The proposed bill, SB1243, aims to create a water marketplace in Arizona, specifically for individuals with grandfathered groundwater rights in the Phoenix, Tucson, or Pinal active management areas (AMAs). It allows these individuals to sell, lease, or convey their groundwater rights, with transactions required to occur within the same AMA. Key changes from current law include the establishment of an online water exchange, mandatory disclosure of transaction costs by sellers, and the requirement that 65% of the groundwater forgone by sellers must be allocated to the buyer or lessee. Additionally, the original rights cannot be further used or conveyed during the lease period, and the conveyed groundwater is exempt from replenishment obligations.

The bill also introduces specific provisions for the Tucson active management area, allowing rights to be sold or leased for any use within that area while prohibiting transfers between different subbasins. It mandates notification to the Arizona Department of Water Resources (ADWR) regarding transaction details and includes a sunset clause that will repeal the new article after December 31, 2029. The director of ADWR is tasked with monitoring the impacts of these transactions on aquifer health and groundwater levels, ensuring that the new practices align with sustainable water management goals. Overall, SB1243 seeks to enhance the flexibility of groundwater rights transactions while maintaining regulatory oversight.

Statutes affected:
Introduced Version: 45-558, 3-201
Senate Engrossed Version: 45-558, 3-201
House Engrossed Version: 45-558, 3-201