SB 1335: water banking; annual report; posting - Arizona

Senate Engrossed Version (02/26/2026) → Chaptered Version · 7 edits

MODERATE

This bill fundamentally shifts Arizona's water management strategy from a general 'water banking' system to a specific 'groundwater savings credits' program. It allows landowners in the Phoenix and Pinal active management areas to permanently give up their historical irrigation rights in exchange for tradable credits, which can then be used by municipalities to secure long-term water supplies. The legislation also establishes a temporary permit system to allow these landowners to continue farming for two years after relinquishing their rights.

Scope change

The bill narrows the scope from a broad water banking authority to a targeted groundwater program specifically for the Phoenix and Pinal active management areas, with a potential future expansion to the Tucson area.

ELIGIBILITY

Created a new mechanism for landowners to permanently relinquish irrigation grandfathered rights in exchange for 'groundwater savings credits'.

REQUIREMENT

Established strict criteria for issuing credits, including a requirement that land must have been irrigated with groundwater in at least three of the preceding five years.

DEFINITION

Defined 'groundwater savings credits' as a new asset type that can be pledged to municipalities seeking 'assured water supply' designations.

TIMELINE

Set a deadline of December 31, 2030, after which groundwater savings credits can no longer be pledged to new water supply applications.

ENFORCEMENT

Added prohibitions preventing the use of recovered groundwater on non-essential turf, water parks, or decorative features.

SCOPE

Replaced the general 'Arizona Water Banking Authority' reporting requirements with specific rules for the new groundwater savings program.

TECHNICAL

Created a temporary permit allowing landowners to continue irrigating for two years after relinquishing their rights to manage the transition.

House Engrossed Version (06/11/2026) → Senate Engrossed Version (02/26/2026) · 4 edits · Jun 12, 2026

MODERATE

The bill was rewritten to shift focus from a 'groundwater savings credits' program to an 'Arizona Water Banking Authority' annual reporting and oversight role. The Senate version removes detailed rules for permanently relinquishing irrigation rights in exchange for credits, replacing them with a mandate for the authority to submit a comprehensive annual report on its finances, water storage, and banking activities. This change simplifies the bill from a complex operational statute into a transparency and accountability measure for the water banking entity.

Scope change

The bill's scope narrowed from establishing a specific groundwater savings program for landowners to establishing reporting and posting requirements for the Arizona Water Banking Authority.

REQUIREMENT

Removed the entire section detailing the process for landowners to permanently relinquish irrigation rights in exchange for groundwater savings credits, including eligibility criteria, credit calculations, and usage restrictions.

Added a requirement for the Arizona Water Banking Authority to submit an annual report to state officials and post it online, detailing finances, water storage, and banking services.

TIMELINE

Removed specific deadlines for adopting rules and the expiration date for temporary permits to irrigate groundwater.

SCOPE

Changed the bill's primary subject from managing groundwater savings credits to overseeing the Arizona Water Banking Authority's operations and reporting.

Introduced Version → House Engrossed Version (06/11/2026) · 7 edits · Jun 12, 2026

MODERATE

This bill fundamentally shifts Arizona's water management strategy from a general 'water banking' system to a specific 'groundwater savings credits' program. It allows landowners in the Phoenix and Pinal active management areas to permanently give up their irrigation rights in exchange for credits that can be used to secure future water supplies for municipal providers. The legislation adds strict rules to prevent the credits from being used for decorative water features or non-essential turf, ensuring water savings are directed toward critical community needs.

Scope change

The bill narrows the scope from a broad water banking authority to a targeted program specifically for groundwater in the Phoenix and Pinal active management areas, while introducing a new mechanism for Tucson.

SCOPE

Replaced the general 'Arizona Water Banking Authority' with a new 'groundwater savings credits' program focused on permanent relinquishment of irrigation rights.

ELIGIBILITY

Established specific eligibility criteria requiring land to have been irrigated with groundwater in at least three of the last five years and requiring a clean compliance history.

REQUIREMENT

Created a conversion multiplier system where Phoenix landowners receive 150 acre-feet per acre and Pinal landowners receive 100 acre-feet per acre upon relinquishing rights.

Added strict usage restrictions prohibiting the use of saved water on decorative water features, water parks, or non-essential turf.

Modified the rules for irrigation districts to explicitly include temporary permits issued under the new groundwater savings program.

TIMELINE

Set a deadline of December 31, 2030, after which groundwater savings credits can no longer be pledged to new water supply applications.

DEFINITION

Defined 'acres associated with the relinquishment' and clarified that stored water credits do not include those held by the Arizona Water Banking Authority.

water banking; annual report; posting

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