right submitted pursuant to this section and may conduct such investigations as the director deems necessary to determine whether the information contained in the application is correct and sufficient to issue a certificate.

D. A person who files a late application for a certificate of grandfathered right pursuant to this section has the burden of establishing by clear and convincing evidence that the necessary statutory requirements for issuing the certificate of grandfathered right have been met.

E. The director's decision on a late application for a certificate of grandfathered right submitted pursuant to this section, is subject to administrative review. A person aggrieved by the director's decision is not entitled to an administrative hearing. A final decision of the director approving or denying the application is not subject to judicial review.

F. If the director, after reviewing a late application, determines that the statutory requirements for issuing the certificate of grandfathered right have been met, the director shall issue a certificate of grandfathered right to the applicant pursuant to section 45-481. A holder of a certificate of grandfathered right issued pursuant to this section has the same rights and duties as all other holders of certificates of grandfathered rights.

G. Notwithstanding section 41-1092.02, subsection D, this section is not subject to title 41, chapter 6, article 10.

H. For the purposes of this article, "late application for a certificate of grandfathered right" means an application that is filed after July 1, 1983 for a certificate of grandfathered right to withdraw or receive and use groundwater in an initial active management area.

§ 45-477 Right to withdraw, receive or use groundwater in an initial active management area

A person shall not withdraw or receive and use groundwater in an initial active management area pursuant to a grandfathered right unless the certificate of grandfathered right has been issued or the application for the certificate of grandfathered right has been filed and is the subject of administrative or judicial review.

§ 45-477.01 Waiver and relinquishment of grandfathered rights in a subsequent active management area

A person who claims the rights to withdraw or receive and use groundwater in a subsequent active management area pursuant to a grandfathered right but who fails to file an application for a certificate of grandfathered right as provided in this article is deemed to waive and relinquish any right to withdraw or receive and use groundwater pursuant to this article.

§ 45-478 Notice of requirement to apply for certificate of grandfathered right

A. Within ninety days of the date of the designation of an active management area, the director shall give notice of the requirement to apply for a certificate of grandfathered right to the clerk of the board of supervisors of the county or counties in which the active management area is located and to the mayor of each city or town, to each private water company and to the presiding officer of each political subdivision established pursuant to title 48, chapter 17, 18, 19 or 20 located in the active management area.

B. The director shall mail by January 1, following the date of the designation of the active management area, a copy of a written notice of the requirement to apply for a certificate of grandfathered right to each owner of real property within the active management area listed on the tax rolls of the county, except owners of real property located in vacant subdivisions or located within the service areas of cities, towns and private water companies, along with a declaration that it is the duty of the recipient to forward the notice to the beneficial owner of the property. The notice shall include a statement that a person who fails to apply for a certificate of grandfathered right within an active management area waives and relinquishes any right to withdraw or receive and use groundwater pursuant to a grandfathered right.

C. The director shall also notify owners of real property located within service areas of cities, towns and private water companies and irrigation districts who utilize their own well, according to the registration of the well pursuant to article 10 of this chapter. The director may extend for a reasonable time the deadline for applications under this subsection.

D. The director may also give written notice in any other manner which will carry out the purposes of this section.

E. The provisions of this section shall not apply to the Santa Cruz active management area.

§ 45-479 Registry of applications; written objections; request for hearing

A. The director shall establish a registry of all applications received for a certificate of grandfathered right or a restoration of a retired irrigation grandfathered right for each active management area. After the deadline for the filing of applications for a certificate of grandfathered right has passed, the director shall notify all applicants for a certificate of grandfathered right that the registry is available in the offices of the department for public inspection during regular business hours.

B. Within one hundred eighty days of the date of the notice required by subsection A of this section, any person residing in the active management area may file a written objection to any application for a certificate of grandfathered right and may request a hearing on the application. Objections may be made only on the basis that the information in the application is incorrect or is insufficient to issue a certificate.

C. This section does not apply to late applications for certificates of grandfathered rights filed pursuant to section 45-476.01.

§ 45-480 Review of applications; investigations; hearings; final determination; judicial review

A. Except as provided in subsection F of this section, the director shall review each application for a certificate of grandfathered right or a restoration of a retired irrigation grandfathered right and may conduct such investigations as deemed necessary to determine whether the information contained in the application is correct and sufficient to issue a certificate or grant restoration. Except as provided in section 45-476, subsection C, in appropriate cases, including cases in which a written objection has been filed, an administrative hearing may be held before the director's decision on the application if the director deems a hearing necessary to determine whether the information contained in the application is correct and sufficient to issue a certificate or grant restoration. Thirty days prior to the date of the hearing, the director shall give notice of the hearing to the applicant and any person who has filed an objection to the application.

B. If the director determines that the information contained in the application is correct and is sufficient to issue a certificate of grandfathered right or restore a retired irrigation grandfathered right, the director shall issue a certificate of grandfathered right pursuant to section 45-481 or restore a retired irrigation grandfathered right to the applicant. If the director determines that the information contained in the application is incorrect or is insufficient to issue a certificate or grant restoration, the director may return the application specifically stating the reasons for its return. The applicant may reapply within thirty days of receipt of the returned application. A reapplication relates back to the filing of the original application but otherwise shall be treated as a new application.

C. If, before an administrative hearing, the director determines that the applicant is not entitled to a certificate of grandfathered right or a restoration of a retired irrigation grandfathered right or determines that the amount of a grandfathered right or a retired irrigation grandfathered right is less than that requested in the application, the director shall provide the applicant with notice and an opportunity for an administrative hearing.

D. The applicant or any person entering a proper objection to the application may seek judicial review of the final decision of the director as provided in section 45-114, subsection B in the superior court in the county in which the irrigated land or the non-irrigation use is located.

E. This section does not apply to late applications for certificates of grandfathered rights filed pursuant to section 45-476.01.

F. 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, the director shall withhold review of an application for a certificate for a type 1 non-irrigation grandfathered right appurtenant to land located in the district unless at the time the application is filed:

The director has determined that the district's plan for operation is consistent with achieving the management goal, according to section 45-576.03, subsection E, and the designation has not expired.
The master replenishment account, as established in section 45-858.01, does not have a debit balance in an amount in excess of the amount allowed under section 45-576.01, subsection A, paragraph 3.

G. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section. If an administrative hearing is held, it shall be conducted in the active management area in which the use is located.

§ 45-481 Issuance of certificates; contents; recordation

A certificate of grandfathered right shall be issued in recordable form and shall contain:

The name and mailing address of the person to whom the certificate is issued.
The active management area in which the withdrawal of groundwater is being or will be made.
The type of grandfathered right represented by the certificate.
If the certificate is for a type 1 non-irrigation grandfathered right, the amount of the right and the legal description of the retired irrigated land to which the right is appurtenant.
If the certificate is for a type 2 non-irrigation grandfathered right, the amount of the right.
If the certificate is for an irrigation grandfathered right, the legal description of the irrigable land to which the right is appurtenant.
Where applicable, the location of each well from which groundwater is being withdrawn pursuant to the right at the time the certificate is issued.
Such other pertinent information as the director may determine.

§ 45-482 Registry of certificates of grandfathered right; reporting; definition

A. The director shall establish and maintain a registry of certificates of grandfathered rights for each active management area. The registry shall include a copy of each certificate of grandfathered right in the active management area and such other pertinent information as the director determines is necessary.

B. Except as provided in subsection D of this section, a person to whom a certificate of grandfathered right is issued shall notify the director of a change in name or mailing address or a conveyance of the grandfathered right pursuant to sections 45-472 through 45-474. Except as provided in subsection D of this section, a person to whom a grandfathered right is conveyed shall notify the director of the conveyance and shall furnish information as required by the director to keep the registry current and accurate. The director shall have continuing jurisdiction and shall issue revised certificates as necessary.

C. The director may require holders of certificates of grandfathered rights to file additional information with the annual report required by section 45-632 as necessary to keep the registry current and accurate. For purposes of this article, "holder" means a person to whom a certificate of grandfathered right is issued or a person to whom a grandfathered right is conveyed.

D. A holder of a certificate of irrigation grandfathered right is exempt from a notification requirement in subsection B of this section for the irrigation grandfathered right if the irrigation grandfathered right was appurtenant to ten or fewer irrigation acres at the time of the event for which the notification is required unless one of the following applies:

The land to which the irrigation grandfathered right is appurtenant is part of an integrated farming operation.
Groundwater is withdrawn from the land to which the irrigation grandfathered right is appurtenant and delivered for use pursuant to either a service area right pursuant to article 6 of this chapter or a grandfathered groundwater right other than an irrigation grandfathered right that is appurtenant to irrigation acres that are exempt from irrigation water duties pursuant to section 45-563.02.
Groundwater is withdrawn from land that is both owned by the holder of the certificate of irrigation grandfathered right and contiguous to the land to which the irrigation grandfathered right is appurtenant and delivered for use pursuant to either a service area right pursuant to article 6 of this chapter or a grandfathered groundwater right other than an irrigation grandfathered right that is appurtenant to irrigation acres that are exempt from irrigation water duties pursuant to section 45-563.02.

§ 45-483 Designation of protected farmland; notice; revocation of designation; irrigation water duty; assured water supply credit for extinguishment of irrigation grandfathered right prohibited

A. A person who owns land within an active management area that is legally entitled to be irrigated with groundwater pursuant to an irrigation grandfathered right may apply to the director for designation of the land as protected farmland. On receipt of an application, the director shall grant the application and designate the land identified in the application as protected farmland if the director determines that the land is subject to a conservation easement that prohibits the development of the land for nonagricultural uses pursuant to the federal farmland protection program established by Public Law 104-127 (110 Stat. 888).

B. A person who owns land that has been designated by the director as protected farmland pursuant to subsection A of this section shall notify the director in writing if the conservation easement in the land terminates. The notice shall be given within thirty days after the termination of the easement and shall specify the reason for the termination.

C. After the director designates land as protected farmland pursuant to subsection A of this section, the director shall revoke the designation if either of the following applies:

The conservation easement in the land has terminated. If the director revokes a designation of protected farmland under this paragraph, the director shall determine at that time whether the conservation easement terminated because a partial or full condemnation of the land made farming impracticable. The director shall give written notice of the revocation and of the director's determination of whether the easement terminated because a partial or full condemnation of the land made farming impracticable to the owner at the owner's last address on file with the department.
The owner of the land has requested the director to revoke the designation and the conservation easement in the land has not terminated.

D. Notwithstanding any other law, if the director designates land as protected farmland pursuant to subsection A of this section, the irrigation water duty for the land shall be the irrigation water duty in effect for the land under the applicable management plan when the application for designation was filed, including any subsequent adjustments to that water duty as a result of an application for administrative review filed with the director pursuant to section 45-575, subsection A. If the director revokes the designation of protected farmland pursuant to subsection C of this section, the irrigation water duty for the land shall be the irrigation water duty established for the land in the applicable management plan pursuant to section 45-566, 45-567 or 45-568.

E. Notwithstanding any other law or rule, the director shall not establish or grant an assured water supply credit for the extinguishment of an irrigation grandfathered right under the rules adopted by the director pursuant to section 45-576, subsection H if the land to which the irrigation grandfathered right is appurtenant was previously designated by the director as protected farmland pursuant to subsection A of this section. This subsection shall not apply to land that was designated by the director as protected farmland if the director revoked the designation pursuant to subsection C, paragraph 1 of this section and the director determined at that time that the conservation easement in the land was terminated because a partial or full condemnation of the land made farming impracticable.

F. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

Article 6 Groundwater Rights and Uses Within Service Areas

§ 45-491 Scope of article

A. In an active management area, a city, town, private water company or irrigation district may withdraw groundwater only pursuant to this article, except as provided by a grandfathered right and except as otherwise provided in this section.

B. An irrigation district engaged in generating, transmitting and distributing electricity on June 12, 1980 may withdraw groundwater pursuant to a groundwater withdrawal permit issued under article 7 of this chapter.

C. A city, town or private water company may withdraw groundwater pursuant to a poor quality groundwater withdrawal permit issued under section 45-516.

D. An irrigation district or a private water company organized primarily for irrigation purposes may withdraw groundwater pursuant to a drainage water withdrawal permit issued under section 45-519.

E. A city, town, private water company or irrigation district may withdraw groundwater pursuant to a hydrologic testing permit issued under section 45-519.01.

F. A city, town, private water company or irrigation district may use the groundwater withdrawn pursuant to a groundwater withdrawal permit only for the specific purpose for which the permit is issued. Any withdrawals of groundwater by a city, town, private water company or irrigation district pursuant to a groundwater withdrawal permit issued under article 7 of this chapter shall not give rise to any other right to withdraw groundwater under this chapter.

§ 45-492 Withdrawals by cities, towns and private water companies within service areas; contract to supply groundwater

A. Except as provided in subsection D of this section, in an active management area, a city, town or private water company shall have the right to withdraw and transport groundwater within its service area for the benefit of landowners and residents within its service area, and the landowners and residents are entitled to use the groundwater delivered, subject to:

Articles 8 and 8.1 of this chapter relating to transportation of groundwater.
Conservation requirements developed by the director pursuant to article 9 of this chapter.
Section 45-493, subsection D.

B. Claims of landowners to irrigation grandfathered rights or type 1 or 2 non-irrigation grandfathered rights shall be subject to article 5 of this chapter.

C. A city, town or private water company may contract to supply groundwater to a city, town or private water company in the same active management area if it is consistent with the management plan for the active management area and section 45-576 and is approved by the director.

D. In an active management area, a city, town or private water company whose service area has qualified as a member service area under title 48, chapter 22, or as a water district member service area under title 48, chapter 28, has the right to withdraw and transport groundwater within its service area for the benefit of landowners and residents within its service area, and the landowners and residents are entitled to use the groundwater delivered, subject to subsection A of this section and, to the extent the groundwater delivered is considered excess groundwater as defined and used in title 48, chapter 22 or 28, as applicable, subject to the payment by the city, town or private water company of the replenishment tax levied from time to time by a conservation district under title 48, chapter 22, or a water district under title 48, chapter 28, whichever is applicable. A city, town or private water company shall be deemed to have failed to pay the replenishment tax only if the conservation district or the water district provides notice to the department of a delinquency in the payment of the replenishment tax pursuant to section 48-3781, subsection G or section 48-4982, subsection G, as applicable.

§ 45-493 Limitations on extensions of service areas; prohibition on formation of private water company for irrigation purpose; prohibition on service without payment of tax

A. In an active management area, the service area of a city, town or private water company may not be extended primarily for any of the following purposes:

Including a well field within the service area.
Furnishing disproportionately large amounts of water to an industrial or any other large water user unless it is consistent with the management plan for the active management area and is approved by the director.
Including irrigation acres within the exterior boundaries of the service area to extinguish the right to convey irrigation grandfathered rights to a non-irrigation use.

B. Within an active management area, a city, town or private water company may not extend its service area for the purpose of withdrawing and distributing groundwater for irrigation purposes.

C. Subsequent to the date of the designation of the active management area, a private water company may not be formed within an active management area to withdraw and distribute groundwater for irrigation purposes.

D. If a municipal provider whose service area has qualified as a member service area under title 48, chapter 22 terminates water service to any portion of the service area and fails to pay the replenishment tax levied by a conservation district under title 48, chapter 22 for that area, another municipal provider shall not commence service of groundwater under section 45-492, subsection A or D or section 45-494 to landowners and residents within that area without first making arrangements to pay all outstanding replenishment taxes to the conservation district. This subsection does not apply to the commencement of service of groundwater by an irrigation district to an industrial user under section 45-497. For the purposes of this subsection, "municipal provider" has the same meaning prescribed in section 45-561.

§ 45-494 Withdrawals by irrigation districts in initial active management areas

In an initial active management area established pursuant to section 45-411:

An irrigation district existing and engaged in the withdrawal, delivery and distribution of groundwater as of January 1, 1977 shall have the right, subject to section 45-496 and section 45-493, subsection D:

(a) To withdraw and transport groundwater within its service area for the benefit of landowners within its service area, and the landowners are entitled to use the groundwater delivered, provided claims of landowners to irrigation grandfathered rights or type 1 or 2 non-irrigation grandfathered rights shall be subject to article 5 of this chapter.

(b) If legally withdrawing and transporting groundwater from outside its service area for use within its service area as of January 1, 1977, to continue to withdraw and transport the amount of groundwater legally being withdrawn as of January 1, 1977.

An irrigation district that was not engaged in the withdrawal, delivery and distribution of groundwater as of January 1, 1977 shall be limited to the right, subject to section 45-496, to:

(a) Contract for surface water from a multi-county water conservation district and deliver and distribute such water within its service area for irrigation purposes.

(b) If, as of January 1, 1983, the district had been recommended by the director to receive an allocation of municipal and industrial water from the central Arizona project, contract for surface water from a multi-county water conservation district and deliver such surface water to cities, towns or private water companies for municipal, industrial and domestic purposes, subject to the following conditions:

(i) The cities, towns and private water companies shall distribute the water within the boundaries of the district in effect as of the date of validation of the district's central Arizona project subcontract.

(ii) In contracting for the delivery of such surface water, the district shall offer the water, first, to cities and towns that distribute water to land within the boundaries of the district or to land adjacent or contiguous to the district and, second, if the cities or towns are unwilling or unable to take and distribute such surface water, to private water companies within the boundaries of the district that have not been recommended to receive or have not received an allocation of municipal and industrial water from the central Arizona project.

(iii) Notwithstanding article 5 of this chapter, the original owner and any new owner of a type 1 non-irrigation grandfathered right created pursuant to section 45-469 that is appurtenant to land in the district to which such surface water is distributed by a city, town or private water company may use groundwater withdrawn pursuant to that right only on the land to which the right is appurtenant.

(iv) The district may amend its contract, or execute a new contract, with the United States secretary of the interior and a multi-county water conservation district to provide for the conversion of irrigation water deliveries to municipal and industrial water deliveries as provided by law and pursuant to the secretary's regulations relating to conversion, but such amendment may be made or new contract executed only if the amount of municipal and industrial water for which the district would qualify by conversion of lands from irrigation to non-irrigation uses exceeds the secretary's initial express allocation of municipal and industrial water to the district for the year 2034 and only to the extent of the excess.

(v) Such surface water shall not be distributed by any city, town or private water company to any land with respect to which an allocation of municipal and industrial water from the central Arizona project has been made or recommended for some person other than the district.

(d) Withdraw, deliver and distribute within its service area the amount of groundwater allowed by the current irrigation water duty of each member farm multiplied by the water duty acres in that farm less any portion of such amount withdrawn by individual members.

(e) Continue but not expand any non-irrigation water service being lawfully provided as of the date of the designation of the active management area, except as provided in subdivision (b) of this paragraph and in section 45-497, subsection B.

§ 45-494.01 Addition and exclusion of area by irrigation districts in initial active management areas

A. In an initial active management area, an irrigation district established pursuant to title 48, chapter 19 existing and engaged in the withdrawal, delivery and distribution of groundwater as of January 1, 1977 may add to the service area of the district acres of land which have irrigation grandfathered rights to replace other lands that have irrigation grandfathered rights of similar area for the purpose of maintaining the same acreage as of June 12, 1980, if both of the following apply:

The added and excluded acres are outside the exterior boundaries of the service area of an incorporated city or town.
The added and excluded acres are either within the franchised area of a private water company or are contiguous to the franchised area of a private water company designated as having an assured water supply pursuant to section 45-576, subsection D and the contiguous acres may, in the judgment of the director, be added without adversely affecting the assured water supply of the private water company.

B. No greater quantity of water may be transported annually to the added acres than the annual stored surface water allotment for that year. For purposes of this section, store surface water does not include central Arizona project allotment water. This section does not prohibit the transportation to the added acres of any quantity of floodwater or effluent available in addition to the stored surface water allotment.

§ 45-495 Withdrawals and transportations by irrigation districts within subsequent active management areas

In a subsequent active management area established pursuant to section 45-412:

An irrigation district existing and engaged in the withdrawal, delivery and distribution of groundwater as of the date of the designation of the active management area shall have the right, subject to section 45-496:

(b) If legally withdrawing and transporting groundwater from outside its service area for use within its service area as of the date of designation of the active management area, to continue to withdraw and transport the amount of groundwater legally being withdrawn as of the date of the designation of the active management area.

An irrigation district which was not engaged in the withdrawal, delivery and distribution of groundwater as of the date of the designation of the active management area shall be limited to the right, subject to section 45-496, to:

(a) Contract for surface water and deliver and distribute such water within its service area for irrigation purposes.

(b) Contract to purchase, deliver and distribute effluent within its service area for irrigation purposes.

(c) Withdraw, deliver and distribute within its service area the amount of groundwater allowed by the current irrigation water duty of each member farm multiplied by the water duty acres in that farm, less any portion of such amount withdrawn by individual members.

(d) Continue but not expand any non-irrigation water service being lawfully provided as of the date of the designation of the active management area, except as provided in section 45-497, subsection B.

§ 45-496 Applicability of general transportation provisions and conservation requirements

Withdrawals and transportation of groundwater by an irrigation district pursuant to this article are subject to:

The provisions of articles 8 and 8.1 of this chapter relating to transportation of groundwater.
Conservation requirements developed by the director pursuant to article 9 of this chapter.

§ 45-497 Withdrawal of groundwater by irrigation districts for municipal or industrial purposes

A. This article shall not be construed to enlarge the authority of an irrigation district to withdraw and distribute groundwater for municipal or industrial purposes.

B. An industrial user may not obtain groundwater delivery service from an irrigation district in excess of the amount it was entitled to receive on the date of the designation of the active management area unless the industrial user has acquired a grandfathered right or has obtained a general industrial use permit pursuant to section 45-515. An industrial user that has been issued a general industrial use permit pursuant to section 45-515 may, at any time, elect to receive groundwater from an irrigation district in the amount specified in the permit if:

The director approves the delivery of such groundwater.
The irrigation district agrees to deliver such groundwater.
The industrial use is located within the exterior boundaries of the service area of the irrigation district.
The terms of the permit are modified pursuant to section 45-525.

§ 45-498 Maps of service areas

A. Each city, town, private water company and irrigation district in an active management area shall maintain a current map clearly delineating its service area and distribution system in the director's office and shall furnish such other related data as the director may require. In addition:

Each city and town shall maintain a current map of its service area and distribution system in its city or town clerk's office.
Each private water company and irrigation district shall maintain a current map of its service area and distribution system in its offices.

B. All maps required by this section shall be available for examination by the public at reasonable times.

Article 7 Groundwater Withdrawal Permits

§ 45-511 Definitions

In this article, unless the context otherwise requires:

"General industrial use" means a non-irrigation use of groundwater except those subject to permits issued pursuant to sections 45-513 and 45-514 and those for which a certificate of assured water supply is required pursuant to section 45-576. General industrial use includes animal industry use.
"Permit" means a permit to withdraw groundwater which is issued by the director pursuant to this article.

§ 45-512 Categories of groundwater withdrawal permits

Except as provided in section 45-452, subsection H, section 45-513, subsection B and articles 5 and 6 of this chapter, a person may not withdraw groundwater from a nonexempt well in an active management area unless the person obtains a groundwater withdrawal permit from the director pursuant to this article. The categories of groundwater withdrawal permits are as follows:

Dewatering permits issued pursuant to section 45-513.
Mineral extraction and metallurgical processing permits issued pursuant to section 45-514.
General industrial use permits issued pursuant to section 45-515.
Poor quality groundwater permits issued pursuant to section 45-516.
Temporary permits issued pursuant to sections 45-517 and 45-518.
Drainage water permits issued pursuant to section 45-519.
Hydrologic testing permits issued pursuant to section 45-519.01.

§ 45-513 Dewatering permit; definition; priorities for use of groundwater; conditions on director; duration of permit

A. Except as provided in subsection F of this section, a person who is engaged in or proposes to engage in the extraction and processing of minerals shall be issued a dewatering permit for the beneficial use of the land for mineral extraction, for metallurgical processing and for compliance with applicable environmental controls. For purposes of this section, "dewatering" means the withdrawal of groundwater from pits, from in, under and around ore bodies in proximity to pits and from underground workings. Dewatering does not include process water and tailing water recovered from or pumped from beneath tailing ponds.

B. A person who is engaged in or proposes to engage in the extraction and processing of minerals may recover from or pump from beneath tailing ponds process water and tailing water without obtaining a permit under this article, if that water is recycled into the extraction or metallurgical process or is withdrawn to comply with applicable environmental controls. Such a person may not drill or cause to be drilled a well for the purpose of pumping or recovering process water or tailing water from beneath tailing ponds for recycling into the extraction or metallurgical process without first filing a notice of intention to drill under section 45-596.

C. Groundwater withdrawn pursuant to a dewatering permit shall be used in the following order of priority:

To meet mineral extraction, metallurgical processing and environmental control requirements of the permittee.
To a city, town, private water company or farm and any other person whose respective ability to withdraw groundwater has been adversely affected by a dewatering permit. Such water shall be equitably allocated by the director without costs but subject to the conditions set forth in subsection D of this section among such persons adversely affected by such dewatering. A person who receives an allocation of water under this paragraph shall reduce his groundwater withdrawals by the amount of water he receives under this paragraph. A person receiving water under this paragraph does not thereby forfeit or abandon his right to withdraw groundwater.
For municipal, commercial, domestic and industrial needs of communities and residential areas directly related to the mineral extraction and metallurgical processing operation of the permittee.
To irrigate land owned or controlled by the permittee which is entitled to the use of groundwater for irrigation.
To the director for such distribution as will best achieve the goals and purposes of the management plan for the active management area.
For such other legal purpose as the permittee elects.

D. Groundwater made available to the director for distribution or allocation under this section is subject to the following conditions:

The permittee shall deliver the groundwater to the boundary of his property but shall not be obligated to deliver it further.
The permittee shall not be required to treat the chemical quality of the groundwater for distribution or allocation.
The permittee shall not be required to make the groundwater available if dewatering ceases, or if all or any portion of the groundwater is needed for a purpose having a higher priority as specified in subsection C of this section.
The person actually using the groundwater distributed or allocated by the director shall be responsible for paying any withdrawal fees required under section 45-611.
If the director sells water, proceeds shall be applied as follows:

(a) To cover costs, if any, of the director in delivering water to other users.

(b) To cover the permittee's cost in transporting water to the boundary of his property.

E. A permit issued pursuant to this section shall be granted for a period of up to fifty years, subject to renewal under the same criteria used in granting the original permit.

F. 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, and except for an application to renew a dewatering permit, on receiving a permit application the director shall not issue a permit for a well in the district unless at the time the application for the permit is filed:

The director has determined that the district's plan for operation is consistent with achieving the management goal, according to section 45-576.03, subsection E, and the designation has not expired.
The master replenishment account, as established in section 45-858.01, does not have a debit balance in an amount in excess of the amount allowed under section 45-576.01, subsection A, paragraph 3.

§ 45-514 Mineral extraction and metallurgical processing permit; conditions for issuance; duration of permit

A. Except as provided in subsection D of this section, a person who is engaged in or proposes to engage in the extraction and processing of minerals shall be issued a permit to withdraw groundwater in the required amount, if all of the following apply:

The amount of groundwater available for mineral extraction, metallurgical processing and compliance with applicable environmental controls under a dewatering permit is insufficient.
Uncommitted municipal and industrial central Arizona project water is not available at the point where the operator's wellhead or distribution system would otherwise be, at a cost which does not exceed the current municipal and industrial central Arizona project delivery rates.
Other surface water of adequate quality or effluent of adequate quality is not available at the point where the operator's wellhead or distribution system would otherwise be, at a cost, including treatment costs, which does not exceed by twenty-five percent the cost the operator would otherwise incur in withdrawing groundwater.
The applicant does not own or lease type 2 non-irrigation grandfathered rights originally based on withdrawals of groundwater for the extraction or processing of minerals that the applicant is not using or leasing and that can be used at the proposed location without imposing an unreasonable economic burden on the applicant.

B. A permit issued pursuant to this section shall be granted for a period of up to fifty years, subject to renewal under the same criteria used in granting the original permit.

C. If, during the duration of a mineral extraction and metallurgical processing permit, the director determines that uncommitted municipal and industrial central Arizona project water is available or surface water of adequate quality or effluent of adequate quality is available to the permittee at a cost comparable to groundwater, the director may require the permittee to use such water in lieu of groundwater.

D. 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, and except for an application to renew a mineral extraction and metallurgical processing permit, on receiving a permit application the director shall not issue a permit for a well in the district unless at the time the application is filed:

The director has determined that the district's plan for operation is consistent with achieving the management goal, according to section 45-576.03, subsection E, and the designation has not expired.
The master replenishment account, as established in section 45-858.01, does not have a debit balance in an amount in excess of the amount allowed under section 45-576.01, subsection A, paragraph 3.

E. If, during the duration of a mineral extraction and metallurgical processing permit issued after the effective date of this amendment to this section, the permittee earns long-term storage credits under section 45-852.01, subsection B for the storage of central Arizona project water in the active management area in which the permittee has the right to withdraw groundwater pursuant to the permit, and the central Arizona project water qualified as water that cannot reasonably be used directly due solely to the exclusion of groundwater withdrawn by the permittee for mineral extraction or metallurgical processing pursuant to section 45-802.01, paragraph 23, subdivision (c), the director shall establish a separate subaccount for those credits pursuant to section 45-852.01, subsection A. After each calendar year in which the permit is in effect, the director shall debit the subaccount by the amount of groundwater pumped by the permittee in the active management area during that calendar year pursuant to the permit, not to exceed the amount of long-term storage credits in the subaccount. This subsection shall not apply to:

A mineral extraction and metallurgical processing permit issued on or before the effective date of this amendment to this section, including any renewal or modification of the permit.
A mineral extraction and metallurgical processing permit unless the permittee was engaged in mineral extraction and metallurgical processing within an initial active management area on or before January 1, 2011.

§ 45-515 General industrial use permits; conditions for issuance; duration of permit

A. Except as provided in subsection D of this section, the director shall issue a permit to withdraw groundwater from a point outside of the exterior boundaries of the service area of a city, town or private water company for a general industrial use outside of the exterior boundaries of such service area if the director determines that all of the following apply:

Uncommitted municipal and industrial central Arizona project water is not available at the point where the operator's wellhead or distribution system would otherwise be, at a cost which does not exceed the current municipal and industrial central Arizona project rates.
Other surface water of adequate quality or effluent of adequate quality is not available at the point where the operator's wellhead or distribution system would otherwise be, at a cost, including treatment costs, which does not exceed by twenty-five per cent the cost the operator would otherwise incur in withdrawing groundwater.
Irrigation grandfathered rights appurtenant to acres of land in reasonable proximity to the intended general industrial use are not available for purchase at a reasonable price or cannot be acquired by eminent domain and the applicant does not own or lease grandfathered rights that the applicant is not using or leasing, that may be used for the intended general industrial use and that can be used for the intended general industrial use without imposing an unreasonable economic burden on the applicant.
The intended general industrial use, if located within three miles of the exterior boundaries of the service area of a city, town or private water company, has been denied service by the city, town or private water company at the customary rate in the customary manner. The requirement of this paragraph does not apply to an expanded animal industry use.
The management plan for the active management area can be adjusted to accommodate the intended general industrial use consistent with the achievement of the management goal for the active management area.
There is an assured water supply for the intended use at the intended point of withdrawal. The director may waive this requirement if the director is unable to determine if there is an assured water supply because of hydrogeologic conditions underlying the point of withdrawal. For purposes of this section, "assured water supply" means that sufficient groundwater of adequate quality will be available to the applicant to satisfy the projected general industrial use for the duration of the permit.
If a new well or replacement well at a new location is to be constructed, a permit for the well has been issued pursuant to section 45-599.

B. A permit issued pursuant to this section shall be granted for a period of up to fifty years, subject to renewal under the same criteria used in granting the original permit.

C. If, during the life of the permit, the director determines that uncommitted municipal and industrial central Arizona project water is available or other water or effluent of adequate quality is available at a cost comparable to groundwater, the director may require the permittee to use such water in lieu of groundwater.

D. 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, and except for an application to renew a general industrial use permit, on receiving a permit application the director shall not issue a permit for a well in the district unless at the time the application is filed:

The director has determined that the district's plan for operation is consistent with achieving the management goal, according to section 45-576.03, subsection E, and the designation has not expired.
The master replenishment account, as established in section 45-676, does not have a debit balance in an amount in excess of the amount allowed under section 45-576.01, paragraph 3.

§ 45-516 Poor quality groundwater withdrawal permit; conditions for issuance; duration of permit

A. The director may issue a permit to a non-irrigation user to withdraw poor quality groundwater if he determines that the groundwater to be withdrawn because of its quality has no other beneficial use at the present time and that the withdrawal of such groundwater is consistent with the management plan.

B. A permit issued pursuant to this section may be issued for a period of up to thirty-five years, subject to subsection C. The director shall determine the duration of the permit on the basis of the estimated life of the source of poor quality groundwater.

C. The director shall monitor withdrawals of groundwater pursuant to poor quality groundwater withdrawal permit and shall terminate the permit if the conditions specified in subsection A no longer apply.

§ 45-517 Temporary permit for electrical energy generation; conditions for issuance

A. The director shall, upon an adequate showing that an emergency exists, issue a temporary permit to a person engaged in the generation of electrical energy to withdraw groundwater in excess of the amount of groundwater the person is legally entitled to withdraw under a grandfathered right or other groundwater withdrawal permit.

B. A person may withdraw groundwater in excess of the amount he is legally entitled to withdraw before a permit is issued pursuant to this section. Such person, as soon as reasonably practicable after such withdrawals of groundwater commence, shall submit evidence to the director that an emergency exists.

C. The director shall monitor withdrawals of groundwater pursuant to a temporary permit and shall terminate the permit when the emergency ends.

§ 45-518 Temporary dewatering permit; extensions; emergency temporary dewatering permit; conditions for issuance

A. The director may issue a temporary permit to a person to withdraw groundwater for dewatering purposes if the director determines that:

Dewatering is necessary for the construction or the structural integrity of improvements on the land from which the groundwater is proposed to be withdrawn.
Dewatering is consistent within the management plan for the active management area.
The groundwater to be withdrawn pursuant to the permit will be used beneficially by a person who would otherwise be permitted to use groundwater under this title, including the applicant to the extent the applicant could otherwise withdraw and use groundwater under this title, unless the applicant demonstrates that it would be infeasible for any such person to put the groundwater to a beneficial use.
Dewatering will not harm any person permitted to withdraw or use groundwater under this title.

B. Subject to subsection C of this section, a permit issued pursuant to this section may be issued for a period of up to five years and may be extended for additional five year periods if the director determines that the conditions specified in subsection A of this section continue to apply.

C. The director shall monitor withdrawals of groundwater pursuant to a temporary dewatering permit or extension and shall terminate the permit if the conditions specified in subsection A or B of this section no longer apply.

D. During the period in which an application for a temporary dewatering permit is under consideration by the director pursuant to this article, the director may issue an emergency temporary dewatering permit to the applicant if the director determines that immediate dewatering is necessary for the construction or structural integrity of improvements on the land from which the groundwater is proposed to be withdrawn, that property damage or inordinate expense or delay would result if the applicant is not allowed to begin dewatering immediately and that dewatering will not harm any person permitted to withdraw or use groundwater under this title. The director may issue an emergency temporary dewatering permit without complying with section 45-523. The director shall monitor withdrawals of groundwater pursuant to the emergency temporary dewatering permit and shall terminate the permit if the conditions that gave rise to its issuance no longer apply or if a temporary dewatering permit is issued or denied.

§ 45-519 Drainage water withdrawal permit; conditions for issuance

A. A person may apply for and the director may issue a drainage water withdrawal permit if the director determines that drainage of irrigated lands is necessary for a reasonable economic return from agricultural production in respect to those lands and the withdrawal of such groundwater is consistent with the management plan and achievement of the management goal for the active management area.

B. The holder of a permit issued under subsection A of this section may:

Use groundwater withdrawn pursuant to the permit for a non-irrigation use if the person holds a non-irrigation grandfathered right pursuant to article 5 of this chapter, a general industrial use permit pursuant to section 45-515 or a service area right pursuant to article 6 of this chapter.
Convey groundwater withdrawn pursuant to the permit to another person for a non-irrigation use if the person receiving the groundwater holds a non-irrigation grandfathered right pursuant to article 5 of this chapter, a general industrial use permit pursuant to section 45-515 or a service area right pursuant to article 6 of this chapter.

C. When determining compliance with the applicable conservation requirements established pursuant to sections 45-565, 45-565.01, 45-566, 45-566.01, 45-567, 45-567.01, 45-568 and 45-568.01, the director shall account for groundwater withdrawn pursuant to a permit issued pursuant to subsection A of this section as surface water if the groundwater is withdrawn before January 1, 2035 from within the boundaries of the exempted area prescribed by section 45-411.01, subsection E and is used pursuant to subsection B of this section at a turf related facility or riparian habitat within the exempted area. The director shall cease accounting for the groundwater as surface water on expiration of the exemptions provided for in section 45-411.01 or on termination of the permit, whichever occurs first.

D. The director shall monitor withdrawals of groundwater pursuant to a drainage water withdrawal permit and shall terminate the permit if the conditions for issuance specified in subsection A of this section no longer apply. A permit issued pursuant to this section may be renewed subject to the same criteria used in granting the original permit.

§ 45-519.01 Hydrologic testing permits; conditions for issuance

A. The director shall issue a permit to withdraw not more than three acre-feet of groundwater per year for the purpose of obtaining groundwater samples to test groundwater quality, if the testing is necessary to comply with applicable environmental controls. A hydrologic testing permit issued under this subsection may be issued for a period of up to ten years.

B. The director may issue a permit to withdraw groundwater for testing hydrologic characteristics and conditions, including groundwater quality, if the director determines that the testing is necessary. Except as provided in subsection D of this section:

The total amount of groundwater that may be withdrawn pursuant to a hydrologic testing permit issued under this subsection shall not exceed ten acre-feet.
The director shall not issue a hydrologic testing permit under this subsection for a period of more than ninety days.

C. Before issuing a hydrologic testing permit under subsection B of this section, the director may require the applicant to demonstrate that the groundwater withdrawn pursuant to the permit will be used beneficially by persons who would otherwise be permitted to use groundwater under this chapter, including the applicant to the extent the applicant could otherwise withdraw and use groundwater under this chapter.

D. The director may issue a hydrologic testing permit under subsection B of this section for more than ten acre-feet or for a period greater than ninety days, if the director determines that the testing circumstances justify an increase in the amount of groundwater that may be withdrawn or an increase in the duration of the permit and that withdrawals of groundwater pursuant to the permit will not unreasonably harm any person permitted to withdraw or use groundwater under this chapter.

E. The director may issue a permit to withdraw groundwater to test the hydrogeologic characteristics of a potential underground storage facility site under chapter 3.1 of this title, for a period of not more than two years, if the director determines that all of the following apply:

Testing is necessary.
The withdrawal and testing will not cause unreasonable harm to land or other water users.
The groundwater that is withdrawn pursuant to the permit will be added back to the same aquifer in approximately the same location from which the groundwater was withdrawn.

F. The director may issue a hydrologic testing permit without complying with section 45-523.

G. A permit issued under this section may be renewed subject to the same criteria used in granting the original permit.

H. Any withdrawals of groundwater authorized by this section shall be for hydrologic testing purposes only, shall not give rise to any other right to withdraw groundwater under this chapter and shall not be counted as groundwater that is subject to a conservation program in a management plan that is adopted pursuant to article 9 of this chapter.

§ 45-520 Point of withdrawal; location of use; conveyance

A. A person who withdraws groundwater under a permit issued pursuant to this article may change his point or points of withdrawal only pursuant to sections 45-597 and 45-598 and may change his location of use only with the approval of the director and by applying for a modification of the permit pursuant to section 45-527.

B. A permit issued pursuant to section 45-517, 45-518 or 45-519.01 may not be conveyed. All other permits issued pursuant to this article may be conveyed only for the same use, subject to the approval of the director.

§ 45-521 Permit application form; filing; contents

Application for a permit to withdraw groundwater pursuant to this article shall be made on a form provided by the director which shall include the following information:

The name and mailing address of the applicant.
The name of the active management area and sub-basin, if any, in which the applicant proposes to withdraw groundwater.
The name and mailing address of the owner of the land from which the applicant proposes to withdraw groundwater.
The legal description of the land on which the applicant proposes to use groundwater and the name and mailing address of the owner of such land.
The category of permit for which application is made.
The specific purpose for which the groundwater will be withdrawn.
If for a permit other than a permit issued under section 45-519.01, subsection B, the annual amount of groundwater, in acre-feet, for which application is made.
If the applicant proposes to withdraw groundwater from an existing well or wells, the location of each such well and the depth and diameter of each well and such other information the director requires.
If the applicant proposes to withdraw groundwater from a new well or wells, the proposed location of each such well and the depth and diameter proposed for each well and such other information the director requires.
If application is made for a dewatering permit pursuant to section 45-513:

(a) The estimated amount of groundwater necessary to meet mineral extraction and metallurgical processing requirements of the applicant.

(b) The estimated amount of groundwater necessary for municipal and industrial needs of communities and residential areas directly related to the mineral extraction and metallurgical processing operation of the applicant.

(c) The legal description of the acres of land owned or controlled by the applicant entitled to the use of groundwater for irrigation.

If application is made for a mineral extraction and metallurgical processing permit pursuant to section 45-514:

(a) The amount of groundwater available to the applicant under a dewatering permit previously obtained by the applicant.

(b) The estimated cost the applicant would incur in withdrawing groundwater at a point where his wellhead or distribution system would otherwise be.

Whether the well from which the water will be withdrawn is in a groundwater replenishment district.
If application is made for a general industrial use permit pursuant to section 45-515:

(a) The estimated cost the applicant would incur in withdrawing groundwater at the point where his wellhead or distribution system would otherwise be.

(b) Proof of denial of service or inaction on a service request by a city, town or private water company if the location of the applicant's intended use is within three miles of the exterior boundaries of the service area of such city, town or private water company. Such evidence is not required for an expanded animal industry use.

(c) Studies satisfactory to the director of the probable hydrologic impact on the groundwater resources which the applicant proposes to use including evidence of the availability of an assured water supply for the intended use.

If application is made for a temporary dewatering permit pursuant to section 45-518, evidence demonstrating that a temporary dewatering permit is necessary for the construction or structural integrity of improvements on the land from which the groundwater is proposed to be withdrawn. If application is made for extension of a temporary dewatering permit, the application shall include evidence demonstrating that the criteria prescribed by section 45-518, subsection B exist. If application is made for an emergency temporary dewatering permit, it must be accompanied by an application for a temporary dewatering permit and shall include evidence demonstrating that the criteria prescribed by section 45-518, subsection D exist.
If application is made for a drainage water permit pursuant to section 45-519:

(a) Evidence that drainage of irrigated lands is necessary for a reasonable economic return from agricultural production on such lands.

(b) The legal description of the acres of land entitled to the use of groundwater for irrigation.

(c) Evidence that the applicant owns or controls the irrigated land to be drained, if the applicant is other than a groundwater replenishment district.

If application is made for a hydrologic testing permit pursuant to section 45-519.01, subsection A:

(a) The purpose of the hydrologic testing.

(b) The proposed duration of the hydrologic testing.

If application is made for a hydrologic testing permit pursuant to section 45-519.01, subsection B:

(a) The purpose of the hydrologic testing.

(b) The proposed duration of the hydrologic testing.

(d) If the total amount of groundwater for which application is made exceeds ten acre-feet or the proposed duration of the hydrologic testing exceeds ninety days, the testing circumstances that require such withdrawals or such a testing period.

A sworn statement that the information contained in the application is true and correct to the best belief and knowledge of the applicant.
Any other information which the director may require.

§ 45-522 Correction of application

Upon receipt of an application, the director shall endorse on the application the date of its receipt and keep a record of the application. If the director determines the application is incorrect or incomplete, the director may request additional information from the applicant. The director may conduct independent investigations as may be necessary to determine whether the application should be approved or rejected.

§ 45-523 Notice; objections; hearing

A. Except as provided in section 45-518, subsection D and section 45-519.01, subsection F, when the permit application is determined complete and correct, the director shall, within fifteen days of such determination, give notice of the application once each week for two consecutive weeks in a newspaper of general circulation in the county or counties in which the active management area in which the applicant proposes to withdraw groundwater is located.

B. Notice pursuant to subsection A of this section shall state that objections to the issuance of the permit may be filed, by persons residing in the active management area, in writing, with the director within fifteen days after the last publication of notice and that objections are limited to whether the permit application meets the criteria for issuance of a permit as set forth in this article. An objection shall state the name and mailing address of the objector, be signed by the objector, the objector's agent or the objector's attorney and clearly set forth reasons why the permit should not be issued.

C. In appropriate cases, including cases where a proper written objection to the permit 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. The director shall, thirty days prior to the date of the hearing, give notice to the applicant and to any person who filed a proper written objection to the issuance of the permit. The hearing shall be scheduled for not less than sixty days nor more than ninety days after the expiration of the time in which to file objections.

D. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section. If an administrative hearing is held, it shall be conducted in the active management area in which the use is located.

§ 45-524 Approval or rejection of permit application

A. The approval or rejection of an application for a permit shall be endorsed on the application and dated. If the permit is denied, the director shall notify the applicant in writing specifically stating the reasons for denial.

B. A permit issued by the director shall contain the following information:

The name and mailing address of the person to whom the permit is issued.
The name of the active management area and sub-basin in which the groundwater may be withdrawn.
The category of permit issued.
The specific purpose for which the permit is issued.
The point or points of withdrawal of groundwater pursuant to the permit.
The legal description of the land on which the groundwater may be used.
If the permit is other than a permit issued under section 45-519.01, subsection B, the total annual amount of groundwater that may be withdrawn.
If the permit is issued under section 45-519.01, subsection B, the total amount of groundwater that may be withdrawn.
If the permit is issued under section 45-515 and the director has waived the requirement of section 45-515, subsection A, paragraph 6, a statement that the director was unable to determine if there is an assured water supply for the permitted use at the permitted point of withdrawal.
If groundwater is to be withdrawn from a new well or wells, the depth, diameter and general specifications for each such well.
The duration of the permit.
Conditions on the permit authorized by this chapter or rules adopted pursuant to this chapter and such other information as the director may determine.

§ 45-525 Registry of permits; reporting

A. The director shall establish and maintain a registry of permits for each active management area. The registry shall include a copy of each permit in the active management area and such other pertinent information as the director determines is necessary.

B. A person to whom a permit is issued shall notify the director of a change in name or mailing address, a change in point of withdrawal or a conveyance of a permit pursuant to section 45-520. A person to whom a permit is conveyed shall notify the director of the conveyance and shall furnish information as required by the director to keep the registry current and accurate. The director shall have continuing jurisdiction and shall issue revised permits as necessary.

C. The director may require holders of permits to file additional information with the annual report required by section 45-632 as necessary to keep the registry current and accurate. For purposes of this article, "holder" means a person to whom a permit is issued or a person to whom a permit is conveyed.

§ 45-526 Appeals

A person whose application is denied or a person who contested a permit by filing a proper objection pursuant to section 45-523 may seek judicial review of the decision in the superior court.

§ 45-527 Modification of permit

A permittee may seek modification of an unexpired groundwater withdrawal permit and renewal of a permit within six months prior to the date of the expiration of the permit. All permit modifications or renewal applications shall be treated in the same manner as the initial permit application and are subject to the same criteria used in issuing the initial permit.

§ 45-528 Revocation of permits

A. After an administrative hearing in the active management area in which the use is located, the director may permanently, or temporarily, in whole or in part, revoke a groundwater withdrawal permit for any of the following reasons:

For a material false statement in an application to initiate, modify or renew a permit, or for a material false statement in any report required to be filed by a person withdrawing or using groundwater pursuant to the provisions of this chapter.
For violation of the terms of the permit.
For failure to exercise a permit for five or more consecutive years.

B. The director may revoke a groundwater withdrawal permit with the written consent of the permittee and in such case a hearing is not required.

C. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

Article 8 Transportation of Groundwater

§ 45-541 Transportation within a sub-basin

A. Groundwater which is withdrawn pursuant to a grandfathered right or a groundwater withdrawal permit or from an exempt well may be transported without payment of damages within a sub-basin of an active management area, subject to the limitations on location of use in sections 45-472 and 45-473.

B. Groundwater which is withdrawn by a city, town or private water company within its service area may be transported without payment of damages within its service area within a sub-basin of an active management area.

C. Groundwater which is withdrawn by a city, town or private water company within its service area may be transported pursuant to a delivery contract authorized by section 45-492, subsection C, without payment of damages, within a sub-basin of an active management area.

D. Groundwater which is withdrawn by an irrigation district within its service area may be transported without payment of damages within its service area within a sub-basin of an active management area.

§ 45-542 Transportation between sub-basins or away from an active management area; irrigation grandfathered right; type 1 non-irrigation grandfathered right

A. Groundwater which is withdrawn pursuant to an irrigation grandfathered right may be transported between sub-basins of an active management area or away from an active management area, subject to the limitations on location of use in section 45-472.

B. Groundwater which is withdrawn pursuant to a type 1 non-irrigation grandfathered right may be transported between sub-basins of an active management area or away from an active management area, subject to the limitations on location of use in section 45-473, except that groundwater withdrawn pursuant to a type 1 non-irrigation grandfathered right may be transported away from an initial active management area only pursuant to any of the following:

A type 1 non-irrigation grandfathered right acquired under section 45-463 and appurtenant to land in the Tucson active management area, if the groundwater is used for the extraction or processing of minerals in an adjacent active management area or groundwater basin.
Section 45-469, subsection I.

C. Transportations of groundwater pursuant to this section are not subject to payment of damages if the amount transported does not exceed three acre-feet per acre per year withdrawn from retired irrigated land. Transportations of groundwater pursuant to an irrigation grandfathered right in excess of three acre-feet per acre per year withdrawn from retired irrigated land are subject to payment of damages.

§ 45-543 Transportation between sub-basins or away from an active management area; damages; non-irrigation grandfathered right not associated with retired irrigated land; service area withdrawals; permit; exempt well

A. Groundwater may be transported between sub-basins of an active management area or away from an active management area, subject to payment of damages, if the groundwater is withdrawn:

Pursuant to a type 2 non-irrigation grandfathered right, except that groundwater withdrawn pursuant to a type 2 non-irrigation grandfathered right may not be transported away from the Pinal active management area to another initial active management area for the purpose of demonstrating and providing an assured water supply.
By a city, town or private water company within its service area and transported within its service area, except that groundwater withdrawn by a city, town or private water company within its service area may not be transported away from the Pinal active management area.
By an irrigation district within its service area and transported within its service area.
Pursuant to a groundwater withdrawal permit.
From an exempt well.

B. Groundwater that is withdrawn by a city, town or private water company within its service area may be transported pursuant to a delivery contract authorized by section 45-492, subsection C between sub-basins of an active management area and shall be subject to payment of damages unless the groundwater is withdrawn pursuant to a type 1 non-irrigation grandfathered right.

C. Groundwater that is withdrawn and transported to an active management area pursuant to article 8.1 of this chapter may be transported between sub-basins of the active management area without payment of damages.

§ 45-544 Transportation in areas not subject to active management; damages; upper San Pedro water district; Little Colorado river plateau, Parker and Coconino plateau groundwater basins; definitions

A. Except as otherwise provided in this section, section 45-547 and article 8.1 of this chapter, in areas outside of active management areas:

Groundwater may be transported:

(a) Within a subbasin of a groundwater basin or within a groundwater basin, if there are no subbasins, without payment of damages.

(b) Between subbasins of a groundwater basin, subject to payment of damages.

Groundwater shall not be transported away from a groundwater basin.
Groundwater shall not be transported away from the upper San Pedro water district if established under title 48, chapter 37.

B. Notwithstanding subsection A, paragraph 2 or 3 of this section, subject to payment of damages:

A person who at any time during the twelve months before January 1, 1991 was transporting away from the Little Colorado river plateau groundwater basin or the Parker groundwater basin groundwater that was legally withdrawn from a well in either groundwater basin has the right, subject to subsection C of this section, to transport groundwater that is legally withdrawn from the well or a replacement well in approximately the same location to another groundwater basin in an annual amount equal to the greater of the maximum amount of groundwater either:

(a) That was withdrawn from the well and transported by the person away from the groundwater basin in any one of the five calendar years immediately preceding January 1, 1991.

(b) That could have been withdrawn from the well during the twelve month period, taking into account the pump capacity and specific capacity of the well during that period, or twenty-five acre-feet, whichever is less.

A person may transport groundwater by motor vehicle from the Little Colorado river plateau groundwater basin or the Parker groundwater basin to an adjacent groundwater basin for domestic purposes or stock watering.
A city or town whose service area is located either in the Little Colorado river plateau groundwater basin and an adjacent groundwater basin or in the Parker groundwater basin and an adjacent groundwater basin may transport groundwater that is withdrawn within that portion of its service area located in the Little Colorado river plateau groundwater basin or the Parker groundwater basin to the adjacent groundwater basin for the benefit of landowners and residents within its service area.
A city, town or private water company whose service area is located in two adjacent groundwater basins and provides water utility service to landowners or residents in both basins as of July 1, 1993 may transport groundwater between those adjacent groundwater basins.
The transportation of groundwater in which groundwater is transported away from the groundwater basin and expansions of that transfer by the same person or its successor for the same purpose are valid if that transfer was occurring before September 1, 1993.
A city or town in the Coconino plateau groundwater basin with a population of not more than eight thousand persons that was transporting groundwater into its municipal water service area from an adjacent groundwater basin as of January 1, 2001, from wells that the director determines were erroneously drilled without knowledge that the wells were in the adjacent groundwater basin, may continue and expand that transfer subject to all of the following conditions:

(a) The groundwater may be withdrawn only from wells that are located not more than two miles from the Coconino plateau groundwater basin boundary and that are drilled to depths of at least two thousand five hundred feet below land surface.

(b) The groundwater may be used only within the municipal water service area of the city or town, and the city or town shall use available surface water supplies within its municipal water service area to the extent practicable.

(c) The total amount of groundwater that may be transported during a year shall not exceed seven hundred acre-feet, except that a city or town may apply to the director to increase the amount of groundwater that may be transported during a year under this subdivision if additional groundwater is needed to provide fire protection for the city or town because of an emergency condition. The director shall post an application filed under this subdivision on the department's website before approving or denying the application. The director shall approve an application filed under this subdivision if the city or town demonstrates to the satisfaction of the director that an emergency condition exists that makes it necessary for the city or town to transport groundwater in excess of the amount allowed under this subdivision to provide adequate fire protection for the city or town. If the director approves an application filed under this subdivision, the director shall specify the amount of groundwater that the city or town may transport in excess of the amount allowed under this subdivision and may impose other conditions that the director deems appropriate.

(d) The city or town shall no longer transport any groundwater pursuant to this paragraph if all of the following apply:

(i) After January 1, 2009, the city or town obtains the legal right to receive a new supply of water originating from outside of its corporate boundaries, other than groundwater pursuant to this paragraph.

(ii) The supply of water is physically available to the city or town through a canal or pipeline.

(iii) The director determines that the supply of water, together with other water supplies physically available to the city or town, other than groundwater pursuant to this paragraph, is sufficient to provide a sustainable water supply for the city or town, including projected growth, and notifies the city or town of that determination.

Groundwater may be transported away from a groundwater basin for mineral extraction and processing, except that no groundwater may be transported away from the Parker groundwater basin or the Little Colorado river plateau groundwater basin for that purpose and, if the district is established, groundwater shall not be transported away from the upper San Pedro water district for that purpose except as provided in paragraphs 8 and 9 of this subsection.
If the upper San Pedro water district is established under title 48, chapter 37:

(a) A city, town or private water company whose service area is located in the district and a groundwater basin adjacent to the district, other than the upper San Pedro groundwater basin, and that provides water utility service to landowners or residents in the district and that adjacent groundwater basin as of July 1, 1993 may transport groundwater between the district and that adjacent groundwater basin.

(b) The transportation of groundwater in which groundwater is transported away from the district and away from the upper San Pedro groundwater basin and expansions of that transfer by the same person or its successor for the same purpose are valid if that transfer was occurring before September 1, 1993.

(c) The transportation of groundwater in which groundwater is transported away from the district but not away from the upper San Pedro groundwater basin and expansions of that transfer by the same person or its successor for the same purpose are valid if that transfer was occurring before the date the district is established.

A metal mining facility that is located in both the upper San Pedro and Douglas groundwater basins may transport groundwater between the two basins to the extent that the transportation is necessary to comply with an order issued by the director of environmental quality pursuant to title 49, chapter 2, article 5, including an order issued by the director of environmental quality pursuant to section 49-286. Before transporting groundwater pursuant to this paragraph, a metal mining facility shall give written notice to the director of water resources, which shall include a copy of the order requiring the remedial action or mitigation activities.

C. The director may limit by order the amount of groundwater withdrawn from a well in the Little Colorado river plateau groundwater basin for transportation away from the basin pursuant to subsection B, paragraph 1 of this section in any year in which the director determines that the projected withdrawals from the well for that purpose will unreasonably increase damage to surrounding land or other water users and if the well:

Was drilled on or before January 1, 1991.
Was not completed on January 1, 1991, but a notice of intention to drill the well was on file on that date.
Is a replacement well, in approximately the same location, for a well described in paragraph 1 or 2 of this subsection.

D. Groundwater may be withdrawn from a well drilled in the Little Colorado river plateau groundwater basin after January 1, 1991, except a replacement well in approximately the same location or a well drilled after that date pursuant to a notice of intention to drill that was on file with the department on that date, for transportation away from the basin pursuant to subsection B, paragraph 1 of this section only if the location of the well complies with the rules adopted pursuant to section 45-598, subsection A to prevent unreasonably increasing damage to surrounding land or other water users from the concentration of wells.

E. For the purposes of this section:

"Domestic purposes" means uses related to the supply, service and activities of households and private residences and includes the application of water to less than two acres of land to produce plants or parts of plants for sale or human consumption, or for use as feed for livestock, range livestock or poultry, as such terms are defined in section 3-1201.
"Stock watering" means the watering of livestock, range livestock or poultry, as such terms are defined in section 3-1201.

§ 45-545 Damage rules applicable to all transportations of groundwater

A. In active management areas and in areas outside of active management areas, in any action to recover damages, neither injury to nor impairment of the water supply of any landowner shall be presumed from the fact of transportation.

B. In determining whether there has been injury and the extent of any injury, the court shall consider all acts of the person transporting groundwater toward the mitigation of injury including:

Retirement of land from irrigation.
Discontinuance of other preexisting uses of groundwater.
Water conservation techniques.
Procurement of additional sources of water which benefit the active management area, sub-basin or landowners within the active management area or sub-basin.

C. The court may award reasonable attorney fees, expert witness expenses and fees and court costs to the prevailing party.

§ 45-546 Weed and dust control

A person shall maintain property that is owned or controlled by the person and from which groundwater is or will be transported pursuant to this article free of noxious weeds as defined in section 3-201, Russian thistles (salsola kali) and blowing dust that creates a threat to health or safety.

§ 45-547 Transportation of groundwater withdrawn in the Yuma basin; permit

A. Groundwater may be withdrawn in the Yuma basin for direct or indirect transportation outside of the basin, including transportation to an initial active management area, only if a permit is obtained from the director pursuant to this section.

B. A person who has the legal right to divert and use Colorado river water may apply to the director for a permit to withdraw groundwater in the Yuma basin for direct or indirect transportation outside of the basin, including transportation to an initial active management area. The director may issue the permit if all of the following apply:

The water to be withdrawn was originally Colorado river water applied for irrigation purposes.
The water to be pumped is groundwater under Arizona law that is causing waterlogging to the detriment of agricultural operations or municipal infrastructure in the Yuma basin.
No person is currently pumping or will pump the water for use in the Yuma basin during the term of the permit.
Issuance of the permit will result in water being returned to the Colorado river that otherwise would not have returned.
Any irrigation district or water users' association in the Yuma basin that has a contractual right with the secretary of the interior for a return flow credit for the water returned to the river pursuant to the permit has waived that right.
The permittee will comply with all federal laws and treaties and state laws regarding returning the water to the Colorado river.
If the groundwater will be pumped from wells within the exterior boundaries of an irrigation district or water users' association, that irrigation district or water users’ association has consented to the issuance of the permit.
If the groundwater will be pumped from wells within the city limits of a city or town that holds an entitlement to Colorado river water, that city or town has not objected to the issuance of the permit.
If the applicant is the United States or an agent or agency of the United States, the water transported pursuant to the permit will be used as replacement water for the specific purposes identified in section 45-107.01, paragraph 2.

C. An applicant for a permit issued under this section shall apply to the director in writing and shall submit all evidence necessary to establish that the requirements of subsection B of this section apply, including a hydrologic study. The director shall review the application and determine within one hundred days of receipt of the application whether it is administratively complete. The director shall complete the substantive review of the application and shall issue or deny the permit within nine months of determining the application to be administratively complete.

D. If the application is determined to be administratively complete, the director, within fifteen days of that determination, shall give notice of the application once each week for two consecutive weeks in a newspaper of general circulation in Yuma, La Paz and Mohave counties. The director shall also give first class mail notice of the application to each city, town, private water company, irrigation district, water users' association and electrical district within Yuma county and to any multicounty water conservation district as defined in section 48-3701. The notice shall state that persons adversely affected by the withdrawal of groundwater in the Yuma basin and the transportation of that water may file written objections to the issuance of the permit with the director within fifteen days after the last publication of the notice. An objection shall state the name and mailing address of the objector, shall be signed by the objector or the objector's agent or attorney and shall clearly set forth the reasons why the permit should not be issued. The grounds for objection are limited to whether the application meets the criteria for issuing the permit as prescribed by subsection B of this section.

E. If the director deems a hearing necessary or if a proper objection to the permit application has been filed, an administrative hearing shall be held before the director's decision on the application. At least thirty days before the hearing, the director shall notify the applicant and any person who filed a proper objection to the issuance of the permit. The hearing shall be scheduled for at least ninety days but no more than one hundred twenty days after the expiration of the time in which to file objections. If an administrative hearing is held, it shall be held in the Yuma basin.

F. A permit under this section shall contain that information determined to be necessary by the director and may include any condition determined by the director to be consistent with this section or necessary to protect the interests of this state and the water users of the Yuma basin. The director may issue a permit under this section for a period of not more than ten years and, on the director's initiative or the request of a water user in the Yuma basin, may review the permit to ensure that the requirements of subsection B of this section continue to apply. If the requirements no longer apply, the director may revoke the permit. On the request of the permit holder, the director may renew the permit if the director determines that the requirements of subsection B of this section apply. The director shall monitor withdrawals of groundwater pursuant to permits issued under this section and shall terminate a permit if the static groundwater level at the location of waterlogging identified in the permit reaches a depth greater than twenty feet below land surface or the conditions specified in subsection B, paragraph 2 of this section for issuance of the permit no longer apply.

G. Issuance of a permit under this section to the United States, an agent or agency of the United States or any other person shall not preclude issuance of a permit to any other eligible applicant to transport water for use within this state.

H. Before October 1 of each year, each permit holder shall file a written statement of intent with the director stating the quantity of groundwater the permit holder intends to withdraw and transport pursuant to its permit during the next calendar year. A permit holder who fails to submit a written statement of intent on or before October 1 of any year shall not withdraw or transport any groundwater pursuant to its permit in the following calendar year. A permit holder who files a statement of intent shall not withdraw and transport an amount of groundwater greater than that reported on its statement of intent. If, based on the statements of intent, the director determines that there is insufficient groundwater available to allow withdrawal of the total amount reported in the statements of intent filed by all permit holders, the director, on or before December 1, shall send notice by first class mail to all permit holders who filed a statement of intent. The notice shall state that the director shall allocate the groundwater available to each permit holder, up to the amount reported in the statement of intent, according to each permit holder's priority to divert and use Colorado river water, except that the director may allocate the groundwater in accordance with a written agreement signed by all permit holders who filed a statement of intent.

Article 8.1 Withdrawals of Groundwater for Transportation to Active Management Area

§ 45-551 Application of article; limitation on transportation to active management areas; definition

A. This article applies only to withdrawals of groundwater for transportation to active management areas.

B. Unless specifically authorized by this chapter, groundwater that is withdrawn in a groundwater basin or sub-basin outside of an initial active management area may not be transported directly or indirectly to an initial active management area.

C. Any transportation of groundwater that is authorized by this article is subject to payment of damages pursuant to section 45-545.

D. For purposes of this article, "transported indirectly" means through exchange, indirect recharge or any other method of providing water through reciprocation.

§ 45-552 Transportation of groundwater withdrawn in McMullen valley basin to an active management area; definitions

A. A city that purchased land before January 1, 1988 in the McMullen valley groundwater basin or a person who purchased land before January 1, 1988 that was in that basin and that was in the same county as an adjacent initial active management area, either directly or in exchange for central Arizona project water allocated for agricultural purposes, may transport groundwater from that land to an adjacent initial active management area for use by any city, town, private water company or groundwater replenishment district. A city, town, private water company or groundwater replenishment district that purchases any land in the McMullen Valley groundwater basin from that city or land that was in that basin and that was in the same county as an adjacent initial active management area from that person, either directly or in exchange for central Arizona project water allocated for agricultural purposes, may transport groundwater from that land to the adjacent initial active management area only for use by a city, town, private water company or groundwater replenishment district or the Arizona water banking authority pursuant to section 45-2491. The amount of groundwater that may be transported away from the basin shall be determined pursuant to subsection B of this section but shall not exceed:

In any year, two times the annual transportation allotment for the land determined pursuant to subsection B of this section.
For any period of ten consecutive years computed in continuing progressive series beginning in the year transportation of groundwater from the land begins, ten times the annual transportation allotment for the land determined pursuant to subsection B of this section.
Six million acre-feet in total.

B. The director shall determine the annual transportation allotment for land that is subject to this section as follows:

Determine each farm or portion of a farm on that land.
For each such farm or portion of a farm, determine the historically irrigated acres.
Multiply the sum of those historically irrigated acres for all such farms or portions of farms by three acre-feet per acre.

C. In an initial active management area, for purposes of determining whether to issue a certificate of assured water supply or to designate or redesignate a city, town or private water company as having an assured water supply, pursuant to section 45-576, based in whole or in part on groundwater transported from the groundwater basin under this section, the director shall consider only the amount of groundwater that can be withdrawn in the groundwater basin from a depth to one thousand two hundred feet at the site or sites of the proposed withdrawals at a rate that, when added to the existing rates of withdrawal in the area, is not expected to cause the groundwater table at the site or sites to decline more than an average of ten feet per year during the one hundred year evaluation period and does not exceed forty per cent of the groundwater that can be withdrawn in the groundwater basin, less the sum of the following amounts of groundwater in the groundwater basin:

The total amount on which the director has already based certificates or designations of assured water supply in an initial active management area.
The total amount transported to an initial active management area for other purposes.

D. For the purposes of this section:

Land that is owned by a city, town, private water company or groundwater replenishment district includes land that is owned indirectly through a nonprofit corporation or other entity that is owned or controlled by the city, town, private water company or groundwater replenishment district.
"Historically irrigated acres" means land overlying an aquifer that was irrigated with groundwater from that aquifer before January 1, 1988.
"Person" means person as defined in section 45-402 and a person who purchased land before January 1, 1988 includes any successor in interest of that person if the successor acquires an interest in the land by means of either of the following:

(a) Inheritance, devise or intrafamily gift or conveyance directly or in trust.

(b) The reorganization of a closely held corporation, a partnership or a limited liability company that is and remains owned by or controlled by or for the benefit of individuals related to that person.

§ 45-553 Transportation of groundwater withdrawn in Butler Valley groundwater basin to an initial active management area

A. Groundwater may be withdrawn from land owned by this state or by a political subdivision of this state in the Butler Valley groundwater basin for transportation to an initial active management area.

B. Title to land in the Butler Valley groundwater basin that is owned by this state or a political subdivision of this state and from which groundwater is withdrawn for transportation to an initial active management area may be sold, exchanged or otherwise conveyed only to this state or to another political subdivision of this state.

§ 45-554 Transportation of groundwater withdrawn in Harquahala irrigation non-expansion area to an initial active management area; annual report

A. A groundwater replenishment district established under title 48, chapter 27 may lease from an irrigation district located entirely within the Harquahala irrigation non-expansion area the use of one or more of the wells in the irrigation district to withdraw the groundwater that can be withdrawn from a depth to one thousand feet, at a rate that, when added to the existing rates of withdrawal in the area, does not cause the groundwater table at the site or sites to decline more than ten feet per year, for transportation to an initial active management area. The lease payments shall be made to the members of the irrigation district on a pro rata basis, per acre of land that is eligible to be irrigated under section 45-437, subsection B, minus the irrigation district's administrative costs. Wells leased under this subsection are exempt from well spacing requirements under section 45-559.

B. An entity described in subsection D of this section that owns land eligible to be irrigated under section 45-437, subsection B in the Harquahala irrigation non-expansion area may withdraw groundwater from the land for transportation to a location and for the purposes prescribed in subsection F of this section:

If the groundwater is withdrawn:

(a) From a depth to one thousand feet at the site or sites of the proposed withdrawals.

(b) At a rate that, when added to the existing rate of withdrawals in the area, does not cause the groundwater table at the site or sites of the withdrawals to decline more than an average of ten feet per year during the one hundred year evaluation period.

In an amount either:

(a) Per acre of the eligible land, not to exceed:

(i) Six acre-feet in any year.

(ii) Thirty acre-feet for any period of ten consecutive years computed in continuing progressive series beginning in the year transportation of groundwater from the land begins.

(b) Established by the director, but only if the director determines that withdrawals in an amount greater than that allowed by subdivision (a) of this paragraph will not unreasonably increase damage to residents of surrounding land and other water users in the irrigation non-expansion area, or that one or more of the entities withdrawing the groundwater will mitigate the damage to the residents and other water users.

By a public service corporation, if all costs associated with withdrawing, transporting and delivering groundwater away from the Harquahala irrigation non-expansion area are collected from the customers of the public service corporation's water district where the transported groundwater is used.
If before the withdrawal of groundwater from the Harquahala irrigation non-expansion area or September 14, 2024, whichever is later, the eligible entity has demonstrated compliance with the criteria in this subsection or subsection C of this section using a hydrological study. The director shall prescribe the contents of the study that is submitted with the application.
If before the withdrawal of groundwater from the Harquahala irrigation non-expansion area or September 14, 2024, whichever is later, the eligible entity installs water measuring devices, or other similarly reliable and accessible methods as approved by the department to determine the volume of groundwater withdrawn from all relevant wells and transported out of the Harquahala irrigation non-expansion area by pipelines, canals or conduits.
If within thirty days after the withdrawal of groundwater from the Harquahala irrigation non-expansion area for transportation or September 14, 2024, whichever is later, the eligible entity submits a monthly report to the department containing all of the following:

(a) The volume of groundwater the entity withdrew from the Harquahala irrigation non-expansion area in the preceding month.

(b) The volume of groundwater the entity transported out of the Harquahala irrigation non-expansion area in the preceding month.

(c) The end use or destination of groundwater the entity transported out of the Harquahala irrigation non-expansion area in the preceding month.

C. If this state or one or more political subdivisions of this state own eighty percent or more of the land that is eligible to be irrigated under section 45-437, subsection B in the irrigation non-expansion area, each of the entities may withdraw groundwater from the eligible land it owns for transportation to an initial active management area:

From a depth to one thousand feet at the site or sites of withdrawals.
From a depth between one thousand and one thousand two hundred feet at the site or sites of the withdrawals only if the director determines either that the withdrawals will not unreasonably increase damage to residents of surrounding land or that one or more of the entities withdrawing the groundwater will mitigate the damage to the residents.

D. The following entities are eligible to transport groundwater away from the Harquahala irrigation non-expansion area pursuant to subsection B of this section:

This state.
A political subdivision of this state.
A public service corporation that is regulated by the corporation commission and that holds a certificate of convenience and necessity for water service.

E. The director shall adopt rules to implement this section, including for the reporting of groundwater transported from the Harquahala irrigation non-expansion area.

F. The following locations and purposes are eligible to receive groundwater transported away from the Harquahala irrigation non-expansion area pursuant to subsection B of this section:

An initial active management area for use by an eligible entity or the Arizona water banking authority pursuant to section 45-2491.
La Paz county by an eligible entity in a total cumulative volume not to exceed ten percent of the total annual volume of groundwater the department determines is available for transport out of the Harquahala irrigation non-expansion area. An eligible entity in La Paz county may do either of the following:

(a) Transport groundwater from eligible acres in the Harquahala irrigation non-expansion area owned by the eligible entity to a location in La Paz county for the eligible entity's own use.

(b) Sell or lease groundwater from eligible acres owned by the eligible entity that are located in La Paz county to a designated provider in the Phoenix, Tucson or Pinal active management area for the designated provider's own use.

G. Any local use of groundwater by an eligible entity that sells or leases groundwater pursuant to subsection F, paragraph 2 of this section shall count towards the eligible entity's maximum per acre withdrawal limit prescribed in subsection B, paragraph 2, subdivision (a) of this section.

H. On or before July 1 of each year, the department shall submit a report of all of the following 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 total amount of groundwater all eligible entities withdrew from the Harquahala irrigation non-expansion area in the preceding year.
The total amount of groundwater each eligible entity withdrew from the Harquahala irrigation non-expansion area in the preceding year delineated by entity.
The total amount of groundwater all eligible entities transported from the Harquahala irrigation non-expansion area in the preceding year.
The total amount of groundwater each eligible entity transported from the Harquahala irrigation non-expansion area in the preceding year delineated by entity.
The end use or destination of all groundwater all eligible entities transported from the Harquahala irrigation non-expansion area in the preceding year.
The end use or destination of all groundwater each eligible entity transported from the Harquahala irrigation non-expansion area in the preceding year, delineated by destination or end use.

§ 45-555 Transportation of groundwater withdrawn in Big Chino sub-basin of the Verde River groundwater basin to initial active management area; exception

A. A city or town that owns land consisting of historically irrigated acres in the Big Chino sub-basin of the Verde River groundwater basin, as designated by order of the director dated June 21, 1984, or a city or town with the consent of the landowner, may withdraw from the land for transportation to an adjacent initial active management area an amount of groundwater determined pursuant to this section. The amount of groundwater that may be withdrawn from the land pursuant to this section shall not exceed:

In any year two times the annual transportation allotment for the land determined pursuant to subsection B.
For any period of ten consecutive years computed in continuing progressive series beginning in the year transportation of groundwater from the land begins, ten times the annual transportation allotment for the land.

B. The director shall determine the annual transportation allotment as follows:

Determine each farm or portion of a farm owned or leased by the city or town in the sub-basin.
For each such farm or portion of a farm, determine the historically irrigated acres retired from irrigation. Multiply the sum of those historically irrigated acres by three acre-feet per acre.

C. In making the determination required by subsection B, the director shall rely only on credible documentary evidence submitted by the city or town or otherwise obtained by the department.

D. For the purposes of subsections A, B and C:

"Documentary evidence" means correspondence, contracts, other agreements, aerial photography, affidavits, receipts or official records.
"Farm" means an area of land in the sub-basin that is or was served by a common irrigation water distribution system.
"Historically irrigated acres" means acres of land overlying an aquifer that were irrigated with groundwater at any time between January 1, 1975 and January 1, 1990.

E. A city or town in the Prescott active management area may withdraw and transport eight thousand sixty-eight acre-feet per year of groundwater from the Big Chino sub-basin of the Verde River groundwater basin to the Prescott active management area if the city or town does both of the following:

Relinquishes a supply of water from the central Arizona project allocated to the city or town.
Enters into a federally-approved settlement of the water rights claims of an Indian tribe in the Prescott active management area.

F. Notwithstanding the volume limitation in subsection E, in any year in which a city or town that qualifies under subsection E delivers more than two hundred thirty-one acre-feet of water to an Indian tribe for use on its reservation in the Prescott active management area pursuant to a federally-approved Indian water rights settlement, the city or town may withdraw and transport additional groundwater from the Big Chino sub-basin to the Prescott active management area in an amount equal to the amount by which those deliveries exceed two hundred thirty-one acre-feet.

G. Groundwater that is withdrawn and transported pursuant to subsections E and F may be delivered to and used by any city, town or Indian tribe in the Prescott active management area without regard to whether that entity withdraws and transports the water.

§ 45-555.01 Transportation of groundwater withdrawn in upper San Pedro groundwater basin to Douglas active management area

A. An owner of a well that is located in the upper San Pedro groundwater basin may annually withdraw groundwater from the upper San Pedro groundwater basin for transportation to the Douglas active management area in an amount determined pursuant to this section if all of the following apply:

The owner of the well or the owner's predecessor in interest withdrew groundwater from the upper San Pedro groundwater basin for transportation to the Douglas active management area on or before December 1, 2022.
The groundwater is transported to the Douglas active management area for the same purposes for which the groundwater was transported from the upper San Pedro groundwater basin to the Douglas groundwater basin before December 1, 2022.
If the owner of the well is a private water company, the private water company, as of September 14, 2024, has a certificate of convenience and necessity issued by the corporation commission to provide water service for a municipal purpose within the Douglas active management area.

B. The total amount of groundwater that an owner of a well that meets the requirements prescribed in subsection A of this section may annually transport from the upper San Pedro groundwater basin to the Douglas active management area may not exceed the highest annual amount of groundwater that the owner of the well withdrew from the upper San Pedro groundwater basin for transportation to the Douglas groundwater basin in any of the preceding ten years before December 1, 2022.

C. Within thirty days after September 14, 2024 or thirty days before the effective date of groundwater withdrawal, whichever is later, a well owner that wishes to transport groundwater from the upper San Pedro groundwater basin to the Douglas groundwater basin shall submit to the director:

Evidence that the well owner withdrew groundwater from the upper San Pedro groundwater basin for transportation to the Douglas groundwater basin on or before December 1, 2022.
Evidence of the purposes for which the well owner transported groundwater from the upper San Pedro groundwater basin to the Douglas groundwater basin on or before December 1, 2022.
Evidence of the purposes for which the well owner has transported or plans to transport groundwater from the upper San Pedro groundwater basin to the Douglas groundwater basin after December 1, 2022.
If the owner is a private water company, evidence that the private water company had a certificate of convenience and necessity issued by the corporation commission to provide water service for a municipal purpose within the Douglas active management area as of September 14, 2024.
The total annual amount of groundwater that the owner withdrew from the upper San Pedro groundwater basin for transportation to the Douglas groundwater basin in each of the preceding ten years before December 1, 2022.

§ 45-556 Transportation fee; annual adjustment; credits; enforcement

A. Except as provided in subsection B of this section, a person who directly or indirectly transports groundwater, withdrawn in a groundwater basin or sub-basin as provided by this article or in the Pinal active management area, away from the county in which it was withdrawn to an initial active management area shall pay annually to the county a groundwater transportation fee determined by the director for each acre-foot of groundwater transported directly or indirectly away from the county, less any amount of central Arizona project water actually used on the property from which the groundwater is transported.

B. A person is not required to pay a transportation fee under this section for stored water withdrawn pursuant to recovery well permits issued by the director pursuant to this title.

C. Except as provided in subsection D of this section the director shall set the fee as follows for the cumulative amount of groundwater transported away from the county, less any amount of central Arizona project water actually used on the property from which the groundwater is transported:

Net Groundwater Transported Fee Per Acre-Foot

0 - 1,000,000 acre-feet $ 3.00

1,000,001 - 2,000,000 acre-feet $ 5.00

2,000,001 - 3,000,000 acre-feet $ 7.50

3,000,001 - 4,000,000 acre-feet $10.00

4,000,001 - 5,000,000 acre-feet $15.00

Over 5,000,000 acre-feet $30.00

D. The director shall annually adjust the dollar amount of the fee according to the annual changes in the GDP price deflator, as defined in section 41-563, using the 1993 calendar year as the base year. The director shall immediately notify all concerned parties of the fee adjustments under this subsection.

E. Credits are allowed against the fees imposed by this section as described and in the amounts provided under this subsection. If the amount of the credit exceeds the amount of the fee imposed for any year, the unused portion of the credit may be carried forward and applied to subsequent years' fees until the amount of the credit is exhausted. The allowable credits are as follows:

The amount of any increase in property tax revenues, including contributions in lieu of property taxes under title 9, chapter 4, article 3, derived from remote municipal property, as defined in section 42-15251, from which the groundwater is withdrawn. The credit shall account for increased revenues due to improvements to the property and increased revenues due to higher property tax valuations and assessment ratios resulting from changes in use of the property. The credit shall not account for increased revenues due to normal market or economic factors. The amount of the credit for any year is the sum of the amounts computed under subdivisions (a) and (b) as follows:

(a) Delete from consideration under this subdivision any property with respect to which an amount is computed under subdivision (b). Subtract the amount of property tax or in lieu revenues that would have been derived from the remaining property during the immediately preceding tax year if the use of and improvements to the property had remained unchanged since the date the city or town acquired the property from the amount of property tax or in lieu revenues actually derived from that property during the immediately preceding tax year. If a city or town conveys all or part of its interest in remote municipal property to another political subdivision, the political subdivision succeeds to the credit allowed under this section. The amount of credit computed under this subdivision shall be computed each year, beginning in the year groundwater is first transported, and, if not used to offset the fee under this section, shall be cumulated from year to year.

(b) This subdivision applies with respect to any portion of the remote municipal property that, before January 1, 1992, was classified at that time as class four property for purposes of property taxation under title 42 but was developed or improved at any time after December 31, 1991 and is not currently classified as class two property. Subtract the amount of property tax or in lieu revenues that would have been derived from that developed or improved portion of the remote municipal property during the immediately preceding tax year if the use of and improvements to the property had remained unchanged since the date the city or town acquired the property from the amount of property tax or in lieu revenues actually derived from that portion of the property during the immediately preceding tax year. If a city or town conveys all or part of its interest in remote municipal property to another political subdivision, the political subdivision succeeds to the credit allowed under this section. The amount of credit computed under this subdivision shall be computed each year, beginning in the year that the property is developed or improved and reclassified for tax purposes, and, if not used to offset the fee under this section, shall be cumulated from year to year.

An amount equal to the market value of land donated to the county if the county agrees in writing to prohibit or limit the withdrawal of groundwater from the land. The amount of the credit shall account for the reduced value of the land due to the groundwater withdrawal limitations.
An amount agreed to by intergovernmental agreement between the county in which the groundwater is withdrawn and the city, town or other person transporting the groundwater.

F. The board of supervisors of a county to which fees are due and payable under this section may request the county attorney to commence and prosecute any action or proceeding to enforce the collection of the fees.

§ 45-557 Requirements for transporting groundwater to an initial active management area; exception

A. Except as provided in subsections B and C of this section:

The director shall not consider groundwater that is being or will be withdrawn in a groundwater basin or sub-basin pursuant to this article or the Pinal active management area and transported to an initial active management area for purposes of determining or providing an assured water supply pursuant to section 45-576 if the groundwater is being or will be used by a city, town or private water company that was offered but did not sign a central Arizona project water delivery subcontract.
A city, town or private water company that has signed a central Arizona project water delivery subcontract may not use groundwater withdrawn in a groundwater basin or sub-basin pursuant to this article or the Pinal active management area and transported to an initial active management area until it has both:

(a) Demonstrated that it has the physical capacity, including the water treatment plant and delivery system, to accept delivery of ninety-five per cent of its central Arizona project water entitlement under its central Arizona project water delivery subcontract.

(b) Accepted delivery of or exchanged eighty per cent or more of the central Arizona project water available to it under its central Arizona project water delivery subcontract in at least one of the three years immediately preceding the year it intends to begin using groundwater transported away from a groundwater basin or sub-basin pursuant to this article or the Pinal active management area.

B. Subsection A of this section does not apply to groundwater withdrawn in the Big Chino sub-basin of the Verde river groundwater basin and transported to an adjoining initial active management area pursuant to section 45-555.

C. Groundwater transported to an adjoining initial active management area pursuant to section 45-555, subsections E and F shall be deemed to be legally available under the rules adopted pursuant to section 45-576.

§ 45-558 Weeds and dust

A person shall maintain property owned by the person and from which groundwater is or will be transported pursuant to this article free of noxious weeds as defined in section 3-201, Russian thistles (salsola kali) and blowing dust that creates a threat to health or safety.

§ 45-559 Well spacing requirements for withdrawing groundwater for transportation to an active management area

Except as provided in section 45-554, subsection A and except for groundwater withdrawn and transported pursuant to section 45-555, subsections E and F, a person may not use a well constructed after September 21, 1991 for the purpose of withdrawing groundwater for transportation to an active management area pursuant to article 8.1 of this chapter unless the person wishing to use the well for that purpose applies to the director for approval and the director approves the application. The director shall approve the application if the director determines that the withdrawals for that purpose will not unreasonably increase damage to surrounding land or other water users from the concentration of wells. In making this determination, the director shall follow the criteria for proposed withdrawals in the rules adopted pursuant to section 45-598, subsection A.

Article 9 Management

§ 45-561 Definitions

In this article, unless the context otherwise requires:

"Aquifer" means a geologic formation that contains sufficient saturated materials to be capable of storing water and transmitting water in usable quantities to a well.
"Augmentation" means to supplement the water supply of an active management area and may include the importation of water into the active management area, storage of water or storage of water pursuant to chapter 3.1 of this title.
"Incidental recharge" means the percolation of water to an aquifer after the water has been withdrawn, diverted or received for delivery by a municipal provider for use within its service area, except water that is added to an aquifer pursuant to chapter 3.1 of this title.
"Incidental recharge factor" means the ratio of the amount of incidental recharge attributable to a municipal provider during a calendar year to the amount of water withdrawn, diverted or received for delivery by the municipal provider for use within its service area during the year. The amount of incidental recharge attributable to a municipal provider during a calendar year is the amount of water that is incidentally recharged during the year after it is withdrawn, diverted or received for delivery by the municipal provider for use within its service area.
"Industrial use" means a non-irrigation use of water not supplied by a city, town or private water company, including animal industry use and expanded animal industry use.
"Intermediate water duty" means an irrigation water duty, as defined in section 45-402, which is established by the director during a management period to apply for a specific number of years during the management period.
"Large untreated water provider" means a municipal provider that as of January 1, 1990 was serving untreated water to at least five hundred persons or supplying at least one hundred acre-feet of untreated water during a calendar year.
"Management period" means a period of years prescribed by sections 45-564 through 45-568 during which a prescribed management plan applies.
"Mined groundwater" means the amount of groundwater withdrawn or received by a municipal provider from within an active management area during a calendar year for use in its service area, minus both of the following, as applicable:

(a) An amount of water computed by multiplying the amount of water supplied by the municipal provider for use within its service area during the calendar year by the incidental recharge factor established for the municipal provider pursuant to this article.

(b) If the municipal provider is a city or town in the Tucson active management area, the amount of groundwater withdrawn by the municipal provider during the calendar year from land owned or leased by the municipal provider to which a type 1 non-irrigation grandfathered right under section 45-463, subsection A is appurtenant, up to the following amount:

(i) If the municipal provider has made a request to the director as described in section 45-463, subsection F, the amount of groundwater computed by the director under section 45-463, subsection F, in determining whether to designate or redesignate the municipal provider as having an assured water supply, minus the amount of any groundwater withdrawn by the municipal provider from the land during the period beginning with January 1 of the year in which the request was made and ending on December 31 of the year immediately preceding the calendar year for which the calculation of mined groundwater is being made.

(ii) If the municipal provider has not made a request to the director as described in section 45-463, subsection F, the amount of groundwater that the director would have been required to include in determining whether to designate or redesignate the municipal provider as having an assured water supply, as computed under section 45-463, subsection F, if the municipal provider had made a request to the director as described in that subsection on January 1 of the calendar year for which the calculation of mined groundwater is being made.

"Municipal provider" means a city, town, private water company or irrigation district that supplies water for non-irrigation use.
"Municipal use" means all non-irrigation uses of water supplied by a city, town, private water company or irrigation district, except for uses of water, other than Colorado river water, released for beneficial use from storage, diversion or distribution facilities to avoid spilling that would otherwise occur due to uncontrolled surface water inflows that exceed facility capacity.
"Safe-yield" means a groundwater management goal which attempts to achieve and thereafter maintain a long-term balance between the annual amount of groundwater withdrawn in an active management area and the annual amount of natural and artificial recharge in the active management area.
"Small municipal provider" means a municipal provider that supplies two hundred fifty acre-feet or less of water for non-irrigation use during a calendar year. For purposes of this paragraph, the amount of untreated water that is supplied by a large untreated water provider during a year shall not be counted in determining whether the municipal provider supplied two hundred fifty acre-feet or less of water for non-irrigation use.
"Untreated water" means water that is not treated to improve its quality and that is supplied by a municipal provider through a distribution system other than a potable water distribution system.

§ 45-562 Management goals for active management areas

A. The management goal of the Tucson, Phoenix and Prescott active management areas is safe-yield by January 1, 2025, or such earlier date as may be determined by the director.

B. The management goal of the Pinal active management area is to allow development of non-irrigation uses as provided in this chapter and to preserve existing agricultural economies in the active management area for as long as feasible, consistent with the necessity to preserve future water supplies for non-irrigation uses.

C. The management goal of the Santa Cruz active management area is to maintain a safe-yield condition in the active management area and to prevent local water tables from experiencing long-term declines.

D. Except as otherwise provided for the Santa Cruz active management area, all initial active management areas are subject to all provisions of this chapter.

§ 45-563 Management plans in active management areas; management periods; general provisions

A. The director shall develop a management plan for each initial active management area for each of five management periods pursuant to the guidelines prescribed in sections 45-564 through 45-568 and shall adopt the plans only after public hearings held pursuant to sections 45-570 and 45-571. The plans shall include a continuing mandatory conservation program for all persons withdrawing, distributing or receiving groundwater designed to achieve reductions in withdrawals of groundwater.

B. The director shall develop a management plan for the Santa Cruz active management area for the third, fourth and fifth management periods pursuant to the guidelines prescribed in sections 45-566, 45-566.01, 45-567, 45-567.01, 45-568 and 45-568.01 and shall adopt the plans only after public hearings held pursuant to sections 45-570 and 45-571. The plans shall include a continuing mandatory conservation program designed to achieve the management goal of the active management area for all persons withdrawing water, other than stored water, from a well and all persons distributing or receiving water, other than stored water, from a well. The plans shall also include criteria for the location of new wells and replacement wells in new locations consistent with the management goal of the active management area.

§ 45-563.01 Water conservation report; per capita use; non-per capita conservation programs

At least once every three years the director shall issue a report containing:

The per capita water use in the service area of each municipal provider in each active management area.
A brief description and evaluation of the efforts to promote water conservation by each municipal provider that is subject to a non-per capita conservation program established under this article.
Any other information the director deems appropriate to allow the public to assess and compare the water conservation efforts of municipal providers in each active management area.

§ 45-563.02 Exemption from irrigation water duties; small irrigation grandfathered rights; criteria; conservation requirement; exception

A. A person who is entitled to use groundwater pursuant to an irrigation grandfathered right is exempt from any irrigation water duties or intermediate water duties established for the farm to which the right is appurtenant under sections 45-564, 45-565, 45-566, 45-567 and 45-568 if both of the following apply:

There are ten or fewer irrigation acres in the farm.
The farm is not part of an integrated farming operation.

B. The director shall not establish irrigation water duties or intermediate water duties under section 45-566, 45-567 or 45-568 for a farm to which both of the following apply:

There are ten or fewer irrigation acres in the farm.
The farm is not part of an integrated farming operation.

C. Except as provided in subsection D of this section, a person who is exempt from the irrigation water duties established for a farm pursuant to subsection A of this section or who owns or uses groundwater on a farm for which irrigation water duties are prohibited in subsection B of this section shall not allow any groundwater to flow off the surface of the farm's irrigation acres unless the groundwater is used for a reasonable and beneficial use approved in writing by the director.

D. A person who is required under subsection C of this section to prevent groundwater from flowing off the surface of a farm's irrigation acres may apply to the director for an exemption from the requirement. The director may grant the exemption if the person demonstrates to the satisfaction of the director that one of the following applies:

Preventing groundwater from flowing off the surface of the farm's irrigation acres would not be economically feasible.
Any groundwater that will flow off the surface of the farm's irrigation acres will be used by a person with an exempt well in lieu of groundwater that otherwise would have been withdrawn from that well.

§ 45-563.03 Turf and plant installation requirements; prohibition; exception; definition

A. Notwithstanding any other law, a municipality that is located in an initial active management area may not adopt or enforce any requirement that establishes, directly or indirectly, any of the following:

Minimum turf requirements, except for functional turf requirements that are associated with public recreational use areas or other public spaces that are regularly used for civic, community or recreational purposes, including playgrounds, sports fields, cemeteries, schoolyards and stormwater management, but not including stormwater drainage areas that are located in subdivisions.
The installation of plants that are not included on the low-water-use and drought-tolerant plant list that is published by the department for the current management plan in the initial active management areas.

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

§ 45-564 Management plan for first management period; guidelines

A. For the first management period, 1980 to 1990, the director shall promulgate management plans for the Phoenix, Tucson and Prescott active management areas not later than January 1, 1983 and for the Pinal active management area not later than July 1, 1985. In each plan, the director shall establish:

An irrigation water duty for each farm unit in the active management area. The irrigation water duty shall be calculated as the quantity of water reasonably required to irrigate the crops historically grown in a farm unit and shall assume conservation methods being used in the state which would be reasonable for the farm unit including lined ditches, pump-back systems, land leveling and efficient application practices, but not including a change from flood irrigation to drip irrigation or sprinkler irrigation.
A conservation program for all non-irrigation uses of groundwater. For municipal uses, the program shall require reasonable reductions in per capita use and such other conservation measures as may be appropriate for individual users. For industrial uses including industrial uses within the exterior boundaries of the service area of a city, town, private water company or irrigation district, the program shall require use of the latest commercially available conservation technology consistent with reasonable economic return.
Economically reasonable conservation requirements for the distribution of groundwater by cities, towns, private water companies and irrigation districts within their service areas.

B. Within thirty days after the management plan for the first management period is adopted, the director shall give written notice of:

The irrigation water duty for the farm unit to each person in the farm unit who is entitled to withdraw or receive groundwater pursuant to an irrigation grandfathered right and to each person distributing groundwater pursuant to an irrigation grandfathered right.
The municipal conservation requirements included in the management plan for reductions in per capita use and for the use of appropriate conservation measures by individual users to each person who is entitled to withdraw or distribute groundwater for municipal use in the active management area.
The industrial conservation requirements included in the management plan for each person who is entitled to withdraw or receive groundwater for an industrial use in the active management area.
The conservation requirements included in the management plan for the distribution of groundwater by cities, towns, private water companies and irrigation districts within their service areas to each city, town, private water company and irrigation district in the active management area.

C. Except as provided in section 45-411.01, subsections A and B and except for a person who obtains a variance under section 45-574, and except as provided in subsection D of this section, all persons notified pursuant to subsection B of this section shall comply with the applicable irrigation water duty or conservation requirements within two years from the date of the notice and shall remain in compliance until the compliance date for any applicable irrigation water duty or conservation requirements established in the management plan for the second management period. A person who obtains a variance under section 45-574 shall comply with the applicable irrigation water duty or conservation requirements by the date specified in the variance and shall remain in compliance until the compliance date for any applicable irrigation water duty or conservation requirements established in the management plan for the second management period.

D. A municipal provider which distributes groundwater to an individual user for which an intermediate municipal conservation requirement has been established pursuant to section 45-565, subsection D is not responsible or accountable pursuant to the first management plan for a failure by the individual user to comply with the intermediate conservation requirement occurring on or after the compliance date for the intermediate conservation requirement.

E. In addition to the provisions of the management plan for the first management period prescribed by subsection A of this section, the director may include a program for the augmentation of the water supply of the Tucson active management area including incentives for artificial groundwater recharge.

§ 45-565 Management plan for second management period; guidelines

A. For the second management period, 1990 to 2000, the director shall promulgate a management plan for each initial active management area not later than January 1, 1988. In each plan the director shall:

Except as provided in section 45-411.01, subsection A, establish a new irrigation water duty for each farm unit to be reached by the end of the second management period and may establish one or more intermediate water duties to be reached at specified intervals during the second management period. Except as provided in subsection G of this section, the irrigation water duty and any intermediate water duties shall be calculated as the quantity of water reasonably required to irrigate the crops historically grown in the farm unit and shall assume the maximum conservation consistent with prudent long-term farm management practices within areas of similar farming conditions, considering the time required to amortize conservation investments and financing costs.
Establish additional conservation requirements for all non-irrigation uses of groundwater to be achieved by the end of the second management period and may establish intermediate conservation requirements to be achieved at specified intervals during the second management period. For municipal uses, except as provided in section 45-565.01 and paragraphs 3 and 4 of this subsection, the program shall require additional reasonable reductions in per capita use to those required in the first management period and use of such other conservation measures as may be appropriate for individual users. For industrial uses including industrial uses within the exterior boundaries of the service area of a city, town, private water company or irrigation district, the program shall require the use of or establish conservation requirements based on the use of the latest commercially available conservation technology consistent with reasonable economic return.
Establish conservation or rate of use requirements for deliveries of untreated water by large untreated water providers based on the use of the latest commercially available conservation technology consistent with reasonable economic return.
Establish reasonable conservation requirements for small municipal providers.
Except as provided in section 45-411.01, subsection B, establish additional economically reasonable conservation requirements for the distribution of groundwater by cities, towns, private water companies and irrigation districts within their service areas.
Include a program for augmentation of the water supply of the active management area including incentives for artificial groundwater recharge.
In cooperation with the department of environmental quality, include an assessment of groundwater quality in the active management area and any proposed program for groundwater quality protection. Any such program shall be submitted to the legislature for any necessary enabling legislation or coordination with existing programs of the department of environmental quality.

B. Within thirty days after the management plan for the second management period is adopted, the director shall give written notice of:

The irrigation water duties and conservation requirements in the manner and to the persons prescribed in section 45-564, subsection B, except that the director shall give written notice of any municipal conservation requirement which is substantially identical to an industrial conservation requirement only to the individual users to which the municipal conservation requirement applies, and which have been identified as such by the municipal provider on a form provided by the department and received by the director no later than ninety days before the adoption of the management plan. If the municipal conservation requirement for the use of appropriate conservation measures by individual users is not substantially identical to an industrial conservation requirement, or if the director has not been notified of an individual user by a municipal provider, the director shall give written notice of a municipal conservation requirement to either the individual user or a municipal provider that directly serves the individual user.
The conservation requirements for small municipal providers to each small municipal provider in the active management area.

C. Two years before the compliance date specified in the management plan for any irrigation water duty, intermediate water duty, conservation requirement or intermediate conservation requirement, the director shall give additional written notice by first class mail to the last known addresses of the persons prescribed in subsection B of this section, except as provided in subsection D of this section.

D. If the director establishes in the management plan an intermediate municipal conservation requirement that subjects an individual user to a water allotment or application rate identical to the annual water allotment or application rate computed for the individual user under a conservation requirement for the use of appropriate conservation measures adopted in the management plan for the first management period, the compliance date for the intermediate conservation requirement may be two years or less from the date of adoption of the management plan for the second management period and no additional written notice to the individual user is required.

E. Except for a person who obtains a variance under section 45-574 or who is exempt from irrigation water duties under section 45-563.02, subsection A, all persons notified pursuant to subsection B of this section shall comply with the applicable irrigation water duty or conservation requirements for the second management period not later than January 1, 2000 and shall remain in compliance until the compliance date for any applicable irrigation water duty or conservation requirements established in the management plan for the third management period. If intermediate water duties or intermediate conservation requirements have been established, a person to whom those water duties or conservation requirements apply shall comply with the intermediate water duties or conservation requirements not later than the compliance date specified in the management plan, unless the person obtains a variance pursuant to section 45-574 or is exempt from intermediate water duties pursuant to section 45-563.02, subsection A. A person who obtains a variance under section 45-574 shall comply with the applicable irrigation water duty or conservation requirements by the date specified in the variance and shall remain in compliance until the subsequent compliance date for any applicable irrigation water duty or conservation requirements established in the management plan for the second management period or, if that management plan does not establish any applicable subsequent compliance date, until the applicable compliance date established in the management plan for the third management period.

F. In addition to the provisions of the management plan for the second management period prescribed by subsection A of this section, the director shall:

Include a program for conservation assistance to water users within the active management area.
Establish the historic annual net natural recharge for any groundwater replenishment district in the active management area, computed by determining the net natural recharge, as defined by section 48-4401, for the groundwater basin beneath the district during calendar years 1961 through 1990 and dividing the result by thirty.

G. A person who is entitled to use groundwater pursuant to an irrigation grandfathered right may apply to the director at any time during the management period for an exemption from the irrigation water duties established under subsection A, paragraph 1 of this section. The director shall grant the exemption if the person demonstrates to the director's satisfaction that granting the exemption is consistent with achieving the management goal of the active management area and that one of the following applies:

Withdrawal of groundwater pursuant to the irrigation grandfathered right during the management period will intercept groundwater that would otherwise flow out of and be lost to the active management area within the next fifteen years without entering another active management area.
Withdrawal of groundwater pursuant to the irrigation grandfathered right during the management period will prevent encroachment of a rising depth to groundwater level that will cause waterlogging problems within the next fifteen years.

§ 45-565.01 Non-per capita conservation program for municipal providers; second management period

A. In addition to the provisions of the management plan for the second management period prescribed by section 45-565, subsection A, not later than January 1, 1995 the director shall include in the management plan a non-per capita conservation program for municipal providers that requires a municipal provider approved for the program to implement specific conservation programs within its service area, including all of the following:

Residential and nonresidential conservation programs for interior and exterior water use.
A public education program relating to water conservation.
A program to meter all service area connections, except connections to fire services, dwelling units in multifamily residential structures, mobile homes in mobile home parks with master meters and construction users.

B. In a non-per capita conservation program established under this section, the director shall establish a standard incidental recharge factor for all municipal providers that apply for the program, except for municipal providers that are members of a groundwater replenishment district established under title 48, chapter 27. A municipal provider that applies for the non-per capita conservation program may request in its application that the director establish an incidental recharge factor for the municipal provider that is different than the standard incidental recharge factor established in the program. The director may establish a different incidental recharge factor for the municipal provider if the municipal provider demonstrates to the satisfaction of the director that the ratio of the average annual amount of incidental recharge expected to be attributable to the municipal provider during the management period to the average annual amount of water expected to be withdrawn, diverted or received for delivery by the municipal provider for use within its service area during the management period is different than the standard incidental recharge factor.

C. A municipal provider may apply for a non-per capita conservation program established under this section if any of the following applies:

The municipal provider is a member of a groundwater replenishment district established under title 48, chapter 27.
The service area of the municipal provider has qualified as a member service area under title 48, chapter 22, or as a water district member service area under title 48, chapter 28, and the conditions established under section 45-576.01, subsection B, paragraphs 2 and 3 are met by the conservation district or the water district, as applicable, for the active management area in which the service area is located.
The municipal provider has developed a plan to both:

(a) Reduce the proportion of mined groundwater supplied by it for use within its service area such that the result computed by dividing the volume of mined groundwater supplied by the provider for use within its service area in a year by the volume of all water supplied by the provider for use within its service area in that year does not exceed:

(i) Fourteen-fifteenths for 1996.

(ii) Thirteen-fifteenths for 1997.

(iii) Four-fifths for 1998.

(iv) Eleven-fifteenths for 1999.

(v) Two-thirds for 2000.

(vi) Three-fifths for 2001.

(vii) Eight-fifteenths for 2002.

(viii) Seven-fifteenths for 2003.

(ix) Two-fifths for 2004.

(x) One-third for 2005.

(xi) Four-fifteenths for 2006.

(xii) One-fifth for 2007.

(xiii) Two-fifteenths for 2008.

(xiv) One-fifteenth for 2009.

(b) Deliver no mined groundwater for use within its service area after January 1, 2010.

The municipal provider is designated as having an assured water supply under rules adopted by the director pursuant to section 45-576.
The municipal provider has applied to the director to be designated as having an assured water supply under rules adopted by the director pursuant to section 45-576 and the director has not yet granted or denied the application.
The municipal provider is a city or town that is deemed to have an assured water supply under section 45-576, subsection E and both of the following apply:

(a) The municipal provider has not applied to the director to be designated as having an assured water supply under rules adopted by the director pursuant to section 45-576.

(b) The municipal provider can demonstrate that if it was applying to the director to be designated as having an assured water supply under rules adopted by the director pursuant to section 45-576, its projected groundwater use would be found to be consistent with achieving the management goal of the active management area under the criteria contained in those rules.

D. The director shall prescribe and furnish an application form for a non-per capita conservation program established under this section that includes the following:

If the municipal provider requests an incidental recharge factor different than the standard incidental recharge factor established by the director pursuant to subsection B of this section:

(a) A copy of a hydrological study that demonstrates the amount of water withdrawn, diverted or received for delivery by the municipal provider for use within its service area during each of the preceding five years and the amount of incidental recharge that was attributable to the municipal provider during each of those years.

(b) A copy of a hydrological study that projects the average annual amount of water that will be withdrawn, diverted or received for delivery by the municipal provider for use within its service area during the management period and the average annual amount of incidental recharge that will be attributable to the municipal provider during the management period.

If the municipal provider is applying for the program under subsection C, paragraph 3 of this section, a copy of the plan described in that paragraph.
If the municipal provider is applying for the program under subsection C, paragraph 6 of this section, information demonstrating that if the municipal provider was applying to the director to be designated as having an assured water supply under rules adopted by the director pursuant to section 45-576, the municipal provider's projected groundwater use would be found to be consistent with achieving the management goal of the active management area under the criteria contained in those rules.
A description of the conservation programs currently being implemented by the municipal provider, and any conservation programs that the municipal provider intends to implement if it is approved for the non-per capita conservation program, including a time schedule for implementing the programs.
Any other information that the director may require.

E. The director shall approve a municipal provider's application for a non-per capita conservation program established under this section only if the following conditions are satisfied:

The municipal provider agrees in writing to implement specific conservation programs that will result in achieving water use efficiency in the municipal provider's service area equivalent to the water use efficiency that was assumed by the director in establishing the municipal provider's per capita conservation requirements pursuant to section 45-565, subsection A, paragraph 2, including the programs described in subsection A of this section.
If the municipal provider is applying for the program under subsection C, paragraph 3 of this section, the municipal provider has demonstrated to the satisfaction of the director that it will reduce the proportion of mined groundwater supplied by it for use within its service area to the proportions described in subsection C, paragraph 3, subdivision (a) of this section, and that it will not deliver mined groundwater for use within its service area after January 1, 2010.
If the municipal provider is applying for the program under subsection C, paragraph 5 of this section, the director has made a preliminary determination that the municipal provider's projected groundwater use is consistent with achieving the management goal of the active management area under the criteria contained in rules adopted by the director pursuant to section 45-576. A preliminary determination for purposes of this paragraph is not binding on the director at the time the director determines whether to designate the municipal provider as having an assured water supply.
If the municipal provider is applying for the program under subsection C, paragraph 6 of this section, the director has made a preliminary determination that if the municipal provider was applying to the director to be designated as having an assured water supply under rules adopted by the director pursuant to section 45-576, the municipal provider's projected groundwater use would be found to be consistent with achieving the management goal of the active management area under those rules. A preliminary determination of the director for purposes of this paragraph is not binding on the director at the time the director determines whether to designate the municipal provider as having an assured water supply.

F. A municipal provider that is approved for a non-per capita conservation program established under this section shall comply with any individual user requirements prescribed pursuant to section 45-565, subsection A, paragraph 2, except as provided in section 45-571.02.

G. The director shall include in a non-per capita conservation program established under this section:

A requirement that a municipal provider that applied for the program under subsection C, paragraph 3 of this section shall reduce the proportion of mined groundwater supplied by it for use within its service area to the proportions described in subsection C, paragraph 3, subdivision (a) of this section. The director may excuse a municipal provider's failure to comply with the requirement during any year if the municipal provider demonstrates to the satisfaction of the director that the municipal provider's failure to comply with the requirement was due to drought conditions or the failure of a surface water distribution system.
A requirement that a municipal provider that applied for the program under subsection C, paragraph 4 or 5 of this section shall not supply groundwater for use within its service area in an amount that exceeds that amount of groundwater that the municipal provider may supply for use within its service area consistent with rules adopted by the director pursuant to section 45-576. For purposes of this requirement, if a municipal provider has applied to the director to be designated as having an assured water supply under rules adopted by the director pursuant to section 45-576 and the application is not approved, the amount of groundwater that the municipal provider may supply for use within its service area consistent with the rules is the amount of groundwater that the director determines the municipal provider would have been allowed to supply consistent with the rules if the application had been granted.

H. A municipal provider that applies for a non-per capita conservation program under this section shall comply with the per capita conservation requirements established under section 45-565, subsection A, paragraph 2 until the director approves the application. If the municipal provider's application for the non-per capita conservation program is approved by the director, the provider is exempt from the per capita conservation requirements prescribed under section 45-565, subsection A, paragraph 2.

§ 45-566 Management plan for third management period; guidelines

A. For the third management period, 2000 to 2010, the director shall promulgate a management plan for each initial active management area not later than January 1, 1998. The director:

Except as provided in section 45-411.01, subsection A and section 45-563.02, subsection B, shall establish in each plan a new irrigation water duty for each farm unit to be reached by the end of the third management period and may establish one or more intermediate water duties to be reached at specified intervals during the third management period. Except as provided in subsection D of this section, the irrigation water duty or intermediate water duties for the third management period shall be calculated as the quantity of water reasonably required to irrigate the crops historically grown in the farm unit and shall be computed by dividing the total irrigation requirement per acre of those crops by an irrigation efficiency of eighty per cent, except that a lower irrigation efficiency may be used for a farm unit or portion of a farm unit determined by the director to have limiting soils or excessive slopes and for a farm unit where orchard crops were historically grown and continue to be grown. After computing the irrigation water duty or intermediate water duties for the third management period, the director may adjust the highest twenty-five per cent of the water duties within an area of similar farming conditions by reducing each water duty in an amount up to ten per cent, except that in making the adjustment, no water duty may be reduced to an amount less than the greater of the following:

(a) The highest water duty within the lowest seventy-five per cent of the water duties computed within the area of similar farming conditions for the third management period.

(b) A water duty computed for the farm unit under this paragraph using an irrigation efficiency of eighty per cent.

Shall establish in each plan, except the plan for the Santa Cruz active management area, additional conservation requirements for all non-irrigation uses of groundwater to be achieved by the end of the third management period and may establish intermediate conservation requirements to be achieved at specified intervals during the third management period. In the plan for the Santa Cruz active management area, the director shall establish additional conservation requirements for all non-irrigation uses of water, other than stored water, withdrawn from a well to be achieved by the end of the third management period and may establish intermediate conservation requirements to be achieved at specified intervals during the third management period. For municipal uses, except as provided in section 45-566.01 and paragraphs 3 and 4 of this subsection, the program in each plan shall require additional reasonable reductions in per capita use to those required in the second management period and use of such other conservation measures as may be appropriate for individual users. For industrial uses, including industrial uses within the exterior boundaries of the service area of a city, town, private water company or irrigation district, the program in each plan shall require the use of or establish conservation requirements based on the use of the latest commercially available conservation technology consistent with reasonable economic return.
Shall establish in each plan conservation or rate of use requirements for deliveries of untreated water by large untreated water providers based on the use of the latest commercially available conservation technology consistent with reasonable economic return.
Shall establish in each plan reasonable conservation requirements for small municipal providers.
Except as provided in section 45-411.01, subsection B, shall establish in each plan, except the plan for the Santa Cruz active management area, additional economically reasonable conservation requirements for the distribution of groundwater by cities, towns, private water companies and irrigation districts within their service areas. In the plan for the Santa Cruz active management area, the director shall establish additional economically reasonable conservation requirements for the distribution of water, other than stored water, withdrawn from wells, for cities, towns, private water companies and irrigation districts within their service areas.
Shall include in each plan a program for additional augmentation of the water supply of the active management area, if feasible, including incentives for artificial groundwater recharge.
Shall, in cooperation with the department of environmental quality, include in each plan an assessment of groundwater quality in the active management area and any proposed program for groundwater quality protection. Any such program shall be submitted to the legislature for any necessary enabling legislation or coordination with existing programs of the department of environmental quality.
Shall include in each plan a program for conservation assistance to water users within the active management area.
May include in each plan a program for the purchase and retirement of grandfathered rights by the department to begin no earlier than January 1, 2006.
Shall establish in the plan for an active management area in which a groundwater replenishment district is located the historic annual net natural recharge for the groundwater replenishment district, computed by determining the net natural recharge, as defined by section 48-4401, for the groundwater basin beneath the district during calendar years 1967 through 1996 and dividing the result by thirty.
Shall include in the plan for the Santa Cruz active management area criteria for the location of new wells and replacement wells in new locations consistent with the management goal of the active management area.
Shall include in the plan for the Santa Cruz active management area an evaluation of the potential impact of the plan on the Tucson active management area.
Shall include in the plans for the Tucson, Phoenix and Pinal active management areas recommendations to the Arizona water banking authority regarding all of the following:

(a) Whether additional water storage in the active management area would help to achieve the management goal for the active management area.

(b) Where additional water storage in the active management area would be most useful to achieve the management goal for the active management area.

(c) Whether extinguishment of long-term storage credits accrued or to be accrued by the Arizona water banking authority would help to achieve the management goal for the active management area.

B. Within thirty days after the management plan for the third management period is adopted, the director shall give written notice in the manner and to the persons prescribed in section 45-565, subsection B. Two years before the compliance date specified in the management plan for any irrigation water duty, intermediate water duty, conservation requirement or intermediate conservation requirement, the director shall give additional written notice by first class mail to the last known addresses of the persons prescribed in section 45-565, subsection B.

C. Except for a person who has obtained a variance under section 45-574 or who is exempt from irrigation water duties under section 45-563.02, subsection A, all persons notified pursuant to subsection B of this section shall comply with the applicable irrigation water duty or conservation requirements for the third management period not later than January 1, 2010 and shall remain in compliance until the compliance date for any applicable irrigation water duty or conservation requirements established in the management plan for the fourth management period. If intermediate water duties or intermediate conservation requirements have been established, a person to whom those water duties or conservation requirements apply shall comply with the intermediate water duties or conservation requirements not later than the compliance date specified in the management plan unless the person obtains a variance pursuant to section 45-574 or is exempt from intermediate water duties under section 45-563.02, subsection A. A person who obtains a variance under section 45-574 shall comply with the applicable irrigation water duty or conservation requirements by the date specified in the variance and shall remain in compliance until the subsequent compliance date for any applicable irrigation water duty or conservation requirements established in the management plan for the third management period or, if that management plan does not establish any applicable subsequent compliance date, until the applicable compliance date established in the management plan for the fourth management period.

D. A person who is entitled to use groundwater pursuant to an irrigation grandfathered right may apply to the director at any time during the management period for an exemption from the irrigation water duties established pursuant to subsection A, paragraph 1 of this section. The director shall grant the exemption if the person demonstrates to the director's satisfaction that granting the exemption is consistent with achieving the management goal of the active management area and that one of the following applies:

Withdrawal of groundwater pursuant to the irrigation grandfathered right during the management period will intercept the groundwater that would otherwise flow out of and be lost to the active management area within the next fifteen years without entering another active management area.
Withdrawal of groundwater pursuant to the irrigation grandfathered right during the management period will prevent encroachment of a rising depth to groundwater level that will cause waterlogging problems within the next fifteen years.

§ 45-566.01 Non-per capita conservation program for municipal providers; third management period

A. In addition to the provisions of the management plan for the third management period prescribed by section 45-566, subsection A, paragraph 2, no later than January 1, 2008, the director shall modify the management plan to replace the non-per capita conservation program for municipal providers in effect on the effective date of this amendment to this section with a non-per capita conservation program that is consistent with the guidelines in this amendment to this section. Except as provided in subsections J, K, L and M of this section, all municipal providers shall comply with the non-per capita conservation program by the date prescribed in subsection I of this section. The non-per capita conservation program shall require a municipal provider regulated under the program to implement water conservation measures in its service area, including all of the following:

A public education program relating to water conservation.
A program to meter all service area connections, except connections to fire services, dwelling units in multifamily residential structures, mobile homes in mobile home parks with master meters and construction users.
One or more additional conservation measures selected by the provider from the list of conservation measures adopted by the director pursuant to subsection B of this section, subject to approval by the director pursuant to subsection G or H of this section. The program may prescribe the number of additional conservation measures that a provider must implement under this paragraph based on the number of service connections in the provider's service area.

B. The director shall include in the non-per capita conservation program a list and description of conservation measures that municipal providers regulated under the program must select from to comply with the requirements adopted pursuant to subsection A, paragraph 3 of this section.

C. In addition to the requirements prescribed in subsection A of this section, a municipal provider regulated under the non per-capita conservation program shall:

Include in its annual reports filed pursuant to section 45-632 a copy of the provider's current water rate structure unless no changes have been made to the rate structure since it was last submitted to the director. A municipal provider regulated under the non-per capita conservation program is encouraged to adopt a water rate structure that promotes efficient use of water, subject to approval by the corporation commission if the provider is a public service corporation.
For at least five years after a year in which the municipal provider is regulated under the non-per capita conservation program, keep and maintain accurate records verifying that the municipal provider implemented the conservation measures required by the non-per capita conservation program during that year.

D. The director shall design the non-per capita conservation program to achieve water use efficiency in the service areas of municipal providers regulated under the program equivalent to the water use efficiency that was assumed by the director in establishing the municipal provider's per capita conservation requirements pursuant to section 45-566, subsection A, paragraph 2.

E. Within thirty days after the management plan for the third management period is modified to include the non-per capita conservation program required by this amendment to this section, the director shall give written notice of the program to all municipal providers.

F. Except as provided in subsections J, K, L and M of this section:

No later than July 1, 2009, a municipal provider notified of the non-per capita conservation program pursuant to subsection E of this section shall submit to the director, on a form prescribed by the director, a provider profile that contains the following information:

(a) A description of the municipal provider's existing service area characteristics and water use patterns.

(b) A description of the conservation measures the municipal provider is currently implementing and any additional conservation measures that the provider intends to implement to comply with the non-per capita conservation program.

(c) An explanation of how each conservation measure described in the provider profile is relevant to the municipal provider's existing service area characteristics or water use patterns.

No later than the date specified in the management plan, a municipal provider notified of the non-per capita conservation program pursuant to section 45-571.01, subsection B shall submit to the director, on a form prescribed by the director, a provider profile that includes the information described in paragraph 1 of this subsection.

G. Within ninety days after receiving a municipal provider's provider profile under subsection F of this section, the director shall approve or disapprove the provider profile and send written notice of the decision to the municipal provider. The director shall approve the provider profile if the director determines that the profile contains information demonstrating that the municipal provider will implement at least the minimum number of conservation measures required by the non-per capita conservation program and that the conservation measures are reasonably relevant to the municipal provider's existing service area characteristics or water use patterns. If the director disapproves the provider profile, the director shall include with the written notice of the decision the reasons for the disapproval. A decision of the director disapproving a provider profile is an appealable agency action pursuant to title 41, chapter 6, article 10. If the director fails to send the municipal provider written notice approving or disapproving the municipal provider's provider profile within ninety days after receiving the provider profile, the provider profile shall be deemed approved.

H. If the director disapproves a municipal provider's provider profile pursuant to subsection G of this section, within ninety days after the date of the director's written notice disapproving the provider profile, or within ninety days after the director's decision is final if the municipal provider files a timely notice of appeal of the decision pursuant to title 41, chapter 6, article 10, the municipal provider shall revise the provider profile to correct the deficiencies identified by the director in the written notice and submit the revised provider profile to the director. Within ninety days after receiving a municipal provider's revised provider profile pursuant to this subsection, the director shall approve or disapprove the revised provider profile pursuant to subsection G of this section. If the director disapproves the revised provider profile:

The decision is an appealable agency action pursuant to title 41, chapter 6, article 10.
The municipal provider is in violation of this section beginning on the date the director's decision is final until the municipal provider submits a provider profile that is approved by the director, except that the provider shall not be in violation before January 1, 2010.

I. Except as provided in subsections J, K, L and M of this section:

A municipal provider notified of the non-per capita conservation program pursuant to subsection E of this section shall be regulated under the program beginning on the date the director approves the municipal provider's provider profile pursuant to subsection G or H of this section, but not earlier than January 1, 2010 unless the municipal provider agrees to be regulated under the program before that date and the director has approved the municipal provider's provider profile. A municipal provider regulated under the non-per capita conservation program shall comply with the program beginning on the date the provider is first regulated under the program until the compliance date for the applicable conservation requirements established in the management plan for the fourth management period.
A municipal provider notified of the non-per capita conservation program pursuant to section 45-571.01, subsection B shall be regulated under the non-per capita conservation program beginning on the date the director approves the municipal provider's provider profile pursuant to subsection G or H of this section, or such later date as determined by the director, and shall comply with the program beginning on that date until the compliance date for the applicable conservation requirements established in the management plan for the fourth management period.

J. Except as provided in subsection K of this section, a municipal provider designated as having an assured water supply pursuant to section 45-576 shall not be regulated under the non-per capita conservation program established under this section, but instead shall be regulated under the per capita conservation program established by the director pursuant to section 45-566, subsection A, paragraph 2, unless both of the following apply:

The municipal provider notifies the director in writing that it elects to be regulated under the non-per capita conservation program and includes with the notice a provider profile that contains the information prescribed by subsection F, paragraph 1 of this section.
The director approves the municipal provider's provider profile pursuant to subsection G of this section or a revised provider profile pursuant to subsection H of this section. The municipal provider shall be regulated under the non-per capita conservation program beginning on the date the director approves the municipal provider's provider profile or revised provider profile.

K. If a municipal provider designated as having an assured water supply pursuant to section 45-576 is regulated under a municipal conservation program other than the per capita conservation program established by the director pursuant to section 45-566, subsection A, paragraph 2 on the date the provider receives written notice pursuant to subsection E of this section and the provider is in compliance with that program as of that date:

The municipal provider shall continue to comply with the requirements of that program until the compliance date for the applicable conservation requirements established in the management plan for the fourth management period.
The provider may elect to be regulated under the per capita conservation program adopted pursuant to section 45-566, subsection A, paragraph 2 by giving written notice of the election to the director. After giving such written notice, the provider shall comply with the per capita conservation requirements prescribed by the director beginning on a date specified by the director.

L. A large untreated water provider shall not be regulated under the non-per capita conservation program with respect to its deliveries of untreated water. A large untreated water provider shall comply with the conservation or rate of use requirements established pursuant to section 45-566, subsection A, paragraph 3 with respect to its deliveries of untreated water.

M. A small municipal provider shall not be regulated under the non-per capita conservation program established under this section, but instead shall comply with the conservation requirements established for small municipal providers pursuant to section 45-566, subsection A, paragraph 4.

N. A municipal provider that is regulated under the non-per capita conservation program established under this section shall comply with any individual user requirements prescribed pursuant to section 45-566, subsection A, paragraph 2, except as provided in section 45-571.02.

O. A municipal provider regulated under the non-per capita conservation program established under this section is exempt from the per capita conservation requirements prescribed under section 45-566, subsection A, paragraph 2.

P. The director shall prepare a guidance document to assist municipal providers entering into the non-per capita conservation program. The guidance document shall inform municipal providers of the requirements of the program as adopted in the management plan and the manner in which the director will implement the program. The director shall cooperate with municipal providers in developing the guidance document.

§ 45-566.02 Alternative conservation programs for agriculture; third management period

A. In addition to the provisions of the management plan for the third management period prescribed by section 45-566, subsection A, paragraph 1, the director shall include in the management plan the historic cropping program prescribed by this section as an alternative agricultural conservation program that achieves conservation equivalent to that required by section 45-566, subsection A, paragraph 1.

B. The director shall establish the components of the historic cropping program in the management plan for the third management period to assure that conservation equivalent to that required by section 45-566, subsection A, paragraph 1 will be achieved. In addition to the program components established by the director, the historic cropping program shall include the following provisions:

The director shall calculate the maximum annual groundwater allotment as provided in section 45-465.
The director shall calculate the irrigation water duty in the same manner as that required by section 45-566, subsection A, paragraph 1 using an irrigation efficiency of seventy-five per cent. In areas deemed by the director to have limiting soils, the director may use an irrigation efficiency of seventy per cent for the water duty calculation.
The flexibility account provisions of section 45-467 apply except as otherwise provided in this section.
The director shall not register credits to the flexibility account established under section 45-467 that cause the credit balance to exceed seventy-five per cent of the maximum annual groundwater allotment established pursuant to this subsection.
Only owners of an irrigation grandfathered right may apply for participation in the historic cropping program.

C. In the management plan, the director shall establish criteria that the applicant shall satisfy to enter the historic cropping program to assure that conservation equivalent to that required by section 45-566, subsection A, paragraph 1 will be achieved. An owner of an irrigation grandfathered right may apply to participate in the historic cropping program by filing an application with the director. The director shall not approve an application for the historic cropping program unless the applicant satisfies the entrance criteria established by the director and the following conditions are satisfied:

The applicant's accumulation of credits in the applicant's flexibility account under section 45-467 is equal to or less than seventy-five per cent of the farm's maximum annual groundwater allotment established under section 45-566, subsection A, paragraph 1. To satisfy this condition, the applicant may either sell or convey any excess credits as provided by section 45-467 or the applicant may relinquish any excess credits.
The applicant's accumulation of debits in the applicant's flexibility account under section 45-467 is equal to or less than twenty-five per cent of the farm's maximum annual groundwater allotment established under section 45-566, subsection A, paragraph 1.

D. In the management plan, the director shall establish performance standards that the owner of an irrigation grandfathered right or any person using groundwater pursuant to that right shall satisfy while participating in the historic cropping program to assure that conservation equivalent to that required by section 45-566, subsection A, paragraph 1 will be achieved. After an owner of an irrigation grandfathered right has been approved for participation in the historic cropping program, the owner of the irrigation grandfathered right, and any person using groundwater pursuant to that right, shall meet both of the following conditions:

Comply with the performance standards established by the director.
Not accumulate debits to the flexibility account established under section 45-467 that exceed twenty-five per cent of the maximum annual groundwater allotment established under subsection B of this section. The owner of the irrigation grandfathered right, and any person entitled to use groundwater pursuant to that right, violate this section if the debit balance exceeds the amount stated in this paragraph.

E. Notwithstanding the provisions of section 45-467, an owner of an irrigation grandfathered right, while participating in the historic cropping program, shall not convey or sell flexibility account credits from, or purchase flexibility account credits for, the flexibility account regulated by the historic cropping program.

F. The director shall include in a modification to the management plan for the third management period a best management practices program that is an alternative to the agricultural conservation program required by section 45-566, subsection A, paragraph 1 and that the director determines will achieve conservation that is at least equivalent to that required under section 45-566, subsection A, paragraph 1. The best management practices program shall require the owner of an irrigation grandfathered right and any person using groundwater pursuant to the right to implement specific agricultural conservation practices for water use on the land or farm unit to which the right is appurtenant in lieu of complying with an irrigation water duty and a maximum annual groundwater allotment. The director may include in the adoption of, or a modification to, the management plan for the third management period additional alternative agricultural conservation programs that the director determines achieve conservation that is at least equivalent to that required under section 45-566, subsection A, paragraph 1. The director may establish a cropped acreage program in which the maximum annual groundwater allotment is determined based on the crops grown during the calendar year in which the irrigation efficiency is applied.

§ 45-567 Management plan for fourth management period; guidelines

A. For the fourth management period, 2010 to 2020, the director shall promulgate a management plan for each initial active management area not later than January 1, 2008. The director:

Except as provided in section 45-563.02, subsection B, shall include in each plan an irrigation water duty or intermediate water duties. These duties shall be calculated in the manner provided in section 45-566, subsection A, paragraph 1 and shall be subject to an exemption under subsection E of this section. In setting the irrigation water duty or intermediate water duties for the fourth management period, the director may adjust the highest twenty-five per cent of the final irrigation water duties established within an area of similar farming conditions pursuant to section 45-566 by reducing each water duty in an amount up to ten per cent, except that, in making the adjustment, no water duty may be reduced to an amount less than the greater of the following:

(a) The highest water duty within the lowest seventy-five per cent of the water duties computed within the area of similar farming conditions for the fourth management period.

(b) A water duty computed for the farm unit under this paragraph using an irrigation efficiency of eighty per cent.

May include in each plan, if feasible, additional conservation requirements for non-irrigation uses and intermediate conservation requirements, which shall apply subject to section 45-567.01.
May include in each plan, if feasible, conservation or rate of use requirements for deliveries of untreated water by large untreated water providers based on the use of the latest commercially available conservation technology consistent with reasonable economic return.
May include in each plan, except the plan for the Santa Cruz active management area, if feasible, additional economically reasonable conservation requirements for the distribution of groundwater by cities, towns, private water companies and irrigation districts within their service areas. In the plan for the Santa Cruz active management area, the director may include, if feasible, additional economically reasonable conservation requirements for the distribution of water, other than stored water, withdrawn from wells, for cities, towns, private water companies and irrigation districts within their service areas.
May include in each plan, if feasible, a program for additional augmentation of the water supply of the active management area, including incentives for artificial groundwater recharge.
May include in each plan, if feasible, in cooperation with the department of environmental quality, an assessment of groundwater quality in the active management area and any proposed program for groundwater quality protection. Any such program shall be submitted to the legislature for any necessary enabling legislation or coordination with existing programs of the department of environmental quality.
May include in each plan, if feasible, a program for conservation assistance to water users within the active management area.
May include in each plan, if feasible, a program for purchase and retirement of grandfathered rights by the department.
Shall include in the plan for the Santa Cruz active management area criteria for the location of new wells and replacement wells in new locations consistent with the management goal of the active management area.
Shall include in the plan for the Santa Cruz active management area an evaluation of the potential impact of the plan on the Tucson active management area.
Shall include in the plans for the Tucson, Phoenix and Pinal active management areas recommendations to the Arizona water banking authority regarding all of the following:

(a) Whether additional water storage in the active management area would help to achieve the management goal for the active management area.

(b) Where additional water storage in the active management area would be most useful to achieve the management goal for the active management area.

(c) Whether extinguishment of long-term storage credits accrued or to be accrued by the Arizona water banking authority would help to achieve the management goal for the active management area.

B. In the plans adopted under subsection A of this section, the director shall establish the historic annual net natural recharge for any groundwater replenishment district in the active management area, computed by determining the net natural recharge, as defined in section 48-4401, for the groundwater basin beneath the district during calendar years 1977 through 2006 and dividing the result by thirty.

C. Within thirty days after the management plan for the fourth management period is adopted, the director shall give written notice in the manner and to the persons prescribed in section 45-565, subsection B and shall give written notice of the non-per capita conservation program established pursuant to section 45-567.01 to all municipal providers. Two years before the compliance date specified in the management plan for any irrigation water duty, intermediate water duty, conservation requirement or intermediate conservation requirement, the director shall give additional written notice by first class mail to the last known addresses of the persons prescribed in section 45-565, subsection B and this subsection.

D. Except for a person who obtains a variance under section 45-574 or who is exempt from irrigation water duties under section 45-563.02, subsection A, all persons notified pursuant to subsection C of this section shall comply with the applicable irrigation water duty or conservation requirements for the fourth management period not later than January 1, 2020 and shall remain in compliance until the compliance date for any applicable irrigation water duty or conservation requirements established in the management plan for the fifth management period. If intermediate water duties or intermediate conservation requirements have been established, a person to whom those water duties or conservation requirements apply shall comply with the intermediate water duties or intermediate conservation requirements not later than the compliance date specified in the management plan, unless the person obtains a variance pursuant to section 45-574 or is exempt from intermediate water duties under section 45-563.02, subsection A. A person who obtains a variance under section 45-574 shall comply with the applicable irrigation water duty or conservation requirements by the date specified in the variance and shall remain in compliance until the subsequent compliance date for any applicable irrigation water duty or conservation requirements established in the management plan for the fourth management period or, if that management plan does not establish any applicable subsequent compliance date, until the applicable compliance date established in the management plan for the fifth management period.

E. A person who is entitled to use groundwater pursuant to an irrigation grandfathered right may apply to the director at any time during the fourth management period for an exemption from the irrigation water duties established under subsection A, paragraph 1 of this section. The director shall grant the exemption if the person demonstrates to the director's satisfaction that granting the exemption is consistent with achieving the management goal of the active management area and that one of the following applies:

Withdrawal of groundwater pursuant to the irrigation grandfathered right during the management period will intercept groundwater that would otherwise flow out of and be lost to the active management area within the next fifteen years without entering another active management area.
Withdrawal of groundwater pursuant to the irrigation grandfathered right during the management period will prevent encroachment of a rising depth to groundwater level that will cause waterlogging problems within the next fifteen years.

§ 45-567.01 Non-per capita conservation program for municipal providers; fourth management period

A. In addition to the provisions of the management plan for the fourth management period prescribed by section 45-567, subsection A, the director shall include in the management plan a non-per capita conservation program for municipal providers. The program shall require a municipal provider regulated under the program to implement water conservation measures in its service area, including all of the following:

A public education program relating to water conservation.
A program to meter all service area connections, except connections to fire services, dwelling units in multifamily residential structures, mobile homes in mobile home parks with master meters and construction users.
One or more additional conservation measures selected by the provider from the list of conservation measures adopted by the director pursuant to subsection B of this section, subject to approval by the director pursuant to subsection F or G of this section. The program may prescribe the number of additional conservation measures that a provider must implement under this paragraph based on the number of service connections in the provider's service area.

C. In addition to the requirements prescribed in subsection A of this section, a municipal provider regulated under the non-per capita conservation program shall:

Include in its annual reports filed pursuant to section 45-632 a copy of the provider's current water rate structure unless no changes have been made to the rate structure since it was last submitted to the director. A municipal provider regulated under the non-per capita conservation program is encouraged to adopt a water rate structure that promotes efficient use of water, subject to approval by the corporation commission if the provider is a public service corporation.
For at least five years after a year in which the municipal provider is regulated under the non-per capita conservation program, keep and maintain accurate records verifying that the municipal provider implemented the conservation measures required by the non-per capita conservation program during that year.

D. The director shall design the non-per capita conservation program to achieve water use efficiency in the service areas of municipal providers regulated under the program equivalent to the water use efficiency assumed by the director in establishing the per capita conservation requirements pursuant to section 45-567, subsection A, paragraph 2.

E. Except as provided in subsections I, J and K of this section, on or before the date specified in the management plan, a municipal provider notified of the non-per capita conservation program pursuant to section 45-567, subsection C or section 45-571.01, subsection B shall submit to the director, on a form prescribed by the director, a provider profile that contains the following information:

A description of the municipal provider's existing service area characteristics and water use patterns.
A description of the conservation measures the municipal provider is currently implementing and any additional conservation measures that the provider intends to implement to comply with the non-per capita conservation program.
An explanation of how each conservation measure described in the provider profile is relevant to the municipal provider's existing service area characteristics or water use patterns.

F. Within ninety days after receiving a municipal provider's provider profile under subsection E of this section, the director shall approve or disapprove the provider profile and send written notice of the decision to the municipal provider. The director shall approve the provider profile if the director determines that the profile contains information demonstrating that the municipal provider will implement at least the minimum number of conservation measures required by the non-per capita conservation program and that the conservation measures are reasonably relevant to the municipal provider's existing service area characteristics or water use patterns. If the director disapproves the provider profile, the director shall include with the written notice of the decision the reasons for the disapproval. A decision of the director disapproving a provider profile is an appealable agency action pursuant to title 41, chapter 6, article 10. If the director fails to send the municipal provider written notice approving or disapproving the provider profile within ninety days after receiving the provider profile, the provider profile shall be deemed approved.

G. If the director disapproves a municipal provider's provider profile pursuant to subsection F of this section, within ninety days after the date of the director's written notice disapproving the provider profile, or within ninety days after the director's decision is final if the municipal provider files a timely notice of appeal of the decision pursuant to title 41, chapter 6, article 10, the municipal provider shall revise the provider profile to correct the deficiencies identified by the director in the written notice and submit the revised provider profile to the director. Within ninety days after receiving a municipal provider's revised provider profile pursuant to this subsection, the director shall approve or disapprove the revised provider profile pursuant to subsection F of this section. If the director disapproves the revised provider profile:

The decision is an appealable agency action pursuant to title 41, chapter 6, article 10.
The municipal provider is in violation of this section beginning on the date the director's decision is final until the municipal provider submits a provider profile that is approved by the director, except that the provider shall not be in violation before the compliance date for the non-per capita conservation program specified in the management plan.

H. Except as provided in subsections I, J and K of this section, a municipal provider notified of the non-per capita conservation program pursuant to section 45-567, subsection C or section 45-571.01, subsection B shall be regulated under the program beginning on the date the director approves the municipal provider's provider profile pursuant to subsection F or G of this section, but not earlier than the compliance date specified in the management plan. A municipal provider regulated under the non-per capita conservation program shall comply with the program beginning on the date the provider is first regulated under the program until the compliance date for the applicable conservation requirements established in the management plan for the fifth management period.

I. A municipal provider designated as having an assured water supply pursuant to section 45-576 shall not be regulated under the non-per capita conservation program, but instead shall be regulated under the per capita conservation program established by the director pursuant to section 45-567, subsection A, paragraph 2, unless both of the following apply:

The municipal provider notifies the director in writing that it elects to be regulated under the non-per capita conservation program and includes with the notice a provider profile that contains the information prescribed by subsection E of this section.
The director approves the municipal provider's provider profile pursuant to subsection F of this section or a revised provider profile pursuant to subsection G of this section. The municipal provider shall be regulated under the non-per capita conservation program beginning on the date the director approves the provider profile or a revised provider profile.

J. A large untreated water provider shall not be regulated under the non-per capita conservation program with respect to its deliveries of untreated water. A large untreated water provider shall comply with any conservation or rate of use requirements established pursuant to section 45-567, subsection A, paragraph 3 with respect to its deliveries of untreated water.

K. A small municipal provider shall not be regulated under the non-per capita conservation program, but instead shall comply with any conservation requirements established for small municipal providers pursuant to section 45-567, subsection A, paragraph 2.

L. A municipal provider regulated under the non-per capita conservation program established under this section shall comply with any individual user requirements prescribed pursuant to section 45-567, subsection A, paragraph 2, except as provided in section 45-571.02.

M. A municipal provider regulated under the non-per capita conservation program established under this section is exempt from the per capita conservation requirements prescribed under section 45-567, subsection A, paragraph 2.

§ 45-567.02 Alternative conservation programs for agriculture; fourth management period

A. In addition to the provisions of the management plan for the fourth management period prescribed by section 45-567, subsection A, paragraph 1, the director shall include in the management plan the historic cropping program prescribed by this section as an alternative agricultural conservation program that achieves conservation equivalent to that required by section 45-567, subsection A, paragraph 1.

B. The director shall establish the components of the historic cropping program in the management plan for the fourth management period to assure that conservation equivalent to that required by section 45-567, subsection A, paragraph 1 will be achieved. In addition to the program components established by the director, the historic cropping program shall include the following provisions:

The director shall calculate the maximum annual groundwater allotment as provided in section 45-465.
The director shall calculate the irrigation water duty in the same manner as that required by section 45-567, subsection A, paragraph 1 using an irrigation efficiency of seventy-five per cent. In areas deemed by the director to have limiting soils, the director may use an irrigation efficiency of seventy per cent for the water duty calculation.
The flexibility account provisions of section 45-467 apply except as otherwise provided in this section.
The director shall not register credits to the flexibility account established under section 45-467 that cause the credit balance to exceed seventy-five per cent of the maximum annual groundwater allotment established pursuant to this subsection.
Only owners of an irrigation grandfathered right may apply for participation in the historic cropping program.

C. In the management plan, the director shall establish criteria that the applicant shall satisfy to enter the historic cropping program to assure that conservation equivalent to that required by section 45-567, subsection A, paragraph 1 will be achieved. An owner of an irrigation grandfathered right may apply to participate in the historic cropping program by filing an application with the director. The director shall not approve an application for the historic cropping program unless the applicant satisfies the entrance criteria established by the director and the following conditions are satisfied:

The applicant's accumulation of credits in the applicant's flexibility account under section 45-467 is equal to or less than seventy-five per cent of the farm's maximum annual groundwater allotment established under section 45-567, subsection A, paragraph 1. To satisfy this requirement, the applicant may either sell or convey any excess credits as provided by section 45-467 or the applicant may relinquish any excess credits.
The applicant's accumulation of debits in the applicant's flexibility account under section 45-467 is equal to or less than twenty-five per cent of the farm's maximum annual groundwater allotment established under section 45-567, subsection A, paragraph 1.

D. In the management plan, the director shall establish performance standards that the owner of an irrigation grandfathered right or any person using groundwater pursuant to that right shall satisfy while participating in the historic cropping program to assure that conservation equivalent to that required by section 45-567, subsection A, paragraph 1 will be achieved. After an owner of an irrigation grandfathered right has been approved for participation in the historic cropping program, the owner of that right, and any person using groundwater pursuant to that right, shall meet both of the following conditions:

Comply with the performance standards established by the director.
Not accumulate debits to the flexibility account established under section 45-467 that exceed twenty-five per cent of the maximum annual groundwater allotment established under subsection B of this section. The owner of the irrigation grandfathered right, and any person entitled to use groundwater pursuant to that right, violate this section if the debit balance exceeds the amount stated in this paragraph.

F. The director may include in the adoption of, or a modification to, the management plan for the fourth management period additional alternative agricultural conservation programs that the director determines achieve conservation that is at least equivalent to that required under section 45-567, subsection A, paragraph 1, including a cropped acreage program in which the maximum annual groundwater allotment is determined based on the crops grown during the calendar year in which the irrigation efficiency is applied.

G. The director shall include in the adoption of the management plan for the fourth management period a best management practices program that requires the owner of an irrigation grandfathered right and any person using groundwater pursuant to the right to implement specific agricultural conservation practices for water use on the land or farm unit to which the right is appurtenant in lieu of complying with an irrigation water duty and a maximum annual groundwater allotment. The program shall be designed to achieve conservation that is at least equivalent to that required under section 45-567, subsection A, paragraph 1.

§ 45-568 Management plan for fifth management period; guidelines

A. For the fifth management period, 2020 to 2025, the director shall promulgate a management plan for each initial active management area not later than January 1, 2019 pursuant to the guidelines prescribed in section 45-567, subsections A and B, except that:

The director shall establish the historic annual net natural recharge for any groundwater replenishment district in the active management area, computed by determining the net natural recharge, as defined by section 48-4401, for the groundwater basin beneath the district during calendar years 1988 through 2017 and dividing the result by thirty.
The director may adjust the highest twenty-five per cent of the irrigation water duties established within an area of similar farming conditions pursuant to section 45-567 by reducing each water duty in an amount up to five per cent, except that in making the adjustment, no water duty may be reduced to an amount less than the greater of the following:

(a) The highest water duty within the lowest seventy-five per cent of the water duties computed within the area of similar farming conditions for the fifth management period.

(b) A water duty computed for the farm unit under this paragraph using an irrigation efficiency of eighty per cent.

A person who is entitled to use groundwater pursuant to an irrigation grandfathered right may apply to the director at any time during the management period for an exemption from the irrigation water duties established pursuant to this section. The director shall grant the exemption if the person demonstrates to the director's satisfaction that granting the exemption is consistent with achieving the management goal of the active management area and that one of the following applies:

(a) Withdrawal of groundwater pursuant to the irrigation grandfathered right during the management period will intercept groundwater that would otherwise flow out of and be lost to the active management area in the next fifteen years without entering another active management area.

(b) Withdrawal of groundwater pursuant to the irrigation grandfathered right during the management period will prevent encroachment of a rising depth to groundwater level that will cause waterlogging problems within the next fifteen years.

B. Within thirty days after the management plan for the fifth management period is adopted, the director shall give written notice in the manner and to the persons prescribed in section 45-565, subsection B and shall give written notice of the non-per capita conservation program established pursuant to section 45-568.01 to all municipal providers. Two years before the compliance date specified in the management plan for any irrigation water duty, intermediate water duty, conservation requirement or intermediate conservation requirement, the director shall give additional written notice by first class mail to the last known addresses of the persons prescribed in section 45-565, subsection B and this subsection.

C. Except for a person who is exempt from irrigation water duties under section 45-563.02, subsection A, all persons notified pursuant to subsection B of this section shall comply with the applicable irrigation water duty or conservation requirements for the fifth management period not later than January 1, 2025 and shall remain in compliance until the legislature determines otherwise.

§ 45-568.01 Non-per capita conservation program for municipal providers; fifth management period

A. In addition to the provisions of the management plan for the fifth management period prescribed by section 45-568, subsection A, the director shall include in the management plan a non-per capita conservation program for municipal providers. The program shall require a municipal provider regulated under the program to implement one or more water conservation measures in its service area from the list adopted by the director pursuant to subsection B of this section, subject to approval by the director pursuant to subsection F or G of this section. The program may prescribe the number of conservation measures that a provider must implement under this subsection based on the number of service connections in the provider's service area.

C. In addition to the requirements prescribed in subsection A of this section, a municipal provider regulated under the non-per capita conservation program shall:

Include in its annual reports filed pursuant to section 45-632 a copy of the provider's current water rate structure unless no changes have been made to the rate structure since it was last submitted to the director. A municipal provider regulated under the non-per capita conservation program is encouraged to adopt a water rate structure that promotes efficient use of water, subject to approval by the corporation commission if the provider is a public service corporation.
For at least five years after a year in which the municipal provider is regulated under the non-per capita conservation program, keep and maintain accurate records verifying that the municipal provider implemented the conservation measures required by the non-per capita conservation program during that year.

D. The director shall design the non-per capita conservation program to achieve water use efficiency in the service areas of municipal providers regulated under the program equivalent to the water use efficiency assumed by the director in establishing the per capita conservation requirements pursuant to section 45-568, subsection A.

E. Except as provided in subsections I, J and K of this section, on or before the date specified in the management plan, a municipal provider notified of the non-per capita conservation program pursuant to section 45-568, subsection B or section 45-571.01, subsection B shall submit to the director, on a form prescribed by the director, a provider profile that contains the following information:

A description of the municipal provider's existing service area characteristics and water use patterns.
A description of the conservation measures the municipal provider is currently implementing and any additional conservation measures that the provider intends to implement to comply with the non-per capita conservation program.
An explanation of how each conservation measure described in the provider profile is relevant to the municipal provider's existing service area characteristics or water use patterns.

The decision is an appealable agency action pursuant to title 41, chapter 6, article 10.
The municipal provider is in violation of this section beginning on the date the director's decision is final until the municipal provider submits a provider profile that is approved by the director, except that the provider shall not be in violation before the compliance date for the non-per capita conservation program specified in the management plan.

H. Except as provided in subsections I, J and K of this section, a municipal provider notified of the non-per capita conservation program pursuant to section 45-568, subsection B or section 45-571.01, subsection B shall be regulated under the program beginning on the date the director approves the municipal provider's provider profile pursuant to subsection F or G of this section, but not earlier than the compliance date specified in the management plan. A municipal provider regulated under the non-per capita conservation program shall comply with the program beginning on the date the provider is first regulated under the program.

I. A municipal provider designated as having an assured water supply pursuant to section 45-576 shall not be regulated under the non-per capita conservation program, but instead shall be regulated under the per capita conservation program established by the director pursuant to section 45-568, subsection A, unless both of the following apply:

The municipal provider notifies the director in writing that it elects to be regulated under the non-per capita conservation program and includes with the notice a provider profile that contains the information prescribed by subsection E of this section.
The director approves the municipal provider's provider profile pursuant to subsection F of this section or a revised provider profile pursuant to subsection G of this section. The municipal provider shall be regulated under the non-per capita conservation program beginning on the date the director approves the provider profile or a revised provider profile.

J. A large untreated water provider shall not be regulated under the non-per capita conservation program with respect to its deliveries of untreated water. A large untreated water provider shall comply with any conservation or rate of use requirements established for deliveries of untreated water by large untreated water providers pursuant to section 45-568, subsection A with respect to its deliveries of untreated water.

L. A municipal provider that is regulated under the non-per capita conservation program established under this section shall comply with any individual user requirements prescribed pursuant to section 45-568, subsection A, except as provided in section 45-571.02.

§ 45-568.02 Alternative conservation programs for agriculture; fifth management period

A. In addition to the provisions of the management plan for the fifth management period prescribed by section 45-568, subsection A, the director shall include in the management plan the historic cropping program prescribed by this section as an alternative agricultural conservation program that achieves conservation equivalent to that required by section 45-568, subsection A.

B. The director shall establish the components of the historic cropping program in the management plan for the fifth management period to assure that conservation equivalent to that required by section 45-568, subsection A will be achieved. In addition to the program components established by the director, the historic cropping program shall include the following provisions:

The director shall calculate the maximum annual groundwater allotment as provided in section 45-465.
The director shall calculate the irrigation water duty in the same manner as that required by section 45-568, subsection A using an irrigation efficiency of seventy-five per cent. In areas deemed by the director to have limiting soils, the director may use an irrigation efficiency of seventy per cent for the water duty calculation.
The flexibility account provisions of section 45-467 apply except as otherwise provided in this section.
The director shall not register credits to the flexibility account established under section 45-467 that cause the credit balance to exceed seventy-five per cent of the maximum annual groundwater allotment established pursuant to this subsection.
Only owners of an irrigation grandfathered right may apply for participation in the historic cropping program.

C. In the management plan, the director shall establish criteria that the applicant shall satisfy to enter the historic cropping program to assure that conservation equivalent to that required by section 45-568, subsection A will be achieved. An owner of an irrigation grandfathered right may apply to participate in the historic cropping program by filing an application with the director. The director shall not approve an application for the historic cropping program unless the applicant satisfies the entrance criteria established by the director and the following conditions are satisfied:

The applicant's accumulation of credits in the applicant's flexibility account under section 45-467 is equal to or less than seventy-five per cent of the farm's maximum annual groundwater allotment established under section 45-568, subsection A. To satisfy this requirement, the applicant may either sell or convey any excess credits as provided by section 45-467, or the applicant may relinquish any excess credits.
The applicant's accumulation of debits in the applicant's flexibility account under section 45-467 is equal to or less than twenty-five per cent of the farm's maximum annual groundwater allotment established under section 45-568, subsection A.

D. In the management plan, the director shall establish performance standards that the owner of an irrigation grandfathered right or any person using groundwater pursuant to that right shall satisfy while participating in the historic cropping program to assure that conservation equivalent to that required by section 45-568, subsection A will be achieved. After an owner of an irrigation grandfathered right has been approved for participation in the historic cropping program, the owner of that right, and any person using groundwater pursuant to that right, shall meet both of the following conditions:

Comply with the performance standards established by the director.
Not accumulate debits to the flexibility account established under section 45-467 that exceed twenty-five per cent of the maximum annual groundwater allotment established under subsection B of this section. The owner of the irrigation grandfathered right, and any person entitled to use groundwater pursuant to that right, violate this section if the debit balance exceeds the amount stated in this paragraph.

F. The director may include in the adoption of, or a modification to, the management plan for the fifth management period additional alternative agricultural conservation programs that the director determines achieve conservation that is at least equivalent to that required under section 45-568, subsection A, including a cropped acreage program in which the maximum annual groundwater allotment is determined based on the crops grown during the calendar year in which the irrigation efficiency is applied.

G. The director shall include in the adoption of the management plan for the fifth management period a best management practices program that requires the owner of an irrigation grandfathered right and any person using groundwater pursuant to the right to implement specific agricultural conservation practices for water use on the land or farm unit to which the right is appurtenant in lieu of complying with an irrigation water duty and a maximum annual groundwater allotment. The program shall be designed to achieve conservation that is at least equivalent to that required under section 45-568, subsection A.

§ 45-569 Management goals and management plans for subsequent active management areas

A. Within thirty days of the designation of a subsequent active management area pursuant to article 2 of this chapter, the director shall establish a management goal for the active management area and the number of years in which the goal is to be achieved.

B. Not later than two years after the designation of a subsequent active management area, the director shall promulgate an initial management plan for the active management area and may provide for subsequent management plans to be promulgated during the time set for achieving the management goal. If the director determines that active management is necessary to preserve the existing supply of groundwater for future needs or that land subsidence or fissuring is endangering property or potential groundwater storage capacity, the director, in developing the plan or plans, shall include measures for reducing groundwater withdrawals which follow as closely as practicable the program set forth in sections 45-564 through 45-568. If the director determines that active management is necessary because the use of groundwater is resulting in actual or threatened groundwater quality degradation, the director shall, in cooperation with the department of environmental quality, include in the plan or plans a program for prevention or amelioration of groundwater quality problems and a schedule for implementation of the proposed solutions. The director shall submit such program to the legislature for any necessary enabling legislation or coordination with existing programs of the department of environmental quality.

C. All management plans, including the management goal, for a subsequent active management area, shall be adopted only after public hearings pursuant to sections 45-570 and 45-571.

§ 45-570 Hearing on management plans; notice; procedures

A. The director shall hold a public hearing on each proposed management plan in each active management area prior to final adoption of the management plan.

B. The director shall give notice of the hearing within thirty days after the proposed management plan is completed. The notice shall include a summary of the management plan, a map or a description of the boundaries of the active management area, and the time and place of the hearing. The notice shall be published once each week for two consecutive weeks in a newspaper of general circulation in each county in which the active management area is located.

C. The hearing shall be held at a location within the active management area as soon as practicable but no less than thirty days and no more than sixty days after the first publication of the notice of the hearing.

D. At the hearing, the director shall present data in support of the adoption of the proposed management plan and a summary of the comments on the draft management plan made to the director by the groundwater users advisory council pursuant to section 45-421, paragraph 1. Any person may appear at the hearing either in person or by representative and submit oral or documentary evidence for or against the adoption of the management plan.

§ 45-571 Findings upon hearing; order for adoption of management plan; publication

A. Within thirty days after the hearing, the director shall make and file in the department a written summary and findings with respect to matters considered during the hearing.

B. If in the findings the director decides to adopt the management plan, the director shall make and file an order adopting the plan pursuant to the findings. If the director determines that modifications in the management plan are necessary, the director shall make such modifications and make and file an order adopting the modified plan and include the director's reasons for the modifications.

C. A summary of the management plan, findings and order shall be published in the manner and for the length of time prescribed for the publication of notice of the public hearing, and the order is effective when published for the final time. The factual data compiled by the director, a transcript of the hearing, a copy of the findings and a copy of the management plan are public records of the department and shall be available for examination by the public during regular business hours.

D. The findings and order of the director are subject to rehearing or review and to judicial review as provided in section 45-114, subsection C.

§ 45-571.01 Notification to persons filing late applications for certificates of grandfathered rights and to persons with new groundwater rights or uses; compliance; variance; review

A. The director, at the time a certificate of grandfathered right is issued pursuant to the late application procedures in section 45-476.01, shall establish and give written notice of any applicable irrigation water duty or conservation requirement.

B. The director may give written notice at any time of a conservation requirement to a person in the active management area with a right to withdraw, distribute or use groundwater in the active management area pursuant to this chapter, if the right or the use by the person was not in existence when the management plan was adopted. A person given written notice pursuant to this subsection shall comply with the conservation requirement not later than the compliance date specified in the notice.

C. A person given written notice pursuant to subsection A of this section shall comply with the applicable irrigation water duty or conservation requirement not later than January 1 of the calendar year following the first full year after the date of the notice.

D. Except as provided in subsection E of this section, a person who is given notice of an irrigation water duty or conservation requirement pursuant to subsection A or B of this section may request a variance or an administrative review pursuant to sections 45-574 and 45-575. A party aggrieved by the director's decision regarding a request for variance or administrative review may seek judicial review of the final decision of the director as provided in section 45-114, subsection B in the superior court in the county in which the irrigated land or non-irrigation use is located.

E. A person who acquires an interest in land on which groundwater is being used and who is given notice of an irrigation water duty or conservation requirement for the use pursuant to subsection B of this section does not have the right to request an administrative review of the irrigation water duty or conservation requirement pursuant to section 45-575, subsection A if any previous owner of an interest in the land had the right to request an administrative review of the irrigation water duty or conservation requirement. This subsection does not apply if both of the following exist:

The person who is given notice pursuant to subsection B of this section previously owned the land on which the groundwater is being used and title to the land has reverted involuntarily, or voluntarily in lieu of foreclosure, to that person.
The person who is given notice pursuant to subsection B of this section did not previously have the right to request an administrative review of the irrigation water duty or conservation requirement.

§ 45-571.02 Municipal conservation requirements; compliance

A. A municipal provider that has been given notice, in the manner prescribed in section 45-565, subsection B, of a municipal conservation requirement that is substantially identical to an industrial conservation requirement is not required to comply with that municipal conservation requirement respecting an individual user to which one of the following applies:

The individual user was given written notice of the municipal conservation requirement by the director in the manner prescribed in section 45-565, subsection B or section 45-571.01, subsection B.
The individual user was reported by the municipal provider, on a form provided by the department and received by the director at least ninety days before the adoption of the applicable management plan, as being an individual user to which the municipal conservation requirement applies.
The individual user was given written notice of the municipal conservation requirement by the director in the manner prescribed in subsection B of this section, except that the municipal provider shall comply with the municipal conservation requirement until the first date on which the individual user is required to comply with the requirement.

B. If the individual user was not reported by the municipal provider as an individual user to which the municipal conservation requirement applies on a form provided by the department and received by the director at least ninety days before the adoption of the management plan, the director may give written notice of a municipal conservation requirement that is substantially identical to an industrial conservation requirement to that individual user more than thirty days after the adoption of the management plan in which the requirement is established. An individual user that is given written notice pursuant to this subsection shall comply with the conservation requirement not later than January 1 of the calendar year following the first full year after the date of the notice.

§ 45-572 Modification of conservation program; notice

A. After a management plan is adopted, the director may modify the plan after public hearing pursuant to sections 45-570 and 45-571, except that the director may modify an irrigation water duty or conservation requirement only if the director determines that extraordinary circumstances, errors or mistakes justify the modification.

B. Within thirty days after a modification of an irrigation water duty or conservation requirement is adopted, the director shall give written notice of the modification in the manner and to the persons prescribed in section 45-564, subsection B. Any aggrieved person may request an administrative review pursuant to section 45-575.

C. All persons notified pursuant to subsection B of this section shall comply with the modified irrigation water duty or modified conservation requirements not later than the compliance date specified in the modification notice, unless the person obtains a variance pursuant to section 45-574.

D. A management plan is deemed to be modified to the extent the director has established and given written notice of irrigation water duties or conservation requirements pursuant to section 45-571.01.

§ 45-573 Water quality considerations; consultation with department of environmental quality

The director shall consult with the department of environmental quality on water quality considerations in developing and implementing management plans under this article.

§ 45-574 Variances; application; notice; hearing; issuance

A. A person who requires additional time to comply with an irrigation water duty or conservation requirement established pursuant to section 45-565, 45-566, 45-566.01, 45-567, 45-567.01, 45-568 or 45-568.01 may apply to the director for a variance from the water duty or requirement within ninety days from the date of notice of the water duty or requirement. The application shall include the following:

The name and mailing address of the applicant.
The name of the active management area in which the use is located.
The amount of groundwater currently being withdrawn annually by the person.
The irrigation water duty or conservation requirement from which the variance is sought.
A general description of the economic circumstances preventing timely compliance with the irrigation water duty or conservation requirement and any information relevant to such circumstances.
The sworn statement that the information contained in the application is true and correct to the best belief and knowledge of the applicant.
Such other information as the director may require.

B. The director shall give written notice to the applicant of the opportunity for an administrative hearing. An administrative hearing shall be held before the director's decision on the application if the director deems a hearing necessary or a hearing is requested by the applicant.

C. The director may grant a variance upon a showing of compelling economic circumstances. The variance shall specify:

The amount of groundwater which may be withdrawn by the person during the variance period, or a schedule of intermediate water duties or conservation requirements to be reached at specified intervals during the variance period.
The duration of the variance, which may not exceed five years from the date of the director's final determination of the variance.

D. A party aggrieved by the director's decision may seek judicial review of the final decision of the director as provided in section 45-114, subsection B in the superior court in the county in which the irrigated land or non-irrigation use is located.

E. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section. If an administrative hearing is held, it shall be conducted in the active management area in which the use is located.

§ 45-575 Administrative review of irrigation water duty and conservation requirements

A. Any aggrieved party may request an administrative review of an irrigation water duty or conservation requirement established pursuant to section 45-565, 45-566, 45-566.01, 45-567, 45-567.01, 45-568 or 45-568.01. Except as provided in subsection B of this section, the request must be made not later than ninety days from the date of notice of such duty or requirement given thirty days after the adoption of the management plan or if the notice was given pursuant to section 45-566.01, subsection E or 45-571.02, subsection B, not later than ninety days from the date of the notice.

B. An aggrieved person who claims that extraordinary circumstances not in existence as of the date of notice that was given thirty days after adoption of the management plan justify modification of an irrigation water duty or conservation requirement established pursuant to section 45-565, 45-566, 45-566.01, 45-567, 45-567.01, 45-568 or 45-568.01 may request administrative review of the water duty or conservation requirement more than ninety days from the date of notice of the water duty or conservation requirement. The director may modify the water duty or conservation requirement if the aggrieved person demonstrates to the director by clear and convincing evidence that extraordinary circumstances not in existence as of the date of the notice that was given thirty days after adoption of the management plan make it unreasonable to require compliance with a water duty or conservation requirement.

C. The director shall give written notice to the aggrieved party who is requesting an administrative review of the opportunity for an administrative hearing. An administrative hearing shall be held before the director's decision on the application if the director deems a hearing necessary or a hearing is requested by the applicant.

§ 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:

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.
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:

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.
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.
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.
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.
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.
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:

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.
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:

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.

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

§ 45-576.01 Determining consistency with management goal in a replenishment district, conservation district and water district

A. For the purpose of determining whether an assured water supply exists, the director shall find that a groundwater replenishment district member's projected use is consistent with achieving the management goal for the active management area under section 45-576 if:

The land for which a certificate or the city, town or private water company for which a designation is sought is in a groundwater replenishment district established pursuant to title 48, chapter 27.
The director has made either a preliminary determination that has not expired or a final determination that the district's plan for operation is consistent with achieving the management goal according to section 45-576.03, subsection E.
The master replenishment account established pursuant to section 45-858.01 does not have a debit balance that exceeds the cumulative amount of the district's debits accrued during the four preceding calendar years.

B. For the purpose of determining whether an assured water supply exists, the director shall find that a projected use is consistent with achieving the management goal for the active management area under section 45-576 if all of the following apply:

The land for which a certificate is sought is a member land, or the service area of a city, town or private water company for which a designation is sought is a member service area, in a conservation district as provided by title 48, chapter 22, article 4, or the land for which a certificate is sought is a water district member land, or the service area for which a designation is sought is a water district member service area in a water district as provided by title 48, chapter 28, article 7.
The director's most recent determination pursuant to section 45-576.03, subsection M, O or R that the plan for operation submitted by the conservation district or water district is consistent with achieving the management goal for the active management area in which the use is located has not expired.
The conservation district or the water district, whichever is obligated to replenish groundwater on behalf of the land for which a certificate is sought or the service area of a city, town or private water company for which a designation is sought, is currently in compliance with its groundwater replenishment obligation for the active management area in which the use is located, as determined by the director pursuant to section 45-859.01 or 45-860.01.

§ 45-576.02 Replenishment district plans, conservation district plans and water district plans

A. A groundwater replenishment district that is established pursuant to title 48, chapter 27 shall submit to the director:

On or before January 1 of the second calendar year following the year in which the district is established, a preliminary plan describing the activities that the district proposes to undertake during the seventeen calendar years following submittal of the preliminary plan.
On or before January 1 of the twelfth calendar year following the year in which the district is established, a long-range plan describing the district's proposed activities through the first calendar year in which achieving safe-yield is required.

B. The district's plan shall include:

An estimate of the district members' replenishment obligations that will arise during the planning period.
A description of water resources that are expected to be available to the district during the planning period.
A description of any facilities and projects to be used for replenishment during the planning period.
An analysis of potential groundwater replenishment sites in each groundwater subbasin in the district.
A description of the district's financial capabilities and financial requirements that are necessary to address the district members' replenishment obligations during the planning period.
A description of the district's current capability to meet the district members' replenishment obligations for the five calendar years following the calendar year in which the district submits its plan.
Any other information that the director may reasonably require.

C. A conservation district that is established pursuant to title 48, chapter 22 shall submit to the director the following:

On or before June 1, 1994, a plan describing the activities that the conservation district proposes to undertake during the twenty calendar years following submitting the plan. Except as provided in subsection D of this section, the plan shall include the following information for each active management area in which a member land or member service area is or may be located:

(a) An estimate of the conservation district's current and projected groundwater replenishment obligations, as that term is defined and used in title 48, chapter 22, for the twenty calendar years following the submission of the plan.

(b) A description of water resources that are expected to be available to the conservation district for replenishment purposes during the twenty calendar years following the submission of the plan.

(c) A description of any facilities and projects to be used for replenishment purposes during the twenty calendar years following the submission of the plan.

(d) An analysis of potential groundwater replenishment sites in each groundwater subbasin.

(e) A description of the conservation district's financial capabilities and financial requirements that are necessary to address the conservation district's groundwater replenishment obligations during the twenty calendar years following the submission of the plan.

(f) A description of the conservation district's current capability to meet the current and projected groundwater replenishment obligations for the five calendar years following the calendar year in which the conservation district submits the plan.

(g) If a water district has adopted an ordinance or resolution to undertake water district groundwater replenishment obligations pursuant to section 48-4971, subsection A, a description of central Arizona project water that may be available to the water district for replenishment purposes during the twenty calendar years following the submission of the plan.

(h) Any other information that the director may require.

On or before January 1, 2005 and within one year before January 1 of every tenth calendar year thereafter, a plan describing the activities for each active management area that the conservation district proposes to undertake during the one hundred calendar years following submitting the plan. Except as provided in subsection D of this section, the plan shall include the following information for each active management area in which a member land or member service area is or may be located:

(a) The conservation district's groundwater replenishment obligations and the extent to which those obligations have been met in the ten years preceding submittal of the plan.

(b) An estimate of the conservation district's current and projected groundwater replenishment obligations, as that term is defined and used in title 48, chapter 22, for current members for the twenty calendar years following the submission of the plan and an estimate of the district's projected groundwater replenishment obligations for the one hundred calendar years following the submission of the plan for current members and potential members based on reasonable projections of real property and service areas that could qualify for membership in the ten years following the submission of the plan.

(c) A description of the water resources that the conservation district plans to use for replenishment purposes during the twenty calendar years following submission of the plan and water resources potentially available to the conservation district for groundwater replenishment purposes during the subsequent eighty calendar years.

(d) A description of the district’s current replenishment reserve activities in each active management area for the ten years preceding the current plan and planned replenishment reserve activities for the ensuing ten years to be undertaken pursuant to section 48-3772, subsection E.

(e) A description of any facilities and projects to be used for replenishment and the replenishment capacity available to the conservation district during the twenty calendar years following submission of the plan.

(f) An analysis of potential storage facilities that may be used by the conservation district for replenishment purposes.

(g) A description of the conservation district's capability to meet the current and projected groundwater replenishment obligations for the twenty calendar years following the calendar year in which the conservation district submits the plan.

(h) Any other information that the director may require.

D. The information required by subsection C, paragraph 1, subdivisions (b) and (f) and paragraph 2, subdivisions (c) and (g) of this section need not be included in a conservation district's plan if the conservation district demonstrates to the director that it has obtained an allocation of central Arizona project water or other water supplies determined by the director to be consistent with the assured water supply requirements pursuant to section 45-576 in an amount that equals or exceeds the projected groundwater replenishment obligation for the one hundred calendar years following the submission of the plan. If the conservation district demonstrates to the director that it has obtained an allocation of central Arizona project water or other water supplies determined by the director to be consistent with the assured water supply requirements pursuant to section 45-576 in an amount that is less than the projected groundwater replenishment obligation for the one hundred calendar years following the submission of the plan, the information required by subsection C, paragraph 1, subdivisions (b) and (f) and paragraph 2, subdivisions (c) and (g) of this section shall be submitted only for the amount of the obligation in excess of the total amount of the central Arizona project water allocation and other supplies. The director shall quantify the amount of an allocation of central Arizona project water associated with a nondeclining municipal and industrial subcontract on the basis of the amount of the contract. The director shall quantify the amount of an allocation of central Arizona project water associated with a subcontract other than a nondeclining municipal and industrial subcontract on the basis of the reliability of the source.

E. A water district shall submit to the director on or before June 1 of the calendar year following the year in which the water district has adopted an ordinance or resolution to undertake the water district groundwater replenishment obligations under section 48-4971, and on or within one year before each date on which a plan is required to be submitted by the conservation district under subsection C of this section, a plan describing the replenishment activities that the water district proposes to undertake during the twenty calendar years following the submittal of the plan. The plan shall include the following information for the active management area in which the water district is located:

An estimate of the water district's current and projected water district groundwater replenishment obligation, as that term is defined and used in title 48, chapter 28, for the twenty calendar years following the submission of the plan.
A description of water resources that are expected to be available to the water district for replenishment purposes during the twenty calendar years following the submission of the plan.
A description of any facilities and projects to be used for replenishment purposes during the twenty calendar years following the submission of the plan.
An analysis of potential groundwater replenishment sites in each groundwater subbasin.
A description of the water district's financial capabilities and financial requirements that are necessary to address the water district groundwater replenishment obligation during the twenty calendar years following the submission of the plan.
A description of the water district's current capability to meet the current and projected water district groundwater replenishment obligation for the five calendar years following the calendar year in which the water district submits the plan.
Any other information that the director may require.

F. For each plan submitted by the water district, the water district may incorporate applicable portions of the conservation district's plan.

§ 45-576.03 Director's review of plans

A. Within sixty days after receiving a groundwater replenishment district's preliminary and long-range plans pursuant to section 45-576.02, the director shall determine if the district has submitted sufficient information to determine whether the district's plan for operation is consistent with the management goal of the active management area. If the director determines that the information is insufficient for such a determination, the director shall notify the district of the insufficiency in writing and shall specify what additional information is required. The district shall provide the information to the director within thirty days after receiving the notice.

B. On determining that the district's preliminary or long-range plan is complete, the director shall publish notice in a newspaper of general statewide circulation once each week for two consecutive weeks:

Requesting public comment concerning information supplied by the district to meet the requirements of section 45-576.02.
Setting a date and location of a public hearing to be held pursuant to subsection C of this section.

C. The director shall hold a public hearing within sixty days after the last day of notice under subsection B of this section. The hearing shall be conducted in an informal manner without adhering to the rules of evidence required in judicial proceedings. Any person, including the department, shall have an opportunity to comment on or to present evidence concerning the submitted plan.

D. The district shall respond in writing to all public comments whether received at the hearing or otherwise received by a date announced by the director.

E. Within one hundred twenty days after the hearing on the preliminary plan, the director shall issue a preliminary decision determining whether or not the plan for district operation shall be designated as being consistent with achieving the management goal. If the director determines that the preliminary plan for district operation is consistent with achieving the management goal, the designation expires on January 1 of the thirteenth calendar year following the calendar year in which the district is established. Within one hundred twenty days after the hearing on the long-range plan, the director shall issue a final decision determining whether or not the plan for district operation shall be designated as being consistent with achieving the management goal. The director shall include findings with the decision and a summary of all public comments received in writing and public comments made at the public hearing.

F. The director shall issue a decision that the district's plan for operation is consistent with achieving the management goal if the director finds that the district has the current capability to meet the district members' replenishment obligations for the five calendar years following the calendar year in which the district submits its plan and, in addition, the director makes either of the following findings, as applicable:

If the director is evaluating the preliminary plan, that the district has established an adequate plan for obtaining financing and water resources that are necessary to meet the district members' replenishment obligations through the eighteenth calendar year following the year in which the district is established.
If the director is evaluating the long-range plan, that the district has established an adequate plan to meet the projected replenishment obligations through the first calendar year in which achieving safe-yield is required.

G. Unless the district successfully appeals the director's decision pursuant to subsection H of this section, if the director has made a determination that the district's plan for operation is not consistent with achieving the management goal, the director shall notify the district of the inconsistency in writing and shall specify how the district's plan for operation is inconsistent with achieving the management goal. The district shall modify its proposed plan and resubmit the plan, and the director shall review the plan as provided by section 45-576.02 and this section, except that the director shall only hold a hearing regarding those matters that the district has modified in its resubmitted plan.

H. The director's determination under subsection E of this section is subject to rehearing or review and to judicial review as provided in section 45-114, subsection C, but the court shall not issue a temporary restraining order or preliminary injunction to prevent the director from acting under this chapter while the action is pending.

I. Within sixty days after receiving a conservation district's plan or a water district's plan pursuant to section 45-576.02, including a revised plan pursuant to subsection R of this section, the director shall determine if the conservation district or water district, as the case may be, has submitted sufficient information to determine whether the conservation district's plan for operation is consistent with the management goals of each of the active management areas in which a member land or member service area is or may be located or whether the water district's plan for operation is consistent with the management goal of the active management area in which a water district member land or a water district member service area is or may be located. If the director determines that the information is insufficient for such a determination, the director shall notify the conservation district or water district, as the case may be, of the insufficiency in writing and shall specify what additional information is required. The conservation district or water district, as the case may be, shall provide the information to the director within a reasonable time as specified by the director.

J. On determining that the conservation district's plan or the water district's plan, as the case may be, is complete, the director shall publish notice in a newspaper of general statewide circulation once each week for two consecutive weeks:

Requesting public comment concerning information supplied by the conservation district or water district, as the case may be, to meet the requirements of section 45-576.02.
Setting a date and location of a public hearing to be held pursuant to subsection K of this section.

K. The director shall hold a public hearing within sixty days after the last day of the notice under subsection J of this section. The hearing shall be conducted in an informal manner without adhering to the rules of evidence required in judicial proceedings. Any person, including the department, shall have an opportunity to comment on or to present evidence concerning the submitted plan.

L. The conservation district or the water district, as the case may be, shall respond in writing to all public comments whether received at the hearing or otherwise received by a date announced by the director.

M. Within sixty days after the hearing on the first plan required under section 45-576.02, subsection C or the first plan required under section 45-576.02, subsection E and within one hundred twenty days after the hearing on any subsequent plan required under section 45-576.02, subsection C or E, including a revised plan pursuant to subsection R of this section, the director shall issue a decision for each of the active management areas in which a member land or member service area is or may be located, and the active management area in which a water district member land or water district member service area is or may be located, as to whether or not the plan submitted with respect to an active management area is consistent with achieving the management goal of the active management area. The director shall include findings with the decision and a summary of all public comments received in writing and public comments made at the public hearing. If the director's decision includes a determination that the plan submitted for an active management area is consistent with achieving the management goal of that active management area, except as provided in subsection S of this section, the determination expires on December 31 of the year following the year in which the conservation district or the water district, as the case may be, is required to submit its next plan under section 45-576.02, subsections C and E, or the date the director issues a decision determining that the next plan is consistent with achieving the management goal of the active management area, whichever occurs first.

N. The director shall make a determination that the conservation district's plan is consistent with achieving the management goal for each active management area if all of the following have been demonstrated:

The conservation district has identified sufficient water supplies to meet its replenishment obligations for current members during the twenty calendar years following the submission of the plan and has identified additional water supplies potentially available for the district's projected groundwater replenishment obligations for the one hundred calendar years following the submission of the plan for current members and potential members based on reasonable projections of real property and service areas that could qualify for membership in the ten years following the submission of the plan.
The replenishment reserve target for each active management area was calculated as prescribed in section 48-3772, subsection E, and the district is developing a replenishment reserve in each active management area pursuant to section 48-3772, subsection E.
The conservation district has identified sufficient capacity at storage facilities and projects to be used for replenishment purposes during the twenty calendar years following the submission of the plan.
The district has made a reasonable estimate of its projected replenishment obligations for the one hundred calendar years following the submission of the ten year plan as required by section 45-576.02, subsection C, paragraph 2, subdivision (b).

O. The director shall issue a decision that the water district's plan is consistent with achieving the management goal of the active management area in which the water district is located if the director finds that the water district has the current capability to meet the current and projected water district groundwater replenishment obligation, as that term is defined and used in title 48, chapter 28, for the five calendar years following the calendar year in which the water district submits its plan and, in addition, the director finds the water district has established an adequate plan to meet the projected water district groundwater replenishment obligation for the twenty calendar years following the calendar year in which the plan was submitted.

P. Unless the conservation district or water district successfully appeals the director's decision pursuant to subsection Q of this section, if the director finds for one or more active management areas that the conservation district's plan for operation or the water district's plan is not consistent with achieving the management goal of an active management area, the director shall notify the conservation district or water district, as the case may be, of the inconsistency in writing and shall specify how the conservation district's plan for operation or the water district's plan is inconsistent with achieving the management goal. The conservation district or water district, as the case may be, shall modify its proposed plan and resubmit the plan within sixty days after it has been notified in writing of the director's decision, and the director shall review the plan as provided by section 45-576.02 and this section, except that the director shall only hold a hearing regarding those matters that the conservation district or water district, as the case may be, has modified in its resubmitted plan.

Q. The director's decision under subsection M or R of this section is subject to rehearing or review and to judicial review as provided in section 45-114, subsection C, but the court shall not issue a temporary restraining order or preliminary injunction to prevent the director from acting under this chapter while the action is pending.

R. If, at any time between the second anniversary and the eighth anniversary of the director's determination of consistency with the management goal, the director finds that there has been either an unexpected increase in the conservation district's projected groundwater replenishment obligations or an unexpected reduction in water supplies available to meet the conservation district's current obligations such that the conservation district's plan no longer demonstrates consistency with the management goal for one or more active management areas, the director shall require the conservation district to submit a revised plan for operation. The revised plan for operation shall be submitted within one calendar year after the date that the director notifies the conservation district of such a finding, unless the director extends this time for good cause. The director shall review, hold a hearing on and make a decision on the revised plan as provided by this section, except that the director shall only hold a hearing regarding those conditions that have changed.

S. Unless the conservation district successfully appeals the director's decision pursuant to subsection Q of this section, if the director's decision includes a finding for one or more active management areas that the conservation district's revised plan for operation is not consistent with achieving the management goal of that active management area pursuant to this section and the conservation district is unable to satisfy the director's concerns within sixty days after the director has notified the conservation district of the decision, the determination that the district's plan is consistent with the management goal of the active management area shall expire.

§ 45-576.04 Report and review of plans by groundwater replenishment district

A. At least once every five years after the final determination that a groundwater replenishment district's plan for operation is consistent with achieving the management goal of the active management area, the district shall prepare and submit a replenishment report to the director and to the district's board of directors. The replenishment report shall include at least the following:

An estimate of the district members' replenishment obligations that will arise during the following twenty year period.
A description of water resources that will be available to the district during the following twenty year period.
A description of any facilities and projects to be used for replenishment during the following twenty year period.
A description of the district's financial capabilities and financial requirements necessary to address the replenishment obligations during the following twenty year period.
A description of the district's current capability to meet the replenishment obligations for the five calendar years following the calendar year in which the district submits its report.

B. Within thirty days after receiving the district report, the director shall submit written comments to the district. On receiving the director's comments, the district shall publish a notice in a newspaper of general statewide circulation once each week for two consecutive weeks:

Requesting public comment concerning information supplied by the district in the report.
Setting a date and location of a public hearing to be held pursuant to subsection C.

C. Within sixty days after the last day of notice under subsection B, the district shall hold a hearing concerning the report. The hearing shall be conducted in an informal manner without adhering to the rules of evidence required in judicial proceedings. At the hearing, the district shall present a summary of the director's comments and public comments received before the hearing relating to the report. Any person, including the director, shall have an opportunity to present evidence and comments relating to the report.

D. Within ninety days after the hearing, the district shall transmit to the director a summary of all comments and evidence submitted at the hearing relating to the report. The district shall include in this document its written response to all comments it received, including the director's comments.

E. Within one hundred twenty days after the hearing, the district's board of directors shall determine whether to adopt the report. The decision shall be based on the following factors:

Whether the report indicates that the district has sufficient projected replenishment efforts to meet the projected replenishment obligations for the twenty calendar years following the calendar year in which the district submits the report.
Whether the report indicates that the district has the current capability to meet the replenishment obligations for the five calendar years following the calendar year in which the district submits its report.

F. If the district's board of directors does not adopt the report, it shall require that the report be modified to sufficiently address the factors described in subsection E. The board shall adopt the report as modified.

G. On adoption, the board of directors shall transmit a copy of the report to the director and shall make the report and the information described in subsection D available to the general public.

§ 45-576.05 Alternative method for determining consistency with the management goal in a groundwater replenishment district; terminating designation

A. If at any time after January 1 of the calendar year following the year in which a groundwater replenishment district is required to submit its preliminary plan under section 45-576.02, subsection A, paragraph 1 the director determines that one or more of the conditions prescribed in section 45-576.01, subsection A, paragraphs 2 and 3 are not met and for as long as the condition or conditions are not met, the director shall consider only the groundwater replenishment district member's projected supplies of surface water, effluent or groundwater withdrawn outside the active management area in which the district member is located and the amount in a long-term storage account established pursuant to section 45-852.01 in making a determination of whether the district member's projected water use is consistent with the management goal of the active management area under section 45-576.

B. If a groundwater replenishment district member is a municipal provider that was designated as having an assured water supply, and the director determines that one or more of the conditions prescribed by section 45-576.01, subsection A, paragraphs 2 and 3 are no longer met, and until the director again determines that all of those conditions are met, the designation terminates unless the district member reapplies for and the director grants a redesignation pursuant to this subsection. In considering whether to redesignate the district member, the director shall only consider the following in determining whether the district member's projected water use is consistent with the management goal of the active management area pursuant to section 45-576:

The district member's projected supplies of:

(a) Surface water.

(b) Effluent.

The district member's projected supply of groundwater withdrawn in the active management area in which the district member is located up to an amount equal to one hundred times the largest amount of groundwater withdrawn in the active management area by the district member for its customers' use in any calendar year in the five calendar years immediately preceding the year in which the director determines that one of the conditions prescribed by section 45-576, subsection A, paragraphs 2 and 3 is no longer met.
The amount in a district member's long-term storage account established pursuant to chapter 3.1 of this title.

§ 45-576.06 Termination of designation for members of conservation district or members of water district; moratorium on adding new member lands and member service areas

A. After a conservation district has been established under title 48, chapter 22, if one or more of the conditions established under section 45-576.01, subsection B, paragraph 2 or 3 are not met for an active management area with respect to a conservation district and for as long as the condition is not met:

Any municipal provider whose service area is in that active management area and that was designated as having an assured water supply on the basis that its service area is a member service area shall lose its designation. The municipal provider may reapply for and reobtain its designation if the director determines that the municipal provider's projected use is consistent with achieving the management goal of the active management area under section 45-576.
No additional real property in that active management area may become a member land.
No additional service area of a city, town or private water company in that active management area may become a member service area.

B. After a water district has adopted an ordinance or resolution to undertake the water district groundwater replenishment obligations established under title 48, chapter 28, article 7, if one or more of the conditions established under section 45-576.01, subsection B, paragraph 2 or 3 are not met with respect to the water district and for as long as the condition is not met:

Any municipal provider whose service area is in the active management area in which the water district is located and that was designated as having an assured water supply on the basis that its service area is a water district member service area shall lose its designation. The municipal provider may reapply for and reobtain its designation if the director determines that the municipal provider's projected use is consistent with achieving the management goal of the active management area under section 45-576.
No additional real property in that active management area may become a water district member land.
No additional service area of a city, town or private water company in that active management area may become a water district member service area.

C. If the conservation district notifies the director pursuant to section 48-3781, subsection G that a municipal provider that was designated as having an assured water supply on the basis that its service area is a member service area has failed to pay any portion of the required annual replenishment tax assessed under section 48-3781, the director may revoke the municipal provider's designation. The municipal provider may reapply for and reobtain its designation if the director determines that the municipal provider's projected use is consistent with achieving the management goal of the active management area under section 45-576.

D. After a water district has adopted an ordinance or resolution to undertake the water district groundwater replenishment obligations established under title 48, chapter 28, article 7, if the water district notifies the director pursuant to section 48-4982, subsection G that a municipal provider that was designated as having an assured water supply on the basis that its service area is a water district member service area has failed to pay any portion of the required annual replenishment tax assessed under section 48-4982, the director may revoke the municipal provider's designation. The municipal provider may reapply for and reobtain its designation if the director determines that the municipal provider's projected use is consistent with achieving the management goal of the active management area under section 45-576.

§ 45-576.07 Determining water sufficiency and availability; water availability status capability plans

A. For the purposes of determining whether to designate or maintain the designation of a city, town or private water company as having an assured water supply, when the service area of that city, town or private water company has qualified as a member service area of a conservation district pursuant to title 48, chapter 22, article 4, and when the member service area has been granted water availability status by a resolution of the conservation district adopted pursuant to section 48-3772, subsection B, paragraph 10, the director shall find that sufficient groundwater, surface water or effluent will be continuously available to satisfy the water needs of a proposed use for at least one hundred years under section 45-576 if all of the following apply:

The conservation district has committed through the resolution granting water availability status to the city, town or private water company 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.
The director finds that the commitment by the conservation district to replenish the specified average annual volume of water will provide a sufficient supply of water that will be continuously available to satisfy the water needs of the city, town or private water company's proposed use for at least one hundred years.
The director finds that, without the water supply provided through the resolution adopted by the conservation district, the city, town or private water company would be unable to obtain or maintain a designation as having an assured water supply for its current and committed demands beyond 2010.
The director finds that the commitment by the conservation district 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 is consistent with the most recent plan approved by the director pursuant to subsection H of this section.
The director finds that the conservation district or the city, town or private water company has committed to ensure that a five year supply of water will be maintained and available for use by the city, town or private water company in years in which water is not available for replenishment.
The conservation district or the city, town or private water company has obtained all permits necessary to replenish water at the location specified in the resolution, including underground storage facility permits and water storage permits issued under chapter 3.1 of this title.
If the water supply made available to the city, town or private water company through replenishment by the conservation district will serve only a portion of the water needs of the city, town or private water company, the director finds that the city, town or private water company has sufficient groundwater, surface water or effluent that will be continuously available to satisfy the remaining needs of the city, town or private water company for at least one hundred years, in accordance with the rules adopted by the director pursuant to section 45-576, subsection H.
The director has determined pursuant to subsection H of this section that the most recent plan submitted by the conservation district pursuant to this section establishes that the conservation district has the capability to grant water availability status to member service areas.

B. To establish that the conservation district has the capability to grant water availability status to member service areas in an active management area, the conservation district may submit a plan for the active management area to the director that includes all of the following information:

An estimate of the conservation district's current and projected groundwater replenishment obligations, as defined in section 48-3701, for the following one hundred calendar years.
An estimate of the conservation district's current and projected contract replenishment obligations, as defined in section 48-3701, for the following one hundred calendar years.
An estimate of the conservation district's current and projected commitments to member service areas that have or will be granted water availability status by the conservation district.
A description of water resources that are available to the conservation district for use in satisfying the obligations described in paragraphs 1 through 3 of this subsection during the following twenty calendar years.
A description of water resources that are expected to be available to the conservation district for use in satisfying the obligations described in paragraphs 1 through 3 of this subsection during the following one hundred calendar years.
A description of the transportation facilities and available capacity in those facilities to be used in satisfying the obligations described in paragraphs 1 through 3 of this subsection during the following twenty calendar years.
An analysis of potential transportation facilities and available capacity in those facilities that could be used in satisfying the obligations described in paragraphs 1 through 3 of this subsection during the following one hundred calendar years.

C. Within sixty days after receiving the conservation district's plan, the director shall determine if the conservation district has submitted sufficient information to determine whether the conservation district has the capability to grant water availability status to member service areas. If the director determines that the information is insufficient for that determination, the director shall notify the conservation district of the insufficiency in writing and shall specify what additional information is required. The conservation district shall provide the information to the director within a reasonable time as specified by the director.

D. Upon determination that the plan of the conservation district is complete, the director shall publish notice in a newspaper of general statewide circulation once each week for two consecutive weeks:

Requesting public comment concerning information supplied by the conservation district to meet the requirements of subsection B of this section.
Setting a date and location of a public hearing to be held pursuant to subsection E of this section.

E. The director shall hold a public hearing within sixty days after the last day of the notice under subsection D of this section. The hearing shall be conducted in an informal manner without adhering to the rules of evidence in judicial proceedings. Any person, including the department, shall have an opportunity to comment on or to present evidence regarding the submitted plan.

F. The conservation district shall respond in writing to all public comments whether received at the hearing or otherwise received by a date announced by the director.

G. Within sixty days after the hearing on the first plan submitted under subsection B of this section, or within one hundred twenty days after the hearing on any subsequent plan submitted under subsection K of this section, the director shall issue a decision for each of the active management areas in which the conservation district is attempting to establish that the conservation district has the capability to grant water availability status to member service areas.

H. The director shall issue a decision that the conservation district's plan establishes that the conservation district has the capability to grant water availability status to member service areas, if the director finds that the conservation district has the current capability to meet the obligations described in subsection B, paragraphs 1 through 3 for the twenty calendar years following the submission of the plan and if the director finds that the conservation district has established an adequate plan to meet those obligations for the one hundred calendar years following the submission of the plan.

I. Unless the conservation district successfully appeals the director's decision pursuant to subsection J of this section, if the director has made a determination that the conservation district does not have the capability to grant water availability status to member service areas, the director shall notify the conservation district of the insufficiency of the plan in writing and shall specify the insufficiencies of the plan. If, at the time the conservation district receives the insufficiencies of the plan from the director, any member service area has water availability status, the conservation district shall modify and resubmit the plan, and the director shall review the plan as provided in this section, except that the director shall only hold a hearing regarding those matters that the conservation district has modified in its resubmitted plan.

J. The director's determination under subsection H of this section is subject to rehearing or review and to judicial review as provided in section 45-114, subsection C, but the court shall not issue a temporary restraining order or preliminary injunction to prevent the director from acting under this chapter while the action is pending.

K. If the conservation district submits a plan for an active management area to the director pursuant to subsection B of this section, the conservation district shall thereafter, in conjunction with every plan required by section 45-576.02, subsection C, also submit the plan for that active management area described by subsection B of this section. The director shall then review the plan in accordance with subsections C through J of this section. The conservation district shall not be required to submit the plan described in this section for an active management area unless a member service area which has water availability status is located within that active management area.

§ 45-576.08 Pinal active management area; assured water supply; physical availability; exemption; definitions

A. All of the following apply in the Pinal active management area for an application to modify a designation of assured water supply:

Except as provided in subsection B of this section, if the total volume of groundwater and stored water to be recovered outside the area of impact of storage sought to be included in the designation does not exceed the total volume of those sources of water included in the previous designation minus the sum of the volume of groundwater actually withdrawn and the volume of stored water recovered outside the area of impact of storage by the applicant since issuance of the previous designation order:

(a) The director shall not review the physical availability of the groundwater and stored water to be recovered outside of the area of impact of storage sought to be included in the designation.

(b) The physical availability of the groundwater and stored water to be recovered outside the area of impact of storage sought to be included in the designation shall not be grounds for an objection.

Paragraph 1 of this subsection shall not affect the director's review of assured water supply criteria other than the physical availability of groundwater and stored water to be recovered outside the area of impact of storage.
Both of the following are deemed physically available for purposes of an assured water supply designation:

(a) Stored water that is to be recovered by the applicant within the area of impact of storage pursuant to existing long-term storage credits pledged to the designation of assured water supply.

(b) Stored water that is to be recovered by the applicant within the area of impact of storage either on an annual basis pursuant to section 45-851.01 or as long-term storage credits to be earned in the future if the water to be stored meets the physical availability requirements for the water supply under rules adopted pursuant to section 45-576, subsection H.

B. For the calculation prescribed by subsection A of this section, the director shall exclude 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.

C. For the purposes of this section:

"Area of impact of storage" means any of the following:

(a) Within one mile of an existing or proposed underground storage facility where the water to be recovered is or will be stored.

(b) Within the district boundaries of an irrigation district that has a permit for a groundwater savings facility and where the water to be recovered is or will be stored.

(c) An area not described in subdivision (a) or (b) of this paragraph that has been shown to have been positively impacted by the storage of the water to be recovered as demonstrated by a hydrologic model approved by the director.

"Long-term storage credit" has the same meaning prescribed in section 45-802.01.
"Stored water" has the same meaning prescribed in section 45-802.01.

§ 45-576.09 Active management areas; director's authority to change assured water supply rules

Notwithstanding any other law, the director may revise the rules adopted pursuant to section 45-576, subsection H to apply section 45-576.08 to other active management areas.

§ 45-576.10 Waterlogged area; assured water supply; designation

A. On application to the department by a city or town, the director may designate a portion of a city or town that is located both in the area delineated for exemption under section 45-411.01 and in the Phoenix active management area as having an assured water supply if all of the following apply:

The portion of the city or town seeking an assured water supply designation is located entirely within an irrigation and water conservation district established pursuant to title 48, chapter 19.
The city or town seeking an assured water supply designation has contracted with the irrigation and water conservation district for a term of not less than one hundred years under which the city or town will receive water that the landowners in the district have the right to use on their lands and will treat and deliver the water for exclusive use on irrigation and conservation district lands for municipal use.
Sufficient surface water or effluent of an adequate quality will be continuously available to satisfy the portion of a city's or town's proposed water needs for not less than one hundred years.
The city or town demonstrates the financial capability to construct the water facilities, including delivery systems, storage facilities and treatment works, necessary to make the supply of water available for the proposed use. The director may accept evidence of the construction assurances required by section 9-463.01, 11-822 or 32-2181 to satisfy this requirement.

B. For the purposes of this section and within an exemption area established pursuant to section 45-411.01:

The director may review the determination that a portion of a city or town has an assured water supply.
The director may determine that a portion of a city or town does not have an assured water supply.

§ 45-577 Application; hydrological study; review of application

A. The director shall prescribe the form of application for a certificate of assured water supply, to include, as applicable:

The legal description of the land.
The plats, plans and maps of the proposed development.
Information on the nature and magnitude of the proposed development, including the number of parcels, lots or dwelling units and the annual amount of water which will be required.
Evidence of contracts for the delivery of water and information relating to the terms of the contracts.
If groundwater is a proposed source of water:

(a) Evidence of ownership of any grandfathered rights pursuant to which groundwater may be withdrawn for the proposed development.

(b) The legal description of the location of any existing wells from which the applicant proposes to withdraw groundwater or the proposed location of new wells.

Evidence of the right to use surface water pursuant to chapter 1, article 4 of this title, pursuant to a judicial decree or pursuant to a right established prior to 1919.
Financing arrangements for the development and evidence of financial capability to construct the delivery system and any treatment works necessary to make the supply of water available for the proposed use.
A sworn statement that the information contained in the application is true and correct to the best knowledge and belief of the applicant.
Any other information which the director may require.

B. If groundwater is a proposed source of water, the applicant shall submit with the application for a certificate of assured water supply a copy of a hydrological study on the groundwater resources that demonstrates an assured supply for the proposed use. The director shall prescribe the contents of the study which is to be submitted with the application.

C. The director shall review and evaluate the application. The director may request additional information from the applicant and conduct independent investigations as may be necessary to determine whether an assured water supply exists.

§ 45-578 Notice; objections; hearing; issuance of certificate; appeals

A. The director shall give notice of the application for a certificate of assured water supply once each week for two consecutive weeks in a newspaper of general circulation in the active management area in which the applicant proposes to use water. The first publication shall occur within fifteen days after the application is determined complete and correct or at any earlier time as the applicant may request after the application is determined 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 complete and correct or at any earlier time as the applicant may request after the modified application is determined complete.

B. Notice pursuant to subsection A of this section shall state that objections to the issuance of the certificate may be filed by residents of the active management area, in writing, with the director within fifteen days after the last publication of notice. An objection shall state the name and mailing address of the objector, be signed by the objector, the objector's agent or the objector's attorney and clearly set forth reasons why the certificate should not be issued. The grounds for objection are limited to whether the certificate application meets the criteria for determining an assured water supply set forth in section 45-576, subsection I.

C. In appropriate cases, including cases where a proper written objection to the certificate 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. The director, thirty days prior to the date of the hearing, shall give notice of the hearing to the applicant and to any person who filed a proper written objection to the issuance of the certificate. The hearing shall be scheduled for not less than sixty days nor more than ninety days after the expiration of the time in which to file objections.

D. Upon finding that an assured water supply exists for the proposed use, the director shall issue a certificate of assured water supply to the applicant. Upon finding that an assured water supply does not exist, the director shall deny the application and return it to the applicant.

E. An aggrieved party or a person who contested a certificate 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.

F. If the application for a certificate of assured water supply is for land that has qualified as a member land under title 48, chapter 22, the director shall notify the conservation district when a certificate of assured water supply is issued and shall report the total projected average annual replenishment obligation at build-out for each plat under the certificate. On or before January 1, 2005, the director shall provide a written report to the conservation district indicating the total projected average annual replenishment obligation at build-out for each plat under certificates of assured water supply issued for land that qualified as member land under title 48, chapter 22 before January 1, 2004.

§ 45-579 Assignment of certificate of assured water supply; definition

A. A holder of a certificate of assured water supply issued pursuant to section 45-576 may assign the certificate, in whole or in part, to another person if the holder applies to the director for approval within ten years after the original certificate was issued and the director approves the application. An application may be filed under this section more than ten years after the original certificate was issued if a minimum of five hundred lots within the subdivision covered by the certificate have been sold to individual home buyers by the holder of the certificate and any previous holders of the certificate. An application filed under this section shall be on a form prescribed by the director. The director shall approve a timely application for assignment of a certificate of assured water supply if the director determines that all of the following apply:

The proposed assignee owns or is acquiring the subdivision to which the current certificate applies, or if the application is for a partial assignment, the portion of the subdivision to which the current certificate applies that is the subject of the proposed assignment.
There has not been any material change in the subdivision plat, plan or map since the certificate was originally issued, including an increase in the total water demand for the subdivision, including all assignments. For the purpose of this paragraph, a change in the total number of housing units or lots does not constitute a material change in a subdivision plat, plan or map if there is a reduction in the total water demand for the subdivision.
Either there is water delivery infrastructure in place that is capable of delivering water to each lot within the subdivision or the proposed assignee has demonstrated financial capability to complete the infrastructure. In determining whether the proposed assignee has demonstrated financial capability to complete the infrastructure, the director shall apply the same standards that are used in evaluating financial capability for a new certificate application.
The water provider serving the subdivision and the source of supply have not changed since the current certificate was issued and the water provider has agreed to serve the subdivision after the assignment.
Water rights, permits, licenses, contracts and easements other than the municipal provider’s service area rights at the time the current certificate was issued have been assigned and may be used to support water service to the portion of the subdivision that is the subject of the assignment and to any remaining portions of the subdivision that are retained by the subdivider.
There has not been any change in the manner in which the consistency with management goal requirements were satisfied at the time the original certificate was issued.

B. After a change of ownership has occurred and on approval of an assignment, the director shall issue a certificate of assured water supply in the name of the assignee, retaining the date of the original certificate as the date of issuance.

C. In the case of a partial assignment, the director shall issue a certificate in the name of the assignee for the portion of the subdivision that is the subject of the proposed assignment, and shall issue a certificate in the name of the assignor for the portion of the subdivision retained, each with the date of the original certificate as the date of issuance. The new certificates shall include all water demand for the subdivision represented by the current certificate. The allocation of demand between the certificates shall be based on a reasonable plan for allocation of the total subdivision demand as approved by the director.

D. Section 45-578 does not apply to an application filed under this section. Section 45-114, subsections A and B govern administrative proceedings, rehearing and review and judicial review of final decisions of the director under this section. If an administrative hearing is held, it shall be conducted in the active management area in which the use is located.

E. Within two business days after receiving an application under subsection A of this section, the director shall post notice of the application on the department's website until the director issues a decision on the application. The notice shall include notice of the right to submit comments on the application as provided in this subsection, including a toll free number where comments may be submitted by telephone and the addresses where comments may be submitted by United States mail, electronic mail and hand delivery. Any person may submit comments on the application within fourteen calendar days after the first day that notice of the application is posted on the department's website. The director shall consider all timely comments submitted on the application before issuing a decision on the application. Within two business days after issuing a decision on the application, the director shall post notice of the decision on the department's website for a minimum of fourteen days. Notwithstanding title 41, chapter 6, article 10 and section 45-114, a person who submits comments on an application pursuant to this subsection is not a party for purposes of title 41, chapter 6, article 10, is not entitled to an administrative hearing before or after the director's decision on the application and is not entitled to judicial review of the director's decision.

F. For the purposes of this section, "original certificate" means the initial certificate of assured water supply that is issued by the director for a subdivision.

§ 45-579.01 Certificate of assured water supply; material change; plat

For the purpose of determining whether changes to a plat for which a certificate has been issued in an active management area are material under rules adopted pursuant to section 45-576, subsection H, the director shall not consider any change in the number of housing units or lots if there is a reduction in the total water demand for the subdivision.

§ 45-580 Assured and adequate water supply administration fund; purpose

A. The assured and adequate water supply administration fund is established consisting of the fees that are paid to the department for applications relating to adequate and assured water supply pursuant to sections 45-108, 45-576 and 45-579 and that are established by the director pursuant to section 45-113, subsection B. The department shall administer the fund. Monies in the fund are subject to appropriation and shall be used by the department for the costs and expenses of the department in administering sections 45-108, 45-576 and 45-579.

B. The director shall deposit, pursuant to sections 35-146 and 35-147, all fees received pursuant to subsection A of this section in the fund. The fund shall be a separate account on the books of the department. Monies remaining in the fund at the end of the fiscal year remain in the fund and are exempt from the provisions of section 35-190 relating to the lapsing of appropriations. On notice from the director, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.

Article 10 Wells

§ 45-591 Definitions

In this article, unless the context otherwise requires:

"Existing well" means a well which was drilled before June 12, 1980 and which is not abandoned or sealed or a well which was not completed on June 12, 1980 but for which a notice of intention to drill was on file with the Arizona water commission on such date.
"New well" means a well for which a notice of intention to drill or a permit is required pursuant to this article or which is drilled pursuant to a permit issued under section 45-834.01.

§ 45-591.01 Oil, gas, helium and geothermal wells; exemption

Wells drilled for oil, gas or helium pursuant to the provisions of title 27 are not wells as defined in this chapter. The director, by rule or regulation, may exempt exploration wells from any requirement of this article that the director determines is not necessary for the protection of groundwater. Geothermal wells drilled pursuant to the provisions of title 27 are not wells as defined in this chapter when the director finds that the rules and regulations of the oil and gas conservation commission require the reinjection of all waters associated with the geothermal resource to the producing strata.

§ 45-592 Wells in general

A. A person may construct, replace or deepen a well in this state only pursuant to this article and section 45-834.01. The drilling of a well may not begin until all requirements of this article and section 45-834.01, as applicable, are met.

B. The director may adopt temporary rules to allow a person to construct, replace or deepen a well prior to the adoption of final rules pursuant to this article.

§ 45-593 Registration of existing wells; permanent record of all wells; reporting open wells

A. On or before June 12, 1982, a person who owns an existing well which is or has been used to withdraw or monitor water shall register the well on a registration form provided by the director. The registration form shall include:

The registration number of any well previously required to be registered in this state before June 12, 1980.
The legal description of the land upon which the well is located, the location of the well on the land and the name and mailing address of the owner of the land.
The depth, diameter and type of casing of the well.
Such legal description of the land upon which the groundwater is being used as may be required by the director to administer this chapter.
The maximum pumping capacity of the well.
Any other information which the director may require.

B. The director shall assign a registration number to each well registered pursuant to this section and to all other wells drilled pursuant to this chapter and shall maintain a permanent record of registration numbers and all other information on new and existing wells pursuant to this chapter and previous law.

C. The person to whom a well is registered shall notify the director of a change in ownership of the well, and the new owner shall furnish information as required by the director to keep the department's well registration records current and accurate.

D. Within thirty days after a change of ownership of real property, the new owner shall notify the director in writing of the existence of any open well or wells on the property which the new owner has discovered. Thereafter, the owner shall report the existence of any open well on the property within ten days after the owner discovers the well.

E. This article shall not be construed to legalize any well existing on June 12, 1980, the effective date of this article, which was not in accordance with prior statutory law.

§ 45-594 Well construction standards; remedial measures

A. The director shall adopt rules establishing construction standards for new wells and replacement wells, the deepening and abandonment of existing wells and the capping of open wells.

B. All well construction, replacement, deepening and abandonment operations shall comply with the rules adopted pursuant to this section. A well owner shall cap an open well according to the rules adopted pursuant to subsection A.

C. If the director determines that a well is not capped in compliance with the rules adopted pursuant to subsection A, that the well is dangerous to property or public health or safety and that there is not sufficient time to issue and enforce an order relative to its capping, the director may employ remedial measures necessary to protect property or public health or safety. The remedial measures may include remaining in full charge and control of the well site until the well has been rendered safe and capping the well. This subsection does not relieve an owner or operator of a well from the legal duties, obligations and liabilities arising from such ownership or operation.

§ 45-595 Well construction requirements; licensing of well drillers

A. New well construction, including modifications of wells, shall be performed under the direct and personal supervision of a well driller who holds a well driller's license pursuant to subsection B of this section.

B. A person who intends to construct or modify one or more wells in this state shall file an application for a well driller's license with the director. The application shall include:

The name, mailing address and place of business of the applicant.
The applicant's experience and qualifications.
Such other information as the director may require.

C. The director, by rule, shall establish qualifications and a reasonable fee of not more than fifty dollars for licenses for well drillers and establish procedures for the evaluation and licensing of applicants. A nontransferable well driller's license shall be issued if the director finds that the applicant meets the qualifications established pursuant to this subsection. The director may revoke a well driller's license for good cause.

D. A person who drills or modifies an exempt well on land owned by that person shall first obtain a single well license from the department. The department shall issue the license to drill the well according to standard small well construction standards. No fee may be charged for a single well license.

E. The director shall deposit, pursuant to sections 35-146 and 35-147, all fees received under this section in the water resources fund established by section 45-117.

§ 45-596 Notice of intention to drill; fee

A. In an area not subject to active management, a person may not drill or cause to be drilled any well or deepen an existing well without first filing notice of intention to drill pursuant to subsection C of this section or obtaining a permit pursuant to section 45-834.01. Only one notice of intention to drill is required for all wells that are drilled by or for the same person to obtain geophysical, mineralogical or geotechnical data within a single section of land.

B. In an active management area, a person may not drill or cause to be drilled an exempt well, a replacement well in approximately the same location or any other well for which a permit is not required under this article, article 7 of this chapter or section 45-834.01 or deepen an existing well without first filing a notice of intention to drill pursuant to subsection C of this section. Only one notice of intention to drill is required for all wells that are drilled by or for the same person to obtain geophysical, mineralogical or geotechnical data within a single section of land.

C. A notice of intention to drill shall be filed with the director on a form that is prescribed and furnished by the director and that shall include:

The name and mailing address of the person filing the notice.
The legal description of the land on which the well is proposed to be drilled and the name and mailing address of the owner of the land.
The legal description of the location of the well on the land.
The depth, diameter and type of casing of the proposed well.
Such legal description of the land on which the groundwater is proposed to be used as may be required by the director to administer this chapter.
When construction is to begin.
The proposed uses to which the groundwater will be applied.
The name and well driller's license number of the well driller who is to construct the well.
The design pumping capacity of the well.
If for a replacement well, the maximum capacity of the original well and the distance of the replacement well from the original well.
Proof that the director determines to be satisfactory that the person proposing to construct the well holds a valid license issued by the registrar of contractors pursuant to title 32, chapter 10 and that the license is of the type necessary to construct the well described in the notice of intention to drill. If the proposed well driller does not hold a valid license, the director may accept proof that the proposed well driller is exempt from licensing as prescribed by section 32-1121.
If any water from the proposed well will be used for domestic purposes as defined in section 45-454, evidence of compliance with the requirements of subsection F of this section.
If for a second exempt well at the same location for the same use pursuant to section 45-454, subsection I, proof that the requirements of that subsection are met.
If for a well to obtain geophysical, mineralogical or geotechnical data within a single section of land, the information prescribed by this subsection for each well that will be included in that section of land before each well is drilled.
Such other information as the director may require.

D. On receiving a notice of intention to drill and the fee required by subsection L of this section, the director shall endorse on the notice the date of its receipt. The director shall then determine whether all information that is required has been submitted and whether the requirements of subsection C, paragraphs 11 and 12 and subsection I of this section have been met. If so, within fifteen days of receipt of the notice, or such longer time as provided in subsection J of this section, the director shall record the notice, mail a drilling card that authorizes the drilling of the well to the well driller identified in the notice and mail written notice of the issuance of the drilling card to the person filing the notice of intention to drill at the address stated in the notice. On receipt of the drilling card, the well driller may proceed to drill or deepen the well as described in the notice of intention to drill. If the director determines that the required information has not been submitted or that the requirements of subsection C, paragraphs 11 and 12 or subsection I of this section have not been met, the director shall mail a statement of the determination to the person giving the notice to the address stated in the notice, and the person giving the notice may not proceed to drill or deepen the well.

E. The well shall be completed within one year after the date of the notice unless the director approves a longer period of time pursuant to this subsection. If the well is not completed within one year or within the time approved by the director pursuant to this subsection, the person shall file a new notice before proceeding with further construction. At the time the drilling card for the well is issued, the director may provide for and approve a completion period that is greater than one year but not to exceed five years from the date of the notice if both of the following apply:

The proposed well is a nonexempt well within an active management area and qualifies as a replacement well in approximately the same location as prescribed in rules adopted by the director pursuant to section 45-597.
The applicant has submitted evidence that demonstrates one of the following:

(a) This state or a political subdivision of this state has acquired or has begun a condemnation action to acquire the land on which the original well is located.

(b) The original well has been rendered inoperable due to flooding, subsidence or other extraordinary physical circumstances that are beyond the control of the well owner.

F. If any water from a proposed well will be used for domestic purposes as defined in section 45-454 on a parcel of land of five or fewer acres, the applicant shall submit a well site plan of the property with the notice of intention to drill. The site plan shall:

Include the county assessor's parcel identification number.
Show the proposed well location and the location of any septic tank or sewer system that is either located on the property or within one hundred feet of the proposed well site.
Show written approval by the county health authority that controls the installation of septic tanks or sewer systems in the county, or by the local health authority in areas where the authority to control installation of septic tanks or sewer systems has been delegated to a local authority. In areas where there is no local or county authority that controls the installation of septic tanks or sewer systems, the applicant shall apply for approval directly to the department of water resources.

G. Before approving a well site plan submitted pursuant to subsection F of this section, the county or local health authority or the department of water resources, as applicable, pursuant to subsection F of this section, shall review the well site plan and determine whether the proposed well location complies with applicable local laws, ordinances and regulations and any laws or rules adopted under this title and title 49 regarding the placement of wells and the proximity of wells to septic tanks or sewer systems. If the health authority or the department of water resources, as applicable, pursuant to subsection F of this section, finds that the proposed well location complies with this title and title 49 and with local requirements, it shall endorse the site plan and the proposed well placement in a manner indicating approval. On endorsement, the director of water resources shall approve the construction of the well, if all remaining requirements have been met. If the health authority is unable to determine whether the proposed well location complies with this title and title 49 and local requirements, it shall indicate this on the site plan and the decision to approve or reject the proposed construction rests with the director of water resources. If parcel size, geology or location of improvements on the property prevents the well from being drilled in accordance with this title and title 49 or local requirements, the property owner may apply for a variance. The property owner shall make the request for a variance to the county or local authority if a county or local law, ordinance or regulation prevents the proposed construction. If a law or rule adopted under this title or title 49 prevents the proposed construction, the property owner shall make the request for a variance directly to the department of water resources. The request for a variance shall be in the form and shall contain the information that the department of water resources, county or local authority may require. The department of water resources, or the county or local authority whose law, ordinance or regulation prevents the proposed construction, may expressly require that a particular variance shall include certification by a registered professional engineer or geologist that the location of the well will not pose a health hazard to the applicant or surrounding property or inhabitants. If all necessary variances are obtained, the director of water resources shall approve the construction of the well if all remaining requirements have been met.

H. If a well that was originally drilled as an exploration well, a monitor well or a piezometer well or for any use other than domestic use is later proposed to be converted to use for domestic purposes as defined in section 45-454, the well owner shall file a notice of intention to drill and shall comply with this section before the well is converted and any water from that well is used for domestic purposes.

I. Except as prescribed in subsection K of this section, the director shall not approve the drilling of the well if the director determines that the well will likely cause the migration of contaminated groundwater from a remedial action site to another well, resulting in unreasonably increasing damage to the owner of the well or persons using water from the well. In making this determination, the director of water resources shall follow the applicable criteria in the rules adopted by the director of water resources pursuant to section 45-598, subsection A and shall consult with the director of environmental quality. For the purposes of this subsection:

"Contaminated groundwater" means groundwater that has been contaminated by a release of a hazardous substance, as defined in section 49-201, or a pollutant, as defined in section 49-201.
"Remedial action site" means any of the following:

(a) The site of a remedial action undertaken pursuant to the comprehensive environmental response, compensation, and liability act of 1980, as amended (P.L. 96-510; 94 Stat. 2767; 42 United States Code sections 9601 through 9657), commonly known as "superfund".

(b) The site of a corrective action undertaken pursuant to title 49, chapter 6.

(d) The site of a remedial action undertaken pursuant to title 49, chapter 2, article 5, including mitigation of a nonhazardous release undertaken pursuant to an order issued by the department of environmental quality pursuant to section 49-286.

(e) The site of a remedial action undertaken pursuant to the resource conservation and recovery act of 1976 (P.L. 94-580; 90 Stat. 2795; 42 United States Code sections 6901 through 6992).

(f) The site of remedial action undertaken pursuant to the department of defense environmental restoration program (P.L. 99-499; 100 Stat. 1719; 10 United States Code section 2701).

J. Except as prescribed in subsection K of this section, the director shall approve or deny the drilling of a well within forty-five days after receipt of the notice of intention to drill if one of the following applies:

The proposed well is located within a remedial action site.
The proposed well is located within one mile of any of the following remedial action sites:

(a) A remedial action undertaken pursuant to title 49, chapter 2, article 5, including mitigation of a nonhazardous release undertaken pursuant to an order issued by the department of environmental quality pursuant to section 49-286.

(b) A remedial action undertaken pursuant to the comprehensive environmental response, compensation, and liability act of 1980, as amended (P.L. 96-510; 94 Stat. 2767; 42 United States Code sections 9601 through 9657), commonly known as "superfund".

(c) A remedial action undertaken pursuant to the department of defense environmental restoration program (P.L. 99-499; 100 Stat. 1719; 10 United States Code section 2701).

The proposed well is located within one-half mile of either of the following remedial action sites:

(a) A remedial action undertaken pursuant to title 49, chapter 1, article 5.

(b) A remedial action undertaken pursuant to the resource conservation and recovery act of 1976 (P.L. 94-580; 90 Stat. 2795; 42 United States Code sections 6901 through 6992).

The proposed well is located within five hundred feet of the site of a corrective action undertaken pursuant to title 49, chapter 6.

K. Subsections I and J of this section do not apply to the deepening of a well or to the drilling of a replacement well in approximately the same location.

L. A notice of intention to drill filed under this section shall be accompanied by a filing fee of one hundred fifty dollars, except that a notice filed for a proposed well that will not be located within an active management area or an irrigation nonexpansion area, that will be used solely for domestic purposes as defined in section 45-454 and that will have a pump with a maximum capacity of not more than thirty-five gallons per minute shall be accompanied by a filing fee of one hundred dollars. The director shall deposit, pursuant to sections 35-146 and 35-147, all fees collected pursuant to this subsection in the well administration and enforcement fund established by section 45-606.

§ 45-596.01 Additional information required with notice of intention to drill well to pump Colorado River water; exception

(Conditionally Eff.)

In addition to the information required by section 45-596, a person who files a notice of intention to drill a well that will pump Colorado River water shall include with the notice proof that the director determines to be satisfactory that the person has the legal right to use Colorado river water. This section does not apply to a proposed well that will have a pump with a maximum capacity of not more than thirty-five gallons per minute and that will be used for the supply, service and activities of households and private residences, including the application of water to less than two acres of land to produce plants or parts of plants for sale or human consumption or for use as feed for livestock, range livestock or poultry, as those terms are defined in section 3-1201.

§ 45-597 Deepening and replacement of wells in active management areas; filing of notice

A. A person entitled to withdraw groundwater in an active management area or a person entitled to recover stored water pursuant to section 45-834.01 may deepen an existing well or construct a replacement well at approximately the same location. The director shall by rule define what constitutes a replacement well, including the distance from the original well site that is deemed to be the same location for a replacement well.

B. Prior to deepening an existing well or constructing a replacement well at approximately the same location, the person shall file a notice of intention to drill pursuant to section 45-596 and provide the director with any other information as the director may by rules require.

§ 45-598 New wells and replacement wells in new locations in active management areas; rules; permit required

A. The director shall adopt rules governing the location of new wells and replacement wells in new locations in active management areas to prevent unreasonably increasing damage to surrounding land or other water users from the concentration of wells.

B. A person entitled to withdraw groundwater in an active management area pursuant to article 5 or 6 of this chapter may construct a new well or a replacement well in a new location if the location of the new well or the replacement well complies with the rules adopted by the director pursuant to subsection A of this section and if the person has applied for and received a permit from the director pursuant to section 45-599.

C. An applicant for a general industrial use permit pursuant to sections 45-515 and 45-521 who proposes to construct a new well or a replacement well in a new location shall also apply for a permit pursuant to section 45-599.

D. A person who is entitled to withdraw groundwater in an active management area under article 5 or 6 of this chapter may withdraw groundwater under article 5 or 6 of this chapter from a well drilled to withdraw groundwater pursuant to a groundwater withdrawal permit issued under article 7 of this chapter if the location of the well complies with the rules adopted by the director under subsection A of this section and if the person has applied for and received a permit from the director pursuant to section 45-599. A person entitled to withdraw groundwater in an active management area under a general industrial use permit issued under section 45-515 may withdraw groundwater under section 45-515 from a well used to withdraw groundwater pursuant to another category of groundwater withdrawal permit issued under article 7 of this chapter if the location of the well complies with the rules adopted by the director under subsection A of this section and if the person has applied for and received a permit from the director pursuant to section 45-599.

§ 45-599 Permit application; contents; correction of defective application; issuance of permit; fee

A. An application for a permit to construct a new well or replacement well in a new location shall be made on a form that is prescribed and furnished by the director and that includes:

The name and mailing address of the applicant.
The legal description of the land upon which the new well is proposed to be constructed and the name and mailing address of the owner of the land.
The legal description of the proposed location of the new well on the land.
If for a replacement well, the legal description of the land upon which the original well is located, the name and mailing address of the owner of the land, the legal description of the location of the original well on the land, the depth and diameter of the original well and evidence of proper abandonment.
The depth, diameter and type of casing of the new well.
Such legal description of the land upon which the groundwater is proposed to be used as may be required by the director to administer this chapter.
When construction is to begin.
The proposed use of the groundwater to be withdrawn.
The design pumping capacity of the new well.
The name and well driller's license number of the well driller who is to construct the well.
The estimated time required to complete the well, if more than one year from the date of receipt of the permit.
Such other information including any maps, drawings and data as the director may require.

B. Upon receipt of a permit application and the fee required by subsection J of this section, the director shall endorse on the application the date of its receipt. If the application is incorrect or incomplete, the director may request additional information from the applicant. The director may conduct independent investigations as may be necessary to determine whether the application should be approved or rejected.

C. The director shall approve an application for a permit for a new well or a replacement well in a new location if the proposed well complies with the rules adopted pursuant to section 45-598, subsection A and, if the proposed well is in the Santa Cruz active management area, if the location of the proposed well is consistent with the management plan for the active management area.

D. Except as provided in subsection E of this section, within sixty days of receipt of a complete and correct application and the fee required by subsection J of this section, the director shall approve or reject the application and mail notice of the action to the applicant.

E. If the director determines that an administrative hearing should be held before approving or rejecting an application, the director shall notify the applicant of the date of the hearing within sixty days of receipt of the complete and correct application and the fee required by subsection J of this section.

F. If at the request of the applicant the director determines that an emergency exists, the director shall expedite all decisions under this section.

G. If the application is approved, the director shall issue a permit and the applicant may proceed to construct the well. If the application is rejected, the applicant shall not proceed with construction of the well. The well shall be completed within one year of receipt of the permit, unless the director in granting the permit approves a longer period to complete the well. If the well is not completed within one year or the longer period approved by the director, the applicant shall file a new application before proceeding with construction.

H. The permit shall state the following:

The legal description of the land upon which the well may be constructed.
The legal description of the location of the new well on the land.
The depth and diameter of the well and type of casing.
The maximum pumping capacity of the well.
The legal description of the land upon which the groundwater will be used.
The use of the groundwater to be withdrawn.
The latest date for completing the well.

I. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section. If an administrative hearing is held, it shall be conducted in the active management area in which the use is located.

J. An application for a permit filed under this section shall be accompanied by a filing fee of one hundred fifty dollars. The director shall deposit, pursuant to sections 35-146 and 35-147, all fees collected pursuant to this subsection in the well administration and enforcement fund established by section 45-606.

§ 45-600 Filing of report by driller; filing of completion report

A. A well driller shall maintain a complete and accurate log of each well drilled. Within thirty days of completion of the drilling of any well in this state, the driller shall file a well driller report with the director which shall include all information contained in the log of the well, including information on the casing of the well and, if the well is an artesian well, the capping. The director shall prescribe well driller report forms and the department shall furnish them on request.

B. Within thirty days after the installation of pumping equipment in any well in this state, the registered well owner shall file a completion report with the director. The director shall prescribe the completion report form and the department shall furnish them on request. The completion report form shall include:

The type of equipment installed.
Tested pumping capacity of the well in gallons per minute as determined for a non-flowing well by measuring the discharge of the pump after continuous operation for at least four hours, or for a flowing well by measuring the natural flow at the land surface.
Drawdown of the water level measured in feet for a non-flowing well after not less than four hours of continuous operation and while still in operation, or for a flowing well, the shut-in pressure measured in feet above the land surface or in pounds per square inch at the land surface.
Depth in feet from the land surface to the static groundwater level, measured immediately prior to the well-capacity test.
Such other information as the director may require.

§ 45-601 Operating rules for multiple wells

The director may adopt rules governing pumping patterns of persons who withdraw groundwater or recover stored water, as defined in section 45-802.01, from multiple wells in an active management area to minimize damage to adjacent groundwater users. The director may not require a person who withdraws groundwater or recovers stored water from multiple wells to change the person's pumping patterns if the person or user cannot reasonably accommodate such changes.

§ 45-602 Capping of wells; waste

A. Groundwater which has been withdrawn shall not be allowed to waste. To effectuate the purposes of this section, the director shall:

Require all flowing wells to be capped or equipped with valves so that the flow of water can be completely stopped when not in use.
Require both flowing and non-flowing wells to be constructed and maintained so as to prevent waste of groundwater through leaky casing, lack of casings, pipes, fittings, valves or pumps, either above or below the surface of the ground.

B. The reasonable withdrawal of groundwater for development, testing or repair of a well or the inadvertent loss of water due to breakage of a pump, valve, pipe or fitting is not waste if reasonable diligence is shown in effecting the necessary repairs.

§ 45-603 Criteria for rules and regulations

In developing rules and regulations under this article, the director shall consider, among other things, water quality, cones of depression and land subsidence.

§ 45-604 Water measuring devices

A. Except as provided in subsections B, C and D of this section, a person who withdraws groundwater from a nonexempt well in an active management area or an irrigation non-expansion area, a person who withdraws water from a non-exempt well in the Santa Cruz active management area or a person who withdraws groundwater for transportation to an initial active management area pursuant to article 8.1 of this chapter shall use a water measuring device approved by the director.

B. A person who holds a type 2 non-irrigation grandfathered right or a groundwater withdrawal permit in the amount of ten or fewer acre-feet per year is not required to use a water measuring device to measure withdrawals pursuant to that grandfathered right or groundwater withdrawal permit unless the person holds more than one such right or permit in the aggregate amount of more than ten acre-feet per year and withdraws more than ten acre-feet of groundwater per year pursuant to those rights or permits from one well.

C. In an irrigation non-expansion area:

A person who withdraws ten or fewer acre-feet of groundwater per year from a non-exempt well for a non-irrigation use is not required to use a water measuring device to measure withdrawals from that well.
A person who withdraws groundwater from a non-exempt well for an irrigation use is not required to use a water measuring device to measure withdrawals from that well if both of the following apply:

(a) Groundwater withdrawn from the well for an irrigation use is used only on land that is owned by a person who has the right under section 45-437 to irrigate ten or fewer contiguous acres at the place of the use.

(b) Groundwater withdrawn from the well is not used on land that is part of an integrated farming operation.

D. In an active management area, a person, other than an irrigation district, who withdraws groundwater from a non-exempt well for use pursuant to an irrigation grandfathered right that is appurtenant to ten or fewer irrigation acres is not required to use a water measuring device to measure withdrawals from that well unless groundwater withdrawn from the well is also used pursuant to either a service area right pursuant to article 6 of this chapter or a grandfathered groundwater right other than an irrigation grandfathered right that is appurtenant to irrigation acres that are exempt from irrigation water duties pursuant to section 45-563.02.

E. The director shall adopt rules setting forth the requirements and specifications for water measuring devices.

§ 45-605 Well inspections; cross-contamination; remedial measures; definition

A. The director of water resources, in consultation with the director of environmental quality, may inspect wells for vertical cross-contamination of groundwater by hazardous substances and may take appropriate remedial actions to prevent or mitigate the cross-contamination at no cost to the well owner, subject to subsection D of this section. The director shall consult with and seek the voluntary compliance of affected well owners regarding well access, investigations and remedial actions. On receiving permission from the well owner or operator, the director or the director's designee may enter property owned or operated by the well owner at reasonable times under any of the following circumstances:

To inspect and collect samples from a well and to inspect and copy all documents or records relating to the well. If a sample is obtained pursuant to this section, the director, before leaving the property, shall give to the well owner or operator a receipt describing the sample obtained and, if requested, a portion of each sample. A copy of the results of any analysis made of these samples shall be furnished promptly to the well owner.
To conduct appropriate remedial actions regarding vertical cross-contamination.

B. The director shall provide notice to the director of environmental quality of the results of the inspection, including copies of the department's records and documents and the analysis of any samples taken. If it is determined that the well results in vertical cross-contamination, the director, upon receiving permission from the well owner or operator and approval from the director of the department of environmental quality, may take appropriate remedial actions, including well modification, abandonment or replacement, or provision of a replacement water supply.

C. A well owner who is not a responsible party pursuant to title 49, chapter 2, article 5 and who cooperates with the investigation and remedial activities of the director and the department of environmental quality to the extent possible and consistent with the owner's water delivery responsibilities and system operational requirements, shall receive a covenant not to sue from the director of environmental quality pursuant to section 49-282.04, subsection C.

D. Notwithstanding subsection C of this section, if the director takes a remedial action pursuant to subsection A of this section and the well owner or operator is later determined to be responsible under title 49, chapter 2, article 5 for a release or threatened release of hazardous substances that contaminated or may have contaminated the well, the well owner or operator shall reimburse the water quality assurance revolving fund established pursuant to section 49-282 for the owner or operator's proportionate share of the costs incurred in taking the action.

E. The director shall notify an applicant for a permit or a person who files a notice of intent to drill a new or replacement well if the location of the proposed well is within a sub-basin where there is a site on the registry established pursuant to section 49-287.01, subsection D. The director shall adopt rules requiring the review of notices and applications regarding new or replacement wells to identify whether a well will be located where existing or anticipated future groundwater contamination presents a risk of vertical cross-contamination by the well. The rules shall require that a new or replacement well in this type of location be designed and constructed in a manner to prevent vertical cross-contamination within an aquifer.

F. On approval from the director of environmental quality, the department of water resources may be reimbursed for any actions conducted pursuant to title 49, chapter 2, article 5.

G. The well inspection authority granted the director in this section is in addition to any other well inspection authority otherwise prescribed in this title.

H. For purposes of this section, "vertical cross-contamination" has the same meaning prescribed by section 49-281.

§ 45-606 Well administration and enforcement fund; purpose

A. The well administration and enforcement fund is established consisting of fees paid to the department pursuant to section 45-596, subsection L and section 45-599, subsection J. The department shall administer the fund. Monies in the fund are continuously appropriated and shall be used by the director for the following purposes:

For the reasonable and necessary costs of the department to implement this article.
For compliance monitoring, investigation and enforcement activities of the department pertaining to the construction, replacement, deepening and abandonment of wells and capping of open wells under this article.

B. The fund shall be a separate account on the books of the department. Monies remaining in the fund at the end of the fiscal year remain in the fund and are exempt from the provisions of section 35-190 relating to the lapsing of appropriations. On notice from the director, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.

Article 11 Financial Provisions

§ 45-611 Groundwater withdrawal fee; amounts and purposes of fee; exception

A. Except as provided in subsection B of this section, the director shall levy and collect an annual groundwater withdrawal fee from each person withdrawing groundwater in the Prescott active management area or the person who owns the right to withdraw the groundwater, in an amount not to exceed $5 per acre-foot of groundwater withdrawn and beneficially used. The director shall levy and collect an annual withdrawal fee from each person withdrawing water, other than stored water, from a well in the Santa Cruz active management area or the person who owns the right to withdraw the water, in an amount not to exceed $5 per acre-foot of water, other than stored water, that is withdrawn and beneficially used. For the purposes of this article, the annual withdrawal fee levied and collected in the Santa Cruz active management area shall be considered a groundwater withdrawal fee. The actual amount of the fee levied and collected by the director pursuant to this subsection shall be set by the director as follows:

For administration and enforcement of this chapter, an amount not less than $.50 and not greater than $1 per acre-foot per year. The initial fee for administration and enforcement shall be levied as soon as practicable after the active management area is established.
For augmentation of the water supply of the active management area, conservation assistance to water users within the active management area and monitoring and assessing water availability within the active management area, an amount not greater than $2 per acre-foot per year.
For purchasing and retiring grandfathered rights, an amount not greater than $2 per acre-foot per year. The initial fee for purchasing and retiring grandfathered rights shall be levied in the first year in which the director develops and implements a program for the purchase and retirement of grandfathered rights as part of the management plan for the active management area, but not earlier than January 1, 2006. The director may not levy a fee under this paragraph on a district member of a groundwater replenishment district that withdraws groundwater in the district for a non-irrigation use in the district.

B. A person, other than an irrigation district, who withdraws groundwater in an active management area from a non-exempt well for use pursuant to an irrigation grandfathered right that is appurtenant to ten or fewer irrigation acres and the person who owns the right to withdraw the groundwater are exempt from the groundwater withdrawal fee requirements of subsections A and C of this section for those withdrawals unless the irrigation acres are part of an integrated farming operation.

C. Except as provided in section 45-411.01, subsection C and subsection B of this section, the director shall levy and collect an annual groundwater withdrawal fee from each person who withdraws groundwater in the Tucson, Phoenix and Pinal active management areas or the person who owns the right to withdraw the groundwater, in an amount of not more than $5 per acre-foot of groundwater withdrawn and beneficially used. The director shall set the actual amount of the fee as follows:

In the Tucson and Phoenix active management areas, beginning in 2017, for administration and enforcement of this chapter, an amount of at least $.50 but not more than $1 per acre-foot per year. In the Pinal active management area, beginning in 2017, for administration and enforcement of this chapter, an amount of not more than $1 per acre-foot per year.
For augmentation of the water supply of the active management area, conservation assistance to water users within the active management area and monitoring and assessing water availability within the active management area, an amount of not more than $2 per acre-foot per year. If a permanent board of directors of an active management area water district assumes office under section 48-4831, the fee for augmentation under this paragraph shall not be levied in that active management area.
In the Tucson and Phoenix active management areas, for Arizona water banking purposes, the amount of $2.50 per acre-foot per year. In the Pinal active management area, for Arizona water banking purposes, including replenishment under chapter 15, article 3 of this title, an amount of not more than $2.50 per acre-foot per year, except that no fee shall be levied in the Pinal active management area for this purpose during calendar years 2020 through 2026.
For purchasing and retiring grandfathered rights, an amount of not more than $2 per acre-foot per year. The initial fee for purchasing and retiring grandfathered rights shall be levied in the first year in which the director develops and implements a program for the purchase and retirement of grandfathered rights as part of the management plan for the active management area, but not earlier than January 1, 2006. The director may not levy a fee pursuant to this paragraph on a district member of a groundwater replenishment district that withdraws groundwater in the district for non-irrigation use in the district.
In the Pinal active management area, beginning from and after December 31, 2019 through December 31, 2026, an amount of not more than $2.50 per acre-foot per year for groundwater and irrigation efficiency projects.

§ 45-612 Administration and enforcement withdrawal fee; exemption from lapsing; disposition of excess monies

A. Each year the legislature shall appropriate sufficient monies to the department to cover all costs of administration and enforcement of this chapter.

B. Not later than October 1 of each year, the director shall estimate the total amount of groundwater to be withdrawn in all active management areas except the Tucson, Phoenix, Pinal and Santa Cruz active management areas during the following calendar year and the total amount of water, other than stored water, to be withdrawn in the Santa Cruz active management area during the following calendar year, and set the administration and enforcement fee pursuant to section 45-611, subsection A, paragraph 1 to produce an amount equal to one-half of the amount budgeted by the director for administration and enforcement purposes for the following fiscal year. In setting the administration and enforcement fee, the director shall account for excess payments or deficiencies in payments in the past fiscal year. Except as provided in section 45-113, subsection C, monies collected from administration and enforcement fees shall be deposited in the water resources fund established by section 45-117.

C. For the Tucson, Phoenix and Pinal active management areas, not later than October 1, 2016 and by October 1 of each year thereafter, the director shall estimate the total amount of groundwater to be withdrawn in each active management area and shall set the administration and enforcement fee pursuant to section 45-611, subsection C, paragraph 1 to produce an amount equal to one-half of the amount budgeted by the director for administration and enforcement purposes for the following fiscal year. In setting the administration and enforcement fee, the director shall account for excess payments or deficiencies in payments in the past fiscal year. Except as provided in section 45-113, subsection C, monies collected from administration and enforcement fees shall be deposited in the water resources fund established by section 45-117.

D. Monies budgeted for administration and enforcement purposes pursuant to this section are exempt from the provisions of section 35-190 relating to lapsing of appropriations. If the administration and enforcement fee is set at fifty cents and excess payments have been received, such excess payments shall be credited to the augmentation and conservation assistance fund established under section 45-615 and credited among the active management areas in proportion to the amount of such monies collected from each active management area.

§ 45-613 Use of withdrawal fees collected for augmentation and conservation and purchase and retirement of grandfathered rights, Arizona water banking purposes and groundwater and irrigation efficiency projects

A. Except as provided in section 45-615, paragraph 2 and sections 45-1972 and 48-4504, monies collected in an active management area for purposes of augmentation, conservation assistance and monitoring and assessing water availability under section 45-611, subsection A, paragraph 2 and subsection C, paragraph 2 shall be used only to finance the augmentation and conservation assistance programs that are part of the management plan for the active management area and to fund any projects that are authorized by the director for monitoring and assessing water availability within the active management area.

B. Monies collected in an active management area for the purpose of purchasing and retiring grandfathered rights under section 45-611, subsection A, paragraph 3 and subsection C, paragraph 4 shall be used only to finance the program for the purchase and retirement of grandfathered rights that is part of the management plan for the active management area.

C. Monies collected in an active management area for the purpose of Arizona water banking under section 45-611, subsection C, paragraph 3 shall be used only for the benefit of the active management area in which they are collected.

D. Except as provided in section 45-615.01, subsection G, monies collected in the Pinal active management area for the purpose of groundwater and irrigation efficiency projects under section 45-611, subsection C, paragraph 5 shall be used only to finance projects for the construction and rehabilitation of wells and related infrastructure for the withdrawal and efficient delivery of groundwater by irrigation districts in the Pinal active management area.

§ 45-614 Setting groundwater withdrawal fee; statement entered in record; statement transmitted to state treasurer; notice; payment; penalty

A. The director, not later than October 1 each year, shall set the groundwater withdrawal fee for each active management area for the following calendar year. In setting the fee, the director shall comply with the requirements of section 45-611, subsections A and C and shall consider, among other things:

The estimated financial requirements for the next fiscal year.
The estimated amount of groundwater which will be withdrawn in the active management areas, except the Santa Cruz active management area, in the next calendar year.
The estimated amount of water, other than stored water, that will be withdrawn from wells in the Santa Cruz active management area in the next calendar year.
The amount of monies collected from groundwater withdrawal fees in the preceding calendar year.

B. The director shall enter in the records of the department a statement of the estimated financial requirements for the next fiscal year and a statement of the groundwater withdrawal fees for each active management area for the next calendar year, itemized to show the amounts to be levied for administration and enforcement, augmentation, conservation assistance and monitoring and assessing water availability, Arizona water banking and the purchase and retirement of grandfathered rights. The director shall transmit to the state treasurer a copy of the itemized statement of the groundwater withdrawal fees.

C. Within thirty days after the director sets the groundwater withdrawal fees for the next calendar year, the director shall give notice of the fees by:

Giving written notice to the clerk of the board of supervisors of the county or counties in which the active management area is located and to the mayor of each city or town, to each private water company and to the presiding officer of each political subdivision established pursuant to title 48, chapter 17, 18, 19 or 20 and located in the active management area.
Written notice to all holders of groundwater withdrawal permits in the active management area.

D. A person who, under section 45-604, subsection B, is not required to use and does not use a water measuring device to measure withdrawals made pursuant to a type 2 non-irrigation grandfathered right or a groundwater withdrawal permit shall pay an amount equal to the groundwater withdrawal fee set by the director for the calendar year multiplied by the number of acre-feet of the grandfathered right or the groundwater withdrawal permit.

E. The groundwater withdrawal fee shall be paid to the department at the time the person withdrawing the water files a report on annual withdrawals pursuant to section 45-632. If a person who is required under section 45-611 to pay a groundwater withdrawal fee for calendar year 1985 or any subsequent calendar year fails to pay the fee for the calendar year in question on or before March 31 of the following year, the director may assess and collect a penalty of ten per cent of the unpaid fee, without compounding, for each month or portion of a month that the fee is delinquent. The total penalty assessed under this subsection shall not exceed sixty per cent of the unpaid fee. The director shall transmit all penalties collected under this section to the state treasurer for deposit in the state general fund.

§ 45-615 Deposits; divisions of collections into funds

Except as provided in section 45-113, subsection C, the director shall deposit, pursuant to sections 35-146 and 35-147, all monies collected by the department pursuant to section 45-611, subsection A, paragraphs 2 and 3 and subsection C, paragraphs 2, 3 and 4 and any other monies received for that purpose. Based on the statement of the director transmitted pursuant to section 45-614, subsection B, the monies collected shall be allocated as follows:

Except as provided in paragraph 2 of this section, monies received for the purpose of augmentation of the water supply of the active management area, conservation assistance to water users within the active management area and monitoring and assessing water availability within the active management area shall be kept in an augmentation and conservation assistance fund. Separate accounts for each active management area shall be maintained within the fund. On notice from the director, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.
If an active management area water district has been established in an active management area, all monies received pursuant to section 45-611, subsection A, paragraph 2 for the purpose of augmentation of the water supply of that active management area shall be transmitted to the secretary-treasurer of the district for deposit in the general fund of the district.
Monies received for the purpose of purchase and retirement of grandfathered rights shall be kept in a purchase and retirement fund. Separate accounts for each active management area shall be maintained within the fund. On notice from the director, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.
Monies received for the purpose of Arizona water banking shall be deposited, pursuant to sections 35-146 and 35-147, in the Arizona water banking fund.
Monies collected by the director pursuant to section 45-611, subsection C, paragraph 5 shall be deposited in the temporary groundwater and irrigation efficiency projects fund established by section 45-615.01.

§ 45-615.01 Temporary groundwater and irrigation efficiency projects fund; purpose; report; definition

(Rpld. 4/1/28)

A. The temporary groundwater and irrigation efficiency projects fund is established for the purpose of funding projects for the construction and rehabilitation of wells and related infrastructure for the withdrawal and efficient delivery of groundwater by qualified irrigation districts in the Phoenix active management area, the Pinal active management area and the Harquahala irrigation non-expansion area. The fund consists of legislative appropriations, groundwater withdrawal fees collected in the Pinal active management area pursuant to section 45-611, subsection C, paragraph 5, grants from federal agencies and monies deposited in the fund by qualified irrigation districts in the Phoenix active management area, the Pinal active management area and the Harquahala irrigation non-expansion area. Groundwater withdrawal fees deposited in the fund shall be accounted for separately from other monies in the fund and shall be used only for constructing and rehabilitating wells and related infrastructure in the Pinal active management area. Monies in the fund are continuously appropriated for the purposes of this section.

B. The director may accept and deposit into the fund monies, grants, gifts, contributions and devises to assist in carrying out the purposes of this section.

C. The director shall administer the fund. On notice from the director, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund.

D. The director may grant monies from the fund to qualified irrigation districts established pursuant to title 48, chapter 19 in the Phoenix active management area, the Pinal active management area and the Harquahala irrigation non-expansion area for the purposes described in subsection A of this section. In granting monies from the fund, the director may give preference to wells and related infrastructure that would be used to recover stored water. Grants made to qualified irrigation districts are exempt from title 41, chapter 24.

E. Before December 31 of each year, the director shall submit to the speaker of the house of representatives and the president of the senate a written report describing the activities of the department for the preceding fiscal year related to expenditures from the fund. The report shall include an accounting for expenditures from the fund and how the monies were used to finance projects for the construction and rehabilitation of wells and related infrastructure for the withdrawal and efficient delivery of groundwater by qualified irrigation districts in the Phoenix active management area, the Pinal active management area and the Harquahala irrigation non-expansion area.

F. Except as provided in subsection G of this section, monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

G. On June 30, 2027, any unencumbered monies in the fund shall be proportionally distributed to the fund's contributors by December 31, 2027 according to the total amount of monies deposited in the fund by each contributor. The proportion of the unencumbered monies attributable to groundwater withdrawal fees levied under section 45-611, subsection C, paragraph 5 shall be deposited in the Arizona water banking fund established by section 45-2425 and shall be used only in the Pinal active management area in the same manner as groundwater withdrawal fees collected in the Pinal active management area pursuant to section 45-611, subsection C, paragraph 3.

H. All monies deposited in the temporary groundwater and irrigation efficiency projects fund shall be held in trust. The monies in the fund may be used only for the purposes prescribed in this section and may not be appropriated or transferred by the legislature to fund the general operations of this state or to otherwise meet the obligations of the state general fund. This subsection does not apply to any taxes or other levies that are imposed pursuant to title 42 or 43.

I. For the purposes of this section, "qualified irrigation district" means an irrigation district that meets all of the following requirements:

The irrigation district received central Arizona project water in any year after calendar year 2014 other than through a groundwater savings facility permit issued under chapter 3.1 of this title.
There are at least nine thousand acres that may be lawfully irrigated within the boundaries of the irrigation district.
For an irrigation district located in the Phoenix active management area only, the district did not deliver surface water other than central Arizona project water in calendar year 2017.
The irrigation district submitted an application to the department for monies from the fund established by this section to construct an irrigation efficiency project in the Phoenix active management area, the Pinal active management area or the Harquahala irrigation non-expansion area.

§ 45-616 Water quality assurance fee; disposition of revenue

A. The director shall levy and collect, in a form prescribed by the department, an annual water quality assurance fee from each person who owns a type 1 or a type 2 non-irrigation grandfathered right pursuant to article 5 of this chapter or who holds a groundwater withdrawal permit for beneficial use issued pursuant to article 7 of this chapter.

B. Except as provided in subsection C of this section and section 45-411.01, subsection C, the fee is levied in an amount of two dollars twelve cents per acre-foot and at a proportionate rate for any lesser or greater quantity of groundwater withdrawn for beneficial use during the calendar year.

C. A person who, under section 45-604, subsection B, is not required to use and does not use a water measuring device to measure withdrawals made pursuant to a type 2 non-irrigation grandfathered right or a groundwater withdrawal permit shall pay an amount equal to the water quality assurance fee of two dollars twelve cents per acre-foot multiplied by the number of acre-feet of the grandfathered right or the groundwater withdrawal permit.

D. This section does not apply to any water that is subject to the tax on potable water imposed by section 42-5302.

E. The water quality assurance fee shall be paid to the department at the time the person withdrawing groundwater for beneficial use files the annual groundwater withdrawal report pursuant to section 45-632.

F. The director shall separately account for and remit monies collected under this section for deposit in the water quality assurance revolving fund established by section 49-282.

§ 45-617 Augmentation and conservation assistance fund grants

The director may grant monies, either on a reimbursable basis or by advancing grant monies, from an active management area's augmentation and conservation assistance fund as received by the state treasurer pursuant to section 45-615, paragraph 1 for augmentation or conservation assistance projects that will benefit the active management area for which the monies were collected. Each grant shall be provided on such terms and conditions as the director may prescribe. Grants that are issued under this section are exempt from title 41, chapter 23.

§ 45-618 Arizona water quality fund

A. An Arizona water quality fund is established for agency participation in activities related to title 49, chapter 2, article 5 and coordination of data bases necessary for those activities. The director shall administer the fund.

B. The Arizona water quality fund consists of monies from legislative appropriations, grants, contributions and transfers from other public agencies.

C. On notice from the director, the state treasurer shall invest and divest monies in the fund as provided by section 35-313 and monies earned from investment shall be credited to the fund.

D. Monies in the fund are exempt from lapsing under section 35-190.

E. Before December 31 of each year, the director shall submit to the speaker of the house of representatives and the president of the senate a written report describing the activities of the department for the preceding fiscal year relating to expenditures from the fund. The report shall include an accounting for expenditures from the fund and how the monies were used to perform duties in cooperation with the department of environmental quality pursuant to title 49, chapter 2, article 5. The report shall address the department of water resources' sharing and management of data with the department of environmental quality, well inspection activities conducted pursuant to this fund, measures to remediate wells pursuant to section 45-605, duties performed pursuant to agreements with the department of environmental quality and the status of other departmental participation in water quality assurance revolving fund activities.

Article 12 Enforcement

§ 45-631 Definition

§ 45-632 Records and annual report of groundwater pumping, transportation and use; penalty

A. Each person who is required to file an annual report under this section or who files an annual report under subsection E of this section shall maintain current accurate records of the person's withdrawals, transportation, deliveries and use of groundwater and, in the Santa Cruz active management area, current accurate records of the person's withdrawals, deliveries and use of all water withdrawn from a well, as prescribed by the director under subsection P of this section.

B. Except as provided in subsections C and D of this section, an annual report shall be filed with the director by each person who:

Owns or leases a right under this chapter to withdraw, receive or use groundwater in an active management area, unless a report is filed for that person by an irrigation district under subsection E of this section or by another person in a form acceptable to the director.
Uses groundwater which is transported from an active management area.
Is an individual user subject to a municipal conservation requirement for appropriate conservation measures included in a management plan adopted by the director pursuant to article 9 of this chapter.
Withdraws groundwater for transportation to an initial active management area pursuant to article 8.1 of this chapter.
Withdraws water from a well in the Santa Cruz active management area or who uses water, other than stored water, withdrawn from a non-exempt well in the Santa Cruz active management area.

C. Persons who withdraw groundwater from exempt wells and non-irrigation customers of cities, towns, private water companies and irrigation districts, except customers receiving water pursuant to a permit, are exempt from the record keeping and reporting requirements of this section for such water.

D. A person who owns or leases an irrigation grandfathered right that is appurtenant to ten or fewer irrigation acres is exempt from the record keeping and reporting requirements of this section for the irrigation grandfathered right unless one of the following applies:

The land to which the irrigation grandfathered right is appurtenant is part of an integrated farming operation.
Groundwater is withdrawn from the land to which the irrigation grandfathered right is appurtenant and delivered for use pursuant to either a service area right pursuant to article 6 of this chapter or a grandfathered groundwater right other than an irrigation grandfathered right that is appurtenant to irrigation acres that are exempt from irrigation water duties pursuant to section 45-563.02.
Groundwater is withdrawn from land that is both owned by the owner of the irrigation grandfathered right and contiguous to the land to which the irrigation grandfathered right is appurtenant and delivered for use pursuant to either a service area right pursuant to article 6 of this chapter or a grandfathered groundwater right other than an irrigation grandfathered right that is appurtenant to irrigation acres that are exempt from irrigation water duties pursuant to section 45-563.02.

E. An irrigation district which delivers and distributes groundwater in an active management area may file an annual report with the director for each person who holds an irrigation grandfathered right appurtenant to irrigation acres within the service area of the irrigation district, if the irrigation district delivers all the water used on the person's irrigation acres. If an irrigation district files an annual report for such a person, the irrigation district shall report the following information for each such person:

The name of the person and the certificate number of the person's irrigation grandfathered right.
The quantity of groundwater, if any, delivered during the calendar year.

F. Persons who are required to report under subsection B, paragraph 1 of this section and who withdraw groundwater during the calendar year in an active management area shall report the following information for each well:

The registration number and location of the well.
The quantity of groundwater withdrawn from the well during the calendar year. A person who, under section 45-604, subsection B, is not required to use and does not use a water measuring device to measure withdrawals made pursuant to a type 2 non-irrigation grandfathered right or a groundwater withdrawal permit shall estimate the quantity of groundwater withdrawn pursuant to the grandfathered right or withdrawal permit.
The quantity of fuel or electricity consumed by the pump during the calendar year.
The uses to which the groundwater was applied or the persons to whom the groundwater was delivered during the calendar year.

G. Persons who are required to report under subsection B, paragraph 1 of this section and who use groundwater during the calendar year in an active management area and persons who are required to report under subsection B, paragraph 2 of this section shall report the following information:

The source of the groundwater, including:

(a) The name of the person from whom the groundwater was obtained.

(b) The registration number and location of the well, if known.

The quantity of groundwater used during the calendar year.
The specific uses to which the groundwater was applied during the calendar year.

H. Persons who are required to report under subsection B, paragraph 4 of this section and who transport groundwater during the calendar year to an initial active management area under article 8.1 of this chapter shall report the following information:

The registration number and location of each well.
The quantity of groundwater withdrawn from each well during the calendar year.
The quantity of groundwater transported during the calendar year to an initial active management area.
The quantity of groundwater that was withdrawn during the calendar year and that was not transported to an initial active management area and the uses to which the groundwater was applied.
The quantity of fuel or electricity consumed by each pump during the calendar year.
The uses to which the groundwater was applied or the persons to whom the groundwater was delivered during the calendar year.

I. Persons who are required to report under subsection B, paragraph 1 of this section and who neither withdraw nor use groundwater during the calendar year shall report the following information:

The fact that no groundwater was withdrawn or used during the calendar year.
The registration number and location of each well, if any.

J. Persons who are required to report under subsection B, paragraph 5 of this section and who withdraw water from a non-exempt well in the Santa Cruz active management area during the calendar year shall report the following information:

The registration number and location of the well.
The quantity of water, by type, withdrawn from the well during the calendar year.
The quantity of fuel or electricity consumed by the pump during the calendar year.
The uses to which the water was applied or the persons to whom the water was delivered during the calendar year.

K. Persons who are required to report under subsection B, paragraph 5 of this section and who use water withdrawn from a non-exempt well in the Santa Cruz active management area during the calendar year shall report the following information:

The source of the water, including:

(a) The name of the person from whom the water was obtained.

(b) The registration number and location of the well, if known.

The quantity of the water, by type, used during the calendar year.
The specific uses to which the water was applied during the calendar year.

L. If a person both withdraws groundwater in an active management area and uses such water, the person may combine the information required by subsections F and G of this section into one report. If a person both withdraws water, other than stored water, from a non-exempt well in the Santa Cruz active management area and uses such water, the person may combine the information required by subsections J and K of this section into one report.

M. The director may require such other information in the report as may be necessary to accomplish the management goals of the applicable active management area.

N. Each report shall contain either a sworn statement or a certification, under penalty of perjury, that the information contained in the report is true and correct according to the best belief and knowledge of the person filing the report.

O. The annual report shall be maintained on a calendar year basis and shall be filed with the director no later than March 31 of each year for the preceding calendar year. If a person who is required under this section to file an annual report for calendar year 1985 or any subsequent calendar year fails to file a report for the calendar year in question on or before March 31 of the following year, the director may assess and collect a penalty of twenty-five dollars for each month or portion of a month that the annual report is delinquent. The total penalty assessed under this subsection shall not exceed one hundred fifty dollars. The director shall deposit, pursuant to sections 35-146 and 35-147, all penalties collected under this subsection in the state general fund.

P. The records and reports required to be kept and filed under this section shall be in such form as the director prescribes. The director shall prepare blank forms and distribute them on a timely schedule throughout each active management area and furnish them upon request. Failure to receive or obtain the forms does not relieve any person from keeping the required records or making any required report. The director shall cooperate with cities and towns, private water companies and irrigation districts in establishing the form of the records and reports to be kept and filed by them.

§ 45-633 Inspections, investigations and audits

A. The director or the director's authorized representative may enter at reasonable times upon private or public property where a well, including a well under construction or a well not used to withdraw groundwater or another facility for the withdrawal, transportation or use of groundwater is located and the owner, manager or occupant of the property shall permit such entry to:

Inspect a well, including a well under construction or a well not used to withdraw groundwater, or another facility for the withdrawal, transportation or use of groundwater that is subject to this chapter.
Obtain factual data or access to records required to be kept under section 45-632.
Ascertain compliance with this chapter.

B. Inspections and investigations under subsection A of this section shall be upon reasonable notice to the owner, manager or occupant of the property unless reasonable grounds exist to believe that such notice would frustrate the enforcement of this chapter or where entry is sought for the sole purpose of inspecting water measuring devices required pursuant to section 45-604. The director shall adopt rules for conducting inspections, examining records and obtaining warrants pursuant to this section. The director may apply for and obtain warrants. If warrants are required by law, the director shall apply for and obtain warrants for entry and inspection to carry out the administrative and enforcement purposes of this chapter.

C. The director may require a person who is required to keep records under section 45-632 to appear, at reasonable times and upon reasonable notice, at the director's office and produce such records and information as are specified in the notice to determine whether the records and annual reports required by section 45-632 are complete, true and correct. The director shall audit the records of a sufficient number of persons under this subsection to ensure general compliance with this chapter.

D. The director shall provide a written report of each inspection, investigation and audit under this section to the person subject to such action.

§ 45-634 Cease and desist order; temporary cease and desist order; hearing; injunctive relief

A. Except as provided by subsection B of this section, if the director has reason to believe that a person is violating or has violated a provision of this chapter or a permit, rule or order issued or adopted pursuant to this chapter, the director may give the person written notice that the person may appear and show cause at an administrative hearing why the person should not be ordered to cease and desist from the violation.

B. If the director finds that a person is constructing or modifying a well and the person does not hold a well driller's or single well license pursuant to section 45-595 or has not obtained the necessary authority to construct or modify the well pursuant to article 7 of this chapter or section 45-596, 45-597, 45-598 or 45-834.01, the director may issue a temporary order for the person to cease and desist the construction or modification pending final action by the director pursuant to subsection C of this section. The order shall include written notice to the person of the date, time and place where the person may appear at an administrative hearing to show cause why the temporary order should be vacated. The hearing shall be held within fifteen days of the date of the order unless the person consents to a longer period.

E. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

§ 45-635 Violation; civil penalties

A. A person who is determined pursuant to section 45-634 to be in violation of this chapter or a permit, rule, regulation or order issued or adopted pursuant to this chapter may be assessed a civil penalty in an amount not exceeding:

Except as provided in paragraph 3 of this subsection, one hundred dollars per day of violation not directly related to illegal withdrawal, use or transportation of groundwater.
Ten thousand dollars per day of violation directly related to illegal withdrawal, use or transportation of groundwater.
In the Santa Cruz active management area, ten thousand dollars per day of violation for a violation of an applicable conservation requirement established by the director pursuant to article 9 of this chapter for the withdrawal of water, other than stored water, from a well or the distribution or use of water, other than stored water, withdrawn from a well.

B. An action to recover penalties under this section shall be brought by the director in the superior court in the county in which the violation occurred.

D. All civil penalties assessed pursuant to this section shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund.

§ 45-636 Violation; classification

A. Unless otherwise specified, a person who knowingly violates or refuses to comply with a provision of this chapter or a permit, rule, regulation or order issued or adopted pursuant to this chapter is guilty of a class 2 misdemeanor. A person who, after notice of violation, continues in violation of a provision of this chapter or a permit, rule, regulation or order issued or adopted pursuant to this chapter is guilty of a separate offense for each day of violation.

B. A person who knowingly falsifies or renders inaccurate a measuring device required to be installed or maintained under this chapter is guilty of a class 6 felony.

C. A person who knowingly and intentionally withdraws or uses groundwater in violation of this chapter is guilty of:

A class 6 felony if the amount of groundwater illegally withdrawn or used is one thousand acre-feet or more.
A class 1 misdemeanor if the amount of groundwater illegally withdrawn or used is more than one hundred acre-feet but less than one thousand acre-feet.
A class 3 misdemeanor if the amount of groundwater illegally withdrawn or used is one hundred acre-feet or less.

Article 15 Certificate of Groundwater Oversupply

§ 45-701 Definitions

In this article, unless the context otherwise requires:

"District" means a groundwater replenishment district established under title 48, chapter 27.
"District member" means a member of the district as provided by title 48, chapter 27.

§ 45-702 Certificate of groundwater oversupply

A. A district member may apply to the director for a certificate of groundwater oversupply for all or part of the groundwater that the district member has a legal right to withdraw.

B. The director may issue a certificate of groundwater oversupply for all or part of the groundwater that the district member has a legal right to withdraw if the director determines that both of the following apply:

The groundwater is located in an area of localized excess groundwater in the district.
There is a substantial probability that if the district member does not withdraw the groundwater either of the following could occur in the active management area in which the district is located:

(a) The groundwater would be discharged from the district without being used and would not contribute hydrologically to achieving safe-yield.

(b) The groundwater would contribute to a waterlogging or groundwater drainage problem.

C. The director may issue a certificate of groundwater oversupply for a period of not more than ten years. On request of a certificate holder the director may renew the certificate if the director determines that the requirements of subsection B continue to apply.

D. A certificate of groundwater oversupply shall include the following information:

The name and mailing address of the district member to whom the certificate is issued.
The name of the active management area in which the groundwater will be withdrawn.
A description of the district member's right under articles 4 through 7 of this chapter to withdraw the groundwater designated as groundwater oversupply.
The locations and well registration numbers of the wells from which the designated groundwater will be withdrawn.
The duration of the certificate.
Any other information as determined by the director.

§ 45-703 Application for certificate of groundwater oversupply; fee

A. The director shall prescribe and furnish an application form for a certificate of groundwater oversupply that includes the following:

The name and mailing address of the district member.
The name of the active management area in which the groundwater will be withdrawn.
The estimated annual quantity of groundwater to be designated as groundwater oversupply.
The locations and well registration numbers of the wells from which the designated groundwater will be withdrawn.
The proposed duration of the certificate.
Evidence of the district member's right under articles 4 through 7 of this chapter to withdraw the groundwater to be designated as groundwater oversupply.
Evidence that the groundwater to be designated will be withdrawn from an area in the district of localized excess groundwater.
Evidence that if the district member does not withdraw the groundwater to be designated either of the following could occur in the active management area in which the district is located:

(a) The groundwater would be discharged from the district without being used and would not contribute hydrologically to achieving safe-yield.

(b) The groundwater would contribute to a waterlogging or drainage problem.

Any other information the director may reasonably require.

B. The director shall establish and collect a reasonable fee from the applicant to cover the cost of administrative services and other expenses associated with evaluating and issuing a certificate of groundwater oversupply. The director shall deposit, pursuant to sections 35-146 and 35-147, all fees received under this subsection in the water resources fund established by section 45-117.

§ 45-704 Notice of application; objections; hearing; approval or rejection

A. On receiving an application under section 45-703, the director shall record the application and endorse on the application the date of receipt. The director shall conduct an initial review of the application within fifteen days of receiving the application. If the director determines in the initial review that the application is incomplete, the director shall notify the applicant. The application is incomplete until the applicant files all of the information requested in the application. The director shall determine whether the application is correct within ninety days after receiving a complete application. The director may request additional information from the applicant. The director may conduct independent investigations as may be necessary to determine whether the application should be approved or rejected.

B. If the director determines that the application is complete and correct, the director, within fifteen days after the determination, or a longer period if the applicant requests, shall give notice of the application once each week for two consecutive weeks in a newspaper of general circulation in the county or counties in which persons reside who could reasonably be expected to be affected by the designation of groundwater oversupply. The notice shall state that persons who may be adversely affected by the designation may file written objections to the issuance of the certificate with the director within fifteen days after the last publication of notice. An objection shall state the name and mailing address of the objector, shall be signed by the objector or the objector's agent or attorney and shall clearly set forth reasons why the certificate should not be issued. The grounds for objection are limited to whether the application meets the criteria for issuing a certificate prescribed in section 45-702, subsection B.

C. In appropriate cases, including cases in which a proper objection to the certificate 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. At least thirty days before the hearing, the director shall notify the applicant and any person who filed a proper objection to the issuance of the certificate. The hearing shall be scheduled for at least sixty but not more than ninety days after the expiration of the time in which to file objections.

D. The director shall record and endorse the approval or denial of the application on the application. If the certificate is denied, the director shall return a copy of the application to the applicant specifically stating the reasons for denial.

Chapter 3.1 Underground Water Storage, Savings and Replenishment

Article 1 General Provisions

§ 45-801.01 Declaration of policy

The public policy of this state and the general purposes of this chapter are to:

Protect the general economy and welfare of this state by encouraging the use of renewable water supplies, particularly this state's entitlement to Colorado river water, instead of groundwater through a flexible and effective regulatory program for the underground storage, savings and replenishment of water.
Allow for the efficient and cost-effective management of water supplies by allowing the use of storage facilities for filtration and distribution of surface water instead of constructing surface water treatment plants and pipeline distribution systems.

§ 45-802.01 Definitions

Unless the context otherwise requires, the terms defined in section 45-402 have the same meanings in this chapter and:

"Aquifer" means a geologic formation that contains sufficient saturated material to be capable of storing water and transmitting water in usable quantities to a well.
"Area of impact" means, as projected on the land surface, the area where the stored water has migrated or is located.
"CERCLA" means the comprehensive environmental response, compensation, and liability act of 1980, as amended (P.L. 96-510; 94 Stat. 2767; 42 United States Code sections 9601 through 9657), commonly known as "superfund".
"Constructed underground storage facility" means a facility that meets the requirements of section 45-811.01 and that is designed and constructed to store water underground pursuant to permits issued under this chapter.
"District" means a groundwater replenishment district established under title 48, chapter 27.
"District member" means a member of the groundwater replenishment district as provided by title 48, chapter 27.
"Electrical district" means a corporate body established pursuant to title 48, chapter 12.
"Existing effluent managed underground storage facility" means a managed underground storage facility that meets one of the following conditions:

(a) The facility is operated pursuant to a storage facility permit that the director issued before January 1, 2019 and that authorizes the storage of effluent at the facility.

(b) The facility is operated pursuant to a renewed or modified storage facility permit that the director issued after January 1, 2019 if the facility qualified as an existing effluent managed underground storage facility under subdivision (a), (c) or (d) of this paragraph at any time before the renewal or modification.

(c) The facility is operated pursuant to a permit that the director issued after January 1, 2019 and that authorizes the storage of effluent at a location where the permit holder was authorized to store effluent pursuant to a storage facility permit that the director issued before January 1, 2019.

(d) The facility is operated pursuant to a permit that the director issued after January 1, 2019 and that authorizes the storage of effluent at the facility, and the application to operate the facility was on file with the director as of January 1, 2019.

"Groundwater savings facility" means a facility that meets the requirements of section 45-812.01 in an active management area or an irrigation non-expansion area at which groundwater withdrawals are eliminated or reduced by recipients who use in lieu water on a gallon-for-gallon substitute basis for groundwater that otherwise would have been pumped from within that active management area or irrigation non-expansion area.
"In lieu water" means water that is delivered by a storer to a groundwater savings facility pursuant to permits issued under this chapter and that is used in an active management area or an irrigation non-expansion area by the recipient on a gallon-for-gallon substitute basis for groundwater that otherwise would have been pumped from within that active management area or irrigation non-expansion area.
"Long-term storage account" means an account established pursuant to section 45-852.01.
"Long-term storage credit" means stored water that meets the requirements of section 45-852.01 and that has been credited to a long-term storage account.
"Managed underground storage facility" means a facility that meets the requirements of section 45-811.01 and that is designed and managed to utilize the natural channel of a stream to store water underground pursuant to permits issued under this chapter through artificial and controlled releases of water other than surface water naturally present in the stream. Surface water flowing in its natural channel is not a managed underground storage facility.
"Master replenishment account" means an account established pursuant to section 45-858.01 for a groundwater replenishment district.
"Recipient" means a person who receives in lieu water for use at a groundwater savings facility.
"Recoverable amount" means the amount of water, as determined by the director, that will reach the aquifer through water storage.
"Replenishment" means the storage of water or use of long-term storage credits by a groundwater replenishment district to fulfill its duties under title 48, chapter 27, article 3, by a multi-county water conservation district to fulfill its duties under title 48, chapter 22, article 4 or by an active management area water district to fulfill its duties under title 48, chapter 28, article 7.
"Reserve target" has the same meaning prescribed in section 48-3701.
"Storage facility" means a groundwater savings facility or an underground storage facility.
"Stored water" means water that has been stored or saved underground pursuant to a storage permit issued under this chapter.
"Storer" means the holder of a water storage permit issued pursuant to section 45-831.01 or a person to whom a water storage permit has been conveyed pursuant to section 45-831.01, subsection F.
"Underground storage facility" means a constructed underground storage facility or a managed underground storage facility.
"Water that cannot reasonably be used directly" means water that the storer cannot reasonably put to a direct use during the calendar year, including:

(a) Except as provided in subdivision (b) or except for an agricultural improvement district as provided in subdivision (d), if the storer is a municipal provider, the amount of central Arizona project water that exceeds the amount of mined groundwater withdrawn during the calendar year by the storer in the active management area in which the storer's service area is located. If the storer withdrew mined groundwater during a calendar year in which the storer stored central Arizona project water underground pursuant to the storage permit, the amount of central Arizona project water stored underground during that year equal to the amount of mined groundwater withdrawn from the active management area in which the storer's service area is located shall not be credited to the storer's long-term storage account but may be considered as being available for recovery by the storer on an annual basis under section 45-851.01. In calculating the amount of mined groundwater withdrawn by the storer from the active management area, the director, at the request of the storer, shall exclude any groundwater withdrawn, treated and delivered for direct use as part of a remedial action undertaken pursuant to CERCLA or title 49, chapter 2, article 5. For the purposes of this subdivision, "mined groundwater" and "municipal provider" have the same meanings prescribed in section 45-561.

(b) If the storer is a municipal provider that has been designated as having an assured water supply pursuant to section 45-576, the amount of central Arizona project water that exceeds the amount of deficit groundwater withdrawn during the calendar year by the storer in the active management area in which the storer's service area is located. If the storer withdrew deficit groundwater during a calendar year in which the storer stored central Arizona project water underground pursuant to the storage permit, the amount of the central Arizona project water stored underground during that year equal to the amount of deficit groundwater withdrawn from the active management area in which the storer's service area is located shall not be credited to the storer's long-term storage account but may be considered as being available for recovery by the storer on an annual basis pursuant to section 45-851.01. In calculating the amount of deficit groundwater withdrawn by the storer from the active management area, the director, at the request of the storer, shall exclude any groundwater withdrawn, treated and delivered for direct use as part of a remedial action undertaken pursuant to CERCLA or title 49, chapter 2, article 5. For the purposes of this subdivision, "municipal provider" has the same meaning prescribed in section 45-561 and "deficit groundwater" means that amount of groundwater withdrawn within an active management area for delivery and use within a service area by a municipal provider in excess of the amount of groundwater that may be withdrawn by the municipal provider consistent with the achievement of the active management area's management goals as prescribed by rules adopted by the director pursuant to section 45-576.

(c) Except as provided in subdivision (d), if the storer is not a municipal provider, the amount of central Arizona project water stored in an active management area that exceeds the amount of groundwater withdrawn during the calendar year by the storer in that active management area. If the storer withdrew groundwater in an active management area during a calendar year in which the storer stored central Arizona project water underground in that active management area pursuant to the storage permit, the amount of central Arizona project water stored underground during that year equal to the amount of groundwater withdrawn from the active management area shall not be credited to the storer's long-term storage account but may be considered as being available for recovery by the storer on an annual basis under section 45-851.01. For the purposes of this subdivision, "municipal provider" has the same meaning prescribed in section 45-561. In calculating the amount of groundwater withdrawn by the storer from the active management area, the director, at the request of the storer, shall exclude:

(i) The amount of any groundwater withdrawn, treated and delivered for direct use as part of a remedial action undertaken pursuant to CERCLA or title 49, chapter 2, article 5.

(ii) The amount of groundwater withdrawn by the storer during the year for mineral extraction or metallurgical processing if the storer was engaged in mineral extraction and metallurgical processing within an initial active management area on or before January 1, 2011.

(d) The amount of central Arizona project water stored in an active management area in any year after 1994 by an agricultural improvement district established pursuant to title 48, chapter 17 for use at those portions of electrical generating facilities that are constructed or expanded after June 12, 1980, subject to both of the following:

(i) If groundwater was used during a year in an active management area at those portions of the electrical generating facilities that were owned and operated by the agricultural improvement district and that were constructed or expanded after June 12, 1980, the amount of the central Arizona project water stored during that year equal to the amount of the groundwater withdrawn during the year for use at those portions of the facilities that were owned and operated by the agricultural improvement district and that were constructed or expanded after June 12, 1980 shall not be credited to the agricultural improvement district's long-term storage account but may be considered as being available for recovery by the agricultural improvement district on an annual basis under section 45-851.01.

(ii) Long-term storage credits accrued as a result of the storage of the central Arizona project water may be recovered within the active management area by the agricultural improvement district only for the purpose of providing central Arizona project water to electrical generating facilities that were owned and operated by the agricultural improvement district and only pursuant to any water requirement included in a facility's certificate of environmental compatibility. Subject to section 45-854.01, the long-term storage credits may be assigned by the agricultural improvement district only to the owner of an electrical generating facility for use pursuant to any water requirement included in that facility's certificate of environmental compatibility.

(e) Surface water made available by dams constructed or modified after August 13, 1986.

(f) Effluent.

(g) If the storage facility is in an active management area, water from outside the active management area that would not have reached the active management area without the efforts of the storer.

(h) If the storage facility is outside of an active management area, water from outside the groundwater basin in which the storage facility is located that would not have reached the groundwater basin without the efforts of the storer.

(i) Water that is delivered through the central Arizona project and that is acquired by the Arizona water banking authority.

"Water storage" means adding water to an aquifer or saving water in an aquifer pursuant to permits issued under this chapter.
"Water storage permit" means a permit issued pursuant to section 45-831.01 to store water at a storage facility.

§ 45-803.01 Effect on vested water rights; effect in other proceedings

A. This chapter shall not be construed to affect vested water rights.

B. Any determination made by the director for purposes of this chapter regarding the validity, invalidity, nature, legal character, extent or relative priority of a water right or source of water is not binding for any other purpose, and shall not create a presumption of the validity, invalidity, nature, legal character, extent or relative priority of a water right or water source in any other administrative proceeding or any judicial proceeding.

Article 2 Storage Facility Permits

§ 45-811.01 Underground storage facility permit

A. A person may apply to the director for a constructed underground storage facility permit or a managed underground storage facility permit and may operate an underground storage facility only pursuant to a permit.

B. A person applying to the director for a managed underground storage facility permit may request to have the facility designated as a facility that could add value to a national park, national monument or state park if that park or monument includes any portion of a natural channel of a stream or adjacent floodplain that would benefit from the facility.

C. The director may issue a permit to operate an underground storage facility if the director determines that all of the following apply:

The applicant has the technical and financial capability to construct and operate the facility.
Storage of the maximum amount of water that could be in storage at any one time at the facility is hydrologically feasible.
Storage at the facility will not cause unreasonable harm to land or other water users within the maximum area of impact of the maximum amount of water that could be in storage at any one time at the underground storage facility over the duration of the permit.
The applicant has agreed in writing to obtain any required floodplain use permit from the county flood control district before beginning any construction activities.
The director of environmental quality has determined that the facility is not in a location that will promote either the migration of a contaminant plume or the migration of a poor quality groundwater area so as to cause unreasonable harm or is not in a location that will result in pollutants being leached to the groundwater table so as to cause unreasonable harm, if the proposed water storage at the underground storage facility is exempt from the requirement for an aquifer protection permit under section 49-250, subsection B, paragraph 12, 13 or 24. For any facility exempt under section 49-250, subsection B, paragraph 24, the director of water resources, after consultation with the director of the department of environmental quality, may include in the permit any requirements, including operation, maintenance, monitoring, record keeping, reporting, contingency plan or remedial action requirements, as the director of water resources deems necessary.

D. The director may designate a managed underground storage facility as one that could add value to a national park, national monument or state park if the director finds that all of the following apply:

The applicant has agreed in writing to maintain a quantified, minimum base flow and annual discharge to the stream for the duration of the permit.
The project will benefit the groundwater basin as a whole.

§ 45-812.01 Groundwater savings facility permit

A. A person may apply to the director for a groundwater savings facility permit and may operate a groundwater savings facility only pursuant to a permit.

B. The director may issue a permit to operate a groundwater savings facility if the director determines that all of the following apply:

Operation of the facility will cause the direct reduction or elimination of groundwater withdrawals in an active management area or an irrigation non-expansion area by means of delivery of water other than groundwater pumped from within that active management area or irrigation non-expansion area that the recipient will use in lieu of groundwater that the recipient would otherwise have used.
The applicant will deliver water other than groundwater pumped from within the active management area or irrigation non-expansion area in which the groundwater savings facility is located to an identified groundwater user who will use and agrees in writing to use the water delivered to the facility on a gallon-for-gallon substitute basis directly in lieu of groundwater that otherwise would have been pumped from within the active management area or irrigation non-expansion area.
The in lieu water is the only reasonably available source of water for the recipient other than groundwater pumped from within the same active management area or irrigation non-expansion area in which the groundwater savings facility is located.
The water delivered as in lieu water would not have been a reasonable alternative source of water for the recipient except through the operation of the groundwater savings facility.
The water delivered to the recipient as in lieu water was not delivered before October 1, 1990.
The applicant has submitted a plan satisfactory to the director that describes how the applicant will prove the quantity of groundwater saved at the facility each year and what evidence will be submitted with the applicant's annual report as required by section 45-875.01 to prove the groundwater savings. The plan may rely on the following factors:

(a) The recipient's cost of pumping groundwater relative to the cost of in lieu water and alternative sources of water available to the recipient.

(b) The historic quantity of groundwater pumped by the recipient at the location of the intended use of the in lieu water.

(d) The recipient's legal right to withdraw or use groundwater pursuant to chapter 2 of this title.

(e) The amount of central Arizona project water for which the recipient anticipates accepting delivery.

(f) The historic amount of power used to pump groundwater at the groundwater savings facility compared to the power used during a year in which the recipient received in lieu water.

(g) The factors that prevent the recipient from using the water delivered as in lieu water without the operation of the groundwater savings facility.

(h) Any other criteria the director may deem to be relevant.

§ 45-813.01 Land use ordinances

If any storage facility is to be located within a city or town, the director may consider for purposes of issuing the storage facility permit any land use ordinance provision addressing public health and safety and the aesthetics otherwise governing the use of land where that facility is to be located.

§ 45-814.01 Contents of storage facility permit

A. A storage facility project permit shall include the following information:

The name and mailing address of the person to whom the permit is issued.
The name of the active management area, irrigation non-expansion area, groundwater basin or groundwater sub-basin, as applicable, in which the facility will be located.
The design capacity of the facility and the plan of operation of the facility.
The maximum annual amount of water that may be stored at the facility.
Any monitoring required under subsection F of this section.
Any conditions consistent with this chapter.
The duration of the permit.
Any other information as determined by the director.

B. If the storage facility will be a groundwater savings facility, the permit shall include the following information in addition to the information required by subsection A of this section:

The plan by which the applicant will prove the quantity of groundwater saved at the storage facility each year.
The name of the recipient and the location and registration number of the well or wells from which groundwater withdrawals will be curtailed.

C. If the storage facility will be a managed underground storage facility and will be designated as a facility that could add value to a national park, national monument or state park, the permit shall include the following information in addition to the information required by subsection A of this section:

The quantified, minimum base flow and annual discharge to the stream that the applicant has agreed to maintain.
The annual quantity of water eligible for long-term storage credits for the facility and the annual quantity of water projected to be consumptively used by the enhancement of the national park, national monument or state park.
A description of the national park, national monument or state park that would benefit from the project.

D. The director may issue a storage facility permit for a period of not more than fifty years, except that on request of the holder of the permit the director may renew the permit if the director determines that the requirements of section 45-811.01, subsections C and D and section 45-812.01, subsection B apply, if those requirements applied at the time of issuance. In making this determination, the director shall not consider land uses and water uses in the area of impact of the water stored at the storage facility that were not in existence when the permit was issued.

E. The holder of a storage facility permit may apply to the director for approval to convey the permit to another person. The director may approve the conveyance if the director determines that the person to whom the permit is to be conveyed and the storage facility will continue to meet the applicable requirements of sections 45-811.01 and 45-812.01.

F. The director may require the holder of a storage facility permit to monitor the operation of the facility and the impact of water storage at the facility on land and other water users within the area of impact of water stored at the storage facility. In determining any monitoring requirements, the director of water resources shall cooperate with the department of environmental quality and, to the extent possible, shall coordinate monitoring requirements with those required by the department of environmental quality.

G. The director, on the director's initiative or on request of the holder of the storage facility permit, may modify the conditions of the storage facility permit. In determining whether modifications are necessary, the director shall not consider land uses and water uses in the area of impact of the water stored at the storage facility that were not in existence when the permit was issued.

H. Nothing in this article shall be construed as modifying or infringing on any existing water rights or private property rights nor shall anything in this article prevent any person or entity, whether governmental or private, from undertaking any flood control projects, including removal of vegetation within the channel of the stream or on the adjacent floodplain or diverting the permitted flow from the natural stream channel at the end of the permitted period.

§ 45-815.01 Facilities not qualifying as storage facilities

The following shall not be permitted as underground storage facilities:

A body of water, as defined by section 45-131, unless it has been designed, constructed or altered so that water storage is a principal purpose of the body of water.
Aqueducts, irrigation canals and other man-made water conveyance systems.
Water that incidentally recharges an aquifer during the course of its use for agricultural, municipal, mining or industrial purposes.

Article 3 Water Storage Permits and Recovery Well Permits

§ 45-831.01 Water storage permits

A. A person may apply to the director for a water storage permit and may store water at a storage facility only pursuant to a water storage permit.

B. The director may issue a water storage permit to store water at a storage facility if the director determines that all of the following apply:

The applicant has a right to use the proposed source of water. Any determination made by the director for purposes of this subsection regarding the validity, nature, extent or relative priority of a water right claimed by the applicant or another person is not binding in any other administration proceeding or in any judicial proceeding.
The applicant has applied for any water quality permit required by the department of environmental quality under title 49, chapter 2, article 3 and by federal law.
The water storage will occur at a permitted storage facility.

C. In addition to the requirements of subsection B of this section, if the applicant has applied for a water storage permit to store water at a groundwater savings facility, the director shall not issue the water storage permit unless the applicant has agreed in writing to comply with the plan by which the quantity of groundwater saved at the facility will be proved each year.

D. If the director issues a water storage permit, the director may make, if possible, the following determinations:

Whether the water to be stored is water that cannot reasonably be used directly by the applicant and otherwise meets the requirements of section 45-852.01 for long-term storage credits.
If use of the water to be stored is appurtenant to a particular location, and if so, where the water may be legally used after recovery. Any determination made by the director for purposes of this subsection regarding the validity, nature, extent or relative priority of a water right claimed by the applicant or another person is not binding in any other administrative proceeding or in any judicial proceeding.

E. The director may issue a water storage permit for a period of not more than fifty years, except that:

On request of the holder of the permit, the director may renew the permit if the director determines that the requirements of subsection B of this section apply and, if the requirement of subsection C of this section applied at the time of issuance, that the requirement of subsection C of this section applies at the time of renewal.
Subject to the provisions of this chapter, the holder of long-term storage credits earned pursuant to the permit may recover the water over a period longer than the duration of the permit.

F. The holder of a water storage permit may apply to the director for approval to convey the permit to another person. The director may approve the conveyance if the director determines that the person to whom the permit is to be conveyed and the water storage will continue to meet the applicable requirements of this section. If long-term storage credits accrued pursuant to the water storage permit are being assigned pursuant to section 45-854.01 with the water storage permit, the director shall be given notice of the impending assignment of long-term storage credits at the time the holder of the water storage permit applies to convey the permit.

G. A person who holds a water storage permit may apply to the director on a form approved by the director for a modification of that water storage permit. The director may modify the permit within twenty days of receiving the application without complying with section 45-871.01 if all of the following apply:

The holder of the storage facility permit with which the water storage permit is affiliated has consented to the modification.
The modification to the water storage permit does not require a modification of the affiliated water storage facility permit.
The only modification requested is to add an amount of Colorado river water as a type of water to be stored under the water storage permit.
Water storage of Colorado river water has previously been permitted at the affiliated storage facility.
The person requesting the modification has the right to use the Colorado river water.

H. A water storage permit shall include the following information:

The name and mailing address of the person to whom the permit is issued.
The storage facility where the water storage will occur and the name of the active management area, irrigation non-expansion area, groundwater basin or groundwater sub-basin, as applicable, in which that facility is located.
The maximum annual amount of water that may be stored.
If the applicable finding of subsection D of this section has been made, whether the water to be stored is water that cannot reasonably be used directly by the applicant.
If the applicable finding of subsection D of this section has been made, any restrictions on where the water to be stored may legally be used.
Other conditions consistent with this chapter.
The duration of the permit.

I. If the water storage will occur at a groundwater savings facility, the water storage permit shall include, in addition to the information required by subsection H of this section, the requirements of the plan by which the quantity of groundwater saved at the storage facility will be proved each year.

J. If the director of the department of water resources decides to issue a water storage permit and the applicant has not received a water quality permit required by the department of environmental quality under title 49, chapter 2, article 3 and by federal law, the director of the department of water resources shall make receipt of the water quality permit a condition of the water storage permit and the holder of the water storage permit shall not store water until receiving the water quality permit.

§ 45-832.01 Use of stored water

A. Water that has been stored pursuant to a water storage permit may be used or exchanged only in the manner in which it was permissible to use or exchange the water before it was stored.

B. Water that has been stored pursuant to a water storage permit may be used only in the location in which it was permissible to use the water before it was stored.

C. Water that has been stored pursuant to a water storage permit may be used for replenishment purposes only in the active management area in which the water is stored, unless the water is recovered and transported to another active management area.

D. Stored water may be used only as follows:

The water may be recovered by the storer and used on an annual basis in accordance with section 45-851.01.
The water may be credited to the storer's long-term storage account, if the water meets the requirements of section 45-852.01, and the long-term storage credits may be used in accordance with the provisions of this chapter.
A district that is storing water may have the stored water credited to its master replenishment account, if the water would meet the requirements of long-term storage credits as prescribed by section 45-852.01.
A conservation district that is storing water may have the stored water credited to its conservation district account, if the water would meet the requirements of long-term storage credits as prescribed by section 45-852.01.
A water district that is storing water may have the stored water credited to its water district account, if the water would meet the requirements of long-term storage credits as prescribed by section 45-852.01.

§ 45-833.01 Designation of nonrecoverable water

A. At the request of the applicant, the director may designate a water storage permit as storing nonrecoverable water. If the water storage occurs within an active management area, the water storage permit may be designated in this manner only if the storage is consistent with the active management area's augmentation program.

B. Water stored pursuant to a water storage permit that has been designated as storing nonrecoverable water may not be recovered on an annual basis, may not be credited to a long-term storage account and may not be used for replenishment purposes.

§ 45-834.01 Recovery of stored water; recovery well permit; emergency temporary recovery well permit; well construction

A. A person who holds long-term storage credits or who may recover water on an annual basis may recover the water stored pursuant to a water storage permit only:

If the person seeking to recover stored water has applied for and received a recovery well permit under this article.
For water stored within an active management area, if one of the following applies:

(a) The proposed recovery well is located within the area of impact of the stored water, as determined by the director, and either the person recovering the water is the storer or the stored water to be recovered is Colorado River water. If the stored water to be recovered is effluent that is stored in a managed underground storage facility and if the proposed recovery well is not an already constructed well owned by the person recovering the water and is located within the exterior boundaries of the service area of a city, town, private water company or irrigation district, that city, town, private water company or irrigation district must be notified by the person recovering the stored water and must have the right to offer to recover the water stored on behalf of that person. If the city, town, private water company or irrigation district offers to recover the water on behalf of the person seeking recovery and the water that is offered for recovery is of comparable quality to the water that the person could recover, the person seeking to recover the water shall consider accepting the best offer from the city, town, private water company or irrigation district overlying the area of impact that has offered to recover the stored water.

(b) The proposed recovery well is located outside the area of impact of the stored water, as determined by the director, and all of the following apply:

(i) The proposed recovery well is located within the same active management area as storage.

(ii) The director determines that recovery at the proposed location is consistent with the management plan and achievement of the management goal for the active management area.

(iii) If the proposed recovery well is located within the exterior boundaries of the service area of a city, town, private water company or irrigation district, that city, town, private water company or irrigation district is the person seeking to recover the water or has consented to the location of the recovery well.

(iv) If the proposed recovery well is located outside, but within three miles of, the exterior boundaries of the service area of a city, town, private water company or irrigation district, the closest city, town, private water company or irrigation district has consented to the location of the recovery well.

(c) The proposed recovery well is located within the area of impact of the stored water, as determined by the director, the person recovering the water is not the storer, the stored water to be recovered is not Colorado River water and all of the conditions prescribed by subdivision (b), items (i) through (iv) of this paragraph are met.

For water stored outside of an active management area, if recovery will occur within the same irrigation non-expansion area, groundwater basin or groundwater sub-basin, as applicable, in which the water was stored.

B. Before recovering from any well water stored pursuant to a water storage permit, a person shall apply for and receive a recovery well permit from the director. The director shall issue the recovery well permit if the director determines that:

If the application is for a new well, as defined in section 45-591, or except as provided in paragraphs 2 and 3 of this subsection for an existing well, as defined in section 45-591, the proposed recovery of stored water will not unreasonably increase damage to surrounding land or other water users from the concentration of wells. The director shall make this determination pursuant to rules adopted by the director.
If the applicant is a city, town, private water company or irrigation district in an active management area and the application is for an existing well within the service area of the city, town, private water company or irrigation district, the applicant has a right to use the existing well.
If the applicant is a conservation district and the application is for an existing well within the conservation district and within the groundwater basin or sub-basin in which the stored water is located, the applicant has a right to use the existing well.

C. A city, town, private water company or irrigation district in an active management area may apply with a single application to the director to have all existing wells, as defined in section 45-591, that the applicant has the right to use within its service area listed as recovery wells on the recovery well permit, if those wells otherwise meet the requirements of this section.

D. If the applicant is a conservation district, the director may issue an emergency temporary recovery well permit without complying with section 45-871.01, subsection F if the director determines that all of the following apply:

The conservation district cannot reasonably continue to supply central Arizona project water directly to a city, town, private water company or irrigation district due to an unplanned failure of a portion of the central Arizona project delivery system.
The emergency temporary recovery well permit is necessary to allow the conservation district to provide immediate delivery of replacement water to the city, town, private water company or irrigation district.
The application is for an existing well as defined in section 45-591 that is within the groundwater basin or groundwater sub-basin in which the stored water is located, is within the conservation district and is within the service area of the city, town, private water company or irrigation district.

E. An emergency temporary recovery well permit issued pursuant to subsection D of this section may be issued for a period of up to ninety days and may be extended for additional ninety day periods if the director determines that the conditions prescribed in subsection D of this section continue to apply.

F. If the application for a recovery well permit is approved, the director shall issue a permit and the applicant may proceed to construct or use the well. If the application is rejected, the applicant shall not proceed to construct or use the well. A new well shall be completed within one year of receipt of the permit, unless the director in granting the permit approves a longer period to complete the well. If the well is not completed within one year or the longer period approved by the director, the applicant shall file a new application before proceeding with construction.

G. A recovery well permit shall include the following information:

The name and mailing address of the person to whom the permit is issued.
The legal description of the location of the existing well or proposed new well from which stored water may be recovered pursuant to the permit.
The purpose for which the stored water will be recovered.
The depth and diameter of the existing well or proposed new well from which stored water may be recovered pursuant to the permit.
The legal description of the land on which the stored water will be used.
The maximum pumping capacity of the existing well or proposed new well.
If the permit is for a proposed new well, the latest date for completing the proposed new well.
Any other information as the director may determine.

§ 45-835.01 Simultaneous applications

A person may apply to the director for a storage facility permit, a water storage permit to store water at the storage facility and a recovery well permit to recover the water stored at the storage facility at the same time and the director shall process the applications for the permits simultaneously.

§ 45-836.01 Effect of storage facilities, water storage and recovery on service areas

A. In an active management area, if a city, town or private water company operates a constructed underground storage facility and stores water at a constructed underground storage facility pursuant to a permit issued under this chapter, any portion of the area of impact of the stored water that is located within the exterior boundaries of the service area of the city, town or private water company but is not part of the service area of any other city, town, private water company or irrigation district is deemed to be part of the service area of the city, town or private water company.

B. In an active management area, if a city, town, private water company or irrigation district operates a storage facility or stores water outside its service area or recovers stored water outside its service area pursuant to a permit issued under this chapter, the area of land that contains the storage facility, the recovery facilities or a system for the transportation of water is not part of the service area of the city, town, private water company or irrigation district.

Article 3.1 Indian Water Rights Settlements

§ 45-841.01 Accrual of long-term storage credits; Indian water rights settlements

A. To further the implementation of Indian water rights settlements in this state, an Indian community may accrue long-term storage credits as prescribed by this section.

B. This section applies only to the settlement of a water rights claim by a federally recognized Indian community in this state if the settlement provides for off-reservation storage of its central Arizona project water and only after the settlement results in a dismissal with prejudice of a class action claim that has been pending in the United States district court for more than five years.

C. Before accruing any long-term storage credits under this section, both of the following conditions apply:

A party seeking to participate in the accrual of long-term storage credits under this section shall file written notice with the director that the requirements of subsection B of this section have been met.
The director shall find that the requirements of subsection B of this section have been met.

D. Before accruing any long-term storage credits under this section, a party seeking to participate in the accrual of long-term storage credits under this section shall file with the director all of the following information:

A written notice of the party's intent to begin the delivery of central Arizona project water that is available to the Indian community to the holder of grandfathered groundwater rights in an active management area.
A sworn statement by the holder of the grandfathered groundwater rights that the holder will use the water delivered off of Indian community lands on a gallon-for-gallon substitute basis instead of groundwater that otherwise would have been pumped pursuant to the grandfathered groundwater rights from within an active management area.
A listing and description of the grandfathered groundwater rights that will not be exercised by the holder because of the delivery of the water that is delivered by the Indian community.
A hydrologic report assessing the effect of nonexercise of grandfathered groundwater rights under this section on any underground storage facility that was constructed as a state demonstration project and that is located within ten miles of the point of withdrawal for the grandfathered groundwater rights.

E. The director shall review the hydrologic report filed pursuant to subsection D, paragraph 4 of this section and shall make such modifications to the state demonstration project's underground storage facility permit as the director deems appropriate.

F. If the director determines that the parties have complied with subsection D of this section, the Indian community may begin accruing long-term storage credits for the delivery of central Arizona project water to the holder of the grandfathered groundwater rights, but only if the following apply:

By March 31 of each year, the holder of the grandfathered groundwater rights files an annual report with the director for the preceding calendar year. The annual report shall include the following information:

(a) The total quantity of water received from the Indian community during the year for use by the holder under this section.

(b) A listing of those grandfathered groundwater rights that were not exercised during the year by the holder because of the receipt of central Arizona project water delivered by the Indian community.

The director finds that the water reported as received by the grandfathered groundwater right holder was used on a gallon-for-gallon substitute basis for groundwater.
The Indian community has offered to sell the Arizona water banking authority ten per cent of any long-term storage credits accruable by the Indian community under this section at a price per acre-foot at the time of sale equal to the authority's cost of delivering and storing water at an underground storage facility that was constructed as a state demonstration project and that is located within ten miles of the point of withdrawal of any of the grandfathered groundwater rights identified in the list filed with the director pursuant to subsection D, paragraph 3 of this section, except that any credits purchased pursuant to such offer may not be recovered within five miles of the exterior reservation boundary of the Indian community.

G. The water that is received under this section by the holder of the grandfathered groundwater right is deemed to be groundwater for all purposes of chapter 2 of this title as if the holder had withdrawn it from a well. The holder is responsible for all records, reports and fees required by chapter 2 of this title relating to the water received.

H. The director shall establish a long-term storage account for the Indian community in accordance with section 45-852.01 and each year shall credit to that long-term storage account ninety-five per cent of the water received by the holder of the grandfathered groundwater right during the preceding year that meets the requirements of subsection F of this section.

I. Long-term storage credits accrued pursuant to this section may be used or assigned in any manner that is consistent with this chapter.

J. The maximum amount of long-term storage credits that may be accrued by an Indian community under this section in any year is ten thousand acre-feet.

Article 4 Accounting

§ 45-851.01 Recovery of stored water on an annual basis

A. Except as provided in subsections B, E and F of this section, a storer may recover the recoverable amount of water stored after January 1 of a calendar year on or before December 31 of the same calendar year.

B. If water is stored pursuant to a water storage permit and its use is based on a decreed or appropriative water right, the approximate recoverable amount of water stored in a month shall be recovered on or before the last day of the following month or within the same calendar year, whichever is earlier, unless the water is credited to a long-term storage account as prescribed by section 45-852.01.

C. Water stored after January 1 of a calendar year and not recovered on or before December 31 of the same calendar year may be credited to the storer's long-term storage account to the extent that the stored water is eligible for long-term storage credits as prescribed by section 45-852.01.

D. Water that is stored after January 1 of a calendar year, that is not recovered on or before December 31 of the same calendar year and that is not eligible to be credited to the storer's long-term storage account may not be recovered at any other time.

E. If the water stored was effluent stored at a managed underground storage facility that has not been designated as a facility that could add value to a national park, national monument or state park and subsection F of this section does not apply, the storer may recover during a year only fifty percent of the recoverable amount of water stored between January 1 and December 31 of that year. If the storer recovers during the year less than fifty percent of the recoverable amount of the water stored during that year, the difference between fifty percent of the recoverable amount and the amount of stored water recovered during the year may be credited to the storer's long-term storage account to the extent that the stored water is eligible for long-term storage credits as prescribed by section 45-852.01.

F. If the water stored was effluent stored at a managed underground storage facility that qualifies as an existing effluent managed underground storage facility and that has not been designated as a facility that could add value to a national park, national monument or state park, the storer may recover during a year only ninety-five percent of the recoverable amount of the water stored between January 1 and December 31 of that year. If the storer recovers during the year less than ninety-five percent of the recoverable amount of the water stored during that year, the difference between ninety-five percent of the recoverable amount and the amount of stored water recovered during the year may be credited to the storer's long-term storage account to the extent that the stored water is eligible for long-term storage credits as prescribed by section 45-852.01.

§ 45-852.01 Long-term storage accounts

A. The director shall establish one long-term storage account for each person holding long-term storage credits. The director shall establish subaccounts within the long-term storage account according to each active management area, irrigation non-expansion area, groundwater basin or groundwater subbasin in which the person's stored water is located. The long-term storage account shall be further subdivided by type of water, if the person holds long-term storage credits for more than one type of water.

B. Water stored pursuant to a water storage permit at a storage facility may be credited to a long-term storage account if the director determines that all of the following apply:

Either:

(a) The water that was stored was water that cannot reasonably be used directly.

(b) The water was stored in a groundwater savings facility located in an active management area that does not have a management goal of achieving or maintaining a safe yield condition, the water was stored between January 1, 2020 and December 31, 2026 and the director determines that the storage assists in implementing within this state a drought contingency plan for the lower basin of the Colorado River. The total maximum amount that may qualify under this subdivision is fifteen thousand acre-feet per year.

If the stored water was stored at a storage facility within an active management area, either:

(a) The water would not have been naturally recharged within the active management area.

(b) If the water was stored at a managed underground storage facility that has been designated as a facility that could add value to a national park, national monument or state park and the water stored is effluent, the water stored is water that could have been used or disposed of by the storer by means other than discharging the effluent into the stream.

The stored water was not recovered on an annual basis pursuant to section 45-851.01.

C. The director shall credit ninety-five percent of the recoverable amount of stored water that meets the requirements of subsection B of this section to the storer's long-term storage account, except that:

If the water was stored at a managed underground storage facility that does not qualify as an existing effluent managed underground storage facility and that had not been designated at the time of storage as a facility that could add value to a national park, national monument or state park and the water stored is effluent, the director shall credit to the storer's long-term storage account fifty percent of the recoverable amount of water that meets the requirements of subsection B of this section. For storage of effluent in a managed underground storage facility that is located in a recreational corridor channelization district established pursuant to title 48, chapter 35, the director may increase the storage credits earned from fifty percent to ninety-five percent if both of the following apply:

(a) The effluent was not discharged into the stream where the facility is located before the permit application for that facility was filed.

(b) The director determines that the storage of effluent in the facility will provide a greater benefit to aquifer conditions in the active management area or, if outside an active management area, to the groundwater basin than would accrue to the active management area or groundwater basin if the effluent is used or disposed of in another manner.

If the water was stored at a groundwater savings facility and the storer has not met the burden of proving that one hundred percent of the in lieu water was used on a gallon-for-gallon substitute basis for groundwater, the director shall credit to the storer's long-term storage account only the percentage of the in lieu water that meets the requirements of subsection B of this section and that was proven to the director's satisfaction as being used on a gallon-for-gallon substitute basis for groundwater.
The director shall credit to the storer's long-term storage account ninety percent of the recoverable amount of the water that meets the requirements of subsection B of this section if all of the following apply:

(a) The stored water was central Arizona project water that qualifies as water that cannot reasonably be used directly due solely to the exclusion of groundwater withdrawn by the storer for mineral extraction or metallurgical processing under section 45-802.01, paragraph 23, subdivision (c).

(b) The storer was engaged in mineral extraction and metallurgical processing within an initial active management area on or before January 1, 2011.

(c) All exterior boundaries of the storage facility that is used to store the stored water are more than twenty miles from a well owned by the storer on January 1, 2012 and that well is not an exempt well and any one or more of the following apply:

(i) The well is an existing well as defined in section 45-591, paragraph 1.

(ii) The department has issued a permit for the well under section 45-599, subsection C.

(iii) The well was drilled pursuant to a mineral extraction and metallurgical processing permit issued by the department under section 45-514.

Except as otherwise provided in paragraph 2 of this subsection, the director shall credit to the storer's long-term storage account or conservation district account one hundred percent of the recoverable amount of water that meets the requirements of subsection B of this section if any of the following applies:

(a) The water stored was effluent that was stored at a constructed underground storage facility, a groundwater savings facility or a managed underground storage facility that was designated at the time of storage as a facility that could add value to a national park, national monument or state park.

(b) The water was stored in an active management area and the stored water is water from outside the active management area that would not have reached the active management area without the efforts of the holder of the long-term storage credits.

(c) The water was stored outside an active management area and the stored water is water from outside the groundwater basin in which the water was stored that would not have reached the groundwater basin without the efforts of the holder of the long-term storage credits.

(d) The water was stored for purposes of establishing and maintaining a replenishment reserve pursuant to section 48-3772, subsection E.

(e) The water was stored for replenishment purposes pursuant to section 48-3771 and credited directly to a conservation district account pursuant to section 45-859.01, subsection E.

D. The director shall credit a person's long-term storage account by the amount of long-term storage credits assigned to that person by another holder of long-term storage credits pursuant to section 45-854.01.

E. The director shall debit the appropriate subaccount of a person's long-term storage account:

One hundred percent of the amount of stored water that the holder of the long-term storage credits has recovered during the calendar year pursuant to the permit.
The amount of long-term storage credits that the person has assigned to another person or transferred to a master replenishment account, conservation district account or water district account.
If the water was stored in an active management area, the amount of water during the calendar year that migrates to a location outside the active management area or to a location within the active management area where it cannot be beneficially used within a reasonable period of time by persons other than the storer with rights to withdraw and use groundwater.
If the water was stored outside of an active management area, the amount of water during the calendar year that migrates to a location outside the groundwater basin in which the storage facility is located or to a location in the groundwater basin where it cannot be beneficially used within a reasonable period of time by persons other than the storer with rights to withdraw and use groundwater.
The amount of long-term storage credits that the storer, pursuant to section 45-853.01, subsection B, has applied to offset groundwater withdrawn or used in excess of the storer's per capita municipal conservation requirements under the second management plan.
The amount of long-term storage credits that are held by the Arizona water banking authority and that the authority has chosen to extinguish.

F. To the extent the total amount of water withdrawn by a person from wells designated as recovery wells pursuant to section 45-834.01 during a calendar year exceeds the amount of stored water recovered by the person on an annual basis pursuant to section 45-851.01 and the amount of long-term storage credits recovered by the person, the excess amount of water recovered shall be considered groundwater withdrawn pursuant to chapter 2 of this title.

§ 45-853.01 Restricted uses of long-term storage credits

A. If the director has included an amount of long-term storage credits under section 45-855.01:

In determining whether to issue a certificate of assured water supply to the holder of the long-term storage credits, that amount of long-term storage credits shall be recovered only for a use that, as determined by the director, supplies water to the subdivision to which the certificate of assured water supply applies.
In designating or redesignating a city, town or private water company as having an assured water supply, that amount of long-term storage credits shall be recovered only for a use that, as determined by the director, supplies water to that city, town or private water company.
In determining whether to issue a report of adequate water supply for a subdivision to the holder of long-term storage credits, that amount of long-term storage credits shall be recovered only for a use that, as determined by the director, supplies water to the subdivision to which the report of adequate water supply applies.
In designating a city, town or private water company as having an adequate water supply, that amount of long-term storage credits shall be recovered only for a use that, as determined by the director, supplies water to that city, town or private water company.

B. The storer of long-term storage credits may apply those long-term storage credits to offset any amount of groundwater that the storer withdraws or uses before 2000 in excess of the storer's per capita municipal conservation requirement in violation of the second management plan if the storer proves to the satisfaction of the director that the following conditions are met:

The storer stored the water at a storage facility that is located in the same active management area as the storer's service area.
The long-term storage credits used to offset the storer's per capita municipal conservation requirements violation were earned before 2000.
The water stored was effluent or central Arizona project water.

C. Long-term storage credits may not be used to demonstrate an assured water supply or an adequate water supply if the long-term storage credits were accrued by storing effluent at a managed underground storage facility that has not been designated as a facility that could add value to a national park, national monument or state park and any of the following applies:

The managed underground storage facility does not qualify as an existing effluent managed underground storage facility.
The managed underground storage facility qualifies as an existing effluent managed underground storage facility and the long-term storage credits were accrued before January 31, 2019.

§ 45-854.01 Assignability of long-term storage credits

A. Except as provided in section 45-855.01, subsection C, the holder of long-term storage credits may assign by grant, gift, sale, lease or exchange all or part of the holder's long-term storage credits.

B. Except as provided in subsection C of this section, an assignment of long-term storage credits from one person to another is valid on receipt by the director of notification of the assignment in writing on a form that is provided by the director and that has been signed by both the assignor and assignee.

C. The director may reject and invalidate any assignment of long-term storage credits in which the stored water would not have met the requirements for long-term storage credits as prescribed by section 45-852.01 if the assignee had stored the water.

§ 45-855.01 Effect of long-term storage credits on assured water supply and adequate water supply

A. In an active management area, except as provided in section 45-853.01, subsection C, and on the request of a person who holds long-term storage credits, the director shall include the amount of long-term storage credits requested by the person in determining whether to issue a certificate of assured water supply to the person pursuant to section 45-576, or if the person is a city, town or private water company, whether to designate or redesignate the city, town or private water company as having an assured water supply. This subsection shall not be construed to prohibit or require the director to include projected additions to a long-term storage account in determining whether to issue a certificate of assured water supply to the person, or if the person is a city, town or private water company, whether to designate or redesignate the city, town or private water company as having an assured water supply.

B. Outside an active management area, except as provided in section 45-853.01, subsection C and on the request of a person who holds long-term storage credits, the director shall include the amount of long-term storage credits requested by the person in determining whether to issue a report of adequate water supply pursuant to section 45-108 for a subdivision to the person, or if the person is a city, town or private water company, whether to designate the city, town or private water company as having an adequate water supply. This subsection shall not be construed to prohibit or require the director to include projected additions to a long-term storage account in determining whether to issue a report of adequate water supply for a subdivision to the person, or if the person who holds the long-term storage account is a city, town or private water company, whether to designate the city, town or private water company as having an adequate water supply.

C. Long-term storage credits included by the director in making the determinations and designations in subsections A and B of this section are not assignable by the person holding the credits, unless the director has determined that the credits will continue to be used for the subdivision for which the certificate of assured water supply or certificate of adequate water supply has been issued or for the service area that has been designated as having an assured water supply or an adequate water supply.

§ 45-856.01 Protection of the stored water

A. Except as provided in subsection B or E of this section, in an active management area the director shall not issue any of the following permits, certificates or designations unless the applicant demonstrates that the application for the permit, certificate or designation would have satisfied the requirements for issuance of the permit, certificate or designation if water stored pursuant to this chapter did not exist:

An application for a groundwater withdrawal permit under chapter 2, article 7 of this title, if a proposed point of withdrawal for the permit is located within the area of impact of the stored water.
An application for designation of a city, town or private water company as having an assured water supply under section 45-576, if any portion of the city, town or private water company that is proposed to be designated is located within the area of impact of the stored water.
An application for a certificate of assured water supply under section 45-577, if a proposed point of withdrawal for a proposed source of water is located within the area of impact of the stored water.
An application for a permit to construct a new well or a replacement well under section 45-599, if the proposed well is located within the area of impact of the stored water.

B. Subsection A, paragraphs 2 and 3 of this section do not apply to the holder of long-term storage credits who, pursuant to section 45-855.01, has requested that the director include stored water in determining whether to issue a certificate of assured water supply or designate or redesignate a city, town or private water company as having an assured water supply.

C. Except as provided in subsection D or E of this section, outside an active management area the director shall not issue any of the following decisions of adequate water supply under section 45-108 unless the applicant demonstrates that the application would have satisfied the requirements for issuance of the decision if the stored water did not exist:

A decision stating that an adequate water supply exists for a subdivision, if a proposed point of withdrawal for a proposed source of water is located within the area of impact of the stored water.
A decision designating a city, town or private water company as having an adequate water supply, if any portion of the city, town or private water company that is proposed to be designated is located within the area of impact of the stored water.

D. Subsection C of this section does not apply to the holder of long-term storage credits who has requested pursuant to section 45-855.01 that the director include stored water in determining whether to issue a decision stating that an adequate water supply exists for a subdivision or designating a city, town or private water company as having an adequate water supply.

E. Subsections A and C of this section do not apply if the director determines that the water stored pursuant to this chapter will not be recovered from within the area of impact of the stored water.

§ 45-857.01 Groundwater replenishment district incidental replenishment factor; definitions

A. With respect to a groundwater replenishment district and not later than the first day of each reporting year, the director shall determine the incidental replenishment factor for the reporting year and shall report that ratio to the groundwater replenishment district.

B. For purposes of this section:

"Incidental replenishment" means water that percolates to an aquifer after being used for municipal purposes in the groundwater replenishment district, except for water that is added to an aquifer pursuant to this chapter.
"Incidental replenishment factor" means the ratio of the amount of incidental replenishment in the groundwater replenishment district that the director estimates will occur in the reporting year to the amount of water that the director estimates will be used in the district by the district members in the reporting year.

§ 45-858.01 Master replenishment account; debits and credits

A. The director shall establish a long-term storage account and a master replenishment account for each groundwater replenishment district.

B. The director shall compute the master replenishment account debit for a reporting year for the district as follows:

For each district member, compute the replenishment obligations as prescribed by section 48-4463.
Add the amounts computed under paragraph 1 of this subsection for all district members.

C. For each reporting year, the amount computed under subsection B of this section for the district shall be debited from the district's master replenishment account.

D. On application by a district to the director, credits in the district's long-term storage account, including credits that are registered for water stored pursuant to article 6 of this chapter and for which a district has assumed responsibility pursuant to section 45-896.01, shall be transferred and credited to the district's master replenishment account.

E. For each reporting year, the director shall credit the district's master replenishment account by the amount of water stored by the district during the reporting year, if the district has requested the director to credit the stored water directly to its master replenishment account and the stored water would otherwise be eligible for credits in a long-term storage account.

F. Credits in a master replenishment account may not be assigned or transferred out of the master replenishment account.

G. If the director, either through an audit of the records of the district or a district member pursuant to section 45-880.01 or otherwise, establishes a misstatement or error regarding information relevant to the determination of master replenishment account debits or credits, the director may adjust accordingly the credits or debits for the appropriate year.

§ 45-859.01 Conservation district account; replenishment reserve subaccount; debits and credits

A. The director shall establish a long-term storage account and a conservation district account for each active management area in which a member land or member service area is or may be located. The director shall establish a replenishment reserve subaccount within the long-term storage account for each active management area in which a member land or member service area is or may be located.

B. For each reporting year, the groundwater replenishment obligation as defined in section 48-3701 for each active management area shall be debited from the conservation district account for that active management area.

C. For each reporting year, the contract replenishment obligation as defined in section 48-3701 for each active management area shall be debited from the conservation district account for that active management area.

D. On application by a conservation district to the director, credits in the conservation district's long-term storage account for an active management area, including credits earned through the use of excess capacity of each project permitted under article 6 of this chapter, shall be transferred and credited to its conservation district account for the same active management area.

E. After January 1, 2030 or earlier, on approval of the director of water resources pursuant to subsection K of this section, on application by a conservation district to the director, credits in the conservation district's replenishment reserve subaccount for an active management area shall be transferred and credited to its conservation district account for the same active management area, except that any such transfer that would cause the balance in the replenishment reserve subaccount for an active management area to fall below twenty-five per cent of the reserve target for that active management area shall be subject to the approval of the director.

F. Except as provided in subsection E of this section, credits in a replenishment reserve subaccount may be assigned or transferred out of the replenishment reserve subaccount only on application by the conservation district to the director and only if the director determines that the assignment or transfer is warranted due to a reduction in the reserve target as defined in section 48-3701. If credits in a replenishment reserve subaccount are assigned or transferred to any account other than a conservation district account, then five per cent of the assigned or transferred credits shall be permanently extinguished.

G. For each reporting year, the director shall credit the conservation district's conservation district account by the amount of water stored by the conservation district during the reporting year, if the conservation district has requested the director to credit the stored water directly to its conservation district account and the stored water would otherwise be eligible for credits in a long-term storage account.

H. For each reporting year, the director shall credit the conservation district's replenishment reserve subaccount for each active management area by the amount of long-term storage credits developed by the conservation district in that active management area during the reporting year for that purpose.

I. By October 31 of each year, the director shall determine whether the conservation district has completed the groundwater replenishment obligation for each active management area as prescribed by section 48-3771.

J. Credits in a conservation district account may not be assigned or transferred out of the conservation district account.

K. A conservation district may apply to the director to transfer credits in the conservation district's replenishment reserve subaccount for an active management area to its conservation district account for the same active management area earlier than January 1, 2030. The application shall specify the reason for the request, state the amount of credits sought to be transferred and include a plan for replacing the credits in the replenishment reserve subaccount. The director shall approve the application if the director determines that both of the following apply:

The conservation district has demonstrated good cause for the transfer.
The conservation district's plan for replacing the transferred credits is adequate.

§ 45-860.01 Water district account; debits and credits

A. The director shall establish a long-term storage account and a water district account for the active management area in which a water district member land or water district member service area is or may be located.

B. For each reporting year, the water district groundwater replenishment obligation, as defined in section 48-4801, shall be debited from the water district account.

C. For each reporting year, the contract replenishment obligation, as defined in section 48-4801, shall be debited from the water district account.

D. On application by a water district to the director, credits in the water district's long-term storage account for an active management area, including credits earned from a state demonstration project permitted pursuant to article 6 of this chapter, shall be transferred and credited to the water district's water district account for the same active management area.

E. For each reporting year, the director shall credit the water district's water district account by the amount of water stored by the water district during the reporting year, if the water district has requested the director to credit the stored water directly to its water district account and the stored water would otherwise be eligible for credits in a long-term storage account.

F. By October 31 of each year, the director shall determine whether the water district has completed the water district groundwater replenishment obligation for the active management area as prescribed by section 48-4972.

G. Credits in a water district account may not be assigned or transferred out of the water district account.

Article 5 Permit Application Procedures, Financial Provisions and Enforcement

§ 45-871.01 Permit application; fee; notice of application; objections; hearing; appeal

A. The director shall prescribe and furnish application forms for the permits prescribed by articles 2 and 3 of this chapter. The application forms shall require the applicant to submit the information needed by the director to determine whether the permit may be issued. The director shall establish and collect a reasonable fee from the applicant to cover the cost of administrative services and other expenses associated with evaluating and issuing each permit. The director shall deposit, pursuant to sections 35-146 and 35-147, all fees received under this subsection in the water resources fund established by section 45-117.

B. On receipt of an application for a permit pursuant to this chapter, the director shall endorse on the application the date of its receipt and shall keep a record of the application. Within fifteen days after receipt of an application for an underground storage facility permit, the director shall post notice of the application on the department's website until the director issues a decision on the application. The notice shall state the name of the applicant, the location of the proposed underground storage facility, the date the application was filed and the application number. The notice required by this subsection is in addition to the notice requirement in subsection D of this section. The director shall conduct a review of the application within one hundred eighty days after receiving the application. If the director determines in the review that the application is incomplete or incorrect, the director shall notify the applicant and the review period is extended by fifteen days. The application is incomplete or incorrect until the applicant files the information requested in the application. The director may conduct independent investigations as necessary to determine whether the application should be approved or rejected.

C. If the application is for water storage at an underground storage facility that is exempt from the requirement for an aquifer protection permit under section 49-250, subsection B, paragraph 12, 13 or 24, the director of water resources shall consult with the director of environmental quality and shall develop a coordinated and unified permit review process, which conforms to the time schedule prescribed by this section, to determine whether the permit application is correct and whether the development of a plan of action for monitoring and data analysis shall be required.

D. Except as provided in subsection E of this section, if the application is determined to be complete and correct and the application is for a storage facility permit or a water storage permit, the director, within fifteen days after that determination or a longer period if requested by the applicant, shall give notice of the application once each week for two consecutive weeks in a newspaper of general circulation in the county or counties in which persons reside who could reasonably be expected to be affected by the water storage. The director shall also give notice by first class mail to each city, town, private water company, conservation district, irrigation district and electrical district that serves land within the area of impact of the stored water. The notice shall state that persons who may be adversely affected by the water storage may file written objections to the issuance of the permit with the director for fifteen days after the last publication of notice. An objection shall state the name and mailing address of the objector, shall be signed by the objector or the objector's agent or attorney and shall clearly set forth the reasons why the permit should not be issued. The grounds for objection are limited to whether the application meets the criteria for issuing the permit being requested as prescribed by articles 2 and 3 of this chapter.

E. If the application is determined to be complete and correct and the application is for a water storage permit to store Colorado river water at a storage facility where storage of Colorado river water has previously been permitted, the director may issue the permit within twenty days after that determination if all of the following apply:

The holder of the storage facility permit with which the water storage permit will be affiliated has consented to the water storage.
The water storage permit will not require a modification of an affiliated water storage facility permit.
Colorado river water will be the only type of water stored under the water storage permit.
The applicant has the right to use the Colorado river water.

F. Except as provided in section 45-834.01, subsection D, if the application is determined to be complete and correct and the application is for a recovery well permit, the director, within fifteen days after the determination or a longer period if requested by the applicant, shall give notice of the application once each week for two consecutive weeks in a newspaper of general circulation in the county in which the applicant proposes to recover stored water. If the application is for a well located inside of or within three miles of the exterior boundaries of the service area of a city, town, private water company or irrigation district, the applicant shall give notice of the application by first class mail to each city, town, private water company or irrigation district within that distance. The applicant shall file proof of the notice with the director. The notice shall state that persons who may be adversely affected by the recovery well may file written objections to the issuance of the permit with the director for fifteen days after the last publication of notice. An objection shall state the name and mailing address of the objector, shall be signed by the objector or the objector's agent or attorney and shall clearly set forth reasons why the permit should not be issued. The grounds for objection are limited to whether the application meets the criteria for issuing a recovery well permit as set forth in section 45-834.01, subsection B. For the purposes of this subsection, if the proposed recovery well is located within three miles outside of the exterior boundaries of the service area of a city, town, private water company or irrigation district, a city, town, private water company or irrigation district within that distance shall be considered a person who may be adversely affected by the recovery well.

G. In appropriate cases, including cases in which a proper objection to the permit 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. At least thirty days before the hearing, the director shall notify the applicant and any person who filed a proper objection to the issuance of the permit. 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.

H. If a hearing is not held, the director shall issue a decision and order within one hundred days after the date notice of the application is first given pursuant to subsection D or F of this section, or within ninety days in the case of an application under article 6 of this chapter. The director shall record and endorse the approval or rejection of the application on the application. If the permit is denied, the director shall return a copy of the application to the applicant specifically stating the reasons for denial.

I. The applicant or any person who filed a proper objection to the application may seek judicial review of the final decision of the director as provided in section 45-114, subsection B in superior court as provided in section 45-405.

J. Section 45-114, subsections A and B govern administrative proceedings, rehearings or review and judicial review of final decisions of the director under this section. If an administrative hearing is held, it shall be conducted in the active management area in which the storage or recovery is located.

K. On receipt of an application for a permit pursuant to this section, the director shall provide written notice of the proposed permit to the city, town or county that has land use jurisdiction over the site that is the subject of the permit. The notice shall be given at the same time and in the same manner as the notices prescribed by subsections D and F of this section in order to provide the city, town or county with the opportunity to comment on the proposed facility's or well's compliance with site planning and operational requirements of the city, town or county. This subsection does not limit the exclusive authority of the director to determine the issuance of the permit or the site of the facility or well or to reduce the authority of the city, town or county to enforce its applicable ordinances governing site planning and operational requirements.

§ 45-872.01 Water measuring devices

A person who stores water at an underground storage facility, who delivers in lieu water to a recipient at a groundwater savings facility or who recovers stored water pursuant to a recovery well permit shall use a water measuring device approved by the director and shall comply with the rules setting forth the requirements and specifications for water measuring devices adopted pursuant to section 45-604.

§ 45-873.01 In lieu water reporting requirements; withdrawal fees

The in lieu water that is delivered pursuant to a groundwater savings facility permit and a water storage permit issued under this chapter is deemed to be groundwater for all purposes of chapter 2 of this title as if the recipient of the in lieu water had withdrawn it from a well. The recipient is responsible for all records, reports and fees required by chapter 2 of this title relating to the in lieu water received.

§ 45-874.01 Long-term storage credit recovery fee; amount; notice; payment; penalty

A. The director shall levy and collect a long-term storage credit recovery fee from each person who recovers long-term storage credits pursuant to a recovery well permit issued under section 45-834.01. The amount of the long-term storage credit recovery fee is equal to the amount of the groundwater withdrawal fee levied for administration and enforcement of chapter 2 of this title pursuant to section 45-611, subsection A, paragraph 1.

B. Not later than October 1 of each year the director shall file in the department an order setting the long-term storage credit recovery fee for the following calendar year.

C. Within thirty days after the director sets the long-term storage credit recovery fee for the following calendar year, the director shall give written notice of the fee to all holders of recovery well permits issued under this chapter.

D. A person shall pay the long-term storage credit recovery fee to the department at the time the person holding a recovery well permit files an annual report pursuant to section 45-875.01. If a person who is required to pay a long-term storage credit recovery fee fails to pay the fee when due, the director may assess and collect a penalty of ten per cent of the unpaid fee, without compounding, for each month or portion of a month that the fee is delinquent. The total penalty assessed under this subsection shall not exceed sixty per cent of the unpaid fee.

E. The director shall deposit, pursuant to sections 35-146 and 35-147, all monies collected pursuant to subsection A of this section in the water resources fund established by section 45-117 and all monies collected pursuant to subsection D of this section in the state general fund.

§ 45-875.01 Annual reports; penalty

A. Each person who holds a storage facility permit shall file an annual report with the director that includes the following information:

The total quantity of water stored at the facility during the year.
The name, address and water storage permit number of each person storing water at the storage facility during the year.
Such other information as the director may reasonably require.

B. Each person who holds a water storage permit shall file an annual report with the director that includes the following information:

The quantity of water from each source stored under the permit during the year.
The quantity of stored water recovered on an annual basis.
The quantity of stored water to be credited to a long-term storage account.
Other information as the director may reasonably require.

C. In addition to the requirements of subsections A and B of this section, each person who holds a groundwater savings facility permit or who holds a water storage permit for water storage at a groundwater savings facility shall include with the annual report all evidence required to be submitted by that person pursuant to the plan by which the quantity of groundwater saved at the storage facility will be proved.

D. Each person who holds a recovery well permit shall file an annual report with the director that includes the following information:

The registration number and location of each well used to recover stored water.
The quantity of fuel or electricity consumed by the pump for each well during the year.
The total quantity and source of stored water recovered by each well during the year.
The quantity and source of stored water recovered on an annual basis during the year.
The quantity and source of stored water recovered from a long-term storage account during the year.
Other information as the director may reasonably require.

E. The annual reports shall be maintained on a calendar year basis and shall be filed with the director no later than March 31 of each year for the preceding calendar year. If a person who is required to file an annual report under this section fails to file a report when due, the director may assess and collect a penalty of twenty-five dollars for each month or portion of a month that the annual report is delinquent. The total penalty assessed under this subsection shall not exceed one hundred fifty dollars. The director shall deposit, pursuant to sections 35-146 and 35-147, all penalties collected under this subsection in the state general fund.

§ 45-876.01 Annual report; groundwater replenishment district and replenishment district members; penalties

A. Each groundwater replenishment district shall file an annual report with the director that includes:

The total amount of water that was stored by the district during the reporting year pursuant to each water storage permit issued to it under this chapter.
The amount of water stored by the district during the reporting year to be credited to the master replenishment account.
The amount of water stored by the district during the reporting year to be credited to the district's long-term storage account.
The amount of long-term storage credits the district has transferred and credited to its master replenishment account during the reporting year.
If the reporting year was a drought year, as defined in section 48-4401, for any district member:

(a) The amount of any debit that was registered to the district's drought relief account for the reporting year, as provided in section 48-4467.

(b) Each district member's share of the debit.

(d) The historic annual per acre surface water deliveries, as defined in section 48-4401, for the reporting year of each irrigation district and water users' association that delivered surface water for non-irrigation use on land in the district during the reporting year.

Each district member's replenishment obligation determined pursuant to section 48-4463.
Other information as the director may require.

B. The annual report shall be maintained on a calendar year basis and shall be filed no later than May 15 of each year for the preceding year, which is the reporting year.

C. In addition to the annual report required by this section and section 45-632, each groundwater replenishment district member shall file an annual report with the director that includes the information prescribed by section 48-4463, subsection A. The annual report required by this subsection shall be maintained on a calendar year basis and shall be filed with the director no later than March 31 of each year for the preceding calendar year which is the reporting year.

D. The director may assess and collect a penalty of up to one thousand dollars for each day that a report is delinquent for a groundwater replenishment district or one of its members that is required to file an annual report and that fails to file the report when due. The director shall deposit, pursuant to sections 35-146 and 35-147, all penalties collected pursuant to this section in the state general fund.

§ 45-877.01 Annual reports by conservation districts; penalties

A. Each conservation district shall file an annual report with the director that includes for each active management area in which a member land or member service area is or may be located:

The total amount of water that was stored by the conservation district during the reporting year pursuant to each water storage permit issued to it under this chapter.
The amount of water stored by the conservation district during the reporting year to be credited to the conservation district's conservation district account.
The amount of water stored by the conservation district during the reporting year to be credited to the conservation district's long-term storage account.
The amount of water stored by the conservation district during the reporting year to be credited to the conservation district's replenishment reserve subaccount.
The amount of long-term storage credits the conservation district has transferred and credited to its conservation district account during the reporting year.
The groundwater replenishment obligation as defined in section 48-3701 for the reporting year.
The contract replenishment obligation as defined in section 48-3701 for the reporting year.
The information required under section 48-3775.
Other information as the director may require.

B. The annual report required under subsection A of this section shall be maintained on a calendar year basis and shall be filed with the director no later than August 31 of each year for the preceding calendar year, which is the reporting year.

C. If the conservation district fails to file the report when due, the director may assess and collect a penalty of up to one hundred dollars for each day the annual report is delinquent. The director shall deposit, pursuant to sections 35-146 and 35-147, all penalties collected pursuant to this subsection in the state general fund.

D. If a municipal provider as defined in section 48-3701 does not timely file the annual report required by section 48-3775, the director may assess and collect a penalty of up to one thousand dollars for each day the annual report is delinquent. The director shall deposit, pursuant to sections 35-146 and 35-147, all penalties collected pursuant to this subsection in the state general fund.

§ 45-878.01 Annual reports by water districts; penalties

A. Each water district shall file an annual report with the director that includes for the active management area in which a water district member land or water district member service area is or may be located:

The total amount of water that was stored by the water district during the reporting year pursuant to each water storage permit issued to it under this chapter.
The amount of water stored by the water district during the reporting year to be credited to the water district's water district account.
The amount of water stored by the water district during the reporting year to be credited to the water district's long-term storage account.
The amount of long-term storage credits the water district has transferred and credited to its water district account during the reporting year.
The water district groundwater replenishment obligation as defined in section 48-4801 for the reporting year.
The contract replenishment obligation as defined in section 48-4801 for the reporting year.
The information required under section 48-4976.
Other information as the director may require.

C. If the water district fails to file the report when due, the director may assess and collect a penalty of up to one hundred dollars for each day the annual report is delinquent. The director shall deposit, pursuant to sections 35-146 and 35-147, all penalties collected pursuant to this subsection in the state general fund.

D. If a municipal provider as defined in section 48-3701 does not timely file the annual report required by section 48-4876, the director may assess and collect a penalty of up to one thousand dollars for each day the annual report is delinquent. The director shall deposit, pursuant to sections 35-146 and 35-147, all penalties collected pursuant to this subsection in the state general fund.

§ 45-879.01 Annual reports certification; records

A. Each annual report required by this article shall contain either a sworn statement or a certification under penalty of perjury that the information contained in the report is true and correct according to the best belief and knowledge of the person filing the report.

B. Each person who is required to file an annual report under this article shall maintain current, accurate records of the information required to be included in the annual report.

C. The records and reports required to be kept and filed under this article shall be in a form prescribed by the director. The director shall prepare blank forms and furnish them on request. Failure to receive or obtain the forms does not relieve any person from the obligation to keep required records or make any required report.

§ 45-880.01 Inspections, investigations and audits

A. The director or the director's authorized representative may enter at reasonable times on private or public property where any facilities used for the purposes of water storage, stored water recovery or stored water use are located and the owner, manager or occupant of the property shall permit such entry to:

Inspect any facility that is used for the purposes of water storage, stored water recovery or stored water use and that is subject to this chapter.
Obtain factual data or access to records required to be kept by this article.
Ascertain compliance with this chapter.

B. Inspections and investigations under this section shall be on reasonable notice to the owner, manager or occupant of the property unless reasonable grounds exist to believe that this notice would frustrate the enforcement of this chapter or if entry is sought for the sole purpose of inspecting water measuring devices required pursuant to section 45-872.01. The director shall adopt rules for conducting inspections, examining records and obtaining warrants pursuant to this section. The director may, and if required by law, shall, apply for and obtain warrants for entry and inspection to carry out the administrative and enforcement purposes of this chapter.

C. The director may require a person who is required to keep records under this article to appear, at reasonable times and on reasonable notice, at the director's office and produce the records and information that are specified in the notice to determine whether the records and annual reports required by this article are complete, true and correct.

D. The director shall provide a written report of each inspection, investigation and audit under this section to the person who is subject to such action.

§ 45-881.01 Cease and desist order; temporary cease and desist order; hearing; injunctive relief

A. Except as provided by subsection B of this section, if the director has reason to believe that a person is violating or has violated a provision of this chapter or a permit, rule or order issued or adopted pursuant to this chapter, the director may give the person written notice that the person may appear and show cause at an administrative hearing at least thirty days from the date of service of the notice why the person should not be ordered to cease and desist from the violation. The notice shall inform the person of the date, time and place of the hearing and the consequences of failure to appear.

B. If the director finds that a person is constructing a storage facility or storing water in violation of this chapter, the director may issue a temporary order for the person to cease and desist the construction or storage pending final action by the director pursuant to subsection C of this section. The order shall include written notice to the person of the date, time and place where the person may appear at an administrative hearing before the department to show cause why the temporary order should be vacated. The hearing shall be held within fifteen days of the date of the order unless the person consents to a longer period.

C. The decision and order of the director under subsections A and B of this section may be in a form that the director determines to be reasonable and appropriate and may include a determination of violation, a cease and desist order, the recommendation of a civil penalty and an order directing that positive steps be taken to abate or ameliorate any harm or damage arising from the violation. The person affected may seek judicial review of the final decision of the director as provided in section 45-114, subsection B in the superior court in the county in which the violation is alleged to have occurred.

D. If the person continues the violation after the director has issued a final decision and order pursuant to subsection C of this section or a temporary order pursuant to subsection B of this section, the director may apply for a temporary restraining order or preliminary or permanent injunction from the superior court pursuant to the rules of civil procedure. Filing for injunctive relief does not preclude other forms of relief or enforcement against the violator.

E. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

§ 45-882.01 Violation; civil penalties

A. A person who is determined pursuant to section 45-881.01 to be in violation of this chapter or a permit, rule or order issued or adopted pursuant to this chapter may be assessed a civil penalty in an amount not exceeding:

One hundred dollars per day of violation that is not directly related to illegal storage, recovery or use of stored water.
Ten thousand dollars per day of violation that is directly related to illegal storage, recovery or use of stored water.

B. An action to recover penalties under this section shall be brought by the director in the superior court in the county in which the violation occurred.

D. The director shall deposit, pursuant to sections 35-146 and 35-147, all civil penalties assessed under this section in the state general fund.

Article 6 State Demonstration Projects

§ 45-891.01 Purposes

It is declared that the public policy of this state and the general purposes of this article are:

To protect the general economy and welfare of this state and its citizens by wise resource management of the water of the central Arizona project.
To store for future needs or use for replenishment purposes the central Arizona project water not now utilized by central Arizona project subcontractors.
To provide an additional source of water for times of serious water shortage due to a substantial reduction in the supply of central Arizona project water available for delivery to central Arizona project subcontractors or a prolonged interruption of deliveries of central Arizona project water.

§ 45-892.01 Definitions

In this article, unless the context otherwise requires:

"Excess central Arizona project water" means central Arizona project water that in any year would otherwise not be delivered to central Arizona project subcontractors or their designees.
"Project permits" means permits obtained under articles 2 and 3 of this chapter for the purposes of operating a state demonstration project.
"State demonstration project" means a project for the storage of excess central Arizona project water at an underground storage facility pursuant to permits issued under this chapter and in accordance with this article.

§ 45-893.01 Application for project permits; application requirement; permit specifications

A. A conservation district may apply to the director pursuant to articles 2 and 3 of this chapter for project permits for one or more state demonstration projects to be funded by account A of the state water storage fund established by section 45-897.01 and one or more projects to be funded by account B of the fund. Each project shall be located in either of the following:

A county for the benefit of which the account that funds the project was established.
A county that is adjacent to the county for the benefit of which the account that funds the project was established if both of the following apply:

(a) The project is within the same active management area as the county for which the account that funds the project was established.

(b) Water stored at the project will provide hydrologic benefit to the county for which the account was established.

B. In addition to the information required by articles 2 and 3 of this chapter, the conservation district's permit application shall contain plans for the state demonstration project and projections of the capital, operation and maintenance costs of the project, exclusive of water recovery costs. The plans and projections shall contain information adequate to permit the director to determine whether sufficient monies will be available from the state water storage fund to cover the projected costs of the proposed state demonstration project, considering all other obligations of the fund.

C. If the director approves the conservation district's project permit applications, the director shall specify in the permit or in a written memorandum of understanding between the director, the conservation district and the state treasurer the conditions under which and the timing pursuant to which monies shall be disbursed by the state treasurer to the conservation district from the state water storage fund. The permit or the memorandum of understanding:

Shall provide for the advancement to the conservation district of the capital, operation and maintenance costs of the project, exclusive of water recovery costs, and the advancement of additional necessary monies to the conservation district, if the monies initially advanced are insufficient to cover those costs.
Shall provide for the continuing disbursement from the fund of monies for the purchase of excess central Arizona project water.
May provide for the use of monies in the fund to cover the conservation district's costs of recovering, transporting and delivering the stored water and the costs of dismantling the project.

D. If the director approves the conservation district's application for the project permits, the conservation district may contract for excess central Arizona project water for storage in the state demonstration project and may enter into agreements with the director for the disposition of such water as provided in section 45-895.01.

§ 45-894.01 Use for replenishment purposes

A. After the qualification of any real property as member land pursuant to section 48-3774 or the qualification of any service area as a member service area pursuant to section 48-3780, a conservation district may use the facilities and excess storage capacity of any state demonstration project located in the active management area in which the member land or a member service area is located for replenishment purposes. The groundwater replenished by the conservation district using the facilities and excess storage capacity of a state demonstration project shall not be water stored in the state demonstration project.

B. A conservation district may operate and maintain a state demonstration project and may simultaneously store water for other purposes, including replenishment, at the same storage facility.

§ 45-895.01 Storage of water; availability and disposition of stored water

A. Water that is stored in a state demonstration project, that is purchased with monies from the state water storage fund established by section 45-897.01 and that is eligible for credits in a long-term storage account pursuant to section 45-852.01 shall be credited to a state demonstration subaccount of the conservation district's long-term storage account. The credits in this subaccount shall be used only for municipal and industrial purposes and shall be used only in the county for the benefit of which the state demonstration project was constructed by the conservation district.

B. Water stored in a state demonstration subaccount shall be available for disposition by the director during any time when the director determines either of the following applies:

The amount of central Arizona project water available for delivery to central Arizona project municipal and industrial subcontractors is insufficient to meet the contractual entitlements of the subcontractors.
There is a significant interruption of the conservation district's ability to make deliveries of central Arizona project water in the county for the benefit of which the state demonstration project was constructed.

C. The director may dispose of water stored pursuant to this article only when one of the conditions described in subsection B of this section exists. The director may dispose of the water to a person, including a person who is not an existing central Arizona project municipal and industrial subcontractor, who has filed a request for the water. In disposing of the water, the director shall take into account the reasonable water needs of persons who have filed requests for the water and the applicable provisions of the state water plan, if any, in effect at the time of the request. The director shall require as a condition of the disposition of water that:

The person who receives the water shall pay the conservation district's costs, if any, of recovering, transporting and delivering the water to the person, but the person is not required to pay any other costs of construction, operation or maintenance of the state demonstration project. If monies from the state water storage fund established by section 45-897.01 are used to cover the conservation district's cost of recovering, transporting or delivering the water stored, the person who receives the water shall reimburse the fund for those costs.
The person who receives the water shall agree to be bound by the relevant terms and conditions of any applicable contract between the conservation district and the United States.
The water disposed of to a person pursuant to this section shall be used only by the person for municipal and industrial purposes in the county for the benefit of which the state demonstration project was constructed.

§ 45-896.01 Assumption of responsibility for stored water

A. Notwithstanding section 45-895.01, if a groundwater replenishment district is established pursuant to title 48, chapter 27 on or before July 1, 1996 in the Phoenix active management area:

The multi-county water conservation district and the groundwater replenishment district shall share equally any water that is stored in a state demonstration project in that active management area. The shares shall be calculated after the director has determined the amount of stored water to be reserved pursuant to paragraph 2 of this subsection.
The director shall determine the quantity of any water that is stored for the benefit of municipal and industrial users that are not member lands or member service areas of the multi-county water conservation district and that are located in Maricopa county and the right to use that amount of water is reserved to those municipal and industrial users. Those municipal and industrial users may recover and use the water as otherwise provided by statute or rule but shall apply to the multi-county water conservation district for the use of the water.
On or before December 31, 1996, unexpended and unencumbered monies, liabilities, facilities and equipment of a state demonstration project shall be transferred to the multi-county water conservation district and the groundwater replenishment district in equal shares.

B. Notwithstanding section 45-895.01, if a permanent active management area water district is established pursuant to title 48, chapter 28 on or before July 1, 1996 in the Tucson active management area:

The multi-county water conservation district and the active management area water district shall share equally any water that is stored in a state demonstration project located in that active management area. The shares shall be calculated after the director has determined the amount of stored water to be reserved pursuant to paragraph 2 of this subsection.
The director shall determine the quantity of any water that is stored for the benefit of municipal and industrial users that are not member lands or member service areas of the multi-county water conservation district and that are located in Pima county and the right to use that amount of water is reserved to those municipal and industrial users. Those municipal and industrial users may recover and use the water as otherwise provided by statute or rule but shall apply to the multi-county water conservation district for the use of the water.
On or before December 31, 1996, unexpended and unencumbered monies, liabilities, facilities and equipment of a state demonstration project shall be transferred to the multi-county water conservation district and the active management area water district in equal shares.

C. Notwithstanding section 45-895.01 and only to the extent that subsection A or B of this section does not apply:

Not later than December 31, 1996, facilities, equipment and liabilities of a state demonstration project located in a multi-county water conservation district shall be transferred to the multi-county water conservation district.
The multi-county water conservation district shall use the monies in the state water storage fund established by section 45-897.01 to expediently store water and construct underground storage facilities until that fund is exhausted.
On July 1, 1996 the multi-county water conservation district shall assume responsibility for water that is stored by that date in a state demonstration project located in the district. The water shall be used for the benefit of member lands or member service areas of the multi-county water conservation district that are located in the active management area in which the water was originally stored.
Periodically after July 1, 1996, until the state water storage fund is exhausted, the director shall determine the quantity of water that has been stored with the use of monies from the state water storage fund for the benefit of municipal and industrial users that are located in Maricopa or Pima county but that are not member lands or member service areas of the multi-county water conservation district. The director shall transfer those quantities of long-term storage credits to the Arizona water banking authority. The Arizona water banking authority shall use the long-term storage credits transferred pursuant to this paragraph in accordance with section 45-2457, subsection B, paragraph 7.
Long-term storage credits that are earned after July 1, 1996 with the use of monies in the state water storage fund established by section 45-897.01 and that are not transferred to the Arizona water banking authority pursuant to paragraph 4 of this subsection shall be transferred to the multi-county water conservation district and shall be used for the benefit of member lands or member service areas of the multi-county water conservation district.

§ 45-897.01 State water storage fund; disbursement of monies

A. A state water storage fund is established to be administered by the director as provided in this article. The fund shall be divided into two accounts, one account for the benefit of counties having a population of more than five hundred thousand persons but less than one million five hundred thousand persons and one account for the benefit of counties having a population of one million five hundred thousand persons or more, according to the most recent United States decennial census. The accounts shall be referred to respectively as account A and account B. The fund and the accounts within the fund consist of monies appropriated by the legislature and taxes levied by a conservation district pursuant to section 48-3715.02. Monies appropriated by the legislature shall be credited to the separate accounts as provided by the legislature. Taxes levied by the conservation district shall be credited to the separate accounts as provided in section 48-3715.02. Monies in the fund are exempt from lapsing under section 35-190. Interest earned on monies in the fund shall be credited to the fund and to the separate accounts in proportion to the balance of each account.

B. The fund shall be used to pay the capital, operation, maintenance and other costs, including the costs of excess central Arizona project water, of state demonstration projects constructed by the conservation district pursuant to this article. Monies shall be distributed from the fund to the conservation district on the direction of the director, in the manner provided for in section 45-893.01.

§ 45-898.01 Indemnification and insurance

For purposes of this article only, when proposing, obtaining permits for, acquiring property for or constructing, operating, maintaining, terminating or dismantling a state demonstration project, a conservation district is an agent of the state, and the state shall indemnify and insure against all liability for acts or omissions of any nature under section 41-621, subsection A, paragraph 3. The state shall be named as an additional insured on any contracts entered into under this article between the conservation district and outside consultants or contractors, and the conservation district shall consult with the department of administration as to appropriate insurance to be specified in any contracts.

Chapter 4 Water Exchanges

Article 1 General Provisions

§ 45-1001 Definitions

Unless the context otherwise requires, the terms defined in section 45-402 have the same meaning in this chapter and:

"Applicant" means a person who applies for a water exchange permit pursuant to section 45-1041.
"Holder" means a person to whom a water exchange permit is issued under section 45-1041 or a person to whom the permit is conveyed.
"Indian community" means an Indian community organized under section 16 or 17 of the Indian reorganization act (48 Stat. 984; 25 United States Code section 461 et seq.).
"Participant" means a person who participates in a water exchange subject to the water exchange notice provisions of article 4 of this chapter.
"Party" means a person or Indian community that has entered into a water exchange contract or that is a successor in interest to such a person or Indian community.
"Water exchange" means a trade between one or more persons, or between one or more persons and one or more Indian communities, of any water for any other water, if each party has a right or claim to use the water it gives in trade. This definition applies whether or not water is traded in equal amounts or other consideration is included in the trade.
"Water exchange contract" means a valid written or oral contract for a water exchange.

§ 45-1002 Water exchanges; conditions

A. A person may withdraw, divert or use water received through a water exchange only if one or more of the following apply:

Neither the water exchange is in an amount nor any associated water exchange contract provides for a water exchange in an amount exceeding fifty acre-feet in any twelve month period. If two or more water exchanges or water exchange contracts allow the same use at the same location, the aggregate quantity of the water exchanges and water exchanges pursuant to the water exchange contracts may not exceed fifty acre-feet in any twelve month period to qualify for this condition.
All water exchanged pursuant to the water exchange or water exchange contract is effluent.
The water exchange is made pursuant to a water exchange contract enrolled under section 45-1021 and either:

(a) The amount of water exchanged does not exceed either the maximum amount of water exchanged in any twelve month period before 1992 or any specific maximum amount established in the water exchange contract, whichever is more.

(b) If no water was exchanged in any twelve month period before 1992 and no specific maximum amount of water was established in the water exchange contract, the water to be exchanged by one of the parties is central Arizona project water for which a subcontract was not offered by the secretary of the interior by January 1, 1992.

The water exchange involves surface water other than Colorado river water, and the person who gives surface water other than Colorado river water in the exchange holds a permit under section 45-1041.
The water exchange is made pursuant to a notice of water exchange filed with the director under section 45-1051.
All water exchanged pursuant to the water exchange or water exchange contract is groundwater and the exchange is between an irrigation district and an irrigation grandfathered right holder within that irrigation district.

B. A party that gives water pursuant to a water exchange authorized under subsection A of this section must receive the water to be exchanged for it within a twelve month period unless one of the following applies:

The exchange is made pursuant to a water exchange contract enrolled under section 45-1021 and the contract contains an explicit term providing for a longer period.
The exchange is made pursuant to subsection A, paragraph 6 of this section.
The parties to the exchange demonstrate to the director that the water to be received cannot be delivered within the period allowed for the exchange or that the water to be received cannot reasonably be put to beneficial use within the period allowed for the exchange. On this demonstration the director may grant an extension of six months if the director has determined that the extension is consistent with the goal of efficient water management and does not impair vested rights to the use of water.
The exchange is between a multi-county water conservation district established pursuant to title 48, chapter 22 and an agricultural improvement district established pursuant to title 48, chapter 17 and the exchange involves surface water that is stored in reservoirs that are operated by the agricultural improvement district.

§ 45-1003 Use of water pursuant to a water exchange

A. A person who receives water pursuant to a water exchange or water exchange contract:

May withdraw, or divert, and use the water without holding a right to that water other than the authority granted by the water exchange or water exchange contract.
May use the water only in the same manner in which the person had the right to use the water that person gave in trade.
Shall comply with all orders of the director and all laws and rules relating to the water that the person gives in the exchange, including the restrictions on transportation of groundwater in chapter 2, articles 8 and 8.1 of this title.

B. A person who gives groundwater in an exchange is subject to the restrictions on transportation of groundwater and the provisions regarding payment of damages in chapter 2, articles 8 and 8.1 of this title as though:

The person who gave the groundwater withdrew the groundwater at the location where it was actually withdrawn by or for another party.
The person who gave the groundwater used the groundwater at the location where the person who gave the groundwater actually used the water it received in the exchange.

C. If groundwater is withdrawn in an active management area or irrigation non-expansion area, the person who actually withdraws the groundwater shall comply with section 45-604.

§ 45-1004 Annual report of water exchange; record keeping; penalties

A. Each person who is authorized to give or receive any water pursuant to a water exchange contract enrolled under section 45-1021, a water exchange permit issued under section 45-1041, or a notice of water exchange filed with the director under section 45-1051 shall file an annual report with the director, whether or not any water was actually given or received. The report shall contain:

The name and address of the person filing the report.
The source and quantity of water received pursuant to the water exchange in the preceding calendar year on a month by month basis.
The source and quantity of water given pursuant to the water exchange in the preceding calendar year on a month by month basis.
Such other information as the director may require to carry out the purposes of this chapter.

B. Each report shall contain either a sworn statement or a certification, under penalty of perjury, that the information contained in the report is true and correct according to the best belief and knowledge of the person filing the report.

C. The annual report shall be maintained on a calendar year basis unless a different accounting period is authorized by the director and is specified in the water exchange contract, permit or notice. The report shall be filed with the director no later than March 31 of each year for the preceding calendar year unless the director has authorized a different accounting period, in which case the report shall be filed no later than the end of the third month after the closing date of the accounting period. If a person who is required under this section to file an annual report fails to file a report for a calendar year on or before March 31 of the following year or a later date authorized by the director, the director may assess and collect a penalty of twenty-five dollars for each month or portion of a month that the annual report is delinquent. The total penalty assessed under this subsection shall not exceed one hundred fifty dollars. All penalties collected under this subsection shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund.

D. Each person required to file an annual report under this section shall maintain current accurate records of the withdrawals, diversions and use of any water given or received in a water exchange.

E. The records and reports required to be kept and filed under this section shall be in such form as the director prescribes. The director shall prepare blank forms and furnish them on request. Failure to receive or obtain the forms does not relieve any person of responsibility for keeping the required records or making any required report.

§ 45-1005 Registry of water exchanges

A. The director shall establish and maintain a registry of water exchange contracts enrolled under section 45-1021, water exchange permits issued under section 45-1041, and notices of water exchange filed with the director under section 45-1051.

B. Each person who is a party to an enrolled water exchange contract, a holder of a water exchange permit or a participant in a water exchange conducted pursuant to a notice of water exchange filed with the director under section 45-1051 shall notify the director within sixty days of a change in name or mailing address, a conveyance of the water exchange contract or permit or a valid change in point of withdrawal or diversion.

C. The director may require a person who is a party to an enrolled water exchange contract, a holder of a water exchange permit or a participant in a water exchange conducted pursuant to a notice of water exchange filed with the director under section 45-1051 to file additional information as necessary to keep the registry current and accurate.

§ 45-1006 Effect on water rights

A. This chapter shall not be construed to affect vested water rights.

B. Any determination made by the director for purposes of this chapter regarding the validity, nature, extent or relative priority of a water right claimed by a party or another person is not binding in any other administrative proceeding or in any judicial proceeding.

Article 2 Enrollment of Water Exchange Contracts

§ 45-1021 Enrollment of water exchange contracts; fee

A. A water exchange contract may be enrolled by any party to the contract by filing a statement of water exchange contract with the director and complying with all of the following requirements:

The water exchange contract was in effect before January 1, 1992 and, if originally oral, is reduced to writing before December 31, 1994.
A water exchange actually was made after January 1, 1982 pursuant to the contract unless the water to be exchanged by one of the parties is central Arizona project water for which a subcontract was not offered by the secretary of the interior by January 1, 1992.
Each statement of water exchange contract is filed on a separate prescribed form not later than December 31, 1994.
Each statement of water exchange contract includes a description of the legal basis for acquiring and using the water subject to the water exchange.
If the water exchange involves water pumped from wells, each statement of water exchange contract includes the well registration numbers of the wells pumping water pursuant to the exchange.
A copy of the water exchange contract is attached to the statement of water exchange contract.
Each blank in the prescribed form is completed legibly with the required information pursuant to instructions furnished by the director.
The statement of water exchange contract is certified as true under penalty of perjury.
The prescribed form is accompanied by a filing fee in an amount to be determined by rule by the director to cover the cost of administering this article.

B. The director shall not accept a statement of water exchange contract that does not meet all of the requirements of subsection A of this section. If the director determines that a statement of water exchange contract fails to meet these requirements, the director shall return it to the sender within ninety days specifying the deficiencies in the statement and providing the sender with sixty days within which to revise or supplement the statement in order to meet the requirements. The director may reject a revised or supplemented statement if, on resubmittal, it is still deficient. In such case, the director shall provide the sender an additional sixty days in which to further revise or supplement the statement. The director shall not accept a revised or supplemented statement of water exchange contract after June 30, 1995.

C. The director shall deposit, pursuant to sections 35-146 and 35-147, all fees received under this section in the water resources fund established by section 45-117.

§ 45-1022 Effect of enrollment of a water exchange contract

Enrollment of a water exchange contract under section 45-1021 does not affect the validity of any water exchange conducted pursuant to that contract before the effective date of this chapter.

Article 3 Permits for Water Exchanges

§ 45-1041 Water exchange permits; fee

A. A person who seeks to give surface water, other than Colorado river water, in a water exchange to which neither section 45-1002, subsection A, paragraph 1 nor 3 applies shall apply to the director for a water exchange permit. The director shall issue either a specific use water exchange permit or a general use water exchange permit, as applicable, if the applicant demonstrates that all of the following apply:

The water exchange will be made pursuant to a written contract.
The water exchange will not affect vested rights to water.
Each party to the water exchange contract has a right to the water the party will give in the water exchange.
If an applicant is not a city, town, private water company or irrigation district, any new or increased pumping by the applicant from a well within an active management area pursuant to the water exchange will not unreasonably increase damage to surrounding land or other water users.
If an applicant is a city, town, private water company or irrigation district with a service area located partly or wholly in an active management area, any new or increased pumping by the applicant within the applicant's service area pursuant to the water exchange is consistent with the management plan and achievement of the management goal for the active management area.
Each party to a water exchange contract either:

(a) Receives at least ninety per cent of the quantity of water that the other party gives in the water exchange.

(b) Receives at least fifty per cent of the quantity of water that the other party gives in the water exchange, unless otherwise authorized by law, and the director determines the water exchange is beneficial to water management in this state.

B. Subsection A of this section does not apply to the proposed modification of a previously enrolled or permitted water exchange contract that involves surface water other than Colorado river water, if the proposed modification meets both of the following conditions:

The proposed modification involves the addition of one or more of the following water sources as the only new or additional water source of exchange:

(a) Colorado river water.

(b) Groundwater.

(d) Surface water that is captured in the additional storage capacity created by modified Roosevelt dam after April 9, 1986.

Notice of the proposed modification is filed by the person seeking the modification pursuant to section 45-1051 and is subject to the requirements of that section and the conditions prescribed by section 45-1052.

C. Any person may apply for a specific use water exchange permit. A specific use permit allows the parties to exchange specific sources of water in specific quantities for the uses and in the locations specified in the permit.

D. Two or more political subdivisions of this state, or one or more political subdivisions and one or more private water companies, Indian communities, agencies of this state or agencies of the United States may apply for a general use water exchange permit. A general use permit shall specify that the holders may engage in one or more exchanges of water at any time during the term of the permit. The water received pursuant to a general use permit may be used for any lawful purpose specified in the permit. Before making any exchange pursuant to a general use permit, the parties to the permit shall notify the director of the amounts of water to be exchanged and the specific uses to which each source of water will be applied.

E. An application for a water exchange permit shall be accompanied by a filing fee in an amount to be determined by rule by the director to cover the cost of administering this article.

F. The director shall deposit, pursuant to sections 35-146 and 35-147, all fees received under this section in the water resources fund established by section 45-117.

§ 45-1042 Application for water exchange permit; notice; objections; hearing

A. On receiving an application for a water exchange permit, the director shall endorse on the application the date of receipt and keep a record of the application. The director shall conduct an initial review of the application within fifteen days after receiving the application. If the director determines in the initial review that the application is incomplete, the director shall notify each applicant. The application is incomplete until the applicants file the information requested in the application. The director shall determine whether the application is correct within ninety days after receiving a complete application. The director may request additional information from the applicants. The director may conduct independent investigations as may be necessary to determine whether the application should be approved or rejected.

B. Within fifteen days after the director determines that an application for a water exchange permit is complete and correct or a longer period if requested by an applicant, the director shall give notice of the application once each week for three consecutive weeks in a newspaper of general circulation in the county or counties in which any water is proposed to be withdrawn, diverted or used pursuant to the water exchange. In appropriate cases, including those in which surface water subject to decreed or appropriative rights is to be exchanged, the director shall provide personal notice of the application to each person who has made a written request to the director for a mailed copy of the notice. The notice shall state that objections to the issuance of the permit may be filed in writing with the director by interested persons within thirty days after the last publication of notice and that objections are limited to whether the permit application meets the criteria for issuing a permit as prescribed by this article. An objection shall state the name and mailing address of the objector, shall be signed by the objector, the objector's agent or the objector's attorney and shall clearly state reasons why the permit should not be issued. The director shall prepare the notice and shall determine the cost of publishing the notice. Before the notice is published, the applicant shall pay for publication by submitting to the director a check or money order made payable to the newspaper in which the notice is to be published for the cost of publishing the notice. The director shall transmit the check or money order with the notice to the newspaper for publication.

C. In appropriate cases, including cases in which a proper written objection to the permit 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. At least thirty days before the date of the hearing, the director shall give notice to the applicants and to any person who filed a proper written objection to the issuance of the permit. 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. If a hearing is not held, the director shall issue a decision and order within six months after the date notice of the application is first given pursuant to subsection B of this section.

D. The approval or rejection of an application for a water exchange permit shall be endorsed on the application and dated. If the permit is denied, the director shall return the application to the applicants specifically stating the reasons for denial.

E. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section. If an administrative hearing is held, it shall be conducted in any county in which water may be withdrawn, diverted or used pursuant to the permit.

§ 45-1043 Contents of permit

A. A specific use permit issued by the director pursuant to section 45-1041 shall contain the following information:

The names and mailing addresses of the persons to whom the permit is issued.
The name of any active management area or irrigation non-expansion area from which groundwater may be withdrawn pursuant to the permit.
The point or points of withdrawal, including well registration number, of any groundwater or stored water and the point or points of diversion of any surface water or other water to be exchanged pursuant to the permit.
The legal descriptions of the lands on which the water may be used pursuant to the permit.
The total annual amount of water that may be used pursuant to the permit.
The duration of the permit, up to a maximum of fifty years.
Conditions on the permit authorized by this chapter or rules adopted pursuant to this chapter.
Such other information as the director deems appropriate.

B. A general use permit issued by the director pursuant to section 45-1041 shall contain the following information:

The names and mailing addresses of the political subdivisions, or political subdivisions and private water companies, to which the permit is issued.
The name of any active management area or irrigation non-expansion area from which groundwater may be withdrawn pursuant to the permit.
The geographic areas within which the parties may withdraw groundwater or divert surface water, as applicable.
The uses to which any exchanged water may be applied during the term of the permit.
The maximum amount of water that may be exchanged by each party during any twelve month period.
The duration of the permit, up to a maximum of fifty years.
Conditions on the permit authorized by this chapter or rules adopted pursuant to this chapter.
Such other information as the director deems appropriate.

§ 45-1044 Actions for judicial review

A person whose application for a water exchange permit is denied or a person who contested a permit by filing a proper objection pursuant to section 45-1042 may seek judicial review of the director's decision in superior court as provided in section 45-405.

§ 45-1045 Modification of water exchange permit

Holders of a water exchange permit may seek renewal of a permit within six months before the date the permit expires or may seek modification of an unexpired water exchange permit. All applications to renew or modify a permit shall be treated in the same manner as provided in section 45-1042 for the initial permit application and are subject to the criteria prescribed by section 45-1041.

§ 45-1046 Revocation of water exchange permits

A. After an administrative hearing the director may permanently or temporarily revoke all or part of a water exchange permit for any of the following reasons:

A false statement in regard to a material issue in an application to initiate, modify or renew a permit, or a false statement in regard to a material issue in any report required to be filed by a person using water pursuant to the provisions of the permit.
A material violation of the terms of the permit.
Failure to exchange water pursuant to a permit for five or more consecutive years except for reasons beyond the control of the permit holders. During the first five years a permit is in effect, the parties may request, and the director may approve, an extension of this period for not more than an additional five years, if necessary to complete construction of facilities or other works to be used to effectuate a permitted exchange.

B. The director may revoke a water exchange permit with the written consent of the holders, and in such a case a hearing is not required.

C. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

Article 4 Water Exchanges Pursuant to Notice

§ 45-1051 Notice of water exchange; contents forms; review by director

A. A person who seeks to engage in a water exchange that does not meet the requirements of section 45-1002, subsection A, paragraph 1, 2, 3, 4 or 6 shall file a notice of water exchange with the director. The notice shall include the following:

The names and mailing addresses of each participant in the water exchange.
A copy of the contract pursuant to which the water exchange will be conducted.
The name of any active management area or irrigation non-expansion area from which groundwater will be withdrawn pursuant to the notice of water exchange.
The point or points of withdrawal, including well registration number, of any groundwater or stored water to be exchanged pursuant to the notice of water exchange.
The legal descriptions of the lands on which the water will be used pursuant to the notice of water exchange.
The total annual amount of water that may be used pursuant to the notice of water exchange.
The duration of the water exchange contract.
The uses to which any exchanged water may be applied during the term of the water exchange contract.
Such other information as the director deems appropriate.

B. The notice of water exchange shall be filed with the director on a form prescribed by the director. Blank forms shall be furnished on request.

C. The director shall not accept a notice of water exchange that does not contain all of the information required by subsection A of this section. If the director determines that a notice of water exchange does not contain all of the required information, the director shall return it to the sender within sixty days specifying the deficiencies in the notice and provide the sender an opportunity to revise or supplement the notice. The director shall reject a revised or supplemented notice if, on resubmittal, it is still deficient.

§ 45-1052 Water exchanges pursuant to notice; conditions

After filing a notice of water exchange that conforms with the requirements of section 45-1051, subsection A, the exchange may be initiated if it satisfies the following conditions:

The water exchange will be made pursuant to a written contract.
The water exchange will not affect vested rights to water.
Each participant in the water exchange has a right to the water the party will give in the exchange.
For each participant that is not a city, town, private water company or irrigation district, any new or increased pumping by that participant from a well within an active management area pursuant to the water exchange will not unreasonably increase damage to surrounding land or other water users.
For each participant that is a city, town, private water company or irrigation district with a service area located partly or wholly in an active management area, any new or increased pumping by that participant within that participant's service area pursuant to the water exchange is consistent with the management plan and achievement of the management goal for the active management area.
Each participant in the water exchange either:

(a) Receives at least ninety per cent of the quantity of water that the participant gives in the water exchange.

(b) Receives at least fifty per cent of the quantity of water that the participant gives in the water exchange, unless otherwise authorized by law, and the director determines the water exchange is beneficial to water management in this state.

Article 5 Enforcement

§ 45-1061 Inspections; investigations and audits

A. The director or the director's authorized representative may enter at reasonable times on private or public property where water is withdrawn, diverted or used pursuant to a water exchange, and the owner, manager or occupant of the property shall permit the entry to:

Inspect facilities for withdrawal, diversion or use of the water.
Ascertain compliance with this chapter.

B. Inspections and investigations under this section shall be on reasonable notice to the owner, manager or occupant of the property unless reasonable grounds exist to believe that the notice would frustrate the enforcement of this chapter. The director shall adopt rules for conducting inspections and obtaining warrants under this section. If warrants are required by law, the director shall apply for and obtain warrants for entry and inspection to carry out the administrative and enforcement purposes of this chapter.

C. The director may require a person who is required to keep records under section 45-1004 to appear, at reasonable times and on reasonable notice, at the director's office and produce such records and information as are specified in the notice to determine whether the records and annual reports required by section 45-1004 are complete, true and correct. The director shall audit a sufficient number of persons under this subsection to ensure general compliance with this chapter.

D. The director shall provide a written report of each inspection, investigation and audit under this section to the person who is subject to such action.

§ 45-1062 Cease and desist order; temporary cease and desist order; hearings; injunctive relief

A. If the director has reason to believe that a person is violating or has violated any provision of this chapter, a permit or order issued pursuant to this chapter or a rule adopted to carry out the purpose of this chapter, the director may give the person written notice that the person may appear and show cause at an administrative hearing at least thirty days after the date of service of the notice why the person should not be ordered to cease and desist from the violation. The notice shall inform the person of the date, time and place of the hearing and the consequences of failure to appear.

B. Notwithstanding subsection A of this section, if the director finds that a person is withdrawing, diverting or using water in violation of any provision of this chapter, a permit or order issued pursuant to this chapter or a rule adopted to carry out the purposes of this chapter, the director may issue a temporary order for the person to cease and desist the withdrawal, diversion or use pending final action by the director pursuant to subsection C of this section. The order shall include written notice to the person of the date and time when and place where the person may appear at an administrative hearing to show cause why the temporary order should be vacated. The hearing shall be held within fifteen days after the date of the order unless the person consents to a longer period.

D. If the person continues the violation after the director has issued a final decision and order pursuant to subsection C of this section or a temporary order pursuant to subsection B of this section, the director may apply for a temporary restraining order or preliminary or permanent injunction from the superior court. A decision to seek injunctive relief does not preclude other forms of relief or enforcement against the violator.

E. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

§ 45-1063 Civil penalties

A. A person who is determined pursuant to section 45-1062 to be in violation of any provision of this chapter, a permit or order issued pursuant to this chapter or a rule adopted to carry out the purpose of this chapter may be assessed a civil penalty in an amount not exceeding:

One hundred dollars per day for a violation not directly related to the illegal withdrawal, diversion or use of water pursuant to a water exchange.
One thousand dollars per day for a violation directly related to the illegal withdrawal, diversion or use of water pursuant to a water exchange.

B. The director shall bring any action to recover penalties under this section in superior court in the county in which the violation occurred.

D. All penalties collected under this article shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund.

Chapter 6 Dams and Reservoirs

Article 1 Supervision of Dams, Reservoirs and Projects

§ 45-1201 Definitions

In this article, unless the context otherwise requires:

"Dam" means any artificial barrier, including appurtenant works for the impounding or diversion of water, twenty-five feet or more in height or the storage capacity of which will be more than fifty acre-feet but does not include:

(a) Any barrier that is or will be less than six feet in height, regardless of storage capacity.

(b) Any barrier that has or will have a storage capacity of fifteen acre-feet or less, regardless of height.

(d) Any barrier that is a release-contained barrier.

(e) Any barrier that is owned, controlled, operated, maintained or managed by the United States government or its agents or instrumentalities if a safety program that is at least as stringent as the state safety program applies and is enforced against the agent or instrumentality.

(f) Any CCR surface impoundment as defined in section 49-701 that is regulated by a permit in effect under the coal combustion residuals program established pursuant to title 49, chapter 4, article 11 and approved for CCR surface impoundment safety by the United States environmental protection agency in accordance with 42 United States Code section 6945(d)(1).

"Height" means the vertical distance from the lowest elevation of the outside limit of the barrier at its intersection with the natural ground surface to the spillway crest elevation.
"Owner" includes any person or entity that owns, controls, operates, maintains, manages or proposes to construct or modify a dam.
"Person" means any person, firm, association, organization, partnership, business trust, corporation, company or district.
"Release-contained barrier" means any artificial barrier and appurtenant works that comply with both of the following:

(a) Has a storage capacity that in the event of failure would be contained within property that the release-contained barrier owner owns, controls, operates, maintains or manages.

(b) The property on which the release would be contained is not open to the public.

"Storage capacity" means the maximum volume of water that can be impounded by the reservoir when there is no discharge of water.

§ 45-1202 Jurisdiction of director of water resources; records; rules; notice of exemption

A. All dams are under the jurisdiction of the director of water resources. Dams of the state, or any political subdivisions thereof, or dams of public utilities, and all dams within the state are included within the jurisdiction conferred by this section. It is unlawful to construct, reconstruct, repair, operate, maintain, enlarge, remove or alter any dam except upon approval of the director.

B. The records pertaining to dam supervision are public documents.

C. The director shall adopt and revise rules and issue general orders to effectuate this article.

D. To qualify for an exemption for a release-contained barrier, the owner of an existing or proposed release-contained barrier shall submit to the director a notice of exemption. The director shall accept or reject a notice of exemption within thirty days after receipt of both of the following:

A statement signed by the owner that:

(a) The storage capacity of the release-contained barrier would be contained within property that the release-contained barrier owner owns, operates, controls, maintains or manages and that is not open to the public.

(b) The release-contained barrier owner will maintain downstream containment structures or sites with sufficient containment throughout the useful life of the release-contained barrier.

A topographic site plan that shows:

(a) The property lines and ownership status of the land.

(b) Any areas of the property that are open to the public.

(c) The locations and storage capacities of the release-contained barrier and the downstream containment structures or sites.

E. The director may conduct site inspections to verify the release-contained barrier exemption.

§ 45-1203 Approval by director of proposed dams or enlargements of existing dams; application for construction or enlargement

A. Construction of a dam or enlargement of an existing dam shall not be commenced until a written approval of plans and specifications has been obtained from the director.

B. A separate application for each dam shall be filed with the director upon forms provided by him, reciting the name and address of the owner or his agent, the location, type, size and height of the proposed dam and appurtenant works, the storage capacity of the reservoir, and such other information as the director requests. The application shall also set forth the area of the drainage basin, rainfall and stream flow records, flood flow records and estimates and other similar information required by the director. The director may require information concerning subsoil and foundation conditions and may require that the site be drilled or otherwise prospected.

C. When the physical conditions and the size of the dam do not require the information provided in subsection B, such information may be waived by the director.

D. The means, plans and specifications by which the stream or body of water is to be dammed, by-passed or controlled during construction shall be stated in the application, or such means, plans and specifications shall be submitted to the director for approval prior to beginning construction. The director shall have the same authority over the construction and maintenance of such means of damming, by-passing or controlling the stream or body of water during construction of the dam as he has over similar work on the dam itself.

E. The application shall further state the proposed time of beginning and completing construction, the estimated cost of construction, the use to which the impounded or diverted water is to be put, and shall be accompanied by maps, plans and specifications and state such details and dimensions as the director may require. The maps, plans and specifications shall be a part of the application.

F. Prior to the approval of plans and specifications, the director may require a surety company bond in an amount sufficient to secure the costs to the state in assuring the safety of any dam left partially constructed. The bond may be required only when the director questions the financial ability of the owner or contractor, or otherwise deems the bond advisable.

§ 45-1204 Estimated cost of dam; application fees

A. The estimated cost of the dam or alterations thereof shall include the cost of all labor and materials entering into the construction of the dam and appurtenant works. The cost of preliminary investigation and surveys, the construction plant and all other items properly included in the cost of the dam shall be chargeable to the cost of the dam.

B. The director shall establish by rule and the department shall collect a reasonable filing fee which shall be based on the estimated cost of the dam but in no event shall the fee exceed two per cent of the estimated cost. The applicant shall pay the filing fee at the time of filing the application. The fee shall be required of all applicants including the state and its departments, institutions or agencies.

C. An application shall not be considered nor shall construction be permitted until the filing fee has been paid.

§ 45-1205 Charges against irrigation projects; disposition of proceeds

A. Upon all projects for which approval is required by the state certification board, or which involve examination, supervision and inspection by the director, whether in connection with the construction of a dam or otherwise, the following shall be paid:

For irrigation projects of any kind involving twenty-five thousand acres or less, an annual tax levy of ten cents per acre shall be levied and collected.
For such irrigation projects in excess of twenty-five thousand acres, an annual tax levy of five cents per acre shall be levied and collected.

B. The levy shall be made only in the years required for construction of the project, and shall be made and collected in the same manner as provided for the levy and collection of taxes made for other expenses of the particular district. Such collections shall be deposited, pursuant to sections 35-146 and 35-147, in the water resources fund established by section 45-117.

§ 45-1206 Approval of repair, alteration or removal of dam

A. Before commencing the repair, alteration or removal of a dam, application shall be made for written approval by the director, except as otherwise provided by this article. The application shall state the name and address of the applicant, shall adequately detail the changes it proposes to effect and shall be accompanied by maps, plans and specifications setting forth such details and dimensions as the director requires. The director may waive any such requirements. The application shall give such other information concerning the dam and reservoir required by the director and such information concerning the safety of any change he may require and shall state the proposed time of commencement and completion of the work. The application shall otherwise conform to the requirements of section 45-1203.

B. When repairs are necessary to safeguard life and property, they may be started immediately, but the director shall be notified forthwith of the proposed repairs and of work under way, and they shall be made to conform to his orders.

§ 45-1207 Approval or disapproval of applications; commencing construction

A. Upon receipt of an application, the director shall approve, disapprove or approve subject to conditions necessary to insure safety.

B. A defective application shall not be rejected, but notice of the defects shall be sent to the applicant by registered mail. If the applicant fails to file a perfected application within thirty days, the original shall be canceled unless further time is allowed.

C. No application shall be approved in less than ten days from its receipt, nor shall an application be retained more than sixty days after it is filed unless the director finds that additional information is necessary. An applicant may request that the director expedite the review of the application through the employment of an expert consultant on a contract basis pursuant to section 45-104, subsection D to assist the director in reviewing the application. If an applicant requests an expedited review of the application pursuant to this subsection and the director employs a consultant, the applicant shall pay to the department the cost of the consultant's services in addition to any other fees that the applicant is required to pay under this chapter.

D. If the director disapproves an application, one copy shall be returned with a statement of his objections. If an application is approved, the approval shall be attached to the application and a copy returned by registered mail. Approval shall be granted under terms, conditions and limitations which the director deems necessary to safeguard life and property.

E. Construction shall be commenced within one year after the date of approval of the application or such approval is void. The director upon written application and good cause shown may extend the time for commencing construction. Notice by registered mail shall be given to the director at least ten days before construction is commenced.

§ 45-1208 Inspections and investigations during construction; modifications; notice

A. During the construction, enlargement, repair, alteration or removal of a dam the director shall make such inspections, investigations or examinations as he deems necessary to enforce the provisions of his approval and the plans and specifications as approved. If thereafter as the work progresses the director believes amendments, modifications or changes are necessary to insure safety, he shall revise the approval.

B. If, during construction, reconstruction, repair, alteration or enlargement of any dam, the director finds the work is not being done in accordance with the provisions of the approval and the approved plans and specifications, he shall give written notice by registered mail or personal service to the person who received the approval and to the person in charge of construction at the dam. The notice shall state the particulars in which compliance has not been made, and shall order immediate compliance with the terms of the approval, and the approved plans and specifications. The director may order that no further construction work be undertaken until such compliance has been effected and approved by the director. A failure to comply with the approval and the approved plans and specifications shall render the approval revocable unless compliance is made after notice as provided by this section.

§ 45-1209 Notice of completion; license of final approval; removal of dam

A. Immediately upon completion or enlargement of a dam, notice of completion shall be given to the director. As soon as possible thereafter supplementary drawings or descriptive matter showing or describing the dam as actually constructed shall be filed with the director which shall include:

A record of all grout holes and grouting.
A record of permanent location points and bench marks.
A record of tests of concrete or other material used in the construction of the dam.
A record of other items of permanent value bearing on safety and permanence of construction.

B. When an existing dam is enlarged, the supplementary drawings and descriptive matter need apply only to the new work.

C. The owner of a completed dam shall file an affidavit of the total cost of the dam comprised of items set forth in section 45-1204 and furnish such evidence in support thereof as the director requires. No license of final approval shall issue until the affidavit is filed. The completed dam shall be inspected by the director, and upon finding that the work has been done as required and that the dam is safe, the director shall issue a license of final approval forthwith, subject to such terms as the director deems necessary for the protection of life and property. In the event the total cost exceeds the estimated cost, the fee shall be recomputed in accordance with rules adopted pursuant to section 45-1204, subsection B. The owner shall pay the difference between the fee already paid and the recomputed fee.

D. Pending issuance of the license, the dam shall not be used except on written consent of the director, subject to conditions he may impose.

E. When a dam is removed the owner shall file with the director evidence showing that a sufficient portion has been removed to permit the free passage of floodwaters. Before final approval of the removal of the dam the director shall inspect the work to ascertain its safety.

§ 45-1210 Petition for review

Except as otherwise provided in this article, a petition for review by a board of review of any approval, disapproval or order of the director concerning plans, specifications, construction or maintenance pertaining to any dam may be filed by the owner or applicant, or by three land owners whose property would be endangered by the failure of the dam.

§ 45-1211 Time for filing petition; board of review

A. The petition for review shall be in writing and shall be filed with the director within ten days after issuance of the approval, disapproval or order of which complaint is made. Upon receipt of the petition, the director shall prepare a list of ten qualified experts. Within ten days the petitioner shall select three individuals from the list who shall then serve as the board of review. The board shall serve at the expense of the petitioners. Within thirty days from its designation, or within such further time as the director allows, the board shall report to the director and he shall forthwith affirm, change or modify the report, and his action shall be final and not subject to further review. No board of review shall be appointed to consider any action taken by the director relative to emergency regulation and control of a dam under section 45-1212 or action taken by the director under section 45-1221.

B. Pending examination, change or modification by the director, his approval, disapproval or order issued shall remain operative. Operations shall be suspended if an applicant or owner files a petition for a board of review unless the director orders work to proceed because of emergency conditions.

§ 45-1212 Supervision over maintenance and operation; remedial measures; lien

A. Supervision over the maintenance and operation of dams to safeguard life and property is vested exclusively in the director. The director shall make complete inspections, require reports from owners or operators and issue rules and orders necessary to secure maintenance and operation of dams which will safeguard life and property.

B. If the director determines that the dam under consideration is dangerous to the safety of life and property, and that there is not sufficient time to issue and enforce an order relative to its maintenance or operation, or if the director believes that imminent floods threaten the safety of the dam under consideration, the director shall immediately employ remedial measures necessary to protect life and property. The director may spend monies from the dam repair fund established by section 45-1212.01 in employing remedial measures.

C. In applying remedial measures the director may lower the water level of a reservoir by releasing water impounded, may completely empty the reservoir, may destroy the dam or reservoir, or such portions as appear necessary, or may construct, reconstruct, repair or enlarge the dam and may exercise any other control of the dam, reservoir and appurtenances essential to safeguard life and property. The director shall remain in full charge and control of the dam, reservoir and appurtenances until they have been rendered safe or the emergency has terminated.

D. The costs and expenses of the control, regulation and abatement provided by this section, including costs of construction work done to render the dam, reservoir or appurtenances safe, shall constitute a lien against all property of the owner, and the lien shall be prior and superior to all other mortgages, liens or encumbrances of record. The lien shall have the force and effect of a mechanic's and materialman's lien and may be foreclosed at any time within two years.

E. The lien referred to in subsection D of this section may be perfected and foreclosed in advance of construction or repair or after completion of the repairs. If in advance, the lien shall be perfected by the filing of an affidavit of the director setting forth the estimate of the costs of construction or repair with the county recorder in the county in which the dam is located in the same manner as prescribed for mechanics' liens in title 33, chapter 7, article 6 and may be foreclosed in the same manner as a mechanic's and materialman's lien. When the affidavit is filed, the amount set forth in the affidavit shall be a lien in such amount against all property of the owner. If the actual cost of construction or repair exceeds the estimated cost, the director may amend the affidavit setting forth the additional estimated cost. If the estimated cost exceeds the actual costs of construction or repair at completion, the director shall file an amended affidavit at completion. If a lien is perfected in advance and the construction or repair is not commenced within two years from the date of perfection, the lien shall be void. The director shall file a satisfaction of lien upon payment of the costs of construction or repair by the owner.

F. Monies collected in full or partial satisfaction of a lien created pursuant to subsection D of this section shall be deposited in the dam repair fund established by section 45-1212.01.

§ 45-1212.01 Dam repair fund

A. The dam repair fund is established consisting of monies appropriated by the legislature, and monies collected by the director in full or partial satisfaction of a lien created by section 45-1212, subsection D and monies collected pursuant to section 45-1220.

B. Monies in the fund shall be used to carry out the purposes of this chapter.

C. The director shall annually report to the legislature on the status of the fund and the purposes for which monies were expended during the preceding calendar year. The report shall be submitted pursuant to section 41-1178 no later than fifteen days after the commencement of each regular session.

D. The director shall administer the fund. On notice from the director, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund. Monies in the dam repair fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

§ 45-1213 Inspection upon complaint

Upon receipt of a written complaint that the person or property of the complainant is endangered by any dam, the director shall inspect such dam unless his records disclose that the complaint is without merit. If the complainant insists upon an inspection and deposits with the director an amount sufficient to cover costs of inspection, the inspection shall be made. If an unsafe condition is found, the director shall cause it to be corrected, and the deposit shall be returned. If the complaint was without merit the deposit shall be paid into the general fund.

§ 45-1214 Investigations for review of design and construction

The director shall make investigations and assemble data for a proper review and study of the design and construction of dams, reservoirs and appurtenances, and shall make watershed investigations to facilitate decisions on public safety. The director or his representatives may enter upon private property for such purposes.

§ 45-1215 Liabilities of state and owners of dam in action for damages

A. No action shall be brought or maintained against the state, or any of its departments, agencies or officials thereof, or any of their employees or agents, for damages sustained through the partial or total failure of any dam or its maintenance by reason of control and regulation thereof by any of them pursuant to duties imposed upon them under the provisions of this chapter.

B. Nothing in this article shall relieve any owner or operator of a dam from the legal duties, obligations and liabilities arising from such ownership or operation.

§ 45-1216 Violations; classification

A. It is unlawful for an owner, director, officer, agent, employee, contractor or his agents to construct, reconstruct, repair, enlarge, alter or remove a dam without an approval as provided in this chapter, or contrary to an approval issued. It is unlawful for the agents or employees of the director to permit such work to be done without immediately notifying the director.

B. A person who violates this article, except as otherwise provided, is guilty of a class 2 misdemeanor, and each day such violation continues constitutes a separate offense.

§ 45-1217 Action and procedures to restrain violations

A. The director may take any legal action proper and necessary for the enforcement of this chapter.

B. An action or proceeding under this section may be commenced whenever any owner or any person acting as a director, officer, agent or employee of any owner, or any contractor or agent or employee of such contractor is:

Failing or omitting or about to fail or omit to do anything required of him by this chapter or by any approval, order, rule, regulation or requirement of the director under the authority of this chapter; or
Doing or permitting anything or about to do or permit anything to be done in violation of or contrary to this chapter or any approval, order, rule, regulation or requirement of the director under this chapter; or
In the opinion of the director, in any manner in violation of this chapter.

C. Any action or proceeding under this section shall be commenced in a court of appropriate jurisdiction in which:

The cause or some part thereof arose; or
The owner or person complained of has his principal place of business; or
The person complained of resides.

§ 45-1218 Dam repair loans

A. The director may grant loans from the dam repair fund to dam owners to defray the costs of repairing dams which the director determines to be dangerous to the safety of life and property but which are not in an emergency condition. Loans shall be granted on such terms and conditions as may be imposed by the director.

B. The loans granted by the director shall be for a term of not more than twenty years.

C. The loans shall bear interest at the following rates:

If the loan is for a term of not more than five years, the rate is three per cent per year.
If the loan is for a term of more than five years but not more than ten years, the rate is five per cent per year.
If the loan is for a term of more than ten years, the rate is six per cent per year.

D. Each loan shall be evidenced by a contract between the dam owner and the director, acting on behalf of this state. The contract shall provide for the loan by this state of a stated amount to defray some or all of the costs of repairing the dam. The contract shall provide for equal annual payments of principal and interest for the term of the loan.

E. The attorney general may commence whatever actions are necessary to enforce the contract and achieve repayment of loans provided by the director pursuant to this section.

§ 45-1219 Dam repair grants

The director may provide grants from the dam repair fund to dam owners to defray the costs of repairing dams which the director determines to be dangerous to the safety of life and property but which are not in an emergency condition. Grants shall be provided on such terms and conditions as may be imposed by the director and may be in addition to loans granted under section 45-1218.

§ 45-1220 Deposit of monies; dam repair fund

A. Monies appropriated by the legislature for nonemergency dam repair, dam safety inspection fees collected pursuant to section 45-113, filing fees collected pursuant to section 45-1204 and payments of principal and interest collected by the director pursuant to section 45-1218 shall be deposited in the dam repair fund established by section 45-1212.01.

B. Monies in the dam repair fund deposited pursuant to subsection A of this section shall be used for loans and grants as provided in sections 45-1218 and 45-1219 to carry out the purposes of this chapter.

§ 45-1221 Cease and desist order; temporary cease and desist order; hearing; injunctive relief

A. Except as provided by subsection B of this section, if the director has reason to believe that a person is violating or has violated a provision of this article or a license, rule or order issued or adopted pursuant to this article, the director may give the person written notice that the person may appear and show cause at an administrative hearing not less than thirty days from the date of service of the notice why the person should not be ordered to cease and desist from the violation. The notice shall inform the person of the date, time and place of the hearing and the consequences of failure to appear.

B. If the director finds that a person is constructing, reconstructing, enlarging, repairing, altering, removing or using a dam without having first obtained the necessary approval of the director, the director may issue a temporary order for the person to cease and desist the construction, reconstruction, enlargement, repair, alteration, removal or use pending final action by the director pursuant to subsection C of this section. The order shall include written notice to the person of the date and time when and place where the person may appear at an administrative hearing to show cause why the temporary order should be vacated. The hearing shall be held within fifteen days of the date of the order unless the person consents to a longer period.

E. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

§ 45-1222 Violation; civil penalties

A. A person who is determined pursuant to section 45-1221 to be in violation of this article or a license, rule or order issued or adopted pursuant to this article may be assessed a civil penalty in an amount not exceeding one thousand dollars per day of violation.

B. The director shall bring an action to recover penalties under this section in the superior court in the county in which the violation occurred.

D. All penalties collected pursuant to this section shall be deposited in the state general fund.

§ 45-1223 Stay of director's decision; precedence of actions for judicial review

A. A decision of the director shall not be stayed pending an action for judicial review, except that the judge to whom the action for judicial review has been assigned may stay the decision of the director with or without bond on a showing of good cause. In determining if good cause exists under the circumstances, the court may consider whether:

The public interest will be adversely affected by a stay.
The stay will harm others.
There is a high probability that the appellant will succeed on the merits.
The appellant will suffer irreparable harm before a decision on the merits can be rendered.

B. For the benefit of the people of this state, actions for judicial review under this article have precedence, in every court, over all other civil proceedings.

C. The final decision of the superior court is appealable in the same manner as in civil actions generally and shall be governed by the rules of appellate procedure.

Chapter 7 Interstate Streams

Article 1 Lake Mead Contract

§ 45-1301 Ratification of Lake Mead contract

There is hereby unconditionally ratified, approved and confirmed, that certain contract for the storage and delivery of water from Lake Mead executed on behalf of the United States by the honorable Harold L. Ickes, secretary of the interior, and on behalf of the state of Arizona by its Colorado river commission, bearing date the 9th day of February, 1944, as follows:

UNITED STATES

DEPARTMENT OF THE INTERIOR

Bureau of Reclamation

BOULDER CANYON PROJECT

Arizona-California-Nevada

CONTRACT FOR DELIVERY OF WATER

This contract made this 9th day of February, 1944, pursuant to the Act of Congress approved June 17, 1902 (32 Stat. 388), and acts amendatory thereof or supplemental thereto, all of which acts are commonly known and referred to as the Reclamation Law, and particularly pursuant to the Act of Congress approved December 21, 1928 (45 Stat. 1057), designated the Boulder Canyon project act, and acts amendatory thereof or supplementary thereto, between the United States of America, hereinafter referred to as "United States," acting for this purpose by Harold L. Ickes, secretary of the interior, hereinafter referred to as the "secretary," and the state of Arizona, hereinafter referred to as "Arizona," acting for this purpose by the Colorado river commission of Arizona, pursuant to chapter 46 of the 1939 session laws of Arizona,

WITNESSETH THAT:

EXPLANATORY RECITALS

WHEREAS, for the purpose of controlling floods, improving navigation, regulating the flow of the Colorado River, providing for storage and for the delivery of stored waters for the reclamation of public lands and other beneficial uses exclusively within the United States, the Secretary acting under and in pursuance of the provisions of the Colorado River Compact and Boulder Canyon Project Act, and acts amendatory thereof or supplementary thereto, has constructed and is now operating and maintaining in the main stream of the Colorado River at Black Canyon that certain structure known as and designated Boulder Dam and incidental works, creating thereby a reservoir designated Lake Mead of a capacity of about thirty-two million (32,000,000) acre-feet, and
WHEREAS, said Boulder Canyon Project Act provides that the Secretary under such general rules and regulations, as he may prescribe, may contract for the storage of water in the reservoir created by Boulder Dam, and for the delivery of such water at such points on the river as may be agreed upon, for irrigation and domestic uses, and provides further that no person shall have or be entitled to have the use for any purpose of the water stored, as aforesaid, except by contract made as stated in said Act, and
WHEREAS, it is the desire of the parties to this contract to contract for the storage of water and the delivery thereof for irrigation of lands and domestic uses within Arizona, and
WHEREAS, nothing in this contract shall be construed as affecting the obligations of the United States to Indian tribes,
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows, to wit: DELIVERY OF WATER
(a) Subject to the availability thereof for use in Arizona under the provisions of the Colorado River Compact and the Boulder Canyon Project Act, the United States shall deliver and Arizona, or agencies or water users therein, will accept under this contract each calendar year from storage in Lake Mead, at a point or points of diversion on the Colorado River approved by the Secretary, so much water as may be necessary for the beneficial consumptive use for irrigation and domestic uses in Arizona of a maximum of 2,800,000 acre-feet.

(b) The United States also shall deliver from storage in Lake Mead for use in Arizona, at a point or points of diversion on the Colorado River approved by the Secretary, for the uses set forth in subdivision (a) of this Article, one-half of any excess or surplus waters unapportioned by the Colorado River Compact to the extent such water is available for use in Arizona under said compact and said act, less such excess or surplus water unapportioned by said compact as may be used in Nevada, New Mexico, and Utah in accordance with the rights of said states as stated in subdivisions (f) and (g) of this Article.

(c) This contract is subject to the condition that Boulder Dam and Lake Mead shall be used: First, for river regulation, improvement of navigation, and flood control; second, for irrigation and domestic uses and satisfaction of perfected rights in pursuance of Article VIII of the Colorado River Compact; and third, for power. This contract is made upon the express condition and with the express covenant that the United States and Arizona, and agencies and water users therein, shall observe and be subject to and controlled by said Colorado River Compact and the Boulder Canyon Project Act in the construction, management, and operation of Boulder Dam, Lake Mead, canals and other works, and the storage, diversion, delivery and use of water for the generation of power, irrigation and other uses.

(d) The obligation to deliver water at or below Boulder Dam shall be diminished to the extent that consumptive uses now or hereafter existing in Arizona above Lake Mead diminish the flow into Lake Mead, and such obligation shall be subject to such reduction on account of evaporation, reservoir and river losses, as may be required to render this contract in conformity with said compact and said act.

(e) This contract is for permanent service, subject to the conditions stated in subdivision (c) of this Article, but as to the one-half of the waters of the Colorado River system unapportioned by paragraphs (a), (b) and (c) of Article III of the Colorado River Compact, such water is subject to further equitable apportionment at any time after October 1, 1963, as provided in Article III (f) and Article III (g) of the Colorado River Compact.

(f) Arizona recognizes the right of the United States and the State of Nevada to contract for the delivery from storage in Lake Mead for annual beneficial consumptive use within Nevada for agricultural and domestic uses of 300,000 acre-feet of the water apportioned to the Lower Basin by the Colorado River Compact, and in addition thereto to make contract for like use of 1/25 (one twenty-fifth) of any excess or surplus waters available in the Lower Basin and unapportioned by the Colorado River Compact, which waters are subject to further equitable apportionment after October 1, 1963 as provided in Article III (f) and Article III (g) of the Colorado River Compact.

(g) Arizona recognizes the rights of New Mexico and Utah to equitable shares of the water apportioned by the Colorado River Compact to the Lower Basin and also water unapportioned by such compact, and nothing contained in this contract shall prejudice such rights.

(h) Arizona recognizes the right of the United States and agencies of the State of California to contract for storage and delivery of water from Lake Mead for beneficial consumptive use in California, provided that the aggregate of all such deliveries and uses in California from the Colorado River shall not exceed the limitation of such uses in that State required by the provisions of the Boulder Canyon Project Act and agreed to by the State of California by an act of its Legislature (Chapter 16, Statutes of California of 1929) upon which limitation the State of Arizona expressly relies.

(i) Nothing in this contract shall preclude the parties hereto from contracting for storage and delivery above Lake Mead of water herein contracted for, when and if authorized by law.

(j) As far as reasonable diligence will permit, the water provided for in this contract shall be delivered as ordered and as reasonably required for domestic and irrigation uses within Arizona. The United States reserves the right to discontinue or temporarily reduce the amount of water to be delivered, for the purpose of investigation and inspection, maintenance, repairs, replacements or installation of equipment or machinery at Boulder Dam, or other dams heretofore or hereafter to be constructed, but so far as feasible will give reasonable notice in advance of such temporary discontinuance or reduction.

(k) The United States, its officers, agents and employees shall not be liable for damages when for any reason whatsoever suspensions or reductions in the delivery of water occur.

(l) Deliveries of water hereunder shall be made for use within Arizona to such individuals, irrigation districts, corporations or political subdivisions therein of Arizona as may contract therefor with the Secretary, and as may qualify under the Reclamation Law or other federal statutes or to lands of the United States within Arizona. All consumptive uses of water by users in Arizona, of water diverted from Lake Mead or from the main stream of the Colorado River below Boulder Dam, whether made under this contract or not, shall be deemed, when made, a discharge pro tanto of the obligation of this contract. Present perfected rights to the beneficial use of waters of the Colorado River system are unimpaired by this contract.

(m) Rights-of-way across public lands necessary or convenient for canals to facilitate the full utilization in Arizona of the water herein agreed to be delivered will be granted by the Secretary subject to applicable federal statutes.

POINTS OF DIVERSION: MEASUREMENTS OF WATER

The water to be delivered under this contract shall be measured at the points of diversion, or elsewhere as the Secretary may designate (with suitable adjustment for losses between said points of diversion and measurement), by measuring and controlling devices or automatic gauges approved by the secretary, which devices, however, shall be furnished, installed, and maintained by Arizona, or the users of water therein in a manner satisfactory to the Secretary; said measuring and controlling devices or automatic gauges shall be subject to the inspection of the United States, whose authorized representatives may at all times have access to them, and any deficiencies found shall be promptly corrected by the users thereof. The United States shall be under obligation to deliver water only at diversion points where measuring and controlling devices or automatic gauges are maintained, in accordance with this contract, but in the event diversions are made at points where such devices are not maintained, the secretary shall estimate the quantity of such diversions and his determination thereof shall be final.

CHARGES FOR STORAGE AND DELIVERY OF WATER

No charge shall be made for the storage or delivery of water at diversion points as herein provided necessary to supply present perfected rights in Arizona. A charge of 50¢ per acre-foot shall be made for all water actually diverted directly from Lake Mead during the Boulder Dam cost repayment period, which said charge shall be paid by the users of such water, subject to reduction by the Secretary in the amount of the charge if it is concluded by him at any time during said cost-repayment period that such charge is too high. After expiration of the cost-repayment period, charges shall be on such basis as may hereafter be prescribed by Congress. Charges for the storage or delivery of water diverted at a point or points below Boulder Dam, for users, other than those specified above, shall be as agreed upon between the Secretary and such users at the time of execution of contracts therefor, and shall be paid by such users; provided such charges shall, in no event, exceed 25 per acre-foot.

RESERVATIONS

Neither Article 7, nor any other provision of this contract, shall impair the right of Arizona and other states and the users of water therein to maintain, prosecute or defend any action respecting, and is without prejudice to, any of the respective contentions of said states and water users as to (1) the intent, effect, meaning and interpretation of said compact and said act; (2) what part, if any, of the water used or contracted for by any of them falls within Article III (a) of the Colorado River Compact; (3) what part, if any, is within Article III (b) thereof; (4) what part, if any, is excess or surplus waters unapportioned by said Compact; and (5) what limitations on use, rights of use and relative priorities exist as to the waters of the Colorado River system; provided, however, that by these reservations there is no intent to disturb the apportionment made by Article III (a) of the Colorado River Compact between the Upper Basin and the Lower Basin.

DISPUTES AND DISAGREEMENTS

Whenever a controversy arises out of this contract, and if the parties hereto then agree to submit the matter to arbitration, Arizona shall name one arbitrator and the Secretary shall name one arbitrator and the two arbitrators thus chosen shall meet within ten days after their selection and shall elect one other arbitrator within fifteen days after their first meeting, but in the event of their failure to name the third arbitrator within thirty days after their first meeting, such arbitrator not so selected shall be named by the Senior Judge of the United States Circuit Court of Appeals for the Tenth Circuit. The decision of any two of the three arbitrators thus chosen shall be a valid and binding award.

RULES AND REGULATIONS

The Secretary may prescribe and enforce rules and regulations governing the delivery and diversion of waters hereunder, but such rules and regulations shall be promulgated, modified, revised or extended from time to time only after notice to the State of Arizona and opportunity is given to it to be heard. Arizona agrees for itself, its agencies and water users that in the operation and maintenance of the works for diversion and use of the water to be delivered hereunder, all such rules and regulations will be fully adhered to.

AGREEMENT SUBJECT TO COLORADO RIVER COMPACT

This contract is made upon the express condition and with the express covenant that all rights of Arizona, its agencies and water users, to waters of the Colorado River and its tributaries, and the use of the same, shall be subject to and controlled by the Colorado River Compact signed at Santa Fe, New Mexico, November 24, 1922, pursuant to the Act of Congress approved August 19, 1921 (42 Stat. 171), as approved by the Boulder Canyon Project Act.

EFFECTIVE DATE OF CONTRACT

This contract shall be of no effect unless it is unconditionally ratified by an Act of the Legislature of Arizona, within three years from the date hereof, and further, unless within three years from the date hereof the Colorado River Compact is unconditionally ratified by Arizona. When both ratifications are effective, this contract shall be effective.

INTEREST IN CONTRACT NOT TRANSFERABLE

No interest in or under this contract, except as provided by Article 7(l), shall be transferable by either party without the written consent of the other.

APPROPRIATION CLAUSE

The performance of this contract by the United States is contingent upon Congress making the necessary appropriations for expenditures for the completion and the operation and maintenance of any dams, power plants or other works necessary to the carrying out of this contract, or upon the necessary allotments being made therefor by any authorized federal agency. No liability shall accrue against the United States, its officers, agents or employees by reason of the failure of Congress to make any such appropriations or of any federal agency to make such allotments.

MEMBER OF CONGRESS CLAUSE

No Member of or Delegate to Congress or Resident Commissioner shall be admitted to any share or part of this contract or to any benefit that may arise herefrom, but this restriction shall not be construed to extend to this contract if made with a corporation or company for its general benefit. DEFINITIONS
Wherever terms used herein are defined in Article II of the Colorado River Compact or in Section 12 of the Boulder Canyon Project Act, such definitions shall apply in construing this contract.
IN WITNESS WHEREOF, the parties hereto have caused this contract to be executed the day and year first above written.

THE UNITED STATES OF AMERICA

By (s) Harold L. Ickes

Secretary of the Interior

STATE OF ARIZONA, acting by and through its

COLORADO RIVER COMMISSION

By (s) Henry S. Wright, Chairman

By (s) Nellie T. Bush, Secretary

Approved this 11th day of Feb., 1944

(s) Sidney P. Osborn

Governor of the State of Arizona

Article 2 Colorado River Compact

§ 45-1311 Ratification

The Colorado River compact executed at Santa Fe, New Mexico, November 24, 1922, by representatives of the states of Arizona, California, Colorado, Nevada, New Mexico, Utah and Wyoming is unconditionally ratified, approved and confirmed.

Text of Colorado River Compact

The States of Arizona, California, Colorado, Nevada, New Mexico, Utah and Wyoming, having resolved to enter into a compact under the Act of the Congress of the United States of America approved August 19, 1921 (42 Statutes at Large, Page 171) and the Acts of the Legislatures of the said States, have through their Governors appointed as their Commissioners:

W. S. Norviel for the State of Arizona

W. F. McClure for the State of California

Delph E. Carpenter for the State of Colorado

J. G. Scrugham for the State of Nevada

Stephen B. Davis, Jr. for the State of New Mexico

R. E. Caldwell for the State of Utah

Frank C. Emerson for the State of Wyoming

who, after negotiations participated in by Herbert Hoover appointed by The President as the representative of the United States of America, have agreed upon the following articles:

ARTICLE I

The major purposes of this compact are to provide for the equitable division and apportionment of the use of the waters of the Colorado River System; to establish the relative importance of different beneficial uses of water; to promote interstate comity; to remove causes of present and future controversies; and to secure the expeditious agricultural and industrial development of the Colorado River Basin, the storage of its waters and the protection of life and property from floods. To these ends the Colorado River Basin is divided into two Basins, and an apportionment of the use of part of the water of the Colorado River System is made to each of them with the provision that further equitable apportionments may be made.

ARTICLE II

As used in this compact:--

(a) The term "Colorado River System" means that portion of the Colorado River and its tributaries within the United States of America.

(b) The term "Colorado River Basin" means all of the drainage area of the Colorado River System and all other territory within the United States of America to which the waters of the Colorado River System shall be beneficially applied.

(d) The term "States of the Lower Division" means the States of Arizona, California and Nevada.

(e) The term "Lee Ferry" means a point in the main stream of the Colorado River one mile below the mouth of the Paria River.

(f) The term "Upper Basin" means those parts of the States of Arizona, Colorado, New Mexico, Utah and Wyoming within and from which waters naturally drain into the Colorado River System above Lee Ferry, and also all parts of said States located without the drainage area of the Colorado River System which are now or shall hereafter be beneficially served by waters diverted from the System above Lee Ferry.

(g) The term "Lower Basin" means those parts of the States of Arizona, California, Nevada, New Mexico and Utah within and from which waters naturally drain into the Colorado River System below Lee Ferry, and also all parts of said States located without the drainage area of the Colorado River System which are now or shall hereafter be beneficially served by waters diverted from the System below Lee Ferry.

(h) The term "domestic use" shall include the use of water for household, stock, municipal, mining, milling, industrial and other like purposes, but shall exclude the generation of electrical power.

ARTICLE III

(a) There is hereby apportioned from the Colorado River System in perpetuity to the Upper Basin and to the Lower Basin respectively the exclusive beneficial consumptive use of 7,500,000 acre feet of water per annum, which shall include all water necessary for the supply of any rights which may now exist.

(b) In addition to the apportionment in paragraph (a), the Lower Basin is hereby given the right to increase its beneficial consumptive use of such waters by one million acre feet per annum.

(c) If, as a matter of international comity, the United States of America shall hereafter recognize in the United States of Mexico any right to the use of any waters of the Colorado River System, such waters shall be supplied first from the waters which are surplus over and above the aggregate of the quantities specified in paragraphs (a) and (b); and if such surplus shall prove insufficient for this purpose, then, the burden of such deficiency shall be equally borne by the Upper Basin and the Lower Basin, and whenever necessary the States of the Upper Division shall deliver at Lee Ferry water to supply one-half of the deficiency so recognized in addition to that provided in paragraph (d).

(d) The States of the Upper Division will not cause the flow of the river at Lee Ferry to be depleted below an aggregate of 75,000,000 acre feet for any period of ten consecutive years reckoned in continuing progressive series beginning with the first day of October next succeeding the ratification of this compact.

(e) The States of the Upper Division shall not withhold water, and the States of the Lower Division shall not require the delivery of water, which cannot reasonably be applied to domestic and agricultural uses.

(f) Further equitable apportionment of the beneficial uses of the waters of the Colorado River System unapportioned by paragraphs (a), (b) and (c) may be made in the manner provided in paragraph (g) at any time after October first, 1963, if and when either Basin shall have reached its total beneficial consumptive use as set out in paragraphs (a) and (b).

(g) In the event of a desire for a further apportionment as provided in paragraph (f) any two signatory States, acting through their Governors, may give joint notice of such desire to the Governors of the other signatory States and to The President of the United States of America, and it shall be the duty of the Governors of the signatory States and of The President of the United States of America forthwith to appoint representatives, whose duty it shall be to divide and apportion equitably between the Upper Basin and Lower Basin the beneficial use of the unapportioned water of the Colorado River System as mentioned in paragraph (f), subject to the legislative ratification of the signatory States and the Congress of the United States of America.

ARTICLE IV

(a) Inasmuch as the Colorado River has ceased to be navigable for commerce and the reservation of its waters for navigation would seriously limit the development of its Basin, the use of its waters for purposes of navigation shall be subservient to the uses of such waters for domestic, agricultural and power purposes. If the Congress shall not consent to this paragraph, the other provisions of this compact shall nevertheless remain binding.

(b) Subject to the provisions of this compact, water of the Colorado River System may be impounded and used for the generation of electrical power, but such impounding and use shall be subservient to the use and consumption of such water for agricultural and domestic purposes and shall not interfere with or prevent use for such dominant purposes.

(c) The provisions of this article shall not apply to or interfere with the regulation and control by any State within its boundaries of the appropriation, use and distribution of water.

ARTICLE V

The chief official of each signatory State charged with the administration of water rights, together with the Director of the United States Reclamation Service and the Director of the United States Geological Survey shall cooperate, ex officio:

(a) To promote the systematic determination and co-ordination of the facts as to flow, appropriation, consumption and use of water in the Colorado River Basin, and the interchange of available information in such matters.

(b) To secure the ascertainment and publication of the annual flow of the Colorado River at Lee Ferry.

ARTICLE VI

Should any claim or controversy arise between any two or more of the signatory States: (a) with respect to the waters of the Colorado River System not covered by the terms of this compact; (b) over the meaning or performance of any of the terms of this compact; (c) as to the allocation of the burdens incident to the performance of any article of this compact or the delivery of waters as herein provided; (d) as to the construction or operation of works within the Colorado River Basin to be situated in two or more States, or to be constructed in one State for the benefit of another State; or (e) as to the diversion of water in one State for the benefit of another State; the Governors of the States affected, upon the request of one of them, shall forthwith appoint Commissioners with power to consider and adjust such claim or controversy, subject to ratification by the Legislatures of the States so affected.

Nothing herein contained shall prevent the adjustment of any such claim or controversy by any present method or by direct future legislative action of the interested States.

ARTICLE VII

Nothing in this compact shall be construed as affecting the obligations of the United States of America to Indian tribes.

ARTICLE VIII

Present perfected rights to the beneficial use of waters of the Colorado River System are unimpaired by this compact. Whenever storage capacity of 5,000,000 acre feet shall have been provided on the main Colorado River within or for the benefit of the Lower Basin, then claims of such rights, if any, by appropriators or users of water in the Lower Basin against appropriators or users of water in the Upper Basin shall attach to and be satisfied from water that may be stored not in conflict with Article III.

All other rights to beneficial use of waters of the Colorado River System shall be satisfied solely from the water apportioned to that Basin in which they are situate.

ARTICLE IX

Nothing in this compact shall be construed to limit or prevent any State from instituting or maintaining any action or proceeding, legal or equitable, for the protection of any right under this compact or the enforcement of any of its provisions.

ARTICLE X

This compact may be terminated at any time by the unanimous agreement of the signatory States. In the event of such termination all rights established under it shall continue unimpaired.

ARTICLE XI

This compact shall become binding and obligatory when it shall have been approved by the Legislatures of each of the signatory States and by the Congress of the United States. Notice of approval by the Legislatures shall be given by the Governor of each signatory State to the Governors of the other signatory States and to the President of the United States, and the President of the United States is requested to give notice to the Governors of the signatory States of approval by the Congress of the United States.

IN WITNESS WHEREOF, the Commissioners have signed this compact in a single original, which shall be deposited in the archives of the Department of State of the United States of America and of which a duly certified copy shall be forwarded to the Governor of each of the signatory States.

DONE at the City of Santa Fe, New Mexico, this twenty-fourth day of November, A.D. One Thousand Nine Hundred and Twenty-two.

(Signed) W. S. Norviel

(Signed) W. F. McClure

(Signed) Delph E. Carpenter

(Signed) J. G. Scrugham

(Signed) Stephen B. Davis, Jr.

(Signed) R. E. Caldwell

(Signed) Frank C. Emerson

APPROVED:

(Signed) Herbert Hoover.

Article 3 Upper Colorado River Basin Compact

§ 45-1321 Ratification

The upper Colorado river basin compact executed in Santa Fe, New Mexico, on October 11, 1948, by representatives of the States of Arizona, Colorado, New Mexico, Utah and Wyoming, is unconditionally ratified, approved and confirmed.

Text of Upper Colorado River Basin Compact

The State of Arizona, the State of Colorado, the State of New Mexico, the State of Utah and the State of Wyoming, acting through their Commissioners, Charles A. Carson for the State of Arizona, Clifford H. Stone for the State of Colorado, Fred E. Wilson for the State of New Mexico, Edward H. Watson for the State of Utah and L. C. Bishop for the State of Wyoming, after negotiations participated in by Harry W. Bashore, appointed by the president as the representative of the United States of America, have agreed, subject to the provisions of the Colorado River Compact, to determine the rights and obligations of each signatory State respecting the uses and deliveries of the water of the Upper Basin of the Colorado River, as follows:

ARTICLE I

(a) The major purposes of this Compact are to provide for the equitable division and apportionment of the use of the waters of the Colorado River System, the use of which was apportioned in perpetuity to the Upper Basin by the Colorado River Compact; to establish the obligations of each State of the Upper Division with respect to the deliveries of water required to be made at Lee Ferry by the Colorado River Compact; to promote interstate comity; to remove causes of present and future controversies; to secure the expeditious agricultural and industrial development of the Upper Basin, the storage of water and to protect life and property from floods.

(b) It is recognized that the Colorado River Compact is in full force and effect and all of the provisions hereof are subject thereto.

ARTICLE II

As used in this Compact:

(a) The term "Colorado River System" means that portion of the Colorado River and its tributaries within the United States of America.

(d) The term "States of the Lower Division" means the States of Arizona, California and Nevada.

(e) The term "Lee Ferry" means a point in the main stream of the Colorado River one mile below the mouth of the Paria River.

(h) The term "Colorado River Compact" means the agreement concerning the apportionment of the use of the waters of the Colorado River System dated November 24, 1922, executed by Commissioners for the States of Arizona, California, Colorado, Nevada, New Mexico, Utah and Wyoming, approved by Herbert Hoover, representative of the United States of America, and proclaimed effective by the president of the United States of America, June 25, 1929.

(i) The term "Upper Colorado River System" means that portion of the Colorado River System above Lee Ferry.

(j) The term "Commission" means the administrative agency created by Article VIII of this Compact.

(k) The term "water year" means that period of twelve months ending September 30 of each year.

(l) The term "acre-foot" means the quantity of water required to cover an acre to the depth of one foot and is equivalent to 43,560 cubic feet.

(m) The term "domestic use" shall include the use of water for household, stock, municipal, mining, milling, industrial and other like purposes, but shall exclude the generation of electrical power.

(n) The term "virgin flow" means the flow of any stream undepleted by the activities of man.

ARTICLE III

(a) Subject to the provisions and limitations contained in the Colorado River Compact and in this Compact, there is hereby apportioned from the Upper Colorado River System in perpetuity to the States of Arizona, Colorado, New Mexico, Utah and Wyoming, respectively, the consumptive use of water as follows:

(1) To the State of Arizona the consumptive use of 50,000 acre-feet of water per annum.

(2) To the States of Colorado, New Mexico, Utah and Wyoming, respectively, the consumptive use per annum of the quantities resulting from the application of the following percentages to the total quantity of consumptive use per annum apportioned in perpetuity to and available for use each year by Upper Basin under the Colorado River Compact and remaining after the deduction of the use, not to exceed 50,000 acre-feet per annum, made in the State of Arizona.

State of Colorado 51.75 per cent,

State of New Mexico 11.25 per cent,

State of Utah 23.00 per cent,

State of Wyoming 14.00 per cent.

(b) The apportionment made to the respective States by paragraph (a) of this Article is based upon, and shall be applied in conformity with, the following principles and each of them:

(1) The apportionment is of any and all man-made depletions;

(2) Beneficial use is the basis, the measure and the limit of the right to use;

(3) No State shall exceed its apportioned use in any water year when the effect of such excess use, as determined by the Commission, is to deprive another signatory State of its apportioned use during that water year; provided, that this subparagraph (b) (3) shall not be construed as:

(i) Altering the apportionment of use, or obligations to make deliveries as provided in Article XI, XII, XIII or XIV of this Compact;

(ii) Purporting to apportion among the signatory States such uses of water as the Upper Basin may be entitled to under paragraphs (f) and (g) of Article III of the Colorado River Compact; or (iii) Countenancing average uses by any signatory State in excess of its apportionment.

(4) The apportionment to each State includes all water necessary for the supply of any rights which now exist.

(c) No apportionment is hereby made, or intended to be made, of such uses of water as the Upper Basin may be entitled to under paragraphs (f) and (g) of Article III of the Colorado River Compact.

(d) The apportionment made by this Article shall not be taken as any basis for the allocation among the signatory States of any benefits resulting from the generation of power.

ARTICLE IV

In the event curtailment of use of water by the States of the Upper Division at any time shall become necessary in order that the flow at Lee Ferry shall not be depleted below that required by Article III of the Colorado River Compact, the extent of curtailment by each State of the consumptive use of water apportioned to it by Article III of this Compact shall be in such quantities and at such times as shall be determined by the Commission upon the application of the following principles:

(a) The extent and times of curtailment shall be such as to assure full compliance with Article III of the Colorado River Compact;

(b) If any State or States of the Upper Division, in the ten years immediately preceding the water year in which curtailment is necessary, shall have consumptively used more water than it was or they were, as the case may be, entitled to use under the apportionment made by Article III of this Compact, such State or States shall be required to supply at Lee Ferry a quantity of water equal to its, or the aggregate of their, overdraft or the proportionate part of such overdraft, as may be necessary to assure compliance with Article III of the Colorado River Compact, before demand is made on any other State of the Upper Division;

(c) Except as provided in subparagraph (b) of this Article, the extent of curtailment by each State of the Upper Division of the consumptive use of water apportioned to it by Article III of this Compact shall be such as to result in the delivery at Lee Ferry of a quantity of water which bears the same relation to the total required curtailment of use by the States of the Upper Division as the consumptive use of Upper Colorado River System water which was made by each such State during the water year immediately preceding the year in which the curtailment becomes necessary bears to the total consumptive use of such water in the States of the Upper Division during the same water year; provided, that in determining such relation the uses of water under rights perfected prior to November 24, 1922, shall be excluded.

ARTICLE V

(a) All losses of water occurring from or as the result of the storage of water in reservoirs constructed prior to the signing of this Compact shall be charged to the State in which such reservoir or reservoirs are located. Water stored in reservoirs covered by this paragraph (a) shall be for the exclusive use of and shall be charged to the State in which the reservoir or reservoirs are located.

(b) All losses of water occurring from or as the result of the storage of water in reservoirs constructed after the signing of this Compact shall be charged as follows:

(1) If the Commission finds that the reservoir is used, in whole or in part, to assist the States of the Upper Division in meeting their obligations to deliver water at Lee Ferry imposed by Article III of the Colorado River Compact, the Commission shall make findings, which in no event shall be contrary to the laws of the United States of America under which any reservoir is constructed, as to the reservoir capacity allocated for that purpose. The whole or that proportion, as the case may be, of reservoir losses as found by the Commission to be reasonably and properly chargeable to the reservoir or reservoir capacity utilized to assure deliveries at Lee Ferry shall be charged to the States of the Upper Division in the proportion which the consumptive use of water in each State of the Upper Division during the water year in which the charge is made bears to the total consumptive use of water in all States of the Upper Division during the same water year. Water stored in reservoirs or in reservoir capacity covered by this subparagraph (b) (1) shall be for the common benefit of all of the States of the Upper Division.

(2) If the Commission finds that the reservoir is used, in whole or in part, to supply water for use in a State of the Upper Division, the Commission shall make findings, which in no event shall be contrary to the laws of the United States of America under which any reservoir is constructed, as to the reservoir or reservoir capacity utilized to supply water for use and the State in which such water will be used. The whole or that proportion, as the case may be, of reservoir losses as found by the Commission to be reasonably and properly chargeable to the State in which such water will be used shall be borne by that State. As determined by the Commission, water stored in reservoirs covered by this subparagraph (b) (2) shall be earmarked for and charged to the State in which the water will be used.

(c) In the event the Commission finds that a reservoir site is available both to assure deliveries at Lee Ferry and to store water for consumptive use in a State of the Upper Division, the storage of water for consumptive use shall be given preference. Any reservoir or reservoir capacity hereafter used to assure deliveries at Lee Ferry shall by order of the Commission be used to store water for consumptive use in a State, provided the Commission finds that such storage is reasonably necessary to permit such State to make the use of the water apportioned to it by this Compact.

ARTICLE VI

The Commission shall determine the quantity of the consumptive use of water, which use is apportioned by Article III hereof, for the Upper Basin and for each State of the Upper Basin by the inflow-outflow method in terms of man-made depletions of the virgin flow at Lee Ferry, unless the Commission, by unanimous action, shall adopt a different method of determination.

ARTICLE VII

The consumptive use of water by the United States of America or any of its agencies, instrumentalities or wards shall be charged as a use by the State in which the use is made; provided, that such consumptive use incident to the diversion, impounding, or conveyance of water in one State for use in another shall be charged to such latter State.

ARTICLE VIII

(a) There is hereby created an interstate administrative agency to be known as the "Upper Colorado River Commission." The Commission shall be composed of one Commissioner representing each of the States of the Upper Division, namely, the States of Colorado, New Mexico, Utah and Wyoming, designated or appointed in accordance with the laws of each such State and, if designated by the president, one Commissioner representing the United States of America. The president is hereby requested to designate a Commissioner. If so designated the Commissioner representing the United States of America shall be the presiding officer of the Commission and shall be entitled to the same powers and rights as the Commissioner of any State. Any four members of the Commission shall constitute a quorum.

(b) The salaries and personal expenses of each Commissioner shall be paid by the Government which he represents. All other expenses which are incurred by the Commission incident to the administration of this Compact, and which are not paid by the United States of America, shall be borne by the four States according to the percentage of consumptive use apportioned to each. On or before December 1 of each year, the Commission shall adopt and transmit to the Governors of the four States and to the president a budget covering an estimate of its expenses for the following year, and of the amount payable by each State. Each State shall pay the amount due by it to the Commission on or before April 1 of the year following. The payment of the expenses of the Commission and of its employees shall not be subject to the audit and accounting procedures of any of the four States; however, all receipts and disbursement of funds handled by the Commission shall be audited yearly by a qualified independent public accountant and the report of the audit shall be included in and become a part of the annual report of the Commission.

(c) The Commission shall appoint a Secretary, who shall not be a member of the Commission, or an employee of any signatory State or of the United States of America while so acting. He shall serve for such term and receive such salary and perform such duties as the Commission may direct. The Commission may employ such engineering, legal, clerical and other personnel as, in its judgment, may be necessary for the performance of its functions under this Compact. In the hiring of employees, the Commission shall not be bound by the civil service laws of any State.

(d) The Commission, so far as consistent with this Compact, shall have the power to:

(1) Adopt rules and regulations;

(2) Locate, establish, construct, abandon, operate and maintain water gaging [gauging] stations;

(3) Make estimates to forecast water run-off on the Colorado River and any of its tributaries;

(4) Engage in cooperative studies of water supplies of the Colorado River and its tributaries;

(5) Collect, analyze, correlate, preserve and report on data as to the stream flows, storage, diversions and use of the waters of the Colorado River, and any of its tributaries;

(6) Make findings as to the quantity of water of the Upper Colorado River System used each year in the Upper Colorado River Basin and in each State thereof;

(7) Make findings as to the quantity of water deliveries at Lee Ferry during each water year;

(8) Make findings as to the necessity for and the extent of the curtailment of use, required, if any, pursuant to Article IV hereof;

(9) Make findings as to the quantity of reservoir losses and as to the share thereof chargeable under Article V hereof to each of the States;

(10) Make findings of fact in the event of the occurrence of extraordinary drought or serious accident to the irrigation system in the Upper Basin, whereby deliveries by the Upper Basin of water which it may be required to deliver in order to aid in fulfilling obligations of the United States of America to the United Mexican States arising under the Treaty between the United States of America and the United Mexican States, dated February 3, 1944 (Treaty Series 994) become difficult, and report such findings to the Governors of the Upper Basin States, the president of the United States of America, the United States Section of the International Boundary and Water Commission, and such other Federal officials and agencies as it may deem appropriate to the end that the water allotted to Mexico under Division III of such treaty may be reduced in accordance with the terms of such Treaty;

(11) Acquire and hold such personal and real property as may be necessary for the performance of its duties hereunder and to dispose of the same when no longer required;

(12) Perform all functions required of it by this Compact and do all things necessary, proper or convenient in the performance of its duties hereunder, either independently or in cooperation with any state or federal agency;

(13) Make and transmit annually to the Governors of the signatory States and the president of the United States of America, with the estimated budget, a report covering the activities of the Commission for the preceding water year.

(e) Except as otherwise provided in this Compact the concurrence of four members of the Commission shall be required in any action taken by it.

(f) The Commission and its Secretary shall make available to the Governor of each of the signatory States any information within its possession at any time, and shall always provide free access to its records by the Governors of each of the States, or their representatives, or authorized representatives of the United States of America.

(g) Findings of fact made by the Commission shall not be conclusive in any court, or before any agency or tribunal, but shall constitute prima facie evidence of the facts found.

(h) The organization meeting of the Commission shall be held within four months from the effective date of this Compact.

ARTICLE IX

(a) No State shall deny the right of the United States of America and, subject to the conditions hereinafter contained, no State shall deny the right of another signatory State, any person, or entity of any signatory State to acquire rights to the use of water, or to construct or participate in the construction and use of diversion works and storage reservoirs with appurtenant works, canals and conduits in one State for the purpose of diverting, conveying, storing, regulating and releasing water to satisfy the provisions of the Colorado River Compact relating to the obligation of the States of the Upper Division to make deliveries of water at Lee Ferry, or for the purpose of diverting, conveying, storing or regulating water in an upper signatory State for consumptive use in a lower signatory State, when such use is within the apportionment to such lower State made by this Compact. Such rights shall be subject to the rights of water users, in a State in which such reservoir or works are located, to receive and use water, the use of which is within the apportionment to such State by this Compact.

(b) Any signatory State, any person or any entity of any signatory State shall have the right to acquire such property rights as are necessary to the use of water in conformity with this Compact in any other signatory State by donation, purchase or through the exercise of the power of eminent domain. Any signatory State, upon the written request of the Governor of any other signatory State, for the benefit of whose water users property is to be acquired in the State to which such written request is made, shall proceed expeditiously to acquire the desired property either by purchase at a price satisfactory to the requesting State, or, if such purchase cannot be made, then through the exercise of its power of eminent domain and shall convey such property to the requesting State or such entity as may be designated by the requesting State; provided, that all costs of acquisition and expenses of every kind and nature whatsoever incurred in obtaining the requested property shall be paid by the requesting State at the time and in the manner prescribed by the State requested to acquire the property.

(c) Should any facility be constructed in a signatory State by and for the benefit of another signatory State or States or the water users thereof, as above provided, the construction, repair, replacement, maintenance and operation of such facility shall be subject to the laws of the State in which the facility is located, except that, in the case of a reservoir constructed in one State for the benefit of another State or States, the water administration officials of the State in which the facility is located shall permit the storage and release of any water which, as determined by findings of the Commission, falls within the apportionment of the State or States for whose benefit the facility is constructed. In the case of a regulating reservoir for the joint benefit of all States in making Lee Ferry deliveries, the water administration officials of the State in which the facility is located, in permitting the storage and release of water, shall comply with the findings and orders of the Commission.

(d) In the event property is acquired by a signatory State in another signatory State for the use and benefit of the former, the users of water made available by such facilities, as a condition precedent to the use thereof, shall pay to the political subdivisions of the State in which such works are located, each and every year during which such rights are enjoyed for such purposes, a sum of money equivalent to the average annual amount of taxes levied and assessed against the land and improvements thereon during the ten years preceding the acquisition of such land. Said payments shall be in full reimbursement for the loss of taxes in such political subdivisions of the State, and in lieu of any and all taxes on said property, improvements and rights. The signatory States recommend to the president and the Congress that, in the event the United States of America shall acquire property in one of the signatory States for the benefit of another signatory State, or its water users, provision be made for like payment in reimbursement of loss of taxes.

ARTICLE X

(a) The signatory States recognize La Plata River Compact entered into between the States of Colorado and New Mexico, dated November 27, 1922, approved by the Congress on January 29, 1925 (43 Stat. 796), and this Compact shall not affect the apportionment therein made.

(b) All consumptive use of water of La Plata River and its tributaries shall be charged under the apportionment of Article III hereof to the State in which the use is made; provided, that consumptive use incident to the diversion, impounding or conveyance of water in one State for use in the other shall be charged to the latter State.

ARTICLE XI

Subject to the provisions of this Compact, the consumptive use of the water of the Little Snake River and its tributaries is hereby apportioned between the States of Colorado and Wyoming in such quantities as shall result from the application of the following principles and procedures:

(a) Water used under rights existing prior to the signing of this Compact.

(1) Water diverted from any tributary of the Little Snake River or from the main stem of the Little Snake River above a point one hundred feet below the confluence of Savery Creek and the Little Snake River shall be administered without regard to rights covering the diversion of water from any down-stream points.

(2) Water diverted from the main stem of the Little Snake River below a point one hundred feet below the confluence of Savery Creek and the Little Snake River shall be administered on the basis of an interstate priority schedule prepared by the Commission in conformity with priority dates established by the laws of the respective States.

(b) Water used under rights initiated subsequent to the signing of this Compact.

(1) Direct flow diversions shall be so administered that, in time of shortage, the curtailment of use on each acre of land irrigated thereunder shall be as nearly equal as may be possible in both of the States.

(2) The storage of water by projects located in either State, whether of supplemental supply or of water used to irrigate land not irrigated at the date of the signing of this Compact, shall be so administered that in times of water shortage the curtailment of storage of water available for each acre of land irrigated thereunder shall be as nearly equal as may be possible in both States.

(c) Water uses under the apportionment made by this Article shall be in accordance with the principle that beneficial use shall be the basis, measure and limit of the right to use.

(d) The States of Colorado and Wyoming each assent to diversions and storage of water in one State for use in the other State, subject to compliance with Article IX of this Compact.

(e) In the event of the importation of water to the Little Snake River Basin from any other river basin, the State making the importation shall have the exclusive use of such imported water unless by written agreement, made by the representatives of the States of Colorado and Wyoming on the Commission, it is otherwise provided.

(f) Water use projects initiated after the signing of this Compact, to the greatest extent possible, shall permit the full use within the Basin in the most feasible manner of the waters of the Little Snake River and its tributaries, without regard to the state line; and, so far as is practicable, shall result in an equal division between the States of the use of water not used under rights existing prior to the signing of this Compact.

(g) All consumptive use of the waters of the Little Snake River and its tributaries shall be charged under the apportionment of Article III hereof to the State in which the use is made; provided, that consumptive use incident to the diversion, impounding or conveyance of water in one State for use in the other shall be charged to the latter State.

ARTICLE XII

Subject to the provisions of this Compact, the consumptive use of the waters of Henry's Fork, a tributary of Green River originating in the State of Utah and flowing into the State of Wyoming and thence into the Green River in the State of Utah; Beaver Creek, originating in the State of Utah and flowing into Henry's Fork in the State of Wyoming; Burnt Fork, a tributary of Henry's Fork, originating in the State of Utah and flowing into Henry's Fork in the State of Wyoming; Birch Creek, a tributary of Henry's Fork originating in the State of Utah and flowing into Henry's Fork in the State of Wyoming; and Sheep Creek, a tributary of Green River in the State of Utah, and their tributaries, are hereby apportioned between the States of Utah and Wyoming in such quantities as will result from the application of the following principles and procedures:

(a) Waters used under rights existing prior to the signing of this Compact.

Waters diverted from Henry's Fork, Beaver Creek, Burnt Fork, Birch Creek and their tributaries, shall be administered without regard to the state line on the basis of an interstate priority schedule to be prepared by the States affected and approved by the Commission in conformity with the actual priority of right of use, the water requirements of the land irrigated and the acreage irrigated in connection therewith.

(b) Waters used under rights from Henry's Fork, Beaver Creek, Burnt Fork, Birch Creek and their tributaries, initiated after the signing of this Compact shall be divided fifty per cent to the State of Wyoming and fifty per cent to the State of Utah and each State may use said waters as and where it deems advisable.

(c) The State of Wyoming assents to the exclusive use by the State of Utah of the water of Sheep Creek, except that the lands, if any, presently irrigated in the State of Wyoming from the water of Sheep Creek shall be supplied with water from Sheep Creek in order of priority and in such quantities as are in conformity with the laws of the State of Utah.

(d) In the event of the importation of water to Henry's Fork, or any of its tributaries, from any other river basin, the State making the importation shall have the exclusive use of such imported water unless by written agreement made by the representatives of the States of Utah and Wyoming on the Commission, it is otherwise provided.

(e) All consumptive use of waters of Henry's Fork, Beaver Creek, Burnt Fork, Birch Creek, Sheep Creek, and their tributaries shall be charged under the apportionment of Article III hereof to the State in which the use is made; provided, that consumptive use incident to the diversion, impounding or conveyance of water in one State for use in the other shall be charged to the latter State.

(f) The States of Utah and Wyoming each assent to the diversion and storage of water in one State for use in the other State, subject to compliance with Article IX of this Compact. It shall be the duty of the water administrative officials of the State where the water is stored to release said stored water to the other State upon demand. If either the State of Utah or the State of Wyoming shall construct a reservoir in the other State for use in its own State, the water users of the State in which said facilities are constructed may purchase at cost a portion of the capacity of said reservoir sufficient for the irrigation of their lands thereunder.

(g) In order to measure the flow of water diverted, each State shall cause suitable measuring devices to be constructed, maintained and operated at or near the point of diversion into each ditch.

(h) The State Engineers of the two States jointly shall appoint a Special Water Commissioner who shall have authority to administer the water in both States in accordance with the terms of this Article. The salary and expenses of such Special Water Commissioner shall be paid, thirty percent by the State of Utah and seventy percent by the State of Wyoming.

ARTICLE XIII

Subject to the provisions of this Compact, the rights to the consumptive use of the water of the Yampa River, a tributary entering the Green River in the State of Colorado, are hereby apportioned between the States of Colorado and Utah in accordance with the following principles:

(a) The State of Colorado will not cause the flow of the Yampa River at the Maybell Gaging [Gauging] Station to be depleted below an aggregate of 5,000,000 acre-feet for any period of ten consecutive years reckoned in continuing progressive series beginning with the first day of October next succeeding the ratification and approval of this Compact. In the event any diversion is made from the Yampa River or from tributaries entering the Yampa River above the Maybell Gaging [Gauging] Station for the benefit of any water use project in the State of Utah, then the gross amount of all such diversions for use in the State of Utah, less any returns from such diversions to the River above Maybell, shall be added to the actual flow at the Maybell Gaging [Gauging] Station to determine the total flow at the Maybell Gaging [Gauging] Station.

(b) All consumptive use of the waters of the Yampa River and its tributaries shall be charged under the apportionment of Article III hereof to the State in which the use is made; provided, that consumptive use incident to the diversion, impounding or conveyance of water in one State for use in the other shall be charged to the latter State.

ARTICLE XIV

Subject to the provisions of this Compact, the consumptive use of the waters of the San Juan River and its tributaries is hereby apportioned between the States of Colorado and New Mexico as follows:

The State of Colorado agrees to deliver to the State of New Mexico from the San Juan River and its tributaries which rise in the State of Colorado a quantity of water which shall be sufficient, together with water originating in the San Juan Basin in the State of New Mexico, to enable the State of New Mexico to make full use of the water apportioned to the State of New Mexico by Article III of this Compact, subject, however, to the following:

(a) A first and prior right shall be recognized as to:

(1) All uses of water made in either State at the time of the signing of this Compact; and

(2) All uses of water contemplated by projects authorized, at the time of the signing of this Compact, under the laws of the United States of America whether or not such projects are eventually constructed by the United States of America or by some other entity.

(b) The State of Colorado assents to diversions and storage of water in the State of Colorado for use in the State of New Mexico, subject to compliance with Article IX of this Compact.

(c) The uses of the waters of the San Juan River and any of its tributaries within either State which are dependent upon a common source of water and which are not covered by (a) hereof, shall in times of water shortages be reduced in such quantity that the resulting consumptive use in each State will bear the same proportionate relation to the consumptive use made in each State during times of average water supply as determined by the Commission; provided, that any preferential uses of water to which Indians are entitled under Article XIX shall be excluded in determining the amount of curtailment to be made under this paragraph.

(d) The curtailment of water use by either State in order to make deliveries at Lee Ferry as required by Article IV of this Compact shall be independent of any and all conditions imposed by this Article and shall be made by each State, as and when required, without regard to any provision of this Article.

(e) All consumptive use of the waters of the San Juan River and its tributaries shall be charged under the apportionment of Article III hereof to the State in which the use is made; provided, that consumptive use incident to the diversion, impounding or conveyance of water in one State for use in the other shall be charged to the latter State.

ARTICLE XV

(a) Subject to the provisions of the Colorado River Compact and of this Compact, water of the Upper Colorado River System may be impounded and used for the generation of electrical power, but such impounding and use shall be subservient to the use and consumption of such water for agricultural and domestic purposes and shall not interfere with or prevent use for such dominant purposes.

(b) The provisions of this Compact shall not apply to or interfere with the right or power of any signatory State to regulate within its boundaries the appropriation, use and control of water, the consumptive use of which is apportioned and available to such State by this Compact.

ARTICLE XVI

The failure of any State to use the water, or any part thereof, the use of which is apportioned to it under the terms of this Compact, shall not constitute a relinquishment of the right to such use to the Lower Basin or to any other State, nor shall it constitute a forfeiture or abandonment of the right to such use.

ARTICLE XVII

The use of any water now or hereafter imported into the natural drainage basin of the Upper Colorado River System shall not be charged to any State under the apportionment of consumptive use made by this Compact.

ARTICLE XVIII

(a) The State of Arizona reserves its rights and interests under the Colorado River Compact as a State of the Lower Division and as a State of the Lower Basin.

(b) The State of New Mexico and the State of Utah reserve their respective rights and interests under the Colorado River Compact as States of the Lower Basin.

ARTICLE XIX

Nothing in this Compact shall be construed as:

(a) Affecting the obligations of the United States of America to Indian tribes;

(b) Affecting the obligations of the United States of America under the Treaty with the United Mexican States (Treaty Series 994);

(c) Affecting any rights or powers of the United States of America, its agencies or instrumentalities, in or to the waters of the Upper Colorado River System, or its capacity to acquire rights in and to the use of said waters;

(d) Subjecting any property of the United States of America, its agencies or instrumentalities, to taxation by any State or subdivision thereof, or creating any obligation on the part of the United States of America, its agencies or instrumentalities, by reason of the acquisition, construction or operation of any property or works of whatever kind, to make any payment to any State or political subdivision thereof, State agency, municipality or entity whatsoever, in reimbursement for the loss of taxes;

(e) Subjecting any property of the United States of America, its agencies or instrumentalities, to the laws of any State to an extent other than the extent to which such laws would apply without regard to this Compact.

ARTICLE XX

This Compact may be terminated at any time by the unanimous agreement of the signatory States. In the event of such termination, all rights established under it shall continue unimpaired.

ARTICLE XXI

This Compact shall become binding and obligatory when it shall have been ratified by the legislatures of each of the signatory States and approved by the Congress of the United States of America. Notice of ratification by the legislatures of the signatory States shall be given by the Governor of each signatory State to the Governor of each of the other signatory States and to the president of the United States of America, and the president is hereby requested to give notice to the Governor of each of the signatory States of approval by the Congress of the United States of America.

IN WITNESS WHEREOF, the Commissioners have executed six counterparts hereof each of which shall be and constitute an original, one of which shall be deposited in the archives of the Department of State of the United States of America, and one of which shall be forwarded to the Governor of each of the signatory States.

Done at the City of Santa Fe, State of New Mexico, this 11th day of October, 1948.

(Signed) Charles A. Carson

Commissioner for the State of Arizona

(Signed) Clifford H. Stone

Commissioner for the State of Colorado

(Signed) Fred E. Wilson

Commissioner for the State of New Mexico

(Signed) Edward H. Watson

Commissioner for the State of Utah

(Signed) L. C. Bishop Commissioner for the

State of Wyoming

(Signed) Grover A. Giles

Secretary

APPROVED:

(Signed) Harry W. Bashore

Representative of the United States of America

Article 4 Distribution of Federal Funds Derived From Colorado River

§ 45-1331 Allocation of federal payments made in lieu of taxes

A. When payments are made by the United States, its agencies or instrumentalities to this state in lieu of taxes from the proceeds of any hydroelectric power development on the Colorado river, within the state or on the boundary thereof, pursuant to an act of Congress accepted by the state or otherwise, such payments shall be distributed sixty-six and two-thirds per cent to the state and thirty-three and one-third per cent to the county in which the federal property to which the payment relates is located. If the property to which the lieu payment relates is located in more than one county, the allocation shall be made on the basis of the value of the federal property in each such county, to be determined by the department of revenue.

B. Upon receipt of such payments the state treasurer shall distribute two thirds to the state general fund and the portion allocated to each county shall be placed in a special fund of such county to be used for recreational facilities, access roads and public works. Such special fund shall not be used to reduce the tax rate of such county.

Chapter 8 Flood Control

Article 1 Cooperation by Counties, Cities and Towns With Federal Government

§ 45-1401 Authority to cooperate with federal government in flood control projects under flood control act of Congress of 1948

In addition to the general powers vested in counties, cities and towns and the governing bodies thereof, counties, cities and towns are empowered to cooperate with the United States or any authorized instrumentality, department or agency thereof in the construction of flood control works, authorized under the flood control act of 1948, to the extent necessary to comply with the provisions thereof.

§ 45-1402 Specific powers

Pursuant to the powers granted under the provisions of section 45-1401, counties, cities and towns may:

Acquire and provide, without cost to the United States, land, easements and rights-of-way necessary for the construction of flood control projects.
Agree to hold the United States or any instrumentality, department or agency thereof free from any claim for damages arising from the construction, maintenance and operation of such flood control projects.
Maintain and operate, upon completion, all such works in accordance with regulations prescribed by the secretary of defense, or any authorized agent of the United States.

§ 45-1403 Power to cooperate in flood control projects under general acts of Congress

A. In addition to the general powers vested in counties, the board of supervisors of any one or more counties are empowered separately or severally to cooperate with the United States or any instrumentality, department or agency thereof for the construction, at the expense of the United States, as authorized by any act of Congress, of a flood control project or projects within any such county or counties for local flood protection.

B. Pursuant to the powers granted by the provisions of subsection A, counties are authorized in relation to the flood control project or projects described in subsection A of this section to:

Acquire and provide, without cost to the United States, land, easements and rights of way necessary for the construction of such flood control projects.
Hold and save the United States or any instrumentality, department or agency thereof, free from any claim for damages arising from the construction, maintenance and operation of such flood control projects.
Maintain and operate, upon completion, all such works in accordance with regulations prescribed by the secretary of the army, or any authorized agent of the United States.
Establish and enforce flood-channel limits and regulations, if any, satisfactory to the secretary of the army.

Article 2 Special Laws Pertaining to Particular Municipalities

§ 45-1421 Power of town of Holbrook to cooperate with federal government in flood control project

A. In addition to the general powers vested in towns, the town of Holbrook is empowered to furnish to the secretary of defense such assurance of local cooperation as may be required, in conformity with the provisions of section 3 of the act of Congress approved December 22, 1944 (Public 534, 78th Congress, 2nd session), in connection with the construction, at the expense of the United States, as authorized by such act, of a project on the Little Colorado river for local flood protection at the town of Holbrook.

B. Pursuant to such powers the town of Holbrook is authorized to:

Acquire and provide without cost to the United States all lands, easements and rights-of-way necessary for the construction of the flood control project.
Bear the expense of all necessary utility relocations and such highway and highway bridge alterations as may be undertaken if and when it appears desirable to increase the water-carrying capacity under the bridge across the Little Colorado river or in the event a new bridge is constructed by the state.
Hold the United States free from claim for damages resulting from construction of the works and from allowing the highway bridge to remain in its present condition, including damage to the bridge, the levee and all other property which may be damaged.
Maintain and operate all works upon completion in accordance with regulations prescribed by the secretary of defense.
Establish and enforce flood-channel limits and regulations satisfactory to the secretary of defense for the protection of the flood-carrying capacity of the channel, either within or without the corporate limits of the town of Holbrook.

C. The common council of the town of Holbrook is authorized to levy taxes upon the real and personal property located within the town of Holbrook necessary to pay all costs and expenses incurred in carrying out the purposes of this section and in acquiring lands, easements and rights-of-way required for the construction of the project. The taxes shall be levied and collected as and when taxes are levied and collected for town purposes, and the receipts therefrom shall be placed in the town treasury in a fund to be known as the flood control project fund.

§ 45-1422 Power of Mohave and Yuma counties to cooperate with federal government in flood control project

A. In addition to the general powers vested in counties and the governing bodies thereof, the counties of Mohave and Yuma are empowered to furnish to the secretary of defense such assurance of local cooperation as may be required, in conformity with the provisions of section 3 of the act of Congress approved December 22, 1944 (Public 534, 78th Congress, second session), in connection with the construction, at the expense of the United States, as authorized by such act, of a project on the Bill Williams river for local flood protection and known also as the Alamo flood control project.

B. Pursuant to such powers the counties of Mohave and Yuma are authorized to:

Acquire and provide without cost to the United States all lands, easements and rights-of-way necessary for the construction of the flood control project.
Hold the United States free from claim for damages resulting from construction of the works.
Maintain and operate all works upon completion in accordance with regulations prescribed by the secretary of defense.
Establish and enforce flood-channel limits and regulations satisfactory to the secretary of defense for the protection of the flood-carrying capacity of the channel.

C. The board of supervisors of the counties of Mohave and Yuma are authorized to levy taxes upon the real and personal property located within the counties of Mohave and Yuma necessary to pay all costs and expenses incurred in carrying out the purposes of this section, and in acquiring lands, easements and rights-of-way required for the construction of the project. The taxes shall be levied and collected as and when taxes are levied and collected for county purposes, and the receipts therefrom shall be placed in the county treasuries in a fund to be known as the flood control project fund.

§ 45-1423 Power of Maricopa and Yuma counties to cooperate with federal government in flood control projects

A. In addition to the general powers vested in counties, the counties of Maricopa and Yuma and the governing bodies thereof are empowered to cooperate with the United States or any instrumentality, department or agency thereof for the construction, at the expense of the United States, as authorized by any act of Congress, of a project or projects on the Salt and Gila rivers and tributaries thereof, in Maricopa and Yuma counties for local flood protection.

B. Pursuant to such powers:

The county of Maricopa is authorized in relation to any channel improvement or channel rectification project in Maricopa county on the Salt and Gila rivers and the tributaries thereof to:

(a) Acquire and provide, without cost to the United States, land, easements and rights of way necessary for the construction of flood control projects.

(b) Hold the United States or any instrumentality, department or agency thereof, free from any claim for damages arising from the construction, maintenance and operation of the flood control projects.

(c) Maintain and operate, upon completion, all such works in accordance with regulations prescribed by the secretary of the army, or any authorized agent of the United States.

(d) Establish and enforce flood-channel limits and regulations, if any, satisfactory to the secretary of the army for the protection of the flood-carrying capacity of the channel.

The county of Yuma is authorized in relation to any dam and reservoir project on the Gila river to:

(a) Keep free from encroachment the flood channel of the Gila river down stream from the proposed Painted Rock dam and reservoir.

(b) Procure without cost to the United States the adjustment of water rights claims, if any, that result from the improvement.

§ 45-1424 Power of Maricopa and Pinal counties to cooperate with federal government in flood control projects

A. In addition to the general powers vested in counties, the counties of Maricopa and Pinal and the governing bodies thereof are empowered to cooperate with the United States or any instrumentality, department or agency thereof for the construction, at the expense of the United States, authorized by any act of Congress, of a flood control project or projects on Queen Creek and tributaries thereof in Maricopa and Pinal counties for local flood protection.

B. Pursuant to the powers granted by the provisions of subsection A, the counties of Maricopa and Pinal are authorized, in relation to the flood control project or projects described in subsection A of this section to:

Acquire and provide, without cost to the United States, land, easements and rights of way necessary for the construction of such flood control projects.
Hold and save the United States or any instrumentality, department or agency thereof, free from any claim for damages arising from the construction, maintenance and operation of such flood control projects.
Maintain and operate, upon completion, all such works in accordance with regulations prescribed by the secretary of the army, or any authorized agent of the United States.
Establish and enforce flood-channel limits and regulations, if any, satisfactory to the secretary of the army.

§ 45-1425 Power of Pinal county to cooperate with and receive assistance from the United States in flood control projects

A. The board of supervisors of Pinal county is empowered to cooperate with and receive assistance from the United States or any instrumentality, department or agency thereof for the construction, at the expense of the United States, as authorized pursuant to any act of Congress, of a flood control project or projects within the county for local flood control.

B. Pursuant to the powers granted by the provisions of subsection A, Pinal county is authorized in relation to the flood control project or projects described in subsection A, to:

Acquire and provide, without cost to the United States, land, easements and right of ways necessary for flood control works of improvement.
Hold and save the United States or any instrumentality, department or agency thereof, free from any claim for damages arising from the construction, maintenance and operation of flood control works of improvement.
Construct, carry out, maintain and operate all such works in accordance with regulations prescribed by the secretary of the army or any authorized agent of the United States.
Establish and enforce flood-channel limits and regulations, if any, satisfactory to the secretary of the army or any authorized agent of the United States.

§ 45-1426 Limitations on powers

Notwithstanding section 45-1425, the board of supervisors of Pinal county shall not exercise any power or authority granted by section 45-1425, nor shall it undertake or cooperate in either the planning, authorization, construction, acquisition, extension, improvement, maintenance, or operation of any flood control structures, dams, systems or projects on any portion of a watershed supplying water to any dam and reservoir existing within the state of Arizona having a designed water storage capacity of fifty thousand acre feet or more, or to any existing diversion dam and canal system having facilities within the state of Arizona designed to divert and carry not less than one thousand cubic feet per second, without first having obtained the written consent of the agency, district, association, company or organization owning or operating or being served by such dam, reservoir, diversion dam and canal system. Such consent, however, shall only be required from irrigation districts and agricultural improvement districts organized pursuant to the laws of the state of Arizona as defined under title 48, and any other associations or organizations operating such dams, reservoirs, diversion dams and canal systems as a part of a federal reclamation project.

§ 45-1427 Power of Cochise, Graham and Gila counties and the towns of Safford and Thatcher and the city of Douglas to cooperate with the United States in flood control projects

A. The boards of supervisors of Cochise, Graham and Gila counties and the governing bodies of the towns of Safford and Thatcher and the city of Douglas are empowered to cooperate with the United States or any instrumentality, department or agency thereof for the construction, as authorized by any act of Congress, of a flood control project or projects within the county for local flood protection.

B. Pursuant to the powers granted by the provisions of subsection A, Cochise, Graham and Gila counties and the towns of Safford and Thatcher and the city of Douglas are authorized in relation to the flood control project or projects described in subsection A of this section to:

Acquire and provide, without cost to the United States, land, easements and rights of way necessary for the construction of flood control projects.
Hold and save the United States or any instrumentality, department or agency thereof, free from any claim for damages arising from the construction, maintenance and operation of flood control projects.
Construct and carry out, maintain and operate, upon completion, all such works in accordance with regulations prescribed by the secretary of the army, or any authorized agent of the United States.
Establish and enforce flood-channel limits and regulations, if any, satisfactory to the secretary of the army.
Enter into an agreement with the federal government for the payment, on a pro rata basis, of the cost of construction and maintenance of any project under the provisions of this section.

§ 45-1428 Limitations on powers

Notwithstanding section 45-1427, neither the boards of supervisors of Cochise, Graham or Gila counties nor the governing bodies of the towns of Safford or Thatcher or the city of Douglas shall exercise any power or authority granted by section 45-1427, nor shall they undertake or cooperate in either the planning, authorization, construction, acquisition, extension, improvement, maintenance, or operation of any flood control structures, dams, systems or projects on any portion of a watershed supplying water to any dam and reservoir existing within the state of Arizona having a designed water storage capacity of fifty thousand acre feet or more, or to any existing diversion dam and canal system having facilities within the state of Arizona designed to divert and carry not less than one thousand cubic feet per second, without first having obtained the written consent of the agency, district, association, company or organization owning or operating or being served by such dam, reservoir, diversion dam and canal system. Such consent, however, shall only be required from irrigation districts and agricultural improvement districts organized pursuant to the laws of the state of Arizona as defined under title 48, and any other associations or organizations operating such dams, reservoirs, diversion dams and canal systems as a part of a federal reclamation project.

§ 45-1429 Power of Santa Cruz county to cooperate with and receive assistance from the United States in flood control projects

A. The board of supervisors of Santa Cruz county is empowered to cooperate with and receive assistance from the United States or any instrumentality, department or agency thereof for the construction, at the expense of the United States, as authorized pursuant to any act of Congress, of a flood control project or projects within the county for local flood control.

B. Pursuant to the powers granted by the provisions of subsection A, the board of supervisors of Santa Cruz county is authorized in relation to the flood control project or projects described in subsection A to:

Acquire and provide, without cost to the United States, land, easements and right of ways necessary for flood control works of improvement.
Hold and save the United States or any instrumentality, department or agency thereof, free from any claim for damages arising from the construction, maintenance and operation of flood control works of improvement.
Construct, carry out, maintain and operate all such works in accordance with regulations prescribed by the secretary of the army or any authorized agent of the United States.
Establish and enforce flood-channel limits and regulations, if any, satisfactory to the secretary of the army or any authorized agent of the United States.

C. Notwithstanding anything to the contrary herein set forth, the board of supervisors of Santa Cruz county shall not exercise any power or authority granted by paragraphs A and B hereof, nor shall they undertake or cooperate in either the planning, authorization, construction, acquisition, extension, improvement, maintenance or operation of any flood control structures, dams, systems or projects on any portion of the Santa Cruz river watershed, or its tributaries, without having first obtained written consent of the city of Tucson, the town of Eloy, the city of Casa Grande, and of any and all irrigation districts or electrical districts, the whole or any part of whose underground or surface waters are obtained and derived from the Santa Cruz river and the tributaries.

Article 3 Flood Control Assistance

§ 45-1441 Definitions

In this chapter, unless the context otherwise requires:

"Design flood" means a selected flood against which protection is provided, or eventually will be provided, by means of flood protective or control works. When a federal survey has been authorized the design flood will be determined by the appropriate federal agency and in all other cases it will be determined by the responsible public agency. It is the basis for design and operation of a particular project after full consideration of flood characteristics, frequencies, and potentials and economic and other practical considerations.
"Designated floodway" means the channel of a stream and that portion of the adjoining flood plain required to reasonably provide for the construction of a project for passage of the design flood, including lands necessary for construction of project levees.
"Flood control project" means any project for flood control purposes on which construction commences after April 19, 1973 and which either:

(a) Is authorized under federal law and requires local participation.

(b) Is authorized under state law.

"Lands, easements and rights-of-way" means:

(a) Lands and rights of interest in lands necessary for flood control storage, channel improvements and channel rectifications.

(b) Lands, rights or interests in lands necessary in connection with the construction, operation or maintenance of such storage, channel improvements and rectifications, including those necessary for flowage purposes, spoil areas, borrow pits or for access roads.

(c) The cost of the relocation, reconstruction or replacement of existing improvements, structures or utilities rendered necessary by such channel improvements and rectifications.

(d) Land enhancement costs, if any, charged to a public agency by a federal agency in connection with construction of a flood control project.

"Public agency" means any state agency or political subdivision of the state.

§ 45-1442 Investigation and certification by director of water resources

Any public agency may request the director of water resources to investigate any flood control project in this state and report to the legislature the results of its investigation, and the director shall certify to the legislature the date state funds should be appropriated to pay the cost of state participation in such project and the estimated amount.

§ 45-1443 Limitation on expenditure of funds

A. The director shall not disburse any funds for a flood control project defined by section 45-1441, paragraph 3, subdivision (a) until the legislature has appropriated funds to contribute toward the local cost of land, easements and rights-of-way for that project. The director shall not undertake the construction of flood control projects.

B. Prior to the federal government budgeting funds for the construction of a flood control project, the director may only disburse the state's portion of the costs incurred by a public agency in acquiring fee title to real property necessary for such project. At such times as the federal government does budget funds for the construction of any flood control project in this state, the director may then disburse the state's portion of the costs for easements and rights-of-way.

C. If a public agency receives the state's portion of costs for acquiring fee title to lands, easements and rights-of-way, which are subsequently found to be unnecessary for a flood control project, the public agency shall, within a reasonable time, sell such lands, easements and rights-of-way at fair market value and return to the state one-half the net amount of money realized from such sale after deducting direct expenses of the sale, or may retain such lands, easements or rights-of-way, and return to the state one-half of the fair market value of such lands, easements and rights-of-way.

§ 45-1444 Floodplain regulations; effect of failure to adopt

The director shall not disburse any monies pursuant to this chapter to pay any costs of lands, easements and rights-of-way for a flood control project defined by section 45-1441, paragraph 3, subdivision (a) for which the appropriate public agency fails to establish, within a reasonable time after notification by the director, the necessary floodplain regulations for the area classified as a designated floodway by the director upon review of the complete federal or federally assisted project report.

§ 45-1445 Flood control assistance fund; limit of financial assistance

A. A flood control assistance fund is established. All or part of an appropriation to the fund may be allocated for a specific flood control project defined by section 45-1441, paragraph 3, subdivision (a). All payments for flood control assistance under this article shall be made from the fund. The monies in the fund are exempt from section 35-190, relating to lapsing of appropriations.

B. The state may contribute funds not to exceed one-half of the non-federally supported cost solely for lands, easements and rights-of-way necessary in connection with the construction of any federal or federally assisted flood control project recommended by the director, subject to appropriation of monies by the legislature.

§ 45-1446 Time for determining costs; change of determination

A. The state's portion of the costs of lands, easements and rights-of-way shall be determined by the director at or prior to the time the director submits his report to the legislature recommending an appropriation for such project.

B. The state's portion of such costs shall not be changed unless there are major project changes made in the plan of improvement, in which case the director, prior to the next appropriation of state funds for the project, shall review the project and make such reports and recommendations to the legislature as he deems justified by the project changes.

§ 45-1447 State and United States held harmless; nonliability

The director shall not disburse any monies appropriated pursuant to this chapter or any special appropriations for flood control unless and until a public agency has in writing assumed the obligations of maintenance and provided this state and, if applicable, the federal government with written indemnification from damages due to the construction of flood control projects.

§ 45-1448 Disbursement to public agencies

A. Money appropriated to the director for flood control projects shall be disbursed to public agencies upon order of the director after application by such agencies showing the necessity, purpose and use to be made of such monies.

B. The director shall disburse monies appropriated for flood control projects or special appropriations for flood control if the director determines that either:

All local monies necessary for the project are available.
A public agency has made necessary advances or incurred obligations for the purpose of expediting projects for which such monies are required and giving such other information as the director may require.

C. The director may require interim reports for flood control projects and flood control funded by special appropriations detailing expenditures of disbursed sums and containing such additional information as required by the director.

D. The director may refuse to make any disbursement of any of the monies available if the provisions of this chapter are violated.

§ 45-1449 Report to legislature

The director shall report to the legislature, within fifteen days after the commencement of each regular session, on the disbursal or refusal to disburse money appropriated to him by the legislature for purposes of this chapter and on the disbursal or refusal to disburse monies in any special appropriations for flood control.

§ 45-1450 Consideration of water uses in studying flood control projects

In studying flood control projects, the director shall give full consideration to all beneficial uses of the state's water and other natural resources, including, but not limited to, irrigation, generation of electric energy, municipal and industrial consumption of water and power, recharge of groundwater basins, preservation and development of fish and wildlife resources and recreational facilities in order that recommendations may be made as to the feasibility of such projects and the method of financing feasible projects. Nothing in this chapter shall affect existing water rights.

§ 45-1451 Powers and duties of director

A. The director, or his duly authorized representative, may call, conduct, attend or otherwise participate in conferences or hearings, official or unofficial, within or without this state, with interested persons, agencies or officers of this or any other state or the federal government, concerning flood control and floodplain management.

B. The director shall keep informed as to any activities, requirements or procedures of the federal government, or any of its departments or agencies, affecting any proposed flood control projects within the scope of this chapter.

C. The director shall:

Collect and file data.
Make necessary studies and surveys.
Make investigations.
Prepare plans and estimates for costs and benefits of all proposed water development projects.
Determine the damage created by floodwaters.
Encourage the creation and development of flood control and water conservation plans and activities of the several counties, cities, state agencies and public districts.
Cooperate with the federal government or any of its departments or agencies, counties, cities, state agencies or public districts in carrying out measures for control, storage or use of waters in streams, rivers or other waterways, and the watersheds thereof within this state.
Adopt rules for dispensing monies appropriated by the legislature pursuant to this chapter and for dispensing monies in special appropriations for flood control.

Article 4 Alternative Assistance

§ 45-1471 Alternative flood control assistance to flood control districts

A. Any flood control district organized pursuant to title 48, chapter 21 may, subject to available appropriations, qualify for assistance from this state for any flood control project defined by section 45-1441, paragraph 3, subdivision (b) if such project is being developed pursuant to a plan developed pursuant to section 48-3617.

B. Assistance granted pursuant to this article shall be administered by the director of water resources and shall not exceed for any single flood control project an amount equal to fifty per cent of the total cost of the flood control project or five million dollars, whichever amount is less.

§ 45-1473 Prohibition on assistance for failure to adopt floodplain regulations

The director shall not expend or disburse any monies pursuant to this article for the following functions located or to be located in an area for which the appropriate public agency has failed to adopt and enforce for its area of jurisdiction floodplain regulations required by title 48, chapter 21:

Flood control works.
Flood repairs.
Flood hazard mitigation.
Assistance in developing flood control plans or delineating floodplains.
Payment of any costs of lands, easements or rights-of-way or for any other purpose for a flood control project.

Article 5 Flood Control Loans

§ 45-1491 Flood control loans

A. The director of water resources may grant loans to defray the cost to a county flood control district, organized pursuant to title 48, chapter 21, for flood control projects eligible for alternative flood control assistance under article 4 of this chapter. Loans may be granted, subject to the provisions of this article, in such manner and upon such terms and conditions as may be prescribed by the director.

B. Upon application, the director shall make full and careful investigation of the qualifications of the applicant district and the proposed project. The director shall determine whether the proposed project would provide meaningful flood control and is in the best interests of this state.

C. The loans granted by the director shall be for not more than twenty-five per cent of the cost of a project or two and one-half million dollars, whichever is less, and for a term of not more than twenty years.

D. The loans shall bear interest at the following rates:

If the loan is for a term of not more than five years, the rate is three per cent per year.
If the loan is for a term of more than five years, but not more than ten years, the rate is five per cent per year.
If the loan is for a term of more than ten years, the rate is six per cent per year.

E. Each loan shall be evidenced by a contract between the district and the director, acting on behalf of this state. The contract shall provide for the loan by this state of a stated sum defraying up to twenty-five per cent of the costs of the flood control project. The contract shall provide for equal annual payments of principal and interest for the term of the loan.

F. The district board shall each year levy a tax sufficient to pay the annual amount of principal and interest due on the loan.

G. The attorney general may commence whatever actions are necessary to enforce the contract and achieve repayment of loans provided by the director pursuant to this article.

Article 6 Flood Warning Systems

§ 45-1501 Definitions

In this article, unless the context otherwise requires:

"Flood warning system" means a project or series of projects to detect floods and develop flood preparedness plans and may include the system known as the automatic local evaluation in real time system.
"Local entity" means a city, town, county, political subdivision or drainage and flood control district organized under title 48, chapter 18 or 21 or any other special taxing district organized under title 48.

§ 45-1502 Powers

The director may:

Cooperate and coordinate with the federal government or any of its departments or agencies and local entities to establish a flood warning system for this state.
Disburse monies from the flood warning system fund pursuant to section 45-1504.
Provide technical assistance to local entities to develop and maintain a flood warning system for this state.
Employ staff to provide technical assistance.
Enter into intergovernmental agreements for the purposes stated in this article.

§ 45-1503 Flood warning system fund

A. A flood warning system fund is established for developing a flood warning system, purchasing flood warning system equipment and providing assistance to local entities on a cost sharing basis for the planning, design, installation, operation and maintenance of flood warning systems. The director shall administer the fund.

B. The flood warning system fund shall consist of monies from legislative appropriations, grants and contributions from other public agencies.

C. On notice from the director, the state treasurer shall invest and divest monies in the fund as provided by section 35-313 and monies earned from investment shall be credited to the fund.

D. Monies in the fund are exempt from lapsing under section 35-190.

§ 45-1504 Flood warning system grants

A. The director may grant monies from the flood warning system fund established by section 45-1503 either by advancing monies or by making reimbursements to local entities eligible for flood warning system assistance under this article to defray the cost to the local entity of the following:

Plan and design of a flood warning system.
Purchase of equipment necessary to install a flood warning system.
Installation of flood warning system equipment.
Initial operation of the system including hydrologic and hydraulic modeling and system calibration.

B. On application, the director shall make a full and careful investigation of the qualifications of the applicant and the proposed project. The director shall determine whether the proposed flood warning system would provide meaningful flood warning and is in the best interest of this state.

C. No grant may be for more than seventy-five per cent of the cost of equipment necessary to install the flood warning system.

D. Each grant shall be evidenced by an intergovernmental agreement between the local entity and the director, acting on behalf of this state.

E. Grants may be awarded subject to this article in the manner and on the terms and conditions as may be prescribed by the director. Grants made pursuant to this article are exempt from title 41, chapter 23.

F. The director shall not grant any monies from the flood warning system fund to a local entity in an area for which the appropriate public agency has failed to adopt and enforce for its area of jurisdiction floodplain regulations required by title 48, chapter 21.

G. Grants may be made directly to the director pursuant to this section for the purpose of planning, designing, installing, operating and maintaining a flood warning system. Grants made directly to the director shall be evidenced by a written scope of work.

§ 45-1505 Operation and maintenance of flood warning system

A. The local entity with an intergovernmental agreement with the director regarding a component of a flood warning system is responsible for the operation and maintenance of that component.

B. The director may provide training, technical assistance and ongoing oversight to the local entity responsible for a component of the flood warning system.

C. If maintenance of a component of the flood warning system is required and the local entity with an intergovernmental agreement with the director for that component does not complete the required maintenance within fifteen days of written notice of the required maintenance from the director, the director may complete the required maintenance.

D. In the director's sole discretion, the director may charge a local entity for the costs actually incurred in completing required maintenance or providing ongoing oversight of the operation and maintenance of a component of the flood warning system. On behalf of the department, the attorney general may commence whatever actions are necessary to collect payment of charges imposed pursuant to this subsection.

§ 45-1506 Immunity of state from liability for losses

This state, its departments, agencies, officials, employees and agents and any local entities as defined in section 45-1501 are immune from liability for losses arising from damage, theft, change of location or the partial or total failure of any plan, design, installation, operation or maintenance of a flood warning system.

Chapter 9 Weather Control and Cloud Modification

Article 1 In General

§ 45-1601 License required

No person or corporation, other than the United States and its administrative agencies or the state shall, without having first received a license from the director of water resources, conduct any weather control or cloud modification operations or attempt artificially to produce rainfall.

§ 45-1602 Application for license

Any individual or corporation who proposes to operate weather control or cloud modification projects or attempts to artificially induce rainfall shall, before engaging in any such operation, make application to the director for a license to engage in the particular weather control or cloud modification operation contemplated.

§ 45-1603 Application fee; statement accompanying application

A. At the time of applying for the license, the applicant shall pay to the director a fee of one hundred dollars, and shall file an application in the form prescribed by the director and furnish a statement showing:

The name and address of the applicant.
The names of the operating personnel, and if unincorporated all individuals connected with the organization, or if a corporation the names of each of the officers and directors thereof, together with the address of each.
The scientific qualifications of all operating or supervising personnel.
A statement of all other contracts completed or in process of completion at the time the application is made, giving the names and addresses of the persons to whom the services were furnished and the areas in which such operations have been or are being conducted.
Methods of operation the licensee will use and the description of the aircraft, ground and meteorological services to be utilized.
Names of the contracting parties within the state, including:

(a) The area to be served.

(b) The months in which operations will be conducted.

B. The director shall deposit, pursuant to sections 35-146 and 35-147, all fees received under this section in the water resources fund established by section 45-117.

§ 45-1604 Reports required from licensees; failure to file; revocation of license

Each licensee shall, within ninety days after conclusion of any weather control or cloud modification project, file with the director a final evaluation of the project. Each six months during the operation of any project which has not been completed each licensee shall file a report evaluating the operations for the preceding six months in the project. Failure to file such reports constitutes grounds for immediate revocation of the license.

§ 45-1605 Equipment license; fee; application; reports required; revocation of license

A. Any individual or corporation engaging in manufacturing, selling or offering for sale, leasing or offering to lease, licensing or offering to license equipment and supplies designed for weather control or cloud modification shall, before engaging in such manufacture, sale or offering for sale, procure a license from the director. The license shall be issued upon payment of a license fee of ten dollars and the filing of an application which shall show:

The name and address of the applicant.
The full description of the type and design of the equipment and supplies manufactured and sold by the applicant.
The operating technique of the equipment or supplies.

B. Within sixty days after issuance of an equipment license and semiannually thereafter, the licensee shall file with the director a copy of all advertising material used in selling or offering for sale, leasing or offering for lease, licensing or offering for license the equipment and supplies manufactured or sold by it.

C. The holder of a license shall within ten days after each sale of equipment or supplies report to the director, in writing, the exact character and quantity of equipment or supplies sold, the date of the sale and the persons to whom the sale was made.

D. Failure to file a copy of advertising material or reports required in this section constitutes grounds for immediate revocation of the equipment license.

E. The director shall deposit, pursuant to sections 35-146 and 35-147, all fees received under this section in the water resources fund established by section 45-117.

§ 45-1606 Exception

Nothing in this article shall be construed to prohibit the use and operation of equipment and supplies designed for the purpose of weather control or cloud modification owned by the owner, lessee or licensee of real property used for agricultural purposes on the property for his exclusive benefit.

§ 45-1607 Violations; classification

Any person conducting weather control or cloud modification operations without first having procured a license as provided by this article, or who knowingly makes a false statement in the application for license, or who knowingly fails to file any report or evaluation required by this article, or who conducts any weather control or cloud modification operation after revocation of his or its license, or who violates any other provision of this article, is guilty of a class 3 misdemeanor.

Chapter 10 State Water and Power Plan

Article 1 In General

§ 45-1701 Declaration of purpose and policy

The legislature declares and finds:

That the development of an adequate supply of water for agriculture, municipal, industrial and fish and wildlife uses within the state of Arizona is vital for the well being, health and prosperity of the people of the state.
That the state's right and obligation to receive two million eight hundred thousand acre feet of main stream Colorado river water annually having been confirmed by the United States supreme court in Arizona v. California, 376 U.S. 340 (1964) [84 S.Ct. 755], it is essential to the continued well-being, health and prosperity of the people of the state that the state proceed promptly to establish, develop and execute an appropriate program for the development and utilization of such water.
That the development of the state's power resources is an essential and integral part of the effectuation of such program, including the financing thereof.
That such power resources and the use of the energy therefrom must be developed in order to provide effective support for and implementation of the state's water program and to promote the general welfare, health, safety and prosperity of the people of the state.

§ 45-1702 Definitions

In this article, unless the context otherwise requires:

"Authority" means the Arizona power authority created pursuant to title 30, chapter 1.
"Bonds" and "notes" means bonds and notes, respectively, of the authority issued pursuant to this article.
"District" means any irrigation district, power district, electrical district, agricultural improvement district or water users association now or hereafter organized under the laws of this state that is directly engaged in the sale, distribution or delivery of municipal, industrial or irrigation water or in the sale, distribution or use of electric power or energy.
"Municipality" means any incorporated city or town or other corporation organized for municipal purposes.
"Power" means electric power or electric energy or both.
"Project" or "work" means:

(a) Any of the projects or works authorized by this article or hereafter authorized, including each and every facility or improvement necessary or incidental thereto and all rights-of-way, lands or interests in lands, the use or occupancy of which is necessary or appropriate in the construction, reconstruction, replacement, extension, betterment, development, improvement or operation and maintenance of such facilities and improvements.

(b) Financing or refinancing authorized by section 45-1703, subsection A, paragraph 5.

"Public utility" means any person, corporation, district, electric cooperative, public agency or political subdivision of the state that provides electrical service to the public by means of electric facilities or provides water for municipal, industrial, irrigation, recreation and fish and wildlife purposes to the public.
"Real property" means lands, rights in lands, interests in land, including lands under water, appurtenances, improvements and any and all other things and rights usually included within the term and includes also any and all interest in such property less than full title, such as easements, permanent or temporary rights-of-way, uses, leases, licenses and other such incorporeal hereditaments.
"Retail" means sales to persons, corporations, firms, partnerships or other entities for their use and not for resale.
"State" means the state of Arizona.
"State water and power development fund" means the fund by that name established by section 45-1711.
"State water and power plan" means the plan established pursuant to section 45-1703.
"Wholesale" means sales to municipalities, districts or public utilities for resale or distribution.

§ 45-1703 State water and power plan

A. A water and power plan for the state is established consisting of all or part of the following works and facilities:

Central Arizona project, including:

(a) Granite Reef aqueduct to extend from Lake Havasu to a point in central Arizona on the Salt River near the city of Phoenix, together with pumping plants therefor.

(b) The Salt-Gila aqueduct to extend from the terminus of the Granite Reef aqueduct in central Arizona to the Tucson aqueduct, Colorado source, in the vicinity of Picacho reservoir, together with pumping plants therefor.

(i) New Waddell dam.

(ii) Cliff dam.

(iii) Modifications to Roosevelt dam.

(d) Buttes dam and reservoir on the Gila River east of the town of Florence.

(e) Tucson aqueduct to extend from the terminus of the Salt-Gila aqueduct in the vicinity of Picacho reservoir to and beyond the city of Tucson, together with pumping plants and terminal storage therefor.

Montezuma pumped storage power project to be located approximately twenty-five miles south of the city of Phoenix.
The authority's interest in or rights to capacity and any associated energy of the Hoover power plant modifications project consisting of an additional powerhouse or powerhouses at the Hoover dam and power plant located on the Colorado River in Clark county, Nevada and Mohave county, Arizona and Lake Mead, the reservoir formed behind Hoover dam.
The authority's interest in or rights to capacity and any associated energy of the Hoover power plant uprating project consisting of an increase in capacity of existing generating units at Hoover dam and power plant as a result of replacement and improvement of equipment for such units. In each case the project shall include any improvements thereto and any incidental or associated capacity, energy, buildings, structures, transmission lines or mains, and all other appurtenances and facilities necessary or appropriate thereto.
The financing or refinancing of this state's proportionate share of the costs incurred by the United States with respect to the Hoover visitor facilities as defined in section 101(a) of the Hoover power plant act of 1984 (P.L. 98-381; 98 Stat. 1333; 43 United States Code section 619) and this state's proportionate share of the costs incurred by the bureau of reclamation with respect to the air slot treasury loan for the construction of air slots at Hoover dam.

B. The state water and power plan may also include such further water and power projects, either in addition to or in substitution of the projects set forth above, or any portion thereof, as the Arizona legislature may from time to time authorize. However, in no event may such further power projects include thermal generating plants or interests therein, except that the authority may enter into an agreement with other electric power interests proposing to construct a thermal generating power plant whereby the state shall acquire the right to such portion of the capacity of such plant, including delivery of power and energy over appurtenant transmission facilities to mutually agreed on delivery points as is required to provide central Arizona project pumping. Power and energy acquired thereunder may be disposed of intermittently by the authority when not required in connection with the central Arizona project.

C. Except as otherwise provided in this subsection, nothing in this article shall authorize the inclusion in the state water and power plan of the power and energy under the Hoover energy contract 1-1r-1455 dated November 23, 1945 as it may be supplemented, amended, renewed or replaced and the rights to deliver such power and energy under the 1964 Wheeling contract 14-06-0300-1444 dated January 1, 1965 as it may be supplemented, amended, renewed or replaced which power and energy and Wheeling rights shall continue to be administered under title 30, chapter 1. Power and energy of the authority from the Hoover power plant modifications project and the Hoover power plant uprating project shall be sold by the authority pursuant to this article. The contracts for the sale of the power and energy of the authority from such projects shall be treated as contracts under this article. Notwithstanding title 30, chapter 1, the authority may pledge its contracts, rights and interests in or to power and energy from the Hoover power plant modifications project, the Hoover power plant uprating project, the 1945 Hoover energy contract or the 1964 Wheeling contract, or any supplements, amendments, renewals or replacements of such contracts, or any other contract or contracts for the purchase or transmission of power and energy from the United States or any United States agency as security for any bonds or notes of the authority issued under this article for the purpose of the Hoover power plant modifications project, the Hoover power plant uprating project, the Hoover visitor facilities or the air slots at Hoover dam.

§ 45-1704 Construction, acquisition and operation

A. The director of water resources may plan, construct, operate and maintain the central Arizona project, or any portion of the project, and any other water projects hereafter included in the state water and power plan, acquire all real property required therefor in the name of the state and take such actions and proceedings as may be necessary or desirable in connection therewith. The authority may plan, acquire, construct, operate and maintain any power project included in the state water and power plan, or any portion of any such project, and any other power projects hereafter included in the state water and power plan, acquire all real property required therefor in the name of the state and take such actions and proceedings as may be necessary or desirable in connection therewith. In carrying out their functions hereunder, the director and the authority shall consult with each other and with appropriate state officials and shall coordinate their activities so that the development of the state water and power plan shall proceed with all reasonable dispatch and efficiency.

B. Before either the director or the authority undertakes the financing or construction of any portion of the central Arizona project, the director or authority shall file with the president of the senate and the speaker of the house, at least thirty calendar days prior to the scheduled adjournment of the legislature's regular session or within five days following the convening of a special session called for that purpose, a feasibility report on such project. Such feasibility report shall set forth estimated costs, the financing steps contemplated, and the anticipated means and schedule of debt payment. Upon approval in whole or in part of such feasibility report by the legislature, the director or the authority shall thereupon be authorized to proceed in accordance with the approval granted by the legislature and the provisions of this article.

C. The state consents to the use and occupation of any real property now or hereafter owned by it, and not dedicated to public use, necessary for the construction, operation or maintenance of any project or projects included in the state water and power plan subject, however, to such payment as lawfully may be required.

§ 45-1705 Construction of works across public or private property

The director or authority may construct facilities or works pursuant to this article across any stream of water, watercourse, street, avenue, highway, railway, canal, ditch, flume or private property. If the director or authority and the persons, firms, corporations, municipalities, federal or state agencies, state trust lands or political subdivisions of the state owning or controlling any property or installation to be used or crossed cannot agree upon the amount to be paid for the taking, use or privilege thereof, such amount shall be ascertained and determined in the manner provided by law for the taking of land for public uses.

§ 45-1706 Right of eminent domain

A. Condemnation proceedings may be brought by the director or authority and all laws of the state relating to the exercise of the right of eminent domain and the taking of private property for public use and obtaining immediate possession thereof shall apply to the proceedings. The use of property which is condemned, taken or appropriated under the provisions of this article is declared to be a public use subject to regulation and control by the state in the manner provided by law.

B. When real property has been appropriated to public use by any person, firm or corporation, the taking of the property for the construction and operation of the state water and power plan by the director or authority shall be deemed a more necessary public use than the use of the property by such person, firm or corporation.

C. Notwithstanding any other provision of this article, the director or authority shall have no authority to condemn, take or destroy the whole or any part of property belonging to any district, public utility or municipality unless and until the director or authority has provided and substituted for the property to be taken, condemned or destroyed new property of like character and at least equal in usefulness with suitable adjustment for any increase or decrease in the costs of operating and maintaining thereof, or unless and until the taking, condemnation or destruction has been permitted by agreement executed between the director or authority and such district, public utility or municipality. Nothing contained herein shall grant the authority or director the authority to condemn, take or use the generating, transmission or distribution facilities or other real or personal property of any type whatsoever of a public utility except for the purpose of procuring rights-of-way across real property of the public utility.

D. In the event any property is to be acquired hereunder pursuant to a license granted by the United States department of energy, such property may be acquired through the exercise of the right of eminent domain as provided in section 21 of the federal power act, as amended.

§ 45-1707 Issuance of bonds and notes

A. The authority:

Shall have the power and is authorized from time to time to issue its negotiable bonds and notes in such principal amount as, in the opinion of the authority, shall be necessary to provide sufficient monies for the construction, reconstruction and improvement of the projects included in the state water and power plan or any portion thereof, or for payments required with respect to any such project, together with suitable facilities and appurtenances, the cost of acquisition of all real property, the expense of maintenance and operation, interest on bonds and notes during construction and for a reasonable period thereafter, establishment of reserves to secure bonds or notes, and all other expenditures of the authority incident to and necessary or convenient to carry out the aforesaid purpose. Notwithstanding any other provision herein, the director shall determine whether bonds or notes shall be offered for public or private sale for the central Arizona project or any part thereof, or any future water projects, the time of the offering, the amount, and the terms and conditions thereof. When such determination has been made, the authority shall proceed to offer the bonds or notes, or cause the same to be offered for sale in accordance with the determination of the director. In the event the authority fails to do so, the director may proceed to issue the bonds or notes for the water features of the state water and power plan. In such event the director shall have all of the rights and powers invested in the authority under the terms of this article to issue such bonds or notes.
Shall have power from time to time to issue renewal notes, to issue bonds to pay notes, and whenever it deems refunding expedient, to refund any bonds by the issuance of new bonds, whether the bonds to be refunded have or have not matured, and may issue bonds partly to refund bonds then outstanding and partly for any other purpose. Whether or not the bonds or notes are of such form and character as to be negotiable instruments under the terms of the uniform commercial code, title 47, chapter 3, the bonds or notes shall be and are hereby made negotiable instruments within the meaning of and for all the purposes of the negotiable instrument law, subject only to the provisions of the bonds for registration.

B. The bonds and notes shall be authorized by resolution of the authority, shall bear such date or dates and mature at such time or times, in the case of notes and any renewals thereof within five years after their respective dates and in the case of bonds not exceeding sixty years from their respective dates, as such resolution or resolutions may provide. The bonds and notes shall bear interest at such rate or rates, be in such denominations, be in such form, either coupon or registered, carry such registration privileges, be executed in such manner, be payable in such medium of payment, at such place or places, and be subject to such terms of redemption as such resolution or resolutions may provide. The bonds and notes shall be sold at public or private sale at such price and on such terms as the authority may determine, provided that bonds or notes to fund or refund other bonds or notes may be exchanged with the holders of such bonds or notes being funded or refunded on such terms as the authority may determine.

C. Any resolution or resolutions or trust indenture or indentures authorizing or securing any bonds or notes or any issue thereof may contain provisions, which shall be a part of the contract with the holders thereof, as to:

Pledging all or any part of the fees, charges, gifts, grants, rents, revenues or other monies received or to be received by the authority or the director from or in connection with the ownership or operation of the projects included in the state water and power plan and leases or agreements to secure the payment of the bonds or notes or of any issue thereof, including any amounts deposited in the state water and power development fund, subject to such agreements with bondholders or noteholders as may then exist.
The rates of the fees, charges or rents to be established for the projects included in the state water and power plan, and the amounts to be raised in each year thereby and the use and disposition of the fees, charges, gifts, grants, rents, revenues or other monies received or to be received therefrom.
The setting aside of reserves or sinking funds, and the regulation and disposition thereof.
Notwithstanding the provisions of section 30-203, the custody, collection, securing, investment and payment of any monies held pursuant to any such resolution or trust indenture in trust or otherwise for the payment of bonds or notes or in any way to secure bonds or notes. Such monies and the deposits thereof may be secured in the same manner as monies of the authority, and all banks and trust companies are authorized to give such a security for such deposits.
Limitations on the purpose to which the proceeds of sale of any issue of bonds or notes then or thereafter to be issued may be applied and pledging such proceeds to secure the payment of the bonds or notes or of any issue thereof.
Limitations on the issuance of additional bonds or notes, the terms upon which additional bonds or notes may be issued and secured and the refunding of outstanding or other bonds or notes.
The procedure, if any, by which the terms of any contract with bondholders or noteholders may be amended or abrogated, the amount of bonds or notes the holders of which must consent thereto, and the manner in which such consent may be given.
Limitations on the amount of monies to be expended for operating, administrative or other expenses with respect to the projects included in the state water and power plan.
Vesting in a trustee or trustees such property, rights, powers and duties in trust as the authority may determine which may include any or all of the rights, powers and duties of the trustee appointed by the bondholders pursuant to this article, and limiting or abrogating the right of the bondholders to appoint a trustee under this article or limiting the rights, duties and powers of such trustee.
Any other matters, of like or different character, which in any way affect the security or protection of the bonds or notes.

D. It is the intention in the enactment of this article:

That any pledge made pursuant to this article of all or any part of the fees, charges, gifts, grants, rents, revenues or other monies received or to be received by the authority or the director from or in connection with the ownership or operation of the projects included in the state water and power plan shall be valid and binding from the time when the pledge is made.
That the monies so pledged and thereafter received by the authority or the director shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and that the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the authority or the director irrespective of whether such parties have notice thereof. Neither the resolution nor trust indenture nor any other instrument by which a pledge is created need be recorded.

E. Neither the members of the authority nor any person executing the bonds or notes shall be liable personally on the bonds or notes or be subject to any personal liability or accountability by reason of the issuance thereof. In case any one or more of the officers who shall have signed manually or by facsimile or sealed any of the bonds or notes shall cease to be such officer before the bonds or notes so signed and sealed shall have been delivered, such bonds or notes may, nevertheless, be issued as if the persons who signed or sealed such bonds or notes had not ceased to hold such offices. Any bonds or notes may be signed and sealed on behalf of the authority by such persons as at the actual time of the execution of such bonds or notes shall be duly authorized or hold the proper office in the authority, although at the date of such bonds or notes such persons may not have been so authorized or held such office.

F. The authority shall have power out of any funds available therefor to purchase bonds or notes, which shall thereupon be cancelled, at a price not exceeding either of the following:

If the bonds or notes are then redeemable, the redemption price then applicable plus accrued interest to the next interest payment date thereon.
If the bonds or notes are not then redeemable, the redemption price applicable on the first date after such purchase upon which the bonds or notes become subject to redemption plus accrued interest to such date.

§ 45-1708 Contracts

A. The director may enter into and carry out contracts with water users for the delivery of Colorado river water through the facilities of the central Arizona project and for the sale and delivery of water from other sources included in the central Arizona project or other water projects, if any, hereafter included in the state water and power plan. The director shall provide in all contracts executed for the delivery of water from the central Arizona project that such contracts shall be subordinate to the satisfaction of all existing contracts between the United States secretary of the interior and users in Arizona heretofore made pursuant to the Boulder canyon project act. It may be required as a condition in any contract under which water is provided from the central Arizona project that the contractor agree to accept main stream water of the Colorado river in exchange for or in replacement of existing supplies from sources other than the main stream. Water which has been developed, stored or appropriated shall be sold only at wholesale rates which will not be unreasonably discriminatory for the same.

B. The authority may enter into and carry out contracts for the sale and transmission of power from power projects included in the state water and power plan. Notwithstanding the provisions of title 30, chapter 1, articles 2, 3 and 4, the power from such power projects included in the state water and power plan shall be sold at wholesale only to such power purchasers, located within or without the state, in such manner and upon such terms and conditions, as shall be determined by the authority to be necessary or advisable to effectuate the purposes of this article, except that power and energy of the authority from the Hoover power plant modifications project and Hoover power plant uprating project shall be sold to power purchasers within this state. Any public utility providing electrical service and any district organized to provide electrical service may enter into such contracts with the authority for the sale and transmission of power and energy by which such public utility or district is obligated to make payments in amounts which shall be sufficient to enable the authority to meet all its costs allocable thereto, including interest and principal payments, whether at maturity or upon sinking fund or other mandatory redemption, for its bonds or notes, reasonable reserves for debt service, operation and maintenance expenses and amounts to pay for renewals, replacements and improvements and to meet the requirements of any rate covenant with respect to debt service coverage and any other amounts required for reserves or other purposes, all as shall be provided in the resolution, trust indenture or other security instrument of the authority; except that nontax-exempt public utilities shall be granted an option to purchase the maximum amount of said capacity permitted by federal regulations governing the issuance of tax-free bonds. Such contracts may contain such other terms and conditions as the authority and such public utility or district may determine, including provisions by which the public utility or district is obligated to pay for power irrespective of whether energy is produced or delivered to it or whether any project contemplated by any such agreement is completed, operable or operating, and notwithstanding suspension, interruption, interference, reduction or curtailment of the output of such project.

C. The surplus revenues derived by the director from the central Arizona project and any other water project and by the authority from any power project shall be paid into the state water and power development fund in the amounts and in the manner and at the times specified in an agreement which shall be entered into by the authority and the director prior to the issuance of any bonds or notes. For this purpose, surplus revenues shall mean the revenues of any such project remaining after payment therefrom of operating and maintenance expenses of such project, debt service with respect to bonds and notes issued for such project, payments for renewals and replacements of such project and improvements thereof, any payments required under any license from the United States department of energy with respect to such project and any other charges or liens with respect to such project payable out of such revenues, including in each case reserves therefor, all to the extent required to be paid or provided for under the terms of any resolution or resolutions or trust indenture or indentures authorizing or securing bonds or notes issued for such project or any license from the United States department of energy with respect to such project. Such agreement may also provide for reasonable limitations on the amounts of the necessary operation and maintenance expense for the projects included in the state water and power plan, and it may contain such other terms, conditions and provisions consistent with the provisions of this article as may be necessary or desirable to effectuate the state water and power plan. It is recognized that such agreement will provide additional security for the bonds and notes of the authority and that the same may be pledged by the authority for such purpose.

D. The director or authority may enter into any obligation or contract with the United States necessary or required in carrying out or accomplishing any of the purposes or power authorized or permitted by this article and may conform to such requirements, rules or regulations not otherwise inconsistent with the laws of this state as may be prescribed by the United States in accordance with the acts of Congress applicable thereto now in effect or which may hereafter be adopted and the rules and regulations promulgated thereunder. Contracts or agreements entered into with the United States may contain such terms, conditions, covenants and restrictions for the security of the United States or any subsequent holders of bonds issued to evidence such loans, grants or advances of money. The director or authority may do any and all acts and things considered necessary or advisable by the United States and the director or authority in connection with or additionally to secure any such loans, grants or advances of money or issuance or sale of bonds provided for in the contract or agreement with the United States.

§ 45-1709 General powers

The director and the authority, respectively, may:

Cooperate with the appropriate agencies or officials of the federal government and of the state and political subdivisions of the state to the end that the purposes of this article shall be realized.
Apply to the appropriate agencies or officials of the state and of the federal government, including the United States departments of energy and of the interior, for such licenses, permits, easements and such other approvals or authorizations as may be necessary or advisable and accept the same upon such terms and conditions as may be deemed appropriate.
Accept any gifts or any grant or advance of funds or property from the federal government or from the state or any other federal or state public body or political subdivision or any other person and comply with the terms and conditions thereof.
Fix and establish the prices, rates, rents and charges for water and power delivered or produced by the projects authorized by this article.
Retain and employ engineering, accounting, legal, financial and other private consultants on a contract basis for rendering professional and technical assistance and advice.
Promote, foster and encourage the use, development, protection and conservation of water and power.
Institute and maintain actions and proceedings necessary to enforce, maintain, protect or preserve all rights, privileges or immunities created or granted by this article or otherwise in pursuance thereof, and in all courts, actions and proceedings the director or authority may sue, appear and defend in person in their respective names.
Enter into contracts and agreements and do all things which are necessary or convenient for the effectuation of the state water and power plan.
Exercise all the powers necessary or convenient to carry out and effectuate the purposes and provisions of this article, and as incidental thereto, own, lease, construct, operate, maintain and dispose of real and personal property of every kind and character, acquire real and personal property and any or every interest therein for its lawful purposes by purchase, lease, condemnation or otherwise, and generally do anything and everything necessary or convenient to carry out the purposes of this article. The authority may not at any time pledge the credit of the state nor shall any of its obligations or securities be deemed to be obligations of the state.
Be specifically charged with the responsibility to begin immediate studies and continue them in an effort to determine alternate ways and means to finance and fund the construction of the central Arizona project and bring those studies to the legislature so that this water project may be constructed at the earliest possible time.

§ 45-1710 Powers of municipalities, districts and other public bodies and officers

Notwithstanding any provision of law but subject to the exceptions prescribed by this section, all municipalities, districts and other public bodies are authorized and empowered to enter into contracts with the director or the authority as provided in section 45-1708 for the sale or delivery of water or the sale or transmission of power, on such terms and conditions as shall be determined by the parties, and to carry out their obligations under the contracts, except that groundwater replenishment districts established under title 48, chapter 27 are not eligible to contract for the sale or transmission of power under this chapter. Eligible municipalities, districts and other public bodies, their officials and all state agencies and officials may do such acts and make such additional agreements not inconsistent with law as may be necessary or desirable in connection with the construction, operation, maintenance and financing of any project or projects included in the state water and power plan.

§ 45-1711 State water and power development fund

The state water and power development fund is established. The resolution or trust indenture of the authority securing the bonds or notes shall fix the amount and the provisions of the application of a bond reserve to be held by the state treasurer in such development fund. The surplus revenues as determined pursuant to section 45-1708 from each project included in the state water and power plan shall be deposited, pursuant to sections 35-146 and 35-147, in the fund in accordance with the agreement between the director and the authority referred to in section 45-1708, together with any other funds which may be made available for the purposes of this article, including funds from the state or federal government. Amounts in such development fund in excess of the bond reserve therein shall be paid by the state treasurer in such manner and at such times as shall be specified in the bond resolution or trust indenture securing such bonds or notes to the trustee appointed by the authority thereunder. The bond reserve in such development fund shall be applied by the state treasurer as provided in such resolution or trust indenture.

§ 45-1712 Agreement of state

The state of Arizona does pledge to and agree with the holders of the bonds and notes that the state will not limit or alter the rights hereby vested in the director and the authority to maintain, reconstruct and operate the projects included in the state water and power plan, and to establish and collect such charges, fees and rentals as may be convenient or necessary to produce sufficient revenue to meet the expense of maintenance and operation and to fulfill the terms of any agreements made with the holders of the bonds and notes, or in any way impair the rights and remedies of the bondholders or noteholders, until the bonds and notes, together with interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceedings by or on behalf of the bondholders and noteholders, are fully met and discharged. The authority as agent for the state is hereby authorized to include this pledge and undertaking by the state in its resolutions and indentures securing the bonds and notes.

§ 45-1713 Exemption from taxation

The director and the authority shall be regarded as performing a governmental function in undertaking and carrying out the state water and power plan and shall be required to pay no taxes or assessments on any of the property thereof or upon their activities in the operation and maintenance thereof or upon the revenues therefrom. The bonds and notes, their transfer and the income therefrom shall at all times be free from taxation within the state.

§ 45-1714 Remedies of bondholders and noteholders

A. In the event the authority defaults in the payment of principal of or interest on any issue of bonds or notes after the same shall become due, whether at maturity or upon call for redemption, and such default shall continue for a period of thirty days, or in the event the authority shall fail or refuse to comply with the provisions of this article, or shall default in any agreement made with the holders of any issue of bonds or notes, the holders of twenty-five per cent in aggregate principal amount of the bonds or notes of such issue then outstanding, by instrument or instruments filed in the office of the clerk of Maricopa county and proved or acknowledged in the same manner as a deed to be recorded, may appoint a trustee to represent the holders of such bonds or notes for the purposes provided in this article.

B. Such trustee may, and upon written request of the holders of twenty-five per cent in principal amount of such bonds or notes then outstanding shall, in his or its own name:

By mandamus or other suit, action or proceeding at law or in equity enforce all rights of the bondholders or noteholders, including the right to require the authority to collect fees, rentals and charges adequate to carry out any agreements with the holders of such bonds or notes and to perform its duties under this title.
Bring suit upon such bonds or notes.
By action or suit in equity, require the authority to account as if it were the trustee of an express trust for the holders of such bonds or notes.
By action or suit in equity, enjoin any acts or things which may be unlawful or in violation of the rights of the holders of such bonds or notes.
Declare all such bonds or notes due and payable, and if all defaults shall be made good then with the consent of the holders of twenty-five per cent of the principal amount of such bonds or notes then outstanding, to annul such declaration and its consequences.

C. Such trustee, whether or not the issue of bonds or notes represented by such trustee has been declared due and payable, shall be entitled as of right to the appointment of a receiver of any project or projects included in the state water and power plan or any part of the plan, the fees, rentals, charges or other revenues of which are pledged for the security of the bonds or notes of such issue and such receiver may enter and take possession of such project or projects and, subject to any pledge or agreement with bondholders, shall take possession of all monies and other property derived from or applicable to the construction, operation, maintenance and reconstruction of such project or projects, and proceed with any construction thereon which the director or the authority is under obligation to do and shall operate, maintain and reconstruct such project or projects, and collect and receive all fees, rentals, charges and other revenues thereafter arising therefrom subject to any pledge thereof or agreement with bondholders or noteholders relating thereto and perform the public duties and carry out the agreements and obligations of the director and the authority under the direction of the court. In any suit, action or proceeding by the trustee the fees, counsel fees and expenses of the trustee and of the receiver, if any, shall constitute taxable disbursements and all costs and disbursements allowed by the court shall be a first charge on any fees, rentals and other revenues derived from such project or projects.

D. Such trustee shall in addition to the foregoing have and possess all of the powers necessary or appropriate for the exercise of any functions specifically set forth herein or incident to the general representation of bondholders or noteholders in the enforcement and protection of their rights.

E. The superior court shall have jurisdiction of any suit, action or proceeding by the trustee on behalf of such bondholders or noteholders. The venue of any such suit, action or proceeding shall be laid in Maricopa county.

§ 45-1715 Certification of bonds by attorney general

The authority may submit to the attorney general of the state of Arizona any bonds to be issued under this article after all proceedings for the authorization of such bonds have been taken. Upon the submission of such proceedings to the attorney general, it shall be the duty of the attorney general to examine into and pass upon the validity of such bonds and the regularity of all proceedings in connection therewith. If such proceedings conform to the provisions of this article, and such bonds when delivered and paid for will constitute binding and legal obligations of the authority enforceable according to the terms thereof, the attorney general shall certify in substance upon the back of each of such bonds that it is issued in accordance with the constitution and laws of the state of Arizona.

§ 45-1716 State not liable on bonds and notes

Neither the state nor any political subdivision thereof shall be liable on the bonds or notes of the authority and such bonds and notes shall not constitute a debt or liability of the state or of any such political subdivision.

§ 45-1717 Bonds and notes legal investments

The bonds and notes are hereby made securities in which all public officers and bodies of the state and all municipalities and political subdivisions, all insurance companies and associations and other persons carrying on an insurance business, all banks, bankers, trust companies, savings banks and savings associations, including savings and loan associations, building and loan associations, investment companies and other persons carrying on a banking business, all administrators, guardians, executors, trustees and other fiduciaries and all other persons whatsoever who are now or may hereafter be authorized to invest in bonds or other obligations of the state, may properly and legally invest funds including capital in their control or belonging to them. The bonds and notes are also hereby made securities which may be deposited with and may be received by all public officers and bodies of the state and all municipalities and political subdivisions for any purpose for which the deposit of bonds or other obligations of the state is now or may hereafter be authorized.

§ 45-1718 Water rights

Nothing contained in this article shall be construed as affecting or be intended to affect or to in any way interfere with the laws of the state or the United States relating to the control, appropriation, use or distribution of water used in Arizona, or to any contract or vested right acquired therefor, and the powers and duties herein set forth shall be limited and restricted to only that quantity of water which may be available for use in the state of Arizona, after the satisfaction of all existing contracts between the secretary of the interior and users in the state of Arizona for the delivery of water of the main stream of the Colorado river, and shall not extend to any such contracts, any amendments or supplements thereto, or to any federal statute enacted before the effective date of this article pertaining to any federal reclamation project within the state of Arizona constructed and using water of the main stream of the Colorado river before the effective date of this article.

§ 45-1719 Reversion of projects to state

When all bonds and notes issued under the provisions of this article to finance the state water and power plan and the interest thereon shall have been paid or a sufficient amount for the payment of all such bonds and notes and the interest thereon to the maturity thereof shall have been set aside in trust for the benefit of the holders of such bonds and notes, all projects then included in the state water and power plan shall thereafter be operated and maintained by the director and the authority, and water and power rates shall be reduced accordingly unless the legislature shall provide that the revenues therefrom shall be deposited in the general fund of the state, in the state water and power development fund or as the legislature may otherwise direct.

§ 45-1720 No jurisdiction of Arizona corporation commission

The rates, services and practices relating to the generation, transmission, distribution and sale of power or to the distribution and sale of water pursuant to this chapter shall not be subject to regulation by or the jurisdiction of the Arizona corporation commission or any successor agency or department.

§ 45-1721 Joint ownership of power projects

Notwithstanding anything to the contrary in this chapter or in title 30, chapter 1, the Arizona power authority may participate in the Montezuma pumped storage power project, the Hoover power plant modifications project or Hoover power plant uprating project as a joint owner with other publicly-owned or privately-owned utilities. In such event, the authority's undivided interest or share of such project shall be deemed to be the power project included in the state water and power plan for the purposes of this chapter, provided that the authority may contract with other joint owners or the United States or any United States agency to act as agent for the acquisition, construction and operation of the entire project and for this purpose the authority shall have all powers with respect thereto necessary to carry out its obligations under such contract, including, without limitation, the powers set forth in section 45-1706.

§ 45-1722 Exclusive law

The powers conferred by this article shall be in addition to and supplemental to the powers conferred by any other law, general or special. This article shall, without reference to title 30, chapter 1 or chapter 1 or 2 of this title, or to any other law, general or special, be deemed full authority for the construction, acquisition, reconstruction, improvement, operation and maintenance of the projects herein provided for and contracts in connection therewith, and for the authorization, issuance and sale of the bonds and notes pursuant to this chapter and without regard to the procedure required by any other such law. Except as otherwise provided in this article, the provisions of title 30, chapter 1 and chapter 1 or 2 of this title, insofar as they relate to the matters herein contained, are superseded, it being the legislative intent that this article shall constitute the exclusive law on such matters.

Chapter 11 County Water Augmentation Authority

Article 1 Formation and Dissolution

§ 45-1901 Definitions

In this chapter, unless the context otherwise requires:

"Active management area" means an active management area established under chapter 2 of this title.
"Authority" means a county water augmentation authority established under this chapter.
"Board" means the board of directors of the authority.
"County" means the county containing over fifty per cent of the area of the authority.
"Operating unit" means a county, city, town, water company or political subdivision, this state, the United States, an Indian tribe or any other public or private entity with which an authority has a contractual relationship for the acquisition, delivery, exchange, treatment, storage or recharge of water.
"Project" means a facility necessary or convenient to obtain, divert, withdraw, transport, exchange, deliver, treat or recharge water, including rights-of-way, real and personal property, interests in property and improvements to property that are necessary or appropriate to maintain and operate the facilities.
"Water company" means either a private water company as defined in section 45-402 or an irrigation district that primarily serves municipal water.

§ 45-1902 Formation

A. An authority may be established in any active management area in which all of the following conditions exist on the date the authority is organized:

Over fifty per cent of the area of the active management area lies within a single county.
The population of the county is less than one hundred fifty thousand persons according to the most recent United States decennial census.
A political subdivision of this state within the active management area directly receives Colorado river water pursuant to contracts with a multi-county water conservation district and the United States secretary of the interior through facilities of the central Arizona project.

B. The boundaries of the authority shall be coterminous with the boundaries of the active management area.

C. An authority shall be established in the following manner:

A person who desires to propose establishment of an authority shall prepare and submit a petition to the board of supervisors of the county in which the authority is to be established. The petition shall contain, at least:

(a) The name of the proposed authority.

(b) Certified copies of adopted resolutions approving the authority's formation by the governing bodies of a majority of the incorporated cities and towns located entirely within the boundaries of the proposed authority on January 1, 1993, and the irrigation districts located entirely or in part within the boundaries of the proposed authority on January 1, 1993.

On receipt of the petition, the board of supervisors shall set a day, at least sixty but not more than ninety days from that date, for a hearing on the petition.
The clerk of the board of supervisors shall publish in a newspaper or newspapers of general circulation in the area of the proposed authority, at least twenty days before the scheduled hearing, a notice setting forth the date, hour and place of the hearing and the purpose of the hearing. The clerk shall also notify the governing body of each city, town, irrigation district and water company located within the boundaries of the proposed authority of the date, hour and place of the hearing and the purpose of the hearing.
At the hearing, the board of supervisors shall hear those who appear for and against the proposed authority and shall determine whether the petition conforms to the requirements of this section. At the hearing all interested persons residing within the boundaries of the proposed authority may appear and may be heard on any matter relating to the establishment of the proposed authority. Before the date set for the hearing, any person wishing to support or oppose the establishment of the authority may file a statement of support or opposition with the clerk of the board of supervisors.
At or before the time for a hearing, any city, town or irrigation district may file a statement requesting to be excluded from the authority, together with a description of any portion of its territory to be excluded from the authority.
If the board of supervisors determines that the petition conforms to the requirements of this section and that the public convenience and welfare will be served by the establishment of the authority, it shall order the establishment of the authority. The order shall exclude from the authority those cities, towns and irrigation districts that filed statements to exclude pursuant to paragraph 5 of this subsection and shall specify the territory to be excluded. The powers and duties of the authority that are conferred in this chapter do not extend to or otherwise include the entities and territories that are excluded.
Any entity excluded pursuant to paragraphs 5 and 6 of this subsection may petition the board of supervisors to be included in the authority. The board of supervisors shall comply with paragraphs 2, 3, 4 and 6 of this subsection to determine whether to include the entity and its territory within the authority. An order of inclusion extends the powers and duties of the authority over the entity and territory that are included and entitles the entity to representation on the board of the authority as prescribed by section 45-1921.

§ 45-1903 Contest of formation; appeal

Any aggrieved person or entity may contest the formation of an authority under this chapter by filing an action in superior court in the county in which the authority is established within thirty days after the board assumes office under section 45-1921. If more than one such contest is pending, they shall be consolidated for trial. The court shall try the contest without delay and shall determine whether the authority was properly organized and whether the board was properly appointed in substantial compliance with this article and shall enter judgment accordingly. If an action is not filed within thirty days under this section, the formation of the authority is presumed to be lawful and conclusive against all persons.

§ 45-1904 Corporate existence

An authority is a corporate and political body that may act in its official corporate name and has all of the rights and immunities of municipal corporations that are granted by the constitution and statutes of this state, including immunity of its property and bonds from taxation.

§ 45-1905 Dissolution of authority

A majority of the board may propose that the authority be dissolved, but only if all contractual obligations and debts of the authority are satisfied and another governmental entity or entities accept dedication of all authority projects. After a hearing, the board shall adopt by resolution a plan of termination to be executed within a stated period of time after it is adopted. All property of the authority that is not dedicated to another governmental entity shall be transferred to the board of supervisors of the county in which the authority is established for use in that county. All unexpended and unencumbered monies of the authority shall be transmitted to the state treasurer for deposit in the fund account established for the active management area pursuant to section 45-615.

Article 2 Administration

§ 45-1921 Board of directors; qualification and organization; compensation

A. The board shall consist of the following members, except that it shall not include any entity excluded from the authority pursuant to section 45-1902:

One member appointed by the board of supervisors of the county in which the authority is established.
One member appointed by the governing body of each city or town located entirely within the boundaries of the proposed authority on January 1, 1993.
One member appointed by the governing body of each irrigation and drainage district that is organized pursuant to title 48 and that is partially or totally located within the authority's boundaries.
One member appointed by the county board of supervisors, subject to subsection C of this section, to represent those water companies that deliver Colorado river water to persons who reside within the authority's boundaries.
One member appointed by the county board of supervisors, subject to subsection C of this section, to represent those water companies that deliver water, other than Colorado river water, to persons who reside within the authority's boundaries.
Any members appointed pursuant to subsection B of this section.

B. The governing body of any city or town established after January 1, 1993, any special taxing district organized pursuant to title 48 or any federally recognized Indian tribe that is located within the authority's boundaries, that is an operating unit and that does not appoint a member to the board pursuant to subsection A of this section may appoint a member to the board on petition to the board and approval by a majority of the board.

C. Members of the board who are appointed pursuant to subsection A, paragraphs 4 and 5 of this section serve terms of two years and shall be succeeded by a person representing a qualifying water company other than the one represented by the departing board member, unless the county board of supervisors unanimously resolves otherwise.

D. Within thirty days after appointment each member of the board shall qualify for office by taking and subscribing the official oath. The official oath shall be filed with the board of directors.

E. Each member of the board shall serve at the pleasure of the governing body or official that selected him. A subsequent board member shall qualify within thirty days after receiving notice of his appointment in the same manner as prescribed by this section.

F. The board shall select a chairman, vice-chairman and secretary-treasurer from among the members who shall hold office at the pleasure of the board.

G. Board members are not eligible to receive compensation but are eligible for reimbursement of actual and necessary expenses while engaged in official business under order of the board.

§ 45-1922 Meetings; notice

A. The board shall hold regular meetings every calendar quarter and additional meetings on the call of the chairman or a majority of the members of the board. The secretary-treasurer shall give at least three days' notice of each meeting to each member of the board in addition to the public notices required by law.

B. The authority is a public body for purposes of title 38, chapter 3, article 3.1.

§ 45-1923 Administrative powers and duties; executive director; annual report

A. The board shall determine its organizational and procedural structure, adopt, amend or repeal bylaws, rules and forms consistent with the requirements of this chapter and prescribe a system of accounts.

B. The board may:

Manage, set policy and conduct the business and affairs of the authority.
Make and execute all necessary contracts, including intergovernmental agreements pursuant to title 11, chapter 7, article 3.
Sue and be sued.
Adopt a seal for the authority to be used to attest to documents.
Provide for payment of all debts and appropriate claims against the authority from the appropriate funds.
Employ an executive director and such administrative, legal, engineering, accounting, clerical and other staff as may be necessary and prescribe the duties, terms and conditions of employment.
Retain outside professional services, including legal counsel.
Acquire suitable offices, furnishings and necessary equipment and supplies.
Perform all other acts necessary to carry out the purposes of this chapter.

C. The board shall prepare and publish an annual report on or before December 1 of each year containing a full and complete account of its transactions and proceedings for the preceding fiscal year and other facts and recommendations deemed to be of public value. This annual report may include and may be combined with the financial report prescribed by section 45-1977. The authority shall make copies of the annual report available to the public on request.

D. All employees shall be selected on a nonpartisan basis according to their qualifications. The executive director shall serve at the pleasure of the board.

Article 3 Powers and Duties

§ 45-1941 Cooperation with governmental entities

A. The authority shall cooperate, coordinate and confer with the director of water resources, state agencies, special districts, authorities and other political subdivisions of this state and the United States with respect to matters within their jurisdiction relating to augmenting the water supplies of the county in which the authority is established and developing state water plans.

B. In acquiring, constructing and operating projects, the authority, consistent with the purposes and policies of this chapter, shall cooperate with established and existing organizations for use of or interconnection with suitable diversion, withdrawal, transportation, delivery, treatment, storage or recharge facilities.

C. Any operating unit, or combination of operating units, may request the authority to exercise its powers and privileges in making any project or proposed project survey or investigation, or for assistance in initiating or completing any works or projects authorized by this chapter.

D. The authority may act as:

A bargaining and negotiating agency on the request of an operating unit in transactions and dealings between the various departments of the federal government.
A connecting, intermediate or contracting medium for operating units if, for united or joint participation, such a medium is convenient or essential to the receipt, acceptance or enjoyment by the operating units of any financial proposals, grants or other benefits made available under any statute or by any entity.
A coordinating, clearing, administering or supervising instrumentality by and through which operating units may cooperate or unite through or by contracts or agreements in applying or pooling their resources, functional rights or privileges for common purposes contemplated under this chapter.
An entity competent to contract with the United States for the delivery of water, and to subcontract with its operating units pursuant to such terms as the United States and the board deem advisable, and to assign or assume such contracts subject to the terms or limitations the United States and the board deem advisable.

E. Operating units may enter into contracts, agreements and arrangements, including intergovernmental agreements under title 11, chapter 7, article 3, that may be necessary to accomplish the purposes of this section.

F. This section shall not be construed to alter any debt limitation of the operating units.

§ 45-1942 Limitation on powers

This chapter shall not be construed to modify, alter or change the functions, powers, duties, rights and liabilities prescribed under chapters 1, 2 and 3 of this title. This chapter does not authorize the authority to:

Engage in the retail distribution of water within the service area of a city, town, water company or irrigation district without the written authorization of the city, town, water company or irrigation district.
Regulate the acquisition, use or disposal of water or rights to water except as specifically provided by this chapter or pursuant to contractual agreements that are consistent with this chapter.
Sell, resell, deliver or distribute electricity or other forms of energy to others.
Acquire in its own name surface water contracted to an operating unit or entity represented on the board pursuant to section 45-1921 by a federal agency without that operating unit's or entity's consent.
Transport groundwater except as otherwise provided by law.
Acquire electrical power and energy that is sold, offered for sale or otherwise disposed of pursuant to title 30, chapter 1 or chapter 10 of this title.

§ 45-1943 Functional powers of board

The board, for and in the name of the authority, may:

Acquire in any lawful manner, except as limited by this chapter, and sell, lease, exchange or otherwise dispose of real and personal property, easements and rights-of-way that are necessary or required for the uses and purposes of the authority.
Construct, maintain and operate all works and other property acquired and used for any of the projects owned by the authority.
Acquire, hold, assign or otherwise dispose of credits registered to storage accounts under any provision of chapter 3 of this title.
Accept appointment or other authorization and act as agent of any operating unit for purposes of acquiring, transporting, delivering, treating or recharging water pursuant to this chapter.
Issue bonds and pledge all or part of its revenue from any source for security and payment of its bonds.
Negotiate, make, execute, acknowledge and perform any contract, agreement or obligation it deems advisable for the interest of the authority or to carry out or accomplish the purposes of this chapter, including agreements to acquire water supplies, for water exchanges and for water deliveries.
Except as otherwise limited by this chapter, acquire electricity or other forms of energy necessary to transport water or otherwise operate the projects of the authority.
Plan, coordinate, construct, operate, maintain and dismantle water augmentation projects including treatment, recharge, underground storage and recovery and retention projects and, in conjunction with county flood control districts, flood control projects for water augmentation purposes.
Provide technical or financial assistance to operating units relating to developing water supplies for purposes of the management goals and plans adopted under chapter 2 of this title.
Conduct any other activities that are reasonably necessary and related to the powers and duties described by this chapter.

§ 45-1944 Planning

In conjunction and cooperation with local governmental entities and the director of water resources, the authority shall:

Within one year of the authority's formation, develop an initial water resource augmentation plan for the county in which the authority is established to guide the development of water augmentation efforts in that county.
Coordinate water conservation efforts to encourage pooling the resources of all operating units in the county in which the authority is established to maximize conservation of the existing water sources in that county.

§ 45-1945 Acquisition of water

A. The authority may:

Negotiate to acquire in its own name, or on behalf of an operating unit located within the authority's boundaries, water and rights to water that may be legally available to augment the water supply of the county in which the authority is established.
Sell or exchange any water it acquires in its own name to or with any operating unit within the authority's boundaries under such terms as are necessary to ensure the use of the water in a manner consistent with the water augmentation plan developed under section 45-1944.
Sell, lease, exchange, hold, sever, transfer or retire water rights.
Negotiate and enter into agreements to use existing facilities to transport water to and within the county in which the authority is established.
Enter into agreements with operating units by which the authority receives water rights or rights to receive water in exchange for a contractual obligation to develop or provide water for that operating unit.
Apply for and hold, in its own name or on behalf of an operating unit or units, permits that are required by law to engage in any of the activities described in this chapter.

B. The authority shall not by contract obligate or bind itself to take delivery of any water until it develops a means to store or dispose of the water.

C. In acquiring, selling, leasing, exchanging, holding, severing, transferring or retiring any water or rights to water, the authority and its operating units shall comply with any applicable federal or state law, regulation, rule, order, permit or other requirement applicable to the water or rights to water.

§ 45-1946 Acquisition of property; limited eminent domain authority; survey and inspection rights

A. The legal title to all property and property rights acquired under this chapter vests in the authority and shall be held for the uses and purposes prescribed by this chapter.

B. The board may:

Acquire, hold, manage, occupy and possess property as provided by this chapter.
Take conveyances for all property acquired by the authority in the name of the authority.
Sell, lease, exchange or otherwise dispose of any property of the authority that is no longer necessary or suitable for the uses and purposes of the authority and execute, acknowledge and deliver all such conveyances, leases, contracts or other instruments as the board deems necessary.
Institute and maintain actions and proceedings necessary to enforce, maintain, protect or preserve all rights, privileges and immunities created or granted by this chapter relating to acquiring, owning and disposing of property.

C. The board, by unanimous resolution, may institute condemnation proceedings in the name of the authority, and all statutes of this state relating to the exercise of eminent domain apply to the proceedings, except that the board may not exercise the right of eminent domain:

Outside of the county in which the authority is established.
To condemn land or existing projects or facilities owned by any governmental entity or person for the purpose of condemning water rights or existing water production, delivery or storage systems.
To acquire electrical facilities, whether real or personal property.
Within the service area, as defined in section 45-402, of any city or irrigation district without the consent of that city's or irrigation district's governing body.

D. Agents, employees and representatives of the board or an operating unit may enter any land on reasonable notice to the owner or occupant to survey or locate necessary works, rights-of-way or structures for the purposes of the authority or to obtain factual data or access to records required to be kept by virtue of contracts or agreements that the authority or the operating units may have in effect with the United States secretary of the interior.

§ 45-1947 Construction work and purchases by bid only; exceptions; award of contract; bond

A. The construction of projects or facilities undertaken by the authority shall be by contract and not by force account. The authority may enter into contracts for construction work exceeding twenty-five thousand dollars only after notice published for at least ten days, except in cases of emergency to prevent imminent loss or danger. All such contracts shall be let by public bid to the lowest responsible bidder. The authority may call for sealed bids and may accept or reject any bid. Bids shall be accompanied by a reasonable bid bond in an amount the authority demands. This subsection does not apply to any contracts entered into with a state or federal agency, a political subdivision or an Indian tribe.

B. All purchases and contracts made by the authority for material or services other than personal services shall be made after advertising in such manner and at such times sufficiently in advance of opening bids as the authority deems adequate to ensure appropriate notices and an opportunity for competition. Advertisement is not required, but the purchase or procurement may be made in the open market, in any of the following cases:

An emergency requiring immediate delivery of the material or performance of the services.
Repair parts, accessories or supplemental equipment or services that are required for material or services previously furnished or contracted for.
If the aggregate amount involved in the purchase of material or procurement of services does not exceed twenty-five thousand dollars.

C. In comparing bids and in making awards the authority shall give due consideration to such factors as:

The relative quality and adaptability of materials or services.
The bidder's financial responsibility, skill, experience, record of integrity in dealing and ability to furnish repair and maintenance services.
The time of delivery or performance offered.
Whether the bidder has complied with the specifications.

D. Subsection B does not apply to any contracts entered into with a state or federal agency, a political subdivision or an Indian tribe.

E. The authority shall protect its interests by providing for and securing such bond or bonds as are required under title 34, chapter 2, article 2.

Article 4 Financial Provisions

§ 45-1971 Administrative and operation budgets

A. On or before July 1 of each year the authority shall adopt an administrative budget for the succeeding fiscal year. The budget shall consist of a complete statement of administrative expenditures from the general fund during the past fiscal year and an estimate of the different amounts that may be deemed necessary to meet administrative requirements of the authority for the next fiscal year, fixing the amounts proposed for all recurring items of expense and an amount for contingencies or emergencies. No administrative expenditures may be made in excess of the total amount of the budget. Economies resulting in remaining balances for any fiscal year shall be available for subsequent administrative or operating purposes.

B. The authority shall also prepare an operation budget for each fiscal year covering operations and including capital items. The budget shall consist of a full and complete statement of all incoming receipts and expenditures for the past fiscal year and an estimate of anticipated income and expenditures for the next fiscal year. The budget shall also give a complete asset and liability statement and statement of profit and loss, together with an itemized statement of cash on hand, commitments, reserves and obligations anticipated for the next fiscal year, together with such other information as will give a full and complete disclosure of the current financial condition of the authority.

C. The authority shall transmit copies of the budget to each operating unit and the director of water resources.

§ 45-1972 Groundwater augmentation and conservation assistance fee; transfer to authority

A. Within sixty days after the authority is formed, the department shall transfer to the secretary-treasurer of the authority one-half of all unencumbered monies and the accrued interest on those monies that were collected in the active management area in which the authority is located during the prior year pursuant to section 45-611, subsection C, paragraph 2.

B. Each year the director shall transfer an amount of not more than two hundred thousand dollars to the secretary-treasurer of the authority from the monies collected in that year in the active management area in which the authority is located pursuant to section 45-611, subsection C, paragraphs 2 and 3. The director shall specify the amount from each funding source to be transferred.

C. The secretary-treasurer shall deposit the transferred monies in the general fund of the authority, and the authority may spend the monies to carry out the purposes of this chapter.

§ 45-1973 Water supply fees

The authority may assess fees, including extraction fees, development impact fees, connection fees, user fees, replenishment fees and administrative fees, against any operating unit or other person with which the authority has a contractual responsibility to provide any service. The amount of the fee and the method of payment shall be determined pursuant to the agreement between the authority and the operating unit or person, based on the cost of the service the authority provides, including the cost of developing an equivalent water supply for an operating unit that has exchanged with the authority a water right or right to receive water for a water supply contract with the authority. Any fee assessed under this section is not a rate or charge of the operating unit and is not subject to regulation by the Arizona corporation commission. The secretary-treasurer of the authority shall deposit all monies received under this section in the general fund of the authority.

§ 45-1974 Accounting classifications; bond funds; general fund

A. The secretary-treasurer of the authority shall establish appropriate accounting classifications and designations in the authority accounting records to provide for accurate and systematic control and allotment of all monies received.

B. The secretary-treasurer shall maintain a bond fund and a general fund of the authority and shall apportion all monies received into the fund corresponding with the purpose for which the monies were received. The secretary-treasurer may invest inactive monies from either the general fund or the bond fund and shall credit income earned on the investments to the respective fund.

§ 45-1975 Receipt of monies; disbursements; operation of accounting system

A. Monies due to the authority under agreements for the sale of water or other services, proceeds of revenue bond issues or any other obligation may be made payable at the office of the authority. All monies derived from operations of the authority and received by any officer, agent or employee of the authority shall be promptly remitted to the secretary-treasurer.

B. All operation monies of the authority shall be paid out only according to the regularly adopted operation budget of the authority on warrants in discharge of claims and obligations approved by the board, signed by the chairman of the board and countersigned by the executive director or other duly authorized officer of the authority.

C. The appropriate claim vouchers shall be regularly entered in the accounting system of the authority and preserved for auditing purposes.

§ 45-1976 Payment of interest coupons; investment of bond fund monies

The secretary-treasurer of the authority shall:

Pay matured interest coupons from bonds of the authority from the bond fund.
Invest monies in the bond fund, under direction of the board, in bonds of the United States or this state that shall be kept in the bond fund and that may be used to redeem bonds of the authority, on the request of the holders, either by exchanging them for bonds of the authority or by converting them into cash.

§ 45-1977 Annual financial statement and audit

A. On or before December 1 of each year the board shall make a verified statement of the financial condition of the authority as of June 30 of the preceding fiscal year, showing particularly the receipts and disbursements during the fiscal year and the source of the receipts and the purpose of the disbursements. The statement may be included in and combined with the annual report prescribed by section 45-1923, subsection C.

B. Within thirty days after the close of each fiscal year the authority shall cause an audit to be made of the funds of the authority by a certified public accountant. The board shall file a copy of the audit with the auditor general. The auditor general may make such further audits and examinations as he deems necessary and may take appropriate action relating to the audit pursuant to title 41, chapter 7, article 10.1. If the auditor general takes no official action within thirty days after the audit is filed, the audit is deemed sufficient. The board shall pay any fees and costs of the certified public accountant and auditor general under this section from the general fund of the authority.

Article 5 Revenue Bonds

§ 45-1991 Authority to issue bonds

If the authority finds other financing methods or procedures inadvisable, inadequate or insufficient to acquire or construct projects, works or facilities, it may independently or in conjunction with any other optional or alternative plans provided in this chapter issue revenue bonds as provided by this article.

§ 45-1992 Prerequisites to issuance

No revenue bonds may be issued until provision is made by contracts pursuant to this chapter adequate in the judgment of the board to ensure all necessary fiscal reserves, operation costs, maintenance and depreciation charges and payment of principal and interest of any bonds relating to any proposed project or facility involved and within the time fixed. Revenue bonds shall not be issued except on resolution by the authority.

§ 45-1993 Scope of resolution

A. Resolutions for a bond issue or issues shall state the amount of the proposed issue or issues, the proposed interest rate and types and terms of bonds, that all other methods of necessary financing by the authority have been found impractical, inadvisable or inadequate and that the issuance of the bonds is necessary and advisable as proposed.

B. The authority chairman and secretary-treasurer shall sign the resolutions. In support of the resolution the authority shall enter into its record pertinent engineering, economic and financial data, appropriate maps, drawings, plans, outlines, calculations, summaries and related agreements and any other essential information constituting a record appropriate to the resolution.

C. The resolution may approve a bond issue to finance an entire plan or system or any single or joint project, section or other facility of a related system or plan proposed for ultimate integration and completion.

§ 45-1994 Hearing; findings

A. The chairman of the board, at the earliest practical date, shall fix a time and place for a hearing at least twenty but not more than thirty days after adopting the resolution. The authority shall publish notice of the time and place fixed for the hearing twice in a newspaper of general circulation in the county in which the authority is established.

B. All pertinent records and documents shall be filed at least ten days before the date set for the hearing. Prehearings respecting any particular document, feature or incidental matter or any separable part or portion of any resolution may be held by the board on ten days' previous written notice if the board deems that holding a prehearing is conducive to expediting a final hearing, and a decision as to the issues presented may thereupon be rendered.

C. At the time and place fixed for the hearing, the board shall examine and determine the matters and questions involved. Hearings may be recessed, adjourned or continued as the board orders.

D. Any person who holds an original agreement or proposal made with the authority relating to or concerning the handling, sale, control or disposition of a proposed issue of bonds or who has previously made an offer or bid in good faith to purchase the bonds pursuant to a published invitation for bids by the authority, and any operating unit holding contracts with the authority at least ten days before the date fixed for the hearing, may qualify to be heard.

E. If the board finds that all precedent requirements and conditions have been fulfilled, it shall approve the bond issue in whole or in part or shall otherwise disapprove the bond issue as a whole or as to such features or proposals as do not meet the essential requirements. When the board has made and entered its findings, it shall enter a decision accordingly.

F. The decision of the board based on findings of fact that are supported by a preponderance of the evidence and that are not arbitrary or unreasonable is final and conclusive.

§ 45-1995 Issuance of bonds

Bonds issued under this article shall be authorized by resolution of the authority and may be issued in one or more series, shall bear such date or dates, mature at such time or times, bear interest at such rate or rates, be in such denomination or denominations and in such form, either coupon or registered, carry such conversion or registration privileges, have such rank or priority, be executed in such manner and be payable in such medium of payment, at such place or places, and subject to such terms of redemption, with or without premium, as the resolution may provide. Bonds may be sold at public or private sale at not less than par with accrued interest. Notwithstanding any provisions of law to the contrary, bonds issued pursuant to this article are negotiable.

§ 45-1996 Provisions of bonds; sale

A. The bonds shall provide that:

The bond is purchased and taken after a complete disclosure and with a full knowledge of all of the surrounding relevant facts and circumstances and not on the representation, faith or credit of the authority, this state or any of its political subdivisions.
The holder in order to obtain payment may not compel this state or any of its political subdivisions to exercise its appropriation or taxing power.
The bond does not constitute a debt of this state, any political subdivision of this state or any operating unit and is payable only from revenues of the authority.

B. The gross or net revenue derived from any project or any part of a project may be pledged to secure the payment of any series of bonds.

C. The authority may provide for reimbursement to the holder of all expenses of litigation and attorney fees incurred in collecting the bonds in the event of default and may provide for and fix the powers and duties of a trustee if necessary to enforce collection. Bond resolutions, agreements and bonds may be in such form and may contain such other conditions and terms as the authority deems appropriate or necessary to make the bonds fully salable and marketable.

D. The authority may provide that any holder of bonds, or a trustee designated by the authority at the time of issuing the bonds, on proper showing may secure an order of the superior court requiring the authority, subject to the contracts with operating units then in effect, to fix and collect rates and charges that will produce adequate revenues to permit setting up adequate yearly reserves with which to meet future payments according to the terms of the bond.

E. All bonds issued by the authority and agreements of the authority with respect to bonds are subject to this chapter, and no bond or agreement may contain any provision in conflict with this chapter. An amendment of this chapter does not diminish or impair the remedy and rights of the bondholder.

F. The bonds shall be signed by the chairman or vice-chairman and the secretary-treasurer of the authority in office at the date of signing and are valid obligations of the authority although before delivery or sale the persons whose signatures appear on the bonds may have ceased to be officers of the authority.

G. The validity of the bonds is not dependent on or affected by the legality of any proceeding relating to the acquisition, construction, improvement or extension of a project for which the bonds are issued. The bonds shall recite that they are regularly issued pursuant to this chapter and that recital is prima facie evidence of their legality and validity.

H. Bonds so issued may be sold when the money is needed for the purposes for which they are issued. Pending the preparation or execution of definite bonds, interim receipts or certificates or temporary bonds may be delivered to the purchaser or purchasers of bonds.

§ 45-1997 Certification of bonds by attorney general

The board may submit any bonds issued under this article to the attorney general after all proceedings for their authorization have been completed. On submission the attorney general shall examine and pass on the validity of the bonds and the regularity of the proceedings. If the proceedings comply with this article, and if he determines that, when delivered and paid for, the bonds will constitute binding and legal obligations of the board, the attorney general shall certify on the back of each bond, in substance, that it is issued according to the constitution and laws of this state.

§ 45-1998 Validity of bonds

This chapter constitutes full authority for authorizing and issuing bonds without reference to any other law of this state. No other law with regard to the authorization or issuance of obligations or that in any way impedes or restricts the carrying out of the acts authorized by this article may be construed to apply to any proceedings taken or acts done pursuant to this article.

§ 45-1999 Water augmentation authority bonds as legal investments

County water augmentation authority bonds issued under this article are securities in which public officers and bodies of this state and of municipalities and political subdivisions of this state, all companies, associations and other persons carrying on an insurance business, all financial institutions, investment companies and other persons carrying on a banking business, all fiduciaries and all other persons who are authorized to invest in governmental obligations may properly and legally invest. The bonds are also securities that may be deposited with public officers or bodies of this state and municipalities and political subdivisions of this state for purposes that require the deposit of governmental bonds or obligations.

Chapter 12 Arizona Water Protection Fund

Article 1 General Provisions

§ 45-2101 Declaration of policy

A. It is the declared policy of the legislature to provide for a coordinated effort for the restoration and conservation of the water resources of this state. This policy is designed to allow the people of this state to prosper while protecting and restoring this state's rivers and streams and associated riparian habitats, including fish and wildlife resources that are dependent on these important habitats. In support of this policy, financial resources shall be made available by this state to the appropriate public and private entities to assist in water resource management activities that protect this state's rivers and streams and associated riparian habitats.

B. The primary purpose of this chapter is to establish the Arizona water protection fund commission and the Arizona water protection fund that shall provide an annual source of monies for the development and implementation of measures to protect water of sufficient quality and quantity to maintain, enhance and restore rivers and streams and associated riparian habitats, including fish and wildlife resources that are dependent on these important habitats consistent with existing water law and water rights, and measures to increase water availability. The commission may also provide funding to develop and protect riparian habitats in conjunction with a man-made water resource project, if the man-made water resource water project directly or indirectly benefits a river or stream and includes or creates a riparian habitat. This funding shall occur primarily through the grant of monies from the Arizona water protection fund by the commission to entities that cooperate and work in conjunction with local residents and affected jurisdictions.

C. This declaration of policy and the use of the words "restore", "restoring" and "restoration" in this chapter does not imply an intent to prescribe the removal of dams, levees or other man-made structures.

D. This chapter does not limit or restrict the authority or opportunities of state or local governments or other political subdivisions to plan, develop or implement projects consistent with this chapter.

§ 45-2102 Definitions

In this chapter, unless the context otherwise specifies:

"Commission" means the Arizona water protection fund commission.
"Fund" means the Arizona water protection fund.

§ 45-2103 Arizona water protection fund commission

A. The Arizona water protection fund commission is established and consists of two ex officio members, two advisory members and nine appointed members who are residents of this state, who have demonstrated an interest in natural resources and who are appointed as follows:

One person who represents a multi-county water conservation district established pursuant to title 48, chapter 22 and named by that district's governing board.
One person who represents a state association of natural resource conservation districts and who is appointed by the governor.
Four persons who represent natural resource conservation districts established pursuant to title 41, chapter 58, and who represent geographically diverse areas of this state, two of whom shall be appointed by the president of the senate and two of whom are appointed by the speaker of the house of representatives.
One member of the public who has at least a bachelor's degree in hydrology, who represents a city that is served by the central Arizona project and who is appointed by the governor.
One person who is knowledgeable in natural resource conservation issues or in water resource issues related to riparian ecosystems, who represents an agricultural improvement district established pursuant to title 48, chapter 17 and who is appointed by the governor.
One person who represents an Indian tribe and who is appointed by the chairman of the inter tribal council of Arizona.
As nonvoting ex officio members, the director of the department of water resources and the state land commissioner.
As nonvoting advisory members, one member of the house of representatives who is appointed by the speaker of the house of representatives and one member of the senate who is appointed by the president of the senate. Advisory members may not be considered for purposes of establishing a quorum.

B. Members of the commission appointed pursuant to subsection A, paragraphs 1 through 6 of this section shall be appointed for staggered terms of three years. A member may serve more than one term and may continue to serve beyond the expiration of the term until a successor is appointed and assumes office.

C. On request, members who are not ex officio members of the commission are eligible to receive compensation pursuant to section 38-611, not to exceed $3,000 in any calendar year, and are eligible for reimbursement for expenses pursuant to title 38, chapter 4, article 2.

D. Members of the commission are immune from liability for any action necessary to carry out the purposes of this chapter.

§ 45-2104 Powers and duties; limitations

A. The powers and authority vested in and the duties imposed on the members of the commission shall be exercised by a quorum of members, which consists of a majority of members then in office, except that a lesser number may hold public meetings without taking legal action.

B. The commission shall:

Adopt rules necessary to perform its duties.
Administer the expenditure of monies in accordance with section 45-2113.
Coordinate its staffing needs with the director and the state land commissioner.
Make and execute all necessary contracts, including grants and intergovernmental agreements pursuant to title 11, chapter 7, article 3.
Adopt an official seal for the authentication of its records, decisions and resolutions.
Keep the minutes of its meetings and all records, reports and other information relating to its work and programs in permanent form, systematically indexed and filed.
Designate the person or persons who shall execute all documents and instruments on behalf of the commission.
Each year elect two members to act as a chair and a vice-chair for the commission.
Manifest and record its actions by motion, resolution, order or other appropriate means.
In addition to those meetings required by law to be open, hold open public meetings as the commission considers appropriate.
Prepare an annual report of its activities.

C. The commission may:

Sue and be sued.
Contract with any person for the expenditure of monies, including the granting of monies, consistent with section 45-2113.
Meet jointly with federal or state authorities to consider matters of mutual interest.
Secure from any federal or state agency or department information necessary to enable the commission to carry out its purposes.
Accept, use and dispose of appropriations, gifts or grants of money or other property or donations of services, from whatever source, only to carry out the purposes authorized in this chapter.
Perform all other acts necessary to carry out the purposes of this chapter.

D. Nothing in this chapter shall be construed to authorize the commission to purchase real property or to use this state's right of eminent domain to acquire water or water rights or long-term storage credits using monies derived from the Arizona water protection fund established by section 45-2111.

§ 45-2105 Application guidelines

Before any monies are granted pursuant to section 45-2113, and by July 1, 1995, and every three years thereafter, the commission shall develop in conjunction with the department guidelines for applicants for funding. Guidelines shall include the following:

Delineation of geographic areas in this state where protection and restoration will be emphasized.
Identification of issues of concern.
Types of measures needed to address issues of concern.
A requirement that the applicant include a description of the relationship between the proposed project and existing plans, reports and information that are relevant to the proposed project.

§ 45-2106 Public involvement

A. The commission is subject to title 38, chapter 3, article 3.1 and title 39, chapter 1.

B. The commission shall develop and may amend the guidelines for applicants required by section 45-2105 after reviewing the recommendations submitted by the natural resource conservation districts developed pursuant to section 41-6054, subsections D and E and the information gathered during the public involvement process.

C. The commission shall gather information from the following:

The director of the department of water resources, the state natural resource conservation board and the state land commissioner.
The federal and state fish, wildlife, recreation and natural resource agencies.
County and municipal entities.
The public.

D. The commission shall develop procedures to assure adequate public participation. At a minimum, public participation procedures shall prescribe public notice requirements, including the content and publication of the notice, provide an opportunity for public hearings and specify the procedures governing the hearings and require the public availability of relevant documents. Public hearings shall be held at places and times that afford a reasonable opportunity to persons to participate.

E. The commission shall make available for viewing copies of the recommendations and supporting documents submitted pursuant to this section and may charge a reasonable fee for copying.

§ 45-2107 Reporting

Beginning July 1, 1996, and on July 1 every year thereafter, the commission shall submit a detailed report to the governor, the president of the senate and the speaker of the house of representatives. The report shall describe the actions taken by the commission and the expenditures made from the fund during the previous fiscal year.

Article 2 Financial Provisions

§ 45-2111 Arizona water protection fund

A. The Arizona water protection fund is established. The commission shall administer the fund.

B. The commission may grant monies from the fund to reimburse or advance monies to persons pursuant to section 45-2113. Grants made pursuant to this article are exempt from title 41, chapter 23.

C. On notice from the commission, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the fund. Monies in the fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations.

§ 45-2112 Funding sources

A. The fund shall consist of monies collected pursuant to section 48-3715.05.

B. In addition to the amounts prescribed in subsection A of this section the fund may accept any gifts, grants or donations.

§ 45-2113 Fund grants; applications

A. The commission shall grant monies from the fund consistent with the application guidelines developed pursuant to section 45-2105. The commission shall establish a procedure by which monies may be granted annually which shall include a maximum of six months between the receipt of the proposal by the commission and the disbursement of monies. The commission shall give priority in funding to the following:

Projects for which matching monies or assets of comparable value, including in-kind contributions, will be provided by other sources.
Projects that provide for the continued maintenance of the portion of the river and stream and associated riparian habitat that are enhanced by the project.
Projects that include broad based local involvement.
Projects that directly benefit perennial or intermittent rivers or streams or that otherwise increase the supply of water.

B. The commission shall require as a condition of approval of any proposal all of the following provisions:

Allowing access for inspection and evaluation of the project.
Controlling the expenditure of and accounting for any monies granted by the commission
Requiring that those persons responsible for the project submit all pertinent information and research gained from the project to the commission.
Requiring that any person receiving a grant spend no more than five percent of the grant on costs of administration.

C. The commission shall provide for public involvement regarding the applications submitted to the commission which shall include notice to any person who requests notice of applications and which shall provide a reasonable opportunity for comment on the application which shall not be less than forty-five days.

D. On receipt of an application the commission shall notify cities, towns, counties, natural resource conservation districts, special districts and Indian communities affected by the proposal and shall provide a reasonable opportunity for comment on the application which shall not be less than forty-five days.

E. Any person, state agency or political subdivision of this state may submit a request for funding from the fund for purposes prescribed by this section. A federal agency is not eligible for funding from the fund. Requests for funding shall be made to the commission. Requests for funding submitted to the commission may be accompanied by expressions of support from affected cities, towns, counties, natural resource conservation districts, special districts or Indian communities.

F. As a condition of approval by the commission, the applicant shall commit to work jointly with the affected cities, towns, counties, natural resource conservation districts, special districts and Indian communities that have contacted the commission pursuant to subsection D of this section on all aspects of the proposal's implementation and monitoring, unless the jurisdiction chooses not to participate.

G. Monies in the fund may only be spent to finance programs located in this state.

H. Monies in the fund may be spent for any of the following:

Granting monies to entities for the acquisition of central Arizona project water or effluent that will protect or restore rivers or streams consistent with state water law. No entity may exercise the right of eminent domain to acquire water or water rights using monies derived from this fund.
Granting monies to assist in developing, promoting and implementing water conservation programs, directly related to the purposes of this chapter, outside of the active management areas.
Granting monies in support of research and data collection, compilation and analysis directly related to the purposes of this chapter except that no more than five percent of the monies deposited in the fund in any fiscal year may be spent for this purpose. Before the approval of any such project, the commission shall consult with the department of water resources and the state land department to determine whether any research of a similar nature has been or is in the process of being performed and is already available. The commission shall not approve a proposal if either department determines that sufficient data exists and notifies the commission in writing.
Granting monies for the development and implementation of capital projects or specific measures consistent with the purposes of this chapter.

I. Monies in the fund may not be spent for:

Any project that includes the planting of mesquite, tamarisk or other nonnative high water usage trees that consume water to a degree that is detrimental to water conservation efforts, but may be used for removal of mesquite, tamarisk or other nonnative high water usage trees that consume water to a degree that is detrimental to water conservation efforts.
Any remedial action purposes undertaken pursuant to the comprehensive environmental response, compensation, and liability act of 1980, as amended (P.L. 96-510; 94 Stat. 2767; 42 United States Code section 9601) or title 49, chapter 2, article 5.

§ 45-2114 Administration

A. The director shall provide administrative, technical and legal support to the commission to the extent funding is available as prescribed by subsection B of this section and from legislative appropriations. This support may include the hiring of a contract administrator, an attorney, office support and technical support staff, who shall be employees of the department of water resources.

B. Interest may be spent by the department of water resources and the state land department for the administration of this chapter. The department of water resources and the state land department shall apply for grants from the fund for any additional monies necessary for the administration of this chapter. Any interest in excess of administration costs may be spent for the purposes prescribed in section 45-2113.

C. In addition to the expenditures from the fund authorized by section 45-2113, the commission may use five per cent of the total monies deposited in the fund during the previous calendar year to grant to the department of water resources and the state land department additional monies for administration of this chapter.

Chapter 13 County Water Authority

Article 1 Formation and Dissolution

§ 45-2201 Definitions

In this chapter, unless the context otherwise requires:

"Agricultural use" means water used primarily in the commercial production of agricultural crops or livestock, including domestic uses incidental to those uses, and used on tracts of land operated in units of more than five acres.
"Authority" means a water authority established under this chapter.
"Board" means the board of directors of the authority.
"Central Arizona project" means the reclamation project and works authorized by section 301 (a) of the Colorado River basin project act and constructed by the United States pursuant to the provisions of the Colorado River basin project act and contract between the United States and central Arizona water conservation district for delivery of water and repayment of costs of the central Arizona project.
"Colorado River water" means water from the main stream of the Colorado River.
"Conservation" means the preservation and planned management of water resources to ensure the future availability of water resources.
"Effluent" means water that has been collected in a sanitary sewer for subsequent treatment in a facility that is regulated pursuant to title 49, chapter 2. Such water remains effluent until it acquires the characteristics of groundwater or surface water.
"Industrial use" means a nonagricultural use of water not supplied by a city, town or private water company, including animal industry use and expanded animal industry use as defined in section 45-402.
"Multi-county water conservation district" means a multi-county district that is established under title 48, chapter 22 and that has contracted with the United States for the repayment of the cost and for the delivery of the water supply in accordance with public law 90-537.
"Municipal use" means all nonagricultural uses of water supplied by a city, town, private water company or irrigation district.
"Municipal water provider" means a city, town, private water company or irrigation district that supplies water for nonagricultural use.
"Private water company" means any entity that distributes or sells groundwater, except a political subdivision or any entity that is established pursuant to title 48 and that is not regulated as a public service corporation by the corporation commission under a certificate of public convenience and necessity.
"Tentatively allocated" means water of the main stem of the Colorado River water that has been recommended by the director to the secretary of the interior for allocation, but for which a contract with the secretary for delivery has not been signed.
"United States" means the secretary of the interior, acting for the United States department of interior, or his duly authorized representative.

§ 45-2202 Formation

A. An authority may be formed in any county with a population of more than ninety thousand persons and less than one hundred twenty thousand persons according to the most recent United States decennial census or in a county that contains a portion of the Harquahala irrigation non-expansion area and that does not contain any portion of an active management area.

B. The members of the authority may include:

Municipal corporations in the county that:

(a) Had contracts with the United States for the delivery of Colorado River water as of January 1, 1993.

(b) Have adopted resolutions approving the formation of the authority as prescribed by subsection C, paragraph 1 of this section.

For an authority in a county that contains a portion of the Harquahala irrigation non-expansion area and that does not contain any portion of an active management area, eligible entities as prescribed in section 45-554, subsection D that:

(a) Own acres or have adopted plans to acquire acres that may be irrigated in the Harquahala irrigation non-expansion area pursuant to section 45-437, subsection B.

(b) Have adopted resolutions approving the formation of the authority as prescribed by subsection C, paragraph 1 of this section.

C. The authority shall be formed on the occurrence of the following events:

The adoption of resolutions approving the authority's formation by either of the following:

(a) A majority of the municipal corporations in the county that had contracts with the United States for the delivery of Colorado River water as of January 1, 1993.

(b) For an authority in a county that contains a portion of the Harquahala irrigation non-expansion area and that does not contain any portion of an active management area, two or more eligible entities as prescribed in section 45-554, subsection D. For the purposes of this subdivision, one of the eligible entities must be the board of supervisors of the county in which the authority is formed.

The transfer to the authority of the right to the delivery of eighteen thousand five hundred acre-feet per year of Colorado River water from a municipal corporation in the county where the authority is to be formed within seven hundred thirty days after the adoption of resolutions as prescribed by paragraph 1 of this subsection.

D. A municipal corporation and eligible entity as prescribed in section 45-554, subsection D shall jointly appoint a person to represent the municipal corporation on the authority.

E. On full compliance with subsection C of this section, the authority shall:

Notify the board of supervisors in the county in which the authority is formed of the authority's formation.
Publish a notice of the authority's formation once each week for two consecutive weeks in a newspaper of general circulation in the county in which the authority is formed.
Notify each applicable authority member that the events prescribed by subsection C of this section have occurred.

F. An authority member that in connection with the formation of the authority or after the formation of the authority transfers, or causes to be transferred, to the authority all or a portion of its contractual entitlement to the delivery of Colorado River water shall remain an authority member after the transfer.

G. By vote of the directors, the membership of the authority may be expanded to include municipal corporations in the county that obtains contracts for the delivery of Colorado River water from the United States after January 1, 1993 and that have adopted a resolution approving the inclusion.

§ 45-2203 Contest of formation; appeal

A. Any aggrieved person or entity may contest the formation of the authority under this chapter by filing an action in the superior court in the county in which the authority is formed. Any contest must be filed within thirty days after the second publication of notice of the authority's formation as provided in section 45-2202. If more than one contest is pending, they shall be consolidated for trial.

B. The superior court shall try all contests without delay and shall determine whether the formation of the authority and appointment of the board occurred in substantial compliance with this article.

C. The formation of the authority is lawful and conclusive against all persons if an action is not filed as provided in subsection A of this section. If an action is filed as provided in subsection A of this section and that action is unsuccessful, the formation of the authority is lawful and conclusive against all persons on the date that the judgment dismissing the action is no longer subject to judicial review.

D. The authority may exercise all of the powers provided by this chapter notwithstanding the pendency of any contest.

§ 45-2204 Corporate existence; exemption from regulation

A. The authority is a corporate and political body that may act in its official corporate name and shall have all of the rights and immunities of municipal corporations that are granted by the constitution and statutes of this state, including immunity of its property from taxation.

B. The authority is not a public service corporation subject to regulation by the Arizona corporation commission.

§ 45-2205 Dissolution of authority

A. The authority may be dissolved only by a unanimous vote of the directors who are appointed by authority members pursuant to section 45-2221, subsection B and only if all contractual obligations and debts of the authority are satisfied and another governmental entity or entities accept dedication of all authority projects.

B. After unanimously voting to dissolve the authority as provided in subsection A of this section, the directors who are appointed by authority members pursuant to section 45-2221, subsection B shall adopt by resolution a plan of termination to be executed within a stated period of time after it is adopted. The plan of termination is judicially enforceable and shall contain the following provisions:

Except as provided in paragraph 2 of this subsection, all rights to the delivery of water that were transferred to the authority in connection with the formation of the authority shall be returned to the municipal corporation that transferred these rights, subject to approval of the secretary of the interior in consultation with the director.
If, before the dissolution of the authority, an authority member has either paid to the authority all of its pro rata share of the amount prescribed by section 45-2281, subsection C, as prescribed in its subcontract with the authority or has entered into a contract to pay that amount to the entity entitled to the payment of that amount, the authority member retains the right to the delivery of Colorado river water for which the member's payment was made and the right to the delivery of Colorado river water shall not be returned as provided in paragraph 1 of this subsection.

C. All property of the authority that is not dedicated to another governmental entity shall be transferred to the department for use in the county in which the authority is formed. All monies of the authority deposited in the grant fund as of the date of dissolution of the authority shall be disbursed as provided in section 45-2281. All other unexpended and unencumbered monies of the authority shall be disbursed among authority members as provided in a resolution of the board.

§ 45-2206 Applicability

Section 45-2202, subsection C, paragraph 2 and section 45-2244 do not apply to an authority formed in a county that contains a portion of the Harquahala irrigation non-expansion area and that does not contain any portion of an active management area.

Article 2 Administration

§ 45-2221 Board of directors; organization; compensation

A. The authority shall have a board of directors. Each director who is appointed pursuant to this section shall have one vote.

B. The board consists of persons who are appointed by the resolutions of the municipal corporations and the county that are authority members and, if appointed, the person who is appointed pursuant to subsection C of this section. Each authority member shall appoint one director to the board. Each director who is appointed pursuant to this subsection shall serve at the pleasure of the authority member that appointed him. Each director who is appointed pursuant to this subsection may be removed from the board by resolution of the authority member that appointed him. An authority member that removes a director from the board shall appoint another director to the board.

C. The supervisors of the county in which the authority is formed may appoint a director to the board from among the members of the board of supervisors. A director who is appointed pursuant to this subsection shall serve a term of one year and shall be succeeded by another person who is a member of the board of supervisors according to the terms of this subsection. The term of the member who is appointed by the board of supervisors shall begin on January 1 of each year.

D. The board shall select a chairperson, vice-chairperson and secretary-treasurer from among its appointed directors. Officers shall serve at the pleasure of the directors. For an authority that is in a county that contains a portion of the Harquahala irrigation non-expansion area and that does not contain any portion of an active management area, the board shall select a chairperson and officers as needed from among the authority's appointed directors.

E. Board members are not eligible to receive compensation but are eligible for reimbursement of actual and necessary expenses while engaged in official business under order of the board.

F. The board members of the authority are public officers for purposes of title 38, chapter 3, article 8. The employees of the authority are employees for purposes of title 38, chapter 3, article 8.

§ 45-2222 Meetings; notice

A. The board shall hold regular meetings every calendar quarter and additional meetings on the call of the chairperson or a majority of the board members. The secretary-treasurer shall give at least three days' notice of each meeting to each board member in addition to the public notices required by law.

B. The authority is a public body for purposes of title 38, chapter 3, article 3.1.

C. A majority of the board shall constitute a quorum. Except as provided in section 45-2205, all actions taken by the board require a majority vote of the board, unless the bylaws require a larger number of votes.

§ 45-2223 Administrative powers and duties; executive director

A. The board shall:

Determine its organizational and procedural structure.
Adopt, amend or repeal bylaws, rules and forms consistent with the requirements of this chapter.
Prescribe a system of accounts.
Exercise the powers and duties of the authority as prescribed by this chapter.

B. The board may:

Manage, set policy and conduct the business and affairs of the authority.
Make and execute all necessary contracts, including intergovernmental agreements pursuant to title 11, chapter 7, article 3.
Assume, adopt and ratify contracts transferred to the authority by an authority member.
Sue and be sued.
Adopt a seal for the authority to be used to attest to documents.
Provide for payment of all debts and appropriate claims against the authority from the appropriate funds.
Employ an executive director and the administrative, legal, engineering, accounting, clerical and other staff as may be necessary and prescribe the duties, terms and conditions of employment.
Retain outside professional services including accounting, engineering, legal and other consulting services.
Acquire suitable offices, furnishings and necessary equipment and supplies.
Perform all other acts necessary to carry out the purposes of this chapter.

C. All actions taken by the authority under this chapter shall be in accordance with state and federal law and in compliance with the authority's contracts with the United States.

Article 3 Powers and Duties

§ 45-2241 Cooperation with governmental entities

A. The authority shall cooperate, coordinate and confer with the director of water resources, state agencies, municipal corporations, special districts, authorities, other political subdivisions of this state, private entities, Indian tribes and the United States on matters within their jurisdiction relating to the augmentation and conservation of the water supplies of the authority and its members.

B. Consistent with the purposes and policies of this chapter, the authority shall cooperate with established and existing organizations in acquiring, constructing and operating projects for use of or interconnection with suitable diversion, withdrawal, transportation, delivery, treatment, storage or recharge facilities.

C. Any authority member may request the authority to exercise its powers and privileges in making any project or proposed project, survey or investigation or for assistance in initiating or completing any works or projects authorized by this chapter.

D. The authority may act as any of the following:

A bargaining and negotiating agency in transactions and dealings between various departments of the state or federal government at the request of an authority member.
A connecting, intermediate or contracting medium for members if for united or joint participation such a medium is convenient or essential to the receipt, acceptance or enjoyment of any financial proposals, grants or other benefits to authority members that are made available under any statute or by any entity.
A coordinating, clearing, administering or supervising instrumentality through which members may cooperate or unite through contracts or agreements in applying or pooling their resources, functional rights or privileges for common purposes contemplated under this chapter.
A supervising instrumentality through which authority members may request the development of conservation plans for the use of Colorado River water or other water.

E. Nothing in this section or in this chapter alters any debt limitation of any authority member.

§ 45-2242 Functional powers of the board

A. The board, for and in the name of the authority, may:

Lawfully acquire, sell, lease, exchange, occupy, manage, possess or otherwise dispose of real and personal property, easements and rights-of-way that are necessary or required for the uses and purposes of the authority.
Construct, maintain and operate all works and other property acquired and used for any of the projects owned by the authority.
Acquire, earn, hold, assign or otherwise dispose of long-term storage credits to the extent allowed under any provision of chapter 3.1 of this title.
Accept appointment or other authorization and act as agent of any authority member to acquire, transport, deliver, treat or recharge water or to engage in any activities prescribed in paragraph 3 of this subsection.
Acquire electricity or other forms of energy necessary to transport water or operate authority projects.
Subject to the requirements of section 45-2281, make grants to its members from the grant fund established in section 45-2281 to fund water acquisition, water reuse or water conservation programs proposed by authority members.
Plan, coordinate, construct, operate, maintain and dismantle water augmentation projects including treatment, recharge, underground storage and recovery and retention projects and, in conjunction with county flood control districts, flood control projects for water augmentation purposes.
Obtain grants and provide technical and financial assistance to authority members relating to the development of water supplies and water conservation plans.
With the permission of any affected authority member, negotiate with the United States in conjunction with the department regarding the administration, implementation or interpretation of:

(a) Colorado river water contracts of the authority.

(b) Subcontracts of the authority.

(d) Diversion of Colorado river water in the county in which the authority is formed.

Conduct any other activities that are reasonably necessary and related to the powers and duties described by this chapter.

B. The board may:

Apply for and hold, in its own name or on behalf of an authority member, any permits required by law to engage in the activities described in this chapter.
Take conveyances for all property acquired by the authority in the authority's name.
Sell, lease, exchange or otherwise dispose of any of the authority's property that is no longer necessary or suitable for the uses and purposes of the authority and execute, acknowledge and deliver all such conveyances, leases, contracts or other instruments as the board deems necessary.
Institute and maintain actions and proceedings necessary to enforce, maintain, protect or preserve all contracts, subcontracts, rights, privileges and immunities created under or granted by this chapter.

§ 45-2243 Limitation on powers

This chapter does not authorize the authority to:

Exercise any right of eminent domain.
Levy any ad valorem or excise tax provided that:

(a) The fees and rates authorized by section 45-2244, subsection B and section 45-2245, subsection H shall not be considered to be a tax.

(b) The authority may collect and remit any excise tax required to be collected or remitted.

Engage in the distribution of water within the service area of a city, town, private water company or irrigation district without the written authorization of the city, town, private water company or irrigation district.
Regulate the acquisition, use or disposal of water or water rights except as specifically provided by this chapter or pursuant to contractual agreements authorized by this chapter.
Sell, resell, deliver or distribute electricity or other forms of energy to others.
Acquire in its own name Colorado river water with respect to which a contract is pending between the United States and a member or that is contracted to an authority member without the authority member's express consent.
Acquire or contract to acquire any Colorado river water that has been tentatively allocated by the United States to a municipality before January 1, 1994 without the consent of the governing body of the municipality.

§ 45-2244 Acquisition and disposition of initial quantity of water; applicability

A. The authority, acting through its board, shall apportion the rights to the delivery of the first eighteen thousand five hundred acre-feet per year of Colorado River water that it obtains as follows:

The right to the delivery of fifteen thousand acre-feet per year of Colorado River water shall be apportioned by subcontract and made available to authority members for municipal uses.
The right to the delivery of three thousand five hundred acre-feet per year of Colorado River water shall be apportioned by subcontract and made available for industrial uses.
Notwithstanding the apportionment to municipal and industrial uses as prescribed by paragraphs 1 and 2 of this subsection, Colorado River water may be made available by the authority for industrial, agricultural or miscellaneous uses as prescribed by subsection F of this section until that water is needed for municipal or industrial uses.

B. The authority, acting through its board, shall make available Colorado River water that is apportioned for municipal uses as prescribed by subsection A, paragraph 1 of this section to authority members through subcontracts between the authority and the authority member for the sale and delivery of Colorado River water. The term of these subcontracts may be coextensive with the term of the contract with the United States pursuant to which the authority obtains the Colorado River water or the duration of the subcontracts may be for a lesser term. The rate charged for the Colorado River water made available to the authority members for municipal uses may be fixed for all or part of the subcontract term but shall be established by subcontract to allow the authority member to provide the water to its customers at a reasonable cost as determined by the authority in the exercise of its discretion. Any subcontract may require the authority member to pay water supply fees or to assess and share the cost of water supply fees with the authority. Water supply fees include standby or holding charges, development impact fees, connection fees, extraction fees, user fees, administrative fees, other fees or charges that the subcontract requires and the member collects for new uses to be served with the water made available pursuant to subcontract or any other fees that the authority determines to be necessary or prudent to fund the acquisition of replacement supplies of water. Any such fees assessed or collected by the authority member shall be remitted to the authority and deposited in the funds of the authority as provided in this chapter.

C. The Colorado River water apportioned for municipal uses under subsection B of this section shall be served by the authority member within the service area established for the authority member in any water service contract between the authority member and the United States. The Colorado River water so apportioned may not be served to any single industrial user for manufacturing purposes, processing purposes or thermoelectric power generation, with a demand greater than two hundred fifty acre-feet per year until the end of the seventh year after the authority is formed.

D. If Colorado River water that is made available to authority members for municipal uses pursuant to subsection B of this section is not subcontracted for by authority members within one year after the authority's formation pursuant to section 45-2202, subsection C, the Colorado River water may be made available by subcontract to other municipal water providers in the county in which the authority is formed on terms consistent with this section.

E. The authority shall make Colorado River water that is apportioned for industrial uses as provided in subsection A, paragraph 2 of this section available to applicants through subcontracts for the sale and delivery of that water. The term of the subcontracts shall be set by the authority and may be coextensive with the term of the contract with the United States pursuant to which the authority obtains the Colorado River water. The rate charged for Colorado River water made available to applicants for industrial uses may be established by subcontract or by tariff set by the authority. The rate charged may vary or may be fixed for all or a part of the subcontract term. The initial rate charged per acre-foot shall not be less than the rate charged per acre-foot by a multi-county water conservation district, or its successors, for the capital and fixed operation and maintenance charges associated with an acre-foot of central Arizona project municipal and industrial water in the year in which the authority subcontracts for the sale and delivery of the water.

F. Notwithstanding the apportionment to municipal and industrial uses as provided in subsection A, paragraphs 1 and 2 of this section, the authority may subcontract for the delivery of Colorado River water for industrial, agricultural or miscellaneous uses for which subcontracts have not been executed as provided in subsections B and E of this section or for which subcontracts have been executed as provided in subsections B and E of this section if there is no current demand for the water by the subcontractors. A subcontract for the delivery of Colorado River water for an industrial, agricultural or miscellaneous use under this subsection shall not be for a term of more than five years. A subcontract under this subsection may serve an existing use of Colorado River water that was not supported by a contract for the delivery of Colorado River water on January 1, 1994, or a new use of Colorado River water initiated after January 1, 1994. A subcontract under this subsection shall be subject to the approval of subcontractors with subcontracts entered into pursuant to subsection B of this section. Any subcontract under this subsection shall impose the charge per acre-foot of Colorado River water delivered that the authority in its discretion determines to be adequate. Any subcontract under this subsection may be renewed or extended successively for the same or a shorter period of time. For the purposes of this subsection, "miscellaneous use" means a use of water for recreational or fish and wildlife purposes.

G. The authority may accept transfers of the Colorado River water entitlements of its members and may contract with the United States for the delivery to the authority of the initial eighteen thousand five hundred acre-feet a year of Colorado River water obtained by the authority. The authority may contract with the United States for the delivery of any additional amounts of water obtained by the authority from its members and may contract as provided in section 45-2245.

H. Any subcontract under this section shall require the Colorado River water delivered pursuant to the subcontract to be used in the county in which the authority is formed.

I. This section applies only to an authority that is not located in a county that contains a portion of the Harquahala irrigation non-expansion area and that does not contain any portion of an active management area.

§ 45-2245 Acquisition and disposition of water in excess of initial quantity

A. The authority may contract with the United States for the delivery of Colorado River water that the United States makes available to the authority.

B. The authority may apportion Colorado River water, groundwater from the Harquahala irrigation non-expansion area as otherwise authorized by the laws of this state, water credits or effluent that it obtains between municipal and industrial uses in the manner that the authority determines to be appropriate after considering the water needs of the county in which the authority is formed.

C. The authority may contract with a multi-county water conservation district or its successors or with subcontractors of a multi-county water conservation district or their successors for the delivery to the authority of Colorado River water available to the central Arizona project.

D. The authority may purchase, lease, sever, transfer or retire water rights to the Colorado River in this state.

E. The authority may lease Colorado River water apportioned to this state from Indian tribes that are entitled by decree to that water and whose reservations are located in the lower basin of the Colorado River system in this state.

F. The authority may store, recharge and recover any water or effluent available to the authority to the extent allowed under chapter 3.1 of this title and may enter into exchanges of water or of water credits within or outside the county in which the authority is formed to the extent allowed under chapter 4 of this title.

G. The authority may contract for:

The storage or recovery of effluent to the extent allowed under chapter 3.1 of this title and may contract for the delivery or purchase of effluent.
Eligible acres in or groundwater from the Harquahala irrigation non-expansion area.

H. Under terms specified by the authority and subject to subsection B of this section, the authority may enter into subcontracts with authority members and other water providers in the county where the authority is formed for the sale, exchange or other disposition of Colorado River water, groundwater from the Harquahala irrigation non-expansion area as otherwise authorized by the laws of this state, water credits or effluent acquired by the authority pursuant to this section. In connection with those subcontracts, the authority may charge or impose standby or holding charges, development impact fees, connection fees, extraction fees, user fees, administrative fees or any other fees or charges that the authority determines to be necessary to recover the authority's costs of making the water, water credits or effluent available under the subcontract. The authority may impose additional fees or charges as the authority determines to be necessary or prudent to fund the acquisition of replacement supplies of water for the authority.

I. Any subcontract under this section shall require Colorado River water delivered pursuant to the subcontract to be used in the county in which the authority is formed.

Article 4 Construction Contract

§ 45-2261 Construction work and purchases by bid only; exceptions; award of contract

A. The authority shall undertake the construction of projects or facilities by contract and not by force account. For construction contracts exceeding twenty-five thousand dollars, notice shall be published for at least two days in a newspaper of general circulation in the county in which the authority is formed, except in emergency cases to prevent imminent loss or danger. All contracts shall be let by public bid to the lowest responsible bidder. The authority may call for sealed bids and may accept or reject any bid. Bids shall be accompanied by a reasonable bid bond in an amount determined by the authority. The authority shall require that a bond or bonds as are required under title 34, chapter 2, article 2 shall be provided and secured for construction contracts exceeding two hundred thousand dollars.

B. All purchases and contracts made by the authority for material or services other than personal or professional services shall be made after advertising in a manner and time sufficiently in advance of opening bids as the authority deems adequate to ensure appropriate notices and an opportunity for competition. Advertisement is not required, and the purchase may be made in the open market in any of the following cases:

An emergency requiring immediate delivery of materials or performance of the services.
Repair parts, accessories or supplemental equipment or services that are required for material or services previously furnished or contracted for.
If the aggregate amount involved in the purchase of material or procurement of services does not exceed twenty-five thousand dollars.

C. In comparing bids and making awards the authority shall give due consideration to such factors as:

The relative quality and adaptability of materials or services.
The bidder's financial responsibility, skill, experience, record of integrity in dealing and ability to furnish repair and maintenance services.
The time of delivery or performance offered.
Whether the bidder has complied with the specifications.

D. Subsections A, B and C do not apply to any contracts entered into with a state or federal agency, a political subdivision or an Indian tribe.

E. The board may cause the review and approve or reject all specifications, plans and construction contracts before their finalization.

Article 5 Financial Provisions

§ 45-2281 Establishment of funds; allocation of authority revenues; member dues; applicability

A. On the authority's formation, a grant fund, a water acquisition fund and an operating fund are established. The authority's revenues shall be deposited in and disbursed from the funds as provided by this section. Revenues deposited in the grant fund may be used to make grants to authority members for water acquisition, water conservation and water reuse. Revenues deposited in the water acquisition fund may be used to acquire water pursuant to section 45-2245. Revenues deposited in the operating fund shall be used as provided in subsection E of this section.

B. Except as provided in subsection D of this section and for an authority that is formed in a county that contains a portion of the Harquahala irrigation non-expansion area and that does not contain any portion of an active management area, all revenues of the authority shall be deposited in the grant fund except the following:

Dues paid by authority members which shall be deposited in the operating fund.
Ten percent of all amounts paid by municipal subcontractors under subcontracts entered into as provided in section 45-2244, subsection B which may be deposited in the operating fund or the water acquisition fund as determined by the board.
Fifty percent of all amounts paid by subcontractors of the authority pursuant to subcontracts entered into as provided in section 45-2244, subsection E or F.
That portion of the monies earned by the authority under subcontracts entered into pursuant to section 45-2245, subsection H that is equal to the cost to the authority of obtaining the water transferred under those subcontracts and, after payment of $7,500,000 as adjusted pursuant to subsection C of this section, all of the monies earned from those subcontracts.

C. Except as provided in subsection B of this section, all of the authority's revenues shall be deposited in the grant fund until the full amount of the initial grant and any additional amounts required in a grant agreement between the authority and the member that receives the grant have been disbursed from the grant fund as provided in this subsection. The initial grant from the grant fund shall be made to the authority member that transferred, or caused to be transferred, to the authority the right to the delivery of eighteen thousand five hundred acre-feet per year of Colorado River water in connection with the authority's formation. The amount of the grant to that member shall equal $7,500,000 plus any additional monies that the authority and the member agree to in a grant agreement between the authority and the member, which amount shall be adjusted annually from the date of the authority's formation either for inflation or as may otherwise be provided in the subcontracts of the authority or in the grant agreement, until the amount of the initial grant required by this subsection and any additional amounts required by the grant agreement are paid in full. The initial grant may be disbursed in a lump sum or in partial payments in accordance with the request of the authority member that is entitled to receive the grant and as revenues become available to the authority and are deposited in the grant fund. The authority member that is entitled to receive the grant may request that disbursements be made whenever revenues have been deposited in the grant fund. Notwithstanding section 45-2282, the authority shall promptly disburse those revenues that are deposited in the fund on receipt of a request from that member.

D. After the disbursement of the full amount of the initial grant and any additional amounts required in a grant agreement of the authority from the grant fund as provided in subsection C of this section, the authority's revenues, except dues paid by authority members, may be deposited in the grant fund, water acquisition fund or operating fund as determined by the board.

E. The authority shall establish a schedule of dues that is sufficient, when aggregated with other monies available for the payment of administrative expenses, to pay the estimated administrative expenses of the authority. Dues shall be assessed and allocated equitably among authority members as determined by the board. All dues received by the authority shall be deposited in the operating fund. Expenditures may be made from the operating fund to pay:

The authority's administrative expenses.
The costs of the authority's formation including an equitable portion of the costs of the municipal corporation that transferred rights to the delivery of Colorado River water as provided in section 45-2202.
The costs associated with holding any entitlement to water acquired by the authority.
Subject to subsection C of this section, the costs incurred by the authority in the operation of any project undertaken by the authority pursuant to this chapter.
Amounts payable to the United States annually for the right to hold and use the eighteen thousand five hundred acre-feet per year of Colorado River water acquired by the authority pursuant to section 45-2202, subsection C which amounts may include any tax, fee or excise imposed on the sale or transfer of the water.

F. Any authority member that is in arrears in the payment of its dues for more than sixty days shall lose the right of its appointed director to vote on all authority matters until all of the dues that are in arrears are fully paid. An authority member whose dues are in arrears does not lose membership in the authority because of the arrearage.

G. All transportation fees paid to the authority pursuant to section 45-556 may be deposited in the grant fund, water acquisition fund or operating fund established by this section as determined by the board.

H. For an authority that is formed in a county with a population of less than ninety thousand persons, all revenues of the authority shall be deposited in the grant fund, water acquisition fund or operating fund established by this section as determined by the board.

§ 45-2282 Operating budget

A. On or before the third Monday of July of each year, the authority shall adopt a budget for the fiscal year that begins on July 1 of that year. The budget shall include:

A complete statement of the sources and amount of all revenues received by the authority during the year ending June 30 and the funds into which the revenues were deposited.
A complete statement of expenditures and disbursements identified by class that were made by the authority during the year ending June 30 and the funds from which the expenditures were made.
An estimate of all revenues to be received by the authority during the year beginning July 1 and a listing of the funds into which the estimated revenues will be deposited.
An itemized estimate of the amount of expenditures or disbursements that the authority may make from each fund during the year beginning July 1 that, subject to the provisions of this section, may include expenditures for contingencies and emergencies.

B. The authority shall not budget any expenditure or disbursement from a fund that exceeds the amount of revenues estimated to be received by the fund during the year beginning July 1 except that revenues deposited in the grant fund may be expended for the purposes specified in section 45-2281, subsection C. The authority shall not make any expenditure or disbursement from a fund during the year that exceeds the amount budgeted to be expended or disbursed from the fund during the year.

C. Subject to the requirements in section 45-2281, subsection C, the authority may allocate unexpended revenues among funds on or before June 30 and include the unexpended revenues of a fund in the budgeted amount of expenditures or disbursements to be made in the fiscal year that begins July 1.

D. The allocation of revenues into the funds and the budgeting, expenditure and disbursement of the funds is at all times subject to section 45-2281, subsection C.

E. On or before the third Monday of July of each year, in connection with the preparation of the budget required by subsection A of this section the authority shall prepare a comprehensive statement of the authority's assets and liabilities and sources and application of funds.

F. The board at any time may authorize the preparation of an audited financial statement of the authority according to generally accepted accounting principles applicable to public bodies.

G. The authority shall file copies of the budget and financial statements with each member of the authority within thirty days of their adoption by the authority.

§ 45-2283 Investment of revenues

The authority may invest revenues of the authority in securities and deposits with a maximum maturity of three years. All revenues shall be invested in eligible investments. Eligible investments include:

Certificates of deposit in eligible depositories as provided in title 35, chapter 2, article 2.1.
Interest-bearing savings accounts in banks and savings and loan institutions doing business in this state whose accounts are insured by federal deposit insurance for their industry.
Repurchase agreements with a maximum maturity of one hundred eighty days.
Bonds or other evidences of indebtedness of the United States or any of its agencies or instrumentalities if the obligations are guaranteed as to principal and interest by the United States or by any agency or instrumentality of the United States.
Bonds or other evidences of indebtedness of this state or any of its counties, incorporated cities or towns or school districts.
Deposits placed in accordance with the procedures prescribed in section 35-323.01.

Chapter 14 Arizona Water Banking Authority

Article 1 General Provisions

§ 45-2401 Declaration of policy and purpose

A. The legislature finds that this state is currently and temporarily underutilizing both the entitlement to Colorado river water confirmed to it by the United States supreme court in Arizona v. California, 373 U.S. 546 (1963), and the central Arizona project, which has the capacity to divert into this state a significant portion of this state's entitlement to Colorado river water. The legislature further finds that, due to the low priority on the Colorado river of the central Arizona project and other Arizona Colorado river water users, the susceptibility of this state to future shortages of water on the Colorado river is a threat to the general economy and welfare of this state and its citizens.

B. The legislature further finds that water users within the central Arizona project service area also rely on other surface water supplies, that these supplies are susceptible to future shortages of water and that these shortages are a threat to the general economy and welfare of this state and its citizens.

C. The legislature further finds that future water needs in the states of California and Nevada could exceed the entitlements of those states to Colorado river water. Those future water needs could thereby affect the general economy and welfare of this state and its citizens because of the close economic ties among Arizona, California and Nevada.

D. The legislature further finds that Arizona water users could more efficiently manage, distribute and use available water resources through the storage of water supplies and through stored water lending arrangements, but that not all of these Arizona water users have the opportunities or resources needed to store water or enter into stored water lending arrangements.

E. The legislature further finds that for the purposes of this chapter diverting Colorado river water for storage off of the Colorado river system is a consumptive use of that water.

F. The legislature further finds that water banking is complimentary and compatible with existing water management efforts. The Arizona water banking authority will compliment and assist the activities of the central Arizona water conservation district in its mission to provide a dependable and cost-effective water supply.

G. The legislature therefore finds that it is in the best interest of the general economy and welfare of this state and its citizens to:

Use the central Arizona project to store otherwise unused Arizona entitlement to Colorado river water within this state to meet future water needs within this state.
Provide the opportunity to the states of California and Nevada to store currently unused Colorado river water in Arizona to meet future needs in those states.
Provide the opportunity to facilitate the storage of water and stored water lending arrangements by entities in Arizona that may not have the opportunities or resources needed to store water.
Provide the opportunity to facilitate the settlement of Indian water rights claims by delivering and storing water.

H. The public policy and general purposes of this chapter are to:

Increase utilization of Arizona's Colorado river entitlement that was confirmed to Arizona by the United States supreme court in article ii(b)(1), (2) and (6) of the decree entered at Arizona v. California, 376 U.S. 340 (1964), and that would otherwise be unused in Arizona, by delivering that water into this state through the central Arizona project aqueducts.
Store water brought into this state through the central Arizona project to protect Arizona municipal and industrial water users against future water shortages on the Colorado river and disruptions of operation of the central Arizona project.
Store water brought into this state through the central Arizona project to fulfill the water management objectives of this state set forth in chapter 2 of this title.
Provide the opportunity for storing water brought into this state through the central Arizona project to be available to implement the settlement of water right claims by Indian communities within Arizona.
Provide the opportunity to authorized agencies in the states of California and Nevada to store otherwise unused Colorado river water in Arizona to assist those states in meeting future water needs.
Provide the opportunity to facilitate the storage of water and stored water lending arrangements by entities in Arizona that may not have the opportunities or resources needed to store water.

§ 45-2402 Definitions

Unless the context otherwise requires, the terms defined in sections 45-101, 45-402 and 45-802.01 have the same meaning in this chapter and for purposes of this chapter:

"Authority" means the Arizona water banking authority.
"Banking fund" means the Arizona water banking fund.
"Central Arizona water conservation district" or "CAWCD" means the multi-county water conservation district established under title 48, chapter 22.
"Commission" means the Arizona water banking authority commission.
"Decree" means the decree entered by the United States supreme court in Arizona v. California, 376 U.S. 340 (1964).
"Excess central Arizona project water" means central Arizona project water that in any year would otherwise not be used, resold or exchanged pursuant to long-term contracts and subcontracts for central Arizona project water.
"Indian firming" means measures taken to ensure that central Arizona project non-Indian agricultural priority water that is made available to Indian tribes pursuant to Public Law 108-451 may be delivered during water shortages in the same manner that water with a municipal and industrial priority in the central Arizona project system is delivered during water shortages.
"Water banking services" means services provided by the authority to persons and Indian communities in this state to facilitate for those persons and Indian communities storage of water and stored water lending arrangements. Water banking services include the direct delivery of water to Indian communities in this state in replacement of or supplemental to the accrual of long-term storage credits pursuant to article 5 of this chapter. Water banking services include only arrangements by which water will be made available for use in this state. Water banking services do not include interstate water banking undertaken by the authority pursuant to article 4 of this chapter. Water banking services may include:

(a) Storage of water.

(b) Obtaining water storage permits.

(d) Lending and obtaining repayment of long-term storage credits.

"Water banking services agreement" means an agreement entered into between the authority and a person or Indian community in this state under which the authority will provide water banking services to that person or Indian community.

Article 2 Arizona Water Banking Authority

§ 45-2421 Arizona water banking authority

A. The Arizona water banking authority is established. The purposes, powers and duties of the authority shall be executed by a commission to be known as the Arizona water banking authority commission.

B. The commission consists of the following members who are residents of this state:

The director of water resources who serves as chairperson of the commission.
The president of CAWCD or a representative designated by that president.
One person who is appointed by the governor pursuant to section 38-211 and who is knowledgeable in water resource management.
One person appointed by the governor pursuant to section 38-211 who represents an entity that holds a central Arizona project municipal and industrial subcontract.
One person appointed by the governor pursuant to section 38-211 who represents an entity located in a county adjacent to the mainstream of the Colorado river that holds a valid contract with the secretary of the interior executed before June 1, 1996, for diversion and beneficial consumptive use of Colorado river water in that county.

C. The commission members appointed by the governor shall serve a six year term of office. A member may serve more than one term and may continue to serve beyond the expiration of the term until a successor is appointed and assumes office. The term of office for the commission members appointed by the governor begins and ends on the third Monday in January. The commission members appointed pursuant to subsection B, paragraphs 3, 4 and 5 may be removed by the governor for cause.

D. The commission members appointed by the governor serve without compensation but are eligible for reimbursement for expenses from the banking fund pursuant to title 38, chapter 4, article 2.

E. In order to qualify for office members of the commission shall take and subscribe to an official oath to perform the duties of their office. The oath shall be filed with the director. The official oaths shall be in the form prescribed by law for official oaths of state officers.

F. The president of the senate, or a senator designated by the president, and the speaker of the house of representatives, or a representative designated by the speaker, shall each serve as nonvoting ex officio members of the commission.

G. Members of the commission are public officers and are subject to all provisions of law applicable to these officers.

H. Members of the commission are immune from liability for any action necessary to carry out the purposes of this chapter.

§ 45-2422 Organization of commission; powers and duties; exemption

A. The commission shall select a vice-chairperson and a secretary from among its membership who shall each hold office for terms of two years to begin and end on the third Monday in January.

B. The powers and authority vested in and the duties imposed on the authority shall be exercised by a minimum of three voting members of the commission voting in agreement.

C. The authority is not a public service corporation subject to regulation by the Arizona corporation commission.

§ 45-2423 Powers and duties of authority

A. The authority, acting through its commission, shall:

Administer the Arizona water banking fund in accordance with this chapter.
Coordinate its staffing needs with the director and CAWCD.
Coordinate the storage of water and distribution and extinguishment of long-term storage credits with the director in accordance with this chapter and the water management objectives set forth in chapter 2 of this title.
Coordinate with CAWCD for the purchase, delivery and storage of Colorado river water delivered through the central Arizona project in accordance with this chapter and confer with CAWCD regarding the purchase of long-term storage credits for which CAWCD will be the recovery agent.
Coordinate and confer with state agencies, municipal corporations, special districts, authorities, other political subdivisions, private entities, Indian communities and the United States on matters within their jurisdiction relating to the policy and purposes of this chapter.
Determine, on an annual basis, the quantity of Colorado river water, surface water other than Colorado river water and effluent to be stored by the authority and where that storage will occur.
Account for, hold and distribute or extinguish long-term storage credits in accordance with this chapter.
Comply with all aspects of chapter 3.1 of this title.
Perform the authority's replenishment responsibilities under chapter 15, article 3 of this title with monies appropriated from the state general fund by the legislature for that purpose and to the extent that monies appropriated by the legislature for that purpose are not available, with monies collected in the Pinal active management area pursuant to section 45-611, subsection C, paragraph 3.
Carry out the obligations of this state under section 105 of Public Law 108-451 as agent for this state, including the direct delivery of water to Indian communities in this state and the leasing of non-Indian agricultural priority and Indian priority central Arizona project water as prescribed by article 5 of this chapter.
Adopt an official seal for the authentication of its records, decisions and resolutions.
Keep the minutes of its meetings and all records, reports and other information relating to its work and programs in permanent form, systematically indexed and filed.

B. The authority, acting through its commission, may:

Apply for and hold water storage permits.
Accrue, purchase, exchange, assign, lend and hold long-term storage credits in accordance with this chapter, subject to the following:

(a) Except for the purchase of long-term storage credits from an Indian community pursuant to section 45-841.01, the authority may purchase long-term storage credits only after the authority has stored or scheduled for storage all available excess central Arizona project water or when central Arizona project water is otherwise unavailable or undeliverable.

(b) Long-term storage credits accrued or purchased by the authority must be distributed or extinguished in accordance with the rules of operation specified in section 45-2457 for the monies used by the authority to accrue or purchase the credits.

Exchange Colorado river water for any type of water in accordance with chapter 4 of this title.
Enter into water banking services agreements.
Charge fees for water banking services.
Apply for and hold any water quality permit required for water storage by the department of environmental quality under title 49, chapter 2, article 3 or by federal law.
Make and execute all contracts, including intergovernmental agreements pursuant to title 11, chapter 7, article 3, that shall be signed by the chairperson, or in the chairperson's absence the vice-chairperson, and attested by the secretary, necessary to:

(a) Obtain for storage Colorado river water delivered through the central Arizona project. Agreements by which the authority obtains Colorado river water are exempt from the requirements of title 41, chapter 23.

(b) Obtain effluent or surface water other than Colorado river water for storage but only after the authority has stored or scheduled for storage all available excess Central Arizona project water or when central Arizona project water is otherwise unavailable or undeliverable.

(d) Store water for purposes of this chapter at permitted storage facilities.

(e) Distribute long-term storage credits accrued or purchased by the authority to make water available to municipal and industrial users of Colorado river water in this state that are inside or outside of the CAWCD service area, in accordance with the provisions of this chapter.

(f) Store Colorado river water in Arizona on behalf of appropriately authorized agencies in California and Nevada.

(g) Cause a decrease in Arizona diversions from the Colorado river, ensuring that Arizona will use less than its full entitlement to Colorado river water in years in which California and Nevada agencies are contractually authorized to call on the water stored on their behalf by the authority.

(h) Distribute long-term storage credits earned by the authority on behalf of agencies in California and Nevada to Colorado river water users in Arizona to use in place of Colorado river water that would have otherwise been used by those Arizona users.

(i) Replenish water pursuant to chapter 15, article 3 of this title, including entering into an intergovernmental agreement with the Gila river Indian community pursuant to section 45-2624.

(j) Distribute long-term storage credits accrued or purchased by the authority to make water available to Indian communities in this state for Indian firming measures pursuant to article 5 of this chapter.

Sue and be sued.
Perform all other acts necessary for the authority to carry out its purposes, powers and duties in accordance with this chapter.
Submit a request for a general fund appropriation to the legislature each year. A request shall be accompanied by a budget detailing how the appropriation would be used and justifying the need for the appropriation.
Form temporary committees as deemed necessary by the authority to provide the authority with advice on issues identified by the authority. Advisory committees may consist of members of the public selected by the authority, members of the authority and authority staff.

§ 45-2424 Administration

A. The director shall provide administrative, technical and legal support to the authority to the extent requested by the authority. The director may hire staff, who shall be employees of the department of water resources, necessary to provide the level of support requested by the authority.

B. The director may employ a person in the capacity of Arizona water banking authority manager who shall be an employee of the department of water resources. The person employed in this capacity shall possess a high level of expertise and experience in Colorado river and water resource management in Arizona.

C. The director, on an annual basis, shall prepare and submit to the authority a budget showing the cost of providing the services requested by the authority for the following fiscal year. The authority may adjust its request for services, or when satisfied with the budget, may adopt it. The authority shall reimburse the department of water resources with monies from the banking fund for the services provided the authority in accordance with an adopted budget.

D. The CAWCD shall provide technical support to the authority to the extent requested by the authority. That technical support shall include expertise in the annual operation and capacity of the central Arizona project aqueducts and on the use of those aqueducts to fulfill the purposes of this chapter without impeding other water deliveries by CAWCD. The CAWCD, on an annual basis, shall prepare and submit to the authority a budget showing the cost of providing the services requested by the authority for the following fiscal year. The authority may adjust its request for services, or when satisfied with the budget, may adopt it. The authority shall reimburse the CAWCD with monies from the banking fund for the services provided the authority in accordance with an adopted budget.

§ 45-2425 Arizona water banking fund

A. The Arizona water banking fund is established and shall include subaccounts based on funding sources. The authority shall administer the banking fund in accordance with this chapter.

B. The banking fund consists of all of the following:

Monies appropriated from the state general fund by the legislature for water banking purposes other than replenishment under chapter 15, article 3 of this title.
Monies appropriated from the state general fund by the legislature for replenishment under chapter 15, article 3 of this title.
Reimbursement for the distribution of long-term storage credits, collected by the authority in accordance with section 45-2457, subsection B, paragraph 2.
Monies paid to the authority by the recipients of in lieu water at a groundwater savings facility, in accordance with section 45-2455, subsection C.
Monies collected in accordance with section 45-611, subsection C, paragraph 3.
Monies deposited in the banking fund in accordance with section 48-3715.03, subsection B.
Monies paid to the authority by agencies that have entered into interstate water banking agreements with the authority in accordance with section 45-2471. All monies received through an interstate water banking agreement with the state of Nevada that are not used to purchase or store water or otherwise fulfill contractual obligations with the state of Nevada are subject to legislative appropriation.
Monies paid to the authority by persons and Indian communities in this state that have entered into water banking services agreements with the authority in accordance with section 45-2458.
Monies deposited in the fund in accordance with section 45-615.01, subsection G.

C. In addition to the monies prescribed in this section, the authority may accept any gifts, grants or donations and deposit those monies in the banking fund.

D. Monies in the banking fund are exempt from the provisions of section 35-190 relating to lapsing of appropriations. On notice from the authority, the state treasurer shall invest and divest monies in the fund as provided by section 35-313, and monies earned from investment shall be credited to the banking fund. The authority may invest the monies paid to the authority in accordance with section 45-2471 with the state treasurer pursuant to section 35-326.

E. The authority may use the banking fund to pay all reasonable expenses incurred in carrying out its duties and responsibilities in accordance with this chapter.

F. The authority shall establish a reserve subaccount in the fund for the deposit of monies to be used for the purposes of article 5 of this chapter.

§ 45-2426 Annual report

A. The commission shall make and submit to the governor, president of the senate and speaker of the house of representatives on or before July 1 of each year a report containing a full and complete account of its transactions and proceedings for the preceding calendar year.

B. The report shall contain all of the following:

An accounting of all monies expended from the banking fund.
An accounting of all monies in the banking fund remaining available to the authority.
The amount of water stored by the authority.
The number of long-term storage credits distributed or extinguished by the authority.
The purposes for which long-term storage credits were distributed or extinguished by the authority.
A description of the water banking services and interstate water banking to be undertaken by the authority during the following ten year period, and a projection of the capacity of the authority during that period to undertake those activities in addition to storing Colorado river water brought into the state through the central Arizona project for all of the following purposes:

(a) Protecting this state's municipal and industrial water users against future water shortages on the Colorado river and disruptions of operation of the central Arizona project.

(b) Fulfilling the water management objectives of this state as set forth in chapter 2 of this title.

Any other matter determined by the authority to be relevant to the policy and purposes of this chapter.

§ 45-2427 Limitation on powers

A. This chapter does not authorize the authority to exercise any right of eminent domain.

B. Except as provided in subsection E of this section:

The authority shall not store Colorado river water that would otherwise have been used in this state pursuant to a contract entered into pursuant to section 48-3703, paragraph 2, a section 5 contract under the Boulder Canyon project act (P.L. 108-6; 43 United States Code section 617) with a priority that is equal to or higher than a contract entered into pursuant to section 48-3703, paragraph 2 or any other section 5 contract under the Boulder Canyon project act entered into before September 18, 2003.
The authority shall not store for interstate water banking purposes Colorado river water that would otherwise have been used in this state.

C. The authority shall not enter into contracts with agencies in California and Nevada for the storage of water on their behalf until both of the following occur:

Regulations are in effect, promulgated by the secretary of the interior of the United States, that facilitate and allow the contractual distribution of unused entitlement under article II(b)(6) of the decree.
The director finds that the rules promulgated by the secretary of the interior adequately protect this state's rights to Colorado river water, as those rights are defined by the decree.

D. The authority shall not enter into water banking services agreements that will provide water for use outside this state. The authority may cancel any water banking services agreement without penalty or further obligation if after entering into a water banking services agreement, the authority finds that the agreement will provide water for use outside of this state. Notice of this subsection shall be included in every water banking services agreement entered into by the authority. The cancellation under this subsection shall be effective when written notice from the authority is received by all other parties to the water banking services agreement.

E. The authority may obtain and store or replenish, as applicable, any of the following excess central Arizona project water supplies as designated by CAWCD:

Any excess central Arizona project water made available by CAWCD in a year exclusively for the authority. The authority shall use any excess central Arizona project water obtained pursuant to this paragraph in a manner consistent with articles 3 and 5 of this chapter or chapter 15, article 3 of this title, including meeting Indian firming obligations, replenishing water under the Gila river Indian water settlement program and storing water for municipal and industrial purposes in times of shortage.
Any excess central Arizona project water made available by CAWCD in a year for the purpose of storing water to meet a contractual obligation of the authority under an interstate water banking agreement entered into pursuant to article 4 of this chapter if the excess central Arizona project water resulted from the acquisition of additional Colorado river water by CAWCD using monies contributed by the authority.

Article 3 Water Bank Planning and Implementation

§ 45-2451 First year banking program

By July 1, 1997, the authority shall have used its best efforts to store pursuant to this chapter a minimum of one hundred thousand acre-feet of Colorado river water in this state. The annual report of the authority to the governor, the president of the senate and the speaker of the house of representatives due on August 1, 1997 shall report the amount of water stored since the effective date of this chapter and if one hundred thousand acre-feet of water have not been stored, the reasons why this goal has not been achieved.

§ 45-2452 Storage facility inventory

A. By March 1, 1997, the authority shall prepare and assess an inventory of existing storage facilities in this state to determine whether existing storage facilities are available to meet the authority's needs for the following ten years. The authority shall give special consideration to storage facilities constructed with monies from the state water storage fund, established pursuant to section 45-897.01. The inventory shall identify the location and capacity of each storage facility and the feasibility of the authority storing water at the identified facilities.

B. In assessing the inventory, the authority shall consult with the department of water resources to determine whether storage by the authority at each storage facility identified in the inventory as a potential storage facility to be used by the authority promotes the water management objectives set forth in chapter 2 of this title.

C. In assessing the inventory, the authority shall consult with CAWCD to determine whether central Arizona project water delivery and storage are feasible at each storage facility identified in the inventory as a potential storage facility to be used by the authority.

D. Based on the consultations with the department of water resources and the CAWCD and any other relevant factors, the authority shall determine whether storage facilities exist in this state to meet the water storage needs of the authority for the following ten years. In making this determination, the authority shall maximize to the extent feasible storage facilities constructed with monies from the state water storage fund, established pursuant to section 45-897.01.

E. The authority shall adopt the storage facility inventory if the authority determines that all of the following apply to the storage facility inventory:

It represents an accurate inventory of storage facilities in this state.
It accurately identifies those storage facilities that are available for the authority's use.
It accurately determines whether additional storage facilities are needed for the authority's use during the following ten years.

F. The authority shall subsequently update the storage facility inventory at least once every five years.

§ 45-2453 Plan for additional storage facilities

A. If a storage facility inventory or an update concludes that additional storage facilities are necessary to meet the needs of the authority for the following ten years, the authority shall develop a plan for the development of additional storage facilities that specifies the type, location, date needed and capacity of additional storage facilities necessary to meet the needs of the authority.

B. In developing the plan for additional storage facilities, the authority shall consider all of the following:

The amount of additional storage capacity needed to meet the authority's water storage needs.
The advice of the department of water resources regarding where water storage would most contribute to meeting the water management objectives set forth in chapter 2 of this title.
The advice of CAWCD regarding the feasibility of delivering and storing central Arizona project water at any proposed storage facility.
The advice of the department of environmental quality regarding any potential adverse impacts from a proposed storage facility to landowners and water users in the vicinity of any proposed storage facility.
The potential costs to the authority of facilitating the construction or development of a proposed storage facility and the cost-effectiveness of any proposed storage facility.
Whether CAWCD or other entities would be willing to construct, maintain and operate any proposed storage facility.
The way in which water stored at a proposed storage facility could be used by the authority to achieve the policy and purposes of this chapter.
Any other factor the authority determines to be relevant.

C. Before adopting a plan for additional storage facilities, the authority shall prepare a draft plan for additional storage facilities. The authority shall solicit public comment on the draft plan for additional storage facilities by presenting the draft plan:

To the groundwater users advisory councils for the Tucson, Phoenix and Pinal active management areas. The presentation shall be made at publicly noticed open meetings of each advisory council at which members of the public shall be allowed to comment on the draft plan for additional storage facilities.
If any proposed storage facility is located outside of an active management area, to the county board of supervisors for each county in which a proposed facility is to be located. The presentation shall be made at a publicly noticed open meeting of the county board of supervisors at which members of the public shall be allowed to comment on the draft plan for additional storage facilities.

D. The authority may revise the draft plan for additional storage facilities based on the public comment received.

E. The authority shall adopt the plan for additional storage facilities if the authority determines that the plan, when implemented, will meet the needs of the authority for the following ten years. If adopting a plan for additional storage facilities, the authority shall adopt the plan within nine months of adopting the storage facility inventory or update.

F. The authority may modify an adopted plan for additional storage facilities after soliciting public comment on the modification in accordance with subsection C of this section.

§ 45-2454 Implementation of storage facilities plan

A. The authority shall implement an adopted plan for additional storage facilities.

B. To facilitate the development or construction of additional storage facilities required by a plan, the authority shall solicit proposals from CAWCD and other entities willing to undertake the development or construction of those storage facilities. The authority may negotiate and enter into water storage agreements in accordance with section 45-2455 with CAWCD and other entities that submit proposals acceptable to the authority.

§ 45-2455 Water storage agreements; groundwater savings facilities

A. The authority may not own, develop, operate or construct storage facilities but may enter into contracts to reserve storage capacity at storage facilities and may pay reasonable compensation for those reservations.

B. The authority may enter into agreements with storage facility permit holders to store water at storage facilities and may pay reasonable compensation for the costs associated with operating and maintaining a storage facility to the extent that the storage facility is used to store water for the purposes of the authority.

C. To store water at a groundwater savings facility, the authority may enter into agreements that require the recipients of in lieu water to pay to the authority all or part of the cost of providing the in lieu water to the recipients.

D. Agreements entered into under this section shall not impede the ability of the CAWCD to meet the obligations of its central Arizona project water service contracts and subcontracts.

§ 45-2456 Annual plan of operation

A. By January 1 of each year, the authority shall adopt a plan of operation for that calendar year.

B. In developing the plan of operation, the authority shall consider all of the following:

The amount of Colorado river water available for storage.
The advice of the department of water resources regarding where water storage would most contribute to fulfilling the water management objectives set forth in chapter 2 of this title.
The advice of CAWCD regarding the amount and location of water delivery and storage that is feasible.
The respective costs of storing water at available storage facilities.
The amount of storage allowed by water storage permits held by the authority.
The monies available from the banking fund.
The way in which water stored could be used by the authority to achieve the policy and purposes of this chapter.
The obligations of the authority under any water banking services agreement into which the authority has entered.
Any other factor the authority determines to be relevant.

C. The authority shall prepare a draft plan of operation each year. The authority shall solicit public comment on the draft plan of operation by presenting the draft plan of operation:

To the groundwater users advisory councils for the Tucson, Phoenix and Pinal active management areas. The presentation shall be made at publicly noticed open meetings of each advisory council at which members of the public shall be allowed to comment on the draft plan of operation.
If any water storage during the year is to occur outside of an active management area, to the county board of supervisors for each county in which the storage is to occur. The presentation shall be made at a publicly noticed open meeting of the county board of supervisors at which members of the public shall be allowed to comment on the draft plan of operation.

D. The authority may revise the draft plan of operation based on the public comment received.

E. An adopted plan of operation shall include all of the following:

A projection of expenditures for acquiring water.
A projection of the amount of water to be acquired each month by the authority.
A projection of the cost of delivering that water through the central Arizona project to a storage facility, including fees for the operation, maintenance, pumping energy and capital costs of the central Arizona project as established by CAWCD.
A projection of expenditures for water storage and long-term storage credits, including the funding sources to be used for those expenditures.
A projection of water storage permits to be obtained and a projection of with which storage facility permit each water storage permit will be affiliated.
A projection of the amount of water to be stored, accounted for by active management area, and if water storage will occur outside of an active management area, by groundwater basin or subbasin.
A projection of the amount of long-term storage credits to be purchased by the authority, accounted for by active management area.
A projection of long-term storage credits that will be distributed or extinguished, accounted for by location where the long-term storage credits were stored, the purpose for which the distribution or extinguishment will occur and the persons to whom the long-term storage credits will be distributed.
A projection of long-term storage credits that will be stored, loaned, replaced or distributed pursuant to any water banking services agreement into which the authority has entered.
Any other matter determined to be relevant by the authority.

F. The authority may modify an adopted plan of operation.

G. The authority shall operate in accordance with its adopted or modified plan of operation.

§ 45-2457 Accounting; rules of operation

A. The authority shall develop an accounting system for the long-term storage credits accrued or purchased by the authority. The accounting system shall be designed to allow the authority to determine which funding source of the banking fund paid for each long-term storage credit accrued or purchased by the authority.

B. The authority shall operate in accordance with all of the following rules of operation:

The authority shall reserve a reasonable number of long-term storage credits accrued or purchased with general fund appropriations, other than general fund appropriations for replenishment under chapter 15, article 3 of this title, for the benefit of municipal and industrial users of Colorado river water in this state that are outside of the service area of CAWCD.
The authority may distribute long-term storage credits accrued or purchased with general fund appropriations, other than general fund appropriations for replenishment under chapter 15, article 3 of this title, for both of the following:

(a) To make water available to a municipal and industrial user of Colorado river water in this state that is outside of the service area of CAWCD, if both of the following apply:

(i) The municipal and industrial user would otherwise suffer a water shortage. The authority may distribute long-term credits to the extent reasonably necessary to offset the water shortage.

(ii) The authority collects reimbursement for the cost to the authority of replacing the long-term storage credits distributed. The authority may replace the long-term storage credits in any year it deems appropriate but shall use good faith efforts to replace the long-term storage credits at a reasonable cost to the person who is responsible for reimbursing the authority for the credits distributed.

(b) To make water available to CAWCD to the extent necessary for CAWCD to meet the demands of its municipal and industrial subcontractors, if all of the following apply:

(i) CAWCD's normal diversions from the Colorado river have been or will be disrupted by shortages on the river or by disruptions in the operation of the central Arizona project.

(ii) The authority does not distribute for this purpose the long-term storage credits reserved in accordance with paragraph 1 of this subsection.

(iii) The authority collects reimbursement from CAWCD for the cost to the authority of replacing the long-term storage credits distributed. The authority may replace the long-term storage credits in any year it deems appropriate but shall use good faith efforts to replace the long-term storage credits at a reasonable cost to CAWCD.

The authority may distribute or extinguish long-term storage credits accrued or purchased with general fund appropriations, other than general fund appropriations for replenishment under chapter 15, article 3 of this title, to implement the settlement of water right claims by Indian communities in this state.
On request from the director, the authority may extinguish long-term storage credits accrued or purchased with general fund appropriations, other than general fund appropriations for replenishment under chapter 15, article 3 of this title, to fulfill the water management objectives set forth in chapter 2 of this title.
The authority may exchange long-term storage credits accrued or purchased with general fund appropriations for long-term storage credits held by other persons if the long-term storage credits received by the authority were stored in a location that better enables the authority to fulfill the purposes and policies of this chapter than were the long-term storage credits exchanged by the authority. For the purposes of this paragraph, the authority may make exchanges of long-term storage credits stored in one active management area for long-term storage credits stored in a different active management area or of long-term storage credits stored in one groundwater basin for long-term storage credits stored in a different groundwater basin.
The authority shall distribute or extinguish long-term storage credits accrued or purchased with monies collected in accordance with section 45-611, subsection C, paragraph 3 only for the benefit of the active management area in which the monies were collected. The authority may distribute or extinguish these long-term storage credits to the extent necessary to meet the demands of CAWCD's municipal and industrial subcontractors during times in which CAWCD's diversions from the Colorado river have been or will be disrupted by shortages on the Colorado river or by disruptions in operation of the central Arizona project, to implement the settlement of water right claims by Indian communities in this state or, on request from the director, to meet the other water management objectives set forth in chapter 2 of this title. The authority may use the monies collected in the Pinal active management area under section 45-611, subsection C, paragraph 3 to acquire long-term storage credits for replenishment purposes under chapter 15, article 3 of this title.
The authority shall distribute long-term storage credits accrued or purchased with monies deposited in the fund in accordance with section 48-3715.03, subsection B only for the benefit of the county in which the monies were collected. The authority shall distribute these long-term storage credits to CAWCD or to CAWCD's municipal and industrial subcontractors to the extent necessary to meet the demands of CAWCD's municipal and industrial subcontractors during times in which CAWCD's diversions from the Colorado river have been or will be disrupted by shortages on the Colorado river or by disruptions in operation of the central Arizona project. Long-term storage credits that are distributed to a CAWCD municipal and industrial subcontractor pursuant to this paragraph may not be sold, and the subcontractor is responsible for all fees assessed by the authority or the director for the distribution of the long-term storage credits and all costs of recovery of the long-term storage credits.
For each county within the CAWCD service area, on a determination by the authority that the number of long-term storage credits accrued or purchased with monies deposited in the fund in accordance with section 48-3715.03, subsection B exceeds the needs specified in paragraph 7 of this subsection for that county, the authority shall distribute those excess long-term storage credits to municipal water providers within that county that are at the time of distribution experiencing surface water supply shortages not associated with the central Arizona project. The authority shall distribute to each such municipal water provider the lesser of the following number of long-term storage credits:

(a) The total number of credits determined to be available by the authority under this paragraph multiplied by the percentage produced by dividing a numerator equaling the amount of revenues paid pursuant to section 48-3715.02, subsections B and C by taxpayers that are within both the boundaries of the municipal provider that is experiencing the shortage and the boundaries of the surface water supply system that is experiencing the shortage by a denominator equaling the total revenues paid pursuant to section 48-3715.02, subsections B and C by all taxpayers that are located within both the boundaries of a municipal water provider and the boundaries of a surface water supply system in the county. In making these computations, the authority shall use the amounts of revenue paid by taxpayers during the most recent tax year for which this information is available.

(b) Twenty percent of the total surface water shortage that the municipal and industrial water provider is experiencing.

The authority shall distribute or replace long-term storage credits accrued with monies collected pursuant to water banking services agreements in accordance with the terms of those agreements.
The authority shall acquire sufficient water supplies to perform its replenishment responsibilities under chapter 15, article 3 of this title. The authority shall acquire those water supplies with monies appropriated from the state general fund by the legislature for replenishment under chapter 15, article 3 of this title and to the extent that monies appropriated by the legislature for that purpose are not available, with monies collected in the Pinal active management area under section 45-611, subsection C, paragraph 3. The authority shall use the water supplies acquired pursuant to this paragraph for any replenishment activity authorized by section 45-2623 and for implementation of the southside replenishment bank established by section 45-2624, including delivering water directly to the Gila river Indian community for those purposes.

C. Any other long-term storage credits accrued or purchased by the authority may be distributed or extinguished by the authority in accordance with the policy and purposes of this chapter.

D. Except as provided by subsection B, paragraph 7 of this section and except as provided by agreements entered into by the authority, the decision to distribute or extinguish any long-term storage credit accrued or purchased by the authority is at the complete discretion of the authority.

§ 45-2457.01 Exchange of long-term storage credits; limitations; fees

A. On or before December 31, 2019, the authority may enter into agreements to exchange long-term storage credits accrued or purchased in one active management area with monies collected pursuant to section 45-611, subsection C, paragraph 3 for long-term storage credits held by other persons in another active management area, on request of the director, if the director determines both of the following:

The exchange is beneficial to water management in this state.
The exchange will not substantially impair the authority's ability to meet its firming obligation under section 45-2491.

B. The term of any agreement entered into pursuant to subsection A of this section shall not extend beyond December 31, 2026.

C. Notwithstanding section 45-2457, subsection B, paragraph 6, the authority may distribute or extinguish long-term storage credits obtained by exchange pursuant to subsection A of this section for any purpose otherwise authorized under section 45-2457, subsection B, paragraph 6 for the benefit of any active management area.

D. An exchange of long-term storage credits pursuant to subsection A of this section is exempt from any fee established by the department of water resources for an assignment of long-term storage credits pursuant to section 45-854.01.

§ 45-2458 Water banking services agreements

A. The authority may enter into a water banking services agreement under which the authority will loan long-term storage credits to a person or an Indian community in this state if all of the following apply:

The person or Indian community could have legally obtained the water that was stored to accrue the long-term storage credits that will be loaned under the agreement, could have accrued, in accordance with chapter 3.1 of this title, the long-term storage credits that will be loaned and could otherwise legally store water in accordance with the laws of this state.
The agreement requires the person or Indian community to pay the authority all costs incurred by the authority in accruing the long-term storage credits to be loaned under the agreement.
The agreement requires that the costs prescribed by paragraph 2 of this subsection for each long-term storage credit to be loaned under the agreement are to be paid to the authority before the authority distributes the credits pursuant to the agreement.
The agreement requires the person or Indian community to reimburse the authority for the costs of replacing each long-term storage credit loaned under the agreement, to the extent that cost exceeds the amount paid in accordance with paragraph 3 of this subsection.
The agreement requires the authority to use good faith efforts to replace the long-term storage credits at a reasonable cost to the person or Indian community.
The agreement requires that if the authority is unable to replace the long-term storage credits for any reason during the ten years following the distribution of the credits, the person or Indian community shall not be excused from reimbursing the costs specified in paragraph 4 of this subsection, and the person or Indian community shall pay to the authority at the end of that ten year period the approximate cost the authority will expend in replacing the credits distributed, less the amount paid pursuant to paragraph 2 of this subsection.
The agreement may provide that, subject to approval by the authority, the other party to the agreement may assign to the authority the number of long-term storage credits loaned to the party in lieu of the party paying the costs required by paragraphs 4, 5 and 6 of this section.

B. The authority may enter into a water banking services agreement with a person or Indian community to store water on behalf of the person, Indian community or other beneficiary named in the agreement, if all of the following apply:

The person, Indian community or named beneficiary could legally obtain the water that the authority will store under the agreement, could accrue long-term storage credits in accordance with chapter 3.1 of this title for the water to be stored and could otherwise legally store water in accordance with the laws of this state.
The agreement requires the person or Indian community entering into the agreement to pay to the authority all costs that are or will be incurred by the authority in entering into and executing its obligations under a water banking services agreement.

C. In determining costs of performing water banking services pursuant to subsections A and B, the authority may include the following costs:

The cost of acquiring water.
The cost of delivering that water to a storage facility, including fees for the operation, maintenance, pumping energy and capital costs of the central Arizona project, as established by the CAWCD, and other aqueducts.
The cost of storing water, including construction, operation and maintenance costs associated with using a storage facility.
A fee equivalent to the approximate amount of administrative, legal and technical expenses incurred by the authority in entering into and executing its obligations under a water banking services agreement.
Any additional costs the authority deems necessary to enter into and execute its obligations under a water banking services agreement.

D. A water banking services agreement shall require a person entering into the agreement to obtain a performance bond to ensure payment to the authority of all monies owed to the authority under the agreement, unless the person is an Indian community in this state or a government entity, political subdivision or municipal corporation organized under or subject to the constitution and laws of this state. If the person entering into the water banking services agreement is an Indian community in this state or a government entity, political subdivision or municipal corporation organized under or subject to the constitution and laws of this state, the banking services agreement may require that person to obtain a performance bond to ensure payment to the authority of all monies owed to the authority under the agreement.

Article 4 Interstate Water Banking

§ 45-2471 Interstate water banking agreements

A. The authority may negotiate and enter into interstate water banking agreements with appropriately authorized agencies in California and Nevada, if all of the following apply:

The provisions of section 45-2427, subsection C have been met.
The director and at least two other voting members of the commission vote in agreement to enter into an interstate banking agreement.
The authority shall not enter into agreements with California and Nevada agencies that require the authority to reduce Arizona diversions from the Colorado river more than a total of one hundred thousand acre-feet of water in any one year.
No interstate banking agreement may be inconsistent with the decree.

B. In each interstate water banking agreement, the authority may agree to store Colorado river water in Arizona so that the stored water may be used in place of Arizona diversions from the Colorado river in years in which the California or Nevada agency requests water from the authority.

C. In each interstate water banking agreement, the California or Nevada agency shall agree to pay to the authority all costs that are or will be incurred by the authority in storing and recovering Colorado river water pursuant to the interstate banking agreement. The costs include all of the following:

The cost of acquiring Colorado river water.
The cost of delivering that Colorado river water through the central Arizona project to a storage facility, including fees for the operation, maintenance, pumping energy and capital costs of the central Arizona project as established by CAWCD.
Amounts equivalent to taxes ordinarily paid by CAWCD subcontractors and their customers to pay for the repayment, operation and maintenance costs of the central Arizona project, to the extent those equivalent amounts are not collected by paragraph 8 of this subsection.
The cost of storing that Colorado river water.
The cost of constructing, operating and maintaining a storage facility to the extent that facility stores water for the California or Nevada agency.
The cost of recovering the stored water and delivering it to Colorado river water users in this state to use in place of Colorado river water that would otherwise be used.
A fee equivalent to the approximate amount of administrative, legal and technical expenses incurred by the authority in storing water for the California or Nevada agency, recovering that stored water and making an equivalent amount of Colorado river water available to the California or Nevada agency.
Any fee paid in lieu of taxes pursuant to section 48-3715, subsection B by the authority in acquiring the water to be stored.

D. In each water banking agreement, the authority shall agree that in years in which the California or Nevada agency requests recovery of water stored in Arizona, the authority shall cause a decrease in Arizona diversions from the Colorado river by the amount of water requested for recovery by the California or Nevada agency, thus creating unused entitlement for delivery to that agency by the United States secretary of the interior pursuant to article ii(b)(6) of the decree. These banking agreements may provide that during years when the secretary of the interior has declared a shortage on the Colorado river, no decrease in Arizona diversions shall be required.

E. Each interstate banking agreement shall specify that if the California or Nevada agency breaches the terms of the agreement the authority shall cease creating unused entitlement for that entity until the breach is cured.

§ 45-2472 Distribution of long-term storage credits

A. The authority may distribute long-term storage credits accrued through the use of monies paid by California and Nevada agencies pursuant to interstate banking agreements to CAWCD or other users of Colorado river water in this state, if both of the following apply:

CAWCD or other water user agrees to use the long-term storage credits to replace diversions that otherwise would have been made from the Colorado river.
CAWCD or other water user agrees to reduce its diversion of Colorado river water in years in which the authority is obligated to recover stored water on behalf of a California or Nevada agency in an amount equivalent to the long-term storage credits distributed.

B. The authority may pay from the monies collected from the California or Nevada agency in the banking fund to CAWCD or other users of Colorado river water that have agreed to reduce diversions from the Colorado river in accordance with subsection A the amount necessary to compensate CAWCD or other water user for increased costs incurred in recovering and using the stored water in place of diverting Colorado river water.

§ 45-2473 Arizona water banking authority; interstate water banking; accounting

(Conditionally Rpld.)

A. For each year during which the Arizona water banking authority is owed or receives monies pursuant to an interstate water banking agreement with the state of Nevada, or any agency or political subdivision of the state of Nevada, including the southern Nevada water authority, the Arizona water banking authority shall provide a full report to the joint legislative budget committee that accounts for all of the monies received through the interstate water banking agreement and shall account for all disbursements made with those monies, including monies used to purchase or store water or otherwise fulfill contractual obligations with the state of Nevada under that agreement. The Arizona water banking authority shall include in these reports any prepaid monies to the central Arizona project, any monies received under the agreement that are placed in an account with the state treasurer and any contract that obligates the Arizona water banking authority to pay or disburse these monies to any other entity, including the central Arizona project.

B. The Arizona water banking authority shall submit the report prescribed in subsection A of this section to the joint legislative budget committee on or before October 1 following the fiscal year for which the report is made.

C. Pursuant to section 35-115, the budget request for the department of water resources shall include a separate accounting of the Nevada interstate water banking subaccount. This information shall appear in the same format and detail as required for the Arizona water banking fund.

D. The Arizona water banking authority shall not spend, encumber, lend or in any other way use the monies received pursuant to the interstate water banking agreement except to pay the costs directly incurred in meeting the Arizona water banking authority’s obligations pursuant to the agreement and section 45-2425.

Article 5 Indian Firming Measures

§ 45-2491 State commitments to firm Indian settlement water

A. The authority shall act as agent for this state in meeting this state's obligation to deliver water in times of shortage pursuant to Public Law 108-451, fulfilling the requirements of sections 105, 207(c)(I)(ii) and 302(b)(8), and the Indian firming measures established pursuant to this article. In carrying out this obligation the authority may:

Store water at permitted recharge facilities for the purpose of Indian firming.
Purchase long-term storage credits for the purpose of Indian firming using the funding sources identified in subsection B of this section but only after the authority has stored or scheduled for storage all available excess central Arizona project water or when central Arizona project water is otherwise unavailable or undeliverable.
Enter into contracts or agreements with the United States and Indian communities for storage, recovery or direct delivery of water for Indian firming.
Enter into leasing agreements with one or more Indian communities in partnership with other entities for non-Indian agricultural priority or Indian priority central Arizona project water.
Enter into contracts for the use of water sources including Colorado river water, surface water other than Colorado river water and effluent.
Enter into contracts with eligible entities for the use of imported groundwater from allowable groundwater basins pursuant to sections 45-552, 45-553 and 45-554 for the purposes of Indian firming.
Enter into agreements with a multi-county water conservation district established pursuant to title 48, chapter 22 for delivery of water to Indian communities.
Subject to periodic review of progress toward meeting this state’s Indian firming obligation, allow for the use of existing long-term storage credits developed from withdrawal fees collected pursuant to section 45-611, subsection C, paragraph 3.
Transfer long-term storage credits to a multi-county water conservation district established pursuant to title 48, chapter 22 for recovery and subsequent delivery to Indian communities in times of shortage.
Enter into agreements for the recovery of long-term storage credits for purposes of Indian firming.

B. Indian firming measures established pursuant to this article shall include funding from the following sources:

Legislative appropriations provided for Indian firming on an annual basis to carry out Indian firming measures.
To the extent necessary to carry out Indian firming measures after expenditure of legislative appropriations, the authority may use withdrawal fees collected from the Phoenix, Pinal and Tucson active management area water management accounts.

Chapter 15 Gila River Indian Community Water Settlement Program

Article 1 Administration

§ 45-2601 Definitions

Unless the context otherwise requires, the terms defined in sections 45-402 and 45-802.01 have the same meaning in this chapter and for the purposes of this chapter:

"Central protection zone" means the central protection zone established under section 45-2602.
"Community" means the Gila river Indian community, a government composed of members of the Pima tribe and the Maricopa tribe and organized under section 16 of the act of June 18, 1934 (25 United States Code section 476).
"Dam" has the meaning prescribed in section 45-1201 on January 1, 2005.
"Designed storage capacity" means the storage capacity in acre-feet of a reservoir at the elevation of the lowest spillway in the dam impounding water in the reservoir, as the dam was originally constructed.
"Eastern protection zone" means the eastern protection zone north or the eastern protection zone south.
"Eastern protection zone north" means the eastern protection zone north established under section 45-2602, subsection A.
"Eastern protection zone south" means the eastern protection zone south established under section 45-2602, subsection A.
"Gila river maintenance area" means the Gila river maintenance area established under section 45-2603, subsection A.
"Gila river maintenance area impact zone" means the Gila river maintenance area impact zone established under section 45-2603, subsection B.
"Globe equity decree" means the decree dated June 29, 1935 and entered in United States of America v. Gila valley irrigation district, Globe equity No. 59, et al. by the United States district court for the district of Arizona and includes all court orders and decisions supplemental to that decree.
"Industrial use" means all of the following:

(a) A nonirrigation use of water commenced after December 31, 2002 that is not supplied by a municipal provider, including animal industry use and expanded animal industry use.

(b) A use of groundwater commenced before January 1, 2003 by a holder of a type 1 nonirrigation grandfathered right in existence on December 31, 2002, other than a type 1 nonirrigation grandfathered right held by a municipal provider and other than a use under another groundwater right or permit, in excess of the amount allowed under the type 1 nonirrigation grandfathered right.

(c) A use of groundwater commenced before January 1, 2003 by a holder of a type 2 nonirrigation grandfathered right in existence on December 31, 2002, other than a type 2 nonirrigation grandfathered right held by a municipal provider, in excess of the amount allowed under the right and for which the holder has no other groundwater right.

(d) A use of groundwater commenced before January 1, 2003 by a holder of a general industrial use permit issued under section 45-515 and in existence on December 31, 2002, other than a use under another groundwater right or permit, in excess of the amount allowed under the general industrial use permit.

"Irrigation use" means the use of water on two or more acres of land to produce plants or parts of plants for sale or human consumption, or for use as feed for livestock, range livestock or poultry, as defined in section 3-1201.
"Municipal acre” means the acre or acres of land within a protection zone, on which water pumped from within a protection zone is supplied by a municipal provider, on which water use was first commenced after December 31, 2002 and for which the water use is reported pursuant to section 45-632, 45-875.01 or 45-2602.
"Municipal provider" means a city, town, private water company or special taxing district established pursuant to title 48 that supplies water for nonirrigation use.
"Municipal use" means a nonirrigation use of water commenced after December 31, 2002 and supplied by a municipal provider on municipal acres.
"Nonirrigation use" means a use of water withdrawn from a well, other than an irrigation use.
"Reservation" means the Gila river Indian community reservation.
"Settlement agreement" means the agreement entitled the "Gila river Indian community water rights settlement agreement", dated February 4, 2003 between the community, this state and other parties, as amended before December 21, 2005, a copy of which is on file in the department.
"Southside protection zones" means the eastern protection zone north, the eastern protection zone south, the western municipal protection zone, the western municipal and industrial protection zone and the central protection zone.
"Stockpond" means a pond that has a capacity of not more than fifteen acre-feet and that is used solely for watering livestock or wildlife. Stockpond does not include a pond used primarily for fishing or for the culturing of fish.
"Stored water" means water that has been stored or saved underground pursuant to a storage permit issued under chapter 3.1 of this title.
"Underground water" means water, other than stored water, withdrawn from a well.
"Water company" means either of the following:

(a) A private water company that as of January 1, 2000 was regulated as a public service corporation by the Arizona corporation commission and was withdrawing underground water from lands now within the eastern protection zone north.

(b) Any successor of a private water company described in subdivision (a) of this paragraph.

"Western municipal and industrial protection zone" means the western municipal and industrial protection zone established under section 45-2602, subsection A.
"Western municipal protection zone" means the western municipal protection zone established under section 45-2602, subsection A.
"Western protection zones" means the western municipal protection zone and the western municipal and industrial protection zone.

§ 45-2602 Establishment of southside protection zones; reporting requirements

A. The following southside protection zones are established on the effective date of this section:

The eastern protection zone north.
The eastern protection zone south.
The western municipal and industrial protection zone.
The western municipal protection zone.
The central protection zone.

B. The boundaries of the southside protection zones established under subsection A are shown on the maps that are dated March 25, 2002 and that are on file in the department. The maps shall be available for examination by the public during regular business hours.

C. Each person in the Pinal active management area who withdraws underground water during a calendar year in a southside protection zone established under this section, other than the central protection zone, shall file an annual report with the director no later than March 31 of each year for the preceding calendar year. The report shall contain the following information in addition to any other information required by section 45-632:

The amount of underground water withdrawn within the southside protection zone and the name of the protection zone.
If the underground water was used for a nonirrigation use, the purpose for which the underground water was used, the location of the use, the acreage of the parcel or parcels of land on which the underground water was used and the date the use commenced.
The amount of any water replenished during the year pursuant to section 45-2611, subsection B, paragraph 2, the water use for which the water was replenished and the manner in which the water was replenished.
The amount of any water replaced during the year pursuant to section 45-2611, subsection B, paragraph 3, the water use for which the water was replaced and the manner in which the water was replaced.

D. A person who is required to file an annual report for a year under subsection C of this section:

Shall use a water measuring device approved by the director unless exempt under section 45-604.
Shall maintain current accurate records of the person's withdrawals, transportation, deliveries and use of underground water as prescribed by the director.
May combine the report with an annual report for the same year filed under section 45-632.
Shall comply with the requirements prescribed in section 45-632, subsections N, O and P and is subject to the penalties prescribed in section 45-632, subsection O as if the report was required by section 45-632.

E. A person who withdraws underground water from an exempt well is exempt from the record keeping and reporting requirements of subsections C and D of this section. For the purposes of this subsection, "exempt well" means a well that has a pump with a maximum capacity of not more than thirty-five gallons per minute, that is used to withdraw underground water and that would qualify as an exempt well under section 45-454 if used to withdraw groundwater.

F. If stored water is withdrawn in the Pinal active management area in a southside protection zone established under this section, other than the central protection zone, the annual report filed under section 45-875.01, subsection D shall include:

The amount of stored water withdrawn within the southside protection zone and the name of the protection zone.
If the stored water was used for a nonirrigation use, the purpose for which the water was used, the acreage of the parcel or parcels of land on which the water was used, the location of the use and the date the use commenced.
The identification of the storage facility in which the water was stored.
The amount of any water replenished during the year pursuant to section 45-2611, subsection B, paragraph 2, the water use for which the water was replenished and the manner in which the water was replenished.
The amount of any water replaced during the year pursuant to section 45-2611, subsection B, paragraph 3, the water use for which the water was replaced and the manner in which the water was replaced.

§ 45-2603 Establishment of Gila river maintenance area and Gila river maintenance area impact zone; notice of intention to drill

A. The Gila river maintenance area is established on the effective date of this section. The boundaries of the Gila river maintenance area are shown on the map that is dated July, 2002 and that is on file in the department. The map shall be available for examination by the public during regular business hours.

B. The Gila river maintenance area impact zone is established on the effective date of this section. The boundaries of the Gila river maintenance area impact zone are shown on the map that is dated July, 2002 and that is on file in the department.

C. If a proposed well will withdraw water within the Gila river maintenance area impact zone established under subsection B of this section, as determined pursuant to section 45-2641, subsection A, and the water will be used to irrigate lands within the Gila river maintenance area established under subsection A of this section and outside of Cochise county, the notice of intention to drill filed pursuant to section 45-596 shall include one of the following:

Proof that the lands to be irrigated were irrigated with water from any source at any time from January 1, 2000 through the effective date of this section.
Proof that the irrigation is allowed under the exemptions prescribed in section 45-2641, subsection B, paragraph 1, 2 or 4.

§ 45-2604 Conservation requirements for persons using groundwater in central protection zone no less restrictive than in third management plan

Notwithstanding any other law, beginning on the effective date of this section, when adopting or modifying a management plan for the Pinal active management area pursuant to chapter 2, article 9 of this title, the conservation requirements adopted by the director for persons using groundwater within the central protection zone shall be no less restrictive than the conservation requirements for persons using groundwater within the central protection zone as established in the management plan for the Pinal active management area for the third management period in effect on January 1, 2005 or as adjusted after that date as a result of judicial review or administrative review pursuant to section 45-570 or 45-575.

Article 2 Transportation of Underground Water and Stored Water Away from Eastern Protection Zones and Western Protection Zones

§ 45-2611 Transportation of underground water and stored water away from an eastern protection zone or western protection zone prohibited; exceptions

A. Except as provided in subsection B of this section, beginning on the effective date of this section, underground water or stored water withdrawn in an eastern protection zone or a western protection zone may not be transported away from the protection zone in which the water was withdrawn if the transportation is for a nonirrigation use.

B. Subsection A of this section does not apply to any of the following:

The transportation of underground water or stored water away from an eastern protection zone or a western protection zone for a nonirrigation use in an annual amount that does not exceed the highest annual volume of underground water or stored water transported away from the same protection zone for that use during calendar years 1999 through 2001.
The transportation of underground water or stored water away from an eastern protection zone or a western protection zone for a nonirrigation use if the person transporting the underground water or stored water replenishes the water as provided in section 45-2625 within twenty-four months after the end of the calendar year in which the transportation occurs.
The transportation of underground water or stored water away from an eastern protection zone or a western protection zone for a nonirrigation use if the person transporting the underground water or stored water replaces the water with an equivalent amount of water imported into that protection zone within the same calendar year in which the transportation occurs.
The transportation of stored water away from an eastern protection zone or a western protection zone if the stored water was originally stored in the protection zone from which the water was recovered.
The transportation of underground water or stored water between the eastern protection zone north and the eastern protection zone south.
The transportation of underground water or stored water between the western municipal and industrial protection zone and the western municipal protection zone if the water is transported for a municipal use on municipal acres.
Through 2023, the transportation of underground water and stored water withdrawn by a water company within an eastern protection zone and transported by the water company for municipal uses outside of the eastern protection zones. For the purposes of this paragraph, stored water does not include any water stored within an eastern protection zone and recovered within that protection zone.
Beginning with calendar year 2024, the annual transportation of up to one thousand two hundred seventy-five acre-feet of underground water and stored water withdrawn by a water company within the eastern protection zones and transported by the water company for municipal uses outside of the eastern protection zones. For the purposes of this paragraph, stored water does not include any water stored within an eastern protection zone and recovered within that protection zone.

Article 3 Replenishment of Underground Water and Stored Water Withdrawn in Eastern Protection Zones and Western Protection Zones

§ 45-2621 Definitions

In this article, unless the context otherwise requires:

"Authority" means the Arizona water banking authority established by section 45-2421 or its successor.
"Community's account" means the account established for the community in the southside replenishment bank pursuant to section 45-2624.
"Industrial acre" means the acre or acres in an eastern protection zone or in the western municipal and industrial protection zone on which water is used for an industrial use and for which the water use is reported to the director under section 45-632, 45-875.01 or 45-2602.
"Southside replenishment obligation" means a replenishment obligation calculated under section 45-2622.

§ 45-2622 Annual southside replenishment obligations

A. No later than October 1 of each calendar year after 2007, the director shall calculate the southside replenishment obligations for the preceding calendar year and notify the authority of the amount of the obligations.

B. The director shall calculate the southside replenishment obligations for a calendar year as follows:

The director shall calculate the municipal and industrial replenishment obligation for the western municipal and industrial protection zone for the year as follows:

(a) Determine the total amount of underground water and stored water withdrawn during the year from within the western municipal and industrial protection zone for municipal uses within a western protection zone and the total amount of underground water and stored water withdrawn during the year from within the western municipal and industrial protection zone for industrial uses within the western municipal and industrial protection zone, as reported to the director under sections 45-632, 45-875.01 and 45-2602. For the purposes of this subdivision, stored water does not include any water stored at a storage facility located within the western municipal and industrial protection zone.

(b) Multiply the total number of municipal acres and industrial acres within the western protection zones on which the water determined in subdivision (a) of this paragraph was used during the year by two acre-feet.

(c) Subtract the product in subdivision (b) of this paragraph from the volume in subdivision (a) of this paragraph. The result is the municipal and industrial replenishment obligation for the western municipal and industrial protection zone for the year, except that if the result is less than zero, there is no replenishment obligation.

The director shall calculate the municipal replenishment obligation for the western municipal protection zone for the year as follows:

(a) Determine the total amount of underground water and stored water withdrawn during the year from within the western municipal protection zone for municipal uses within a western protection zone, as reported to the director under sections 45-632, 45-875.01 and 45-2602. For the purposes of this subdivision, stored water does not include any water stored at a storage facility located within the western municipal protection zone.

(b) Multiply the total number of municipal acres within the western protection zones on which the water determined in subdivision (a) of this paragraph was used during the year by two acre-feet.

(c) Subtract the product in subdivision (b) of this paragraph from the volume in subdivision (a) of this paragraph. The result is the municipal replenishment obligation for the western municipal protection zone for the year, except that if the result is less than zero, there is no replenishment obligation.

The director shall calculate the municipal and industrial replenishment obligation for the eastern protection zone north for the year as follows:

(a) Determine the total amount of underground water and stored water withdrawn during the year from within the eastern protection zone north for municipal uses and industrial uses within an eastern protection zone, as reported to the director under sections 45-632, 45-875.01 and 45-2602. For the purposes of this subdivision, stored water does not include any water stored at a storage facility located within the eastern protection zone north.

(b) Determine the total amount of underground water and stored water withdrawn during the year by a water company from within the eastern protection zone south and used for municipal uses within the eastern protection zone north. For the purposes of this subdivision, stored water does not include any water stored at a storage facility located within the eastern protection zone south.

(d) Multiply the total number of municipal acres and industrial acres within the eastern protection zones on which the water determined in subdivision (c) of this paragraph was used during the year by 2.33 acre-feet.

(e) Subtract the product in subdivision (d) of this paragraph from the sum in subdivision (c) of this paragraph. The result is the municipal and industrial replenishment obligation for the eastern protection zone north for the year, except that if the result is less than zero, there is no replenishment obligation.

The director shall calculate the municipal and industrial replenishment obligation for the eastern protection zone south for the year as follows:

(a) Determine the total amount of underground water and stored water withdrawn during the year from within the eastern protection zone south for municipal uses and industrial uses within an eastern protection zone, as reported to the director under sections 45-632, 45-875.01 and 45-2602. For the purposes of this subdivision, stored water does not include any water stored at a storage facility located within the eastern protection zone south.

(d) Multiply the total number of municipal acres and industrial acres within the eastern protection zones on which the water determined in subdivision (a) of this paragraph other than water determined in subdivision (b) of this paragraph was used during the year by 2.33 acre-feet.

(e) Subtract the product in subdivision (d) of this paragraph from the difference in subdivision (c) of this paragraph. The result is the municipal and industrial replenishment obligation for the eastern protection zone south for the year, except that if the result is less than zero, there is no replenishment obligation.

The director shall calculate the irrigation replenishment obligation for the western municipal and industrial protection zone and the western municipal protection zone for the year as follows:

(a) Determine the total amount of underground water and stored water withdrawn during the year from within the western municipal and industrial protection zone and the western municipal protection zone and used for the irrigation of lands within those protection zones, as reported to the director on the annual reports required by sections 45-632, 45-875.01 and 45-2602. For the purposes of this subdivision, stored water does not include any water stored at a storage facility located within the western municipal and industrial protection zone or the western municipal protection zone.

(b) For each farm within the western municipal and industrial protection zone and the western municipal protection zone for which an annual report is filed under section 45-632, 45-875.01 or 45-2602 for the year, calculate the maximum amount of groundwater that may be used on the farm for irrigation purposes during the year without causing the flexibility account for the farm to be in arrears in excess of the amount allowed under section 45-467, subsection I. In making this calculation, the director shall use the irrigation water duty established for the farm for the third management period pursuant to section 45-566, subsection A, paragraph 1.

(d) Subtract the amount in subdivision (c) of this paragraph from the amount in subdivision (a) of this paragraph. The difference is the irrigation replenishment obligation for the year for the western municipal and industrial protection zone and the western municipal protection zone, except that if the difference is less than zero, there is no replenishment obligation.

The director shall calculate the irrigation replenishment obligation for the eastern protection zone north and the eastern protection zone south for the year as follows:

(a) Determine the total amount of underground water and stored water withdrawn during the year from within the eastern protection zone north and the eastern protection zone south and used for the irrigation of lands within those protection zones, as reported to the director on the annual reports required by section 45-632, section 45-875.01, subsection D and section 45-2602. For the purposes of this subdivision, stored water does not include any water stored at a storage facility located within the eastern protection zone north or the eastern protection zone south.

(b) For each farm within the eastern protection zone north and the eastern protection zone south for which an annual report is filed under section 45-632, 45-875.01 or 45-2602 for the year, calculate the maximum amount of groundwater that may be used on the farm for irrigation purposes during the year without causing the flexibility account for the farm to be in arrears in excess of the amount allowed under section 45-467, subsection I. In making this calculation, the director shall use the irrigation water duty established for the farm for the third management period pursuant to section 45-566, subsection A, paragraph 1.

(d) Subtract the amount in subdivision (c) of this paragraph from the amount in subdivision (a) of this paragraph. The difference is the irrigation replenishment obligation for the year for the eastern protection zone north and the eastern protection zone south, except that if the difference is less than zero, there is no replenishment obligation.

Through 2023, the director shall calculate the water company replenishment obligation for the year by determining the amount of underground water and stored water withdrawn during the year from within the eastern protection zones by a water company and transported for municipal uses outside of the eastern protection zones and then subtracting from that amount one thousand two hundred seventy-five acre-feet. The difference is the water company replenishment obligation for the year, except that if the difference is less than zero, there is no replenishment obligation. For the purposes of this paragraph, stored water does not include any water stored at a storage facility located within an eastern protection zone and recovered within that protection zone.

§ 45-2623 Satisfaction of southside replenishment obligations

A. The authority shall satisfy the southside replenishment obligations for a particular year no later than June 1 of the third calendar year following that year, except that the authority shall satisfy the irrigation replenishment obligations described in section 45-2622, subsection B, paragraphs 5 and 6 for a particular year no later than June 1 of the fifth calendar year after that year.

B. A southside replenishment obligation for a year is satisfied when the authority performs one or more of the replenishment activities described in subsection C of this section in an amount equal to the replenishment obligation.

C. The authority shall satisfy a southside replenishment obligation for a year by performing one or more of the following replenishment activities, as applicable:

For any replenishment obligation, the authority may deliver water acquired by the authority under chapter 14 of this title to the community for direct use or for underground storage and recovery within the reservation. The authority shall not deliver water to the community under this paragraph unless the community agrees in writing to accept the water and specifies in writing the locations, times and quantities of the deliveries.
For a replenishment obligation applicable to the western municipal and industrial protection zone or the western municipal protection zone, the authority may extinguish long-term storage credits earned or acquired by the authority under chapter 3.1 of this title, as authorized by chapter 14 of this title, and to which both of the following apply:

(a) The credits were earned within five years before the date the credits are extinguished.

(b) The credits were earned for the storage of water in the western municipal and industrial protection zone or the western municipal protection zone.

For a replenishment obligation applicable to the eastern protection zone north or the eastern protection zone south, the authority may extinguish long-term storage credits earned or acquired by the authority under chapter 3.1 of this title, as authorized under chapter 14 of this title, and to which both of the following apply:

(a) The credits were earned within seven years before the date the credits are extinguished.

(b) The credits were earned for the storage of water in the eastern protection zone north or the eastern protection zone south.

For any replenishment obligation, the authority may debit the community’s account in the southside replenishment bank established under section 45-2624 in an amount not to exceed the amount of water in the account.

D. The authority shall maintain in its records an account of the replenishment activities performed by the authority to satisfy a southside replenishment obligation. Any water delivered to the community under subsection C, paragraph 1 of this section, any long-term storage credits extinguished under subsection C, paragraphs 2 and 3 of this section and any debits registered to the southside replenishment bank under subsection C, paragraph 4 of this section shall be applied toward the satisfaction of a replenishment obligation on an acre-foot per acre-foot basis.

E. After the authority performs a replenishment activity under subsection C of this section, the authority shall notify the community that the replenishment activity has been performed and identify the replenishment obligation for which the activity was performed.

§ 45-2624 Southside replenishment bank; credits

A. The southside replenishment bank is established as a separate bank in the records of the authority. The authority shall establish an account in the southside replenishment bank for the community.

B. Beginning with the first calendar year in which this section becomes effective, the authority shall annually deliver to the community in the manner provided in subsection D of this section, and at no cost to the community, not less than one thousand acre-feet of water acquired by the authority under chapter 14 of this title until the community's account has a credit balance of fifteen thousand acre-feet. The authority shall register one credit to the community's account for each acre-foot of water delivered to the community under this subsection.

C. If any debit registered to the southside replenishment bank under section 45-2623, subsection C, paragraph 4 causes the community’s account to have a credit balance of less than five thousand acre-feet, the authority shall deliver water to the community in the manner provided in subsection D of this section in an amount sufficient to bring the balance up to at least five thousand acre-feet by the end of the calendar year.

D. The authority shall enter into an intergovernmental agreement with the community pursuant to title 11, chapter 7, article 3, which shall describe in detail the procedures for the delivery of water to the community under this section, including the method by which the community will schedule and order water that the authority is required to deliver to the community under subsections B and C of this section. The procedures shall not require the authority to deliver in any month more than eleven per cent of the water required to be delivered during a year under subsection B of this section.

§ 45-2625 Replenishment related to transportation of underground water or stored water away from an eastern protection zone or a western protection zone for nonirrigation use

If a person transporting underground water or stored water away from an eastern protection zone or a western protection zone for a nonirrigation use elects to replenish the underground water or stored water so that the transportation qualifies as an authorized transportation under section 45-2611, subsection B, paragraph 2, the person shall replenish the water by performing one or both of the following replenishment activities in an amount equivalent to the amount of water transported:

Pay the authority an amount of money sufficient to allow the authority to credit the community’s account by delivering water to the community in accordance with the delivery procedures set forth in the intergovernmental agreement described in section 45-2624, subsection D. Any credits registered to the community’s account under this paragraph shall not be used to meet the authority’s requirement to deliver water to the community under section 45-2624, subsection B or C.
Replenish water in any manner that is approved in writing by the community and that is not prohibited under this title.

§ 45-2626 Individual replenishment obligations of persons using underground water or stored water within an eastern protection zone or a western protection zone for industrial use; enforcement action; notice

A. If there is a municipal and industrial replenishment obligation for the eastern protection zone north for any year, as calculated under section 45-2622, subsection B, any person who withdraws underground water or stored water from within that protection zone during the year for an industrial use within an eastern protection zone in an amount that exceeds a volume calculated by multiplying the number of industrial acres associated with the industrial use by three and one-half acre-feet shall have an individual replenishment obligation for that year in the amount of the excess, except that if the industrial use was commenced prior to January 1, 2003, the replenishment obligation shall be limited to the volume of groundwater withdrawn in excess of the amount allowed under the industrial user’s type 1 nonirrigation grandfathered right, type 2 nonirrigation grandfathered right or general industrial use permit issued under section 45-515. For the purposes of this subsection, stored water does not include any water stored at a storage facility located within the eastern protection zone north.

B. If there is a municipal and industrial replenishment obligation for the eastern protection zone south for any year, as calculated under section 45-2622, subsection B, any person who withdraws underground water or stored water from within that protection zone during the year for an industrial use within an eastern protection zone in an amount that exceeds a volume calculated by multiplying the number of industrial acres associated with the industrial use by three and one-half acre-feet shall have an individual replenishment obligation for that year in the amount of the excess, except that if the industrial use was commenced prior to January 1, 2003, the replenishment obligation shall be limited to the volume of groundwater withdrawn in excess of the amount allowed under the industrial user’s type 1 nonirrigation grandfathered right, type 2 nonirrigation grandfathered right or general industrial use permit issued under section 45-515. For the purposes of this subsection, stored water does not include any water stored at a storage facility located within the eastern protection zone south.

C. If there is a municipal and industrial replenishment obligation for the western municipal and industrial protection zone for any year, as calculated under section 45-2622, subsection B, any person who withdraws underground water or stored water from within that protection zone during the year for an industrial use within that protection zone in an amount that exceeds a volume calculated by multiplying the number of industrial acres associated with the industrial use by three and one-half acre-feet shall have an individual replenishment obligation for that year in the amount of the excess, except that if the industrial use was commenced prior to January 1, 2003, the replenishment obligation shall be limited to the volume of groundwater withdrawn in excess of the amount allowed under the industrial user’s type 1 nonirrigation grandfathered right, type 2 nonirrigation grandfathered right or general industrial use permit issued under section 45-515. For the purposes of this subsection, stored water does not include any water stored at a storage facility located within the western municipal and industrial protection zone.

D. A person who has an individual replenishment obligation under subsection A, B or C of this section shall satisfy the obligation no later than twelve months after the authority sends written notice of the obligation to the person as provided in subsection E of this section. The person shall satisfy the obligation by performing one of the following replenishment activities in an amount equivalent to the replenishment obligation:

Pay the authority the actual or estimated cost of replenishing the water under section 45-2623, subsection C as determined by the authority and included in the notice described in subsection E of this section.
If approved by the authority, deliver water or long-term storage credits to the authority in the amount of the replenishment obligation.

E. No later than December 31 of each year, the authority shall send written notice to each person who has an individual replenishment obligation for the preceding year. The notice shall be sent by first-class mail to the person’s mailing address on file with the department. The notice shall specify the amount of the replenishment obligation, the authority’s actual or estimated cost of replenishing the water under section 45-2623, subsection C, the date by which the person must satisfy the replenishment obligation and the manner in which the person may satisfy the replenishment obligation.

F. If a person with an individual replenishment obligation fails to satisfy the replenishment obligation by the date specified in the written notice received from the authority, the person shall be subject to an enforcement action by the department pursuant to article 6 of this chapter.

G. The director shall include written notice of the requirements of this section in any groundwater withdrawal permit, nonirrigation grandfathered right authorization to drill a nonexempt well under section 45-596 or recovery well permit issued in an eastern protection zone or the western municipal and industrial protection zone after the effective date of this section.

Article 4 Dams Within Gila River Maintenance Area

§ 45-2631 Construction or enlargement of new dams within maintenance area; prohibited; exceptions

A. Beginning on the effective date of this section, a person shall not construct a new dam or enlarge an existing dam within the Gila river maintenance area, and the director shall not issue a permit under chapter 6 of this title to construct a new dam or enlarge an existing dam within the Gila river maintenance area.

B. This section does not apply to:

The construction or enlargement of any of the following:

(a) Flood control structures.

(b) Structures for impounding mine tailings.

(c) Impoundments within hardrock mines or industrial facilities, or both, for environmental control or process management purposes.

(d) Impoundments for diverting surface water flows around hardrock mines or industrial facilities, or both.

(e) Groundwater impoundments.

(f) Effluent impoundments.

(g) Stockponds.

(h) Impoundments that may be constructed to store water otherwise authorized to be used by a party to the settlement agreement.

(i) Dams used to divert or store water that is decreed water under the globe equity decree.

The construction of a dam that replaces a dam in existence within the Gila river maintenance area on the effective date of this section if the replacement dam is in close proximity to the original dam and the designed storage capacity of the replacement dam does not exceed the designed storage capacity of the original dam.
The enlargement of a dam within the Gila river maintenance area if the enlargement does not increase the designed storage capacity of the dam.
The modification or repair of a dam within the Gila river maintenance area as necessary to comply with the dam safety requirements in chapter 6 of this title and any rules adopted by the director under that chapter, if the modification or repair does not increase the designed storage capacity of the dam. For the purposes of this paragraph, "modification or repair of a dam" includes the desilting, lining or rehabilitation of a dam.

C. The director shall not approve an application under section 45-1207 for construction or enlargement of a dam in the Gila river maintenance area established under section 45-2603 if the applicant is prohibited from constructing or enlarging the dam, as applicable, under this section.

D. Any violations of this article are subject to enforcement under article 6 of this chapter on the effective date of article 6 of this chapter, and such enforcement may include injunctive relief that requires removal of any structures constructed in violation of this article. Any delay between the date of the alleged violation of this article and the date of any enforcement action pursuant to article 6 of this chapter shall not be a factor in determining whether to issue an injunction pursuant to article 6 of this chapter.

Article 5 Irrigation of New Lands Within Gila River Maintenance Area

§ 45-2641 Irrigation of new lands in Gila river maintenance area with water withdrawn or diverted from Gila river maintenance area impact zone prohibited; exception

A. Except as provided in subsection B of this section, a person shall not use water withdrawn or diverted within the Gila river maintenance area impact zone to irrigate land within the Gila river maintenance area unless the land was irrigated with water from any source at any time from January 1, 2000 through the effective date of this section. For the purposes of this section, water is withdrawn or diverted within the Gila river maintenance area impact zone if one of the following applies:

The water is withdrawn from a well located within the Gila river maintenance area impact zone.
The water is surface water diverted on the surface at a location within the Gila river maintenance area impact zone.
The water is withdrawn by a well located outside of the Gila river maintenance area impact zone and the well’s cone of depression captures surface water within the Gila river maintenance area impact zone as determined by a cone of depression test adopted by the superior court with jurisdiction over the general adjudication of all rights to use water in the Gila river system and source.

B. This section does not apply to:

The irrigation of lands pursuant to an appropriative right with a priority date earlier than the effective date of this section and the irrigation of lands to which the right is severed and transferred.
The irrigation of lands if the irrigation is allowed under the settlement agreement.
The irrigation of lands within the portion of the Gila river maintenance area located in Cochise county.
The irrigation of lands if the irrigation is allowed under the globe equity decree or under other rights decreed before the effective date of this section and the irrigation of lands to which the right is severed and transferred.

C. Any violations of this article are subject to enforcement under article 6 of this chapter on the effective date of article 6 of this chapter, and such enforcement may include injunctive relief that requires removal of any structures constructed in violation of this article. Any delay between the date of the alleged violation of this article and the date of any enforcement action pursuant to article 6 of this chapter shall not be a factor in determining whether to issue an injunction pursuant to article 6 of this chapter.

Article 6 Enforcement

§ 45-2651 Inspections, investigations and audits

A. The director or the director's authorized representative may enter, at reasonable times, private or public property and the owner, manager or occupant of the property shall permit the entry to ascertain compliance with this chapter.

B. Inspections and investigations under subsection A shall be on reasonable notice to the owner, manager or occupant of the property unless reasonable grounds exist to believe that such notice would frustrate the enforcement of this chapter. The director may apply for and obtain warrants. If warrants are required by law, the director shall apply for and obtain warrants for entry and inspection to carry out the administrative and enforcement purposes of this article.

C. The director shall provide a written report of each inspection, investigation and audit under this section to the person who is subject to the action.

§ 45-2652 Cease and desist order; hearing; injunctive relief

A. If the director has reason to believe that a person is violating or has violated this chapter or an order issued pursuant to this chapter, the director may give the person written notice that the person may appear and show cause at an administrative hearing in the county in which the violation is alleged to have occurred why the person should not be ordered to cease and desist from the violation.

B. The decision and order of the director under this section may take such form as the director determines to be reasonable and appropriate and may include a determination of violation, a cease and desist order, the recommendation of a civil penalty and an order directing that positive steps be taken to abate or ameliorate any harm or damage arising from the violation. The person affected may seek judicial review of the final decision of the director as provided in section 45-114, subsection B in the superior court in the county in which the violation is alleged to have occurred.

C. If the person continues the violation after the director has issued a final decision and order pursuant to subsection B of this section, the director may apply for a temporary restraining order or preliminary or permanent injunction from the superior court in the county in which the violation is alleged to have occurred according to the Arizona rules of civil procedure. A decision to seek injunctive relief does not preclude other forms of relief or enforcement against the violator.

D. Section 45-114, subsections A and B govern administrative proceedings, rehearing or review and judicial review of final decisions of the director under this section.

§ 45-2653 Violation; civil penalties

A. A person who is determined pursuant to section 45-2652 to be in violation of this chapter or an order issued pursuant to this chapter may be assessed a civil penalty in an amount not exceeding one thousand dollars per day of violation.

B. An action to recover penalties under this section shall be brought by the director in the superior court in the county in which the violation occurred.

C. In determining the amount of the penalty, the court shall consider the degree of harm caused by the violation, whether the violation was knowing or wilfull, the past conduct of the defendant, whether the defendant should have been on notice of the violation, whether the defendant has taken steps to cease, remove or mitigate the violation and any other relevant information.

D. All civil penalties assessed pursuant to this section shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund.

§ 45-2654 Violation; classification

Unless otherwise provided, a person who knowingly violates or refuses to comply with this chapter or an order issued pursuant to this chapter is guilty of a class 2 misdemeanor. A person who, after notice of a violation, continues in violation of this chapter or an order issued pursuant to this chapter is guilty of a separate offense for each day of violation.

Chapter 16 Tohono O'odham Water Settlement Program

Article 1 General Provisions

§ 45-2701 Definitions

Unless the context otherwise requires, the terms defined in sections 45-402 and 45-802.01 have the same meaning in this chapter and for the purposes of this chapter:

"Exempt well" means a well that qualifies as an exempt well under section 45-454 in effect on January 1, 2005.
"Nation" means the Tohono O'odham nation organized under a constitution approved in accordance with section 16 of the act of June 18, 1934 (25 United States Code section 476).
"Nonexempt well" means any well, including a recovery well, that does not qualify as an exempt well or a replacement well.
"Replacement well" means a well that qualifies as a replacement well at approximately the same location under the rules adopted by the director pursuant to section 45-579, subsection B and that is no more than six hundred sixty feet from the well it is replacing.
"Reservation" means the San Xavier Indian reservation established by executive order of July 1, 1874.
"Tohono O'odham settlement agreement" means the agreement dated April 30, 2003 between the nation, this state and other parties, as amended before the effective date of this section, a copy of which is on file in the department.

§ 45-2702 Jurisdiction

The superior court that has jurisdiction over the general adjudication of all rights to use water in the Gila river system and source has jurisdiction over all civil actions relating to the interpretation and enforcement of all of the following:

Title III of the Arizona water settlements act (P.L. 108-451), including sections 312(d) and 312(h).
The Tohono O'odham settlement agreement.
The groundwater protection program established pursuant to article 2 of this chapter.

Article 2 San Xavier Reservation Water Protection Program

§ 45-2711 Applications to drill nonexempt wells in the Tucson active management area; well impact analysis; requirements; exception

A. Except as provided in subsections B and E of this section, in the Tucson active management area, on receipt of an application to drill a new nonexempt well, including a notice of intention to drill a new nonexempt well under section 45-596, the director shall conduct a hydrologic analysis to determine the projected impacts of the proposed withdrawals from the well on the water levels at the exterior boundaries of the reservation. The director shall conduct the analysis using the methodology used by the director to determine well impacts under the rules adopted by the director under section 45-598. If the director determines that the projected withdrawals from the well over the initial five-year period of withdrawals will cause a water level decline of ten feet or more at any point on the exterior boundaries of the reservation, the director shall deny the application unless the applicant obtains and submits to the director the nation’s written consent to drill the well.

B. Except as provided in subsection E of this section, if the director receives an application to drill a new nonexempt well, including a notice of intention to drill a new nonexempt well under section 45-596, at a location within two miles of the exterior boundaries of the reservation and the combined maximum pumping capacity of all proposed wells included in the application that will be located within two miles of the exterior boundaries of the reservation is five hundred gallons per minute or more, the director shall deny the application to drill the well unless the applicant submits one of the following to the director:

A hydrologic study demonstrating to the director’s satisfaction both of the following:

(a) That the water level at the proposed well site is declining at less than an average rate of two feet per year based on annual water level data collected during the five years before the date the application was filed.

(b) That the projected withdrawals from all of the proposed wells to be located within two miles of the exterior boundaries of the reservation over the initial five-year period of withdrawals will not cause a water level decline of ten feet or more at any point on the exterior boundaries of the reservation.

A hydrologic study demonstrating to the director’s satisfaction that the projected withdrawals from all of the proposed wells to be located within two miles of the exterior boundaries of the reservation over the initial five-year period of withdrawals will not cause a water level decline of five feet or more at any point on the exterior boundaries of the reservation.
The nation’s written consent to the drilling of the well.

C. In determining the water level declines caused by a proposed well under subsection B, paragraph 1 or 2 of this section, or in determining the average annual water level change at a proposed well site under subsection B, paragraph 1 of this section, the following shall not be considered:

The effects on water levels of pumping from wells within the reservation.
The effects on water levels of underground storage facilities located within two miles of the exterior boundaries of the reservation and recovery wells located within two miles of the exterior boundaries of the reservation, except that in determining the average annual water level change at a proposed well site under subsection B, paragraph 1 of this section, the storage of water at an underground storage facility located within two miles of the exterior boundaries of the reservation shall be considered if the water is stored by the applicant or by another person on behalf of the applicant.

D. For purposes of subsection B of this section, if an applicant submits two or more applications to drill a new nonexempt well within an eighteen-month period, the applications shall be considered one application.

E. This section does not apply to an application to drill a recovery well under section 45-834.01 if the recovery well will be located within two miles of the exterior boundaries of the reservation and will be permitted to recover only water stored at an underground storage facility located within one mile of the recovery well.

F. The director shall not issue a permit under section 45-513, 45-514, 45-516, 45-517, 45-518, 45-519 or 45-519.01 if the applicant for the permit proposes to withdraw groundwater from a new well or wells and the director is required to deny the application under this section.

G. An application for a permit to withdraw groundwater pursuant to chapter 2, article 7 of this title shall include a hydrologic study described in subsection B, paragraph 1 or 2 of this section or the consent described in subsection B, paragraph 3 of this section if the applicant proposes to withdraw groundwater from a new well or wells within two miles of the exterior boundaries of the reservation and the combined maximum pumping capacity of those wells is five hundred gallons per minute or more. This subsection does not apply to an application for a general industrial use permit under section 45-515.

H. A notice of intention to drill under section 45-596 shall include a hydrologic study described in subsection B, paragraph 1 or 2 of this section or the consent described in subsection B, paragraph 3 of this section if the proposed well or wells are nonexempt wells to be located within two miles of the exterior boundaries of the reservation and the combined maximum pumping capacity of those wells is five hundred gallons per minute or more. Notwithstanding section 45-596, subsection D, the director shall not authorize the drilling of a well under section 45-596 if the director is required to deny the notice of intention to drill under this section.

I. An application for a permit to construct a new well or replacement well in a new location under section 45-599 shall include a hydrologic study described in subsection B, paragraph 1 or 2 of this section or the consent described in subsection B, paragraph 3 of this section if the proposed well or wells are within two miles of the exterior boundaries of the reservation and the combined maximum pumping capacity of those wells is five hundred gallons per minute or more. Notwithstanding section 45-599, subsection C, the director shall deny an application for a permit for a new well or a replacement well in a new location under section 45-599 if the director is required to deny the application under this section.

J. An application for a recovery well permit under section 45-834.01 shall include a hydrologic study described in subsection B, paragraph 1 or 2 of this section or the consent described in subsection B, paragraph 3 of this section if the proposed recovery well or wells are within two miles of the exterior boundaries of the reservation and the combined maximum pumping capacity of those wells is five hundred gallons per minute or more. Notwithstanding section 45-834.01, subsection B, the director shall deny an application for a recovery well under section 45-834.01 if the director is required to deny the application under this section.

§ 45-2712 Notice of well applications to nation; objection; hearing; appeal

A. Before making a decision on an application described in section 45-2711, subsection B, the director shall mail written notice of the application to the nation, including a copy of the application, and provide the nation an opportunity to object to the application in the manner provided in subsection B of this section.

B. The nation may file with the director a written objection to an application described in section 45-2711, subsection B within sixty days after the director mails written notice of the application to the nation. The grounds for objection are limited to whether the application should be denied under section 45-2711, subsection B.

C. If the nation files a timely objection to an application pursuant to subsection B of this section, the director shall schedule an administrative hearing on the objection within sixty days after receiving the objection. The administrative hearing shall be held by an administrative law judge of the office of administrative hearings under title 41, chapter 6, article 10 and the nation shall be a party to the hearing. Notwithstanding any other law, the administrative law judge shall issue a recommended decision to the director within thirty days after the close of the hearing and the director shall issue a final administrative decision within thirty days after receiving the administrative law judge’s recommended decision. The director's final administrative decision is subject to judicial review by the superior court having jurisdiction over the general adjudication of all rights to use water in the Gila river system and source if a party to the administrative hearing files an action for judicial review within thirty days after the date the director mails notice of the final administrative decision to the party.

D. If the director receives an application to drill a replacement well in the Tucson active management area at a location within two miles of the exterior boundaries of the reservation, before making a decision on the application, the director shall mail written notice of the application to the nation, including a copy of the application, and provide the nation an opportunity to object to the application in the manner provided in subsection E of this section.

E. The nation may file with the director a written objection to an application described in subsection D of this section. The written objection shall be filed within sixty days after the director mails written notice of the application to the nation. The grounds for objection are limited to whether the proposed well qualifies as a replacement well. If the nation files a timely objection to the application, the hearing and appeal provisions set forth in subsection C of this section apply.

F. If the director fails to comply with a requirement in this section, the nation may bring an action in the superior court having jurisdiction over the general adjudication of all rights to use water in the Gila river system and source to obtain an order compelling the director’s compliance.